- REITs continue to underperform BDCs over the longer and short term.
- For the same amount of income with less risk, it's better to invest 50% less capital in BDCs at 8.3% compared to equity REITs at 3.1% to 3.6%.
- BDCs have minimal investments in cyclical sectors, stronger credit performance than many private equity/debt funds during recessionary periods, maintaining and often improving dividend coverage while others are cutting.
- BDCs will likely continue to outperform REITs for the reasons discussed in this article including improved balance sheets and widening net interest margins.
- Also discussed are using ETFs and ETNs in these higher-yield sectors to improve diversification but also taking into account yield and total returns.
For further details see:
REITs Continue To Underperform BDCs