2024-02-01 10:57:59 ET
Summary
- Floating rate investments like SRLN may see lower forward returns due to the Fed's plan to lower interest rates in 2024.
- SRLN has underperformed passive leveraged loan ETFs and has not lived up to its mandate.
- Investors interested in floating-rate leveraged loans may want to consider CLO ETFs like the JBBB ETF, which has outperformed SRLN and offers similar distribution yields with higher credit quality.
In the past year, floating rate investments like the SPDR Blackstone Senior Loan ETF ( SRLN ) have been market darlings, as they benefited from the Fed's interest rate increases and benign credit conditions. However, with the Fed set to lower rates in 2024, leveraged loans may lower forward returns in the coming quarters....
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SRLN: Underperforming Leveraged Loan Fund