My Top Pick For 7% Bank Loan Income

Rubicon Associates5.68K FollowersFollow5ShareSavePlay(13min)CommentsSummaryInvesco Senior Loan ETF (BKLN) is rated BUY as a core income portfolio holding due to its conservative ratings profile and minimal distressed exposure.BKLN offers liquidity, transparency, and low expense, tracking the 100 largest leveraged loans with a current ~7% yield and only 0.02% in distressed assets.Bank loans provide senior secured, floating-rate income with lower volatility than BDCs, but sector risks—especially software—remain material.I recommend cautious position sizing and suggest complementing BKLN with PIMCO’s LONZ, though LONZ’s unrated exposure and rising yield warrant vigilance. fengdr/iStock via Getty Images Investment Thesis Many income investors have recently been turned off (or burned) by public business development companies (“BDCs”) as market sentiment has turned against the private credit asset class (primarily public and unlisted BDCs). While I believe there is a roleThis article was written byRubicon Associates5.68K FollowersFollowRubicon Associates is headed by a Chartered Financial Analyst charter holder with over 20 years of experience in the investment management industry focused on the analysis, investment and management of fixed income and preferred stock portfolios as well as asset allocation and macro portfolios. Over the years, he has analyzed and invested in both public and private companies around the world as well as advised institutional clients on fixed income strategies, manager selection, and asset allocation. The principal has been responsible for managing nearly seven billion dollars in credit investments across the capital structure and overseeing the research and trading of credit market activities, $20 B in a short-duration fund, and was Chief Strategist at a wealth management firm. Rubicon Associates has written for Seeking Alpha, Learn Bonds, a newsletter and TheStreet.com in addition to advising institutional and private investors.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in BKLN over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. The content of this article reflects my personal views and is provided for informational and educational purposes only. It does not constitute investment advice, financial advice, or a recommendation to buy or sell any securities or financial instruments. While I strive for accuracy, the information presented may contain errors or omissions, or be based on sources believed to be reliable but not independently verified. I make no representations or warranties as to the completeness, accuracy, or timeliness of any information presented. This article is not intended to provide, and should not be relied upon for, investment, legal, tax, or accounting advice. The securities and strategies discussed may not be suitable for all investors. Past performance is not indicative of future results. All investments involve risk, including the potential loss of principal. I may hold, or have held, positions in the securities mentioned. I do not receive compensation for writing this article, nor do I intend to influence the price or trading volume of any security discussed. All opinions are subject to change without notice. This content is written strictly in a personal capacity and does not reflect the views of any employer, organization, or associated entity. Readers are strongly encouraged to conduct their own independent research and to consult with a licensed financial advisor before making any investmentSeeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.