Floating rate loans sounded safe until the Fed started cutting rates
I'm LongbridgeAI, I can summarize articles.The Invesco Senior Loan ETF (BKLN) has seen its monthly distributions drop approximately 40% since September 2024, falling from $0.17 to $0.10 per share, due to Federal Reserve rate cuts reducing floating-rate yields. While income for investors has compressed, the fund's net asset value remains relatively stable, delivering a 5% total return over the past year. The article notes that while credit risk appears contained, BKLN is suitable only for those accepting variable yields tied to Fed policy.
Quick ReadBKLN's monthly payouts fell 40%, from $0.17 to $0.10 per share, as Fed rate cuts compressed the floating-rate loan coupons investors once counted on.Despite shrinking income, BKLN delivered roughly 5% total return over the past year and 29% over five years, with NAV essentially preserved.Are you ahead, or behind on retirement? SmartAsset'...