of Invesco Senior Loan ETF (BKLN) There is significant interest as investors seek yield in the current environment.
ETFs tracking senior bank loans have gained a lot of attention in recent weeks, with BKLN leading the industry in terms of new capital inflows. His SEC yield on the fund is 6.6%, according to Invesco’s website.
BKLN follows the market-weighted performance of the top 100 top bank loans. Todd Rosenbluth, VettaFi’s head of research, said in October that the fund would generate relatively strong returns without much interest rate risk.
Despite starting with outflows at the beginning of the year, inflows into BKLN reversed. According to VettaFi, in October he received $727 million in funding, and as of November 7, since November 1, he has had an additional $101 million flowing into the fund. increase.
A senior bank loan is a bond issued by a bank or similar financial institution to a company, repackaged and sold to investors. Senior bank loans have a floating rate and are adjusted regularly to the market, which is why they are soaring in popularity in the current rising interest rate environment.
BKLN is based on the Morningstar LSTA US Leveraged Loan 100 Index. The Fund typically invests at least 80% of its total assets in the constituent stocks that make up the index. According to Invesco’s website, the index tracks the market-weighted performance of the largest institutional leveraged loans based on market weighting, spreads and interest payments.
The Fund does not purchase all securities in the Index. Instead, it seeks to utilize sampling techniques to achieve its investment objectives. According to Invesco’s website, both the fund and the index are rebalanced and reconstituted twice a year in June and December.
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