Related: Sink Into Senior Loans With This ETF
Senior loans are typically high-yield bonds, a fact highlighted by over 72% of SRLN’s holdings be rated BB-, B+ or B. Even with that exposure, there are ways SRLN’s managers work around liquidity concerns.
“While underlying loans have an extended settlement cycle, SRLN’s active managers can use their experience in trading and scale in the loan market to short settle if necessary to adequately meet redemptions. SRLN also holds roughly 7% in cash and 4% in high yield bonds to assist in managing daily liquidity,” according to SSgA.
For more information on the fixed-income assets, visit our bond ETFs category.