In a rising interest rate environment, hedging investors are looking to move capital into fixed income ETFs that react in conjunction with interest rates, such as the Invesco Senior Loan ETF (NYSEArca: BKLN), which is garnering interest as of late.
BKLN’s current average volume is 4.2 million, but that has almost doubled recently. Performance has been solid with BKLN up 1.34% year-to-date, up 2.25% for the year and up 2.42% the past three years.
The higher yields offered by senior loans is an attractive option compared to a flattening yield curve by safer government debt.
BKLN tracks the S&P/LSTA U.S. Leveraged Loan 100 Index, which has been on a steady, upward trajectory ever since the Financial Crisis of 2007-08.