The $5.26 billion BKLN follows the S&P/LSTA U.S. Leveraged Loan 100 Index and holds 117 leveraged loans. BKLN’s three-month LIBOR is 2.68% and its days to reset is 24.50.
Since rates are typically reset once per quarter, senior loans typically have low durations – a measure of a bond fund’s sensitivity to changes in interest rates. The floating-rate component also offer investors an alternative method of earning yields while mitigating interest-rate risk. Consequently, bank loans are seen as an attractive substitute to traditional corporate debt in a rising rate environment.
BKLN has a 30-day SEC yield of 5.62% and is up 4% this year.
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