ETFs For Higher Rates And Inflation

The PowerShares Senior Loan Portfolio (NYSE Arca: BKLN) tracks large bank loan facilities as represented by the S&P/LTSA U.S. Leveraged Loan 100 Index. Three-quarters of the portfolio’s notes are rated BB or B.

Another 100 credits populate the Highland/iBoxx Senior Loan ETF (Nasdaq: SNLN), which tracks an index that especially screens for liquidity. SNLN’s effective duration is 0.5 years. 

International exposure to the floating rate market is obtainable through the actively managed First Trust Senior Loan Fund (Nasdaq: FTSL). Eighty-six percent of FTSL’s portfolio securities are rated BB or B. The fund is primarily, but not exclusively, focused on North America (Canada, the U.S. and Mexico).

In the end…

These ETFs aren’t the only investments that could help you get through the next four years. But there’s history showing assets like these fare well in inflationary cycles.

But the past is not prelude. It may be too early to even know what future actually awaits us. As surprised as we’ve been by current events, we’d do well to keep Walt Whitman in mind: “The future is no more uncertain than the present.”

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DisclosureBrad Zigler pens's Alternative Insights newsletter. Formerly, he headed up marketing and research for the Pacific Exchange's (now NYSE Arca) ...

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