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BlackRock faceplanted in shadow banking: $500m “receivables” were merely vibes. For BLK it’s a parking ticket; for private credit, it’s cockroach season. Don’t YOLO BLK puts; if the roaches multiply, smack HYG/JNK/BKLN or grab VIX. Shadow banking = payday loans in tuxedos. Free yield ain’t free.
BKLN or FFRHX yield will get you right. 7+ percent last time I checked. Risk is still super low.
No cash but moved 30% to CLOA and BKLN.
Floating rate bank loan ETF. Small risk of price fluctuations. Rates between 5.8-8% depending on fund. FLTR, BKLN, SRLN for example.
How about floating rate bank loans, BKLN?
Dividends from where? You can always look into private credit funds (BIZD, GBDC, BKLN are a few examples for you to research).
Stock chart puts BKLN yield at 8.35 With a NAV erosion of 6.17 over 5 years. Not bad.
How about something like BKLN or SRLN. These are ETFs that track municipal and corporate bonds. I think BKLn is at 6% or so.
BKLN … Dividend every 21 of the month
for non poors in the chat, where do you put your excess cash? I'm thinking SHV, SRLN, or BKLN
your comparison off your comparing Bank Loans to Equity CLO's you need to be using DEBT Clo's like PAAA or CLOZ or JAAA or JBBB to BKLN and SRLN(or FLRT or FLBL)
What am I missing here…BKLN is down 16% since 2011…
Good advice, or BKLN. Similar yield, Les risk, less upside though
GSY and MINT tend to do a little better than the risk-free rate, but not by very much. BOXX offers a box spread strategy that can defer taxes you'd otherwise pay on dividends in favor of the long-term CG rate. Ultra-short corporates and commercial paper proxies like SRLN, BKLN, JAAA, AAA, CLOA, etc. can boost your cash-like returns with very minimal risk. They've been excellent over the past couple of years.
SCHG, JEPI, BKLN, MO, PPA, CLOA, QQQX, NVDA, SPHD and ARCC are my biggest holdings but only like 3 months deep.
BKLN, YYY, BITO, NVDY are my top 4 dividend ETFs. Monthly divs. Ford is a good stock for divs and its value priced right now
CLOs are structured products. They are made up of the pieces of bank loans. JAAA is a really low risk credit fund because it owns the safest parts of bank loans. OXLC is an equity position of a fund that invests in the riskiest possible parts of bank loans. BKLN just owns the whole damn loan.
"Senior loans" means bank loans. They are almost all floating rate notes and have basically zero Treasury duration and long credit duration. Bank loans suck out loud for things like credit crises where rates fall (but the lack of duration means loan prices do not rise, and the lower Treasury rates reduce the loan coupon) and spreads rise (pushing loan prices down significantly). BKLN lost 20%+ fast during the start of Covid.
OXLC and ECC are CEFs that use leverage on top of CLOs. There are now CLO ETFs, which may not be mentioned in income factory. JAAA, JBBB, CLOI and CLOZ. Without the leverage the pure CLO ETFs are less volatile than the CEFs and also Senior loan ETFs like BKLN and SRLN,
Hmmm...was looking at the ETF ISPY, which has an on-going call strategy on the heavyweights of SPY, pays a heavy dividend. Tradingview and Market Watch put that dividend at 10.2% annually. Tradingview and Yahoo Financials put the total return at 13.53% since December...not that great compared to SPY. The fund was created in December 2023. I think I'll put a very small amount into it, around 1% of my portfolio...to keep BKLN company. The vast remainder of my portfolio, around 95%, I will leave in SPY, QQQ, MTUM, NVDA, SMCI, AVGO, MU. GE, a few others...you know: the guys with really \*big\* returns. I'm watching for a top to the market as well...we might be due for a short term correction. Long term I think we're still okay though. Disclaimer: I'm too much of a regard to post the above as actual reasearch. Lol. 🙈🙈
You might try BKLN...you'll still hemorrhage a small amount of principle...but the yield will be around 8.5% 
Private credit is private so can't really be in an ETF format . There are a number of BDCs like ARCC (Ares fund) and OBDC (Blue Owl fund). There are some non traded BDCs like BCRED (Blackstone) or BDEBT (BlackRock). Another alternative is a leveraged loan ETF like BKLN. These aren't private credit per se but are similar conceptually (floating rate loans usually to private equity owned companies).
I agree, USFR is safest, similar to SGOV with maybe slightly better yield. If you want any higher return, JAAA introduces very low-risk for a bit better yield. BKLN would be your next step up in yield, taking up some more risk. Those three are all very liquid, and enough to cover most of the other mentioned variations imho.
The price of BKLN would barely move on a change to the Fed funds rate, but since the fund holds bank loans which are floating rate debt, the income distribution will fall. To the extent that interest rate cuts are due to a weak economy, credit spreads could rise, and that will devalue BKLN price. In general, government rates and credit spreads are moderately negatively correlated, so I would usually expect to see BKLN decrease a little with falling government rates and increase a little with rising government rates, which is the opposite direction of vanilla bonds. The change in price would be much smaller than for vanilla bonds as well. The worst situation for BKLN is a disruption in the credit market -- if defaults are increasing, credit spreads will increase independent of other factors, and an isolated increase in credit spreads is the biggest risk.
Can you share more on what can happen that will cause price depreciation on BKLN? Will interest rate cut depreciate the price in coming months?
SPHY BKLN are only two i own.
BKLN gives you almost 10% return. It is good to hold some of it but the weight should be light.
Thanks, this is helpful! Maybe I didn't realise how risky BKLN is.
BKLN is floating rate high yield debt. It is extremely exposed to credit markets and negligibly exposed to government rates because of the floating rates (income is variable due to Treasury curve shifts, but price is variable almost exclusively due to credit spreads). It is not "very safe." Funds that I generally like are VNLA, FLOT, MINT, and JAAA. JAAA is the riskiest of the group and comes with the highest yield, but it should still be safer than BKLN because it is made up of AAA CLO tranches instead of the underlying bank loans.
Those two funds are entirely different animals. SGOV are Treasury Bills, which is as safe as it gets 😳 BKLN holds more than 80% in B and BB-rated assets. It would be best to consider a mix of both to mitigate the risk.
Whenever a recession is approaching, the low grade bond prices always drop like a rock. The fear is some companies that issue junk status bonds will not survive the recession. But you don't see that happening. ETFs such as HYG SPHY and BKLN are doing quite well. The prices of those have been slammed hard a few months ago but completely recovered and then some.
You dont have to invsest in growth stocks if you feel like the market to high invest in something like FTSL, FLBL, BKLN, FLRT, SRLN or SEIX
SGOV or USFR for a bearish position. JBBB or BKLN for a bullish position. The latest fixed 1.3% ibond is conticing too for an emergency fund. I don't like long duration bonds. Yes, a recession would cause yields to fall and bond prices to rise, but 1) the Fed isn't even considering cuts yet, so it's too early 2) Soft landing or inflation ticking back up are still possible, so it's too risky and 3) if you want to make money in the event of a recession, having a position in SGOV and purchasing equities when the market crashes is both safer and more lucrative.
From my own experience, when a recession hits, the first one to go down is the high yield bond funds. The bonds typically go down before stocks, and of all different types of bonds funds, high yield goes down first. (nobody gets HY bonds individually due to their risks) Personanlly I own SPHY & BKLN, but the weight is not that high.
The main ones popping up in my search are $SRLN, $HYLS, $FTSL, and $BKLN
Bonds can be aggressive too. BKLN is yielding 8.28% right now.
> That's what I was thinking too, I was just looking for a more aggressive strategy than Tbill and chill. You could invest in floating-rate corporate debt. JAAA, JBBB, BKLN, FLRT, FTSL, etc.
They package and sell those loans in Asset Backed Securities (ABS), can be bonds and ETFs with asset bonds packaged in them Here are a few bond ETFs that typically include asset-backed securities: 1. iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD): This ETF focuses on investment-grade corporate bonds, which may include asset-backed securities among its holdings. 2. iShares iBoxx $ High Yield Corporate Bond ETF (HYG): While primarily focusing on high-yield corporate bonds, HYG may also have exposure to high-yield asset-backed securities, which could include subprime auto ABS. 3. Invesco Senior Loan ETF (BKLN): This ETF invests in senior secured floating-rate bank loans, which may include collateralized loan obligations (CLOs), some of which contain auto loan ABS. 4. iShares iBoxx $ Investment Grade ex-Financials Corporate Bond ETF (LQDI): LQDI excludes financial sector bonds, but it may still hold non-financial asset-backed securities, including automotive ABS.
The senior loan ETF BKLN has a similar yield but you can get some capital appreciation. Senior loans are floating rate assets, which is why it's one of the best performing bond sectors recently. Other than that, there's not much else that's "low risk."
Short answer no. Better answer it depends. Let's imagine you have a fund that just owns rolling 4 week T bills. That's a floating rate fund but it holds zero coupon bills. Now imagine you securitize that fund into a single note that pays out the gains from a strategy of rolling T-bills but it's a standalone debt instrument. That would not change in price (very much) as rates move much like 4 week T bills don't move (very much) as rates move. But where FRNs do have large movements is in their spread. If you have a note that pays out 4 week T-bill return + 3%, it will trade at a huge premium. But if it's like Toyota issuing a floating note, then Toyota's corporate credit risk will fluctuate and will drive the price of the note (as Toyota's credit risk worsens, the price falls, and vice versa). Bank loans are a classic example of this. Look at something like BKLN. The price will fall when high yield credit spreads widen.
Ironically enough, also called the Stock Market Crash that almost no one has heard of 😂 “Many retail investors have used leveraged loan ETFs such as Invesco Senior Loan ETF (NYSEARCA:BKLN) to generate income. ETF structural issues might exacerbate problems caused by poor credit quality leading to large losses when the next recession occurs.”
What is that 2018 BKLN?
BKLN? I recognize that this was the Covid rate cut but I don't get the acronym
Anyone trade BKLN, and if so how do you usually play it TYIA - *Fellow Regard*
I randomly Googled "Leveraged Loan ETF" and [this was one of the first hits](https://etfdb.com/etf/BKLN/#holdings) Looks like it's mostly made up of TLB's. For context, every term loan raise I've been a part of has priced at LIBOR / SOFR + margin, which inherently floats with baseline rates. Took a look at their holdings, and the UAL TLB seems to be doing [just that - LIBOR + 275 bps](https://www.bamsec.com/filing/110465921053890/1?cik=100517&hl=13605:13877&hl_id=4yxqtmp76), although I imagine they're using some other benchmark now that LIBOR doesn't really exist (SOFR is my guess)
BKLN, HYG, if you got some money go buy some CDS, CDX.NA.IG or CDX.NA.HY in ICE OTC.
Lots of very large option trades coming across the trade flash widget. All calls, BABA (spread), GOOGL (single), BKLN (single), etc.
Anybody buying puts on high yield bonds? I did ok on BKLN puts earlier this year but I am looking for ETFs with really shitty holdings. HYG has some Carvana and a bunch of casino debt so that's the top of my list
This is interesting. So I'm looking at these mortgage ETFs, MORT and BKLN, and they have been going down over the past year, while inflation has been going up. Any idea as to why? Thanks.
True. Or keep an eye on BKLN and the other senior loan to see if they tank. If so, market must be next, I'd guess.
I would love to but since it's not in this ETF and in the mutual fund it will be hard to figure out what to buy puts on. I guess keep an eye on BKLN and see if they buy the 🍿debt?
[Like this?](https://www.barchart.com/etfs-funds/quotes/BKLN/put-call-ratios) They're coming in for FOMCs. Same thing happened in March.
BKLN was like that for March FOMC. Probably doing the same again. FOMC wraps up that day, gotta be a hedge right? Orrr let’s crash it boys?!
Yah man bankers armageddon is coming and i dont understand why cant people see it. -> Rev repo money that has been parked by them is coming down even though FED hasnt started selling their Balance sheet. -> You have got inflation that is surely out of control by now. Rates are gonna go up have to. Even 25bps more than 3 hikes would kill these bonds. Becoz we all know interest rates goes up your bond value goes down. So obv instant sell. CDS will go up eventually coz these bonds have high chances of default especially junk ones. Maybe like 2008 banks will buy CDS too behind the back. BKLN looks good bet next week. Ig max pain could happen before march 16 considering vix have stayed consistently high. Btw im not a bond specialist coz they are too complicated. But just trying to grasp more about it every single day since it drives whole stock mkt.😅
Thanks for posting OP. I intend to read it in detail as soon as I'm sober. Let's say I think, that banker armageddon is coming next week and it's going to skull fuck the bond market. I want to buy far otm puts on some tickers as a yolo. Any recommendations for upside potential? Theres a ton of these products and I can't figure how to filter out the ones with liquid options. Looking for a junk bond (HYG the best?), an mid range bond and something very solid, which I guess is TLT. Speaking of, why the fuck are people opening up 68DTE death puts on this thing? Also check out the call put ratio on BKLN. God damn lol. Thanks.
That’s a lot of puts! > The investment seeks to track the investment results (before fees and expenses) of the S&P/LSTA U.S. Leveraged Loan 100 Index (the "underlying index"). The fund generally will invest at least 80% of its total assets in senior loans that comprise the underlying index. The Adviser and the fund's sub-adviser define senior loans to include loans referred to as leveraged loans, bank loans and/or floating rate loans. Banks and other lending institutions generally issue senior loans to corporations, partnerships or other entities ("borrowers"). These borrowers operate in a variety of industries and geographic regions, including foreign countries. > BKLN tracks a market-value-weighted index of senior loans issued by banks to corporations. The listed name for BKLN is Invesco Senior Loan ETF.
[BKLN](https://www.barchart.com/etfs-funds/quotes/BKLN/put-call-ratios) \- Or how everyone bought puts. 91,000p and 10c purchased on Friday lol. Sorry old timers.
I mean… low beta is going to be the case with any term loan fund. Beta on morning star is relative to broad equities market. Term loans trade largely agnostic to equities. BKLN overlaps and runs 0.09 beta. In fact if any term loan fund has more than 0.2 beta, I’d question how shit of loans they’re actually carrying (most likely mezz or garbage 2nd liens)
We are on the same page because I also started building a position in C when they suspended their buyback. Got crushed and looks like a nice entry! I also like JPM but it has run up a lot. Still like it though. For floating rate I actually really like FFRHX mutual fund. Good for tax sheltered accounts. ETFS BKLN and SRLN.
yeah so BKLN is a collection of senior bank loans meaning they have top priority in case of bankruptcy, even over bonds. Basically they are similar to bonds but as rates go up you make more on BKLN distributions. I got the idea from Jeffrey Gundlach
Senior Bank Loans ETF, BKLN.
emerging markets (VWO), some BKLN, cash and gold, and a few small positions in some cheap stocks
That is actually an argument used by the BDC managers - the fact that the companies they lend to have a PE owner means they have a strong team of finance professionals that can assist with any issues that come up. This relationship is called "sponsored" and I've seen research in the past that shows BDCs that focus on "sponsored" lending vs "unsponsored" lending, generically speaking, "sponsored" lending is safer. My point is more focused on the fact that in exchange for the higher yields, PE backed loans are highly levered because the sponsors are trying to maximize equity returns. For example, you'll often see 6x+ debt / EBITDA ratio for smaller sized companies, so in the event of a true economic recession, the recovery may be more difficult than compared to a traditional broadly syndicated loan (see the BKLN ETF for example).
A potential 50% drawdown (which may or may not occur due to high corporate leverage) in an otherwise well diversified portfolio is difficult to plan for and even more difficult to time. If you have a long term plan in place, I don't know that I would recommend upending that in any dramatic way in an attempt to head off major collapse in markets or the economy. But it isn't unreasonable to adjust, within some reasonable range, the allocation and weighting of your portfolio. The prospect of rising inflation on the one hand, rising rates on the other hand, and an unsustainable debt load on the gripping hand, places retail investors and retirement savers in a very difficult position (mirroring, in some ways, the Fed's own position). Here are a couple of high level observations: (1) Bear in mind that in a significant recession or correction, most major asset classes (equities, bonds, real estate, many commodities) generally go down. It's just that some go down more than others, especially if there is some industry or sector specific issue driving that bus (see, e.g., hospitality during Covidtide). When there is overvaluation, excess speculation and leverage, and a (perceived) higher risk than usual of a recession or significant drawdown in markets, that might favor an overall rebalancing of one's portfolio from a risk-on or neutral position to more of a risk-off position. What that looks like will differ for everyone, depending on what their baseline looks like. In broad terms, allocating between equities and fixed income, that might mean moving from a neutral position of 80-20 to something like 70-30. Someone who starts out at 60-40 might move to 50-50 or 40-60. Don't forget that at least some international diversification (within both equities and fixed income) is also a good idea. For example, emerging markets haven't bounced back quite as quickly as developed markets. On balance, we can expect that they will, so those may also be expected to outperform in the relatively near term (next three years). This may favor overweighting your overall international allocation or your allocation within internationals toward emerging markets. IEMG is a low cost ETF that tracks emerging market equities indexes. VXUS is a good total international (ex-US) bond fund (covering both developed and emerging markets). EMB, from JP Morgan, is a good emerging markets bond fund. Pay attention to whether the exposure is denominated in USD or local currency -- the latter (for better and for worse) means that your investment also relates directly to the strength (or, inversely, weakness) of the USD relative to the local currency investment. You may also consider holding back a somewhat higher portion of your investable cash entirely. You can put it in a money market, which returns pretty much nothing right now but does provide a floating rate that will rise with interest rates. If and when things go to crap, that's easily accessible money you can then invest in fits and starts as the markets are going down (thereby improving your overall returns as things eventually recover). Another vehicle worth serious consideration are US government I-bonds. These are inflation-indexed bonds that are sold only to individuals up to a limit of $10K per individual per year. You can [read about and buy them, directly from the US Treasury, here.](https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm) The current annualized yield (May-Oct. 2021) on I-Bonds is 3.54%. That's pretty darn good for a near-risk-free security. The only other catch, though I don't regard it as a big one, is that there is a penalty for cashing in the bond after less than five years of holding. The penalty is that you give up the most recent quarter's worth of interest. Even so, if you bought one of those bonds today and held for only a year, you'd still be getting something like a 2.5% return. If you're holding cash or short term securities anyway, you might as well get something for it. (2) Fixed income. You would be correct in thinking that, broadly, bond and fixed income values will decline as rates (and yields) rise in the future. With that in mind, within your allocation of fixed income investments, you may want to weight somewhat more toward floating rate or short term debt. Short term bonds will rollover, giving you the benefit of higher future rates sooner and with less price decline on the lower rate debts held. There are tons of short and medium duration bond funds out there, whether for corporate debt, government or municipal debt, or a variety of issuers. Similarly, debt (bonds or bank loans) issued with floating rates will do better as compared against longer term fixed rate debt if rates rise. ETFs like FRN, SRLN, and BKLN can get you this. Caveat: as noted, there is a lot of corporate debt out there and a big chunk of it is the sort of debt that tends to get restructured or perceived as a higher default risk if the overall economy and issuer's business don't appear to be growing fast enough to service the interest payment or refinance upon maturity (which can be made harder if a borrower is leveraged to the hilt, doesn't see any growth, and rates later rise when the time for a refi comes). BKLN and SRLN are senior secured bank debt, meaning they're first in line to get paid (including from collateral) in a workout or bankruptcy. But there's still exposure there to shaky borrowers. FRN holds unsecured notes, though the balance is weighted toward investment grade, which also provides some additional insulation. High yield unsecured bonds, which are also frequently issued at floating rates, carry much greater risk of default and non-payment. Better yields, but more risk. (3) Equity sectors. Again, the prospect of rising inflation, interest rates, or both, puts investors in a tough spot. There are few places to hide. That said, there are some sectors that tend to do better (and some that do worse) in those environments. Bear in mind that these are generalizations, but they might inform some modest degree of weighting within your overall established allocation to equities. On the positive side, banks, and to a lesser degree insurers and diversified financials tend to do better than any other sector when rates, inflation, or both are rising. Energy and automakers (and their suppliers) also tend to do better than average. Ditto for capital goods, transportation, and consumer durables. On the other hand, real estate, household and personal products, and services tend to underperform in both rising rate and rising inflation environments. Likewise, to a lesser degree, for food, beverage, and tobacco, software and services, and utilities. Other sectors tend to over or underperform in one, but not both, environments. For example, technology hardware and media businesses tend to do okay with rising inflation, but underperform with rising rates. The converse holds for pharma and biotech and food and staples retailers.