If Income’s Your Thing: Market Vectors BDC Income ETF
For all you income-thirsty investors that are out there, we have an additional option. The Market Vectors BDC Income ETF (BIZD) is a collection of around 25 business development companies (BDC) investing and lending to private companies that tend to be below investment grade or not rated at all.
The private companies that borrow money from the BDCs generally do so at higher rates of interest, which allows the BDCs to pay high distributions. The 30-day SEC Yield for BIZD is 7.6%, which is much higher than most equity ETFs.
Of course, higher interest rates also come with the increased risk of loan delinquency. With that in mind, this is definitely not a fund for anyone simply trying to gain exposure to the financial services industry.
However, if you go in with your eyes wide open, this is a good way to supplement your income.
As of this writing, Will Ashworth did not own a position in any of the aforementioned securities.