Q: What do you think of senior loan funds in general, and this one in particular. Seems like a safe and diversified way to earn steady income. Any other information sources on this asset class? What would be your best pick?
5i Research Answer:
The senior loan and private equity space has seen some issues (and frauds) and the sector needs to be considered riskier than most. SSF is a floating rate fund so has benefitted from rising rate. BUT...it lost money in 2022, 2020, 2018, 2015, and 2014. We would consider that too many losses for a fixed income fund. 5-year return is only 3.79%. Yield is high, at 8.7%, but it has not made investors much money on a total return basis. Considering its higher risk, we can't endorse it. We would be more comfortable with BKLN with $6B in assets and lower fees. Performance there has also not been great, but we prefer the better liquidity and the US market.