Bank loan mutual funds and ETFs normally invest in loans from banks and other financial institutions. These loans are primarily made to companies that use the funds for general purposes or for some specific purpose, such as for acquisitions, refinancing existing debt and more.
Also, these loans are generally senior secured debt that is mostly rated below investment grade. Thus, such funds and ETFs offer higher interest payments to compensate for the relatively high credit risk. Let’s take a look at the ten biggest bank loan funds.
Ten Biggest Bank Loan Funds
We have used bank loan funds’ last one-year return data (from money.usnews.com) to rank the ten biggest bank loan funds. We have considered both mutual funds and ETFs for our list of the ten biggest bank loan funds. Here are the ten biggest bank loan funds:
10. Virtus Newfleet Senior Floating Rate Fd (PSFRX, 0%)
Virtus Newfleet Senior Floating Rate Fund (MUTF:PSFRX) mainly invests in non-investment grade bank loans with a focus on higher quality companies within a rating tier. It has given a return of over 2% in the last five years, and has total assets of more than $187 million.
PSFRX’s top two holdings are: Ineos Us Finance Llc Term Loan B and Brookfield Wec Holdings Term Loan B. It has an expense ratio of 1.04.
9. Highland/iBoxx Senior Loan ETF (SNLN, 0%)
Highland/iBoxx Senior Loan ETF (NASDAQ:SNLN) aims to match the performance of the Markit iBoxx USD Liquid Leveraged Loan Index by primarily investing in component securities of the underlying index. It has given a year-to-date return of almost 3%, and has total assets of more than $26 million.
SNLN’s top holding is Dreyfus Treasury Obligations Csh Mgt Ins DTRXX, while it has an expense ratio of 0.45.
8. Invesco Senior Floating Rate Fd (OOSAX, 0%)
Invesco Senior Floating Rate Fund (MUTF:OOSAX) mainly invests in Senior Loans, derivatives and other instruments exhibiting similar characteristics. It has given a return of over 1% in the last five years, and has total assets of more than $4.7 billion.
OOSAX’s top two holdings are: Quarternorth Energy Inc Common Stock and Invesco Shrt-Trm Inv Gov&Agcy Instl. It has an expense ratio of 1.08.
7. Pacer Pacific Asset Fltng Rt Hi Inc ETF (FLRT, 1%)
Pacer Pacific Asset Floating Rate High Income ETF (NYSEARCA:FLRT) usually invests in senior secured floating rate loans and other adjustable rate securities. It has given a year-to-date return of over 3%, and has total assets of more than $89 million. It has an expense ratio of 0.60.
6. Fidelity® Series Floating Rate Hi Inc Fd (FFHCX, 1%)
Fidelity® Series Floating Rate High Income Fund (MUTF:FFHCX) normally invests in floating rate loans that are usually lower-quality debt securities. It has given a return of over 4% in the last five years, and has total assets of more than $206 million.
FFHCX’s top two holdings are: Fidelity Revere Str Tr and GREAT OUTDOORS TM B2 1LN 03/28.
5. Payden Floating Rate Fund (PYFIX, 1%)
Payden Floating Rate Fund (MUTF:PYFIX) normally invests a minimum of 80% of its assets in income producing floating rate loans and other floating rate debt instruments (of domestic and foreign borrowers). It has given a return of over 3% in the last five years, and has total assets of more than $122 million.
PYFIX’s top two holdings are: Payden Cash Reserves Money Market and Fertitta Entertainment L Term Loan B. It has an expense ratio of 0.60.
4. Virtus Seix Senior Loan ETF (SEIX, 1%)
Virtus Seix Senior Loan ETF (NYSEARCA:SEIX), under normal circumstances, invests a minimum of 80% of its net assets in first- and second-lien senior floating rate loans. It has given a year-to-date return of almost 3%, and has total assets of more than $78 million. SEIX has an expense ratio of 0.57.
3. First Trust Senior Loan ETF (FTSL, 1%)
First Trust Senior Loan Fund (NASDAQ:FTSL) aims to outperform the primary index (S&P/LSTA U.S. Leveraged Loan 100 Index) and secondary index (Markit iBoxx USD Liquid Leveraged Loan Index) by mainly investing in first lien senior floating rate bank loans. It has given a year-to-date return of almost 3%, and has total assets of more than $2.63 billion.
FTSL’s top two holdings are: Morgan Stanley Instl Lqudty Trs Instl MISXX and CCO Holdings. It has an expense ratio of 0.85.
2. Invesco Senior Loan ETF (BKLN, 1%)
Invesco Senior Loan ETF (NYSEARCA:BKLN) tracks the performance of Morningstar LSTA US Leveraged Loan 100 Index, and invests at least 80% of its assets in the components of the index. It has given a year-to-date return of over 4%, and has total assets of more than $4.2 billion.
BKLN’s top two holdings are: Invesco Premier US Government Money Inst IUGXX and Peraton Corp 02/01/2028. It has an expense ratio of 0.65.
1. Franklin Senior Loan ETF (FLBL, 2%)
Franklin Senior Loan ETF (BATS:FLBL) normally invests in senior loans and investments that offer exposure to senior loans. It primarily invests in income-producing senior floating interest rate corporate loans. It has given a year-to-date return of over 3%, and has total assets of more than $215 million.
FLBL’s top holding is Federal Home Loan Banks, while it has an expense ratio of 0.45.
This article originally appeared on ValueWalk
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