The High-Yield BDC Portfolio

This portfolio is for investors that are willing to take on a little more risk with less capital appreciation, but higher dividend yields. The following allocations for a high-yield BDC portfolio are used for the remainder of the information in this article, and all metrics are weighted accordingly. Investors who want a slightly less risky portfolio with a higher-than-average yield can adjust the weightings higher for MCC, and lower for BDCL, but reducing the overall dividend yield.

Currently, the five investments for the best high-yield BDC mix are Prospect Capital (PSEC), Medley Capital (MCC), TICC Capital (TICC), UBS 2X Leveraged Wells Fargo BDC (BDCL) and Fifth Street Finance (FSC). With such a high-yield, investors who are willing to take on extra risk may find BDCL to be an attractive investment. But with an industry as volatile as BDCs, most investors may not want the exposure of 2x leverage.

Source: Seeking Alpha

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