Invesco PowerShares has launched the newest addition to its lineup of exchange traded funds (ETFs) with an offering that provides investors access to a portfolio of senior secured bank or floating rate loans.
The PowerShares Senior Loan Portfolio (BKLN) is the ETF industry’s first senior loan fund. BKLN provides a compelling new means to access this asset class through the benefit-rich ETF structure, through shorter maturities and a floating interest rate feature that typically resets quarterly.
The index, which has 100 loans, is a subset of a larger benchmark, the S&P/LSTA Leveraged Loan Index, which has more than 1,000 loans in it. The fund has an expense ratio of 0.83%.
Senior secured loans have the ability to keep pace with rate changes and have historically proven to be more stable than traditional high yield fixed-income investments.