Seeking Alpha

Factoids'  Instablog

Factoids
Send Message
I seek to liberate investors from the chains of borrowed opinions by teaching metric awareness that leads to the formation of your own opinions. I lack the usual attributes that qualifies me to write on investing. I am a retail investor. But I do gather, process and analyze significantly more... More
My blog:
Factoids' Instablog
  • Bad Time To Buy BDCs 1 comment
    Mar 6, 2014 12:37 PM

    If you own BDCs, or if they are on your buy list, you need to be aware of the following:

    seekingalpha.com/news/1606533-russell-joins-s-and-p-in-booting-bdcs-from-indexes-sector-slips

    The headline is a bit misleading. But that is cleared up in the first sentence of the article: "Unless the SEC changes the sector's fee-reporting standards by May 15, Russell told clients last night it will remove BDCs from its indexes during its June reconstitution."

    And the above article links to another article in Barrons.

    Why are BDCs being booted? Because the funds that own them have to report the fees that BDCs change as part of the fees that the funds change - and that makes the funds that own BDCs look bad. Mortgage REITs are exempt from that requirement. So it can be correctly argued that the whole thing is "unfair". But this unfair event may well happen. There will be a lot more fear priced into BDCs until this event is settled. No - let me rephrase that. If and when the news that BDCs may be booted from the Russell indexes gets out - then there will be more fear priced into BDCs.

    At this point in time, those BDC investors who only get their news from Yahoo finance appear to lack the news of the potential "booting".

Back To Factoids' Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (1)
Track new comments
  • yblarrr
    , contributor
    Comments (830) | Send Message
     
    Thanks for the reminder,but think most of us are aware of
    this old news. In many cases this has created a buying
    opportunity for some outstanding BDC's
    6 Mar, 01:45 PM Reply Like
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.