We explore what private credit, or direct lending, is and how to invest in it. We also show how it is similar to and different from investing in leverage loans and CLOs. Topics covered include: Show Notes The Credit Markets Go Dark by Jared A. Ellias and Elisabeth de Fontenay—SSRN The Lost Promise of Private Ordering by Cathy Hwang, Yaron Nili, and Jeremy McClane—SSRN Investments Mentioned VanEck BDC Income ETF (BIZD)Barings Corporate Investors Fund (MCI)Long … [Read more...]
483 Plus: Private Credit, BDCs, CLOs, Cash Balances and Is This Portfolio Too Aggressive
In Plus episode 483, we analyze the Virtus Private Credit ETF (VPC), which invests in business development companies (BDCs), leveraged loans, and collateralized loan obligations (CLOs). We review the characteristics of all those asset categories. We also discuss the appropriate cash balance for retirees and consider whether a retired member's portfolio has too much in stocks. Become a Member If you would like to listen to this episode of Money For the Rest of Us Plus, you can do so by … [Read more...]
467 Plus: Fallen Angels, BBB Bonds, Swapping Out Leveraged Loans Funds, and How to Use the Investment Conditions Report
In Plus episode 467, we explain the resources on Money for the Rest of Us Plus to learn about different asset classes. We explore investing in fallen angel bonds, which are bonds that have recently been downgraded to non-investment grade status. We also explore investing in BBB bonds. David explains his recent portfolio change to swap out his leveraged loan exposure. Finally, we review how to use the investment conditions and strategy report. Become a Member If you would like to listen … [Read more...]
452: Beyond Stocks: The Allure and Strategy of Credit Investments
Investing in non-investment grade bonds, leveraged loans, and preferred stocks is potentially more compelling than investing in common stocks at present. Topics covered include: Show Notes Sea Change - Memo by Howard Marks Further Thoughts on Sea Change - Memo by Howard Marks Investments Mentioned Investments Mentioned SPDR Bloomberg High Yield Bond ETF (JNK) iShares iBoxx High Yield Corporate Bond ETF (HYG) Invesco Senior Loan ETF (BKLN) iShares Preferred … [Read more...]
423: A “Safe” 6% Yield: The Case for Investment Grade CLOs
How leveraged loans and CLOs work and how to invest in them. What are the risks and opportunities with the new CLO ETFs. Topics covered include: Show Notes Companies, Lenders Clash Over Loan Spreads in Switch from Libor by Mark Maurer—The Wall Street Journal Libor: The Spider Network—The Wall Street Journal Collateralized Loan Obligations (CLOs) Primer by Jennifer Johnson—NAIC and The Center for Insurance Policy Research Investing In The Middle: Tapping Into … [Read more...]
305: Are Banks Safe?
Is a bank collapse coming due to bank exposure to collateralized loan obligations as defaults increase? Topics covered include Show Notes The Looming Bank Collapse by Frank Partnoy—The Atlantic Understanding Collateralized Loan Obligations (CLOs)—Guggenheim Vulnerabilities associated with leveraged loans and collateralised loan obligations—Financial Stability Board Who Owns U.S. CLO Securities? An Update by Tranche by Laurie DeMarco, Emily Liu, Tim … [Read more...]
206: Be Bear Aware of Bank Loans
Why the leveraged loan market (i.e. bank loans) is becoming more risky. What are collateralized loan obligations and how do they influence bank loans. Why I will sell my bank loans fund when the economy turns. In this episode you’ll learn: Show Notes US leveraged loans in demand as asset class hits US $1trn milestone - Reuters Leveraged Loan Safety Net May Prove Frayed for Investors - Bloomberg Loan funds attract new money as interest rates rise - Financial Times US … [Read more...]
