With concerns regarding the potential for rising interest rates (some of which we have already seen) and the potential for widening credit spreads, bank loan funds have seen a flood of inflows over the past year. In fact, the bank loan category has seen more net inflows than any other open-end mutual fund category over the past year with $53.9 billion of inflows. Here are three videos that provide some background information on this category of alternative income strategies.
This first video, titled The Basics of Bank Loans, provides a back ground review of bank loans, what they are and how they are issues, and some of their risks.
This next video discusses the pros and cons of bank loan funds and some risks to keep an eye out for.
And this final video provides a review of Morningstar’s top active and passive picks in the bank loan category.