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SPDR Blackstone / GSO Senior Loan ETF Message Board

  • alf_1986e alf_1986e Aug 4, 2014 9:58 AM Flag

    Why the sell off?

    Does anyone know what caused the recent price drop?

    Sentiment: Hold

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    • Many SR Loan funds have seen a recent negative divergence from NAV- this is due to market sentiment. Some of this is due to stagnant and falling Fed interest rates and warnings from Yellen about credit bubbles in SR Loan and Junk Bonds. These funds should outperform as interest rates rise, provided there is not a deterioration of credit fundamentals of the underlying fund holdings. Watch the NAV and credit quality of the holdings- if these stay put, sentiment will eventually swing back so the ETF price is closer to NAV. In the meantime, enjoy the income- your DRIP is letting you buy more shares with your distributions. Eventually the party will return to this sector.

      Sentiment: Hold

 
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