The VanEck Vectors BDC Income ETF (BIZD) was launched on 02/11/2013, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - BDCs/PE segment of the equity market.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Financials - BDCs/PE is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.
The fund is sponsored by Van Eck. It has amassed assets over $207.61 M, making it one of the average sized ETFs attempting to match the performance of the Financials - BDCs/PE segment of the equity market. BIZD seeks to match the performance of the MVIS US Business Development Companies Index before fees and expenses.
The MVIS US Business Development Companies Index tracks the overall performance of publicly traded business development companies.
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 9.41%, making it the most expensive product in the space.
It has a 12-month trailing dividend yield of 9.68%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector--about 100% of the portfolio.
Looking at individual holdings, Ares Capital Corp (ARCC) accounts for about 21.15% of total assets, followed by Main Street Capital Corp (MAIN) and Prospect Capital Corp (PSEC).
The top 10 holdings account for about 71.15% of total assets under management.
Performance and Risk
Year-to-date, the VanEck Vectors BDC Income ETF has added about 2.96% so far, and is up roughly 1.37% over the last 12 months (as of 11/26/2018). BIZD has traded between $15.52 and $17.40 in this past 52-week period.
The ETF has a beta of 0.69 and standard deviation of 11.71% for the trailing three-year period, making it a medium risk choice in the space. With about 26 holdings, it has more concentrated exposure than peers.
VanEck Vectors BDC Income ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, BIZD is a sufficient option for those seeking exposure to the Financials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Invesco Raymond James SB-1 Equity ETF (RYJ) tracks Raymond James SB-1 Equity Index and the Invesco Global Listed Private Equity ETF (PSP) tracks Red Rocks Global Listed Private Equity Index. Invesco Raymond James SB-1 Equity ETF has $168.95 M in assets, Invesco Global Listed Private Equity ETF has $215.37 M. RYJ has an expense ratio of 0.75% and PSP charges 2.03%.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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VANECK-BDC INC (BIZD): ETF Research Reports
Prospect Capital Corporation (PSEC) : Free Stock Analysis Report
PWRSH-GLBL LIST (PSP): ETF Research Reports
Main Street Capital Corporation (MAIN) : Free Stock Analysis Report
Ares Capital Corporation (ARCC) : Free Stock Analysis Report
GUGG-RJ SB-1 EQ (RYJ): ETF Research Reports
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