BDC Investment Fund

Launch

From January 2, 2025 we have assembled all the BDC Best Ideas of the moment in one place in a sort of investment fund, which we maintain in an account at Fidelity. We've acquired shares in each BDC that we consider most likely to fare best in the year - and years - ahead. On our pages you'll see us discuss the strengths - and weaknesses - of each Best Idea and what sorts of returns we are projecting. Here are the first two purchases discussed: Ares Capital (ARCC) and Barings BDC (BBDC).

Raison D'Etre

Our conceit is that we hope to show that proper BDC selection - and subsequent portfolio management - should result in a higher rate of return than investing in a passive sector exchange-traded fund (ETF). In our case, the only BDC ETF available is sponsored by Van Eck and has the ticker BIZD. There are 30 different BDCs represented in the vehicle which is not a perfect mirror held up to the sector but is far greater than the 8 to 12 BDCs we propose to own. Our notion is that choosing the "better" BDCs while avoiding the worst performers - while requiring time consuming analysis and attention - should result over the medium and long term in a better return than just plonking one's money into BIZD and waiting.

What To Expect

We're planning to play out this experiment through 2025 and measure our performance and that of BIZD quarterly. Along the way, we'll review the financial performance of our Best Ideas and compare against our initial expectations, most of which are spelt out in the Expected Return Table. We'll write an update for any BDC whenever any material development occurs. Like Maynard Keynes, when the facts change, we reserve the right to change our minds so you may see us disposing of some positions and beginning new ones.

Really Useful

We hope you'll find BDC Best Ideas useful as a source of new investment ideas in this narrow - but important segment of the financial markets. Moreover when we are wrong about a particular BDC, we'll hope you'll learn from our missteps which we are more than ready to discuss in our articles. As we've said for years to anybody who will listen: buying stocks is easy but investing is hard, and humbling. Some have argued it is so difficult as to make individual stock picking not worthwhile. We don't agree but we'll see in the year ahead, and you are welcome to join us along this ride for the price of a $50 monthly subscription.