Tuesday, April 23, 2024

New Investment: Putnam BDC Income ETF

I just bought 1,000 shares of the Putnam BDC Income ETF. This is an actively managed ETF that invests in US business development companies. These are basically private credit lenders. The dividend yield is 9.19%, which is high, but lower than many BDCs. I am thinking of this as an enhanced cash investment (though formally I am listing it under US stocks) and so I wanted to avoid the idiosyncratic risks of individual BDCs. I learnt about this investment from Armchair Income. I did think of investing in the KKR BDC, FSK.

This is what I did with much of the cash from selling The China Fund. As it is in our SMSF, only 15% tax applies to the income. I also have Australian Dollar cash in the fund. I didn't want to convert to US Dollars at this low exchange rate and so will research bank hybrids to invest in.

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