Leveraged loans have historically offered relatively low interest-rate-sensitivity and have generated a positive return for shareholders in 25 of the past 27 years—making a strong case for considering them as investments, as opposed to position trades.
It's true that loans offer floating-rate coupons, which tend to move along with the fed funds rate. This has caused some investors to try to time the asset class, which can be difficult to accomplish and could lead to mistakes.
See how owning loans over longer periods might help investors avoid missed opportunities.
Past performance is no guarantee of future results.
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