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 operates as an actively managed vehicle, deploying approximately 80% of assets into senior loans targeting the Markit iBoxx and S&P/LSTA indices. Historically, SRLN maintained roughly $4.6 billion in assets under management while trading substantial daily volumes around 1.3 million shares. The fund’s expense ratio came in at 70 basis points annually.
The Invesco Senior Loan ETF (BKLN) takes an index-tracking approach, following the Morningstar LSTA US Leveraged Loan 100 Index. This methodology provides systematic exposure to the 100 largest institutional leveraged loans weighted by market value and spread dynamics. BKLN has historically amassed approximately $4.2 billion in assets and charged 65 basis points in annual fees, with notably robust trading volumes exceeding 6 million daily shares.
First Trust Senior Loan Fund (FTSL) emphasizes active management with concentrated sector positioning—software, insurance, healthcare technology, and media each receive double-digit allocations. The fund’s asset base historically reached $2.2 billion, charging 86 basis points annually with more modest daily trading around 248,000 shares.
Comparing Costs and Performance: A Senior Loan ETF Breakdown
For cost-conscious allocators, Franklin Senior Loan ETF (FLBL) offers the most attractive fee structure at 45 basis points, historically managing approximately $237 million while seeking both income generation and capital preservation. The fund’s minimal duration of 0.15 years emphasizes its rate-insensitive positioning. Daily trading volumes historically averaged around 91,000 shares.
Virtus Seix Senior Loan ETF (SEIX) rounds out the primary options, employing fundamental research to target high-conviction senior-secured positions. With an average maturity of 3.78 years and effective duration of 0.20 years, SEIX has historically maintained a smaller asset base around $87 million while charging 57 basis points annually. The fund’s lower trading volume of 22,000 daily shares suggests it may appeal primarily to dedicated institutional allocators rather than retail traders.
When evaluating these vehicles, investors should consider several selection criteria beyond headline yields. AUM matters—larger pools typically offer better liquidity and more efficient tracking. Fee differentials compound significantly over time, with a 40-basis-point spread translating to meaningful performance divergence across decades. Sector concentration varies substantially; some funds favor financial lending while others diversify across industries. Finally, examining both average maturity and effective duration provides critical insight into interest-rate sensitivity despite these instruments’ floating-rate nature.
Senior loan ETFs have evolved into essential building blocks for income-focused portfolios navigating elevated rate uncertainty. Whether seeking the active management approach offered by certain senior loan vehicles or the systematic index replication available through others, the category merits serious consideration for investors prioritizing stability alongside yield in the current fixed-income environment.