Investors should know that all senior loan funds will have a slightly delayed response to rising rates. That’s because the loan rates won’t re-price until the three-month Libor rate hits 0.75 percent (what is called the “Libor floor”). And that won’t likely happen for at least a few months after the Fed starts to raise rates.

Boyd and his team at Pacific Asset Management believe their ETF will deliver comparable yields to the peer group––which is currently around 4 percent––while delivering superior share price appreciation. Hence, his view that even when compensating for a higher expense ratio, this fund will deliver category-leading returns.

In coming months, investors will be able to determine whether Boyd and his cohorts at AdvisorShares can live up that goal with this fledgling fund. 

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