Are you getting the best rate from your broker?
Compare your broker's rates now to find out if you can save money

Choose your broker below
Welcome to Dividend.com. Please help us personalize your experience.

Select the one that best describes you
Dividend logo

There’s a general notion that certain sectors get clobbered when the Federal Reserve raises rates, and there are two reasons for that idea. The industry either uses a lot of debt to finance its operations or stocks of a particular sector are high yielding – either due to their tax structure or the general nature of their underlying businesses. In some cases like utilities and real estate investment trusts (REITs), it’s both reasons.

And that’s why the rise in business development companies (BDCs) is so strange.

By all accounts, BDCs should be dying right now as the Fed has embarked on its rate normalization schedule. And yet, the high-yielding sector has been killing it. For investors, the question is whether the gains are just a head fake or the start of a true rally.

To read the Full Story, Go Premium or Log In

Popular Articles

Premium Shutterstock 749045488

The Market Wrap for March 23: Fed Raised GDP Estimates

The stock markets continued to trade without directional movement as the Fed issued its first...

Premium Shutterstock 624583397

The January Barometer Is Shining

For our portfolios, the last few weeks haven’t exactly felt very bullish.

Volatility has returned...

Premium Shutterstock 613522598

Big Oil's Big Spending Boom

One of the biggest criticisms of the Republican tax plan is that the reduction in corporate taxes...