The fund is actively managed by GSO/Blackstone Debt Funds Management LLC. The fund managers can monitor the fund's holdings from the bottom up to catch meaningful credit deterioration of any company in the fund and can monitor the broad market from the top down for any macro changes. That may be an advantage over an index fund such as the
iShares iBoxx Investment Grade Corporate Bond ETF
(LQD)which invest heaviest in companies that issue the most debt.
While it is still too early to know what SRLN will yield, the passively managed PowerShares Senior Loan Portfolio (BKLN)reports a distribution yield of 4.56%. As is the case with all ETFs, the amount of future dividend payments is uncertain.
There is of course no guarantee that active management will be a difference maker in performance or yield, only the opportunity for a difference.
At the time of publication, the author had no position in any of the holdings mentioned.Follow @randomroger This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.