- On one hand, BDC index prices moved up again. On the other hand, other data we use to measure investor enthusiasm for the BDC sector was unmoved.
- We seek to reconcile this contradictory picture, while looking forward.
This may have been a holiday shortened week, but there was notable news where BDC sector pricing was concerned.
Unusually, the BDC sector outstripped the major indices in the week ended June 14, 2019. As the chart below illustrates, BDCS – the UBS Exchange Traded Note which includes most of the 45 public public funds we track – was up 1.4%, to $19.92. BDCS is in blue.
In a week where the major indices came roaring back, following a worrying slump, the BDC sector joined the party.
With the big drop in the broader markets – and in the BDC sector – the BDC rally is done. BDCS dropped (2.9%) this week to $19.18. That level of BDCS is (5.2%) off the February 22, 2019 high.
By our self imposed rules any drop over (5%) from a high point ends a rally, so there you are. That means this latest rally – in the volatile up and down world of BDC common stocks – lasted from December 24, 2018 to May 31, 2019. That’s 5 months and 1 week. From lowest to highest (using intra-day numbers) BDCS moved up 18.12%.
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