Most Retirees Skip Over This $13 Billion BDC Income ETF That Pays 13 Percent Quarterly

BIZD targets high income by holding business development companies that originate floating-rate loans to private middle-market borrowers and distribute most net investment income as dividends. The portfolio is concentrated in a few BDCs, including Ares Capital and Blue Owl Capital, and uses a total return swap on the MVIS US BDC Index with collateral largely in U.S. Treasury bills. The income mechanism relies on BDCs earning interest on senior secured loans tied to short-term rates, with quarterly distributions such as $0.4818 per share for Q1 2026. Despite strong yield, performance is weaker on total return, with declines year to date and over the past year, and lower multi-year and long-term returns versus SCHD.

"BIZD holds roughly 25 business development companies regulated under the Investment Company Act of 1940. These firms originate floating-rate loans to private companies and pass most of their net investment income through to shareholders as dividends. The ETF concentrates that exposure in a few names: Ares Capital at about 14%, Blue Owl Capital at roughly 9%, plus FS KKR Capital, Main Street Capital, and Golub Capital BDC. About 36% of the portfolio is implemented through a total return swap on the MVIS US BDC Index, collateralized by roughly 35% in U.S. Treasury bills."

"The return engine is straightforward. BDCs collect interest on senior secured loans tied to short-term rates, and BIZD distributes that income quarterly. The most recent payment was $0.4818 per share for Q1 2026, an increase from the $0.4177 average across 2025. Total assets sit near $1.6 billion."

"The income side delivers exactly what it promises, but the total return story tells a completely different tale. Year to date, BIZD has stumbled roughly 8%, and it is down about 12% over the past year, leaving shares hovering around $13. Look at the five-year window, and the fund managed a 28% total return. Meanwhile, SCHD surged ahead with a 51% return over the same period, and a massive 237% over ten years compared to BIZD's 118%."

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