The PowerShares Senior Loan Portfolio (NYSE:BKLN), the first ETF to focus on senior loans, has reached the $3 billion in assets under management mark.
At the start of trading Wednesday, BKLN had about $3.04 billion in assets, according to PowerShares data.
BKLN, which debuted in early March 2011, has benefited in part from investors' thirst for yield. While yields on U.S. Treasuries have remained depressed, many investors have been willing to take on perceived increased credit risk with high-yield bond ETFs, of which BKLN is one.
Most of BKLN's 133 holdings, a combined 84 percent, are rated either B or BB, on the Standard & Poor's rating scale. The ETF has a 30-day SEC yield of 3.83 percent and a trailing 12-month yield of 4.79 percent.
Senior loans, which are typically less sensitive to interest rate risk, are usually privately arranged through private transactions. Senior bank loans are referred to as such because in the event of issuer bankruptcy, the senior loan creditor is usually the first to be repaid.
Not only can it be said that BKLN reaching the $3 billion in AUM mark is impressive, but the ETF's asset growth in recent months is nothing short of staggering. In early July 2012, BKLN had just $583 million in assets, indicating the fund has grown more than five-fold since that time.
Year-to-date, BKLN is the top asset-gatherer among PowerShares ETFs with over $1.52 billion in inflows through April, according to issuer data.
BKLN has a yield to maturity of 5.69 percent and an average years to maturity of 5.18 percent. The fund is one just two ETFs to have debuted in 2011 that have topped $3 billion in assets, according to PowerShares. The other is the PowerShares S&P 500 Low Volatility Portfolio (NYSE:SPLV).
PowerShares is the fourth-largest U.S. ETF issuer.
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