A WILDCARD Corporate Bond ETF

All right.

Well, that takes us next to our mystery battle category.

This is where our judges can give us that mystery factor or thing.

And it's a surprise.

That's why it's the mystery category.

We don't know what it is.

So, surprise us, Tony.

What's your mystery battle category factor?

And which of these ETFs wins it?

I'm going to throw in a um a wild card here.

Uh my own.

And it would be SRLN, which is the State Street Blackstone Senior Loan ETF.

Uh when I do invest in bonds and I don't do this very often, I like to have two things.

One is I want to be in a first lean position, right?

If I am lending someone money, if something goes wrong, I want to be the first person to be paid back in that stack.

And the second thing is that I I'd like to be invested primarily in floating rate loans.

Of course, in a falling rate environment, this is going to be less than optimal, but over a full credit cycle, that's the kind of positioning I want to be.

So, if you combine these two, there's only really a few assets that fall into there.

And I'm not going to touch cos because, you know, with all the contagion in the uh private credit markets, I don't want to be in there.

But I don't mind being in first lean senior secured floating rate bank loans.

And you got a lot of ETFs out there for this really.

You could throw a dart and pick a couple decent ones.

I like SRLN.

It's not really cheap at 70 pips, but it's well capitalized at uh over 6.5 billion in AUM.

Right now you're getting a weighted average allin rate of 7.5% and then uh approximately 47% of the loans have a softer floor.

The yield isn't bad.

On a 30-day SEC basis, you're looking at 7.56.

But unlike sorry, like all the options we talked so far, this is corporate paper.

So the after tax efficiency isn't that good.

So, one thing that mystery battle category that I would like all viewers to take to heart is that you're going to want to keep these in a tax sheltered account because the tax drag is much worse than what you would get from a treasury only fund which is um exempt from state tax most of them or from a municipal fund which is exempt from federal.

So, corporate paper not taxed too well ordinary income keep it in your Roth or something.

So, for this category I would be pitching SRL in. >> All right.

And that's the Will Rogers approved wildcard choice.

He said that it's not the the return on my capital, it's the return of my capital.