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I have invested in the Fidelity Floating Rate High Income Fund (FFRHX) for many years. Morningstar classifies it as a bank loan fund. The expense ratio is 0.73% and it is yielding 7.78%. It loans money to BB and B rated companies and adjusts the interest charges every few months so duration is minimal. Is there any significant difference between a fund like this and private credit?
They differ substantially. Private credit gives higher yields mainly because of its illiquidity, as the loans aren’t publicly traded and don’t have the same level of regulation or transparency. You definitely shouldn’t be tying up money you might need in a hurry.