Investors seeking momentum may have Virtus Seix Senior Loan ETF SEIX on radar now. The fund recently hit a new 52-week high. Shares of SEIX are up approximately 4.3% from their 52-week low of $23.01/share.
But could there be more gains ahead for this ETF? Let’s take a look at the fund and the near-term outlook to get a better idea of where it might be headed.
SEIX In Focus
The Virtus Seix Senior Loan ETF actively invests in senior-secured, floating rate leveraged loans, seeking to generate high levels of current income. The fund charges 57 bps in fees and yields 7.59% annually.
Why The Move?
Senior loans are floating rate instruments thus providing protection from rising interest rates. This is because senior loans usually have rates set at a specific level above LIBOR and are reset periodically which help in eliminating interest rate risk. Further, as the securities are senior to other forms of debt or equity, senior bank loans offer lower default risks even after belonging to the junk bond space. With the U.S. economy currently experiencing rising rate environment, this senior loan ETF hit a 52-week high lately.
More Gains Ahead?
The fund has a positive weighted alpha of 1.05. So, there is a decent outlook ahead for those who want to ride this surging ETF a shade further.
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