Forget JEPI: Three Business Development Company ETFs Yielding Over 12% From Private Credit Loans

5 hours ago 2

John Seetoo

Mon, June 8, 2026 astatine 10:37 AM CDT 7 min read

Quick Read

BDC ETFs BIZD and PBDC output 13.65% and 11.50%, respectively, astir treble JEPI's 8% with a meaningful taxation borderline for income investors.
BDC dividends are taxed astatine the superior gains complaint (max 20%), portion JEPI's options-based payouts look mean income taxation up to 37%.
The BDC manufacture swelled to $500 cardinal AUM with a 28% CAGR since 2020, fueled by small-business recognition request abandoned by banks aft 2008.
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Many retirees who decided to bargain the JP Morgan Equity Premium ETF (NYSE: JEPI) were wowed by its 8% output and JP Morgan pedigree aft seeing it advertised connected Fox Business News and MS Now. While that’s surely a solidly precocious yield, determination are immoderate much adventurous investors who person been receiving double-digit yields with an added taxation vantage implicit JEPI. These investments are Business Development Companies (BDC), and they service an important relation successful the financing of tiny and mean sized corporations crossed the US.Three examples of ETFs and stocks to see and probe are (quotes based connected marketplace terms astatine the clip of this writing)::

VanEck BDC Income ETF (NYSEARCA:BIZD): 13.65%
Putnam BDC Income ETF (NYSEARCA:PBDC): 11.50%
Blackstone Secured Lending Fund (NYSE: BXSL): 13.07%

Filling the Banking Void

158 Year-Old Lehman Brothers was 1 of galore casualties of the 2008 banking meltdown that ironically fueled the maturation of BDC business.

The 2008 subprime owe banking meltdown was a afloat standard fiscal bloodbath. Venerated firms similar Bear, Sterns, Merrill-Lynch, Lehman Brothers, and 2nd tier banks similar Wachovia Bank each went nether and were swallowed up by larger entities. Small and mid-sized $2-$30 cardinal dollar firm accounts, which were the breadstuff and food clients for these firms, were each told post-merger that they were excessively tiny and risky for aboriginal servicing consideration.

The effect was a immense fiscal spread successful the assemblage that generated the bulk of US employment. Small manufacturers, mid-tier work companies, household owned firms, restaurants, and a big of different businesses mislaid their revolving recognition lines, factoring, invoice financing, and interim financing resources overnight. Enter the Business Development Company.

BDCs person been successful beingness for decades, but were usually considered a niche for companies whose currency flows were excessively erratic oregon for those considered excessively risky for accepted slope consideration. They are categorized arsenic a large conception of the larger Private Credit sector. With this caller banking void, BDC’s superior word repayment flexibility, quality to make hybrid financing structures connected a reduced scale, and to utilize antithetic levels and forms of debt, adjacent including convertible indebtedness to equity, were a godsend for these businesses and rapidly became a fiscal lifeline to support a large galore of them afloat.

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