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Bank Loan ETFs: The Effects of an Illiquid Underlying Market

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Fixed-income exchange traded funds have become more liquid than their underlying markets as more investors turn to the easy-to-use investment tool. However, sudden changes in market sentiment could cause price disparities with the underlying assets, like what is happening with bank loan-related ETFs. For instance, passive index-based PowerShares Senior Loan Portfolio (NYSEArca: BKLN), the largest [...]

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