Ticker

BDC Fidus Investment (FDUS) offers a 10.3% total dividend yield, trading at the NAV. FDUS maintains significant exposure to the Technology sector, with stronger credit metrics in its software portfolio and no observed AI-related impacts. Q2 adjusted NII was $0.50; excluding a prior one-off, NII rose 10% sequentially, supporting a $0.50 total dividend payout.

Inspired by the horse race in the 2026 Palio di Siena, I made a financial move that I hope will be just as clever as the knight's move in chess. I decided to close out two positions in my Cupolone portfolio that I wasn't entirely convinced about, raising cash to reinvest when the opportunity arises. The purpose of this move is to use this liquidity in securities with better overall NAV performance and a greater…

Externally managed BDCs face structural challenges, notably high fees and misaligned incentives, making them difficult portfolio inclusions. I favor internally managed BDCs for long-term value, but selectively own some external names as well. There could be two motives for owning external ones: 1) tactical trades (high risk, high retur) and 2) long-term income compounding.

Business Development Companies (BDCs) offer high yields but carry significant, often overlooked risks tied to their underlying leveraged loan portfolios. Negative asymmetry in BDCs arises from management fee structures, which erode upside while exposing investors to nearly all downside, justifying persistent NAV discounts. Investors frequently misjudge BDC discounts, expecting P/NAV convergence, but structural risks…

Fidus Investment experienced a near-term lag versus the BDC sector, as anticipated, due to tough Q2 comps and market sensitivity to NII declines. While Q2 brought in balanced results (and thus no abnormally high comp for Q3), I am still reluctant to turn bullish here. My dilemma is paying a premium to NAV and an even more aggressive premium compared to other externally managed BDCs, given the current fundamentals.