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ARCC: Equity or Fixed Income?

Posted: Mon Feb 11, 2019 11:59 am
by YLS
In my retirement portfolio I have shares of Ares Capital Corporation (AARC). It is a "Business Development Companies" (BDC) that finances mid-size and smaller companies. I hold it because it pays big-size dividends. Now, my problem... I divvy my portfolio into equities and fixed income and keep them balanced. I don't know where to stick ARCC. It kinda looks like a high paying dividend stock, but also a sorta bond-like fund. Where should I allocate it?
:?:
Thanks in advance!

Re: ARCC: Equity or Fixed Income?

Posted: Mon Feb 11, 2019 5:43 pm
by Duckie
YLS, welcome to the forum.
YLS wrote:I divvy my portfolio into equities and fixed income and keep them balanced. I don't know where to stick ARCC. It kinda looks like a high paying dividend stock, but also a sorta bond-like fund. Where should I allocate it?
It's listed as a stock and even though some of its investments include equity ownership, I would consider it a stock.

Re: ARCC: Equity or Fixed Income?

Posted: Mon Feb 11, 2019 6:44 pm
by megabad
Agree, I would just put it the equity portion. It tracks like an extremely volatile small cap stock (though it is a bit larger than the typical small market cap). I have never seen NAV of a bond fund fluctuate like ARES share price. In my opinion, owning publicly shares of a BDC does not equal owning the underlying alternative asset class to me (PE, bonds, real estate, or whatever else the private offerings invest in). Owning shares is just owning shares (equity).

Re: ARCC: Equity or Fixed Income?

Posted: Mon Feb 11, 2019 8:23 pm
by YLS
Many thanks to all for the answers!