ARCC: Equity or Fixed Income?

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Topic Author
YLS
Posts: 2
Joined: Mon Feb 11, 2019 9:47 am

ARCC: Equity or Fixed Income?

Post by YLS » Mon Feb 11, 2019 11:59 am

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!

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Duckie
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Location: California Bay Area

Re: ARCC: Equity or Fixed Income?

Post by Duckie » Mon Feb 11, 2019 5:43 pm

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.

megabad
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Joined: Fri Jun 01, 2018 4:00 pm

Re: ARCC: Equity or Fixed Income?

Post by megabad » Mon Feb 11, 2019 6:44 pm

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).

Topic Author
YLS
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Joined: Mon Feb 11, 2019 9:47 am

Re: ARCC: Equity or Fixed Income?

Post by YLS » Mon Feb 11, 2019 8:23 pm

Many thanks to all for the answers!

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