Best Of
Best BDC ETFs in 2026
ETFs that hold baskets of business development companies for high-yield exposure to private-credit lending.
Data updated August 2026 · 4 ETFs
Who this page is for
Best for
- Yield hunters who want diversified exposure to business development companies in one ticker
- Investors who like private-credit income but don't want to pick individual BDCs
- Income portfolios that can absorb higher volatility for a 7-11% yield
Not a fit for
- Investors uncomfortable with the layered fees BDC ETFs carry (fund fee plus the BDCs' own expenses)
- Anyone needing downside protection in a credit crunch — BDCs are economically sensitive
- Fee-minimizers — owning a few BDCs directly avoids the wrapper's acquired-fund expenses
Analysis
Business Development Company (BDC) ETFs give income investors exposure to a niche corner of the market: publicly traded funds that lend to and invest in private middle-market companies, often passing through high distributions from interest income. The category shown here is small and concentrated, with just four funds spanning four different issuers — VanEck, Putnam, Hilton Capital Management, LLC, and First Trust. BIZD from VanEck is the incumbent, with $1.7B in AUM dwarfing the other three funds combined, while PBDC, HBDC, and FBDC represent newer or more specialized entrants. Expense ratios in this category run unusually high compared to most ETF categories, reflecting the acquired-fund-fee structure typical of BDC-focused products, though HBDC breaks from this pattern with a materially different, bond-based approach.
- BIZD holds the largest asset base among the funds shown at $1.7B, more than five times the combined AUM of PBDC, HBDC, and FBDC.
- FBDC posts the highest yield in this group at 10.18%, followed closely by PBDC at 9.85%.
AI-generated analysis — AI can make mistakes. Verify important information independently. Not investment advice. AI risk disclosure
Risks specific to this category
- Distribution sustainability: the average distribution rate here is 8.0%, and payouts at that level often include return of capital — when distributions persistently exceed total return, NAV erodes and shrinks the base that generates future income.
- Expense drag: expense ratios in this group average 9.00% — several times what broad index funds charge — and that cost compounds directly against total return.
- Liquidity and closure risk: 2 of the 4 funds listed hold under $100M in assets, and small funds tend to trade with wider bid-ask spreads and face a higher risk of liquidation.
- Distributions are not contractual: each payout is declared period by period, so the yields on this page can fall without notice when portfolio income, option premium, or fund policy changes.
- Methodology divergence: every fund here follows its own index rules or mandate, so two funds with similar headline yields can hold very different portfolios and diverge sharply in a drawdown — category membership is not interchangeability.
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Top picks
Top BDC ETFs by assets under management.
Yield distribution
Expense ratio distribution
Income projection
Estimated income if the current average distribution rate of 8.00% held for a full year with share prices unchanged. Distribution rate is not total return—a fund can pay a large distribution while its share price falls—so treat these as an upper-bound illustration, not a forecast.
| Investment | Annual income | Monthly income | Weekly income |
|---|---|---|---|
| $10,000 | $800 | $67 | $15 |
| $25,000 | $2,001 | $167 | $38 |
| $50,000 | $4,001 | $333 | $77 |
| $100,000 | $8,003 | $667 | $154 |
Issuer breakdown
Distribution of ETFs by fund issuer. Larger issuers often offer lower expense ratios and higher liquidity.
How this list is built
"Best" here means the selection rule below, applied to our own data — not an opinion poll and not a prediction:
- Universe: every security in our database matching this category — 4 qualified as of August 2026.
- Exclusions: liquidated, delisted and renamed funds drop out automatically; a renamed fund's successor appears in its place.
- Ordering: assets under management, largest first.
- Cap: none — all 4 matching funds are listed.
- Independence: no placement on this page is paid, sponsored, or influenced by a fund issuer.
All 4 ETFs
| Ticker | Name | Issuer | Yield | Expense ratio | AUM | Frequency |
|---|---|---|---|---|---|---|
| BIZD | VanEck BDC Income ETF | VanEck | 7.16% | 9.69% | $1.7B | Quarterly |
| PBDC | Putnam BDC Income ETF | Putnam | 9.85% | 13.49% | $313M | Quarterly |
| HBDC | Hilton BDC Corporate Bond ETF | Hilton Capital Management, LLC | 4.82% | 0.39% | $85M | Monthly |
| FBDC | FT Confluence BDC & Specialty Finance Income ETF | First Trust | 10.18% | 12.44% | $35M | Monthly |
Frequently asked questions
What are the best bdc ETFs?
This page lists the top 4 ETFs in this category ranked by key metrics. The list includes funds from issuers like VanEck, Putnam, Hilton Capital Management, LLC, First Trust and more.
How often is this list updated?
The data on this page is refreshed regularly using the latest available distribution rates, expense ratios, and AUM figures. Last updated August 2026.
What is the average yield of these ETFs?
The average distribution yield across the 4 ETFs on this list is 8.00%. Individual yields range from 4.82% to 10.18%.
What is a BDC ETF?
It is an ETF that holds a basket of business development companies — publicly traded firms that lend to private, middle-market businesses. Because BDCs distribute most of their earnings, a BDC ETF delivers a high, diversified income stream in one ticker.
Why do BDC ETFs show such high expense ratios?
SEC rules require the ETF to include the underlying BDCs' own operating expenses as "acquired fund fees and expenses." That inflates the reported expense ratio, but it is not an extra fee the manager charges — the fund's own management fee is a fraction of the headline number.
Should I buy a BDC ETF or individual BDCs?
A BDC ETF gives instant diversification across many lenders and removes single-company credit risk, at the cost of the acquired-fund expense drag. Buying two or three individual BDCs directly avoids that wrapper cost but concentrates your risk in a handful of credit books. It's a diversification-versus-cost trade-off.
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