BDC Comparison
ARCC vs FSK: Which Is the Better Pick in 2026?
A head-to-head comparison of Ares Capital Corporation and FS KKR Capital Corp. covering yield, cost, risk, and income potential.
Data updated August 14, 2026
Best for
- ARCCInvestors who want private-credit income through a business development company.
- FSKInvestors who want higher current income (19.39% vs 9.66% for ARCC).
Side-by-side snapshot
| Metric | ARCC | FSK |
|---|---|---|
| Full name | Ares Capital Corporation | FS KKR Capital Corp. |
| Issuer | Ares Management | FS Investments |
| Last Close | $19.87 as of August 14, 2026 | $12.36 as of August 14, 2026 |
| Distribution yield | 9.66% | 19.39% |
| Distribution Safety Score™ | 94 | 45 |
| Expense ratio | — | — |
| AUM | — | — |
| Distribution frequency | Quarterly | Quarterly |
| Underlying index | — | — |
| Objective | — | — |
| Asset class | Equity | Equity |
| Inception date | N/A | N/A |
| Beta | 0.62 | 0.884 |
| Last dividend | $0.4800 | $0.4200 |
| Ex-dividend date | 09/15/2026 | 09/16/2026 |
Bottom lineChoose ARCC if you want private-credit income through a business development company. Choose FSK if you want higher current income (19.39% vs 9.66% for ARCC).
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Visual comparison
Key metrics
Projected income on $10K
Projections assume the current yield and share price remain constant. Actual results will vary.
Total returns
ARCC has outpaced FSK over the trailing twelve months, posting a -3.49% total return against -17.73%. The lead holds up over 10 years too: ARCC has compounded at 12.73% a year, against 2.20% for FSK. ARCC has been the steadier holding, though — annualized volatility of 17.7% against 25.0% for FSK. Figures are total returns: price change plus every distribution reinvested.
| Symbol | YTD | 1Y | 3Y | 5Y | 10Y | Since Apr 2014 | Volatility | Sharpe | Sortino | Max drawdown |
|---|---|---|---|---|---|---|---|---|---|---|
| ARCC | 2.42% | -3.49% | 10.47% | 9.46% | 12.73% | 11.16% | 17.7% | 0.31 | 0.43 | -19.3% |
| FSK | -9.63% | -17.73% | -0.97% | 2.17% | 2.20% | 3.05% | 25.0% | -0.22 | -0.29 | -51.0% |
Total return with all distributions reinvested on the ex-dividend date, split-adjusted, as of August 14, 2026. YTD and 1Y are cumulative; longer windows are annualized. “Since Apr 2014” measures every fund from April 16, 2014 — the youngest fund's first trading day — so all funds share one comparison window. Volatility is the annualized standard deviation of daily total returns over the trailing 3 years. Sharpe and Sortino divide the annualized return in excess of the risk-free rate by, respectively, that volatility and the downside deviation (both over the trailing 3 years) — higher is better. Max drawdown is the largest peak-to-trough total-return decline over the same window — shallower is better.
Quick verdict
ARCC (Ares Capital Corporation) and FSK (FS KKR Capital Corp.) are both quarterly-pay dividend-paying business development companies (BDCs), but they take different approaches.
FSK offers the higher yield at 19.39% vs 9.66% for ARCC. A higher yield means more current income per dollar invested, though it may come with different risk characteristics.
Who should choose each?
Choose ARCC
Ares Capital Corporation
- Want private-credit exposure — a BDC lending to middle-market companies.
- Prefer lower volatility — a beta of 0.6 vs 0.9 for FSK.
Choose FSK
FS KKR Capital Corp.
- Want higher current income — FSK yields 19.39% vs 9.66% for ARCC.
- Want private-credit exposure — a BDC lending to middle-market companies.
Not sure? Use the income calculator and snapshot above to weigh these trade-offs against your own goals.
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Deep dive
Yield & income
On a $10,000 investment, ARCC would generate roughly $80.50/month, while FSK would produce $161.58/month, at current distribution rates. Both pay quarterly distributions.
Strategy & risk
ARCC is a business development company, while FSK is a business development company. Beta is 0.62 for ARCC and 0.884 for FSK, indicating ARCC is less volatile relative to the market.
Security details
ARCC (Ares Capital Corporation) is a business development company. FSK (FS KKR Capital Corp.) is a business development company.
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Frequently asked questions
What is the current distribution yield for ARCC and FSK?
ARCC currently distributes 9.66% and FSK 19.39%, based on fund data updated August 2026. Distribution yield moves with both the payout and the share price, so check the as-of date before relying on either figure.
Is ARCC or FSK better for dividend income?
It depends on your goals. FSK currently offers the higher distribution yield, which means more income per dollar invested. However, a lower-yield fund may offer better total return or lower volatility. Consider your time horizon and risk tolerance.
What is the difference between ARCC and FSK?
ARCC (Ares Capital Corporation) is a business development company, while FSK (FS KKR Capital Corp.) is a business development company. They are issued by Ares Management and FS Investments respectively.
Can I hold both ARCC and FSK?
Yes — nothing prevents holding both. Whether the combination actually diversifies depends on how much the underlying exposures overlap, which isn't fully measurable from the data on this page; review each security's holdings, sector, and strategy before treating them as complementary.
Is ARCC or FSK safer?
By Dividend Vision's Distribution Safety Score — a rules-based 0–100 estimate of how resilient a distribution looks, where higher is safer — ARCC scores 94, FSK scores 45, so ARCC's payout currently looks the more resilient of the two. ARCC has also shown lower price volatility (beta 0.62 vs 0.88 for FSK). No score makes an investment risk-free — treat this as a screening signal, not a guarantee, and the leverage, options-income, or crypto caveats flagged on this page apply regardless of score.
How much income does $10,000 in ARCC vs FSK generate?
At current rates, $10,000 in ARCC would generate roughly $80.50 per month ($966.00 annually). The same in FSK would produce about $161.58 per month ($1,939.00 annually).
Which has performed better historically, ARCC or FSK?
ARCC has outpaced FSK over the trailing twelve months, posting a -3.49% total return against -17.73%. The lead holds up over 10 years too: ARCC has compounded at 12.73% a year, against 2.20% for FSK. ARCC has been the steadier holding, though — annualized volatility of 17.7% against 25.0% for FSK. Figures are total returns: price change plus every distribution reinvested. Past performance does not guarantee future results.
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ARCC vs FSK — at a glance
Generated August 9, 2026.
Figures quoted in this analysis are from its generation date and may lag the live snapshot table above, which always shows the latest data.
Overview
ARCC and FSK are both business development companies—closed-end structures that lend to and invest in middle-market private businesses. ARCC is the larger, more diversified operator managed by Ares Management, while FSK is a smaller BDC focused on floating-rate senior secured loans, often with higher leverage and greater reliance on distributions funded partly by return of capital rather than underlying earnings.
How they differ
The most obvious difference is distribution yield: FSK pays 21.38% versus ARCC's 9.94%, a gap that reflects FSK's heavier use of leverage and a larger portion of distributions likely returned as capital rather than income. ARCC is backed by Ares Management, one of the largest alternatives firms globally, and invests across a broader mix of debt and equity in private companies; FSK concentrates on floating-rate senior secured loans, a narrower and more credit-sensitive strategy. ARCC's beta of 0.62 suggests lower stock-price volatility than the broader market, while FSK's 0.884 beta indicates closer correlation to equity swings—a telling signal that FSK carries meaningfully different market and portfolio risk.
Who each is best for
ARCC: Fits investors seeking a diversified exposure to middle-market lending with a sustainable, moderately high distribution and lower price volatility relative to equity markets. The Ares backing and scale appeal to income-focused investors who prioritize stability and predictable quarterly payments over yield maximization.
FSK: Fits investors comfortable with higher leverage, greater NAV sensitivity, and accepting that a significant portion of distributions may represent a return of capital in exchange for a much higher yield. Works for those with high current-income needs and shorter holding horizons, or those who view FSK as a tactical position rather than a core holding.
Key risks to know
- NAV erosion risk: FSK's 21.38% distribution yield, if partly funded by return of capital rather than portfolio income, may erode NAV over time. At distributions that high, verify what portion is truly earned income—the math rarely supports that yield purely from portfolio returns.
- Leverage and rate risk: Both BDCs use leverage, but FSK's floating-rate loan focus means rising interest rates increase borrowing costs and can compress returns. ARCC's more balanced structure offers some cushion, though leverage remains a lever in both strategies.
- Credit and refinancing risk: Middle-market portfolio companies may face refinancing pressure in a tightening credit environment. FSK's concentration in senior secured loans limits recovery value in a downturn, while ARCC's diversification across equity and debt provides more buffers.
- Market-price volatility: FSK's higher beta (0.884) and smaller scale make its share price more volatile in equity sell-offs, creating timing risk for distributions or redemptions.
Bottom line
ARCC offers a more moderate, diversified income stream backed by a large institutional manager; FSK chases a much higher yield through leverage and return-of-capital distributions, trading stability for income. If you prioritize consistent earnings-based distributions and lower volatility, ARCC's profile differs meaningfully from FSK's. If you're evaluating either, confirm the composition of distributions and your own ability to tolerate NAV swings and potential principal decay.
AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.
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The metrics behind this comparison, explained in the Academy.
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