What is LOAN PARTICIPATION FUND?

Loans with higher-than-normal interest rates are the vehicles this mutual fund invests in. This fund is for stable and successful firms with low credit ratings due to age, industry, and the like. Not investment-grade loans. Secured by the firm’s assets, making them higher quality than junk bonds. Loan participation funds offer higher yields than the investment-grade funds due to their high interest earnings. Also known as floating rate fund.

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