VanEck BDC Income ETF Faces Uncertain Future in Private Credit

Analyst warns of BIZD's high expense ratio and uncertain forward yield compared to alternative CEF preferreds

Mar. 9, 2026 at 6:10pm

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Dan Plettner, an investment analyst, cautions against investing in the VanEck BDC Income ETF (BIZD), which tracks a basket of private credit business development companies (BDCs). Plettner highlights BIZD's high 12.86% expense ratio and uncertain forward yield, and suggests investors consider zero-fee 1940 Act protected CEF preferreds like HFRO.PR.A as a potentially better alternative.

Why it matters

The private credit market has faced significant challenges recently, and Plettner's analysis suggests that BIZD may not be the best way for investors to gain exposure to this sector. His recommendation of CEF preferreds highlights the need for investors to carefully evaluate the costs and risks associated with different investment vehicles in the current market environment.

The details

Plettner, who has extensive experience in closed-end funds and other underfollowed securities, argues that BIZD's high expense ratio and uncertain forward yield make it a less attractive option compared to alternative investments like CEF preferreds. He notes that BIZD's operating expense ratio is 12.86%, which is significantly higher than the zero-fee 1940 Act protected CEF preferreds he recommends, such as HFRO.PR.A which offers an 8% yield.

  • The private credit market faced significant challenges last week.

The players

Dan Plettner

An investment analyst who focuses on qualitative investigative research methods on Closed-End Funds and other underfollowed securities. Plettner has been investing since his teen years, won the 'NSD award' as a retail Financial Advisor at Morgan Stanley Dean Witter, and attained his MBA from New York University.

VanEck BDC Income ETF (BIZD)

An exchange-traded fund that tracks a basket of private credit business development companies (BDCs).

HFRO.PR.A

A zero-fee 1940 Act protected closed-end fund preferred share that Plettner recommends as an alternative to BIZD, offering an 8% yield.

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What they’re saying

“Compare BIZD's uncertain forward yield and 12.86% expense ratio with zero-fee 1940 Act protected CEF preferreds (e.g., HFRO.PR.A 8%).”

— Dan Plettner, Investment Analyst

The takeaway

Plettner's analysis highlights the need for investors to carefully evaluate the costs and risks associated with different investment vehicles, particularly in the current challenging private credit market environment. His recommendation of CEF preferreds as an alternative to BIZD suggests that investors may be able to find better risk-adjusted returns in certain closed-end fund products compared to ETFs tracking private credit BDCs.