Putnam BDC Income ETF reduces distribution to $0.71 after earnings weakness in top holdings, though its real expense ratio is 0.75%.
Putnam BDC Income ETF (PBDC) lowered its April distribution by 14% to $0.71 per share, citing weakening earnings or dividend cuts in three of its top four holdings. The fund’s reported 13.49% expense ratio overstates its actual cost, as SEC rules require including fees from underlying BDC holdings that are already netted in earnings.
PBDC’s $280 million in assets under management reflect investor tolerance for its structure, which mirrors that of rival VanEck BDC Income ETF (BIZD). The discrepancy arises from acquired fund fees, which are passed through but do not represent additional costs to shareholders.
Despite the payout reduction, the fund maintains a yield competitive with peers, though the move highlights pressure on BDC portfolios amid tighter credit conditions.