says Morningstar Senior Analyst Scott Berry.
If you invest in a bank-loan fund through a broker, you’ll pay a sales charge, or load. “Among load funds,” says Berry, “Eaton Vance Prime Rate Reserves (EVPRX) has a solid record. Both Eaton Vance and Fidelity have strong research capabilities, which may help them avoid buying bad loans.”
You also should be aware that liquidity might be limited. There is typically a fixed time period, once each quarter, when you can withdraw money from these funds.
Another option may be available to investors who work with a financial planner. “We pool clients’ money so we can get into Columbia Floating Rate Z (XLFZX), where the minimum investment is $250,000,” says Stanasolovich. “The yield in this fund is extremely high [4.7% as of this writing]. Once you’re in the fund, there’s quarterly liquidity, with no minimum for withdrawals.”
| BANK-LOAN FUNDS, RETAIL ONLY—SINGLE SHARE CLASS, BY 3-YEAR RETURN | ||||||
| Fund Name | Ticker | 1-yr. Return |
3-yr. Return |
5-yr. Return |
Phone | Minimum Initial Purchase |
| Columbia Floating Rate Advantage A | XSFRX | 21.71 | 7.97 | NA | 800-345-6611 | $1,000 |
| ING Senior Income Fund A | XSIAX | 8.82 | 6.14 | NA | 800-992-0180 | 1,000 |
| Columbia Floating Rate A | XLFAX | 15.85 | 6.03 | NA | 800-345-6611 | 1,000 |
| Van Kampen Senior Loan Fund B | XPRTX | 18.59 | 4.89 | 3.30 | 800-421-5666 | 1,000 |
| Oppenheimer Senior Floating Rate A | XOSAX | 10.83 | 4.81 | NA | 800-525-7048 | 1,000 |
| Merrill Lynch Senior Floating Rate | XMPFX | 14.50 | 4.46 | 4.25 | 800-654-6837 | 1,000 |
| Eaton Vance Floating Rate Hi Inc Adv | EAFHX | 8.46 | 4.30 | NA | 800-225-6265 | 1,000 |
| SunAmerica Senior Floating Rate B | XNASX | 10.31 | 4.07 | 4.54 | 800-858-8850 | 5,000 |
| Morgan Stanley Prime Income Trust | XPITX | 15.76 | 3.99 | 4.32 | 800-869-6397 | 1,000 |
| Fidelity Advisor Float Rate Hi Inc A | FFRAX | 5.55 | 3.87 | NA | 800-522-7297 | 2,500 |
| SOURCE: MORNINGSTAR INC. MORNINGSTAR MAKES EVERY EFFORT TO ENSURE THE COMPLETENESS AND ACCURACY OF THIS DATA BUT CANNOT GUARANTEE IT. DATA THROUGH MARCH 31, 2004 |
||||||