What are business development company (BDC) ETFs?
Business development companies (BDCs) are publicly traded firms that lend money to, and sometimes take stakes in, small and midsize private US companies. They pass most of their taxable income to shareholders, so they tend to pay large dividends. The two ETFs in this group that own stocks, VanEck's BIZD and Franklin Templeton's Putnam BDC Income ETF (PBDC), both hold Ares Capital, Blue Owl Capital Corp, Main Street Capital, Blackstone Secured Lending Fund, Hercules Capital, Golub Capital BDC and FS KKR Capital. Ares Capital is BIZD's largest position at 14.3% and PBDC's second largest at 10.38%.
The funds are built in different ways. BIZD tracks the MVIS US Business Development Companies Index and holds 30 BDCs, with 46.47% in its top 10. PBDC names no index. Its stated goal is current income, and it holds 22 BDCs with 71.63% in its top 10. The other two are exchange-traded notes (ETNs) from UBS. These are unsecured debts that pay an index's return, not funds that own shares. BDCZ follows the MarketVector Business Development Companies Liquid Index. BDCX aims for 1.5 times the return of a MarketVector BDC index, which makes it a leveraged product.
The stated costs look very high. The median expense ratio is 9.69%, ranging from 0.85% for BDCZ to 11.77% for PBDC. The ETF figures include the BDCs' own operating and borrowing costs, which fund rules require to be shown as “acquired fund fees.” Investors who own BDCs directly bear those costs too. BDCZ's lower fee leaves them out, though they still reduce its index's returns.
Most of the money is in one fund. Of roughly $1.9 billion across the group, about $1.6 billion sits in BIZD. PBDC has about $283 million and BDCZ about $20.6 million.
Business development company (BDC) ETF holdings: the stocks most funds own
The stocks that show up most often among the largest positions of the 2 biggest business development company (BDC) ETFs with holdings reports, from their latest N-PORT filings.
| Stock | Funds holding it | Typical weight |
|---|---|---|
| Ares Capital Corp | 2 of 2 | 10.38% |
| Blue Owl Capital Corp | 2 of 2 | 5.88% |
| Main Street Capital Corp | 2 of 2 | 5.26% |
| Blackstone Secured Lending Fund | 2 of 2 | 4.32% |
| Hercules Capital Inc | 2 of 2 | 3.06% |
| Golub Capital BDC Inc | 2 of 2 | 2.93% |
| FS KKR Capital Corp | 2 of 2 | 2.87% |
| Blue Owl Technology Finance Corp | 2 of 2 | 2.81% |
| Sixth Street Specialty Lending Inc | 2 of 2 | 2.02% |
| Trinity Capital Inc | 2 of 2 | 1.99% |
| Capital Southwest Corp | 2 of 2 | 1.83% |
Typical weight is the median share of each fund’s assets in the stock, among the funds that hold it in their 25 largest positions.
The largest business development company (BDC) ETFs, side by side
Swipe the table to see all 3 funds.
| BIZD | PBDC | BDCZ | |
|---|---|---|---|
| Net assets | $1.63B | $283.1M | $20.6M |
| Expense ratio | 9.69% | 11.77% | 0.85% |
| Holdings | 30 | 22 | 19 |
| In the 10 largest | 46.47% | 71.63% | — |
| Biggest holding | Ares Capital Corp (14.3%) | Blue Owl Capital Corp Com (10.76%) | — |
| Yield | 12.9% | 11.66% | 12.08% |
| 1-year return | -6.3% | -8.9% | -6.2% |
| 3 years, a year | +5.0% | +5.9% | +4.1% |
| 5 years, a year | +3.7% | — | +3.3% |
| Worst drop, past year | -15.4% | -15.6% | -14.7% |
| Launched | 2013 | 2022 | 2015 |
The largest ordinary funds by net assets (leveraged and inverse funds are listed further down). Holdings from each fund’s latest N-PORT report; returns include reinvested distributions, as of Oct 27, 2026.
Head to head
BIZD vs PBDC
BIZD tracks the MVIS US Business Development Companies Index with 30 holdings. Its top 10 make up 46.47%, led by Ares Capital at 14.3%. PBDC names no index, holds 22 BDCs and puts 71.63% in its top 10, led by Blue Owl Capital Corp at 10.76%. They share 20 holdings, and 51.3% of their assets overlap. BIZD's expense ratio is 9.69% and PBDC's is 11.77%. In the year to June 26, 2025, BIZD returned 6.3% and PBDC 6.6%. Their worst drops were 19.6% and 20.1%. BIZD may suit investors who prefer an index. PBDC may suit those comfortable with a manager's more concentrated picks.
BIZD vs BDCZ
BIZD is an ETF that owns its 30 BDCs outright. BDCZ is an exchange-traded note (ETN): UBS promises to pay the return of a 19-member BDC index, so holders own no shares. BDCZ's 0.85% fee looks far below BIZD's 9.69%. But BIZD's figure includes the BDCs' own costs, and those costs also weigh on the returns of BDCZ's index. Through June 26, 2025, BIZD returned 6.3% over one year and 18.3% over five, while BDCZ returned 1.4% and 15.9%. Their worst one-year drops were 19.6% and 19.5%. BIZD may suit those who want to own the shares. BDCZ may suit those comfortable relying on UBS to pay.
How much do the largest business development company (BDC) ETFs overlap?
Owning two funds that hold the same stocks adds little diversification. Overlap here is the share of assets two funds have in common: for each stock both own, the smaller of its two weights, added up.
From each fund’s full holdings in its latest N-PORT report.
How have business development company (BDC) ETFs performed?
The five largest ordinary funds: growth from the start of the range, distributions reinvested. The dashed gray line is the S&P 500 (SPY).
How business development company (BDC) ETFs did in past market crashes
| Fund | 2008 crash | 2020 crash | 2022 drop |
|---|---|---|---|
| BIZD | not yet launched | -55.0% | -15.9% |
| PBDC | not yet launched | not yet launched | not yet launched |
| BDCZ | not yet launched | -55.3% | -14.5% |
| S&P 500 (SPY) | -55.2% | -33.7% | -24.5% |
Total return from the stock market’s peak to its low in each fall, distributions reinvested.
What drives business development company (BDC) ETFs?
BDCs earn most of their money from interest on loans to midsize private companies, plus fees and some equity stakes. Many of those loans carry floating rates. So income tends to rise when short-term interest rates go up and fall when they come down. Credit matters even more. In a recession, more borrowers struggle to pay, losses build and dividends can be cut. BDCs also borrow to make more loans, which magnifies both gains and losses. Their share prices move around their net asset value (the value of their loans and stakes minus their debts), and they often sink to a discount when investors fear defaults.
Those forces show up in past selloffs. In the 2020 COVID crash, BIZD fell 55% and BDCZ fell 48.2%, far more than the S&P 500's 33.7%, as investors braced for loan defaults. In the 2022 bear market the pattern reversed. BIZD fell 16% and BDCZ 16.5%, against 24.5% for the S&P 500, partly because rising rates lifted income on floating-rate loans. None of these funds existed in the 2008 financial crisis, when the S&P 500 fell 55.2%. PBDC launched too late in 2022 to have a downturn record.
Business development company (BDC) ETFs with the lowest expense ratios
| # | Fund | Expense ratio | On $10,000 | Net assets |
|---|---|---|---|---|
| 1 | BDCZ ETRACS MarketVector Business Development Comp… | 0.85% | $85 a year | $20.6M |
| 2 | BIZD VanEck BDC Income ETF | 9.69% | $969 a year | $1.63B |
| 3 | PBDC Putnam BDC Income ETF | 11.77% | $1,177 a year | $283.1M |
Ordinary funds with at least $10 million in net assets. The median ordinary business development company (BDC) ETF charges 9.69% a year; leveraged and inverse funds usually charge more.
Do business development company (BDC) ETFs pay dividends?
3 of the 3 ordinary business development company (BDC) ETFs with a page here paid distributions over the last 12 months, with a median yield of 12.08%.
| Highest yields | Yield | Net assets |
|---|---|---|
| BIZD VanEck BDC Income ETF | 12.9% | $1.63B |
| PBDC Putnam BDC Income ETF | 11.66% | $283.1M |
Distributions over the last 12 months divided by the price; funds with at least $25 million in net assets.
How to choose a business development company (BDC) ETF
- Headline fees aren't comparable. BDCZ lists 0.85%, BIZD 9.69% and PBDC 11.77%. The two ETFs must count their BDCs' own operating and borrowing costs as “acquired fund fees.” The ETN doesn't, though those costs still reduce its index's returns.
- An index or a manager's picks. BIZD replicates the MVIS US Business Development Companies Index. PBDC names no index. Its stated goal is current income, so its managers decide which BDCs to own and how much of each.
- How concentrated each portfolio is. BIZD holds 30 BDCs, with 46.47% in its top 10 and Ares Capital at 14.3%. PBDC holds 22, with 71.63% in its top 10, so a handful of lenders drive more of its results.
- Fund shares or a bank's IOU. BIZD and PBDC own BDC shares. BDCZ and BDCX are UBS exchange-traded notes: unsecured debt that pays an index's return. Holders own no BDCs and depend on UBS being able to pay.
- Size and track record. BIZD has about $1.6 billion and a record back to 2013. PBDC, launched in 2022, has about $283 million. BDCZ has about $20.6 million, and very small products can cost more to trade.
- BDCX is a leveraged trading tool. BDCX aims for 1.5 times its index's return. Because the leverage resets, longer-term results can drift from that. In the year to June 26, 2025, it lost 2.2% while BDCZ gained 1.4%.
What are the risks of business development company (BDC) ETFs?
- Income depends on rates and borrowers. Many BDC loans pay floating rates, so income tends to fall when short-term rates drop. In a recession, more borrowers default. In the 2020 COVID crash, BIZD fell 55%, against 33.7% for the S&P 500.
- A few lenders dominate. PBDC's top 10 holdings make up 71.63% of the fund, and BIZD's make up 46.47%. Ares Capital alone is 14.3% of BIZD. Both funds also hold Blue Owl Capital Corp, Main Street Capital and Hercules Capital.
- Stock-like swings for an income fund. In the year to June 26, 2025, BIZD, PBDC and BDCZ had volatility (a measure of price swings) of about 18.5% and worst drops of 19.5% to 20.1%. A high yield doesn't mean a steady price.
- Leverage magnifies losses in BDCX. BDCX multiplies its index's moves by 1.5. In the year to June 26, 2025, its volatility was 29.8% and its worst drop was 29%. It lost 2.2% while the unleveraged BDCZ gained 1.4%.
- ETNs carry the issuer's credit risk. BDCZ and BDCX are UBS debt, not funds. If UBS could not pay, holders could lose money even if BDCs did well. BDCZ is also tiny, at about $20.6 million.
Leveraged and inverse business development company (BDC) ETFs (1.5x)
These funds aim for a multiple, or the opposite, of one day’s return, and reset every day. Held for longer than a day, their results can drift far from that multiple, especially when prices swing. They are trading tools, not long-term holdings. Why leveraged ETFs decay →
| Fund | Daily aim | Net assets | 1-year return |
|---|---|---|---|
| BDCX ETRACS Quarterly Pay 1.5x Leveraged MarketVector … | 1.5× | — | -11.2% |
List of all business development company (BDC) ETFs, by size
Questions investors ask about business development company (BDC) ETFs
What is a BDC, and how is a BDC ETF different?
A business development company (BDC) is a publicly traded firm that lends to, and sometimes invests in, small and midsize private US companies. To avoid corporate income tax, BDCs pay out most of their taxable income, so their dividends tend to be high. Owning one BDC means relying on one lender's results. A BDC ETF such as BIZD or PBDC holds many BDCs, including Ares Capital and Blue Owl Capital Corp.
Is there a BDC ETF, and how many are there?
Yes. Four US-listed products focus on BDCs. VanEck BDC Income ETF (BIZD) and Putnam BDC Income ETF (PBDC), from Franklin Templeton, are ETFs that own BDC shares. UBS's BDCZ and BDCX are exchange-traded notes (ETNs), which trade like ETFs but are unsecured debt of the bank. BDCX is a 1.5x leveraged version. None of the four comes from Vanguard.
What is the largest BDC ETF?
VanEck BDC Income ETF (BIZD) is the largest by a wide margin, with about $1.6 billion of the roughly $1.9 billion across the group. It launched in 2013 and tracks the MVIS US Business Development Companies Index, holding 30 BDCs. Putnam BDC Income ETF (PBDC) is next at about $283 million, followed by UBS's BDCZ note at about $20.6 million.
Which BDC ETF has the lowest expense ratio?
BDCZ, at 0.85%, against 9.69% for BIZD and 11.77% for PBDC. The figures aren't directly comparable. Funds that hold BDCs must report the BDCs' own operating and borrowing costs as “acquired fund fees.” BDCZ is a UBS note that holds no BDCs, so those costs don't appear in its fee, but they still reduce the index returns it pays. BDCZ is also small, at about $20.6 million.
BIZD vs PBDC: what's the difference?
BIZD tracks an index and holds 30 BDCs, with 46.47% in its top 10. PBDC names no index, aims for current income and holds 22 BDCs, with 71.63% in its top 10. They share 20 holdings, and 51.3% of their assets overlap. PBDC's expense ratio is 11.77%, against 9.69% for BIZD. In the year to June 26, 2025, PBDC returned 6.6% and BIZD 6.3%. BIZD dates to 2013 and PBDC to 2022.
Do BDC ETFs pay dividends?
Yes, income is central to these funds. BDCs pay out most of their taxable income, and the ETFs pass it on. PBDC's yield was 9.73% as of June 26, 2025. BIZD aims to match both the price and the yield performance of its index. BDCX's full name says it pays quarterly. BDC dividends aren't fixed, though. They can shrink when interest rates fall or borrowers default.
Do BDC ETFs own Ares Capital?
Yes, the two that hold shares do. Ares Capital is BIZD's largest holding at 14.3% of the fund and PBDC's second largest at 10.38%. Both also own Blue Owl Capital Corp, Main Street Capital, Blackstone Secured Lending Fund, Hercules Capital and Golub Capital BDC. BDCZ and BDCX are UBS notes, so they own no shares. Instead, they pay returns linked to MarketVector BDC indexes.
What is BDCX, the leveraged BDC ETN?
BDCX is a UBS exchange-traded note that aims for 1.5 times the return of the MarketVector BDC Liquid Index and pays quarterly. Because the leverage resets, results over longer periods can drift away from 1.5 times the index. In the year to June 26, 2025, BDCX lost 2.2% while the unleveraged BDCZ gained 1.4%, and its worst drop was 29%. That makes it more of a trading tool than a long-term holding.
Is there a Vanguard, Fidelity or Schwab business development company (BDC) ETF?
No. None of the three offers a business development company (BDC) ETF. The largest business development company (BDC) ETFs come from VanEck (BIZD), Franklin Templeton (PBDC) and UBS (BDCZ), and customers of all three firms can buy other companies’ ETFs in their brokerage accounts.
