Despite scary headlines, low-A.I.-risk BDCs are worth a new look now
With the market kicking business-development companies in the teeth, John Cole Scott , President of CEF Advisors, digs into his firm's data looking at "artificial-intelligence risk scoring" to find BDCs that have been hurt by headlines without holding tainted portfolios. BDCs relied heavily on software companies, due to the tech sector's blend of strong fundamentals, innovation and ability to resist economic fluctuations, but have suffered as investors fear for the future of software in the face of challenges from artificial-intelligence companies. Scott, who also serves as chairman of the Active Investment Company Alliance, went looking for BDC's with "low AI risk, clean credit and sensible leverage and costs," and came away from the analysis convinced that investors should lean into the troubles. Specifically, he mentions funds from Nuveen and Kayne Anderson as worth watching now.