BDCs and private credit funds finance middle-market firms but differ in access. BDCs offer liquidity and transparency; private credit funds are less liquid with limited access and longer lock-ups.

Headline yield shows income potential, but taxes reduce what you keep. Equity investors should focus on after-tax yield. Preferreds may help boost income and improve tax efficiency.

Investor sentiment turned more selective as markets rewarded tangible fundamentals and execution over elevated expectations entering 2026.

Fallen angels outperformed broad high yield in 2025, driven by security selection, longer duration, and resilient credit quality. Attractive yields and selective downgrades support 2026.