LOAN PARTICIPATION FUND
\lˈə͡ʊn pɑːtˈɪsɪpˈe͡ɪʃən fˈʌnd], \lˈəʊn pɑːtˈɪsɪpˈeɪʃən fˈʌnd], \l_ˈəʊ_n p_ɑː_t_ˈɪ_s_ɪ_p_ˈeɪ_ʃ_ə_n f_ˈʌ_n_d]\
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Loans with higher-than-normal interest rates are the vehicles this mutual fund invests in. This fund is for stable and successful firms with low credit ratings due to age, industry, and the like. Not investment-grade loans. Secured by the firm's assets, making them higher quality than junk bonds. Loan participation funds offer higher yields than the investment-grade funds due to their high interest earnings. Also known as floating rate fund.
By Henry Campbell Black
