VanEck’s BDC ETF Faces Net Asset Value Challenges

The VanEck BDC Income ETF provides investors with exposure to Business Development Companies (BDCs), financial entities that primarily extend credit to mid-sized firms. A fundamental shift in market conditions emerged by the end of December 2025. Previously a tailwind for earnings, persistently elevated interest rates have now become a primary driver of net asset value (NAV) erosion. This shift coincides with tightening credit standards, a decline in transaction volume, and a rising incidence of non-accrual loans within BDC portfolios.