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Fsic Ii

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    Fsic Ii

    Somebody has suggested me to invest my SEP IRA with Franklin Square Capital Partners II in catagory of Business Development Companies. The idea behind it is that private sectors pay back their interest to investors in form of diviends. Does anyone know or invest with FSCP? If so, how well FSCP II perform in the past 5 years? Thank you

    #2
    Originally posted by pink elephant View Post
    Somebody has suggested me to invest my SEP IRA ... The idea behind it is that private sectors pay back their interest to investors in form of diviends.
    Well a couple glaring problems with whoever "suggested" this to you.

    #1) It's a SEP-IRA, which is not a taxable account. So neither interest or dividend matters for taxes at all. If there was some tax advantage to be had, you wouldn't qualify for it because it's in a SEP-IRA.

    #2) What they told you isn't even true.

    Public company stocks pay their investors in the form of dividends.

    But from looking at the prospectus, FSIC invests in private debts. Private company bonds do not get some special tax treatment from the IRS. Bond interest is taxed as ordinary income. Being a public or private company does not change that.

    From: http://www.fsinvestmentcorpii.com/pd...Prospectus.pdf

    Distributions by us generally are taxable to U.S. stockholders as ordinary income or capital gains. Distributions of our “investment company taxable income” (which is, generally, our net ordinary income plus realized net short-term capital gains in excess of realized net long-term capital losses) will be taxable as ordinary income to U.S. stockholders to the extent of our current or accumulated earnings and profits, whether paid in cash or reinvested in additional common stock. For taxable years beginning prior to January 1, 2013, to the extent such distributions paid by us to non-corporate stockholders (including individuals) are attributable to dividends from U.S. corporations and certain qualified foreign corporations, such distributions, or Qualifying Dividends, may be eligible for a maximum tax rate of 15%. In this regard, it is anticipated that distributions paid by us will generally not be attributable to dividends and, therefore, generally will not qualify for the 15% maximum rate applicable to Qualifying Dividends.
    In other words, per their own prospectus, this will be taxed like a normal bond fund, and will not get dividend treatment.

    Does anyone know or invest with FSCP? If so, how well FSCP II perform in the past 5 years? Thank you
    I've never heard of it until today, and I do not invest with them. But I did go to their site (FS Investment Corporation II - A Business Development Company | Investor Relations - Investor Documents ) and pull the prospectus to look for more info. I'd advise you to do the same.

    I do not know the 5 year returns.


    I'd be very cautious of this investment, because whoever "told" you about it seems to have some other motive. Why else would they lie about the tax treatment?



    What were you trying to accomplish with the fund? What problem are you trying to solve in your SEP?

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      #3
      Fsic Ii

      thank you so much for your information

      My goal with SEP IRA is that I would like to have a steady growth (moderate risks). Looking to improve my existing SEP IRA with Blackrock and Vanguard. Any other suggestion with good funds? Also have you heard of company LPL?

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        #4
        Originally posted by pink elephant View Post
        My goal with SEP IRA is that I would like to have a steady growth (moderate risks). Looking to improve my existing SEP IRA with Blackrock and Vanguard. Any other suggestion with good funds?
        I have no idea about your timeframes, goals, or other investments -- so I don't know what a good fund would be to complement what you have.

        I don't believe that haphazardly throwing together a couple "good" funds is a proper strategy.

        What does the rest of your portfolio look like? How far do you have until retirement?

        Also have you heard of company LPL?
        Yes I have.

        LPL Financial: LPL Financial Home

        Are you looking to work with an advisor? How did you hear about them?

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