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Asset Growth at US Leveraged Loan Funds Stalls Amid Market Jitters

US leveraged loan fund AUM

The 2018 surge in asset growth at U.S. loan funds ground to a halt in October, with AUM increasing by a thin $360 million, down from $2.86 billion in September and from the roughly $3 billion average during the first nine months of the year, according to LCD and Lipper.

The October activity leaves loan fund AUM at $184.1 billion.

That’s the tenth straight month in which a record was set for the asset class, but is an obvious downshift in the face of a now-volatile equities market and relative blizzard of mainstream financial press headlines—accompanied by stories with varying levels of sophistication—urging caution where leveraged loans are concerned. – Staff reports

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Risk off (Finally): Investors Withdraw $1.5B from US Leveraged Loan Funds

loan fund flows
U.S. loan funds reported an outflow of $1.5 billion for the week ended Oct. 31, according to Lipper weekly reporters only. This marks the largest weekly outflow from loan funds since the week ended Dec. 16, 2015, which posted an outflow of about $2 billion.

This follows last week’s slight outflow of $7 million, and narrows the year-to-date total inflow to roughly $10.2 billion.

Mutual funds drove the bulk of the outflow this week, with an exit of $956 million, marking the largest exit from mutual funds since the week ended Dec. 23, 2015, which posted a mutual-fund exit of $1.2 billion (and barring a nominal $1.3 billion mutual-fund outflow for the week ended Nov. 11, 2017, which came as the result of a reclassification at a single institutional investor).

Meanwhile, ETFs reported an outflow of $551.5 million this week, indicating the largest weekly ETF exit on record.

The four-week trailing average snapped a 40-week streak in the black, slipping to negative $247 million, from positive $207 million last week.

The change due to market conditions this past week was a decrease of $10 million, following last week’s decline of $186 million.

Total assets were roughly $106.8 billion at the end of the observation period. ETFs represent about 11.7% of total assets, at roughly $12.5 billion. — James Passeri

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Assets at US Leveraged Loan Funds Hit Record High

leveraged loan AUM

The ever-growing mountain of assets under management at U.S. leveraged loan funds hit $178.7 billion in July, an increase of $2.7 billion from June, according to Lipper and LCD. While the latest increase is the smallest in five months, it is the eighth straight advance for the asset class, and yet another record.

The growth in loan fund AUM could help sustain buyside pressure in the now $1.1 trillion U.S. leveraged loan market, sources say, as funds look to put this cash to work. Over the past two years, credit structure and pricing have come under considerable pressure due to investor demand.

As was the case in June—and for much of recent memory—retail investors were the key factor in July, contributing a net $732 million, making for the seventh straight month of inflows, totaling some $9.5 billion year to date, according to Lipper and LCD. Amid the run of cash flowing into market, it’s worth noting that the July number was the smallest net gain since February, demonstrating that retail investors are downshifting somewhat where the leveraged loan asset class is concerned (for now, anyway).

Retail investors have been drawn to the floating rate asset class amid continued rate hikes by the Fed, which have helped buoy yields on leveraged loans, even as borrowing spreads on the debt remain low. – Staff reports

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US Leveraged Loan Fund Inflow Streak Hits 11 Weeks, $4.3B

US loan funds

U.S. loan funds recorded an inflow of $494 million for the week ended May 2, according to Lipper weekly reporters only. This follows last week’s inflow of $264 million and marks the eleventh consecutive week of inflows for U.S. loan funds, for a total inflow of roughly $4.3 billion over that span.

Mutual funds again led the gains this week, with an inflow of $373.5 million, while ETFs reported an inflow of about $121 million.

The four-week trailing average rose modestly, to $441 million, from $389 million last week, marking a fifteenth consecutive week in the black.

The year-to-date total inflow is now roughly $5 billion.

Total assets rose to roughly $101 billion at the end of the observation period, which is the highest level since the week ended Sept. 24, 2014, when total assets were reported at $102.4 billion. The change due to market conditions this past week was an increase of $205 million. ETFs represent about 13% of total assets, at about $13.3 billion. — James Passeri

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US High Yield Bond Funds See $525M Investor Cash Withdrawal

us high yield flows

U.S. high-yield funds recorded an outflow of roughly $525 million for the week ended March 7, according to weekly reporters to Lipper only. It’s the eighth consecutive week of exits, for a total outflow of $16.6 billion over that period, which ranks as the largest high-yield outflow streak on record.

ETFs drove this week’s exit, with an outflow of roughly $349 million, while roughly $176 million was pulled from mutual funds.

The total outflow so far this year is now $13.7 billion.

The four-week trailing average narrowed to negative $2 billion, from negative $2.5 billion last week.

The change due to market conditions this past week was a decrease of $484 million. Total assets at the end of the observation period were about $192.7 billion. ETFs account for about 23% of the total, at $44.2 billion. — James Passeri

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US High Yield Bond Funds See $2.7B Investor Cash Withdrawal


us high funds

U.S. high-yield funds recorded an outflow of roughly $2.7 billion for the week ended Feb. 7, according to weekly reporters to Lipper only. This follows last week’s exit of about $1.7 billion and marks the fourth consecutive week of outflows, for a total of $8.7 billion over that span.

This week’s exit was fairly evenly split with a $1.4 billion outflow from mutual funds, while $1.3 billion exited ETFs.

The year-to-date total outflow from high-yield funds is now at about $5.9 billion.

The four-week trailing average declined to negative $2.2 billion for the period, from negative $825 million last week, and the change due to market conditions this past week was a decrease of $1.7 billion.

Total assets at the end of the observation period were $202.2 billion, indicating the lowest point since November 2016. ETFs account for about 23.5% of the total, at $47.6 billion. — James Passeri

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US High Yield Bond Funds See $1.1B Investor Cash Withdrawal

high yield bond flows

U.S. high-yield funds recorded an outflow of roughly $1.1 billion for the week ended Jan. 24, according to weekly reporters to Lipper only. This week’s outflow follows last week’s exit of roughly $3.1 billion, and brings the total outflow from high-yield funds so far this year to about $1.4 billion.

ETFs made up the bulk of this week’s outflow, with an exit of roughly $621 million, while $510 million was pulled out of mutual funds.

The four-week trailing average widened to negative $342 million, from negative $119.5 million last week.

The change due to market conditions this past week was an increase of $123.5 million. Total assets at the end of the observation period were $207.8 billion. ETFs account for about 24% of the total, at $50.3 billion. — James Passeri

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US Leveraged Loan Funds See $477M Investor Cash Inflow

US loan funds

U.S. loan funds recorded an inflow of $477 million for the week ended Jan. 24, according to Lipper weekly reporters only. This inflow snaps a streak of 14 consecutive weeks of outflows that totaled $4.35 billion over that span.

Note on the week ended Nov. 8, U.S. loan funds recorded an exit of roughly $1.5 billion, although roughly $1.1 billion of that total outflow was the result of a reclassification at a single institutional investor, whereby the investor’s open-end fund was liquidated and merged into its closed-end fund. The transaction was reported as a net outflow as money exited the open-end universe into closed-end funds.

Mutual funds made up roughly $295.5 million of the total inflow this week, while $181.5 million entered ETFs.

The four-week trailing average came in at positive $55 million, up from negative $114 million last week, and it follows twelve consecutive weeks in the red.

The change due to market conditions this past week was positive $136 million. Total assets were $95.8 billion at the end of the observation period. ETFs represent about 19.8% of the total, at $18.9 billion. — James Passeri

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After Big Inflow, US High Yield Funds See $3.1B Investor Cash Withdrawal

high yield bond flows

U.S. high-yield funds recorded an outflow of roughly $3.1 billion for the week ended Jan. 17, according to weekly reporters to Lipper only.

This week’s outflow follows an inflow of $2.65 billion last week, and puts the total outflow so far this year at about $238 million.

ETFs accounted for roughly $2 billion of this week’s outflow, while $1.1 billion exited mutual funds.

The four-week trailing average swung to negative $120 million, from positive $371 million last week.

The change due to market conditions this past week was an increase of $316 million. Total assets at the end of the observation period were $208.8 billion. ETFs account for about 24% of the total, at $50.8 billion. — James Passeri

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After $6.5B of Withdrawals, Investors Cautiously Approach High Yield Mart

US high yield fund

U.S. high-yield funds recorded an inflow of $310 million for the week ended Nov. 29, according to weekly reporters to Lipper only. This follows last week’s exit of $209 million and snaps a streak of four consecutive weeks of outflows, which saw a total exit of $6.5 billion over that period.

ETFs were the driver behind this week’s action, with an inflow of $602 million that outweighed the $292 million exodus from mutual funds. Mutual funds have now posted outflows for seven consecutive weeks, for a total exit of $5.4 billion over that span.

The four-week trailing average narrowed to negative $1.2 billion this week, from negative $1.6 billion last week, which marked the widest level since March.

The year-to-date total outflow is now roughly $12.9 billion, reflecting a $16.3 billion exit from mutual funds and a $3.4 billion inflow to ETFs.

The change due to market conditions this past week was an increase of $133 million. Total assets at the end of the observation period were $208.5 billion. ETFs account for about 25% of the total, at $52.2 billion. — James Passeri

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