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Investors Pour Whopping $1.7B into US Leveraged Loan Funds

US loan funds

U.S. leveraged loan funds recorded an inflow of $1.76 billion in the week ended Dec. 7, according to the Lipper weekly reporters only. This is the largest single-week inflow since August 2013 and follows a $1.12 billion inflow from two weeks ago.

Despite a weak start to 2016, flows have been solidly positive in the second half of year, and particularly in recent weeks. The three largest inflows of the year have been recorded in the last four weeks. The weekly average over that span is $971.2 million, up from $519.7 million last week.

Inflows have now been recorded in 28 of 49 weeks this year.

ETF flows were a record high $559.9 million of the total this week, or 32%, while $1.2 billion flowed into mutual funds.

Year-to-date inflows to leveraged loan funds are $2.31 billion, based on outflows of $1.28 billion from mutual funds against inflows of $3.59 billion to ETFs, according to Lipper.

The change due to market conditions this past week was positive $343.8 million, the highest since the week ended July 13. Total assets were $75.5 billion at the end of the observation period. ETFs represent about 17% of the total, at $12.8 billion. — Jon Hemingway

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Another Gain for US Leveraged Loans; MTD Return = 0.49%

Loans gained 0.05% today after gaining 0.12% yesterday, according to the S&P/LSTA Leveraged Loan Index.

The S&P/LSTA US Leveraged Loan 100, which tracks the 100 largest loans in the broader Index, gained 0.05% today.

Loan returns are 0.49% in the month to date and 9.44% in the YTD.

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Leveraged Loans Gain Another 0.09% Today, Extending Win Streak

Loans gained 0.12% today after gaining 0.09% yesterday, according to the S&P/LSTA Leveraged Loan Index.

The S&P/LSTA US Leveraged Loan 100, which tracks the 100 largest loans in the broader Index, gained 0.16% today.

Loan returns are 0.44% in the month to date and 9.38% in the YTD.

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US Leveraged Loans Gain 0.09% Yesterday; YTD Return Grows to 9.25%

Loans gained 0.09% today after gaining 0.08% yesterday, according to the S&P/LSTA Leveraged Loan Index.

The S&P/LSTA US Leveraged Loan 100, which tracks the 100 largest loans in the broader Index, gained 0.11% today.

Loan returns are 0.32% in the month to date and 9.25% in the YTD. – Staff reports

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US Leveraged Loans Return 0.08% Today; YTD Return Hits 9.15%

Loans gained 0.08% today after gaining 0.07% on Friday, according to the LCD Daily Loan Index.

The S&P/LSTA US Leveraged Loan 100, which tracks the 100 largest loans in the broader Index, gained 0.09% today.

In the year to date, loans overall have gained 9.15%.

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Leveraged Loan Coffers Grow as Investors Eye Rate Hike, Trump Presidency

loan fund assets

Assets at U.S. loan funds rose by $2.84 billion in October, to $121.2 billion, as investors continued to pour money into the market.

The primary reasons for the ongoing investor bullishness regarding loans: A Fed rate hike later this month – which would bolster a floating-rate asset class such as loans – appears all but a done deal, and investors appear keen to bank on increased spending/inflation accompanying a Trump presidency.

This marks the fourth straight monthly gain for the asset class, for a total of $9.7 billion, according to Lipper. Since February, assets at U.S. loan funds have risen by nearly $14 billion.

The two main technical drivers of this asset growth will be familiar.

The first: loan funds saw a net inflow of $1.65 billion in October, according to weekly reporters to Lipper. That’s the fourth straight monthly gain, and is the largest since the $1.9 billion inflow in February 2014.

The second: Buoyed by the steady stream of cash flowing into loan funds and ETFs, prices in the secondary continued to rise in October, jumping by a hefty 205 bps during the month, according to the S&P/LSTA Leveraged Loan Index. (Note: some of that increase was due to credits exiting the Index).

As prices on loans increase, of course, their asset value rises. – Tim Cross

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US Leveraged Loan Funds See Whopping $1.12B Investor Cash Inflow

U.S. leveraged loan funds recorded an inflow of $1.12 billion in the week ended Nov. 23, according to the Lipper weekly reporters only. That nearly doubles the $673 million from the prior week and marks the largest inflow into the asset class since the week ended Sept. 18, 2013 ($1.33 billion).

US loan funds

Loan funds have been on a tear in the second half of the year. Inflows were recorded in 19 of the last 22 weeks for a total inflow of $5.78 billion during that span. Over the first 26 weeks of 2016 the cumulative outflow was $5.565 billion, with 18 negative weeks against just eight positive readings.

As such, the year-to-date figure swung positive with last week’s result, at $212.5 million, versus a total outflow of $906.2 million as of Nov. 16. That’s based on outflows of $2.7 billion from mutual funds against inflows of $2.9 billion to ETFs, according to Lipper.

ETF flows were 36% of the total last week, but logged their highest ever inflow by volume of $406.2 million. For mutual funds, the $712.4 million was the largest weekly inflow since January 2014.

With this large inflow, the four-week trailing average jumped to positive $471.5 million, from $264.5 million in the week prior.

The change due to market conditions this last week was positive $120.3 million, the largest increase in five weeks. Total assets were $70.56 billion at the end of the observation period. ETFs represent about 17% of the total, at $12.1 billion. — Jon Hemingway

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Leveraged Loans Gain 0.06% Today; YTD Return: 8.63%

Loans gained 0.06% today after gaining 0.03% on Friday, according to the LCD Daily Loan Index.

The S&P/LSTA US Leveraged Loan 100, which tracks the 100 largest loans in the broader Index, gained 0.09% today.

In the year to date, loans overall have gained 8.63%.

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As Junk Bonds Take Hit, Leveraged Loan Funds See Big Cash Inflow

U.S. leveraged loan funds recorded an inflow of $666.3 million in the week ended Nov. 16, according to the Lipper weekly reporters only. This is the largest inflow since the week ended Feb. 26, 2014 when the inflow was $673 million.

US loan funds

This is a strong answer to last week’s mild $45 million outflow. There have now been inflows in 15 of the last 16 weeks for a total of $4.49 billion over that span.

This is in contrast to the high yield bond market, of course, which saw another big cash withdrawal this week. 

The four-week trailing average for loans rises to positive $264.5 million, from $226.6 million last week.

ETF flows were just $10.6 million of the total this week, with $655.7 million flowing into mutual funds.

Year-to-date outflows from leveraged loan funds now total $906.2 million, based on outflows of $3.4 billion from mutual funds against inflows of $2.51 billion to ETFs, according to Lipper.

The change due to market conditions this past week was positive $42.25 million, snapping two straight weeks of declines. Total assets were $71.73 billion at the end of the observation period. ETFs represent about 16% of the total, at $11.66 billion. — Jon Hemingway

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Demand for US Leveraged Loans Swamps Supply by $6B in October

supply v demand - leveraged loans

Demand from loan investors overwhelmed supply for the fourth consecutive month in October as cash poured into funds and ETFs while CLO issuance matched its impressive September total.
By the numbers, demand topped supply by $6 billion in October, according to LCD.

While that’s down from $9 billion in September and from the whopping $12 billion in August (the most since June 2015), it roughly matches the $6.5 billion surplus in July. All told, demand has swamped supply by an average of $8.4 billion over the past four months.

The usual suspects were at work.

Inflows to U.S. loan funds and ETFs totaled a net $1.65 billion last month, the most since March 2014, according to Lipper, as investors kept one eye on the roller-coaster U.S. electoral process  and the other on interest rates, amid firming expectations of a Fed hike in December.

Another factor on the demand side: CLOs once again had a good month, with $8.41 billion in new vehicles in October, the most since June 2015, and just topping the healthy September figure. – Tim Cross

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This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.