Mutual fund and ETF investors are seeking shelter from the storm of rising interest rates, and they're flocking to leveraged loan investments as a result, Bloomberg's
Sridhar Natarajan and Lisa Abramowicz report.
Mutual funds and ETFs focusing on this debt have brought in $45.5 billion this year, assisting companies that are looking to refinance and have helped lower rates on loans, Natarajan and Abramowicz write.
The concern is that this fixation on leveraged loans could make the market more volatile and eventually lead to money flowing out of these investments just as quickly as they flowed in, Natarajan and Abramowicz report. Beneficiaries of the flows include Invesco's
] PowerShares Senior Loan Fund
, which has seen trading increase more than 12 times this year so far and State Street Bank & Trust
] SPDR Blackstone/GSO Senior Loan ETF
, which started with $65 million in assets and grew to $475 million.
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