Investors poured $1.4 billion into U.S. loan funds this week, the second-largest inflow following the record $1.5 billion of deposits during the second week of February, according to Bank of America Corp.
U.S. loan fund assets under management have increased by 18.6 percent, or $14 billion, this year, the Charlotte, North Carolina-based bank said yesterday in a research report.
The price of leveraged loans climbed for a second-straight day to 98.21 cents on the dollar yesterday, the highest level since July 22, 2007, according to the Standard & Poor’s/LSTA U.S. Leveraged Loan 100 index.
Leveraged loans are a type of junk-grade debt rated less than Baa3 by Moody’s Investors Service and below BBB- by S&P.
U.S. high-yield bond funds remain “out of investor favor,” with just $144 million of deposits this week, according to the Bank of America report.