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Mutual Funds Are Scrambling to Buy Corporate Bonds

"Helping to squeeze prices - and performance - higher."

How best to explain the recent run in investment-grade credit?

Analysts at Deutsche Bank AG have an idea. They point out that mutual funds have snapped up $275 billion worth of the bonds sold by companies with relatively stronger balance sheets in 2015 — far outstripping the net supply of new debt sold into the market. "The $275 billion increase in mutual funds' credit holdings was twice the level of credit supply last year," write analysts led by Dominic Konstam, Deutsche's global head of rates research.