Wall Street’s Hottest Debt Is a Haven for Investors
- Floating-rate CLOs, leveraged loans generate biggest gains
- Investment-grade fixed-rate debt suffering negative returns
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Investors are finding shelter from Treasury volatility in two of Wall Street’s hottest markets.
Returns on U.S. leveraged loans and collateralized loan obligations have outperformed other fixed-income asset classes, despite recent volatility and increasingly loud voices raising concerns about the rapid growth of these markets. Leveraged loans have returned 4.29 percent, according to S&P/LSTA Leveraged Loan index data, while top-rated CLO tranches have returned 2.1 percent this year, according to JPMorgan Chase & Co. data.