U.S. Junk Funds See Record Inflow With Fed Poised to Buy
- Net gain of $7.66 billion beats record set two weeks earlier
- Investors piled back into junk bonds on news of Fed support
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U.S. junk bond funds saw a record $7.66 billion inflow as investors followed the Federal Reserve, which plans to buy the debt. The increase through April 15 is the third straight weekly gain this month, including the prior peak of $7.1 billion on April 1, according to Refinitiv Lipper.
“You can thank the Fed,” said Greg Zappin, a money manager at Penn Mutual Asset Management. “High-yield spreads have tightened about 300 basis points and the market is open to issuance, so I’m not surprised money is flowing in.”