Credit Funds Reaped Near-Record $15 Billion, Then Came the Rout

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(Bloomberg) -- Investors poured $14.6 billion into funds that buy U.S. investment-grade debt, high-yield bonds and leveraged loans in the week that ended June 10, just before a sell-off caused credit markets to tumble.

It was the second-highest inflow ever behind last week’s record. Investment-grade funds got $9.4 billion in new money, also the second-most ever, according to data from Refinitiv Lipper. Junk funds grew by $5.1 billion and loan funds by $39 million.

Credit Funds Reaped Near-Record $15 Billion, Then Came the Rout

The inflows reflect the prolonged rush into credit after the Federal Reserve began its unprecedented support for the market in late March. But enthusiasm has slowed abruptly, with credit now having its worst week in almost two months as a resurgence in virus cases sparks new concerns about the economic recovery.

Junk funds saw their 11th consecutive week of inflows since the Fed announced its support. The new money totals $46.6 billion over the period. Spreads for the riskier credits are now widening.

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