U.S. Leveraged Loan Fund Outflows Rose to Fresh Record High

(Bloomberg) -- U.S. leveraged loan funds saw $3.53 billion of net outflows in the week ended Dec. 26, the biggest on record, according to Lipper.

Investors pulled $2.9 billion from mutual funds that buy the debt, according to Lipper. Exchange-traded funds meanwhile lost $626 million, Lipper data show. It was the sixth straight week of outflows. Fund flows are contributing to negative sentiment that is weighing on secondary prices, which are at the lowest level since July 2016, according to the S&P/LSTA Leveraged Loan Price Index.

This is the longest string of consecutive outflows exceeding $1 billion on record, according to Lipper data. Last week saw an outflow of $3.3 billion, the second biggest to date.

There has been $13.4 billion withdrawn from loan funds since Nov. 21. They are still positive for 2018 with $813 million of inflows year-to-date, Lipper data show.

To contact the reporter on this story: Lara Wieczezynski in Princeton at wieczezynski@bloomberg.net

To contact the editors responsible for this story: James Crombie at jcrombie8@bloomberg.net, Kelsey Butler, Christopher DeReza

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