Investors poured $462 million into U.S.loan funds this week, the biggest weekly inflow since May 2011, according to Bank of America Corp.
Floating-rate bank debt funds have seen 18 straight weeks of investment, bringing the total amount of money placed this year to $6.5 billion, New York-based strategists Hans Mikkelsen and Christopher Hays wrote in a report.
Fixed-income investors are shifting their holdings to include less risky assets with the International Monetary Fund estimating that the global economy will probably grow 3.3 percent this year, the slowest since 2009. The 12-month trailing U.S. speculative-grade default rate climbed to 3.5 percent on Sept. 30 from 3.2 percent in the second quarter and 2 percent a year earlier, according to Moody’s Investors Service.
The Standard & Poor’s/LSTA U.S. Leveraged Loan 100 Index has climbed 0.33 cent so far this month, to 96.24 cents on the dollar. The measure, which tracks the 100 largest dollar- denominated first-lien leveraged loans, reached 96.37 on Sept. 21, the highest level since Feb. 22, 2011.
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