Some investors worried about rising interest rates and frothy conditions in high-yield corporate bonds have been favoring bank loan ETFs as an alternative.
Investors poured $1.4 billion into U.S. loan funds in the latest week, the second-largest inflow following the record $1.5 billion of deposits during the second week of February, Bloomberg News reports. U.S. loan fund assets under management have increased by 18.6%, or $14 billion, this year.
“Financial tastemakers have crowned leveraged loans the ‘it’ income asset class throughout 2013,” reports Michael Aneiro at Barron’s. “Loan funds have been soaking up attention and inflows all year as investors seek them out for their combination of current income and floating rates, which will come in handy whenever rates start rising for real.”
PowerShares Senior Loan Portfolio
