uploads///US Leveraged Loans Flows

Leveraged Loan Funds Saw Inflows after 4 Weeks of Outflows


Nov. 20 2020, Updated 4:02 p.m. ET

CLO deals

According to S&P Capital IQ/LCD, three CLO (collateralized loan obligation) deals worth $1.9 billion were priced last week. In the previous week, one CLO deal worth $354 million was priced. The CLO issuance stands at $28.8 billion YTD (year-to-date).

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Leveraged loan funds saw small outflows last week

According to data from Lipper, leveraged loan funds saw inflows after four consecutive weeks of outflows. The inflows into leveraged loan funds came in at $136.5 million during the week ending July 13. In the previous week, leveraged loan funds saw a small outflow of $17.5 million. Even with the inflows last week, the total net outflows from leveraged loan funds stood at $5.3 billion until July 13, 2016.

In comparison, high-yield bond funds recorded inflows of $4.4 billion, while equity funds recorded outflows of $7.5 billion last week. Equity funds witnessed outflows of $6.1 billion in the previous week.

Senior loans are tracked by mutual funds such as the Oppenheimer Senior Floating Rate Fund – Class A (OOSAX) and the Fidelity Advisor Floating Rate High Income Fund – Class A (FFRAX). Investors can also take exposure in senior loans through ETFs such as the Invesco PowerShares Senior Loan Portfolio (BKLN) and the Highland/iBoxx Senior Loan ETF (SNLN).

Leverage loans issuance rose last week. Realogy Group (RLGY), Arbor Pharmaceuticals, Give and Go Prepared Foods, and Pomeroy Group were some of the leveraged loan issuers last week.

Returns on leveraged loans

Returns on leveraged loans rose in the week ending July 15. The S&P/LSTA U.S. Leveraged Loan 100 Index rose 0.8%. The index is up by 6.8% YTD. Meanwhile, the Oppenheimer Senior Floating Rate Fund – Class A (OOSAX) provides exposure to senior loans. It rose 0.5% week-over-week. OOSAX has risen 3.2% YTD. The Highland/iBoxx Senior Loan ETF (SNLN) also provides exposure to senior loans. It rose by 0.2% last week. It’s up by 2.6% YTD.

For more mutual funds analysis, visit Market Realist’s Mutual Funds page.


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