Leveraged Loans

Leveraged loan fund withdrawals deepen to $1.94B as outflow streak hits 20 weeks

By Richard Kellerhals
March 24, 2023

With the banking crisis keeping markets on edge, investors pulled $1.94 billion from US leveraged loan funds for the week ended March 22, according to Morningstar. This is the largest weekly outflow since last June and is the twentieth consecutive week in the red, with $13.58 billion exiting the asset class over that span. The year-to-date net outflow rose this week, to $7.43 billion, from $5.49 billion last week. That is approaching the $9.2 billion outflow that was recorded in all of 2022. It wasn't that long ago when the asset class posted a total net inflow of $34.9 billion, in 2021.

This week’s outflow was once again driven by mutual funds, which recorded an exit of $1.57 billion, while ETFs lost another $374 million.

With another heavy loss, the four-week trailing average widened to $1.06 billion, from $753.9 million last week and from $522.5 million two weeks ago.

As of March 22, total net assets at loan funds shrank to $67.8 billion, from $69.8 billion last week, split between $55.9 billion in mutual funds and $11.9 billion in ETFs.

Featured image by Golden Dayz / Shutterstock

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