US junk loan funds suffered their biggest outflows since early 2020 during the recent plunge in global financial markets, as investors fretted about the impact of a potential economic slowdown on highly indebted companies.
Investors pulled $2.5bn out of funds that invest in junk, or leveraged, loans during the week to August 7, according to data from flow tracker EPFR, with the withdrawals concentrated in exchange traded funds.
The outflows come after weaker-than-expected US jobs data at the start of August reawakened fears of a US recession, which would be likely to hurt lower-quality borrowers.
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