Investors exit retail loan funds in July

Investors in leveraged loans have been pulling money from retail funds in recent weeks, with redemptions outpacing investments by $253.3b in the week ending July 24. The Invesco Senior Loan ETF (BKLN) recorded July outflows of $384.6b, in a reversal from the inflows seen over the prior three months.

After beginning the year at an average price of 96.93, secondary market loan pricing declined to 94.60 on March 3 before rebounding to 95.72 by May 14, and as of July 29, slid back down to 95.09 according to the Bloomberg US Leveraged Loan Index. Despite recent volatility, the index has delivered a year-to-date total return of 2.08%.