Leveraged Loans Need to Reshape Their Pitch as Individuals Flee
The Marriner S. Eccles Federal Reserve building at sunrise in Washington, D.C.
Photographer: Andrew HarrerThis article is for subscribers only.
You’d think leveraged loans might regain some of their allure as the Federal Reserve prepares to raise borrowing costs since they have interest rates that track benchmarks. Instead, individuals can’t stop hating the debt.
Mutual funds that buy loans saw $4 billion yanked last month, bringing total outflows for the 12 months ended Jan. 31 $28.7 billion, according to Morningstar Inc. data. That’s the biggest withdrawal for any U.S. debt asset class in the period.