Financial Professionals

Insights

Making Sense of Today’s Bank Loan Market

07/22/2014

From June 2012 until mid-April 2014, bank loan funds experienced an unprecedented 96 straight weeks of inflows – and for good reason. Fundamentally, the macro economy is slowly healing and loan defaults are low, which is a favorable environment for riskier fixed income assets. In addition, the potential for interest rates to rise from artificially low levels has been a real concern since the Fed’s “taper talk” last May. In this environment, the sector performed as expected, recording a positive total return alongside high yield corporate bonds, while other major fixed income markets finished in the red for 2013. As of late June 2014, bank loan funds had posted $5.9 billion in outflows over 11 of the last 12 weeks, even though credit fundamentals for the sector remain healthy. What is behind the shift in sentiment?

To make sense of the bank loan market, Frank Ossino, sector head of the bank loan asset class at Newfleet Asset Management shares his insights on recent market developments and their implications for investors in a recent interview.

Read the bank loan market Q&A with Frank.

Past performance is not a guarantee of future results.

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