- With rising interest rates hurting stock and bond prices, there's one asset that's outperforming almost every asset class this month--corporate loans, especially leveraged loans.
- Leveraged loans have increased to $1.2T this year, exceeding the amount of outstanding junk bonds for the first time, the Wall Street Journal reports.
- Leveraged loans made to companies with less than investment-grade ratings (or junk) have increased among investors because they pay relatively high interest that moves with benchmark interest rates, thus insulating loans from rate increases by the Fed.
- Stocks and bonds, meanwhile, have been pulled down by concern over interest rates this week.
- Though Treasury inflation-protected securities usually rise in value with interest rates, they have actually declined this year because there's been little change in inflation expectations even as the Fed raises rates.
- ETFs: OXLC, BKLN, ECC, PPR, EFR, BGB, VVR, NSL, BGX, PHD, TSLF, BSL, SRLN, AFT, SNLN, FCT, EVF, FTSL, TLI, BHL