(Bloomberg) -- U.S. junk-bonds saw a record $7.66 billion fund inflow as investors followed the Federal Reserve, which plans to buy the debt. The increase through April 15 is the third straight weekly gain this month, including the prior peak of $7.1 billion on April 1, according to Refinitiv Lipper.
Risk assets have benefited from stimulus programs enacted to shore up the economy as the fallout from the virus continues to wreak havoc. The extra yield investors demand to own junk bonds instead of Treasuries narrowed to 740 basis points as of Wednesday, according to the Bloomberg Barclays (LON:BARC) U.S. Corporate High-Yield index. Spreads had reached 1,100 basis points on March 23, the widest since the 2008 global financial crisis.
“You can thank the Fed,” said Greg Zappin, a money manager at Penn Mutual Asset Management. “High-yield spreads have tightened about 300 basis points and the market is open to issuance, so I’m not surprised money is flowing in.”
Investment-grade funds saw an inflow for the first time since February, taking in $5.8 billion, the Refinitiv Lipper data show. Leveraged loan funds took in $30 million, the first net gain since January.
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