Investors fled US funds that hold riskier bonds and loans at a historic pace over the past week as fears that President Donald Trump’s tariffs will deal a heavy blow to the economy ricocheted across asset markets.
Investors yanked $9.6bn from US high-yield bond funds and $6.5bn from leveraged loan funds in the week to Wednesday, according to data provider LSEG Lipper. Both figures represent record outflows, according to JPMorgan data.
The big shift out of the junk bonds and risky loans comes after Trump’s announcement on April 2 of huge tariffs on many trading partners ignited a broad rush by investors into cash as they fret about risks to the economy. Riskier debt is exposed to economic ructions since borrowers are typically in a tougher financial position than those in high-grade markets.