Bloomberg – For now, the Wall Street crowd is winning: Hedge funds and other institutions using leverage to boost returns have overwhelmed the impact of five consecutive weeks of withdrawals from mutual-fund investors. They’ve helped propel leveraged loans to a 0.58 percent gain in May, their best monthly return since January, according to data from Standard & Poor’s and the Loan Syndications and Trading Association.
“In the leveraged-loan market, strength has returned,” in part because buyers are using more leverage, Barclays Plc (BARC) credit strategists Jeffrey Meli and Bradley Rogoff wrote in a May 16 report. While this will be concerning over the longer term, “we do not expect any downside from this trend in 2014.”
