Investors really like bank loan mutual funds and ETFs. Retail cash inflows into the high-yielding products totaled $1.03 billion for the week ended May 8, Leveraged Loan reported, citing Lipper data.
Of that $1.03 billion, $216 million went to ETFs marking the second largest weekly ETF inflow on record, but still below the $354 million seen two weeks ago, Leverage Loan reported.
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Investors have gone far and wide in search of yield and that has been supportive of bank loan ETFs. The PowerShares Senior Loan Portfolio (NYSE:BKLN), the giant among senior loan ETFs, has a 30-day SEC yield of 3.77 percent. In the week that ended May 9, BKLN raked in $181.44 million in assets, according to PowerShares data.
Here is how powerful of the allure of bank loan ETFs and their yields are to investors. PowerShares is the fourth-largest U.S. ETF sponsor with over 70 funds. Over the past 90 days, this year and over the past year, no PowerShares ETF has attracted more assets than BKLN.
However, BKLN has some rivals and like BKLN, those ETFs are growing as well. Benzinga reported on the bank loan ETF craze just a week ago. At the time, the Highland iBoxx Senior Loan ETF (NYSE:SNLN) had $72.8 million in assets under management. That number is up $75.2 million, according to issuer data. Not bad for an ETF that debuted in November.
Then there is the newly minted SPDR Blackstone / GSO Senior Loan ETF (NYSE:SRLN), the first actively managed senior loan ETF. SRLN gained $8 million in assets in the past week. In just five weeks of trading, SRLN has $168.3 million in AUM.
Those statistics would seem to imply there is not much for more competition in this corner of the ETF arena. Not true. The First Trust Senior Loan Fund (NASDAQ:FTSL), another actively managed fund, debuted last week and already has almost $25 million in AUM.
Doubters of the ability of these ETFs to keep attracting inflows should consider this: Inflows to bank loan funds (mutual funds and ETFs), have been positive for 47 straight weeks, according to Leveraged Loan.
For more on bank loan ETFs, click here.
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