Record $6.5 Billion Outflow in Leveraged-Loan Funds

Investors withdrew a record $25.71 billion from global bond funds in the week leading up to April 9, marking the largest weekly outflow in over five years due to fears of a recession and the escalating U.S.-China trade war, which could lead to inflation. U.S. bond funds saw significant withdrawals of $15.64 billion, with leveraged-loan funds experiencing their biggest-ever weekly outflow of $6.5 billion as investors shunned high-risk U.S. corporate debt. Concurrently, U.S. equity funds attracted $6.44 billion, reversing the previous week's trend of net sales, likely influenced by a 'buy the dip' mentality amid falling equity prices. The trade conflict has led to increased tariffs, with the U.S. imposing a 145% tariff on Chinese imports and China retaliating with a 125% tariff on U.S. imports, exacerbating market volatility. Despite this, U.S. short-to-intermediate government and Treasury funds saw an inflow of $8.89 billion, indicating a shift towards safer investments. Additionally, global equity funds also faced significant outflows of $10.7 billion as market conditions remained unstable.