A red-hot run for bank-loan funds is losing steam.
Investors poured tens of billions of dollars into the funds in the last year, betting that the floating-rate debt would help them weather the coming wave of interest-rate increases by the U.S. Federal Reserve.
Now, concerns that Russia’s invasion of Ukraine and rising energy prices could slow the U.S. economy have led some investors to question whether the Fed will raise interest rates as aggressively as expected just a few weeks ago. That, in turn, has sapped interest in the funds, which had net inflows of $15.1 million in the week ending March 9, down from $179.1 million a week earlier and a record $2.29 billion the week of Feb. 9, Refinitiv Lipper said.
The pace of new money into bank-loan funds has slowed for four straight weeks, according to Refinitiv.
“Everyone is rethinking the amount of…
