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Demand for loan ETFs ‘skyrockets’ as inflation worries intensify

Niche sector’s assets almost double in six months

Demand for exchange traded funds investing in senior loans has rocketed this year as investors hunt for respite from rising inflation.

A net $7.3bn has been pumped into the sector so far this year, according to CFRA Research, almost doubling its asset base to $16bn.

The trend is linked to rising inflation and interest rate expectations in the US and elsewhere, leading investors to favour floating-rate loans over fixed-rate bonds.

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