US mutual funds' liquidity risk on the rise – Boston Fed paper

Funds analysis and research

The 10 largest US mutual funds investing in leveraged loans have substantially increased their liquidity transformation risk over the past decade, a paper published by the Federal Reserve Bank of Boston finds.

Kenechukwu Anadu and Fang Cai examine the balance sheets of the 10 largest bank loan mutual funds (BLMFs) – funds that purchase leveraged loans – from 2009 to March 2019 to access their liquidity transformation risk. Similarly, they look at the risk profiles of mutual funds investing in

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