US mutual funds' liquidity risk on the rise – Boston Fed paper
Ratio of illiquid assets to net assets increased from 2009 to 2019, researchers find
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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