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"A Stumble for 'Bank Loan' Mutual Funds" Writes Wall Street Journal. Bank loan funds, which have often been marketed as higher-yielding alternatives to money market funds, have lost 1.43% in the past month and investors have started pulling money from them reports today's Wall Street Journal. "While that decline may seem relatively slight, it contrasts with the stability the funds, which sometimes get compared with ultrasafe money-market funds, have offered in the past several years," says the article. It cites Financial Research Corp. data estimating the bank loan fund sector to be $42.8 billion in June. Bank loan funds, stable value funds, and ultra-short bond funds attempt to offer higher returns than money funds, but they lack the regulatory quality, maturity and diversity mandates, and lower expense ratios, of money funds and often end up reaching too far for yield.
