Market liquidity reflects the ease with which an asset or investment can be converted to cash. Liquidity depends on a host of factors, including the number of market participants, the asset prices at which buyers and sellers are willing to meet, and the ease of evaluating asset prices.
According to the Credit Suisse Leveraged Loan Index, the senior loan market has experienced tremendous growth and has evolved into a large and robust capital market with a wide breadth of participants. And although loans have relatively long settlement times, mutual fund managers have several different liquidity sources at their disposal to help satisfy redemption requests.
Mutual funds are subject to market risk and volatility. Shares may gain or lose value. Senior loans are typically lower-rated and may be illiquid investments (which may not have a ready market). Senior loans are subject to credit, interest rate, prepayment and liquidity risks. Diversification does not guarantee profit or protect against loss.
These views represent the opinions of the portfolio manager at OppenheimerFunds, Inc. and are not intended as investment advice or to predict or depict the performance of any investment. These views are as of the publication date, and are subject to change based on subsequent developments.