US funds’ holdings of illiquid assets rise, fueling concerns about fire sales in a crisis

10 September 2019 11:04pm
US mutual funds have sharply increased holdings of illiquid assets such as derivatives over the last decade, buttressing concerns that funds might sell assets at fire-sale prices if investors stampede in a crisis, a US Federal Reserve study said.

“Rising hard-to-value, illiquid holdings amid generally stable liquid holdings might indicate rising liquidity risks,” the recent study said.