Mutual funds are responsible for short-term volatility in the debt markets, according to a report published by Fitch Ratings, Financial News reports. European insurers hold around twice as much private debt, but mutual funds are more active in the markets, said Aymeric Poizot, senior director and head of Fitch’s EMEA fund and asset manager team. Mutual funds played a significant part in the high-yield debt market, attracting up to €5 billion in new capital in 2010, equal to between 25% and 30% of issuance. About 800 funds, focusing on investment grade and high-yield debt, account for nearly €300 billion.

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