In 2012, investors have been pouring money into high-yield funds.
But a proper rescheduling would be better than the current situation, where as much as a quarter of trading in emerging-market bonds is accounted for by opportunistic high-yield funds, betting on a pay-out in the courts.
Two high-yield bond funds Appel is still holding: Northeast Investors Trust ( NTHEX) and Federated High-Yield Trust ( FHYTX) .
Guggenheim Investments filled that gap with its BulletShares ETFs, a menu of investment-grade and high-yield corporate-bond funds.
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When they are deeply below net-asset value, as high-yield bond funds are now, they can be very good buys.
The downgrades caused institutions, mostly high-yield muni funds, to flee the sector.
Another bull on high-yield bond funds is Jack Bowers of Fidelity Monitor, who is recommending Fidelity Strategic Income (nasdaq: FSICX - news - people ), which has 40% in high-yield debt, tempered by 60% in foreign and U.S. investment grade and government issues.
Typically mutual funds is where we are looking at quite substantially right now for really one reason, and those tend to trend better with a lot less risk, so you know you can have market-like rate of return on high-yield-bond mutual funds with historically a third of the downside risk of the markets.
High yield bond funds like Janus High-Yield (JAHYX) or Fidelity High Income (SPHIX) have consistently performed better than high yield ETFs like SPDR Barclays Capital High Yield ( JNK) and iShares iBoxx High Yield ( HYG) and with less volatility.
The new tax is even more reason to move income-generating investments such as high-yield bonds or high-turnover mutual funds into tax-sheltered accounts such as IRAs, says Eric Lewis, a principal at Bedrock Capital Management, a financial-planning firm in Los Altos, Calif.
To that extent, high-yield closed-end funds today are trading at a premium.
Instead, these investments would rely more heavily on active management--things like emerging market equity and debt funds, domestic high-yield bonds, small cap equities, real estate and private equity.
In addition to single strategy hedge funds that may invest in Japanese equities or high-yield bonds of technology stocks, there are even funds whose sole purpose is to invest in other funds.
Treasury, corporate, municipal, high-yield and foreign bonds (and bond funds) can all play a role in your portfolio.
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Herzfeld Advisors purchased high-yield and loan participation closed-end funds at discounts of more than 30.0%, because the prices hit rock-bottom during intraday trading, said Gondor.
My bond recommendations in 2012 ranged from high-yield to pipelines, refineries, autos and bond funds, all short duration.
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Investors should be particularly careful if they own funds that have trumped the high-yield benchmarks, says Morningstar analyst Sarah Bush.
Since longer-maturity bonds offers higher yield in the current market, this kind of debt is mostly purchased by mutual funds, which want to offer a high-yield product to investors.
Even worse for investors: Some funds haven't come close to matching high-yield bond indexes.
This makes High Yield a way for low-budget investors to invest alongside private equity and hedge funds without the usual rapacious fees of those categories.
While exciting and encouraging interest from funds interested in high yield returns also indicates that the promise of female-driven (and female-facing) businesses is being acknowledged.
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In order of popularity, respondents said they owned high-quality corporate, high-yield, international (including emerging market), Treasury (including TIPS) and municipal bonds and bond funds.
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