On the face of it, these findings imply that high yield bond funds should concentrate their holdings in fallen angels.
Almost all the media coverage has the following chart, or similar stats regarding the inflows into high yield bond funds.
If you believe the U.S. economic recovery remains on track, high yield bond funds and ETFs may be good vehicles for acting on your conviction.
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.
Two high-yield bond funds Appel is still holding: Northeast Investors Trust ( NTHEX) and Federated High-Yield Trust ( FHYTX) .
When they are deeply below net-asset value, as high-yield bond funds are now, they can be very good buys.
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.
Guggenheim Investments filled that gap with its BulletShares ETFs, a menu of investment-grade and high-yield corporate-bond funds.
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Also under sever pressure are those high yield corporate bonds and bond funds that are becoming increasingly oversold in bull market territory.
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.
My bond recommendations in 2012 ranged from high-yield to pipelines, refineries, autos and bond funds, all short duration.
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Treasury, corporate, municipal, high-yield and foreign bonds (and bond funds) can all play a role in your portfolio.
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Even worse for investors: Some funds haven't come close to matching high-yield bond indexes.
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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