Propelled by yields that have been at 18-year highs for the past nine months, high-yield bond funds rose 23% in the first half of the year.
But managers of the funds dont think those returns can be sustained. Theres been a huge rally in high yield, with everyone repricing out the depression scenario, said Fred Hoff, manager of the Fidelity High Income Fund, which rose 26% in the first half of the year. I dont think were going to double that return this year, though [it] should be very nice, he told The Wall Street Journal.
Last year, high-yield funds experienced outflows every month, but through May, they took in inflows every month, including $4 billion in April and $3.3 billion in May.
But those investors might be too late, fund managers say. Anybody with outsized expectations is likely to be disappointed, said Jeff Tjornehoj, a senior research analyst at