It is somewhat of an odd time to roll out a new junk bond fund. The category has experienced outflows of late, despite the relative, recent success of other fixed income products. On Monday, The Wall Street Journal reported that the average return for the 354 junk bond funds in the market was 9.3% over the last year.
Still, the new fund sold 12 million shares of the new fund for $171.9 million during the initial offering period. Merrills Corporate High Yield Fund I and II have assets of $272.8 and $96.3 million and one year market returns of negative 4% and negative 13.9%, respectively.
Vincent Lathbury and Elizabeth Phillips, co-portfolio mangers of Merrills other junk bond funds, will manage the new offering.
