Reuters reports money managers and hedge funds have discovered a newfound love for junk. Legg Mason, First Eagle and Armored Wolf are among institutional investors launching new high-yield "junk" bond funds this month, taking advantage of the surge in investor appetite for risk-taking and yield.
At least seven other firms have launched high-yield funds in the past four months, including Alliance Bernstein, Brookfield and Allianz, according to Lipper data. The wave of new junk debt portfolios stems from technical and fundamental factors, including reduced investor fear of the U.S. economy plunging into a double-dip recession.
In the past six months through January, high-yield funds, excluding ETFs, had inflows of $8.8 billion, while General U.S. Treasury funds had inflows of just $400 million, according to Lipper. The junk-bond market's returns have also been a huge attraction for investors…..
Read more at http://www.reuters.com/article/2012/02/06/funds-investing-junk-idUSL2E8D32KO20120206
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