High-Yield Funds Seek to Create Distance From Third Avenue
- Firms say they aren't relying on distressed credit strategies
- Western Asset says redemption requests are at normal levels
Junk Bonds Yield Fears of Market Excesses
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High-yield mutual fund firms are seeking to distance themselves from last week’s freezing of Third Avenue Management’s credit fund, saying their investments are more diversified and easier to sell.
Western Asset Management said today that redemption requests from high-yield investors aren’t bigger than normal. Fidelity Investments and Capital Group Cos. said Monday that their high-income strategies don’t make them distressed credit funds like Third Avenue’s and their holdings of CCC bonds are either selectively positioned or weighted toward better-quality debt within that tier. Toews Corp. said its junk-bond fund moved completely into cash last month.