If Investors Bail, Will Your Bond Fund Flail?

The article examines the potential losses for investors in high-yield or junk bond mutual funds should investors pull money out of stock markets in the event of an increase in interest rates. It discusses a report conducted by researchers at financial services firm Barclays that estimated a 12 percent loss in bond market funds if the junk-bond market declined by 10 percent and mutual fund investors requested a return of 20 percent of their funds. The article presents comments from Barclays head of research Jeffrey Meli.