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"Although it's overdone and we're certainly getting compensated for a little bit more risk here, remember it's an income asset class, not a total-return asset class, you're getting a lot more income than you were two years ago," he said. "But I still think the basic backdrop is people are afraid of rising rates."
Hayes said that outside of attention-grabbing muni headlines about such troubled areas as Puerto Rico, things weren't as bad as most investors might believe.
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"Even Puerto Rico, with $70 billion in debt, is really just a small fraction of a $3.7 trillion market," he said. "In the broader market, the vast majority is in much better shape today than it was in 2008. If you look at state revenues, even local governments doing better, simply because housing is improving. That's what you really have to focus on to find value in the market."
Hayes also said that he saw a sign from the Federal Reserve.
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"I think that what the Fed is telling us is that at this juncture, it's OK to move out the yield curve a little bit," he said. "We've seen what I would call phase one of great rotation, not necessarily from fixed income to equities but from long-duration fixed income to short-duration fixed income."
—By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.