Is the long-expected high-yield selloff under way?

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The selloff in high-yield bond exchange-traded-funds (ETFs) last week has revived fears that the sector may be headed for a bruising.

As the yields on high-yield bonds have gotten progressively less and less high – even in the face of expectations for interest rates to rise – many analysts have anticipated a selloff in the segment.

Read More Why ETFs may be the biggest bond worry

Last week, high-yield ETFs sold off, with the iShares High Yield ETF shedding 1.6 percent for the week -- a large move for a bond fund -- while the SPDR High-Yield ETF lost 1.7 percent over the same period. The ETFs have been closely watched amid concerns that high-yield bonds, also called junk bonds, have become increasingly sensitive to retail fund flows. Earlier this year, RBS estimated that around 37 percent of U.S. corporate credit is owned by retail investors.

High yield bonds: More volatility ahead
High yield bonds: More volatility ahead   

"High-yield valuations are definitely expensive by traditional metrics, even more expensive than equities despite the rally in equities over last few years," said Raymond Lee at Kapstream Capital, which has around $7.3 billion in fixed-income investments under management.

Read More What Yellen said on junk bonds isn't what the market heard

"A lot of people, in Asia especially, are thinking the spreads are tight," Lee said. "The question is when do you short," he said, noting that many tried to enter that trade last year and lost out, "it's hard to get the timing right on that trade."

It isn't clear if the long-awaited shorting has finally arrived: a net $179 million flowed out of high-yield bond mutual funds and ETFs last week, with the segment seeing a net $25.96 billion head for the exit over the past three months, according to data from Jefferies.

Last week's selloff got a push off the ledge after Richard Fisher, the head of the Dallas Federal Reserve, said that the Fed may start raising rates in the spring of 2015 — earlier than most expected.

Read More Junk bond warning? No way, says BofAML strategist

In particular, Fisher said "We're beginning to see extreme risk taking in the junk bond markets."

He's a known hawk, but the comments were widely passed around the market, and he seems to be getting a bit louder as he gets closer to stepping down next April.

But his comments didn't differ significantly from Fed Chief Janet Yellen's remarks in July as part of her testimony to a Senate committee: "In some sectors, such as lower-rated corporate debt, valuations appear stretched and issuance has been brisk."

Junk bonds signaling cracks in bull market?
Junk bonds signaling cracks in bull market?   

Others aren't certain that the selloff marks a real shift in sentiment. "The market is just wanted to take profit when it can," said Simon Ip, director for fixed income at Credit Agricole.

But he did note that his firm has generally pared down its exposure to the high-yield segment for some of its different portfolios. "The yield spreads are already quite tight [for all bonds," with high-yield only attractive on a relative basis, Ip said. "But you shouldn't be out completely because that's where you earn a bit more yield."

Read More About those forecasts for bonds to drop…

Some don't expect the bond selloff will extend much further, even as the Fed appears set to tighten policy ahead.

In previous years when the Fed tightened – 1994, 1999 and 2004 – the average outflow bottomed at around 10 percent of assets, Deutsche Bank said in a note last week, adding that the selloff since July comes in at around $29 billion, or 4.5 percent of assets.

"To be sure, 10 percent is not a magical line in the sand, and all arguments how this time is different and unprecedented could find their reflection in investor expectations," the bank said. "Historical evidence provides limited support to such heightened expectations however."

Read More Wall Street taking advantage of junk bond exodus

In addition, private equity may ride to the rescue if the selloff worsens, Deutsche Bank said.

"The private equity industry has raised significant amounts of assets with opportunistic credit mandates, which could be deployed rapidly if the market found itself meaningfully dislocated," it said. "This capital is locked in for a number of years, and it is patient in a sense that it does not have to track any given benchmark aside from a goal of delivering positive absolute returns over its full life investment horizon. This makes it a high quality substitute to fickle retail assets or dealer inventories."

—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1