The lack of liquidity in the fixed-income markets is "without a doubt" the biggest concern Janus Capital Management has about fixed income right now, its chief investment officer of fixed income said Thursday.
"The regulatory environment we're in, the issues that we're facing post '08, are finally coming to fruition in the fixed-income markets. The illiquidity in the markets is a real problem right now," Gibson Smith said in an interview with CNBC's "Power Lunch."
Smith said liquidity is really a gauge of how quickly the firm can exit or enter a position the marketplace.
"Over the last 10 years, we've been able to freely trade $25, $50, $100 million positions in the market but today those positions have shrunk to $1, $2, $3 million on the bid offer," he said.
His comments echoed those of JP Morgan CEO Jamie Dimon and former U.S. Treasury Secretary Larry Summers, who warned that low liquidity was causing wild intraday swings. They also blamed regulations enacted after the financial crisis for the issue.
Meanwhile, fear over Greece's debt crisis is weighing on the fixed income market, causing volatility in interest rates, Smith said.
On Thursday, the Eurogroup meeting of finance ministers ended without any signs of an agreement between the cash-strapped country and its creditors. Greece needs additional aid to prevent it from defaulting on its 1.6 billion euro debt at the end of June.
Smith believes they are working on a way to "kick the can down the road" but said that, at some point, there is going to have to be a conclusion on whether or not Greece will really restructure or default.
In the meantime, "it's in the best interest of markets just to let this go, let it have some time on it, try and work out a better resolution that is acceptable for not just the European union but for overall markets," he said.
—CNBC's Matt Clinch and Everett Rosenfeld contributed to this report.