These are tumultuous times in the junk bond market.
Lucidus, a London–based high-yield credit fund, on Monday said it had liquidated its entire portfolio, following on the heels of decisions by two other high-yield funds, Third Avenue Focused Credit Fund and one at a hedge fund managed by Stone Lion Capital Partners, to suspend redemptions.
Meanwhile, returns on high-yield bonds are on track to be negative for 2015, in no small part because of the ailing energy sector. As of Friday, the Barclays U.S. Corporate High Yield Index was down 3.53 percent for the trailing 12 months, potentially making this the first down year since 2008.
All the action is leaving individual investors wondering what to do with their own high-yield bond exposure, particularly with an anticipated interest rate hike in the offing that could cause its own market reaction.