Junk bonds: 'Perfect storm' or 'relatively healthy'?

With one well-known, high-yield bond mutual fund on the rocks already, this time of the year could be the "perfect storm" for junk bonds and related assets, an expert told CNBC.

"Liquidity is drying up in the secondary bond market," Scott Minerd, global chief investment officer at Guggenheim Partners, told CNBC. "Investors are reading these headlines about Third Avenue and other situations where funds are getting liquidated."

Third Avenue Management surprised investors last week when it announced a liquidation, prompting an investigation by a top security regulator, Reuters reported Monday. But with a number of funds facing losses, Minerd said he's concerned investors will be heading for the exits, especially in CCC-type bonds and oil and gas.

"You think about it, and you think, 'Hey, I've got a small loss in my high-yield fund, maybe I could just take a loss for tax purposes and not have to think about this over the Christmas holiday and come back in January once the storm passes,' " Minerd told CNBC's "Power Lunch."

With bond prices and yields seesawing, investors are looking at a trade-off between capital risk and cash flow, senior analyst William Boggess of Monongahela Capital Management told CNBC.

"When people decide they don't want to own this stuff, who's going to be the last buyer?" Boggess said on "Power Lunch."

A long period of illiquidity in the high-yield bond mutual fund market could lead to a "contagion effect" of defaults, Minerd said, as creditors or borrowers are rationed out of the credit in the market.

"Companies that are operating extremely high leverage ratios and don't have good cash flow coverage are going to be very vulnerable to either running out of cash or, potentially, facing a refinancing risk," Minerd said. "That's why Wednesday's meeting on the Fed is going to be very important."

Part of the problem is that investors looking for yield because of low interest rates had gone in on high-yield funds and risky ventures, said Ken Moraif, financial planner and host of "Money Matters," on CNBC's "Closing Bell." The Federal Reserve will consider raising interest rates on Wednesday.

"A lot of money chasing yields has ballooned this," Moraif said. "It's not just in the high-yield market I'm concerned about. This is a global problem."

Indeed, the problem of liquidity in the junk bond market is nothing new, said Mark Wiedman, global head of the iShares business at BlackRock.

But Wiedman said that the issues faced by Third Avenue was more due to an "extreme distressed debt fund." He even called the broader high-yield market "relatively healthy."

"Not to say there aren't problems in bonds, but it is to say that, actually, we're not seeing it," Wiedman said. "Our high-yield fund is managed with much more liquidity, much higher credit ratings."

Disclosures: Boggess' holdings include PBI, XOM, JNJ, NLY, TRV, CVX, DIS, IIVI, VZ, WEC and BKMU.