Warning signs are flashing for junk-bond investors

Published May 15, 2014 8:08pm ET



NEW YORK (AP) — Junk bonds have been strong investments since the recession, and investors continue to pile into the market. But fund managers say they’re looking less attractive. Many are taking a step back and urging investors at least to temper their expectations.

The big run for junk bonds came as investors clamored for better interest rates. The Federal Reserve has helped keep interest rates low, which gives the economy a boost but also limits the interest income generated by bonds. To make up for that, investors have turned to bonds from companies with lower credit ratings that carry a higher risk of default.

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