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FPA Fund Manager Says High Yield Not Worth the Risk


High yield bondholders are not being adequately compensated for the risk they are taking, said Tom Atteberry, portfolio manager for the FPA New Income Fund. Atteberry said junk bonds yielded over 10% five years ago but now pay a paltry 6%. He added that money has been coming out of high yield and flowing into stocks, helping to push up equity prices. Atteberry also said market forces, and not Fed Chair Janet Yellen, will push the yield on the 10 year Treasury Note above 3% by the end of 2014. Atteberry said Yellen will not raise rates until next year, putting her proverbially behind the curve.