A good article above by Barron's last weekend.
Can you believe that many high income bond funds are trading 20% to 70% above the NAV? 66% of taxable bond funds and 73% of municipal-bond funds trade above NAV now versus roughly 30% both a year ago and in 2006.
Investor sentiment could shift, sending shares
tumbling. Any hint of rising interest rates would be a concern, as would
expectations that the gap between short- and long-term rates might
narrow. That would hurt funds relying on short-term borrowing to buy
long-term assets.
