By Ashish Shah
Chasing returns into-and out of-specific credit sectors happens so often in bond markets that it hardly rates a raised eyebrow. But running with the herd can be risky, which is probably why Federal Reserve officials reportedly have discussed slapping exit fees on bond funds to avoid a disorderly rush to the exit.
We think it's better to step away from the crowd and focus on opportunities across sectors. That can help investors avoid overheated sectors, find bargains and reduce the risk of getting trapped when everyone else heads for the door.
Based on market flows, attitudes toward particular credit assets lately seem a lot like a teenage crush: completely smitten one day and old news the next. Emerging-market mutual funds are a good example. They hauled in $39 billion in flows during 2012, according to EPFR Global, and then lost nearly all of it over the