There is substantial and sudden downside risk in energy-related high-yield bonds right now.
The bond market's fallen angels are flying high thanks to the comeback in commodity prices.
The Brexit vote has created fear across global capital markets creating a slew of buying opportunities, particularly in assets that were already cheap.
The S&P 500 Index is up 2.6% so far in 2016 with utility stocks leading the way.
High yield bonds have bounced back since mid-February as oil prices have recovered and negative interest rates abroad have pulled foreign funds into the market.
Stocks have not been the only asset class to bounce back since mid-February, high yield bonds have also made a rapid recovery.
Smart-beta funds fall somewhere between index and active management because they are rules-based.
High yield bonds have made a massive comeback in the past month, especially considering the pressure that still remains on the energy issuers.
Investors hunting for better yields amidst rock bottom rates in established markets have caused the amount of emerging market corporate debt in the global market to explode.
Things could get far worse before they get better for high yield bond investors, said Collin Martin, fixed income director at the Schwab Center for Financial Research.