Investors caution junk bonds won't repeat stellar returns

High-yield bonds posted stellar returns in 2012, but it would take a leap of faith for them to repeat that this year.

The slew of Asian high-yield paper sold during the first few weeks of 2013 suggests investors are on a junk bond binge.

With bank deposits paying almost nothing, investors are searching for better returns and junk bonds fit the description. Unfortunately, the enthusiasm brings to mind some of the irrational exuberance witnessed back in 2000, when investors piled into dotcom stocks.

According to Dealogic, Asian high-yield borrowers have raised $6 billion so far in 2013, a record start to the year. This is a remarkable sum for just three weeks of business, representing nearly 40% of the $15.3 billion raised from Asia ex-Japan during the whole of...

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