Simon Gibson, director at Atkinson Bolton, said high yield bonds were one of the sectors he was increasing exposure to since corporates "have more money than governments" and have low default rates.
He estimated that high yield bonds had been sold off between 10-15% too far and that fundamentals did not warrant such an exodus.
Fatima Luis, who runs the £224m F&C Strategic Bond fund, agreed with Gibson’s stance.
She said despite the prospect of short term volatility, high yield remains an attractive asset class due to the exceptionally strong balance sheets of many issuers.
Luis currently has her fund, which can invest across the credit spectrum, positioned with a 42% exposure to high yield.
"While fears over government indebtedness have cast a shadow over risk assets generally, recent earnings announcements for high yield issuers have actually been encouraging. Most measures of credit quality have improved. Leverage has come down and cash to debt measures are near historical highs.
"We think default rates may rise again moderately over the next few years, but remain well below the historical average of 4.7%, with Moody’s base line forecast being below 3%," Luis added.
Investors should keep in mind that all high yield issuers are not alike and the risk of defaulting is heavily skewed to the lowest grade, CCC, where the average default rate is 13.7%.
On the other end of the spectrum, BB rated entities have an average default rate of 0.73%, according to Moodys.
With that in mind, Luis concluded: "Naturally, being invested in a portfolio where the average rating is BB is not a bad place to be given the levels of income on offer."
Another fan of high yield bonds is Tom Becket, manager of PSigma Balanced Managed fund of funds (soon to be renamed the PSigma Dynamic Multi-asset fund).
Becket said he thinks investors can make equity style returns but with much lower volatility by buying high yield bonds at their current valuations.
He said while the consumer and central banks have taken on more debt, companies have deleveraged and he is more confident of their ability to pay back debt over their ability to make profits in the next 12 months.
For that reason, he would rahter be a lender to companies than an owner of companies.
His favoured way to gain exposure to high yield bonds is through the AXA US Short Duration High Yield fund, where he has 6.4% of his portfolio.
Becket said the fund is simply the best in the sector and he will be looking to increase his position over the coming months.
