With junk bond funds comes inherent risk, but lately it's been like hopscotching in a minefield. Not many fund managers have done it successfully. The current 10.12% default rate on a trailing 12-month basis, after falling from a 10.8% peak in January, still looks grim compared with the historical average of 3.8%. Junk mutual funds lost 2.8% on average last year and 7.94% in the first nine months of 2002, according to Morn-ingstar. Little surprise, then, that investors have yanked $2.2 billion from junk funds since the second week of June, spooked by huge bankruptcy filings like those of Adelphia Communications, Global Crossing and WorldCom.
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