There has been a marked uptick in purchases of high-yield or junk bonds by retail investors. Junk bonds pay a higher interest rate to compensate investors for the increased risks of default, among other risks. So far this year, retail investors are have put $11.8 billion into junk bond mutual funds, $9.9 billion into investment grade bond funds, and $4.8 billion into stock funds (See Wall Street Journal, “Buyers Take a Shine to ‘Junk'”). Mutual fund managers are also buying more junk bonds to enhance returns.