NEW YORK (TheStreet) -- Emerging-market bonds traditionally run into trouble when the Federal Reserve raises interest rates, but John Bellows, portfolio manager for Western Asset Management, doesn't think that investors should flee the space despite the historical precedent.

"The yield advantage is significant with Mexico bonds at 6%, Indian bonds at 8% or Brazil at 12%. That's a significant yield advantage that will add value, and the fundamentals in emerging markets are starting to look a bit better," Bellows said.

"The People's Bank of China has been easing aggressively. They're supporting their economy," Bellows said.

"The balance in oil prices helps," he said. "And you've also seen meaningful structural reforms in places like India and Mexico."

As to when the Fed takes action, Bellows thinks that Fed Chair Janet Yellen and her crew will make their first move in September, provided that the economic data continue to show progress.

The market, however, is pricing in a December hike, in his view.

"We agree the increase in interest rates will be slow and gradual but perhaps not as slow and gradual as the market expects," Bellows said. "I think that makes the front end of the yield curve somewhat vulnerable, and so as a result, we prefer the back end of the yield curve."

Bellows also likes high-yield bonds in a growing economy, despite a growing belief that they are getting pricey.

"Look, when the Federal Reserve hikes interest rates, they are not going to want to disrupt the economy. They're not meant to disrupt financial markets," Bellows said.

"And if we're right about that, then we think high yield can continue to perform well, [and] investors continue to earn that extra return, he said.


Finally, if there is one risk lurking in the fixed-income world, Bellows said that it is a sharp inflationary turn.

Still, he doesn't expect to be surprised by an inflation uptick any time soon because of the long-term secular trend against it.

"Sure it's a risk, but we think there's long-term secular headwinds for inflation and reasons why inflation remains low," Bellows said. "And so going forward, we think inflation is likely to remain at these low levels with risk to the downside, not the upside."