Demand for investment grade corporate bonds may be high, especially from pension funds, but the asset class is not too pricey, said David Prothro, portfolio manager for the Fidelity Corporate Bond Fund. Prothro said supply is abundant, yet credit quality remains healthy because of economic growth. As for high yield, Prothro said he is not worried about a bubble at this time, nevertheless, if rates edge higher then junk bonds will likely be hit early and hard due to the heavy retail presence. Finally, he says the heavy regulatory environment is favorable to bonds issued by banks and other financial companies.

More from Corporate Bonds

December's Climate Forecast: Stormy Winter Markets

December's Climate Forecast: Stormy Winter Markets

Economist Perspective: Supply, Supply, Supply

Economist Perspective: Supply, Supply, Supply

Fed Proposal to Ease 'Stress Tests' Raises Risk for JPMorgan, Goldman

Fed Proposal to Ease 'Stress Tests' Raises Risk for JPMorgan, Goldman

Jobless Rate Likely Held at 49-Year Low in October, Pushing Up Wages

Jobless Rate Likely Held at 49-Year Low in October, Pushing Up Wages

Activist Investing Today: Why Analysts Make Good Directors

Activist Investing Today: Why Analysts Make Good Directors