Vanguard to JPMorgan Dodge Neediest Borrowers

Investors from Vanguard to JPMorgan are shunning bonds from the neediest borrowers as a slowing economy sends the default rate for companies that ratings firms deem to be in “poor standing” to the highest level since 2009.

Vanguard’s $18.4 billion fund that buys junk bonds is “incrementally taking down risk on a credit-by-credit basis,” said Dan Newhall, principal at the firm. JPMorgan Asset Management has been reducing debt from firms more affected by lower consumer spending and has “dramatically” cut holdings of bonds ranked CCC since 2009, said Bill Morgan, a high-yield fund manager.

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