Charles Royce of the Royce funds comments on bonds in his Q3 letter.

I think the word bubble is much too strong. However, I do think that bonds could be entering a bearish phase because in certain areas of the fixed-income market, we’re seeing too many investors chasing yield or looking for safety. The junk bond market, for example, looks far too risky to me currently, as do certain high-yielding areas of the stock market where people don’t seem aware of the risk they are taking to achieve a desired yield.

In certain places, I do think there’s a scenario where bondholders may begin losing principal, which could create a swing back to equities. However, in the more standard fixed income world, there are institutional needs that are not likely to change.