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Paul Reed, who is also head of European high yield at Aberdeen Asset Management, said investors had stuck with the portfolio during the market fall due to a "search for yield".

He said: "Our fund always had inflows. The dividend has risen quite rapidly, which has benefited existing investors."

He said he was puzzled by fund groups' focus on investment-grade corporate bond funds at the beginning of the year, rather than high yield, where spreads over government bonds peaked at 2,200 basis points.

Many asset managers were cautious on the asset class after the rupture in the banking system made it unclear how many companies would remain solvent.

"I don't know why they were telling people to be so cautious," he said. "Ratings agencies have been totally wrong about high-yield defaults."

Much of investors' new exposure to high yield has come through the Sterling Strategic Bond sector, which has seen substantial inflows this year.

Funds such as F&C's Extra Income Bond and Strategic Bond portfolios have benefited from a high exposure to the asset class as portfolios in the Sterling High Yield sector rallied 34.9 per cent over the year to November 9.

Investors in euro-denominated high-yield funds such as Mr Reed's have benefited in particular from the strengthening of the euro against sterling.

The Aberdeen fund's benchmark, the Merrill Lynch Euro High-Yield Constrained index, rose 64.4 per cent in the first three quarters of this year after dropping 34.9 per cent in 2008.

The fund itself proved even more volatile, losing 53.4 per cent in 2008, but recovering 98.3 per cent in the first three quarters of this year.

According to Financial Express, the fund has now clawed back its losses, posting a 15.8 per cent gain from the start of 2008 until November 24.

Mr Reed said the fund had seen only a few defaults "at the scrappy end of the portfolio" and a number of successful restructurings.

The latter included Akerys, a company which issued equity for free alongside new bonds. The Euro High-Yield Bond portfolio can hold as much as 10 per cent in such equity opportunities.

With regards to the wider market, Mr Reed said long-only funds had pushed up prices, as much of the trading volume from hedge funds had not yet returned.

For the new year, Mr Reed's outlook was cautiously optimistic.

"There's still scope for spreads to come in a little bit," he said.

Although he did not see inflation as a "big worry" over the next five years, he said he had a third of his portfolio in floating rate notes.