Bryn Jones, head of fixed income at Rathbones Unit Trust management, is avoiding high yield bonds as volatility rises.
Mr Jones runs the £1.1bn Rathbones Ethical Bond fund, and the £161m Rathbones Strategic Bond fund.
High yield bonds have a credit rating lower than BBB+ and so are likely to be those most sensitive to movements in interest rates and the economic outlook.
Mr Jones said: "I don’t think high yield bonds are particularly good value right now. The market is in a place where liquidity is limited and so it is very vulnerable to a shock, in a shock liquidity could dry up. And I don’t think investors are being paid to take the extra risk that comes with those bonds."
Instead he is focused on bonds that have a credit rating of investment grade, which are those with a credit rating of BBB or higher.
He said: "I think the investment grade part of the market is where the value is, and financials are a particularly interesting.
"If I were an equity investor I wouldn’t be that keen on bank bonds, as banks make more profit when interest rates rise, as they can charge more, now interest rates are not rising, but financial companies are making comfortably enough revenue with interest rates at the current level to pay bond holders."
James Foster, who runs the £1.4bn Artemis Strategic Bond fund, is another investor wary of high yield bonds in the current climate.
In an update to shareholders in his fund last week he wrote: "The high-yield market has benefited from the strength of equity markets this year and from higher oil prices. Defaults are also at record lows and this looks set to continue as lower rates prolong the economic cycle.
"The real danger in this asset class is liquidity. The leveraged loan market has taken up the slack in the last few years. But with interest rates not set to increase in the short term, the demand from the floating-rate loans market could subside.
"This could put pressure on the high-yield market, especially if some companies find themselves demoted into high-yield indices from the investment-grade market."
Mr Foster is reacting to the cautious economic outlook by investing in government bonds, which make up 30 per cent of his investments.
He said: "With the global economy seemingly sliding into an era of slower growth, government bonds have been the primary safe haven. Moreover, inflation is not being pushed higher, despite wage inflation having increased a little.
"It is for this reason that we have increased the fund’s duration, increasing its weighting to government bonds: 16 per cent of the fund is now invested in US Treasuries and 14 per cent in gilts.
"However, investing in German Bunds with a negative yield is distinctly unpalatable. We expect US government bonds to continue to rally as the economy weakens, despite having had a good run so far this year."