Private Credit’s Rude Awakening Gives Bond Funds a New Edge

As cracks appear in the world of private credit, investors are rediscovering the virtues of publicly traded debt markets.

Money managers at Pacific Investment Management Co., Janus Henderson Group Plc and Baird Asset Management say retail clients have been receptive to their simple pitch on the merits of bond funds: solid yields, asset-price transparency and no restrictions on pulling money out. For investors worried about getting back the cash they have tied up in slumping private-credit funds, the message has new-found appeal.

Fixed-income funds, which can include government bonds, corporate debt and municipal bonds, have seen big inflows this ...