In Thursday's Wall Street Journal Fund Track column, Sam Mamudi explored how how the dearth of liquidity in the credit markets has affected bond fund managers. Several managers told Mamudi that broker inventories are close to zero and trade requests can take days to fill. Also, in the absence of bonds trading below par, some managers have been forced to purchase new issues.

"I've never seen a fixed-income market the way this one is," Gus Sauter, Vanguard's chief investment officer, told Mamudi.

Bob Persons, co-manager of MFS Bond Fund, said last December was the worst December he has ever witnessed. "Bonds were being marked down and no one wanted to sell."

Tom Murphy, who co-manages the RiverSource Diversified Bond Fund, noted that the "sell-side is getting smaller, but the buy-side isn't." 

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