BOSTON -- U.S. bond fund managers who have a large chunk of their portfolios invested in stocks say those holdings could give them an extra edge in a debt market selloff.

Some portfolio managers said they are prepared to unwind large stock positions to take advantage of any turbulence in the bond market when the Federal Reserve lifts interest rates. The idea is to use the proceeds from stock sales to scoop up discounted bonds.

While it is unclear when a rate increase will happen, trading stocks will be easier than moving bonds because of the fixed income market's worsening liquidity bottleneck.

"The challenge today is that when (bond) credit spreads widen, they do so quickly," said Henry Peabody, who helps run the $1.9 billion Eaton Vance Bond Fund. "You have to be ready to jump on it."

But it has become harder than ever to buy and sell corporate bonds in the secondary market as new regulations and capital requirements since the financial crisis forced Wall Street banks to slash their inventories. That has left a vacuum in matching buyers and sellers, and bond managers say they do not want to get caught holding too much should a rout occur.

Meanwhile, some multi-sector and junk bond funds have taken advantage of asset allocation rules that permit as much as 35 percent of their holdings in stocks.

"If rates rise, we expect some displacement in the bond market," Peabody said. "We'll look at unwinding some of that equity position to find some of the cheaper bond credits out there."

The Eaton Vance fund had about 18 percent of its portfolio invested in equities on March 31. Peabody said he could see that dropping to as low as 5 percent.

To be sure, bond fund managers have been boosting the liquidity in their portfolios by buying easier-to-trade U.S. Treasuries and the currencies of Australia, Canada and New Zealand, for example.

"Stocks have a role as liquidity in our portfolio," said Matt Eagan, a portfolio manager at the $19 billion Loomis Sayles Strategic Income Fund, which had about 22 percent of its assets in equities at the end of April.