High yield, high-risk debt is likely to return 13.6 percent in 2012 as corporate balance sheets are in "pristine shape" and defaults stay low, according to a report by New York-based Morgan Stanley.
The jobless rate in the U.S. fell to 8.6 percent in November, the lowest since March 2009. Car sales for the month were the best since August 2009.
Eigen said he will continue to avoid Treasuries because they are yielding less than the rate of inflation. The yield on the five-year U.S. Treasury note is below 1 percent, according to data compiled Bloomberg. Consumer prices rose 3.5 percent in the 12 months ended Oct. 31.
"I would own Treasuries if I were getting paid to own them," Eigen said. "At these levels it makes no sense." The fund currently has a "slight" short position in Treasuries, he said.
Eigen, 43, spent 12 years as a bond manager at Fidelity Investments in Boston, before joining JP Morgan's hedge fund operation, Highbridge Capital Management, in 2005.
The 'go anywhere' funds got popular because they promised protection in the event of rising interest rates, said Morningstar's Jacobson.
"The managers avoided rate risk, but they took on credit risk by buying foreign bonds and high yield bonds," said Jacobson. "It just illustrates that there is no free lunch."