Junk bond markets in the US and Europe are set for recovery in 2002, with total returns coming close to double digits.

Merrill Lynch high-yield market strategists Marty Fridson and Chris Garman said in a report that investors can expect to see returns of about 9.8% in the US high-yield market next year, as portfolio managers continue to move from the safety of cash instruments and government bonds to riskier investments.