Sell what you can, not what you want, goes the old markets adage.

Analysts at UBS appear to have taken that strategy to heart with a new note detailing the stocks that could come under pressure in the event of a big squeeze in junk-rated bonds issued by companies with weaker balance sheets. The idea here is that investment funds carrying big portfolios of both bonds and shares could be hard hit in the event of a long-awaited liquidity crunch that sparks turmoil in the corporate debt market.

In that scenario, such funds might find themselves having to meet redemption requests by selling more liquid assets from their portfolios, such as stocks and US Treasuries, as opposed to harder-to-trade corporate bonds.

Unlike other links between bond and equity markets in case of a credit crunch, which include higher borrowing costs for junk-rated, overstretched small companies and a general decline in risk appetite, the effects on investment funds would directly affect large, blue-chip stocks, the broker said in its report. 

Analysts Ramin Nakisa, Stephen Caprio and Matthew Mish point out that bond-and-shares investment funds and exchange-traded funds, "whose investors have no allegiance to [any] asset class" now hold a sizable chunk of both debt and equities. In fact, the breakdown of assets in this mercenary mutual funds looks something like this: