A high-yield mutual fund firm is barring investors from withdrawing their money, which is considered an unusual move that emphasizes junk-bond decline that has taken its toll on Wall Street.

Market Watch reported that Third Avenue Focused Credit Fund's move aims to create an orderly liquidation of the assets, which amounts to $789 million. This is a big drop from last year's $2.4 billion. Redemption requests and reduced liquidity are the major reasons why the fund is blocking withdrawals.

Third Avenue Management LLC chief executive David Barse said the firm can't pay off the investors that are leaving without selling their assets at fire-sale prices. That's because it would be disadvantageous for the shareholders that are left.

The company was founded by investor Martin Whitman. According to The Wall Street Journal, Third Avenue's move to contract the mutual fund without returning the cash to the investors can lead to adverse effects to the company and the entire mutual-fund industry.

This business has promised people to invest in the long-term, but can still be able to cash out any time they want. Hedge-funds may block their investors from withdrawal at times, but not mutual funds.

"Most mutual-fund investors are under the presumption that their money is available for them at a moment's notice," says Thomson Reuters Lipper head of Americas research Jeff Tjornehoj. While investors understand that the higher yields of junk bonds come with risks, he said, "I don't think many of them ever plan on a fund blowing up like this."

The New York Times wrote that this issue shows the continuing deterioration of junk bonds. This industry is badly affected by the debt of energy companies severely hit by the decline in oil and gas prices. Energy debt makes up about a sixth of the junk bonds market.

This move also confirms the fears that too many investors are putting their money on highly risky parts of the bond market, such as leveraged loans, emerging-market bonds, and of course, the junk bonds.

High-yield bonds have the worst returns in the bond markets in 2015. Problems in the Junk Market could signal worse days to come for the broader economy.