For the average investor, high yield mutual funds are the best
method to invest in bonds rated below investment grade, popularly
known as junk bonds. This is because these funds hold a wide
range of such securities, significantly reducing portfolio risk.
In addition, these funds provide better returns than investments
with higher ratings, including government and corporate bonds.
Further, because the yield from such bonds is higher than
investment grade securities, these investments are less
susceptible to interest rate fluctuations.
Below we will share with you 5 top rated high yield mutual
funds. Each has earned a
Zacks #1 Rank
(Strong Buy) as we expect these mutual funds to outperform their
peers in the future. To view the Zacks Rank and past performance
of all high yield funds, investors can
click here to see the complete list of funds.
Western Asset Global High Yield Bond A
(SAHYX) invests the majority of its assets in high yield bonds
with relatively lower ratings. It may invest in both domestic and
foreign securities and also in instruments backed by foreign
governments. A maximum of 35% of its assets may be invested in
sovereign debt instruments from emerging markets. This high yield
mutual fund returned 18.83% over the last one year period.
S. C. Leech is the fund manager and he has managed this high
yield mutual fund since 2006.
Delaware High-Yield Opportunities A
(DHOAX) seeks total return. The fund invests in bonds providing
high return with ratings equal to or below "BBB". It may invest
in both domestic and foreign securities issued by governments as
well as in foreign corporate bonds. This high yield mutual fund
returned 17.40% over the last one year period.
As of November 2012, this high yield mutual fund held 265
issues, with 1.00% of its total assets invested in Chrysler Grp
Llc / Cg Co-Iss 8.25%.
Transamerica High Yield Bond A
(IHIYX) invests heavily in bonds with high risk and providing
high returns. The fund may also invest in cash, equivalent
securities, money market securities or short term debt
instruments. This high yield mutual fund returned 16.99% over the
last one year period.
The high yield mutual fund has an expense ratio of 1.06%
compared to a category average of 1.12%.
MassMutual Premier High Yield A
(MPHAX) seeks high total return. It invests heavily in fixed
income instruments with relatively lower ratings. A maximum of
20% of its assets may be invested in bank loans. This high yield
mutual fund returned 16.32% over the last one year period.
Scott D. Roth is the fund manager and he has managed this high
yield mutual fund since 2010.
Thrivent High Yield A
(LBHYX) invests a large share of its assets in a wide range of
high-yield debt securities. The securities must have ratings
equal to or below "BB" as per S&P or 'Ba" as per Moody's.
This high yield mutual fund returned 15.81% over the last one
year period.
The high yield mutual fund has an expense ratio of 0.82%
compared to a category average of 1.12%.
To view the Zacks Rank and past performance of all high yield
mutual funds, investors can click here to see the complete list
of funds.
About Zacks Mutual Fund Rank
By applying the Zacks Rank to mutual funds, investors can find
funds that not only outpaced the market in the past but are also
expected to outperform going forward.
Learn more
about the
Zacks Mutual Fund Rank
.
View All Zacks #1 Ranked Mutual Funds
(DHOAX): ETF Research Reports
(IHIYX): ETF Research Reports
(LBHYX): ETF Research Reports
(MPHAX): ETF Research Reports
(SAHYX): ETF Research Reports
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