Investing in high yield securities needs an above average
appetite for risk as the probability of default is the highest in
these securities. These lower rated securities carry high coupon
yields to compensate investors for the associated risk. However,
they can maximize total returns by generating high interest income
and capital appreciation over the long term. Mutual funds investing
in these securities significantly reduce the associated risk
through diversification and should be a part of the portfolio of
every investor looking at maximum returns.
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
.
MassMutual Premier High Yield A
(
MPHAX
) invests the majority of its assets in domestic fixed income
securities with relatively lower ratings. These include corporate
bonds, asset backed instruments and securities issued by the U.S.
government or its agencies. This high yield mutual fund returned
14.55% 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 Fund A
(
LBHYX
) seeks high current income. The fund invests a large share of its
assets in a wide range of high-yield debt securities with ratings
equal to or below "BB" as per S&P or 'Ba" as per Moody's. This
high yield mutual fund returned 14.78% over the last one year
period.
As of June 2012, this high yield mutual fund held 266 issues,
with 1.14% of its total assets invested in Sprint Nextel 144A
9%.
Virtus High-Yield A
(
PHCHX
) invests the majority of its assets in fixed income instruments
which generate high yields. The maturity period of the fund is
identical to that of its benchmark the Barclay's Capital U.S. High
Yield 2% Issuer Capped Index. This high yield mutual fund returned
13.71% over the last one year period.
The high yield mutual fund has a minimum initial investment of
$2,500 and an expense ratio of 1.21% compared to a category average
of 1.12%.
Columbia High Yield Bond A
(
INEAX
) seeks high current income. A large share of the fund's assets is
utilized to purchase debt securities rated below investment grade.
Not more than 25% of its assets are utilized to purchase foreign
high-yield debt securities. This high yield mutual fund returned
14.69% over the last one year period.
Scott Schroepfer is the fund manager and he has managed this
high yield mutual fund since 1999.
Vanguard High-Yield Corporate
(
VWEHX
) invests the majority of its assets in a wide range of corporate
bonds which are rated medium or low in terms of credit quality.
These bonds usually have medium or short term maturity periods. The
high yield mutual fund returned 14.13% over the last one year
period.
The high yield mutual fund has a minimum initial investment of
$3,000 and an expense ratio of 0.23% 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 at
http://www.zacks.com/funds
.
View All Zacks #1 Ranked Mutual Funds
(INEAX): ETF Research Reports
(LBHYX): ETF Research Reports
(MPHAX): ETF Research Reports
(PHCHX): ETF Research Reports
(VWEHX): ETF Research Reports
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