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
.
Guggenheim High Yield A
(
SIHAX
) invests the majority of its assets in a wide range of debt
securities with high risk and providing high returns. These
securities should not be among the top four long-term rating
categories as designated by a Nationally Recognized Statistical
Rating Organization (NRSRO). The high yield mutual fund returned
17.18% over the last one year period.
The high yield mutual fund has a minimum initial investment of
$100 and an expense ratio of 1.18% compared to a category average
of 1.13%.
John Hancock Funds II High Yield 1
(
JIHDX
) seeks high risk adjusted return over medium to long term period
and invests heavily in high income securities. The fund may
utilize its assets to purchase foreign securities or invest in
fixed- and floating-rate loans. This high yield mutual fund
returned 18.38% over the last one year period.
Stephen A. Walsh is the fund manager and he has managed this
high yield mutual fund since 2006.
Waddell & Reed High-Income A
(
UNHIX
) invests the majority of its assets in a wide range of fixed
income securities that generates high yield and bear high risk.
It invests significantly in junk bonds. This high yield mutual
fund returned 20.08% over the last one year period.
The high yield mutual fund has an expense ratio of 1.08%
compared to a category average of 1.13%.
Loomis Sayles High Income A
(
NEFHX
) seeks high current income and capital growth. A minimum of 65%
of its assets may be used to purchase securities rated below
investment grade or dollar denominated foreign fixed-income
securities. This high yield mutual fund returned 21.39% over the
last one year period.
As of November 2012, this high yield mutual fund held 267
issues, with 2.13% of its total assets invested in Sprint Cap
6.875%
Delaware Pooled High-Yield Bond
(
DPHYX
) invests heavily in securities that generate high and stable
income. It also focuses on corporate bonds rated "BB" or lower as
per S&P investment grade and those securities that are backed
by domestic government and related agencies. This high yield
mutual fund returned 19.50% over the last one year period.
Thomas H. Chow is the fund manager and he has managed this
high yield mutual fund since 2012.
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
(DPHYX): ETF Research Reports
(JIHDX): ETF Research Reports
(NEFHX): ETF Research Reports
(SIHAX): ETF Research Reports
(UNHIX): ETF Research Reports
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