Quantcast

3 Top High-Yield Bond Mutual Funds for Strong Returns


Shutterstock photo

High-yield bond mutual funds provide the best choice for those looking to invest in below investment-grade bonds, also known as junk bonds. Though bonds rated below investment grade are believed to be riskier than investment grade bonds, a well-diversified portfolio of these securities reduce the risk of a portfolio. Thus mutual funds maintaining a portfolio of these securities are the best for investors as these allocate their assets in such securities from a wide range of sectors.

Moreover, these funds are expected to provide better returns than those investing in securities with higher ratings, including government and corporate bonds. Also, due to their higher yield feature, junk bonds are believed to be less susceptible to interest rate fluctuations.

Below we share with you three top-ranked high-yield bond mutual funds. Each has earned a Zacks Mutual Fund Rank #1  (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of high-yield bond mutual funds .

MainStay MacKay High Yield Corporate Bond R6  MHYSX seeks maximization of income through a diversified portfolio of high-yield debt securities that are unrated or rated below investment-grade. MHYSX invests a large chunk of its assets in both U.S. and non-U.S. corporate bonds that offer high yields. MainStay MacKay High Yield Corporate Bond R6 has one-year annualized returns of 2.7%.

MHYSX has an annual expense ratio of 0.59%, lower than the category average of 0.93%.

BlackRock High Yield Bond Portfolio Service Shares  BHYSX seeks to boost total returns on investment. BHYSX invests a bulk of its assets in non-investment grade bonds (high-yield bonds), which have maturity of 10 years or lower. It invests about 30% of its assets in foreign currency denominated issuers located offshore. BlackRock High Yield Bond Portfolio Service Shares has returned 3.2% in the last one-year period.

Andrew Susser is the fund manager of BHYSX since 2013.

Fidelity Capital & Income  FAGIX primarily focuses on acquiring debt securities that are rated below investment grade. FAGIX also invests in equity securities of companies that are facing unfavorable financial conditions throughout the globe. Factors such as industry position and economic condition are considered before investing in a security. Fidelity Capital & Income Fund has one-year annualized returns of 6%.

As of January 2018, FAGIX held 656 issues, with 2.06% of its total assets invested in Ally Financial Inc. 8% SNR PIDI NTS 01/11/2031 USD (SEC REGD).

To view the Zacks Rank and past performance of all high-yield bond mutual funds, can click here to see the complete list of high-yield bond mutual funds .

Want key mutual fund info delivered straight to your inbox?

Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Get Your Free (FAGIX): Fund Analysis Report

Get Your Free (BHYSX): Fund Analysis Report

Get Your Free (MHYSX): Fund Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Mutual Funds
Referenced Symbols: FAGIX , BHYSX , MHYSX


More from Zacks.com

Subscribe






Zacks.com
Contributor:

Zacks.com

Equity Research








Research Brokers before you trade

Want to trade FX?