3 Top-Ranked High-Yield Bond Funds to Hedge Your Risk

For an average investor, high-yield bond 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, which reduces the risk of the portfolio. 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, they are less susceptible to interest rate fluctuations.

Below, we share with you three top-ranked high-yield bond mutual funds, namely Fidelity Series Floating Rate High Income Fund FFHCXNeuberger Berman Floating Rate Income Fund NFIAX and Credit Suisse Floating Rate High Income CHICX. 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 funds.

Fidelity Series Floating Rate High Income Fund invests most of its net assets in floating rate loans, lower-quality debt securities, also referred to as high-yield debt securities, companies in distress or uncertain financial condition, money market, investment-grade debt securities, and repurchase agreements. FFHCX advisors invest in both foreign and domestic issues.

Fidelity Series Floating Rate High Income Fund has three-year annualized returns of 6.7%. As of the end of December 2023, FFHCX held 63.7% of its net assets in miscellaneous bonds.

Neuberger Berman Floating Rate Income Fund invests most of its net assets in floating-rate securities, loans and other investments in companies that provide investment exposure to such floating-rate securities. NFIAX chooses to invest in floating-rate, senior-secured loans and below-investment-grade securities issued in U.S. dollars by U.S. and foreign issuers.

Neuberger Berman Floating Rate Income Fund has three-year annualized returns of 5%.NFIAX has an expense ratio of 0.97%.

Credit Suisse Floating Rate High Income fund invests most of its assets, along with borrowings, if any, in high-yield, domestic fixed-income securities, which consist entirely of senior-secured floating-rate loans issued by non-investment grade companies. CHICX advisors also invest in securities of foreign issuers.

Credit Suisse Floating Rate High Income fund has three-year annualized returns of 4.4%. Wing Chan has been the fund manager of CHICX since October 2005.

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

5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>
View All Zacks #1 Ranked Mutual Funds

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 (CHICX): Fund Analysis Report

Get Your Free (NFIAX): Fund Analysis Report

Get Your Free (FFHCX): 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.

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.