Is BHYIX a Strong Bond Fund Right Now?

If investors are looking at the High Yield - Bonds fund category, BlackRock High Yield Bond Institutional (BHYIX) could be a potential option. BHYIX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.


We note that BHYIX is a High Yield - Bonds option, which is an area loaded with different investment choices. High Yield - Bonds funds are often known as " junk " bonds since they are below investment grade. This means they are at an elevated risk of default, at least when compared to their investment grade peers. On the plus side, junk bonds generally pay out higher yields, all while posing similar interest rate risks as we see with their investment grade counterparts.

History of Fund/Manager

BlackRock is based in New York, NY, and is the manager of BHYIX. BlackRock High Yield Bond Institutional made its debut in November of 1998, and since then, BHYIX has accumulated about $11.35 billion in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.


Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 3.89%, and it sits in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 2.98%, which places it in the top third during this time-frame.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Over the past three years, BHYIX's standard deviation comes in at 9.06%, compared to the category average of 11.91%. Over the past 5 years, the standard deviation of the fund is 7.83% compared to the category average of 10.88%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of 0.59, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, BHYIX has a positive alpha of 1.83, which measures performance on a risk-adjusted basis.


Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, BHYIX 's junk bond component-bonds rated 'BB' or below-is at 83.92%. This means that the fund has an average quality of BBB, and focuses on medium quality securities.


As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, BHYIX is a no load fund. It has an expense ratio of 0.60% compared to the category average of 1.02%. Looking at the fund from a cost perspective, BHYIX is actually cheaper than its peers.

While the minimum initial investment for the product is $2 million, investors should also note that there is no minimum for each subsequent investment.

Bottom Line

Overall, BlackRock High Yield Bond Institutional ( BHYIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, BlackRock High Yield Bond Institutional ( BHYIX ) looks like a good potential choice for investors right now.

Want even more information about BHYIX? Then go over to and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. For analysis of the rest of your portfolio, make sure to visit for our full suite of tools which will help you investigate all of your stocks and funds in one place.

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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.

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