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Grab These 3 High-Yield Bond Funds for Solid Returns
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High-yield bonds are debt securities issued by corporations that can provide a higher yield than investment-grade bonds, but are also riskier investments. These corporate bonds represent debt issued by a firm with the promise to pay interest and return the principal on maturity. Junk bonds are issued by companies with poorer credit quality.
They carry lower credit ratings from the leading credit agencies, usually Ba1 or lower by Moody's, or BB+ or lower by Standard & Poor's or Fitch. These bonds have significant holdings in smaller companies, which are considered to have a weaker financial condition but benefit as the economy moves north. Though high-yield bonds are more exposed to credit risk, these have less exposure to interest rate risk, making them a differentiated source of return.
Manning & Napier High Yield Bond Series invests the majority of its net assets in investment-grade bonds, derivative instruments and exchange-traded funds. These include dollar-denominated fixed-income securities issued by U.S. and foreign corporations and governments, including those in emerging markets. MNHYX also invests a portion of its net assets in bank loans, which are, generally, non-investment grade floating rate investments. The fund has returned 4% over the past three years.
As of March 2022, MNHYX had 19.2% of its assets invested in Total Misc Bonds.
Strategic Advisers Income Opportunities Fund invests mainly in income-generating debt securities, preferred stocks and convertible securities, emphasizing lower-quality debt securities. FPIOX also invests part of its assets in non-income-producing securities, including defaulted securities and common stocks. The fund has returned 1.5% over the past three years.
Jonathan Duggan has been one of the fund managers of FPIOX since 2019.
American Funds American High-Income Trust invests primarily in higher-yielding and lower-quality debt securities. AHIFX also invests part of its assets in securities of issuers domiciled outside the United States. The fund has returned 2.9% over the past three years.
AHIFX has an expense ratio of 0.40% compared with the category average of 0.95%.
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Grab These 3 High-Yield Bond Funds for Solid Returns
High-yield bonds are debt securities issued by corporations that can provide a higher yield than investment-grade bonds, but are also riskier investments. These corporate bonds represent debt issued by a firm with the promise to pay interest and return the principal on maturity. Junk bonds are issued by companies with poorer credit quality.
They carry lower credit ratings from the leading credit agencies, usually Ba1 or lower by Moody's, or BB+ or lower by Standard & Poor's or Fitch. These bonds have significant holdings in smaller companies, which are considered to have a weaker financial condition but benefit as the economy moves north. Though high-yield bonds are more exposed to credit risk, these have less exposure to interest rate risk, making them a differentiated source of return.
Below, we share with you three top-ranked high-yield bond mutual funds, namely Manning & Napier High Yield Bond Series (MNHYX - Free Report) , Strategic Advisers Income Opportunities Fund (FPIOX - Free Report) and American Funds American High-Income Trust (AHIFX - Free Report) . 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.
Manning & Napier High Yield Bond Series invests the majority of its net assets in investment-grade bonds, derivative instruments and exchange-traded funds. These include dollar-denominated fixed-income securities issued by U.S. and foreign corporations and governments, including those in emerging markets. MNHYX also invests a portion of its net assets in bank loans, which are, generally, non-investment grade floating rate investments. The fund has returned 4% over the past three years.
As of March 2022, MNHYX had 19.2% of its assets invested in Total Misc Bonds.
Strategic Advisers Income Opportunities Fund invests mainly in income-generating debt securities, preferred stocks and convertible securities, emphasizing lower-quality debt securities. FPIOX also invests part of its assets in non-income-producing securities, including defaulted securities and common stocks. The fund has returned 1.5% over the past three years.
Jonathan Duggan has been one of the fund managers of FPIOX since 2019.
American Funds American High-Income Trust invests primarily in higher-yielding and lower-quality debt securities. AHIFX also invests part of its assets in securities of issuers domiciled outside the United States. The fund has returned 2.9% over the past three years.
AHIFX has an expense ratio of 0.40% compared with the category average of 0.95%.
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.
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