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Top 5 High Yield Funds
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ShareHigh yield securities are an excellent choice for investors who are not risk averse and who seek current income rather than equity growth. Such securities include corporate bonds with low credit ratings, convertible securities and preferred stock, all of which carry a significant amount of risk. Mutual funds are the best way to invest in this category as they reduce the risk involved by holding a well diversified portfolio. They may also seek capital appreciation as a secondary objective and help with portfolio diversification.
Below we will share with you 5 top rated high yield funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all high yield funds, then click here.
USAA High-Yield Opportunities (USHYX) seeks high current income with a secondary objective of capital appreciation. At least 80% of its assets are used to purchase high yield securities such as bonds, convertible securities and preferred stocks. The high yield fund has a ten year annualized return of 6.77%.
Julianne Bass is the fund manager and has managed this high yield fund since 2007.
Rydex/SGI High Yield A (SIHAX) invests the majority of its assets in a wide range of high-yield debt securities. These securities are generally rated below the top four investment grades by a renowned ratings firm. Up to 10% of the securities purchased by the fund may be in default at the time of purchase. The fund has a five year annualized return of 8.65%.
This high yield fund has a minimum initial investment of $100 and an expense ratio of 1.10% compared to a category average of 1.21%.
John Hancock2 High Yield 1 (JIHDX) seeks above average total return. It invests the majority of its assets in corporate bonds, preferred stocks, government and asset backed securities. It may purchase foreign bonds as well as fixed-income securities denominated in foreign currencies. It is a no load fund.
The high yield fund returned 49.85% in the last one year period and has a three year annualized return of 5.98%.
American Funds American High Income Trust A (AHITX) invests the majority of its assets in high-yield debt securities. These are primarily securities given lower ratings by a renowned rating firm. They may also be unrated securities which are believed to be of similar quality. This high yield fund returned 42.59% over the last one year period.
As of March 2010, this high yield fund held 689 issues, with 1.14% of its total assets invested in Cricket Comms 9.375%
Legg Mason Western Asset High Yield Bond A (SAHYX) seeks total return. It invests at least 80% of its assets in high yield bonds and related securities. Up to 35% of its assets may also be utilized to purchase sovereign debt issued by governments from emerging markets and their agencies. The fund has a five year annualized return of 6.13%.
The fund has an expense ratio of 1.19% compared to a category average of 1.21%.
To view the Zacks Rank and past performance of all high yield funds, then click here.
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 at http://www.zacks.com/funds/mutualfund/
Read the full analyst report on USHYX
Read the full analyst report on SIHAX
Read the full analyst report on JIHDX
Read the full analyst report on AHITX
Read the full analyst report on SAHYX
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| Market Summary | May 26, 2012 08:13 am ET |
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