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Highest Yielding Zacks #1 Ranked Funds

Investors willing to undertake a higher level of risk in pursuit of high income levels would do well to consider high yield bonds. This category generally represents corporate bonds with low ratings, often below investment grade. A significant amount of risk is therefore associated with these investments and mutual funds are the best option to invest in these instruments. By investing in a well diversified portfolio of such securities they successfully lower the associated risk for the investor

Below we will share with you the 5 highest yielding Zacks #1 ranked high yield mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future.  To view the Zacks Rank and past performance of all high yield funds, investors can click here to see the complete list of funds.

 

Mutual Fund

Sec 30 Day Yield

Waddell & Reed High-Income A

8.52%

Federated High-Income Bond A

7.40%

Thrivent High Yield A

7.33%

Touchstone High Yield A

7.29%

John Hancock Funds2 US High Yield Bond 1

7.04%

 
Waddell & Reed High-Income A (UNHIX - MF report) invests the majority of its assets in a wide range of high yield debt instruments, the risk associated with which is in consonance with the fund’s objective. The fund purchases fixed-income securities without regard to their maturity period. This high yield mutual fund returned 5.97% over the last one year period.

William M. Nelson is the fund manager and he has managed this high yield mutual fund since 2008.

Federated High-Income Bond A (FHIIX - MF report) seeks high current income. The fund invests heavily in a wide range of high-yield corporate bonds with lower ratings. The fund may also utilize synthetic instruments such as derivatives to fulfill its investment objectives. This high yield mutual fund returned 5.74% over the last one year period.

The high yield mutual fund has a minimum initial investment of $1,500 and an expense ratio of 1.23% compared to a category average of 1.16%.

Thrivent High Yield A (LBHYX - MF report) invests a large share of its assets in junk bonds, debentures and other debt securities, as well as preferred stocks. The fund purchases securities without regard to their maturity period and invest in foreign securities. This high yield mutual fund returned 5.28% over the last one year period.

Paul Ocenasek is the fund manager and he has managed this high yield mutual fund since 1997.

Touchstone High Yield A (THYAX - MF report) seeks significant income with capital growth as a secondary objective. The fund invests a large proportion of its assets in debt securities rated below investment grade. The fund focuses on acquiring high yield securities issued by companies from the U.S. The high yield fund returned 5.97% over the last one year period.

As of December 2011, this high yield mutual fund held 194 issues, with 4.16% of its total assets invested in Touchstone Institutional Money Market.

John Hancock Funds2 US High Yield Bond 1 (JIHLX - MF report) invests the majority of its assets in domestic corporate debt securities rated below investment grade. Not more than 15% of its assets may be invested in a particular industry. The high yield fund returned 5.67% over the last one year period.

The high yield mutual fund has an expense ratio of 0.82% compared to a category average of 1.16%.

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

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