Investing in high yield securities needs an above average appetite for risk as the probability of default is the highest in these securities. These lower rated securities carry high coupon yields to compensate investors for the associated risk. However, they can maximize total returns by generating high interest income and capital appreciation over the long term. Mutual funds investing in these securities significantly reduce the associated risk through diversification and should be a part of the portfolio of every investor looking at maximum returns.

Below we will share with you 5 top rated 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.

Transamerica High Yield Bond A ( IHIYX - MF report ) seeks high current income. The fund invests a large share of its assets in bonds with high risk providing high returns. It may also invest in cash, equivalent securities or short term debt instruments. The high yield mutual fund returned 5.96% over the last one year period.

The high yield mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.17% compared to a category average of 1.16%.

Federated High-Income Bond A ( FHIIX - MF report ) 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. The high yield mutual fund returned 6.56% over the last one year period.

As of March 2012, this high yield fund held 407 issues, with 1.79% of its total assets invested in Cit Grp 7%.

Columbia High Yield Opportunity A ( ) seeks total returns. A majority of its assets are invested in high yield debt securities issued by domestic and foreign companies including companies from emerging markets. The high yield mutual fund returned 6.18% in the last one year period.

Brian Lavin is the fund manager and he has managed this high yield mutual fund since 2010.

Delaware High-Yield Opportunities A ( DHOAX - MF report ) invests a large proportion of its assets in corporate bonds rated below investment-grade by renowned ratings firms such as Standard & Poors. The fund may also purchase unrated securities of similar quality. This high yield mutual fund returned 3.99% over the last one year period.

The high yield mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.11% compared to a category average of 1.16%.

Invesco High Yield A ( AMHYX - MF report ) seeks total return. The fund invests the majority of its assets in debt securities rated below investment grade. Up to 25% of its assets may be used to purchase foreign securities and up to 15% may be invested in emerging market securities. The high yield mutual fund returned 4.45% in the last one year period.

Peter Ehret is the fund manager and he has managed this high yield mutual fund since 2001.

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.