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 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.

The high yield mutual fund has a minimum initial investment of $500 and an expense ratio of 1.08% compared to a category average of 1.15%.

Virtus High Yield A ( PHCHX - MF report ) invests a large share of its assets in fixed income securities which provide high yields. The maturity period of the fund is similar to its style benchmark, the Barclays Capital U.S. High Yield 2% Issuer Capped Index. This high yield mutual fund returned 6.95% over the last one year period.

Kyle A. Jennings is the fund manager and he has managed this high yield mutual fund since 2011.

Columbia High Yield Opportunity A ( ) seeks total return. A majority of its assets are invested in high yield debt securities issued by domestic and foreign companies including companies from emerging markets. This high yield mutual fund returned 8.71% over the last one year period.

The high yield mutual fund has a minimum initial investment of $2000 and an expense ratio of 1.05% compared to a category average of 1.15%.

MassMutual Premier High Yield A ( MPHAX - MF report ) invests a large share of its assets in domestic fixed income securities with relatively lower ratings. These include corporate bonds, asset backed instruments and securities issued by the U.S. government or its agencies. This high yield mutual fund returned 7.64% over the last one year period.

As of May 2012, this high yield mutual fund held 143 issues, with 2.22% of its total assets invested in Evertec 11%.

American Century High-Yield ( ABHIX - MF report ) seeks current income. The fund primarily invests in corporate bonds which provide high yields and other debt securities. A maximum of 40% of its assets may be utilized to purchase foreign debt securities. This high yield mutual fund returned 6.87 % over the last one year period.

G. David MacEwen is the fund manager and he has managed this high yield mutual fund since 2008.

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.