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High yield securities are the preferred option for investors who have a reasonable appetite for risk and who are willing to forgo equity growth for current income. This category of securities comprise of corporate bonds of low quality, convertible securities and preferred stock, all of which carry a significant amount of risk. Mutual funds are a prudent method to invest in this class of funds as they significantly reduce the risk involved by holding a well diversified portfolio. Such funds may also seek capital appreciation as a secondary objective.
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||8.52%|
|JHancock3 Core High Yield A||7.07%|
|Virtus High Yield A||6.65%|
|PNC HIgh Yield Bond A||6.38%|
|MassMutual Premier High Yield A||6.36%|
Waddell & Reed High-Income A ( UNHIX - MF report ) seeks total return. The fund 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. This high yield mutual fund returned 10.03% over the last one year period.
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 1.13%.
JHancock3 Core High Yield A ( JYIAX - MF report ) invests a large share of its assets in high yield corporate debt securities. These are those that are rated below investment grade at the time of purchase. This high yield mutual fund returned 7.07% over the last one year period.
Richard Kos is the fund manager and he has managed this high yield mutual fund since 2009.
Virtus High Yield A ( PHCHX - MF report ) seeks high current income. The fund invests the majority 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 7.78% over the last one year period.
The high yield mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.21% compared to a category average of 1.13%.
PNC High Yield Bond A ( PAHBX - MF report ) invests a large share of its assets in debt securities rated below investment grade. The fund focuses on acquiring corporate bonds and mortgage and asset backed securities issued from Canada and the U.S. This high yield mutual fund returned 8.42% over the last one year period.
As of August 2012, this high yield mutual fund held 72 issues, with 4.20% of its total assets invested in PNC Advantage Instl MMkt I.
MassMutual Premier High Yield A ( MPHAX - MF report ) seeks high total return. The fund invests heavily 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 8.54% over the last one year period.
Kyle A. Jennings is the fund manager and he has managed this high yield mutual fund since 2011.
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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