This is our short term rating system that serves as a timeliness indicator for stocks over the next 1 to 3 months. How good is it? See rankings and related performance below.
|Zacks Rank||Definition||Annualized Return|
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For the average investor, high yield mutual funds are the best method to invest in bonds rated below investment grade, popularly known as junk bonds. This is because these funds hold a wide range of such securities, significantly reducing portfolio risk. In addition, these funds provide better returns than investments with higher ratings, including government and corporate bonds. Further, because the yield from such bonds is higher than investment grade securities, these investments are less susceptible to interest rate fluctuations.
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.
Thrivent High Yield A (LBHYX - MF report) invests a large share of its assets in a wide range of high-yield debt securities. The securities must have ratings equal to or below “BB” as per S&P or ‘Ba” as per Moody’s. This high yield mutual fund returned 15.81% over the last one year period.
Paul Ocenasek is the fund manager and he has managed this high yield mutual fund since 1997.
MassMutual Premier High Yield A (MPHAX - MF report) seeks high total return. It invests heavily in fixed income instruments with relatively lower ratings. A maximum of 20% of its assets may be invested in bank loans. This high yield mutual fund returned 16.32% over the last one year period.
The high yield mutual fund has an expense ratio of 1.15% compared to a category average of 1.12%.
Transamerica High Yield Bond A (IHIYX - MF report) invests heavily in bonds with high risk and providing high returns. The fund may also invest in cash, equivalent securities, money market securities or short term debt instruments. This high yield mutual fund returned 16.99% over the last one year period.
As of December 2012, this high yield mutual fund held 268 issues, with 1.77% of its total assets invested in Springleaf Fin 6.9%
Delaware High-Yield Opportunities A (DHOAX - MF report) seeks total return. The fund invests in bonds providing high return with ratings equal to or below “BBB”. It may invest in both domestic and foreign securities issued by governments as well as in foreign corporate bonds. This high yield mutual fund returned 17.40% over the last one year period.
Thomas H. Chow is the fund manager and he has managed this high yield mutual fund since 2012.
Western Asset Global High Yield Bond A (SAHYX - MF report) invests the majority of its assets in high yield bonds with relatively lower ratings. It may invest in both domestic and foreign securities and also in instruments backed by foreign governments. A maximum of 35% of its assets may be invested in sovereign debt instruments from emerging markets. This high yield mutual fund returned 18.83% over the last one year period.
The high yield mutual fund has an expense ratio of 1.31% compared to a category average of 1.12%.
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.
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