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For an average investor, high-yield bond mutual funds are the best 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, reducing the risk of the portfolio. 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, they are less susceptible to interest rate fluctuations.
T. Rowe Price Floating Rate Adv fund invests its assets along with borrowing, if any, in floating-rate loans and floating-rate debt securities, wherein floating-rate loans represent amounts borrowed by companies or other entities from banks and other lenders. PAFRX advisors invest mostly in funds that are below investment grade or junk or unrated securities.
T. Rowe Price Floating Rate Adv has three-year annualized returns of 5.8%. As of the end of May 2024, PAFRX held 48.2% of its net assets in miscellaneous bonds.
Manning & Napier High Yield Bond fund invests the majority of its net assets in investment-grade bonds, derivative instruments and exchange-traded funds. MNHYX also invests a portion of its net assets in bank loans, which are, generally, non-investment grade floating rate investments.
Manning & Napier High Yield Bond fund has three-year annualized returns of 5%. MNHYX has an expense ratio of 0.90%.
Buffalo High Yield Fund seeks high current income with long-term growth of capital as a secondary objective. BUFHX invests its net assets in higher-yielding, higher-risk fixed-income securities.
Buffalo High Yield Fund has three-year annualized returns of 4.4%. Jeffrey K. Deardorff has been the fund manager of BUFHX since January 2015.
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Grab These 3 High-Yield Bond Funds to Reduce Risk
For an average investor, high-yield bond mutual funds are the best 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, reducing the risk of the portfolio. 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, they are less susceptible to interest rate fluctuations.
Below, we share with you three top-ranked high-yield bond mutual funds, viz., T. Rowe Price Floating Rate Adv (PAFRX - Free Report) , Manning & Napier High Yield Bond (MNHYX - Free Report) and Buffalo High Yield Fund (BUFHX - Free Report) . Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.
T. Rowe Price Floating Rate Adv fund invests its assets along with borrowing, if any, in floating-rate loans and floating-rate debt securities, wherein floating-rate loans represent amounts borrowed by companies or other entities from banks and other lenders. PAFRX advisors invest mostly in funds that are below investment grade or junk or unrated securities.
T. Rowe Price Floating Rate Adv has three-year annualized returns of 5.8%. As of the end of May 2024, PAFRX held 48.2% of its net assets in miscellaneous bonds.
Manning & Napier High Yield Bond fund invests the majority of its net assets in investment-grade bonds, derivative instruments and exchange-traded funds. MNHYX also invests a portion of its net assets in bank loans, which are, generally, non-investment grade floating rate investments.
Manning & Napier High Yield Bond fund has three-year annualized returns of 5%. MNHYX has an expense ratio of 0.90%.
Buffalo High Yield Fund seeks high current income with long-term growth of capital as a secondary objective. BUFHX invests its net assets in higher-yielding, higher-risk fixed-income securities.
Buffalo High Yield Fund has three-year annualized returns of 4.4%. Jeffrey K. Deardorff has been the fund manager of BUFHX since January 2015.
To view the Zacks Rank and the past performance of all high-yield bond funds, investors can click here to see the complete list of high-yield bond funds.
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