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 that reduce portfolio risk. In addition, these funds provide better returns than investments with higher ratings, including government and corporate bonds. Further, since the yield from such bonds is higher than that of investment-grade securities, they are less susceptible to interest rate fluctuations.
AB High Income fund seeks primarily a high level of current income and, secondarily, capital appreciation. AGDAX invests in sovereign debt obligations of developing countries and in U.S. and non-U.S. corporate fixed-income securities.
AB High Income fund has three-year annualized returns of 9.8%. Matthew S. Sheridan has been one of the fund managers of AGDAX since October 2005.
Nuveen Credit Income fund seeks a high level of current income. FJSYX invests primarily in three low-correlated fixed income sectors - domestic investment grade, high yield and international.
Nuveen Credit Income fund has three-year annualized returns of 10.8%. FJSYX has an expense ratio of 0.71%.
T. Rowe Price Floating Rate Adv fund invests its assets, along with borrowing, if any, in floating rate loans and floating rate debt securities. 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 8.8%. As of the end of August 2025, PAFRX held 53.3% of its net assets in Misc Bonds.
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3 High-Yield Bond Funds to Buy for Impressive Returns
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 that reduce portfolio risk. In addition, these funds provide better returns than investments with higher ratings, including government and corporate bonds. Further, since the yield from such bonds is higher than that of 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., AB High Income ((AGDAX - Free Report) ), Nuveen Credit Income ((FJSYX - Free Report) ) and T. Rowe Price Floating Rate Adv ((PAFRX - Free Report) ). Each has earned a Zacks Mutual Fund Rank #1(Strong Buy) and is expected to outperform its peers in the future. Investors canclick here to see the complete list of funds.
AB High Income fund seeks primarily a high level of current income and, secondarily, capital appreciation. AGDAX invests in sovereign debt obligations of developing countries and in U.S. and non-U.S. corporate fixed-income securities.
AB High Income fund has three-year annualized returns of 9.8%. Matthew S. Sheridan has been one of the fund managers of AGDAX since October 2005.
Nuveen Credit Income fund seeks a high level of current income. FJSYX invests primarily in three low-correlated fixed income sectors - domestic investment grade, high yield and international.
Nuveen Credit Income fund has three-year annualized returns of 10.8%. FJSYX has an expense ratio of 0.71%.
T. Rowe Price Floating Rate Adv fund invests its assets, along with borrowing, if any, in floating rate loans and floating rate debt securities. 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 8.8%. As of the end of August 2025, PAFRX held 53.3% of its net assets in Misc Bonds.
To view the Zacks Rank and the past performance of all high-yield bond funds, investors canclick here to see the complete list of high-yield bond funds.
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