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3 High-Yield Bond Funds With Strong Returns and Broad Exposure
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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 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.
Fidelity Capital & Income Fund invests its net assets in domestic and foreign equity and debt securities, which include lower-quality debt securities, defaulted securities and also in companies in troubled or uncertain financial conditions. FAGIX advisors choose to invest based on the fundamental analysis of each issuer's financial condition, industry position and market as well as economic conditions.
Fidelity Capital & Income Fund has three-year annualized returns of 13.5%. As of the end of January 2026, FAGIX held 38.3% of its net assets in miscellaneous bonds.
American Funds High-IncomeTrust invests most of its assets in high-yielding and low-quality debt securities of domestic and foreign issuers, which are rated Ba1/BB+ or below by nationally recognized rating organizations or other issues of equivalent quality based on the fund manager’s judgment. AHITX advisors also invest in corporate loan obligations.
American Funds High-Income Trust has three-year annualized returns of 9.6%. AHITX has an expense ratio of 0.73%.
PIMCO High Yield Spectrum fund invests most of its net assets in high-yield investment bonds, which may be represented by convertibles, warrants, forwards or derivatives such as swap agreements. PHSAX advisors may also invest in derivative instruments, such as credit default swap agreements and total return swap agreements.
PIMCO High Yield Spectrum fund has three-year annualized returns of 8.9%. Charles Watford has been the fund manager of PHSAX since January 2023.
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3 High-Yield Bond Funds With Strong Returns and Broad Exposure
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 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, namely Fidelity Capital & Income Fund (FAGIX - Free Report) , American Funds High-income Trust (AHITX - Free Report) and PIMCO High Yield Spectrum (PHSAX - 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.
Fidelity Capital & Income Fund invests its net assets in domestic and foreign equity and debt securities, which include lower-quality debt securities, defaulted securities and also in companies in troubled or uncertain financial conditions. FAGIX advisors choose to invest based on the fundamental analysis of each issuer's financial condition, industry position and market as well as economic conditions.
Fidelity Capital & Income Fund has three-year annualized returns of 13.5%. As of the end of January 2026, FAGIX held 38.3% of its net assets in miscellaneous bonds.
American Funds High-IncomeTrust invests most of its assets in high-yielding and low-quality debt securities of domestic and foreign issuers, which are rated Ba1/BB+ or below by nationally recognized rating organizations or other issues of equivalent quality based on the fund manager’s judgment. AHITX advisors also invest in corporate loan obligations.
American Funds High-Income Trust has three-year annualized returns of 9.6%. AHITX has an expense ratio of 0.73%.
PIMCO High Yield Spectrum fund invests most of its net assets in high-yield investment bonds, which may be represented by convertibles, warrants, forwards or derivatives such as swap agreements. PHSAX advisors may also invest in derivative instruments, such as credit default swap agreements and total return swap agreements.
PIMCO High Yield Spectrum fund has three-year annualized returns of 8.9%. Charles Watford has been the fund manager of PHSAX since January 2023.
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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