We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Investors seeking bonds rated lower than investment-grade can consider high-yield bonds or junk bonds. Mutual funds having significant exposure in high-yield bonds are expected to provide better returns than those investing in securities with higher ratings, including government and corporate bonds. Also, due to their higher-yield feature, junk bonds are believed to be less susceptible to interest rate fluctuations.
Although bonds rated below investment grade are believed to be riskier than investment grade bonds, a well-diversified portfolio of these securities reduce the risk of a portfolio. Thus mutual funds maintaining a portfolio of these securities are best for investors as these allocate their assets in such securities from a wide range of sectors.
TIAA-CREF High-Yield Retail (TIYRX - Free Report) seeks a high level of income as well as appreciation of capital. TIYRX invests mainly in fixed-income securities that have high yields and are rated lower than investment-grade. TIAA-CREF High-Yield Retail has three-year annualized returns of 5.5%.
As of September 2018, TIYRX held 467 issues, with 1.08% of its total assets invested in Prime Securities Services Borrower, LLC and Prime Finance, Inc. 9.25%.
Fidelity High Income (SPHIX - Free Report) invests mainly in income-generating debt securities, convertible bonds and preferred stocks. The fund seeks to increase income and capital growth. SPHIX invests specifically in companies that have a weak financial position. It invests in both U.S. and non-U.S. companies. Fidelity High Income has three-year annualized returns of 6.6%.
SPHIX has an annual expense ratio of 0.70%, lower than the category average of 1.00%.
American Funds American High-Income R4 (RITEX - Free Report) seeks to offer maximization of income as well as appreciation of capital. The fund invests primarily in debt securities that are rated BB+ or lower or Ba1 or lower by Nationally Recognized Statistical Rating Organizations or those that are unrated. American Funds American High-Income R4has three-year annualized returns of 6.2%.
David A. Daigle is one of the fund managers of RITEX since 2003.
Image: Bigstock
3 Best High-Yield Mutual Funds for High Gains
Investors seeking bonds rated lower than investment-grade can consider high-yield bonds or junk bonds. Mutual funds having significant exposure in high-yield bonds are expected to provide better returns than those investing in securities with higher ratings, including government and corporate bonds. Also, due to their higher-yield feature, junk bonds are believed to be less susceptible to interest rate fluctuations.
Although bonds rated below investment grade are believed to be riskier than investment grade bonds, a well-diversified portfolio of these securities reduce the risk of a portfolio. Thus mutual funds maintaining a portfolio of these securities are best for investors as these allocate their assets in such securities from a wide range of sectors.
Below we share with you three top-ranked high-yield bond mutual funds. 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 high-yield bond mutual funds.
TIAA-CREF High-Yield Retail (TIYRX - Free Report) seeks a high level of income as well as appreciation of capital. TIYRX invests mainly in fixed-income securities that have high yields and are rated lower than investment-grade. TIAA-CREF High-Yield Retail has three-year annualized returns of 5.5%.
As of September 2018, TIYRX held 467 issues, with 1.08% of its total assets invested in Prime Securities Services Borrower, LLC and Prime Finance, Inc. 9.25%.
Fidelity High Income (SPHIX - Free Report) invests mainly in income-generating debt securities, convertible bonds and preferred stocks. The fund seeks to increase income and capital growth. SPHIX invests specifically in companies that have a weak financial position. It invests in both U.S. and non-U.S. companies. Fidelity High Income has three-year annualized returns of 6.6%.
SPHIX has an annual expense ratio of 0.70%, lower than the category average of 1.00%.
American Funds American High-Income R4 (RITEX - Free Report) seeks to offer maximization of income as well as appreciation of capital. The fund invests primarily in debt securities that are rated BB+ or lower or Ba1 or lower by Nationally Recognized Statistical Rating Organizations or those that are unrated. American Funds American High-Income R4has three-year annualized returns of 6.2%.
David A. Daigle is one of the fund managers of RITEX since 2003.
To view the Zacks Rank and past performance of all high-yield bond mutual funds, can click here to see the complete list of high-yield bond mutual funds.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>