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 the 5 highest yielding Zacks #1 ranked international bond 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 international bond funds, investors can click here to see the complete list of funds.
Franklin Templeton Emerging Market Debt Opportunities (FEMDX) seeks appreciably high total return. The fund invests the majority of its assets in emerging market debt securities. It may invest substantially all of its assets in debt securities rated below investment grade. The international bond mutual fund returned 8.12% in the last one year period.
The international bond mutual fund has an expense ratio of 1.00% compared to a category average of 1.19%.
Henderson Strategic Income A (HFAAX) invests in securities that provide income. These securities include junk bonds and debt instruments that are issued by domestic, international or emerging markets. A minimum of 40% of its assets is invested in foreign securities, issued from at least three countries. The international bond mutual fund returned 9.53% in the last one year period.
As of June 2013, this international bond mutual fund held 98 issues, with 3.42% of its total assets invested in Daily Mail&Gen Tst 5.75%
Templeton Global Bond A (TPINX) seeks capital and income growth along with current income. The fund invests most of its assets in bonds that are issued by domestic government and governments of different countries. A maximum of 25% of its assets is invested in junk bonds. The international bond mutual fund returned 7.64% in the last one year period.
The Fund Manager is Sonal Desai, who has managed this international bond mutual fund since 2011.
Goldman Sachs Global Income A (GSGIX) invests predominantly in fixed income securities issued by domestic and foreign companies. The fund also parks investments in swap and forward contracts. The international bond mutual fund is non-diversified and has returned 2.88% in the last one year period.
The international bond mutual fund has an expense ratio of 1.04%, compared to a category average of 1.08%.
Payden Global Low Duration (PYGSX) seeks capital protection along with total return. At least 65% of total assets are invested in debt securities that are of investment grade, including ones issued from emerging markets. A maximum of 35% is invested in junk bonds. The international bond mutual fund returned 2.62% in the last one year period.
The Fund Manager is Eric Hovey and he has managed this international bond mutual fund since 2013.
To view the Zacks Rank and past performance of all international bond 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 at http://www.zacks.com/funds.
More From Zacks.com
- Personal Investing Ideas & Strategies
- Finance Trading
- mutual funds