Investors willing to undertake a higher level of risk in pursuit of high income levels would do well to consider high yield bonds. This category generally represents corporate bonds with low ratings, often below investment grade. A significant amount of risk is therefore associated with these investments and mutual funds are the best option to invest in these instruments. By investing in a well diversified portfolio of such securities they successfully lower the associated risk for the investor.
Below we will share with you the 5 highest yielding Zacks #1 ranked high yield 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 high yield funds, investors can click here to see the complete list of funds.
Sec 30 Day Yield
Waddell & Reed High-Income
Thrivent High Yield A
Eaton Vance Income Fund of Boston A
Oppenheimer Champion Income A
Columbia High Yield Opportunity A
William M. Nelson is the fund manager and he has managed this high yield mutual fund since 2008.
Thrivent High Yield A (LBHYX) invests a large share of its assets in a wide range of high-yield debt securities with ratings equal to or below “BB” as per S&P or ‘Ba” as per Moody’s. This high yield mutual fund returned 5.88% over the last one year period.
The high yield mutual fund has a minimum initial investment of $1,000 and an expense ratio of 0.84% compared to a category average of 1.15%.
Eaton Vance Income Fund of Boston A (EVIBX) seeks high current income. The fund invests a large share of its assets in bonds issued for the purpose of highly leveraged transactions such as mergers and acquisitions. It may also invest in debt securities which generate income as well as derivatives such as futures and contracts. This high yield mutual fund returned 22.31% over the last one year period.
Michael W. Weilheimer is the fund manager and he has managed this high yield mutual fund since 1995.
Oppenheimer Champion Income A (OPCHX) invests heavily in a wide range of debt securities which provide high yields and related securities. The fund focuses on acquiring corporate debt securities of lower quality. This high yield mutual fund returned 4.86% over the last one year period.
As of May 2012, this high yield mutual fund held 271 issues, with 3.64% of its total assets invested in Oppenheimer Institutional Money Market E.
Columbia High Yield Opportunity A (COLHX) seeks total return. A majority of its assets are invested in high yield debt securities issued by domestic and foreign companies including companies from emerging markets. This high yield mutual fund returned 6.56% over the last one year period.
The high yield mutual fund has a minimum initial investment of $2000 and an expense ratio of 1.05% compared to a category average of 1.15%.
To view the Zacks Rank and past performance of all high yield 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.
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