High yield securities are the preferred option for investors who have a reasonable appetite for risk and who are willing to forgo equity growth for current income. This category of securities comprise of corporate bonds of low quality, convertible securities and preferred stock, all of which carry a significant amount of risk. Mutual funds are a prudent method to invest in this class of funds as they significantly reduce the risk involved by holding a well-diversified portfolio. Such funds may also seek capital appreciation as a secondary objective.
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.
|Mutual Fund||Sec 30 Day Yield|
|Guggenheim High Yield A||6.32%|
|T. Rowe Price High-Yield||6.15%|
|Lord Abbett High Yield A||6.06%|
|AllianzGI High Yield Bond Administrative||5.51%|
|JHancock3 Core High Yield A||5.46%|
Guggenheim High Yield A (SIHAX) invests the majority of its assets in a wide range of debt securities with high risk and providing high returns. These securities should not be among the top four long-term rating categories as designated by a Nationally Recognized Statistical Rating Organization (:NRSRO). The high yield mutual fund returned 9.29% over the last one year period.
B. Scott Minerd is the fund manager and he has managed this high yield mutual fund since 2012.
T. Rowe Price High-Yield (PRHYX) seeks high current income. The fund invests the majority of its assets in a wide range of high yield corporate bonds, preferred stocks and convertible securities. The average maturity range of the portfolio is between 5 to 10 years. The high yield mutual fund returned 8.75% over the last one year period.
The high yield mutual fund has an expense ratio of 0.74% compared to a category average of 1.10%.
Lord Abbett High Yield A (LHYAX) invests a large proportion of its assets in corporate bonds rated below investment-grade and convertible securities. A maximum of 20% of its assets are invested in foreign securities which are internationally traded. This high yield mutual fund returned 9.40% over the last one year period.
Steven F. Rocco is the fund manager and he has managed this high yield mutual fund since 2010.
AllianzGI High Yield Bond Administrative (AYBVX) seeks growth in capital and current income. A large share of its assets is invested in junk bonds. It also invests in a wide range of securities which provide high yield. The high yield mutual fund returned 8.32% over the last one year period.
As of September 2013, this high yield mutual fund held 140 issues, with 1.35% of its total assets invested in Tenet Healthcare 144A 8.125%
JHancock3 Core High Yield A (JYIAX) invests a large portion of its assets in corporate debt securities. A maximum of 30% of its assets are invested in debt securities which are issued from abroad, including emerging markets. This high yield mutual fund returned 8.07% over the last one year period.
The high yield mutual fund has an expense ratio of 1.18% compared to a category average of 1.10%.
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