Top 5 Highest Yielding Zacks #1 Ranked High Yield Bond Mutual Funds
Investors with a reasonably high appetite for risk, in pursuit of significantly high income levels, would do well to consider high yield bonds. This category of fixed-income securities 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.
Mutual Fund | Sec 30 Day Yield |
Waddell & Reed High-Income A | 8.52% |
Legg Mason Western Asset High Yield Bond A | 8.27% |
Northern High Yield Fixed Income | 8.00% |
Lord Abbett High Yield A | 7.54% |
Federated High-Income Bond A | 7.40% |
Waddell & Reed High-Income A (UNHIX) invests the majority of its assets in a wide range of high yield debt instruments, the risk associated with which is in consonance with the fund’s objective. The fund purchases fixed-income securities without regard to their maturity period. This high yield mutual fund returned 7.68% over the last one year period.
The high yield mutual fund has a minimum initial investment of $500 and an expense ratio of 1.08% compared to a category average of 1.16%.
Legg Mason Western Asset High Yield Bond A (SAHYX) invests the majority of its assets in high yield bonds and related securities. Up to 35% of its assets may also be utilized to purchase sovereign debt issued by governments from emerging markets. This high yield mutual fund returned 3.65% over the last one year period.
Stephen A. Walsh is the fund manager and he has managed this high yield mutual fund since 2006.
Northern High Yield Fixed Income (NHFIX) invests a large proportion of its assets in corporate bonds rated below investment-grade and other fixed-income securities. The fund focuses on purchasing domestic debt securities. This high yield mutual fund returned 5.79% over the last one year period.
The high yield mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.86% compared to a category average of 1.16%.
Lord Abbett High Yield A (LHYAX) seeks high current income. The fund invests a large share of its assets in junk bonds, including those issued by companies and convertible securities. Not more than 20% of its assets are utilized to purchase foreign securities. This high yield mutual fund returned 5.94% over the last one year period.
As of March 2012, this high yield mutual fund held 456 issues, with 0.92% of its total assets invested in Ford Motor Credit Co 12%.
Federated High-Income Bond A (FHIIX) invests heavily in a wide range of junk bonds. These include domestic and foreign debt securities as well as those issued from emerging marketsThis high yield mutual fund returned 6.66% over the last one year period.
Mark E. Durbiano is the fund manager and he has managed this high yield mutual fund since 1986.
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.
Read the analyst report on UNHIX
Read the analyst report on SAHYX
Read the analyst report on NHFIX
Read the analyst report on LHYAX
Read the analyst report on FHIIX
More From Zacks.com
