Top 5 Zacks#1 Ranked High Yield Mutual Funds - Highest Yielding Zacks #1 Ranked Funds
March 21 2012 - 12:20PM
Zacks
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 5 top rated 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.
Delaware High-Yield Opportunities A (DHOAX)
invests a large proportion of its assets in corporate bonds rated
below investment-grade by renowned ratings firms such as Standard
& Poors. The fund may also purchase unrated securities of
similar quality. The high yield mutual fund has a five year
annualized return of 6.63%.
The high yield mutual fund has a minimum initial investment of
$1,000 and an expense ratio of 1.11% compared to a category average
of 1.16%.
American Century High-Yield (ABHIX) seeks high
current income with a secondary objective of capital appreciation.
The fund utilizes the majority of its assets to purchase high yield
corporate bonds and income generating convertible and preferred
securities. The high yield mutual fund has a five year annualized
return of 6.78%.
G. David MacEwen is the fund manager and he has managed this
high yield mutual fund since 2008.
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. The high yield
mutual fund has a five year annualized return of 7.27%.
As of December 2011, this high yield mutual fund held 209 issues,
with 2.29% of its total assets invested in Laureate Educ 144A
10.25%.
T. Rowe Price High-Yield (PRHYX) seeks
high current income. The fund invests a large proportion of its
assets in a wide range of high yield corporate bonds, preferred
stocks and convertible securities. The high yield mutual fund has a
five year annualized return of 7.08%.
The high yield mutual fund has a minimum initial investment of
$2,500 and an expense ratio of 0.74% compared to a category average
of 1.16%.
Vanguard High-Yield Corporate (VWEHX) invests
the majority of its assets in corporate bonds assigned the lowest
investment grade rating by a renowned bond rating agency. Up to 20%
of its assets may be utilized to hold securities rated below
investment grade. The high yield mutual fund has a five year
annualized return of 6.66%.
Michael L. Hong is the fund manager and he has managed this high
yield mutual fund since 2008.
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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