Top 5 Zacks #1 Ranked High Yield Mutual Funds - Best of Funds
August 17 2012 - 11:19AM
Zacks
Investing in high yield securities needs an above average
appetite for risk as the probability of default is the highest in
these securities. These lower rated securities carry high coupon
yields to compensate investors for the associated risk. However,
they can maximize total returns by generating high interest income
and capital appreciation over the long term. Mutual funds investing
in these securities significantly reduce the associated risk
through diversification and should be a part of the portfolio of
every investor looking at maximum returns.
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.
Virtus High-Yield A (PHCHX) fund invests the majority of
its assets in fixed income instruments which generate high yields.
The maturity period of the fund is identical to that of its
benchmark the Barclay’s Capital U.S. High Yield 2% Issuer Capped
Index. The high yield mutual fund returned 7.78% over the last one
year period.
Kyle A. Jennings is the fund manager and he has managed this
high yield mutual fund since 2011.
Columbia High Yield Bond A (INEAX) seeks high current
income. A large share of the fund’s assets is utilized to purchase
debt securities rated below investment grade. Not more than 25% of
its assets are utilized to purchase foreign high-yield debt
securities. This high yield mutual fund returned 8.41% over the
last one year period.
The high yield mutual fund has a minimum initial investment of
$2,000 and an expense ratio of 1.06% compared to a category average
of 1.13%.
MassMutual Premier High Yield A (MPHAX) invests the
majority of its assets in domestic fixed income securities with
relatively lower ratings. These include corporate bonds, asset
backed instruments and securities issued by the U.S. government or
its agencies. This high yield mutual fund returned 8.54% over the
last one year period.
Scott D. Roth is the fund manager and he has managed this high
yield mutual fund since 2010.
Thrivent High Yield Fund A (LBHYX) seeks high current
income. The fund 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. It may also purchase
notes, debentures and preferred stocks. This high yield mutual fund
returned 8.44% over the last one year period.
As of May 2012, this high yield mutual fund held 265 issues,
with 1.13% of its total assets invested in Sprint Nextel 144A
9%.
Vanguard High-Yield Corporate (VWEHX) invests the
majority of its assets in a wide range of corporate bonds which are
rated medium or low in terms of credit quality. These bonds usually
have medium or short term maturity periods. This high yield mutual
fund returned 9.54% over the last one year period.
The high yield mutual fund has a minimum initial investment of
$3,000 and an expense ratio of 0.23% compared to a category average
of 1.13%.
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.
View All Zacks #1 Ranked Mutual Funds
(INEAX): ETF Research Reports
(LBHYX): ETF Research Reports
(MPHAX): ETF Research Reports
(PHCHX): ETF Research Reports
(VWEHX): ETF Research Reports
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