Top 5 Highest Yielding High Yield Bond Mutual Funds (June 2011)

Investors willing to undertake a reasonable amount 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.

Mutual Fund Sec Yield
MassMutual Premier High Yield A 9.58%
Transamerica Partners High Yield Bond A 9.56%
Delaware Pooled High Yield Bond A 8.16%
Touchstone High Yield A 8%
Waddell & Reed HIgh-Income A 7.61%

MassMutual Premier High Yield A (MPHAX) invests a large proportion of its assets in fixed-income securities of lower quality. The fund may also purchase other fixed-income securities such as convertible securities, preferred stocks, warrants and bank borrowings. The high yield mutual fund returned 18.33% over the last one year period.

Scott D. Roth is the fund manager and he has managed this high yield mutual fund since 2010.

Transamerica High Yield Bond (DVHYX) seeks a high level of current income. The fund invests in preferred stocks and high yield debt securities. The majority of the fund’s assets are used to purchase junk bonds and related securities. It utilizes an underlying fund to purchase these instruments. The high yield has a three year annualized return of 10.02%.

The high yield mutual fund has an expense ratio of 1.10% compared to a category average of 1.17%.

Delaware Pooled High-Yield Bond (DPHYX) invests the majority of its assets in high-yield fixed income securities. Not more than 25% of its assets may be utilized to purchase securities issued by companies domiciled abroad. The high yield mutual fund has a five year annualized return of 9.95%.

Chuck M. Devereux is the fund manager and she has managed this high yield mutual fund since 2007.

Touchstone High Yield A (THYAX) seeks significant income with capital growth as a secondary objective. The fund invests a large proportion of its assets in debt securities rated below investment grade. The fund focuses on acquiring high yield securities issued by companies from the U.S. The high yield mutual fund has a ten year annualized return of 7.66%.

As of March 2011, this high yield mutual fund held 180 issues, with 3.59% of its total assets invested in Touchstone Institutional Money Market.

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 returned 17.8% over the last one year period.

The high yield mutual fund has a minimum initial investment of $500 and an expense ratio of 1.09% compared to a category average of 1.17%.

To view the Zacks Rank and past performance of all high yield mutual funds, then click here.

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/mutualfunds.

About Zacks Investment Research 1767 Articles

Zacks Investment Research is one of the most highly regarded firms in the investment industry. In 1978 Zacks originated the concept of utilizing earnings estimates revisions to make profitable investment decisions. Zacks offers multiple investment products and services to help investors achieve superior returns.

Visit: Zacks.com

Be the first to comment

Leave a Reply

Your email address will not be published.


*