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High-yield bonds are debt securities issued by corporations that can provide a higher yield than investment-grade bonds, but are also riskier investments. These corporate bonds represent debt issued by a firm with the promise to pay interest and return the principal on maturity. Junk bonds are issued by companies with poorer credit quality.
They carry lower credit ratings from the leading credit agencies, usually Ba1 or lower by Moody’s or BB+ or lower by Standard & Poor's or Fitch. These bonds have significant holdings in smaller companies, which are considered to have a weaker financial condition but benefit as the economy moves north. Though high-yield bonds are more exposed to credit risk, these have less exposure to interest rate risk, making them a differentiated source of return.
Below, we share with you three top-ranked high-yield bond mutual funds, viz., Neuberger Berman Floating Rate Income Fund (NFIAX - Free Report) , Vanguard High Yield Corporate Fund(VWEHX - Free Report) and Payden High Income Fund (PYHRX - Free Report) .Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.
Neuberger Berman Floating Rate Income Fund invests in variable rate senior secured loans issued in dollars by companies, partnerships, and other business organizations in the United States and internationally that are often rated below investment grade. The NFIAX advisor also invests the fund’s assets in variable rate instruments, including loans and investment firms that provide exposure to such securities.
Neuberger Berman Floating Rate Income Fund has three-year annualized returns of 8%. NFIAX has an expense ratio of 0.97% compared with the category average of 1.03%.
Vanguard High Yield Corporate Fund seeks to generate a high level of interest income by investing in high-yield corporate bonds and high-yield bonds with credit ratings of B or higher. VWEHX declares a dividend daily and pays out on the first business day of each month, while capital gains are distributed in December.
Vanguard High Yield Corporate Fund has three-year annualized returns of 4.6%. Elizabeth H. Shortsleeve has been one of the fund managers of VWEHX since August 2022.
Payden High Income Fund seeks to achieve capital appreciation by investing in a diverse portfolio of assets with credit ratings below investment grade. PYHRX pays out monthly dividends to investors and yearly capital gains.
Payden High Income Fund has three-year annualized returns of 7.7%. As of October 2022, PYHRX had0.8% of its assets invested in INTL PETROLEUM.
To view the Zacks Rank and the past performance of all high-yield bond funds, investors can click here to see the complete list of high-yield bond funds.
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High-yield bonds are debt securities issued by corporations that can provide a higher yield than investment-grade bonds, but are also riskier investments. These corporate bonds represent debt issued by a firm with the promise to pay interest and return the principal on maturity. Junk bonds are issued by companies with poorer credit quality.
They carry lower credit ratings from the leading credit agencies, usually Ba1 or lower by Moody’s or BB+ or lower by Standard & Poor's or Fitch. These bonds have significant holdings in smaller companies, which are considered to have a weaker financial condition but benefit as the economy moves north. Though high-yield bonds are more exposed to credit risk, these have less exposure to interest rate risk, making them a differentiated source of return.
Neuberger Berman Floating Rate Income Fund invests in variable rate senior secured loans issued in dollars by companies, partnerships, and other business organizations in the United States and internationally that are often rated below investment grade. The NFIAX advisor also invests the fund’s assets in variable rate instruments, including loans and investment firms that provide exposure to such securities.
Neuberger Berman Floating Rate Income Fund has three-year annualized returns of 8%. NFIAX has an expense ratio of 0.97% compared with the category average of 1.03%.
Vanguard High Yield Corporate Fund seeks to generate a high level of interest income by investing in high-yield corporate bonds and high-yield bonds with credit ratings of B or higher. VWEHX declares a dividend daily and pays out on the first business day of each month, while capital gains are distributed in December.
Vanguard High Yield Corporate Fund has three-year annualized returns of 4.6%. Elizabeth H. Shortsleeve has been one of the fund managers of VWEHX since August 2022.
Payden High Income Fund seeks to achieve capital appreciation by investing in a diverse portfolio of assets with credit ratings below investment grade. PYHRX pays out monthly dividend to investors and yearly capital gains.
Payden High Income Fund has three-year annualized returns of 7.7%. As of October 2022, PYHRX had 0.8% of its assets invested in INTL PETROLEUM.
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3 High-Yield Bond Funds for Remarkable Returns
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