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High-yield bonds behave more like stocks than investment-grade bonds. These bonds have significant holdings in smaller companies and are considered to have a weaker financial condition but benefit as the economy moves north.
Although high-yield bonds are more exposed to credit risk, these have less exposure to interest rate risk, making them a differentiated source of return. Despite the headwinds faced due to the Fed’s monetary policy tightening, these bonds are poised to growonthe central bank’s indications that it might slow down its steep rate of hikes.
Neuberger Berman Floating Rate Income Fund invests in variable rate senior secured loans that are often rated below investment grade. The NFIAX advisor also invests its 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 4.9%. NFIAX has an expense ratio of 0.98% compared with the category average of 1.03%.
Fidelity Advisor Floating Rate Hi Inc Fund seeks a high level of current income by investing most of its assets in floating-rate loans and other floating-rate securities. FFRAX also invests its assets in securities of foreign and domestic issuers.
Fidelity Advisor Floating Rate Hi Inc Fund has three-year annualized returns of 5.9%. Chandler Perine has been one of the fund managers of FFRAX since September 2022.
Payden High Income Fund seeks high current income while providing for capital appreciation by investing primarily in a diversified portfolio of below investment grade bonds, commonly known as ''high yield bonds'' or ''junk bonds.'' PYHRX Advisors also invest in a diversified portfolio of higher-yielding corporate bonds, which generally yield an average of 4% to 6% over comparable maturity U.S. treasuries.
Payden High Income Fund has three-year annualized returns of 3.1%. As of April 2023, PYHRX had 1% of its assets invested in Baytex Energy Corp.
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3 High-Yield Bond Funds for Remarkable Returns
High-yield bonds behave more like stocks than investment-grade bonds. These bonds have significant holdings in smaller companies and are considered to have a weaker financial condition but benefit as the economy moves north.
Although high-yield bonds are more exposed to credit risk, these have less exposure to interest rate risk, making them a differentiated source of return. Despite the headwinds faced due to the Fed’s monetary policy tightening, these bonds are poised to growonthe central bank’s indications that it might slow down its steep rate of hikes.
Below, we share with you three top-ranked high-yield bond mutual funds, viz., Neuberger Berman Floating Rate Income Fund (NFIAX - Free Report) , Fidelity Advisor Floating Rate Hi Inc Fund (FFRAX - 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 that are often rated below investment grade. The NFIAX advisor also invests its 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 4.9%. NFIAX has an expense ratio of 0.98% compared with the category average of 1.03%.
Fidelity Advisor Floating Rate Hi Inc Fund seeks a high level of current income by investing most of its assets in floating-rate loans and other floating-rate securities. FFRAX also invests its assets in securities of foreign and domestic issuers.
Fidelity Advisor Floating Rate Hi Inc Fund has three-year annualized returns of 5.9%. Chandler Perine has been one of the fund managers of FFRAX since September 2022.
Payden High Income Fund seeks high current income while providing for capital appreciation by investing primarily in a diversified portfolio of below investment grade bonds, commonly known as ''high yield bonds'' or ''junk bonds.'' PYHRX Advisors also invest in a diversified portfolio of higher-yielding corporate bonds, which generally yield an average of 4% to 6% over comparable maturity U.S. treasuries.
Payden High Income Fund has three-year annualized returns of 3.1%. As of April 2023, PYHRX had 1% of its assets invested in Baytex Energy Corp.
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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