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3 High-Yield Bond Funds to Buy for Stellar Returns
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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 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.
T. Rowe Price Floating Rate Adv invests most of its assets in floating-rate loans and floating-rate debt securities, where in floating-rate loans represent amounts borrowed by companies or other entities from banks and other lenders. PAFRX advisors invest mostly in funds that are below investment grade or junk or unrated securities.
T. Rowe Price Floating Rate Adv has three-year annualized returns of 4.8%. PAFRX has an expense ratio of 0.97% compared with the category average of 1.03%.
Manning & Napier High Yield Bond Fund invests the majority of its net assets in investment-grade bonds, derivative instruments and exchange-traded funds. MNHYX also invests a portion of its net assets in bank loans, which are, generally, non-investment grade floating rate investments.
Manning & Napier High Yield Bond Fund has three-year annualized returns of 4.5%. Scott Friedman has been one of the fund managers of MNHYX since February 2021.
Fidelity Capital & Income Fund seeks to provide income and capital growth. FAGIX invests in equity and debt securities, including defaulted securities, with an emphasis on lower-quality debt securities.
Fidelity Capital & Income Fund has three-year annualized returns of 4%. As of the end of July 2023, FAGIX held 1.4% of its net assets in Ally Financial Inc.
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3 High-Yield Bond Funds to Buy for Stellar Returns
High-yield bonds are debt securities issued by corporations that can provide a higher yield than investment-grade bonds but are 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.,T. Rowe Price Floating Rate Adv (PAFRX - Free Report) , Manning & Napier High Yield BondFund (MNHYX - Free Report) and Fidelity Capital & Income Fund (FAGIX - 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.
T. Rowe Price Floating Rate Adv invests most of its assets in floating-rate loans and floating-rate debt securities, where in floating-rate loans represent amounts borrowed by companies or other entities from banks and other lenders. PAFRX advisors invest mostly in funds that are below investment grade or junk or unrated securities.
T. Rowe Price Floating Rate Adv has three-year annualized returns of 4.8%. PAFRX has an expense ratio of 0.97% compared with the category average of 1.03%.
Manning & Napier High Yield Bond Fund invests the majority of its net assets in investment-grade bonds, derivative instruments and exchange-traded funds. MNHYX also invests a portion of its net assets in bank loans, which are, generally, non-investment grade floating rate investments.
Manning & Napier High Yield Bond Fund has three-year annualized returns of 4.5%. Scott Friedman has been one of the fund managers of MNHYX since February 2021.
Fidelity Capital & Income Fund seeks to provide income and capital growth. FAGIX invests in equity and debt securities, including defaulted securities, with an emphasis on lower-quality debt securities.
Fidelity Capital & Income Fund has three-year annualized returns of 4%. As of the end of July 2023, FAGIX held 1.4% of its net assets in Ally Financial Inc.
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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