These Are The Top Ten High-Yield Bond Funds

June
1, 2021

4 min read

This story originally appeared on ValueWalk

High-yield bonds offer a higher interest rate than investment-grade bonds because the former have lower credit ratings. Moreover, these bonds get more attractive as treasury yields drop. However, high-yield bonds carry high default risk. You can lower this risk if you invest in these bonds through bond funds. To help you select, detailed below are the top ten high-yield bond funds.

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Top Ten High-Yield Bond Funds

To rank the top ten high-yield bond funds, we have used their last one year return. We have referred to U.S. News for the return data. Following are the top ten high-yield bond funds:

10. Catalyst/SMH High Income Fund (HIIFX, 30%)

HIIFX normally invests in a non-diversified group of low-quality, high yield corporate bonds and convertible securities. This fund has earned a return of 11.48% in the last five years and 6.32% in the last three years. It has total assets of $23.63 million and its net expense ratio is 1.48. HIIFX’s top two holdings are L Brands Inc 6.75% and Pitney Bowes Inc. 4.62%.

9. PIA High Yield Fund (PHYSX, 31%)

PHYSX usually invests in domestic and foreign high-yield instruments, including forward commitments, bonds, preferred stocks, convertible securities and more. This fund has earned a return of 7.59% in the last five years and 6.18% in the last three years. It has total assets of $66.63 million and its net expense ratio is 0.86. PHYSX’s top two holdings are Fidelity® Inv Mm Fds Government I and Powerteam Services Llc 9.033%.

8. Barings Global Credit Income Opps Fund (BXIAX, 31%)

BXIAX normally invests in below investment grade high-yield debt instruments from North American and Western European corporate issuers. This fund has earned a return of 6.73% in the last five years and 4.37% in the last three years. It has total assets of $182.69 million and its net expense ratio is 1.2. BXIAX’s top two holdings are Global Aircraft Leasing Co Ltd 6.5% and TDC 7.000% Senior Subordinated Note.

7. Artisan High Income Fund (APDFX, 31%)

APDFX, during normal times, generally invests in instruments that are rated below investment grade. This fund has earned a return of 9.39% in the last five years and 8.07% in the last three years. It has total assets of $6.17 billion and its net expense ratio is 0.82. APDFX’s top two holdings are Future On 10 Year US Treasury Note and General Electric Company 6.75%.

6. Westwood High Income Fund (WSDAX, 32%)

WSDAX invests in a range of income-producing securities, including debt and equity securities in the U.S., as well as in other parts of the world. This fund has earned a return of 7.31% in the last five years and 8.66% in the last three years. It has total assets of $85.61 million and its net expense ratio is 0.48. WSDAX’s top two holdings are Community Health Systems Incorporated 6.62% and Ares Capital Corporation 3.88%.

5. Pioneer Global High Yield Fund (PGHYX, 33%)

PGHYX primarily invests in below investment grade (high-yield) debt securities, as well as in preference shares of U.S. and non-U.S. issuers. This fund has earned a return of 6.39% in the last five years and 3.96% in the last three years. It has total assets of $238.93 million and its net expense ratio is 1.14. PGHYX’s top three holdings are United States Treasury Bills 0%, Ford Motor Credit Company LLC 4.12% and Metinvest B.V. 7.75%.

4. Mesirow Financial High Yield Fund (MFHIX, 34%)

MFHIX usually invests in high yield instruments and in instruments with similar economic characteristics. This fund has earned a return of 13.8% in the last six months. It has total assets of $64.56 million and its net expense ratio is 0.75. MFHIX’s top three holdings are Welltec A/S 9.5%, Cooper-Standard Automotive Inc. 5.62% and CSI Compressco LP 7.5%.

3. American Beacon SiM High Yld Opps Fund (SHOAX, 37%)

SHOAX puts money in non-investment grade securities and/or financial instruments offering exposure to such securities. This fund has earned a return of 7.73% in the last five years and 6.76% in the last three years. It has total assets of $1.29 billion and its net expense ratio is 1.15. SHOAX’s top two holdings are U.S. Government Money Market Average and Berry Petroleum Company LLC 7%.

2. Fidelity Advisor® High Income Advtg Fund (FAHDX, 38%)

FAHDX normally invests in income-producing debt securities, convertible securities, and preferred stocks. This fund has earned a return of 9.34% in the last five years and 8.24% in the last three years. It has total assets of $1.79 billion and its net expense ratio is 1. FAHDX’s top two holdings are Fidelity Revere Str Tr and Ally Financial Inc. 8%.

1. Fidelity® Capital & Income Fund (FAGIX, 39%)

FAGIX invests in equity and debt securities, including defaulted securities, especially lower-quality debt securities. This fund has earned a return of 9.55% in the last five years and 8.95% in the last three years. It has total assets of $14.05 billion and its net expense ratio is 0.67. FAGIX’s top three holdings are Fidelity Revere Str Tr, Ally Financial Inc. 8% and Penn National Gaming.