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VIDEOTop 5 High-Yield Mutual Funds
By
Zacks Investment Research Jan 26, 2012 12:00 pm
These funds provide better returns than investments with higher ratings, including government and corporate bonds.
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Below we will share with you five top-rated high-yield mutual funds. Each has earned a Zacks No. 1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all high yield funds, click here.
1. American Century High Yield (ABHIX) seeks high current income with a secondary objective of capital appreciation. The fund utilizes the majority of its assets to purchase high-yield corporate bonds and income-generating convertible and preferred securities. The high-yield mutual fund has a five-year annualized return of 6.08%, a minimum initial investment of $2,500, and an expense ratio of 0.79% compared to a category average of 1.14%.
2. MassMutual Premier High Yield A (MPHAX) invests a large proportion of its assets in fixed-income securities with relatively lower ratings. The fund may also purchase convertible securities and preferred stocks and invest in warrants and bank borrowings. The average dollar weighted maturity period varies from four to 10 years. The high-yield mutual fund has a five year annualized return of 4.91%. Scott D. Roth is the fund manager, and she has managed this high yield mutual fund since 2010.
3. Columbia High Yield Bond A (INEAX) seeks high current income. The majority of the fund’s assets are utilized to purchase debt securities rated below investment grade. Not more than 25% of its assets are invested in foreign high-yield debt instruments. The high-yield mutual fund has a five-year annualized return of 3.76%. As of November 2011, this high-yield mutual fund held 299 issues, with 1.81% of its total assets invested in Ally Finl 8%.
4. Touchstone High Yield A (THYAX) 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 US. The fund aims for an average maturity period varying form six to 10 years. The high-yield mutual fund has a five-year annualized return of 6.9%, a minimum initial investment of $2,500, and an expense ratio of 1.05% compared to a category average of 1.14%.
5. Fidelity Focused High Income (FHIFX) seeks high income. The fund primarily invests in income-generating debt securities. The fund may invest in securities that do not yield income, such as common stocks. The high-yield mutual fund has a five-year annualized return of 6.03%.
Matt Conti is the fund manager, and he has managed this high-yield mutual fund since 2004.
Editor's Note: To read this article on Zacks.com click here.
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No positions in stocks mentioned.
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