What is High Yield Bond Mutual Funds?High-yield bond funds invest mainly in lower-quality bonds, which are riskier than those of higher-quality companies. These mutual funds typically offer higher yields than other types of funds. These funds are also more vulnerable to economic and credit risk.
High yield bond funds mainly invest in U.S. high-income debt securities where at least 65% or more of bond assets are not rated or are rated by a major rating agency such as Standard & Poor's or Moody's at the level of BB (considered speculative for taxable bonds) and below.
Best High Yield Bond Mutual Funds 2017Top 5 high yield bond mutual funds for 2017 are:
- Artisan High Income Fund (ARTFX)
- Fairholme Focused Income Fund (FOCIX)
- Fidelity Capital & Income Fund (FAGIX)
- Federated High-Yield Strategy Fund (FHYSX)
- Lord Abbett High Yield Fund (LHYAX)
Artisan High Income Fund (ARTFX)This Artisan High Income Fund has returned 13.78 percent over the past year, and 6.89 percent over the past three years. The fund manager is Bryan C. Krug. The annual expense fee is 1.03%. This fund is popular among investors with $2.2 billion of assets. This no load fund has a high yield of 6.03%.
The fund performance for the past 3 years are:
- Year 2017: 3.08% (YTD)
- Year 2016: 14.52%
- Year 2015: 0.99%
Fairholme Focused Income Fund (FOCIX)Fairholme Focused Income Fund has been one of the top 5 high yield bond mutual funds for a while. This best mutual fund has a high yield of 5.06%. This no load fund has a small net assets of $258 million. Morningstar has ranked this bond fund with 5 stars rating. You can invest in this fund with $10,000 of initial investment.
As best high yield bond mutual fund for 2017, this fund has returned 22.31 percent over the past year, and 9.80 percent over the past five years.
Fidelity Capital & Income Fund (FAGIX)As one of the top 5 high yield bond mutual funds for 2017, Fidelity Capital & Income Fund is managed by Mark Notkin since 2003. This mutual fund is not your typical high yield bond fund. It also invests in stocks or equities. This bond fund has $11.1 billion of assets. The current yield is 4.03%. Its expense fee is 0.74% per year.
Morningstar also ranks this best bond fund with 5 stars rating. In 2016, it has total return of 10.75%. This fixed income fund has returned 5.62% over the past 3 years, and 7.60% over the past 5 years.
Best Funds Performance in 2017
|No||Name||YTD Return||1 Year Return||3 Year Return|
|1||Artisan High Income Fund Investor Shares||3.78||13.78||6.89|
|2||Fairholme Focused Income Fund||-0.76||22.31||6.1|
|3||Fidelity Capital & Income Fund||4.31||12.7||5.62|
|4||Federated High-Yield Strategy Portfolio||2.92||11.95||5.49|
|5||Lord Abbett High Yield Fund Class A||3.31||14.09||5.47|