Grab These 3 High Yield Bond Funds For Solid Returns

0

High yield bonds behave more like stocks than investment grade bonds. These bonds hold large stakes in smaller companies, which are considered to be in a weaker financial position, but which benefit from the progress of the economy towards the north. Although high yield bonds are more exposed to credit risk, they are less exposed to interest rate risk, making them a differentiated source of return. Despite the headwinds encountered in the early months of the pandemic, demand for high yield has recovered since the Fed cut rates and the economy reopened. Improving economic activity has renewed the search for yield and, given the current scenario, these bonds are poised to grow.

Below, we share with you three top-ranked high-yield bond mutual funds, namely Manning & Napier High Yield Bond Series MNHYX, Fidelity Advisor Floating Rate High Income Fund Class A FFRAX and Fidelity Capital & Income Fund FAGIX. Everyone won a Zacks Mutual Fund Ranking #1 (Strong Buy) and is expected to outperform its peers going forward. Investors can click here to see the full list of funds.

Manning & Napier High Yield Bond Series invests the majority of its assets in bonds rated below investment grade and other financial instruments, primarily derivatives and ETFs, with economic characteristics similar to those of lower-grade securities. MNHYX may invest part of its assets in bank loans. The fund has returned 6.8% over the past three years.

As of December 2021, MNHYX had 15.8% of its assets invested in Total Misc Bonds.

Fidelity Advisor Floating Rate High Income Fund Class A seeks a high level of current income by investing the majority of its assets in loans and floating rate securities. FFRAX invests in companies that are in difficult or uncertain financial condition, using fundamental analysis of each issuer’s financial condition and industry position, as well as market and economic conditions. The fund has returned 3.8% over the past three years.

Eric Mollenhauer has been one of FFRAX’s fund managers since 2013.

Fidelity Capital & Income Fund invests in equities and debt securities, including defaulted securities, with an emphasis on lower quality debt securities. FAGIX invests in companies whose financial situation is difficult or uncertain using fundamental analysis. The fund has returned 8.5% over the past three years.

FAGIX has an expense ratio of 0.68% against a category average of 0.95%.

To view the Zacks ranking and past performance of all high yield bond funds, investors can click here to see the full list of high yield bond funds.

Want to get key mutual fund information straight to your inbox?

Zacks’ free fund newsletter will update you weekly on top news and analysis, as well as the top performing mutual funds. Get it for free >>

7 best stocks for the next 30 days

Just Released: Experts distill 7 elite stocks from the current Zacks No. 1 Ranking 220 Strong Buys list. They consider these tickers “most likely for early price increases.”

Since 1988, the full list has beaten the market more than 2 times with an average gain of +25.4% per year. So be sure to give your immediate attention to these 7 handpicked ones.

Discover them now >>

View All Zacks #1 Rated Mutual Funds

Click to get this free report

Get Your Free (FAGIX): Fund Analysis Report

Get Your Free (MNHYX): Fund Analysis Report

Get Your Free (FFRAX): Fund Analysis Report

To read this article on Zacks.com, click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Share.

Comments are closed.