Slideshow 10 Biggest High-Yield Bond Funds

Published
  • February 02 2015, 7:10am EST
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10 Biggest High-Yield Bond Funds

High-yield bonds can be a big help for clients looking to diversify their portfolios. These speculative-grade, or "junk bond," investments behave more like equities. Yet as fixed-income they enjoy a higher spot on an issuer's capital structure and, consequently, a level of safety that stocks don't offer.

Of course, many advisors are concerned that investors consider them as safe as other fixed-income securities while they can be far more volatile than Treasuries and in fact, incur substantial losses.

High-yield defies broad description because it covers a wide range of industries and various levels of risk (BB is quite different than CCC). But as a market, high-yield returned about 2.4% overall in 2014, according to the BofA Merrill Lynch U.S. High Yield Master II Index. That's lower than its historical norm of about 5%.

In an illustration of just how risky this market can be, returns fell and then climbed so drastically in December that investors could have made almost all of that annual profit (2.1%) in just the last two weeks of the year. Moreover, this move came in the midst of headline-grabbing cash outflows. The six-month bleed was partly attributable to worries over the drop in oil prices, since energy companies make up a sizable portion of this market. Investors reportedly pulled $523 million out of the market in just one week (ending Jan. 21) last month. -- Lee Conrad with reporting from Andrew Pavia

For clients who are willing to take on a bit more risk, here we present the 10 largest high-yield funds, along with performance metrics for each.

Click through or view a single-page version here.

Data is from Morningstar as of Jan 26.

10. MainStay High Yield Corporate Bond Fund

High-yield funds are losing cash, yet still earning a profit. For clients willing to take on extra risk, here are the 10 largest funds in this category, along with performance metrics for each.

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9. Ivy High Income Fund

High-yield funds are losing cash, yet still earning a profit. For clients willing to take on extra risk, here are the 10 largest funds in this category, along with performance metrics for each.

8. Lord Abbett Bond Debenture Fund

High-yield funds are losing cash, yet still earning a profit. For clients willing to take on extra risk, here are the 10 largest funds in this category, along with performance metrics for each.

7. T. Rowe Price High Yield Fund

High-yield funds are losing cash, yet still earning a profit. For clients willing to take on extra risk, here are the 10 largest funds in this category, along with performance metrics for each.

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6. JPMorgan High Yield Fund

High-yield funds are losing cash, yet still earning a profit. For clients willing to take on extra risk, here are the 10 largest funds in this category, along with performance metrics for each.

5. PIMCO High Yield

High-yield funds are losing cash, yet still earning a profit. For clients willing to take on extra risk, here are the 10 largest funds in this category, along with performance metrics for each.

4. Fidelity® Capital and Income Fund

High-yield funds are losing cash, yet still earning a profit. For clients willing to take on extra risk, here are the 10 largest funds in this category, along with performance metrics for each.

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3. BlackRock High Yield Bond Portfolio

High-yield funds are losing cash, yet still earning a profit. For clients willing to take on extra risk, here are the 10 largest funds in this category, along with performance metrics for each.

2. Vanguard High Yield Corporate Fund

High-yield funds are losing cash, yet still earning a profit. For clients willing to take on extra risk, here are the 10 largest funds in this category, along with performance metrics for each.

1. American Funds American Hi-Inc Tr A

High-yield funds are losing cash, yet still earning a profit. For clients willing to take on extra risk, here are the 10 largest funds in this category, along with performance metrics for each.