3 Top-Ranked High-Yield Bond Funds to Secure Gains for Your Portfolio

High-yield bonds behave more like stocks than investment-grade bonds. These bonds have significant holdings in smaller companies, which are considered to have a weaker financial condition but benefit as the economy moves north.Although high-yield bonds are more exposed to credit risk, these have less exposure to interest rate risk, making them a differentiated source of return. Despite the headwinds faced during the Fed’s tightening of monetary policy, with indications coming in from the Fed that it might slow down its steep rate of hikes, these bonds are poised to grow.Below, we share with you three top-ranked high-yield bond mutual funds, namely American Funds High-income Trust AHITX, Manning & Napier High Yield Bond Series MNHYX and Virtus Newfleet High Yield Fund PHCHX. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.American Funds High-IncomeTrust invests most of its assets in high-yielding and low-quality debt securities of domestic and foreign issuers, which are rated Ba1/BB+ or below by nationally recognized rating organizations or other issues of equivalent quality based on the fund manager’s judgment. AHITX advisors also invest in corporate loan obligations.American Funds High-Income Trust has three-year annualized returns of 9.1%. As of the end of March 2025, AHITX held 64.2% of its net assets in miscellaneous bonds.Manning & Napier High Yield Bond Series fund invests most of its net assets in below investment grade and other financial instruments, such as derivative instruments, exchange-traded funds (ETFs), and bank loans, which have similar economic characteristics. MNHYX advisors may also consider investing in U.S. dollar-denominated fixed-income securities issued by U.S. and foreign corporations and governments, including those in emerging markets.Manning & Napier High Yield Bond Series fund has three-year annualized returns of 9.2%. MNHYX has an expense ratio of 0.90%.Virtus Newfleet High Yield Fund invests most of its net assets in high-yield, fixed-income securities that are rated below investment grade. PHCHX advisors aim to keep the fund's duration of the fund similar to its benchmark index, the Bloomberg U.S. High-Yield 2% Issuer Capped Bond Index.Virtus Newfleet High Yield Fund has three-year annualized returns of 9%. David L. Albrycht has been one of the fund managers of PHCHX since December 2011.To view the Zacks Rank and the past performance of all high-yield bond funds, investors can click here to see the complete list of high-yield bond funds.Want key mutual fund info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>Quantum Computing Stocks Set To SoarArtificial intelligence has already reshaped the investment landscape, and its convergence with quantum computing could lead to the most significant wealth-building opportunities of our time.Today, you have a chance to position your portfolio at the forefront of this technological revolution. In our urgent special report, Beyond AI: The Quantum Leap in Computing Power, you'll discover the little-known stocks we believe will win the quantum computing race and deliver massive gains to early investors.Access the Report Free Now >>View All Zacks #1 Ranked Mutual FundsWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (PHCHX): Fund Analysis Report Get Your Free (MNHYX): Fund Analysis Report Get Your Free (AHITX): Fund Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks