Grab These 3 High-Yield Bond Funds for Significant Returns

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. Though 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 headwinds faced in the early months of the pandemic, demand for high yield has recovered since the Fed’s rate cut and the reopening of the economy. The improving economic activity 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 Neuberger Berman Floating Rate Income NFIAX, Buffalo High Yield BUFHX and Virtus Seix Floating Rate High Income SFRAX. 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.Neuberger Berman Floating Rate Income invests most of its net assets in floating-rate securities, loans and other investments in companies that provide investment exposure to such floating-rate securities. NFIAX advisors choose to invest in floating-rate, senior-secured loans and below-investment-grade securities issued in U.S. dollars by U.S. and foreign issuers.Neuberger Berman Floating Rate Income has three-year annualized returns of 9.3%. As of April 2025, NFIAX held 73.4% of its net assets in Total Miscellaneous Bonds.Buffalo High Yield invests most of its assets in higher-yielding, higher-risk debt securities rated below investment grade by the major rating agencies, preferably with intermediate-term maturities. BUFHX advisors also invest a small portion of their net assets in investment-grade debt securities, U.S. Treasury Securities, money market funds and equity investments, including dividend-paying stocks, convertible stocks and preferred stocks.Buffalo High Yield has three-year annualized returns of 9.7%. BUFHX has an expense ratio of 1%.Virtus Seix Floating Rate High Income invests most of its assets, along with borrowings, if any, in a portfolio of first- and second-lien senior floating-rate loans and other floating-rate debt instruments. SFRAX advisors also invest a small portion of the net assets in senior loans made to non-U.S. borrowers.Virtus Seix Floating Rate High Income has three-year annualized returns of 8.6%. George Goudelias has been the fund manager of SFRAX since May 2006.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 >>One Big Gain, Every Trading DayTo help you take full advantage of this market, you’re invited to access every stock recommendation in all our private portfolios - for just $1.Zacks private portfolio services that closed 256 double and triple-digit winners in 2024 alone. That’s about one big gain every day the market was open. Of course, not all our picks are winners, but members have seen recent gains as high as +627% +1,340%, and +1,708%.Imagine how much you could profit with a steady stream of real-time picks from all our services that cover a number of strategies to suit a variety of investing and trading styles.See Stocks 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 (SFRAX): Fund Analysis Report Get Your Free (NFIAX): Fund Analysis Report Get Your Free (BUFHX): 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