Looking for a Better Way to Boost Your Returns! Consider investing in the best high-yield bond funds instead of keeping your money in low-interest savings accounts. These funds can help you grow your money with relatively low risk, providing a steady income and potential solid gains. With so many options available, finding the right one can be overwhelming. That’s where we come in. This article identifies the 11 best high-yield bond funds to help you:

• Earn higher returns with controlled risk.
• Diversify your investments for better growth.
• Make confident, informed choices.

Get ready to enhance your investment strategy with the best high-yield bond funds. Let’s explore how you can start building your wealth today!

List of Top High-Yield Bond Funds To Buy

High-yield bond funds offer investors the potential for higher returns by investing in bonds rated below investment grade, often called junk bonds. These funds provide an attractive income stream, balancing higher risk with the prospect of substantial yield. Check the list of the 11 best high-yield bond funds given below:

1. Vanguard High Yield Bond Fund

Vanguard High-Yield Corporate Fund (VWEHX) invests primarily in medium—and lower-quality corporate bonds, often called junk bonds. The fund aims to provide higher returns by focusing on bonds below investment grade. With approximately 882 different bonds in its portfolio, VWEHX has a yield of 6.15% and an expense ratio of 0.22%.

This fund suits investors seeking exposure to high-yield corporate debt, balancing potential risk with the prospect of attractive returns.

2. iShares iBoxx High Yield Bond Funds

iShares iBoxx $ High Yield Corporate Bond ETF (HYG) is a prominent ETF that tracks an index of U.S. high-yield corporate bonds. As of April 2024, it holds around 1,245 bonds with a weighted average maturity of approximately four years. The fund offers a yield of 5.8% and has an expense ratio of 0.49%.

HYG is popular among investors looking for liquidity and diversification in the high-yield bond sector, making it a solid choice for those seeking income through corporate debt.

3. JPMorgan BetaBuilders High Yield Bond Fund

JPMorgan BetaBuilders USD High Yield Corporate Bond ETF (BBHY) seeks to replicate the performance of an index composed of U.S. high-yield corporate bonds. With over 1,476 bonds in its portfolio, BBHY offers a yield of 6.65% and a low expense ratio of 0.15%.

This ETF is designed for investors looking for a cost-effective way to gain exposure to the high-yield bond market while maintaining a diversified portfolio.

4. SPDR Portfolio High Yield Bond ETF

SPDR Portfolio High Yield Bond ETF (SPHY) aims to match the performance of a high-yield bond index that includes U.S. high-yield bonds. The fund consists of bonds with at least one year to maturity and a minimum outstanding amount of $250 million.

SPHY has a yield of 8.0% and a meagre expense ratio of 0.05%, making it an attractive option for investors seeking high income with minimal costs.

5. VanEck High Yield Bond Fund

VanEck High Yield Muni ETF (HYD) focuses on the U.S. high-yield long-term tax-exempt bond market. The fund’s bonds are generally exempt from federal income taxes, which results in a lower yield of 4.26% compared to taxable funds.

With an expense ratio of 0.32%, HYD suits investors looking for tax-efficient income through municipal bonds while still gaining exposure to high-yield investments.

6. American High-Income High Yield Bond Fund

American Funds American High-Income Trust Class F-1 (AHTFX) seeks to provide a high level of current income with a secondary objective of capital appreciation. As of May 2024, AHTFX has a yield of 6.46% and an expense ratio of 0.73%.

The fund’s effective duration is approximately 2.99 years, indicating a moderate sensitivity to interest rate changes. With total assets of around $20 billion, it is well-positioned for investors seeking reliable income through high-yield investments.

7. Fidelity Floating Rate High Yield Bond Fund

Fidelity Floating Rate High Income Fund (FFRHX) focuses on floating-rate debt securities, primarily high-yield corporate bonds. This strategy helps mitigate interest rate risk, making it an attractive option for investors concerned about rising rates.

With a yield of approximately 8.64% and an expense ratio of 0.72%, the fund is suitable for income-focused investors looking for a diversified approach to high-yield bonds.

8. American Funds Emerging Markets High Yield Bond Fund

American Funds Emerging Markets Bond Fund Class F-1 (EBNEX) invests in bonds issued by governments and corporations in emerging markets. It aims to provide high income through exposure to high-yield debt in developing economies.

EBNEX yields around 7.27%(July 2024) and an expense ratio of 0.94%. It is suitable for investors looking to enhance their income through international exposure while accepting the inherent risks of emerging markets.

9. T. Rowe Price High Yield Bond Fund

T. Rowe Price Credit Opportunities Fund (PRCPX) focuses on a diversified portfolio of high-yield corporate bonds and other credit instruments. With a yield of approximately 7% and an expense ratio of 0.81%, PRCPX is designed for investors seeking a blend of income and capital appreciation.

The fund’s active management approach allows it to adapt to changing market conditions, making it suitable for those looking for a more dynamic investment strategy in the high-yield space.

10. American Century High-Income High Yield Bond Funds

American Century High Income Fund Investor Class (AHIVX) primarily invests in high-yield corporate bonds to provide high current income. With a yield of about 6.67% and an expense ratio of 0.79%, AHIVX is ideal for investors who prioritise income while being aware of the risks associated with high-yield securities.

The fund’s diversified approach helps mitigate risks, making it a solid choice for those seeking reliable income from high-yield investments.

11. Northern Multi-Manager High Yield Bond Fund

Northern Multi-Manager High Yield Opportunity Fund (NMHYX) utilises a multi-manager approach to invest in high-yield bonds. This bond aims to enhance returns through diversification and expert management.

With a yield of approximately 7.2% and an expense ratio of 0.68%, NMHYX suits investors looking for a professionally managed option in the high-yield bond market.

Also Read: Best ESG Mutual Funds To Invest In 2024

The Final Words

Investing in high-yield bond funds can earn higher returns than traditional savings accounts. By carefully selecting from the best high-yield bond fund, you can achieve a steady income and diversify your investments while managing risk. Whether you seek tax-efficient income, international exposure, or a low-cost option, a high-yield bond fund can match your financial goals.

Take the time to review these top high-yield funds and consider how they fit into your investment strategy. Start growing your wealth today by making informed decisions that align with your needs and risk tolerance.

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