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By Cara Esser, CFA | 06-20-2014 11:00 AM

This Outperforming Income Fund Has Above-Average Yield

An experienced team manages this topnotch fund, which has returns beating 95% of its peers over the long term and a 6% yield during the past year.

Cara Esser: Eaton Vance Income Fund of Boston is a topnotch high-yield bond fund. Led by veteran manager, Michael Weilheimer, who has more than two decades of experience in the corporate-bond space, this fund has been a good performer over the long haul. The veteran team focuses on deep fundamental credit research, looking for securities with strong corporate balance sheets and good economic prospects. They also include a macro overlay where they're looking at market trends and valuations.

After suffering steep losses in 2008 largely due to a more aggressive portfolio positioning, the fund took a more defensive stance, shortening duration and raising credit quality. While this hurt the fund in 2012 and 2013's risk-led markets, the fund over the long haul has done quite well. During Weilheimer's 16-plus year tenure, the fund's 8% annualized return beat 95% of its high-yield bond peers.

For income-seeking investors, the fund's yield is higher than its average peer. Over the last 12 months, the fund paid an average yield of 6%. Currently, Weilheimer has positioned the portfolio more risky on the credit side adding to his stake in [CCC rated bonds], but though he has kept the duration shorter than its benchmark at less than 3 years.

Overall, this fund is managed by an experienced team and has outperformed over the long haul. This is a good fund for your high-yield allocation end of your portfolio.

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