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Newly Rated Junk Bond Fund's Relatively Smooth Ride

Principal High Yield Bond Fund earns a Bronze rating for its higher quality focus, sensible strategy, and some of the lowest fees in the peer group.


Brian Moriarty: Principal High Yield Bond Fund was rated for the first time in February and was given a Morningstar Analyst Rating of Bronze. This high-yield bond fund is distinguished by a sensible strategy that combines both top-down economic guidance and bottom up security selection. The top-down outlook guides the fund's risk framework, but it leaves plenty of room for the investment team to focus on their best ideas.

The investment team focuses on what they believe to be higher quality companies, looking for healthy cash flows and positive outlooks. This means the fund will occasionally have a lower yield than peers, but it has also resulted in a smoother ride for investors. The fund's volatility, as measured by standard deviation, has been consistently lower than peers since the managers took over in May 2009.

Brian Moriarty does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.