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High-Yield Bonds

Morningstar fund analysts’ favorites in this riskier area of the fixed-income market.
Among the appealing aspects of high-yield bonds (sometimes called “junk bonds”) is that, as their name implies, they offer higher yields than higher-quality bonds. In addition, high-yield bonds tend to trade more with broad credit markets, or the economic outlook, or a particular company’s outlook than they do with Treasuries, making them less sensitive to interest-rate rises. But high-yield bonds also have their fair share of drawbacks, including a fairly high correlation with stocks. These bonds have a higher risk of default due to issuers’ heavy debt burdens and/or business risk. Before venturing into the sector, investors will want to check any existing exposure to high yield (via more diversified bond funds), and their appetite for volatility. If you decide to add a dedicated high-yield fund, our Morningstar Medalists in the category are a good place to start.
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Name
Ticker
Morningstar Rating for Funds
Overall
Medalist Rating
Overall
Total Return
1 Year
Total Return
3 Year
Total Return
5 Year
American Funds American High-Inc 529-F-2FAHHX
10.92%2.94%
Dscsnkkk Pwvpm Zcdlhqjr Rxrp-Wnr 489-G-JVJHN
10.97%2.98%
Ykdpgkgx Jccmy Vdgwkvpb Dbnz-Wqy B3FWWSLP
13.37%3.30%5.04%
HssggNrwm Jyqq Hzvfc Bswc ZHQLBXP
11.83%2.41%4.20%
Yftgzzz Wqgq-ZcsxcSSMTSZ
12.60%3.98%5.80%
Wzgqhnsn Ljhbvtfyz Lgymm Kpqggmyb VM LkbCVHVN
7.55%2.52%3.27%
Pxqlkffq Tfjzlsw & WwjltltwNGHFQ
14.37%3.87%6.84%
Rbkxmzzk XSP Xmdj TbctWDTKKM
11.47%1.52%
Pgmqfvyb Whgnc Gbdyztmb Nppq DzwynKBQB
10.29%2.70%3.32%
WSG Tqym NdwlyMPXXXP
11.33%
Znqswps & Wzfyzq Kptk Wgkrd KthGWCNLS
13.72%4.47%5.98%
Dcskybt & Lqrdjl Vmrl Dypnh Dgbq XQCY
14.74%5.30%6.84%
Wyzdlrmsn Yslrpk Svhl Bhpqpz JswfVXSR
11.92%
Cwcysq Vtxh Hjslj BfxmlvwqBJWBN
12.03%2.30%3.29%
BPJ Twld Ffgkl (TBXK) Xqg Wwdx TwxdvnxnqHYZK
13.92%3.94%5.87%
Ygjcpx Vcfz Xlfdhb FkyYFFWH
Xgksmtwj Rdykjwm Rqdpz Lfv Hr Xtn YQMFMVJW
7.88%3.33%3.46%
Z. Fvsn Slytv Jjfrff VqjxqphmsrctxvWRTB
12.04%2.95%4.40%
W. Qpyc Tnsqt Hnjnhg Vkgmywndjmpsp LHVXL
11.78%2.79%4.28%
B. Wqbw Fbhfk Ndsxfm Xrrz Ylgtmg JMSGC
12.80%1.22%3.56%
Z. Ztfc Xzttw Fpdzyk Frjz Mdkshx Kw TnrrsgQHGSV
12.49%1.07%3.36%
F. Thfq Mxnsn Vkmm ZjlWCXYKV
11.14%1.90%3.65%
W. Tymq Vvgxv Sqrz Vqsfw TxsMBNVF
11.00%1.58%3.33%
Q. Ndfj Vvjkq BL Qtcx HkfzjZDJKD
12.12%0.90%3.68%
J. Pkqb Fdpch JC Ylnx Frlnn SllqLZSNVV
11.96%0.74%3.52%
Gzwgmgmw Wnvh Jfxzm HZCRDLQ
9.71%1.65%2.87%
Gwybwlscjm Kbkq Wrylh RKSQDW
10.41%1.81%3.20%
Zqzvhxhx Wjkr-Rhdmx Cmrkmyzzr PmxWJHJC
9.68%1.81%3.61%
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List Criteria

High-Yield Bond

Funds in this Morningstar category have at least 65% of assets in bonds rated below BBB.

Medalist Funds (Gold, Silver, or Bronze)

The Medalist Rating for funds reflects our forward-looking assessment of a fund’s ability to outperform its peer group (funds in the same category) and benchmark on a risk-adjusted basis over the long term. We assign the ratings on a five-tier scale with three positive (Medalist) ratings of Gold, Silver, and Bronze; a Neutral rating; and a Negative rating. If a fund receives a Gold, Silver, or Bronze rating, it means that Morningstar analysts expect it to outperform over a full market cycle of at least five years.

Open to New Investment

All the funds on this list are open for new investment. Sometimes mutual funds will close to new investors when the fund is receiving more money than the management team believes it can invest effectively. Closing a fund under these circumstances is usually considered investor-friendly, as funds that get too big can sometimes suffer performance problems later. Even though new investors can’t get into closed funds (so such funds are not included here), closed funds that are rated Gold, Silver, or Bronze may be worth putting on a watch list.

Share Class Exclusions Applied

Many fund families offer multiple versions of the same fund but with variations on the sales fees that are charged and/or investor qualifications. In some cases, certain share classes may be for institutions (such as company retirement funds) or otherwise have a high investment minimum. We've limited our list to funds that are primarily used by and available to individual, or retail, investors.

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