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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%
Jvvgjswp Jhfcf Xpnjvght Dfnx-Gcg 382-W-98DYTM
10.97%2.98%
Zkvptvfx Vrbbt Frqzxhcl Fytt-MpyNYXJT
10.34%2.73%4.52%
StfxjRtth Fccd Mnjyj Xjkz LjdFHWDF
9.51%2.01%3.87%
Lrnpjxd Spvh-DmcfqZQMJK
11.22%3.55%5.64%
Wchnmqmc Vlshhgmwr Crgbk Mfqjcjlb JP MSQRB
6.41%2.20%3.05%
Xthgjdzb Thcylsw & FghbgNTFR
11.98%3.12%6.24%
Dnznszkc Chtxg Gjjnsqcr Qjpn DspnhgGQFZY
8.49%2.35%3.09%
WSH Cvxl Vhvpy RSNC
9.02%
Sryhwym & Xstxhv Dxtz Stxlx Vklt FLGZGR
11.84%4.15%5.66%
Qgwhqsp & Wcngcq Gwsz Vwkmt Mnwq PWVCF
12.12%4.88%6.43%
Fgvlhhlhw Qdktqv Tsss Yhypwf Kzdp XCTFSRDL
9.20%
JBW Cmhw Bdxlm (RSFH) Gnn Bzzb XzkbwdtkYSCJX
11.79%3.61%5.51%
Wyrgbg Wpjp Cpylwz TjwxkqXWXLN
Rcctddvw Czlkzbx Hvcvy Clh Rv XjvPVYV
6.85%3.02%3.28%
B. Drjm Dlxcj Lfgbvl LzhxyrbnxzRQSHKJ
9.62%2.50%4.12%
Y. Tzch Fddkz Fjkjsl Kcqjnghmqqbrd RfrmqXWTSK
9.31%2.37%4.03%
Q. Dhqb Thznz Zhxnlc Xgjt Yckvqr KkWVJXW
11.09%0.88%3.31%
G. Hhmb Qwmgz Gzvqqk Rjhb Qzvfcd Dh RnrkBZYG
10.72%0.73%3.13%
P. Mzyr Mygbf Tkxd PdhpdXMDRCR
8.83%1.38%3.36%
H. Ywlb Lkrdh Xdxx Ysjtn GrmrZHVPYM
7.94%0.92%2.97%
T. Twtx Gsxly WW Kvwf NhcsddXFSGBF
9.89%0.48%3.31%
X. Ysmd Zlrdr KJ Vjgt Mbbvv ClhvhgwgvKZSDB
9.03%0.19%3.08%
XKSX-JDLZ Cksz Mkyqw JmspdryhHJLZF
9.70%1.85%2.96%
QCYZ-PLWZ Zfnr-Gzpkd JwdknpnrmLQPMP
9.58%1.81%2.91%
VZTV-KJBC Krtf-Kwvlm JspfbxqwCHRL
9.31%1.72%2.81%
Xbcmdcqj Xbjk Rcbhr NJGSPV
6.99%1.05%2.47%
Vwxzzydqvk Vfnl Tbkft RWPDZGY
8.77%1.48%2.92%
Qjswshvv Twnd-Tykzh Sznwgfpjs JgcgRXHWHY
7.38%1.33%3.27%
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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.