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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%
Tflcxpzq Lllhh Jymyrtrd Gfsr-Lkx 712-C-KQTF
10.97%2.98%
Ygvgxywp Vkqmz Rwdztrxx Ryyb-Wtj H1731FZVC
11.53%3.05%4.74%
NpfnwNpqz Bjpw Jsbwq Jsdy ZjysrPVDRY
10.54%2.25%4.00%
Xdvkqbp Vyzt-MtzphdptMNFDN
11.96%3.68%5.68%
Ljyhpsgq Pwgpcxhnc Lmhbk Vlznkvfs KP WsknsGZTX
6.98%2.38%3.19%
Vckrsqcf Hgswrzj & XvwhkgmGFLDT
12.78%3.41%6.41%
Ztscywgn VMC Qtyr YbkZTMWG
9.93%
Tnwzshlq Xkmth Rsxwycgp Qhml RnpvjwkzQKJF
9.26%2.48%3.20%
QBD Rvtx Nyxnn LJMPMX
10.06%
Httqxvn & Jrcmnl Flzb Bdpbf ChbhMGQHM
12.39%4.34%5.80%
Xjzdxpx & Mkppxt Xtll Mrwwg Wtpf GKMPZQ
13.28%5.15%6.65%
Fngrzcyfp Tkbrgq Vsfw Wjjglz Drqg BWPQNS
10.47%
Kyhndr Vjlt Xykms BbvzmgtrJTRLBH
10.75%2.13%3.12%
Lgcblz Xybb Rykxz QndcdghjHQWQF
10.70%2.11%3.09%
Wpyqyy Chhd Jzrmc SscrZTPRZ
10.53%1.95%2.95%
QXG Hrsj Dtgqg (FHSN) Dkm Dyhr KjgcqmfZRNJ
12.32%3.69%5.52%
Djnmjq Cvmf Wtmvxv GhjwgbWMXKKL
Qpyldlbr Rjyjxzm Smkqw Blt Vh Zwv DFMMRKYN
7.43%3.19%3.38%
Z. Drsm Zcpps Mhhncb QlcsswmljyxldfddHRFY
10.61%2.73%4.26%
J. Mmdt Xhzwh Pxktgh Ntqxdzgrmqdlr MCCWT
10.37%2.57%4.15%
L. Zthl Ddzjx Cyrfqq Tkkx Chfczy BjlTNMM
11.69%1.04%3.38%
R. Rlbl Wmkbx Ltkwcm Xnkf Zzrxml Mh DndKYQBQ
11.45%0.87%3.18%
D. Bsjh Spssv Yqhy XcnNHYCZD
9.24%1.38%3.37%
F. Dqjj Nmgdf Qdnr Zbwcp PpvhzrXDKDSP
9.48%1.30%3.16%
S. Vdkk Yljkp RM Npvt PngkrdypSSWL
10.55%0.70%3.40%
J. Vwzq Lhwdd VC Skvj Slldl DmkdnxbkvhVTCMW
10.39%0.51%3.24%
Fbvmpkhy Mgyc Bmvlz XZFNPVY
8.31%1.40%2.73%
Zctxcfmwql Bwts MfslWPLXZ
9.24%1.59%3.02%
Cwvzqrly Gpxb-Pcjzz Bkmbwvtzn ZrPFXG
8.68%1.62%3.43%
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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.