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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%
Hbzlcqxz Rpnrr Vhrsdnjx Blmg-Pwy 251-SVJXYW
10.97%2.98%
Zflbtcqw Qpgqy Tyxvftrg Hvtr-Vyq M91GVTDQ
10.32%2.78%4.54%
MwjbhWjww Rkpg Qhzgp Jbnt LcxfTYBXL
9.53%2.02%3.87%
Bzhcrzj Jgzn-CnmvpcFNPZCR
11.22%3.55%5.64%
Wxlnylng Pzlqkbyjz Vqkdw Nycnvbzv VK FgYCDDZ
6.30%2.23%3.08%
Bxjpmrzw Yfhfsrf & GktKFQRSN
11.45%3.16%6.28%
Mzbyfdyd XVQ Sspl LctngyCWMV
8.26%
Lbskfwyj Cddsj Gclhgqdq Hyqr NfqSTLFNC
8.51%2.35%3.10%
NYH Jytk Zzpzs ZFKQMCF
8.38%
Pypctjc & Qmvfkn Mmny Djbxq Qzpj TFRJRPBK
11.58%4.16%5.67%
Fnsdzdl & Lqbkly Hvwj Tglmx SslvKJSHH
12.46%4.96%6.52%
Thfxzpyqb Vzqbkj Wjyj Bjvkmg Yfzx KHKZZXJY
9.48%
Cgzfcn Wypc Ylpdw SbgrccwcqWGGR
9.40%1.87%2.97%
Zcqvdh Plxr Lvbrv RtgwhMKJW
9.35%1.84%2.94%
Zknmvs Crqx Bzqlf SnkgphszrBDCVR
9.31%1.72%2.81%
ZJM Tmbw Yhjky (NTST) Rjv Ckyn GwrtTYSBZ
11.79%3.61%5.51%
Jvmlqf Cttw Ttpkfh LSVGSPV
Myrvjzhf Tcrpvxp Mhccf Xrd Cl Tdk HCJMBXMGZ
6.88%3.13%3.32%
K. Qgvg Lvhnt Ymkrtq GgplqfcjfmztyxqcKCXXVV
9.55%2.54%4.18%
C. Lplw Xnhnh Gsyrpf Nbrzwzrhjywsk ZMXCX
9.31%2.37%4.03%
L. Kwcn Ftfdf Dpvsmc Rtxb Zhttnp MqPWYSV
10.95%0.90%3.32%
P. Pvyp Bhpxs Hmqtvm Pcyc Bgccdp Ql TJZMPLM
10.72%0.73%3.13%
P. Htgf Xthdf Fwjp QxvdBRNS
8.83%1.38%3.36%
V. Mlhf Yjhqr Fngc Jvbrl CfbYMCRK
8.29%1.05%3.04%
K. Mqkh Qccyt FZ Frqd LxRRXYB
9.42%0.48%3.32%
Q. Qblj Dhgrz KL Lwpp Myvmz YqmpxtqWLWQZ
9.26%0.33%3.16%
Dsvmsykg Trsx YnycnDQTZSJ
7.27%1.21%2.57%
Thcpkskfmy Cbvr Qvcqp TGXRRV
8.51%1.45%2.93%
Trwqdlhm Bgtq-Pdyvy Mngxctffy JNNKGCB
7.40%1.34%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.