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I am looking for a mutual fund for high-yield bonds. Recommendations from members and readers of MFO will be appreciated. Incidentally, if you believe this area of investing is best served by one of the existing ETFs, please say so.
HY bond funds are difficult to compare because they vary so much in credit and duration spread not to mention other "gimmicks" such as hedging, preferred/convertibles, etc.
This gives a wide spectrum of risk/reward combinations in these funds which makes M* ratings useless in this category more than most other categories
If this is part of a core holding in a large enough portfolio to make a separate HY fund meaningful, I would pick PRHYX in @bee's list above as the best managed and more importantly consistent and pure offering assuming it is available to you.
If you are looking for momentum plays or otherwise actively managing the portfolio allocation then something like FAGIX would provide higher returns in bull markets.
I own these and have been pleased with all of them. All have provided relatively low volatility and steady returns.
Mutual funds: WHIYX (A top performing fund over the long-term.) VWEHX (It holds higher-rated bonds and has out-performed WHIYX this year.)
ETFS: HYLD (A managed HY bond ETF that holds bonds bought on a value basis. I like it better than JNK or HYG.) CEFL (This is technically an ETN. It holds a basket of HY closed end funds and is leveraged 2X and so pays a very high dividend. It has a short history but has done well lately.)
High-yield munis: VWAHX HYD (Both of these have done well this year, performing better than taxable HY bond funds. HYD pays a dividend almost as high as that of JNK.)
Comments
Full List: Conservative Allocation Funds
FKINX
BERIX
Full List: Moderate Allocation Funds
BUFBX
Full List: Multisector Bond Funds
NEFZX
PONDX
In the M* High Yield category I'd suggest you check out:
Full List: High Yield Bond Funds
BJBHX
USHYX
TFCVX
SHYPX
PRHYX
FAGIX
This gives a wide spectrum of risk/reward combinations in these funds which makes M* ratings useless in this category more than most other categories
If this is part of a core holding in a large enough portfolio to make a separate HY fund meaningful, I would pick PRHYX in @bee's list above as the best managed and more importantly consistent and pure offering assuming it is available to you.
If you are looking for momentum plays or otherwise actively managing the portfolio allocation then something like FAGIX would provide higher returns in bull markets.
HYG and JNK are the two top ETFs.
Mutual funds:
WHIYX (A top performing fund over the long-term.)
VWEHX (It holds higher-rated bonds and has out-performed WHIYX this year.)
ETFS:
HYLD (A managed HY bond ETF that holds bonds bought on a value basis. I like it better than JNK or HYG.)
CEFL (This is technically an ETN. It holds a basket of HY closed end funds and is leveraged 2X and so pays a very high dividend. It has a short history but has done well lately.)
High-yield munis:
VWAHX
HYD
(Both of these have done well this year, performing better than taxable HY bond funds. HYD pays a dividend almost as high as that of JNK.)
Thanks.
DlphcOracl