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When we talk about High Yield Funds, the term Junk Bonds comes to mind. That may or may not be an accurate description. During times
of steady interest rates and a fairly steady economy, High Yield Bond tend to do fairly well. They pay an added premium or
higher rate of interest to compensate for a higher chance of default on the bonds. Buying a single bond of this nature can
be very risky. However, we you buy a High Yield Mutual Fund, which is a portolio of these bond, you risk will be lower
and more a function of market risk. These may be a good instrument if you are looking for income and potential price appreciation. These
funds should perform well if interest rates decline.
Below are the links into websites that contain information on High Yield Mutual Funds:
Mutual Fund Top Performers - High Yield Bond
From Yahoo Finance - Top Performers in High Yield Bond Mutual Funds. Includes rankings for last 3 months, 1 year, 3 years and 5 years top performing funds. High-Yield Bond Fund This screen looks for funds specializing in some of the market's riskiest debt securities. If government bonds are at one end of the spectrum, high yield - sometimes called "junk" - bonds are at the opposite end. The funds you'll find from this screen will appeal to aggressive investors seeking a combination of high income and significant potential capital appreciation. These funds also have significant downside potential in case of a major move up in interest rates, or an economic downturn that might lead to widespread defaults. The screen does seek funds that are among the least volatile in the category and which offer the best risk/return tradeoff within what is inevitably a high-risk group. AFBA 5 Star Funds A high yield bond fund with a decidedly conservative nature. The fund manager has extensive experience in the high yield sector and rigorously researches smaller, lower-rated companies for investment opportunities. The Fund's wide use of "convertible" securities differentiates it from many funds in its peer group. Hartford High Yield HLS Fund The Fund consists of a diversified portfolio of non-investment grade securities from a variety of fixed income asset classes. Kiplinger's Rankings of High Yield Funds from Kiplinger's High Yield Muni List of High Yield Muni Funds and Links to their profiles. Spread Your Risk In The Bond Market What's an income investor to do? You can leave your money in money market mutual funds or bank CDs. But you won’t earn enough income. By contrast, if you invest in a higher-yield investment, the risk is greater that you could lose money.
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