high-yield bond fund

(redirected from Junk Bond Fund)

High-Yield Bond Fund

A mutual fund that invests predominantly or exclusively in junk bonds. Because junk bonds have low credit ratings, they offer a comparatively high return. High-yield bond funds generally have portfolios containing at least two-thirds junk bonds. They provide a way for investors to take advantage of the return offered by a junk bond while also avoiding the risk of investing in a single bond at a high risk of default. See also: Investment grade.

high-yield bond fund

An investment company that attempts to produce unusually high income for its shareholders by maintaining a corporate bond portfolio that contains at minimum two thirds lower-rated bonds (Baa by Moody's; BBB by S&P).
References in periodicals archive ?
in Kokomo also has aimed to diversify its, portfolio with a junk bond fund, says Louis Schmitt, senior vice president and chief financial officer.
He also has more than 20 years of investment experience and has held buy-side and sell-side positions as a trader, analyst, junk bond fund manager, and private placement specialist.
These bonds have been so depressed for two years that yields are comparatively high: The average junk bond fund now pays more than 10%.
So far this year, the strategy has worked, with the average junk bond fund registering a 34 percent total return.
Fearing the Fed might raise rates faster than expected, investors pulled billions of dollars out of junk bond funds in July.
Riskier high-yield junk bond funds, meanwhile, attracted $1 billion, according to the Bank of America Merrill Lynch report, which also cited data from fund-tracking firm EPFR Global.
Ninety percent of the $6 billion that flowed into longer-term taxable bond funds last month went into junk bond funds.
If you want to live on the wild side, you can even invest in socially responsible junk bond funds these days.
Junk bond funds attracted huge amounts of investor capital in the 1980s.
Investors in those vehicles saw that surprisingly, for the second year running, junk bond funds earned top honors hands down.