high-yield bond fund

(redirected from High-Yield Funds)

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 ?
* High-yield funds. These funds typically invest in corporate bonds that are unrated or low rated by specialized agencies, perhaps because the issuers are not in excellent financial condition.
In essence, these funds are the tax-exempt cousin of the high-yield funds mentioned previously in this article, which pay taxable interest.
For example, Hoff noted the volatility caused by a possible Brexit hasn't affected his key investments in health care and cable company high-yield funds. Also, his fund only invests in products that are dollar denominated, so they don't have any currency risk.
In this market generating 7%-8% per annum, over 20 years is significant; $100,000 invested in a high-yield fund 20 years ago is worth $400,000 today.
Global fund ranking service Morningstar has ranked the Falcon High Yield Defensive Fund amongst the best-performing funds in the US dollar high-yield funds category on a one-year, three-year, and five-year annualised return basis.
Only 10 funds out of the 441 in the dollar high-yield funds category have been awarded this highest rating.
Global fund ranking service Morningstar has ranked the Falcon High Yield Defensive (FHYD) Fund amongst the best-performing funds in the US dollar high-yield funds category on a one-year, three-year, and five-year annualised return basis.
The FHYD Fund outperformed the best-performing fund from the 405 Lipper-rated US dollar high-yield funds on a five-year return basis.
The Financial Supervisory Service on March 9, 2007 announced new supervisory measures for high-yield funds commonly known as "junk bond funds" to meet recently amended tax law provisions, which apply a reduced tax rate for funds that invest 10 percent or more of the assets on speculative-grade corporate bonds and commercial papers.
Morningstar senior analyst Bradley Sweeney reasons that in this environment, the scales tip slightly in favor of high-yield funds. The reason: A shrewd portfolio manager should be able to shield a fund from credit-quality woes, even in the thorniest of times, whereas a sharp rise in rates will clobber government bond portfolios run by the best of minds.
Although the average high-yield fund expenses about 1.3% of its assets, we looked to better that by limiting our sights to funds with a 1.0% ratio or less.
At the head of the pack of high-yield funds in the first half of this year was Dreyfus High-Yield Securities.