7 Top-Performing High-Yield Bond Funds

High-yield bonds can provide increased income for investors willing to accept more risk. One of the best ways to moderate that risk is to have a broad, diversified portfolio, which investors can get partly through bond funds. The following seven high-yield funds, all of which earn higher-conviction

We looked for the funds with the best returns over the last one-, three-, and five-year periods. We filtered for those with Medalist Ratings of Bronze or higher, meaning Morningstar analysts expect the funds to outperform. Seven high-yield bond funds made the list.

• American Funds American High-Income Trust RITGX
• BlackRock High Yield Portfolio Fund BRHYX
• Fidelity Advisor Capital & Income Fund FIQTX
• Franklin High Income Fund FHRRX
• Franklin High Yield Corporate ETF FLHY
• iShares Broad USD High Yield Corporate Bond ETF USHY
• PGIM High Yield Fund PHYQX

High-Yield Bond Fund Performance

High-yield bond portfolios concentrate on lower-quality bonds, which are riskier than those of higher-quality companies. These portfolios generally offer higher yields than other types, but they are also more vulnerable to economic and credit risk. They primarily invest in US high-income debt securities where at least 65% or more of bond assets are not rated or are rated BB (considered speculative for taxable bonds) and below.

Over the past 12 months, the average fund in the high-yield bond category returned 7.19%. On an annualized basis, high-yield bond funds have climbed 8.74% over the past three years and 4.09% over the past five. Meanwhile, the Morningstar US Core Bond Index has risen 7.42% over the past 12 months, 4.72% per year over the past three years, and 0.16% per year over the past five.

Screening for the Top-Performing High-Yield Bond Funds

We looked at returns from the past one, three, and five years using data in Morningstar Direct. We screened for open-end and exchange-traded funds in the top 33% of the category using their lowest-cost primary share classes for those periods. We also filtered for funds with a Morningstar Medalist Rating of Bronze, Silver, or Gold. We excluded funds with assets under $100 million and analyst coverage that was not 100%. This left seven investments.

Because the screen was created with the lowest-cost share class for each fund, some may be listed with share classes that are not accessible to individual investors outside of retirement plans, or they may be aimed at institutional investors and require large minimum investments. The individual investor versions of those funds may carry higher fees, reducing returns to shareholders. Medalist Ratings may differ among the share classes of a fund.

American Funds American High-Income Trust

• Morningstar Medalist Rating: Silver
• Morningstar Rating: ★★★★★

The $27.2 billion fund has gained 8.08% over the past 12 months, while the average fund in its category is up 7.19%. The Capital Group fund, launched in May 2009, has climbed 10.19% over the past three years and 5.58% over the past five.

With strong succession planning and a restrained appetite for risk, American Funds American High-Income Trust is a compelling long-term option.

The benefit of Capital Group continuously cultivating a bench of talent has been shown here of late. Only months after publicly naming Andy Moth as a fifth manager in December 2024, the strategy’s second-longest tenured manager, Tara Torrens, stepped away from the industry for personal reasons in July 2025, returning the strategy to four named managers.

Moth has a greater penchant for credit risk than Torrens, but the strategy’s stringent internal fund-level guidelines relative to the Bloomberg US High Yield 2% Issuer Capped Index should keep the risks in his sleeve and those of the other managers in check. These guidelines, first implemented in late 2020, include limiting exposure to credits rated BB and above as well as CCC and below.

The fund still has a relatively aggressive tilt. While its credit profile has moderated relative to its own history, its 13%-18% stake in CCC debt over the past three years through June 2025, though largely in line with its index, has been 4-7 percentage points more than the high-yield bond Morningstar Category distinct peer median.

The 7.58% gain of its R6 share class for the year to date through September 2025 ranks near the peer group’s top third and Bloomberg US High Yield 2% Issuer Capped Index benchmark and the ICE Bank of America US High Yield Index category benchmark by 35 and 12 basis points, respectively. And over the past five years, the fund has been one of the category’s best performers, especially when results are adjusted for volatility.

BlackRock High Yield Portfolio Fund

• Morningstar Medalist Rating: Gold
• Morningstar Rating: ★★★★

The $26.5 billion fund has gained 8.23% over the past 12 months, while the average fund in its category is up 7.19%. The BlackRock fund, launched in November 1998, has climbed 9.93% over the past three years and 4.95% over the past five.

BlackRock’s US high-yield bond strategy boasts a veteran management team and extensive supporting resources, coupled with a well-rounded investment approach.

Portfolio managers Mitchell Garfin and David Delbos, co-heads of BlackRock’s US leveraged finance team, have collaborated for nearly a decade as the day-to-day managers of this strategy, sold in the US as BlackRock High Yield Bond and in Europe and Asia as BGF US Dollar High Yield Bond. This management crew is one of the most seasoned in the high-yield bond Morningstar Category, and they are responsible for both top-down macro calls and bottom-up security selection here.

The managers follow a flexible approach, emphasizing higher-quality bonds when riskier debt offers paltry compensation and leaning into lower-quality market segments when they think risk-taking pays off. With roughly USD 65 billion under management across its global high-yield strategies, the leveraged finance team has a large footprint in the high-yield market, so staying nimble can be tricky. The team attempts to overcome some of those challenges by broadening its scope to include bank loans (in its US-domiciled fund) and collateralized loan obligations (in its European vehicle), as well as investment-grade corporates (historically ranging between 0% and 15% of portfolio assets). The team can also venture into equities (up to 10% of portfolio assets). In recent years, the strategy has also invested more in exchange-traded funds (which have reached roughly 10% of assets at times), credit default swaps, and total return swaps to quickly gain or trim diversified market exposure when such instruments are easier to trade or better priced than cash bonds.

This flexible approach has resulted in an impressive long-term track record. Over Garfin and Delbos’ tenure from March 2015 through July 2025, both the US- and Luxembourg-domiciled funds beat three-fourths of peers in their US high-yield categories in terms of absolute and risk-adjusted returns (as measured by Sharpe ratio).

Fidelity Advisor Capital & Income Fund

• Morningstar Medalist Rating: Silver
• Morningstar Rating: ★★★★★

Over the past 12 months, the Fidelity fund rose 11.98%, while the average fund in its category rose 7.19%. The fund, launched in October 2018, has climbed 11.69% over the past three years and 6.66% over the past five.

The research engines powering Fidelity Capital and Income’s unconventional high-yield portfolio are key to its success.

The strategy stands out among even the most aggressive in the high-yield bond Morningstar Category for its hefty equity stake. Notkin makes full use of his 22% cap on equities during periods when he believes the yield premium of high-yield bonds over stocks (the latter of which is estimated using earnings yields of broad-based market indexes like the S&P 500) to be insufficient. Meanwhile, only a select few high-yield managers allocate even 1% to equities. Risk mitigation is paramount here, given the strategy’s ability to allocate to common stock. When dialing up equity exposure, Notkin and Chang will often take down the bond sleeve’s credit risk and raise cash. Though prudent, that doesn’t prevent fundholders from being subjected to extreme volatility when the equity markets see-saw as they have in 2025.

Patient investors willing to stomach larger short-term drawdowns have been well served with this opportunistic high-yield offering. It hasn’t fared quite as well amid some recent policy-driven market volatility, but the strategy’s long-term record stacks up well against any other high-yield strategy. Indeed, its trailing five- and 10-year returns each ranked in the top decile versus distinct high-yield bond category peers, while its volatility-adjusted returns (as measured by the Sharpe ratio) were nearly equally as impressive.

Franklin High Income Fund

• Morningstar Medalist Rating: Bronze
• Morningstar Rating: ★★★★★

The $2.9 billion fund has gained 7.99% over the past 12 months, while the average fund in its category is up 7.19%. The Franklin Templeton fund, launched in May 2013, has climbed 9.81% over the past three years and 5.03% over the past five.

Franklin High Income’s bolstered credit-research capabilities and steady process make it an attractive option for high-yield bond investors.

Longtime lead manager Glenn Voyles has kept his team on course since Franklin Templeton acquired Putnam in January 2024. This group’s experience, size, and abilities stand out from its peers.

The team takes a simple yet sensible approach to high-yield bond investing. This fundamentals-focused approach stands out in part for the managers’ uniquely long investment horizon, typically between three and five years. While that invites short-term volatility, Voyles and team believe it provides them with a structural advantage over more skittish peers who they think may overreact when a particular credit comes under stress. Voyles manages the portfolio more loosely to its ICE Bank of America High Yield Constrained Index, enabling him to freely express sector views the team identifies as being in secular decline—like retailers in 2025—with substantial underweightings. Under that framework, the team rarely strays from USD-denominated corporate bonds and maintains a medianlike interest rate risk profile relative to its high-yield bond Morningstar Category competitors.

Patient investors have been rewarded with consistently strong relative performance: the fund’s R6 shares finished in either the first- or second-best quintile versus distinct peers in each of the past seven calendar years through 2025.

Franklin High Yield Corporate ETF

• Morningstar Medalist Rating: Bronze
• Morningstar Rating: ★★★★

Over the past 12 months, the Franklin Templeton fund rose 8.63%, while the average fund in its category rose 7.19%. The fund, launched in May 2018, has climbed 10.10% over the past three years and 4.71% over the past five.

Franklin High Yield Corporate ETF’s bolstered credit-research capabilities and steady process make it an attractive option for high-yield bond investors.

Longtime lead manager Glenn Voyles has kept his team on course since Franklin Templeton acquired Putnam in January 2024. This group’s experience, size, and abilities stand out from its peers.

The team takes a simple yet sensible approach to high-yield bond investing. This fundamentals-focused approach stands out in part for the managers’ uniquely long investment horizon, typically between three and five years. While that invites short-term volatility, Voyles and team believe it provides them with a structural advantage over more skittish peers who they think may overreact when a particular credit comes under stress.

Patient investors have been rewarded with strong relative performance over this ETF’s seven-plus-year history. Its since-inception absolute return and volatility-adjusted return (as measured by Sharpe ratio) both ranked in the top decile of peers through December 2025.

iShares Broad USD High Yield Corporate Bond ETF

• Morningstar Medalist Rating: Bronze
• Morningstar Rating: ★★★

Over the past 12 months, the iShares fund rose 7.75%, while the average fund in its category rose 7.19%. The fund, launched in October 2017, has climbed 9.64% over the past three years and 4.40% over the past five.

IShares Broad USD High Yield Corporate Bond ETF captures the US high-yield bond market at an attractive price tag, but there are better options. Its straightforward indexing approach doesn’t effectively manage lopsided risks or take advantage of mispriced bonds in the high-yield market.

The fund tracks the ICE BofA US High Yield Constrained Index, which sweeps in US-dollar-denominated corporate bonds with below investment-grade credit ratings. Eligible bonds must have at least USD 250 million in outstanding face value. This reasonable threshold satisfies the fund’s liquidity needs while capturing a comprehensive snapshot of the high-yield bond market.

The fund also excludes riskier types of bonds such as contingent convertible bonds and equity-linked securities, and it effectively has no exposure to emerging-market issuers. The index weights selected bonds by their market value, capping individual issuers’ weightings at 2% to limit firm-specific risk. The resulting portfolio is broadly diversified and captures much of the high-yield opportunity set. This keeps the fund’s performance in line with its Morningstar Category average.

Overall, broad exposure and a rock-bottom fee have served the fund well. It preserved its outperformance over the category average from its 2017 inception through April 2025, despite unfavorable conditions over the past few years.

PGIM High Yield Fund

• Morningstar Medalist Rating: Gold
• Morningstar Rating: ★★★★

The $21.4 billion fund has gained 8.21% over the past 12 months, while the average fund in its category is up 7.19%. The PGIM fund, launched in October 2011, has climbed 9.74% over the past three years and 4.40% over the past five.

PGIM High Yield’s industry-leading resources and rigorous, relative value framework make for a formidable combination rivaling the high-yield bond Morningstar Category’s best.

PGIM’s global leveraged-finance team stands out for both its depth and its unique makeup. Three-decade veteran lead manager Robert Cignarella owns top-down, macro responsibilities and oversees PGIM’s broader cohort of US high-yield portfolio managers. Four of those managers share portfolio duties here with Cignarella, including three who rose from the firm’s research ranks, and serve as sector specialists. These managers, alongside seasoned credit analysts with whom they partner, drive the portfolio’s bottom-up security selection process that is critical to the strategy’s long-term success. Over 40 analysts (including 15 at the junior level) support the firm’s global leveraged-finance efforts.

The investment process is built on detailed rankings of fundamentals, valuations of sectors, and a set of roughly 500 issuers that meet higher-level screens. The outcome of those efforts is measured against detailed tracking-error risk budgets viewed through multiple lenses, including yield-curve, sector, and market-stress exposures.

Investors have been well-served by this strategy over time. During Cignarella’s tenure from April 2014 through May 2025, the US fund’s Z shares’ 4.98% annualized return through May 2025 beat out nearly 90% of distinct high-yield bond peers.