Definition: High Yield Mutual Funds
High yield mutual funds are a category of mutual funds that try to attain higher than normal rates of returns for investors.
However, as a result of this they are also riskier, and carry a higher chance of the investor losing some of their money.
High yield mutual funds sometimes hold a number of high yield bonds in order to boost the rates of return.
In other cases, they may carry stocks that the fund manger feels will be fast risers.
Getting a High Rate of Return
In order to get consistent high rates of return, high yield mutual funds may require a more hands on management style than some of the more conservative mutual funds which tend to include securities of the “buy and hold” variety.
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High yield mutual funds may also be used as an income product.
These are the types of investments that create a revenue stream for investors instead of an appreciating ownership stake.
These are good investments for people who want to create a steady income for themselves through their investment strategy.
These types of funds will include a lot of bonds, and often include bond ladders.
This is a series of bonds bought on a set schedule to create constant income into the fund.
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