To find the best high-yield bond mutual funds, we began with the Fidelity Investments screener. Our initial list was 381 funds, including both taxable and tax-exempt municipal bond mutual funds.
We screened out all funds with lower than neutral Morningstar rankings. The remaining group included many institutional class funds with minimum initial investments of at least $100,000 to $1 million. We eliminated funds requiring initial investments over $3,000. We also screened out employee-only Class Z funds. Then we excluded funds that charge front end loads (Class A shares). And we tilted in favor of funds without 12b-1 fees, eliminating all but two. This narrowed the list to 35 funds.
We sorted the list according to 30-day yield, highest to lowest, and favored funds with yields of at least 6.00%. Only our high-yield municipal bond fund pick, PRIHX, has a lower SEC yield. But your taxable equivalent yield with that…
