High-yield bonds can be a big help for clients looking to diversify their portfolios. These speculative-grade, or "junk bond," investments behave more like equities. Yet as fixed-income they enjoy a higher spot on an issuer's capital structure and, consequently, a level of safety that stocks don't offer.

Of course, many advisors are concerned that investors consider them as safe as other fixed-income securities while they can be far more volatile than Treasuries and in fact, incur substantial losses.

High-yield defies broad description because it covers a wide range of industries and various levels of risk (BB is quite different than CCC). But as a market, high-yield returned about 2.4% overall in 2014, according to the BofA Merrill Lynch U.S. High Yield Master II Index. That's lower than its historical norm of about 5%.
In an illustration of just how risky this market can be, returns fell and then climbed so drastically in December that investors could have made almost all of that annual profit (2.1%) in just the last two weeks of the year. Moreover, this move came in the midst of headline-grabbing cash outflows. The six-month bleed was partly attributable to worries over the drop in oil prices, since energy companies make up a sizable portion of this market. Investors reportedly pulled $523 million out of the market in just one week (ending Jan. 21) this month.

For clients who are willing to take on a bit more risk, here we present the 10 largest high-yield funds, along with performance metrics for each.

View the slideshow version here.

Data is from Morningstar as of Jan 26.

 

10. MainStay High Yield Corporate Bond Fund (MHCAX)

Total Net Assets 12/31/14: $8.23B

Total Net Assets 12/31/13: $8.82B

1Y: 0.65%

3Y: 6.27%

5Y: 7.39%

 

9. Ivy High Income Fund (WHIAX)

Total Net Assets 12/31/14: $8.32B

Total Net Assets 12/31/13: $10.31B

1Y: 0.12%

3Y: 8.44%

5Y: 9.43%

 

8. Lord Abbett Bond Debenture Fund (LBNDX)

Total Net Assets 12/31/14: $9.08B

Total Net Assets 12/31/13: $8.54B

1Y: 4.40%

3Y: 7.95%

5Y: 8.42%

 

7. T. Rowe Price High Yield Fund (PRFHX)

Total Net Assets 12/31/14: $9.43B

Total Net Assets 12/31/13: $9.87B

1Y: 13.55%

3Y: 7.52%

5Y: 7.60%

 

6. JPMorgan High Yield Fund (OHYAX)

Total Net Assets 12/31/14: $9.86B

Total Net Assets 12/31/13: $10.79B

1Y: 1.89%

3Y: 7.23%

5Y: 7.76%

 

5. PIMCO High Yield (PHIYX)

Total Net Assets 12/31/14: $10.36B

Total Net Assets 12/31/13: $15.64B

1Y: 3.12%

3Y: 7.25%

5Y: 7.97%

 

4. Fidelity® Capital and Income Fund (FAGIX)

Total Net Assets 12/31/14: $10.39B

Total Net Assets 12/31/13: $10.83B

1Y: 5.86%

3Y: 9.80%

5Y: 9.19%

 

3. BlackRock High Yield Bond Portfolio (BHYAX)

Total Net Assets 12/31/14: $14.84B

Total Net Assets 12/31/13: $13.08B

1Y: 1.86%

3Y: 8.46%

5Y: 9.21%

 

2. Vanguard High Yield Corporate Fund (VWEHX)

Total Net Assets 12/31/14: $16.85B

Total Net Assets 12/31/13: $16.21B

1Y: 3.91%

3Y: 7.22%

5Y: 8.35%

 

1. American Funds American Hi-Inc Tr A (AHITX)

Total Net Assets 12/31/14: $19.08B

Total Net Assets 12/31/13: $20.38B

1Y: -0.65%

3Y: 6.07%

5Y: 7.21%

 

 Read more: Warning: Bond Funds That Act Like Stocks