High-yield bonds offer the potential for investors to earn higher returns if they’re comfortable taking on additional credit risk.
High-yield bonds are issued by entities with low credit ratings from bond rating agencies such as Moody’s, Standard & Poor’s and Fitch. Bonds with ratings below a certain threshold are considered non-investment grade, or high-yield. High-yield bonds are also referred to as junk bonds because of their lower credit quality, which means the bond’s issuer is more likely to default.
Because of the additional risk associated with high-yield bonds, investors can expect to earn higher returns compared to safer bonds. Yields for these non-investment-grade bonds are higher than government bonds, meaning investors can earn more in income relative to the price they paid for the bonds.
Mutual funds and ETFs are some of the easiest ways to get exposure to high-yield bonds, offering you a portfolio with hundreds or thousands of them. Here’s what else you should know about high-yield bonds and some of the top funds to consider for your portfolio.
(Yield data below from Morningstar as of June 11, 2025.)
The Vanguard High-Yield Corporate Fund invests in medium- and lower-quality corporate bonds. The fund managers invest in what they consider to be higher-rated junk bonds. The fund holds around 900 different bonds.
This iShares ETF is one of the most popular high-yield bond ETFs and aims to track the investment performance of an index made up of U.S. high-yield corporate bonds. The fund held more than 1,200 bonds as of June 2025 with a weighted average maturity of about five years.
This JPMorgan ETF seeks to replicate the investment performance of an index of U.S. high-yield corporate bonds. The fund held about 1,500 bonds as of June 2025.
The SPDR Portfolio High Yield Bond ETF aims to closely match the investment performance of a high-yield bond index that includes U.S. high-yield bonds with at least one year to maturity and a minimum amount outstanding of $250 million, among other factors.
The VanEck High Yield Muni ETF seeks to match the investment performance of an index that tracks the U.S. high-yield long-term tax-exempt bond market. The bonds in this fund are generally exempt from federal income taxes, which is why the stated yield is lower than the yields on taxable funds.
