If you’re searching for high-yield bonds for income investors, you’re likely aiming for steady cash flow with higher returns than traditional investment-grade bonds. Also known as “junk bonds,” high-yield bonds offer attractive interest payments in exchange for higher credit risk. For income-focused investors willing to tolerate some volatility, these bonds can be powerful portfolio boosters. Below are 10 top high-yield bond investments worth considering in 2026.
1. Vanguard High-Yield Corporate Fund (VWEHX)
The Vanguard High-Yield Corporate Fund (VWEHX) is a favorite among income investors looking for diversified exposure to below-investment-grade corporate bonds. Managed conservatively relative to peers, it focuses on higher-quality junk bonds to balance yield and risk. With low expense ratios and broad sector exposure, this fund offers consistent income potential without excessive speculation. It’s ideal for long-term investors who want steady monthly distributions while minimizing default risk compared to riskier high-yield bond funds.
2. Fidelity Capital & Income Fund (FAGIX)
Fidelity Capital & Income Fund (FAGIX) blends high-yield corporate bonds with a modest allocation to equities, making it slightly more aggressive than traditional bond funds. This hybrid strategy can enhance total returns during favorable market conditions. Income investors appreciate its experienced management team and flexible approach across credit ratings. While volatility may be higher than pure bond funds, the potential for elevated yield and capital appreciation makes it attractive for investors seeking both income and growth.
3. SPDR Bloomberg High Yield Bond ETF (JNK)
The SPDR Bloomberg High Yield Bond ETF (JNK) offers broad, liquid exposure to the U.S. high-yield corporate bond market. As an exchange-traded fund, it provides easy trading access and relatively low costs. Income investors benefit from diversification across hundreds of issuers, reducing individual default risk. JNK is particularly appealing for those who want passive exposure and steady monthly income distributions. However, returns can fluctuate with interest rate changes and overall economic conditions.
4. iShares iBoxx $ High Yield Corporate Bond ETF (HYG)
The iShares iBoxx $ High Yield Corporate Bond ETF (HYG) is one of the largest and most popular high-yield bond ETFs available. Known for liquidity and tight spreads, it tracks a diversified index of U.S. dollar-denominated junk bonds. Income-focused investors value HYG for its consistent yield and transparency. Its broad exposure reduces concentration risk, making it a core holding for many portfolios seeking higher income without selecting individual bonds.
5. PIMCO High Yield Fund (PHK)
PIMCO High Yield Fund (PHK) is a closed-end fund designed to maximize income through actively managed high-yield bond investments. It often employs leverage to enhance yield, which can boost returns but also increase risk. Income investors seeking above-average payouts may find PHK appealing, especially during stable economic periods. Active management and credit research are key strengths, though investors should be mindful of premium/discount pricing typical of closed-end funds.
6. BlackRock High Yield Bond Fund (BHY)
BlackRock High Yield Bond Fund (BHY) focuses on delivering high current income with capital appreciation potential. Managed by one of the world’s largest asset managers, it benefits from deep credit research capabilities. The fund typically invests in diversified below-investment-grade corporate bonds, balancing risk across industries. Income investors appreciate its disciplined approach and competitive yields. It’s well-suited for those looking to enhance portfolio income without excessive single-issuer exposure.
7. Invesco High Yield Bond Fund (AHIX)
Invesco High Yield Bond Fund (AHIX) targets attractive income by investing in a diversified portfolio of corporate high-yield bonds. The fund emphasizes credit selection and risk management, aiming to minimize defaults while maintaining competitive yields. Income investors often choose AHIX for its experienced management team and consistent performance history. It may perform best in stable or improving economic environments where credit spreads tighten, and default risks remain contained.
8. Franklin High Yield Tax-Free Income Fund (FRHIX)
Franklin High Yield Tax-Free Income Fund (FRHIX) invests in below-investment-grade municipal bonds, offering tax-advantaged income. This makes it particularly appealing for investors in higher tax brackets. While municipal high-yield bonds carry credit risk, the tax-free distributions can significantly enhance after-tax returns. Income investors seeking diversification beyond corporate junk bonds may find FRHIX a valuable addition, especially if they prioritize tax efficiency alongside higher yield.
9. T. Rowe Price High Yield Fund (PRHYX)
T. Rowe Price High Yield Fund (PRHYX) is known for its disciplined credit research and long-term track record. The fund focuses on balancing attractive income with capital preservation strategies. Income investors value its experienced management and diversified exposure across industries. PRHYX may offer slightly lower volatility compared to more aggressive high-yield funds, making it suitable for investors who want strong income potential without extreme risk-taking.
10. PGIM High Yield Fund (PHYZX)
PGIM High Yield Fund (PHYZX) provides actively managed exposure to high-yield corporate bonds with a focus on fundamental credit analysis. The fund seeks to deliver competitive income while managing downside risk. Backed by PGIM’s extensive research platform, it offers diversified sector allocation and a flexible investment strategy. Income investors looking for a professional, research-driven approach to junk bond investing may find PHYZX a compelling option for steady income generation.
Conclusion
High-yield bonds can play a valuable role in an income-focused portfolio, especially in a stable or improving economic environment. However, they carry higher default and interest rate risks compared to investment-grade bonds. Diversification through ETFs and mutual funds can help manage that risk effectively. Before investing, consider your risk tolerance, time horizon, and income goals. With careful selection, high-yield bonds can provide attractive cash flow and enhance overall portfolio returns in 2026 and beyond.