BlackRock High Yield Bond Portfolio

Scorecard
4 / 5 Stars
Lipper
5 5 2 5 5
Zacks Investment Research
1 (Strong Buy)
Standard & Poor's
4 / 5 Stars
TheStreet.com
B- (Buy)

U.S. News evaluated 174 High Yield Bond Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

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Note: Profile written for different share class.

Performance

The fund has returned 8.18 percent over the past year, 8.46 percent over the past three years, 17.62 percent over the past five years, and 7.84 percent over the past decade. 

Trailing Returns Updated 03.31.2014
Year to date 2.7%
1 Year 8.2%
3 Years (Annualized) 8.5%
5 Years (Annualized) 17.6%
10 Years (Annualized) 7.8%

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Summary

BlackRock High Yield loves nothing more than an attractive-looking piece of junk.

As of April 22, 2014, the fund has assets totaling almost $14.00 billion invested in 986 different holdings. Its portfolio consists primarily of junk bonds.

As its name implies, this fund is invested almost entirely in junk bonds. As of the end of the first quarter, less than 10 percent of its bond holdings were considered to be of investment-grade quality. The fund's average credit quality is B, and upwards of a quarter of its bonds are below B or are unrated. Even for a high-yield fund, that's quite a bit of junk. By sector, the fund is invested almost entirely in corporate bonds, most of them tied to U.S. companies, including Citigroup and Dollar General. Management also has modest exposure to the debt of foreign corporations, including Vodafone. The fund's strategy, of course, comes with plenty of risks. In 2008, it lost a painful 28 percent. But the good years can also be quite good. For instance, in 2009, it gained 52 percent. The fund has returned 8.18 percent over the past year and 8.46 percent over the past three years. 

Investors in this fund should expect some volatility. After all, management's preferred investments (junk bonds) are among the trickiest products on the market. But over time, the fund's returns have been worth the occasional bad year. The fund has returned 17.62 percent over the past five years and 7.84 percent over the past decade.

Investment Strategy

"According to the fund's prospectus: The High Yield Fund invests primarily in non-investment grade bonds with maturities of ten years or less. The High Yield Fund normally invests at least 80% of its assets in high yield bonds."

Role in Portfolio

Morningstar calls the fund a "supporting player."

Management

A team of three managers oversees the fund.

Fees

BlackRock High Yield Bond Portfolio has an expense ratio of 1.52 percent.

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Risk

The fund's reliance on junk bonds comes with a fair amount of risk.

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