Skip to content

Best High Yield Bonds for Roth IRA

Best High Yield Bonds for Roth IRA

Want to boost your Roth IRA and save more for retirement? Think about adding high yield bonds to your investments. They offer chances for better returns but have more risk. We’ll look at some top high yield bond choices for your Roth IRA. You’ll get expert advice and tips to help you choose wisely.

Putting money into high yield bonds can be smart for your retirement. With high yield bonds in your Roth IRA, you might earn more than with normal bonds. But, remember, these bonds can be risky. They might not get paid back, and their prices can change a lot.

This article covers expert insights and advice. You’ll learn to balance the risks and rewards of high yield bonds for your Roth IRA. We’ll also help you consider important points when investing in these bonds. Plus, we’ll share some top high yield bond funds you can find.

Key Takeaways:

  • High yield bonds can offer higher returns, but they also come with additional credit risk.
  • Consider adding high yield bonds to your Roth IRA portfolio to potentially maximize your retirement savings.
  • Diversification is essential when investing in high yield bonds.
  • Consult with a financial advisor to evaluate the suitability of high yield bond funds based on your overall investment strategy.
  • We have compiled a list of the top high yield bond funds available for your Roth IRA.

What Are High-Yield Bonds?

High-yield bonds, or junk bonds, come from entities with low credit scores. They carry more credit risk than investment-grade bonds. While they’re more likely to default, they pay higher yields to balance the risk.

Investors get the chance to earn more income because of this. Yet, in tough times like recessions, the risk of default goes up. Despite this, high-yield bonds can still bring in good returns.

Investing in high-yield bonds means taking on more risk. Such risks are especially noticeable during tough economic times. But, they also offer chances for greater profits.

This comes from the balance between the risk and rewards of these bonds. For those willing to diversify their portfolios, high-yield bonds can be a valuable addition.

It’s clear that junk bonds pose some risks to investors. They have lower credit ratings, which means a higher risk of default. This is true especially when the economy isn’t doing well.

However, they give higher yields to offset these risks. It’s key for investors to weigh these risks against the potential gains. They should do this based on their personal investment goals and tolerance for risk.

Considerations for Investing in High-Yield Bonds

Before you add high-yield bonds to your investment mix, understand their risks and rewards. These bonds often pay more, but they’re riskier. Several key points can help you decide wisely.


Putting money in various places is wise. Include high-yield bonds with other investments. This mix can lower risk and boost your gains.

Risk Assessment

High-yield bonds are riskier because of their low credit ratings. It’s crucial to weigh the potential extra earnings against the risk. Make sure to check the bond issuers’ credit worthiness before diving in.

Expected Returns

These bonds can earn you more than safer ones. But, be realistic about what you might get back. Talking to a financial pro or doing your homework can reveal if the potential gains fit your financial plan.

Professional Guidance

A financial advisor can be a big help. They can offer insights, balance risks with rewards, and give advice tailored to your situation. Their expertise can be invaluable.

Thinking through these points can help you wisely add high-yield bonds to your investment options. This move could improve your overall financial standing.

Top High-Yield Bond Mutual Funds

We’ve made a list of some top high-yield bond mutual funds. These are great for a Roth IRA. They hold a mix of high-yield bonds and usually bring in good returns. You should check out:

  • Vanguard High-Yield Corporate Fund
  • iShares iBoxx $ High Yield Corporate Bond ETF
  • JPMorgan High-Yield Corporate Bond ETF
  • SPDR Portfolio High Yield Bond ETF
  • VanEck High-Yield Municipal ETF

high-yield bond funds

These funds have shown they can perform well over time. Adding them to your Roth IRA could earn you better yields. This is because they focus on high-yield bonds, which tend to pay more.

Vanguard High-Yield Corporate Fund puts your money in many types of corporate bonds. It holds about 800 different bonds. This fund offers a wide view of the high-yield bond world. Its yield right now is 6.6 percent, with costs at 0.23 percent.

iShares iBoxx $ High Yield Corporate Bond ETF is a top pick for those loving U.S. high-yield bonds. It owns about 1,200 bonds and matures on average in 4 years. Currently, it’s yielding 7.6 percent with smaller costs of 0.49 percent.

JPMorgan High-Yield Corporate Bond ETF aims to mirror a U.S. high-yield bond index. It spreads your investment across more than 1,300 bonds. This ETF offers good diversification in high-yield bonds. Its yield sits at 7.9 percent, and it costs just 0.15 percent to manage.

SPDR Portfolio High Yield Bond ETF follows a high-yield bond index, but all its bonds must have at least a year left and a big minimum value. It manages $4.1 billion and gives an 8.0 percent yield. Plus, its expenses are very low at 0.05 percent.

VanEck High-Yield Municipal ETF is all about U.S. high-yield bonds that usually don’t face federal taxes. It’s a good choice if you’re looking for lower tax impact. This ETF yields 4.4 percent and has expenses of 0.32 percent.

Adding these top high-yield bond mutual funds to your Roth IRA can make it more profitable and diverse. Talking with a financial advisor is smart. They can help you see if these funds match your investment plans and risk level.

Vanguard High-Yield Corporate Fund

The Vanguard High-Yield Corporate Fund specializes in investing in corporate bonds. These bonds are considered medium to lower quality. We also invest in higher-quality junk bonds selectively. Our portfolio includes about 800 different bonds, offering a broad range of high-yield options.

As of April 2024, this fund’s yield is 6.6 percent, with low expenses at 0.23 percent. It holds assets totaling $23.9 billion.

Choosing medium-quality bonds can mean better returns. However, it’s key to look closely at junk bond risks. The Vanguard Fund lets you broaden your holdings with its 800 bonds. This diversification helps manage the risk while aiming for good returns.

Investing in high-yield bonds carries more default risk than safer options. But, they offer better yields. It’s important to weigh these risks as an investor. This ensures you’re comfortable with the risk-return balance.

In the next section, we will discuss another top high-yield bond fund, the iShares iBoxx $ High Yield Corporate Bond ETF.

iShares iBoxx $ High Yield Corporate Bond ETF

The iShares iBoxx $ High Yield Corporate Bond ETF is a top choice for those wanting U.S. high-yield corporate bonds. It aims to follow the performance of a bond index. Investors can easily get into this asset class with this ETF.

It holds about 1,200 different bonds. These come from companies with not the highest credit scores. They pay more interest to investors because they’re a bit more risky. As of April 2024, this ETF’s yield is 7.6 percent, which is good for those who want income.

The Benefits of Diversification

Investing in the iShares iBoxx $ High Yield Corporate Bond ETF means spreading out your risk. It holds many bonds, so if one fails, it doesn’t hurt as much. This is a big plus for those worried about one company struggling.

This ETF holds bonds that will on average pay back in about 4 years. That’s what we call the weighted average maturity. Knowing this helps investors understand how interest rate changes can affect the ETF.

This ETF is a great way for investors to join the high-yield corporate bond world. It comes with the advantages of diversification and expert management. With its large bond collection and good yield, it could enhance an investor’s portfolio looking for both income and growth.

JPMorgan High-Yield Corporate Bond ETF

The JPMorgan High-Yield Corporate Bond ETF is a choice for investors wanting U.S. high-yield corporate bond exposure. It aims to match the performance of such bonds. With a wide range of over 1,300 bonds, it brings diversification and potential for good returns.

By April 2024, this ETF offered a 7.9 percent yield. This gives a chance for investors to gain a good income. At a low expense ratio of 0.15 percent, it’s cost-efficient for high-yield bond market entry.

This ETF holds assets valued at $963.6 million. This shows investors trust it to bring good results. Whether you’re experienced or new to high-yield bonds, consider adding this ETF to your portfolio.

JPMorgan High-Yield Corporate Bond ETF

Choosing high-yield corporate bonds can be smart for those looking for better yields. The JPMorgan High-Yield Corporate Bond ETF lets investors into a large selection of these bonds. It also means a potential for nice returns with its collection of over 1,300 bonds.

However, high-yield bonds come with risks. Assess these risks and how it fits your investment plans. Speaking to a financial advisor is wise. It can help ensure these bonds match your investment goals and how much risk you’re okay with.

SPDR Portfolio High Yield Bond ETF

The SPDR Portfolio High Yield Bond ETF is a great choice for those wanting to invest in U.S. high-yield bonds. It aims to mirror the performance of a high-yield bond index. This index covers U.S. bonds that have at least one year left to mature. Plus, they must be worth at least $250 million.

This ETF gives an 8.0 percent yield as of April 2024. This makes it attractive for people seeking better returns. It also has a very low expense ratio of 0.05 percent. This means more of the returns will go to the investors.

With a massive $4.1 billion in assets, there is a big chance to invest in the high-yield bond market. Its wide portfolio includes various U.S. high-yield bonds. This helps investors spread their investments and lower the risk.

The SPDR Portfolio High Yield Bond ETF is a solid choice for those who want to earn more from U.S. high-yield bonds. Its strong performance and big market presence make it stand out.

VanEck High-Yield Municipal ETF

The VanEck High-Yield Municipal ETF focuses on U.S. high-yield tax-exempt bonds. These bonds are free from federal income taxes. This is great for those in high tax brackets. Although they pay less than taxable bonds, the tax benefits are worthwhile for many people.

By April 2024, this ETF had a 4.4 percent yield. This incorporates its tax advantages too. It’s a low-cost way for investors to add high-yield tax-exempt bonds to their portfolios. The fund holds $2.9 billion in assets, showing its appeal to investors seeking income and tax perks.

Compare the yields of municipal and taxable bond funds by using the taxable equivalent yield. Simply divide the municipal yield by (1-tax rate). This gives investors a way to see the tax-exempt fund’s potential returns with taxes taken into account. It helps in making smart investment choices.

Where to Buy High-Yield Bond Funds

You can buy high-yield bond funds easily through online brokerages. They give investors a simple way to check out many options. Online brokerages make it easy to look and invest in these funds.

Bond ETFs are a top pick for many. They are easy to find with the best online brokers. These platforms also have tools to help you research and keep track of your investments.

But, not all online brokers have every bond mutual fund, including high-yield ones. So, if you have a specific fund in mind, make sure the broker has it.

Start your search by looking for well-known brokerage firms. They should have lots of investment choices and an easy-to-use platform.

Once you’ve found a good broker, start looking at their high-yield bond fund options. Think about the expense ratios and past performance. These factors can help you decide which ones to invest in.

Investing in high-yield bond funds can be great for your portfolio. But, it’s important to do your homework. Find the right online broker that meets your goals and has the funds you want.

Remember, investing has its risks. It’s wise to talk to a financial advisor. They can offer advice tailored to your financial situation and goals.


Choosing high-yield bond funds for your Roth IRA can boost your retirement savings. But, it’s key to look into the risks and include them in a varied portfolio. This way, you can smartly boost your investment plans by understanding the positives and the risks involved.

We’ve looked at some top high-yield bond funds in this article. They offer good yields and promise big returns. But, they also have more risk. That’s why getting advice from a financial expert is a good idea. They can check if these funds are right for your investment goals.

To grow your retirement nest egg, finding a good balance between risk and reward is vital. Adding high-yield bond funds to your Roth IRA is one way to aim for better returns. But, always be careful. Make sure to check the risks properly before investing. With the right information and advice, you can make choices that benefit your future financial well-being.


What are high-yield bonds?

High-yield bonds are known as junk bonds. They are from entities with lower credit ratings. These bonds are more risky but offer higher returns to cover that risk.

What should I consider before investing in high-yield bonds?

Think about the risk and rewards of high-yield bonds before investing. They should be just one part of your investments. Make sure the extra money you could earn is worth the added risk.

Which are the top high-yield bond mutual funds?

Top high-yield bond funds include Vanguard and iShares. Also, consider JPMorgan, SPDR, and VanEck’s offerings.

What is the Vanguard High-Yield Corporate Fund?

The Vanguard High-Yield Corporate Fund focuses on lower-quality corporate bonds. It offers a wide range of high-yield corporate bonds.

What is the iShares iBoxx $ High Yield Corporate Bond ETF?

The iShares iBoxx $ High Yield Corporate Bond ETF follows a U.S. high-yield corporate bond index. It has about 1,200 bonds in its collection.

What is the JPMorgan High-Yield Corporate Bond ETF?

JPMorgan’s ETF mirrors a U.S. high-yield corporate bond index. It includes over 1,300 bonds in its pool.

What is the SPDR Portfolio High Yield Bond ETF?

The SPDR ETF aims to mimic the performance of a U.S. high-yield bond index. It includes bonds with at least a year to maturity and values over 0 million.

What is the VanEck High-Yield Municipal ETF?

The VanEck ETF tracks U.S. high-yield tax-exempt bonds. Such bonds don’t pay federal income taxes, so they offer lower yields.

Where can I buy high-yield bond funds?

You can get high-yield bond funds through online brokerages, including most bond ETFs. Just be sure to check if your broker has the mutual fund you want.

How can investing in high-yield bond funds maximize my retirement savings?

Putting your money in the right high-yield bond funds can boost your retirement savings. Yet, always remember to diversify and understand the risks involved.

Source Links

Leave a Reply

Your email address will not be published. Required fields are marked *