For the average investor, high yield mutual funds are the best method to invest in bonds rated below investment grade, popularly known as junk bonds. This is because these funds hold a wide range of such securities, significantly reducing portfolio risk. In addition, these funds provide better returns than investments with higher ratings, including government and corporate bonds. Further, because the yield from such bonds is higher than investment grade securities, these investments are less susceptible to interest rate fluctuations.

Below we will share with you 4 top rated high yield bond mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all high yield bond funds, investors can click here to see the complete list of funds.

Vanguard High-Yield Corporate Investor (VWEHX - MF report) seeks high current income. The fund invests a lion’s share of its assets in corporate bonds that are believed to provide high yield and are rated below Baa by bond-rating agencies including Moody's. It generally focuses on acquiring "junk bonds" having credit-quality between medium and lower scale. The bonds included in the fund’s portfolio are expected to have maturity durations of short and intermediate term. The high yield mutual fund has a five-year annualized return of 8.2%.

Michael L. Hong is the fund manager and he has managed this high yield mutual fund since 2008.

Transamerica High Yield Bond A (IHIYX - MF report) invests a major portion of its assets in high-yield bonds that are also expected to have high level of risk associated with them. Though, the fund primarily invests in debt instruments that are issued in the U.S., it may also allocate a significant potion of its assets in non-U.S. debt securities. The high yield mutual fund has a five-year annualized return of about 8.2%.

The high yield mutual fund has an expense ratio of 0.97% compared to a category average of 1.07%.

JPMorgan High Yield A (OHYAX - MF report) seeks high current income. The fund invests a large chunk of its assets in bonds and other debt instruments including loan assignments, Unfunded Commitments and preferred stocks having ratings below investment grade. It invests a maximum of 30% of its assets in loans and Unfunded Commitments. Average weighted maturity of the fund’s holdings varies from three to ten years. The high yield mutual fund has a five-year annualized return of 7.5%.

As of February 2015, this high yield mutual fund held 1011 issues, with 0.88% of its total assets invested in Chrysler Grp Llc / Cg Co-Iss 8.25%.

Buffalo High-Yield (BUFHX - MF report) allocate majority of its assets in "junk bonds." Though the fund focuses on acquiring bonds having intermediate-term maturities, it can also consider bonds having maturities other than intermediate-term. It may also invest in other securities including investment grade bonds, dividend paying stocks and U.S. Treasury instruments. The high yield mutual fund has a five-year annualized return of 7.2%.

The high yield mutual fund has an expense ratio of 1.01% compared to a category average of 1.07%.