Mark Vaselkiv has run this fund with a sure hand since 1996. While the fund isn't likely to trounce the competitions during a heady bull run for junk, the slow and steady approach has been a winning formula over the long haul.
The $2.3 billion T. Rowe Price High Yield has a 10-year average annual return of 6.68%, and its three-, five- and 10-year returns are all among the top 8% of the category, according to Morningstar. The fund holds "safer" credit, such as cell-phone giant
Nextel(NXTL Quote - Cramer on NXTL - Stock Picks), so it's less likely to be the victim of several blowups. It is also the most diversified fund on the Five Fund lot: It holds more than 300 bond offerings, with none of them making up more than 1.2% of the fund.
With $111 million in assets, the Buffalo High-Yield fund is the smallest of the Five Funds and the only one that can be considered as something of an undiscovered gem. If you haven't heard of the fund, here's a good place to start: The fund's 6.62% three-year average return places it in the top 3% of all high-yield offerings, and its five-year return of 3.25% ranks it in the top 4%.
Kent Gasaway has managed the fund since its May 1995 inception, taking on David Eshnaur as a co-manager in 2000. Gasaway's fund tends to make some concentrated bets in particular sectors and stocks among its 87 bond holdings, which led the fund to trailing four-fifths of its peers in 1998 and 1999. However, his bets on long-term consumer trends -- with sizable portions of
Barnes & Noble(BKS Quote - Cramer on BKS - Stock Picks) and plenty of gaming-sector stocks -- has paid off extraordinarily well during the past three years.
The fund's expense ratio comes in at 1.04%, a tad higher than the others on the list but still well below the category average.
Stephen Schurr
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