NEW YORK ( TheStreet) -- Since the financial crisis, high-yield bonds have soared. During the past five years, high-yield funds returned 17.1% annually, compared to 7.2% for intermediate-term bond funds, according to Morningstar. The high-yield funds invest in bonds that are rated below-investment grade. After being clobbered in 2008, the low-quality bonds rallied sharply as investors regained confidence.During the rally, funds that took on the most risk tended to do best. The aggressive portfolios focus on bonds that are rated B and CCC, the two lowest categories in the high-yield universe. Investors flocked to the low-quality issues that provide the most yield. Cautious funds did less well because they emphasized bonds rated BB -- the highest rating in the below-investment grade market.
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