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It might seem crazy to invest in a

high-yield bond fund today, but some people would say you're crazy not to.

Battered high-yield or junk bond funds are today's home-run swing, with big risks and the chance for big gains. To shed some light on how you might dip your toe into this trounced market, we're ushering the no-load (JAHYX) - Get Report Janus High-Yield fund into our Ima Winner Fund Club. To show you the perils of picking a dog in a risky fund category, we're dragging the bumbling, broker-sold (DETWX) Delaware Delchester fund into our Ima Loser Fund Club.

A glance at the rearview mirror makes the risks of investing in high-yield bonds obvious. During the tech boom, small tech and telecom shops issued a slew of junk bonds with low credit ratings and high interest rates. A sagging economy led to flagging demand for tech equipment over the past 18 months, and many of these companies are either out of business or struggling to pay their bondholders. Consequently, the average high-yield bond fund is down more than 7% over the past 12 months and is in the red over the past three years.

Why bother with them? Many of these bonds are selling for pennies on the dollar with yields that can be up to 9 percentage points higher than Treasury bonds'. So there is the opportunity for healthy returns. If you're gutsy enough to dip your toe into this choppy water -- not with more than 5% or so of your portfolio -- we've done some digging.

As usual, we'll check out the winner first.

Ima Winner

Janus growth funds might be tech-sick, but the company's $398 million High-Yield fund is a picture of health next to its jaundiced peers.

Long story short, the fund has the three traits that pasty bondniks like to see: above-average gains along with risks and expenses that are lower than its peers. Manager Sandy Rufenacht took over in 1996 and tends to stick with bonds issued by less-shaky shops. That measured strategy has led to a solid track record.

Past Winners

Core Bond: Freemont Bond

Core Stock: Vanguard Total Stock Market Index

Large-Cap Value: Dodge & Cox Stock

Large-Cap Growth: Growth Fund of America

Mid-Cap Growth: Bridgeway Aggressive Growth

Mid-Cap Value: Oakmark

Small-Cap Growth: Managers Special Equity

Small-Cap Value: Fidelity Low-Priced Stock

Tech: Dresdner RCM Global Technology

Rufenacht has topped his average peer each year, and the fund's 5.5% annualized gain over the past five years trounces a whopping 95% of its peers. The fund's 8.7% yield is below the category's 11.9% average, but that's at least partially because the fund's share price hasn't collapsed. A bond fund's yield is its income as a percentage of its

net asset value or share price. Many high-yield funds are sporting high yields not because their monthly income is higher, but simply because their share price has fallen through the floor.

Though Rufenacht's conservative streak might hold the fund back in a junk bond rally, it also has kept the fund's losses over the past 12 months to just 1.8% while 85% of the fund's peers have lost more. Over the rocky three years, the fund has fallen less in down months than its peers have, according to Morningstar.

The fund also doesn't carry a load or sales charge, and its 1% annual expense ratio is lower than its average peer's 1.29%. That adds up to a $100 annual fee on a $10,000 account vs. $129 for its average competitor. With higher returns, lower risk and a more modest price tag, this fund stands tall among this ravaged pack.

Ima Winner
Picking less-risky junk bonds pays off for Janus High-Yield

Source: Morningstar. Returns through Oct. 10.

Ima Loser

Past Losers

Core Bond: Putnam Income

Core Stock: Dreyfus

Large-Cap Value: Seligman Common Stock

Large-Cap Growth: Putnam New Opportunities

Mid-Cap Growth: Putnam OTC & Emerging Growth

Mid-Cap Value: Alliance

Small-Cap Growth: Alliance Quasar

Small-Cap Value: Prudential Small Company

Tech: T. Rowe Price Science & Technology

The Delaware Delchester fund might have new blood, but it'll take a huge comeback for this fund to be worth a look.

Peter Andersen leads a team of managers that came to Delaware Funds from Conseco Capital Management a little more than a year ago. The team had a decent record running the

(CHYAX)

Conseco High Yield fund for about two years, but it hasn't brightened this fund's bleak record yet.

The fund's 21.5% fall over the past 12 months lags a whopping 95% of its peers. While miserable, that's also consistent with the fund's floundering ways over the long term. It trails at least 95% of its peers over the past one, three, five and 10 years, according to Morningstar.

How bad have things been? If you'd bought shares of the fund five years ago, you'd have averaged a 5.5% annual loss. These steep losses have made the fund's yield, 13.9%, look tantalizing, but if you'd focused on that alone, you'd be licking some serious wounds.

As you might imagine, the fund's risk scores are equally ugly. It has fallen harder than its peers in down months over the past three months, earning a "high risk" rating from Morningstar.

Loser!
Delaware Delchester needs to learn some new tricks

Source: Morningstar. Returns through Oct. 10.

Making matters worse, the fund carries a sales charge and its 1.27% annual expense ratio is only narrowly below the category average. Given its miserable returns and its new management team's less-than-stellar start, you'd think they'd give it away.

Ian McDonald writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to

imcdonald@thestreet.com, but he cannot give specific financial advice.