To limit risks in difficult periods, some investors may prefer holding a short-term high yield fund. But over the long term, funds with greater average maturities and higher yields are likely to outperform. One solution is to hold a short-term fund and a longer portfolio. David Mazza of State Street Global Advisors argues his two high-yield ETFs can complement each other. While the short-term funds has securities with maturities of 0 to five years, the intermediate choice has most of its assets in maturities of five to 10 years. To hold short-term high-yield securities in an actively managed mutual fund, consider Osterweis Strategic Income ( OSTIX). This year the fund returned 4.5%. Portfolio manager Carl Kaufman has the flexibility to buy a variety of kinds of bonds, but in recent years he has focused on short-term high yield issues. He says that the short bonds provide relatively attractive yields. "You are not getting paid a whole lot more to buy an eight-year bond than you are to buy a two-year bond," he says. While many bond funds hold hundreds of issues, Kaufman runs a more concentrated portfolio, owning about 100 names. He shops carefully, looking for undervalued names. When he can't find bargains, Kaufman holds cash. At the end of the second quarter, the fund had 14% of assets in cash. That helped to cushion the fund when interest rates rose in June and many high-yield bonds sank. Kaufman often puts his cash stake to work when high-yield bonds suffer one of their periodic corrections. During the downturn of 2008, he scooped up bonds at depressed prices. He figures that another buying opportunity will appear soon enough. "The market is very nervous right now," he says. "If there are surprises from the Federal Reserve or the economy, bonds will fall, and that will be a good time to buy." Follow @StanLuxenbergThis article was written by an independent contributor, separate from TheStreet's regular news coverage.