Low yields on fixed-income investments have investors scrambling for income. High yield bond funds are a natural alternative, but which funds should you consider to balance higher yields and risks? We asked several leading advisers for their suggestions.

Helen Huntley, Holifield Huntley Financial Advisers, St. Petersburg, Fla.

I like Metropolitan West High Yield Fund (MWHYX) for the consistency with which it has out-performed most of its peers in both good and bad markets.

The fund takes a flexible approach, using both a top-down approach based on interest rates and economic conditions and bottom-up analysis based on fundamentals of specific issues.

Recently the fund has become more defensive, favoring sectors such as utilities and energy. Net expenses are capped at 0.80 percent, below-average for the category, but there’s also a 0.25 percent 12(b)-1 fee.

Even with that cost, the fund’s performance compares favorably to that of a low-cost offering like Vanguard High Yield Corporate (VWEHX), which has an expense ratio of 0.28 percent. It’s also a plus that

MWHYX is available on many no-load, no-transaction-fee platforms. Minimum investment is $5,000. Annual turnover is 40 percent and 12-month yield is 8.16 percent.

Through June, the trailing three-year average annual return is 9.92 percent, compared to 5.47 percent for the category. That reflects the fact that the fund lost less during 2008 and gained more in 2009.

Bobbie D. Munroe, CFP, Fraser Financial, Atlanta

We use Vanguard High Yield Corporate Fund (VWEHX). It has average risk and return with low expenses (.28 percent) and provides good exposure to this asset class.

Additionally just under 14 percent of the holdings are in foreign corporations, a feature we like. All in all, we feel like this is one where we can for the most part “set it and forget it.”

When I am working with smaller portfolios (perhaps $100K or under) we stick with just a couple of funds or ETFs. But over that amount, I do diversify the bond holdings just as I diversify the equities. In every case, high yield is a player.

But for my more conservative investors, I will limit high yield to about 10 percent of the fixed income holdings (for a 50/50 portfolio that would be 5 percent). For moderate or aggressive investors that may move up to as much as 20 percent of the fixed income holdings (for a portfolio that is 30 precent fixed-income this would be 6 percent).

Penny Marlin, CFP, Marlin Financial, Delray Beach, Fla.

I am currently using two mutual funds and 2 ETF’s for high yield bonds.

Regarding the mutual funds, I have used MainStay High Yield Corporate Bond fund (MHCAX) and Neuberger Berman High Income Fund (NHIAX) .

Regarding the Mainstay fund, I am using this in one client’s 40(k)k plan since it is the only choice in this category and serves as part of bond allocation.

I also have it another client account since they were holding this fund when I took over the account and see no reason not to continue to hold it.

I have also bought the Neuberger Fund – primarily because I can buy the no load shares without a transaction fee at Schwab.

William E. Houck, CFP, Modera Wealth Management, Westwood, N.J.

We believe the high yield category provides a diversification benefit and should be incorporated into most client portfolios. As with all high yield bond funds, investors will need to have the risk tolerance to weather periods of high volatility.

PIMCO High Yield Institutional (PHIYX): This fund invests in slightly lower credit quality bonds than the Vanguard product so it can make for a good complement.

Expenses are low at 0.55 percent but turnover is high at 125 percent. This fund has a track record that dates back to 1992 with an average annualized return of 8.7 percent.

As of July 31, 2010, the fund holds 681 bonds with a 7.9 percent average coupon. The fund has a 4 year average duration and has total assets of $5.5 billion.

Vanguard High Yield Tax Exempt (VWAHX): This fund invests in lower quality municipal bonds. Since the income is federally tax exempt, we like this product for high tax bracket investors that invest with taxable accounts.

The fund has a favorable expense ratio of .20 percent.

This fund has a track record that dates back to 1978 with an average annualized return of 6.9 duration. As of July 31, 2010, the fund holds 755 bonds with a 4.5 percent average coupon. The fund has a 7.1 year average duration and has total assets of $6.8 billion.