TIAA-CREF High-Yield Fund Rated Five Stars by Morningstar

December 03, 2009

TIAA-CREF's High-Yield Fund has been better protected from the risks of default compared to many rival bond funds because of its conservative approach, according to a recent report by Morningstar Inc., which rates the fund five stars as of 11/30/09.

The fund's investments in debt from industries including electric, gas and oil helped the fund post better returns than most peers in the first half of 2009, according to Morningstar. Overall, the fund invests more of its money in bonds rated BB, the highest rated tier of high-yield bonds, than lower-rated bonds rated B or below, Morningstar wrote in its report. The fund is in Morningstar's High-Yield bond category, which rates a total of 467 funds.

The fund has a substantially lower holding in bonds rated below B than the market average of 27%, Morningstar said, citing Barclay's. Also, the fund's "very reasonable expenses" makes it a "compelling option" according to Morningstar, which cited the fund's experienced management team formed in 1995 and led by Kevin Lorenz.

The fund, with an inception date of 3/31/2006, is also rated five stars by Morningstar through the three-year period ended Nov. 30, 2009. You can learn more about the fund here.

For each fund/account with at least a three-year history, Morningstar calculates a Morningstar Rating™ based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's/account's monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10 percent of funds/accounts in a category receive five stars, the next 22.5 percent receive four stars, and the next 35 percent receive three stars, the next 22.5 percent receive two stars and the bottom 10 percent receive one star. (Each share class is counted as a fraction of one fund/account within this scale and rated separately, which may cause slight variations in the distribution percentages.) Morningstar proprietary ratings on U.S.-domiciled funds/accounts reflect historical risk-adjusted performance, are subject to change every month. They are derived from a weighted average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics. Past performance is not indicative of future returns.