Investors looking for yield in the CEF bond space are often attracted to high-yield funds. But those aren’t the only options available. Here’s a trio of bond CEFs that don’t play the high-yield game—so much, anyway. The one thing that closed-end funds, or CEFs, do really well that open-end mutual funds don’t do so well is income. That’s true across multiple investment approaches, but particularly in the stock space, where high-yielding CEFs are very common. However, bond CEFs often have very high yields, too. In recent years the search for high-yields has drawn investors to the junk bond arena, an area that hasn’t fared so well lately. And, thus, the question I recently got from a reader: “Are there any high-quality bond CEFs around?” Treasuries The answer to that question is yes, there are. However, you’ll need to know what you are buying. For example, the Federated Enhanced Treasury Income Fund (NYSE: FTT ) invests essentially all of its assets in U.S. treasures. Those are ultra safe investments, giving it an average credit quality of AAA. Now that said, FTT’s yield is a less than inspiring 2.5% or so. But, with so much money in super-safe bonds, what would you expect? The only thing to keep in mind here is the word “enhanced” that sits in front of “treasury” in the fund’s name. This isn’t just a treasury fund, it’s a little bit more. Closed-end funds often make use of tactics that open-end funds don’t. FTT does three things . First, it owns treasury securities. Second, it tries to adjust its duration to take advantage of interest rate shifts. Third, it writes options to enhance income. None of these things is particularly odd or frightening, but they are notable because they can change the dynamics of the investment. For example, if the fund makes a bad call on interest rate movements performance would suffer. But a lot of funds do this very same thing. And options can limit upside potential, though I wouldn’t expect a treasury fund to rocket higher over a short period of time. So this is something to note, but I wouldn’t lose too much sleep over it. However, from a bigger picture, if you are looking at a CEF, you’ll want to know if they do things that similar open-end funds aren’t. Is now the time to look at FTT? Well… If you are concerned about high-risk investments, you might want to consider FTT. But you’d clearly be in good company, since the fund’s average discount has narrowed pretty steadily since last year. It’s currently trading at an around 3% discount versus its three year average of 9% or so. And it’s annualized net asset value, or NAV, performance over the past five years through August is a loss of around 1% a year. That’s not exactly inspiring. So, if you do look at FTT it’s more about a flight to safety than anything else. Investment grade bonds If you are looking for a bond CEF beyond high yield and want a little more than what FTT has to offer, the Invesco Bond Fund (NYSE: VBF ) is another high-quality bond fund that you might want to look at. Around 85% of the fund’s assets are invested in bonds rated BBB or better. Another 10% or so is in BB bonds, the highest quality of the high-yield debt spectrum. So is it a pure investment grade bond fund? No. But it’s a far cry from a junk bond fund. The fund can invest up to around 20% of assets in lower grade debt, if it wants to. But, in general, if you are looking to minimize your exposure to junk bonds, this fund will accomplish that. Like FTT, though, don’t expect a lot of distribution. VBF’s distribution yield is around 4.8% or so. That’s a lot better than the 2.5% offered by FTT, but a far cry from the 10%+ yields you can find in junk bond CEFs. Interestingly, VBF’s discount is currently nearing 9%. That’s slightly wider than its three-year average discount of just under 8%. So investors haven’t been showing this CEF much love of late. The fund actually has a lot more going for it on the performance side of things than FTT, too. For example, over the trailing five years through August the fund’s annualized NAV return was about 5.25%. It’s an older fund than FTT, so it also has a trailing annualized 10-year return of around 5.75% and a trailing 15-year return of 6.25%. All numbers assume reinvested distributions. The fund, for the most part, is pretty boring. It owns bonds. The management team mixes a top-down approach to the bond market with a bottom-up approach to individual bond selection. That’s pretty common stuff in the bond world. So, if you are looking for a long-term bond holding that isn’t junk and isn’t just a flight to safety play, VBF is worth a closer look. Just to prove the case Just to prove there’s more than one option in the investment grade CEF space, here’s another: the Morgan Stanley Income Securities Inc. (NYSE: ICB ). Like VBF it can invest in high yield, but generally doesn’t do so to a material degree. As of March, around 12% of the portfolio was in bonds rated BB or below, a weighting management described as opportunistic. ICB’s distribution yield was recently in the 3% range. It’s discount was about 10%, in-line with its trailing three-year average. Trailing NAV performance, meanwhile, was fairly close to that of VBF, with an annualized return of 5.1% over the trailing five years, 5.7% over the trailing 10 years, and 6.3% over the trailing 15-year period through August. The two funds have fairly similar risk profiles, as well. Yes, there are options… All in, I’d give the edge to Invesco Bond Fund here, but that doesn’t mean you shouldn’t take the time to compare all three funds I’ve noted. And, frankly, there are other CEFs that invest in investment grade debt, too, so I wouldn’t stop my search with this trio. The idea here was to whet your appetite, not sate it. But FTT, VBF, and ICB are all solid, come from well-known families, and would suit the needs of an investor looking for an alternative to a high-yield CEF. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More…) I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.