"No one should have a favorite child," Bill Gross told Barron's over the weekend. But Bill's "favorite child" is "about as good a deal as any in the bond market today."

Bill Gross is known as the Bond King – for good reason. He's the world's biggest bond-fund manager, responsible for some $800 billion in invested assets. He's also the best bond-fund manager who's ever lived. Even today, he's still as good as it gets: He beat 99% of his peers over the last five years.

Bill's "favorite child" fund has less than $1 billion in market cap. But he toldBarron's it was his "focus every morning." 

The fund yields 23%. It's the Pimco High Income Fund (PHK). According to Bill, "It isn't a high-yield fund anymore; 40% of its assets are high-yield, but 60% are investment-grade."

Since 1970, investment-grade bonds have paid about two percentage points higher than Treasury bonds, on average. So if Treasury bonds paid 4% interest, investment-grade "corporates" paid 6% interest.

However, in November, as the credit crunch hit its worst point, investment-grade corporates were paying over 9% interest, while Treasuries paid less than 3% – a difference of six percentage points. We have only seen such a wide "spread" once before, at the bottom of the Great Depression in 1932.

Unless you believe in the Next Great Depression, you want to own corporate bonds. They're now in a solid uptrend – and they're still paying much higher yields than Treasuries.

With the PIMCO High Income Fund, you get paid 23% in dividends on a better-quality portfolio of bonds than its name would lead you to believe. No wonder the Bond King calls it "about as good a deal as any in the bond market today."

Of course, when the market opens today, shares of PHK will probably jump higher because of a "Barron's Bounce." Fortunately, True Wealth subscribers already own it. Extraordinarily, PHK has soared by over 100% in the last two months!

Not every high-yield bond fond will show you 100% returns... But while most investors fret about the direction of the stock market, income plays like investment-grade corporate bond funds will likely do just fine.

The fall in the stock market we saw at the beginning of 2009 showed us what categories of investments are vulnerable. Good, safe income plays (like the types of bonds Bill Gross has been buying) held up extremely well.

Even if the bond funds you hold have a few bonds that default, you'll still do very well... The interest you can earn right now will more than compensate you for defaults.

If you're worried about the stock market in 2009, then consider investment-grade bonds – they're likely your highest-reward, lowest risk play for the year. Between the income from dividends and the capital gains, you should earn safe double-digit gains.

Good investing,

Steve

Editor's note: Steve Sjuggerud is a regular contributor to DailyWealth, a free investment newsletter focused on the world's best contrarian opportunities. We write with a simple belief in mind: You don't have to take big risks to make big money with your investments.