Bond Funds Turbocharge Payouts

Monthly payouts from bond funds are soaring, with more raises likely to come.

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(Image credit: Getty Images)

The typical short-term taxable bond fund has lost a hard-to-swallow 4% to 6% this year through Sept. 9. Fast-climbing interest rates exacted this heavy cost, usurping two years or more of yield. But you know that. 

So here's a query: What is the typical growth rate of these funds' cash distributions since just before the Federal Reserve threw the interest rate switch in March? The answer: 94%. Monthly payouts from the 10 largest such bond funds are riding a rocket ship, nearly doubling already, with more raises to come. 

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Jeffrey R. Kosnett
Senior Editor, Kiplinger's Personal Finance
Kosnett is the editor of Kiplinger's Investing for Income and writes the "Cash in Hand" column for Kiplinger's Personal Finance. He is an income-investing expert who covers bonds, real estate investment trusts, oil and gas income deals, dividend stocks and anything else that pays interest and dividends. He joined Kiplinger in 1981 after six years in newspapers, including the Baltimore Sun. He is a 1976 journalism graduate from the Medill School at Northwestern University and completed an executive program at the Carnegie-Mellon University business school in 1978.