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10 High-Yield Funds to Avoid

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We've all heard that the Federal Reserve is considering a December hike in interest rates, which would be the third bump in 2017. If and when it does increase rates, the new target would be a mere 1.5%. For many investors, bonds yielding that much simply don't provide enough income, especially when inflation is tracking around 2%.

The extremely low-interest-rate environment has meant CDs aren't worth the time, and old-fashioned Treasury bonds aren't much help in getting investors any closer to a comfortable retirement. Meanwhile, sky-high prices for many dividend stocks have caused their yields to fall, too – leading investors to look at more exotic alternatives, such as high-yield funds, to get more cash flow from their nest egg.


There's just one problem: Many of these funds are unstable, with several slashing their payouts regularly and seeing big price drops as a result. While some funds are great, many are "yield traps" that lure investors in with the siren song of an appealing headline dividend yield, but disappoint after the "buy" button has been pressed.

Here are 10 high-yield funds that have gotten a lot more popular – and dangerous – in recent years.

SEE ALSO: Kiplinger ETF 20: Our Favorite Exchange-Traded Funds

Data is as of Oct. 13, 2017. Click on symbol links in each slide for current share prices and more. Yields represent the trailing 12-month yield, which is a standard measure for equity funds.


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