Double-digit yields make most serious investors nervous, as they should as there is a history of high-yield funds that are littered with products that paid eye-catching distributions for a few quarters before quietly eroding into irrelevance. Although they technically delivered income, they did so while also destroying the capital that was supposed to generate it.
That said, not every high-yield fund is a trap, as there is a meaningful difference between a yield manufactured through financial sleight of hand and one that comes from a legitimate, repeatable business model. The four funds on this list all clear 12%, some actually go well above it, but each one is earning this kind of yield in a way that feels like it would hold up to even the most difficult kind of scrutiny.
This post originally appeared at 24/7 Wall St.