The Liontrust GF High Yield Bond fund has become notable thanks to one thing: A 10% dividend yield. It is among only a handful of funds available to retail investors across Europe that currently offers double-digit yields. While the fund focuses on high-yield corporate bonds, it also invests in investment-grade corporate bonds, government bonds, cash, or assets that can be turned into cash quickly.
" How does the fund yield 10%? While the fund manager attributed about 85% of the income generated by the fund to the underlying long-term holdings, Phillips also cited examples when his trade timing had a profitable impact. He said the steep rise in yields for short-term U.S. government bonds and the increase in credit default swap spreads during a U.S. government standoff over the debt limit meant there was an opportunity to capitalize.