There are some funds where the dividend yields are pretty much off the charts: http://www.nasdaq.com/dividend-stocks/
How do these funds pay these astronomical dividends? What is the catch that is not obvious?
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Look at their dividend history. The chart there is simply reporting the most recent dividend (or a recent time period, in any event).
GF for example: http://www.nasdaq.com/symbol/gf/dividend-history
It's had basically two significant dividends and a bunch of small dividends. Past performance is not indicative of future returns and all that. It might never have a similar dividend again.
What you're basically looking at with that chart is a list of recently well-performing funds - funds who had a good year. They obviously may or may not have such a good year next year.
You also have funds that are dividend-heavy (intended explicitly to return significant dividends). Those may return large dividends, but could still fall in value significantly. Look at ACP for example: it's currently trading near it's 2-year low. You got a nice dividend, but the price dropped quite a bit, so you lost a chunk of that money. (I don't know if ACP is a dividend-heavy fund, but it looks like it might be.)
GF's chart is also indicative of something interesting: it fell off a cliff right after it gave its dividend (at the end of the year). Dropped $4. I think that's because this is a mutual fund priced based on the NAV of its holdings - so it dividended some of those holdings, which dropped the share price (and the NAV of the fund) by that amount. IE, $18 a share, $4 a share dividend, so after that $14 a share. (The rest of the dividends are from stock holdings which pay dividends themselves, if I understand properly). Has a similar drop in Dec 2013. They may simply be trying to keep the price of the fund in the ~$15 a share range; I suspect (but don't know) that some funds have in their charter a requirement to stay in a particular range and dividend excess value.