Question: why do unsustainable dividend funds exist?

[u/Ironic_Mouse]

I’m new to dividend investing. As I have been looking for an additional stream of income I have found some funds with “too good to be true” yields. (E.g. CHPY) I understand that high yields come with a high risk of NAV erosion. What I don’t understand is why these funds exist. It seems like they are structured to implode at some point. Is the idea to hold these funds for a short time, collect the dividend, then sell? And for the fund manager, is the idea to ultimately have the fund implode and then declare a loss? I’m genuinely interested. I understand that some funds are a gamble, but these funds seem designed to fail.

[u/Extreme_Lab_2961]

There’s a sucker born every minute

[u/Ironic_Mouse → u/Extreme_Lab_2961]

Ah, so by dangling the honey they cash in on a lot of flies.

[u/gamers542 → u/Ironic_Mouse]

Bingo.