My definition of a high yield is any yield at least twice the level of the S&P 500's yield. The threshold is currently around 2.56%. An ultra-high yield, in my view, is one that's four times higher than the S&P 500's yield. To reach that lofty level, a yield would need to be at least 5.12%.

Many income investors would be happy to receive yields of over 5.12%. But what if you could get a yield of roughly triple that amount? Believe it or not, you can. These three funds offer sky-high yields of 15% or more -- and they even trade at a discount.

1. abrdn Life Sciences Investors

The abrdn Life Sciences Investors (HQL 1.12%) is a closed-end fund (CEF) that, as its name indicates, invests primarily in life sciences companies. Aberdeen Investments launched this fund in May 1992, so it has a long track record.

As of March 31, 2025, the abrdn Life Sciences Investors fund owned 136 stocks. Its top positions include Regeneron Pharmaceuticals, Amgen, Gilead Sciences, Vertex Pharmaceuticals, and Alnylam Pharmaceuticals.

This CEF currently pays a distribution yield of 15.06%. It's also available at a discount of 9.36% below the net asset value (NAV). The abrdn Life Sciences Investors fund uses relatively low leverage, with its effective leverage ratio at only 2.26%. The fund's annual expense ratio of 1.36% is also relatively low for a CEF.

Since its inception, the abrdn Life Sciences Investors fund has delivered an average annual total return (based on its market price) of 8.12%. Over the last five years, its average annual total return is 6.84%. The CEF clearly can't pay distribution yields at the current levels with those kinds of returns without eating into investors' paid-in capital.

2. BlackRock Capital Allocation Term Trust

If you're looking for a jaw-dropping yield, check out the BlackRock Capital Allocation Term Trust (BCAT 0.28%). This CEF, managed by huge investment company BlackRock, offers a distribution yield of (you might want to sit down for this)... 23.88%. Also, the fund trades at a 6.04% discount to its NAV. And it doesn't use any leverage. Too good to be true? No, although there is a catch that we'll discuss shortly.

The BlackRock Capital Allocation Term Trust invests in both equity and debt securities. Its portfolio currently includes 1,641 holdings. Top equity positions include Microsoft, Amazon, Google parent Alphabet, Mastercard, and Marsh & McLennan.

How does this CEF pay such a super-high yield? It sells options and uses the premiums to boost its distributions. With the stock market's volatility unusually high, the BlackRock Capital Allocation Term Trust is making more money from selling options than it normally does.

Now for some important details. The BlackRock Capital Allocation Term Trust has a 12-year limited term. This means that 12 years after its inception (which was on Sept. 28, 2020), the fund will liquidate its holdings and return the money to shareholders. However, the CEF has the option of converting to a perpetual fund before its term ends.

Also, the fund's average annual total return since inception is only 4.81%. The BlackRock Capital Allocation Term Trust can't pay distributions at the current level without its NAV declining.

3. BlackRock Science and Technology Term Trust

Another CEF managed by BlackRock pays a distribution yield of exactly 15% right now. I'm referring to the BlackRock Science and Technology Term Trust (BSTZ -0.28%). This fund trades at a 7.17% discount to its NAV.

This CEF shares two important things in common with the other BlackRock fund on our list. First, it has a 12-year limited term but could convert to a perpetual fund. Since the BlackRock Science and Technology Term Trust launched on June 26, 2019, the fund will liquidate its assets in another six or so years unless it converts to perpetual. Second, the CEF sells options to generate premiums to increase its distributions.

As you might have guessed, this CEF focuses on investing in science and technology companies. It currently owns 293 stocks, with top positions including Project Debussy (BlackRock's private investment in software company Databricks), Nvidia, Project Picasso (BlackRock's private investment in quantum computer company PsiQuantum), and Spotify Technology.

Is there a big fly in the ointment with this ultra-high-yielding fund? Unfortunately, yes. The BlackRock Science and Technology Term Trust has delivered an average annual total return of 8.27%. This isn't bad, but it's not nearly enough to fund the distributions at current levels without eroding an initial investment.