Treasury yields may not have room to fall further and bond funds of all stripes—with the exception of junk-bonds funds—have been the year’s top performers. But low yields have made it difficult for income-seeking investors to make a buck. This equity fund courts risk, but its unusual strategy results in an attractive yield.

The Federal Reserve has made the commitment to maintain interest rates at artificially low levels for the next two years. Meanwhile, worries of stagnating economic growth continue to weigh on investors, many of whom spent much of August in “risk-off” mode. During that period, Treasury bonds became the investment darling du jour. In a sign of the market’s aversion to risk, on Aug. 18, the yield on 10-year Treasuries hit an all-time low of 1.98 percent, creating a negative real yield environment in which investors essentially paid the government to hold their money.

In this environment, stocks and bonds that carry even the slightest hint of risk have fallen out of favor. Consequently, the yields on even the lowest-risk stocks and bonds have been driven to abysmally low levels. Alpine Dynamic Dividend (ADVDX) can be an antidote for today’s low-yield environment, though it’s suitable only for investors with an appetite for risk.

The fund’s management runs the three-sleeve portfolio on what amounts to a dividend-capture strategy. This strategy involves purchasing a company’s stock in time to collect its dividend, and holding the shares long enough to qualify for preferential tax treatment before ultimately selling them. The first sleeve of the portfolio is geared toward financially solid companies that offer attractive dividend yields and the potential for capital appreciation. The second sleeve of the portfolio is geared toward financially solid companies that offer attractive dividend yields and the potential for capital appreciation. The portfolio’s third sleeve is dedicated to turnaround companies that are in the process of reviving their businesses.

This three-sleeve approach has resulted in an eye-popping 11.9 percent yield, making Alpine Dynamic Dividend one of the highest-yielding funds in Morningstar’s Large Blend category. However, this strategy does have its drawbacks. The fund’s yield may be high, but so is its turnover rate, which recently clocked in at a sky-high 176 percent. However, Alpine Dynamic Dividend has made a capital gains distribution in only one year of its eight-year history. This means that management’s succeeded in matching capital gains with capital losses, which makes the fund extremely tax efficient.

Nevertheless, the fund racks up significant brokerage commissions—more than $7.2 million last year—creating a high performance hurdle for Alpine Dynamic Dividend. It also leads to a fairly high annual expense ratio of 1.18 percent.

Another potential red flag: The fund’s unique strategy and rapid-fire trading negate most of the defensive qualities offered by dividends. The fund’s 2008 performance provides an excellent example of this pitfall. In that year, Alpine Dynamic Dividend plunged by almost 49 percent, compared to a 37.8 percent loss for its average peer.