BDJ - BDJ: Growing NAV And Trades At Discount But Has A Few Caveats
2024-05-23 23:48:00 ET
Summary
- BlackRock Enhanced Equity Dividend Trust is a closed-end fund that aims to generate cash flows to support current income through dividend-paying stocks and option strategies.
- BDJ offers a current dividend yield of 8.7% and monthly distributions, making it attractive for investors seeking income in retirement.
- However, BDJ lacks exposure to the technology sector, which has limited its potential for capital appreciation compared to funds like BlackRock Science and Technology Trust (BST).
- The NAV has slightly improved over the prior year while simultaneously trading at a larger discount to NAV, potentially presenting an attractive entry opportunity.
Overview
I am always intrigued by closed end funds that can offer a high level of income while also having a solid history of total returns year after year. BlackRock Enhanced Equity Dividend Trust ( BDJ ) operates as a closed end fund that has the primary objective to generate cash flows to support current income. It does this by investing in dividend paying stocks while also implementing option strategies to amplify the returns when possible. We can see that BDJ's price has not delivered any meaningful growth over the last decade, however the total return still sits above 130% over the same time period through the continuous high distributions....
BDJ: Growing NAV And Trades At Discount But Has A Few Caveats