LVMUY - BGY: Limited Domestic Exposure When International Diversification Is Critical

2024-06-11 11:25:13 ET

Summary

• The BlackRock Enhanced International Dividend Trust offers attractive geographical diversification and a high level of income with a yield of 7.28%.
• The BGY closed-end fund's lower yield compared to similar funds appears to be partly due to its less aggressive use of options than its peers.
• The fund has underperformed US stock indices but has delivered a 7.16% total return since late January and is a suitable option for income-focused investors.
• American markets appear overvalued compared to foreign peers, so it is a good idea to diversify your assets internationally. This fund has very low domestic exposure.
• The fund is easily covering its distribution and trades at an enormous discount to net asset value.

The BlackRock Enhanced International Dividend Trust ( BGY ) is a high-yielding equity closed-end fund, or CEF, that should prove attractive to investors who are seeking to improve the geographical diversification of their portfolios and earn an attractive level of income at the same time. As of the time of writing, the BlackRock Enhanced International Dividend Trust yields 7.28%, which is well above the 1.54% trailing twelve-month yield of the MSCI World Index ( URTH ). However, it is a bit low when compared to other closed-end funds that employ a similar strategy:

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