BKT - BKT: Worst Probably Over But Don't Get Overconfident

• BKT has had a rough 2022. While there is value in positions here, the same was true a few months ago, and that has not stopped the sharp losses from occurring.
• The fund does trade at a nice discount to NAV, and Fed tapering is expected to be less aggressive than previously announced. Those are the positives.
• The downsides are inflation remains red-hot, and BKT's duration level is pretty high. Further tapering, even at more modest levels, is going to pressure the value of the underlying securities.
• The reality is that both upside and downside are limited as a result, making this an income play but not much else.

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