BTO - BTO: Diversified Financial Exposure But Waiting For A Sale

2024-03-11 04:31:22 ET

Summary

• John Hancock Financial Opportunities Fund is a closed-end fund that provides primarily equity exposure to the financial sector.
• BTO currently trades at a bit of a premium, but historically, this valuation suggests it actually isn't looking expensive.
• BTO has struggled over the last year due to having regional banking exposure.

Written by Nick Ackerman, co-produced by Stanford Chemist.

John Hancock Financial Opportunities ( BTO ) is a closed-end fund that provides equity exposure to the financial sector. That includes both large, too-big-to-fail banking institutions and regionals; even some asset management and REIT exposure is thrown in there as well. The fund currently trades at an ever so slight premium, though a premium is not unusual for this fund. In fact, historically speaking, the current valuation is right near its longer-term level.

Since our last update, BTO has performed poorly. That said, it has been quite some time since we've given this fund a look. Since then, we had the banking crisis hit in March 2023, and even more recently, there have been some questions about financial stability popping back up again. Even despite the added volatility in this space, the fund was trading at a slight discount the last time we touched on this name. That means performance would have been even worse if it hadn't been for the fund moving to trade at a bit of a premium to its NAV per share....

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