CII - CII: Appealing Long-Term Fund For Generating Attractive Monthly Distributions
2024-03-19 15:30:05 ET
Summary
- BlackRock Enhanced Capital and Income Fund (CII) trades at an attractive discount relative to its long-term level and has strong performance thanks to its tech exposure.
- CII implements a covered call strategy, which can limit upside potential but brings in options premiums for higher distribution rates.
- The fund's distribution yield is 6.23% and, naturally, primarily relies on capital gains from its portfolio, which has not been a problem lately.
Written by Nick Ackerman, co-produced by Stanford Chemist.
BlackRock Enhanced Capital and Income Fund Inc ( CII ) continues to trade at an attractive discount. The fund's performance has been quite strong thanks to the heavy tech exposure it carries. This is a closed-end fund that benchmarks against the Russell 1000 Index and also implements a covered call strategy on a portion of its portfolio. The covered call strategy can limit some upside potential, but it can also bring in options premiums that can mean higher distribution rates for its shareholders.
Our last update was near the lows of last October, which has seen the fund's performance become quite strong since that time. The fund's discount has also widened out since our last update, which would have seen the total returns a bit higher had that not happened....
CII: Appealing Long-Term Fund For Generating Attractive Monthly Distributions