2024-07-24 23:13:40 ET
Summary
- The BlackRock Multi-Sector Income Trust has seen a negative performance since our prior 'Sell' rating, with -6.9% price loss in the process.
- BIT has a multi-asset approach with a bar-belled portfolio, being long a pocket of BB and B names versus a sleeve of AAA-rated assets.
- The CEF has seen its premium to NAV normalize, a factor which has contributed to a better valuation framework.
- The CEF's 10% distribution is still not supported, with the fund historically being able to counter NAV leakage via active management.
Thesis
The BlackRock Multi-Sector Income Trust ( BIT ) is a fixed income closed-end fund from BlackRock that we have covered in the past. We identified the name as a winner during the Fed rate hike cycle given its duration hedged approach, and then outlined our case to holding the CEF (which we did in our portfolio) until the beginning of this year, when it was time to divest the name....
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For further details see:
BIT: Premium Normalization For This CEF, 10% Distribution (Rating Upgrade)