2024-03-12 13:41:10 ET
Summary
- BlackRock Credit Allocation Income Trust is a debt-focused closed-end fund that boasts a 9.23% current yield.
- The BTZ closed-end fund claims to invest in a combination of floating-rate and fixed-rate debt, but the portfolio is almost entirely in fixed-rate assets with floating-rate securities an afterthought.
- The BTZ fund substantially underperformed competing funds that are more flexible in the balance between floaters and fixed-rate bonds over the past three years.
- The fund did manage to fully cover its distributions for the FY2023 period, but it had to rely on net unrealized gains to accomplish that goal.
- The fund's shares have substantially outperformed its portfolio recently, but the shares still trade at a discount.
The BlackRock Credit Allocation Income Trust ( BTZ ) is a debt-focused closed-end fund, or CEF, that income-seeking investors can employ as a method of pursuing their goals. The fund does fairly well in this respect, as its current 9.23% yield is easily among the highest yields that can currently be obtained in the fixed-income space. CEF Data classifies the BlackRock Credit Allocation Trust as a multisector bond fund, so here is how the fund's yield compares to a selection of other closed-end funds that are classified in the same way:
Fund | Current Yield |
BlackRock Credit Allocation Income Trust | 9.23% |
Doubleline Opportunistic Credit Fund ( DBL ) | 8.71% |
PIMCO Income Strategy Fund ( PFL ) | 11.52% |
Western Asset Diversified Income Fund ( WDI ) | 11.88% |
Guggenheim Strategic Opportunities Fund ( GOF ) | 14.87% |
Read the full article on Seeking Alpha
For further details see:
BTZ: A Decent Multi-Sector Bond Fund, But Lack Of Floaters A Risk