BTZ Stock Recent News

Taxable closed-end fund discounts have narrowed, reducing their attractiveness, while credit spreads have tightened, producing returns in some areas of the CEF market. Municipal CEFs remain exceptionally cheap, with discounts wider than 99% of historical observations. The risk-reward in the taxable bond CEF space is on the downside, while the upside potential in municipal CEFs is significant, but dependent on a shift in Fed policy and inflation.

BlackRock Credit Allocation Income Trust provides diversified exposure to fixed-income securities with a multi-sector approach. BTZ remains attractively valued despite a bit of a narrowing discount, but distribution coverage has worsened. The fund utilizes derivatives with its highly flexible investment strategy, which could potentially provide for capital gains to fund the payout.

BTZ invests with a split between investment-grade and below-investment-grade debt with a multi-sector approach. The fund's latest discount has dropped into the double-digit area, where it becomes a more appealing investment option.

BTZ provides high current income from a portfolio of credit instruments. It has a relatively high duration of 6.4 years, which caused 2022's poor performance.

BTZ has been under pressure along with everything else through 2022 as interest rates have wreaked havoc. Now that some large declines are in and the fund has gone to a discount, there could be a better opportunity here.

This diversified CEF, while volatile, can be a great pick to deliver yield. The portfolio is managed by the reputable and prestigious BlackRock.