Investors Should Focus on Closed-End Funds Yielding Up to 33.5%
Written by Emily J. Thompson, Senior Investment Analyst
Source: NASDAQ.COM
- Yield Advantage: Closed-end funds (CEFs) offer yields as high as 33.5%, significantly enhancing retirement income potential for investors, with a $500,000 investment generating $78,000 annually, compared to the 1% to 2% yields of traditional ETFs.
- Portfolio Diversity: For instance, BlackRock's Multi-Sector Income Trust (BIT) invests in high-yield corporate debt and securitized debt with an 11.3% yield, providing higher returns and stability despite a 29% leverage ratio compared to traditional ETFs.
- Market Opportunities: The India Fund (IFN), yielding 16.1%, invests in large-cap blue-chip stocks and is poised to benefit from a strong Indian stock market in 2026, currently trading at 92 cents on the dollar, below its net asset value, indicating a good buying opportunity.
- Risk-Reward Balance: While some CEFs like Oxford Lane (OXLC) offer yields above 33.5%, their investment in complex collateralized loan obligations (CLOs) carries higher risks, necessitating careful assessment of potential volatility against returns.
Analyst Views on BIT
Wall Street analysts forecast BIT stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for BIT is USD with a low forecast of USD and a high forecast of USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
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Current: 13.350
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Current: 13.350
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About BIT
BlackRock Multi-Sector Income Trust (the Trust) is a diversified, closed-end management investment company. The Trust's investment objective is to provide high current income, with a secondary objective of capital appreciation. The Trust seeks to achieve its investment objectives by investing, under normal market conditions, at least 80% of its assets in loan and debt instruments and other investments with similar economic characteristics. The Trust has investments in various sectors, such as oil, gas, and consumable fuels; real estate investment trusts; auto components; airlines; automobiles; banks; beverages; biotechnology; building products; chemicals; electric utilities; communications equipment; consumer finance; diversified telecommunication services; food products; information technology (IT) services; hotels, restaurants, and leisure; consumer discretionary; communications equipment; health care services, and media. The Trust's investment manager is BlackRock Advisors, LLC.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
