Ways to Purchase Microsoft at an 8% Discount (Featuring a 7.7% Dividend)
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 01 2025
0mins
Source: NASDAQ.COM
Misconceptions about CEFs: Many investors misunderstand closed-end funds (CEFs), particularly regarding their fees and yields, which can lead them to miss out on significant dividends compared to ETFs like the SPDR S&P 500 ETF Trust (SPY).
CEF Fees Explained: While CEFs have higher average management fees (around 2.9%), these fees are taken from the fund's portfolio before dividends are distributed, meaning investors receive the full yield reported, which can be substantially higher than that of index funds.
Performance Comparison: CEFs like the BlackRock Science and Technology Trust (BST) and Columbia Seligman Premium Technology Growth Fund (STK) have outperformed the S&P 500 index, even after accounting for their fees, highlighting their potential for higher returns.
Investment Strategy: Investors can benefit from a "CEF rotation" strategy, buying CEFs when they are undervalued and selling when they are overvalued, while also enjoying high yields and diversification across various asset classes.
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Analyst Views on BST
About BST
BlackRock Science and Technology Trust (the Trust) is a diversified, closed-end management investment company. The Trust's investment objective is to provide income and total return through a combination of current income, current gains and long-term capital appreciation. The Trust seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its total assets in equity securities of United States (U.S.) and non-U.S. science and technology companies in any market capitalization range. The Trust seeks to pursue this goal primarily by investing in a portfolio of equity securities and also by employing a strategy of writing (selling) call and put options. The Trust invests in various industries, including software, semiconductors and semiconductor equipment, information technology (IT) services, financial services, broadline retail, entertainment, and diversified consumer services. 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.
BlackRock Updates on Closed-End Fund Discount Management Progress
- Discount Management Program Launch: BlackRock's discount management programs, initiated on January 1, 2026, aim to address trading discounts through a transparent framework, expected to run until September 30, 2026, enhancing shareholder alignment.
- Mid-Year Progress Snapshot: As of June 30, 2026, most funds in the program were trading below the 10% average daily discount threshold, indicating market stability for these funds and avoiding triggering tender offers.
- Tender Offer Conditions: If a fund's common shares trade at an average daily discount exceeding 10% during the measurement period, it plans to conduct a tender offer to repurchase at least 5% of its outstanding shares at 98% of NAV, providing a potential liquidity mechanism.
- Ongoing Monitoring and Updates: BlackRock will continue to monitor each fund's discount to NAV through the measurement period and expects to announce terms and timing of any resulting tender offers for qualifying funds after the period ends.
See More
BlackRock Funds Announce Per Share Distribution Plan
- Distribution Amounts Announced: BlackRock's various funds announced per share distributions for June 30, 2026, with BME leading at $0.2621 per share, indicating strong earnings potential that is likely to attract more investor interest.
- Managed Distribution Plan: All funds have adopted a managed distribution plan aimed at supporting stable monthly distributions, ensuring investors receive consistent cash flow, thereby enhancing investor confidence and market stability.
- Diverse Sources of Income: The distributions come from net income, short-term and long-term capital gains, and return of capital, with 57% of BCX's distribution sourced from return of capital, demonstrating flexibility and adaptability in income management.
- Annual Performance Expectations: By June 30, 2026, BME is expected to have total annual distributions of $1.5726, showcasing its competitiveness in the market, which may further enhance its net asset value and encourage long-term investor retention.
See More
BlackRock Closed-End Funds Distribution Announcement
- Distribution Frequency Change: BlackRock's closed-end funds have announced a shift from monthly to quarterly distributions to enhance visibility on future payouts, while still maintaining monthly distributions, a change aimed at boosting investor confidence and optimizing liquidity.
- Distribution Amount Overview: For instance, the BlackRock Municipal 2030 Target Term Trust (BTT) has a monthly distribution of $0.0464, while the BlackRock 2037 Municipal Target Term Trust (BMN) distributes $0.09375, with the stability of these amounts helping to attract income-seeking investors.
- Managed Distribution Plan: The BlackRock Capital Allocation Term Trust (BCAT) and BlackRock ESG Capital Allocation Term Trust (ECAT) have adopted a managed distribution plan ensuring a monthly distribution rate of 20% of each fund's 12-month rolling average net asset value, aimed at providing stable cash flow and enhancing investor trust.
- Tax Compliance Notification: All funds have sent distribution notices to shareholders in compliance with Section 19 of the Investment Company Act of 1940, ensuring transparency and adherence to tax reporting requirements, which helps maintain the company's reputation and mitigate potential legal risks.
See More
Investment Opportunities in High-Yield Closed-End Funds
- Yield and Growth Coexist: High-yield closed-end funds (CEFs) like BlackRock Technology and Private Equity Term Trust (BTX) and BlackRock Science and Technology Trust (BST) offer yields of 6.8% and 6.1%, respectively, which, while below the average of 8.6%, reflect strong price gains and investor confidence in the tech sector.
- Discounts and Potential: BTX and BST trade at discounts of 11% and 8.5%, respectively, which, despite price increases, remain below their five-year averages, indicating significant unrealized upside potential, especially as interest rates are expected to moderate.
- Portfolio Diversification: BTX holds leading tech firms like NVIDIA and Fabrinet, along with pre-IPO companies like Anthropic, showcasing an aggressive investment strategy, while BST adopts a more conservative approach with established firms like Broadcom and Apple, creating a complementary investment portfolio.
- Dividend Growth Expectations: As the yields of these funds decrease, management can more easily cover dividends with portfolio gains, leading to expectations of dividend increases for BTX, while BST maintains stability through its covered-call strategy, indicating potential for future dividend growth.
See More
BlackRock Funds Announce Per-Share Distribution Plans
- Distribution Plan Implementation: BlackRock's various funds announced per-share distributions on May 29, 2026, including $0.0697 for BCX and $0.2621 for BME, demonstrating the company's ongoing commitment to stable income distribution aimed at bolstering investor confidence.
- Transparent Income Sources: The distribution sources for each fund include net income, short-term and long-term capital gains, and return of capital, with 80% of BCX's distribution coming from capital return, reflecting strategic adjustments in its income strategy to ensure continuous cash flow in the current market environment.
- Managed Distribution Plan: All funds have adopted a managed distribution plan to ensure stable monthly distributions, and if income is insufficient, they will maintain distribution levels through capital returns, a strategy that helps attract investors seeking stable income and enhances market competitiveness.
- Annual Performance Expectations: As of May 2026, the annual total returns and distribution rates of the funds show varying degrees of growth, with BGR achieving an annualized return rate of 21.99%, indicating significant success in its investment strategy within the resources and energy sectors, thereby enhancing long-term investor confidence.
See More
BlackRock Funds Announce 2026 Distribution Plans
- Distribution Amounts Announced: BlackRock's various funds announced per-share distributions for April 30, 2026, with BCX at $0.069700 and BME at $0.262100, indicating the company's ongoing ability to distribute earnings and enhancing investor confidence.
- Managed Distribution Plan: All funds have adopted a managed distribution plan to ensure stable monthly distributions, with BCAT and ECAT distributing based on 20% of their 12-month rolling average net asset value, aimed at attracting more investors and maintaining liquidity.
- Transparent Sources of Income: As of April 30, 2026, the sources of distributions for each fund include net income, short-term, and long-term capital gains, with 87% of BCX's distributions coming from return of capital, reflecting the robustness of its investment strategy.
- Annual Performance Data: As of March 31, 2026, BCX reported an average annual total return of 15.21%, showcasing its competitiveness in the market and further solidifying BlackRock's leadership position in investment management.
See More
BlackRock Updates on Closed-End Fund Discount Management Progress
- Discount Management Program Launch: BlackRock's discount management programs, initiated on January 1, 2026, aim to address trading discounts through a transparent framework, expected to run until September 30, 2026, enhancing shareholder alignment.
- Mid-Year Progress Snapshot: As of June 30, 2026, most funds in the program were trading below the 10% average daily discount threshold, indicating market stability for these funds and avoiding triggering tender offers.
- Tender Offer Conditions: If a fund's common shares trade at an average daily discount exceeding 10% during the measurement period, it plans to conduct a tender offer to repurchase at least 5% of its outstanding shares at 98% of NAV, providing a potential liquidity mechanism.
- Ongoing Monitoring and Updates: BlackRock will continue to monitor each fund's discount to NAV through the measurement period and expects to announce terms and timing of any resulting tender offers for qualifying funds after the period ends.
See More
BlackRock Funds Announce Per Share Distribution Plan
- Distribution Amounts Announced: BlackRock's various funds announced per share distributions for June 30, 2026, with BME leading at $0.2621 per share, indicating strong earnings potential that is likely to attract more investor interest.
- Managed Distribution Plan: All funds have adopted a managed distribution plan aimed at supporting stable monthly distributions, ensuring investors receive consistent cash flow, thereby enhancing investor confidence and market stability.
- Diverse Sources of Income: The distributions come from net income, short-term and long-term capital gains, and return of capital, with 57% of BCX's distribution sourced from return of capital, demonstrating flexibility and adaptability in income management.
- Annual Performance Expectations: By June 30, 2026, BME is expected to have total annual distributions of $1.5726, showcasing its competitiveness in the market, which may further enhance its net asset value and encourage long-term investor retention.
See More
BlackRock Closed-End Funds Distribution Announcement
- Distribution Frequency Change: BlackRock's closed-end funds have announced a shift from monthly to quarterly distributions to enhance visibility on future payouts, while still maintaining monthly distributions, a change aimed at boosting investor confidence and optimizing liquidity.
- Distribution Amount Overview: For instance, the BlackRock Municipal 2030 Target Term Trust (BTT) has a monthly distribution of $0.0464, while the BlackRock 2037 Municipal Target Term Trust (BMN) distributes $0.09375, with the stability of these amounts helping to attract income-seeking investors.
- Managed Distribution Plan: The BlackRock Capital Allocation Term Trust (BCAT) and BlackRock ESG Capital Allocation Term Trust (ECAT) have adopted a managed distribution plan ensuring a monthly distribution rate of 20% of each fund's 12-month rolling average net asset value, aimed at providing stable cash flow and enhancing investor trust.
- Tax Compliance Notification: All funds have sent distribution notices to shareholders in compliance with Section 19 of the Investment Company Act of 1940, ensuring transparency and adherence to tax reporting requirements, which helps maintain the company's reputation and mitigate potential legal risks.
See More
Investment Opportunities in High-Yield Closed-End Funds
- Yield and Growth Coexist: High-yield closed-end funds (CEFs) like BlackRock Technology and Private Equity Term Trust (BTX) and BlackRock Science and Technology Trust (BST) offer yields of 6.8% and 6.1%, respectively, which, while below the average of 8.6%, reflect strong price gains and investor confidence in the tech sector.
- Discounts and Potential: BTX and BST trade at discounts of 11% and 8.5%, respectively, which, despite price increases, remain below their five-year averages, indicating significant unrealized upside potential, especially as interest rates are expected to moderate.
- Portfolio Diversification: BTX holds leading tech firms like NVIDIA and Fabrinet, along with pre-IPO companies like Anthropic, showcasing an aggressive investment strategy, while BST adopts a more conservative approach with established firms like Broadcom and Apple, creating a complementary investment portfolio.
- Dividend Growth Expectations: As the yields of these funds decrease, management can more easily cover dividends with portfolio gains, leading to expectations of dividend increases for BTX, while BST maintains stability through its covered-call strategy, indicating potential for future dividend growth.
See More
BlackRock Funds Announce Per-Share Distribution Plans
- Distribution Plan Implementation: BlackRock's various funds announced per-share distributions on May 29, 2026, including $0.0697 for BCX and $0.2621 for BME, demonstrating the company's ongoing commitment to stable income distribution aimed at bolstering investor confidence.
- Transparent Income Sources: The distribution sources for each fund include net income, short-term and long-term capital gains, and return of capital, with 80% of BCX's distribution coming from capital return, reflecting strategic adjustments in its income strategy to ensure continuous cash flow in the current market environment.
- Managed Distribution Plan: All funds have adopted a managed distribution plan to ensure stable monthly distributions, and if income is insufficient, they will maintain distribution levels through capital returns, a strategy that helps attract investors seeking stable income and enhances market competitiveness.
- Annual Performance Expectations: As of May 2026, the annual total returns and distribution rates of the funds show varying degrees of growth, with BGR achieving an annualized return rate of 21.99%, indicating significant success in its investment strategy within the resources and energy sectors, thereby enhancing long-term investor confidence.
See More
BlackRock Funds Announce 2026 Distribution Plans
- Distribution Amounts Announced: BlackRock's various funds announced per-share distributions for April 30, 2026, with BCX at $0.069700 and BME at $0.262100, indicating the company's ongoing ability to distribute earnings and enhancing investor confidence.
- Managed Distribution Plan: All funds have adopted a managed distribution plan to ensure stable monthly distributions, with BCAT and ECAT distributing based on 20% of their 12-month rolling average net asset value, aimed at attracting more investors and maintaining liquidity.
- Transparent Sources of Income: As of April 30, 2026, the sources of distributions for each fund include net income, short-term, and long-term capital gains, with 87% of BCX's distributions coming from return of capital, reflecting the robustness of its investment strategy.
- Annual Performance Data: As of March 31, 2026, BCX reported an average annual total return of 15.21%, showcasing its competitiveness in the market and further solidifying BlackRock's leadership position in investment management.
See More
