The BlackRock Floating Rate Income Trust aims for high current income and capital preservation and has a current distribution rate of 11.3%. BGT has historically delivered solid returns, but with high levels of volatility. BGT currently trades at a premium to NAV, but historically has on average traded at a discount to NAV.
The BlackRock Floating Rate Income Trust offers a high 10.99% yield but faces potential distribution cuts due to expected Federal Reserve interest rate reductions. Despite outperforming fixed-rate bonds in the past, the fund's recent performance has lagged, and its net asset value has declined. The Federal Reserve is planning to reduce interest rates going forward, which will probably reduce this fund's income.
BlackRock Floating Rate Income Trust Fund is a closed-end fund designed to provide a steady income stream with reduced volatility compared to other fixed-income funds. Despite having a slightly lower yield than similar funds, it also has lower risk due to less leverage. The fund has been performing well recently, surpassing both investment-grade and high-yield bonds.
The BlackRock Floating Rate Income Trust Fund offers an attractive current yield of 11.26%, which is in line with its peers.
The article evaluates the BlackRock Floating Rate Income Trust as an investment option at its current market price. Investing in floating rate securities has been a successful strategy, delivering strong total returns. But that could change next year. I see an uptick in default rates and a more dovish Fed in 2024 as potential headwinds that will moderate returns going forward.
The BlackRock Floating Rate Income Trust is a closed-end fund that focuses on leveraged loans with the primary goal of generating current income for investors. The fund's distribution yield is well-covered, with most of the distribution coming from income received from underlying loans (96%) rather than return of capital. BGT maintains a balanced composition, with 62% of the portfolio in 'B' rated loans and only 9.35% in 'CCC' loans, demonstrating a diversified risk approach.
BlackRock Floating Rate Income Trust has been a strong performer, outpacing the S&P 500. The fund is currently trading at a discount to its net asset value, making it an attractive investment. BGT's income has been increasing along with higher interest rates, making it a good option for investors looking for a high income stream.
We review CEF market valuation and performance through the first week of July and highlight recent market action. CEFs were roughly flat on the week as NAVs fell while discounts remained resilient. CEF discounts tend to be procyclical, which remains an odd but welcome feature of the CEF market.
BGT generates a high distribution yield from a portfolio of junk loans. BlackRock Floating Rate Income Trust pays an attractive 11.8% forward distribution yield. However, I recommend investors avoid BGT as there is a mismatch between the fund's long-term returns of 5.4% over 15 years and the double-digit distribution yield paid.