Blackrock Innovation & Growth Trust (BIGZ) Stock

If you've been investing for a while, you've probably thought about private equity more than once. Adding exposure to “PE” firms, which buy and sell privately held businesses, is a great way to diversify beyond the big names of the S&P 500.

BlackRock Innovation and Growth Term Trust focuses on small and mid-cap technology stocks, including private companies, with a 12% coverage ratio for covered calls. The fund's performance has been underwhelming since October 2022, up only 5% in share price and 25% in total returns, potentially due to its choice of stocks and private holdings. Currently trading at a NAV discount of -13%, the fund pays about 9 cents per share in monthly dividends, subject to change based on NAV fluctuations.

The BlackRock Innovation & Growth Term Trust fund has been performing poorly since the equity bear market in 2022. Despite strong equity markets, the venture capital portfolio of BIGZ has seen little turnover and continues to decline in value. I believe BIGZ will face challenges until high-growth small-cap companies start to see rewards in the market.

Growth and innovation stocks are expected to perform well in 2024 after experiencing a cycle of boom and bust. The BlackRock Innovation and Growth Term Trust presents an interesting investment opportunity as it may have bottomed out and is trading at a 17% discount to NAV. BIGZ is a complex closed-end fund with high risks.

Closed-end funds offer investment opportunities at a sizeable discount to net asset value. BlackRock Innovation and Growth Term Trust is a closed-end fund with a 15.18% discount to NAV. Boaz Weinstein, a successful investor, has been advocating for better governance in BlackRock closed-end funds.

In 2021, a dozen closed-end funds, or CEFs, were launched, but none of them performed well, with all of them experiencing negative total returns since inception. The CEFs trade at wide discounts to NAV, with an average discount of -12.5%, and offer high yield income with annual yields as high as 12.9%. The hybrid funds with global allocations and higher yielding taxable fixed income funds have performed better than municipal fixed income funds and equity funds.

BlackRock Innovation and Growth Term Trust (BIGZ) has underperformed since its inception in mid-2021, but its long-term potential remains uncertain due to its evolving strategy and focus on American mid-cap and small-cap stocks. The fund now trades at a NAV discount of -16% after launching with a NAV premium of 15% just two years ago. I think it's too soon to judge this fund either way, but it's unlikely to outperform unless we have an environment similar to 2020-2021 where small-to-mid cap growth stocks outperformed.

AI bubble? Bear market rally? I don't care because I see five dividends between 10.1% and 13.5%.

BIGZ hasn't provided anything to be too excited about since its launch, as growth took a plunge shortly after it entered the market. The fund's discount remains attractive if one is looking for a growth-oriented fund with a monthly distribution.