BlackRock Floating Rate Income Trust

BlackRock Floating Rate Income Trust is a closed-end investment fund/investment trust. The company's investment objective is to provide high level of current income and secondary objective to seek the preservation of capital to the extent consistent with its primary objective of high current income. The company was founded in August 2004 and is headquartered in Wilmington, DE.

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.

BGT: This Fund Will Likely Cut Its Distribution In The Near Future

BGT has performed well, with a total return of over 17% since October 2023, since it was last covered. Lower Fed funds will lead to lower yields and a shift in market sentiment towards fixed assets, just like in past cycles. BlackRock Floating Rate Income Trust's premium to NAV is at a decade high but is expected to fall back to a discount as the Fed cuts rates.

BGT: Floating Rate Assets Becoming Less Appealing (Rating Downgrade)

BlackRock Floating Rate Income Trust Fund is a closed-end fund that aims to generate a high level of income with less volatility than fixed-income funds. The fund has a lower yield than its peers, but also lower risk exposure due to lower levels of leverage. The fund's recent performance has been strong, outperforming both investment-grade and junk bonds.

BGT: A Good Source Of Income Today, But A Pricey One

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Achieving long-term "equity returns" generally requires holding tight through periods of volatility. The "roller coaster" experience is worth it, as Nobel Prize winners and other researchers have demonstrated over the years. There is an alternative for investors seeking a smoother ride and a better night's sleep through market downturns.

Investors' Choice: Roller Coaster Or Merry-Go-Round?

The BlackRock Floating Rate Income Trust Fund offers an attractive current yield of 11.26%, which is in line with its peers.

BGT: A Very Good Floater CEF That Should Perform Well For Longer Than Market Thinks

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Stocks were up slightly as the jobs report shifted the narrative towards 'higher for longer.' The payroll report came in stronger than expected, but the narrative was that it was a hawkish report, meaning higher rates for longer. Discounts for CEFs continue to tread water, with real estate and interest rate-sensitive bond sectors performing well, while emerging market equity and convertibles performed poorly.

CEF Weekly Commentary | December 10, 2023 | High Quality Opportunities

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.

BGT: The Glory Days For Floaters May Be Ending

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.

BGT: A Golden Standard Leveraged Loan CEF, 11.7% Yield

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Interest rates are likely to remain elevated due to the strong U.S. economy, despite inflation concerns. The U.S. debt has reached a record high, and fears of a government shutdown are exacerbating market concerns. Investing in CEFs that hold floating rate senior loans can provide a high yield income stream that benefits from rising interest rates.

Rising Interest Rates Got You Down? Try Floating Above The Fear

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.

BGT: A Year Later, The Buy Case For Floaters Persists

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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.

CEF Weekly Review: Discount Pro-Cyclicality Is Not Fully Rational

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.

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NEW YORK--(BUSINESS WIRE)--Please replace the release dated April 11, 2023, with the following corrected version due to changes in the table, "Summary of share repurchase activity since Repurchase Program inception as of March 31, 2023".

CORRECTING and REPLACING BlackRock Closed-End Fund Share Repurchase Program Update

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19 out of 22 CEF sectors were positive on price and 12 out of 22 sectors were positive on NAV last week. Delaware/Abrdn mergers are closing this week.

Weekly Closed-End Fund Roundup - March 5, 2023

Floating rate debt should remain in demand as the Fed continues to raise its benchmark rate. Further, the market is starting to come to terms with the fact that rates will be "higher for longer".

BGT: Floaters Still Look Attractive

BlackRock announced its latest distributions earlier this month, with several boosts and cuts. Of those that boosted, two of those were FRA and BGT.

FRA And BGT: Distribution Boosts And Wide Discounts

Floating rate debt should perform well as interest rates keep rising. With higher rates being a primary concern for markets, investors can front-run this through buying funds like BGT. BGT still offers a sizable discount to NAV, although it has narrowed since April.

BGT: Floating Rate Debt Continues To Serve As A Hedge Against Rising Rates

Floating rate loans and bonds are a reasonable option when deciding how to play an inflationary or rising interest rate environment. Despite this traditional wisdom, funds that hold these loans like BGT have seen poor performance in 2022.

BGT: Value Re-Appears In This Floating Rate CEF

BGT invests in floating rate securities, and this has been a winning play throughout 2021. In the new year, I expect this asset class to perform well, but I am hesitant to recommend adding exposure at this time.

BGT: Near-Term Outlook More Modest Now

BGT is a closed-end fund focused on floating rate loans. This is an area I view positively heading forward. While I do like floating-rate loans, readers should note BGT is filled with mostly below-investment grade debt, so there are risks to this particular fund.

BGT: I See Merit To Buying Floaters

Floating rate loans are back in focus, with inflation expectations starting to rise. As yields and rates tick higher, fixed-income products suffer. Floating rate loans, by contrast, act as a hedge against this development.

BGT: A Decent Option For Floating Rate Exposure

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Floating rate ("loan") securities have been out of favor for more than a year as investors saw interest rates plummet. The loan market looks very compelling relative to high-yield fixed coupon bonds. The avg. price is below par vs. a premium to par for bonds.

CEF Floating Rate Sector Update: Rates Are Rising Which Should Shine A Light On The Sector

Senior loan funds are showing some opportunities at some deep discounts. These funds should benefit from increasing interest rates, but that could be years before playing out.

Income Lab Ideas: Senior Loan Funds

News for BlackRock Floating Rate Income Trust ETF (BGT)