BlackRock Income Trust, Inc. (BKT)
BKT Price and Sentiment
BKT Latest news
A reader asked for my thoughts on BKT.
BKT is a robust MBS CEF with a strong historical performance. The fund has never traded at a premium in the past decade except in 2021.
BKT had been a long-term staple of my portfolio, but I am not comfortable with positions at these levels. The fund typically had a slight discount to NAV in the past. Now, it has a premium in excess of 5%.
Revisiting DSL after the distribution cut looks like there is still some opportunity here. High yield and emerging market debt can mean less sensitivity to interest rate increases that DSL invests in.
BKT has been a core holding for me, delivering an above-average yield with minimum volatility. I use this fund as a place to hold cash, and then take advantage of more risk-on opportunities as they arise.
BKT has been on the radar of many income investors due to its ultra high-quality allocation and a very attractive distribution rate of 6.85%. We take a look at how this fund is able to generate an income yield that is an order of magnitude higher than that of AAA-rated securities.
BKT's portfolio is almost exclusively agency mortgage backed securities, which are historically a very stable asset class. The fund sports a small discount to NAV, and its leverage helps deliver an income stream near 7%.
BKT: The Housing Market Is A Gamble Right Now, But Agency MBS Are Still Safe
The tremendous bull bond market run from 1981 is probably now ending.