The BlackRock Science and Technology Trust offers an attractive 8.5% yield by investing in tech and science assets, utilizing covered call options. BST's portfolio is heavily weighted in semiconductors and large-cap stocks, with a significant portion overwritten with covered call options. BST's 2024 distributions were entirely from long-term capital gains, with no Return of Capital, offering a tax deferral advantage.
BST is a closed end fund that invests in public large cap tech companies and a small portfolio of private, pre-public investments. We discuss critical changes to BST over the past six months, including performance relative to sister fund, BSTZ. Investors seeking stable dividends and large-cap exposure should consider BST, while those preferring private equity and small-cap investments might opt for BSTZ.
BST offers a high single-digit yield and consistent income, despite underperforming the market over the past 5 years. Rate cuts and strong Nvidia earnings could boost BST, which trades at a -6.24% discount to NAV. BST's portfolio, with significant holdings in NVDA and small caps, stands to benefit from a lower-rate environment.
BST provides high-yielding income from the tech sector, offering a sizeable dividend yield of 8.7%. The fund currently trades at a discount to net asset value of 6.7%, presenting an attractive opportunity for investors to accumulate shares. BST's price movement is influenced by interest rates, with potential future rate cuts serving as a positive catalyst for the fund's underlying assets and NAV growth.
BST has been performing better but is still showing losses over the last three years. The fund is focused more on relatively larger cap technology companies, but has a sleeve of private investments as well. BST offers a distribution yield of 8.29%, which is generated through capital gains in the underlying portfolio and the covered call strategy.
Finding an investment that provides both growth and income can be challenging, especially one that holds the big AI players. As a solution, BlackRock Science and Technology Trust can provide both capital appreciation and monthly income. Moreover, the BST CEF should benefit from the appreciation in small-cap stocks as the Federal Reserve loosens monetary policy.
The BlackRock Science and Technology Trust is a top-performing closed-end equity fund with a unique approach to investing in tech stocks. The fund's performance is heavily dependent on the future interest rate environment and potential shifts in investor preferences with the US election in the offing. BST offers exposure to current and emerging leaders in the technology sector, but uncertainties surrounding rates and market trends warrant a hold rating.
I've dedicated my career to closed-end funds (CEFs) because in a way, these high-yield investments saved my life: Using these funds to get an 8% income stream from my portfolio gave me the confidence I needed to quit my academic job well over a decade ago.
I've been covering closed-end funds (CEFs) for more than a decade. Through that time (and still today!
As the digital revolution unfolds, global corporations are poised to invest billions to remain competitive in the rapidly evolving landscape. While growth companies hold promise, their inability to deliver immediate income to shareholders presents a challenge. We discuss two picks with ~8% yields to benefit from substantial investments in AI and other digital transformations.