BlackRock Is Quietly Boosting These 3 Big Closed-End Funds

Core Viewpoint - BlackRock's buyback program for closed-end funds (CEFs) is designed to reduce discounts to net asset value (NAV), benefiting both investors who sell shares back to the fund and those who retain their investments [4][11]. Group 1: Buyback Program Details - BlackRock announced a buyback program for 14 of its CEFs, allowing share repurchases at 98% of NAV when discounts are at or below 7.5% over a three-month period [4]. - The buyback program aims to provide a floor under CEF discounts, which can lead to increased market prices for these funds [4][5]. - Investors can sell their shares back to BlackRock at a 2% discount to NAV, creating an immediate profit opportunity for those who purchased at a larger discount [5][11]. Group 2: Impact on Fund Discounts - Following the announcement of the buyback program, discounts for BlackRock's CEFs have shown some erosion, indicating a positive market response [5]. - The BlackRock Science and Technology Trust (BST) has maintained an average discount of around 5%, remaining ineligible for the buyback program due to its discount level [6]. - The BlackRock Innovation and Growth Trust (BIGZ) has seen its market price increase significantly since the buyback announcement, despite a flat NAV return [7][8]. Group 3: Performance of Specific Funds - The BlackRock Science and Technology Term Trust (BSTZ) has benefited the most from the buyback program, with its discount shrinking from 17% to around 10%, resulting in a 19.4% return based on market price [9][12]. - The buyback program is particularly advantageous for shareholders of BIGZ, BST, and BSTZ, as it allows for potential profits while also enhancing the NAV of the overall fund [11][13]. - The current yield for BSTZ is 12.8%, while BST yields 8.3%, making these funds attractive for income-focused investors [10].