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Rick Rieder’s BCAT bounced 4% today.

edited May 20 in Fund Discussions
BCAT - Fairly new CEF. Owned it for a while in ‘23 after reading a positive take in Barron’s by Forsyth. One of the funds I watch every day. Quite a bounce for 1 day. Wonder what supercharged it?


  • BCAT a tactical-allocation term-structure CEF (liquidation 9/25/32) that was trading at 11% discount. Probably a big change in discount.
  • edited May 20
    I wasn’t able to copy BCAT’s portfolio from Morningstar. But here’s the rough allocation as M* presents it.

    20% equity

    42% fixed income

    2% other

    47% cash

    I believe it’s the use of leverage that allows these totals to top 100%. Also, a high cash position might indicate some substantial short positions (or use of derivatives?) . Just an interesting one to watch. Not for my conservative taste. But fans of Rieder might enjoy watching. If you want to own something much tamer run by the same manager, the etf BINC is one option, and BRTR is another.
  • Blackrock increased BCAT's dividend to 20%. They are under pressure from SABA - a hedge fund.
  • edited May 20
    Mitchelg said:

    Blackrock increased BCAT's dividend to 20%. They are under pressure from SABA - a hedge fund.

    Ahh - Very interesting. I was aware of Boaz Weinstein’s Sabra Holdings chasing Blackrock’s tail on several CEFs. He wants them to convert to open ended funds and “unlock” a great amount of value for investors.

  • It seems that BlackRock lost a court case on the proxy voting procedure that it had adopted. It had called for a majority of all votes outstanding to win. This may work for small committees, even House and Senate, but not when millions of votes may be outstanding.

    Alternate is to define a quorum, and then the win is defined by specified % of votes cast (abstain count for the quorum, but aren't counted otherwise). Boaz Weinstein was arguing along these lines.

    The court sided with Boaz Weinstein.

    Anyway, distribution of 20% of the 12-mo rolling average of NAV of BCAT seems like a panic reaction to these events. It would mean a huge ROC. But this can be changed later by the board if BlackRock can hang on.

    BlackRock probably took note of the recent victories by Boaz Weinstein over Franklin Templeton, Nuveen, etc, and decided to do something unconventional to defend itself in the proxy voting.
  • edited May 20
    That 20% dividend must have a few eyeballs popping. (But ROC as Yogi points out)
  • Saba filed today against NBH - Neuberger Berman Municipal Income. They have a big appetite. Are closed end funds obsolete in the era of ETF's. How do Blackrock or Eaton Vance option income funds compete with JEPI at 35 basis expense ratio.

    Note Fidelity just started trading in option income funds - FYEE & FHEQ with low expense ratios. Trading volume is low but will grow.

    We could see a large amount of closed end funds disappear.
  • Sold out of BCAT on the bounce and moved proceeds into my existing position in CEFS.
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