The BlackRock Limited Duration Income (NYSE: BLW) is a closed-end fund that income-focused investors can consider for their investment goals. With a current yield of 9.53%, the fund provides a decent income opportunity. However, compared to similar funds investing in similar assets, the yield may not be as competitive. Other funds in the same category offer higher yields, such as the Franklin Limited Duration Income Trust with an 11.90% yield.
The fund’s performance has been mixed, with periods of outperformance and underperformance compared to the Bloomberg U.S. Aggregate Bond Index. The fund primarily invests in bonds, including floating-rate senior secured loans, which can be less sensitive to interest rate movements. However, the fund’s leverage and active trading strategy may contribute to its volatility.
In terms of expenses, the BlackRock Limited Duration Income Trust has an expense ratio of 3.64%, which is higher compared to some peers but in line with others. Despite the higher expense ratio, the fund has outperformed its peers over the past five years, demonstrating its ability to justify the costs.
Regarding distribution analysis, the fund aims to provide a high level of current income and capital appreciation. While the fund has shown volatility in its distribution history, it has managed to cover its distributions through a combination of investment income and capital gains. However, the fund’s net asset value has declined year-to-date, indicating a potential challenge in sustaining its current distribution.
In terms of valuation, the fund currently trades at a 2.96% discount to its net asset value, which may present an opportunity for investors looking to add the fund to their portfolio. Overall, the BlackRock Limited Duration Income Trust offers income-focused investors a potential opportunity, but investors should closely monitor the fund’s performance and ability to sustain its distributions.