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Suggestions For Blackrock After Discussion With Chairman

mgconslts profile picture


  • Blackrock is the world's largest asset manager.
  • Some of its municipal closed-end funds are selling at larger discounts than the average municipal closed-end fund at the depth of the market meltdown in 2008.
  • This results in what I perceive as an uncommon value for various Blackrock municipal closed-end funds, especially if Blackrock or an activist implements measures to shrink the discount to NAV.

Blackrock Inc. (BLK) is the world's largest asset manager with $6.3 trillion in assets under management as of December 2017. It is the beneficiary of a massive rush by investors to place their money in passive investments, rather than traditional actively managed mutual funds. Despite this, they are looking more and more like the Rodney Dangerfield (no respect) of the closed-end world and ironically it isn't because of bad closed-end fund performance.

I recently bought a pair of Blackrock NJ municipal closed-end funds which are selling at discounts to NAV of greater than the 12% average discount to NAV of municipal closed-end funds at the depth of the market meltdown in 2008. I agree with Baron Rothschild that "the time to buy is when there's blood in the streets." With all the fear about rates soaring and the 10 year U.S. Treasury yield rosing from 2.41% to 3.00% YTD, the MUB iShares National Muni Bond ETF has dropped just .79% YTD.

These Blackrock municipal closed-end funds are the old high quality Merrill Lynch ones with an excellent short to long-term track record. They are now owned by Blackrock. BlackRock Muni Holdings NJ Quality Fund (NYSE:MUJ) and Blackrock Muni Yield New Jersey Fund (MYJ) are the worst performing NJ municipal closed-end funds in terms of market return % YTD (down 7.70 and 12.65%). They are doing just fine vs their peers on a NAV basis. After two of these NJ municipal closed-end funds shown below from Eaton Vance are merged out of existence, there will be only four NJ municipal closed-end funds to choose from. MYJ is down about 1.6% so far this week based on market price while its NAV is down just .13%. This is far worse than MUJ and the other NJ municipal closed-end funds. I suspect MYJ may have been hit hard this week

This article was written by

mgconslts profile picture
Marketer, writer and investor who is passionate about investing. I am interested in opportunities where I can take a publisher or investment organization to the next level with my marketing, social media, PR, writing, and investment research skills. See my Investing News Daily Newsletter at http://paper.li/Mgconslts/1360969680and my Mark the Marketer Daily Newsletter at http://markthemarketer.wordpress.com/ and my LinkedIn Articles at https://www.linkedin.com/in/mgconslts/recent-activity/posts/and my Mark the Marketer Blog at https://markthemarketer.wordpress.com/

Analyst’s Disclosure: I am/we are long MUJ, MYJ, AND EVJ. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Time sensitive.

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