BOE: Losing Its Attraction For Anyone Seeking International Diversification

Summary

• The BlackRock Enhanced Global Dividend Trust offers a 9.12% yield, appealing to income-focused investors who want equity exposure to counter rising inflation.
• The BOE closed-end fund's strategy includes writing options on 30%-45% of its portfolio, enhancing income but potentially limiting capital gains.
• The fund is becoming increasingly overweight to the U.S. market, which appears highly overvalued.
• Despite a recent distribution increase, the fund barely covered its H2 2024 distributions, which raises sustainability concerns.
• Trading at a 10.89% discount to NAV, the fund is attractively priced compared to peers but more expensive than its three-year average.
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Alistair Berg

Analyst’s Disclosure:I/we have a beneficial long position in the shares of SPY either through stock ownership, options, or other derivatives. 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.