Wow! BTZ is one sick puppy. Their charter is to invest in Pfd's, dividend paying stocks and also sell some covered calls. I'm surprised that such a combo can deflate so badly in the short time that the closed end fund was initiated at $25.00. I have individual Pfd's and they have not gone down to the extent that BTZ has. I wonder if this thing has a bottom other than zero? I suspose as this is selling under it's NAV and is off over 30% from it's offering it has to be a buy for some folks. I own a bunch but would not recommend it. Probably a Ponzzi issue by BlackRock management.
Their problem is that they are leveraged and most of their leverage is via auction rate securities, which just blew up. I see they are redeeming some of them, in return for reverse repos, which probably isn't really any better.
I am glad they are reducing the leverage, at least.
I hold 1000 shares, but I bought in November, so I am reasonably happy.
Never, never buy any CEF at its IPO price. Just about all CEFs drop to a discount within 6 mos. of the IPO. WWW.etfconnect.com and morningstar & Yahoo message boards on CEFs have much sensible advice. I own a lot of BTZ at different entrance prices. I have been disappointed so far with the purchases.
I now argree about not buying an IPO up front. BTZ is stronger than it's current price suggests. Do you agree? I think it's dividend is safe as they own mostly Pfd's and dividend paying stocks. I suspect the NAV of the stocks they own have diminished in price, but ultimately the NAV has to come up with any sign of a strong market. I'm surprised in such a down market that the covered calls that they indicated they would be selling hasn't made a bigger impact on their (BTZ's) NAV. Also I'm surprised that they did not pay an extra divy at year's end. Surely they had capital gains as a result of the coverd calls they indicated they would be selling. Another factor about BTZ that I've decided (too late) is that they are too damn big to be very effective.