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.
The downturn in this is absolutely unbelievable. I bought this at $18 a month or so ago thinking I had a bit of a safe place to park some $$ and get a good dividend because I liked the investment objectives. Down almost 10% in a matter of days? I bought a couple other closed end Blackrock funds that were all trading at discount to NAV of AT LEAST 10%. The worst part of this ... go to Blackrock's web site and you will see the the NAV discount is only 8% or so. The assets are down 10% in a week! 66% of assets are in preferred stocks. I own preferreds and have NONE that are down hardly at all the last couple of months or so.
NAV has gone from $24 to $18 in a year. That is a 25% decrease where only 1/4 of the portfolio is in standard equities. How do you sell covered calls on large cap dividend paying stocks, own preferreds and a few bonds and be down 25% in a year? How are you down 10% in a week!!!