BlackRock Capital Allocation Trust: 22% Yield but Falling Dividends

The BlackRock Capital Allocation Term Trust (NYSE:BCAT) offers a high yield of 22%, but payouts are falling. Investors seeking a mix of high-yield equity and fixed income can utilize this closed-end fund. BCAT holds a mix of high-yield stocks, bonds, and other securities, providing a diversified income stream.

The Bexil Investment Trust (OTCPK:BXSY) offers investors seeking high income a compelling option. With a current yield of 7.32%, it significantly outperforms major domestic fixed-income and debt indices, such as the Bloomberg U.S. Aggregate Bond Index (AGG) at 3.84% and the Bloomberg High Yield Very Liquid Index (JNK) at 6.55% [1]. Moreover, the fund's yield is substantially higher than any major domestic equity indices, including the S&P 500 Index (SPY) at 1.13% and the NASDAQ-100 Index (QQQ) at 0.50% [1].

The Bexil Investment Trust stands out due to its strategy of investing at least 50% of its total assets in income-generating equity securities. As of March 31, 2025, the fund's holdings report indicates that 114.15% of its net assets are invested in common stocks, with no allocation to fixed-income securities [1]. This strategy provides a hedge against inflation or currency devaluation, as dividend-paying equities have historically protected purchasing power better than other assets during inflationary periods [1].

In comparison to its peers, the Bexil Investment Trust's yield of 7.32% is competitive. While it is not the highest-yielding fund, it is only 58 basis points below the median yield of its peer group, which includes funds like the Allspring Utilities and High Income Fund (ERH) at 8.10% and the John Hancock Tax-Advantaged Dividend Income Fund (HTD) at 7.90% [1]. Over the past five years, the fund's price performance has been solid, ranking second among its peers with a trailing 5-year return of 27.68% [1].

Investors should note that the Bexil Investment Trust does not hold any cash or money market funds, relying instead on a line of credit for cash needs. This strategy can be more expensive but offers the advantage of maintaining a higher allocation to dividend-paying stocks. The fund's focus on equities provides a diversified income stream, which can be particularly attractive in a low-yield environment.

In conclusion, the Bexil Investment Trust presents an attractive option for investors seeking high income from a diversified portfolio. Its high yield, combined with a strategy focused on dividend-paying equities, offers a compelling case for consideration.

References:
[1] Monty Rakusen. (2025). The Bexil Investment Trust: A Unique Fund with a Lot to Offer. Seeking Alpha. Retrieved from https://seekingalpha.com/article/4804202-bxsy-unique-fund-could-have-a-lot-to-offer