Is BlackRock's MYN a Safe Bet for High-Yield Dividend Seekers?

The BlackRock MuniYield New York Quality Fund (MYN) just declared its latest dividend of $0.0512 per share for May 2025, marking the continuation of its modest payout increase from $0.044 in 2024. This move has investors buzzing—especially those seeking steady income from municipal bonds. But is MYN a buy, or does its high cost structure and leverage make it a risky bet? Let’s break it down.

The Dividend Signal: Steady but Sluggish Growth

MYN’s dividend increased by 16% in early 2025, lifting its trailing twelve-month (TTM) yield to 6.23% as of May 2025. That’s a solid number for a muni fund, especially in a low-interest-rate environment. However, the payout has been stagnant since January 2025, with no growth over the past year. Historically, MYN has averaged a 1.82% annual dividend growth rate over five years—hardly a blistering pace.

The fund’s dividend consistency is a plus, but the lack of upward momentum raises questions. Is MYN’s income stream maxed out, or is management holding back to weather future storms? More on that later.

The Elephant in the Room: A 3.54% Expense Ratio

Here’s where the red flags pop up. MYN’s total expense ratio (TER) sits at 3.54% as of July 2024—a hefty price tag for a bond fund. To put this in perspective, the average closed-end municipal bond fund has a TER under 1%. The bulk of MYN’s costs come from interest expenses (2.61%) tied to its 37.65% leverage, which amplifies returns in rising markets but can crater performance when rates spike.

This leverage-heavy structure is a double-edged sword. While it boosted the fund’s dividend to 6.13% (based on share price), it also exposes investors to outsized volatility. If interest rates rise further, MYN’s borrowing costs could balloon, squeezing its already thin profit margins.

The Numbers Behind the Dividend: Is This Sustainable?

MYN’s dividend is backed by a portfolio of New York-focused municipal bonds averaging a 4.76% coupon. But here’s the catch: The fund’s distribution rate of 5.46% when calculated against its net asset value (NAV) is lower than its 6.13% yield based on share price. This discrepancy suggests MYN may be trading at a discount to its NAV—a common occurrence in closed-end funds.

Investors need to ask: Is the fund’s income generation keeping up with its obligations? With a TER of 3.54%, even a small hiccup in bond yields could pressure the dividend. The fact that MYN hasn’t raised its payout since early 2025 hints at caution from management—a sign they’re prioritizing stability over growth.

The Bottom Line: Proceed with Caution

MYN is a viable option for income seekers craving New York-centric tax-free dividends. Its 6.23% TTM yield is hard to ignore in a landscape of sub-5% muni funds. However, the 3.54% expense ratio and 37.65% leverage are major drawbacks. If you’re buying now, ensure:
- You’re comfortable with the fund’s high costs and leveraged structure.
- You understand the risk of a dividend cut if interest rates climb.
- You’re holding MYN for the long term, as short-term volatility could bite.

For conservative investors, this fund is a “hold”—stick with it if you’re already in, but don’t chase the yield without considering the risks. For newcomers, look for lower-cost alternatives like the BlackRock MuniYield Fund (MQY), which offers a 5.80% yield with a 1.44% TER—though it lacks NY tax exemptions.

In short, MYN’s dividend is a siren song of income, but the rocks ahead (high fees, leverage) could sink your portfolio if you’re not prepared.

Final Verdict: Hold for current investors, but tread carefully if you’re new. The yield is tempting, but the costs are steep.