BlackRock Core Bond Trust

BHK

Market cap $688M

BlackRock Core Bond Trust offers a high 9.16% yield, outpacing major bond indices and most peers, appealing to income-focused investors. BHK's total returns have lagged both indices and several peer funds, with recent underperformance due to share price declines and leverage-related volatility. The fund's distribution is not fully covered by net investment income, raising concerns about sustainability and the risk of a future distribution cut.

BND is one of the largest bond ETFs in the market. It tracks a simple bond index, providing investors with diversified, broad-based exposure to these investments. BND compares unfavorably to several of its peers on different grounds, including dividend yield, returns, risk-adjusted returns, and tax benefits.

BHK trades at a discount to its net asset value, offering potential value for investors seeking entry below intrinsic worth. The fund's current dividend yield is attractive at approximately 9.3%, appealing to income-focused investors. However, there are concerns regarding the sustainability of BHK's dividend coverage, which may impact future payouts.

We closed out the first half of 2025, making it an appropriate time to give the overall CEF space a fresh look for potential opportunities. As the broader equity indexes have been performing quite well, discounts in the CEF space have narrowed overall. The best relative value more broadly is in the municipal bond space and the "hybrid" funds.

NEW YORK--(BUSINESS WIRE)---- $BHK--BlackRock Core Bond Trust (NYSE: BHK) (the "Fund") today announced the successful completion of its transferable rights offer (the “Offer”) which expired on June 18, 2025 (the “Expiration Date”). The Offer entitled rights holders to subscribe for up to an aggregate of 18,056,056 shares of the Fund's common shares of beneficial interest, par value of $0.001 per share (each, a “Common Share”). The final subscription price of $9.22 per Common Share was determined based u.

BHK is a fixed income CEF focused on investment grade bonds, currently under pressure due to higher rates and a newly announced rights offering. The rights offering allows investors to buy new shares at a 5-10% discount, but typically puts short-term pressure on share prices until late June. BHK's performance has lagged in 2025, down about 5% total return, mainly due to its leveraged exposure to long-term interest rates.

We review the CEF market valuation and performance through the fourth week of May and highlight recent market action. CEF markets declined as equity momentum faded and bond yields rose, with REIT and MLP sectors underperforming. BlackRock Core Bond Trust launched a rights offering, citing higher yields.

NEW YORK--(BUSINESS WIRE)---- $BHK--BlackRock Core Bond Trust (NYSE: BHK) (the "Fund") today announced that its Board of Trustees (the "Board") has approved the terms of the issuance of transferable rights ("Rights") to the holders of the Fund's common shares of beneficial interest (par value $0.001 per share) ("Shares") as of May 27, 2025 (the "Record Date"). Holders of Rights will be entitled to subscribe for additional Shares (the "Offer") at a discount to the market price of the Shares. After consid.

BHK is a fixed-income CEF with high leverage, primarily holding investment-grade bonds, and its performance is highly sensitive to interest rate changes. The fund's recent outperformance was driven by a significant shift lower in interest rates in August/September 2024, but it has underperformed as rates have risen. BHK's current distribution yield of 8.3% is not fully supported by its portfolio, making it a risky bet for income-focused investors.

The BlackRock Core Bond Trust offers a high yield of 8.34%, primarily investing in investment-grade bonds, making it attractive for income-seeking, risk-averse investors. Despite its high yield, the BHK closed-end fund has struggled with poor real returns over the past decade due to low yields and losses once rates started rising. It is uncertain whether or not the U.S. will enter a recession or not as "soft data" and "hard data" disagrees.