BlackRock Multi-Sector Income Trust

BIT

Market cap $573M

BlackRock Multi-Sector Income Trust (BIT) offers a high 11.1% yield and diversified income exposure, but faces challenges in sustaining distributions. BIT trades at a 4.91% discount to NAV, making it attractive relative to historical pricing, yet its share price has declined amid higher rates. Earnings coverage remains pressured by elevated interest rates and reliance on leverage, with a significant portion of distributions funded by return of capital.

NEW YORK--(BUSINESS WIRE)---- $BIT--BlackRock Multi-Sector Income Trust (BIT) Announces Results of its Over-subscribed Rights Offering.

We review the CEF market valuation and performance through the second week of August, and highlight recent market action. CEF discounts are at decade-tight levels, offering limited value for shareholders. Eaton Vance's liquidation of EVM and ENX highlights ongoing consolidation in tax-exempt CEFs, shrinking the sector, but improving liquidity and cost structure.

NEW YORK--(BUSINESS WIRE)---- $BIT--BlackRock Multi-Sector Income Trust (NYSE: BIT) (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 August 19, 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.

BlackRock Multi-Sector Income Trust is now heavily overweight U.S. high yield, with over 75% sub-investment grade exposure and short duration. The fund delivered middle-of-the-pack performance versus peers over the past year, with leverage and asset mix helping to normalize returns. BIT currently trades near net asset value, with a typical premium/discount range of -6% to +6%, indicating fair valuation in the current market.

US mutual funds trace their origin to 1924's Massachusetts Investors Trust, which was the first formalized US mutual fund entity.

Rising yields and inflation risks make U.S. dollar-denominated bonds unattractive, challenging the traditional safe-haven status of bond funds. BlackRock Multi-Sector Income Trust offers a high yield and outperforms indices on total return, but lags closed-end peers and has high U.S. dollar exposure. Recent market shocks and downgrades highlight heightened risks for bondholders, with leverage amplifying downside in volatile environments.

The ongoing trade war has led to a massive increase in uncertainty and bearish sentiment. Credit spreads have widened as a result, going from their lowest levels in history, to solidly above-average. Investing in high-yield corporate bond funds seems like an easy way to profit from these changes.

BlackRock Multi-Sector Income Trust (BIT) offers a 10.1% dividend yield but struggles with income generation, raising concerns about distribution sustainability and NAV growth. The fund's strategy involves leveraging income-oriented assets like high-yield bonds and securitized products, but high interest rates pose risks to its performance. BIT trades at a slight premium to NAV, yet its inability to fully cover distributions from net investment income questions the premium's justification.

BlackRock Multi-Sector Income Trust offers a high yield of 10.13%, but its real after-tax yield is much more disappointing. The fund owns a lot of mortgages, which have been suffering from delinquency problems. BIT's leverage ratio of 36.25% is higher than its peers, which increases both potential returns and risks.