"BlackRock Science and Technology Term Trust (BSTZ) has attracted income-focused investors with a yield that has ranged between 8% and 12% depending on when you bought it. However, the yield number alone does not tell the full story."
"BSTZ is a closed-end fund that holds a portfolio of technology-oriented companies and generates income through covered call premiums and securities lending income. The fund also benefits from capital gains on its holdings."
"In September 2025, BlackRock transitioned BSTZ from floating rate distributions to level rate distributions, stating the goal was to enhance stability and maintain competitive distribution rates."
"The dividend history here is not reassuring for income purists. In early 2024, the monthly payment was cut roughly 37%, demonstrating that management will reduce the distribution when the income engine cannot support it."
BlackRock Science and Technology Term Trust (BSTZ) offers an income yield of 8% to 12%, but its sustainability is questionable. The fund generates income through covered call premiums and securities lending, supplemented by capital gains. However, it has previously cut distributions and may use return of capital to meet payouts. In September 2025, BSTZ shifted to level rate distributions, stabilizing payments at $0.16 per share. The fund's history shows a significant cut in early 2024, indicating management's willingness to reduce distributions when income is insufficient.
Read at 24/7 Wall St.
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