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Yield Alert! Massive Discount at LifeTime Lows?

The BlackRock Taxable Municipal Bond Trust (BBN) is a closed-end fund (CEF) that seeks to generate high current income for investors through its holdings in municipal bonds. However, recent market swings have pushed BBN to its lowest levels in history, presenting a potential opportunity for investors seeking exposure to this asset class.

Investment Approach:

BBN invests primarily (at least 80%) in taxable municipal securities, including Build America Bonds. These bonds offer attractive yields while providing some tax advantages compared to traditional corporate bonds. Additionally, BBN has the flexibility to invest up to 20% of its assets in tax-exempt securities and other government obligations, further diversifying its portfolio.

Current Situation:

As of December 6, 2023, BBN's net asset value (NAV) is $17.64, near its 52-week low of $15.84. The market price is even lower, sitting at $16.03, resulting in a 9.13% discount to NAV. This significant discount indicates that investors are currently undervaluing the trust's underlying assets.

RSI at LifeTime Lows:

The Relative Strength Index (RSI) is a technical indicator used to measure the momentum of a security. BBN's RSI is currently at life-time lows, suggesting that the selling pressure may be nearing exhaustion. This could be a signal that the price is oversold and a potential bounce back is imminent.

Top Holdings (as of October 31, 2023):

Potential Opportunity:

With BBN's attractive yield of almost 9%, significant discount to NAV, and RSI at life-time lows, the current market situation could present an opportunity for investors seeking high income and potential capital appreciation. However, it's important to note that BBN's value can fluctuate due to market conditions and interest rate movements. Therefore, careful due diligence and consideration of individual investment goals and risk tolerance are crucial before investing.

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Additional Information:

  • BBN invests primarily in taxable municipal securities, including Build America Bonds.

  • The trust also has the flexibility to invest in tax-exempt securities and other government obligations.

  • BBN's current market price represents a significant discount to its NAV.

  • The RSI is at life-time lows, suggesting potential for a reversal.

  • Investors should consider their individual risk tolerance and investment goals before investing in BBN.


While BBN's recent price decline may be concerning for some investors, it could also be an opportunity to acquire a well-diversified portfolio of municipal bonds at a discounted price. Investors with a long-term perspective and tolerance for potential volatility may find BBN to be a compelling income-generating investment. However, it's crucial to conduct thorough research and understand the risks involved before making any investment decisions. [DISCLAIMER]

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