- Last Ratings Update:01/31/2015
- Price as of 01/31/2015 :$8.02
- Net Assets:$1,648.68 Million
- Peer Rank:163 of 271
- Investment Rating:C+
We rate BlackRock Enhanced Equity Div at C+. This overall rating indicates it is among the top 10% of all closed end funds in its peer group. Positive factors that influence this rating include a greater than above average total return, low price volatility and low expense structure. The fund invests approximately 100% of its assets in stocks and may be considered for investors seeking an Equity Income strategy.
POSITIVES AND RISKS
Total return ranks above peers over the last three years. The BlackRock Enhanced Equity Div has returned an annual rate of 3.12% since inception. More recently, the fund has generated a total return of 8.70% in the last five years, 10.16% in the last three years, and 12.23% in the last year. How does that compare to other equity funds? In the last five years, it has outperformed 44% of them. It has also outpaced 63% of its competitors on a three year basis and 66% of them over the last year for the period ending 1/31/2015. On a year to date basis, BDJ has returned -0.66%.
Downside risk has been below average. BDJ has a draw down risk of -6.45%, which is the largest price decline experienced over the last three years. This fund has a three year standard deviation of 9.6%. This fund has had a low level of volatility in its monthly performance over the last 36 months. As of 1/31/2015, the fund was trading at a price of $8.02, which is 3.0% below its 52-week high of $8.27 and 1.3% above its 52-week low of $7.92.
High expense ratio hinders performance. On total assets of $1.65 billion, BDJ maintains a high expense ratio compared to its Equity Income peers of 0.86% to cover all operating costs. Brokerage costs for the fund to buy and sell shares are not included in the expense ratio. As BDJ is a closed end fund, it has no front end or back end load.
Manager lacks tenure and performance record lags managerial peers. Substandard fund managers tend to be replaced, so a long tenure is usually a good sign that a fund is achieving its objectives. The BlackRock Enhanced Equity Div has been managed by Kathleen M. Anderson for only 5 years. Over that period, the manager was able to capture more actual gains in excess of the expected return than just 39% of other fund managers.
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