A leveraged, AAA/Agency MBS income vehicle positioned to benefit from Fed easing—offering high monthly yield plus potential upside from discount-to-NAV mean reversion.
Overview
BlackRock Income Trust (BKT) is a long-tenured (1988) closed-end fund built to preserve capital while delivering consistent monthly income through a high-quality mortgage-backed securities portfolio. It follows a strict quality mandate—at least 80% in U.S. government/agency guaranteed or AAA/Aaa-at-purchase securities—and, under normal conditions, invests at least 65% of total assets in mortgage-backed securities, primarily Agency MBS (Fannie Mae/Freddie Mac). The fund’s “business model” is leveraged fixed-income carry: it earns coupon income from MBS and enhances distributable income via leverage, mainly reverse repurchase agreements, seeking to capture the spread between long-duration mortgage yields and short-term borrowing rates. As a CEF, market price can deviate from NAV, creating an additional investor return driver if discounts narrow; BlackRock uses a Discount Management Program to address persistent dislocations. In 2025, BKT expanded scale through the EGF reorganization and a major rights offering, positioning the portfolio for a Fed easing backdrop.