Undervalued: The Blackstone Strategic Credit Fund (BGB) Stands Out Among Its Peers

March 3, 2024 | by


Undervalued: The Blackstone Strategic Credit Fund (BGB) Stands Out Among Its Peers

95paON4hdScokCN81ZxAmvSwy3KpQiLRNGBF4qemM 복사본

The Blackstone Strategic Credit Fund (BGB) stands as an undervalued gem in the world of investment opportunities. With a unique approach that emphasizes a high allocation to fixed income bonds and an active trading strategy, BGB sets itself apart from its peers. The fund’s well-diversified portfolio, focusing on single-B rated bonds, adds stability and potential growth to its investment landscape. Despite its term maturity in 2027, BGB should be traded like a perpetual fund until one year out. Notably, BGB has outperformed renowned Closed-End Funds (CEFs) from PIMCO. What further sets BGB apart is its continued trading at a discount to net asset value, even as its peers remain flat or exhibit premiums. This undervaluation provides investors with an opportunity to participate in a fund that actively manages its collateral, displaying high turnover and an attractive performance and volatility profile. Bolstering investor confidence, BGB boasts a supported dividend yield as well as a stable asset base.

Undervalued: The Blackstone Strategic Credit Fund (BGB) Stands Out Among Its Peers

Screenshot 2024 01 08 192459 1

BGB’s Unique Approach

The Blackstone Strategic Credit Fund (BGB) stands out from its competitors in the market due to its unique approach to investing. One key aspect of BGB’s strategy is its high allocation to fixed income bonds. The fund recognizes the stability and income potential that fixed income bonds can provide, and as a result, has placed a significant emphasis on this asset class. By allocating a substantial portion of its portfolio to fixed income bonds, BGB aims to generate a consistent stream of income for its investors.

Additionally, BGB implements an active trading strategy as part of its overall approach. This strategy involves actively buying and selling securities within the portfolio in order to seize opportunities and maximize returns. The fund’s investment team closely monitors market conditions and makes informed decisions based on their analysis. This active trading strategy allows BGB to take advantage of market fluctuations and potentially generate higher returns for its investors.

Well-Diversified Portfolio

One of the strengths of BGB’s investment strategy is the fund’s focus on maintaining a well-diversified portfolio. BGB places particular emphasis on investing in single-B rated bonds, which are bonds that carry a medium level of risk. By diversifying its holdings across a range of single-B rated bonds, BGB aims to reduce the overall risk within its portfolio. This diversification strategy helps to safeguard against the potential impact of any one bond performing poorly, as the fund’s exposure is spread across multiple bonds.

In addition to its focus on single-B rated bonds, BGB also seeks to achieve portfolio diversification through investments in other asset classes. The fund carefully selects a mix of fixed income securities, equities, and other investment instruments to ensure a balanced and diversified portfolio. This diversification not only helps to mitigate risk, but also provides potential for upside growth in various market conditions.

Undervalued: The Blackstone Strategic Credit Fund (BGB) Stands Out Among Its Peers

Term Maturity and Trading Strategy

BGB has a term maturity in 2027, meaning that the fund’s investments are structured to mature or be redeemed by this date. However, until one year out from the term maturity, BGB is managed as a perpetual fund. This means that the fund’s investment strategy remains focused on generating income and maximizing returns, rather than solely on preparing for the maturity of its investments.


In terms of trading strategy, BGB’s investment team actively manages the fund’s portfolio in order to optimize performance. This includes making tactical adjustments to the portfolio based on market conditions, as well as buying and selling securities to take advantage of short-term opportunities. Through this dynamic approach to trading, BGB aims to enhance the overall returns and manage the risks associated with its investments.

Outperformance of PIMCO CEFs

One notable achievement for BGB is its consistent outperformance compared to well-known Closed-End Funds (CEFs) managed by PIMCO. Despite operating in a competitive market, BGB has managed to deliver superior returns when compared to its peers. This outperformance can largely be attributed to BGB’s unique investment approach and active trading strategy.

BGB’s investment team’s expertise and ability to identify profitable opportunities in the market has contributed to the fund’s success. By conducting thorough research and analysis, identifying undervalued securities, and executing well-timed trades, BGB has consistently outperformed PIMCO CEFs. This track record of success speaks to the strength of BGB’s investment strategy and the dedication of its team.

Undervalued: The Blackstone Strategic Credit Fund (BGB) Stands Out Among Its Peers

Trading at a Discount

One key advantage of investing in BGB is the fact that the fund is still trading at a discount to its net asset value (NAV). This means that the market price of BGB’s shares is currently lower than the total value of its underlying assets. This presents an opportunity for investors to acquire shares of BGB at a lower price than their intrinsic value.

In contrast, many of BGB’s peers in the market are either trading at a premium to their NAV or exhibiting flat performance. This disparity in pricing positions BGB as an attractive investment option for those seeking value and potential upside. By investing in BGB at a discount, investors have the potential to benefit from future growth and capital appreciation as the market recognizes the fund’s true value.

Active Approach to Collateral

BGB takes an active approach to managing its collateral, which sets it apart from other funds. The fund seeks to optimize the quality and liquidity of its collateral holdings through a high turnover strategy. This means that BGB continually evaluates and adjusts its collateral holdings based on market conditions and opportunities.

By actively managing its collateral, BGB aims to enhance the overall risk-adjusted returns of its portfolio. BGB’s investment team carefully selects collateral securities that align with the fund’s investment objectives, and regularly reviews and rebalances these holdings as part of its active management approach. This proactive strategy helps to ensure that BGB’s collateral is well-positioned to provide strong support for its investment activities.

Undervalued: The Blackstone Strategic Credit Fund (BGB) Stands Out Among Its Peers

Attractive Performance and Volatility Profile

BGB has demonstrated attractive performance and a favorable volatility profile, further bolstering its appeal as an investment option. The fund has consistently delivered competitive returns to its investors, outperforming benchmarks and generating above-average risk-adjusted returns.

In addition to its strong performance, BGB also boasts a favorable volatility profile. The fund’s investment strategy and active management approach help to mitigate downside risk and smooth out volatility. By carefully selecting and managing its investments, BGB aims to achieve stable and consistent performance, which is attractive to investors seeking a balance between returns and risk.

Supported Dividend Yield

Investors in BGB can expect to receive a supported dividend yield. The fund’s investment strategy, with its high allocation to fixed income bonds, aims to generate a consistent stream of income. This income is then distributed to investors in the form of dividends, providing them with a regular source of cash flow.

BGB’s stable asset base, combined with its focus on income-generating investments, supports the sustainability of its dividend yield. The fund’s active trading strategy and expertise in identifying undervalued securities also contribute to its ability to maintain a strong dividend yield. This attractive dividend component adds to BGB’s overall appeal as an investment option for income-focused investors.

Undervalued: The Blackstone Strategic Credit Fund (BGB) Stands Out Among Its Peers

Stable Asset Base

Lastly, BGB prides itself on maintaining a stable and resilient asset base. The fund’s well-diversified portfolio, active management approach, and focus on income-generating investments contribute to the stability of its assets. BGB’s investment team’s proactive risk management practices ensure that the fund’s asset base is well-protected from potential market shocks and downturns.

By maintaining a stable asset base, BGB provides investors with confidence in the fund’s ability to preserve capital and deliver consistent returns over the long term. This stability is a key factor for investors seeking a reliable and secure investment option.

In conclusion, the Blackstone Strategic Credit Fund (BGB) offers a unique approach to investing, with a high allocation to fixed income bonds and an active trading strategy. The fund’s well-diversified portfolio, term maturity, and active approach to collateral provide a solid foundation for delivering attractive performance and managing risk. BGB’s outperformance of PIMCO CEFs, trading at a discount, supported dividend yield, and stable asset base further position it as an appealing investment option for investors.

420975661 930960805057803 3457597750388070468 n


View all

view all