BlackRock's First Active Bond ETF 00985D Announces Payout with Annualized Yield Over 7% – Deadline to Buy is 'This Day'

This week, Taiwan's stock market continued its high-level volatility, recording its third consecutive decline. Today (August 8), the market opened higher but trended lower, still holding above the key 45,000-point threshold. Meanwhile, income-generating assets remain highly sought after by investors.

BlackRock Asset Management's first actively managed ETF in Taiwan, the 'BlackRock Active High-Quality Investment-Grade Bond' (00985D), is set for its second distribution. The latest announcement reveals a payout of NT$0.061 per beneficiary unit. Based on the net asset value before ex-dividend, the annualized distribution yield is approximately 7.14%, maintaining around the 7% level for the second consecutive time. The ex-dividend date is July 17, meaning investors must hold or purchase the ETF by July 16 at the latest. The dividend is scheduled for disbursement on August 14.

Amid ongoing uncertainty in the U.S. Federal Reserve's interest rate policy and a prolonged high-interest-rate environment, demand for income-generating assets remains strong. 00985D opened at NT$10.31 today, then declined steadily, reaching a low of NT$10.19, down NT$0.12.

Yu Chung-Hsien, fund manager of 00985D, emphasized that investors should return to the fundamentals of fixed income, focusing on stable and sustainable income sources rather than betting solely on capital gains from long-duration bonds driven by rate cuts. Over-concentration in bonds with maturities over 20 years or a full shift into non-investment-grade debt could amplify interest rate or credit risks. With investment-grade bond yields at relatively attractive levels, a balanced approach that emphasizes both yield and quality can help accumulate returns even in volatile markets.

Yu pointed out that under a new Fed chair, interest rates and bond prices may become more volatile, making diversification of income sources increasingly important. In addition to coupon income from investment-grade bonds, the strategic use of options income strategies could turn market volatility into additional returns. For example, allocating about 20% to options strategies could help enhance overall yield.

BlackRock Asset Management noted that in an environment of high interest rates and market volatility, investors are not only seeking dividends but also care whether the ETF can successfully 'fill the dividend gap'—recover its price after ex-dividend.

00985D completed its first distribution since listing in early June and successfully filled the dividend gap on June 25, demonstrating market confidence in its income-generating capability and investment strategy. For investors seeking stable cash flow, the ability to fill the dividend gap increases the potential to achieve both income and capital appreciation, allowing dividends to truly compound into long-term investment gains.