BlackRock Science & Technology Term Trust (NYSE:BSTZ) is a closed-end fund with a fixed expiration date, a covered call overlay, and more than 30% of its portfolio locked in private, pre-IPO companies that most investors cannot access through a brokerage account.
BSTZ occupies a narrow lane: income generation with embedded venture-stage optionality, bounded by a 2031 liquidation date that forces NAV realization regardless of market conditions.
How the fund generates income
BSTZ generates monthly income through covered call premiums written against publicly traded holdings and realized gains when private positions are sold or go public. The fund currently pays $0.1625 per share monthly, an annualized rate of $1.95 per share, yielding roughly 8% at current prices near $25.
Public holdings drive the premium income. NVIDIA (NASDAQ:NVDA | NVDA Price Prediction), the fund’s third-largest holding at roughly 6% of assets, is particularly valuable. With a beta near 2.3 and a one-year price gain of 99%, NVIDIA generates rich option premiums that flow directly into distributions. Its 56% profit margin and $4.9 trillion market cap make it one of the most liquid and volatile option underlyings available.
Private holdings are different. Databricks at about 16% and PsiQuantum at about 6% are the two largest positions. Neither trades publicly or generates covered call premium. Their value flows through NAV only when BlackRock marks them up or when they are sold or taken public. That illiquidity is the price of admission for pre-IPO access.
Venture-stage holdings: upside with risk
IonQ (NYSE:IONQ), the quantum computing company that became the first public quantum firm to exceed $100 million in annual GAAP revenue in 2025, shows both the opportunity and danger. IonQ’s 87% one-year price gain reflects commercial traction, with FY2025 revenue of $130 million and 2026 guidance of $225 to $245 million. But it carries an adjusted EBITDA loss of nearly $187 million for 2025, with losses expected to widen in 2026.
C3.ai (NYSE:AI) illustrates how venture bets can fail. Q3 FY2026 revenue fell 46% year over year to $53 million, with GAAP gross margins collapsing to 17% from 59%. The stock has fallen 51% over the past year. A closed-end fund structure absorbs losses quietly inside NAV, which is one reason the fund trades at a nearly 11% discount to its stated net asset value.
Income, opacity, and capped gains: what BSTZ costs you
- Capped upside from covered calls: When NVIDIA surges, the fund collects the premium but surrenders gains above the strike price. Over the past year BSTZ rose 71%, but NVIDIA alone gained 99%. The covered call overlay costs real appreciation in strong bull markets.
- Private valuation opacity: With over 30% of the portfolio in illiquid holdings marked by internal models rather than live prices, the stated NAV is partly an estimate. Some companies may fail before 2031. Others may IPO at valuations far above current marks. The 2031 liquidation date is the mechanism that forces resolution either way.
- Distribution cuts are possible: The monthly payment ran near $0.22 through much of 2025 before BlackRock reduced it to $0.1625. The income is not contractually guaranteed. The 1.35% gross expense ratio also erodes total return over time.
Five years of sideways, one year of gains
The fund’s one-year return of 71% is compelling, but the five-year gain of only 12% shows that BSTZ spent years going sideways while distributions returned capital. BSTZ is an income vehicle with embedded tech optionality, not a growth vehicle that happens to pay a yield.
BSTZ has historically attracted investors who want technology exposure and monthly income alongside pre-IPO optionality, with the 2031 liquidation date providing a defined endpoint for NAV realization. Investors who prioritize reliable, growing income or uncapped technology upside have historically found pure-play growth funds or dividend-growth strategies more aligned with those goals.
Top Gaining Stocks
Top Losing Stocks