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BlackRock ESG Capital Allocation Term Trust faces dividend cuts amid unsustainable payouts and risks to NAV.

Market News
02 Jul 2026
Seeking Alpha
View Source
Bearish
pluang ai news

The BlackRock ESG Capital Allocation Term Trust (ECAT) currently offers a high yield of 20.5%, but this is largely supported by return of capital, which risks eroding the fund's net asset value if market momentum slows. Management has only slightly reduced distributions so far, but a significant dividend cut of around 40% may be necessary for long-term sustainability. Compared to ECAT, traditional ESG ETFs like SUSA and ESGV provide better potential for total returns and capital growth, making them more attractive for long-term investors.

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