This CEF Holds The Biggest Bargains In Tech, Pays 7.4%

Money Investing This CEF Holds The Biggest Bargains In Tech, Pays 7.4% By Michael Foster , Contributor. Forbes contributors publish independent expert analyses and insights. Michael writes on high income assets that help people retire early. Follow Author Jul 18, 2026, 09:15am EDT --:-- / --:-- This voice experience is generated by AI. Learn more . This voice experience is generated by AI. Learn more . Summary BlackRock Technology and Private Equity Term Trust (BTX) is highlighted as a compelling investment, offering a 7.4% monthly dividend well-covered by its 43.8% NAV return. The fund's market price currently trades at a significant discount to its net asset value, presenting a prime opportunity. This situation stems from recent investor nervousness and profit-taking in the semiconductor sector, despite strong underlying demand, particularly for AI chips. While some chip stocks are expensive, BTX holds undervalued leaders like NVIDIA and Micron, which are growing rapidly but trading cheaply. As an actively managed fund, BTX avoids the pitfalls of broad ETFs, offering diversification and a reliable income stream while its discount is expected to narrow. Show More Businessman trading online stock market on teblet screen, digital investment concept getty One of our favorite tech-focused closed-end funds (CEFs) is showing a pattern we love to see. What I’m going to show you below is one of my favorite setups for future gains for us, while we collect strong dividends, too. The fund in question—the BlackRock Technology and Private Equity Term Trust (BTX) —yields 7.4% as I write this, so we’re getting paid handsomely while we wait for those gains to materialize. Plus, the performance of this CEF’s underlying portfolio, or its “total NAV return” in CEF-speak, has earned enough over the past 12 months—43.8%, to be exact—to pay that dividend many times over, so the payout looks safe (and is paid monthly, to boot). BTX Total Returns Ycharts There’s something else about this chart that I want to draw your attention to: the purple line, or the fund’s total return based on market price (which is more influenced by investor sentiment). It trails the fund’s NAV, and the gap has been widening. MORE FOR YOU This is possible with CEFs like BTX because their closed-share structure lets the market over- or underprice a fund relative to how its portfolio is doing. That’s the start of our opportunity with BTX. To get at it in full, we first need to talk about why investors are suddenly nervous about one corner of tech in particular: semiconductors . Fact is, we’re now in the midst of the third major drawdown in “semis” this year, and it’s left the benchmark for this sector, the VanEck Semiconductor ETF (SMH) , a full 9% off its year-to-date high, as of this writing. That may not sound bad, but it comes at a time when the S&P 500, benchmarked by State Street SPDR S&P 500 ETF (SPY) , is basically at its all-time high. Before we drill into what ails semis, and the growth (and dividend) opportunity it’s setting up for us in BTX, let’s do something most media outlets rarely do when discussing these products: talk about what they do , and following from that, why investors are so downcast on them all of a sudden. The place to start, as is the case with so many things these days, is AI . Semiconductors, in a nutshell, are the chips that power modern electronics. As a result of the data-center buildout, the stocks that make up SMH—like NVIDIA (NVDA) , Micron Technology (MU) , ASML Holding (ASML) , Texas Instruments (TXN) , Intel (INTC) , Advanced Micro Devices (AMD) , Broadcom (AVGO) and Applied Materials (AMAT) —have soared. However, such a fast rise in names like these in such a short time makes some investors nervous. That’s natural, especially when you consider that many of these stocks are far from flashy growth names. Texas Instruments, for example, has been around for generations, yet its stock has returned 78.2% in 2026 alone. Beyond the nerves, however, there is simple profit-taking. SMH, after all, has more than doubled in the past year. In other words, the recent decline in semis makes sense. But a prudent investor should ask: Is this selloff justified, or is it again time to buy in? Semiconductor Demand Is Still Soaring If we look at the facts, it seems quite clear that demand has not waned. Not even a little. The world’s largest chipmaker (by a huge margin) is Taiwan Semiconductor Manufacturing, or TSMC. The company just reported a 67.9% year-over-year sales increase for June, announcing the news before their scheduled earnings release. SemiAnalysis analyst Sravan Kundojjala also told CNBC that this shows strength for the entire market: “The demand-supply situation in AI is still quite tight, and TSMC is sold out on N3, which is targeted by all leading AI GPU and CPUs this year,” he said. So the sales are still there, and demand is still red-hot. But what about these companies’ valuations? On the one hand, stocks like