<![CDATA[BlackRock Resources & Commodities Strategy Trust (BCX)]]>

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

Investment Company Act file number 811-22501

Name of Fund: BlackRock Resources & Commodities Strategy Trust (BCX)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Resources & Commodities Strategy Trust, 55 East 52nd Street, New York, NY 10055

Registrant’s telephone number, including area code: (800) 882-0052, Option 4

Date of fiscal year end: 10/31/2012

Date of reporting period: 10/31/2012


Item 1 – Report to Stockholders


LOGO

     October 31, 2012   

 

 

     Annual Report

  

    

u BlackRock EcoSolutions Investment Trust (BQR)

u BlackRock Energy and Resources Trust (BGR)

u BlackRock Enhanced Capital and Income Fund, Inc. (CII)

u BlackRock Enhanced Equity Dividend Trust (BDJ)

u BlackRock Global Opportunities Equity Trust (BOE)

u BlackRock Health Sciences Trust (BME)

u BlackRock International Growth and Income Trust (BGY)

u BlackRock Real Asset Equity Trust (BCF)

u BlackRock Resources & Commodities Strategy Trust (BCX)

u BlackRock S&P Quality Rankings Global Equity Managed Trust (BQY)

u BlackRock Utility and Infrastructure Trust (BUI)

 

 

 

                Not FDIC Insured § No Bank Guaranteed § May Lose Value        

 


    

  

 

Section 19(a) Notices

BlackRock EcoSolutions Investment Trust’s (BQR), BlackRock Energy and Resources Trust’s (BGR), BlackRock Enhanced Capital and Income Fund, Inc.’s (CII), BlackRock Enhanced Equity Dividend Trust’s (BDJ), BlackRock Global Opportunities Equity Trust’s (BOE), BlackRock Health Sciences Trust’s (BME), BlackRock International Growth and Income Trust’s (BGY), BlackRock Real Asset Equity Trust’s (BCF), BlackRock Resources & Commodities Strategy Trust’s (BCX), BlackRock S&P Quality Rankings Global Equity Managed Trust’s (BQY) and BlackRock Utility and Infrastructure Trust’s (BUI) (each, a “Trust” and collectively, the “Trusts”), reported amounts and sources of distributions are estimates and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Trust’s investment experience during the year and may be subject to changes based on the tax regulations. Each Trust will provide a Form 1099-DIV each calendar year that will explain the character of these dividends and distributions for federal income tax purposes.

October 31, 2012

 

     Total Cumulative Distributions
for the Fiscal Year
  % Breakdown of the Total Cumulative
Distributions for the Fiscal Year
    

Net

Investment

Income

 

Net Realized

Capital Gains

Short-Term

   

Net Realized

Capital Gains

Long-Term

   

Return

of

Capital

   

Total Per

Common Share

 

Net

Investment

Income

 

Net Realized

Capital Gains

Short-Term

 

Net Realized

Capital Gains

Long-Term

 

Return

of

Capital

 

Total Per

Common Share

BQR*

  $0.084793     –          –          $0.799457      $0.884250   10%     0%     0%   90%   100%

BGR

  $0.135118     $1.632882          –               $1.768000     8%   92%     0%     0%   100%

CII*

  $0.315128     –          –          $1.064872      $1.380000   23%     0%     0%   77%   100%

BDJ*

  $0.131078     –          –          $0.548922      $0.680000   19%     0%     0%   81%   100%

BOE*

  $0.186576     –          –          $1.770924      $1.957500   10%     0%     0%   90%   100%

BME

  $0.080684     $1.083089          $1.336727               $2.500500     4%   43%   53%     0%   100%

BGY*

  $0.161180     –          –          $0.786670      $0.947850   17%     0%     0%   83%   100%

BCF*

  $0.119430     $0.169489          –          $0.747981      $1.036900   12%   16%     0%   72%   100%

BCX*

  $0.162003     –          –          $1.237997      $1.400000   12%     0%     0%   88%   100%

BQY*

  $0.279292     $0.680904          $0.236565          $0.073239      $1.270000   22%   54%   19%     5%   100%

BUI*

  $0.444708     $0.038022          –          $0.604770      $1.087500   41%     3%     0%   56%   100%

 

*

Certain Trusts estimate they have distributed more than the amount of earned income and net realized gains; therefore, a portion of the distribution may be a return of capital. A return of capital may occur, for example, when some or all of the shareholder’s investment in a Trust is returned to the shareholder. A return of capital does not necessarily reflect a Trust’s investment performance and should not be confused with ‘yield’ or ‘income’.

Section 19(a) notices for each Trust, as applicable, are available on the BlackRock website http://www.blackrock.com.

 

Section 19(b) Disclosure

The Trusts, acting pursuant to a Securities and Exchange Commission (“SEC”) exemptive order and with the approval of each Trust’s Board of Trustees/Directors (the “Board”), each have adopted a plan, consistent with its investment objectives and policies to support a level distribution of income, capital gains and/or return of capital (the “Plan”). In accordance with the Plans, the Trusts currently distribute the following fixed amounts per share on a quarterly basis:

 

Exchange Symbol    Amount Per Common Share

BQR

   $0.179250

BGR

   $0.405000

  CII

   $0.300000

BDJ

   $0.140000

BOE

   $0.311650

BME

   $0.384375

BGY

   $0.167850

BCF

   $0.221500

BCX

   $0.290000

BQY

   $0.250000

 BUI

   $0.362500

The fixed amounts distributed per share are subject to change at the discretion of each Trust’s Board. Under its Plan, each Trust will distribute all available investment income to its shareholders, consistent with its primary investment objectives and as required by the Internal Revenue Code of 1986, as amended (the “Code”). If sufficient investment income is not available on a quarterly basis, the Trusts will distribute long-term capital gains and/or return of capital to shareholders in order to maintain a level distribution. Each quarterly distribution to shareholders is expected to be at the fixed amount established by the Board, except for extraordinary distributions and potential distribution rate increases or decreases to enable the Trusts to comply with the distribution requirements imposed by the Code.

Shareholders should not draw any conclusions about each Trust’s investment performance from the amount of these distributions or from the terms of the Plan. Each Trust’s total return performance on net asset value is presented in its financial highlights table.

The Board may amend, suspend or terminate a Trust’s Plan without prior notice if it deems such actions to be in the best interests of the Trust or its shareholders. The suspension or termination of the Plan could have the effect of creating a trading discount (if the Trust’s stock is trading at or above net asset value) or widening an existing trading discount. The Trusts are subject to risks that could have an adverse impact on their ability to maintain level distributions. Examples of potential risks include, but are not limited to, economic downturns impacting the markets, decreased market volatility, companies suspending or decreasing corporate dividend distributions and changes in the Code. Please refer to each Trust’s prospectus for a more complete description of its risks.

 

                 
2       ANNUAL REPORT       OCTOBER 31, 2012   


 
 

 

Table of Contents

 

       Page   

 

Section  19(a) Notices

     2   

Section 19(b) Disclosure

     2   

Dear Shareholder

     4   

Annual Report:

  

The Benefits and Risks of Option Over-Writing

     5   

Derivative Financial Instruments

     5   

Trust Summaries

     6   

Financial Statements:

  

Schedules of Investments

     28   

Statements of Assets and Liabilities

     99   

Statements of Operations

     101   

Statements of Changes in Net Assets

     103   

Statements of Cash Flows

     108   

Financial Highlights

     111   

Notes to Financial Statements

     122   

Report of Independent Registered Public Accounting Firm

     135   

Important Tax Information

     136   

Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement

     137   

Automatic Dividend Reinvestment Plans

     140   

Officers and Trustees

     142   

Additional Information

     146   

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    3


 

Dear Shareholder

In the final months of 2011, financial markets were highly volatile but were in a mode of gradual improvement. Global central bank actions and better-than-expected economic data tempered investors’ anxiety after markets had been upended in the previous quarter by sovereign debt turmoil in the United States and Europe. Improving sentiment carried over into early 2012 as investors felt some relief from the world’s financial woes. Volatility was low and risk assets (including stocks, commodities and high yield bonds) moved boldly higher through the first two months of 2012, while climbing Treasury yields pressured higher-quality fixed income assets.

Markets reversed course in the spring when Europe’s debt problems boiled over once again. High levels of volatility returned as political instability threatened Greece’s membership in the eurozone and debt problems in Spain grew increasingly severe. Sovereign debt yields in peripheral European countries continued to rise while finance leaders deliberated over the fiscal integration of the currency bloc. Alongside the drama in Europe, investors were discouraged by gloomy economic reports from various parts of the world. A slowdown in China, a key powerhouse for global growth, emerged as a particular concern. In the United States, disappointing jobs reports dealt a crushing blow to investor sentiment. Risk assets sold off in the second quarter as investors retreated to safe haven assets.

Despite ongoing concerns about the health of the global economy and the debt crisis in Europe, most asset classes enjoyed a robust summer rally powered mainly by expectations for policy stimulus from central banks in Europe and the United States. Global economic data continued to be mixed, but the spate of downside surprises seen in the second quarter had receded and, outside of some areas of Europe, the risk of recession largely subsided. Additionally, in response to mounting debt pressures, the European Central Bank allayed fears by affirming its conviction to preserve the euro bloc. Early in September, the European Central Bank announced its plan to purchase sovereign debt in the eurozone’s most troubled nations. Later that month, the US Federal Reserve announced its long-awaited – and surprisingly aggressive – stimulus program, committing to purchase $40 billion of agency mortgage-backed securities per month until the US economy exhibits enough strength to sustain real growth and the labor market shows solid improvement. These central bank actions boosted investor confidence and risk assets rallied globally.

European stocks continued their advance in the final month of the reporting period as progress toward fiscal integration created a more positive atmosphere for investors. However, as corporate earnings season got underway in the United States, lackluster results pointed to the fragility of global growth and pushed US equity markets down for the month of October. The period ended with increasing concern about how and when US politicians would resolve the nation’s looming fiscal crisis, known as the “fiscal cliff.”

All asset classes performed well for the 12-month period ended October 31, 2012, with the strongest returns coming from US stocks and high yield bonds. For the six-month period ended October 31, 2012, equities underperformed fixed income investments, where high yield was the leading sector. US and international stocks finished the six-month period with modest gains, while emerging market stocks lagged other asset classes amid ongoing uncertainty. Near-zero short term interest rates continued to keep yields on money market securities near their all-time lows.

Although the financial world remains highly uncertain, we believe there are new avenues of opportunity – new ways to invest and new markets to consider. We believe it’s our responsibility to help investors adapt to today’s new world of investing and build the portfolios these times require. We encourage you to visit www.blackrock.com/newworld for more information.

Sincerely,

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

LOGO

“Although the financial world remains highly uncertain, we believe there are new avenues of opportunity.”

Rob Kapito

President, BlackRock Advisors, LLC

 

 

Total Returns as of October 31, 2012

 

       6-month    12-month

 

US large cap equities (S&P 500® Index)

 

 

2.16% 

 

 

15.21%

 

US small cap equities (Russell 2000® Index)

 

 

0.95  

 

 

12.08  

 

International equities (MSCI Europe, Australasia, Far East Index)

 

 

2.12  

 

 

4.61  

 

Emerging market equities (MSCI Emerging Markets Index)

 

 

(1.25) 

 

 

2.63  

 

3-month Treasury bill (BofA Merrill Lynch 3-Month Treasury Bill Index)

 

 

0.06  

 

 

0.08  

 

US Treasury securities (BofA Merrill Lynch 10- Year US Treasury Index)

 

 

3.49  

 

 

7.46  

 

US investment grade bonds (Barclays US Aggregate Bond Index)

 

 

2.75  

 

 

5.25  

 

Tax-exempt municipal bonds (S&P Municipal Bond Index)

 

 

3.65  

 

 

9.57  

 

US high yield bonds (Barclays US Corporate High Yield 2% Issuer Capped Index)

 

 

6.24  

 

 

13.58  

Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.

 

 

 

 

                 

4

      THIS PAGE NOT PART OF YOUR TRUST REPORT     


  

 

    

The Benefits and Risks of Option Over-Writing

In general, the goal of each of the Trusts is to provide total return through a combination of current income and realized and unrealized gains (capital appreciation). The Trusts seek to pursue this goal primarily by investing in a portfolio of equity securities and utilizing an option over-writing strategy in an effort to enhance distribution yield and total return performance. However, these objectives cannot be achieved in all market conditions.

The Trusts primarily write single stock covered call options, and may also from time to time write single stock put options. When writing (selling) a covered call option, the Trust holds an underlying equity security and enters into an option transaction which allows the counterparty to purchase the equity security at an agreed-upon price (“strike price”) within an agreed-upon time period. The Trusts receive cash premiums from the counterparties upon writing (selling) the option, which along with net investment income and net realized gains, if any, are generally available to support current or future distributions paid by the Trusts. During the option term, the counterparty will elect to exercise the option if the market value of the equity security rises above the strike price, and the Trust will be obligated to sell the equity security to the counterparty at the strike price, realizing a gain or loss. Premiums received will increase gains or reduce losses realized on the sale of the equity security. If the option remains unexercised upon its expiration, the Trusts will realize gains equal to the premiums received.

Writing covered call options entails certain risks, which include, but are not limited to, the following: an increase in the value of the underlying equity security above the strike price can result in the exercise of a written option (sale by the Trust to the counterparty) when the Trust might not otherwise have sold the security; exercise of the option by the counterparty will result in a sale below the current market value and will result in a gain or loss being realized by the Trust; and writing covered call options limits the potential appreciation that could be realized on the underlying equity security to the extent of the strike price of the option. As such, an option over-writing strategy may outperform the general equity market in flat or falling markets but underperform in rising markets.

Each Trust employs a plan to support a level distribution of income, capital gains and/or return of capital. The goal of the plan is to provide shareholders with consistent and predictable cash flows by setting

distribution rates based on expected long-term returns of the Trusts. Such distributions, under certain circumstances, may exceed a Trust’s total return performance. When total distributions exceed total return performance for the period, the difference will reduce the Trust’s net asset value per share (“NAV”). The final determination of the source and character of distributions in accordance with federal income tax regulations is made after the fiscal year and is reported in the Trust’s annual report to shareholders. To the extent that dividends and distributions exceed the Trust’s current and accumulated earnings and profits, which are measured on a tax basis, the excess may be treated as a tax return of capital. Dividends and distributions in excess of a Trust’s taxable income and net capital gains that do not exceed the Trust’s current and accumulated earnings and profits, which are measured on a tax basis, may be treated as ordinary income dividends and/or capital gain distributions.

To illustrate these concepts, assume the following: (1) a common stock purchased at and currently trading at $37.15 per share; (2) a three-month call option is written by a Trust with a strike price of $40 (i.e., 7.7% higher than the current market price); and (3) the Trust receives $2.45, or 6.6% of the common stock’s value, as a premium. If the stock price remains unchanged, the option will expire and there would be a 6.6% return for the three-month period. If the stock were to decline in price by 6.6% (i.e., decline to $34.70 per share), the option strategy would “break-even” from an economic perspective resulting in neither a gain nor a loss. If the stock were to climb to a price of $40 or above, the option would be exercised and the stock would return 7.7% coupled with the option premium received of 6.6% for a total return of 14.3%. Under this scenario, the Trust loses the benefit of any appreciation of the stock above $40, and thus is limited to a 14.3% total return. The premium from writing the call option serves to offset some of the unrealized loss on the stock in the event that the price of the stock declines, but if the stock were to decline more than 6.6% under this scenario, the Trust’s downside protection is eliminated and the stock could eventually become worthless.

Each Trust intends to write covered call options to varying degrees depending upon market conditions. Please refer to each Trust’s Schedule of Investments and the Notes to Financial Statements for details of written options.

 

    

Derivative Financial Instruments

The Trusts may invest in various derivative financial instruments, including financial futures contracts, foreign currency exchange contracts and options, as specified in Note 2 of the Notes to Financial Statements, which may constitute forms of economic leverage. Such derivative financial instruments are used to obtain exposure to a security, index and/or market without owning or taking physical custody of securities or to hedge market, equity, foreign currency exchange rate and/or other risks. Derivative financial instruments involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the derivative financial instrument. The Trusts’

ability to use a derivative financial instrument successfully depends on the investment advisor’s ability to predict pertinent market movements accurately, which cannot be assured. The use of derivative financial instruments may result in losses greater than if they had not been used, may require a Trust to sell or purchase portfolio investments at inopportune times or for distressed values, may limit the amount of appreciation a Trust can realize on an investment, may result in lower dividends paid to shareholders or may cause a Trust to hold an investment that it might otherwise sell. The Trusts’ investments in these instruments are discussed in detail in the Notes to Financial Statements.

 

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    5


 

 

Trust Summary as of October 31, 2012

 

 

BlackRock EcoSolutions Investment Trust

 

 

  Trust Overview

BlackRock EcoSolutions Investment Trust’s (BQR) (the “Trust”) investment objective is to provide total return through a combination of current income, current gains and long-term capital appreciation. The Trust seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its assets in equity securities issued by companies that are engaged in one or more of New Energy (e.g., products, technologies and services connected to the efficient use of energy or the provision or manufacture of alternative forms of energy), Water Resources and Agriculture business segments. The Trust may invest directly in such securities or synthetically through the use of derivatives. The Trust utilizes an option writing (selling) strategy to enhance dividend yield.

No assurance can be given that the Trust’s investment objective will be achieved.

 

  Portfolio Management Commentary

How did the Trust perform?

 

For the 12-month period ended October 31, 2012, the Trust returned 11.63% based on market price and 7.77% based on net asset value (“NAV”). For the same period, the closed-end Lipper Sector Equity Funds category posted an average return of 16.21% based on market price and 11.37% based on NAV. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

What factors influenced performance?

 

The largest contribution to the Trust’s positive performance for the period came from the water resources segment of the portfolio where the Trust’s water utility holdings drove returns. The strongest-performing stock was Manila Water Co., Inc. (Philippines), which announced a company restructuring program that is expected to result in rate rebasing for some of their water properties as well as overall growth for the company. The Trust’s Latin America-based water utilities also made notable contributions to results. The strongest performer in this region was the Brazilian company Cia de Saneamento Basico do Estado de Sao Paulo given expectations that the regulatory environment would remain amenable and the potential for higher tariffs.

 

 

In the agriculture segment of the portfolio, exposure to agricultural science companies Syngenta AG and Monsanto Co. were strong contributors to performance. These companies benefited from the expansion of farming cultivation areas and farmers’ desire to increase yields on the back of stronger prices for crops. The new energy space experienced a steady stream of merger and acquisition activity during the period. The Trust’s holding in The Shaw Group, Inc., the energy enabling and infrastructure company, generated significant performance as the company received a bid at a 72% premium over its pre-announcement share price. The Trust’s option writing strategy had a positive impact on results for the period.

 

 

Detracting from performance was the Trust’s exposure, although limited, to renewable energy technology companies, an area in which the Trust had largely reduced its allocation. The environment for renewable energy

technology companies remained challenging due to industry overcapacity and a lack of regulatory momentum. In the agriculture segment, exposure to potash (a fertilizer product) had a negative impact on performance as potash prices disappointed as India and China did not commit to the purchase contracts investors had expected. In water resources, some of the Trust’s European-based holdings hurt returns. In addition, the Trust held an elevated cash balance as a means of defensive positioning given near-term uncertainty about the market outlook. The Trust’s cash position had a modestly negative impact on performance as equities generally advanced.

Describe recent portfolio activity.

 

During the 12-month period, the Trust initiated a position in Novozymes A/S (Denmark) in the new energy segment of the portfolio. In the water resources space, the Trust added two new holdings of US-based multinational water technology companies, Pall Corp. and Xylem, Inc., the latter of which was spun off from the break-up of ITT Corp. The Trust also received shares of water, hygiene and energy technology company Ecolab, Inc. (United States) as a result of its takeover of Nalco Holding Co. (United States). The Trust initiated a position in ITC Holdings Corp., which is the largest independent electricity transmission company in the United States. With its work on grid efficiency and expansion, ITC Holdings Corp. is well positioned to benefit from the US government’s increased spending on energy infrastructure.

 

 

The Trust reduced its holdings in Brazilian water companies in the latter part of the period. Although fundamentals in the water sector remained attractive, the Trust reduced its weighting due to concerns that negative investor sentiment in the electric utility sector (following a surprise announcement from Brazil’s government that they would be imposing tariff reductions) would spill over to other regulated sectors such as water.

Describe portfolio positioning at period end.

 

At the end of period, the Trust continued to hold large allocations to both the agriculture and water resources segments and less emphasis on new energy, which is reflective of the relative outlooks and valuations for these three segments.

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

                 
6       ANNUAL REPORT       OCTOBER 31, 2012   


 
 

 

BlackRock EcoSolutions Investment Trust

 

Trust Information

 

Symbol on New York Stock Exchange (“NYSE”)

   BQR

Initial Offering Date

   September 28, 2007

Yield on Closing Market Price as of October 31, 2012 ($ 8.66)1

   8.28%

Current Quarterly Distribution per Common Share2

   $0.17925

Current Annualized Distribution per Common Share2

   $0.71700

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

2 

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain.

The table below summarizes the changes in the Trust’s market price and NAV per share:

     10/31/12    10/31/11    Change    High    Low  

Market Price

  $8.66    $8.58    0.93%        $10.40    $7.34

Net Asset Value

  $9.14    $9.38    (2.56)%        $  9.71    $8.47

The following charts show the ten largest holdings and industry allocations of the Trust’s long-term investments:

 

  Ten Largest Holdings

          
      10/31/12

Manila Water Co., Inc.

         4 %

Monsanto Co.

       3  

Syngenta AG

       3  

Agrium, Inc.

       3  

Severn Trent Plc

       3  

Inversiones Aguas Metropolitanas SA

       3  

Aqua America, Inc.

       3  

Sao Martinho SA

       2  

Pennon Group Plc

       2  

BrasilAgro - Companhia Brasileira de Propriedades AG

       2  

  Industry Allocation

        
      10/31/12   10/31/11
    

Water Utilities

      25%      25%

Chemicals

   22   23

Food Products

   14   14

Machinery

   12   10

Electric Utilities

    4    4

Multi-Utilities

    3    2

Real Estate Investment Trusts (REITs)

    3    3

Electrical Equipment

    3    3

Construction & Engineering

    3    2

Commercial Services & Supplies

    3    3

Oil, Gas & Consumable Fuels

    2    3

Electronic Equipment, Instruments & Components

    2    2

Materials

    –    2

Other3

    4    4

 

3

Other includes a 1% holding or less in each of the following industries; for 10/31/12, Auto Components, Building Products, Independent Power Producers & Energy Traders, Metals & Mining, Paper & Forest Products, Road & Rail and Semiconductors & Semiconductor Equipment and for 10/31/11, Auto Components, Building Products, Independent Power Producers & Energy Traders, Paper & Forest Products, Semiconductors & Semiconductor Equipment and Road & Rail.

For Trust compliance purposes, the Trust’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Trust management. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

 

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    7


 

 

Trust Summary as of October 31, 2012

 

 

BlackRock Energy and Resources Trust

 

  Trust Overview

BlackRock Energy and Resources Trust’s (BGR) (the “Trust”) investment objective is to provide total return through a combination of current income, current gains and long-term capital appreciation. The Trust seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its total assets in equity securities of energy and natural resources companies and equity derivatives with exposure to the energy and natural resources industry. The Trust may invest directly in such securities or synthetically through the use of derivatives. The Trust utilizes an option writing (selling) strategy to enhance dividend yield.

No assurance can be given that the Trust’s investment objective will be achieved.

 

  Portfolio Management Commentary

How did the Trust perform?

 

For the 12-month period ended October 31, 2012, the Trust returned (1.88)% based on market price and (1.76)% based on NAV. For the same period, the closed-end Lipper Sector Equity Funds category posted an average return of 16.21% based on market price and 11.37% based on NAV. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

What factors influenced performance?

 

In a highly volatile period for financial markets broadly, and commodities in particular, the largest detractors from the Trust’s performance were its exposures to higher-beta (i.e., greater sensitivity to market movements) segments of the energy market. This was partly due to volatility in commodity prices, but a significant portion can also be attributed to investors’ general preference for less risky assets during periods of heightened volatility. This tended to make commodity-related equities and particularly higher-beta energy equities less desirable at certain points during the period. As a result, the Trust’s holdings of oil-related exploration & production (“E&P”) names and coal producers had a negative impact on performance. In the E&P group, oil-related names such as Crew Energy, Inc. and Anadarko Petroleum Corp. were negatively impacted by volatile crude oil price movements. While global crude prices ended the period relatively flat, many of these names could not recover losses due to large negative price momentum in the second quarter of 2012. Meanwhile, coal producers lagged throughout the period as pricing remained depressed for thermal and metallurgical coal. Eastern producers such as

Alpha Natural Resources, Inc., Peabody Energy Corp. and CONSOL Energy, Inc. all posted losses during the period.

 

 

The Trust’s option writing strategy was the largest contributor to positive performance for the period. The strategy’s covered call approach produced sizeable gains, particularly within the E&P segment, as a changing price landscape contributed to volatility in the group, producing high premiums on options while stock performance declined. Options written on names in the oil & gas equipment & services group also contributed positively to returns.

 

 

Also contributing positively were the Trust’s holdings within the oil & gas storage & transportation group, where Cheniere Energy, Inc. returned more than 23% for the period.

Describe recent portfolio activity.

 

During the 12-month period, the largest additions to the Trust’s portfolio included refiner Valero Energy Corp., E&P names Noble Energy, Inc. and Pioneer Natural Resources Co., and oil & gas equipment & services name Basic Energy Services, Inc. Notable sales during the period included E&P names Brigham Exploration Co. and Apache Corp., integrated oil & gas company Royal Dutch Shell Plc and oil & gas storage & transportation name El Paso Corp.

Describe portfolio positioning at period end.

 

As of period end, the Trust remains positioned to take advantage of a pro-growth, positive inflationary environment. The Trust’s holdings continue to emphasize producers of oil, natural gas and coal as well as oil & gas storage & transportation companies.

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

                 
8       ANNUAL REPORT       OCTOBER 31, 2012   


 
 

 

BlackRock Energy and Resources Trust

 

Trust Information

   

 

Symbol on NYSE

   BGR

Initial Offering Date

   December 29, 2004

Yield on Closing Market Price as of October 31, 2012 ($24.28)1

   6.67%

Current Quarterly Distribution per Common Share2

   $0.405

Current Annualized Distribution per Common Share2

   $1.620

 

1 

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

2 

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain.

The table below summarizes the changes in the Trust’s market price and NAV per share:

      10/31/12    10/31/11    Change    High    Low  

Market Price

   $24.28    $26.54    (8.52)%        $27.99    $20.90

Net Asset Value

   $25.95    $28.33    (8.40)%        $29.61    $22.21

The following charts show the ten largest holdings and industry allocations of the Trust’s long-term investments:

 

  Ten Largest Holdings

          
      10/31/12

Valero Energy Corp.

         6 %

Cheniere Energy, Inc.

       5  

Range Resources Corp.

       5  

Anadarko Petroleum Corp.

       4  

Noble Energy, Inc.

       4  

National Oilwell Varco, Inc.

       4  

Occidental Petroleum Corp.

       4  

Cameron International Corp.

       3  

Pioneer Natural Resources Co.

       3  

Whiting Petroleum Corp.

       3  

  Industry Allocation

        
     10/31/12   10/31/11
Oil, Gas & Consumable Fuels      78%     77%
Energy Equipment & Services    16   20
Metals & Mining      6     3

For Trust compliance purposes, the Trust’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Trust management. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

 

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    9


 

 

Trust Summary as of October 31, 2012

 

 

BlackRock Enhanced Capital and Income Fund, Inc.

 

  Trust Overview

BlackRock Enhanced Capital and Income Fund, Inc.’s (CII) (the “Trust”) investment objective is to provide investors with a combination of current income and capital appreciation. The Trust seeks to achieve its investment objective by investing in a portfolio of equity and debt securities of US and foreign issuers. The Trust may invest directly in such securities or synthetically through the use of derivatives. The Trust utilizes an option writing (selling) strategy to enhance dividend yield.

No assurance can be given that the Trust’s investment objectives will be achieved.

 

  Portfolio Management Commentary

How did the Trust perform?

 

For the 12-month period ended October 31, 2012, the Trust returned 16.39% based on market price and 12.94% based on NAV. For the same period, the benchmark S&P 500® Value Index returned 16.72%. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

What factors influenced performance?

 

Detracting from performance relative to the S&P 500® Value Index was stock selection within financials combined with an underweight to the sector, particularly among large diversified banks. Stock selection and an underweight in consumer discretionary also hurt returns. Stock selection in telecommunication services (“telecom”), consumer staples and materials had a negative impact on performance, as did overweights to the consumer staples and materials sectors.

 

 

Conversely, stock selection in the information technology (“IT”) sector was the largest contributor to positive performance for the period. Stock selection in industrials and energy also added to returns. A combination of stock selection and a sector underweight in utilities had a positive impact. The Trust’s option writing strategy had a positive impact on performance for the period.

Describe recent portfolio activity.

 

During the 12-month period, the Trust increased exposure to the financials sector by initiating positions in U.S. Bancorp, Aflac, Inc., Hart-ford Financial Services Group, Inc. and Prudential Financial, Inc. The Trust reduced exposure to health care by exiting its position in Bristol-Myers Squibb Co. and consumer staples through its sales of Mondelez International, Inc. and General Mills, Inc.

Describe portfolio positioning at period end.

 

At period end, the Trust held sector overweights relative to the S&P 500® Value Index in health care, telecom, IT, materials and consumer staples. The Trust was underweight in financials, consumer discretionary, utilities and industrials, with a slight underweight in energy as well.

 

 

As of period end, the Trust was positioned to take advantage of price and valuation dislocations, which have recently occurred mostly in financials and IT, while at the same time maintaining overweight positions in sectors that exhibit greater stability and less sensitivity to economic cycles, such as health care, telecom and consumer staples. The Trust’s sector weights in health care, telecom and IT remained the largest overweight positions relative to the S&P 500® Value Index. In IT, the Trust continued to focus on companies with low capital intensity, cash generative profiles and substantial net cash on their balance sheets. In health care, the Trust’s positioning reflected a positive view on the sector’s high dividend yields, reasonable valuations and potential benefits of the Affordable Care Act becoming effective in 2014.

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

                 
10       ANNUAL REPORT       OCTOBER 31, 2012   


 
 

 

BlackRock Enhanced Capital and Income Fund, Inc.

 

Trust Information

   

 

Symbol on NYSE

   CII

Initial Offering Date

   April 30, 2004

Yield on Closing Market Price as of October 31, 2012 ($12.99)1

   9.24%

Current Quarterly Distribution per Common Share2

   $0.30

Current Annualized Distribution per Common Share2

   $1.20

 

1 

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

2 

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain.

The table below summarizes the changes in the Trust’s market price and NAV per share:

      10/31/12    10/31/11    Change    High    Low  

Market Price

   $12.99    $12.39    4.84%        $13.88    $11.83

Net Asset Value

   $14.11    $13.87    1.73%        $14.73    $13.12

The following charts show the ten largest holdings and sector allocations of the Trust’s long-term investments:

 

  Ten Largest Holdings

          
      10/31/12

Pfizer, Inc.

         4 %

Merck & Co., Inc.

       4  

JPMorgan Chase & Co.

       3  

Wells Fargo & Co.

       3  

Chevron Corp.

       3  

Verizon Communications, Inc.

       3  

General Electric Co.

       3  

CenturyLink, Inc.

       3  

Exxon Mobil Corp.

       3  

Unilever NV

       3  

  Sector Allocation

        
      10/31/12   10/31/11

Financials

      22%      14%

Health Care

   12   15

Information Technology

   12   13

Energy

   11   12

Industrials

   10    9

Consumer Staples

    8   11

Telecommunication Services

    8    7

Consumer Discretionary

    8    9

Utilities

    5    5

Materials

    4    5

For Trust compliance purposes, the Trust’s sector classifications refer to any one or more of the sector sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Trust management. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

 

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    11


 

 

Trust Summary as of October 31, 2012

 

 

BlackRock Enhanced Equity Dividend Trust

 

  Trust Overview

BlackRock Enhanced Equity Dividend Trust’s (BDJ) (the “Trust”) primary investment objective is to provide current income and current gains, with a secondary investment objective of long-term capital appreciation. The Trust seeks to achieve its investment objectives by investing in common stocks that pay dividends and have the potential for capital appreciation and by utilizing an option writing (selling) strategy to enhance distributions paid to the Trust’s shareholders. The Trust invests, under normal market conditions, at least 80% of its total assets in dividend paying equities. The Trust may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Trust’s investment objectives will be achieved.

 

  Portfolio Management Commentary

 

 

On February 27, 2012, the Trust acquired substantially all of the assets and assumed substantially all of the liabilities of the BlackRock Equity Dividend Trust and BlackRock Strategic Equity Dividend Trust in exchange for newly issued shares of the Trust.

How did the Trust perform?

 

For the 12-month period ended October 31, 2012, the Trust returned 11.34% based on market price and 13.22% based on NAV. For the same period, the Russell 1000® Value Index returned 16.89%. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

What factors influenced performance?

 

The Trust’s sector underweight and stock selection within financials detracted from performance relative to the Russell 1000® Value Index. Stock selection in the industrials and telecommunication services sectors also had a negative impact. Stock selection in health care as well as an underweight to the sector hurt relative performance, as did stock selection in consumer discretionary and materials.

 

 

Contributing positively to performance was a combination of stock selection and a sector underweight in information technology. Overweighting industrials, utilities and consumer staples also modestly boosted relative returns, as did stock selection within energy. The Trust’s option writing strategy had a positive impact on performance for the period.

 

Describe recent portfolio activity.

 

During the 12-month period, the Trust made several changes to its portfolio allocations. The Trust increased exposure to consumer discretionary by initiating positions in securities such as Time Warner Cable, Inc. and The Walt Disney Co., and financials through an investment in ACE Ltd. (property & casualty insurance). In the energy sector, the Trust decreased its holdings in the oil, gas & consumable fuels industry and, in materials, the Trust reduced exposure to metals & mining stocks. Toward the end of the period, the Trust’s cash and cash equivalents levels were elevated given the higher-than-normal correlation in the risk-on/risk-off equity markets, which caused a drag on performance as equities generally advanced.

Describe portfolio positioning at period end.

 

As of the end of the period, relative to the Russell 1000® Value Index, the Trust was overweight in the industrials, consumer staples and utilities sectors, and continued to maintain a significant underweight to the financials sector. The Trust continued to focus on companies that reflect the safety and relative stability of US equity markets, but are growing overseas and expanding into emerging markets.

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

                 
12       ANNUAL REPORT       OCTOBER 31, 2012   


 
 

 

BlackRock Enhanced Equity Dividend Trust

 

Trust Information

   

 

Symbol on NYSE

   BDJ

Initial Offering Date

   August 31, 2005

Yield on Closing Market Price as of October 31, 2012 ($7.41)1

   9.18%

Current Quarterly Distribution per Common Share2

   $0.17

Current Annualized Distribution per Common Share2

   $0.68

 

1 

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

2 

The Quarterly Distribution per Common Share, declared on December 10, 2012, was decreased to $0.14 per share. The Yield on Closing Market Price, Current Quarterly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future. A portion of the distribution may be deemed a tax return of capital or net realized gain.

The table below summarizes the changes in the Trust’s market price and NAV per share:

      10/31/12    10/31/11    Change    High    Low  

Market Price

   $7.41    $7.29    1.65%        $7.73    $6.82

Net Asset Value

   $8.30    $8.03    3.36%        $8.50    $7.62

The following charts show the ten largest holdings and sector allocations of the Trust’s long-term investments:

 

  Ten Largest Holdings

          
      10/31/12

Chevron Corp.

         3 %

Wells Fargo & Co.

       3  

JPMorgan Chase & Co.

       3  

Pfizer, Inc.

       2  

Exxon Mobil Corp.

       2  

The Home Depot, Inc.

       2  

Philip Morris International, Inc.

       2  

International Business Machines Corp.

       2  

Deere & Co.

       2  

AT&T Inc.

       2  

  Sector Allocation

        
      10/31/12   10/31/11

Financials

      18%      16%

Industrials

   15   16

Consumer Staples

   13   14

Energy

   12   15

Consumer Discretionary

   11    7

Utilities

   10    8

Health Care

    7    6

Telecommunication Services

    6    6

Materials

    5    8

Information Technology

    3    4

For Trust compliance purposes, the Trust’s sector classifications refer to any one or more of the sector sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Trust management. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

 

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    13


 

 

Trust Summary as of October 31, 2012

 

 

BlackRock Global Opportunities Equity Trust

 

  Trust Overview

BlackRock Global Opportunities Equity Trust’s (BOE) (the “Trust”) primary investment objective is to provide current income and current gains, with a secondary investment objective of long-term capital appreciation. The Trust seeks to achieve its investment objectives by investing primarily in equity securities issued by companies located in countries throughout the world and utilizing an option writing (selling) strategy to enhance current gains. The Trust invests, under normal market conditions, at least 80% of its assets in equity securities or options on equity securities or indices or sectorsof equity securities. Under normal circumstances, the Trust invests a substantial amount of its total assets in foreign issuers, issuers that primarily trade in a market located outside the United States or issuers that do a substantial amount of business outside the United States. The Trust may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Trust’s investment objectives will be achieved.

 

  Portfolio Management Commentary

How did the Trust perform?

 

For the 12-month period ended October 31, 2012, the Trust returned 1.68% based on market price and 7.36% based on NAV. For the same period, the MSCI All Country World Index posted a return of 8.55%. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

What factors influenced performance?

 

Detracting from the Trust’s performance relative to the MSCI All Country World Index was stock selection in financials, information technology (“IT”) and energy. In financials, shares of South Korean property and casualty company Dongbu Insurance Co., Ltd. fell as a result of unfavorable regulatory changes and was sold during the period. Holdings in diversified financials also hampered returns as macroeconomic risks in Europe dampened hopes for an uptick in capital markets activity. In IT, stock selection in software and semiconductors detracted from returns. Within energy, stock selection in integrated oil & gas had a negative impact. Shares of Repsol SA, which were sold during the period, negatively impacted returns as the Argentinean government seized control of the company’s assets. The Trust’s average cash position was elevated at period-end to account for the Trust’s quarterly distribution, and detracted from performance relative to the MSCI All Country World Index.

 

 

Performance benefited from stock selection in the consumer segments and utilities. In consumer staples, positions in brewers and soft drinks delivered particularly strong returns. In particular the announcement of Anheuser-Busch InBev NV’s takeover of Grupo Modelo SAB de CV posi-

tively impacted returns, as the Trust owned both companies. Within consumer discretionary, holdings in cable & satellite performed well. Holdings in household durables and other consumer-related areas benefited from the recovery in US housing. In utilities, positioning in Brazil-based water utility Cia de Saneamento Basico do Estado de Sao Paulo and UK-based power producer National Grid Plc drove positive performance. In addition, the Trust’s option over-writing strategy had a positive impact on returns.

Describe recent portfolio activity.

 

During the 12-month period, the Trust prudently repositioned its investments to benefit from the market advance. On the defensive side, its exposure to the health care sector was increased by making additions to existing pharmaceutical holdings, and overall exposure to telecommunication services was reduced. Among cyclical stocks, the Trust favored higher-quality industrials and gold miners, along with energy companies benefiting from deep-water energy development and liquefied natural gas infrastructure spending. As a result of this sector repositioning, the most substantial change from a regional perspective was increased exposure to developed Europe.

Describe portfolio positioning at period end.

 

At period end, the Trust’s positioning reflected a positive-yet-conservative outlook for the world economy as well as expectations for continued market volatility and strong demand for higher-quality equities. While Trust management anticipates a modest rate of economic expansion, the headwinds for global economic growth remain significant, so holdings were carefully diversified across defensive and cyclical exposures.

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

                 
14       ANNUAL REPORT       OCTOBER 31, 2012   


 
 

 

BlackRock Global Opportunities Equity Trust

 

Trust Information

   

 

Symbol on NYSE

   BOE

Initial Offering Date

   May 31, 2005

Yield on Closing Market Price as of October 31, 2012 ($13.24)1

   12.39%

Current Quarterly Distribution per Common Share2

   $0.41

Current Annualized Distribution per Common Share2

   $1.64

 

1 

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

2 

The Quarterly Distribution per Common Share, declared on November 1, 2012, was decreased to $0.31165 per share. The Yield on Closing Market Price, Current Quarterly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future. A portion of the distribution may be deemed a tax return of capital or net realized gain.

The table below summarizes the changes in the Trust’s market price and NAV per share:

      10/31/12    10/31/11    Change    High    Low  

Market Price

   $13.24    $14.95    (11.44)%        $16.02    $12.30

Net Asset Value

   $14.99    $16.03    (6.49)%        $16.34    $13.79

The following charts show the ten largest holdings and geographic allocations of the Trust’s long-term investments:

 

  Ten Largest Holdings

          
      10/31/12

Apple, Inc.

         2 %

Wells Fargo & Co.

       2  

Svenska Cellulosa AB, B Shares

       1  

BHP Billiton Ltd. - ADR

       1  

British American Tobacco Plc

       1  

Eni SpA

       1  

Eli Lilly & Co.

       1  

Roche Holding AG

       1  

China Construction Bank Corp., H Shares

       1  

Statoil ASA

       1  

  Geographic Allocation

        
      10/31/12   10/31/11

United States

      47%      48%

United Kingdom

   12    7

Germany

    5    6

France

    4    3

Japan

    3    6

Sweden

    3    –

Australia

    2    1

Norway

    2    –

Switzerland

    2    3

Hong Kong

    2    2

Mexico

    2    1

Indonesia

    2    –

Ireland

    2    1

Canada

    1    3

Brazil

    1    2

South Korea

    1    3

Netherlands

    –    4

Other3

    9   10

 

3 

Other includes a 1% holding or less in each of the following countries; for 10/31/12 Italy, Taiwan, China, Spain, Singapore, India, Belgium, Cayman Islands, Bermuda, Thailand, and Argentina and for 10/31/11, China, Thailand, Denmark, Italy, Belgium, South Africa, Singapore, Luxembourg, Columbia, Taiwan, Israel, Spain and Indonesia.

 

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    15


 

 

Trust Summary as of October 31, 2012

 

 

BlackRock Health Sciences Trust

 

  Trust Overview

BlackRock Health Sciences Trust’s (BME) (the “Trust”) investment objective is to provide total return through a combination of current income, current gains and long-term capital appreciation. The Trust seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its assets in equity securities of companies engaged in the health sciences and related industries and equity derivatives with exposure to the health sciences industry. The Trust utilizes an option writing (selling) strategy to enhance dividend yield.

No assurance can be given that the Trust’s investment objective will be achieved.

 

  Portfolio Management Commentary

How did the Trust perform?

 

For the 12-month period ended October 31, 2012, the Trust returned 18.17% based on market price and 16.42% based on NAV. For the same period, the Russell 3000® Healthcare Index returned 22.84%. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

What factors influenced performance?

 

Relative to the Russell 3000® Healthcare Index, the largest detractor from the Trust’s performance was an underweight to the pharmaceuticals industry as well as underweight exposures to individual pharmaceutical stocks that performed well during the period. The overall industry underweight hampered relative performance primarily when the market declined during the second quarter of 2012, as investors tend to prefer the stability of large-capitalization, high-dividend yielding companies in down markets. The Trust’s underweight positions in several large index constituents, such as Pfizer, Inc. and Merck & Co., Inc., hindered results as these key pharmaceutical names appreciated during the period. In the health care providers & services industry, the Trust’s overweight to health care distributors and underweight to health care services detracted slightly from relative performance, as did stock selection within the health care services space.

 

 

The key contributor to positive performance in the Trust was an overweight relative to the Russell 3000® Healthcare Index and stock selection in biotechnology. The Trust held several names that experienced strong stock price appreciation driven primarily by clinical developments, such as favorable drug trial results, regulatory approvals (or the anticipation thereof) and the swift adoption of products introduced in the marketplace. In addition, a few biotechnology holdings were acquired at a

premium during the period as larger entities, such as pharmaceutical firms, attempted to replenish their drug pipelines. Stock selection in the health care equipment space also had a positive impact on the Trust’s performance for the period. The Trust’s option writing strategy also had a positive impact on performance during the period.

Describe recent portfolio activity.

 

During the 12-month period, the Trust significantly reduced its overweight to health care equipment & supplies, while significantly adding to its holdings in the biotechnology industry. The Trust tactically traded exposure to pharmaceuticals as market conditions fluctuated during the period, which resulted in a larger industry allocation at period end. The Trust slightly reduced exposure to the health care providers & services space with a focus on minimizing holdings deemed vulnerable to potential federal government budget reductions and subsequent health care reimbursement cuts.

Describe portfolio positioning at period end.

 

As of period end, the Trust continued to maintain a focus on innovative companies with products or services that address an unmet health care need or that enhance currently available products or services. As such, the Trust continued to be most heavily weighted toward the biotechnology and pharmaceuticals industries. Given uncertainty around government policy developments, the Trust’s holdings at period end reflected an avoidance of companies that have strong links to, or business mixes that are reliant on government reimbursement and thus would be at risk in a budget-cutting scenario. This positioning was most evident within the Trust’s allocation to the health care providers & services industry, where companies are generally more vulnerable to federal budget cuts. The Trust’s positioning also reflected caution with respect to companies that derive revenue from Europe as the region’s debt problems remain unresolved.

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

                 
16       ANNUAL REPORT       OCTOBER 31, 2012   


 
 

 

BlackRock Health Sciences Trust

 

Trust Information

   

 

Symbol on NYSE

   BME

Initial Offering Date

   March 31, 2005

Yield on Closing Market Price as of October 31, 2012 ($ 27.86)1

   5.52%

Current Quarterly Distribution per Common Share2

   $0.384375

Current Annualized Distribution per Common Share2

   $1.537500

 

1 

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

2 

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain.

The table below summarizes the changes in the Trust’s market price and NAV per share:

      10/31/12    10/31/11    Change    High    Low  

Market Price

   $27.86    $25.81    7.94%        $29.20    $24.22

Net Asset Value

   $28.34    $26.65    6.34%        $29.45    $24.96

The following charts show the ten largest holdings and industry allocations of the Trust’s long-term investments:

 

  Ten Largest Holdings

          
      10/31/12

Eli Lilly & Co.

         5 %

Amgen, Inc.

       4  

Pfizer, Inc.

       4  

Johnson & Johnson

       4  

Celgene Corp.

       4  

Merck & Co., Inc.

       3  

Roche Holding AG

       3  

Express Scripts Holding Co.

       3  

Sanofi

       3  

Gilead Sciences, Inc.

       3  

  Industry Allocation

        
      10/31/12   10/31/11

Pharmaceuticals

      36%      40%

Biotechnology

   22   20

Health Care Providers & Services

   20   19

Health Care Equipment & Supplies

   13   14

Life Sciences Tools & Services

    6    5

Machinery

    –    2

Other3

    3    –

 

3 

Other includes a 1% holding or less in each of the following industries; for 10/31/12, Food & Staples Retailing, Industrial Conglomerates, Diversified Consumer Services, Health Care Technology and Chemicals.

For Trust compliance purposes, the Trust’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Trust management. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

 

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    17


 

 

Trust Summary as of October 31, 2012

 

 

BlackRock International Growth and Income Trust

 

  Trust Overview

BlackRock International Growth and Income Trust’s (BGY) (the “Trust”) primary investment objective is to provide current income and current gains, with a secondary objective of long-term capital appreciation. The Trust seeks to achieve its investment objectives by investing primarily in equity securities issued by companies of any market capitalization located in countries throughout the world and utilizing an option writing (selling) strategy to enhance current gains. The Trust invests, under normal market conditions, at least 80% of its assets in equity securities issued by non-U.S. companies of any market capitalization located in countries throughout the world. The Trust may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Trust’s investment objectives will be achieved.

 

  Portfolio Management Commentary

How did the Trust perform?

 

For the 12-month period ended October 31, 2012, the Trust returned 6.61% based on market price and 7.65% based on NAV. For the same period, the MSCI All Country World Index ex-US returned 3.98%. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

What factors influenced performance?

 

Positive performance came largely from favorable stock selection in a majority of sectors, primarily materials, utilities, information technology (“IT”), industrials and consumer staples. Within materials, positioning in metals & mining and gold proved beneficial. The Trust continued to favor gold-related stocks amid accelerated currency debasement policies (i.e., those that lower the value of currency) in the United States and Europe. The Trust’s avoidance of suppliers of industrial base metals proved beneficial given the impact of China’s economic slowdown. In utilities, investments in electric utilities and independent power providers in the United Kingdom and Brazil lifted returns. Holdings in the utilities sector benefited from lower commodity prices, favorable regulations and investors seeking companies with stable yields in an era of low interest rates. Within IT, an underweight in computer hardware contributed positively to returns. Trust management continued to believe personal computers are in a secular decline and positioning remained focused on the smartphone supply chain and software names that offer solutions for smaller-ticket items. Stock selection in industrials was a net contributor primarily due to the performance of holdings in construction & engineering and trading. Within consumer staples, the announcement of Anheuser-Busch InBev NV’s takeover of Grupo Modelo SAB de CV posi-

tively impacted returns, as the Trust owned both companies. In addition, the Trust’s option over-writing strategy had a positive impact on returns.

 

 

Relative to the MSCI All Country World Index ex-US, the Trust’s underweight exposure to the financials sector was the largest detractor from performance, as banks received a boost from policy action and real estate stocks benefited from investors seeking yield in a low interest rate environment. Stock selection in consumer discretionary hampered returns due to disappointing results in automobile manufacturers and restaurants.

Describe recent portfolio activity.

 

During the 12-month period, the Trust prudently repositioned its investments to benefit from the market advance. On the defensive side, its exposure to the health care sector was increased by making additions to existing pharmaceutical holdings, and overall exposure to telecommunication services was reduced. Among cyclical stocks, the Trust favored higher-quality industrials and gold miners, along with energy companies benefiting from deep-water energy development and liquefied natural gas infrastructure spending. As a result of this sector repositioning, the most substantial change from a regional perspective was increased exposure to developed Europe.

Describe portfolio positioning at period end.

 

At period end, the Trust’s positioning reflected a positive-yet-conservative outlook for the world economy as well as expectations for continued market volatility and strong demand for higher-quality equities. While Trust management anticipates a modest rate of economic expansion, the headwinds for global economic growth remain significant, so holdings were carefully diversified across defensive and cyclical exposures.

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

                 
18       ANNUAL REPORT       OCTOBER 31, 2012   


 
 

 

BlackRock International Growth and Income Trust

 

Trust Information

   

 

Symbol on NYSE

   BGY

Initial Offering Date

   May 30, 2007

Yield on Closing Market Price as of October 31, 2012 ($ 7.41)1

   9.06%

Current Quarterly Distribution per Common Share2

   $0.16785

Current Annualized Distribution per Common Share2

   $0.67140

 

1 

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

2 

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain.

The table below summarizes the changes in the Trust’s market price and NAV per share:

      10/31/12    10/31/11    Change    High    Low  

Market Price

   $7.41    $7.88    (5.96)%        $8.49    $6.72

Net Asset Value

   $8.28    $8.72    (5.05)%        $8.90    $7.56

The following charts show the ten largest holdings and geographic allocations of the Trust’s long-term investments:

 

  Ten Largest Holdings

          
      10/31/12

Roche Holding AG

         3 %

Sanofi

       3  

Syngenta AG

       2  

BHP Billiton Ltd. - ADR

       2  

Rexam Plc

       2  

AIA Group Ltd.

       2  

Nestle SA

       2  

Eni SpA

       2  

Volvo AB, B Shares

       2  

HSBC Holdings Plc

       2  

  Geographic Allocation

        
      10/31/12   10/31/11

United Kingdom

      25%      16%

Switzerland

   11    6

France

    7    6

Germany

    6    9

Japan

    6   12

Australia

    4    3

Sweden

    4    –

Canada

    4    6

Hong Kong

    3    4

Singapore

    3    2

Mexico

    3    1

Netherlands

    2    8

Ireland

    2    2

China

    2    2

Italy

    2    2

Spain

    2    1

Brazil

    2    3

South Korea

    1    4

United States

    1    5

Other3

   10    8

 

3 

Other includes a 1% holding or less in each of the following countries; for 10/31/12, India, Indonesia, Jersey, Channel Islands, Norway, Belgium, Finland, Taiwan, Cayman Islands, South Africa, Israel, Argentina, Thailand, Malaysia, and Gibraltar and for 10/31/11, Taiwan, Norway, Israel, South Africa, Belgium, Bermuda, Luxembourg, India, Columbia, Indonesia, Thailand, Denmark and Gibraltar.

 

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    19


 

 

Trust Summary as of October 31, 2012

 

 

BlackRock Real Asset Equity Trust

 

  Trust Overview

BlackRock Real Asset Equity Trust’s (BCF) (the “Trust”) investment objective is to provide total return through a combination of current income, current gains and long-term capital appreciation. The Trust seeks to achieve its investment objective by investing, under normal market conditions,at least 80% of its assets in equity securities of energy, natural resources and basic materials companies and equity derivatives with exposure to companies in the energy, natural resources and basic materials industries. The Trust may invest directly in such securities or synthetically through the use of derivatives. The Trust utilizes an option writing (selling) strategy to enhance dividend yield.

No assurance can be given that the Trust’s investment objective will be achieved.

 

  Portfolio Management Commentary

How did the Trust perform?

 

For the 12-month period ended October 31, 2012, the Trust returned (3.71)% based on market price and (2.79)% based on NAV. For the same period, the closed-end Lipper Sector Equity Funds category posted an average return of 16.21% based on market price and 11.37% based on NAV. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

What factors influenced performance?

 

The Trust’s investments in both the natural resources segment (metals & mining) and the energy segment of the portfolio detracted from performance for the period, while the basic materials segment contributed positively.

 

 

Within metals & mining, the Trust’s holding of diversified metals & mining name Iluka Resources Ltd. had a negative impact on performance due to weakness in the zircon market. The effect of this position overshadowed the positive impact of the Trust’s allocation to silver miners.

 

 

In the energy segment of the Trust, returns were hampered by an allocation to coal producers. Coal producers lagged throughout the period as prices remained depressed for thermal and metallurgical coal. Eastern producers such as Alpha Natural Resources, Inc. and Peabody Energy Corp. posted losses during the period. The Trust’s allocation to the oil & gas exploration & production group also detracted from performance as the negative impact of several natural gas producers outweighed positive performance from the Trust’s oil-related holdings. Both commodities were volatile and suffered significant downdrafts and swings over the course of the period.

 

 

Contributing positively to performance in the basic materials segment of the portfolio was the Trust’s allocation to paper & forest products, where positions in Weyerhaeuser Co., International Paper Co. and MeadWestvaco Corp. generated particularly strong returns. Agriculture names including Agrium, Inc. and Monsanto Co. also added to results, with each rising more than 20% during the period.

 

 

The Trust’s option writing strategy also had a positive impact on performance during the period. In particular, the Trust benefited from writing calls on diversified metals & mining names as these stocks underperformed during the period while volatility remained elevated in this group. Similarly, option writing against oil & gas exploration & production names aided results.

Describe recent portfolio activity.

 

During the 12-month period, the Trust established new positions in energy names Chevron Corp., National Oilwell Varco, Inc., Pioneer Natural Resources Co. and Exxon Mobil Corp. In the metals & mining segment of the portfolio, the Trust selectively added to its copper and gold holdings and reduced exposure to various diversified mining names. Notable sales during the period included energy names Penn West Petroleum Ltd., Schlumberger Ltd. and EQT Corp.

Describe portfolio positioning at period end.

 

At the end of the period, the Trust held 43% of total long-term investments in metals & mining stocks, with key allocations to copper and iron ore. The Trust’s allocation to the energy sector (32%) was heavily weighted in oil-related exploration & production companies and integrated oil & gas names. The basic materials segment of the portfolio (23%) was allocated across paper products, machinery and chemicals.

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

                 
20       ANNUAL REPORT       OCTOBER 31, 2012   


 
 

 

BlackRock Real Asset Equity Trust

 

Trust Information

   

 

Symbol on NYSE

   BCF

Initial Offering Date

   September 29, 2006

Yield on Closing Market Price as of October 31, 2012 ($ 10.39)1

   8.53%

Current Quarterly Distribution per Common Share2

   $0.2215

Current Annualized Distribution per Common Share2

   $0.8860

 

1 

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

2 

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain.

The table below summarizes the changes in the Trust’s market price and NAV per share:

      10/31/12    10/31/11    Change    High    Low  

Market Price

   $10.39    $11.84    (12.25)%        $12.70    $9.53

Net Asset Value

   $11.03    $12.45    (11.41)%        $13.08    $9.95

The following charts show the ten largest holdings and industry allocations of the Trust’s long-term investments:

 

  Ten Largest Holdings

          
      10/31/12

BHP Billiton Plc

         4 %

Rio Tinto Plc

       4  

Industrias Penoles SAB de CV

       4  

Caterpillar, Inc.

       3  

Praxair, Inc.

       3  

Xstrata Plc

       3  

E.I. du Pont de Nemours & Co.

       3  

Fresnillo Plc

       2  

MeadWestvaco Corp.

       2  

International Paper Co.

       2  

  Industry Allocation

        
      10/31/12   10/31/11

Metals & Mining

      43%      43%

Oil, Gas & Consumable Fuels

   27   28

Chemicals

   13   12

Paper & Forest Products

    6    6

Energy Equipment & Services

    5    6

Machinery

    4    4

Real Estate Investment Trusts (REITs)

    2    –

Containers & Packaging

    –    1

For Trust compliance purposes, the Trust’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Trust management. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

 

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    21


 

 

Trust Summary as of October 31, 2012

 

 

BlackRock Resources & Commodities Strategy Trust

 

  Trust Overview

BlackRock Resources & Commodities Strategy Trust’s (BCX) (the “Trust”) primary investment objective is to seek high current income and current gains, with a secondary objective of capital appreciation. The Trust will seek to achieve its investment objectives, under normal market conditions, by investing at least 80% of its total assets in equity securities issued by commodity or natural resources companies, derivatives with exposure to commodity or natural resources companies or investments in securities and derivatives linked to the underlying price movement of commodities or natural resources. The Trust utilizes an option writing (selling) strategy to enhance dividend yield.

No assurance can be given that the Trust’s investment objectives will be achieved.

 

  Portfolio Management Commentary

How did the Trust perform?

 

For the 12-month period ended October 31, 2012, the Trust returned 4.02% based on market price and 0.90% based on NAV. For the same period, the closed-end Lipper Sector Equity Funds category posted an average return of 16.21% based on market price and 11.37% based on NAV. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

What factors influenced performance?

 

The Trust’s holdings in oil & gas storage & transportation made the largest contribution to positive performance for the period, led by Plains All American Pipeline LP, ONEOK Partners LP and Magellan Midstream Partners LP. Each of these stocks returned more than 20% during the period as they benefited from energy investors’ preference for lower-beta (i.e., lower sensitivity to market movements), higher-yielding names amid a volatile market environment. Exposure to fertilizers and agricultural chemicals also added to results as strong performance in these names during the first ten months of 2012 outweighed a temporary setback in May. Notable performers in this group included agricultural products names Monsanto Co. and Syngenta AG and fertilizer name CF Industries Holdings, Inc. The Trust’s option writing strategy also had a positive impact on performance during the period.

 

 

Detracting from performance was the Trust’s exposure to coal producers, which lagged throughout the period as prices remained depressed for

thermal and metallurgical coal. Eastern producers such as Alpha Natural Resources, Inc., Peabody Energy Corp. and CONSOL Energy, Inc. all posted losses during the period. Exposure to the higher-beta oil & gas exploration & production group also had a negative impact on returns. In particular, the Trust’s holding in Permian Basin Royalty Trust declined more than 25% during the period.

Describe recent portfolio activity.

 

During the 12-month period, significant transactions in the Trust included purchases in the metals & mining segment, including mining names and exposure to physical gold. Notable sales during the period included gold miner Agnico-Eagle Mines Ltd., exploration & production name Penn West Petroleum Ltd. and fertilizer company Scotts Miracle-Gro Co.

Describe portfolio positioning at period end.

 

At the end of the period, the Trust held approximately 38% of its total long-term investments in energy stocks, with an emphasis on oil & gas storage & transportation and exploration & production companies. In metals & mining (35%), the Trust’s holdings were concentrated in gold and precious metals producers. The Trust’s exposure to agriculture-related stocks was concentrated mostly in fertilizers and other agricultural chemicals.

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

                 
22       ANNUAL REPORT       OCTOBER 31, 2012   


 
 

 

BlackRock Resources & Commodities Strategy Trust

 

Trust Information

   

 

Symbol on NYSE

   BCX

Initial Offering Date

   March 30, 2011

Yield on Closing Market Price as of October 31, 2012 ($14.12)1

   9.92%

Current Quarterly Distribution per Common Share2

   $0.35

Current Annualized Distribution per Common Share2

   $1.40

 

1 

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

2 

The Quarterly Distribution per Common Share, declared on December 10, 2012, was decreased to $0.29 per share. The Yield on Closing Market Price, Current Quarterly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future. A portion of the distribution may be deemed a tax return of capital or net realized gain.

The table below summarizes the changes in the Trust’s market price and NAV per share:

      10/31/12    10/31/11    Change    High    Low  

Market Price

   $14.12    $14.95    (5.55)%        $16.33    $12.41

Net Asset Value

   $15.42    $16.83    (8.38)%        $17.37    $13.72

The following charts show the ten largest holdings and industry allocations of the Trust’s long-term investments:

 

  Ten Largest Holdings

          
      10/31/12

Silver Wheaton Corp.

         4 %

Potash Corp. of Saskatchewan, Inc.

       3  

Syngenta AG

       3  

E.I. du Pont de Nemours & Co.

       3  

Franco-Nevada Corp.

       3  

Sprott Physical Gold Trust

       3  

ONEOK Partners LP

       2  

Monsanto Co.

       2  

Plains All American Pipeline LP

       2  

Enterprise Products Partners LP

       2  

  Industry Allocation

        
      10/31/12   10/31/11

Oil, Gas & Consumable Fuels

      37%      38%

Metals & Mining

   33   29

Chemicals

   21   21

Machinery

    4    5

Food Products

    3    4

Energy Equipment & Services

    2    3

For Trust compliance purposes, the Trust’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Trust management. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

 

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    23


 

 

Trust Summary as of October 31, 2012

 

 

BlackRock S&P Quality Rankings Global Equity Managed Trust

 

Trust Overview

BlackRock S&P Quality Rankings Global Equity Managed Trust’s (BQY) (the “Trust”) investment objective is to provide total return through a combination of current income, current gains and long-term capital appreciation. The Trust seeks to achieve its investment objective by investing primarily in equity securities of issuers that pay above-average dividends and have the potential for capital appreciation. The Trust invests, under normal market conditions, at least 80% of its assets in equity securities included in the S&P Quality Rankings that are ranked at least B+ by S&P at the time of investment. Under normal circumstances, the Trust invests a substantial amount of its total assets in foreign issuers, issuers that primarily trade in a market located outside the United States or issuers that do a substantial amount of business outside the United States. The Trust may invest directly in such securities or synthetically through the use of derivatives. The Trust utilizes an option writing (selling) strategy to enhance dividend yield.

No assurance can be given that the Trust’s investment objective will be achieved.

 

Portfolio Management Commentary

 

How did the Trust perform?

 

For the 12-month period ended October 31, 2012, the Trust returned 9.90% based on market price and 9.48% based on NAV. For the same period, the MSCI World Value Index returned 9.83%. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

What factors influenced performance?

 

Relative to the MSCI World Value Index, the largest detractor from the Trust’s performance was stock selection across the financials, industrials, health care and energy sectors. An overweight in information technology (“IT”) as well as individual selection within the energy sector also weighed on returns during the period. Underweights in both the financials and health care sectors detracted from relative performance.

 

 

The largest contributor to the Trust’s positive performance was stock selection in the IT sector, followed by an overweight in consumer staples. Stock selection within the telecommunication services (“telecom”) sector boosted returns during the period, as did a small underweight to energy. An overweight to the industrials sector also helped relative performance.

   

The Trust’s option writing strategy had a positive impact on results for the period.

Describe recent portfolio activity.

 

During the 12-month period, the Trust made relatively few material changes to overall portfolio allocations. However, the Trust gradually reduced its cash weighting as opportunities presented themselves in certain sectors. Primarily, the Trust increased its weightings to both the utilities and telecom sectors given positive trends in the underlying industries and a heightened focus on yield in the marketplace. Similarly, the Trust increased exposure to the consumer staples sector given the natural stability of consumer demand for products offered by these companies and increased investor demand for companies with free cash flows.

Describe Trust positioning at period end.

 

As of period end, the Trust’s positioning reflected a positive outlook for corporate dividend growth, especially among the highest quality companies within the Trust’s investment universe. The Trust continued to focus on companies that represent the relative safety and stability of US equity markets, but are growing overseas and expanding into emerging markets.

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

                 
24       ANNUAL REPORT       OCTOBER 31, 2012   


 
 

 

BlackRock S&P Quality Rankings Global Equity Managed Trust

 

Trust Information

 

Symbol on NYSE MKT

   BQY

Initial Offering Date

   May 28, 2004

Yield on Closing Market Price as of October 31, 2012 ($12.34)1

   8.10%

Current Quarterly Distribution per Common Share2

   $0.25

Current Annualized Distribution per Common Share2

   $1.00

 

1 

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

2 

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain.

The table below summarizes the changes in the Trust’s market price and NAV per share:

      10/31/12    10/31/11    Change     High    Low

Market Price

   $12.34    $12.43      (0.72 )%    $13.56    $11.32

Net Asset Value

   $13.46    $13.61      (1.10 )%    $13.87    $12.43

The following charts show the ten largest holdings and geographic allocations of the Trust’s long-term investments:

 

  Ten Largest Holdings

      10/31/12

Exxon Mobil Corp.

       3 %

AT&T Inc.

       3  

Chevron Corp.

       2  

Total SA - ADR

       2  

International Business Machines Corp.

       2  

Emerson Electric Co.

       2  

The Walt Disney Co.

       2  

Verizon Communications, Inc.

       2  

Altria Group, Inc.

       2  

Bristol-Myers Squibb Co.

       2  

  Geographic Allocation

      10/31/12   10/31/11

United States

       69 %       52 %

United Kingdom

       6         8  

Australia

       4         6  

Canada

       4         6  

France

       3         6  

Sweden

       3         4  

Germany

       3         4  

Hong Kong

       2         3  

Japan

       2         5  

Singapore

       1         2  

Other3

       3         4  

 

3 

Other includes a 1% holding or less in each of the following countries; for 10/31/12, Switzerland, Netherlands, Belgium, Spain and Italy and for 10/31/11, Belgium, Switzerland, Finland, Spain, Italy and Netherlands.

 

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    25


 

 

Trust Summary as of October 31, 2012

 

 

BlackRock Utility and Infrastructure Trust

 

Trust Overview

   

BlackRock Utility and Infrastructure Trust’s (BUI) (the “Trust”) investment objective is to provide total return through a combination of current income, current gains and long-term capital appreciation. The Trust seeks to achieve its investment objective by investing primarily in equity securities issued by companies that are engaged in the Utilities and Infrastructure business segments anywhere in the world and by utilizing an option writing (selling) strategy in an effort to enhance current gains. The Trust considers the “Utilities” business segment to include products, technologies and services connected to the management, ownership, operation, construction, development or financing of facilities used to generate, transmit or distribute electricity, water, natural resources or telecommunications and the “Infrastructure” business segment to include companies that own or operate infrastructure assets or that are involved in the development, construction, distribution or financing of infrastructure assets. Under normal circumstances, the Trust invests a substantial amount of its total assets in foreign issuers, issuers that primarily trade in a market located outside the United States or issuers that do a substantial amount of business outside the United States. The Trust may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Trust’s investment objective will be achieved.

 

Portfolio Management Commentary

    

 

How did the Trust perform?

 

For the period beginning with the Trust’s initial trading date of November 25, 2011 through October 31, 2012, the Trust returned 0.71% based on market price and 12.05% based on NAV. For the same period, the closed-end Lipper Sector Equity Funds category posted an average return of 21.95% based on market price and 17.79% based on NAV. All returns reflect reinvestment of dividends. The Trust ended the period trading at discount to NAV, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

What factors influenced performance?

 

The largest contributor to the Trust’s performance was its large allocation to the telecommunication services (“telecom”) sector. A small allocation to real estate investment trusts within financials also helped performance. Stock selection within the utilities sector had a positive impact, with the strongest returns coming from the Trust’s holdings in the regulated electric utilities industry. The Trust’s sizeable exposure to media stocks in the consumer discretionary sector also contributed positively to results. The Trust’s option writing strategy also had a positive impact on performance during the period.

 

 

Detracting from performance for the period was the Trust’s large exposure to the energy sector, particularly in the oil, gas & consumable fuels industry. Also having a negative impact was the Trust’s limited exposure

   

to the strong-performing industrials sector. Within industrials, low exposure to the transportation & infrastructure space and heavy weightings in the construction & engineering and machinery industries adversely impacted performance.

Describe recent portfolio activity.

 

Following its inception on November 25, 2011, the Trust began building its portfolio of utilities and infrastructure equities and was fully invested by the end of January 2012. Since that time, the Trust made relatively few material changes to its overall portfolio allocations. However, the Trust gradually increased its weighting in the telecommunications companies given favorable dynamics within the space. This coincided with a gradually decreasing cash balance. The Trust maintained its large exposure to utilities stocks (roughly two-thirds of the portfolio), the majority of which are regulated electric utilities companies.

Describe Trust positioning at period end.

 

As of period end, the Trust was positioned to benefit from the proliferation of middle class populations and growing consumption patterns in emerging markets. The Trust’s holdings reflected a preference for industry leaders with early market penetration that are poised to capture growing revenues as demand for infrastructure, telecommunication services and electricity accelerates. This theme remains critical to the Trust’s portfolio allocations and was reflected in the Trust’s positioning at period end with large exposures to utilities and telecom stocks.

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

                 
26       ANNUAL REPORT       OCTOBER 31, 2012   


 
 

 

BlackRock Utility and Infrastructure Trust

 

Trust Information

 

Symbol on NYSE

   BUI

Initial Offering Date

   November 25, 2011

Yield on Closing Market Price as of October 31, 2012 ($ 19.03)1

   7.62%

Current Quarterly Distribution per Common Share2

   $0.3625

Current Annualized Distribution per Common Share2

   $1.4500

 

1 

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

2 

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain.

The table below summarizes the changes in the Trust’s market price and NAV per share:

 

      10/31/12    11/25/11    Change   High    Low

Market Price

   $19.03    $20.00        (4.85 )%   $21.02      $ 17.49  

Net Asset Value

   $20.22    $19.10        5.86 %   $20.53      $ 18.92  

The following charts show the ten largest holdings and geographic allocations of the Trust’s long-term investments:

 

Ten Largest Holdings

      10/31/12

American Tower Corp. - REIT

       3 %

National Grid Plc.

       3  

Verizon Communications, Inc.

       3  

Tractebel Energia SA

       3  

CCR SA

       3  

NextEra Energy, Inc.

       3  

The Southern Co.

       3  

Cia de Saneamento de Minas Gerais - COPASA

       2  

Aqua America, Inc.

       2  

Edison International

       2  

Geographic Allocation

      10/31/12

United States

       62 %

Brazil

       13  

United Kingdom

       7  

Canada

       5  

Hong Kong

       4  

Italy

       3  

Australia

       2  

Germany

       2  

Other3

       2  

 

3 

Other includes a 1% holding or less in Norway and France.

 

 

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    27


 

 

Schedule of Investments October 31, 2012

 

 

BlackRock EcoSolutions Investment Trust (BQR)

(Percentages shown are based on Net Assets)

 

Common Stocks    Shares      Value  

 

 

Auto Components – 0.7%

  

Johnson Controls, Inc. (a)

     31,900       $ 821,425   

 

 

Building Products – 0.2%

  

Kingspan Group Plc

     23,600         247,771   

 

 

Chemicals – 20.5%

  

Agrium, Inc. (a)

     30,100         3,176,754   

CF Industries Holdings, Inc. (a)

     9,950         2,041,642   

Incitec Pivot Ltd.

     277,400         908,570   

Israel Chemicals Ltd.

     90,000         1,125,956   

Johnson Matthey Plc

     59,204         2,148,721   

K+S AG

     19,400         919,451   

Monsanto Co. (a)

     40,100         3,451,407   

The Mosaic Co. (a)

     36,900         1,931,346   

Novozymes A/S, B Shares

     42,000         1,160,416   

Nufarm Ltd.

     63,760         380,108   

Potash Corp. of Saskatchewan, Inc. (a)

     53,600         2,163,832   

Sinofert Holdings Ltd.

     2,447,500         515,353   

Syngenta AG

     8,300         3,236,083   

Wacker Chemie AG (b)

     7,000         395,787   
     

 

 

 
        23,555,426   

 

 

Commercial Services & Supplies – 2.4%

  

Tetra Tech, Inc. (c)

     87,000         2,256,780   

Tianjin Capital Environmental Protection Group Co. Ltd., Series H

     2,007,000         466,967   
     

 

 

 
        2,723,747   

 

 

Construction & Engineering – 2.5%

  

Aegion Corp. (a)(b)(c)

     13,100         241,956   

Layne Christensen Co. (a)(c)

     11,700         260,793   

Quanta Services, Inc. (a)(c)

     48,100         1,247,233   

The Shaw Group, Inc. (c)

     26,100         1,142,919   
     

 

 

 
        2,892,901   

 

 

Electric Utilities – 3.9%

  

Acciona SA

     3,800         233,570   

Iberdrola SA

     237,005         1,227,433   

ITC Holdings Corp.

     5,600         445,872   

NextEra Energy, Inc.

     25,400         1,779,524   

SSE Plc

     32,000         748,461   
     

 

 

 
        4,434,860   

 

 

Electrical Equipment – 2.8%

  

ABB Ltd. (a)

     21,100         381,066   

American Superconductor Corp. (c)

     33,500         120,265   

Gamesa Corp. Tecnologica SA

     40,100         81,924   

General Cable Corp. (a)(c)

     8,700         248,211   

Nordex SE (c)

     7,300         25,545   
Common Stocks    Shares      Value  

 

 

Electrical Equipment (concluded)

  

Roper Industries, Inc. (a)

     11,400       $ 1,244,538   

Schneider Electric SA

     13,800         864,077   

Vestas Wind Systems A/S (b)(c)

     30,000         173,445   
     

 

 

 
        3,139,071   

 

 

Electronic Equipment, Instruments & Components – 1.7%

  

Itron, Inc. (a)(c)

     21,200         870,472   

Trimble Navigation Ltd. (a)(c)

     23,510         1,109,202   
     

 

 

 
        1,979,674   

 

 

Food Products – 13.2%

  

Agria Corp. - ADR (c)

     100,000         102,000   

Archer-Daniels-Midland Co.

     43,200         1,159,488   

BrasilAgro - Companhia Brasileira de Propriedades AG (c)

     525,200         2,391,916   

Bunge Ltd. (a)(b)

     29,600         2,102,488   

Cosan Ltd., A Shares

     81,100         1,330,851   

Cresud SACIF y A - ADR

     47,300         378,873   

Illovo Sugar Ltd.

     234,900         857,714   

IOI Corp. Bhd

     533,333         884,155   

Orkla ASA

     59,600         472,129   

Sao Martinho SA

     200,000         2,499,200   

SLC Agricola SA

     150,000         1,432,756   

SunOpta, Inc. (a)(c)

     54,400         326,400   

Viterra, Inc.

     64,846         1,021,954   

Wilmar International Ltd.

     86,000         217,085   
     

 

 

 
        15,177,009   

 

 

Independent Power Producers & Energy Traders – 0.7%

  

China Longyuan Power Group Corp., Series H

     278,000         180,314   

Enel Green Power SpA

     139,200         237,091   

Ormat Technologies, Inc. (a)

     19,400         369,182   

Trina Solar Ltd. - ADR (a)(c)

     11,600         48,140   
     

 

 

 
        834,727   

 

 

Machinery – 10.9%

  

AGCO Corp. (c)

     39,400         1,793,094   

CNH Global NV (a)(c)

     31,500         1,411,200   

Deere & Co. (a)

     24,900         2,127,456   

IDEX Corp. (a)

     11,500         489,095   

Kurita Water Industries Ltd.

     65,100         1,477,863   

Pall Corp. (a)

     10,500         661,080   

Pentair Ltd. (a)

     41,000         1,731,840   

Watts Water Technologies, Inc., Class A

     28,800         1,158,624   

Xylem, Inc. (a)

     70,000         1,698,200   
     

 

 

 
        12,548,452   

 

 

Metals & Mining – 0.9%

  

Umicore SA

     19,800         1,017,484   

 

 
 

  Portfolio Abbreviations

 

To simplify the listings of portfolio holdings in the Trust’s Schedule of Investments, the names and descriptions of many securities have been abbreviated according to the following list:      ADR      American Depositary Receipt    KRW      Korean Won
     AUD      Australian Dollar    MXN      Mexican New Peso
     BRL      Brazil Real    NOK      Norwegian Krone
     CAD      Canadian Dollar    NVDR      Non-Voting Depository Receipt
     CHF      Swiss Franc    PCL      Public Company Limited
     CLP      Chilean Peso    PEN      Peruvian Neuvo Sol
     DKK      Danish Krone    REIT      Real Estate Investment Trust
     EUR      Euro    SEK      Swedish Krona
     GBP      British Pound    SGD      Singapore Dollar
     GDR      Global Depositary Receipts    TWD      Taiwan Dollar
     HKD      Hong Kong Dollar    USD      US Dollar
     ILS      Israeli Shekel    ZAR      South African Rand
     JPY      Japanese Yen        

 

See Notes to Financial Statements.

    
                 
28       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (continued)

 

 

BlackRock EcoSolutions Investment Trust (BQR)

(Percentages shown are based on Net Assets)

 

Common Stocks    Shares      Value  

 

 

Multi-Utilities – 3.3%

  

Hera SpA

     377,400       $ 636,269   

Suez Environnement Co.

     10,225         108,546   

United Utilities Group Plc

     158,381         1,731,646   

Veolia Environnement SA

     126,000         1,247,154   
     

 

 

 
        3,723,615   

 

 

Oil, Gas & Consumable Fuels – 2.1%

  

Cheniere Energy, Inc. (a)(c)

     8,500         136,765   

Rentech, Inc. (b)(c)

     345,800         892,164   

Sasol Ltd.

     25,000         1,065,002   

Sasol Ltd. - ADR (a)

     8,200         347,762   
     

 

 

 
        2,441,693   

 

 

Paper & Forest Products – 0.2%

  

Fibria Celulose SA - ADR (c)

     22,200         195,582   

Precious Woods Holding AG (c)

     20,000         63,352   
     

 

 

 
        258,934   

 

 

Real Estate Investment Trusts (REITs) – 3.1%

  

Plum Creek Timber Co., Inc. (a)(b)

     52,100         2,287,190   

Rayonier, Inc. (a)

     25,275         1,238,728   
     

 

 

 
        3,525,918   

 

 

Road & Rail – 0.5%

  

All America Latina Logistica SA

     133,000         605,066   

 

 

Semiconductors & Semiconductor Equipment – 0.2%

  

First Solar, Inc. (a)(c)

     4,300         104,533   

MEMC Electronic Materials, Inc. (c)

     19,400         48,888   

Renewable Energy Corp. ASA (c)

     22,700         3,977   

Suntech Power Holdings Co. Ltd. - ADR (c)

     14,600         11,826   

Yingli Green Energy Holding Co. Ltd. - ADR (c)

     38,200         64,558   
     

 

 

 
        233,782   

 

 

Water Utilities – 22.9%

  

American States Water Co.

     26,000         1,144,520   

American Water Works Co., Inc.

     55,600         2,042,744   

Aqua America, Inc.

     108,100         2,744,659   

Artesian Resources Corp., Class A

     31,743         730,406   

California Water Service Group

     98,000         1,805,160   

China Water Affairs Group Ltd. (b)

     4,556,000         1,197,218   

Cia de Saneamento Basico do Estado de Sao Paulo

     35,000         1,481,647   

Cia de Saneamento de Minas Gerais - COPASA

     43,100         1,017,313   

Guangdong Investments Ltd.

     1,334,000         1,088,943   

Hyflux Ltd.

     769,000         847,751   

Inversiones Aguas Metropolitanas SA

     1,500,000         2,790,190   

Manila Water Co., Inc.

     5,610,000         3,947,674   

Pennon Group Plc

     215,200         2,492,845   

Severn Trent Plc

     113,500         2,943,668   
     

 

 

 
        26,274,738   

 

 

Total Long-Term Investments

(Cost – $108,751,064) – 92.7%

        106,436,293   

 

 

    

     
          
Short-Term Securities    Shares      Value  

 

 

BlackRock Liquidity Funds, TempFund, Institutional Class, 0.17% (d)(f)

     7,218,848       $ 7,218,848   

 

 
     Beneficial
Interest
(000)
        

 

 

BlackRock Liquidity Series, LLC Money Market
Series, 0.31% (d)(e)(f)

   $ 1,554         1,554,150   

 

 

Total Short-Term Securities

(Cost – $ 8,772,998) – 7.6%

        8,772,998   

 

 

Total Investments Before Options Written

(Cost – $ 117,524,062) – 100.3%

  

  

     115,209,291   

 

 

    

     
          

 

Options Written

   Contracts         

 

 

Exchange-Traded Call Options – (0.2)%

  

ABB Ltd., Strike Price CHF 18.50, Expires 11/16/12

     100         (253

Aegion Corp., Strike Price USD 20.50, Expires 12/03/12

     60         (805

Agrium, Inc., Strike Price USD 105, Expires 11/19/12

     135         (37,462

Bunge Ltd., Strike Price USD 67.50, Expires 11/19/12

     135         (50,625

CF Industries Holdings, Inc., Strike Price USD 220, Expires 11/19/12

     45         (5,422

Cheniere Energy, Inc., Strike Price USD 18, Expires 11/19/12

     18         (135

CNH Global NV, Strike Price USD 45, Expires 11/19/12

     141         (17,978

Deere & Co., Strike Price USD 85, Expires 11/19/12

     115         (20,872

First Solar, Inc., Strike Price USD 28, Expires 11/19/12

     20         (1,340

General Cable Corp., Strike Price USD 32, Expires 11/19/12

     39         (390

IDEX Corp., Strike Price USD 42, Expires 11/01/12

     52         (3,065

Itron, Inc., Strike Price USD 45, Expires 11/19/12

     96         (4,320

Johnson Controls, Inc., Strike Price USD 29, Expires 11/19/12

     145         (725

Layne Christensen Co., Strike Price USD 21, Expires 11/12/12

     53         (7,382

Monsanto Co., Strike Price USD 91, Expires 12/06/12

     64         (3,159

The Mosaic Co., Strike Price USD 62.60, Expires 11/17/12

     165         (82

Ormat Technologies, Inc., Strike Price USD 19, Expires 12/06/12

     88         (4,490
 

 

See Notes to Financial Statements.

                 
      ANNUAL REPORT       OCTOBER 31, 2012    29


 

 

Schedule of Investments (continued)

 

 

BlackRock EcoSolutions Investment Trust (BQR)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Exchange-Traded Call Options (concluded)

  

Pall Corp., Strike Price USD 65, Expires 12/18/12

     47       $ (5,061

Pentair Ltd., Strike Price USD 45, Expires 11/19/12

     75         (1,500

Plum Creek Timber Co., Inc., Strike Price USD 45, Expires 11/19/12

     235         (2,468

Potash Corp. of Saskatchewan, Inc., Strike Price USD 45, Expires 11/19/12

     240         (600

Quanta Services, Inc., Strike Price USD 25, Expires 11/19/12

     215         (24,188

Rayonier, Inc., Strike Price USD 50, Expires 11/19/12

     114         (1,995

Roper Industries, Inc., Strike Price USD 110, Expires 11/19/12

     50         (6,625

Sasol Ltd. - ADR, Strike Price USD 45, Expires 11/19/12

     82         (3,690

SunOpta, Inc., Strike Price USD 6.25, Expires 1/19/13

     245         (6,738

Trimble Navigation Ltd., Strike Price USD 50, Expires 11/19/12

     
     106         (5,035

Trina Solar Ltd. - ADR, Strike Price USD 5, Expires 11/19/12

     53         (212

Xylem, Inc., Strike Price USD 25, Expires 11/19/12

     315         (10,238

 

 

Total Exchange-Traded Call Options

        (226,855

 

 

Over-the-Counter Call Options – (0.7)%

  

Acciona SA, Strike Price EUR 43.31, Expires 12/12/12, Broker Morgan Stanley & Co., Inc.

     1,700         (9,071

AGCO Corp., Strike Price USD 47.81, Expires 12/06/12, Broker Deutsche Bank Securities Corp.

     17,800         (18,119

All America Latina Logistica SA, Strike Price BRL 8.84, Expires 11/13/12, Broker Credit Suisse First Boston

     59,900         (14,967

American Superconductor Corp., Strike Price USD 4.23, Expires 11/12/12, Broker UBS Securities LLC

     15,000         (56

American Water Works Co., Inc.:

     

Strike Price USD 36.06, Expires 11/29/12, Broker UBS Securities LLC

     6,000         (6,231

Strike Price USD 36.06, Expires 12/11/12, Broker UBS Securities LLC

     6,000         (6,867

Strike Price USD 37.63, Expires 1/02/13, Broker Morgan Stanley & Co., Inc.

     13,000         (8,477

Aqua America, Inc.:

     

Strike Price USD 24.34, Expires 11/12/12, Broker Morgan Stanley & Co., Inc.

     7,500         (7,861

Strike Price USD 25.26, Expires 11/29/12, Broker Morgan Stanley & Co., Inc.

     12,000         (5,658

Strike Price USD 25.23, Expires 12/05/12, Broker UBS Securities LLC

     20,500         (10,740

Strike Price USD 25.25, Expires 12/14/12, Broker Citigroup Global Markets, Inc.

     8,000         (4,500
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

Archer-Daniels-Midland Co., Strike Price USD 28.68, Expires 12/17/12, Broker Banc of America Securities

     19,500       $ (6,539

BrasilAgro - Companhia Brasileira de Propriedades AG:

     

Strike Price BRL 9.70, Expires 11/07/12, Broker Goldman Sachs & Co.

     39,000         (467

Strike Price BRL 8.59, Expires 11/13/12, Broker UBS Securities LLC

     39,400         (13,244

Strike Price BRL 9.21, Expires 11/29/12, Broker Citigroup Global Markets, Inc.

     39,400         (6,404

Strike Price BRL 9.87, Expires 12/13/12, Broker Deutsche Bank Securities Corp.

     39,000         (3,017

Strike Price BRL 10.00, Expires 12/19/12, Broker UBS Securities LLC

     39,400         (2,867

California Water Service Group:

     

Strike Price USD 18.74, Expires 11/07/12, Broker Morgan Stanley & Co., Inc.

     22,500         (876

Strike Price USD 18.64, Expires 11/29/12, Broker Morgan Stanley & Co., Inc.

     22,500         (4,287

Cheniere Energy, Inc., Strike Price USD 17.25, Expires 11/01/12, Broker Citigroup Global Markets, Inc.

     2,000           

China Longyuan Power Group Corp., Series H, Strike Price HKD 5.26, Expires 11/08/12, Broker Citigroup Global Markets, Inc.

     125,000         (545

China Water Affairs Group Ltd., Strike Price HKD 2.13, Expires 11/08/12, Broker Citigroup Global Markets, Inc.

     1,000,000         (2,554

Cia de Saneamento Basico do Estado de Sao Paulo, Strike Price BRL 87.79, Expires 11/13/12, Broker Deutsche Bank Securities Corp.

     35,000         (24,459

Cia de Saneamento de Minas Gerais - COPASA, Strike Price BRL 50.08, Expires 11/13/12, Broker Credit Suisse First Boston

     36,000         (8,560

Cosan Ltd., A Shares, Strike Price USD 16.22, Expires 11/15/12, Broker Morgan Stanley & Co., Inc.

     36,500         (13,660

Cresud SACIF y A - ADR, Strike Price USD 8.29, Expires 12/05/12, Broker UBS Securities LLC

     21,000         (4,194

Enel Green Power SpA, Strike Price EUR 1.39, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     62,700         (2,997

Fibria Celulose SA - ADR:

     

Strike Price USD 9.69, Expires 11/12/12, Broker Deutsche Bank Securities Corp.

     5,000         (170

Strike Price USD 9.69, Expires 12/05/12, Broker Deutsche Bank Securities Corp.

     5,000         (766
 

 

See Notes to Financial Statements.

                 
30       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (continued)

 

 

BlackRock EcoSolutions Investment Trust (BQR)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

Gamesa Corp. Tecnologica SA, Strike Price EUR 1.58, Expires 12/12/12, Broker Morgan Stanley & Co., Inc.

     18,000       $ (1,045

Guangdong Investments Ltd., Strike Price HKD 5.91, Expires 11/08/12, Broker Morgan Stanley & Co., Inc.

     600,000         (32,072

Hera SpA, Strike Price EUR 1.32, Expires 12/12/12, Broker Citigroup Global Markets, Inc.

     169,900         (11,056

Hyflux Ltd., Strike Price SGD 1.42, Expires 11/08/12, Broker Morgan Stanley & Co., Inc.

     346,000         (538

Iberdrola SA, Strike Price EUR 3.75, Expires 12/12/12, Broker Citigroup Global Markets, Inc.

     106,700         (38,193

Illovo Sugar Ltd.:

     

Strike Price ZAR 31.31, Expires 12/05/12, Broker Deutsche Bank Securities Corp.

     52,900         (5,958

Strike Price ZAR 31.06, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     52,900         (7,359

Incitec Pivot Ltd., Strike Price AUD 2.97, Expires 11/08/12, Broker Morgan Stanley & Co., Inc.

     125,000         (25,136

Inversiones Aguas Metropolitanas SA:

     

Strike Price CLP 855.98, Expires 11/07/12, Broker Banc of America Securities

     225,000         (18,312

Strike Price CLP 858.50, Expires 11/13/12, Broker Credit Suisse First Boston

     225,000         (17,401

Strike Price CLP 907.99, Expires 11/29/12, Broker UBS Securities LLC

     225,000         (4,210

Israel Chemicals Ltd., Strike Price ILS 47.57, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     40,500         (29,489

ITC Holdings Corp., Strike Price USD 73.83, Expires 11/02/12, Broker Citigroup Global Markets, Inc.

     2,500         (14,461

Johnson Matthey Plc, Strike Price GBP 22.97, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     29,100         (31,883

K+S AG, Strike Price EUR 38.59, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     8,800         (936

Kingspan Group Plc:

     

Strike Price EUR 8.58, Expires 12/05/12, Broker Banc of America Securities

     5,300         (1,015

Strike Price EUR 8.10, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     5,300         (2,426

Kurita Water Industries Ltd., Strike Price JPY 1,709.30, Expires 11/08/12, Broker Morgan Stanley & Co., Inc.

     29,300         (37,798

Monsanto Co., Strike Price USD 87.35, Expires 12/06/12, Broker Goldman Sachs & Co.

  

 

11,600

  

     (20,902

NextEra Energy, Inc., Strike Price USD 69.81, Expires 12/04/12, Broker Goldman Sachs & Co.

     11,500         (12,883

Nordex SE, Strike Price EUR 3.14, Expires 12/12/12, Broker Banc of America Securities

     3,300         (180
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

Novozymes A/S, B Shares, Strike Price DKK 164.41, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     18,900       $ (8,017

Nufarm Ltd., Strike Price AUD 6.10, Expires 11/08/12, Broker Morgan Stanley & Co., Inc.

     28,700         (669

Orkla ASA, Strike Price NOK 44.54, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     26,900         (5,860

Pennon Group Plc, Strike Price GBP 7.22, Expires 12/12/12, Broker Morgan Stanley & Co., Inc.

     96,900         (26,430

Pentair Ltd., Strike Price USD 43, Expires 12/03/12, Broker Goldman Sachs & Co.

     11,000         (10,279

Renewable Energy Corp. ASA, Strike Price NOK 1.30, Expires 12/12/12, Broker Banc of America Securities

     10,300         (41

Rentech, Inc., Strike Price USD 2.63, Expires 11/28/12, Broker Morgan Stanley & Co., Inc.

     155,500         (14,146

Sao Martinho SA:

     

Strike Price BRL 24.49, Expires 11/07/12, Broker Banc of America Securities

     41,600         (19,056

Strike Price BRL 23.69, Expires 11/13/12, Broker Citigroup Global Markets, Inc.

     24,200         (20,421

Strike Price BRL 24.31, Expires 12/29/12, Broker UBS Securities LLC

     24,200         (15,215

Schneider Electric SA, Strike Price EUR 51.21, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     6,300         (9,559

Scottish & Southern Energy Plc, Strike Price GBP 14.73, Expires 12/05/12, Broker Deutsche Bank Securities Corp.

     14,400         (3,028

Severn Trent Plc, Strike Price GBP 16.91, Expires 12/12/12, Broker UBS Securities LLC

     51,000         (8,309

Sinofert Holdings Ltd., Strike Price HKD 1.58, Expires 11/08/12, Broker Citigroup Global Markets, Inc.

     1,102,000         (9,727

SLC Agricola SA:

     

Strike Price BRL 21.16, Expires 12/13/12, Broker Goldman Sachs & Co.

     16,900         (2,590

Strike Price BRL 20.71, Expires 12/19/12, Broker Credit Suisse First Boston

     16,900         (3,946

Strike Price BRL 20.59, Expires 1/03/13, Broker Banc of America Securities

     33,700         (10,533

Suez Environnement Co., Strike Price EUR 8.59, Expires 12/12/12, Broker Banc of America Securities

     4,600         (1,152

Syngenta AG, Strike Price CHF 356.33, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     3,800         (28,835

Tetra Tech, Inc., Strike Price USD 25.81, Expires 12/17/12, Broker Goldman Sachs & Co.

     39,000         (39,194

Tianjin Capital Environmental Protection Group Co. Ltd., Series H, Strike Price HKD 1.72, Expires 11/08/12, Broker Deutsche Bank Securities Corp.

     904,000         (15,512

Umicore SA, Strike Price EUR 40.81, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     8,900         (8,726
 

 

See Notes to Financial Statements.

                 
      ANNUAL REPORT       OCTOBER 31, 2012    31


 

 

Schedule of Investments (continued)

 

 

BlackRock EcoSolutions Investment Trust (BQR)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

United Utilities Group Plc, Strike Price GBP 7.36, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     71,300       $ (17,489

Veolia Environnement SA, Strike Price EUR 8.74, Expires 12/05/12, Broker Banc of America Securities

     56,700         (6,080

Vestas Wind Systems A/S, Strike Price DKK 35.49, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     13,500         (4,281

Wacker Chemie AG, Strike Price EUR 47.66, Expires 12/12/12, Broker Banc of America Securities

     3,200         (1,154
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (concluded)

  

Watts Water Technologies, Inc., Class A, Strike Price USD 38.08, Expires 11/29/12, Broker Deutsche Bank Securities Corp.

     13,000       $ (32,388

Wilmar International Ltd., Strike Price SGD 3.36, Expires 11/08/12, Broker Deutsche Bank Securities Corp.

     39,000         (148

 

 

Total Over-the-Counter Call Options

  

     (824,191

 

 

Total Options Written

(Premiums Received – $1,345,784) – (0.9)%

  

  

     (1,051,046

 

 

Total Investments Net of Options Written – 99.4%

  

     114,158,245   

Other Assets Less Liabilities – 0.6%

  

     707,685   
     

 

 

 

Net Assets – 100.0%

  

   $ 114,865,930   
     

 

 

 

 

(a) All or a portion of security has been pledged/segregated as collateral in connection with outstanding options written.
(b) Security, or a portion of security, is on loan.
(c) Non-income producing security.
(d) Represents the current yield as of report date.
(e) Security was purchased with the cash collateral from loaned securities. The Trust may withdraw up to 25% of its investment daily, although the manager of the BlackRock Liquidity Series, LLC Money Market Series, in its sole discretion, may permit an investor to withdraw more than 25% on any one day.
 
(f) Investments in issuers considered to be an affiliate of the Trust during the year ended October 31, 2012, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliate    Shares/
Beneficial Interest
Held at
October 31,
2011
   Net
Activity
  Shares/
Beneficial Interest
Held at
October 31,
2012
   Realized
Gain
   Income

BlackRock Liquidity Funds, TempFund,
Institutional Class

   9,507,628    (2,288,780)   7,218,848    $159    $10,564

BlackRock Liquidity Series, LLC Money
Market Series

   $1,800,329    $(246,179)   $1,554,150       $48,644

 

 

For Trust compliance purposes, the Trust’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Trust management. These definitions may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease.

 

 

Fair Value Measurements – Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows:

 

   

Level 1 - unadjusted price quotations in active markets/exchanges for identical assets and liabilities that the Trust has the ability to access

 

   

Level 2 - other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

   

Level 3 - unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments and derivative financial instruments)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value

 

 

See Notes to Financial Statements.

                 
32       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (concluded)

 

 

BlackRock EcoSolutions Investment Trust (BQR)

 

determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy as of October 31, 2012:

 

 

 
    Level 1     Level 2     Level 3   Total  

 

 

Assets:

       

Investments:

       

Long-Term Investments:

       

Common Stocks:

       

Auto Components

  $ 821,425               $ 821,425   

Building Products

    247,771                 247,771   

Chemicals

    14,913,702      $ 8,641,724          23,555,426   

Commercial Services & Supplies

    2,256,780        466,967          2,723,747   

Construction & Engineering

    2,892,901                 2,892,901   

Electric Utilities

    2,225,396        2,209,464          4,434,860   

Electrical Equipment

    1,613,014        1,526,057          3,139,071   

Electronic Equipment, Instruments & Components

    1,979,674                 1,979,674   

Food Products

    13,603,640        1,573,369          15,177,009   

Independent Power Producers & Energy Traders

    417,322        417,405          834,727   

Machinery

    11,070,589        1,477,863          12,548,452   

Metals & Mining

           1,017,484          1,017,484   

Multi-Utilities

           3,723,615          3,723,615   

Oil, Gas & Consumable Fuels

    1,376,691        1,065,002          2,441,693   

Paper & Forest Products

    258,934                 258,934   

Real Estate Investment Trusts (REITs)

    3,525,918                 3,525,918   

Road & Rail

    605,066                 605,066   

Semiconductors & Semiconductor Equipment

    229,805        3,977          233,782   

Water Utilities

    13,756,639        12,518,099          26,274,738   

Short-Term Securities

    7,218,848        1,554,150          8,772,998   

 

 

Total

  $ 79,014,115      $ 36,195,176        $ 115,209,291   
 

 

 

 

 

 
    Level 1     Level 2     Level 3   Total  

 

 

Derivative Financial Instruments1

       

Liabilities:

       

Equity contracts.

  $ (195,820   $ (855,226     $ (1,051,046

 

 

 

1 

Derivative financial instruments are options, which are shown at value.

Certain of the Trust’s assets and liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2012, such assets and liabilities are categorized within the disclosure hierarchy as follows:

 

 

 
    Level 1     Level 2     Level 3   Total  

 

 

Assets:

       

Cash

  $ 1,649,342               $ 1,649,342   

Foreign currency at value

    47,494                 47,494   

Cash pledged as collateral for options written

    100,000                 100,000   

Liabilities:

       

Collateral on securities loaned at value

         $ (1,554,150       (1,554,150

 

 

Total

  $ 1,796,836      $ (1,554,150     $ 242,686   
 

 

 

 

There were no transfers between levels during the year ended October 31, 2012.

 

 

See Notes to Financial Statements.

                 
      ANNUAL REPORT       OCTOBER 31, 2012    33


 

 

Schedule of Investments October 31, 2012

 

 

BlackRock Energy and Resources Trust (BGR)

(Percentages shown are based on Net Assets)

 

Common Stocks   Shares     Value  

 

 

Energy Equipment & Services – 16.1%

  

Basic Energy Services, Inc. (a)

    1,937,200      $ 20,127,508   

Cameron International Corp. (a)(b)

    477,600        24,185,664   

National Oilwell Varco, Inc. (b)

    370,500        27,305,850   

Schlumberger Ltd. (b)

    233,100        16,207,443   

Superior Energy Services, Inc. (a)(b)

    205,300        4,173,749   

Technip SA

    161,200        18,181,799   

Transocean Ltd. (b)

    301,200        13,761,828   
   

 

 

 
      123,943,841   

 

 

Metals & Mining – 6.2%

   

Goldcorp, Inc.

    90,000        4,070,700   

Hi-Crush Partners LP (a)

    839,743        17,214,732   

Pan American Silver Corp. (b)

    163,800        3,603,600   

Prospect Global Resources, Inc. (a)(c)

    2,884,615        7,947,114   

Silver Wheaton Corp. (b)

    375,100        15,191,550   
   

 

 

 
      48,027,696   

 

 

Oil, Gas & Consumable Fuels – 77.9%

  

Access Midstream Partners LP

    268,200        9,437,957   

Alpha Natural Resources, Inc. (a)(b)(d)

    1,284,695        11,009,836   

AltaGas Ltd. (b)

    513,100        17,287,424   

Anadarko Petroleum Corp. (b)

    494,634        34,035,766   

Bonanza Creek Energy, Inc. (a)

    663,600        16,437,372   

Cabot Oil & Gas Corp. (b)

    376,400        17,683,272   

Cheniere Energy, Inc. (a)(b)(d)

    2,272,085        36,557,848   

Cimarex Energy Co. (b)

    148,200        8,474,076   

Concho Resources, Inc. (a)(b)

    66,300        5,709,756   

CONSOL Energy, Inc. (b)

    280,100        9,848,316   

Crescent Point Energy Corp. (b)

    336,400        13,978,073   

Crew Energy, Inc. (a)(b)

    1,695,792        13,056,962   

DCP Midstream Partners LP

    242,600        10,810,256   

Denbury Resources, Inc. (a)(b)(d)

    1,151,846        17,657,799   

Energy XXI (Bermuda) Ltd. (b)

    446,400        14,775,840   

EQT Corp.

    269,136        16,317,716   

Golar LNG Ltd. (b)

    340,973        13,308,176   

Keyera Corp. (b)

    460,467        22,351,379   

Kodiak Oil & Gas Corp. (a)

    827,700        7,647,948   

Kosmos Energy Ltd. (a)

    1,033,900        11,765,782   

Magnum Hunter Resources Corp. (a)(b)

    745,800        2,848,956   

MarkWest Energy Partners LP (b)

    372,589        20,205,501   

Noble Energy, Inc. (b)

    346,746        32,944,337   

NuVista Energy Ltd. (a)(b)

    582,800        3,046,024   

Occidental Petroleum Corp. (b)

    344,607        27,210,169   

ONEOK Partners LP (b)

    271,979        16,577,120   

Pembina Pipeline Corp.

    301,800        8,439,824   

Pioneer Natural Resources Co. (b)

    216,009        22,821,351   

Plains All American Pipeline LP (b)

    369,400        16,763,372   

Range Resources Corp.

    543,600        35,529,696   

Southwestern Energy Co. (a)

    297,265        10,315,096   

Targa Resources Partners LP (b)

    141,400        5,921,832   

Trilogy Energy Corp. (b)

    354,770        9,711,551   

Valero Energy Corp. (b)

    1,472,500        42,849,750   

Whiting Petroleum Corp. (a)(b)

    542,900        22,812,658   

Williams Partners LP

    300,784        15,935,536   
   

 

 

 
      602,084,327   

 

 

Total Common Stocks – 100.2%

      774,055,864   

 

 

    

   
   
Rights   Shares     Value  

 

 

Oil, Gas & Consumable Fuels – 0.0%

  

Magnum Hunter Resources Corp., Expires 10/14/2013(a)(d)

    70,300      $ 2,109   

 

 

Total Long-Term Investments

(Cost – $ 654,673,302) – 100.2%

  

  

    774,057,973   

 

 

    

   
   

Short-Term Securities

   

 

 

BlackRock Liquidity Funds, TempFund, Institutional Class, 0.17% (e)(g)

    4,572,699        4,572,699   

 

 
    Beneficial
Interest
(000)
       

 

 

BlackRock Liquidity Series, LLC Money Market Series, 0.31% (e)(f)(g)

  $ 13,663        13,663,321   

 

 

Total Short-Term Securities

(Cost – $ 18,236,020) – 2.4%

      18,236,020   

 

 

Total Investments Before Options Written

(Cost – $ 672,909,322) – 102.6%

  

  

    792,293,993   

 

 

    

   
   
Options Written   Contracts        

 

 

Exchange-Traded Call Options – (0.4)%

  

Alpha Natural Resources, Inc., Strike Price USD 11, Expires 11/19/12

    650        (6,175)   

AltaGas Ltd., Strike Price CAD 32, Expires 1/21/13

    1,700        (306,383)   

Anadarko Petroleum Corp.:

   

Strike Price USD 72.50, Expires 11/19/12

    800        (44,800)   

Strike Price USD 75, Expires 11/19/12

    500        (13,500)   

Strike Price USD 77.50, Expires 11/19/12

    350        (5,075)   

Cabot Oil & Gas Corp., Strike Price USD 46, Expires 11/29/12

    100        (23,712)   

Cameron International Corp.:

   

Strike Price USD 50, Expires 11/19/12

    500        (92,500)   

Strike Price USD 55, Expires 11/19/12

    650        (13,000)   

Strike Price USD 60, Expires 11/19/12

    425        (2,125)   

Cheniere Energy, Inc.:

   

Strike Price USD 18, Expires 11/19/12

    465        (3,488)   

Strike Price USD 17, Expires 12/24/12

    1,500        (101,250)   

Strike Price USD 19, Expires 12/24/12

    1,100        (27,500)   

Cimarex Energy Co., Strike Price USD 65, Expires 11/02/12

    115          

Concho Resources, Inc.:

   

Strike Price USD 100, Expires 11/19/12

    135        (5,400)   

Strike Price USD 105, Expires 11/19/12

    100        (2,500)   

CONSOL Energy, Inc., Strike Price USD 34.50, Expires 11/02/12

    720        (60,365)   

Crescent Point Energy Corp., Strike Price CAD 42, Expires 11/19/12

    1,200        (51,064)   
 

 

See Notes to Financial Statements.

 

                 
34       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (continued)

 

 

BlackRock Energy and Resources Trust (BGR)

(Percentages shown are based on Net Assets)

 

Options Written   Contracts     Value  

 

 

Exchange-Traded Call Options (continued)

  

Crew Energy, Inc.:

   

Strike Price CAD 8, Expires 11/19/12

    2,000      $ (45,056)   

Strike Price CAD 9, Expires 12/24/12

    650        (13,016)   

Denbury Resources, Inc., Strike Price
USD 18, Expires 11/19/12

    1,000        (10,000)   

Energy XXI (Bermuda) Ltd.:

   

Strike Price USD 38, Expires 11/19/12

    320        (4,800)   

Strike Price USD 39, Expires 11/19/12

    320        (4,800)   

Golar LNG Ltd., Strike Price USD 40, Expires 12/24/12

    570        (76,950)   

Keyera Corp., Strike Price CAD 48, Expires 11/19/12

    820        (67,735)   

Magnum Hunter Resources Corp., Strike Price USD 5, Expires 11/19/12

    1,250        (6,250)   

MarkWest Energy Partners LP, Strike Price USD 55, Expires 11/19/12

    720        (19,800)   

National Oilwell Varco, Inc.:

   

Strike Price USD 80, Expires 11/19/12

    610        (12,810)   

Strike Price USD 85, Expires 11/19/12

    100        (400)   

Noble Energy, Inc.:

   

Strike Price USD 92.50, Expires 11/19/12

    1,150        (408,250)   

Strike Price USD 97.50, Expires 11/19/12

    100        (10,250)   

NuVista Energy Ltd., Strike Price CAD 5, Expires 11/19/12

    750        (31,915)   

Occidental Petroleum Corp.:

   

Strike Price USD 90, Expires 11/19/12

    625        (2,813)   

Strike Price USD 92.50, Expires 11/19/12

    625        (2,500)   

ONEOK Partners LP, Strike Price USD 60, Expires 1/21/13

    1,000        (185,000)   

Pan American Silver Corp.:

   

Strike Price USD 18, Expires 11/12/12

    100        (39,669)   

Strike Price USD 24, Expires 11/19/12

    440        (7,700)   

Pioneer Natural Resources Co.:

   

Strike Price USD 110, Expires 11/02/12

    100        (135)   

Strike Price USD 104, Expires 11/09/12

    435        (151,853)   

Plains All American Pipeline LP:

   

Strike Price USD 41.25, Expires 11/19/12

    50        (19,750)   

Strike Price USD 43.75, Expires 11/19/12

    377        (65,033)   

Strike Price USD 45, Expires 11/19/12

    575        (41,688)   

Schlumberger Ltd.:

   

Strike Price USD 75, Expires 11/19/12

    500        (6,000)   

Strike Price USD 77.50, Expires 11/19/12

    220        (660)   

Strike Price USD 80, Expires 11/19/12

    100        (150)   

Silver Wheaton Corp., Strike Price USD 34.25, Expires 11/14/12

    900        (563,513)   

Superior Energy Services, Inc., Strike Price USD 25, Expires 11/19/12

    680        (6,800)   

Targa Resources Partners LP, Strike Price USD 41, Expires 12/24/12

    1        (175)   

Transocean Ltd.:

   

Strike Price USD 52.50, Expires 11/19/12

    1,000        (4,500)   

Strike Price USD 55, Expires 11/19/12

    100        (150)   
Options Written   Contracts     Value  

 

 

Exchange-Traded Call Options (concluded)

  

Trilogy Energy Corp.:

   

Strike Price CAD 26, Expires 11/19/12

    590      $ (95,995)   

Strike Price CAD 27, Expires 11/19/12

    590        (54,643)   

Valero Energy Corp.:

   

Strike Price USD 31, Expires 11/02/12

    350        (83)   

Strike Price USD 32.50, Expires 11/02/12

    300          

Strike Price USD 33, Expires 11/19/12

    1,800        (11,700)   

Whiting Petroleum Corp., Strike Price USD 49, Expires 11/02/12

    250          
   

 

 

Total Exchange-Traded Call Options

  

    (2,731,379)   

 

 

Over-the-Counter Call Options – (0.4)%

  

Access Midstream Partners LP:

   

Strike Price USD 30.28, Expires 11/12/12, Broker Citigroup Global Markets, Inc.

    50,000        (242,712)   

Strike Price USD 32.89, Expires 11/27/12, Broker Banc of America Securities

    38,500        (87,685)   

Basic Energy Services, Inc.:

   

Strike Price USD 12.42, Expires 11/06/12, Broker Morgan Stanley & Co., Inc.

    200,000        (235)   

Strike Price USD 12.42, Expires 11/26/12, Broker Morgan Stanley & Co., Inc.

    200,000        (12,460)   

Strike Price USD 12.42, Expires 12/04/12, Broker Morgan Stanley & Co., Inc.

    200,000        (13,822)   

Bonanza Creek Energy, Inc.:

   

Strike Price USD 21.19, Expires 11/02/12, Broker Goldman Sachs & Co.

    150,000        (537,031)   

Strike Price USD 22.63, Expires 11/08/12, Broker Morgan Stanley & Co., Inc.

    40,000        (86,615)   

Strike Price USD 20.10, Expires 11/26/12, Broker Goldman Sachs & Co.

    50,000        (235,070)   

Strike Price USD 23.70, Expires 12/07/12, Broker Morgan Stanley & Co., Inc.

    40,000        (67,181)   

Cabot Oil & Gas Corp.:

   

Strike Price USD 43.41, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

    50,000        (178,520)   

Strike Price USD 44.68, Expires 11/02/12, Broker Banc of America Securities

    60,000        (138,681)   

Cheniere Energy, Inc.:

   

Strike Price USD 15.71, Expires 11/01/12, Broker Goldman Sachs & Co.

    150,000        (58,673)   

Strike Price USD 17.25, Expires 11/01/12, Broker Citigroup Global Markets, Inc.

    225,000          

Strike Price USD 16.15, Expires 11/09/12, Broker Goldman Sachs & Co.

    150,000        (46,413)   
 

 

See Notes to Financial Statements.

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    35


 

 

Schedule of Investments (continued)

 

 

BlackRock Energy and Resources Trust (BGR)

(Percentages shown are based on Net Assets)

 

Options Written   Contracts     Value  

 

 

Over-the-Counter Call Options (continued)

  

Cimarex Energy Co.:

   

Strike Price USD 64.47, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

    25,000          

Strike Price USD 64.06, Expires 11/27/12, Broker Morgan Stanley & Co., Inc.

    17,500      $ (9,404)   

CONSOL Energy, Inc., Strike Price USD 32.25, Expires 11/02/12, Broker Citigroup Global Markets, Inc.

    30,000        (87,261)   

DCP Midstream Partners LP, Strike Price USD 43.50, Expires 11/02/12, Broker Deutsche Bank Securities Corp.

    50,000        (52,770)   

Denbury Resources, Inc.:

   

Strike Price USD 17.15, Expires 11/02/12, Broker UBS Securities LLC

    200,000        (2)   

Strike Price USD 17.50, Expires 11/09/12, Broker UBS Securities LLC

    80,000        (103)   

Energy XXI (Bermuda) Ltd., Strike Price USD 35.54, Expires 11/08/12, Broker Deutsche Bank Securities Corp.

    92,500        (11,437)   

EQT Corp.:

   

Strike Price USD 59.22, Expires 11/01/12, Broker Goldman Sachs & Co.

    50,000        (70,903)   

Strike Price USD 60.24, Expires 11/09/12, Broker Goldman Sachs & Co.

    48,500        (58,115)   

Golar LNG Ltd., Strike Price USD 42.32, Expires 11/02/12, Broker Banc of America Securities

    60,000          

Goldcorp, Inc., Strike Price USD 43.96, Expires 12/04/12, Broker Deutsche Bank Securities Corp.

    32,000        (77,809)   

Keyera Corp.:

   

Strike Price CAD 46.50, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

    35,000        (69,088)   

Strike Price CAD 47, Expires 11/09/12, Broker Morgan Stanley & Co., Inc.

    35,000        (52,113)   

Kodiak Oil & Gas Corp.:

   

Strike Price USD 10.21, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

    140,000        (43)   

Strike Price USD 9.65, Expires 12/03/12, Broker Deutsche Bank Securities Corp.

    150,000        (50,803)   

Kosmos Energy Ltd.:

   

Strike Price USD 10.57, Expires 11/02/12, Broker Citigroup Global Markets, Inc.

    60,000        (48,373)   

Strike Price USD 9.86, Expires 11/02/12, Broker Goldman Sachs & Co.

    60,000        (91,206)   

Strike Price USD 12.18, Expires 11/15/12, Broker UBS Securities LLC

    60,000        (7,380)   

Strike Price USD 12.18, Expires 11/28/12, Broker UBS Securities LLC

    60,000        (14,425)   

Strike Price USD 10.03, Expires 11/30/12, Broker Goldman Sachs & Co.

    60,000        (87,527)   
Options Written   Contracts     Value  

 

 

Over-the-Counter Call Options (concluded)

  

MarkWest Energy Partners LP, Strike Price USD 54.35, Expires 11/28/12, Broker Banc of America Securities

    41,500      $ (30,098)   

National Oilwell Varco, Inc., Strike Price USD 84.99, Expires 11/08/12, Broker UBS Securities LLC

    51,000        (9)   

NuVista Energy Ltd., Strike Price CAD 4.89, Expires 11/15/12, Broker Morgan Stanley & Co., Inc.

    75,000        (32,144)   

ONEOK Partners LP, Strike Price USD 59.75, Expires 11/15/12, Broker Citigroup Global Markets, Inc.

    10,000        (13,535)   

Pembina Pipeline Corp., Strike Price CAD 27.93, Expires 11/13/12, Broker Citigroup Global Markets, Inc.

    48,000        (9,796)   

Pioneer Natural Resources Co., Strike Price USD 107.11, Expires 11/30/12, Broker Deutsche Bank Securities Corp.

    25,000        (102,227)   

Range Resources Corp.:

   

Strike Price USD 68.25, Expires 11/02/12, Broker Deutsche Bank Securities Corp.

    95,000        (1,725)   

Strike Price USD 68.25, Expires 11/13/12, Broker Deutsche Bank Securities Corp.

    95,000        (50,146)   

Silver Wheaton Corp., Strike Price USD 33.46, Expires 11/02/12, Broker Goldman Sachs & Co.

    22,500        (158,357)   

Southwestern Energy Co.:

   

Strike Price USD 33.62, Expires 11/05/12, Broker Morgan Stanley & Co., Inc.

    40,000        (50,151)   

Strike Price USD 34.20, Expires 11/05/12, Broker Citigroup Global Markets, Inc.

    63,500        (53,589)   

Targa Resources Partners LP, Strike Price USD 43.13, Expires 1/08/13, Broker Morgan Stanley & Co., Inc.

    50,000        (23,825)   

Technip SA:

   

Strike Price EUR 89.42, Expires 11/06/12, Broker UBS Securities LLC

    28,400        (24,484)   

Strike Price EUR 90.90, Expires 11/06/12, Broker Morgan Stanley & Co., Inc.

    24,800        (9,970)   

Valero Energy Corp., Strike Price USD 29.84, Expires 11/05/12, Broker UBS Securities LLC

    238,000        (50,909)   

Whiting Petroleum Corp.:

   

Strike Price USD 45.66, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

    42,000        (18)   

Strike Price USD 45.66, Expires 11/15/12, Broker Morgan Stanley & Co., Inc.

    42,000        (9,423)   

Strike Price USD 50, Expires 12/07/12, Broker Goldman Sachs & Co.

    80,000        (16,464)   

Williams Partners LP, Strike Price USD 53.46, Expires 12/06/12, Broker Credit Suisse First Boston

    25,000        (17,094)   
   

 

 

Total Over-the-Counter Call Options

  

    (3,147,824)   

 

 

Total Options Written

(Premiums Received – $10,334,101) – (0.8)%

  

  

    (5,879,203)   

 

 
 

 

See Notes to Financial Statements.

 

                 
36       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (continued)

 

 

BlackRock Energy and Resources Trust (BGR)

(Percentages shown are based on Net Assets)

 

          Value  

 

 

Total Investments Net of Options
Written – 101.8%

   $ 786,414,790   

Liabilities in Excess of Other
Assets – (1.8)%

     (13,958,032 ) 
     

 

 

 

Net Assets – 100.0%

   $ 772,456,758   
     

 

 

 
(a) Non-income producing security.
(b) All or a portion of security has been pledged/segregated as collateral in connection with outstanding options written.
 

 

(c) Investments in issuers (whereby the Trust held 5% or more of the companies’ outstanding securities) that were considered to be an affiliate during the year ended October 31, 2012, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliate   

Shares
Held at

October 31,

2011

  

Shares

Purchased

  

Shares

Sold

  

Shares

Held at

October 31,

2012

  

Value at

October 31,

2012

  

Realized

Gain

   Income

Prospect Global Resources, Inc.

      2,884,615       2,884,615    $7,947,114      

 

(d) Security, or a portion of security, is on loan.
(e) Represents the current yield as of report date.
(f) Security was purchased with the cash collateral from loaned securities. The Trust may withdraw up to 25% of its investment daily, although the manager of the BlackRock Liquidity Series, LLC Money Market Series, in its sole discretion, may permit an investor to withdraw more than 25% on any one day.

 

(g) Investments in issuers considered to be an affiliate of the Trust during the year ended October 31, 2012, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate   

Shares/
Beneficial Interest

Held at

October 31,

2011

  

Net

Activity

 

Shares/

Beneficial Interest

Held at

October 31,

2012

  

Realized

Gain

   Income           

BlackRock Liquidity Funds, TempFund, Institutional Class

   14,873,138    (10,300,439)   4,572,699    $412    $32,874      

BlackRock Liquidity Series, LLC Money Market Series

   $60,660,178    $(46,996,857)   $13,663,321       $67,477        

 

For Trust compliance purposes, the Trust’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Trust management. These definitions may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease.

 

Fair Value Measurements – Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows:

 

  Level 1 - unadjusted price quotations in active markets/exchanges for identical assets and liabilities that the Trust has the ability to access

 

  Level 2 - other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)
  Level 3 - unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments and derivative financial instruments)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

 

 

See Notes to Financial Statements.

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    37


 

 

Schedule of Investments (concluded)

 

 

BlackRock Energy and Resources Trust (BGR)

 

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy as of October 31, 2012:

 

     Level 1     Level 2     Level 3   Total  

Assets:

       

Investments:

       

Long-Term Investments:

       

Common Stocks:

       

Energy Equipment & Services 

  $ 105,762,042      $ 18,181,799        $ 123,943,841   

Metals & Mining

    48,027,696                 48,027,696   

Oil, Gas & Consumable Fuels

    602,084,327                 602,084,327   

Rights

           2,109          2,109   

Short-Term Securities

    4,572,699        13,663,321          18,236,020   

 

 

Total

  $ 760,446,764      $ 31,847,229        $ 792,293,993   
 

 

 

 

 

     Level 1     Level 2     Level 3   Total  

Derivative Financial Instruments1

       

Liabilities:

       

Equity contracts

  $ (1,892,047   $ (3,987,156     $ (5,879,203

 

 

 

1 

Derivative financial instruments are options, which are shown at value.

Certain of the Trust’s assets and liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2012, such assets and liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1     Level 2     Level 3   Total  

Assets:

       

Foreign currency at value

  $ 2,400               $ 2,400   

Liabilities:

       

Collateral on securities loaned at value

         $ (13,663,321       (13,663,321

 

 

Total

  $ 2,400      $ (13,663,321     $ (13,660,921
 

 

 

 

There were no transfers between levels during the year ended October 31, 2012.

 

 

See Notes to Financial Statements.

 

                 
38       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments October 31, 2012

 

 

BlackRock Enhanced Capital and Income Fund, Inc. (CII)

(Percentages shown are based on Net Assets)

 

Common Stocks    Shares      Value  

 

 

Aerospace & Defense – 4.6%

  

Honeywell International, Inc. (a)

     176,500       $ 10,808,860   

Northrop Grumman Corp. (a)

     134,900         9,266,281   

Raytheon Co. (a)

     151,600         8,574,496   
     

 

 

 
        28,649,637   

 

 

Automobiles – 0.7%

  

Ford Motor Co. (a)

     396,200         4,421,592   

 

 

Beverages – 1.2%

  

PepsiCo, Inc.

     109,300         7,567,932   

 

 

Capital Markets – 1.9%

  

Invesco Ltd.

     480,300         11,680,896   

 

 

Chemicals – 1.8%

  

E.I. du Pont de Nemours & Co.

     245,900         10,947,468   

 

 

Commercial Banks – 4.0%

  

U.S. Bancorp

     190,700         6,333,147   

Wells Fargo & Co. (a)

     554,800         18,691,212   
     

 

 

 
        25,024,359   

 

 

Communications Equipment – 1.8%

  

Cisco Systems, Inc. (a)

     665,400         11,404,956   

 

 

Diversified Financial Services – 4.6%

  

Citigroup, Inc. (a)

     204,730         7,654,855   

JPMorgan Chase & Co. (a)

     504,400         21,023,392   
     

 

 

 
        28,678,247   

 

 

Diversified Telecommunication Services – 7.6%

  

AT&T Inc.

     365,100         12,628,809   

CenturyLink, Inc.

     445,800         17,109,804   

Verizon Communications, Inc. (a)

     399,800         17,847,072   
     

 

 

 
        47,585,685   

 

 

Electric Utilities – 3.0%

  

NextEra Energy, Inc.

     120,800         8,463,248   

The Southern Co. (a)

     221,900         10,393,796   
     

 

 

 
        18,857,044   

 

 

Electrical Equipment – 1.8%

  

Emerson Electric Co.

     235,100         11,385,893   

 

 

Electronic Equipment, Instruments & Components – 0.4%

  

Corning, Inc. (a)

     232,800         2,735,400   

 

 

Energy Equipment & Services – 3.7%

  

Ensco Plc, Class A (a)

     154,500         8,933,190   

Halliburton Co.

     133,500         4,310,715   

Noble Corp. (a)

     256,300         9,672,762   
     

 

 

 
        22,916,667   

 

 

Food Products – 3.6%

  

Archer-Daniels-Midland Co. (a)

     240,700         6,460,388   

Unilever NV (a)

     426,000         15,629,940   
     

 

 

 
        22,090,328   

 

 

Health Care Equipment & Supplies – 1.8%

  

Medtronic, Inc. (a)

     266,400         11,076,912   

 

 

Household Products – 3.4%

  

Kimberly-Clark Corp.

     176,600         14,737,270   

The Procter & Gamble Co. (a)

     93,900         6,501,636   
     

 

 

 
        21,238,906   

 

 

Industrial Conglomerates – 2.9%

  

General Electric Co. (a)

     843,500         17,764,110   

 

 
Common Stocks    Shares      Value  

 

 

Insurance – 10.7%

  

ACE Ltd. (a)

     179,400       $ 14,109,808   

Aflac, Inc. (a)

     136,500         6,794,970   

Hartford Financial Services Group, Inc.

     683,000         14,827,930   

MetLife, Inc. (a)

     307,800         10,923,822   

Prudential Financial, Inc. (a)

     124,200         7,085,610   

The Travelers Cos., Inc. (a)

     183,900         13,045,866   
     

 

 

 
        66,788,006   

 

 

IT Services – 1.5%

  

The Western Union Co. (a)

     715,730         9,089,771   

 

 

Media – 5.3%

  

Comcast Corp., Special Class A (a)

     205,500         7,488,420   

Time Warner, Inc. (a)

     285,700         12,413,665   

Viacom, Inc., Class B

     148,700         7,623,849   

The Walt Disney Co. (a)

     113,600         5,574,352   
     

 

 

 
        33,100,286   

 

 

Metals & Mining – 2.5%

  

Freeport-McMoRan Copper & Gold, Inc. (a)

     75,200         2,923,776   

Nucor Corp. (a)

     306,200         12,287,806   
     

 

 

 
        15,211,582   

 

 

Multiline Retail – 0.5%

  

J.C. Penney Co., Inc. (a)

     130,300         3,128,503   

 

 

Multi-Utilities – 2.1%

  

Dominion Resources, Inc.

     189,400         9,996,532   

Public Service Enterprise Group, Inc.

     88,000         2,819,520   
     

 

 

 
        12,816,052   

 

 

Oil, Gas & Consumable Fuels – 7.3%

  

Chevron Corp. (a)

     165,400         18,228,734   

Exxon Mobil Corp.

     178,500         16,273,845   

Marathon Oil Corp. (a)

     193,200         5,807,592   

Marathon Petroleum Corp. (a)

     93,500         5,135,955   
     

 

 

 
        45,446,126   

 

 

Pharmaceuticals – 10.2%

  

Eli Lilly & Co. (a)

     138,300         6,725,529   

Johnson & Johnson (a)

     187,300         13,264,586   

Merck & Co., Inc. (a)

     468,800         21,391,344   

Pfizer, Inc. (a)

     881,600         21,925,392   
     

 

 

 
        63,306,851   

 

 

Semiconductors & Semiconductor Equipment – 5.6%

  

Analog Devices, Inc. (a)

     143,500         5,612,285   

Intel Corp. (a)

     592,800         12,819,300   

LSI Corp. (b)

     930,500         6,373,925   

Maxim Integrated Products, Inc. (a)

     364,000         10,019,100   
     

 

 

 
        34,824,610   

 

 

Software – 1.8%

  

Microsoft Corp. (a)

     393,500         11,228,524   

 

 

Specialty Retail – 1.0%

  

Limited Brands, Inc.

     134,600         6,445,994   

 

 

Total Long-Term Investments

(Cost – $583,950,553) – 97.3%

        605,412,337   

 

 
     

    

     
 

 

See Notes to Financial Statements.     
                 
      ANNUAL REPORT       OCTOBER 31, 2012    39


 

 

Schedule of Investments (continued)

 

 

 

BlackRock Enhanced Capital and Income Fund, Inc. (CII)

(Percentages shown are based on Net Assets)

 

Short-Term Securities    Shares      Value  

 

 

BlackRock Liquidity Funds, TempFund, Institutional Class, 0.17% (c)(d)

     23,189,440       $ 23,189,440   

 

 

Total Short-Term Securities

(Cost – $23,189,440) – 3.7%

  

  

     23,189,440   

 

 
     
          
Options Purchased    Contracts         

 

 

Exchange-Traded Call Options – 0.0%

  

Marvell Technology Group Ltd., Strike Price USD 10, Expires 11/19/12

     810         2,025   

Microsoft Corp., Strike Price USD 31, Expires 11/19/12

     970         2,425   

 

 

Total Options Purchased

(Cost – $7,982) – 0.0%

  

  

     4,450   

 

 

Total Investments Before Options Written

(Cost – $607,147,975) – 101.0%

  

  

     628,606,227   

 

 
     

    

     
Options Written              

 

 

Exchange-Traded Call Options – (0.5)%

  

ACE Ltd., Strike Price USD 75, Expires 11/19/12

     500         (189,998

Aflac, Inc.:

     

Strike Price USD 47, Expires 11/19/12

     355         (103,305

Strike Price USD 49, Expires 11/19/12

     395         (50,955

Analog Devices, Inc.:

     

Strike Price USD 40, Expires 11/05/12

     262         (1,523

Strike Price USD 41, Expires 11/19/12

     530         (3,975

Archer-Daniels-Midland Co.:

     

Strike Price USD 28, Expires 11/19/12

     242         (2,904

Strike Price USD 29, Expires 11/19/12

     438         (1,533

Chevron Corp., Strike Price USD 120, Expires 11/19/12

     910         (1,820

Cisco Systems, Inc., Strike Price
USD 20, Expires 11/19/12

     3,660         (12,810

Citigroup, Inc.:

     

Strike Price USD 35, Expires 11/19/12

     345         (92,288

Strike Price USD 36, Expires 11/19/12

     800         (150,800

Comcast Corp., Special Class A, Strike Price USD 36, Expires 12/14/12

     560         (62,098

Corning, Inc., Strike Price USD 14, Expires 11/19/12

     630         (630

Eli Lilly & Co., Strike Price USD 48, Expires 11/19/12

     770         (97,020

Ensco Plc, Class A:

     

Strike Price USD 60, Expires 1/21/13

     270         (18,900

Strike Price USD 60, Expires 1/21/13

     270         (54,675

Ford Motor Co., Strike Price USD 10.85, Expires 11/09/12

     2,180         (87,196

Freeport-McMoRan Copper & Gold, Inc., Strike Price USD 41, Expires 11/19/12

     415         (13,903

General Electric Co.:

     

Strike Price USD 21, Expires 11/19/12

     1,000         (40,000

Strike Price USD 22, Expires 11/19/12

     500         (3,750

Strike Price USD 23, Expires 11/19/12

     2,100         (3,150

Honeywell International, Inc., Strike Price USD 61, Expires 11/01/12

     1,325         (51,842
Options Written    Contracts      Value  

 

 

Exchange-Traded Call Options (continued)

  

Intel Corp.:

     

Strike Price USD 23.10, Expires 11/17/12

     1,200       $ (2,715

Strike Price USD 28, Expires 11/19/12

     438         (438

J.C. Penney Co., Inc., Strike Price USD 27, Expires 11/19/12

     715         (42,543

Johnson & Johnson:

     

Strike Price USD 70, Expires 11/19/12

     950         (120,650

Strike Price USD 72.15, Expires 12/04/12

     455         (18,708

JPMorgan Chase & Co.:

     

Strike Price USD 38, Expires 11/19/12

     775         (292,563

Strike Price USD 42, Expires 11/27/12

     500         (42,900

Marathon Oil Corp., Strike Price USD 31, Expires 11/19/12

     520         (19,240

Marathon Petroleum Corp., Strike Price
USD 55, Expires 11/19/12

     516         (81,270

Marvell Technology Group Ltd., Strike Price USD 11, Expires 11/19/12

     810         (1,620

Maxim Integrated Products, Inc.:

     

Strike Price USD 28, Expires 11/19/12

     1,000         (35,000

Strike Price USD 29, Expires 11/19/12

     1,000         (10,000

Medtronic, Inc.:

     

Strike Price USD 42, Expires 11/19/12

     760         (38,380

Strike Price USD 44.25, Expires 11/27/12

     705         (10,819

Merck & Co., Inc.:

     

Strike Price USD 45.50, Expires 11/17/12

     760         (50,355

Strike Price USD 47, Expires 11/19/12

     750         (13,500

MetLife, Inc.:

     

Strike Price USD 37, Expires 11/19/12

     500         (13,000

Strike Price USD 37, Expires 12/24/12

     250         (16,750

Strike Price USD 38, Expires 12/24/12

     28         (1,176

Microsoft Corp.:

     

Strike Price USD 31.50, Expires 11/17/12

     970         (1,703

Strike Price USD 29, Expires 11/19/12

     590         (15,635

Strike Price USD 29, Expires 12/24/12

     590         (34,810

Strike Price USD 30, Expires 12/24/12

     200         (5,900

Noble Corp., Strike Price USD 38, Expires 12/03/12

     720         (85,448

Northrop Grumman Corp., Strike Price USD 70, Expires 11/19/12

     500         (27,500

Nucor Corp., Strike Price USD 40, Expires 11/19/12

     1,070         (94,160

Pfizer, Inc.:

     

Strike Price USD 24.55, Expires 11/02/12

     970         (33,436

Strike Price USD 25, Expires 11/19/12

     4,761         (159,494

The Procter & Gamble Co., Strike Price USD 70, Expires 11/19/12

     516         (22,962

Prudential Financial, Inc., Strike Price USD 57.50, Expires 11/19/12

     680         (95,880

Raytheon Co., Strike Price USD 57.50, Expires 11/19/12

     1,140         (40,470

The Southern Co., Strike Price USD 47, Expires 12/24/12

     1,664         (85,696

Time Warner, Inc., Strike Price USD 46, Expires 11/19/12

     250         (2,250

The Travelers Cos., Inc.:

     

Strike Price USD 67.50, Expires 11/19/12

     3         (1,110

Strike Price USD 70, Expires 11/19/12

     367         (61,473
 

 

See Notes to Financial Statements.     
                 
40       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (continued)

 

 

BlackRock Enhanced Capital and Income Fund, Inc. (CII)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Exchange-Traded Call Options (concluded)

  

  

Unilever NV, Strike Price USD 35, Expires 11/19/12

     550       $ (108,625

Verizon Communications, Inc.:

     

Strike Price USD 44.55, Expires 11/02/12

     1,650         (40,506

Strike Price USD 47.25, Expires 12/06/12

     550         (4,553

The Walt Disney Co., Strike Price
USD 51.50, Expires 12/17/12

     625         (22,247

Wells Fargo & Co.:

     

Strike Price USD 34.75, Expires 11/05/12

     935         (2,953

Strike Price USD 35.50, Expires 11/17/12

     435         (2,703

Strike Price USD 36, Expires 11/19/12

     1,500         (5,250

The Western Union Co.:

     

Strike Price USD 18, Expires 11/19/12

     3,500         (17,500

Strike Price USD 19, Expires 11/19/12

     435         (2,175

 

 

Total Exchange-Traded Call Options

  

     (2,831,141

 

 

Over-the-Counter Call Options – (0.4)%

  

  

ACE Ltd., Strike Price USD 75.15, Expires 11/02/12, Broker Banc of America Securities

     48,500         (169,171

Archer-Daniels-Midland Co., Strike Price USD 27.55, Expires 11/12/12, Broker Morgan Stanley & Co., Inc.

     66,000         (19,211

AT&T Inc.:

     

Strike Price USD 36.97, Expires 11/27/12, Broker Morgan Stanley & Co., Inc.

     138,000         (3,828

Strike Price USD 38.86, Expires 12/07/12, Broker Morgan Stanley & Co., Inc.

     136,000         (205

CenturyLink, Inc.:

     

Strike Price USD 43.13, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

     97,000         (1

Strike Price USD 40.58, Expires 12/03/12, Broker Citigroup Global Markets, Inc.

     69,200         (6,074

Strike Price USD 39.39, Expires 12/10/12, Broker Citigroup Global Markets, Inc.

     99,000         (46,212

Strike Price USD 40.58, Expires 12/17/12, Broker Citigroup Global Markets, Inc.

     69,200         (10,402

Comcast Corp., Special Class A, Strike Price USD 35.29, Expires 11/27/12, Broker Morgan Stanley & Co., Inc.

     57,000         (78,497

Corning, Inc., Strike Price USD 12.14, Expires 11/05/12, Broker Credit Suisse First Boston

     65,000         (1,391

Dominion Resources, Inc.:

     

Strike Price USD 54.20, Expires 11/07/12, Broker Morgan Stanley & Co., Inc.

     52,000         (937

Strike Price USD 51.92, Expires 1/03/13, Broker Citigroup Global Markets, Inc.

     52,700         (70,777

E.I. du Pont de Nemours & Co.:

     

Strike Price USD 52, Expires 11/01/12, Broker Banc of America Securities

     70,000         (1

Strike Price USD 51, Expires 12/17/12, Broker Morgan Stanley & Co., Inc.

     67,000         (3,749

Emerson Electric Co., Strike Price
USD 50.64, Expires 11/01/12, Broker Banc of America Securities

     82,500         (1
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

Exxon Mobil Corp.:

     

Strike Price USD 88.35, Expires 11/09/12, Broker Morgan Stanley & Co., Inc.

     66,000       $ (192,363

Strike Price USD 93.15, Expires 11/26/12, Broker Morgan Stanley & Co., Inc.

     32,000         (19,907

General Electric Co.:

     

Strike Price USD 22.43, Expires 11/26/12, Broker Morgan Stanley & Co., Inc.

     53,000         (2,762

Strike Price USD 22.43, Expires 12/10/12, Broker Morgan Stanley & Co., Inc.

     53,000         (4,616

Halliburton Co.:

     

Strike Price USD 35.93, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

     28,000           

Strike Price USD 35.30, Expires 12/10/12, Broker Morgan Stanley & Co., Inc.

     45,500         (13,206

Hartford Financial Services Group, Inc.:

     

Strike Price USD 19.79, Expires 11/14/12, Broker UBS Securities LLC

     188,000         (371,344

Strike Price USD 19.79, Expires 12/07/12, Broker UBS Securities LLC

     188,000         (416,604

Intel Corp., Strike Price USD 21.59, Expires 11/27/12, Broker Morgan Stanley & Co., Inc.

     43,300         (20,495

Invesco Ltd., Strike Price USD 25.46, Expires 11/27/12, Broker Credit Suisse First Boston

     168,000         (22,687

JPMorgan Chase & Co., Strike Price
USD 41, Expires 12/10/12, Broker Morgan Stanley & Co., Inc.

     49,000         (80,026

Kimberly-Clark Corp.:

     

Strike Price USD 86.58, Expires 11/14/12, Broker Citigroup Global Markets, Inc.

     69,500         (4,925

Strike Price USD 82.96, Expires 11/27/12, Broker UBS Securities LLC

     14,000         (18,285

Strike Price USD 82.96, Expires 12/14/12, Broker UBS Securities LLC

     14,000         (21,802

Limited Brands, Inc.:

     

Strike Price USD 49.75, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

     25,000         (523

Strike Price USD 51.15, Expires 11/27/12, Broker Morgan Stanley & Co., Inc.

     51,000         (23,372

Strike Price USD 50.94, Expires 12/12/12, Broker UBS Securities LLC

     25,000         (19,992

LSI Corp.:

     

Strike Price USD 8.08, Expires 11/29/12, Broker Morgan Stanley & Co., Inc.

     140,000         (6,054

Strike Price USD 6.57, Expires 12/07/12, Broker Goldman Sachs & Co.

     223,800         (96,669

Strike Price USD 7.15, Expires 12/18/12, Broker Goldman Sachs & Co.

     148,000         (33,377
 

 

See Notes to Financial Statements.     
                 
      ANNUAL REPORT       OCTOBER 31, 2012    41


 

 

Schedule of Investments (continued)

 

 

BlackRock Enhanced Capital and Income Fund, Inc. (CII)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

  

Marathon Oil Corp., Strike Price
USD 28.08, Expires 11/07/12, Broker Morgan Stanley & Co., Inc.

     54,500       $ (108,990

Merck & Co., Inc.:

     

Strike Price USD 44, Expires 11/09/12, Broker Morgan Stanley & Co., Inc.

     54,000         (89,853

Strike Price USD 44.33, Expires 12/03/12, Broker UBS Securities LLC

     53,500         (88,344

MetLife, Inc., Strike Price USD 36.11, Expires 11/14/12, Broker Banc of America Securities

     62,000         (37,262

NextEra Energy, Inc., Strike Price
USD 69.81, Expires 12/04/12, Broker Goldman Sachs & Co.

     42,500         (47,612

Noble Corp., Strike Price USD 40.07, Expires 12/03/12, Broker Morgan Stanley & Co., Inc.

     69,000         (29,576

Northrop Grumman Corp., Strike Price USD 67.92, Expires 11/27/12, Broker Citigroup Global Markets, Inc.

     51,000         (83,914

PepsiCo, Inc.:

     

Strike Price USD 73.37, Expires 11/01/12, Broker Deutsche Bank Securities Corp.

     37,000           

Strike Price USD 73.96, Expires 11/06/12, Broker Credit Suisse First Boston

     24,000         (1

Public Service Enterprise Group, Inc., Strike Price USD 31.80, Expires 12/11/12, Broker Morgan Stanley & Co., Inc.

     48,000         (30,276
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (concluded)

  

  

Time Warner, Inc.:

     

Strike Price USD 41.86, Expires 11/07/12, Broker Citigroup Global Markets, Inc.

     46,000       $ (76,736

Strike Price USD 46.19, Expires 12/03/12, Broker Banc of America Securities

     87,000         (13,511

The Travelers Cos., Inc., Strike Price USD 69.20, Expires 11/12/12, Broker Morgan Stanley & Co., Inc.

     64,000         (125,710

U.S. Bancorp, Strike Price USD 33.75, Expires 11/02/12, Broker Citigroup Global Markets, Inc.

     105,000         (2,745

Unilever NV, Strike Price USD 36.30, Expires 11/12/12, Broker Citigroup Global Markets, Inc.

     94,000         (65,772

Viacom, Inc., Class B, Strike Price
USD 51.78, Expires 11/01/12, Broker Deutsche Bank Securities Corp.

     82,000         (5,239

Wells Fargo & Co., Strike Price
USD 34.57, Expires 12/04/12, Broker UBS Securities LLC

     18,500         (8,927

 

 

Total Over-the-Counter Call Options

  

     (2,593,934

 

 

Total Options Written

(Premiums Received – $7,667,197) – (0.9)%

  

  

     (5,425,075

 

 

Total Investments Net of Options Written – 100.1%

  

     623,181,152   

Liabilities in Excess of Other Assets – (0.1)%

  

     (524,007
     

 

 

 

Net Assets – 100.0%

  

   $ 622,657,145   
     

 

 

 

 

(a) All or a portion of security has been pledged/segregated as collateral in connection with outstanding options written.
(b) Non-income producing security.
(c) Represents the current yield as of report date.
 
(d) Investments in issuers considered to be an affiliate of the Trust during the year ended October 31, 2012, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate   Shares
Held at
October 31,
2011
    Net
Activity
    Shares
Held at
October 31,
2012
    Realized
Gain
    Income  

BlackRock Liquidity Funds, TempFund, Institutional Class

    2,617,964        20,571,476        23,189,440        $1,143        $23,309   

 

 

For Trust compliance purposes, the Trust’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Trust management. These definitions may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease.

 

 

 

Fair Value Measurements – Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows:

 

 

   

Level 1 - unadjusted price quotations in active markets/exchanges for identical assets and liabilities that the Trust has the ability to access

 

   

Level 2 - other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

   

Level 3 - unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments and derivative financial instruments)

 

 

See Notes to Financial Statements.     
                 
42       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (concluded)

 

 

BlackRock Enhanced Capital and Income Fund, Inc. (CII)

 

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy as of October 31, 2012:

 

      Level 1      Level 2    Level 3    Total  

Assets:

           

Investments:

           

Long-Term Investments:

           

Common Stocks1

   $ 605,412,337             $ 605,412,337   

Short-Term Securities

     23,189,440               23,189,440   

 

 

Total

   $ 628,601,777             $ 628,601,777   
  

 

 

 

 

1 

See above Schedule of Investments for values in each industry.

 

     Level 1     Level 2     Level 3   Total  

Derivative Financial Instruments2

       

Assets:

       

Equity contracts

  $ 4,450               $ 4,450   

Liabilities:

       

Equity contracts

    (2,309,435   $ (3,115,640       (5,425,075

 

 

Total

  $ (2,304,985   $ (3,115,640     $ (5,420,625
 

 

 

 

 

2

Derivative financial instruments are options, which are shown at value.

Certain of the Trust’s assets and liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2012, such assets and liabilities are categorized within the disclosure hierarchy as follows:

 

      Level 1      Level 2     Level 3    Total  

Assets:

          

Foreign currency at value

   $ 5,940                 $ 5,940   

Liabilities:

          

Cash received as collateral for options written

           $ (510,420        (510,420

 

 

Total

   $ 5,940       $ (510,420      $ (504,480
  

 

 

 

There were no transfers between levels during the year ended October 31, 2012.

 

 

See Notes to Financial Statements.     
                 
      ANNUAL REPORT       OCTOBER 31, 2012    43


 

 

Schedule of Investments October 31, 2012

 

 

BlackRock Enhanced Equity Dividend Trust (BDJ)

(Percentages shown are based on Net Assets)

 

Common Stocks    Shares      Value  

 

 

Aerospace & Defense – 4.8%

  

  

General Dynamics Corp. (a)

     150,500       $ 10,246,040   

Honeywell International, Inc. (a)

     179,500         10,992,580   

Northrop Grumman Corp. (a)

     172,100         11,821,549   

Raytheon Co. (a)

     312,500         17,675,000   

Rockwell Collins, Inc. (a)

     53,400         2,861,172   

United Technologies Corp. (a)

     237,200         18,539,552   
     

 

 

 
        72,135,893   

 

 

Air Freight & Logistics – 0.7%

  

  

United Parcel Service, Inc., Class B (a)

     135,100         9,896,075   

 

 

Auto Components – 0.2%

  

  

Johnson Controls, Inc. (a)

     132,700         3,417,025   

 

 

Beverages – 2.2%

  

  

The Coca-Cola Co. (a)

     447,200         16,626,896   

Diageo Plc – ADR (a)

     142,000         16,222,080   
     

 

 

 
        32,848,976   

 

 

Building Products – 0.4%

  

  

AO Smith Corp.

     52,550         3,193,464   

Masco Corp. (a)

     225,400         3,401,286   
     

 

 

 
        6,594,750   

 

 

Chemicals – 2.1%

  

  

The Dow Chemical Co.

     23,000         673,900   

E.I. du Pont de Nemours & Co.

     397,400         17,692,248   

Olin Corp.

     230,200         4,774,348   

Praxair, Inc. (a)

     77,100         8,188,791   
     

 

 

 
        31,329,287   

 

 

Commercial Banks – 7.1%

  

  

Bank of Nova Scotia (a)

     238,800         12,971,114   

Cullen/Frost Bankers, Inc.

     92,000         5,087,600   

M&T Bank Corp. (a)

     30,500         3,175,050   

National Bank of Canada (a)

     196,000         15,146,213   

The Toronto-Dominion Bank

     163,700         13,315,358   

U.S. Bancorp

     600,600         19,945,926   

Wells Fargo & Co. (a)

     1,083,600         36,506,484   
     

 

 

 
        106,147,745   

 

 

Consumer Finance – 1.0%

  

  

American Express Co.

     262,200         14,675,334   

 

 

Containers & Packaging – 0.2%

  

  

Sonoco Products Co. (a)

     99,500         3,097,435   

 

 

Distributors – 0.2%

  

  

Fastenal Co. (a)

     34,500         1,542,150   

Genuine Parts Co. (a)

     32,300         2,021,334   
     

 

 

 
        3,563,484   

 

 

Diversified Financial Services – 2.4%

  

  

JPMorgan Chase & Co. (a)

     854,900         35,632,232   

 

 

Diversified Telecommunication Services – 4.8%

  

  

AT&T Inc. (a)

     666,000         23,036,940   

BCE, Inc.

     101,100         4,414,026   

CenturyLink, Inc.

     543,300         20,851,854   

Verizon Communications, Inc. (a)

     503,700         22,485,168   
     

 

 

 
        70,787,988   

 

 
Common Stocks    Shares      Value  

 

 

Electric Utilities – 5.1%

  

  

American Electric Power Co., Inc. (a)

     146,500       $ 6,510,460   

Duke Energy Corp. (a)

     77,466         5,088,742   

Edison International (a)

     126,000         5,914,440   

FirstEnergy Corp. (a)

     156,390         7,150,151   

ITC Holdings Corp. (a)

     40,800         3,248,496   

NextEra Energy, Inc.

     180,200         12,624,812   

Northeast Utilities

     467,544         18,374,479   

Otter Tail Corp.

     55,761         1,345,513   

PPL Corp.

     100,000         2,958,000   

The Southern Co. (a)

     277,800         13,012,152   
     

 

 

 
        76,227,245   

 

 

Electrical Equipment – 1.0%

  

  

Brady Corp., Class A

     109,300         3,362,068   

Rockwell Automation, Inc. (a)

     58,900         4,185,434   

Roper Industries, Inc. (a)

     67,400         7,358,058   
     

 

 

 
        14,905,560   

 

 

Energy Equipment & Services – 0.5%

  

  

Helmerich & Payne, Inc. (a)

     63,200         3,020,960   

Schlumberger Ltd. (a)

     56,400         3,921,492   
     

 

 

 
        6,942,452   

 

 

Food & Staples Retailing – 0.6%

  

  

Wal-Mart Stores, Inc. (a)

     108,400         8,132,168   

 

 

Food Products – 4.0%

  

  

Beam, Inc. (a)

     28,400         1,577,904   

General Mills, Inc.

     256,800         10,292,544   

HJ Heinz Co.

     161,700         9,299,361   

Kraft Foods Group, Inc. (b)

     134,995         6,139,573   

Lancaster Colony Corp.

     45,800         3,333,324   

Mead Johnson Nutrition Co.

     52,365         3,228,826   

Mondelez International, Inc., Class A (a)

     404,985         10,748,302   

Unilever NV (a)

     393,100         14,422,839   
     

 

 

 
        59,042,673   

 

 

Gas Utilities – 0.6%

  

  

New Jersey Resources Corp.

     121,200         5,388,552   

Northwest Natural Gas Co.

     79,700         3,708,441   
     

 

 

 
        9,096,993   

 

 

Health Care Providers & Services – 0.3%

  

  

Quest Diagnostics, Inc. (a)

     89,200         5,148,624   

 

 

Hotels, Restaurants & Leisure – 1.3%

  

  

McDonald’s Corp. (a)

     225,800         19,599,440   

 

 

Household Durables – 0.5%

  

  

Stanley Black & Decker, Inc. (a)

     105,500         7,311,150   

 

 

Household Products – 1.8%

  

  

Kimberly-Clark Corp.

     124,150         10,360,318   

The Procter & Gamble Co. (a)

     229,100         15,862,884   
     

 

 

 
        26,223,202   

 

 

Industrial Conglomerates – 2.4%

  

  

3M Co. (a)

     119,500         10,468,200   

General Electric Co. (a)

     1,062,800         22,382,568   

Raven Industries, Inc.

     79,656         2,173,812   
     

 

 

 
        35,024,580   

 

 
 

 

See Notes to Financial Statements.     
                 
44       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (continued)

 

 

BlackRock Enhanced Equity Dividend Trust (BDJ)

(Percentages shown are based on Net Assets)

 

Common Stocks    Shares      Value  

 

 

Insurance – 4.1%

     

ACE Ltd. (a)

     120,500       $ 9,477,325   

The Chubb Corp.

     188,500         14,510,730   

Erie Indemnity Co., Class A

     24,200         1,505,724   

Old Republic International Corp.

     226,400         2,236,832   

Prudential Financial, Inc. (a)

     244,100         13,925,905   

The Travelers Cos., Inc. (a)

     272,600         19,338,244   
     

 

 

 
        60,994,760   

 

 

IT Services – 1.9%

  

Automatic Data Processing, Inc.

     60,660         3,505,541   

International Business Machines Corp. (a)

     127,400         24,783,122   
     

 

 

 
        28,288,663   

 

 

Leisure Equipment & Products – 1.2%

  

Mattel, Inc. (a)

     208,100         7,653,918   

Polaris Industries, Inc. (a)

     121,000         10,224,500   
     

 

 

 
        17,878,418   

 

 

Machinery – 2.9%

  

Caterpillar, Inc. (a)

     110,500         9,371,505   

Deere & Co. (a)

     272,600         23,290,944   

Dover Corp.

     54,400         3,167,168   

Graco, Inc. (a)

     39,600         1,903,176   

Pentair Ltd. (a)

     145,300         6,137,472   
     

 

 

 
        43,870,265   

 

 

Media – 2.5%

  

Comcast Corp., Special Class A (a)

     520,300         18,959,732   

Time Warner Cable, Inc. (a)

     132,666         13,148,527   

The Walt Disney Co. (a)

     118,100         5,795,167   
     

 

 

 
        37,903,426   

 

 

Metals & Mining – 2.2%

  

BHP Billiton Ltd. - ADR (a)

     305,500         21,611,070   

Rio Tinto Plc - ADR

     145,700         7,282,086   

Southern Copper Corp. (a)

     119,577         4,555,884   
     

 

 

 
        33,449,040   

 

 

Multiline Retail – 0.2%

  

Family Dollar Stores, Inc.

     51,200         3,377,152   

 

 

Multi-Utilities – 2.8%

  

Consolidated Edison, Inc.

     57,900         3,496,002   

Dominion Resources, Inc. (a)

     240,100         12,672,478   

Integrys Energy Group, Inc.

     76,800         4,150,272   

Public Service Enterprise Group, Inc.

     281,400         9,016,056   

Sempra Energy (a)

     86,400         6,026,400   

Wisconsin Energy Corp.

     145,700         5,605,079   
     

 

 

 
        40,966,287   

 

 

Oil, Gas & Consumable Fuels – 10.4%

  

Chevron Corp.

     373,450         41,157,926   

ConocoPhillips (a)

     114,460         6,621,511   

Enbridge, Inc. (a)

     451,000         17,945,171   

EQT Corp.

     132,500         8,033,475   

Exxon Mobil Corp.

     325,800         29,703,186   

Kinder Morgan, Inc. (a)

     67,800         2,353,338   

Marathon Oil Corp. (a)

     235,100         7,067,106   

Marathon Petroleum Corp. (a)

     120,300         6,608,079   

Occidental Petroleum Corp. (a)

     47,000         3,711,120   

Phillips 66 (a)

     70,350         3,317,706   

Royal Dutch Shell Plc, Class A - ADR

     47,900         3,280,192   

Spectra Energy Corp. (a)

     218,900         6,319,643   

Total SA - ADR (a)

     372,400         18,768,960   
     

 

 

 
        154,887,413   

 

 
Common Stocks    Shares      Value  

 

 

Paper & Forest Products – 0.5%

  

MeadWestvaco Corp.

     260,900       $ 7,746,121   

 

 

Pharmaceuticals – 6.3%

  

Abbott Laboratories (a)

     136,100         8,917,272   

Bristol-Myers Squibb Co. (a)

     367,700         12,226,025   

Johnson & Johnson (a)

     280,800         19,886,256   

Merck & Co., Inc. (a)

     502,500         22,929,075   

Pfizer, Inc. (a)

     1,219,900         30,338,913   
     

 

 

 
     94,297,541   

 

 

Real Estate Investment Trusts (REITs) – 2.0%

  

Federal Realty Investment Trust

     36,600         3,946,578   

Home Properties, Inc.

     86,300         5,246,177   

Liberty Property Trust

     60,800         2,135,296   

Realty Income Corp.

     69,418         2,726,045   

Sovran Self Storage, Inc. (c)

     37,680         2,177,904   

Tanger Factory Outlet Centers (c)

     66,000         2,077,020   

UDR, Inc. (c)

     141,600         3,436,632   

Weingarten Realty Investors (c)

     94,600         2,554,200   

Weyerhaeuser Co. (a)

     205,300         5,684,757   
     

 

 

 
        29,984,609   

 

 

Road & Rail – 1.7%

  

Canadian National Railway Co. (a)

     173,400         14,978,292   

Union Pacific Corp. (a)

     83,800         10,309,914   
     

 

 

 
        25,288,206   

 

 

Semiconductors & Semiconductor Equipment – 0.7%

  

Intel Corp. (a)

     267,700         5,789,013   

Linear Technology Corp. (a)

     147,100         4,598,346   
     

 

 

 
        10,387,359   

 

 

Software – 0.6%

  

Microsoft Corp. (a)

     301,900         8,614,718   

 

 

Specialty Retail – 2.9%

  

The Home Depot, Inc. (a)

     432,600         26,552,988   

Limited Brands, Inc.

     346,700         16,603,463   
     

 

 

 
        43,156,451   

 

 

Textiles, Apparel & Luxury Goods – 1.2%

  

VF Corp. (a)

     109,400         17,118,912   

 

 

Tobacco – 3.2%

  

Altria Group, Inc.

     230,900         7,342,620   

Lorillard, Inc. (a)

     91,800         10,649,718   

Philip Morris International, Inc.

     298,000         26,390,880   

Universal Corp.

     69,700         3,454,332   
     

 

 

 
        47,837,550   

 

 

Water Utilities – 1.1%

  

American Water Works Co., Inc.

     235,400         8,648,596   

Aqua America, Inc.

     238,000         6,042,820   

California Water Service Group (a)

     64,918         1,195,790   
  

 

 

    

 

 

 
        15,887,206   

 

 

Wireless Telecommunication Services – 0.4%

  

Vodafone Group Plc - ADR

     196,300         5,343,286   

 

 

Total Long-Term Investments

(Cost – $1,258,221,224) – 93.0%

  

  

     1,385,057,694   

 

 
     
     
 

 

See Notes to Financial Statements.     
                 
      ANNUAL REPORT       OCTOBER 31, 2012    45


 

 

Schedule of Investments (continued)

 

 

BlackRock Enhanced Equity Dividend Trust (BDJ)

(Percentages shown are based on Net Assets)

 

Short-Term Securities    Shares      Value  

BlackRock Liquidity Funds, TempFund, Institutional Class,
0.17% (d)(f)

     112,624,435       $ 112,624,435   

 

 
    

Beneficial
Interest

(000)

        

 

 

BlackRock Liquidity Series, LLC Money Market Series, 0.31% (d)(e)(f)

   $ 4,054         4,054,445   

 

 

Total Short-Term Securities

(Cost – $116,678,880) – 7.8%

  

  

     116,678,880   

 

 
     
     
Options Purchased    Contracts         

 

 

Exchange-Traded Call Options – 0.0%

  

Caterpillar, Inc., Strike Price USD 90, Expires 11/19/12

     295         6,195   

Intel Corp., Strike Price USD 25, Expires 11/19/12

     704         704   

Microsoft Corp., Strike Price USD 31, Expires 11/19/12

     1,580         3,950   

 

 

Total Options Purchased

(Cost – $15,733) – 0.0%

        10,849   

 

 

Total Investments Before Options Written

(Cost – $1,374,915,837) – 100.8%

  

  

     1,501,747,423   

 

 
     
     
Options Written              

 

 

Exchange-Traded Call Options – (0.5)%

  

3M Co., Strike Price USD 94, Expires 11/02/12

     660         (1

Abbott Laboratories, Strike Price USD 66, Expires 11/17/12

     805         (56,305

ACE Ltd., Strike Price USD 75, Expires 11/19/12

     400         (152,000

American Electric Power Co., Inc.:

     

Strike Price USD 42, Expires 11/19/12

     408         (100,980

Strike Price USD 43, Expires 11/19/12

     408         (59,160

AT&T Inc.:

     

Strike Price USD 37, Expires 11/19/12

     700         (1,050

Strike Price USD 38, Expires 11/19/12

     725         (725

Strike Price USD 39, Expires 11/19/12

     150         (150

Bank of Nova Scotia, Strike Price CAD 54, Expires 11/19/12

     1,315         (90,190

Beam, Inc., Strike Price USD 60, Expires 11/05/12

     157         (2

BHP Billiton Ltd. - ADR, Strike Price USD 72.50, Expires 11/19/12

     1,973         (135,151

Bristol-Myers Squibb Co., Strike Price USD 34, Expires 11/19/12

     265         (5,565

California Water Service Group, Strike Price USD 19, Expires 11/07/12

     67         (38

Canadian National Railway Co., Strike Price USD 90, Expires 11/19/12

     50         (1,125

Caterpillar, Inc., Strike Price USD 92.50, Expires 11/19/12

     1,400         (7,700

The Coca-Cola Co.:

     

Strike Price USD 38.75, Expires 11/19/12

     800         (4,400

Strike Price USD 40, Expires 11/19/12

     1,660         (2,490
Options Written    Contracts      Value  

Exchange-Traded Call Options (continued)

  

Comcast Corp., Special Class A:

     

Strike Price USD 35.65, Expires 11/17/12

     305       $ (30,840

Strike Price USD 36, Expires 12/14/12

     1,265         (140,275

ConocoPhillips, Strike Price USD 55.50, Expires 11/05/12

     630         (146,938

Deere & Co., Strike Price USD 85, Expires 11/19/12

     900         (163,350

Diageo Plc - ADR, Strike Price USD 115, Expires 11/19/12

     210         (25,725

Dominion Resources, Inc., Strike Price USD 54, Expires 11/05/12

     250         (361

Duke Energy Corp.:

     

Strike Price USD 65.55, Expires 11/02/12

     360         (10,323

Strike Price USD 69, Expires 11/02/12

     67           

Edison International, Strike Price USD 45, Expires 11/19/12

     220         (45,650

Enbridge, Inc., Strike Price CAD 41, Expires 11/19/12

     2,480         (21,106

Fastenal Co., Strike Price USD 45, Expires 11/19/12

     345         (31,050

FirstEnergy Corp., Strike Price USD 47, Expires 1/21/13

     150         (6,375

General Dynamics Corp., Strike Price USD 65, Expires 11/19/12

     830         (282,200

General Electric Co.:

     

Strike Price USD 21, Expires 11/19/12

     1,000         (40,000

Strike Price USD 22, Expires 11/19/12

     500         (3,750

Strike Price USD 23, Expires 11/19/12

     1,000         (1,500

Genuine Parts Co., Strike Price USD 65, Expires 11/19/12

     178         (2,670

Graco, Inc., Strike Price USD 50, Expires 11/19/12

     218         (7,630

Helmerich & Payne, Inc., Strike Price USD 51.50, Expires 11/26/12

     350         (16,805

The Home Depot, Inc., Strike Price USD 57.50, Expires 11/19/12

     2,380         (987,700

Honeywell International, Inc., Strike Price USD 61, Expires 11/01/12

     740         (28,954

Intel Corp.:

     

Strike Price USD 23.10, Expires 11/17/12

     390         (882

Strike Price USD 28, Expires 11/19/12

     1,496         (1,496

International Business Machines Corp.:

     

Strike Price USD 209, Expires 11/14/12

     500         (2,468

Strike Price USD 199, Expires 12/07/12

     100         (21,139

ITC Holdings Corp., Strike Price USD 75, Expires 11/19/12

     37         (17,760

Johnson & Johnson:

     

Strike Price USD 70, Expires 11/19/12

     945         (120,015

Strike Price USD 72.15, Expires 12/04/12

     365         (15,007

Johnson Controls, Inc., Strike Price USD 29, Expires 11/19/12

     485         (2,425

JPMorgan Chase & Co.:

     

Strike Price USD 38, Expires 11/19/12

     1,230         (464,325

Strike Price USD 42, Expires 11/27/12

     2,990         (256,545
 

 

See Notes to Financial Statements.     
                 
46       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (continued)

 

 

BlackRock Enhanced Equity Dividend Trust (BDJ)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

Exchange-Traded Call Options (continued)

  

Kinder Morgan, Inc., Strike Price USD 35, Expires 12/03/12

     38       $ (1,805

Linear Technology Corp.:

     

Strike Price USD 33, Expires 11/19/12

     405         (4,050

Strike Price USD 34, Expires 11/19/12

     405         (2,025

Lorillard, Inc., Strike Price USD 120, Expires 11/19/12

     505         (32,068

M&T Bank Corp., Strike Price USD 104.50, Expires 12/11/12

     45         (9,171

Marathon Oil Corp., Strike Price USD 31, Expires 11/19/12

     760         (28,120

Marathon Petroleum Corp., Strike Price USD 55, Expires 11/19/12

     661         (104,108

Masco Corp., Strike Price USD 17, Expires 11/19/12

     940         (4,700

Mattel, Inc., Strike Price USD 36, Expires 11/19/12

     615         (67,650

McDonald’s Corp., Strike Price USD 94, Expires 11/09/12

     780         (20

Merck & Co., Inc.:

     

Strike Price USD 45.50, Expires 11/17/12

     145         (9,607

Strike Price USD 47, Expires 11/19/12

     240         (4,320

Microsoft Corp.:

     

Strike Price USD 31.50, Expires 11/17/12

     1,580         (2,774

Strike Price USD 29, Expires 11/19/12

     1,025         (27,163

Strike Price USD 29, Expires 12/24/12

     1,025         (60,475

Mondelez International, Inc., Class A:

     

Strike Price USD 41, Expires 11/05/12 (a)

     755         (336,807

Strike Price USD 42, Expires 11/19/12 (a)

     720         (36,360

National Bank of Canada, Strike Price CAD 75.50, Expires 11/19/12

     1,090         (211,725

Northrop Grumman Corp., Strike Price USD 70, Expires 11/19/12

     520         (28,600

Occidental Petroleum Corp., Strike Price USD 90, Expires 11/19/12

     443         (1,994

Pentair Ltd., Strike Price USD 45, Expires 11/19/12

     800         (16,000

Pfizer, Inc.:

     

Strike Price USD 24.55, Expires 11/02/12

     2,030         (69,973

Strike Price USD 25, Expires 11/19/12

     5,830         (195,305

Phillips 66:

     

Strike Price USD 45, Expires 11/19/12

     197         (53,190

Strike Price USD 48, Expires 11/19/12

     190         (20,425

Polaris Industries, Inc., Strike Price USD 82.50, Expires 11/19/12

     445         (146,850

Praxair, Inc., Strike Price USD 110, Expires 11/19/12

     425         (12,750

The Procter & Gamble Co., Strike Price USD 70, Expires 11/19/12

     290         (12,905

Prudential Financial, Inc., Strike Price USD 57.50, Expires 11/19/12

     790         (111,390

Quest Diagnostics, Inc., Strike Price USD 60, Expires 11/19/12

     490         (14,700

Raytheon Co.:

     

Strike Price USD 57.50, Expires 11/19/12

     1,520         (53,960

Strike Price USD 60, Expires 11/19/12

     370         (1,295
Options Written    Contracts      Value  

Exchange-Traded Call Options (continued)

  

Rockwell Automation, Inc.:

     

Strike Price USD 75, Expires 11/19/12

     186       $ (12,090

Strike Price USD 71.50, Expires 12/10/12

     140         (29,731

Rockwell Collins, Inc., Strike Price USD 53.50, Expires 11/09/12

     290         (22,111

Roper Industries, Inc., Strike Price USD 110, Expires 11/19/12

     372         (49,290

Schlumberger Ltd.:

     

Strike Price USD 75, Expires 11/19/12

     270         (3,240

Strike Price USD 77.50, Expires 11/19/12

     270         (810

Sempra Energy:

     

Strike Price USD 72, Expires 11/05/12

     75         (15

Strike Price USD 67.50, Expires 11/19/12

     325         (77,188

Sonoco Products Co., Strike Price USD 31.25, Expires 11/02/12

     547         (3,164

The Southern Co., Strike Price USD 47, Expires 12/24/12

     1,528         (78,692

Southern Copper Corp., Strike Price USD 35, Expires 11/19/12

     333         (103,230

Spectra Energy Corp., Strike Price USD 29, Expires 11/19/12

     715         (19,663

Stanley Black & Decker, Inc., Strike Price USD 77.50, Expires 11/19/12

     536         (2,680

Time Warner Cable, Inc., Strike Price USD 91, Expires 11/05/12

     365         (294,984

Total SA - ADR:

     

Strike Price USD 53.85, Expires 11/12/12

     555         (2,037

Strike Price USD 50, Expires 11/19/12

     287         (35,158

Strike Price USD 52.50, Expires 11/19/12

     1,208         (27,180

The Travelers Cos., Inc.:

     

Strike Price USD 67.50, Expires 11/19/12

     3         (1,110

Strike Price USD 70, Expires 11/19/12

     337         (56,448

Unilever NV, Strike Price USD 35, Expires 11/19/12

     2,180         (430,550

Union Pacific Corp.:

     

Strike Price USD 125, Expires 11/19/12

     330         (44,220

Strike Price USD 130, Expires 11/19/12

     200         (4,200

United Parcel Service, Inc., Class B:

     

Strike Price USD 80, Expires 11/05/12

     200           

Strike Price USD 75, Expires 12/24/12

     540         (36,720

United Technologies Corp., Strike Price USD 80, Expires 11/19/12

     690         (32,085

Verizon Communications, Inc.:

     

Strike Price USD 44.55, Expires 11/02/12

     200         (4,910

Strike Price USD 45, Expires 11/02/12

     200         (1,407

VF Corp., Strike Price USD 155, Expires 11/19/12

     324         (129,600

Wal-Mart Stores, Inc., Strike Price USD 75, Expires 11/19/12

     595         (75,565

The Walt Disney Co.:

     

Strike Price USD 53, Expires 11/13/12

     165         (340

Strike Price USD 51.50, Expires 12/17/12

     485         (17,264
 

 

See Notes to Financial Statements.     
                 
      ANNUAL REPORT       OCTOBER 31, 2012    47


 

 

Schedule of Investments (continued)

 

 

BlackRock Enhanced Equity Dividend Trust (BDJ)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Exchange-Traded Call Options (concluded)

  

Wells Fargo & Co.:

     

Strike Price USD 34.75, Expires 11/05/12

     2,895       $ (9,144

Strike Price USD 35.50, Expires 11/17/12

     1,655         (10,284

Strike Price USD 36, Expires 11/19/12

     1,410         (4,935

Weyerhaeuser Co.:

     

Strike Price USD 27, Expires 11/19/12

     450         (42,750

Strike Price USD 28, Expires 11/19/12

     500         (20,000

 

 

Total Exchange-Traded Call Options

  

     (6,877,376

 

 

Over-the-Counter Call Options – (0.4)%

  

ACE Ltd., Strike Price USD 75.15, Expires 11/02/12, Broker Banc of America Securities

     29,500         (102,898

Altria Group, Inc.:

     

Strike Price USD 35.13, Expires 11/01/12, Broker Goldman Sachs & Co.

     20,000           

Strike Price USD 34, Expires 12/03/12, Broker Goldman Sachs & Co.

     25,500         (660

Strike Price USD 34.23, Expires 1/02/13, Broker Morgan Stanley & Co., Inc.

     81,500         (6,953

American Electric Power Co., Inc., Strike Price USD 43.91, Expires 11/01/12, Broker Goldman Sachs & Co.

     17,000         (8,962

American Express Co., Strike Price USD 58.94, Expires 11/15/12, Broker Morgan Stanley & Co., Inc.

     144,500         (13,971

American Water Works Co., Inc.:

     

Strike Price USD 36.06, Expires 11/29/12, Broker UBS Securities LLC

     37,000         (38,427

Strike Price USD 36.06, Expires 12/11/12, Broker UBS Securities LLC

     37,000         (42,349

Strike Price USD 37.63, Expires 1/02/13, Broker Morgan Stanley & Co., Inc.

     55,000         (35,862

AO Smith Corp., Strike Price USD 57.20, Expires 11/09/12, Broker UBS Securities LLC

     29,000         (104,056

Aqua America, Inc.:

     

Strike Price USD 24.34, Expires 11/12/12, Broker Morgan Stanley & Co., Inc.

     53,500         (56,075

Strike Price USD 25.26, Expires 11/29/12, Broker Morgan Stanley & Co., Inc.

     39,000         (18,390

Strike Price USD 25.23, Expires 12/05/12, Broker UBS Securities LLC

     31,500         (16,503

Strike Price USD 25.25, Expires 12/14/12, Broker Citigroup Global Markets, Inc.

     7,000         (3,937

AT&T Inc.:

     

Strike Price USD 36.97, Expires 11/27/12, Broker Morgan Stanley & Co., Inc.

     112,000         (3,107

Strike Price USD 38.86, Expires 12/07/12, Broker Morgan Stanley & Co., Inc.

     94,000         (142
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

Automatic Data Processing, Inc., Strike Price USD 59, Expires 11/02/12, Broker Goldman Sachs & Co.

     33,300       $ (75

BCE, Inc.:

     

Strike Price USD 45.20, Expires 11/05/12, Broker Morgan Stanley & Co., Inc.

     10,000         (42

Strike Price USD 44.28, Expires 1/04/13, Broker Deutsche Bank Securities Corp.

     45,500         (20,994

Brady Corp., Class A, Strike Price USD 29.72, Expires 11/28/12, Broker Banc of America Securities

     60,000         (74,881

Bristol-Myers Squibb Co.:

     

Strike Price USD 32.29, Expires 11/02/12, Broker Goldman Sachs & Co.

     84,800         (80,953

Strike Price USD 33.90, Expires 11/02/12, Broker Goldman Sachs & Co.

     91,000         (724

California Water Service Group, Strike Price USD 19.05, Expires 11/05/12, Broker Citigroup Global Markets, Inc.

     29,000         (79

Canadian National Railway Co.:

     

Strike Price USD 92.07, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

     35,000           

Strike Price USD 93.99, Expires 11/02/12, Broker Deutsche Bank Securities Corp.

     55,500         (1

CenturyLink, Inc.:

     

Strike Price USD 43.13, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

     97,500         (1

Strike Price USD 40.58, Expires 12/03/12, Broker Citigroup Global Markets, Inc.

     51,100         (4,485

Strike Price USD 39.39, Expires 12/10/12, Broker Citigroup Global Markets, Inc.

     99,000         (46,212

Strike Price USD 40.58, Expires 12/17/12, Broker Citigroup Global Markets, Inc.

     51,100         (7,681

Chevron Corp.:

     

Strike Price USD 113.60, Expires 11/01/12, Broker Goldman Sachs & Co.

     13,000           

Strike Price USD 115.88, Expires 11/05/12, Broker Morgan Stanley & Co., Inc.

     127,800         (238

Strike Price USD 118.09, Expires 11/29/12, Broker Citigroup Global Markets, Inc.

     64,500         (5,628

The Chubb Corp.:

     

Strike Price USD 74.60, Expires 11/07/12, Broker Morgan Stanley & Co., Inc.

     42,000         (103,269

Strike Price USD 77.50, Expires 11/29/12, Broker Deutsche Bank Securities Corp.

     62,000         (80,953
 

 

See Notes to Financial Statements.     
                 
48       ANNUAL REPORT       OCTOBER 31, 2012   


 
Schedule of Investments (continued)  

 

BlackRock Enhanced Equity Dividend Trust (BDJ)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

  

Comcast Corp., Special Class A, Strike Price USD 35.29, Expires 11/27/12, Broker Morgan Stanley & Co., Inc.

     129,200         $    (177,926)   

Consolidated Edison, Inc., Strike Price USD 64.22, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

     32,000           

Cullen/Frost Bankers, Inc., Strike Price USD 54.54, Expires 12/07/12, Broker Morgan Stanley & Co., Inc.

     50,500         (71,158

Deere & Co., Strike Price USD 82.41, Expires 11/30/12, Broker Morgan Stanley & Co., Inc.

     60,000         (253,448

Diageo Plc - ADR, Strike Price USD 113.53, Expires 11/01/12, Broker Goldman Sachs & Co.

     57,000         (46,898

Dominion Resources, Inc.:

     

Strike Price USD 54.20, Expires 11/07/12, Broker Morgan Stanley & Co., Inc.

     53,500         (964

Strike Price USD 51.92, Expires 1/03/13, Broker Citigroup Global Markets, Inc.

     53,500         (71,852

Dover Corp., Strike Price USD 61.01, Expires 11/12/12, Broker Citigroup Global Markets, Inc.

     30,000         (2,688

The Dow Chemical Co., Strike Price USD 31.34, Expires 11/12/12, Broker Goldman Sachs & Co.

     23,000         (861

E.I. du Pont de Nemours & Co.:

     

Strike Price USD 52, Expires 11/01/12, Broker Banc of America Securities

     110,000         (1

Strike Price USD 51, Expires 12/17/12, Broker Morgan Stanley & Co., Inc.

     109,000         (6,099

Edison International:

     

Strike Price USD 44.88, Expires 11/01/12, Broker Goldman Sachs & Co.

     26,000         (53,473

Strike Price USD 45.25, Expires 11/29/12, Broker Goldman Sachs & Co.

     21,000         (37,291

EQT Corp.:

     

Strike Price USD 60.08, Expires 11/09/12, Broker Goldman Sachs & Co.

     38,000         (48,958

Strike Price USD 60.56, Expires 12/07/12, Broker Goldman Sachs & Co.

     35,000         (71,147

Exxon Mobil Corp.:

     

Strike Price USD 88.35, Expires 11/09/12, Broker Morgan Stanley & Co., Inc.

     115,800         (337,510

Strike Price USD 93.15, Expires 11/26/12, Broker Morgan Stanley & Co., Inc.

     63,400         (39,441

Family Dollar Stores, Inc., Strike Price USD 64.25, Expires 12/04/12, Broker Goldman Sachs & Co.

     28,000         (82,375

Federal Realty Investment Trust, Strike Price USD 108.91, Expires 12/14/12, Broker UBS Securities LLC

     20,000         (18,640
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

  

FirstEnergy Corp.:

     

Strike Price USD 44.22, Expires 11/13/12, Broker Morgan Stanley & Co., Inc.

     41,000       $ (64,220

Strike Price USD 46.52, Expires 11/13/12, Broker Goldman Sachs & Co.

     30,000         (3,454

General Electric Co.:

     

Strike Price USD 22.43, Expires 11/26/12, Broker Morgan Stanley & Co., Inc.

     168,000         (8,755

Strike Price USD 22.43, Expires 12/10/12, Broker Morgan Stanley & Co., Inc.

     168,000         (14,632

General Mills, Inc., Strike Price USD 40.30, Expires 12/05/12, Broker Morgan Stanley & Co., Inc.

     141,400         (53,885

HJ Heinz Co., Strike Price USD 56.36, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     89,000         (169,119

Home Properties, Inc., Strike Price USD 61.68, Expires 12/03/12, Broker UBS Securities LLC

     47,500         (55,281

Honeywell International, Inc., Strike Price USD 58.65, Expires 11/01/12, Broker Credit Suisse First Boston

     25,000         (64,646

Integrys Energy Group, Inc., Strike Price USD 55.63, Expires 11/02/12, Broker Goldman Sachs & Co.

     40,000         (72

Intel Corp., Strike Price USD 21.59, Expires 11/27/12, Broker Morgan Stanley & Co., Inc.

     149,500         (70,763

International Business Machines Corp., Strike Price USD 207.91, Expires 12/07/12, Broker Banc of America Securities

     10,000         (5,002

ITC Holdings Corp., Strike Price USD 73.83, Expires 11/02/12, Broker Citigroup Global Markets, Inc.

     18,700         (108,169

Johnson & Johnson, Strike Price USD 69.08, Expires 11/09/12, Broker Banc of America Securities

     23,500         (40,970

Johnson Controls, Inc., Strike Price USD 27.15, Expires 11/01/12, Broker Credit Suisse First Boston

     50,000         (1

JPMorgan Chase & Co., Strike Price USD 41, Expires 12/10/12, Broker Morgan Stanley & Co., Inc.

     48,000         (78,393

Kimberly-Clark Corp.:

     

Strike Price USD 84, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

     36,800         (2,607

Strike Price USD 82.96, Expires 11/27/12, Broker UBS Securities LLC

     16,000         (20,897

Strike Price USD 82.96, Expires 12/14/12, Broker UBS Securities LLC

     16,000         (24,917

Kinder Morgan, Inc., Strike Price USD 35.97, Expires 12/03/12, Broker UBS Securities LLC

     33,500         (6,490
 

 

See Notes to Financial Statements.     
                 
      ANNUAL REPORT       OCTOBER 31, 2012    49


 

 

Schedule of Investments (continued)

 

 

BlackRock Enhanced Equity Dividend Trust (BDJ)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

  

Kraft Foods Group, Inc., Strike Price USD 47.27, Expires 12/06/12, Broker Deutsche Bank Securities Corp.

     25,000       $ (5,703)   

Lancaster Colony Corp., Strike Price USD 72.50, Expires 11/01/12, Broker Morgan Stanley & Co., Inc.

     25,000         (10,294)   

Liberty Property Trust:

     

Strike Price USD 37.87, Expires 11/01/12, Broker Deutsche Bank Securities Corp.

     20,000         –    

Strike Price USD 37.29, Expires 12/05/12, Broker Citigroup Global Markets, Inc.

     13,500         (978)   

Limited Brands, Inc.:

     

Strike Price USD 49.75, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

     56,800         (1,188)   

Strike Price USD 51.15, Expires 11/27/12, Broker Morgan Stanley & Co., Inc.

     77,000         (35,288)   

Strike Price USD 50.94, Expires 12/12/12, Broker UBS Securities LLC

     57,000         (45,581)   

M&T Bank Corp., Strike Price USD 89.10, Expires 11/02/12, Broker Goldman Sachs & Co.

     12,000         (179,826)   

Marathon Oil Corp., Strike Price USD 28.08, Expires 11/07/12, Broker Morgan Stanley & Co., Inc.

     53,500         (106,990)   

Masco Corp., Strike Price USD 14.61, Expires 11/05/12, Broker Deutsche Bank Securities Corp.

     30,000         (18,571)   

Mattel, Inc., Strike Price USD 37.80, Expires 12/06/12, Broker Goldman Sachs & Co.

     52,900         (19,123)   

McDonald’s Corp., Strike Price USD 89, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

     46,000         (55)   

MeadWestvaco Corp., Strike Price USD 28.73, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

     143,500         (137,064)   

Merck & Co., Inc.:

     

Strike Price USD 44.23, Expires 11/01/12, Broker Deutsche Bank Securities Corp.

     22,000         (30,773)   

Strike Price USD 44, Expires 11/09/12, Broker Morgan Stanley & Co., Inc.

     108,000         (179,707)   

Strike Price USD 44.33, Expires 12/03/12, Broker UBS Securities LLC

     107,800         (178,009)   

Mondelez International, Inc., Class A, Strike Price USD 27.58, Expires 12/06/12, Broker Deutsche Bank Securities Corp.

     75,500         (17,760)   

New Jersey Resources Corp., Strike Price USD 45.90, Expires 12/06/12, Broker Citigroup Global Markets, Inc.

     66,500         (9,628)   
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

  

NextEra Energy, Inc.:

     

Strike Price USD 70, Expires 11/02/12, Broker Goldman Sachs & Co.

     25,600       $ (7,478

Strike Price USD 69.81, Expires 12/04/12, Broker Goldman Sachs & Co.

     73,500         (82,341

Northeast Utilities:

     

Strike Price USD 37.36, Expires 11/14/12, Broker Morgan Stanley & Co., Inc.

     85,000         (161,660

Strike Price USD 38.12, Expires 12/03/12, Broker Morgan Stanley & Co., Inc.

     87,000         (112,567

Strike Price USD 37.36, Expires 12/14/12, Broker Morgan Stanley & Co., Inc.

     85,000         (164,452

Northrop Grumman Corp., Strike Price USD 67.92, Expires 11/27/12, Broker Citigroup Global Markets, Inc.

     42,500         (69,928

Northwest Natural Gas Co.:

     

Strike Price USD 49.78, Expires 11/07/12, Broker Banc of America Securities

     22,000           

Strike Price USD 49.64, Expires 12/07/12, Broker Morgan Stanley & Co., Inc.

     21,800         (1,029

Old Republic International Corp., Strike Price USD 8.99, Expires 11/09/12, Broker Morgan Stanley & Co., Inc.

     124,600         (108,793

Olin Corp.:

     

Strike Price USD 21.58, Expires 11/12/12, Broker Morgan Stanley & Co., Inc.

     32,100         (1,824

Strike Price USD 21.54, Expires 11/28/12, Broker Banc of America Securities

     62,500         (15,259

Strike Price USD 21.58, Expires 12/05/12, Broker Morgan Stanley & Co., Inc.

     32,100         (9,224

Otter Tail Corp.:

     

Strike Price USD 24.21, Expires 11/28/12, Broker Citigroup Global Markets, Inc.

     8,000         (3,655

Strike Price USD 23.60, Expires 12/04/12, Broker Credit Suisse First Boston

     11,700         (7,302

Strike Price USD 24.22, Expires 12/10/12, Broker Goldman Sachs & Co.

     11,000         (3,565

Philip Morris International, Inc.: Strike Price USD 91.24, Expires 11/01/12, Broker Goldman Sachs & Co.

     29,500         (8

Strike Price USD 94, Expires 11/02/12, Broker Goldman Sachs & Co.

     134,400         (1
 

 

 

See Notes to Financial Statements.

    
                 
50       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (continued)

 

 

BlackRock Enhanced Equity Dividend Trust (BDJ)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

  

Polaris Industries, Inc., Strike Price USD 78.66, Expires 11/08/12, Broker Goldman Sachs & Co.

     22,000       $ (129,637

PPL Corp.:

     

Strike Price USD 29.11, Expires 11/12/12, Broker Credit Suisse First Boston

     27,000         (14,010

Strike Price USD 29.50, Expires 11/29/12, Broker Morgan Stanley & Co., Inc.

     28,000         (10,546

The Procter & Gamble Co., Strike Price USD 68.66, Expires 11/30/12, Broker UBS Securities LLC

     97,000         (112,138

Prudential Financial Inc., Strike Price USD 55, Expires 11/01/12, Broker Morgan Stanley & Co., Inc.

     55,000         (112,718

Public Service Enterprise Group, Inc.:

  

  

Strike Price USD 33.11, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

     60,000         (9

Strike Price USD 31.88, Expires 11/30/12, Broker Morgan Stanley & Co., Inc.

     43,000         (22,621

Strike Price USD 31.80, Expires 12/11/12, Broker Morgan Stanley & Co., Inc.

     52,000         (32,799

Raven Industries, Inc.:

     

Strike Price USD 27.81, Expires 11/27/12, Broker Goldman Sachs & Co.

     21,900         (15,206

Strike Price USD 27.89, Expires 12/04/12, Broker Morgan Stanley & Co., Inc.

     21,900         (16,913

Realty Income Corp., Strike Price USD 41.75, Expires 1/03/13, Broker Citigroup Global Markets, Inc.

     38,000         (4,045

Rio Tinto Plc - ADR, Strike Price USD 48.46, Expires 11/05/12, Broker Morgan Stanley & Co., Inc.

     80,000         (140,688

Royal Dutch Shell Plc, Class A- ADR, Strike Price USD 74.22, Expires 11/29/12, Broker Goldman
Sachs & Co.

     26,200         (354

Sempra Energy, Strike Price USD 66.96, Expires 11/01/12, Broker Goldman Sachs & Co.

     14,000         (38,972

Southern Copper Corp., Strike Price USD 35.79, Expires 12/05/12, Broker Credit Suisse First Boston

     32,500         (75,448

Sovran Self Storage, Inc., Strike Price USD 59.25, Expires 11/30/12, Broker UBS Securities LLC

     20,800         (15,281

Spectra Energy Corp., Strike Price USD 29.48, Expires 12/04/12, Broker Goldman Sachs & Co.

     49,000         (13,435

Tanger Factory Outlet Centers:

  

  

Strike Price USD 32.14, Expires 12/06/12, Broker Citigroup Global Markets, Inc.

     18,000         (6,581

Strike Price USD 32.14, Expires 12/19/12, Broker Citigroup Global Markets, Inc.

     18,000         (6,402
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (concluded)

  

  

Time Warner Cable, Inc., Strike Price USD 89.87, Expires 11/05/12, Broker UBS Securities LLC

     36,500       $ (336,228

The Toronto-Dominion Bank:

     

Strike Price USD 83.15, Expires 11/01/12, Broker Goldman Sachs & Co.

     15,000           

Strike Price USD 84, Expires 11/01/12, Broker UBS Securities LLC

     75,000           

The Travelers Cos., Inc., Strike Price USD 69.20, Expires 11/12/12, Broker Morgan Stanley & Co., Inc.

     116,000         (227,849

U.S. Bancorp, Strike Price USD 33.75, Expires 11/02/12, Broker Citigroup Global Markets, Inc.

     330,000         (8,629

UDR, Inc.:

     

Strike Price USD 25.88, Expires 11/07/12, Broker Deutsche Bank Securities Corp.

     27,900         (1

Strike Price USD 26.67, Expires 11/07/12, Broker Morgan Stanley & Co., Inc.

     50,000         (1

United Technologies Corp., Strike Price USD 78.65, Expires 11/06/12, Broker Morgan Stanley & Co., Inc.

     64,000         (34,236

Universal Corp., Strike Price USD 51.61, Expires 11/29/12, Broker Morgan Stanley & Co., Inc.

     36,500         (8,873

Verizon Communications, Inc., Strike Price USD 43.06, Expires 11/30/12, Broker Morgan Stanley & Co., Inc.

     237,000         (424,122

VF Corp., Strike Price USD 153.37, Expires 11/30/12, Broker Morgan Stanley & Co., Inc.

     28,000         (148,406

Vodafone Group Plc - ADR:

     

Strike Price USD 29.09, Expires 11/26/12, Broker Banc of America Securities

     54,000         (1,049

Strike Price USD 29.09, Expires 12/07/12, Broker Banc of America Securities

     54,000         (2,240

Weingarten Realty Investors:

     

Strike Price USD 28.55, Expires 11/08/12, Broker Morgan Stanley & Co., Inc.

     26,000         (4

Strike Price USD 27.50, Expires 12/12/12, Broker Credit Suisse First Boston

     26,000         (14,567

Weyerhaeuser Co., Strike Price USD 26.90, Expires 11/28/12, Broker Banc of America Securities

     19,500         (21,847

Wisconsin Energy Corp.:

     

Strike Price USD 38.31, Expires 11/07/12, Broker Banc of America Securities

     30,000         (9,324

Strike Price USD 39.05, Expires 11/29/12, Broker Morgan Stanley & Co., Inc.

     51,000         (11,180

 

 

Total Over-the-Counter Call Options

        (6,733,494

 

 
 

 

See Notes to Financial Statements.
                 
      ANNUAL REPORT       OCTOBER 31, 2012    51


 

 

Schedule of Investments (continued)

 

 

BlackRock Enhanced Equity Dividend Trust (BDJ)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Over-the-Counter Put Options – (0.2)%

  

  

BHP Billiton Ltd. - ADR, Strike Price
USD 72.50, Expires 11/28/12, Broker Morgan Stanley & Co., Inc.

     53,200       $ (152,747

Caterpillar, Inc., Strike Price
USD 86.70, Expires 11/28/12, Broker Morgan Stanley & Co., Inc.

     144,100         (503,065

The Dow Chemical Co., Strike Price
USD 30.37, Expires 11/28/12, Broker Goldman Sachs & Co.

     209,800         (325,134

Intel Corp., Strike Price
USD 22.20, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     347,100         (285,303

Johnson Controls, Inc., Strike Price USD 26.75, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     46,400         (66,709

Microsoft Corp., Strike Price USD 28.55, Expires 11/28/12, Broker Morgan Stanley & Co., Inc.

     361,500         (233,874

Occidental Petroleum Corp., Strike Price USD 83.20, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     81,600         (418,317

Peabody Energy Corp., Strike Price
USD 30.11, Expires 11/28/12, Broker Credit Suisse First Boston

     45,100         (127,619
Options Written    Contracts      Value  

 

 

Over-the-Counter Put Options (concluded)

  

  

Schlumberger Ltd., Strike Price
USD 72.23, Expires 11/28/12, Broker Banc of America Securities

     41,800       $ (151,152

 

 

Total Over-the-Counter Put Options

  

     (2,263,920

 

 

Total Options Written

(Premiums Received – $19,692,886) – (1.1)%

  

  

     (15,874,790

 

 

Total Investments Net of Options
Written – 99.7%

   

     1,485,872,633   

Other Assets Less Liabilities – 0.3%

  

     4,223,406   
     

 

 

 

Net Assets – 100.0%

      $ 1,490,096,039   
     

 

 

 

 

(a) All or a portion of security has been pledged/segregated as collateral in connection with outstanding options written.
(b) Non-income producing security.
(c) Security, or a portion of security, is on loan.
(d) Represents the current yield as of report date.
(e) Security was purchased with the cash collateral from loaned securities. The Trust may withdraw up to 25% of its investment daily, although the manager of the BlackRock Liquidity Series, LLC Money Market Series, in its sole discretion, may permit an investor to withdraw more than 25% on any one day.
 

 

(f) Investments in issuers considered to be an affiliate of the Trust during the year ended October 31, 2012, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliate  

Shares/
Beneficial Interest
Held at
October 31,

2011

 

Net

Activity

 

Shares/
Beneficial Interest
Held at
October 31,

2012

  Realized
Gain
  Income

BlackRock Liquidity Funds, TempFund,

         

Institutional Class

  30,155,024   82,469,411   112,624,435   $1,108   $78,791

BlackRock Liquidity Series, LLC Money

         

Market Series

  $446,250   $3,608,195   $4,054,445     $113,781
 

Foreign currency exchange contracts as of October 31, 2012 were as follows:

 

Currency
Purchased
  Currency
Sold
  Counterparty   Settlement
Date
 

Unrealized

Depreciation

USD 114,977 CAD

  115,000   Citigroup Global Markets, Inc.   11/01/12   $(167)

 

 

For Trust compliance purposes, the Trust’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Trust management. These definitions may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease.

 

 

Fair Value Measurements – Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows:

 

   

Level 1 - unadjusted price quotations in active markets/exchanges for identical assets and liabilities that the Trust has the ability to access

 

   

Level 2 - other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical

or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

   

Level 3 - unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments and derivative financial instruments)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

 

 

See Notes to Financial Statements.
                 
52       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (concluded)

 

 

BlackRock Enhanced Equity Dividend Trust (BDJ)

 

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy as of October 31, 2012:

 

     Level 1     Level 2     Level 3   Total  

Assets:

       

Investments:

       

Long-Term Investments:

       

Common Stocks1

  $ 1,385,057,694               $ 1,385,057,694   

Short-Term Securities

    112,624,435      $ 4,054,445          116,678,880   
       

Total

  $ 1,497,682,129      $ 4,054,445        $ 1,501,736,574   

 

1

See above Schedule of Investments for values in each industry.

 

     Level 1     Level 2     Level 3   Total  

Derivative Financial Instruments2

       

Assets:

       

Equity contracts

  $ 10,849               $ 10,849   

Liabilities:

       

Equity contracts

    (5,324,941   $ (10,549,849       (15,874,790

Foreign currency exchange contracts

    (167              (167

Total

  $ (5,314,259   $ (10,549,849     $ (15,864,108

 

2 

Derivative financial instruments are foreign currency exchange contracts and options. Foreign currency exchange contracts are valued at the unrealized appreciation/depreciation on the instrument and options are shown at value.

Certain of the Trust’s assets and liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2012, such assets and liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1     Level 2     Level 3   Total  

Assets:

       

Foreign currency at value

  $ 117,627               $ 117,627   

Cash pledged as collateral for options written

    600,000                 600,000   

Liabilities:

       

Cash received as collateral for options written

         $ (1,500,000       (1,500,000

Collateral on securities loaned at value

           (4,054,445       (4,054,445

Total

  $ 717,627      $ (5,554,445     $ (4,836,818

There were no transfers between levels during the year ended October 31, 2012.

 

 

See Notes to Financial Statements.
                 
      ANNUAL REPORT       OCTOBER 31, 2012    53


 

 

Schedule of Investments October 31, 2012

 

 

BlackRock Global Opportunities Equity Trust (BOE)

(Percentages shown are based on Net Assets)

 

Common Stocks    Shares      Value  

 

 

Argentina – 0.4%

  

  

Arcos Dorados Holdings, Inc., Class A

     323,300       $ 4,173,803   

 

 

Australia – 2.3%

  

  

Australia & New Zealand Banking Group Ltd.

     152,000         4,009,971   

BHP Billiton Ltd. - ADR (a)

     190,300         13,461,822   

CSL Ltd.

     73,924         3,646,002   

PanAust Ltd.

     711,700         2,453,536   
     

 

 

 
        23,571,331   

 

 

Belgium – 0.8%

  

  

Anheuser-Busch InBev NV

     102,759         8,593,806   

 

 

Bermuda – 0.5%

  

  

PartnerRe Ltd. (a)

     65,800         5,329,800   

 

 

Brazil – 0.7%

  

  

Banco Bradesco SA - ADR

     341,100         5,341,626   

Banco Bradesco SA, Preference Shares

     104,000         1,638,561   
     

 

 

 
        6,980,187   

 

 

Canada – 1.0%

  

  

Saputo, Inc. (a)

     136,900         6,007,837   

The Toronto-Dominion Bank

     57,800         4,700,970   
     

 

 

 
        10,708,807   

 

 

Cayman Islands – 0.6%

  

  

Eurasia Drilling Co., Ltd. - GDR

     186,923         6,467,536   

 

 

China –1.2%

  

  

China Construction Bank Corp., H Shares

     17,044,200         12,777,460   

 

 

France – 4.2%

  

  

Arkema SA

     26,600         2,427,227   

BNP Paribas SA

     113,880         5,744,643   

Danone SA (a)

     125,000         7,688,375   

LVMH Moet Hennessy Louis Vuitton SA (a)

     30,900         5,023,724   

Sanofi

     139,600         12,260,646   

Technip SA

     90,300         10,184,965   
     

 

 

 
        43,329,580   

 

 

Germany – 5.0%

  

  

Allianz SE

     52,600         6,534,222   

Continental AG

     32,100         3,230,850   

Daimler AG

     110,700         5,185,698   

Deutsche Bank AG

     176,700         8,048,836   

Deutsche Lufthansa AG

     414,600         6,342,964   

GSW Immobilien AG

     51,300         2,108,637   

Merck KGaA

     34,700         4,438,242   

SAP AG - ADR (a)

     110,000         8,019,000   

Volkswagen AG, Preference Shares

     39,800         8,263,465   
     

 

 

 
        52,171,914   

 

 

Hong Kong – 1.7%

  

  

AIA Group Ltd.

     2,757,600         10,874,506   

Wharf Holdings Ltd.

     1,065,200         7,262,856   
     

 

 

 
        18,137,362   

 

 

India – 0.9%

  

  

ICICI Bank Ltd.

     285,800         5,562,027   

Jubilant Foodworks Ltd. (b)

     157,094         3,676,246   
     

 

 

 
        9,238,273   

 

 

Indonesia –1.6%

  

  

Alam Sutera Realty Tbk PT

     63,525,500         3,836,001   

Bank Mandiri Persero Tbk PT

     5,642,000         4,819,850   

Global Mediacom Tbk PT

     19,610,500         4,633,235   

Tower Bersama Infrastructure Tbk PT (b)

     6,797,100         3,530,468   
     

 

 

 
        16,819,554   

 

 
Common Stocks    Shares      Value  

 

 

Ireland – 1.4%

  

  

Accenture Plc, Class A (a)

     78,000       $ 5,257,981   

Ingersoll-Rand Plc (a)

     204,100         9,598,823   
     

 

 

 
        14,856,804   

 

 

Italy – 1.3%

  

  

Eni SpA

     570,700         13,132,262   

 

 

Japan – 3.0%

  

  

Hino Motors Ltd.

     636,700         4,921,609   

Honda Motor Co. Ltd.

     172,000         5,170,879   

ORIX Corp.

     49,900         5,125,227   

Softbank Corp.

     167,000         5,274,243   

Tokio Marine Holdings, Inc.

     272,100         7,202,523   

Yahoo! Japan Corp.

     11,833         4,071,809   
     

 

 

 
        31,766,290   

 

 

Mexico – 1.6%

  

  

Fomento Economico Mexicano SAB de CV - ADR

     55,800         5,056,038   

Fresnillo Plc

     211,800         6,575,429   

Grupo Financiero Santander Mexico SAB de CV, Series B - ADR (b)

     23,800         325,346   

Grupo Mexico SAB de CV, Series B

     1,619,000         5,193,066   
     

 

 

 
        17,149,879   

 

 

Norway – 2.2%

  

  

Seadrill Ltd.

     249,246         10,099,514   

Statoil ASA

     501,400         12,348,960   
     

 

 

 
        22,448,474   

 

 

Singapore – 1.0%

  

  

Keppel Corp., Ltd.

     1,145,000         9,962,044   

 

 

South Korea – 0.6%

  

  

Samsung Electronics Co. Ltd.

     4,850         5,820,182   

 

 

Spain – 1.0%

  

  

Iberdrola SA

     1,604,400         8,309,079   

Telefonica SA

     199,100         2,627,867   
     

 

 

 
        10,936,946   

 

 

Sweden – 2.4%

  

  

Electrolux AB, Series B

     155,046         3,966,788   

Svenska Cellulosa AB, B Shares

     696,127         13,571,835   

Volvo AB, B Shares

     551,700         7,444,760   
     

 

 

 
        24,983,383   

 

 

Switzerland – 2.0%

  

  

GAM Holding AG

     571,900         7,998,247   

Roche Holding AG

     66,800         12,867,364   
     

 

 

 
        20,865,611   

 

 

Taiwan – 1.2%

  

  

First Financial Holding Co.

     8,431,727         4,783,639   

Mediatek, Inc.

     462,000         5,124,909   

Taiwan Semiconductor Manufacturing Co. Ltd. - ADR

     183,700         2,920,830   
     

 

 

 
        12,829,378   

 

 

Thailand – 0.5%

  

  

Bangkok Bank PCL - NVDR

     825,300         4,745,398   

 

 

United Kingdom – 11.7%

  

  

Afren Plc (b)

     3,559,800         7,939,938   

Antofagasta Plc

     349,175         7,103,715   

APR Energy Plc

     383,487         4,210,731   

AstraZeneca Plc

     88,900         4,122,750   

Aveva Group Plc

     165,000         5,309,578   

Babcock International Group Plc

     179,100         2,831,129   
 

 

See Notes to Financial Statements.

    
                 
54       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (continued)

 

 

BlackRock Global Opportunities Equity Trust (BOE)

(Percentages shown are based on Net Assets)

 

Common Stocks    Shares      Value  

 

 

United Kingdom (concluded)

  

  

Barclays Plc - ADR (a)

     194,500       $ 2,878,600   

British American Tobacco Plc

     264,900         13,139,036   

Diageo Plc

     275,400         7,873,341   

Direct Line Insurance Group (b)

     1,898,927         5,960,290   

Experian Plc

     526,000         9,100,384   

HSBC Holdings Plc

     902,330         8,896,401   

National Grid Plc

     931,100         10,618,866   

Subsea 7 SA

     464,405         10,180,712   

Tullow Oil Plc

     273,300         6,209,091   

Unilever Plc

     133,200         4,968,822   

Vodafone Group Plc - ADR

     368,000         10,016,960   
     

 

 

 
        121,360,344   

 

 

United States – 44.1%

  

  

Abbott Laboratories

     77,100         5,051,595   

Air Products & Chemicals, Inc.

     60,600         4,698,318   

Amgen, Inc. (a)

     123,000         10,645,035   

Apple, Inc. (a)

     30,000         17,853,000   

Baxter International, Inc. (a)

     85,900         5,379,917   

Cameron International Corp. (a)(b)

     94,200         4,770,288   

Cardinal Health, Inc. (a)

     116,700         4,799,871   

Celgene Corp. (a)(b)

     131,200         9,619,584   

Cisco Systems, Inc. (a)

     385,400         6,605,756   

Citigroup, Inc. (a)

     177,290         6,628,873   

Comcast Corp., Special Class A (a)

     264,400         9,917,644   

Costco Wholesale Corp. (a)

     84,800         8,346,864   

Crown Holdings, Inc. (a)(b)

     126,100         4,823,325   

CSX Corp. (a)

     366,100         7,494,067   

DIRECTV (a)(b)

     100,600         5,141,666   

Dominion Resources, Inc.

     137,700         7,267,806   

Eastman Chemical Co. (a)

     109,900         6,510,476   

Eaton Corp. (a)

     112,200         5,298,084   

eBay, Inc. (a)(b)

     202,700         9,788,383   

Eli Lilly & Co. (a)

     267,600         13,013,388   

Express Scripts Holding Co. (a)(b)

     101,400         6,240,156   

Exxon Mobil Corp.

     103,700         9,454,329   

F5 Networks, Inc. (b)

     39,568         3,263,569   

Federal Realty Investment Trust - REIT

     44,200         4,766,086   

FedEx Corp. (a)

     90,300         8,306,697   

The Gap, Inc. (a)

     149,800         5,350,856   

Georgia Gulf Corp.

     94,200         3,333,738   

The Goldman Sachs Group, Inc. (a)

     53,800         6,584,582   

Google, Inc., Class A (a)(b)

     14,200         9,652,734   

The Hain Celestial Group, Inc. (a)(b)

     36,919         2,133,918   

International Business Machines Corp. (a)

     24,800         4,824,344   

International Paper Co.

     171,900         6,159,177   

JPMorgan Chase & Co. (a)

     251,000         10,461,680   

KeyCorp (a)

     946,200         7,967,004   

Kraft Foods Group, Inc. (b)

     253,566         11,532,178   

Las Vegas Sands Corp. (a)

     106,800         4,959,792   

Liberty Global, Inc., Class A (b)

     47,300         2,839,419   

Linear Technology Corp. (a)

     141,494         4,423,102   

Lowe’s Cos., Inc. (a)

     209,000         6,767,420   

Merck & Co., Inc. (a)

     229,600         10,476,648   

Microsoft Corp. (a)

     165,400         4,719,689   

Mondelez International, Inc., Class A (a)

     226,000         5,998,040   

Monsanto Co. (a)

     119,300         10,268,151   

National Oilwell Varco, Inc. (a)

     126,400         9,315,680   

NII Holdings, Inc. (a)(b)

     62,200         495,734   

NIKE, Inc., Class B (a)

     51,100         4,669,518   

Oracle Corp. (a)

     234,200         7,271,910   

Owens Corning (a)(b)

     338,000         11,353,420   

Perrigo Co. (a)

     36,200         4,163,362   
Common Stocks    Shares      Value  

 

 

United States (concluded)

  

  

Pfizer, Inc.

     307,800       $ 7,654,986   

Reynolds American, Inc. (a)

     108,700         4,526,268   

Riverbed Technology, Inc. (a)(b)

     204,362         3,774,566   

Rockwell Automation, Inc. (a)

     77,800         5,528,468   

Rowan Cos. Plc, Class A (b)

     277,400         8,796,354   

Smithfield Foods, Inc. (a)(b)

     256,100         5,242,367   

SPX Corp. (a)

     99,100         6,797,269   

Teradata Corp. (b)

     82,652         5,645,958   

Time Warner, Inc. (a)

     229,400         9,967,430   

United Rentals, Inc. (b)

     238,022         9,677,975   

Verizon Communications, Inc. (a)

     151,600         6,767,424   

Vertex Pharmaceuticals, Inc. (b)

     83,200         4,013,568   

Visa, Inc., Class A (a)

     70,500         9,782,580   

Wells Fargo & Co. (a)

     450,600         15,180,714   

Weyerhaeuser Co. - REIT (a)

     80,126         2,218,689   

Whirlpool Corp. (a)

     71,500         6,984,120   

Xilinx, Inc. (a)

     147,000         4,815,720   
     

 

 

 
        458,781,329   

 

 

Total Long Term Investments

     

(Cost – $ 942,701,854) – 94.9%

        987,937,737   

 

 

    

     
          
Short-Term Securities              

 

 

BlackRock Liquidity Funds, TempFund, Institutional
Class, 0.17% (c)(d)

     54,961,782         54,961,782   

 

 

Total Short-Term Securities

     

(Cost – $ 54,961,782) – 5.2%

        54,961,782   

 

 

Total Investments Before Options Written

     

(Cost – $ 997,663,636) – 100.1%

        1,042,899,519   

 

 
          
          
Options Written    Contracts         

 

 

Exchange-Traded Call Options – (0.4)%

  

  

Accenture Plc, Class A:

     

Strike Price USD 67.50,
Expires 11/19/12

     335         (36,850

Strike Price USD 70,
Expires 1/21/13

     270         (47,250

Amgen, Inc.:

     

Strike Price USD 83.50,
Expires 11/17/12

     580         (197,468

Strike Price USD 90,
Expires 11/19/12

     95         (3,420

Apple, Inc.:

     

Strike Price USD 715,
Expires 11/19/12

     105         (1,522

Strike Price USD 640,
Expires 12/24/12

     60         (56,250

Barclays Plc - ADR, Strike Price
USD 15.45,
Expires 11/30/12

     525         (19,209

Baxter International, Inc., Strike Price USD 62.50,
Expires 11/19/12

     470         (43,945

BHP Billiton Ltd. - ADR, Strike Price USD 72.50,
Expires 11/19/12

     1,040         (71,240

Cameron International Corp., Strike Price USD 57.50,
Expires 11/19/12

     520         (5,200

Cardinal Health, Inc., Strike Price
USD 40,
Expires 11/19/12

     640         (91,200
 

 

See Notes to Financial Statements.

    
                 
      ANNUAL REPORT       OCTOBER 31, 2012    55


 

 

Schedule of Investments (continued)

 

 

BlackRock Global Opportunities Equity Trust (BOE)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Exchange-Traded Call Options (continued)

  

  

Celgene Corp., Strike Price USD 77.50, Expires 11/19/12

     720       $ (28,080

Cisco Systems, Inc.:

     

Strike Price USD 20, Expires 11/19/12

     710         (2,485

Strike Price USD 19.15, Expires 11/27/12

     700         (9,969

Citigroup, Inc.:

     

Strike Price USD 35, Expires 11/19/12

     265         (70,888

Strike Price USD 36.25, Expires 12/13/12

     75         (17,579

Strike Price USD 37.50, Expires 12/13/12

     190         (31,179

Strike Price USD 37.50, Expires 1/04/13

     445         (93,840

Comcast Corp., Special Class A:

     

Strike Price USD 37, Expires 11/19/12

     1,000         (92,500

Strike Price USD 38, Expires 12/18/12

     455         (36,400

Costco Wholesale Corp., Strike Price USD 105, Expires 11/19/12

     467         (3,036

Crown Holdings, Inc., Strike Price
USD 38, Expires 11/19/12

     475         (32,062

CSX Corp., Strike Price USD 22.80, Expires 12/03/12

     1,350         (8,701

Danone SA, Strike Price EUR 49, Expires 12/21/12

     50         (4,072

DIRECTV, Strike Price USD 52.50, Expires 11/19/12

     550         (27,225

Eastman Chemical Co., Strike Price USD 60, Expires 11/19/12

     255         (28,688

Eaton Corp., Strike Price USD 47, Expires 11/19/12

     620         (74,400

eBay, Inc.:

     

Strike Price USD 50, Expires 11/19/12

     800         (35,600

Strike Price USD 51.25, Expires 12/11/12

     315         (20,990

Eli Lilly & Co.:

     

Strike Price USD 48, Expires 11/19/12

     50         (6,300

Strike Price USD 52.50, Expires 11/19/12

     370         (3,515

Express Scripts Holding Co., Strike Price USD 65, Expires 11/19/12

     560         (26,880

FedEx Corp., Strike Price USD 87.50, Expires 11/19/12

     500         (241,250

The Gap, Inc., Strike Price USD 38, Expires 11/19/12

     825         (30,112

The Goldman Sachs Group, Inc., Strike Price USD 120, Expires 11/19/12

     295         (125,375

Google, Inc., Class A, Strike Price
USD 685, Expires 12/24/12

     78         (148,980

The Hain Celestial Group, Inc., Strike Price USD 65, Expires 11/19/12

     200         (10,000

Ingersoll-Rand Plc:

     

Strike Price USD 47, Expires 11/19/12

     560         (58,800

Strike Price USD 48, Expires 11/19/12

     560         (30,800

International Business Machines Corp., Strike Price USD 199, Expires 12/07/12

     88         (18,602

JPMorgan Chase & Co.:

     

Strike Price USD 38, Expires 11/19/12

     250         (94,375

Strike Price USD 42, Expires 11/27/12

     650         (55,771

KeyCorp, Strike Price USD 9, Expires 11/19/12

     2,165         (7,578

Las Vegas Sands Corp., Strike Price USD 47, Expires 12/20/12

     585         (109,193
Options Written    Contracts      Value  

 

 

Exchange-Traded Call Options (continued)

  

  

Linear Technology Corp.:

     

Strike Price USD 33, Expires 11/19/12

     395       $ (3,950

Strike Price USD 34, Expires 11/19/12

     395         (1,975

Lowe’s Cos., Inc.:

     

Strike Price USD 30, Expires 11/19/12

     575         (146,050

Strike Price USD 31, Expires 11/19/12

     575         (97,462

LVMH Moet Hennessy Louis Vuitton SA, Strike Price EUR 130, Expires 11/16/12

     90         (7,294

Merck & Co., Inc., Strike Price
USD 45.50, Expires 11/17/12

     345         (22,859

Microsoft Corp.:

     

Strike Price USD 29, Expires 11/19/12

     455         (12,058

Strike Price USD 29, Expires 12/24/12

     455         (26,845

Mondelez International, Inc., Class A:

     

Strike Price USD 28, Expires 11/19/12

     180         (720

Strike Price USD 42, Expires 11/19/12

     1,055         (53,278

Monsanto Co., Strike Price USD 91, Expires 12/06/12

     371         (18,315

National Oilwell Varco, Inc., Strike Price USD 85, Expires 11/19/12

     700         (2,800

NII Holdings, Inc., Strike Price USD 9, Expires 11/19/12

     350         (7,000

NIKE, Inc., Class B, Strike Price USD 97.50, Expires 11/19/12

     280         (2,100

Oracle Corp.:

     

Strike Price USD 32, Expires 11/19/12

     910         (15,925

Strike Price USD 32, Expires 1/21/13

     380         (34,960

Owens Corning:

     

Strike Price USD 36, Expires 11/19/12

     455         (9,100

Strike Price USD 37, Expires 11/19/12

     450         (6,750

PartnerRe Ltd., Strike Price USD 75, Expires 11/28/12

     380         (225,504

Perrigo Co., Strike Price USD 110, Expires 11/19/12

     225         (132,750

Reynolds American, Inc., Strike Price USD 42, Expires 12/24/12

     600         (42,000

Riverbed Technology, Inc., Strike Price USD 24, Expires 11/19/12

     1,125         (3,938

Rockwell Automation, Inc.:

     

Strike Price USD 75, Expires 11/19/12

     214         (13,910

Strike Price USD 71.50, Expires 12/10/12

     214         (45,447

SAP AG - ADR:

     

Strike Price USD 75, Expires 11/19/12

     416         (28,080

Strike Price USD 72.40, Expires 12/14/12

     190         (50,215

Saputo, Inc., Strike Price CAD 42, Expires 11/19/12

     755         (147,409

Smithfield Foods, Inc., Strike Price USD 21, Expires 11/19/12

     1,400         (35,000

SPX Corp., Strike Price USD 70, Expires 11/19/12

     250         (31,250

Time Warner, Inc., Strike Price
USD 46, Expires 11/19/12

     270         (2,430

Verizon Communications, Inc., Strike Price USD 47.25, Expires 12/06/12

     735         (6,084

Visa, Inc., Class A, Strike Price
USD 135, Expires 11/19/12

     195         (102,862

Wells Fargo & Co.:

     

Strike Price USD 35.50, Expires 11/17/12

     329         (2,044

Strike Price USD 36, Expires 11/19/12

     325         (1,138

Weyerhaeuser Co. - REIT, Strike Price
USD 27, Expires 11/19/12

     440         (41,800
 

 

See Notes to Financial Statements.

    
                 
56       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (continued)

 

 

BlackRock Global Opportunities Equity Trust (BOE)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Exchange-Traded Call Options (concluded)

  

  

Whirlpool Corp.:

     

Strike Price USD 87.50, Expires 11/19/12

     150       $ (155,625

Strike Price USD 90, Expires 11/19/12

     245         (198,450

Xilinx, Inc.:

     

Strike Price USD 34, Expires 11/17/12

     320         (3,840

Strike Price USD 34, Expires 11/19/12

     405         (21,262

 

 

Total Exchange-Traded Call Options

        (3,919,258

 

 

Over-the-Counter Call Options – (0.7)%

  

  

Abbott Laboratories, Strike Price
USD 69.85, Expires 11/28/12, Broker Morgan Stanley & Co., Inc.

     66,000         (6,957

Afren Plc:

     

Strike Price GBP 1.39, Expires 11/13/12, Broker UBS Securities LLC

     949,700         (65,243

Strike Price GBP 1.44, Expires 12/05/12, Broker Deutsche Bank Securities Corp.

     1,008,200         (77,145

AIA Group Ltd.:

     

Strike Price HKD 29.08, Expires 11/08/12, Broker UBS Securities LLC

     285,000         (69,162

Strike Price HKD 30.15, Expires 12/05/12, Broker UBS Securities LLC

     1,231,600         (214,109

Allianz SE, Strike Price EUR 96.75, Expires 12/12/12, Broker Banc of America Securities

     29,000         (55,186

Anheuser-Busch InBev NV, Strike Price EUR 67.35, Expires 12/12/12, Broker Citigroup Global Markets, Inc.

     56,600         (49,790

Antofagasta Plc:

     

Strike Price GBP 13.39, Expires 11/28/12, Broker Citigroup Global Markets, Inc.

     73,000         (21,144

Strike Price GBP 13.18, Expires 12/05/12, Broker Deutsche Bank Securities Corp.

     118,300         (53,020

APR Energy Plc:

     

Strike Price GBP 7.69, Expires 12/03/12, Broker UBS Securities LLC

     37,800         (2,591

Strike Price GBP 7.69, Expires 12/07/12, Broker UBS Securities LLC

     37,800         (3,130

Strike Price GBP 7.78, Expires 12/12/12, Broker UBS Securities LLC

     37,900         (3,175

Strike Price GBP 7.78, Expires 12/19/12, Broker UBS Securities LLC

     37,900         (4,136

Strike Price GBP 7.78, Expires 1/03/13, Broker Banc of America Securities

     22,300         (3,582

Strike Price GBP 7.78, Expires 1/10/13, Broker Banc of America Securities

     22,300         (4,136

Arcos Dorados Holdings, Inc., Class A, Strike Price USD 15.51, Expires 12/07/12, Broker Citigroup Global Markets, Inc.

     88,000         (7,392

Arkema SA, Strike Price EUR 75.13, Expires 12/12/12, Broker Banc of America Securities

     14,700         (27,021
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

  

AstraZeneca Plc, Strike Price GBP 29.57, Expires 12/05/12, Broker Citigroup Global Markets, Inc.

     48,900       $ (12,834

Australia & New Zealand Banking Group Ltd., Strike Price AUD 26.15, Expires 12/05/12, Broker Citigroup Global Markets, Inc.

     83,600         (6,725

Aveva Group Plc:

     

Strike Price GBP 20.20, Expires 11/13/12, Broker Morgan Stanley & Co., Inc.

     24,400         (7,271

Strike Price GBP 20.20, Expires 11/28/12, Broker Morgan Stanley & Co., Inc.

     24,400         (11,811

Strike Price GBP 20.44, Expires 12/05/12, Broker Morgan Stanley & Co., Inc.

     20,000         (8,599

Strike Price GBP 20.03, Expires 12/12/12, Broker Morgan Stanley & Co., Inc.

     22,000         (16,068

Babcock International Group Plc:

     

Strike Price GBP 9.57, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     49,300         (18,139

Strike Price GBP 9.63, Expires 12/12/12, Broker Morgan Stanley & Co., Inc.

     49,300         (18,132

Banco Bradesco SA - ADR:

     

Strike Price USD 17.48, Expires 11/02/12, Broker Deutsche Bank Securities Corp.

     93,000         (1

Strike Price USD 15.99, Expires 12/11/12, Broker Credit Suisse First Boston

     94,500         (31,961

Banco Bradesco SA, Preference Shares, Strike Price BRL 33.04, Expires 11/14/12, Broker Credit Suisse First Boston

     57,200         (8,015

Barclays Plc - ADR, Strike Price
USD 16.27, Expires 12/10/12, Broker Morgan Stanley & Co., Inc.

     54,500         (11,177

BNP Paribas SA, Strike Price EUR 42.58, Expires 12/19/12, Broker Morgan Stanley & Co., Inc.

     62,600         (48,172

British American Tobacco Plc, Strike Price GBP 32.25, Expires 12/12/12, Broker Morgan Stanley & Co., Inc.

     145,700         (62,190

China Construction Bank Corp.:

     

Strike Price HKD 5.81, Expires 12/05/12, Broker UBS Securities LLC

     7,324,000         (179,829

Strike Price HKD 5.87, Expires 12/05/12, Broker Banc of America Securities

     2,050,000         (63,732

Cisco Systems, Inc., Strike Price
USD 18.28, Expires 11/27/12, Broker Credit Suisse First Boston

     71,000         (13,180

Continental AG, Strike Price EUR 76.81, Expires 12/12/12, Broker Banc of America Securities

     17,700         (19,665

CSL Ltd., Strike Price AUD 47.72, Expires 12/05/12, Broker Morgan
Stanley & Co., Inc.

     62,000         (67,003

CSX Corp., Strike Price USD 21.29, Expires 12/13/12, Broker Morgan Stanley & Co., Inc.

     66,000         (19,419
 

 

See Notes to Financial Statements.

    
                 
      ANNUAL REPORT       OCTOBER 31, 2012    57


 

 

Schedule of Investments (continued)

 

 

BlackRock Global Opportunities Equity Trust (BOE)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

  

Daimler AG, Strike Price EUR 38.96, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     60,900       $ (26,965

Danone SA, Strike Price EUR 47.26, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     63,800         (89,605

Deutsche Bank AG, Strike Price
EUR 32.64, Expires 11/28/12, Broker Morgan Stanley & Co., Inc.

     97,200         (315,680

Deutsche Lufthansa AG, Strike Price
EUR 11.18, Expires 12/12/12, Broker Morgan Stanley & Co., Inc.

     228,000         (207,567

Diageo Plc, Strike Price GBP 17.79, Expires 12/12/12, Broker UBS Securities LLC

     151,500         (69,805

Dominion Resources, Inc.:

     

Strike Price USD 54.20, Expires 11/07/12, Broker Morgan Stanley & Co., Inc.

     37,500         (676

Strike Price USD 51.92, Expires 1/03/13, Broker Citigroup Global Markets, Inc.

     38,300         (51,438

Eastman Chemical Co., Strike Price
USD 58.55, Expires 1/02/13, Broker Goldman Sachs & Co.

     35,000         (113,846

Electrolux AB, Series B, Strike Price SEK 166.36, Expires 11/28/12, Broker Morgan Stanley & Co., Inc.

     116,000         (120,635

Eli Lilly & Co., Strike Price USD 52.76, Expires 12/19/12, Broker Citigroup Global Markets, Inc.

     105,000         (19,918

Eni SpA:

     

Strike Price EUR 17.52, Expires 11/12/12, Broker Barclays Capital Inc.

     135,000         (57,757

Strike Price EUR 17.93, Expires 12/12/12, Broker Citigroup Global Markets, Inc.

     57,000         (27,145

Strike Price EUR 18.08, Expires 12/12/12, Broker Morgan Stanley & Co., Inc.

     121,900         (46,240

Experian Plc, Strike Price GBP 10.71, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     289,300         (87,619

Exxon Mobil Corp.:

     

Strike Price USD 93.15, Expires 11/26/12, Broker Morgan Stanley & Co., Inc.

     28,800         (17,916

Strike Price USD 92.69, Expires 12/19/12, Broker Citigroup Global Markets, Inc.

     42,000         (45,439

F5 Networks, Inc., Strike Price USD 102.07, Expires 12/14/12, Broker Goldman Sachs & Co.

     22,000         (5,691

Federal Realty Investment Trust - REIT, Strike Price USD 108.91, Expires 12/14/12, Broker UBS Securities LLC

     24,000         (22,368

First Financial Holding Co., Strike Price TWD 17.88, Expires 12/05/12, Broker Banc of America Securities

     4,638,000         (1,753

Fomento Economico Mexicano SAB de CV - ADR:

Strike Price USD 92.70, Expires 11/29/12, Broker Citigroup Global Markets, Inc.

     14,000         (9,757

Strike Price USD 93.01, Expires 11/29/12, Broker UBS Securities LLC

     16,700         (13,934
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

  

Fresnillo Plc, Strike Price GBP 19.84, Expires 12/05/12, Broker Deutsche Bank Securities Corp.

     116,500       $ (133,806

GAM Holding AG:

     

Strike Price CHF 13.09, Expires 11/06/12, Broker Morgan Stanley & Co., Inc.

     211,500         (26,245

Strike Price CHF 12.83, Expires 12/12/12, Broker Citigroup Global Markets, Inc.

     103,000         (49,100

Georgia Gulf Corp., Strike Price
USD 39.49, Expires 12/06/12, Broker Morgan Stanley & Co., Inc.

     52,000         (18,345

Grupo Mexico SAB de CV, Series B:

     

Strike Price MXN 43.07, Expires 12/05/12, Broker Citigroup Global Markets, Inc.

     436,000         (27,041

Strike Price MXN 42.33, Expires 12/19/12, Broker Credit Suisse First Boston

     454,500         (47,788

GSW Immobilien AG, Strike Price
EUR 31.21, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     28,300         (45,474

Hino Motors Ltd., Strike Price JPY 556.36, Expires 11/08/12, Broker Morgan Stanley & Co., Inc.

     350,000         (266,244

Honda Motor Co. Ltd., Strike Price
JPY 2,528.34, Expires 12/05/12, Broker Citigroup Global Markets, Inc.

     94,600         (142,126

HSBC Holdings Plc:

     

Strike Price GBP 5.96, Expires 12/12/12, Broker Morgan Stanley & Co., Inc.

     401,000         (142,274

Strike Price GBP 6.17, Expires 12/12/12, Broker Banc of America Securities

     96,300         (17,050

Iberdrola SA, Strike Price EUR 3.81, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     882,000         (268,833

International Business Machines Corp., Strike Price
USD 207.91, Expires 12/07/12, Broker Banc of America Securities

     4,900         (2,451

International Paper Co., Strike Price USD 37.01, Expires 11/09/12, Broker Morgan Stanley & Co., Inc.

     95,000         (14,554

JPMorgan Chase & Co., Strike Price USD 41, Expires 12/10/12, Broker Morgan Stanley & Co., Inc.

     48,000         (78,393

Keppel Corp. Ltd.:

     

Strike Price SGD 11.60, Expires 11/08/12, Broker Citigroup Global Markets, Inc.

     477,000         (435

Strike Price SGD 11.43, Expires 12/05/12, Broker UBS Securities LLC

     153,000         (6,904

KeyCorp:

     

Strike Price USD 8.98, Expires 11/12/12, Broker Morgan Stanley & Co., Inc.

     200,000         (2,563

Strike Price USD 9.17, Expires 12/05/12, Broker Banc of America Securities

     104,000         (4,439
 

 

See Notes to Financial Statements.

    
                 
58       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (continued)

 

 

BlackRock Global Opportunities Equity Trust (BOE)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

  

Kraft Foods Group, Inc.:

     

Strike Price USD 46.64, Expires 11/30/12, Broker Goldman Sachs & Co.

     53,000       $ (17,185

Strike Price USD 46.49, Expires 1/04/13, Broker Goldman Sachs & Co.

     50,000         (34,527

LVMH Moet Hennessy Louis Vuitton SA, Strike Price EUR 129.44, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     8,000         (16,071

Merck & Co., Inc., Strike Price USD 44, Expires 11/09/12, Broker Morgan Stanley & Co., Inc.

     92,000         (153,084

Merck KGaA, Strike Price EUR 101.51, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     19,100         (30,863

Monsanto Co., Strike Price USD 87.35, Expires 12/06/12, Broker Goldman Sachs & Co.

     28,500         (51,353

National Grid Plc:

     

Strike Price GBP 6.97, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     357,300         (93,667

Strike Price GBP 7.10, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     155,000         (26,373

ORIX Corp., Strike Price JPY 8,215.65, Expires 12/05/12, Broker UBS Securities LLC

     27,500         (95,438

Owens Corning:

     

Strike Price USD 32.57, Expires 12/10/12, Broker Morgan Stanley & Co., Inc.

     48,000         (95,321

Strike Price USD 32.97, Expires 1/10/13, Broker Goldman Sachs & Co.

     47,000         (109,977

PanAust Ltd., Strike Price AUD 3.25, Expires 11/08/12, Broker UBS Securities LLC

     391,500         (59,734

Pfizer, Inc., Strike Price USD 26.26, Expires 12/17/12, Broker Goldman Sachs & Co.

     170,000         (21,885

Roche Holding AG:

     

Strike Price CHF 180.34, Expires 11/28/12, Broker Citigroup Global Markets, Inc.

     20,300         (63,807

Strike Price CHF 186.73, Expires 11/28/12, Broker Citigroup Global Markets, Inc.

     16,500         (13,237

Rowan Cos. Plc, Class A:

     

Strike Price USD 34.91, Expires 12/12/12, Broker Goldman Sachs & Co.

     76,000         (19,307

Strike Price USD 34.91, Expires 1/10/13, Broker Goldman Sachs & Co.

     76,000         (39,209

Samsung Electronics Co. Ltd., Strike Price KRW 1,359,944.89, Expires 11/08/12, Broker Goldman
Sachs & Co.

     2,600         (20,282

Sanofi:

     

Strike Price EUR 68.74, Expires 11/28/12, Broker Citigroup Global Markets, Inc.

     44,600         (34,339

Strike Price EUR 69.85, Expires 11/28/12, Broker Citigroup Global Markets, Inc.

     32,200         (15,721
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

  

Seadrill Ltd.:

     

Strike Price NOK 229.99, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     65,300       $ (44,184

Strike Price NOK 236.05, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     71,800         (23,993

Softbank Corp., Strike Price
JPY 2,667.06, Expires 12/05/12, Broker Citigroup Global Markets, Inc.

     91,900         (166,763

SPX Corp., Strike Price USD 65.44, Expires 12/13/12, Broker Goldman Sachs & Co.

     29,500         (138,816

Statoil ASA:

     

Strike Price NOK 148.37, Expires 11/28/12, Broker Banc of America Securities

     30,200         (2,458

Strike Price NOK 148.39, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     245,600         (19,884

Subsea 7 SA:

     

Strike Price NOK 133.75, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     130,000         (33,767

Strike Price NOK 129.30, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     91,900         (56,314

Strike Price NOK 136.55, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     128,700         (36,215

Svenska Cellulosa AB, B Shares:

     

Strike Price SEK 122.70, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     289,400         (337,799

Strike Price SEK 128.28, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     93,500         (58,423

Taiwan Semiconductor Manufacturing Co. Ltd. - ADR:

     

Strike Price USD 15.61, Expires 11/12/12, Broker Banc of America Securities

     48,000         (18,352

Strike Price USD 15.47, Expires 12/11/12, Broker Credit Suisse First Boston

     53,000         (34,763

Technip SA, Strike Price EUR 89.81, Expires 11/13/12, Broker Citigroup Global Markets, Inc.

     47,900         (56,885

Telefonica SA, Strike Price EUR 10.65, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     109,500         (10,527

Teradata Corp., Strike Price USD 68.69, Expires 12/10/12, Broker Goldman Sachs & Co.

     45,500         (137,014

Time Warner, Inc.:

     

Strike Price USD 41.86, Expires 11/07/12, Broker Citigroup Global Markets, Inc.

     47,000         (78,404

Strike Price USD 46.19, Expires 12/03/12, Broker Banc of America Securities

     52,000         (8,076
 

 

See Notes to Financial Statements.

    
                 
      ANNUAL REPORT       OCTOBER 31, 2012    59


 

 

Schedule of Investments (continued)

 

 

BlackRock Global Opportunities Equity Trust (BOE)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

  

Tokio Marine Holdings, Inc., Strike Price JPY 2,156.29, Expires 12/05/12, Broker Citigroup Global Markets, Inc.

     149,700       $ (215,372

The Toronto-Dominion Bank, Strike Price CAD 83.35, Expires 12/11/12, Broker Citigroup Global Markets, Inc.

     31,800         (19,226

Tullow Oil Plc, Strike Price GBP 14.80, Expires 12/19/12, Broker UBS Securities LLC

     150,000         (69,303

Unilever Plc, Strike Price GBP 23.24, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     73,300         (28,269

United Rentals, Inc., Strike Price USD 40.31, Expires 1/08/13, Broker Citigroup Global Markets, Inc.

     131,000         (444,859

Verizon Communications, Inc., Strike Price USD 43.06, Expires 11/30/12, Broker Morgan Stanley & Co., Inc.

     10,000         (17,895

Vertex Pharmaceuticals, Inc., Strike Price USD 50.84, Expires 12/07/12, Broker Banc of America Securities

     45,800         (71,972

Visa, Inc., Class A, Strike Price USD 141.73, Expires 12/11/12, Broker UBS Securities LLC

     19,000         (50,379

Vodafone Group Plc - ADR:

     

Strike Price USD 29.09, Expires 11/26/12, Broker Banc of America Securities

     101,000         (1,961

Strike Price USD 29.09, Expires 12/07/12, Broker Banc of America Securities

     101,000         (4,190

Volkswagen AG, Preference Shares:

     

Strike Price EUR 151.73, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     15,400         (169,225

Strike Price EUR 156.05, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     6,500         (43,208
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (concluded)

  

  

Volvo AB, B Shares:

     

Strike Price SEK 96.80, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     173,000       $ (6,994

Strike Price SEK 89.44, Expires 12/12/12, Broker UBS Securities LLC

     130,500         (49,235

Wells Fargo & Co., Strike Price USD 34.57, Expires 12/04/12, Broker UBS Securities LLC

     182,500         (88,068

Wharf Holdings Ltd.:

     

Strike Price HKD 53.05, Expires 12/05/12, Broker UBS Securities LLC

     298,000         (69,977

Strike Price HKD 54.09, Expires 12/18/12, Broker Banc of America Securities

     288,000         (57,593

Yahoo! Japan Corp., Strike Price JPY 27,130.95, Expires 11/08/12, Broker UBS Securities LLC

     6,500         (81,388

 

 

Total Over-the-Counter Call Options

  

     (7,699,792

 

 

Total Options Written

     

(Premiums Received – $14,301,483) – (1.1)%

  

     (11,619,050

 

 

Total Investments Net of Options Written – 99.0%

  

     1,031,280,469   

Other Assets Less Liabilities – 1.0%

  

     9,929,539   
     

 

 

 

Net Assets – 100.0%

      $ 1,041,210,008   
     

 

 

 

 

(a) All or a portion of security has been pledged/segregated as collateral in connection with outstanding options written.
(b) Non-income producing security.
(c) Represents the current yield as of report date.
 

 

(d) Investments in issuers considered to be an affiliate of the Trust during the year ended October 31, 2012, for purposes of Section 2(a)(3) of the Investment Company Act of 1940 were as follows:

 

Affiliate   

Shares/
Beneficial Interest
Held at
October 31,

2011

    

Net

Activity

    

Shares/
Beneficial Interest
Held at
October 31,

2012

     Realized
Gain
   Income  

BlackRock Liquidity Funds, TempFund, Institutional Class

     30,113,366         24,848,416         54,961,782       $973    $ 72,041   

BlackRock Liquidity Series, LLC Money Market Series

                              $ 37,365   

 

See Notes to Financial Statements.

    
                 
60       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (continued)

 

 

BlackRock Global Opportunities Equity Trust (BOE)

 

 

Foreign currency exchange contracts as of October 31, 2012 were as follows:

 

 

 

 
Currency
Purchased
    Currency
Sold
    Counterparty   Settlement
Date
    Unrealized
Depreciation
 

 

 

 
USD 1,406,440      GBP  875,000      Citigroup Global Markets, Inc.     11/01/12      $ (5,602
USD 494,715      GBP  307,000      RBS Securities, Inc.     11/02/12        (710

 

 

 
  Total            $ (6,312
       

 

 

 

 

 

Fair Value Measurements – Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows:

 

   

Level 1 - unadjusted price quotations in active markets/exchanges for identical assets and liabilities that the Trust has the ability to access

 

   

Level 2 - other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

   

Level 3 - unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments and derivative financial instruments)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing

transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy as of October 31, 2012:

 

 

 
    Level 1     Level 2     Level 3   Total  

 

 

Assets:

       

Investments:

       

Long-Term Investments:

       

Common Stocks:

       

Argentina

  $
4,173,803
  
           $ 4,173,803   

Australia

    13,461,822      $ 10,109,509          23,571,331   

Belgium

           8,593,806          8,593,806   

Bermuda

    5,329,800                 5,329,800   

Brazil

    6,980,187                 6,980,187   

Canada

    10,708,807                 10,708,807   

Cayman Islands

    6,467,536                 6,467,536   

China

           12,777,460          12,777,460   

France

           43,329,580          43,329,580   

Germany

    8,019,000        44,152,914          52,171,914   

Hong Kong

           18,137,362          18,137,362   

India

           9,238,273          9,238,273   

Indonesia

    3,836,001        12,983,553          16,819,554   

Ireland

    14,856,804                 14,856,804   

Italy

           13,132,262          13,132,262   

Japan

    4,071,809        27,694,481          31,766,290   

Mexico

    10,574,450        6,575,429          17,149,879   

Norway

           22,448,474          22,448,474   

Singapore

           9,962,044          9,962,044   

South Korea

           5,820,182          5,820,182   

Spain

           10,936,946          10,936,946   

Sweden

    3,966,788        21,016,595          24,983,383   

Switzerland

           20,865,611          20,865,611   

Taiwan

    2,920,830        9,908,548          12,829,378   

Thailand

           4,745,398          4,745,398   

United Kingdom

    18,855,850        102,504,494          121,360,344   

United States

    458,781,329                 458,781,329   

Short-Term Securities

    54,961,782                 54,961,782   

 

 

Total

  $ 627,966,598        $414,932,921        $ 1,042,899,519   
 

 

 

 
 

 

See Notes to Financial Statements.

                 
      ANNUAL REPORT       OCTOBER 31, 2012    61


 

 

Schedule of Investments (concluded)

 

 

BlackRock Global Opportunities Equity Trust (BOE)

 

 

     Level 1    Level 2    Level 3    Total

 

Derivative Financial Instruments1

           

Liabilities:

           

Equity contracts

   $(2,918,522)    $(8,700,528)       $(11,619,050)

Foreign currency exchange
contracts

   (6,312)          (6,312)

 

  

 

Total

   $(2,924,834)    $(8,700,528)       $(11,625,362)
  

 

 

1

Derivative financial instruments are foreign currency exchange contracts and options. Foreign currency exchange contracts are valued at the unrealized appreciation/depreciation on the instrument and options are shown at value.

Certain of the Trust’s assets are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2012, such assets are categorized within the disclosure hierarchy as follows:

 

 

     Level 1    Level 2    Level 3    Total

 

Assets:

           

Cash

   $456,943          $456,943

Foreign currency at value

   10,052,554          10,052,554

Cash pledged as collateral for options written

   410,000          410,000

 

Total

   $10,919,497          $10,919,497
  

 

There were no transfers between levels during the year ended October 31, 2012.

    

 

 

See Notes to Financial Statements.

                 
62       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments October 31, 2012

 

 

BlackRock Health Sciences Trust (BME)

(Percentages shown are based on Net Assets)

 

Common Stocks    Shares      Value  

 

 

Biotechnology – 22.0%

  

3SBio, Inc. - ADR (a)

     19,131       $ 256,547   

Achillion Pharmaceuticals, Inc. (a)(b)

     23,385         220,754   

Alexion Pharmaceuticals, Inc. (a)(b)

     51,860         4,687,107   

Alnylam Pharmaceuticals, Inc. (a)(b)

     25,336         409,683   

Amgen, Inc. (b)

     112,900         9,770,932   

Ariad Pharmaceuticals, Inc. (a)(b)

     100,896         2,174,309   

BioMarin Pharmaceutical, Inc. (a)(b)

     46,200         1,711,248   

Celgene Corp. (a)

     105,500         7,735,260   

Celldex Therapeutics, Inc. (a)

     17,118         94,320   

ChemoCentryx, Inc. (a)

     17,053         192,528   

CSL Ltd.

     30,375         1,498,124   

Cubist Pharmaceuticals, Inc. (a)(b)(c)

     43,400         1,861,860   

Exelixis, Inc. (a)(b)(c)

     73,300         348,175   

Genmab A/S (a)

     32,821         457,002   

Gilead Sciences, Inc. (a)(b)

     92,211         6,192,891   

Incyte Corp. Ltd. (a)(c)

     64,700         1,032,612   

Infinity Pharmaceuticals, Inc. (a)(b)

     40,800         913,512   

Intercept Pharmaceuticals, Inc. (a)

     7,400         137,566   

Medivation, Inc. (a)(b)

     48,095         2,458,616   

Momenta Pharmaceuticals, Inc. (a)(c)

     40,500         513,540   

Pharmacyclics, Inc. (a)(b)

     27,700         1,691,639   

Puma Biotechnology, Inc. (a)

     17,200         354,320   

Seattle Genetics, Inc. (a)(b)

     85,500         2,151,180   

Verastem, Inc. (a)

     16,500         131,010   

Vertex Pharmaceuticals, Inc. (a)

     21,005         1,013,281   
     

 

 

 
        48,008,016   

 

 

Chemicals – 0.5%

  

Sigma-Aldrich Corp. (b)

     14,900         1,045,086   

 

 

Diversified Consumer Services – 0.6%

  

Service Corp. International

     41,400         581,256   

Stewart Enterprises, Inc., Class A

     94,200         731,934   
     

 

 

 
        1,313,190   

 

 

Food & Staples Retailing – 1.2%

  

Brazil Pharma SA

     104,000         632,382   

CVS Caremark Corp. (b)

     44,000         2,041,600   
     

 

 

 
        2,673,982   

 

 

Health Care Equipment & Supplies – 12.8%

  

Align Technology, Inc. (a)(b)(c)

     18,819         500,209   

ArthroCare Corp. (a)

     41,800         1,257,344   

Baxter International, Inc. (b)

     60,800         3,807,904   

The Cooper Cos., Inc. (b)

     34,900         3,349,702   

Covidien Plc

     63,600         3,494,820   

Cyberonics, Inc. (a)

     13,620         629,925   

DENTSPLY International, Inc.

     32,200         1,186,248   

Given Imaging Ltd. (a)(b)

     25,329         458,455   

Intuitive Surgical, Inc. (a)(b)(c)

     4,907         2,660,674   

Medtronic, Inc. (b)

     32,200         1,338,876   

ResMed, Inc. (b)

     40,000         1,597,600   

Sirona Dental Systems, Inc. (a)(b)

     50,600         2,897,356   

Stryker Corp. (b)

     46,300         2,435,380   

Thoratec Corp. (a)(b)

     35,200         1,256,640   

Zimmer Holdings, Inc.

     18,800         1,207,148   
     

 

 

 
        28,078,281   

 

 
Common Stocks    Shares      Value  

 

 

Health Care Providers & Services – 19.4%

  

Aetna, Inc. (b)

     53,411       $ 2,334,061   

AMERIGROUP Corp. (a)

     8,300         758,122   

AmerisourceBergen Corp. (b)

     30,600         1,206,864   

Brookdale Senior Living, Inc. (a)(b)

     85,300         2,001,138   

Capital Senior Living Corp. (a)

     59,564         957,789   

Cardinal Health, Inc.

     72,700         2,990,151   

Catamaran Corp. (a)(b)

     74,600         3,518,136   

CIGNA Corp. (b)

     33,500         1,708,500   

Express Scripts Holding Co. (a)(b)

     114,676         7,057,161   

HCA Holdings, Inc. (b)

     39,900         1,133,559   

Henry Schein, Inc. (a)(b)(c)

     16,500         1,217,370   

Humana, Inc. (b)

     20,543         1,525,729   

Laboratory Corp. of America Holdings (a)(b)

     12,600         1,067,598   

McKesson Corp. (b)

     25,000         2,332,750   

Quest Diagnostics, Inc. (b)

     31,149         1,797,920   

Team Health Holdings, Inc. (a)(b)

     37,085         986,832   

UnitedHealth Group, Inc.

     85,834         4,806,704   

Universal Health Services, Inc., Class B (b)

     43,900         1,817,021   

VCA Antech, Inc. (a)(c)

     82,642         1,618,130   

WellPoint, Inc. (b)

     24,900         1,525,872   
     

 

 

 
        42,361,407   

 

 

Health Care Technology – 0.5%

  

Cerner Corp. (a)(b)(c)

     14,400         1,097,136   

 

 

Industrial Conglomerates – 0.6%

  

Koninklijke Philips Electronics NV

     54,433         1,363,325   

 

 

Life Sciences Tools & Services – 5.6%

  

Agilent Technologies, Inc. (b)

     65,000         2,339,350   

ICON Plc - ADR (a)

     54,700         1,287,638   

Illumina, Inc. (a)(b)

     26,300         1,249,513   

Life Technologies Corp. (a)(b)

     41,200         2,015,092   

Luminex Corp. (a)

     19,553         314,412   

Mettler-Toledo International, Inc. (a)(b)

     4,333         733,880   

Thermo Fisher Scientific, Inc. (b)

     38,600         2,356,916   

Waters Corp. (a)

     22,615         1,850,133   
     

 

 

 
        12,146,934   

 

 

Pharmaceuticals – 36.1%

  

Abbott Laboratories (b)

     49,200         3,223,584   

Allergan, Inc.

     49,100         4,415,072   

AstraZeneca Plc

     23,100         1,071,266   

Bayer AG (b)

     16,100         1,403,801   

Bristol-Myers Squibb Co. (b)

     54,900         1,825,425   

Elan Corp. Plc - ADR (a)

     95,800         1,034,640   

Eli Lilly & Co. (b)

     208,700         10,149,081   

Forest Laboratories, Inc. (a)(b)

     35,400         1,193,334   

Hospira, Inc. (a)(b)(c)

     42,500         1,304,325   

Johnson & Johnson (b)

     120,770         8,552,931   

Merck & Co., Inc. (b)

     163,000         7,437,690   

Merck KGaA

     9,000         1,151,129   

Mylan, Inc. (a)(b)

     50,400         1,277,136   

Novartis AG (b)

     59,600         3,593,914   

Perrigo Co. (b)

     20,900         2,403,709   

Pfizer, Inc. (b)

     367,300         9,134,751   

Roche Holding AG

     36,900         7,107,870   
 

 

See Notes to Financial Statements.

                 
      ANNUAL REPORT       OCTOBER 31, 2012    63


 

 

Schedule of Investments (continued)

 

 

BlackRock Health Sciences Trust (BME)

(Percentages shown are based on Net Assets)

 

Common Stocks    Shares      Value  

 

 

Pharmaceuticals (concluded)

  

Sanofi

     74,600       $ 6,551,893   

Teva Pharmaceutical Industries Ltd. - ADR (b)

     21,800         881,156   

UCB SA (b)

     19,800         1,156,464   

Valeant Pharmaceuticals International, Inc. (a)

     29,000         1,621,970   

Watson Pharmaceuticals, Inc. (a)

     27,800         2,389,410   
     

 

 

 
        78,880,551   

 

 

Total Long-Term Investments

  

  

(Cost – $ 185,023,611) – 99.3%

  

     216,967,908   

 

 

    

     
          

 

Short-Term Securities

     

 

 

BlackRock Liquidity Funds, TempFund, Institutional Class, 0.17% (d)(f)

     4,024,895         4,024,895   

 

 
     Beneficial
Interest
(000)
        

 

 

BlackRock Liquidity Series, LLC Money Market
Series, 0.31% (d)(e)(f)

   $ 4,186         4,185,923   

 

 

Total Short-Term Securities

(Cost – $ 8,210,818) – 3.8%

  

  

     8,210,818   

 

 

Total Investments Before Options Written

(Cost – $ 193,234,429) – 103.1%

  

  

     225,178,726   

 

 

    

     
          
Options Written    Contracts         

 

 

Exchange-Traded Call Options – (0.8)%

  

Abbott Laboratories:

     

Strike Price USD 66, Expires 11/17/12

     210         (14,688

Strike Price USD 70, Expires 11/19/12

     100         (650

Achillion Pharmaceuticals, Inc., Strike Price USD 12.50, Expires 11/19/12

     80         (600

Aetna, Inc., Strike Price USD 39, Expires 11/19/12

     160         (77,600

Agilent Technologies, Inc., Strike Price USD 41, Expires 1/21/13

     160         (5,280

Alexion Pharmaceuticals, Inc., Strike Price USD 105, Expires 11/19/12

     255         (4,463

Align Technology, Inc., Strike Price USD 38.10, Expires 12/04/12

     146         (9

Alnylam Pharmaceuticals, Inc., Strike Price USD 20, Expires 12/04/12

     80         (177

AmerisourceBergen Corp., Strike Price USD 39, Expires 11/19/12

     90         (9,000

Amgen, Inc.:

     

Strike Price USD 82, Expires 11/02/12

     340         (154,294

Strike Price USD 83.50, Expires 11/17/12

     55         (18,725

Ariad Pharmaceuticals, Inc., Strike Price USD 20, Expires 11/19/12

     450         (82,125

Baxter International, Inc.:

     

Strike Price USD 57.50, Expires 11/19/12

     90         (46,575

Strike Price USD 62.50, Expires 11/19/12

     90         (8,415

Bayer AG, Strike Price EUR 68, Expires 11/16/12

     50         (5,738
Options Written    Contracts      Value  

 

 

Exchange-Traded Call Options (continued)

  

BioMarin Pharmaceutical, Inc.:

     

Strike Price USD 39, Expires 11/19/12

     100       $ (26,500

Strike Price USD 40, Expires 11/19/12

     53         (12,058

Bristol-Myers Squibb Co., Strike Price USD 34, Expires 11/19/12

     165         (3,465

Brookdale Senior Living, Inc.:

     

Strike Price USD 20, Expires 11/02/12

     215         (74,394

Strike Price USD 25, Expires 11/19/12

     40         (2,100

Catamaran Corp.:

     

Strike Price USD 45, Expires 11/08/12

     200         (46,321

Strike Price USD 50, Expires 11/19/12

     23         (2,645

Cerner Corp., Strike Price USD 80, Expires 11/19/12

     59         (3,098

CIGNA Corp., Strike Price USD 48, Expires 11/19/12

     100         (35,250

The Cooper Cos., Inc., Strike Price USD 85, Expires 11/19/12

     125         (135,625

Cubist Pharmaceuticals, Inc., Strike Price USD 50, Expires 11/19/12

     135         (1,350

CVS Caremark Corp., Strike Price USD 46, Expires 11/19/12

     130         (11,570

Eli Lilly & Co., Strike Price USD 52.50, Expires 11/19/12

     85         (808

Exelixis, Inc., Strike Price USD 6, Expires 12/24/12

     242         (7,865

Express Scripts Holding Co.:

     

Strike Price USD 60, Expires 11/19/12

     137         (36,579

Strike Price USD 62.50, Expires 11/19/12

     215         (27,842

Forest Laboratories, Inc., Strike Price USD 35, Expires 11/19/12

     117         (3,510

Gilead Sciences, Inc.:

     

Strike Price USD 57.50, Expires 11/19/12

     265         (259,700

Strike Price USD 65, Expires 11/19/12

     30         (9,450

Given Imaging Ltd., Strike Price USD 17.50, Expires 11/19/12

     75         (11,812

HCA Holdings, Inc.:

     

Strike Price USD 28.50, Expires 11/02/12

     45         (4,334

Strike Price USD 31.50, Expires 11/19/12

     75         (2,100

Henry Schein, Inc., Strike Price USD 80, Expires 11/09/12

     55         (3

Hospira, Inc., Strike Price USD 36.25, Expires 11/29/12

     120         (930

Humana, Inc., Strike Price USD 70, Expires 11/19/12

     65         (35,100

Illumina, Inc., Strike Price USD 52.50, Expires 11/19/12

     75         (3,562

Infinity Pharmaceuticals, Inc.:

     

Strike Price USD 18.60, Expires 11/13/12

     80         (30,395

Strike Price USD 25, Expires 11/19/12

     40         (1,800

Intuitive Surgical, Inc., Strike Price USD 530, Expires 11/05/12

     10         (19,491

Johnson & Johnson, Strike Price USD 70, Expires 11/19/12

     335         (42,545

Laboratory Corp. of America Holdings, Strike Price USD 92.50, Expires 11/19/12

     40         (1,000
 

 

See Notes to Financial Statements.

                 
64       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (continued)

 

 

BlackRock Health Sciences Trust (BME)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Exchange-Traded Call Options (concluded)

  

Life Technologies Corp., Strike Price USD 50, Expires 11/19/12

     120       $ (12,000

McKesson Corp., Strike Price USD 87.50, Expires 11/19/12

     140         (81,200

Medivation, Inc., Strike Price USD 49.13, Expires 11/02/12

     220         (44,422

Medtronic, Inc., Strike Price USD 41, Expires 11/19/12

     100         (10,600

Merck & Co., Inc.:

     

Strike Price USD 45.50, Expires 11/17/12

     120         (7,951

Strike Price USD 46, Expires 11/19/12

     150         (7,350

Mettler-Toledo International, Inc., Strike Price USD 169, Expires 11/05/12

     12         (2,454

Mylan, Inc., Strike Price USD 25, Expires 11/19/12

     150         (9,600

Novartis AG:

     

Strike Price CHF 57, Expires 11/16/12

     75         (3,379

Strike Price CHF 57, Expires 12/21/12

     17         (1,545

Strike Price CHF 60, Expires 12/21/12

     27         (395

Perrigo Co., Strike Price USD 110, Expires 11/19/12

     65         (38,350

Pfizer, Inc.:

     

Strike Price USD 24, Expires 11/19/12

     450         (43,650

Strike Price USD 25, Expires 11/19/12

     675         (22,613

Pharmacyclics, Inc., Strike Price USD 65, Expires 11/19/12

     170         (25,925

Quest Diagnostics, Inc., Strike Price USD 60, Expires 11/19/12

     100         (3,000

ResMed, Inc.:

     

Strike Price USD 37, Expires 11/02/12

     50         (14,685

Strike Price USD 40.50, Expires 11/02/12

     130         (1,175

Seattle Genetics, Inc.:

     

Strike Price USD 30, Expires 11/19/12

     100         (1,750

Strike Price USD 25, Expires 12/24/12

     75         (14,812

Strike Price USD 30, Expires 12/24/12

     120         (5,700

Sigma-Aldrich Corp., Strike Price USD 74.50, Expires 11/12/12

     50         (191

Sirona Dental Systems, Inc.:

     

Strike Price USD 55, Expires 11/02/12

     60         (13,613

Strike Price USD 55, Expires 11/19/12

     62         (18,600

Strike Price USD 60, Expires 11/19/12

     45         (2,250

Stryker Corp., Strike Price USD 54, Expires 12/03/12

     165         (9,191

Team Health Holdings, Inc., Strike Price USD 30, Expires 1/21/13

     120         (9,600

Teva Pharmaceutical Industries
Ltd. - ADR, Strike Price USD 40, Expires 11/19/12

     45         (4,388

Thermo Fisher Scientific, Inc.:

     

Strike Price USD 57.25, Expires 11/17/12

     40         (15,437

Strike Price USD 60.70, Expires 11/17/12

     80         (9,598

Thoratec Corp., Strike Price USD 34, Expires 11/19/12

     115         (27,600

UCB SA, Strike Price EUR 44, Expires 11/16/12

     80         (12,079

Universal Health Services, Inc., Class B, Strike Price USD 45, Expires 11/19/12

     130         (2,275

WellPoint, Inc., Strike Price USD 62.50, Expires 11/19/12

     80         (13,240

 

 

Total Exchange-Traded Call Options

  

     (1,772,159

 

 
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options – (0.3)%

  

Allergan, Inc., Strike Price USD 87.14, Expires 11/05/12, Broker Credit Suisse First Boston

     16,000       $ (46,685

ArthroCare Corp., Strike Price USD 32.30, Expires 12/05/12, Broker Deutsche Bank Securities Corp.

     14,500         (4,202

AstraZeneca Plc, Strike Price GBP 29.37, Expires 11/06/12, Broker UBS Securities LLC

     7,400         (419

Brazil Pharma SA, Strike Price BRL 11.88, Expires 11/02/12, Broker UBS Securities LLC

     30,000         (7,157

Capital Senior Living Corp., Strike Price USD 14.67, Expires 12/05/12, Broker Banc of America Securities

     20,800         (31,231

Cardinal Health, Inc., Strike Price USD 40.77, Expires 11/05/12, Broker Morgan Stanley & Co., Inc.

     22,000         (9,730

Celgene Corp.:

     

Strike Price USD 78, Expires 11/01/12, Broker Goldman Sachs & Co.

     10,000           

Strike Price USD 71.56, Expires 11/05/12, Broker Deutsche Bank Securities Corp.

     25,500         (52,592

Covidien Plc, Strike Price USD 60, Expires 11/01/12, Broker Goldman Sachs & Co.

     16,000           

CSL Ltd., Strike Price AUD 47.72, Expires 12/05/12, Broker Morgan Stanley & Co., Inc.

     13,000         (14,049

Cyberonics, Inc., Strike Price USD 53, Expires 11/01/12, Broker Barclays Capital Inc.

     10,000           

DENTSPLY International, Inc., Strike Price USD 39.12, Expires 11/02/12, Broker UBS Securities LLC

     9,500           

Elan Corp. Plc - ADR, Strike Price USD 11.93, Expires 11/02/12, Broker Banc of America Securities

     31,600           

Eli Lilly & Co.:

     

Strike Price USD 47.50, Expires 11/01/12, Broker Barclays Capital Inc.

     22,500         (25,479

Strike Price USD 44, Expires 11/07/12, Broker Goldman Sachs & Co.

     32,000         (147,066

Genmab A/S, Strike Price DKK 82.05, Expires 1/03/13, Broker Citigroup Global Markets, Inc.

     19,000         (20,767

ICON Plc - ADR, Strike Price USD 24.69, Expires 11/09/12, Broker Banc of America Securities

     18,000         (263

Incyte Corp. Ltd., Strike Price USD 18.25, Expires 12/11/12, Broker Goldman Sachs & Co.

     20,000         (9,902

Koninklijke Philips Electronics NV, Strike Price EUR 19.06, Expires 11/06/12, Broker Morgan Stanley & Co., Inc.

     18,000         (8,511

Merck & Co., Inc.:

     

Strike Price USD 44, Expires 11/09/12, Broker Morgan Stanley & Co., Inc.

     16,000         (26,623

Strike Price USD 44.33, Expires 12/03/12, Broker UBS Securities LLC

     5,000         (8,256

Merck KGaA, Strike Price EUR 95.27, Expires 11/13/12, Broker Morgan Stanley & Co., Inc.

     3,000         (14,642
 

 

See Notes to Financial Statements.

                 
      ANNUAL REPORT       OCTOBER 31, 2012    65


 

 

Schedule of Investments (continued)

 

 

BlackRock Health Sciences Trust (BME)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

Momenta Pharmaceuticals, Inc., Strike Price USD 15.50, Expires 11/01/12, Broker Barclays Capital, Inc.

     13,500       $   

Roche Holding AG:

     

Strike Price CHF 178.79, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     4,700         (16,010

Strike Price CHF 175.84, Expires 11/13/12, Broker Morgan Stanley & Co., Inc.

     6,000         (36,090

Sanofi:

     

Strike Price EUR 69.16, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     17,200         (1,461

Strike Price EUR 68.63, Expires 11/13/12, Broker Morgan Stanley & Co., Inc.

     6,600         (2,243

Service Corp. International, Strike Price USD 13.92, Expires 11/08/12, Broker UBS Securities LLC

     13,500         (3,300

Stewart Enterprises, Inc., Class A, Strike Price USD 8.17, Expires 12/06/12, Broker UBS Securities LLC

     32,000         (3,337

Teva Pharmaceutical Industries
Ltd. - ADR, Strike Price USD 41.69, Expires 11/05/12, Broker Credit Suisse First Boston

     3,000         (155

UnitedHealth Group, Inc., Strike Price USD 54, Expires 12/03/12, Broker UBS Securities LLC

     26,000         (71,602

Valeant Pharmaceuticals International, Inc., Strike Price USD 58.40, Expires 12/06/12, Broker Goldman Sachs & Co. 8,500

        (19,959

VCA Antech, Inc., Strike Price
USD 20.50, Expires 12/04/12, Broker Morgan Stanley & Co., Inc.

     27,500         (6,247

Vertex Pharmaceuticals, Inc., Strike Price USD 58.50, Expires 11/01/12, Broker Barclays Capital Inc.

     21,000           
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (concluded)

  

Waters Corp., Strike Price USD 83.50, Expires 12/03/12, Broker Goldman Sachs & Co.

     5,300       $ (4,762)   

Watson Pharmaceuticals, Inc., Strike Price USD 83, Expires 12/04/12, Broker Goldman Sachs & Co.

     9,000         (34,128

Zimmer Holdings, Inc., Strike Price USD 63.38, Expires 11/05/12, Broker UBS Securities LLC

     10,800         (12,047

 

 

Total Over-the-Counter Call Options

        (638,915

 

 

Over-the-Counter Put Options – (0.3)%

  

Acorda Therapeutics, Inc., Strike Price USD 25.48, Expires 12/03/12, Broker Goldman Sachs & Co.

     67,900         (201,493

Protalix BioTherapeutics, Inc., Strike Price USD 5.50, Expires 11/23/12, Broker Barclays Capital Inc.

     113,170         (84,063

Vertex Pharmaceuticals, Inc., Strike Price USD 55, Expires 11/23/12, Broker Barclays Capital Inc.

     43,500         (302,695

 

 

Total Over-the-Counter Put Options

        (588,251

 

 

Total Options Written

(Premiums Received – $3,032,637) – (1.4)%

  

  

     (2,999,325

 

 

Total Investments Net of Options

Written – 101.7%

  

  

     222,179,401   

Liabilities in Excess of Other Assets – (1.7)%

  

     (3,802,407
     

 

 

 

Net Assets – 100.0%

      $ 218,376,994   
     

 

 

 

 

(a) Non-income producing security.
(b) All or a portion of security has been pledged/segregated as collateral in connection with outstanding options written.
(c) Security, or a portion of security, is on loan.
(d) Represents the current yield as of report date.
(e) Security was purchased with the cash collateral from loaned securities. The Trust may withdraw up to 25% of its investment daily, although the manager of the BlackRock Liquidity Series, LLC Money Market Series, in its sole discretion, may permit an investor to withdraw more than 25% on any one day.
 

 

(f) Investments in issuers considered to be an affiliate of the Trust during the year ended October 31, 2012, for purposes of Section 2(a)(3) of the Investment Company Act of 1940 were as follows:
Affiliate   

Shares/
Beneficial Interest
Held at
October 31,

2011

    

Net

Activity

    

Shares/
Beneficial Interest
Held at
October 31,

2012

     Realized
Gain
     Income  

 

 

BlackRock Liquidity Funds, TempFund,
Institutional Class

     7,801,065         (3,776,170      4,024,895         $178         $15,465   

BlackRock Liquidity Series, LLC Money
Market Series

     $7,320,205         $(3,134,282)         $4,185,923         –           $19,062   

 

 

Foreign currency exchange contracts as of October 31, 2012 were as follows:

 

Currency

Purchased

 

Currency

Sold

  Counterparty  

Settlement

Date

  Unrealized
Depreciation
 

CHF 1,336,283

  USD 1,436,020   The Bank of
New York

Mellon Corp.

  11/05/12     $ (1,062)   
 

For Trust compliance purposes, the Trust’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Trust management. These definitions may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease.

 

 

See Notes to Financial Statements.

    
                 
66       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (concluded)

 

 

BlackRock Health Sciences Trust (BME)

 

 

Fair Value Measurements – Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows:

 

   

Level 1 - unadjusted price quotations in active markets/exchanges for identical assets and liabilities that the Trust has the ability to access

 

   

Level 2 - other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

   

Level 3 - unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments and derivative financial instruments)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy as of October 31, 2012:

 

     Level 1   Level 2   Level 3   Total

Assets:

       

Investments:

       

Long-
Term
Investments:

       

Common
Stocks:

       

Biotechnology

  $  46,052,890   $  1,955,126     $  48,008,016

Chemicals

  1,045,086       1,045,086

Diversified
Consumer
Services

  1,313,190       1,313,190

Food &
Staples
Retailing

  2,673,982       2,673,982

Health Care Equipment &
Supplies

  28,078,281       28,078,281

Health
Care
Providers &
Services

  42,361,407       42,361,407

Health Care
Technology

  1,097,136       1,097,136

Industrial
Conglomerates

    1,363,325     1,363,325

Life Sciences
Tools &
Services

  12,146,934       12,146,934

Pharmaceuticals

  56,844,214   22,036,337     78,880,551

Short-Term Securities

  4,024,895   4,185,923     8,210,818

 

Total

  $195,638,015   $29,540,711     $225,178,726
 

 

 

     Level 1     Level 2     Level 3   Total  

Derivative Financial Instruments1

       

Liabilities:

       

Equity contracts

  $ (1,266,544   $ (1,732,781     $ (2,999,325

Foreign currency exchange
contracts

    (1,062              (1,062

 

 

Total

  $ (1,267,606   $ (1,732,781     $ (3,000,387
 

 

 

 

 

1 

Derivative financial instruments are foreign currency exchange contracts and options. Foreign currency exchange contracts are valued at the unrealized appreciation/depreciation on the instrument and options are shown at value.

Certain of the Trust’s assets and liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2012, such assets and liabilities are categorized within the disclosure hierarchy as follows:

 

      Level 1      Level 2     Level 3    Total  

Assets:

          

Foreign currency at value

   $ 1,807                 $ 1,807   

Liabilities:

          

Collateral on securities loaned at value

           $ (4,185,923        (4,185,923

Total

   $ 1,807       $ (4,185,923      $ (4,184,116
  

 

 

 

There were no transfers between levels during the year ended October 31, 2012.

 

 

See Notes to Financial Statements.

    
                 
      ANNUAL REPORT       OCTOBER 31, 2012    67


 

 

Schedule of Investments October 31, 2012

 

 

BlackRock International Growth and Income Trust (BGY)

(Percentages shown are based on Net Assets)

 

Common Stocks

     Shares         Value   

 

 

Argentina – 0.4%

  

Arcos Dorados Holdings, Inc.,
Class A (a)

     313,900       $ 4,052,449   

Australia – 4.3%

  

Australia & New Zealand Banking Group Ltd.

     485,800         12,816,079   

BHP Billiton Ltd. - ADR (a)

     284,700         20,139,678   

CSL Ltd.

     119,750         5,906,184   
                38,861,941   

Belgium – 0.9%

  

Anheuser-Busch InBev NV

     99,646         8,333,463   

Brazil – 1.5%

  

Banco Bradesco SA - ADR

     478,100         7,487,046   

BRF - Brasil Foods SA

     357,100         6,496,563   
     

 

 

 
                13,983,609   

Canada – 3.6%

  

Canadian Natural Resources Ltd.

     157,700         4,752,711   

Gildan Activewear, Inc. (a)

     100,200         3,412,067   

Manulife Financial Corp. (a)

     322,200         3,980,924   

Royal Bank of Canada (a)

     127,100         7,246,132   

Yamana Gold, Inc. (a)

     685,200         13,837,781   
     

 

 

 
                33,229,615   

Cayman Islands – 0.6%

  

Eurasia Drilling Co., Ltd. - GDR

     162,071         5,607,657   

China – 1.9%

  

China Construction Bank Corp., H Shares

     15,634,000         11,720,280   

Tencent Holdings Ltd.

     168,200         5,916,346   
     

 

 

 
                17,636,626   

Finland – 0.8%

  

Konecranes OYJ

     222,400         7,071,918   

France – 6.9%

  

AXA SA

     452,973         7,219,769   

BNP Paribas SA

     77,100         3,889,287   

Danone SA

     151,700         9,330,612   

LVMH Moet Hennessy Louis
Vuitton SA (a)

     33,700         5,478,948   

Publicis Groupe SA

     114,600         6,173,980   

Sanofi

     265,500         23,318,063   

Societe Generale SA (b)

     29,900         953,570   

Technip SA

     59,500         6,711,024   
     

 

 

 
                63,075,253   

Germany – 6.3%

  

BASF SE

     140,100         11,621,290   

Continental AG

     21,900         2,204,224   

Daimler AG

     111,700         5,232,542   

Deutsche Bank AG

     194,200         8,845,976   

Deutsche Lufthansa AG

     354,100         5,417,374   

Merck KGaA

     57,400         7,341,646   

SAP AG - ADR (a)

     95,400         6,954,660   

Volkswagen AG, Preference Shares

     46,100         9,571,501   
     

 

 

 
                57,189,213   

Gibraltar – 0.1%

  

Bwin.Party Digital Entertainment Plc

     430,299         835,965   

Common Stocks

     Shares         Value   

 

 

Hong Kong – 3.4%

  

AIA Group Ltd.

     4,925,400       $ 19,423,153   

Melco Crown Entertainment
Ltd. - ADR (a)(b)

     198,400         2,878,784   

Wharf Holdings Ltd.

     1,320,600         9,004,251   
     

 

 

 
                31,306,188   

India – 1.4%

  

ICICI Bank Ltd.

     238,500         4,641,510   

ICICI Bank Ltd. - ADR (a)

     115,500         4,533,375   

Jubilant Foodworks Ltd. (b)

     138,933         3,251,250   
     

 

 

 
                12,426,135   

Indonesia – 1.4%

  

Global Mediacom Tbk PT

     17,007,500         4,018,242   

Indofood Sukses Makmur Tbk PT

     8,960,300         5,301,711   

Tower Bersama Infrastructure
Tbk PT (b)

     5,954,100         3,092,607   
     

 

 

 
                12,412,560   

Ireland – 2.0%

  

Accenture Plc, Class A (a)

     88,800         5,986,007   

CRH Plc

     662,443         12,336,554   
     

 

 

 
                18,322,561   

Israel – 0.5%

  

Teva Pharmaceutical Industries
Ltd. - ADR (a)

     110,400         4,462,368   

Italy – 1.8%

  

Eni SpA

     697,000         16,038,525   

Japan – 6.0%

  

Honda Motor Co. Ltd.

     152,300         4,578,633   

JGC Corp.

     198,000         6,812,276   

Kubota Corp.

     788,800         8,065,557   

ORIX Corp.

     47,500         4,878,723   

Softbank Corp.

     173,200         5,470,054   

Sumitomo Mitsui Financial Group, Inc.

     279,000         8,525,404   

Tokio Marine Holdings, Inc.

     234,800         6,215,187   

Toyota Motor Corp.

     164,200         6,331,086   

Yahoo! Japan Corp.

     10,709         3,685,034   
     

 

 

 
                54,561,954   

Jersey, Channel Islands – 1.2%

  

Randgold Resources Ltd.

     88,400         10,567,198   

Malaysia – 0.4%

  

Astro Malaysia Holdings Bhd (b)

     4,111,900         3,658,322   

Mexico – 2.8%

  

Alpek SA de CV

     849,000         2,198,037   

Fomento Economico Mexicano SAB de

     

CV - ADR (a)

     105,400         9,550,294   

Fresnillo Plc

     350,000         10,865,912   

Grupo Financiero Santander Mexico SAB de CV, Series B - ADR (b)

     20,500         280,235   

Grupo Mexico SAB de CV, Series B

     685,000         2,197,190   
     

 

 

 
                25,091,668   

Netherlands – 2.1%

  

ASML Holding NV

     209,525         11,518,000   

NXP Semiconductors NV (b)

     181,100         4,393,486   

Ziggo NV

     103,000         3,336,232   
     

 

 

 
                19,247,718   

Norway – 0.9%

  

Seadrill Ltd.

     208,389         8,443,978   
 

 

See Notes to Financial Statements.

                 
68       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (continued)

 

 

BlackRock International Growth and Income Trust (BGY)

(Percentages shown are based on Net Assets)

 

Common Stocks    Shares      Value  

 

 

Singapore – 2.8%

  

Avago Technologies Ltd. (a)

     144,026       $ 4,757,179   

DBS Group Holdings Ltd.

     520,000         5,905,343   

Keppel Corp., Ltd.

     946,000         8,230,649   

Singapore Telecommunications Ltd.

     2,355,400         6,204,158   
     

 

 

 
        25,097,329   

 

 

South Africa – 0.6%

  

MTN Group Ltd.

     292,400         5,283,513   

 

 

South Korea – 1.5%

  

Samsung Electronics Co. Ltd.

     11,300         13,560,425   

 

 

Spain – 1.7%

  

Iberdrola SA

     1,391,400         7,205,967   

Red Electrica Corporacion SA

     93,078         4,364,238   

Telefonica SA

     294,400         3,885,706   
     

 

 

 
        15,455,911   

 

 

Sweden – 4.1%

  

Electrolux AB, Series B

     356,915         9,131,522   

Svenska Cellulosa AB, B Shares

     669,940         13,061,288   

Volvo AB, B Shares

     1,128,400         15,226,876   
     

 

 

 
        37,419,686   

 

 

Switzerland – 11.4%

  

Actelion Ltd.

     105,216         5,074,952   

GAM Holding AG

     975,600         13,644,150   

Nestle SA

     278,600         17,687,821   

Roche Holding AG

     143,200         27,583,931   

Sulzer AG

     31,500         4,559,433   

Swiss Re AG

     202,788         14,032,394   

Syngenta AG

     55,600         21,677,858   
     

 

 

 
        104,260,539   

 

 

Taiwan – 0.7%

  

Mega Financial Holding Co. Ltd.

     8,212,152         5,965,251   

 

 

Thailand – 0.4%

  

Charoen Pokphand Foods PCL

     3,403,000         3,913,728   

 

 

United Kingdom – 24.8%

  

Aberdeen Asset Management Plc

     1,432,387         7,512,744   

Antofagasta Plc

     305,665         6,218,535   

APR Energy Plc

     868,649         9,537,865   

Ashtead Group Plc

     794,508         4,799,884   

AstraZeneca Plc

     252,300         11,700,447   

Aveva Group Plc

     142,656         4,590,565   

Babcock International Group Plc

     148,400         2,345,839   

Barclays Plc - ADR (a)

     472,900         6,998,920   

British American Tobacco Plc

     283,100         14,041,755   

Clinigen Healthcare Ltd. (b)

     848,300         2,648,927   

De La Rue Plc

     313,871         5,368,077   

Diageo Plc

     304,700         8,710,991   

Direct Line Insurance Group (b)

     1,645,136         5,163,699   

Experian Plc

     785,423         13,588,690   

Hargreaves Lansdown Plc

     431,173         5,145,752   

HSBC Holdings Plc

     1,464,900         14,442,984   

Inchcape Plc

     657,620         4,276,828   

Intertek Group Plc

     155,500         7,088,086   
Common Stocks    Shares      Value  

 

 

United Kingdom (concluded)

  

Jardine Lloyd Thompson Group P

     381,200       $ 4,582,224   

National Grid Plc

     1,212,100         13,823,571   

Rexam Plc

     2,746,800         19,833,698   

Rotork Plc

     112,362         4,139,607   

SSE Plc

     500,800         11,713,416   

Subsea 7 SA

     524,594         11,500,178   

Tullow Oil Plc

     285,800         6,493,078   

Unilever Plc

     191,400         7,139,884   

Vodafone Group Plc - ADR

     445,100         12,115,622   
     

 

 

 
        225,521,866   

 

 

United States – 0.5%

  

Sirona Dental Systems, Inc. (a)(b)

     80,700         4,620,882   

 

 

Total Long-Term Investments

(Cost – $ 839,609,041) – 99.7%

        907,516,014   

 

 

     

     

Short-Term Securities

     

 

 

BlackRock Liquidity Funds, TempFund, Institutional Class, 0.17% (c)(d)

     11,164,990         11,164,990   

Total Short-Term Securities

(Cost – $ 11,164,990) – 1.2%

              11,164,990   

Total Investments Before Options Written

(Cost – $ 850,774,031) – 100.9%

        918,681,004   

 

 

     

     

Options Written

     Contracts      

 

 

Exchange-Traded Call Options – (0.1)%

  

  

Accenture Plc, Class A:

     

Strike Price USD 62.50,
Expires 11/19/12

     2         (1,020

Strike Price USD 67.50,
Expires 11/19/12

     5         (550

Strike Price USD 70,
Expires 1/21/13

     490         (85,750

Arcos Dorados Holdings, Inc., Class A, Strike Price USD 15,
Expires 11/19/12

     1,050         (10,500

Avago Technologies Ltd.:

     

Strike Price USD 37,
Expires 11/02/12

     125         –     

Strike Price USD 35,
Expires 11/19/12

     700         (19,250

Barclays Plc - ADR:

     

Strike Price USD 15,
Expires 11/19/12

     2,085         (78,188

Strike Price USD 15,
Expires 12/24/12

     275         (19,250

Strike Price USD 16,
Expires 12/24/12

     275         (9,625

BHP Billiton Ltd. - ADR, Strike Price USD 72.50, Expires 11/19/12

     1,560         (106,860

Fomento Economico Mexicano SAB de CV - ADR, Strike Price USD 90, Expires 11/05/12

     200         (23,025

Gildan Activewear, Inc., Strike Price CAD 32, Expires 11/19/12

     560         (122,793
 

 

See Notes to Financial Statements.

                 
      ANNUAL REPORT       OCTOBER 31, 2012    69


 

 

Schedule of Investments (continued)

 

 

BlackRock International Growth and Income Trust (BGY)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Exchange-Traded Call Options (concluded)

  

ICICI Bank Ltd. - ADR, Strike Price USD 41, Expires 11/19/12

     1,150       $ (41,400

LVMH Moet Hennessy Louis Vuitton SA, Strike Price EUR 130, Expires 11/16/12

     95         (7,699

Manulife Financial Corp., Strike Price CAD 12, Expires 11/19/12

     855         (43,660

Melco Crown Entertainment
Ltd. - ADR:

     

Strike Price USD 13, Expires 11/19/12

     560         (91,000

Strike Price USD 14, Expires 11/19/12

     555         (45,788

Royal Bank of Canada, Strike Price CAD 57, Expires 11/19/12

     30         (1,622

SAP AG - ADR:

     

Strike Price USD 75, Expires 11/19/12

     344         (23,220

Strike Price USD 72.40, Expires 12/14/12

     180         (47,572

Sirona Dental Systems, Inc., Strike Price USD 55, Expires 11/02/12

     450         (102,094

Teva Pharmaceutical Industries
Ltd. - ADR, Strike Price USD 40.75, Expires 12/07/12

     460         (40,806

Yamana Gold, Inc., Strike Price
CAD 19, Expires 11/19/12

     1,600         (212,265

 

 

Total Exchange-Traded Call Options

  

     (1,133,937

 

 

Over-the-Counter Call Options – (1.7)%

  

Aberdeen Asset Management Plc:

     

Strike Price GBP 2.85, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     427,800         (279,149

Strike Price GBP 3.24, Expires 12/12/12, Broker Morgan Stanley & Co., Inc.

     360,000         (46,098

Actelion Ltd., Strike Price CHF 46.06, Expires 12/05/12, Broker Banc of America Securities

     57,900         (31,724

AIA Group Ltd.:

     

Strike Price HKD 28.82, Expires 11/08/12, Broker Banc of America Securities

     280,000         (75,645

Strike Price HKD 29.08, Expires 11/08/12, Broker UBS Securities LLC

     1,539,400         (373,572

Strike Price HKD 30.15, Expires 12/05/12, Broker UBS Securities LLC

     889,600         (154,654

Alpek SA de CV, Strike Price MXN 35.20, Expires 11/13/12, Broker Citigroup Global Markets, Inc.

     476,400         (7,064

Anheuser-Busch InBev NV, Strike Price EUR 70.97, Expires 11/06/12, Broker Banc of America Securities

     57,900         (146

Antofagasta Plc:

     

Strike Price GBP 13.08, Expires 11/06/12, Broker Morgan Stanley & Co., Inc.

     103,000         (17,041

Strike Price GBP 13.39, Expires 11/28/12, Broker Citigroup Global Markets, Inc.

     66,000         (19,117
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

APR Energy Plc:

     

Strike Price GBP 6.45, Expires 11/06/12, Broker Morgan Stanley & Co., Inc.

     56,500       $ (32,390

Strike Price GBP 8.08, Expires 11/13/12, Broker Banc of America Securities

     58,200         (136

Strike Price GBP 8.28, Expires 11/21/12, Broker UBS Securities LLC

     42,900         (8

Strike Price GBP 8.28, Expires 11/27/12, Broker UBS Securities LLC

     42,900         (550

Strike Price GBP 7.69, Expires 12/03/12, Broker UBS Securities LLC

     31,800         (2,179

Strike Price GBP 8.28, Expires 12/05/12, Broker UBS Securities LLC

     42,900         (1,171

Strike Price GBP 7.69, Expires 12/07/12, Broker UBS Securities LLC

     31,800         (2,633

Strike Price GBP 7.78, Expires 12/12/12, Broker UBS Securities LLC

     46,100         (3,861

Strike Price GBP 7.78, Expires 12/19/12, Broker UBS Securities LLC

     46,100         (5,030

Strike Price GBP 7.78, Expires 1/03/13, Broker Banc of America Securities

     33,000         (5,300

Strike Price GBP 7.78, Expires 1/10/13, Broker Banc of America Securities

     33,000         (6,121

Arcos Dorados Holdings, Inc., Class A, Strike Price USD 15.51, Expires 12/07/12, Broker Citigroup Global Markets, Inc.

     71,000         (5,964

Ashtead Group Plc:

     

Strike Price GBP 2.83, Expires 11/06/12, Broker Barclays Capital Inc.

     195,500         (289,697

Strike Price GBP 3.40, Expires 11/06/12, Broker Deutsche Bank Securities Corp.

     46,000         (25,913

Strike Price GBP 3.48, Expires 12/12/12, Broker Citigroup Global Markets, Inc.

     195,500         (92,541

ASML Holding NV:

     

Strike Price EUR 41.36, Expires 11/06/12, Broker UBS Securities LLC

     21,000         (28,625

Strike Price EUR 48.60, Expires 11/06/12, Broker Morgan Stanley & Co., Inc.

     32,200         (6

Strike Price EUR 42.94, Expires 11/13/12, Broker Citigroup Global Markets, Inc.

     45,000         (33,596

Strike Price EUR 44.13, Expires 11/13/12, Broker Banc of America Securities

     19,800         (1,097
 

 

See Notes to Financial Statements.     
                 
70       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (continued)

 

 

BlackRock International Growth and Income Trust (BGY)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

  

AstraZeneca Plc:

     

Strike Price GBP 29.37,
Expires 11/06/12, Broker UBS Securities LLC

     75,400       $ (4,274

Strike Price GBP 29.88, Expires 11/06/12, Broker Morgan Stanley & Co., Inc.

     71,200         (876

Australia & New Zealand Banking
Group Ltd.,
Strike Price AUD 26.15, Expires 12/05/12, Broker Citigroup Global Markets, Inc.

     267,200         (21,495

Aveva Group Plc:

     

Strike Price GBP 18.96,
Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     7,300         (11,581

Strike Price GBP 19.34, Expires 11/06/12, Broker UBS Securities LLC

     52,000         (50,538

Strike Price GBP 20.20, Expires 11/13/12, Broker Morgan Stanley & Co., Inc.

     9,600         (2,861

Strike Price GBP 20.20, Expires 11/28/12, Broker Morgan Stanley & Co., Inc.

     9,600         (4,647

AXA SA:

     

Strike Price EUR 11.94, Expires 11/06/12, Broker Morgan Stanley & Co., Inc.

     164,300         (79,335

Strike Price EUR 11.96, Expires 12/07/12, Broker Morgan Stanley & Co., Inc.

     185,000         (128,085

Babcock International Group Plc:

     

Strike Price GBP 9.57, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     43,100         (15,858

Strike Price GBP 9.63, Expires 12/12/12, Broker Morgan Stanley & Co., Inc.

     38,500         (14,160

Banco Bradesco SA - ADR:

     

Strike Price USD 17.48, Expires 11/02/12, Broker Deutsche Bank Securities Corp.

     129,000         (1

Strike Price USD 15.99, Expires 12/11/12, Broker Credit Suisse First Boston

     134,000         (45,321

BASF SE:

     

Strike Price EUR 62.96, Expires 11/06/12, Broker Morgan Stanley & Co., Inc.

     14,500         (24,505

Strike Price EUR 69.39, Expires 11/06/12, Broker Morgan Stanley & Co., Inc.

     30,000         (405

Strike Price EUR 67.23, Expires 11/28/12, Broker Citigroup Global Markets, Inc.

     15,000         (8,165

Strike Price EUR 62.99, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     17,600         (50,761

BNP Paribas SA, Strike Price EUR 36.53, Expires 11/06/12, Broker Banc of America Securities

     44,900         (139,009
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

  

BRF - Brasil Foods SA, Strike Price BRL 33.72, Expires 11/05/12, Broker UBS Securities LLC

     207,400       $ (330,031

British American Tobacco Plc:

     

Strike Price GBP 32.56, Expires 11/06/12, Broker Morgan Stanley & Co., Inc.

     137,800         (1,434

Strike Price GBP 33.90, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     27,000         (18

Bwin.Party Digital Entertainment Plc, Strike Price GBP 1.12, Expires 11/28/12, Broker Morgan Stanley & Co., Inc.

     236,700         (49,466

Canadian Natural Resources Ltd., Strike Price CAD 32.80, Expires 12/04/12, Broker Goldman Sachs & Co.

     92,000         (33,913

China Construction Bank Corp.:

     

Strike Price HKD 5.81, Expires 12/05/12, Broker UBS Securities LLC

     6,284,000         (154,293

Strike Price HKD 5.87, Expires 12/05/12, Broker Banc of America Securities

     2,315,000         (71,970

Continental AG, Strike Price EUR 81.99, Expires 11/06/12, Broker Banc of America Securities

     12,700         (129

CRH Plc:

     

Strike Price GBP 11.66, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     58,700         (9,134

Strike Price GBP 11.46, Expires 11/13/12, Broker Banc of America Securities

     203,000         (72,845

Strike Price GBP 11.45, Expires 12/12/12, Broker Morgan Stanley & Co., Inc.

     102,600         (65,595

CSL Ltd.:

     

Strike Price AUD 43.59, Expires 11/08/12, Broker UBS Securities LLC

     40,200         (163,753

Strike Price AUD 47.72, Expires 12/05/12, Broker Morgan Stanley & Co., Inc.

     40,000         (43,227

Daimler AG, Strike Price EUR 42.85, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     64,900         (1

Danone SA, Strike Price EUR 50.92, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     86,200         (74

DBS Group Holdings Ltd., Strike Price SGD 14.59, Expires 11/08/12, Broker Citigroup Global Markets, Inc.

     292,000         (38

De La Rue Plc:

     

Strike Price GBP 10.35, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     57,500         (22,808

Strike Price GBP 10.35, Expires 11/13/12, Broker Citigroup Global Markets, Inc.

     57,500         (22,821

Strike Price GBP 10.35, Expires 11/21/12, Broker Citigroup Global Markets, Inc.

     57,500         (24,626
 

 

See Notes to Financial Statements.

    
                 
      ANNUAL REPORT       OCTOBER 31, 2012    71


 

 

Schedule of Investments (continued)

 

 

BlackRock International Growth and Income Trust (BGY)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

  

Deutsche Bank AG, Strike Price EUR 26.08, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     112,800       $ (1,324,663

Deutsche Lufthansa AG, Strike Price EUR 9.95, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     205,600         (495,287

Diageo Plc, Strike Price GBP 17.69, Expires 11/13/12, Broker Morgan Stanley & Co., Inc.

     177,000         (54,228

Electrolux AB, Series B:

     

Strike Price SEK 166.36, Expires 11/28/12, Broker Morgan Stanley & Co., Inc.

     102,000         (106,075

Strike Price SEK 170.14, Expires 11/28/12, Broker Morgan Stanley & Co., Inc.

     53,300         (39,438

Strike Price SEK 174.17, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     45,000         (21,847

Eni SpA:

     

Strike Price EUR 17.52, Expires 11/12/12, Broker Barclays Capital Inc.

     12,500         (5,348

Strike Price EUR 18.34, Expires 11/13/12, Broker Citigroup Global Markets, Inc.

     210,300         (16,439

Strike Price EUR 17.67, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     111,700         (67,733

Strike Price EUR 17.93, Expires 12/12/12, Broker Citigroup Global Markets, Inc.

     48,900         (23,288

Experian Plc:

     

Strike Price GBP 10.12, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     158,800         (153,995

Strike Price GBP 10.16, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     205,400         (185,794

Strike Price GBP 10.61, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     67,800         (21,268

Fomento Economico Mexicano SAB de CV - ADR:

     

Strike Price USD 92.70, Expires 11/29/12, Broker Citigroup Global Markets, Inc.

     34,000         (23,696

Strike Price USD 93.01, Expires 11/29/12, Broker UBS Securities LLC

     4,000         (3,337

Fresnillo Plc:

     

Strike Price GBP 16.32, Expires 11/06/12, Broker Barclays Capital Inc.

     47,000         (229,267

Strike Price GBP 16.35, Expires 11/06/12, Broker Deutsche Bank Securities Corp.

     47,000         (227,178

Strike Price GBP 17.01, Expires 11/06/12, Broker Morgan Stanley & Co., Inc.

     102,500         (397,923

GAM Holding AG, Strike Price
CHF 13.09, Expires 11/06/12, Broker Morgan Stanley & Co., Inc.

     547,500         (67,939

Grupo Mexico SAB de CV, Series B, Strike Price MXN 43.07, Expires 12/05/12, Broker Citigroup Global Markets, Inc.

     376,000         (23,320
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

  

Hargreaves Lansdown Plc, Strike Price GBP 6.36, Expires 11/13/12, Broker Morgan Stanley & Co., Inc.

     250,500       $ (479,906

Honda Motor Co. Ltd., Strike Price JPY 2,528.34, Expires 12/05/12, Broker Citigroup Global Markets, Inc.

     83,800         (125,900

HSBC Holdings Plc, Strike Price
GBP 5.46, Expires 11/13/12, Broker Morgan Stanley & Co., Inc.

     850,700         (886,322

Iberdrola SA, Strike Price EUR 3.81, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     766,000         (233,477

Inchcape Plc:

     

Strike Price GBP 3.91, Expires 11/13/12, Broker Citigroup Global Markets, Inc.

     138,000         (35,540

Strike Price GBP 3.59, Expires 11/28/12, Broker Citigroup Global Markets, Inc.

     223,700         (160,019

Intertek Group Plc:

     

Strike Price GBP 28.45, Expires 11/06/12, Broker UBS Securities LLC

     57,300         (23,860

Strike Price GBP 27.51, Expires 11/28/12, Broker Morgan Stanley & Co., Inc.

     28,300         (46,710

Jardine Lloyd Thompson Group Plc:

     

Strike Price GBP 7.72, Expires 11/16/12, Broker Morgan Stanley & Co., Inc.

     30,000         (885

Strike Price GBP 7.72, Expires 11/28/12, Broker Morgan Stanley & Co., Inc.

     30,000         (1,834

Strike Price GBP 7.70, Expires 12/03/12, Broker Morgan Stanley & Co., Inc.

     30,000         (2,431

Strike Price GBP 7.70, Expires 12/07/12, Broker Morgan Stanley & Co., Inc.

     30,000         (2,779

Strike Price GBP 7.68, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     40,000         (4,617

Strike Price GBP 7.68, Expires 12/19/12, Broker Deutsche Bank Securities Corp.

     40,000         (5,291

JGC Corp., Strike Price JPY 2,577.08, Expires 11/08/12, Broker UBS Securities LLC

     115,000         (313,868

Keppel Corp. Ltd.:

     

Strike Price SGD 11.60, Expires 11/08/12, Broker Citigroup Global Markets, Inc.

     387,000         (353

Strike Price SGD 11.43, Expires 12/05/12, Broker UBS Securities LLC

     133,000         (6,001

Konecranes OYJ:

     

Strike Price EUR 23.96, Expires 12/05/12, Broker Deutsche Bank Securities Corp.

     41,000         (73,597

Strike Price EUR 24.11, Expires 12/12/12, Broker Morgan Stanley & Co., Inc.

     40,400         (72,216

Strike Price EUR 23.96, Expires 12/19/12, Broker Deutsche Bank Securities Corp.

     41,000         (81,166
 

 

See Notes to Financial Statements.

    
                 
72       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (continued)

 

 

BlackRock International Growth and Income Trust (BGY)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

  

Kubota Corp., Strike Price JPY 776.20, Expires 11/08/12, Broker UBS Securities LLC

     458,000       $ (308,623

LVMH Moet Hennessy Louis Vuitton SA, Strike Price EUR 126.43, Expires 11/13/12, Broker Citigroup Global Markets, Inc.

     10,000         (15,674

Manulife Financial Corp., Strike Price CAD 12.48, Expires 12/11/12, Broker Morgan Stanley & Co., Inc.

     91,500         (32,527

Mega Financial Holding Co. Ltd., Strike Price TWD 23.35, Expires 11/08/12, Broker Deutsche Bank Securities Corp.

     4,769,000         (48

Merck KGaA, Strike Price EUR 95.27, Expires 11/13/12, Broker Morgan Stanley & Co., Inc.

     33,600         (163,988

MTN Group Ltd., Strike Price ZAR 160.49, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     160,900         (42,864

National Grid Plc:

     

Strike Price GBP 6.97, Expires 11/13/12, Broker Citigroup Global Markets, Inc.

     115,000         (23,892

Strike Price GBP 7.02, Expires 11/13/12, Broker Deutsche Bank Securities Corp.

     499,700         (82,396

Strike Price GBP 7.10, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     52,000         (8,848

Nestle SA:

     

Strike Price CHF 60.35, Expires 11/06/12, Broker UBS Securities LLC

     77,000         (4,669

Strike Price CHF 60.90, Expires 11/06/12, Broker Banc of America Securities

     79,000         (1,429

NXP Semiconductors NV:

     

Strike Price USD 27.10, Expires 11/26/12, Broker Citigroup Global Markets, Inc.

     48,000         (22,929

Strike Price USD 26.91, Expires 11/29/12, Broker Morgan Stanley & Co., Inc.

     51,600         (30,062

ORIX Corp., Strike Price JPY 8,215.65, Expires 12/05/12, Broker UBS Securities LLC

     26,200         (90,926

Publicis Groupe SA, Strike Price EUR 44.20, Expires 11/13/12, Broker Banc of America Securities

     66,700         (3,666

Randgold Resources Ltd., Strike Price GBP 78.48, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     48,700         (148,594

Red Electrica Corporacion SA, Strike Price EUR 38.93, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     51,000         (19,707

Rexam Plc:

     

Strike Price GBP 4.25, Expires 11/13/12, Broker Citigroup Global Markets, Inc.

     429,800         (155,199

Strike Price GBP 4.45, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     1,081,000         (131,503
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

  

Roche Holding AG:

     

Strike Price CHF 175.54, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     14,000       $ (89,085

Strike Price CHF 178.79, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     32,900         (112,073

Strike Price CHF 175.84, Expires 11/13/12, Broker Morgan Stanley & Co., Inc.

     33,500         (201,503

Rotork Plc:

     

Strike Price GBP 22.49, Expires 11/06/12, Broker Morgan Stanley & Co., Inc.

     16,200         (8,863

Strike Price GBP 23.03, Expires 11/06/12, Broker Morgan Stanley & Co., Inc.

     49,100         (6,677

Royal Bank of Canada, Strike Price
CAD 59.12, Expires 12/10/12, Broker Morgan Stanley & Co., Inc.

     70,000         (14,794

Samsung Electronics Co. Ltd.:

     

Strike Price KRW 1,343,799.80, Expires 11/08/12, Broker Citigroup Global Markets, Inc.

     3,750         (43,370

Strike Price KRW 1,359,944.89, Expires 11/08/12, Broker Goldman Sachs & Co.

     2,600         (20,282

Sanofi:

     

Strike Price EUR 66.50, Expires 11/06/12, Broker Banc of America Securities

     61,300         (99,895

Strike Price EUR 69.16, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     63,000         (5,352

Strike Price EUR 68.63, Expires 11/13/12, Broker Morgan Stanley & Co., Inc.

     24,700         (8,393

Scottish & Southern Energy Plc, Strike Price GBP 13.77, Expires 11/13/12, Broker UBS Securities LLC

     290,800         (338,169

Seadrill Ltd.:

     

Strike Price NOK 241.99, Expires 11/06/12, Broker Morgan Stanley & Co., Inc.

     95,845         (1,882

Strike Price NOK 229.99, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     18,800         (12,721

Singapore Telecommunications Ltd., Strike Price SGD 3.37, Expires 11/08/12, Broker Deutsche Bank Securities Corp.

     1,321,000         (975

Societe Generale SA, Strike Price EUR 24.53, Expires 11/13/12, Broker UBS Securities LLC

     17,500         (14,872

Softbank Corp., Strike Price JPY 2,667.06, Expires 12/05/12, Broker Citigroup Global Markets, Inc.

     95,300         (172,932
 

 

See Notes to Financial Statements.

    
                 
      ANNUAL REPORT       OCTOBER 31, 2012    73


 

 

Schedule of Investments (continued)

 

 

BlackRock International Growth and Income Trust (BGY)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

Subsea 7 SA:

     

Strike Price NOK 141.83, Expires 11/13/12, Broker Citigroup Global Markets, Inc.

     113,900       $ (1,874

Strike Price NOK 133.75, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     62,800         (16,312

Strike Price NOK 136.55, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     111,900         (31,487

Sulzer AG, Strike Price CHF 135.91, Expires 12/12/12, Broker UBS Securities LLC

     17,400         (54,986

Sumitomo Mitsui Financial Group, Inc.,
Strike Price JPY 2,446.93, Expires 12/05/12, Broker Morgan Stanley & Co., Inc.

     153,500         (112,996

Svenska Cellulosa AB, B Shares:

     

Strike Price SEK 118.73, Expires 11/06/12, Broker Morgan Stanley & Co., Inc.

     127,000         (209,141

Strike Price SEK 121.28, Expires 11/06/12, Broker UBS Securities LLC

     123,000         (153,778

Strike Price SEK 122.20, Expires 11/13/12, Broker Banc of America Securities

     169,800         (194,810

Strike Price SEK 122.70, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     112,800         (131,665

Swiss Re AG:

     

Strike Price CHF 61.96, Expires 11/06/12, Broker Morgan Stanley & Co., Inc.

     39,000         (139,075

Strike Price CHF 63.20, Expires 11/13/12, Broker Banc of America Securities

     58,200         (150,024

Strike Price CHF 64.54, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     14,400         (27,542

Syngenta AG:

     

Strike Price CHF 334.51, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     4,300         (132,036

Strike Price CHF 348.07, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     9,800         (158,285

Strike Price CHF 353.42, Expires 11/28/12, Broker Citigroup Global Markets, Inc.

     7,000         (72,982

Strike Price CHF 349.46, Expires 12/05/12, Broker Citigroup Global Markets, Inc.

     9,500         (139,501

Technip SA:

     

Strike Price EUR 89.25, Expires 11/06/12, Broker Deutsche Bank Securities Corp.

     22,600         (20,834

Strike Price EUR 89.69, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     10,000         (19,313
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

Telefonica SA, Strike Price EUR 10.65, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     162,000       $ (15,575

Tencent Holdings Ltd., Strike Price HKD 257.01, Expires 11/08/12, Broker Citigroup Global Markets, Inc.

     94,400         (189,973

Teva Pharmaceutical Industries Ltd. - ADR, Strike Price USD 41.69, Expires 11/05/12, Broker Credit Suisse First Boston

     15,000         (773

Tokio Marine Holdings, Inc., Strike Price JPY 2,156.29, Expires 12/05/12, Broker Citigroup Global Markets, Inc.

     129,200         (185,879

Toyota Motor Corp., Strike Price JPY 3,225.81, Expires 11/08/12, Broker UBS Securities LLC

     95,400         (24,797

Tullow Oil Plc, Strike Price GBP 14.05, Expires 11/13/12, Broker Citigroup Global Markets, Inc.

     160,400         (97,294

Unilever Plc, Strike Price GBP 22.94, Expires 11/13/12, Broker Morgan Stanley & Co., Inc.

     111,100         (32,203

Vodafone Group Plc - ADR:

     

Strike Price USD 29.09, Expires 11/26/12, Broker Banc of America Securities

     125,000         (2,427

Strike Price USD 29.09, Expires 12/07/12, Broker Banc of America Securities

     125,000         (5,186

Volkswagen AG, Preference Shares:

     

Strike Price EUR 149.71, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     8,100         (110,061

Strike Price EUR 149.23, Expires 11/13/12, Broker Banc of America Securities

     16,200         (230,245

Strike Price EUR 156.05, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     1,000         (6,647

Volvo AB, B Shares:

     

Strike Price SEK 88.89, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     558,400         (100,687

Strike Price SEK 89.44, Expires 12/12/12, Broker UBS Securities LLC

     62,300         (23,505

Wharf Holdings Ltd.:

     

Strike Price HKD 53.05, Expires 12/05/12, Broker UBS Securities LLC

     366,000         (85,945

Strike Price HKD 54.09, Expires 12/18/12, Broker Banc of America Securities

     361,000         (72,192

Yahoo! Japan Corp., Strike Price
JPY 27,130.95, Expires 11/08/12, Broker UBS Securities LLC

     6,300         (78,883
 

 

See Notes to Financial Statements.

                 
74       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (continued)

 

 

BlackRock International Growth and Income Trust (BGY)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

Yamana Gold, Inc.:

     

Strike Price CAD 15.97, Expires 11/09/12, Broker Deutsche Bank Securities Corp.

     95,000       $ (399,261

Strike Price CAD 19.66, Expires 12/11/12, Broker UBS Securities LLC

     121,900         (141,131
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (concluded)

  

Ziggo NV, Strike Price EUR 25.67, Expires 12/05/12, Broker Banc of America Securities

     56,700       $ (40,149

Total Over-the-Counter Call Options

              (15,302,752

Total Options Written

(Premiums Received – $14,333,012) – (1.8)%

  

  

     (16,436,689

 

 

Total Investments Net of Options Written – 99.1%

  

     902,244,315   

Other Assets Less Liabilities – 0.9%

  

     8,236,368   
     

 

 

 

Net Assets – 100.0%

      $ 910,480,683   
     

 

 

 

 

(a) All or a portion of security has been pledged/segregated as collateral in connection with outstanding options written.
(b) Non-income producing security.
(c) Represents the current yield as of report date.
 

 

(d) Investments in issuers considered to be an affiliate of the Trust during the year ended October 31, 2012, for purposes of Section 2(a)(3) of the Investment Company Act of 1940 were as follows:

 

Affiliate    Shares Held at
October 31,
2011
     Shares
Purchased
   Shares
Sold
    Shares Held at
October 31,
2012
     Realized
Gain
(Loss)
    Income  

BlackRock Liquidity Funds, TempFund, Institutional Class

     61,562,830            (50,397,840 )1      11,164,990         $667        $73,774   

iShares MSCI EAFE Index Fund

     660,000            (660,000           $ (3,106,953   $ 375,690   

 

1

Represents net shares sold.

 

 

Fair Value Measurements – Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows:

 

   

Level 1 - unadjusted price quotations in active markets/exchanges for identical assets and liabilities that the Trust has the ability to access

 

   

Level 2 - other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

   

Level 3 - unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments and derivative financial instruments)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

 

 

See Notes to Financial Statements.

                 
      ANNUAL REPORT       OCTOBER 31, 2012    75


 

 

Schedule of Investments (concluded)

 

 

BlackRock International Growth and Income Trust (BGY)

 

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy as of October 31, 2012:

 

      Level 1      Level 2      Level 3    Total  

Assets:

           

Investments:

           

Long-Term Investments:

           

Common Stocks:

           

Argentina

   $ 4,052,449                  $ 4,052,449   

Australia

     20,139,678       $ 18,722,263            38,861,941   

Belgium

             8,333,463            8,333,463   

Brazil

     13,983,609                    13,983,609   

Canada

     33,229,615                    33,229,615   

Cayman Islands

     5,607,657                    5,607,657   

China

             17,636,626            17,636,626   

Finland

             7,071,918            7,071,918   

France

     6,173,980         56,901,273            63,075,253   

Germany

     6,954,660         50,234,553            57,189,213   

Gibraltar

             835,965            835,965   

Hong Kong

     2,878,784         28,427,404            31,306,188   

India

     4,533,375         7,892,760            12,426,135   

Indonesia

             12,412,560            12,412,560   

Ireland

     18,322,561                    18,322,561   

Israel

     4,462,368                    4,462,368   

Italy

             16,038,525            16,038,525   

Japan

     3,685,034         50,876,920            54,561,954   

Jersey, Channel

           

Islands

             10,567,198            10,567,198   

Malaysia

     3,658,322                    3,658,322   

Mexico

     14,225,756         10,865,912            25,091,668   

Netherlands

     7,729,718         11,518,000            19,247,718   

Norway

             8,443,978            8,443,978   

Singapore

     4,757,179         20,340,150            25,097,329   

South Africa

             5,283,513            5,283,513   

South Korea

             13,560,425            13,560,425   

Spain

     4,364,238         11,091,673            15,455,911   

Sweden

     9,131,522         28,288,164            37,419,686   

Switzerland

     9,634,385         94,626,154            104,260,539   

Taiwan

             5,965,251            5,965,251   

Thailand

     3,913,728                    3,913,728   

United Kingdom

     26,927,168         198,594,698            225,521,866   

United States

     4,620,882                    4,620,882   

Short-Term Securities

     11,164,990                    11,164,990   

Total

   $ 224,151,658       $ 694,529,346          $ 918,681,004   
  

 

 

 
      Level 1     Level 2     Level 3    Total  

Derivative Financial
Instruments
1

   

Liabilities:

         

Equity contracts

   $ (912,740   $ (15,523,949      $ (16,436,689

 

1

Derivative financial instruments are options, which are shown at value.

Certain of the Trust’s assets are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2012, such assets are categorized within the disclosure hierarchy as follows:

 

      Level 1      Level 2    Level 3    Total  

Assets:

           

Cash

   $ 1,950,208             $ 1,950,208   

Foreign currency at value

     2,060,536               2,060,536   

Cash pledged as collateral for options
written

     5,391,000               5,391,000   

Total

   $ 9,401,744             $ 9,401,744   
  

 

 

 

Prior to April 30, 2012, only significant transfers between Level 1 and Level 2 were required to be disclosed. There were no significant transfers from the beginning of the period to April 30, 2012. For the interim period May 1, 2012 to October 31, 2012, all transfers between Level 1 and Level 2 are required to be disclosed. As of April 30, 2012, the Trust valued certain equity securities using unadjusted price quotations from an exchange. As of October 31, 2012, the Trust used observable inputs in determining the value of these securities. As a result, investments with a beginning of period value of $19,851,463 transferred from Level 1 to Level 2 in the disclosure hierarchy.

 

 

See Notes to Financial Statements.

                 
76       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments October 31, 2012

 

 

BlackRock Real Asset Equity Trust (BCF)

(Percentages shown are based on Net Assets)

 

Common Stocks    Shares      Value  

 

 

Chemicals – 12.2%

     

Agrium, Inc. (a)

     70,600       $ 7,451,124   

Air Products & Chemicals, Inc.

     95,500         7,404,115   

Celanese Corp., Series A (a)

     97,900         3,719,221   

The Dow Chemical Co.

     171,125         5,013,962   

E.I. du Pont de Nemours & Co.

     380,800         16,953,216   

Monsanto Co. (a)

     69,200         5,956,044   

The Mosaic Co. (a)

     19,900         1,041,566   

Olin Corp.

     180,800         3,749,792   

Potash Corp. of Saskatchewan, Inc. (a)

     187,700         7,577,449   

Praxair, Inc. (a)

     167,400         17,779,554   
     

 

 

 
                76,646,043   

Energy Equipment & Services – 4.7%

  

  

Atwood Oceanics, Inc. (a)(b)

     28,300         1,352,740   

Basic Energy Services, Inc. (a)(b)

     41,500         431,185   

Calfrac Well Services Ltd.

     15,300         350,962   

Core Laboratories NV (a)

     60,700         6,292,162   

Forum Energy Technologies, Inc. (a)(b)

     72,600         1,619,706   

Halliburton Co.

     73,100         2,360,399   

Key Energy Services, Inc. (b)

     268,800         1,757,952   

National Oilwell Varco, Inc.

     46,800         3,449,160   

Patterson-UTI Energy, Inc. (a)

     159,400         2,579,092   

Schlumberger Ltd. (a)

     53,400         3,712,902   

Seadrill Ltd.

     80,077         3,244,741   

Technip SA

     23,600         2,661,851   
     

 

 

 
                29,812,852   

Machinery – 4.2%

     

Caterpillar, Inc. (a)

     234,500         19,887,945   

Deere & Co. (a)

     74,700         6,382,368   
     

 

 

 
                26,270,313   

Metals & Mining – 41.8%

     

African Rainbow Minerals Ltd.

     254,750         5,341,663   

Agnico-Eagle Mines Ltd.

     97,550         5,510,600   

Alcoa, Inc. (a)

     269,450         2,309,186   

Allegheny Technologies, Inc.

     39,700         1,046,095   

Alumina Ltd.

     1,901,566         1,898,194   

Anglo American Platinum Ltd.

     50,444         2,345,113   

Anglo American Plc

     77,945         2,401,835   

Barrick Gold Corp. (a)

     91,700         3,713,850   

BHP Billiton Plc

     778,600         24,955,296   

Carpenter Technology Corp. (a)

     39,866         1,937,886   

Cia de Minas Buenaventura SA - ADR

     228,900         8,185,464   

Cliffs Natural Resources, Inc. (a)

     29,100         1,055,457   

Detour Gold Corp. (a)(b)

     131,900         3,716,311   

Eldorado Gold Corp. (a)

     328,500         4,854,728   

Eramet

     13,650         1,735,832   

First Quantum Minerals Ltd. (a)

     513,500         11,542,503   

Freeport-McMoRan Copper & Gold,
Inc. (a)

     117,400         4,564,512   

Fresnillo Plc

     475,000         14,746,595   

Glencore International Plc

     225,000         1,248,591   

Goldcorp, Inc. (a)

     159,150         7,198,356   

Harry Winston Diamond Corp. (a)(b)

     134,300         1,926,928   

IAMGOLD Corp. (a)

     243,500         3,778,974   

Iluka Resources Ltd.

     827,886         8,491,889   

Impala Platinum Holdings Ltd.

     370,200         6,674,486   

Industrias Penoles SAB de CV

     468,569         23,439,186   

Jiangxi Copper Co. Ltd., Class H

     1,434,500         3,685,724   

Kazakhmys Plc

     268,500         3,080,586   

Kinross Gold Corp.

     240,900         2,406,591   

Minsur SA

     3,846,986         3,488,488   

MMC Norilsk Nickel OJSC - ADR

     11,120         170,920   

Newcrest Mining Ltd.

     259,085         7,145,586   
Common Stocks    Shares      Value  

 

 

Metals & Mining (concluded)

  

  

Newmont Mining Corp. (a)

     61,550       $ 3,357,552   

OZ Minerals Ltd.

     544,459         4,619,768   

Rio Tinto Plc

     479,104         23,934,509   

Southern Copper Corp. (a)

     72,306         2,754,859   

Teck Resources Ltd., Class B (a)

     421,300         13,371,925   

United States Steel Corp. (a)(c)

     41,500         846,185   

Vale SA - ADR (a)

     718,300         13,159,256   

Vedanta Resources Plc

     432,700         7,950,519   

Xstrata Plc

     1,077,996         17,077,078   

Zijin Mining Group Co. Ltd., Class H

     5,565,731         2,236,528   
     

 

 

 
                263,905,604   

Oil, Gas & Consumable Fuels – 26.4%

  

  

Alpha Natural Resources, Inc. (a)(b)(c)

     391,712         3,356,972   

Anadarko Petroleum Corp. (a)

     45,200         3,110,212   

Angle Energy, Inc. (a)(b)

     178,800         671,339   

Apache Corp.

     89,100         7,373,025   

Bill Barrett Corp. (b)(c)

     86,600         1,984,006   

Bonanza Creek Energy, Inc. (a)(b)

     117,300         2,905,521   

Cenovus Energy, Inc.

     113,100         3,993,561   

Cheniere Energy, Inc. (a)(b)

     196,500         3,161,685   

Chesapeake Energy Corp. (a)

     195,800         3,966,908   

Chevron Corp. (a)

     69,000         7,604,490   

Cobalt International Energy, Inc. (a)(b)

     50,000         1,040,500   

Concho Resources, Inc. (a)(b)

     47,400         4,082,088   

CONSOL Energy, Inc. (a)

     245,979         8,648,622   

Continental Resources, Inc. (a)(b)

     43,100         3,097,166   

Crescent Point Energy Corp. (a)

     154,900         6,436,396   

Crew Energy, Inc. (a)(b)

     142,500         1,097,198   

DeeThree Exploration Ltd. (b)

     183,969         1,274,659   

Denbury Resources, Inc. (a)(b)

     312,100         4,784,493   

Energy XXI (Bermuda) Ltd. (a)

     123,500         4,087,850   

EOG Resources, Inc. (a)

     89,400         10,414,206   

EQT Corp.

     49,600         3,007,248   

Exxon Mobil Corp.

     43,800         3,993,246   

Gasco Energy, Inc. (b)

     579,700         81,216   

Hess Corp. (a)

     48,800         2,550,288   

James River Coal Co. (b)(c)

     159,500         799,095   

Kodiak Oil & Gas Corp. (b)

     186,400         1,722,336   

Long Run Exploration Ltd. (b)

     132,260         542,945   

Noble Energy, Inc. (a)

     74,000         7,030,740   

Occidental Petroleum Corp. (a)

     105,300         8,314,488   

Patriot Coal Corp. (b)(c)

     122,460         19,594   

Peabody Energy Corp. (a)

     172,300         4,807,170   

PetroChina Co. Ltd. - ADR (a)

     13,000         1,764,880   

Pioneer Natural Resources Co.

     35,100         3,708,315   

Plains Exploration & Production Co. (b)

     142,400         5,077,984   

Range Resources Corp. (a)

     95,600         6,248,416   

Rex Energy Corp. (b)

     122,900         1,627,196   

Rosetta Resources, Inc. (b)(c)

     69,000         3,176,760   

Royal Dutch Shell Plc,
Class A - ADR (a)

     57,600         3,944,448   

Southwestern Energy Co. (b)

     60,000         2,082,000   

Statoil ASA

     182,400         4,492,322   

Suncor Energy, Inc. (a)

     125,400         4,215,948   

Total SA - ADR (a)

     41,800         2,106,720   

Valero Energy Corp. (a)

     123,200         3,585,120   

Whiting Petroleum Corp. (b)

     206,100         8,660,322   
     

 

 

 
                166,649,694   

Paper & Forest Products – 5.2%

  

  

Fibria Celulose SA - ADR (b)(c)

     264,300         2,328,483   

International Paper Co.

     378,100         13,547,323   

MeadWestvaco Corp.

     459,100         13,630,679   
 

 

See Notes to Financial Statements.
                 
      ANNUAL REPORT       OCTOBER 31, 2012    77


 

 

Schedule of Investments (continued)

 

 

BlackRock Real Asset Equity Trust (BCF)

(Percentages shown are based on Net Assets)

 

Common Stocks

     Shares         Value   

 

 

Paper & Forest Products (concluded)

  

  

Mondi Plc

     322,512       $ 3,555,212   
     

 

 

 
                33,061,697   

Real Estate Investment Trusts (REITs) – 2.1%

  

  

Weyerhaeuser Co. (a)

     466,700         12,922,923   

Total Long-Term Investments

(Cost – $ 545,970,120) – 96.6%

              609,269,126   
     
     
     

Short-Term Securities

     

 

 

BlackRock Liquidity Funds, TempFund, Institutional Class, 0.17% (d)(f)

     26,727,621         26,727,621   
    

Beneficial
Interest

(000)

        

 

 

BlackRock Liquidity Series, LLC Money Market Series,
0.31% (d)(e)(f)

   $ 3,731         3,731,016   

Total Short-Term Securities

(Cost – $ 30,458,637) – 4.8%

              30,458,637   

Total Investments Before Options Written

(Cost – $ 576,428,757) – 101.4%

  

  

     639,727,763   
     
     
     

Options Written

     Contracts      

 

 

Exchange-Traded Call Options – (0.3)%

  

  

Agrium, Inc., Strike Price
USD 105, Expires 11/19/12

     235         (65,212

Alcoa, Inc., Strike Price
USD 9.25, Expires 12/07/12

     890         (7,465

Alpha Natural Resources, Inc.:

     

Strike Price USD 11, Expires 11/19/12

     215         (2,042

Strike Price USD 9, Expires 12/24/12

     900         (79,200

Anadarko Petroleum Corp., Strike Price USD 72.50, Expires 11/19/12

     160         (8,960

Angle Energy, Inc., Strike Price CAD 4.50, Expires 11/19/12

     590         (2,363

Atwood Oceanics, Inc., Strike Price USD 50, Expires 11/19/12

     94         (4,230

Barrick Gold Corp., Strike Price USD 43, Expires 11/19/12

     310         (8,370

Basic Energy Services, Inc., Strike Price USD 12.50, Expires 11/19/12

     135         (1,350

Bonanza Creek Energy, Inc., Strike Price USD 25, Expires 11/19/12

     110         (7,975

Carpenter Technology Corp., Strike Price USD 50, Expires 12/24/12

     132         (24,420

Caterpillar, Inc., Strike Price
USD 92.50, Expires 11/19/12

     774         (4,257

Celanese Corp., Series A, Strike Price USD 42.50, Expires 11/19/12

     325         (4,875

Cheniere Energy, Inc.:

     

Strike Price USD 18, Expires 11/19/12

     210         (1,575

Strike Price USD 17, Expires 12/24/12

     150         (10,125

Strike Price USD 19, Expires 12/24/12

     100         (2,500

Chesapeake Energy Corp., Strike Price USD 21, Expires 11/19/12

     645         (29,025

Chevron Corp., Strike Price
USD 114.75, Expires 12/10/12

     50         (3,265
Options Written    Contracts      Value  

 

 

Exchange-Traded Call Options (continued)

     

Cliffs Natural Resources, Inc., Strike Price USD 52.50, Expires 11/19/12

     96       $ (336

Cobalt International Energy, Inc., Strike Price USD 25, Expires 11/19/12

     165         (1,238

Concho Resources, Inc.:

     

Strike Price USD 100, Expires 11/19/12

     100         (4,000

Strike Price USD 105, Expires 11/19/12

     70         (1,750

CONSOL Energy, Inc., Strike Price USD 32, Expires 11/19/12

     865         (298,425

Continental Resources, Inc., Strike Price USD 80, Expires 11/19/12

     150         (7,500

Core Laboratories NV, Strike Price USD 135, Expires 11/19/12

     200         (2,000

Crescent Point Energy Corp., Strike Price CAD 45, Expires 11/19/12

     265         (1,061

Crew Energy, Inc., Strike Price
CAD 8, Expires 11/19/12

     470         (10,588

Deere & Co., Strike Price USD 85, Expires 11/19/12

     245         (44,468

Denbury Resources, Inc., Strike Price USD 18, Expires 11/19/12

     600         (6,000

Detour Gold Corp., Strike Price
CAD 28, Expires 11/19/12

     435         (42,465

Eldorado Gold Corp., Strike Price CAD 15, Expires 11/19/12

     1,150         (37,997

Energy XXI (Bermuda) Ltd.:

     

Strike Price USD 38, Expires 11/19/12

     220         (3,300

Strike Price USD 39, Expires 11/19/12

     220         (3,300

EOG Resources, Inc., Strike Price USD 115, Expires 11/19/12

     300         (129,000

First Quantum Minerals Ltd.:

     

Strike Price CAD 23, Expires 11/19/12

     950         (52,315

Strike Price CAD 24, Expires 11/19/12

     850         (21,277

Forum Energy Technologies, Inc., Strike Price USD 22.50, Expires 11/19/12

     15         (1,500

Freeport-McMoRan Copper & Gold, Inc., Strike Price USD 41, Expires 11/19/12

     390         (13,065

Goldcorp, Inc., Strike Price USD 47, Expires 11/19/12

     200         (10,300

Harry Winston Diamond Corp., Strike Price CAD 12, Expires 11/19/12

     445         (103,592

Hess Corp.:

     

Strike Price USD 55, Expires 11/19/12

     81         (5,184

Strike Price USD 57.50, Expires 11/19/12

     80         (1,960

IAMGOLD Corp.:

     

Strike Price CAD 16, Expires 11/19/12

     400         (13,817

Strike Price CAD 17, Expires 11/19/12

     400         (4,606

Monsanto Co., Strike Price USD 91, Expires 12/06/12

     71         (3,505

The Mosaic Co., Strike Price
USD 62.60, Expires 11/17/12

     66         (33

Newmont Mining Corp., Strike Price USD 57.50, Expires 11/19/12

     200         (7,900

Noble Energy, Inc., Strike Price
USD 95, Expires 11/19/12

     250         (51,250

Occidental Petroleum Corp., Strike Price USD 90, Expires 11/19/12

     370         (1,665

Patterson-UTI Energy, Inc., Strike Price USD 17, Expires 11/19/12

     530         (13,250

Peabody Energy Corp., Strike Price USD 25, Expires 11/02/12

     570         (165,220

PetroChina Co. Ltd. - ADR, Strike Price USD 130, Expires 11/19/12

     45         (31,725
 

 

See Notes to Financial Statements.
                 
78       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (continued)

 

 

BlackRock Real Asset Equity Trust (BCF)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Exchange-Traded Call Options (concluded)

  

  

Potash Corp. of Saskatchewan, Inc., Strike Price USD 45, Expires 11/19/12

     620       $ (1,550

Praxair, Inc., Strike Price USD 110, Expires 11/19/12

     555         (16,650

Range Resources Corp., Strike Price USD 72.50, Expires 11/19/12

     315         (4,725

Royal Dutch Shell Plc, Class A - ADR, Strike Price USD 70, Expires 1/21/13

     45         (4,050

Schlumberger Ltd.:

     

Strike Price USD 77.50, Expires 11/19/12

     40         (120

Strike Price USD 75, Expires 12/07/12

     150         (6,671

Southern Copper Corp., Strike Price USD 35, Expires 11/19/12

     125         (38,750

Suncor Energy, Inc.:

     

Strike Price USD 34, Expires 10/29/12

     210         (22,098

Strike Price USD 34, Expires 11/19/12

     205         (12,402

Teck Resources Ltd., Class B, Strike Price CAD 32, Expires 11/19/12

     1,390         (102,293

Total SA - ADR, Strike Price
USD 52.50, Expires 11/19/12

     230         (5,175

United States Steel Corp., Strike Price USD 24, Expires 12/17/12

     135         (3,721

Vale SA - ADR, Strike Price USD 19, Expires 11/19/12

     1,255         (25,727

Valero Energy Corp., Strike Price
USD 33, Expires 11/19/12

     55         (357

Weyerhaeuser Co.:

     

Strike Price USD 27, Expires 11/19/12

     780         (74,100

Strike Price USD 28, Expires 11/19/12

     100         (4,000

Total Exchange-Traded Call Options

              (1,685,190 ) 

Over-the-Counter Call Options – (0.6)%

  

  

African Rainbow Minerals Ltd.:

     

Strike Price ZAR 165.43, Expires 11/28/12, Broker Citigroup Global Markets, Inc.

     38,000         (77,905

Strike Price ZAR 170.29, Expires 12/12/12, Broker UBS Securities LLC

     46,000         (78,949

Agnico-Eagle Mines Ltd., Strike Price USD 54.69, Expires 1/03/13, Broker Morgan Stanley & Co., Inc.

     32,200         (127,377

Air Products & Chemicals, Inc., Strike Price USD 84.34, Expires 11/29/12, Broker UBS Securities LLC

     31,500         (379

Allegheny Technologies, Inc., Strike Price USD 33.36, Expires 11/27/12, Broker Morgan Stanley & Co., Inc.

     13,100         (161

Alumina Ltd., Strike Price AUD 0.91, Expires 11/08/12, Broker UBS Securities LLC

     627,600         (36,211

Anglo American Platinum Ltd., Strike Price ZAR 404, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

     16,700         (35,122

Anglo American Plc, Strike Price
GBP 18.44, Expires 12/12/12, Broker Morgan Stanley & Co., Inc.

     25,800         (57,784

Apache Corp., Strike Price USD 91, Expires 12/07/12, Broker Banc of America Securities

     30,000         (12,585

BHP Billiton Plc, Strike Price
GBP 19.40, Expires 12/12/12, Broker Citigroup Global Markets, Inc.

     257,000         (333,894
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

  

Bill Barrett Corp., Strike Price USD 26, Expires 11/12/12, Broker UBS Securities LLC

     28,500       $ (818

Bonanza Creek Energy, Inc., Strike Price USD 23.70, Expires 12/07/12, Broker Morgan Stanley & Co., Inc.

     30,000         (50,386

Cenovus Energy, Inc., Strike Price
USD 35.34, Expires 12/06/12, Broker Morgan Stanley & Co., Inc.

     37,400         (40,850

Cheniere Energy, Inc., Strike Price USD 17.25, Expires 11/01/12, Broker Citigroup Global Markets, Inc.

     20,000           

Chevron Corp., Strike Price
USD 118.09, Expires 11/29/12, Broker Citigroup Global Markets, Inc.

     17,500         (1,527

Cia de Minas Buenaventura SA - ADR, Strike Price USD 36.70, Expires 12/18/12, Broker Goldman
Sachs & Co.

     75,600         (75,323

Crescent Point Energy Corp., Strike Price CAD 43.02, Expires 1/07/13, Broker UBS Securities LLC

     25,000         (12,585

DeeThree Exploration Ltd.:

     

Strike Price CAD 5.36, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

     45,000         (70,527

Strike Price CAD 5.36, Expires 12/03/12, Broker Morgan Stanley & Co., Inc.

     45,000         (72,153

Denbury Resources, Inc., Strike Price USD 16.68, Expires 12/11/12, Broker Credit Suisse First Boston

     43,000         (10,296

The Dow Chemical Co., Strike Price USD 31.34, Expires 11/12/12, Broker Goldman Sachs & Co.

     56,700         (2,122

E.I. du Pont de Nemours & Co.:

     

Strike Price USD 52, Expires 11/01/12, Broker Banc of America Securities

     60,000         (1

Strike Price USD 51, Expires 12/17/12, Broker Morgan Stanley & Co., Inc.

     73,000         (4,085

EQT Corp., Strike Price USD 60.08, Expires 11/09/12, Broker Goldman Sachs & Co.

     16,500         (21,258

Eramet:

     

Strike Price EUR 98.44, Expires 11/13/12, Broker UBS Securities LLC

     2,300         (3,865

Strike Price EUR 104.24, Expires 12/12/12, Broker Banc of America Securities

     2,200         (4,916

Exxon Mobil Corp., Strike Price
USD 93.15, Expires 11/26/12, Broker Morgan Stanley & Co., Inc.

     14,600         (9,083

Fibria Celulose SA - ADR:

     

Strike Price USD 9.69, Expires 11/12/12, Broker Deutsche Bank Securities Corp.

     43,600         (1,479

Strike Price USD 9.69, Expires 12/05/12, Broker Deutsche Bank Securities Corp.

     43,600         (6,683

Fresnillo Plc:

     

Strike Price GBP 19.39, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     41,200         (54,967

Strike Price GBP 19.45, Expires 12/12/12, Broker Morgan Stanley & Co., Inc.

     116,000         (175,631
 

 

See Notes to Financial Statements.
                 
      ANNUAL REPORT       OCTOBER 31, 2012    79


 

 

Schedule of Investments (continued)

 

 

BlackRock Real Asset Equity Trust (BCF)

(Percentages shown are based on Net Assets)

 

Options Written   Contracts     Value  

 

 

Over-the-Counter Call Options (continued)

  

 

Glencore International Plc, Strike Price GBP 3.37, Expires 12/12/12, Broker Morgan Stanley & Co., Inc.

    74,300      $ (21,551

Goldcorp, Inc., Strike Price USD 43.96, Expires 12/04/12, Broker Deutsche Bank Securities Corp.

    36,000        (87,535

Halliburton Co.:

   

Strike Price USD 35.93, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

    12,000          

Strike Price USD 35.30, Expires 12/10/12, Broker Morgan Stanley & Co., Inc.

    12,000        (3,483

Iluka Resources Ltd., Strike Price AUD 11.25, Expires 11/08/12, Broker Citigroup Global Markets, Inc.

    273,200        (34,170

Impala Platinum Holdings Ltd., Strike Price ZAR 146.48, Expires 12/12/12, Broker UBS Securities LLC

    123,000        (156,421

Industrias Penoles SAB de CV:

   

Strike Price MXN 623.41, Expires 11/07/12, Broker Credit Suisse First Boston

    42,700        (100,510

Strike Price MXN 546.20, Expires 11/13/12, Broker UBS Securities LLC

    26,500        (216,702

Strike Price MXN 632.49, Expires 12/13/12, Broker Citigroup Global Markets, Inc.

    42,700        (122,887

Strike Price MXN 702.94, Expires 12/19/12, Broker UBS Securities LLC

    42,700        (32,989

International Paper Co., Strike Price
USD 37.01, Expires 11/09/12, Broker Morgan Stanley & Co., Inc.

    126,000        (19,303

Jiangxi Copper Co. Ltd., Class H, Strike
Price HKD 20.03, Expires 11/08/12, Broker Citigroup Global Markets, Inc.

    473,000        (37,864

Kazakhmys Plc, Strike Price GBP 7.30, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

    89,000        (33,740

Key Energy Services, Inc., Strike Price
USD 7.32, Expires 11/07/12, Broker Morgan Stanley & Co., Inc.

    88,500        (600

Kinross Gold Corp., Strike Price USD 10.61, Expires 12/11/12, Broker Morgan Stanley & Co., Inc.

    79,500        (24,733

Kodiak Oil & Gas Corp., Strike Price USD 9.65, Expires 12/03/12, Broker Deutsche Bank Securities Corp.

    62,000        (20,999

MeadWestvaco Corp.:

   

Strike Price USD 30.17, Expires 11/12/12, Broker Morgan Stanley & Co., Inc.

    89,500        (13,747

Strike Price USD 30.91, Expires 11/12/12, Broker Citigroup Global Markets, Inc.

    62,000        (2,038

Mining and Metallurgical Co. Norilsk Nickel OJSC, Strike Price USD 16.26, Expires 12/12/12, Broker Morgan
Stanley & Co., Inc.

    3,700        (822
Options Written   Contracts     Value  

 

 

Over-the-Counter Call Options (continued)

  

 

Minsur SA:

   

Strike Price PEN 2.51, Expires 11/07/12, Broker Credit Suisse First Boston

    319,500      $ (81

Strike Price PEN 2.22, Expires 11/13/12, Broker UBS Securities LLC

    319,500        (16,380

Strike Price PEN 2.50, Expires 11/29/12, Broker UBS Securities LLC

    639,000        (3,536

Mondi Plc, Strike Price GBP 6.57, Expires 12/12/12, Broker Morgan Stanley & Co., Inc.

    107,000        (60,570

Monsanto Co., Strike Price USD 87.35, Expires 12/06/12, Broker Goldman Sachs & Co.

    32,500        (58,561

National Oilwell Varco, Inc., Strike Price USD 84.99, Expires 11/08/12, Broker UBS Securities LLC

    15,500        (3

Newcrest Mining Ltd., Strike Price
AUD 28.26, Expires 12/05/12, Broker UBS Securities LLC

    85,500        (58,303

Olin Corp.:

   

Strike Price USD 21.58, Expires 11/12/12, Broker Morgan Stanley & Co., Inc.

    14,900        (847

Strike Price USD 21.54, Expires 11/28/12, Broker Banc of America Securities

    30,000        (7,324

Strike Price USD 21.58, Expires 12/05/12, Broker Morgan Stanley & Co., Inc.

    14,900        (4,282

OZ Minerals Ltd., Strike Price AUD 7.30, Expires 11/08/12, Broker UBS Securities LLC

    179,700        (163,543

Pioneer Natural Resources Co., Strike Price USD 107.11, Expires 11/30/12, Broker Deutsche Bank Securities Corp.

    12,000        (49,069

Plains Exploration & Production Co.:

   

Strike Price USD 36.33, Expires 12/18/12, Broker Morgan Stanley & Co., Inc.

    24,000        (49,607

Strike Price USD 36.33, Expires 1/08/13, Broker Morgan Stanley & Co., Inc.

    24,000        (60,081

Rio Tinto Plc, Strike Price GBP 30.31, Expires 12/12/12, Broker UBS Securities LLC

    159,000        (367,197

Rosetta Resources, Inc., Strike Price
USD 48.89, Expires 12/14/12, Broker UBS Securities LLC

    23,000        (31,176

Royal Dutch Shell Plc, Class A - ADR, Strike Price USD 74.22, Expires 11/29/12, Broker Goldman Sachs & Co.

    15,000        (203

Seadrill Ltd., Strike Price NOK 229.99, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

    26,500        (17,931

Southern Copper Corp., Strike Price
USD 35.79, Expires 12/05/12, Broker Credit Suisse First Boston

    11,500        (26,697

Southwestern Energy Co., Strike Price USD 34.20, Expires 11/05/12, Broker Citigroup Global Markets, Inc.

    20,000        (16,878
 

 

See Notes to Financial Statements.
                 
80       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (continued)

 

 

BlackRock Real Asset Equity Trust (BCF)

(Percentages shown are based on Net Assets)

 

Options Written   Contracts     Value  

 

 

Over-the-Counter Call Options (continued)

  

Statoil ASA, Strike Price NOK 148.37, Expires 11/28/12, Broker Banc of America Securities

    60,200      $ (4,900)   

Technip SA:

   

Strike Price EUR 89.69, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

    4,000        (7,725)   

Strike Price EUR 91.58, Expires 11/28/12, Broker Citigroup Global Markets, Inc.

    3,800        (4,462)   

Vale SA - ADR, Strike Price USD 19.55, Expires 11/09/12, Broker Citigroup Global Markets, Inc.

    113,500        (2,703)   

Valero Energy Corp., Strike Price USD 33.31, Expires 11/28/12, Broker Goldman Sachs & Co.

    35,500        (8,028)   

Vedanta Resources Plc, Strike Price GBP 10.71, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

    143,000        (197,282)   

Weyerhaeuser Co., Strike Price USD 28.92, Expires 1/03/13, Broker Morgan Stanley & Co., Inc.

    65,000        (34,983)   

Whiting Petroleum Corp.:

   

Strike Price USD 45.66, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

    29,000        (12)   

Strike Price USD 45.66, Expires 11/15/12, Broker Morgan Stanley & Co., Inc.

    29,000        (6,507)   

Strike Price USD 50, Expires 12/07/12, Broker Goldman Sachs & Co.

    11,000        (2,264)   
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (concluded)

  

Xstrata Plc, Strike Price GBP 9.56, Expires 12/12/12, Broker Morgan Stanley & Co., Inc.

     356,000       $ (288,869

Zijin Mining Group Co. Ltd., Class H, Strike Price HKD 3.17, Expires 11/08/12, Broker UBS Securities LLC

     1,836,000         (11,095

 

 

Total Over-the-Counter Call Options

        (3,870,115

 

 

Total Options Written

(Premiums Received – $7,376,099) – (0.9)%

  

  

     (5,555,305

 

 

Total Investments Net of Options
Written – 100.5%

   

     634,172,458   

Liabilities in Excess of Other Assets – (0.5)%

  

     (3,371,040
     

 

 

 

Net Assets – 100.0%

  

   $ 630,801,418   
     

 

 

 

 

(a) All or a portion of security has been pledged/segregated as collateral in connection with outstanding options written.
(b) Non-income producing security.
(c) Security, or a portion of security, is on loan.
(d) Represents the current yield as of report date.
(e) Security was purchased with the cash collateral from loaned securities. The Trust may withdraw up to 25% of its investment daily, although the manager of the BlackRock Liquidity Series, LLC Money Market Series, in its sole discretion, may permit an investor to withdraw more than 25% on any one day.
 

 

(f) Investments in issuers considered to be an affiliate of the Trust during the year ended October 31, 2012, for purposes of Section 2(a)(3) of the Investment Company Act of 1940 were as follows:

 

Affiliate   

Shares/

Beneficial Interest

Held at

October 31,

2011

  

Net

Activity

  

Shares/

Beneficial Interest

Held at

October 31,

2012

   Realized
Gain
   Income           

BlackRock Liquidity Funds, TempFund, Institutional Class

   29,314,451    (2,586,830)    26,727,621    $688    $48,886      

BlackRock Liquidity Series, LLC, Money Market Series

   $11,645,567    $(7,914,551)    $3,731,016       $47,879        

 

For Trust compliance purposes, the Trust’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Trust management. These definitions may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease.

 

Fair Value Measurements – Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows:

 

  Level 1 - unadjusted price quotations in active markets/exchanges for identical assets and liabilities that the Trust has the ability to access
  Level 2 - other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

  Level 3 - unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments and derivative financial instruments)
 

 

See Notes to Financial Statements.

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    81


 

 

Schedule of Investments (concluded)

 

 

BlackRock Real Asset Equity Trust (BCF)

 

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy as of October 31, 2012:

 

     Level 1     Level 2     Level 3   Total  

Assets:

       

Investments:

       

Long-Term Investments:

       

Common Stocks:

       

Chemicals

  $ 76,646,043               $ 76,646,043   

Energy Equipment & Services

    23,906,260      $ 5,906,592          29,812,852   

Machinery

    26,270,313                 26,270,313   

Metals & Mining

    124,164,892        139,740,712          263,905,604   

Oil, Gas & Consumable Fuels

    162,157,372        4,492,322          166,649,694   

Paper & Forest Products

    29,506,485        3,555,212          33,061,697   

Real Estate Investment Trusts (REITs)

    12,922,923                 12,922,923   

Short-Term Securities

    26,727,621        3,731,016          30,458,637   

 

 

Total

  $ 482,301,909      $ 157,425,854        $ 639,727,763   
 

 

 

 

 

     Level 1     Level 2     Level 3   Total  

Derivative Financial Instruments1

       

Liabilities:

       

Equity contracts

  $ (1,473,215   $ (4,082,090     $ (5,555,305

 

 

 

1 

Derivative financial instruments are options, which are shown at value.

Certain of the Trust’s assets and liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2012, such assets and liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1     Level 2     Level 3   Total  

Assets:

       

Cash

  $ 182,361               $ 182,361   

Foreign currency at value

    2,708                 2,708   

Liabilities:

       

Collateral on securities loaned at value

         $ (3,731,016       (3,731,016

 

 

Total

  $ 185,069      $ (3,731,016     $ (3,545,947
 

 

 

 

There were no transfers between levels during the year ended October 31, 2012.

 

 

See Notes to Financial Statements.

 

                 
82       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Consolidated Schedule of Investments October 31, 2012

 

 

BlackRock Resources & Commodities Strategy Trust (BCX)

(Percentages shown are based on Net Assets)

 

Common Stocks   Shares     Value  

 

 

Chemicals – 20.2%

  

Agrium, Inc. (a)

    117,700      $ 12,422,058   

CF Industries Holdings, Inc. (a)

    52,100        10,690,399   

E.I. du Pont de Nemours & Co.

    421,800        18,778,536   

Israel Chemicals Ltd.

    514,400        6,435,464   

K+S AG

    108,000        5,118,595   

Monsanto Co. (a)

    194,700        16,757,829   

The Mosaic Co. (a)

    187,800        9,829,452   

Potash Corp. of Saskatchewan, Inc.

    584,400        23,592,228   

Rentech Nitrogen Partners LP (a)

    124,400        4,778,204   

Sociedad Quimica y Minera de Chile
SA - ADR

    123,900        7,167,615   

Syngenta AG

    49,300        19,221,554   

Uralkali OJSC - GDR

    255,100        10,028,551   
   

 

 

 
      144,820,485   

 

 

Energy Equipment & Services – 2.2%

  

Atwood Oceanics, Inc. (a)(b)

    17,800        850,840   

Basic Energy Services, Inc. (a)(b)

    23,700        246,243   

Calfrac Well Services Ltd.

    7,200        165,158   

Core Laboratories NV (a)

    29,300        3,037,238   

Forum Energy Technologies, Inc. (a)(b)

    43,100        961,561   

Halliburton Co.

    43,100        1,391,699   

Key Energy Services, Inc. (b)

    145,400        950,916   

National Oilwell Varco, Inc.

    27,900        2,056,230   

Patterson-UTI Energy, Inc. (a)

    89,600        1,449,728   

Schlumberger Ltd. (a)

    16,100        1,119,433   

Seadrill Ltd.

    46,054        1,866,120   

Technip SA

    11,700        1,319,647   
   

 

 

 
      15,414,813   

 

 

Food Products – 2.5%

  

Archer-Daniels-Midland Co.

    262,000        7,032,080   

Bunge Ltd.

    112,500        7,990,875   

SLC Agricola SA

    305,000        2,913,271   
   

 

 

 
      17,936,226   

 

 

Machinery – 4.3%

  

AGCO Corp. (b)

    253,100        11,518,581   

Deere & Co.

    156,700        13,388,448   

Joy Global, Inc.

    99,500        6,213,775   
   

 

 

 
      31,120,804   

 

 

Metals & Mining – 31.9%

  

Alexco Resource Corp. (b)

    711,000        2,772,900   

Allied Nevada Gold Corp. (b)

    282,300        10,422,516   

Augusta Resource Corp. (b)

    856,629        2,338,597   

Avalon Rare Metals, Inc. (b)

    107,600        172,375   

BHP Billiton Ltd. - ADR (a)

    71,700        5,072,058   

Centerra Gold, Inc.

    219,700        2,492,316   

Cliffs Natural Resources, Inc. (a)

    26,700        968,409   

Compass Minerals International, Inc.

    103,100        8,129,435   

Detour Gold Corp. (a)(b)

    288,200        8,120,098   

Eldorado Gold Corp. (a)

    608,300        9,015,006   

Endeavour Silver Corp. (b)

    229,800        2,095,776   

First Majestic Silver Corp. (a)(b)

    207,100        4,804,720   

Franco-Nevada Corp. (a)

    321,900        18,535,639   

Freeport-McMoRan Copper & Gold, Inc. (a)

    374,300        14,552,784   

Fresnillo Plc

    459,600        14,268,495   

Goldcorp, Inc.

    325,300        14,713,319   

Hi-Crush Partners LP (b)

    235,600        4,829,800   

HudBay Minerals, Inc. (a)

    387,400        3,595,693   

Iluka Resources Ltd.

    197,400        2,024,794   

Kenmare Resources Plc (b)

    4,464,100        2,843,648   

MAG Silver Corp. (a)(b)

    464,900        5,920,929   

McEwen Mining, Inc. (a)(b)

    745,600        3,623,616   
Common Stocks   Shares     Value  

 

 

Metals & Mining (concluded)

  

New Gold, Inc. (b)

    540,300      $ 6,337,719   

Newmont Mining Corp. (a)

    237,700        12,966,535   

Novagold Resources, Inc. (b)

    833,200        4,082,680   

Pan American Silver Corp. (a)

    103,500        2,277,000   

Prospect Global Resources, Inc. (b)(c)

    2,884,615        7,947,114   

Rio Tinto Plc - ADR

    94,800        4,738,104   

Seabridge Gold, Inc. (b)

    463,800        7,995,912   

Silver Wheaton Corp.

    694,000        28,107,000   

Silvercorp Metals, Inc. (a)

    1,149,100        7,147,402   

Teck Resources Ltd., Class B (a)

    196,700        6,243,194   
   

 

 

 
      229,155,583   

 

 

Oil, Gas & Consumable Fuels – 35.6%

  

Alpha Natural Resources, Inc. (a)(b)

    307,765        2,637,546   

AltaGas Ltd. (a)

    304,400        10,255,880   

Anadarko Petroleum Corp. (a)

    28,400        1,954,204   

Angle Energy, Inc. (b)

    98,600        370,213   

Apache Corp.

    52,400        4,336,100   

Baytex Energy Corp. (a)

    74,600        3,394,814   

Bill Barrett Corp. (b)

    53,200        1,218,812   

Bonanza Creek Energy, Inc. (b)

    67,000        1,659,590   

Bonavista Energy Corp.

    132,800        2,381,425   

Cenovus Energy, Inc.

    44,200        1,560,702   

Cheniere Energy, Inc. (a)(b)

    112,800        1,814,952   

Chesapeake Energy Corp. (a)

    115,200        2,333,952   

Chevron Corp. (a)

    40,500        4,463,505   

Cobalt International Energy, Inc. (a)(b)

    29,800        620,138   

Concho Resources, Inc. (a)(b)

    28,200        2,428,584   

CONSOL Energy, Inc. (a)

    234,100        8,230,956   

Continental Resources, Inc. (a)(b)

    22,100        1,588,106   

Crescent Point Energy Corp. (a)

    265,800        11,044,506   

Crew Energy, Inc. (a)(b)

    83,500        642,919   

DeeThree Exploration Ltd. (b)

    111,728        774,125   

Denbury Resources, Inc. (a)(b)

    199,300        3,055,269   

Enbridge Energy Partners LP (a)

    115,411        3,462,330   

Energy XXI (Bermuda) Ltd. (a)

    43,500        1,439,850   

Enterprise Products Partners LP (a)

    279,500        14,732,445   

EOG Resources, Inc. (a)

    57,800        6,733,122   

EQT Corp.

    29,100        1,764,333   

Exxon Mobil Corp.

    13,200        1,203,444   

Gasco Energy, Inc. (b)

    371,900        52,103   

Hess Corp. (a)

    29,700        1,552,122   

James River Coal Co. (b)

    89,100        446,391   

Keyera Corp. (a)

    197,600        9,591,638   

Kodiak Oil & Gas Corp. (b)

    138,200        1,276,968   

Linn Co. LLC (b)

    185,000        7,194,650   

Long Run Exploration Ltd. (b)

    65,838        270,274   

Magellan Midstream Partners LP (a)

    255,200        11,083,336   

MarkWest Energy Partners LP (a)

    175,300        9,506,519   

Noble Energy, Inc. (a)

    45,400        4,313,454   

Occidental Petroleum Corp. (a)

    121,900        9,625,224   

ONEOK Partners LP

    275,150        16,770,394   

Patriot Coal Corp. (b)

    64,000        10,240   

Peabody Energy Corp. (a)

    118,800        3,314,520   

Permian Basin Royalty Trust

    598,985        8,427,719   

PetroChina Co. Ltd. - ADR (a)

    6,400        868,864   

Pioneer Natural Resources Co.

    20,800        2,197,520   

Plains All American Pipeline LP

    364,600        16,545,548   

Plains Exploration & Production Co. (b)

    78,100        2,785,046   

Range Resources Corp. (a)

    53,600        3,503,296   

Rex Energy Corp. (a)(b)

    69,000        913,560   

Rosetta Resources, Inc. (b)

    43,200        1,988,928   

Royal Dutch Shell Plc, Class A - ADR (a)

    91,500        6,265,920   
 

 

See Notes to Financial Statements.

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    83


 

 

Consolidated Schedule of Investments (continued)

 

 

BlackRock Resources & Commodities Strategy Trust (BCX)

(Percentages shown are based on Net Assets)

 

Common Stocks   Shares     Value  

 

 

Oil, Gas & Consumable Fuels (concluded)

  

Ship Finance International Ltd. (a)

    374,500      $ 5,759,810   

Southwestern Energy Co. (b)

    17,600        610,720   

Statoil ASA

    102,600        2,526,931   

Suncor Energy, Inc. (a)

    154,600        5,197,652   

Targa Resources Partners LP

    74,700        3,128,436   

Valero Energy Corp.

    73,500        2,138,850   

Vermilion Energy, Inc. (a)

    129,400        6,186,583   

Whiting Petroleum Corp. (b)

    108,800        4,571,776   

Williams Partners LP

    205,700        10,897,986   
   

 

 

 
      255,624,800   

 

 

Total Common Stocks – 96.7%

      694,072,711   

 

 
   
        

Investment Companies – 2.6%

   

 

 

Sprott Physical Gold Trust (b)

    1,249,400        18,403,662   

 

 

Total Long-Term Investments

(Cost – $ 731,876,891) – 99.3%

  

  

    712,476,373   

 

 
   
        

 

Short-Term Securities

   

 

 

BlackRock Liquidity Funds, TempFund, Institutional Class, 0.17% (d)(e)

    7,260,037        7,260,037   

 

 

Total Short-Term Securities

   

(Cost – $ 7,260,037) – 1.0%

      7,260,037   

 

 

Total Investments Before Options Written

(Cost – $ 739,136,928) – 100.3%

  

  

    719,736,410   

 

 
   
        
Options Written   Contracts        

 

 

Exchange-Traded Call Options – (0.2)%

  

Agrium, Inc., Strike Price USD 105, Expires 11/19/12

    415        (115,162

Alpha Natural Resources, Inc.:

   

Strike Price USD 11, Expires 11/19/12

    150        (1,425

Strike Price USD 9, Expires 12/24/12

    725        (63,800

AltaGas Ltd., Strike Price CAD 34, Expires 11/19/12

    620        (13,967

Anadarko Petroleum Corp., Strike Price USD 72.50, Expires 11/19/12

    100        (5,600

Atwood Oceanics, Inc., Strike Price USD 50, Expires 11/19/12

    59        (2,655

Basic Energy Services, Inc., Strike Price USD 12.50, Expires 11/19/12

    80        (800

Baytex Energy Corp., Strike Price CAD 48, Expires 12/24/12

    265        (14,593

BHP Billiton Ltd. - ADR, Strike Price USD 72.50, Expires 11/19/12

    240        (16,440

CF Industries Holdings, Inc., Strike Price USD 220, Expires 11/19/12

    260        (31,330

Cheniere Energy, Inc.:

   

Strike Price USD 18, Expires 11/19/12

    280        (2,100

Strike Price USD 17, Expires 12/24/12

    115        (7,762

Chesapeake Energy Corp., Strike Price USD 22, Expires 11/19/12

    400        (8,800

Chevron Corp., Strike Price USD 114.75, Expires 12/10/12

    32        (2,089

Cliffs Natural Resources, Inc., Strike Price USD 45, Expires 12/24/12

    94        (3,854
Options Written   Contracts     Value  

 

 

Exchange-Traded Call Options (continued)

  

Cobalt International Energy, Inc., Strike Price USD 25, Expires 11/19/12

    105      $ (788

Concho Resources, Inc., Strike Price USD 95, Expires 11/19/12

    100        (5,000

CONSOL Energy, Inc.:

   

Strike Price USD 37, Expires 11/19/12

    410        (22,345

Strike Price USD 38, Expires 12/24/12

    410        (43,050

Continental Resources, Inc., Strike Price USD 80, Expires 11/19/12

    75        (3,750

Core Laboratories NV, Strike Price USD 110, Expires 11/19/12

    105        (4,725

Crescent Point Energy Corp., Strike Price CAD 45, Expires 11/19/12

    445        (1,782

Crew Energy, Inc., Strike Price CAD 9, Expires 12/24/12

    300        (6,008

Denbury Resources, Inc., Strike Price USD 18, Expires 11/19/12

    50        (500

Detour Gold Corp., Strike Price CAD 29, Expires 1/21/13

    1,020        (186,383

Eldorado Gold Corp., Strike Price USD 15, Expires 11/19/12

    1,050        (39,375

Enbridge Energy Partners LP, Strike Price USD 30, Expires 11/19/12

    400        (10,000

Energy XXI (Bermuda) Ltd., Strike Price USD 38, Expires 11/19/12

    150        (2,250

Enterprise Products Partners LP, Strike Price USD 55, Expires 12/24/12

    1,000        (35,000

EOG Resources, Inc., Strike Price USD 115, Expires 11/19/12

    200        (86,000

First Majestic Silver Corp., Strike Price USD 22.50, Expires 11/19/12

    55        (6,875

Forum Energy Technologies, Inc., Strike Price USD 22.50, Expires 11/19/12

    15        (1,500

Franco-Nevada Corp.:

   

Strike Price CAD 60, Expires 11/19/12

    560        (37,847

Strike Price CAD 60, Expires 12/24/12

    567        (92,253

Freeport-McMoRan Copper & Gold, Inc., Strike Price USD 41.25, Expires 12/11/12

    665        (46,192

Hess Corp., Strike Price USD 55, Expires 11/19/12

    104        (6,656

HudBay Minerals, Inc.:

   

Strike Price CAD 10, Expires 11/19/12

    600        (4,506

Strike Price CAD 10, Expires 12/24/12

    750        (15,019

Keyera Corp.:

   

Strike Price CAD 48, Expires 11/19/12

    375        (30,976

Strike Price CAD 48, Expires 12/24/12

    317        (35,707

MAG Silver Corp., Strike Price CAD 12, Expires 11/19/12

    820        (84,155

Magellan Midstream Partners LP, Strike Price USD 45, Expires 12/24/12

    200        (5,500

MarkWest Energy Partners LP:

   

Strike Price USD 55, Expires 11/19/12

    117        (3,218

Strike Price USD 55, Expires 1/21/13

    200        (22,000

McEwen Mining, Inc., Strike Price USD 5, Expires 11/17/12

    1,100        (13,750

Monsanto Co., Strike Price USD 91, Expires 12/06/12

    124        (6,121

The Mosaic Co., Strike Price USD 55, Expires 11/19/12

    655        (16,048

Newmont Mining Corp., Strike Price USD 57.50, Expires 11/19/12

    410        (16,195

Noble Energy, Inc., Strike Price USD 97.50, Expires 11/19/12

    160        (16,400
 

 

See Notes to Financial Statements.

                 
84       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Consolidated Schedule of Investments (continued)

 

 

BlackRock Resources & Commodities Strategy Trust (BCX)

(Percentages shown are based on Net Assets)

 

Options Written   Contracts     Value  

 

 

Exchange-Traded Call Options (concluded)

  

Occidental Petroleum Corp.:

   

Strike Price USD 87.50, Expires 11/19/12

    170      $ (1,615)   

Strike Price USD 90, Expires 11/19/12

    260        (1,170)   

Pan American Silver Corp., Strike Price
USD 23, Expires 11/19/12

    360        (14,400)   

Patterson-UTI Energy, Inc., Strike Price
USD 17, Expires 11/19/12

    300        (7,500)   

Peabody Energy Corp., Strike Price USD 29, Expires 11/19/12

    400        (27,000)   

PetroChina Co. Ltd. - ADR, Strike Price USD 130, Expires 11/19/12

    23        (16,215)   

Range Resources Corp., Strike Price USD 72.50, Expires 11/19/12

    185        (2,775)   

Rentech Nitrogen Partners LP, Strike Price USD 37.50, Expires 11/19/12

    260        (27,950)   

Rex Energy Corp., Strike Price USD 15, Expires 11/19/12

    120        (2,400)   

Royal Dutch Shell Plc, Class A - ADR, Strike Price USD 70, Expires 1/21/13

    55        (4,950)   

Schlumberger Ltd.:

   

Strike Price USD 77.50, Expires 11/19/12

    10        (30)   

Strike Price USD 75, Expires 12/07/12

    45        (2,001)   

Ship Finance International Ltd., Strike Price USD 16.50, Expires 1/10/13

    260        (7,400)   

Silvercorp Metals, Inc., Strike Price USD 6.25, Expires 12/10/12

    500        (18,972)   

Suncor Energy, Inc.:

   

Strike Price USD 34, Expires 10/29/12

    100        (10,523)   

Strike Price USD 34, Expires 11/19/12

    120        (7,260)   

Strike Price USD 35, Expires 11/19/12

    320        (8,960)   

Teck Resources Ltd., Class B, Strike Price CAD 32, Expires 11/19/12

    700        (51,514)   

Vermilion Energy, Inc., Strike Price CAD 48, Expires 11/19/12

    780        (54,668)   

 

 

Total Exchange-Traded Call Options

  

    (1,465,554)   

 

 

Over-the-Counter Call Options – (0.7)%

  

AGCO Corp., Strike Price USD 47.81, Expires 12/06/12, Broker Deutsche Bank Securities Corp.

    88,600        (90,187)   

Alexco Resource Corp.:

   

Strike Price USD 4.36, Expires 12/05/12, Broker Goldman Sachs & Co.

    100,000        (13,141)   

Strike Price USD 3.90, Expires 1/07/13, Broker Goldman Sachs & Co.

    68,000        (27,624)   

Allied Nevada Gold Corp., Strike Price USD 40.86, Expires 12/11/12, Broker Goldman Sachs & Co.

    98,500        (53,605)   

Altas Income Ltd., Strike Price CAD 34.11, Expires 1/03/13, Broker Citigroup Global Markets, Inc.

    40,000        (15,034)   

Apache Corp., Strike Price USD 91, Expires 12/07/12, Broker Banc of America Securities

    18,000        (7,551)   

Archer-Daniels-Midland Co., Strike Price USD 28.68, Expires 12/17/12, Broker Banc of America Securities

    91,700        (30,749)   
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

Augusta Resource Corp.:

     

Strike Price USD 2.99, Expires 11/27/12, Broker Citigroup Global Markets, Inc.

     65,000       $ (6,691)   

Strike Price USD 2.83, Expires 12/14/12, Broker Morgan Stanley & Co., Inc.

     65,000         (13,770)   

Bonanza Creek Energy, Inc., Strike Price USD 25.64, Expires 12/18/12, Broker Citigroup Global Markets, Inc.

     23,500         (23,970)   

Bonavista Energy Corp., Strike Price CAD 18.33, Expires 12/06/12, Broker Credit Suisse First Boston

     46,500         (14,626)   

Bunge Ltd., Strike Price USD 71.43, Expires 12/20/12, Broker Citigroup Global Markets, Inc.

     39,400         (58,706)   

Centerra Gold, Inc., Strike Price CAD 11.72, Expires 11/23/12, Broker Morgan Stanley & Co., Inc.

     76,800         (49,051)   

Chevron Corp., Strike Price USD 118.09, Expires 11/29/12, Broker Citigroup Global Markets, Inc.

     11,000         (960)   

Compass Minerals International, Inc., Strike Price USD 78.95, Expires 12/10/12, Broker UBS Securities LLC

     36,000         (76,650)   

Crescent Point Energy Corp., Strike Price CAD 43.02, Expires 1/07/13, Broker UBS Securities LLC

     45,000         (22,652)   

Deere & Co.:

     

Strike Price USD 82.41, Expires 11/30/12, Broker Morgan Stanley & Co., Inc.

     39,500         (166,854)   

Strike Price USD 86.78, Expires 11/30/12, Broker Banc of America Securities

     15,400         (21,856)   

DeeThree Exploration Ltd.:

     

Strike Price CAD 5.36, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

     28,000         (43,884)   

Strike Price CAD 5.36, Expires 12/03/12, Broker Morgan Stanley & Co., Inc.

     28,000         (44,895)   

Denbury Resources, Inc., Strike Price USD 16.68, Expires 12/11/12, Broker Credit Suisse First Boston

     64,500         (15,443)   

E.I. du Pont de Nemours & Co., Strike Price USD 51, Expires 12/17/12, Broker Morgan Stanley & Co., Inc.

     60,000         (3,357)   

Eldorado Gold Corp., Strike Price USD 15.90, Expires 12/18/12, Broker Deutsche Bank Securities Corp.

     108,000         (43,924)   

Endeavour Silver Corp., Strike Price USD 10.44, Expires 11/26/12, Broker Goldman Sachs & Co.

     77,000         (4,726)   

EQT Corp., Strike Price USD 60.56, Expires 12/07/12, Broker Goldman Sachs & Co.

     10,000         (20,328)   

Exxon Mobil Corp., Strike Price USD 93.15, Expires 11/26/12, Broker Morgan Stanley & Co., Inc.

     4,400         (2,737)   

First Majestic Silver Corp., Strike Price USD 24.77, Expires 12/18/12, Broker UBS Securities LLC

     67,000         (53,600)   
 

 

See Notes to Financial Statements.

                 
      ANNUAL REPORT       OCTOBER 31, 2012    85


 

 

Consolidated Schedule of Investments (continued)

 

 

BlackRock Resources & Commodities Strategy Trust (BCX)

(Percentages shown are based on Net Assets)

 

Options Written   Contracts     Value  

 

 

Over-the-Counter Call Options (continued)

  

Freeport-McMoRan Copper & Gold, Inc., Strike Price USD 39.84, Expires 12/11/12, Broker Citigroup Global Markets, Inc.

    64,500      $ (74,527

Fresnillo Plc:

   

Strike Price GBP 19.39, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

    38,600        (51,499

Strike Price GBP 19.45, Expires 12/12/12, Broker Morgan Stanley & Co., Inc.

    122,000        (184,715

Goldcorp, Inc., Strike Price USD 43.96, Expires 12/04/12, Broker Deutsche Bank Securities Corp.

    110,000        (267,467

Halliburton Co., Strike Price USD 35.30, Expires 12/10/12, Broker Morgan Stanley & Co., Inc.

    15,000        (4,354

Hi-Crush Partners LP, Strike Price USD 23.50, Expires 11/30/12, Broker Deutsche Bank Securities Corp.

    13,700        (295

Iluka Resources Ltd., Strike Price AUD 11.25, Expires 11/08/12, Broker Citigroup Global Markets, Inc.

    69,600        (8,705

Israel Chemicals Ltd., Strike Price ILS 47.57, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

    171,200        (124,653

Joy Global, Inc., Strike Price USD 64.63, Expires 12/20/12, Broker Morgan Stanley & Co., Inc.

    34,000        (95,099

K+S AG, Strike Price EUR 38.59, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

    37,800        (4,020

Kenmare Resources Plc:

   

Strike Price GBP 0.40, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

    877,000        (25,211

Strike Price GBP 0.39, Expires 12/12/12, Broker Deutsche Bank Securities Corp.

    685,500        (32,274

MAG Silver Corp.:

   

Strike Price CAD 11.55, Expires 12/06/12, Broker Morgan Stanley & Co., Inc.

    40,000        (52,949

Strike Price CAD 11.55, Expires 12/18/12, Broker Morgan Stanley & Co., Inc.

    40,000        (55,455

Magellan Midstream Partners LP, Strike Price USD 44.95, Expires 12/10/12, Broker Citigroup Global Markets, Inc.

    90,000        (22,281

MarkWest Energy Partners LP:

   

Strike Price USD 54.35, Expires 11/28/12, Broker Banc of America Securities

    10,000        (7,253

Strike Price USD 55.75, Expires 12/10/12, Broker UBS Securities LLC

    19,600        (9,261

McEwen Mining, Inc.:

   

Strike Price USD 4.73, Expires 12/13/12, Broker Morgan Stanley & Co., Inc.

    50,000        (21,422

Strike Price USD 4.79, Expires 12/18/12, Broker Morgan Stanley & Co., Inc.

    55,000        (23,013

Monsanto Co., Strike Price USD 87.35, Expires 12/06/12, Broker Goldman Sachs & Co.

    85,000        (153,159

National Oilwell Varco, Inc., Strike Price USD 84.99, Expires 11/08/12, Broker UBS Securities LLC

    9,500        (2
Options Written   Contracts     Value  

 

 

Over-the-Counter Call Options (continued)

  

New Gold, Inc., Strike Price USD 12.28, Expires 12/11/12, Broker Goldman Sachs & Co.

    180,000      $ (54,930

Newmont Mining Corp., Strike Price USD 55.22, Expires 12/18/12, Broker Goldman Sachs & Co.

    42,000        (62,534

Novagold Resources, Inc.:

   

Strike Price USD 5.21, Expires 12/20/12, Broker UBS Securities LLC

    60,000        (23,556

Strike Price USD 5.31, Expires 1/08/13, Broker Citigroup Global Markets, Inc.

    60,000        (26,825

ONEOK Partners LP:

   

Strike Price USD 59.75, Expires 11/15/12, Broker Citigroup Global Markets, Inc.

    50,000        (67,677

Strike Price USD 60.49, Expires 12/11/12, Broker UBS Securities LLC

    46,500        (58,318

Permian Basin Royalty Trust, Strike Price USD 14.52, Expires 12/17/12, Broker Banc of America Securities

    50,000        (13,560

Pioneer Natural Resources Co., Strike Price USD 107.11, Expires 11/30/12, Broker Deutsche Bank Securities Corp.

    7,000        (28,623

Plains All American Pipeline LP, Strike Price USD 45.05, Expires 1/10/13, Broker Deutsche Bank Securities Corp.

    35,000        (33,250

Plains Exploration & Production Co.: Strike Price USD 36.33, Expires 12/18/12, Broker Morgan Stanley & Co., Inc.

    13,000        (26,870

Strike Price USD 36.33, Expires 1/08/13, Broker Morgan Stanley & Co., Inc.

    13,000        (32,544

Potash Corp. of Saskatchewan, Inc.:

   

Strike Price USD 41.50, Expires 12/11/12, Broker Morgan Stanley & Co., Inc.

    97,000        (74,830

Strike Price USD 41.52, Expires 1/11/13, Broker Morgan Stanley & Co., Inc.

    97,000        (119,146

Rio Tinto Plc - ADR, Strike Price USD 52.40, Expires 12/11/12, Broker Banc of America Securities

    32,000        (41,471

Rosetta Resources, Inc., Strike Price USD 48.89, Expires 12/14/12, Broker UBS Securities LLC

    15,000        (20,332

Royal Dutch Shell Plc, Class A - ADR, Strike Price USD 74.22, Expires 11/29/12, Broker Goldman Sachs & Co.

    25,000        (338

Seabridge Gold, Inc.:

   

Strike Price USD 18.84, Expires 12/06/12, Broker Credit Suisse First Boston

    81,000        (26,739

Strike Price USD 18.84, Expires 12/18/12, Broker Credit Suisse First Boston

    81,000        (36,057

Seadrill Ltd., Strike Price NOK 229.99, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

    16,100        (10,894
 

 

See Notes to Financial Statements.

 

                 
86       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Consolidated Schedule of Investments (continued)

 

 

BlackRock Resources & Commodities Strategy Trust (BCX)

(Percentages shown are based on Net Assets)

 

Options Written   Contracts     Value  

 

 

Over-the-Counter Call Options (continued)

  

Ship Finance International Ltd.:

   

Strike Price USD 16.66, Expires 11/08/12, Broker Deutsche Bank Securities Corp.

    48,000      $ (323

Strike Price USD 15.75, Expires 12/17/12, Broker Citigroup Global Markets, Inc.

    57,500        (24,534

Silver Wheaton Corp., Strike Price USD 33.46, Expires 11/02/12, Broker Goldman Sachs & Co.

    232,500        (1,636,352

Silvercorp Metals, Inc., Strike Price USD 6.72, Expires 11/14/12, Broker Credit Suisse First Boston

    158,000        (17,167

SLC Agricola SA:

   

Strike Price BRL 22.58, Expires 11/13/12, Broker Banc of America Securities

    31,500        (61

Strike Price BRL 21.16, Expires 12/13/12, Broker Goldman Sachs & Co.

    26,300        (4,031

Strike Price BRL 20.71, Expires 12/19/12, Broker Credit Suisse First Boston

    16,000        (3,736

Strike Price BRL 19.34, Expires 1/10/13, Broker UBS Securities LLC

    32,900        (13,818

Sociedad Quimica y Minera de Chile
SA - ADR:

   

Strike Price USD 63.60, Expires 11/26/12, Broker Morgan Stanley & Co., Inc.

    18,000        (313

Strike Price USD 60.05, Expires 12/14/12, Broker UBS Securities LLC

    24,000        (9,060

Southwestern Energy Co., Strike Price USD 34.20, Expires 11/05/12, Broker Citigroup Global Markets, Inc.

    6,000        (5,064

Sprott Physical Gold Trust:

   

Strike Price USD 15.32, Expires 11/15/12, Broker UBS Securities LLC

    125,000        (800

Strike Price USD 15.13, Expires 11/27/12, Broker Citigroup Global Markets, Inc.

    162,000        (8,105
Options Written   Contracts     Value  

 

 

Over-the-Counter Call Options (concluded)

  

Statoil ASA, Strike Price NOK 148.37, Expires 11/28/12, Broker Banc of America Securities

    34,200      $ (2,784

Syngenta AG, Strike Price CHF 356.33, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

    15,600        (118,376

Technip SA:

   

Strike Price EUR 89.69, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

    2,000        (3,863

Strike Price EUR 91.58, Expires 11/28/12, Broker Citigroup Global Markets, Inc.

    1,900        (2,231

Uralkali OJSC - GDR, Strike Price USD 40.33, Expires 12/12/12, Broker Morgan Stanley & Co., Inc.

    84,200        (73,765

Valero Energy Corp., Strike Price USD 33.31, Expires 11/28/12, Broker Goldman Sachs & Co.

    25,500        (5,766

Whiting Petroleum Corp.:

   

Strike Price USD 45.66, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

    14,000        (6

Strike Price USD 45.66, Expires 11/15/12, Broker Morgan Stanley & Co., Inc.

    14,000        (3,141

Strike Price USD 50, Expires 12/07/12, Broker Goldman Sachs & Co.

    9,000        (1,852

Williams Partners LP, Strike Price USD 53.46, Expires 12/06/12, Broker Credit Suisse First Boston

    52,500        (35,898

 

 

Total Over-the-Counter Call Options

      (4,873,725

 

 

Total Options Written

(Premiums Received – $6,814,345) – (0.9)%

  

  

    (6,339,279

 

 

Total Investments Net of Options Written – 99.4%

  

    713,397,131   

Other Assets Less Liabilities – 0.6%

  

    4,618,815   
   

 

 

 

Net Assets – 100.0%

  

  $ 718,015,946   
 

 

 

 

 

(a) All or a portion of security has been pledged/segregated as collateral in connection with outstanding options written.
(b) Non-income producing security.
 

 

(c) Investments in issuers (whereby the Trust held 5% or more of the companies’ outstanding securities) that were considered to be an affiliate during the year ended October 31, 2012, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliate   

Shares
Held at
October 31,

2011

  

Shares

Purchased

  

Shares

Sold

  

Shares

Held at

October 31,

2012

  

Value at

October 31,

2012

  

Realized

Gain

   Income

Prospect Global Resources, Inc.

      2,884,615       2,884,615    $7,947,114      

 

(d) Represents the current yield as of report date.

 

(e) Investments in issuers considered to be an affiliate of the Trust during the year ended October 31, 2012, for purposes of Section 2(a)(3) of the Investment Company Act of 1940 were as follows:
Affiliate    Shares
Held at
October 31,
2011
   Net
Activity
  Shares
Held at
October 31,
2012
   Realized
Gain
   Income     

BlackRock Liquidity Funds, TempFund, Institutional Class

   90,423,660    (83,163,623)   7,260,037    $1,105    $32,498   

 

See Notes to Financial Statements.

                 
      ANNUAL REPORT       OCTOBER 31, 2012    87


 

 

Consolidated Schedule of Investments (concluded)

 

 

BlackRock Resources & Commodities Strategy Trust (BCX)

 

For Trust compliance purposes, the Trust’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Trust management. These definitions may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease.

 

Fair Value Measurements – Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows:

 

  Level 1 - unadjusted price quotations in active markets/exchanges for identical assets and liabilities that the Trust has the ability to access

 

  Level 2 - other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

  Level 3 - unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments and derivative financial instruments)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy as of October 31, 2012:

 

     Level 1     Level 2     Level 3   Total  

Assets:

       

Investments:

       

Long-Term Investments:

       

Common Stocks:

       

Chemicals

  $ 104,016,321      $ 40,804,164        $ 144,820,485   

Energy Equipment & Services

    12,229,046        3,185,767          15,414,813   

Food Products

    17,936,226                 17,936,226   

Machinery

    31,120,804                 31,120,804   

Metals & Mining

    210,018,646        19,136,937          229,155,583   

Oil, Gas & Consumable Fuels

    253,097,869        2,526,931          255,624,800   

Investment Companies

    18,403,662                 18,403,662   

Short-Term Securities

    7,260,037                 7,260,037   

 

 

Total

  $ 654,082,611      $ 65,653,799        $ 719,736,410   
 

 

 

 

 

     Level 1     Level 2     Level 3   Total  

Derivative Financial Instruments1

       

Liabilities:

       

Equity contracts

  $ (1,372,257   $ (4,967,022     $ (6,339,279

 

 

 

1

Derivative financial instruments are options, which are shown at value.

Certain of the Trust’s assets and liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2012, such assets and liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1   Level 2   Level 3   Total  

Assets:

       

Cash

  $770,959       $ 770,959   

Cash pledged as collateral for options written

  211,452         211,452   

Liabilities:

       

Foreign currency at value

    $(18,412)       (18,412

 

 

Total

  $982,411   $(18,412)     $ 963,999   
 

 

 

There were no transfers between levels during the year ended October 31, 2012.

 

 

See Notes to Financial Statements.

                 
88       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments
October 31, 2012

 

 

BlackRock S&P Quality Rankings Global Equity Managed Trust (BQY)

(Percentages shown are based on Net Assets)

 

Common Stocks    Shares      Value  

 

 

Australia – 3.9%

  

Australia & New Zealand Banking Group Ltd.

     19,900       $ 524,990   

BHP Billiton Ltd. - ADR (a)

     8,212         580,917   

National Australia Bank Ltd.

     38,200         1,020,891   

Santos Ltd.

     74,900         893,049   

Treasury Wine Estates Ltd.

     37,766         193,502   
     

 

 

 
        3,213,349   

 

 

Belgium – 0.6%

  

Mobistar SA

     4,720         124,864   

Solvay SA

     2,800         337,124   
        461,988   

 

 

Canada – 3.5%

  

Bank of Nova Scotia (a)

     12,700         689,837   

Enbridge, Inc. (a)

     27,000         1,074,323   

National Bank of Canada (a)

     5,600         432,749   

Suncor Energy, Inc. (a)

     3,650         122,501   

TransCanada Corp. (a)

     11,300         508,797   
        2,828,207   

 

 

France – 3.2%

  

Bouygues SA (a)

     8,323         200,039   

Sanofi

     3,500         307,394   

Total SA - ADR (a)

     30,900         1,557,360   

Vinci SA

     12,100         536,343   
        2,601,136   

 

 

Germany – 2.8%

  

Allianz SE

     4,200         521,744   

BASF SE

     10,600         879,270   

SAP AG - ADR (a)

     6,250         455,625   

Siemens AG - ADR (a)

     4,200         423,822   
        2,280,461   

 

 

Hong Kong – 2.2%

  

Hang Seng Bank Ltd.

     18,500         283,543   

Hopewell Holdings Ltd.

     154,500         555,406   

Power Assets Holdings Ltd.

     111,400         946,626   
        1,785,575   

 

 

Italy – 0.3%

  

Enel SpA

     58,100         218,789   

 

 

Japan – 2.2%

  

Canon, Inc. - ADR (a)

     10,600         340,790   

Oracle Corp. Japan

     10,700         475,844   

Ricoh Co. Ltd.

     42,000         351,493   

Takeda Pharmaceutical Co. Ltd.

     12,900         599,603   
        1,767,730   

 

 

Netherlands – 0.6%

  

Royal Dutch Shell Plc, Class A - ADR

     7,050         482,784   

 

 

Singapore – 1.0%

  

Keppel Corp., Ltd.

     59,800         520,288   

United Overseas Bank Ltd.

     21,347         318,343   
        838,631   

 

 

Spain – 0.3%

  

Iberdrola SA

     43,030         222,849   

 

 

Sweden – 2.8%

  

Hennes & Mauritz AB, Class B

     23,700         803,584   

Ratos AB, Class B

     41,800         358,897   

Scania AB, Class B

     40,500         772,767   

TeliaSonera AB

     55,400         364,213   
        2,299,461   

 

 

Switzerland – 0.9%

  

Nestle SA

     6,100         387,278   
Common Stocks    Shares      Value  

 

 

Switzerland (concluded)

  

Zurich Insurance Group AG (a)

     1,284       $ 316,531   
        703,809   

 

 

United Kingdom – 6.2%

  

AstraZeneca Plc

     17,700         820,840   

BHP Billiton Plc

     14,150         453,529   

British American Tobacco Plc

     17,300         858,080   

GlaxoSmithKline Plc

     32,425         726,568   

HSBC Holdings Plc - ADR (a)

     25,500         1,258,680   

Man Group Plc

     76,400         97,087   

SSE Plc

     35,000         818,629   
        5,033,413   

 

 

United States – 66.9%

  

3M Co. (a)

     13,100         1,147,560   

Abbott Laboratories (a)

     11,600         760,032   

Aflac, Inc. (a)

     8,100         403,218   

Altria Group, Inc.

     44,200         1,405,560   

Ameren Corp. (a)

     25,000         822,000   

American Express Co.

     9,700         542,909   

AT&T Inc.

     67,750         2,343,472   

Automatic Data Processing, Inc. (a)

     14,700         849,513   

Bank of America Corp. (a)

     20,300         189,196   

Bristol-Myers Squibb Co. (a)

     41,600         1,383,200   

Caterpillar, Inc. (a)

     11,550         979,555   

CenturyLink, Inc.

     29,500         1,132,210   

Chevron Corp.

     17,800         1,961,738   

The Chubb Corp.

     6,800         523,464   

Cincinnati Financial Corp. (a)

     12,600         501,984   

The Coca-Cola Co. (a)

     23,800         884,884   

Consolidated Edison, Inc.

     16,700         1,008,346   

Dominion Resources, Inc.

     18,500         976,430   

Emerson Electric Co.

     29,400         1,423,842   

Equity Residential - REIT (a)

     11,300         648,733   

Exxon Mobil Corp.

     28,500         2,598,345   

Frontier Communications Corp.

     208,300         983,176   

General Electric Co. (a)

     57,400         1,208,844   

General Mills, Inc. (a)

     21,000         841,680   

Genuine Parts Co. (a)

     6,600         413,028   

The Goldman Sachs Group, Inc. (a)

     3,100         379,409   

HCP, Inc. - REIT

     12,900         571,470   

Health Care REIT, Inc.

     11,400         677,502   

The Home Depot, Inc. (a)

     22,300         1,368,774   

Honeywell International, Inc. (a)

     13,800         845,112   

Hudson City Bancorp, Inc. (a)

     29,600         251,156   

Intel Corp. (a)

     44,700         966,637   

International Business Machines Corp.

     7,825         1,522,197   

Johnson & Johnson (a)

     17,500         1,239,350   

Kraft Foods Group, Inc. (b)

     10,933         497,233   

Liberty Property Trust - REIT (a)

     8,100         284,472   

M&T Bank Corp.

     5,200         541,320   

McDonald’s Corp. (a)

     13,900         1,206,520   

Merck & Co., Inc. (a)

     18,800         857,844   

MetLife, Inc. (a)

     8,000         283,920   

Microchip Technology, Inc. (a)

     21,300         667,755   

Microsoft Corp. (a)

     38,300         1,092,892   

Mondelez International, Inc., Class A (a)

     32,800         870,512   

NextEra Energy, Inc.

     11,600         812,696   

PepsiCo, Inc. (a)

     8,700         602,388   

Pfizer, Inc. (a)

     55,300         1,375,311   

Philip Morris International, Inc. (a)

     12,000         1,062,720   

PPG Industries, Inc. (a)

     6,800         796,144   

Prudential Financial, Inc. (a)

     15,100         861,455   

Reynolds American, Inc. (a)

     13,800         574,632   
 

 

See Notes to Financial Statements.

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    89


 

 

Schedule of Investments
(continued)

 

 

BlackRock S&P Quality Rankings Global Equity Managed Trust (BQY)

(Percentages shown are based on Net Assets)

 

Common Stocks    Shares      Value  

 

 

United States (concluded)

  

The Southern Co. (a)

     22,000       $ 1,030,480   

T. Rowe Price Group, Inc. (a)

     6,500         422,110   

U.S. Bancorp (a)

     24,400         810,324   

United Technologies Corp. (a)

     11,100         867,576   

Ventas, Inc. - REIT (a)

     12,113         766,390   

Verizon Communications, Inc. (a)

     31,500         1,406,160   

Wal-Mart Stores, Inc. (a)

     9,550         716,441   

The Walt Disney Co. (a)

     29,000         1,423,030   

Wells Fargo & Co. (a)

     22,800         768,132   
     

 

 

 
        54,352,983   

 

 

Total Long-Term Investments

(Cost – $76,618,724) – 97.4%

        79,091,165   

 

 
     
     
Short-Term Securities              

 

 

BlackRock Liquidity Funds, TempFund,
Institutional Class, 0.17% (c)(d)

     2,623,356         2,623,356   

 

 

Total Short-Term Securities

(Cost – $2,623,356) – 3.3%

        2,623,356   

 

 
     
     
Options Purchased    Contracts         

 

 

Exchange-Traded Call Options – 0.0%

  

Microsoft Corp., Strike Price USD 31, Expires 11/19/12

     150         375   

 

 

Total Options Purchased

(Cost – $604) – 0.0%

        375   

 

 

Total Investments Before Options Written

(Cost – $79,242,684) – 100.7%

  

  

     81,714,896   

 

 
     
     
Options Written              

 

 

Exchange-Traded Call Options – (0.3)%

  

3M Co., Strike Price USD 96, Expires 11/02/12

     52           

Abbott Laboratories, Strike Price USD 66, Expires 11/17/12

     45         (3,147

Aflac, Inc.:

     

Strike Price USD 47, Expires 11/19/12

     18         (5,238

Strike Price USD 49, Expires 11/19/12

     15         (1,935

Ameren Corp., Strike Price USD 33, Expires 11/01/12

     100         (648

Automatic Data Processing, Inc., Strike Price USD 60, Expires 11/19/12

     60         (900

Bank of America Corp., Strike Price USD 10, Expires 11/19/12

     80         (520

Bank of Nova Scotia, Strike Price CAD 54, Expires 11/19/12

     50         (3,429

BHP Billiton Ltd. - ADR, Strike Price USD 72.50, Expires 11/19/12

     33         (2,260

Bouygues SA, Strike Price EUR 22, Expires 11/16/12

     33         (336

Bristol-Myers Squibb Co., Strike Price USD 34, Expires 11/19/12

     81         (1,701

Canon, Inc. - ADR, Strike Price USD 36.50, Expires 11/17/12

     43         (42

Caterpillar, Inc., Strike Price USD 92.50, Expires 11/19/12

     46         (253
Options Written    Contracts      Value  

 

 

Exchange-Traded Call Options (continued)

  

Cincinnati Financial Corp., Strike Price USD 39.50, Expires 11/05/12

     50       $ (2,373

The Coca-Cola Co.:

     

Strike Price USD 38.75, Expires 11/19/12

     45         (248

Strike Price USD 40, Expires 11/19/12

     50         (75

Enbridge, Inc., Strike Price CAD 41, Expires 11/19/12

     110         (936

Equity Residential - REIT, Strike Price USD 60, Expires 11/19/12

     23         (345

General Electric Co.:

     

Strike Price USD 21, Expires 11/19/12

     115         (4,600

Strike Price USD 22, Expires 11/19/12

     115         (862

General Mills, Inc., Strike Price USD 38.50, Expires 11/05/12

     85         (13,285

Genuine Parts Co., Strike Price USD 65, Expires 11/19/12

     27         (405

The Goldman Sachs Group, Inc., Strike Price USD 122, Expires 11/17/12

     13         (3,641

The Home Depot, Inc., Strike Price USD 57.50, Expires 11/19/12

     90         (37,350

Honeywell International, Inc., Strike Price USD 59.15, Expires 11/05/12

     55         (11,644

HSBC Holdings Plc - ADR, Strike Price USD 48, Expires 11/19/12

     102         (18,462

Hudson City Bancorp, Inc., Strike Price USD 7, Expires 11/02/12

     120         (17,800

Intel Corp.:

     

Strike Price USD 23.10, Expires 11/17/12

     45         (102

Strike Price USD 28, Expires 11/19/12

     66         (66

Johnson & Johnson, Strike Price USD 70, Expires 11/19/12

     70         (8,890

Liberty Property Trust - REIT, Strike Price USD 37.50, Expires 11/01/12

     33           

McDonald’s Corp., Strike Price USD 94, Expires 11/09/12

     55         (1

Merck & Co., Inc.:

     

Strike Price USD 45.50, Expires 11/17/12

     38         (2,518

Strike Price USD 47, Expires 11/19/12

     37         (666

MetLife, Inc.:

     

Strike Price USD 37, Expires 11/19/12

     6         (156

Strike Price USD 37, Expires 12/24/12

     3         (201

Microchip Technology, Inc., Strike Price USD 35.75, Expires 11/02/12

     85           

Microsoft Corp.:

     

Strike Price USD 31.50, Expires 11/17/12

     150         (263

Strike Price USD 30, Expires 12/24/12

     150         (4,425

Mondelez International, Inc., Class A, Strike Price USD 41, Expires 11/05/12

     105         (46,841

National Bank of Canada, Strike Price CAD 75.50, Expires 11/19/12

     23         (4,468

PepsiCo, Inc., Strike Price USD 72.50, Expires 11/19/12

     35         (175

Pfizer, Inc., Strike Price USD 25, Expires 11/19/12

     225         (7,537

Philip Morris International, Inc., Strike Price USD 93, Expires 11/02/12

     48           

PPG Industries, Inc., Strike Price USD 120, Expires 11/19/12

     28         (2,450

Prudential Financial, Inc., Strike Price USD 56, Expires 11/02/12

     60         (7,063

Reynolds American, Inc., Strike Price USD 47, Expires 11/19/12

     55         (275

 

 

 

See Notes to Financial Statements.

 

                 
90       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments

(continued)

 

 

BlackRock S&P Quality Rankings Global Equity Managed Trust (BQY)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Exchange-Traded Call Options (concluded)

  

SAP AG - ADR, Strike Price USD 75, Expires 11/19/12

     25       $ (1,688

Siemens AG - ADR, Strike Price USD 104.95, Expires 11/17/12

     17         (553

The Southern Co., Strike Price USD 47, Expires 12/24/12

     88         (4,532

Suncor Energy, Inc., Strike Price CAD 34, Expires 11/19/12

     15         (661

T. Rowe Price Group, Inc., Strike Price USD 65, Expires 11/19/12

     26         (2,860

Total SA - ADR:

     

Strike Price USD 50, Expires 11/19/12

     62         (7,595

Strike Price USD 52.50, Expires 11/19/12

     62         (1,395

TransCanada Corp., Strike Price CAD 45, Expires 11/19/12

     45         (1,915

U.S. Bancorp, Strike Price USD 34, Expires 11/02/12

     97         (89

United Technologies Corp., Strike Price USD 80, Expires 11/19/12

     19         (883

Ventas, Inc. - REIT, Strike Price USD 65, Expires 11/19/12

     48         (840

Verizon Communications, Inc., Strike Price USD 44.55, Expires 11/02/12

     125         (3,069

Wal-Mart Stores, Inc., Strike Price USD 75, Expires 11/19/12

     38         (4,826

The Walt Disney Co., Strike Price USD 51, Expires 11/13/12

     115         (2,663

Wells Fargo & Co.:

     

Strike Price USD 34.75, Expires 11/05/12

     60         (190

Strike Price USD 35.50, Expires 11/17/12

     18         (112

Strike Price USD 36, Expires 11/19/12

     13         (46

Zurich Insurance Group AG, Strike Price CHF 240, Expires 11/16/12

     52         (857

 

 

Total Exchange-Traded Call Options

        (253,306

 

 

Over-the-Counter Call Options – (0.3)%

  

Allianz SE, Strike Price EUR 96.25, Expires

     

11/13/12, Broker Citigroup Global Markets, Inc.

     1,700         (1,864

Altria Group, Inc., Strike Price USD 34.23,

     

Expires 1/02/13, Broker Morgan Stanley & Co., Inc.

     17,500         (1,493

American Express Co., Strike Price USD 58.94,

     

Expires 11/15/12, Broker Morgan Stanley & Co., Inc.

     4,000         (387

AstraZeneca Plc, Strike Price GBP 29.37, Expires

     

11/06/12, Broker UBS Securities LLC

     7,000         (397

AT&T Inc.:

     

Strike Price USD 36.97, Expires 11/27/12, Broker Morgan Stanley & Co., Inc.

     12,000         (333

Strike Price USD 38.86, Expires 12/07/12, Broker Morgan Stanley & Co., Inc.

     15,000         (23

Australia & New Zealand Banking Group Ltd., Strike Price AUD 26.15, Expires 12/05/12,

     

Broker Citigroup Global Markets, Inc.

     8,000         (644

BASF SE, Strike Price EUR 66.53, Expires

     

11/13/12, Broker Morgan Stanley & Co., Inc.

     4,300         (1,566

BHP Billiton Plc, Strike Price GBP 18.14, Expires 11/13/12, Broker Citigroup Global Markets, Inc.

     5,700         (15,832
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

Bristol-Myers Squibb Co., Strike Price USD 32.29, Expires 11/02/12, Broker Goldman Sachs & Co.

     8,500       $ (8,114

British American Tobacco Plc, Strike Price GBP 31.59, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     7,000         (1,531

CenturyLink, Inc.:

     

Strike Price USD 40.58, Expires 12/03/12, Broker Citigroup Global Markets, Inc.

     5,900         (518

Strike Price USD 40.58, Expires 12/17/12, Broker Citigroup Global Markets, Inc.

     5,900         (887

Chevron Corp., Strike Price USD 118.09, Expires 11/29/12, Broker Citigroup Global Markets, Inc.

     7,000         (611

The Chubb Corp., Strike Price USD 77.50,

     

Expires 11/29/12, Broker Deutsche Bank Securities Corp.

     2,800         (3,656

Consolidated Edison, Inc., Strike Price USD 64.22, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

     6,500           

Dominion Resources, Inc.:

     

Strike Price USD 54.20, Expires 11/07/12, Broker Morgan Stanley & Co., Inc.

     3,700         (67

Strike Price USD 51.92, Expires 1/03/13, Broker Citigroup Global Markets, Inc.

     3,700         (4,969

Emerson Electric Co., Strike Price USD 50.64, Expires 11/01/12, Broker Banc of America Securities

     11,700           

Enel SpA, Strike Price EUR 3.01, Expires 11/13/12, Broker Citigroup Global Markets, Inc.

     23,300         (555

Exxon Mobil Corp.:

     

Strike Price USD 88.35, Expires 11/09/12, Broker Morgan Stanley & Co., Inc.

     4,700         (13,699

Strike Price USD 93.15, Expires 11/26/12, Broker Morgan Stanley & Co., Inc.

     6,700         (4,168

Frontier Communications Corp.:

     

Strike Price USD 4.80, Expires 11/07/12, Broker UBS Securities LLC

     43,500         (2,053

Strike Price USD 4.95, Expires 11/07/12, Broker UBS Securities LLC

     40,000         (541

GlaxoSmithKline Plc, Strike Price GBP 14.36, Expires 11/13/12, Broker Citigroup Global Markets, Inc.

     13,000         (416

Hang Seng Bank Ltd., Strike Price HKD 118.17, Expires 11/08/12, Broker UBS Securities LLC

     7,400         (1,402

HCP, Inc. - REIT:

     

Strike Price USD 45.62, Expires 12/05/12, Broker Citigroup Global Markets, Inc.

     2,600         (713

Strike Price USD 45.62, Expires 12/19/12, Broker Citigroup Global Markets, Inc.

     2,600         (1,260

Health Care REIT, Inc., Strike Price USD 58.91,

     

Expires 11/30/12, Broker Banc of America Securities

     4,500         (4,911
 

 

See Notes to Financial Statements.

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    91


 

 

Schedule of Investments

(continued)

 

 

BlackRock S&P Quality Rankings Global Equity Managed Trust (BQY)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

Hennes & Mauritz AB, Class B, Strike Price SEK 253.12, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     9,500       $ (2

Hopewell Holdings Ltd., Strike Price HKD 26.47, Expires 11/08/12, Broker Deutsche Bank Securities Corp.

     62,816         (19,302

Iberdrola SA, Strike Price EUR 3.68, Expires 11/13/12, Broker Banc of America Securities

     17,000         (7,297

Intel Corp., Strike Price USD 21.59, Expires 11/27/12, Broker Morgan Stanley & Co., Inc.

     6,700         (3,171

International Business Machines Corp., Strike Price USD 207.91, Expires 12/07/12, Broker Banc of America Securities

     3,100         (1,551

Keppel Corp. Ltd., Strike Price SGD 11.60, Expires 11/08/12, Broker Citigroup Global Markets, Inc.

     24,000         (22

Kraft Foods Group, Inc., Strike Price USD 47.27, Expires 12/06/12, Broker Deutsche Bank Securities Corp.

     900         (205

M&T Bank Corp., Strike Price USD 89.10, Expires 11/02/12, Broker Goldman Sachs & Co.

     2,000         (29,971

Man Group Plc, Strike Price GBP 0.84, Expires 11/13/12, Broker Citigroup Global Markets, Inc.

     31,000         (397

MetLife, Inc., Strike Price USD 36.11, Expires 11/14/12, Broker Banc of America Securities

     2,000         (1,202

Mobistar SA, Strike Price EUR 26.95, Expires 11/13/12, Broker Morgan Stanley & Co., Inc.

     2,000           

Mondelez International, Inc., Class A, Strike Price USD 27.58, Expires 12/06/12, Broker Deutsche Bank Securities Corp.

     2,500         (588

National Australia Bank Ltd., Strike Price AUD 25.81, Expires 11/08/12, Broker Morgan Stanley & Co., Inc.

     15,300         (3,300

Nestle SA, Strike Price CHF 61.76, Expires 11/06/12, Broker UBS Securities LLC

     2,500         (12

NextEra Energy, Inc., Strike Price USD 69.81, Expires 12/04/12, Broker Goldman Sachs & Co.

     4,600         (5,153

Oracle Corp. Japan, Strike Price JPY 3,846.85, Expires 11/08/12, Broker Banc of America Securities

     4,300         (352

Power Assets Holdings Ltd., Strike Price HKD 64.86, Expires 11/08/12, Broker UBS Securities LLC

     44,500         (7,533

Ratos AB, Class B, Strike Price SEK 60.02, Expires 11/13/12, Broker UBS Securities LLC

     16,800         (562
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (concluded)

  

Ricoh Co. Ltd., Strike Price JPY 695.89, Expires 11/08/12, Broker Banc of America Securities

     17,000       $ (4,660

Royal Dutch Shell Plc, Class A - ADR, Strike Price USD 74.22, Expires 11/29/12, Broker Goldman Sachs & Co.

     2,800         (38

Sanofi, Strike Price EUR 69.16, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     1,400         (119

Santos Ltd., Strike Price AUD 12.02, Expires 11/08/12, Broker Morgan Stanley & Co., Inc.

     29,900         (1,365

Scania AB, Class B, Strike Price SEK 122.71, Expires 11/06/12, Broker Citigroup Global Markets, Inc.

     16,200         (9,996

Scottish & Southern Energy Plc, Strike Price GBP 13.77, Expires 11/13/12, Broker UBS Securities LLC

     14,000         (16,280

Solvay SA, Strike Price EUR 92.62, Expires 11/13/12, Broker Citigroup Global Markets, Inc.

     1,200         (3,157

Takeda Pharmaceutical Co. Ltd., Strike Price JPY 3,743.63, Expires 11/08/12, Broker Banc of America Securities

     5,200         (2,423

TeliaSonera AB, Strike Price SEK 49.22, Expires 11/13/12, Broker Morgan Stanley & Co., Inc.

     22,200         (24

United Overseas Bank Ltd., Strike Price SGD 19.84, Expires 11/08/12, Broker UBS Securities LLC

     8,000           

United Technologies Corp., Strike Price USD 78.65, Expires 11/06/12, Broker Morgan Stanley & Co., Inc.

     2,500         (1,337

Vinci SA, Strike Price EUR 37.22, Expires 11/13/12, Broker Morgan Stanley & Co., Inc.

     4,900         (211

 

 

Total Over-the-Counter Call Options

        (192,840

 

 

Total Options Written

(Premiums Received – $680,823) – (0.6)%

  

  

     (446,146

 

 

Total Investments Net of Options Written – 100.1%

  

     81,268,750   

Liabilities in Excess of Other Assets – (0.1)%

  

     (82,581
     

 

 

 

Net Assets – 100.0%

      $ 81,186,169   
     

 

 

 

 

(a) All or a portion of security has been pledged/segregated as collateral in connection with outstanding options written.
(b) Non-income producing security.
(c) Represents the current yield as of report date.

 

 

 

(d) Investments in issuers considered to be an affiliate of the Trust during the year ended October 31, 2012, for purposes of Section 2(a)(3) of the Investment Company Act of 1940 were as follows:
Affiliate    Shares
Held at
October 31,
2011
     Net
Activity
    Shares
Held at
October 31,
2012
     Realized
Gain
   Income
           

BlackRock Liquidity Funds, TempFund, Institutional Class

     10,393,859         (7,770,503     2,623,356       $130    $6,659

 

See Notes to Financial Statements.

 

                 
92       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments
(concluded)

 

 

BlackRock S&P Quality Rankings Global Equity Managed Trust  (BQY)

 

   

Foreign currency exchange contracts as of October 31, 2012 were as follows:

 

Currency

Purchased

   Currency
Sold
     Counterparty      Settlement
Date
     Unrealized
Depreciation
 
USD     5,999    CAD      6,000         Citigroup, Inc.         11/01/12         $  (9

 

 

 

   

Fair Value Measurements – Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows:

 

   

Level 1 - unadjusted price quotations in active markets/exchanges for identical assets and liabilities that the Trust has the ability to access

 

   

Level 2 - other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

   

Level 3 - unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments and derivative financial instruments)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy as of October 31, 2012:

 

     Level 1     Level 2     Level 3   Total  

Assets:

       

Investments:

       

  Long-Term Investments:

  

   

    Common Stocks:

  

   

Australia

  $ 580,917      $ 2,632,432        $ 3,213,349   

Belgium

    124,864        337,124          461,988   

Canada

    2,828,207                 2,828,207   

France

    1,557,360        1,043,776          2,601,136   

Germany

    879,447        1,401,014          2,280,461   

Hong Kong

           1,785,575          1,785,575   

Italy

           218,789          218,789   

Japan

    340,790        1,426,940          1,767,730   

Netherlands

    482,784                 482,784   

Singapore

           838,631          838,631   

Spain

           222,849          222,849   

Sweden

           2,299,461          2,299,461   

Switzerland

           703,809          703,809   

United Kingdom

    1,258,680        3,774,733          5,033,413   

United States

    54,352,983                 54,352,983   

  Short-Term Securities

    2,623,356                 2,623,356   

 

 

Total

  $ 65,029,388      $ 16,685,133        $ 81,714,521   
 

 

 

 

 

      Level 1     Level 2     Level 3    Total  

Derivative Financial Instruments1

         

Assets:

         

Equity contracts

   $ 375                $ 375   

Liabilities:

         

Equity contracts

     (136,069   $ (310,077        (446,146

Foreign currency exchange contracts

     (9               (9

 

 

Total

   $ (135,703   $ (310,077      $ (445,780
  

 

 

 

 

1

Derivative financial instruments are foreign currency exchange contracts and options. Foreign currency exchange contracts are valued at the unrealized appreciation/depreciation on the instrument and options are shown at value.

Certain of the Trust’s assets are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2012, such assets are categorized within the disclosure hierarchy as follows:

 

      Level 1      Level 2    Level 3    Total  

Assets:

           

Cash

   $ 6,550             $ 6,550   

Foreign currency at value

     31,898               31,898   

 

 

Total

   $ 38,448             $ 38,448   
  

 

 

 

There were no transfers between levels during the year ended October 31, 2012.

 

 

See Notes to Financial Statements.

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    93


 

 

Schedule of Investments October 31, 2012

 

 

BlackRock Utility and Infrastructure Trust (BUI)

(Percentages shown are based on Net Assets)

 

Common Stocks    Shares      Value  

 

 

Australia – 2.0%

  

Transurban Group

     1,070,800       $ 6,758,456   

 

 

Brazil – 12.5%

  

CCR SA

     1,143,000         10,050,949   

Cia de Saneamento Basico do Estado de Sao Paulo

     141,900         6,007,022   

Cia de Saneamento de Minas Gerais - COPASA

     331,100         7,815,137   

Cia Energetica de Minas Gerais - ADR

     371,500         4,454,285   

EDP - Energias do Brasil SA

     657,900         4,113,798   

Tractebel Energia SA

     603,300         10,396,347   
     

 

 

 
        42,837,538   

 

 

Canada – 4.5%

  

BCE, Inc.

     113,100         4,937,946   

Pembina Pipeline Corp. (a)

     84,800         2,371,428   

Shaw Communications, Inc., Class B (a)

     150,900         3,287,694   

TransCanada Corp. (a)

     107,100         4,822,315   
     

 

 

 
        15,419,383   

 

 

France – 0.9%

  

Vinci SA

     65,200         2,890,045   

 

 

Germany – 1.6%

  

E.ON AG

     234,300         5,333,833   

 

 

Hong Kong – 3.8%

  

China Merchants Holdings International Co. Ltd.

     1,277,000         4,212,515   

Guangdong Investments Ltd.

     4,544,000         3,709,264   

Power Assets Holdings Ltd.

     598,000         5,081,531   
     

 

 

 
        13,003,310   

 

 

Italy – 3.4%

  

Atlantia SpA

     376,770         6,231,751   

Enel SpA

     619,600         2,333,246   

Snam SpA

     688,600         3,047,076   
     

 

 

 
        11,612,073   

 

 

Norway – 1.4%

  

Telenor ASA

     251,200         4,940,632   

 

 

United Kingdom – 7.1%

  

BT Group Plc

     1,949,900         6,701,061   

National Grid Plc

     944,600         10,772,829   

Severn Trent Plc

     176,700         4,582,786   

Vodafone Group Plc - ADR

     84,700         2,305,534   
     

 

 

 
        24,362,210   

 

 

United States – 61.3%

  

Access Midstream Partners LP

     68,471         2,409,494   

Alliant Energy Corp.

     129,500         5,788,650   

American Electric Power Co., Inc. (a)

     58,400         2,595,296   

American Tower Corp. - REIT (a)

     152,100         11,451,609   

American Water Works Co., Inc.

     179,200         6,583,808   

Aqua America, Inc.

     303,400         7,703,326   

AT&T Inc. (a)

     170,500         5,897,595   

CenturyLink, Inc.

     159,600         6,125,448   

CMS Energy Corp.

     274,800         6,683,136   

Consolidated Edison, Inc. (a)

     75,300         4,546,614   

Crown Castle International Corp. (a)(b)

     24,100         1,608,675   

DCP Midstream Partners LP

     30,249         1,347,895   

Dominion Resources, Inc.

     90,700         4,787,146   

Duke Energy Corp. (a)

     72,168         4,740,716   

Edison International (a)

     146,400         6,872,016   

Enbridge Energy Partners LP (a)

     30,089         902,670   

Energy Transfer Partners LP (a)

     31,100         1,331,080   

Entergy Corp. (a)

     39,600         2,874,168   

Enterprise Products Partners LP (a)

     27,700         1,460,067   

Exelon Corp.

     69,300         2,479,554   
Common Stocks    Shares      Value  

 

 

United States (concluded)

  

FirstEnergy Corp. (a)

     106,400       $ 4,864,608   

Frontier Communications Corp. (a)

     793,400         3,744,848   

Hi-Crush Partners LP (b)

     75,700         1,551,850   

ITC Holdings Corp.

     48,800         3,885,456   

Kinder Morgan Energy Partners LP (a)

     10,833         906,289   

MarkWest Energy Partners LP (a)

     56,548         3,066,598   

NextEra Energy, Inc.

     120,900         8,470,254   

Northeast Utilities

     73,000         2,868,900   

NorthWestern Corp.

     161,100         5,768,991   

NRG Energy, Inc. (a)

     183,800         3,962,728   

NV Energy, Inc. (a)

     196,000         3,725,960   

OGE Energy Corp.

     109,600         6,310,768   

ONEOK Partners LP

     41,140         2,507,483   

Pepco Holdings, Inc.

     233,000         4,629,710   

PG&E Corp.

     110,400         4,694,208   

Pinnacle West Capital Corp.

     72,100         3,819,137   

Plains All American Pipeline LP (a)

     67,878         3,080,304   

PPL Corp.

     79,100         2,339,778   

Public Service Enterprise Group, Inc.

     160,201         5,132,840   

SBA Communications Corp,
Class A (a)(b)

     24,200         1,612,446   

Seadrill Partners LLC (b)

     40,600         976,430   

Sempra Energy (a)

     77,300         5,391,675   

The Southern Co. (a)

     179,400         8,403,096   

Targa Resources Partners LP

     43,419         1,818,388   

Verizon Communications, Inc. (a)

     234,800         10,481,472   

Westar Energy, Inc.

     90,500         2,687,850   

Western Gas Partners LP

     24,814         1,265,018   

Williams Partners LP

     28,390         1,504,102   

Wisconsin Energy Corp.

     113,600         4,370,192   

Xcel Energy, Inc.

     134,000         3,785,500   

Xylem, Inc. (a)

     156,500         3,796,690   
     

 

 

 
        209,612,532   

 

 

Total Long-Term Investments

     

(Cost – $ 309,656,178) – 98.5%

        336,770,012   

 

 

    

     
          

    

     

Short-Term Securities

     

 

 

BlackRock Liquidity Funds, TempFund, Institutional Class, 0.17% (c)(d)

     7,229,592         7,229,592   

 

 

Total Short-Term Securities

(Cost – $ 7,229,592) – 2.1%

        7,229,592   

 

 

Total Investments Before Options Written

(Cost – $ 316,885,770) – 100.6%

  

  

     343,999,604   

 

 

    

     
          

    

     
Options Written    Contracts         

 

 

Exchange-Traded Call Options – (0.2)%

  

American Electric Power Co., Inc.:

     

Strike Price USD 42, Expires 11/19/12

     102         (25,245

Strike Price USD 43, Expires 11/19/12

     102         (14,790

American Tower Corp.- REIT:

     

Strike Price USD 72.50, Expires 11/19/12

     360         (115,200

Strike Price USD 75, Expires 11/19/12

     140         (18,550
 

 

See Notes to Financial Statements.

                 
94       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (continued)

 

 

BlackRock Utility and Infrastructure Trust (BUI)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Exchange-Traded Call Options (concluded)

     

AT&T Inc.:

     

Strike Price USD 37, Expires 11/19/12

     125       $ (188

Strike Price USD 38, Expires 11/19/12

     125         (125

Strike Price USD 39, Expires 11/19/12

     50         (50

Consolidated Edison, Inc., Strike Price USD 65, Expires 11/19/12

     25         (125

Crown Castle International Corp., Strike Price USD 65.50, Expires 12/03/12

     80         (18,638

Duke Energy Corp.:

     

Strike Price USD 65.55, Expires 11/02/12

     50         (1,434

Strike Price USD 65, Expires 11/19/12

     190         (19,950

Edison International, Strike Price USD 45, Expires 11/19/12

     400         (83,000

Enbridge Energy Partners LP, Strike Price USD 30, Expires 11/19/12

     100         (2,500

Energy Transfer Partners LP, Strike Price USD 45, Expires 11/19/12

     100         (1,500

Entergy Corp., Strike Price USD 70, Expires 11/19/12

     215         (55,900

Enterprise Products Partners LP, Strike Price USD 55, Expires 12/24/12

     100         (3,500

FirstEnergy Corp., Strike Price USD 47, Expires 1/21/13

     140         (5,950

Frontier Communications Corp., Strike Price USD 5, Expires 11/19/12

     250         (1,875

Kinder Morgan Energy Partners LP, Strike Price USD 85, Expires 11/19/12

     40         (1,860

MarkWest Energy Partners LP:

     

Strike Price USD 55, Expires 11/19/12

     33         (908

Strike Price USD 55, Expires 1/21/13

     60         (6,600

NRG Energy, Inc., Strike Price USD 24, Expires 11/19/12

     300         (4,500

NV Energy, Inc., Strike Price USD 18.50, Expires 12/11/12

     330         (19,941

Pembina Pipeline Corp., Strike Price CAD 28, Expires 12/24/12

     300         (10,513

Plains All American Pipeline LP, Strike Price USD 45, Expires 11/19/12

     240         (17,400

SBA Communications Corp, Class A, Strike Price USD 65.50, Expires 12/03/12

     85         (15,730

Sempra Energy:

     

Strike Price USD 65, Expires 11/19/12

     80         (36,600

Strike Price USD 67.50, Expires 11/19/12

     175         (41,563

Shaw Communications, Inc., Class B, Strike Price CAD 20.50, Expires 11/19/12

     500         (63,579

The Southern Co., Strike Price USD 47, Expires 12/24/12

     598         (30,797

TransCanada Corp., Strike Price CAD 45, Expires 11/19/12

     360         (15,319

Verizon Communications, Inc.:

     

Strike Price USD 44.55, Expires 11/02/12

     270         (6,628

Strike Price USD 46, Expires 11/19/12

     75         (1,088

Xylem, Inc., Strike Price USD 25, Expires 11/19/12

     100         (3,250

 

 

Total Exchange-Traded Call Options

        (644,796

 

 

Over-the-Counter Call Options – (0.6)%

  

Access Midstream Partners LP, Strike Price USD 32.89, Expires 11/27/12, Broker Banc of America Securities

     20,000         (45,551
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

     

Alliant Energy Corp., Strike Price USD 45.15, Expires 11/02/12, Broker Goldman Sachs & Co.

     46,000       $ (1,184

American Water Works Co., Inc.:

     

Strike Price USD 36.06, Expires 11/29/12, Broker UBS Securities LLC

     20,000         (20,771

Strike Price USD 36.06, Expires 12/11/12, Broker UBS Securities LLC

     20,000         (22,891

Strike Price USD 37.63, Expires 1/02/13, Broker Morgan Stanley & Co., Inc.

     20,000         (13,041

Aqua America, Inc.:

     

Strike Price USD 24.34, Expires 11/12/12, Broker Morgan Stanley & Co., Inc.

     5,000         (5,241

Strike Price USD 25.26, Expires 11/29/12, Broker Morgan Stanley & Co., Inc.

     50,000         (23,576

Strike Price USD 25.25, Expires 12/14/12, Broker Citigroup Global Markets, Inc.

     45,000         (25,312

AT&T Inc.:

     

Strike Price USD 36.97, Expires 11/27/12, Broker Morgan Stanley & Co., Inc.

     18,000         (499

Strike Price USD 38.86, Expires 12/07/12, Broker Morgan Stanley & Co., Inc.

     9,000         (14

Atlantia SpA, Strike Price EUR 12.74, Expires 11/13/12, Broker Citigroup Global Markets, Inc.

     124,400         (39,607

BCE, Inc.:

     

Strike Price USD 45.20, Expires 11/05/12, Broker Morgan Stanley & Co., Inc.

     24,500         (104

Strike Price USD 44.52, Expires 12/04/12, Broker Morgan Stanley & Co., Inc.

     8,000         (1,922

Strike Price USD 44.28, Expires 1/04/13, Broker Deutsche Bank Securities Corp.

     5,000         (2,307

BT Group Plc, Strike Price GBP 2.35, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     645,000         (5,775

CenturyLink, Inc.:

     

Strike Price USD 43.13, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

     5,500         —     

Strike Price USD 40.58, Expires 12/03/12, Broker Citigroup Global Markets, Inc.

     23,800         (2,089

Strike Price USD 40.58, Expires 12/17/12, Broker Citigroup Global Markets, Inc.

     23,800         (3,578

China Merchants Holdings International Co. Ltd.:

     

Strike Price HKD 24.59, Expires 11/08/12, Broker Deutsche Bank Securities Corp.

     210,000         (36,637

Strike Price HKD 24.69, Expires 12/05/12, Broker Citigroup Global Markets, Inc.

     212,000         (45,202
 

 

 

See Notes to Financial Statements.

    
                 
      ANNUAL REPORT       OCTOBER 31, 2012    95


 

 

Schedule of Investments (continued)

 

 

BlackRock Utility and Infrastructure Trust (BUI)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts              Value  

 

 

Over-the-Counter Call Options (continued)

  

  

Cia de Saneamento Basico do Estado de Sao Paulo, Strike Price BRL 80.27, Expires 11/07/12, Broker Credit Suisse First Boston

     46,800       $ (134,561

Cia de Saneamento de Minas Gerais - COPASA:

     

Strike Price BRL 46.29, Expires 11/07/12, Broker Credit Suisse First Boston

     35,700         (34,474

Strike Price BRL 48.43, Expires 12/13/12, Broker Citigroup Global Markets, Inc.

     37,900         (38,253

Strike Price BRL 49.18, Expires 12/19/12, Broker UBS Securities LLC

     35,700         (33,208

Cia Energetica de Minas Gerais - ADR, Strike Price USD 12.57, Expires 12/14/12, Broker Deutsche Bank Securities Corp.

     55,500         (18,348

CMS Energy Corp., Strike Price USD 23.35, Expires 11/27/12, Broker Morgan Stanley & Co., Inc.

     91,500         (87,244

Companhia de Concessoes Rodoviarias:

     

Strike Price BRL 16.48, Expires 11/07/12, Broker Citigroup Global Markets, Inc.

     89,600         (61,421

Strike Price BRL 17.83, Expires 11/13/12, Broker Deutsche Bank Securities Corp.

     192,600         (39,606

Strike Price BRL 18.32, Expires 12/13/12, Broker Goldman Sachs & Co.

     95,000         (25,116

Consolidated Edison, Inc., Strike Price USD 64.22, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

     22,500           

DCP Midstream Partners LP, Strike Price USD 43.50, Expires 11/02/12, Broker Deutsche Bank Securities Corp.

     10,500         (11,082

Dominion Resources, Inc.:

     

Strike Price USD 54.20, Expires 11/07/12, Broker Morgan Stanley & Co., Inc.

     15,000         (270

Strike Price USD 51.92, Expires 1/03/13, Broker Citigroup Global Markets, Inc.

     15,000         (20,145

E.ON AG, Strike Price EUR 19.97, Expires 11/13/12, Broker Citigroup Global Markets, Inc.

     77,400         (110

Edison International, Strike Price USD 45.25, Expires 11/29/12, Broker Goldman Sachs & Co.

     9,000         (15,982

EDP - Energias do Brasil SA:

     

Strike Price BRL 12.86, Expires 11/07/12, Broker Citigroup Global Markets, Inc.

     87,100         (5,421

Strike Price BRL 12.47, Expires 12/13/12, Broker Citigroup Global Markets, Inc.

     45,000         (13,405

Strike Price BRL 12.82, Expires 12/19/12, Broker Deutsche Bank Securities Corp.

     87,100         (19,877

Enel SpA, Strike Price EUR 2.98, Expires 12/07/12, Broker Morgan Stanley & Co., Inc.

     217,000         (18,828

Exelon Corp., Strike Price USD 37, Expires 11/01/12, Broker Goldman Sachs & Co.

     37,000           

FirstEnergy Corp., Strike Price USD 46.52, Expires 11/13/12, Broker Goldman Sachs & Co.

     21,500         (2,476
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

  

Frontier Communications Corp.:

     

Strike Price USD 4.95, Expires 11/07/12, Broker UBS Securities LLC

     141,000       $ (1,908

Strike Price USD 4.90, Expires 11/29/12, Broker UBS Securities LLC

     121,000         (10,035

Guangdong Investments Ltd., Strike Price HKD 5.91, Expires 11/08/12, Broker Morgan Stanley & Co., Inc.

     1,600,000         (85,526

Hi-Crush Partners LP, Strike Price USD 23.50, Expires 11/30/12, Broker Deutsche Bank Securities Corp.

     4,300         (93

ITC Holdings Corp., Strike Price USD 73.83, Expires 11/02/12, Broker Citigroup Global Markets, Inc.

     17,000         (98,335

MarkWest Energy Partners LP:

     

Strike Price USD 54.35, Expires 11/28/12, Broker Banc of America Securities

     5,000         (3,626

Strike Price USD 55.75, Expires 12/10/12, Broker UBS Securities LLC

     5,400         (2,551

National Grid Plc:

     

Strike Price GBP 6.97, Expires 11/13/12, Broker Citigroup Global Markets, Inc.

     234,000         (48,614

Strike Price GBP 7.02, Expires 11/13/12, Broker Deutsche Bank Securities Corp.

     80,700         (13,307

NextEra Energy, Inc.:

     

Strike Price USD 70, Expires 11/02/12, Broker Goldman Sachs & Co.

     20,800         (6,076

Strike Price USD 69.81, Expires 12/04/12, Broker Goldman Sachs & Co.

     19,500         (21,846

Northeast Utilities:

     

Strike Price USD 37.36, Expires 11/14/12, Broker Morgan Stanley & Co., Inc.

     6,000         (11,411

Strike Price USD 38.12, Expires 12/03/12, Broker Morgan Stanley & Co., Inc.

     13,000         (16,820

Strike Price USD 37.36, Expires 12/14/12, Broker Morgan Stanley & Co., Inc.

     6,000         (11,608

NorthWestern Corp.:

     

Strike Price USD 36.60, Expires 12/05/12, Broker Citigroup Global Markets, Inc.

     26,800         (7,628

Strike Price USD 35.80, Expires 12/17/12, Broker Morgan Stanley & Co., Inc.

     26,800         (17,588

NRG Energy, Inc., Strike Price USD 22.25, Expires 11/02/12, Broker Goldman Sachs & Co.

     35,000         (1,216

NV Energy, Inc., Strike Price USD 18.50, Expires 11/29/12, Broker Deutsche Bank Securities Corp.

     95,000         (54,453

OGE Energy Corp.:

     

Strike Price USD 54.31, Expires 11/07/12, Broker Morgan Stanley & Co., Inc.

     17,000         (55,111

Strike Price USD 57.87, Expires 12/10/12, Broker Deutsche Bank Securities Corp.

     21,000         (15,866
 

 

 

See Notes to Financial Statements.

    
                 
96       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Schedule of Investments (continued)

 

 

BlackRock Utility and Infrastructure Trust (BUI)

(Percentages shown are based on Net Assets)

 

Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (continued)

  

ONEOK Partners LP, Strike Price USD 59.75, Expires 11/15/12, Broker Citigroup Global Markets, Inc.

     15,000       $ (20,303

Pepco Holdings, Inc., Strike Price USD 19.48, Expires 11/30/12, Broker Morgan Stanley & Co., Inc.

     76,900         (34,240

PG&E Corp., Strike Price USD 44.37, Expires 11/02/12, Broker Goldman Sachs & Co.

     37,000           

Pinnacle West Capital Corp., Strike Price USD 53.22, Expires 11/27/12, Broker Deutsche Bank Securities Corp.

     24,000         (13,638

Power Assets Holdings Ltd., Strike Price HKD 64.86, Expires 11/08/12, Broker UBS Securities LLC

     197,500         (33,433

PPL Corp.:

     

Strike Price USD 29.11, Expires 11/12/12, Broker Credit Suisse First Boston

     13,000         (6,745

Strike Price USD 29.50, Expires 11/29/12, Broker Morgan Stanley & Co., Inc.

     15,000         (5,650

Public Service Enterprise Group, Inc.:

     

Strike Price USD 33.11, Expires 11/02/12, Broker Morgan Stanley & Co., Inc.

     10,000         (1

Strike Price USD 31.88, Expires 11/30/12, Broker Morgan Stanley & Co., Inc.

     6,000         (3,156

Strike Price USD 31.80, Expires 12/11/12, Broker Morgan Stanley & Co., Inc.

     37,000         (23,338

Severn Trent Plc, Strike Price GBP 16.98, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     58,300         (5,373

Snam SpA, Strike Price EUR 3.57, Expires 12/12/12, Broker Banc of America Securities

     227,300         (3,814

Targa Resources Partners LP, Strike Price USD 43.18, Expires 11/28/12, Broker Deutsche Bank Securities Corp.

     16,000         (3,811

Telenor ASA, Strike Price NOK 106.96, Expires 12/12/12, Broker Banc of America Securities

     82,900         (77,428

Tractebel Energia SA:

     

Strike Price BRL 32.62, Expires 11/07/12, Broker Banc of America Securities

     97,500         (114,652

Strike Price BRL 31.84, Expires 11/29/12, Broker UBS Securities LLC

     39,000         (62,353

Strike Price BRL 32.07, Expires 12/13/12, Broker Citigroup Global Markets, Inc.

     62,500         (96,673

Transurban Group, Strike Price AUD 5.86, Expires 11/08/12, Broker Citigroup Global Markets, Inc.

     353,300         (82,360
Options Written    Contracts      Value  

 

 

Over-the-Counter Call Options (concluded)

  

Verizon Communications, Inc., Strike Price USD 43.06, Expires 11/30/12, Broker Morgan Stanley & Co., Inc.

     43,000       $ (76,950

Vinci SA, Strike Price EUR 37.22, Expires 11/13/12, Broker Morgan Stanley & Co., Inc.

     21,600         (932

Vodafone Group Plc - ADR:

     

Strike Price USD 29.09, Expires 11/26/12, Broker Banc of America Securities

     14,000         (272

Strike Price USD 29.09, Expires 12/07/12, Broker Banc of America Securities

     14,000         (581

Westar Energy, Inc.:

     

Strike Price USD 29.84, Expires 11/01/12, Broker Deutsche Bank Securities Corp.

     10,000         (210

Strike Price USD 30.24, Expires 11/29/12, Broker Citigroup Global Markets, Inc.

     44,500         (6,191

Western Gas Partners LP, Strike Price USD 47.79, Expires 11/07/12, Broker Morgan Stanley & Co., Inc.

     8,000         (25,230

Williams Partners LP, Strike Price USD 53.46, Expires 12/06/12, Broker Credit Suisse First Boston

     9,000         (6,154

Wisconsin Energy Corp.:

     

Strike Price USD 38.31, Expires 11/07/12, Broker Banc of America Securities

     27,500         (8,547

Strike Price USD 39.05, Expires 11/29/12, Broker Morgan Stanley & Co., Inc.

     11,500         (2,521

Xcel Energy, Inc., Strike Price USD 27.87, Expires 12/05/12, Broker Morgan Stanley & Co., Inc.

     45,000         (27,476

Xylem, Inc., Strike Price USD 24.40, Expires 11/05/12, Broker UBS Securities LLC

     44,000         (7,583

 

 

Total Over-the-Counter Call Options

        (2,108,361

 

 

Total Options Written

(Premiums Received – $2,530,418) – (0.8)%

  

  

     (2,753,157

 

 

Total Investments Net of Options
Written – 99.8%

   

     341,246,447   

Other Assets Less Liabilities – 0.2%

  

     692,772   
     

 

 

 

Net Assets – 100.0%

      $ 341,939,219   
     

 

 

 

(a)   All or a portion of security has been pledged/segregated as collateral in connection with outstanding options written.

(b)   Non-income producing security.

(c)   Represents the current yield as of report date.

    

   

   

 

 

 

See Notes to Financial Statements.

    
                 
      ANNUAL REPORT       OCTOBER 31, 2012    97


 

 

Schedule of Investments (continued)

 

 

BlackRock Utility and Infrastructure Trust (BUI)

 

(d) Investments in issuers considered to be an affiliate of the Trust during the year ended October 31, 2012, for purposes of Section 2(a)(3) of the Investment Company Act of1940 were as follows:

 

 
Affiliate    Shares
Held at
October 31,
2011
  

Net

Activity

     Shares
Held at
October 31,
2012
     Realized
Gain
     Income  

 

 

BlackRock Liquidity Funds, TempFund, Institutional Class

        7,229,592         7,229,592       $ 1,576       $ 40,128   

 

 

Foreign currency exchange contracts as of October 31, 2012 were as follows:

 

 

 
Currency
Purchased
   Currency
Sold
     Counterparty      Settlement
Date
     Unrealized
Depreciation
 

 

 
USD    9,995    CAD     10,000         UBS    AG         11/02/12         $  (17)   

 

 

 

   

Fair Value Measurements – Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows:

 

   

Level 1 - unadjusted price quotations in active markets/exchanges for identical assets and liabilities that the Trust has the ability to access

 

   

Level 2 - other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

   

Level 3 - unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments and derivative financial instruments)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy as of October 31, 2012:

 

 

 
     Level 1      Level 2      Level 3    Total  

 

 

Assets:

           

Investments:

           

Long-Term Investments:

           

Common Stocks:

           

Australia

           $ 6,758,456          $ 6,758,456   

Brazil

   $ 42,837,538                    42,837,538   

Canada

     15,419,383                    15,419,383   

France

             2,890,045            2,890,045   

Germany

             5,333,833            5,333,833   

Hong Kong

             13,003,310            13,003,310   

Italy

     3,047,076         8,564,997            11,612,073   

Norway

             4,940,632            4,940,632   

United Kingdom

     2,305,534         22,056,676            24,362,210   

United States

     209,612,532                    209,612,532   

Short-Term Securities

     7,229,592                    7,229,592   

 

 

Total

   $ 280,451,655       $ 63,547,949          $ 343,999,604   
  

 

 

 

 

 

 
     Level 1     Level 2     Level 3    Total  

 

 

Derivative Financial Instruments1

   

      

Liabilities:

         

Equity contracts

   $ (582,424   $ (2,170,733      $ (2,753,157

Foreign currency exchange contracts

     (17               (17

 

 

Total

   $ (582,441   $ (2,170,733      $ (2,753,174
  

 

 

 

 

1 

Derivative financial instruments are foreign currency exchange contracts and options. Foreign currency exchange contracts are valued at the unrealized appreciation/depreciation on the instrument and options are shown at value.

Certain of the Trust’s assets are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2012, foreign currency at value of $52,564 is categorized as Level 1 within the disclosure hierarchy.

Prior to April 30, 2012, only significant transfers between Level 1 and Level 2 were required to be disclosed. There were no significant transfers from the beginning of the period to April 30, 2012. For the interim period May 1, 2012 to October 31, 2012, all transfers between Level 1 and Level 2 are required to be disclosed. As of April 30, 2012, the Trust valued certain equity securities using unadjusted price quotations from an exchange. As of October 31, 2012, the Trust used observable inputs in determining the value of these securities. As a result, investments with a beginning of period value of $6,231,751 transferred from Level 1 to Level 2 in the disclosure hierarchy.

 

 

See Notes to Financial Statements.

    
                 
98       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Statements of Assets and Liabilities

 

 

October 31, 2012   

BlackRock

EcoSolutions

Investment

Trust (BQR)

   

BlackRock

Energy and

Resources

Trust (BGR)

   

BlackRock

Enhanced

Capital and

Income

Fund, Inc. (CII)

   

BlackRock

Enhanced

Equity

Dividend
Trust (BDJ)

   

BlackRock

Global

Opportunities

Equity

Trust (BOE)

   

BlackRock

Health

Sciences

Trust (BME)

 

Assets

                                                

Investments at value – unaffiliated1,2

   $ 106,436,293      $ 766,110,859      $ 605,416,787      $ 1,385,068,543      $ 987,937,737      $ 216,967,908   

Investments at value – affiliated3

     8,772,998        26,183,134        23,189,440        116,678,880        54,961,782        8,210,818   

Cash

     1,649,342                             456,943          

Cash pledged as collateral for options written

     100,000                      600,000        410,000          

Foreign currency at value4

     47,494        2,400        5,940        117,627        10,052,554        1,807   

Investments sold receivable

     769,468        853,528        93,869        11,153,855        7,391,897        1,933,232   

Dividends receivable – affiliated

     941        663        2,907        8,324        7,452        999   

Dividends receivable

     138,600        931,799        650,392        1,936,364        1,381,926        236,266   

Securities lending income receivable – affiliated

     2,078        1,299               578               1,463   

Other assets

     6,903        31,680        5,316        29,959        813,951        9,953   

Total assets

     117,924,117        794,115,362        629,364,651        1,515,594,130        1,063,414,242        227,362,446   
            

Liabilities

                                                

Investments purchased payable

     192,094        839,870        128,176        2,096,834        8,824,579        1,456,399   

Options written at value5

     1,051,046        5,879,203        5,425,075        15,874,790        11,619,050        2,999,325   

Collateral on securities loaned at value

     1,554,150        13,663,321               4,054,445               4,185,923   

Cash received as collateral for options written

                   510,420        1,500,000                 

Investment advisory fees payable

     116,364        761,520        454,425        1,025,037        884,062        188,383   

Officer’s and Trustees’ fees payable

     1,209        287,256        34,012        521,201        415,219        17,846   

Unrealized depreciation on foreign currency exchange contracts

                          167        6,312        1,062   

Other accrued expenses payable

     143,324        227,434        155,398        425,617        455,012        136,514   

Total liabilities

     3,058,187        21,658,604        6,707,506        25,498,091        22,204,234        8,985,452   

Net Assets

   $ 114,865,930      $ 772,456,758      $ 622,657,145      $ 1,490,096,039      $ 1,041,210,008      $ 218,376,994   
            

Net Assets Consist of

                                                

Paid-in capital

   $ 180,442,276      $ 671,744,850      $ 761,471,377      $ 1,633,616,164      $ 1,229,456,515      $ 179,932,275   

Undistributed (distributions in excess of) net investment income

            5,415,467               (407,316     (771,647     (14,429

Accumulated net realized gain (loss)

     (63,556,212     (28,541,578     (162,511,404     (273,759,950     (236,348,930     6,485,797   

Net unrealized appreciation/depreciation

     (2,020,134     123,838,019        23,697,172        130,647,141        48,874,070        31,973,351   

Net Assets

   $ 114,865,930      $ 772,456,758      $ 622,657,145      $ 1,490,096,039      $ 1,041,210,008      $ 218,376,994   

Net asset value6,7

   $ 9.14      $ 25.95      $ 14.11      $ 8.30      $ 14.99      $ 28.34   

1 Investments at cost – unaffiliated

   $ 108,751,064      $ 647,173,303      $ 583,958,535      $ 1,258,236,957      $ 942,701,854      $ 185,023,611   

2 Securities on loan at value

   $ 1,495,036      $ 13,142,843             $ 4,016,785             $ 4,065,837   

3 Investments at cost – affiliated

   $ 8,772,998      $ 25,736,019      $ 23,189,440      $ 116,678,880      $ 54,961,782      $ 8,210,818   

4 Foreign currency at cost

   $ 45,415      $ 2,424      $ 9,142      $ 117,569      $ 9,806,671      $ 1,760   

5 Premiums received

   $ 1,345,784      $ 10,334,101      $ 7,667,197      $ 19,692,886      $ 14,301,483      $ 3,032,637   

6 Shares outstanding, unlimited number of shares authorized, $0.001 par value

     12,564,457        29,766,217               179,482,756        69,483,161        7,705,933   

7 Shares outstanding, 200 million shares authorized, $0.10 par value

                   44,121,400                        

 

See Notes to Financial Statements.

                 
      ANNUAL REPORT       OCTOBER 31, 2012    99


 

 

Statements of Assets and Liabilities (concluded)

 

 

October 31, 2012   

BlackRock

International

Growth and

Income

Trust (BGY)

   

BlackRock

Real Asset

Equity

Trust (BCF)

   

BlackRock

Resources &

Commodities

Strategy

Trust (BCX)1

   

BlackRock

S&P Quality

Rankings

Global Equity

Managed

Trust (BQY)

   

BlackRock

Utility and

Infrastructure

Trust (BUI)

 

Assets

                                        

Investments at value – unaffiliated2,3

   $ 907,516,014      $ 609,269,126      $ 704,529,259      $ 79,091,540      $ 336,770,012   

Investments at value – affiliated4

     11,164,990        30,458,637        15,207,151        2,623,356        7,229,592   

Cash

     1,950,208        182,361        770,959        6,550          

Cash pledged as collateral for options written

     5,391,000               211,452                 

Foreign currency at value5

     2,060,536        2,708               31,898        52,564   

Investments sold receivable

     77,077        80,982        9,543,947        9,021        26,896   

Dividends receivable – affiliated

     2,278        3,748        413        364        1,562   

Dividends receivable

     1,933,953        850,851        1,314,860        155,794        1,115,370   

Securities lending income receivable – affiliated

            10,847                        

Other assets

     62,797        300,625               6,318          

Total assets

     930,158,853        641,159,885        731,578,041        81,924,841        345,195,996   
          

Liabilities

                                        

Investments purchased payable

     1,674,979               6,268,897        6,779        46,063   

Options written at value6

     16,436,689        5,555,305        6,339,279        446,146        2,753,157   

Collateral on securities loaned at value

            3,731,016                        

Bank overdraft on foreign currency at value

                   18,412                 

Investment advisory fees payable

     769,786        586,787        611,137        51,910        287,662   

Officer’s and Trustees’ fees payable

     370,386        231,758        5,360        13,937        3,634   

Unrealized depreciation on foreign currency exchange contracts

                          9        17   

Other accrued expenses payable

     426,330        253,601        319,010        219,891        166,244   

Total liabilities

     19,678,170        10,358,467        13,562,095        738,672        3,256,777   

Net Assets

   $ 910,480,683      $ 630,801,418      $ 718,015,946      $ 81,186,169      $ 341,939,219   
          

Net Assets Consist of

                                        

Paid-in capital

   $ 1,476,621,277      $ 665,020,294      $ 813,373,637      $ 82,951,843      $ 319,013,368   

Undistributed (distributions in excess of) net investment income

     (723,452     (3,194,320     (1,895,278     (9,490     1,098,044   

Accumulated net realized loss

     (631,146,818     (96,420,567     (74,532,139     (4,460,262     (5,062,770

Net unrealized appreciation/depreciation

     65,729,676        65,396,011        (18,930,274     2,704,078        26,890,577   

Net Assets

   $ 910,480,683      $ 630,801,418      $ 718,015,946      $ 81,186,169      $ 341,939,219   

Net asset value7

   $ 8.28      $ 11.03      $ 15.42      $ 13.46      $ 20.22   

1 Consolidated Statement of Assets and Liabilities

          

2 Investments at cost – unaffiliated

   $ 839,609,041      $ 545,970,120      $ 724,376,892      $ 76,619,328      $ 309,656,178   

3 Securities on loan at value

          $ 3,529,361                        

4 Investments at cost – affiliated

   $ 11,164,990      $ 30,458,637      $ 14,760,036      $ 2,623,356      $ 7,229,592   

5 Foreign currency (Proceeds received) at cost

   $ 2,061,153      $ 2,710      $ (18,529   $ 31,883      $ 52,560   

6 Premiums received

   $ 14,333,012      $ 7,376,099      $ 6,814,345      $ 680,823      $ 2,530,418   

7 Shares outstanding, unlimited number of shares     authorized, $0.001 par value

     109,989,277        57,173,280        46,575,310        6,033,028        16,906,964   

 

See Notes to Financial Statements.

                 
100       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Statements of Operations

 

 

Year Ended October 31, 2012   

BlackRock

EcoSolutions

Investment

Trust (BQR)

   

BlackRock

Energy and

Resources

Trust (BGR)

   

BlackRock

Enhanced

Capital and

Income

Fund, Inc. (CII)

   

BlackRock

Enhanced

Equity

Dividend

Trust (BDJ)

   

BlackRock

Global

Opportunities

Equity

Trust (BOE)

   

BlackRock

Health

Sciences

Trust (BME)

 

Investment Income

                                                

Dividends - unaffiliated

   $ 2,780,336      $ 14,123,639      $ 20,540,980      $ 37,782,266      $ 26,878,543      $ 3,030,123   

Foreign taxes withheld

     (149,930     (701,621     (78,340     (522,118     (1,378,753     (91,464

Dividends - affiliated.

     10,564        32,874        23,309        78,791        72,041        15,465   

Securities lending - affiliated

     48,644        67,477               113,781        37,365        19,062   

Total income.

     2,689,614        13,522,369        20,485,949        37,452,720        25,609,196        2,973,186   
            

Expenses

                                                

Investment advisory

     1,373,299        9,427,765        5,306,274        10,081,879        10,524,593        2,092,393   

Custodian

     97,460        121,970        62,942        222,804        358,381        97,533   

Professional

     66,537        129,317        241,080        105,116        206,518        71,646   

Transfer agent

     27,446        77,687        86,050        114,240        110,807        27,155   

Printing

     17,365        102,480        34,751        159,737        112,701        25,236   

Registration

     14,988        14,113               23,369        12,817        8,982   

Officer and Trustees

     8,407        107,932        78,907        171,418        139,315        18,536   

Insurance

     7,593        46,681        24,829        34,953        47,002        10,097   

Reorganization

                          493,839                 

Miscellaneous

     31,051        21,965        24,252        43,578        74,942        15,359   

Total expenses

     1,644,146        10,049,910        5,859,085        11,450,933        11,587,076        2,366,937   

Less fees waived by advisor

     (5,240     (477,035     (13,079     (38,625     (35,299     (7,639

Total expenses after fees waived

     1,638,906        9,572,875        5,846,006        11,412,308        11,551,777        2,359,298   

Net investment income

     1,050,708        3,949,494        14,639,943        26,040,412        14,057,419        613,888   
            

Realized and Unrealized Gain (Loss)

                                                

Net realized gain (loss) from:

            

Investments - unaffiliated

     (12,474,228     (11,558,039     (46,938,021     (33,025,746     (93,738,348     12,339,150   

Investments - affiliated

     159        412        1,143        1,108        973        178   

Options written

     2,403,959        29,109,885        20,873,848        42,014,151        54,644,738        5,109,965   

Foreign currency transactions

     (26,442     (21,343            45,376        219,746        (4,118
     (10,096,552     17,530,915        (26,063,030     9,034,889        (38,872,891     17,445,175   

Net change in unrealized appreciation/depreciation on:

            

Investments - unaffiliated

     16,322,053        (38,937,164     76,253,584        64,852,271        76,288,597        13,976,183   

Investments - affiliated

            447,115                               

Options written

     781,511        (1,232,118     6,567,615        6,396,952        11,693,507        138,071   

Foreign currency translations

     (9,294     (3,276     (740     (23,828     136,790        (29,034
     17,094,270        (39,725,443     82,820,459        71,225,395        88,118,894        14,085,220   

Total realized and unrealized gain (loss)

     6,997,718        (22,194,528     56,757,429        80,260,284        49,246,003        31,530,395   

Net Increase (Decrease) in Net Assets Resulting from Operations

   $ 8,048,426      $ (18,245,034   $ 71,397,372      $ 106,300,696      $ 63,303,422      $ 32,144,283   

 

See Notes to Financial Statements.

                 
      ANNUAL REPORT       OCTOBER 31, 2012    101


 

 

Statements of Operations (concluded)

 

 

Period Ended October 31, 2012   

BlackRock

    International    

Growth and

Income

Trust (BGY)

   

BlackRock

Real Asset

Equity

Trust (BCF)

   

BlackRock

Resources &

Commodities

Strategy

Trust (BCX)1

   

BlackRock

S&P Quality

Rankings

Global Equity

Managed

Trust (BQY)

   

BlackRock

Utility and

Infrastructure

Trust (BUI)2

 

Investment Income

                                        

Dividends - unaffiliated

   $ 29,761,037      $ 14,832,872      $ 16,786,151      $ 3,069,545      $ 12,630,416   

Foreign taxes withheld

     (2,279,451     (382,604     (893,846     (112,868     (229,045

Dividends - affiliated

     449,464        48,886        32,498        6,659        40,128   

Securities lending - affiliated

            47,879                        
  

 

 

 

Total income

     27,931,050        14,547,033        15,924,803        2,963,336        12,441,499   
  

 

 

 
          

Expenses

                                        

Investment advisory

     9,069,780        7,892,557        8,720,748        604,285        3,062,967   

Custodian

     331,333        98,806        24,994        84,954        100,373   

Professional

     179,003        138,442        144,886        54,920        125,996   

Officer and Trustees

     123,908        82,548        55,182        8,261        36,452   

Transfer agent

     99,429        73,972        62,565        18,038        32,264   

Printing

     93,881        67,444        4,425        11,482        33,705   

Insurance

     64,991        42,247        27,973        4,570          

Registration

     44,432        28,303        20,130        2,017        11,146   

Licensing

                          120,858          

Organization

                                 33,000   

Miscellaneous

     99,049        36,730        44,213        41,163        7,975   
  

 

 

 

Total expenses excluding excise tax

     10,105,806        8,461,049        9,105,116        950,548        3,443,878   

Excise tax

                                 26,207   
  

 

 

 

Total expenses

     10,105,806        8,461,049        9,105,116        950,548        3,470,085   

Less fees waived by advisor

     (36,162     (982,283     (1,470,297     (3,301     (21,542
  

 

 

 

Total expenses after fees waived

     10,069,644        7,478,766        7,634,819        947,247        3,448,543   
  

 

 

 

Net investment income

     17,861,406        7,068,267        8,289,984        2,016,089        8,992,956   
  

 

 

 
          

Realized and Unrealized Gain (Loss)

                                        

Net realized gain (loss) from:

          

Investments - unaffiliated

     (119,793,734     (37,032,196     (100,557,190     (822,324     (41,955

Investments - affiliated

     (3,106,286     688        1,105        130        1,576   

Options written

     37,566,403        31,738,333        32,403,698        2,143,983        1,942,513   

Financial futures contracts

     302,636                               

Foreign currency transactions

     512,602        108,248        (234,603     7,127        259,863   
  

 

 

 
     (84,518,379     (5,184,927     (68,386,990     1,328,916        2,161,997   
  

 

 

 

Net change in unrealized appreciation/depreciation on:

          

Investments - unaffiliated

     112,570,603        (21,007,780 )3      57,976,187        3,083,163        27,113,834   

Investments - affiliated

     533,922               447,115                 

Options written

     9,319,680        (2,764,973     1,108,381        325,132        (222,739

Foreign currency translations

     (185,750     56,391        (5,394     (983     (518
  

 

 

 
     122,238,455        (23,716,362     59,526,289        3,407,312        26,890,577   
  

 

 

 

Total realized and unrealized gain (loss)

     37,720,076        (28,901,289     (8,860,701     4,736,228        29,052,574   
  

 

 

 

Net Increase (Decrease) in Net Assets Resulting from Operations

   $ 55,581,482      $ (21,833,022   $ (570,717   $ 6,752,317      $ 38,045,530   
  

 

 

 

 

  1 

Consolidated Statement of Operations.

  2 

Commencement of operations was November 25, 2011. This information includes the initial investment by BlackRock HoldCo 2, Inc.

  3 

Net of $3,464 foreign capital gain tax.

 

See Notes to Financial Statements.

                 
102       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Statements of Changes in Net Assets

 

 

    

BlackRock

EcoSolutions

Investment Trust (BQR)

        

BlackRock

Energy and

Resources Trust (BGR)

 
     Year Ended October 31,          Year Ended October 31,  
Increase (Decrease) in Net Assets:    2012     2011          2012     2011  

Operations

                                     

Net investment income

   $ 1,050,708      $ 1,269,089         $ 3,949,494      $ 1,674,947   

Net realized gain (loss)

     (10,096,552     (9,950,787        17,530,915        40,553,789   

Net change in unrealized appreciation/depreciation

     17,094,270        6,093,064           (39,725,443     79,345,495   
  

 

 

      

 

 

 

Net increase (decrease) in net assets resulting from operations

     8,048,426        (2,588,634        (18,245,034     121,574,231   
  

 

 

      

 

 

 
           

Dividends and Distributions to Shareholders From1

                                     

Net investment income

     (875,247     (1,319,946        (854,435     (7,176,790

Net realized gains

                      (42,914,124     (41,044,482

Tax return of capital

     (10,214,472     (11,960,055        (8,858,114       
  

 

 

      

 

 

 

Decrease in net assets resulting from dividends and distributions to shareholders

     (11,089,719     (13,280,001        (52,626,673     (48,221,272
  

 

 

      

 

 

 
           

Capital Share Transactions

                                     

Reinvestment of dividends

     410,321        2,363,095                    
  

 

 

      

 

 

 
           

Net Assets

                                     

Total increase (decrease) in net assets

     (2,630,972     (13,505,540        (70,871,707     73,352,959   

Beginning of year

     117,496,902        131,002,442           843,328,465        769,975,506   
  

 

 

      

 

 

 

End of year

   $ 114,865,930      $ 117,496,902         $ 772,456,758      $ 843,328,465   
  

 

 

      

 

 

 

Undistributed (distributions in excess of) net investment income

          $ (9,754      $ 5,415,467      $ 1,970,162   
  

 

 

      

 

 

 

 

1

Dividends and distributions are determined in accordance with federal income tax regulations.

 

See Notes to Financial Statements.

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    103


 

 

Statements of Changes in Net Assets (continued)

 

 

    

BlackRock

Enhanced Capital and

Income Fund, Inc. (CII)

        

BlackRock

Enhanced Equity

Dividend Trust (BDJ)

 
     Year Ended October 31,          Year Ended October 31,  
Increase (Decrease) in Net Assets:    2012     2011          2012     2011  

Operations

                                     

Net investment income

   $ 14,639,943      $ 15,264,456         $ 26,040,412      $ 11,421,528   

Net realized gain (loss)

     (26,063,030     64,637,260           9,034,889        34,776,421   

Net change in unrealized appreciation/depreciation

     82,820,459        (34,739,489        71,225,395        (7,312,197
  

 

 

      

 

 

 

Net increase in net assets resulting from operations

     71,397,372        45,162,227           106,300,696        38,885,752   
  

 

 

      

 

 

 
           

Dividends and Distributions to Shareholders From1

                                     

Net investment income

     (23,479,014     (25,381,831        (60,552,719     (36,586,504

Net realized gains

     (5,739,106     (48,918,624                 

Tax return of capital

     (31,669,412               (43,164,839     (22,727,186
  

 

 

      

 

 

 

Decrease in net assets resulting from dividends and distributions to shareholders

     (60,887,532     (74,300,455        (103,717,558     (59,313,690
  

 

 

      

 

 

 
           

Capital Share Transactions

                                     

Net proceeds from the issuance of shares due to reorganization

                      911,800,774          

Reinvestment of dividends

            5,434,567                  3,812,506   

Refund of offering costs previously charged to paid-in capital

     2,075                           
  

 

 

      

 

 

 

Net increase in net assets derived from shares transactions

     2,075        5,434,567           911,800,774        3,812,506   
  

 

 

      

 

 

 
           

Net Assets

                                     

Total increase (decrease) in net assets

     10,511,915        (23,703,661        914,383,912        (16,615,432

Beginning of year

     612,145,230        635,848,891           575,712,127        592,327,559   
  

 

 

      

 

 

 

End of year

   $       622,657,145      $       612,145,230         $       1,490,096,039      $       575,712,127   
  

 

 

      

 

 

 

Distributions in excess of net investment income

                    $ (407,316   $ (165,909
  

 

 

      

 

 

 

 

1

Dividends and distributions are determined in accordance with federal income tax regulations.

 

See Notes to Financial Statements.

 

                 
104       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Statements of Changes in Net Assets (continued)

 

 

    

BlackRock

Global Opportunities

Equity Trust (BOE)

        

BlackRock

Health Sciences

Trust (BME)

 
     Year Ended October 31,          Year Ended October 31,  
Increase (Decrease) in Net Assets:    2012     2011          2012     2011  

Operations

                                     

Net investment income (loss)

   $ 14,057,419      $ 11,860,850         $ 613,888      $ (46,637

Net realized gain (loss)

     (38,872,891     79,218,624           17,445,175        18,512,225   

Net change in unrealized appreciation/depreciation

     88,118,894        (117,404,155        14,085,220        (5,604,885
  

 

 

      

 

 

 

Net increase (decrease) in net assets resulting from operations

     63,303,422        (26,324,681        32,144,283        12,860,703   
  

 

 

      

 

 

 
           

Dividends and Distributions to Shareholders From1

                                     

Net investment income

     (14,977,529     (58,540,479        (624,091     —     

Net realized gains

     —          (42,165,166        (18,501,614     (16,991,401

Tax return of capital

     (121,035,759     (56,895,764        —          —     
  

 

 

      

 

 

 

Decrease in net assets resulting from dividends and distributions to shareholders

     (136,013,288     (157,601,409        (19,125,705     (16,991,401
  

 

 

      

 

 

 
           

Capital Share Transactions

                                     

Reinvestment of dividends

     —          7,741,126           2,683,786        413,595   
  

 

 

      

 

 

 
           

Net Assets

                                     

Total increase (decrease) in net assets

     (72,709,866     (176,184,964        15,702,364        (3,717,103

Beginning of year

     1,113,919,874        1,290,104,838           202,674,630        206,391,733   
  

 

 

      

 

 

 

End of year

   $ 1,041,210,008      $ 1,113,919,874         $ 218,376,994      $ 202,674,630   
  

 

 

      

 

 

 

Distributions in excess of net investment income

   $ (771,647   $ (311,226      $ (14,429   $ (108
  

 

 

      

 

 

 

 

1

Dividends and distributions are determined in accordance with federal income tax regulations.

 

See Notes to Financial Statements.

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    105


 

 

Statements of Changes in Net Assets (continued)

 

 

    

BlackRock

International Growth

and Income Trust (BGY)

        

BlackRock

Real Asset

Equity Trust (BCF)

 
     Year Ended October 31,          Year Ended October 31,  
Increase (Decrease) in Net Assets:    2012     2011          2012     2011  

Operations

                                     

Net investment income

   $ 17,861,406      $ 15,129,314         $ 7,068,267      $ 6,225,635   

Net realized gain (loss)

     (84,518,379     51,288,660           (5,184,927     8,944,447   

Net change in unrealized appreciation/depreciation

     122,238,455        (114,262,540        (23,716,362     (8,586,783
  

 

 

      

 

 

 

Net increase (decrease) in net assets resulting from operations

     55,581,482        (47,844,566        (21,833,022     6,583,299   
  

 

 

      

 

 

 
           

Dividends and Distributions to Shareholders From1

                                     

Net investment income

     (19,807,805     (74,188,180        (7,129,605     (11,926,127

Net realized gains

     —          —             (31,346,558     (28,641,464

Tax return of capital

     (84,445,531     (75,397,237        (20,806,811     (21,521,515
  

 

 

      

 

 

 

Decrease in net assets resulting from dividends and distributions to shareholders

     (104,253,336     (149,585,417        (59,282,974     (62,089,106
  

 

 

      

 

 

 
           

Capital Share Transactions

                                     

Reinvestment of dividends

     —          —             —          1,960,017   
  

 

 

      

 

 

 
           

Net Assets

                                     

Total decrease in net assets

     (48,671,854     (197,429,983        (81,115,996     (53,545,790

Beginning of year

     959,152,537        1,156,582,520           711,917,414        765,463,204   
  

 

 

      

 

 

 

End of year

   $ 910,480,683      $ 959,152,537         $ 630,801,418      $ 711,917,414   
  

 

 

      

 

 

 

Distributions in excess of net investment income

   $ (723,452   $ (101,531      $ (3,194,320   $ (3,241,230
  

 

 

      

 

 

 

 

1

Dividends and distributions are determined in accordance with federal income tax regulations.

 

See Notes to Financial Statements.

 

                 
106       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Statements of Changes in Net Assets (concluded)

 

 

     BlackRock Resources
& Commodities
Strategy Trust (BCX)1
    BlackRock S&P Quality Rankings
Global Equity Managed Trust (BQY)
    BlackRock
Utility and
Infrastructure
Trust (BUI)
 
  

 

 

   

 

 

   

 

 

 
Increase (Decrease) in Net Assets:    Year Ended
October 31,2012
    Period
March 30,  20112
to
October 31, 2011
   

Year Ended

October 31, 2012

   

Period
November 25,
20112

to
October 31, 2012

 
      

 

 

   
       2012     2011    

Operations

                                        

Net investment income

   $ 8,289,984      $ 1,315,064      $ 2,016,089      $ 2,101,913      $ 8,992,956   

Net realized gain (loss)

     (68,386,990     5,891,040        1,328,916        3,854,809        2,161,997   

Net change in unrealized appreciation/depreciation

     59,526,289        (78,456,563     3,407,312        (3,874,603     26,890,577   
  

 

 

   

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

     (570,717     (71,250,459     6,752,317        2,082,119        38,045,530   
  

 

 

   

 

 

   

 

 

 
          

Dividends and Distributions to Shareholders From3

  

               

Net investment income

     (11,939,675            (4,064,398     (1,299,837     (8,210,424

Net realized gains

     (365,560     (11,264,280     (3,597,548     (4,733,191     (6,968,606

Tax return of capital

     (52,900,199     (21,259,041                   (3,207,293
  

 

 

   

 

 

   

 

 

 

Decrease in net assets resulting from dividends and distributions to shareholders

     (65,205,434     (32,523,321     (7,661,946     (6,033,028     (18,386,323
  

 

 

   

 

 

   

 

 

 
          

Capital Share Transactions

                                        

Net proceeds from the issuance of shares

            834,041,200                      295,596,012   

Net proceeds from the underwriters’ over allotment option exercised

            49,393,801                      26,684,000   

Reinvestment of dividends

            4,130,876                        
  

 

 

   

 

 

   

 

 

 

Net increase in net assets derived from shares transactions

            887,565,877                      322,280,012   
  

 

 

   

 

 

   

 

 

 
          

Net Assets

                                        

Total increase (decrease) in net assets

     (65,776,151     783,792,097        (909,629     (3,950,909     341,939,219   

Beginning of period

     783,792,097               82,095,798        86,046,707          
  

 

 

   

 

 

   

 

 

 

End of period

   $       718,015,946      $       783,792,097      $       81,186,169      $       82,095,798      $       341,939,219   
  

 

 

   

 

 

   

 

 

 

Undistributed (distributions in excess of) net investment income

   $ (1,895,278   $ 1,402,450      $ (9,490   $ 2,106,652      $ 1,098,044   
  

 

 

   

 

 

   

 

 

 

 

1 

Consolidated Statement of Changes in Net Assets.

2 

Commencement of Operations.

3 

Dividends and distributions are determined in accordance with federal income tax regulations.

 

See Notes to Financial Statements.

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    107


 

 

Statements of Cash Flows

 

 

 

Year Ended October 31, 2012    BlackRock
EcoSolutions
Investment
Trust (BQR)
    BlackRock
Energy and
Resources
Trust (BGR)
   

BlackRock
Enhanced
Capital and
Income

Fund, Inc. (CII)

   

BlackRock
Enhanced

Equity

Dividend
Trust (BDJ)

 

Cash Provided by Operating Activities

                                

Net increase (decrease) in net assets resulting from operations

   $ 8,048,426      $ (18,245,034   $ 71,397,372      $ 106,300,696   
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by operating activities:         

Decrease (increase) in dividends receivable – affiliated

     (361     26        (2,907     (2,910 )1 

Decrease (increase) in dividends receivable

     (10,367     (575,643     318,498        967,817 1 

Decrease (increase) in securities lending income receivable – affiliated

     (139     14,471               792   

Decrease in prepaid expenses

                   15,899          

Decrease (increase) in other assets

     3,195        217,206        (5,316     204,793   

Decrease in cash pledged as collateral for options written

     610,000        790,000               4,313,239 1 

Increase in investment advisory fees payable

     2,240        54,112        28,212        150,388 1 

Increase (decrease) in collateral on securities loaned at value

     (246,179     (46,996,857            3,608,195   

Increase in officer’s and trustees’ fees payable

     1,209        85,801        31,182        119,338 1 

Decrease in other affiliates payable

                   (9,994       

Decrease in licensing fee payable

                          (88,095

Increase in cash received as collateral for options written

                   510,420        1,500,000   

Increase (decrease) in other accrued expenses payable

     (33,120     (92,495     (939     (596,210 )1 

Net realized and unrealized (gain) loss on investments and options written

     (7,033,539     22,183,380        (56,692,417     (80,219,631 )1 

Premiums received from options written

     10,491,178        54,340,259        51,581,205        101,780,442 1 

Premiums paid on closing options written

     (5,091,038     (13,605,087     (3,913,059     (5,778,739

Proceeds from sales of long-term investments

     117,360,791        669,432,908        1,294,777,427        2,154,218,688 1 

Purchases of long-term investments

     (115,414,230     (672,270,146     (1,276,579,390     (2,138,988,438 )1 

Net (purchases) sales of short-term securities

     2,534,959        57,297,296        (20,571,476     (43,661,716 )1 
  

 

 

 

Cash provided by operating activities

     11,223,025        52,630,197        60,884,717        103,828,649   
  

 

 

 
        

Cash Used for Financing Activities

                                

Foreign currency received from reorganization

                          1,023 1 

Decrease in bank overdraft

            (3,282              

Refund of offering costs previously charged to paid-in capital

                   2,075          

Cash dividends paid to shareholders

     (10,679,398     (52,626,673     (60,887,532     (103,717,558
  

 

 

 

Cash used for financing activities

     (10,679,398     (52,629,955     (60,885,457     (103,716,535
  

 

 

 
        

Cash and Foreign Currency

                                

Net increase (decrease) in cash and foreign currency

     543,627        242        (740     112,114   

Cash and foreign currency at beginning of year

     1,153,209        2,158        6,680        5,513   
  

 

 

 

Cash and foreign currency at end of year

   $ 1,696,836      $ 2,400      $ 5,940      $ 117,627   
  

 

 

 
        

Non-Cash Financing Activities

                                

Net proceeds from the issuance of shares due to reorganization

                        $ 911,800,774   

Capital shares issued in reinvestment of dividends paid to shareholders

   $ 410,321                        
  

 

 

 

 

  1

Includes assets and liabilities acquired in reorganization.

 

See Notes to Financial Statements.

 

                 
108       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Statements of Cash Flows (continued)

 

 

Year Ended October 31, 2012   

BlackRock

Global
Opportunities
Equity

Trust (BOE)

   

BlackRock
Health

Sciences
Trust (BME)

    BlackRock
International
Growth and
Income
Trust (BGY)
    BlackRock
Real Asset
Equity
Trust (BCF)
 

Cash Provided by Operating Activities

                                

Net increase (decrease) in net assets resulting from operations

   $ 63,303,422      $ 32,144,283      $ 55,581,482      $ (21,833,022
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by operating activities:         

Decrease (increase) in dividends receivable – affiliated

     (4,789     27        2,926        (1,266

Decrease in dividends receivable

     503,245        43,061        1,122,862        8,358   

Decrease (increase) in securities lending income receivable – affiliated

     227        (699            (10,110

Decrease in other assets

     333,221        13,919        300,544        197,919   

Decrease in cash pledged as collateral for options written

     11,163,000        10,816,345        6,232,085          

Increase (decrease) in investment advisory fees payable

     (22,076     21,182        (12,256     (45

Decrease in collateral on securities loaned at value

            (3,134,282            (7,914,551

Increase in officer’s and trustees’ fees payable

     112,498        4,805        101,420        65,682   

Decrease in other accrued expenses payable

     (190,271     (30,951     (247,870     (379,451
Net realized and unrealized (gain) loss on investments and options written      (48,904,586     (31,574,626     (37,241,065     29,208,543   

Premiums received from options written

     123,032,010        14,192,940        105,148,128        54,270,983   

Premiums paid on closing options written

     (25,824,205     (3,864,809     (36,253,798     (12,606,961

Proceeds from sales of long-term investments

     3,102,593,004        435,144,298        1,981,500,882        460,077,070   

Purchases of long-term investments

     (3,060,107,029     (444,245,023     (2,020,979,046     (458,528,618

Net (purchases) sales of short-term securities

     (24,848,416     6,910,452        50,397,840        10,501,381   
  

 

 

 

Cash provided by operating activities

     141,139,255        16,440,922        105,654,134        53,055,912   
  

 

 

 
        

Cash Used for Financing Activities

                                

Cash dividends paid to shareholders

     (136,013,288     (16,441,919     (104,253,336     (59,282,974
  

 

 

 
        

Cash and Foreign Currency

                                

Net increase (decrease) in cash and foreign currency

     5,125,967        (997     1,400,798        (6,227,062

Cash and foreign currency at beginning of year

     5,383,530        2,804        2,609,946        6,412,131   
  

 

 

 

Cash and foreign currency at end of year

   $ 10,509,497      $ 1,807      $ 4,010,744      $ 185,069   
  

 

 

 
        

Non-Cash Financing Activities

                                

Capital shares issued in reinvestment of dividends paid to shareholders

          $ 2,683,786                 
  

 

 

 

 

See Notes to Financial Statements.

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    109


 

 

Statements of Cash Flows (concluded)

 

 

Period Ended October 31, 2012   

BlackRock
Resources &
Commodities
Strategy

Trust (BCX)1

   

BlackRock

S&P Quality
Rankings

Global Equity
Managed

Trust (BQY)

    BlackRock
Utility and
Infrastructure
Trust (BUI)2
 

Cash Provided by (Used for) Operating Activities

                        

Net increase (decrease) in net assets resulting from operations

   $ (570,717   $ 6,752,317      $ 38,045,530   
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used for) operating activities:       

Decrease (increase) in dividends receivable – affiliated

     7,412        353        (1,562

Decrease (increase) in dividends receivable

     (509,633     24,663        (1,115,370

Decrease in other assets

     349        9,947          

Decrease in cash pledged as collateral for options written

     22,599,123        4,709,150          

Increase (decrease) in investment advisory fees payable

     (12,390     1,699        287,662   

Increase in officer’s and trustees’ fees payable

     5,360        3,082        3,634   

Increase (decrease) in other accrued expenses payable

     (225,898     32,736        166,244   
Net realized and unrealized (gain) loss on investments and options written      8,621,831        (4,724,305     (28,808,822

Premiums received from options written

     53,107,673        4,860,689        14,454,531   

Premiums paid on closing options written

     (3,818,347     (906,682     (5,555,015

Proceeds from sales of long-term investments

     692,638,570        100,601,174        259,673,173   

Purchases of long-term investments

     (796,180,800     (111,448,275     (573,761,538

Net (purchases) sales of short-term securities

     83,163,623        7,770,503        (7,229,592
  

 

 

 

Cash provided by (used for) operating activities

     58,826,156        7,687,051        (303,841,125
  

 

 

 
      

Cash Provided by (Used for) Financing Activities

                        

Increase in bank overdraft on foreign currency at value

     18,412                 

Proceeds from shares sold

                   295,596,012   

Net proceeds from the underwriters’ over allotment option exercised

                   26,684,000   

Cash dividends paid to shareholders

     (65,205,434     (7,661,946     (18,386,323
  

 

 

 

Cash provided by (used for) financing activities

     (65,187,022     (7,661,946     303,893,689   
  

 

 

 
      

Cash and Foreign Currency

                        

Net increase (decrease) in cash and foreign currency

     (6,360,866     25,105        52,564   

Cash and foreign currency at beginning of period

     7,131,825        13,343          
  

 

 

 

Cash and foreign currency at end of period

   $ 770,959      $ 38,448      $ 52,564   
  

 

 

 

 

1 

Consolidated Statement of Cash Flows.

2 

Commencement of operations was November 25, 2011. This information includes the initial investment by BlackRock HoldCo 2, Inc.

 

See Notes to Financial Statements.

 

                 
110       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Financial Highlights

 

 

BlackRock EcoSolutions Investment Trust (BQR)

 

     Year Ended October 31,  
     2012     2011     2010     2009     2008  

Per Share Operating Performance

                                        

Net asset value, beginning of year

   $ 9.38      $ 10.65      $ 10.56      $ 10.23      $ 20.31   

Net investment income1

     0.08        0.10        0.05        0.06        0.03   

Net realized and unrealized gain (loss)

     0.56        (0.30     1.24        1.78        (8.51

Net increase (decrease) from investment operations

     0.64        (0.20     1.29        1.84        (8.48

Dividends and distributions from:2

          

Net investment income

     (0.07     (0.11     (0.05     (0.07     (0.02

Net realized gain

                          (0.09     (1.58

Tax return of capital

     (0.81     (0.96     (1.15     (1.35       

Total dividends and distributions

     (0.88     (1.07     (1.20     (1.51     (1.60

Net asset value, end of year

   $ 9.14      $ 9.38      $ 10.65      $ 10.56      $ 10.23   

Market price, end of year

   $ 8.66      $ 8.58      $ 11.69      $ 10.23      $ 9.20   
          

Total Investment Return3

                                        

Based on net asset value

     7.77%        (2.13 )%      13.04%        19.64%        (43.99 )% 

Based on market price

     11.63%        (18.45 )%      28.08%        28.88%        (48.20 )% 
          

Ratios to Average Net Assets

                                        

Total expenses

     1.44%        1.40%        1.45%        1.51%        1.36%   

Total expenses after fees waived and paid indirectly

     1.43%        1.40%        1.45%        1.50%        1.35%   

Net investment income

     0.92%        0.98%        0.47%        0.65%        0.38%   
                                        

Supplemental Data

                                        

Net assets, end of year (000)

   $ 114,866      $ 117,497      $ 131,002      $ 127,025      $ 120,282   

Portfolio turnover

     107%        86%        124%        62%        45%   

 

1 

Based on average shares outstanding.

2 

Dividends and distributions are determined in accordance with federal income tax regulations.

3 

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of sales charges and include the reinvestment of dividends and distributions.

 

See Notes to Financial Statements.

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    111


 

 

Financial Highlights

 

 

BlackRock Energy and Resources Trust (BGR)

 

     Year Ended October 31,  
     2012      2011      2010      2009      2008  

Per Share Operating Performance

                                            

Net asset value, beginning of year

   $ 28.33       $ 25.87       $ 23.81       $ 20.71       $ 37.60   
  

 

 

 

Net investment income1

     0.13         0.06         0.26         0.41         1.18   

Net realized and unrealized gain (loss)

     (0.74)         4.02         3.42         4.32         (14.63)   
  

 

 

 

Net increase (decrease) from investment operations

     (0.61)         4.08         3.68         4.73         (13.45)   
  

 

 

 

Dividends and distributions from:2

              

Net investment income

     (0.03)         (0.24)         (0.17)         (0.47)         (0.96)   

Net realized gain

     (1.44)         (1.38)         (1.45)         (0.19)         (2.48)   

Tax return of capital

     (0.30)                         (0.97)           
  

 

 

 

Total dividends and distributions

     (1.77)         (1.62)         (1.62)         (1.63)         (3.44)   
  

 

 

 

Net asset value, end of year

   $ 25.95       $ 28.33       $ 25.87       $ 23.81       $ 20.71   
  

 

 

 

Market price, end of year

   $ 24.28       $ 26.54       $ 25.36       $ 22.18       $ 17.99   
  

 

 

 
              

Total Investment Return3

                                            

Based on net asset value

     (1.76)%         16.09%         15.89%         25.54%         (38.15)%   
  

 

 

 

Based on market price

     (1.88)%         10.95%         21.95%         34.63%         (37.14)%   
  

 

 

 
              

Ratios to Average Net Assets

                                            

Total expenses.

     1.28%         1.26%         1.27%         1.30%         1.27%   
  

 

 

 

Total expenses after fees waived

     1.22%         1.15%         1.11%         1.10%         1.07%   
  

 

 

 

Net investment income

     0.50%         0.19%         1.04%         1.77%         1.38%   
  

 

 

 
              

Supplemental Data

                                            

Net assets, end of year (000)

   $ 772,457       $ 843,328       $ 769,976       $ 708,589       $ 616,479   
  

 

 

 

Portfolio turnover

     86%         111%         80%         62%         54%   
  

 

 

 

 

1 

Based on average shares outstanding.

2 

Dividends and distributions are determined in accordance with federal income tax regulations.

3 

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of sales charges and include the reinvestment of dividends and distributions.

 

See Notes to Financial Statements.

 

                 
112       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Financial Highlights

 

 

BlackRock Enhanced Capital and Income Fund, Inc. (CII)

 

     Year Ended October 31,     Period
January 1,
2008 to
October 31,
   

Year

Ended
December 31,

 
     2012     2011     2010     2009     2008     2007  

Per Share Operating Performance

                                                

Net asset value, beginning of period

   $ 13.87      $ 14.53      $ 14.40      $ 13.78      $ 21.36      $ 22.91   
  

 

 

 

Net investment income1

     0.33        0.35        0.31        0.29        0.23        0.31   

Net realized and unrealized gain (loss)

     1.29        0.68        1.76        2.27        (6.36     0.58   
  

 

 

 

Net increase (decrease) from investment operations

     1.62        1.03        2.07        2.56        (6.13     0.89   
  

 

 

 

Dividends and distributions from:2

            

Net investment income

     (0.53     (0.58     (0.31     (0.29     (0.23     (0.34

Net realized gain

     (0.13     (1.11     (1.33     (1.19     (0.62     (2.10

Tax return of capital

     (0.72            (0.30     (0.46     (0.60       
  

 

 

 

Total dividends and distributions

     (1.38     (1.69     (1.94     (1.94     (1.45     (2.44
  

 

 

 

Net asset value, end of period

   $ 14.11      $ 13.87      $ 14.53      $ 14.40      $ 13.78      $ 21.36   
  

 

 

 

Market price, end of period

   $ 12.99      $ 12.39      $ 15.03      $ 13.76      $ 12.37      $ 20.06   
  

 

 

 
            

Total Investment Return3

                                                

Based on net asset value

     12.94%        7.56%        15.22%        22.01%        (29.46)%4         4.79%   
  

 

 

 

Based on market price

     16.39%        (7.11)%        24.73%        29.88%        (32.58)%4         10.47%   
  

 

 

 
            

Ratios to Average Net Assets

                                                

Total expenses

     0.94%        0.94%        0.93%        0.95%        1.10% 5      1.96%   
  

 

 

 

Total expenses after fees waived

     0.94%        0.93%        0.93%        0.95%        1.10% 5      1.96%   
  

 

 

 

Total expenses after fees waived and excluding interest expense

     0.94%        0.93%        0.93%        0.95%        1.01% 5      1.19%   
  

 

 

 

Net investment income

     2.34%        2.40%        2.14%        2.16%        1.46% 5      1.36%   
  

 

 

 
            

Supplemental Data

                                                

Net assets, end of period (000)

   $ 622,657      $ 612,145      $ 635,849      $ 618,462      $ 167,996      $ 260,385   
  

 

 

 

Average borrowings outstanding during the period (000)

                                      $ 38,788   
  

 

 

 

Portfolio turnover

     205%        190%        210%        138%        45%        63%   
  

 

 

 

 

  1 

Based on average shares outstanding.

  2

Dividends and distributions are determined in accordance with federal income tax regulations.

  3

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of sales charges and include the reinvestment of dividends and distributions.

  4

Aggregate total investment return.

  5

Annualized.

 

See Notes to Financial Statements.

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    113


 

 

Financial Highlights

 

 

BlackRock Enhanced Equity Dividend Trust (BDJ)

 

     Year Ended October 31,  
     2012     2011     2010     2009     2008  

Per Share Operating Performance

                                        

Net asset value, beginning of year

   $ 8.03      $ 8.32      $ 8.13      $ 9.59      $ 14.10   
  

 

 

 

Net investment income1

     0.18        0.16        0.17        0.25        0.34   

Net realized and unrealized gain (loss)

     0.77        0.38        1.00        (0.55     (3.73
  

 

 

 

Net increase (decrease) from investment operations

     0.95        0.54        1.17        (0.30     (3.39
  

 

 

 

Dividends and distributions from:2

          

Net investment income

     (0.40     (0.51     (0.17     (0.25     (0.52

Tax return of capital

     (0.28     (0.32     (0.81     (0.91     (0.60
  

 

 

 

Total dividends and distributions

     (0.68     (0.83     (0.98     (1.16     (1.12
  

 

 

 

Net asset value, end of year

   $ 8.30      $ 8.03      $ 8.32      $ 8.13      $ 9.59   
  

 

 

 

Market price, end of year

   $ 7.41      $ 7.29      $ 8.99      $ 7.89      $ 8.47   
  

 

 

 
          

Total Investment Return3

                                        

Based on net asset value

     13.22%        6.88%        15.23%        (1.63)%        (24.35)%   
  

 

 

 

Based on market price

     11.34%        (10.20)%        28.30%        8.08%        (25.70)%   
  

 

 

 
          

Ratios to Average Net Assets

                                        

Total expenses

     0.95%        1.15%        1.16%        1.20%        1.18%   
  

 

 

 

Total expenses after fees waived

     0.95%        1.14%        1.16%        1.20%        1.18%   
  

 

 

 

Net investment income

     2.16%        1.92%        2.06%        3.11%        3.20%   
  

 

 

 
          

Supplemental Data

                                        

Net assets, end of year (000)

   $ 1,490,096      $ 575,712      $ 592,328      $ 572,066      $ 668,969   
  

 

 

 

Portfolio turnover

     185%        231%        232%        117%        86%   
  

 

 

 

 

  1 

Based on average shares outstanding.

  2

Dividends and distributions are determined in accordance with federal income tax regulations.

  3

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of sales charges and include the reinvestment of dividends and distributions.

 

See Notes to Financial Statements.

 

                 
114       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Financial Highlights

 

 

BlackRock Global Opportunities Equity Trust (BOE)

 

     Year Ended October 31,  
     2012     2011     2010     2009     2008  

Per Share Operating Performance

                                        

Net asset value, beginning of year

   $ 16.03      $ 18.68      $ 18.64      $ 18.03      $ 31.09   
  

 

 

 

Net investment income1

     0.20        0.17        0.19        0.19        0.39   

Net realized and unrealized gain (loss)

     0.72        (0.54     2.13        2.70        (10.39
  

 

 

 

Net increase (decrease) from investment operations

     0.92        (0.37     2.32        2.89        (10.00
  

 

 

 

Dividends and distributions from:2

          

Net investment income

     (0.22     (0.85     (1.44     (0.20     (0.56

Net realized gain

            (0.61     (0.25            (2.48

Tax return of capital

     (1.74     (0.82     (0.59     (2.08     (0.02
  

 

 

 

Total dividends and distributions

     (1.96     (2.28     (2.28     (2.28     (3.06
  

 

 

 

Net asset value, end of year

   $ 14.99      $ 16.03      $ 18.68      $ 18.64      $ 18.03   
  

 

 

 

Market price, end of year

   $ 13.24      $ 14.95      $ 19.06      $ 18.40      $ 15.89   
  

 

 

 
          

Total Investment Return3

                                        

Based on net asset value

     7.36%        (2.55)%        13.76%        20.50%        (35.08)%   
  

 

 

 

Based on market price

     1.68%        (10.93)%        17.58%        34.97%        (38.15)%   
  

 

 

 
          

Ratios to Average Net Assets

                                        

Total expenses

     1.10%        1.10%        1.11%        1.21%        1.14%   
  

 

 

 

Total expenses after fees waived

     1.10%        1.09%        1.10%        1.20%        1.14%   
  

 

 

 

Net investment income

     1.34%        0.96%        1.03%        1.05%        1.60%   
  

 

 

 
          

Supplemental Data

                                        

Net assets, end of year (000)

   $ 1,041,210      $ 1,113,920      $ 1,290,105      $ 1,278,170      $ 227,835   
  

 

 

 

Portfolio turnover

     298%        253%        264%        300%        120%   
  

 

 

 

 

  1

Based on average shares outstanding.

  2 

Dividends and distributions are determined in accordance with federal income tax regulations.

  3

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of sales charges and include the reinvestment of dividends and distributions.

 

See Notes to Financial Statements.

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    115


 

 

Financial Highlights

 

 

BlackRock Health Sciences Trust (BME)

 

     Year Ended October 31,  
     2012     2011     2010     2009     2008  

Per Share Operating Performance

                                        

Net asset value, beginning of year

   $ 26.65      $ 27.19      $ 25.37      $ 23.66      $ 30.33   
  

 

 

 

Net investment income (loss)1

     0.08        (0.01     0.02        0.10        0.10   

Net realized and unrealized gain (loss)

     4.11        1.71        3.34        3.32        (4.70
  

 

 

 

Net increase (decrease) from investment operations

     4.19        1.70        3.36        3.42        (4.60
  

 

 

 

Dividends and distributions from:2

          

Net investment income

     (0.09            (0.02     (0.13     (0.09

Net realized gain

     (2.41     (2.24     (1.52     (1.01     (1.98

Tax return of capital

                          (0.57       
  

 

 

 

Total dividends and distributions

     (2.50     (2.24     (1.54     (1.71     (2.07
  

 

 

 

Net asset value, end of year

   $ 28.34      $ 26.65      $ 27.19      $ 25.37      $ 23.66   
  

 

 

 

Market price, end of year

   $ 27.86      $ 25.81      $ 27.14      $ 22.61      $ 21.62   
  

 

 

 
          

Total Investment Return3

                                        

Based on net asset value

     16.42%        6.43%        13.69%        16.31%        (15.55)%   
  

 

 

 

Based on market price

     18.17%        3.26%        27.33%        13.44%        (13.47)%   
  

 

 

 
          

Ratios to Average Net Assets

                                        

Total expenses

     1.13%        1.14%        1.15%        1.15%        1.13%   
  

 

 

 

Total expenses after fees waived

     1.13%        1.13%        1.15%        1.15%        1.13%   
  

 

 

 

Net investment income (loss)

     0.29%        (0.02)%        0.09%        0.37%        0.20%   
  

 

 

 
          

Supplemental Data

                                        

Net assets, end of year (000)

   $ 218,377      $ 202,675      $ 206,392      $ 192,602      $ 179,642   
  

 

 

 

Portfolio turnover

     209%        226%        239%        167%        121%   
  

 

 

 

 

  1

Based on average shares outstanding.

  2

Dividends and distributions are determined in accordance with federal income tax regulations.

  3

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of sales charges and include the reinvestment of dividends and distributions.

 

See Notes to Financial Statements.

 

                 
116       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Financial Highlights

 

 

BlackRock International Growth and Income Trust (BGY)

 

     Year Ended October 31,  
     2012     2011     2010     2009     2008  

Per Share Operating Performance

                                        

Net asset value, beginning of year

   $ 8.72      $ 10.52      $ 10.92      $ 10.41      $ 20.12   
  

 

 

 

Net investment income1

     0.16        0.14        0.14        0.29        0.27   

Net realized and unrealized gain (loss)

     0.35        (0.58     1.05        2.04        (8.31
  

 

 

 

Net increase (decrease) from investment operations

     0.51        (0.44     1.19        2.33        (8.04
  

 

 

 

Dividends and distributions from:2

          

Net investment income

     (0.18     (0.67     (0.12     (0.30     (0.30

Net realized gain

                                 (0.88

Tax return of capital

     (0.77     (0.69     (1.47     (1.52     (0.49
  

 

 

 

Total dividends and distributions

     (0.95     (1.36     (1.59     (1.82     (1.67
  

 

 

 

Net asset value, end of year

   $ 8.28      $ 8.72      $ 10.52      $ 10.92      $ 10.41   
  

 

 

 

Market price, end of year

   $ 7.41      $ 7.88      $ 10.56      $ 10.92      $ 9.09   
  

 

 

 
          

Total Investment Return3

                                        

Based on net asset value

     7.65%        (4.55)%        12.06%        26.28%        (41.76)%   
  

 

 

 

Based on market price

     6.61%        (14.07)%        12.49%        44.62%        (42.39)%   
  

 

 

 
          

Ratios to Average Net Assets

                                        

Total expenses

     1.11%        1.10%        1.13%        1.12%        1.11%   
  

 

 

 

Total expenses after fees waived

     1.11%        1.10%        1.13%        1.12%        1.11%   
  

 

 

 

Net investment income

     1.97%        1.37%        1.40%        2.68%        2.34%   
  

 

 

 
          

Supplemental Data

                                        

Net assets, end of year (000)

   $ 910,481      $ 959,153      $ 1,156,583      $ 1,178,647      $ 1,106,516   
  

 

 

 

Portfolio turnover

     226%        217%        247%        198%        123%   
  

 

 

 

 

  1 

Based on average shares outstanding.

  2

Dividends and distributions are determined in accordance with federal income tax regulations.

  3

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of sales charges and include the reinvestment of dividends and distributions.

 

See Notes to Financial Statements.

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    117


 

 

Financial Highlights

 

 

BlackRock Real Asset Equity Trust (BCF)

 

     Year Ended October 31,  
     2012     2011     2010     2009     2008  

Per Share Operating Performance

                                        

Net asset value, beginning of year

   $ 12.45      $ 13.42      $ 11.73      $ 9.44      $ 20.79   
  

 

 

 

Net investment income1

     0.12        0.11        0.17        0.08        0.20   

Net realized and unrealized gain (loss)

     (0.50     0.01        2.61        3.30        (10.16
  

 

 

 

Net increase (decrease) from investment operations

     (0.38     0.12        2.78        3.38        (9.96
  

 

 

 

Dividends and distributions from:2

          

Net investment income

     (0.13     (0.21     (0.74     (0.11     (0.17

Net realized gain

     (0.55     (0.50                   (1.22

Tax return of capital

     (0.36     (0.38     (0.35     (0.98       
  

 

 

 

Total dividends and distributions

     (1.04     (1.09     (1.09     (1.09     (1.39
  

 

 

 

Net asset value, end of year

   $ 11.03      $ 12.45      $ 13.42      $ 11.73      $ 9.44   
  

 

 

 

Market price, end of year

   $ 10.39      $ 11.84      $ 13.46      $ 11.45      $ 7.74   
  

 

 

 
          

Total Investment Return3

                                        

Based on net asset value

     (2.79)%        0.58%        24.65%        40.96%        (50.14)%   
  

 

 

 

Based on market price

     (3.71)%        (4.64)%        28.08%        67.81%        (51.69)%   
  

 

 

 
          

Ratios to Average Net Assets

                                        

Total expenses

     1.29%        1.29%        1.28%        1.32%        1.29%   
  

 

 

 

Total expenses after fees waived and paid indirectly

     1.14%        1.09%        1.08%        1.12%        1.09%   
  

 

 

 

Net investment income

     1.08%        0.77%        1.37%        0.68%        1.14%   
  

 

 

 
          

Supplemental Data

                                        

Net assets, end of year (000)

   $ 630,801      $ 711,917      $ 765,463      $ 664,928      $ 535,257   
  

 

 

 

Portfolio turnover

     72%        79%        71%        58%        29%   
  

 

 

 

 

  1

Based on average shares outstanding.

  2

Dividends and distributions are determined in accordance with federal income tax regulations.

  3

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of sales charges and include the reinvestment of dividends and distributions.

 

See Notes to Financial Statements.

 

                 
118       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Consolidated Financial Highlights

 

 

BlackRock Resources & Commodities Strategy Trust (BCX)

 

     Year Ended
October 31, 2012
   

Period

March 30, 20111
through
October 31, 2011

 

Per Share Operating Performance

                

Net asset value, beginning of period

   $ 16.83      $ 19.10 2 
  

 

 

 

Net investment income3

     0.18        0.03   

Net realized and unrealized loss

     (0.19     (1.57
  

 

 

 

Net decrease from investment operations

     (0.01     (1.54
  

 

 

 

Dividends and distributions from:4

    

Net investment income

     (0.26       

Net realized gain

     (0.01     (0.24

Tax return of capital

     (1.13     (0.46
  

 

 

 

Total dividends and distributions

     (1.40     (0.70
  

 

 

 

Capital charges with respect to the issuance of shares

            (0.03
  

 

 

 

Net asset value, end of period

   $ 15.42      $ 16.83   
  

 

 

 

Market price, end of period

   $ 14.12      $ 14.95   
  

 

 

 
    

Total Investment Return5

                

Based on net asset value

     0.90%        (7.80)%6    
  

 

 

 

Based on market price

     4.02%        (21.79)%6    
  

 

 

 
    

Ratios to Average Net Assets

                

Total expenses

     1.25%        1.35% 7 
  

 

 

 

Total expenses after fees waived

     1.05%        1.13% 7 
  

 

 

 

Net investment income

     1.14%        0.27% 7 
  

 

 

 
    

Supplemental Data

                

Net assets, end of period (000)

   $ 718,016      $ 783,792   
  

 

 

 

Portfolio turnover

     100%        27%   
  

 

 

 

 

  1 

Commencement of investment operations. This information includes the initial investment by BlackRock HoldCo 2, Inc.

  2 

Net asset value, beginning of period, reflects a deduction of $0.8975 per share sales charge from the initial offering price of $20.00 per share.

  3 

Based on average shares outstanding.

  4 

Dividends and distributions are determined in accordance with federal income tax regulations.

  5 

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of sales charges and include the reinvestment of dividends and distributions.

  6 

Aggregate total investment return.

  7 

Annualized.

 

See Notes to Financial Statements.

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    119


 

 

Financial Highlights

 

 

BlackRock S&P Quality Rankings Global Equity Managed Trust (BQY)

 

     Year Ended October 31,  
     2012     2011     2010     2009     2008  

Per Share Operating Performance

                                        

Net asset value, beginning of year

   $ 13.61      $ 14.26      $ 13.38      $ 12.38      $ 21.00   
  

 

 

 

Net investment income1

     0.33        0.35        0.33        0.36        0.50   

Net realized and unrealized gain (loss)

     0.79        (0.00 )2      1.36        1.43        (8.22
  

 

 

 

Net increase (decrease) from investment operations

     1.12        0.35        1.69        1.79        (7.72
  

 

 

 

Dividends and distributions from:3

          

Net investment income

     (0.67     (0.22     (0.11     (0.39     (0.52

Net realized gain

     (0.60     (0.78     (0.70     (0.33       

Tax return of capital

                          (0.07     (0.38
  

 

 

 

Total dividends and distributions

     (1.27     (1.00     (0.81     (0.79     (0.90
  

 

 

 

Net asset value, end of year

   $ 13.46      $ 13.61      $ 14.26      $ 13.38      $ 12.38   
  

 

 

 

Market price, end of year

   $ 12.34      $ 12.43      $ 13.44      $ 11.54      $ 10.50   
  

 

 

 
          

Total Investment Return4

                                        

Based on net asset value

     9.48%        2.79%        14.08%        17.64%        (37.53)%   
  

 

 

 

Based on market price

     9.90%        (0.40)%        24.67%        19.63%        (38.42)%   
  

 

 

 
          

Ratios to Average Net Assets

                                        

Total expenses

     1.18%        1.19%        1.23%        1.17%        0.96%   
  

 

 

 

Total expenses after fees waived

     1.18%        1.19%        1.22%        1.16%        0.96%   
  

 

 

 

Net investment income

     2.50%        2.45%        2.40%        3.39%        3.11%   
  

 

 

 
          

Supplemental Data

                                        

Net assets, end of year (000)

   $ 81,186      $ 82,096      $ 86,047      $ 80,716      $ 74,716   
  

 

 

 

Portfolio turnover

     129%        97%        59%        64%        10%   
  

 

 

 

 

  1 

Based on average shares outstanding.

  2 

Amounted to less than $(0.01) per share outstanding.

  3

Dividends and distributions are determined in accordance with federal income tax regulations.

  4

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of sales charges and include the reinvestment of dividends and distributions.

 

See Notes to Financial Statements.

 

                 
120       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Financial Highlights (concluded)

 

 

BlackRock Utility and Infrastructure Trust (BUI)

 

     Period
November 25,  20111
through
October 31, 2012
 

Per Share Operating Performance

        

Net asset value, beginning of period

   $ 19.10 2 
  

 

 

 

Net investment income3

     0.54   

Net realized and unrealized gain

     1.71   
  

 

 

 

Net increase from investment operations

     2.25   
  

 

 

 

Dividends and distributions from:4

  

Net investment income

     (0.49

Net realized gain

     (0.41

Tax return of capital

     (0.19
  

 

 

 

Total dividends and distributions

     (1.09
  

 

 

 

Capital charges with respect to the issuance of shares

     (0.04
  

 

 

 

Net asset value, end of period

   $ 20.22   
  

 

 

 

Market price, end of period

   $ 19.03   
  

 

 

 
  

Total Investment Return5

        

Based on net asset value

     12.05% 6 
  

 

 

 

Based on market price

     0.71% 6 
  

 

 

 
  

Ratios to Average Net Assets

        

Total expenses

     1.12% 7 
  

 

 

 

Total expenses after fees waived

     1.11% 7 
  

 

 

 

Total expenses after fees waived and excluding excise tax

     1.10% 7 
  

 

 

 

Net investment income

     2.94% 7 
  

 

 

 
  

Supplemental Data

        

Net assets, end of period (000)

   $ 341,939   
  

 

 

 

Portfolio turnover

     90%   
  

 

 

 

 

  1 

Commencement of investment operations. This information includes the initial investment by BlackRock HoldCo 2, Inc.

  2 

Net asset value, beginning of period, reflects a deduction of $0.8975 per share sales charge from the initial offering price of $20.00 per share.

  3 

Based on average shares outstanding.

  4 

Dividends and distributions are determined in accordance with federal income tax regulations.

  5 

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of sales charges and include the reinvestment of dividends and distributions.

  6 

Aggregate total investment return.

  7 

Annualized.

 

See Notes to Financial Statements.

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    121


 

 

Notes to Financial Statements

 

 

1. Organization and Significant Accounting Policies:

BlackRock EcoSolutions Investment Trust (“BQR”), BlackRock Energy and Resources Trust (“BGR”), BlackRock Enhanced Capital and Income Fund, Inc. (“CII”), BlackRock Enhanced Equity Dividend Trust (“BDJ”), BlackRock Global Opportunities Equity Trust (“BOE”), BlackRock Health Sciences Trust (“BME”), BlackRock International Growth and Income Trust (“BGY”), BlackRock Real Asset Equity Trust (“BCF”), BlackRock Resources & Commodities Strategy Trust (“BCX”), BlackRock S&P Quality Rankings Global Equity Managed Trust (“BQY”) and BlackRock Utility and Infrastructure Trust (“BUI”) (each, a “Trust” and collectively, the “Trusts”) are organized as Delaware statutory trusts, except CII which is organized as a Maryland Corporation. CII, BDJ, BOE and BQY are registered as diversified, closed-end management investment companies under the Investment Company Act of 1940, as amended (the “1940 Act”). BQR, BGR, BME, BGY, BCF, BCX and BUI are registered as non-diversified, closed-end management investment companies under the 1940 Act. Prior to commencement of operations on November 25, 2011, BUI had no operations other than those relating to organizational matters and the sale of 6,964 Common Shares on August 25, 2011 to BlackRock HoldCo 2, Inc. for $100,012. Investment operations for BUI commenced on November 25, 2011. The Trusts’ financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), which may require management to make estimates and assumptions that affect the reported amounts and disclosure in the financial statements. Actual results could differ from those estimates. The Boards of Trustees and Board of Directors of the Trusts are collectively referred to throughout this report as the “Board of Trustees” or the “Board”, and the directors/trustees thereof are collectively referred to throughout this report as “Trustees.” The Trusts determine and make available for publication the NAVs of their shares on a daily basis.

Reorganizations: The Board and shareholders of BDJ and the Board of Trustees and shareholders of each of BlackRock Equity Dividend Trust (“BDV”) and BlackRock Strategic Equity Dividend Trust (“BDT”) (individually, a “Target Trust” and collectively the “Target Trusts”) approved the reorganizations of each Target Trust into BDJ pursuant to which BDJ acquired substantially all of the assets and substantially all of the liabilities of each Target Trust in exchange for an equal aggregate value of newly-issued BDJ shares.

Each shareholder of a Target Trust received shares of BDJ in an amount equal to the aggregate NAV of such shareholder’s Target Trust shares, as determined at the close of business on February 24, 2012.

The reorganizations were accomplished by a tax-free exchange of shares of BDJ in the following amounts and at the following conversion ratios:

 

 

 
Target Trusts   

Shares

Prior to
Reorganization

   Common Shares
Conversion
Ratio
   Shares of
BDJ
 

 

 

BDV

   54,638,903    1.27840257      69,850,515   

BDT

   26,908,028    1.41137167      37,977,229   

 

 

Each Target Trust’s net assets and composition of net assets on February 24, 2012, the date of the reorganization, were as follows:

 

 

 

Tar-

get

Tru-

sts

 

Net

Assets

   

Paid-in

Capital

   

Distri-

butions

in
Excess
of Net
Invest-

ment
Income

   

Accu-

mulated

Net

Realized

Loss

   

Net

Unreal-

ized

Appre-

ciation

 

 

 

BDV

  $ 590,660,911      $ 647,693,876      $ (173,949   $ (92,018,281   $ 35,159,265   

BDT

  $ 321,139,863      $ 327,248,656      $ 316,616      $ (29,161,302   $ 22,735,893   

 

 

For financial reporting purposes, assets received and shares issued by BDJ were recorded at fair value. However, the cost basis of the investments received from the Target Trusts were carried forward to align ongoing reporting of BDJ’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.

The aggregate net assets of BDJ immediately after the acquisition amounted to $1,517,719,362. Each Target Trust’s fair value and cost of investments prior to the reorganization were as follows:

 

 

 
Target Trusts    Fair Value of
Investments
     Cost of
Investments
 

 

 

BDV

   $ 588,487,468       $ 553,328,182   

BDT

   $ 318,996,795       $ 296,260,902   

 

 

The purpose of these transactions was to combine three funds managed by the Manager, the investment advisor to BDJ, BDV and BDT with the same or substantially similar (but not identical) investment objectives, investment policies, strategies, risks and restrictions. Each reorganization was a tax-free event and was effective on February 27, 2012.

Assuming the acquisitions had been completed on November 1, 2011, the beginning of the fiscal reporting period of BDJ, the pro forma results of operations for the year ended October 31, 2012, are as follows:

• Net investment income: $32,331,130

• Net realized and change in unrealized gain/loss on investments: $141,874,756

• Net increase in net assets resulting from operations: $174,205,886

 

 

                 
122       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Notes to Financial Statements (continued)

 

 

Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of BDV and BDT that have been included in BDJ’s Statement of Operations since February 27, 2012.

Reorganization costs incurred by BDJ in connection with the reorganization were paid by BDJ.

The following is a summary of significant accounting policies followed by the Trusts:

Basis of Consolidation: The accompanying consolidated financial statements of BCX include the accounts of BlackRock Cayman Resources & Commodities Strategy Fund, Ltd. (the “Subsidiary”), a wholly owned subsidiary of BCX, which primarily invests in commodity-related instruments. The Subsidiary enables BCX to hold these commodity-related instruments and still satisfy Regulated Investment Company (“RIC”) tax requirements. BCX may invest up to 25% of its total assets in the Subsidiary. Intercompany accounts and transactions have been eliminated. The Subsidiary is subject to the same investment policies and restrictions that apply to BCX.

Valuation: US GAAP defines fair value as the price the Trusts would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Trusts fair value their financial instruments at market value using independent dealers or pricing services under policies approved by the Board. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to provide oversight of the pricing function for the Trusts for all financial instruments. Equity investments traded on a recognized securities exchange or the NASDAQ Global Market System (“NASDAQ”) are valued at the last reported sale price that day or the NASDAQ official closing price, if applicable. For equity investments traded on more than one exchange, the last reported sale price on the exchange where the stock is primarily traded is used.

Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last available bid price. If no bid price is available, the prior day’s price will be used, unless it is determined that such prior day’s price no longer reflects the fair value of the security. Investments in open-end registered investment companies are valued at the NAV each business day. Financial futures contracts traded on exchanges are valued at their last sale price.

The Trusts value their investments in BlackRock Liquidity Series, LLC Money Market Series (the “Money Market Series”) at fair value, which is ordinarily based upon each Trust’s pro rata ownership in the underlying fund’s net assets. The Money Market Series seeks current income consistent with maintaining liquidity and preserving capital. Although the Money Market Series is not registered under the 1940 Act, its investments will follow the parameters of investments by a money

market fund that is subject to Rule 2a-7 under the 1940 Act. The Trusts may withdraw up to 25% of their investment daily, although the manager of the Money Market Series, in its sole discretion, may permit an investor to withdraw more than 25% on any one day.

Securities and other assets and liabilities denominated in foreign currencies are translated into US dollars using exchange rates determined as of the close of business on the New York Stock Exchange (“NYSE”). Foreign currency exchange contracts are valued at the mean between the bid and ask prices and are determined as of the close of business on the NYSE. Interpolated values are derived when the settlement date of the contract is an interim date for which quotations are not available.

Exchange-traded options are valued at the mean between the last bid and ask prices at the close of the options market in which the options trade. An exchange-traded option for which there is no mean price is valued at the last bid (long positions) or ask (short positions) price. If no bid or ask price is available, the prior day’s price will be used, unless it is determined that the prior day’s price no longer reflects the fair value of the option. Over-the-counter (“OTC”) options are valued by an independent pricing service using a mathematical model which incorporates a number of market data factors, such as the trades and prices of the underlying instruments.

In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the Global Valuation Committee, or its delegate, in accordance with a policy approved by the Board as reflecting fair value (“Fair Value Assets”). When determining the price for Fair Value Assets, the Global Valuation Committee, or its delegate, seeks to determine the price that each Trust might reasonably expect to receive from the current sale of that asset in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the investment advisor and/or sub-advisor deems relevant consistent with the principles of fair value measurement which include the market approach, income approach and/or cost approach, as appropriate. A market approach generally consists of using comparable market transactions. The income approach generally is used to discount future cash flows to present value and adjusted for liquidity as appropriate. These factors include but are not limited to (i) attributes specific to the investment or asset; (ii) the principal market for the investment or asset; (iii) the customary participants in the principal market for the investment or asset; (iv) data assumptions by market participants for the investment or asset, if reasonably available; (v) quoted prices for similar investments or assets in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, recovery rates, liquidation amounts and/or default rates. Due to the inherent uncertainty of valuations of such investments, the fair values may differ from the values that would have been used had an active market existed. The Global Valuation Committee, or its delegate, employs various methods for calibrating valuation approaches for investments

 

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    123


 

 

Notes to Financial Statements (continued)

 

 

where an active market does not exist including regular due diligence of the Trusts’ pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices and large movements in market values and reviews of any market related activity. The pricing of all Fair Value Assets is subsequently reported to the Board or a committee thereof.

Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of business on the NYSE. Occasionally, events affecting the values of such instruments may occur between the foreign market close and the close of business on the NYSE that may not be reflected in the computation of each Trust’s net assets. If events (for example, a company announcement, market volatility or a natural disaster) occur during such periods that are expected to materially affect the value of such instruments, those instruments may be Fair Value Assets and be valued at their fair value, as determined in good faith by the Global Valuation Committee using a pricing service and/or policies approved by the Board. Each business day, each Trust uses a pricing service to assist with the valuation of certain foreign exchange-traded equity securities and foreign exchange-traded and OTC options (the “Systematic Fair Value Price”). Using current market factors, the Systematic Fair Value Price is designed to value such foreign securities and foreign options at fair value as of the close of business on the NYSE, which follows the close of the local markets.

Foreign Currency Transactions: The Trusts’ books and records are maintained in US dollars. Purchases and sales of investment securities are recorded at the rates of exchange prevailing on the respective date of such transactions. Generally, when the US dollar rises in value against a foreign currency, the Trusts’ investments denominated in that currency will lose value because that currency is worth fewer US dollars; the opposite effect occurs if the US dollar falls in relative value.

The Trusts do not isolate the portion of the results of operations arising as a result of changes in the foreign exchange rates from the changes in the market prices of investments held or sold for financial reporting purposes. Accordingly, the effects of changes in foreign currency exchange rates on investments are not segregated on the Statements of Operations from the effects of changes in market prices of those investments but are included as a component of net realized and unrealized gain (loss) from investments. The Trusts report realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are treated as ordinary income for federal income tax purposes.

Segregation and Collateralization: In cases in which the 1940 Act and the interpretive positions of the Securities and Exchange Commission (“SEC”) require that each Trust either delivers collateral or segregates assets in connection with certain investments (e.g., foreign currency exchange contracts or options written), each Trust will, consistent with SEC rules and/or certain interpretive letters issued by the SEC, segregate collateral or designate on its books and records cash or liquid

securities having a market value at least equal to the amount that would otherwise be required to be physically segregated. Furthermore, based on requirements and agreements with certain exchanges and third party broker-dealers, a Trust engaging in such transactions may have requirements to deliver/deposit securities to/with an exchange or broker-dealer as collateral for certain investments.

Investment Transactions and Investment Income: For financial reporting purposes, investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on investment transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend dates. Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when a Trust is informed of the ex-dividend date. Under the applicable foreign tax laws, a withholding tax at various rates may be imposed on capital gains, dividends and interest. Upon notification from issuers, some of the dividend income received from a real estate investment trust may be redesignated as a reduction of cost of the related investment and/or realized gain. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized on the accrual basis.

Dividends and Distributions: Dividends and distributions paid by the Trusts are recorded on the ex-dividend dates. Subject to each Trust’s level distribution plan, each Trust intends to make quarterly cash dividends and/or distributions to shareholders, which may consist of net investment income, net options premium and net realized and unrealized gains on investments. The portion of distributions that exceeds a Trust’s current and accumulated earnings and profits, which are measured on a tax basis, will constitute a nontaxable return of capital. Distributions in excess of a Trust’s taxable income and net capital gains, but not in excess of a Trust’s earnings and profits, will be taxable to shareholders as ordinary income and will not constitute a nontaxable return of capital. Capital losses carried forward from years beginning before 2011 do not reduce earnings and profits, even if such carried forward losses offset current year realized gains. The character of dividends and distributions is determined in accordance with federal income tax regulations, which may differ from US GAAP.

Securities Lending: The Trusts may lend securities to approved borrowers, such as banks, brokers and other financial institutions. The borrower pledges cash, securities issued or guaranteed by the US government or irrevocable letters of credit issued by a bank as collateral, which will be maintained at all times in an amount equal to at least 100% of the current market value of the loaned securities. The market value of the loaned securities is determined at the close of business of the Trusts and any additional required collateral is delivered to the Trust on the next business day. Securities lending income, as disclosed in the Statements of Operations, represents the income earned from the investment of the cash collateral, net of rebates paid to, or fees paid by, borrowers and less the fees paid to the securities lending agent. During the term of the loan, the Trusts earn dividends or interest income on the securities loaned but do not receive interest income on the securities received as collateral. Loans of securities are

 

 

                 
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Notes to Financial Statements (continued)

 

 

terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions. In the event that the borrower defaults on its obligation to return borrowed securities because of insolvency or for any other reason, the Trusts could experience delays and costs in gaining access to the collateral. The Trusts also could suffer a loss if the value of an investment purchased with cash collateral falls below the market value of loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received. During the year ended October 31, 2012, any securities on loan were collateralized by cash.

Income Taxes: It is the Trusts’ policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income tax provision is required.

The Trusts file US federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Trusts’ US federal tax returns remains open for each of the four years ended October 31, 2012 with the exception of BCX and BUI. The statute of limitations on BCX’s US federal tax returns remains open for the year ended October 31, 2012 and the period ended October 31, 2011. The statute of limitations on BUI’s US federal tax returns remains open for the period ended October 31, 2012. The statutes of limitations on each Trust’s state and local tax returns may remain open for an additional year depending upon the jurisdiction. Management does not believe there are any uncertain tax positions that require recognition of a tax liability.

Recent Accounting Standard: In December 2011, the Financial Accounting Standards Board issued guidance that will expand current disclosure requirements on the offsetting of certain assets and liabilities. The new disclosures will be required for investments and derivative financial instruments subject to master netting or similar agreements which are eligible for offset in the Statements of Assets and Liabilities and will require an entity to disclose both gross and net information about such investments and transactions in the financial statements. The guidance is effective for financial statements with fiscal years beginning on or after January 1, 2013, and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Trusts’ financial statement disclosures.

Deferred Compensation and BlackRock Closed-End Share Equivalent Investment Plan: Under the deferred compensation plan approved by each Trust’s Board except CII, independent Trustees (“Independent Trustees”) may defer a portion of their annual complex-wide compensation. Deferred amounts earn an approximate return as though equivalent dollar amounts had been invested in common shares of certain other BlackRock Closed-End Funds selected by the Independent Trustees. This has approximately the same economic effect for the Independent Trustees as if the Independent Trustees had invested the deferred amounts directly in certain other BlackRock Closed-End Funds.

The deferred compensation plan is not funded and obligations thereunder represent general unsecured claims against the general assets of each Trust. Prior to March 31, 2012, each Trust elected to invest in common shares of certain other BlackRock Closed-End Funds selected by the Independent Trustees in order to match its deferred compensation obligations. Dividends and distributions received from the BlackRock Closed-End Fund investments through March 31, 2012 are included in dividends - affiliated in the Statements of Operations.

S&P Quality Rankings: BQY has been granted a license by Standard & Poor’s® (“S&P”) to use the S&P Quality Rankings and the S&P International Quality Rankings. If S&P terminates the license to use either the S&P Quality Rankings or the S&P International Quality Rankings, the Board may need to adopt a new investment strategy and/or new investment policies. There is no assurance that the BQY would pursue or achieve its investment objective during the period in which it implements these replacement investment policies or strategies. “Standard & Poor’s,” “S&P,” “Standard & Poor’s Earnings and Dividend Rankings,” “S&P Earnings and Dividend Rankings,” “Standard & Poor’s Quality Rankings,” “Standard & Poor’s International Quality Rankings,” “S&P International Quality Rankings” and “S&P Quality Rankings” are trademarks of S&P and have been licensed for use by the BQY. BQY is not sponsored, endorsed, managed, sold or promoted by S&P and S&P makes no representation regarding the advisability of investing in BQY. BQY is required to pay a quarterly licensing fee, which is shown in the Statements of Operations as licensing.

Other: Expenses directly related to a Trust are charged to that Trust. Other operating expenses shared by several funds are pro rated among those funds on the basis of relative net assets or other appropriate methods.

The Trusts have an arrangement with the custodian whereby fees may be reduced by credits earned on uninvested cash balances, which, if applicable, are shown as fees paid indirectly in the Statement of Operations. The custodian imposes fees on overdrawn cash balances, which can be offset by accumulated credits earned or may result in additional custody charges.

2. Derivative Financial Instruments:

The Trusts engage in various portfolio investment strategies using derivative contracts both to increase the returns of the Trusts and/or to economically hedge, or protect, their exposure to certain risks such as equity risk or foreign currency exchange rate risk. These contracts may be transacted on an exchange or OTC.

Losses may arise if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument or if the counterparty does not perform under the contract. The Trusts’ maximum risk of loss from counterparty credit risk on OTC derivatives is generally the aggregate unrealized gain netted against any collateral pledged by/posted to the counterparty. For OTC options purchased, the Trusts bear the risk of loss in the amount of the premiums paid plus the positive change in market values net of any

 

 

                 
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Notes to Financial Statements (continued)

 

 

collateral received on the options should the counterparty fail to perform under the contracts. Options written by the Trusts do not give rise to counterparty credit risk, as options written obligate the Trusts to perform and not the counterparty. Counterparty risk related to exchange-traded options is deemed to be minimal due to the protection against defaults provided by the exchange on which these contracts trade.

The Trusts may mitigate counterparty risk by procuring collateral and through netting provisions included within an International Swaps and Derivatives Association, Inc. master agreement (“ISDA Master Agreement”) implemented between a Trust and each of its respective counterparties. An ISDA Master Agreement allows each Trust to offset with each separate counterparty certain derivative financial instrument’s payables and/or receivables with collateral held. The amount of collateral moved to/from applicable counterparties is generally based upon minimum transfer amounts of up to $500,000. To the extent amounts due to the Trusts from their counterparties are not fully collateralized, contractually or otherwise, the Trusts bear the risk of loss from counterparty non-performance. See Note 1 “Segregation and Collateralization” for information with respect to collateral practices. In addition, the Trusts manage counterparty risk by entering into agreements only with counterparties that it believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.

Certain ISDA Master Agreements allow counterparties of OTC derivatives to terminate derivative contracts prior to maturity in the event the Trusts’ net assets decline by a stated percentage or the Trusts fail to meet the terms of its ISDA Master Agreements, which would cause the Trusts to accelerate payment of any net liability owed to the counterparty.

Foreign Currency Exchange Contracts: Certain Trusts enter into foreign currency exchange contracts as an economic hedge against either specific transactions or portfolio instruments or to obtain exposure to foreign currencies (foreign currency exchange rate risk). A foreign currency exchange contract is an agreement between two parties to buy and sell a currency at a set exchange rate on a future date. Foreign currency exchange contracts, when used by a Trust, help to manage the overall exposure to the currencies in which some of the investments held by a Trust are denominated. The contract is marked-to-market daily and the change in market value is recorded by the Trust as an unrealized gain or loss. When the contract is closed, a Trust record a realized gain or loss equal to the difference between the value at the time it was opened and the value at the time it was closed. The use of foreign currency exchange contracts involves the risk that the value of a foreign currency exchange contract changes unfavorably due to movements in the value of the referenced foreign currencies and the risk that the counterparty to the contract does not perform its obligations under the agreement.

Options: The Trusts purchase and write call and put options to increase or decrease their exposure to underlying instruments (including equity risk and/or commodity price risk) and/or, in the case of options written, to generate gains from options premiums. A call option gives the

purchaser (holder) of the option the right (but not the obligation) to buy, and obligates the seller (writer) to sell (when the option is exercised), the underlying instrument at the exercise or strike price at any time or at a specified time during the option period. A put option gives the holder the right to sell and obligates the writer to buy the underlying instrument at the exercise or strike price at any time or at a specified time during the option period. When the Trusts purchase (write) an option, an amount equal to the premium paid (received) by the Trusts is reflected as an asset (liability). The amount of the asset (liability) is subsequently marked-to-market to reflect the current market value of the option purchased (written). When an instrument is purchased or sold through an exercise of an option, the related premium paid (or received) is added to (or deducted from) the basis of the instrument acquired or deducted from (or added to) the proceeds of the instrument sold. When an option expires (or the Trusts enter into a closing transaction), the Trusts realize a gain or loss on the option to the extent of the premiums received or paid (or gain or loss to the extent the cost of the closing transaction exceeds the premiums received or paid). When the Trusts write a call option, such option is “covered,” meaning that the Trusts hold the underlying instrument subject to being called by the option counterparty. When the Trusts write a put option, such option is covered by cash in an amount sufficient to cover the obligation.

In purchasing and writing options, the Trusts bear the risk of an unfavorable change in the value of the underlying instrument or the risk that the Trusts may not be able to enter into a closing transaction due to an illiquid market. Exercise of a written option could result in the Trusts purchasing or selling a security at a price different from the current market value.

Financial Futures Contracts: The Trusts purchase or sell financial futures contracts and options on financial futures contracts to gain exposure to, or economically hedge against, changes in interest rates (interest rate risk). Financial futures contracts are agreements between the Trust and counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and at a specified date. Depending on the terms of the particular contract, financial futures contracts are settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date. Pursuant to the contract, the Trusts agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin and are recorded by the Trusts as unrealized appreciation or depreciation. When the contract is closed, the Trusts record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of financial futures contracts involves the risk of an imperfect correlation in the movements in the price of financial futures contracts, interest rates and the underlying assets.

 

 

                 
126       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Notes to Financial Statements (continued)

 

 

Derivative Financial Instruments Categorized by Risk Exposure:                 
     Fair Values of Derivative Financial Instruments as of October 31, 2012                            
    Asset Derivatives          
         CII      BDJ      BQY                 
    

Statements of Assets and

Liabilities Location

           Value                         

Equity contracts

 

Investments at value – unaffiliated1

   $ 4,450       $ 10,849       $ 375            

 

                   Liability Derivatives                       
          BQR     BGR     CII     BDJ     BOE     BME  
     

Statements of Assets and

Liabilities Location

                 Value                       
Foreign currency exchange contracts    Unrealized depreciation on foreign currency exchange contracts                         $ (167   $ (6,312   $ (1,062

Equity contracts

  

Investments at value

– unaffiliated1

   $ (1,051,046   $ (5,879,203   $ (5,425,075     (15,874,790     (11,619,050     (2,999,325

Total

        $ (1,051,046   $ (5,879,203   $ (5,425,075   $ (15,874,957   $ (11,625,362   $ (3,000,387

 

           Liability Derivatives  
              BGY     BCF     BCX     BQY     BUI  
    

Statements of Assets and

Liabilities Location

                       Value                

Foreign currency exchange contracts

  Unrealized depreciation on foreign currency exchange contracts                            $ (9   $ (17

Equity contracts

 

Investments at value

– unaffiliated1

      $ (16,436,689   $ (5,555,305   $ (6,339,279     (446,146     (2,753,157

Total

            $ (16,436,689   $ (5,555,305   $ (6,339,279   $ (446,155   $ (2,753,174

 

1

Includes options purchased at value as reported in the Schedules of Investments.

 

The Effect of Derivative Financial Instruments in the Statements of Operations  
Year Ended October 31, 2012  
     Net Realized Gain (Loss) From  
      BQR     BGR     CII      BDJ      BOE      BME  

Foreign currency exchange contracts:

               

Foreign currency transactions

   $ (26,442   $ (21,343     —         $ 45,376       $ 219,746       $ (4,118

Equity contracts:

               

Options2

     2,403,556        29,168,157      $ 20,867,499         42,005,611         54,521,904         5,108,263   

Total

   $ 2,377,114      $ 29,146,814      $ 20,867,499       $ 42,050,987       $ 54,741,650       $ 5,104,145   

 

      Net Realized Gain (Loss) From  
      BGY      BCF      BCX     BQY      BUI3  

Foreign currency exchange contracts:

             

Foreign currency transactions.

   $ 512,602       $ 108,248       $ (234,639   $ 7,127       $ 259,863   

Equity contracts:

             

Financial futures contracts

     302,636         —           —          —           —     

Options2

     37,462,266         31,702,477         32,391,921        2,133,240         1,940,833   

Total

   $ 38,277,504       $ 31,810,725       $ 32,157,282      $ 2,140,367       $ 2,200,696   

 

2

Options purchased are included in the net realized gain (loss) from investments-unaffiliated and net change in unrealized appreciation/depreciation on investments.

3

Commenced operations on November 25, 2011.

 

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    127


 

 

Notes to Financial Statements (continued)

 

 

     

Net Change in Unrealized

Appreciation/Depreciation on

 
      BQR      BGR     CII      BDJ     BOE     BME  

Foreign currency exchange contracts:

              

Foreign currency translations

   $ 244                      $ (271   $ (17,028   $ 11,872   

Equity contracts:

              

Options1

     781,511       $ (1,418,769   $ 6,564,083         6,392,068        11,709,758        137,892   
  

 

 

 

Total

   $ 781,755       $ (1,418,769   $ 6,564,083       $ 6,391,797      $ 11,692,730      $ 149,764   

 

 

 

     

Net Change in Unrealized

Appreciation/Depreciation on

 
      BGY      BCF     BCX     BQY     BUI2  

Foreign currency exchange contracts:

           

Foreign currency translations

   $ 167,264       $ 600      $ (22   $ (5,165   $ (17

Equity contracts:

           

Options1

     9,320,270         (2,737,965     1,111,252        284,621        (222,739
  

 

 

 

Total

   $ 9,487,534       $ (2,737,365   $ 1,111,230      $ 279,456      $ (222,756

 

 

 

  1 

Options purchased are included in the net realized gain (loss) from investments-unaffiliated and net change in unrealized appreciation/depreciation on investments.

 

  2 

Commenced operations on November 25, 2011.

For the year ended October 31, 2012, the average quarterly balances of outstanding derivative financial instruments were as follows:

 

      BQR     BGR      CII      BDJ      BOE      BME  

Foreign currency exchange contracts:

                

Average number of contracts - US dollars purchased

     1                        1         3         1   

Average number of contracts - US dollars sold

     1     1                 1         6         1   

Average US dollar amounts purchased

   $ 9,291                      $ 98,330       $ 2,587,434       $ 981,448   

Average US dollar amounts sold

   $ 315,337      $ 1,859,323               $ 489,086       $ 9,245,252       $ 361,764   

Options:

                

Average number of contracts purchased

            159         44,500         64,625         354         108   

Average number of contracts written

     6,686,267        4,213,375         3,105,659         11,299,578         30,835,602         1,023,830   

Average notional value of contracts purchased

          $ 206,375       $ 954,250       $ 3,115,750       $ 1,118,800       $ 536,938   

Average notional value of contracts written

   $ 45,144,993      $ 244,536,197       $ 169,786,934       $ 694,749,028       $ 538,506,132       $ 71,799,818   

 

 

 

      BGY      BCF     BCX      BQY      BUI  

Foreign currency exchange contracts:

             

Average number of contracts - US dollars purchased

     4         1        2         1         1   

Average number of contracts - US dollars sold

     4         1     2         1           

Average US dollar amounts purchased

   $ 4,907,465       $ 105,046      $ 414,299       $ 10,320       $ 22,552   

Average US dollar amounts sold

   $ 6,271,604       $ 222,539      $ 2,176,958       $ 163,056           

Options:

             

Average number of contracts purchased

             70        40         3,750         95   

Average number of contracts written

     40,845,686         9,264,287        7,294,406         955,043         5,724,134   

Average notional value of contracts purchased

           $ 217,000      $ 124,000       $ 116,250       $ 370,500   

Average notional value of contracts written

   $ 447,071,099       $ 214,591,172      $ 237,154,311       $ 31,531,491       $ 103,944,362   

 

 

 

  * Average contract amount shown due to limited activity.

 

3. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. (“PNC”) is the largest stockholder and an affiliate, for 1940 Act purposes, of BlackRock, Inc. (“BlackRock”).

Each Trust entered into an Investment Advisory Agreement with BlackRock Advisors, LLC (the “Manager”), the Trusts’ investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory and administration services. The Manager is responsible for the

 

 

                 
128       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Notes to Financial Statements (continued)

 

 

management of each Trust’s portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of each Trust. For such services, each Trust pays the Manager a monthly fee at the following annual rates of the average weekly value of each Trust’s net assets: 1.20% for BQR, 1.20% for BGR, 1.00% for BOE, 1.00% for BME, 1.00% for BGY, 1.20% for BCF and 0.75% for BQY. Prior to February 27, 2012, BDJ paid the Manager a monthly fee at an annual rate of 1.00% of the average weekly value of net assets. Effective February 27, 2012, BDJ pays the Manager a monthly fee at the annual rate of 0.81% of the average weekly value of net assets. CII, BCX and BUI pay the Manager a monthly fee at the annual rate of 0.85%, 1.20% and 1.00%, respectively, of the average daily value of the Trust’s net assets. The Manager has voluntarily agreed to waive a portion of the investment advisory fees on BGR and BCF as a percentage of their average weekly net assets as follows:

 

             Expiration Date

BGR

     0.10   December 29, 2011
     0.05   December 29, 2012

BCF

     0.15   September 29, 2012
     0.10   September 29, 2013
       0.05   September 29, 2014

The Manager has voluntarily agreed to waive a portion of the investment advisory fees on BCX as a percentage of its average daily net assets as follows:

 

             Expiration Date

BCX

     0.20   October 31, 2015
     0.15   October 31, 2016
     0.10   October 31, 2017
       0.05   October 31, 2018

The Manager provides investment management and other services to the Subsidiary. The Manager does not receive separate compensation from the Subsidiary for providing investment management or administrative services. However, BCX pays the Manager based on the Trust’s net assets which includes the assets of the Subsidiary.

The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Trust pays to the Manager indirectly through its investment in affiliated money market funds. However, the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid in connection with each Trust’s investment in other affiliated investment companies, if any. These amounts are included in fees waived by Manager in the Statements of Operations. For the year ended October 31, 2012, the amounts waived were as follows:

BQR

   $ 5,240   

BGR

   $ 15,992   

CII

   $ 13,079   

BDJ

   $ 38,625   

BOE

   $ 35,299   

BME

   $ 7,639   

BGY

   $ 36,162   

BCF

   $ 24,178   

BCX

   $ 16,838   

BQY

   $ 3,301   

BUI

   $ 21,542   

The Manager entered into separate sub-advisory agreements with BlackRock Financial Management, Inc. (“BFM”) for BDJ and BQY, State Street Research & Management Co. for BGR, BlackRock Investment Management, LLC (“BIM”) and BlackRock Capital Management, Inc. for BGY, BCF and BCX, BlackRock International Ltd. for BQR and BCF and BFM and BIM for CII and BUI, each an affiliate of the Manager. The Manager pays each sub-advisor for services they provide, a monthly fee that is a percentage of the investment advisory fee paid by each Trust to the Manager.

Certain Trusts received an exemptive order from the SEC permitting them, among other things, to pay an affiliated securities lending agent a fee based on a share of the income derived from the securities lending activities and has retained BIM as the securities lending agent. BIM may, on behalf of the Trusts, invest cash collateral received by the Trusts for such loans, among other things, in a private investment company managed by the Manager or in registered money market funds advised by the Manager or its affiliates. As securities lending agent, BIM is responsible for all transaction fees and all other operational costs relating to securities lending activities, other than extraordinary expenses. BIM does not receive any fees for managing the cash collateral. The market value of securities on loan and the value of the related collateral, if applicable, are shown in the Statements of Assets and Liabilities as securities loaned at value and collateral on securities loaned at value, respectively. The cash collateral invested by BIM is disclosed in the Schedules of Investments, if any. Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of rebates paid to, or fees paid by, borrowers of securities. The Trusts retain 65% of securities lending income and pays a fee to BIM equal to 35% of such income. The share of income earned by the Trusts is shown as securities lending–affiliated in the Statements of Operations. For the year ended October 31, 2012, BIM received $174,673 in securities lending agent fees related to securities lending activities for the Trusts.

Certain officers and/or trustees of the Trusts are officers and/or trustees of BlackRock or its affiliates. The Trusts reimburse the Manager for compensation paid to the Trusts’ Chief Compliance Officer.

 

 

                 
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Notes to Financial Statements (continued)

 

 

4. Investments:

Purchases and sales of investment securities, excluding short-term securities, for the year ended October 31, 2012, were as follows:

 

 

 
     Purchases      Sales  

 

 

BQR

   $ 115,605,921       $ 118,079,213   

BGR

   $ 673,071,622       $ 670,121,147   

CII

   $ 1,276,693,234       $ 1,294,871,298   

BDJ

   $ 2,135,747,485       $ 2,160,607,368   

BOE

   $ 3,053,325,577       $ 3,087,605,865   

BME

   $ 433,565,684       $ 418,709,417   

BGY

   $ 2,010,164,816       $ 1,970,938,741   

BCF

   $ 458,428,011       $ 458,051,458   

BCX

   $ 801,384,014       $ 699,223,619   

BQY

   $ 111,437,606       $ 99,019,306   

BUI

   $ 573,805,920       $ 259,688,646   

 

 

Transactions in options written for the year ended October 31, 2012, were as follows:

 

    Calls     Puts  
 

 

 

   

 

 

 
    Contracts     Premiums
Received
    Contracts     Premiums
Received
 

 

 

BQR

       

Outstanding options at beginning of year

    10,145,445      $ 1,826,626                 

Options written

    48,959,188        10,491,178                 

Options expired

    (21,682,149     (4,190,008              

Options closed

    (20,386,859     (3,298,711              

Options exercised

    (10,146,077     (3,483,301              
 

 

 

   

 

 

   

 

 

   

 

 

 

Outstanding options at end of year

    6,889,548      $ 1,345,784                 
 

 

 

   

 

 

   

 

 

   

 

 

 
       

 

 

 

BGR

       

Outstanding options at beginning of year

    4,116,070      $ 13,563,526                 

Options written

    12,487,814        54,340,259                 

Options expired

    (6,417,484     (28,556,158              

Options closed

    (2,472,630     (14,158,814              

Options exercised

    (3,634,992     (14,854,712              
 

 

 

   

 

 

   

 

 

   

 

 

 

Outstanding options at end of year

    4,078,778      $ 10,334,101                 
 

 

 

   

 

 

   

 

 

   

 

 

 
       

 

 

 

CII

       

Outstanding options at beginning of year

    3,081,990      $ 10,084,402                 

Options written

    21,916,437        51,581,205                 

Options expired

    (7,493,799     (15,533,671              

Options closed

    (3,193,786     (9,253,237              

Options exercised

    (10,469,382     (29,211,502              
 

 

 

   

 

 

   

 

 

   

 

 

 

Outstanding options at end of year

    3,841,460      $ 7,667,197                 
 

 

 

   

 

 

   

 

 

   

 

 

 
       

 

 
    Calls     Puts  
 

 

 

   

 

 

 
    Contracts     Premiums
Received
    Contracts     Premiums
Received
 

 

 

BDJ

       

Outstanding options at beginning of year

    1,926,800      $ 8,947,908                 

Options written

    46,791,501        103,513,009        1,331,314      $ 2,382,399   

Options expired

    (14,441,727     (31,108,258     (714     (41,167

Options closed

    (6,101,679     (16,643,466              

Options exercised

    (20,139,701     (47,357,539              
 

 

 

   

 

 

   

 

 

   

 

 

 

Outstanding options at end of year

    8,035,194      $ 17,351,654        1,330,600        2,341,232   
 

 

 

   

 

 

   

 

 

   

 

 

 
       

 

 

 

BOE

       

Outstanding options at beginning of year

    30,621,800      $ 23,928,572        22,880      $ 325,160   

Options written

    249,298,467        122,885,223        548,042        146,787   

Options expired

    (112,833,236     (49,011,801     (570,676     (439,752

Options closed

    (58,490,368     (30,837,445              

Options exercised

    (78,092,746     (52,663,066     (246     (32,195
 

 

 

   

 

 

   

 

 

   

 

 

 

Outstanding options at end of year

    30,503,917      $ 14,301,483                 
 

 

 

   

 

 

   

 

 

   

 

 

 
       

 

 

 

BME

       

Outstanding options at beginning of year

    263,431      $ 2,262,610        102,819      $ 508,938   

Options written

    2,595,815        13,288,758        228,376        904,182   

Options expired

    (827,748     (4,669,775     (3,355     (337,729

Options closed

    (601,745     (3,830,504     (59,192     (136,766

Options exercised

    (835,408     (4,508,830     (44,078     (448,247
 

 

 

   

 

 

   

 

 

   

 

 

 

Outstanding options at end of year

    594,345      $ 2,542,259        224,570      $ 490,378   
 

 

 

   

 

 

   

 

 

   

 

 

 
       

 

 

 

BGY

       

Outstanding options at beginning of year

    55,867,592      $ 20,831,948        9,100      $ 36,917   

Options written

    320,561,103        104,658,808        1,367,150        489,320   

Options expired

    (148,711,987     (44,485,859     (1,375,330     (338,469

Options closed

    (102,569,967     (28,995,871              

Options exercised

    (87,881,940     (37,676,014     (920     (187,768
 

 

 

   

 

 

   

 

 

   

 

 

 

Outstanding options at end of year

    37,264,801      $ 14,333,012                 
 

 

 

   

 

 

   

 

 

   

 

 

 
       

 

 

 

BCF

       

Outstanding options at beginning of year

    9,200,335      $ 11,693,091                 

Options written

    54,901,887        54,270,982                 

Options expired

    (33,255,321     (31,443,350              

Options closed

    (10,977,169     (12,901,943              

Options exercised

    (11,374,133     (14,242,681              
 

 

 

   

 

 

   

 

 

   

 

 

 

Outstanding options at end of year

    8,495,599      $ 7,376,099                 
 

 

 

   

 

 

   

 

 

   

 

 

 
       

 

 
 

 

                 
130       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Notes to Financial Statements (continued)

 

 

    Calls     Puts  
 

 

 

   

 

 

 
    Contracts     Premiums
Received
    Contracts     Premiums
Received
 

 

 

BCX

       

Outstanding options at beginning of year

    6,597,564      $ 8,614,300        17,005      $ 757,212   

Options written

    41,355,263        51,941,476        12,432        1,166,198   

Options expired

    (19,415,833     (27,479,204     (21,085     (943,695

Options closed

    (8,692,697     (7,735,099     (717     (64,047

Options exercised

    (13,577,880     (18,527,128     (7,635     (915,668
 

 

 

   

 

 

   

 

 

   

 

 

 

Outstanding options at end of year

    6,266,417      $ 6,814,345                 
 

 

 

   

 

 

   

 

 

   

 

 

 
       

 

 

 

BQY

       

Outstanding options at beginning of year

    803,164      $ 882,345        97,599      $ 388,050   

Options written

    5,454,418        4,860,689                 

Options expired

    (2,548,893     (1,762,515     (67,074     (259,425

Options closed

    (710,806     (1,028,725              

Options exercised

    (2,330,969     (2,270,971     (30,525     (128,625
 

 

 

   

 

 

   

 

 

   

 

 

 

Outstanding options at end of year

    666,914      $ 680,823                 
 

 

 

   

 

 

   

 

 

   

 

 

 
       

 

 
    Calls     Puts  
 

 

 

   

 

 

 
    Contracts     Premiums
Received
    Contracts     Premiums
Received
 

 

 

BUI

       

Outstanding options at beginning of period

                           

Options written

    33,094,862      $ 14,454,531                 

Options expired

    (9,039,998     (3,992,989              

Options closed

    (9,563,999     (3,504,540              

Options exercised

    (7,469,665     (4,426,584              
 

 

 

   

 

 

   

 

 

   

 

 

 

Outstanding options at end of period

    7,021,200      $ 2,530,418                 
 

 

 

   

 

 

   

 

 

   

 

 

 
       

 

 

As of October 31, 2012, the value of portfolio securities subject to covered call options written was as follows:

 

 

 
     Value  

 

 

BQR

   $ 44,392,341   

BGR

   $ 242,886,185   

CII

   $ 329,623,400   

BDJ

   $ 786,658,446   

BOE

   $ 516,443,077   

BME

   $ 71,835,803   

BGY

   $ 491,577,142   

BCF

   $ 203,729,484   

BCX

   $ 225,053,769   

BQY

   $ 31,686,834   

BUI

   $ 114,348,368   

 

 
 

 

5. Income Tax Information:

US GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. The following permanent differences as of October 31, 2012 attributable to foreign currency transactions, the sale of stock of passive foreign investment companies, non-deductible expenses, income recognized from pass-through entities, distributions paid in excess of taxable income, limitations on the utilization of capital loss carryforwards and the accounting for real estate investment trusts were reclassified to the following accounts:

 

 

 
     BQR     BGR     CII     BDJ     BOE     BME  

 

 

Paid-in capital

                 $ (8,839,071   $ (101,343,731              

Undistributed (distributions in excess of) net investment income

   $ (165,707   $ 350,246      $ 8,839,071      $ 34,128,233      $ 459,689      $ (4,118

Accumulated net realized gain (loss)

   $ 165,707      $ (350,246          $ 67,215,498      $ (459,689   $ 4,118   

 

 

 

 

 
     BGY     BCF     BCX     BQY     BUI  

 

 

Paid-in capital

                               $ (59,351

Undistributed (distributions in excess of) net investment income

   $ 1,324,478      $ 108,248      $ 351,963      $ (67,833   $ 315,512   

Accumulated net realized gain (loss)

   $ (1,324,478   $ (108,248   $ (351,963   $ 67,833      $ (256,161

 

 

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    131


 

 

Notes to Financial Statements (continued)

 

 

The tax character of distributions paid during the fiscal years ended October 31, 2012 and October 31, 2011 was as follows:

 

      BQR      BGR      CII      BDJ      BOE      BME  

Ordinary income

                 

10/31/12

   $ 875,247       $ 43,768,559       $ 29,218,120       $ 60,552,719       $ 14,977,529       $ 9,937,822   

10/31/11

   $ 1,319,946       $ 48,221,272       $ 74,096,553       $ 36,586,504       $ 95,268,134       $ 16,827,606   

Long-term capital gains

                 

10/31/12

                                             9,187,883   

10/31/11

                     203,902                 5,437,511         163,795   

Tax return of capital

                 

10/31/12

     10,214,472         8,858,114         31,669,412         43,164,839         121,035,759           

10/31/11

     11,960,055                         22,727,186         56,895,764           
  

 

 

 

Total

                 

10/31/12

   $ 11,089,719       $ 52,626,673       $ 60,887,532       $ 103,717,558       $ 136,013,288       $ 19,125,705   
  

 

 

 

10/31/11

   $ 13,280,001       $ 48,221,272       $ 74,300,455       $ 59,313,690       $ 157,601,409       $ 16,991,401   
  

 

 

 

 

      BGY      BCF      BCX      BQY      BUI  

Ordinary income

              

10/31/12

   $ 19,807,805       $ 37,899,168       $ 12,305,235       $ 5,480,188       $ 15,179,030   

10/31/11

   $ 74,188,180       $ 40,567,591       $ 11,264,280       $ 3,275,226           

Long-term capital gains

              

10/31/12

             576,995                 2,181,758           

10/31/11

                             2,757,802           

Tax return of capital

              

10/31/12

     84,445,531         20,806,811         52,900,199                 3,207,293   

10/31/11

     75,397,237         21,521,515         21,259,041                   
  

 

 

 

Total

              

10/31/12

   $ 104,253,336       $ 59,282,974       $ 65,205,434       $ 7,661,946       $ 18,386,323   
  

 

 

 

10/31/11

   $ 149,585,417       $ 62,089,106       $ 32,523,321       $ 6,033,028           
  

 

 

 

As of October 31, 2012, the tax components of accumulated earnings (losses) were as follows:

 

      BQR     BGR      CII     BDJ     BOE     BME  

Undistributed ordinary income

                                       $ 1,450,345   

Undistributed long-term capital gains

                                         7,995,687   

Capital loss carryforwards

   $ (35,477,549           $ (75,321,012   $ (196,861,913   $ (194,249,191       

Net unrealized gains(losses)*

     (30,098,797   $ 100,711,908         (63,493,220     53,341,788        6,002,684        28,998,687   
  

 

 

 

Total

   $ (65,576,346   $ 100,711,908       $ (138,814,232   $ (143,520,125   $ (188,246,507   $ 38,444,719   

 

 

 

      BGY     BCF     BCX     BQY     BUI  

Undistributed ordinary income

                                   

Undistributed long-term capital gains

                        $ 359,935          

Capital loss carryforwards

   $ (589,641,423                            

Net unrealized gains(losses)*

     23,500,829      $ (34,218,876   $ (95,357,691     (2,125,609   $ 22,925,851   
  

 

 

 

Total

   $ (566,140,594   $ (34,218,876   $ (95,357,691   $ (1,765,674   $ 22,925,851   

 

 

* The difference between book-basis and tax-basis net unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sales and straddles, the realization for tax purposes of unrealized gains/losses on certain foreign currency contracts, the realization for tax purposes of

 

                 
132       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Notes to Financial Statements (continued)

 

 

unrealized gains on investments in passive foreign investment companies, the timing and recognition of partnership income, the deferral of compensation to trustees and the accounting for real estate investment trusts.

As of October 31, 2012, the Trusts had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:

 

Expires October 31,    BQR      CII      BDJ      BOE      BGY  

2016

                   $ 71,173,003       $ 135,331,776           

2017

   $ 21,140,114       $ 2,664,939         117,162,162         38,148,041       $ 467,149,104   

2018

     9,080,494         70,040,876         8,526,748                 55,605,462   

2019

     1,795,201         2,615,197                           

No expiration date1

     3,461,740                         20,769,374         66,886,857   
  

 

 

 

Total

   $ 35,477,549       $ 75,321,012       $ 196,861,913       $ 194,249,191       $ 589,641,423   

 

1

Must be utilized prior to losses subject to expiration.

During the year ended October 31, 2012, the Trusts listed below utilized the following amounts of their respective capital loss carryforward:

 

CII

  $ 8,839,071   

BDJ

  $ 33,844,633   

As of October 31, 2012, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:

 

      BQR     BGR     CII     BDJ     BOE     BME  

Tax cost

   $ 144,516,160      $ 681,156,809      $ 694,281,977      $ 1,450,891,681      $ 1,035,605,338      $ 196,052,039   
  

 

 

 
            

Gross unrealized appreciation

   $ 14,075,746      $ 167,855,857      $ 35,321,702      $ 56,345,338      $ 29,199,944      $ 30,576,800   

Gross unrealized depreciation

     (43,382,615     (56,718,673     (100,997,452     (5,489,596     (21,905,763     (1,450,113
  

 

 

 

Net unrealized appreciation (depreciation)

   $ (29,306,869   $ 111,137,184      $ (65,675,750   $ 50,855,742      $ 7,294,181      $ 29,126,687   

 

 

 

      BGY     BCF     BCX     BQY     BUI  

Tax cost

   $ 884,491,217      $ 666,047,835      $ 809,477,355      $ 84,014,215      $ 318,582,750   
  

 

 

 
          

Gross unrealized appreciation

   $ 47,968,142      $ 29,411,987      $ 53,044,730      $ 231,600      $ 28,132,661   

Gross unrealized depreciation

     (13,778,355     (55,732,059     (142,785,675     (2,530,919     (2,715,807
  

 

 

 

Net unrealized appreciation (depreciation)

   $ 34,189,787      $ (26,320,072   $ (89,740,945   $ (2,299,319   $ 25,416,854   

 

6. Concentration, Market and Credit Risk:

In the normal course of business, the Trusts invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations (issuer credit risk). The value of securities held by the Trusts may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Trusts; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to issuer credit risk, the Trusts may be exposed to counterparty credit risk, or the risk that an entity with which the Trusts have unsettled or open transactions may fail to or be unable to perform on its commitments. The Trusts manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Trusts to market, issuer and counterparty credit risks, consist principally of

financial instruments and receivables due from counterparties. The extent of the Trusts’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Trusts.

As of October 31, 2012, the Trusts listed below invested a significant portion of their assets in securities in the following sectors:

 

 

Utilities

   BQR

Energy

   BGR, BCF, BCX

Financials

   CII

Health Care

   BME

Materials

   BCF, BCX

 

Changes in economic conditions affecting these sectors would have a greater impact on these Trusts and could affect the value, income and/or liquidity of positions in such securities.

 

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    133


 

 

Notes to Financial Statements (concluded)

 

 

BOE, BGY, BQY and BUI invest a substantial amount of their assets in issuers located in a single country or a limited number of countries. When a Trust concentrates its investments in this manner, it assumes the risk that economic, political and social conditions in those countries may have a significant impact on their investment performance. Foreign issuers may not be subject to the same uniform accounting, auditing and financial reporting standards and practices as used in the US. Foreign securities markets may also be less liquid, more volatile, and less subject to governmental supervision not typically associated with investing in US securities. Please see the Schedules of Investments for concentrations in specific countries.

As of October 31, 2012, the Trusts listed below had the following industry classifications:

 

 

 
Industry    BOE     BGY     BQY     BUI  

 

 

Commercial Banks

     9     11     8       

Pharmaceuticals

     7        8        10          

Energy Equipment & Services

     6        4                 

Oil, Gas & Consumable Fuels.

     5        3        12        9

Food Products

     4        5        3          

Insurance

     4        7        4          

Metals & Mining

     4        7        1          

Multi-Utilities

     2        1        4        20   

Diversified Telecommunication Services

     1        1        8        13   

Electric Utilities

     1        3        5        26   

Tobacco

            2        5          

Water Utilities

                          11   

Transportation Infrastructure

                          8   

Other*

     57        48        40        13   

 

 
  * All other industries held were each less than 5%.

7. Capital Share Transactions:

There are an unlimited number of $0.001 par value common shares of beneficial interest authorized for each Trust, with the exception of CII. CII is authorized to issue 200 million shares of $0.10 par value shares, all of which were initially classified as Common Shares. The Board is authorized, however, to reclassify any unissued Common Shares to Preferred Shares without approval of Common Shareholders. At October 31, 2012, 6,964 shares of BUI were owned by an affiliate of the Manager.

Transactions in common shares of beneficial interest during the period ended October 31, 2012 and the period ended October 31, 2011 were as follows:

 

 

Trust  

Commencement

of Investment

Operations

   

Initial

Public

Offering

   

Underwriters’

Exercising the

Over-Allotment
Option

 

BCX

    March 30, 2011        43,756,964      2,591,500

BUI

    November 25, 2011        15,506,964      1,400,000

 

Upon commencement of operations, organization costs associated with the establishment of BCX and BUI were expensed by BCX and BUI, respectively. Offering costs incurred in connection with BCX’s and BUI’s offering of shares have been charged against the proceeds from the initial share offering in the amount of $1,544,562 and $676,000, respectively.

Shares issued and outstanding during the year ended October 31, 2012 and the period ended October 31, 2011 increased by the following amounts as a result of dividend reinvestments:

 

 

 
     Year Ended
October 31, 2012
     Period Ended
October 31, 2011
 

 

 

BQR

     43,408         217,185   

CII

             367,118   

BDJ

             451,773   

BOE

             426,634   

BME

     100,332         14,101   

BCF

             128,189   

BCX

             226,846   

 

 

Shares issued and outstanding remained constant for BGR, BGY and BQY for the year ended October 31, 2012 and the year ended October 31, 2011.

8. Subsequent Events:

Management’s evaluation of the impact of all subsequent events on the Trusts’ financial statements was completed through the date the financial statements were issued and the following items were noted:

Certain Trusts paid a net investment income dividend on November 30, 2012 to shareholders of record on November 15, 2012 as follows:

 

 

 
     Common
Dividend per
Share
 

 

 

BOE

     $0.31165   

BQY

     $0.25000   

BUI

     $0.36250   

 

 

Additionally, certain Trusts declared a net investment income dividend and special distribution in the following amounts per share on December 10, 2012 payable to shareholders of record on December 21, 2012 as follows:

 

 

 
     Common
Dividend per
Share
 

 

 

BQR

     $0.179250   

BGR

     $0.405000   

CII

     $0.300000   

BDJ

     $0.140000   

BME*

     $1.234375   

BGY

     $0.167850   

BCF

     $0.221500   

BCX

     $0.290000   

 

 

 

  * Includes special distribution of $0.850000.
 

 

                 
134       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Report of Independent Registered Public Accounting Firm

 

 

To the Board of Trustees and Shareholders of:

BlackRock EcoSolutions Investment Trust

BlackRock Energy and Resources Trust

BlackRock Enhanced Capital and Income Fund, Inc.

BlackRock Enhanced Equity Dividend Trust

BlackRock Global Opportunities Equity Trust

BlackRock Health Sciences Trust

BlackRock International Growth and Income Trust

BlackRock Real Asset Equity Trust

BlackRock Resources & Commodities Strategy Trust (“BCX”)

BlackRock S&P Quality Rankings Global Equity Managed Trust

BlackRock Utility and Infrastructure Trust (“BUI”)

(Collectively, the “Trusts”)

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of the Trusts as of October 31, 2012, and the related statements of operations and cash flows for the Trusts for the year then ended, the statements of operations and cash flows for BUI for the period November 22, 2011 (commencement of operations) through October 31, 2012, the statements of changes in net assets for the Trusts for each of the two years in the period then ended, the statement of changes in net assets for BUI for the period November 22, 2011 (commencement of operations) through October 31, 2012, and the financial highlights for the Trusts for each of the periods presented. We have also audited the accompanying consolidated statement of assets and liabilities of BCX, including the consolidated schedule of investments, as of October 31, 2012 and the related consolidated statements of operations and cash flows for the year then ended and the statement of changes in net assets for the year ended October 31, 2012 and the period from March 30, 2011 through October 31, 2011, and the consolidated financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Trusts’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assur-

ance about whether the financial statements and financial highlights are free of material misstatement. The Trusts are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trusts’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2012, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Trusts as of October 31, 2012, the results of their operations and cash flows for the year or period then ended, the changes in their net assets and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. Additionally, in our opinion, the consolidated financial statements and financial highlights referred to above present fairly, in all material respects, the consolidated financial position of BCX as of October 31, 2012, the consolidated results of their operations and cash flows for the year then ended, the changes in its net assets for the year ended October 31, 2012 and from the period from March 30, 2011 through October 31, 2011, and consolidated financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP

Philadelphia, Pennsylvania

December 21, 2012

 

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    135


 

 

Important Tax Information (Unaudited)

 

 

The following information is provided with respect to the distributions paid during the taxable period ended October 31, 2012.

 

 

 
     Payable Date    Long-Term
Capital Gains
    Non-Taxable
Return of
Capital
    Qualifying
Dividend
Income for
Individuals1
    Dividends
Qualifying for
the Dividends
Received
Deduction for
Corporations1
    Short-Term
Capital Gain
Dividends for
Non-U.S.
Residents2
    Foreign
Source
Income
    Foreign
Taxes
Paid3
 

 

 

BQR

   12/30/11                    10.68     4.18                     
   3/30/12-9/28/12             100.00                                   

BGR

   12/30/11                    16.73     6.58     94.29              
   3/30/12-9/28/12             24.49     17.87     9.25     75.51              

CII

   12/30/11                    23.57     23.91                     
   3/30/12-9/28/12             52.01     29.63     29.63     9.42              

BDJ

   12/30/11                    25.39     24.64                     
   3/30/12-9/28/12             47.16     33.56     29.85                     

BOE

   11/30/11                    9.15     4.00                     
   2/29/12-8/31/12             100.00                                   

BME

   12/30/11      89.66            2.23     1.69     10.30              
   3/30/12-9/28/12                    25.24     20.96     93.00              

BGY

   12/30/11                    9.22     1.03            8.19     0.63
   3/30/12-9/28/12             100.00     2.80     2.80                   2.80

BCF

   12/30/11                    12.56     6.24                     
   3/30/12-9/28/12      1.32     47.57     23.50     9.65     51.11              

BCX

   12/30/11               10.50     3.56                     
   3/30/12-9/28/12             81.12                   0.56              

BQY

   11/30/11-12/31/11                    41.86     22.65     23.14              
   2/29/11-8/31/12      28.48            51.46     36.26     18.48              

BUI

   2/29/11-8/31/12             17.44     49.01     31.85                     

 

 

 

  1 

The Trusts hereby designate the percentages indicated above to the maximum amount allowable by law.

  2 

Represents the portion of the dividends eligible for exemption from U.S. withholding tax for nonresident aliens and foreign corporations.

  3 

The foreign taxes paid represent taxes incurred by the fund on dividends received from foreign sources. Foreign taxes paid may be included in taxable income with an offsetting deduction from gross income or may be taken as a credit for taxes paid to foreign governments. You should consult your tax advisor regarding the appropriate treatment of foreign taxes paid.

 

                 
136       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement

 

 

The Board of Trustees (each, a “Board,” collectively, the “Boards,” and the members of which are referred to as “Board Members”) of BlackRock EcoSolutions Investment Trust (“BQR”), BlackRock Energy and Resources Trust (“BGR”), BlackRock Enhanced Capital & Income Fund, Inc. (“CII”), BlackRock Enhanced Equity Dividend Trust (“BDJ”), BlackRock Global Opportunities Equity Trust (“BOE”), BlackRock Health Sciences Trust (“BME”), BlackRock International Growth and Income Trust (“BGY”), BlackRock Real Asset Equity Trust (“BCF”), BlackRock Resources & Commodities Strategy Trust (“BCX”) and BlackRock S&P Quality Rankings Global Equity Managed Trust (“BQY” and together with BQR, BGR, CII, BDJ, BOE, BME, BGY, BCF and BCX, each a “Fund” and, collectively, the “Funds”) met on April 26, 2012 and May 22-23, 2012 to consider the approval of each Fund’s investment advisory agreement (each, an “Advisory Agreement”) with BlackRock Advisors, LLC (the “Manager”), each Fund’s investment advisor. The Board of each Fund also considered the approval of the sub-advisory agreement (each, a “Sub-Advisory Agreement”) among the Manager, one of the following sub-advisors, as the case may be: BlackRock Financial Management, Inc.; State Street Research & Management Company; BlackRock Investment Management, LLC; BlackRock International Limited; and BlackRock Capital Management, Inc., (each, a “Sub-Advisor”), and its Fund. The Manager and the Sub-Advisors are referred to herein as “BlackRock.” The Advisory Agreements and the Sub-Advisory Agreements are referred to herein as the “Agreements.”

Activities and Composition of the Board

Each Board consists of eleven individuals, nine of whom are not “interested persons” of such Fund as defined in the Investment Company Act of 1940 (the “1940 Act”) (the “Independent Board Members”). The Board Members are responsible for the oversight of the operations of the Funds and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Board Members have retained independent legal counsel to assist them in connection with their duties. The Chairman of the Board is an Independent Board Member. Each Board has established six standing committees: an Audit Committee, a Governance and Nominating Committee, a Compliance Committee, a Performance Oversight Committee, an Executive Committee, and a Leverage Committee, each of which is chaired by an Independent Board Member and composed of Independent Board Members (except for the Executive Committee and the Leverage Committee, each of which also has one interested Board Member).

The Agreements

Pursuant to the 1940 Act, the Boards are required to consider the continuation of the Agreements on an annual basis. The Boards have four quarterly meetings per year, each extending over two days, and a fifth meeting to consider specific information surrounding the consideration of renewing the Agreements. In connection with this process, the Boards assessed, among other things, the nature, scope and quality of the services provided to the Funds by BlackRock, its

personnel and its affiliates, including investment management, administrative and shareholder services, oversight of fund accounting and custody, marketing services, risk oversight, compliance and assistance in meeting applicable legal and regulatory requirements.

The Boards, acting directly and through their respective committees, considered at each of their meetings, and from time to time as appropriate, factors that are relevant to their annual consideration of the renewal of the Agreements, including the services and support provided by BlackRock to the Funds and their shareholders. Among the matters the Boards considered were: (a) investment performance for one-, three-and five-year periods, as applicable, against peer funds, and applicable benchmarks, if any, as well as senior management’s and portfolio managers’ analysis of the reasons for any over performance or underperformance against their peers and/or benchmark, as applicable; (b) fees, including advisory, administration, if applicable, and other amounts paid to BlackRock and its affiliates by the Funds for services such as call center and fund accounting; (c) Fund operating expenses and how BlackRock allocates expenses to the Funds; (d) the resources devoted to, risk oversight of, and compliance reports relating to, implementation of the Funds’ investment objectives, policies and restrictions; (e) the Funds’ compliance with their Code of Ethics and other compliance policies and procedures; (f) the nature, cost and character of non-investment management services provided by BlackRock and its affiliates; (g) BlackRock’s and other service providers’ internal controls and risk and compliance oversight mechanisms; (h) BlackRock’s implementation of the proxy voting policies approved by the Board; (i) the use of brokerage commissions and execution quality of portfolio transactions; (j) BlackRock’s implementation of the Funds’ valuation and liquidity procedures; (k) an analysis of management fees ratios for products with similar investment objectives across the open-end fund, closed-end fund and institutional account product channels, as applicable; (l) BlackRock’s compensation methodology for its investment professionals and the incentives it creates; and (m) periodic updates on BlackRock’s business.

The Boards have engaged in an ongoing strategic review with BlackRock of opportunities to consolidate funds and of BlackRock’s commitment to investment performance. In addition, the Boards requested, to the extent reasonably possible, an analysis of the risk and return relative to selected funds in peer groups. BlackRock provides information to the Boards in response to specific questions. These questions covered issues such as profitability, including the impact of BlackRock’s upfront costs in sponsoring closed-end funds and the relative profitability of closed-end and open end funds, investment performance and management fee levels. The Boards considered the importance of: (i) managing fixed income assets with a view toward preservation of capital; (ii) portfolio managers’ investments in the funds they manage; (iii) BlackRock’s controls surrounding the coding of quantitative investment models; and (iv) BlackRock’s oversight of relationships with third party service providers.

 

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    137


 

 

Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement (continued)

 

 

Board Considerations in Approving the Agreements

The Approval Process: Prior to the April 26, 2012 meeting, the Boards requested and received materials specifically relating to the Agreements. The Boards are engaged in a process with its independent legal counsel and BlackRock to review periodically the nature and scope of the information provided to better assist their deliberations. The materials provided in connection with the April meeting included (a) information independently compiled and prepared by Lipper, Inc. (“Lipper”) on Fund fees and expenses and the investment performance of each Fund as compared with a peer group of funds as determined by Lipper (collectively, “Peers”), as well as the performance of each Fund as compared to its performance metrics; (b) information on the profitability of the Agreements to BlackRock and a discussion of fall-out benefits to BlackRock and its affiliates; (c) a general analysis provided by BlackRock concerning investment management fees (a combination of the advisory fee and the administration fee, if any) charged to other clients, such as institutional clients and open-end funds, under similar investment mandates, as applicable; (d) the existence, impact and sharing of potential economies of scale; (e) a summary of aggregate amounts paid by each Fund to BlackRock and (f) if applicable, a comparison of management fees to similar BlackRock closed-end funds, as classified by Lipper.

At an in-person meeting held on April 26, 2012, the Boards reviewed materials relating to their consideration of the Agreements. As a result of the discussions that occurred during the April 26, 2012 meeting, and as a culmination of the Boards’ year-long deliberative process, the Boards presented BlackRock with questions and requests for additional information. BlackRock responded to these requests with additional written information in advance of the May 22-23, 2012 Board meeting.

At an in-person meeting held on May 22-23, 2012, each Board, including all the Independent Board Members, unanimously approved the continuation of the Advisory Agreement between the Manager and its Fund, and the Sub-Advisory Agreement among the Manager, the Sub-Advisor, and its Fund, each for a one-year term ending June 30, 2013. In approving the continuation of the Agreements, the Boards considered: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of the Funds and BlackRock; (c) the advisory fee and the cost of the services and profits to be realized by BlackRock and its affiliates from their relationship with the Funds; (d) economies of scale; (e) fall-out benefits to BlackRock as a result of its relationship with the Funds; and (f) other factors deemed relevant by the Board Members.

The Boards also considered other matters they deemed important to the approval process, such as payments made to BlackRock or its affiliates relating to securities lending, services related to the valuation and pricing of Fund portfolio holdings, direct and indirect benefits to BlackRock and its affiliates from their relationship with the Funds and advice from independent legal counsel with respect to the review process and materials submitted for the Boards’ review. The Boards noted the willingness of BlackRock personnel to engage in open, candid

discussions with the Boards. The Boards did not identify any particular information as controlling, and each Board Member may have attributed different weights to the various items considered.

A. Nature, Extent and Quality of the Services Provided by BlackRock

The Boards, including the Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of the Funds. Throughout the year, the Boards compared Fund performance to the performance of a comparable group of closed-end funds and/or the performance of a relevant benchmark, if any. The Boards met with BlackRock’s senior management personnel responsible for investment operations, including the senior investment officers. Each Board also reviewed the materials provided by its Fund’s portfolio management team discussing Fund performance and the Fund’s investment objective, strategies and outlook.

The Boards considered, among other factors, the number, education and experience of BlackRock’s investment personnel generally and their Funds’ portfolio management teams, investments by portfolio managers in the funds they manage, BlackRock’s portfolio trading capabilities, BlackRock’s use of technology, BlackRock’s commitment to compliance, BlackRock’s credit analysis capabilities, BlackRock’s risk analysis and oversight capabilities and BlackRock’s approach to training and retaining portfolio managers and other research, advisory and management personnel. The Boards engaged in a review of BlackRock’s compensation structure with respect to their Funds’ portfolio management teams and BlackRock’s ability to attract and retain high-quality talent and create performance incentives.

In addition to advisory services, the Boards considered the quality of the administrative and non-investment advisory services provided to the Funds. BlackRock and its affiliates provide the Funds with certain services (in addition to any such services provided to the Funds by third parties) and officers and other personnel as are necessary for the operations of the Funds. In particular, BlackRock and its affiliates provide the Funds with the following administrative services including, among others: (i) preparing disclosure documents, such as the prospectus and the statement of additional information in connection with the initial public offering and periodic shareholder reports; (ii) preparing communications with analysts to support secondary market trading of the Funds; (iii) assisting with daily accounting and pricing; (iv) preparing periodic filings with regulators and stock exchanges; (v) overseeing and coordinating the activities of other service providers; (vi) organizing Board meetings and preparing the materials for such Board meetings; (vii) providing legal and compliance support; and (viii) performing other administrative functions necessary for the operation of the Funds, such as tax reporting, fulfilling regulatory filing requirements and call center services. The Boards reviewed the structure and duties of BlackRock’s fund administration, accounting, legal and compliance departments and considered BlackRock’s policies and procedures for assuring compliance with applicable laws and regulations.

 

 

                 
138       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement (continued)

 

 

B. The Investment Performance of the Funds and BlackRock

The Boards, including the Independent Board Members, also reviewed and considered the performance history of their Funds. In preparation for the April 26, 2012 meeting, the Boards worked with its independent legal counsel, BlackRock and Lipper to develop a template for, and was provided with reports independently prepared by Lipper, which included a comprehensive analysis of each Fund’s performance. The Boards also reviewed a narrative and statistical analysis of the Lipper data that was prepared by BlackRock, which analyzed various factors that affect Lipper’s rankings. In connection with their review, each Board received and reviewed information regarding the investment performance, based on net asset value (NAV), of its Fund as compared to funds in that Fund’s applicable Lipper category and the performance of its Fund as compared to its performance metrics. The Boards were provided with a description of the methodology used by Lipper to select peer funds and periodically meets with Lipper representatives to review their methodology. Each Board and its Performance Oversight Committee regularly review, and meet with Fund management to discuss, the performance of its Fund throughout the year.

The Board of each Fund noted that its respective Fund performed above its performance metrics, dividend coverage and equity participation. Based on its discussions with BlackRock and each Board’s review of its respective Fund’s investment performance compared to Lipper Peer Group, the methodology used by Lipper to select peer funds, and other relevant information provided by BlackRock, each Board noted that its respective Fund’s investment performance as compared to the dividend coverage and equity participation performance metrics provided a more meaningful comparison of the Fund’s relative performance. Dividend coverage is used to evaluate if the Funds are on track or ahead of a target distribution level, and equity participation is used to evaluate the upside potential from securities stock price appreciation considering the option strategy utilized by the Funds.

C. Consideration of the Advisory/Management Fees and the Cost of the Services and Profits to be Realized by BlackRock and its Affiliates from their Relationship with the Funds

Each Board, including the Independent Board Members, reviewed its Fund’s contractual management fee rate compared with the other funds in its Lipper category. It also compared the Fund’s total expense ratio, as well as actual management fee rate, to those of other funds in its Lipper category. The Boards considered the services provided and the fees charged by BlackRock to other types of clients with similar investment mandates, including separately managed institutional accounts.

The Boards received and reviewed statements relating to BlackRock’s financial condition and profitability with respect to the services it provided the Funds. The Boards were also provided with a profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to the Funds. The Boards reviewed BlackRock’s profitability with respect to the Funds and other funds the Boards currently oversee for the year ended December 31, 2011

compared to available aggregate profitability data provided for the years ended December 31, 2010, and December 31, 2009. The Boards reviewed BlackRock’s profitability with respect to other fund complexes managed by the Manager and/or its affiliates. The Boards reviewed BlackRock’s assumptions and methodology of allocating expenses in the profitability analysis, noting the inherent limitations in allocating costs among various advisory products. The Boards recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, expense allocations and business mix, and the difficulty of comparing profitability as a result of those factors.

The Boards noted that, in general, individual fund or product line profitability of other advisors is not publicly available. The Boards considered BlackRock’s overall operating margin, in general, compared to the operating margin for leading investment management firms whose operations include advising closed-end funds, among other product types. In addition, the Boards considered, among other things, certain third party data comparing BlackRock’s operating margin with that of other publicly-traded asset management firms. The Boards considered the differences between BlackRock and these other firms, including the contribution of technology at BlackRock, BlackRock’s expense management, and the relative product mix.

In addition, the Boards considered the cost of the services provided to the Funds by BlackRock, and BlackRock’s and its affiliates’ profits relating to the management of the Funds and the other funds advised by BlackRock and its affiliates. As part of its analysis, the Boards reviewed BlackRock’s methodology in allocating its costs to the management of the Funds. The Boards also considered whether BlackRock has the financial resources necessary to attract and retain high quality investment management personnel to perform its obligations under the Agreements and to continue to provide the high quality of services that is expected by the Boards.

The Board of each Fund noted that its respective Fund’s contractual management fee ratio (a combination of the advisory fee and the administration fee, if any) was lower than or equal to the median contractual management fee ratio paid by the Fund’s Peers, in each case before taking into account any expense reimbursements or fee waivers.

D. Economies of Scale

Each Board, including the Independent Board Members, considered the extent to which economies of scale might be realized as the assets of its Fund increase. Each Board also considered the extent to which its Fund benefits from such economies and whether there should be changes in the advisory fee rate or structure in order to enable the Fund to participate in these economies of scale, for example through the use of breakpoints in the advisory fee based upon the asset level of the Fund.

Based on the Boards’ review and consideration of the issue, the Boards concluded that most closed-end funds do not have fund level

 

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    139


 

 

Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement (concluded)

 

 

breakpoints because closed-end funds generally do not experience substantial growth after the initial public offering. They are typically priced at scale at a fund’s inception. The Boards noted that only one closed-end fund in the Fund Complex has breakpoints in its advisory fee structure.

E. Other Factors Deemed Relevant by the Board Members

The Boards, including the Independent Board Members, also took into account other ancillary or “fall-out” benefits that BlackRock or its affiliates may derive from their respective relationships with the Funds, both tangible and intangible, such as BlackRock’s ability to leverage its investment professionals who manage other portfolios and risk management personnel, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates as service providers to the Funds, including securities lending and cash management services. The Boards also considered BlackRock’s overall operations and its efforts to expand the scale of, and improve the quality of, its operations. The Boards also noted that BlackRock may use and benefit from third party research obtained by soft dollars generated by certain registered fund transactions to assist in managing all or a number of its other client accounts. The Boards further noted that they had considered the investment by BlackRock’s funds in exchange traded funds (i.e., ETFs) without any offset against the management fees payable by the funds to BlackRock.

In connection with its consideration of the Agreements, the Boards also received information regarding BlackRock’s brokerage and soft dollar practices. The Boards received reports from BlackRock which included information on brokerage commissions and trade execution practices throughout the year.

The Boards noted the competitive nature of the closed-end fund marketplace, and that shareholders are able to sell their Fund shares in the secondary market if they believe that the Fund’s fees and expenses are too high or if they are dissatisfied with the performance of the Fund.

Conclusion

Each Board, including all the Independent Board Members, unanimously approved the continuation of the Advisory Agreement between the Manager and its Fund for a one-year term ending June 30, 2013, and the Sub-Advisory Agreement among the Manager, the Sub-Advisor, and its Fund for a one-year term ending June 30, 2013. Based upon its evaluation of all of the aforementioned factors in their totality, the Boards, including the Independent Board Members, were satisfied that the terms of the Agreements were fair and reasonable and in the best interest of the Funds and their shareholders. In arriving at their decision to approve the Agreements, the Boards did not identify any single factor or group of factors as all-important or controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were also assisted by the advice of independent legal counsel in making these determinations. The contractual fee arrangements for the Funds reflect the results of several years of review by the Board Members and predecessor Board Members, and discussions between such Board Members (and predecessor Board Members) and BlackRock. As a result, the Board Members’ conclusions may be based in part on their consideration of these arrangements in prior years.

 

 

  

Automatic Dividend Reinvestment Plans

 

Pursuant to each Trust’s Dividend Reinvestment Plan (the “Reinvestment Plan”), Common Shareholders are automatically enrolled, to have all distributions of dividends and capital gains reinvested by Computershare Shareowner Services LLC (the “Reinvestment Plan Agent”) in the respective Trust’s shares pursuant to the Reinvestment Plan. Shareholders who do not participate in the Reinvestment Plan will receive all distributions in cash paid by check and mailed directly to the shareholders of record (or if the shares are held in street or other nominee name, then to the nominee) by the Reinvestment Plan Agent, which serves as agent for the shareholders in administering the Reinvestment Plan.

After the Trusts declare a dividend or determines to make a capital gain distribution, the Reinvestment Plan Agent will acquire shares for the participants’ account, depending upon the following circumstances, either (i) through receipt of unissued but authorized shares from the Trust (“newly issued shares”) or (ii) by purchase of outstanding shares on the open market, on a Trust’s primary exchange (“open market purchases”). If, on the dividend payment date, the net asset value per share (“NAV”)

is equal to or less than the market price per share plus estimated brokerage commissions (such condition being referred to herein as “market premium”), the Reinvestment Plan Agent will invest the dividend amount in newly issued shares acquired on behalf of the participants. The number of newly issued shares to be credited to each participant’s account will be determined by dividing the dollar amount of the dividend by the NAV on the date the shares are issued. However, if the NAV is less than 95% of the market price on the dividend payment date, the dollar amount of the dividend will be divided by 95% of the market price on the dividend payment date. If, on the dividend payment date, the NAV is greater than the market price per share plus estimated brokerage commissions (such condition being referred to herein as “market discount”), the Reinvestment Plan Agent will invest the dividend amount in shares acquired on behalf of the participants in open-market purchases. If the Reinvestment Plan Agent is unable to invest the full dividend amount in open market purchases, or if the market discount shifts to a market premium during the purchase period, the Reinvestment Plan Agent will invest any un-invested portion in newly issued shares. Investments in newly issued shares made in this manner would be made pursuant to

 

 

                 
140       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Automatic Dividend Reinvestment Plans (concluded)

 

 

the same process described above and the date of issue for such newly issued shares will substitute for the dividend payment date.

Participation in the Reinvestment Plan is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and processed by the Reinvestment Plan Agent prior to the dividend record date. Additionally, the Reinvestment Plan Agent seeks to process notices received after the record date but prior to the payable date and such notices often will become effective by the payable date. Where late notices are not processed by the applicable payable date, such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution.

The Reinvestment Plan Agent’s fees for the handling of the reinvestment of dividends and distributions will be paid by each Trust. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Reinvestment Plan Agent’s open market purchases in

connection with the reinvestment of dividends and distributions. The automatic reinvestment of dividends and distributions will not relieve participants of any federal income tax that may be payable on such dividends or distributions.

Each Trust reserves the right to amend or terminate the Reinvestment Plan. There is no direct service charge to participants in the Reinvestment Plan; however, each Trust reserves the right to amend the Reinvestment Plan to include a service charge payable by the participants. Participants that request a sale of shares through Computershare Shareowner Services LLC are subject to a $0.02 per share sold brokerage commission. All correspondence concerning the Reinvestment Plan should be directed to the Reinvestment Plan Agent: Computershare Shareowner Services LLC, P.O. Box 358035, Pittsburgh, PA 15252-8035; Telephone

(866)-216-0242.

 

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    141


 

 

Officers and Trustees

 

 

Name, Address,

and Year of Birth

   Position(s)
Held with
Trust
  

Length

of Time
Served as
a Trustee2

   Principal Occupation(s) During
Past Five Years
  

Number of BlackRock-
Advised Registered

Investment Companies

(“RICs”) Consisting of

Investment Portfolios

(“Portfolios”) Overseen

   Public Directorships

Independent Trustees1

Richard E. Cavanagh

55 East 52nd Street

New York,

NY 10055 1946

   Chairman of
the Board
and Trustee
   Since
2003
   Trustee, Aircraft Finance Trust from 1999 to 2009; Director, The Guardian Life Insurance Company of America since 1998; Director, Arch Chemical (chemical and allied productes) from 1999 to 2011; Trustee, Educational Testing Service from 1997 to 2009 and Chairman thereof from 2005 to 2009; Senior Advisor, The Fremont Group since 2008 and Director thereof since 1996; Adjunct Lecturer, Harvard University since 2007; President and Chief Executive Officer, The Conference Board, Inc. (global business research organization) from 1995 to 2007.    96 RICs consisting of 92 Portfolios    None

Karen P. Robards

55 East 52nd Street

New York,

NY 10055 1950

   Vice
Chairperson
of the
Board,
Chairperson
of the Audit
Committee
and Trustee
   Since
2007
   Partner of Robards & Company, LLC (financial advisory firm) since 1987; Co-founder and Director of the Cooke Center for Learning and Development (a not-for-profit organization) since 1987; Director of Care Investment Trust, Inc. (health care real estate investment trust) from 2007 to 2010; Investment Banker at Morgan Stanley from 1976 to 1987.    96 RICs consisting of 92 Portfolios    AtriCure, Inc. (medical devices)

Michael J. Castellano

55 East 52nd Street

New York,

NY 10055 1946

   Trustee and
Member of
the Audit
Committee
   Since
2011
   Managing Director and Chief Financial Officer of Lazard Group LLC from 2001 to 2011; Chief Financial Officer of Lazard Ltd. from 2004 to 2011; Director, Support Our Aging Religious (non-profit) since 2009; Director, National Advisory Board of Church Management at Villanova University since 2010.    96 RICs consisting of 92 Portfolios    None

Frank J. Fabozzi

55 East 52nd Street

New York,

NY 10055 1948

   Trustee and
Member of
the Audit
Committee
   Since
2003
   Editor of and Consultant for The Journal of Portfolio Management since 1986; Professor of Finance, EDHEC Business School since 2011; Professor in the Practice of Finance and Becton Fellow, Yale University, School of Management from 2006 to 2011; Adjunct Professor of Finance and Becton Fellow, Yale University from 1994 to 2006.    96 RICs consisting of 92 Portfolios    None

Kathleen F. Feldstein

55 East 52nd Street

New York,

NY 10055 1941

   Trustee    Since
2005
   President of Economics Studies, Inc. (private economic consulting firm) since 1987; Chair, Board of Trustees, McLean Hospital from 2000 to 2008 and Trustee Emeritus thereof since 2008; Member of the Board of Partners Community Healthcare, Inc. from 2005 to 2009; Member of the Corporation of Partners HealthCare since 1995; Trustee, Museum of Fine Arts, Boston since 1992; Member of the Visiting Committee to the Harvard University Art Museum since 2003; Director, Catholic Charities of Boston since 2009.    96 RICs consisting of 92 Portfolios    The McClatchy Company (publishing); BellSouth (telecommunications); Knight Ridder (publishing)

James T. Flynn

55 East 52nd Street

New York,

NY 10055 1939

   Trustee and
Member of
the Audit
Committee
   Since
2007
   Chief Financial Officer of JPMorgan & Co., Inc. from 1990 to 1995.    96 RICs consisting of 92 Portfolios    None

Jerrold B. Harris

55 East 52nd Street

New York,

NY 10055 1942

   Trustee    Since
2007
   Trustee, Ursinus College since 2000; Director, Troemner LLC (scientific equipment) since 2000; Director of Delta Waterfowl Foundation since 2001; President and Chief Executive Officer, VWR Scientific Products Corporation from 1990 to 1999.    96 RICs consisting of 92 Portfolios    BlackRock Kelso Capital Corp. (business development company)

R. Glenn Hubbard

55 East 52nd Street

New York,

NY 10055 1958

   Trustee    Since
2004
   Dean, Columbia Business School since 2004; Columbia faculty member since 1988; Co-Director, Columbia Business School’s Entrepreneurship Program from 1997 to 2004; Chairman, U.S. Council of Economic Advisers under the President of the United States from 2001 to 2003; Chairman, Economic Policy Committee of the OECD from 2001 to 2003.    96 RICs consisting of 92 Portfolios    ADP (data and information services), KKR Financial Corporation (finance), Metropolitan Life Insurance Company (insurance)

 

                 
142       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Officers and Trustees (continued)

 

 

Name, Address,

and Year of Birth

  

Position(s)

Held with

Trust

  

Length

of Time

Served as

a Trustee2

   Principal Occupation(s) During Past Five Years    Number of BlackRock-
Advised Registered
Investment Companies
(“RICs”) Consisting of
Investment Portfolios
(“Portfolios”) Overseen
   Public Directorships
              

Independent Trustees1 (concluded)

W. Carl Kester
55 East 52nd Street New York, NY 10055
1951

   Trustee and Member of the Audit Committee    Since
2007
   George Fisher Baker Jr. Professor of Business Administration, Harvard Business School; Deputy Dean for Academic Affairs, from 2006 to 2010; Chairman of the Finance Department, Harvard Business School from 2005 to 2006; Senior Associate Dean and Chairman of the MBA Program of Harvard Business School, from 1999 to 2005; Member of the faculty of Harvard Business School since 1981.    96 RICs consisting of
92 Portfolios
   None

 

1

   Trustees serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. The maximum age limitation may be waived as to any Trustee by action of a majority of the Trustees upon finding good cause thereof. In 2011 and 2012, the Board of Trustees unanimously approved extending the mandatory retirement age for James T. Flynn by additional one-year periods, which the Board believes would be in the best interest of shareholders.
2    Date shown is the earliest date a person has served for the Trusts covered by this annual report. Following the combination of Merrill Lynch Investment Managers, L.P. (“MLIM”) and BlackRock, Inc. (“BlackRock”) in September 2006, the various legacy MLIM and legacy BlackRock Fund boards were realigned and consolidated into three new fund boards in 2007. As a result, although the chart shows certain Trustees as joining the Fund’s board in 2007, each Trustee first became a member of the board of other legacy MLIM or legacy BlackRock Funds as follows: Richard E. Cavanagh, 1994; Frank J. Fabozzi, 1988; Kathleen F. Feldstein, 2005; James T. Flynn, 1996; Jerrold B. Harris, 1999; R. Glenn Hubbard, 2004; W. Carl Kester, 1995 and Karen P. Robards, 1998.

 

   

Interested Trustees3

                          
 

Paul L. Audet

55 East 52nd Street New York, NY 10055
1953

   Trustee    Since 2011      Senior Managing Director of BlackRock and Head of U.S. Mutual Funds since 2011; Chair of the U.S. Mutual Funds Committee reporting to the Global Executive Committee since 2011; Head of BlackRock’s Real Estate business from 2008 to 2011; Member of BlackRock’s Global Operating and Corporate Risk Management Committees and of the BlackRock Alternative Investors Executive Committee and Investment Committee for the Private Equity Fund of Funds business since 2008; Head of BlackRock’s Global Cash Management business from 2005 to 2010; Acting Chief Financial Officer of BlackRock from 2007 to 2008; Chief Financial Officer of BlackRock from 1998 to 2005.    158 RICs consisting of 277 Portfolios    None
   

Henry Gabbay

55 East 52nd Street New York, NY 10055

1947

   Trustee    Since 2007      Consultant, BlackRock from 2007 to 2008; Managing Director, BlackRock from 1989 to 2007; Chief Adminis- trative Officer, BlackRock Advisors, LLC from 1998 to 2007; President of BlackRock Funds and BlackRock Bond Allocation Target Shares from 2005 to 2007; Treasurer of certain closed-end funds in the BlackRock fund complex from 1989 to 2006.    158 RICs consisting of 277 Portfolios    None

 

3

 

 

Mr. Audet is an “interested person,” as defined in the 1940 Act, of the Trust based on his position with BlackRock and its affiliates. Mr. Gabbay is an “interested person” of the Trust based on his former positions with BlackRock and its affiliates as well as his ownership of BlackRock and The PNC Financial Services Group, Inc. securities. Mr. Audet and Mr. Gabbay are also Directors of the BlackRock registered open-end funds. Trustees serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. The maximum age limitation may be waived as to any Trustee by action of a majority of the Trustees upon finding good cause thereof.

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    143


 

 

Officers and Trustees (continued)

 

 

Name, Address,

and Year of Birth

  

Position(s)

Held with

Trust

  

Length

of Time

Served as

a Trustee

   Principal Occupation(s) During Past Five Years     

Trust Officers1

    

John Perlowski

55 East 52nd Street

New York, NY 10055

1964

  

President and

Chief Executive Officer

   Since 2011    Managing Director of BlackRock since 2009; Global Head of BlackRock Fund Administration since 2009; Managing Director and Chief Operating Officer of the Global Product Group at Goldman Sachs Asset Management, L.P. from 2003 to 2009; Treasurer of Goldman Sachs Mutual Funds from 2003 to 2009 and Senior Vice President thereof from 2007 to 2009; Director of Goldman Sachs Offshore Funds from 2002 to 2009; Director of Family Resource Network (charitable foundation) since 2009.   

 

Anne Ackerly

55 East 52nd Street

New York, NY 10055

1962

   Vice President   

Since

2007 2

   Managing Director of BlackRock since 2000; Chief Marketing Officer of BlackRock since 2012; President and Chief Executive Officer of the BlackRock-advised funds from 2009 to 2011; Vice President of the BlackRock-advised funds from 2007 to 2009; Chief Operating Officer of BlackRock’s Global Client Group since 2009; Chief Operating Officer of BlackRock’s U.S. Retail Group from 2006 to 2009; Head of BlackRock’s Mutual Fund Group from 2000 to 2006.   

 

Brendan Kyne

55 East 52nd Street

New York, NY 10055

1977

   Vice President   

Since

2009

   Managing Director of BlackRock since 2010; Director of BlackRock from 2008 to 2009; Head of Product Development and Management for BlackRock’s U.S. Retail Group since 2009 and Co-head thereof from 2007 to 2009; Vice President of BlackRock from 2005 to 2008.   

 

Robert W. Crothers

55 East 52nd Street

New York, NY 10055

1981

   Vice President   

Since

2012

   Director of BlackRock since 2011; Vice President of BlackRock from 2008 to 2010; Associate of BlackRock from 2006 to 2007.   

 

Neal Andrews

55 East 52nd Street

New York, NY 10055

1966

   Chief Financial Officer   

Since

2007

   Managing Director of BlackRock since 2006; Senior Vice President and Line of Business Head of Fund Accounting and Administration at PNC Global Investment Servicing (U.S.) Inc. from 1992 to 2006.   

 

Jay Fife

55 East 52nd Street

New York, NY 10055

1970

   Treasurer   

Since

2007

   Managing Director of BlackRock since 2007; Director of BlackRock in 2006; Assistant Treasurer of the MLIM and Fund Asset Management, L.P. advised funds from 2005 to 2006; Director of MLIM Fund Services Group from 2001 to 2006.   

 

Brian Kindelan

55 East 52nd Street

New York, NY 10055

1959

  

Chief Compliance Officer and

Anti-Money Laundering

Officer

  

Since

2007

   Chief Compliance Officer of the BlackRock-advised funds since 2007; Managing Director and Senior Counsel of BlackRock since 2005.   

 

Janey Ahn

55 East 52nd Street

New York, NY 10055

1975

   Secretary   

Since

2012

   Director of BlackRock since 2009; Vice President of BlackRock from 2008 to 2009; Assistant Secretary of the Funds from 2008 to 2012; Associate at Willkie Farr & Gallagher LLP from 2006 to 2008.   
  

 

   1 Officers of the Trusts serve at the pleasure of the Board.   
   2 Ms. Ackerly was President and Chief Executive Officer from 2009 to 2011.   

 

 

 

Effective May 22, 2012, Robert W. Crothers became Vice President of the Trusts.

 

 

Effective May 22, 2012, Ira P. Shapiro resigned as Secretary of the Trusts and Janey Ahn became Secretary of the Trusts.

 

                 
144       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Officers and Trustees (concluded)

 

 

Investment Advisor    Custodians   
BlackRock Advisors, LLC    The Bank of New York Mellon   
Wilmington, DE 19809    New York, NY 102866   
Sub-Advisors      
BlackRock Financial Management, Inc.1    Brown Brothers, Harriman & Co.   
New York, NY 10022    Boston, MA 021097   
State Street Research & Management Co.2      
One Financial Center    Transfer Agent   
Boston, MA 02111    Computershare Trust Company, N.A.   
   Canton, MA 02021   
BlackRock Capital Management, Inc.3      
Wilmington, DE 19809    Independent Registered Public Accounting Firm   
   Deloitte & Touche LLP   
BlackRock Investment Management, LLC4    Philadelphia, PA 19103   
Princeton, NJ 08540      
BlackRock International Ltd.5    Legal Counsel   
Edinburgh, EH3 8JB    Skadden, Arps, Slate, Meagher & Flom LLP   
United Kingdom    New York, NY 10036   
Accounting Agent    Address of the Trusts   
The Bank of New York Mellon    100 Bellevue Parkway   
Brooklyn, NY 11217    Wilmington, DE 19809   

1For BDJ, CII, BQY and BUI.

2For BGR.

3For BGY, BCF and BCX.

4For CII, BGY, BCF, BCX and BUI.

5For BQR and BCF.

6For all Trusts except CII.

7For CII.

 

The Trusts are managed by a team of investment professionals. Effective September 14, 2012, Chris Accettella became a co-portfolio manager of BQR, BGR, CII, BDJ, BOE, BME, BGY, BCF and BQY.

 

Effective October 31, 2012, Timothy Keefe, Thomas Bushey and Kyle G. McClements became co-portfolio managers of CII.

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    145


 

 

Additional Information

 

 

 

Proxy Results

The Annual Meeting of Shareholders was held on July 27, 2012, for shareholders of record on May 31, 2012, to elect trustee nominees for each Trust. There were no broker non-votes with regard to any of the Trusts.

Approved the Class II Trustees as follows, except for CII:

 

 

     Frank J. Fabozzi      James T. Flynn      Karen P. Robards
  

 

 

     Votes For      Votes Withheld      Abstain      Votes For      Votes Withheld      Abstain      Votes For      Votes Withheld      Abstain

 

BQR

     11,693,325         287,471         0         11,690,193         290,603         0         11,686,996         293,800       0

BGR

     26,817,346         676,005         0         26,777,887         715,464         0         26,822,523         670,828       0

BDJ

     159,178,715         4,673,461         0         158,979,029         4,873,147         0         159,038,992         4,813,184       0

BOE

     61,579,754         2,002,850         0         61,504,983         2,077,621         0         61,466,640         2,115,964       0

BME

     7,255,161         83,210         0         7,251,112         87,259         0         7,252,380         85,991       0

BGY

     99,004,307         4,154,337         0         98,950,444         4,208,200         0         98,984,614         4,174,030       0

BCF

     52,543,568         1,538,797         0         52,383,547         1,698,818         0         52,493,727         1,588,638       0

BQY

     5,620,815         88,574         0         5,620,815         88,574         0         5,621,166         88,223       0

BUI

     15,582,059         449,412         0         15,557,291         474,180         0         15,627,143         404,328       0

 

For the Trusts listed above, Trustees whose term of office continued after the Annual Meeting of Shareholders because they were not up for election are Paul L. Audet, Michael J. Castellano, Richard E. Cavanagh, Kathleen F. Feldstein, Henry Gabbay, Jerrold B. Harris, R. Glenn Hubbard and W. Carl Kester.

Approved the Directors as follows for CII only:

 

 

         Votes For           Votes Withheld           Abstain

 

Paul L. Audet

       41,055,435            894,960          0

Michael J. Castellano

       41,055,955            894,440          0

Richard E. Cavanagh

       41,092,807            857,588          0

Frank J. Fabozzi

       41,058,981            891,414          0

Kathleen F. Feldstein

       40,781,152            1,169,243          0

James T. Flynn

       40,828,867            1,121,528          0

Henry Gabbay

       41,089,033            861,362          0

Jerrold B. Harris.

       40,906,096            1,044,299          0

R. Glenn Hubbard.

       40,904,427            1,045,968          0

W. Carl Kester

       40,945,598            1,004,797          0

Karen P. Robards.

       40,869,059            1,081,336          0

 

Trust Certification

All Trusts, other than BQY which is listed on NYSE MKT, are listed for trading on the NYSE. All Trusts have filed with the relevant exchange their annual chief executive officer certification regarding compliance with such exchange’s listing standards. The Trusts filed with the SEC the certification of its chief executive officer and chief financial officer required by section 302 of the Sarbanes-Oxley Act.

 

                 
146       ANNUAL REPORT       OCTOBER 31, 2012   


 

 

Additional Information (continued)

 

 

General Information

 

The Trusts do not make available copies of their Statements of Additional Information because the Trusts’ shares are not continuously offered, which means that the Statement of Additional Information of each Trust has not been updated after completion of the respective Trust’s offerings and the information contained in each Trust’s Statement of Additional Information may have become outdated.

During the period, there were no material changes in the Trusts’ investment objectives or policies or to the Trusts’ charters or by-laws that would delay or prevent a change of control of the Trusts were not approved by the shareholders or in the principal risk factors associated with investment in the Trusts. Other than as disclosed on page 145, there have been no changes in the persons who are primarily responsible for the day-to-day management of the Trusts’ portfolios.

Quarterly performance, semi-annual and annual reports and other information regarding the Trusts may be found on BlackRock’s website, which can be accessed at http://www.blackrock.com. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Trusts and does not, and is not intended to, incorporate BlackRock’s website in this report.

Electronic Delivery

Electronic copies of most financial reports are available on the Trusts’ websites or shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual reports by enrolling in the Trusts’ electronic delivery program.

Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages:

Please contact your financial advisor. Please note that not all investment advisors, banks or brokerages may offer this service.

Householding

The Trusts will mail only one copy of shareholder documents, including annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please call the Trusts at (800) 441-7762.

Availability of Quarterly Schedule of Investments

The Trusts file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Trusts’ Forms N-Q are available on the SEC’s website at http:// www.sec.gov. and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The Trusts’ Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762.

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the Trusts use to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling (800) 441-7762; (2) at http:// www.blackrock.com; and (3) on the SEC’s website at http:// www.sec.gov.

Availability of Proxy Voting Record

Information about how the Trusts’ voted proxies relating to securities held in the Trusts’ portfolio during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http:// www.blackrock.com or by calling (800) 441-7762 and (2) on the SEC’s website at http://www.sec.gov.

Availability of Trust Updates

BlackRock will update performance and certain other data for the Trusts on a monthly basis on its website in the “Closed-end Funds” section of http://www.blackrock.com. Investors and others are advised to periodically check the website for updated performance information and the release of other material information about the Trusts. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Trusts and does not, and is not intended to, incorporate BlackRock’s website in this report.

 

 

                 
      ANNUAL REPORT       OCTOBER 31, 2012    147


 

 

Additional Information (concluded)

 

 

Dividend Policy

 

Each Trust’s dividend policy is to distribute all or a portion of its net investment income to its shareholders on a quarterly basis. In order to provide shareholders with a more stable level of dividend distributions, the dividends paid by the Trusts for any particular quarter may be more or less than the amount of net investment income earned by the Trusts during such quarter. The portion of dividend distributions that exceeds a Trust’s current and accumulated earnings and profits, which are measured on a tax basis, will constitute a nontaxable return of capital.

Dividend distributions in excess of a Trust’s taxable income and net capital gains, but not in excess of a Trust’s earnings and profits, will be taxable to shareholders as ordinary income and will not constitute a nontaxable return of capital. The Trusts’ current accumulated but undistributed net investment income, if any, is disclosed in the Statements of Assets and Liabilities, which comprises part of the financial information included in this report.

 

 

BlackRock Privacy Principles

 

BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.

If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.

BlackRock obtains or verifies personal non-public information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our websites.

BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose. We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information.

BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.

 

 

                 
148       ANNUAL REPORT       OCTOBER 31, 2012   


 

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This report is transmitted to shareholders only. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. Statements and other information herein are as dated and are subject to change.

 

LOGO

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CEF-BK11-10/12-AR


Item 2 – Code of Ethics – The registrant (or the “Fund”) has adopted a code of ethics, as of the end of the period covered by this report, applicable to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. During the period covered by this report, there have been no amendments to or waivers granted under the code of ethics. A copy of the code of ethics is available without charge at www.blackrock.com.

 

Item 3 – Audit Committee Financial Expert – The registrant’s board of directors (the “board of directors”), has determined that (i) the registrant has the following audit committee financial experts serving on its audit committee and (ii) each audit committee financial expert is independent:

Frank J. Fabozzi

James T. Flynn

W. Carl Kester

Karen P. Robards

The registrant’s board of directors has determined that W. Carl Kester and Karen P. Robards qualify as financial experts pursuant to Item 3(c)(4) of Form N-CSR.

Prof. Kester has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Prof. Kester has been involved in providing valuation and other financial consulting services to corporate clients since 1978. Prof. Kester’s financial consulting services present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant’s financial statements.

Ms. Robards has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Ms. Robards has been President of Robards & Company, a financial advisory firm, since 1987. Ms. Robards was formerly an investment banker for more than 10 years where she was responsible for evaluating and assessing the performance of companies based on their financial results. Ms. Robards has over 30 years of experience analyzing financial statements. She also is a member of the audit committee of one publicly held company and a non-profit organization.

Under applicable securities laws, a person determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. The designation or identification of a person as an audit committee financial expert does not affect the duties, obligations, or liability of any other member of the audit committee or board of directors.

 

2


Item 4 – Principal Accountant Fees and Services

The following table presents fees billed by Deloitte & Touche LLP (“D&T”) in each of the last two fiscal years for the services rendered to the Fund:

 

        (a) Audit Fees    (b) Audit-Related Fees1    (c) Tax Fees2    (d) All Other Fees3
Entity Name   

Current

  Fiscal Year  

End

  

Previous

  Fiscal Year  

End

  

Current

  Fiscal Year  

End

  

Previous

  Fiscal Year  

End

  

Current

  Fiscal Year  

End

  

Previous

  Fiscal Year  

End

  

Current

  Fiscal Year  

End

  

Previous

  Fiscal Year  

End

BlackRock Resources & Commodities Strategy Trust    $48,500    $48,000    $0    $5,000    $14,350    $14,350    $0    $0

The following table presents fees billed by D&T that were required to be approved by the registrant’s audit committee (the “Committee”) for services that relate directly to the operations or financial reporting of the Fund and that are rendered on behalf of BlackRock Advisors, LLC (“Investment Adviser” or “BlackRock”) and entities controlling, controlled by, or under common control with BlackRock (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) that provide ongoing services to the Fund (“Fund Service Providers”):

 

        Current Fiscal Year End    Previous Fiscal Year End

(b) Audit-Related Fees1

   $0    $0

(c) Tax Fees2

   $0    $0

(d) All Other Fees3

   $2,970,000    $3,030,000

1 The nature of the services includes assurance and related services reasonably related to the performance of the audit of financial statements not included in Audit Fees.

2 The nature of the services includes tax compliance, tax advice and tax planning.

3 Aggregate fees borne by BlackRock in connection with the review of compliance procedures and attestation thereto performed by D&T with respect to all of the registered closed-end funds and some of the registered open-end funds advised by BlackRock.

(e)(1) Audit Committee Pre-Approval Policies and Procedures:

The Committee has adopted policies and procedures with regard to the pre-approval of services. Audit, audit-related and tax compliance services provided to the registrant on an annual basis require specific pre-approval by the Committee. The Committee also must approve other non-audit services provided to the registrant and those non-audit services provided to the Investment Adviser and Fund Service Providers that relate directly to the operations and the financial reporting of the registrant. Certain of these non-audit services that the Committee believes are a) consistent with the SEC’s auditor independence rules and b) routine and recurring services that will not impair the independence of the independent accountants may be approved by the Committee without consideration on a specific case-by-case basis (“general pre-approval”). The term of any general pre-approval is 12 months from the date of the pre-approval, unless the Committee provides for a different period. Tax or other non-audit services provided to the registrant which have a direct impact on the operations or financial reporting of the registrant will only be deemed pre-approved provided that any individual project does not exceed $10,000 attributable to the registrant or $50,000 per project. For this purpose, multiple projects will be aggregated to determine if they exceed the previously mentioned cost levels.

 

3


Any proposed services exceeding the pre-approved cost levels will require specific pre-approval by the Committee, as will any other services not subject to general pre-approval (e.g., unanticipated but permissible services). The Committee is informed of each service approved subject to general pre-approval at the next regularly scheduled in-person board meeting. At this meeting, an analysis of such services is presented to the Committee for ratification. The Committee may delegate to the Committee Chairman the authority to approve the provision of and fees for any specific engagement of permitted non-audit services, including services exceeding pre-approved cost levels.

(e)(2) None of the services described in each of Items 4(b) through (d) were approved by the Committee pursuant to the de minimis exception in paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) Not Applicable

(g) The aggregate non-audit fees paid to the accountant for services rendered by the accountant to the registrant, the Investment Adviser and the Fund Service Providers were:

 

    Entity Name   

  Current Fiscal Year  

End

  

  Previous Fiscal Year  

End

 

BlackRock Resources &

Commodities Strategy Trust

   $14,350    $19,350

Additionally, SSAE 16 Review (Formerly, SAS No. 70) fees for the current and previous fiscal years of $2,970,000 and $3,030,000, respectively, were billed by D&T to the Investment Adviser.

(h) The Committee has considered and determined that the provision of non-audit services that were rendered to the Investment Adviser, and the Fund Service Providers that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

 

Item 5 – Audit Committee of Listed Registrants

 

  (a) The following individuals are members of the registrant’s separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(58)(A)):

Michael Castellano

Frank J. Fabozzi

James T. Flynn

W. Carl Kester

Karen P. Robards

 

  (b) Not Applicable

 

Item 6 – Investments

(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this Form.

 

4


(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.

 

Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – The board of directors has delegated the voting of proxies for the Fund’s portfolio securities to the Investment Adviser pursuant to the Investment Adviser’s proxy voting guidelines. Under these guidelines, the Investment Adviser will vote proxies related to Fund securities in the best interests of the Fund and its stockholders. From time to time, a vote may present a conflict between the interests of the Fund’s stockholders, on the one hand, and those of the Investment Adviser, or any affiliated person of the Fund or the Investment Adviser, on the other. In such event, provided that the Investment Adviser’s Equity Investment Policy Oversight Committee, or a sub-committee thereof (the “Oversight Committee”) is aware of the real or potential conflict or material non-routine matter and if the Oversight Committee does not reasonably believe it is able to follow its general voting guidelines (or if the particular proxy matter is not addressed in the guidelines) and vote impartially, the Oversight Committee may retain an independent fiduciary to advise the Oversight Committee on how to vote or to cast votes on behalf of the Investment Adviser’s clients. If the Investment Adviser determines not to retain an independent fiduciary, or does not desire to follow the advice of such independent fiduciary, the Oversight Committee shall determine how to vote the proxy after consulting with the Investment Adviser’s Portfolio Management Group and/or the Investment Adviser’s Legal and Compliance Department and concluding that the vote cast is in its client’s best interest notwithstanding the conflict. A copy of the Fund’s Proxy Voting Policy and Procedures are attached as Exhibit 99.PROXYPOL. Information on how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, (i) at www.blackrock.com and (ii) on the SEC’s website at http://www.sec.gov.

 

Item 8 – Portfolio Managers of Closed-End Management Investment Companies – As of October 31, 2012.

 

  (a)(1) The registrant is managed by a team of investment professionals comprised of Denis J. Walsh III, Managing Director at BlackRock, Daniel Neumann, CFA, Director at BlackRock, Kyle G. McClements, CFA, Managing Director at BlackRock and Christopher Accettella, Director at BlackRock. Messrs. Walsh, Neumann, McClements and Accettella are the Fund’s portfolio managers and are responsible for the day-to-day management of the Fund’s portfolio and the selection of its investments. Messrs. Walsh, Neumann, McClements and Accettella have been members of the Fund’s portfolio management team since 2011.

 

Portfolio Manager    Biography

Denis J. Walsh, III

   Managing Director of BlackRock since 2005; Managing Director of State Street Research & Management from 1999 to 2005.

Daniel Neumann

   Director of BlackRock since 2007; Vice President of BlackRock, Inc. from 2005 to 2007; Vice President of State Street Research & Management from 2004 to 2005.

Kyle G. McClements

   Managing Director of BlackRock since 2009; Director of BlackRock from 2006 to 2008; Vice President of BlackRock in 2005; Vice President of State Street Research & Management from 2004 to 2005.

Christopher Accettella, CFA

   Director of BlackRock since 2008; Vice President of BlackRock, Inc. from 2005 to 2008.

 

  (a)(2) As of October 31, 2012:

 

5


    

(ii) Number of Other Accounts Managed

and Assets by Account Type

 

(iii) Number of Other Accounts and

Assets for Which Advisory Fee is

Performance-Based

(i) Name of

Portfolio Manager

 

Other

Registered

Investment

Companies

 

Other Pooled

Investment

Vehicles

 

Other

Accounts

 

Other

Registered

Investment

Companies

 

Other Pooled

Investment

Vehicles

 

Other

Accounts

Denis J. Walsh, III

  5   7   14   0   3   3
    $2.79 Billion   $391.8 Million   $310.7 Million   $0   $123.7 Million   $11.35 Million

Daniel Neumann, CFA

  6   7   14   0   3   3
    $3.13 Billion   $391.8 Million   $310.7 Million   $0   $123.7 Million   $11.34 Million

Kyle McClements

  10   5   0   0   0   0
    $6.22 Billion   $1.97 Billion   $0   $0   $0   $0

Christopher Accettella, CFA

  10   4   0   0   0   0
    $5.59 Billion   $1.86 Billion   $0   $0   $0   $0

 

  (iv) Potential Material Conflicts of Interest

BlackRock has built a professional working environment, firm-wide compliance culture and compliance procedures and systems designed to protect against potential incentives that may favor one account over another. BlackRock has adopted policies and procedures that address the allocation of investment opportunities, execution of portfolio transactions, personal trading by employees and other potential conflicts of interest that are designed to ensure that all client accounts are treated equitably over time. Nevertheless, BlackRock furnishes investment management and advisory services to numerous clients in addition to the Fund, and BlackRock may, consistent with applicable law, make investment recommendations to other clients or accounts (including accounts which are hedge funds or have performance or higher fees paid to BlackRock, or in which portfolio managers have a personal interest in the receipt of such fees), which may be the same as or different from those made to the Fund. In addition, BlackRock Inc., its affiliates and significant shareholders and any officer, director, shareholder or employee may or may not have an interest in the securities whose purchase and sale BlackRock recommends to the Fund. BlackRock Inc., or any of its affiliates or significant shareholders, or any officer, director, shareholder, employee or any member of their families may take different actions than those recommended to the Fund by BlackRock with respect to the same securities. Moreover, BlackRock may refrain from rendering any advice or services concerning securities of companies of which any of BlackRock Inc.’s (or its affiliates’ or significant shareholders’) officers, directors or employees are directors or officers, or companies as to which BlackRock Inc. or any of its affiliates or significant shareholders or the officers, directors and employees of any of them has any substantial economic interest or possesses material non-public information. Certain portfolio managers also may manage accounts whose investment strategies may at times be opposed to the strategy utilized for a fund. It should be noted that Messrs. Walsh and Neumann may be managing hedge fund and/or long only accounts, or may be part of a team managing hedge fund and/or long only accounts, subject to incentive fees. Messrs. Walsh and Neumann may therefore be entitled to receive a portion of any incentive fees earned on such accounts.

As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client fairly. When BlackRock purchases or sells securities for more than one account, the trades must be allocated in a manner consistent with its fiduciary duties. BlackRock attempts to allocate

 

6


investments in a fair and equitable manner among client accounts, with no account receiving preferential treatment. To this end, BlackRock Inc. has adopted policies that are intended to ensure reasonable efficiency in client transactions and provide BlackRock with sufficient flexibility to allocate investments in a manner that is consistent with the particular investment discipline and client base, as appropriate.

(a)(3) As of October 31, 2012:

Portfolio Manager Compensation Overview

BlackRock’s financial arrangements with its portfolio managers, its competitive compensation and its career path emphasis at all levels reflect the value senior management places on key resources. Compensation may include a variety of components and may vary from year to year based on a number of factors. The principal components of compensation include a base salary, a performance-based discretionary bonus, participation in various benefits programs and one or more of the incentive compensation programs established by BlackRock.

Base compensation. Generally, portfolio managers receive base compensation based on their position with the firm.

Discretionary Incentive Compensation

Generally, discretionary incentive compensation for Active Equity portfolio managers is based on a formulaic compensation program. BlackRock’s formulaic portfolio manager compensation program is based on team revenue and pre-tax investment performance relative to appropriate competitors or benchmarks over 1-, 3- and 5-year performance periods, as applicable. In most cases, these benchmarks are the same as the benchmark or benchmarks against which the performance of the Fund or other accounts managed by the portfolio managers are measured. BlackRock’s Chief Investment Officers determine the benchmarks or rankings against which the performance of funds and other accounts managed by each portfolio management team is compared and the period of time over which performance is evaluated. With respect to these portfolio managers, such benchmarks for the Fund and other accounts are:

 

Portfolio Manager                 Applicable Benchmarks

Denis J. Walsh, III

Daniel Neumann, CFA

   Lipper Natural Resources Fund Classification

Kyle G. McClements

Christopher Accettella

   There are no benchmarks associated with Messrs. McClements and Accettella’s compensation.

A smaller element of portfolio manager discretionary compensation may include consideration of: financial results, expense control, profit margins, strategic planning and implementation, quality of client service, market share, corporate reputation, capital allocation, compliance and risk control, leadership, technology and innovation. These factors are considered collectively by BlackRock management and the relevant Chief Investment Officers.

 

7


Distribution of Discretionary Incentive Compensation

Discretionary incentive compensation is distributed to portfolio managers in a combination of cash and BlackRock, Inc. restricted stock units which vest ratably over a number of years. For some portfolio managers, discretionary incentive compensation is also distributed in deferred cash awards that notionally track the returns of select BlackRock investment products they manage and that vest ratably over a number of years. The BlackRock, Inc. restricted stock units, upon vesting, will be settled in BlackRock, Inc. common stock. Typically, the cash portion of the discretionary incentive compensation, when combined with base salary, represents more than 60% of total compensation for the portfolio managers. Paying a portion of discretionary incentive compensation in BlackRock stock puts compensation earned by a portfolio manager for a given year “at risk” based on BlackRock’s ability to sustain and improve its performance over future periods. Providing a portion of discretionary incentive compensation in deferred cash awards that notionally track the BlackRock investment products they manage provides direct alignment with investment product results.

Long-Term Incentive Plan Awards — From time to time long-term incentive equity awards are granted to certain key employees to aid in retention, align their interests with long-term shareholder interests and motivate performance. Equity awards are generally granted in the form of BlackRock, Inc. restricted stock units that, once vested, settle in BlackRock, Inc. common stock. Messrs. Walsh, Neumann, McClements and Accettella have each received long-term incentive awards.

Deferred Compensation Program — A portion of the compensation paid to eligible BlackRock employees may be voluntarily deferred at their election for defined periods of time into an account that tracks the performance of certain of the firm’s investment products. All of the eligible portfolio managers have participated in the deferred compensation program.

Other Compensation Benefits

In addition to base compensation and discretionary incentive compensation, portfolio managers may be eligible to receive or participate in one or more of the following incentive savings plans. BlackRock, Inc. has created a variety of incentive savings plans in which BlackRock employees are eligible to participate, including a 401(k) plan, the BlackRock Retirement Savings Plan (RSP), and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution components of the RSP include a company match equal to 50% of the first 8% of eligible pay contributed to the plan capped at $5,000 per year, and a company retirement contribution equal to 3-5% of eligible compensation up to the IRS limit ($250,000 for 2012). The RSP offers a range of investment options, including registered investment companies and collective investment funds managed by the firm. BlackRock contributions follow the investment direction set by participants for their own contributions or, absent participant investment direction, are invested into an index target date fund that corresponds to, or is closest to, the year in which the participant attains age 65. The ESPP allows for investment in BlackRock, Inc. common stock at a 5% discount on the fair market value of the stock on the purchase date. Annual participation in the ESPP is limited to the purchase of 1,000 shares of common stock or a dollar value of $25,000 based on its fair market value on the Purchase Date. Messrs. Walsh, Neumann, McClements and Accettella are each eligible to participate in these plans.

(a)(4) Beneficial Ownership of Securities – As of October 31, 2012.

 

8


Portfolio Manager   

Dollar Range of Equity Securities

of the Fund Beneficially Owned

Denis J. Walsh, III

   $100,001 - $500,000

Daniel Neumann, CFA    

   None

Kyle G. McClements

   $10,001 - $50,000

Christopher Accettella

   $1 - $10,000

(b) Not Applicable

 

Item 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable due to no such purchases during the period covered by this report.

 

Item 10 – Submission of Matters to a Vote of Security Holders – There have been no material changes to these procedures.

 

Item 11 – Controls and Procedures

(a) – The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.

(b) – There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 12 – Exhibits attached hereto

(a)(1) – Code of Ethics – See Item 2

(a)(2) – Certifications – Attached hereto

(a)(3) – Not Applicable

(b) – Certifications – Attached hereto

 

9


Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BlackRock Resources & Commodities Strategy Trust

 

By:  

/s/ John M. Perlowski

 
  John M. Perlowski
  Chief Executive Officer (principal executive officer) of
  BlackRock Resources & Commodities Strategy Trust

Date: January 7, 2013

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:  

/s/ John M. Perlowski

 
  John M. Perlowski
  Chief Executive Officer (principal executive officer) of
  BlackRock Resources & Commodities Strategy Trust

Date: January 7, 2013

 

By:  

/s/ Neal J. Andrews

 
  Neal J. Andrews
  Chief Financial Officer (principal financial officer) of
  BlackRock Resources & Commodities Strategy Trust

Date: January 7, 2013

 

10