<![CDATA[BLACKROCK UTILITY & INFRASTRUCTURE TRUST]]>
Table of Contents

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: 811-22606

Name of Fund:    BlackRock Utility and Infrastructure Trust (BUI)

Fund Address:    100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Utility and Infrastructure 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: 10/31/2013

Date of reporting period: 10/31/2013

Table of Contents

Item 1 – Report to Stockholders

Table of Contents

OCTOBER 31, 2013        

 

 

ANNUAL REPORT

 

       BLACKROCK®

 

„  BlackRock Dividend Income Trust (BQY)

„   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 Utility and Infrastructure Trust (BUI)

 

 

 

Not FDIC Insured ¡ May Lose Value ¡ No Bank Guarantee  

 

 

Table of Contents
      

 

 

Section 19(a) Notices

BlackRock Dividend Income Trust’s (BQY), 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) 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, 2013

 

      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

BQY

    $ 0.258759       $ 0.169464       $ 0.511777         —       $0.940000    28%   18%   54%   0%   100%

BQR*

    $ 0.092232         —         —       $ 0.624768       $0.717000    13%   0%   0%   87%   100%

BGR

    $ 0.138553       $ 1.077085       $ 0.404362         —       $1.620000    9%   66%   25%   0%   100%

CII*

    $ 0.303164         —         —       $ 0.896836       $1.200000    25%   0%   0%   75%   100%

BDJ*

    $ 0.169986         —         —       $ 0.390014       $0.560000    30%   0%   0%   70%   100%

BOE*

    $ 0.114145         —         —       $ 1.132455       $1.246600    9%   0%   0%   91%   100%

BME

    $ 0.135759       $ 1.693346       $ 0.558395         —       $2.387500    6%   71%   23%   0%   100%

BGY*

    $ 0.123834         —         —       $ 0.547566       $0.671400    18%   0%   0%   82%   100%

BCF*

    $ 0.103393         —         —       $ 0.782607       $0.886000    12%   0%   0%   88%   100%

BCX*

    $ 0.226657         —         —       $ 0.933343       $1.160000    20%   0%   0%   80%   100%

BUI*

    $ 0.495558       $ 0.007714       $ 0.346901       $ 0.599827       $1.450000    34%   1%   24%   41%   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        
  BQY        $0.230000      
  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      
    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, 2013     

Table of Contents
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   

Trust Summaries

      6   

Derivative Financial Instruments

      28   

Financial Statements:

   

Schedules of Investments

      29   

Statements of Assets and Liabilities

      99   

Statements of Operations

      101   

Statements of Changes in Net Assets

      103   

Statements of Cash Flows

      109   

Financial Highlights

      112   

Notes to Financial Statements

      123   

Report of Independent Registered Public Accounting Firm

      137   

Important Tax Information

      138   

Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement

      139   

Automatic Dividend Reinvestment Plans

      144   

Officers and Trustees

      145   

Additional Information

      149   

 

     ANNUAL REPORT    OCTOBER 31, 2013    3

Table of Contents

Dear Shareholder

Financial markets were volatile as 2012 drew to a close, with investors growing increasingly concerned over the possible implementation of pre-mandated tax increases and spending cuts known as the “fiscal cliff.” However, a last-minute tax deal averted the potential crisis and allowed markets to get off to a strong start in 2013. Money that had been pulled to the sidelines amid year-end tax-rate uncertainty poured back into the markets in January. Key indicators signaling modest but broad-based improvements in the world’s major economies, coupled with the absence of negative headlines from Europe, fostered an aura of comfort for investors. Global equities surged, while rising US Treasury yields pressured high quality fixed income assets. (Bond prices fall when yields rise.)

Global economic momentum slowed in February, however, and the pace of the rally moderated. In the months that followed, US stocks outperformed international stocks, as America showed greater stability compared to most other regions. Slow, but positive, growth was sufficient to support corporate earnings, while uncomfortably high unemployment reinforced expectations that the Federal Reserve would keep its asset purchase program intact and interest rates low. International markets experienced higher levels of volatility given a resurgence of political instability in Italy, a severe banking crisis in Cyprus and a generally poor outlook for European economies, many of which were mired in recession. Emerging markets significantly lagged the rest of the world as growth in these economies, particularly in China and Brazil, fell short of expectations.

In May, the Fed Chairman commented on the possibility of beginning to gradually reduce – or “taper” — the central bank’s asset purchase program before the end of 2013. Investors around the world retreated from higher risk assets in response. Markets rebounded in late June when the tone of the US central bank turned more dovish, and improving economic indicators and better corporate earnings helped extend gains through July.

Markets slumped again in August as investors became wary of looming macro risks. Mixed economic data stirred worries about global growth and uncertainty about when and how much the Fed would scale back on stimulus. Also weighing on investors’ minds was the escalation of the revolution in Egypt and the civil war in Syria, both of which fueled higher oil prices, an additional headwind for global economic growth.

September was surprisingly positive for investors, thanks to the easing of several key risks. Most important, the Fed defied market expectations with its decision to delay tapering. Additionally, the more hawkish candidate to become the next Fed Chairman, Larry Summers, withdrew from the race. On the geopolitical front, turmoil in Egypt and Syria subsided. In Europe, the re-election of Angela Merkel as Chancellor of Germany was welcomed as a continuation of the status quo. High levels of volatility returned in late September when the Treasury Department warned that the US national debt would breach its statutory maximum soon after Oct. 17. Political brinksmanship led to a partial government shutdown, roiling global financial markets through the first half of October, but the rally quickly resumed with a last-minute compromise to reopen the government and extend the debt ceiling until early 2014.

Though periods of heightened uncertainty drove high levels of market volatility over the past year, riskier asset classes generally outperformed lower-risk investments. Developed market equities generated the highest returns for the 6-and 12-month periods ended Oct. 31, with particular strength coming from US small-cap stocks. Emerging markets posted smaller, albeit positive returns after struggling with slowing growth and weakening currencies in the first half of 2013. Rising interest rates resulted in poor performance for US Treasury bonds and other higher-quality sectors such as tax-exempt municipals and investment grade corporate bonds. High yield bonds, on the other hand, moved higher as income-oriented investors sought meaningful returns in the low-rate environment. Short-term interest rates remained near zero, keeping yields on money market securities near historical lows.

At BlackRock, we believe investors need to think globally and extend their scope across a broader array of asset classes and be prepared to move freely as market conditions change over time. We encourage you to talk with your financial advisor and visit www.blackrock.com for further insight about investing in today’s world.

Sincerely,

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

LOGO

“Though periods of heightened uncertainty drove high levels of market volatility over the past year, riskier asset classes generally outperformed lower-risk investments.”

Rob Kapito

President, BlackRock Advisors, LLC

 

Total Returns as of October 31, 2013  
     6-month     12-month  

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

      11.14 %      27.18 % 

US small cap equities
(Russell 2000® Index)

      16.90        36.28   

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

      8.53        26.88   

Emerging market equities
(MSCI Emerging Markets Index)

      1.18        6.53   

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

      0.03        0.09   

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

      (6.07 )      (4.64 ) 

US investment grade
bonds (Barclays US
Aggregate Bond Index)

      (1.97 )      (1.08 ) 

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

      (3.63 )      (1.69 ) 

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

      1.50        8.86   
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          

Table of Contents
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 total assets and net asset value per share (“NAV”) and, therefore, could have the effect of increasing the Trust’s expense ratio and reducing the amount of assets the Trust has available for long term investment. In order to make these distributions, a Trust may have to sell portfolio securities at less than opportune times.

The final tax characterization of distributions is determined after the fiscal year and is reported in the Trust’s annual report to shareholders. Distributions will be characterized as ordinary income, capital gains and/or return of capital. The Trust’s taxable net investment income or net realized capital gains (“taxable income”) may not be sufficient to support the level of distributions paid. To the extent that distributions exceed the Trust’s current and accumulated earnings and profits, the excess may be treated as a non-taxable return of capital. Distributions that exceed a Trust’s taxable income but do not exceed the Trust’s current and accumulated earnings and profits, may be classified as ordinary income which are taxable to shareholders.

A return of capital distribution does not necessarily reflect a Trust’s investment performance and should not be confused with ‘yield’ or ‘income.’ A return of capital is a return of a portion of an investor’s original investment. A return of capital is not taxable, but it reduces a shareholder’s tax basis in his or her shares, thus reducing any loss or increasing any gain on a subsequent disposition by the shareholder of his or her shares. It is possible that a substantial portion of the distributions paid during a calendar year may ultimately be classified as return of capital for income tax purposes when the final determination of the source and character of the distributions is made.

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.

 

 

     ANNUAL REPORT    OCTOBER 31, 2013    5

Table of Contents
Trust Summary as of October 31, 2013      BlackRock Dividend Income Trust   

 

Trust Overview

BlackRock Dividend Income Trust’s (BQY) (the “Trust”) investment objective is to provide total return through a combination of current income and 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 that pay dividends. 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.

The Board approved a change to the Trust’s non-fundamental investment policies on June 4, 2013. Please refer to page 150 in the Additional Information section. In addition, on July 30, 2013, the Board approved a change to the Trust’s name from “BlackRock S&P Quality Rankings Global Equity Managed Trust” to “BlackRock Dividend Income Trust.” The name change became effective on August 13, 2013.

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

 

Portfolio Management Commentary

 

How did the Trust perform?

 

Ÿ  

For the 12-month period ended October 31, 2013, the Trust returned 12.18% based on market price and 15.50% based on NAV. For the same period, the MSCI World Value Index returned 27.26%. 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?

 

Ÿ  

The Trust underperformed the benchmark index due to its option overwrite strategy, which is utilized to generate income. During the period, the option overwrite limited the Trust’s ability to capture price appreciation on its underlying portfolio holdings in the strong equity market while the benchmark index has no option component. Also detracting from the Trust’s performance was a combination of stock selection and a substantial underweight in the financials sector. Security selection within consumer staples, information technology (“IT”) and consumer discretionary hurt returns as the Trust held a bias toward higher-quality stocks, which did not perform as well as the broader equity market. Security selection within industrials and health care detracted from performance as well. At a broad level, while the Trust’s sector allocations contributed positively to results for the period, security selection hurt relative performance due to owning higher-capitalized, stronger companies which tended to lag their lower-quality counterparts during the period.

 

Ÿ  

Contributing positively to relative performance was the Trust’s underweight position in the energy sector and a combination of an underweight and strong stock selection in the materials sector. Overweight allocations to IT, consumer discretionary and industrials also had a positive impact on returns for the period.

Describe recent portfolio activity.

 

Ÿ  

During the 12-month period, portfolio turnover ultimately remained very low. However, the Trust removed some of its Canadian bank holdings and reduced some of its materials and industrials positions given the prospect of slowing growth in emerging markets, where many of these companies have higher degrees of exposure. The Trust added to other, more attractively valued companies within the consumer discretionary, consumer staples, utilities and health care sectors given a more positive outlook for these stocks in the global economic environment.

Describe Trust positioning at period end.

 

Ÿ  

The investment advisor continues to maintain the view that dividend income is essential for total return, and that the prospect for dividend growth among U.S. multinational companies presents a unique investment opportunity in today’s marketplace.

 

Ÿ  

As of period end, the Trust was positioned to perform well in a wide range of economic scenarios. The Trust’s holdings emphasized companies that carry a diverse group of assets, have extensive customer bases among both retail and institutional clients, and lower sensitivity to broad changes in macroeconomic variables. By taking less factor-specific risk, the Trust typically maintains a lower volatility than the market, but remains able to capture upside as equity markets and the broader economy gain momentum. Owning companies that can participate in all parts of the economic cycle helps prepare the Trust for less certain times. The Trust continued to search for brand leadership and industry dominance in its investments with a preference for companies with the number one or number two products on the shelf in terms of market share. The Trust was also positioned to benefit from a shift in market leadership from lower-capitalized stocks to larger-capitalized stocks, while continuing to emphasize growth of income, relative protection and long-term total return as the core of its investment process. Overall, the Trust remained well-insulated, but poised to participate should markets continue to experience gains.

 

 

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, 2013     

Table of Contents
       BlackRock Dividend Income Trust   

 

Trust Information

Symbol on New York Stock Exchange (“NYSE”) MKT

    BQY

Initial Offering Date

    May 28, 2004

Current Distribution Rate on Closing Market Price as of October 31, 2013 ($12.84)1

    7.17%

Current Quarterly Distribution per Common Share2

    $0.23

Current Annualized Distribution per Common Share2

    $0.92

 

1 

Current distribution rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a tax return of capital. See the financial highlights for the actual sources and character of distributions. 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.

 

Market Price and Net Asset Value Per Share Summary
      10/31/13      10/31/12      Change     High      Low  

Market Price

    $ 12.84       $ 12.34         4.05 %    $ 13.27       $ 11.04   

Net Asset Value

    $ 14.42       $ 13.46         7.13 %    $ 14.51       $ 12.73   

 

Market Price and Net Asset Value History For the Past Five Years

 

 

LOGO

 

Overview of the Trust’s Long-Term Investments

 

Ten Largest Holdings    10/31/13

Exxon Mobil Corp.

        3 %

AT&T Inc.

        3  

Chevron Corp.

        2  

Bristol-Myers Squibb Co.

        2  

The Walt Disney Co.

        2  

Emerson Electric Co.

        2  

General Mills, Inc.

        2  

Total SA - ADR

        2  

Pfizer, Inc.

        2  

Altria Group, Inc.

        2  
Sector Allocation    10/31/13   10/31/12

Financials

        20 %       20 %

Consumer Staples

        14         11  

Industrials

        12         11  

Health Care

        11         10  

Energy

        11         12  

Consumer Discretionary

        8         7  

Utilities

        7         9  

Information Technology

        7         8  

Telecommunication Services

        6         8  

Materials

        4         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 the investment advisor. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

 

 

     ANNUAL REPORT    OCTOBER 31, 2013    7

Table of Contents
Trust Summary as of October 31, 2013      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?

 

Ÿ  

For the 12-month period ended October 31, 2013, the Trust returned (0.34)% based on market price and 9.08% based on NAV. For the same period, the closed-end Lipper Utility Funds category posted an average return of 10.94% based on market price and 16.90% 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?

 

Ÿ  

The Trust’s exposure to certain water utilities drove positive returns for the period, with strong performance from Aqua America, Inc., American States Water Co. and Severn Trent Plc. Exposure to industrial machinery stocks also had a positive impact on results as the Trust’s positions in Pentair Ltd. and Xylem, Inc. performed particularly well. The Trust benefited from holding companies with exposure to alternative fuels such as Archer-Daniels Midland Co. and Novozymes A/S as these stocks added significantly to returns for the period. Gains from the Trust’s option writing strategy had a positive impact on performance for the period.

 

Ÿ  

Detracting from performance were the Trust’s holdings of fertilizer and diversified chemicals names including Potash Corp. of Saskatchewan, Inc., Agrium, Inc. and K+S AG. The stocks declined on the back of weakness in the potash industry (a fertilizer product) partly driven by the news that the major Russian potash producer Uralkali plans to exit the Belorussian Potash Co. (i.e., the “BPC,” one of the key marketing groups for the commodity), which may potentially result in increased competition and

   

have an impact on potash prices. Certain water utility positions detracted from performance including Manila Water Co., Inc., Sabesp and Cia de Saneamento de Minas Gerais — COPASA. Sabesp and Cia de Saneamento de Minas Gerais — COPASA, both Brazilian water utilities, have underperformed given the potential negative impact that recent political issues in Brazil may have on near-term earnings growth and cash flow. 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.

 

Ÿ  

During the 12-month period, the Trust added a position in Tyson Foods, Inc. and exited a position in CNH Global NV within agriculture. In new energy, the Trust initiated positions in TransCanada Corp. and Chicago Bridge & Iron Co. NV and sold American Superconductor Corp. There were no significant positioning changes in the water space given the long-term nature of the investment advisor’s outlook for this segment.

Describe portfolio positioning at period end.

 

Ÿ  

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

 

8    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
     BlackRock EcoSolutions Investment Trust

 

 

Trust Information     

Symbol on NYSE

    BQR

Initial Offering Date

    September 28, 2007

Current Distribution Rate on Closing Market Price as of October 31, 2013 ($7.93)1

    9.04%

Current Quarterly Distribution per Common Share2

    $0.17925

Current Annualized Distribution per Common Share2

    $0.71700

 

1

Current distribution rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a tax return of capital. See the financial highlights for the actual sources and character of distributions. 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.

 

Market Price and Net Asset Value Per Share Summary                                            
      10/31/13      10/31/12      Change     High      Low  

Market Price

    $ 7.93       $ 8.66         (8.43 )%    $ 9.48       $ 7.59   

Net Asset Value

    $ 9.16       $ 9.14         0.22 %    $ 9.78       $ 8.65   

 

Market Price and Net Asset Value History For the Past Five Years

 

 

LOGO

 

Overview of the Trust’s Long-Term Investments

 

Ten Largest Holdings    10/31/13

Monsanto Co.

        4 %

Severn Trent PLC

        3  

Manila Water Co., Inc.

        3  

Syngenta AG

        3  

Aqua America, Inc.

        3  

Sao Martinho SA

        3  

Bunge Ltd.

        3  

Inversiones Aguas Metropolitanas SA

        3  

Agrium, Inc.

        2  

BrasilAgro - Co. Brasileira de Propriedades Agricolas

        2  
Industry Allocation    10/31/13   10/31/12

Water Utilities

        26 %       25 %

Chemicals

        20         22  

Food Products

        13         14  

Machinery

        12         12  

Electric Utilities

        4         4  

Electrical Equipment

        4         3  

Other3

        21         20  

 

3 

Other includes a 3% holding or less in each of the following industries; Oil, Gas & Consumable Fuels, Real Estate Investment Trusts (REITs), Multi-Utilities, Commercial Services & Supplies, Construction & Engineering, Electronic Equipment, Instruments & Components, Biotechnology, Auto Components, Independent Power Producers & Energy Traders, Semiconductors & Semiconductor Equipment, Road & Rail, Real Estate Management & Development, Building Products, Paper & Forest Products and Metals & Mining.

 

 

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 the investment advisor. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

 

     ANNUAL REPORT    OCTOBER 31, 2013    9

Table of Contents
Trust Summary as of October 31, 2013      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?

 

Ÿ  

For the 12-month period ended October 31, 2013, the Trust returned 17.70% based on market price and 23.68% based on NAV. For the same period, the closed-end Lipper Natural Resources Funds category posted an average return of 9.25% based on market price and 14.45% 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?

 

Ÿ  

Exposure to oil & gas exploration & production companies, the Trust’s largest industry allocation, was the primary driver of positive returns for the period. The strong performance of this industry was supported by a series of promising results from drilling in the Utica and Marcellus shale regions as well as the Permian basin. Holdings in U.S.-based companies Gulfport Energy Corp., Pioneer Natural Resources Co. and EQT Corp. were among the Trust’s strongest individual performers. Gains from the Trust’s option writing strategy had a positive impact on performance for the period.

 

Ÿ  

Detracting from performance was the Trust’s exposure to precious metal equities. Gold and silver were subjected to heavy selling pressure in

   

2013 as market participants anticipated a reduction in monetary stimulus from the Federal Reserve. Particularly poor performers amid falling metal prices were the Trust’s positions in Silver Wheaton Corp., a silver streaming company, and Goldcorp, Inc., a major gold producer. Also detracting from results was the Trust’s holding in exploration & production company Energy XXI (Bermuda) Ltd., which encountered operational challenges relating to its deep-water activity in the Gulf of Mexico. The Trust sold this position during the period.

Describe recent portfolio activity.

 

Ÿ  

During the 12-month period, the Trust reduced exposure to companies involved in the production of non-energy related products, most notably metal and mining shares, in order to maintain a focus on traditional energy companies. The overall number of holdings in the Trust decreased during the period, resulting in fewer, higher-conviction positions.

Describe portfolio positioning at period end.

 

Ÿ  

As of period end, the Trust’s positioning reflected a preference for energy exploration and production companies and integrated oil & gas names, with smaller exposure to oil services.

 

 

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, 2013     

Table of Contents
     BlackRock Energy and Resources Trust

 

 

Trust Information     

Symbol on NYSE

    BGR

Initial Offering Date

    December 29, 2004

Current Distribution Rate on Closing Market Price as of October 31, 2013 ($26.82)1

    6.04%

Current Quarterly Distribution per Common Share2

    $0.405

Current Annualized Distribution per Common Share2

    $1.620

 

1

Current distribution rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a tax return of capital. See financial highlights for the actual sources and character of distributions. 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.

 

Market Price and Net Asset Value Per Share Summary                                            
      10/31/13      10/31/12      Change     High      Low  

Market Price

    $ 26.82       $ 24.28         10.46 %    $ 27.07       $ 21.78   

Net Asset Value

    $ 30.12       $ 25.95         16.07 %    $ 30.58       $ 24.64   

 

Market Price and Net Asset Value History For the Past Five Years

 

 

LOGO

 

Overview of the Trust’s Long-Term Investments

 

Ten Largest Holdings    10/31/13

Chevron Corp.

        9 %

Exxon Mobil Corp.

        8  

Noble Energy, Inc.

        6  

Schlumberger Ltd.

        6  

ConocoPhillips

        5  

Anadarko Petroleum Corp.

        5  

Hess Corp.

        5  

Halliburton Co.

        4  

Whiting Petroleum Corp.

        4  

EOG Resources, Inc.

        4  

 

Industry Allocation    10/31/13   10/31/12

Oil, Gas & Consumable Fuels

        83 %       78 %

Energy Equipment & Services

        17         16  

Metals & Mining

        —         6  

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 the investment advisor. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

 

 

     ANNUAL REPORT    OCTOBER 31, 2013    11

Table of Contents
Trust Summary as of October 31, 2013      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?

 

Ÿ  

For the 12-month period ended October 31, 2013, the Trust returned 14.11% based on market price and 18.97% based on NAV. For the same period, the benchmark S&P 500® Value Index returned 28.36%. 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?

 

Ÿ  

The Trust underperformed the benchmark index due to its option overwrite strategy, which is utilized to generate income. During the period, the option overwrite limited the Trust’s ability to capture price appreciation on its underlying portfolio holdings in the strong equity market while the benchmark index has no option component. Additionally, stock selection hurt results in several sectors including financials, energy and health care. Specifically, within financials, an underweight to money center banks proved costly as this segment continued to recover. Also having a negative impact was exposure to real estate investment trust Annaly Capital Management, Inc., which came under pressure as rising interest rates pressured the book value of the company’s underlying holdings.

 

Ÿ  

Conversely, favorable sector positioning aided relative returns. Relative to the S&P 500® Value Index, the Trust’s underweight in utilities proved beneficial as the sector lagged the broader equity rally during the period.

 

Overweight allocations to information technology (“IT”) and health care, leading sectors in the market rally, also had a positive impact on performance. Additionally, several of the Trust’s high-conviction holdings drove positive results, including Google, Inc., which continued to deliver strong growth with no signs of slowing down, as well as Sciences Applications International Corp. and American International Group, Inc., each of which moved higher on investors’ reactions to their shareholder-friendly business restructuring.

Describe recent portfolio activity.

 

Ÿ  

Sector weightings in the Trust are generally a result of individual stock selection. Within that context, the Trust nearly doubled its weighting in IT while nearly eliminating exposure to utilities during the 12-month period. While other sector weightings were relatively unchanged, a number of the stocks held in the Trust were sold and replaced with new positions. Overall, the number of securities held by the Trust decreased, resulting in greater weightings of the Trust’s high-conviction positions.

Describe portfolio positioning at period end.

 

Ÿ  

Relative to the S&P 500® Value Index, the Trust ended the period overweight within IT, along with modest overweights in consumer discretionary, health care, materials and telecommunication services. In contrast, the Trust was dramatically underweight in utilities, industrials and financials.

 

 

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, 2013     

Table of Contents
     BlackRock Enhanced Capital and Income Fund, Inc.

 

Trust Information     

Symbol on NYSE

    CII

Initial Offering Date

    April 30, 2004

Current Distribution Rate on Closing Market Price as of October 31, 2013 ($13.52)1

    8.88%

Current Quarterly Distribution per Common Share2

    $0.30

Current Annualized Distribution per Common Share2

    $1.20

 

1

Current distribution rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a tax return of capital. See financial highlights for the actual sources and character of distributions. 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.

 

Market Price and Net Asset Value Per Share Summary                                            
      10/31/13      10/31/12      Change     High      Low  

Market Price

    $ 13.52       $ 12.99         4.08 %    $ 13.57       $ 11.80   

Net Asset Value

    $ 15.31       $ 14.11         8.50 %    $ 15.31       $ 13.62   

 

Market Price and Net Asset Value History For the Past Five Years                         

 

 

LOGO

 

Overview of the Trust’s Long-Term Investments

 

Ten Largest Holdings    10/31/13

Google, Inc., Class A

        6 %

American International Group, Inc.

        6  

Japan Airlines Co. Ltd.

        5  

Vodafone Group PLC - ADR

        5  

CF Industries Holdings, Inc.

        4  

Suncor Energy, Inc.

        4  

Pfizer, Inc.

        4  

UnitedHealth Group, Inc.

        3  

Apple, Inc.

        3  

JPMorgan Chase & Co.

        3  
Sector Allocation    10/31/13   10/31/12

Information Technology

        20 %       12 %

Financials

        18         22  

Health Care

        14         12  

Energy

        13         11  

Consumer Discretionary

        11         8  

Industrials

        7         10  

Consumer Staples

        6         8  

Telecommunication Services

        6         8  

Materials

        5         4  

Utilities

        —         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 the investment advisor. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

 

 

     ANNUAL REPORT    OCTOBER 31, 2013    13

Table of Contents
Trust Summary as of October 31, 2013    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

How did the Trust perform?

 

Ÿ  

For the 12-month period ended October 31, 2013, the Trust returned 12.09% based on market price and 15.11% based on NAV. For the same period, the Russell 1000® Value Index returned 28.29%. 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?

 

Ÿ  

The Trust underperformed the benchmark index due to its option overwrite strategy, which is utilized to generate income. During the period, the option overwrite limited the Trust’s ability to capture price appreciation on its underlying portfolio holdings in the strong equity market while the benchmark index has no option component. Also detracting from the Trust’s performance was a combination of an underweight position and stock selection within the financials sector. Stock selection within industrials and consumer discretionary had a negative impact on results as well. An underweight and stock selection in information technology (“IT”) hindered returns, as did an overweight and selection in consumer staples. Thematically, underweight positions at the individual stock level accounted for the majority of relative underperformance during the period. In many cases, the Trust was hurt by not owning lower-capitalized, lower-quality stocks represented in the benchmark index.

 

Ÿ  

Contributing positively to relative performance was the Trust’s underweight to the energy sector, specifically with respect to the oil, gas & consumable fuels industry. An overweight in the consumer discretionary sector, which was a strong performer during the period, also had a positive impact on results. An overweight position in industrials, particularly within the aerospace & defense industry, added substantially to relative returns during the period.

Describe recent portfolio activity.

 

Ÿ  

During the 12-month period, portfolio turnover ultimately remained very low. However, some changes were made in financials, where the Trust

   

removed some of its Canadian bank holdings and added to other, more attractive industries within the sector, including regional banks and insurance companies. These changes resulted in an increased weighting in financials. Also during the period, the Trust exited some of its positions within materials and industrials given the prospect of slowing growth in emerging markets, where many of these companies have exposure. Lastly, the Trust exited positions in various utilities holdings during the period due to higher than normal valuations and uncertainty around future plans for some of the companies.

Describe portfolio positioning at period end.

 

Ÿ  

The investment advisor continues to maintain the view that dividend income is essential for total return, and that the prospect for dividend growth among U.S. multinational companies presents a unique investment opportunity in today’s marketplace.

 

Ÿ  

As of period end, the Trust was positioned to perform well in a wide range of economic scenarios. The Trust’s holdings emphasized companies that carry a diverse group of assets, have extensive customer bases among both retail and institutional clients, and lower sensitivity to broad changes in macroeconomic variables. By taking less factor-specific risk, the Trust typically maintains a lower volatility than the market, but remains able to capture upside as equity markets and the broader economy gain momentum. Owning companies that can participate in all parts of the economic cycle helps prepare the Trust for less certain times. The Trust continued to search for brand leadership and industry dominance in its investments with a preference for companies with the number one or number two products on the shelf in terms of market share. The Trust was also positioned to benefit from a shift in market leadership from lower-capitalized stocks to larger-capitalized stocks, while continuing to emphasize growth of income, relative protection and long-term total return as the core of its investment process. Overall, the Trust remained well-insulated, but poised to participate should markets continue to experience gains.

 

 

 

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, 2013     

Table of Contents
       BlackRock Enhanced Equity Dividend Trust   

 

 

Trust Information     

Symbol on NYSE

    BDJ

Initial Offering Date

    August 31, 2005

Current Distribution Rate on Closing Market Price as of October 31, 2013 ($7.72)1

    7.25%

Current Quarterly Distribution per Common Share2

    $0.14

Current Annualized Distribution per Common Share2

    $0.56

 

1

Current distribution rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a tax return of capital. See financial highlights for the actual sources and character of distributions. 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.

 

Market Price and Net Asset Value Per Share Summary                                            
      10/31/13      10/31/12      Change     High      Low  

Market Price

    $ 7.72       $ 7.41         4.18 %    $ 8.02       $ 6.87   

Net Asset Value

    $ 8.88       $ 8.30         6.99 %    $ 8.93       $ 8.03   

 

Market Price and Net Asset Value History For the Past Five Years                         

 

 

LOGO

 

Overview of the Trust’s Long-Term Investments

 

Ten Largest Holdings    10/31/13

Chevron Corp.

        3 %

Wells Fargo & Co.

        3  

JPMorgan Chase & Co.

        3  

General Electric Co.

        3  

Comcast Corp., Special Class A

        3  

Pfizer, Inc.

        3  

The Home Depot, Inc.

        2  

Exxon Mobil Corp.

        2  

Verizon Communications, Inc.

        2  

Merck & Co., Inc.

        2  
Sector Allocation    10/31/13   10/31/12

Financials

        21 %       18 %

Energy

        14         12  

Industrials

        13         15  

Consumer Staples

        12         13  

Consumer Discretionary

        9         11  

Health Care

        9         7  

Materials

        7         5  

Utilities

        6         10  

Information Technology

        5         3  

Telecommunication Services

        4         6  

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 the investment advisor. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

 

 

     ANNUAL REPORT    OCTOBER 31, 2013    15

Table of Contents
Trust Summary as of October 31, 2013      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 sectors of 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?

 

Ÿ  

For the 12-month period ended October 31, 2013, the Trust returned 21.99% based on market price and 21.93% based on NAV. For the same period, the MSCI All Country World Index posted a return of 23.29%. 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?

 

Ÿ  

The Trust’s allocation to cash during a period of strong, rising equity markets was the largest detractor from performance relative to the benchmark index, which has no cash component. From a sector perspective, positioning within consumer discretionary hindered results as weaker-than-expected store traffic and an increasingly competitive promotional environment impacted some of the Trust’s holdings in apparel retail.

 

Ÿ  

Contributing positively to the Trust’s performance was favorable stock selection across nine of the ten sectors in the benchmark index, most notably within information technology (“IT”), industrials and consumer staples. In IT, a position in Facebook, Inc. drove positive results as the stock moved higher due to increased monetization of its mobile platform. Within industrials, positioning in companies such as Hino Motors benefited from Japan’s aggressive reflationary policies. Notable contributors in consumer staples included The Hain Celestial Group, Inc.,

   

which benefited from increased demand for organic and natural food products, and Smithfield Foods, as the company was acquired for a premium by Shuagnhui International Holdings (which is not owned by the Trust). Gains from the Trust’s option writing strategy had a positive impact on performance for the period.

Describe recent portfolio activity.

 

Ÿ  

During the 12-month period, the Trust reduced exposure to defensive-oriented areas such as utilities and consumer staples due to concerns about the potential negative impact of rising interest rates on these sectors. These reductions funded increased allocations to the industrials and consumer discretionary sectors, adding particularly to holdings deemed likely to benefit from a recovery in European economic growth. On a regional basis, the Trust reduced exposure to emerging markets and added to developed Europe.

Describe portfolio positioning at period end.

 

Ÿ  

At period end, the Trust’s positioning reflected a positive outlook for the world economy. The Trust’s regional positioning was consistent with the view that Europe and Japan look the most attractive given their improving growth dynamics in addition to the recent outperformance of developed versus emerging markets. However, the Trust continued to explore and identify emerging market opportunities, albeit on tactical basis given the ongoing structural challenges faced by many of these countries.

 

 

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, 2013     

Table of Contents
       BlackRock Global Opportunities Equity Trust   

 

Trust Information     

Symbol on NYSE

    BOE

Initial Offering Date

    May 31, 2005

Current Distribution Rate on Closing Market Price as of October 31, 2013 ($14.74)1

    8.46%

Current Quarterly Distribution per Common Share2

    $0.31165

Current Annualized Distribution per Common Share2

    $1.24660

 

1

Current distribution rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a tax return of capital. See financial highlights for the actual sources and character of distributions. 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.

 

Market Price and Net Asset Value Per Share Summary                                            
      10/31/13      10/31/12      Change     High      Low  

Market Price

    $ 14.74       $ 13.24         11.33 %    $ 14.83       $ 11.92   

Net Asset Value

    $ 16.68       $ 14.99         11.27 %    $ 16.89       $ 14.27   

 

Market Price and Net Asset Value History For the Past Five Years                         

 

 

LOGO

 

Overview of the Trust’s Long-Term Investments

 

Ten Largest Holdings    10/31/13

Google, Inc., Class A

        3 %

Apple, Inc.

        2  

Roche Holding AG

        2  

Anheuser-Busch InBev NV

        2  

Novartis AG

        1  

Roper Industries, Inc.

        1  

Facebook, Inc., Class A

        1  

NH Hoteles SA

        1  

Svenska Cellulosa AB, B Shares

        1  

Daimler AG

        1  
Geographic Allocation    10/31/13   10/31/12

United States

        44 %       47 %

United Kingdom

        10         12  

France

        8         4  

Japan

        8         3  

Switzerland

        5         2  

Other3

        25         32  

 

3

Other includes a 5% holding or less in each of the following countries; Spain, Sweden, Hong Kong, Germany, Belgium, Russia, Italy, China, Ireland, Indonesia, Mexico, Australia, Norway, Netherlands, Brazil, Thailand, New Zealand, South Korea, Taiwan, Singapore, India, Cayman Islands, Bermuda, Canada and Argentina.

 

 

     ANNUAL REPORT    OCTOBER 31, 2013    17

Table of Contents
Trust Summary as of October 31, 2013      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?

 

Ÿ  

For the 12-month period ended October 31, 2013, the Trust returned 30.38% based on market price and 33.37% based on NAV. For the same period, the Russell 3000® Healthcare Index returned 36.06%. 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?

 

Ÿ  

As the Trust and the benchmark index generated strong positive returns for the period, there were few detractors from relative performance. The Trust’s positioning with the health care providers & services industry hindered results due to an underweight allocation to managed health care companies and stock selection within health care services. The Trust’s option writing strategy had a negative impact on performance for the period.

 

Ÿ  

The key contributor to the Trust’s positive relative performance was an overweight allocation and strong stock selection in the biotechnology industry. Several biotechnology holdings generated particularly strong returns driven primarily by clinical developments such as favorable drug trial results, regulatory approvals and the swift adoption of new products in the market place. The Trust also benefited from stock selection within pharmaceuticals, where an underweight to poor-performing

   

Merck & Co, Inc. aided results, as did overweight positions in strong performers including Roche Holding AG, Valeant Pharmaceuticals International, Inc. and Shire PLC. Stock selection within the health care equipment & supplies industry contributed positively as well.

Describe recent portfolio activity.

 

Ÿ  

During the 12-month period, the Trust increased its overweight to biotechnology, while reducing its overweight to the health care providers & services industry with a focus on minimizing holdings with greater exposure to potential policy developments such as federal government budget reductions and subsequent health care reimbursement cuts. The Trust’s exposures to the pharmaceuticals and health care equipment & supplies industries remained generally unchanged over the period.

Describe portfolio positioning at period end.

 

Ÿ  

As of period end, the Trust continued to maintain a focus on innovative companies that seek to satisfy an unmet health care need or enhance current products or services. As a result, the Trust’s largest industry allocations continued to be pharmaceuticals and biotechnology. While policy uncertainty has diminished with the expected implementation of Health Care Reform, changes are still taking place due to austerity measures unfolding globally. As such, the Trust remained underweight in companies that would be at risk if government reimbursements were reduced. However, the new legislation is expected to benefit health care companies generally by creating increased consumer demand.

 

 

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, 2013     

Table of Contents
       BlackRock Health Sciences Trust   

 

Trust Information     

Symbol on NYSE

    BME

Initial Offering Date

    March 31, 2005

Current Distribution Rate on Closing Market Price as of October 31, 2013 ($33.56)1

    4.58%

Current Quarterly Distribution per Common Share2

    $0.384375

Current Annualized Distribution per Common Share2

    $1.537500

 

1

Current distribution rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a tax return of capital. See financial highlights for the actual sources and character of distributions. Past performance does not guarantee future results.

 

2

The quarterly distribution per common share, declared on December 9, 2013, was increased to $0.429975 per share. The current distribution rate 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.

 

Market Price and Net Asset Value Per Share Summary                                            
      10/31/13      10/31/12      Change     High      Low  

Market Price

    $ 33.56       $ 27.86         20.46 %    $ 34.97       $ 26.41   

Net Asset Value

    $ 34.92       $ 28.34         23.22 %    $ 35.43       $ 27.59   

 

Market Price and Net Asset Value History For the Past Five Years                         

 

 

LOGO

 

Overview of the Trust’s Long-Term Investments

 

Ten Largest Holdings    10/31/13

Johnson & Johnson

        5 %

Celgene Corp.

        5  

Amgen, Inc.

        4  

Gilead Sciences, Inc.

        4  

Bristol-Myers Squibb Co.

        4  

Pfizer, Inc.

        4  

AbbVie, Inc.

        3  

Roche Holding AG

        3  

Stryker Corp.

        3  

Medtronic, Inc.

        3  
Industry Allocation    10/31/13   10/31/12

Pharmaceuticals

        35 %       36 %

Biotechnology

        32         22  

Health Care Equipment & Supplies

        16         13  

Health Care Providers & Services

        11         20  

Life Sciences Tools & Services

        4         6  

Other3

        2         3  

 

3

Other includes a 1% holding or less in each of the following industries; for 10/31/13, Diversified Consumer Services and Health Care Technology, and 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 the investment advisor. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

 

 

     ANNUAL REPORT    OCTOBER 31, 2013    19

Table of Contents
Trust Summary as of October 31, 2013      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?

 

Ÿ  

For the 12-month period ended October 31, 2013, the Trust returned 19.86% based on market price and 19.25% based on NAV. For the same period, the MSCI All Country World Index ex-US returned 20.29%. 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?

 

Ÿ  

The Trust’s allocation to cash during a period of strong, rising equity markets was the largest detractor from performance relative to the benchmark index, which has no cash component. From a sector perspective, positioning within materials hindered results due to the Trust’s exposures to gold miners and industrial-related metals as these companies suffered the impact of falling commodities prices during the period.

 

Ÿ  

Contributing positively to the Trust’s performance was favorable stock selection across nine of the ten sectors in the benchmark index, most notably within financials, industrials and health care. In financials, the Trust’s holdings in European asset managers benefited from net new investor inflows and the recent positive performance of financial markets. Within industrials, positioning in companies such as Kubota and

   

Hino Motors benefited from Japan’s aggressive reflationary policies. In health care, notable performance came from Roche Holding AG driven by its robust oncology pipeline. Gains from the Trust’s option writing strategy had a positive impact on performance for the period.

Describe recent portfolio activity.

 

Ÿ  

During the 12-month period, the Trust reduced exposure to defensive-oriented areas such as utilities and consumer staples due to concerns about the potential negative impact of rising interest rates on these sectors. These reductions funded increased allocations to the industrials and consumer discretionary sectors, adding particularly to holdings deemed likely to benefit from a recovery in European economic growth. On a regional basis, the Trust reduced exposure to emerging markets and added to developed Europe.

Describe portfolio positioning at period end.

 

Ÿ  

At period end, the Trust’s positioning reflected a positive outlook for the world economy. The Trust’s regional positioning was consistent with the view that Europe and Japan look the most attractive given their improving growth dynamics in addition to the recent outperformance of developed versus emerging markets. However, the Trust continued to explore and identify emerging market opportunities, albeit on tactical basis given the ongoing structural challenges faced by many of these countries.

 

 

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, 2013     

Table of Contents
       BlackRock International Growth and Income Trust   

 

Trust Information     

Symbol on NYSE

    BGY

Initial Offering Date

    May 30, 2007

Current Distribution Rate on Closing Market Price as of October 31, 2013 ($8.14)1

    8.25%

Current Quarterly Distribution per Common Share2

    $0.16785

Current Annualized Distribution per Common Share2

    $0.67140

 

1

Current distribution rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a tax return of capital. See financial highlights for the actual sources and character of distributions. 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.

 

Market Price and Net Asset Value Per Share Summary                                            
      10/31/13      10/31/12      Change     High      Low  

Market Price

    $ 8.14       $ 7.41         9.85 %    $ 8.14       $ 6.85   

Net Asset Value

    $ 9.05       $ 8.28         9.30 %    $ 9.19       $ 8.01   

 

Market Price and Net Asset Value History For the Past Five Years                         

 

LOGO

 

Overview of the Trust’s Long-Term Investments

 

Ten Largest Holdings    10/31/13

Novartis AG

        3 %

Roche Holding AG

        2  

SoftBank Corp.

        2  

Anheuser-Busch InBev NV

        2  

BNP Paribas SA

        2  

Crest Nicholson Holdings PLC

        2  

Daimler AG

        2  

Toyota Motor Corp.

        2  

APR Energy PLC

        2  

Svenska Cellulosa AB, B Shares

        2  
Geographic Allocation    10/31/13   10/31/12

United Kingdom

        20 %       25 %

France

        15         7  

Japan

        10         6  

Switzerland

        9         11  

Germany

        5         6  

Netherlands

        4         2  

Ireland

        4         2  

Spain

        4         2  

Other3

        29         39  
3

Other includes a 4% holding or less in each of the following countries; Sweden, Hong Kong, China, Belgium, Italy, Russia, Norway, Mexico, Brazil, Singapore, Canada, Australia, Austria, Indonesia, South Korea, Thailand, New Zealand, Taiwan, Cyprus, United States, Malaysia, India, Jersey, Channel Islands, Finland, Cayman Islands, South Africa, Israel, Argentina and Gibralter.

 

 

     ANNUAL REPORT    OCTOBER 31, 2013    21

Table of Contents
Trust Summary as of October 31, 2013      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?

 

Ÿ  

For the 12-month period ended October 31, 2013, the Trust returned (3.75)% based on market price and 1.81% based on NAV. For the same period, the closed-end Lipper Natural Resources Funds category posted an average return of 9.25% based on market price and 14.45% 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?

 

Ÿ  

Detracting from performance was the Trust’s exposure to mining, where positions in precious metals stocks particularly hurt results. Investor caution over growth in China and disappointing company earnings results (including asset write downs from a number of major miners) weighed on the mining space. Gold and precious metals producers including Newcrest Mining Ltd., Goldcorp, Inc. and Eldorado Gold Corp. were among the weakest performers. Stock selection within chemicals, specifically fertilizers & agricultural chemicals, also had a negative impact on results with especially poor performance from Potash Corp of Saskatchewan, Inc. and Agrium, Inc.

 

Ÿ  

Exposure to oil & gas exploration & production companies, one of the Trust’s largest industry allocations, was the primary driver of positive returns for the period. The strong performance of this industry was supported by a series of promising results from drilling in the Utica and Marcellus shale regions as well as the Permian basin. Holdings in U.S.-

   

based companies Pioneer Natural Resources Co., Gulfport Energy Corp., and EQT Corp. were among the Trust’s strongest individual performers. Noble Energy, Inc. performed particularly well due to continuous news flow regarding the company’s development project in the United States. The Trust also benefited from its exposure to the diversified chemicals sub-industry, with E.I. du Pont de Nemours & Co. posting strong gains for the period. The Trust’s high-conviction holdings within the industrial gases, paper products and paper packaging sub-industries generated positive returns. Gains from the Trust’s option writing strategy had a positive impact on performance for the period.

Describe recent portfolio activity.

 

Ÿ  

During the 12-month period, the Trust initiated metals & mining positions in Nevsun Resources Ltd., Lundin Mining Corp. and New Gold, Inc. and exited a position in Harry Winston Diamond Corp. The Trust reduced the number of stocks held in energy, consolidating around its high-conviction positions while paring down its exposures to coal and oil & gas services. There were no significant positioning changes in basic materials given the long-term nature of the investment advisor’s outlook for this segment.

Describe portfolio positioning at period end.

 

Ÿ  

As of period end, the Trust held its largest exposures in metals & mining and energy stocks, with a smaller allocation to basic materials companies. This positioning reflects the relative outlooks and valuations for each of these 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.

 

22    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
       BlackRock Real Asset Equity Trust   

 

Trust Information     

Symbol on NYSE

    BCF

Initial Offering Date

    September 29, 2006

Current Distribution Rate on Closing Market Price as of October 31, 2013 ($9.12)1

    9.71%

Current Quarterly Distribution per Common Share2

    $0.2215

Current Annualized Distribution per Common Share2

    $0.8860

 

1

Current distribution rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a tax return of capital. See financial highlights for the actual sources and character of distributions. Past performance does not guarantee future results.

 

2

The quarterly distribution per common share, declared on December 9, 2013, was decreased to $0.1748 per share. The current distribution rate 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.

 

Market Price and Net Asset Value Per Share Summary                                            
      10/31/13      10/31/12      Change     High      Low  

Market Price

    $ 9.12       $ 10.39         (12.22 )%    $ 10.85       $ 8.39   

Net Asset Value

    $ 10.24       $ 11.03         (7.16 )%    $ 11.35       $ 9.21   

 

Market Price and Net Asset Value History For the Past Five Years                         

 

 

LOGO

 

Overview of the Trust’s Long-Term Investments

 

Ten Largest Holdings    10/31/13

Rio Tinto PLC.

        4 %

BHP Billiton PLC

        4  

EI du Pont de Nemours & Co.

        4  

Praxair, Inc.

        4  

Glencore Xstrata PLC

        3  

Caterpillar, Inc.

        3  

Chevron Corp.

        3  

International Paper Co.

        3  

Exxon Mobil Corp.

        3  

MeadWestvaco Corp.

        3  
Industry Allocation    10/31/13   10/31/12

Metals & Mining

        36 %       43 %

Oil, Gas & Consumable Fuels

        30         27  

Chemicals

        15         13  

Energy Equipment & Services

        6         5  

Machinery

        4         4  

Paper & Forest Products

        4         6  

Containers & Packaging

        3         —  

Real Estate Investment Trusts (REITs)

        2         2  

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 the investment advisor. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

 

 

     ANNUAL REPORT    OCTOBER 31, 2013    23

Table of Contents
Trust Summary as of October 31, 2013      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?

 

Ÿ  

For the 12-month period ended October 31, 2013, the Trust returned (9.19)% based on market price and (3.61)% based on NAV. For the same period, the closed-end Lipper Natural Resources Funds category posted an average return of 9.25% based on market price and 14.45% 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?

 

Ÿ  

Detracting from performance was the Trust’s exposure to mining, where positions in precious metals stocks particularly hurt results. Investor caution over growth in China and disappointing company earnings results, including asset write-downs from a number of major miners, weighed on the mining space. Gold and precious metals producers including Goldcorp, Inc., Silver Wheaton Corp. and Eldorado Gold Corp. were among the weaker performers held in the Trust.

 

Ÿ  

Conversely, exposure to US energy stocks proved beneficial as optimism around the economic recovery helped create momentum for the sector. The Trust’s holdings in the integrated oil & gas and oil & gas exploration

   

& production sub-industries performed especially well, with names including Hess Corp. and ConocoPhillips adding significantly to returns. Additional positive performance came from the Trust’s exposure to agriculture, where Archer-Daniels-Midland Co. posted strong gains driven by expectations for a record-breaking corn crop in 2013. Gains from the Trust’s option writing strategy added to performance for the period.

Describe recent portfolio activity.

 

Ÿ  

During the 12-month period, the Trust added an allocation to agriculture in order to broaden exposure to the overall natural resources space. In the mining sleeve of the portfolio, the Trust reduced small-cap exposure in order to minimize funding risk. In addition, the Trust reduced its weighting in precious metals while increasing exposure to copper and bulk commodities. Within energy, the Trust reduced the number of holdings, partly through selling some of its exposure to coal, and increased its weighting in large-cap integrated oil & gas companies.

Describe portfolio positioning at period end.

 

Ÿ  

As of period end, the Trust’s largest allocation was the energy sector, while the remaining exposure was divided broadly between metals & mining and agriculture stocks. This positioning reflects the relative outlooks and valuations for each of these 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.

 

24    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
     BlackRock Resources & Commodities Strategy Trust

 

Trust Information     

Symbol on NYSE

    BCX

Initial Offering Date

    March 30, 2011

Current Distribution Rate on Closing Market Price as of October 31, 2013 ($11.68)1

    9.93%

Current Quarterly Distribution per Common Share2

    $0.29

Current Annualized Distribution per Common Share2

    $1.16

 

1

Current distribution rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a tax return of capital. See financial highlights for the actual sources and character of distributions. Past performance does not guarantee future results.

 

2

The quarterly distribution per common share, declared on December 9, 2013, was decreased to $0.2312 per share. The current distribution rate 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.

 

Market Price and Net Asset Value Per Share Summary                                            
      10/31/13      10/31/12      Change     High      Low  

Market Price

    $ 11.68       $ 14.12         (17.28 )%    $ 14.32       $ 10.65   

Net Asset Value

    $ 13.54       $ 15.42         (12.19 )%    $ 15.54       $ 12.57   

 

Market Price and Net Asset Value History Since Inception                         

 

 

LOGO

 

  3 

Commencement of operations.

 

Overview of the Trust’s Long-Term Investments

 

Ten Largest Holdings    10/31/13

Chevron Corp.

        7 %

Exxon Mobil Corp.

        7  

ConocoPhillips

        5  

Monsanto Co.

        4  

BHP Billiton Ltd. - ADR

        4  

Syngenta AG

        4  

Royal Dutch Shell PLC - ADR

        4  

BP PLC - ADR

        4  

Rio Tinto PLC - ADR

        3  

Southwestern Energy Co.

        3  
Industry Allocation    10/31/13   10/31/12

Oil, Gas & Consumable Fuels

        52 %       37 %

Metals & Mining

        21         33  

Chemicals

        15         21  

Food Products

        6         3  

Machinery

        5         4  

Real Estate Investment Trusts (REITS)

        1         —  

Energy Equipment & Services

        —         2  

For Trust compliance purposes, the Trust 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 the investment advisor. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

 

 

     ANNUAL REPORT    OCTOBER 31, 2013    25

Table of Contents
Trust Summary as of October 31, 2013      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?

 

Ÿ  

For the 12-month period ended October 31, 2013, the Trust returned 4.37% based on market price and 11.18% based on NAV. For the same period, the closed-end Lipper Utility Funds category posted an average return of 10.94% based on market price and 16.90% 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?

 

Ÿ  

The Trust benefited from its large allocations to the multi-utilities and electric utilities industries (with each industry representing approximately 20% of the Trust’s net assets). Also contributing positively was a large allocation to the oil, gas & consumable fuels industry, which was comprised largely of master limited partnership (“MLP”) positions. The Trust’s exposure to the diversified telecommunication services industry was another substantial driver of performance during the period. Gains from the Trust’s option writing strategy had a positive impact on performance for the period.

 

Ÿ  

Detracting from performance was the Trust’s small exposure to metals & mining, which was among the weaker-performing industries during the period.

Describe recent portfolio activity.

 

Ÿ  

The Trust is structured around long-term themes and turnover remains low; however, there were some changes during the period. The Trust reduced exposure to Brazil, particularly in electric utilities and toll roads. The investment advisor continues to believe the long-horizon investment theme for Brazil remains intact, however, concerns about near-term political issues potentially having a negative impact on earnings growth

   

and cash flow was the rationale behind the sale of several Brazilian holdings during the period. In many cases, proceeds from these sales were used to increase existing allocations to higher-quality domestic utilities, such as NextEra Energy, Inc. and Duke Energy Corp., given their financial strength. Within the utilities sector, there has been a widening gap between companies able to confidently present growth and capital expenditure plans for the future and those that cannot. The Trust maintained a preference for the former, which is the structural reason behind many of the portfolio changes during the period.

Describe Trust positioning at period end.

 

Ÿ  

Although U.S.-based utilities and MLPs have come under some near-term pressure as a result of rising interest rates, the investment advisor continues to believe that investment fundamentals in both industries remain intact. As of period end, the Trust’s U.S. utilities exposure continued to emphasize companies that demonstrate strong growth in earnings and dividends driven by their investment in core infrastructure projects such as improving electric transmission and distribution. The Trust also continued to identify attractive valuations in Europe. As fiscal policy uncertainty abated, regulated corporations have turned their focus toward cost-cutting and placing their firms in a strong financial position in anticipation of an improving local economy. With respect to construction/infrastructure companies, airports have shown continued signs of traffic growth and traffic volume on toll roads has stabilized. As such, the investment advisor has become more optimistic about finding opportunities in the transportation infrastructure industry, an area in which the Trust has normally limited its exposure. The Trust continued to limit its level of investment in ports given their high correlation with economic growth in both export and import countries.

 

 

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, 2013     

Table of Contents
     BlackRock Utility and Infrastructure Trust

 

Trust Information     

Symbol on NYSE

    BUI

Initial Offering Date

    November 25, 2011

Current Distribution Rate on Closing Market Price as of October 31, 2013 ($18.36)1

    7.90%

Current Quarterly Distribution per Common Share2

    $0.3625

Current Annualized Distribution per Common Share2

    $1.4500

 

1

Current distribution rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a tax return of capital. See financial highlights for the actual sources and character of distributions. 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.

 

Market Price and Net Asset Value Per Share Summary                                            
      10/31/13      10/31/12      Change     High      Low  

Market Price

    $ 18.36       $ 19.03         (3.52 )%    $ 20.00       $ 16.75   

Net Asset Value

    $ 20.78       $ 20.22         2.77 %    $ 21.48       $ 18.87   

 

Market Price and Net Asset Value History Since Inception                         

 

 

LOGO

 

  3 

Commencement of operations.

 

Overview of the Trust’s Long-Term Investments

 

Ten Largest Holdings    10/31/13

NextEra Energy, Inc.

        4 %

National Grid PLC

        4  

American Tower Corp.

        4  

Duke Energy Corp.

        3  

CMS Energy Corp.

        3  

Dominion Resources, Inc.

        3  

Verizon Communications, Inc.

        3  

Abertis Infraestructuras SA

        2  

American Water Works Co., Inc.

        2  

Enterprise Products Partners LP

        2  
Industry Allocation    10/31/13   10/31/12

Oil, Gas & Consumable Fuels

        22 %       9 %

Multi-Utilities

        20         20  

Electric Utilities

        17         26  

Transportation Infrastructure

        13         8  

Diversified Telecommunication Services

        7         13  

Water Utilities

        4         11  

Other4

        17         13  

 

4

Other includes a 4% holding or less in each of the following industries; Independent Power Producers & Energy Traders, Construction & Engineering, Real Estate Investment Trust (REITs), Media, Wireless Telecommunication Services, Gas Utilities and Machinery.

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 the investment advisor. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

 

 

     ANNUAL REPORT    OCTOBER 31, 2013    27

Table of Contents
Derivative Financial Instruments     

 

The Trusts may invest in various derivative financial instruments, including foreign currency exchange contracts and options, as specified in Note 4 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.

 

 

28    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments October 31, 2013      BlackRock Dividend Income Trust (BQY)   
     (Percentages shown are based on Net Assets)   

 

Common Stocks    Shares      Value  

Aerospace & Defense — 2.4%

      

Honeywell International, Inc.

      12,000       $ 1,040,760   

United Technologies Corp. (a)

      9,700         1,030,625   
     

 

 

  
                2,071,385   

Beverages — 1.9%

      

The Coca-Cola Co.

      22,200         878,454   

PepsiCo, Inc. (a)

      7,800         655,902   

Treasury Wine Estates Ltd.

      35,566         157,950   
     

 

 

  
                1,692,306   

Capital Markets — 1.0%

      

The Goldman Sachs Group, Inc.

      2,700         434,322   

T Rowe Price Group, Inc. (a)

      5,900         456,719   
     

 

 

  
                891,041   

Chemicals — 2.9%

      

BASF SE

      9,900         1,027,768   

PPG Industries, Inc. (a)

      6,200         1,131,996   

Solvay SA

      2,300         359,636   
     

 

 

  
                2,519,400   

Commercial Banks — 8.1%

      

Australia & New Zealand Banking Group Ltd.

      18,200         582,408   

Bank of Nova Scotia (a)

      12,200         741,724   

Hang Seng Bank Ltd.

      17,500         291,685   

HSBC Holdings PLC — ADR (a)

      24,100         1,326,464   

M&T Bank Corp. (a)

      4,500         506,385   

National Australia Bank Ltd.

      32,300         1,079,497   

U.S. Bancorp (a)

      22,800         851,808   

United Overseas Bank Ltd.

      18,310         306,630   

Wells Fargo & Co. (a)

      31,200         1,331,928   
     

 

 

  
                7,018,529   

Construction & Engineering — 0.9%

      

Vinci SA

      12,100         774,236   

Consumer Finance — 0.7%

      

American Express Co. (a)

      7,000         572,600   

Distributors — 0.6%

      

Genuine Parts Co. (a)

      6,200         488,746   

Diversified Financial Services — 0.3%

      

Bank of America Corp. (a)

      17,800         248,488   

Diversified Telecommunication Services — 5.9%

      

AT&T Inc. (a)

      65,150         2,358,430   

Frontier Communications Corp.

      201,800         889,938   

TeliaSonera AB

      53,400         441,564   

Verizon Communications, Inc. (a)

      29,100         1,469,841   
     

 

 

  
                5,159,773   
Common Stocks    Shares      Value  

Electric Utilities — 2.9%

      

Duke Energy Corp. (a)

      5,200       $ 372,996   

Iberdrola SA

      2,430         15,253   

NextEra Energy, Inc. (a)

      15,800         1,339,050   

SSE PLC

      35,000         793,987   
     

 

 

  
                2,521,286   

Electrical Equipment — 2.1%

      

Emerson Electric Co. (a)

      27,200         1,821,584   

Food & Staples Retailing — 0.8%

      

Wal-Mart Stores, Inc. (a)

      9,014         691,825   

Food Products — 4.3%

      

General Mills, Inc. (a)

      35,800         1,805,036   

Kraft Foods Group, Inc.

      9,933         540,156   

Mondelez International, Inc., Class A (a)

      29,700         999,108   

Nestle SA

      5,800         418,667   
     

 

 

  
                3,762,967   

Health Care Equipment & Supplies — 0.5%

      

Abbott Laboratories (a)

      11,100         405,705   

Hotels, Restaurants & Leisure — 1.4%

      

McDonald’s Corp. (a)

      13,000         1,254,760   

Household Products — 1.5%

      

The Procter & Gamble Co. (a)

      16,000         1,292,000   

Industrial Conglomerates — 4.5%

      

3M Co. (a)

      11,900         1,497,615   

General Electric Co. (a)

      54,600         1,427,244   

Keppel Corp. Ltd.

      53,800         469,476   

Siemens AG — ADR (a)

      4,000         512,040   
     

 

 

  
                3,906,375   

Insurance — 5.4%

      

Aflac, Inc. (a)

      7,100         461,358   

Allianz SE

      3,700         621,242   

The Chubb Corp. (a)

      9,700         893,176   

Cincinnati Financial Corp. (a)

      11,600         580,000   

MetLife, Inc. (a)

      7,000         331,170   

Prudential Financial, Inc. (a)

      18,800         1,530,132   

Zurich Insurance Group AG

      1,126         311,140   
     

 

 

  
                4,728,218   

IT Services — 1.2%

      

Automatic Data Processing, Inc. (a)

      13,700         1,027,089   

Leisure Equipment & Products — 0.6%

      

Mattel, Inc. (a)

      12,100         536,877   
 
Portfolio Abbreviations        
To simplify the listings of portfolio holdings in the Schedule of Investments, the names and descriptions of many of the securities have been abbreviated according to the following list:  

ADR     American Depositary Receipt

  

JPY      Japanese Yen

 

AUD     Australian Dollar

  

KRW    Korean Won

 

BRL     Brazil Real

  

MXN    Mexican New Peso

 

CAD     Canadian Dollar

  

NOK    Norwegian Krone

 

CHF     Swiss Franc

  

PEN     Peruvian Neuvo Sol

 

CLP     Chilean Peso

  

REIT    Real Estate Investment Trust

 

DKK     Danish Krone

  

SEK     Swedish Krona

 

EUR     Euro

  

SGD     Singapore Dollar

 

GBP     British Pound

  

TWDT   aiwan Dollar

 

GDR    Global Depositary Receipts

  

USD     US Dollar

 

HKD     Hong Kong Dollar

  

ZAR     South African Rand

 

ILS       Israeli Shekel

  

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    29

Table of Contents
Schedule of Investments (continued)      BlackRock Dividend Income Trust (BQY)   
     (Percentages shown are based on Net Assets)   

 

Common Stocks    Shares      Value  

Machinery — 0.9%

      

Scania AB, B Shares

      37,400       $ 749,619   

Media — 2.1%

      

The Walt Disney Co. (a)

      26,800         1,838,212   

Metals & Mining — 1.1%

      

BHP Billiton Ltd. — ADR (a)

      8,012         566,368   

BHP Billiton PLC

      14,150         436,651   
     

 

 

  
                1,003,019   

Multi-Utilities — 3.7%

      

Ameren Corp. (a)

      23,300         842,994   

Dominion Resources, Inc. (a)

      24,300         1,549,125   

Sempra Energy

      4,800         437,472   

Wisconsin Energy Corp.

      8,300         349,513   
     

 

 

  
                3,179,104   

Office Electronics — 0.5%

      

Canon, Inc. — ADR

      3,700         116,809   

Ricoh Co. Ltd.

      33,000         348,507   
     

 

 

  
                465,316   

Oil, Gas & Consumable Fuels — 10.7%

      

Chevron Corp. (a)

      16,600         1,991,336   

Enbridge, Inc.

      25,000         1,083,777   

Exxon Mobil Corp. (a)

      28,200         2,527,284   

Royal Dutch Shell PLC — ADR (a)

      6,850         456,621   

Santos Ltd.

      66,600         953,184   

Suncor Energy, Inc. (a)

      3,550         129,007   

Total SA — ADR (a)

      28,000         1,713,040   

TransCanada Corp. (a)

      10,900         491,240   
     

 

 

  
                9,345,489   

Pharmaceuticals — 10.3%

      

AbbVie, Inc. (a)

      10,487         508,095   

AstraZeneca PLC

      17,700         937,049   

Bristol-Myers Squibb Co. (a)

      36,100         1,895,972   

GlaxoSmithKline PLC

      32,425         854,807   

Johnson & Johnson

      16,100         1,491,021   

Merck & Co., Inc. (a)

      18,100         816,129   

Pfizer, Inc. (a)

      51,100         1,567,748   

Sanofi

      3,400         362,520   

Takeda Pharmaceutical Co. Ltd.

      11,100         528,966   
     

 

 

  
                8,962,307   

Real Estate Investment Trusts (REITs) — 3.2%

      

Equity Residential (a)

      11,000         575,960   

HCP, Inc.

      12,000         498,000   

Health Care REIT, Inc. (a)

      10,700         693,895   

Keppel REIT

      15,824         15,414   

Liberty Property Trust

      7,400         275,206   

Ventas, Inc.

      11,213         731,536   
     

 

 

  
                2,790,011   

Real Estate Management & Development — 0.3%

  

Hopewell Holdings Ltd.

      86,684         291,927   
Common Stocks    Shares      Value  

Semiconductors & Semiconductor Equipment — 2.2%

  

Intel Corp. (a)

      43,400       $ 1,060,262   

Microchip Technology, Inc. (a)

      20,200         867,792   
     

 

 

  
                1,928,054   

Software — 2.5%

      

Microsoft Corp. (a)

      38,000         1,343,300   

Oracle Corp. Japan

      9,600         379,044   

SAP AG — ADR (a)

      5,650         442,677   
     

 

 

  
                2,165,021   

Specialty Retail — 2.9%

      

Hennes & Mauritz AB, B Shares

      22,000         950,661   

The Home Depot, Inc. (a)

      19,900         1,550,011   
     

 

 

  
                2,500,672   

Thrifts & Mortgage Finance — 0.3%

      

Hudson City Bancorp, Inc.

      25,800         231,684   

Tobacco — 4.9%

      

Altria Group, Inc. (a)

      41,700         1,552,491   

British American Tobacco PLC

      17,300         954,488   

Philip Morris International, Inc. (a)

      11,900         1,060,528   

Reynolds American, Inc. (a)

      12,800         657,536   
     

 

 

  
                4,225,043   

Wireless Telecommunication Services — 0.0%

  

Mobistar SA

      1,500         26,001   

Total Long-Term Investments

(Cost — $75,056,557) — 95.5%

               83,086,669   
     
Short-Term Securities                

BlackRock Liquidity Funds, TempFund, Institutional
Class, 0.03% (b)(c)

      3,708,345         3,708,345   

Total Short-Term Securities

(Cost — $3,708,345) — 4.3%

               3,708,345   
     
Options Purchased                

(Cost — $149) — 0.0%

               93   

Total Investments Before Options Written

(Cost — $78,765,051) — 99.8%

               86,795,107   
     
Options Written                

(Premiums Received — $543,360) — (1.1)%

               (928,492 ) 

Total Investments Net of Options Written — 98.7%

         85,866,615   

Other Assets Less Liabilities — 1.3%

         1,116,734   
     

 

 

  

Net Assets — 100.0%

       $ 86,983,349   
     

 

 

  
 
Notes to Schedule of Investments

 

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

 

(b) Represents the current yield as of report date.

 

See Notes to Financial Statements.

 

30    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (continued)      BlackRock Dividend Income Trust (BQY)   

 

 

(c) Investments in issuers considered to be an affiliate of the Trust during the year ended October 31, 2013, 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, 2012		     

Net

Activity

      Shares Held at
October 31, 2013		      Income     

Realized

Gain

  

BlackRock Liquidity Funds, TempFund, Institutional Class

      2,623,356         1,084,989         3,708,345       $ 2,852       $ 19   

 

• 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 the investment advisor. These definitions may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease.

 

• Foreign currency exchange contracts as of October 31, 2013 were as follows:

 

Currency

Purchased

             

Currency

Sold

     Counterparty   Settlement
Date		        Unrealized
Depreciation		  
USD      6,147        CAD           6,429      Deutsche Bank AG     11/01/13         $ (19 ) 

 

• Exchange-traded options purchased as of October 31, 2013 were as follows:

 

Description   

Put/

Call

     

Strike

Price

      Expiration
Date		      Contracts     

Market

Value

  

International Business Machines Corp.

      Call         USD         190.00         11/01/13         37       $ 93   

 

• Exchange-traded options written as of October 31, 2013 were as follows:

 

Description    Put/
Call		     

Strike

Price

    Expiration
Date		      Contracts      Market
Value		  

Chevron Corp.

      Call       USD    123.00      11/01/13         13       $ (91 ) 

International Business Machines Corp.

      Call       USD    195.00      11/01/13         18         (54 ) 

McDonald’s Corp.

      Call       USD    99.00      11/01/13         17         (34 ) 

3M Co.

      Call       USD    118.00      11/04/13         24         (19,020 ) 

3M Co.

      Call       USD    121.00      11/04/13         24         (11,940 ) 

Bristol-Myers Squibb Co.

      Call       USD    47.00      11/04/13         72         (39,960 ) 

Bristol-Myers Squibb Co.

      Call       USD    47.50      11/04/13         72         (36,180 ) 

Pfizer, Inc.

      Call       USD    29.00      11/04/13         7         (1,194 ) 

Pfizer, Inc.

      Call       USD    29.50      11/04/13         20         (2,400 ) 

The Procter & Gamble Co.

      Call       USD    78.00      11/04/13         17         (4,777 ) 

Siemens AG — ADR

      Call       USD    124.00      11/04/13         16         (6,574 ) 

United Technologies Corp.

      Call       USD    106.00      11/04/13         21         (1,144 ) 

Wal-Mart Stores, Inc.

      Call       USD    76.00      11/04/13         35         (2,888 ) 

Wells Fargo & Co.

      Call       USD    42.50      11/04/13         69         (1,863 ) 

Wells Fargo & Co.

      Call       USD    43.00      11/04/13         14         (56 ) 

Ameren Corp.

      Call       USD    34.00      11/05/13         93         (20,281 ) 

HSBC Holdings PLC — ADR

      Call       USD    56.00      11/06/13         96         (1,375 ) 

Cincinnati Financial Corp.

      Call       USD    47.50      11/07/13         46         (11,517 ) 

Emerson Electric Co.

      Call       USD    66.50      11/07/13         108         (10,662 ) 

Reynolds American, Inc.

      Call       USD    50.50      11/07/13         51         (5,784 ) 

Exxon Mobil Corp.

      Call       USD    88.00      11/08/13         28         (5,278 ) 

General Mills, Inc.

      Call       USD    49.25      11/16/13         143         (19,828 ) 

The Walt Disney Co.

      Call       USD    65.50      11/16/13         107         (38,459 ) 

Abbott Laboratories

      Call       USD    38.00      11/18/13         44         (286 ) 

AbbVie, Inc.

      Call       USD    47.50      11/18/13         41         (6,150 ) 

Aflac, Inc.

      Call       USD    62.50      11/18/13         28         (7,476 ) 

AT&T Inc.

      Call       USD    35.00      11/18/13         150         (20,175 ) 

Automatic Data Processing, Inc.

      Call       USD    75.00      11/18/13         54         (4,320 ) 

Bank of America Corp.

      Call       USD    15.00      11/18/13         36         (90 ) 

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    31

Table of Contents
Schedule of Investments (continued)      BlackRock Dividend Income Trust (BQY)   

 

 

• Exchange-traded options written as of October 31, 2013 were as follows: (continued)

 

Description    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Bank of Nova Scotia

      Call         CAD         60.00         11/18/13         49       $ (16,096 ) 

BHP Billiton Ltd. — ADR

      Call         USD         70.00         11/18/13         32         (4,880 ) 

The Chubb Corp.

      Call         USD         90.00         11/18/13         26         (6,877 ) 

Dominion Resources, Inc.

      Call         USD         62.50         11/18/13         97         (18,430 ) 

Equity Residential

      Call         USD         55.00         11/18/13         22         (275 ) 

Exxon Mobil Corp.

      Call         USD         90.00         11/18/13         56         (2,968 ) 

Genuine Parts Co.

      Call         USD         80.00         11/18/13         25         (1,750 ) 

Health Care REIT, Inc.

      Call         USD         65.00         11/18/13         42         (2,940 ) 

The Home Depot, Inc.

      Call         USD         77.50         11/18/13         39         (4,836 ) 

Intel Corp.

      Call         USD         24.00         11/18/13         33         (1,749 ) 

M&T Bank Corp.

      Call         USD         115.00         11/18/13         18         (810 ) 

Mattel, Inc.

      Call         USD         44.00         11/18/13         48         (3,840 ) 

Merck & Co., Inc.

      Call         USD         49.00         11/18/13         28         (42 ) 

Merck & Co., Inc.

      Call         USD         50.00         11/18/13         9         (27 ) 

MetLife, Inc.

      Call         USD         49.00         11/18/13         28         (476 ) 

Microchip Technology, Inc.

      Call         USD         42.00         11/18/13         80         (10,800 ) 

Microsoft Corp.

      Call         USD         34.00         11/18/13         38         (5,662 ) 

Microsoft Corp.

      Call         USD         35.00         11/18/13         57         (4,104 ) 

Mondelez International, Inc., Class A

      Call         USD         33.00         11/18/13         79         (9,085 ) 

Mondelez International, Inc., Class A

      Call         USD         34.00         11/18/13         40         (2,360 ) 

NextEra Energy, Inc.

      Call         USD         82.50         11/18/13         10         (2,775 ) 

NextEra Energy, Inc.

      Call         USD         85.00         11/18/13         21         (2,362 ) 

PepsiCo, Inc.

      Call         USD         80.00         11/18/13         31         (13,175 ) 

Philip Morris International, Inc.

      Call         USD         90.00         11/18/13         34         (1,989 ) 

The Procter & Gamble Co.

      Call         USD         80.00         11/18/13         47         (6,650 ) 

Prudential Financial, Inc.

      Call         USD         80.00         11/18/13         5         (1,270 ) 

Prudential Financial, Inc.

      Call         USD         82.50         11/18/13         15         (1,822 ) 

SAP AG — ADR

      Call         USD         77.50         11/18/13         22         (3,685 ) 

Suncor Energy, Inc.

      Call         CAD         38.00         11/18/13         14         (732 ) 

T Rowe Price Group, Inc.

      Call         USD         75.00         11/18/13         23         (6,497 ) 

Total SA — ADR

      Call         USD         60.00         11/18/13         112         (17,080 ) 

TransCanada Corp.

      Call         CAD         46.00         11/18/13         42         (5,096 ) 

U.S. Bancorp

      Call         USD         38.00         11/18/13         57         (741 ) 

United Technologies Corp.

      Call         USD         115.00         11/18/13         18         (36 ) 

Verizon Communications, Inc.

      Call         USD         47.00         11/18/13         29         (10,295 ) 

Verizon Communications, Inc.

      Call         USD         49.00         11/18/13         72         (12,204 ) 

Exxon Mobil Corp.

      Call         USD         90.00         11/22/13         28         (1,876 ) 

Pfizer, Inc.

      Call         USD         30.50         11/22/13         152         (6,384 ) 

PPG Industries, Inc.

      Call         USD         166.75         11/22/13         25         (40,523 ) 

U.S. Bancorp

      Call         USD         38.00         11/22/13         34         (714 ) 

Verizon Communications, Inc.

      Call         USD         50.00         11/22/13         15         (1,605 ) 

AT&T Inc.

      Call         USD         36.00         11/29/13         110         (7,700 ) 

Chevron Corp.

      Call         USD         121.00         11/29/13         53         (6,307 ) 

Intel Corp.

      Call         USD         24.50         11/29/13         107         (3,692 ) 

McDonald’s Corp.

      Call         USD         97.00         11/29/13         35         (3,150 ) 

General Electric Co.

      Call         USD         25.75         12/02/13         218         (15,934 ) 

Altria Group, Inc.

      Call         USD         36.00         12/23/13         84         (13,230 ) 

American Express Co.

      Call         USD         82.50         12/23/13         9         (1,642 ) 

Bank of America Corp.

      Call         USD         15.00         12/23/13         35         (332 ) 

Duke Energy Corp.

      Call         USD         72.50         12/23/13         20         (1,550 ) 

The Home Depot, Inc.

      Call         USD         77.50         12/23/13         41         (9,574 ) 

 

See Notes to Financial Statements.

 

32    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (continued)      BlackRock Dividend Income Trust (BQY)   

 

 

• Exchange-traded options written as of October 31, 2013 were as follows: (concluded)

 

Description    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Merck & Co., Inc.

      Call         USD         46.00         12/23/13         35       $ (1,750 ) 

NextEra Energy, Inc.

      Call         USD         87.50         12/23/13         21         (1,680 ) 

Philip Morris International, Inc.

      Call         USD         90.00         12/23/13         24         (3,444 ) 

Prudential Financial, Inc.

      Call         USD         85.00         12/23/13         55         (6,545 ) 

Royal Dutch Shell PLC — ADR

      Call         USD         70.00         12/23/13         27         (742 ) 

Total

                   $ (592,646 ) 
                 

 

 

  

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows:

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		    Contracts      Market
Value		  

Microsoft Corp.

    Citibank N.A.      Call         USD         34.23       11/04/13      5,700       $ (6,726 ) 

NextEra Energy, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         81.65       11/04/13      1,000         (3,107 ) 

Pfizer, Inc.

    Deutsche Bank AG      Call         USD         29.39       11/04/13      2,500         (3,274 ) 

Allianz SE

    UBS AG      Call         EUR         117.35       11/05/13      1,500         (12,953 ) 

AstraZeneca PLC

    Citibank N.A.      Call         GBP         32.52       11/05/13      7,100         (6,499 ) 

Hennes & Mauritz AB, B Shares

    Goldman Sachs International      Call         SEK         267.55       11/05/13      8,800         (17,243 ) 

Mobistar SA

    Morgan Stanley & Co. International PLC      Call         EUR         13.02       11/05/13      1,500         (315 ) 

Sanofi

    UBS AG      Call         EUR         74.03       11/05/13      1,400         (8,580 ) 

Zurich Insurance Group AG

    Goldman Sachs International      Call         CHF         238.37       11/05/13      450         (6,182 ) 

GlaxoSmithKline PLC

    Goldman Sachs International      Call         GBP         16.35       11/06/13      13,000         (3,527 ) 

Johnson & Johnson

    Credit Suisse International      Call         USD         89.62       11/06/13      3,200         (9,681 ) 

Nestle SA

    Bank of America N.A.      Call         CHF         63.83       11/06/13      2,300         (4,279 ) 

Hudson City Bancorp, Inc.

    Deutsche Bank AG      Call         USD         9.35       11/11/13      10,300         (122 ) 

Australia & New Zealand Banking Group Ltd.

    Morgan Stanley & Co. International PLC      Call         AUD         31.43       11/12/13      7,200         (16,548 ) 

HCP, Inc.

    Deutsche Bank AG      Call         USD         42.79       11/13/13      2,500         (545 ) 

Sempra Energy

    Deutsche Bank AG      Call         USD         91.50       11/20/13      1,900         (2,646 ) 

BHP Billiton PLC

    Citibank N.A.      Call         GBP         18.32       11/21/13      5,700         (9,321 ) 

British American Tobacco PLC

    Goldman Sachs International      Call         GBP         32.36       11/21/13      7,000         (24,142 ) 

Iberdrola SA

    Citibank N.A.      Call         EUR         4.53       11/21/13      2,400         (497 ) 

Honeywell International, Inc.

    Citibank N.A.      Call         USD         84.55       11/22/13      2,400         (5,756 ) 

Kraft Foods Group, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         53.61       11/22/13      3,900         (5,423 ) 

Altria Group, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         35.14       11/25/13      8,300         (18,384 ) 

American Express Co.

    Morgan Stanley & Co. International PLC      Call         USD         75.40       11/25/13      1,900         (12,831 ) 

Frontier Communications Corp.

    JPMorgan Chase Bank N.A.      Call         USD         4.36       11/25/13      80,700         (13,793 ) 

Wells Fargo & Co.

    Citibank N.A.      Call         USD         41.97       11/25/13      4,100         (3,649 ) 

HCP, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         43.30       12/02/13      2,300         (727 ) 

Johnson & Johnson

    Credit Suisse International      Call         USD         89.62       12/02/13      3,200         (9,560 ) 

Liberty Property Trust

    Morgan Stanley & Co. International PLC      Call         USD         36.24       12/02/13      2,900         (4,249 ) 

Hang Seng Bank Ltd.

    Citibank N.A.      Call         HKD         129.60       12/03/13      7,000         (1,518 ) 

Hopewell Holdings Ltd.

    UBS AG      Call         HKD         26.60       12/03/13      54,500         (2,435 ) 

Ricoh Co. Ltd.

    Citibank N.A.      Call         JPY         1,115.88       12/03/13      13,000         (1,626 ) 

Santos Ltd.

    Citibank N.A.      Call         AUD         15.04       12/03/13      26,600         (10,997 ) 

Takeda Pharmaceutical Co. Ltd.

    Citibank N.A.      Call         JPY         4,773.35       12/03/13      4,400         (3,269 ) 

Wisconsin Energy Corp.

    Credit Suisse International      Call         USD         40.84       12/03/13      3,300         (4,293 ) 

BASF SE

    Morgan Stanley & Co. International PLC      Call         EUR         71.66       12/04/13      3,900         (26,871 ) 

Enbridge, Inc.

    Citibank N.A.      Call         CAD         42.46       12/09/13      10,000         (26,279 ) 

Intel Corp.

    Citibank N.A.      Call         USD         23.38       12/09/13      3,300         (3,614 ) 

Solvay SA

    Morgan Stanley & Co. International PLC      Call         EUR         118.35       12/09/13      900         (2,390 ) 

Honeywell International, Inc.

    Citibank N.A.      Call         USD         84.55       12/10/13      2,400         (6,826 ) 

Scania AB, B Shares

    Goldman Sachs International      Call         SEK         139.39       12/10/13      14,900         (2,238 ) 

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    33

Table of Contents
Schedule of Investments (continued)      BlackRock Dividend Income Trust (BQY)   

 

 

• Over-the-counter options written as of October 31, 2013 were as follows: (concluded)

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		    Contracts      Market
Value		  

SSE PLC

    Deutsche Bank AG      Call         GBP         14.41       12/10/13      14,000       $ (4,464 ) 

TeliaSonera AB

    UBS AG      Call         SEK         53.30       12/12/13      21,300         (4,133 ) 

Vinci SA

    Deutsche Bank AG      Call         EUR         47.97       12/12/13      4,800         (4,175 ) 

Keppel Corp. Ltd.

    Citibank N.A.      Call         SGD         10.91       12/18/13      21,000         (2,806 ) 

National Australia Bank Ltd.

    Goldman Sachs International      Call         AUD         35.90       12/18/13      12,900         (2,717 ) 

Oracle Corp. Japan

    Citibank N.A.      Call         JPY         3,689.53       12/18/13      3,800         (10,410 ) 

Treasury Wine Estates Ltd.

    Goldman Sachs International      Call         AUD         4.78       12/18/13      14,200         (2,157 ) 

United Overseas Bank Ltd.

    UBS AG      Call         SGD         21.10       12/18/13      7,000         (2,069 ) 

Total

                      $ (335,846 ) 
                    

 

 

  

 

Ÿ  

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:

 

  Ÿ  

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

 

  Ÿ  

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)

 

  Ÿ  

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 fair value hierarchy classification 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, please refer to Note 2 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, 2013:

 

      Level 1      Level 2      Level 3      Total  

Assets:

            

Investments:

            

Long-Term Investments:

            

Common Stocks:

            

Aerospace & Defense

    $ 2,071,385         —         —       $ 2,071,385   

Beverages

      1,534,356       $ 157,950         —         1,692,306   

Capital Markets

      891,041         —         —         891,041   

Chemicals

      1,131,996         1,387,404         —         2,519,400   

Commercial Banks

      4,758,309         2,260,220         —         7,018,529   

Construction & Engineering

      —         774,236         —         774,236   

Consumer Finance

      572,600         —         —         572,600   

Distributors

      488,746         —         —         488,746   

Diversified Financial Services

      248,488         —         —         248,488   

Diversified Telecommunication Services

      4,718,209         441,564         —         5,159,773   

Electric Utilities

      1,712,046         809,240         —         2,521,286   

Electrical Equipment

      1,821,584         —         —         1,821,584   

Food & Staples Retailing

      691,825         —         —         691,825   

Food Products

      3,344,300         418,667         —         3,762,967   

Health Care Equipment & Supplies

      405,705         —         —         405,705   

Hotels, Restaurants & Leisure

      1,254,760         —         —         1,254,760   

Household Products

      1,292,000         —         —         1,292,000   

 

See Notes to Financial Statements.

 

34    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (concluded)      BlackRock Dividend Income Trust (BQY)   

 

      Level 1     Level 2     Level 3      Total  

Assets: (concluded)

          

Investments: (concluded)

          

Long-Term Investments: (concluded)

          

Common Stocks: (concluded)

          

Industrial Conglomerates

    $ 3,436,899      $ 469,476        —       $ 3,906,375   

Insurance

      3,795,836        932,382        —         4,728,218   

IT Services

      1,027,089        —        —         1,027,089   

Leisure Equipment & Products

      536,877        —        —         536,877   

Machinery

      —        749,619        —         749,619   

Media

      1,838,212        —        —         1,838,212   

Metals & Mining

      566,368        436,651        —         1,003,019   

Multi-Utilities

      3,179,104        —        —         3,179,104   

Office Electronics

      116,809        348,507        —         465,316   

Oil, Gas & Consumable Fuels

      8,392,305        953,184        —         9,345,489   

Pharmaceuticals

      6,278,965        2,683,342        —         8,962,307   

Real Estate Investment Trusts (REITs)

      2,790,011        —        —         2,790,011   

Real Estate Management & Development

      —        291,927        —         291,927   

Semiconductors & Semiconductor Equipment

      1,928,054        —        —         1,928,054   

Software

      1,785,977        379,044        —         2,165,021   

Specialty Retail

      1,550,011        950,661        —         2,500,672   

Thrifts & Mortgage Finance

      231,684        —        —         231,684   

Tobacco

      3,270,555        954,488        —         4,225,043   

Wireless Telecommunication Services

      —        26,001        —         26,001   

Short-Term Securities

      3,708,345        —        —         3,708,345   

Options Purchased

      93        —        —         93   

Total

    $ 71,370,544      $ 15,424,563        —       $ 86,795,107   
         
      Level 1     Level 2     Level 3      Total  

Derivative Financial Instruments1

          

Liabilities:

          

Equity contracts

    $ (421,711 )    $ (506,781 )      —       $ (928,492 ) 

Foreign currency exchange contracts

      (19 )      —        —         (19 ) 

Total

    $ (421,730 )    $ (506,781 )      —       $ (928,511 ) 

1    Derivative financial instruments are foreign currency exchange contracts and options written. Foreign currency exchange contracts are valued at the unrealized appreciation/ depreciation on the instrument and options written 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, 2013, foreign currency at value of $21,069 is categorized as level 1 within the disclosure hierarchy.

There were no transfers between Levels during the year ended October 31, 2013.

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    35

Table of Contents
Schedule of Investments October 31, 2013      BlackRock EcoSolutions Investment Trust (BQR)   
     (Percentages shown are based on Net Assets)   

 

Common Stocks    Shares      Value  

Auto Components — 1.1%

      

Johnson Controls, Inc. (a)

      26,300       $ 1,213,745   

Biotechnology — 1.2%

      

Novozymes A/S, B Shares

      36,300         1,421,707   

Building Products — 0.3%

      

Kingspan Group PLC

      23,600         398,652   

Chemicals — 18.3%

      

Agrium, Inc.

      29,100         2,482,812   

CF Industries Holdings, Inc. (a)

      9,350         2,015,860   

Incitec Pivot Ltd.

      264,200         664,710   

Israel Chemicals Ltd.

      90,000         744,056   

Johnson Matthey PLC

      42,704         2,056,902   

K+S AG

      19,000         482,785   

Monsanto Co.

      37,400         3,922,512   

The Mosaic Co.

      34,900         1,600,165   

Nufarm Ltd.

      58,160         268,209   

Potash Corp. of Saskatchewan, Inc.

      63,100         1,962,410   

Sinofert Holdings Ltd.

      2,165,500         351,609   

Syngenta AG

      7,700         3,107,849   

Umicore SA

      19,000         904,764   

Wacker Chemie AG

      5,400         507,105   
     

 

 

  
                21,071,748   

Commercial Services & Supplies — 2.5%

      

Tetra Tech, Inc. (b)

      80,600         2,106,078   

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

      2,007,000         812,916   
     

 

 

  
                2,918,994   

Construction & Engineering — 1.7%

      

Aegion Corp. (b)

      11,400         233,700   

Chicago Bridge & Iron Co. NV (a)

      3,062         226,863   

Layne Christensen Co. (a)(b)

      10,800         208,872   

Quanta Services, Inc. (a)(b)

      44,400         1,341,324   
     

 

 

  
                2,010,759   

Electric Utilities — 3.9%

      

Acciona SA

      3,800         240,892   

Iberdrola SA

      207,005         1,299,344   

ITC Holdings Corp. (a)

      4,800         482,832   

NextEra Energy, Inc. (a)

      20,500         1,737,375   

SSE PLC

      32,000         725,931   
     

 

 

  
                4,486,374   

Electrical Equipment — 3.7%

      

ABB Ltd.

      25,500         649,678   

Gamesa Corp. Tecnologica SA (b)

      40,100         387,251   

General Cable Corp.

      8,100         266,733   

Nordex SE (b)

      4,100         71,860   

Roper Industries, Inc.

      10,600         1,344,186   

Schneider Electric SA

      13,400         1,127,584   

Vestas Wind Systems A/S (b)

      17,500         468,945   
     

 

 

  
                4,316,237   

Electronic Equipment, Instruments & Components — 1.7%

  

Itron, Inc. (b)

      19,000         810,730   

Trimble Navigation Ltd. (a)(b)

      41,020         1,171,941   
     

 

 

  
                1,982,671   

Food Products — 12.3%

      

Agria Corp. — ADR (b)

      100,000         136,000   

Archer-Daniels-Midland Co. (a)

      33,700         1,378,330   

BrasilAgro — Co. Brasileira de Propriedades
Agricolas (b)

      525,200         2,367,878   

Bunge Ltd. (a)

      33,800         2,775,994   

Illovo Sugar Ltd.

      234,900         735,909   
Common Stocks    Shares      Value  

Food Products (concluded)

      

IOI Corp. Bhd

      533,333       $ 920,037   

Orkla ASA

      55,100         446,651   

Sao Martinho SA

      200,000         2,821,177   

SLC Agricola SA

      150,000         1,399,429   

SunOpta, Inc. (b)

      46,100         496,497   

Tyson Foods, Inc., Class A (a)

      16,800         464,856   

Wilmar International Ltd.

      80,000         222,523   
     

 

 

  
                14,165,281   

Independent Power Producers & Energy Traders — 0.9%

  

China Longyuan Power Group Corp., Series H

      225,000         258,868   

Enel Green Power SpA

      133,300         324,262   

Ormat Technologies, Inc.

      16,900         440,583   
     

 

 

  
                1,023,713   

Machinery — 11.2%

      

AGCO Corp.

      34,900         2,037,462   

CNH Industrial NV (b)

      99,528         1,167,463   

Deere & Co.

      24,100         1,972,344   

IDEX Corp. (a)

      9,550         660,382   

Kurita Water Industries Ltd.

      58,100         1,267,975   

Pall Corp. (a)

      9,700         781,044   

Pentair Ltd.

      19,800         1,328,382   

Watts Water Technologies, Inc., Class A (a)

      24,600         1,421,388   

Xylem, Inc.

      64,700         2,232,150   
     

 

 

  
                12,868,590   

Multi-Utilities — 2.7%

      

Hera SpA

      361,600         728,537   

Suez Environnement Co.

      9,925         173,066   

Veolia Environnement SA

      126,000         2,161,626   
     

 

 

  
                3,063,229   

Oil, Gas & Consumable Fuels — 3.1%

      

Cheniere Energy, Inc. (a)(b)

      6,000         238,800   

Cosan Ltd., Class A

      55,425         873,498   

Rentech, Inc.

      317,900         543,609   

Sasol Ltd.

      25,000         1,277,446   

Sasol Ltd. — ADR

      6,600         336,732   

TransCanada Corp. (a)

      7,500         338,009   
     

 

 

  
                3,608,094   

Paper & Forest Products — 0.3%

      

Fibria Celulose SA — ADR (b)

      19,000         247,950   

Precious Woods Holding AG (b)

      20,000         66,127   
     

 

 

  
                314,077   

Real Estate Investment Trusts (REITs) — 2.8%

  

Plum Creek Timber Co., Inc. (a)

      46,900         2,129,260   

Rayonier, Inc. (a)

      22,600         1,062,652   
     

 

 

  
                3,191,912   

Real Estate Management & Development — 0.4%

  

Cresud SACIF y A — ADR

      39,300         410,685   

Road & Rail — 0.4%

      

ALL — America Latina Logistica SA

      133,000         476,145   

Semiconductors & Semiconductor Equipment — 0.7%

  

First Solar, Inc. (a)(b)

      3,300         165,891   

REC Silicon ASA (b)

      22,700         11,304   

SunEdison, Inc. (a)(b)

      14,500         134,850   

Suntech Power Holdings Co. Ltd. — ADR (b)

      14,600         20,148   

Trina Solar Ltd. — ADR (a)(b)

      14,500         212,715   

Yingli Green Energy Holding Co. Ltd. — ADR (a)(b)

      38,200         229,200   
     

 

 

  
                774,108   
 

 

See Notes to Financial Statements.

 

36    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (continued)      BlackRock EcoSolutions Investment Trust (BQR)   
     (Percentages shown are based on Net Assets)   

 

Common Stocks    Shares      Value  

Water Utilities — 24.7%

      

American States Water Co.

      75,800       $ 2,158,784   

American Water Works Co., Inc.

      51,900         2,224,953   

Aqua America, Inc. (a)

      117,625         2,961,797   

Artesian Resources Corp., Class A

      37,200         851,880   

California Water Service Group

      89,100         1,942,380   

China Water Affairs Group Ltd.

      4,556,000         1,709,652   

Cia de Saneamento Basico do Estado de Sao Paulo

      105,000         1,112,713   

Cia de Saneamento de Minas Gerais — COPASA

      43,100         696,080   

Guangdong Investment Ltd.

      591,000         508,759   

Hyflux Ltd.

      749,000         698,483   

Inversiones Aguas Metropolitanas SA

      1,500,000         2,758,419   

Manila Water Co., Inc.

      5,610,000         3,244,246   

Pennon Group PLC

      215,200         2,349,970   

Severn Trent PLC

      113,500         3,387,969   

United Utilities Group PLC

      158,381         1,791,290   
     

 

 

  
                28,397,375   

Total Common Stocks — 93.9%

               108,114,096   
     
                  
Rights — 0.0%    Shares      Value  

Multi-Utilities — 0.0%

      

Hera SpA (b)

      361,600       $ 6,530   

Total Long-Term Investments

(Cost — $103,360,445) — 93.9%

               108,120,626   
     
Short-Term Securities                

BlackRock Liquidity Funds, TempFund, Institutional
Class, 0.03% (c)(d)

      7,688,865         7,688,865   

Total Short-Term Securities

(Cost — $7,688,865) — 6.7%

               7,688,865   

Total Investments Before Options Written

(Cost — $111,049,310) — 100.6%

               115,809,491   
     
Options Written                

(Premiums Received — $1,199,341) — (1.2)%

               (1,360,268 ) 

Total Investments Net of Options Written — 99.4%

         114,449,223   

Other Assets Less Liabilities — 0.6%

         688,417   
     

 

 

  

Net Assets — 100.0%

       $ 115,137,640   
     

 

 

  
 
Notes to Schedule of Investments

 

(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, 2013, 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, 2012		     

Net

Activity

    

Shares/Beneficial
Interest Held at

October 31, 2013

      Income     

Realized

Gain

  

BlackRock Liquidity Funds, TempFund, Institutional Class

      7,218,848         470,017        7,688,865       $ 6,505       $ 77   

BlackRock Liquidity Series, LLC Money Market Series

    $ 1,554,150       $ (1,554,150 )      —       $ 878         —   

 

Ÿ  

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 the investment advisor. These definitions may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease.

 

Ÿ  

Exchange-traded options written as of October 31, 2013 were as follows:

 

Description    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Rayonier, Inc.

      Call         USD         56.00         11/04/13         32       $ —   

Aqua America, Inc.

      Call         USD         25.00         11/18/13         180         (9,450 ) 

Bunge Ltd.

      Call         USD         82.50         11/18/13         125         (10,313 ) 

CF Industries Holdings, Inc.

      Call         USD         220.00         11/18/13         40         (12,500 ) 

Chicago Bridge & Iron Co. NV

      Call         USD         67.50         11/18/13         13         (8,710 ) 

IDEX Corp.

      Call         USD         65.00         11/18/13         42         (17,640 ) 

ITC Holdings Corp.

      Call         USD         95.00         11/18/13         21         (12,600 ) 

Johnson Controls, Inc.

      Call         USD         44.00         11/18/13         118         (29,205 ) 

NextEra Energy, Inc.

      Call         USD         82.50         11/18/13         23         (6,383 ) 

NextEra Energy, Inc.

      Call         USD         85.00         11/18/13         23         (2,588 ) 

Plum Creek Timber Co., Inc.

      Call         USD         49.00         11/18/13         106         (318 ) 

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    37

Table of Contents
Schedule of Investments (continued)      BlackRock EcoSolutions Investment Trust (BQR)   

 

Ÿ  

Exchange-traded options written as of October 31, 2013 were as follows: (concluded)

 

Description    Put/
Call		     

Strike

Price

     

Expiration

Date

      Contracts     

Market

Value

  

TransCanada Corp.

      Call         CAD         46.00         11/18/13         22       $ (2,669 ) 

Trimble Navigation Ltd.

      Call         USD         31.25         11/18/13         184         (5,520 ) 

Trina Solar Ltd. — ADR

      Call         USD         12.00         11/18/13         65         (18,265 ) 

Tyson Foods, Inc., Class A

      Call         USD         31.00         11/18/13         75         (375 ) 

Rayonier, Inc.

      Call         USD         57.25         11/21/13         70         (275 ) 

Cheniere Energy, Inc.

      Call         USD         41.00         11/22/13         25         (2,263 ) 

First Solar, Inc.

      Call         USD         52.50         11/22/13         14         (3,885 ) 

Layne Christensen Co.

      Call         USD         20.25         12/12/13         48         (1,298 ) 

Pall Corp.

      Call         USD         77.50         12/16/13         43         (16,905 ) 

Archer-Daniels-Midland Co.

      Call         USD         42.00         12/23/13         75         (7,162 ) 

NextEra Energy, Inc.

      Call         USD         87.50         12/23/13         23         (1,840 ) 

Plum Creek Timber Co., Inc.

      Call         USD         50.00         12/23/13         106         (848 ) 

Quanta Services, Inc.

      Call         USD         30.00         12/23/13         200         (23,500 ) 

SunEdison, Inc.

      Call         USD         10.00         12/23/13         65         (4,063 ) 

Watts Water Technologies, Inc., Class A

      Call         USD         60.00         12/23/13         110         (10,450 ) 

Yingli Green Energy Holding Co. Ltd. — ADR

      Call         USD         11.00         12/23/13         171         (1,710 ) 

Archer-Daniels-Midland Co.

      Call         USD         43.00         1/20/14         75         (7,837 ) 

Total

                   $ (218,572 ) 
                 

 

 

  

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows:

 

Description    Counterparty    Put/
Call		     

Strike
Price

      Expiration
Date		      Contracts      Market
Value		  

AGCO Corp.

    Goldman Sachs International      Call         USD         62.02         11/04/13         15,700       $ (5 ) 

NextEra Energy, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         81.65         11/04/13         2,300         (7,146 ) 

Xylem, Inc.

    Deutsche Bank AG      Call         USD         27.91         11/04/13         29,100         (191,682 ) 

Kingspan Group PLC

    UBS AG      Call         EUR         11.87         11/05/13         5,300         (4,147 ) 

Syngenta AG

    Goldman Sachs International      Call         CHF         375.14         11/05/13         3,400         (1,292 ) 

BrasilAgro — Co. Brasileira de Propriedades Agricolas

    Deutsche Bank AG      Call         BRL         9.89         11/07/13         39,400         (5,896 ) 

Cia de Saneamento de Minas Gerais — COPASA

    UBS AG      Call         BRL         31.52         11/07/13         19,400         (40,414 ) 

Inversiones Aguas Metropolitanas SA

    Deutsche Bank AG      Call         CLP         950.71         11/07/13         225,000         (4,277 ) 

Guangdong Investment Ltd.

    UBS AG      Call         HKD         6.88         11/12/13         134,000         (1,015 ) 

Hyflux Ltd.

    Citibank N.A.      Call         SGD         1.21         11/12/13         169,000         (55 ) 

Incitec Pivot Ltd.

    Citibank N.A.      Call         AUD         2.74         11/12/13         118,800         (1,100 ) 

Kurita Water Industries Ltd.

    Citibank N.A.      Call         JPY         2,068.24         11/12/13         26,100         (24,043 ) 

Nufarm Ltd.

    Morgan Stanley & Co. International PLC      Call         AUD         4.94         11/12/13         26,100         (1,959 ) 

Wilmar International Ltd.

    Citibank N.A.      Call         SGD         3.30         11/12/13         36,000         (4,457 ) 

California Water Service Group

    Goldman Sachs International      Call         USD         20.54         11/13/13         10,000         (14,121 ) 

Fibria Celulose SA — ADR

    Goldman Sachs International      Call         USD         12.08         11/13/13         4,200         (4,218 ) 

Illovo Sugar Ltd.

    Bank of America N.A.      Call         ZAR         32.61         11/13/13         52,800         (988 ) 

Severn Trent PLC

    Deutsche Bank AG      Call         GBP         17.33         11/13/13         25,500         (53,507 ) 

Itron, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         46.49         11/15/13         8,000         (455 ) 

Cosan Ltd., Class A

    Citibank N.A.      Call         USD         15.72         11/20/13         24,900         (14,745 ) 

BrasilAgro — Co. Brasileira de Propriedades Agricolas

    Deutsche Bank AG      Call         BRL         9.85         11/21/13         39,400         (9,030 ) 

Iberdrola SA

    Citibank N.A.      Call         EUR         4.53         11/21/13         93,500         (19,345 ) 

Sao Martinho SA

    UBS AG      Call         BRL         29.58         11/21/13         41,600         (40,679 ) 

Schneider Electric SA

    Morgan Stanley & Co. International PLC      Call         EUR         65.33         11/21/13         6,000         (2,837 ) 

SLC Agricola SA

    UBS AG      Call         BRL         22.42         11/21/13         33,700         (2,127 ) 

CNH Industrial NV

    Deutsche Bank AG      Call         USD         12.45         11/22/13         44,700         (4,432 ) 

 

See Notes to Financial Statements.

 

38    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (continued)      BlackRock EcoSolutions Investment Trust (BQR)   

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows: (continued)

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

American Water Works Co., Inc.

    Deutsche Bank AG      Call         USD         41.20         11/25/13         6,000       $ (10,032 ) 

Monsanto Co.

    UBS AG      Call         USD         109.02         11/25/13         8,400         (8,442 ) 

California Water Service Group

    Goldman Sachs International      Call         USD         20.54         11/27/13         10,000         (16,240 ) 

ABB Ltd.

    Morgan Stanley & Co. International PLC      Call         CHF         22.03         12/02/13         11,400         (15,383 ) 

American Water Works Co., Inc.

    Deutsche Bank AG      Call         USD         41.26         12/02/13         5,600         (9,016 ) 

Deere & Co.

    Credit Suisse International      Call         USD         83.61         12/02/13         5,400         (6,355 ) 

Pentair Ltd.

    UBS AG      Call         USD         66.36         12/02/13         8,900         (20,013 ) 

Rentech, Inc.

    Citibank N.A.      Call         USD         2.04         12/02/13         143,000         (1,949 ) 

Sasol Ltd. — ADR

    Goldman Sachs International      Call         USD         52.22         12/02/13         6,600         (6,429 ) 

China Longyuan Power Group Corp., Series H

    UBS AG      Call         HKD         8.91         12/03/13         101,000         (4,699 ) 

Guangdong Investment Ltd.

    UBS AG      Call         HKD         6.88         12/03/13         134,000         (2,357 ) 

The Mosaic Co.

    Citibank N.A.      Call         USD         46.75         12/04/13         7,900         (8,984 ) 

Pennon Group PLC

    UBS AG      Call         GBP         7.03         12/04/13         96,900         (7,897 ) 

Potash Corp. of Saskatchewan, Inc.

    Deutsche Bank AG      Call         USD         32.32         12/04/13         14,100         (6,258 ) 

Umicore SA

    Citibank N.A.      Call         EUR         35.55         12/04/13         8,500         (7,081 ) 

United Utilities Group PLC

    Goldman Sachs International      Call         GBP         7.07         12/04/13         71,300         (16,811 ) 

Tetra Tech, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         26.77         12/05/13         36,200         (21,930 ) 

SunOpta, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         9.88         12/06/13         20,800         (21,546 ) 

ALL — America Latina Logistica SA

    UBS AG      Call         BRL         8.94         12/09/13         59,900         (2,268 ) 

American Water Works Co., Inc.

    Citibank N.A.      Call         USD         43.69         12/09/13         5,800         (2,276 ) 

BrasilAgro — Co. Brasileira de Propriedades Agricolas

    Deutsche Bank AG      Call         BRL         10.01         12/09/13         39,400         (9,844 ) 

Cia de Saneamento Basico do Estado de Sao Paulo

    UBS AG      Call         BRL         23.81         12/09/13         47,400         (25,431 ) 

Inversiones Aguas Metropolitanas SA

    UBS AG      Call         CLP         972.14         12/09/13         225,000         (6,487 ) 

Sao Martinho SA

    UBS AG      Call         BRL         30.09         12/09/13         24,200         (21,836 ) 

SLC Agricola SA

    UBS AG      Call         BRL         21.94         12/09/13         16,900         (3,247 ) 

K+S AG

    Deutsche Bank AG      Call         EUR         19.37         12/10/13         8,500         (7,354 ) 

Orkla ASA

    Deutsche Bank AG      Call         NOK         46.92         12/10/13         24,700         (8,526 ) 

SSE PLC

    Deutsche Bank AG      Call         GBP         14.41         12/10/13         14,400         (4,592 ) 

Veolia Environnement SA

    Deutsche Bank AG      Call         EUR         13.25         12/10/13         56,700         (28,450 ) 

Acciona SA

    Goldman Sachs International      Call         EUR         46.92         12/11/13         1,700         (5,124 ) 

Gamesa Corp. Tecnologica SA

    Citibank N.A.      Call         EUR         7.13         12/11/13         18,000         (8,698 ) 

Illovo Sugar Ltd.

    Deutsche Bank AG      Call         ZAR         31.54         12/11/13         52,900         (5,381 ) 

Vestas Wind Systems A/S

    Deutsche Bank AG      Call         DKK         153.47         12/11/13         7,800         (10,445 ) 

Agrium, Inc.

    Barclays Bank PLC      Call         USD         84.92         12/12/13         13,000         (48,148 ) 

Aqua America, Inc.

    Deutsche Bank AG      Call         USD         24.70         12/12/13         35,000         (30,542 ) 

Fibria Celulose SA — ADR

    Deutsche Bank AG      Call         USD         12.91         12/12/13         4,300         (2,684 ) 

Kingspan Group PLC

    UBS AG      Call         EUR         12.49         12/12/13         5,300         (3,067 ) 

Monsanto Co.

    Citibank N.A.      Call         USD         106.79         12/12/13         8,400         (17,728 ) 

Nordex SE

    Goldman Sachs International      Call         EUR         13.62         12/12/13         1,800         (1,685 ) 

American States Water Co.

    UBS AG      Call         USD         28.89         12/13/13         34,100         (21,049 ) 

California Water Service Group

    Citibank N.A.      Call         USD         21.81         12/13/13         20,000         (9,979 ) 

Johnson Matthey PLC

    UBS AG      Call         GBP         30.29         12/13/13         19,200         (18,182 ) 

Severn Trent PLC

    Deutsche Bank AG      Call         GBP         18.94         12/13/13         25,500         (13,156 ) 

Suez Environnement Co.

    Deutsche Bank AG      Call         EUR         12.76         12/13/13         4,500         (3,096 ) 

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    39

Table of Contents
Schedule of Investments (continued)      BlackRock EcoSolutions Investment Trust (BQR)   

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows: (concluded)

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

American Water Works Co., Inc.

    Morgan Stanley & Co. International PLC      Call         USD         41.15         12/16/13         5,900       $ (10,540 ) 

Deere & Co.

    Credit Suisse International      Call         USD         83.61         12/16/13         5,400         (8,441 ) 

Bunge Ltd.

    Citibank N.A.      Call         USD         79.17         12/17/13         2,800         (10,016 ) 

Ormat Technologies, Inc.

    Citibank N.A.      Call         USD         27.17         12/17/13         7,600         (5,452 ) 

Aegion Corp.

    Citibank N.A.      Call         USD         24.00         12/18/13         5,100         (478 ) 

China Water Affairs Group Ltd.

    Goldman Sachs International      Call         HKD         3.16         12/18/13         1,000,000         (2,289 ) 

Hyflux Ltd.

    Citibank N.A.      Call         SGD         1.19         12/18/13         168,000         (1,751 ) 

Potash Corp. of Saskatchewan, Inc.

    Deutsche Bank AG      Call         USD         32.32         12/18/13         14,100         (8,390 ) 

Sinofert Holdings Ltd.

    Goldman Sachs International      Call         HKD         1.44         12/18/13         974,000         (1,895 ) 

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

    Citibank N.A.      Call         HKD         3.16         12/18/13         902,000         (16,490 ) 

Israel Chemicals Ltd.

    Deutsche Bank AG      Call         ILS         30.55         12/19/13         40,500         (16,591 ) 

Novozymes A/S, B Shares

    Deutsche Bank AG      Call         DKK         219.75         12/19/13         16,300         (11,524 ) 

Wacker Chemie AG

    Morgan Stanley & Co. International PLC      Call         EUR         74.55         12/19/13         2,400         (3,574 ) 

BrasilAgro — Co. Brasileira de Propriedades Agricolas

    Deutsche Bank AG      Call         BRL         10.25         1/06/14         39,000         (10,634 ) 

Cresud SACIF y A — ADR

    Citibank N.A.      Call         USD         11.55         1/06/14         17,600         (4,242 ) 

Inversiones Aguas Metropolitanas SA

    Citibank N.A.      Call         CLP         936.23         1/06/14         225,000         (17,141 ) 

Sao Martinho SA

    UBS AG      Call         BRL         31.53         1/06/14         24,200         (16,350 ) 

SLC Agricola SA

    Deutsche Bank AG      Call         BRL         21.25         1/06/14         16,900         (7,059 ) 

Roper Industries, Inc.

    Citibank N.A.      Call         USD         128.13         1/08/14         4,700         (14,006 ) 

BrasilAgro — Co. Brasileira de Propriedades Agricolas

    Deutsche Bank AG      Call         BRL         10.44         1/16/14         39,000         (10,164 ) 

 

  

Total

                      $ (1,141,696 ) 
                    

 

 

  

 

Ÿ  

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:

 

  Ÿ  

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

 

  Ÿ  

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)

 

  Ÿ  

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 fair value hierarchy classification 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, please refer to Note 2 of the Notes to Financial Statements.

 

See Notes to Financial Statements.

 

40    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (concluded)      BlackRock EcoSolutions Investment Trust (BQR)   

 

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy as of October 31, 2013:

 

 

  
     Level 1     Level 2     Level 3      Total  

 

  

Assets:

          

Investments:

          

Long-Term Investments:

          

Common Stocks:

          

Auto Components

    $ 1,213,745        —        —       $ 1,213,745   

Biotechnology

      —      $ 1,421,707        —         1,421,707   

Building Products

      —        398,652        —         398,652   

Chemicals

      14,040,661        7,031,087        —         21,071,748   

Commercial Services & Supplies

      2,106,078        812,916        —         2,918,994   

Construction & Engineering

      2,010,759        —        —         2,010,759   

Electric Utilities

      2,220,207        2,266,167        —         4,486,374   

Electrical Equipment

      1,610,919        2,705,318        —         4,316,237   

Electronic Equipment, Instruments & Components

      1,982,671        —        —         1,982,671   

Food Products

      12,576,070        1,589,211        —         14,165,281   

Independent Power Producers & Energy Traders

      440,583        583,130        —         1,023,713   

Machinery

      11,600,615        1,267,975        —         12,868,590   

Multi-Utilities

      —        3,063,229        —         3,063,229   

Oil, Gas & Consumable Fuels

      2,330,648        1,277,446        —         3,608,094   

Paper & Forest Products

      247,950        66,127        —         314,077   

Real Estate Investment Trusts (REITs)

      3,191,912        —        —         3,191,912   

Real Estate Management & Development

      410,685        —        —         410,685   

Road & Rail

      476,145        —        —         476,145   

Semiconductors & Semiconductor Equipment

      762,804        11,304        —         774,108   

Water Utilities

      14,707,006        13,690,369        —         28,397,375   

Rights

      6,530        —        —         6,530   

Short-Term Securities

      7,688,865        —        —         7,688,865   

 

  

Total

    $ 79,624,853      $ 36,184,638        —       $ 115,809,491   
  

 

 

  
         

 

  
     Level 1     Level 2     Level 3      Total  

 

  

Derivative Financial Instruments1

          

Liabilities:

          

Equity contracts

    $ (200,093 )    $ (1,160,175 )      —       $ (1,360,268 ) 

 

  

1    Derivative financial instruments are foreign currency exchange contracts and options written. Foreign currency exchange contracts are valued at the unrealized appreciation/ depreciation on the instrument and options written are shown at value.

        

Certain of the Trust’s assets and/or liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2013, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
         

 

  
     Level 1     Level 2     Level 3      Total  

 

  

Assets:

          

Cash pledged as collateral for options written

    $ 100,000        —        —       $ 100,000   

Liabilities:

          

Bank overdraft

      —      $ (7 )      —         (7 ) 

Bank overdraft on foreign currency at value

      —        (618,881 )      —         (618,881 ) 

 

  

Total

    $ 100,000      $ (618,888 )      —       $ (518,888 ) 
  

 

 

  

There were no transfers between Levels during the year ended October 31, 2013.

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    41

Table of Contents
Schedule of Investments October 31, 2013     

 

 BlackRock Energy and Resources Trust (BGR)

(Percentages shown are based on Net Assets)

   

  

 

Common Stocks    Shares      Value  

Energy Equipment & Services — 16.2%

  

   

Cameron International Corp. (a)(b)

      228,260       $ 12,522,344   

Ensco PLC

      289,000         16,660,850   

Halliburton Co. (b)

      685,700         36,362,671   

National Oilwell Varco, Inc.

      188,500         15,302,430   

Schlumberger Ltd. (b)

      505,968         47,419,321   

Technip SA

      160,900         16,852,517   
     

 

 

  
                145,120,133   

Oil, Gas & Consumable Fuels — 77.9%

  

   

Anadarko Petroleum Corp. (b)

      459,233         43,760,313   

BG Group PLC

      1,578,000         32,190,957   

BP PLC — ADR

      286,900         13,340,850   

Cairn Energy PLC (a)

      2,000,000         9,062,360   

Caracal Energy, Inc. (a)

      1,400,000         10,774,929   

Chevron Corp. (b)

      601,428         72,147,303   

Cimarex Energy Co. (b)

      141,400         14,896,490   

Concho Resources, Inc. (a)(b)

      64,700         7,156,467   

ConocoPhillips (b)

      632,100         46,332,930   

CONSOL Energy, Inc.

      245,721         8,968,816   

Enbridge, Inc. (b)

      197,000         8,540,162   

Eni SpA (b)

      746,500         18,951,425   

EOG Resources, Inc. (b)

      187,500         33,450,000   

EQT Corp. (b)

      175,632         15,035,855   

Exxon Mobil Corp. (b)

      730,000         65,422,600   

Gulfport Energy Corp. (a)

      379,798         22,290,345   

Hess Corp.

      497,500         40,397,000   

Kodiak Oil & Gas Corp. (a)(b)

      803,000         10,414,910   

Kosmos Energy Ltd. (a)

      993,007         10,585,455   

Noble Energy, Inc.

      708,992         53,124,771   

Phillips 66 (b)

      220,000         14,174,600   
Common Stocks    Shares      Value  

Oil, Gas & Consumable Fuels (concluded)

  

   

Pioneer Natural Resources Co. (b)

      138,899       $ 28,443,737   

Range Resources Corp.

      294,200         22,273,882   

Royal Dutch Shell PLC — ADR (b)

      470,000         31,330,200   

Suncor Energy, Inc. (b)

      497,763         18,088,755   

TransCanada Corp. (b)

      288,000         12,979,542   

Whiting Petroleum Corp. (a)

      509,600         34,087,144   
     

 

 

  
                698,221,798   

Total Long-Term Investments

(Cost — $690,535,649) — 94.1%

               843,341,931   
     
Short-Term Securities                

BlackRock Liquidity Funds, TempFund,
Institutional Class, 0.03% (c)(d)

      60,810,523         60,810,523   

Total Short-Term Securities

(Cost — $60,810,523) — 6.8%

               60,810,523   

Total Investments Before Options Written

(Cost — $751,346,172) — 100.9%

               904,152,454   
     
Options Written                

(Premiums Received — $8,474,085) — (0.7)%

               (6,017,213 ) 

Total Investments Net of Options Written — 100.2%

         898,135,241   

Liabilities in Excess of Other Assets — (0.2)%

         (1,500,371 ) 
     

 

 

  

Net Assets — 100.0%

       $ 896,634,870   
     

 

 

  
 

 

Notes to Schedule of Investments

 

(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) 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, 2013, 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, 2012

     

Net

Activity

     Shares/Beneficial
Interest Held at
October 31, 2013		      Income      Realized
Gain		  

BlackRock Liquidity Funds, TempFund, Institutional Class

      4,572,699         56,237,824        60,810,523       $ 22,416       $ 108   

BlackRock Liquidity Series, LLC Money Market Series

    $ 13,663,321       $ (13,663,321 )      —       $ 1,338         —   

 

Ÿ  

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, 2013, 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, 2012		      Shares
Purchased		     

Shares

Sold

     Shares Held at
October 31, 2013		      Value at
October 31, 2013		      Income     

Realized

Loss

  

Prospect Global Resources, Inc.1

      2,884,615         —         (2,884,615 )      —         —         —       $ (6,700,693 ) 

 

1

No longer an affiliated company or held by the Trust as of report date.

 

Ÿ  

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 the investment advisor. These definitions may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease.

 

See Notes to Financial Statements.

 

42    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (continued)      BlackRock Energy and Resources Trust (BGR)   

 

 

Ÿ  

Exchange-traded options written as of October 31, 2013 were as follows:

 

Description    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Chevron Corp.

      Call         USD         123.00         11/01/13         109       $ (763 ) 

EQT Corp.

      Call         USD         85.00         11/04/13         310         (37,738 ) 

EQT Corp.

      Call         USD         92.75         11/04/13         305         (149 ) 

Phillips 66

      Call         USD         63.50         11/04/13         800         (88,000 ) 

Schlumberger Ltd.

      Call         USD         91.00         11/04/13         1,800         (518,400 ) 

ConocoPhillips

      Call         USD         72.50         11/08/13         2,220         (269,730 ) 

EOG Resources, Inc.

      Call         USD         170.00         11/08/13         760         (777,100 ) 

Eni SpA

      Call         EUR         18.00         11/15/13         525         (274,360 ) 

Anadarko Petroleum Corp.

      Call         USD         110.00         11/18/13         1,955         (19,550 ) 

Cameron International Corp.

      Call         USD         60.00         11/18/13         750         (7,500 ) 

Cameron International Corp.

      Call         USD         62.50         11/18/13         750         (5,625 ) 

Cameron International Corp.

      Call         USD         67.50         11/18/13         200         (1,000 ) 

Chevron Corp.

      Call         USD         120.00         11/18/13         229         (33,663 ) 

Cimarex Energy Co.

      Call         USD         105.00         11/18/13         500         (205,000 ) 

Concho Resources, Inc.

      Call         USD         115.00         11/18/13         250         (63,750 ) 

Enbridge, Inc.

      Call         CAD         45.00         11/18/13         690         (34,743 ) 

Exxon Mobil Corp.

      Call         USD         90.00         11/18/13         250         (13,250 ) 

Halliburton Co.

      Call         USD         49.00         11/18/13         730         (301,125 ) 

Halliburton Co.

      Call         USD         50.00         11/18/13         1,670         (538,575 ) 

Halliburton Co.

      Call         USD         52.50         11/18/13         300         (39,450 ) 

Kodiak Oil & Gas Corp.

      Call         USD         13.00         11/18/13         3,145         (180,838 ) 

Pioneer Natural Resources Co.

      Call         USD         210.00         11/18/13         650         (448,500 ) 

Royal Dutch Shell PLC — ADR

      Call         USD         67.50         11/18/13         1,650         (57,750 ) 

Suncor Energy, Inc.

      Call         CAD         39.00         11/18/13         875         (27,694 ) 

TransCanada Corp.

      Call         CAD         49.00         11/18/13         950         (4,556 ) 

Chevron Corp.

      Call         USD         121.00         11/29/13         360         (42,840 ) 

Chevron Corp.

      Call         USD         120.00         12/23/13         229         (49,464 ) 

Suncor Energy, Inc.

      Call         CAD         40.00         12/23/13         875         (32,729 ) 

 

  

Total

                   $ (4,073,842 ) 
                 

 

 

  

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows:

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		    Contracts      Market
Value		  

Chevron Corp.

    Morgan Stanley & Co. International PLC      Call         USD         126.00       11/04/13      118,000       $ (99 ) 

CONSOL Energy, Inc.

    Citibank N.A.      Call         USD         36.77       11/04/13      43,000         (14,473 ) 

Exxon Mobil Corp.

    Deutsche Bank AG      Call         USD         93.32       11/04/13      206,000         (74 ) 

Exxon Mobil Corp.

    Morgan Stanley & Co. International PLC      Call         USD         88.01       11/04/13      24,700         (41,910 ) 

Kosmos Energy Ltd.

    Barclays Bank PLC      Call         USD         10.52       11/04/13      46,500         (12,207 ) 

Kosmos Energy Ltd.

    Citibank N.A.      Call         USD         11.00       11/04/13      50,000         (3,061 ) 

Range Resources Corp.

    Goldman Sachs International      Call         USD         81.34       11/04/13      180,000         (1,026 ) 

BG Group PLC

    UBS AG      Call         GBP         12.27       11/05/13      276,000         (214,950 ) 

Ensco PLC

    Deutsche Bank AG      Call         USD         57.10       11/05/13      50,500         (41,430 ) 

Technip SA

    Deutsche Bank AG      Call         EUR         90.43       11/05/13      14,900         (10 ) 

Cairn Energy PLC

    Morgan Stanley & Co. International PLC      Call         GBP         2.79       11/06/13      116,500         (10,756 ) 

Caracal Energy, Inc.

    UBS AG      Call         GBP         4.66       11/06/13      245,000         (59,098 ) 

Kosmos Energy Ltd.

    Deutsche Bank AG      Call         USD         10.76       11/07/13      64,500         (12,609 ) 

CONSOL Energy, Inc.

    Citibank N.A.      Call         USD         37.13       11/11/13      43,000         (18,798 ) 

Kosmos Energy Ltd.

    Goldman Sachs International      Call         USD         10.81       11/12/13      58,000         (14,542 ) 

BG Group PLC

    UBS AG      Call         GBP         12.27       11/13/13      276,000         (229,587 ) 

Cairn Energy PLC

    Morgan Stanley & Co. International PLC      Call         GBP         2.79       11/13/13      116,500         (13,717 ) 

Technip SA

    Bank of America N.A.      Call         EUR         90.36       11/13/13      20,700         (299 ) 

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    43

Table of Contents
Schedule of Investments (continued)      BlackRock Energy and Resources Trust (BGR)   

 

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows: (concluded)

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Whiting Petroleum Corp.

    Morgan Stanley & Co. International PLC      Call         USD         69.50         11/13/13         101,600       $ (69,316 ) 

Ensco PLC

    Deutsche Bank AG      Call         USD         57.10         11/20/13         50,500         (65,865 ) 

Kosmos Energy Ltd.

    Citibank N.A.      Call         USD         10.90         11/20/13         58,000         (17,652 ) 

Whiting Petroleum Corp.

    Morgan Stanley & Co. International PLC      Call         USD         69.00         11/20/13         101,600         (118,852 ) 

Covidien PLC

    UBS AG      Call         USD         10.98         11/25/13         70,000         (22,485 ) 

Caracal Energy, Inc.

    Citibank N.A.      Call         GBP         5.18         11/27/13         123,000         (3,654 ) 

National Oilwell Varco, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         83.00         12/02/13         76,000         (86,856 ) 

Noble Energy, Inc.

    Deutsche Bank AG      Call         USD         77.06         12/02/13         125,000         (154,026 ) 

Technip SA

    Bank of America N.A.      Call         EUR         90.36         12/04/13         20,700         (1,847 ) 

Caracal Energy, Inc.

    Citibank N.A.      Call         GBP         5.18         12/06/13         122,000         (5,755 ) 

Noble Energy, Inc.

    Deutsche Bank AG      Call         USD         77.83         12/09/13         125,000         (151,553 ) 

Cairn Energy PLC

    Morgan Stanley & Co. International PLC      Call         GBP         2.63         12/10/13         116,500         (41,136 ) 

Cairn Energy PLC

    Morgan Stanley & Co. International PLC      Call         GBP         2.66         12/17/13         116,500         (36,337 ) 

Hess Corp.

    Morgan Stanley & Co. International PLC      Call         USD         81.26         12/19/13         174,200         (429,286 ) 

Cairn Energy PLC

    Citibank N.A.      Call         GBP         2.78         1/03/14         234,000         (50,105 ) 

 

  

Total

                      $ (1,943,371 ) 
                    

 

 

  

 

Ÿ  

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:

 

  Ÿ  

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

 

  Ÿ  

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)

 

  Ÿ  

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 fair value hierarchy classification 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, please refer to Note 2 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, 2013:

 

      Level 1      Level 2      Level 3      Total  

Assets:

            

Investments:

            

Long-Term Investments:

            

Common Stocks:

            

Energy Equipment & Services

    $ 128,267,616       $ 16,852,517         —       $ 145,120,133   

Oil, Gas & Consumable Fuels

      638,017,056         60,204,742         —         698,221,798   

Short-Term Securities

      60,810,523         —         —         60,810,523   

 

  

Total

    $ 827,095,195       $ 77,057,259         —       $ 904,152,454   
  

 

 

  

 

See Notes to Financial Statements.

 

44    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (concluded)      BlackRock Energy and Resources Trust (BGR)   

 

      Level 1     Level 2     Level 3      Total  

Derivative Financial Instruments1

          

Liabilities:

          

Equity contracts

    $ (3,761,595 )    $ (2,255,618 )      —       $ (6,017,213 ) 

 

  

1   Derivative financial instruments are options written, 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, 2013, such assets are categorized within the disclosure hierarchy as follows:       
         
      Level 1     Level 2     Level 3      Total  

Assets:

          

Cash

    $ 2,930        —        —       $ 2,930   

Foreign currency at value

      108,032        —        —         108,032   

 

  

Total

    $ 110,962        —        —       $ 110,962   
  

 

 

  

There were no transfers between Levels during the year ended October 31, 2013.

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    45

Table of Contents
Schedule of Investments October 31, 2013      BlackRock Enhanced Capital and Income Fund, Inc. (CII)   
     (Percentages shown are based on Net Assets)   

 

Common Stocks    Shares      Value  

Aerospace & Defense — 0.3%

      

Triumph Group, Inc.

      32,500       $ 2,328,625   

Air Freight & Logistics — 0.0%

      

Royal Mail PLC (a)

      11,200         100,566   

Airlines — 5.0%

      

Japan Airlines Co. Ltd.

      582,000         33,914,980   

Automobiles — 3.6%

      

Ford Motor Co. (b)

      113,800         1,947,118   

General Motors Co. (a)(b)

      484,200         17,891,190   

Renault SA

      48,400         4,222,929   
     

 

 

  
                24,061,237   

Beverages — 0.7%

      

PepsiCo, Inc. (b)

      56,700         4,767,903   

Building Products — 0.7%

      

Owens Corning (a)(b)

      130,900         4,703,237   

Capital Markets — 0.5%

      

Legg Mason, Inc. (b)

      91,900         3,535,393   

Chemicals — 4.1%

      

CF Industries Holdings, Inc.

      127,200         27,424,320   

Commercial Banks — 1.2%

      

U.S. Bancorp (b)

      220,500         8,237,880   

Communications Equipment — 2.6%

      

QUALCOMM, Inc. (b)

      251,000         17,436,970   

Computers & Peripherals — 3.2%

      

Apple, Inc. (b)

      42,000         21,938,700   

Consumer Finance — 1.6%

      

Discover Financial Services

      156,100         8,098,468   

Springleaf Holdings, Inc. (a)

      137,400         2,793,342   
     

 

 

  
                10,891,810   

Diversified Financial Services — 6.1%

      

Berkshire Hathaway, Inc., Class B (a)

      97,200         11,185,776   

Citigroup, Inc. (b)

      229,530         11,196,473   

JPMorgan Chase & Co. (b)

      370,600         19,100,724   
     

 

 

  
                41,482,973   

Diversified Telecommunication Services — 0.6%

  

AT&T Inc. (b)

      72,400         2,620,880   

CenturyLink, Inc. (b)

      50,600         1,713,316   
     

 

 

  
                4,334,196   

Electric Utilities — 0.3%

      

The Southern Co. (b)

      45,000         1,840,950   

Energy Equipment & Services — 1.6%

      

Ensco PLC (b)

      111,000         6,399,150   

Noble Corp. (b)

      108,800         4,101,760   
     

 

 

  
                10,500,910   

Food & Staples Retailing — 3.9%

      

Metro AG

      295,900         13,873,626   

Wal-Mart Stores, Inc. (b)

      158,200         12,141,850   
     

 

 

  
                26,015,476   

Food Products — 0.8%

      

Unilever NV (b)

      141,900         5,636,268   

Health Care Providers & Services — 4.2%

      

Express Scripts Holding Co. (a)(b)

      80,000         5,001,600   

UnitedHealth Group, Inc. (b)

      343,400         23,440,484   
     

 

 

  
                28,442,084   

Household Products — 0.7%

      

Kimberly-Clark Corp. (b)

      34,100         3,682,800   
Common Stocks    Shares      Value  

Household Products (concluded)

      

The Procter & Gamble Co. (b)

      10,700       $ 864,025   
     

 

 

  
                4,546,825   

Industrial Conglomerates — 0.5%

      

General Electric Co. (b)

      125,900         3,291,026   

Insurance — 7.2%

      

The Allstate Corp.

      182,500         9,683,450   

American International Group, Inc. (b)

      760,100         39,259,165   
     

 

 

  
                48,942,615   

Internet & Catalog Retail — 2.0%

      

Expedia, Inc. (b)

      229,700         13,524,736   

Internet Software & Services — 7.6%eBay, Inc. (a)(b)

      193,000         10,173,030   

Google, Inc., Class A (a)(b)

      39,900         41,120,142   
     

 

 

  
                51,293,172   

IT Services — 4.7%

      

Leidos Holdings, Inc. (b)

      398,375         18,759,479   

Science Applications International Corp.

      232,914         8,210,219   

Visa, Inc., Class A (b)

      24,300         4,779,081   
     

 

 

  
                31,748,779   

Leisure Equipment & Products — 0.4%

      

Brunswick Corp. (b)

      52,700         2,378,351   

Media — 4.3%

      

Comcast Corp., Special Class A (b)

      378,000         17,501,400   

News Corp. — Class A (a)

      292,300         5,144,480   

Time Warner, Inc. (b)

      21,700         1,491,658   

The Walt Disney Co. (b)

      72,600         4,979,634   
     

 

 

  
                29,117,172   

Metals & Mining — 0.9%

      

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

      168,800         6,205,088   

Multi-Utilities — 0.2%

      

Dominion Resources, Inc. (b)

      19,900         1,268,625   

Oil, Gas & Consumable Fuels — 11.7%

      

Chevron Corp. (b)

      9,000         1,079,640   

Exxon Mobil Corp. (b)

      146,000         13,084,520   

HollyFrontier Corp. (b)

      404,960         18,652,458   

Linn Energy LLC (b)

      106,800         2,958,360   

Marathon Oil Corp. (b)

      19,400         684,044   

Marathon Petroleum Corp. (b)

      73,900         5,295,674   

PBF Energy, Inc. (b)

      392,900         10,345,057   

Suncor Energy, Inc.

      736,600         26,775,410   
     

 

 

  
                78,875,163   

Pharmaceuticals — 9.3%

      

Eli Lilly & Co.

      129,300         6,441,726   

Johnson & Johnson

      179,600         16,632,756   

Merck & Co., Inc. (b)

      275,700         12,431,313   

Novartis AG — ADR (b)

      43,300         3,357,915   

Pfizer, Inc. (b)

      770,100         23,626,668   
     

 

 

  
                62,490,378   

Real Estate Investment Trusts (REITs) — 1.2%

  

Annaly Capital Management, Inc.

      497,000         5,859,630   

Cole Real Estate Investment, Inc.

      143,100         2,032,020   
     

 

 

  
                7,891,650   

Semiconductors & Semiconductor Equipment — 1.0%

  

Samsung Electronics Co. Ltd.

      7,300         7,047,089   

Software — 0.7%

      

Oracle Corp. (b)

      144,400         4,837,400   
 

 

See Notes to Financial Statements.

 

46    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (continued)      BlackRock Enhanced Capital and Income Fund, Inc. (CII)   
     (Percentages shown are based on Net Assets)   

 

 

Common Stocks    Shares      Value  

Specialty Retail — 0.2%

      

L Brands, Inc. (b)

      18,400       $ 1,152,024   

Wireless Telecommunication Services — 5.0%

  

Vodafone Group PLC — ADR (b)

      911,900         33,576,158   

Total Long-Term Investments

(Cost — $587,300,794) — 98.6%

               665,780,729   
     
Short-Term Securities                

BlackRock Liquidity Funds, TempFund, Institutional Class, 0.03% (c)(d)

      20,482,532         20,482,532   

Total Short-Term Securities

(Cost — $20,482,532) — 3.0%

               20,482,532   
            Value  

Total Investments Before Options Written

(Cost — $607,783,326) — 101.6%

         $ 686,263,261   
     
Options Written              

(Premiums Received — $6,091,953) — (1.5)%

           (10,388,428 ) 

Total Investments Net of Options Written — 100.1%

         675,874,833   

Liabilities in Excess of Other Assets — (0.1)%

         (402,814 ) 
     

 

 

  

Net Assets — 100.0%

       $ 675,472,019   
     

 

 

  
 
Notes to Schedule of Investments

 

(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) 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, 2013, 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, 2012		     

Net

Activity

     Shares Held at
October 31, 2013		      Income      Realized
Gain		  

BlackRock Liquidity Funds, TempFund, Institutional Class

      23,189,440        (2,706,908 )      20,482,532       $ 20,172       $ 347   

 

Ÿ  

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 the investment advisor. These definitions may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease.

 

Ÿ  

Foreign currency exchange contracts as of October 31, 2013 were as follows:

 

Currency

Purchased

       

Currency

Sold

     Counterparty   Settlement
Date		        Unrealized
Appreciation/
Depreciation		  
EUR        756,000           USD           1,038,517      Citibank N.A.     11/01/13         $ (12,054 ) 
USD        1,112,123           EUR           808,000      Morgan Stanley & Co. International PLC     11/01/13           15,057   
Total                         $ 3,003   
                       

 

 

  

 

Ÿ  

Exchange-traded options written as of October 31, 2013 were as follows:

 

Description    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Chevron Corp.

      Call         USD         121.00         11/01/13         19       $ (779 ) 

Chevron Corp.

      Call         USD         123.00         11/01/13         18         (126 ) 

Ford Motor Co.

      Call         USD         18.00         11/01/13         600         (600 ) 

Oracle Corp.

      Call         USD         35.00         11/01/13         200         (200 ) 

General Motors Co.

      Call         USD         36.50         11/04/13         185         (10,083 ) 

General Motors Co.

      Call         USD         37.50         11/04/13         185         (1,110 ) 

Google, Inc., Class A

      Call         USD         895.00         11/04/13         112         (1,526,000 ) 

Pfizer, Inc.

      Call         USD         29.00         11/04/13         164         (27,962 ) 

Pfizer, Inc.

      Call         USD         29.50         11/04/13         490         (58,800 ) 

Apple, Inc.

      Call         USD         515.00         11/08/13         118         (133,635 ) 

AT&T Inc.

      Call         USD         35.50         11/08/13         484         (39,688 ) 

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    47

Table of Contents
Schedule of Investments (continued)      BlackRock Enhanced Capital and Income Fund, Inc. (CII)   

 

Ÿ  

Exchange-traded options written as of October 31, 2013 were as follows: (continued)

 

Description    Put/
Call		     

Strike

Price

     

Expiration

Date

      Contracts      Market
Value		  

Exxon Mobil Corp.

      Call         USD         88.00         11/08/13         201       $ (37,889 ) 

General Electric Co.

      Call         USD         25.00         11/08/13         1,259         (152,339 ) 

Google, Inc., Class A

      Call         USD         895.00         11/08/13         1         (13,605 ) 

JPMorgan Chase & Co.

      Call         USD         53.50         11/08/13         1,562         (8,591 ) 

QUALCOMM, Inc.

      Call         USD         69.50         11/08/13         700         (103,950 ) 

L Brands, Inc.

      Call         USD         60.60         11/16/13         184         (47,020 ) 

The Walt Disney Co.

      Call         USD         65.50         11/16/13         400         (143,772 ) 

American International Group, Inc.

      Call         USD         50.00         11/18/13         950         (204,250 ) 

American International Group, Inc.

      Call         USD         52.50         11/18/13         950         (70,300 ) 

AT&T Inc.

      Call         USD         35.00         11/18/13         240         (32,280 ) 

CenturyLink, Inc.

      Call         USD         34.00         11/18/13         350         (20,125 ) 

Chevron Corp.

      Call         USD         120.00         11/18/13         53         (7,791 ) 

Comcast Corp., Special Class A

      Call         USD         44.00         11/18/13         645         (156,413 ) 

Comcast Corp., Special Class A

      Call         USD         47.00         11/18/13         800         (32,000 ) 

Dominion Resources, Inc.

      Call         USD         65.00         11/18/13         199         (8,955 ) 

eBay, Inc.

      Call         USD         57.50         11/18/13         260         (1,170 ) 

Ensco PLC

      Call         USD         57.50         11/18/13         230         (22,425 ) 

Expedia, Inc.

      Call         USD         55.00         11/18/13         450         (189,000 ) 

Express Scripts Holding Co.

      Call         USD         67.50         11/18/13         220         (1,210 ) 

Freeport-McMoRan Copper & Gold, Inc.

      Call         USD         35.00         11/18/13         484         (93,412 ) 

Freeport-McMoRan Copper & Gold, Inc.

      Call         USD         38.00         11/18/13         444         (11,100 ) 

General Motors Co.

      Call         USD         37.00         11/18/13         1,138         (87,057 ) 

General Motors Co.

      Call         USD         38.00         11/18/13         1,150         (41,975 ) 

HollyFrontier Corp.

      Call         USD         45.00         11/18/13         500         (90,000 ) 

HollyFrontier Corp.

      Call         USD         48.00         11/18/13         500         (21,250 ) 

Kimberly-Clark Corp.

      Call         USD         100.00         11/18/13         341         (283,030 ) 

Legg Mason, Inc.

      Call         USD         36.00         11/18/13         150         (38,625 ) 

Legg Mason, Inc.

      Call         USD         37.00         11/18/13         355         (59,462 ) 

Leidos Holdings, Inc.

      Call         USD         15.00         11/18/13         2,659         (116,331 ) 

Linn Energy LLC

      Call         USD         31.00         11/18/13         250         (5,000 ) 

Marathon Oil Corp.

      Call         USD         36.00         11/18/13         194         (8,439 ) 

Marathon Petroleum Corp.

      Call         USD         72.50         11/18/13         200         (27,500 ) 

Marathon Petroleum Corp.

      Call         USD         75.00         11/18/13         200         (12,500 ) 

Merck & Co., Inc.

      Call         USD         49.00         11/18/13         692         (1,038 ) 

Merck & Co., Inc.

      Call         USD         50.00         11/18/13         698         (2,094 ) 

Noble Corp.

      Call         USD         39.00         11/18/13         100         (1,500 ) 

Oracle Corp.

      Call         USD         35.00         11/18/13         400         (1,400 ) 

Owens Corning

      Call         USD         39.00         11/18/13         440         (3,300 ) 

PBF Energy, Inc.

      Call         USD         25.00         11/18/13         210         (35,700 ) 

PepsiCo, Inc.

      Call         USD         80.00         11/18/13         311         (132,175 ) 

The Procter & Gamble Co.

      Call         USD         80.00         11/18/13         107         (15,140 ) 

QUALCOMM, Inc.

      Call         USD         70.00         11/18/13         190         (25,745 ) 

QUALCOMM, Inc.

      Call         USD         72.50         11/18/13         492         (24,600 ) 

The Southern Co.

      Call         USD         43.00         11/18/13         450         (900 ) 

Time Warner, Inc.

      Call         USD         65.00         11/18/13         217         (88,970 ) 

U.S. Bancorp

      Call         USD         38.00         11/18/13         482         (6,266 ) 

UnitedHealth Group, Inc.

      Call         USD         72.50         11/18/13         411         (1,644 ) 

UnitedHealth Group, Inc.

      Call         USD         75.00         11/18/13         410         (820 ) 

Visa, Inc., Class A

      Call         USD         200.00         11/18/13         130         (26,780 ) 

Vodafone Group PLC — ADR

      Call         USD         36.00         11/18/13         1,650         (193,875 ) 

Apple, Inc.

      Call         USD         530.00         11/22/13         113         (94,355 ) 

 

See Notes to Financial Statements.

 

48    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (continued)      BlackRock Enhanced Capital and Income Fund, Inc. (CII)   

 

Ÿ  

Exchange-traded options written as of October 31, 2013 were as follows: (concluded)

 

Description    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Noble Corp.

      Call         USD         39.50         11/22/13         263       $ (3,945 ) 

Pfizer, Inc.

      Call         USD         30.50         11/22/13         2,185         (91,770 ) 

U.S. Bancorp

      Call         USD         38.00         11/22/13         730         (15,330 ) 

UnitedHealth Group, Inc.

      Call         USD         69.50         11/22/13         75         (5,100 ) 

Noble Corp.

      Call         USD         39.00         11/29/13         362         (11,403 ) 

Noble Corp.

      Call         USD         39.50         11/29/13         181         (3,801 ) 

Wal-Mart Stores, Inc.

      Call         USD         78.00         11/29/13         870         (57,855 ) 

Exxon Mobil Corp.

      Call         USD         90.00         12/06/13         101         (8,585 ) 

American International Group, Inc.

      Call         USD         55.00         12/23/13         2,280         (119,700 ) 

Brunswick Corp.

      Call         USD         47.00         12/23/13         145         (18,125 ) 

eBay, Inc.

      Call         USD         55.00         12/23/13         800         (67,200 ) 

Merck & Co., Inc.

      Call         USD         46.00         12/23/13         126         (6,300 ) 

Novartis AG — ADR

      Call         USD         80.00         12/23/13         120         (7,800 ) 

Owens Corning

      Call         USD         40.00         12/23/13         280         (7,000 ) 

Total

                   $ (5,027,965 ) 
                 

 

 

  

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows:

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

The Allstate Corp.

    Goldman Sachs International      Call         USD         53.18         11/04/13         50,600       $ (14,656 ) 

Eli Lilly & Co.

    Barclays Bank PLC      Call         USD         54.26         11/04/13         15,000         (1 ) 

Leidos Holdings, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         16.15         11/04/13         263,500         (174,084 ) 

Pfizer, Inc.

    Deutsche Bank AG      Call         USD         29.39         11/04/13         65,500         (85,774 ) 

Johnson & Johnson

    Credit Suisse International      Call         USD         89.62         11/06/13         49,300         (149,150 ) 

Google, Inc., Class A

    Morgan Stanley & Co. International PLC      Call         USD         895.00         11/08/13         10,500         (1,428,525 ) 

Ensco PLC

    Deutsche Bank AG      Call         USD         55.18         11/11/13         88,000         (231,319 ) 

Leidos Holdings, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         15.54         11/11/13         143,000         (181,355 ) 

Pfizer, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         29.11         11/12/13         87,000         (136,590 ) 

Suncor Energy, Inc.

    Deutsche Bank AG      Call         USD         36.90         11/13/13         202,500         (69,512 ) 

Berkshire Hathaway, Inc., Class B

    Deutsche Bank AG      Call         USD         117.29         11/21/13         27,000         (18,565 ) 

Renault SA

    UBS AG      Call         EUR         60.50         11/21/13         26,600         (156,041 ) 

Unilever NV

    Credit Suisse International      Call         USD         38.04         11/25/13         90,600         (152,208 ) 

Citigroup, Inc.

    Bank of America N.A.      Call         USD         49.25         12/02/13         100,000         (92,487 ) 

Comcast Corp., Special Class A

    Credit Suisse International      Call         USD         43.47         12/02/13         63,000         (224,778 ) 

Johnson & Johnson

    Credit Suisse International      Call         USD         89.62         12/02/13         49,300         (147,284 ) 

Metro AG

    Bank of America N.A.      Call         EUR         32.33         12/02/13         105,900         (366,835 ) 

Unilever NV

    UBS AG      Call         USD         40.40         12/02/13         51,300         (18,251 ) 

Japan Airlines Co. Ltd.

    Morgan Stanley & Co. International PLC      Call         JPY         6,006.33         12/03/13         320,000         (279,585 ) 

Discover Financial Services

    Citibank N.A.      Call         USD         52.01         12/04/13         70,600         (89,646 ) 

Suncor Energy, Inc.

    Deutsche Bank AG      Call         USD         36.90         12/04/13         202,500         (124,754 ) 

The Allstate Corp.

    Citibank N.A.      Call         USD         54.42         12/05/13         49,600         (21,938 ) 

Discover Financial Services

    JPMorgan Chase Bank N.A.      Call         USD         55.08         12/05/13         15,200         (5,137 ) 

Vodafone Group PLC — ADR

    UBS AG      Call         USD         37.22         12/05/13         168,300         (83,462 ) 

Expedia, Inc.

    Citibank N.A.      Call         USD         49.13         12/12/13         68,100         (669,695 ) 

Berkshire Hathaway, Inc., Class B

    Morgan Stanley & Co. International PLC      Call         USD         118.16         12/13/13         26,400         (25,117 ) 

Cole Real Estate Investment, Inc.

    Citibank N.A.      Call         USD         14.56         12/13/13         39,400         (11,465 ) 

Metro AG

    Citibank N.A.      Call         EUR         35.64         12/19/13         56,800         (61,525 ) 

Vodafone Group PLC — ADR

    UBS AG      Call         USD         37.22         12/19/13         168,300         (107,678 ) 

Samsung Electronics Co. Ltd.

    JPMorgan Chase Bank N.A.      Call         KRW         999,718.32         1/15/14         4,000         (233,046 ) 

Total

                      $ (5,360,463 ) 
                    

 

 

  

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    49

Table of Contents
Schedule of Investments (continued)      BlackRock Enhanced Capital and Income Fund, Inc. (CII)   

 

Ÿ  

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:

 

  Ÿ  

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

 

  Ÿ  

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)

 

  Ÿ  

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 fair value hierarchy classification 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, please refer to Note 2 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, 2013:

 

      Level 1      Level 2      Level 3      Total  

Assets:

            

Investments:

            

Long-Term Investments:

            

Common Stocks:

            

Aerospace & Defense

    $ 2,328,625         —         —       $ 2,328,625   

Air Freight & Logistics

      100,566         —         —         100,566   

Airlines

      33,914,980         —         —         33,914,980   

Automobiles

      19,838,308       $ 4,222,929         —         24,061,237   

Beverages

      4,767,903         —         —         4,767,903   

Building Products

      4,703,237         —         —         4,703,237   

Capital Markets

      3,535,393         —         —         3,535,393   

Chemicals

      27,424,320         —         —         27,424,320   

Commercial Banks

      8,237,880         —         —         8,237,880   

Communications Equipment

      17,436,970         —         —         17,436,970   

Computers & Peripherals

      21,938,700         —         —         21,938,700   

Consumer Finance

      10,891,810         —         —         10,891,810   

Diversified Financial Services

      41,482,973         —         —         41,482,973   

Diversified Telecommunication Services

      4,334,196         —         —         4,334,196   

Electric Utilities

      1,840,950         —         —         1,840,950   

Energy Equipment & Services

      10,500,910         —         —         10,500,910   

Food & Staples Retailing

      12,141,850         13,873,626         —         26,015,476   

Food Products

      5,636,268         —         —         5,636,268   

Health Care Providers & Services

      28,442,084         —         —         28,442,084   

Household Products

      4,546,825         —         —         4,546,825   

Industrial Conglomerates

      3,291,026         —         —         3,291,026   

Insurance

      48,942,615         —         —         48,942,615   

Internet & Catalog Retail

      13,524,736         —         —         13,524,736   

Internet Software & Services

      51,293,172         —         —         51,293,172   

IT Services

      31,748,779         —         —         31,748,779   

Leisure Equipment & Products

      2,378,351         —         —         2,378,351   

Media

      29,117,172         —         —         29,117,172   

Metals & Mining

      6,205,088         —         —         6,205,088   

Multi-Utilities

      1,268,625         —         —         1,268,625   

Oil, Gas & Consumable Fuels

      78,875,163         —         —         78,875,163   

 

See Notes to Financial Statements.

 

50    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (concluded)      BlackRock Enhanced Capital and Income Fund, Inc. (CII)   

 

 

  
     Level 1     Level 2     Level 3      Total  

 

  

Assets: (concluded)

          

Investments: (concluded)

          

Long-Term Investments: (concluded)

          

Common Stocks: (concluded)

          

Pharmaceuticals

    $ 62,490,378        —        —       $ 62,490,378   

Real Estate Investment Trusts (REITs)

      7,891,650        —        —         7,891,650   

Semiconductors & Semiconductor Equipment

      7,047,089        —        —         7,047,089   

Software

      4,837,400        —        —         4,837,400   

Specialty Retail

      1,152,024        —        —         1,152,024   

Wireless Telecommunication Services

      33,576,158        —        —         33,576,158   

Short-Term Securities

      20,482,532        —        —         20,482,532   

 

  

Total

    $ 668,166,706      $ 18,096,555        —       $ 686,263,261   
  

 

 

  
         

 

  
     Level 1     Level 2     Level 3      Total  

 

  

Derivative Financial Instruments1

          

Assets:

          

Foreign currency exchange contracts

    $ 15,057        —        —       $ 15,057   

Liabilities:

          

Equity contracts

      (4,837,173 )    $ (5,551,255 )      —         (10,388,428 ) 

Foreign currency exchange contracts

      (12,054 )      —        —         (12,054 ) 

 

  

Total

    $ (4,834,170 )    $ (5,551,255 )      —       $ (10,385,425 ) 
  

 

 

  

1    Derivative financial instruments are foreign currency exchange contracts and options written. Foreign currency exchange contracts are value at the unrealized appreciation/ depreciation on the instrument and options written are shown at value.

        

Certain of the Trust’s assets and/or liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2013, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
         

 

  
     Level 1     Level 2     Level 3      Total  

 

  

Assets:

          

Foreign currency at value

    $ 2,068,537        —        —       $ 2,068,537   

Cash pledged as collateral for options written

      700,000        —        —         700,000   

Liabilities:

          

Bank overdraft

      —      $ (119,260 )      —         (119,260 ) 

 

  

Total

    $ 2,768,537      $ (119,260 )      —       $ 2,649,277   
  

 

 

  

There were no transfers between Levels during the year ended October 31, 2013.

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    51

Table of Contents
Schedule of Investments October 31, 2013      BlackRock Enhanced Equity Dividend Trust (BDJ)   
     (Percentages shown are based on Net Assets)   

 

Common Stocks    Shares      Value  

Aerospace & Defense — 5.8%

      

Honeywell International, Inc.

      222,700       $ 19,314,771   

Northrop Grumman Corp. (a)

      187,800         20,190,378   

Raytheon Co.

      319,300         26,300,741   

United Technologies Corp. (a)

      246,200         26,158,750   
     

 

 

  
                91,964,640   

Air Freight & Logistics — 1.2%

      

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

      191,400         18,803,136   

Auto Components — 0.5%

      

Johnson Controls, Inc. (a)

      183,500         8,468,525   

Beverages — 2.5%

      

The Coca-Cola Co.

      500,200         19,792,914   

Diageo PLC — ADR (a)

      155,200         19,801,968   
     

 

 

  
                39,594,882   

Chemicals — 3.2%

      

The Dow Chemical Co. (a)

      233,500         9,216,245   

EI du Pont de Nemours & Co. (a)

      405,500         24,816,600   

Olin Corp.

      211,800         4,767,618   

Praxair, Inc. (a)

      93,900         11,710,269   
     

 

 

  
                50,510,732   

Commercial Banks — 8.5%

      

Fifth Third Bancorp (a)

      912,200         17,359,166   

M&T Bank Corp. (a)

      33,800         3,803,514   

SunTrust Banks, Inc. (a)

      675,740         22,731,894   

The Toronto-Dominion Bank

      178,100         16,335,332   

U.S. Bancorp (a)

      647,000         24,171,920   

Wells Fargo & Co. (a)

      1,182,700         50,489,463   
     

 

 

  
                134,891,289   

Communications Equipment — 0.8%

      

Motorola Solutions, Inc. (a)

      198,100         12,385,212   

Consumer Finance — 1.4%

      

American Express Co. (a)

      268,100         21,930,580   

Containers & Packaging — 0.6%

      

MeadWestvaco Corp.

      292,300         10,186,655   

Diversified Financial Services — 4.3%

      

Citigroup, Inc.

      396,000         19,316,880   

JPMorgan Chase & Co. (a)

      971,600         50,076,264   
     

 

 

  
                69,393,144   

Diversified Telecommunication Services — 3.5%

      

AT&T Inc. (a)

      566,900         20,521,780   

BCE, Inc.

      115,700         5,036,421   

Verizon Communications, Inc. (a)

      609,500         30,785,845   
     

 

 

  
                56,344,046   

Electric Utilities — 2.6%

      

Duke Energy Corp. (a)

      97,566         6,998,409   

Edison International (a)

      135,200         6,628,856   

ITC Holdings Corp. (a)

      44,700         4,496,373   

NextEra Energy, Inc. (a)

      192,000         16,272,000   

Northeast Utilities

      156,620         6,717,432   
     

 

 

  
                41,113,070   

Electrical Equipment — 0.4%

      

Rockwell Automation, Inc. (a)

      54,400         6,006,304   

Energy Equipment & Services — 0.6%

      

Schlumberger Ltd. (a)

      99,500         9,325,140   

Food & Staples Retailing — 0.6%

      

Wal-Mart Stores, Inc. (a)

      123,900         9,509,325   

Food Products — 3.6%

      

General Mills, Inc. (a)

      287,100         14,475,582   
Common Stocks    Shares      Value  

Food Products (concluded)

      

Kraft Foods Group, Inc.

      149,195       $ 8,113,224   

Mondelez International, Inc., Class A (a)

      500,885         16,849,771   

Unilever NV (a)

      461,100         18,314,892   
     

 

 

  
                57,753,469   

Health Care Equipment & Supplies — 0.3%

      

Abbott Laboratories

      149,000         5,445,950   

Health Care Providers & Services — 0.5%

      

Quest Diagnostics, Inc. (a)

      126,000         7,548,660   

Hotels, Restaurants & Leisure — 1.5%

      

McDonald’s Corp. (a)

      249,700         24,101,044   

Household Products — 2.3%

      

Kimberly-Clark Corp. (a)

      142,750         15,417,000   

The Procter & Gamble Co. (a)

      257,900         20,825,425   
     

 

 

  
                36,242,425   

Industrial Conglomerates — 3.6%

      

3M Co. (a)

      127,600         16,058,460   

General Electric Co. (a)

      1,588,200         41,515,548   
     

 

 

  
                57,574,008   

Insurance — 5.7%

      

ACE Ltd. (a)

      174,300         16,635,192   

The Chubb Corp. (a)

      177,400         16,334,992   

MetLife, Inc. (a)

      145,850         6,900,164   

Prudential Financial, Inc. (a)

      357,500         29,096,925   

The Travelers Cos., Inc. (a)

      261,200         22,541,560   
     

 

 

  
                91,508,833   

IT Services — 1.9%

      

Automatic Data Processing, Inc. (a)

      65,060         4,877,548   

International Business Machines Corp.

      145,200         26,021,292   
     

 

 

  
                30,898,840   

Leisure Equipment & Products — 0.6%

      

Mattel, Inc. (a)

      231,700         10,280,529   

Machinery — 1.6%

      

Deere & Co.

      312,700         25,591,368   

Media — 3.1%

      

Comcast Corp., Special Class A (a)

      862,000         39,910,600   

The Walt Disney Co. (a)

      130,800         8,971,572   
     

 

 

  
                48,882,172   

Metals & Mining — 2.5%

      

BHP Billiton Ltd. — ADR (a)

      388,600         27,470,134   

Newmont Mining Corp.

      277,000         7,551,020   

Southern Copper Corp.

      157,377         4,398,687   
     

 

 

  
                39,419,841   

Multi-Utilities — 2.6%

      

Dominion Resources, Inc. (a)

      259,700         16,555,875   

Public Service Enterprise Group, Inc.

      301,265         10,092,378   

Sempra Energy (a)

      90,000         8,202,600   

Wisconsin Energy Corp.

      157,700         6,640,747   
     

 

 

  
                41,491,600   

Oil, Gas & Consumable Fuels — 13.2%

      

Chevron Corp. (a)

      420,900         50,491,164   

ConocoPhillips

      121,660         8,917,678   

Enbridge, Inc.

      506,100         21,939,980   

Exxon Mobil Corp. (a)

      373,300         33,455,146   

Kinder Morgan, Inc. (a)

      318,100         11,232,111   

Marathon Oil Corp. (a)

      389,300         13,726,718   

Marathon Petroleum Corp. (a)

      184,800         13,242,768   

Occidental Petroleum Corp. (a)

      172,700         16,593,016   
 

 

See Notes to Financial Statements.

 

52    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (continued)      BlackRock Enhanced Equity Dividend Trust (BDJ)   
     (Percentages shown are based on Net Assets)   

 

Common Stocks    Shares      Value  

Oil, Gas & Consumable Fuels (concluded)

      

Phillips 66 (a)

      85,450       $ 5,505,543   

Royal Dutch Shell PLC — ADR (a)

      61,900         4,126,254   

Spectra Energy Corp. (a)

      204,000         7,256,280   

Total SA — ADR (a)

      383,400         23,456,412   
     

 

 

  
                209,943,070   

Paper & Forest Products — 0.7%

      

International Paper Co. (a)

      256,150         11,426,851   

Pharmaceuticals — 8.3%

      

AbbVie, Inc. (a)

      146,727         7,108,923   

Bristol-Myers Squibb Co. (a)

      519,700         27,294,644   

Johnson & Johnson

      302,800         28,042,308   

Merck & Co., Inc. (a)

      663,500         29,917,215   

Pfizer, Inc. (a)

      1,293,300         39,678,444   
     

 

 

  
                132,041,534   

Real Estate Investment Trusts (REITs) — 0.8%

      

American Tower Corp. (a)

      75,300         5,975,055   

Weyerhaeuser Co. (a)

      237,200         7,210,880   
     

 

 

  
                13,185,935   

Road & Rail — 0.9%

      

Union Pacific Corp. (a)

      93,700         14,186,180   

Semiconductors & Semiconductor Equipment — 1.0%

  

   

Intel Corp. (a)

      660,400         16,133,572   

Software — 1.5%

      

Microsoft Corp. (a)

      684,700         24,204,145   

Specialty Retail — 2.3%

      

The Home Depot, Inc. (a)

      481,600         37,511,824   

Textiles, Apparel & Luxury Goods — 1.1%

      

VF Corp. (a)

      79,800         17,157,000   
Common Stocks    Shares      Value  

Tobacco — 3.4%

      

Altria Group, Inc. (a)

      253,800       $ 9,448,974   

Lorillard, Inc.

      283,500         14,461,335   

Philip Morris International, Inc. (a)

      331,600         29,552,192   
     

 

 

  
                53,462,501   

Water Utilities — 0.7%

      

American Water Works Co., Inc.

      260,900         11,184,783   

Total Long-Term Investments

(Cost — $1,404,900,335) — 100.2%

               1,597,602,814   
     
Short-Term Securities                

BlackRock Liquidity Funds, TempFund, Institutional Class, 0.03% (b)(c)

      48,920,346         48,920,346   

Total Short-Term Securities

(Cost — $48,920,346) — 3.1%

               48,920,346   

Total Investments Before Options Written

(Cost — $1,453,820,681) — 103.3%

               1,646,523,160   
     
Options Written                

(Premiums Received — $12,448,564) — (1.3)%

               (20,305,989 ) 

Total Investments Net of Options Written — 102.0%

  

      1,626,217,171   

Liabilities in Excess of Other Assets — (2.0)%

         (31,993,795 ) 
     

 

 

  

Net Assets — 100.0%

       $ 1,594,223,376   
     

 

 

  
 

 

Notes to Schedule of Investments

 

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

 

(b) Represents the current yield as of report date.

 

(c) Investments in companies considered to be an affiliate of the Trust during the year ended October 31, 2013, 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,  2012		     

Net

Activity

     Shares/ Beneficial
Interest Held at
October 31, 2013		      Income      Realized
Gain		  

BlackRock Liquidity Funds, TempFund, Institutional Class

      112,624,435         (63,704,089 )      48,920,346       $ 58,501       $ 660   

BlackRock Liquidity Series, LLC Money Market Series

    $ 4,054,445       $ (4,054,445 )      —       $ 202         —   

 

Ÿ  

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 the investment adivsor. These definitions may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease.

 

Ÿ  

Exchange-traded options written as of October 31, 2013 were as follows:

 

Description   

Put/

Call

     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

McDonald’s Corp.

      Call         USD         99.00         11/01/13         459       $ (918 ) 

MetLife, Inc.

      Call         USD         50.00         11/01/13         700         (1,400 ) 

American Tower Corp.

      Call         USD         76.00         11/04/13         207         (70,380 ) 

Bristol-Myers Squibb Co.

      Call         USD         47.00         11/04/13         500         (277,500 ) 

Bristol-Myers Squibb Co.

      Call         USD         47.50         11/04/13         1,870         (939,675 ) 

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    53

Table of Contents
Schedule of Investments (continued)      BlackRock Enhanced Equity Dividend Trust (BDJ)   

 

 

Ÿ  

Exchange-traded options written as of October 31, 2013 were as follows: (continued)

 

Description    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

EI du Pont de Nemours & Co.

      Call         USD         60.00         11/04/13         576       $ (71,712 ) 

EI du Pont de Nemours & Co.

      Call         USD         60.50         11/04/13         574         (43,624 ) 

Pfizer, Inc.

      Call         USD         29.00         11/04/13         113         (19,266 ) 

Pfizer, Inc.

      Call         USD         29.50         11/04/13         340         (40,800 ) 

The Procter & Gamble Co.

      Call         USD         78.00         11/04/13         378         (106,218 ) 

United Technologies Corp.

      Call         USD         106.00         11/04/13         708         (38,586 ) 

Wells Fargo & Co.

      Call         USD         42.50         11/04/13         1,774         (47,898 ) 

Wells Fargo & Co.

      Call         USD         43.00         11/04/13         357         (1,428 ) 

Exxon Mobil Corp.

      Call         USD         88.00         11/08/13         513         (96,701 ) 

JPMorgan Chase & Co.

      Call         USD         53.50         11/08/13         1,870         (10,285 ) 

Union Pacific Corp.

      Call         USD         155.00         11/08/13         282         (6,627 ) 

General Mills, Inc.

      Call         USD         49.25         11/16/13         1,579         (218,939 ) 

United Technologies Corp.

      Call         USD         112.50         11/16/13         646         (1,973 ) 

VF Corp.

      Call         USD         214.00         11/16/13         328         (123,150 ) 

The Walt Disney Co.

      Call         USD         65.50         11/16/13         720         (258,789 ) 

AbbVie, Inc.

      Call         USD         47.50         11/18/13         311         (46,650 ) 

ACE Ltd.

      Call         USD         97.50         11/18/13         434         (15,190 ) 

American Tower Corp.

      Call         USD         77.50         11/18/13         207         (50,198 ) 

AT&T Inc.

      Call         USD         35.00         11/18/13         550         (73,975 ) 

Automatic Data Processing, Inc.

      Call         USD         75.00         11/18/13         357         (28,560 ) 

BHP Billiton Ltd. — ADR

      Call         USD         67.50         11/18/13         713         (245,985 ) 

BHP Billiton Ltd. — ADR

      Call         USD         70.00         11/18/13         892         (136,030 ) 

Chevron Corp.

      Call         USD         120.00         11/18/13         680         (99,960 ) 

The Chubb Corp.

      Call         USD         90.00         11/18/13         964         (254,978 ) 

Comcast Corp., Special Class A

      Call         USD         44.00         11/18/13         1,480         (358,900 ) 

Comcast Corp., Special Class A

      Call         USD         47.00         11/18/13         1,825         (73,000 ) 

Dominion Resources, Inc.

      Call         USD         65.00         11/18/13         1,428         (64,260 ) 

The Dow Chemical Co.

      Call         USD         40.00         11/18/13         646         (32,946 ) 

The Dow Chemical Co.

      Call         USD         41.00         11/18/13         638         (13,398 ) 

EI du Pont de Nemours & Co.

      Call         USD         60.00         11/18/13         1,080         (157,680 ) 

Fifth Third Bancorp

      Call         USD         19.00         11/18/13         5,017         (130,442 ) 

The Home Depot, Inc.

      Call         USD         77.50         11/18/13         661         (81,964 ) 

Intel Corp.

      Call         USD         24.00         11/18/13         1,706         (90,418 ) 

International Paper Co.

      Call         USD         46.00         11/18/13         353         (7,590 ) 

ITC Holdings Corp.

      Call         USD         95.00         11/18/13         245         (147,000 ) 

Johnson Controls, Inc.

      Call         USD         44.00         11/18/13         1,010         (249,975 ) 

Kimberly-Clark Corp.

      Call         USD         100.00         11/18/13         785         (651,550 ) 

Kinder Morgan, Inc.

      Call         USD         37.50         11/18/13         1,525         (9,913 ) 

M&T Bank Corp.

      Call         USD         115.00         11/18/13         185         (8,325 ) 

Marathon Petroleum Corp.

      Call         USD         72.50         11/18/13         505         (69,438 ) 

Marathon Petroleum Corp.

      Call         USD         75.00         11/18/13         505         (31,562 ) 

Mattel, Inc.

      Call         USD         44.00         11/18/13         1,274         (101,920 ) 

Merck & Co., Inc.

      Call         USD         49.00         11/18/13         1,031         (1,546 ) 

Merck & Co., Inc.

      Call         USD         50.00         11/18/13         1,044         (3,132 ) 

MetLife, Inc.

      Call         USD         49.00         11/18/13         416         (7,072 ) 

Microsoft Corp.

      Call         USD         34.00         11/18/13         475         (70,775 ) 

Microsoft Corp.

      Call         USD         35.00         11/18/13         360         (25,920 ) 

Microsoft Corp.

      Call         USD         36.00         11/18/13         2,210         (54,145 ) 

Mondelez International, Inc., Class A

      Call         USD         33.00         11/18/13         1,845         (212,175 ) 

Mondelez International, Inc., Class A

      Call         USD         34.00         11/18/13         910         (53,690 ) 

Motorola Solutions, Inc.

      Call         USD         60.00         11/18/13         365         (102,382 ) 

Motorola Solutions, Inc.

      Call         USD         62.50         11/18/13         865         (86,068 ) 

 

See Notes to Financial Statements.

 

54    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (continued)      BlackRock Enhanced Equity Dividend Trust (BDJ)   

 

 

Ÿ  

Exchange-traded options written as of October 31, 2013 were as follows: (continued)

 

Description    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

NextEra Energy, Inc.

      Call         USD         82.50         11/18/13         264       $ (73,260 ) 

NextEra Energy, Inc.

      Call         USD         85.00         11/18/13         265         (29,812 ) 

Northrop Grumman Corp.

      Call         USD         97.50         11/18/13         467         (481,010 ) 

Occidental Petroleum Corp.

      Call         USD         92.50         11/18/13         472         (198,240 ) 

Philip Morris International, Inc.

      Call         USD         90.00         11/18/13         320         (18,720 ) 

Phillips 66

      Call         USD         60.00         11/18/13         159         (73,140 ) 

Phillips 66

      Call         USD         62.50         11/18/13         156         (39,390 ) 

Phillips 66

      Call         USD         65.00         11/18/13         154         (16,940 ) 

Praxair, Inc.

      Call         USD         125.00         11/18/13         516         (61,920 ) 

The Procter & Gamble Co.

      Call         USD         80.00         11/18/13         1,040         (147,160 ) 

Prudential Financial, Inc.

      Call         USD         80.00         11/18/13         147         (37,338 ) 

Prudential Financial, Inc.

      Call         USD         82.50         11/18/13         1,160         (140,940 ) 

Rockwell Automation, Inc.

      Call         USD         110.00         11/18/13         300         (89,250 ) 

Schlumberger Ltd.

      Call         USD         90.00         11/18/13         280         (114,800 ) 

Schlumberger Ltd.

      Call         USD         95.00         11/18/13         270         (22,545 ) 

Sempra Energy

      Call         USD         90.00         11/18/13         131         (26,527 ) 

Spectra Energy Corp.

      Call         USD         35.00         11/18/13         567         (39,690 ) 

SunTrust Banks, Inc.

      Call         USD         34.00         11/18/13         2,055         (73,980 ) 

Total SA — ADR

      Call         USD         60.00         11/18/13         1,248         (190,320 ) 

The Travelers Cos., Inc.

      Call         USD         87.50         11/18/13         426         (21,300 ) 

U.S. Bancorp

      Call         USD         38.00         11/18/13         1,892         (24,596 ) 

United Parcel Service, Inc., Class B

      Call         USD         92.50         11/18/13         1,050         (614,250 ) 

Verizon Communications, Inc.

      Call         USD         47.00         11/18/13         771         (273,705 ) 

Verizon Communications, Inc.

      Call         USD         49.00         11/18/13         1,528         (258,996 ) 

VF Corp.

      Call         USD         210.00         11/18/13         110         (69,300 ) 

Weyerhaeuser Co.

      Call         USD         31.00         11/18/13         652         (17,930 ) 

3M Co.

      Call         USD         126.00         11/22/13         342         (47,538 ) 

Bristol-Myers Squibb Co.

      Call         USD         50.00         11/22/13         500         (140,750 ) 

Pfizer, Inc.

      Call         USD         30.50         11/22/13         3,333         (139,986 ) 

U.S. Bancorp

      Call         USD         38.00         11/22/13         1,666         (34,986 ) 

Verizon Communications, Inc.

      Call         USD         50.00         11/22/13         676         (72,332 ) 

Wells Fargo & Co.

      Call         USD         43.50         11/22/13         830         (16,600 ) 

AT&T Inc.

      Call         USD         36.00         11/29/13         550         (38,500 ) 

General Electric Co.

      Call         USD         26.00         11/29/13         2,650         (151,050 ) 

Intel Corp.

      Call         USD         24.50         11/29/13         211         (7,280 ) 

JPMorgan Chase & Co.

      Call         USD         53.00         11/29/13         750         (37,500 ) 

Union Pacific Corp.

      Call         USD         160.00         11/29/13         233         (4,310 ) 

Wal-Mart Stores, Inc.

      Call         USD         78.00         11/29/13         681         (45,287 ) 

Exxon Mobil Corp.

      Call         USD         90.00         12/06/13         256         (21,760 ) 

Altria Group, Inc.

      Call         USD         36.00         12/23/13         528         (83,160 ) 

Altria Group, Inc.

      Call         USD         37.00         12/23/13         180         (16,020 ) 

Altria Group, Inc.

      Call         USD         38.00         12/23/13         350         (14,350 ) 

American Express Co.

      Call         USD         82.50         12/23/13         717         (130,853 ) 

BHP Billiton Ltd. — ADR

      Call         USD         75.00         12/23/13         530         (33,390 ) 

Chevron Corp.

      Call         USD         120.00         12/23/13         680         (146,880 ) 

Duke Energy Corp.

      Call         USD         72.50         12/23/13         536         (41,540 ) 

Edison International

      Call         USD         50.00         12/23/13         743         (48,295 ) 

The Home Depot, Inc.

      Call         USD         77.50         12/23/13         795         (185,633 ) 

Marathon Oil Corp.

      Call         USD         37.00         12/23/13         372         (17,298 ) 

NextEra Energy, Inc.

      Call         USD         87.50         12/23/13         265         (21,200 ) 

Occidental Petroleum Corp.

      Call         USD         100.00         12/23/13         476         (65,926 ) 

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    55

Table of Contents
Schedule of Investments (continued)      BlackRock Enhanced Equity Dividend Trust (BDJ)   

 

 

Ÿ  

Exchange-traded options written as of October 31, 2013 were as follows: (concluded)

 

Description    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Philip Morris International, Inc.

      Call         USD         90.00         12/23/13         912       $ (130,872 ) 

Philip Morris International, Inc.

      Call         USD         92.50         12/23/13         195         (11,505 ) 

Prudential Financial, Inc.

      Call         USD         85.00         12/23/13         660         (78,540 ) 

Quest Diagnostics, Inc.

      Call         USD         60.00         12/23/13         227         (36,888 ) 

Royal Dutch Shell PLC — ADR

      Call         USD         70.00         12/23/13         340         (9,350 ) 

Spectra Energy Corp.

      Call         USD         36.00         12/23/13         554         (27,700 ) 

The Travelers Cos., Inc.

      Call         USD         87.50         12/23/13         333         (39,128 ) 

Verizon Communications, Inc.

      Call         USD         52.50         12/23/13         400         (18,200 ) 

 

  

Total

                   $ (11,294,247 ) 
                 

 

 

  

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows:

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

3M Co.

    Morgan Stanley & Co. International PLC      Call         USD         120.53         11/04/13         36,000       $ (196,540 ) 

The Home Depot, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         77.85         11/04/13         39,700         (21,111 ) 

Microsoft Corp.

    Citibank N.A.      Call         USD         34.23         11/04/13         72,000         (84,959 ) 

NextEra Energy, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         81.65         11/04/13         26,300         (81,715 ) 

Pfizer, Inc.

    Deutsche Bank AG      Call         USD         29.39         11/04/13         45,300         (59,322 ) 

SunTrust Banks, Inc.

    Bank of America N.A.      Call         USD         33.36         11/04/13         85,000         (37,142 ) 

Total SA — ADR

    Citibank N.A.      Call         USD         57.69         11/04/13         66,100         (230,952 ) 

Weyerhaeuser Co.

    Morgan Stanley & Co. International PLC      Call         USD         29.85         11/04/13         65,200         (41,259 ) 

Johnson & Johnson

    Credit Suisse International      Call         USD         89.62         11/06/13         83,200         (251,709 ) 

International Paper Co.

    Citibank N.A.      Call         USD         48.52         11/07/13         35,400         (45 ) 

Pfizer, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         29.11         11/12/13         287,500         (451,375 ) 

Wisconsin Energy Corp.

    Morgan Stanley & Co. International PLC      Call         USD         40.05         11/15/13         86,800         (178,808 ) 

Marathon Oil Corp.

    Citibank N.A.      Call         USD         34.52         11/20/13         108,000         (126,014 ) 

Honeywell International, Inc.

    Citibank N.A.      Call         USD         84.55         11/22/13         61,200         (146,773 ) 

Kraft Foods Group, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         53.61         11/22/13         82,000         (114,024 ) 

Northeast Utilities

    Morgan Stanley & Co. International PLC      Call         USD         41.61         11/22/13         46,800         (69,341 ) 

Olin Corp.

    Morgan Stanley & Co. International PLC      Call         USD         23.09         11/22/13         58,200         (18,967 ) 

Raytheon Co.

    Citibank N.A.      Call         USD         76.06         11/22/13         87,800         (596,353 ) 

AbbVie, Inc.

    UBS AG      Call         USD         49.77         11/25/13         49,500         (27,633 ) 

Altria Group, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         35.14         11/25/13         33,800         (74,864 ) 

American Express Co.

    Morgan Stanley & Co. International PLC      Call         USD         75.40         11/25/13         75,700         (511,226 ) 

American Water Works Co., Inc.

    Deutsche Bank AG      Call         USD         41.20         11/25/13         33,700         (56,346 ) 

Diageo PLC — ADR

    Citibank N.A.      Call         USD         126.79         11/25/13         42,300         (105,556 ) 

Enbridge, Inc.

    Deutsche Bank AG      Call         CAD         43.71         11/25/13         41,000         (58,748 ) 

Lorillard, Inc.

    Credit Suisse International      Call         USD         48.71         11/25/13         77,500         (200,348 ) 

Unilever NV

    Credit Suisse International      Call         USD         38.04         11/25/13         117,800         (197,904 ) 

Wells Fargo & Co.

    Citibank N.A.      Call         USD         41.97         11/25/13         271,100         (241,295 ) 

American Water Works Co., Inc.

    Deutsche Bank AG      Call         USD         41.26         12/02/13         78,600         (126,546 ) 

Citigroup, Inc.

    Bank of America N.A.      Call         USD         49.25         12/02/13         144,300         (133,459 ) 

Comcast Corp., Special Class A

    Credit Suisse International      Call         USD         43.47         12/02/13         143,600         (512,352 ) 

ConocoPhillips

    Citibank N.A.      Call         USD         70.69         12/02/13         67,000         (235,416 ) 

Deere & Co.

    Credit Suisse International      Call         USD         83.61         12/02/13         86,000         (101,212 ) 

Johnson & Johnson

    Credit Suisse International      Call         USD         89.62         12/02/13         83,200         (248,560 ) 

Kinder Morgan, Inc.

    Credit Suisse International      Call         USD         36.19         12/02/13         22,000         (10,625 ) 

Lorillard, Inc.

    Citibank N.A.      Call         USD         45.65         12/02/13         78,400         (420,616 ) 

Olin Corp.

    Morgan Stanley & Co. International PLC      Call         USD         22.98         12/02/13         58,200         (26,661 ) 

The Toronto-Dominion Bank

    Citibank N.A.      Call         USD         92.14         12/02/13         47,300         (53,426 ) 

The Toronto-Dominion Bank

    Credit Suisse International      Call         USD         90.18         12/02/13         50,600         (113,069 ) 

 

See Notes to Financial Statements.

 

56    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (continued)      BlackRock Enhanced Equity Dividend Trust (BDJ)   

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows: (concluded)

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Unilever NV

    UBS AG      Call         USD         40.40         12/02/13         47,500       $ (16,899 ) 

Diageo PLC — ADR

    Citibank N.A.      Call         USD         132.87         12/04/13         43,000         (25,620 ) 

Abbott Laboratories

    Citibank N.A.      Call         USD         37.41         12/05/13         82,000         (30,256 ) 

Northrop Grumman Corp.

    Morgan Stanley & Co. International PLC      Call         USD         102.23         12/05/13         45,600         (256,585 ) 

SunTrust Banks, Inc.

    Citibank N.A.      Call         USD         34.85         12/05/13         81,000         (23,771 ) 

Total SA — ADR

    JPMorgan Chase Bank N.A.      Call         USD         62.75         12/05/13         19,900         (11,710 ) 

Public Service Enterprise Group, Inc.

    Deutsche Bank AG      Call         USD         34.22         12/06/13         28,300         (6,351 ) 

Public Service Enterprise Group, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         33.51         12/06/13         14,365         (6,509 ) 

American Water Works Co., Inc.

    Citibank N.A.      Call         USD         43.69         12/09/13         15,400         (6,043 ) 

BCE, Inc.

    Citibank N.A.      Call         USD         43.90         12/09/13         63,600         (28,107 ) 

Enbridge, Inc.

    Citibank N.A.      Call         CAD         42.46         12/09/13         237,200         (623,342 ) 

Intel Corp.

    Citibank N.A.      Call         USD         23.38         12/09/13         171,500         (187,793 ) 

General Electric Co.

    Morgan Stanley & Co. International PLC      Call         USD         26.32         12/10/13         304,200         (151,063 ) 

Honeywell International, Inc.

    Citibank N.A.      Call         USD         84.55         12/10/13         61,200         (174,056 ) 

ACE Ltd.

    Morgan Stanley & Co. International PLC      Call         USD         94.94         12/11/13         52,400         (109,432 ) 

Sempra Energy

    Morgan Stanley & Co. International PLC      Call         USD         88.06         12/11/13         36,400         (172,527 ) 

Northeast Utilities

    Citibank N.A.      Call         USD         41.73         12/12/13         39,300         (47,716 ) 

The Travelers Cos., Inc.

    Morgan Stanley & Co. International PLC      Call         USD         85.85         12/12/13         67,700         (112,366 ) 

American Water Works Co., Inc.

    Morgan Stanley & Co. International PLC      Call         USD         41.15         12/16/13         15,700         (28,046 ) 

Deere & Co.

    Credit Suisse International      Call         USD         83.61         12/16/13         86,000         (134,438 ) 

General Electric Co.

    Morgan Stanley & Co. International PLC      Call         USD         26.32         12/16/13         304,200         (163,778 ) 

Public Service Enterprise Group, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         34.05         12/18/13         123,000         (43,856 ) 

Raytheon Co.

    Morgan Stanley & Co. International PLC      Call         USD         77.99         12/19/13         87,800         (489,207 ) 

Total

                      $ (9,011,742 ) 
                    

 

 

  

 

Ÿ  

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:

 

  Ÿ  

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

 

  Ÿ  

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)

 

  Ÿ  

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 fair value hierarchy classification 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, please refer to Note 2 of the Notes to Financial Statements.

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    57

Table of Contents
Schedule of Investments (concluded)      BlackRock Enhanced Equity Dividend Trust (BDJ)   

 

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy as of October 31, 2013:

 

 

  
     Level 1     Level 2     Level 3      Total  

 

  

Assets:

          

Investments:

          

Long-Term Investments:

          

Common Stocks1

    $ 1,597,602,814        —        —       $ 1,597,602,814   

Short-Term Securities

      48,920,346        —        —         48,920,346   

 

  

Total

    $ 1,646,523,160        —        —       $ 1,646,523,160   
  

 

 

  

1    See above Schedule of Investments for values in each industry.

       

         

 

  
     Level 1     Level 2     Level 3      Total  

 

  

Derivative Financial Instruments2

          

Liabilities:

          

Equity contracts

    $ (10,691,394 )    $ (9,614,595 )      —       $ (20,305,989 ) 

 

  

2    Derivative financial instruments are options written, 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, 2013, such assets are categorized within the disclosure hierarchy as follows:    

 

  
     Level 1     Level 2     Level 3      Total  

 

  

Assets:

          

Cash

    $ 7,623        —        —       $ 7,623   

Foreign currency at value

      1,487        —        —         1,487   

Cash pledged as collateral for options written

      100,000        —        —         100,000   

 

  

Total

    $ 109,110        —        —       $ 109,110   
  

 

 

  

There were no transfers between Levels during the year ended October 31, 2013.

 

See Notes to Financial Statements.

 

58    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments October 31, 2013      BlackRock Global Opportunities Equity Trust (BOE)   
     (Percentages shown are based on Net Assets)   

 

Common Stocks    Shares      Value  

Australia — 0.3%

      

Treasury Wine Estates Ltd.

      935,448       $ 4,154,374   

Belgium — 1.7%

      

Anheuser-Busch InBev NV

      195,659         20,282,815   

Brazil — 1.0%

      

Vale SA — ADR

      705,600         11,296,656   

China — 1.6%

      

21Vianet Group, Inc. — ADR (a)(b)

      310,824         5,594,832   

Anhui Conch Cement Co. Ltd., Class H

      1,944,560         6,784,515   

SINA Corp. (a)(b)

      68,700         5,740,572   
     

 

 

  
                18,119,919   

France — 8.5%

      

AXA SA

      513,100         12,784,161   

BNP Paribas SA

      139,380         10,282,542   

Kering

      38,100         8,634,664   

Rexel SA

      268,200         6,718,565   

Schneider Electric SA

      168,800         14,204,194   

Societe Generale SA

      178,400         10,077,775   

Technip SA

      117,037         12,258,347   

Valeo SA

      81,886         8,132,898   

Vivendi SA

      604,700         15,310,905   
     

 

 

  
                98,404,051   

Germany — 1.8%

      

Daimler AG

      188,000         15,392,532   

Telefonica Deutschland Holding AG

      651,019         5,128,131   
     

 

 

  
                20,520,663   

Hong Kong — 2.2%

      

AIA Group Ltd.

      1,712,700         8,696,805   

Melco Crown Entertainment Ltd.— ADR (a)

      345,600         11,460,096   

Samsonite International SA

      2,008,100         5,489,043   
     

 

 

  
                25,645,944   

Indonesia — 1.3%

      

Global Mediacom Tbk PT

      29,625,500         5,017,912   

Matahari Department Store Tbk PT (a)

      8,998,500         9,818,723   
     

 

 

  
                14,836,635   

Ireland — 1.5%

      

CRH PLC

      343,700         8,393,142   

Green REIT PLC (a)

      5,625,299         9,165,332   
     

 

 

  
                17,558,474   

Italy — 1.6%

      

Banca Generali SpA

      378,000         9,889,968   

Mediaset SpA (a)(b)

      1,670,200         8,340,491   
     

 

 

  
                18,230,459   

Japan — 7.6%

      

Kenedix Realty Investment Corp. — REIT

      1,043         4,685,384   

Nabtesco Corp.

      375,100         9,155,260   

Shinsei Bank Ltd.

      4,193,000         9,817,098   

SoftBank Corp.

      169,600         12,665,543   

Sony Corp.

      584,900         10,203,397   

Sumitomo Mitsui Financial Group, Inc.

      240,300         11,615,115   

Tokyo Tatemono Co. Ltd.

      995,000         9,279,111   

Tokyu Fudosan Holdings Corp. (a)

      496,500         4,877,647   

Toyota Motor Corp.

      185,600         12,033,968   

Yahoo! Japan Corp.

      846,200         3,932,812   
     

 

 

  
                88,265,335   

Mexico — 0.9%

      

Fomento Economico Mexicano SAB de CV — ADR (b)

      108,300         10,104,390   
Common Stocks    Shares      Value  

Netherlands — 1.1%

      

Randstad Holding NV

      207,317       $ 12,768,431   

New Zealand — 0.7%

      

Xero Ltd. (Acquired 10/15/13,
Cost $5,317,368) (a)(c)

      350,000         7,690,084   

Russia — 1.7%

      

Eurasia Drilling Co. Ltd. — GDR

      281,739         11,931,647   

Yandex NV (a)(b)

      224,600         8,278,756   
     

 

 

  
                20,210,403   

South Korea — 0.4%

      

Samsung Heavy Industries Co. Ltd.

      137,400         5,038,094   

Spain — 3.2%

      

Cie Automotive SA

      958,086         10,406,767   

NH Hoteles SA (a)

      3,075,278         16,075,573   

Sacyr SA (a)

      1,999,515         10,761,227   
     

 

 

  
                37,243,567   

Sweden — 2.4%

      

SKF AB, B Shares

      435,300         11,534,017   

Svenska Cellulosa AB, B Shares

      559,827         15,871,770   
     

 

 

  
                27,405,787   

Switzerland — 4.7%

      

Glencore Xstrata PLC

      2,417,300         13,155,582   

Novartis AG

      229,500         17,814,383   

Roche Holding AG

      83,400         23,063,054   
     

 

 

  
                54,033,019   

Thailand — 0.7%

      

PTT Global Chemical PCL

      3,432,300         8,655,432   

United Kingdom — 10.5%

      

APR Energy PLC

      525,118         9,766,974   

ASOS PLC (a)

      35,000         3,181,763   

Aveva Group PLC

      194,216         8,047,291   

Barclays PLC — ADR (b)

      92,569         1,556,085   

Blinkx PLC (a)

      2,760,000         7,253,308   

Crest Nicholson Holdings PLC (a)

      2,178,678         13,519,143   

esure Group PLC

      1,864,890         6,772,774   

Foxtons Group PLC (a)

      1,621,766         8,288,645   

Liberty Global PLC, Class A (a)

      67,730         5,308,000   

Lloyds Banking Group PLC (a)

      6,989,600         8,644,793   

Partnership Assurance Group PLC (a)

      1,406,900         9,203,829   

Perform Group PLC (a)

      1,313,498         11,794,040   

Platform Acquisition Holdings Ltd. (a)

      628,366         6,569,567   

TCS Group Holding PLC (a)

      395,900         6,787,705   

Vodafone Group PLC — ADR (b)

      195,600         7,201,992   

William Hill PLC

      1,208,000         7,765,119   
     

 

 

  
                121,661,028   

United States — 44.4%

      

AbbVie, Inc. (b)

      181,023         8,770,564   

Acuity Brands, Inc. (b)

      86,000         8,643,860   

Adobe Systems, Inc. (a)

      121,100         6,563,620   

Amgen, Inc.

      53,900         6,252,400   

Apple, Inc. (b)

      51,790         27,052,506   

Autodesk, Inc. (a)(b)

      138,800         5,539,508   

Axiall Corp. (b)

      295,300         11,484,217   

BankUnited, Inc.

      242,100         7,449,417   

The Boeing Co. (b)

      48,500         6,329,250   

Cabot Oil & Gas Corp. (b)

      295,000         10,419,400   

CBS Corp., Class B

      147,800         8,740,892   

Celgene Corp. (a)

      61,800         9,176,682   

Citigroup, Inc. (b)

      283,261         13,817,472   
 

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    59

Table of Contents
Schedule of Investments (continued)      BlackRock Global Opportunities Equity Trust (BOE)   
     (Percentages shown are based on Net Assets)   

 

Common Stocks    Shares      Value  

United States (concluded)

      

Concho Resources, Inc. (a)(b)

      92,800       $ 10,264,608   

Crown Holdings, Inc. (a)(b)

      162,200         7,071,920   

CSX Corp. (b)

      436,200         11,367,372   

Discovery Communications, Inc., Class A (a)

      105,100         9,345,492   

Eastman Chemical Co. (b)

      119,100         9,383,889   

Eaton Corp. PLC (b)

      143,100         10,097,136   

eBay, Inc. (a)(b)

      225,200         11,870,292   

Facebook, Inc., Class A (a)(b)

      323,600         16,264,136   

Flowserve Corp.

      185,700         12,900,579   

General Motors Co. (a)(b)

      281,600         10,405,120   

Genworth Financial, Inc., Class A (a)(b)

      851,200         12,367,936   

Gilead Sciences, Inc. (a)(b)

      177,201         12,579,499   

Google, Inc., Class A (a)(b)

      35,393         36,475,318   

The Hain Celestial Group, Inc. (a)(b)

      127,941         10,648,529   

Hertz Global Holdings, Inc. (a)

      532,300         12,221,608   

International Paper Co. (b)

      224,100         9,997,101   

JPMorgan Chase & Co. (b)

      195,805         10,091,790   

Kennedy-Wilson Holdings, Inc.

      663,600         13,298,544   

Las Vegas Sands Corp. (b)

      113,600         7,976,992   

Lowe’s Cos., Inc.

      182,300         9,074,894   

Mondelez International, Inc., Class A (b)

      356,500         11,992,660   

National Oilwell Varco, Inc.

      160,000         12,988,800   

Oasis Petroleum, Inc. (a)(b)

      258,722         13,776,947   

Ralph Lauren Corp. (b)

      48,300         8,000,412   

Roper Industries, Inc. (b)

      140,300         17,791,443   

Rowan Cos. PLC, Class A (a)

      334,945         12,084,816   

Sensata Technologies Holding NV (a)

      148,000         5,569,240   

ServiceNow, Inc. (a)(b)

      187,100         10,217,531   

United Rentals, Inc. (a)(b)

      195,748         12,643,363   

US Airways Group, Inc. (a)(b)

      224,100         4,923,477   

Visa, Inc., Class A (b)

      60,300         11,859,201   

Whirlpool Corp. (b)

      44,100         6,439,041   

WisdomTree Investments, Inc. (a)(b)

      916,500         12,739,350   
     

 

 

  
                514,968,824   

Total Common Stocks — 99.8%

               1,157,094,384   
     
                  
Warrants (d)    Shares      Value  

United Kingdom — 0.0%

      

Platform Acquisition Holdings Ltd., Expires 7/31/20 (a)

      269,302       $ —   

Total Long Term Investments

(Cost — $1,017,990,297) — 99.8%

               1,157,094,384   
     
Short-Term Securities                

BlackRock Liquidity Funds, TempFund, Institutional Class, 0.03% (e)(f)

      36,387,584         36,387,584   

Total Short-Term Securities

(Cost — $36,387,584) — 3.2%

               36,387,584   

Total Investments Before Options Written

(Cost — $1,054,377,881) — 103.0%

               1,193,481,968   
     
Options Written                

(Premiums Received — $15,614,350) — (1.7)%

               (19,864,084 ) 

Total Investments Net of Options Written — 101.3%

  

      1,173,617,884   

Liabilities in Excess of Other Assets — (1.3)%

         (14,545,617 ) 
     

 

 

  

Net Assets — 100.0%

       $ 1,159,072,267   
     

 

 

  
 
Notes to Schedule of Investments

 

(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) Restricted security as to resale. As of October 31, 2013 the Trust held 0.7% of its net assets, with a current market value of $7,690,084 and an original cost of $5,317,368, in this security.

 

(d) Warrants entitle the Trust to purchase a predetermined number of shares of common stock and are non-income producing. The purchase price and number of shares are subject to adjustment under certain conditions until the expiration date of the warrants, if any.

 

(e) Represents the current yield as of report date.

 

(f) Investments in issuers considered to be an affiliate of the Trust during the year ended October 31, 2013, 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, 2012		     

Net

Activity

     Shares Held at
October 31, 2013		      Income     

Realized

Gain

  

BlackRock Liquidity Funds, TempFund, Institutional Class

      54,961,782         (18,574,198 )      36,387,584       $ 31,928       $ 395   

 

See Notes to Financial Statements.

 

60    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (continued)      BlackRock Global Opportunities Equity Trust (BOE)   

 

Ÿ  

Foreign currency exchange contracts as of October 31, 2013 were as follows:

 

Currency

Purchased

       

Currency

Sold

     Counterparty   Settlement
Date		        Unrealized
Appreciation
(Depreciation)		  
EUR        36,000           USD           49,453      Citibank N.A.     11/01/13         $ (574 ) 
GBP        19,000           USD           30,463      Citibank N.A.     11/01/13           2   
USD        33,751           GBP           21,000      Deutsche Bank AG     11/01/13           79   
USD        3,594,284           JPY           351,736,644      Canadian Imperial Bank of Commerce     11/01/13           17,180   
EUR        69,000           USD           93,810      UBS AG     11/04/13           (124 ) 
USD        5,318           EUR           3,894      Deutsche Bank AG     11/04/13           30   
USD        245,913           GBP           153,370      Deutsche Bank AG     11/04/13           6   
CHF        5,881,997           USD           6,492,987      Canadian Imperial Bank of Commerce     11/05/13           (10,162 ) 
EUR        451,301           USD           613,455      Deutsche Bank AG     11/05/13           (692 ) 
USD        2,886,016           JPY           283,724,206      Canadian Imperial Bank of Commerce     11/05/13           517   
Total                         $ 6,262   
                       

 

 

  

 

Ÿ  

Exchange-traded options written as of October 31, 2013 were as follows:

 

Description    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

General Motors Co.

      Call         USD         36.50         11/04/13         360       $ (19,620 ) 

General Motors Co.

      Call         USD         37.50         11/04/13         360         (2,160 ) 

Google, Inc., Class A

      Call         USD         895.00         11/04/13         97         (1,321,625 ) 

SINA Corp.

      Call         USD         88.00         11/04/13         125         (375 ) 

SINA Corp.

      Call         USD         92.50         11/04/13         126         (567 ) 

Apple, Inc.

      Call         USD         515.00         11/08/13         81         (91,732 ) 

JPMorgan Chase & Co.

      Call         USD         53.50         11/08/13         754         (4,147 ) 

Mediaset SpA

      Call         EUR         3.50         11/15/13         235         (77,551 ) 

Mediaset SpA

      Call         EUR         3.60         11/15/13         235         (54,389 ) 

21Vianet Group, Inc. — ADR

      Call         USD         17.50         11/18/13         686         (73,745 ) 

AbbVie, Inc.

      Call         USD         47.50         11/18/13         289         (43,350 ) 

Acuity Brands, Inc.

      Call         USD         100.00         11/18/13         330         (72,600 ) 

Apple, Inc.

      Call         USD         540.00         11/18/13         126         (44,100 ) 

Autodesk, Inc.

      Call         USD         42.00         11/18/13         764         (11,078 ) 

Axiall Corp.

      Call         USD         42.50         11/18/13         812         (18,270 ) 

The Boeing Co.

      Call         USD         120.00         11/18/13         266         (283,955 ) 

Cabot Oil & Gas Corp.

      Call         USD         40.00         11/18/13         420         (2,100 ) 

Concho Resources, Inc.

      Call         USD         120.00         11/18/13         229         (32,633 ) 

Concho Resources, Inc.

      Call         USD         125.00         11/18/13         125         (10,000 ) 

Eastman Chemical Co.

      Call         USD         80.00         11/18/13         491         (54,010 ) 

Eastman Chemical Co.

      Call         USD         82.50         11/18/13         164         (7,380 ) 

Eaton Corp. PLC

      Call         USD         72.50         11/18/13         459         (22,950 ) 

eBay, Inc.

      Call         USD         57.50         11/18/13         1,435         (6,457 ) 

Facebook, Inc., Class A

      Call         USD         50.00         11/18/13         732         (150,426 ) 

Fomento Economico Mexicano SAB de CV — ADR

      Call         USD         105.00         11/18/13         333         (13,320 ) 

General Motors Co.

      Call         USD         37.00         11/18/13         408         (31,212 ) 

General Motors Co.

      Call         USD         38.00         11/18/13         420         (15,330 ) 

Genworth Financial, Inc., Class A

      Call         USD         13.00         11/18/13         2,420         (376,310 ) 

Gilead Sciences, Inc.

      Call         USD         65.00         11/18/13         756         (468,720 ) 

The Hain Celestial Group, Inc.

      Call         USD         80.00         11/18/13         175         (84,000 ) 

The Hain Celestial Group, Inc.

      Call         USD         85.00         11/18/13         175         (32,812 ) 

International Paper Co.

      Call         USD         46.00         11/18/13         616         (13,244 ) 

Las Vegas Sands Corp.

      Call         USD         67.50         11/18/13         204         (66,300 ) 

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    61

Table of Contents
Schedule of Investments (continued)      BlackRock Global Opportunities Equity Trust (BOE)   

 

 

Ÿ  

Exchange-traded options written as of October 31, 2013 were as follows: (concluded)

 

Description    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Las Vegas Sands Corp.

      Call         USD         70.00         11/18/13         204       $ (32,028 ) 

Mondelez International, Inc., Class A

      Call         USD         33.00         11/18/13         1,313         (150,995 ) 

Mondelez International, Inc., Class A

      Call         USD         34.00         11/18/13         650         (38,350 ) 

Oasis Petroleum, Inc.

      Call         USD         45.00         11/18/13         295         (258,125 ) 

Oasis Petroleum, Inc.

      Call         USD         50.00         11/18/13         295         (123,900 ) 

Ralph Lauren Corp.

      Call         USD         170.00         11/18/13         185         (67,525 ) 

Ralph Lauren Corp.

      Call         USD         175.00         11/18/13         80         (16,800 ) 

Roper Industries, Inc.

      Call         USD         135.00         11/18/13         310         (7,750 ) 

ServiceNow, Inc.

      Call         USD         55.00         11/18/13         514         (79,670 ) 

SINA Corp.

      Call         USD         95.00         11/18/13         127         (10,223 ) 

United Rentals, Inc.

      Call         USD         57.50         11/18/13         552         (400,200 ) 

US Airways Group, Inc.

      Call         USD         23.00         11/18/13         300         (15,900 ) 

Visa, Inc., Class A

      Call         USD         205.00         11/18/13         330         (25,740 ) 

Whirlpool Corp.

      Call         USD         150.00         11/18/13         245         (33,565 ) 

WisdomTree Investments, Inc.

      Call         USD         12.50         11/18/13         1,900         (280,250 ) 

Yandex NV

      Call         USD         39.00         11/18/13         121         (5,445 ) 

Apple, Inc.

      Call         USD         530.00         11/22/13         78         (65,130 ) 

Citigroup, Inc.

      Call         USD         52.00         11/22/13         565         (5,650 ) 

Eaton Corp. PLC

      Call         USD         72.00         11/22/13         370         (34,225 ) 

US Airways Group, Inc.

      Call         USD         22.00         11/22/13         625         (65,312 ) 

Facebook, Inc., Class A

      Call         USD         54.00         11/29/13         1,040         (119,080 ) 

US Airways Group, Inc.

      Call         USD         23.50         11/29/13         300         (15,600 ) 

Gilead Sciences, Inc.

      Call         USD         72.50         12/06/13         218         (34,117 ) 

Mediaset SpA

      Call         EUR         4.00         12/20/13         425         (138,064 ) 

Acuity Brands, Inc.

      Call         USD         105.00         12/23/13         142         (28,755 ) 

Axiall Corp.

      Call         USD         45.00         12/23/13         250         (9,375 ) 

Cabot Oil & Gas Corp.

      Call         USD         37.50         12/23/13         200         (13,500 ) 

Crown Holdings, Inc.

      Call         USD         42.00         12/23/13         450         (96,750 ) 

Genworth Financial, Inc., Class A

      Call         USD         15.00         12/23/13         2,220         (88,800 ) 

Total

                   $ (5,767,292 ) 
                 

 

 

  

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows:

 

Description    Counterparty   

Put/

Call

     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

21Vianet Group, Inc. — ADR

    UBS AG      Call         USD         17.16         11/04/13         67,600       $ (64,194 ) 

AbbVie, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         46.07         11/04/13         70,600         (168,028 ) 

Amgen, Inc.

    Goldman Sachs International      Call         USD         118.12         11/04/13         29,600         (20,294 ) 

Concho Resources, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         105.56         11/04/13         15,500         (85,397 ) 

Flowserve Corp.

    Goldman Sachs International      Call         USD         63.64         11/04/13         51,000         (297,502 ) 

Vale SA — ADR

    Deutsche Bank AG      Call         USD         17.21         11/04/13         146,500         (1,055 ) 

AXA SA

    Bank of America N.A.      Call         EUR         17.91         11/05/13         141,000         (98,402 ) 

Cie Automotive SA

    Goldman Sachs International      Call         EUR         7.62         11/05/13         44,000         (23,052 ) 

Glencore Xstrata PLC

    Deutsche Bank AG      Call         GBP         3.41         11/05/13         665,000         (34,632 ) 

Lloyds Banking Group PLC

    Goldman Sachs International      Call         GBP         0.76         11/05/13         2,570,000         (71,909 ) 

Sacyr SA

    UBS AG      Call         EUR         3.63         11/05/13         441,000         (202,091 ) 

Technip SA

    Deutsche Bank AG      Call         EUR         90.43         11/05/13         23,800         (16 ) 

Blinkx PLC

    Morgan Stanley & Co. International PLC      Call         GBP         1.63         11/06/13         387,400         (24,215 ) 

Crest Nicholson Holdings PLC

    Goldman Sachs International      Call         GBP         3.47         11/06/13         21,667         (13,872 ) 

Crest Nicholson Holdings PLC

    Goldman Sachs International      Call         GBP         3.50         11/06/13         37,088         (21,904 ) 

Daimler AG

    Goldman Sachs International      Call         EUR         57.04         11/06/13         18,100         (80,651 ) 

Kennedy-Wilson Holdings, Inc.

    UBS AG      Call         USD         19.41         11/06/13         35,700         (22,808 ) 

 

See Notes to Financial Statements.

 

62    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (continued)      BlackRock Global Opportunities Equity Trust (BOE)   

 

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows: (continued)

 

Description    Counterparty   

Put/

Call

     

Strike

Price

      Expiration
Date		      Contracts     

Market

Value

  

Novartis AG

    UBS AG      Call         CHF         70.55         11/06/13         99,000       $ (58,257 ) 

Vivendi SA

    Citibank N.A.      Call         EUR         17.63         11/06/13         107,000         (151,782 ) 

Cabot Oil & Gas Corp.

    Morgan Stanley & Co. International PLC      Call         USD         38.70         11/07/13         100,000         (804 ) 

Hertz Global Holdings, Inc.

    Deutsche Bank AG      Call         USD         26.59         11/07/13         292,800         (600 ) 

International Paper Co.

    Citibank N.A.      Call         USD         48.52         11/07/13         61,600         (79 ) 

Google, Inc., Class A

    Morgan Stanley & Co. International PLC      Call         USD         895.00         11/08/13         10,000         (1,360,500 ) 

21Vianet Group, Inc. — ADR

    UBS AG      Call         USD         17.33         11/11/13         68,600         (71,605 ) 

Flowserve Corp.

    Citibank N.A.      Call         USD         64.26         11/11/13         51,000         (272,414 ) 

Anhui Conch Cement Co. Ltd., Class H

    Citibank N.A.      Call         HKD         26.13         11/12/13         500,000         (76,081 ) 

Celgene Corp.

    Barclays Bank PLC      Call         USD         156.57         11/12/13         33,900         (33,013 ) 

Kenedix Realty Investment Corp. — REIT

    Morgan Stanley & Co. International PLC      Call         JPY         465,942.73         11/12/13         150         (9,250 ) 

Nabtesco Corp.

    Citibank N.A.      Call         JPY         2,396.52         11/12/13         73,900         (34,408 ) 

SoftBank Corp.

    Goldman Sachs International      Call         JPY         6,850.99         11/12/13         93,300         (522,599 ) 

Sony Corp.

    Goldman Sachs International      Call         JPY         2,106.68         11/12/13         321,600         (54 ) 

Sumitomo Mitsui Financial Group, Inc.

    Goldman Sachs International      Call         JPY         4,940.31         11/12/13         132,100         (35,330 ) 

Tokyo Tatemono Co. Ltd.

    Goldman Sachs International      Call         JPY         929.81         11/12/13         358,000         (91,892 ) 

Toyota Motor Corp.

    Goldman Sachs International      Call         JPY         6,534.08         11/12/13         102,100         (60,155 ) 

Treasury Wine Estates Ltd.

    Citibank N.A.      Call         AUD         4.58         11/12/13         326,500         (56,007 ) 

Yahoo! Japan Corp.

    Morgan Stanley & Co. International PLC      Call         JPY         579.30         11/12/13         465,400         (1,279 ) 

Aveva Group PLC

    Morgan Stanley & Co. International PLC      Call         GBP         26.51         11/13/13         31,000         (4,626 ) 

Blinkx PLC

    Morgan Stanley & Co. International PLC      Call         GBP         1.63         11/13/13         387,400         (33,409 ) 

Kering

    Morgan Stanley & Co. International PLC      Call         EUR         171.18         11/13/13         21,000         (37,368 ) 

Melco Crown Entertainment Ltd. — ADR

    Deutsche Bank AG      Call         USD         31.57         11/13/13         120,100         (265,667 ) 

Randstad Holding NV

    Goldman Sachs International      Call         EUR         41.27         11/13/13         28,800         (165,964 ) 

Svenska Cellulosa AB, B Shares

    Goldman Sachs International      Call         SEK         164.28         11/13/13         154,000         (462,608 ) 

Technip SA

    Bank of America N.A.      Call         EUR         90.36         11/13/13         14,500         (210 ) 

Blinkx PLC

    Morgan Stanley & Co. International PLC      Call         GBP         1.59         11/20/13         383,800         (53,299 ) 

Sensata Technologies Holding NV

    Goldman Sachs International      Call         USD         39.29         11/20/13         40,700         (8,922 ) 

AXA SA

    Bank of America N.A.      Call         EUR         17.91         11/21/13         141,000         (132,625 ) 

Crest Nicholson Holdings PLC

    UBS AG      Call         GBP         3.70         11/21/13         100,000         (33,996 ) 

Eurasia Drilling Co. Ltd. — GDR

    Morgan Stanley & Co. International PLC      Call         USD         40.27         11/21/13         73,100         (165,214 ) 

Glencore Xstrata PLC

    Goldman Sachs International      Call         GBP         3.48         11/21/13         665,000         (44,347 ) 

NH Hoteles SA

    Goldman Sachs International      Call         EUR         4.18         11/21/13         266,000         (13,755 ) 

Sacyr SA

    Goldman Sachs International      Call         EUR         3.70         11/21/13         329,300         (138,448 ) 

Schneider Electric SA

    Morgan Stanley & Co. International PLC      Call         EUR         65.33         11/21/13         92,800         (43,871 ) 

Societe Generale SA

    Citibank N.A.      Call         EUR         38.61         11/21/13         49,000         (226,801 ) 

Telefonica Deutschland Holding AG

    Goldman Sachs International      Call         EUR         5.96         11/21/13         374,000         (47,675 ) 

Valeo SA

    Morgan Stanley & Co. International PLC      Call         EUR         66.24         11/21/13         26,500         (247,447 ) 

William Hill PLC

    Goldman Sachs International      Call         GBP         4.22         11/21/13         332,200         (6,104 ) 

Discovery Communications, Inc., Class A

    UBS AG      Call         USD         85.91         11/22/13         57,800         (230,867 ) 

Kennedy-Wilson Holdings, Inc.

    Citibank N.A.      Call         USD         18.75         11/22/13         39,500         (51,201 ) 

Sensata Technologies Holding NV

    Goldman Sachs International      Call         USD         39.32         11/22/13         40,700         (9,790 ) 

Crown Holdings, Inc.

    UBS AG      Call         USD         42.24         11/25/13         45,200         (79,744 ) 

Melco Crown Entertainment Ltd. — ADR

    Deutsche Bank AG      Call         USD         31.57         11/25/13         120,100         (316,120 ) 

SKF AB, B Shares

    JPMorgan Chase Bank N.A.      Call         SEK         183.21         11/25/13         178,900         (11,385 ) 

The Hain Celestial Group, Inc.

    Deutsche Bank AG      Call         USD         82.42         11/26/13         35,000         (147,135 ) 

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    63

Table of Contents
Schedule of Investments (continued)      BlackRock Global Opportunities Equity Trust (BOE)   

 

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows: (continued)

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Blinkx PLC

    Morgan Stanley & Co. International PLC      Call         GBP         1.59         11/27/13         383,800       $ (58,879 ) 

Lloyds Banking Group PLC

    JPMorgan Chase Bank N.A.      Call         GBP         0.76         11/27/13         1,274,200         (62,353 ) 

NH Hoteles SA

    Goldman Sachs International      Call         EUR         4.17         11/27/13         104,000         (6,912 ) 

BankUnited, Inc.

    Citibank N.A.      Call         USD         31.75         12/02/13         67,000         (27,595 ) 

Citigroup, Inc.

    Bank of America N.A.      Call         USD         49.25         12/02/13         52,500         (48,556 ) 

CSX Corp.

    Bank of America N.A.      Call         USD         26.16         12/02/13         66,300         (31,506 ) 

CSX Corp.

    Citibank N.A.      Call         USD         25.95         12/02/13         86,400         (48,779 ) 

Las Vegas Sands Corp.

    Morgan Stanley & Co. International PLC      Call         USD         72.37         12/02/13         21,600         (25,856 ) 

National Oilwell Varco, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         82.93         12/02/13         88,000         (107,795 ) 

AIA Group Ltd.

    Goldman Sachs International      Call         HKD         38.81         12/03/13         942,000         (152,462 ) 

Kenedix Realty Investment Corp. — REIT

    Bank of America N.A.      Call         JPY         462,308.68         12/03/13         160         (19,864 ) 

Kennedy-Wilson Holdings, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         18.90         12/03/13         76,500         (90,231 ) 

Samsonite International SA

    Morgan Stanley & Co. International PLC      Call         HKD         22.59         12/03/13         549,000         (25,978 ) 

Shinsei Bank Ltd.

    Morgan Stanley & Co. International PLC      Call         JPY         225.65         12/03/13         1,153,000         (143,910 ) 

WisdomTree Investments, Inc.

    JPMorgan Chase Bank N.A.      Call         USD         12.41         12/03/13         121,500         (199,196 ) 

Anheuser-Busch InBev NV

    Citibank N.A.      Call         EUR         72.98         12/04/13         92,200         (501,114 ) 

Anheuser-Busch InBev NV

    Citibank N.A.      Call         EUR         77.46         12/04/13         14,000         (19,583 ) 

Aveva Group PLC

    UBS AG      Call         GBP         26.78         12/04/13         16,000         (5,171 ) 

Blinkx PLC

    Morgan Stanley & Co. International PLC      Call         GBP         1.59         12/04/13         383,800         (63,407 ) 

Cie Automotive SA

    UBS AG      Call         EUR         8.10         12/04/13         19,200         (3,866 ) 

CRH PLC

    Goldman Sachs International      Call         GBP         15.83         12/04/13         57,000         (23,425 ) 

Daimler AG

    Morgan Stanley & Co. International PLC      Call         EUR         58.66         12/04/13         21,600         (77,787 ) 

NH Hoteles SA

    Goldman Sachs International      Call         EUR         4.17         12/04/13         104,000         (9,116 ) 

Novartis AG

    Citibank N.A.      Call         CHF         71.46         12/04/13         27,000         (24,633 ) 

Randstad Holding NV

    Goldman Sachs International      Call         EUR         41.27         12/04/13         28,800         (173,939 ) 

Rexel SA

    Citibank N.A.      Call         EUR         19.15         12/04/13         32,400         (9,880 ) 

Roche Holding AG

    UBS AG      Call         CHF         254.06         12/04/13         5,200         (13,484 ) 

Sacyr SA

    Deutsche Bank AG      Call         EUR         3.85         12/04/13         329,300         (116,516 ) 

Svenska Cellulosa AB, B Shares

    Goldman Sachs International      Call         SEK         164.28         12/04/13         154,000         (471,928 ) 

Technip SA

    Bank of America N.A.      Call         EUR         90.36         12/04/13         14,500         (1,294 ) 

Valeo SA

    Deutsche Bank AG      Call         EUR         65.39         12/04/13         26,500         (284,067 ) 

William Hill PLC

    Goldman Sachs International      Call         GBP         4.01         12/04/13         332,200         (51,392 ) 

Rowan Cos. PLC, Class A

    Bank of America N.A.      Call         USD         37.14         12/05/13         92,000         (59,591 ) 

United Rentals, Inc.

    Bank of America N.A.      Call         USD         66.38         12/05/13         52,400         (100,195 ) 

Vodafone Group PLC — ADR

    UBS AG      Call         USD         37.22         12/05/13         53,700         (26,630 ) 

Yandex NV

    UBS AG      Call         USD         41.48         12/05/13         111,400         (41,378 ) 

Liberty Global PLC, Class A

    Citibank N.A.      Call         USD         81.78         12/06/13         37,200         (30,535 ) 

ServiceNow, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         54.02         12/06/13         51,500         (168,929 ) 

Vivendi SA

    Citibank N.A.      Call         EUR         19.17         12/06/13         81,400         (39,328 ) 

Kennedy-Wilson Holdings, Inc.

    Deutsche Bank AG      Call         USD         20.40         12/09/13         34,000         (9,330 ) 

Aveva Group PLC

    Deutsche Bank AG      Call         GBP         25.32         12/10/13         11,000         (14,968 ) 

Randstad Holding NV

    Goldman Sachs International      Call         EUR         42.72         12/10/13         56,400         (251,549 ) 

Rexel SA

    Goldman Sachs International      Call         EUR         18.97         12/10/13         82,600         (35,067 ) 

Societe Generale SA

    Goldman Sachs International      Call         EUR         42.40         12/10/13         49,000         (85,907 ) 

APR Energy PLC

    Citibank N.A.      Call         GBP         11.73         12/11/13         25,000         (23,492 ) 

BNP Paribas SA

    Credit Suisse International      Call         EUR         54.06         12/11/13         77,000         (206,921 ) 

Oasis Petroleum, Inc.

    Bank of America N.A.      Call         USD         53.86         12/11/13         87,000         (273,300 ) 

Kennedy-Wilson Holdings, Inc.

    UBS AG      Call         USD         18.39         12/12/13         76,500         (126,575 ) 

Adobe Systems, Inc.

    Goldman Sachs International      Call         USD         53.32         12/16/13         66,600         (142,747 ) 

CSX Corp.

    Morgan Stanley & Co. International PLC      Call         USD         26.92         12/16/13         87,200         (21,484 ) 

 

See Notes to Financial Statements.

 

64    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (continued)      BlackRock Global Opportunities Equity Trust (BOE)   

 

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows: (concluded)

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts     

Market

Value

  

WisdomTree Investments, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         13.62         12/16/13         192,500       $ (177,797 ) 

Aveva Group PLC

    UBS AG      Call         GBP         26.78         12/17/13         16,000         (6,934 ) 

CBS Corp., Class B

    Morgan Stanley & Co. International PLC      Call         USD         60.89         12/17/13         81,200         (120,023 ) 

CRH PLC

    Goldman Sachs International      Call         GBP         15.77         12/17/13         131,200         (73,621 ) 

Crown Holdings, Inc.

    Deutsche Bank AG      Call         USD         41.40         12/17/13         44,000         (115,204 ) 

Lowe’s Cos., Inc.

    Bank of America N.A.      Call         USD         49.02         12/17/13         100,200         (209,372 ) 

NH Hoteles SA

    Goldman Sachs International      Call         EUR         4.17         12/17/13         104,000         (11,635 ) 

Rexel SA

    Citibank N.A.      Call         EUR         19.15         12/17/13         32,400         (12,998 ) 

Anhui Conch Cement Co. Ltd., Class H

    UBS AG      Call         HKD         27.59         12/18/13         495,500         (62,147 ) 

Kenedix Realty Investment Corp. — REIT

    Morgan Stanley & Co. International PLC      Call         JPY         472,766.90         12/18/13         105         (13,992 ) 

Nabtesco Corp.

    Citibank N.A.      Call         JPY         2,538.81         12/18/13         132,400         (46,307 ) 

Samsonite International SA

    Morgan Stanley & Co. International PLC      Call         HKD         22.59         12/18/13         549,000         (37,027 ) 

Shinsei Bank Ltd.

    Morgan Stanley & Co. International PLC      Call         JPY         225.65         12/18/13         1,153,000         (167,014 ) 

Tokyo Tatemono Co. Ltd.

    Morgan Stanley & Co. International PLC      Call         JPY         947.97         12/18/13         189,000         (85,344 ) 

Tokyu Fudosan Holdings Corp.

    Goldman Sachs International      Call         JPY         1,035.11         12/18/13         273,000         (56,373 ) 

Treasury Wine Estates Ltd.

    Goldman Sachs International      Call         AUD         4.78         12/18/13         608,900         (92,482 ) 

Daimler AG

    Deutsche Bank AG      Call         EUR         61.44         12/19/13         63,700         (123,299 ) 

Roche Holding AG

    Deutsche Bank AG      Call         CHF         251.91         12/19/13         40,500         (211,541 ) 

Rowan Cos. PLC, Class A

    Bank of America N.A.      Call         USD         37.14         12/19/13         92,000         (77,467 ) 

Technip SA

    Citibank N.A.      Call         EUR         89.40         12/19/13         11,500         (3,369 ) 

Vodafone Group PLC — ADR

    UBS AG      Call         USD         37.22         12/19/13         53,700         (34,357 ) 

Eurasia Drilling Co. Ltd. — GDR

    Morgan Stanley & Co. International PLC      Call         USD         41.71         1/03/14         46,800         (86,935 ) 

Kennedy-Wilson Holdings, Inc.

    Deutsche Bank AG      Call         USD         19.09         1/06/14         43,000         (48,240 ) 

Roper Industries, Inc.

    Citibank N.A.      Call         USD         128.13         1/08/14         46,100         (137,378 ) 

Eurasia Drilling Co. Ltd. — GDR

    Morgan Stanley & Co. International PLC      Call         USD         42.83         1/10/14         17,500         (24,511 ) 

NH Hoteles SA

    Goldman Sachs International      Call         EUR         4.01         1/10/14         133,000         (33,209 ) 

SKF AB, B Shares

    Goldman Sachs International      Call         SEK         176.45         1/10/14         60,500         (33,070 ) 

Vivendi SA

    Deutsche Bank AG      Call         EUR         18.75         1/10/14         144,000         (148,937 ) 

Kennedy-Wilson Holdings, Inc.

    Citibank N.A.      Call         USD         20.08         1/14/14         60,000         (33,763 ) 

Kenedix Realty Investment Corp. — REIT

    Citibank N.A.      Call         JPY         449,933.33         1/15/14         160         (44,202 ) 

Samsung Heavy Industries Co. Ltd.

    Citibank N.A.      Call         KRW         41,390.69         1/15/14         75,500         (89,101 ) 

Aveva Group PLC

    Morgan Stanley & Co. International PLC      Call         GBP         26.10         1/22/14         10,800         (11,919 ) 

Eurasia Drilling Co. Ltd. — GDR

    Morgan Stanley & Co. International PLC      Call         USD         42.83         1/23/14         17,500         (26,892 ) 

NH Hoteles SA

    Goldman Sachs International      Call         EUR         4.01         1/23/14         133,000         (37,203 ) 

Total

                      $ (14,096,792 ) 
                    

 

 

  

 

Ÿ  

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:

 

  Ÿ  

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

 

  Ÿ  

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)

 

  Ÿ  

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, 2013    65

Table of Contents
Schedule of Investments (continued)      BlackRock Global Opportunities Equity Trust (BOE)   

 

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 fair value hierarchy classification 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, please refer to Note 2 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, 2013:

 

      Level 1     Level 2     Level 3      Total  

Assets:

          

Investments:

          

Long-Term Investments:

          

Common Stocks:

          

Australia

      —      $ 4,154,374        —       $ 4,154,374   

Belgium

      —        20,282,815        —         20,282,815   

Brazil

    $ 11,296,656        —        —         11,296,656   

China

      18,119,919        —        —         18,119,919   

France

      14,851,463        83,552,588        —         98,404,051   

Germany

      —        20,520,663        —         20,520,663   

Hong Kong

      11,460,096        14,185,848        —         25,645,944   

Indonesia

      9,818,723        5,017,912        —         14,836,635   

Ireland

      17,558,474        —        —         17,558,474   

Italy

      9,889,968        8,340,491        —         18,230,459   

Japan

      18,089,570        70,175,765        —         88,265,335   

Mexico

      10,104,390        —        —         10,104,390   

Netherlands

      —        12,768,431        —         12,768,431   

New Zealand

      —        7,690,084        —         7,690,084   

Russia

      20,210,403        —        —         20,210,403   

South Korea

      —        5,038,094        —         5,038,094   

Spain

      26,482,340        10,761,227        —         37,243,567   

Sweden

      11,534,017        15,871,770        —         27,405,787   

Switzerland

      —        54,033,019        —         54,033,019   

Thailand

      —        8,655,432        —         8,655,432   

United Kingdom

      87,964,306        33,696,722        —         121,661,028   

United States

      514,968,824        —        —         514,968,824   

Short-Term Securities

      36,387,584        —        —         36,387,584   

 

  

Total

    $ 818,736,733      $ 374,745,235        —       $ 1,193,481,968   
  

 

 

  
         
      Level 1     Level 2     Level 3      Total  

Derivative Financial Instruments1

          

Assets:

          

Foreign currency exchange contracts

    $ 17,814        —        —       $ 17,814   

Liabilities:

          

Equity contracts

      (5,497,290 )    $ (14,366,794 )      —         (19,864,084 ) 

Foreign currency exchange contracts

      (11,552 )      —        —         (11,552 ) 

 

  

Total

    $ (5,491,028 )    $ (14,366,794 )      —       $ (19,857,822 ) 
  

 

 

  

 

1 

Derivative financial instruments are foreign currency exchange contracts and options written. Foreign currency exchange contracts are valued at the unrealized appreciation/ depreciation on the instrument and options written are shown at value.

 

See Notes to Financial Statements.

 

66    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (concluded)      BlackRock Global Opportunities Equity Trust (BOE)   

 

Certain of the Trust’s assets and/or liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2013, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

      Level 1      Level 2     Level 3      Total  

Assets:

           

Foreign currency at value

    $ 4,043,358         —        —       $ 4,043,358   

Liabilities:

           

Bank overdraft

      —       $ (295 )      —         (295 ) 

 

  

Total

    $ 4,043,358       $ (295 )      —       $ 4,043,063   
  

 

 

  

There were no transfers between Levels during the year ended October 31, 2013.

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    67

Table of Contents
Schedule of Investments October 31, 2013      BlackRock Health Sciences Trust (BME)   
     (Percentages shown are based on Net Assets)   

 

Common Stocks    Shares      Value  

Biotechnology — 31.8%

      

ACADIA Pharmaceuticals, Inc. (a)(b)

      58,095       $ 1,320,499   

Acceleron Pharma, Inc. (a)

      9,000         202,860   

Acorda Therapeutics, Inc. (a)(b)

      57,500         1,760,075   

Actelion Ltd.

      20,400         1,579,435   

Aegerion Pharmaceuticals, Inc. (a)(b)

      19,500         1,614,990   

Agios Pharmaceuticals, Inc. (a)

      5,400         125,064   

Alexion Pharmaceuticals, Inc. (a)(b)

      28,360         3,486,862   

Alkermes PLC (a)(b)

      62,600         2,202,894   

Alnylam Pharmaceuticals, Inc. (a)(b)

      58,136         3,349,215   

Amgen, Inc. (b)

      94,100         10,915,600   

Array BioPharma, Inc. (a)(b)

      88,100         442,262   

Biogen Idec, Inc. (a)(b)

      25,900         6,324,521   

BioMarin Pharmaceutical, Inc. (a)(b)

      47,800         3,002,796   

Biota Pharmaceuticals, Inc.

      38,100         145,923   

Bluebird Bio, Inc. (a)

      9,300         197,625   

Celgene Corp. (a)(b)

      96,243         14,291,123   

Celldex Therapeutics, Inc. (a)(b)

      40,100         918,691   

Conatus Pharmaceuticals, Inc. (a)

      18,200         161,980   

Dyax Corp. (a)

      33,584         276,060   

Exelixis, Inc. (a)(b)

      69,300         341,649   

Gilead Sciences, Inc. (a)(b)

      152,621         10,834,565   

Incyte Corp. Ltd. (a)(b)

      34,800         1,357,200   

Infinity Pharmaceuticals, Inc. (a)

      15,900         215,445   

InterMune, Inc. (a)

      82,300         1,159,607   

Intra-Cellular Therapies, Inc. (Acquired 8/29/13,
Cost $245,733) (a)(c)

      77,362         245,733   

Isis Pharmaceuticals, Inc. (a)(b)

      62,050         2,064,403   

MacroGenics, Inc. (a)

      9,900         266,706   

Medivation, Inc. (a)(b)

      11,500         688,390   

Momenta Pharmaceuticals, Inc. (a)(b)

      27,100         444,169   

Ophthotech Corp. (a)

      12,700         425,704   

Pharmacyclics, Inc. (a)(b)

      8,600         1,020,304   

Protalix BioTherapeutics, Inc. (a)

      122,100         536,019   

PTC Therapeutics, Inc. (a)

      9,000         161,910   

Puma Biotechnology, Inc. (a)(b)

      5,900         226,029   

Regeneron Pharmaceuticals, Inc. (a)(b)

      20,258         5,826,201   

Seattle Genetics, Inc. (a)

      90,567         3,498,603   

Synageva BioPharma Corp. (a)(b)

      8,203         416,712   

Ultragenyx Pharmaceutical, Inc. (Acquired 12/18/12,
Cost $384,116) (a)(c)

      138,700         384,116   

Verastem, Inc. (a)

      21,800         218,000   

Vertex Pharmaceuticals, Inc. (a)

      46,105         3,289,131   
     

 

 

  
                85,939,071   

Diversified Consumer Services — 1.0%

      

Service Corp. International

      148,100         2,667,281   

Health Care Equipment & Supplies — 15.7%

      

Baxter International, Inc. (b)

      19,400         1,277,878   

Boston Scientific Corp. (a)(b)

      329,700         3,854,193   

CareFusion Corp. (a)

      58,100         2,252,537   

Coloplast A/S, Class B

      31,300         2,040,988   

The Cooper Cos., Inc.

      37,100         4,793,691   

Covidien PLC (b)

      45,100         2,891,361   

CR Bard, Inc. (b)

      14,100         1,920,702   

DENTSPLY International, Inc. (b)

      50,400         2,373,840   

Edwards Lifesciences Corp. (a)(b)

      28,400         1,851,396   

Intuitive Surgical, Inc. (a)

      3,000         1,114,500   

Medtronic, Inc. (b)

      125,600         7,209,440   

Sirona Dental Systems, Inc. (a)

      19,395         1,401,289   

Stryker Corp. (b)

      101,900         7,526,334   

Teleflex, Inc. (b)

      4,700         433,246   

Zimmer Holdings, Inc. (b)

      14,900         1,303,303   
     

 

 

  
                42,244,698   
Common Stocks    Shares      Value  

Health Care Providers & Services — 11.5%

      

Aetna, Inc. (b)

      42,711       $ 2,677,980   

AmerisourceBergen Corp.

      20,400         1,332,732   

Cardinal Health, Inc. (b)

      48,726         2,858,267   

Cigna Corp. (b)

      20,700         1,593,486   

Envision Healthcare Holdings, Inc. (a)

      60,700         1,763,335   

Express Scripts Holding Co. (a)(b)

      20,776         1,298,916   

HCA Holdings, Inc.

      77,300         3,643,922   

McKesson Corp. (b)

      25,500         3,986,670   

Premier, Inc., Class A (a)

      37,800         1,164,618   

UnitedHealth Group, Inc.

      91,234         6,227,633   

Universal Health Services, Inc., Class B (b)

      54,000         4,350,240   
     

 

 

  
                30,897,799   

Health Care Technology — 0.7%

      

Cerner Corp. (a)(b)

      35,200         1,972,256   

Life Sciences Tools & Services — 4.4%

      

Agilent Technologies, Inc. (b)

      39,900         2,025,324   

ICON PLC (a)

      39,400         1,593,336   

Illumina, Inc. (a)(b)

      37,100         3,469,221   

Life Technologies Corp. (a)

      5,200         391,612   

Morphosys AG (a)

      5,100         394,500   

Thermo Fisher Scientific, Inc.

      31,600         3,089,848   

Waters Corp. (a)(b)

      10,115         1,020,806   
     

 

 

  
                11,984,647   

Pharmaceuticals — 35.1%

      

Abbott Laboratories (b)

      54,900         2,006,595   

AbbVie, Inc. (b)

      179,784         8,710,535   

Actavis PLC (a)(b)

      16,200         2,504,196   

Allergan, Inc. (b)

      22,900         2,074,969   

Bayer AG

      46,200         5,731,238   

Bristol-Myers Squibb Co. (b)

      204,800         10,756,096   

Chugai Pharmaceutical Co. Ltd.

      56,200         1,320,496   

Eli Lilly & Co. (b)

      27,700         1,380,014   

Johnson & Johnson (b)

      155,470         14,398,076   

Merck & Co., Inc. (b)

      115,500         5,207,895   

Mylan, Inc. (a)

      72,300         2,738,001   

Novartis AG

      89,400         6,939,459   

Ono Pharmaceutical Co. Ltd.

      23,100         1,746,595   

Perrigo Co. (b)

      10,100         1,392,689   

Pfizer, Inc. (b)

      321,100         9,851,348   

Roche Holding AG

      30,500         8,434,330   

Sanofi

      26,500         2,825,526   

Shire PLC — ADR (b)

      19,600         2,608,760   

Valeant Pharmaceuticals International, Inc. (a)

      32,000         3,383,040   

Zoetis, Inc. (b)

      26,900         851,654   
     

 

 

  
                94,861,512   

Total Long-Term Investments

(Cost — $195,530,927) — 100.2%

  

  

      270,567,264   
     
 

 

See Notes to Financial Statements.

 

68    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (continued)      BlackRock Health Sciences Trust (BME)   
     (Percentages shown are based on Net Assets)   

 

 

Short-Term Securities    Shares      Value  

BlackRock Liquidity Funds, TempFund, Institutional Class, 0.03% (d)(e)

      1,144,662       $ 1,144,662   

Total Short-Term Securities

(Cost — $1,144,662) — 0.4%

  

  

      1,144,662   
     
Options Purchased                

(Cost — $1,324) — 0.0%

  

      330   

Total Investments Before Options Written

(Cost — $196,676,913) — 100.6%

  

  

      271,712,256   
     
                  

    

Options Written

          Value  

(Premiums Received — $3,252,861) — (1.0)%

    $ (2,608,688 ) 

Total Investments Net of Options Written — 99.6%

         269,103,568   

Other Assets Less Liabilities — 0.4%

         1,057,931   
     

 

 

  

Net Assets — 100.0%

       $ 270,161,499   
     

 

 

  
 
Notes to Schedule of Investments

 

(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) Restricted security as to resale. As of October 31, 2013 the Trust held 0.2% of its net assets, with current market value of $629,849 and the original cost of $629,849, in these securities.

 

(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, 2013, 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, 2012		     

Net

Activity

     Shares/Beneficial
Interest Held at
October 31, 2013		      Income      Realized
Gain		  

BlackRock Liquidity Funds, TempFund, Institutional Class

      4,024,895         (2,880,233 )      1,144,662       $ 5,948       $ 44   

BlackRock Liquidity Series, LLC Money Market Series

    $ 4,185,923       $ (4,185,923 )      —       $ 538         —   

 

• 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 the investment advisor. These definitions may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease.

 

• Exchange-traded options purchased as of October 31, 2013 were as follows:

 

Description    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Eli Lilly & Co.

      Call         USD         52.50         11/18/13         110       $ 330   

 

Ÿ  

Exchange-traded options written as of October 31, 2013 were as follows:

 

Description    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Zoetis, Inc.

      Call         USD         32.00         11/01/13         90       $ (675 ) 

Acorda Therapeutics, Inc.

      Call         USD         37.00         11/04/13         200         —   

Aegerion Pharmaceuticals, Inc.

      Call         USD         95.00         11/04/13         66         (111 ) 

Aetna, Inc.

      Call         USD         65.00         11/04/13         220         (299 ) 

Johnson & Johnson

      Call         USD         92.50         11/04/13         191         (9,661 ) 

Momenta Pharmaceuticals, Inc.

      Call         USD         17.00         11/04/13         90         (961 ) 

Pfizer, Inc.

      Call         USD         29.00         11/04/13         35         (5,969 ) 

Pfizer, Inc.

      Call         USD         29.50         11/04/13         106         (12,720 ) 

Synageva BioPharma Corp.

      Call         USD         54.50         11/04/13         30         (519 ) 

Teleflex, Inc.

      Call         USD         82.00         11/04/13         40         (40,725 ) 

Merck & Co., Inc.

      Call         USD         49.00         11/05/13         160         —   

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    69

Table of Contents
Schedule of Investments (continued)      BlackRock Health Sciences Trust (BME)   

 

Ÿ  

Exchange-traded options written as of October 31, 2013 were as follows: (continued)

 

Description    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Allergan, Inc.

      Call       USD  91.25         11/07/13         78       $ (4,466 ) 

BioMarin Pharmaceutical, Inc.

      Call       USD  75.00         11/07/13         165         (510 ) 

Cigna Corp.

      Call       USD  85.00         11/07/13         160         (7 ) 

Puma Biotechnology, Inc.

      Call       USD  56.00         11/07/13         58         —   

Amgen, Inc.

      Call       USD  115.00         11/08/13         330         (69,630 ) 

Biogen Idec, Inc.

      Call       USD  250.00         11/08/13         90         (16,650 ) 

Bristol-Myers Squibb Co.

      Call       USD  49.00         11/08/13         700         (252,000 ) 

Gilead Sciences, Inc.

      Call       USD  68.00         11/08/13         510         (167,025 ) 

DENTSPLY International, Inc.

      Call       USD  44.25         11/16/13         175         (50,367 ) 

ACADIA Pharmaceuticals, Inc.

      Call       USD  24.00         11/18/13         250         (20,000 ) 

Alexion Pharmaceuticals, Inc.

      Call       USD  120.00         11/18/13         73         (39,420 ) 

Alkermes PLC

      Call       USD  40.00         11/18/13         218         (2,180 ) 

Baxter International, Inc.

      Call       USD  77.50         11/18/13         194         (388 ) 

Boston Scientific Corp.

      Call       USD  12.00         11/18/13         1,130         (13,560 ) 

Bristol-Myers Squibb Co.

      Call       USD  49.00         11/18/13         100         (36,500 ) 

Cardinal Health, Inc.

      Call       USD  55.00         11/18/13         170         (62,900 ) 

Celgene Corp.

      Call       USD  160.00         11/18/13         330         (27,720 ) 

Celldex Therapeutics, Inc.

      Call       USD  25.00         11/18/13         240         (40,200 ) 

Cerner Corp.

      Call       USD  55.00         11/18/13         125         (21,875 ) 

Edwards Lifesciences Corp.

      Call       USD  80.00         11/18/13         100         (500 ) 

Eli Lilly & Co.

      Call       USD  55.00         11/18/13         110         (165 ) 

Exelixis, Inc.

      Call       USD  6.00         11/18/13         250         (1,250 ) 

Express Scripts Holding Co.

      Call       USD  67.50         11/18/13         133         (733 ) 

Illumina, Inc.

      Call       USD  90.00         11/18/13         150         (65,250 ) 

Isis Pharmaceuticals, Inc.

      Call       USD  35.00         11/18/13         220         (25,300 ) 

Medivation, Inc.

      Call       USD  60.00         11/18/13         53         (13,197 ) 

Merck & Co., Inc.

      Call       USD  49.00         11/18/13         223         (335 ) 

Merck & Co., Inc.

      Call       USD  50.00         11/18/13         70         (210 ) 

Pharmacyclics, Inc.

      Call       USD  115.00         11/18/13         48         (40,320 ) 

Regeneron Pharmaceuticals, Inc.

      Call       USD  290.00         11/18/13         70         (82,950 ) 

Shire PLC — ADR

      Call       USD  135.00         11/18/13         67         (12,563 ) 

Stryker Corp.

      Call       USD  72.50         11/18/13         318         (61,215 ) 

Stryker Corp.

      Call       USD  75.00         11/18/13         40         (1,800 ) 

Universal Health Services, Inc., Class B

      Call       USD  80.00         11/18/13         200         (33,000 ) 

Waters Corp.

      Call       USD  105.00         11/18/13         100         (4,500 ) 

Zimmer Holdings, Inc.

      Call       USD  85.00         11/18/13         50         (14,500 ) 

Pfizer, Inc.

      Call       USD  30.50         11/22/13         800         (33,600 ) 

Pfizer, Inc.

      Call       USD  31.50         11/29/13         82         (984 ) 

Abbott Laboratories

      Call       USD  39.00         12/23/13         66         (891 ) 

AbbVie, Inc.

      Call       USD  50.00         12/23/13         4         (350 ) 

Actavis PLC

      Call       USD  145.00         12/23/13         56         (66,640 ) 

Alnylam Pharmaceuticals, Inc.

      Call       USD  60.00         12/23/13         225         (84,375 ) 

Array BioPharma, Inc.

      Call       USD  7.50         12/23/13         90         (1,125 ) 

CR Bard, Inc.

      Call       USD  140.00         12/23/13         40         (8,200 ) 

McKesson Corp.

      Call       USD  150.00         12/23/13         95         (80,275 ) 

Medtronic, Inc.

      Call       USD  57.50         12/23/13         38         (5,605 ) 

Perrigo Co.

      Call       USD  135.00         12/23/13         35         (18,550 ) 

Agilent Technologies, Inc.

      Call       USD                  55.00         1/20/14         130         (9,880 ) 

 

See Notes to Financial Statements.

 

70    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (continued)      BlackRock Health Sciences Trust (BME)   

 

 

Ÿ  

Exchange-traded options written as of October 31, 2013 were as follows: (concluded)

 

Description    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts     

Market

Value

  

Covidien PLC

      Call         USD         62.50         1/20/14         157       $ (47,100 ) 

Incyte Corp. Ltd.

      Call         USD         40.00         1/20/14         110         (34,100 ) 

Total

                   $ (1,646,501 ) 
                 

 

 

  

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows:

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts     

Market

Value

  

AbbVie, Inc.

   

Morgan Stanley & Co. International PLC

      Call         USD         48.00         11/04/13         10,000       $ (6,943 ) 

Array BioPharma, Inc.

   

Citibank N.A.

      Call         USD         6.35         11/04/13         14,000         —   

The Cooper Cos., Inc.

   

Deutsche Bank AG

      Call         USD         133.30         11/04/13         13,000         (1,112 ) 

Eli Lilly & Co.

   

Citibank N.A.

      Call         USD         55.25         11/04/13         15,000         —   

InterMune, Inc.

   

Goldman Sachs International

      Call         USD         16.00         11/04/13         29,000         (50 ) 

Mylan, Inc.

   

Morgan Stanley & Co. International PLC

      Call         USD         39.00         11/04/13         25,000         (1,275 ) 

Pfizer, Inc.

   

Deutsche Bank AG

      Call         USD         29.39         11/04/13         10,000         (13,095 ) 

Sirona Dental Systems, Inc.

   

Goldman Sachs International

      Call         USD         72.00         11/04/13         10,000         (8,542 ) 

Thermo Fisher Scientific, Inc.

   

Barclays Bank PLC

      Call         USD         95.75         11/04/13         10,000         (21,782 ) 

UnitedHealth Group, Inc.

   

Morgan Stanley & Co. International PLC

      Call         USD         74.00         11/04/13         29,000         —   

Valeant Pharmaceuticals International, Inc.

   

Deutsche Bank AG

      Call         USD         105.78         11/04/13         10,000         (13,096 ) 

Verastem, Inc.

   

Barclays Bank PLC

      Call         USD         14.40         11/04/13         7,500         —   

Vertex Pharmaceuticals, Inc.

   

Deutsche Bank AG

      Call         USD         79.38         11/04/13         15,500         (66 ) 

CareFusion Corp.

   

Deutsche Bank AG

      Call         USD         36.89         11/05/13         20,200         (39,475 ) 

Sanofi

   

UBS AG

      Call         EUR         74.03         11/05/13         9,200         (56,383 ) 

Seattle Genetics, Inc.

   

Goldman Sachs International

      Call         USD         42.84         11/05/13         30,600         (5,484 ) 

Chugai Pharmaceutical Co. Ltd.

   

Citibank N.A.

      Call         JPY         2,109.96         11/06/13         18,600         (38,049 ) 

Johnson & Johnson

   

Credit Suisse International

      Call         USD         89.62         11/06/13         17,200         (52,036 ) 

Novartis AG

   

UBS AG

      Call         CHF         70.55         11/06/13         43,600         (25,657 ) 

Roche Holding AG

   

UBS AG

      Call         CHF         241.50         11/06/13         12,000         (124,659 ) 

Ono Pharmaceutical Co. Ltd.

   

Citibank N.A.

      Call         JPY         6,123.90         11/12/13         8,000         (106,652 ) 

ICON PLC

   

Citibank N.A.

      Call         USD         41.50         11/15/13         14,000         (8,179 ) 

AmerisourceBergen Corp.

   

Citibank N.A.

      Call         USD         64.00         11/20/13         7,500         (14,021 ) 

HCA Holdings, Inc.

   

Citibank N.A.

      Call         USD         46.00         11/20/13         25,000         (51,885 ) 

Actelion Ltd.

   

Morgan Stanley & Co. International PLC

      Call         CHF         69.50         11/21/13         7,000         (15,793 ) 

AbbVie, Inc.

   

UBS AG

      Call         USD         49.77         11/25/13         52,500         (29,308 ) 

Medtronic, Inc.

   

Morgan Stanley & Co. International PLC

      Call         USD         57.00         11/26/13         40,000         (53,202 ) 

Service Corp. International

   

UBS AG

      Call         USD         18.86         12/03/13         25,600         (1,865 ) 

Bayer AG

   

Citibank N.A.

      Call         EUR         91.50         12/04/13         16,100         (45,625 ) 

Coloplast A/S, Class B

   

Morgan Stanley & Co. International PLC

      Call         DKK         316.86         12/04/13         10,900         (82,444 ) 

Morphosys AG

   

Citibank N.A.

      Call         EUR         63.18         12/04/13         3,000         (2,139 ) 

Abbott Laboratories

   

Citibank N.A.

      Call         USD         37.41         12/05/13         12,600         (4,649 ) 

Johnson & Johnson

   

Credit Suisse International

      Call         USD         93.00         1/03/14         17,200         (26,487 ) 

Infinity Pharmaceuticals, Inc.

   

Citibank N.A.

      Put         USD         16.50         11/26/13         36,800         (112,234 ) 

Total

                      $ (962,187 ) 
                    

 

 

  

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    71

Table of Contents
Schedule of Investments (concluded)      BlackRock Health Sciences Trust (BME)   

 

 

Ÿ  

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:

 

  Ÿ  

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

 

  Ÿ  

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)

 

  Ÿ  

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 fair value hierarchy classification 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, please refer to Note 2 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, 2013:

 

 

  
     Level 1     Level 2     Level 3      Total  

 

  

Assets:

          

Investments:

          

Long-Term Investments:

          

Common Stocks:

          

Biotechnology

    $ 85,309,222        —      $ 629,849       $ 85,939,071   

Diversified Consumer Services

      2,667,281        —        —         2,667,281   

Health Care Equipment & Supplies

      42,244,698        —        —         42,244,698   

Health Care Providers & Services

      30,897,799        —        —         30,897,799   

Health Care Technology

      1,972,256        —        —         1,972,256   

Life Sciences Tools & Services

      11,590,147      $ 394,500        —         11,984,647   

Pharmaceuticals

      67,863,868        26,997,644        —         94,861,512   

Short-Term Securities

      1,144,662        —        —         1,144,662   

Options Purchased

      330        —        —         330   

 

  

Total

    $ 243,690,263      $ 27,392,144      $ 629,849       $ 271,712,256   
  

 

 

  
         

 

  
     Level 1     Level 2     Level 3      Total  

 

  

Derivative Financial Instruments1

          

Liabilities:

          

Equity contracts

    $ (1,538,871 )    $ (1,069,817 )      —       $ (2,608,688 ) 

 

  

 

1 

Derivative financial instruments are options written, 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, 2013, foreign currency at value of $2,498 is categorized as Level 1 within the disclosure hierarchy.

There were no transfers between Levels during the year ended October 31, 2013.

 

See Notes to Financial Statements.

 

72    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments October 31, 2013      BlackRock International Growth and Income Trust (BGY)   
     (Percentages shown are based on Net Assets)   

 

Common Stocks    Shares      Value  

Australia — 0.4%

      

Treasury Wine Estates Ltd.

      796,604       $ 3,537,760   

Austria — 1.4%

      

Erste Group Bank AG

      402,801         14,142,324   

Belgium — 2.6%

      

Ageas

      133,700         5,681,510   

Anheuser-Busch InBev NV

      192,146         19,918,643   
     

 

 

  
                25,600,153   

Brazil — 1.0%

      

Vale SA — ADR (a)

      605,400         9,692,454   

Canada — 0.9%

      

Gildan Activewear, Inc. (a)

      84,900         4,092,528   

Westjet Airlines Ltd.

      196,700         5,118,181   
     

 

 

  
                9,210,709   

China — 2.6%

      

58.Com, Inc. — ADR (b)

      115,600         2,788,272   

Anhui Conch Cement Co. Ltd., Class H

      2,302,440         8,033,149   

SINA Corp. (a)(b)

      121,600         10,160,896   

YY, Inc. — ADR (b)

      100,400         4,936,668   
     

 

 

  
                25,918,985   

Cyprus — 0.6%

      

TCS Group Holding PLC (b)(c)

      339,200         5,815,584   

France — 14.7%

      

AXA SA

      534,464         13,316,457   

BNP Paribas SA

      255,082         18,818,276   

Criteo SA — ADR (b)

      37,900         1,338,249   

European Aeronautic Defence and Space Co. NV

      145,688         9,983,246   

Kering

      53,500         12,124,791   

Publicis Groupe SA

      108,500         9,049,646   

Rexel SA

      448,576         11,237,087   

Safran SA

      177,600         11,351,536   

Sanofi

      59,600         6,354,767   

Schneider Electric SA

      146,600         12,336,107   

Societe Generale SA

      103,300         5,835,393   

Technip SA

      109,300         11,447,981   

Valeo SA

      107,290         10,656,018   

Vivendi SA

      515,400         13,049,844   
     

 

 

  
                146,899,398   

Germany — 4.8%

      

Bayer AG

      107,600         13,348,077   

Daimler AG

      215,100         17,611,350   

KUKA AG

      210,903         9,610,059   

Telefonica Deutschland Holding AG

      555,094         4,372,522   

voxeljet AG — ADR (b)

      71,100         2,423,088   
     

 

 

  
                47,365,096   

Hong Kong — 2.7%

      

AIA Group Ltd.

      1,991,952         10,114,800   

GCL-Poly Energy Holdings Ltd. (b)

      15,457,000         4,742,532   

Melco Crown Entertainment Ltd. — ADR (a)(b)

      222,700         7,384,732   

Samsonite International SA

      1,729,200         4,726,683   
     

 

 

  
                26,968,747   

Indonesia — 1.1%

      

Global Mediacom Tbk PT

      16,672,000         2,823,872   

Matahari Department Store Tbk PT (b)

      7,734,100         8,439,071   
     

 

 

  
                11,262,943   

Ireland — 4.3%

      

Bank of Ireland (b)

      34,785,600         12,713,645   

CRH PLC

      293,200         7,159,934   

DCC PLC

      240,389         10,788,539   
Common Stocks    Shares      Value  

Ireland (concluded)

      

Green REIT PLC (b)

      4,780,670       $ 7,789,173   

Kingspan Group PLC

      251,913         4,255,319   
     

 

 

  
                42,706,610   

Italy — 2.3%

      

Banca Generali SpA

      465,700         12,184,545   

Mediaset SpA (a)(b)

      2,167,500         10,823,862   
     

 

 

  
                23,008,407   

Japan — 10.1%

      

GMO internet, Inc.

      417,100         4,741,624   

Kenedix Realty Investment Corp. — REIT

      904         4,060,966   

Nabtesco Corp.

      330,500         8,066,685   

Shinsei Bank Ltd.

      2,115,000         4,951,863   

SoftBank Corp.

      280,300         20,932,499   

Sony Corp.

      499,600         8,715,366   

Sumitomo Mitsui Financial Group, Inc.

      273,500         13,219,867   

Tokyo Tatemono Co. Ltd.

      536,000         4,998,597   

Tokyu Fudosan Holdings Corp. (b)

      376,800         3,701,707   

Toyota Motor Corp.

      260,900         16,916,284   

Yahoo! Japan Corp.

      2,138,300         9,937,996   
     

 

 

  
                100,243,454   

Malaysia — 0.4%

      

Astro Malaysia Holdings Bhd

      4,030,800         3,703,344   

Mexico — 1.1%

      

Fomento Economico Mexicano
SAB de CV — ADR (a)

      115,200         10,748,160   

Netherlands — 4.3%

      

Aalberts Industries NV

      309,452         9,260,325   

ASML Holding NV

      97,632         9,244,589   

Randstad Holding NV

      214,294         13,198,137   

Ziggo NV

      257,800         11,051,726   
     

 

 

  
                42,754,777   

New Zealand — 0.7%

      

Xero Ltd. (Acquired 10/15/13, Cost $4,566,935) (b)(d)

      300,605         6,604,793   

Norway — 1.7%

      

Seadrill Ltd.

      107,500         4,972,331   

Statoil ASA

      495,400         11,721,763   
     

 

 

  
                16,694,094   

Russia — 1.9%

      

Eurasia Drilling Co. Ltd. — GDR

      269,501         11,413,367   

Yandex NV (a)(b)

      196,900         7,257,734   
     

 

 

  
                18,671,101   

Singapore — 0.9%

      

Oversea-Chinese Banking Corp. Ltd.

      1,108,000         9,276,445   

South Korea — 0.9%

      

NAVER Corp.

      8,100         4,545,457   

Samsung Heavy Industries Co. Ltd.

      117,590         4,311,714   
     

 

 

  
                8,857,171   

Spain — 4.2%

      

Bankinter SA

      1,345,300         8,214,164   

Cie Automotive SA

      812,337         8,823,636   

Duro Felguera SA

      267,778         1,752,296   

NH Hoteles SA (b)

      2,624,989         13,721,752   

Sacyr SA (b)

      1,760,955         9,477,317   
     

 

 

  
                41,989,165   

Sweden — 3.4%

      

Seamless Distribution AB (b)

      113,373         784,575   

SKF AB, B Shares

      457,500         12,122,244   
 

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    73

Table of Contents
Schedule of Investments (continued)      BlackRock International Growth and Income Trust (BGY)   
     (Percentages shown are based on Net Assets)   

 

Common Stocks    Shares      Value  

Sweden (concluded)

      

Svenska Cellulosa AB, B Shares

      523,940       $ 14,854,331   

Telefonaktiebolaget LM Ericsson, Class B

      540,800         6,455,333   
     

 

 

  
                34,216,483   

Switzerland — 8.8%

      

Actelion Ltd.

      120,019         9,292,263   

Glencore Xstrata PLC

      2,074,000         11,287,253   

Novartis AG

      324,400         25,180,761   

Partners Group Holding AG

      9,909         2,568,640   

Roche Holding AG

      84,223         23,290,642   

Syngenta AG

      18,400         7,426,547   

UBS AG

      422,153         8,164,891   
     

 

 

  
                87,210,997   

Taiwan — 0.6%

      

Epistar Corp.

      3,705,000         6,424,811   

Thailand — 0.7%

      

PTT Global Chemical PCL

      2,915,900         7,353,195   

United Kingdom — 19.4%

      

APR Energy PLC

      860,234         15,999,991   

ASOS PLC (b)

      30,100         2,736,316   

Aveva Group PLC

      220,085         9,119,166   

Babcock International Group PLC

      654,700         13,388,081   

Barclays PLC — ADR (a)

      77,176         1,297,329   

Blinkx PLC (b)

      2,679,100         7,040,702   

Crest Nicholson Holdings PLC (b)

      2,935,600         18,215,999   

DS Smith PLC

      1,955,549         9,488,177   

esure Group PLC

      1,639,773         5,955,210   

Foxtons Group PLC (b)

      1,658,760         8,477,717   

Halma PLC

      850,000         7,475,508   

Hargreaves Lansdown PLC

      430,677         8,204,591   

Inchcape PLC

      622,520         6,355,918   

Intertek Group PLC

      256,500         13,684,193   

Lloyds Banking Group PLC (b)

      8,016,800         9,915,242   

Partnership Assurance Group PLC (b)

      1,195,800         7,822,829   

Perform Group PLC (b)

      1,160,621         10,421,341   

Platform Acquisition Holdings Ltd. (b)

      552,300         5,774,297   

Rotork PLC

      227,762         10,435,297   
Common Stocks    Shares      Value  

United Kingdom (concluded)

      

Travis Perkins PLC

      328,200       $ 9,759,949   

Ultra Electronics Holdings PLC

      162,700         5,045,325   

William Hill PLC

      1,031,900         6,633,135   
     

 

 

  
                193,246,313   

United States — 0.5%

      

Euronet Worldwide, Inc. (a)(b)

      126,807         5,503,424   

Total Common Stocks — 99.0%

               985,626,897   
     
Warrants (e)                

United Kingdom — 0.0%

      

Platform Acquisition Holdings Ltd.,
Expires 7/31/20 (b)

      236,700         —   

Total Long-Term Investments

(Cost — $843,417,766) — 99.0%

  

  

      985,626,897   
     
Short-Term Securities                

BlackRock Liquidity Funds, TempFund, Institutional Class, 0.03% (f)(g)

      22,346,730         22,346,730   

Total Short-Term Securities

(Cost — $22,346,730) — 2.2%

  

  

      22,346,730   

Total Investments Before Options Written

(Cost — $865,764,496) — 101.2%

  

  

      1,007,973,627   
     
Options Written                

(Premiums Received — $13,626,299) — (1.8)%

  

      (17,727,514 ) 

Total Investments Net of Options Written — 99.4%

  

      990,246,113   

Other Assets Less Liabilities — 0.6%

         5,489,451   
     

 

 

  

Net Assets — 100.0%

       $ 995,735,564   
     

 

 

  
 
Notes to Schedule of Investments

 

(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 exempt from registration pursuant to Rule 144A under the Securities Act of 1933. This security may be resold in transactions exempt from registration to qualified institutional investors.

 

(d) Restricted security as to resale. As of October 31, 2013 the Trust held 0.7% of its net assets, with a current market value of $6,604,793 and its original cost of $4,566,935, in the security.

 

(e) Warrants entitle the Trust to purchase a predetermined number of shares of common stock and are non-income producing. The purchase price and number of shares are subject to adjustment under certain conditions until the expiration date of the warrants, if any.

 

(f) Investments in issuers considered to be an affiliate of the Trust during the year ended October 31, 2013, 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, 2012		     

Net

Activity

      Shares Held at
October 31, 2013		      Income      Realized
Gain		  

BlackRock Liquidity Funds, TempFund, Institutional Class

      11,164,990         11,181,740         22,346,730       $ 10,356       $ 108   

 

(g) Represents the current yield as of report date.

 

See Notes to Financial Statements.

 

74    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (continued)      BlackRock International Growth and Income Trust (BGY)   

 

 

Ÿ  

Foreign currency exchange contracts as of October 31, 2013 were as follows:

 

Currency

Purchased

       

Currency

Sold

     Counterparty   Settlement
Date		        Unrealized
Appreciation
(Depreciation)		  
NOK        4,586,000           USD           780,808      BNP Paribas S.A.     11/01/13         $ (10,447 ) 
SEK        1,298,000           USD           203,573      BNP Paribas S.A.     11/01/13           (3,266 ) 
USD        3,011,766           GBP           1,863,140      Canadian Imperial Bank of Commerce     11/01/13           24,385   
USD        3,043,241           JPY           297,811,526      Canadian Imperial Bank of Commerce     11/01/13           14,546   
CHF        1,921,701           USD           2,128,837      Deutsche Bank AG     11/04/13           (10,854 ) 
EUR        56,000           USD           76,136      UBS AG     11/04/13           (101 ) 
NOK        20,626,548           USD           3,475,760      Canadian Imperial Bank of Commerce     11/04/13           (11,394 ) 
SEK        1,935,979           USD           300,105      Canadian Imperial Bank of Commerce     11/04/13           (1,374 ) 
USD        349,837           EUR           256,178      Deutsche Bank AG     11/04/13           2,007   
USD        2,128,302           GBP           1,327,368      Deutsche Bank AG     11/04/13           48   
CHF        5,789,808           USD           6,391,222      The Bank of New York Mellon     11/05/13           (10,003 ) 
NOK        19,360,326           USD           3,255,864      Deutsche Bank AG     11/05/13           (4,288 ) 
USD        2,391,871           JPY           235,144,834      Canadian Imperial Bank of Commerce     11/05/13           428   
Total                         $ (10,313 ) 
                       

 

 

  

 

Ÿ  

Exchange-traded options written as of October 31, 2013 were as follows:

 

Description    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

SINA Corp.

      Call         USD         88.00         11/04/13         225       $ (675 ) 

SINA Corp.

      Call         USD         92.50         11/04/13         221         (995 ) 

Mediaset SpA

      Call         EUR         3.50         11/15/13         305         (100,652 ) 

Mediaset SpA

      Call         EUR         3.60         11/15/13         305         (70,590 ) 

Fomento Economico Mexicano SAB de CV — ADR

      Call         USD         105.00         11/18/13         163         (6,520 ) 

Gildan Activewear, Inc.

      Call         CAD         50.00         11/18/13         466         (42,906 ) 

SINA Corp.

      Call         USD         95.00         11/18/13         224         (18,032 ) 

Yandex NV

      Call         USD         39.00         11/18/13         333         (14,985 ) 

Mediaset SpA

      Call         EUR         4.00         12/20/13         550         (178,671 ) 

Total

                   $ (434,026 ) 
                 

 

 

  

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows:

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Vale SA — ADR

   

Deutsche Bank AG

      Call         USD         17.21         11/04/13         125,400       $ (903 ) 

Aalberts Industries NV

   

Morgan Stanley & Co. International PLC

      Call         EUR         20.40         11/05/13         25,400         (54,866 ) 

Ageas

   

Deutsche Bank AG

      Call         EUR         31.57         11/05/13         73,500         (28,998 ) 

ASML Holding NV

   

Goldman Sachs International

      Call         EUR         70.83         11/05/13         33,700         (14,213 ) 

ASML Holding NV

   

Goldman Sachs International

      Call         EUR         72.87         11/05/13         20,000         (943 ) 

Aveva Group PLC

   

UBS AG

      Call         GBP         25.95         11/05/13         25,700         (6,940 ) 

AXA SA

   

Bank of America N.A.

      Call         EUR         17.91         11/05/13         147,000         (102,589 ) 

Babcock International Group PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         12.02         11/05/13         84,000         (99,387 ) 

Bank of Ireland

   

Deutsche Bank AG

      Call         EUR         0.23         11/05/13         2,657,700         (157,202 ) 

Bankinter SA

   

Morgan Stanley & Co. International PLC

      Call         EUR         4.16         11/05/13         175,000         (81,337 ) 

Cie Automotive SA

   

Goldman Sachs International

      Call         EUR         7.62         11/05/13         35,200         (18,442 ) 

DCC PLC

   

Bank of America N.A.

      Call         GBP         25.42         11/05/13         25,000         (102,939 ) 

DS Smith PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         2.92         11/05/13         356,500         (63,094 ) 

Duro Felguera SA

   

Morgan Stanley & Co. International PLC

      Call         EUR         5.35         11/05/13         100,500         (1 ) 

Erste Group Bank AG

   

Goldman Sachs International

      Call         EUR         24.13         11/05/13         33,900         (79,810 ) 

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    75

Table of Contents
Schedule of Investments (continued)      BlackRock International Growth and Income Trust (BGY)   

 

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows: (continued)

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Eurasia Drilling Co. Ltd. — GDR

   

Deutsche Bank AG

      Call         USD         40.20         11/05/13         7,300       $ (15,718 ) 

Eurasia Drilling Co. Ltd. — GDR

   

Morgan Stanley & Co. International PLC

      Call         USD         41.13         11/05/13         48,000         (61,747 ) 

Glencore Xstrata PLC

   

Deutsche Bank AG

      Call         GBP         3.41         11/05/13         570,000         (29,685 ) 

Halma PLC

   

Goldman Sachs International

      Call         GBP         5.67         11/05/13         140,000         (748 ) 

Intertek Group PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         34.26         11/05/13         73,600         (3,763 ) 

Kingspan Group PLC

   

UBS AG

      Call         EUR         11.87         11/05/13         6,500         (5,086 ) 

KUKA AG

   

Deutsche Bank AG

      Call         EUR         33.25         11/05/13         30,900         (32,270 ) 

Lloyds Banking Group PLC

   

Goldman Sachs International

      Call         GBP         0.76         11/05/13         2,196,000         (61,444 ) 

Rexel SA

   

Morgan Stanley & Co. International PLC

      Call         EUR         18.77         11/05/13         60,100         (6,182 ) 

Rotork PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         28.62         11/05/13         39,400         (19,463 ) 

Sacyr SA

   

UBS AG

      Call         EUR         3.63         11/05/13         378,000         (173,221 ) 

Sanofi

   

UBS AG

      Call         EUR         74.03         11/05/13         22,800         (139,732 ) 

Syngenta AG

   

Goldman Sachs International

      Call         CHF         375.14         11/05/13         10,100         (3,839 ) 

UBS AG

   

UBS AG

      Call         CHF         19.62         11/05/13         232,100         (5 ) 

Bayer AG

   

Citibank N.A.

      Call         EUR         86.03         11/06/13         71,100         (518,077 ) 

Blinkx PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         1.63         11/06/13         328,800         (20,552 ) 

Crest Nicholson Holdings PLC

   

Goldman Sachs International

      Call         GBP         3.47         11/06/13         10,833         (6,936 ) 

Crest Nicholson Holdings PLC

   

Goldman Sachs International

      Call         GBP         3.50         11/06/13         18,544         (10,952 ) 

Daimler AG

   

Goldman Sachs International

      Call         EUR         57.04         11/06/13         15,500         (69,066 ) 

Hargreaves Lansdown PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         10.30         11/06/13         118,500         (300,663 ) 

Novartis AG

   

UBS AG

      Call         CHF         70.55         11/06/13         209,000         (122,987 ) 

Ultra Electronics Holdings PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         19.40         11/06/13         15,000         (4,007 ) 

Vivendi SA

   

Citibank N.A.

      Call         EUR         17.63         11/06/13         90,000         (127,667 ) 

Euronet Worldwide, Inc.

   

Goldman Sachs International

      Call         USD         38.04         11/07/13         20,400         (109,746 ) 

Anhui Conch Cement Co. Ltd., Class H

   

Citibank N.A.

      Call         HKD         26.13         11/12/13         425,000         (64,669 ) 

Epistar Corp.

   

Citibank N.A.

      Call         TWD         56.53         11/12/13         852,000         (1,363 ) 

Kenedix Realty Investment Corp. — REIT

   

Morgan Stanley & Co. International PLC

      Call         JPY         465,942.73         11/12/13         125         (7,708 ) 

Nabtesco Corp.

   

Citibank N.A.

      Call         JPY         2,396.52         11/12/13         69,200         (32,219 ) 

SoftBank Corp.

   

Goldman Sachs International

      Call         JPY         6,850.99         11/12/13         119,700         (670,468 ) 

Sony Corp.

   

Goldman Sachs International

      Call         JPY         2,106.68         11/12/13         274,700         (46 ) 

Sumitomo Mitsui Financial Group, Inc.

   

Goldman Sachs International

      Call         JPY         4,940.31         11/12/13         150,400         (40,224 ) 

Tokyo Tatemono Co. Ltd.

   

Goldman Sachs International

      Call         JPY         929.81         11/12/13         295,000         (75,721 ) 

Toyota Motor Corp.

   

Goldman Sachs International

      Call         JPY         6,534.08         11/12/13         143,500         (84,547 ) 

Treasury Wine Estates Ltd.

   

Citibank N.A.

      Call         AUD         4.58         11/12/13         285,200         (48,922 ) 

Yahoo! Japan Corp.

   

Morgan Stanley & Co. International PLC

      Call         JPY         579.30         11/12/13         806,000         (2,215 ) 

Aveva Group PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         26.51         11/13/13         9,000         (1,343 ) 

Blinkx PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         1.63         11/13/13         328,800         (28,356 ) 

Halma PLC

   

Goldman Sachs International

      Call         GBP         5.67         11/13/13         70,000         (2,111 ) 

Inchcape PLC

   

Bank of America N.A.

      Call         GBP         6.24         11/13/13         118,600         (39,077 ) 

Kering

   

Morgan Stanley & Co. International PLC

      Call         EUR         171.18         11/13/13         29,000         (51,604 ) 

Kingspan Group PLC

   

UBS AG

      Call         EUR         11.87         11/13/13         11,800         (10,074 ) 

Melco Crown Entertainment Ltd. — ADR

   

Deutsche Bank AG

      Call         USD         31.57         11/13/13         83,800         (185,370 ) 

Randstad Holding NV

   

Goldman Sachs International

      Call         EUR         41.27         11/13/13         29,700         (171,150 ) 

Svenska Cellulosa AB, B Shares

   

Goldman Sachs International

      Call         SEK         164.28         11/13/13         144,000         (432,569 ) 

Technip SA

   

Bank of America N.A.

      Call         EUR         90.36         11/13/13         12,200         (176 ) 

Travis Perkins PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         16.86         11/13/13         61,000         (165,694 ) 

Ultra Electronics Holdings PLC

   

Goldman Sachs International

      Call         GBP         19.34         11/13/13         15,000         (6,362 ) 

Blinkx PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         1.59         11/20/13         325,700         (45,230 ) 

 

See Notes to Financial Statements.

 

76    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (continued)      BlackRock International Growth and Income Trust (BGY)   

 

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows: (continued)

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Aalberts Industries NV

   

Deutsche Bank AG

      Call         EUR         20.10         11/21/13         25,000       $ (65,290 ) 

AXA SA

   

Bank of America N.A.

      Call         EUR         17.91         11/21/13         147,000         (138,269 ) 

Babcock International Group PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         12.03         11/21/13         40,100         (47,311 ) 

Bank of Ireland

   

Deutsche Bank AG

      Call         EUR         0.22         11/21/13         3,918,800         (289,109 ) 

Crest Nicholson Holdings PLC

   

UBS AG

      Call         GBP         3.70         11/21/13         150,000         (50,993 ) 

Duro Felguera SA

   

Goldman Sachs International

      Call         EUR         5.17         11/21/13         35,600         (275 ) 

Erste Group Bank AG

   

Goldman Sachs International

      Call         EUR         23.74         11/21/13         93,800         (284,794 ) 

Eurasia Drilling Co. Ltd. — GDR

   

Morgan Stanley & Co. International PLC

      Call         USD         40.27         11/21/13         7,700         (17,403 ) 

Euronet Worldwide, Inc.

   

Deutsche Bank AG

      Call         USD         37.46         11/21/13         25,600         (156,941 ) 

Glencore Xstrata PLC

   

Goldman Sachs International

      Call         GBP         3.48         11/21/13         570,000         (38,012 ) 

Intertek Group PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         33.88         11/21/13         12,800         (6,655 ) 

Lloyds Banking Group PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         0.78         11/21/13         1,010,000         (23,934 ) 

NH Hoteles SA

   

Goldman Sachs International

      Call         EUR         4.18         11/21/13         227,000         (11,739 ) 

Rexel SA

   

Morgan Stanley & Co. International PLC

      Call         EUR         19.07         11/21/13         60,000         (13,120 ) 

Rotork PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         27.92         11/21/13         34,000         (54,503 ) 

Sacyr SA

   

Goldman Sachs International

      Call         EUR         3.70         11/21/13         295,400         (124,196 ) 

Schneider Electric SA

   

Morgan Stanley & Co. International PLC

      Call         EUR         65.33         11/21/13         80,600         (38,104 ) 

Societe Generale SA

   

Citibank N.A.

      Call         EUR         38.61         11/21/13         28,400         (131,452 ) 

Telefonica Deutschland Holding AG

   

Goldman Sachs International

      Call         EUR         5.96         11/21/13         317,000         (40,409 ) 

Travis Perkins PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         16.86         11/21/13         61,000         (167,539 ) 

Valeo SA

   

Morgan Stanley & Co. International PLC

      Call         EUR         66.24         11/21/13         32,500         (303,472 ) 

William Hill PLC

   

Goldman Sachs International

      Call         GBP         4.22         11/21/13         283,800         (5,215 ) 

Ziggo NV

   

UBS AG

      Call         EUR         30.27         11/21/13         70,800         (140,100 ) 

Melco Crown Entertainment Ltd. — ADR

   

Deutsche Bank AG

      Call         USD         31.57         11/25/13         83,800         (220,573 ) 

SKF AB, B Shares

   

JPMorgan Chase Bank N.A.

      Call         SEK         183.21         11/25/13         51,000         (3,246 ) 

Westjet Airlines Ltd.

   

UBS AG

      Call         CAD         25.86         11/25/13         54,000         (94,118 ) 

Babcock International Group PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         11.84         11/27/13         47,400         (71,328 ) 

Blinkx PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         1.59         11/27/13         325,700         (49,966 ) 

Erste Group Bank AG

   

UBS AG

      Call         EUR         24.06         11/27/13         93,800         (258,840 ) 

Lloyds Banking Group PLC

   

JPMorgan Chase Bank N.A.

      Call         GBP         0.76         11/27/13         1,103,600         (54,005 ) 

NH Hoteles SA

   

Goldman Sachs International

      Call         EUR         4.17         11/27/13         92,000         (6,115 ) 

Statoil ASA

   

Bank of America N.A.

      Call         NOK         137.25         12/02/13         50,500         (42,358 ) 

Statoil ASA

   

Citibank N.A.

      Call         NOK         143.12         12/02/13         59,500         (15,584 ) 

Statoil ASA

   

Morgan Stanley & Co. International PLC

      Call         NOK         139.80         12/02/13         162,500         (88,735 ) 

AIA Group Ltd.

   

Goldman Sachs International

      Call         HKD         38.81         12/03/13         1,095,600         (177,322 ) 

GCL-Poly Energy Holdings Ltd.

   

Citibank N.A.

      Call         HKD         2.52         12/03/13         8,502,000         (85,760 ) 

GMO internet, Inc.

   

Citibank N.A.

      Call         JPY         1,321.37         12/03/13         113,600         (18,772 ) 

Kenedix Realty Investment Corp. — REIT

   

Bank of America N.A.

      Call         JPY         462,308.68         12/03/13         128         (15,891 ) 

Oversea-Chinese Banking Corp. Ltd.

   

Bank of America N.A.

      Call         SGD         10.34         12/03/13         308,000         (49,197 ) 

Samsonite International SA

   

Morgan Stanley & Co. International PLC

      Call         HKD         22.59         12/03/13         475,500         (22,500 ) 

Shinsei Bank Ltd.

   

Morgan Stanley & Co. International PLC

      Call         JPY         225.65         12/03/13         582,000         (72,642 ) 

Aalberts Industries NV

   

Deutsche Bank AG

      Call         EUR         20.10         12/04/13         25,000         (67,197 ) 

Actelion Ltd.

   

Morgan Stanley & Co. International PLC

      Call         CHF         63.84         12/04/13         38,200         (284,325 ) 

Actelion Ltd.

   

Morgan Stanley & Co. International PLC

      Call         CHF         70.99         12/04/13         15,400         (31,761 ) 

Anheuser-Busch InBev NV

   

Citibank N.A.

      Call         EUR         72.98         12/04/13         91,700         (498,397 ) 

Anheuser-Busch InBev NV

   

Citibank N.A.

      Call         EUR         77.46         12/04/13         15,500         (21,681 ) 

Aveva Group PLC

   

UBS AG

      Call         GBP         26.78         12/04/13         5,000         (1,616 ) 

Babcock International Group PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         12.30         12/04/13         100,000         (88,200 ) 

Bank of Ireland

   

Morgan Stanley & Co. International PLC

      Call         EUR         0.22         12/04/13         5,543,000         (393,240 ) 

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    77

Table of Contents
Schedule of Investments (continued)      BlackRock International Growth and Income Trust (BGY)   

 

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows: (continued)

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Bankinter SA

   

Morgan Stanley & Co. International PLC

      Call         EUR         4.23         12/04/13         554,000       $ (267,155 ) 

Blinkx PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         1.59         12/04/13         325,700         (53,809 ) 

Cie Automotive SA

   

UBS AG

      Call         EUR         8.10         12/04/13         16,800         (3,383 ) 

CRH PLC

   

Goldman Sachs International

      Call         GBP         15.83         12/04/13         48,000         (19,726 ) 

Daimler AG

   

Morgan Stanley & Co. International PLC

      Call         EUR         58.66         12/04/13         35,500         (127,845 ) 

DCC PLC

   

Bank of America N.A.

      Call         GBP         25.42         12/04/13         25,000         (102,939 ) 

DS Smith PLC

   

UBS AG

      Call         GBP         2.91         12/04/13         356,500         (84,747 ) 

Halma PLC

   

Goldman Sachs International

      Call         GBP         5.67         12/04/13         70,000         (5,680 ) 

Inchcape PLC

   

Goldman Sachs International

      Call         GBP         6.18         12/04/13         111,900         (56,801 ) 

KUKA AG

   

Morgan Stanley & Co. International PLC

      Call         EUR         33.46         12/04/13         21,400         (39,669 ) 

NH Hoteles SA

   

Goldman Sachs International

      Call         EUR         4.17         12/04/13         92,000         (8,064 ) 

Novartis AG

   

Citibank N.A.

      Call         CHF         71.46         12/04/13         24,000         (21,896 ) 

Randstad Holding NV

   

Goldman Sachs International

      Call         EUR         41.27         12/04/13         29,700         (179,375 ) 

Rexel SA

   

Citibank N.A.

      Call         EUR         19.15         12/04/13         31,600         (9,636 ) 

Roche Holding AG

   

UBS AG

      Call         CHF         254.06         12/04/13         4,900         (12,706 ) 

Rotork PLC

   

UBS AG

      Call         GBP         28.17         12/04/13         29,700         (47,664 ) 

Sacyr SA

   

Deutsche Bank AG

      Call         EUR         3.85         12/04/13         295,400         (104,521 ) 

Svenska Cellulosa AB, B Shares

   

Goldman Sachs International

      Call         SEK         164.28         12/04/13         144,000         (441,283 ) 

Technip SA

   

Bank of America N.A.

      Call         EUR         90.36         12/04/13         12,200         (1,088 ) 

Valeo SA

   

Deutsche Bank AG

      Call         EUR         65.39         12/04/13         32,500         (348,384 ) 

William Hill PLC

   

Goldman Sachs International

      Call         GBP         4.01         12/04/13         283,800         (43,904 ) 

Euronet Worldwide, Inc.

   

UBS AG

      Call         USD         45.71         12/05/13         23,700         (14,074 ) 

Yandex NV

   

UBS AG

      Call         USD         41.48         12/05/13         75,000         (27,858 ) 

European Aeronautic Defence and Space Co. NV

   

Credit Suisse International

      Call         EUR         48.25         12/06/13         56,700         (233,468 ) 

Hargreaves Lansdown PLC

   

Goldman Sachs International

      Call         GBP         11.89         12/06/13         118,500         (59,966 ) 

Safran SA

   

Goldman Sachs International

      Call         EUR         46.92         12/06/13         41,000         (83,368 ) 

Vivendi SA

   

Citibank N.A.

      Call         EUR         19.17         12/06/13         70,600         (34,110 ) 

YY, Inc. — ADR

   

Deutsche Bank AG

      Call         USD         50.00         12/06/13         55,200         (252,185 ) 

Aveva Group PLC

   

Deutsche Bank AG

      Call         GBP         25.32         12/10/13         11,000         (14,968 ) 

DCC PLC

   

Deutsche Bank AG

      Call         GBP         25.40         12/10/13         30,000         (124,513 ) 

Eurasia Drilling Co. Ltd. — GDR

   

Morgan Stanley & Co. International PLC

      Call         USD         39.84         12/10/13         19,100         (53,663 ) 

Randstad Holding NV

   

Goldman Sachs International

      Call         EUR         42.72         12/10/13         58,400         (260,469 ) 

Rexel SA

   

Morgan Stanley & Co. International PLC

      Call         EUR         18.64         12/10/13         63,200         (37,390 ) 

Societe Generale SA

   

Goldman Sachs International

      Call         EUR         42.40         12/10/13         28,400         (49,791 ) 

Travis Perkins PLC

   

Goldman Sachs International

      Call         GBP         18.41         12/10/13         58,700         (66,289 ) 

APR Energy PLC

   

Citibank N.A.

      Call         GBP         11.73         12/11/13         25,000         (23,492 ) 

BNP Paribas SA

   

Credit Suisse International

      Call         EUR         54.06         12/11/13         140,000         (376,221 ) 

Crest Nicholson Holdings PLC

   

Goldman Sachs International

      Call         GBP         3.91         12/11/13         60,000         (12,131 ) 

Halma PLC

   

Goldman Sachs International

      Call         GBP         5.73         12/11/13         70,000         (5,105 ) 

Publicis Groupe SA

   

UBS AG

      Call         EUR         60.96         12/11/13         59,700         (152,321 ) 

Intertek Group PLC

   

Goldman Sachs International

      Call         GBP         33.79         12/12/13         54,600         (48,860 ) 

Kingspan Group PLC

   

UBS AG

      Call         EUR         12.49         12/12/13         13,000         (7,524 ) 

Telefonaktiebolaget LM Ericsson, Class B

   

Morgan Stanley & Co. International PLC

      Call         SEK         79.03         12/12/13         297,400         (66,626 ) 

Westjet Airlines Ltd.

   

UBS AG

      Call         CAD         25.86         12/16/13         54,000         (108,360 ) 

Aalberts Industries NV

   

Morgan Stanley & Co. International PLC

      Call         EUR         20.10         12/17/13         27,300         (74,923 ) 

Actelion Ltd.

   

Citibank N.A.

      Call         CHF         71.66         12/17/13         17,000         (32,904 ) 

Aveva Group PLC

   

UBS AG

      Call         GBP         26.78         12/17/13         5,000         (2,167 ) 

Bank of Ireland

   

UBS AG

      Call         EUR         0.23         12/17/13         3,428,300         (197,821 ) 

CRH PLC

   

Goldman Sachs International

      Call         GBP         15.77         12/17/13         113,200         (63,520 ) 

DCC PLC

   

Citibank N.A.

      Call         GBP         25.71         12/17/13         30,000         (109,938 ) 

 

See Notes to Financial Statements.

 

78    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (continued)      BlackRock International Growth and Income Trust (BGY)   

 

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows: (continued)

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Halma PLC

   

Goldman Sachs International

      Call         GBP         5.73         12/17/13         70,000       $ (5,686 ) 

KUKA AG

   

Deutsche Bank AG

      Call         EUR         32.80         12/17/13         33,300         (86,216 ) 

NH Hoteles SA

   

Goldman Sachs International

      Call         EUR         4.17         12/17/13         92,000         (10,293 ) 

Rexel SA

   

Citibank N.A.

      Call         EUR         19.15         12/17/13         31,600         (12,677 ) 

Seadrill Ltd.

   

Morgan Stanley & Co. International PLC

      Call         NOK         279.43         12/17/13         59,000         (60,026 ) 

SKF AB, B Shares

   

Deutsche Bank AG

      Call         SEK         178.49         12/17/13         153,500         (48,278 ) 

Ziggo NV

   

UBS AG

      Call         EUR         30.27         12/17/13         70,800         (169,299 ) 

Anhui Conch Cement Co. Ltd., Class H

   

UBS AG

      Call         HKD         27.59         12/18/13         778,000         (97,579 ) 

Epistar Corp.

   

UBS AG

      Call         TWD         53.34         12/18/13         1,185,000         (57,710 ) 

Kenedix Realty Investment Corp. — REIT

   

Morgan Stanley & Co. International PLC

      Call         JPY         472,766.90         12/18/13         105         (13,992 ) 

Nabtesco Corp.

   

Citibank N.A.

      Call         JPY         2,538.81         12/18/13         112,500         (39,347 ) 

Oversea-Chinese Banking Corp. Ltd.

   

Citibank N.A.

      Call         SGD         10.59         12/18/13         301,000         (31,570 ) 

Samsonite International SA

   

Morgan Stanley & Co. International PLC

      Call         HKD         22.59         12/18/13         475,500         (32,070 ) 

Shinsei Bank Ltd.

   

Morgan Stanley & Co. International PLC

      Call         JPY         225.65         12/18/13         582,000         (84,304 ) 

SoftBank Corp.

   

Citibank N.A.

      Call         JPY         7,683.80         12/18/13         34,500         (88,099 ) 

Tokyu Fudosan Holdings Corp.

   

Goldman Sachs International

      Call         JPY         1,035.11         12/18/13         207,200         (42,786 ) 

Treasury Wine Estates Ltd.

   

Goldman Sachs International

      Call         AUD         4.78         12/18/13         511,400         (77,673 ) 

Yahoo! Japan Corp.

   

Citibank N.A.

      Call         JPY         518.69         12/18/13         370,000         (16,710 ) 

Babcock International Group PLC

   

UBS AG

      Call         GBP         12.73         12/19/13         88,500         (40,254 ) 

Daimler AG

   

Deutsche Bank AG

      Call         EUR         61.44         12/19/13         67,300         (130,267 ) 

European Aeronautic Defence and Space Co. NV

   

Credit Suisse International

      Call         EUR         48.25         12/19/13         56,700         (252,335 ) 

Inchcape PLC

   

Deutsche Bank AG

      Call         GBP         6.32         12/19/13         112,000         (49,563 ) 

Roche Holding AG

   

Deutsche Bank AG

      Call         CHF         251.91         12/19/13         41,400         (216,242 ) 

Rotork PLC

   

Deutsche Bank AG

      Call         GBP         29.08         12/19/13         23,000         (26,679 ) 

Sanofi

   

Citibank N.A.

      Call         EUR         74.99         12/19/13         10,000         (57,957 ) 

Technip SA

   

Citibank N.A.

      Call         EUR         89.40         12/19/13         35,700         (10,458 ) 

Aalberts Industries NV

   

Deutsche Bank AG

      Call         EUR         20.53         1/03/14         22,000         (51,066 ) 

Aveva Group PLC

   

Deutsche Bank AG

      Call         GBP         25.74         1/03/14         18,000         (22,046 ) 

DS Smith PLC

   

UBS AG

      Call         GBP         3.10         1/03/14         362,000         (48,549 ) 

Eurasia Drilling Co. Ltd. — GDR

   

Bank of America N.A.

      Call         USD         40.09         1/03/14         16,100         (45,931 ) 

Eurasia Drilling Co. Ltd. — GDR

   

Morgan Stanley & Co. International PLC

      Call         USD         41.71         1/03/14         25,000         (46,440 ) 

Safran SA

   

Deutsche Bank AG

      Call         EUR         47.70         1/03/14         56,700         (110,036 ) 

Aveva Group PLC

   

Deutsche Bank AG

      Call         GBP         26.36         1/10/14         18,000         (15,268 ) 

Bank of Ireland

   

Goldman Sachs International

      Call         EUR         0.27         1/10/14         3,584,200         (76,146 ) 

Eurasia Drilling Co. Ltd. — GDR

   

Morgan Stanley & Co. International PLC

      Call         USD         42.83         1/10/14         12,500         (17,508 ) 

Halma PLC

   

UBS AG

      Call         GBP         5.59         1/10/14         46,000         (8,774 ) 

KUKA AG

   

Deutsche Bank AG

      Call         EUR         34.65         1/10/14         30,300         (55,046 ) 

NH Hoteles SA

   

Goldman Sachs International

      Call         EUR         4.01         1/10/14         113,500         (28,340 ) 

SKF AB, B Shares

   

Goldman Sachs International

      Call         SEK         176.45         1/10/14         47,100         (25,745 ) 

Vivendi SA

   

Deutsche Bank AG

      Call         EUR         18.75         1/10/14         122,000         (126,183 ) 

Aalberts Industries NV

   

Goldman Sachs International

      Call         EUR         21.33         1/14/14         22,700         (36,113 ) 

GMO internet, Inc.

   

Citibank N.A.

      Call         JPY         1,216.43         1/15/14         115,800         (84,349 ) 

Kenedix Realty Investment Corp. — REIT

   

Citibank N.A.

      Call         JPY         449,933.33         1/15/14         135         (37,295 ) 

NAVER Corp.

   

Citibank N.A.

      Call         KRW         642,676.00         1/15/14         4,400         (258,557 ) 

Samsung Heavy Industries Co. Ltd.

   

Citibank N.A.

      Call         KRW         41,390.69         1/15/14         64,600         (76,238 ) 

Aveva Group PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         26.10         1/22/14         8,600         (9,491 ) 

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    79

Table of Contents
Schedule of Investments (continued)      BlackRock International Growth and Income Trust (BGY)   

 

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows: (concluded)

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Aalberts Industries NV

   

Deutsche Bank AG

      Call         EUR         21.89         1/23/14         22,700       $ (26,397 ) 

Eurasia Drilling Co. Ltd. — GDR

   

Morgan Stanley & Co. International PLC

      Call         USD         42.83         1/23/14         12,500         (19,209 ) 

NH Hoteles SA

    Goldman Sachs International      Call         EUR         4.01         1/23/14         113,500         (31,749 ) 

Total

                      $ (17,293,488 ) 
                    

 

 

  

 

Ÿ  

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:

 

  Ÿ  

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

 

  Ÿ  

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)

 

  Ÿ  

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 fair value hierarchy classification 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, please refer to Note 2 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, 2013:

 

      Level 1      Level 2      Level 3      Total  

Assets:

            

Investments:

            

Long-Term Investments:

            

Common Stocks:

            

Australia

      —       $ 3,537,760         —       $ 3,537,760   

Austria

      —         14,142,324         —         14,142,324   

Belgium

      —         25,600,153         —         25,600,153   

Brazil

    $ 9,692,454         —         —         9,692,454   

Canada

      9,210,709         —         —         9,210,709   

China

      25,918,985         —         —         25,918,985   

Cyprus

      5,815,584         —         —         5,815,584   

France

      43,632,536         103,266,862         —         146,899,398   

Germany

      12,033,147         35,331,949         —         47,365,096   

Hong Kong

      7,384,732         19,584,015         —         26,968,747   

Indonesia

      8,439,071         2,823,872         —         11,262,943   

Ireland

      25,737,646         16,968,964         —         42,706,610   

Italy

      12,184,545         10,823,862         —         23,008,407   

Japan

      18,638,300         81,605,154         —         100,243,454   

Malaysia

      —         3,703,344         —         3,703,344   

Mexico

      10,748,160         —         —         10,748,160   

Netherlands

      9,260,325         33,494,452         —         42,754,777   

New Zealand

      —         6,604,793         —         6,604,793   

Norway

      —         16,694,094         —         16,694,094   

Russia

      18,671,101         —         —         18,671,101   

Singapore

      9,276,445         —         —         9,276,445   

South Korea

      —         8,857,171         —         8,857,171   

 

See Notes to Financial Statements.

 

80    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (concluded)      BlackRock International Growth and Income Trust (BGY)   

 

 

 

  
     Level 1     Level 2     Level 3      Total  

 

  

Assets: (concluded)

          

Investments: (concluded)

          

Long-Term Investments: (concluded)

          

Common Stocks: (concluded)

          

Spain

    $ 30,759,552      $ 11,229,613        —       $ 41,989,165   

Sweden

      18,577,577        15,638,906        —         34,216,483   

Switzerland

      9,292,263        77,918,734        —         87,210,997   

Taiwan

      —        6,424,811        —         6,424,811   

Thailand

      —        7,353,195        —         7,353,195   

United Kingdom

      96,832,561        96,413,752        —         193,246,313   

United States

      5,503,424        —        —         5,503,424   

Short-Term Securities

      22,346,730        —        —         22,346,730   

 

  

Total

    $ 409,955,847      $ 598,017,780        —       $ 1,007,973,627   
  

 

 

  
         

 

  
     Level 1     Level 2     Level 3      Total  

 

  

Derivative Financial Instruments1

          

Assets:

          

Foreign currency exchange contracts

    $ 41,414        —        —       $ 41,414   

Liabilities:

          

Equity contracts

      (84,112 )    $ (17,643,402 )      —         (17,727,514 ) 

Foreign currency exchange contracts

      (51,727 )      —        —         (51,727 ) 

 

  

Total

    $ (94,425 )    $ (17,643,402 )      —       $ (17,737,827 ) 
  

 

 

  

1     Derivative financial instruments are foreign currency exchange contracts and options written. Foreign currency exchange contracts are valued at the unrealized appreciation/depreciation on the instrument and options written are shown at value.

        

Certain of the Trust’s assets and/or liabilties are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2013, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
         

 

  
     Level 1     Level 2     Level 3      Total  

 

  

Assets:

          

Foreign currency at value

    $ 3,042,040        —        —       $ 3,042,040   

Cash pledged as collateral for options written

      5,724,000        —        —         5,724,000   

Liabilities:

          

Bank overdraft

      —      $ (1,358 )      —         (1,358 ) 

 

  

Total

    $ 8,766,040      $ (1,358 )      —       $ 8,764,682   
  

 

 

  

Certain foreign securities are fair valued utilizing an external pricing service to reflect any significant market movements between the time the Trust values such foreign securities and the earlier closing of foreign markets. Such fair valuations are categorized as Level 2 in the disclosure hierarchy. As of October 31, 2012, securities with a value of $9,537,865 were systematically fair valued due to significant market movements, but were not valued using systematic fair values as of October 31, 2013. Therefore, these securities were transferred from Level 2 to Level 1 during the period October 31, 2012 to October 31, 2013.

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    81

Table of Contents
Schedule of Investments October 31, 2013      BlackRock Real Asset Equity Trust (BCF)   
     (Percentages shown are based on Net Assets)   

 

Common Stocks    Shares      Value  

Chemicals — 14.6%

      

Agrium, Inc.

      68,900       $ 5,878,548   

Air Products & Chemicals, Inc. (a)

      88,600         9,658,286   

Celanese Corp., Series A (a)

      91,800         5,141,718   

The Dow Chemical Co. (a)

      155,725         6,146,466   

EI du Pont de Nemours & Co. (a)

      350,600         21,456,720   

Monsanto Co.

      65,400         6,859,152   

The Mosaic Co.

      19,000         871,150   

Olin Corp.

      172,700         3,887,477   

Potash Corp. of Saskatchewan, Inc.

      181,000         5,629,100   

Praxair, Inc. (a)

      160,200         19,978,542   
     

 

 

  
                85,507,159   

Containers & Packaging — 2.5%

      

MeadWestvaco Corp.

      419,800         14,630,030   

Energy Equipment & Services — 5.9%

      

Cameron International Corp. (a)(b)

      56,000         3,072,160   

Ensco PLC (a)

      69,000         3,977,850   

Halliburton Co. (a)

      148,000         7,848,440   

National Oilwell Varco, Inc. (a)

      44,700         3,628,746   

Schlumberger Ltd. (a)

      140,600         13,177,032   

Technip SA

      23,600         2,471,842   
     

 

 

  
                34,176,070   

Machinery — 4.1%

      

Caterpillar, Inc. (a)

      218,400         18,205,824   

Deere & Co.

      72,900         5,966,136   
     

 

 

  
                24,171,960   

Metals & Mining — 34.4%

      

African Rainbow Minerals Ltd.

      224,750         4,303,025   

Agnico Eagle Mines Ltd. (a)

      77,550         2,290,052   

Alcoa, Inc.

      260,550         2,415,300   

Allegheny Technologies, Inc. (a)

      36,000         1,191,600   

Alumina Ltd. (b)

      1,753,866         1,705,237   

Anglo American Platinum Ltd. (b)

      35,444         1,432,832   

Anglo American PLC

      77,945         1,853,281   

Barrick Gold Corp. (a)

      90,700         1,758,673   

BHP Billiton PLC

      748,600         23,100,845   

Carpenter Technology Corp.

      36,466         2,163,528   

Cia de Minas Buenaventura SA — ADR

      143,900         2,086,550   

Detour Gold Corp. (b)

      129,200         1,055,756   

Dominion Diamond Corp. (b)

      126,700         1,710,963   

Eldorado Gold Corp.

      429,300         2,894,527   

Eramet

      13,550         1,286,729   

First Quantum Minerals Ltd. (a)

      490,600         9,307,119   

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

      109,500         4,025,220   

Fresnillo PLC

      475,000         7,425,548   

Glencore Xstrata PLC

      3,512,887         19,118,054   

Goldcorp, Inc.

      216,950         5,517,040   

IAMGOLD Corp.

      243,500         1,244,766   

Iluka Resources Ltd.

      818,486         7,944,606   

Impala Platinum Holdings Ltd.

      370,200         4,496,700   

Industrias Penoles SAB de CV

      333,569         9,685,255   

Jiangxi Copper Co. Ltd., Class H

      1,339,500         2,568,087   

Kazakhmys PLC

      268,500         1,129,672   

Kinross Gold Corp.

      240,900         1,221,363   

Lundin Mining Corp. (a)(b)

      800,000         3,606,196   

Minsur SA

      3,846,986         1,942,222   

MMC Norilsk Nickel OJSC — ADR

      68,120         1,028,999   

Nevsun Resources Ltd.

      978,250         3,565,290   

New Gold, Inc. (b)

      378,000         2,218,731   

Newcrest Mining Ltd.

      314,085         3,045,591   

Newmont Mining Corp.

      51,550         1,405,253   

OZ Minerals Ltd.

      397,359         1,354,419   
Common Stocks    Shares      Value  

Metals & Mining (concluded)

      

Rio Tinto PLC

      479,104       $ 24,242,927   

Silver Wheaton Corp. (a)

      80,000         1,813,600   

Southern Copper Corp.

      68,806         1,923,128   

Teck Resources Ltd., Class B

      390,600         10,451,964   

United States Steel Corp. (a)

      39,800         990,622   

Vale SA — ADR

      519,000         8,309,190   

Vedanta Resources PLC

      432,700         7,372,383   

Western Areas Ltd.

      750,000         1,979,061   

Zijin Mining Group Co Ltd., Class H

      5,225,731         1,203,629   
     

 

 

  
                201,385,533   

Oil, Gas & Consumable Fuels — 28.9%

      

Anadarko Petroleum Corp. (a)

      102,500         9,767,225   

BG Group PLC

      347,000         7,078,747   

Cairn Energy PLC (b)

      470,000         2,129,655   

Caracal Energy, Inc. (b)

      340,000         2,616,768   

Chevron Corp. (a)

      144,000         17,274,240   

Cobalt International Energy, Inc. (a)(b)

      46,000         1,067,660   

Concho Resources, Inc. (a)(b)

      42,100         4,656,681   

ConocoPhillips (a)

      149,200         10,936,360   

CONSOL Energy, Inc. (a)

      45,579         1,663,634   

Continental Resources, Inc. (a)(b)

      36,800         4,191,520   

Enbridge, Inc.

      47,000         2,037,501   

Eni SpA (a)

      177,500         4,506,200   

EOG Resources, Inc. (a)

      45,400         8,099,360   

EQT Corp. (a)

      44,400         3,801,084   

Exxon Mobil Corp. (a)

      173,700         15,566,994   

Gulfport Energy Corp. (b)

      72,238         4,239,648   

Hess Corp.

      118,000         9,581,600   

Kodiak Oil & Gas Corp. (b)

      170,100         2,206,197   

Kosmos Energy Ltd. (b)

      192,870         2,055,994   

Noble Energy, Inc.

      130,500         9,778,365   

Phillips 66 (a)

      53,000         3,414,790   

Pioneer Natural Resources Co.

      29,371         6,014,593   

Range Resources Corp.

      68,700         5,201,277   

Rosetta Resources, Inc. (b)

      63,400         3,800,196   

Royal Dutch Shell PLC — ADR (a)

      110,900         7,392,594   

Southwestern Energy Co. (a)(b)

      55,500         2,065,710   

Suncor Energy, Inc.

      119,200         4,332,920   

TransCanada Corp. (a)

      136,000         6,129,228   

Whiting Petroleum Corp. (b)

      116,900         7,819,441   
     

 

 

  
                169,426,182   

Paper & Forest Products — 3.9%

      

Fibria Celulose SA — ADR (b)

      238,100         3,107,205   

International Paper Co. (a)

      350,000         15,613,500   

Mondi PLC

      237,512         4,241,034   
     

 

 

  
                22,961,739   

Real Estate Investment Trusts (REITs) — 2.3%

      

Weyerhaeuser Co. (a)

      443,900         13,494,560   

Total Long-Term Investments

(Cost — $490,777,341) — 96.6%

               565,753,233   
 

 

See Notes to Financial Statements.

 

82    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (continued)      BlackRock Real Asset Equity Trust (BCF)   
     (Percentages shown are based on Net Assets)   

 

 

Short-Term Securities    Shares      Value  

BlackRock Liquidity Funds, TempFund, Institutional Class, 0.03% (c)(d)

      21,163,179       $ 21,163,179   

Total Short-Term Securities

(Cost — $21,163,179) — 3.6%

               21,163,179   

Total Investments Before Options Written

(Cost — $511,940,520) — 100.2%

               586,916,412   
     
                  
Options Written          Value  

(Premiums Received — $4,859,346) — (0.8)%

    $ (4,828,567 ) 

Total Investments Net of Options Written — 99.4%

         582,087,845   

Other Assets Less Liabilities — 0.6%

         3,545,633   
     

 

 

  

Net Assets — 100.0%

       $ 585,633,478   
     

 

 

  
 
Notes to Schedule of Investments

 

(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, 2013, 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, 2012		      Net
Activity		     Shares/Beneficial
Interest Held at
October 31, 2013		      Income      Realized
Gain		  

BlackRock Liquidity Funds, TempFund, Institutional Class

      26,727,621         (5,564,442 )      21,163,179       $ 26,417       $ 306   

BlackRock Liquidity Series, LLC, Money Market Series

    $ 3,731,016       $ (3,731,016 )      —       $ 3,962         —   

 

Ÿ  

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 the investment advisor. These definitions may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease.

 

Ÿ  

Foreign currency exchange contracts as of October 31, 2013 were as follows:

 

Currency
Purchased		        Currency
Sold		     Counterparty   Settlement
Date		       

Unrealized

Depreciation

  
USD        47,011           CAD           49,164      Deutsche Bank AG     11/01/13         $ (142 ) 

 

Ÿ  

Exchange-traded options written as of October 31, 2013 were as follows:

 

Description    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Caterpillar, Inc.

      Call         USD         88.00         11/04/13         520       $ (520 ) 

EI du Pont de Nemours & Co.

      Call         USD         60.00         11/04/13         306         (38,097 ) 

EI du Pont de Nemours & Co.

      Call         USD         60.50         11/04/13         307         (23,332 ) 

EQT Corp.

      Call         USD         92.75         11/04/13         155         (76 ) 

Caterpillar, Inc.

      Call         USD         85.00         11/08/13         460         (10,350 ) 

Exxon Mobil Corp.

      Call         USD         88.00         11/08/13         92         (17,342 ) 

Eni SpA

      Call         EUR         18.00         11/15/13         125         (65,324 ) 

Air Products & Chemicals, Inc.

      Call         USD         110.00         11/18/13         100         (13,250 ) 

Air Products & Chemicals, Inc.

      Call         USD         115.00         11/18/13         110         (2,200 ) 

Allegheny Technologies, Inc.

      Call         USD         35.00         11/18/13         126         (3,150 ) 

Anadarko Petroleum Corp.

      Call         USD         95.00         11/18/13         358         (101,851 ) 

Cameron International Corp.

      Call         USD         65.00         11/18/13         100         (500 ) 

Cameron International Corp.

      Call         USD         67.50         11/18/13         100         (500 ) 

Caterpillar, Inc.

      Call         USD         90.00         11/18/13         744         (1,860 ) 

Celanese Corp., Series A

      Call         USD         52.50         11/18/13         315         (124,425 ) 

Chevron Corp.

      Call         USD         120.00         11/18/13         147         (21,609 ) 

Concho Resources, Inc.

      Call         USD         125.00         11/18/13         150         (12,000 ) 

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    83

Table of Contents
Schedule of Investments (continued)      BlackRock Real Asset Equity Trust (BCF)   

 

Ÿ  

Exchange-traded options written as of October 31, 2013 were as follows: (concluded)

 

Description    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts     

Market

Value

  

ConocoPhillips

      Call         USD         72.50         11/18/13         186       $ (26,691 ) 

CONSOL Energy, Inc.

      Call         USD         39.00         11/18/13         160         (2,400 ) 

The Dow Chemical Co.

      Call         USD         40.00         11/18/13         545         (27,795 ) 

EI du Pont de Nemours & Co.

      Call         USD         60.00         11/18/13         614         (89,644 ) 

Ensco PLC

      Call         USD         57.50         11/18/13         130         (12,675 ) 

Freeport-McMoRan Copper & Gold, Inc.

      Call         USD         35.00         11/18/13         206         (39,758 ) 

Freeport-McMoRan Copper & Gold, Inc.

      Call         USD         38.00         11/18/13         130         (3,250 ) 

Halliburton Co.

      Call         USD         50.00         11/18/13         263         (84,818 ) 

Halliburton Co.

      Call         USD         52.50         11/18/13         255         (33,533 ) 

International Paper Co.

      Call         USD         46.00         11/18/13         615         (13,223 ) 

Lundin Mining Corp.

      Call         CAD         5.00         11/18/13         1,400         (6,042 ) 

National Oilwell Varco, Inc.

      Call         USD         82.50         11/18/13         77         (6,006 ) 

Phillips 66

      Call         USD         60.00         11/18/13         93         (42,780 ) 

Phillips 66

      Call         USD         62.50         11/18/13         93         (23,482 ) 

Praxair, Inc.

      Call         USD         125.00         11/18/13         560         (67,200 ) 

Schlumberger Ltd.

      Call         USD         90.00         11/18/13         202         (82,820 ) 

Schlumberger Ltd.

      Call         USD         95.00         11/18/13         290         (24,215 ) 

Silver Wheaton Corp.

      Call         USD         27.00         11/18/13         132         (462 ) 

Southwestern Energy Co.

      Call         USD         38.00         11/18/13         97         (5,044 ) 

TransCanada Corp.

      Call         CAD         46.00         11/18/13         476         (57,751 ) 

Weyerhaeuser Co.

      Call         USD         31.00         11/18/13         778         (21,395 ) 

Exxon Mobil Corp.

      Call         USD         90.00         11/22/13         91         (6,097 ) 

Barrick Gold Corp.

      Call         USD         20.50         11/29/13         316         (13,746 ) 

Caterpillar, Inc.

      Call         USD         86.00         11/29/13         460         (23,460 ) 

Chevron Corp.

      Call         USD         121.00         11/29/13         108         (12,852 ) 

Agnico Eagle Mines Ltd.

      Call         USD         35.00         12/23/13         135         (4,253 ) 

Air Products & Chemicals, Inc.

      Call         USD         115.00         12/23/13         110         (12,650 ) 

Chevron Corp.

      Call         USD         120.00         12/23/13         147         (31,752 ) 

Cobalt International Energy, Inc.

      Call         USD         27.50         12/23/13         160         (10,000 ) 

Continental Resources, Inc.

      Call         USD         125.00         12/23/13         125         (31,875 ) 

First Quantum Minerals Ltd.

      Call         CAD         20.00         12/23/13         858         (73,650 ) 

First Quantum Minerals Ltd.

      Call         CAD         21.00         12/23/13         860         (41,241 ) 

Freeport-McMoRan Copper & Gold, Inc.

      Call         USD         36.00         12/23/13         49         (8,648 ) 

Royal Dutch Shell PLC — ADR

      Call         USD         70.00         12/23/13         388         (10,670 ) 

Southwestern Energy Co.

      Call         USD         39.00         12/23/13         97         (6,063 ) 

United States Steel Corp.

      Call         USD         25.00         12/23/13         139         (16,889 ) 

Total

                   $ (1,411,216 ) 
                 

 

 

  

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows:

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

EOG Resources, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         171.54         11/04/13         19,600       $ (146,128 ) 

Kodiak Oil & Gas Corp.

    Morgan Stanley & Co. International PLC      Call         USD         11.57         11/04/13         59,500         (83,742 ) 

Pioneer Natural Resources Co.

    Deutsche Bank AG      Call         USD         190.49         11/04/13         10,700         (158,365 ) 

Range Resources Corp.

    Morgan Stanley & Co. International PLC      Call         USD         79.17         11/04/13         31,700         (2,042 ) 

Vale SA — ADR

    Deutsche Bank AG      Call         USD         17.21         11/04/13         117,100         (843 ) 

Weyerhaeuser Co.

    Morgan Stanley & Co. International PLC      Call         USD         29.85         11/04/13         77,500         (49,043 ) 

Whiting Petroleum Corp.

    Morgan Stanley & Co. International PLC      Call         USD         56.98         11/04/13         14,800         (146,677 ) 

African Rainbow Minerals Ltd.

    UBS AG      Call         ZAR         198.69         11/05/13         36,000         (4,015 ) 

Eramet

    Morgan Stanley & Co. International PLC      Call         EUR         81.11         11/05/13         2,200         (1 ) 

Technip SA

    Deutsche Bank AG      Call         EUR         90.43         11/05/13         4,500         (3 ) 

 

See Notes to Financial Statements.

 

84    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (continued)      BlackRock Real Asset Equity Trust (BCF)   

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows: (continued)

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Vedanta Resources PLC

    Morgan Stanley & Co. International PLC      Call         GBP         11.93         11/05/13         78,300       $ (89 ) 

Cairn Energy PLC

    Morgan Stanley & Co. International PLC      Call         GBP         2.79         11/06/13         31,700         (2,927 ) 

Caracal Energy, Inc.

    UBS AG      Call         GBP         4.66         11/06/13         40,000         (9,649 ) 

International Paper Co.

    Citibank N.A.      Call         USD         48.52         11/07/13         61,200         (78 ) 

Kosmos Energy Ltd.

    Deutsche Bank AG      Call         USD         10.76         11/07/13         4,000         (782 ) 

Minsur SA

    Citibank N.A.      Call         PEN         1.48         11/07/13         319,500         (534 ) 

Ensco PLC

    Deutsche Bank AG      Call         USD         55.18         11/11/13         11,200         (29,441 ) 

Teck Resources Ltd., Class B

    UBS AG      Call         CAD         28.83         11/11/13         68,400         (18,144 ) 

Kosmos Energy Ltd.

    Citibank N.A.      Call         USD         10.57         11/12/13         31,800         (11,594 ) 

Newcrest Mining Ltd.

    UBS AG      Call         AUD         12.32         11/12/13         110,000         (816 ) 

Whiting Petroleum Corp.

    Morgan Stanley & Co. International PLC      Call         USD         64.12         11/12/13         13,100         (44,499 ) 

Cairn Energy PLC

    Morgan Stanley & Co. International PLC      Call         GBP         2.79         11/13/13         31,700         (3,732 ) 

Fibria Celulose SA — ADR

    Goldman Sachs International      Call         USD         12.08         11/13/13         44,000         (44,186 ) 

Fresnillo PLC

    Morgan Stanley & Co. International PLC      Call         GBP         10.36         11/13/13         41,200         (9,731 ) 

Suncor Energy, Inc.

    Deutsche Bank AG      Call         USD         36.90         11/13/13         20,800         (7,140 ) 

Technip SA

    Bank of America N.A.      Call         EUR         90.36         11/13/13         1,900         (27 ) 

Teck Resources Ltd., Class B

    UBS AG      Call         CAD         30.04         11/14/13         34,200         (2,671 ) 

BHP Billiton PLC

    Citibank N.A.      Call         GBP         18.32         11/21/13         257,000         (420,260 ) 

Industrias Penoles SAB de CV

    Citibank N.A.      Call         MXN         398.34         11/21/13         37,800         (28,854 ) 

Vedanta Resources PLC

    Morgan Stanley & Co. International PLC      Call         GBP         11.40         11/21/13         73,000         (10,720 ) 

Detour Gold Corp.

    Deutsche Bank AG      Call         CAD         9.09         11/22/13         22,600         (6,344 ) 

Olin Corp.

    Morgan Stanley & Co. International PLC      Call         USD         23.09         11/22/13         31,800         (10,364 ) 

Alcoa, Inc.

    UBS AG      Call         USD         8.54         11/25/13         43,700         (35,968 ) 

Enbridge, Inc.

    Deutsche Bank AG      Call         USD         43.71         11/25/13         16,400         (23,499 ) 

Kosmos Energy Ltd.

    Citibank N.A.      Call         USD         10.57         11/25/13         31,800         (15,987 ) 

Monsanto Co.

    UBS AG      Call         USD         109.02         11/25/13         10,700         (10,753 ) 

Caracal Energy, Inc.

    Citibank N.A.      Call         GBP         5.18         11/27/13         19,000         (565 ) 

BG Group PLC

    Citibank N.A.      Call         GBP         12.45         12/02/13         64,000         (48,011 ) 

ConocoPhillips

    Citibank N.A.      Call         USD         70.69         12/02/13         33,600         (118,059 ) 

Deere & Co.

    Credit Suisse International      Call         USD         83.61         12/02/13         12,700         (14,946 ) 

National Oilwell Varco, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         82.93         12/02/13         7,900         (9,677 ) 

Noble Energy, Inc.

    Deutsche Bank AG      Call         USD         77.06         12/02/13         22,800         (28,094 ) 

Olin Corp.

    Morgan Stanley & Co. International PLC      Call         USD         22.98         12/02/13         28,600         (13,102 ) 

Alumina Ltd.

    Goldman Sachs International      Call         AUD         1.01         12/03/13         613,800         (27,925 ) 

Eldorado Gold Corp.

    Deutsche Bank AG      Call         CAD         6.78         12/03/13         75,000         (40,780 ) 

Jiangxi Copper Co. Ltd., Class H

    UBS AG      Call         HKD         15.19         12/03/13         468,000         (24,025 ) 

Western Areas Ltd.

    UBS AG      Call         AUD         2.85         12/03/13         262,500         (28,752 ) 

Whiting Petroleum Corp.

    Morgan Stanley & Co. International PLC      Call         USD         61.05         12/03/13         13,000         (85,956 ) 

Zijin Mining Group Co Ltd., Class H

    UBS AG      Call         HKD         1.84         12/03/13         1,828,000         (13,538 ) 

African Rainbow Minerals Ltd.

    UBS AG      Call         ZAR         204.79         12/04/13         42,000         (15,157 ) 

The Mosaic Co.

    Citibank N.A.      Call         USD         46.75         12/04/13         3,100         (3,525 ) 

Potash Corp. of Saskatchewan, Inc.

    Deutsche Bank AG      Call         USD         32.32         12/04/13         31,600         (14,026 ) 

Suncor Energy, Inc.

    Deutsche Bank AG      Call         USD         36.90         12/04/13         20,800         (12,814 ) 

Technip SA

    Bank of America N.A.      Call         EUR         90.36         12/04/13         1,900         (169 ) 

Caracal Energy, Inc.

    Citibank N.A.      Call         GBP         4.92         12/06/13         40,000         (5,900 ) 

Caracal Energy, Inc.

    Citibank N.A.      Call         GBP         5.18         12/06/13         20,000         (943 ) 

Glencore Xstrata PLC

    Goldman Sachs International      Call         GBP         3.45         12/06/13         615,000         (78,615 ) 

Rio Tinto PLC

    Citibank N.A.      Call         GBP         32.68         12/06/13         83,800         (72,052 ) 

Rosetta Resources, Inc.

    Citibank N.A.      Call         USD         55.42         12/06/13         22,100         (155,654 ) 

Industrias Penoles SAB de CV

    Deutsche Bank AG      Call         MXN         388.70         12/09/13         42,700         (64,853 ) 

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    85

Table of Contents
Schedule of Investments (continued)      BlackRock Real Asset Equity Trust (BCF)   

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows: (concluded)

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Minsur SA

    Deutsche Bank AG      Call         PEN         1.27         12/09/13         319,500       $ (16,780 ) 

Nevsun Resources Ltd.

    Citibank N.A.      Call         CAD         3.52         12/09/13         50,000         (18,664 ) 

Noble Energy, Inc.

    Deutsche Bank AG      Call         USD         77.83         12/09/13         22,800         (27,643 ) 

Anglo American PLC

    Deutsche Bank AG      Call         GBP         16.00         12/10/13         27,200         (13,486 ) 

Cairn Energy PLC

    Morgan Stanley & Co. International PLC      Call         GBP         2.63         12/10/13         27,000         (9,534 ) 

Carpenter Technology Corp.

    Morgan Stanley & Co. International PLC      Call         USD         59.21         12/11/13         12,700         (24,191 ) 

Agrium, Inc.

    Barclays Bank PLC      Call         USD         84.92         12/12/13         22,700         (84,074 ) 

Anglo American Platinum Ltd.

    Deutsche Bank AG      Call         ZAR         437.16         12/12/13         12,400         (10,190 ) 

Fibria Celulose SA — ADR

    Deutsche Bank AG      Call         USD         12.91         12/12/13         39,300         (24,534 ) 

Fresnillo PLC

    UBS AG      Call         GBP         10.24         12/12/13         125,000         (87,745 ) 

Impala Platinum Holdings Ltd.

    Deutsche Bank AG      Call         ZAR         125.87         12/12/13         129,500         (67,383 ) 

MMC Norilsk Nickel OJSC — ADR

    Goldman Sachs International      Call         USD         15.90         12/12/13         23,800         (4,092 ) 

Monsanto Co.

    Citibank N.A.      Call         USD         106.79         12/12/13         12,100         (25,537 ) 

Alcoa, Inc.

    Citibank N.A.      Call         USD         9.57         12/13/13         47,400         (11,664 ) 

Kazakhmys PLC

    UBS AG      Call         GBP         2.58         12/13/13         94,000         (24,381 ) 

Deere & Co.

    Credit Suisse International      Call         USD         83.61         12/16/13         12,700         (19,853 ) 

BG Group PLC

    Deutsche Bank AG      Call         GBP         12.11         12/17/13         57,500         (71,338 ) 

Cairn Energy PLC

    Morgan Stanley & Co. International PLC      Call         GBP         2.66         12/17/13         27,000         (8,422 ) 

Mondi PLC

    UBS AG      Call         GBP         11.26         12/17/13         83,000         (45,317 ) 

Iluka Resources Ltd.

    Morgan Stanley & Co. International PLC      Call         AUD         10.18         12/18/13         286,400         (150,644 ) 

OZ Minerals Ltd.

    Citibank N.A.      Call         AUD         3.86         12/18/13         139,000         (10,474 ) 

Potash Corp. of Saskatchewan, Inc.

    Deutsche Bank AG      Call         USD         32.32         12/18/13         31,600         (18,803 ) 

Glencore Xstrata PLC

    Goldman Sachs International      Call         GBP         3.45         12/19/13         615,000         (93,126 ) 

Hess Corp.

    Morgan Stanley & Co. International PLC      Call         USD         81.26         12/19/13         41,300         (101,777 ) 

Rio Tinto PLC

    Citibank N.A.      Call         GBP         32.68         12/19/13         83,800         (92,587 ) 

Teck Resources Ltd., Class B

    UBS AG      Call         CAD         30.64         12/19/13         34,200         (15,189 ) 

Cairn Energy PLC

    Citibank N.A.      Call         GBP         2.78         1/03/14         47,000         (10,064 ) 

Industrias Penoles SAB de CV

    Citibank N.A.      Call         MXN         378.39         1/06/14         36,200         (88,830 ) 

Minsur SA

    Citibank N.A.      Call         PEN         1.38         1/06/14         319,500         (10,853 ) 

Minsur SA

    Credit Suisse International      Call         PEN         1.35         1/22/14         319,500         (13,390 ) 

Total

                      $ (3,417,351 ) 
                    

 

 

  

 

Ÿ  

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:

 

  Ÿ  

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

 

  Ÿ  

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)

 

  Ÿ  

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 fair value hierarchy classification 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, please refer to Note 2 of the Notes to Financial Statements.

 

See Notes to Financial Statements.

 

86    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (concluded)      BlackRock Real Asset Equity Trust (BCF)   

 

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy as of October 31, 2013:

 

 

  
     Level 1     Level 2     Level 3      Total  

 

  

Assets:

          

Investments:

          

Long-Term Investments:

          

Common Stocks:

          

Chemicals

    $ 85,507,159        —        —       $ 85,507,159   

Containers & Packaging

      14,630,030        —        —         14,630,030   

Energy Equipment & Services

      31,704,228      $ 2,471,842        —         34,176,070   

Machinery

      24,171,960        —        —         24,171,960   

Metals & Mining

      84,793,908        116,591,625        —         201,385,533   

Oil, Gas & Consumable Fuels

      155,711,580        13,714,602        —         169,426,182   

Paper & Forest Products

      18,720,705        4,241,034        —         22,961,739   

Real Estate Investment Trusts (REITs)

      13,494,560        —        —         13,494,560   

Short-Term Securities

      21,163,179        —        —         21,163,179   

 

  

Total

    $ 449,897,309      $ 137,019,103        —       $ 586,916,412   
  

 

 

  
         

 

  
     Level 1     Level 2     Level 3      Total  

 

  

Derivative Financial Instruments1

          

Liabilities:

          

Equity contracts

    $ (1,345,814 )    $ (3,482,753 )      —       $ (4,828,567 ) 

Foreign currency exchange contracts

      (142 )      —        —         (142 ) 

 

  

Total

    $ (1,345,956 )    $ (3,482,753 )      —       $ (4,828,709 ) 
  

 

 

  

1    Derivative financial instruments are foreign currency exchange contracts and options written. Foreign currency exchange contracts are valued at the unrealized appreciation/ depreciation on the instrument and options written 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, 2013, such assets are categorized within the disclosure hierarchy as follows:    
         

 

  
     Level 1     Level 2     Level 3      Total  

 

  

Assets:

          

Cash

    $ 62,898        —        —       $ 62,898   

Foreign currency at value

      98,922        —        —         98,922   

 

  

Total

    $ 161,820        —        —       $ 161,820   
  

 

 

  

There were no transfers between Levels during the year ended October 31, 2013.

 

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    87

Table of Contents
Consolidated Schedule of Investments October 31, 2013      BlackRock Resources & Commodities Strategy Trust (BCX)   
     (Percentages shown are based on Net Assets)   

 

Common Stocks    Shares      Value  

Chemicals — 14.3%

      

Agrium, Inc.

      74,900       $ 6,390,468   

CF Industries Holdings, Inc. (a)

      21,300         4,592,280   

Israel Chemicals Ltd.

      475,730         3,933,000   

Monsanto Co.

      243,400         25,527,792   

The Mosaic Co.

      153,908         7,056,682   

Potash Corp. of Saskatchewan, Inc.

      445,700         13,861,270   

Syngenta AG

      60,803         24,541,106   

Yara International ASA

      98,800         4,255,053   
     

 

 

  
                90,157,651   

Food Products — 6.3%

      

Archer-Daniels-Midland Co. (a)

      300,600         12,294,540   

Bunge Ltd. (a)

      151,800         12,467,334   

Ingredion, Inc.

      143,895         9,462,535   

Nestle SA

      80,071         5,779,842   
     

 

 

  
                40,004,251   

Machinery — 5.1%

      

AGCO Corp. (a)

      203,933         11,905,609   

CNH Industrial NV (b)

      794,692         9,321,737   

Deere & Co.

      130,020         10,640,837   
     

 

 

  
                31,868,183   

Metals & Mining — 20.5%

      

Augusta Resource Corp. (b)

      869,829         1,626,580   

BHP Billiton Ltd. — ADR (a)

      360,700         25,497,883   

First Quantum Minerals Ltd. (a)

      589,800         11,189,032   

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

      468,000         17,203,680   

Fresnillo PLC

      328,700         5,138,479   

Glencore Xstrata PLC

      2,391,500         13,015,171   

Goldcorp, Inc.

      150,729         3,833,038   

Labrador Iron Ore Royalty Corp. (a)

      201,453         6,115,175   

MMC Norilsk Nickel OJSC — ADR

      398,200         6,015,081   

Nevsun Resources Ltd.

      2,204,650         8,034,978   

Rio Tinto PLC — ADR (a)

      420,600         21,324,420   

Teck Resources Ltd., Class B

      204,400         5,469,486   

Vedanta Resources PLC

      261,750         4,459,721   
     

 

 

  
                128,922,724   

Oil, Gas & Consumable Fuels — 50.7%

      

BP PLC — ADR (a)

      467,100         21,720,150   

Cairn Energy PLC (b)

      2,715,000         12,302,154   

Canadian Oil Sands Ltd. (a)

      744,000         14,499,669   

Chevron Corp. (a)

      372,900         44,733,084   
Common Stocks    Shares      Value  

Oil, Gas & Consumable Fuels (concluded)

      

China Shenhua Energy Co. Ltd., Series H

      1,025,500       $ 3,121,605   

ConocoPhillips

      392,100         28,740,930   

Cosan Ltd., Class A

      342,400         5,396,224   

Enbridge, Inc.

      284,700         12,342,052   

Eni SpA — ADR

      236,400         12,009,120   

Exxon Mobil Corp. (a)

      479,299         42,954,776   

Hess Corp.

      225,400         18,302,480   

Imperial Oil Ltd. (a)

      197,300         8,615,613   

Inpex Corp.

      920,000         10,627,816   

Royal Dutch Shell PLC — ADR (a)

      331,200         22,077,792   

Southwestern Energy Co. (a)(b)

      569,000         21,178,180   

Statoil ASA

      695,000         16,444,541   

Total SA — ADR (a)

      148,900         9,109,702   

Ultra Petroleum Corp. (a)(b)

      843,500         15,486,660   
     

 

 

  
                319,662,548   

Real Estate Investment Trusts (REITs) — 0.8%

      

Plum Creek Timber Co., Inc. (a)

      68,500         3,109,900   

Rayonier, Inc. (a)

      46,600         2,191,132   
     

 

 

  
                5,301,032   

Total Long-Term Investments

(Cost — $614,055,201) — 97.7%

               615,916,389   
     
Short-Term Securities                

BlackRock Liquidity Funds, TempFund, Institutional Class, 0.03% (c)(d)

      29,416,955         29,416,955   

Total Short-Term Securities

(Cost — $29,416,955) — 4.6%

               29,416,955   

Total Investments Before Options Written

(Cost — $643,472,156) — 102.3%

               645,333,344   
     
Options Written                

(Premiums Received — $4,250,223) — (0.7)%

               (4,497,214 ) 

Total Investments Net of Options Written — 101.6%

  

      640,836,130   

Liabilities in Excess of Other Assets — (1.6)%

         (10,218,637 ) 
     

 

 

  

Net Assets — 100.0%

       $ 630,617,493   
     

 

 

  
 
Notes to Schedule of Investments

 

(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, 2013, 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, 2012		      Net
Activity		      Shares Held at
October 31, 2013		      Income      Realized
Gain		  

BlackRock Liquidity Funds, TempFund, Institutional Class

      7,260,037         22,156,918         29,416,955       $ 15,215       $ 142   

 

See Notes to Financial Statements.

 

88    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Consolidated Schedule of Investments (continued)      BlackRock Resources & Commodities Strategy Trust (BCX)   

 

 

Ÿ  

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, 2013, 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, 2012		      Shares
Purchased		      Shares
Sold		     Shares Held at
October 31, 2013		      Value at
October 31,
2013		      Income      Realized
Loss		  

Prospect Global Resources, Inc. 1

      2,884,615         —         (2,884,615 )      —         —         —       $ (6,700,693 ) 

 

1

No longer an affiliated company or held by the Trust as of report date.

 

Ÿ  

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 the investment advisor. These definitions may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease.

 

Ÿ  

Foreign currency exchange contracts as of October 31, 2013 were as follows:

 

Currency

Purchased

       

Currency

Sold

     Counterparty   Settlement
Date		        Unrealized
Appreciation
(Depreciation)		  
USD        61,376           CAD           64,213      The Bank of New York Mellon Corp.     11/01/13         $ (211 ) 
USD        13,755           GBP           8,577      Deutsche Bank Securities Corp.     11/01/13           2   
Total                         $ (209 ) 
                       

 

 

  

 

Ÿ  

Exchange-traded options written as of October 31, 2013 were as follows:

 

Description    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Rayonier, Inc.

      Call         USD         56.00         11/04/13         123       $ —   

Exxon Mobil Corp.

      Call         USD         88.00         11/08/13         533         (100,470 ) 

BHP Billiton Ltd. — ADR

      Call         USD         67.50         11/18/13         422         (145,590 ) 

BHP Billiton Ltd. — ADR

      Call         USD         70.00         11/18/13         526         (80,215 ) 

Bunge Ltd.

      Call         USD         82.50         11/18/13         400         (33,000 ) 

CF Industries Holdings, Inc.

      Call         USD         220.00         11/18/13         75         (23,438 ) 

Chevron Corp.

      Call         USD         120.00         11/18/13         385         (56,595 ) 

Freeport-McMoRan Copper & Gold, Inc.

      Call         USD         35.00         11/18/13         956         (184,508 ) 

Freeport-McMoRan Copper & Gold, Inc.

      Call         USD         38.00         11/18/13         440         (11,000 ) 

Imperial Oil Ltd.

      Call         CAD         46.00         11/18/13         347         (11,815 ) 

Labrador Iron Ore Royalty Corp.

      Call         CAD         32.00         11/18/13         200         (5,755 ) 

Labrador Iron Ore Royalty Corp.

      Call         CAD         33.00         11/18/13         200         (1,630 ) 

Plum Creek Timber Co., Inc.

      Call         USD         49.00         11/18/13         119         (357 ) 

Rio Tinto PLC — ADR

      Call         USD         52.50         11/18/13         736         (27,600 ) 

Southwestern Energy Co.

      Call         USD         38.00         11/18/13         995         (51,740 ) 

Total SA — ADR

      Call         USD         60.00         11/18/13         126         (19,215 ) 

Ultra Petroleum Corp.

      Call         USD         22.00         11/18/13         1,600         (16,000 ) 

Rayonier, Inc.

      Call         USD         57.25         11/21/13         40         (157 ) 

BP PLC — ADR

      Call         USD         44.00         11/22/13         985         (248,712 ) 

Exxon Mobil Corp.

      Call         USD         90.00         11/22/13         534         (35,778 ) 

Chevron Corp.

      Call         USD         121.00         11/29/13         275         (32,725 ) 

BP PLC — ADR

      Call         USD         43.00         12/06/13         650         (227,500 ) 

Archer-Daniels-Midland Co.

      Call         USD         42.00         12/23/13         525         (50,138 ) 

BHP Billiton Ltd. — ADR

      Call         USD         75.00         12/23/13         315         (19,845 ) 

Canadian Oil Sands Ltd.

      Call         CAD         21.00         12/23/13         1,300         (11,845 ) 

Chevron Corp.

      Call         USD         120.00         12/23/13         385         (83,160 ) 

First Quantum Minerals Ltd.

      Call         CAD         20.00         12/23/13         1,032         (88,586 ) 

First Quantum Minerals Ltd.

      Call         CAD         21.00         12/23/13         1,032         (49,489 ) 

Freeport-McMoRan Copper & Gold, Inc.

      Call         USD         36.00         12/23/13         245         (43,242 ) 

Plum Creek Timber Co., Inc.

      Call         USD         50.00         12/23/13         119         (952 ) 

Royal Dutch Shell PLC — ADR

      Call         USD         70.00         12/23/13         1,159         (31,872 ) 

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    89

Table of Contents
Consolidated Schedule of Investments (continued)      BlackRock Resources & Commodities Strategy Trust (BCX)   

 

 

Ÿ  

Exchange-traded options written as of October 31, 2013 were as follows: (concluded)

 

Description    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts     

Market

Value

  

Southwestern Energy Co.

      Call         USD         39.00         12/23/13         995       $ (62,188 ) 

Ultra Petroleum Corp.

      Call         USD         22.00         12/23/13         300         (3,750 ) 

Archer-Daniels-Midland Co.

      Call         USD         43.00         1/20/14         525         (54,862 ) 

Total

                   $ (1,813,729 ) 
                 

 

 

  

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows:

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts     

Market

Value

  

AGCO Corp.

    Goldman Sachs International      Call         USD         62.02         11/04/13         71,300       $ (23 ) 

Ultra Petroleum Corp.

    Morgan Stanley & Co. International PLC      Call         USD         21.48         11/04/13         50,000         (15 ) 

Syngenta AG

    Goldman Sachs International      Call         CHF         375.14         11/05/13         21,200         (8,058 ) 

Vedanta Resources PLC

    Morgan Stanley & Co. International PLC      Call         GBP         11.93         11/05/13         69,700         (79 ) 

Cairn Energy PLC

    Morgan Stanley & Co. International PLC      Call         GBP         2.79         11/06/13         125,600         (11,597 ) 

Nestle SA

    Bank of America N.A.      Call         CHF         63.83         11/06/13         28,000         (52,091 ) 

Ultra Petroleum Corp.

    Morgan Stanley & Co. International PLC      Call         USD         21.94         11/07/13         60,000         (219 ) 

Teck Resources Ltd., Class B

    UBS AG      Call         CAD         28.83         11/11/13         35,800         (9,497 ) 

Cairn Energy PLC

    Morgan Stanley & Co. International PLC      Call         GBP         2.79         11/13/13         125,600         (14,788 ) 

Teck Resources Ltd., Class B

    UBS AG      Call         CAD         30.04         11/14/13         17,900         (1,398 ) 

Cosan Ltd., Class A

    Citibank N.A.      Call         USD         15.72         11/20/13         56,000         (33,162 ) 

Vedanta Resources PLC

    Morgan Stanley & Co. International PLC      Call         GBP         11.40         11/21/13         22,000         (3,231 ) 

CNH Industrial NV

    Deutsche Bank AG      Call         USD         12.45         11/22/13         278,100         (27,576 ) 

Enbridge, Inc.

    Deutsche Bank AG      Call         CAD         43.71         11/25/13         62,800         (89,985 ) 

Ingredion, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         67.82         11/25/13         25,000         (19,662 ) 

Monsanto Co.

    UBS AG      Call         USD         109.02         11/25/13         42,400         (42,611 ) 

ConocoPhillips

    Citibank N.A.      Call         USD         70.69         12/02/13         137,200         (482,076 ) 

Deere & Co.

    Credit Suisse International      Call         USD         83.61         12/02/13         22,700         (26,715 ) 

Eni SpA — ADR

    Citibank N.A.      Call         USD         49.57         12/02/13         49,300         (87,638 ) 

Statoil ASA

    Bank of America N.A.      Call         NOK         137.25         12/02/13         243,200         (203,990 ) 

Cairn Energy PLC

    Morgan Stanley & Co. International PLC      Call         GBP         2.68         12/04/13         233,000         (64,916 ) 

The Mosaic Co.

    Citibank N.A.      Call         USD         46.75         12/04/13         26,900         (30,591 ) 

Potash Corp. of Saskatchewan, Inc.

    Deutsche Bank AG      Call         USD         32.32         12/04/13         77,900         (34,577 ) 

Yara International ASA

    Citibank N.A.      Call         NOK         246.46         12/04/13         34,500         (75,262 ) 

Imperial Oil Ltd.

    Deutsche Bank AG      Call         CAD         47.69         12/05/13         34,200         (5,454 ) 

Total SA — ADR

    JPMorgan Chase Bank N.A.      Call         USD         62.75         12/05/13         39,500         (23,243 ) 

Glencore Xstrata PLC

    Goldman Sachs International      Call         GBP         3.45         12/06/13         418,500         (53,496 ) 

Enbridge, Inc.

    Citibank N.A.      Call         CAD         42.46         12/09/13         36,800         (96,707 ) 

Ingredion, Inc.

    Morgan Stanley & Co. International PLC      Call         USD         67.82         12/09/13         25,000         (28,340 ) 

Labrador Iron Ore Royalty Corp.

    Citibank N.A.      Call         CAD         31.06         12/09/13         30,500         (35,861 ) 

Nevsun Resources Ltd.

    Citibank N.A.      Call         CAD         3.52         12/09/13         110,000         (41,060 ) 

Cairn Energy PLC

    Morgan Stanley & Co. International PLC      Call         GBP         2.63         12/10/13         116,500         (41,136 ) 

Cosan Ltd., Class A

    Morgan Stanley & Co. International PLC      Call         USD         16.53         12/10/13         63,800         (22,588 ) 

Agrium, Inc.

    Barclays Bank PLC      Call         USD         84.92         12/12/13         26,300         (97,407 ) 

Fresnillo PLC

    UBS AG      Call         GBP         10.24         12/12/13         115,000         (80,725 ) 

MMC Norilsk Nickel OJSC — ADR

    Goldman Sachs International      Call         USD         15.90         12/12/13         139,300         (23,953 ) 

Monsanto Co.

    Citibank N.A.      Call         USD         106.79         12/12/13         42,700         (90,117 ) 

Rio Tinto PLC — ADR

    UBS AG      Call         USD         50.09         12/12/13         73,600         (150,112 ) 

Deere & Co.

    Credit Suisse International      Call         USD         83.61         12/16/13         22,700         (35,485 ) 

Bunge Ltd.

    Citibank N.A.      Call         USD         79.17         12/17/13         13,200         (47,219 ) 

Cairn Energy PLC

    Morgan Stanley & Co. International PLC      Call         GBP         2.66         12/17/13         116,500         (36,337 ) 

China Shenhua Energy Co. Ltd., Series H

    Citibank N.A.      Call         HKD         24.26         12/18/13         359,000         (32,048 ) 

 

See Notes to Financial Statements.

 

90    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Consolidated Schedule of Investments (continued)      BlackRock Resources & Commodities Strategy Trust (BCX)   

 

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows: (concluded)

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts     

Market

Value

  

Inpex Corp.

    Morgan Stanley & Co. International PLC      Call         JPY         1,175.70         12/18/13         322,000       $ (83,385 ) 

Potash Corp. of Saskatchewan, Inc.

    Deutsche Bank AG      Call         USD         32.32         12/18/13         77,900         (46,353 ) 

Glencore Xstrata PLC

    Goldman Sachs International      Call         GBP         3.45         12/19/13         418,500         (63,371 ) 

Hess Corp.

    Deutsche Bank AG      Call         USD         85.83         12/19/13         78,800         (66,100 ) 

Israel Chemicals Ltd.

    Deutsche Bank AG      Call         ILS         30.55         12/19/13         166,500         (68,209 ) 

Teck Resources Ltd., Class B

    UBS AG      Call         CAD         30.64         12/19/13         17,900         (7,950 ) 

Eni SpA — ADR

    Bank of America N.A.      Call         USD         50.73         1/06/14         33,400         (52,238 ) 

Cairn Energy PLC

    Goldman Sachs International      Call         GBP         2.84         1/10/14         116,500         (20,544 ) 

Cairn Energy PLC

    Morgan Stanley & Co. International PLC      Call         GBP         2.88         1/22/14         116,500         (14,290 ) 

Total

                      $ (2,683,485 ) 
                    

 

 

  

 

Ÿ  

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:

 

  Ÿ  

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

 

  Ÿ  

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)

 

  Ÿ  

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 fair value hierarchy classification 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, please refer to Note 2 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, 2013:

 

      Level 1      Level 2      Level 3      Total  

Assets:

            

Investments:

            

Long-Term Investments:

            

Common Stocks:

            

Chemicals

    $ 57,428,492       $ 32,729,159         —       $ 90,157,651   

Food Products

      34,224,409         5,779,842         —         40,004,251   

Machinery

      31,868,183         —         —         31,868,183   

Metals & Mining

      100,294,272         28,628,452         —         128,922,724   

Oil, Gas & Consumable Fuels

      280,288,037         39,374,511         —         319,662,548   

Real Estate Investment Trusts (REITs)

      5,301,032         —         —         5,301,032   

Short-Term Securities

      29,416,955         —         —         29,416,955   

Total

    $ 538,821,380       $ 106,511,964         —       $ 645,333,344   
  

 

 

  

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    91

Table of Contents
Consolidated Schedule of Investments (concluded)      BlackRock Resources & Commodities Strategy Trust (BCX)   

 

 

      Level 1     Level 2     Level 3      Total  

Derivative Financial Instruments1

          

Assets:

          

Foreign currency exchange contracts

    $ 2        —        —       $ 2   

Liabilities:

          

Equity contracts

      (1,586,072 )    $ (2,911,142 )      —         (4,497,214 ) 

Foreign currency exchange contracts

      (211 )      —        —         (211 ) 

Total

    $ (1,586,281 )    $ (2,911,142 )      —       $ (4,497,423 ) 
  

 

 

  

1      Derivative financial instruments are foreign currency exchange contracts and options written. Foreign currency exchange contracts are valued at the unrealized apprecition/ depreciation on the instrument and options written 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, 2013, such assets are categorized within the disclosure hierarchy as follows:    
         

 

  
     Level 1     Level 2     Level 3      Total  

 

  

Assets:

          

Cash

    $ 184,759        —        —       $ 184,759   

Foreign currency at value

      61,422        —        —         61,422   

 

  

Total

    $ 246,181        —        —       $ 246,181   
  

 

 

  

There were no transfers between Levels during the year ended October 31, 2013.

 

See Notes to Financial Statements.

 

92    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments October 31, 2013      BlackRock Utility and Infrastructure Trust (BUI)   
     (Percentages shown are based on Net Assets)   

 

Common Stocks    Shares      Value  

Construction & Engineering — 3.7%

      

Ferrovial SA

      303,500       $ 5,785,269   

Vinci SA

      110,200         7,051,308   
     

 

 

  
                12,836,577   

Diversified Telecommunication Services — 6.8%

      

BT Group PLC

      1,178,800         7,132,540   

Swisscom AG

      2,170         1,106,821   

Telenor ASA

      248,300         5,966,058   

Verizon Communications, Inc. (a)

      193,600         9,778,736   
     

 

 

  
                23,984,155   

Electric Utilities — 16.9%

      

American Electric Power Co., Inc. (a)

      37,600         1,761,184   

Cleco Corp.

      37,300         1,728,482   

Duke Energy Corp. (a)

      158,868         11,395,602   

Edison International (a)

      127,600         6,256,228   

ITC Holdings Corp. (a)

      48,600         4,888,674   

NextEra Energy, Inc. (a)

      152,800         12,949,799   

Northeast Utilities

      75,000         3,216,750   

NRG Yield, Inc., Class A (b)

      160,400         5,681,368   

OGE Energy Corp.

      53,200         1,963,080   

PPL Corp. (a)

      82,700         2,533,101   

Spark Infrastructure Group

      680,600         1,090,103   

Terna Rete Elettrica Nazionale SpA (a)

      251,100         1,243,047   

Westar Energy, Inc.

      91,600         2,895,476   

Xcel Energy, Inc.

      59,900         1,728,714   
     

 

 

  
                59,331,608   

Gas Utilities — 1.0%

      

Snam SpA (a)

      692,300         3,568,140   

Independent Power Producers & Energy Traders — 3.7%

  

   

EDP Renovaveis SA (b)

      329,200         1,809,822   

Enel Green Power SpA (a)

      853,500         2,076,203   

NRG Energy, Inc.

      143,701         4,099,790   

Pattern Energy Group, Inc. (b)

      40,400         916,272   

Tractebel Energia SA

      235,500         4,005,245   
     

 

 

  
                12,907,332   

Machinery — 0.8%

      

Xylem, Inc.

      84,600         2,918,700   

Media — 2.2%

      

Comcast Corp., Special Class A (a)

      90,100         4,171,630   

Time Warner Cable, Inc. (a)

      29,300         3,520,395   
     

 

 

  
                7,692,025   

Multi-Utilities — 19.7%

      

CenterPoint Energy, Inc.

      155,900         3,835,140   

Centrica PLC

      310,300         1,758,302   

CMS Energy Corp. (a)

      402,500         11,052,650   

Dominion Resources, Inc. (a)

      154,700         9,862,125   

DTE Energy Co.

      25,400         1,756,156   

E.ON SE

      39,300         716,383   

MDU Resources Group, Inc.

      145,400         4,330,012   

National Grid PLC

      1,020,500         12,824,475   

NiSource, Inc. (a)

      87,200         2,748,544   

NorthWestern Corp.

      67,000         3,071,280   

Public Service Enterprise Group, Inc.

      164,401         5,507,434   
Common Stocks    Shares      Value  

Multi-Utilities (concluded)

      

Sempra Energy

      76,100       $ 6,935,754   

Wisconsin Energy Corp.

      117,100         4,931,081   
     

 

 

  
                69,329,336   

Oil, Gas & Consumable Fuels — 21.8%

      

Access Midstream Partners LP

      35,476         1,899,385   

AltaGas Ltd. (a)

      60,000         2,221,263   

Atlas Pipeline Partners LP (a)

      43,000         1,658,080   

Delek Logistics Partners LP

      38,300         1,178,491   

Enbridge, Inc.

      162,200         7,037,858   

Energy Transfer Partners LP (a)(b)

      29,496         1,562,403   

Enterprise Products Partners LP (a)

      118,577         7,503,553   

EQT Midstream Partners LP

      55,100         2,899,913   

Genesis Energy LP

      147,069         7,494,636   

Magellan Midstream Partners LP (a)

      77,300         4,641,092   

MarkWest Energy Partners LP (a)

      78,853         5,857,201   

MPLX LP (a)

      62,800         2,313,552   

ONEOK Partners LP

      79,245         4,261,004   

Pembina Pipeline Corp.

      87,700         2,877,492   

Phillips 66 Partners LP (b)

      44,600         1,498,560   

Plains All American Pipeline LP (a)

      111,070         5,689,005   

QEP Midstream Partners LP

      44,300         1,015,356   

Rose Rock Midstream LP

      18,300         639,402   

Sunoco Logistics Partners LP

      51,200         3,593,216   

Tesoro Logistics LP

      92,000         4,940,400   

TransCanada Corp. (a)

      75,700         3,411,637   

Western Gas Partners LP (a)

      24,314         1,461,515   

Williams Partners LP

      16,790         863,342   
     

 

 

  
                76,518,356   

Real Estate Investment Trusts (REITs) — 3.5%

      

American Tower Corp. (a)

      157,200         12,473,820   

Transportation Infrastructure — 13.2%

      

Abertis Infraestructuras SA

      390,900         8,375,072   

Aeroports de Paris

      29,300         3,130,860   

Atlantia SpA (a)

      312,670         6,852,852   

CCR SA

      223,900         1,862,002   

Flughafen Zuerich AG

      6,300         3,491,377   

Fraport AG Frankfurt Airport Services Worldwide

      70,400         5,446,389   

Gemina SpA (b)

      1,653,430         4,011,537   

Groupe Eurotunnel SA

      348,800         3,376,711   

Sydney Airport

      597,800         2,367,550   

Transurban Group

      1,099,800         7,377,886   
     

 

 

  
                46,292,236   

Water Utilities — 4.0%

      

American Water Works Co., Inc. (a)

      185,300         7,943,811   

Aqua America, Inc. (a)

      58,750         1,479,325   

Cia de Saneamento de Minas Gerais — COPASA

      238,600         3,853,472   

Severn Trent PLC

      26,400         788,039   
     

 

 

  
                14,064,647   

Wireless Telecommunication Services — 0.6%

      

SBA Communications Corp., Class A (a)(b)

      23,700         2,073,039   

Total Long-Term Investments

(Cost — $297,390,849) — 97.9%

               343,989,971   
 

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    93

Table of Contents
Schedule of Investments (continued)      BlackRock Utility and Infrastructure Trust (BUI)   
     (Percentages shown are based on Net Assets)   

 

 

Short-Term Securities    Shares      Value  

BlackRock Liquidity Funds, TempFund, Institutional Class, 0.03% (c)(d)

      15,720,002       $ 15,720,002   

Total Short-Term Securities

(Cost — $15,720,002) — 4.5%

  

  

      15,720,002   

Total Investments Before Options Written

(Cost — $313,110,851) — 102.4%

  

  

      359,709,973   
     
                  

 

Options Written          Value  

(Premiums Received — $2,144,575) — (1.1)%

    $ (3,992,438 ) 

Total Investments Net of Options Written — 101.3%

      355,717,535   

Liabilities in Excess of Other Assets — (1.3)%

      (4,392,247 ) 
     

 

 

  

Net Assets — 100.0%

       $ 351,325,288   
     

 

 

  
 
Notes to Schedule of Investments

 

(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, 2013, 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, 2012		      Net
Activity		      Shares Held at
October 31, 2013		      Income      Realized
Gain		  

BlackRock Liquidity Funds, TempFund, Institutional Class

      7,229,592         8,490,410         15,720,002       $ 8,916       $ 214   

 

Ÿ  

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 the investment advisor. These definitions may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease.

 

Ÿ  

Exchange-traded options written as of October 31, 2013 were as follows:

 

Description    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

American Tower Corp.

      Call         USD         76.00         11/04/13         275       $ (93,500 ) 

Atlantia SpA

      Call         EUR         16.00         11/15/13         117         (25,534 ) 

Enel Green Power SpA

      Call         EUR         1.70         11/15/13         165         (22,100 ) 

Snam SpA

      Call         EUR         3.90         11/15/13         120         (1,232 ) 

Terna Rete Elettrica Nazionale SpA

      Call         EUR         3.60         11/15/13         9         (3,666 ) 

AltaGas Ltd.

      Call         CAD         37.00         11/18/13         25         (4,256 ) 

American Tower Corp.

      Call         USD         77.50         11/18/13         275         (66,688 ) 

Aqua America, Inc.

      Call         USD         25.00         11/18/13         20         (1,050 ) 

Atlas Pipeline Partners LP

      Call         USD         38.00         11/18/13         150         (11,250 ) 

Comcast Corp., Special Class A

      Call         USD         44.00         11/18/13         150         (36,375 ) 

Comcast Corp., Special Class A

      Call         USD         47.00         11/18/13         82         (3,280 ) 

Dominion Resources, Inc.

      Call         USD         65.00         11/18/13         491         (22,095 ) 

Enterprise Products Partners LP

      Call         USD         62.50         11/18/13         48         (6,000 ) 

ITC Holdings Corp.

      Call         USD         95.00         11/18/13         170         (102,000 ) 

MarkWest Energy Partners LP

      Call         USD         70.00         11/18/13         108         (46,980 ) 

NextEra Energy, Inc.

      Call         USD         82.50         11/18/13         84         (23,310 ) 

NextEra Energy, Inc.

      Call         USD         85.00         11/18/13         183         (20,588 ) 

Plains All American Pipeline LP

      Call         USD         55.00         11/18/13         50         (250 ) 

SBA Communications Corp., Class A

      Call         USD         80.00         11/18/13         40         (30,000 ) 

TransCanada Corp.

      Call         CAD         46.00         11/18/13         264         (32,030 ) 

Verizon Communications, Inc.

      Call         USD         47.00         11/18/13         142         (50,410 ) 

Verizon Communications, Inc.

      Call         USD         49.00         11/18/13         282         (47,799 ) 

Western Gas Partners LP

      Call         USD         60.00         11/18/13         100         (12,500 ) 

Verizon Communications, Inc.

      Call         USD         50.00         11/22/13         206         (22,042 ) 

 

See Notes to Financial Statements.

 

94    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (continued)      BlackRock Utility and Infrastructure Trust (BUI)   

 

 

Ÿ  

Exchange-traded options written as of October 31, 2013 were as follows: (concluded)

 

Description    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Atlantia SpA

      Call         EUR         16.50         12/20/13         46       $ (16,030 ) 

Atlantia SpA

      Call         EUR         17.00         12/20/13         47         (3,857 ) 

Duke Energy Corp.

      Call         USD         72.50         12/23/13         389         (30,148 ) 

Edison International

      Call         USD         50.00         12/23/13         446         (28,990 ) 

Energy Transfer Partners LP

      Call         USD         52.50         12/23/13         53         (9,275 ) 

Magellan Midstream Partners LP

      Call         USD         60.00         12/23/13         200         (31,500 ) 

MPLX LP

      Call         USD         40.00         12/23/13         200         (9,500 ) 

NextEra Energy, Inc.

      Call         USD         87.50         12/23/13         183         (14,640 ) 

NiSource, Inc.

      Call         USD         32.00         12/23/13         305         (16,012 ) 

PPL Corp.

      Call         USD         31.00         12/23/13         290         (10,150 ) 

SBA Communications Corp., Class A

      Call         USD         90.00         12/23/13         42         (5,250 ) 

Time Warner Cable, Inc.

      Call         USD         125.00         12/23/13         100         (31,000 ) 

Verizon Communications, Inc.

      Call         USD         52.50         12/23/13         70         (3,185 ) 

Energy Transfer Partners LP

      Call         USD         55.00         1/20/14         50         (5,000 ) 

Total

                   $ (899,472 ) 
                 

 

 

  

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows:

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Genesis Energy LP

   

Goldman Sachs International

      Call         USD         50.74         11/04/13         51,000       $ (28,940 ) 

MDU Resources Group, Inc.

   

Citibank N.A.

      Call         USD         28.18         11/04/13         19,400         (31,126 ) 

MPLX LP

   

Deutsche Bank AG

      Call         USD         37.04         11/04/13         3,200         (701 ) 

NextEra Energy, Inc.

   

Morgan Stanley & Co. International PLC

      Call         USD         81.65         11/04/13         8,400         (26,099 ) 

Xcel Energy, Inc.

   

UBS AG

      Call         USD         28.71         11/04/13         20,900         (5,560 ) 

Xylem, Inc.

   

Deutsche Bank AG

      Call         USD         27.91         11/04/13         28,700         (189,047 ) 

E.ON SE

   

Goldman Sachs International

      Call         EUR         14.05         11/05/13         13,700         (191 ) 

Fraport AG Frankfurt Airport Services Worldwide

   

Deutsche Bank AG

      Call         EUR         52.06         11/05/13         5,000         (33,410 ) 

Fraport AG Frankfurt Airport Services Worldwide

   

Morgan Stanley & Co. International PLC

      Call         EUR         54.26         11/05/13         8,400         (31,317 ) 

National Grid PLC

   

UBS AG

      Call         GBP         7.55         11/05/13         85,500         (39,494 ) 

EQT Midstream Partners LP

   

Morgan Stanley & Co. International PLC

      Call         USD         50.28         11/07/13         19,200         (46,494 ) 

DTE Energy Co.

   

UBS AG

      Call         USD         67.16         11/10/13         8,800         (18,458 ) 

MDU Resources Group, Inc.

   

Morgan Stanley & Co. International PLC

      Call         USD         28.39         11/11/13         16,700         (24,468 ) 

NRG Energy, Inc.

   

Goldman Sachs International

      Call         USD         28.37         11/11/13         25,100         (16,888 ) 

NRG Yield, Inc., Class A

   

Goldman Sachs International

      Call         USD         32.31         11/11/13         17,000         (53,111 ) 

CMS Energy Corp.

   

Morgan Stanley & Co. International PLC

      Call         USD         26.29         11/12/13         50,000         (63,188 ) 

Sydney Airport

   

UBS AG

      Call         AUD         4.02         11/12/13         209,200         (35,457 ) 

Transurban Group

   

UBS AG

      Call         AUD         6.94         11/12/13         384,900         (67,463 ) 

BT Group PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         3.48         11/13/13         412,500         (201,900 ) 

Cleco Corp.

   

Citibank N.A.

      Call         USD         46.12         11/13/13         6,500         (3,175 ) 

Groupe Eurotunnel SA

   

UBS AG

      Call         EUR         6.96         11/13/13         32,700         (11,063 ) 

Severn Trent PLC

   

Deutsche Bank AG

      Call         GBP         17.33         11/13/13         4,600         (9,652 ) 

Sunoco Logistics Partners LP

   

Deutsche Bank AG

      Call         USD         67.00         11/15/13         20,000         (75,174 ) 

Wisconsin Energy Corp.

   

Morgan Stanley & Co. International PLC

      Call         USD         40.05         11/15/13         41,000         (84,460 ) 

Delek Logistics Partners LP

   

Deutsche Bank AG

      Call         USD         30.35         11/20/13         13,400         (16,554 ) 

Sempra Energy

   

Deutsche Bank AG

      Call         USD         91.50         11/20/13         6,500         (9,053 ) 

Abertis Infraestructuras SA

   

Citibank N.A.

      Call         EUR         14.74         11/21/13         117,100         (166,302 ) 

CCR SA

   

Deutsche Bank AG

      Call         BRL         18.12         11/21/13         78,000         (24,720 ) 

Centrica PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         3.79         11/21/13         53,000         (313 ) 

Cia de Saneamento de Minas Gerais — COPASA

   

Citibank N.A.

      Call         BRL         36.03         11/21/13         46,000         (22,448 ) 

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    95

Table of Contents
Schedule of Investments (continued)      BlackRock Utility and Infrastructure Trust (BUI)   

 

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows: (continued)

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Tractebel Energia SA

   

UBS AG

      Call         BRL         37.00         11/21/13         19,500       $ (11,213 ) 

Duke Energy Corp.

   

Morgan Stanley & Co. International PLC

      Call         USD         67.00         11/22/13         16,700         (78,991 ) 

Northeast Utilities

   

Morgan Stanley & Co. International PLC

      Call         USD         41.61         11/22/13         19,800         (29,337 ) 

American Water Works Co., Inc.

   

Deutsche Bank AG

      Call         USD         41.20         11/25/13         12,600         (21,067 ) 

CenterPoint Energy, Inc.

   

Morgan Stanley & Co. International PLC

      Call         USD         24.76         11/25/13         30,600         (13,910 ) 

NRG Energy, Inc.

   

Goldman Sachs International

      Call         USD         28.37         11/25/13         25,100         (24,305 ) 

Tesoro Logistics LP

   

Deutsche Bank AG

      Call         USD         57.32         11/25/13         10,500         (2,410 ) 

American Water Works Co., Inc.

   

Deutsche Bank AG

      Call         USD         41.26         12/02/13         20,000         (32,200 ) 

Comcast Corp., Special Class A

   

Credit Suisse International

      Call         USD         43.47         12/02/13         8,300         (29,614 ) 

Ferrovial SA

   

Deutsche Bank AG

      Call         EUR         13.97         12/02/13         29,000         (22,444 ) 

NorthWestern Corp.

   

Credit Suisse International

      Call         USD         45.68         12/02/13         2,100         (1,491 ) 

AltaGas Ltd.

   

Goldman Sachs International

      Call         CAD         36.83         12/03/13         7,000         (13,645 ) 

Enbridge, Inc.

   

Morgan Stanley & Co. International PLC

      Call         USD         41.29         12/03/13         56,700         (122,611 ) 

MarkWest Energy Partners LP

   

Morgan Stanley & Co. International PLC

      Call         USD         75.04         12/03/13         16,700         (22,003 ) 

Spark Infrastructure Group

   

Morgan Stanley & Co. International PLC

      Call         AUD         1.69         12/03/13         238,200         (10,945 ) 

Aeroports de Paris

   

UBS AG

      Call         EUR         78.91         12/04/13         5,100         (13,306 ) 

EDP Renovaveis SA

   

Morgan Stanley & Co. International PLC

      Call         EUR         3.93         12/04/13         57,600         (12,227 ) 

Groupe Eurotunnel SA

   

UBS AG

      Call         EUR         6.96         12/04/13         32,700         (16,373 ) 

Groupe Eurotunnel SA

   

UBS AG

      Call         EUR         7.20         12/04/13         56,000         (16,725 ) 

National Grid PLC

   

Citibank N.A.

      Call         GBP         7.45         12/04/13         193,000         (120,441 ) 

Swisscom AG

   

Goldman Sachs International

      Call         CHF         437.58         12/04/13         760         (22,627 ) 

Vinci SA

   

UBS AG

      Call         EUR         48.23         12/04/13         3,700         (2,344 ) 

Dominion Resources, Inc.

   

Deutsche Bank AG

      Call         USD         64.03         12/05/13         5,000         (4,478 ) 

Access Midstream Partners LP

   

Citibank N.A.

      Call         USD         47.86         12/06/13         12,400         (70,382 ) 

American Electric Power Co., Inc.

   

Citibank N.A.

      Call         USD         44.05         12/06/13         13,100         (36,536 ) 

Plains All American Pipeline LP

   

UBS AG

      Call         USD         51.89         12/06/13         26,500         (25,164 ) 

Public Service Enterprise Group, Inc.

   

Deutsche Bank AG

      Call         USD         34.22         12/06/13         6,700         (1,503 ) 

Public Service Enterprise Group, Inc.

   

Morgan Stanley & Co. International PLC

      Call         USD         33.51         12/06/13         3,400         (1,541 ) 

American Water Works Co., Inc.

   

Citibank N.A.

      Call         USD         43.69         12/09/13         16,000         (6,278 ) 

Cia de Saneamento de Minas Gerais — COPASA

   

UBS AG

      Call         BRL         35.88         12/09/13         35,700         (24,539 ) 

Tesoro Logistics LP

   

Citibank N.A.

      Call         USD         57.43         12/09/13         10,600         (4,277 ) 

Tractebel Energia SA

   

UBS AG

      Call         BRL         37.00         12/09/13         19,500         (12,696 ) 

Aeroports de Paris

   

Morgan Stanley & Co. International PLC

      Call         EUR         77.26         12/10/13         5,100         (20,692 ) 

Fraport AG Frankfurt Airport Services Worldwide

   

Deutsche Bank AG

      Call         EUR         57.39         12/10/13         5,700         (9,443 ) 

Telenor ASA

   

Deutsche Bank AG

      Call         NOK         140.69         12/10/13         86,900         (72,582 ) 

AltaGas Ltd.

   

Deutsche Bank AG

      Call         CAD         35.75         12/11/13         11,500         (35,378 ) 

Centrica PLC

   

Goldman Sachs International

      Call         GBP         3.64         12/11/13         55,000         (3,288 ) 

Magellan Midstream Partners LP

   

Deutsche Bank AG

      Call         USD         58.78         12/11/13         14,300         (26,759 ) 

MDU Resources Group, Inc.

   

Morgan Stanley & Co. International PLC

      Call         USD         28.48         12/11/13         14,700         (23,891 ) 

OGE Energy Corp.

   

Goldman Sachs International

      Call         USD         36.07         12/11/13         18,600         (34,049 ) 

ONEOK Partners LP

   

Morgan Stanley & Co. International PLC

      Call         USD         53.37         12/11/13         8,100         (12,244 ) 

ONEOK Partners LP

   

Morgan Stanley & Co. International PLC

      Call         USD         55.77         12/11/13         19,600         (10,602 ) 

Sempra Energy

   

Morgan Stanley & Co. International PLC

      Call         USD         88.06         12/11/13         20,000         (94,795 ) 

Westar Energy, Inc.

   

JPMorgan Chase Bank N.A.

      Call         USD         30.68         12/11/13         32,000         (36,678 ) 

Aqua America, Inc.

   

Deutsche Bank AG

      Call         USD         24.70         12/12/13         20,500         (17,889 ) 

Enterprise Products Partners LP

   

Morgan Stanley & Co. International PLC

      Call         USD         61.88         12/12/13         36,600         (78,329 ) 

Northeast Utilities

   

Citibank N.A.

      Call         USD         41.73         12/12/13         6,400         (7,771 ) 

NRG Yield, Inc., Class A

   

Morgan Stanley & Co. International PLC

      Call         USD         36.02         12/12/13         39,100         (39,663 ) 

 

See Notes to Financial Statements.

 

96    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Schedule of Investments (continued)      BlackRock Utility and Infrastructure Trust (BUI)   

 

 

Ÿ  

Over-the-counter options written as of October 31, 2013 were as follows: (concluded)

 

Description    Counterparty    Put/
Call		     

Strike

Price

      Expiration
Date		      Contracts      Market
Value		  

Vinci SA

   

Deutsche Bank AG

      Call         EUR         47.97         12/12/13         34,800       $ (30,266 ) 

CenterPoint Energy, Inc.

   

Goldman Sachs International

      Call         USD         25.45         12/13/13         23,900         (9,240 ) 

CMS Energy Corp.

   

UBS AG

      Call         USD         28.29         12/13/13         45,400         (15,181 ) 

Severn Trent PLC

   

Deutsche Bank AG

      Call         GBP         18.94         12/13/13         4,600         (2,373 ) 

American Water Works Co., Inc.

   

Morgan Stanley & Co. International PLC

      Call         USD         41.15         12/16/13         16,200         (28,939 ) 

Pembina Pipeline Corp.

   

Deutsche Bank AG

      Call         CAD         34.52         12/16/13         30,600         (13,243 ) 

EDP Renovaveis SA

   

Morgan Stanley & Co. International PLC

      Call         EUR         3.93         12/17/13         57,600         (13,107 ) 

National Grid PLC

   

Morgan Stanley & Co. International PLC

      Call         GBP         7.38         12/17/13         78,700         (57,416 ) 

Tesoro Logistics LP

   

Deutsche Bank AG

      Call         USD         58.25         12/17/13         11,100         (4,125 ) 

Public Service Enterprise Group, Inc.

   

Morgan Stanley & Co. International PLC

      Call         USD         34.05         12/18/13         47,400         (16,900 ) 

Ferrovial SA

   

Deutsche Bank AG

      Call         EUR         13.97         12/19/13         29,000         (18,938 ) 

Ferrovial SA

   

Morgan Stanley & Co. International PLC

      Call         EUR         14.13         12/19/13         48,000         (28,361 ) 

Cia de Saneamento de Minas Gerais — COPASA

   

UBS AG

      Call         BRL         38.66         1/06/14         19,000         (7,586 ) 

NorthWestern Corp.

   

Goldman Sachs International

      Call         USD         47.79         1/06/14         21,300         (78,790 ) 

Tractebel Energia SA

   

Morgan Stanley & Co. International PLC

      Call         BRL         37.76         1/06/14         43,500         (23,701 ) 

Cleco Corp.

   

Citibank N.A.

      Call         USD         47.92         1/08/14         6,500         (25,683 ) 

CMS Energy Corp.

   

UBS AG

      Call         USD         28.29         1/10/14         45,400         (22,712 ) 

Cia de Saneamento de Minas Gerais — COPASA

    UBS AG      Call         BRL         38.66         1/15/14         19,000         (8,503 ) 

Total

                      $ (3,092,966 ) 
                    

 

 

  

 

Ÿ  

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:

 

  Ÿ  

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

 

  Ÿ  

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)

 

  Ÿ  

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 fair value hierarchy classification 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 instrument, please refer to Note 2 of the Notes to Financial Statements.

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    97

Table of Contents
Schedule of Investments (concluded)    BlackRock Utility and Infrastructure Trust (BUI)

 

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy as of October 31, 2013:

 

 

  
     Level 1     Level 2     Level 3      Total  

 

  

Assets:

          

Investments:

          

Long-Term Investments:

          

Common Stocks:

          

Construction & Engineering

      —      $ 12,836,577        —       $ 12,836,577   

Diversified Telecommunication Services

    $ 9,778,736        14,205,419        —         23,984,155   

Electric Utilities

      56,998,458        2,333,150        —         59,331,608   

Gas Utilities

      3,568,140        —        —         3,568,140   

Independent Power Producers & Energy Traders

      9,021,307        3,886,025        —         12,907,332   

Machinery

      2,918,700        —        —         2,918,700   

Media

      7,692,025        —        —         7,692,025   

Multi-Utilities

      55,788,478        13,540,858        —         69,329,336   

Oil, Gas & Consumable Fuels

      76,518,356        —        —         76,518,356   

Real Estate Investment Trusts (REITs)

      12,473,820        —        —         12,473,820   

Transportation Infrastructure

      4,992,862        41,299,374        —         46,292,236   

Water Utilities

      13,276,608        788,039        —         14,064,647   

Wireless Telecommunication Services

      2,073,039        —        —         2,073,039   

Short-Term Securities

      15,720,002        —        —         15,720,002   

 

  

Total

    $ 270,820,531      $ 88,889,442        —       $ 359,709,973   
  

 

 

  
         

 

  
     Level 1     Level 2     Level 3      Total  

 

  

Derivative Financial Instruments1

          

Liabilities:

          

Equity contracts

    $ (827,052 )    $ (3,165,386 )      —       $ (3,992,438 ) 

 

  

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

      

Certain of the Trust’s assets and/or liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2013, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
         

 

  
     Level 1     Level 2     Level 3      Total  

 

  

Assets:

          

Cash

    $ 1,495,501        —        —       $ 1,495,501   

Liabilities:

          

Bank overdraft on foreign currency at value

      —      $ (990,610 )      —         (990,610 ) 

 

  

Total

    $ 1,495,501      $ (990,610 )      —       $ 504,891   
  

 

 

  

There were no transfers between Levels during the year ended October 31, 2013.

 

See Notes to Financial Statements.

 

98    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Statements of Assets and Liabilities     

 

October 31, 2013   

BlackRock
Dividend
Income

Trust (BQY)

     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)

  
            
Assets                                                 

Investments at value — unaffiliated1

    $ 83,086,762      $ 108,120,626      $ 843,341,931      $ 665,780,729      $ 1,597,602,814      $ 1,157,094,384   

Investments at value — affiliated2

      3,708,345        7,688,865        60,810,523        20,482,532        48,920,346        36,387,584   

Cash

      —        —        2,930        —        7,623        —   

Cash pledged as collateral for options written

      —        100,000        —        700,000        100,000        —   

Foreign currency at value3

      21,069        —        108,032        2,068,537        1,487        4,043,358   

Investments sold receivable

      1,301,416        2,172,867        44,196,487        10,323,458        6,949,990        26,540,407   

Dividends receivable — affiliated

      78        252        1,744        474        1,120        344   

Unrealized appreciation on foreign currency exchange contracts

      —        —        —        15,057        —        17,814   

Dividends receivable

      153,599        108,494        538,175        154,135        1,601,275        2,274,725   

Other assets

      2,469        6,038        18,193        5,777        30,863        398,326   
  

 

 

  

Total assets

      88,273,738        118,197,142        949,018,015        699,530,699        1,655,215,518        1,226,756,942   
  

 

 

  
            
Liabilities                                                 

Bank overdraft

      —        7        —        119,260        —        295   

Bank overdraft on foreign currency at value3

     —        618,881        —        —        —        —   

Investments purchased payable

      181,173        847,381        44,934,368        12,726,441        38,689,050        46,021,904   

Options written at value4

      928,492        1,360,268        6,017,213        10,388,428        20,305,989        19,864,084   

Investment advisory fees payable

      54,193        112,148        907,321        477,426        1,075,427        972,661   

Officer’s and Trustees’ fees payable

      14,169        596        330,629        63,576        603,508        477,974   

Unrealized depreciation on foreign currency exchange contracts

      19        —        —        12,054        —        11,552   

Other accrued expenses payable

      112,343        120,221        193,614        271,495        318,168        336,205   
  

 

 

  

Total liabilities

      1,290,389        3,059,502        52,383,145        24,058,680        60,992,142        67,684,675   
  

 

 

  

Net Assets

    $ 86,983,349      $ 115,137,640      $ 896,634,870      $ 675,472,019      $ 1,594,223,376      $ 1,159,072,267   
  

 

 

  
            
Net Assets Consist of                                                 

Paid-in capital

    $ 82,951,843      $ 172,464,776      $ 671,744,850      $ 722,434,062      $ 1,597,828,802      $ 1,154,307,475   

Undistributed (distributions in excess of) net investment income

      183,768        —        (2,782,487 )      (37,256 )      (600,773 )      (2,479,284 ) 

Accumulated net realized gain (loss)

      (3,797,499 )      (61,924,065 )      72,409,388        (121,133,746 )      (187,849,755 )      (127,775,094 ) 

Net unrealized appreciation/depreciation

      7,645,237        4,596,929        155,263,119        74,208,959        184,845,102        135,019,170   
  

 

 

  

Net Assets

    $ 86,983,349      $ 115,137,640      $ 896,634,870      $ 675,472,019      $ 1,594,223,376      $ 1,159,072,267   
  

 

 

  

Net asset value5,6

    $ 14.42      $ 9.16      $ 30.12      $ 15.31      $ 8.88      $ 16.68   
  

 

 

  

1 Investments at cost — unaffiliated

    $ 75,056,706      $ 103,360,445      $ 690,535,649      $ 587,300,794      $ 1,404,900,335      $ 1,017,990,297   

2 Investments at cost — affiliated

    $ 3,708,345      $ 7,688,865      $ 60,810,523      $ 20,482,532      $ 48,920,346      $ 36,387,584   

3 Foreign currency at cost

    $ 21,053      $ (625,526 )    $ 108,033      $ 2,071,961      $ 1,439      $ 3,876,556   

4 Premiums received

    $ 543,360      $ 1,199,341      $ 8,474,085      $ 6,091,953      $ 12,448,564      $ 15,614,350   

5 Shares outstanding, unlimited number of shares authorized, $0.001 par value

      6,033,028        12,564,457        29,766,217        —        179,482,756        69,483,161   

6 Shares outstanding, 200 million shares authorized, $0.10 par value

      —        —        —        44,121,400        —        —   

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    99

Table of Contents
Statements of Assets and Liabilities (concluded)     

 

 

October 31, 2013   

BlackRock
Health

Sciences

Trust (BME)

     

BlackRock
International
Growth and
Income

Trust (BGY)

    

BlackRock

Real Asset
Equity

Trust (BCF)

    

BlackRock
Resources &
Commodities
Strategy

Trust (BCX)1

     BlackRock
Utility and
Infrastructure
Trust (BUI)		  
           
Assets                                          

Investments at value — unaffiliated2

    $ 270,567,594       $ 985,626,897      $ 565,753,233      $ 615,916,389      $ 343,989,971   

Investments at value — affiliated3

      1,144,662         22,346,730        21,163,179        29,416,955        15,720,002   

Cash

      —         —        62,898        184,759        1,495,501   

Cash pledged as collateral for options written

      —         5,724,000        —        —        —   

Foreign currency at value4

      2,498         3,042,040        98,922        61,422        —   

Investments sold receivable

      1,915,222         21,723,160        7,585,035        6,406,207        2,811,070   

Dividends receivable — affiliated

      93         381        717        636        508   

Unrealized appreciation on foreign currency exchange contracts

      —         41,414        —        2        —   

Dividends receivable

      337,823         2,430,240        894,698        990,050        1,164,488   

Other assets

      6,198         42,240        19,495        3,957        2,283   
  

 

 

  

Total assets

      273,974,090         1,040,977,102        595,578,177        652,980,377        365,183,823   
  

 

 

  
           
Liabilities                                          

Bank overdraft

      —         1,358        —        —        —   

Bank overdraft on foreign currency at value4

      —         —        —        —        990,610   

Investments purchased payable

      843,487         25,910,897        4,074,852        17,067,103        8,398,246   

Options written at value5

      2,608,688         17,727,514        4,828,567        4,497,214        3,992,438   

Investment advisory fees payable

      227,433         792,798        566,271        529,706        292,050   

Officer’s and Trustees’ fees payable

      17,225         421,944        267,904        3,138        1,787   

Unrealized depreciation on foreign currency exchange contracts

      —         51,727        142        211        —   

Other accrued expenses payable

      115,758         335,300        206,963        265,512        183,404   
  

 

 

  

Total liabilities

      3,812,591         45,241,538        9,944,699        22,362,884        13,858,535   
  

 

 

  

Net Assets

    $ 270,161,499       $ 995,735,564      $ 585,633,478      $ 630,617,493      $ 351,325,288   
  

 

 

  
           
Net Assets Consist of                                          

Paid-in capital

    $ 180,799,761       $ 1,421,001,423      $ 621,054,142      $ 765,766,937      $ 310,378,484   

Undistributed (distributions in excess of) net investment income

      466,794         (2,109,861 )      (3,635,115 )      (4,416,905 )      1,564,553   

Accumulated net realized gain (loss)

      13,211,520         (561,302,152 )      (106,792,082 )      (132,348,002 )      (5,351,025 ) 

Net unrealized appreciation/depreciation

      75,683,424         138,146,154        75,006,533        1,615,463        44,733,276   
  

 

 

  

Net Assets

    $ 270,161,499       $ 995,735,564      $ 585,633,478      $ 630,617,493      $ 351,325,288   
  

 

 

  

Net asset value6

    $ 34.92       $ 9.05      $ 10.24      $ 13.54      $ 20.78   
  

 

 

  

1 Consolidated Statement of Assets and Liabilities.

            

2 Investments at cost — unaffiliated

    $ 195,532,251       $ 843,417,766      $ 490,777,341      $ 614,055,201      $ 297,390,849   

3 Investments at cost — affiliated

    $ 1,144,662       $ 22,346,730      $ 21,163,179      $ 29,416,955      $ 15,720,002   

4 Foreign currency at cost

    $ 2,488       $ 3,050,739      $ 98,920      $ 61,422      $ (985,067 ) 

5 Premiums received

    $ 3,252,861       $ 13,626,299      $ 4,859,346      $ 4,250,223      $ 2,144,575   

6 Shares outstanding, unlimited number of shares authorized, $0.001 par value

      7,737,048         109,989,277        57,173,280        46,575,310        16,906,964   

 

See Notes to Financial Statements.

 

100    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Statements of Operations     

 

Year Ended October 31, 2013    BlackRock
Dividend Income
Trust (BQY)		     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)

  
Investment Income                                                 

Dividends — unaffiliated

    $ 2,946,763      $ 3,007,022      $ 14,325,859      $ 19,804,159      $ 46,813,221      $ 21,003,953   

Foreign taxes withheld

      (78,882 )      (222,119 )      (456,322 )      (264,034 )      (658,205 )      (1,020,188 ) 

Dividends — affiliated

      2,852        6,505        22,416        20,172        58,501        31,928   

Securities lending — affiliated

      —        878        1,338        —        202        —   

Other income — affiliated

      28,489        —        —        13,547        —        73,658   
  

 

 

  

Total income

      2,899,222        2,792,286        13,893,291        19,573,844        46,213,719        20,089,351   
  

 

 

  
            
Expenses                                                 

Investment advisory

      625,090        1,398,810        9,982,089        5,412,797        12,471,024        10,841,283   

Custodian

      102,211        120,907        124,033        82,675        213,335        305,699   

Professional

      49,704        58,640        84,789        182,281        155,124        114,083   

Transfer agent

      26,814        31,922        113,365        111,073        222,072        156,994   

Officer and Trustees

      8,135        10,390        87,567        63,259        163,917        120,634   

Printing

      5,520        7,424        41,834        33,885        82,470        47,814   

Registration

      4,823        301        104        11,239        47,291        44,189   

Insurance

      3,878        6,282        35,755        18,794        53,269        33,254   

Licensing

      125,018        —        —        —        —        —   

Miscellaneous

      38,891        39,323        19,810        11,691        31,312        65,446   
  

 

 

  

Total expenses

      990,084        1,673,999        10,489,346        5,927,694        13,439,814        11,729,396   

Less fees waived by Manager

      (2,541 )      (29,088 )      (83,849 )      (15,883 )      (42,175 )      (23,023 ) 
  

 

 

  

Total expenses after fees waived

      987,543        1,644,911        10,405,497        5,911,811        13,397,639        11,706,373   
  

 

 

  

Net investment income

      1,911,679        1,147,375        3,487,794        13,662,033        32,816,080        8,382,978   
  

 

 

  
            
Realized and Unrealized Gain (Loss)                                                 

Net realized gain (loss) from:

             

Investments — unaffiliated

      3,169,309        (577,211 )      137,626,191        18,382,711        72,038,592        82,297,459   

Investments — affiliated

      —        —        (6,700,693 )      —        —        —   

Capital gain distributions received from affiliated investment companies

      19        77        108        347        660        395   

Options written

      1,415,858        2,068,698        6,646,382        22,994,600        45,600,260        28,294,879   

Foreign currency transactions

      30,202        24,424        (85,498 )      209,076        (15,873 )      (640,843 ) 
  

 

 

  
     4,615,388        1,515,988        137,486,490        41,586,734        117,623,639        109,951,890   
  

 

 

  

Net change in unrealized appreciation/depreciation on:

             

Investments — unaffiliated

      5,557,844        7,074,952        33,868,726        57,021,683        65,870,893        93,108,923   

Investments — affiliated

      —        —        (447,115 )      —        —        —   

Options written

      (619,809 )      (455,665 )      (1,998,026 )      (6,538,597 )      (11,675,521 )      (6,932,167 ) 

Foreign currency translations

      3,124        (2,224 )      1,515        28,701        2,589        (31,656 ) 
  

 

 

  
     4,941,159        6,617,063        31,425,100        50,511,787        54,197,961        86,145,100   
  

 

 

  

Total realized and unrealized gain

      9,556,547        8,133,051        168,911,590        92,098,521        171,821,600        196,096,990   
  

 

 

  

Net Increase in Net Assets Resulting from Operations

    $ 11,468,226      $ 9,280,426      $ 172,399,384      $ 105,760,554      $ 204,637,680      $ 204,479,968   
  

 

 

  

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    101

Table of Contents
Statements of Operations (concluded)     

 

Year Ended October 31, 2013    BlackRock
Health
Sciences
Trust (BME)		    

BlackRock
International
Growth and
Income

Trust (BGY)

    

BlackRock
Real Asset
Equity

Trust (BCF)

    

BlackRock
Resources &
Commodities
Strategy

Trust (BCX)1

     BlackRock
Utility and
Infrastructure
Trust (BUI)		  
Investment Income                                         

Dividends — unaffiliated

    $ 3,790,560      $ 25,816,433      $ 13,635,357      $ 19,274,345      $ 13,740,279   

Foreign taxes withheld

      (161,345 )      (1,766,831 )      (372,805 )      (1,197,551 )      (395,258 ) 

Dividends — affiliated

      5,948        10,356        26,417        15,215        8,916   

Securities lending — affiliated

      538        —        3,962        —        —   

Other income — affiliated

      —        108,135        —        346,955        49,018   
  

 

 

  

Total income

      3,635,701        24,168,093        13,292,931        18,438,964        13,402,955   
  

 

 

  
          
Expenses                                         

Investment advisory

      2,429,887        9,428,707        7,149,604        7,816,070        3,405,245   

Custodian

      115,089        334,775        174,603        148,889        146,721   

Professional

      59,831        104,408        85,328        127,009        84,462   

Transfer agent

      38,415        138,854        102,960        88,414        47,757   

Officer and Trustees

      22,358        101,599        67,786        58,637        30,501   

Printing

      13,624        41,922        31,433        2,641        17,884   

Registration

      9,814        29,372        44        8,439        4,891   

Insurance

      8,949        53,078        36,555        19,350        9,211   

Miscellaneous

      18,305        82,004        38,654        33,375        24,048   
  

 

 

  

Total expenses

      2,716,272        10,314,719        7,686,967        8,302,824        3,770,720   

Less fees waived by Manager

      (4,304 )      (202,533 )      (593,602 )      (1,318,820 )      (8,189 ) 
  

 

 

  

Total expenses after fees waived

      2,711,968        10,112,186        7,093,365        6,984,004        3,762,531   
  

 

 

  

Net investment income

      923,733        14,055,907        6,199,566        11,454,960        9,640,424   
  

 

 

  
          
Realized and Unrealized Gain (Loss)                                         

Net realized gain (loss) from:

           

Investments — unaffiliated

      29,058,928        63,894,705        (29,998,837 )      (81,838,376 )      1,826,908   

Investments — affiliated

      —        —        —        (6,700,693 )      —   

Capital gain distributions received from affiliated investment companies

      44        108        306        142        214   

Options written

      (4,326,782 )      8,961,480        19,627,016        23,314,058        4,542,564   

Foreign currency transactions

      (15,182 )      (226,996 )      49,013        (146,921 )      48,358   
  

 

 

  
     24,717,008        72,629,297        (10,322,502 )      (65,371,790 )      6,418,044   
  

 

 

  

Net change in unrealized appreciation/depreciation on:

           

Investments — unaffiliated

      43,091,046        74,302,158        11,410,942        21,708,821        19,485,288   

Investments — affiliated

      —        —        —        (447,115 )      —   

Options written

      610,861        (1,997,538 )      (1,790,015 )      (722,057 )      (1,625,124 ) 

Foreign currency translations

      8,166        111,858        (10,405 )      6,088        (17,465 ) 
  

 

 

  
     43,710,073        72,416,478        9,610,522        20,545,737        17,842,699   
  

 

 

  

Total realized and unrealized gain (loss)

      68,427,081        145,045,775        (711,980 )      (44,826,053 )      24,260,743   
  

 

 

  

Net Increase (Decrease) in Net Assets Resulting from Operations

    $ 69,350,814      $ 159,101,682      $ 5,487,586      $ (33,371,093 )    $ 33,901,167   
  

 

 

  

 

  1

Consolidated Statement of Operations.

 

See Notes to Financial Statements.

 

102    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Statements of Changes in Net Assets     

 

 

     BlackRock
Dividend Income
Trust (BQY)		     BlackRock
EcoSolutions  Investment
Trust (BQR)		  
     Year Ended October 31,     Year Ended October 31,  
Increase (Decrease) in Net Assets:    2013     2012     2013     2012  
        
Operations                                 

Net investment income

    $ 1,911,679      $ 2,016,089      $ 1,147,375      $ 1,050,708   

Net realized gain (loss)

      4,615,388        1,328,916        1,515,988        (10,096,552 ) 

Net change in unrealized appreciation/depreciation

      4,941,159        3,407,312        6,617,063        17,094,270   
  

 

 

    

 

 

  

Net increase in net assets resulting from operations

      11,468,226        6,752,317        9,280,426        8,048,426   
  

 

 

    

 

 

  
        
Dividends and Distributions to Shareholders1                                 

Net investment income

      (1,708,290 )      (4,064,398 )      (1,031,216 )      (875,247 ) 

Net realized gains

      (3,962,756 )      (3,597,548 )      —        —   

Return of capital

      —        —        (7,977,500 )      (10,214,472 ) 
  

 

 

    

 

 

  

Decrease in net assets resulting from dividends and distributions to shareholders

      (5,671,046 )      (7,661,946 )      (9,008,716 )      (11,089,719 ) 
  

 

 

    

 

 

  
        
Capital Share Transactions                                 

Reinvestment of dividends

      —        —        —        410,321   
  

 

 

    

 

 

  
        
Net Assets                                 

Total increase (decrease) in net assets

      5,797,180        (909,629 )      271,710        (2,630,972 ) 

Beginning of year

      81,186,169        82,095,798        114,865,930        117,496,902   
  

 

 

    

 

 

  

End of year

    $ 86,983,349      $ 81,186,169      $ 115,137,640      $ 114,865,930   
  

 

 

    

 

 

  

Undistributed (distributions in excess of) net investment income

    $ 183,768      $ (9,490 )      —        —   
  

 

 

    

 

 

  

 

  1

Determined in accordance with federal income tax regulations.

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    103

Table of Contents
Statements of Changes in Net Assets (continued)     

 

     BlackRock
Energy and
Resources Trust (BGR)		     BlackRock
Enhanced Capital and
Income Fund, Inc. (CII)		  
     Year Ended October 31,     Year Ended October 31,  
Increase (Decrease) in Net Assets:    2013     2012     2013     2012  
        
Operations                                 

Net investment income

    $ 3,487,794      $ 3,949,494      $ 13,662,033      $ 14,639,943   

Net realized gain (loss)

      137,486,490        17,530,915        41,586,734        (26,063,030 ) 

Net change in unrealized appreciation/depreciation

      31,425,100        (39,725,443 )      50,511,787        82,820,459   
  

 

 

    

 

 

  

Net increase (decrease) in net assets resulting from operations

      172,399,384        (18,245,034 )      105,760,554        71,397,372   
  

 

 

    

 

 

  
        
Dividends and Distributions to Shareholders1                                 

Net investment income

      —        (854,435 )      (13,908,365 )      (14,639,943 )2 

Distributions in excess of net investment income3

      —        —        —        (8,839,071 )2 

Net realized gains

      (48,221,272 )      (42,914,124 )      —        (5,739,106 ) 

Return of capital

      —        (8,858,114 )      (39,037,315 )      (31,669,412 ) 
  

 

 

    

 

 

  

Decrease in net assets resulting from dividends and distributions to shareholders

      (48,221,272 )      (52,626,673 )      (52,945,680 )      (60,887,532 ) 
  

 

 

    

 

 

  
        
Capital Share Transactions                                 

Refund of offering costs previously charged to paid-in capital

      —        —        —        2,075   
  

 

 

    

 

 

  
        
Net Assets                                 

Total increase (decrease) in net assets

      124,178,112        (70,871,707 )      52,814,874        10,511,915   

Beginning of year

      772,456,758        843,328,465        622,657,145        612,145,230   
  

 

 

    

 

 

  

End of year

    $ 896,634,870      $ 772,456,758      $ 675,472,019      $ 622,657,145   
  

 

 

    

 

 

  

Undistributed (distributions in excess of) net investment income

    $ (2,782,487 )    $ 5,415,467      $ (37,256 )      —   
  

 

 

    

 

 

  

 

  1 

Determined in accordance with federal income tax regulations.

  2 

The amount of dividends and distributions to shareholders from net investment income reported in the prior year has been reclassified to allocate the amount between distributions from net investment income and distributions in excess of net investment income; both of which were included in the prior year net investment income in the amount of $23,479,014.

  3 

Taxable distribution.

 

See Notes to Financial Statements.

 

104    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Statements of Changes in Net Assets (continued)     

 

     BlackRock
Enhanced Equity
Dividend Trust (BDJ)		     BlackRock
Global Opportunities
Equity Trust (BOE)		  
     Year Ended October 31,     Year Ended October 31,  
Increase (Decrease) in Net Assets:    2013     2012     2013     2012  
        
Operations                                 

Net investment income

    $ 32,816,080      $ 26,040,412      $ 8,382,978      $ 14,057,419   

Net realized gain (loss)

      117,623,639        9,034,889        109,951,890        (38,872,891 ) 

Net change in unrealized appreciation/depreciation

      54,197,961        71,225,395        86,145,100        88,118,894   
  

 

 

    

 

 

  

Net increase in net assets resulting from operations

      204,637,680        106,300,696        204,479,968        63,303,422   
  

 

 

    

 

 

  
        
Dividends and Distributions to Shareholders1                                 

Net investment income

      (32,582,758 )      (26,708,086 )2      (11,468,669 )      (14,977,529 ) 

Distributions in excess of net investment income3

      (35,787,362 )      (33,844,633 )2      (63,152,174 )      —   

Net realized gains

      (32,140,223 )      —        —        —   

Return of capital

      —        (43,164,839 )      (11,996,866 )      (121,035,759 ) 
  

 

 

    

 

 

  

Decrease in net assets resulting from dividends and distributions to shareholders

      (100,510,343 )      (103,717,558 )      (86,617,709 )      (136,013,288 ) 
  

 

 

    

 

 

  
        
Capital Share Transactions                                 

Net proceeds from the issuance of shares due to reorganization

      —        911,800,774        —        —   
  

 

 

    

 

 

  
        
Net Assets                                 

Total increase (decrease) in net assets

      104,127,337        914,383,912        117,862,259        (72,709,866 ) 

Beginning of year

      1,490,096,039        575,712,127        1,041,210,008        1,113,919,874   
  

 

 

    

 

 

  

End of year

    $ 1,594,223,376      $ 1,490,096,039      $ 1,159,072,267      $ 1,041,210,008   
  

 

 

    

 

 

  

Distributions in excess of net investment income

    $ (600,773 )    $ (407,316 )    $ (2,479,284 )    $ (771,647 ) 
  

 

 

    

 

 

  

 

  1 

Determined in accordance with federal income tax regulations.

  2 

The amount of dividends and distributions to shareholders from net investment income reported in the prior year has been reclassified to allocate the amount between distributions from net investment income and distributions in excess of net investment income; both of which were included in the prior year net investment income in the amount of $60,552,719.

  3 

Taxable distribution.

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    105

Table of Contents
Statements of Changes in Net Assets (continued)     

 

     BlackRock
Health Sciences
Trust (BME)		     BlackRock
International Growth
and Income Trust (BGY)		  
     Year Ended October 31,     Year Ended October 31,  
Increase (Decrease) in Net Assets:    2013     2012     2013     2012  
        
Operations                                 

Net investment income

    $ 923,733      $ 613,888      $ 14,055,907      $ 17,861,406   

Net realized gain (loss)

      24,717,008        17,445,175        72,629,297        (84,518,379 ) 

Net change in unrealized appreciation/depreciation

      43,710,073        14,085,220        72,416,478        122,238,455   
  

 

 

    

 

 

  

Net increase in net assets resulting from operations

      69,350,814        32,144,283        159,101,682        55,581,482   
  

 

 

    

 

 

  
        
Dividends and Distributions to Shareholders1                                 

Net investment income

      (446,759 )      (624,091 )      (18,226,947 )      (19,807,805 ) 

Net realized gains

      (17,987,036 )      (18,501,614 )      —        —   

Return of capital

      —        —        (55,619,854 )      (84,445,531 ) 
  

 

 

    

 

 

  

Decrease in net assets resulting from dividends and distributions to shareholders

      (18,433,795 )      (19,125,705 )      (73,846,801 )      (104,253,336 ) 
  

 

 

    

 

 

  
        
Capital Share Transactions                                 

Reinvestment of dividends

      867,486        2,683,786        —        —   
  

 

 

    

 

 

  
        
Net Assets                                 

Total increase (decrease) in net assets

      51,784,505        15,702,364        85,254,881        (48,671,854 ) 

Beginning of year

      218,376,994        202,674,630        910,480,683        959,152,537   
  

 

 

    

 

 

  

End of year

    $ 270,161,499      $ 218,376,994      $ 995,735,564      $ 910,480,683   
  

 

 

    

 

 

  

Undistributed (distributions in excess of) net investment income

    $ 466,794      $ (14,429 )    $ (2,109,861 )    $ (723,452 ) 
  

 

 

    

 

 

  

 

  1 

Determined in accordance with federal income tax regulations.

 

See Notes to Financial Statements.

 

106    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Statements of Changes in Net Assets (continued)     

 

      BlackRock
Real Asset
Equity Trust (BCF)		     BlackRock Resources
& Commodities
Strategy Trust (BCX)1		  
     Year Ended October 31,     Year Ended October 31,  
Increase (Decrease) in Net Assets:    2013     2012     2013     2012  
        
Operations                                 

Net investment income

    $ 6,199,566      $ 7,068,267      $ 11,454,960      $ 8,289,984   

Net realized loss

      (10,322,502 )      (5,184,927 )      (65,371,790 )      (68,386,990 ) 

Net change in unrealized appreciation/depreciation

      9,610,522        (23,716,362 )      20,545,737        59,526,289   
  

 

 

    

 

 

  

Net increase (decrease) in net assets resulting from operations

      5,487,586        (21,833,022 )      (33,371,093 )      (570,717 ) 
  

 

 

    

 

 

  
        
Dividends and Distributions to Shareholders2                                 

Net investment income

      (6,692,838 )      (7,129,605 )      (6,452,839 )      (11,939,675 ) 

Net realized gains

      —        (31,346,558 )      —        (365,560 ) 

Return of capital

      (43,962,688 )      (20,806,811 )      (47,574,521 )      (52,900,199 ) 
  

 

 

    

 

 

  

Decrease in net assets resulting from dividends and distributions to shareholders

      (50,655,526 )      (59,282,974 )      (54,027,360 )      (65,205,434 ) 
  

 

 

    

 

 

  
        
Net Assets                                 

Total decrease in net assets

      (45,167,940 )      (81,115,996 )      (87,398,453 )      (65,776,151 ) 

Beginning of year

      630,801,418        711,917,414        718,015,946        783,792,097   
  

 

 

    

 

 

  

End of year

    $ 585,633,478      $ 630,801,418      $ 630,617,493      $ 718,015,946   
  

 

 

    

 

 

  

Distributions in excess of net investment income

    $ (3,635,115 )    $ (3,194,320 )    $ (4,416,905 )    $ (1,895,278 ) 
  

 

 

    

 

 

  

 

  1 

Consolidated Statement of Changes in Net Assets.

  2 

Determined in accordance with federal income tax regulations.

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    107

Table of Contents
Statements of Changes in Net Assets (concluded)     

 

     BlackRock Utility and
Infrastructure
Trust (BUI)		  
Increase (Decrease) in Net Assets:    Year Ended
October 31, 2013		    

Period
November 25, 20111
to

October 31, 2012

  
    
Operations                 

Net investment income

    $ 9,640,424      $ 8,992,956   

Net realized gain

      6,418,044        2,161,997   

Net change in unrealized appreciation/depreciation

      17,842,699        26,890,577   
  

 

 

  

Net increase in net assets resulting from operations

      33,901,167        38,045,530   
  

 

 

  
    
Dividends and Distributions to Shareholders2                 

Net investment income

      (8,709,264 )      (8,210,424 ) 

Net realized gains

      (7,173,603 )      (6,968,606 ) 

Return of capital

      (8,632,231 )      (3,207,293 ) 
  

 

 

  

Decrease in net assets resulting from dividends and distributions to shareholders

      (24,515,098 )      (18,386,323 ) 
  

 

 

  
    
Capital Share Transactions                 

Net proceeds from the issuance of shares

      —        295,596,012   

Net proceeds from the underwriters’ over allotment option exercised

      —        26,684,000   
  

 

 

  

Net increase in net assets derived from shares transactions

      —        322,280,012   
  

 

 

  
    
Net Assets                 

Total increase in net assets

      9,386,069        341,939,219   

Beginning of period

      341,939,219        —   
  

 

 

  

End of period

    $ 351,325,288      $ 341,939,219   
  

 

 

  

Undistributed net investment income

    $ 1,564,553      $ 1,098,044   
  

 

 

  

 

  1 

Commencement of Operations.

  2 

Determined in accordance with federal income tax regulations.

 

See Notes to Financial Statements.

 

108    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Statements of Cash Flows     

 

Year Ended October 31, 2013    BlackRock
Dividend
Income
Trust (BQY)		     BlackRock
EcoSolutions
Investment
Trust (BQR)		     BlackRock
Energy and
Resources
Trust (BGR)		     BlackRock
Enhanced
Capital and
Income
Fund, Inc. (CII)		  
        
Cash Provided by Operating Activities                                 

Net increase in net assets resulting from operations

    $ 11,468,226      $ 9,280,426      $ 172,399,384      $ 105,760,554   

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:

         

Decrease (increase) in dividends receivable — affiliated

      286        689        (1,081 )      2,433   

Decrease in dividends receivable

      2,195        30,106        393,624        496,257   

Decrease in securities lending income receivable — affiliated

      —        2,078        1,299        —   

Decrease (increase) in other assets

      3,849        865        13,487        (461 ) 

Increase in cash pledged as collateral for options written

      —        —        —        (700,000 ) 

Increase (decrease) in investment advisory fees payable

      2,283        (4,216 )      145,801        23,001   

Decrease in collateral on securities loaned at value

      —        (1,554,150 )      (13,663,321 )      —   

Increase (decrease) in officer’s and trustees’ fees payable

      232        (613 )      43,373        29,564   

Decrease in cash received as collateral for options written

      —        —        —        (510,420 ) 

Increase (decrease) in other accrued expenses payable

      (107,548 )      (23,103 )      (33,820 )      116,097   

Net realized and unrealized gain (loss) on investments, options written and foreign currency translations

      (9,523,210 )      (8,106,285 )      (168,995,550 )      (91,863,969 ) 

Premiums received from options written

      4,120,326        7,995,417        56,877,913        55,016,660   

Premiums paid on closing options written

      (1,326,776 )      (3,627,187 )      (35,820,679 )      (10,330,498 ) 

Proceeds from sales of long-term investments

      84,849,834        103,016,508        1,101,231,682        1,344,256,566   

Purchases of long-term investments

      (82,751,059 )      (101,397,187 )      (1,021,687,860 )      (1,350,114,244 ) 

Net (purchases) sales of short-term securities

      (1,084,970 )      1,084,210        (42,574,395 )      2,707,255   
  

 

 

  

Cash provided by operating activities

      5,653,668        6,697,558        48,329,857        54,888,795   
  

 

 

  
        
Cash Used for Financing Activities                                 

Increase in bank overdraft/bank overdraft on foreign currency at value

      —        618,888        —        119,260   

Cash dividends paid to shareholders

      (5,671,046 )      (9,008,716 )      (48,221,272 )      (52,945,680 ) 
  

 

 

  

Cash used for financing activities

      (5,671,046 )      (8,389,828 )      (48,221,272 )      (52,826,420 ) 
  

 

 

  
        
Cash Impact from Foreign Exchange Fluctuations                                 

Cash impact from foreign exchange fluctuations

      (1 )      (4,566 )      (23 )      222   
  

 

 

  
        
Cash and Foreign Currency                                 

Net increase (decrease) in cash and foreign currency

      (17,379 )      (1,696,836 )      108,562        2,062,597   

Cash and foreign currency at beginning of year

      38,448        1,696,836        2,400        5,940   
  

 

 

  

Cash and foreign currency at end of year

    $ 21,069        —      $ 110,962      $ 2,068,537   
  

 

 

  

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    109

Table of Contents
Statements of Cash Flows (continued)     

 

Year Ended October 31, 2013    BlackRock
Enhanced
Equity
Dividend
Trust (BDJ)		     BlackRock
Global
Opportunities
Equity
Trust (BOE)		     BlackRock
Health
Sciences
Trust (BME)		     BlackRock
International
Growth and
Income
Trust (BGY)		  
        
Cash Provided by Operating Activities                                 

Net increase in net assets resulting from operations

    $ 204,637,680      $ 204,479,968      $ 69,350,814      $ 159,101,682   

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:

         

Decrease in dividends receivable — affiliated

      7,204        7,108        906        1,897   

Decrease (increase) in dividends receivable

      335,089        (892,799 )      (101,557 )      (496,287 ) 

Decrease in securities lending income receivable — affiliated

      578        —        1,463        —   

Decrease (increase) in other assets

      (904 )      415,625        3,755        20,557   

Decrease (increase) in cash pledged as collateral for options written

      500,000        410,000        —        (333,000 ) 

Increase in investment advisory fees payable

      50,390        88,599        39,050        23,012   

Decrease in collateral on securities loaned at value

      (4,054,445 )      —        (4,185,923 )      —   

Increase (decrease) in Officer’s and Trustees’ fees payable

      82,307        62,755        (621 )      51,558   

Decrease in cash received as collateral for options written

      (1,500,000 )      —        —        —   

Decrease in other accrued expenses payable

      (107,449 )      (118,807 )      (20,756 )      (91,030 ) 

Net realized and unrealized gain on investments, options written and foreign currency translations

      (171,835,061 )      (196,635,987 )      (68,435,197 )      (145,158,683 ) 

Premiums received from options written

      110,736,500        110,482,947        16,521,233        95,501,544   

Premiums paid on closing options written

      (22,684,735 )      (39,715,917 )      (16,332,662 )      (55,633,639 ) 

Proceeds from sales of long-term investments

      2,692,547,292        2,956,036,263        385,671,268        2,484,527,844   

Purchases of long-term investments

      (2,776,071,824 )      (2,973,122,154 )      (372,011,011 )      (2,453,465,167 ) 

Net (purchases) sales of short-term securities

      67,759,194        18,574,593        7,066,200        (11,181,632 ) 
  

 

 

  

Cash provided by operating activities

      100,401,816        80,072,194        17,566,962        72,868,656   
  

 

 

  
        
Cash Used for Financing Activities                                 

Increase in bank overdraft

      —        295        —        1,358   

Cash dividends paid to shareholders

      (100,510,343 )      (86,617,709 )      (17,566,309 )      (73,846,801 ) 
  

 

 

  

Cash used for financing activities

      (100,510,343 )      (86,617,414 )      (17,566,309 )      (73,845,443 ) 
  

 

 

  
        
Cash Impact from Foreign Exchange Fluctuations                                 

Cash impact from foreign exchange fluctuations

      10        79,081        38        8,083   
  

 

 

  
        
Cash and Foreign Currency                                 

Net increase (decrease) in cash and foreign currency

      (108,517 )      (6,466,139 )      691        (968,704 ) 

Cash and foreign currency at beginning of year

      117,627        10,509,497        1,807        4,010,744   
  

 

 

  

Cash and foreign currency at end of year

    $ 9,110      $ 4,043,358      $ 2,498      $ 3,042,040   
  

 

 

  
        
Non-Cash Financing Activities                                 

Capital shares issued in reinvestment of dividends paid to shareholders

      —        —      $ 867,486        —   
  

 

 

  

 

See Notes to Financial Statements.

 

110    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Statements of Cash Flows (concluded)     

 

Year Ended October 31, 2013    BlackRock
Real Asset
Equity
Trust (BCF)		     BlackRock
Resources &
Commodities
Strategy
Trust (BCX)1		     BlackRock
Utility and
Infrastructure
Trust (BUI)		  
      
Cash Provided by Operating Activities                         

Net increase (decrease) in net assets resulting from operations

    $ 5,487,586      $ (33,371,093 )    $ 33,901,167   

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

      3,031        (223 )      1,054   

Decrease (increase) in dividends receivable

      (43,847 )      324,810        (49,118 ) 

Decrease in securities lending income receivable — affiliated

      10,847        —        —   

Decrease (increase) in other assets

      281,130        (3,957 )      (2,283 ) 

Decrease in cash pledged as collateral for options written

      —        211,452        —   

Increase (decrease) in investment advisory fees payable

      (20,516 )      (81,431 )      4,388   

Decrease in collateral on securities loaned at value

      (3,731,016 )      —        —   

Increase (decrease) in officer’s and trustees’ fees payable

      36,146        (2,222 )      (1,847 ) 

Increase (decrease) in other accrued expenses payable

      (46,638 )      (53,498 )      17,160   

Net realized and unrealized (gain) loss on investments, options written and foreign currency translations

      833,061        44,685,312        (24,235,414 ) 

Premiums received from options written

      39,129,160        37,989,519        15,153,082   

Premiums paid on closing options written

      (11,167,282 )      (6,691,842 )      (6,251,725 ) 

Proceeds from sales of long-term investments

      511,601,742        1,012,627,040        448,413,879   

Purchases of long-term investments

      (501,036,885 )      (979,956,214 )      (433,498,269 ) 

Net (purchases) sales of short-term securities

      9,295,763        (22,156,776 )      (8,490,196 ) 
  

 

 

  

Cash provided by operating activities

      50,632,282        53,520,877        24,961,878   
  

 

 

  
      
Cash Used for Financing Activities                         

Increase (decrease) in bank overdraft on foreign currency at value

      —        (18,412 )      990,610   

Cash dividends paid to shareholders

      (50,655,526 )      (54,027,360 )      (24,515,098 ) 
  

 

 

  

Cash used for financing activities

      (50,655,526 )      (54,045,772 )      (23,524,488 ) 
  

 

 

  
      
Cash Impact from Foreign Exchange Fluctuations                         

Cash impact from foreign exchange fluctuations

      (5 )      117        5,547   
  

 

 

  
      
Cash and Foreign Currency                         

Net increase (decrease) in cash and foreign currency

      (23,249 )      (524,778 )      1,442,937   

Cash and foreign currency at beginning of year

      185,069        770,959        52,564   
  

 

 

  

Cash and foreign currency at end of year

    $ 161,820      $ 246,181      $ 1,495,501   
  

 

 

  

 

  1 

Consolidated Statement of Cash Flows.

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    111

Table of Contents
Financial Highlights      BlackRock Dividend Income Trust (BQY)   

 

     Year Ended October 31,  
     2013     2012     2011     2010     2009  
Per Share Operating Performance                                         

Net asset value, beginning of year

    $ 13.46      $ 13.61      $ 14.26      $ 13.38      $ 12.38   
  

 

 

  

Net investment income1

      0.32        0.33        0.35        0.33        0.36   

Net realized and unrealized gain (loss)

      1.58        0.79        (0.00 )2      1.36        1.43   
  

 

 

  

Net increase from investment operations

      1.90        1.12        0.35        1.69        1.79   
  

 

 

  

Dividends and distributions:3

           

Net investment income

      (0.28 )      (0.67 )      (0.22 )      (0.11 )      (0.35 )4 

Distributions in excess of net investment income5

      —        —        —        —        (0.04 )4 

Net realized gain

      (0.66 )      (0.60 )      (0.78 )      (0.70 )      (0.33 ) 

Return of capital

      —        —        —        —        (0.07 ) 
  

 

 

  

Total dividends and distributions

      (0.94 )      (1.27 )      (1.00 )      (0.81 )      (0.79 ) 
  

 

 

  

Net asset value, end of year

    $ 14.42      $ 13.46      $ 13.61      $ 14.26      $ 13.38   
  

 

 

  

Market price, end of year

    $ 12.84      $ 12.34      $ 12.43      $ 13.44      $ 11.54   
  

 

 

  
          
Total Investment Return6                                         

Based on net asset value

      15.50 %      9.48 %      2.79 %      14.08 %      17.64 % 
  

 

 

  

Based on market price

      12.18 %      9.90 %      (0.40 )%      24.67 %      19.63 % 
  

 

 

  
          
Ratios to Average Net Assets                                         

Total expenses

      1.19 %      1.18 %      1.19 %      1.23 %      1.17 % 
  

 

 

  

Total expenses after fees waived

      1.18 %      1.18 %      1.19 %      1.22 %      1.16 % 
  

 

 

  

Net investment income

      2.29 %      2.50 %      2.45 %      2.40 %      3.39 % 
  

 

 

  
          
Supplemental Data                                         

Net assets, end of year (000)

    $ 86,983      $ 81,186      $ 82,096      $ 86,047      $ 80,716   
  

 

 

  

Portfolio turnover

      103 %      129 %      97 %      59 %      64 % 
  

 

 

  

 

  1 

Based on average shares outstanding.

 

  2 

Amounted to less than $(0.005) per share outstanding.

 

  3 

Determined in accordance with federal income tax regulations.

 

  4 

The amount of dividends and distributions to shareholders from net investment income reported in October 31, 2009 has been reclassified to allocate the amount between distributions from net investment income and distributions in excess of net investment income; both of which were included in the prior year net investment income in the amount of $0.39.

 

  5 

Taxable distribution.

 

  6 

Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions.

 

See Notes to Financial Statements.

 

112    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Financial Highlights      BlackRock EcoSolutions Investments Trust (BQR)   

 

     Year Ended October 31,  
     2013     2012     2011     2010     2009  
Per Share Operating Performance                                         

Net asset value, beginning of year

    $ 9.14      $ 9.38      $ 10.65      $ 10.56      $ 10.23   
  

 

 

  

Net investment income1

      0.09        0.08        0.10        0.05        0.06   

Net realized and unrealized gain (loss)

      0.65        0.56        (0.30 )      1.24        1.78   
  

 

 

  

Net increase (decrease) from investment operations

      0.74        0.64        (0.20 )      1.29        1.84   
  

 

 

  

Dividends and distributions:2

           

Net investment income

      (0.08 )      (0.07 )      (0.11 )      (0.05 )      (0.07 ) 

Net realized gain

      —        —        —        —        (0.09 ) 

Return of capital

      (0.64 )      (0.81 )      (0.96 )      (1.15 )      (1.35 ) 
  

 

 

  

Total dividends and distributions

      (0.72 )      (0.88 )      (1.07 )      (1.20 )      (1.51 ) 
  

 

 

  

Net asset value, end of year

    $ 9.16      $ 9.14      $ 9.38      $ 10.65      $ 10.56   
  

 

 

  

Market price, end of year

    $ 7.93      $ 8.66      $ 8.58      $ 11.69      $ 10.23   
  

 

 

  
          
Total Investment Return3                                         

Based on net asset value

      9.08 %      7.77 %      (2.13 )%      13.04 %      19.64 % 
  

 

 

  

Based on market price

      (0.34 )%      11.63 %      (18.45 )%      28.08 %      28.88 % 
  

 

 

  
          
Ratios to Average Net Assets                                         

Total expenses

      1.44 %      1.44 %      1.40 %      1.45 %      1.51 % 
  

 

 

  

Total expenses after fees waived

      1.41 %      1.43 %      1.40 %      1.45 %      1.50 % 
  

 

 

  

Net investment income

      0.98 %      0.92 %      0.98 %      0.47 %      0.65 % 
  

 

 

  
          
Supplemental Data                                         

Net assets, end of year (000)

    $ 115,138      $ 114,866      $ 117,497      $ 131,002      $ 127,025   
  

 

 

  

Portfolio turnover

      94 %      107 %      86 %      124 %      62 % 
  

 

 

  

 

  1 

Based on average shares outstanding.

 

  2 

Determined in accordance with federal income tax regulations.

 

  3 

Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions.

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    113

Table of Contents
Financial Highlights      BlackRock Energy and Resources Trust (BGR)   

 

     Year Ended October 31,  
     2013     2012     2011     2010     2009  
Per Share Operating Performance                                         

Net asset value, beginning of year

    $ 25.95      $ 28.33      $ 25.87      $ 23.81      $ 20.71   
  

 

 

  

Net investment income1

      0.12        0.13        0.06        0.26        0.41   

Net realized and unrealized gain (loss)

      5.67        (0.74 )      4.02        3.42        4.32   
  

 

 

  

Net increase (decrease) from investment operations

      5.79        (0.61 )      4.08        3.68        4.73   
  

 

 

  

Dividends and distributions:2

           

Net investment income

      —        (0.03 )      (0.24 )      (0.17 )      (0.47 ) 

Net realized gain

      (1.62 )      (1.44 )      (1.38 )      (1.45 )      (0.19 ) 

Return of capital

      —        (0.30 )      —        —        (0.97 ) 
  

 

 

  

Total dividends and distributions

      (1.62 )      (1.77 )      (1.62 )      (1.62 )      (1.63 ) 
  

 

 

  

Net asset value, end of year

    $ 30.12      $ 25.95      $ 28.33      $ 25.87      $ 23.81   
  

 

 

  

Market price, end of year

    $ 26.82      $ 24.28      $ 26.54      $ 25.36      $ 22.18   
  

 

 

  
          
Total Investment Return3                                         

Based on net asset value

      23.68 %      (1.76 )%      16.09 %      15.89 %      25.54 % 
  

 

 

  

Based on market price

      17.70 %      (1.88 )%      10.95 %      21.95 %      34.63 % 
  

 

 

  
          
Ratios to Average Net Assets                                         

Total expenses

      1.26 %      1.28 %      1.26 %      1.27 %      1.30 % 
  

 

 

  

Total expenses after fees waived

      1.25 %      1.22 %      1.15 %      1.11 %      1.10 % 
  

 

 

  

Net investment income

      0.42 %      0.50 %      0.19 %      1.04 %      1.77 % 
  

 

 

  
          
Supplemental Data                                         

Net assets, end of year (000)

    $ 896,635      $ 772,457      $ 843,328      $ 769,976      $ 708,589   
  

 

 

  

Portfolio turnover

      132 %      86 %      111 %      80 %      62 % 
  

 

 

  

 

  1 

Based on average shares outstanding.

 

  2 

Determined in accordance with federal income tax regulations.

 

  3 

Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions.

 

See Notes to Financial Statements.

 

114    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Financial Highlights      BlackRock Enhanced Capital and Income Fund, Inc. (CII)   

 

     Year Ended October 31,  
     2013     2012     2011     2010     2009  
Per Share Operating Performance                                         

Net asset value, beginning of year

    $ 14.11      $ 13.87      $ 14.53      $ 14.40      $ 13.78   
  

 

 

  

Net investment income1

      0.31        0.33        0.35        0.31        0.29   

Net realized and unrealized gain

      2.09        1.29        0.68        1.76        2.27   
  

 

 

  

Net increase from investment operations

      2.40        1.62        1.03        2.07        2.56   
  

 

 

  

Dividends and distributions:2

           

Net investment income

      (0.32 )      (0.33 )3      (0.35 )3      (0.31 )      (0.29 ) 

Distributions in excess of net investment income4

      —        (0.20 )3      (0.23 )3      —        —   

Net realized gain

      —        (0.13 )      (1.11 )      (1.33 )      (1.19 ) 

Return of capital

      (0.88 )      (0.72 )      —        (0.30 )      (0.46 ) 
  

 

 

  

Total dividends and distributions

      (1.20 )      (1.38 )      (1.69 )      (1.94 )      (1.94 ) 
  

 

 

  

Net asset value, end of year

    $ 15.31      $ 14.11      $ 13.87      $ 14.53      $ 14.40   
  

 

 

  

Market price, end of year

    $ 13.52      $ 12.99      $ 12.39      $ 15.03      $ 13.76   
  

 

 

  
          
Total Investment Return5                                         

Based on net asset value

      18.97 %      12.94 %      7.56 %      15.22 %      22.01 % 
  

 

 

  

Based on market price

      14.11 %      16.39 %      (7.11 )%      24.73 %      29.88 % 
  

 

 

  
          
Ratios to Average Net Assets                                         

Total expenses

      0.93 %      0.94 %      0.94 %      0.93 %      0.95 % 
  

 

 

  

Total expenses after fees waived

      0.93 %      0.94 %      0.93 %      0.93 %      0.95 % 
  

 

 

  

Total expenses after fees waived and excluding interest expense

      0.93 %      0.94 %      0.93 %      0.93 %      0.95 % 
  

 

 

  

Net investment income

      2.15 %      2.34 %      2.40 %      2.14 %      2.16 % 
  

 

 

  
          
Supplemental Data                                         

Net assets, end of year (000)

    $ 675,472      $ 622,657      $ 612,145      $ 635,849      $ 618,462   
  

 

 

  

Portfolio turnover

      218 %      205 %      190 %      210 %      138 % 
  

 

 

  

 

  1 

Based on average shares outstanding.

 

  2 

Determined in accordance with federal income tax regulations.

 

  3 

The amount of dividends and distributions to shareholders from net investment income reported in October 31, 2012 and October 31, 2011 has been reclassified to allocate the amount between distributions from net investment income and distributions in excess of net investment income; both of which were included in the prior year net investment income in the amount of $0.53 and $0.58, respectively.

 

  4 

Taxable distribution.

 

  5 

Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions.

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    115

Table of Contents
Financial Highlights      BlackRock Enhanced Equity Dividend Trust (BDJ)   

 

     Year Ended October 31,  
     2013     2012     2011     2010     2009  
Per Share Operating Performance                                         

Net asset value, beginning of year

    $ 8.30      $ 8.03      $ 8.32      $ 8.13      $ 9.59   
  

 

 

  

Net investment income1

      0.18        0.18        0.16        0.17        0.25   

Net realized and unrealized gain (loss)

      0.96        0.77        0.38        1.00        (0.55 ) 
  

 

 

  

Net increase (decrease) from investment operations

      1.14        0.95        0.54        1.17        (0.30 ) 
  

 

 

  

Dividends and distributions:2

           

Net investment income

      (0.18 )      (0.18 )3      (0.16 )3      (0.17 )      (0.25 ) 

Distributions in excess of net investment income4

      (0.20 )      (0.22 )3      (0.35 )3      —        —   

Net realized gain

      (0.18 )      —        —        —        —   

Return of capital4

      —        (0.28 )      (0.32 )      (0.81 )      (0.91 ) 
  

 

 

  

Total dividends and distributions

      (0.56 )      (0.68 )      (0.83 )      (0.98 )      (1.16 ) 
  

 

 

  

Net asset value, end of year

    $ 8.88      $ 8.30      $ 8.03      $ 8.32      $ 8.13   
  

 

 

  

Market price, end of year

    $ 7.72      $ 7.41      $ 7.29      $ 8.99      $ 7.89   
  

 

 

  
          
Total Investment Return5                                         

Based on net asset value

      15.11 %      13.22 %      6.88 %      15.23 %      (1.63 )% 
  

 

 

  

Based on market price

      12.09 %      11.34 %      (10.20 )%      28.30 %      8.08 % 
  

 

 

  
          
Ratios to Average Net Assets                                         

Total expenses

      0.87 %      0.95 %      1.15 %      1.16 %      1.20 % 
  

 

 

  

Total expenses after fees waived

      0.87 %      0.95 %      1.14 %      1.16 %      1.20 % 
  

 

 

  

Net investment income

      2.13 %      2.16 %      1.92 %      2.06 %      3.11 % 
  

 

 

  
          
Supplemental Data                                         

Net assets, end of year (000)

    $ 1,594,223      $ 1,490,096      $ 575,712      $ 592,328      $ 572,066   
  

 

 

  

Portfolio turnover

      180 %      185 %      231 %      232 %      117 % 
  

 

 

  

 

  1 

Based on average shares outstanding.

 

  2 

Determined in accordance with federal income tax regulations.

 

  3 

The amount of dividends and distributions to shareholders from net investment income reported in October 31, 2012 and October 31, 2011 has been reclassified to allocate the amount between distributions from net investment income and distributions in excess of net investment income; both of which were included in the prior year net investment income in the amount of $0.40 and $0.51, respectively.

 

  4 

Taxable distribution.

 

  5 

Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions.

 

See Notes to Financial Statements.

 

116    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Financial Highlights      BlackRock Global Opportunities Equity Trust (BOE)   

 

     Year Ended October 31,  
     2013     2012     2011     2010     2009  
Per Share Operating Performance                                         

Net asset value, beginning of year

    $ 14.99      $ 16.03      $ 18.68      $ 18.64      $ 18.03   
  

 

 

  

Net investment income1

      0.12        0.20        0.17        0.19        0.19   

Net realized and unrealized gain (loss)

      2.82        0.72        (0.54 )      2.13        2.70   
  

 

 

  

Net increase (decrease) from investment operations

      2.94        0.92        (0.37 )      2.32        2.89   
  

 

 

  

Dividends and distributions:2

           

Net investment income

      (0.17 )      (0.22 )      (0.17 )3      (0.18 )3      (0.20 ) 

Distributions in excess of net investment income4

      (0.91 )      —        (0.68 )3      (1.26 )3      —   

Net realized gain

      —        —        (0.61 )      (0.25 )      —   

Return of capital

      (0.17 )      (1.74 )      (0.82 )      (0.59 )      (2.08 ) 
  

 

 

  

Total dividends and distributions

      (1.25 )      (1.96 )      (2.28 )      (2.28 )      (2.28 ) 
  

 

 

  

Net asset value, end of year

    $ 16.68      $ 14.99      $ 16.03      $ 18.68      $ 18.64   
  

 

 

  

Market price, end of year

    $ 14.74      $ 13.24      $ 14.95      $ 19.06      $ 18.40   
  

 

 

  
          
Total Investment Return5                                         

Based on net asset value

      21.93 %      7.36 %      (2.55 )%      13.76 %      20.50 % 
  

 

 

  

Based on market price

      21.99 %      1.68 %      (10.93 )%      17.58 %      34.97 % 
  

 

 

  
          
Ratios to Average Net Assets                                         

Total expenses

      1.08 %      1.10 %      1.10 %      1.11 %      1.21 % 
  

 

 

  

Total expenses after fees waived

      1.08 %      1.10 %      1.09 %      1.10 %      1.20 % 
  

 

 

  

Net investment income

      0.77 %      1.34 %      0.96 %      1.03 %      1.05 % 
  

 

 

  
          
Supplemental Data                                         

Net assets, end of year (000)

    $ 1,159,072      $ 1,041,210      $ 1,113,920      $ 1,290,105      $ 1,278,170   
  

 

 

  

Portfolio turnover

      279 %      298 %      253 %      264 %      300 % 
  

 

 

  

 

  1 

Based on average shares outstanding.

 

  2 

Determined in accordance with federal income tax regulations.

 

  3 

The amount of dividends and distributions to shareholders from net investment income reported in October 31, 2011 and October 31, 2010 has been reclassified to allocate the amount between distributions from net investment income and distributions in excess of net investment income; both of which were included in the prior year net investment income in the amount of $0.85 and $1.44, respectively.

 

  4 

Taxable distribution.

 

  5 

Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions.

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    117

Table of Contents
Financial Highlights      BlackRock Health Sciences Trust (BME)   

 

     Year Ended October 31,  
     2013     2012     2011     2010     2009  
Per Share Operating Performance                                         

Net asset value, beginning of year

    $ 28.34      $ 26.65      $ 27.19      $ 25.37      $ 23.66   
  

 

 

  

Net investment income (loss)1

      0.12        0.08        (0.01 )      0.02        0.10   

Net realized and unrealized gain

      8.85        4.11        1.71        3.34        3.32   
  

 

 

  

Net increase from investment operations

      8.97        4.19        1.70        3.36        3.42   
  

 

 

  

Dividends and distributions:2

           

Net investment income

      (0.06 )      (0.09 )      —        (0.02 )      (0.13 ) 

Net realized gain

      (2.33 )      (2.41 )      (2.24 )      (1.52 )      (1.01 ) 

Return of capital

      —        —        —        —        (0.57 ) 
  

 

 

  

Total dividends and distributions

      (2.39 )      (2.50 )      (2.24 )      (1.54 )      (1.71 ) 
  

 

 

  

Net asset value, end of year

    $ 34.92      $ 28.34      $ 26.65      $ 27.19      $ 25.37   
  

 

 

  

Market price, end of year

    $ 33.56      $ 27.86      $ 25.81      $ 27.14      $ 22.61   
  

 

 

  
          
Total Investment Return3                                         

Based on net asset value

      33.37 %      16.42 %      6.43 %      13.69 %      16.31 % 
  

 

 

  

Based on market price

      30.38 %      18.17 %      3.26 %      27.33 %      13.44 % 
  

 

 

  
          
Ratios to Average Net Assets                                         

Total expenses

      1.12 %      1.13 %      1.14 %      1.15 %      1.15 % 
  

 

 

  

Total expenses after fees waived

      1.12 %      1.13 %      1.13 %      1.15 %      1.15 % 
  

 

 

  

Net investment income (loss)

      0.38 %      0.29 %      (0.02 )%      0.09 %      0.37 % 
  

 

 

  
          
Supplemental Data                                         

Net assets, end of year (000)

    $ 270,161      $ 218,377      $ 202,675      $ 206,392      $ 192,602   
  

 

 

  

Portfolio turnover

      155 %      209 %      226 %      239 %      167 % 
  

 

 

  

 

  1 

Based on average shares outstanding.

 

  2 

Determined in accordance with federal income tax regulations.

 

  3 

Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions.

 

See Notes to Financial Statements.

 

118    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Financial Highlights      BlackRock International Growth and Income Trust (BGY)   

 

     Year Ended October 31,  
     2013     2012     2011     2010     2009  
Per Share Operating Performance                                         

Net asset value, beginning of year

    $ 8.28      $ 8.72      $ 10.52      $ 10.92      $ 10.41   
  

 

 

  

Net investment income1

      0.13        0.16        0.14        0.14        0.29   

Net realized and unrealized gain (loss)

      1.31        0.35        (0.58 )      1.05        2.04   
  

 

 

  

Net increase (decrease) from investment operations

      1.44        0.51        (0.44 )      1.19        2.33   
  

 

 

  

Dividends and distributions:2

           

Net investment income

      (0.17 )      (0.18 )      (0.14 )3      (0.12 )      (0.30 ) 

Distributions in excess of net investment income4

      —        —        (0.53 )3      —        —   

Net realized gain

      —        —        —        —        —   

Return of capital

      (0.50 )      (0.77 )      (0.69 )      (1.47 )      (1.52 ) 
  

 

 

  

Total dividends and distributions

      (0.67 )      (0.95 )      (1.36 )      (1.59 )      (1.82 ) 
  

 

 

  

Net asset value, end of year

    $ 9.05      $ 8.28      $ 8.72      $ 10.52      $ 10.92   
  

 

 

  

Market price, end of year

    $ 8.14      $ 7.41      $ 7.88      $ 10.56      $ 10.92   
  

 

 

  
          
Total Investment Return5                                         

Based on net asset value

      19.25 %      7.65 %      (4.55 )%      12.06 %      26.28 % 
  

 

 

  

Based on market price

      19.86 %      6.61 %      (14.07 )%      12.49 %      44.62 % 
  

 

 

  
          
Ratios to Average Net Assets                                         

Total expenses

      1.09 %      1.11 %      1.10 %      1.13 %      1.12 % 
  

 

 

  

Total expenses after fees waived

      1.07 %      1.11 %      1.10 %      1.13 %      1.12 % 
  

 

 

  

Net investment income

      1.49 %      1.97 %      1.37 %      1.40 %      2.68 % 
  

 

 

  
          
Supplemental Data                                         

Net assets, end of year (000)

    $ 995,736      $ 910,481      $ 959,153      $ 1,156,583      $ 1,178,647   
  

 

 

  

Portfolio turnover

      266 %      226 %      217 %      247 %      198 % 
  

 

 

  

 

  1 

Based on average shares outstanding.

 

  2 

Determined in accordance with federal income tax regulations.

 

  3 

The amount of dividends and distributions to shareholders from net investment income reported in October 31, 2011 has been reclassified to allocate the amount between distributions from net investment income and distributions in excess of net investment income; both of which were included in the prior year net investment income in the amount of $0.67.

 

  4 

Taxable distribution.

 

  5 

Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions.

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    119

Table of Contents
Financial Highlights      BlackRock Real Asset Equity Trust (BCF)   

 

     Year Ended October 31,  
     2013     2012     2011     2010     2009  
Per Share Operating Performance                                         

Net asset value, beginning of year

    $ 11.03      $ 12.45      $ 13.42      $ 11.73      $ 9.44   
  

 

 

  

Net investment income1

      0.11        0.12        0.11        0.17        0.08   

Net realized and unrealized gain (loss)

      (0.01 )      (0.50 )      0.01        2.61        3.30   
  

 

 

  

Net increase (decrease) from investment operations

      0.10        (0.38 )      0.12        2.78        3.38   
  

 

 

  

Dividends and distributions:2

           

Net investment income

      (0.12 )      (0.13 )      (0.07 )3      (0.26 )3      (0.11 ) 

Distributions in excess of net investment income4

      —        —        (0.14 )3      (0.48 )3      —   

Net realized gain

      —        (0.55 )      (0.50 )      —        —   

Return of capital

      (0.77 )      (0.36 )      (0.38 )      (0.35 )      (0.98 ) 
  

 

 

  

Total dividends and distributions

      (0.89 )      (1.04 )      (1.09 )      (1.09 )      (1.09 ) 
  

 

 

  

Net asset value, end of year

    $ 10.24      $ 11.03      $ 12.45      $ 13.42      $ 11.73   
  

 

 

  

Market price, end of year

    $ 9.12      $ 10.39      $ 11.84      $ 13.46      $ 11.45   
  

 

 

  
          
Total Investment Return5                                         

Based on net asset value

      1.81 %      (2.79 )%      0.58 %      24.65 %      40.96 % 
  

 

 

  

Based on market price

      (3.75 )%      (3.71 )%      (4.64 )%      28.08 %      67.81 % 
  

 

 

  
          
Ratios to Average Net Assets                                         

Total expenses

      1.29 %      1.29 %      1.29 %      1.28 %      1.32 % 
  

 

 

  

Total expenses after fees waived and paid indirectly

      1.19 %      1.14 %      1.09 %      1.08 %      1.12 % 
  

 

 

  

Net investment income

      1.04 %      1.08 %      0.77 %      1.37 %      0.68 % 
  

 

 

  
          
Supplemental Data                                         

Net assets, end of year (000)

    $ 585,633      $ 630,801      $ 711,917      $ 765,463      $ 664,928   
  

 

 

  

Portfolio turnover

      89 %      72 %      79 %      71 %      58 % 
  

 

 

  

 

  1 

Based on average shares outstanding.

 

  2 

Determined in accordance with federal income tax regulations.

 

  3 

The amount of dividends and distributions to shareholders from net investment income reported in October 31, 2011 and October 31, 2010 has been reclassified to allocate the amount between distributions from net investment income and distributions in excess of net investment income; both of which were included in the prior year net investment income in the amount of $0.21 and $0.74, respectively.

 

  4 

Taxable distribution.

 

  5 

Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions.

 

See Notes to Financial Statements.

 

120    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Consolidated Financial Highlights      BlackRock Resources & Commodities Strategy Trust (BCX)   

 

     Year Ended October 31    

Period
March 30,
20111
through

October 31,

  
     2013     2012     2011  
Per Share Operating Performance                         

Net asset value, beginning of period

    $ 15.42      $ 16.83      $ 19.10 2 
  

 

 

  

Net investment income3

      0.25        0.18        0.03   

Net realized and unrealized loss

      (0.97 )      (0.19 )      (1.57 ) 
  

 

 

  

Net decrease from investment operations

      (0.72 )      (0.01 )      (1.54 ) 
  

 

 

  

Dividends and distributions:4

       

Net investment income

      (0.14 )      (0.26 )      —   

Net realized gain

      —        (0.01 )      (0.24 ) 

Return of capital

      (1.02 )      (1.13 )      (0.46 ) 
  

 

 

  

Total dividends and distributions

      (1.16 )      (1.40 )      (0.70 ) 
  

 

 

  

Capital charges with respect to the issuance of shares

      —        —        (0.03 ) 
  

 

 

  

Net asset value, end of period

    $ 13.54      $ 15.42      $ 16.83   
  

 

 

  

Market price, end of period

    $ 11.68      $ 14.12      $ 14.95   
  

 

 

  
      
Total Investment Return5                         

Based on net asset value

      (3.61 )%6      0.90 %      (7.80 )%7 
  

 

 

  

Based on market price

      (9.19 )%      4.02 %      (21.79 )%7 
  

 

 

  
      
Ratios to Average Net Assets                         

Total expenses

      1.27 %      1.25 %      1.35 %8 
  

 

 

  

Total expenses after fees waived

      1.07 %      1.05 %      1.13 %8 
  

 

 

  

Net investment income

      1.76 %      1.14 %      0.27 %8 
  

 

 

  
      
Supplemental Data                         

Net assets, end of period (000)

    $ 630,617      $ 718,016      $ 783,792   
  

 

 

  

Portfolio turnover

      156 %      100 %      27 % 
  

 

 

  

 

  1 

Commencement of investment operations. This information includes the initial investment by BlackRock HoldCo2, Inc.

 

  2 

Net asset value, beginning of period, reflects a deduction of $0.8975 per share sales charge from initial offering price of $20.00 per share.

 

  3 

Based on average shares outstanding.

 

  4 

Determined in accordance with federal income tax regulations.

 

  5 

Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions.

 

  6 

Includes a payment from an affiliate to compensate for foregone securities lending revenue which impacted the Fund’s total return. Not including this payment the Trust’s total return would have been (3.68)%.

 

  7 

Aggregate total investment return.

 

  8 

Annualized.

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    OCTOBER 31, 2013    121

Table of Contents
Financial Highlights (concluded)      BlackRock Utility and Infrastructure Trust (BUI)   

 

     Year Ended
October 31, 2013		     Period
November  25,
20111
through
October 31,
2012		  
Per Share Operating Performance                 

Net asset value, beginning of period

    $ 20.22      $ 19.10 2 
  

 

 

  

Net investment income3

      0.57        0.54   

Net realized and unrealized gain

      1.44        1.71   
  

 

 

  

Net increase from investment operations

      2.01        2.25   
  

 

 

  

Dividends and distributions:4

     

Net investment income

      (0.52 )      (0.49 ) 

Net realized gain

      (0.42 )      (0.41 ) 

Return of capital

      (0.51 )      (0.19 ) 
  

 

 

  

Total dividends and distributions

      (1.45 )      (1.09 ) 
  

 

 

  

Capital charges with respect to the issuance of shares

      —        (0.04 ) 
  

 

 

  

Net asset value, end of period

    $ 20.78      $ 20.22   
  

 

 

  

Market price, end of period

    $ 18.36      $ 19.03   
  

 

 

  
    
Total Investment Return5                 

Based on net asset value

      11.18 %      12.05 %6 
  

 

 

  

Based on market price

      4.37 %      0.71 %6 
  

 

 

  
    
Ratios to Average Net Assets                 

Total expenses

      1.11 %      1.12 %7 
  

 

 

  

Total expenses after fees waived

      1.10 %      1.11 %7 
  

 

 

  

Total expenses after fees waived and excluding excise tax

      1.10 %      1.10 %7 
  

 

 

  

Net investment income

      2.83 %      2.94 %7 
  

 

 

  
    
Supplemental Data                 

Net assets, end of period (000)

    $ 351,325      $ 341,939   
  

 

 

  

Portfolio turnover

      133 %      90 % 
  

 

 

  

 

  1 

Commencement of investment operations. This information includes the initial investment by BlackRock HoldCo2, Inc.

 

  2 

Net asset value, beginning of period, reflects a deduction of $0.8975 per share sales charge from initial offering price of $20.00 per share.

 

  3 

Based on average shares outstanding.

 

  4 

Determined in accordance with federal income tax regulations.

 

  5 

Total investment returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of dividends and distributions.

 

  6 

Aggregate total investment return.

 

  7 

Annualized.

 

See Notes to Financial Statements.

 

122    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Notes to Financial Statements     

 

1. Organization:

BlackRock Dividend Income Trust (formerly BlackRock S&P Quality Rankings Global Equity Managed Trust) (“BQY”), 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”), 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. BQY, CII, BDJ and BOE 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 Board of Directors and Board of Trustees 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 common shareholder of a Target Trust received common shares of BDJ in an amount equal to the aggregate net asset value 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:

 

Target

Trusts

  

Net

Assets

     Paid-in
Capital		    

Distributions in

Excess of Net

Investment

Income

    

Accumulated
Net

Realized
Loss

     Net
Unrealized
Appreciation		  

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

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.

 

 

     ANNUAL REPORT    OCTOBER 31, 2013    123

Table of Contents
Notes to Financial Statements (continued)     

 

Basis of Consolidation: BCX’s accompanying consolidated financial statements include the accounts of BlackRock Cayman Resources & Commodities Strategy Fund, Ltd. (the “Subsidiary”), which is a wholly owned subsidiary of BCX and primarily invests in commodity-related instruments. The Subsidiary enables BCX to hold these commodity-related instruments and satisfy regulated investment company tax requirements. BCX may invest up to 25% of its total assets in the Subsidiary. Intercompany accounts and transactions, if any, have been eliminated. The Subsidiary is subject to the same investment policies and restrictions that apply to BCX.

2. Significant Accounting Policies:

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 of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the Trusts.

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 determine the fair values of 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.

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.

Equity investments traded on a recognized securities exchange or the NASDAQ Stock Market (“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. Investments in open-end registered investment companies are valued at the NAV each business 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 that 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 Global Valuation Committee, or its delegate, deem relevant consistent with the principles of fair value measurement, which include the market approach, income approach and/or in the case of recent investments, the cost approach, as appropriate. The 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 where an active market does not exist including regular due diligence of the Trusts’ pricing vendors, regular reviews 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

 

 

124    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Notes to Financial Statements (continued)     

 

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 on a quarterly basis.

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 affect the value of such instruments materially, those instruments may be Fair Value Assets and valued at their fair value, as determined in good faith by the Global Valuation Committee, or it’s delegate, 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: 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 in 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, net realized and unrealized gains on investments, and/or return of capital.

Portions of return of capital distributions under US GAAP may be taxed at ordinary income rates.

The character of dividends and distributions is determined in accordance with federal income tax regulations, which may differ from US GAAP. 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 non-taxable return of capital. Realized net capital gains can be offset by capital losses carried forward from prior years. However, certain Trusts have capital loss carry-forwards from pre-2012 tax years that offset realized net capital gains but do not offset current earnings and profits. Consequently, if distributions in any tax year are less than a Trust’s current earnings and profits but greater than net investment income and net realized capital gains (taxable income), distributions in excess of taxable income are not treated as non-taxable return of capital, but rather may be taxable to shareholders at ordinary income rates. Under certain circumstances, taxable excess distributions could be significant. See Note 7, Income Tax Information, for the tax character of each Trust’s distributions paid during the period.

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 their taxable income to their 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

 

 

     ANNUAL REPORT    OCTOBER 31, 2013    125

Table of Contents
Notes to Financial Statements (continued)     

 

the four years ended October 31, 2013 with the exception of BCX and BUI. The statute of limitations on BCX’s US federal tax returns remains open for the two years ended October 31, 2013 and the period ended October 31, 2011. The statute of limitations on BUI’s US federal tax returns remains open for the year ended October 31, 2013 and 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 Standards: In December 2011, the Financial Accounting Standards Board (the “FASB”) 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. In January 2013, the FASB issued guidance that clarifies, which investments and transactions are subject to the offsetting disclosure requirements. The scope of the disclosure requirements for offsetting will be limited to derivative instruments, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions. 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, if any, of this guidance on the Trusts’ financial statement disclosures.

Deferred Compensation: Under the Deferred Compensation Plan (the “Plan”) approved by each Trust’s Board, except CII, the 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 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 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.

S&P Quality Rankings: BQY had been granted a license by Standard & Poor’s® (“S&P”) to use the S&P Quality Rankings and the S&P International Quality Rankings. Effective September 17, 2013, BQY terminated its license to use either the S&P Quality Rankings or the S&P International Quality Rankings. “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 had been licensed for use by BQY. BQY was not sponsored, endorsed, managed, sold or promoted by S&P and S&P made 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, for a period of 1 year following the termination date.

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. Expenses directly related to the Trusts and other shared expenses pro rated to the Trusts are allocated daily to each class based on its 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 Statements 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.

3. Securities and Other Investments:

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. The initial collateral received by the Trusts should have a value of at least 102% of the current value of the loaned securities for securities traded on US exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter 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 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.

The market value of securities on loan and the value of the related collateral are shown separately in the Statements of Assets and Liabilities as a component of investments at value, and collateral on securities loaned at value, respectively. The cash collateral invested by the securities lending agent, BlackRock Investment Management, LLC (“BIM”), if any, is disclosed in the Schedules of Investments.

Securities lending transactions are entered into by the Trusts under Master Securities Lending Agreements (“MSLA”), which provide the right,

 

 

126    ANNUAL REPORT    OCTOBER 31, 2013     

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in the event of default (including bankruptcy or insolvency) for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, the Trusts, as lender, would offset the market value of the collateral received against the market value of the securities loaned. The value of the collateral is typically greater than that of the market value of the securities loaned, leaving the lender with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of a MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, the borrower can resell or re-pledge the loaned securities, and the Trusts can reinvest cash collateral, or, upon an event of default, resell or repledge the collateral.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate this risk the Trusts benefit from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of securities lent. 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, 2013, any securities on loan were collateralized by cash.

4. 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, 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.

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 or hedge exposure away from 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.

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 when it otherwise would not, or at a price different from the current market value.

 

 

     ANNUAL REPORT    OCTOBER 31, 2013    127

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Notes to Financial Statements (continued)     

 

The following is a summary of the Trusts’ derivative financial instruments categorized by risk exposure:

 

Derivative Financial Instruments Categorized by Risk Exposure:                      
Fair Values of Derivative Financial Instruments as of October 31, 2013  
     Asset Derivatives  
            BQY        CII        BOE                BME        BGY        BCX  
     

Statements of Assets and

Liabilities Location

                                    Value                              

Foreign currency exchange contracts

   

Unrealized appreciation on

foreign currency exchange

contracts

        —         $ 15,057         $ 17,814                  —         $ 41,414         $ 2   

Equity contracts

   

Investments at value

— unaffiliated1

      $ 93           —           —                $ 330           —           —   

Total

           $ 93         $ 15,057         $ 17,814                $ 330         $ 41,414         $ 2   

 

                        Liability Derivatives                                
            BQY        BQR        BGR        CII        BDJ        BOE  
     

Statements of Assets and

Liabilities Location

                          Value                                

Foreign currency exchange contracts

   

Unrealized depreciation on

foreign currency exchange

contracts

      $ (19)           —           —         $ (12,054)           —         $ (11,552)   

Equity contracts

   

Options written

— at value

        (928,492 )       $ (1,360,268 )       $ (6,017,213 )         (10,388,428 )       $ (20,305,989 )         (19,864,084 ) 

Total

           $ (928,511 )       $ (1,360,268 )       $ (6,017,213 )       $ (10,400,482 )       $ (20,305,989 )       $ (19,875,636 ) 

 

                        Liability Derivatives                      
            BME        BGY        BCF        BCX        BUI  
     

Statements of Assets and

Liabilities Location

                          Value                      

Foreign currency exchange contracts

   

Unrealized depreciation on

foreign currency exchange

contracts

        —         $ (51,727)         $ (142)         $ (211)           —   

Equity contracts

   

Options written

— at value

      $ (2,608,688)           (17,727,514 )         (4,828,567 )         (4,497,214 )       $ (3,992,438 ) 

Total

           $ (2,608,688 )       $ (17,779,241 )       $ (4,828,709 )       $ (4,497,425 )       $ (3,992,438 ) 

 

  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, 2013

  
       Net Realized Gain (Loss) From  
        BQY        BQR        BGR        CII        BDJ      BOE  

Foreign currency exchange contracts:

                            

Foreign currency transactions

      $ 30,202         $ 24,424         $ (85,498 )       $ 209,076         $ (15,873 )     $ (640,843 ) 

Equity contracts:

                            

Options2

        1,415,858           2,068,698           6,646,382           22,994,600           45,600,260         28,294,879   

Total

      $ 1,446,060         $ 2,093,122         $ 6,560,884         $ 23,203,676         $ 45,584,387       $ 27,654,036   

 

        Net Realized Gain (Loss) From  
        BME        BGY        BCF        BCX        BUI  

Foreign currency exchange contracts:

                         

Foreign currency transactions.

      $ (15,182)         $ (226,996 )       $ 49,013         $ (146,921)         $ 48,358   

Equity contracts:

                         

Options2

        (4,326,782 )         8,961,480           19,627,016           23,314,058           4,542,564   

Total

      $ (4,341,964 )       $ 8,734,484         $ 19,676,029         $ 23,167,137         $ 4,590,922   

 

  2 

Options purchased are included in the net realized gain (loss) from investments - unaffiliated and net change in unrealized appreciation/depreciation on investments.

 

128    ANNUAL REPORT    OCTOBER 31, 2013     

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The Effect of Derivative Financial Instruments in the Statements of Operations

Year Ended October 31, 2013

  
    

Net Change in Unrealized

Appreciation/Depreciation on

  
      BQY     BQR     BGR     CII     BDJ     BOE  

Foreign currency exchange contracts:

             

Foreign currency translations

    $ (10 )      —        —      $ 3,003      $ 167      $ 12,574   

Equity contracts:

             

Options2

      (619,809 )    $ (455,665 )    $ (1,998,026 )      (6,538,597 )      (11,675,521 )      (6,932,167 ) 

Total

    $ (619,819 )    $ (455,665 )    $ (1,998,026 )    $ (6,535,594 )    $ (11,675,354 )    $ (6,919,593 ) 

 

     

Net Change in Unrealized

Appreciation/Depreciation on

  
      BME      BGY     BCF     BCX     BUI  

Foreign currency exchange contracts:

            

Foreign currency translations

    $ 1,062       $ (10,313)      $ (142)      $ (209)      $ 17   

Equity contracts:

            

Options2

      610,861         (1,997,538 )      (1,790,015 )      (722,057 )      (1,625,124 ) 

Total

    $ 611,923       $ (2,007,851 )    $ (1,790,157 )    $ (722,266 )    $ (1,625,107 ) 

 

  2

Options purchased are included in the net realized gain (loss) from investments-unaffiliated and net change in unrealized appreciation/depreciation on investments.

For the year ended October 31, 2013, the average quarterly balances of outstanding derivative financial instruments were as follows:

 

      BQY      BQR      BGR      CII      BDJ      BOE  

Foreign currency exchange contracts:

                  

Average number of contracts — US dollars purchased

      2         2         1         1         1         4   

Average number of contracts — US dollars sold

      1         1         —         1         —         3   

Average US dollar amounts purchased

    $ 14,604       $ 86,019       $ 181,508       $ 278,031       $ 96,225       $ 10,781,812   

Average US dollar amounts sold

    $ 645       $ 73,209         —       $ 259,629         —       $ 6,884,531   

Options:

                  

Average number of options contracts purchased

      95         36         966         1,394         2,817         725   

Average number of options contracts written

      942,747         6,714,825         6,070,525         7,232,019         15,239,986         26,082,605   

Average notional value of options contracts purchased

    $ 606,138       $ 101,500       $ 7,407,000       $ 2,645,700       $ 16,065,050       $ 2,594,125   

Average notional value of contracts written

    $ 32,343,799       $ 45,371,127       $ 278,253,492       $ 330,192,813       $ 791,765,845       $ 549,248,228   

 

      BME      BGY      BCF      BCX      BUI  

Foreign currency exchange contracts:

               

Average number of contracts — US dollars purchased

      1         5         2         2         2   

Average number of contracts — US dollars sold

      1         6         1         1         1   

Average US dollar amounts purchased

    $ 21,855       $ 22,403,555       $ 443,594       $ 932,228       $ 796,660   

Average US dollar amounts sold

    $ 1,551       $ 18,167,327       $ 404,594       $ 356,121       $ 267,634   

Options:

               

Average number of options contracts purchased

      94         —         365         40         288   

Average number of options contracts written

      1,707,050         40,940,072         10,690,650         13,410,990         6,792,680   

Average notional value of options contracts purchased

    $ 496,250         —       $ 1,358,400       $ 156,875       $ 1,219,675   

Average notional value of options contracts written

    $ 86,014,812       $ 460,078,811       $ 195,489,202       $ 281,460,901       $ 110,314,847   

 

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Counterparty Credit Risk: A derivative contract may suffer a mark to market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.

A Trust’s risk of loss from counterparty credit risk on OTC derivatives is generally limited to the aggregate unrealized gain netted against any collateral held by such Trust. For OTC options purchased, each Trust bears the risk of loss of the amount of the premiums paid plus the positive change in market values net of any collateral held by such Trust should the counterparty fail to perform under the contracts. Options written by the Trusts do not typically give rise to counterparty credit risk, as options written generally obligate the Trusts, and not, the counterparty to perform.

With exchange traded purchased options, there is less counterparty credit risk to the Trusts since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Trusts.

In order to better define its contractual rights and to secure rights that will help the Trusts mitigate its counterparty risk, the Trusts may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between each Trust and a counterparty that governs OTC derivatives and foreign exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, each Trust may, under certain circumstances, offset with the counterparty certain derivative financial instrument’s payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default including the bankruptcy or insolvency of the counterparty. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy, insolvency or other events. In addition, certain ISDA Master Agreements allow counterparties to OTC derivatives to terminate derivative contracts prior to maturity in the event the Trust’s net assets decline by a stated percentage or the Trust fails to meet the terms of its ISDA Master Agreements, which would cause the Trust to accelerate payment of any net liability owed to the counterparty.

Collateral Requirements: For derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the mark to market amount for each transaction under such agreement

and comparing that amount to the value of any collateral currently pledged by a Trust and the counterparty.

Cash collateral that has been pledged to cover obligations of a Trust and cash collateral received from the counterparty, if any, is reported separately on the Statement of Assets and Liabilities as cash pledged as collateral and cash received as collateral, respectively. Non-cash collateral pledged by a Trust, if any, is noted in the Schedule of Investments. Generally, the amount of collateral due from or to a party has to exceed a minimum transfer amount threshold (e.g. $500,000) before a transfer is required, which is determined at the close of business of the Trusts and any additional required collateral is delivered to/pledged by the Trusts on the next business day. Typically, the Trusts and counterparties are not permitted to sell, re-pledge or use the collateral they receive. To the extent amounts due to a Trust from its counterparties are not fully collateralized, contractually or otherwise, a Trust bears the risk of loss from counterparty non-performance. See Note 1 “Segregation and Collateralization” for information with respect to collateral practices. Each Trust attempts to mitigate counterparty risk by only entering into agreements with counterparties that it believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.

For financial reporting purposes, the Trusts do not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statement of Assets and Liabilities.

5. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate, for 1940 Act purposes, of 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 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:

 

Average weekly value of each Trust’s net assets:

         

BQY

      0.75 % 

BGR

      1.20 % 

BDJ

      0.81 % 

BOE

      1.00 % 

BME

      1.00 % 

BCF

      1.20 % 

Average daily value of each Trust’s net assets:

   

BQR

      1.20 % 

CII

      0.85 % 

BGY

      1.00 % 

BCX

      1.20 % 

BUI

      1.00 % 
 

 

130    ANNUAL REPORT    OCTOBER 31, 2013     

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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

    0.05%   December 29, 2012

BCF

    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

Effective June 6, 2013, the Manager has voluntarily agreed to waive a portion of the investment advisory fees on BQR and BGY as a percentage of their average daily net assets as follows:

 

BQR

      0.05 % 

BGY

      0.05 % 

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, 2013, the amounts waived were as follows:

 

BQY

    $ 2,541   

BQR

    $ 6,047   

BGR

    $ 23,215   

CII

    $ 15,883   

BDJ

    $ 42,175   

BOE

    $ 23,023   

BME

    $ 4,304   

BGY

    $ 10,061   

BCF

    $ 24,072   

BCX

    $ 16,135   

BUI

    $ 8,189   

The Manager entered into separate sub-advisory agreements with BlackRock Financial Management, Inc. (“BFM”) for BQY, BGR, CII, BDJ and BUI, BIM for BQR, CII, BCF and BUI, BlackRock Capital Management, Inc. for BGY, BCF and BCX and BlackRock International Ltd. for BQR, BGR, BCF and BCX, 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 in a private investment company managed by the Manager or in registered money market funds advised by the Manager or its affiliates. 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, if any, is disclosed in the Schedules of Investments. 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 Trusts benefit from a borrower default indemnity provided by BlackRock. As securities lending agent, BIM bears all operational costs directly related to securities lending as well as the cost of borrower default indemnification. BIM does not receive any fees for managing the cash collateral. 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, 2013, BIM received $4,145 in securities lending agent fees related to securities lending activities for the Trusts.

Certain Trusts received payments from an affiliate to compensate for foregone securities lending revenue which is included in Other income -affiliated in the Statements of Operations as follows:

 

BQY

    $ 28,489   

CII

    $ 13,547   

BOE

    $ 73,658   

BGY

    $ 108,135   

BCX

    $ 346,955   

BUI

    $ 49,018   
 

 

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Notes to Financial Statements (continued)     

 

Certain officers and/or trustees of the Trusts are officers and/or trustees of BlackRock or its affiliates. The Trusts reimburse the Manager for a portion of the compensation paid to the Trusts’ Chief Compliance Officer, which is included in officer and diectors in the Statement of Operations.

The Trusts may purchase securities from, or sell securities to, an affiliated fund provided the affiliation is solely due to having a common investment adviser, common officers, or common trustees. For the year ended October 31, 2013, the purchase and sale transactions with an affiliated fund in compliance with Rule 17a-7 under the 1940 Act were as follows:

 

      Purchases      Sales  

BGR

      —       $ 3,167,071   

BOE

    $ 2,174,338         —   

BME

      —       $ 1,168,560   

BUI

    $ 8,612,070         —   

6. Purchases and Sales:

Purchases and sales of investment securities, excluding short-term securities, for the year ended October 31, 2013, were as follows:

 

      Purchases      Sales  

BQY

    $ 82,924,190       $ 86,140,698   

BQR

    $ 102,051,744       $ 104,418,877   

BGR

    $ 1,065,763,846       $ 1,144,573,213   

CII

    $ 1,362,688,152       $ 1,354,486,369   

BDJ

    $ 2,812,623,915       $ 2,688,330,005   

BOE

    $ 3,010,305,075       $ 2,975,744,774   

BME

    $ 371,258,110       $ 385,653,376   

BGY

    $ 2,477,701,085       $ 2,506,158,172   

BCF

    $ 505,105,162       $ 519,455,800   

BCX

    $ 990,753,455       $ 1,009,487,540   

BUI

    $ 441,845,267       $ 451,194,409   

Transactions in options written for the year ended October 31, 2013, were as follows:

 

     Calls     Puts  
      Contracts     Premiums
Received		     Contracts      Premiums
Received		  

BQY

          

Outstanding options at beginning of year

      666,914      $ 680,823        —         —   

Options written

      4,373,396        4,120,326        —         —   

Options expired

      (2,036,724 )      (1,398,259 )      —         —   

Options closed

      (881,425 )      (1,344,375 )      —         —   

Options exercised

      (1,679,821 )      (1,515,155 )      —         —   
  

 

 

    

 

 

    

 

 

     

 

 

  

Outstanding options at end of year

      442,340      $ 543,360        —         —   
  

 

 

    

 

 

    

 

 

     

 

 

  
                                   
     Calls     Puts  
      Contracts     Premiums
Received		     Contracts     Premiums
Received		  

BQR

         

Outstanding options at beginning of year

      6,889,548      $ 1,345,784        —        —   

Options written

      44,740,048        7,995,417        —        —   

Options expired

      (21,100,644 )      (3,345,086 )      —        —   

Options closed

      (14,328,918 )      (2,350,799 )      —        —   

Options exercised

      (9,983,140 )      (2,445,975 )      —        —   
  

 

 

    

 

 

    

 

 

    

 

 

  

Outstanding options at end of year

      6,216,894      $ 1,199,341        —        —   
  

 

 

    

 

 

    

 

 

    

 

 

  
                                  

BGR

         

Outstanding options at beginning of year

      4,078,778      $ 10,334,101        —        —   

Options written

      25,656,969        56,877,913        —        —   

Options expired

      (8,599,899 )      (15,535,637 )      —        —   

Options closed

      (10,216,634 )      (26,931,424 )      —        —   

Options exercised

      (7,330,977 )      (16,270,868 )      —        —   
  

 

 

    

 

 

    

 

 

    

 

 

  

Outstanding options at end of year

      3,588,237      $ 8,474,085        —        —   
  

 

 

    

 

 

    

 

 

    

 

 

  
                                  

CII

         

Outstanding options at beginning of year

      3,841,460      $ 7,667,197        —        —   

Options written

      24,681,335        54,958,691        1,000      $ 57,969   

Options expired

      (5,877,771 )      (15,458,581 )      (1,000 )      (57,969 ) 

Options closed

      (7,243,202 )      (17,808,548 )      —        —   

Options exercised

      (12,687,207 )      (23,266,806 )      —        —   
  

 

 

    

 

 

    

 

 

    

 

 

  

Outstanding options at end of year

      2,714,615      $ 6,091,953        —        —   
  

 

 

    

 

 

    

 

 

    

 

 

  
                                  

BDJ

         

Outstanding options at beginning of year

      8,035,194      $ 17,351,654        1,330,600      $ 2,341,232   

Options written

      52,863,280        110,713,730        45,000        22,770   

Options expired

      (13,776,921 )      (30,979,961 )      (91,400 )      (88,194 ) 

Options closed

      (16,865,089 )      (37,216,840 )      —        —   

Options exercised

      (25,166,237 )      (47,420,019 )      (1,284,200 )      (2,275,808 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Outstanding options at end of year

      5,090,227      $ 12,448,564        —        —   
  

 

 

    

 

 

    

 

 

    

 

 

  
                                  

BOE

         

Outstanding options at beginning of year

      30,503,917      $ 14,301,483        —        —   

Options written

      159,659,217        110,482,947        —        —   

Options expired

      (37,678,458 )      (27,923,128 )      —        —   

Options closed

      (68,613,424 )      (40,087,668 )      —        —   

Options exercised

      (58,804,610 )      (41,159,284 )      —        —   
  

 

 

    

 

 

    

 

 

    

 

 

  

Outstanding options at end of year

      25,066,642      $ 15,614,350        —        —   
  

 

 

    

 

 

    

 

 

    

 

 

  
                                  
 

 

132    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Notes to Financial Statements (continued)     

 

     Calls     Puts  
      Contracts     Premiums
Received		     Contracts     Premiums
Received		  
BME                         

Outstanding options at beginning of year

      594,345      $ 2,542,259        224,570      $ 490,378   

Options written

      4,126,067        16,079,205        75,219        442,028   

Options expired

      (862,413 )      (3,190,381 )      (113,663 )      (106,558 ) 

Options closed

      (2,102,233 )      (8,442,920 )      (37,723 )      (266,021 ) 

Options exercised

      (1,156,512 )      (3,840,918 )      (111,603 )      (454,211 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Outstanding options at end of year

      599,254      $ 3,147,245        36,800      $ 105,616   
  

 

 

    

 

 

    

 

 

    

 

 

  
  

 

 

    

 

 

    

 

 

    

 

 

  
BGY                             

Outstanding options at beginning of year

      37,264,801      $ 14,333,012        —        —   

Options written

      274,113,319        95,501,544        —        —   

Options expired

      (64,349,782 )      (27,088,222 )      —        —   

Options closed

      (103,470,183 )      (37,506,897 )      —        —   

Options exercised

      (85,714,693 )      (31,613,138 )      —        —   
  

 

 

    

 

 

    

 

 

    

 

 

  

Outstanding options at end of year

      57,843,462      $ 13,626,299        —        —   
  

 

 

    

 

 

    

 

 

    

 

 

  
  

 

 

    

 

 

    

 

 

    

 

 

  
BCF                             

Outstanding options at beginning of year

      8,495,599      $ 7,376,099        —        —   

Options written

      61,171,408        39,117,280        54,000      $ 11,880   

Options expired

      (37,973,140 )      (19,050,031 )      (27,000 )      (5,400 ) 

Options closed

      (9,733,458 )      (11,738,866 )      —        —   

Options exercised

      (12,632,449 )      (10,845,136 )      (27,000 )      (6,480 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Outstanding options at end of year

      9,327,960      $ 4,859,346        —        —   
  

 

 

    

 

 

    

 

 

    

 

 

  
  

 

 

    

 

 

    

 

 

    

 

 

  
BCX                             

Outstanding options at beginning of year

      6,266,417      $ 6,814,345        —        —   

Options written

      51,407,706        37,989,519        —        —   

Options expired

      (29,281,817 )      (17,508,598 )      —        —   

Options closed

      (17,084,714 )      (12,497,302 )      —        —   

Options exercised

      (6,241,793 )      (10,547,741 )      —        —   
  

 

 

    

 

 

    

 

 

    

 

 

  

Outstanding options at end of year

      5,065,799      $ 4,250,223        —        —   
  

 

 

    

 

 

    

 

 

    

 

 

  
  

 

 

    

 

 

    

 

 

    

 

 

  
                                  
     Calls     Puts  
      Contracts     Premiums
Received		     Contracts      Premiums
Received		  
BUI                          

Outstanding options at beginning of year

      7,021,200      $ 2,530,418        —         —   

Options written

      42,382,481        15,153,082        —         —   

Options expired

      (16,385,896 )      (5,586,533 )      —         —   

Options closed

      (12,598,950 )      (5,207,756 )      —         —   

Options exercised

      (16,619,798 )      (4,744,636 )      —         —   
  

 

 

    

 

 

    

 

 

     

 

 

  

Outstanding options at end of year

      3,799,037      $ 2,144,575        —         —   
  

 

 

    

 

 

    

 

 

     

 

 

  
  

 

 

    

 

 

    

 

 

     

 

 

  
                                   

As of October 31, 2013, the value of portfolio securities subject to covered call options written was as follows:

 

      Value  

BQY

    $ 32,507,498   

BQR

    $ 44,127,527   

BGR

    $ 307,330,930   

CII

    $ 330,034,952   

BDJ

    $ 753,355,046   

BOE

    $ 551,738,609   

BME

    $ 97,283,500   

BGY

    $ 456,907,370   

BCF

    $ 188,610,601   

BCX

    $ 198,865,703   

BUI

    $ 114,791,120   

7. 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, 2013 attributable to foreign currency transactions, the sale of stock of passive foreign investment companies, net operating losses, income recognized from investments in partnerships, distributions paid in excess of taxable income and the accounting for real estate investment trusts were reclassified to the following accounts:

 

 
      BQY     BQR     BGR     CII     BDJ     BOE  

Paid-in capital

      —        —        —        —      $ (35,787,362 )    $ (63,152,174 ) 

Undistributed (distributions in excess of) net investment income

    $ (10,131 )    $ (116,159 )    $ (11,685,748 )    $ 209,076      $ 35,360,583      $ 64,530,228   

Accumulated net realized gain (loss)

    $ 10,131      $ 116,159      $ 11,685,748      $ (209,076 )    $ 426,779      $ (1,378,054 ) 

 

      BME     BGY     BCF     BCX     BUI  

Paid-in capital

      —        —      $ (3,464 )    $ (32,179 )    $ (2,653 ) 

Undistributed (distributions in excess of) net investment income

    $ 4,249      $ 2,784,631      $ 52,477      $ (7,523,748 )    $ (464,651 ) 

Accumulated net realized gain (loss)

    $ (4,249 )    $ (2,784,631 )    $ (49,013 )    $ 7,555,927      $ 467,304   

 

     ANNUAL REPORT    OCTOBER 31, 2013    133

Table of Contents
Notes to Financial Statements (continued)     

 

The tax character of distributions paid during the fiscal years ended October 31, 2013 and October 31, 2012 was as follows:

 

        BQY        BQR        BGR        CII        BDJ        BOE  

Ordinary income

                              

10/31/13

      $ 4,042,418         $ 1,031,216         $ 13,788,843         $ 13,908,365         $ 68,370,120         $ 74,620,843   

10/31/12

      $ 5,480,188         $ 875,247         $ 43,768,559         $ 29,218,120         $ 60,552,719         $ 14,977,529   

Long-term capital gains

                              

10/31/13

        1,628,628           —           34,432,429           —           32,140,223           —   

10/31/12

        2,181,758           —           —           —           —           —   

Return of capital

                              

10/31/13

        —           7,977,500           —           39,037,315           —           11,996,866   

10/31/12

        —           10,214,472           8,858,114           31,669,412           43,164,839           121,035,759   
    

 

 

  

Total

                              

10/31/13

      $ 5,671,046         $ 9,008,716         $ 48,221,272         $ 52,945,680         $ 100,510,343         $ 86,617,709   
    

 

 

  

10/31/12

      $ 7,661,946         $ 11,089,719         $ 52,626,673         $ 60,887,532         $ 103,717,558         $ 136,013,288   
    

 

 

  

 

        BME        BGY        BCF        BCX        BUI  

Ordinary income

                         

10/31/13

      $ 6,308,117         $ 18,226,947         $ 6,692,838         $ 6,452,839         $ 14,081,651   

10/31/12

      $ 9,937,822         $ 19,807,805         $ 37,899,168         $ 12,305,235         $ 15,179,030   

Long-term capital gains

                         

10/31/13

        12,125,678           —           —           —           1,801,216   

10/31/12

        9,187,883           —           576,995           —           —   

Return of capital

                         

10/31/13

        —           55,619,854           43,962,688           47,574,521           8,632,231   

10/31/12

        —           84,445,531           20,806,811           52,900,199           3,207,293   
    

 

 

  

Total

                         

10/31/13

      $ 18,433,795         $ 73,846,801         $ 50,655,526         $ 54,027,360         $ 24,515,098   
    

 

 

  

10/31/12

      $ 19,125,705         $ 104,253,336         $ 59,282,974         $ 65,205,434         $ 18,386,323   
    

 

 

  

As of October 31, 2013, the tax components of accumulated earnings (losses) were as follows:

 

        BQY        BQR      BGR        CII      BDJ      BOE  

Undistributed ordinary income

      $ 423,978           —       $ 24,398,316           —         —         —   

Undistributed long-term capital gains

        133,063           —         60,925,580           —         —         —   

Capital loss carryforwards

        —         $ (36,460,138 )       —         $ (87,874,196 )     $ (116,008,291 )     $ (110,327,643 ) 

Net unrealized gains (losses)1

        3,474,465           (20,866,998 )       139,566,124           40,912,153         112,402,865         115,092,435   
    

 

 

  

Total

      $ 4,031,506         $ (57,327,136 )     $ 224,890,020         $ (46,962,043 )     $ (3,605,426 )     $ 4,764,792   

 

        BME        BGY      BCF      BCX      BUI  

Undistributed ordinary income

      $ 11,148,676           —         —         —         —   

Undistributed long-term capital gains

        6,960,441           —         —         —         —   

Capital loss carryforwards

        —         $ (543,211,607 )     $ (19,517,626 )     $ (105,772,029 )       —   

Net unrealized gains (losses)1

        71,252,621           117,945,748         (15,903,038 )       (25,426,350 )     $ 40,946,804   

Qualified late-year losses2

        —           —         —         (3,951,065 )       —   
    

 

 

  

Total

      $ 89,361,738         $ (425,265,859 )     $ (35,420,664 )     $ (135,149,444 )     $ 40,946,804   

 

  1 

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 unrealized gains on investments in passive foreign investment companies, the timing and recognition of partnership income, the deferral of compensation to Trustees, the treatment of certain security lending transactions and the accounting for real estate investment trusts.

 

  2 

The Trust has elected to defer certain qualified late-year losses and recognize such losses in the year ending October 31, 2014.

 

134    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Notes to Financial Statements (continued)     

 

As of October 31, 2013, 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      BCF      BCX  

2016

      —       $ 2,664,939       $ 29,846,203       $ 72,179,602         —         —         —   

2017

    $ 21,140,114         70,040,876         77,635,340         38,148,041       $ 467,149,104         —         —   

2018

      9,080,494         2,615,197         8,526,748         —         55,605,462         —         —   

2019

      1,795,201         —         —         —         —         —         —   

No expiration date3

      4,444,329         12,553,184         —         —         20,457,041       $ 19,517,626       $ 105,772,029   
  

 

 

  

Total

    $ 36,460,138       $ 87,874,196       $ 116,008,291       $ 110,327,643       $ 543,211,607       $ 19,517,626       $ 105,772,029   

 

3

Must be utilized prior to losses subject to expiration.

During the year ended October 31, 2013, the Trusts listed below utilized the following amounts of their respective capital loss carryforward:

 

BDJ

    $ 80,853,622   

BOE

    $ 83,921,548   

BGY

    $ 46,429,817   

As of October 31, 2013, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:

 

      BQY     BQR     BGR     CII     BDJ     BOE  

Tax cost

    $ 82,799,083      $ 134,344,355      $ 766,465,458      $ 640,960,683      $ 1,524,858,600      $ 1,069,010,853   
  

 

 

  

Gross unrealized appreciation

    $ 4,500,867      $ 17,569,551      $ 142,952,755      $ 52,418,780      $ 129,240,815      $ 136,215,665   

Gross unrealized depreciation

      (504,843 )      (36,104,415 )      (5,265,759 )      (7,116,202 )      (7,576,255 )      (11,744,550 ) 
  

 

 

  

Net unrealized appreciation (depreciation)

    $ 3,996,024      $ (18,534,864 )    $ 137,686,996      $ 45,302,578      $ 121,664,560      $ 124,471,115   

 

      BME     BGY     BCF     BCX     BUI  

Tax cost

    $ 199,228,693      $ 875,017,524      $ 592,724,014      $ 670,073,411      $ 313,865,159   
  

 

 

  

Gross unrealized appreciation

    $ 73,165,444      $ 142,394,252      $ 37,251,268      $ 2,898,554      $ 47,451,204   

Gross unrealized depreciation

      (681,881 )      (9,438,149 )      (43,058,870 )      (27,638,621 )      (1,606,390 ) 
  

 

 

  

Net unrealized appreciation (depreciation)

    $ 72,483,563      $ 132,956,103      $ (5,807,602 )    $ (24,740,067 )    $ 45,844,814   

 

8. 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, 2013, the Trusts listed below invested a significant portion of their assets in securities in the following sectors:

 

Utilities

    BQR, BUI

Energy

    BGR, BCF, BCX, BUI

Information Technology

    CII

Financials

    BDJ

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.

BOE and BGY 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

 

 

     ANNUAL REPORT    OCTOBER 31, 2013    135

Table of Contents
Notes to Financial Statements (concluded)     

 

US. Foreign securities markets may also be less liquid, more volatile, and less subject to governmental supervision not typically associated with investing in United States securities. Please see the Schedules of Investments for concentrations in specific countries.

As of October 31, 2013, the Trusts listed below had the following industry classifications:

 

Industry    BOE     BGY  

Internet Software & Services

      8 %      5 % 

Commercial Banks

      6        11   

Media

      6        5   

Electrical Equipment

      5        1   

Pharmaceuticals

      4        7   

Machinery

      3        6   

Other*

      68        65   

 

  * All other industries held were each less than 5%.

9. 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.

Transactions in common shares of beneficial interest during the year ended October 31, 2013 and the year ended October 31, 2012 were as follows:

 

Trust    Commencement
of Investment
Operations		      Initial
Public
Offering		      Underwriters’
Exercising the
Over-Allotment
Option		  

BUI

      November 25, 2011         15,506,964         1,400,000   

Upon commencement of operations, organization costs associated with the establishment of BUI were expensed by BUI. Offering costs incurred in connection with BUI’s offering of shares have been charged against the proceeds from the initial share offering in the amount of $676,000.

Shares issued and outstanding during the year ended October 31, 2013 and the year ended October 31, 2012 increased by the following amounts as a result of dividend reinvestments:

 

      Year Ended
October 31, 2013		      Year Ended
October 31, 2012		  

BQR

      —         43,408   

BME

      31,115         100,332   

Shares issued and outstanding remained constant for BQY, BGR, CII, BDJ, BOE, BGY, BCF and BCX for the year ended October 31, 2013 and the year ended October 31, 2012.

10. 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 29, 2013 to shareholders of record on November 15, 2013 as follows:

 

      Common
Dividend per
Share		  

BQY

    $ 0.23000   

BOE

    $ 0.31165   

BUI

    $ 0.36250   

Additionally, certain Trusts declared a net investment income dividend and special distribution in the following amounts per share on December 9, 2013 payable to shareholders of record on December 20, 2013 as follows:

 

      Common
Dividend per
Share		  

BQR

    $ 0.179250   

BGR1

    $ 2.905000   

CII

    $ 0.300000   

BDJ

    $ 0.140000   

BME2

    $ 2.339975   

BGY

    $ 0.167850   

BCF

    $ 0.174800   

BCX

    $ 0.231200   

 

  1 

Includes special distribution of which $0.454000 is ordinary income and $2.046000 is long-term capital gains.

  2 

Includes special distribution of which $1.010000 is ordinary income and $0.900000 is long-term capital gains.

 

 

136    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Report of Independent Registered Public Accounting Firm     

 

To the Board of Trustees and Shareholders of BlackRock Dividend Income Trust (formerly known as BlackRock S&P Quality Rankings Global Equity Managed Trust), BlackRock EcoSolutions Investment Trust, BlackRock Energy and Resources Trust, 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, BlackRock Utility and Infrastructure Trust, and the Board of Directors and Shareholders of BlackRock Enhanced Capital and Income Fund, Inc.:

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of BlackRock Dividend Income Trust (formerly known as BlackRock S&P Quality Rankings Global Equity Managed Trust), 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, and BlackRock Utility and Infrastructure Trust, as of October 31, 2013, and the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the two periods presented, and the financial highlights for each of the periods presented. We have also audited the consolidated statement of assets and liabilities, including the consolidated schedule of investments of BlackRock Resources & Commodities Strategy Trust (collectively with BlackRock Dividend Income Trust (formerly known as BlackRock S&P Quality Rankings Global Equity Managed Trust), 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, and BlackRock Utility and Infrastructure Trust, the “Trusts”), as of October 31, 2013, and the related consolidated statements of operations and cash flows for the year then ended, the consolidated statements of changes in net assets for each of the two years in the period then ended, 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 audits to obtain reasonable assurance 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, 2013, 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 BlackRock Dividend Income Trust (formerly known as BlackRock S&P Quality Rankings Global Equity Managed Trust), 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, and BlackRock Utility and Infrastructure Trust, the results of their operations and cash flows for the year then ended, the changes in their net assets and the financial highlights for each of the periods presented, and the consolidated financial position of BlackRock Resources & Commodities Strategy Trust, the consolidated results of its operations and cash flows for the year then ended, the consolidated changes in its net assets for each of the two years in the period then ended, and its 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 23, 2013

 

 

     ANNUAL REPORT    OCTOBER 31, 2013    137

Table of Contents
Important Tax Information (Unaudited)     

 

The following information is provided with respect to the distributions paid during the taxable period ended October 31, 2013.

 

      Payable Date    Long-Term
Capital  Gains		     Non-Taxable
Return of
Capital		     Qualified
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		  

BQY

    11/30/12      23.86 %      —        35.15 %      29.37 %      —        —        —   
   2/28/13 - 8/30/13      30.48 %      —        41.84 %      26.79 %      56.07 %      —        —   

BQR

    12/31/12      —        —        28.65 %      23.48 %      —        —        —   
   3/28/13 - 9/30/13      —        100.00 %      —        —        —        —        —   

BGR

    12/31/12      —        —        13.55 %      9.71 %      —        —        —   
   3/28/13 - 9/30/13      95.21 %      —        1.30 %      0.85 %      4.79 %      —        —   

CII

    12/31/12      —        —        31.47 %      30.75 %      —        —        —   
   3/28/13 - 9/30/13      —        98.31 %      1.69 %      1.69 %      —        —        —   

BDJ

    12/31/12      —        —        39.55 %      39.86 %      —        —        —   
   3/28/13 - 9/30/13      42.64 %      —        43.06 %      37.66 %      —        —        —   

BOE

    11/30/12      —        —        15.47 %      11.67 %      —        —        —   
   2/28/13 - 8/30/13      —        18.47 %      18.52 %      5.84 %      —        10.90 %      1.56 % 

BME

    12/31/12      84.06 %      —        4.54 %      3.89 %      15.25 %      —        —   
   3/28/13 - 9/30/13      45.95 %      —        11.46 %      8.67 %      49.08 %      —        —   

BGY

    12/31/12      —        —        7.54 %      —        —        3.24 %      0.10 % 
   3/28/13 - 9/30/13      —        100.00 %      —        —        —        —        —   

BCF

    12/31/12      —        —        17.23 %      13.15 %      —        —        —   
   3/28/13 - 9/30/13      —        100.00 %      —        —        —        —        —   

BCX

    12/31/12      —        —        15.45 %      6.88 %      —        —        —   
   3/28/13 - 9/30/13      —        100.00 %      —        —        —        —        —   

BUI

    11/30/12      —        —        47.00 %      21.47 %      —        —        —   
   2/28/13 - 8/30/13      9.80 %      46.95 %      37.17 %      23.03 %      29.22 %      —        —   

 

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.

 

138    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement     

 

The Board of Directors or Trustees, as applicable (each, a “Board,” collectively, the “Boards,” and the members of which are referred to as “Board Members”) of BlackRock Dividend Income Trust (“BQY”), 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”) and BlackRock Utility and Infrastructure Trust (“BUI” and together with BQY, BQR, BGR, CII, BDJ, BOE, BME, BGY, BCF and BCX, each a “Fund,” and, collectively, the “Funds”) met in person on April 18, 2013 (the “April Meeting”) and June 4-5, 2013 (the “June Meeting”) 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 of BQY, BQR, BGR, CII, BDJ, BGY, BCF, BCX and BUI also considered the approval of one or more sub-advisory agree-ment(s) (each, a “Sub-Advisory Agreement”) among its Fund, the Manager, and its sub-advisor(s), BlackRock Financial Management, Inc. with respect to BQY, BGR, CII, BDJ and BUI, BlackRock Investment Management, LLC with respect to BQR, CII, BCF and BUI, BlackRock International Ltd. with respect to BQR, BGR, BCF and BCX, and BlackRock Capital Management, Inc. with respect to BGY, BCF and BCX (each, a “Sub-Advisor”). The Manager and the Sub-Advisor 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 each 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 one-day 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-year, three-year, five-year and/or since inception 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; (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 Boards; (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 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 and BlackRock provided an analysis of fair valuation and stale pricing policies. BlackRock also furnished information to the Boards in response to specific questions. These questions covered issues such as BlackRock’s profitability, investment performance and management fee levels. The Boards further considered the importance of: (i) organizational and structural variables to investment performance; (ii) rates of portfolio turnover; (iii) BlackRock’s performance accountability for portfolio managers; (iv) marketing support for the funds; (v) services provided to the Funds by BlackRock affiliates; and (vi) BlackRock’s oversight of relationships with third party service providers.

 

 

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Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement (continued)     

 

Board Considerations in Approving the Agreements

The Approval Process: Prior to the April 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 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 as compared with a peer group of funds as determined by Lipper (“Expense Peers”) and the investment performance of the Funds as compared with a peer group of funds as determined by Lipper1 as well as the investment performance of each of BQY, BGR, CII, BDJ, BOE, BME, BGY and BUI as compared with its custom benchmark; (b) information on the profits realized by BlackRock and its affiliates pursuant to the Agreements and a discussion of fall-out benefits to BlackRock and its affiliates; (c) a general analysis provided by BlackRock concerning investment management fees charged to other clients, such as institutional clients and open-end funds, under similar investment mandates, as applicable; (d) review of non-management fees; (e) the existence, impact and sharing of potential economies of scale; (f) a summary of aggregate amounts paid by each Fund to BlackRock and (g) if applicable, a comparison of management fees to similar BlackRock closed-end funds, as classified by Lipper.

At the April Meeting, the Boards reviewed materials relating to their consideration of the Agreements. As a result of the discussions that occurred during the April 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 June Meeting.

At the June Meeting, each Board, including the Independent Board Members, unanimously approved the continuation of the Advisory Agreement between the Manager and its Fund, and the Board, including the Independent Board Members, of each of BQY, BQR, BGR, CII, BDJ, BGY, BCF, BCX and BUI, unanimously approved the continuation of the Sub-Advisory Agreement among the Manager, the Sub-Advisor, and its Fund, each for a one-year term ending June 30, 2014. 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) the Funds’ costs to investors compared to the costs of Expense Peers and performance compared to the relevant performance comparison as previously discussed; (e) economies of scale; (f) fall-out benefits to BlackRock as a result of its relationship with the Funds; and (g) 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 determinative, 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 the Fund’s performance and the Fund’s investment objective, strategies and outlook.

The Boards considered, among other factors, with respect to BlackRock: the number, education and experience of investment personnel generally and their Funds’ portfolio management teams; investments by portfolio managers in the funds they manage; portfolio trading capabilities; use of technology; commitment to compliance; credit analysis capabilities; risk analysis and oversight capabilities; and the 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 other 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, the summary prospectus (as applicable) 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

 

 

 

1 

Lipper ranks funds in quartiles, ranging from first to fourth, where first is the most desirable quartile position and fourth is the least desirable.

 

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Table of Contents
Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement (continued)     

 

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; (viii) furnishing analytical and other support to assist the Boards in their consideration of strategic issues such as the merger or consolidation of certain closed-end funds; and (ix) 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, shareholder services, legal and compliance departments and considered BlackRock’s policies and procedures for assuring compliance with applicable laws and regulations.

B. The Investment Performance of the Funds and BlackRock

Each Board, including the Independent Board Members, also reviewed and considered the performance history of its Funds. In preparation for the April Meeting, the Boards worked with its independent legal counsel, BlackRock and Lipper to develop a template for, and were 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 other funds in its applicable Lipper category, and with respect to BQY, BGR, CII, BDJ, BOE, BME, BGY and BUI, the investment performance of the Fund as compared with its custom benchmark. 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 BUI noted that BUI’s performance exceeded its customized benchmark during the one-year period reported. BlackRock believes that performance relative to the customized benchmark is an appropriate performance metric for BUI.

The Board of each of BQY, BGR, CII, BDJ, BOE, BME and BGY noted that its respective Fund underperformed its customized benchmark during the one-year period reported. BlackRock believes that performance relative to the customized benchmark is an appropriate performance metric for each of BQY, BGR, CII, BDJ, BOE, BME and BGY. The Board of each of BQY, BGR, CII, BDJ, BOE, BME and BGY and BlackRock reviewed and discussed the reasons for its respective Fund’s underperformance during the one-year period compared to the Fund’s customized benchmark.

The Board of BQY was informed that, among other things, an underweight to financials and stock selection within the sector was the largest detractor from relative returns during the period. Also, negative stock selection in healthcare and consumer discretionary and BQY’s cash

position proved detrimental relative to the customized benchmark returns during the period.

The Board of BGR was informed that, among other things, relative underperformance to the customized benchmark occurred in the first half of 2012, at a time in which the energy sector underperformed the market and was one of the weakest performing sectors in the broad equity market. Exposure weighting to oil, gas and especially coal producers within the strategy hindered performance relative to the customized benchmark during this time.

The Board of CII was informed that, among other things, stock selection was the driving factor behind CII’s underperformance. The largest detractor from performance was an underweight exposure to the financial sector as well as stock selection in the group. In addition, stock selection in information technology and healthcare detracted from returns.

The Board of BDJ was informed that, among other things, the largest detractor from relative performance during the past year was a combination of stock selection and an underweight to the financial sector.

The Board of each of BOE and BGY was informed that, among other things, stock selection in industrials and commodities contributed to its respective Fund’s underperformance compared to the Fund’s customized benchmark.

The Board of BME was informed that, among other things, the largest performance detractor, health care providers and services, was hampered by the team’s overweight allocation to the managed care industry, which declined due to the uncertain business impact from healthcare reform. Furthermore, stock selection in the health care services industry hurt relative performance.

The Board of BQR noted that BQR ranked in the second, fourth and fourth quartiles against its Lipper Performance Universe for the one-, three- and five-year periods reported, respectively. The Board of BQR noted BQR’s improved performance, relative to its peers, during the one-year period. The Board of BQR and BlackRock reviewed and discussed the reasons for the Fund’s underperformance during the three- and five-year periods compared to its Lipper Performance Universe. BQR’s Board was informed that, among other things, over the past three- and five-years on an absolute basis, the new-energy sector was the largest detractor from performance. The new-energy sector underperformed broader markets over this period (as well as the water sector and the agriculture sector). The majority of the underperformance in the new-energy sector was due to exposure to the renewable energy sector.

The Board of BCF noted that BCF ranked in the third, fourth and fourth quartiles against its Lipper Performance Universe for the one-, three- and five-year periods reported, respectively. The Board of BCF and BlackRock reviewed and discussed the reasons for the Fund’s underperformance during these periods compared to its Lipper Performance Universe. BCF’s Board was informed that, among other things, the energy and materials sectors had underperformed most other broad

 

 

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Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement (continued)     

 

market sectors, causing BCF to underperform its sector equity peer universe. The energy segment was flat on the year in terms of absolute performance, but detracted from performance relative to the peer universe as energy was one of the weakest performing sectors in the broad market. Performance among energy subgroups was mixed. Exposure to coal names and oil service names also hindered performance. Over the longer-term three- and five-year periods, the sector allocations to energy and materials were the primary cause for underperformance versus the Lipper Performance Universe.

The Board of BCX noted that BCX ranked in the fourth and third quartiles against its Lipper Performance Universe for the one-year and since-inception periods reported, respectively. The Board of BCX and BlackRock reviewed and discussed the reasons for the Fund’s underperformance during these periods compared to its Lipper Performance Universe. BCX’s Board was informed that, among other things, the energy and materials sectors had underperformed most other broad market sectors, causing BCX to underperform its sector equity Lipper Performance Universe, which includes many funds exposed to stronger-performing sectors. The underperformance of commodity-related sectors has been the key factor in BCX’s underperformance of its peer group since inception. The metals sector had the strongest negative impact on the one-year return. This was largely due to exposure to gold and silver miners, which suffered through much of the year and particularly in the fourth quarter. The energy sleeve was flat on the year in absolute terms, but hindered performance relative to peers as energy was weaker than both the broad market and most other sectors in 2012.

The Board of each of BQY, BQR, BGR, CII, BDJ, BOE, BME, BGY, BCF and BCX and BlackRock also discussed BlackRock’s strategy for improving its respective Fund’s performance and BlackRock’s commitment to providing the resources necessary to assist its respective Fund’s portfolio managers and to improve its respective Fund’s performance.

BlackRock and the Board of each of BGR, CII, BOE, BGY, BCF and BCX previously had concurred, given each Fund’s poor historical performance, in making certain changes within the Fund’s portfolio management team. Both BlackRock and the Board of each of BGR, CII, BOE, BGY, BCF and BCX are hopeful that the change in portfolio management will result in improved performance going forward, although there can be no assurance that will be the case. The Board of each of BGR, CII, BOE, BGY, BCF and BCX will continue to monitor its respective Fund’s performance.

The Board of BQY also noted that BQY will undergo a change in its investment strategy, and in connection with that, changed its name from BlackRock S&P Quality Rankings Global Equity Managed Trust to BlackRock Dividend Income Trust, effective as of August 13, 2013.

The Boards noted that BlackRock has recently made, and continues to make, changes to the organization of BlackRock’s overall portfolio management structure designed to result in strengthened leadership teams.

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. The contractual management fee rate represents a combination of the advisory fee and any administrative fees, before taking into account any reimbursements or fee waivers. Each Board also compared its Fund’s total net operating expense ratio, as well as actual management fee rate, to those of other funds in its Lipper category. The total net operating expense ratio and actual management fee rate both give effect to any expense reimbursements or fee waivers that benefit the funds. The Boards considered the services provided and the fees charged by BlackRock to other types of clients with similar investment mandates, including institutional accounts.

The Boards received and reviewed statements relating to BlackRock’s financial condition. 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, 2012 compared to available aggregate profitability data provided for the prior two years. The Boards reviewed BlackRock’s profitability with respect to certain 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, precision of expense allocations and business mix. As a result, comparing profitability is difficult.

The Boards noted that, in general, individual fund or product line profitability of other advisors is not publicly available. The Boards reviewed BlackRock’s overall operating margin, in general, compared to that of certain 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.

 

 

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Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement (continued)     

 

The Board of each of BQY, CII, BDJ, BME and BUI noted that its respective Fund’s contractual management fee rate ranked in the first quartile relative to the Fund’s Expense Peers.

The Board of each of BGR, BCF, BOE and BCX noted that its respective Fund’s contractual management fee rate ranked in the second quartile relative to the Fund’s Expense Peers.

The Board of each of BQR and BGY noted that its respective Fund’s contractual management fee rate ranked in the second quartile relative to the Fund’s Expense Peers. After discussions between the Board of each of BQR and BGY, including the Independent Board Members, and BlackRock, the Board of BQR and the Board of BGY and BlackRock agreed to a voluntary advisory fee reduction for each Fund, which results in savings to shareholders, effective June 6, 2013.

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 breakpoint 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 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.

The Boards also considered the various notable initiatives and projects BlackRock performed in connection with its closed-end fund product line. These initiatives included completion of the refinancing of auction rate preferred securities; efforts to eliminate product overlap with fund mergers; ongoing services to manage leverage that has become increasingly complex; share repurchases and other support initiatives for certain BlackRock funds; and continued communications efforts with shareholders, fund analysts and financial advisers. With respect to the latter, the Independent Board Members noted BlackRock’s continued commitment to supporting the secondary market for the common shares of its closed-end funds through a comprehensive secondary market communication program designed to raise investor and analyst awareness and understanding of closed-end funds. BlackRock’s support services included, among other things: continuing communications concerning the refinancing efforts related to auction rate preferred securities; sponsoring and participating in conferences; communicating with closed-end fund analysts covering the BlackRock funds throughout the year; providing marketing and product updates for the closed-end funds; and maintaining and enhancing its closed-end fund website.

Conclusion

Each Board, including 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, 2014, and the Board, including the Independent Board Members, of each of BQY, BQR, BGR, CII, BDJ, BGY, BCF, BCX and BUI, unanimously approved the continuation of the Sub-Advisory Agreement among the Manager, the Sub-Advisor, and its Fund, each for a one-year term ending June 30, 2014. 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

 

 

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Table of Contents
Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement (concluded)     

 

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 Trust Company, N.A. (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 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 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 Trust Company, N.A. through the internet at www.computershare.com/blackrock.com, or in writing to Computershare, P.O. Box 43078, Providence, RI 02940-3078, Telephone: (800) 699-1236. Overnight correspondence should be directed to the Reinvestment Plan Agent at 250 Royall Street, Canton MA 02021.

 

 

144    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Officers and Trustees     

 

Name, Address,

and Year of Birth

  

Position(s)
Held with

the 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 products) 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; Faculty Member/Adjunct Lecturer, Harvard University since 2007; President and Chief Executive Officer, The Conference Board, Inc. (global business research organization) from 1995 to 2007.  

28 RICs consisting of

84 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.  

28 RICs consisting of

84 Portfolios

   AtriCure, Inc. (medical devices); Greenhill & Co., Inc.

Michael J. Castellano

55 East 52nd Street

New York, NY 10055

1946

   Trustee and Member of the Audit Committee  

Since

2011

    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. Trustee, Domestic Church Media Foundation since 2012.  

28 RICs consisting of

84 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 2006; 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.  

28 RICs consisting of

84 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.  

28 RICs consisting of

84 Portfolios

   The McClatchy Company (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.  

28 RICs consisting of

84Portfolios

   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 from 2010 to 2012; President and Chief Executive Officer, VWR Scientific Products Corporation from 1990 to 1999.  

28 RICs consisting of

84 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; Faculty member, Columbia Business School since 1988.  

28 RICs consisting of

84 Portfolios

   ADP (data and information services), KKR Financial Corporation (finance), Metropolitan Life Insurance Company (insurance)

 

     ANNUAL REPORT    OCTOBER 31, 2013    145

Table of Contents
Officers and Trustees (continued)     

 

Name, Address,

and Year of Birth

  

Position(s)
Held with

the 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 since 2008. Deputy Dean for Academic Affairs from 2006 to 2010; Chairman of the Finance Unit, 2005 to 2006; Senior Associate Dean and Chairman of the MBA Program from 1999 to 2005; Member of the faculty of Harvard Business School since 1981.  

28 RICs consisting of

84 Portfolios

   None
 

1       Trustees serve until their resignation, removal or death, or until December 31 of the year in which they turn 74. In 2011, 2012 and 2013, the Board of Trustees unanimously approved further extending the mandatory retirement age for James T. Flynn by one additional year, which the Board believes would be in the best interest of shareholders. Mr. Flynn can serve until December of the year in which he turns 75. Mr. Flynn turns 75 in 2014.

 

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, those Trustees first became members of the boards 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.  

147 RICs consisting of

278 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 Administrative 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.  

147 RICs consisting of

278 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 as well as his ownership of BlackRock securities. 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 two complexes of BlackRock registered open-end funds, the BlackRock Equity-Liquidity Complex and the BlackRock Equity-Bond Complex. Trustees of the BlackRock Closed-End Complex 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.

 

146    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Officers and Trustees (continued)     

 

Name, Address,

and Year of Birth

  

Position(s)
Held with

the Trust

  

Length

of Time
Served

as a Trustee

    Principal Occupation(s) During Past Five Years
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 Services 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.

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.

 

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Table of Contents
Officers and Trustees (concluded)     

 

Investment Advisor

BlackRock Advisors, LLC

Wilmington, DE 19809

Sub-Advisors

BlackRock Financial Management, Inc.1

New York, NY 10022

BlackRock Capital Management, Inc.2

Wilmington, DE 19809

BlackRock Investment Management, LLC3

Princeton, NJ 08540

BlackRock International Ltd.4

Edinburgh, EH3 8JB

United Kingdom

Accounting Agent

The Bank of New York Mellon

Brooklyn, NY 11217

 

  1 

For BQY, BGR, CII, BDJ and BUI.

 

  2 

For BGY, BCF and BCX.

 

  3 

For BQR, CII, BCF and BUI.

 

  4 

For BQR, BGR, BCF and BCX.

 

  5 

For all Trusts except CII.

 

  6 

For CII.

Custodians

The Bank of New York Mellon

New York, NY 102865

Brown Brothers, Harriman & Co.

Boston, MA 021096

Transfer Agent

Computershare Trust Company, N.A.

Canton, MA 02021

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

Philadelphia, PA 19103

Legal Counsel

Skadden, Arps, Slate, Meagher & Flom LLP

New York, NY 10036

Address of the Trusts

100 Bellevue Parkway

Wilmington, DE 19809

 

 

148    ANNUAL REPORT    OCTOBER 31, 2013     

Table of Contents
Additional Information     

 

Proxy Results

The Annual Meeting of Shareholders was held on July 30, 2013, for shareholders of record on June 3, 2013, to elect trustee nominees for each Trust. There were no broker non-votes with regard to any of the Trusts.

Approved the Class III Trustees as follows, except for CII:

 

     Richard E. Cavanagh   Kathleen F. Feldstein   Henry Gabbay   Jerrold B. Harris
     Votes For     Votes Withheld     Abstain   Votes For     Votes Withheld     Abstain   Votes For     Votes Withheld     Abstain   Votes For     Votes Withheld     Abstain

BQY

     4,419,899        63,434      0     4,416,512        66,821      0     4,420,811        62,522      0     4,415,678        67,655      0

BQR

     8,645,501        251,776      0     8,633,212        264,065      0     8,641,800        255,477      0     8,628,966        268,311      0

BGR

     23,527,994        761,485      0     23,495,945        793,534      0     23,531,780        757,699      0     23,520,283        769,196      0

BDJ

     154,309,754        3,407,204      0     153,957,579        3,759,379      0     154,282,092        3,434,866      0     154,043,875        3,673,083      0

BOE

     56,652,939        1,790,559      0     56,584,254        1,859,244      0     56,687,771        1,755,727      0     56,626,134        1,817,364      0

BME

     6,572,170        91,415      0     6,569,612        93,973      0     6,568,539        95,046      0     6,569,090        94,495      0

BGY

     90,511,155        3,960,380      0     90,270,437        4,201,098      0     90,483,598        3,987,937      0     90,404,219        4,067,316      0

BCF

     46,375,325        1,421,414      0     46,356,309        1,440,430      0     46,438,721        1,358,018      0     46,343,074        1,453,665      0

BCX

     41,963,114        773,510      0     41,907,237        829,387      0     42,005,677        730,947      0     41,984,113        752,511      0

BUI

     14,952,530        301,061      0     14,970,157        283,434      0     14,949,801        303,790      0     14,947,907        305,684      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, Frank J. Fabozzi, James T. Flynn, R. Glenn Hubbard, W. Carl Kester and Karen P. Robards.

Approved the Directors as follows for CII only:

 

      Votes For      Votes Withheld    Abstain

Paul L. Audet

      37,404,929       2,096,245    0

Michael J. Castellano

      37,249,769       2,251,405    0

Richard E. Cavanagh

      37,360,584       2,140,590    0

Frank J. Fabozzi

      37,604,519       1,896,655    0

Kathleen F. Feldstein

      37,138,934       2,362,240    0

James T. Flynn

      37,267,120       2,234,054    0

Henry Gabbay

      37,641,045       1,860,129    0

Jerrold B. Harris

      37,245,309       2,255,865    0

R. Glenn Hubbard

      37,600,733       1,900,441    0

W. Carl Kester

      37,655,093       1,846,081    0

Karen P. Robards

      37,376,089       2,125,085    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.

 

     ANNUAL REPORT    OCTOBER 31, 2013    149

Table of Contents
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.

On June 4, 2013, the Board of BQY approved changes to certain non-fundamental investment policies of the Trust.

The Board of BQY approved changes to the Trust’s investment policy of investing, under normal market conditions, at least 80% of its assets in equity securities that are included in the Standard & Poor’s Earnings and Dividend Quality Ranking System (“S&P U.S. Quality Rankings”) or the Standard and Poor’s International Quality Rankings System (“S&P International Quality Rankings”) (together, “S&P Quality Rankings”) that are rated at least B+ by Standard & Poor’s®, a division of The McGraw-Hill Companies, Inc. at time of investment. This investment policy has been revised to allow BQY to invest, under normal market conditions, at least 80% of its total assets in dividend paying equity securities. Under BQY’s new investment policy, the Trust is particularly dependent on the analytical abilities of BlackRock.

In addition, the Board of BQY also approved the removal of the Trust’s investment policy of investing, under normal market conditions, at least 40% of its assets in equity securities of non-U.S. issuers. This investment policy has been removed to permit BQY to invest more broadly across both U.S. and non-U.S. issuers.

The Board of BQY has approved the foregoing changes to the investment policies as a consequence of the fundamental analysis-based investment process utilized by BQY’s portfolio managers, under which the application of either (i) the S&P Quality Rankings as an investable universe or (ii) a policy requiring a significant portion of total assets to be invested in non-U.S. equity securities is unduly restrictive in the current market environment. While the proposed changes will no longer reflect the use of a third party “quality-based” rankings system, the BQY’s portfolio management team emphasizes an evaluation of both franchise and management quality as inputs to their fundamental analysis-based investment process. The approved changes will not alter BQY’s investment objective.

BQY was required to provide shareholders 60 days’ notice of the change to the investment policies described above. Accordingly, a notice describing the changes discussed above were mailed to shareholders of record as of June 7, 2013. No action was required by shareholders of BQY in connection with this change. Upon the completion of the 60-day notice period, the changes to BQY’s investment policies became effective and BQY’s name was changed on August 13, 2013 to reflect such changes in the investment policies. BQY continues to trade on the NYSE MKT under its current ticker symbol.

During the period, other than the changes noted above, 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 that were not approved by the shareholders or in the principal risk factors associated with investment in the Trusts. 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) 882-0052.

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) 882-0052.

 

 

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Additional Information (concluded)     

 

 

General Information (concluded)

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) 882-0052; (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) 882-0052 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.

 

 

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 non-taxable 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.

 

 

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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

 

CEF-BK11- 10/13-AR    LOGO

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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:

Michael Castellano

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.

 

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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 Utility and Infrastructure Trust    $50,013    $48,000    $0    $8,000    $14,850    $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    $2,865,000    $2,970,000

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.

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.,

 

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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 Utility and Infrastructure Trust    $14,850    $22,350

Additionally, SSAE 16 Review (Formerly, SAS No. 70) fees for the current and previous fiscal years of $2,865,000 and $2,970,000, 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.

 

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  (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, 2013.
  (a)(1) The registrant is managed by a team of investment professionals comprised of Kathleen Anderson, Managing Director at BlackRock, Robert Shearer, Managing Director at BlackRock, Kyle G. McClements, CFA, Managing Director at BlackRock and Christopher Accettella, Director at BlackRock. Messrs. Shearer, McClements and Accettella and Ms. Anderson 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. Shearer, McClements and Accettella and Ms. Anderson have been members of the Fund’s portfolio management team since 2011.

 

Portfolio Manager   Biography
Kathleen Anderson   Managing Director of BlackRock since 2007; Director of BlackRock from 2006 to 2007; Director of Merrill Lynch Investment Managers, L.P. (“MLIM”) from 2000 to 2006.
Robert Shearer   Managing Director of BlackRock since 2006; Managing Director of MLIM from 2000 to 2006.
Kyle G. McClements, CFA   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   Director of BlackRock since 2008; Vice President of BlackRock, Inc. from 2005 to 2008.

 

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  (a)(2) As of October 31, 2013:

 

     

(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

Kathleen Anderson    11    6    6    0    0    1
     $34.75 Billion    $2.49 Billion    $572.6 Million    $0    $0    $4.24 Million
Robert Shearer    13    6    6    0    0    1
     $35.87 Billion    $2.49 Billion    $572.6 Million    $0    $0    $4.24 Million
Kyle G. McClements, CFA    10    3    0    0    0    0
     $7.01 Billion    $1.22 Billion    $0    $0    $0    $0
Christopher Accettella    10    3    0    0    0    0
     $7.01 Billion    $1.22 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 also be noted that a portfolio manager may be managing certain hedge fund and/or long only accounts, or may be part of a team managing certain hedge fund and/or long only accounts, subject to incentive fees. Such portfolio managers may therefore be entitled to receive a portion of any incentive fees earned on such accounts. Currently, the portfolio managers of this fund are not entitled to receive a portion of incentive fees of other accounts.

 

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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 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, 2013:
  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 BlackRock, Inc.

 

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 Funds 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    Benchmark

Kathleen Anderson

Robert Shearer

    Lipper Equity Income and Lipper Global Natural Resources classification

Christopher Accettella

Kyle McClements

    No Benchmarks

 

 

A smaller element of portfolio manager discretionary compensation may include consideration of: financial results, expense control, profit margins, strategic planning and

 

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  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.
  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. Ms. Anderson and Mr. Shearer have unvested long-term incentive awards.

 

Deferred Compensation Program — A portion of the compensation paid to eligible United States-based 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. Any portfolio manager who is either a managing director or director at BlackRock is eligible to participate 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, Inc. 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 Internal Revenue Service limit ($255,000 for 2013). The RSP offers a range of investment options, including registered investment companies and collective investment funds managed by the firm. BlackRock, Inc. contributions follow the investment direction set by participants for their own contributions or, absent participant investment direction, are invested into a target date fund that corresponds to, or is closest to, the year in which the participant attains age 65. The ESPP allows

 

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  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. All of the eligible portfolio managers are eligible to participate in these plans.
  (a)(4) Beneficial Ownership of Securities – As of October 31, 2013.

 

Portfolio Manager   Dollar Range of Equity Securities
of the  Fund Beneficially Owned		         

Kathleen Anderson

   $100,001 - $500,000         

Robert Shearer

   $50,001 - $100,000         

Kyle McClements, CFA

   $10,001 - $50,000         

Christopher Accettella

   None         

 

  (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

 

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12(c) –

   Notices to the registrant’s common shareholders in accordance with the order under Section 6(c) of the 1940 Act granting an exemption from Section 19(b) of the 1940 Act and Rule 19b-1 under the 1940 Act, dated May 9, 20091

1 The Fund has received exemptive relief from the Securities and Exchange Commission permitting it to make periodic distributions of long-term capital gains with respect to its outstanding common stock as frequently as twelve times each year, and as frequently as distributions are specified by or in accordance with the terms of its outstanding preferred stock. This relief is conditioned, in part, on an undertaking by the Fund to make the disclosures to the holders of the Fund’s common shares, in addition to the information required by Section 19(a) of the 1940 Act and Rule 19a-1 thereunder. The Fund is likewise obligated to file with the SEC the information contained in any such notice to shareholders and, in that regard, has attached hereto copies of each such notice made during the period.

 

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Table of Contents

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 Utility and Infrastructure Trust
By:         /s/ John M. Perlowski
  John M. Perlowski
  Chief Executive Officer (principal executive officer) of
BlackRock Utility and Infrastructure Trust

Date: January 2, 2014

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 Utility and Infrastructure Trust

 

Date: January 2, 2014

By:     /s/ Neal J. Andrews
  Neal J. Andrews
  Chief Financial Officer (principal financial officer) of
BlackRock Utility and Infrastructure Trust

Date: January 2, 2014

 

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