BlackRock Enhanced International Dividend Trust

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: 811-22032

Name of Fund:   BlackRock Enhanced International Dividend Trust (BGY)

Fund Address:   100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Enhanced International Dividend 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: 12/31/2018

Date of reporting period: 12/31/2018


Item 1 – Report to Stockholders


DECEMBER 31, 2018

 

ANNUAL REPORT

  LOGO

 

BlackRock Energy and Resources Trust (BGR)

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

BlackRock Enhanced Equity Dividend Trust (BDJ)

BlackRock Enhanced Global Dividend Trust (BOE)

BlackRock Enhanced International Dividend Trust (BGY)

BlackRock Health Sciences Trust (BME)

BlackRock Resources & Commodities Strategy Trust (BCX)

BlackRock Science and Technology Trust (BST)

BlackRock Utilities, Infrastructure & Power Opportunities Trust (BUI)

 

 

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of each Trust’s shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from BlackRock or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.

You may elect to receive all future reports in paper free of charge. If you hold accounts directly with BlackRock, you can call Computershare at 1-800-699-1236 to request that you continue receiving paper copies of your shareholder reports. If you hold accounts through a financial intermediary, you can follow the instructions included with this disclosure, if applicable, or contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. Please note that not all financial intermediaries may offer this service. Your election to receive reports in paper will apply to all funds advised by BlackRock Advisors, LLC or its affiliates, or all funds held with your financial intermediary, as applicable.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive electronic delivery of shareholder reports and other communications by contacting your financial intermediary, if you hold accounts through a financial intermediary. Please note that not all financial intermediaries may offer this service.

 

 

Not FDIC Insured • May Lose Value • No Bank Guarantee


The Markets in Review

Dear Shareholder,

In the 12 months ended December 31, 2018, concerns about a variety of political risks and a modest slowdown in global growth worked against the equity market despite solid corporate earnings, while rising interest rates constrained bond returns. Though the market’s appetite for risk remained healthy for most of the reporting period, risk-taking declined sharply later in the reporting period. As a result, bonds held their value better than stocks, which posted negative returns across the globe. Shorter-term, higher-quality securities led the bond market, and U.S. equities outperformed most international stock markets.

Volatility rose in emerging market stocks, as the rising U.S. dollar and higher interest rates in the U.S. disrupted economic growth abroad. U.S.-China trade relations and debt concerns adversely affected the Chinese stock market, while Turkey and Argentina became embroiled in currency crises, largely due to hyperinflation in both countries. An economic slowdown in Europe also led to negative performance for European equities.

In fixed income markets, short-term U.S. Treasury interest rates rose the fastest, while longer-term rates slightly increased. This led to a negative return for long-term U.S. Treasuries and a substantial flattening of the yield curve. Many investors are concerned with the flattening yield curve as a harbinger of recession. However, given the extraordinary monetary measures in the last decade, we believe a more accurate barometer for the economy is the returns along the risk spectrums in stock and bond markets. Although the fundamentals in credit markets remained relatively solid, investment-grade bonds posted flat returns, and high-yield bonds declined slightly. Recent sell-offs in risk assets have flattened asset returns along the risk spectrum somewhat, which bears further scrutiny in the months ahead.

In response to rising growth and inflation, the U.S. Federal Reserve (the “Fed”) increased short-term interest rates four times during the reporting period. The Fed also continued to reduce its balance sheet, gradually reversing the unprecedented stimulus measures it enacted after the financial crisis. By our estimation, the Fed’s neutral interest rate, or the theoretical rate that is neither stimulative nor restrictive to the economy, is approximately 3.0%. With that perspective, the Fed’s current policy is still mildly stimulative to the U.S. economy, which leaves room for further Fed rate hikes to arrive at monetary policy that is a neutral factor for economic growth.

Volatility in the U.S. equity market spiked in October, as a wide range of risks were brought to bear on markets, ranging from rising interest rates and slowing global growth to heightened trade tensions and political turmoil in several countries, including the United States. This was accompanied by a broad based risk-off in December — which was the worst December performance on record since 1931. Although fears of recession drove equity volatility higher at the end of 2018, we continue to believe the probability of recession in 2019 remains relatively low.

Economic growth and global earnings are likely to slow somewhat in 2019 — the tax cut stimulus will be less pronounced, and the Fed’s rate hikes in 2018 will gain traction in 2019. Trade frictions look more baked into asset prices than a year ago, but markets may be overlooking European political risks. Consequently, we are cautious on European equities, as European unity remains tenuous with a history of flare-ups. We continue to prefer to take risk in U.S. and emerging market equities. Within U.S. equities, we believe that companies with high-quality earnings and strong balance sheets offer the most attractive risk/reward trade-off. Going into 2019, we also favor short-term bonds over long-term bonds because they offer nearly equivalent yields with far lower volatility.

In this environment, investors need to think globally, extend their scope across a broad array of asset classes, and be nimble as market conditions change. We encourage you to talk with your financial advisor and visit blackrock.com for further insight about investing in today’s markets.

Sincerely,

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

Total Returns as of December 31, 2018
     6-month   12-month

U.S. large cap equities
(S&P 500® Index)

  (6.85)%   (4.38)%

U.S. small cap equities
(Russell 2000® Index)

  (17.35)   (11.01)

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

  (11.35)   (13.79)

Emerging market equities
(MSCI Emerging Markets Index)

  (8.48)   (14.57)

3-month Treasury bills
(ICE BofAML 3-Month
U.S. Treasury Bill Index)

  1.06   1.87

U.S. Treasury securities
(ICE BofAML 10-Year
U.S. Treasury Index)

  2.72   (0.03)

U.S. investment grade bonds
(Bloomberg Barclays U.S.
Aggregate Bond Index)

  1.65   0.01

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

  1.38   1.36

U.S. high yield bonds
(Bloomberg Barclays
U.S. Corporate High Yield
2% Issuer Capped Index)

  (2.24)   (2.08)
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.
 

 

 

2    THIS PAGE IS NOT PART OF YOUR FUND REPORT


Supplemental Information  (unaudited)

 

Section 19(a) Notices

BlackRock Energy and Resources Trust’s (BGR), BlackRock Enhanced Capital and Income Fund, Inc.’s (CII), BlackRock Enhanced Equity Dividend Trust’s (BDJ), BlackRock Enhanced Global Dividend Trust’s (BOE), BlackRock Enhanced International Dividend Trust’s (BGY), BlackRock Health Sciences Trust’s (BME), BlackRock Resources & Commodities Strategy Trust’s (BCX), BlackRock Science and Technology Trust’s (BST) and BlackRock Utilities, Infrastructure & Power Opportunities Trust’s (BUI) (each, a “Trust” and collectively, the “Trusts”), amounts and sources of distributions reported are estimates and are being provided to you pursuant to regulatory requirements 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 its fiscal year and may be subject to changes based on tax regulations. Each Trust will provide a Form 1099-DIV each calendar year that will tell you how to report these distributions for U.S. federal income tax purposes.

December 31, 2018

 

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

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
 

BGR*

  $ 0.272552     $     $     $ 0.658648     $ 0.931200       29             71     100

CII*

    0.165678             0.128622       0.699300       0.993600       17             13       70       100  

BDJ

    0.177394             0.383006             0.560400       32             68             100  

BOE*

    0.295560                   0.550440       0.846000       35                   65       100  

BGY

    0.162370             0.281030             0.443400       37             63             100  

BME*

    0.069995             1.590526       0.739479       2.400000       3             66       31       100  

BCX*

    0.209697                   0.409503       0.619200       34                   66       100  

BST

                1.760278             1.760278                   100             100  

BUI*

    0.474884                   0.977116       1.452000       33                   67       100  

 

  *

Certain Trusts estimate that 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.” When distributions exceed total return performance, the difference will reduce the Trust’s net asset value per share.

 

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

Section 19(b) Disclosure

The Trusts, acting pursuant to a U.S. 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 distribute the following fixed amounts per share on a monthly basis as of December 31, 2018:

 

Exchange Symbol   Amount Per
Common Share
 

BGR

  $ 0.0776  

CII

    0.0828  

BDJ

    0.0467  

BOE

    0.0630  

BGY

    0.0338  

BME

    0.2000  

BCX

    0.0516  

BST

    0.1500  

BUI

    0.1210  

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 monthly basis, the Trusts will distribute long-term capital gains and/or return of capital to shareholders in order to maintain a level distribution. Each monthly 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 at any time without prior notice to the Trust’s shareholders 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 BME’s prospectus for a more complete description of its risks.

 

 

SUPPLEMENTAL INFORMATION      3  


Table of Contents

 

      Page   

The Markets in Review

     2  

Section 19(a) Notices

     3  

Section 19(b) Disclosure

     3  

Annual Report:

  

The Benefits and Risks of Option Over-Writing

     5  

Trust Information

     6  

Derivative Financial Instruments

     24  

Financial Statements:

  

Schedules of Investments

     25  

Statements of Assets and Liabilities

     96  

Statements of Operations

     98  

Statements of Changes in Net Assets

     100  

Statements of Cash Flows

     105  

Financial Highlights

     107  

Notes to Financial Statements

     116  

Report of Independent Registered Public Accounting Firm

     128  

Important Tax Information

     129  

Automatic Dividend Reinvestment Plans

     130  

Trustee and Officer Information

     131  

Additional Information

     134  

Glossary of Terms Used in this Report

     137  

 

 

4        


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 the Trusts’ distribution rate 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 may elect to exercise the option if the market value of the equity security rises above the strike price, and the Trust is obligated to sell the equity security to the counterparty at the strike price, realizing a gain or loss. Premiums received increase gains or reduce losses realized on the sale of the equity security. If the option remains unexercised upon its expiration, the Trusts realize gains equal to the premiums received. Alternatively, an option may be closed out by an offsetting purchase or sale of an option prior to expiration. The Trust realizes a capital gain from a closing purchase or sale transaction if the premium paid is less than the premium received from writing the option. The Trust realizes a capital loss from a closing purchase or sale transaction if the premium received is less than the premium paid to purchase the option.

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 may result in a sale below the current market value and a gain or loss being realized by the Trust; and limiting 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 reduces 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 can 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. Such distributions are reported as distributions in excess of net investment income.

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 or as distributions in excess of net investment income for U.S. federal 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 expires 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.

 

 

THE BENEFITS AND RISKS OF OPTION OVER-WRITING      5  


Trust Information  as of December 31, 2018    BlackRock Energy and Resources Trust

 

Investment Objective

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 seeks to pursue this goal primarily by investing in a portfolio of equity securities and utilizing an option over-writing strategy in an effort to seek total return performance and enhance distributions.

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

Trust Information

 

Symbol on New York Stock Exchange (“NYSE”)

  BGR

Initial Offering Date

  December 29, 2004

Current Distribution Rate on Closing Market Price as of December 31, 2018 ($10.45)(a)

  8.91%

Current Monthly Distribution per Common Share(b)

  $0.0776

Current Annualized Distribution per Common Share(b)

  $0.9312

 

  (a) 

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 return of capital. See the Financial Highlights for the actual sources and character of distributions. Past performance does not guarantee future results.

 
  (b) 

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

 

Performance and Portfolio Management Commentary

Returns for the 12-month period ended December 31, 2018 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BGR(a)(b)

    (21.16 )%       (18.84 )% 

Lipper Natural Resources Funds(c)

    (24.64      (19.04

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b) 

The Trust’s discount to NAV widened during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c)

Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend date as calculated by Lipper.

 

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s absolute performance based on NAV:

What factors influenced performance?

Energy stocks fell sharply in 2018. After moving sideways in a range through the first nine months of the year, the combination of a downturn in oil prices and a broad-based decline in global equities caused the sector to post a sizable loss in the fourth quarter.

Although many U.S.-based exploration and production (“E&P”) companies demonstrated improving fundamentals in 2018, the industry was hit particularly hard in the fourth quarter selloff. Encana Corp, which was penalized for its acquisition of Newfield Exploration, was the Trust’s largest detractor in the E&P industry. Devon Energy Corp., Cimarex Energy Co., Canadian Natural Resources Ltd. and EQT Corp. were also notable detractors in the period.

Companies demonstrating capital discipline, including ConocoPhillips, generally performed well despite the broadly challenging environment. The stock, which posted a gain even as the sector as a whole lost ground, was one of the leading contributors to the Trust’s performance. A position in the U.S. refining company Andeavor was another top contributor. Early in the period, Marathon Petroleum Corp. launched a bid for Andeavor at a substantial premium to its price at the time, causing the stock to rally.

The Trust made use of options, principally written call options on individual stocks, in order to seek enhanced income returns while continuing to participate in the performance of the underlying equities. The option overlay strategy contributed to performance.

Describe recent portfolio activity

Consistent with the investment adviser’s long-term approach, there was a relatively low amount of portfolio turnover in 2018. However, the investment adviser was active in selling stocks that reached its price targets and rotating into those that offered more attractive valuations. Late in the year, the investment adviser sought to take advantage of the selloff in the refining stocks by increasing its allocation to this area. The Trust also continued to increase its allocation to non-U.S. energy stocks. While the Trust remains overweight to the E&P sub-sector, it reduced the position and increased its weighting in the integrated oil & gas industry to capitalize on its attractive valuations.

Describe portfolio positioning at period end.

The integrated energy subsector represented the Trust’s largest allocation, followed by the E&P, distribution, oil services, and refining & marketing industries, respectively.

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    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Trust Information  as of December 31, 2018 (continued)    BlackRock Energy and Resources Trust

 

Market Price and Net Asset Value Per Share Summary

 

     12/31/18     

12/31/17

     Change      High      Low  

Market Price

  $ 10.45      $ 14.18        (26.30 )%     $ 15.76      $ 9.89  

Net Asset Value

    11.98        15.79        (24.13      16.54        11.35  

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

 

LOGO

Overview of the Trust’s Total Investments *

 

TEN LARGEST HOLDINGS

 

Security   12/31/18  

Royal Dutch Shell PLC — ADR

    12

Exxon Mobil Corp.

    10  

BP PLC

    8  

TOTAL SA

    7  

ConocoPhillips

    5  

Suncor Energy, Inc.

    5  

Chevron Corp.

    4  

Valero Energy Corp.

    4  

Marathon Petroleum Corp.

    4  

Williams Cos., Inc.

    3  

 

  *

Excludes option positions and money market funds.

 

INDUSTRY ALLOCATION

 

Industry   12/31/18    

12/31/17

 

Oil, Gas & Consumable Fuels

    94     90

Energy Equipment & Services

    6       10  

 

 

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

 
 

 

 

TRUST INFORMATION      7  


Trust Information  as of December 31, 2018    BlackRock Enhanced Capital and Income Fund, Inc.

 

Investment Objective

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 securities of U.S. and foreign issuers. The Trust may invest directly in such securities or synthetically through the use of derivatives. The Trust also seeks to achieve its investment policy by employing a strategy of writing (selling) call and put options.

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

Trust Information

 

Symbol on NYSE

  CII

Initial Offering Date

  April 30, 2004

Current Distribution Rate on Closing Market Price as of December 31, 2018 ($14.08)(a)

  7.06%

Current Monthly Distribution per Common Share(b)

  $0.0828

Current Annualized Distribution per Common Share(b)

  $0.9936

 

  (a) 

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 return of capital. See the Financial Highlights for the actual sources and character of distributions. Past performance does not guarantee future results.

 
  (b) 

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

 

The following discussion relates to the Trust’s relative performance based on the index cited above:

Performance and Portfolio Management Commentary

Returns for the 12 months period ended December 31, 2018 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

CII(a)(b)

    (8.56 )%       (5.44 )% 

S&P 500® Index

    N/A        (4.38

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b) 

The Trust’s discount to NAV widened during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 

N/A — Not applicable as the index does not have a market price.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

What factors influenced performance?

In the equity allocation of the Trust, the largest detractor from relative performance for the 12-month period was stock selection in the consumer discretionary sector. Most notably, positioning across homebuilders and underweight exposure to internet and direct marketing retail challenged relative performance. This was followed by positioning in materials, where packaging and chemical holdings produced weakness. Finally, exposure to the electric utility industry hurt relative results in the utilities sector.

In the equity allocation of the Trust, the largest contributor to performance for the 12-month period was stock selection in the information technology (“IT”) sector. Specifically, selection decisions in software names provided strong relative returns. In industrials, positioning in machinery and rail roads enhanced relative performance. Finally, stock selection within energy provided outperformance, most notably avoiding energy equipment and services names.

The Trust utilized an options overlay strategy in which calls are written on a portion of the portfolio’s holdings. Premiums generated are recognized as current gains which are intended to enhance distributions payable to shareholders in the form of dividends. The use of options contributed to relative performance during the period.

Describe recent portfolio activity.

During the 12-month period, the Trust significantly boosted exposure to the health care sector. Holdings within consumer staples and energy also were increased. Conversely, the Trust significantly reduced exposure to the financials sector. The Trust also reduced exposure to consumer discretionary and materials stocks.

Describe portfolio positioning at period end.

The Trust’s largest allocations were in the IT, health care and financials sectors. Relative to the benchmark, the Trust’s largest overweight positions were in the health care, materials, energy and financials sectors. Conversely, the Trust’s largest relative underweights were in the real estate, industrials, and consumer staples sectors.

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    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Trust Information  as of December 31, 2018 (continued)    BlackRock Enhanced Capital and Income Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary

 

     12/31/18     

12/31/17

     Change      High      Low  

Market Price

  $ 14.08      $ 16.38        (14.04 )%     $ 17.36      $ 13.13  

Net Asset Value

    15.28        17.19        (11.11      18.07        14.40  

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

 

LOGO

Overview of the Trust’s Total Investments *

 

TEN LARGEST HOLDINGS

 

Security   12/31/18  

Microsoft Corp.

    6

Apple, Inc.

    5  

Alphabet, Inc.

    5  

Pfizer, Inc.

    3  

JPMorgan Chase & Co.

    3  

Cisco Systems, Inc.

    3  

Bank of America Corp.

    3  

Comcast Corp.

    3  

Walmart, Inc.

    3  

UnitedHealth Group, Inc.

    3  

 

  *

Excludes option positions and money market funds.

 

SECTOR ALLOCATION

 

Sector   12/31/18    

12/31/17

 

Information Technology

    20     26

Health Care

    18       16  

Financials

    15       17  

Consumer Discretionary

    10       14  

Communication Services

    9        

Industrials

    7       7  

Consumer Staples

    7       6  

Energy

    6       6  

Materials

    5       5  

Utilities

    3       3  

 

 

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

 
 

 

 

TRUST INFORMATION      9  


Trust Information  as of December 31, 2018    BlackRock Enhanced Equity Dividend Trust

 

Investment Objective

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 seek total return performance and enhance distributions. 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.

Trust Information

 

Symbol on NYSE

  BDJ

Initial Offering Date

  August 31, 2005

Current Distribution Rate on Closing Market Price as of December 31, 2018 ($7.77)(a)

  7.21%

Current Monthly Distribution per Common Share(b)

  $0.0467

Current Annualized Distribution per Common Share(b)

  $0.5604

 

  (a) 

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 return of capital. See the Financial Highlights for the actual sources and character of distributions. Past performance does not guarantee future results.

 
  (b) 

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

 

Performance and Portfolio Management Commentary

Returns for the 12-month period ended December 31, 2018 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BDJ(a)(b)

    (10.39 )%       (6.59 )% 

Russell 1000® Value Index

    N/A        (8.27

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b)

The Trust’s discount to NAV widened during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 

N/A — Not applicable as the index does not have a market price.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s relative performance based on the index cited above:

What factors influenced performance?

The largest contributor to relative performance for the 12-month period came from an overweight position and stock selection within the health care sector. Notably, stock selection within and an overweight to the pharmaceuticals industry proved beneficial, as did an overweight to the health care providers & services industry. Within information technology (“IT”), a combination of stock selection and an overweight to the software industry boosted relative return, as did stock selection in the electronic equipment industry. Other notable contributors included stock selection within communication services and consumer staples.

The largest detractor from relative performance derived from a combination of stock selection and allocation decisions within financials. In particular, stock selection in the insurance and capital markets industries detracted, as did an overweight to banks and an underweight to the diversified financial services industry. Within utilities, stock selection in the electric utilities segment was particularly weak due to the impact on portfolio holdings from severe California wildfires. The portfolio’s lack of exposure to real estate also hindered relative return as the sector outperformed the broader U.S. equity market. Lastly, an overweight to construction materials as well as stock selection in the containers & packaging industry constrained results within the materials sector.

The Trust utilized an options overlay strategy in which calls are written on a portion of the portfolio’s holdings. Premiums generated are recognized as current gains that are intended to enhance distributions payable to shareholders in the form of dividends. The use of options had a positive effect on performance.

Describe recent portfolio activity.

During the 12-month period, a combination of portfolio trading activity and market price changes resulted in increased exposure to the communication services, health care and IT sectors. Conversely, exposures to financials, industrials and utilities were reduced.

Describe portfolio positioning at period end.

The Trust’s largest allocations were in the financials, health care and IT sectors. Relative to the benchmark, the Trust’s largest overweight positions were in the health care, IT and financials sectors. Conversely, the Trust’s largest relative underweights were in the real estate, consumer discretionary and utilities sectors.

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    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Trust Information  as of December 31, 2018 (continued)    BlackRock Enhanced Equity Dividend Trust

 

Market Price and Net Asset Value Per Share Summary

 

     12/31/18     

12/31/17

     Change      High      Low  

Market Price

  $ 7.77      $ 9.23        (15.82 )%     $ 9.64      $ 7.24  

Net Asset Value

    8.74        9.96        (12.25      10.42        8.30  

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

 

LOGO

Overview of the Trust’s Total Investments *

 

TEN LARGEST HOLDINGS

 

Security   12/31/18  

Verizon Communications, Inc.

    4

Pfizer, Inc.

    4  

JPMorgan Chase & Co.

    4  

Wells Fargo & Co.

    4  

Citigroup, Inc.

    3  

Bank of America Corp.

    3  

Anthem, Inc.

    3  

Oracle Corp.

    3  

Microsoft Corp.

    2  

AstraZeneca PLC

    2  

 

  *

Excludes option positions and money market funds.

 
   

SECTOR ALLOCATION

 

Sector   12/31/18    

12/31/17

 

Financials

    25     29

Health Care

    23       19  

Information Technology

    12       10  

Energy

    11       12  

Consumer Staples

    7       7  

Communication Services

    7       3  

Industrials

    6       8  

Utilities

    4       5  

Consumer Discretionary

    3       4  

Materials

    2       3  

 

 

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

 
 

 

 

TRUST INFORMATION      11  


Trust Information  as of December 31, 2018    BlackRock Enhanced Global Dividend Trust

 

Investment Objective

BlackRock Enhanced Global Dividend 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 seek total return performance and enhance distributions. Under normal circumstances, the Trust invests at least 80% of its net assets in dividend-paying equity securities and at least 40% of its assets outside of the U.S. (unless market conditions are not deemed favorable by Trust management, in which case the Trust would invest at least 30% of its assets outside of the U.S.). The Trust may invest in securities of companies of any market capitalization, but intends to invest primarily in securities of large capitalization companies. 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.

Trust Information

 

Symbol on NYSE

  BOE

Initial Offering Date

  May 31, 2005

Current Distribution Rate on Closing Market Price as of December 31, 2018 ($9.37)(a)

  8.07%

Current Monthly Distribution per Common Share(b)

  $0.0630

Current Annualized Distribution per Common Share(b)

  $0.7560

 

  (a) 

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 return of capital. See the Financial Highlights for the actual sources and character of distributions. Past performance does not guarantee future results.

 
  (b) 

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

 

Performance and Portfolio Management Commentary

Returns for the 12-month period ended December 31, 2018 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BOE(a)(b)

    (19.16 )%       (9.63 )% 

MSCI All Country World Index

    N/A        (9.41

 

  (a)

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b)

The Trust’s discount to NAV widened during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 

N/A — Not applicable as the index does not have a market price.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s relative performance based on the index cited above:

What factors influenced performance?

Positioning with respect to consumer staples was the largest detractor from performance, as both security selection within and an overweight to the sector weighed on returns. Stock selection in industrials, mainly within the air freight and logistics industry, also detracted, as did a lack of exposure to the utilities sector. In terms of individual stocks, a position in British American Tobacco PLC was the most significant detractor from returns. Tobacco stocks have suffered from negative sentiment driven by the FDA’s announcement that it would be looking to limit nicotine levels in traditional cigarettes along with questions about “Next Generation” smoking products. Positions in the postal and international courier companies Deutsche Post AG (Germany) and Bpost SA (Belgium) detracted due to higher costs for European postal companies. The investment adviser remains positive with respect to the longer-term prospects for both companies based on double-digit parcel growth domestically, driven by e-commerce.

During the 12-month period, the Trust’s significant overweight to and stock selection within the health care sector contributed to returns, particularly among pharmaceutical stocks. Stock selection in the newly created communication services sector also contributed, mostly due to the portfolio’s positioning in wireless telecommunication services names. Additionally, stock selection in consumer discretionary added value. On an individual security basis, the Trust’s position in the technology conglomerate Cisco Systems, Inc. was the top contributor to performance as the company reported earnings that exceeded analysts’ expectations and announced a share buyback plan that was viewed favorably by investors. In addition, holdings in the consumer goods firm Procter & Gamble Co. contributed to relative performance as the company’s internally generated revenue growth gained positive momentum throughout the year. The Trust’s position in the beverage firm Coca-Cola Co. also was a top contributor for the period, based on strong financial results and signs of accelerating growth.

The Trust made use of options, principally written call options on individual stocks, in order to seek enhanced income returns while continuing to participate in the performance of the underlying equities. The Trust’s options writing strategy contributed to performance.

 

 

12    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Trust Information  as of December 31, 2018 (continued)    BlackRock Enhanced Global Dividend Trust

 

Describe recent portfolio activity.

The Trust’s allocation to tobacco stocks was reduced in May, with the proceeds reinvested in high quality, dividend-paying names where the investment adviser has high conviction. These areas included health care, consumer staples and industrials stocks.

Describe portfolio positioning at period end.

At period end, the Trust’s largest sector overweight positions were in the consumer staples and health care sectors, with an emphasis on the tobacco and pharmaceuticals industries, respectively. The largest underweights were to financials and energy. The Trust had no exposure to real estate, utilities or energy at the end of the period. From a regional perspective, a majority of portfolio assets was invested either within the United States or Europe, with significant exposure in the United Kingdom and Switzerland.

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.

Market Price and Net Asset Value Per Share Summary

 

     12/31/18     

12/31/17

     Change      High      Low  

Market Price

  $ 9.37      $ 12.51        (25.10 )%     $ 13.08      $ 9.10  

Net Asset Value

    11.07        13.22        (16.26      13.71        10.70  

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

 

LOGO

Overview of the Trust’s Total Investments *

 

TEN LARGEST HOLDINGS

 

Security  

12/31/18

 

TELUS Corp.

    3

Rogers Communications, Inc., Class B

    3  

Cisco Systems, Inc.

    3  

Kone OYJ, Class B

    3  

Johnson & Johnson

    3  

Amcor Ltd.

    3  

Altria Group, Inc.

    3  

Genuine Parts Co.

    3  

Coca-Cola Co.

    3  

PepsiCo, Inc.

    3  

 

  *

Excludes option positions and money market funds.

 
   
   
   

GEOGRAPHIC ALLOCATION

 

Country   12/31/18     12/31/17  

United States

    43     42

United Kingdom

    16       16  

Canada

    7       6  

Switzerland

    6       10  

Australia

    6       4  

France

    4       3  

Finland

    3       2  

Singapore

    3        

Netherlands

    2        

Germany

    2       3  

Taiwan

    2       3  

Sweden

    1       2  

Ireland

    1        

Denmark

    1        

India

    1       (a)  

Japan

    (a)       2  

Belgium

          2  

Other

    2 (b)       5 (c)  

 

  (a) 

Representing less than 1% of the Trust’s total investments.

 
  (b) 

Other includes a 1% holding or less in each of the following countries:

 
  China

and Japan.

 
  (c) 

Other includes a 1% holding or less in each of the following countries: Denmark, Hong Kong, India, Italy, Netherlands and Spain.

 
 

 

 

TRUST INFORMATION      13  


Trust Information  as of December 31, 2018    BlackRock Enhanced International Dividend Trust

 

Investment Objective

BlackRock Enhanced International Dividend 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 seek total return performance and enhance distributions. The Trust invests, under normal circumstances, at least 80% of its net assets in dividend-paying equity securities issued by non-U.S. companies of any market capitalization, but intends to invest primarily in securities of large capitalization companies. 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.

Trust Information

 

Symbol on NYSE

  BGY

Initial Offering Date

  May 30, 2007

Current Distribution Rate on Closing Market Price as of as of December 31, 2018 ($4.98)(a)

  8.14%

Current Monthly Distribution per Common Share(b)

  $0.0338

Current Annualized Distribution per Common Share(b)

  $0.4056

 

  (a) 

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 return of capital. See the Financial Highlights for the actual sources and character of distributions. Past performance does not guarantee future results.

 
  (b) 

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

 

Performance and Portfolio Management Commentary

Returns for the 12-month period ended December 31, 2018 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BGY(a)(b)

    (17.55 )%       (11.48 )% 

MSCI All Country World Index ex-USA

    N/A        (14.20

 

  (a)

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b)

The Trust’s discount to NAV widened during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 

N/A — Not applicable as the index does not have a market price.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s relative performance based on the index cited above:

What factors influenced performance?

The largest contribution to the Trust’s relative performance during the 12-month period came from stock selection within information technology (“IT”), led by a position in the multinational IT company Microsoft Corp. Performance was also helped by stock selection within and an overweight to the health care sector. The largest contributor to performance by region was the Trust’s exposure to Canadian equities.

Conversely, security selection within consumer staples, in particular tobacco companies, detracted from performance. Stock selection in industrials and a lack of exposure to utility stocks also weighed on returns. The largest detractor by region came from exposure to U.K. securities.

During the period, the Trust made use of options, principally written call options on individual stocks, in order to seek enhanced income returns while continuing to participate in the performance of the underlying equities. The Trust’s option writing strategy contributed to performance.

Describe recent portfolio activity.

The Trust reduced exposure to the tobacco industry during the period, and added exposure to industrials.

Describe portfolio positioning at period end.

At period end, the Trust held large absolute positions within the consumer staples, industrials and health care industries. The Trust had no holdings within the real estate, utilities or energy sectors.

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    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Trust Information  as of December 31, 2018 (continued)    BlackRock Enhanced International Dividend Trust

 

Market Price and Net Asset Value Per Share Summary

 

     12/31/18     

12/31/17

     Change      High      Low  

Market Price

  $ 4.98      $ 6.52        (23.62 )%     $ 6.85      $ 4.78  

Net Asset Value

    5.79        7.06        (17.99      7.32        5.65  

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

 

 

LOGO

Overview of the Trust’s Total Investments *

 

TEN LARGEST HOLDINGS

 

Security   12/31/18  

TELUS Corp.

    5

Rogers Communications, Inc., Class B

    5  

Kone OYJ, Class B

    5  

Imperial Brands PLC

    5  

Amcor Ltd.

    5  

Nestle SA

    4  

GlaxoSmithKline PLC

    4  

Novartis AG, Registered Shares

    4  

Deutsche Post AG, Registered Shares

    4  

Unilever PLC

    4  

 

  *

Excludes option positions and money market funds.

 

GEOGRAPHIC ALLOCATION

 

Country   12/31/18     12/31/17  

United Kingdom

    28     19

Canada

    11       7  

Switzerland

    10       12  

Australia

    9       5  

France

    6       6  

Finland

    5       2  

United States

    5       6  

Netherlands

    4       6  

Germany

    4       5  

Taiwan

    3       3  

Singapore

    3        

Sweden

    3       3  

China

    3       6  

Denmark

    2       2  

India

    2       2  

Japan

    2       5  

Belgium

          3  

Hong Kong

          2  

South Africa

          2  

South Korea

          2  

Other

          2 (a)  

 

  (a) 

Other includes a 1% holding or less in each of the following countries: Ireland and Portugal.

 
 

 

 

TRUST INFORMATION      15  


Trust Information  as of December 31, 2018    BlackRock Health Sciences Trust

 

Investment Objective

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 total 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 seeks to pursue this goal primarily by investing in a portfolio of equity securities and utilizing an option over-writing strategy in an effort to seek total return performance and enhance distributions.

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

Trust Information

 

Symbol on NYSE

  BME

Initial Offering Date

  March 31, 2005

Current Distribution Rate on Closing Market Price as of December 31, 2018 ($36.45)(a)

  6.58%

Current Monthly Distribution per Common Share(b)

  $0.2000

Current Annualized Distribution per Common Share(b)

  $2.4000

 

  (a) 

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 return of capital. See the Financial Highlights for the actual sources and character of distributions. Past performance does not guarantee future results.

 
  (b) 

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

 

Performance and Portfolio Management Commentary

Returns for the 12 months period ended December 31, 2018 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BME(a)(b)

    6.57      7.26

Russell 3000® Healthcare Index

    N/A        5.63  

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b) 

The Trust’s premium to NAV narrowed during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 

N/A — Not applicable as the index does not have a market price.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s relative performance based on the index cited above:

What factors influenced performance?

Although the broader global equity markets lost ground in 2018, health care stocks registered a gain. The sector performed well late in the year, as its defensive qualities and solid earnings prospects helped it hold up well in a time of elevated volatility.

Stock selection across all four of the underlying sub-sectors was the primary contributor to the Trust’s strong relative performance in 2018. An underweight position in Johnson & Johnson was the largest individual contributor in both the pharmaceuticals industry and the portfolio as a whole. The stock came under pressure late in the year after a report suggested that Johnson & Johnson knew about asbestos in its baby powder for decades.

An overweight position in Boston Scientific Corp. was a key contributor in the medical devices & supplies sub-sector. The company raised guidance regarding its growth outlook for 2019 and 2020, reflecting rising demand for its products. The investment advisor increased its weighting in Boston Scientific during the course of the year due to its promising and diversified pipeline of new products.

The Trust’s overweight in the home health care and hospice services provider Amedisys, Inc. was a top contributor in the health care providers & services area. The stock appreciated after the company’s third quarter earnings came in well above expectations.

Within the pharmaceuticals sub-sector, an underweight in Merck & Co., Inc. was among the largest detractors from performance. The company’s progress in its immuno-oncology clinical program surpassed the competition, lifting its stock. In addition, the approval of Merck’s flagship lung cancer drug for a variety of new indications increased the addressable market for the treatment. The investment advisor reduced the extent of the underweight in response to the company’s improving pipeline and fundamentals.

An overweight in the biotechnology firm Alnylam Pharmaceuticals, Inc., which was adversely affected by competitive pressure from Pfizer, was a further detractor. The uncertainty regarding Alnylam’s market share prompted the investment advisor to reduce the position from an overweight to a neutral weighting by the close of the year. Other detractors of note included off-benchmark positions in Insmed, Inc. and Novo-Nordisk A/S.

The Trust made use of options, principally written call options on individual stocks, in order to seek enhanced income returns while continuing to participate in the performance of the underlying equities. The option overlay strategy detracted from performance in 2018.

 

 

16    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Trust Information  as of December 31, 2018 (continued)    BlackRock Health Sciences Trust

 

Describe recent portfolio activity.

The Trust increased its allocation to the medical devices & supplies and pharmaceuticals sub-sectors over the course of the year. It reduced its weighting in biotechnology, while its weighting in health care providers and services was unchanged.

The Trust held an above-average position in cash at the end of December, reflecting the investment advisor’s decision to adopt a more defensive posture once market volatility increased in the fourth quarter. The Trust’s cash position had a marginally positive impact on results.

Describe portfolio positioning at period end.

The Trust continued to employ a bottom-up, fundamental investment process in an effort to construct a balanced, diversified portfolio of healthcare stocks. The portfolio continues to reflect two broad themes: innovation and value-based healthcare.

Innovation in medical technology remains a secular growth driver for the health care sector, as companies continue to develop new therapies or products that are either fulfilling an unmet medical need or that represent an improvement over current treatments. This encompasses not only the biotechnology industry, but also the pharmaceuticals and medical devices & supplies sub-sectors.

With respect to value-based health care, the Trust has an above-benchmark weighting in the health care providers & services sub-sector due to its sizable overweight in managed care stocks. The investment advisor continues to find a number of companies in this area that it believes are well positioned to reduce health care costs by leveraging their scale and analytical capabilities. Additionally, select holdings in the health care services industry feature business models that are benefiting from the shift to lower-cost options such as home health care.

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.

Market Price and Net Asset Value Per Share Summary

 

    

12/31/18

    

12/31/17

     Change      High      Low  

Market Price

  $ 36.45      $ 36.50        (0.14 )%     $ 44.00      $ 32.00  

Net Asset Value

    35.87        35.69        0.50        40.03        33.61  

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

 

 

LOGO

Overview of the Trust’s Total Investments *

 

TEN LARGEST HOLDINGS

 

Security  

12/31/18

 

UnitedHealth Group, Inc.

    8

Pfizer, Inc.

    6  

Abbott Laboratories

    5  

Boston Scientific Corp.

    4  

Merck & Co., Inc.

    4  

Medtronic PLC

    4  

Stryker Corp.

    3  

Anthem, Inc.

    3  

Cigna Corp.

    2  

Bristol-Myers Squibb Co.

    2  

 

  *

Excludes option positions and money market funds.

 

INDUSTRY ALLOCATION

 

Industry   12/31/18     12/31/17  

Health Care Equipment & Supplies

    27     23

Pharmaceuticals

    25       24  

Health Care Providers & Services

    23       25  

Biotechnology

    18       25  

Life Sciences Tools & Services

    5       2  

Diversified Consumer Services

    1       1  

Health Care Technology

    1        

 

 

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

 
 

 

 

TRUST INFORMATION      17  


Trust Information  as of December 31, 2018    BlackRock Resources & Commodities Strategy Trust

 

Investment Objective

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. While permitted, the Trust does not currently expect to invest in securities and derivatives linked to the underlying price movement of commodities or natural resources. The Trust seeks to pursue this goal primarily by investing in a portfolio of equity securities and utilizing an option overwriting strategy in an effort to seek total return performance and enhance distributions.

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

Trust Information

 

Symbol on NYSE

  BCX

Initial Offering Date

  March 30, 2011

Current Distribution Rate on Closing Market Price as of December 31, 2018 ($7.06)(a)

  8.77%

Current Monthly Distribution per Common Share(b)

  $0.0516

Current Annualized Distribution per Common Share(b)

  $0.6192

 

  (a) 

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 return of capital. See the Financial Highlights for the actual sources and character of distributions. Past performance does not guarantee future results.

 
  (b) 

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

 

Performance and Portfolio Management Commentary

Returns for the 12-month period ended December 31, 2018 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BCX(a)(b)

    (22.47 )%       (14.90 )% 

Lipper Natural Resources Funds(c)

    (24.64      (19.04

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b) 

The Trust’s discount to NAV widened during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c)

Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend date as calculated by Lipper.

 

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s absolute performance based on NAV:

What factors influenced performance?

Concerns about slowing global growth fueled significant weakness in both commodity prices and the broader world equity markets in late 2018, weighing heavily on natural resources stocks.

The Trust’s allocation to the energy sector was the largest detractor from performance. Although many energy companies demonstrated fundamental improvements, highlighted by better capital discipline and a focus on cash flows, the sector posted a weak 12-month return due to the extent of its fourth quarter selloff. The exploration and production industry was hit particularly hard, causing the Trust’s investments in stocks such as Encana Corp. and Devon Energy Corp. to finish among its most significant individual detractors.

The Trust’s positions in mining stocks also detracted from results. Although the sector experienced a strong rally in the first half of January, the gains proved short lived as escalating trade tensions between the United States and China began to weigh on both commodity prices and investor sentiment as the year progressed. China, which consumes approximately half of the world’s mined commodities, is by far the most important driver of demand for the mining sector. However, the investment adviser believes that underlying physical supply and demand conditions remain solid and that much of the weakness was driven by speculation. Against this backdrop, the Trust’s positions in copper producers had a negative impact on performance, with First Quantum Minerals Ltd. finishing as one of the largest detractors. Fresnillo PLC and Neo Lithium Corp. were also notable detractors in the broader mining industry.

On the positive side, the Trust’s allocation to gold stocks contributed to absolute performance. Gold bullion rallied amid the financial market volatility that occurred the latter part of 2018, as investors who are nervous about other assets often look to gold as a “safe haven.” The investment adviser believes this indicated the potential value of gold as a source of diversification. In this environment, the Trust’s position in Randgold Resources Ltd. was one of the top contributors to performance. The stock’s strong return reflected both rising gold prices and the announcement of a merger with Barrick Gold Corp.

Vale SA, which benefited from the strong pricing environment for higher-grade iron ore, was another notable contributor. Other contributors of note include Nevsun Resources, Ltd., Agrium, Inc., and Hormel Foods Corp.

The Trust made use of options, principally written call options on individual stocks, in order to seek enhanced income returns while continuing to participate in the performance of the underlying equities. The option overlay strategy contributed to performance.

 

 

18    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Trust Information  as of December 31, 2018 (continued)    BlackRock Resources & Commodities Strategy Trust

 

Describe recent portfolio activity.

The Trust exited some its positions in the agricultural industry, including Wilmar International, Ltd., where the investment adviser saw less room for earnings upside compared to other holdings, and Brasil Foods SA, which was pressured by a criminal investigation into members of its management team.

The Trust also rotated some of its positions in the mining industry by selling stocks that reached its price targets and rotating into those that offered more attractive valuations. In addition, the Trust raised its allocation to the sector through additions to large mining companies such as BHP Billiton Ltd. and Glencore PLC.

In the energy sector, the Trust increased its allocation to the refining industry and non-U.S. energy stocks, while reducing its weighting in U.S. onshore producers.

Describe portfolio positioning at period end.

The mining industry represented the Trust’s largest allocation, followed by energy and agriculture, respectively.

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.

Market Price and Net Asset Value Per Share Summary

 

    

12/31/18

    

12/31/17

     Change      High      Low  

Market Price

  $ 7.06      $ 9.77        (27.74 )%     $ 10.49      $ 6.66  

Net Asset Value

    8.44        10.64        (20.68      11.05        8.10  

Market Price and Net Asset Value History For Past Five Years

 

 

LOGO

Overview of the Trust’s Total Investments *

 

TEN LARGEST HOLDINGS

 

Security   12/31/18  

Royal Dutch Shell PLC — ADR

    6

TOTAL SA

    6  

BP PLC — ADR

    5  

BHP Group PLC

    4  

Glencore PLC

    4  

Nutrien Ltd.

    3  

Vale SA

    3  

Suncor Energy, Inc.

    3  

Nutrien Ltd.

    3  

Exxon Mobil Corp.

    3  

 

  *

Excludes option positions and money market funds.

 

INDUSTRY ALLOCATION

 

Industry   12/31/18     12/31/17  

Metals & Mining

    38     34

Oil, Gas & Consumable Fuels

    33       34  

Chemicals

    14       13  

Food Products

    7       11  

Containers & Packaging

    3       3  

Paper & Forest Products

    1       1  

Energy Equipment & Services

    1       3  

Electronic Equipment, Instruments & Components

    1        

Pharmaceuticals

    1        

Machinery

    1       1  

 

 

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

 
 

 

 

TRUST INFORMATION      19  


Trust Information  as of December 31, 2018     BlackRock Science and Technology Trust

 

Investment Objective

BlackRock Science and Technology Trust’s (BST) (the “Trust”) investment objective is to provide income and 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 science and technology companies. The Trust seeks to pursue this goal primarily by investing in a portfolio of equity securities and utilizing an option over-writing strategy in an effort to seek total return performance and enhance distributions.

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

Trust Information

 

Symbol on NYSE

  BST

Initial Offering Date

  October 30, 2014

Current Distribution Rate on Closing Market Price as of December 31, 2018 ($27.48)(a)

  6.55%

Current Monthly Distribution per Common Share(b)

  $0.1500

Current Annualized Distribution per Common Share(b)

  $1.8000

 

  (a) 

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 return of capital. See the Financial Highlights for the actual sources and character of distributions. Past performance does not guarantee future results.

 
  (b) 

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

 

Performance and Portfolio Management Commentary

Returns for the 12-month period ended December 31, 2018 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BST(a)(b)

    9.18      0.24

MSCI World Information Technology Index

    N/A        (2.60

 

  (a)

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b)

The Trust moved from a discount to NAV to a premium during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 

N/A — Not applicable as the index does not have a market price.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s relative performance based on the index cited above:

What factors influenced performance?

The Trust’s overweight position in software companies represented the largest contributor to performance return during the period, driven by the strong performance of enterprise software firms. On a stock specific basis, the Trust’s non-benchmark position in the online retailer Amazon.com, Inc. was the largest contributor as the company’s strong e-commerce and cloud services sales surpassed first- and second-quarter earnings expectations. The second largest contributor to relative return was the mobile payment company Square, Inc., which was rewarded by investors for continuing to diversify its product set and revenue stream beyond payments. The third largest contributor over the period was a non-benchmark position in the enterprise software firm Zuora, Inc., which benefited from the tailwind of increased movement toward subscription models for automated commerce.

The largest detractor from performance at a sub-sector level was stock selection within semiconductors, followed by selection within hardware. In terms of individual securities, an underweight to the consumer and enterprise software firm Microsoft Corp. was the most significant detractor. The Trust holds a structural underweight in Microsoft on the view that there are better growth opportunities elsewhere. The next largest detractors were underweight positions in the semiconductor company Broadcom, Inc. and the networking hardware firm Cisco Systems, Inc., as investors flocked to more defensive stocks amid market volatility, particularly in the latter part of the year.

The Trust made use of options, principally written call options on individual stocks, in order to seek enhanced income returns while continuing to participate in the performance of the underlying equities. The Trust’s options writing strategy had a marginally positive effect on returns.

Describe recent portfolio activity.

During the 12-month period, the Trust’s exposures to software and internet companies were increased, on the view that these firms are positioned to benefit from innovation while featuring low sensitivity to late cycle macroeconomics. Exposure to cyclical Chinese technology firms was decreased early in the period amid an emerging market sell-off. However, the Trust added back exposure to high-conviction names in the segment later in 2018 based on attractive valuations. Lastly, exposure to 5G component companies was raised based on their attractive growth prospects as the latest generation of cellular mobile communications technology is increasingly adopted.

Describe portfolio positioning at period end.

The Trust’s investment process aims to provide a balance of legacy technology firms that can continually innovate and newer, disruptive entrants that displace those that fail to innovate, with approximately 40% of the portfolio consisting of “core” legacy companies and 60% making up the “opportunistic,” high-growth portion. At period end,

 

 

20    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Trust Information  as of December 31, 2018 (continued)    BlackRock Science and Technology Trust

 

the Trust held its largest allocations in internet and software companies, which are supported by the longer-term tailwinds of innovation and the transition to cloud computing. The Trust’s software exposure was characterized by companies that offer enterprise software solutions, cloud computing services, and software-as-a-service, which are less cyclical in nature. The Trust also held a substantial investment in the 5G supply chain as this emerging technology is on track to disrupt the internet and communications space.

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.

Market Price and Net Asset Value Per Share Summary

 

     12/31/18      12/31/17      Change      High      Low  

Market Price

  $ 27.48      $ 26.69        2.96    $ 36.00      $ 24.00  

Net Asset Value

    26.21        27.73        (5.48      33.18        24.25  

Market Price and Net Asset Value History Since Inception

 

 

LOGO

 

(a) 

Commencement of operations.

Overview of the Trust’s Total Investments *

 

TEN LARGEST HOLDINGS

 

Security   12/31/18  

Microsoft Corp.

    6

Tencent Holdings Ltd.

    5  

Alphabet, Inc.

    5  

Amazon.com, Inc.

    5  

Mastercard, Inc.

    3  

Apple, Inc.

    3  

Alibaba Group Holding Ltd. — ADR

    3  

Visa, Inc.

    3  

salesforce. com, Inc.

    2  

Adobe, Inc.

    2  

 

  *

Excludes option positions and money market funds.

 

INDUSTRY ALLOCATION

 

Industry   12/31/18     12/31/17  

Software

    28     22

IT Services

    18       10  

Interactive Media & Services

    16        

Semiconductors & Semiconductor Equipment

    11       18  

Internet & Direct Marketing Retail

    11       6  

Entertainment

    6        

Technology Hardware, Storage & Peripherals

    3       7  

Electronic Equipment, Instruments & Components

    2       2  

Health Care Technology

    1       (a)  

Automobiles

    1       (a)  

Diversified Consumer Services

    1       (a)  

Diversified Telecommunication Services

    1        

Communications Equipment

    1        

Internet Software & Services

          28  

Media

          1  

Other

    (b)       6 (c)  

 

  (a) 

Representing less than 1% of the Trust’s total investments.

 
  (b) 

Other includes a 1% holding or less in each of the following industries:

 

Household Durables and Wireless Telecommunication Services

  (c) 

Other includes a 1% holding or less in each of the following industries: Automobiles, Chemicals, Consumer Finance, Household Durables, Health Care Technology, Professional Services and Diversified Consumer Services.

 

 

 

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

 
 

 

 

TRUST INFORMATION      21  


Trust Information  as of December 31, 2018   

BlackRock Utilities, Infrastructure & Power Opportunities Trust

 

Investment Objective

BlackRock Utilities, Infrastructure & Power Opportunities 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, Infrastructure and Power Opportunities business segments anywhere in the world and by utilizing an option writing (selling) strategy in an effort to seek total return performance and enhance distributions. 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, 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 and the “Power Opportunities” business segment to include companies with a significant involvement in, supporting, or necessary to renewable energy technology and development, alternative fuels, energy efficiency, automotive and sustainable mobility and technologies that enable or support the growth and adoption of new power and energy sources. 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.

Trust Information

 

Symbol on NYSE

  BUI

Initial Offering Date

  November 25, 2011

Current Distribution Rate on Closing Market Price as of December 31, 2018 ($19.76)(a)

  7.35%

Current Monthly Distribution per Common Share(b)

  $0.1210

Current Annualized Distribution per Common Share(b)

  $1.4520

 

  (a) 

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 return of capital. See the Financial Highlights for the actual sources and character of distributions. Past performance does not guarantee future results.

 
  (b) 

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

 

Performance and Portfolio Management Commentary

Returns for the 12-month period ended December 31, 2018:

 

    Returns Based On  
     Market Price      Net Asset Value  

BUI(a)(b)

    (1.68 )%       (4.40 )% 

Lipper Utility Funds(c)

    (9.66      (8.10

 

  (a)

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b) 

The Trust’s premium to NAV widened during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c)

Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend date as calculated by Lipper.

 

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s absolute performance based on NAV.

What factors influenced performance?

The largest detractor from performance was the Trust’s position in the industrials sector, which was negatively affected by weak investor sentiment toward China. The Trust’s position in the transportation infrastructure industry detracted from performance, with positions in Italian tollway operator Atlantia SpA and Australia’s Transurban Group among the most notable within this sub sector.

The largest contributor to performance was the Trust’s exposure to utilities, which proved to be more defensive amid the volatile market environment. From an industry standpoint, stock selection in electric utilities was the most noteworthy contributor to performance. Within the electric utilities industry, the Trust’s performance benefited from positions in major U.S. players NextEra Energy, Inc., Exelon Corp., and FirstEnergy Corp.

During the period, the Trust made use of options, principally written call options on individual stocks, in order to seek enhanced income returns while continuing to participate in the performance of the underlying equities. The Trust’s option writing strategy had a positive impact on performance during the period.

Describe recent portfolio activity.

During the period, the Trust reduced exposure to airports as well as midstream energy companies, selling its positions in Shell Midstream Partners LP and Plains All American Pipeline LP. The Trust used the proceeds to invest in energy distribution companies such as The Williams Companies and TransCanada Corp., as well as companies that have exposure to the electric vehicle industry, such as Switzerland’s ABB Ltd.

 

 

22    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Trust Information  as of December 31, 2018 (continued)   

BlackRock Utilities, Infrastructure & Power Opportunities Trust

 

Describe portfolio positioning at period end.

At period end, the utilities sector accounted for approximately 64% of the Trust’s assets. The Trust had approximately 15% and 13% of its assets invested in the industrials and energy sectors, respectively, with the remainder invested in other infrastructure- and power-related sectors.

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.

Market Price and Net Asset Value Per Share Summary

 

    

12/31/18

    

12/31/17

     Change      High      Low  

Market Price

  $ 19.76      $ 21.62        (8.60 )%     $ 21.73      $ 17.40  

Net Asset Value

    18.77        21.12        (11.13      21.27        18.26  

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

 

 

LOGO

Overview of the Trust’s Total Investments *

 

TEN LARGEST HOLDINGS

 

Security   12/31/18  

NextEra Energy, Inc.

    9

Enel SpA

    6  

EDP Renovaveis SA

    4  

Duke Energy Corp.

    4  

Williams Cos., Inc.

    4  

Dominion Energy, Inc.

    4  

National Grid PLC

    4  

Exelon Corp.

    4  

Public Service Enterprise Group, Inc.

    3  

Transurban Group

    3  

 

  *

Excludes option positions and money market funds.

 

INDUSTRY ALLOCATION

 

Industry  

12/31/18

   

12/31/17

 

Electric Utilities

    39     33

Multi-Utilities

    20       20  

Oil, Gas & Consumable Fuels

    13       12  

Independent Power and Renewable Electricity Producers

    7       8  

Transportation Infrastructure

    6       15  

Electrical Equipment

    6       3  

Chemicals

    4       3  

Semiconductors & Semiconductor Equipment

    2        

Building Products

    2       (a)  

Machinery

    1        

Construction & Engineering

          3  

Gas Utilities

          1  

Water Utilities

          1  

Other

          1 (b)  

 

  (a) 

Representing less than 1% of the Trust’s total investments.

 
  (b) 

Other includes a 1% holding or less in each of the following industries: Building Products and Semiconductors & Semiconductor Equipment.

 

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

 

 

 

TRUST INFORMATION      23  


Derivative Financial Instruments

 

The Trusts may invest in various derivative financial instruments. These instruments are used to obtain exposure to a security, commodity, index, market, and/or other assets without owning or taking physical custody of securities, commodities and/or other referenced assets or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage and 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 instrument. The Trusts’ successful use of a derivative financial instrument depends on the investment adviser’s ability to predict pertinent market movements accurately, which cannot be assured. The use of these instruments may result in losses greater than if they had not been used, may limit the amount of appreciation a Trust can realize on an investment and/or may result in lower distributions paid to shareholders. The Trusts’ investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.

 

 

24    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments

December 31, 2018

  

BlackRock Energy and Resources Trust (BGR)

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Common Stocks — 99.0%  
Energy Equipment & Services — 6.0%  

Baker Hughes a GE Co.(a)

    266,300     $ 5,725,450  

Halliburton Co.(a)

    320,150       8,509,587  

Patterson-UTI Energy, Inc.(a)

    212,407       2,198,412  

Schlumberger Ltd.(a)

    142,924       5,156,698  
   

 

 

 
      21,590,147  
Oil, Gas & Consumable Fuels — 93.0%  

Anadarko Petroleum Corp.(a)

    176,783       7,750,167  

BP PLC

    4,696,550       29,690,121  

Cairn Energy PLC

    2,269,195       4,329,938  

Canadian Natural Resources Ltd.

    420,840       10,154,168  

Chevron Corp.(a)(b)

    133,435       14,516,394  

CNOOC Ltd.

    2,465,000       3,796,895  

Concho Resources, Inc.(a)(c)

    97,487       10,020,689  

ConocoPhillips(a)

    276,850       17,261,597  

Devon Energy Corp.(a)

    313,350       7,062,909  

Encana Corp.

    317,804       1,834,380  

EOG Resources, Inc.(a)

    138,800       12,104,748  

EQT Corp.

    179,750       3,395,477  

Equitrans Midstream Corp.(c)

    135,110       2,704,902  

Exxon Mobil Corp.(a)

    542,452       36,989,802  

Galp Energia SGPS SA

    322,300       5,074,879  

Kosmos Energy Ltd.(c)

    1,016,390       4,136,707  

Marathon Petroleum Corp.(a)

    212,985       12,568,245  

Noble Energy, Inc.(a)

    272,642       5,114,764  

Oil Search Ltd.

    877,163       4,418,276  

Pioneer Natural Resources Co.(a)

    79,426       10,446,108  

Royal Dutch Shell PLC — ADR, Class A(a)

    727,400       42,385,598  

Royal Dutch Shell PLC, Class A

    216,398       6,369,206  

Suncor Energy, Inc.

    582,050       16,256,641  

TOTAL SA

    509,103       26,852,693  

TransCanada Corp.

    299,050       10,678,792  
Security   Shares     Value  
Oil, Gas & Consumable Fuels (continued)  

Valero Energy Corp.(a)

    186,438     $ 13,977,257  

Williams Cos., Inc.(a)

    561,750       12,386,588  
   

 

 

 
      332,277,941  
   

 

 

 

Total Long-Term Investments — 99.0%
(Cost — $409,330,083)

 

    353,868,088  
   

 

 

 

Short-Term Securities — 1.4%

 

BlackRock Liquidity Funds, T-Fund, Institutional Class, 2.32%(d)(e)

    5,006,975       5,006,975  
   

 

 

 

Total Short-Term Securities — 1.4%
(Cost — $5,006,975)

 

    5,006,975  
   

 

 

 

Options Purchased — 0.0%
(Cost — $2,157)

 

    8,755  
   

 

 

 

Total Investments Before Options Written — 100.4%
(Cost — $414,339,215)

 

    358,883,818  
   

 

 

 

Options Written — (0.3)%
(Premiums Received — $3,557,927)

 

    (1,051,873
   

 

 

 

Total Investments, Net of Options Written — 100.1%
(Cost — $410,781,288)

 

    357,831,945  

Liabilities in Excess of Other Assets — (0.1)%

 

    (441,371
   

 

 

 

Net Assets — 100.0%

 

  $ 357,390,574  
   

 

 

 

 

(a) 

All or a portion of the security has been pledged and/or segregated as collateral in connection with outstanding exchange-traded options written.

(b) 

All or a portion of the security has been pledged as collateral in connection with outstanding OTC derivatives.

(c) 

Non-income producing security.

(d) 

Annualized 7-day yield as of period end.

 
(e) 

During the year ended December 31, 2018, investments in issuers considered to be an affiliate of the Trust for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate    Shares
Held at
12/31/17
     Net
Activity
     Shares
Held at
12/31/18
     Value at
12/31/18
     Income      Net
Realized
Gain (Loss) (a)
     Change in
Unrealized
Appreciation
(Depreciation)
 

BlackRock Liquidity Funds, T-Fund, Institutional Class

     3,870,844        1,136,131        5,006,975      $ 5,006,975      $ 78,939      $      $  
           

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes net capital gain distributions, if applicable.

 

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

Derivative Financial Instruments Outstanding as of Period End

Exchange-Traded Options Purchased

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call                                                   

Exxon Mobil Corp.

     206          01/04/19        USD     77.00        USD     1,405        $ 7,725  

Exxon Mobil Corp.

     206          01/11/19        USD     78.00        USD     1,405          1,030  
                          

 

 

 
                           $ 8,755  
                          

 

 

 

 

 

SCHEDULES OF INVESTMENTS      25  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Energy and Resources Trust (BGR)

 

Exchange-Traded Options Written

 

Description    Number of
Contracts
       Expiration
Date
      

Exercise

Price

       Notional
Amount (000)
       Value  
Call                                                   

Anadarko Petroleum Corp.

     159          01/04/19        USD     55.00        USD     697        $ (954

ConocoPhillips

     355          01/04/19        USD     68.00        USD     2,213          (1,065

Devon Energy Corp.

     343          01/04/19        USD     28.50        USD     773          (1,372

EOG Resources, Inc.

     111          01/04/19        USD     105.00        USD     968          (444

Exxon Mobil Corp.

     206          01/04/19        USD     80.00        USD     1,405          (412

Marathon Petroleum Corp.

     26          01/04/19        USD     67.00        USD     153          (104

Pioneer Natural Resources Co.

     47          01/04/19        USD     152.50        USD     618          (2,350

Royal Dutch Shell PLC — ADR, Class A

     764          01/04/19        USD     61.50        USD     4,452          (30,560

Schlumberger Ltd.

     114          01/04/19        USD     42.50        USD     411          (114

Valero Energy Corp.

     135          01/04/19        USD     84.00        USD     1,012          (540

Williams Cos., Inc.

     61          01/04/19        USD     25.50        USD     135          (305

Williams Cos., Inc.

     137          01/04/19        USD     27.25        USD     302           

Chevron Corp.

     138          01/11/19        USD     119.00        USD     1,501          (690

ConocoPhillips

     37          01/11/19        USD     71.00        USD     231          (148

EOG Resources, Inc.

     91          01/11/19        USD     112.00        USD     794          (546

Exxon Mobil Corp.

     206          01/11/19        USD     80.00        USD     1,405          (618

Halliburton Co.

     195          01/11/19        USD     32.00        USD     518          (585

Halliburton Co.

     285          01/11/19        USD     33.53        USD     758          (1

Marathon Petroleum Corp.

     97          01/11/19        USD     65.00        USD     572          (1,164

Marathon Petroleum Corp.

     136          01/11/19        USD     65.50        USD     803          (1,156

Pioneer Natural Resources Co.

     84          01/11/19        USD     143.00        USD     1,105          (5,670

Royal Dutch Shell PLC — ADR, Class A

     359          01/11/19        USD     60.00        USD     2,092          (11,668

Schlumberger Ltd.

     114          01/11/19        USD     42.50        USD     411          (342

Valero Energy Corp.

     135          01/11/19        USD     84.01        USD     1,012          (1,560

Williams Cos., Inc.

     45          01/11/19        USD     26.00        USD     99          (945

Williams Cos., Inc.

     163          01/11/19        USD     25.01        USD     359          (23

Williams Cos., Inc.

     61          01/11/19        USD     25.18        USD     135          (6

Anadarko Petroleum Corp.

     248          01/18/19        USD     60.00        USD     1,087          (1,240

Anadarko Petroleum Corp.

     32          01/18/19        USD     55.00        USD     140          (144

Baker Hughes a GE Co.

     580          01/18/19        USD     26.00        USD     1,247          (14,500

Chevron Corp.

     121          01/18/19        USD     120.00        USD     1,316          (1,815

Concho Resources, Inc.

     151          01/18/19        USD     135.00        USD     1,552          (2,265

ConocoPhillips

     108          01/18/19        USD     67.50        USD     673          (3,834

Devon Energy Corp.

     267          01/18/19        USD     30.00        USD     602          (267

Encana Corp.

     1,466          01/18/19        CAD     12.00        CAD     1,155          (4,295

EOG Resources, Inc.

     89          01/18/19        USD     100.00        USD     776          (2,314

Halliburton Co.

     195          01/18/19        USD     33.00        USD     518          (487

Halliburton Co.

     287          01/18/19        USD     35.45        USD     763          (1

Marathon Petroleum Corp.

     26          01/18/19        USD     67.50        USD     153          (325

Noble Energy, Inc.

     564          01/18/19        USD     27.50        USD     1,058          (2,820

Patterson-UTI Energy, Inc.

     399          01/18/19        USD     14.00        USD     413          (3,990

Pioneer Natural Resources Co.

     95          01/18/19        USD     160.00        USD     1,249          (3,800

Royal Dutch Shell PLC — ADR, Class A

     343          01/18/19        USD     62.50        USD     1,999          (4,287

Schlumberger Ltd.

     150          01/18/19        USD     50.00        USD     541          (450

Suncor Energy, Inc.

     230          01/18/19        CAD     48.00        CAD     877          (842

Suncor Energy, Inc.

     7,500          01/18/19        CAD     46.00        CAD     286          (302

TransCanada Corp.

     535          01/18/19        CAD     54.00        CAD     2,608          (2,939

Valero Energy Corp.

     87          01/18/19        USD     90.00        USD     652          (391

Valero Energy Corp.

     208          01/18/19        USD     87.50        USD     1,559          (1,352

Williams Cos., Inc.

     244          01/18/19        USD     26.00        USD     538          (854

Williams Cos., Inc.

     163          01/18/19        USD     25.00        USD     359          (815

Anadarko Petroleum Corp.

     80          01/25/19        USD     50.50        USD     351          (2,480

Baker Hughes a GE Co.

     53          01/25/19        USD     23.12        USD     114          (1,233

Chevron Corp.

     70          01/25/19        USD     119.00        USD     762          (3,325

ConocoPhillips

     154          01/25/19        USD     68.00        USD     960          (5,929

Devon Energy Corp.

     243          01/25/19        USD     27.50        USD     548          (1,822

EOG Resources, Inc.

     82          01/25/19        USD     108.00        USD     715          (2,132

Exxon Mobil Corp.

     522          01/25/19        USD     79.00        USD     3,560          (2,871

Halliburton Co.

     158          01/25/19        USD     30.50        USD     420          (3,002

Marathon Petroleum Corp.

     273          01/25/19        USD     65.50        USD     1,611          (10,511

Royal Dutch Shell PLC — ADR, Class A

     360          01/25/19        USD     60.50        USD     2,098          (20,700

Schlumberger Ltd.

     136          01/25/19        USD     45.00        USD     491          (612

 

 

26    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Energy and Resources Trust (BGR)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
      

Exercise

Price

       Notional
Amount (000)
       Value  
Call                                                   

Valero Energy Corp.

     107          01/25/19        USD     78.00        USD     802        $ (18,404

Williams Cos., Inc.

     363          01/25/19        USD     25.00        USD     800          (2,359

Williams Cos., Inc.

     46          01/25/19        USD     26.02        USD     101          (350

Anadarko Petroleum Corp.

     32          02/01/19        USD     51.00        USD     140          (1,232

Baker Hughes a GE Co.

     53          02/01/19        USD     23.12        USD     114          (1,422

ConocoPhillips

     162          02/01/19        USD     65.00        USD     1,010          (23,085

Devon Energy Corp.

     243          02/01/19        USD     27.50        USD     548          (3,159

EOG Resources, Inc.

     112          02/01/19        USD     99.00        USD     977          (6,664

Exxon Mobil Corp.

     380          02/01/19        USD     71.00        USD     2,591          (49,020

Exxon Mobil Corp.

     205          02/01/19        USD     70.00        USD     1,398          (34,235

Marathon Petroleum Corp.

     187          02/01/19        USD     60.50        USD     1,103          (39,364

Pioneer Natural Resources Co.

     51          02/01/19        USD     138.00        USD     671          (20,400

Royal Dutch Shell PLC — ADR, Class A

     359          02/01/19        USD     58.50        USD     2,092          (60,133

Royal Dutch Shell PLC — ADR, Class A

     360          02/06/19        USD     58.51        USD     2,098          (55,452

Exxon Mobil Corp.

     205          02/08/19        USD     70.01        USD     1,398          (24,206

Anadarko Petroleum Corp.

     67          02/15/19        USD     55.00        USD     294          (1,742

Canadian Natural Resources Ltd.

     792          02/15/19        CAD     34.00        CAD     2,609          (78,608

Chevron Corp.

     138          02/15/19        USD     111.00        USD     1,501          (40,433

Concho Resources, Inc.

     36          02/15/19        USD     105.00        USD     370          (19,800

Concho Resources, Inc.

     154          02/15/19        USD     112.00        USD     1,583          (47,341

ConocoPhillips

     101          02/15/19        USD     67.50        USD     630          (12,423

ConocoPhillips

     51          02/15/19        USD     65.00        USD     318          (10,634

Exxon Mobil Corp.

     379          02/15/19        USD     80.00        USD     2,584          (4,358

Exxon Mobil Corp.

     207          02/15/19        USD     70.00        USD     1,412          (39,434

Noble Energy, Inc.

     390          02/15/19        USD     21.75        USD     732          (12,929

Patterson-UTI Energy, Inc.

     344          02/15/19        USD     15.00        USD     356          (3,440

Williams Cos., Inc.

     320          02/15/19        USD     26.00        USD     706          (7,840

Williams Cos., Inc.

     363          02/15/19        USD     25.00        USD     800          (8,530
                          

 

 

 
                           $ (799,285
                          

 

 

 

OTC Options Written

 

Description    Counterparty    Number of
Contracts
     Expiration
Date
     Exercise
Price
     Notional
Amount (000)
     Value  
Call                                                

Galp Energia SGPS SA

   Goldman Sachs International      36,800        01/03/19      EUR     14.70      EUR     506      $ (8

Suncor Energy, Inc.

   Goldman Sachs International      11,600        01/03/19      CAD     46.20      CAD     442         

BP PLC

   Barclays Bank PLC      311,000        01/04/19      GBP     5.52      GBP     1,543         

BP PLC

   UBS AG      255,500        01/04/19      GBP     5.38      GBP     1,267        (26

Suncor Energy, Inc.

   Goldman Sachs International      27,600        01/04/19      CAD     44.18      CAD     1,052         

Suncor Energy, Inc.

   Credit Suisse International      11,200        01/07/19      CAD     46.00      CAD     427        (8

CNOOC Ltd.

   UBS AG      407,000        01/08/19      HKD     14.23      HKD     4,908        (233

BP PLC

   Morgan Stanley & Co. International PLC      270,000        01/09/19      GBP     5.28      GBP     1,339        (4,129

TOTAL SA

   Morgan Stanley & Co. International PLC      40,000        01/09/19      EUR     53.35      EUR     1,842        (12

Oil Search Ltd.

   UBS AG      190,000        01/10/19      AUD     7.56      AUD     1,359        (3,822

Suncor Energy, Inc.

   Credit Suisse International      11,300        01/11/19      CAD     45.48      CAD     431        (2

CNOOC Ltd.

   UBS AG      407,000        01/15/19      HKD     14.23      HKD     4,908        (775

Suncor Energy, Inc.

   Goldman Sachs International      27,700        01/15/19      CAD     44.39      CAD     1,056        (676

BP PLC

   Morgan Stanley & Co. International PLC      270,000        01/16/19      GBP     5.33      GBP     1,339        (6,916

Galp Energia SGPS SA

   Credit Suisse International      36,800        01/16/19      EUR     14.92      EUR     506        (1,125

TOTAL SA

   Credit Suisse International      46,400        01/16/19      EUR     48.97      EUR     2,136        (6,368

Canadian Natural Resources Ltd.

   Credit Suisse International      34,000        01/23/19      CAD     37.51      CAD     1,120        (4,310

Encana Corp.

   Credit Suisse International      34,300        01/23/19      CAD     8.33      CAD     270        (6,793

Suncor Energy, Inc.

   Credit Suisse International      25,400        01/23/19      CAD     42.56      CAD     969        (2,870

TOTAL SA

   UBS AG      28,200        01/23/19      EUR     50.27      EUR     1,298        (2,315

Royal Dutch Shell PLC — ADR, Class A

   Goldman Sachs International      40,700        01/24/19      GBP     24.16      GBP     940        (11,593

TOTAL SA

   Credit Suisse International      27,900        01/29/19      EUR     48.58      EUR     1,285        (10,950

BP PLC — ADR

   UBS AG      300,000        01/31/19      GBP     5.36      GBP     1,488        (15,459

TransCanada Corp.

   Deutsche Bank AG      26,800        01/31/19      CAD     51.91      CAD     1,307        (4,379

Suncor Energy, Inc.

   Goldman Sachs International      19,800        02/01/19      CAD     43.81      CAD     755        (2,131

CNOOC Ltd.

   JPMorgan Chase Bank N.A.      50,000        02/04/19      HKD     12.88      HKD     603        (1,746

 

 

SCHEDULES OF INVESTMENTS      27  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Energy and Resources Trust (BGR)

 

OTC Options Written (continued)

 

Description    Counterparty    Number of
Contracts
     Expiration
Date
     Exercise
Price
     Notional
Amount (000)
     Value  
Call                                                

BP PLC — ADR

   Credit Suisse International      237,200        02/06/19      GBP     5.13      GBP     1,177      $ (34,253

Canadian Natural Resources Ltd.

   Credit Suisse International      34,000        02/06/19      CAD     37.51      CAD     1,120        (9,398

Galp Energia SGPS SA

   Credit Suisse International      39,200        02/06/19      EUR     14.15      EUR     539        (12,520

Oil Search Ltd.

   UBS AG      124,300        02/06/19      AUD     7.49      AUD     889        (13,311

Suncor Energy, Inc.

   Goldman Sachs International      23,100        02/07/19      CAD     37.66      CAD     881        (32,427

Baker Hughes a GE Co.

   Deutsche Bank AG      24,500        02/08/19      USD     22.01      USD     527        (16,318

TOTAL SA

   UBS AG      35,600        02/12/19      EUR     48.21      EUR     1,639        (25,175

Royal Dutch Shell PLC — ADR, Class A

   Goldman Sachs International      40,700        02/13/19      GBP     24.39      GBP     940        (15,705

Suncor Energy, Inc.

   Goldman Sachs International      15,500        02/14/19      CAD     41.73      CAD     591        (6,835
                     

 

 

 
   $ (252,588
  

 

 

 

Balances Reported in the Statements of Assets and Liabilities for Options Written

 

     

Swap

Premiums

Paid

     Swap
Premiums
Received
     Unrealized
Appreciation
     Unrealized
Depreciation
     Value  

Options Written

     N/A        N/A      $ 2,540,288      $ (34,234    $ (1,051,873

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Assets — Derivative Financial Instruments

 

              

Options purchased

                    

Investments at value — unaffiliated(a)

   $      $      $ 8,755      $      $      $      $ 8,755  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities — Derivative Financial Instruments

 

              

Options written

                    

Options written at value

   $      $      $ 1,051,873      $      $      $      $ 1,051,873  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes options purchased at value as reported in the Schedule of Investments.

 

For the period ended December 31, 2018, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Net Realized Gain (Loss) from:

 

              

Options purchased(a)

   $      $      $ 6,138      $      $      $      $ 6,138  

Options written

                   (5,634,691                           (5,634,691
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $      $      $ (5,628,553    $      $      $      $ (5,628,553
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

(a) Options purchased are included in net realized gain (loss) from investments.

  

Net Change in Unrealized Appreciation (Depreciation) on:

 

           

Options purchased(a)

   $      $      $ 6,598      $      $      $      $ 6,598  

Options written

                   6,855,978                             6,855,978  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $      $      $ 6,862,576      $      $      $      $ 6,862,576  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Options purchased are included in net change in unrealized appreciation (depreciation) on investments.

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Options:

        

Average value of option contracts purchased

   $ 2,189  

Average value of option contracts written

   $ 2,947,718  

For more information about the Trust’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

 

 

28    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Energy and Resources Trust (BGR)

 

Derivative Financial Instruments — Offsetting as of Period End

The Trust’s derivative assets and liabilities (by type) are as follows:

 

      Assets      Liabilities  

Options

   $ 8,755 (a)      $ 1,051,873  

Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)

     (8,755      (799,285
  

 

 

    

 

 

 

Total derivative assets and liabilities subject to an MNA

   $      $ 252,588  
  

 

 

    

 

 

 

 

  (a) 

Includes options purchased at value which is included in Investments at value — unaffiliated in the Statements of Assets and Liabilities and reported in the Schedule of Investments.

 

The following table presents the Trust’s derivative assets (and liabilities) by counterparty net of amounts available for offset under an MNA and net of the related collateral received (and pledged) by the Trust:

 

Counterparty    Derivative
Liabilities
Subject to
an MNA by
Counterparty
       Derivatives
Available
for Offset
       Non-cash
Collateral
Pledged (a)
       Cash
Collateral
Pledged
       Net Amount
of Derivative
Liabilities (b)
 

Credit Suisse International

   $ 88,597        $        $        $        $ 88,597  

Deutsche Bank AG

     20,697                                     20,697  

Goldman Sachs International

     69,375                   (69,375                  

JPMorgan Chase Bank N.A.

     1,746                                     1,746  

Morgan Stanley & Co. International PLC

     11,057                                     11,057  

UBS AG

     61,116                                     61,116  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
   $ 252,588        $        $ (69,375      $        $ 183,213  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

Excess of collateral pledged to the individual counterparty is not shown for financial reporting purposes.

 
  (b) 

Net amount represents the net amount payable due to counterparty in the event of default. Net amount may be offset further by the options written receivable/payable on the Statements of Assets and Liabilities.

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

      Level 1        Level 2        Level 3        Total  

Assets:

                 

Investments:

                 

Common Stocks:

                 

Energy Equipment & Services

   $ 21,590,147        $        $        $ 21,590,147  

Oil, Gas & Consumable Fuels

     251,745,933          80,532,008                   332,277,941  

Short-Term Securities

     5,006,975                            5,006,975  

Options Purchased:

                 

Equity contracts

     8,755                            8,755  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ 278,351,810        $ 80,532,008        $        $ 358,883,818  
  

 

 

      

 

 

      

 

 

      

 

 

 

Derivative Financial Instruments(a)

                 

Liabilities:

                 

Equity contracts

   $ (614,328      $ (437,545      $        $ (1,051,873
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

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

 

During the year ended December 31, 2018, there were no transfers between levels.

See notes to financial statements.

 

 

SCHEDULES OF INVESTMENTS      29  


Schedule of Investments

December 31, 2018

  

BlackRock Enhanced Capital and Income Fund (CII)

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Common Stocks — 99.9%  
Airlines — 1.5%  

Delta Air Lines, Inc.

    206,296     $ 10,294,170  
   

 

 

 
Banks — 10.0%  

Bank of America Corp.(a)

    794,984       19,588,406  

JPMorgan Chase & Co.(b)

    224,576       21,923,109  

Regions Financial Corp.

    323,165       4,323,948  

SunTrust Banks, Inc.

    183,682       9,264,920  

U.S. Bancorp

    266,869       12,195,913  
   

 

 

 
      67,296,296  
Biotechnology — 3.1%  

Biogen, Inc.(c)

    45,057       13,558,553  

Gilead Sciences, Inc.

    117,633       7,357,944  
   

 

 

 
      20,916,497  
Capital Markets — 1.1%  

E*Trade Financial Corp.

    172,462       7,567,633  
   

 

 

 
Chemicals — 2.0%  

DowDuPont, Inc.

    247,850       13,255,018  
   

 

 

 
Commercial Services & Supplies — 1.1%  

KAR Auction Services, Inc.

    152,455       7,275,153  
   

 

 

 
Communications Equipment — 3.0%  

Cisco Systems, Inc.

    475,156       20,588,509  
   

 

 

 
Consumer Finance — 1.7%  

Ally Financial, Inc.

    303,695       6,881,729  

SLM Corp.(c)

    529,692       4,401,740  
   

 

 

 
      11,283,469  
Containers & Packaging — 1.3%  

Packaging Corp. of America

    103,230       8,615,576  
   

 

 

 
Electric Utilities — 1.7%  

FirstEnergy Corp.

    306,003       11,490,413  
   

 

 

 
Electrical Equipment — 1.3%  

Emerson Electric Co.

    151,192       9,033,722  
   

 

 

 
Electronic Equipment, Instruments & Components — 1.7%  

CDW Corp.

    139,609       11,315,309  
   

 

 

 
Food & Staples Retailing — 2.8%  

Walmart, Inc.

    203,846       18,988,255  
   

 

 

 
Food Products — 1.1%  

J.M. Smucker Co.

    82,071       7,672,818  
   

 

 

 
Health Care Equipment & Supplies — 1.5%  

Baxter International, Inc.

    152,346       10,027,414  
   

 

 

 
Health Care Providers & Services — 8.1%  

Centene Corp.(c)

    75,344       8,687,163  

Humana, Inc.

    50,551       14,481,851  

Laboratory Corp. of America Holdings(c)

    100,804       12,737,593  

UnitedHealth Group, Inc.

    75,532       18,816,532  
   

 

 

 
      54,723,139  
Hotels, Restaurants & Leisure — 1.5%  

Carnival Corp.

    203,087       10,012,189  
   

 

 

 
Household Durables — 2.2%  

D.R. Horton, Inc.

    336,895       11,676,781  

Lennar Corp., Class A

    87,906       3,441,520  
   

 

 

 
      15,118,301  
Independent Power and Renewable Electricity Producers — 1.2%  

AES Corp.

    540,639       7,817,640  
   

 

 

 
Security   Shares     Value  
Insurance — 1.6%  

Assured Guaranty Ltd.

    186,691     $ 7,146,532  

Hartford Financial Services Group, Inc.

    77,656       3,451,809  
   

 

 

 
      10,598,341  
Interactive Media & Services — 5.2%  

Alphabet, Inc., Class A(c)

    32,634       34,101,225  

Alphabet, Inc., Class C(c)

    1,038       1,074,963  
   

 

 

 
      35,176,188  
IT Services — 2.8%  

Amdocs Ltd.

    84,510       4,950,596  

Cognizant Technology Solutions Corp., Class A

    223,174       14,167,085  
   

 

 

 
      19,117,681  
Machinery — 1.3%  

Fortive Corp.

    130,341       8,818,872  
   

 

 

 
Media — 3.9%  

Comcast Corp., Class A(a)

    561,018       19,102,663  

DISH Network Corp., Class A(c)

    284,678       7,108,409  
   

 

 

 
      26,211,072  
Metals & Mining — 1.2%  

Freeport-McMoRan, Inc.

    522,764       5,389,697  

Rio Tinto PLC — ADR

    57,596       2,792,254  
   

 

 

 
      8,181,951  
Multiline Retail — 1.5%  

Dollar General Corp.

    91,112       9,847,385  
   

 

 

 
Oil, Gas & Consumable Fuels — 6.6%  

BP PLC — ADR

    338,059       12,819,197  

Chevron Corp.

    133,428       14,515,632  

Marathon Oil Corp.

    277,252       3,975,794  

Suncor Energy, Inc.

    464,851       13,001,882  
   

 

 

 
      44,312,505  
Pharmaceuticals — 5.8%  

Novartis AG — ADR

    87,887       7,541,583  

Novo Nordisk A/S — ADR

    192,710       8,878,150  

Pfizer, Inc.

    527,634       23,031,224  
   

 

 

 
      39,450,957  
Road & Rail — 2.2%  

Norfolk Southern Corp.

    97,974       14,651,032  
   

 

 

 
Semiconductors & Semiconductor Equipment — 1.2%  

Taiwan Semiconductor Manufacturing Co. Ltd. — ADR

    211,805       7,817,722  
   

 

 

 
Software — 5.6%  

Microsoft Corp.(a)

    372,626       37,847,623  
   

 

 

 
Specialty Retail — 4.8%  

Lowe’s Cos., Inc.(a)

    166,904       15,415,253  

O’Reilly Automotive, Inc.(c)

    35,072       12,076,342  

Urban Outfitters, Inc.(c)

    149,938       4,977,942  
   

 

 

 
      32,469,537  
Technology Hardware, Storage & Peripherals — 6.1%  

Apple, Inc.

    231,686       36,546,150  

Dell Technologies, Inc., Class C(c)

    91,033       4,448,776  
   

 

 

 
      40,994,926  
Tobacco — 2.2%  

Altria Group, Inc.(a)(b)

    305,108       15,069,284  
   

 

 

 

Total Long-Term Investments — 99.9%
(Cost — $578,306,710)

 

    673,856,597  
   

 

 

 
 

 

 

30    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Capital and Income Fund (CII)

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Short-Term Securities — 2.2%  

BlackRock Liquidity Funds, T-Fund, Institutional Class, 2.32%(d)(e)

    14,789,354     $ 14,789,354  
   

 

 

 

Total Short-Term Securities — 2.2%
(Cost — $14,789,354)

 

    14,789,354  
   

 

 

 

Options Purchased — 0.0%
(Cost — $10,371)

 

    2,522  
   

 

 

 

Total Investments Before Options Written — 102.1%
(Cost — $593,106,435)

 

    688,648,473  
   

 

 

 

Options Written — (0.5)%
(Premiums Received — $8,128,325)

 

    (3,567,851
   

 

 

 

Total Investments, Net of Options Written — 101.6%
(Cost — $584,978,110)

 

    685,080,622  

Liabilities in Excess of Other Assets — (1.6)%

 

    (11,003,676
   

 

 

 

Net Assets Applicable to Common Shares — 100.0%

 

  $ 674,076,946  
   

 

 

 

 

(a) 

All or a portion of the security has been pledged and/or segregated as collateral in connection with outstanding exchange-traded options written.

(b) 

All or a portion of the security has been pledged as collateral in connection with outstanding OTC derivatives.

(c) 

Non-income producing security.

(d) 

Annualized 7-day yield as of period end.

 
(e) 

During the year ended December 31, 2018, investments in issuers considered to be affiliates of the Trust for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate   Shares
Investment
Value Held at
12/31/17
    Net
Activity
    Shares
Investment
Value Held at
12/31/18
    Value at
12/31/18
    Income     Net
Realized
Gain (Loss) (a)
    Change in
Unrealized
Appreciation
(Depreciation)
 

BlackRock Liquidity Funds, T-Fund, Institutional Class

    3,142,974       11,646,380       14,789,354     $ 14,789,354     $ 80,954     $     $  

SL Liquidity Series, LLC, Money Market Series

                            13,698 (b)       (97      
       

 

 

   

 

 

   

 

 

   

 

 

 
        $ 14,789,354     $ 94,652     $ (97   $  
       

 

 

   

 

 

   

 

 

   

 

 

 

 

  (a) 

Includes net capital gain distributions, if applicable.

 
  (b) 

Represents securities lending income earned from the reinvestments of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

 

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

Derivative Financial Instruments Outstanding as of Period End

Exchange-Traded Options Purchased

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call                                                   

Bank of America Corp.

     181          01/04/19        USD     28.00        USD     446        $ 272  

Altria Group, Inc.

     309          01/18/19        USD     62.50        USD     1,526          1,390  

Bank of America Corp.

     344          01/18/19        USD     29.00        USD     848          860  
                          

 

 

 
                           $ 2,522  
                          

 

 

 

Exchange-Traded Options Written

 

Description    Number of
Contracts
       Expiration
Date
      

Exercise

Price

       Notional
Amount (000)
       Value  
Call                                                   

U. S. Bancorp

     61          01/03/19        USD     55.50        USD     279        $  

Altria Group, Inc.

     430          01/04/19        USD     55.50        USD     2,214          (16,770

Bank of America Corp.

     363          01/04/19        USD     29.00        USD     894          (363

Baxter International, Inc.

     141          01/04/19        USD     68.50        USD     928          (3,102

Biogen, Inc.

     46          01/04/19        USD     337.50        USD     1,384          (9,890

Carnival Corp.

     410          01/04/19        USD     63.50        USD     2,021          (2,050

Chevron Corp.

     177          01/04/19        USD     118.00        USD     1,926          (531

 

 

SCHEDULES OF INVESTMENTS      31  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Capital and Income Fund (CII)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
      

Exercise

Price

       Notional
Amount (000)
       Value  
Call (continued)                                                   

Cognizant Technology Solutions Corp., Class A

     162          01/04/19        USD     72.00        USD     1,028        $ (8,100

D.R. Horton, Inc.

     371          01/04/19        USD     39.00        USD     1,286          (4,823

Delta Air Lines, Inc.

     234          01/04/19        USD     58.00        USD     1,168          (11,700

Delta Air Lines, Inc.

     234          01/04/19        USD     61.00        USD     1,168          (11,700

DowDuPont, Inc.

     212          01/04/19        USD     58.50        USD     1,134          (1,060

Emerson Electric Co.

     215          01/04/19        USD     67.00        USD     1,285          (12,900

Freeport-McMoRan, Inc.

     71          01/04/19        USD     12.50        USD     73          (71

Gilead Sciences, Inc.

     224          01/04/19        USD     69.50        USD     1,401          (448

Hartford Financial Services Group, Inc.

     316          01/04/19        USD     45.00        USD     1,405          (8,374

Humana, Inc.

     67          01/04/19        USD     342.50        USD     1,919          (1,005

JPMorgan Chase & Co.

     118          01/04/19        USD     112.00        USD     1,152          (5,900

Marathon Oil Corp.

     202          01/04/19        USD     17.50        USD     290          (3,636

O’Reilly Automotive, Inc.

     34          01/04/19        USD     355.00        USD     1,171          (3,032

Pfizer, Inc.

     377          01/04/19        USD     43.50        USD     1,646          (19,793

Pfizer, Inc.

     94          01/04/19        USD     44.50        USD     410          (1,598

Pfizer, Inc.

     94          01/04/19        USD     46.50        USD     410          (376

Pfizer, Inc.

     220          01/04/19        USD     45.00        USD     960          (1,540

U. S. Bancorp

     61          01/04/19        USD     55.50        USD     279           

Urban Outfitters, Inc.

     38          01/04/19        USD     40.00        USD     126          (1,900

Urban Outfitters, Inc.

     224          01/04/19        USD     39.00        USD     744          (11,200

Alphabet, Inc., Class A

     4          01/11/19        USD     1,100.00        USD     418          (1,840

Altria Group, Inc.

     430          01/11/19        USD     55.01        USD     2,124          (141

Apple, Inc.

     280          01/11/19        USD     180.96        USD     4,417          (956

BP PLC — ADR

     360          01/11/19        USD     42.00        USD     1,365          (1,080

Bank of America Corp.

     92          01/11/19        USD     29.00        USD     227          (276

Bank of America Corp.

     377          01/11/19        USD     27.00        USD     929          (754

Bank of America Corp.

     334          01/11/19        USD     26.50        USD     823          (1,336

Bank of America Corp.

     98          01/11/19        USD     25.00        USD     241          (3,822

Bank of America Corp.

     166          01/11/19        USD     28.23        USD     409          (52

Biogen, Inc.

     13          01/11/19        USD     327.50        USD     391          (1,787

Carnival Corp.

     221          01/11/19        USD     60.00        USD     1,090          (1,105

Chevron Corp.

     125          01/11/19        USD     119.00        USD     1,360          (625

Comcast Corp., Class A

     512          01/11/19        USD     38.00        USD     1,743          (2,560

D.R. Horton, Inc.

     395          01/11/19        USD     39.00        USD     1,369          (4,345

DISH Network Corp., Class A

     235          01/11/19        USD     34.00        USD     587          (2,350

Delta Air Lines, Inc.

     169          01/11/19        USD     58.00        USD     843          (1,014

DowDuPont, Inc.

     145          01/11/19        USD     58.50        USD     775          (870

DowDuPont, Inc.

     163          01/11/19        USD     55.00        USD     872          (9,535

Emerson Electric Co.

     162          01/11/19        USD     66.00        USD     968          (2,430

FirstEnergy Corp.

     100          01/11/19        USD     39.23        USD     376          (975

Fortive Corp.

     136          01/11/19        USD     74.00        USD     920          (17,000

Freeport-McMoRan, Inc.

     516          01/11/19        USD     11.00        USD     532          (6,450

Freeport-McMoRan, Inc.

     482          01/11/19        USD     11.93        USD     497          (520

Freeport-McMoRan, Inc.

     71          01/11/19        USD     12.20        USD     73          (38

Gilead Sciences, Inc.

     80          01/11/19        USD     72.00        USD     500          (480

Hartford Financial Services Group, Inc.

     316          01/11/19        USD     45.00        USD     1,405          (18,012

Lowe’s Cos., Inc.

     94          01/11/19        USD     96.00        USD     868          (6,157

Marathon Oil Corp.

     202          01/11/19        USD     17.50        USD     290          (808

Microsoft Corp.

     319          01/11/19        USD     112.00        USD     3,240          (3,828

Pfizer, Inc.

     95          01/11/19        USD     46.50        USD     415          (855

Pfizer, Inc.

     220          01/11/19        USD     45.00        USD     960          (5,280

U.S. Bancorp

     179          01/11/19        USD     54.50        USD     818          (716

U.S. Bancorp

     98          01/11/19        USD     54.00        USD     448          (392

Urban Outfitters, Inc.

     224          01/11/19        USD     39.00        USD     744          (10,080

Walmart, Inc.

     378          01/11/19        USD     99.00        USD     3,521          (5,481

AES Corp.

     400          01/18/19        USD     16.00        USD     578          (2,000

AES Corp.

     380          01/18/19        USD     15.40        USD     549          (2,564

Ally Financial, Inc.

     642          01/18/19        USD     27.00        USD     1,455          (9,630

Ally Financial, Inc.

     124          01/18/19        USD     24.00        USD     281          (3,720

Alphabet, Inc., Class A

     4          01/18/19        USD     1,130.00        USD     418          (1,660

Alphabet, Inc., Class A

     21          01/18/19        USD     1,100.00        USD     2,194          (20,790

Altria Group, Inc.

     309          01/18/19        USD     67.50        USD     1,526          (927

 

 

32    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Capital and Income Fund (CII)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
      

Exercise

Price

       Notional
Amount (000)
       Value  
Call (continued)                                                   

Altria Group, Inc.

     465          01/18/19        USD     55.00        USD     2,297        $ (5,115

Amdocs Ltd.

     235          01/18/19        USD     65.00        USD     1,377          (15,275

Assured Guaranty Ltd.

     200          01/18/19        USD     42.00        USD     766          (900

Assured Guaranty Ltd.

     387          01/18/19        USD     39.00        USD     1,481          (25,155

BP PLC — ADR

     334          01/18/19        USD     42.00        USD     1,267          (1,002

BP PLC — ADR

     221          01/18/19        USD     41.00        USD     838          (1,547

Bank of America Corp.

     688          01/18/19        USD     30.00        USD     1,695          (688

Baxter International, Inc.

     121          01/18/19        USD     65.40        USD     796          (20,961

Biogen, Inc.

     30          01/18/19        USD     340.00        USD     903          (2,025

CDW Corp.

     332          01/18/19        USD     90.00        USD     2,691          (5,810

CDW Corp.

     108          01/18/19        USD     85.00        USD     875          (13,230

Carnival Corp.

     120          01/18/19        USD     60.00        USD     592          (600

Centene Corp.

     234          01/18/19        USD     135.00        USD     2,698          (1,170

Chevron Corp.

     124          01/18/19        USD     120.00        USD     1,349          (1,860

Chevron Corp.

     209          01/18/19        USD     125.00        USD     2,274          (731

Cisco Systems, Inc.

     407          01/18/19        USD     46.00        USD     1,764          (9,361

Cognizant Technology Solutions Corp., Class A

     20          01/18/19        USD     67.50        USD     127          (550

Cognizant Technology Solutions Corp., Class A

     163          01/18/19        USD     71.00        USD     1,035          (917

Comcast Corp., Class A

     273          01/18/19        USD     38.75        USD     930          (682

DISH Network Corp., Class A

     277          01/18/19        USD     35.00        USD     692          (2,770

DISH Network Corp., Class A

     182          01/18/19        USD     32.50        USD     454          (1,365

Delta Air Lines, Inc.

     231          01/18/19        USD     57.50        USD     1,153          (2,541

Dollar General Corp.

     129          01/18/19        USD     115.00        USD     1,394          (7,740

DowDuPont, Inc.

     365          01/18/19        USD     60.00        USD     1,952          (3,285

DowDuPont, Inc.

     163          01/18/19        USD     55.00        USD     872          (15,893

E*Trade Financial Corp.

     412          01/18/19        USD     50.00        USD     1,808          (3,914

Emerson Electric Co.

     215          01/18/19        USD     67.50        USD     1,285          (1,612

FirstEnergy Corp.

     104          01/18/19        USD     40.00        USD     391          (1,040

Fortive Corp.

     320          01/18/19        USD     80.00        USD     2,165          (56,000

Freeport-McMoRan, Inc.

     71          01/18/19        USD     13.00        USD     73          (106

Freeport-McMoRan, Inc.

     482          01/18/19        USD     12.00        USD     497          (2,410

Freeport-McMoRan, Inc.

     516          01/18/19        USD     11.00        USD     532          (10,578

Gilead Sciences, Inc.

     167          01/18/19        USD     75.00        USD     1,045          (334

Humana, Inc.

     33          01/18/19        USD     320.00        USD     945          (3,300

J.M. Smucker Co.

     62          01/18/19        USD     110.00        USD     580          (310

J.M. Smucker Co.

     154          01/18/19        USD     105.00        USD     1,440          (2,310

JPMorgan Chase & Co.

     270          01/18/19        USD     110.00        USD     2,636          (2,160

JPMorgan Chase & Co.

     83          01/18/19        USD     100.00        USD     810          (13,114

KAR Auction Services, Inc.

     260          01/18/19        USD     60.00        USD     1,241          (1,300

Laboratory Corp. of America Holdings

     301          01/18/19        USD     150.00        USD     3,803          (10,535

Lennar Corp., Class A

     157          01/18/19        USD     45.00        USD     615          (4,553

Lowe’s Cos., Inc.

     131          01/18/19        USD     92.50        USD     1,210          (34,322

Marathon Oil Corp.

     48          01/18/19        USD     18.00        USD     69          (120

Marathon Oil Corp.

     320          01/18/19        USD     15.00        USD     459          (12,800

Microsoft Corp.

     345          01/18/19        USD     110.00        USD     3,504          (16,215

Microsoft Corp.

     33          01/18/19        USD     112.00        USD     335          (1,588

Norfolk Southern Corp.

     160          01/18/19        USD     160.00        USD     2,393          (18,000

Novartis AG — ADR

     130          01/18/19        USD     90.00        USD     1,116          (3,575

Novo Nordisk A/S — ADR

     324          01/18/19        USD     45.00        USD     1,493          (56,700

O’Reilly Automotive, Inc.

     67          01/18/19        USD     360.00        USD     2,307          (30,150

O’Reilly Automotive, Inc.

     33          01/18/19        USD     370.00        USD     1,136          (7,095

Packaging Corp. of America

     17          01/18/19        USD     105.00        USD     142          (510

Packaging Corp. of America

     53          01/18/19        USD     100.00        USD     442          (1,590

Packaging Corp. of America

     283          01/18/19        USD     95.00        USD     2,362          (8,490

Pfizer, Inc.

     130          01/18/19        USD     44.00        USD     567          (10,725

Pfizer, Inc.

     94          01/18/19        USD     45.00        USD     410          (3,901

Regions Financial Corp.

     377          01/18/19        USD     14.00        USD     504          (12,064

Rio Tinto PLC — ADR

     67          01/18/19        USD     52.50        USD     325          (1,340

SunTrust Banks, Inc.

     615          01/18/19        USD     57.50        USD     3,102          (3,997

Suncor Energy, Inc.

     74          01/18/19        USD     36.00        USD     207          (370

Suncor Energy, Inc.

     101          01/18/19        USD     35.00        USD     282          (505

Suncor Energy, Inc.

     119          01/18/19        USD     34.00        USD     333          (476

 

 

SCHEDULES OF INVESTMENTS      33  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Capital and Income Fund (CII)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
      

Exercise

Price

       Notional
Amount (000)
       Value  
Call (continued)                                                   

Suncor Energy, Inc.

     318          01/18/19        USD     30.00        USD     889        $ (6,042

Taiwan Semiconductor Manufacturing Co. Ltd.

     265          01/18/19        USD     40.00        USD     978          (6,625

U.S. Bancorp

     229          01/18/19        USD     55.00        USD     1,047          (229

UnitedHealth Group, Inc.

     54          01/18/19        USD     270.00        USD     1,345          (5,697

Urban Outfitters, Inc.

     194          01/18/19        USD     39.00        USD     644          (1,940

Walmart, Inc.

     255          01/18/19        USD     100.00        USD     2,375          (5,992

Alphabet, Inc., Class A

     8          01/25/19        USD     1,057.50        USD     836          (24,200

Altria Group, Inc.

     464          01/25/19        USD     55.00        USD     2,292          (7,656

BP PLC — ADR

     221          01/25/19        USD     41.00        USD     838          (2,762

Bank of America Corp.

     378          01/25/19        USD     27.00        USD     931          (4,725

Baxter International, Inc.

     110          01/25/19        USD     66.00        USD     724          (20,570

Biogen, Inc.

     13          01/25/19        USD     330.00        USD     391          (2,340

Biogen, Inc.

     52          01/25/19        USD     307.50        USD     1,565          (40,820

Carnival Corp.

     250          01/25/19        USD     58.00        USD     1,233          (1,250

Chevron Corp.

     86          01/25/19        USD     119.00        USD     936          (4,085

Cisco Systems, Inc.

     137          01/25/19        USD     49.00        USD     594          (753

Cisco Systems, Inc.

     187          01/25/19        USD     42.00        USD     810          (37,961

Cognizant Technology Solutions Corp., Class A

     19          01/25/19        USD     68.50        USD     121          (570

Comcast Corp., Class A

     113          01/25/19        USD     38.50        USD     385          (847

D.R. Horton, Inc.

     383          01/25/19        USD     38.00        USD     1,327          (17,427

DISH Network Corp., Class A

     424          01/25/19        USD     34.00        USD     1,059          (31,800

DISH Network Corp., Class A

     182          01/25/19        USD     32.50        USD     454          (3,640

Delta Air Lines, Inc.

     189          01/25/19        USD     57.00        USD     943          (3,402

DowDuPont, Inc.

     289          01/25/19        USD     57.50        USD     1,546          (14,017

DowDuPont, Inc.

     163          01/25/19        USD     55.00        USD     872          (19,886

E*Trade Financial Corp.

     269          01/25/19        USD     45.50        USD     1,180          (29,994

Emerson Electric Co.

     132          01/25/19        USD     60.00        USD     789          (24,090

FirstEnergy Corp.

     412          01/25/19        USD     39.27        USD     1,547          (10,518

Freeport-McMoRan, Inc.

     516          01/25/19        USD     11.50        USD     532          (10,062

Gilead Sciences, Inc.

     49          01/25/19        USD     73.00        USD     306          (588

Gilead Sciences, Inc.

     80          01/25/19        USD     69.00        USD     500          (2,880

Hartford Financial Services Group, Inc.

     100          01/25/19        USD     43.50        USD     445          (18,550

Humana, Inc.

     76          01/25/19        USD     312.50        USD     2,177          (10,260

JPMorgan Chase & Co.

     63          01/25/19        USD     107.00        USD     615          (2,173

JPMorgan Chase & Co.

     83          01/25/19        USD     101.00        USD     810          (12,741

Lowe’s Cos., Inc.

     160          01/25/19        USD     93.00        USD     1,478          (42,240

Marathon Oil Corp.

     626          01/25/19        USD     19.00        USD     898          (2,504

Microsoft Corp.

     153          01/25/19        USD     113.00        USD     1,554          (7,114

Microsoft Corp.

     145          01/25/19        USD     106.00        USD     1,473          (30,160

Norfolk Southern Corp.

     160          01/25/19        USD     160.00        USD     2,393          (37,600

Pfizer, Inc.

     51          01/25/19        USD     45.00        USD     223          (2,856

Pfizer, Inc.

     50          01/25/19        USD     44.50        USD     218          (3,725

Pfizer, Inc.

     171          01/25/19        USD     44.00        USD     746          (16,673

SunTrust Banks, Inc.

     615          01/25/19        USD     55.21        USD     3,102          (11,722

Suncor Energy, Inc.

     319          01/25/19        USD     30.00        USD     892          (8,932

U.S. Bancorp

     169          01/25/19        USD     52.00        USD     772          (1,014

UnitedHealth Group, Inc.

     50          01/25/19        USD     275.00        USD     1,246          (2,925

UnitedHealth Group, Inc.

     129          01/25/19        USD     250.00        USD     3,214          (98,040

Urban Outfitters, Inc.

     240          01/25/19        USD     36.00        USD     797          (14,400

Walmart, Inc.

     315          01/25/19        USD     92.00        USD     2,934          (97,650

J.M. Smucker Co.

     61          01/28/19        USD     105.00        USD     570          (1,196

Novo Nordisk A/S — ADR

     419          01/28/19        USD     45.90        USD     1,930          (61,577

Pfizer, Inc.

     146          01/28/19        USD     45.10        USD     637          (8,983

Cisco Systems, Inc.

     106          01/31/19        USD     46.25        USD     459          (5,824

J.M. Smucker Co.

     231          01/31/19        USD     103.92        USD     2,160          (7,730

O’Reilly Automotive, Inc.

     67          01/31/19        USD     352.00        USD     2,307          (57,841

Alphabet, Inc., Class A

     20          02/01/19        USD     1,050.00        USD     2,090          (88,700

Apple, Inc.

     120          02/01/19        USD     165.00        USD     1,893          (54,900

BP PLC — ADR Each Representing Six PLC

     221          02/01/19        USD     41.01        USD     838          (5,614

Bank of America Corp.

     835          02/01/19        USD     27.00        USD     2,057          (14,613

Carnival Corp.

     221          02/01/19        USD     51.50        USD     1,090          (16,575

Cisco Systems, Inc.

     187          02/01/19        USD     42.50        USD     810          (36,185

 

 

34    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Capital and Income Fund (CII)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
      

Exercise

Price

       Notional
Amount (000)
       Value  
Call (continued)                                                   

Cisco Systems, Inc.

     158          02/01/19        USD     48.28        USD     685        $ (4,028

Comcast Corp., Class A

     324          02/01/19        USD     37.50        USD     1,103          (7,452

DISH Network Corp., Class A

     153          02/01/19        USD     33.50        USD     382          (11,475

DISH Network Corp., Class A

     182          02/01/19        USD     32.50        USD     454          (1,820

Delta Air Lines, Inc.

     188          02/01/19        USD     55.00        USD     938          (9,682

Dollar General Corp.

     93          02/01/19        USD     108.00        USD     1,005          (33,945

E*Trade Financial Corp.

     388          02/01/19        USD     45.50        USD     1,703          (49,858

Emerson Electric Co.

     162          02/01/19        USD     63.00        USD     968          (14,175

FirstEnergy Corp.

     101          02/01/19        USD     39.93        USD     379          (2,161

Gilead Sciences, Inc.

     50          02/01/19        USD     70.00        USD     313          (2,075

Gilead Sciences, Inc.

     79          02/01/19        USD     70.50        USD     494          (2,607

JPMorgan Chase & Co.

     83          02/01/19        USD     101.00        USD     810          (15,438

Lowe’s Cos., Inc.

     217          02/01/19        USD     95.50        USD     2,004          (41,990

Marathon Oil Corp.

     320          02/01/19        USD     16.00        USD     459          (9,120

Microsoft Corp.

     145          02/01/19        USD     106.00        USD     1,473          (37,773

Pfizer, Inc.

     57          02/01/19        USD     44.00        USD     249          (6,298

Suncor Energy, Inc.

     318          02/01/19        USD     30.00        USD     889          (12,402

U.S. Bancorp

     204          02/01/19        USD     47.50        USD     932          (15,096

UnitedHealth Group, Inc.

     106          02/01/19        USD     262.50        USD     2,641          (39,750

UnitedHealth Group, Inc.

     129          02/01/19        USD     250.00        USD     3,214          (111,263

BP PLC — ADR Each Representing Six PLC

     360          02/08/19        USD     39.26        USD     1,365          (27,813

Bank of America Corp.

     619          02/08/19        USD     25.00        USD     1,525          (55,091

Bank of America Corp.

     102          02/08/19        USD     24.64        USD     251          (9,604

Cisco Systems, Inc.

     187          02/08/19        USD     42.74        USD     810          (37,522

Comcast Corp., Class A

     277          02/08/19        USD     35.32        USD     943          (22,486

Pfizer, Inc.

     47          02/08/19        USD     42.66        USD     205          (8,225

Suncor Energy, Inc.

     319          02/08/19        USD     30.01        USD     892          (14,772

US Bancorp

     308          02/08/19        USD     47.00        USD     1,408          (32,648

FirstEnergy Corp.

     412          02/11/19        USD     38.20        USD     1,547          (33,668

Taiwan Semiconductor Manufacturing Co. Ltd.

     105          02/13/19        USD     37.97        USD     388          (11,881

AES Corp.

     945          02/15/19        USD     16.00        USD     1,366          (9,450

BP PLC — ADR

     360          02/15/19        USD     42.00        USD     1,365          (7,380

Bank of America Corp.

     378          02/15/19        USD     27.00        USD     931          (10,962

Bank of America Corp.

     364          02/15/19        USD     29.00        USD     897          (2,002

Baxter International, Inc.

     142          02/15/19        USD     70.00        USD     935          (14,129

Chevron Corp.

     106          02/15/19        USD     111.00        USD     1,153          (31,057

Cisco Systems, Inc.

     107          02/15/19        USD     46.00        USD     464          (9,897

Cisco Systems, Inc.

     187          02/15/19        USD     43.00        USD     810          (40,673

Cognizant Technology Solutions Corp., Class A

     21          02/15/19        USD     65.00        USD     133          (4,462

Comcast Corp., Class A

     158          02/15/19        USD     40.00        USD     538          (1,580

DISH Network Corp., Class A

     130          02/15/19        USD     27.50        USD     325          (11,050

Dollar General Corp.

     93          02/15/19        USD     110.00        USD     1,005          (33,015

Freeport-McMoRan, Inc.

     516          02/15/19        USD     12.00        USD     532          (12,384

JPMorgan Chase & Co.

     84          02/15/19        USD     105.00        USD     820          (9,534

Laboratory Corp. of America Holdings

     279          02/15/19        USD     140.00        USD     3,525          (41,850

Lennar Corp., Class A

     150          02/15/19        USD     45.00        USD     587          (10,575

Lowe’s Cos., Inc.

     160          02/15/19        USD     95.00        USD     1,478          (43,520

Microsoft Corp.

     143          02/15/19        USD     106.20        USD     1,452          (48,800

Regions Financial Corp.

     377          02/15/19        USD     15.00        USD     504          (8,105

Regions Financial Corp.

     624          02/15/19        USD     14.00        USD     835          (30,888

US Bancorp

     308          02/15/19        USD     47.50        USD     1,408          (29,722

Walmart, Inc.

     315          02/15/19        USD     92.50        USD     2,934          (114,189

Comcast Corp., Class A

     277          02/21/19        USD     35.32        USD     943          (28,290

Lowe’s Cos., Inc.

     218          03/15/19        USD     100.00        USD     2,013          (50,249

Novo Nordisk A/S — ADR

     419          03/15/19        USD     46.00        USD     1,930          (93,228
                          

 

 

 
                           $ (3,279,879
                          

 

 

 

 

 

SCHEDULES OF INVESTMENTS      35  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Capital and Income Fund (CII)

 

OTC Options Written

 

Description    Counterparty    Number of
Contracts
     Expiration
Date
    

Exercise

Price

     Notional
Amount (000)
     Value  
Call                                                    

Amdocs Ltd.

   UBS AG      14,200        01/03/19        USD       66.55        USD       832      $  

Novartis AG — ADR

   Barclays Bank PLC      21,100        01/04/19        USD       90.40        USD       1,811        (62

CDW Corp.

   Barclays Bank PLC      42,200        01/09/19        USD       97.16        USD       3,420        (51

AES Corp.

   Credit Suisse International      45,300        01/10/19        USD       15.79        USD       655        (401

Assured Guaranty Ltd.

   Barclays Bank PLC      18,200        01/11/19        USD       41.72        USD       697        (368

Ally Financial, Inc.

   Citibank N.A.      38,400        01/23/19        USD       26.06        USD       870        (780

AES Corp.

   Bank of America N.A.      66,200        01/25/19        USD       14.78        USD       957        (20,553

KAR Auction Services, Inc.

   Morgan Stanley & Co. International PLC      25,800        01/25/19        USD       47.74        USD       1,231        (33,814

Assured Guaranty Ltd.

   Barclays Bank PLC      38,800        01/28/19        USD       38.68        USD       1,485        (37,431

Ally Financial, Inc.

   Citibank N.A.      73,200        01/29/19        USD       23.38        USD       1,659        (34,365

Rio Tinto PLC — ADR

   Goldman Sachs International      8,700        01/29/19        USD       49.49        USD       422        (9,509

Regions Financial Corp.

   Credit Suisse International      62,500        01/30/19        USD       13.72        USD       836        (21,328

SLM Corp.

   JPMorgan Chase Bank N.A.      81,500        01/30/19        USD       8.96        USD       677        (5,753

AES Corp.

   Goldman Sachs International      35,600        01/31/19        USD       15.25        USD       515        (5,136

SLM Corp.

   Morgan Stanley & Co. International PLC      112,300        02/04/19        USD       10.54        USD       933        (85

Rio Tinto PLC — ADR

   UBS AG      11,600        02/07/19        USD       47.17        USD       562        (33,156

Amdocs Ltd.

   JPMorgan Chase Bank N.A.      14,200        02/11/19        USD       60.49        USD       832        (11,469

Centene Corp.

   Credit Suisse International      23,400        02/12/19        USD       136.89        USD       2,698        (16,702

Rio Tinto PLC — ADR

   Goldman Sachs International      8,700        02/13/19        USD       49.49        USD       422        (12,711

SLM Corp.

   Credit Suisse International      134,600        02/13/19        USD       8.32        USD       1,119        (44,298
                     

 

 

 
                      $ (287,972
                     

 

 

 

Balances Reported in the Statements of Assets and Liabilities for Options Written

 

      Swap
Premium
Paid
     Swap
Premium
Received
     Unrealized
Appreciation
     Unrealized
Depreciation
     Value  

Options Written

     N/A        N/A      $ 4,923,979      $ (363,505    $ (3,567,851

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Assets — Derivative Financial Instruments

                    

Options purchased

                    

Investments at value — unaffiliated(a)

   $      $      $ 2,522      $      $      $      $ 2,522  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities — Derivative Financial Instruments

                    

Options written

                    

Investments at value

   $      $      $ 3,567,851      $      $      $      $ 3,567,851  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes options purchased at value as reported in the Schedule of Investments.

 

For the year ended December 31, 2018, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Net Realized Gain (Loss) from:

 

        

Options purchased(a)

   $      $      $ (19,044    $      $      $      $ (19,044

Options written

                   (368,218                           (368,218
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $      $      $ (387,262    $      $      $      $ (387,262
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

(a) Options purchased are included in net realized gain (loss) from investments.

  

 

 

36    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Capital and Income Fund (CII)

 

Derivative Financial Instruments Categorized by Risk Exposure (continued)

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Net Change in Unrealized Appreciation (Depreciation) on:

 

Options purchased(a)

   $      $      $ (7,849    $      $      $      $ (7,849

Options written

                   6,586,567                             6,586,567  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $      $      $ 6,578,718      $      $      $      $ 6,578,718  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Options purchased are included in net realized gain (loss) from investments.

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Options:

        

Average value of option contracts purchased

   $ 1,032  

Average value of option contracts written

   $ 5,256,404  

For more information about the Trust’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

Derivative Financial Instruments — Offsetting as of Period End

The Trust’s derivative assets and liabilities (by type) are as follows:

 

      Assets      Liabilities  

Derivative Financial Instruments:

     

Options

   $ 2,522 (a)      $ 3,567,851  

Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)

     (2,522      (3,279,879
  

 

 

    

 

 

 

Total derivative assets and liabilities subject to an MNA

   $      $ 287,972  
  

 

 

    

 

 

 

 

(a) 

Includes options purchased at value which is included in Investments at value — unaffiliated in the Statements of Assets and Liabilities and reported in the Schedule of Investments.

The following table presents the Trust’s derivative liabilities by counterparty net of amounts available for offset under an MNA and net of the related collateral and pledged by the Trust:

 

Counterparty    Derivative
Liabilities
Subject to
an MNA by
Counterparty
       Derivatives
Available
for Offset
       Non-cash
Collateral
Pledged (a)
       Cash
Collateral
Pledged
       Net Amount
of Derivative
Liabilities (b)
 

Bank of America N.A.

   $ 20,553        $        $        $        $ 20,553  

Barclays Bank PLC

     37,912                                     37,912  

Citibank N.A.

     35,145                   (35,145                  

Credit Suisse International

     82,729                                     82,729  

Goldman Sachs International

     27,356                                     27,356  

JPMorgan Chase Bank N.A.

     17,222                                     17,222  

Morgan Stanley & Co. International PLC

     33,899                                     33,899  

UBS AG

     33,156                                     33,156  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
   $ 287,972        $        $ (35,145      $        $ 252,827  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

Excess of collateral pledged to the individual counterparty is not shown for financial reporting purposes.

 
  (b) 

Net amount represents the net amount payable due to counterparty in the event of default. Net amount may be offset further by the options written receivable/payable on the Statements of Assets and Liabilities.

 

 

 

SCHEDULES OF INVESTMENTS      37  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Capital and Income Fund (CII)

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

      Level 1        Level 2        Level 3        Total  

Assets:

                 

Investments:

                 

Long-Term Investments:

                 

Common Stocks(a)

   $ 673,856,597        $        $        $ 673,856,597  

Short-Term Securities

     14,789,354                            14,789,354  

Options Purchased:

                 

Equity contracts

     2,522                            2,522  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ 688,648,473        $        $          688,648,473  
  

 

 

      

 

 

      

 

 

      

 

 

 

Derivative Financial Instruments(b)

                 

Liabilities

                 

Equity contracts

   $ (2,796,823      $ (771,028      $        $ (3,567,851
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

See above Schedule of Investments for values in each industry.

 
  (b) 

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

 

During the year ended December 31, 2018, there were no transfers between levels.

See notes to financial statements.

 

 

38    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments

December 31, 2018

  

BlackRock Enhanced Equity Dividend Trust (BDJ)

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Common Stocks — 98.0%  
Aerospace & Defense — 1.5%  

BAE Systems PLC

    1,038,080     $ 6,071,577  

Lockheed Martin Corp.(a)

    28,980       7,588,123  

Northrop Grumman Corp.(a)

    46,090       11,287,441  
   

 

 

 
    24,947,141  
Banks — 14.0%  

Bank of America Corp.(a)

    1,926,846       47,477,486  

Citigroup, Inc.(a)(b)

    956,689       49,805,229  

JPMorgan Chase & Co.(a)

    618,037       60,332,772  

U.S. Bancorp(a)

    237,963       10,874,909  

Wells Fargo & Co.(a)(b)

    1,304,191       60,097,121  
   

 

 

 
    228,587,517  
Beverages — 2.1%  

Diageo PLC

    455,749       16,285,915  

PepsiCo, Inc.(a)

    159,930       17,669,067  
   

 

 

 
    33,954,982  
Building Products — 1.0%  

Johnson Controls International PLC(a)

    427,730       12,682,194  

Masco Corp.(a)

    142,840       4,176,642  
   

 

 

 
    16,858,836  
Capital Markets — 3.7%  

Charles Schwab Corp.(a)

    170,420       7,077,543  

Goldman Sachs Group, Inc.(a)

    99,140       16,561,337  

Morgan Stanley(a)

    547,116       21,693,149  

State Street Corp.(a)

    243,512       15,358,302  
   

 

 

 
    60,690,331  
Chemicals — 1.0%  

DowDuPont, Inc.(a)

    299,795       16,033,037  
   

 

 

 
Communications Equipment — 1.8%  

Cisco Systems, Inc.(a)

    236,610       10,252,311  

Motorola Solutions, Inc.(a)

    171,600       19,740,864  
   

 

 

 
    29,993,175  
Construction Materials — 0.6%  

CRH PLC

    387,800       10,265,793  
   

 

 

 
Containers & Packaging — 0.3%  

International Paper Co.(a)

    135,700       5,476,852  
   

 

 

 
Diversified Financial Services — 0.6%  

AXA Equitable Holdings, Inc.(a)

    563,941       9,378,339  
   

 

 

 
Diversified Telecommunication Services — 4.8%  

BCE, Inc.(a)

    122,500       4,842,425  

Verizon Communications, Inc.(a)

    1,318,370       74,118,761  
   

 

 

 
    78,961,186  
Electric Utilities — 3.1%  

Edison International(a)

    25,494       1,447,294  

FirstEnergy Corp.(a)

    649,320       24,381,966  

NextEra Energy, Inc.(a)

    83,346       14,487,202  

PG&E Corp.(a)(c)

    422,660       10,038,175  
   

 

 

 
    50,354,637  
Electronic Equipment, Instruments & Components — 0.2%  

CDW Corp.(a)

    46,740       3,788,277  
   

 

 

 
Energy Equipment & Services — 0.2%  

Baker Hughes a GE Co.(a)

    159,130       3,421,295  
   

 

 

 
Food Products — 2.0%  

Kellogg Co.(a)

    190,830       10,879,218  

Mondelez International, Inc., Class A(a)

    152,370       6,099,371  

Nestle SA, Registered Shares

    197,920       16,063,731  
   

 

 

 
    33,042,320  
Security   Shares     Value  
Health Care Equipment & Supplies — 3.8%  

Koninklijke Philips NV

    999,789     $ 35,052,090  

Medtronic PLC(a)

    301,650       27,438,084  
   

 

 

 
    62,490,174  
Health Care Providers & Services — 7.1%  

Anthem, Inc.(a)

    178,243       46,811,959  

Cardinal Health, Inc.(a)

    133,650       5,960,790  

CVS Health Corp.(a)

    251,606       16,485,225  

Humana, Inc.(a)

    47,087       13,489,484  

McKesson Corp.(a)

    120,390       13,299,484  

UnitedHealth Group, Inc.(a)

    83,360       20,766,643  
   

 

 

 
    116,813,585  
Household Durables — 0.6%  

Newell Brands, Inc.(a)

    487,020       9,053,702  
   

 

 

 
Household Products — 1.1%  

Procter & Gamble Co.(a)

    189,430       17,412,406  
   

 

 

 
Industrial Conglomerates — 2.7%  

3M Co.(a)

    58,900       11,222,806  

General Electric Co.(a)

    1,121,993       8,493,487  

Honeywell International, Inc.(a)

    132,500       17,505,900  

Siemens AG, Registered Shares

    61,410       6,853,451  
   

 

 

 
    44,075,644  
Insurance — 6.7%  

American International Group, Inc.(a)

    681,330       26,851,215  

Arthur J Gallagher & Co.(a)

    179,468       13,226,792  

Marsh & McLennan Cos., Inc.(a)

    183,800       14,658,050  

MetLife, Inc.(a)

    864,023       35,476,784  

Travelers Cos., Inc.(a)

    165,150       19,776,713  
   

 

 

 
    109,989,554  
IT Services — 0.7%  

Cognizant Technology Solutions Corp., Class A(a)

    179,819       11,414,910  
   

 

 

 
Leisure Products — 0.3%  

Mattel, Inc.(a)(c)

    480,106       4,796,259  
   

 

 

 
Machinery — 0.3%  

Pentair PLC(a)

    109,190       4,125,198  
   

 

 

 
Media — 1.6%  

Comcast Corp., Class A(a)

    778,105       26,494,475  
   

 

 

 
Multi-Utilities — 0.9%  

Public Service Enterprise Group, Inc.(a)

    282,440       14,701,002  
   

 

 

 
Multiline Retail — 0.9%  

Dollar General Corp.(a)

    127,417       13,771,229  
   

 

 

 
Oil, Gas & Consumable Fuels — 10.8%  

Anadarko Petroleum Corp.(a)

    151,310       6,633,430  

BP PLC

    5,057,210       31,970,100  

Devon Energy Corp.(a)

    390,044       8,791,592  

Enterprise Products Partners LP(a)

    921,260       22,653,783  

Hess Corp.(a)

    213,220       8,635,410  

Marathon Oil Corp.(a)

    355,070       5,091,704  

Marathon Petroleum Corp.(a)

    323,069       19,064,302  

ONEOK, Inc.(a)

    209,087       11,280,244  

Suncor Energy, Inc.(a)

    1,238,070       34,628,818  

TOTAL SA — ADR(a)

    138,977       7,251,820  

Williams Cos., Inc.(a)

    962,479       21,222,662  
   

 

 

 
    177,223,865  
Personal Products — 0.7%  

Unilever NV — NY Shares(a)

    222,480       11,969,424  
   

 

 

 
Pharmaceuticals — 11.3%  

AstraZeneca PLC

    480,846       35,893,193  

Bayer AG, Registered Shares

    173,437       12,062,327  
 

 

 

SCHEDULES OF INVESTMENTS      39  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Equity Dividend Trust (BDJ)

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Pharmaceuticals (continued)  

Merck & Co., Inc.(a)

    413,570     $ 31,600,884  

Novartis AG — ADR(a)

    229,790       19,718,280  

Novo Nordisk A/S — ADR(a)

    298,910       13,770,784  

Pfizer, Inc.(a)(b)

    1,635,245       71,378,444  
   

 

 

 
    184,423,912  
Road & Rail — 0.5%  

Union Pacific Corp.(a)

    54,020       7,467,185  
   

 

 

 
Semiconductors & Semiconductor Equipment — 2.0%  

QUALCOMM, Inc.(a)

    390,680       22,233,599  

Taiwan Semiconductor Manufacturing Co. Ltd. — ADR(a)

    283,441       10,461,807  
   

 

 

 
    32,695,406  
Software — 5.8%  

Constellation Software, Inc.

    13,090       8,378,866  

Microsoft Corp.(a)

    405,420       41,178,509  

Oracle Corp.(a)

    985,090       44,476,814  
   

 

 

 
    94,034,189  
Specialty Retail — 0.8%  

Lowe’s Cos., Inc.(a)

    147,090       13,585,232  
   

 

 

 
Technology Hardware, Storage & Peripherals — 1.4%  

Apple, Inc.(a)

    25,495       4,021,581  

Lenovo Group Ltd.

    7,154,000       4,832,792  

Samsung Electronics Co. Ltd. — GDR

    16,159       14,002,190  
   

 

 

 
    22,856,563  
Tobacco — 1.1%  

Altria Group, Inc.(a)

    374,820       18,512,360  
   

 

 

 

Total Long-Term Investments — 98.0%
(Cost — $1,404,910,521)

 

    1,603,659,992  
 

 

 

 
Security   Shares     Value  
Short-Term Securities — 2.7%  

BlackRock Liquidity Funds, T-Fund, Institutional Class, 2.32%(d)(e)

    44,526,058     $ 44,526,058  
   

 

 

 

Total Short-Term Securities — 2.7%
(Cost — $44,526,058)

 

    44,526,058  
 

 

 

 

Options Purchased — 0.0%
(Cost — $43,292)

 

    21,865  
 

 

 

 

Total Investments Before Options Written — 100.7%
(Cost — $1,449,479,871)

 

    1,648,207,915  
 

 

 

 

Options Written — (0.6)%
(Premiums Received — $22,402,546)

 

    (9,021,122
 

 

 

 

Total Investments, Net of Options Written — 100.1%
(Cost — $1,427,077,325)

 

    1,639,186,793  

Liabilities in Excess of Other Assets — (0.1)%

 

    (950,285
 

 

 

 

Net Assets — 100.0%

 

  $ 1,638,236,508  
 

 

 

 

 

(a) 

All or a portion of the security has been pledged and/or segregated as collateral in connection with outstanding exchange-traded options written.

(b) 

All or a portion of the security has been pledged as collateral in connection with outstanding OTC derivatives.

(c) 

Non-income producing security.

(d) 

Annualized 7-day yield as of period end.

 
(e) 

During the year ended December 31, 2018, investments in issuers considered to be affiliates of the Trust for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate    Shares
Held at
12/31/17
     Net
Activity
     Shares
Held at
12/31/18
     Value at
12/31/18
     Income      Net
Realized
Gain (Loss)
 (a)
     Change in
Unrealized

Appreciation
(Depreciation)
 

BlackRock Liquidity Funds, T-Fund, Institutional Class

     4,967,189        39,558,869        44,526,058      $ 44,526,058      $ 262,280      $      $  

SL Liquidity Series, LLC, Money Market Series

                                 822 (b)        (51       
           

 

 

    

 

 

    

 

 

    

 

 

 
   $ 44,526,058      $ 263,102        (51    $  
           

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes net capital gain distributions, if applicable.

 
  (b) 

Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

 

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

Derivative Financial Instruments Outstanding as of Period End

Exchange-Traded Options Purchased

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call                                                   

Bank of America Corp.

     803          01/04/19        USD     28.00        USD     1,979        $ 1,205  

Wells Fargo & Co.

     851          01/04/19        USD     50.00        USD     3,921          1,276  

Wells Fargo & Co.

     851          01/11/19        USD     51.50        USD     3,921          3,404  

AXA Equitable Holdings, Inc.

     828          01/18/19        USD     17.50        USD     1,377          12,420  

Altria Group, Inc.

     430          01/18/19        USD     62.50        USD     2,124          1,935  

Bank of America Corp.

     650          01/18/19        USD     29.00        USD     1,602          1,625  
                          

 

 

 
     $ 21,865  
    

 

 

 

 

 

40    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Equity Dividend Trust (BDJ)

 

Exchange-Traded Options Written

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call                                                   

American International Group, Inc.

     317          01/03/19        USD     46.00        USD     1,249        $  

MetLife, Inc.

     234          01/03/19        USD     47.00        USD     961           

Public Service Enterprise Group, Inc.

     675          01/03/19        USD     54.75        USD     3,513          (86

U.S. Bancorp

     188          01/03/19        USD     55.50        USD     859           

3M Co.

     27          01/04/19        USD     202.50        USD     514          (216

Altria Group, Inc.

     713          01/04/19        USD     55.50        USD     3,522          (27,807

American International Group, Inc.

     254          01/04/19        USD     45.25        USD     1,001          (1

Anadarko Petroleum Corp.

     313          01/04/19        USD     55.00        USD     1,372          (1,878

Anthem, Inc.

     284          01/04/19        USD     290.00        USD     7,459          (2,840

Bank of America Corp.

     738          01/04/19        USD     28.50        USD     1,818          (738

Bank of America Corp.

     869          01/04/19        USD     29.00        USD     2,141          (869

Cardinal Health, Inc.

     117          01/04/19        USD     55.50        USD     522          (2,925

Charles Schwab Corp.

     251          01/04/19        USD     47.00        USD     1,042          (7,530

Citigroup, Inc.

     338          01/04/19        USD     65.00        USD     1,760          (3,718

Cognizant Technology Solutions Corp., Class A

     136          01/04/19        USD     72.00        USD     863          (6,800

Devon Energy Corp.

     562          01/04/19        USD     28.50        USD     1,267          (2,248

DowDuPont, Inc.

     290          01/04/19        USD     58.50        USD     1,551          (1,450

Goldman Sachs Group, Inc.

     160          01/04/19        USD     205.00        USD     2,673          (1,600

Hess Corp.

     572          01/04/19        USD     56.50        USD     2,317          (2,860

Humana, Inc.

     110          01/04/19        USD     342.50        USD     3,151          (1,650

JPMorgan Chase & Co.

     490          01/04/19        USD     112.00        USD     4,783          (24,500

Marathon Oil Corp.

     303          01/04/19        USD     17.50        USD     435          (5,454

Marathon Petroleum Corp.

     469          01/04/19        USD     67.00        USD     2,768          (1,876

McKesson Corp.

     116          01/04/19        USD     130.00        USD     1,281          (1,160

McKesson Corp.

     48          01/04/19        USD     131.50        USD     530           

Medtronic PLC

     262          01/04/19        USD     95.00        USD     2,383          (2,096

MetLife, Inc.

     354          01/04/19        USD     46.25        USD     1,454           

Morgan Stanley

     631          01/04/19        USD     46.00        USD     2,502          (13,882

Oracle Corp.

     872          01/04/19        USD     48.00        USD     3,937          (2,616

PepsiCo, Inc.

     124          01/04/19        USD     116.00        USD     1,370          (744

Pfizer, Inc.

     1,786          01/04/19        USD     43.50        USD     7,796          (93,765

Pfizer, Inc.

     343          01/04/19        USD     44.50        USD     1,497          (5,831

Pfizer, Inc.

     343          01/04/19        USD     46.50        USD     1,497          (1,372

Pfizer, Inc.

     647          01/04/19        USD     45.00        USD     2,824          (4,529

Procter & Gamble Co.

     220          01/04/19        USD     94.50        USD     2,022          (2,970

QUALCOMM, Inc.

     746          01/04/19        USD     59.00        USD     4,245          (13,055

Travelers Cos., Inc.

     132          01/04/19        USD     131.00        USD     1,581           

U.S. Bancorp

     188          01/04/19        USD     55.50        USD     859           

Wells Fargo & Co.

     410          01/04/19        USD     56.00        USD     1,889          (820

Wells Fargo & Co.

     441          01/04/19        USD     54.00        USD     2,032          (7,497

Williams Cos., Inc.

     50          01/04/19        USD     25.50        USD     110          (250

Williams Cos., Inc.

     165          01/04/19        USD     27.25        USD     364           

Unilever NV — NY Shares

     652          01/08/19        USD     55.60        USD     3,508          (7,443

3M Co.

     188          01/11/19        USD     210.00        USD     3,582          (2,068

Altria Group, Inc.

     713          01/11/19        USD     55.01        USD     3,522          (234

American International Group, Inc.

     493          01/11/19        USD     44.00        USD     1,943          (6,409

American International Group, Inc.

     402          01/11/19        USD     39.00        USD     1,584          (47,838

Anthem, Inc.

     270          01/11/19        USD     297.50        USD     7,091          (4,590

Bank of America Corp.

     411          01/11/19        USD     29.00        USD     1,013          (1,233

Bank of America Corp.

     642          01/11/19        USD     27.00        USD     1,582          (1,284

Bank of America Corp.

     777          01/11/19        USD     26.50        USD     1,915          (3,108

Bank of America Corp.

     198          01/11/19        USD     25.00        USD     488          (7,722

Bank of America Corp.

     1,065          01/11/19        USD     28.23        USD     2,624          (331

CVS Health Corp.

     87          01/11/19        USD     78.50        USD     570          (4,350

Citigroup, Inc.

     458          01/11/19        USD     66.50        USD     2,384          (23,358

Cognizant Technology Solutions Corp., Class A

     210          01/11/19        USD     71.00        USD     1,333          (1,050

Comcast Corp., Class A

     711          01/11/19        USD     38.00        USD     2,421          (3,555

DowDuPont, Inc.

     163          01/11/19        USD     58.50        USD     872          (978

DowDuPont, Inc.

     177          01/11/19        USD     55.00        USD     947          (10,354

Enterprise Products Partners LP

     632          01/11/19        USD     27.00        USD     1,554          (6,320

FirstEnergy Corp.

     548          01/11/19        USD     39.23        USD     2,058          (5,345

General Electric Co.

     509          01/11/19        USD     7.50        USD     385          (17,561

Lowe’s Cos., Inc.

     104          01/11/19        USD     96.00        USD     961          (6,812

Marathon Oil Corp.

     303          01/11/19        USD     17.50        USD     435          (1,212

Marathon Petroleum Corp.

     67          01/11/19        USD     65.00        USD     395          (804

 

 

SCHEDULES OF INVESTMENTS      41  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Equity Dividend Trust (BDJ)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call (continued)                                                   

Marathon Petroleum Corp.

     136          01/11/19        USD     65.50        USD     803        $ (1,156

Medtronic PLC

     186          01/11/19        USD     97.00        USD     1,692          (2,139

MetLife, Inc.

     354          01/11/19        USD     45.75        USD     1,454          (757

Microsoft Corp.

     291          01/11/19        USD     112.00        USD     2,956          (3,492

Morgan Stanley

     152          01/11/19        USD     41.00        USD     603          (7,220

Morgan Stanley

     631          01/11/19        USD     46.01        USD     2,502          (847

Northrop Grumman Corp.

     169          01/11/19        USD     260.00        USD     4,139          (16,900

Oracle Corp.

     902          01/11/19        USD     50.00        USD     4,073          (3,608

PepsiCo, Inc.

     123          01/11/19        USD     119.00        USD     1,359          (676

PepsiCo, Inc.

     114          01/11/19        USD     120.00        USD     1,259          (798

Pfizer, Inc.

     344          01/11/19        USD     46.50        USD     1,502          (3,096

Pfizer, Inc.

     647          01/11/19        USD     45.00        USD     2,824          (15,528

Procter & Gamble Co.

     121          01/11/19        USD     93.00        USD     1,112          (12,705

QUALCOMM, Inc.

     228          01/11/19        USD     60.00        USD     1,298          (8,436

State Street Corp.

     271          01/11/19        USD     72.43        USD     1,709          (367

Travelers Cos., Inc.

     277          01/11/19        USD     130.43        USD     3,317          (601

U.S. Bancorp

     287          01/11/19        USD     54.50        USD     1,312          (1,148

U.S. Bancorp

     204          01/11/19        USD     54.00        USD     932          (816

Union Pacific Corp.

     102          01/11/19        USD     149.00        USD     1,410          (3,519

Verizon Communications, Inc.

     967          01/11/19        USD     58.00        USD     5,436          (21,758

Wells Fargo & Co.

     410          01/11/19        USD     56.00        USD     1,889          (1,230

Wells Fargo & Co.

     441          01/11/19        USD     54.00        USD     2,032          (1,323

Williams Cos., Inc.

     1,073          01/11/19        USD     26.00        USD     2,366          (22,533

Williams Cos., Inc.

     633          01/11/19        USD     25.01        USD     1,396          (89

Williams Cos., Inc.

     50          01/11/19        USD     25.18        USD     110          (5

AXA Equitable Holdings, Inc.

     828          01/18/19        USD     22.50        USD     1,377          (28,980

Altria Group, Inc.

     430          01/18/19        USD     67.50        USD     2,124          (1,290

Altria Group, Inc.

     373          01/18/19        USD     55.00        USD     1,842          (4,103

American International Group, Inc.

     443          01/18/19        USD     46.00        USD     1,746          (3,544

American International Group, Inc.

     402          01/18/19        USD     39.00        USD     1,584          (58,893

Anadarko Petroleum Corp.

     279          01/18/19        USD     60.00        USD     1,223          (1,395

Anthem, Inc.

     63          01/18/19        USD     270.00        USD     1,655          (21,263

Anthem, Inc.

     102          01/18/19        USD     290.00        USD     2,679          (3,876

Anthem, Inc.

     213          01/18/19        USD     300.00        USD     5,594          (6,390

Arthur J Gallagher & Co.

     346          01/18/19        USD     80.00        USD     2,550          (12,110

Bank of America Corp.

     1,299          01/18/19        USD     30.00        USD     3,201          (1,299

CDW Corp.

     298          01/18/19        USD     90.00        USD     2,415          (5,215

CDW Corp.

     5          01/18/19        USD     85.00        USD     41          (612

CVS Health Corp.

     238          01/18/19        USD     77.50        USD     1,559          (952

CVS Health Corp.

     316          01/18/19        USD     210.00        USD     2,070          (316

Cardinal Health, Inc.

     117          01/18/19        USD     55.00        USD     522          (585

Charles Schwab Corp.

     341          01/18/19        USD     50.00        USD     1,416          (1,705

Cisco Systems, Inc.

     125          01/18/19        USD     46.00        USD     542          (2,875

Citigroup, Inc.

     458          01/18/19        USD     65.00        USD     2,384          (1,832

Citigroup, Inc.

     339          01/18/19        USD     67.50        USD     1,765          (847

Cognizant Technology Solutions Corp., Class A

     302          01/18/19        USD     67.50        USD     1,917          (8,305

Cognizant Technology Solutions Corp., Class A

     136          01/18/19        USD     71.00        USD     863          (765

Comcast Corp., Class A

     336          01/18/19        USD     38.75        USD     1,144          (840

Dollar General Corp.

     177          01/18/19        USD     115.00        USD     1,913          (10,620

DowDuPont, Inc.

     427          01/18/19        USD     60.00        USD     2,284          (3,843

DowDuPont, Inc.

     177          01/18/19        USD     55.00        USD     947          (17,258

Edison International

     73          01/18/19        USD     57.50        USD     414          (10,220

Enterprise Products Partners LP

     500          01/18/19        USD     28.00        USD     1,230          (2,500

Enterprise Products Partners LP

     1,264          01/18/19        USD     28.20        USD     3,108          (321

FirstEnergy Corp.

     757          01/18/19        USD     39.00        USD     2,843          (18,925

FirstEnergy Corp.

     311          01/18/19        USD     40.00        USD     1,168          (3,110

General Electric Co.

     713          01/18/19        USD     9.00        USD     540          (2,495

General Electric Co.

     399          01/18/19        USD     8.00        USD     302          (8,578

Goldman Sachs Group, Inc.

     161          01/18/19        USD     205.00        USD     2,690          (1,207

Hess Corp.

     380          01/18/19        USD     57.50        USD     1,539          (2,280

Honeywell International, Inc.

     75          01/18/19        USD     150.00        USD     991          (750

Honeywell International, Inc.

     113          01/18/19        USD     155.00        USD     1,493          (13,108

Humana, Inc.

     27          01/18/19        USD     320.00        USD     773          (2,700

JPMorgan Chase & Co.

     901          01/18/19        USD     110.00        USD     8,796          (7,208

JPMorgan Chase & Co.

     345          01/18/19        USD     100.00        USD     3,368          (54,510

 

 

42    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Equity Dividend Trust (BDJ)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call (continued)                                                   

Johnson Controls International PLC

     335          01/18/19        USD     35.00        USD     993        $ (1,172

Johnson Controls International PLC

     325          01/18/19        USD     33.00        USD     964          (2,925

Kellogg Co.

     394          01/18/19        USD     65.00        USD     2,246          (3,940

Lockheed Martin Corp.

     55          01/18/19        USD     270.00        USD     1,440          (22,275

Lowe’s Cos., Inc.

     155          01/18/19        USD     92.50        USD     1,432          (40,610

Marathon Oil Corp.

     134          01/18/19        USD     18.00        USD     192          (335

Marathon Oil Corp.

     585          01/18/19        USD     15.00        USD     839          (23,400

Marathon Petroleum Corp.

     469          01/18/19        USD     67.50        USD     2,768          (5,862

Marsh & McLennan Cos., Inc.

     598          01/18/19        USD     85.00        USD     4,769          (11,960

Marsh & McLennan Cos., Inc.

     596          01/18/19        USD     87.80        USD     4,753          (3,490

Masco Corp.

     332          01/18/19        USD     31.00        USD     971          (6,640

Mattel, Inc.

     625          01/18/19        USD     14.00        USD     624          (3,125

McKesson Corp.

     48          01/18/19        USD     135.00        USD     530          (240

McKesson Corp.

     116          01/18/19        USD     130.00        USD     1,281          (870

Medtronic PLC

     361          01/18/19        USD     96.25        USD     3,284          (15,927

Merck & Co., Inc.

     452          01/18/19        USD     77.50        USD     3,454          (42,036

MetLife, Inc.

     1,043          01/18/19        USD     42.50        USD     4,283          (59,451

Microsoft Corp.

     194          01/18/19        USD     110.00        USD     1,970          (9,118

Microsoft Corp.

     378          01/18/19        USD     112.00        USD     3,839          (18,190

Mondelez International, Inc.

     271          01/18/19        USD     45.00        USD     1,085          (813

Morgan Stanley

     982          01/18/19        USD     48.00        USD     3,894          (4,910

Motorola Solutions, Inc.

     352          01/18/19        USD     135.00        USD     4,049          (14,432

Newell Brands, Inc.

     584          01/18/19        USD     23.00        USD     1,086          (4,380

Newell Brands, Inc.

     508          01/18/19        USD     24.00        USD     944          (2,540

NextEra Energy, Inc.

     482          01/18/19        USD     180.00        USD     8,378          (50,610

Novartis AG — ADR

     204          01/18/19        USD     92.50        USD     1,751          (2,040

Novartis AG — ADR

     145          01/18/19        USD     90.00        USD     1,244          (3,987

Novo Nordisk A/S — ADR

     767          01/18/19        USD     45.00        USD     3,534          (134,225

ONEOK, Inc.

     492          01/18/19        USD     62.50        USD     2,654          (9,840

PG&E Corp.

     455          01/18/19        USD     29.00        USD     1,081          (9,100

Pentair PLC

     361          01/18/19        USD     42.45        USD     1,364          (312

PepsiCo, Inc.

     341          01/18/19        USD     120.00        USD     3,767          (3,921

Pfizer, Inc.

     1,106          01/18/19        USD     44.00        USD     4,828          (91,245

Pfizer, Inc.

     343          01/18/19        USD     45.00        USD     1,497          (14,234

Procter & Gamble Co.

     226          01/18/19        USD     95.00        USD     2,077          (15,029

Public Service Enterprise Group, Inc.

     420          01/18/19        USD     55.00        USD     2,186          (5,250

State Street Corp.

     326          01/18/19        USD     72.50        USD     2,056          (4,238

Suncor Energy, Inc.

     227          01/18/19        USD     36.00        USD     635          (1,135

Suncor Energy, Inc.

     378          01/18/19        USD     35.00        USD     1,057          (1,890

Suncor Energy, Inc.

     433          01/18/19        USD     34.00        USD     1,211          (1,732

Suncor Energy, Inc.

     823          01/18/19        USD     30.00        USD     2,302          (15,637

TOTAL SA — ADR

     530          01/18/19        USD     60.00        USD     2,766          (5,300

Taiwan Semiconductor Manufacturing Co. Ltd.

     406          01/18/19        USD     40.00        USD     1,499          (10,150

Taiwan Semiconductor Manufacturing Co. Ltd.

     159          01/18/19        USD     39.00        USD     587          (7,155

Travelers Cos., Inc.

     274          01/18/19        USD     127.25        USD     3,281          (9,256

U.S. Bancorp

     423          01/18/19        USD     55.00        USD     1,933          (423

Unilever NV — NY Shares

     638          01/18/19        USD     55.00        USD     3,432          (33,495

Union Pacific Corp.

     126          01/18/19        USD     151.50        USD     1,742          (4,899

UnitedHealth Group, Inc.

     52          01/18/19        USD     270.00        USD     1,295          (5,486

Verizon Communications, Inc.

     1,952          01/18/19        USD     57.50        USD     10,974          (98,576

Wells Fargo & Co.

     277          01/18/19        USD     55.00        USD     1,276          (277

Wells Fargo & Co.

     834          01/18/19        USD     52.50        USD     3,843          (4,587

Williams Cos., Inc.

     118          01/18/19        USD     26.00        USD     260          (413

Williams Cos., Inc.

     633          01/18/19        USD     25.00        USD     1,396          (3,165

BCE, Inc.

     251          01/23/19        USD     42.69        USD     992          (539

Kellogg Co.

     318          01/24/19        USD     62.80        USD     1,813          (5,099

Travelers Cos., Inc.

     274          01/24/19        USD     122.55        USD     3,281          (45,573

3M Co.

     26          01/25/19        USD     205.00        USD     495          (2,301

AXA Equitable Holdings, Inc.

     515          01/25/19        USD     16.27        USD     856          (38,179

Altria Group, Inc.

     374          01/25/19        USD     55.00        USD     1,847          (6,171

American International Group, Inc.

     695          01/25/19        USD     41.00        USD     2,739          (50,735

Anadarko Petroleum Corp.

     157          01/25/19        USD     50.50        USD     688          (4,867

Anthem, Inc.

     51          01/25/19        USD     287.50        USD     1,339          (4,411

Anthem, Inc.

     50          01/25/19        USD     282.50        USD     1,313          (7,650

Apple, Inc.

     73          01/25/19        USD     165.00        USD     1,152          (21,718

 

 

SCHEDULES OF INVESTMENTS      43  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Equity Dividend Trust (BDJ)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call (continued)                                                   

Arthur J Gallagher & Co.

     347          01/25/19        USD     75.66        USD     2,557        $ (26,592

Baker Hughes a GE Co.

     232          01/25/19        USD     23.12        USD     499          (5,398

Bank of America Corp.

     641          01/25/19        USD     27.00        USD     1,579          (8,012

CVS Health Corp.

     239          01/25/19        USD     77.50        USD     1,566          (3,585

Cardinal Health, Inc.

     233          01/25/19        USD     46.50        USD     1,039          (19,805

Charles Schwab Corp.

     200          01/25/19        USD     43.50        USD     831          (15,000

Cisco Systems, Inc.

     111          01/25/19        USD     49.00        USD     481          (610

Cisco Systems, Inc.

     132          01/25/19        USD     42.00        USD     572          (26,796

Citigroup, Inc.

     312          01/25/19        USD     61.50        USD     1,624          (2,496

Cognizant Technology Solutions Corp., Class A

     302          01/25/19        USD     68.50        USD     1,917          (9,060

Comcast Corp., Class A

     197          01/25/19        USD     38.50        USD     671          (1,477

Devon Energy Corp.

     640          01/25/19        USD     27.50        USD     1,443          (4,800

DowDuPont, Inc.

     326          01/25/19        USD     57.50        USD     1,743          (15,811

DowDuPont, Inc.

     178          01/25/19        USD     55.00        USD     952          (21,716

Enterprise Products Partners LP

     1,474          01/25/19        USD     27.00        USD     3,625          (22,110

FirstEnergy Corp.

     498          01/25/19        USD     39.27        USD     1,870          (12,713

General Electric Co.

     1,191          01/25/19        USD     8.00        USD     902          (30,966

Goldman Sachs Group, Inc.

     127          01/25/19        USD     177.50        USD     2,122          (33,909

Hess Corp.

     380          01/25/19        USD     57.50        USD     1,539          (2,660

Honeywell International, Inc.

     43          01/25/19        USD     143.00        USD     568          (1,247

Honeywell International, Inc.

     268          01/25/19        USD     138.00        USD     3,541          (31,356

Humana, Inc.

     136          01/25/19        USD     312.50        USD     3,896          (18,360

International Paper Co.

     288          01/25/19        USD     44.50        USD     1,162          (6,192

JPMorgan Chase & Co.

     233          01/25/19        USD     107.00        USD     2,275          (8,038

JPMorgan Chase & Co.

     430          01/25/19        USD     105.00        USD     4,198          (22,360

JPMorgan Chase & Co.

     345          01/25/19        USD     101.00        USD     3,368          (52,958

Johnson Controls International PLC

     328          01/25/19        USD     33.00        USD     973          (2,628

Lockheed Martin Corp.

     58          01/25/19        USD     305.00        USD     1,519          (1,740

Lowe’s Cos., Inc.

     153          01/25/19        USD     93.00        USD     1,413          (40,392

Marathon Oil Corp.

     149          01/25/19        USD     19.00        USD     214          (596

Marathon Petroleum Corp.

     273          01/25/19        USD     65.50        USD     1,611          (10,510

Mattel, Inc.

     287          01/25/19        USD     11.00        USD     287          (5,022

McKesson Corp.

     47          01/25/19        USD     116.00        USD     519          (7,637

Medtronic PLC

     263          01/25/19        USD     95.50        USD     2,392          (18,542

Merck & Co., Inc.

     587          01/25/19        USD     79.50        USD     4,485          (30,818

MetLife, Inc.

     1,043          01/25/19        USD     43.00        USD     4,283          (63,623

Microsoft Corp.

     20          01/25/19        USD     113.00        USD     203          (930

Microsoft Corp.

     433          01/25/19        USD     106.00        USD     4,398          (90,064

Mondelez International, Inc.

     219          01/25/19        USD     44.50        USD     877          (1,642

Morgan Stanley

     929          01/25/19        USD     43.00        USD     3,683          (45,521

Motorola Solutions, Inc.

     321          01/25/19        USD     135.36        USD     3,693          (1,181

Northrop Grumman Corp.

     99          01/25/19        USD     272.50        USD     2,425          (8,415

ONEOK, Inc.

     720          01/25/19        USD     61.00        USD     3,884          (25,200

Oracle Corp.

     872          01/25/19        USD     48.00        USD     3,937          (23,544

PG&E Corp.

     569          01/25/19        USD     27.00        USD     1,351          (31,295

PepsiCo, Inc.

     225          01/25/19        USD     113.00        USD     2,486          (36,675

Pfizer, Inc.

     971          01/25/19        USD     45.00        USD     4,238          (54,376

Pfizer, Inc.

     971          01/25/19        USD     44.50        USD     4,238          (72,340

Pfizer, Inc.

     868          01/25/19        USD     44.00        USD     3,789          (84,630

Procter & Gamble Co.

     121          01/25/19        USD     93.00        USD     1,112          (20,691

Suncor Energy, Inc.

     824          01/25/19        USD     30.00        USD     2,305          (23,072

U.S. Bancorp

     157          01/25/19        USD     52.00        USD     717          (942

UnitedHealth Group, Inc.

     60          01/25/19        USD     275.00        USD     1,495          (3,510

UnitedHealth Group, Inc.

     137          01/25/19        USD     250.00        USD     3,413          (104,120

Verizon Communications, Inc.

     753          01/25/19        USD     58.00        USD     4,233          (41,415

Verizon Communications, Inc.

     1,521          01/25/19        USD     57.00        USD     8,551          (134,609

Wells Fargo & Co.

     333          01/25/19        USD     48.00        USD     1,534          (28,638

Williams Cos., Inc.

     580          01/25/19        USD     25.00        USD     1,279          (3,770

Williams Cos., Inc.

     1,073          01/25/19        USD     26.02        USD     2,366          (8,169

Johnson Controls International PLC

     164          01/28/19        USD     34.00        USD     486          (1,697

Johnson Controls International PLC

     491          01/28/19        USD     33.50        USD     1,456          (3,335

Novo Nordisk A/S — ADR

     483          01/28/19        USD     45.90        USD     2,225          (70,982

Pfizer, Inc.

     432          01/28/19        USD     45.10        USD     1,886          (26,581

Novartis AG — ADR

     328          01/29/19        USD     84.73        USD     2,815          (84,828

Masco Corp.

     332          01/30/19        USD     30.93        USD     971          (16,623

 

 

44    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Equity Dividend Trust (BDJ)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call (continued)                                                   

Merck & Co., Inc.

     545          01/30/19        USD     79.90        USD     4,164        $ (35,445

State Street Corp.

     271          01/30/19        USD     64.24        USD     1,709          (55,296

Cisco Systems, Inc.

     155          01/31/19        USD     46.25        USD     672          (8,517

Edison International

     16          01/31/19        USD     60.25        USD     91          (3,563

FirstEnergy Corp.

     303          01/31/19        USD     38.25        USD     1,138          (19,364

Newell Brands, Inc.

     612          01/31/19        USD     21.25        USD     1,138          (18,981

NextEra Energy, Inc.

     182          01/31/19        USD     178.00        USD     3,164          (40,937

Oracle Corp.

     295          01/31/19        USD     48.00        USD     1,332          (13,501

3M Co.

     100          02/01/19        USD     202.50        USD     1,905          (20,950

AXA Equitable Holdings, Inc.

     449          02/01/19        USD     18.05        USD     747          (7,355

Apple, Inc.

     73          02/01/19        USD     165.00        USD     1,152          (33,398

Arthur J Gallagher & Co.

     347          02/01/19        USD     74.37        USD     2,557          (50,391

Baker Hughes a GE Co.

     232          02/01/19        USD     23.12        USD     499          (6,224

Bank of America Corp.

     1,692          02/01/19        USD     27.00        USD     4,169          (29,610

Charles Schwab Corp.

     196          02/01/19        USD     41.50        USD     814          (34,300

Cisco Systems, Inc.

     132          02/01/19        USD     42.50        USD     572          (25,542

Cisco Systems, Inc.

     298          02/01/19        USD     48.28        USD     1,291          (7,596

Citigroup, Inc.

     379          02/01/19        USD     58.50        USD     1,973          (14,970

Citigroup, Inc.

     561          02/01/19        USD     53.50        USD     2,921          (91,163

Comcast Corp., Class A

     506          02/01/19        USD     37.50        USD     1,723          (11,638

Devon Energy Corp.

     163          02/01/19        USD     27.50        USD     367          (2,119

Dollar General Corp.

     238          02/01/19        USD     108.00        USD     2,572          (86,870

FirstEnergy Corp.

     548          02/01/19        USD     39.93        USD     2,058          (11,727

General Electric Co.

     1,112          02/01/19        USD     8.00        USD     842          (47,260

Honeywell International, Inc.

     268          02/01/19        USD     138.00        USD     3,541          (52,394

International Paper Co.

     289          02/01/19        USD     44.50        USD     1,166          (9,970

JPMorgan Chase & Co.

     345          02/01/19        USD     101.00        USD     3,368          (64,170

Kellogg Co.

     394          02/01/19        USD     60.80        USD     2,246          (20,592

Lockheed Martin Corp.

     55          02/01/19        USD     272.50        USD     1,440          (28,600

Lowe’s Cos., Inc.

     144          02/01/19        USD     95.50        USD     1,330          (27,864

Marathon Oil Corp.

     585          02/01/19        USD     16.00        USD     839          (16,673

Marathon Petroleum Corp.

     124          02/01/19        USD     60.50        USD     732          (26,102

Mattel, Inc.

     768          02/01/19        USD     10.00        USD     767          (51,840

McKesson Corp.

     46          02/01/19        USD     125.00        USD     508          (3,335

Medtronic PLC

     507          02/01/19        USD     93.00        USD     4,612          (86,951

MetLife, Inc.

     1,183          02/01/19        USD     42.50        USD     4,857          (97,598

Microsoft Corp.

     433          02/01/19        USD     106.00        USD     4,398          (112,797

Motorola Solutions, Inc.

     321          02/01/19        USD     135.36        USD     3,693          (2,879

Oracle Corp.

     590          02/01/19        USD     49.00        USD     2,664          (11,800

Oracle Corp.

     295          02/01/19        USD     48.00        USD     1,332          (11,210

PG&E Corp.

     455          02/01/19        USD     30.00        USD     1,081          (7,962

Pfizer, Inc.

     290          02/01/19        USD     44.00        USD     1,266          (32,045

QUALCOMM, Inc.

     164          02/01/19        USD     59.00        USD     933          (28,290

Suncor Energy, Inc.

     824          02/01/19        USD     30.00        USD     2,305          (32,136

UnitedHealth Group, Inc.

     96          02/01/19        USD     262.50        USD     2,392          (36,000

UnitedHealth Group, Inc.

     137          02/01/19        USD     250.00        USD     3,413          (118,163

Verizon Communications, Inc.

     323          02/01/19        USD     58.00        USD     1,816          (23,579

Verizon Communications, Inc.

     875          02/01/19        USD     57.00        USD     4,919          (99,750

Wells Fargo & Co.

     600          02/01/19        USD     49.00        USD     2,765          (38,100

Wells Fargo & Co.

     699          02/01/19        USD     47.00        USD     3,221          (93,666

State Street Corp.

     271          02/06/19        USD     64.24        USD     1,709          (63,128

Novartis AG — ADR

     327          02/07/19        USD     84.73        USD     2,806          (94,388

Taiwan Semiconductor Manufacturing Co. Ltd.

     540          02/07/19        USD     38.20        USD     1,993          (64,573

AXA Equitable Holdings, Inc.

     449          02/08/19        USD     18.05        USD     747          (9,403

American International Group, Inc.

     254          02/08/19        USD     40.00        USD     1,001          (41,529

Bank of America Corp.

     1,257          02/08/19        USD     25.00        USD     3,097          (111,873

Bank of America Corp.

     274          02/08/19        USD     24.64        USD     675          (25,798

Cisco Systems, Inc.

     132          02/08/19        USD     42.74        USD     572          (26,486

Comcast Corp., Class A

     382          02/08/19        USD     35.32        USD     1,301          (31,010

International Paper Co.

     210          02/08/19        USD     42.55        USD     848          (23,827

Johnson Controls International PLC

     330          02/08/19        USD     34.00        USD     978          (3,087

Merck & Co., Inc.

     545          02/08/19        USD     79.90        USD     4,164          (45,238

Pfizer, Inc.

     393          02/08/19        USD     42.66        USD     1,715          (68,772

Suncor Energy, Inc.

     824          02/08/19        USD     30.01        USD     2,305          (38,158

Verizon Communications, Inc.

     875          02/08/19        USD     57.01        USD     4,919          (92,039

 

 

SCHEDULES OF INVESTMENTS      45  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Equity Dividend Trust (BDJ)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call (continued)                                                   

Wells Fargo & Co.

     699          02/08/19        USD     47.01        USD     3,221        $ (63,645

FirstEnergy Corp.

     497          02/11/19        USD     38.20        USD     1,866          (40,614

FirstEnergy Corp.

     304          02/11/19        USD     38.25        USD     1,142          (19,528

AXA Equitable Holdings, Inc.

     514          02/13/19        USD     16.27        USD     855          (47,420

Novartis AG — ADR

     328          02/13/19        USD     84.73        USD     2,815          (100,671

Taiwan Semiconductor Manufacturing Co. Ltd.

     538          02/13/19        USD     37.97        USD     1,986          (60,874

American International Group, Inc.

     289          02/15/19        USD     45.00        USD     1,139          (9,248

American International Group, Inc.

     402          02/15/19        USD     39.00        USD     1,584          (89,043

Anadarko Petroleum Corp.

     128          02/15/19        USD     55.00        USD     561          (3,328

Bank of America Corp.

     642          02/15/19        USD     27.00        USD     1,582          (18,618

Bank of America Corp.

     870          02/15/19        USD     29.00        USD     2,144          (4,785

Cisco Systems, Inc.

     154          02/15/19        USD     46.00        USD     667          (14,245

Cisco Systems, Inc.

     132          02/15/19        USD     43.00        USD     572          (28,710

Citigroup, Inc.

     312          02/15/19        USD     62.50        USD     1,624          (4,836

Citigroup, Inc.

     191          02/15/19        USD     52.50        USD     994          (46,986

Cognizant Technology Solutions Corp., Class A

     82          02/15/19        USD     65.00        USD     521          (17,425

Comcast Corp., Class A

     209          02/15/19        USD     40.00        USD     712          (2,090

Dollar General Corp.

     324          02/15/19        USD     110.00        USD     3,502          (115,020

Goldman Sachs Group, Inc.

     127          02/15/19        USD     180.00        USD     2,122          (45,403

JPMorgan Chase & Co.

     493          02/15/19        USD     105.00        USD     4,813          (55,956

Johnson Controls International PLC

     164          02/15/19        USD     32.00        USD     486          (8,364

Lowe’s Cos., Inc.

     153          02/15/19        USD     95.00        USD     1,413          (41,616

Marathon Petroleum Corp.

     335          02/15/19        USD     62.50        USD     1,977          (66,163

Masco Corp.

     164          02/15/19        USD     30.00        USD     480          (18,040

Medtronic PLC

     170          02/15/19        USD     97.50        USD     1,546          (13,515

Merck & Co., Inc.

     269          02/15/19        USD     80.00        USD     2,055          (26,093

MetLife, Inc.

     800          02/15/19        USD     45.95        USD     3,285          (21,657

Microsoft Corp.

     601          02/15/19        USD     106.20        USD     6,104          (205,098

Oracle Corp.

     1,887          02/15/19        USD     50.00        USD     8,520          (43,401

Pentair PLC

     272          02/15/19        USD     40.00        USD     1,028          (21,080

Procter & Gamble Co.

     410          02/15/19        USD     97.50        USD     3,769          (38,950

QUALCOMM, Inc.

     230          02/15/19        USD     60.00        USD     1,309          (38,410

State Street Corp.

     273          02/15/19        USD     67.50        USD     1,722          (43,953

TOTAL SA — ADR

     277          02/15/19        USD     55.00        USD     1,445          (23,545

Union Pacific Corp.

     85          02/15/19        USD     145.00        USD     1,175          (30,388

Verizon Communications, Inc.

     380          02/15/19        USD     55.00        USD     2,136          (92,910

Wells Fargo & Co.

     1,121          02/15/19        USD     47.50        USD     5,166          (154,698

Williams Cos., Inc.

     421          02/15/19        USD     26.00        USD     928          (10,314

Williams Cos., Inc.

     580          02/15/19        USD     25.00        USD     1,279          (13,630

Williams Cos., Inc.

     206          02/15/19        USD     22.00        USD     454          (22,763

AXA Equitable Holdings, Inc.

     515          02/20/19        USD     16.27        USD     856          (46,090

Comcast Corp., Class A

     382          02/21/19        USD     35.32        USD     1,301          (39,014

Johnson Controls International PLC

     165          02/22/19        USD     33.00        USD     489          (5,165

AXA Equitable Holdings, Inc.

     414          02/27/19        USD     15.97        USD     688          (46,209

AXA Equitable Holdings, Inc.

     414          03/06/19        USD     15.97        USD     688          (48,294

Lowe’s Cos., Inc.

     144          03/15/19        USD     100.00        USD     1,330          (33,192

Mondelez International, Inc.

     393          03/15/19        USD     43.00        USD     1,573          (22,794

Novo Nordisk A/S — ADR

     483          03/15/19        USD     46.00        USD     2,225          (107,468
                          

 

 

 
     $ (8,159,536
                          

 

 

 

OTC Options Written

 

Description   Counterparty   Number of
Contracts
    Expiration
Date
    Exercise
Price
    Notional
Amount (000)
    Value  
Call  

Bayer AG, Registered Shares

  Goldman Sachs International     19,400       01/03/19     EUR     67.90     EUR     1,178     $ (1

CRH PLC

  UBS AG     45,000       01/03/19     GBP     23.26     GBP     935        

Diageo PLC

  Morgan Stanley & Co. International PLC     2,500       01/03/19     GBP     27.80     GBP     70       (1,285

Koninklijke Philips NV

  Morgan Stanley & Co. International PLC     25,000       01/03/19     EUR     34.41     EUR     765       (64

AstraZeneca PLC

  Goldman Sachs International     35,500       01/04/19     GBP     60.02     GBP     2,079       (11,104

BP PLC

  Barclays Bank PLC     89,200       01/04/19     GBP     5.52     GBP     442        

BP PLC

  UBS AG     88,900       01/04/19     GBP     5.38     GBP     441       (9

Johnson Controls International PLC

  JPMorgan Chase Bank N.A.     17,800       01/04/19     USD     34.57     USD     528        

Diageo PLC

  Credit Suisse International     66,400       01/08/19     GBP     27.56     GBP     1,862       (53,041

 

 

46    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Equity Dividend Trust (BDJ)

 

OTC Options Written (continued)

 

Description   Counterparty   Number of
Contracts
    Expiration
Date
    Exercise
Price
    Notional
Amount (000)
    Value  
Call (continued)  

Enterprise Products Partners LP

  Bank of America N.A.     147,300       01/08/19     USD     27.16     USD     3,622     $ (121

AstraZeneca PLC

  Credit Suisse International     110,500       01/09/19     GBP     64.58     GBP     6,471       (1,075

BP PLC

  Morgan Stanley & Co. International PLC     790,000       01/09/19     GBP     5.28     GBP     3,918       (12,081

Lenovo Group Ltd.

  Goldman Sachs International     3,036,000       01/09/19     HKD     6.02     HKD     16,060       (392

Nestle SA, Registered Shares

  Credit Suisse International     42,000       01/09/19     CHF     85.34     CHF     3,350       (2,775

Constellation Software, Inc.

  Morgan Stanley & Co. International PLC     7,500       01/11/19     CAD     953.83     CAD     6,554       (6,803

BCE, Inc.

  Credit Suisse International     36,100       01/14/19     USD     39.57     USD     1,427       (18,266

Diageo PLC

  Credit Suisse International     66,400       01/15/19     GBP     27.56     GBP     1,862       (67,044

BP PLC

  Morgan Stanley & Co. International PLC     790,000       01/16/19     GBP     5.33     GBP     3,918       (20,234

CRH PLC

  UBS AG     45,000       01/16/19     GBP     23.37     GBP     935       (283

Koninklijke Philips NV

  Morgan Stanley & Co. International PLC     223,000       01/16/19     EUR     32.73     EUR     6,824       (27,772

Lenovo Group Ltd.

  Goldman Sachs International     3,036,000       01/16/19     HKD     6.02     HKD     16,060       (3,662

Nestle SA, Registered Shares

  Credit Suisse International     42,000       01/16/19     CHF     85.85     CHF     3,350       (5,862

BAE Systems PLC

  Goldman Sachs International     91,200       01/17/19     GBP     5.00     GBP     419       (1,887

BCE, Inc.

  Bank of America N.A.     18,400       01/23/19     USD     42.53     USD     727       (519

Diageo PLC

  Credit Suisse International     48,200       01/23/19     GBP     28.37     GBP     1,352       (25,052

AstraZeneca PLC

  UBS AG     66,400       01/24/19     GBP     63.35     GBP     3,888       (16,430

BAE Systems PLC

  Goldman Sachs International     91,200       01/24/19     GBP     5.00     GBP     419       (3,286

Koninklijke Philips NV

  Goldman Sachs International     25,000       01/24/19     EUR     33.62     EUR     765       (2,486

Siemens AG

  Goldman Sachs International     35,600       01/24/19     EUR     102.23     EUR     3,467       (17,081

CRH PLC

  Goldman Sachs International     72,500       01/29/19     GBP     22.15     GBP     1,506       (14,591

Diageo PLC

  Credit Suisse International     48,200       01/29/19     GBP     28.37     GBP     1,352       (28,720

CRH PLC

  Morgan Stanley & Co. International PLC     25,500       01/31/19     GBP     20.94     GBP     530       (23,077

Nestle SA, Registered Shares

  Morgan Stanley & Co. International PLC     30,000       01/31/19     CHF     86.45     CHF     2,393       (3,498

Public Service Enterprise Group, Inc.

  Barclays Bank PLC     75,000       01/31/19     USD     53.47     USD     3,904       (57,668

Bayer AG

  Goldman Sachs International     53,900       02/05/19     EUR     68.17     EUR     3,272       (30,486

BAE Systems PLC

  Goldman Sachs International     419,500       02/06/19     GBP     4.72     GBP     1,926       (55,449

BP PLC — ADR Each Representing Six PLC

  Credit Suisse International     1,175,000       02/06/19     GBP     5.13     GBP     5,828       (169,677

CRH PLC

  Credit Suisse International     36,900       02/06/19     GBP     20.89     GBP     766       (37,790

Diageo PLC

  UBS AG     32,600       02/06/19     GBP     27.94     GBP     914       (29,407

Koninklijke Philips NV

  Goldman Sachs International     184,500       02/06/19     EUR     33.68     EUR     5,646       (48,758

Nestle SA, Registered Shares

  Morgan Stanley & Co. International PLC     800       02/06/19     CHF     82.55     CHF     64       (634

Baker Hughes a GE Co.

  Deutsche Bank AG     45,800       02/08/19     USD     22.01     USD     985       (30,504

Koninklijke Philips NV

  UBS AG     122,300       02/13/19     EUR     34.05     EUR     3,742       (32,712
               

 

 

 
  $ (861,586
 

 

 

 

Balances Reported in the Statements of Assets and Liabilities for Options Written

 

      Swap
Premium
Paid
     Swap
Premium
Received
     Unrealized
Appreciation
     Unrealized
Depreciation
     Value  

Options Written

     N/A        N/A      $ 14,179,646      $ (798,222    $ (9,021,122

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Assets — Derivative Financial Instruments

                    

Options purchased

                    

Investments at value — unaffiliated(a)

   $      $      $ 21,865      $      $      $      $ 21,865  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities — Derivative Financial Instruments

                    

Options written

                    

Options written, at value

   $      $      $ 9,021,122      $      $      $      $ 9,021,122  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes options purchased at value as reported in the Schedule of Investments.

 

 

 

SCHEDULES OF INVESTMENTS      47  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Equity Dividend Trust (BDJ)

 

For the year ended December 31, 2018, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Net Realized Gain (Loss) from:

                    

Options purchased(a)

   $      $      $ (40,564    $      $      $      $ (40,564

Options written

                   (5,219,539                           (5,219,539
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $      $      ($ 5,260,103    $      $      $      ($ 5,260,103
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Options purchased are included in net realized gain (loss) from investments.

 

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Net Change in Unrealized Appreciation on:

                    

Options purchased(a)

   $      $      $ (21,427    $      $      $      $ (21,427

Options written

                   17,485,572                             17,485,572  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $      $      $ 17,464,145      $      $      $      $ 17,464,145  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Options purchased are included in net change in unrealized appreciation (depreciation) from investments.

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Options:

 

Average value of option contracts purchased

   $ 7,075  

Average value of option contracts written

   $ 13,572,916  

For more information about the Trust’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

Derivative Financial Instruments — Offsetting as of Period End

The Trust’s derivative assets and liabilities (by type) were as follows:

 

      Assets      Liabilities  

Derivative Financial Instruments:

     

Options

   $ 21,865 (a)      $ 9,021,122  

Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)

     (21,865      (8,159,536
  

 

 

    

 

 

 

Total derivative assets and liabilities subject to an MNA

   $      $ 861,586  
  

 

 

    

 

 

 

 

  (a) 

Includes options purchased at value which is included in Investments at value – unaffiliated in the Statements of Assets and Liabilities and reported in the Schedule of Investments.

 

The following table presents the Trust’s derivative assets (and liabilities) by counterparty net of amounts available for offset under an MNA and net of the related collateral received (and pledged) by the Trust:

 

Counterparty    Derivative
Liabilities

Subject to
an MNA by
Counterparty
       Derivatives
Available
for Offset
       Non-cash
Collateral

Pledged (a)
       Cash
Collateral

Pledged
       Net Amount
of Derivative

Liabilities  (b)
 

Bank of America N.A.

   $ 640        $        $        $        $ 640  

Barclays Bank PLC

     57,668                                     57,668  

Credit Suisse International

     409,302                   (409,302                  

Deutsche Bank AG

     30,504                                 30,504  

Goldman Sachs International

     189,183                   (189,183                  

Morgan Stanley & Co. International PLC

     95,448                   (95,448                  

UBS AG

     78,841                                     78,841  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
   $ 861,586        $        $ (693,933      $        $ 167,653  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

Excess of collateral received from the individual counterparty is not shown for financial reporting purposes.

 
  (b) 

Net amount represents the net amount payable due to counterparty in the event of default. Net amount may be offset further by the options written receivable/payable on the Statements of Assets and Liabilities.

 

 

 

48    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Equity Dividend Trust (BDJ)

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

      Level 1        Level 2        Level 3        Total  

Assets:

 

Investments:

 

Common Stocks:

 

Aerospace & Defense

   $ 18,875,564        $ 6,071,577        $        $ 24,947,141  

Banks

     228,587,517                            228,587,517  

Beverages

     17,669,067          16,285,915                   33,954,982  

Building Products

     16,858,836                            16,858,836  

Capital Markets

     60,690,331                            60,690,331  

Chemicals

     16,033,037                            16,033,037  

Communications Equipment

     29,993,175                            29,993,175  

Construction Materials

              10,265,793                   10,265,793  

Containers & Packaging

     5,476,852                            5,476,852  

Diversified Financial Services

     9,378,339                            9,378,339  

Diversified Telecommunication Services

     78,961,186                            78,961,186  

Electric Utilities

     50,354,637                            50,354,637  

Electronic Equipment, Instruments & Components

     3,788,277                            3,788,277  

Energy Equipment & Services

     3,421,295                            3,421,295  

Food Products

     16,978,589          16,063,731                   33,042,320  

Health Care Equipment & Supplies

     27,438,084          35,052,090                   62,490,174  

Health Care Providers & Services

     116,813,585                            116,813,585  

Household Durables

     9,053,702                            9,053,702  

Household Products

     17,412,406                            17,412,406  

Industrial Conglomerates

     37,222,193          6,853,451                   44,075,644  

Insurance

     109,989,554                            109,989,554  

IT Services

     11,414,910                            11,414,910  

Leisure Products

     4,796,259                            4,796,259  

Machinery

     4,125,198                            4,125,198  

Media

     26,494,475                            26,494,475  

Multi-Utilities

     14,701,002                            14,701,002  

Multiline Retail

     13,771,229                            13,771,229  

Oil, Gas & Consumable Fuels

     145,253,765          31,970,100                   177,223,865  

Personal Products

     11,969,424                            11,969,424  

Pharmaceuticals

     136,468,392          47,955,520                   184,423,912  

Road & Rail

     7,467,185                            7,467,185  

Semiconductors & Semiconductor Equipment

     32,695,406                            32,695,406  

Software

     94,034,189                            94,034,189  

Specialty Retail

     13,585,232                            13,585,232  

Technology Hardware, Storage & Peripherals

     4,021,581          18,834,982                   22,856,563  

Tobacco

     18,512,360                            18,512,360  

Short-Term Securities

     44,526,058                            44,526,058  

Options Purchased

                 

Equity Contracts

     21,865                            21,865  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ 1,458,854,756        $ 189,353,159        $        $ 1,648,207,915  
  

 

 

      

 

 

      

 

 

      

 

 

 

Derivative Financial Instruments(a)

 

Liabilities:

 

Equity contracts

   $ (6,094,175      $ (2,926,947      $        $ (9,021,122
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

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

 

During the year ended December 31, 2018, there were no transfers between levels.

See notes to financial statements.

 

 

SCHEDULES OF INVESTMENTS      49  


Schedule of Investments  

December 31, 2018

  

BlackRock Enhanced Global Dividend Trust (BOE)

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Common Stocks — 96.6%  
Australia — 5.4%  

Amcor Ltd.

    2,385,294     $ 22,272,566  

Ansell Ltd.

    406,296       6,311,689  

Ensogo Ltd.(a)(b)

    418,198       3  

Sonic Healthcare Ltd.

    778,801       12,149,387  
   

 

 

 
    40,733,645  
Canada — 6.5%  

Rogers Communications, Inc., Class B

    468,324       23,999,375  

TELUS Corp.

    748,123       24,796,781  
   

 

 

 
    48,796,156  
China — 1.0%  

ANTA Sports Products Ltd.

    1,514,000       7,248,060  
   

 

 

 
Denmark — 1.1%  

Novo Nordisk A/S, Class B

    186,453       8,563,240  
   

 

 

 
Finland — 3.1%  

Kone OYJ, Class B

    482,959       23,057,120  
   

 

 

 
France — 3.4%  

Sanofi

    138,932       12,052,328  

Schneider Electric SE

    199,357       13,522,626  
   

 

 

 
    25,574,954  
Germany — 2.3%  

Deutsche Post AG, Registered Shares

    644,258       17,594,177  
   

 

 

 
India — 1.1%  

Hero MotoCorp Ltd.

    167,596       7,447,187  

Jasper Infotech Private Ltd., Series I, (Acquired 08/08/15, cost $2,637,143)(a)(c)

    3,540       711,221  
   

 

 

 
    8,158,408  
Ireland — 1.3%  

Medtronic PLC(d)

    108,795       9,895,993  
   

 

 

 
Japan — 1.0%  

Japan Tobacco, Inc.

    310,500       7,377,816  
   

 

 

 
Netherlands — 2.4%  

Heineken NV

    111,338       9,840,807  

Koninklijke Philips NV

    237,749       8,335,358  
   

 

 

 
    18,176,165  
Singapore — 3.0%  

DBS Group Holdings Ltd.

    661,968       11,511,521  

United Overseas Bank Ltd.

    606,000       10,962,532  
   

 

 

 
    22,474,053  
Sweden — 1.4%  

Svenska Handelsbanken AB, Class A

    937,035       10,425,147  
   

 

 

 
Switzerland — 5.6%  

Nestle SA, Registered Shares

    221,663       17,990,778  

Novartis AG, Registered Shares

    205,598       17,608,274  

SGS SA, Registered Shares

    3,121       7,025,435  
   

 

 

 
    42,624,487  
Taiwan — 1.9%  

Taiwan Semiconductor Manufacturing Co. Ltd.

    2,023,000       14,689,467  
   

 

 

 
United Kingdom — 15.5%  

AstraZeneca PLC

    147,550       11,014,006  

BAE Systems PLC

    2,645,660       15,474,076  

British American Tobacco PLC

    497,713       15,836,737  

Diageo PLC

    384,545       13,741,483  

GlaxoSmithKline PLC

    910,852       17,359,033  

Imperial Brands PLC

    626,898       19,027,427  

RELX PLC

    386,186       7,945,871  
Security   Shares     Value  
United Kingdom (continued)  

Unilever PLC

    314,498     $ 16,512,016  
   

 

 

 
    116,910,649  
United States — 40.6%  

3M Co.(d)

    75,958       14,473,037  

AbbVie, Inc.(d)

    163,548       15,077,490  

Altria Group, Inc.(d)(e)

    439,569       21,710,313  

Cisco Systems, Inc.(d)(e)

    538,639       23,339,228  

Citizens Financial Group, Inc.(d)

    167,555       4,981,410  

Coca-Cola Co.(d)(e)

    429,409       20,332,516  

FirstSun Capital Bancorp,
(Acquired 3/10/14, cost $5,461,692)(a)(c)

    120,312       3,818,703  

Genuine Parts Co.(d)

    218,577       20,987,764  

International Paper Co.(d)

    450,327       18,175,198  

Johnson & Johnson(d)(e)

    172,747       22,293,000  

M&T Bank Corp.(d)

    69,614       9,963,852  

Microsoft Corp.(d)

    75,620       7,680,723  

Paychex, Inc.(d)

    176,452       11,495,848  

PepsiCo, Inc.(d)

    172,631       19,072,273  

Pfizer, Inc.(d)(e)

    389,261       16,991,243  

Philip Morris International, Inc.(d)

    219,915       14,681,525  

Procter & Gamble Co.(d)

    141,136       12,973,221  

Texas Instruments, Inc.(d)

    59,171       5,591,659  

U.S. Bancorp(d)

    249,836       11,417,505  

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

    76,232       7,434,907  

United Technologies Corp.(d)

    124,974       13,307,232  

Wells Fargo & Co.(d)

    228,246       10,517,576  
   

 

 

 
    306,316,223  
   

 

 

 

Total Common Stocks — 96.6%
(Cost — $797,672,217)

 

    728,615,760  
   

 

 

 

Preferred Stocks — 0.8%

 

United States — 0.8%

 

Palantir Technologies, Inc., Series I (Acquired 3/27/14, cost $3,118,944), 0.00%(a)(c)

    508,800       2,752,608  

Uber Technologies, Inc., Series D (Acquired 6/01/14, cost $1,611,693), 0.00%(a)(c)

    68,723       3,090,473  
   

 

 

 

Total Preferred Stocks — 0.8%
(Cost — $4,185,045)

 

    5,843,081  
   

 

 

 

Total Long-Term Investments — 97.4%
(Cost — $801,857,262)

 

    734,458,841  
   

 

 

 

Short-Term Securities — 2.6%

   

BlackRock Liquidity Funds, T-Fund, Institutional Class,
2.32%(f)(g)

    19,702,446       19,702,446  
   

 

 

 

Total Short-Term Securities — 2.6%
(Cost — $19,702,446)

 

    19,702,446  
   

 

 

 

Options Purchased — 0.0%
(Cost — $4,635)

 

    1,624  
   

 

 

 

Total Investments Before Options Written — 100.0%
(Cost — $821,564,343)

 

    754,162,911  
   

 

 

 

Options Written — (0.5)%
(Premiums Received — $7,395,565)

 

    (3,609,231
   

 

 

 

Total Investments, Net of Options Written — 99.5%
(Cost — $814,168,778)

 

    750,553,680  

Other Assets Less Liabilities — 0.5%

 

    4,047,881  
   

 

 

 

Net Assets — 100.0%

 

  $ 754,601,561  
   

 

 

 

 

 

 

 

50    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

   BlackRock Enhanced Global Dividend Trust (BOE)

 

(a) 

Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy.

(b) 

Non-income producing security.

(c) 

Restricted security as to resale, excluding 144A securities. As of period end, the Trust held restricted securities with a current value of $10,373,005 and an original cost of $12,829,472, which was 1.37% of its net assets.

(d) 

All or a portion of the security has been pledged and/or segregated as collateral in connection with outstanding exchange-traded options written.

(e) 

All or a portion of the security has been pledged as collateral in connection with outstanding OTC derivatives.

(f) 

Annualized 7-day yield as of period end.

 
(g) 

During the year ended December 31, 2018, investments in issuers considered to be an affiliate of the Trust for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate    Shares
Held at
12/31/17
     Net
Activity
     Shares
Held at
12/31/18
    

Value at

12/31/18

     Income      Net
Realized
Gain (Loss)
 (a)
     Change in
Unrealized
Appreciation
(Depreciation)
 

BlackRock Liquidity Funds, T-Fund, Institutional Class

     13,118,524        6,583,922        19,702,446      $ 19,702,446      $ 99,772      $      $  
           

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes net capital gain distributions, if applicable.

 

Derivative Financial Instruments Outstanding as of Period End

Exchange-Traded Options Purchased

 

Description    Number of
Contracts
       Expiration
Date
      

Exercise

Price

       Notional
Amount (000)
       Value  

Call

                          

Wells Fargo & Co.

     166          01/04/19        USD     50.00        USD     765        $ 249  

Wells Fargo & Co.

     166          01/11/19        USD     51.50        USD     765          664  

Altria Group, Inc.

     158          01/18/19        USD     62.50        USD     780          711  
                          

 

 

 
                           $ 1,624  
                          

 

 

 

Exchange-Traded Options Written

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call                                                   

U.S. Bancorp

     34          01/03/19        USD     55.50        USD     155        $  

3M Co.

     75          01/04/19        USD     202.50        USD     1,429          (600

AbbVie, Inc.

     112          01/04/19        USD     92.00        USD     1,033          (15,512

Altria Group, Inc.

     212          01/04/19        USD     55.50        USD     1,047          (8,268

Coca-Cola Co.

     561          01/04/19        USD     50.00        USD     2,656          (1,683

Genuine Parts Co.

     164          01/04/19        USD     101.00        USD     1,575          (4,920

Medtronic PLC

     41          01/04/19        USD     95.00        USD     373          (328

Pfizer, Inc.

     408          01/04/19        USD     43.50        USD     1,781          (21,420

Pfizer, Inc.

     102          01/04/19        USD     44.50        USD     445          (1,734

Pfizer, Inc.

     102          01/04/19        USD     46.50        USD     445          (408

Pfizer, Inc.

     60          01/04/19        USD     45.00        USD     262          (420

Philip Morris International, Inc.

     179          01/04/19        USD     87.00        USD     1,195          (8,950

Procter & Gamble Co.

     57          01/04/19        USD     94.50        USD     524          (769

Rogers Communications, Inc., Class B

     245          01/04/19        CAD     71.50        CAD     1,714          (2,512

Texas Instruments, Inc.

     80          01/04/19        USD     101.00        USD     756          (280

U.S. Bancorp

     35          01/04/19        USD     55.50        USD     160           

United Technologies Corp.

     112          01/04/19        USD     123.00        USD     1,193          (2,800

Wells Fargo & Co.

     90          01/04/19        USD     56.00        USD     415          (180

Wells Fargo & Co.

     76          01/04/19        USD     54.00        USD     350          (1,292

3M Co.

     73          01/11/19        USD     210.00        USD     1,391          (803

AbbVie, Inc.

     124          01/11/19        USD     92.00        USD     1,143          (27,156

Altria Group, Inc.

     212          01/11/19        USD     55.01        USD     1,047          (70

Genuine Parts Co.

     163          01/11/19        USD     105.00        USD     1,565          (6,520

Johnson & Johnson

     143          01/11/19        USD     146.00        USD     1,845          (572

Microsoft Corp.

     114          01/11/19        USD     112.00        USD     1,158          (1,368

PepsiCo, Inc.

     72          01/11/19        USD     120.00        USD     795          (504

Pfizer, Inc.

     102          01/11/19        USD     46.50        USD     445          (918

Pfizer, Inc.

     59          01/11/19        USD     45.00        USD     258          (1,416

Procter & Gamble Co.

     108          01/11/19        USD     93.00        USD     993          (11,340

Texas Instruments, Inc.

     80          01/11/19        USD     100.00        USD     756          (4,400

U.S. Bancorp

     149          01/11/19        USD     54.50        USD     681          (596

 

 

SCHEDULES OF INVESTMENTS      51  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Global Dividend Trust (BOE)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call (continued)                                                   

U.S. Bancorp

     140          01/11/19        USD     54.00        USD     640        $ (560

Wells Fargo & Co.

     90          01/11/19        USD     56.00        USD     415          (270

Wells Fargo & Co.

     76          01/11/19        USD     54.00        USD     350          (228

AbbVie, Inc.

     112          01/18/19        USD     92.50        USD     1,033          (24,584

AbbVie, Inc.

     67          01/18/19        USD     87.50        USD     618          (37,185

Altria Group, Inc.

     158          01/18/19        USD     67.50        USD     780          (474

Altria Group, Inc.

     613          01/18/19        USD     55.00        USD     3,028          (6,743

Cisco Systems, Inc.

     170          01/18/19        USD     46.00        USD     737          (3,910

Citizens Financial Group, Inc.

     287          01/18/19        USD     37.25        USD     853          (1

Coca-Cola Co.

     928          01/18/19        USD     50.00        USD     4,394          (11,600

Genuine Parts Co.

     218          01/18/19        USD     105.00        USD     2,093          (3,270

Johnson & Johnson

     326          01/18/19        USD     145.75        USD     4,207          (906

M&T Bank Corp.

     150          01/18/19        USD     165.00        USD     2,147          (11,250

Medtronic PLC

     110          01/18/19        USD     96.25        USD     1,001          (4,853

Microsoft Corp.

     168          01/18/19        USD     110.00        USD     1,706          (7,896

PepsiCo, Inc.

     389          01/18/19        USD     120.00        USD     4,298          (4,473

Pfizer, Inc.

     291          01/18/19        USD     44.00        USD     1,270          (24,008

Pfizer, Inc.

     102          01/18/19        USD     45.00        USD     445          (4,233

Philip Morris International, Inc.

     147          01/18/19        USD     90.00        USD     981          (367

Procter & Gamble Co.

     115          01/18/19        USD     95.00        USD     1,057          (7,647

Rogers Communications, Inc., Class B

     348          01/18/19        CAD     70.00        CAD     2,435          (28,422

Rogers Communications, Inc., Class B

     324          01/18/19        CAD     72.00        CAD     2,267          (8,662

Texas Instruments, Inc.

     68          01/18/19        USD     100.00        USD     643          (6,528

U.S. Bancorp

     107          01/18/19        USD     55.00        USD     489          (107

United Parcel Service, Inc., Class B

     172          01/18/19        USD     105.00        USD     1,678          (7,654

United Technologies Corp.

     81          01/18/19        USD     115.00        USD     862          (3,280

United Technologies Corp.

     80          01/18/19        USD     125.00        USD     852          (880

Wells Fargo & Co.

     150          01/18/19        USD     55.00        USD     691          (150

Wells Fargo & Co.

     121          01/18/19        USD     52.50        USD     558          (665

Paychex, Inc.

     141          01/18/19        USD     70.00        USD     919          (2,115

3M Co.

     76          01/25/19        USD     205.00        USD     1,448          (6,726

AbbVie, Inc.

     320          01/25/19        USD     88.50        USD     2,950          (165,600

Altria Group, Inc.

     501          01/25/19        USD     55.00        USD     2,474          (8,267

Cisco Systems, Inc.

     455          01/25/19        USD     49.00        USD     1,972          (2,502

Cisco Systems, Inc.

     346          01/25/19        USD     42.00        USD     1,499          (70,238

Coca-Cola Co.

     46          01/25/19        USD     50.00        USD     218          (874

International Paper Co.

     626          01/25/19        USD     44.50        USD     2,527          (13,459

Johnson & Johnson

     123          01/25/19        USD     148.00        USD     1,587          (861

Johnson & Johnson

     12          01/25/19        USD     136.00        USD     155          (1,236

Medtronic PLC

     40          01/25/19        USD     95.50        USD     364          (2,820

Microsoft Corp.

     100          01/25/19        USD     113.00        USD     1,016          (4,650

Microsoft Corp.

     20          01/25/19        USD     106.00        USD     203          (4,160

PepsiCo, Inc.

     315          01/25/19        USD     113.00        USD     3,480          (51,345

Pfizer, Inc.

     108          01/25/19        USD     45.00        USD     471          (6,048

Pfizer, Inc.

     109          01/25/19        USD     44.50        USD     476          (8,121

Pfizer, Inc.

     182          01/25/19        USD     44.00        USD     794          (17,745

Philip Morris International, Inc.

     118          01/25/19        USD     88.00        USD     788          (5,192

Procter & Gamble Co.

     108          01/25/19        USD     93.00        USD     993          (18,468

Texas Instruments, Inc.

     38          01/25/19        USD     101.00        USD     359          (6,023

U.S. Bancorp

     99          01/25/19        USD     52.00        USD     452          (594

United Parcel Service, Inc., Class B

     171          01/25/19        USD     106.00        USD     1,668          (9,063

Wells Fargo & Co.

     86          01/25/19        USD     48.00        USD     396          (7,396

Pfizer, Inc.

     40          01/28/19        USD     45.10        USD     175          (2,461

Cisco Systems, Inc.

     464          01/31/19        USD     46.25        USD     2,011          (25,495

3M Co.

     117          02/01/19        USD     202.50        USD     2,229          (24,512

Cisco Systems, Inc.

     346          02/01/19        USD     42.50        USD     1,499          (66,951

Cisco Systems, Inc.

     293          02/01/19        USD     48.28        USD     1,270          (7,469

Genuine Parts Co.

     178          02/01/19        USD     97.00        USD     1,709          (38,715

International Paper Co.

     626          02/01/19        USD     44.50        USD     2,527          (21,597

Medtronic PLC

     220          02/01/19        USD     93.00        USD     2,001          (37,730

Microsoft Corp.

     20          02/01/19        USD     106.00        USD     203          (5,210

Pfizer, Inc.

     60          02/01/19        USD     44.00        USD     262          (6,630

 

 

52    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Global Dividend Trust (BOE)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call (continued)                                                   

Philip Morris International, Inc.

     163          02/01/19        USD     71.00        USD     1,088        $ (12,062

U.S. Bancorp

     158          02/01/19        USD     47.50        USD     722          (11,692

Wells Fargo & Co.

     118          02/01/19        USD     49.00        USD     544          (7,493

Wells Fargo & Co.

     151          02/01/19        USD     47.00        USD     696          (20,234

Cisco Systems, Inc.

     346          02/08/19        USD     42.74        USD     1,499          (69,426

International Paper Co.

     774          02/08/19        USD     42.55        USD     3,124          (87,820

Pfizer, Inc.

     26          02/08/19        USD     42.66        USD     113          (4,550

US Bancorp

     201          02/08/19        USD     47.00        USD     919          (21,306

Wells Fargo & Co.

     151          02/08/19        USD     47.01        USD     696          (13,749

Cisco Systems, Inc.

     464          02/15/19        USD     46.00        USD     2,011          (42,920

Cisco Systems, Inc.

     346          02/15/19        USD     43.00        USD     1,499          (75,255

Coca-Cola Co.

     654          02/15/19        USD     50.00        USD     3,097          (27,795

Genuine Parts Co.

     260          02/15/19        USD     105.00        USD     2,497          (9,750

Medtronic PLC

     78          02/15/19        USD     97.50        USD     709          (6,201

Microsoft Corp.

     31          02/15/19        USD     106.20        USD     315          (10,579

Philip Morris International, Inc.

     163          02/15/19        USD     72.50        USD     1,088          (15,322

Procter & Gamble Co.

     430          02/15/19        USD     97.50        USD     3,953          (40,850

Rogers Communications, Inc., Class B

     187          02/15/19        CAD     72.00        CAD     1,308          (13,972

TELUS Corp.

     472          02/15/19        CAD     48.00        CAD     2,136          (7,260

US Bancorp

     201          02/15/19        USD     47.50        USD     919          (19,397

United Technologies Corp.

     164          02/15/19        USD     115.00        USD     1,746          (23,944

Wells Fargo & Co.

     249          02/15/19        USD     47.50        USD     1,147          (34,362
                          

 

 

 
     $ (1,564,757
    

 

 

 

OTC Options Written

 

Description   Counterparty   Number of
Contracts
    Expiration
Date
    Exercise
Price
    Notional
Amount (000)
    Value  
Call                                          

ANTA Sports Products Ltd.

  Morgan Stanley & Co. International PLC     150,000       01/03/19     HKD     35.93     HKD     5,624     $ (35,292

Amcor Ltd.

  Morgan Stanley & Co. International PLC     155,000       01/03/19     AUD     13.83     AUD     2,055       (7

DBS Group Holdings Ltd.

  UBS AG     68,000       01/03/19     SGD     23.88     SGD     1,612       (8,367

Diageo PLC

  Morgan Stanley & Co. International PLC     12,400       01/03/19     GBP     27.80     GBP     348       (6,376

Heineken NV

  Morgan Stanley & Co. International PLC     24,000       01/03/19     EUR     82.09     EUR     1,851       (293

Kone OYJ, Class B

  Citibank N.A.     30,100       01/03/19     EUR     45.50     EUR     1,254       (4

Koninklijke Philips NV

  Morgan Stanley & Co. International PLC     27,000       01/03/19     EUR     34.41     EUR     826       (69

M&T Bank Corp.

  Barclays Bank PLC     16,400       01/03/19     USD     167.66     USD     2,347        

Novo Nordisk A/S, Class B

  Morgan Stanley & Co. International PLC     13,000       01/03/19     DKK     303.49     DKK     3,891       (3,588

Paychex, Inc.

  Morgan Stanley & Co. International PLC     14,100       01/03/19     USD     70.16     USD     919       (1

Sonic Healthcare Ltd.

  Morgan Stanley & Co. International PLC     20,000       01/03/19     AUD     22.38     AUD     443       (2,141

TELUS Corp.

  Credit Suisse International     19,900       01/03/19     CAD     46.84     CAD     900       (2

AstraZeneca PLC

  Goldman Sachs International     44,200       01/04/19     GBP     60.02     GBP     2,588       (13,825

GlaxoSmithKline PLC

  Goldman Sachs International     164,000       01/04/19     GBP     15.42     GBP     2,452       (10,703

Imperial Brands PLC

  Barclays Bank PLC     77,500       01/04/19     GBP     27.70     GBP     1,845       (98

Nestle SA, Registered Shares

  Morgan Stanley & Co. International PLC     35,400       01/04/19     CHF     85.93     CHF     2,824       (203

Schneider Electric SE

  Barclays Bank PLC     11,000       01/04/19     EUR     65.58     EUR     651       (3

Unilever PLC

  Goldman Sachs International     60,000       01/04/19     GBP     41.94     GBP     2,471       (10,111

Rogers Communications, Inc., Class B

  Citibank N.A.     44,000       01/07/19     CAD     68.72     CAD     3,078       (49,625

Deutsche Post AG, Registered Shares

  Citibank N.A.     73,200       01/08/19     EUR     29.42     EUR     1,745       (124

Diageo PLC

  Credit Suisse International     24,900       01/08/19     GBP     27.56     GBP     698       (19,890

Sanofi

  Morgan Stanley & Co. International PLC     35,500       01/08/19     EUR     80.59     EUR     2,688       (2,628

Svenska Handelsbanken AB

  Barclays Bank PLC     117,200       01/08/19     SEK     100.10     SEK     11,557       (9,886

Amcor Ltd.

  UBS AG     398,100       01/09/19     AUD     13.33     AUD     5,279       (34,568

Ansell Ltd.

  Morgan Stanley & Co. International PLC     27,000       01/09/19     AUD     23.55     AUD     596       (479

Kone OYJ, Class B

  UBS AG     27,400       01/09/19     EUR     43.84     EUR     1,142       (2,226

Novartis AG, Registered Shares

  UBS AG     21,500       01/09/19     CHF     90.35     CHF     1,810       (1,068

RELX PLC

  Goldman Sachs International     52,000       01/09/19     EUR     19.20     EUR     934       (607

British American Tobacco PLC

  UBS AG     72,800       01/10/19     GBP     28.14     GBP     1,817       (7,992

SGS SA, Registered Shares

  Goldman Sachs International     1,100       01/10/19     CHF     2,381.58     CHF     2,434       (1,385

SGS SA, Registered Shares

  UBS AG     365       01/10/19     CHF     2,315.33     CHF     808       (2,222

Sonic Healthcare Ltd.

  Citibank N.A.     95,000       01/10/19     AUD     22.99     AUD     2,104       (5,946

 

 

SCHEDULES OF INVESTMENTS      53  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Global Dividend Trust (BOE)

 

OTC Options Written (continued)

 

Description   Counterparty   Number of
Contracts
    Expiration
Date
    Exercise
Price
    Notional
Amount (000)
    Value  
Call                                          

TELUS Corp.

  Citibank N.A.     28,500       01/11/19     CAD     46.93     CAD     1,290     $ (473

TELUS Corp.

  Royal Bank of Canada     14,900       01/11/19     CAD     48.03     CAD     674       (229

ANTA Sports Products Ltd.

  Morgan Stanley & Co. International PLC     360,000       01/15/19     HKD     36.62     HKD     13,496       (92,749

Deutsche Post AG, Registered Shares

  Citibank N.A.     73,200       01/15/19     EUR     29.42     EUR     1,745        

Diageo PLC

  Credit Suisse International     24,900       01/15/19     GBP     27.56     GBP     698       (25,142

Heineken NV

  Morgan Stanley & Co. International PLC     26,200       01/15/19     EUR     79.37     EUR     2,021       (13,743

TELUS Corp.

  Royal Bank of Canada     20,000       01/15/19     CAD     47.75     CAD     905       (1,001

United Overseas Bank Ltd.

  Morgan Stanley & Co. International PLC     149,400       01/15/19     SGD     24.59     SGD     3,684       (50,434

Amcor Ltd.

  Morgan Stanley & Co. International PLC     155,000       01/16/19     AUD     13.90     AUD     2,055       (2,016

Ansell Ltd.

  UBS AG     62,200       01/16/19     AUD     23.96     AUD     1,372       (1,422

DBS Group Holdings Ltd.

  JPMorgan Chase Bank N.A.     87,800       01/16/19     SGD     24.33     SGD     2,081       (11,954

DBS Group Holdings Ltd.

  UBS AG     68,000       01/16/19     SGD     23.88     SGD     1,612       (17,119

GlaxoSmithKline PLC

  Goldman Sachs International     164,000       01/16/19     GBP     15.42     GBP     2,452       (33,183

Imperial Tobacco PLC

  Barclays Bank PLC     77,500       01/16/19     GBP     27.70     GBP     1,845       (6,760

Japan Tobacco, Inc.

  JPMorgan Chase Bank N.A.     35,900       01/16/19     JPY     2,926.73     JPY     93,495       (162

Kone OYJ, Class B

  Goldman Sachs International     44,200       01/16/19     EUR     45.37     EUR     1,842       (1,908

Koninklijke Philips NV

  Morgan Stanley & Co. International PLC     27,000       01/16/19     EUR     34.60     EUR     826       (586

Novartis AG, Registered Shares

  UBS AG     21,500       01/16/19     CHF     90.35     CHF     1,810       (3,545

RELX PLC

  Credit Suisse International     69,700       01/16/19     EUR     18.29     EUR     1,252       (16,999

Sonic Healthcare Ltd.

  Morgan Stanley & Co. International PLC     20,000       01/16/19     AUD     22.49     AUD     443       (4,174

BAE Systems PLC

  Goldman Sachs International     82,500       01/17/19     GBP     5.00     GBP     379       (1,707

Sanofi

  Morgan Stanley & Co. International PLC     35,500       01/17/19     EUR     80.59     EUR     2,688       (9,056

Schneider Electric SE

  Goldman Sachs International     11,000       01/17/19     EUR     65.60     EUR     651       (674

Svenska Handelsbanken AB

  Goldman Sachs International     117,200       01/17/19     SEK     100.13     SEK     11,557       (15,395

TELUS Corp.

  Royal Bank of Canada     36,900       01/18/19     CAD     47.00     CAD     1,670       (3,514

Amcor Ltd.

  UBS AG     82,300       01/23/19     AUD     13.38     AUD     1,091       (10,548

Diageo PLC

  Credit Suisse International     24,900       01/23/19     GBP     28.37     GBP     698       (12,942

Kone OYJ, Class B

  Credit Suisse International     49,500       01/23/19     EUR     42.90     EUR     2,063       (30,214

Svenska Handelsbanken AB

  Credit Suisse International     187,300       01/23/19     SEK     99.34     SEK     18,470       (36,628

TELUS Corp.

  Royal Bank of Canada     21,600       01/23/19     CAD     46.75     CAD     977       (2,022

Taiwan Semiconductor Manufacturing Co. Ltd.

  UBS AG     455,000       01/23/19     USD     228.01     USD     101,551       (84,685

ANTA Sports Products Ltd.

  Goldman Sachs International     199,000       01/24/19     HKD     38.81     HKD     7,461       (34,320

Ansell Ltd.

  Morgan Stanley & Co. International PLC     24,200       01/24/19     AUD     23.19     AUD     534       (3,068

Ansell Ltd.

  Morgan Stanley & Co. International PLC     4,800       01/24/19     AUD     23.40     AUD     106       (454

BAE Systems PLC

  Goldman Sachs International     82,500       01/24/19     GBP     5.00     GBP     379       (2,972

British American Tobacco PLC

  Goldman Sachs International     50,700       01/24/19     GBP     28.30     GBP     1,265       (7,061

Deutsche Post AG, Registered Shares

  UBS AG     65,300       01/24/19     EUR     28.55     EUR     1,557       (4,286

Koninklijke Philips NV

  Goldman Sachs International     56,000       01/24/19     EUR     33.62     EUR     1,714       (5,568

Novo Nordisk A/S, Class B

  Goldman Sachs International     13,000       01/24/19     DKK     307.22     DKK     3,891       (8,453

Sonic Healthcare Ltd.

  UBS AG     79,400       01/24/19     AUD     21.83     AUD     1,759       (40,178

Unilever PLC

  Credit Suisse International     66,300       01/24/19     GBP     43.23     GBP     2,731       (21,552

TELUS Corp.

  Royal Bank of Canada     29,000       01/25/19     CAD     48.00     CAD     1,312       (2,994

Diageo PLC

  Credit Suisse International     24,900       01/29/19     GBP     28.37     GBP     698       (14,836

GlaxoSmithKline PLC

  Deutsche Bank AG     31,900       01/29/19     GBP     14.67     GBP     477       (26,027

Kone OYJ, Class B

  UBS AG     38,800       01/29/19     EUR     44.04     EUR     1,617       (15,968

Nestle SA, Registered Shares

  Deutsche Bank AG     58,300       01/29/19     CHF     83.97     CHF     4,651       (20,705

Novo Nordisk A/S, Class B

  Goldman Sachs International     27,200       01/29/19     DKK     301.92     DKK     8,140       (34,353

Sonic Healthcare Ltd.

  UBS AG     16,600       01/29/19     AUD     21.63     AUD     368       (10,685

Amcor Ltd.

  UBS AG     141,500       01/30/19     AUD     13.32     AUD     1,876       (24,768

Ansell Ltd.

  UBS AG     32,300       01/30/19     AUD     23.64     AUD     713       (4,922

BAE Systems PLC

  Morgan Stanley & Co. International PLC     216,000       01/30/19     GBP     4.68     GBP     991       (28,162

Taiwan Semiconductor Manufacturing Co. Ltd.

  UBS AG     455,000       01/30/19     USD     228.01     USD     101,551       (99,099

British American Tobacco PLC

  Goldman Sachs International     50,700       01/31/19     GBP     28.30     GBP     1,265       (11,305

Imperial Brands PLC

  Credit Suisse International     64,500       01/31/19     GBP     24.55     GBP     1,536       (31,799

Paychex, Inc.

  Barclays Bank PLC     50,000       01/31/19     USD     67.79     USD     3,258       (32,493

Rogers Communications, Inc., Class B

  Citibank N.A.     18,800       01/31/19     CAD     69.94     CAD     1,315       (17,294

Schneider Electric S.A.

  UBS AG     8,500       01/31/19     EUR     62.83     EUR     503       (6,215

TELUS Corp.

  Royal Bank of Canada     47,200       01/31/19     CAD     47.75     CAD     2,136       (2,095

TELUS Corp.

  Royal Bank of Canada     21,500       02/01/19     CAD     46.75     CAD     973       (3,234

DBS Group Holdings Ltd.

  BNP Paribas S.A.     74,100       02/04/19     SGD     23.77     SGD     1,756       (32,540

TELUS Corp.

  Goldman Sachs International     25,000       02/04/19     CAD     46.65     CAD     1,131       (4,536

United Overseas Bank Ltd.

  Morgan Stanley & Co. International PLC     123,300       02/04/19     SGD     24.54     SGD     3,041       (62,973

 

 

54    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Global Dividend Trust (BOE)

 

OTC Options Written (continued)

 

Description   Counterparty   Number of
Contracts
    Expiration
Date
    Exercise
Price
    Notional
Amount (000)
    Value  
Call                                          

Japan Tobacco, Inc.

  JPMorgan Chase Bank N.A.     37,000       02/05/19     JPY     2,877.38     JPY     96,360     $ (3,493

Amcor Ltd.

  Morgan Stanley & Co. International PLC     141,500       02/06/19     AUD     13.32     AUD     1,876       (27,692

Ansell Ltd.

  Morgan Stanley & Co. International PLC     32,300       02/06/19     AUD     23.64     AUD     713       (6,192

BAE Systems PLC

  Morgan Stanley & Co. International PLC     248,800       02/06/19     GBP     4.79     GBP     1,142       (23,058

Diageo PLC

  UBS AG     61,100       02/06/19     GBP     27.94     GBP     1,713       (55,115

Kone OYJ, Class B

  Credit Suisse International     27,400       02/06/19     EUR     43.05     EUR     1,142       (21,866

Nestle SA, Registered Shares

  Morgan Stanley & Co. International PLC     35,400       02/06/19     CHF     82.55     CHF     2,824       (28,043

Novartis AG, Registered Shares

  Credit Suisse International     94,200       02/06/19     CHF     90.48     CHF     7,930       (32,149

RELX PLC

  Credit Suisse International     52,000       02/06/19     EUR     18.14     EUR     934       (24,473

Sanofi

  Credit Suisse International     37,300       02/06/19     EUR     77.09     EUR     2,824       (61,619

Sonic Healthcare Ltd.

  JPMorgan Chase Bank N.A.     68,900       02/06/19     AUD     21.68     AUD     1,526       (44,260

Schneider Electric S.A

  Morgan Stanley & Co. International PLC     34,400       02/06/19     EUR     62.16     EUR     2,036       (38,175

TELUS Corp.

  Royal Bank of Canada     24,900       02/06/19     CAD     46.62     CAD     1,127       (4,890

Rogers Communications, Inc., Class B

  Credit Suisse International     37,500       02/11/19     CAD     71.72     CAD     2,624       (25,448

BAE Systems PLC

  UBS AG     172,500       02/12/19     GBP     4.71     GBP     792       (26,809

GlaxoSmithKline PLC

  Goldman Sachs International     50,000       02/12/19     GBP     15.48     GBP     748       (22,194

Novo Nordisk A/S, Class B

  Goldman Sachs International     30,800       02/12/19     DKK     305.65     DKK     9,218       (40,398

ANTA Sports Products Ltd.

  Goldman Sachs International     199,000       02/13/19     HKD     38.81     HKD     7,461       (50,979

Citizens Financial Group, Inc.

  Goldman Sachs International     46,600       02/13/19     USD     34.36     USD     1,385       (3,778

Schneider Electric S.A

  UBS AG     24,800       02/13/19     EUR     59.53     EUR     1,468       (58,258

Unilever PLC

  Credit Suisse International     66,300       02/13/19     GBP     43.23     GBP     2,731       (32,017

BAE Systems PLC

  UBS AG     172,500       02/19/19     GBP     4.71     GBP     792       (29,764

Japan Tobacco, Inc.

  UBS AG     35,800       02/20/19     JPY     2,870.69     JPY     93,671       (6,136

BAE Systems PLC

  Morgan Stanley & Co. International PLC     216,000       02/26/19     GBP     4.68     GBP     992       (42,040
               

 

 

 
  $ (2,044,474
 

 

 

 

Balances Reported in the Statements of Assets and Liabilities for Options Written

 

      Swap
Premium
Paid
     Swap
Premium
Received
   Unrealized
Appreciation
     Unrealized
Depreciation
   Value  

Options Written

     N/A      N/A    $ 4,274,244      $(487,910)    $ (3,609,231

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Assets — Derivative Financial Instruments

 

                 

Options purchased

 

Investments at value — unaffiliated(a)

   $      $      $ 1,624      $      $      $      $ 1,624  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes options purchased at value as reported in the Schedule of Investments.

 

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Liabilities — Derivative Financial Instruments

 

                 

Options written

 

                 

Options written, at value

   $      $      $ 3,609,231      $      $      $      $ 3,609,231  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

SCHEDULES OF INVESTMENTS      55  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Global Dividend Trust (BOE)

 

For the period ended December 31, 2018, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

      Commodity
Contracts
       Credit
Contracts
       Equity
Contracts
       Foreign
Currency
Exchange
Contracts
       Interest
Rate
Contracts
       Other
Contracts
       Total  

Net Realized Gain (Loss) from:

 

                             

Options purchased(a)

   $        $        $ (2,220      $        $        $        $ (2,220

Options written

                       (1,712,691                                   (1,712,691
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
   $        $        $ (1,714,911           $        $        $ (1,714,911
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

Options purchased are included in net realized gain (loss) from investments.

 

 

      Commodity
Contracts
       Credit
Contracts
       Equity
Contracts
       Foreign
Currency
Exchange
Contracts
       Interest
Rate
Contracts
       Other
Contracts
       Total  

Net Change in Unrealized Appreciation (Depreciation) on:

 

                             

Options purchased(a)

   $        $        $ (3,011      $        $        $        $ (3,011

Options written

                       3,709,364                                     3,709,364  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
   $        $        $ 3,706,353        $        $        $        $ 3,706,353  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

Options purchased are included in net change in unrealized appreciation (depreciation) on investments.

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Options:

 

Average value of option contracts purchased

   $ 406  

Average value of option contracts written

   $ 5,431,119  

For more information about the Trust’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

Derivative Financial Instruments — Offsetting as of Period End

The Trust’s derivative assets and liabilities (by type) are as follows:

 

      Assets        Liabilities  

Options

       

Total derivative assets and liabilities in the Statements of Assets and Liabilities

   $ 1,624        $ 3,609,231  

Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)

     (1,624        (1,564,757
  

 

 

      

 

 

 

Total derivative assets and liabilities subject to an MNA

   $        $ 2,044,474  
  

 

 

      

 

 

 

The following table presents the Trust’s derivative assets (and liabilities) by counterparty net of amounts available for offset under an MNA and net of the related collateral received (and pledged) by the Trust:

 

Counterparty    Derivative
Liabilities
Subject to
an MNA by
Counterparty
       Derivatives
Available
for Offset
       Non-cash
Collateral
Pledged
 (a)
       Cash
Collateral
Pledged
       Net Amount
of Derivative
Liabilities
  (b)
 

Barclays Bank PLC

   $ 49,240        $        $ (49,240      $        $  

BNP Paribas S.A.

     32,540                                     32,540  

Citibank N.A.

     73,466                   (73,466                  

Credit Suisse International

     407,576                   (407,576                  

Deutsche Bank AG

     46,732                                     46,732  

Goldman Sachs International

     315,415                   (315,415                  

JPMorgan Chase Bank N.A.

     59,869                   (59,869                  

Morgan Stanley & Co. International PLC

     483,692                   (483,692                  

Royal Bank of Canada

     19,979                                     19,979  

UBS AG

     555,965                   (552,161                 3,804  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
   $ 2,044,474        $        $ (1,941,419      $        $ 103,055  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

Excess of collateral pledged to the individual counterparty is not shown for financial reporting purposes.

 
  (b) 

Net amount represents the net amount payable due to counterparty in the event of default. Net amount may be offset further by the options written receivable/payable on the Statements of Assets and Liabilities.

 

 

 

56    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Global Dividend Trust (BOE)

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

      Level 1        Level 2        Level 3        Total  

Assets:

 

Investments:

 

Common Stocks:

 

Australia

   $        $ 40,733,642        $ 3        $ 40,733,645  

Canada

     48,796,156                            48,796,156  

China

              7,248,060                   7,248,060  

Denmark

              8,563,240                   8,563,240  

Finland

              23,057,120                   23,057,120  

France

              25,574,954                   25,574,954  

Germany

              17,594,177                   17,594,177  

India

              7,447,187          711,221          8,158,408  

Ireland

     9,895,993                            9,895,993  

Japan

              7,377,816                   7,377,816  

Netherlands

              18,176,165                   18,176,165  

Singapore

              22,474,053                   22,474,053  

Sweden

              10,425,147                   10,425,147  

Switzerland

              42,624,487                   42,624,487  

Taiwan

              14,689,467                   14,689,467  

United Kingdom

              116,910,649                   116,910,649  

United States

     302,497,520                   3,818,703          306,316,223  

Preferred Stocks

                       5,843,081          5,843,081  

Short-Term Securities

     19,702,446                            19,702,446  

Options Purchased:

       

Equity contracts

     1,624                            1,624  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ 380,893,739        $ 362,896,164        $ 10,373,008        $ 754,162,911  
  

 

 

      

 

 

      

 

 

      

 

 

 

Derivative Financial Instruments(a)

 

Liabilities:

 

Equity contracts

   $ (1,337,378      $ (2,271,853      $        $ (3,609,231
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

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

 

Transfers between Level 1 and Level 2 were as follows:

 

      Transfers Into
Level 2
 (a)
       Transfers Out of
Level 1
 (a)
 

Assets:

 

Investments:

 

Common Stocks

   $ 10,912,439        $ (10,912,439
  

 

 

      

 

 

 

 

  (a) 

External pricing service used to reflect any significant market movements between the time the Trust valued such foreign securities and the earlier closing of foreign markets.

 

 

 

SCHEDULES OF INVESTMENTS      57  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced Global Dividend Trust (BOE)

 

A reconciliation of Level 3 investments is presented when the Trust had a significant amount of Level 3 investments at the beginning and/or end of the year in relation to net assets. The following table is a reconciliation of Level 3 investments for which significant unobservable inputs were used in determining fair value:

 

      Common
Stocks
       Preferred
Stocks
       Total  

Assets:

            

Opening Balance, as of December 31, 2017

   $ 4,411,841        $ 11,646,491        $ 16,058,332  

Transfers into Level 3

                        

Transfers out of Level 3

                        

Accrued discounts/premiums

                        

Net realized gain (loss)

              3,369,128          3,369,128  

Net change in unrealized appreciation (depreciation)(a)(b)

     (2,519,060        (386,567        (2,905,627

Purchases

     2,637,146                   2,637,146  

Sales

              (8,785,971        (8,785,971
  

 

 

      

 

 

      

 

 

 

Closing Balance as of December 31, 2018

   $ 4,529,927        $ 5,843,081        $ 10,373,008  
  

 

 

      

 

 

      

 

 

 

Net change in unrealized appreciation (depreciation) on investments held as of December 31, 2018(b)

   $ (2,519,060      $ (2,435,642      $ (4,954,702
  

 

 

      

 

 

      

 

 

 

 

  (a) 

Included in the related net change in unrealized appreciation (depreciation) in the Statements of Operations.

 
  (b) 

Any difference between net change in unrealized appreciation (depreciation) and net change in unrealized appreciation (depreciation) on derivative financial instruments still held at December 31, 2018 is generally due to derivative financial instruments no longer held or categorized as Level 3 at period end.

 

The following table summarizes the valuation approaches used and unobservable inputs utilized by the BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) to determine the value of certain of the Trust’s Level 3 investments as of period end. The table does not include Level 3 investments with values based upon unadjusted third party pricing information in the amount of $3. A significant change in the third party information could result in a significantly lower or higher value of such Level 3 investments.

 

      Value        Valuation Approach        Unobservable Inputs     

Range of
Unobservable

Inputs Utilized

      

Weighted
Average of

Unobservable
Inputs

 

Assets:

                    

Common Stocks

               Tangible Book Value Multiple(a)        1.65x           
   $ 4,529,924          Market          Revenue Multiple(a)        6.25x           

Preferred Stocks(b)

     5,843,081          Market          Revenue Multiple(a)        6.50x – 14.25x          10.15x  
  

 

 

                   
   $ 10,373,005                    
  

 

 

                   

 

  (a) 

Increase in unobservable input may result in a significant increase to value, while an decrease in unobservable input may result in a significant decrease to value.

 
  (b) 

For the year ended December 31, 2018, the valuation technique for investments classified as preferred stocks amounting to $3,090,473 changed to Current Value. The investments were previously valued utilizing Transaction Price. The change was due to consideration of the information that was available at the time the investments were valued.

 

See notes to financial statements.

 

 

58    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  

December 31, 2018

  

BlackRock Enhanced International Dividend Trust (BGY)

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Common Stocks — 94.6%  
Australia — 9.0%  

Amcor Ltd.

    3,183,632     $ 29,727,008  

Ansell Ltd.

    642,538       9,981,639  

Sonic Healthcare Ltd.

    1,045,833       16,315,117  
   

 

 

 
    56,023,764  
Canada — 10.5%  

Rogers Communications, Inc., Class B

    617,651       31,651,673  

TELUS Corp.

    1,017,097       33,712,012  
   

 

 

 
    65,363,685  
China — 1.8%  

ANTA Sports Products Ltd.

    2,377,600       11,382,422  
   

 

 

 
Denmark — 2.0%  

Novo Nordisk A/S, Class B

    269,928       12,397,002  
   

 

 

 
Finland — 5.0%  

Kone OYJ, Class B

    658,664       31,445,516  
   

 

 

 
France — 5.7%  

Sanofi

    191,073       16,575,551  

Schneider Electric SE

    274,631       18,628,552  
   

 

 

 
    35,204,103  
Germany — 3.9%  

Deutsche Post AG, Registered Shares

    881,559       24,074,680  
   

 

 

 
India — 1.8%  

Hero MotoCorp Ltd.

    258,655       11,493,426  
   

 

 

 
Japan — 1.6%  

Japan Tobacco, Inc.

    421,300       10,010,543  
   

 

 

 
Netherlands — 4.1%  

Heineken NV

    149,488       13,212,762  

Koninklijke Philips NV

    347,780       12,192,988  
   

 

 

 
    25,405,750  
Singapore — 3.0%  

DBS Group Holdings Ltd.

    561,600       9,766,137  

United Overseas Bank Ltd.

    507,200       9,175,242  
   

 

 

 
    18,941,379  
Sweden — 2.6%  

Svenska Handelsbanken AB, Class A

    1,471,323       16,369,462  
   

 

 

 
Switzerland — 9.4%  

Nestle SA, Registered Shares

    304,853       24,742,707  

Novartis AG, Registered Shares

    282,575       24,200,907  

SGS SA, Registered Shares

    4,257       9,582,595  
   

 

 

 
      58,526,209  
Taiwan — 3.2%  

Taiwan Semiconductor Manufacturing Co. Ltd.

    2,721,000       19,757,804  
   

 

 

 
United Kingdom — 26.3%  

AstraZeneca PLC

    197,796       14,764,665  

BAE Systems PLC

    3,638,573       21,281,478  

British American Tobacco PLC

    693,784       22,075,522  

Diageo PLC

    497,626       17,782,365  

GlaxoSmithKline PLC

    1,291,186       24,607,445  

Imperial Brands PLC

    996,810       30,254,888  

RELX PLC

    513,773       10,571,005  

Unilever PLC

    433,115       22,739,738  
   

 

 

 
    164,077,106  
Security   Shares     Value  
United States — 4.7%  

3M Co.(a)(b)

    102,009     $ 19,436,795  

Microsoft Corp.(a)(b)

    98,435       9,998,043  
   

 

 

 
    29,434,838  
   

 

 

 

Total Common Stocks — 94.6%
(Cost — $ 656,296,615)

 

    589,907,689  
   

 

 

 

Preferred Stocks — 0.8%

 

China — 0.6%  

Xiaoju Kuaizhi, Inc., Series A-17
(Acquired 07/28/15, cost $2,106,332), 0.00%(c)(d)(e)

    76,800       3,455,232  
   

 

 

 
India — 0.2%            

Jasper Infotech Private Ltd., Series I,
(Acquired 05/07/14-10/19/14, cost $3,948,600), 0.00%(c)(d)(e)

    5,300       1,064,823  
   

 

 

 

Total Preferred Stocks — 0.8%
(Cost — $6,054,932)

 

    4,520,055  
   

 

 

 

Total Long-Term Investments — 95.4%
(Cost —$662,351,547)

 

    594,427,744  
   

 

 

 

Short-Term Securities — 4.1%

 

BlackRock Liquidity Funds, T-Fund, Institutional Class,
2.32%(f)(g)

    25,489,943       25,489,943  
   

 

 

 

Total Short-Term Securities — 4.1%
(Cost — $25,489,943)

 

    25,489,943  
   

 

 

 

Total Investments Before Options Written — 99.5%
(Cost — $687,841,490)

 

    619,917,687  
   

 

 

 

Options Written — (0.5)%
(Premiums Received — $5,889,810)

 

    (2,991,651
   

 

 

 

Total Investments, Net of Options Written — 99.0%
(Cost — $681,951,680)

 

    616,926,036  

Other Assets Less Liabilities — 1.0%

 

    6,308,414  
   

 

 

 

Net Assets — 100.0%

 

  $ 623,234,450  
   

 

 

 

 

(a) 

All or a portion of the security has been pledged and/or segregated as collateral in connection with outstanding exchange-traded options written.

(b) 

All or a portion of the security has been pledged as collateral in connection with outstanding OTC derivatives.

(c) 

Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy.

(d) 

Restricted security as to resale, excluding 144A securities. As of period end, the Trust held restricted securities with a current value of $4,520,055 and an original cost of $6,054,932, which was 0.7% of its net assets.

(e) 

Non-income producing security.

(f) 

Annualized 7-day yield as of period end.

 

 

 

SCHEDULES OF INVESTMENTS      59  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced International Dividend Trust (BGY)

 

(g) 

During the year ended December 31, 2018, investments in issuers considered to be an affiliate of the Trust for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate    Shares
Held at
12/31/17
     Net
Activity
     Shares
Held at
12/31/18
     Value at
12/31/18
     Income      Net
Realized
Gain (Loss)
 (a)
     Change in
Unrealized
Appreciation
(Depreciation)
 

BlackRock Liquidity Funds, T-Fund, Institutional Class

     5,073,700        20,416,243        25,489,943      $ 25,489,943      $ 103,479      $      $  
             

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes net capital gain distributions, if applicable.

 

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

Derivative Financial Instruments Outstanding as of Period End

Exchange-Traded Options Written

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  

Call
3M Co.

     114          01/04/19        USD     202.50        USD     2,172        $ (912

Rogers Communications, Inc., Class B

     818          01/04/19        CAD     71.50        CAD     5,723          (8,388

3M Co.

     97          01/11/19        USD     210.00        USD     1,848          (1,067

Microsoft Corp.

     95          01/11/19        USD     112.00        USD     965          (1,140

Microsoft Corp.

     184          01/18/19        USD     110.00        USD     1,869          (8,648

Rogers Communications, Inc., Class B

     722          01/18/19        CAD     70.00        CAD     5,051          (58,968

Rogers Communications, Inc., Class B

     476          01/18/19        CAD     72.00        CAD     3,330          (12,726

3M Co.

     114          01/25/19        USD     205.00        USD     2,172          (10,089

Microsoft Corp.

     127          01/25/19        USD     113.00        USD     1,290          (5,905

Microsoft Corp.

     92          01/25/19        USD     106.00        USD     934          (19,136

3M Co.

     134          02/01/19        USD     202.50        USD     2,553          (28,073

Microsoft Corp.

     92          02/01/19        USD     106.00        USD     934          (23,966

Rogers Communications, Inc., Class B

     183          02/15/19        CAD     72.00        CAD     1,280          (13,673

TELUS Corp.

     571          02/15/19        CAD     48.00        CAD     2,584          (8,783
                          

 

 

 
                           $ (201,474
                          

 

 

 

OTC Options Written

 

Description   Counterparty   Number of
Contracts
    Expiration
Date
    Exercise
Price
    Notional
Amount (000)
    Value  
Call  

ANTA Sports Products Ltd.

  Morgan Stanley & Co. International PLC     150,000       01/03/19     HKD     35.93     HKD     5,624     $ (35,292

Amcor Ltd.

  Morgan Stanley & Co. International PLC     185,000       01/03/19     AUD     13.83     AUD     2,453       (8

DBS Group Holdings Ltd.

  UBS AG     60,000       01/03/19     SGD     23.88     SGD     1,422       (7,383

Diageo PLC

  Morgan Stanley & Co. International PLC     77,800       01/03/19     GBP     27.80     GBP     2,182       (40,003

Heineken NV

  Morgan Stanley & Co. International PLC     45,000       01/03/19     EUR     82.09     EUR     3,471       (550

Kone OYJ, Class B

  Citibank N.A.     23,600       01/03/19     EUR     45.50     EUR     983       (3

Koninklijke Philips NV

  Morgan Stanley & Co. International PLC     40,000       01/03/19     EUR     34.41     EUR     1,224       (102

Novo Nordisk A/S, Class B

  Morgan Stanley & Co. International PLC     41,000       01/03/19     DKK     303.49     DKK     12,270       (11,317

Sonic Healthcare Ltd.

  Morgan Stanley & Co. International PLC     52,000       01/03/19     AUD     22.38     AUD     1,152       (5,567

TELUS Corp.

  Credit Suisse International     31,200       01/03/19     CAD     46.84     CAD     1,412       (4

AstraZeneca PLC

  Goldman Sachs International     16,200       01/04/19     GBP     60.02     GBP     949       (5,067

GlaxoSmithKline PLC

  Goldman Sachs International     34,800       01/04/19     GBP     15.42     GBP     520       (2,271

Imperial Brands PLC

  Barclays Bank PLC     92,000       01/04/19     GBP     27.70     GBP     2,191       (117

Nestle SA, Registered Shares

  Morgan Stanley & Co. International PLC     67,300       01/04/19     CHF     85.93     CHF     5,369       (385

Schneider Electric SE

  Barclays Bank PLC     21,100       01/04/19     EUR     65.58     EUR     1,249       (5

Unilever PLC

  Goldman Sachs International     72,000       01/04/19     GBP     41.94     GBP     2,966       (12,134

Rogers Communications, Inc., Class B

  Citibank N.A.     26,000       01/07/19     CAD     68.72     CAD     1,819       (29,324

Deutsche Post AG, Registered Shares

  Citibank N.A.     100,000       01/08/19     EUR     29.42     EUR     2,384       (170

Diageo PLC

  Credit Suisse International     33,700       01/08/19     GBP     27.56     GBP     945       (26,920

Sanofi

  Morgan Stanley & Co. International PLC     32,000       01/08/19     EUR     80.59     EUR     2,423       (2,369

Svenska Handelsbanken AB

  Barclays Bank PLC     210,800       01/08/19     SEK     100.1     SEK     20,787       (17,781

Amcor Ltd.

  UBS AG     318,000       01/09/19     AUD     13.33     AUD     4,217       (27,613

Ansell Ltd.

  Morgan Stanley & Co. International PLC     52,600       01/09/19     AUD     23.55     AUD     1,160       (932

 

 

60    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced International Dividend Trust (BGY)

 

OTC Options Written (continued)

 

Description   Counterparty   Number of
Contracts
    Expiration
Date
    Exercise
Price
    Notional
Amount (000)
    Value  
Call (continued)  

Kone OYJ, Class B

  UBS AG     65,150       01/09/19     EUR     43.84     EUR     2,715     $ (5,293

Novartis AG, Registered Shares

  UBS AG     63,500       01/09/19     CHF     90.35     CHF     5,345       (3,155

RELX PLC

  Goldman Sachs International     69,000       01/09/19     EUR     19.20     EUR     1,239       (805

British American Tobacco PLC

  UBS AG     113,500       01/10/19     GBP     28.14     GBP     2,833       (12,460

SGS SA, Registered Shares

  Goldman Sachs International     1,500       01/10/19     CHF     2,381.58     CHF     3,319       (1,889

SGS SA, Registered Shares

  UBS AG     500       01/10/19     CHF     2,315.33     CHF     1,106       (3,044

Sonic Healthcare Ltd.

  Citibank N.A.     89,000       01/10/19     AUD     22.99     AUD     1,971       (5,571

Taiwan Semiconductor Manufacturing Co. Ltd.

  JPMorgan Chase Bank N.A.     235,000       01/10/19     USD     225.12     USD     52,450       (35,696

TELUS Corp.

  Citibank N.A.     33,500       01/11/19     CAD     46.93     CAD     1,516       (556

TELUS Corp.

  Royal Bank of Canada     16,300       01/11/19     CAD     48.03     CAD     738       (251

ANTA Sports Products Ltd.

  Morgan Stanley & Co. International PLC     468,000       01/15/19     HKD     36.62     HKD     17,545       (120,574

Deutsche Post AG, Registered Shares

  Citibank N.A.     100,000       01/15/19     EUR     29.42     EUR     2,384        

Diageo PLC

  Credit Suisse International     33,700       01/15/19     GBP     27.56     GBP     945       (34,027

Heineken NV

  Morgan Stanley & Co. International PLC     22,300       01/15/19     EUR     79.37     EUR     1,720       (11,698

TELUS Corp.

  Royal Bank of Canada     20,000       01/15/19     CAD     47.75     CAD     905       (1,001

United Overseas Bank Ltd.

  Morgan Stanley & Co. International PLC     117,300       01/15/19     SGD     24.59     SGD     2,893       (39,598

Amcor Ltd.

  Morgan Stanley & Co. International PLC     185,000       01/16/19     AUD     13.90     AUD     2,453       (2,406

Ansell Ltd.

  UBS AG     91,800       01/16/19     AUD     23.96     AUD     2,025       (2,099

DBS Group Holdings Ltd.

  JPMorgan Chase Bank N.A.     71,800       01/16/19     SGD     24.33     SGD     1,702       (9,776

DBS Group Holdings Ltd.

  UBS AG     60,000       01/16/19     SGD     23.88     SGD     1,422       (15,105

Imperial Brands PLC

  Barclays Bank PLC     92,000       01/16/19     GBP     27.70     GBP     2,191       (8,025

Japan Tobacco, Inc.

  JPMorgan Chase Bank N.A.     51,700       01/16/19     JPY     2,926.73     JPY     134,644       (234

Kone OYJ, Class B

  Goldman Sachs International     52,000       01/16/19     EUR     45.37     EUR     2,167       (2,244

Koninklijke Philips NV

  Morgan Stanley & Co. International PLC     40,000       01/16/19     EUR     34.60     EUR     1,224       (868

Novartis AG, Registered Shares

  UBS AG     63,500       01/16/19     CHF     90.35     CHF     5,345       (10,470

RELX PLC

  Credit Suisse International     93,100       01/16/19     EUR     18.29     EUR     1,672       (22,706

Sonic Healthcare Ltd.

  Morgan Stanley & Co. International PLC     52,000       01/16/19     AUD     22.49     AUD     1,152       (10,854

BAE Systems PLC

  Goldman Sachs International     159,000       01/17/19     GBP     5.00     GBP     730       (3,289

Sanofi

  Morgan Stanley & Co. International PLC     32,000       01/17/19     EUR     80.59     EUR     2,423       (8,163

Schneider Electric SE

  Goldman Sachs International     21,100       01/17/19     EUR     65.6     EUR     1,249       (1,293

Svenska Handelsbanken AB

  Goldman Sachs International     210,800       01/17/19     SEK     100.13     SEK     20,787       (27,690

TELUS Corp.

  Royal Bank of Canada     62,300       01/18/19     CAD     47.00     CAD     2,819       (5,932

Amcor Ltd.

  UBS AG     247,700       01/23/19     AUD     13.38     AUD     3,285       (31,746

Diageo PLC

  Credit Suisse International     20,600       01/23/19     GBP     28.37     GBP     578       (10,707

Kone OYJ, Class B

  Credit Suisse International     55,900       01/23/19     EUR     42.90     EUR     2,329       (34,121

Svenska Handelsbanken AB

  Credit Suisse International     240,500       01/23/19     SEK     99.34     SEK     23,716       (47,032

TELUS Corp.

  Royal Bank of Canada     33,300       01/23/19     CAD     46.75     CAD     1,507       (3,117

Taiwan Semiconductor Manufacturing Co. Ltd.

  UBS AG     494,000       01/23/19     USD     228.01     USD     110,256       (91,943

ANTA Sports Products Ltd.

  Goldman Sachs International     404,000       01/24/19     HKD     38.81     HKD     15,146       (69,674

Ansell Ltd.

  Morgan Stanley & Co. International PLC     32,100       01/24/19     AUD     23.19     AUD     708       (4,069

Ansell Ltd.

  Morgan Stanley & Co. International PLC     25,900       01/24/19     AUD     23.40     AUD     571       (2,448

AstraZeneca PLC

  UBS AG     8,000       01/24/19     GBP     63.35     GBP     468       (1,980

BAE Systems PLC

  Goldman Sachs International     159,000       01/24/19     GBP     5.00     GBP     730       (5,729

British American Tobacco PLC

  Goldman Sachs International     64,700       01/24/19     GBP     28.30     GBP     1,615       (9,010

Deutsche Post AG, Registered Shares

  UBS AG     89,600       01/24/19     EUR     28.55     EUR     2,136       (5,881

Koninklijke Philips NV

  Goldman Sachs International     82,000       01/24/19     EUR     33.62     EUR     2,509       (8,153

Novo Nordisk A/S, Class B

  Goldman Sachs International     41,000       01/24/19     DKK     307.22     DKK     12,270       (26,661

Sonic Healthcare Ltd.

  UBS AG     120,600       01/24/19     AUD     21.83     AUD     2,671       (61,026

Unilever PLC

  Credit Suisse International     59,400       01/24/19     GBP     43.23     GBP     2,447       (19,309

TELUS Corp.

  Royal Bank of Canada     42,100       01/25/19     CAD     48.00     CAD     1,905       (4,347

Diageo PLC

  Credit Suisse International     20,600       01/29/19     GBP     28.37     GBP     578       (12,274

GlaxoSmithKline PLC

  Deutsche Bank AG     260,300       01/29/19     GBP     14.67     GBP     3,891       (212,378

Kone OYJ, Class B

  UBS AG     34,600       01/29/19     EUR     44.04     EUR     1,442       (14,239

Nestle SA, Registered Shares

  Deutsche Bank AG     45,600       01/29/19     CHF     83.97     CHF     3,638       (16,194

Novo Nordisk A/S, Class B

  Goldman Sachs International     17,100       01/29/19     DKK     301.92     DKK     5,118       (21,597

Sonic Healthcare Ltd.

  UBS AG     75,800       01/29/19     AUD     21.63     AUD     1,679       (48,791

Amcor Ltd.

  UBS AG     248,500       01/30/19     AUD     13.32     AUD     3,295       (43,497

Ansell Ltd.

  UBS AG     43,400       01/30/19     AUD     23.64     AUD     957       (6,613

BAE Systems PLC

  Morgan Stanley & Co. International PLC     316,000       01/30/19     GBP     4.68     GBP     1,450       (41,199

Imperial Brands PLC

  UBS AG     125,600       01/30/19     GBP     26.37     GBP     2,991       (58,884

Taiwan Semiconductor Manufacturing Co. Ltd.

  UBS AG     494,000       01/30/19     USD     228.01     USD     110,256       (107,593

British American Tobacco PLC

  Goldman Sachs International     64,700       01/31/19     GBP     28.30     GBP     1,615       (14,427

 

 

SCHEDULES OF INVESTMENTS      61  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced International Dividend Trust (BGY)

 

OTC Options Written (continued)

 

Description   Counterparty   Number of
Contracts
    Expiration
Date
    Exercise
Price
    Notional
Amount (000)
    Value  
Call (continued)  

Diageo PLC

  UBS AG     32,600       01/31/19       GBP       28.96       GBP       914     $ (10,284

Imperial Brands PLC

  Credit Suisse International     45,000       01/31/19       GBP       24.55       GBP       1,071       (22,186

Rogers Communications, Inc., Class B

  Citibank N.A.     18,200       01/31/19       CAD       69.94       CAD       1,273       (16,742

Sanofi

  Goldman Sachs International     6,200       01/31/19       EUR       80.20       EUR       469       (3,331

Suncor Energy, Inc.

  UBS AG     18,500       01/31/19       EUR       62.83       EUR       1,095       (13,528

TELUS Corp.

  Royal Bank of Canada     57,100       01/31/19       CAD       47.75       CAD       2,584       (2,534

TELUS Corp.

  Royal Bank of Canada     33,400       02/01/19       CAD       46.75       CAD       1,511       (5,023

DBS Group Holdings Ltd.

  BNP Paribas S.A.     61,000       02/04/19       SGD       23.77       SGD       1,446       (26,788

TELUS Corp.

  Goldman Sachs International     35,600       02/04/19       CAD       46.65       CAD       1,611       (6,459

United Overseas Bank Ltd.

  Morgan Stanley & Co. International PLC     111,000       02/04/19       SGD       24.54       SGD       2,737       (56,691

Japan Tobacco, Inc.

  JPMorgan Chase Bank N.A.     44,000       02/05/19       JPY       2,877.38       JPY       114,591       (4,153

Amcor Ltd.

  Morgan Stanley & Co. International PLC     248,500       02/06/19       AUD       13.32       AUD       3,295       (48,633

Ansell Ltd.

  Morgan Stanley & Co. International PLC     43,400       02/06/19       AUD       23.64       AUD       957       (8,319

BAE Systems PLC

  Morgan Stanley & Co. International PLC     230,400       02/06/19       GBP       4.79       GBP       1,058       (21,353

Diageo PLC

  UBS AG     5,000       02/06/19       GBP       27.94       GBP       140       (4,510

Kone OYJ, Class B

  Credit Suisse International     65,150       02/06/19       EUR       43.05       EUR       2,715       (51,992

Nestle SA, Registered Shares

  Morgan Stanley & Co. International PLC     57,100       02/06/19       CHF       82.55       CHF       4,555       (45,233

Novartis AG, Registered Shares

  Credit Suisse International     53,400       02/06/19       CHF       90.48       CHF       4,495       (18,224

RELX PLC

  Credit Suisse International     69,000       02/06/19       EUR       18.14       EUR       1,239       (32,473

Sanofi

  Credit Suisse International     71,300       02/06/19       EUR       77.09       EUR       5,398       (117,787

Suncor Energy, Inc.

  Morgan Stanley & Co. International PLC     25,700       02/06/19       EUR       62.16       EUR       1,521       (28,520

TELUS Corp.

  Royal Bank of Canada     35,700       02/06/19       CAD       46.62       CAD       1,615       (7,011

Rogers Communications, Inc., Class B

  Credit Suisse International     36,500       02/11/19       CAD       71.72       CAD       2,554       (24,770

BAE Systems PLC

  UBS AG     228,500       02/12/19       GBP       4.71       GBP       1,049       (35,512

GlaxoSmithKline PLC

  Goldman Sachs International     286,000       02/12/19       GBP       15.48       GBP       4,276       (126,952

Novo Nordisk A/S, Class B

  Goldman Sachs International     22,400       02/12/19       DKK       305.65       DKK       6,704       (29,380

ANTA Sports Products Ltd.

  Goldman Sachs International     404,000       02/13/19       HKD       38.81       HKD       15,146       (103,494

Suncor Energy, Inc.

  UBS AG     37,100       02/13/19       EUR       59.53       EUR       2,196       (87,152

Unilever PLC

  Credit Suisse International     59,400       02/13/19       GBP       43.23       GBP       2,447       (28,685

Unilever PLC

  Morgan Stanley & Co. International PLC     69,000       02/13/19       GBP       44.49       GBP       2,842       (25,939

BAE Systems PLC

  UBS AG     228,500       02/19/19       GBP       4.71       GBP       1,049       (39,427

Japan Tobacco, Inc.

  UBS AG     51,700       02/20/19       JPY       2,870.69       JPY       134,644       (8,862

BAE Systems PLC

  Morgan Stanley & Co. International PLC     316,000       02/26/19       GBP       4.68       GBP       1,450       (61,502
               

 

 

 
                $ (2,790,177
               

 

 

 

Balances Reported in the Statements of Assets and Liabilities for Options Written

 

      Swap
Premium
Paid
     Swap
Premium
Received
     Unrealized
Appreciation
     Unrealized
Depreciation
     Value  

Options Written

     N/A        N/A      $ 3,213,242      $ (315,083    $ (2,991,651

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Liabilities — Derivative Financial Instrument

 

Options written

 

Options written at value

   $      $      $ 2,991,651      $      $      $      $ 2,991,651  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

62    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced International Dividend Trust (BGY)

 

For the year ended December 31, 2018, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

      Commodity
Contracts
       Credit
Contracts
       Equity
Contracts
       Foreign
Currency
Exchange
Contracts
       Interest
Rate
Contracts
       Other
Contracts
       Total  

Net Realized Gain (Loss) from:

                                

Options written

   $        $        $ 2,536,527        $        $        $        $ 2,536,527  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

      Commodity
Contracts
       Credit
Contracts
       Equity
Contracts
       Foreign
Currency
Exchange
Contracts
       Interest
Rate
Contracts
       Other
Contracts
       Total  

Net Change in Unrealized Appreciation (Depreciation) on:

 

                             

Options written

   $        $        $ 1,313,824        $        $        $        $ 1,313,824  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Options:

 

Average value of option contracts written

   $ 4,719,654  

For more information about the Trust’s Investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

Derivative Financial Instruments — Offsetting as of Period End

The Trust’s derivative assets and liabilities (by type) are as follows:

 

      Assets        Liabilities  

Options

   $        $ 2,991,651  

Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)

              (201,474
  

 

 

      

 

 

 

Total derivative assets and liabilities subject to an MNA

   $        $ 2,790,177  
  

 

 

      

 

 

 

The following table presents the Trust’s derivative assets (and liabilities) by counterparty net of amounts available for offset under an MNA and net of the related collateral received (and pledged) by the Trust:

 

Counterparty    Derivative
Liabilities
Subject to
an MNA by
Counterparty
       Derivatives
Available
for Offset
       Non-cash
Collateral
Pledged
 (a)
       Cash
Collateral
Pledged
 (a)
       Net Amount
of Derivative
Liabilities
  (b)
 

Barclays Bank PLC

   $ 25,928        $        $        $        $ 25,928  

BNP Paribas S.A.

     26,788                                     26,788  

Citibank N.A.

     52,366                                     52,366  

Credit Suisse International

     503,217                   (503,217                  

Deutsche Bank AG

     228,572                                     228,572  

Goldman Sachs International

     481,549                   (481,549                  

JPMorgan Chase Bank N.A.

     49,859                   (49,859                  

Morgan Stanley & Co. International PLC

     634,592                   (634,592                  

Royal Bank of Canada

     29,216                                     29,216  

UBS AG

     758,090                   (708,237        (49,853         
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
   $ 2,790,177        $        $ (2,377,454      $ (49,853      $ 362,870  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

Excess of collateral received from the individual counterparty is not shown for financial reporting purposes.

 
  (b) 

Net amount represents the net amount payable due to counterparty in the event of default. Net amount may be offset further by the options written receivable/payable on the Statements of Assets and Liabilities.

 

 

 

SCHEDULES OF INVESTMENTS      63  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Enhanced International Dividend Trust (BGY)

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

      Level 1        Level 2        Level 3        Total  

Assets:

 

Investments:

 

Common Stocks:

 

Australia

   $        $ 56,023,764        $        $ 56,023,764  

Canada

     65,363,685                            65,363,685  

China

              11,382,422                   11,382,422  

Denmark

              12,397,002                   12,397,002  

Finland

              31,445,516                   31,445,516  

France

              35,204,103                   35,204,103  

Germany

              24,074,680                   24,074,680  

India

              11,493,426                   11,493,426  

Japan

              10,010,543                   10,010,543  

Netherlands

              25,405,750                   25,405,750  

Singapore

              18,941,379                   18,941,379  

Sweden

              16,369,462                   16,369,462  

Switzerland

              58,526,209                   58,526,209  

Taiwan

              19,757,804                   19,757,804  

United Kingdom

              164,077,106                   164,077,106  

United States

     29,434,838                            29,434,838  

Preferred Stock

                       4,520,055          4,520,055  

Short-Term Securities

     25,489,943                            25,489,943  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ 120,288,466        $ 495,109,166        $ 4,520,055        $ 619,917,687  
  

 

 

      

 

 

      

 

 

      

 

 

 

Derivative Financial Instruments(a)

 

Liabilities:

 

Equity contracts

   $ (201,474      $ (2,790,177      $        $ (2,991,651
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

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

 

Transfers between Level 1 and Level 2 were as follows:

 

      Transfers out of
Level 1
 (a)
       Transfers Into
Level 2
 (a)
 

Assets:

 

Long-Term Investments:

 

Common Stocks

   $ 10,130,192        $ 10,130,192  
  

 

 

      

 

 

 

 

  (a) 

External pricing service used to reflect any significant market movements between the time the Trust valued such foreign securities and the earlier closing of foreign markets.

 

See notes to financial statements.

 

 

64    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments

December 31, 2018

  

BlackRock Health Sciences Trust (BME)

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Common Stocks — 92.9%  

Biotechnology — 16.7%

 

ACADIA Pharmaceuticals, Inc.(a)(b)

    37,400     $ 604,758  

Acceleron Pharma, Inc.(a)(b)

    41,600       1,811,680  

Acerta Pharma BV, Series B, (Acquired 2/01/16, Cost $986,402)(c)(d)

    17,146,440       1,870,677  

Agios Pharmaceuticals, Inc.(a)(b)

    15,900       733,149  

Alexion Pharmaceuticals, Inc.(a)(b)

    17,700       1,723,272  

Allakos, Inc.(a)

    6,012       314,247  

Allogene Therapeutics, Inc.(a)

    6,919       186,329  

Allogene Therapeutics, Inc., (Acquired 10/10/18, cost $505,000)(d)

    33,006       824,606  

Alnylam Pharmaceuticals, Inc.(a)

    8,200       597,862  

Amgen, Inc.(b)

    28,460       5,540,308  

Amicus Therapeutics, Inc.(a)(b)

    22,430       214,879  

AnaptysBio, Inc.(a)(b)

    2,100       133,959  

Apellis Pharmaceuticals, Inc.(a)

    23,047       303,991  

Arena Pharmaceuticals, Inc.(a)(b)

    27,244       1,061,154  

Biogen, Inc.(a)(b)

    17,748       5,340,728  

Biohaven Pharmaceutical Holding Co. Ltd.(a)(b)

    14,050       519,569  

BioMarin Pharmaceutical, Inc.(a)(b)

    32,700       2,784,405  

Blueprint Medicines Corp.(a)(b)

    3,500       188,685  

Cellectis SA, ADR(a)

    15,095       251,332  

Checkpoint Therapeutics, Inc.(a)(e)

    43,100       78,442  

Corbus Pharmaceuticals Holdings, Inc.(a)

    38,600       225,424  

Cytokinetics, Inc.(a)

    11,300       71,416  

Eidos Therapeutics, Inc.(a)(e)

    7,886       108,511  

Exact Sciences Corp.(a)(b)

    14,800       933,880  

Galapagos NV, ADR(a)(b)

    5,700       522,918  

Genmab A/S(a)

    5,300       871,428  

Gilead Sciences, Inc.(b)

    117,900       7,374,645  

Halozyme Therapeutics, Inc.(a)(b)

    25,200       368,676  

ImmunoGen, Inc.(a)

    35,500       170,400  

Incyte Corp.(a)(b)

    34,400       2,187,496  

InflaRx NV(a)

    43,683       1,588,751  

Innovent Biologics, Inc.(a)(f)

    25,500       78,482  

Insmed, Inc.(a)(b)

    49,686       651,880  

Intercept Pharmaceuticals, Inc.(a)(b)

    2,000       201,580  

Mirati Therapeutics, Inc.(a)

    4,100       173,922  

Ovid therapeutics, Inc.(a)

    37,826       91,539  

Principia Biopharma, Inc.(a)

    4,047       110,847  

Ra Pharmaceuticals, Inc.(a)

    37,457       681,717  

Regeneron Pharmaceuticals, Inc.(a)(b)

    6,758       2,524,113  

Rubius Therapeutics, Inc.(a)

    1,372       22,062  

Sarepta Therapeutics, Inc.(a)(b)

    33,550       3,661,312  

Seattle Genetics, Inc.(a)(b)

    50,967       2,887,790  

Spark Therapeutics, Inc.(a)(b)

    9,010       352,651  

Sutro Biopharma, Inc.(a)

    3,108       28,034  

Syndax Pharmaceuticals, Inc.(a)

    15,784       70,239  

TESARO, Inc.(a)

    20,831       1,546,702  

Ultragenyx Pharmaceutical, Inc.(a)(b)

    17,500       760,900  

Vertex Pharmaceuticals, Inc.(a)(b)

    34,205       5,668,111  
   

 

 

 
    59,019,458  
Diversified Consumer Services — 0.6%  

Service Corp. International(b)

    50,200       2,021,052  
   

 

 

 
Health Care Equipment & Supplies — 25.3%  

Abbott Laboratories(b)

    261,800       18,935,994  

Align Technology, Inc.(a)(b)

    5,900       1,235,637  

Baxter International, Inc.(b)

    56,600       3,725,412  

Becton Dickinson & Co.(b)

    23,633       5,324,988  

Boston Scientific Corp.(a)

    420,284       14,852,836  

ConvaTec Group PLC(f)

    933,500       1,653,508  

Edwards Lifesciences Corp.(a)(b)

    24,700       3,783,299  
Security   Shares     Value  
Health Care Equipment & Supplies (continued)  

Establishment Labs Holdings, Inc.(a)

    4,385     $ 120,237  

Intuitive Surgical, Inc.(a)(b)

    11,200       5,363,904  

Masimo Corp.(a)(b)

    39,000       4,187,430  

Medtronic PLC(b)

    139,200       12,661,632  

Nevro Corp.(a)(b)

    12,900       501,681  

ResMed, Inc.(b)

    33,700       3,837,419  

SI-BONE, Inc.(a)

    10,011       209,130  

Stryker Corp.(b)

    61,600       9,655,800  

Teleflex, Inc.(b)

    9,000       2,326,320  

Zimmer Biomet Holdings, Inc.(b)

    10,000       1,037,200  
   

 

 

 
    89,412,427  
Health Care Providers & Services — 21.4%  

Amedisys, Inc.(a)(b)

    24,960       2,923,066  

AmerisourceBergen Corp.(b)

    22,800       1,696,320  

Anthem, Inc.

    35,800       9,402,154  

Centene Corp.(a)(b)

    44,500       5,130,850  

Cigna Corp.(a)

    46,300       8,793,296  

DaVita, Inc.(a)(b)

    21,594       1,111,227  

Guardant Health, Inc.(a)

    4,749       178,515  

HCA Healthcare, Inc.(b)

    21,594       2,687,373  

HealthEquity, Inc.(a)(b)

    12,400       739,660  

Humana, Inc.(b)

    27,800       7,964,144  

LHC Group, Inc.(a)(b)

    7,390       693,773  

McKesson Corp.(b)

    7,300       806,431  

Quest Diagnostics, Inc.(b)

    35,100       2,922,777  

UnitedHealth Group, Inc.

    113,002       28,151,058  

WellCare Health Plans, Inc.(a)(b)

    9,700       2,290,073  
   

 

 

 
    75,490,717  
Health Care Technology — 0.5%  

Teladoc Health, Inc.(a)(b)

    33,600       1,665,552  
   

 

 

 
Life Sciences Tools & Services — 4.7%  

Agilent Technologies, Inc.(b)

    34,200       2,307,132  

Charles River Laboratories International, Inc.(a)(b)

    9,300       1,052,574  

Illumina, Inc.(a)(b)

    5,400       1,619,622  

IQVIA Holdings, Inc.(a)(b)

    10,300       1,196,551  

PerkinElmer, Inc.

    12,800       1,005,440  

QIAGEN NV(a)

    48,800       1,681,160  

Thermo Fisher Scientific, Inc.(b)

    27,600       6,176,604  

WuXi AppTec Co. Ltd.(a)(f)

    112,000       972,607  

Wuxi Biologics Cayman, Inc.(a)(f)

    106,500       680,382  
   

 

 

 
    16,692,072  
Pharmaceuticals — 23.7%  

Allergan PLC(b)

    35,285       4,716,193  

Arvinas Holding Co. LLC(a)

    4,630       59,496  

Assembly Biosciences, Inc.(a)(b)

    5,033       113,846  

AstraZeneca PLC

    68,376       5,103,990  

AstraZeneca PLC — ADR(b)

    38,600       1,466,028  

Bristol-Myers Squibb Co.(b)

    153,962       8,002,945  

Chugai Pharmaceutical Co. Ltd.

    16,100       933,787  

Daiichi Sankyo Co. Ltd.

    30,300       969,167  

Elanco Animal Health, Inc.(a)(b)

    10,891       343,393  

Eli Lilly & Co.(b)

    66,300       7,672,236  

Hua Medicine, (Acquired 09/07/18, Cost $342,936)(c)(d)

    405,105       420,806  

Hua Medicine(a)(f)

    314,500       333,357  

Medicines Co.(a)(b)

    22,900       438,306  

Merck & Co., Inc.(b)

    167,179       12,774,147  

Merck KGaA

    28,300       2,912,989  

Nektar Therapeutics(a)(b)

    7,400       243,238  

Novartis AG — ADR(b)

    22,300       1,913,563  

Novo Nordisk A/S — ADR(b)

    78,600       3,621,102  

Pfizer, Inc.(b)

    491,398       21,449,523  

Reata Pharmaceuticals, Inc., Class A(a)(b)

    9,419       528,406  
 

 

 

SCHEDULES OF INVESTMENTS      65  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Health Sciences Trust (BME)

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Pharmaceuticals (continued)  

Sanofi

    20,600     $ 1,787,047  

Sanofi — ADR(b)

    41,300       1,792,833  

Teva Pharmaceutical Industries Ltd. — ADR(b)

    59,000       909,780  

Theravance Biopharma, Inc.(a)

    4,700       120,273  

Tricida, Inc.(a)

    9,249       218,091  

Urovant Sciences Ltd.(a)

    6,639       43,751  

Zoetis, Inc.(b)

    54,500       4,661,930  
   

 

 

 
    83,550,223  
   

 

 

 

Total Common Stocks — 92.9%
(Cost — $227,224,478)

 

    327,851,501  
   

 

 

 
Security  

Par

(000)

        
Other Interests(g) — 0.0%  
Pharmaceuticals — 0.0%  

Afferent Pharmaceuticals, Inc., Series C,
(Acquired 9/30/15, Cost $0)(c)(d)

    190       117,899  
   

 

 

 

Total Other Interests — 0.0%
(Cost — $0)

 

    117,899  
   

 

 

 
     Shares         
Preferred Stock  
Biotechnology — 0.2%  

Rubius Therapeutics, Inc., (Acquired 2/23/18, Cost $505,410), 0.00%(c)(d)

    39,516       632,946  
   

 

 

 

Total Preferred Stocks — 0.2%
(Cost — $505,410)

 

    632,946  
   

 

 

 

Total Long-Term Investments — 93.1%
(Cost — $227,729,888)

 

    328,602,346  
 

 

 

 
Security   Shares     Value  
Short-Term Securities — 7.4%  

BlackRock Liquidity Funds, T-Fund, Institutional Class, 2.32%(h)(i)

    25,967,520     $ 25,967,520  

SL Liquidity Series, LLC, Money Market Series, 2.57%(h)(j)(i)

    4,665       4,665  
   

 

 

 

Total Short-Term Securities — 7.4%
(Cost — $25,972,185)

 

    25,972,185  
   

 

 

 

Options Purchased — 0.0%
(Cost — $299)

 

    250  
   

 

 

 

Total Investments Before Options Written — 100.5%
(Cost — $253,702,372)

 

    354,574,781  
   

 

 

 

Options Written — (0.4)%
(Premiums Received — $2,535,639)

 

    (1,418,657
   

 

 

 

Total Investments, Net of Options Written — 100.1%
(Cost — $251,166,733)

 

    353,156,124  

Liabilities in Excess of Other Assets — (0.1)%

 

    (481,146
   

 

 

 

Net Assets — 100.0%

 

  $ 352,674,978  
   

 

 

 

 

(a) 

Non-income producing security.

(b) 

All or a portion of the security has been pledged and/or segregated as collateral in connection with outstanding exchange-traded options written.

(c) 

Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy.

(d) 

Restricted security as to resale, excluding 144A securities. As of period end, the Trust held restricted securities with a current value of $3,866,934 and an original cost of $2,339,748, which was 1.1% of its net assets.

(e) 

Security, or a portion of the security, is on loan.

(f) 

Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

(g) 

Other interests represent beneficial interests in liquidation trusts and other reorganization or private entities.

(h) 

Annualized 7-day yield as of period end.

(i) 

All or a portion of security was purchased with the cash collateral from loaned securities.

 
(j) 

During the year ended December 31, 2018, investments in issuers considered to be affiliates of the Trust for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate    Shares
Held at
12/31/17
     Net
Activity
     Shares
Held at
12/31/18
     Value at
12/31/18
     Income      Net
Realized
Gain (Loss)
 (a)
     Change in
Unrealized

Appreciation
(Depreciation)
 

BlackRock Liquidity Funds, T-Fund, Institutional Class

     14,301,421        11,666,099        25,967,520      $ 25,967,520      $ 215,966      $      $  

SL Liquidity Series, LLC, Money Market Series

     120,903        (116,238      4,665        4,665        1,757 (b)        1        7  
             

 

 

    

 

 

    

 

 

    

 

 

 
   $ 25,972,185      $ 217,723      $ 1      $ 7  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes net capital gain distributions, if applicable.

 
  (b) 

Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

 

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

Derivative Financial Instruments Outstanding as of Period End

Exchange-Traded Options Purchased

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  

Call

                          

Teva Pharmaceutical Industries Ltd. — ADR

     50          01/04/19        USD     21.00        USD     77        $ 250  
                          

 

 

 

 

 

66    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Health Sciences Trust (BME)

 

Exchange-Traded Options Written

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
      

Notional

Amount (000)

       Value  

Call

                          

Abbott Laboratories

     223          01/04/19        USD     74.00        USD     1,613        $ (4,683

Allergan PLC

     71          01/04/19        USD     160.00        USD     949          (3,550

Amgen, Inc.

     72          01/04/19        USD     205.00        USD     1,402          (792

Baxter International, Inc.

     61          01/04/19        USD     68.50        USD     402          (1,342

Biogen, Inc.

     27          01/04/19        USD     337.50        USD     812          (5,805

Bristol-Myers Squibb Co.

     170          01/04/19        USD     54.00        USD     884          (1,530

Edwards Lifesciences Corp.

     59          01/04/19        USD     170.00        USD     904          (1,770

Humana, Inc.

     21          01/04/19        USD     342.50        USD     602          (315

Medtronic PLC

     159          01/04/19        USD     95.00        USD     1,446          (1,272

Pfizer, Inc.

     365          01/04/19        USD     43.50        USD     1,593          (19,163

Pfizer, Inc.

     91          01/04/19        USD     44.50        USD     397          (1,547

Pfizer, Inc.

     92          01/04/19        USD     46.50        USD     402          (368

Pfizer, Inc.

     124          01/04/19        USD     45.00        USD     541          (868

Teva Pharmaceutical Industries Ltd. — ADR

     152          01/04/19        USD     23.50        USD     234          (304

Vertex Pharmaceuticals, Inc.

     82          01/04/19        USD     185.00        USD     1,359          (1,640

Zoetis, Inc.

     74          01/04/19        USD     95.00        USD     633          (2,590

Abbott Laboratories

     95          01/11/19        USD     72.50        USD     687          (12,350

Abbott Laboratories

     95          01/11/19        USD     74.00        USD     687          (6,650

Alexion Pharmaceuticals, Inc.

     55          01/11/19        USD     120.00        USD     535          (2,200

Allergan PLC

     71          01/11/19        USD     160.00        USD     949          (994

Amgen, Inc.

     17          01/11/19        USD     205.00        USD     331          (1,555

AstraZeneca PLC

     28          01/11/19        USD     39.50        USD     106          (560

Becton Dickinson & Co.

     73          01/11/19        USD     252.50        USD     1,645          (4,745

Biogen, Inc.

     20          01/11/19        USD     327.50        USD     602          (2,750

Bristol-Myers Squibb Co.

     149          01/11/19        USD     55.00        USD     775          (2,756

Cigna Corp.

     40          01/11/19        USD     217.50        USD     760          (2,120

Eli Lilly & Co.

     130          01/11/19        USD     119.00        USD     1,504          (10,335

Gilead Sciences, Inc.

     16          01/11/19        USD     72.00        USD     100          (96

Medtronic PLC

     123          01/11/19        USD     97.00        USD     1,119          (1,414

Pfizer, Inc.

     91          01/11/19        USD     46.50        USD     397          (819

Pfizer, Inc.

     123          01/11/19        USD     45.00        USD     537          (2,952

QIAGEN NV

     195          01/11/19        USD     35.75        USD     6,718          (3,230

Regeneron Pharmaceuticals, Inc.

     16          01/11/19        USD     372.50        USD     598          (18,320

Service Corp. International

     53          01/11/19        USD     44.56        USD     213          (40

Abbott Laboratories

     221          01/18/19        USD     75.00        USD     1,598          (13,702

Acceleron Pharma, Inc.

     166          01/18/19        USD     50.00        USD     723          (12,450

Agilent Technologies, Inc.

     50          01/18/19        USD     75.00        USD     337          (400

Agios Pharmaceuticals, Inc.

     31          01/18/19        USD     75.00        USD     143          (1,240

Align Technology, Inc.

     16          01/18/19        USD     240.00        USD     335          (2,160

Amedisys, Inc.

     99          01/18/19        USD     125.00        USD     1,159          (23,117

Amgen, Inc.

     17          01/18/19        USD     200.00        USD     331          (5,074

Amicus Therapeutics, Inc.

     89          01/18/19        USD     10.00        USD     85          (3,560

Arena Pharmaceuticals, Inc.

     100          01/18/19        USD     46.00        USD     390          (2,850

Assembly Biosciences, Inc.

     10          01/18/19        USD     20.00        USD     23          (2,050

Baxter International, Inc.

     16          01/18/19        USD     65.40        USD     105          (2,772

BioMarin Pharmaceutical, Inc.

     65          01/18/19        USD     110.00        USD     553          (650

Biogen, Inc.

     8          01/18/19        USD     340.00        USD     241          (540

Biohaven Pharmaceutical Holding Co. Ltd.

     28          01/18/19        USD     35.00        USD     104          (10,080

Blueprint Medicines Corp.

     7          01/18/19        USD     60.00        USD     38          (1,242

Blueprint Medicines Corp.

     7          01/18/19        USD     50.00        USD     38          (4,095

Bristol-Myers Squibb Co.

     223          01/18/19        USD     55.00        USD     1,159          (7,359

Centene Corp.

     89          01/18/19        USD     135.00        USD     1,026          (445

Cigna Corp.

     41          01/18/19        USD     200.00        USD     779          (7,995

DaVita, Inc.

     43          01/18/19        USD     55.00        USD     221          (3,117

DaVita, Inc.

     43          01/18/19        USD     70.00        USD     221          (860

Edwards Lifesciences Corp.

     39          01/18/19        USD     160.00        USD     597          (8,580

Elanco Animal Health, Inc.

     43          01/18/19        USD     35.00        USD     136          (1,505

Eli Lilly & Co.

     135          01/18/19        USD     120.00        USD     1,562          (15,660

Exact Science Corp.

     40          01/18/19        USD     75.00        USD     252          (2,500

Galapagos NV — ADR

     22          01/18/19        USD     95.00        USD     202          (8,415

HCA Healthcare, Inc.

     31          01/18/19        USD     145.00        USD     386          (930

Halozyme Therapeutics, Inc.

     100          01/18/19        USD     15.00        USD     146          (5,250

 

 

SCHEDULES OF INVESTMENTS      67  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Health Sciences Trust (BME)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
      

Notional

Amount (000)

       Value  

Call (continued)

                          

HealthEquity, Inc.

     49          01/18/19        USD     65.00        USD     292        $ (4,900

Humana, Inc.

     68          01/18/19        USD     320.00        USD     1,948          (6,800

IQVIA Holdings, Inc.

     21          01/18/19        USD     130.00        USD     244          (1,155

Illumina, Inc.

     10          01/18/19        USD     330.00        USD     300          (3,750

Incyte Corp.

     137          01/18/19        USD     65.00        USD     871          (25,688

Insmed, Inc.

     99          01/18/19        USD     20.00        USD     130          (1,980

Intuitive Surgical, Inc.

     44          01/18/19        USD     535.00        USD     2,107          (6,930

Masimo Corp.

     78          01/18/19        USD     110.00        USD     837          (13,845

Medicines Co.

     38          01/18/19        USD     23.00        USD     73          (665

Medicines Co.

     37          01/18/19        USD     20.00        USD     71          (3,330

Merck & Co., Inc.

     148          01/18/19        USD     77.50        USD     1,131          (13,764

Nektar Therapeutics

     29          01/18/19        USD     43.00        USD     95          (1,160

Nevro Corp.

     25          01/18/19        USD     50.00        USD     97          (500

Novartis AG — ADR

     70          01/18/19        USD     90.00        USD     601          (1,925

Novo Nordisk A/S — ADR

     94          01/18/19        USD     45.00        USD     433          (16,450

Pfizer, Inc.

     279          01/18/19        USD     44.00        USD     1,218          (23,018

Pfizer, Inc.

     91          01/18/19        USD     45.00        USD     397          (3,776

Quest Diagnostics, Inc.

     77          01/18/19        USD     100.00        USD     641          (385

Quest Diagnostics, Inc.

     63          01/18/19        USD     90.00        USD     525          (1,260

Reata Pharmaceuticals, Inc.

     18          01/18/19        USD     70.00        USD     101          (675

ResMed, Inc.

     135          01/18/19        USD     110.00        USD     1,537          (71,550

Sanofi

     83          01/18/19        USD     45.00        USD     360          (2,490

Sanofi

     83          01/18/19        USD     44.00        USD     360          (5,602

Sarepta Therapeutics, Inc.

     78          01/18/19        USD     120.00        USD     851          (29,445

Seattle Genetics, Inc.

     102          01/18/19        USD     60.00        USD     578          (10,710

Spark Therapeutics, Inc.

     36          01/18/19        USD     40.00        USD     141          (6,210

Stryker Corp.

     244          01/18/19        USD     170.00        USD     3,825          (7,930

Teladoc, Inc.

     74          01/18/19        USD     70.00        USD     367          (925

Teleflex, Inc.

     17          01/18/19        USD     270.00        USD     439          (3,825

Thermo Fisher Scientific, Inc.

     55          01/18/19        USD     230.00        USD     1,231          (15,538

Ultragenyx Pharmaceutical, Inc.

     70          01/18/19        USD     45.00        USD     304          (14,000

Vertex Pharmaceuticals, Inc.

     69          01/18/19        USD     170.00        USD     1,143          (32,775

WellCare Health Plans, Inc.

     14          01/18/19        USD     260.00        USD     331          (1,820

Zimmer Biomet Holdings, Inc.

     24          01/18/19        USD     120.00        USD     249          (240

Zimmer Biomet Holdings, Inc.

     16          01/18/19        USD     105.00        USD     166          (3,240

Zoetis, Inc.

     74          01/18/19        USD     97.50        USD     633          (1,110

ACADIA Pharmaceuticals, Inc.

     149          01/25/19        USD     16.00        USD     241          (30,173

Abbott Laboratories

     95          01/25/19        USD     73.00        USD     687          (16,435

AmerisourceBergen Corp.

     58          01/25/19        USD     84.00        USD     432          (1,885

Amgen, Inc.

     7          01/25/19        USD     190.00        USD     136          (6,370

AstraZeneca PLC

     126          01/25/19        USD     39.50        USD     479          (5,355

Baxter International, Inc.

     44          01/25/19        USD     66.00        USD     290          (8,228

Biogen, Inc.

     19          01/25/19        USD     330.00        USD     572          (3,420

Biogen, Inc.

     8          01/25/19        USD     307.50        USD     241          (6,280

Bristol-Myers Squibb Co.

     73          01/25/19        USD     52.00        USD     379          (10,731

Cigna Corp.

     39          01/25/19        USD     212.50        USD     741          (3,783

Gilead Sciences, Inc.

     51          01/25/19        USD     73.00        USD     319          (612

Gilead Sciences, Inc.

     64          01/25/19        USD     69.00        USD     400          (2,304

HCA Holdings, Inc.

     55          01/25/19        USD     131.00        USD     684          (8,112

Humana, Inc.

     22          01/25/19        USD     312.50        USD     630          (2,970

Illumina, Inc.

     11          01/25/19        USD     330.00        USD     330          (5,390

Medtronic PLC

     160          01/25/19        USD     95.50        USD     1,455          (11,280

Merck & Co., Inc.

     137          01/25/19        USD     79.50        USD     1,047          (7,192

Pfizer, Inc.

     168          01/25/19        USD     45.00        USD     733          (9,408

Pfizer, Inc.

     168          01/25/19        USD     44.50        USD     733          (12,516

Pfizer, Inc.

     183          01/25/19        USD     44.00        USD     799          (17,843

Regeneron Pharmaceuticals, Inc.

     11          01/25/19        USD     365.00        USD     411          (21,890

Sarepta Therapeutics, Inc.

     56          01/25/19        USD     117.00        USD     611          (29,400

Zoetis, Inc.

     70          01/25/19        USD     87.50        USD     599          (11,550

Novo Nordisk A/S — ADR

     103          01/28/19        USD     45.90        USD     475          (15,137

Pfizer, Inc.

     83          01/28/19        USD     45.10        USD     362          (5,107

Novartis AG — ADR

     6          01/29/19        USD     84.73        USD     51          (1,552

 

 

68    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Health Sciences Trust (BME)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
      

Notional

Amount (000)

       Value  

Call (continued)

                          

Merck & Co., Inc.

     165          01/30/19        USD     79.90        USD     1,261        $ (10,731

Teleflex, Inc.

     17          01/31/19        USD     255.00        USD     439          (19,730

Abbott Laboratories

     95          02/01/19        USD     70.00        USD     687          (35,388

Alexion Pharmaceuticals, Inc.

     15          02/01/19        USD     98.00        USD     146          (7,650

Becton Dickinson & Co.

     25          02/01/19        USD     235.00        USD     563          (7,812

Cigna Corp.

     41          02/01/19        USD     200.00        USD     779          (16,708

Gilead Sciences, Inc.

     277          02/01/19        USD     70.00        USD     1,733          (11,496

Gilead Sciences, Inc.

     63          02/01/19        USD     70.50        USD     394          (2,079

Intercept Pharmaceuticals, Inc.

     8          02/01/19        USD     98.50        USD     81          (9,040

McKesson Corp.

     29          02/01/19        USD     125.00        USD     320          (2,102

Medtronic PLC

     114          02/01/19        USD     93.00        USD     1,037          (19,551

Pfizer, Inc.

     61          02/01/19        USD     44.00        USD     266          (6,740

WellCare Health Plans, Inc.

     12          02/04/19        USD     244.53        USD     283          (8,867

Novartis AG — ADR

     7          02/07/19        USD     84.73        USD     60          (2,021

WellCare Health Plans, Inc.

     12          02/07/19        USD     244.53        USD     283          (9,436

Biohaven Pharmaceutical Holding Co. Ltd.

     28          02/08/19        USD     33.36        USD     104          (16,153

Exact Science Corp.

     19          02/08/19        USD     65.00        USD     120          (8,740

Merck & Co., Inc.

     165          02/08/19        USD     79.90        USD     1,261          (13,696

Pfizer, Inc.

     46          02/08/19        USD     42.66        USD     201          (8,050

Novartis AG — ADR

     6          02/13/19        USD     84.73        USD     51          (1,842

Abbott Laboratories

     223          02/15/19        USD     75.00        USD     1,613          (34,788

Agilent Technologies, Inc.

     50          02/15/19        USD     75.00        USD     337          (2,825

Agilent Technologies, Inc.

     16          02/15/19        USD     70.00        USD     108          (3,048

Agios Pharmaceuticals, Inc.

     32          02/15/19        USD     60.00        USD     148          (2,080

Align Technology, Inc.

     7          02/15/19        USD     220.00        USD     147          (8,820

AmerisourceBergen Corp.

     33          02/15/19        USD     77.50        USD     246          (8,745

AnaptysBio, Inc.

     8          02/15/19        USD     60.00        USD     51          (6,760

Assembly Biosciences, Inc.

     10          02/15/19        USD     20.00        USD     23          (3,850

Baxter International, Inc.

     105          02/15/19        USD     70.00        USD     691          (10,448

BioMarin Pharmaceutical, Inc.

     65          02/15/19        USD     95.00        USD     553          (18,363

Charles River Laboratories International, Inc.

     37          02/15/19        USD     120.00        USD     419          (11,655

IQVIA Holdings, Inc.

     20          02/15/19        USD     120.00        USD     232          (6,750

LHC Group, Inc.

     30          02/15/19        USD     100.00        USD     282          (8,100

Merck & Co., Inc.

     54          02/15/19        USD     80.00        USD     413          (5,238

Nevro Corp.

     26          02/15/19        USD     40.00        USD     101          (7,670

Reata Pharmaceuticals, Inc.

     19          02/15/19        USD     55.00        USD     107          (11,875

Service Corp. International

     54          02/15/19        USD     40.00        USD     217          (9,585

Teladoc, Inc.

     60          02/15/19        USD     50.00        USD     297          (27,000

Teva Pharmaceutical Industries Ltd. — ADR

     134          02/15/19        USD     16.00        USD     207          (12,529

Thermo Fisher Scientific, Inc.

     55          02/15/19        USD     230.00        USD     1,231          (36,300

Novo Nordisk A/S — ADR

     117          03/15/19        USD     46.00        USD     539          (26,033

Service Corp. International

     93          03/15/19        USD     45.00        USD     374          (4,882
                          

 

 

 
                           $ (1,349,488
                          

 

 

 

OTC Options Written

 

Description    Counterparty    Number of
Contracts
     Expiration
Date
     Exercise
Price
     Notional
Amount (000)
     Value  
Call                                                    

ConvaTec Group PLC

   UBS AG      185,000        01/03/19        GBP       1.71        GBP       257      $ (19

AstraZeneca PLC

   Goldman Sachs International      28,100        01/04/19        GBP       60.02        GBP       1,650        (8,789

Chugai Pharmaceutical Co. Ltd.

   Goldman Sachs International      6,400        01/04/19        JPY       7,173.02        JPY       40,832        (38

Seattle Genetics, Inc.

   Goldman Sachs International      10,100        01/08/19        USD       66.92        USD       572        (327

Merck & Co., Inc.

   Morgan Stanley & Co. International PLC      5,700        01/24/19        EUR       100.55        EUR       512        (1,043

Insmed, Inc.

   Barclays Bank PLC      9,900        01/25/19        USD       14.09        USD       130        (7,849

Masimo Corp.

   Citibank N.A.      7,800        01/30/19        USD       108.42        USD       837        (26,697

Sanofi

   Credit Suisse International      8,200        02/06/19        EUR       77.09        EUR       620        (13,546

Centene Corp.

   Credit Suisse International      8,900        02/12/19        USD       136.89        USD       1,026        (6,353

Merck & Co., Inc.

   Credit Suisse International      5,600        02/26/19        EUR       99.94        EUR       503        (4,508
                     

 

 

 
                      $ (69,169
                     

 

 

 

 

 

SCHEDULES OF INVESTMENTS      69  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Health Sciences Trust (BME)

 

Balances Reported in the Statements of Assets and Liabilities for Options Written

 

      Swap
Premium
Paid
     Swap
Premium
Received
     Unrealized
Appreciation
     Unrealized
Depreciation
     Value  

Options Written

     N/A        N/A      $ 1,390,153      $ (273,171    $ (1,418,657

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Assets — Derivative Financial Instruments

                    

Options purchased

                    

Investments at value — unaffiliated(a)

   $      $      $ 250      $      $      $      $ 250  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes options purchased at value as reported in the Schedule of Investments.

 

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Liabilities — Derivative Financial Instruments

                    

Options written

                    

Options written, at value

   $      $      $ 1,418,657      $      $      $      $ 1,418,657  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

For the period ended December 31, 2018, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Net Realized Gain (Loss) from:

                    

Options purchased(a)

   $      $      $ (4,882    $        $      $      $ (4,882

Options written

                   (4,052,692                       (4,052,692
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $      $      $ (4,057,574    $                $      $      $ (4,057,574
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Options purchased are included in net realized gain (loss) from investments.

 

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Net Change in Unrealized Appreciation (Depreciation) on:

                    

Options purchased(a)

   $      $      $ (49    $      $      $        $ (49

Options written

                   912,695                             912,695  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $      $      $ 912,646      $      $      $      $ 912,646  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Options purchased are included in net change in unrealized appreciation (depreciation) on investments.

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Options:

        

Average value of option contracts purchased

   $ 63  

Average value of option contracts written

   $ 2,789,183  

For more information about the Trust’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

 

 

70    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Health Sciences Trust (BME)

 

Derivative Financial Instruments — Offsetting as of Period End

The Trust’s derivative assets and liabilities (by type) are as follows:

 

      Assets      Liabilities  

Derivative Financial Instruments:

     

Options

   $ 250 (a)      $ 1,418,657  

Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)

     (250      (1,349,488
  

 

 

    

 

 

 

Total derivative assets and liabilities subject to an MNA

   $      $ 69,169  
  

 

 

    

 

 

 

 

  (a) 

Includes options purchased at value which is included in Investments at value — unaffiliated in the Statements of Assets and Liabilities and reported in the Schedule of Investments.

 

The following table presents the Trust’s derivative assets (and liabilities) by counterparty net of amounts available for offset under an MNA and net of the related collateral received (and pledged) by the Trust:

 

Counterparty    Derivative
Liabilities
Subject to
an MNA by
Counterparty
       Derivatives
Available
for Offset
       Non-cash
Collateral
Pledged
       Cash
Collateral
Pledged
       Net Amount
of Derivative
Liabilities
  (a)
 

Barclays Bank PLC

   $ 7,849        $        $        $        $ 7,849  

Citibank N.A.

     26,697                                     26,697  

Credit Suisse International

     24,407                                     24,407  

Goldman Sachs International

     9,154                                     9,154  

Morgan Stanley & Co. International PLC

     1,043                                     1,043  

UBS AG

     19                                     19  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
   $ 69,169        $        $        $        $ 69,169  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

Net amount represents the net amount payable due to counterparty in the event of default. Net amount may be offset further by the options written receivable/payable on the Statements of Assets and Liabilities.

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

      Level 1        Level 2        Level 3        Total  

Assets:

                 

Investments:

                 

Common Stocks:

                 

Biotechnology

   $ 55,452,746        $ 1,696,035        $ 1,870,677        $ 59,019,458  

Diversified Consumer Services

     2,021,052                            2,021,052  

Health Care Equipment & Supplies

     87,758,919          1,653,508                   89,412,427  

Health Care Providers & Services

     75,490,717                            75,490,717  

Health Care Technology

     1,665,552                            1,665,552  

Life Sciences Tools & Services

     16,011,690          680,382                   16,692,072  

Pharmaceuticals

     71,422,437          11,706,980          420,806          83,550,223  

Other Interests

                       117,899          117,899  

Preferred Stock

                       632,946          632,946  

Short-Term Securities

     25,967,520                            25,967,520  

Options Purchased:

                 

Equity Contracts

     250                            250  
  

 

 

      

 

 

      

 

 

      

 

 

 

Subtotal

   $ 335,790,883        $ 15,736,905        $ 3,042,328        $ 354,570,116  
  

 

 

      

 

 

      

 

 

      

 

 

 

Investments Valued at NAV(a)

                    4,665  

Total Investments

                  $ 354,574,781  
                 

 

 

 

Derivative Financial Instruments(b)

                 

Liabilities:

                 

Equity contracts

   $ (1,200,518      $ (218,139      $        $ (1,418,657
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

As of December 31, 2018, certain of the Trust’s Investments were fair valued using net asset value (“NAV”) per share and have been excluded from the fair value hierarchy.

 
  (b) 

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

 

During the year ended December 31, 2018, there were no transfers between Level 1 and Level 2.

 

 

SCHEDULES OF INVESTMENTS      71  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Health Sciences Trust (BME)

 

A reconciliation of Level 3 investments is presented when the Trust had a significant amount of Level 3 investments at the beginning and/or end of the year in relation to net assets. The following table is a reconciliation of Level 3 investments for which significant unobservable inputs were used in determining fair value:

 

      Common
Stocks
     Other
Interests
     Preferred
Stocks
     Rights      Total  

Assets:

              

Opening Balance, as of December 31, 2017

   $ 1,916,972      $ 387,926      $      $ 141,355      $ 2,446,253  

Transfers into Level 3

                                  

Transfers out of Level 3

                                  

Accrued discounts/premiums

                                  

Net realized gain (loss)

                          221,060        221,060  

Net change in unrealized appreciation (depreciation)(a)(b)

     31,575        (270,027      127,536        (115,507      (226,423

Purchases

     342,936           505,410           848,346  

Sales

                          (246,908      (246,908
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Closing Balance as of December 31, 2018

   $ 2,291,483      $ 117,899      $ 632,946      $      $ 3,042,328  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net change in unrealized appreciation (depreciation) on investments held as of December 31, 2018(b)

   $ 31,575      $ (270,027    $ 127,537      $      $ (110,915
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Included in the related net change in unrealized appreciation (depreciation) in the Statements of Operations.

 
  (b) 

Any difference between net change in unrealized appreciation (depreciation) and net change in unrealized appreciation (depreciation) on derivative financial instruments still held at December 31, 2018 is generally due to derivative financial instruments no longer held or categorized as Level 3 at period end.

 

See notes to financial statements

 

 

72    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Consolidated Schedule of Investments

December 31, 2018

  

BlackRock Resources & Commodities Strategy Trust (BCX)

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Common Stocks — 96.9%  
Chemicals — 13.8%  

CF Industries Holdings, Inc.(a)

    323,902     $ 14,092,976  

FMC Corp.(a)(b)

    283,227       20,947,469  

Mosaic Co.(a)

    400,464       11,697,554  

Nutrien Ltd.(a)

    526,559       24,731,148  

Nutrien Ltd.

    546,558       25,688,226  

Umicore SA

    129,878       5,182,782  

Yara International ASA

    196,629       7,579,919  
   

 

 

 
    109,920,074  
Containers & Packaging — 2.8%  

Packaging Corp. of America(a)(b)

    173,643       14,492,245  

Smurfit Kappa Group PLC

    300,764       8,002,609  
   

 

 

 
    22,494,854  
Electronic Equipment, Instruments & Components — 1.0%  

Trimble, Inc.(a)(c)

    231,023       7,602,967  
   

 

 

 
Energy Equipment & Services — 1.2%  

Baker Hughes a GE Co.(a)

    188,974       4,062,941  

Halliburton Co.(a)

    217,120       5,771,050  
   

 

 

 
    9,833,991  
Food Products — 6.4%  

Archer-Daniels-Midland Co.(a)(b)

    503,574       20,631,427  

Bunge Ltd.(a)

    94,919       5,072,471  

Glanbia PLC

    452,911       8,505,284  

Hormel Foods Corp.(a)

    129,699       5,535,553  

Ingredion, Inc.

    127,682       11,670,135  
   

 

 

 
    51,414,870  
Machinery — 0.6%  

Deere & Co.(a)

    31,964       4,768,070  
   

 

 

 
Metals & Mining — 36.1%  

ArcelorMittal

    811,565       16,799,678  

BHP Group PLC

    1,415,742       29,916,060  

First Quantum Minerals Ltd.

    2,782,655       22,502,572  

Fresnillo PLC

    1,461,910       16,063,655  

Glencore PLC(c)

    8,001,911       29,751,624  

Lundin Mining Corp.

    1,451,898       5,998,172  

Neo Lithium Corp.(c)(d)

    5,498,399       2,497,075  

Newcrest Mining Ltd.

    1,035,287       15,911,388  

Newmont Mining Corp.(a)

    353,947       12,264,264  

OZ Minerals Ltd.

    1,648,017       10,217,473  

Polyus PJSC — GDR(c)

    146,028       5,709,929  

Randgold Resources Ltd.

    190,397       15,981,448  

Randgold Resources Ltd. — ADR(a)(e)

    181,327       15,030,195  

Rio Tinto PLC — ADR(a)

    430,056       20,849,115  

Stelco Holdings, Inc.

    1,185,242       13,074,820  

Teck Resources Ltd., Class B(a)

    1,107,310       23,851,457  

Vale SA — ADR(a)

    1,898,877       25,046,188  

Wheaton Precious Metals Corp.

    322,541       6,299,226  
   

 

 

 
    287,764,339  
Oil, Gas & Consumable Fuels — 33.0%  

Anadarko Petroleum Corp.(a)

    137,250       6,017,040  

BP PLC — ADR(a)

    1,169,356       44,341,980  

Cairn Energy PLC(c)

    2,127,123       4,058,845  

Canadian Natural Resources Ltd.

    275,314       6,642,868  

CNOOC Ltd.

    6,262,000       9,645,501  

Concho Resources, Inc.(a)(c)

    36,100       3,710,719  

ConocoPhillips(a)

    189,587       11,820,749  

Devon Energy Corp.(a)

    226,915       5,114,664  

Exxon Mobil Corp.(a)(b)

    358,043       24,414,952  

Kosmos Energy Ltd.(c)

    1,027,980       4,183,879  

Marathon Petroleum Corp.(a)

    69,654       4,110,283  
Security   Shares     Value  
Oil, Gas & Consumable Fuels (continued)  

Pioneer Natural Resources Co.(a)

    50,020     $ 6,578,630  

Royal Dutch Shell PLC — ADR, Class A(a)

    806,930       47,019,811  

Suncor Energy, Inc.

    895,759       25,018,525  

TOTAL SA

    871,084       45,945,420  

Valero Energy Corp.(a)

    119,064       8,926,228  

Williams Cos., Inc.(a)

    255,575       5,635,429  
   

 

 

 
    263,185,523  
Paper & Forest Products — 1.4%  

Mondi PLC

    528,465       11,006,725  

Precious Woods Holding AG(c)

    20,000       162,783  

Quintis Ltd.(c)(d)(e)

    7,903,565       56  
   

 

 

 
    11,169,564  
Pharmaceuticals — 0.6%  

Curaleaf Holdings, Inc.(c)

    1,076,779       5,095,218  
   

 

 

 

Total Common Stocks — 96.9%
(Cost — $783,821,542)

 

    773,249,470  
 

 

 

 
     Par
(000)
        
Corporate Bonds — 2.0%  
Metals & Mining — 2.0%  

Beadell Resources Ltd., 6.00%, 06/30/23(e)(f)

  USD     1,800       1,578,600  

Osisko Gold Royalties, Ltd., 4.00%, 12/31/22

  CAD     5,652       4,108,961  

Pilgangoora Operations Pty Ltd, 12.00%, 06/21/22

  USD     9,000       9,997,317  
   

 

 

 

Total Corporate Bonds — 2.0%
(Cost — $15,311,494)

 

    15,684,878  
 

 

 

 

Total Long-Term Investments — 98.9%
(Cost — $799,133,036)

 

    788,934,348  
 

 

 

 
     Shares         
Short-Term Securities — 1.7%  

BlackRock Liquidity Funds, T-Fund,
Institutional Class, 2.32%(g)(h)

    13,652,388       13,652,388  

SL Liquidity Series, LLC, Money Market
Series, 2.57%(g)(h)

    276,499       276,471  
 

 

 

 

Total Short-Term Securities — 1.7%
(Cost — $13,928,888)

      13,928,859  
   

 

 

 

Options Purchased — 0.0%
(Cost — $984)

 

    3,995  
 

 

 

 

Total Investments Before Options Written — 100.6%
(Cost — $813,062,908)

 

    802,867,202  
 

 

 

 

Options Written — (0.5)%
(Premiums Received — $8,168,042)

 

    (3,911,872
 

 

 

 

Total Investments, Net of Options Written — 100.1%
(Cost — $804,894,866)

 

    798,955,330  

Liabilities in Excess of Other Assets — (0.1)%

 

    (673,671
 

 

 

 

Net Assets — 100.0%

 

  $ 798,281,659  
 

 

 

 

 

(a) 

All or a portion of the security has been pledged and/or segregated as collateral in connection with outstanding exchange-traded options written.

(b) 

All or a portion of the security has been pledged as collateral in connection with outstanding OTC derivatives.

(c) 

Non-income producing security.

(d) 

Security, or a portion of the security, is on loan.

(e) 

Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy.

(f) 

Variable rate security. Rate shown is the rate in effect as of period end.

(g) 

Annualized 7-day yield as of period end.

 

 

 

CONSOLIDATED SCHEDULES OF INVESTMENTS      73  


Consolidated Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Resources & Commodities Strategy Trust (BCX)

 

(h) 

During the year ended December 31, 2018, investments in issuers considered to be affiliates of the Trust for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate    Shares
Held at
12/31/17
     Net
Activity
     Shares
Held at
12/31/18
     Value at
12/31/18
     Income      Net
Realized
Gain (Loss)
 (a)
     Changes in
Unrealized
Appreciation
(Depreciation)
 

BlackRock Liquidity Funds, T-Fund, Institutional Class

     16,156,750        (2,504,362      13,652,388      $ 13,652,388      $ 186,529      $ __      $ __  

SL Liquidity Series, LLC, Money Market Series

     488,032        (211,533      276,499        276,471        16,485 (b)        __        11  
           

 

 

    

 

 

    

 

 

    

 

 

 
            $ 13,928,859      $ 203,014      $ __      $ 11  
           

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes net capital gain distributions, if applicable.

 
  (b) 

Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

 

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

Derivative Financial Instruments Outstanding as of Period End

Exchange-Traded Options Purchased

 

Description    Number of
Contracts
       Expiration
Date
     Exercise
Price
       Notional
Amount (000)
       Value  

Call

                        

Exxon Mobil Corp.

     94          01/04/19      USD     77        USD     641        $ 3,525  

Exxon Mobil Corp.

     94          1/11/19      USD     78        USD     641          470  
                        

 

 

 
                         $ 3,995  
                        

 

 

 

Exchange-Traded Options Written

 

Description    Number of
Contracts
       Expiration
Date
      

Exercise

Price

      

Notional

Amount (000)

       Value  

Call

                          

Anadarko Petroleum Corp.

     195          01/04/19        USD     55.00        USD     855        $ (1,170

Archer-Daniels-Midland Co.

     675          01/04/19        USD     47.00        USD     2,765          (5,400

CF Industries Holdings, Inc.

     432          01/04/19        USD     47.50        USD     1,880          (10,800

ConocoPhillips

     140          01/04/19        USD     68.00        USD     873          (420

Devon Energy Corp.

     299          01/04/19        USD     28.50        USD     674          (1,196

Exxon Mobil Corp.

     94          01/04/19        USD     80.00        USD     641          (188

Hormel Foods Corp.

     94          01/04/19        USD     45.00        USD     401          (4,700

Newmont Mining Corp.

     356          01/04/19        USD     32.00        USD     1,234          (94,162

Pioneer Natural Resources Co.

     40          01/04/19        USD     152.50        USD     526          (2,000

Royal Dutch Shell PLC — ADR, Class A

     974          01/04/19        USD     61.50        USD     5,675          (38,960

Teck Resources Ltd.

     608          01/04/19        USD     22.00        USD     1,310          (13,680

Teck Resources Ltd.

     246          01/04/19        USD     23.50        USD     530          (3,198

Valero Energy Corp.

     95          01/04/19        USD     84.00        USD     712          (380

Vale SA — ADR

     1,348          01/04/19        USD     14.50        USD     1,778          (2,696

Archer-Daniels-Midland Co.

     675          01/11/19        USD     47.00        USD     2,765          (4,050

BP PLC — ADR

     638          01/11/19        USD     42.00        USD     2,419          (1,914

CF Industries Holdings, Inc.

     432          01/11/19        USD     47.50        USD     1,880          (8,640

ConocoPhillips

     73          01/11/19        USD     71.00        USD     455          (292

Deere & Co.

     127          01/11/19        USD     160.00        USD     1,894          (6,414

Exxon Mobil Corp.

     94          01/11/19        USD     80.00        USD     641          (282

Halliburton Co.

     115          01/11/19        USD     32.00        USD     306          (345

Halliburton Co.

     227          01/11/19        USD     33.53        USD     603           

Marathon Petroleum Corp.

     41          01/11/19        USD     65.00        USD     242          (492

Marathon Petroleum Corp.

     53          01/11/19        USD     65.50        USD     313          (450

Mosaic Co.

     394          01/11/19        USD     37.50        USD     1,151          (13,396

Newmont Mining Corp.

     221          01/11/19        USD     33.50        USD     766          (32,819

Pioneer Natural Resources Co.

     96          01/11/19        USD     143.00        USD     1,263          (6,480

Royal Dutch Shell PLC — ADR, Class A

     432          01/11/19        USD     60.00        USD     2,517          (14,040

Teck Resources Ltd.

     943          01/11/19        USD     23.50        USD     2,031          (11,316

Vale SA — ADR

     1,348          01/11/19        USD     14.50        USD     1,778          (8,088

 

 

74    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Consolidated Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Resources & Commodities Strategy Trust (BCX)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
      

Exercise

Price

      

Notional

Amount (000)

       Value  

Call (continued)

                          

Valero Energy Corp.

     96          01/11/19        USD     84.01        USD     720        $ (1,110

Anadarko Petroleum Corp.

     178          01/18/19        USD     55.00        USD     780          (801

Archer-Daniels-Midland Co.

     675          01/18/19        USD     47.00        USD     2,765          (3,037

Baker Hughes a GE Co., Class A

     295          01/18/19        USD     26.00        USD     634          (7,375

BP PLC — ADR

     700          01/18/19        USD     42.00        USD     2,654          (2,100

BP PLC — ADR

     687          01/18/19        USD     41.00        USD     2,605          (4,809

Bunge Ltd.

     191          01/18/19        USD     65.00        USD     1,021          (3,820

CF Industries Holdings, Inc.

     431          01/18/19        USD     47.50        USD     1,875          (16,809

Concho Resources, Inc.

     64          01/18/19        USD     135.00        USD     658          (960

Devon Energy Corp.

     201          01/18/19        USD     30.00        USD     453          (201

First Quantum Minerals Ltd.

     930          01/18/19       

CAD

    13.00       

CAD

    1,027          (11,581

First Quantum Minerals Ltd.

     851          01/18/19        CAD     15.00        CAD     940          (2,182

First Quantum Minerals Ltd.

     427          01/18/19        CAD     14.00        CAD     471          (2,502

FMC Corp.

     137          01/18/19        USD     80.00        USD     1,013          (4,110

FMC Corp.

     350          01/18/19        USD     85.00        USD     2,589          (3,500

Halliburton Co.

     115          01/18/19        USD     33.00        USD     306          (287

Halliburton Co.

     227          01/18/19        USD     35.45        USD     603          (1

Hormel Foods Corp.

     240          01/18/19        USD     45.00        USD     1,024          (4,800

Lundin Mining Corp.

     3,430          01/18/19        CAD     6.00        CAD     1,935          (31,406

Mosaic Co.

     396          01/18/19        USD     37.00        USD     1,157          (1,188

Mosaic Co.

     501          01/18/19        USD     39.00        USD     1,463          (14,028

Newmont Mining Corp.

     355          01/18/19        USD     34.00        USD     1,230          (47,570

Packaging Corp. of America

     694          01/18/19        USD     95.00        USD     5,792          (20,820

Pioneer Natural Resources Co.

     63          01/18/19        USD     160.00        USD     829          (2,520

Randgold Resources Ltd. — ADR

     273          01/18/19        USD     82.50        USD     2,265          (65,520

Rio Tinto PLC — ADR

     334          01/18/19        USD     52.50        USD     1,619          (6,680

Royal Dutch Shell PLC — ADR, Class A

     525          01/18/19        USD     62.50        USD     3,059          (6,563

Stelco Holdings, Inc.

     354          01/18/19        CAD     22.00        CAD     438          (2,593

Stelco Holdings, Inc.

     291          01/18/19        CAD     23.00        CAD     533          (2,132

Suncor Energy, Inc.

     389          01/18/19        CAD     48.00        CAD     1,483          (1,425

Suncor Energy, Inc.

     114          01/18/19        CAD     46.00        CAD     435          (459

Teck Resources Ltd.

     295          01/18/19        USD     24.00        USD     635          (5,162

Teck Resources Ltd.

     915          01/18/19        USD     22.00        USD     1,971          (64,508

Teck Resources Ltd.

     208          01/18/19        USD     23.00        USD     448          (7,800

Vale SA — ADR

     364          01/18/19        USD     14.00        USD     480          (6,552

Valero Energy Corp.

     60          01/18/19        USD     90.00        USD     450          (270

Valero Energy Corp.

     167          01/18/19        USD     87.50        USD     1,252          (1,085

Williams Cos., Inc.

     1,025          01/18/19        USD     25.00        USD     2,260          (5,125

Baker Hughes a GE Co., Class A

     83          01/25/19        USD     23.12        USD     178          (1,931

BP PLC — ADR

     688          01/25/19        USD     41.00        USD     2,609          (8,600

ConocoPhillips

     72          01/25/19        USD     68.00        USD     449          (2,772

Devon Energy Corp.

     198          01/25/19        USD     27.50        USD     446          (1,485

Exxon Mobil Corp.

     157          01/25/19        USD     79.00        USD     1,071          (863

Halliburton Co.

     184          01/25/19        USD     30.50        USD     489          (3,496

Hormel Foods Corp.

     184          01/25/19        USD     43.50        USD     785          (13,800

Marathon Petroleum Corp.

     106          01/25/19        USD     65.50        USD     626          (4,081

Mosaic Co.

     310          01/25/19        USD     30.50        USD     906          (20,770

Royal Dutch Shell PLC — ADR, Class A

     432          01/25/19        USD     60.50        USD     2,517          (24,840

Teck Resources Ltd.

     245          01/25/19        USD     24.50        USD     528          (5,145

Vale SA — ADR

     545          01/25/19        USD     14.00        USD     719          (13,080

Valero Energy Corp.

     58          01/25/19        USD     78.00        USD     435          (9,976

Anadarko Petroleum Corp.

     176          02/01/19        USD     51.00        USD     772          (6,776

Baker Hughes a GE Co. , Class A

     83          02/01/19        USD     23.12        USD     178          (2,227

BP PLC — ADR Each Representing Six PLC

     688          02/01/19        USD     41.01        USD     2,609          (17,477

ConocoPhillips

     232          02/01/19        USD     65.00        USD     1,447          (33,060

Devon Energy Corp.

     209          02/01/19        USD     27.50        USD     471          (2,717

Exxon Mobil Corp.

     283          02/01/19        USD     71.00        USD     1,930          (36,507

Exxon Mobil Corp.

     236          02/01/19        USD     70.00        USD     1,609          (39,412

Marathon Petroleum Corp.

     78          02/01/19        USD     60.50        USD     460          (16,419

Newmont Mining Corp.

     242          02/01/19        USD     34.50        USD     839          (33,154

Pioneer Natural Resources Co.

     43          02/01/19        USD     138.00        USD     566          (17,200

Royal Dutch Shell PLC — ADR, Class A

     432          02/01/19        USD     58.50        USD     2,517          (72,360

 

 

CONSOLIDATED SCHEDULES OF INVESTMENTS      75  


Consolidated Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Resources & Commodities Strategy Trust (BCX)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
      

Exercise

Price

      

Notional

Amount (000)

       Value  

Call (continued)

                          

Teck Resources Ltd.

     294          02/01/19        USD     24.00        USD     633        $ (9,996

Teck Resources Ltd.

     485          02/01/19        USD     22.00        USD     1,045          (47,530

Vale SA — ADR

     561          02/01/19        USD     14.50        USD     740          (10,379

Vale SA — ADR

     500          02/01/19        USD     13.50        USD     660          (24,500

Royal Dutch Shell PLC — ADR, Class A

     432          02/06/19        USD     58.51        USD     2,517          (66,543

BP PLC — ADR Each Representing Six PLC

     638          02/08/19        USD     39.26        USD     2,419          (49,290

Exxon Mobil Corp.

     236          02/08/19        USD     70.01        USD     1,609          (27,866

BP PLC — ADR

     638          02/15/19        USD     42.00        USD     2,419          (13,079

Canadian Natural Resources Ltd.

     42          02/15/19        CAD     34.00        CAD     1,390          (41,885

Concho Resources, Inc.

     80          02/15/19        USD     112.00        USD     822          (24,593

ConocoPhillips

     166          02/15/19        USD     67.50        USD     1,035          (20,418

ConocoPhillips

     76          02/15/19        USD     65.00        USD     474          (15,846

Exxon Mobil Corp.

     284          02/15/19        USD     80.00        USD     1,937          (3,266

Exxon Mobil Corp.

     236          02/15/19        USD     70.00        USD     1,609          (44,958

First Quantum Minerals Ltd.

     50          02/15/19        CAD     13.00        CAD     552          (19,045

First Quantum Minerals Ltd.

     245          02/15/19        CAD     12.00        CAD     2,705          (145,363

Newmont Mining Corp.

     242          02/15/19        USD     35.00        USD     839          (34,122

Teck Resources Ltd.

     190          02/15/19        USD     25.00        USD     409          (7,505

Trimble, Inc.

     14          02/15/19        USD     35.00        USD     46          (1,435

Vale SA — ADR

     1,180          02/15/19        USD     14.00        USD     1,556          (48,380
                          

 

 

 
                           $ (1,695,506
                          

 

 

 

OTC Options Written

 

Description   Counterparty   Number of
Contracts
    Expiration
Date
    Exercise
Price
    Notional
Amount (000)
    Value  

Call

 

ArcelorMittal SA

  Morgan Stanley & Co. International PLC     44,400       01/03/19     EUR     22.50     EUR     802     $  

First Quantum Minerals Ltd.

  Royal Bank of Canada     56,000       01/03/19     CAD     13.86     CAD     618        

Fresnillo PLC

  Goldman Sachs International     96,000       01/03/19     GBP     8.48     GBP     828       (35,878

Glencore PLC

  Morgan Stanley & Co. International PLC     662,000       01/03/19     GBP     3.06     GBP     1,933       (8,704

OZ Minerals Ltd.

  Goldman Sachs International     145,000       01/03/19     AUD     9.28     AUD     1,276       (1,216

Stelco Holdings, Inc.

  Credit Suisse International     25,000       01/03/19     CAD     21.78     CAD     377        

Suncor Energy, Inc.

  Goldman Sachs International     19,400       01/03/19     CAD     46.20     CAD     740        

TOTAL SA

  Morgan Stanley & Co. International PLC     52,200       01/03/19     EUR     51.51     EUR     2,403        

Vale SA — ADR

  Barclays Bank PLC     60,000       01/03/19     USD     15.66     USD     791        

Bunge Ltd.

  Barclays Bank PLC     18,800       01/04/19     USD     58.63     USD     1,005       (11

First Quantum Minerals Ltd.

  Citibank N.A.     42,000       01/04/19     CAD     14.25     CAD     464       (5

Suncor Energy, Inc.

  Goldman Sachs International     45,600       01/04/19     CAD     44.18     CAD     1,739        

Suncor Energy, Inc.

  Credit Suisse International     17,100       01/07/19     CAD     46.00     CAD     652       (12

CNOOC Ltd.

  UBS AG     587,000       01/08/19     HKD     14.23     HKD     7,079       (335

Smurfit Kappa Group PLC

  Morgan Stanley & Co. International PLC     67,100       01/08/19     EUR     29.35     EUR     1,558       (47

ArcelorMittal SA

  Goldman Sachs International     83,100       01/09/19     EUR     23.16     EUR     1,502       (46

First Quantum Minerals Ltd.

  Goldman Sachs International     81,200       01/09/19     CAD     13.46     CAD     896       (1,542

OZ Minerals Ltd.

  Citibank N.A.     258,600       01/09/19     AUD     9.58     AUD     2,276       (2,348

TOTAL SA

  Morgan Stanley & Co. International PLC     44,000       01/09/19     EUR     53.35     EUR     2,026       (14

Trimble, Inc.

  Citibank N.A.     22,000       01/09/19     USD     38.20     USD     724       (31

BHP Group PLC

  UBS AG     158,700       01/10/19     GBP     16.44     GBP     2,631       (91,745

First Quantum Minerals Ltd.

  Royal Bank of Canada     56,000       01/10/19     CAD     13.86     CAD     618       (925

Stelco Holdings, Inc.

  Credit Suisse International     20,000       01/11/19     CAD     19.33     CAD     301       (5

Stelco Holdings, Inc.

  Credit Suisse International     30,000       01/11/19     CAD     21.70     CAD     452        

Suncor Energy, Inc.

  Credit Suisse International     17,000       01/11/19     CAD     45.48     CAD     648       (3

Vale SA — ADR

  Citibank N.A.     114,600       01/11/19     USD     15.60     USD     1,512       (366

CNOOC Ltd.

  UBS AG     587,000       01/15/19     HKD     14.23     HKD     7,079       (1,117

First Quantum Minerals Ltd.

  Royal Bank of Canada     56,000       01/15/19     CAD     14.05     CAD     618       (1,168

Glanbia PLC

  Goldman Sachs International     48,400       01/15/19     EUR     17.43     EUR     794       (5,798

Randgold Resources Ltd. — ADR

  Goldman Sachs International     18,300       01/15/19     USD     84.00     USD     1,518       (20,761

Stelco Holdings, Inc.

  Credit Suisse International     37,500       01/15/19     CAD     21.90     CAD     565        

Suncor Energy, Inc.

  Goldman Sachs International     45,600       01/15/19     CAD     44.39     CAD     1,739       (1,113

ArcelorMittal SA

  Goldman Sachs International     30,800       01/16/19     EUR     20.52     EUR     559       (1,497

Fresnillo PLC

  Goldman Sachs International     96,000       01/16/19     GBP     8.56     GBP     828       (50,277

Glencore International PLC

  Morgan Stanley & Co. International PLC     662,000       01/16/19     GBP     3.10     GBP     1,933       (26,332

 

 

76    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Consolidated Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Resources & Commodities Strategy Trust (BCX)

 

OTC Options Written (continued)

 

Description   Counterparty   Number of
Contracts
    Expiration
Date
    Exercise
Price
    Notional
Amount (000)
    Value  

Call (continued)

 

TOTAL SA

  Credit Suisse International     69,000       01/16/19       EUR       48.97       EUR       3,177     $ (9,469

Umicore SA

  Credit Suisse International     25,700       01/16/19       EUR       37.41       EUR       895       (10,594

First Quantum Minerals Ltd.

  Credit Suisse International     125,000       01/22/19       CAD       13.26       CAD       1,380       (12,760

ArcelorMittal SA

  Morgan Stanley & Co. International PLC     108,400       01/23/19       EUR       20.31       EUR       1,959       (12,759

Canadian Natural Resources Ltd.

  Credit Suisse International     29,000       01/23/19       CAD       37.51       CAD       955       (3,676

Smurfit Kappa Group PLC

  UBS AG     58,000       01/23/19       EUR       24.72       EUR       1,347       (31,158

Suncor Energy, Inc.

  Credit Suisse International     47,800       01/23/19       CAD       42.56       CAD       1,823       (5,401

TOTAL SA

  UBS AG     70,200       01/23/19       EUR       50.27       EUR       3,242       (5,761

Trimble, Inc.

  Barclays Bank PLC     34,500       01/23/19       USD       36.53       USD       1,135       (5,826

BHP Group PLC

  UBS AG     208,600       01/24/19       GBP       16.13       GBP       3,459       (206,777

FMC Corp.

  Deutsche Bank AG     32,200       01/24/19       USD       77.19       USD       2,382       (35,481

Fresnillo PLC

  Credit Suisse International     178,000       01/24/19       GBP       8.02       GBP       1,534       (186,075

Mondi PLC

  Goldman Sachs International     138,200       01/24/19       GBP       17.93       GBP       2,258       (21,385

Randgold Resources Ltd. — ADR

  Barclays Bank PLC     26,900       01/24/19       USD       87.09       USD       2,230       (26,125

Yara International ASA

  Goldman Sachs International     39,100       01/24/19       NOK       358.26       NOK       13,033       (8,223

First Quantum Minerals Ltd.

  Credit Suisse International     125,000       01/25/19       CAD       13.26       CAD       1,380       (16,050

Glencore International PLC

  UBS AG     1,326,100       01/25/19       GBP       3.05       GBP       3,872       (109,134

Stelco Holdings, Inc.

  Credit Suisse International     37,500       01/25/19       CAD       22.10       CAD       565       (12

Lundin Mining Corp.

  Goldman Sachs International     238,000       01/29/19       CAD       6.03       CAD       1,342       (32,829

Rio Tinto PLC — ADR

  Goldman Sachs International     54,300       01/29/19       USD       49.49       USD       2,632       (59,351

TOTAL SA

  Credit Suisse International     38,000       01/29/19       EUR       48.58       EUR       1,750       (14,914

ArcelorMittal SA

  Goldman Sachs International     58,000       01/30/19       EUR       20.36       EUR       1,048       (9,657

BHP Group PLC

  Goldman Sachs International     199,000       01/30/19       GBP       16.96       GBP       3,299       (108,760

FMC Corp.

  Deutsche Bank AG     32,300       01/30/19       USD       77.19       USD       2,389       (43,667

Glencore International PLC

  Goldman Sachs International     550,700       01/30/19       GBP       2.98       GBP       1,608       (69,121

Ingredion, Inc.

  Citibank N.A.     17,000       01/30/19       USD       92.44       USD       1,554       (43,272

CNOOC Ltd.

  JPMorgan Chase Bank N.A.     454,000       01/31/19       HKD       13.40       HKD       5,475       (9,580

First Quantum Minerals Ltd.

  Royal Bank of Canada     56,000       01/31/19       CAD       14.25       CAD       618       (7,313

Glanbia PLC

  UBS AG     83,600       01/31/19       EUR       17.23       EUR       1,370       (26,009

OZ Minerals Ltd.

  Goldman Sachs International     258,600       01/31/19       AUD       9.09       AUD       2,276       (40,527

Stelco Holdings, Inc.

  Citibank N.A.     28,700       01/31/19       CAD       20.32       CAD       432       (216

Umicore SA

  Credit Suisse International     26,500       01/31/19       EUR       36.82       EUR       923       (18,106

Suncor Energy, Inc.

  Goldman Sachs International     33,300       02/01/19       CAD       43.81       CAD       1,270       (3,584

Trimble, Inc.

  Citibank N.A.     34,500       02/01/19       USD       36.65       USD       1,135       (9,170

CNOOC Ltd.

  JPMorgan Chase Bank N.A.     877,000       02/04/19       HKD       12.88       HKD       10,577       (30,620

Canadian Natural Resources Ltd.

  Credit Suisse International     29,000       02/06/19       CAD       37.51       CAD       955       (8,016

Glanbia PLC

  UBS AG     49,200       02/06/19       EUR       17.15       EUR       806       (19,464

Ingredion, Inc.

  Citibank N.A.     17,000       02/06/19       USD       92.44       USD       1,554       (49,096

Rio Tinto PLC — ADR

  UBS AG     30,000       02/07/19       USD       47.17       USD       1,454       (85,748

Suncor Energy, Inc.

  Goldman Sachs International     42,200       02/07/19       CAD       37.66       CAD       1,609       (59,238

Baker Hughes a GE Co., Class A

  Deutsche Bank AG     29,400       02/08/19       USD       22.01       USD       632       (19,581

TOTAL SA

  UBS AG     75,100       02/12/19       EUR       48.21       EUR       3,468       (53,108

Fresnillo PLC

  Credit Suisse International     178,000       02/13/19       GBP       8.02       GBP       1,534       (213,021

Ingredion, Inc.

  Citibank N.A.     17,000       02/13/19       USD       92.44       USD       1,554       (54,429

Mondi PLC

  UBS AG     73,200       02/13/19       GBP       17.57       GBP       1,196       (31,364

Rio Tinto PLC — ADR

  Goldman Sachs International     54,300       02/13/19       USD       49.49       USD       2,632       (79,336

Suncor Energy, Inc.

  Goldman Sachs International     40,000       02/14/19       CAD       41.73       CAD       1,525       (17,639

Yara International ASA

  Goldman Sachs International     39,600       02/20/19       NOK       349.98       NOK       13,199       (41,668
               

 

 

 
                $ (2,216,366
               

 

 

 

Balances Reported in the Consolidated Statements of Assets and Liabilities for Options Written

 

      Swap
Premiums
Paid
     Swap
Premiums
Received
     Unrealized
Appreciation
     Unrealized
Depreciation
     Value  

Options Written

     N/A        N/A      $ 4,789,164      $ (532,994    $ (3,911,872

 

 

CONSOLIDATED SCHEDULES OF INVESTMENTS      77  


Consolidated Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Resources & Commodities Strategy Trust (BCX)

 

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Consolidated Statements of Assets and Liabilities were as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Assets — Derivative Financial Instruments

                    

Options purchased

                    

Investments at value — unaffiliated(a)

   $      $      $ 3,995      $      $      $      $ 3,995  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities — Derivative Financial Instruments

                    

Options written

                    

Options written, at value

   $      $      $ 3,911,872      $      $      $      $ 3,911,872  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes options purchased at value as reported in the Consolidated Schedule of Investments.

 

For the period ended December 31, 2018, the effect of derivative financial instruments in the Consolidated Statement of Operations was as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Net Realized Gain (Loss) from:

                    

Options purchase(a)

   $      $      $ (11,972    $      $      $      $ (11,972

Options written

                   (1,950,043                           (1,950,043
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $      $      $ (1,962,015    $      $      $      $ (1,962,015
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Options purchased are included in net realized gain (loss) from investments.

 

 

Net Change in Unrealized Appreciation (Depreciation) on:

 

Options purchased(a)

   $      $      $ 3,011      $      $      $      $ 3,011  

Options written

                   12,466,021                             12,466,021  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $      $      $ 12,469,032      $      $      $      $ 12,469,032  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Options purchased are included in net change in unrealized appreciation (depreciation) from investments.

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Options:

        

Average value of contracts purchased

   $ 2,094  

Average value of contracts written

   $ 6,816,663  

For more information about the Trust’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

Derivative Financial Instruments — Offsetting as of Period End

The Trust’s derivative assets and liabilities (by type) were as follows:

 

      Assets      Liabilities  

Derivative Financial Instruments:

     

Options

   $ 3,995 (a)      $ 3,911,872  

Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)

     (3,995      (1,695,506
  

 

 

    

 

 

 

Total derivative assets and liabilities subject to an MNA

   $      $ 2,216,366  
  

 

 

    

 

 

 

 

  (a) 

Includes options purchased at value which is included in Investments at value — unaffiliated in the Consolidated Statement of Assets and Liabilities and reported in the Schedule of Investments.

 

 

 

78    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Consolidated Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Resources & Commodities Strategy Trust (BCX)

 

The following table presents the Trust’s derivative assets (and liabilities) by counterparty net of amounts available for offset under an MNA and net of the related collateral received (and pledged) by the Trust:

 

Counterparty    Derivative
Liabilities

Subject to
an MNA by
Counterparty
       Derivatives
Available
for Offset
       Non-cash
Collateral

Pledged (a)
       Cash
Collateral
Pledged
       Net Amount
of Derivative

Liabilities (b)
 

Barclays Bank PLC

   $ 31,962        $        $ (31,962      $        $  

Citibank N.A.

     158,933                   (24,139                 134,794  

Credit Suisse International

     498,114                   (498,114                  

Deutsche Bank AG

     98,729                                     98,729  

Goldman Sachs International

     669,446                   (505,072                 164,374  

JPMorgan Chase Bank N.A.

     40,200                   (40,200                  

Morgan Stanley & Co. International PLC

     47,856                   (47,856                  

Royal Bank of Canada

     9,406                                     9,406  

UBS AG

     661,720                   (661,720                  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
   $ 2,216,366        $        $ (1,809,063      $        $ 407,303  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

Excess of collateral pledged to the individual counterparty is not shown for financial reporting purposes.

 
  (b) 

Net amount represents the net amount payable due to counterparty in the event of default. Net amount may be offset further by the options written receivable/payable on the Consolidated Statement of Assets and Liabilities.

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

      Level 1        Level 2        Level 3        Total  

Assets:

                 

Investments:

                 

Common Stocks:

                 

Chemicals

   $ 97,157,373        $ 12,762,701        $        $ 109,920,074  

Containers & Packaging

     14,492,245          8,002,609                   22,494,854  

Electronic Equipment, Instruments & Components

     7,602,967                            7,602,967  

Energy Equipment & Services

     9,833,991                            9,833,991  

Food Products

     42,909,586          8,505,284                   51,414,870  

Machinery

     4,768,070                            4,768,070  

Metals & Mining

     132,382,889          140,351,255          15,030,195          287,764,339  

Oil, Gas & Consumable Fuels

     203,535,757          59,649,766                   263,185,523  

Paper & Forest Products

              11,169,508          56          11,169,564  

Pharmaceuticals

     5,095,218                            5,095,218  

Corporate Bonds

     4,108,961          9,997,317          1,578,600          15,684,878  

Short-Term Securities

     13,652,388                            13,652,388  

Options Purchased:

                 

Equity contracts

     3,995                            3,995  
  

 

 

      

 

 

      

 

 

      

 

 

 

Subtotal

   $ 535,543,440        $ 250,438,440        $ 16,608,851        $ 802,590,731  
  

 

 

      

 

 

      

 

 

      

 

 

 

Investments Valued at NAV(a)

                    276,471  

Total Investments

                  $ 802,867,202  
                 

 

 

 

Derivative Financial Instruments(b)

                 

Liabilities:

                 

Equity contracts

   $ (1,504,468      $ (2,407,404      $        $ (3,911,872
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

As of December 31, 2018, certain of the Trust’s Investments were fair valued using net asset value (“NAV”) per share and have been excluded from the fair value hierarchy.

 
  (b) 

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

 

 

 

CONSOLIDATED SCHEDULES OF INVESTMENTS      79  


Consolidated Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Resources & Commodities Strategy Trust (BCX)

 

Transfers between Level 1 and Level 2 were as follows:

 

      Transfers into
Level 1
 (a)
       Transfers out of
Level 2
 (a)
 

Assets:

       

Long-Term Investments:

       

Corporate Bonds

   $ 4,653,795        $ 4,653,795  
  

 

 

      

 

 

 

 

  (a) 

External pricing service used to reflect any significant market movements between the time the Trust valued such foreign securities and the earlier closing of foreign markets.

 

A reconciliation of Level 3 investments is presented when the Trust had a significant amount of Level 3 investments at the beginning and/or end of the year in relation to net assets. The following table is a reconciliation of Level 3 investments for which significant unobservable inputs were used in determining fair value:

 

      Common Stocks        Corporate Bonds        Total  

Assets:

            

Opening Balance, as of December 31, 2017

   $ 62        $        $ 62  

Transfers into Level 3

                        

Transfers out of Level 3

                        

Accrued discounts/premiums

                        

Net realized gain (loss)

     (2,074                 (2,074

Net change in unrealized appreciation (depreciation)(a)(b)

     2,653,048          (221,400        2,431,648  

Purchases

     12,576,773          1,800,000          14,376,773  

Sales

     (197,558                 (197,558
  

 

 

      

 

 

      

 

 

 

Closing Balance as of December 31, 2018

   $ 15,030,251        $ 1,578,600        $ 16,608,851  
  

 

 

      

 

 

      

 

 

 

Net change in unrealized appreciation (depreciation) on investments held as of December 31, 2018(b)

   $ 2,653,048        $ (221,400      $ 2,431,648  
  

 

 

      

 

 

      

 

 

 

 

  (a) 

Included in the related net change in unrealized appreciation (depreciation) in the Consolidated Statement of Operations.

 
  (b) 

Any difference between net change in unrealized appreciation (depreciation) and net change in unrealized appreciation (depreciation) on derivative financial instruments still held at December 31, 2018 is generally due to derivative financial instruments no longer held or categorized as Level 3 at period end.

 

See notes to financial statements.

 

 

80    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments

December 31, 2018

  

BlackRock Science and Technology Trust (BST)

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Common Stocks — 98.3%  
Automobiles — 1.0%        

Tesla, Inc.(a)(b)

    16,815     $ 5,596,032  
   

 

 

 
Communications Equipment — 0.5%  

Viavi Solutions, Inc.(a)(b)

    313,673       3,152,414  
   

 

 

 
Diversified Consumer Services — 0.8%  

Arco Platform Ltd., Class A(a)

    202,229       4,473,306  
   

 

 

 
Diversified Telecommunication Services — 0.6%  

Bandwidth, Inc., Class A(a)

    83,772       3,413,709  
   

 

 

 
Electrical Equipment — 0.6%  

II-VI, Inc.(a)(b)

    116,744       3,789,510  
   

 

 

 
Electronic Equipment, Instruments & Components — 0.6%  

Keysight Technologies, Inc.(a)(b)

    57,003       3,538,746  
   

 

 

 
Entertainment — 6.2%  

Activision Blizzard, Inc.(b)

    136,435       6,353,778  

Netflix, Inc.(a)(b)

    35,133       9,403,699  

Spotify Technology SA(a)(b)

    20,709       2,350,471  

Studio Dragon Corp.(a)

    39,175       3,244,103  

Take-Two Interactive Software, Inc.(a)(b)

    77,088       7,935,439  

Ubisoft Entertainment SA(a)

    85,983       6,926,957  
   

 

 

 
    36,214,447  
Health Care Technology — 1.0%  

Ping An Healthcare and Technology Co. Ltd.(a)(c)(d)

    676,978       2,380,186  

Teladoc Health, Inc.(a)(b)

    68,308       3,386,028  
   

 

 

 
    5,766,214  
Household Durables — 0.5%  

Roku, Inc.(a)(b)

    91,092       2,791,059  
   

 

 

 
Interactive Media & Services — 14.1%  

58.com, Inc. — ADR(a)(b)

    52,400       2,840,604  

Alphabet, Inc., Class A(a)(b)

    28,015       29,274,554  

Eventbrite, Inc., Class A(a)(b)

    99,269       2,760,671  

Facebook, Inc., Class A(a)(b)

    49,472       6,485,285  

IAC/InterActiveCorp(a)(b)

    30,002       5,491,566  

Tencent Holdings Ltd.

    740,700       29,687,495  

Yandex NV, Class A(a)(b)

    231,080       6,320,038  
   

 

 

 
    82,860,213  
Internet & Direct Marketing Retail — 11.3%  

Alibaba Group Holding Ltd. — ADR(a)(b)

    123,494       16,927,323  

Amazon.com, Inc.(a)(b)

    18,872       28,345,178  

Delivery Hero SE(a)(c)

    107,930       4,029,456  

Ensogo Ltd.(a)(e)

    173,282       1  

Farfetch Ltd., Class A(a)(b)

    197,650       3,500,382  

Jasper Infotech Private Ltd., Series I,
(Acquired 08/08/15, Cost $1,998,435)(a)(e)(f)

    1,054       211,759  

Meituan Dianping, Class B(a)(d)

    768,196       4,305,492  

MercadoLibre, Inc.(b)

    15,500       4,539,175  

Takeaway.com NV(a)(c)

    50,640       3,422,105  

Tongcheng-Elong Holdings Ltd.(a)

    819,200       1,307,707  
   

 

 

 
    66,588,578  
IT Services — 18.0%  

Adyen NV(a)(c)

    8,676       4,687,112  

Endava PLC, ADR(a)

    78,413       1,900,731  

GMO Payment Gateway, Inc.(d)

    89,900       3,827,673  

InterXion Holding NV(a)(b)

    81,948       4,438,304  

Mastercard, Inc., Class A(b)

    92,272       17,407,113  

MongoDB, Inc.(a)(b)

    33,711       2,822,959  

Okta, Inc.(a)(b)

    92,236       5,884,657  

Pagseguro Digital Ltd., Class A(a)(b)

    189,961       3,557,970  

PayPal Holdings, Inc.(a)(b)

    99,400       8,358,546  
Security   Shares     Value  
IT Services (continued)  

Shopify, Inc., Class A(a)(b)

    31,463     $ 4,356,052  

Square, Inc., Class A(a)(b)

    201,964       11,328,161  

StoneCo Ltd.(a)

    102,887       1,897,236  

Twilio, Inc., Class A(a)(b)

    110,105       9,832,376  

Visa, Inc., Class A(b)

    125,645       16,577,601  

Wirecard AG

    28,319       4,269,152  

Wix.com Ltd.(a)(b)

    54,137       4,890,737  
   

 

 

 
    106,036,380  
Semiconductors & Semiconductor Equipment — 11.4%  

Advanced Micro Devices, Inc.(a)(b)

    286,303       5,285,153  

Aixtron SE(a)

    285,294       2,765,706  

ASML Holding NV

    57,145       8,952,305  

Cree, Inc.(a)(b)

    91,780       3,925,890  

Lam Research Corp.(b)

    37,426       5,096,298  

Marvell Technology Group Ltd.(b)

    352,600       5,708,594  

Microchip Technology, Inc.(b)

    41,300       2,970,296  

Monolithic Power Systems, Inc.(b)

    36,770       4,274,512  

NVIDIA Corp.(b)

    27,252       3,638,142  

Silicon Laboratories, Inc.(a)(b)

    37,100       2,923,851  

Skyworks Solutions, Inc.(b)

    49,117       3,291,821  

SOITEC(a)

    85,620       4,955,137  

STMicroelectronics NV

    240,600       3,410,167  

Taiwan Semiconductor Manufacturing Co. Ltd.

    1,282,000       9,308,896  
   

 

 

 
    66,506,768  
Software — 27.9%  

Adobe, Inc.(a)(b)

    56,800       12,850,432  

Altair Engineering, Inc., Class A(a)

    154,413       4,258,711  

Altium Ltd.

    207,900       3,182,204  

Atlassian Corp. PLC, Class A(a)(b)

    55,000       4,893,900  

Autodesk, Inc.(a)(b)

    68,500       8,809,785  

Avalara, Inc.(a)(b)

    103,439       3,222,125  

Coupa Software, Inc.(a)(b)

    59,380       3,732,627  

Elastic NV(a)(b)

    19,391       1,386,069  

Guidewire Software, Inc.(a)(b)

    42,500       3,409,775  

Kingdee International Software Group Co. Ltd.

    4,938,000       4,365,644  

Microsoft Corp.(b)

    343,440       34,883,201  

Oracle Corp.(b)

    64,796       2,925,539  

Pluralsight, Inc., Class A(a)(b)

    168,393       3,965,655  

PTC, Inc.(a)(b)

    55,300       4,584,370  

RingCentral, Inc., Class A(a)

    33,136       2,731,732  

SailPoint Technologies Holding, Inc.(a)

    187,346       4,400,758  

salesforce.com, Inc.(a)(b)

    117,100       16,039,187  

SendGrid, Inc.(a)(b)

    147,932       6,386,224  

ServiceNow, Inc.(a)(b)

    38,210       6,803,290  

Smartsheet, Inc., Class A(a)(b)

    61,397       1,526,329  

SVMK, Inc.(a)(b)

    167,511       2,055,360  

Tableau Software, Inc., Class A(a)(b)

    42,300       5,076,000  

Xero Ltd.(a)

    120,100       3,558,761  

Zendesk, Inc.(a)(b)

    91,751       5,355,506  

Zscaler, Inc.(a)(b)

    68,630       2,690,982  

Zuora, Inc., Class A(a)

    587,925       10,664,959  
   

 

 

 
    163,759,125  
Technology Hardware, Storage & Peripherals — 2.9%  

Apple, Inc.(b)

    109,269       17,236,092  
   

 

 

 

Total Common Stocks — 97.3%
(Cost — $356,003,480)

 

    571,722,593  
   

 

 

 
 

 

 

SCHEDULES OF INVESTMENTS      81  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Science and Technology Trust (BST)

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Preferred Securities — 2.6%  

Preferred Stocks — 2.6%

 

Interactive Media & Services — 2.6%  

Ant International,
(Acquired 05/18/18, cost $6,492,863), 0.00%(e)(f)

    1,157,373     $ 6,492,862  

Uber Technologies, Inc., Series E,
(Acquired 12/04/14, cost $3,000,048), 0.00%(e)(f)

    90,044       4,049,279  

Xiaoju Kuaizhi, Inc., Series A-17
(Acquired 07/28/15, cost $2,106,332), 0.00%(a)(e)(f)

    110,003       4,949,035  
   

 

 

 

Total Preferred Stocks — 2.6%
(Cost — $12,509,875)

 

    15,491,176  
   

 

 

 

Total Long-Term Investments — 99.9%
(Cost — $368,513,355)

 

    587,213,769  
   

 

 

 
Short-Term Securities — 1.1%  

BlackRock Liquidity Funds, T-Fund, Institutional Class, 2.32%(g)(i)

    4,738,937       4,738,937  

SL Liquidity Series, LLC, Money Market Series, 2.57%(g)(h)(i)

    1,710,252       1,710,081  
   

 

 

 

Total Short-Term Securities — 1.1%
(Cost — $6,449,185)

 

    6,449,018  
   

 

 

 

Total Investments Before Options Written — 101.0%
(Cost — $374,962,540)

 

    593,662,787  
   

 

 

 

Options Written — (0.8)%
(Premiums Received — $7,930,427)

 

    (4,702,879
   

 

 

 

Total Investments, Net of Options Written — 100.2%
(Cost — $367,032,113)

 

    588,959,908  

Liabilities in Excess of Other Assets — (0.2)%

 

    (1,052,223
   

 

 

 

Net Assets — 100.0%

 

  $ 587,907,685  
   

 

 

 

 

(a) 

Non-income producing security.

(b) 

All or a portion of the security has been pledged and/or segregated as collateral in connection with outstanding exchange-traded options written.

(c) 

Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

(d) 

Security, or a portion of the security, is on loan.

(e) 

Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy.

(f) 

Restricted security as to resale, excluding 144A securities. As of period end, the Trust held restricted securities with a current value of $15,702,935 and an original cost of $13,597,678, which was 2.7% of its net assets.

(g) 

Annualized 7-day yield as of period end.

(h) 

All or a portion of security was purchased with the cash collateral from loaned securities.

 
(i) 

During the year ended December 31, 2018, investments in issuers considered to be affiliates of the Trust for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate    Shares
Held at
12/31/17
     Net
Activity
     Shares
Held at
12/31/18
     Value at
12/31/18
     Income      Net
Realized
Gain (Loss)
 (a)
     Change in
Unrealized
Appreciation
(Depreciation)
 

BlackRock Liquidity Funds, T-Fund, Institutional Class

     4,696,297        42,640        4,738,937      $ 4,738,937      $ 182,611      $      $  

SL Liquidity Series, LLC, Money Market Series

     3,497,053        (1,786,801      1,710,252        1,710,081        159,000 (b)        (842      2  
           

 

 

    

 

 

    

 

 

    

 

 

 
            $ 6,449,018        341,611      $ (842    $ 2  
           

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes net capital gain distributions, if applicable.

 
  (b) 

Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

 

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

Derivative Financial Instruments Outstanding as of Period End

Exchange-Traded Options Written

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call                                                   

Activision Blizzard, Inc.

     263          01/04/19        USD     56.50        USD     1,225        $ (789

Adobe, Inc.

     73          01/04/19        USD     255.00        USD     1,652          (438

 

 

82    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Science and Technology Trust (BST)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call (continued)                                                   

Alibaba Group Holding Ltd. — ADR

     75          01/04/19        USD     160.00        USD     1,028        $ (75

Alphabet, Inc., Class A

     15          01/04/19        USD     1,080.00        USD     1,567          (4,687

Amazon.com, Inc.

     13          01/04/19        USD     1,700.00        USD     1,953          (448

Autodesk, Inc.

     62          01/04/19        USD     149.00        USD     797          (186

Cree, Inc.

     80          01/04/19        USD     46.50        USD     342          (640

Facebook, Inc., Class A

     64          01/04/19        USD     149.00        USD     839          (64

Marvell Technology Group Ltd.

     100          01/04/19        USD     17.50        USD     162          (400

Mastercard, Inc.

     71          01/04/19        USD     200.00        USD     1,339          (958

Netflix, Inc.

     24          01/04/19        USD     290.00        USD     642          (1,080

PayPal Holdings, Inc.

     95          01/04/19        USD     84.50        USD     799          (11,258

ServiceNow, Inc.

     66          01/04/19        USD     187.50        USD     1,175          (4,290

Shopify, Inc.

     34          01/04/19        USD     155.00        USD     471          (340

Skyworks Solutions, Inc.

     110          01/04/19        USD     76.00        USD     737          (1,650

Take-Two Interactive Software, Inc.

     26          01/04/19        USD     112.00        USD     268          (195

Visa, Inc., Class A

     57          01/04/19        USD     143.00        USD     752          (228

Yandex NV

     400          01/04/19        USD     32.00        USD     1,094          (2,000

salesforce.com, Inc.

     86          01/04/19        USD     135.00        USD     1,178          (29,885

Avalara, Inc.

     165          01/08/19        USD     35.01        USD     514          (2,856

Activision Blizzard, Inc.

     112          01/11/19        USD     52.50        USD     522          (7,392

Adobe, Inc.

     50          01/11/19        USD     267.50        USD     1,131          (2,250

Advanced Micro Devices, Inc.

     421          01/11/19        USD     20.00        USD     777          (18,735

Alibaba Group Holding Ltd. — ADR

     83          01/11/19        USD     160.00        USD     1,138          (539

Alphabet, Inc., Class A

     6          01/11/19        USD     1,100.00        USD     627          (2,760

Amazon.com, Inc.

     13          01/11/19        USD     1,770.00        USD     1,953          (3,601

Apple, Inc.

     63          01/11/19        USD     197.30        USD     994          (5

Apple, Inc.

     48          01/11/19        USD     180.96        USD     757          (164

Autodesk, Inc.

     57          01/11/19        USD     140.00        USD     733          (4,845

Cree, Inc.

     100          01/11/19        USD     47.00        USD     428          (2,350

Facebook, Inc., Class A

     24          01/11/19        USD     147.00        USD     315          (396

Marvell Technology Group Ltd.

     381          01/11/19        USD     16.50        USD     617          (12,573

Microsoft Corp.

     175          01/11/19        USD     112.00        USD     1,777          (2,100

Roku, Inc.

     140          01/11/19        USD     40.00        USD     429          (2,100

Shopify, Inc.

     43          01/11/19        USD     165.00        USD     595          (1,075

Take-Two Interactive Software, Inc.

     92          01/11/19        USD     114.00        USD     947          (4,600

Visa, Inc., Class A

     27          01/11/19        USD     142.00        USD     356          (553

Visa, Inc., Class A

     27          01/11/19        USD     144.00        USD     356          (513

salesforce.com, Inc.

     23          01/11/19        USD     146.00        USD     315          (2,001

58.com, Inc. — ADR

     92          01/18/19        USD     70.00        USD     499          (4,140

58.com, Inc. — ADR

     91          01/18/19        USD     65.00        USD     493          (1,820

Activision Blizzard, Inc.

     112          01/18/19        USD     52.50        USD     522          (3,584

Adobe, Inc.

     38          01/18/19        USD     260.00        USD     860          (1,767

Advanced Micro Devices, Inc.

     618          01/18/19        USD     23.00        USD     1,141          (8,652

Alibaba Group Holding Ltd. — ADR

     75          01/18/19        USD     160.00        USD     1,028          (1,650

Alibaba Group Holding Ltd. — ADR

     65          01/18/19        USD     145.00        USD     891          (12,025

Alphabet, Inc., Class A

     6          01/18/19        USD     1,130.00        USD     627          (2,490

Alphabet, Inc., Class A

     8          01/18/19        USD     1,100.00        USD     836          (7,920

Amazon.com, Inc.

     17          01/18/19        USD     1,800.00        USD     2,553          (2,720

Atlassian Corp. PLC, Class A

     190          01/18/19        USD     85.00        USD     1,691          (133,000

Avalara, Inc.

     66          01/18/19        USD     35.00        USD     206          (2,805

Coupa Software, Inc.

     100          01/18/19        USD     70.00        USD     629          (10,500

Cree, Inc.

     141          01/18/19        USD     45.00        USD     603          (11,421

Elastic NV

     67          01/18/19        USD     65.00        USD     479          (54,605

Eventbrite, Inc., Class A

     140          01/18/19        USD     35.00        USD     389          (2,100

Facebook, Inc., Class A

     64          01/18/19        USD     150.00        USD     839          (1,824

Farfetch Ltd., Class A

     387          01/18/19        USD     20.00        USD     685          (15,480

Guidewire Software, Inc.

     58          01/18/19        USD     90.00        USD     465          (1,160

Guidewire Software, Inc.

     58          01/18/19        USD     80.00        USD     465          (16,965

IAC/InterActiveCorp

     53          01/18/19        USD     185.00        USD     970          (33,125

II-VI, Inc.

     93          01/18/19        USD     40.00        USD     302          (4,650

InterXion Holding NV

     190          01/18/19        USD     60.00        USD     1,029          (3,325

Keysight Technologies, Inc.

     91          01/18/19        USD     60.00        USD     565          (28,210

Lam Research Corp.

     42          01/18/19        USD     160.00        USD     572          (567

 

 

SCHEDULES OF INVESTMENTS      83  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Science and Technology Trust (BST)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call (continued)                                                   

Lam Research Corp.

     146          01/18/19        USD     155.00        USD     1,988        $ (6,059

Marvell Technology Group Ltd.

     100          01/18/19        USD     18.00        USD     162          (650

Mastercard, Inc.

     163          01/18/19        USD     210.00        USD     3,075          (6,764

MercadoLibre, Inc.

     85          01/18/19        USD     320.00        USD     2,489          (44,625

Microchip Technology, Inc.

     72          01/18/19        USD     80.00        USD     518          (2,160

Microchip Technology, Inc.

     83          01/18/19        USD     77.50        USD     597          (4,980

Microsoft Corp.

     230          01/18/19        USD     110.00        USD     2,336          (10,810

Microsoft Corp.

     42          01/18/19        USD     112.00        USD     427          (2,021

MongoDB, Inc.

     117          01/18/19        USD     80.00        USD     980          (85,995

Monolithic Power Systems, Inc.

     137          01/18/19        USD     135.00        USD     1,593          (10,275

NVIDIA Corp.

     111          01/18/19        USD     170.00        USD     1,482          (2,497

NVIDIA Corp.

     109          01/18/19        USD     165.00        USD     1,455          (3,542

Netflix, Inc.

     47          01/18/19        USD     330.00        USD     1,258          (6,486

Netflix, Inc.

     26          01/18/19        USD     315.00        USD     696          (7,423

Okta, Inc.

     137          01/18/19        USD     60.00        USD     874          (81,515

PTC, Inc.

     96          01/18/19        USD     90.00        USD     796          (11,280

Pagseguro Digital Ltd.

     576          01/18/19        USD     27.50        USD     1,079          (14,400

PayPal Holdings, Inc.

     95          01/18/19        USD     85.00        USD     799          (22,895

Pluralsight, Inc.

     369          01/18/19        USD     25.00        USD     869          (32,288

SVMK, Inc.

     260          01/18/19        USD     12.50        USD     319          (18,850

SendGrid, Inc.

     129          01/18/19        USD     45.00        USD     557          (22,253

SendGrid, Inc.

     130          01/18/19        USD     50.00        USD     561          (7,475

ServiceNow, Inc.

     34          01/18/19        USD     200.00        USD     605          (3,230

Silicon Laboratories, Inc.

     204          01/18/19        USD     80.00        USD     1,608          (49,470

Skyworks Solutions, Inc.

     78          01/18/19        USD     77.50        USD     523          (1,560

Smartsheet, Inc., Class A

     214          01/18/19        USD     30.00        USD     532          (5,350

Spotify Technology SA

     40          01/18/19        USD     150.00        USD     454          (400

Square, Inc.

     351          01/18/19        USD     75.00        USD     1,969          (2,281

Take-Two Interactive Software, Inc.

     77          01/18/19        USD     110.00        USD     793          (15,978

Teladoc, Inc.

     110          01/18/19        USD     70.00        USD     545          (1,375

Tesla, Inc.

     28          01/18/19        USD     365.00        USD     932          (15,400

Twilio, Inc., Class A

     70          01/18/19        USD     105.00        USD     625          (7,420

Viavi Solutions, Inc.

     497          01/18/19        USD     11.00        USD     499          (3,479

Visa, Inc., Class A

     54          01/18/19        USD     150.00        USD     712          (351

Visa, Inc., Class A

     163          01/18/19        USD     135.00        USD     2,151          (37,001

Wix.com Ltd.

     94          01/18/19        USD     95.00        USD     849          (21,620

Yandex NV

     200          01/18/19        USD     33.00        USD     547          (2,000

Zendesk, Inc.

     157          01/18/19        USD     60.00        USD     916          (33,363

Zscaler, Inc.

     115          01/18/19        USD     43.00        USD     451          (9,775

salesforce.com, Inc.

     24          01/18/19        USD     145.00        USD     329          (4,560

salesforce.com, Inc.

     69          01/18/19        USD     140.00        USD     945          (25,530

Wix.com Ltd.

     94          01/23/19        USD     94.67        USD     849          (33,916

Alibaba Group Holding Ltd. — ADR

     83          01/25/19        USD     157.50        USD     1,138          (4,108

Alibaba Group Holding Ltd. — ADR

     65          01/25/19        USD     145.00        USD     891          (17,323

Alphabet, Inc., Class A

     12          01/25/19        USD     1,057.50        USD     1,254          (36,300

Amazon.com, Inc.

     10          01/25/19        USD     1,705.00        USD     1,502          (8,475

Apple, Inc.

     70          01/25/19        USD     170.00        USD     1,104          (11,130

Autodesk, Inc.

     18          01/25/19        USD     145.00        USD     231          (1,611

Facebook, Inc., Class A

     21          01/25/19        USD     134.00        USD     275          (8,820

Lam Research Corp.

     41          01/25/19        USD     143.00        USD     558          (16,195

Mastercard, Inc.

     88          01/25/19        USD     200.00        USD     1,660          (20,636

Microsoft Corp.

     125          01/25/19        USD     113.00        USD     1,270          (5,812

Microsoft Corp.

     236          01/25/19        USD     106.00        USD     2,397          (49,088

NVIDIA Corp.

     52          01/25/19        USD     150.00        USD     694          (9,906

PayPal Holdings, Inc.

     157          01/25/19        USD     95.00        USD     1,320          (7,065

Roku, Inc.

     65          01/25/19        USD     35.00        USD     199          (6,077

ServiceNow, Inc.

     33          01/25/19        USD     180.00        USD     588          (26,730

Shopify, Inc.

     33          01/25/19        USD     148.00        USD     457          (15,015

Square, Inc.

     361          01/25/19        USD     66.00        USD     2,025          (23,646

Square, Inc.

     47          01/25/19        USD     64.50        USD     264          (4,136

Take-Two Interactive Software, Inc.

     80          01/25/19        USD     115.00        USD     824          (10,800

Tesla, Inc.

     30          01/25/19        USD     360.00        USD     998          (29,325

 

 

84    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Science and Technology Trust (BST)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call (continued)                                                   

Twilio, Inc., Class A

     108          01/25/19        USD     105.00        USD     964        $ (14,634

Visa, Inc., Class A

     56          01/25/19        USD     145.00        USD     739          (2,912

Visa, Inc., Class A

     55          01/25/19        USD     142.00        USD     726          (4,372

salesforce.com, Inc.

     46          01/25/19        USD     143.00        USD     630          (14,582

Oracle Corp.

     54          01/31/19        USD     48.00        USD     244          (2,471

SVMK, Inc.

     326          01/31/19        USD     13.00        USD     400          (27,156

Adobe, Inc.

     37          02/01/19        USD     230.00        USD     837          (32,468

Alphabet, Inc., Class A

     9          02/01/19        USD     1,050.00        USD     940          (39,915

Amazon.com, Inc.

     13          02/01/19        USD     1,500.00        USD     1,953          (117,000

Apple, Inc.

     37          02/01/19        USD     165.00        USD     584          (16,928

Marvell Technology Group Ltd.

     242          02/01/19        USD     17.00        USD     392          (10,769

Microsoft Corp.

     236          02/01/19        USD     106.00        USD     2,397          (61,478

Netflix, Inc.

     25          02/01/19        USD     277.50        USD     669          (40,313

Oracle Corp.

     109          02/01/19        USD     49.00        USD     492          (2,180

Oracle Corp.

     63          02/01/19        USD     48.00        USD     284          (2,394

Roku, Inc.

     231          02/01/19        USD     30.00        USD     708          (70,109

Shopify, Inc.

     67          02/01/19        USD     162.50        USD     928          (14,740

Spotify Technology SA

     16          02/01/19        USD     125.00        USD     182          (5,360

Square, Inc.

     460          02/01/19        USD     61.50        USD     2,580          (89,010

Tableau Software, Inc.

     148          02/01/19        USD     125.00        USD     1,776          (72,520

salesforce.com, Inc.

     69          02/01/19        USD     138.00        USD     945          (42,608

Monolithic Power Systems, Inc.

     65          02/05/19        USD     124.54        USD     756          (24,177

Advanced Micro Devices, Inc.

     535          02/15/19        USD     24.00        USD     988          (30,495

Avalara, Inc.

     131          02/15/19        USD     35.00        USD     408          (19,978

II-VI, Inc.

     94          02/15/19        USD     35.00        USD     305          (15,510

InterXion Holding NV

     96          02/15/19        USD     55.60        USD     520          (17,201

Keysight Technologies, Inc.

     108          02/15/19        USD     62.50        USD     670          (28,620

Marvell Technology Group Ltd.

     411          02/15/19        USD     17.00        USD     665          (27,537

Microchip Technology, Inc.

     72          02/15/19        USD     72.50        USD     518          (28,800

Microsoft Corp.

     157          02/15/19        USD     106.20        USD     1,595          (53,578

Pagseguro Digital Ltd.

     468          02/15/19        USD     22.50        USD     877          (31,590

Roku, Inc.

     65          02/15/19        USD     35.00        USD     199          (11,115

SendGrid, Inc.

     258          02/15/19        USD     42.60        USD     1,114          (158,821

Spotify Technology SA

     16          02/15/19        USD     130.00        USD     182          (7,120

Twilio, Inc., Class A

     207          02/15/19        USD     90.00        USD     1,849          (203,895

Zscaler, Inc.

     125          02/15/19        USD     38.00        USD     490          (51,250

salesforce.com, Inc.

     92          02/15/19        USD     135.00        USD     1,260          (83,260
                          

 

 

 
                             (2,965,890
                          

 

 

 

OTC Options Written

 

Description   Counterparty   Number of
Contracts
    Expiration
Date
    Exercise
Price
    Notional
Amount (000)
    Value  
Call                                          

Aixtron SE

  Goldman Sachs International     50,000       01/03/19     EUR     9.87     EUR     423     $ (72

Delivery Hero SE

  Goldman Sachs International     12,500       01/03/19     EUR     35.35     EUR     407       (823

Altium Ltd.

  Morgan Stanley & Co. International PLC     47,000       01/04/19     AUD     23.11     AUD     1,021       (5,475

Okta, Inc.

  UBS AG     37,000       01/04/19     USD     60.07     USD     2,361       (156,440

Farfetch Ltd., Class A

  JPMorgan Chase Bank N.A.     30,400       01/08/19     USD     24.37     USD     538       (74

Guidewire Software, Inc.

  UBS AG     11,700       01/08/19     USD     88.29     USD     939       (809

Kingdee International Software Group Co. Ltd.

  JPMorgan Chase Bank N.A.     575,000       01/09/19     HKD     8.60     HKD     3,979       (40

SOITEC

  UBS AG     17,000       01/09/19     EUR     49.45     EUR     859       (53,418

STMicroelectronics NV

  Credit Suisse International     21,600       01/09/19     EUR     12.19     EUR     267       (11,765

Bandwidth, Inc., Class A

  Barclays Bank PLC     12,500       01/10/19     USD     49.81     USD     509       (152

Taiwan Semiconductor Manufacturing Co. Ltd.

  JPMorgan Chase Bank N.A.     260,000       01/10/19     USD     225.12     USD     58,029       (39,494

UbiSoft Entertainment SA

  UBS AG     14,300       01/10/19     EUR     63.97     EUR     1,005       (110,303

II-VI, Inc.

  Citibank N.A.     9,300       01/11/19     USD     36.20     USD     302       (1,749

SailPoint Technologies Holding, Inc.

  Goldman Sachs International     24,300       01/11/19     USD     27.43     USD     571       (1,652

Altair Engineering, Inc., Class A

  JPMorgan Chase Bank N.A.     24,600       01/14/19     USD     30.86     USD     678       (9,432

Aixtron SE

  Goldman Sachs International     34,200       01/15/19     EUR     10.05     EUR     289       (3,647

Delivery Hero SE

  UBS AG     25,200       01/15/19     EUR     32.22     EUR     821       (37,821

 

 

SCHEDULES OF INVESTMENTS      85  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Science and Technology Trust (BST)

 

OTC Options Written (continued)

 

Description   Counterparty   Number of
Contracts
    Expiration
Date
    Exercise
Price
    Notional
Amount (000)
    Value  

Call (continued)

 

Kingdee International Software Group Co. Ltd.

  JPMorgan Chase Bank N.A.     575,000       01/15/19       HKD       8.72       HKD       3,979     $ (1,004

ASML Holding NV

  Goldman Sachs International     12,000       01/16/19       EUR       154.95       EUR       1,641       (4,113

Taiwan Semiconductor Manufacturing Co. Ltd.

  UBS AG     886,000       01/16/19       USD       232.54       USD       197,746       (84,657

Zuora, Inc., Class A

  Citibank N.A.     30,000       01/18/19       USD       22.48       USD       465       (3,250

Taiwan Semiconductor Manufacturing Co. Ltd.

  UBS AG     68,000       01/23/19       USD       228.01       USD       544       (12,656

Tencent Holdings Ltd

  Goldman Sachs International     149,700       01/23/19       HKD       334.97       HKD       15,177       (92,420

Zuora, Inc., Class A

  Goldman Sachs International     30,000       01/23/19       USD       18.41       USD       46,983       (33,729

GMO Payment Gateway, Inc.

  Goldman Sachs International     26,800       01/24/19       JPY       7,124.15       JPY       544       (991

Kingdee International Software Group Co. Ltd.

  JPMorgan Chase Bank N.A.     575,000       01/24/19       HKD       8.85       HKD       125,066       (2,627

Ping An Healthcare and Technology PLC

  Morgan Stanley & Co. International PLC     118,500       01/24/19       HKD       37.02       HKD       3,979       (626

Studio Dragon Corp.

  Morgan Stanley & Co. International PLC     12,400       01/24/19       USD       105,876.00       USD       3,262       (9,674

II-VI, Inc.

  Barclays Bank PLC     12,800       01/25/19       USD       35.94       USD       1,145,760       (16,427

Bandwidth, Inc., Class A

  Morgan Stanley & Co. International PLC     8,400       01/29/19       USD       40.21       USD       415       (22,648

Viavi Solutions, Inc.

  Deutsche Bank AG     49,700       01/29/19       USD       11.24       USD       342       (5,668

Adyen NV

  Goldman Sachs International     1,500       01/30/19       EUR       478.64       EUR       499       (53,015

Eventbrite, Inc., Class A

  UBS AG     10,350       01/30/19       USD       30.34       USD       707       (14,678

PTC, Inc.

  Credit Suisse International     9,700       01/30/19       USD       91.85       USD       288       (12,796

SailPoint Technologies Holding, Inc.

  Citibank N.A.     19,700       01/30/19       USD       26.08       USD       804       (15,201

Taiwan Semiconductor Manufacturing Co. Ltd.

  UBS AG     66,000       01/30/19       USD       228.01       USD       14,731       (14,375

Tencent Holdings Ltd

  Goldman Sachs International     109,500       01/30/19       HKD       333.08       HKD       34,367       (94,784

Zuora, Inc., Class A

  Goldman Sachs International     30,000       01/30/19       USD       18.41       USD       544       (39,111

ASML Holding NV

  Goldman Sachs International     9,300       01/31/19       EUR       149.70       EUR       1,276       (12,158

Coupa Software, Inc.

  Citibank N.A.     10,700       01/31/19       USD       69.19       USD       673       (34,721

Xero Ltd.

  Goldman Sachs International     42,000       01/31/19       AUD       40.75       AUD       1,767       (85,319

Altium Ltd.

  Morgan Stanley & Co. International PLC     67,300       02/05/19       AUD       23.07       AUD       1,462       (44,232

Adyen NV

  Goldman Sachs International     1,500       02/06/19       EUR       478.64       EUR       707       (59,643

STMicroelectronics NV

  Goldman Sachs International     26,600       02/06/19       EUR       13.37       EUR       329       (11,121

SailPoint Technologies Holding, Inc.

  Goldman Sachs International     21,500       02/06/19       USD       25.43       USD       505       (23,955

Wirecard AG

  Goldman Sachs International     4,700       02/06/19       EUR       140.87       EUR       618       (22,260

Pluralsight, Inc.

  JPMorgan Chase Bank N.A.     22,000       02/08/19       USD       20.70       USD       518       (87,427

Bandwidth, Inc., Class A

  Barclays Bank PLC     8,400       02/11/19       USD       46.87       USD       342       (8,051

Eventbrite, Inc., Class A

  UBS AG     10,350       02/11/19       USD       30.34       USD       288       (19,013

UbiSoft Entertainment SA

  Credit Suisse International     15,700       02/12/19       EUR       72.22       EUR       1,104       (55,644

Ping An Healthcare and Technology PLC

  Morgan Stanley & Co. International PLC     118,500       02/13/19       HKD       37.02       HKD       3,262       (2,548

SOITEC SA

  Goldman Sachs International     13,000       02/13/19       EUR       53.56       EUR       657       (32,497

Zendesk, Inc.

  Credit Suisse International     16,400       02/13/19       USD       53.57       USD       957       (119,727

Altair Engineering, Inc., Class A

  Citibank N.A.     29,400       02/14/19       USD       28.78       USD       811       (59,744

IAC/InterActiveCorp

  JPMorgan Chase Bank N.A.     5,200       02/15/19       USD       186.17       USD       952       (52,730

Wirecard AG

  Goldman Sachs International     3,800       02/20/19       EUR       140.81       EUR       500       (38,583
               

 

 

 
                $ (1,736,989
               

 

 

 

Balances Reported in the Statements of Assets and Liabilities for Options Written

 

      Swap
Premium
Paid
     Swap
Premium
Received
     Unrealized
Appreciation
     Unrealized
Depreciation
     Value  

Options Written

     N/A        N/A      $ 4,240,574      $ (1,013,026    $ (4,702,879

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Liabilities — Derivative Financial Instruments

                    

Options written

                    

Options written, at value

   $      $      $ 4,702,879      $      $      $        $ 4,702,879  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

86    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments   (continued)

December 31, 2018

  

BlackRock Science and Technology Trust (BST)

 

For the period ended December 31, 2018, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Net Realized Gain (Loss) from:

                    

Options purchased(a)

   $      $      $ (11,734    $      $      $      $ (11,734

Options written

                   (4,479,530                           (4,479,530
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $      $      $ (4,491,264    $      $      $      $ (4,491,264
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

(a) Options purchased are included in net realized gain (loss) from investments.

  

Net Change in Unrealized Appreciation (Depreciation) on:                                                 

Options written

   $      $        980,623      $      $      $      $ 980,623  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Options:

        

Average value of option contracts purchased

   $ 124  

Average value of option contracts written

   $ 7,028,251  

For more information about the Trust’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

Derivative Financial Instruments — Offsetting as of Period End

The Trust’s derivative assets and liabilities (by type) are as follows:

 

      Assets        Liabilities  

Options

   $        $ 4,702,879  

Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)

              (2,965,890
  

 

 

      

 

 

 

Total derivative assets and liabilities subject to an MNA

   $        $ 1,736,989  
  

 

 

      

 

 

 

The following table presents the Trust’s derivative assets (and liabilities) by counterparty net of amounts available for offset under an MNA and net of the related collateral received (and pledged) by the Trust:

 

Counterparty    Derivative
Liabilities
Subject to
an MNA by
Counterparty
       Derivatives
Available
for Offset
       Non-cash
Collateral
Pledged
       Cash
Collateral
Pledged
 (a)
       Net Amount
of Derivative
Liabilities
  (b)
 

Barclays Bank PLC

   $ 24,630        $        $        $ (10,000      $ 14,630  

Citibank N.A.

     114,665                            (114,665         

Credit Suisse International

     199,932                                     199,932  

Deutsche Bank AG

     5,668                            (5,668         

Goldman Sachs International

     609,893                            (220,000        389,893  

JPMorgan Chase Bank N.A.

     192,828                            (120,000        72,828  

Morgan Stanley & Co. International PLC

     85,203                            (85,203         

UBS AG

     504,170                            (230,000        274,170  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
   $ 1,736,989        $        $        $ (785,536      $ 951,453  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

Excess of collateral received from the individual counterparty is not shown for financial reporting purposes.

 
  (b) 

Net amount represents the net amount payable due to counterparty in the event of default. Net amount may be offset further by the options written receivable/payable on the Statements of Assets and Liabilities.

 

 

 

SCHEDULES OF INVESTMENTS      87  


Schedule of Investments   (continued)

December 31, 2018

  

BlackRock Science and Technology Trust (BST)

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

      Level 1        Level 2        Level 3        Total  

Assets:

                 

Investments:

                 

Common Stocks:

                 

Automobiles

   $ 5,596,032        $        $        $ 5,596,032  

Communications Equipment

     3,152,414                            3,152,414  

Diversified Consumer Services

     4,473,306                            4,473,306  

Diversified Telecommunication Services

     3,413,709                            3,413,709  

Electrical Equipment

     3,789,510                            3,789,510  

Electronic Equipment, Instruments & Components

     3,538,746                            3,538,746  

Entertainment

     29,287,490          6,926,957                   36,214,447  

Health Care Technology

     3,386,028          2,380,186                   5,766,214  

Household Durables

     2,791,059                            2,791,059  

Interactive Media & Services

     53,172,718          29,687,495                   82,860,213  

Internet & Direct Marketing Retail

     54,619,765          11,757,053          211,760          66,588,578  

IT Services

     93,252,443          12,783,937                   106,036,380  

Semiconductors & Semiconductor Equipment

     37,114,557          29,392,211                   66,506,768  

Software

     152,652,516          11,106,609                   163,759,125  

Technology Hardware, Storage & Peripherals

     17,236,092                            17,236,092  

Preferred Stocks

                       15,491,176          15,491,176  

Short-Term Securities

     4,738,937                            4,738,937  
  

 

 

      

 

 

      

 

 

      

 

 

 

Subtotal

   $ 472,215,322        $ 104,034,448        $ 15,702,936        $ 591,952,706  
  

 

 

      

 

 

      

 

 

      

 

 

 

Investments Valued at NAV(a)

                    1,710,081  

Total Investments

                  $ 593,662,787  
                 

 

 

 

Derivative Financial Instruments(b)

                 

Liabilities:

                 

Equity contracts

   $ (2,643,524      $ (2,059,355      $        $ (4,702,879
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

As of December 31, 2018, certain of the Trust’s Investments were fair valued using net asset value (“NAV”) per share and have been excluded from the fair value hierarchy.

 
  (b) 

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

 

Transfers between Level 1 and Level 2 were as follows:

 

      Transfers out of
Level 1
 (a)
       Transfers Into
Level 2
 (a)
 

Assets:

       

Long-Term Investments:

       

Common Stocks

   $ (13,204,778      $ 13,204,778  
  

 

 

      

 

 

 

 

  (a) 

External pricing service used to reflect any significant market movements between the time the Trust valued such foreign securities and the earlier closing of foreign markets.

 

A reconciliation of Level 3 investments is presented when the Trust had a significant amount of Level 3 investments at the beginning and/or rend of the period in relation to net assets. The following table is a reconciliation of Level 3 investments for which significant unobservable inputs were used in determining fair value:

 

      Common Stocks        Preferred Stocks        Total  

Assets:

            

Opening Balance, as of December 31, 2017

   $        $ 14,005,465        $ 14,005,465  

Transfers into Level 3

                        

Transfers out of Level 3

                        

Accrued discounts/premiums

                        

Net realized gain (loss)

                        

Net change in unrealized appreciation (depreciation)(a)(b)

     (1,786,676        885,806          (900,870

Purchases

     1,998,436          6,492,862          8,491,298  

Sales

              (5,892,957        (5,892,957
  

 

 

      

 

 

      

 

 

 

Closing Balance, as of December 31, 2018

   $ 211,760        $ 15,491,176        $ 15,702,936  
  

 

 

      

 

 

      

 

 

 

Net change in unrealized appreciation (depreciation) on investments still held at December 31, 2018(b)

   $ (1,786,676      $ 427,110        $ 1,359,566  
  

 

 

      

 

 

      

 

 

 

 

 

88    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments   (continued)

December 31, 2018

  

BlackRock Science and Technology Trust (BST)

 

 

  (a) 

Included in the related net change in unrealized appreciation (depreciation) in the Statements of Operations.

 
  (b) 

Any difference between net change in unrealized appreciation (depreciation) and net change in unrealized appreciation (depreciation) on derivative financial instruments still held at December 31, 2018 is generally due to derivative financial instruments no longer held or categorized as Level 3 at period end.

 

The following table summarizes the valuation approaches used and unobservable inputs utilized by the BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) to determine the value of certain of the Trust’s Level 3 investments as of period end. The table does not include Level 3 investments with values based upon unadjusted third party pricing information in the amount of $1. A significant change in the third party information could result in a significantly lower or higher value of such Level 3 investments.

 

      Value        Valuation Approach        Unobservable Inputs      Range of
unobservable
Inputs Utilized
       Weighted
Avgerage of
Unobservable
Inputs
 

Assets:

                      

Common Stocks

   $ 211,759          Market        Revenue Multiple(a)        6.25x           

Preferred Stocks(b)

     15,491,176          Market        Revenue Multiple(a)        3.50x – 6.50x          4.85x  
             Recent Transactions(a)              
  

 

 

                     
   $ 15,702,935                      
  

 

 

                     

 

  (a) 

Increase in unobservable input may result in a significant increase to value, while a decrease in unobservable input may result in a significant decrease to value.

 
  (b) 

For the year ended December 31, 2018, the valuation technique for investments classified as preferred stocks amounting to $8,998,314 changed to Current Value. The investments were previously valued utilizing Transaction Price. The change was due to consideration of the information that was available at the time the investments were valued.

 

See notes to financial statements.

 

 

SCHEDULES OF INVESTMENTS      89  


Schedule of Investments  

December 31, 2018

  

BlackRock Utilities, Infrastructure & Power Opportunities Trust (BUI)

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Common Stocks — 97.2%  

Building Products — 2.0%

 

Johnson Controls International PLC(a)

    101,319     $ 3,004,108  

Kingspan Group PLC

    81,450       3,491,553  
   

 

 

 
      6,495,661  
Chemicals — 3.6%            

Air Liquide SA

    47,129       5,852,269  

Linde PLC

    35,827       5,687,308  
   

 

 

 
      11,539,577  
Electric Utilities — 37.9%            

American Electric Power Co., Inc.(a)

    96,220       7,191,483  

Duke Energy Corp.(a)

    155,468       13,416,888  

Edison International

    88,040       4,998,031  

Enel SpA

    3,107,517       18,015,033  

Eversource Energy

    80,420       5,230,517  

Exelon Corp.(a)(b)

    249,658       11,259,576  

FirstEnergy Corp.(a)

    202,980       7,621,899  

Fortis, Inc.

    144,250       4,812,180  

Iberdrola SA

    813,566       6,532,836  

NextEra Energy, Inc.(a)(b)

    172,845       30,043,918  

PG&E Corp.(c)

    139,919       3,323,076  

Pinnacle West Capital Corp.(a)

    18,224       1,552,685  

PPL Corp.(a)

    114,710       3,249,734  

Xcel Energy, Inc.

    71,400       3,517,878  
   

 

 

 
      120,765,734  
Electrical Equipment — 5.7%            

ABB Ltd., Registered Shares

    248,028       4,736,367  

Schneider Electric SE

    93,732       6,357,955  

Vestas Wind Systems A/S

    94,150       7,127,023  
   

 

 

 
      18,221,345  
Independent Power and Renewable Electricity Producers — 7.2%  

China Longyuan Power Group Corp. Ltd., Class H

    12,875,000       8,789,071  

EDP Renovaveis SA

    1,566,700       14,046,921  
   

 

 

 
      22,835,992  
Machinery — 1.0%            

Kone OYJ, Class B

    67,407       3,218,102  
   

 

 

 
Multi-Utilities — 19.1%            

CMS Energy Corp.(a)

    127,700       6,340,305  

Dominion Energy, Inc.(a)

    170,698       12,198,079  

DTE Energy Co.(a)

    46,120       5,087,036  

National Grid PLC

    1,241,374       12,144,758  

NiSource, Inc.(a)

    121,637       3,083,498  

Public Service Enterprise Group, Inc.(a)

    181,632       9,453,946  

Sempra Energy(a)

    70,350       7,611,166  

WEC Energy Group, Inc.(a)

    70,180       4,860,667  
   

 

 

 
      60,779,455  
Security   Shares     Value  
Oil, Gas & Consumable Fuels — 12.5%            

Enbridge, Inc.

    250,140     $ 7,774,351  

Energy Transfer Partners LP(a)

    104,504       1,380,498  

Enterprise Products Partners LP(a)

    130,403       3,206,610  

MPLX LP

    49,089       1,487,397  

ONEOK, Inc.(a)

    59,551       3,212,776  

Targa Resources Corp.(a)

    32,880       1,184,337  

TransCanada Corp.

    253,150       9,039,747  

Williams Cos., Inc.(a)

    574,655       12,671,143  
   

 

 

 
      39,956,859  
Semiconductors & Semiconductor Equipment — 2.1%            

Infineon Technologies AG

    173,279       3,469,334  

Texas Instruments, Inc.(a)

    34,070       3,219,615  
   

 

 

 
      6,688,949  
Transportation Infrastructure — 6.1%            

Atlantia SpA

    314,940       6,517,723  

Getlink SE, Registered Shares

    287,850       3,867,940  

Transurban Group

    1,112,890       9,134,077  
   

 

 

 
      19,519,740  
   

 

 

 

Total Long-Term Investments — 97.2%
(Cost — $265,857,568)

      310,021,414  
   

 

 

 

Short-Term Securities — 3.1%

   

BlackRock Liquidity Funds, T-Fund, Institutional Class, 2.32%(d)(e)

    9,797,799       9,797,799  
   

 

 

 

Total Short-Term Securities — 3.1%
(Cost — $9,797,799)

      9,797,799  
   

 

 

 

Total Investments Before Options Written — 100.3%
(Cost — $275,655,367)

      319,819,213  
   

 

 

 

Options Written — (0.4)%
(Premiums Received — $2,458,109)

      (1,262,643
   

 

 

 

Total Investments, Net of Options Written — 99.9%
(Cost — $273,197,258)

      318,556,570  

Other Assets Less Liabilities — 0.1%

      376,692  
   

 

 

 

Net Assets — 100.0%

    $ 318,933,262  
   

 

 

 

 

(a) 

All or a portion of the security has been pledged and/or segregated as collateral in connection with outstanding exchange-traded options written.

(b) 

All or a portion of the security has been pledged as collateral in connection with outstanding OTC derivatives.

(c) 

Non-income producing security.

(d) 

Annualized 7-day yield as of period end.

 
(e) 

During the year ended December 31, 2018, investments in issuers considered to be an affiliate of the Trust for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate    Shares
Held at
12/31/17
     Net
Activity
     Shares
Held at
12/31/18
     Value at
12/31/18
     Income      Net
Realized
Gain (Loss)
 (a)
     Change in
Unrealized
Appreciation
(Depreciation)
 

BlackRock Liquidity Funds, T-Fund, Institutional Class

     6,376,831        3,420,968        9,797,799      $ 9,797,799      $ 83,607      $      $  
           

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes net capital gain distributions, if applicable.

 

 

 

90    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Utilities, Infrastructure & Power Opportunities Trust (BUI)

 

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

Derivative Financial Instruments Outstanding as of Period End

Exchange-Traded Options Written

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call                                                   

American Electric Power Co., Inc.

     336          01/02/19        USD     78.50        USD     2,511        $ (2

Dominion Energy, Inc.

     544          01/02/19        USD     76.50        USD     3,887           

Duke Energy Corp.

     550          01/02/19        USD     90.00        USD     4,747          (25

NextEra Energy, Inc.

     300          01/02/19        USD     176.00        USD     5,215          (7,691

Pinnacle West Capital Corp.

     182          01/02/19        USD     91.00        USD     1,551           

Sempra Energy

     350          01/02/19        USD     115.25        USD     3,787           

Public Service Enterprise Group, Inc.

     363          01/03/19        USD     54.75        USD     1,889          (46

Energy Transfer Partners LP

     52          01/04/19        USD     15.00        USD     69          (260

Williams Cos., Inc.

     47          01/04/19        USD     25.50        USD     104          (235

Williams Cos., Inc.

     145          01/04/19        USD     27.25        USD     320           

Enterprise Products Partners LP

     23          01/11/19        USD     27.00        USD     57          (230

FirstEnergy Corp.

     37          01/11/19        USD     39.23        USD     139          (361

Williams Cos., Inc.

     32          01/11/19        USD     26.00        USD     71          (672

Williams Cos., Inc.

     74          01/11/19        USD     25.01        USD     163          (10

Williams Cos., Inc.

     47          01/11/19        USD     25.18        USD     104          (5

American Electric Power Co., Inc.

     210          01/18/19        USD     80.00        USD     1,570          (3,150

DTE Energy Co.

     161          01/18/19        USD     120.00        USD     1,776          (3,220

Dominion Energy, Inc.

     618          01/18/19        USD     75.00        USD     4,416          (26,265

Duke Energy Corp.

     272          01/18/19        USD     87.50        USD     2,347          (31,280

Enterprise Products Partners LP

     46          01/18/19        USD     28.20        USD     113          (12

Eversource Energy

     142          01/18/19        USD     70.00        USD     924          (4,260

Exelon Corp.

     303          01/18/19        USD     46.00        USD     1,367          (14,393

FirstEnergy Corp.

     112          01/18/19        USD     39.00        USD     421          (2,800

FirstEnergy Corp.

     96          01/18/19        USD     40.00        USD     360          (960

Fortis, Inc.

     250          01/18/19        USD     35.00        USD     834          (2,500

MPLX LP

     41          01/18/19        USD     34.00        USD     124          (307

MPLX LP

     130          01/18/19        USD     32.00        USD     394          (3,900

NextEra Energy, Inc.

     479          01/18/19        USD     180.00        USD     8,326          (50,295

NiSource, Inc.

     185          01/18/19        USD     26.00        USD     469          (6,938

ONEOK, Inc.

     104          01/18/19        USD     62.50        USD     561          (2,080

PPL Corp.

     201          01/18/19        USD     32.00        USD     569          (1,005

Public Service Enterprise Group, Inc.

     250          01/18/19        USD     55.00        USD     1,301          (3,125

Sempra Energy

     20          01/18/19        USD     115.00        USD     216          (850

Targa Resources Corp.

     115          01/18/19        USD     39.00        USD     414          (4,888

TransCanada Corp.

     443          01/18/19        CAD     54.00        CAD     2,160          (2,434

WEC Energy Group, Inc.

     122          01/18/19        USD     70.00        USD     845          (13,115

Williams Cos., Inc.

     135          01/18/19        USD     26.00        USD     298          (473

Williams Cos., Inc.

     73          01/18/19        USD     25.00        USD     161          (365

Energy Transfer Partners LP

     156          01/25/19        USD     13.50        USD     206          (7,020

Enterprise Products Partners LP

     35          01/25/19        USD     27.00        USD     86          (525

FirstEnergy Corp.

     141          01/25/19        USD     39.27        USD     529          (3,599

ONEOK, Inc.

     104          01/25/19        USD     61.00        USD     561          (3,640

Texas Instruments, Inc.

     60          01/25/19        USD     97.50        USD     567          (15,660

Williams Cos., Inc.

     343          01/25/19        USD     25.00        USD     756          (2,230

Williams Cos., Inc.

     33          01/25/19        USD     26.02        USD     73          (251

PPL Corp.

     200          01/29/19        USD     29.05        USD     567          (10,353

WEC Energy Group, Inc.

     123          01/29/19        USD     72.46        USD     852          (6,613

CMS Energy Corp.

     446          01/31/19        USD     51.50        USD     2,214          (24,552

Duke Energy Corp.

     80          01/31/19        USD     91.00        USD     690          (4,117

FirstEnergy Corp.

     73          01/31/19        USD     38.25        USD     274          (4,665

NextEra Energy, Inc.

     180          01/31/19        USD     178.00        USD     3,129          (40,487

Energy Transfer Partners LP

     156          02/01/19        USD     13.50        USD     206          (8,502

Enterprise Products Partners LP

     318          02/01/19        USD     26.00        USD     782          (6,360

FirstEnergy Corp.

     37          02/01/19        USD     39.93        USD     139          (792

Texas Instruments, Inc.

     60          02/01/19        USD     97.50        USD     567          (17,460

 

 

SCHEDULES OF INVESTMENTS      91  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Utilities, Infrastructure & Power Opportunities Trust (BUI)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call                                                   

Johnson Controls International PLC

     177          02/08/19        USD     34.00        USD     525        $ (1,656

FirstEnergy Corp.

     141          02/11/19        USD     38.20        USD     529          (11,522

FirstEnergy Corp.

     73          02/11/19        USD     38.25        USD     274          (4,689

Eversource Energy

     139          02/15/19        USD     68.00        USD     904          (11,036

Johnson Controls International PLC

     89          02/15/19        USD     32.00        USD     264          (4,539

Williams Cos., Inc.

     228          02/15/19        USD     26.00        USD     503          (5,586

Williams Cos., Inc.

     343          02/15/19        USD     25.00        USD     756          (8,061

Williams Cos., Inc.

     510          02/15/19        USD     24.00        USD     1,125          (18,870

Williams Cos., Inc.

     1          02/15/19        USD     22.00        USD     2          (110

Johnson Controls International PLC

     88          02/22/19        USD     33.00        USD     261          (2,755
                          

 

 

 
                           $ (413,802
                          

 

 

 

OTC Options Written

 

Description    Counterparty    Number of
Contracts
     Expiration
Date
     Exercise
Price
     Notional
Amount (000)
     Value  
Call                                                

Exelon Corp.

   Bank of America N.A.      65,000        01/02/19      USD     46.75      USD     2,932      $ (60

NiSource, Inc.

   Citibank N.A.      42,000        01/02/19      USD     26.75      USD     1,065        (82

Public Service Enterprise Group, Inc.

   Barclays Bank PLC      45,000        01/02/19      USD     53.5      USD     2,342        (655

EDP Renovaveis SA

   UBS AG      40,000        01/03/19      EUR     7.93      EUR     313        (1,415

Schneider Electric SE

   Barclays Bank PLC      5,900        01/04/19      EUR     65.58      EUR     349        (1

Sempra Energy

   Citibank N.A.      10,100        01/04/19      USD     116.01      USD     1,093        (30

Enterprise Products Partners LP

   Bank of America N.A.      3,400        01/08/19      USD     27.16      USD     84        (3

Exelon Corp.

   JPMorgan Chase Bank N.A.      24,000        01/08/19      USD     46.13      USD     1,082        (4,482

Atlantia SpA

   Goldman Sachs International      78,500        01/09/19      EUR     18.38      EUR     1,418        (16,398

China Longyuan Power Group Corp. Ltd., Class H

   Citibank N.A.      1,267,000        01/09/19      HKD     6.18      HKD     6,778        (55

EDP Renovaveis SA

   Citibank N.A.      25,000        01/09/19      EUR     7.97      EUR     196        (441

EDP Renovaveis SA

   UBS AG      40,000        01/09/19      EUR     7.97      EUR     313        (717

Infineon Technologies AG

   Morgan Stanley & Co. International PLC      23,100        01/09/19      EUR     18.28      EUR     404        (5,087

Enel SpA

   Credit Suisse International      729,200        01/10/19      EUR     4.75      EUR     3,690        (269,348

National Grid PLC

   Credit Suisse International      193,900        01/10/19      GBP     8.55      GBP     1,489        (761

Transurban Group

   Citibank N.A.      147,100        01/11/19      AUD     11.72      AUD     1,714        (11,818

Enbridge, Inc.

   Barclays Bank PLC      61,500        01/15/19      USD     32.99      USD     1,911        (7,266

Xcel Energy, Inc.

   Citibank N.A.      24,900        01/15/19      USD     49.98      USD     1,227        (12,912

EDP Renovaveis SA

   Morgan Stanley & Co. International PLC      40,000        01/16/19      EUR     7.97      EUR     313        (3,143

Getlink SE

   Goldman Sachs International      53,300        01/16/19      EUR     11.66      EUR     625        (16,869

Linde PLC

   Goldman Sachs International      9,200        01/16/19      EUR     142.81      EUR     1,275        (18,066

Kingspan Group PLC

   UBS AG      25,200        01/17/19      EUR     40.41      EUR     943        (5,325

Schneider Electric SE

   Goldman Sachs International      5,900        01/17/19      EUR     65.60      EUR     349        (362

China Longyuan Power Group Corp. Ltd., Class H

   JPMorgan Chase Bank N.A.      1,074,000        01/23/19      HKD     6.13      HKD     5,746        (2,581

EDP Renovaveis SA

   Credit Suisse International      25,000        01/23/19      EUR     7.82      EUR     196        (4,030

Enel SpA

   Goldman Sachs International      158,500        01/24/19      EUR     4.97      EUR     802        (17,738

Iberdrola SA

   Credit Suisse International      38,100        01/24/19      EUR     6.90      EUR     267        (6,570

National Grid PLC

   Goldman Sachs International      106,100        01/24/19      GBP     8.53      GBP     815        (3,952

Vestas Wind Systems A/S

   Goldman Sachs International      33,000        01/24/19      DKK     515.62      DKK     16,279        (33,926

EDP Renovaveis SA

   Credit Suisse International      30,000        01/25/19      EUR     7.84      EUR     235        (4,825

EDP Renovaveis SA

   UBS AG      30,000        01/25/19      EUR     7.84      EUR     235        (4,829

Air Liquide SA

   Goldman Sachs International      3,300        01/29/19      EUR     107.41      EUR     358        (12,943

Air Liquide SA

   Goldman Sachs International      7,900        01/29/19      EUR     108.56      EUR     856        (20,865

EDP Renovaveis SA

   Credit Suisse International      40,000        01/29/19      EUR     7.69      EUR     313        (10,701

EDP Renovaveis SA

   Credit Suisse International      25,000        01/29/19      EUR     7.82      EUR     196        (4,610

Infineon Technologies AG

   Goldman Sachs International      23,500        01/29/19      EUR     18.77      EUR     411        (9,035

Kone OYJ, Class B

   Goldman Sachs International      13,300        01/29/19      EUR     43.17      EUR     554        (8,351

Iberdrola SA

   Morgan Stanley & Co. International PLC      36,000        01/30/19      EUR     7.00      EUR     252        (4,215

ABB Ltd., Registered Shares

   Morgan Stanley & Co. International PLC      54,100        01/31/19      CHF     20.22      CHF     1,015        (4,220

EDP Renovaveis SA

   Credit Suisse International      30,000        01/31/19      EUR     7.84      EUR     235        (5,199

Enel SpA

   UBS AG      200,000        01/31/19      EUR     5.14      EUR     1,012        (7,999

Exelon Corp.

   Bank of America N.A.      10,000        01/31/19      USD     46.76      USD     451        (4,233

Fortis, Inc.

   Barclays Bank PLC      25,400        01/31/19      USD     35.02      USD     847        (4,383

 

 

92    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Utilities, Infrastructure & Power Opportunities Trust (BUI)

 

OTC Options Written (continued)

 

Description    Counterparty    Number of
Contracts
     Expiration
Date
     Exercise
Price
     Notional
Amount (000)
     Value  
Call (continued)                                                    

Suncor Energy, Inc.

   UBS AG      15,100        01/31/19        EUR       62.83        EUR       894      $ (11,041

TransCanada Corp.

   Deutsche Bank AG      22,200        01/31/19        CAD       51.91        CAD       1,082        (3,628

EDP Renovaveis SA

   Credit Suisse International      20,000        02/05/19        EUR       7.70        EUR       157        (5,557

National Grid PLC

   Credit Suisse International      134,400        02/05/19        GBP       8.61        GBP       1,032        (7,429

Atlantia SpA

   Credit Suisse International      60,400        02/06/19        EUR       18.11        EUR       1,091        (31,652

Getlink SE

   Citibank N.A.      47,500        02/06/19        EUR       12.13        EUR       557        (9,595

Infineon Technologies AG

   Goldman Sachs International      14,000        02/06/19        EUR       18.58        EUR       245        (8,511

Kone OYJ, Class B

   Goldman Sachs International      13,300        02/06/19        EUR       43.17        EUR       554        (10,064

Suncor Energy, Inc.

   UBS AG      5,900        02/06/19        EUR       61.95        EUR       349        (6,674

Enbridge, Inc.

   Citibank N.A.      26,000        02/11/19        USD       32.60        USD       808        (15,722

EDP Renovaveis SA

   Credit Suisse International      20,000        02/12/19        EUR       7.87        EUR       157        (3,873

ABB Ltd., Registered Shares

   Credit Suisse International      32,700        02/13/19        CHF       19.56        CHF       614        (9,284

Air Liquide SA

   Credit Suisse International      5,200        02/13/19        EUR       108.01        EUR       564        (18,286

China Longyuan Power Group Corp. Ltd., Class H

   JPMorgan Chase Bank N.A.      1,310,000        02/13/19        HKD       5.61        HKD       7,009        (26,907

China Longyuan Power Group Corp. Ltd., Class H

   JPMorgan Chase Bank N.A.      855,000        02/13/19        HKD       5.51        HKD       4,574        (21,943

Iberdrola SA

   UBS AG      210,600        02/13/19        EUR       7.07        EUR       1,476        (25,500

Kingspan Group PLC

   UBS AG      3,300        02/13/19        EUR       37.07        EUR       123        (7,960

Linde PLC

   Credit Suisse International      3,300        02/13/19        EUR       140.01        EUR       457        (20,757

TransCanada Corp.

   UBS AG      242,400        02/13/19        AUD       11.73        AUD       2,824        (38,057

NiSource, Inc.

   Barclays Bank PLC      18,500        02/14/19        USD       26.45        USD       469        (11,689

EDP Renovaveis SA

   Goldman Sachs International      20,000        02/20/19        EUR       7.87        EUR       157        (4,211
                     

 

 

 
                      $ (848,841
                     

 

 

 

Balances Reported in the Statements of Assets and Liabilities for Options Written

 

      Swap
Premium
Paid
     Swap
Premium
Received
     Unrealized
Appreciation
     Unrealized
Depreciation
     Value  

Options Written

     N/A        N/A      $ 1,469,017      $ (273,551    $ (1,262,643

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Liabilities — Derivative Financial Instruments

                    

Options written

                    

Options written, at value

   $      $      $ 1,262,643      $      $      $      $ 1,262,643  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

For the year ended December 31, 2018, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Net Realized Gain (Loss) from:

                    

Options purchased(a)

   $      $      $ (713    $      $      $      $ (713

Options written

                   (250,333                           (250,333
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $      $      $ (251,046    $      $      $      $ (251,046
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Options purchased are included in net realized gain (loss) from investments.

 

 

Net Change in Unrealized Appreciation (Depreciation) on:                                                 

Options purchased(a)

   $      $      $ (547    $      $      $      $ (547

Options written

                   463,238                             463,238  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $      $      $ 462,691      $      $      $      $ 462,691  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes options purchased at value as reported in the Schedule of Investments.

 

 

 

SCHEDULES OF INVESTMENTS      93  


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Utilities, Infrastructure & Power Opportunities Trust (BUI)

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Options:

        

Average value of option contracts purchased

   $ (a)  

Average value of option contracts written

   $ 2,340,666  

 

  (a) 

Derivative not held at quarter-end. The risk expoure table serves as an indicator of activity during the period.

 

For more information about the Trust’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

Derivative Financial Instruments — Offsetting as of Period End

The Trust’s derivative asset and liabilities (by type) are as follows:

 

      Assets        Liabilities  

Derivative Financial Instruments

       

Options

   $        $ 1,262,643  

Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)

              (413,802
  

 

 

      

 

 

 

Total derivative assets and liabilities subject to an MNA

   $        $ 848,841  
  

 

 

      

 

 

 

The following table presents the Trust’s derivative assets (and liabilities) by counterparty net of amounts available for offset under an MNA and net of the related collateral received (and pledged) by the Trust:

 

Counterparty    Derivative
Liabilities
Subject to
an MNA by
Counterparty
       Derivatives
Available
for Offset
       Non-cash
Collateral
Pledged
 (a)
       Cash
Collateral
Pledged
       Net Amount
of Derivative
Liabilities
  (b)
 

Bank of America N.A.

   $ 4,296        $        $        $        $ 4,296  

Barclays Bank PLC

     23,994                   (2,661                 21,333  

Citibank N.A.

     50,655                   (50,655                  

Credit Suisse International

     402,882                   (402,882                  

Deutsche Bank AG

     3,628                                     3,628  

Goldman Sachs International

     181,291                                     181,291  

JPMorgan Chase Bank N.A.

     55,913                   (55,913                  

Morgan Stanley & Co. International PLC

     16,665                   (16,665                  

UBS AG

     109,517               (109,517              
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
   $ 848,841        $        $ (638,293      $        $ 210,548  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

Excess of collateral pledged to the individual counterparty is not shown for financial reporting purposes.

 
  (b) 

Net amount represents the net amount payable due to counterparty in the event of default. Net amount may be offset further by the options written receivable/payable on the Statements of Assets and Liabilities.

 

 

 

94    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

December 31, 2018

  

BlackRock Utilities, Infrastructure & Power Opportunities Trust (BUI)

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

      Level 1        Level 2        Level 3        Total  

Assets:

                 

Investments:

                 

Common Stocks:

                 

Building Products

   $ 3,004,108        $ 3,491,553        $        $ 6,495,661  

Chemicals

     5,687,308          5,852,269                   11,539,577  

Electric Utilities

     96,217,865          24,547,869                   120,765,734  

Electrical Equipment

              18,221,345                   18,221,345  

Independent Power and Renewable Electricity Producers

              22,835,992                   22,835,992  

Machinery

              3,218,102                   3,218,102  

Multi-Utilities

     48,634,697          12,144,758                   60,779,455  

Oil, Gas & Consumable Fuels

     39,956,859                            39,956,859  

Semiconductors & Semiconductor Equipment

     3,219,615          3,469,334                   6,688,949  

Transportation Infrastructure

              19,519,740                   19,519,740  

Short-Term Securities

     9,797,799                            9,797,799  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ 206,518,251        $ 113,300,962        $        $ 319,819,213  
  

 

 

      

 

 

      

 

 

      

 

 

 

Derivative Financial Instruments(a)

                 

Liabilities:

                 

Equity contracts

   $ (278,563      $ (984,080      $        $ (1,262,643
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

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

 

Transfers between Level 1 and Level 2 were as follows:

 

      Transfers out
of Level 1
 (a)
       Transfers into
Level 2
 (a)
 

Assets:

       

Long-Term Investments:

       

Common Stocks

   $ 19,523,912        $ 19,523,912  
  

 

 

      

 

 

 

 

  (a) 

External pricing service used to reflect any significant market movements between the time the Trust valued such foreign securities and the earlier closing of foreign markets.

 

See notes to financial statements.

 

 

SCHEDULES OF INVESTMENTS      95  


Statements of Assets and Liabilities

December 31, 2018

 

     BGR     CII      BDJ      BOE     BGY  

ASSETS

           

Investments at value — unaffiliated(a)

  $ 353,876,843     $ 673,859,119      $ 1,603,681,857      $ 734,460,465     $ 594,427,744  

Investments at value — affiliated(b)

    5,006,975       14,789,354        44,526,058        19,702,446       25,489,943  

Cash

          45,145        43,458               

Cash pledged:

           

Collateral — options written

                        2,785,000       4,136,000  

Collateral — OTC derivatives

                              201,000  

Foreign currency at value(c)

    6,459              1,544        605,135       805,970  

Receivables:

           

Dividends — unaffiliated

    616,588       874,433        2,054,113        3,288,960       3,215,587  

Dividends — affiliated

    9,034       13,859        81,995        11,118        

Investments sold

                 675,095               

Prepaid expenses

          7,383        7,012        528        
 

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Total assets

    359,515,899       689,589,293        1,651,071,132        760,853,652       628,276,244  
 

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

LIABILITIES

           

Bank overdraft

    23,035                            

Options written at value(d)

    1,051,873       3,567,851        9,021,122        3,609,231       2,991,651  

Payables:

           

Trustees’ and Officer’s fees

    448,935       191,886        890,083        644,735       557,865  

Investment advisory fees

    331,773       499,475        1,137,213        541,843       483,214  

Income dividend distributions

    168,843       211,125        327,147        196,726       199,228  

Other accrued expenses

    100,866       95,350        247,186        174,240       142,952  

Capital shares redeemed

                        1,085,316       666,884  

Investments purchased

          10,946,660        1,211,873               
 

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Total liabilities

    2,125,325       15,512,347        12,834,624        6,252,091       5,041,794  
 

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

NET ASSETS

  $ 357,390,574     $ 674,076,946      $ 1,638,236,508      $ 754,601,561     $ 623,234,450  
 

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

NET ASSETS CONSIST OF

           

Paid-in capital

  $ 579,907,704       577,671,748      $ 1,320,628,954      $ 822,989,040     $ 673,322,419  

Accumulated earnings (loss)

    (222,517,130     96,405,198        317,607,554        (68,387,479     (50,087,969
 

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

NET ASSETS

  $ 357,390,574     $ 674,076,946      $ 1,638,236,508      $ 754,601,561     $ 623,234,450  
 

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Net asset value(e)(f)

  $ 11.98     $ 15.28      $ 8.74      $ 11.07     $ 5.79  
 

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

(a) Investments at cost — unaffiliated

  $ 409,332,240     $ 578,317,081      $ 1,404,953,813      $ 801,861,897     $ 662,351,547  

(b) Investments at cost — affiliated

  $ 5,006,975     $ 14,789,354      $ 44,526,058      $ 19,702,446     $ 25,489,943  

(c) Foreign currency at cost

  $ 6,476     $      $ 1,656      $ 608,474     $ 804,969  

(d) Premiums received

  $ 3,557,927     $ 8,128,325      $ 22,402,546      $ 7,395,565     $ 5,889,810  

(e) Shares outstanding, unlimited number of shares authorized, $0.001 par value

    29,825,326              187,542,405        68,183,726       107,706,596  

(f)  Shares outstanding, 200 million shares authorized, $0.10 par value

          44,121,400                      

See notes to financial statements.

 

 

96    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Statements of Assets and Liabilities  (continued)

December 31, 2018

 

     BME      BCX(a)     BST      BUI  

ASSETS

         

Investments at value — unaffiliated(b)(c)

  $ 328,602,596      $ 788,938,343     $ 587,213,769      $ 310,021,414  

Investments at value — affiliated(d)

    25,972,185        13,928,859       6,449,018        9,797,799  

Cash

           43,980       21,377         

Cash pledged:

      

Collateral — options written

                 1,160,000         

Foreign currency at value(e)

    288        201,317       1,920        57  

Receivables:

         

Dividends — unaffiliated

    304,993        1,696,089       40,287        874,335  

Dividends — affiliated

    47,051        36,090       19,929        10,991  

Investments sold

                         

Capital shares sold

    485,404                      

Securities lending income — affiliated

    77        2,048       3,998         

Deferred offering costs

    72,887                      
 

 

 

    

 

 

   

 

 

    

 

 

 

Total assets

    355,485,481        804,846,726       594,910,298        320,704,596  
 

 

 

    

 

 

   

 

 

    

 

 

 

LIABILITIES

         

Cash collateral on securities loaned at value

    4,675        273,985       1,710,283         

Bank overdraft

                        126,775  

Options written at value(f)

    1,418,657        3,911,872       4,702,879        1,262,643  

Payables:

         

Trustees’ and Officer’s fees

    26,831        298,779       16,598        7,666  

Investment advisory fees

    302,862        690,418       404,629        268,900  

Income dividend distributions

           202,084               

Other accrued expenses

    104,896        173,671       168,224        105,350  

Capital shares redeemed

           833,693               

Investments purchased

    928,582                      

Options written

           180,565               

Offering costs

    24,000                      
 

 

 

    

 

 

   

 

 

    

 

 

 

Total liabilities

    2,810,503        6,565,067       7,002,613        1,771,334  
 

 

 

    

 

 

   

 

 

    

 

 

 

NET ASSETS

  $ 352,674,978      $ 798,281,659     $ 587,907,685      $ 318,933,262  
 

 

 

    

 

 

   

 

 

    

 

 

 

NET ASSETS CONSIST OF

         

Paid-in capital

  $ 252,975,053      $ 1,222,624,533     $ 346,251,639      $ 282,463,770  

Accumulated earnings (loss)

    99,699,925        (424,342,874     241,656,046        36,469,492  
 

 

 

    

 

 

   

 

 

    

 

 

 

NET ASSETS

  $ 352,674,978      $ 798,281,659     $ 587,907,685      $ 318,933,262  
 

 

 

    

 

 

   

 

 

    

 

 

 

Net asset value(g)

  $ 35.87      $ 8.44     $ 26.21      $ 18.77  
 

 

 

    

 

 

   

 

 

    

 

 

 

(a) Consolidated Statement of Assets and Liabilities

      

(b) Investments at cost — unaffiliated

  $ 227,730,187      $ 799,134,020     $ 368,513,355      $ 265,857,568  

(c) Securities loaned at value

  $ 4,492      $ 218,010     $ 1,629,459      $  

(d) Investments at cost — affiliated

  $ 25,972,185      $ 13,928,888     $ 6,449,185      $ 9,797,799  

(e) Foreign currency at cost

  $ 290      $ 201,278     $ 2,008      $ 77  

(f)  Premiums received

  $ 2,535,639      $ 8,168,042     $ 7,930,427      $ 2,458,109  

(g) Shares outstanding, unlimited number of shares authorized, $0.001 par value

    9,831,018        94,545,128       22,431,578        16,987,292  

See notes to financial statements.

 

 

FINANCIAL STATEMENTS      97  


Statements of Operations

Year Ended December 31, 2018

 

     BGR     CII     BDJ     BOE     BGY  

INVESTMENT INCOME

         

Dividends — unaffiliated

  $ 14,416,043     $ 14,354,718     $ 50,036,765 (a)     $ 30,503,574     $ 27,100,164 (a)  

Dividends — affiliated

    78,939       80,954       262,280       99,772       103,479  

Securities lending income — affiliated — net

          13,698       822              

Foreign taxes withheld

    (960,071     (120,998     (1,023,986     (1,466,611     (2,006,460
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total investment income

    13,534,911       14,328,372       49,275,881       29,136,735       25,197,183  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EXPENSES

         

Investment advisory

    5,392,331       6,415,332       14,604,116       8,418,841       7,052,295  

Professional

    87,174       97,421       188,388       135,370       122,581  

Transfer agent

    82,536       64,283       201,168       124,970       109,112  

Custodian

    58,761       20,560       188,831       116,747       105,684  

Accounting services

    39,492       34,519       89,484       54,484       44,508  

Printing

    13,432       10,127       21,408       13,730       16,075  

Registration

    11,521       17,044       72,446       26,662       42,167  

Trustees and Officer

          50,517       60,332             694  

Rating agency

    4,833       4,833       4,833       4,833       4,833  

Miscellaneous

    118,554       49,937       107,001       162,299       160,061  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

    5,808,634       6,764,573       15,538,007       9,057,936       7,658,010  

Less

         

Fees waived and/or reimbursed by the Manager

    (677,220     (3,200     (9,782     (1,155,343     (709,713
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

    5,131,414       6,761,373       15,528,225       7,902,593       6,948,297  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

    8,403,497       7,566,999       33,747,656       21,234,142       18,248,886  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

REALIZED AND UNREALIZED GAIN (LOSS)

         

Net realized gain (loss) from:

         

Investments — unaffiliated

    9,776,298       35,499,497       136,758,768       1,990,590       82,423,024 (b)  

Investments — affiliated

          (97     (51            

Foreign currency transactions

    (57,169     (4,456     (53,910     106,169       (154,102

Payments from affiliates

                6,782 (c)             243,859 (c)  

Options written

    (5,634,691     (368,218     (5,219,539     (1,712,691     2,536,527  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    4,084,438       35,126,726       131,492,050       384,068       85,049,308  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net change in unrealized appreciation (depreciation) on:

         

Investments — unaffiliated

    (105,235,675     (89,764,592     (307,843,866     (116,551,084 )(d)      (195,741,687 )(d) 

Investments — affiliated

                             

Foreign currency translations

    (6,247           (3,245     (69,241     (79,306

Options written

    6,855,978       6,586,567       17,485,572       3,709,364       1,313,824  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    (98,385,944     (83,178,025     (290,361,539     (112,910,961     (194,507,169
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net realized and unrealized gain (loss)

    (94,301,506     (48,051,299     (158,869,489     (112,526,893     (109,457,861
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS

  $ (85,898,009   $ (40,484,300   $ (125,121,833   $ (91,292,751   $ (91,208,975
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) 

Including non-recurring dividends.

(b) 

Net of $ (211,516) foreign capital gain tax.

(c) 

Includes payments from affiliates of $6,782 and $243,859, respectively to compensate for a trade operating event.

(d) 

Including $(12,332) and $(116,814) unrealized foreign capital gain tax.

See notes to financial statements.

 

 

98    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Statements of Operations  (continued)

Year Ended December 31, 2018

 

     BME     BCX(a)     BST     BUI  

INVESTMENT INCOME

       

Dividends — unaffiliated

  $ 4,389,432     $ 31,737,544     $ 2,895,390     $ 12,515,728  

Dividends — affiliated

    215,966       186,529       182,611       83,607  

Securities lending income — affiliated — net

    1,757       16,485       159,000        

Interest — unaffiliated

          1,319,958              

Foreign taxes withheld

    (72,294     (2,137,343     (152,303     (537,751
 

 

 

   

 

 

   

 

 

   

 

 

 

Total investment income

    4,534,861       31,123,173       3,084,698       12,061,584  
 

 

 

   

 

 

   

 

 

   

 

 

 

EXPENSES

       

Investment advisory

    3,505,218       9,563,661       6,742,741       3,398,053  

Professional

    104,767       136,192       129,651       96,522  

Transfer agent

    51,238       125,610       80,633       55,226  

Custodian

    101,788       125,585       174,093       51,690  

Accounting services

    24,499       54,484       44,508       44,508  

Printing

    14,632       16,885       17,913       13,092  

Registration

    11,772       37,324       9,423       12,040  

Directors and Officer

    30,925       54,257       66,460       31,728  

Rating agency

    4,833       19,583       4,833       19,583  

Miscellaneous

    38,391       223,770       93,785       78,226  
 

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

    3,888,063       10,357,351       7,364,040       3,800,668  

Less

       

Fees waived and/or reimbursed by the Manager

    (8,521     (7,702     (1,355,178     (88,356
 

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed and paid indirectly

    3,879,542       10,349,649       6,008,862       3,712,312  
 

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)

    655,319       20,773,524       (2,924,164     8,349,272  
 

 

 

   

 

 

   

 

 

   

 

 

 

REALIZED AND UNREALIZED GAIN (LOSS)

       

Net realized gain (loss) from:

       

Investments — unaffiliated

    27,352,423       43,431,253       70,235,655       6,930,616  

Investments — affiliated

    1             (842      

Foreign currency transactions

    (4,179     319,704       (11,769     (92,102

Payment from affiliate

                       

Options written

    (4,052,692     (1,950,043     (4,479,530     (250,333
 

 

 

   

 

 

   

 

 

   

 

 

 
    23,295,553       41,800,914       65,743,514       6,588,181  
 

 

 

   

 

 

   

 

 

   

 

 

 

Net change in unrealized appreciation (depreciation) on:

       

Investments — unaffiliated

    (2,420,630     (227,844,890     (58,583,503     (30,538,052

Investments — affiliated

    7       10       2        

Foreign currency translations

    (1,186     (10,270     (583     (12,398

Options written

    912,695       12,466,021       980,623       463,238  
 

 

 

   

 

 

   

 

 

   

 

 

 
    (1,509,114     (215,389,129     (57,603,461     (30,087,212
 

 

 

   

 

 

   

 

 

   

 

 

 

Net realized and unrealized gain (loss)

    21,786,439       (173,588,215     8,140,053       (23,499,031
 

 

 

   

 

 

   

 

 

   

 

 

 

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

  $ 22,441,758     $ (152,814,691   $ 5,215,889     $ (15,149,759
 

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) 

Consolidated Statement of Operations.

See notes to financial statements.

 

 

FINANCIAL STATEMENTS      99  


Statements of Changes in Net Assets

 

    BGR           CII  
    Year Ended December 31,           Year Ended December 31,  
     2018     2017            2018     2017  

INCREASE (DECREASE) IN NET ASSETS

         

OPERATIONS

         

Net investment income

  $ 8,403,497     $ 12,016,029       $ 7,566,999     $ 6,643,909  

Net realized gain

    4,084,438       240,009         35,126,726       10,582,824  

Net change in unrealized appreciation (depreciation)

    (98,385,944     (484,738       (83,178,025     119,853,112  
 

 

 

   

 

 

     

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

    (85,898,009     11,771,300         (40,484,300     137,079,845  
 

 

 

   

 

 

     

 

 

   

 

 

 

DISTRIBUTIONS TO SHAREHOLDERS(a)(b)

         

From net investment income and net realized gain

    (8,135,490     (12,093,542       (19,927,105     (6,682,172

From return of capital

    (19,637,853     (15,679,802       (23,911,918     (37,156,851
 

 

 

   

 

 

     

 

 

   

 

 

 

Decrease in net assets resulting from distributions to shareholders

    (27,773,343     (27,773,344       (43,839,023     (43,839,023
 

 

 

   

 

 

     

 

 

   

 

 

 

NET ASSETS(b)

         

Total increase (decrease) in net assets

    (113,671,352     (16,002,044       (84,323,323     93,240,822  

Beginning of year

    471,061,926       487,063,970         758,400,269       665,159,447  
 

 

 

   

 

 

     

 

 

   

 

 

 

End of year

  $ 357,390,574     $ 471,061,926       $ 674,076,946     $ 758,400,269  
 

 

 

   

 

 

     

 

 

   

 

 

 

 

(a) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(b) 

Prior year distribution character information and undistributed (distributions in excess of) net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information.

See notes to financial statements.

 

 

100    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Statements of Changes in Net Assets  (continued)

 

    BDJ           BOE  
    Year Ended December 31,           Year Ended December 31,  
     2018     2017            2018     2017  

INCREASE (DECREASE) IN NET ASSETS

         

OPERATIONS

         

Net investment income

  $ 33,747,656     $ 30,942,206       $ 21,234,142     $ 11,728,245  

Net realized gain

    131,492,050       191,391,199         384,068       188,939,188  

Net change in unrealized appreciation (depreciation)

    (290,361,539     22,107,356         (112,910,961     (54,178,546
 

 

 

   

 

 

     

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

    (125,121,833     244,440,761         (91,292,751     146,488,887  
 

 

 

   

 

 

     

 

 

   

 

 

 

DISTRIBUTIONS TO SHAREHOLDERS(a)(b)

         

From net investment income and net realized gain

    (105,098,764     (105,360,386       (56,899,700     (157,730,436

From return of capital

                  (1,381,549      

Decrease in net assets resulting from distributions to shareholders

    (105,098,764     (105,360,386       (58,281,249     (157,730,436
 

 

 

   

 

 

     

 

 

   

 

 

 

CAPITAL SHARE TRANSACTIONS

         

Redemption of shares resulting from share repurchase program (including transaction costs)

          (12,272,105       (7,051,296     (7,428,758
 

 

 

   

 

 

     

 

 

   

 

 

 

NET ASSETS(b)

         

Total increase (decrease) in net assets

    (230,220,597     126,808,270         (156,625,296     (18,670,307

Beginning of year

    1,868,457,105       1,741,648,835         911,226,857       929,897,164  
 

 

 

   

 

 

     

 

 

   

 

 

 

End of year

  $ 1,638,236,508     $ 1,868,457,105       $ 754,601,561     $ 911,226,857  
 

 

 

   

 

 

     

 

 

   

 

 

 

 

(a) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(b) 

Prior year distribution character information and distributions in excess of net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information.

See notes to financial statements.

 

 

FINANCIAL STATEMENTS      101  


Statements of Changes in Net Assets  (continued)

 

    BGY           BME  
    Year Ended December 31,           Year Ended December 31,  
     2018     2017            2018     2017  

INCREASE (DECREASE) IN NET ASSETS

         

OPERATIONS

         

Net investment income

  $ 18,248,886     $ 9,657,720       $ 655,319     $ 184,052  

Net realized gain

    85,049,308       20,853,143         23,295,553       16,290,255  

Net change in unrealized appreciation (depreciation)

    (194,507,169     104,149,768         (1,509,114     43,865,227  
 

 

 

   

 

 

     

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

    (91,208,975     134,660,631         22,441,758       60,339,534  
 

 

 

   

 

 

     

 

 

   

 

 

 

DISTRIBUTIONS TO SHAREHOLDERS(a)(b)

         

From net investment income and net realized gain

    (48,308,022     (9,780,974       (22,690,477     (19,381,806

From return of capital

          (40,102,438             (2,234,310

Decrease in net assets resulting from distributions to shareholders

    (48,308,022     (49,883,412       (22,690,477     (21,616,116
 

 

 

   

 

 

     

 

 

   

 

 

 

CAPITAL SHARE TRANSACTIONS

         

Proceeds from the issuance of shares (including deferred offering costs)

                  19,980,202       20,787,792  

Reinvestment of common distributions

                  1,085,098       1,653,765  

Redemption of shares resulting from share repurchase program (including transaction costs)

    (6,926,639     (5,726,813              
 

 

 

   

 

 

     

 

 

   

 

 

 

Net increase in net assets derived from capital share transactions

    (6,926,639     (5,726,813       21,065,300       22,441,557  
 

 

 

   

 

 

     

 

 

   

 

 

 

NET ASSETS(b)

         

Total increase (decrease) in net assets

    (146,443,636     79,050,406         20,816,581       61,164,975  

Beginning of year

    769,678,086       690,627,680         331,858,397       270,693,422  
 

 

 

   

 

 

     

 

 

   

 

 

 

End of year

  $ 623,234,450     $ 769,678,086       $ 352,674,978     $ 331,858,397  
 

 

 

   

 

 

     

 

 

   

 

 

 

 

(a) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(b) 

Prior year distribution character information and undistributed distributions in excess of net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information.

See notes to financial statements.

 

 

102    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Statements of Changes in Net Assets  (continued)

 

    BCX(a)           BST  
    Year Ended December 31,           Year Ended December 31,  
     2018     2017            2018     2017  

INCREASE (DECREASE) IN NET ASSETS

         

OPERATIONS

         

Net investment income

  $ 20,773,524     $ 19,831,605       $ (2,924,164   $ (1,073,646

Net realized gain

    41,800,914       40,599,529         65,743,514       18,280,612  

Net change in unrealized appreciation (depreciation)

    (215,389,129     71,294,123         (57,603,461     182,129,520  
 

 

 

   

 

 

     

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

    (152,814,691     131,725,257         5,215,889       199,336,486  
 

 

 

   

 

 

     

 

 

   

 

 

 

DISTRIBUTIONS TO SHAREHOLDERS(b)(c)

         

From net investment income and net realized gain

    (17,715,545     (23,004,937       (39,423,699     (6,142,466

From return of capital

    (41,596,743     (36,309,489             (22,536,962
 

 

 

   

 

 

     

 

 

   

 

 

 

Decrease in net assets resulting from distributions to shareholders

    (59,312,288     (59,314,426       (39,423,699     (28,679,428
 

 

 

   

 

 

     

 

 

   

 

 

 

CAPITAL SHARE TRANSACTIONS

         

Proceeds from the issuance of shares (including deferred offering costs)

                        (2,799,570

Reinvestment of common distributions

                  1,815,026        

Redemption of shares resulting from share repurchase program (including transaction costs)

    (17,063,427     (21,837,878              
 

 

 

   

 

 

     

 

 

   

 

 

 

Net decrease in net assets derived from capital share transactions

    (17,063,427     (21,837,878       1,815,026       (2,799,570
 

 

 

   

 

 

     

 

 

   

 

 

 

NET ASSETS(c)

         

Total increase (decrease) in net assets

    (229,190,406     50,572,953         (32,392,784     167,857,488  

Beginning of year

    1,027,472,065       976,899,112         620,300,469       452,442,981  
 

 

 

   

 

 

     

 

 

   

 

 

 

End of year

  $ 798,281,659     $ 1,027,472,065       $ 587,907,685     $ 620,300,469  
 

 

 

   

 

 

     

 

 

   

 

 

 

 

(a) 

Consolidated Statements of Changes in Net Assets.

(b) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(c) 

Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information.

See notes to financial statements.

 

 

FINANCIAL STATEMENTS      103  


Statements of Changes in Net Assets  (continued)

 

    BUI  
    Year Ended December 31,  
     2018     2017  

INCREASE (DECREASE) IN NET ASSETS

   

OPERATIONS

   

Net investment income

  $ 8,349,272     $ 9,484,921  

Net realized gain

    6,588,181       20,594,890  

Net change in unrealized appreciation (depreciation)

    (30,087,212     23,259,316  
 

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

    (15,149,759     53,339,127  
 

 

 

   

 

 

 

DISTRIBUTIONS TO SHAREHOLDERS (a)(b)

   

From net investment income and net realized gain

    (24,524,104     (24,568,104

From return of capital

    (98,239      
 

 

 

   

 

 

 

Decrease in net assets resulting from distributions to shareholders

    (24,622,343     (24,568,104
 

 

 

   

 

 

 

CAPITAL SHARE TRANSACTIONS

   

Reinvestment of common distributions

    928,907       708,672  
 

 

 

   

 

 

 

NET ASSETS(b)

   

Total increase (decrease) in net assets

    (38,843,195     29,479,695  

Beginning of year

    357,776,457       328,296,762  
 

 

 

   

 

 

 

End of year

  $ 318,933,262     $ 357,776,457  
 

 

 

   

 

 

 

 

(a) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(b) 

Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information.

See notes to financial statements.

 

 

104    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Statements of Cash Flows

Year Ended December 31, 2018

 

     BGR     CII     BDJ     BOE     BGY  

CASH PROVIDED BY OPERATING ACTIVITIES

         

Net increase (decrease) in net assets resulting from operations

  $ (85,898,009   $ (40,484,300   $ (125,121,833   $ (91,292,751   $ (91,208,975

Adjustments to reconcile net decrease in net assets resulting from operations to net cash provided by (used for) operating activities:

         

Proceeds from sales of long-term investments

    171,601,891       242,568,042       729,991,418       286,591,506       476,163,578  

Purchases of long-term investments

    (145,174,257     (194,539,187     (617,126,603     (232,972,642     (420,602,594

Net sales (purchases) of short-term securities

    (1,136,131     (11,646,380     (39,558,869     (6,583,922     (20,416,244

Premiums received from options written

    28,131,515       67,945,813       159,250,256       53,306,284       41,899,588  

Premiums paid on closing options written

    (33,647,521     (67,802,100     (161,054,284     (54,630,511     (39,605,509

Net realized gain (loss) on investments and options written

    (4,141,591     (34,960,385     (131,402,132     173,573       (84,850,416

Net unrealized depreciation on investments, options written and foreign currency translations

    98,379,697       83,178,025       290,358,294       112,841,720       194,427,863  
(Increase) Decrease in Assets:                              

Receivables:

         

Dividends — affiliated

    (4,970     (9,656     (76,789     25,901       3,871  

Dividends

    (228,741     (254,558     119,694       (106,322     (843,148

Prepaid expenses

    14,129       24,911       50,084       30,308       23,798  
Increase (Decrease) in Liabilities:                              

Payables:

         

Investment advisory fees

    (76,682     (47,189     (130,181     (182,470     (99,204

Other affiliates

          (76,934                  

Deferred foreign capital gain tax

                      (12,332     (116,814

Trustees’ and Officer’s

    (66,975     (7,519     (104,936     (102,735     (87,412

Other accrued expenses

    (1,569     (57,908     (64,202     (68,883     (81,781
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

    27,750,786       43,830,675       105,129,917       67,016,724       54,606,601  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

CASH (USED FOR) FINANCING ACTIVITIES

         

Payments on redemption of Common Shares

                      (5,965,980     (6,259,755

Cash dividends paid to Common Shareholders

    (27,769,421     (43,860,530     (105,103,264     (61,350,010     (48,337,227

Increase in bank overdraft

    11,259                          
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used for financing activities

    (27,758,162     (43,860,530     (105,103,264     (67,315,990     (54,596,982
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

CASH IMPACT FROM FOREIGN EXCHANGE FLUCTUATIONS

         

Cash impact from foreign exchange fluctuations

  $ (18   $     $ (92   $ (1,980   $ (1,132
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

CASH AND FOREIGN CURRENCY

         

Net increase (decrease) in restricted and unrestricted cash and foreign currency

    (7,394     (29,855     26,561       (301,246     8,487  

Restricted and unrestricted cash and foreign currency at value at beginning of year

    13,853       75,000       18,441       3,691,381       5,134,483  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Restricted and unrestricted cash and foreign currency at value at end of year

  $ 6,459     $ 45,145     $ 45,002     $ 3,390,135     $ 5,142,970  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

         

NON-CASH FINANCING ACTIVITIES AND FOREIGN CURRENCY

         

Capital shares issued in reinvestment of distributions paid to Common Shareholders

                             
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

RECONCILIATION OF RESTRICTED AND UNRESTRICTED CASH AND FOREIGN CURRENCY AT THE END OF YEAR TO THE STATEMENTS OF ASSETS AND LIABILITIES

         

Cash

          45,145       43,458              

Cash pledged:

         

Collateral — options written

                      2,785,000       4,136,000  

Collateral — OTC derivatives

                            201,000  

Foreign currency at value

    6,459             1,544       605,135       805,970  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  $ 6,459     $ 45,145     $ 45,002     $ 3,390,135     $ 5,142,970  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

RECONCILIATION OF RESTRICTED AND UNRESTRICTED CASH AND FOREIGN CURRENCY AT THE BEGINNING OF YEAR TO THE STATEMENTS OF ASSETS AND LIABILITIES

         

Cash

                            20,583  

Cash pledged:

         

Collateral — reverse repurchase agreements

                      2,970,000       2,350,000  

Collateral — OTC derivatives

          75,000       16,000       20,000       2,118,000  

Foreign currency at value

    13,853             2,441       701,381       645,900  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  $ 13,853     $ 75,000     $ 18,441     $ 3,691,381     $ 5,134,483  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See notes to financial statements.

 

 

FINANCIAL STATEMENTS      105  


Statements of Cash Flows  (continued)

Year Ended December 31, 2018

 

     BME     BCX (a)     BST     BUI  

CASH PROVIDED BY OPERATING ACTIVITIES

       

Net increase (decrease) in net assets resulting from operations

  $ 22,441,758     $ (152,814,691   $ 5,215,889     $ (15,149,759

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used for) operating activities:

       

Proceeds from sales of long-term investments

    143,471,951       682,143,625       399,637,873       112,519,900  

Purchases of long-term investments

    (126,851,914     (627,902,668     (357,980,027     (94,003,140

Net proceeds from sales (purchases) of short-term securities

    (11,549,866     2,715,884       1,743,983       (3,420,968

Premiums received from options written

    24,217,348       68,298,149       72,847,560       16,405,866  

Premiums paid on closing options written

    (27,946,066     (69,794,912     (73,282,407     (16,083,059

Net realized gain (loss) on investments and options written

    (23,014,330     (41,391,019     (67,674,682     (6,731,008

Net unrealized depreciation on investments, options written and foreign currency translations

    1,507,928       215,375,441       57,602,878       30,074,814  
(Increase) Decrease in Assets:                        

Receivables:

       

Dividends — affiliated

    (33,651     (20,578     (15,119     (5,798

Dividends

    (63,099     247,622       70,233       642  

Prepaid expenses

    10,177       30,783       19,266       18,644  

Securities lending income — affiliated

    540       (1,763     33,595        

Deferred offering costs

    8,455                    
Increase (Decrease) in Liabilities:                        

Collateral on securities loaned at value

    (116,225     (211,358     (1,786,946      

Payables:

       

Investment advisory fees

    21,902       (156,191     (16,192     (28,775

Trustees’ and Officer’s

    (1,379     (59,670     3,222       (507

Other accrued expenses

    (53,173     (61,192     (2,329     (30,087
 

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

    2,050,356       76,397,462       36,416,797       23,566,765  
 

 

 

   

 

 

   

 

 

   

 

 

 

CASH (USED FOR) FINANCING ACTIVITIES

       

Proceeds from issuance of Common Shares

    19,540,372                    

Payments on redemption of Common Shares

          (16,940,963            

Payments for offering costs

    24,000                    

Cash dividends paid to Common Shareholders

    (21,605,379     (59,317,390     (37,754,053     (23,693,436

Increase (decrease) in bank overdraft

    (10,013                 126,671  
 

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used for financing activities

    (2,051,020     (76,258,353     (37,754,053     (23,566,765
 

 

 

   

 

 

   

 

 

   

 

 

 

CASH IMPACT FROM FOREIGN EXCHANGE FLUCTUATIONS

       

Cash impact from foreign exchange fluctuations

  $ (7   $ 39     $ (98   $ (3
 

 

 

   

 

 

   

 

 

   

 

 

 

CASH AND FOREIGN CURRENCY

       

Net increase (decrease) in restricted and unrestricted cash and foreign currency

    (671     139,148       (1,337,354     (3

Restricted and unrestricted cash and foreign currency at value at beginning of year

    959       106,149       2,520,651       60  
 

 

 

   

 

 

   

 

 

   

 

 

 

Restricted and unrestricted cash and foreign currency at value at end of year

  $ 288     $ 245,297     $ 1,183,297     $ 57  
 

 

 

   

 

 

   

 

 

   

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

       

NON-CASH FINANCING ACTIVITIES AND FOREIGN CURRENCY

       

Capital shares issued in reinvestment of distributions paid to Common Shareholders

    1,085,098             1,815,026       928,907  
 

 

 

   

 

 

   

 

 

   

 

 

 

RECONCILIATION OF RESTRICTED AND UNRESTRICTED CASH AND FOREIGN CURRENCY AT THE END OF YEAR TO THE STATEMENTS OF ASSETS AND LIABILITIES

       

Cash

          43,980       21,377        

Cash pledged:

       

Collateral — OTC derivatives

                1,160,000        

Foreign currency at value

    288       201,317       1,920       57  
 

 

 

   

 

 

   

 

 

   

 

 

 
  $ 288     $ 245,297     $ 1,183,297     $ 57  
 

 

 

   

 

 

   

 

 

   

 

 

 

RECONCILIATION OF RESTRICTED AND UNRESTRICTED CASH AND FOREIGN CURRENCY AT THE BEGINNING OF YEAR TO THE STATEMENTS OF ASSETS AND LIABILITIES

       

Cash

          94,925              

Cash pledged:

       

Collateral — OTC derivatives

                2,520,000        

Foreign currency at value

    959       11,224       651       60  
 

 

 

   

 

 

   

 

 

   

 

 

 
  $ 959     $ 106,149     $ 2,520,651     $ 60  
 

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) 

Consolidated Statement of Cash Flows

See notes to financial statements.

 

 

106    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Financial Highlights

(For a share outstanding throughout each period)

 

    BGR  
    Year Ended December 31,      

 

     Period from
11/01/14 to
12/31/14
    Year Ended
October 31,
2014
 
    2018      2017     2016      2015  
               

Net asset value, beginning of period

  $ 15.79      $ 16.33     $ 14.05      $ 21.15        $ 24.90     $ 30.12  
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Net investment income(a)

    0.28        0.40 (b)       0.27        0.29          0.07       0.25  

Net realized and unrealized gain (loss)

    (3.16      (0.01     3.01        (5.89        (2.41     (1.21
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Net increase (decrease) from investment operations

    (2.88      0.39       3.28        (5.60        (2.34     (0.96
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 
Distributions(c)                                             

From net investment income

    (0.27      (0.40     (0.27      (0.29        (0.47     (0.44

From net realized gain

                                 (0.94     (3.82

From return of capital

    (0.66      (0.53     (0.73      (1.21               
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Total distributions

    (0.93      (0.93     (1.00      (1.50        (1.41     (4.26
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Net asset value, end of period

  $ 11.98      $ 15.79     $ 16.33      $ 14.05        $ 21.15     $ 24.90  
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Market price, end of period

  $ 10.45      $ 14.18     $ 14.44      $ 12.53        $ 19.95     $ 23.78  
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Total Return(d)

 

Based on net asset value

    (18.84 )%       3.49     25.07      (27.47 )%         (9.06 )%(e)      (2.36 )% 
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Based on market price

    (21.16 )%       5.11     24.01      (31.42 )%         (10.18 )%(e)      4.73
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Ratios to Average Net Assets

 

Total expenses

    1.29      1.31     1.31      1.29        1.30 %(f)      1.26
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

    1.14      1.18     1.24      1.26        1.26 %(f)      1.26
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Net investment income

    1.87      2.69 %(b)      1.80      1.60        1.82 %(f)      0.89
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Supplemental Data

 

Net assets, end of period (000)

  $ 357,391      $ 471,062     $ 487,064      $ 418,981        $ 629,603     $ 741,109  
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Portfolio turnover rate

    32      24     33      56        4     85
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

 

(a)

Based on average shares outstanding.

(b)

Net investment income per share and the ratio of net investment income to average net assets include $0.15 per share and 0.99%, respectively, resulting from a special dividend from BakerHughes, Inc. in July 2017.

(c)

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(d)

Total 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 distributions at actual reinvestment prices.

(e)

Aggregate total return.

(f)

Annualized.

See notes to financial statements.

 

 

FINANCIAL HIGHLIGHTS      107  


Financial Highlights  (continued)

(For a share outstanding throughout each period)

 

    CII  
    Year Ended December 31,      

 

     Period from
11/01/14 to
12/31/14
    Year Ended
October 31,
2014
 
    2018      2017      2016      2015  
               

Net asset value, beginning of period

  $ 17.19      $ 15.08      $ 15.11      $ 15.67        $ 15.47     $ 15.31  
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Net investment income(a)

    0.17        0.15        0.13        0.11          0.04       0.55  

Net realized and unrealized gain (loss)

    (1.09      2.95        0.99        0.53          0.36       0.91  
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Net increase (decrease) from investment operations

    (0.92      3.10        1.12        0.64          0.40       1.46  
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 
Distributions(b)                                              

From net investment income

    (0.45      (0.15      (0.13      (0.14        (0.10     (0.65

From net realized gain

                  (0.04      (1.06               

From return of capital

    (0.54      (0.84      (0.98               (0.10     (0.65
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Total distributions

    (0.99      (0.99      (1.15      (1.20        (0.20     (1.30
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Net asset value, end of period

  $ 15.28      $ 17.19      $ 15.08      $ 15.11        $ 15.67     $ 15.47  
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Market price, end of period

  $ 14.08      $ 16.38      $ 13.71      $ 14.14        $ 13.97     $ 14.89  
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Total Return(c)

 

Based on net asset value

    (5.44 )%       21.69      8.66      4.66        2.69 %(d)      10.49
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Based on market price

    (8.56 )%       27.54      5.56      9.86        (4.88 )%(d)      20.43
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Ratios to Average Net Assets

 

Total expenses

    0.90      0.93      0.95      0.94        0.99 %(e)      0.93
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

    0.90      0.93      0.95      0.94        0.95 %(e)      0.93
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Net investment income

    1.00      0.94      0.89      0.71        1.42 %(e)      3.56
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Supplemental Data

 

Net assets, end of period (000)

  $ 674,077      $ 758,400      $ 665,159      $ 666,492        $ 691,380     $ 682,485  
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Portfolio turnover rate

    27      32      54      133        2     80
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

 

(a)

Based on average shares outstanding.

(b)

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(c)

Total 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 distributions at actual reinvestment prices.

(d)

Aggregate total return.

(e)

Annualized.

See notes to financial statements.

 

 

108    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Financial Highlights  (continued)

(For a share outstanding throughout each period)

 

    BDJ  
    Year Ended December 31,      

 

     Period from
11/01/14 to
12/31/14
    Year Ended
October 31,
2014
 
    2018     2017      2016      2015  
               

Net asset value, beginning of period

  $ 9.96     $ 9.22      $ 8.70      $ 9.24        $ 9.19     $ 8.88  
 

 

 

   

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Net investment income(a)

    0.18 (b)       0.16        0.17        0.17          0.04       0.16  

Net realized and unrealized gain (loss)

    (0.84     1.14        0.91        (0.15        0.10       0.76  
 

 

 

   

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Net increase (decrease) from investment operations

    (0.66     1.30        1.08        0.02          0.14       0.92  
 

 

 

   

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 
Distributions(c)                                             

From net investment income

    (0.56     (0.17      (0.17      (0.17        (0.03     (0.17

From net realized gain

          (0.39                             

From return of capital

                 (0.39      (0.39        (0.06     (0.44
 

 

 

   

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Total distributions

    (0.56     (0.56      (0.56      (0.56        (0.09     (0.61
 

 

 

   

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Net asset value, end of period

  $ 8.74     $ 9.96      $ 9.22      $ 8.70        $ 9.24     $ 9.19  
 

 

 

   

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Market price, end of period

  $ 7.77     $ 9.23      $ 8.15      $ 7.61        $ 8.12     $ 8.35  
 

 

 

   

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Total Return(d)

 

Based on net asset value

    (6.59 )%      15.06      13.90      1.10        1.69 %(e)      11.40
 

 

 

   

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Based on market price

    (10.39 )%      20.63      15.11      0.63        (1.65 )%(e)      16.42
 

 

 

   

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Ratios to Average Net Assets

 

Total expenses

    0.85     0.86      0.87      0.86        0.87 %(f)      0.87 %(g) 
 

 

 

   

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

    0.85     0.86      0.85      0.85        0.84 %(f)      0.86 %(g) 
 

 

 

   

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Net investment income

    1.85 %(b)      1.73      1.91      1.85        2.30 %(f)      1.81
 

 

 

   

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Supplemental Data

 

Net assets, end of period (000)

  $ 1,638,237     $ 1,868,457      $ 1,741,649      $ 1,643,508        $ 1,747,070     $ 1,648,683  
 

 

 

   

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Portfolio turnover rate

    34     42      33      26        0 %(h)      63
 

 

 

   

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

 

(a)

Based on average Common Shares outstanding.

(b)

Net investment income per share and the ratio of net investment income to average net assets includes $0.01 per share and 0.14%, respectively, resulting from a special dividend.

(c)

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(d)

Total 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 distributions at actual reinvestment prices.

(e)

Aggregate total return.

(f)

Annualized.

(g)

Includes reorganization costs associated with the Trust’s merger. Without these costs, total expenses and total expenses after fees waived and/or reimbursed would have been 0.86% and 0.86%, respectively.

(h)

Amount is less than 0.5%

See notes to financial statements.

 

 

FINANCIAL HIGHLIGHTS      109  


Financial Highlights  (continued)

(For a share outstanding throughout each period)

 

    BOE  
    Year Ended December 31,      

 

     Period from
11/01/14 to
12/31/14
    Year Ended
October 31,
2014
 
    2018      2017     2016      2015  
               

Net asset value, beginning of period

  $ 13.22      $ 13.38     $ 14.25      $ 15.27        $ 15.54     $ 16.68  
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Net investment income(a)

    0.31        0.17       0.15        0.11          0.00 (b)       0.14  

Net realized and unrealized gain (loss)

    (1.61      1.96       0.03        0.03          (0.07     0.07  
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Net increase (decrease) from investment operations

    (1.30      2.13       0.18        0.14          (0.07     0.21  
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 
Distributions(c)                                             

From net investment income

    (0.83      (0.19     (0.10      (0.17              (0.17

In excess of net investment income(d)

                        (0.10              (0.28

From net realized gain

           (2.10                            

From return of capital

    (0.02            (0.95      (0.89        (0.20     (0.90
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Total distributions

    (0.85      (2.29     (1.05      (1.16        (0.20     (1.35
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Net asset value, end of period

  $ 11.07      $ 13.22     $ 13.38      $ 14.25        $ 15.27     $ 15.54  
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Market price, end of period

  $ 9.37      $ 12.51     $ 11.57      $ 12.76        $ 13.13     $ 14.00  
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Total Return(e)

 

Based on net asset value

    (9.63 )%       17.22 %(f)      2.62      1.81        (0.27 )%(g)      2.10
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Based on market price

    (19.16 )%       28.28     (0.90 )%       6.03        (4.82 )%(g)      4.09
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Ratios to Average Net Assets

 

Total expenses

    1.08      1.09 %(h)      1.10      1.08 %(h)         1.10 %(i)      1.08
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

    0.94      1.02 %(h)      1.05      1.05 %(h)         1.07 %(i)      1.08
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Net investment income

    2.52      1.20 %(h)      1.15      0.73 %(h)         0.00 %(i)(j)      0.83
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Supplemental Data

 

Net assets, end of period (000)

  $ 754,602      $ 911,227     $ 929,897      $ 990,318        $ 1,060,687     $ 1,079,862  
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Portfolio turnover rate

    28      133     64      72        16     150
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

 

(a)

Based on average shares outstanding.

(b)

Amount is less than $0.005 per share.

(c)

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(d)

Taxable distribution.

(e)

Total 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 distributions at actual reinvestment prices.

(f)

Includes payment received from an affiliate, which had no impact on the Trust’s total return.

(g)

Aggregate total return.

(h)

Excludes expenses incurred indirectly as a result of investments in underlying funds of 0.01%.

(i)

Annualized.

(j)

Amount is less than 0.005%.

See notes to financial statements.

 

 

110    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Financial Highlights  (continued)

(For a share outstanding throughout each period)

 

    BGY  
    Year Ended December 31,      

 

     Period from
11/01/14 to
12/31/14
    Year Ended
October 31,
2014
 
    2018     2017     2016      2015  
               

Net asset value, beginning of period

  $ 7.06     $ 6.28     $ 6.95      $ 7.61        $ 7.89     $ 9.05  
 

 

 

   

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Net investment income (loss)(a)

    0.17 (b)       0.09       0.09        0.08          (0.00 ) (c)      0.10  

Net realized and unrealized gain (loss)

    (1.00     1.15       (0.24      (0.15        (0.17     (0.53
 

 

 

   

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Net increase (decrease) from investment operations

    (0.83     1.24       (0.15      (0.07        (0.17     (0.43
 

 

 

   

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 
Distributions(d)                                            

From net investment income

    (0.44     (0.09     (0.07      (0.11              (0.13

In excess of net investment income(e)

                                      (0.08

From return of capital

          (0.37     (0.45      (0.48        (0.11     (0.52
 

 

 

   

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Total distributions

    (0.44     (0.46     (0.52      (0.59        (0.11     (0.73
 

 

 

   

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Net asset value, end of period

  $ 5.79     $ 7.06     $ 6.28      $ 6.95        $ 7.61     $ 7.89  
 

 

 

   

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Market price, end of period

  $ 4.98     $ 6.52     $ 5.51      $ 6.24        $ 6.74     $ 7.26  
 

 

 

   

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Total Return(f)

 

Based on net asset value

    (11.48 )%      20.88 %(g)      (1.12 )%       (0.47 )%         (2.10 )%(h)      (4.49 )% 
 

 

 

   

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Based on market price

    (17.55 )%      27.23     (3.37 )%       0.90        (5.77 )%(h)      (2.29 )% 
 

 

 

   

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Ratios to Average Net Assets

 

Total expenses(i)

    1.09     1.12     1.12      1.09        1.12 %(j)      1.10
 

 

 

   

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed(i)

    0.99     1.02     1.02      1.01        1.03 %(j)      1.05
 

 

 

   

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Net investment income (loss)(i)

    2.59 %(b)      1.31     1.41      1.09        (0.13 )%(j)      1.17
 

 

 

   

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Supplemental Data

 

Net assets, end of period (000)

  $ 623,234     $ 769,678     $ 690,628      $ 764,154        $ 836,552     $ 867,986  
 

 

 

   

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Portfolio turnover rate

    60     90     74      67        14     195
 

 

 

   

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

 

(a)

Based on average shares outstanding.

(b)

Net investment loss per share and ratio of net investment loss to average net assets include $0.01 per share and 0.10%, respectively, resulting from a special dividend.

(c)

Amount is greater than $(0.005) per share.

(d)

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(e)

Taxable distribution.

(f)

Total 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 distributions at actual reinvestment prices.

(g)

Includes payment received from an affiliate, which had no impact on the Trust’s total return.

(h)

Aggregate total return.

(i)

Excludes expenses incurred indirectly as a result of investments in underlying funds as follows:

 

    Year Ended December 31          

Period from

11/01/14 to

12/31/14

         

Year Ended
October 31,

2014

       
    2018           2017           2016           2015              

Investments in underlying funds

                  0.02             0.01             0.01                         —                        
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

   

 

(j)

Annualized.

See notes to financial statements.

 

 

FINANCIAL HIGHLIGHTS      111  


Financial Highlights  (continued)

(For a share outstanding throughout each period)

 

    BME  
    Year Ended December 31,      

 

     Period from
11/01/14 to
12/31/14
   

Year Ended

October 31,
2014

 
    2018      2017      2016     2015  
               

Net asset value, beginning of period

  $ 35.69      $ 31.30      $ 36.19     $ 38.61        $ 40.22     $ 34.92  
 

 

 

    

 

 

    

 

 

   

 

 

      

 

 

   

 

 

 

Net investment income (loss)(a)

    0.07        0.02        0.02       (0.06        (0.01     (0.00 )(b) 

Net realized and unrealized gain (loss)

    2.51        6.77        (1.91     4.34          1.10       9.14  
 

 

 

    

 

 

    

 

 

   

 

 

      

 

 

   

 

 

 

Net increase (decrease) from investment operations

    2.58        6.79        (1.89     4.28          1.09       9.14  
 

 

 

    

 

 

    

 

 

   

 

 

      

 

 

   

 

 

 
Distributions(c)                                             

From net investment income

    (2.40      (0.04      (0.03     (0.63        (0.01     (0.10

From net realized gain

           (2.11      (2.97     (6.07        (2.69     (3.74

From return of capital

           (0.25                            
 

 

 

    

 

 

    

 

 

   

 

 

      

 

 

   

 

 

 

Total distributions

    (2.40      (2.40      (3.00     (6.70        (2.70     (3.84
 

 

 

    

 

 

    

 

 

   

 

 

      

 

 

   

 

 

 

Net asset value, end of period

  $ 35.87      $ 35.69      $ 31.30     $ 36.19        $ 38.61     $ 40.22  
 

 

 

    

 

 

    

 

 

   

 

 

      

 

 

   

 

 

 

Market price, end of period

  $ 36.45      $ 36.50      $ 31.75     $ 39.35        $ 42.70     $ 41.37  
 

 

 

    

 

 

    

 

 

   

 

 

      

 

 

   

 

 

 

Total Return(d)

 

Based on net asset value

    7.26      22.17      (5.36 )%      10.70        2.38 %(e)      28.00
 

 

 

    

 

 

    

 

 

   

 

 

      

 

 

   

 

 

 

Based on market price

    6.57      23.17      (11.71 )%      8.87        10.07 %(e)      36.99
 

 

 

    

 

 

    

 

 

   

 

 

      

 

 

   

 

 

 

Ratios to Average Net Assets(f)

 

Total expenses

    1.11      1.12      1.15 %(g)      1.13        1.16 %(h)      1.11
 

 

 

    

 

 

    

 

 

   

 

 

      

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed and excluding amortization of offering costs

    1.11      1.12      1.14     1.12        1.11 %(h)      1.11
 

 

 

    

 

 

    

 

 

   

 

 

      

 

 

   

 

 

 

Net investment income (loss)

    0.19      0.06      0.07     (0.14 )%         (0.10 )%(h)      (0.01 )% 
 

 

 

    

 

 

    

 

 

   

 

 

      

 

 

   

 

 

 

Supplemental Data

 

Net assets, end of period (000)

  $ 352,675      $ 331,858      $ 270,693     $ 297,530        $ 303,103     $ 313,933  
 

 

 

    

 

 

    

 

 

   

 

 

      

 

 

   

 

 

 

Portfolio turnover rate

    37      38      59     68        6     74
 

 

 

    

 

 

    

 

 

   

 

 

      

 

 

   

 

 

 

 

(a)

Based on average shares outstanding.

(b)

Amount is greater than $(0.005) per share.

(c)

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(d)

Total 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 distributions at actual reinvestment prices.

(e)

Aggregate total return.

(f)

Excludes expenses incurred indirectly as a result of investments in underlying funds as follows:

 

    Year Ended December 31           Period from
11/01/14 to
12/31/14
         

Year Ended
October 31,

2014

       
    2018           2017           2016           2015              

Investments in underlying funds

    0.01             0.01                                                 —                    
 

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

   

 

(g)

Offering costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 1.16%.

(h)

Annualized.

See notes to financial statements.

 

 

112    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Financial Highlights  (continued)

(For a share outstanding throughout each period)

 

    BCX  
    Year Ended December 31,      

 

     Period from
11/01/14 to
12/31/14
    Year Ended
October 31,
2014
 
    2018      2017     2016      2015  
               

Net asset value, beginning of period

  $ 10.64      $ 9.86     $ 8.35      $ 11.67        $ 12.50     $ 13.54  
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Net investment income(a)

    0.22        0.20 (b)       0.14        0.25          0.04       0.23  

Net realized and unrealized gain (loss)

    (1.80      1.19       1.95        (2.76        (0.72     (0.27
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Net increase (decrease) from investment operations

    (1.58      1.39       2.09        (2.51        (0.68     (0.04
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 
Distributions(c)                                             

From net investment income

    (0.19      (0.24     (0.15      (0.25        (0.02     (0.31

From return of capital

    (0.43      (0.37     (0.43      (0.56        (0.13     (0.69
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Total distributions

    (0.62      (0.61     (0.58      (0.81        (0.15     (1.00
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Net asset value, end of period

  $ 8.44      $ 10.64     $ 9.86      $ 8.35        $ 11.67     $ 12.50  
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Market price, end of period

  $ 7.06      $ 9.77     $ 8.27      $ 7.11        $ 9.71     $ 10.78  
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Total Return(d)

 

Based on net asset value

    (14.90 )%       15.60     27.41      (21.31 )%         (5.20 )%(e)      0.61
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Based on market price

    (22.47 )%       26.55     25.50      (19.47 )%         (8.53 )%(e)      0.58
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Ratios to Average Net Assets

 

Total expenses

    1.08      1.08     1.08      1.07        1.15 %(f)      1.35 %(g) 
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

    1.08      1.08     1.08      1.07        1.04 %(f)      1.06 %(g) 
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Net investment income

    2.17      2.06 %(b)      1.61      2.43        2.01 %(f)      1.70 %(g) 
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Supplemental Data

 

Net assets, end of period (000)

  $ 798,282      $ 1,027,472     $ 976,899      $ 827,040        $ 1,156,499     $ 582,220  
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

Portfolio turnover rate

    66      73     101      74        2     62
 

 

 

    

 

 

   

 

 

    

 

 

      

 

 

   

 

 

 

 

(a)

Based on average shares outstanding.

(b)

Net investment income per share and the ratio of net investment income to average net assets include less than $0.04 per share and 0.39% respectively, resulting from a special dividend from Baker Hughes Inc. in July 2017.

(c)

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(d)

Total 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 distributions at actual reinvestment prices.

(e)

Aggregate total return.

(f)

Annualized.

(g)

Includes reorganization costs associated with the Trust’s merger. Without these costs, total expenses and total expenses after fees waived and/or reimbursed would have been 1.26% and 1.06%, respectively.

See notes to financial statements.

 

 

FINANCIAL HIGHLIGHTS      113  


Financial Highlights  (continued)

(For a share outstanding throughout each period)

 

    BST  
    Year Ended December 31,      

 

   

Period from
October 30, 2014 (a)

to December 31,
2014

 
    2018      2017      2016      2015  
             

Net asset value, beginning of period

  $ 27.73      $ 20.10      $ 19.70      $ 19.43       $ 19.10 (b)  
 

 

 

    

 

 

    

 

 

    

 

 

     

 

 

 

Net investment income (loss)(c)

    (0.13      (0.05      0.00 (d)        0.03         (0.01

Net realized and unrealized gain

    0.37        8.96        1.60        1.44         0.48  
 

 

 

    

 

 

    

 

 

    

 

 

     

 

 

 

Net increase (decrease) from investment operations

    0.24        8.91        1.60        1.47         0.47  
 

 

 

    

 

 

    

 

 

    

 

 

     

 

 

 
Distributions(e)                                       

From net investment income

    (1.68      (0.05             (0.03       (0.00 )(f) 

From net realized gain

    (0.08      (0.22             (0.01        

From return of capital

           (1.01      (1.20      (1.16       (0.10
 

 

 

    

 

 

    

 

 

    

 

 

     

 

 

 

Total distributions

    (1.76      (1.28      (1.20      (1.20       (0.10
 

 

 

    

 

 

    

 

 

    

 

 

     

 

 

 

Capital changes with respect to issuance of Common Shares

                                 (0.04
 

 

 

    

 

 

    

 

 

    

 

 

     

 

 

 

Net asset value, end of period

  $ 26.21      $ 27.73      $ 20.10      $ 19.70       $ 19.43  
 

 

 

    

 

 

    

 

 

    

 

 

     

 

 

 

Market price, end of period

  $ 27.48      $ 26.69      $ 17.94      $ 17.31       $ 17.59  
 

 

 

    

 

 

    

 

 

    

 

 

     

 

 

 

Total Return(g)

 

Based on net asset value

    0.24      45.73      9.36      8.61       2.31 %(h) 
 

 

 

    

 

 

    

 

 

    

 

 

     

 

 

 

Based on market price

    9.18      57.15      11.08      5.36       (11.55 )%(h) 
 

 

 

    

 

 

    

 

 

    

 

 

     

 

 

 

Ratios to Average Net Assets

 

Total expenses

    1.09      1.09      1.10      1.12       1.19 %(i) 
 

 

 

    

 

 

    

 

 

    

 

 

     

 

 

 

Total expenses after fees waived and/or reimbursed

    0.89      0.89      0.90      0.92       0.97 %(i) 
 

 

 

    

 

 

    

 

 

    

 

 

     

 

 

 

Net investment income (loss)

    (0.43 )%       (0.19 )%       0.02      0.15       (0.24 )%(i) 
 

 

 

    

 

 

    

 

 

    

 

 

     

 

 

 

Supplemental Data

 

Net assets, end of period (000)

  $ 587,908      $ 620,300      $ 452,443      $ 443,477       $ 437,380  
 

 

 

    

 

 

    

 

 

    

 

 

     

 

 

 

Portfolio turnover rate

    53      41      74      91       7
 

 

 

    

 

 

    

 

 

    

 

 

     

 

 

 

 

(a)

Commencement of investment operations. This information includes the initial investment by BlackRock HoldCo2, Inc.

(b)

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.

(c)

Based on average shares outstanding.

(d)

Amount is less than $0.005 per share.

(e)

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(f)

Amount is greater than $(0.005) per share.

(g)

Total 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 distributions at actual reinvestment prices.

(h)

Aggregate total return.

(i)

Annualized.

See notes to financial statements.

 

 

114    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Financial Highlights  (continued)

(For a share outstanding throughout each period)

 

    BUI  
    Year Ended December 31,      

 

     Period from
11/01/14 to
12/31/14
    Year Ended
October 31,
2014
 
    2018      2017      2016      2015  
               

Net asset value, beginning of period

  $ 21.12      $ 19.42      $ 19.50      $ 22.47        $ 22.40     $ 20.78  
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Net investment income(a)

    0.49        0.56        0.56        0.47          0.11       0.51  

Net realized and unrealized gain (loss)

    (1.39      2.59        0.81        (1.99        0.20       2.68  
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Net increase (decrease) from investment operations

    (0.90      3.15        1.37        (1.52        0.31       3.19  
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 
Distributions(b)                                              

From net investment income

    (1.44      (0.47      (0.49      (0.42        (0.10     (0.51

From net realized gain

           (0.98      (0.53      (0.54              (0.37

From return of capital

    (0.01             (0.43      (0.49        (0.14     (0.69
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Total distributions

    (1.45      (1.45      (1.45      (1.45        (0.24     (1.57
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Net asset value, end of period

  $ 18.77      $ 21.12      $ 19.42      $ 19.50        $ 22.47     $ 22.40  
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Market price, end of period

  $ 19.76      $ 21.62      $ 18.41      $ 16.78        $ 20.74     $ 20.02  
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Total Return(c)

 

Based on net asset value

    (4.40 )%       16.62      7.57      (6.09 )%         1.50 %(d)      16.94
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Based on market price

    (1.68 )%       25.93      18.50      (12.45 )%         4.82 %(d)      18.29
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Ratios to Average Net Assets

 

Total expenses

    1.12      1.11      1.13      1.11        1.17 %(e)      1.10
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

    1.09      1.09      1.13      1.11        1.11 %(e)      1.10
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Net investment income

    2.46      2.70      2.83      2.24        2.83 %(e)      2.36
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Supplemental Data

 

Net assets, end of period (000)

  $ 318,933      $ 357,776      $ 328,297      $ 329,747        $ 379,830     $ 378,762  
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

Portfolio turnover rate

    28      31      8      20        2     41
 

 

 

    

 

 

    

 

 

    

 

 

      

 

 

   

 

 

 

 

(a)

Based on average shares outstanding.

(b)

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(c)

Total 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 distributions at actual reinvestment prices.

(d)

Aggregate total return.

(e)

Annualized.

See notes to financial statements.

 

 

FINANCIAL HIGHLIGHTS      115  


Notes to Financial Statements

 

1.

ORGANIZATION

The following are registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as closed-end management investment companies and are referred to herein collectively as the “Trusts”, or individually as a “Trust”:

 

Trust Name   Herein Referred To As    Organized    Diversification
Classification

BlackRock Energy and Resources Trust

  BGR    Delaware    Non-diversified

BlackRock Enhanced Capital and Income Fund, Inc.

  CII    Maryland    Diversified

BlackRock Enhanced Equity Dividend Trust

  BDJ    Delaware    Diversified

BlackRock Enhanced Global Dividend Trust

  BOE    Delaware    Diversified

BlackRock Enhanced International Dividend Trust

  BGY    Delaware    Diversified

BlackRock Health Sciences Trust

  BME    Delaware    Diversified

BlackRock Resources & Commodities Strategy Trust

  BCX    Delaware    Non-diversified

BlackRock Science and Technology Trust

  BST    Delaware    Non-diversified

BlackRock Utilities, Infrastructure & Power Opportunities Trust

  BUI    Delaware    Diversified

The Boards of Directors and Boards 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 net asset values (“NAVs”) of their Common Shares on a daily basis.

The Trusts, together with certain other registered investment companies advised by BlackRock Advisors, LLC (the “Manager”) or its affiliates, are included in a complex of closed-end funds referred to as the Closed-End Complex.

Basis of Consolidation: The accompanying consolidated financial statements of BCX include the account 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 other derivatives 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. During the year ended December 31, 2018, there were no transactions in the Subsidiary. The Subsidiary is subject to the same investment policies and restrictions that apply to BCX, except that the Subsidiary may invest without limitation in commodity-related instruments.

 

2.

SIGNIFICANT ACCOUNTING POLICIES

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of 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. Each Trust is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. Below is a summary of significant accounting policies:

Investment Transactions and Income Recognition: 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 date. Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when the Trusts are 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. Interest income, including amortization and accretion of premiums and discounts on debt securities, are recognized on an accrual basis.

Foreign Currency Translation: Each Trust’s books and records are maintained in U.S. dollars. Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates determined as of the close of trading on the New York Stock Exchange (“NYSE”). Purchases and sales of investments are recorded at the rates of exchange prevailing on the respective dates of such transactions. Generally, when the U.S. dollar rises in value against a foreign currency, the investments denominated in that currency will lose value; the opposite effect occurs if the U.S. dollar falls in relative value.

Each Trust does not isolate the portion of the results of operations arising as a result of changes in the exchange rates from the changes in the market prices of investments held or sold for financial reporting purposes. Accordingly, the effects of changes in 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. Each Trust reports realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are generally treated as ordinary income for U.S. federal income tax purposes.

Segregation and Collateralization: In cases where a Trust enters into certain investments (e.g., futures contracts, forward foreign currency exchange contracts and options written) that would be treated as “senior securities” for 1940 Act purposes, a Trust may segregate or designate on its books and records cash or liquid assets having a market value at least equal to the amount of its future obligations under such investments. Doing so allows the investment to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Trusts may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments or obligations.

Distributions: Distributions paid by the Trusts are recorded on the ex-dividend date. Subject to the Trusts’ level distribution plan, the Trusts intend to make monthly cash distributions to shareholders, which may consist of net investment income, net options premium and net realized and unrealized gains on investments and/or return of capital.

 

 

116    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Notes to Financial Statements  (continued)

 

The character of distributions is determined in accordance with U.S. federal income tax regulations, which may differ from U.S. 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. See Note 8, Income Tax Information, for the tax character of each Trust’s distributions paid during the period.

Net income and realized gains from investments held by the Subsidiary are treated as ordinary income for tax purposes. If a net loss is realized by the Subsidiary in any taxable year, the loss will generally not be available to offset BCX’s ordinary income and/or capital gains for that year.

Deferred Compensation Plan: Under the Deferred Compensation Plan (the “Plan”) approved by each Trust’s Board, 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, if applicable. Deferred compensation liabilities are included in the Trustees’ and Officer’s fees payable in the Statements of Assets and Liabilities and will remain as a liability of the Trusts until such amounts are distributed in accordance with the Plan.

Recent Accounting Standards: In March 2017, the Financial Accounting Standards Board issued Accounting Standards Update “Premium Amortization of Purchased Callable Debt Securities” which amends the amortization period for certain purchased callable debt securities. Under the new guidance, the premium amortization of purchased callable debt securities that have explicit, non-contingent call features and are callable at fixed prices will be amortized to the earliest call date. The guidance will be applied on a modified retrospective basis and is effective for fiscal years, and their interim periods, beginning after December 15, 2018. Management is currently evaluating the impact of this guidance to the Trusts.

In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update 2018-13 “Changes to the Disclosure Requirements for Fair Value Measurement” which modifies disclosure requirements for fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. Management is currently evaluating the impact of this guidance to the Trusts.

Indemnifications: In the normal course of business, a Trust enters into contracts that contain a variety of representations that provide general indemnification. A Trust’s maximum exposure under these arrangements is unknown because it involves future potential claims against a Trust, which cannot be predicted with any certainty.

Other: Expenses directly related to a Trust are charged to that Trust. Other operating expenses shared by several funds, including other funds managed by the Manager, are prorated among those funds on the basis of relative net assets or other appropriate methods.

 

3.

INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Investment Valuation Policies: The Trusts’ investments are valued at fair value (also referred to as “market value” within the financial statements) as of the close of trading on the NYSE (generally 4:00 p.m., Eastern time). U.S. 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 using various 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 oversee the pricing function for all financial instruments.

Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of each Trust’s assets and liabilities:

 

   

Equity investments traded on a recognized securities exchange are valued at the official closing price each day, if available. For equity investments traded on more than one exchange, the official closing 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 may be valued at the last available bid (long positions) or ask (short positions) price.

Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the NYSE. Occasionally, events affecting the values of such instruments may occur between the foreign market close and the close of trading on the NYSE that may not be reflected in the computation of the Trusts’ net assets. Each business day, the Trusts use a pricing service to assist with the valuation of certain foreign exchange-traded equity securities and foreign exchange-traded and over-the-counter (“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 trading on the NYSE, which follows the close of the local markets.

 

   

Fixed-income securities for which market quotations are readily available are generally valued using the last available bid prices or current market quotations provided by independent dealers or third party pricing services. Floating rate loan interests are valued at the mean of the bid prices from one or more independent brokers or dealers as obtained from a third party pricing service. Pricing services generally value fixed-income securities assuming orderly transactions of an institutional round lot size, but a fund may hold or transact in such securities in smaller, odd lot sizes. Odd lots may trade at lower prices than institutional round lots. The pricing services may use matrix pricing or valuation models that utilize certain inputs and assumptions to derive values, including transaction data (e.g., recent representative bids and offers), credit quality information, perceived market movements, news, and other relevant information. Certain fixed-income securities, including asset-backed and mortgage related securities may be valued based on valuation models that consider the estimated cash flows of each tranche of the entity, establish a benchmark yield and develop an estimated tranche specific spread to the benchmark yield based on the unique attributes of the tranche. The amortized cost method of valuation may be used with respect to debt obligations with sixty days or less remaining to maturity unless the Manager determines such method does not represent fair value.

 

   

Investments in open-end U.S. mutual funds are valued at NAV each business day.

 

 

NOTES TO FINANCIAL STATEMENTS      117  


Notes to Financial Statements  (continued)

 

 

   

The Trusts value their investment in SL Liquidity Series, LLC, Money Market Series (the “Money Market Series”) at fair value, which is ordinarily based upon their 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 may follow the parameters of investments by a money market fund that is subject to Rule 2a-7 under the 1940 Act.

 

   

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. 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.

If events (e.g., a company announcement, market volatility or a natural disaster) occur that are expected to materially affect the value of such instruments, or in the event that the 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 Valued Investments”). The fair valuation approaches that may be used by the Global Valuation Committee will include market approach, income approach and cost approach. Valuation techniques such as discounted cash flow, use of market comparables and matrix pricing are types of valuation approaches and are typically used in determining fair value. When determining the price for Fair Valued Investments, the Global Valuation Committee, or its delegate, seeks to determine the price that each Trust might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the Global Valuation Committee, or its delegate, deems relevant and consistent with the principles of fair value measurement.

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 each Trust’s 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 and large movements in market values and reviews of any market related activity. The pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis. As a result of the inherent uncertainty in valuation of these investments, the fair values may differ from the values that would have been used had an active market existed.

For investments in equity or debt issued by privately held companies or funds (“Private Company” or collectively, the “Private Companies”) and other Fair Valued Investments, the fair valuation approaches that are used by third party pricing services utilize one or a combination of, but not limited to, the following inputs.

 

     Standard Inputs Generally Considered By Third Party Pricing Services

Market approach

 

(i)  recent market transactions, including subsequent rounds of financing, in the underlying investment or comparable issuers;

(ii)   recapitalizations and other transactions across the capital structure; and

(iii)  market multiples of comparable issuers.

Income approach

 

(i)  future cash flows discounted to present and adjusted as appropriate for liquidity, credit, and/or market risks;

(ii)   quoted prices for similar investments or assets in active markets; and

(iii)  other risk factors, such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, recovery rates, liquidation amounts and/or default rates.

Cost approach

 

(i)  audited or unaudited financial statements, investor communications and financial or operational metrics issued by the Private Company;

(ii)   changes in the valuation of relevant indices or publicly traded companies comparable to the Private Company;

(iii)  relevant news and other public sources; and

(iv)  known secondary market transactions in the Private Company’s interests and merger or acquisition activity in companies comparable to the Private Company.

Investments in series of preferred stock issued by Private Companies are typically valued utilizing market approach in determining the enterprise value of the company. Such investments often contain rights and preferences that differ from other series of preferred and common stock of the same issuer. Valuation techniques such as an option pricing model (“OPM”), a probability weighted expected return model (“PWERM”) or a hybrid of those techniques are used in allocating enterprise value of the company, as deemed appropriate under the circumstances. The use of OPM and PWERM techniques involve a determination of the exit scenarios of the investment in order to appropriately allocate the enterprise value of the company among the various parts of its capital structure.

The Private Companies are not subject to the public company disclosure, timing, and reporting standards as other investments held by a Trust. Typically, the most recently available information by a Private Company is as of a date that is earlier than the date a Trust is calculating its NAV. This factor may result in a difference between the value of the investment and the price a Trust could receive upon the sale of the investment.

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

 

   

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

 

   

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

 

   

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

 

 

118    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Notes to Financial Statements  (continued)

 

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. Investments classified within Level 3 have significant unobservable inputs used by the Global Valuation Committee in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by Private Companies. There may not be a secondary market, and/or there are a limited number of investors. Level 3 investments may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Global Valuation Committee in the absence of market information.

Changes in valuation techniques may result in transfers into or out of an assigned level within the hierarchy. In accordance with each Trust’s policy, transfers between different levels of the fair value 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 investments and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities.

As of December 31, 2018, certain investments of BME, BCX and BST were valued using NAV or its equivalent as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

 

4.

SECURITIES AND OTHER INVESTMENTS

Preferred Stocks: Preferred stock has a preference over common stock in liquidation (and generally in receiving dividends as well), but is subordinated to the liabilities of the issuer in all respects. As a general rule, the market value of preferred stock with a fixed dividend rate and no conversion element varies inversely with interest rates and perceived credit risk, while the market price of convertible preferred stock generally also reflects some element of conversion value. Because preferred stock is junior to debt securities and other obligations of the issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a preferred stock than in a more senior debt security with similar stated yield characteristics. Unlike interest payments on debt securities, preferred stock dividends are payable only if declared by the issuer’s board of directors. Preferred stock also may be subject to optional or mandatory redemption provisions.

Securities Lending: Certain Trusts may lend their securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Trusts collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by each Trust is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current market value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Trust and any additional required collateral is delivered to the Trust, or excess collateral returned by the Trust, on the next business day. During the term of the loan, the Trusts are entitled to all distributions made on or in respect of the loaned securities, but do not receive interest income on 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 any securities on loan, all of which were classified as common stocks in the Trusts’ Schedules of Investments, and the value of any related collateral are shown separately in the Statements of Assets and Liabilities as a component of investments at value-unaffiliated, and collateral on securities loaned at value, respectively. As of period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. 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 (each, an “MSLA”), which provide the right, 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. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left 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 an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, absent an event of default, the borrower can resell or re-pledge the loaned securities, and a Trust can reinvest cash collateral received in connection with loaned securities. Upon an event of default, the parties’ obligations to return the securities or collateral to the other party are extinguished, and the parties can resell or re-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting party’s net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.

As of period end, the following tables are a summary of the Trusts’ securities lending agreements by counterparty which are subject to offset under an MSLA:

 

Counterparty   Securities
Loaned at Value
     Cash Collateral
Received
 (a)
    Net
Amount
 

BME

      

Barclays Bank PLC

  $ 364      $ (364   $  

Societe Generale

    4,128        (4,128      
 

 

 

    

 

 

   

 

 

 
  $ 4,492      $ (4,492   $  
 

 

 

    

 

 

   

 

 

 

BCX

      

Goldman Sachs & Co.

  $ 217,995      $ (217,995   $  

Merrill Lynch, Pierce, Fenner & Smith Inc.

    11        (11      

Morgan Stanley & Co. LLC

    4        (4      
 

 

 

    

 

 

   

 

 

 
  $ 218,010      $ (218,010   $  
 

 

 

    

 

 

   

 

 

 

 

 

NOTES TO FINANCIAL STATEMENTS      119  


Notes to Financial Statements  (continued)

 

Counterparty   Securities
Loaned at Value
     Cash Collateral
Received
 (a)
    Net
Amount
 

BST

      

Credit Suisse Securities (USA) LLC

  $ 1,302,857      $ (1,302,857   $  

Goldman Sachs & Co.

    35,159        (35,159      

Jefferies & Co.

    291,443        (291,443      
 

 

 

    

 

 

   

 

 

 
  $ 1,629,459      $ (1,629,459   $  
 

 

 

    

 

 

   

 

 

 

 

  (a) 

Cash collateral with a value of $4,675, $273,985 and $1,710,283 for BME, BCX and BST, respectively, has been received in connection with securities lending agreements. Collateral received in excess of the value of securities loaned from the individual counterparty, if any, is not shown for financial reporting purposes in the table above.

 

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 these risks, the Trusts benefit from a borrower default indemnity provided by BIM. BIM’s indemnity allows for full replacement of the securities loaned if the collateral received does not cover the value on the securities loaned in the event of borrower default. Each Trust could incur 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.

 

5.

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 manage their exposure to certain risks such as credit risk, equity risk, interest rate risk, foreign currency exchange rate risk, commodity price risk or other risks (e.g., inflation risk). Derivative financial instruments categorized by risk exposure are included in the Schedules of Investments. These contracts may be transacted on an exchange or OTC.

Options: Certain Trusts purchase and write call and put options to increase or decrease their exposure to the risks of underlying instruments, including equity risk, interest rate 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.

Premiums paid on options purchased and premiums received on options written, as well as the daily fluctuation in market value, are included in investments at value — unaffiliated and options written at value, respectively, in the Statements of Assets and Liabilities. When an instrument is purchased or sold through the exercise of an option, the premium is offset against the cost or proceeds of the underlying instrument. When an option expires, a realized gain or loss is recorded in the Statements of Operations to the extent of the premiums received or paid. When an option is closed or sold, a gain or loss is recorded in the Statements of Operations 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 typically “covered,” meaning that they 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. These amounts, which are considered restricted, are included in cash pledged as collateral for options written in the Statements of Assets and Liabilities.

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 they 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.

Master Netting Arrangements: In order to define their contractual rights and to secure rights that will help them mitigate their counterparty risk, the Trusts may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with their counterparties. An ISDA Master Agreement is a bilateral agreement between each Trust and a counterparty that governs certain OTC derivatives 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 instruments’ 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. Bankruptcy or insolvency laws of a particular jurisdiction may restrict or prohibit the right of offset in bankruptcy, insolvency or other events.

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 the Trusts and the counterparty.

Cash collateral that has been pledged to cover obligations of the Trusts and cash collateral received from the counterparty, if any, is reported separately on the Statements of Assets and Liabilities as cash pledged as collateral and cash received as collateral, respectively. Non-cash collateral pledged by the Trusts, if any, is noted in the Schedules of Investments. Generally, the amount of collateral due from or to a counterparty is subject to a certain minimum transfer amount threshold before a transfer is required, which is determined at the close of business of the Trusts. Any additional required collateral is delivered to/pledged by the Trusts on the next business day. Typically, the counterparty is not permitted to sell, re-pledge or use cash and non-cash collateral it receives. A Trust generally agrees not to use non-cash collateral that it receives but may, absent default or certain other circumstances defined in the underlying ISDA Master Agreement, be permitted to use cash collateral received. In such cases, interest may be paid pursuant to the collateral arrangement with the counterparty. To the extent amounts due to the Trusts from their counterparties are not fully collateralized, they bear the risk of loss from counterparty non-performance. Likewise, to the extent the Trusts have delivered collateral to a counterparty and stand ready to perform under the terms of their agreement with such counterparty, they bear the risk of loss from a counterparty in the amount of the value of the collateral in the event the counterparty fails to return such collateral. Based on the terms of agreements, collateral may not be required for all derivative contracts.

 

 

120    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Notes to Financial Statements  (continued)

 

For financial reporting purposes, the Trusts do not offset derivative assets and derivative liabilities that are subject to netting arrangements, if any, in the Statements of Assets and Liabilities.

 

6.

INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Advisory: Each Trust entered into an Investment Advisory Agreement with the Manager, the Trusts’ investment adviser, an indirect, wholly-owned subsidiary of BlackRock, to provide investment advisory and administrative services. The Manager is responsible for the management of each Trust’s portfolio and provides the personnel, facilities, equipment and certain other services necessary to the operations of each Trust.

For such services, each Trust, except BCX and BST, pays the Manager a monthly fee at the following annual rates:

 

Average weekly value of each Trust’s net assets:

       

BGR

    1.20

BDJ

    0.80  

BOE

    1.00  

BME

    1.00  

 

Average daily value of each Trust’s net assets:

       

CII

    0.85

BGY

    1.00  

BUI

    1.00  

For such services, BCX pays the Manager a monthly fee of 1.00% of the sum of the average daily value of the net assets of the Trust (excluding the value of the Trust’s interest in its Subsidiary) and the average daily value of the net assets of its Subsidiary, which fee is allocated pro rata between the Trust and the Subsidiary based on the average daily value of their respective net assets (excluding, in the case of the Trust, the value of the Trust’s interest in its Subsidiary).

For such services, BST pays the Manager a monthly fee at an annual rate equal to 1.00% of the average daily value of the Trust’s managed assets. For purposes of calculating this fee, “managed assets” means the total assets of the Trust (including any assets attributable to money borrowed for investment purposes) minus the sum of its accrued liabilities (other than money borrowed for investment purposes).

With respect to BGR, BOE, BGY, BCX and BUI, the Manager entered into separate sub-advisory agreements with BlackRock International Limited (“BIL”), an affiliate of the Manager. The Manager pays BIL, for services it provides, a monthly fee that is a percentage of the investment advisory fees paid by each Trust to the Manager.

The Manager provides investment management and other services to BCX’s 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.

Distribution Fees: BME has entered into a Distribution Agreement with BlackRock Investments, LLC (“BRIL”), an affiliate of the Manager, to provide for distribution of BME common shares on a reasonable best efforts basis through an equity shelf offering (a “Shelf Offering”) (the “Distribution Agreement”). Pursuant to the Distribution Agreement, BME will compensate BRIL with respect to sales of common shares at a commission rate of 1.00% of the gross proceeds of the sale of BME’s common shares and a portion of such commission is re-allowed to broker-dealers engaged by BRIL. The commissions retained by BRIL during the year ended December 31, 2018 amounted to $40,417.

Expense Limitations, Waivers, and Reimbursements: The Manager has contractually agreed to waive a portion of the investment advisory fees on BST as a percentage of its average daily managed assets as follows:

 

             Expiration Date  

BST

    0.20      December 31, 2018  
    0.15        December 31, 2019  
    0.10        December 31, 2020  
      0.05        December 31, 2021  

The Manager voluntarily agreed to waive a portion of the investment advisory fees on the following Trusts as a percentage of their average weekly net assets, except BUI, which is average daily net assets, as follows:

 

BGR

    0.150

BOE

    0.175  

BUI

    0.025  

Prior to July 1, 2018, the waiver as a percentage of BOE’s average weekly net assets was 0.100%.

With respect to BGY, the Manager has voluntarily agreed to waive a portion of its investment advisory fees equal to the annual rate of 0.10% of BGY’s average daily net assets.

These voluntary waivers may be reduced or discontinued at any time without notice.

 

 

NOTES TO FINANCIAL STATEMENTS      121  


Notes to Financial Statements  (continued)

 

For the year ended December 31, 2018, the investment advisory fees waived, which are included in fees waived and/or reimbursed by the Manager in the Statements of Operations, were as follows:

 

BGR

  $ 674,042  

BOE

    1,150,975  

BGY

    705,229  

BST

    1,348,548  

BUI

    84,951  

With respect to each Trust, 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 (the “affiliated money market fund waiver”). These amounts are included in fees waived and/or reimbursed by the Manager in the Statements of Operations. For the year ended December 31, 2018, the amounts waived were as follows:

 

     Amount Waived  

BGR

  $ 3,178  

CII

    3,200  

BDJ

    9,782  

BOE

    4,368  

BGY

    4,484  

BME

    8,521  

BCX

    7,702  

BST

    6,630  

BUI

    3,405  

The Manager contractually agreed to waive its investment advisory fee with respect to any portion of each Trust’s assets invested in affiliated equity and fixed-income mutual funds and affiliated exchange-traded funds that have a contractual management fee through June 30, 2019. The agreement can be renewed for annual periods thereafter, and may be terminated on 90 days’ notice, each subject to approval by a majority of the Trusts’ Independent Trustees. For the year ended December 31, 2018, there were no fees waived and/or reimbursed by the Manager.

Securities Lending: The U.S. Securities and Exchange Commission (“SEC”) has issued an exemptive order which permits BIM, an affiliate of the Manager, to serve as securities lending agent for the Trusts, subject to applicable conditions. As securities lending agent, BIM bears all operational costs directly related to securities lending. The Trusts are responsible for expenses in connection with the investment of cash collateral received for securities on loan (the “collateral investment expenses”). The cash collateral is invested in a private investment company managed by the Manager or its affiliates. However, BIM has agreed to cap the collateral investment expenses of the private investment company to an annual rate of 0.04%. The investment adviser to the private investment company will not charge any advisory fees with respect to shares purchased by the Trusts.

Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment expenses. Each Trust retains a portion of securities lending income and remits a remaining portion to BIM as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, BIM may lend securities only when the difference between the borrower rebate rate and the risk free rate exceeds a certain level (such securities, the “specials only securities”). Each Trust retains 80% of securities lending income. In addition, commencing the business day following the date that the aggregate securities lending income earned across the Closed-End Complex in a calendar year exceeds the breakpoint dollar threshold applicable in the given year as set forth in the securities lending agreement, each Trust, pursuant to the securities lending agreement, will retain for the remainder of the calendar year securities lending income in an amount equal to 85% of securities lending income.

The share of securities lending income earned by each Trust is shown as securities lending income — affiliated — net in the Statements of Operations. For the year ended December 31, 2018, each Trust paid BIM the following amounts for securities lending agent services:

 

CII

  $ 3,425  

BDJ

    205  

BME

    439  

BCX

    4,097  

BST

    39,750  

Trustees and Officers: Certain trustees and/or officers of the Trusts are trustees and/or officers 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 Trustees and Officer in the Statements of Operations.

Other Transactions: During the year ended December 31, 2018, BGY received reimbursements of $243,859 respectively, from an affiliate, which is shown as payments from affiliates in the Statements of Operations, related to the reimbursement of transaction costs.

During the year ended December 31, 2018, BDJ received a reimbursement of $6,782 from an affiliate, which is included in payments from affiliates in the Statements of Operations, related to operating event.

 

 

122    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Notes to Financial Statements  (continued)

 

The Trusts may purchase securities from, or sell securities to, an affiliated fund provided the affiliation is due solely to having a common investment adviser, common officers, or common trustees. For the year ended December 31, 2018, the purchase and sale transactions and any net realized gains (losses) with an affiliated fund in compliance with Rule 17a-7 under the 1940 Act were as follows:

 

     Purchase      Sales      Net Realized
Gain (Loss)
 

BDJ

  $ 3,832,651      $      $  

 

7.

PURCHASES AND SALES

For the year ended December 31, 2018, purchases and sales of investments, excluding short-term securities, were as follows:

 

     Purchases      Sales  

BGR

  $ 145,163,340      $ 171,586,992  

CII

    205,453,856        242,565,466  

BDJ

    617,765,771        730,433,942  

BOE

    232,965,788        286,591,506  

BGY

    420,602,594        476,163,578  

BME

    127,775,053        143,471,689  

BCX

    627,875,497        682,129,410  

BST

    357,940,930        399,610,510  

BUI

    94,003,140        112,335,571  

 

8.

INCOME TAX INFORMATION

It is each Trust’s policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies, and to distribute substantially all of its taxable income to its shareholders. Therefore, no U.S. federal income tax provision is required.

Each Trust files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on each Trust’s U.S. federal tax returns generally remains open for each of the four years ended December 31, 2018. 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 has analyzed tax laws and regulations and their application to the Trusts as of December 31, 2018, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Trusts’ financial statements.

U.S. 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. As of period end, the following permanent differences attributable to net operating losses and non-deductible expenses were reclassified to the following accounts:

 

      BME     BST  

Paid-in capital

   $ (6,818   $ (3,585,363

Accumulated earnings (loss)

     6,818       3,585,363  

The tax character of distributions paid was as follows:

 

     BGR      CII      BDJ      BOE      BGY  

Ordinary income

             

12/31/18

  $ 8,135,490      $ 7,552,897      $ 33,730,833      $ 22,660,720      $ 17,828,120  

12/31/17

    12,093,542        6,682,172        31,328,211        59,729,859        9,780,974  

Long-term capital gains

             

12/31/18

           12,374,208        71,367,931        34,238,980        30,479,902  

12/31/17

                  74,032,175        98,000,577         

Return of capital

             

12/31/18

    19,637,853        23,911,918               1,381,549         

12/31/17

    15,679,802        37,156,851                      40,102,438  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

             

12/31/18

  $ 27,773,343      $ 43,839,023      $ 105,098,764      $ 58,281,249      $ 48,308,022  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

12/31/17

  $ 27,773,344      $ 43,839,023      $ 105,360,386      $ 157,730,436      $ 49,883,412  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

NOTES TO FINANCIAL STATEMENTS      123  


Notes to Financial Statements  (continued)

 

 

     BME      BCX      BST      BUI  

Ordinary income

          

12/31/18

  $ 692,439      $ 17,715,545      $      $ 12,194,916  

12/31/17

    806,387        23,004,937        1,173,241        7,954,054  

Long-term capital gains

          

12/31/18

    21,998,038               39,423,699        12,329,188  

12/31/17

    18,575,419               4,969,225        16,614,050  

Return of capital

          

12/31/18

           41,596,743               98,239  

12/31/17

    2,234,310        36,309,489        22,536,962         
 

 

 

    

 

 

    

 

 

    

 

 

 

Total

          

12/31/18

  $ 22,690,477      $ 59,312,288      $ 39,423,699      $ 24,622,343  
 

 

 

    

 

 

    

 

 

    

 

 

 

12/31/17

  $ 21,616,116      $ 59,314,426      $ 28,679,428      $ 24,568,104  
 

 

 

    

 

 

    

 

 

    

 

 

 

As of period end, the tax components of accumulated net earnings (losses) were as follows:

 

     BGR     CII     BDJ     BOE     BGY  

Undistributed ordinary income

  $  —     $  —     $ 7,867,987     $  —     $  —  

Undistributed long-term capital gains

                118,011,126             19,966,623  

Capital loss carryforwards

    (158,185,500                        

Net unrealized gains (losses)(a)

    (64,281,664     96,407,527       191,728,441       (66,456,883     (70,054,592

Qualified late-year losses(b)

    (49,966     (2,329           (1,930,596      
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  $ (222,517,130   $ 96,405,198     $ 317,607,554     $ (68,387,479   $ (50,087,969
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
         
            BME     BCX     BST     BUI  

Undistributed long-term capital gains

    $  733,900     $  —     $  25,156,910     $  —  

Capital loss carryforwards

            (402,068,922            

Net unrealized gains (losses)(a)

      98,966,025       (22,273,952     216,499,136       41,808,238  

Qualified late-year losses(b)

                        (5,338,746
   

 

 

   

 

 

   

 

 

   

 

 

 
    $ 99,699,925     $ (424,342,874   $ 241,656,046     $ 36,469,492  
   

 

 

   

 

 

   

 

 

   

 

 

 

 

  (a) 

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 options and 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, and the deferral of compensation to Trustees.

 
  (b) 

The Trust has elected to defer certain qualified late-year losses and recognize such losses in the next taxable period.

 

As of December 31, 2018, the Trusts had non-expiring capital loss carryforwards available to offset future realized capital gains as follows:

 

     BGR      BCX  

No expiration date

  $ 158,185,500      $ 402,068,922  

During the year ended December 31, 2018, the Trusts listed below utilized the following amounts of their respective capital loss carryforward:

 

     CII      BGY      BCX  

Amount utilized

  $ 21,333,622      $ 31,492,776      $ 35,311,282  

As of December 31, 2018, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:

 

     BGR     CII     BDJ     BOE     BGY  

Tax cost

  $ 423,753,041     $ 595,206,760     $ 1,464,170,568     $ 822,066,187     $ 690,017,339  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross unrealized appreciation

  $ 13,590,781     $ 125,123,694     $ 323,491,923     $ 43,678,566     $ 26,935,033  

Gross unrealized depreciation

    (75,953,950     (27,121,507     (126,073,152     (107,795,508     (94,136,526
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net unrealized appreciation (depreciation)

  $ (62,363,169   $ 98,002,187     $ 197,418,771     $ (64,116,942   $ (67,201,493
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
         
            BME     BCX     BST     BUI  

Tax cost

 

  $ 254,825,980     $ 823,186,273     $ 375,956,779     $ 268,239,023  
   

 

 

   

 

 

   

 

 

   

 

 

 

Gross unrealized appreciation

 

  $ 110,808,092     $ 92,071,856     $ 239,356,067     $ 63,622,500  

Gross unrealized depreciation

 

    (9,942,309     (108,134,757     (18,422,511     (10,867,950
   

 

 

   

 

 

   

 

 

   

 

 

 

Net unrealized appreciation (depreciation)

 

  $ 100,865,783     $ (16,062,901   $ 220,933,556     $ 52,754,550  
   

 

 

   

 

 

   

 

 

   

 

 

 

 

 

124    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Notes to Financial Statements  (continued)

 

 

9.

PRINCIPAL RISKS

In the normal course of business, the Trusts invest in securities or other instruments and may enter into certain transactions, and such activities subject each Trust to various risks, including among others, fluctuations in the market (market risk) or failure of an issuer to meet all of its obligations. The value of securities or other instruments may also be affected by various factors, including, without limitation: (i) the general economy; (ii) the overall market as well as local, regional or global political and/or social instability; (iii) regulation, taxation or international tax treaties between various countries; or (iv) currency, interest rate and price fluctuations.

The Trusts may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00 and which may be subject to redemption gates or liquidity fees under certain circumstances.

Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. A Trust may invest in illiquid investments and may experience difficulty in selling those investments in a timely manner at the price that they believe the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause each Trust’s NAV to experience significant increases or decreases over short periods of time. If there is a general decline in the securities and other markets, the NAV of a Trust may lose value, regardless of the individual results of the securities and other instruments in which a Trust invests.

The price a Trust could receive upon the sale of any particular portfolio investment may differ from a Trust valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair valuation technique or a price provided by an independent pricing service. Changes to significant unobservable inputs and assumptions (i.e., publicly traded company multiples, growth rate, time to exit) due to the lack of observable inputs may significantly impact the resulting fair value and therefore a Trust results of operations. As a result, the price received upon the sale of an investment may be less than the value ascribed by a Trust, and a Trust could realize a greater than expected loss or lesser than expected gain upon the sale of the investment. A Trust ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third party service providers.

Counterparty Credit Risk: The Trusts may be exposed to counterparty credit risk, or the risk that an entity may fail to or be unable to perform on its commitments related to unsettled or open transactions. The Trusts manage counterparty credit risk by entering into transactions only with counterparties that the Manager believes 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 approximately their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Trusts.

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 less the value of any collateral held by such Trust.

For OTC options purchased, each Trust bears the risk of loss in the amount of the premiums paid plus the positive change in market values net of any collateral held by the Trusts 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. The Trusts may be exposed to counterparty credit risk with respect to options written to the extent the Trusts deposit collateral with its counterparty to a written option.

With exchange-traded options purchased and futures, 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 offset rights may exist under applicable law, a Trust does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. 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 allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Trusts.

Concentration Risk: As of period end, the Trusts listed below invested a significant portion of their assets in securities in the following sectors:

 

Energy

    BGR, BCX  

Financials

    BDJ  

Health Care

    BME  

Information Technology

    BST  

Materials

    BCX  

Utilities

    BUI  

Changes in economic conditions affecting such sectors would have a greater impact on the Trusts and could affect the value, income and/or liquidity of positions in such securities.

BOE and BGY invests a substantial amount of their assets in issuers located in a single country or a limited number of countries. When a Trust’s concentrate its investments in this manner, it assumes the risk that economic, political and social conditions in those countries may have a significant impact on its investment performance. Foreign issuers may not be subject to the same uniform accounting, auditing and financial reporting standards and practices as used in the United States.

 

 

NOTES TO FINANCIAL STATEMENTS      125  


Notes to Financial Statements  (continued)

 

Foreign securities markets may also be less liquid, more volatile, and less subject to governmental supervision not typically associated with investing in U.S. securities. Investment percentages in specific countries are presented in the Schedules of Investments.

BGY, BOE, and BCX invest a significant portion of their assets in securities of issuers located in Europe or with significant exposure to European issuers or countries. The European financial markets have recently experienced volatility and adverse trends due to concerns about economic downturns in, or rising government debt levels of, several European countries. These events may spread to other countries in Europe and may affect the value and liquidity of the Trusts’ investments.

The United Kingdom is scheduled to withdraw from the European Union in March 2019, which may introduce significant new uncertainties and instability in the financial markets across Europe.

 

10.

CAPITAL SHARE TRANSACTIONS

Each Trust is authorized to issue an unlimited numbers of shares, with the exception of CII, all of which were initially classified as Common Shares. CII is authorized to issue 200 million Common Shares. The par value for each Trust’s Common Shares is $0.001, except for CII, which is $0.10. The Board is authorized, however, to reclassify any unissued Common Shares to Preferred Shares without the approval of Common Shareholders.

For the periods shown, shares issued and outstanding increased by the following amounts as a result of shares issued through the Shelf Offering:

 

     Year Ended  
     12/31/18      12/31/17  

BME

    504,770        601,804  

For the periods shown, shares issued and outstanding increased by the following amounts as a result of dividend reinvestment:

 

     Year Ended  
     12/31/18      12/31/17  

BME

    28,688        47,676  

BST

    60,353         

BUI

    46,552        33,776  

For the year ended December 31, 2018, for BGR, CII, and BDJ and December 31, 2017, for BGR, and CII, shares issued and outstanding remained constant.

On June 9, 2016, BME filed a final prospectus with the SEC allowing it to issue an additional 2,500,000 Common Shares through a Shelf Offering. Under the Shelf Offering, BME, subject to market conditions, may raise additional equity capital from time to time in varying amounts and utilizing various offering methods at a net price at or above BME’s NAV per Common Share (calculated within 48 hours of pricing). As of period end, 1,029,718 Common Shares remain available for issuance under the Shelf Offering. From August 12, 2015 to June 9, 2016, BME was authorized to issue 453,000 Common Shares under a previous Shelf Offering. See Additional Information — Shelf Offering Program for additional information about the Shelf Offering.

Initial costs incurred by BME in connection with its shelf offering are recorded “Deferred offering costs” in the Statements of Assets and Liabilities. As shares are sold, a portion of the costs attributable to the shares sold will be charged against paid-in-capital. Any remaining deferred charges at the end of the shelf offering period will be charged to expense. Any subsequent costs incurred to keep the filing active will be charged to expense as incurred.

The Trusts participate in an open market share repurchase program (the “Repurchase Program”). Under the program, the Trusts were permitted to repurchase up to 5% of its outstanding common shares from December 1, 2017 through November 30, 2018, based on common shares outstanding as of the close of business on November 30, 2017, subject to certain conditions. On September 7, 2018, the Trusts announced a continuation of the Repurchase Program. Commencing on December 1, 2018, the Trusts may repurchase up to 5% of its outstanding common shares through November 30, 2019, based on common shares outstanding as of the close of business on November 30, 2018, subject to certain conditions. There is no assurance that the Trusts will purchase shares in any particular amounts. The total amount of the repurchase offer is reflected in the Trusts’ Statements of Changes in Net Assets.

For the periods shown, shares repurchased and cost, including transaction costs, were as follows:

 

BDJ   Shares      Amount  

December 31, 2018

         $  

December 31, 2017

    1,435,917        12,272,105  
    
BOE   Shares      Amount  

December 31, 2018

    728,069      $ 7,051,296  

December 31, 2017

    571,366        7,428,758  
    
BGY   Shares      Amount  

December 31, 2018

    1,342,421      $ 6,926,639  

December 31, 2017

    940,260        5,726,813  

 

 

126    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Notes to Financial Statements  (continued)

 

 

BCX   Shares      Amount  

December 31, 2018

    2,000,565      $ 17,063,427  

December 31, 2017

    2,514,091        21,837,878  
    
BST   Shares      Amount  

December 31, 2018

         $  

December 31, 2017

    136,367        2,799,570  

 

11.

REGULATION S-X AMENDMENTS

On August 17, 2018, the SEC adopted amendments to certain disclosure requirements in Securities Act Release No. 33-10532, Disclosure Update and Simplification. The Funds have adopted the amendments pertinent to Regulation S-X in this shareholder report. The amendments impacted certain disclosure presentation on the Statements of Assets and Liabilities, Statements of Changes in Net Assets and Notes to the Financial Statements.

Prior year distribution information and undistributed (distributions in excess of) net investment income in the Statements of Changes in Net Assets has been modified to conform to the current year presentation in accordance with the Regulation S-X changes.

Distributions for the year ended December 31, 2017 were classified as follows:

 

     Net Investment Income      Net Realized Gain      Return of Capital  

BGR

  $ 12,093,542      $      $ 15,679,802  

CII

    6,682,172               37,156,851  

BDJ

    31,328,211        74,032,175         

BOE

    12,416,010        145,314,426         

BGY

    9,780,974               40,102,438  

BME

    355,707        19,026,099        2,234,310  

BCX

    23,004,937               36,309,489  

BST

    1,173,241        4,969,225        22,536,962  

BUI

    7,954,054        16,614,050         

Undistributed (distributions in excess of) net investment income as of December 31, 2017 is as follows:

 

    

Undistributed
(Distributions in Excess of)
Net Investment Income

 

BGR

  $ (729,389

CII

    (189,571

BDJ

    (970,285

BOE

    (732,747

BGY

    (642,554

BME

    (61,330

BCX

    (3,674,326

BST

    (1,852,285

BUI

    3,097,658  

 

12.

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:

 

     Common Dividend
Per Share
 
     Paid (a)      Declared (b)  

BGR

  $ 0.077600      $ 0.077600  

CII

    0.082800        0.082800  

BDJ

    0.046700        0.046700  

BOE

    0.063000        0.063000  

BGY

    0.033800        0.033800  

BME

    0.200000        0.200000  

BCX

    0.051600        0.051600  

BST

    0.150000        0.150000  

BUI

    0.121000        0.121000  

 

  (a) 

Net investment income dividend paid on January 31, 2019 to shareholders of record on January 15, 2019.

 
  (b) 

Net investment income dividend declared on February 1, 2019, payable to shareholders of record on February 15, 2019.

 

 

 

NOTES TO FINANCIAL STATEMENTS      127  


Report of Independent Registered Public Accounting Firm

 

To the Shareholders and Boards of Trustees/Directors of BlackRock Energy and Resources Trust, BlackRock Enhanced Capital and Income Fund, Inc., BlackRock Enhanced Equity Dividend Trust, BlackRock Enhanced Global Dividend Trust, BlackRock Enhanced International Dividend Trust, BlackRock Health Sciences Trust, BlackRock Resources & Commodities Strategy Trust, BlackRock Science and Technology Trust, and BlackRock Utilities, Infrastructure & Power Opportunities Trust:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying consolidated statement of assets and liabilities of BlackRock Resources & Commodities Strategy Trust and subsidiary, including the consolidated schedule of investments, as of December 31, 2018, 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, the consolidated financial highlights for the periods indicated in the table below, and the related notes. We have also audited the accompanying statements of assets and liabilities of BlackRock Energy and Resources Trust, BlackRock Enhanced Capital and Income Fund, Inc., BlackRock Enhanced Equity Dividend Trust, BlackRock Enhanced Global Dividend Trust, BlackRock Enhanced International Dividend Trust, BlackRock Health Sciences Trust, BlackRock Science and Technology Trust, and BlackRock Utilities, Infrastructure & Power Opportunities Trust, (collectively with BlackRock Resources & Commodities Strategy Trust, the “Funds”), including the schedules of investments, as of December 31, 2018, 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 years in the period then ended, the financial highlights for the periods indicated in the table below, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Funds as of December 31, 2018, and the results of their operations and their cash flows for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the periods listed in the table below, in conformity with accounting principles generally accepted in the United States of America.

 

Fund   Financial Highlights
BlackRock Energy and Resources Trust, BlackRock Enhanced Capital and Income Fund, Inc., BlackRock Enhanced Equity Dividend Trust, BlackRock Enhanced Global Dividend Trust, BlackRock Enhanced International Dividend Trust, BlackRock Health Sciences Trust, BlackRock Resources & Commodities Strategy Trust, BlackRock Utilities, Infrastructure & Power Opportunities Trust   For each of the four years in the period ended December 31, 2018, for the period from November 1, 2014 through December 31, 2014, and for the year ended October 31, 2014
BlackRock Science and Technology Trust   For each of the four years in the period ended December 31, 2018 and for the period from October 30, 2014 (commencement of operations) through December 31, 2014

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. 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, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2018, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

Deloitte & Touche LLP

Boston, Massachusetts

February 26, 2019

We have served as the auditor of one or more BlackRock investment companies since 1992.

 

 

128    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Important Tax Information  (unaudited)

 

During the fiscal year ended December 31, 2018, the following information is provided with respect to the distributions paid:

 

     Payable Date   Long-Term
Capital Gains
     Non-Taxable
Return of
Capital
     Qualified
Dividend
Income
for
Individuals
  (a)
     Dividends
Qualifying for
the Dividends
Received
Deduction for
Corporations
 (a)
     Short-Term
Capital Gain
Dividends for
Non-U.S.
Residents
 (b)
     Foreign
Source
Income
     Foreign
Taxes
Paid
 (c)
 

BGR

  01/31/18 — 12/31/18          70.71      29.29      19.24               

CII

  01/31/18 — 12/31/18     28.23        54.54        17.23        17.23                       

BDJ

  01/31/18 — 07/31/18     100.00                                            
  08/31/18     90.50               9.50        8.02        0.04                
  09/31/18 — 12/31/18     6.09               93.91        78.05        0.41                

BOE

  01/31/18 — 06/30/18     100.00                                            
  07/31/18     26.03        4.17        69.80        29.31               40.75        4.51  
  08/31/18 — 12/31/18     3.96        5.41        90.63        38.06               52.91        5.86  

BGY

  01/31/18 — 12/31/18     62.55               37.45        1.28               37.49        4.15  

BME

  01/31/18 — 12/31/18     96.93               3.07        3.07                       

BCX

  01/31/18 — 12/31/18            70.13        29.87        9.35               26.94        3.60  

BST

  01/31/18 — 12/31/18     100.00                                            

BUI

  01/31/18     100.00                                            
  02/28/18     96.37        0.03        3.17        1.60        0.45                
    03/31/18 — 12/31/18     40.46        0.48        52.04        26.28        7.35                

 

  (a) 

The Trusts hereby designate the percentages indicated above to the maximum amount allowable by law.

 
  (b)

Represents the portion of the dividends eligible for exemption from U.S. withholding tax for nonresident aliens and foreign corporations.

 
  (c) 

The foreign taxes paid represent taxes incurred by the fund on income 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.

 

 

 

IMPORTANT TAX INFORMATION      129  


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 and other distributions reinvested by Computershare Trust Company, N.A. (the “Reinvestment Plan Agent”) in the respective Trust’s Common 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 name 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 determine to make a capital gain or other distribution, the Reinvestment Plan Agent will acquire shares for the participants’ accounts, depending upon the following circumstances, either (i) through receipt of unissued but authorized shares from each Trust (“newly issued shares”) or (ii) by purchase of outstanding shares on the open market or on each 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 often referred to as a “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 often referred to as a “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.

You may elect not to participate in the Reinvestment Plan and to receive all dividends in cash by contacting the Reinvestment Plan Agent, at the address set forth below.

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 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 all distributions. The automatic reinvestment of all distributions will not relieve participants of any U.S. federal, state or local 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 in BGR, CII, BDJ, BOE, BGY, BME, BCX and BUI that request a sale of shares are subject to a $0.02 per share sold brokerage commission. Participants in BST that request a sale of shares through the Reinvestment Plan Agent are subject to a $2.50 sales fee and a $0.15 per share fee. Per share fees include any applicable brokerage commissions the Reinvestment Plan Agent is required to pay. All correspondence concerning the Reinvestment Plan should be directed to Computershare Trust Company, N.A. through the internet at http://www.computershare.com/blackrock, or in writing to Computershare, P.O. Box 505000, Louisville, KY 40233, Telephone: (800) 699-1236. Overnight correspondence should be directed to the Reinvestment Plan Agent at Computershare, 462 South 4th Street, Suite 1600, Louisville, KY 40202.

 

 

130    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Trustee and Officer Information

 

Independent Trustees (a)
         
Name
Year of Birth
 (b)
   Position(s) Held
(Length of Service)
 (c)
   Principal Occupation(s) During Past Five Years   Number of BlackRock-Advised
Registered Investment Companies
(“RICs”) Consisting of
Investment Portfolios
(“Portfolios”) Overseen
 (d)
   Public Company and Other
Investment Company
Directorships Held During
Past Five Years
Richard E. Cavanagh
1946
   Chair of the Board
and Trustee
(Since 2007)
   Director, The Guardian Life Insurance Company of America since 1998; Board Chair, Volunteers of America (a not-for-profit organization) from 2015 to 2018 (board member since 2009); 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 and Executive Dean from 1987 to 1995; President and Chief Executive Officer, The Conference Board, Inc. (global business research organization) from 1995 to 2007.   71 RICs consisting of 71 Portfolios    None
Karen P. Robards
1950
   Vice Chair of the Board and Trustee
(Since 2007)
   Principal of Robards & Company, LLC (consulting and private investing) since 1987; Co-founder and Director of the Cooke Center for Learning and Development (a not-for-profit organization) since 1987; Investment Banker at Morgan Stanley from 1976 to 1987.   71 RICs consisting of 71 Portfolios    Greenhill & Co., Inc.; AtriCure, Inc. (medical devices) from 2000 until 2017
Michael J. Castellano
1946
   Trustee
(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) from 2009 to June 2015 and since 2017; Director, National Advisory Board of Church Management at Villanova University since 2010; Trustee, Domestic Church Media Foundation since 2012; Director, CircleBlack Inc. (financial technology company) since 2015.   71 RICs consisting of 71 Portfolios    None
Cynthia L. Egan
1955
   Trustee
(Since 2016)
   Advisor, U.S. Department of the Treasury from 2014 to 2015; President, Retirement Plan Services for T. Rowe Price Group, Inc. from 2007 to 2012; executive positions within Fidelity Investments from 1989 to 2007.   71 RICs consisting of 71 Portfolios    Unum (insurance); The Hanover Insurance Group (insurance); Envestnet (investment platform) from 2013 until 2016
Frank J. Fabozzi
1948
   Trustee
(Since 2007)
   Editor of The Journal of Portfolio Management since 1986; Professor of Finance, EDHEC Business School (France) since 2011; Visiting Professor, Princeton University for the 2013 to 2014 academic year and Spring 2017 semester; Professor in the Practice of Finance, Yale University School of Management from 1994 to 2011 and currently a Teaching Fellow in Yale’s Executive Programs; affiliated professor Karlsruhe Institute of Technology from 2008 to 2011.   71 RICs consisting of 71 Portfolios    None

R. Glenn Hubbard

1958

   Trustee
(Since 2007)
   Dean, Columbia Business School since 2004; Faculty member, Columbia Business School since 1988.   71 RICs consisting of 71 Portfolios    ADP (data and information services); Metropolitan Life Insurance Company (insurance); KKR Financial Corporation (finance) from 2004 until 2014
W. Carl Kester
1951
   Trustee
(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, from 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.   71 RICs consisting of 71 Portfolios    None

 

 

TRUSTEE AND OFFICER INFORMATION      131  


Trustee and Officer Information  (continued)

 

Independent Trustees (a) (continued)
         
Name
Year of Birth
 (b)
   Position(s) Held
(Length of Service)
 (c)
   Principal Occupation(s) During Past Five Years   Number of BlackRock-Advised
Registered Investment Companies
(“RICs”) Consisting of
Investment Portfolios
(“Portfolios”) Overseen
 (d)
   Public Company and Other
Investment Company
Directorships Held During
Past Five Years
Catherine A. Lynch
1961
   Trustee
(Since 2016)
   Chief Executive Officer, Chief Investment Officer and various other positions, National Railroad Retirement Investment Trust from 2003 to 2016; Associate Vice President for Treasury Management, The George Washington University from 1999 to 2003; Assistant Treasurer, Episcopal Church of America from 1995 to 1999.   71 RICs consisting of 71 Portfolios    None
Interested Trustees (a)(e)
         
Name
Year of Birth
 (b)
   Position(s) Held
(Length of Service)
 (c)
   Principal Occupation(s) During Past Five Years   Number of BlackRock-Advised
Registered Investment Companies
(“RICs”) Consisting of
Investment Portfolios
(“Portfolios”) Overseen
 (d)
   Public Company and Other
Investment Company
Directorships Held During
Past Five Years
Robert Fairbairn
1965
   Trustee
(Since 2018)
   Senior Managing Director of BlackRock, Inc. since 2010; oversees BlackRock’s Strategic Partner Program and Strategic Product Management Group; Member of BlackRock’s Global Executive and Global Operating Committees; Co-Chair of BlackRock’s Human Capital Committee; Member of the Board of Managers of BlackRock Investments, LLC since 2011; Global Head of BlackRock’s Retail and iShares® businesses from 2012 to 2016.   127 RICs consisting of 304 Portfolios    None
John M. Perlowski
1964
   Trustee
(Since 2015) President and Chief Executive Officer
(Since 2010)
   Managing Director of BlackRock, Inc. since 2009; Head of BlackRock Global Accounting and Product Services since 2009; Advisory Director of Family Resource Network (charitable foundation) since 2009.   127 RICs consisting of 304 Portfolios    None

(a) The address of each Trustee is c/o BlackRock, Inc., 55 East 52nd Street, New York, NY 10055.

(b) Each Independent Trustee will serve until his or her successor is elected and qualifies, or until his or her earlier death, resignation, retirement or removal, or until December 31 of the year in which he or she turns 75. The maximum age limitation may be waived as to any Trustee by action of a majority of the Trustees upon finding of good cause therefor.

(c) 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 Independent Trustees as joining the Board in 2007, each Trustee first became a member of the boards of other legacy MLIM or legacy BlackRock funds as follows: Richard E. Cavanagh, 1994; Frank J. Fabozzi, 1988; R. Glenn Hubbard, 2004; W. Carl Kester, 1995 and Karen P. Robards, 1998.

(d) For purposes of this chart, “RICs” refers to investment companies registered under the 1940 Act and “Portfolios” refers to the investment programs of the BlackRock-advised funds. The Closed-End Complex is comprised of 71 RICs consisting of 71 Portfolios. Mr. Fairbairn and Mr. Perlowski are also board members of the BlackRock Equity-Bond Complex and the BlackRock Equity-Liquidity Complex.

(e) Mr. Fairbairn and Mr. Perlowski are both “interested persons,” as defined in the 1940 Act, of the Trust based on their positions with BlackRock and its affiliates. Mr. Fairbairn and Mr. Perlowski are also board members of the BlackRock Equity-Bond Complex and the BlackRock Equity-Liquidity Complex. Interested Trustees serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. The maximum age limitation may be waived as to any Trustee by action of a majority of the Trustees upon a finding of good cause therefor.

 

 

132    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Trustee and Officer Information  (continued)

 

 

Officers Who Are Not Trustees (a)

     
Name
Year of Birth
 (b)
   Position(s) Held
(Length of Service)
   Principal Occupation(s) During Past Five Years
Jonathan Diorio
1980
   Vice President
(Since 2015)
   Managing Director of BlackRock, Inc. since 2015; Director of BlackRock, Inc. from 2011 to 2015.
Neal J. Andrews
1966
   Chief Financial Officer
(Since 2007)
   Managing Director of BlackRock, Inc. since 2006.
Jay M. Fife
1970
   Treasurer
(Since 2007)
   Managing Director of BlackRock, Inc. since 2007.
Charles Park
1967
   Chief Compliance Officer
(Since 2014)
   Anti-Money Laundering Compliance Officer for the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and the Closed-End Complex from 2014 to 2015; Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and the Closed-End Complex since 2014; Principal of and Chief Compliance Officer for iShares® Delaware Trust Sponsor LLC since 2012 and BlackRock Fund Advisors (“BFA”) since 2006; Chief Compliance Officer for the BFA-advised iShares® exchange traded funds since 2006; Chief Compliance Officer for BlackRock Asset Management International Inc. since 2012.
Janey Ahn
1975
   Secretary
(Since 2012)
   Managing Director of BlackRock, Inc. since 2018; Director of BlackRock, Inc. from 2009 to 2017.

(a) The address of each Officer is c/o BlackRock, Inc., 55 East 52nd Street, New York, NY 10055.

(b) Officers of the Trust serve at the pleasure of the Board.

 

Effective January 1, 2019, Henry Gabbay is appointed as an Independent Trustee of the Trusts.

 

Investment Adviser

BlackRock Advisors, LLC

Wilmington, DE 19809

Sub-Adviser

BlackRock International LTD.(a)

Edinburgh, EH3 8BL

United Kingdom

Custodian and Accounting Agent

State Street Bank and Trust Company

Boston, MA 02111

Transfer Agent

Computershare Trust Company, N.A.

Canton, MA 02021

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

Boston, MA 02116

Distributor

BlackRock Investments, LLC(b)

New York, NY 10022

Legal Counsel

Skadden, Arps, Slate, Meagher & Flom LLP

Boston, MA 02116

Address of the Trusts

100 Bellevue Parkway

Wilmington, DE 19809

 

 

(a) 

For BGR, BOE, BGY, BCX and BUI.

(b) 

For BME.

 

 

TRUSTEE AND OFFICER INFORMATION      133  


Additional Information

 

The Annual Meeting of Shareholders was held on July 30, 2018 for shareholders of record on May 31, 2018, to elect trustee nominees for each Trust. There were no broker non-votes with regard to any of the Trusts.

Shareholders elected the Class II Trustees & Class III Trustee as follows:

 

  

 

  Frank J. Fabozzi (a)     Robert Fairbairn (b)     Catherine A. Lynch (a)     Karen P. Robards (a)  
     Votes For     Votes Withheld     Votes For     Votes Withheld     Votes For     Votes Withheld     Votes For     Votes Withheld  

BDJ

    168,103,932       7,652,038       173,568,079       2,187,891       173,787,777       1,968,193       173,693,401       2,062,569  

BGR

    27,342,989       372,839       27,339,046       376,782       27,349,982       365,846       27,369,145       346,683  

BOE

    63,981,952       924,584       64,038,943       867,593       64,011,922       894,614       63,974,636       931,900  

BME

    8,386,414       178,525       8,407,706       157,233       8,437,822       127,117       8,436,583       128,356  

BGY

    101,925,346       1,204,835       101,968,411       1,161,770       101,954,236       1,175,945       101,924,950       1,205,231  

BCX

    87,875,471       1,695,256       88,115,332       1,455,395       88,133,278       1,437,449       87,985,923       1,584,804  

BUI

    15,385,726       309,882       15,398,351       297,257       15,392,505       303,103       15,373,175       322,433  

BST

    20,874,276       367,818       20,858,996       383,098       20,909,521       332,573       20,907,246       334,848  

 

  (a) 

Class II Trustee.

 
  (b) 

Class III Trustee.

 

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 Michael J. Castellano, Richard E. Cavanagh, Cynthia L. Egan, R. Glenn Hubbard, John M. Perlowski and W. Carl Kester.

The adjourned Annual Meeting of Shareholders was held on August 27, 2018 for shareholders of record on May 31, 2018, to elect director nominees for BlackRock Enhanced Capital and Income Fund, Inc. There were no broker non-votes with regard to the Fund.

Shareholders elected the Class II Directors & Class III Director as follows:

 

  

 

  Robert Fairbairn (a)     R. Glenn Hubbard (b)     W. Carl Kester (b)     John M. Perlowski (b)     Karen P. Robards (b)  
     Votes For     Votes Withheld     Votes For     Votes Withheld     Votes For     Votes Withheld     Votes For     Votes Withheld     Votes For     Votes Withheld  

CII

    40,306,480       1,622,889       40,337,202       1,592,167       40,380,971       1,548,398       40,398,323       1,531,046       40,447,283       1,482,086  

 

  (a) 

Class III Trustee.

 
  (b) 

Class II Trustee.

 

For the Fund listed above, Directors whose term of office continued after the Annual Meeting of Shareholders because they were not up for election are Michael J. Castellano, Richard E. Cavanagh, Cynthia L. Egan, Frank J. Fabozzi, and Catherine A. Lynch.

Fund Certification

The Trusts are listed for trading on the NYSE and have filed with the NYSE their annual chief executive officer certification regarding compliance with the NYSE’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.

General Information

The Trusts, other than BME, do not make available copies of their Statements of Additional Information because the Trusts’ shares, except for BME, are not continuously offered, which means that the Statements of Additional Information of each Trust, other than BME, have not been updated after completion of the respective Trust’s offerings and the information contained in each such Trust’s Statement of Additional Information may have become outdated.

BME’s Statement of Additional Information includes additional information about its Board and is available without charge upon request by calling 1-800-882-0052.

During the period there were no material changes in the Trusts’ investment objectives or policies or to the Trusts’ charters or by-laws that would delay or prevent a change of control of the Trusts 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.

In accordance with Section 23(c) of the Investment Company Act of 1940, each Trust may from time to time purchase shares of its common stock in the open market or in private transactions.

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. Any reference to BlackRock’s website in this report 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.

 

 

134    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Additional Information  (continued)

 

Electronic Delivery

Shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual shareholder reports by enrolling in the electronic delivery program. Electronic copies of shareholder reports are available on BlackRock’s website.

To enroll in electronic delivery:

Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:

Please contact your financial advisor. Please note that not all investment advisers, banks or brokerages may offer this service.

Householding

The Trusts will mail only one copy of shareholder documents, 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 (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. The Trusts’ Forms N-Q may also be obtained upon request and without charge by calling (800) 882-0052.

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 upon request and without charge (1) 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 as well as certain other material information as necessary from time to time. Investors and others are advised to 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.

Shelf Offering Program

From time-to-time, each Trust may seek to raise additional equity capital through an equity shelf program (a “Shelf Offering”). In a Shelf Offering, a Trust may, subject to market conditions, raise additional equity capital by issuing new Common Shares from time to time in varying amounts at a net price at or above the Trust’s net asset value (“NAV”) per Common Share (calculated within 48 hours of pricing). While any such Shelf Offering may allow a Trust to pursue additional investment opportunities without the need to sell existing portfolio investments, it could also entail risks — including that the issuance of additional Common Shares may limit the extent to which the Common Shares are able to trade at a premium to NAV in the secondary market.

None of the Trusts, other than BME, have filed a registration statement with respect to any current Shelf Offerings. This report is not an offer to sell these Trusts” Common Shares and is not a solicitation of an offer to buy these Trusts” Common Shares. If any of the Trusts other than BME file a registration statement with respect to any current Shelf Offering, the prospectus contained therein will contain more complete information about such Trusts and should be read carefully before investing.

BME has filed a final prospectus with the SEC in connection with its Shelf Offering. This report and the prospectus of BME are not offers to sell BME Common Shares or solicitations of an offer to buy BME Common Shares in any jurisdiction where such offers or sales are not permitted. The prospectus of BME contains important information about the Trust, including its investment objective, risks, charges and expenses. Investors are urged to read the prospectus of BME carefully and in its entirety before investing. Copies of the final prospectus for BME can be obtained from BlackRock at http://www.blackrock.com.

 

ADDITIONAL INFORMATION      135  


Additional Information  (continued)

 

Dividend Policy

Each Trust’s dividend policy is to distribute all or a portion of its net investment income to its shareholders on a monthly basis. In order to provide shareholders with a more stable level of dividend distributions, the distributions paid by the Trusts for any particular month may be more or less than the amount of net investment income earned by the Trusts during such month. The portion of distributions that exceeds a Trust’s current and accumulated earnings and profits, which are measured on a tax basis, will constitute a nontaxable return of capital. Distributions in excess of a Trust’s taxable income and net capital gains, but not in excess of a Trust’s earnings and profits, will be taxable to shareholders as ordinary income and will not constitute a nontaxable return of capital. 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.

 

 

136    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Glossary of Terms Used in this Report

 

Currency

AUD    Australian Dollar
CAD    Canadian Dollar
CHF    Swiss Franc
DKK    Danish Krone
EUR    Euro
GBP    British Pound
HKD    Hong Kong Dollar
INR    Indian Rupee
JPY    Japanese Yen
NOK    Norwegian Krone
NZD    New Zealand Dollar
SEK    Swedish Krona
SGD    Singapore Dollar
TWD    Taiwan New Dollar
USD    U.S. Dollar
ZAR    South African Rand
  
Portfolio Abbreviations
ADR    American Depositary Receipts
GDR    Global Depositary Receipts
 

 

 

GLOSSARY OF TERMS USED IN THIS REPORT      137  


This report is intended for current holders. 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-BK9-12/18-AR    LOGO


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, the code of ethics was amended to update certain information and to make other non-material changes. During the period covered by this report, there have been no waivers granted under the code of ethics. The registrant undertakes to provide a copy of the code of ethics to any person upon request, without charge, who calls 1-800-882-0052, option 4.

 

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

    

Henry Gabbay

    

Catherine A. Lynch

    

Karen P. Robards

 

    

The registrant’s board of directors has determined that Karen P. Robards qualifies as a financial expert pursuant to Item 3(c)(4) of Form N-CSR.

 

    

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.

 

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:

 

2


      (a) Audit Fees    (b) Audit-Related Fees1    (c) Tax Fees2    (d) All Other Fees
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 Enhanced International Dividend Trust    $50,592    $50,597    $0    $7,500    $19,700    15,147    $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 ( the “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 (“Affiliated 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                           $2,274,000           $2,129,000

1 The nature of the services includes assurance and related services reasonably related to the performance of the audit or review of financial statements not included in Audit Fees, including accounting consultations, agreed-upon procedure reports, attestation reports, comfort letters, out-of-pocket expenses and internal control reviews not required by regulators.

2 The nature of the services includes tax compliance and/or tax preparation, including services relating to the filing or amendment of federal, state or local income tax returns, regulated investment company qualification reviews, taxable income and tax distribution calculations.

3 Non-audit fees of $2,274,000 and $2,129,000 for the current fiscal year and previous fiscal year, respectively, were paid to the Fund’s principal accountant in their entirety by BlackRock, in connection with services provided to the Affiliated Service Providers of the Fund and of certain other funds sponsored and advised by BlackRock or its affiliates for a service organization review and an accounting research tool subscription. These amounts represent aggregate fees paid by BlackRock and were not allocated on a per fund basis.

(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 Affiliated Service Providers that relate directly to the operations and the financial reporting of the registrant. Certain of these non-audit services that the Committee believes are (a) consistent with the SEC’s auditor independence rules and (b) routine and recurring services that will not impair the independence of the independent accountants may be approved by the Committee without consideration on a specific case-by-case basis (“general pre-approval”). The term of any general pre-approval is 12 months from the date of the pre-approval, unless the Committee provides for a different period. Tax or other non-audit services provided to the registrant which have a direct impact on the operations or financial reporting of the registrant will only be deemed pre-approved provided that any individual project does not exceed $10,000 attributable to the registrant or $50,000 per project. For this purpose, multiple projects will be aggregated to determine if they exceed the previously mentioned cost levels.

 

3


Any proposed services exceeding the pre-approved cost levels will require specific pre-approval by the Committee, as will any other services not subject to general pre-approval (e.g., unanticipated but permissible services). The Committee is informed of each service approved subject to general pre-approval at the next regularly scheduled in-person board meeting. At this meeting, an analysis of such services is presented to the Committee for ratification. The Committee may delegate to the Committee Chairman the authority to approve the provision of and fees for any specific engagement of permitted non-audit services, including services exceeding pre-approved cost levels.

(e)(2) None of the services described in each of Items 4(b) through (d) were approved by the Committee pursuant to the de minimis exception in paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) Not Applicable

(g) The aggregate non-audit fees, defined as the sum of the fees shown under “Audit-Related Fees,” “Tax Fees” and “All Other Fees,” paid to the accountant for services rendered by the accountant to the registrant, the Investment Adviser and the Affiliated Service Providers were:

 

Entity Name   

        Current Fiscal Year        

        End        

  

        Previous Fiscal Year        

        End        

  

                                             

BlackRock Enhanced International Dividend Trust      $19,700        $22,647       

Additionally, the amounts billed by D&T in connection with services provided to the Affiliated Service Providers of the Fund and of other funds sponsored or advised by BlackRock or its affiliates during the current and previous fiscal years for a service organization review and an accounting research tool subscription were:

 

Current Fiscal    

Year End    

  

  Previous Fiscal    

Year End    

$2,274,000        $2,129,000    

These amounts represent aggregate fees paid by BlackRock and were not allocated on a per fund basis.

(h) The Committee has considered and determined that the provision of non-audit services that were rendered to the Investment Adviser, and the Affiliated 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

 

4


      

Frank J. Fabozzi

      

Henry Gabbay

      

Catherine A. Lynch

      

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.

(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

(a)(1) As of the date of filing this Report:

The registrant is managed by a team of investment professionals comprised of Kyle G. McClements, CFA, Managing Director at BlackRock, Christopher Accettella, Director at BlackRock and Stuart Reeve, Managing Director at BlackRock and Andrew Wheatley-Hubbard, Director at BlackRock. Messrs. McClements, Accettella Reeve and Wheatley-Hubbard 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. McClements and Accettella have been members of the Fund’s portfolio management team

 

5


since 2005 and 2012, respectively.    Messrs. Reeve and Wheatley-Hubbard have been members of the Fund’s portfolio management team since 2017.

 

Portfolio Manager    Biography
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.
Stuart Reeve    Managing Director of BlackRock since 2012; Director of BlackRock from 2006 to 2011.
Andrew Wheatley-Hubbard    Director of BlackRock since 2016; Vice President of BlackRock from 2012 to 2015; Associate of BlackRock from 2010 to 2011; Analyst of BlackRock from 2007 to 2009.

(a)(2) As of December 31, 2018:

 

     

(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

Kyle G. McClements, CFA

   12    11    1    0    0    0
    

  $21.24 Billion  

 

     $7.84 Billion        $428.1 Million      $0    $0    $0

Christopher Accettella

   11    14    1    0    0    0
    

$21.13 Billion

 

   $7.99 Billion    $428.1 Million    $0    $0    $0

Stuart Reeve

   5    10    2    0    0    0
    

$3.66 Billion

 

   $2.50 Billion    $147.5 Million    $0    $0    $0

Andrew Wheatley-Hubbard

   5    12    2    0    0    0
    

$3.66 Billion

 

   $2.50 Billion    $147.5 Million    $0    $0    $0

(iv) Portfolio Manager 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

 

6


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 Messrs. Reeve and Wheatley-Hubbard may be managing hedge fund and/or long only accounts, or may be part of a team managing hedge fund and/or long only accounts, subject to incentive fees. Messrs. Reeve and Wheatley-Hubbard may therefore be entitled to receive a portion of any incentive fees earned on such accounts.

As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client fairly. When BlackRock purchases or sells securities for more than one account, the trades must be allocated in a manner consistent with its fiduciary duties. BlackRock attempts to allocate 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 December 31, 2018:

Portfolio Manager Compensation Overview

The discussion below describes the portfolio managers’ compensation as of December 31, 2018.

BlackRock’s financial arrangements with its portfolio managers, its competitive compensation and its career path emphasis at all levels reflect the value senior management places on key resources. Compensation may include a variety of components and may vary from year to year based on a number of factors. The principal components of compensation include a base salary, a performance-based discretionary bonus, participation in various benefits programs and one or more of the incentive compensation programs established by BlackRock.

Base Compensation. Generally, portfolio managers receive base compensation based on their position with the firm.

Discretionary Incentive Compensation- Messrs. Reeve and Wheatley-Hubbard

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

 

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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: 70% MSACWLDNET / 30% LIBOR_3MO Index; MSCI All Country World ex US - Net Return; MSCI World Ex Japan Gross TR Index - in JPY; BGO Opt Overwriting Strategy Composite Index V2; MSCI All Country World Net TR Index - in GBP; MSCI All Country World Index (Net Total Return); 70% MSACWNETJP & 30% LIB3MOJPY; BGY Opt Overwriting Strategy Composite Index V2; Dow Jones Islamic Index; MSCI World NET TR in GBP Index; MSCI World Net TR Index; FTSE World ex UK - expressed in GBP; FTSE World ex UK; MSCI ACWI Financials Index.

A smaller element of portfolio manager discretionary compensation may include consideration of: financial results, expense control, profit margins, strategic planning and implementation, quality of client service, market share, corporate reputation, capital allocation, compliance and risk control, leadership, technology and innovation. These factors are considered collectively by BlackRock management and the relevant Chief Investment Officers.

Discretionary Incentive Compensation - Messrs. Accettella and McClements    

Discretionary incentive compensation is a function of several components: the performance of BlackRock, Inc., the performance of the portfolio manager’s group within BlackRock, the investment performance, including risk-adjusted returns, of the firm’s assets or strategies under management or supervision by that portfolio manager, and/or the individual’s performance and contribution to the overall performance of these portfolios and BlackRock. Among other things, BlackRock’s Chief Investment Officers make a subjective determination with respect to each portfolio manager’s compensation based on the performance of the Funds, other accounts or strategies managed by each portfolio manager. Performance is generally measured on a pre-tax basis over various time periods including 1-, 3- and 5- year periods, as applicable. The performance of some funds, other accounts or strategies may not be measured against a specific benchmark.

Distribution of Discretionary Incentive Compensation.

Discretionary incentive compensation is distributed to portfolio managers in a combination of cash, deferred BlackRock, Inc. stock awards, and/or deferred cash awards that notionally track the return of certain BlackRock investment products.

Portfolio managers receive their annual discretionary incentive compensation in the form of cash. Portfolio managers whose total compensation is above a specified threshold also receive deferred BlackRock, Inc. stock awards annually as part of their discretionary incentive compensation. Paying a portion of discretionary incentive compensation in the form of deferred BlackRock, Inc. 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. In some cases, additional deferred BlackRock, Inc. stock may be granted to certain key employees as part of a long-term incentive award to aid in retention, align interests with long-term shareholders and motivate performance. Deferred BlackRock, Inc. stock awards are generally granted in the form of BlackRock, Inc. restricted stock units that vest pursuant to the terms of the applicable plan and, once

 

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vested, settle in BlackRock, Inc. common stock. The portfolio managers of this Fund have deferred BlackRock, Inc. stock awards.

For certain portfolio managers, a portion of the discretionary incentive compensation is also distributed in the form of deferred cash awards that notionally track the returns of select BlackRock investment products they manage, which provides direct alignment of portfolio manager discretionary incentive compensation with investment product results. Deferred cash awards vest ratably over a number of years and, once vested, settle in the form of cash. Only portfolio managers who manage specified products and whose total compensation is above a specified threshold are eligible to participate in the deferred cash award program.

Other Compensation Benefits. In addition to base salary 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 ($275,000 for 2018). 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 for investment in BlackRock, Inc. common stock at a 5% discount on the fair market value of the stock on the purchase date. Annual participation in the ESPP is limited to the purchase of 1,000 shares of common stock or a dollar value of $25,000 based on its fair market value on the purchase date. Messrs. McClements and Accettella are eligible to participate in these plans.

United Kingdom-based portfolio managers are also eligible to participate in broad-based plans offered generally to BlackRock employees, including broad-based retirement, health and other employee benefit plans. For example, BlackRock has created a variety of incentive savings plans in which BlackRock employees are eligible to participate, including the BlackRock Retirement Savings Plan (RSP) and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution to the RSP is between 6% to 15% (dependent on service related entitlement) of eligible pay capped at £150,000 per annum. The RSP offers a range of investment options, including several collective investment funds managed by the firm. BlackRock contributions follow the investment direction set by participants for their own contributions or, in the absence of an investment election being made, 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 for investment in BlackRock 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 US dollar value of $25,000 based on its fair market value on the purchase date. Messrs. Reeve and Wheatley-Hubbard are eligible to participate in these plans.

(a)(4) Beneficial Ownership of Securities – As of December 31, 2018.

 

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Portfolio Manager   

Dollar Range of Equity Securities            

of the Fund Beneficially Owned

  

                                 

Kyle G. McClements, CFA  

   $10,001- $50,000     

Christopher Accettella

   $10,001 - $50,000   

Stuart Reeve

   $10,001- $50,000   

Andrew Wheatley-

Hubbard

   $10,001- $50,000   

(b) Not Applicable

 

Item 9 –

Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

 

Period    (a) Total    (b) Average    (c) Total Number of    (d) Maximum Number of
     Number of  
Shares
Purchased
   Price Paid per  
Share
   Shares Purchased as Part  
of Publicly Announced
Plans or Programs
   Shares that May Yet Be
Purchased Under the Plans  
or Programs1

July 1 – 31, 2018

   N/A    N/A    N/A    5,452,450

August 1 – 31, 2018

   N/A    N/A    N/A    5,452,450

September 1 – 30, 2018

   N/A    N/A    N/A    5,452,450

October 1- 31, 2018

   475,094    $5.2853    475,094    4,977,356

November 1 – 30, 2018

   360,834    $5.2472    360,834    4,616,522

December 1 – 31, 2018

   506,493    $4.9533    506,493    4,904,161

Total:

   1,342,421    $5.1498    506,493    4,904,161

1On September 6, 2017, the Fund announced a continuation of the open market share repurchase program, pursuant to which the Fund may repurchase through November 30, 2018 up to 5% of its outstanding shares based on common shares outstanding on November 30, 2017, in open market transactions. On September 7, 2018, the Fund announced a further continuation of its open market share repurchase program. Commencing on December 1, 2018, the Fund may repurchase through November 30, 2019, up to 5% of its common shares outstanding as of the close of business on November 30, 2018, subject to certain conditions.

 

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 –

Disclosure of Securities Lending Activities for Closed-End Management Investment Companies

 

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(a) The following table shows the dollar amounts of income, and dollar amounts of fees and/or compensation paid, relating to the Fund’s securities lending activities during the fiscal year ended December 31, 2018. The Fund did not engage in any securities lending activity during the fiscal year ended December 31, 2018.

 

BlackRock Enhanced International Dividend Trust  
  (1)      Gross income from securities lending activities      $0          
  (2)      Fees and/or compensation for securities lending activities and related services   
         (a)    Securities lending income paid to BIM for services as securities lending agent      $0                
         (b)    Collateral management expenses (including fees deducted from a polled cash collateral vehicle) not included in (a)      $0  
         (c)    Administrative fees not included in (a)      $0  
         (d)    Indemnification fees not included in (a)      $0  
         (e)    Rebate (paid to borrowers)      $0  
         (f)    Other fees not included in (a)      $0  
  (3)      Aggregate fees/compensation for securities lending activities      $0          
  (4)      Net income from securities lending activities      $0          

(b) BlackRock Investment Management, LLC (“BIM”) serves as securities lending agent for the Fund and in that role administers the Fund’s securities lending program pursuant to the terms of a securities lending agency agreement entered into between the Fund and BIM.

 

Item 13 –

Exhibits attached hereto

 

    

(a)(1) – Code of Ethics – See Item 2

 

    

(a)(2) – Certifications – Attached hereto

 

    

(a)(3) – Not Applicable

 

    

(a)(4) – Not Applicable

 

    

(b) – Certifications – Attached hereto

 

    

(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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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 Enhanced International Dividend Trust

By:           /s/ John M. Perlowski                            
  John M. Perlowski
 

Chief Executive Officer (principal executive officer) of

BlackRock Enhanced International Dividend Trust

Date: March 8, 2019

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 Enhanced International Dividend Trust

Date: March 8, 2019

 

By:           /s/ Neal J. Andrews                              
  Neal J. Andrews
 

Chief Financial Officer (principal financial officer) of

BlackRock Enhanced International Dividend Trust

Date: March 8, 2019

 

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