BlackRock Global Opportunities Equity 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: 811-21729

Name of Fund:  BlackRock Global Opportunities Equity Trust (BOE)

Fund Address:   100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Global Opportunities              Equity 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: 12/31/2016

Date of reporting period: 12/31/2016


Item 1 – Report to Stockholders


DECEMBER 31, 2016        

 

 

ANNUAL REPORT

 

      BLACKROCK®

 

BlackRock Energy and Resources Trust (BGR)

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

BlackRock Enhanced Equity Dividend Trust (BDJ)

BlackRock Global Opportunities Equity Trust (BOE)

BlackRock Health Sciences Trust (BME)

BlackRock International Growth and Income Trust (BGY)

BlackRock Resources & Commodities Strategy Trust (BCX)

BlackRock Science and Technology Trust (BST)

BlackRock Utility and Infrastructure Trust (BUI)

 

 

 

Not FDIC Insured May Lose Value No Bank Guarantee  

 

 



          

 

 

      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 Global Opportunities Equity Trust’s (BOE), BlackRock Health Sciences Trust’s (BME), BlackRock International Growth and Income Trust’s (BGY), BlackRock Resources & Commodities Strategy Trust’s (BCX), BlackRock Science and Technology Trust’s (BST) and BlackRock Utility and Infrastructure 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 the 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 federal income tax purposes.

December 31, 2016

 

      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*

     $ 0.275184                    $ 0.720816      $ 0.996000        28 %       0 %       0 %       72 %       100 %

CII*

     $ 0.122292                    $ 1.026108      $ 1.148400        11 %       0 %       0 %       89 %       100 %

BDJ*

     $ 0.158965                    $ 0.401435      $ 0.560400        28 %       0 %       0 %       72 %       100 %

BOE*

     $ 0.118299                    $ 0.931701      $ 1.050000        11 %       0 %       0 %       89 %       100 %

BME

     $ 0.028393             $ 2.971607             $ 3.000000        1 %       0 %       99 %       0 %       100 %

BGY*

     $ 0.081617                    $ 0.440383      $ 0.522000        16 %       0 %       0 %       84 %       100 %

BCX*

     $ 0.135692                    $ 0.441308      $ 0.577000        24 %       0 %       0 %       76 %       100 %

BST*

     $ 0.006420                    $ 1.193580      $ 1.200000        1 %       0 %       0 %       99 %       100 %

BUI*

     $ 0.536110      $ 0.095500      $ 0.373052      $ 0.447337      $ 1.452000        37 %       6 %       26 %       31 %       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 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, 2016:

 

     Exchange Symbol      Amount Per Common Share        
 

  BGR

     $0.0776     
 

CII

     $0.0828     
 

  BDJ

     $0.0467     
 

   BOE

     $0.0780     
 

   BME

     $0.2000     
 

   BGY

     $0.0380     
 

   BCX

     $0.0446     
 

  BST

     $0.1000     
   

 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 each Trust’s prospectus for a more complete description of its risks.

 

 

2    ANNUAL REPORT    DECEMBER 31, 2016     


Table of Contents

 

        
       Page   

Section 19(a) Notices

     2    

Section 19(b) Disclosure

     2    

The Markets in Review

     4    

Annual Report:

  

The Benefits and Risks of Option Over-Writing

     5    

Trust Summaries

     6    

Derivative Financial Instruments

     25    

Financial Statements:

  

Schedules of Investments

     26    

Statements of Assets and Liabilities

     102    

Statements of Operations

     104    

Statements of Changes in Net Assets

     106    

Statements of Cash Flows

     111    

Financial Highlights

     114    

Notes to Financial Statements

     123    

Report of Independent Registered Public Accounting Firm

     138    

Important Tax Information

     139    

Automatic Dividend Reinvestment Plans

     140    

Officers and Trustees

     141    

Additional Information

     145    

 

     ANNUAL REPORT    DECEMBER 31, 2016    3


The Markets in Review         

Dear Shareholder,

The year 2016 started on a fraught note with worries about slowing growth in China, plunging oil prices and sliding share prices. Then reflationary expectations in the United States helped drive a second-half global growth pick-up and big market reversals. As such, higher-quality asset classes such as Treasury bonds, municipals and investment grade credit prevailed in the first half of the year, only to struggle in the second. In contrast, risk assets sold off at the start of the year and rebounded in the latter half, with some asset classes posting strong year-end returns.

A key takeaway from 2016’s market performance is that economics can trump politics. The global reflationary theme – governments taking policy action to support growth – was the dominant driver of 2016 asset returns, outweighing significant political upheavals and uncertainty. This trend accelerated after the U.S. election on expectations for an extra boost to U.S. growth via fiscal policy.

Markets were remarkably resilient during the year. Spikes in equity volatility after big surprises such as the U.K.’s vote to leave the European Union and the outcome of the U.S. presidential election were short-lived. Instead, political surprises and initial sell-offs were seized upon as buying opportunities. We believe this reinforces the case for taking the long view rather than reacting to short-term market noise.

Asset returns varied widely in 2016. Perceived safe assets such as government bonds and low-volatility shares underperformed the higher-risk areas of the market. And the reversal of longstanding trends created opportunities, such as in the recovery of value stocks and commodities.

We expect some of these trends to extend into 2017 and see the potential for more flows into risk assets this year. Learn more by reading our market insights at blackrock.com.

Sincerely,

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

Total Returns as of December 31, 2016
     6-month       12-month   

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

    7.82%          11.96%  

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

    18.68             21.31

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

    5.67               1.00

Emerging market equities
(MSCI Emerging Markets Index)

    4.49             11.19

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

    0.18               0.33

U.S. Treasury securities
(BofA Merrill Lynch 10- Year U.S. Treasury Index)

    (7.51)             (0.16)

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

    (2.53)              2.65

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

    (3.43)              0.77

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

    7.40             17.13
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.
 

 

4    THIS PAGE NOT PART OF YOUR TRUST REPORT          


The Benefits and Risks of Option Over-Writing         

 

In general, the goal of each of the Trusts is to provide total return through a combination of current income and realized and unrealized gains (capital appreciation). The Trusts seek to pursue this goal primarily by investing in a portfolio of equity securities and utilizing an option over-writing strategy in an effort to enhance 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 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.

 

 

     ANNUAL REPORT    DECEMBER 31, 2016    5


Trust Summary as of December 31, 2016      BlackRock Energy and Resources Trust  

 

      Trust Overview

BlackRock Energy and Resources Trust’s (BGR) (the “Trust”) investment objective is to provide total return through a combination of current income, current gains and long-term capital appreciation. The Trust seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its total assets in equity securities of energy and natural resources companies and equity derivatives with exposure to the energy and natural resources industry. The Trust may invest directly in such securities or synthetically through the use of derivatives. The Trust 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, 2016 ($ 14.44)1

   6.45%

Current Monthly Distribution per Common Share2

   $0.0776

Current Annualized Distribution per Common Share2

   $0.9312

 

  1   

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

 

       Past performance does not guarantee future results.

 

  2   

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

 

      Performance and Portfolio Management Commentary

 

Returns for the 12-month period ended December 31, 2016 were as follows:

 

     Returns Based On
      Market Price   Net Asset Value

BGR1,2

      24.01%      25.07%

Lipper Natural Resources Funds3

      37.40%      32.14%

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

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

 

  3   

Average return.

 

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

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

What factors influenced performance?

 

 

The Trust’s positions in the U.S. exploration & production companies Laredo Petroleum, Inc. and Energen Corp. were the largest detractors from performance. The investment adviser exited both positions early in the period due to its concerns about the two companies’ significant financial leverage. As a result, the Trust was not in a position to benefit from their subsequent recovery.

 

 

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 negative impact on performance given the strength in the overall sector.

 

 

 

After losing ground in the initial weeks of the year, energy stocks rallied to close as one of the top-performing market segments of 2016. An improving balance of supply and demand for oil, together with expectations for stronger global growth, provided a firm underpinning for the sector. Consistent with the broader environment, the Trust produced a robust absolute return in the 12-month period.

 

 

Royal Dutch Shell PLC and BG Energy Holdings Ltd. completed a merger in February, whereby the Trust’s substantial position in the latter stock made a positive contribution to performance.

 

 

ExxonMobil Corp., which announced a significant oil discovery off the coast of Guyana in conjunction with Hess Corp., was the largest contributor in the period. The deep-water Liza field could hold as many as 1.4 billion barrels of oil equivalent, making it one of a handful of billion-barrel discoveries in the last half-decade. Exxon found oil in the Liza field in 2015 when it drilled its first well in the area, and a second well revealed the potential for twice as much crude. ExxonMobil shares were also boosted by the significant increase in oil prices that occurred during 2016.

 

 

 

6    ANNUAL REPORT    DECEMBER 31, 2016     


       BlackRock Energy and Resources Trust  

 

      Performance and Portfolio Management Commentary (concluded)

Describe recent portfolio activity.

 

 

After holding an underweight position in the refining subsector for much of 2015, the Trust moved to reduce the extent of this underweight early in the period by adding positions in the refining stocks Valero Energy and Tesoro Corp., both of which are benefiting from strong U.S. gasoline consumption. Additionally, the Trust rotated its oil services exposure by reducing its weighting in Schlumberger Ltd. and initiating a position in Baker Hughes, Inc.

Describe portfolio positioning at period end.

 

 

The investment adviser positioned the Trust with a higher-quality bias, focusing on companies with robust balance sheets, below-average costs and higher-quality management teams. At the sub-sector level, the Trust remained overweight in the exploration and production industry and underweight in larger, integrated producers. The investment adviser saw the former group as being in a better position to benefit from the improving backdrop for oil prices.

 

 

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

 

      12/31/16      12/31/15      Change           High      Low    

Market Price

   $14.44      $12.53        15.24%        $15.00        $10.05  

Net Asset Value

   $16.33      $14.05        16.23%        $16.71        $11.84  

 

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

 

 

LOGO

 

      Overview of the Trust’s Total Investments*

 

Ten Largest Holdings    12/31/16

Exxon Mobil Corp.

   10%

Royal Dutch Shell PLC, A Shares — ADR

   8

BP PLC

   6

Chevron Corp.

   6

ConocoPhillips

   5

EOG Resources, Inc.

   5

Anadarko Petroleum Corp.

   4

Baker Hughes, Inc.

   4

Schlumberger Ltd.

   4

Occidental Petroleum Corp.

   4

 

  *   Excludes option positions and money market funds.
Industry Allocation    12/31/16   12/31/15

Oil, Gas & Consumable Fuels

   91%   93%

Energy Equipment & Services

     9%     7%

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.

 

 

 

     ANNUAL REPORT    DECEMBER 31, 2016    7


Trust Summary as of December 31, 2016      BlackRock Enhanced Capital and Income Fund, Inc.  

 

      Trust Overview

BlackRock Enhanced Capital and Income Fund, Inc.’s (CII) (the “Trust”) investment objective is to provide investors with a combination of current income and capital appreciation. The Trust seeks to achieve its investment objective by investing in a portfolio of equity securities of U.S. and foreign issuers. The Trust may invest directly in such securities or synthetically through the use of derivatives. The Trust 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 objectives 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, 2016 ($ 13.71)1

   7.25%

Current Monthly Distribution per Common Share2

   $0.0828

Current Annualized Distribution per Common Share2

   $0.9936

 

  1   

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

 

  2   

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

 

      Performance and Portfolio Management Commentary

 

Returns for the 12-month period ended December 31, 2016 were as follows:

 

     Returns Based On
        Market Price     Net Asset Value

CII1,2

       5.56 %       8.66 %

S&P 500® Index

       N/A       11.96 %

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

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

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

What factors influenced performance?

 

 

In sector terms, health care was the prime detractor from relative performance due to weakness in pharmaceuticals and, to a lesser extent, biotechnology. Consumer discretionary also weighed, in particular specialty retail and household durables, as did the Trust’s underweight exposure to telecommunication services and energy. Helping to partially offset negative results was strong selection in financials, where banks were a standout. An underweight to real estate and stock selection in materials proved advantageous as well.

 

 

On a stock-specific basis, Teva Pharmaceutical Industries Ltd. was the largest single detractor. The stock underperformed amid concerns over exclusivity for the company’s key drug Copaxone, as well as broad pricing pressures in the generic segment throughout the year. Earlier in the period, concerns that the Allergan deal would be delayed also weighed on the stock. The deal ultimately closed, but it was considerably later than expected, thereby depriving Teva of capturing revenue from a high volume generic launch. Teva’s management turnover in the fourth quarter and a need to revise guidance twice over the last six months further contributed to negative sentiment.

 

 

Positions in CVS Health Corp. and Gilead Sciences Inc. were also a drag. CVS underperformed as the company lost a number of high-profile contracts to rival Walgreens (also a holding). While the value of any individual contract is

   

small, investors were concerned that CVS’s advantage may be under threat as the UnitedHealth-Walgreens Boots Alliance partnership combines UnitedHealth’s PBM offering with Walgreens Boots Alliance’s convenient store locations, a combination previously unique to CVS. Later in the reporting period, the company lowered its long-term guidance, causing additional share weakness. The major reason behind lower growth rates is lost scripts due to a narrow network arrangement in favor of Walgreens and pharmacy reimbursement changes. Gilead continues to execute well in its HIV business segment, but is facing significant uncertainty in the HCV (Hepatitis C) business following several years of exceptional revenue growth. The investment adviser believes that, at current levels, Gilead shares are pricing in significant revenue declines in HCV and is comfortable owning shares for eventual stabilization in the HCV segment and a likely deployment of cash toward value-creating business development opportunities.

 

 

The top individual contributors in the 12 months were Bank of America Corp. and JPMorgan Chase & Co. The stocks outperformed most notably in the second half of the reporting period on strong earnings reports led by solid fee-based revenue performance (trading, payments & mortgage), as well as the increased likelihood of a December rate hike. Bank holdings’ strong price momentum continued (even accelerated) following the election of Donald Trump as investors positioned for improving future earnings power driven by higher economic growth, inflation, corporate tax reform, and interest rates (the Fed ultimately raised rates), as well as a softening of regulations that could lead to accelerating capital returns and potentially lower legal & compliance costs.

 

 

Consumer finance name SLM also added value. Shares outperformed as the “bear case” scenario of government subsidized tuition plans, as proposed by the Clinton campaign, was eliminated with a Trump victory. Moreover, Trump has proposed restoring private sector participation in student financing, which holds the potential to materially expand the market for private student loans, where SLM holds a dominant 50%+ market share.

 

 

8    ANNUAL REPORT    DECEMBER 31, 2016     


       BlackRock Enhanced Capital and Income Fund, Inc.  

 

      Performance and Portfolio Management Commentary (concluded)

 

 

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 negative impact on performance during the period.

Describe recent portfolio activity.

 

 

Due to a combination of portfolio trading activity and market movement during the 12-month period, the Trust’s exposure to the information technology (“IT”) and energy sectors increased, particularly semiconductors, soft-

   

ware and oil, gas & consumable fuels. Materials exposure increased as well. The largest reduction was in health care, largely with respect to providers & services. Consumer discretionary exposure also declined.

Describe portfolio positioning at period end.

 

 

Relative to the S&P 500® Index, the Trust ended the period with its largest overweights in the IT, consumer discretionary and financials sectors. The Trust’s largest relative underweights were in industrials, real estate and telecommunication services.

 

 

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

 

      Market Price and Net Asset Value Per Share Summary

 

      12/31/16      12/31/15      Change      High      Low  

Market Price

   $13.71      $14.14          (3.04 )%      $14.14          $11.62

Net Asset Value

   $15.08      $15.11          (0.20 )%      $15.29          $13.06

 

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

 

 

LOGO

 

      Overview of the Trust’s Total Investments*

 

Ten Largest Holdings    12/31/16

Apple, Inc.

       5 %

JPMorgan Chase & Co.

       4

Alphabet, Inc., Class A

       4

Bank of America Corp.

       4

Microsoft Corp.

       4

Comcast Corp., Class A

       3

Altria Group, Inc.

       3

Cisco Systems, Inc.

       3

U.S. Bancorp

       2

Chevron Corp.

       2

 

  *   Excludes option positions and money market funds.
Sector Allocation    12/31/16   12/31/15

Information Technology

       26 %       23 %

Financials

       17       18

Consumer Discretionary

       15       17

Health Care

       14       18

Consumer Staples

       9       8

Energy

       8       5

Industrials

       6       7

Materials

       4       3

Utilities

       1       1

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.

 

 

     ANNUAL REPORT    DECEMBER 31, 2016    9


Trust Summary as of December 31, 2016      BlackRock Enhanced Equity Dividend Trust  

 

      Trust Overview

BlackRock Enhanced Equity Dividend Trust’s (BDJ) (the “Trust”) primary investment objective is to provide current income and current gains, with a secondary investment objective of long-term capital appreciation. The Trust seeks to achieve its investment objectives by investing in common stocks that pay dividends and have the potential for capital appreciation and by utilizing an option writing (selling) strategy to 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, 2016 ($ 8.15)1

   6.88%

Current Monthly Distribution per Common Share2

   $0.0467

Current Annualized Distribution per Common Share2

   $0.5604

 

  1   

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

 

  2   

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

 

      Performance and Portfolio Management Commentary

 

Returns for the 12-month period ended December 31, 2016 were as follows:

 

     Returns Based On
        Market Price     Net Asset Value

BDJ1,2

       15.11 %       13.90 %

Russell 1000® Value Index

       N/A       17.34 %

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

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

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

What factors influenced performance?

 

 

The largest detractor from relative return came from a combination of stock selection and allocation decisions within the industrials sector. An underweight to the machinery and airlines industries weighed on relative performance. The Trust’s underweight to machinery was predicated on the view that weak end-market fundamentals limit attractive investment opportunities in the near term. Overweight positions in General Electric Co. and Honeywell International, Inc. also detracted from relative returns. Additionally, stock selection in the consumer staples sector subtracted from relative performance. In particular, non-benchmark holding Kroger Co. lagged after lowering its earnings forecast and reporting weaker-than-consensus earnings, due in part to food price deflation and increased competition. Lastly, stock selection within the materials and information technology sectors detracted from relative return.

 

The largest contribution to relative performance for the 12-month period came from stock selection and allocation decisions within the financials sector. Notably, the Trust’s large overweight position in the banking industry proved beneficial. Bank earnings in the second half of 2016 were generally positive and the sector’s relative outperformance accelerated following the November 8 presidential election results. Stock selection in the health care sector also added to relative return. Notable outperformers in the sector included overweight positions in UnitedHealth Group, Inc. and Quest Diagnostics, Inc. UnitedHealth Group outperformed due to above-consensus growth in its Optum business and robust membership gains within its Medicare, Medicaid and commercial segments. Shares of Quest Diagnostics, a low-cost provider of laboratory services, advanced due to solid pricing growth amid the continued shift to more complex esoteric testing. Lastly, an underweight to real estate and stock selection in utilities added to relative performance.

 

 

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 negative impact on performance during the period.

Describe recent portfolio activity.

 

 

During the 12-month period, the Trust’s exposure to the energy sector was increased by initiating new positions in Hess Corp. and Suncor Energy, Inc. Other notable new purchases included Qualcomm Inc., a manufacturer of digital wireless communications equipment, and the property & casualty insurer The Allstate Corporation. Conversely, the Trust reduced exposure to the industrials sector by exiting positions in Tyco International PLC and United Technologies Corp., as well as by trimming

 

 

10    ANNUAL REPORT    DECEMBER 31, 2016     


       BlackRock Enhanced Equity Dividend Trust  

 

      Performance and Portfolio Management Commentary (concluded)

 

    its holdings in General Electric Co. and Raytheon Co. Other notable sales from the portfolio included McDonald’s Corp. and Bristol-Myers Squibb Co.

Describe portfolio positioning at period end.

 

 

Relative to the benchmark, the Trust’s largest overweight positions were in the health care, financials and industrials sectors. Conversely, the Trust’s largest relative underweights were in the real estate, energy and telecommunication services 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

 

      12/31/16      12/31/15      Change        High      Low 

Market Price

   $8.15      $7.61          7.10 %      $8.25          $6.42

Net Asset Value

   $9.22      $8.70          5.98 %      $9.33          $7.76

 

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

 

 

LOGO

 

      Overview of the Trust’s Total Investments*

 

Ten Largest Holdings    12/31/16

Bank of America Corp.

       5 %

JPMorgan Chase & Co.

       4

Exxon Mobil Corp.

       3

Pfizer, Inc.

       3

Citigroup, Inc.

       3

Wells Fargo & Co.

       3

Hess Corp.

       3

General Electric Co.

       3

Microsoft Corp.

       2

SunTrust Banks, Inc.

       2

 

  *   Excludes option positions and money market funds.
Sector Allocation    12/31/16   12/31/15

Financials

       30 %       27 %

Health Care

       14       14

Energy

       12       9

Industrials

       12       14

Information Technology

       9       7

Consumer Staples

       7       10

Consumer Discretionary

       6       7

Utilities

       5       6

Materials

       3       4

Telecommunication Services

       2       2

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.

 

 

     ANNUAL REPORT    DECEMBER 31, 2016    11


Trust Summary as of December 31, 2016      BlackRock Global Opportunities Equity Trust  

 

      Trust Overview

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

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

 

      Trust Information

 

Symbol on NYSE

   BOE

Initial Offering Date

   May 31, 2005

Current Distribution Rate on Closing Market Price as of December 31, 2016 ($11.57)1

   8.09%

Current Monthly Distribution per Common Share2

   $0.078

Current Annualized Distribution per Common Share2

   $0.936

 

  1   

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

 

  2   

The distribution rate is not constant and is subject to change in the future. 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, 2016 were as follows:

 

     Returns Based On
        Market Price     Net Asset Value

BOE1,2

       (0.90 )%       2.62 %

MSCI All Country World Index

       N/A       7.86 %

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

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

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

What factors influenced performance?

 

 

Stock selection within the industrials and information technology (“IT”) sectors led detractors for the period. Within industrials, stock selection in the construction machinery & heavy trucks sub-industry led detractors after the Trust’s position in CRRC Corp. Ltd., a Chinese transportation vehicle company, sold off sharply due to concerns around growth in the region. The downturn in the stock was exacerbated given the company’s exposure to the manufacturing sector of the Chinese economy, and the Trust exited the position. Within IT, stock selection in the internet software

   

& services sub-industry was the next largest detractor as Hortonworks, Inc. reported mixed financial results coupled with an announcement that it was planning a secondary stock offering. The market received the news of additional financing negatively given that the company’s share price was trading near all-time lows. The Trust sold the position during the period and rotated into more attractive opportunities.

 

 

The Trust’s underweight positioning and stock selection within the health care sector led contributors during the 12-month period. In particular, the Trust’s underweight to lagging stocks such as Novo Nordisk A/S in the pharmaceuticals sub-industry added to performance. In the energy sector, the Trust’s position in EOG Resources, Inc. from the oil & gas exploration & production sub-industry benefited from a strengthening in energy prices.

 

 

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 negative impact on performance during the period.

Describe recent portfolio activity.

 

 

The Trust reduced exposure to the health care and industrials sectors, while increasing exposure to the energy and materials sectors. Regionally, these sector decisions resulted in reduced exposure to Europe and increased positions within North America, the Pacific Basin and the emerging markets.

 

 

12    ANNUAL REPORT    DECEMBER 31, 2016     


       BlackRock Global Opportunities Equity Trust  

 

      Performance and Portfolio Management Commentary (concluded)

 

Describe portfolio positioning at period end.

 

 

Relative to the MSCI All Country World Index, the Fund ended the period with its largest overweights in the IT, materials and consumer discretionary sectors, and its largest underweights in the industrials, financials and

   

health care sectors. Regionally, the Trust was most overweight in Europe and the emerging markets, funded by a large underweight to the Pacific Basin.

 

 

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

 

      12/31/16      12/31/15      Change      High      Low  

Market Price

   $11.57      $12.76          (9.33 )%      $12.76          $10.37

Net Asset Value

   $13.38      $14.25          (6.11 )%      $14.25          $12.21

 

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

 

 

LOGO

 

      Overview of the Trust’s Total Investments*

 

Ten Largest Holdings    12/31/16

Alphabet, Inc., Class C

       2 %

Apple, Inc.

       2

Anheuser-Busch InBev SA

       2

Citigroup, Inc.

       2

Alibaba Group Holding Ltd. - ADR

       2

Wells Fargo & Co.

       2

Starbucks Corp.

       1

SoftBank Group Corp.

       1

Sumitomo Mitsui Financial Group, Inc.

       1

Uber Technologies, Inc., Series D (Acquired 6/6/14, Cost $3,845,800)

       1

 

  *   Excludes option positions and money market funds.
Geographic Allocation    12/31/16   12/31/15

United States

       59 %       53 %

United Kingdom

       6       14

Japan

       6       5

India

       3       3

China

       3       3

France

       2       2

Italy

       2       1

Belgium

       2       2

Germany

       2       1

Switzerland

       2       2

Spain

       1       2

Canada

       1       2

Other1

       11       10

 

  1   

Other includes a 1% holding or less in each of the following countries: Australia, Hong Kong, Indonesia, Ireland, Israel, Mexico, Netherlands, New Zealand, Norway, Peru, Philippines, Portugal, South Africa, South Korea, Sweden, Taiwan and Thailand.

 

 

     ANNUAL REPORT    DECEMBER 31, 2016    13


Trust Summary as of December 31, 2016      BlackRock Health Sciences Trust  

 

      Trust Overview

BlackRock Health Sciences Trust’s (BME) (the “Trust”) investment objective is to provide total return through a combination of current income, current gains and long-term capital appreciation. The Trust seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its assets in equity securities of companies engaged in the health sciences and related industries and equity derivatives with exposure to the health sciences industry. The Trust 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, 2016 ($31.75)1

   7.56%

Current Monthly Distribution per Common Share2

   $0.20

Current Annualized Distribution per Common Share2

   $2.40

 

  1   

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

 

  2   

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

 

      Performance and Portfolio Management Commentary

 

Returns for the 12-month period ended December 31, 2016 were as follows:

 

     Returns Based On
        Market Price     Net Asset Value

BME1,2

       (11.71 )%       (5.36 )%

Russell 3000® Healthcare Index

       N/A       (3.33 )%

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

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

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

What factors influenced performance?

 

 

Health care stocks finished the year with a loss and trailed the broader market by a wide margin, due in part by concerns about increased regulatory scrutiny of pharmaceutical and biotechnology companies’ pricing practices. Consistent with the overall environment, the Trust’s negative absolute return was driven by its allocations to these two sub-sectors. In the former, performance was hampered by specialty pharmaceutical companies such as Allergan PLC, Teva Pharmaceuticals Ltd. and Mylan NV, combined with several non-U.S. holdings such as Roche Holding AG, AstraZeneca PLC and Bayer AG. In the biotechnology group, broader weakness pressured higher-beta small- to mid-cap positions. In addition, a number of large-cap biotechnology holdings — including Vertex Pharmaceuticals, Alexion Pharmaceuticals, Inc., Gilead Sciences, Inc. and Celgene Corp. — weighed on absolute returns.

 

The medical devices & supplies sub-sector was the largest positive contributor. Performance was particularly favorable in the health care equipment industry, where several holdings reported solid financial results. Among these were Boston Scientific Corp., Stryker Corp., St. Jude Medical, Inc., C.R. Bard, Inc., Baxter International, Inc., Edwards Lifesciences Corp. and Masimo Corp. The health care providers & services sub-sector was another large contributor to absolute performance, led by managed care stocks such as UnitedHealth Group, Inc., Humana, Inc. and Aetna, Inc.

 

 

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. The Trust also owned private securities during the period, although this was not a principal strategy.

Describe recent portfolio activity.

 

 

The Trust reduced its allocations to the pharmaceutical and biotechnology sub-sectors, while maintaining an emphasis on identifying innovative companies in these areas. The Trust increased its weightings in the medical devices & supplies and health care providers & services sub-sectors. In the latter industry, the investment adviser was focused on companies that can benefit from favorable health care policies in their respective industries.

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 health care stocks.

 

 

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

 

14    ANNUAL REPORT    DECEMBER 31, 2016     


       BlackRock Health Sciences Trust  

 

      Market Price and Net Asset Value Per Share Summary

 

      12/31/16      12/31/15       Change           High      Low

Market Price

   $31.75      $39.35         (19.31)%        $39.98      $29.86

Net Asset Value

   $31.30      $36.171        (13.46)%        $36.17      $30.37

 

  1   

The net asset value does not reflect adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles and therefore differs from the amounts reported in the Financial Highlights.

 

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

 

LOGO

 

      Overview of the Trust’s Total Investments*

 

Ten Largest Holdings    12/31/16

UnitedHealth Group, Inc.

     8%

Pfizer, Inc.

     5   

Medtronic PLC

     4   

Celgene Corp.

     4   

Amgen, Inc.

     4   

Bristol-Myers Squibb Co.

     3   

Stryker Corp.

     3   

Allergan PLC

     3   

Humana, Inc.

     3   

Anthem, Inc.

     3   

 

  *   Excludes option positions and money market funds.
Industry Allocation    12/31/16    12/31/15

Health Care Providers & Services

     30%      18%

Biotechnology

     24        33  

Pharmaceuticals

     23        29  

Health Care Equipment & Supplies

     21        17  

Life Sciences Tools & Services

     1      2

Diversified Consumer Services

     1      —  

Electronic Equipment, Instruments & Components

     —        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.

 

 

     ANNUAL REPORT    DECEMBER 31, 2016    15


Trust Summary as of December 31, 2016      BlackRock International Growth and Income Trust  

 

      Trust Overview

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

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

 

      Trust Information

 

Symbol on NYSE

     BGY        

Initial Offering Date

     May 30, 2007  

Current Distribution Rate on Closing Market Price as of December 31, 2016 ($5.51)1

     8.28%      

Current Monthly Distribution per Common Share2

     $0.038      

Current Annualized Distribution per Common Share2

     $0.456      

 

  1   

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

 

  2   

The distribution rate is not constant and is subject to change in the future. 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, 2016 were as follows:

 

       Returns Based On
        Market Price       Net Asset Value

BGY1,2

      (3.37)%         (1.12)%

MSCI All Country World Index ex-US

      N/A           4.50%

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

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

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

What factors influenced performance?

 

 

An underweight position in materials and negative stock selection within the sector represented the largest detractor from relative performance. The sector was one of the top performers in the benchmark and the Trust’s limited exposure to the metals & mining industry was particularly detrimental to performance. In addition, an underweight to financials, combined with negative stock selection there, detracted from relative returns. Unfavorable stock selection within consumer staples also detracted from relative returns. One of the largest individual detractors during the period was the Trust’s position in Worldpay Group PLC, as shares of the U.K.-based payment services company sold off during the fourth quarter.

 

For the period, exposure to a Japan-focused ETF provided the largest contribution to relative performance. Underweight exposures to the health care and utilities sectors also were additive, as these sectors were two of the worst performers within the benchmark. One of the largest individual contributors was Nintendo Co. Ltd., as investors reacted very positively to the release of Pokémon Go.

 

 

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 negative impact on performance during the period.

Describe recent portfolio activity.

 

 

During the period, the largest change to sector positioning was a reduction in the Trust’s underweight exposure to materials. This was largely driven by the addition of two new chemicals companies. In contrast, a modest overweight to health care was trimmed to a meaningful underweight, as two pharmaceuticals positions were sold and two were significantly reduced. From a regional perspective, these changes resulted in increased exposure to Europe ex-U.K., particularly France and Germany, and decreased exposure to the United Kingdom.

Describe portfolio positioning at period end.

 

 

Relative to the MSCI All Country World Index ex-US, the Trust’s largest sector overweights were information technology (in particular software & services) and financials (especially diversified financials). In contrast, the largest sector underweights were industrials, especially the capital goods industry, and utilities. From a regional perspective, the Trust’s largest overweight was in Europe, and its largest regional underweight was the Pacific Basin, mainly driven by a large underweight in Japan.

 

 

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

 

16    ANNUAL REPORT    DECEMBER 31, 2016     


       BlackRock International Growth and Income Trust  

 

      Market Price and Net Asset Value Per Share Summary

 

        12/31/16      12/31/15       Change            High      Low

Market Price

     $5.51      $6.24         (11.70)%        $6.24      $5.23

Net Asset Value

     $6.28      $6.941        (9.51)%        $6.94      $5.98

 

  1   

The net asset value does not reflect adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles and therefore differs from the amounts reported in the Financial Highlights.

 

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

 

LOGO

 

      Overview of the Trust’s Total Investments*

 

Ten Largest Holdings    12/31/16

WisdomTree Japan Hedged Equity Fund

     5%

Sumitomo Mitsui Financial Group, Inc.

     3   

Royal Dutch Shell PLC, B Shares

     2   

Nestle SA

     2   

Anheuser-Busch InBev SA

     2   

BNP Paribas SA

     2   

Unilever PLC

     2   

AIA Group Ltd.

     2   

Toronto-Dominion Bank

     2   

AXA SA

     2   

 

  *   Excludes option positions and money market funds.
Geographic Allocation    12/31/16     12/31/15  

United Kingdom

       16%             25%    

France

       9            6       

United States

       8            4       

Japan

       8              9       

Germany

       6            4       

Netherlands

       6            3       

Italy

       6            4       

Canada

       5            4       

China

       5            5       

Switzerland

       5              9       

India

       4            5       

South Korea

       3              —       

Belgium

       2              2       

Ireland

       2              4       

Hong Kong

       2              2       

Sweden

       1              2       

Spain

       1              2       

Mexico

       1              2       

Other1

       10              8       

 

  1   

Other includes a 1% holding or less in each of the following countries: Australia, Indonesia, Israel, New Zealand, Norway, Peru, Philippines, Portugal, South Africa, Taiwan and Thailand.

 

 

     ANNUAL REPORT    DECEMBER 31, 2016    17


Trust Summary as of December 31, 2016      BlackRock Resources & Commodities Strategy Trust  

 

      Trust Overview

BlackRock Resources & Commodities Strategy Trust’s (BCX) (the “Trust”) primary investment objective is to seek high current income and current gains, with a secondary objective of capital appreciation. The Trust will seek to achieve its investment objectives, under normal market conditions, by investing at least 80% of its total assets in equity securities issued by commodity or natural resources companies, derivatives with exposure to commodity or natural resources companies or investments in securities and derivatives linked to the underlying price movement of commodities or natural resources. 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, 2016 ($ 8.27)1

   6.47%

Current Monthly Distribution per Common Share2

   $0.0446

Current Annualized Distribution per Common Share2

   $0.5352

 

  1   

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

 

  2   

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

 

      Performance and Portfolio Management Commentary

 

Returns for the 12-month period ended December 31, 2016 were as follows:

 

       Returns Based On
        Market Price       Net Asset Value

BCX1,2

      25.50%         27.41%

Lipper Natural Resources Funds3

      37.40%         32.14%

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

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

 

  3   

Average return.

 

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

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

What factors influenced performance?

 

 

Within the portfolio’s agriculture exposure, a position in Mosaic Co. — the world’s leading producer of phosphate and potash crop nutrients — detracted from performance. After performing well through the first half of the year, the stock lost ground on rumors that the company would acquire the fertilizer division of Vale SA. Mosaic would have required a capital raising to fund the acquisition, and the stock price declined as a result.

 

 

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 negative impact on performance given the strength in the overall sector.

 

After losing ground in the initial weeks of the year, natural resources stocks rallied to close as one of the top-performing market segments of 2016. Expectations for stronger global growth, together with an improving balance of supply and demand in the commodity market, provided a firm underpinning for the sector. Consistent with the broader environment, the Trust produced a robust absolute return in the 12-month period.

 

 

The copper-mining company First Quantum Minerals Ltd. was the leading contributor to the Trust’s absolute return. The company announced the sale of its Kevitsa mine for a price that exceeded the market’s expectations. Later in the year, First Quantum continued to please markets when the company reported lower costs. In contrast, the majority of companies in the sector reported higher-than-expected costs.

 

 

The strong upward move in the price of coking coal had a positive impact on absolute performance by fueling gains for the Trust’s positions in Rio Tinto Ltd. and Glencore PLC.

 

 

Gold experienced volatility in 2016, shifting between a high of $1,369 per ounce and a low of $1,062 per ounce. The metal ultimately finished the year in positive territory, and the Fund’s gold exposure contributed positively to performance. A position in Barrick Gold Corp., the world’s largest gold producer, was a notable contributor at the individual stock level.

Describe recent portfolio activity.

 

 

The investment adviser reduced the Trust’s mining exposure following the sector’s strong relative performance, and it increased exposure to the energy and agriculture sectors. The Trust also shifted its energy weighting throughout the year to manage the portfolio’s sensitivity to oil prices.

 

 

18    ANNUAL REPORT    DECEMBER 31, 2016     


       BlackRock Resources & Commodities Strategy Trust  

 

      Performance and Portfolio Management Commentary (concluded)

 

Describe portfolio positioning at period end.

 

 

At the end of the year, the natural resources sector remained supported by a backdrop of improving growth and expectations for rising inflation. In addition, producers’ efforts at cost-cutting and greater capital spen-

   

ding discipline led to lower supply in 2016, bringing the commodity market back into balance. In this environment, the Trust held an overweight position in the energy sector, a neutral position in agriculture and an underweight in mining.

 

 

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

 

      12/31/16      12/31/15      Change          High      Low

Market Price

   $8.27      $7.11      16.32%      $  8.66      $5.57

Net Asset Value

   $9.86      $8.35      18.08%      $10.05      $7.07

 

      Market Price and Net Asset Value History For Past Five Years

 

LOGO

 

      Overview of the Trust’s Total Investments*

 

Ten Largest Holdings    12/31/16

Royal Dutch Shell PLC, A Shares - ADR

     6%

BP PLC - ADR

     5   

Syngenta AG

     5   

Monsanto Co.

     5   

Rio Tinto PLC - ADR

     4   

Glencore PLC

     4   

International Paper Co.

     3   

Vale SA - ADR

     3   

Potash Corp. of Saskatchewan, Inc.

     3   

CF Industries Holdings, Inc.

     3   

 

  *   Excludes option positions and money market funds.
Industry Allocation    12/31/16   12/31/15

Oil, Gas & Consumable Fuels

     34%     34%

Metals & Mining

     30        32   

Chemicals

     18        14   

Containers & Packaging

     6       2  

Food Products

     5       10   

Energy Equipment & Services

     3       1  

Food & Staples Retailing

     2       1  

Paper & Forest Products

     1       3  

Other1

     1       3  

 

  1   

Other includes less than 1% in each of the following industries: Building Products, Electric Utilities, Electrical Equipment, Electronic Equipment, Independent Power and Renewable Electricity Producers, Instruments & Components, Machinery, Multi-Utilities, Real Estate Investment Trusts (REITs), Semiconductors & Semiconductor Equipment and Water Utilities.

 

 

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.

 

     ANNUAL REPORT    DECEMBER 31, 2016    19


Trust Summary as of December 31, 2016      BlackRock Science and Technology Trust  

 

      Trust Overview

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 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, 2016 ($17.94)1

   6.69%

Current Monthly Distribution per Common Share2

   $0.10

Current Annualized Distribution per Common Share2

   $1.20

 

  1   

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

 

  2   

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

 

      Performance and Portfolio Management Commentary

 

Returns for the 12-month period ended December 31, 2016 were as follows:

 

       Returns Based On
        Market Price       Net Asset Value

BST1,2

     11.08%           9.36%

MSCI World Information Technology Index

     N/A         11.45%

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

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

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

What factors influenced performance?

 

 

Holdings in 58.com, Inc., a Chinese classified advertising and listing platform holding company, represented the largest individual detractor during the period. The company announced that the Chinese government’s steps to tighten the country’s property market would have a substantial negative effect on its property listing revenue, and the Trust exited the position. The next largest detractor was the Trust’s position in Imperva, Inc., a provider of cyber-security solutions. Imperva substantially reduced its earnings forecast given shifts in consumer and client trends. The Trust also exited this position.

 

 

The top individual contributor stock during the period was NVIDIA Corp., which handily exceeded its earnings forecasts throughout the year. NVIDIA provides semiconductor technology to high-growth segments

   

including gaming, data centers and automotive companies. Holdings in Acacia Communications, Inc., a provider of technology to communications networks, represented the second largest contributor to performance as the company had a successful initial public offering and met earnings projections.

 

 

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 negative impact on performance during the period.

Describe recent portfolio activity.

 

 

Over the 12-month period, the largest additions to the portfolio came from within the semiconductor & semiconductor equipment industry groups, funded by reductions in both software & services and media industry holdings. Regionally, these shifts resulted in additional exposure to the Pacific Basin and decreased exposure to the emerging markets and North America.

Describe portfolio positioning at period end.

 

 

At period end, the Trust held its largest allocation within the software & services industry group, particularly idiosyncratic opportunities in the internet software & services and data processing & outsourced services sub-industries. The Trust also held large positions in more stable cash flow businesses within the semiconductor & semiconductor equipment and technology hardware & equipment industries. Regionally, the Trust maintained most of its exposure in North America, followed by notable weights to the emerging markets, Europe and the Pacific Basin.

 

 

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

 

20    ANNUAL REPORT    DECEMBER 31, 2016     


       BlackRock Science and Technology Trust  

 

      Market Price and Net Asset Value Per Share Summary

 

      12/31/16      12/31/15      Change         High      Low

Market Price

     $ 17.94        $ 17.31          3.64 %        $ 19.09        $ 14.01

Net Asset Value

     $ 20.10        $ 19.71 1          1.98 %        $ 21.04        $ 16.52

 

  1   

The net asset value does not reflect adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles and therefore differs from the amounts reported in the Financial Highlights.

 

      Market Price and Net Asset Value History Since Inception

 

LOGO

 

  1 

Commencement of operations.

 

      Overview of the Trust’s Total Investments*

 

Ten Largest Holdings    12/31/16

Alphabet, Inc., Class A

     6%

Apple, Inc.

     6   

Microsoft Corp.

     6   

Amazon.com, Inc.

     4   

Tencent Holdings Ltd.

     3   

Facebook, Inc., Class A

     3   

Alibaba Group Holding Ltd. - ADR

     3   

Broadcom Ltd.

     3   

Visa, Inc., A Shares

     2   

Mastercard, Inc., Class A

     2   

 

  *   Excludes option positions and money market funds.
Industry Allocation    12/31/16   12/31/15

Internet Software & Services

     23%     26%

Software

     21        20   

Semiconductors & Semiconductor Equipment

     19        11   

IT Services

     11        13   

Internet & Direct Marketing Retail

     7       6  

Technology Hardware, Storage & Peripherals

     7       7  

Equity Real Estate Investment Trusts (REITs)

     4       5  

Electronic Equipment, Instruments & Components

     2       1  

Media

     2       5  

Diversified Telecommunication Services

     1       2  

Other2

     3       4  

 

  2   

Other includes a 1% holding or less in each of the following industries; Communications Equipment, Hotels, Restaurants & Leisure, Professional Services, Household Durables and Wireless Telecommunication 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.

 

 

     ANNUAL REPORT    DECEMBER 31, 2016    21


Trust Summary as of December 31, 2016      BlackRock Utility and Infrastructure Trust  

 

      Trust Overview

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

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

 

      Trust Information

 

Symbol on NYSE

   BUI

Initial Offering Date

   November 25, 2011

Current Distribution Rate on Closing Market Price as of December 31, 2016 ($18.41)1

   7.89%

Current Monthly Distribution per Common Share2

   $0.121

Current Annualized Distribution per Common Share2

   $1.452

 

  1   

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

 

  2   

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

 

      Performance and Portfolio Management Commentary

 

Returns for the 12-month period ended December 31, 2016 were as follows:

 

     Returns Based On
        Market Price   Net Asset Value

BUI1,2

       18.50 %       7.57 %

Lipper Utility Funds3

       17.44 %       13.23 %

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

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

 

  3   

Average return.

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

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

What factors influenced performance?

 

 

The largest detractor from absolute returns was the Trust’s position in the transportation infrastructure industry. In this vein, notable detractors from performance included Australian airport operator Sydney Airport Ltd. and Atlantia SpA, which constructs and manages airports and highways in its home country of Italy and abroad. The Trust’s exposure to the construction & engineering industry also detracted from performance, in particular a position in Spanish toll-road and airport construction operator Ferrovial SA. Broadly, European construction and infrastructure companies underperformed in the aftermath of the U.K. vote to exit from the European Union (“Brexit”).

 

The Trust’s international exposure detracted from absolute returns from a country allocation perspective, driven largely by portfolio holdings based in France and Spain.

 

 

Utilities performed strongly during the first half of the 12-month period, as central bank policy decisions and historically low U.S. interest rates created a strong demand for higher-yielding equities. However, utilities weakened somewhat in the second half of the period as investors anticipated higher interest rates. The Trust’s exposure to the electric utilities industry was the largest contributor to performance, led by regulated utility operators Exelon Corp. and NextEra Energy, Inc. The Trust’s exposure to the multi-utilities industry also benefited performance, as CMS Energy Corporation and Dominion Resources Inc. performed strongly. Finally, exposure to the energy sector and to the water utilities industry contributed modestly to the Trust’s absolute returns.

 

 

Also, 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 modestly positive impact on returns for the period.

Describe recent portfolio activity.

 

 

During the period, the Trust increased exposure to electric utilities, adding to existing positions in NextEra Energy, Inc. and Enel S.p.A and initiating a position in FirstEnergy Corp. The Trust reduced exposure to the

 

 

22    ANNUAL REPORT    DECEMBER 31, 2016     


       BlackRock Utility and Infrastructure Trust  

 

      Performance and Portfolio Management Commentary (concluded)

 

 

gas utilities industry, notably exiting its positions in Italy’s Snam SpA and U.S.-based Spire Inc. (formerly known as The Laclede Group). Lastly, the Trust reduced its position size in water utility operator American Water Works Company, primarily on the basis of valuation after strong absolute performance during the period.

Describe portfolio positioning at period end.

 

 

At period end, the utilities sector accounted for approximately 57% of the Trust’s assets, with holdings concentrated in U.S. electric and multi- utilities. Against a backdrop of historically low interest rates, the demand for equity yield has led to valuations for U.S. utilities that are high relative to their historical levels, placing even greater importance on stock selection. As such, the Fund was focused on owning companies with

   

strong management teams that offer the potential for above-sector growth in earnings and dividends. The Fund had a preference for regulated utilities over their non-regulated counterparts given their existing barriers to entry, strong balance sheets, and lower sensitivity to commodity prices.

 

 

Additionally, about 37% of the Trust’s assets were in global construction and infrastructure operators and master limited partnerships at period end. This positioning was based on the healthy dividend yields and potential long-term capital growth these assets offer, along with diversification across geographies, economies and industries globally.

 

 

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

 

      12/31/16      12/31/15      Change          High      Low

Market Price

   $18.41      $16.78      9.71%      $20.58      $14.80

Net Asset Value

   $19.42      $19.50      (0.41)%      $21.08      $17.98

 

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

 

LOGO

 

     ANNUAL REPORT    DECEMBER 31, 2016    23


       BlackRock Utility and Infrastructure Trust  

 

      Overview of the Trust’s Total Investments*

 

Ten Largest Holdings    12/31/16

NextEra Energy, Inc.

       8 %

CMS Energy Corp.

       6

Dominion Resources, Inc.

       5

Atlantia SpA

       3

Exelon Corp.

       3

Public Service Enterprise Group, Inc.

       3

Duke Energy Corp.

       3

Sempra Energy

       3

Transurban Group

       3

Dominion Midstream Partners LP

       2

 

  *   Excludes option positions and money market funds.
Industry Allocation    12/31/16   12/31/15

Electric Utilities

       28 %       23 %

Multi-Utilities

       22       20

Oil, Gas & Consumable Fuels

       20       21

Transportation Infrastructure

       14       17

Independent Power and Renewable Electricity Producers

       4       5

Construction & Engineering

       3       4

Equity Real Estate Investment Trusts (REITs)

       3       3

Water Utilities

       2       4

Diversified Telecommunication Services

       2       1

Gas Utilities

       1       2

Other1

       1      

 

  1   

Other includes a 1% holding or less in each of the following industries: Road & Rail and Wireless Telecommunication 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.

 

 

24     ANNUAL REPORT    DECEMBER 31, 2016     


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 asset without owning or taking physical custody of securities, commodities and/or other referenced assets 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.

 

 

     ANNUAL REPORT    DECEMBER 31, 2016    25


Schedule of Investments December 31, 2016      BlackRock Energy and Resources Trust (BGR)  
     (Percentages shown are based on Net Assets)  

 

Common Stocks    Shares      Value  

Energy Equipment & Services — 9.4%

     

Baker Hughes, Inc. (a)

     320,250      $  20,806,643  

Halliburton Co. (a)

     79,800        4,316,382  

Schlumberger Ltd. (a)

     247,774        20,800,627  
     

 

 

 
                45,923,652  

Oil, Gas & Consumable Fuels — 91.2%

     

Anadarko Petroleum Corp. (a)

     306,483        21,371,060  

BP PLC

     5,030,000        31,505,236  

Cabot Oil & Gas Corp. (a)

     283,900        6,631,904  

Cairn Energy PLC (b)

     1,810,176        5,259,467  

Chevron Corp. (a)

     234,450        27,594,765  

Cimarex Energy Co. (a)

     100,600        13,671,540  

ConocoPhillips (a)

     502,150        25,177,801  

Devon Energy Corp. (a)

     270,350        12,346,885  

Enbridge, Inc. (a)

     310,500        13,066,134  

Encana Corp. (a)

     1,021,450        11,989,761  

Eni SpA

     533,450        8,647,826  

EOG Resources, Inc. (a)

     243,600        24,627,960  

EQT Corp. (a)

     133,400        8,724,360  

Exxon Mobil Corp. (a)(c)

     555,450        50,134,917  

Hess Corp. (a)

     200,700        12,501,603  

Kosmos Energy Ltd. (b)

     673,707        4,722,686  

Lundin Petroleum AB (b)

     239,277        5,185,525  

Marathon Oil Corp. (a)

     702,800        12,165,468  

Noble Energy, Inc. (a)

     287,292        10,934,334  

Occidental Petroleum Corp. (a)

     279,900        19,937,277  

Oil Search Ltd.

     1,754,013        9,027,515  

Phillips 66 (a)

     96,400        8,329,924  

Pioneer Natural Resources Co. (a)

     92,750        16,701,493  
Common Stocks    Shares      Value  

Oil, Gas & Consumable Fuels (continued)

     

Royal Dutch Shell PLC, A Shares

     713,948      $ 19,707,610  

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

     689,800        37,511,324  

Tesoro Corp. (a)

     46,650        4,079,543  

TransCanada Corp. (a)

     254,550        11,477,643  

Valero Energy Corp. (a)

     163,500        11,170,320  
     

 

 

 
                444,201,881  

Total Long-Term Investments

(Cost — $442,857,418) — 100.6%

              490,125,533  
     
Short-Term Securities                

BlackRock Liquidity Funds, T-Fund, Institutional Class, 0.36% (d)(e)

     3,936,617        3,936,617  

Total Short-Term Securities

(Cost — $3,936,617) — 0.8%

              3,936,617  

Total Investments Before Options Written

(Cost — $446,794,035) — 101.4%

              494,062,150  
     
Options Written                

(Premiums Received — $4,804,608) — (1.2)%

              (6,152,354

Total Investments Net of Options Written — 100.2%

        487,909,796  

Liabilities in Excess of Other Assets — (0.2)%

        (845,826
     

 

 

 

Net Assets — 100.0%

      $ 487,063,970  
     

 

 

 
 

 

      Notes to Schedule of Investments

 

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

 

(b) Non-income producing security.

 

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

 

(d) Current yield as of period end.

 

(e) During the year ended December 31, 2016, 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
December 31,
2015
    

Net

Activity

    Shares Held at
December 31,
2016
     Value at
December 31,
2016
     Income     Realized
Gain
 

BlackRock Liquidity Funds, TempFund, Institutional Class

     5,394,590        (5,394,590                   $28,453        

BlackRock Liquidity Funds, T-Fund, Institutional Class

            3,936,617       3,936,617        $3,936,617        3,593       $     18  

SL Liquidity Series, LLC, Money Market Series

     944,554        (944,554                   26,579 1      1,435  

Total

                   $3,936,617        $58,625       $1,453  
          

 

 

 

 

  1   

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.

 

      Portfolio Abbreviations

 

ADR    American Depositary Receipts      HKD    Hong Kong Dollar    SEK    Swedish Krona
AUD    Australian Dollar      JPY    Japanese Yen    SGD    Singapore Dollar
CAD    Canadian Dollar      KRW    Korean Won    TWD    Taiwan Dollar
CHF    Swiss Franc      NOK    Norwegian Krone    USD    U.S. Dollar
EUR    Euro      NZD    New Zealand Dollar    ZAR    South African Rand
GBP    British Pound      REIT    Real Estate Investment Trust      

 

See Notes to Financial Statements.

 

26    ANNUAL REPORT    DECEMBER 31, 2016     


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

 

 

 

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.

 

      Derivative Financial Instruments Outstanding as of Period End

 

Exchange-Traded Options Written

 

                                            
Description    Put/
Call
     Expiration
Date
    

Strike

Price

       Contracts        Value  

Exxon Mobil Corp.

   Call      1/04/17        USD       89.00          113        $ (17,754

Devon Energy Corp.

   Call      1/06/17        USD       49.00          96          (528

Devon Energy Corp.

   Call      1/06/17        USD       49.50          94          (564

Exxon Mobil Corp.

   Call      1/06/17        USD       89.00          123          (19,311

Halliburton Co.

   Call      1/06/17        USD       55.00          140          (4,200

Marathon Oil Corp.

   Call      1/06/17        USD       18.50          281          (1,124

Occidental Petroleum Corp.

   Call      1/06/17        USD       70.00          221          (33,592

Occidental Petroleum Corp.

   Call      1/06/17        USD       73.00          134          (2,010

Pioneer Natural Resources Co.

   Call      1/06/17        USD       195.00          121          (3,025

Royal Dutch Shell PLC, A Shares — ADR

   Call      1/06/17        USD       52.50          400          (109,000

Schlumberger Ltd.

   Call      1/06/17        USD       86.00          171          (2,223

Anadarko Petroleum Corp.

   Call      1/13/17        USD       69.00          180          (35,640

ConocoPhillips

   Call      1/13/17        USD       49.00          127          (21,971

Devon Energy Corp.

   Call      1/13/17        USD       50.00          454          (6,810

EOG Resources, Inc.

   Call      1/13/17        USD       105.00          159          (10,176

Exxon Mobil Corp.

   Call      1/13/17        USD       90.00          245          (31,483

Halliburton Co.

   Call      1/13/17        USD       55.50          140          (7,140

Hess Corp.

   Call      1/13/17        USD       58.00          173          (79,580

Marathon Oil Corp.

   Call      1/13/17        USD       18.50          281          (3,934

Occidental Petroleum Corp.

   Call      1/13/17        USD       73.50          133          (4,522

Phillips 66

   Call      1/13/17        USD       87.50          120          (11,400

Royal Dutch Shell PLC, A Shares — ADR

   Call      1/13/17        USD       53.00          400          (74,000

Schlumberger Ltd.

   Call      1/13/17        USD       86.50          172          (5,418

Tesoro Corp.

   Call      1/13/17        USD       85.00          50          (17,750

Anadarko Petroleum Corp.

   Call      1/20/17        USD       65.00          275          (145,063

Baker Hughes, Inc.

   Call      1/20/17        USD       62.50          117          (38,493

Baker Hughes, Inc.

   Call      1/20/17        USD       65.00          500          (85,000

Cabot Oil & Gas Corp.

   Call      1/20/17        USD       25.00          225          (8,438

Chevron Corp.

   Call      1/20/17        USD       108.75          386          (372,098

Cimarex Energy Co.

   Call      1/20/17        USD       140.00          86          (17,845

ConocoPhillips

   Call      1/20/17        USD       46.00          403          (183,365

ConocoPhillips

   Call      1/20/17        USD       47.50          80          (24,600

Devon Energy Corp.

   Call      1/20/17        USD       45.00          98          (18,326

Enbridge, Inc.

   Call      1/20/17        CAD       58.00          330          (7,737

Encana Corp.

   Call      1/20/17        CAD       17.00          565          (5,260

EOG Resources, Inc.

   Call      1/20/17        USD       105.00          56          (5,432

EOG Resources, Inc.

   Call      1/20/17        USD       95.00          107          (72,225

EQT Corp.

   Call      1/20/17        USD       70.00          234          (17,550

Exxon Mobil Corp.

   Call      1/20/17        USD       90.00          236          (36,344

Hess Corp.

   Call      1/20/17        USD       60.00          98          (33,565

Marathon Oil Corp.

   Call      1/20/17        USD       16.00          1,047          (162,285

Noble Energy, Inc.

   Call      1/20/17        USD       37.50          390          (54,600

Occidental Petroleum Corp.

   Call      1/20/17        USD       70.00          75          (16,425

Occidental Petroleum Corp.

   Call      1/20/17        USD       72.50          96          (8,496

Phillips 66

   Call      1/20/17        USD       90.00          120          (4,500

Pioneer Natural Resources Co.

   Call      1/20/17        USD       180.00          87          (43,500

Royal Dutch Shell PLC, A Shares — ADR

   Call      1/20/17        USD       52.50          228          (54,150

Schlumberger Ltd.

   Call      1/20/17        USD       82.50          259          (69,801

Schlumberger Ltd.

   Call      1/20/17        USD       87.50          173          (8,650

TransCanada Corp.

   Call      1/20/17        CAD       62.00          225          (5,530

Valero Energy Corp.

   Call      1/20/17        USD       65.00          48          (19,080

Anadarko Petroleum Corp.

   Call      1/27/17        USD       75.00          272          (14,824

Baker Hughes, Inc.

   Call      1/27/17        USD       65.50          196          (58,016

Cabot Oil & Gas Corp.

   Call      1/27/17        USD       23.50          548          (57,540

Chevron Corp.

   Call      1/27/17        USD       118.00          91          (20,293

ConocoPhillips

   Call      1/27/17        USD       51.50          256          (23,296

ConocoPhillips

   Call      1/27/17        USD       52.00          249          (18,302

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    DECEMBER 31, 2016    27


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

 

Description    Put/
Call
       Expiration
Date
      

Strike

Price

       Contracts        Value  

Devon Energy Corp.

     Call          1/27/17          USD       50.00          96        $ (3,408

EOG Resources, Inc.

     Call          1/27/17          USD       110.00          85          (3,570

Exxon Mobil Corp.

     Call          1/27/17          USD       89.00          297          (72,765

Exxon Mobil Corp.

     Call          1/27/17          USD       92.00          227          (19,295

Hess Corp.

     Call          1/27/17          USD       65.50          194          (26,384

Marathon Oil Corp.

     Call          1/27/17          USD       20.50          167          (4,175

Occidental Petroleum Corp.

     Call          1/27/17          USD       74.00          320          (20,160

Phillips 66

     Call          1/27/17          USD       88.00          98          (12,740

Pioneer Natural Resources Co.

     Call          1/27/17          USD       195.00          118          (17,110

Royal Dutch Shell PLC, A Shares — ADR

     Call          1/27/17          USD       53.00          486          (112,995

Royal Dutch Shell PLC, A Shares — ADR

     Call          1/27/17          USD       54.00          900          (146,250

Tesoro Corp.

     Call          1/27/17          USD       90.50          60          (10,200

EOG Resources, Inc.

     Call          1/30/17          USD       96.00          85          (54,538

ConocoPhillips

     Call          2/03/17          USD       53.00          159          (11,448

Devon Energy Corp.

     Call          2/03/17          USD       48.50          112          (9,968

Marathon Oil Corp.

     Call          2/03/17          USD       18.35          195          (8,806

EOG Resources, Inc.

     Call          2/09/17          USD       105.00          257          (47,226

ConocoPhillips

     Call          2/10/17          USD       52.00          75          (8,625

Tesoro Corp.

     Call          2/10/17          USD       90.50          53          (13,967

Chevron Corp.

     Call          2/17/17          USD       115.00          347          (168,295

ConocoPhillips

     Call          2/17/17          USD       49.00          275          (77,550

ConocoPhillips

     Call          2/17/17          USD       55.00          129          (6,644

Enbridge, Inc.

     Call          2/17/17          CAD       58.00          186          (12,052

EOG Resources, Inc.

     Call          2/17/17          USD       105.00          103          (25,647

Exxon Mobil Corp.

     Call          2/17/17          USD       92.50          496          (60,760

Hess Corp.

     Call          2/17/17          USD       60.00          240          (114,600

Marathon Oil Corp.

     Call          2/17/17          USD       19.00          321          (15,087

Noble Energy, Inc.

     Call          2/17/17          USD       42.50          160          (6,800

Schlumberger Ltd.

     Call          2/17/17          USD       87.50          92          (10,672

EQT Corp.

     Call          3/17/17          USD       70.00          235          (49,350

Total

                         $ (3,364,871
                        

 

 

 

 

OTC Options Written

 

                                               
Description    Put/
Call
   Counterparty    Expiration
Date
    

Strike

Price

       Contracts        Value  

Marathon Oil Corp.

   Call    Barclays Bank PLC    1/03/17        USD       15.90          16,700        $ (23,941

BP PLC

   Call    Credit Suisse International    1/04/17        GBP       4.46          90,000          (70,881

BP PLC

   Call    UBS AG    1/04/17        GBP       5.06          200,000          (16,161

Royal Dutch Shell PLC, A Shares

   Call    Credit Suisse International    1/04/17        GBP       20.02          111,000          (327,669

Exxon Mobil Corp.

   Call    Citibank N.A.    1/05/17        USD       89.45          20,700          (27,295

Valero Energy Corp.

   Call    Deutsche Bank AG    1/06/17        USD       64.50          26,300          (102,972

Eni SpA

   Call    Credit Suisse International    1/10/17        EUR       13.21          87,000          (202,769

Lundin Petroleum AB

   Call    Credit Suisse International    1/10/17        SEK       161.16          44,000          (175,563

Cabot Oil & Gas Corp.

   Call    Barclays Bank PLC    1/11/17        USD       23.90          22,500          (10,908

Eni SpA

   Call    Bank of America N.A.    1/11/17        EUR       13.85          13,000          (21,231

Oil Search Ltd.

   Call    Morgan Stanley & Co. International PLC    1/11/17        AUD       6.60          215,000          (85,245

TransCanada Corp.

   Call    Citibank N.A.    1/11/17        CAD       61.81          23,000          (5,057

BP PLC

   Call    Credit Suisse International    1/12/17        GBP       4.46          90,000          (70,955

BP PLC

   Call    Morgan Stanley & Co. International PLC    1/12/17        GBP       4.58          210,000          (130,749

Encana Corp.

   Call    Credit Suisse International    1/12/17        CAD       15.00          57,000          (38,585

Noble Energy, Inc.

   Call    Citibank N.A.    1/17/17        USD       36.48          46,000          (110,389

BP PLC

   Call    Credit Suisse International    1/18/17        GBP       4.49          90,000          (67,817

BP PLC

   Call    Morgan Stanley & Co. International PLC    1/18/17        GBP       4.58          210,000          (131,493

Lundin Petroleum AB

   Call    Bank of America N.A.    1/18/17        SEK       183.99          40,000          (61,696

Valero Energy Corp.

   Call    Deutsche Bank AG    1/19/17        USD       64.50          26,300          (114,216

Eni SpA

   Call    Credit Suisse International    1/26/17        EUR       15.19          87,000          (44,439

Encana Corp.

   Call    Morgan Stanley & Co. International PLC    1/27/17        CAD       15.71          65,100          (32,225

TransCanada Corp.

   Call    Morgan Stanley & Co. International PLC    1/30/17        CAD       60.92          43,500          (34,317

BP PLC

   Call    Credit Suisse International    2/01/17        GBP       4.51          280,000          (200,372

Oil Search Ltd.

   Call    Deutsche Bank AG    2/02/17        AUD       7.35          190,000          (19,992

Anadarko Petroleum Corp.

   Call    Barclays Bank PLC    2/07/17        USD       70.90          35,000          (90,393

Enbridge, Inc.

   Call    Goldman Sachs International    2/07/17        CAD       56.92          38,000          (35,012

Encana Corp.

   Call    Morgan Stanley & Co. International PLC    2/08/17        CAD       17.25          127,500          (28,272

BP PLC

   Call    Credit Suisse International    2/09/17        GBP       4.86          300,000          (108,572

 

See Notes to Financial Statements.

 

28    ANNUAL REPORT    DECEMBER 31, 2016     


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

 

Description    Put/
Call
       Counterparty        Expiration
Date
      

Strike

Price

       Contracts        Value  

Oil Search Ltd.

     Call          Deutsche Bank AG          2/09/17          AUD       7.22          209,000        $ (32,954

Royal Dutch Shell PLC, A Shares

     Call          Morgan Stanley & Co. International PLC          2/09/17          GBP       22.52          138,900          (106,887

Cimarex Energy Co.

     Call          UBS AG          2/14/17          USD       138.00          26,600          (151,023

Encana Corp.

     Call          Morgan Stanley & Co. International PLC          2/15/17          CAD       16.89          53,000          (18,970

BP PLC

     Call          UBS AG          2/22/17          GBP       4.92          300,000          (76,686

Enbridge, Inc.

     Call          Deutsche Bank AG          3/06/17          CAD       58.60          19,000          (11,777

Total

                              $ (2,787,483
                             

 

 

 

 

      Transactions in Options Written for the Year Ended December 31, 2016

 

      Calls     Puts  
     Contracts        Premiums
Received
    Contracts        Premiums
Received
 

 

   

 

 

 

Outstanding options at beginning of year

     3,555,178      $ 3,279,955                 

Options written

     24,961,528        31,529,453                 

Options exercised

     (299      (40,401               

Options expired

     (12,680,026      (9,218,878               

Options closed

     (12,266,029      (20,745,521               
  

 

 

   

 

 

 

Outstanding options at end of year

          3,570,352      $ 4,804,608                        —           
  

 

 

   

 

 

 

As of period end, the value of portfolio securities subject to covered call options written was $166,279,525.

 

      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
       Total  

Liabilities — Derivative Financial Instruments

                                                               

Options written

        Options written, at value            —            —            $6,152,354          —                  $ 6,152,354  
 

 

 

For the year ended December 31, 2016, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

Net Realized Gain (Loss) from:    Commodity
Contracts
   Credit
Contracts
   Equity
Contracts
     Foreign
Currency
Exchange
Contracts
   Interest
Rate
Contracts
   Total  

Options purchased1

         $ (406          $ (406

Options written

           (4,190,501            (4,190,501
  

 

 

Total

         $ (4,190,907          $ (4,190,907
  

 

 
                 

Net Change in Unrealized Appreciation (Depreciation) on:

                                     

Options written

         $ (3,690,895          $ (3,690,895
  

 

 

 

  1   

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

 

See Notes to Financial Statements.

 

     ANNUAL REPORT    DECEMBER 31, 2016    29


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

 

      Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Options:

        

Average value of option contracts purchased1

   $ 406  

Average value of option contracts written

   $ 5,499,043  

 

  1   

Actual amounts for the period are shown due to limited outstanding derivative financial instruments as of each quarter.

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

       $ 6,152,354  
    

 

 

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

       $ (3,364,871
    

 

 

Total derivative assets and liabilities subject to an MNA

       $ 2,787,483  
    

 

 

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

 

 

    Gross Amounts Not Offset in the Consolidated Statements of Assets and Liabilities
and  Subject to an MNA
 

 

Counterparty  

Derivative Liabilities

    Subject to an MNA by    

Counterparty

  

Derivatives Available

for Offset

  

Non-cash

Collateral

Pledged1

   

Cash

Collateral

Pledged

  

Net Amount of    

Derivative Liabilities2    

 

Bank of America N.A.

  $     82,927                $  82,927    

Barclays Bank PLC

       125,242                  125,242    

Citibank N.A.

       142,741       $ (142,741                 —    

Credit Suisse International

    1,307,622         (1,307,622                 —    

Deutsche Bank AG

       281,911                  281,911    

Goldman Sachs International

         35,012                    35,012    

Morgan Stanley & Co. International PLC

       568,158         (402,650        165,508    

UBS AG

       243,870                  243,870    
 

 

Total

  $2,787,483       $ (1,853,013      $934,470    
 

 

 

  1   

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

 

  2   

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

 

See Notes to Financial Statements.

 

30    ANNUAL REPORT    DECEMBER 31, 2016     


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

 

      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:

                

Energy Equipment & Services

  $ 45,923,652                          $ 45,923,652  

Oil, Gas & Consumable Fuels

    364,868,702        $ 79,333,179                   444,201,881  

Short-Term Securities

    3,936,617                            3,936,617  
 

 

 

 

Total Investments

  $             414,728,971        $             79,333,179                 $             494,062,150  
 

 

 

 
                

Derivative Financial Instruments1

                                        

Liabilities:

                

Equity contracts

  $ (2,864,449      $