BlackRock Enhanced Global Dividend Trust

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-21729

Name of Fund: BlackRock Enhanced Global Dividend Trust (Formerly 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 Enhanced Global Dividend Trust (Formerly BlackRock 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: 12/31/2017

Date of reporting period: 06/30/2017


Item 1 – Report to Stockholders


JUNE 30, 2017

 

 

SEMI-ANNUAL REPORT (UNAUDITED)

 

    LOGO

 

 

BlackRock Energy and Resources Trust (BGR)

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

BlackRock Enhanced Equity Dividend Trust (BDJ)

BlackRock Enhanced Global Dividend Trust (BOE)

BlackRock Enhanced International Dividend Trust (BGY)

BlackRock Health Sciences Trust (BME)

BlackRock Resources & Commodities Strategy Trust (BCX)

BlackRock Science and Technology Trust (BST)

BlackRock Utility and Infrastructure Trust (BUI)

 

 

 

 

 

Not FDIC Insured • May Lose Value • No Bank Guarantee


The Markets in Review

 

Dear Shareholder,

In the 12 months ended June 30, 2017, risk assets, such as stocks and high-yield bonds, delivered strong performance. These markets showed great resilience during a period with big surprises, including the aftermath of the U.K.’s vote to leave the European Union and the outcome of the U.S. presidential election, which brought only brief spikes in equity market volatility. However, interest rates rose, which worked against high-quality assets with more interest rate sensitivity. Aside from the shortest-term Treasury bills, most U.S. Treasuries posted negative returns, as rising energy prices, modest wage increases and steady job growth led to expectations of higher inflation and anticipation of interest rate increases by the U.S. Federal Reserve (the “Fed”).

The global reflationary theme — rising nominal growth, wages and inflation — was the dominant driver of asset returns during the period, outweighing significant political upheavals and economic uncertainty. Reflationary expectations accelerated after the U.S. election in November 2016 and continued into the beginning of 2017, stoked by expectations that the new administration’s policies would provide an extra boost to U.S. growth.

The Fed has responded to these positive developments by increasing interest rates three times in the last six months, setting expectations for additional interest rate increases and moving toward normalizing monetary policy. For its part, the European Central Bank also began to signal its intent to wind down asset purchases and begin the long move toward policy normalization, contingent upon further improvement in economic growth.

In recent months, growing skepticism about the near-term likelihood of significant U.S. tax reform and infrastructure spending has tempered enthusiasm around the reflation trade. Similarly, renewed concern about oversupply has weighed on energy prices. Nonetheless, financial markets — and to an extent the Fed — have adopted a “wait-and-see” approach to the economic data and potential fiscal stimulus. Although uncertainty has persisted, benign credit conditions, modest inflation and the outlook for economic growth have kept markets relatively tranquil.

In the fifth edition of our Global Investor Pulse Survey, we heard from 28,000 individuals across 18 countries, including more than 4,000 respondents from the United States. While retirement remains the single most important issue for American investors, only a third of respondents feel confident that they will have enough retirement income, and nearly 40% of respondents have yet to begin saving for retirement. We encourage you to talk with your financial advisor and visit blackrock.com for further insight about investing in today’s markets.

Sincerely,

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

Total Returns as of June 30, 2017  
    6-month     12-month  

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

    9.34     17.90

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

    4.99       24.60  

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

    13.81       20.27  

Emerging market equities
(MSCI Emerging Markets Index)

    18.43       23.75  

3-month Treasury bills
(BofA Merrill Lynch 3-Month
U.S. Treasury Bill Index)

    0.31       0.49  

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

    2.08       (5.58

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

    2.27       (0.31

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

    3.26       (0.28

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

    4.92       12.69  
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.  

 

                
2    THIS PAGE NOT PART OF YOUR FUND REPORT      


      

 

Section 19(a) Notices

BlackRock Energy and Resources Trust’s (BGR), BlackRock Enhanced Capital and Income Fund, Inc.’s (CII), BlackRock Enhanced Equity Dividend Trust’s (BDJ), BlackRock Enhanced Global Dividend Trust’s (BOE), BlackRock Enhanced International Dividend Trust’s (BGY), BlackRock Health Sciences Trust’s (BME), BlackRock Resources & Commodities Strategy Trust’s (BCX), BlackRock Science and Technology Trust’s (BST) and BlackRock 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 U.S. federal income tax purposes.

 

June 30, 2017                                                                      
    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*

  $ 0.129255                 $ 0.336345     $ 0.465600       28%       0%       0%       72%       100%  

CII*

  $ 0.070837                 $ 0.425963     $ 0.496800       14%       0%       0%       86%       100%  

BDJ

  $ 0.079221     $ 0.018831     $ 0.182147           $ 0.280200       28%       7%       65%       0%       100%  

BOE

  $ 0.046257     $ 0.421743                 $ 0.468000       10%       90%       0%       0%       100%  

BGY*

  $ 0.047393                 $ 0.180607     $ 0.228000       21%       0%       0%       79%       100%  

BME

  $ 0.022815                 $ 1.177185     $ 1.200000       2%       0%       0%       98%       100%  

BCX*

  $ 0.076095                 $ 0.219505     $ 0.295600       26%       0%       0%       74%       100%  

BST*

                    $ 0.600000     $ 0.600000       0%       0%       0%       100%       100%  

BUI*

  $ 0.290489           $ 0.284039     $ 0.151472     $ 0.726000       40%       0%       39%       21%       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 June 30, 2017:

 

Exchange Symbol   Amount Per
Common Share
 
BGR   $ 0.0776  
CII   $ 0.0828  
BDJ   $ 0.0467  
BOE   $ 0.0780  
BGY   $ 0.0380  
BME   $ 0.2000  
BCX   $ 0.0516  
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.

 

                
   SEMI-ANNUAL REPORT    JUNE 30, 2017    3


Table of Contents     

 

     Page  

The Markets in Review

    2  

Section 19(a) Notices

    3  

Section 19(b) Disclosure

    3  

Semi-Annual Report:

 

The Benefits and Risks of Option Over-Writing

    5  

Trust Summaries

    6  

Derivative Financial Instruments

    24  
Financial Statements:  

Schedules of Investments

    25  

Statements of Assets and Liabilities

    87  

Statements of Operations

    89  

Statements of Changes in Net Assets

    91  

Statements of Cash Flows

    100  

Financial Highlights

    102  

Notes to Financial Statements

    111  

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements

    123  

Officers and Trustees

    130  

Additional Information

    131  

 

                
4    SEMI-ANNUAL REPORT    JUNE 30, 2017   


The Benefits and Risks of Option Over-Writing

 

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

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

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

Each Trust employs a plan to support a level distribution of income, capital gains and/or return of capital. The goal of the plan is to provide shareholders with consistent and predictable cash flows by setting distribution rates based on expected long-term returns of the Trusts. Such distributions, under certain circumstances, may exceed a Trust’s total return performance. When total distributions exceed total return performance for the period, the difference reduces the Trust’s total assets and net asset value per share (“NAV”) and, therefore, could have the effect of increasing the Trust’s expense ratio and reducing the amount of assets,

the Trust has available for long term investment. In order to make these distributions, a Trust may have to sell portfolio securities at less than opportune times.

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

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

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

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

 

 

                
   SEMI-ANNUAL REPORT    JUNE 30, 2017    5


Trust Summary as of June 30, 2017    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 June 30, 2017 ($13.00)1

  7.16%

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 six months ended June 30, 2017 were as follows:

 

    Returns Based On  
     Market Price     Net Asset Value  

BGR1,2

    (6.87 )%      (10.55 )% 

Lipper Natural Resources Funds3

    (2.89 )%      (7.32 )% 

 

  1   

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

 

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

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

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

What factors influenced performance?

 

 

Despite gains for the broader world equity markets, natural resources stocks generally lost ground in the first half of 2017. The downturn largely stemmed from the weakness in energy stocks, which lagged as an unfavorable balance of supply and demand put significant downward pressure on oil prices. In this environment, the Trust produced a negative absolute return at net asset value in the six-month period.

 

 

The investment adviser positioned the portfolio based on its expectation for rising oil prices. Given that oil in fact fell in the first half of the year, this aspect of the Trust’s positioning was a headwind to performance. Specifically, the Trust’s significant exposure to the exploration and production (“E&P”) sub-sector weighed on results.

 

 

The Trust’s position in the pressure pumping and service provider Superior Energy Services, Inc. detracted from absolute performance. The oil services companies Schlumberger Ltd. and Weatherford International Ltd.

   

announced a joint venture focused on pressure pumping, which could potentially increase competition in this area.

 

 

Anadarko Petroleum Corp., which fell due to the company’s possible link to two operational incidents that involved fatalities, also detracted from absolute performance.

 

 

Tesoro Corp. contributed to absolute performance, as refiners outperformed on the strength of solid demand for petroleum products and weakening oil prices (their major input cost). The company also benefited from its recent acquisition of Western Refining Corp., as the market sees the potential for synergies from the deal.

 

 

A position in Cabot Oil and Gas Corp. made a positive contribution, as well. Natural gas prices held up better than oil, and the market responded positively to increased visibility regarding the expansion of pipelines near the areas in which the company operates. The major North American energy company TransCanada Corp., which rallied following the approval for the Keystone XL pipeline, also added value.

 

 

The Trust made use of options, principally written call options on individual stocks, in order to seek enhanced income returns while continuing to participate in the performance of the underlying equities. The option overlay strategy had a positive impact on results at a time of weakness in the overall sector.

Describe recent portfolio activity.

 

 

The investment adviser increased the Trust’s exposure to U.S. onshore energy services companies and funded the purchases by taking profits in certain E&P holdings. The investment edviser also used the pullback in the broader energy sector to increase the portfolio’s beta somewhat, reflecting its belief that the fundamentals of the oil market could improve in the coming months. The investment adviser focused on companies that can be expected to generate earnings even with oil at $50 per barrel.

 

 

                
6    SEMI-ANNUAL REPORT    JUNE 30, 2017   


     BlackRock Energy and Resources Trust

 

Performance and Portfolio Management Commentary (concluded)

 

Describe portfolio positioning at period end.

 

 

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

   

respectively. 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.

 

 

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

 

    

6/30/17

    

12/31/16

     Change      High      Low  

Market Price

  $ 13.00      $ 14.44        (9.97 )%     $ 14.87      $ 12.60  

Net Asset Value

  $ 14.12      $ 16.33        (13.53 )%     $ 16.57      $ 13.83  

 

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

 

LOGO

 

Overview of the Trust’s Total Investments*

 

Ten Largest Holdings   6/30/17  

Exxon Mobil Corp.

    10

Royal Dutch Shell PLC-ADR, Class A

    9  

BP PLC

    7  

Chevron Corp.

    6  

EOG Resources, Inc.

    5  

ConocoPhillips

    5  

TransCanada Corp.

    4  

Pioneer Natural Resources Co.

    4  

Anadarko Petroleum Corp.

    3  

Baker Hughes, Inc.

    3  

 

  *   Excludes option positions and money market funds.
Industry Allocation  

6/30/17

    

12/31/16

 

Oil, Gas & Consumable Fuels

    89      91

Energy Equipment & Services

    11      9

 

      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.
 

 

                
   SEMI-ANNUAL REPORT    JUNE 30, 2017    7


Trust Summary as of June 30, 2017    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 also seeks to achieve its investment policy by employing a strategy of writing (selling) call and put options.

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

 

Trust Information

 

Symbol on NYSE

  CII

Initial Offering Date

  April 30, 2004

Current Distribution Rate on Closing Market Price as of June 30, 2017 ($14.89)1

  6.67%

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 six months ended June 30, 2017 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

CII1,2

    12.36%        9.01%  

S&P 500® Index

    N/A        9.34%  

 

  1  

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

 

  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?

 

 

In sector terms, information technology (“IT”) was the prime contributor to relative performance due to strength among semiconductor and software holdings. Consumer discretionary also aided results, in particular household durables and hotels, restaurants & leisure. Selection in materials and underweight exposure to telecommunication services benefited as well. The main detractor from performance was health care due to weakness in biotechnology and pharmaceuticals. Financials and consumer staples were also a drag, namely capital markets and food & staples retailing.

 

 

On a stock-specific basis, IT holdings Lam Research Corp. and Activision Blizzard Inc. were the top individual contributors. Lam performed very well on the back of strong execution and growing demand for its products, driven by the build-out of 3D NAND capacity, for which the company is a key supplier. The valuation remained reasonable, reflecting ongoing concerns that this may be the peak of the cycle, resulting in strong stock performance while the fundamentals continued to improve. Activision

   

outperformed amid consistently strong earnings results, allaying investor worries earlier in the period about weak Call of Duty sales. Investor excitement continued to grow around the company’s new content like Overwatch and Destiny 2, and the secular shifts in the industry such as the movement to digital monetization and eSports.

 

 

Cruise operator Carnival Corp. also added value. Carnival outperformed early in the period after a report from competitor Royal Caribbean confirmed strengthening demand in both the Caribbean and Mediterranean markets. Later, the company delivered strong earnings results, which indicated ongoing favorable supply/demand dynamics in all of the developed cruise markets, leading to continued improvement in pricing power.

 

 

Conversely, underweights to Facebook Inc. and Amazon.com Inc., two of the so-called “FANG” stocks, detracted from relative results as both posted gains of more than 25% during the six months.

 

 

The position in Goldman Sachs Group Inc. also weighed. The stock underperformed after the company reported an uncharacteristically weak quarter reflecting poor performance in its core FICC (fixed income, currencies and commodities) trading business.

 

 

The Trust made use of options, principally written call options on individual stocks, in order to seek enhanced 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 reporting period.

Describe recent portfolio activity.

 

 

Due to a combination of portfolio trading activity and market movement during the six-month period, the Trust’s exposure to the health care sector considerably increased, particularly within equipment & supplies and pharmaceuticals. Exposure to IT, industrials and materials increased as well. The largest reduction was in consumer staples, largely with respect to beverages and tobacco. Energy exposure also declined.

 

 

                
8    SEMI-ANNUAL REPORT    JUNE 30, 2017   


     BlackRock Enhanced Capital and Income Fund, Inc.

 

 

Performance and Portfolio Management Commentary (concluded)

 

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 and consumer discretionary sectors. The Trust’s largest relative underweights were in industrials, consumer staples and real estate.

 

 

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

 

    

6/30/17

    

12/31/16

     Change      High      Low  

Market Price

  $ 14.89      $ 13.71        8.61    $ 15.02      $ 13.63  

Net Asset Value

  $ 15.89      $ 15.08        5.37    $ 15.98      $ 15.08  

 

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

LOGO

 

Overview of the Trust’s Total Investments*

 

Ten Largest Holdings    6/30/17

Apple, Inc.

       5 %

Alphabet, Inc., Class A

       4

JPMorgan Chase & Co.

       4

Microsoft Corp.

       4

Comcast Corp., Class A

       3

Bank of America Corp.

       3

Pfizer, Inc.

       3

Carnival Corp.

       3

Dow Chemical Co.

       2

Home Depot, Inc.

       2

 

  *   Excludes option positions and money market funds.
Sector Allocation   

6/30/17

 

12/31/16

Information Technology

       26 %       26 %

Health Care

       16       14

Financials

       16       17

Consumer Discretionary

       16       15

Industrials

       7       6

Energy

       6       8

Consumer Staples

       6       9

Materials

       5       4

Utilities

       2       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.
 

 

                
   SEMI-ANNUAL REPORT    JUNE 30, 2017    9


Trust Summary as of June 30, 2017    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 June 30, 2017 ($8.80)1

  6.37%

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 six months ended June 30, 2017 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BDJ1,2

    11.53%        6.32%  

Russell 1000® Value Index

    N/A        4.66%  

 

  1   

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

 

  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 contribution to performance for the six-month period came from an overweight to the health care sector. Most notably, an overweight to the health care providers & services industry provided strong relative returns. Within information technology, an overweight to software and stock selection in technology hardware, storage, & peripherals added to relative performance. Lastly, an underweight to telecommunication services (“telecom”) as well as stock selection within the sector contributed to performance, as did stock selection within financials, consumer discretionary and materials.

 

The largest detractor from relative return came from stock selection in the consumer staples sector. In particular, selection within the food & staples retailing industry detracted, as non-benchmark holding Kroger Co. sold off on concerns over increasing competition in the wake of the acquisition of Whole Foods by Amazon. Additionally, stock selection in utilities weighed on performance, mainly within the multi-utilities industry. Stock selection in the industrials sector detracted from returns as well, as a significant underweight to the machinery industry proved unfavorable.

 

 

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 effect on performance.

Describe recent portfolio activity.

 

 

During the six-month period, the Trust’s exposure to the industrials, information technology (“IT”), health care, utilities and telecom sectors was increased. Conversely, exposure to consumer staples, consumer discretionary, energy, financials and real estate was decreased.

Describe portfolio positioning at period end.

 

 

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

 

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

 

                
10    SEMI-ANNUAL REPORT    JUNE 30, 2017   


     BlackRock Enhanced Equity Dividend Trust

 

 

Market Price and Net Asset Value Per Share Summary

 

    

6/30/17

    

12/31/16

     Change      High      Low  

Market Price

  $ 8.80      $ 8.15        7.98    $ 8.84      $ 8.13  

Net Asset Value

  $ 9.49      $ 9.22        2.93    $ 9.54      $ 9.16  

 

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

LOGO

 

Overview of the Trust’s Total Investments*

 

Ten Largest Holdings   

6/30/17

JPMorgan Chase & Co.

       4 %

Citigroup, Inc.

       4

Bank of America Corp.

       4

Pfizer, Inc.

       3

Oracle Corp.

       3

Dow Chemical Co.

       3

Wells Fargo & Co.

       3

Anthem, Inc.

       2

General Electric Co.

       2

Merck & Co., Inc.

       2

 

  *   Excludes option positions and money market funds.
Sector Allocation   

6/30/17

 

12/31/16

Financials

       28 %       30 %

Health Care

       16       14

Industrials

       12       12

Energy

       11       12

Information Technology

       11       9

Consumer Staples

       6       7

Utilities

       5       5

Consumer Discretionary

       5       6

Materials

       4       3

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.
 

 

                
   SEMI-ANNUAL REPORT    JUNE 30, 2017    11


Trust Summary as of June 30, 2017    BlackRock Enhanced Global Dividend Trust

 

Trust Overview

BlackRock Enhanced Global Dividend Trust’s (BOE) (the “Trust”) primary investment objective is to provide current income and current gains, with a secondary investment objective of long-term capital appreciation. The Trust seeks to achieve its investment objectives by investing primarily in equity securities issued by companies located in countries throughout the world and utilizing an option writing (selling) strategy to seek total return performance and enhance distributions. Under normal circumstances, the Trust invests at least 80% of its net assets in dividend-paying equity securities and at least 40% of its assets outside of the U.S. (unless market conditions are not deemed favorable by Trust management, in which case the Trust would invest at least 30% of its assets outside of the U.S.). The Trust may invest in securities of companies of any market capitalization, but intends to invest primarily in securities of large capitalization companies.

On March 22, 2017, the Trust’s Board approved a change to the Trust’s name from “BlackRock Global Opportunities Equity Trust” to “BlackRock Enhanced Global Dividend Trust.” The Board also approved changes to certain of the Trust’s non-fundamental investment policies. Please refer to the Additional Information section. These changes became effective on June 12, 2017.

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 June 30, 2017 ($13.25)1

  7.06%

Current Monthly Distribution per Common Share2

  $0.0780

Current Annualized Distribution per Common Share2

  $0.9360

 

  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 six months ended June 30, 2017 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BOE1,2

    18.78%        12.24%  

MSCI All Country World Index

    N/A        11.48%  

 

  1   

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

 

  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?

 

 

Positive stock selection within the financials sector led contributors for the period, in particular the Trust’s position in Federal Bank Ltd., an Indian retail bank, which benefited from an earnings report that exceeded analysts’ forecasts. Performance was also helped by the Trust’s positioning and security selection within the information technology (“IT”) sector, the top-performing segment during the period. Within IT, holdings in Skyworks Solutions, Inc., a mobile communications semiconductor company that reported favorable earnings, was a notable contributor.

 

 

Conversely, stock selection within the industrials and consumer discretionary sectors detracted from performance. Within industrials, the Trust’s

 

position in Acuity Brands, Inc., a manufacturer of energy efficient lighting solutions, led detractors due to a weak earnings report. The company’s management has continued to cite the negative impact of macroeconomic uncertainty on its business, particularly with the recent U.S. election result. Unfavorable stock selection in the consumer discretionary sector was driven by the Trust’s position in Jasper Infotech Private Ltd., a private Indian e-commerce company, which saw its valuation negatively impacted by a more competitive business environment and challenged funding terms.

 

 

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 options writing strategy detracted from performance.

Describe recent portfolio activity.

 

 

The Trust increased exposure to the consumer staples and health care sectors, funded by reductions to holdings in information technology and consumer discretionary. Regionally, these changes resulted in added exposure to Europe and reduced exposure within the emerging markets, the Pacific Basin and North America.

Describe portfolio positioning at period end.

 

 

The Trust’s largest sector overweights were in the consumer staples, health care and telecommunication services sectors, funded by underweights to financials and IT. Regionally, the Trust was significantly overweight in Europe funded by underweight exposures to Emerging Markets 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.

 

                
12    SEMI-ANNUAL REPORT    JUNE 30, 2017   


     BlackRock Enhanced Global Dividend Trust

 

 

Market Price and Net Asset Value Per Share Summary

 

    

6/30/17

    

12/31/16

     Change      High      Low  

Market Price

  $ 13.25      $ 11.57        14.52    $ 13.48      $ 11.57  

Net Asset Value

  $ 14.48      $ 13.38        8.22    $ 14.61      $ 13.38  

 

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

LOGO

 

Overview of the Trust’s Total Investments*

 

Ten Largest Holdings   

6/30/17

Altria Group, Inc.

       4 %

British American Tobacco PLC

       4

AstraZeneca PLC

       4

Imperial Brands PLC

       3

Johnson & Johnson

       3

Novartis AG, Registered Shares

       3

Pfizer, Inc.

       3

Rogers Communications, Inc., Class B

       3

TELUS Corp.

       3

Philip Morris International, Inc.

       3

 

  *   Excludes option positions and money market funds.
Geographic Allocation    6/30/17  

12/31/16

United States

       46 %       59 %

United Kingdom

       17       6

Switzerland

       10       2

Canada

       6       1

Taiwan

       3      

France

       3       2

Germany

       3       2

Australia

       2      

Finland

       2      

Belgium

       2       2

Japan

       1       6

China

       1       3

India

             3

Italy

             2

Spain

             1

Other

       4 1       11 2

 

  1  

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

 

  2   

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

 

 

                
   SEMI-ANNUAL REPORT    JUNE 30, 2017    13


Trust Summary as of June 30, 2017    BlackRock Enhanced International Dividend Trust

 

Trust Overview

BlackRock Enhanced International Dividend Trust’s (BGY) (the “Trust”) primary investment objective is to provide current income and current gains, with a secondary objective of long-term capital appreciation. The Trust seeks to achieve its investment objectives by investing primarily in equity securities issued by companies of any market capitalization located in countries throughout the world and utilizing an option writing (selling) strategy to seek total return performance and enhance distributions. The Trust invests, under normal circumstances, at least 80% of its net assets in dividend-paying equity securities issued by non-U.S. companies of any market capitalization, but intends to invest primarily in securities of large capitalization companies.

On March 22, 2017, the Trust’s Board approved a change to the Trust’s name from “BlackRock International Growth & Income Trust” to “BlackRock Enhanced International Dividend Trust.” The Board also approved changes to certain of the Trust’s non-fundamental investment policies. Please refer to the Additional Information section. These changes became effective on June 12, 2017.

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 June 30, 2017 ($6.28)1

  7.26%

Current Monthly Distribution per Common Share2

  $0.0380

Current Annualized Distribution per Common Share2

  $0.4560

 

  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 six months ended June 30, 2017 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BGY1,2

    18.36%        12.28%  

MSCI All Country World Index ex-USA

    N/A        14.10%  

 

  1   

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

 

  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?

 

 

Unfavorable stock selection within the internet & direct marketing retail sub-industry of the consumer discretionary sector detracted from performance during the period. This was led by the Trust’s position in Jasper Infotech Private Ltd., a private Indian e-commerce company, which saw its valuation negatively impacted by a more competitive business environment and challenged funding terms. In addition, the Trust’s overweight position in Shire PLC, a global biotechnology company, detracted after the FDA approved a generic equivalent for one of Shire’s popular brand-name therapies.

 

 

For the period, favorable stock selection within the diversified banks sub-industry of the financials sector led relative gains. This was driven by

   

the Trust’s position in HDFC Bank Ltd., India’s second largest private bank, after HDFC’s shares rallied following a strong earnings report. The next largest contribution came from stock selection in the technology hardware & equipment sub-industry group, most notably holdings of Catcher Technology Co., Ltd., an important supplier of parts for Apple’s iPhone. The stock has performed well year to date on news of strong demand from additional smartphone providers, including Google and Samsung.

 

 

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 options writing strategy detracted from relative returns.

Describe recent portfolio activity.

 

 

Over the six-month period, the Trust added to positions in the health care and consumer staples sectors, funded by reductions in the Trust’s financials and consumer discretionary holdings. Regionally, these changes resulted in increased exposure to North America and Europe, and reduced exposure to the emerging markets and the Pacific Basin.

Describe portfolio positioning at period end.

 

 

Relative to the MSCI All Country World Index ex-US, the Trust’s largest sector overweights were in health care and consumer staples, while the largest underweight positions were in financials and consumer discretionary. Regionally, the Trust’s largest overweights were in Europe and North America, while the largest regional underweights were in the Pacific Basin and the emerging markets.

 

 

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

 

                
14    SEMI-ANNUAL REPORT    JUNE 30, 2017   


     BlackRock Enhanced International Dividend Trust

 

Market Price and Net Asset Value Per Share Summary

 

    

6/30/17

    

12/31/16

     Change      High      Low  

Market Price

  $ 6.28      $ 5.51        13.97    $ 6.45      $ 5.45  

Net Asset Value

  $ 6.79      $ 6.28        8.12    $ 6.89      $ 6.28  

 

 

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

 

LOGO

 

Overview of the Trust’s Total Investments*

 

Ten Largest Holdings    6/30/17  

British American Tobacco PLC

     5

Imperial Brands PLC

     4  

AstraZeneca PLC

     4  

Novartis AG, Registered Shares

     4  

Rogers Communications, Inc., Class B

     4  

TELUS Corp.

     4  

Nestle SA, Registered Shares

     3  

Deutsche Post AG, Registered Shares

     3  

Sanofi

     3  

WisdomTree Japan Hedged Equity Fund

     3  

 

  *   Excludes option positions and money market funds.
Geographic Allocation    6/30/17    

12/31/16

 

United Kingdom

     23     16

Switzerland

     13       5  

United States

     8       8  

Canada

     7       5  

France

     5       9  

Netherlands

     5       6  

Germany

     5       6  

China

     5       5  

Japan

     4       8  

Taiwan

     3        

Sweden

     3       1  

Australia

     3        

Finland

     3        

Hong Kong

     2       2  

South Korea

     2       3  

Belgium

     2       2  

India

     2       4  

Ireland

     1       2  

Italy

     1       6  

Spain

           1  

Mexico

           1  

Other

     3 1       10 2  

 

  1  

Other includes a 1% holding or less in each of the following countries: Denmark, Norway, Portugal and South Africa.

 

  2   

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

 

 

                
   SEMI-ANNUAL REPORT    JUNE 30, 2017    15


Trust Summary as of June 30, 2017    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 total assets in equity securities of companies engaged in the health sciences and related industries and equity derivatives with exposure to the health sciences industry. The Trust seeks to pursue this goal primarily by investing in a portfolio of equity securities and utilizing an option over-writing strategy in an effort to seek total return performance and enhance distributions.

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

 

Trust Information

 

Symbol on NYSE

  BME

Initial Offering Date

  March 31, 2005

Current Distribution Rate on Closing Market Price as of June 30, 2017 ($36.65)1

  6.55%

Current Monthly Distribution per Common Share2

  $0.2000

Current Annualized Distribution per Common Share2

  $2.4000

 

  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 six months ended June 30, 2017 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BME1,2

    19.59%        16.71%  

Russell 3000® Healthcare Index

    N/A        16.82%  

 

  1   

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

 

  2   

The Trust’s premium 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?

 

 

Underweight positions in the outperforming pharmaceutical stocks Johnson & Johnson and Eli Lilly & Co. detracted from Trust results during the period. Out-of-benchmark positions in the European companies Roche Holding AG and Sanofi SA, which lagged the overall pharmaceutical industry, were additional detractors. In addition, several small- to medium-capitalization holdings in the biotechnology sector hurt performance for the full period despite their strong showing in June.

 

 

On the positive side, the Trust’s positioning in all four health care sub-sectors contributed to relative performance, led by the health care providers & services, biotechnology and pharmaceuticals sub-sectors.

 

 

In healthcare providers & services, the Trust benefited from stock selection in the managed care and healthcare services industries. In the latter group, Amedisys, Inc. and Quest Diagnostics, Inc. reported strong financial results and were leading contributors to performance.

 

In biotechnology, the Trust benefited from the outperformance of Vertex Pharmaceuticals, Inc. and AveXis, Inc., both of which reported positive clinical developments. An underweight in Gilead Sciences, Inc., which was hampered by mixed financial results, and the lack of a position in Alexion Pharmaceuticals, Inc., which was pressured by an investigation into its sales practices, also aided performance.

 

 

Jazz Pharmaceuticals PLC — which was boosted by positive clinical results — was a top contributor in the pharmaceuticals industry. A position in AstraZeneca PLC and an underweight in Pfizer, Inc. also aided the Trust’s return in this sub-sector.

 

 

The health care equipment industry was the key source of outperformance in the medical devices area. Several holdings generated positive returns thanks to their solid earnings, including C.R. Bard, Inc. (which was bid for by Becton Dickinson & Co.), Baxter International, Inc., Intuitive Surgical, Inc., Masimo Corp. and Boston Scientific Corp.

 

 

The Trust made use of options, principally written call options on individual stocks, in order to seek enhanced income returns while continuing to participate in the performance of the underlying equities. This strategy detracted from performance given the double-digit absolute return for health care stocks during the six-month period. The Trust also owned private securities during the time period, although this is not a principal strategy.

Describe recent portfolio activity.

 

 

The Trust increased its allocation in the medical devices & supplies sub-sector, while slightly reducing its weightings in the health care providers & services and pharmaceutical sub-sectors.

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.

 

                
16    SEMI-ANNUAL REPORT    JUNE 30, 2017   


     BlackRock Health Sciences Trust

 

Market Price and Net Asset Value Per Share Summary

 

    

6/30/17

    

12/31/16

     Change      High      Low  

Market Price

  $ 36.65      $ 31.75        15.43    $ 36.73      $ 31.75  

Net Asset Value

  $ 35.26      $ 31.30        12.65    $ 35.72      $ 31.30  

 

 

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

 

LOGO

 

Overview of the Trust’s Total Investments*

 

Ten Largest Holdings   

6/30/17

 

UnitedHealth Group, Inc.

     8

Medtronic PLC

     5  

Celgene Corp

     4  

Amgen, Inc.

     3  

Boston Scientific Corp.

     3  

Stryker Corp.

     3  

Anthem, Inc.

     3  

Humana, Inc.

     3  

Allergan PLC

     3  

Johnson & Johnson

     3  

 

  *   Excludes option positions and money market funds.
Industry Allocation    6/30/17    

12/31/16

 

Health Care Providers & Services

     28     30

Health Care Equipment & Supplies

     25       21  

Biotechnology

     24       24  

Pharmaceuticals

     21       23  

Life Sciences Tools & Services

     2       1  

Diversified Consumer Services

           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.
 

 

                
   SEMI-ANNUAL REPORT    JUNE 30, 2017    17


Trust Summary as of June 30, 2017    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 June 30, 2017 ($8.01)1

  7.73%

Current Monthly Distribution per Common Share2

  $0.0516

Current Annualized Distribution per Common Share2

  $0.6192

 

  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 six months ended June 30, 2017 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BCX1,2

    0.28%        (3.19)%  

Lipper Natural Resources Funds3

    (2.89)%        (7.32)%  

 

  1   

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

 

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

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

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

What factors influenced performance?

 

 

Despite gains for the broader world equity markets, natural resources stocks generally lost ground in the first half of 2017. The downturn largely stemmed from the weakness in energy stocks, which lagged as an unfavorable balance of supply and demand put significant downward pressure on oil prices. In this environment, the Trust produced a negative absolute return at net asset value in the six-month period.

 

 

At a time of weak returns for the broader natural resources sector, only certain stocks contributed positively to the Trust’s absolute performance. A position in Packaging Corp of America, which was boosted by an improving demand outlook for U.S. packaging — as demonstrated by increasing utilization rates across the industry — made the largest

   

contribution at the individual stock level. The Trust’s position in the agriculture science company Monsanto Co. also performed well. Monsanto was bid for in 2016 by the German pharmaceutical company Bayer AG, and its share price subsequently increased toward the bid price as the market grew more confident the deal would receive regulatory approval.

 

 

The Trust’s position in energy stocks was the most significant drag on absolute performance. The oil & gas exploration & production companies Anadarko Petroleum Corp., Cimarex Energy Co. and Devon Energy Corp. were the largest detractors. Anadarko’s stock price was also hurt by the company’s possible link to two operational incidents that involved fatalities.

 

 

The Trust made use of options, principally written call options on individual stocks, in order to seek enhanced income returns while continuing to participate in the performance of the underlying equities. The option overlay strategy had a positive impact on results at a time of weakness in the overall sector.

Describe recent portfolio activity.

 

 

The investment adviser sought to capitalize on the downturn in the energy sector by modestly increasing the Trust’s exposure to higher-quality exploration & production companies. The Trust also initiated a position in the diversified mining company BHP Billiton Ltd. on the belief that the company can generate cash and de-lever its balance sheet with iron ore prices in their current range.

Describe portfolio positioning at period end.

 

 

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

 

 

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

 

                
18    SEMI-ANNUAL REPORT    JUNE 30, 2017   


     BlackRock Resources & Commodities Strategy Trust

 

 

Market Price and Net Asset Value Per Share Summary

 

    

6/30/17

    

12/31/16

     Change      High      Low  

Market Price

  $ 8.01      $ 8.27        (3.14 )%     $ 8.99      $ 7.76  

Net Asset Value

  $ 9.22      $ 9.86        (6.49 )%     $ 10.50      $ 9.00  

 

Market Price and Net Asset Value History For Past Five Years

 

LOGO

 

Overview of the Trust’s Total Investments*

 

Ten Largest Holdings   6/30/17  

Royal Dutch Shell PLC, A Shares — ADR

    6

BP PLC — ADR

    5  

Monsanto Co.

    5  

Glencore PLC

    5  

Rio Tinto PLC — ADR

    4  

BHP Billiton PLC

    3  

Exxon Mobil Corp.

    3  

Newcrest Mining Ltd.

    3  

Packaging Corp. of America

    3  

Chevron Corp.

    3  

 

  *   Excludes option positions and money market funds.
Industry Allocation   6/30/17     

12/31/16

 

Oil, Gas & Consumable Fuels

    36      34

Metals & Mining

    34        30  

Chemicals

    14        18  

Food Products

    5        5  

Energy Equipment & Services

    4        3  

Containers & Packaging

    3        6  

Real Estate Investment Trusts (REITs)

    2         

Paper & Forest Products

    1        1  

Machinery

    1         

Food & Staples Retailing

           2  

Other

           1 1  

 

  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.

 

 

                
   SEMI-ANNUAL REPORT    JUNE 30, 2017    19


Trust Summary as of June 30, 2017    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 total assets in equity securities of science and technology companies. The Trust seeks to pursue this goal primarily by investing in a portfolio of equity securities and utilizing an option over-writing strategy in an effort to seek total return performance and enhance distributions.

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

 

Trust Information

 

Symbol on NYSE

  BST

Initial Offering Date

  October 30, 2014

Current Distribution Rate on Closing Market Price as of June 30, 2017 ($22.21)1

  5.40%

Current Monthly Distribution per Common Share2

  $0.1000

Current Annualized Distribution per Common Share2

  $1.2000

 

  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 monthly distribution per Common Share, declared on July 3, 2017, was increased to $0.1100 per share. The current distribution rate on closing market price, current monthly distribution per Common Share and current annualized distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future. A portion of the distribution may be deemed a return of capital or net realized gain.

 

Performance and Portfolio Management Commentary

 

Returns for the six months ended June 30, 2017 were as follows:

 

    Returns Based On  
     Market Price     Net Asset Value  

BST1,2

    27.34%       22.88%  

MSCI World Information Technology Index

    N/A       17.71%  

 

  1   

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

 

  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?

 

 

Within software & services, the Trust’s positions in the internet software companies Alibaba Group Holding Ltd. and Tencent Holdings Ltd. led contributors for the period. Both operate as e-commerce companies in China, and benefited from strong earnings reports.

 

 

Conversely, the Trust’s position in Jasper Infotech Private Ltd., a private Indian e-commerce company, led detractors for the period, as the company’s valuation was negatively impacted by a more competitive business environment and challenged funding terms. Within the internet & direct marketing retail sub-industry, shares of NetShoes, a

 

Brazilian online retailer of sporting goods, also meaningfully detracted following the company’s initial public stock offering amid heightened political turmoil in the region.

 

 

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 options writing strategy detracted from returns.

Describe recent portfolio activity.

 

 

The Trust added to positions in the technology hardware & equipment sub-sector, and reduced its holdings in the real estate and consumer durables & apparel sub-sectors. Regionally, the Trust added to positions in the emerging markets, funded by reductions within Europe, the Pacific Basin and North America.

Describe portfolio positioning at period end.

 

 

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

 

 

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    SEMI-ANNUAL REPORT    JUNE 30, 2017   


     BlackRock Science and Technology Trust

 

Market Price and Net Asset Value Per Share Summary

 

    

6/30/17

    

12/31/16

     Change      High      Low  

Market Price

  $ 22.21      $ 17.94        23.80    $ 23.67      $ 17.94  

Net Asset Value

  $ 24.01      $ 20.10        19.45    $ 25.01      $ 20.10  

 

Market Price and Net Asset Value History Since Inception

 

LOGO

 

  1 

Commencement of operations.

 

Overview of the Trust’s Total Investments*

 

Ten Largest Holdings    6/30/17

Alphabet, Inc., Class A

       6 %

Apple, Inc.

       6

Microsoft Corp.

       5

Tencent Holdings Ltd.

       5

Amazon.com, Inc.

       5

Facebook, Inc., Class A

       4

Alibaba Group Holding Ltd. — ADR

       4

Broadcom Ltd.

       3

Visa, Inc., A Shares

       2

Mastercard, Inc., Class A

       2

 

  *   Excludes option positions and money market funds.
Industry Allocation   6/30/17     

12/31/16

 

Internet Software & Services

    23      23

Software

    21        21  

Semiconductors & Semiconductor Equipment

    20        19  

Internet & Direct Marketing Retail

    11        7  

Technology Hardware, Storage & Peripherals

    9        7  

IT Services

    8        11  

Real Estate Investment Trusts (REITs)

    3         

Electronic Equipment, Instruments & Components

    2        2  

Media

    2        2  

Communications Equipment

    1         

Equity Real Estate Investment Trusts (REITs)

           4  

Diversified Telecommunication Services

           1  

Other

           3 1  

 

  1   

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.

 

 

                
   SEMI-ANNUAL REPORT    JUNE 30, 2017    21


Trust Summary as of June 30, 2017    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 June 30, 2017 ($20.55)1

  7.07%

Current Monthly Distribution per Common Share2

  $0.1210

Current Annualized Distribution per Common Share2

  $1.4520

 

  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 six months ended June 30, 2017 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BUI1,2

    15.67%        10.51%  

Lipper Utility Funds3

    17.89%        10.24%  

 

  1   

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

 

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

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

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

What factors influenced performance?

 

 

The largest contributor to absolute return was the Trust’s stock selection in utilities. Utilities performed strongly during the period, as investors continued to seek higher-yielding equities. From an industry standpoint, stock selection in electric utilities and independent power & renewable electricity producers were the most noteworthy contributors to performance. Within the electric utilities industry, the Trust’s performance benefitted from its lack of exposure to Southern Co., as well as from overweight positions in NextEra Energy, Inc. and Italian utility operator Enel SpA.

 

 

The largest detractor from absolute returns was the Trust’s overweight position in the energy sector, which has been negatively impacted by

   

weak crude oil prices. The Trust’s stock selection in the oil, gas, & consumable fuels industry detracted from performance, especially among midstream master limited partnerships Plains All American Pipeline, L.P., Energy Transfer Partners, L.P., and Dominion Energy Midstream Partners, LP. Also detracting from the Trust’s return was an underweight position in the industrials sector, particularly among transportation infrastructure industry stocks including airport services providers Aena, S.A. in Spain and Grupo Aeroportuario del Sureste, S.A.B. de C.V. in Mexico.

 

 

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 detracted from performance during the period.

Describe recent portfolio activity.

 

 

During the period, the Trust made few changes to its sector and industry allocations. In terms of individual positions, notable changes included adding to existing positions in Enel SpA and FirstEnergy Corp., while exiting the Trust’s position in Spanish renewable electricity company EDP Renovaveis S.A. and trimming exposure to multi-utility provider CMS Energy Corp.

Describe portfolio positioning at period end.

 

 

The utilities sector accounted for approximately 63% 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

 

 

                
22    SEMI-ANNUAL REPORT    JUNE 30, 2017   


     BlackRock Utility and Infrastructure Trust

 

 

Performance and Portfolio Management Commentary (concluded)

 

 

levels, placing even greater importance on stock selection. As such, the Trust was focused on owning companies with strong management teams that offer the potential for above-sector growth in earnings and dividends.

   

The Trust 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.

 

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

 

    

6/30/17

    

12/31/16

     Change      High      Low  

Market Price

  $ 20.55      $ 18.41        11.62    $ 21.40      $ 18.36  

Net Asset Value

  $ 20.71      $ 19.42        6.64    $ 21.24      $ 19.42  

 

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

 

LOGO

 

Overview of the Trust’s Total Investments*

 

Ten Largest Holdings    6/30/17

NextEra Energy, Inc.

       9 %

Dominion Resources, Inc.

       5

Enel SpA

       5

Atlantia SpA

       4

NextEra Energy Partners LP

       4

National Grid PLC

       4

Duke Energy Corp.

       3

Exelon Corp.

       3

Public Service Enterprise Group, Inc.

       3

Transurban Group

       3

 

  *   Excludes option positions and money market funds.
Industry Allocation   

6/30/17

 

12/31/16

Electric Utilities

       32 %       28 %

Multi-Utilities

       22       22

Transportation Infrastructure

       16       14

Oil, Gas & Consumable Fuels

       15       20

Independent Power and Renewable Electricity Producers

       6       4

Construction & Engineering

       3       3

Gas Utilities

       2       1

Water Utilities

       2       2

Real Estate Investment Trusts (REITs)

       2       3

Diversified Telecommunication Services

             2

Other

             1 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.

 

 

                
   SEMI-ANNUAL REPORT    JUNE 30, 2017    23


Derivative Financial Instruments     

 

The Trusts may invest in various derivative financial instruments. These instruments are used to obtain exposure to a security, commodity, index, market, and/or other asset without owning or taking physical custody of securities, commodities and/or other referenced assets or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage and involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the

transaction or illiquidity of the instrument. The Trusts’ successful use of a derivative financial instrument depends on the investment adviser’s ability to predict pertinent market movements accurately, which cannot be assured. The use of these instruments may result in losses greater than if they had not been used, may limit the amount of appreciation a Trust can realize on an investment and/or may result in lower distributions paid to shareholders. The Trusts’ investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.

 

 

                
24    SEMI-ANNUAL REPORT    JUNE 30, 2017   


Schedule of Investments June 30, 2017 (Unaudited)

  

BlackRock Energy and Resources Trust (BGR)

(Percentages shown are based on Net Assets)

 

Common Stocks    Shares     Value  
Energy Equipment & Services — 11.3%  

Baker Hughes, Inc. (a)

     253,400     $ 13,812,834  

Halliburton Co. (a)

     312,600       13,351,146  

Precision Drilling Corp. (b)

     849,830       2,903,105  

Schlumberger Ltd. (a)

     187,224       12,326,828  

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

     517,100       5,393,353  
    

 

 

 
               47,787,266  
Oil, Gas & Consumable Fuels — 87.9%  

Anadarko Petroleum Corp. (a)

     308,783       14,000,221  

BP PLC

     4,732,250       27,315,359  

Cabot Oil & Gas Corp. (a)

     283,900       7,120,212  

Cairn Energy PLC (b)

     1,810,176       4,064,182  

Canadian Natural Resources Ltd.

     428,484       12,364,182  

Chevron Corp. (a)(c)

     229,800       23,975,034  

Cimarex Energy Co.

     118,900       11,177,789  

ConocoPhillips (a)

     493,050       21,674,478  

Devon Energy Corp. (a)

     311,050       9,944,268  

Enbridge, Inc.

     206,450       8,224,250  

Encana Corp.

     1,141,000       10,039,181  

Eni SpA

     533,450       8,016,613  

EOG Resources, Inc. (a)

     247,900       22,439,908  

EQT Corp. (a)

     115,900       6,790,581  

Exxon Mobil Corp. (a)

     531,800       42,932,214  

Hess Corp. (a)

     205,150       8,999,931  

International Petroleum Corp. (b)

     48,925       145,183  

Kosmos Energy Ltd. (b)

     721,207       4,622,937  

Marathon Oil Corp. (a)

     706,300       8,369,655  

Noble Energy, Inc. (a)(c)

     287,292       8,130,364  

Oil Search Ltd.

     1,085,763       5,685,688  

Phillips 66 (a)

     56,700       4,688,523  

Pioneer Natural Resources Co. (a)

     94,550       15,088,289  
Common Stocks    Shares     Value  
Oil, Gas & Consumable Fuels (continued)  

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

     698,200     $ 37,137,258  

Royal Dutch Shell PLC, Class A

     511,048       13,577,881  

Tesoro Corp. (a)

     82,050       7,679,880  

TransCanada Corp.

     324,450       15,466,918  

Valero Energy Corp. (a)

     156,200       10,537,252  
    

 

 

 
               370,208,231  
Total Long-Term Investments
(Cost — $437,491,469) — 99.2%
             417,995,497  
    
                  
Short-Term Securities  

BlackRock Liquidity Funds, T-Fund, Institutional Class, 0.84% (d)(e)

     6,214,460       6,214,460  

Total Short-Term Securities

(Cost — $6,214,460) — 1.5%

 

 

    6,214,460  

Total Investments Before Options Written

(Cost — $443,705,929) — 100.7%

 

 

    424,209,957  
    
                  
Options Written
(Premiums Received — $3,341,898) — (0.5)%
      (2,193,235

Total Investments, Net of Options Written

(Cost — $440,364,031) — 100.2%

 

 

    422,016,722  

Liabilities in Excess of Other Assets — (0.2)%

 

    (872,218
    

 

 

 

Net Assets — 100.0%

 

  $ 421,144,504  
    

 

 

 
 
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 the security has been pledged as collateral in connection with outstanding OTC derivatives.

 

(d)   Current yield as of period end.

 

(e)   During the period ended June 30, 2017, 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, 2016
     Net
Activity
     Shares
Held at
June 30, 2017
   

Value at
June 30,

2017

     Income      Net Realized
Gain
     Change in
Unrealized
Appreciation
(Depreciation)
        

BlackRock Liquidity Funds, T-Fund, Institutional Class

     3,936,617        2,277,843        6,214,460     $ 6,214,460      $ 16,781                  

SL Liquidity Series, LLC, Money Market Series

                                22,641 1                       

Total

           $ 6,214,460      $ 39,422                  
          

 

 

 

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.

    

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.

 

Portfolio Abbreviations

 

ADR    American Depositary Receipts
AUD    Australian Dollar
CAD    Canadian Dollar
CHF    Swiss Franc
EUR    Euro
GBP    British Pound
GDR    Global Depositary Receipt
HKD    Hong Kong Dollar
JPY    Japanese Yen
KRW    Korean Won
NOK    Norwegian Krone
NZD    New Zealand Dollar
OTC    Over-the-Counter
SEK    Swedish Krona
TWD    Taiwan Dollar
USD    U.S. Dollar
ZAR    South African Rand
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    JUNE 30, 2017    25


Schedule of Investments (continued)

  

BlackRock Energy and Resources Trust (BGR)

 

 

Derivative Financial Instruments Outstanding as of Period End

 

Exchange-Traded Options Written  
Description   Put/
Call
     Expiration
Date
     Strike
Price
       Contracts     Value  

Marathon Oil Corp.

  Call      7/06/17      USD     15.50          58     $  

Anadarko Petroleum Corp.

  Call      7/07/17      USD     53.50          176       (704

Baker Hughes, Inc.

  Call      7/07/17      USD     56.00          102       (6,630

Cabot Oil & Gas Corp.

  Call      7/07/17      USD     23.00          548       (117,820

Chevron Corp.

  Call      7/07/17      USD     107.00          218       (981

ConocoPhillips

  Call      7/07/17      USD     46.00          159       (477

Devon Energy Corp.

  Call      7/07/17      USD     37.50          21       (84

EOG Resources, Inc.

  Call      7/07/17      USD     94.00          43       (430

Exxon Mobil Corp.

  Call      7/07/17      USD     82.00          129       (1,290

Marathon Oil Corp.

  Call      7/07/17      USD     14.00          244       (488

Pioneer Natural Resources Co.

  Call      7/07/17      USD     172.50          45       (3,600

Royal Dutch Shell PLC — ADR, Class A

  Call      7/07/17      USD     55.95          514       (240

Schlumberger Ltd.

  Call      7/07/17      USD     70.00          86       (172

Valero Energy Corp.

  Call      7/07/17      USD     67.00          32       (2,816

Chevron Corp.

  Call      7/13/17      USD     107.50          218       (4,121

Anadarko Petroleum Corp.

  Call      7/14/17      USD     52.50          208       (832

Baker Hughes, Inc.

  Call      7/14/17      USD     56.00          198       (7,920

Devon Energy Corp.

  Call      7/14/17      USD     35.00          52       (416

EOG Resources, Inc.

  Call      7/14/17      USD     91.50          103       (10,867

Exxon Mobil Corp.

  Call      7/14/17      USD     81.00          378       (24,570

Hess Corp.

  Call      7/14/17      USD     46.00          203       (6,800

Pioneer Natural Resources Co.

  Call      7/14/17      USD     170.00          177       (7,522

Valero Energy Corp.

  Call      7/14/17      USD     66.00          130       (25,220

Baker Hughes, Inc.

  Call      7/21/17      USD     56.25          102       (6,736

Canadian Natural Resources Ltd.

  Call      7/21/17      CAD     38.00          367       (16,414

ConocoPhillips

  Call      7/21/17      USD     46.00          290       (7,830

Devon Energy Corp.

  Call      7/21/17      USD     33.00          86       (4,988

Encana Corp.

  Call      7/21/17      CAD     13.00          994       (6,132

Encana Corp.

  Call      7/21/17      CAD     15.00          290       (1,118

EOG Resources, Inc.

  Call      7/21/17      USD     97.50          21       (357

EQT Corp.

  Call      7/21/17      USD     55.00          202       (86,860

Exxon Mobil Corp.

  Call      7/21/17      USD     80.00          342       (50,445

Exxon Mobil Corp.

  Call      7/21/17      USD     85.00          216       (1,188

Halliburton Co.

  Call      7/21/17      USD     43.50          142       (9,727

Halliburton Co.

  Call      7/21/17      USD     48.00          245       (857

Hess Corp.

  Call      7/21/17      USD     52.50          288       (576

Noble Energy, Inc.

  Call      7/21/17      USD     30.00          580       (11,600

Precision Drilling Corp.

  Call      7/21/17      CAD     6.00          520       (2,005

Royal Dutch Shell PLC — ADR, Class A

  Call      7/21/17      USD     55.95          514       (4,210

Schlumberger Ltd.

  Call      7/21/17      USD     72.50          135       (877

Tesoro Corp.

  Call      7/21/17      USD     90.00          87       (38,715

TransCanada Corp.

  Call      7/21/17      CAD     64.00          240       (1,758

Valero Energy Corp.

  Call      7/21/17      USD     65.00          197       (58,411

Valero Energy Corp.

  Call      7/21/17      USD     67.50          33       (4,026

Exxon Mobil Corp.

  Call      7/25/17      USD     83.25          192       (4,596

Baker Hughes, Inc.

  Call      7/28/17      USD     57.00          101       (22,422

Cabot Oil & Gas Corp.

  Call      7/28/17      USD     23.00          220       (53,350

Canadian Natural Resources Ltd.

  Call      7/28/17      CAD     38.00          765       (44,244

Chevron Corp.

  Call      7/28/17      USD     108.00          185       (11,008

Devon Energy Corp.

  Call      7/28/17      USD     33.00          265       (20,008

EOG Resources, Inc.

  Call      7/28/17      USD     92.00          178       (27,590

Exxon Mobil Corp.

  Call      7/28/17      USD     82.50          200       (12,000

Halliburton Co.

  Call      7/28/17      USD     44.00          143       (11,583

Marathon Oil Corp.

  Call      7/28/17      USD     13.00          502       (7,028

Pioneer Natural Resources Co.

  Call      7/28/17      USD     167.50          47       (8,812

Schlumberger Ltd.

  Call      7/28/17      USD     70.00          189       (6,048

Valero Energy Corp.

  Call      7/28/17      USD     65.50          65       (18,850

Royal Dutch Shell PLC — ADR, Class A

  Call      8/01/17      USD     55.50          1,415       (31,683

Anadarko Petroleum Corp.

  Call      8/04/17      USD     47.50          233       (21,320

Baker Hughes, Inc.

  Call      8/04/17      USD     55.00          165       (23,100

Chevron Corp.

  Call      8/04/17      USD     107.00          183       (20,039

Devon Energy Corp.

  Call      8/04/17      USD     31.00          49       (9,947

 

See Notes to Financial Statements.      
                
26    SEMI-ANNUAL REPORT    JUNE 30, 2017   


Schedule of Investments (continued)

  

BlackRock Energy and Resources Trust (BGR)

 

Exchange-Traded Options Written (continued)  
Description   Put/
Call
       Expiration
Date
       Strike
Price
       Contracts     Value  

EOG Resources, Inc.

    Call          8/04/17          USD       89.00          522     $ (194,445

Marathon Oil Corp.

    Call          8/04/17          USD       12.00          913       (49,759

Tesoro Corp.

    Call          8/04/17          USD       94.50          113       (28,476

Valero Energy Corp.

    Call          8/04/17          USD       68.50          89       (12,327

Anadarko Petroleum Corp.

    Call          8/11/17          USD       46.50          310       (44,330

Cabot Oil & Gas Corp.

    Call          8/11/17          USD       26.00          225       (19,800

ConocoPhillips

    Call          8/11/17          USD       45.00          319       (30,305

Halliburton Co.

    Call          8/11/17          USD       43.00          244       (36,600

Hess Corp.

    Call          8/11/17          USD       43.50          227       (53,118

Phillips 66

    Call          8/11/17          USD       82.50          198       (43,560

Schlumberger Ltd.

    Call          8/11/17          USD       67.50          176       (21,648

Exxon Mobil Corp.

    Call          8/14/17          USD       83.00          254       (13,836

Halliburton Co.

    Call          8/16/17          USD       46.10          320       (16,597

Anadarko Petroleum Corp.

    Call          8/18/17          USD       50.00          153       (8,491

Baker Hughes, Inc.

    Call          8/18/17          USD       55.00          218       (40,330

Canadian Natural Resources Ltd.

    Call          8/18/17          CAD       38.00          367       (32,829

ConocoPhillips

    Call          8/18/17          USD       45.00          320       (33,920

ConocoPhillips

    Call          8/18/17          USD       47.00          290       (14,065

Devon Energy Corp.

    Call          8/18/17          USD       33.00          615       (77,490

Enbridge, Inc.

    Call          8/18/17          CAD       54.00          250       (5,783

Exxon Mobil Corp.

    Call          8/18/17          USD       85.00          150       (3,975

Marathon Oil Corp.

    Call          8/18/17          USD       13.00          332       (9,628

Noble Energy, Inc.

    Call          8/18/17          USD       30.00          425       (23,375

Pioneer Natural Resources Co.

    Call          8/18/17          USD       170.00          60       (18,750

Schlumberger Ltd.

    Call          8/18/17          USD       70.00          69       (4,243

Tesoro Corp.

    Call          8/18/17          USD       95.00          87       (24,795

ConocoPhillips

    Call          8/30/17          USD       47.60          347       (17,711

Superior Energy Services, Inc.

    Call          9/15/17          USD       10.00          220       (34,650

Total

                     $ (1,807,294
                    

 

 

 

 

OTC Options Written                                      
Description   Put/
Call
  Counterparty   Expiration
Date
    Strike
Price
   

Contracts

    Value  

BP PLC

  Call   Credit Suisse International     07/06/17       GBP       4.75       450,000     $ (434

Royal Dutch Shell PLC — ADR, Class A

  Call   Citibank N.A.     07/06/17       GBP       21.26       138,900       (1,592

Encana Corp.

  Call   Deutsche Bank AG     07/07/17       CAD       16.05       17,900       (1

EQT Corp.

  Call   Credit Suisse International     07/07/17       USD       60.07       20,300       (8,360

Cimarex Energy Co.

  Call   UBS AG     07/10/17       USD       119.70       4,300        

Superior Energy Services, Inc.

  Call   UBS AG     07/10/17       USD       12.61       20,000       (518

Oil Search Ltd.

  Call   Deutsche Bank AG     07/18/17       AUD       7.19       100,000       (3,217

BP PLC

  Call   Credit Suisse International     07/19/17       GBP       4.69       180,800       (2,006

Enbridge, Inc.

  Call   Citibank N.A.     07/19/17       CAD       53.16       22,200       (3,376

Eni SpA

  Call   Credit Suisse International     07/19/17       EUR       14.06       87,000       (1,576

Royal Dutch Shell PLC — ADR, Class A

  Call   Goldman Sachs International     07/26/17       GBP       20.95       40,000       (8,127

BP PLC

  Call   Credit Suisse International     07/27/17       GBP       4.73       363,000       (7,241

TransCanada Corp.

  Call   Morgan Stanley & Co. International PLC     07/31/17       CAD       63.99       46,500       (30,270

Superior Energy Services, Inc.

  Call   Royal Bank of Canada     08/02/17       USD       10.84       27,600       (19,572

BP PLC

  Call   Credit Suisse International     08/04/17       GBP       4.75       363,000       (9,618

Eni SpA

  Call   Goldman Sachs International     08/04/17       EUR       14.34       12,800       (425

Oil Search Ltd.

  Call   Deutsche Bank AG     08/04/17       AUD       7.08       215,000       (20,417

Cimarex Energy Co.

  Call   Goldman Sachs International     08/07/17       USD       98.61       15,500       (26,560

Encana Corp.

  Call   Citibank N.A.     08/08/17       CAD       11.49       39,000       (19,144

Encana Corp.

  Call   Morgan Stanley & Co. International PLC     08/08/17       CAD       13.81       62,000       (6,724

BP PLC

  Call   Goldman Sachs International     08/09/17       GBP       4.54       299,500       (26,643

Eni SpA

  Call   Morgan Stanley & Co. International PLC     08/09/17       EUR       13.80       87,000       (11,543

Superior Energy Services, Inc.

  Call   UBS AG     08/09/17       USD       10.80       39,600       (34,751

TransCanada Corp.

  Call   Citibank N.A.     08/15/17       CAD       63.48       43,000       (13,804

Superior Energy Services, Inc.

  Call   Goldman Sachs International     08/16/17       USD       10.90       27,500       (23,590

Encana Corp.

  Call   Citibank N.A.     08/22/17       CAD       12.04       32,500       (12,412

Encana Corp.

  Call   Royal Bank of Canada     08/22/17       CAD       11.33       42,000       (26,602

Cimarex Energy Co.

  Call   Goldman Sachs International     08/23/17       USD       98.61       15,500       (35,478

Enbridge, Inc.

  Call   Goldman Sachs International     08/31/17       CAD       54.10       25,000       (6,405

Encana Corp.

  Call   Royal Bank of Canada     09/06/17       CAD       11.89       47,600       (25,535

Total

              $ (385,941
             

 

 

 

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    JUNE 30, 2017    27


Schedule of Investments (continued)

  

BlackRock Energy and Resources Trust (BGR)

 

 

Transactions in Options Written for the Period Ended June 30, 2017

 

    Calls  
    

Contracts

       Premiums
Received
 

Outstanding options, beginning of period

      3,570,352        $ 4,804,608  

Options written

      12,778,126          13,413,684  

Options exercised

                

Options expired

      (8,735,561        (6,859,698

Options closed

      (4,705,074        (8,016,696
   

 

 

 

Outstanding options, end of period

      2,907,843        $ 3,341,898  
   

 

 

 

As of period end, the value of portfolio securities subject to covered call options written was $140,124,445.

 

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:

 

Liabilities — Derivative Financial Instruments   Commodity
Contracts
    Credit
Contracts
    Equity
Contracts
    Foreign
Currency
Exchange
Contracts
    Interest
Rate
Contracts
    Other
Contracts
    Total  

Options written

   Options written, at value               $ 2,193,235                       $ 2,193,235  
                
For the six month ended June 30, 2017, the effect of derivative financial instruments in the Statements of Operations was as follows:  
                
Net Realized Gain (Loss) from:                                                       

Options written

              $ 9,048,883                       $ 9,048,883  
Net Change in Unrealized Appreciation on:                                                 

Options written

              $ 2,496,409                       $ 2,496,409  

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Options:  

Average value of option contracts written

  $ 2,447,757  

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:

 

Derivative Financial Instruments   Assets        Liabilities  

Options

           $ 2,193,235  
 

 

 

 

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

           $ (1,807,294
 

 

 

 

Total derivative assets and liabilities subject to an MNA

           $ 385,941  
 

 

 

 

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

 

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
               

Citibank N.A.

  $ 50,328                 $ (50,328                      

Credit Suisse International

    29,235                                   $ 29,235      

Deutsche Bank AG

    23,635                                     23,635      

Goldman Sachs International

    127,228                                     127,228      

Morgan Stanley & Co. International PLC

    48,537                   (48,537                      

Royal Bank of Canada

    71,709                                     71,709      

UBS AG

    35,269                                     35,269      
 

 

 

   

Total

  $ 385,941                 $ (98,865               $ 287,076      
 

 

 

   

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.      
                
28    SEMI-ANNUAL REPORT    JUNE 30, 2017   


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:

       

Energy Equipment & Services

  $ 47,787,266                 $ 47,787,266  

Oil, Gas & Consumable Fuels