The information in the above Financial Highlights represents the unaudited operating performance for a share outstanding, total investment return, ratios to average net assets and other supplemental data for the period indicated. This information has been determined based upon financial information provided in the financial statements and market price data for the Trust’s shares.
See Notes to Financial Statements.
| NOTES TO FINANCIAL STATEMENTS (unaudited) |
|
Note 1. Organization & Accounting Policies BlackRock Dividend AchieversTM Trust (“Dividend Achievers”), BlackRock Global Energy Resources Trust (“Global Energy and Resources”), BlackRock Health Sciences Trust (“Health Sciences”), BlackRock Strategic Dividend AchieversTM Trust (“Strategic Dividend Achievers”) and S&P Quality Rankings Global Equity Managed Trust (“S&P Quality Rankings”) (collectively, the “Trusts”) are organized as Delaware statutory trusts and registered as diversified, closed-end management investment companies under the Investment Company Act of 1940, as amended. Dividend Achievers was organized on September 29, 2003, and had no transactions until December 15, 2003, when the Trust sold 8,028 common shares for $115,001 to BlackRock Funding, Inc. Investment operations for Dividend Achievers commenced on December 23, 2003. Global Energy and Resources was organized on October 20, 2004, and had no transactions until December 6, 2004, when the Trust sold 4,817 common shares for $115,006 to BlackRock Funding, Inc. Investment operations for Global Energy and Resources commenced on December 29, 2004. Health Sciences was organized on January 19, 2005, and had no transactions until March 10, 2005, when the Trust sold 4,827 common shares for $115,006 to BlackRock Funding, Inc. Investment operations for Health Sciences commenced on March 31, 2005. Strategic Dividend Achievers was organized on January 22, 2004, and had no transactions until March 10, 2004, when the Trust sold 8,028 common shares for $115,001 to BlackRock Funding, Inc. Investment operations for Strategic Dividend Achievers commenced on March 30, 2004. S&P Quality Rankings was organized on February 18, 2004, and had no transactions until May 11, 2004, when the Trust sold 8,028 common shares for $115,001 to BlackRock Funding, Inc. Investment operations for S&P Quality Rankings commenced on May 28, 2004.
Investment Valuation: Each Trust values its investments primarily by using market quotations. Short-term debt investments having a remaining maturity of 60 days or less when purchased and debt investments originally purchased with maturities in excess of 60 days but which currently have maturities of 60 days or less may be valued at cost adjusted for amortization of premiums and accretion of discounts. Any investments or other assets for which current market quotations are not readily available are valued at their fair value (“Fair Value Assets”) as determined in good faith under procedures established by and under the general supervision and responsibility of each Trust’s Board of Trustees (the “Board”). The investment advisor and/or sub-advisor will submit its recommendations regarding the valuation and/or valuation methodologies for Fair Value Assets to a valuation committee. The valuation committee may accept, modify or reject any recommendations. The pricing of all Fair Value Assets shall be subsequently reported to and ratified by the Board of Trustees.
When determining the price for a Fair Value Asset, the investment advisor and/or sub-advisor shall seek to determine the price that the Trust might reasonably expect to receive from the current sale of that asset in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that BlackRock Advisors deems relevant.
Investment Transactions and Investment Income: Investment transactions are recorded on trade date. Realized and unrealized gains and losses are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date, except certain dividends from foreign securities where the ex-dividend date may have passed. These dividends are recorded as soon as the Trust is informed of the ex-dividend date. Dividend income on foreign securities is recorded net of any withholding tax.
Option Writing/Purchasing: When a Trust writes or purchases an option, an amount equal to the premium received or paid by the Trust is recorded as a liability or an asset and is subsequently adjusted to the current market value of the option written or purchased. Premiums received or paid from writing or purchasing options which expire unexercised are treated by the Trust on the expiration date as realized gains or losses. The difference between the premium and the amount paid or received on effecting a closing purchase or sale transaction, including brokerage commissions, is also treated as a realized gain or loss. If an option is exercised, the premium paid or received is added to the cost of the purchase or the proceeds from the sale in determining whether a Trust has realized a gain or a loss on investment transactions. A Trust, as writer of an option, may have no control over whether the underlying securities may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the security underlying the written option.
A call option gives the purchaser of the option the right (but not obligation) to buy, and obligates the seller to sell (when the option is exercised), the underlying position at the exercise price at any time or at a specified time during the option period. A put option gives the holder the right to sell and obligates the writer to buy the underlying position at the exercise price at any time or at a specified time during the option period.
The main risk that is associated with purchasing options is that the option expires without being exercised. In this case, the option expires worthless and the premium paid for the option is considered the loss. The risk associated with writing call options is that a Trust may forgo the opportunity for a profit if the market value of the underlying position increases and the option is exercised. The risk in writing put options is that a Trust may incur a loss if the market value of the underlying position decreases and the option is exercised. In addition, the Trust risks not being able to enter into a closing transaction for the written option as the result of an illiquid market.
Federal Income Taxes: It is each Trust’s intention to elect to be treated as a regulated investment company under the Internal Revenue Code and to distribute sufficient amounts of its taxable income to shareholders. Therefore, no Federal income tax provisions are required.
Dividends and Distributions: The Trusts declare and pay dividends and distributions to common shareholders quarterly from net investment income, net realized short-term capital gains and other sources, if necessary. Net long-term capital gains, if any, in excess of loss carryforwards may be distributed annually. If the total dividends and distributions made in any tax year exceeds net investment income and accumulated realized capital gains, a portion of the total distribution may be treated as a tax-free return of capital. Dividends and distributions are recorded on the ex-dividend date. Income distributions and capital gain distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America.
Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
29
Deferred Compensation and BlackRock Closed-End Share Equivalent Investment Plan: Under the deferred compensation plan approved by the Board, non-interested Trustees are required to defer a portion of their annual complex-wide compensation pursuant to the plan. Deferred amounts earn an approximate return as though equivalent dollar amounts had been invested in common shares of other BlackRock closed-end trusts selected by the Trustees. This has the same economic effect for the Trustees as if the Trustees had invested the deferred amounts in such Trusts.
The deferred compensation plan is not funded and obligations thereunder represent general unsecured claims against the general assets of the Trust. Each Trust may, however, elect to invest in common shares of those Trusts selected by the Trustees in order to match its deferred compensation obligations.
Note 2. Agreements Each Trust has an Investment Management Agreement with BlackRock Advisors, Inc. (the “Advisor”), a wholly owned subsidiary of BlackRock, Inc. BlackRock Financial Management, Inc., a wholly owned subsidiary of BlackRock, Inc., serves as sub-advisor to each Trust. BlackRock, Inc. is an indirect majority owned subsidiary of The PNC Financial Services Group, Inc. The investment management agreement covers both investment advisory and administration services.
Each Trust’s investment advisory fee paid to the Advisor is computed weekly, accrued daily and payable monthly based on an annual rate, 0.65% for Dividend Achievers, 1.20% for Global Energy and Resources, 1.00% for Health Sciences, 0.75% for Strategic Dividend Achievers and 0.75% for S&P Quality Rankings, of each Trust’s average weekly managed assets. Because the Trusts have no present intention of borrowing for investment purposes, the Trusts’“managed assets” will generally be equal to the Trusts’net assets. The Advisor has voluntarily agreed to waive a portion of the investment advisory fees or some other expenses on Global Energy and Resources as a percentage of its average weekly managed assets as follows: 0.20% for first five years of the Trust’s operations, 0.15% in year 6, 0.10% in year 7 and 0.05% in year 7.
Pursuant to the Investment Management Agreement, the Advisor provides continuous supervision of the investment portfolio and pays the compensation of officers of the Trust who are affiliated persons of the Advisor. The Advisor pays occupancy and certain clerical and accounting costs. Each Trust bears all other costs and expenses, which may include reimbursements to the Advisor for cost of employees that provide pricing, secondary market support and compliance support to the Trust.
Dividend Achievers Universe: Dividend Achievers and Strategic Dividend Achievers have been granted a revocable license by Mergent®, Inc. (“Mergent®”) to use the Dividend AchieverTM universe of common stocks. If Mergent® revokes each Trust’s license to use the Dividend AchieversTM universe, the Board of that Trust may need to adopt a new investment strategy and/or new investment policies. There is no assurance that a Trust would pursue or achieve its investment objective during the period in which it implements these replacement investment policies or strategies. “Mergent®’’and “Dividend AchieversTM’’are trademarks of Mergent® and have been licensed for use by Dividend Achievers and Strategic Dividend Achievers. The products are not sponsored, endorsed, sold or promoted by Mergent® and Mergent® makes no representation regarding the advisability of investing in either Trust.
S&P Quality Rankings: S&P Quality Rankings has been granted a license by Standard & Poor’s®, (“S&P®”) to use the S&P Quality Rankings and the S&P International Quality Rankings. If S&P® terminates the license to use either the S&P Quality Rankings or the S&P International Quality Rankings, the Board may need to adopt a new investment strategy and/or new investment polices. There is no assurance that the Trust would pursue or achieve its investment objective during the period in which it implements these replacement investment policies or strategies. “Standard & Poor’s®”, “S&P®”, “Standard & Poor’s Earnings and Dividend Rankings”, “S&P Earnings and Dividend Rankings”, “Standard & Poor’s Quality Rankings”, “Standard & Poor’s International Quality Rankings”, “S&P International Quality Rankings” and “S&P Quality Rankings” are trademarks of Standard & Poor’s® and have been licensed for use by the Trust. The Trust is not sponsored, managed, advised, sold or promoted by Standard & Poor’s®.
Note 3. Portfolio Securities Purchases and sales of investment securities, other than short-term investments, for the six months ended April 30, 2005 were as follows:
| Trust | | Purchases | | Sales | |
| |
| |
| |
| Dividend Achievers | | $190,776,653 | | $194,725,828 | |
| Global Energy and Resources | | 773,554,264 | | 77,230,331 | |
| Health Sciences | | 158,652,562 | | 19,807,287 | |
| Strategic Dividend Achievers | | — | | 1,957,434 | |
| S&P Quality Rankings | | 3,232,476 | | 3,209,848 | |
At April 30, 2005, the total cost of securities for Federal income tax purposes and the aggregate gross unrealized appreciation and depreciation for securities held by each Trust were as follows:
| Trust | | Cost | | Appreciation | | Depreciation | | Net |
| |
|
| |
|
| |
|
| |
|
|
| Dividend Achievers | | $ | 758,905,392 | | $ | 53,916,009 | | $ | (16,749,653 | ) | $ | 37,166,356 |
| Global Energy and Resources | | | 715,941,532 | | | 26,054,197 | | | (20,019,974 | ) | | 6,034,223 |
| Health Sciences | | | 192,132,565 | | | 4,718,534 | | | (1,182,856 | ) | | 3,535,678 |
| Strategic Dividend Achievers | | | 371,731,236 | | | 31,935,054 | | | (11,489,214 | ) | | 20,445,840 |
| S&P Quality Rankings | | | 85,833,332 | | | 11,598,004 | | | (1,769,396 | ) | | 9,828,608 |
30
For Federal income tax purposes, the following Trusts had capital loss carryforwards as of October 31, 2004. These amounts may be used to offset future realized capital gains, if any:
| | | Capital Loss | | |
| Trust | | Carryforward Amount | | Expires |
| |
|
| |
|
| Strategic Dividend Achievers | | $ 21,532 | | | 2012 |
| S&P Quality Rankings | | 215,931 | | | 2012 |
Transactions in options written during the period ended April 30, 2005, were as follows:
| | Global Energy and Resources | | Health Sciences | |
| | Calls | | Puts | | Calls | | Puts | |
| |
| |
| |
| |
| |
| | Contracts | | Premiums | | Contracts | | Premiums | | Contracts | | Premiums | | Contracts | | Premiums | |
| Options outstanding at | | | | | | | | | | | | | | | | | | | | |
| beginning of period | — | | $ | — | | — | | $ | — | | — | | $ | — | | — | | $ | — | |
| Options written | 54,161 | | | 5,521,858 | | 31,232 | | | 2,805,544 | | 2,160 | | | 279,714 | | 9,783 | | | 639,301 | |
| Options closed | (4,360 | ) | | (436,506 | ) | (2,368 | ) | | (260,224 | ) | | | | | | (11 | ) | | (407 | ) |
| Options expired | (21,719 | ) | | (1,942,450 | ) | (25,319 | ) | | (2,176,341 | ) | (98 | ) | | (2,793 | ) | (6,169 | ) | | (429,638 | ) |
| Options exercised | — | | | — | | | | | | | | | | | | | | | | |
|
| |
|
| |
| |
|
| |
| |
|
| |
| |
|
| |
| Options outstanding at | | | | | | | | | | | | | | | | | | | | |
| end of period | 28,082 | | $ | 3,142,902 | | 3,545 | | $ | 368,979 | | 2,062 | | $ | 276,921 | | 3,603 | | $ | 209,256 | |
|
| |
|
| |
| |
|
| |
| |
|
| |
| |
|
| |
As of April 30, 2005, portfolio securities subject to covered call options written by Global Energy and Resources and Health Sciences were valued at $128,041,545 and $11,159,652, respectively.
As of April 30, 2005, Global Energy and Resources and Health Sciences had Treasury Bills at its custodian bank to cover the Trusts’commitments under open put option contracts written with market values of $49,140,294 and $3,495,413, respectively.
Note 4. Distributions to Shareholders The estimated tax character of distributions paid during the six months ended April 30, 2005 and the tax character of distributions paid during year ended October 31, 2004, were as follows:
| | Six Months ended April 30, 2005 |
|
|
|
| Distributions Paid From: | Ordinary | | Long-term | | Return of | | Total |
| | Income | | Gains | | Capital | | Distributions |
|
|
| |
|
| |
|
| |
|
|
| Dividend Achievers | $ | 21,346,415 | | $ | — | | $ | 3,186,826 | | $ | 24,533,241 |
| Global Energy and Resources | | 11,162,331 | | | — | | | — | | | 11,162,331 |
| Strategic Dividend Achievers | | 6,886,000 | | | — | | | 5,222,612 | | | 12,108,612 |
| S&P Quality Rankings | | 2,125,188 | | | — | | | 137,198 | | | 2,262,386 |
| | | | | | | | | |
| | Year ended October 31, 2004 |
|
|
|
| Distributions Paid From: | Ordinary | | Long-term | | Return of | | Total |
| | Income | | Gains | | Capital | | Distributions |
|
|
| |
|
| |
|
| |
|
|
| Dividend Achievers | $ | 20,827,751 | | $ | 70,335 | | $ | 15,682,716 | | $ | 36,580,802 |
| Strategic Dividend Achievers | | 4,556,086 | | | — | | | 7,552,527 | | | 12,108,613 |
| S&P Quality Rankings | | 1,024,567 | | | — | | | 106,626 | | | 1,131,193 |
| | | | |
| As of April 30, 2005, the estimated components of distributable earnings on a tax basis were as follows: | | | |
| | | | | | | | | | | | |
| | Undistributed | | Undistributed | | Unrealized | | | |
| Trust | Ordinary Income | | Long-term Gains | | Net Appreciation | | | |
|
|
| |
|
| |
|
| | | |
| Dividend Achievers | $ | — | | $ | 9,415,669 | | $ | 37,166,356 | | | |
| Global Energy and Resources | | 3,162,614 | | | — | | | 7,681,106 | | | |
| Health Sciences | | 1,173,860 | | | — | | | 3,660,534 | | | |
| Strategic Dividend Achievers | | — | | | 101,504 | | | 20,445,840 | | | |
| S&P Quality Rankings | | — | | | 111,665 | | | 9,829,214 | | | |
31
Note 5. Capital There are an unlimited number of $0.001 par value common shares of beneficial interest authorized for each Trust. At April 30, 2005, the shares outstanding and the shares owned by affiliates of the Advisor of each Trust were as follows:
| | | Common Shares | | Common Shares |
| Trust | | Outstanding | | Owned |
| |
|
| |
|
| Dividend Achievers | | 54,518,315 | | | 8,028 |
| Global Energy and Resources | | 29,766,217 | | | 4,817 |
| Health Sciences | | 7,504,817 | | | 4,817 |
| Strategic Dividend Achievers | | 26,908,028 | | | 8,028 |
| S&P Quality Rankings | | 6,033,028 | | | 8,028 |
Transactions in common shares of beneficial interest from commencement of investment operation through April 30, 2005, were as follows:
| | | Commencement | | | | | | | | | | | Net Increase |
| | | of Investment | | Initial Public | | Underwriters’ Exercising | | Reinvestment | | in Shares |
| Trust | | Operations | | Offering | | the Over-allotment Option | | of Distributions | | Outstanding |
| |
| |
|
| |
|
| |
|
| |
|
| Dividend Achievers | | December 23, 2003 | | 48,008,028 | | | 6,000,000 | | | 510,287 | | | 54,518,315 |
| Global Energy and | | | | | | | | | | | | | |
| Resources | | December 29, 2004 | | 26,604,817 | | | 3,161,400 | | | — | | | 29,766,217 |
| Health Sciences | | March 31, 2005 | | 7,504,817 | | | — | | | — | | | 7,504,817 |
| Strategic Dividend | | | | | | | | | | | | | |
| Achievers | | March 30, 2004 | | 25,508,028 | | | 1,400,000 | | | — | | | 26,908,028 |
| S&P Quality Rankings | | May 28, 2004 | | 5,858,028 | | | 175,000 | | | — | | | 6,033,028 |
Offering costs incurred in connection with the Trusts’ offering of common shares have been charged against the proceeds from the initial common share offering of the common shares for Dividend Achievers, Global Energy and Resources, Health Sciences, Strategic Dividend Achievers, and S&P Quality Rankings in the amounts of $921,289, $1,154,191, $312,750, $657,500 and $135,625, respectively.
Note 6. Distributions Subsequent to April 30, 2005, the Board declared distributions per common share for S&P Quality Rankings payable May 31, 2005, to shareholders of record on May 16, 2005, and for Dividend Achievers, Global Energy and Resources, Health Sciences and Strategic Dividend Achievers payable June 30, 2005, to shareholders of record on June 15, 2005. The per share distributions declared were as follows:
| | | Distribution Per |
| Trust | | Common Share |
| |
|
| Dividend Achievers | | $0.225000 |
| Global Energy and Resources | | 0.375000 |
| Health Sciences | | 0.384375 |
| Strategic Dividend Achievers | | 0.225000 |
| S&P Quality Rankings | | 0.187500 |
32
| DIVIDEND REINVESTMENT PLANS (unaudited) |
|
Pursuant to each Trust’s Dividend Reinvestment Plan (the “Plan”), common shareholders are automatically enrolled to have all distributions reinvested by The Bank of New York (the “Plan Agent”) in the respective Trust’s shares pursuant to the Plan. Shareholders who elect not to participate in the Plan will receive all distributions in cash paid by check and mailed directly to the shareholders of record (or if the shares are held in street or other nominee name, then to the nominee) by the Plan Agent.
The Plan Agent serves as agent for the shareholders in administering the Plan. After a Trust declares a distribution, the Plan Agent will acquire shares for the participants’ accounts, depending upon the circumstances described below, either (i) through receipt of unissued but authorized shares from the Trust (“newly issued shares”) or (ii) by purchase of outstanding shares on the open market, on the Trust’s primary exchange or elsewhere (“open-market purchases”). If, on the distribution payment date, the net asset value per share (“NAV”) is equal to or less than the market price per share plus estimated brokerage commissions (such condition being referred to herein as “market premium”), the Plan Agent will invest the distribution amount in newly issued shares on behalf of the participants. The number of newly issued shares to be credited to each participant’s account will be determined by dividing the dollar amount of the distribution by the NAV on the date the shares are issued. However, if the NAV is less than 95% of the market price on the payment date, the dollar amount of the distribution will be divided by 95% of the market price on the payment date. If, on the distribution payment date, the NAV is greater than the market value per share plus estimated brokerage commissions (such condition being referred to herein as “market discount”), the Plan Agent will invest the distribution amount in shares acquired on behalf of the participants in open-market purchases.
Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and processed by the Plan Administrator prior to the distribution record date; otherwise such termination or resumption will be effective with respect to any subsequently declared distribution.
The Plan Agent’s fees for the handling of the reinvestment of distributions will be paid by each Trust. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agent’s open market purchases in connection with the reinvestment of distributions. The automatic reinvestment of distributions will not relieve participants of any Federal income tax that may be payable on such distributions.
Each Trust reserves the right to amend or terminate the Plan. There is no direct service charge to participants in the Plan; however, each Trust reserves the right to amend the Plan to include a service charge payable by the participants. Participants that request a sale of shares through the Plan Agent are subject to a $2.50 sales fee and a $0.15 per share sold brokerage commission. All correspondence concerning the Plan should be directed to the Plan Agent at The Bank of New York, Dividend Reinvestment Department, P.O. Box 1958, Newark, New Jersey 07101-9774; or by calling 1-866-216-0242.
| ADDITIONAL INFORMATION (unaudited) |
|
During the period, there were no material changes in any Trust’s investment objective or policies that were not approved by the shareholders or any Trust’s charters or by-laws or in the principle risk factors associated with investment in the Trusts. There have been no changes in the persons who are primarily responsible that was not approved by the shareholders for the day-to-day management of the Trusts’ portfolio.
The Joint Annual Meeting of Shareholders was held on May 26, 2005, for shareholders of record as of February 28, 2005, to elect a certain number of Trustees for each of the following Trusts to three-year terms, unless otherwise indicated, expiring in 2008.
Elected the Class I Trustees as follows:
| | | Richard E. Cavanagh | | R. Glenn Hubbard | | James Clayburn La Force, Jr. |
| |
| |
| |
|
| | | Votes for | | Votes withheld | | Votes for | | Votes withheld | | Votes for | | Votes withheld |
| |
| |
| |
| |
| |
| |
|
| Global Energy and Resources | | 28,150,072 | | 349,275 | | 28,156,812 | | 342,535 | | 28,161,912 | | 337,435 |
| Strategic Dividend Achievers | | 26,088,766 | | 335,714 | | 26,085,459 | | 339,021 | | 26,097,558 | | 326,922 |
| S&P Quality Rankings | | 5,782,211 | | 91,507 | | 5,782,111 | | 91,607 | | 5,778,703 | | 95,015 |
Elected the Class II Trustee as follows:
| | Kathleen F. Feldstein |
|
|
| | Votes for | | Votes withheld |
|
| |
|
| Strategic Dividend Achievers1 | 26,072,962 | | 351,518 |
| S&P Quality Rankings1 | 5,783,697 | | 90,021 |
Elected the Class II Trustees as follows:
| | Frank J. Fabozzi | | Kathleen F. Feldstein | | Walter F. Mondale | | Ralph L. Schlosstein |
|
| |
| |
| |
|
| | Votes for | | Votes withheld | | Votes for | | Votes withheld | | Votes for | | Votes withheld | | Votes for | | Votes withheld |
|
| |
| |
| |
| |
| |
| |
| |
|
| Dividend Achievers | 52,318,395 | | 989,899 | | 52,282,768 | | 1,025,526 | | 52,100,008 | | 1,208,286 | | 52,307,830 | | 1,000,464 |
| 1 | Kathleen F. Feldstein will serve until the end of the 2006 term for the class of Trustee she was appointed. |
33
The following Trusts had an additional proposal (“Proposal #2A”) to amend it’s respective Declaration of Trust in order to change the maximum number of permitted Trustees allowed on its board to 11:
| | Votes For | | Votes Against | | Votes Withheld |
|
| |
| |
|
| Dividend Achievers | 51,089,595 | | 1,500,798 | | 717,901 |
| Strategic Dividend Achievers | 25,542,040 | | 543,037 | | 339,403 |
| S&P Quality Rankings | 5,570,049 | | 113,650 | | 190,019 |
The following Trust had an additional proposal (“Proposal #2B”) to amend it’s respective Declaration of Trust in order to change the maximum number of permitted Trustees allowed on its board from 15 to 11:
| | Votes For | | Votes Against | | Votes Withheld |
|
| |
| |
|
| Global Energy and Resources | 28,010,119 | | 243,415 | | 245,813 |
Quarterly performance and other information regarding the Trusts may be found on BlackRock’s website, which can be accessed at http://www.blackrock.com/funds/cefunds/index.html. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Trusts and does not, and is not intended, to incorporate BlackRock’s website into this report.
Certain of the officers of the Trusts listed on the inside back cover of this Report to Shareholders are also officers of the Advisor or Sub-Advisor. They serve in the following capacities for the Advisor or Sub-Advisor; Robert S. Kapito—Director and Vice Chairman of the Advisor and the Sub-Advisor, Henry Gabbay and Anne Ackerley—Managing Directors of the Advisor and the Sub-Advisor, Richard M. Shea and James Kong—Managing Directors of the Sub-Advisor, Vincent B. Tritto—Director of the Sub-Advisor, and Brian P. Kindelan—Director of the Advisor.
| NOTICE TO SHAREHOLDERS (unaudited) |
|
Before Global Energy and Resources and Health Sciences (collectively, the “Trusts”) initial public offering, the Trusts disclosed that they may engage in the purchase and sale of over-the-counter options. However, at that time, the Trusts did not intend to make transactions involving over-the-counter options a substantial portion of their option writing strategy. Currently, the Trusts’ portfolio managers believe there are attractive opportunities to make greater use of over-the-counter options. The Trusts now anticipate that they will engage in the purchase and sale of over-the-counter options with greater frequency.
Over-the-counter options differ from exchange-listed options in that they are two-party contracts, with exercise price, premium and other terms negotiated between buyer and seller, and generally do not have as much market liquidity as exchange-listed options. The counterparties to these transactions typically will be major international banks, broker-dealers and financial institutions. The Trust may be required to restrict the sale of securities being used to cover certain written over-the-counter options. The over-the-counter options written by the Trust will not be issued, guaranteed or cleared by the Options Clearing Corporation. In addition, the Trusts’ ability to terminate the over-the-counter options may be more limited than with exchange-traded options. Banks, broker-dealers or other financial institutions participating in such transaction may fail to settle a transaction in accordance with the terms of the option as written. In the event of default or insolvency of the counterparty, the Trusts may be unable to liquidate an over-the-counter option position.
34
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BlackRock Closed-End Funds
| Trustees | Custodian |
| | Ralph L. Schlosstein, Chairman
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
Kathleen F. Feldstein1
R. Glenn Hubbard2
Robert S. Kapito
James Clayburn La Force, Jr.
Walter F. Mondale | | The Bank of New York
100 Colonial Center Parkway
Suite 200
Lake Mary, FL 32746
|
| Transfer Agent |
| | The Bank of New York
P.O. Box 11258
Church Street Station
New York, NY 10286
(866) 216-0242 |
| Officers | | |
| | Robert S. Kapito, President Henry Gabbay, Treasurer
Bartholomew Battista, Chief Compliance Officer
Anne Ackerley, Vice President
Richard M. Shea, Vice President/Tax
James Kong, Assistant Treasurer
Vincent B. Tritto, Secretary
Brian P. Kindelan, Assistant Secretary | Independent Registered Public Accounting Firm |
| | | Deloitte & Touche LLP
200 Berkeley Street
Boston, MA 02116 |
| |
| Legal Counsel |
| Investment Advisor | | Skadden, Arps, Slate, Meagher & Flom LLP |
| | BlackRock Advisors, Inc.
100 Bellevue Parkway
Wilmington, DE 19809
(800) 227-7BFM | | Four Times Square
New York, NY 10036 |
| Legal Counsel – Independent Trustees |
| | | | Debevoise & Plimpton LLP |
| Sub-Advisor | | 919 Third Avenue |
| | BlackRock Financial Management, Inc.
40 East 52nd Street
New York, NY 10022 | | New York, NY 10022 |
| | | | This report is for shareholder information. This is not a prospectus intended for use in |
| Accounting Agent | | the purchase or sale of Trust shares. Statements and other information contained in this |
| | The Bank of New York | | report are as dated and are subject to change. |
| | 101 Barclay Street, 13 West | | |
| | New York, NY 10286 | | BlackRock Closed-End Funds |
| | | | c/o BlackRock Advisors, Inc.
100 Bellevue Parkway
Wilmington, DE 19809
(800) 227-7BFM |
|
| 1 | Appointed as a Trustee of Global Energy and Resources on January 19, 2005. Appointed as an Advisory Board Member of Dividend Achievers, Strategic Dividend Achievers and S&P Quality Rankings on January 19, 2005. Elected by shareholders as a Trustee of Dividend Achievers, Strategic Dividend Achievers and S&P Quality Rankings on May 26, 2005. For Global Energy and Resources Ms. Feldstein’s class of trustees did not stand for election at the May 26, 2005 shareholder meeting. |
| 2 | Appointed as a Trustee of Dividend Achievers, Global Energy and Resources, Strategic Dividend Achievers and S&P Quality Rankings on November 16, 2004. Elected by shareholders as a Trustee of Global Energy and Resources, Strategic Dividend Achievers and S&P Quality Rankings on May 26, 2005. For Dividend Achievers Mr. Hubbard’s class of trustees did not stand for election at the May 26, 2005 shareholder meeting. |
The Trusts will mail only one copy of shareholder documents, including annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact the Trusts at (866) 216-0242.
The Trusts have delegated to the Advisor the voting of proxies relating to their voting securities pursuant to the Advisor’s proxy voting policies and procedures. You may obtain a copy of these proxy voting policies and procedures, without charge, by calling (866)216-0242. These policies and procedures are also available on the website of the Securities and Exchange Commission (the “Commission”) at http://www.sec.gov.
Information on how proxies relating to the Trusts’ voting securities were voted (if any) by the Advisor during the most recent 12-month period ended June 30th is available, upon request, by calling (866) 216-0242 or on the website of the Commission at http://www.sec.gov.
The Trusts file their complete schedule of portfolio holdings for the first and third quarters of their respective fiscal years with the Commission on Form N-Q. Each Trust’s Form N-Q will be available on the Commission’s website at http://www.sec.gov. Each Trust’s Form N-Q, when available, may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information regarding the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Each Trust’s Form N-Q, when available, may also be obtained, upon request, by calling (866) 216-0242.
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This report is for shareholder information. This is not a prospectus intended
for use in the purchase or sale of Trust shares. Statements and other
information contained in this report are as dated and are subject to change. |  |
| | |
| CEF-SEMI-7 | |
Item 2. Code of Ethics.Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable for semi-annual reports.
Item 6. Schedule of Investments.
The Registrant’s Schedule of Investments is included as part of the Report to Shareholders filed under Item 1 of this Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable for semi-annual reports.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable for semi-annual reports.
Item 9. Purchases of Equity Securities by Closed-End Management Company and Affiliated Purchasers.
Not applicable because no such purchases were made during the period covered by this report.
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable because no applicable matters were voted on by shareholders during the period covered by this report.
Item 11. Controls and Procedures.
(a) The Registrant's principal executive officer and principal financial officer have evaluated the Registrant's disclosure controls and procedures as of a date within 90 days of this filing and have concluded that the Registrant’s disclosure controls and procedures are effective, as of such date, in ensuring that information required to be disclosed by the Registrant in this Form N-CSR was recorded, processed, summarized, and reported timely.
(b) The Registrant's principal executive officer and principal financial officer are aware of no changes in the Registrant's internal control over financial reporting that occurred during the Registrant's second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting.
Item 12. Exhibits.
(a) (1) Not applicable.
(a) (2) Separate certifications of Principal Executive and Financial Officers pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(a) (3) Not applicable.
(b) Certification of Principal Executive and Financial Officers pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
SIGNATURESPursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) BlackRock Global Energy and Resources Trust
By: /s/ Henry Gabbay
_____________________________________________________________________
Name: Henry Gabbay
Title: Treasurer
Date: July 1, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: /s/ Robert S. Kapito
_____________________________________________________________________
Name: Robert S. Kapito
Title: Principal Executive Officer
Date: July 1, 2005
By: /s/ Henry Gabbay
_____________________________________________________________________
Name: Henry Gabbay
Title: Principal Financial Officer
Date: July 1, 2005
