We have audited the accompanying statements of assets and liabilities of the Trusts, including the schedules of investments, as of October 31, 2010, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Trusts’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Trusts are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trusts’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2010, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Trusts as of October 31, 2010, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.
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Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements |
The Board of Trustees (each, a “Board,” and, collectively, the “Boards,” and the members of which are referred to as “Board Members”) of each of BlackRock Dividend AchieversTM Trust (“BDV”), BlackRock EcoSolutions Investment Trust (“BQR”), BlackRock Energy and Resources Trust (“BGR”), BlackRock Enhanced Dividend AchieversTM Trust (“BDJ”), BlackRock Global Opportunities Equity Trust (“BOE”), BlackRock Health Sciences Trust (“BME”), BlackRock International Growth and Income Trust (“BGY”), BlackRock Real Asset Equity Trust (“BCF”), BlackRock S&P Quality Rankings Global Equity Managed Trust (“BQY,”) and BlackRock Strategic Dividend AchieversTM Trust (“BDT” and together with BDV, BQR, BGR, BDJ, BOE, BME, BGY, BCF and BQY, each a “Fund,” and, collectively, the “Funds”) met on April 8, 2010 and May 13-14, 2010 to consider the approval of each Fund’s investment advisory agreement (collectively, the “Advisory Agreements”) with BlackRock Advisors, LLC (the “Manager”), each Fund’s investment advisor. The Boards of BDV, BDJ, BDT, BQR, BGR, BGY, BCF and BQY also considered the approval of the sub-advisory agreement (collectively, the “Sub-Advisory Agreements”) between the Manager and one of the following sub-advisors, as the case may be: BlackRock Financial Management, Inc.; State Street Research & Management Company; BlackRock Investment Management, LLC; BlackRock International Limited; and BlackRock Capital Management, Inc. (each, a “Sub-Advisor”), with respect to their respective Funds. The Manager and the Sub-Advisor are referred to herein as “BlackRock.” The Advisory Agreements and the Sub-Advisory Agreements are referred to herein as the “Agreements.”
Activities and Composition of the Board
The Board of each Fund consists of ten individuals, eight of whom are not “interested persons” of the Funds as defined in the Investment Company Act of 1940 (the “1940 Act”) (the “Independent Board Members”). The Board Members are responsible for the oversight of the operations of each Fund and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Board Members have retained independent legal counsel to assist them in connection with their duties. The Chairman of each Board is an Independent Board Member. Each Board has established five standing committees: an Audit Committee, a Governance and Nominating Committee, a Compliance Committee, a Performance Oversight Committee and an Executive Committee, each of which is composed of Independent Board Members (except for the Executive Committee, which also has one interested Board Member) and is chaired by an Independent Board Member. Each Board also has one ad hoc committee, the Joint Product Pricing Committee, which consists of Independent Board Members and the directors/trustees of the boards of certain other BlackRock-managed funds, who are not “interested persons” of their respective funds.
The Agreements
Pursuant to the 1940 Act, the Boards are required to consider the continuation of the Agreements on an annual basis. In connection with this process, the Boards assessed, among other things, the nature, scope and quality of the services provided to the Funds by the personnel of BlackRock and its affiliates, including investment management, administrative and shareholder services, oversight of fund accounting and custody, marketing services and assistance in meeting applicable legal and regulatory requirements.
From time to time throughout the year, the Boards, acting directly and through their committees, considered at each of their meetings factors that are relevant to their annual consideration of the renewal of the Agreements, including the services and support provided by BlackRock to the Funds and their shareholders. Among the matters the Boards considered were: (a) investment performance for one-, three- and five-year periods, as applicable, against peer funds, and applicable benchmarks, if any, as well as senior management’s and portfolio managers’ analysis of the reasons for any over performance or underperformance against a Fund’s peers and/or benchmark, as applicable; (b) fees, including advisory and other amounts paid to BlackRock and its affiliates by each Fund for services such as call center and fund accounting; (c) each Fund’s operating expenses; (d) the resources devoted to and compliance reports relating to each Fund’s investment objective, policies and restrictions; (e) each Fund’s compliance with its Code of Ethics and compliance policies and procedures; (f) the nature, cost and character of non-investment management services provided by BlackRock and its affiliates; (g) BlackRock’s and other service providers’ internal controls; (h) BlackRock’s implementation of the proxy voting policies approved by the Boards; (i) the use of brokerage commissions and execution quality of portfolio transactions; (j) BlackRock’s implementation of each Fund’s valuation and liquidity procedures; (k) an analysis of contractual and actual management fees for products with similar investment objectives across the open-end fund, closed-end fund and institutional account product channels, as applicable; and (l) periodic updates on BlackRock’s business.
Board Considerations in Approving the Agreements
The Approval Process: Prior to the April 8, 2010 meeting, the Boards requested and each received materials specifically relating to the Agreements. The Boards are engaged in a process with BlackRock to periodically review the nature and scope of the information provided to better assist their deliberations. The materials provided in connection with the April meeting included (a) information independently compiled and prepared by Lipper, Inc. (“Lipper”) on Fund fees and expenses, and the investment performance of each Fund as compared with a peer group of funds as determined by Lipper (collectively, “Peers”); (b) information on the profitability of the Agreements to BlackRock and a discussion of fall-out benefits to BlackRock and its affiliates and significant shareholders; (c) a general analysis provided by BlackRock concerning investment advisory fees charged to other clients, such as institutional clients and open-end funds, under similar investment mandates; (d) the impact of economies of scale; (e) a summary of aggregate amounts paid by each Fund to BlackRock and (f) if applicable, a comparison of management fees to similar BlackRock closed-end funds, as classified by Lipper.
At an in-person meeting held on April 8, 2010, the Boards reviewed materials relating to their consideration of the Agreements. As a result of the discussions that occurred during the April 8, 2010 meeting, the Boards presented BlackRock with questions and requests for additional information and BlackRock responded to these requests with additional written information in advance of the May 13-14, 2010 Board meeting.
At an in-person meeting held on May 13-14, 2010, each Board, including its Independent Board Members, unanimously approved the continuation of the Advisory Agreement between the Manager and its respective Fund for a one-year term ending June 30, 2011. The Board of each of BDV, BDJ, BDT, BQR, BGR, BGY, BCF and BQY, including its Independent Board Members, also unanimously approved the continuation of the Sub-Advisory Agreement
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| | ANNUAL REPORT | | OCTOBER 31, 2010 | 89 |
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Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued) |
between the Manager and the Sub-Advisor, with respect to its respective Fund, for a one-year term ending June 30, 2011. In approving the continuation of the Agreements, the Boards considered: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of each Fund and BlackRock; (c) the advisory fee and the cost of the services and profits to be realized by BlackRock and its affiliates from their relationship with each Fund; (d) economies of scale; and (e) other factors deemed relevant by the Board Members.
The Boards also considered other matters they deemed important to the approval process, such as services related to the valuation and pricing of each Fund’s portfolio holdings, direct and indirect benefits to BlackRock and its affiliates and significant shareholders from their relationship with each Fund and advice from independent legal counsel with respect to the review process and materials submitted for the Boards’ review. The Boards noted the willingness of BlackRock personnel to engage in open, candid discussions with the Boards. The Boards did not identify any particular information as controlling, and each Board Member may have attributed different weights to the various items considered.
A. Nature, Extent and Quality of the Services Provided by BlackRock
The Boards, including the Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of each Fund. Throughout the year, the Boards compared each Fund’s performance to the performance of a comparable group of closed-end funds, and the performance of a relevant benchmark, if any. The Boards met with BlackRock’s senior management personnel responsible for investment operations, including the senior investment officers. The Boards also reviewed the materials provided by each Fund’s portfolio management team discussing each Fund’s performance and each Fund’s investment objective, strategies and outlook.
The Boards considered, among other factors, the number, education and experience of BlackRock’s investment personnel generally and each Fund’s portfolio management team, investments by portfolio managers in the funds they manage, BlackRock’s portfolio trading capabilities, BlackRock’s use of technology, BlackRock’s commitment to compliance, BlackRock’s credit analysis capabilities, BlackRock’s risk analysis capabilities and BlackRock’s approach to training and retaining portfolio managers and other research, advisory and management personnel. The Boards also reviewed a general description of BlackRock’s compensation structure with respect to each Fund’s portfolio management team and BlackRock’s ability to attract and retain high-quality talent.
In addition to advisory services, the Boards considered the quality of the administrative and non-investment advisory services provided to each Fund. BlackRock and its affiliates and significant shareholders provide each Fund with certain administrative and other services (in addition to any such services provided to each Fund by third parties) and officers and other personnel as are necessary for the operations of each Fund. In addition to investment advisory services, BlackRock and its affiliates provide each Fund with other services, including (i) preparing disclosure documents, such as the prospectus and the statement of additional information in connection with the initial public offering and periodic shareholder reports; (ii) preparing communications with analysts to support secondary market trading of each Fund; (iii) assisting with daily accounting and pricing; (iv) preparing periodic filings with regulators and stock exchanges; (v) overseeing and coordinating the activities of other service providers; (vi) organizing Board meetings and preparing the materials for such Board meetings; (vii) providing legal and compliance support; and (viii) performing other administrative functions necessary for the operation of each Fund, such as tax reporting, fulfilling regulatory filing requirements, and call center services. The Boards reviewed the structure and duties of BlackRock’s fund administration, accounting, legal and compliance departments and considered BlackRock’s policies and procedures for assuring compliance with applicable laws and regulations.
B. The Investment Performance of the Funds and BlackRock
The Boards, including the Independent Board Members, also reviewed and considered the performance history of each Fund. In preparation for the April 8, 2010 meeting, the Boards were provided with reports, independently prepared by Lipper, which included a comprehensive analysis of each Fund’s performance. The Boards also reviewed a narrative and statistical analysis of the Lipper data that was prepared by BlackRock, which analyzed various factors that affect Lipper’s rankings. In connection with their reviews, the Boards received and reviewed information regarding the investment performance of each Fund as compared to a representative group of similar funds as determined by Lipper and to all funds in each Fund’s applicable Lipper category. The Boards were provided with a description of the methodology used by Lipper to select peer funds. The Boards regularly review the performance of each Fund throughout the year.
The Board of BGR noted that, in general, BGR performed better than its Peers in that BGR’s performance was at or above the median of its Lipper Performance Universe in each of the one-, three- and five-year periods reported.
The Boards of BOE, BME and BCF noted that, in general, BOE, BME and BCF performed better than their respective Peers in that each Fund’s performance was at or above the median of its Lipper Performance Universe in each of the one-year, three-year and since-inception periods reported.
The Boards of BQR and BGY noted that, in general, BQR and BGY performed better than their respective Peers in that each Fund’s performance was at or above the median of its Lipper Performance Universe in either the one-year or since-inception periods reported.
The Board of BQY noted that, in general, BQY performed better than its Peers in that BQY’s performance was at or above the median of its Lipper Performance Universe in two of the one-, three- and five-year periods reported. Additionally, working with the Board of BQY, BlackRock has restructured the investment process of BQY from an active quantitative, index-based investment approach to a fundamentally-based investment approach, thus allowing for greater portfolio management flexibility in picking individual equities and taking targeted sector and industry exposures.
The Boards of BDV and BDT noted that BDV and BDT performed below the median of their Lipper Peer Universe in each of the one-, three- and five-year periods reported. The Boards of BDV and BDT and BlackRock reviewed the reasons for each Fund’s underperformance during these periods compared with its Peers. The Boards of BDV and BDT were informed that, among other things, BDV and BDT are U.S. portfolios while many of their respective Peers appear to have invested globally. The non-U.S. markets outperformed the U.S. markets over the past five-years helping improve performance for those portfolios holding non-U.S. securities.
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90 | | ANNUAL REPORT | | OCTOBER 31, 2010 |
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Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued) |
The Board of BDJ noted that BDJ performed below the median of its Lipper Peer Universe in each of the one-year, three-year and since-inception periods reported. The Board of BDJ and BlackRock reviewed the reasons for BDJ’s underperformance during these periods compared with its Peers. The Board of BDJ was informed that, among other things, BDJ is a U.S. portfolio while many of its Peers appear to have invested globally, including in emerging markets. These non-U.S. markets outperformed the U.S. markets over the past three-years helping improve performance for those portfolios holding non-U.S. securities.
The Boards of BDV, BDJ and BDT and BlackRock discussed BlackRock’s strategy for improving each Fund’s performance and BlackRock’s commitment to providing the resources necessary to assist each Fund’s portfolio managers and to improve each Fund’s performance. Additionally, working with the Boards of BDV, BDJ and BDT, BlackRock has restructured the investment process of BDV, BDJ and BDT from an active quantitative, index-based investment approach to a fundamentally-based investment approach, thus allowing for greater portfolio management flexibility in picking individual equities and taking targeted sector and industry exposures.
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C. | Consideration of the Advisory Fees and the Cost of the Services and Profits to be Realized by BlackRock and its Affiliates from their Relationship with the Funds |
The Boards, including the Independent Board Members, reviewed each Fund’s contractual advisory fee rate compared with the other funds in its Lipper category. The Boards also compared each Fund’s total expenses, as well as actual management fees, to those of other funds in its Lipper category. The Boards considered the services provided and the fees charged by BlackRock to other types of clients with similar investment mandates, including separately managed institutional accounts.
The Boards received and reviewed statements relating to BlackRock’s financial condition and profitability with respect to the services it provided each Fund. The Boards were also provided with a profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to each Fund. The Boards reviewed BlackRock’s profitability with respect to each Fund and other funds the Boards currently oversee for the year ended December 31, 2009 compared to available aggregate profitability data provided for the year ended December 31, 2008. The Boards reviewed BlackRock’s profitability with respect to other fund complexes managed by the Manager and/or its affiliates. The Boards reviewed BlackRock’s assumptions and methodology of allocating expenses in the profitability analysis, noting the inherent limitations in allocating costs among various advisory products. The Boards recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, expense allocations and business mix, and the difficulty of comparing profitability as a result of those factors.
The Boards noted that, in general, individual fund or product line profitability of other advisors is not publicly available. Nevertheless, to the extent such information was available, the Boards considered BlackRock’s overall operating margin, in general, compared to the operating margin for leading investment management firms whose operations include advising closed-end funds, among other product types. That data indicates that operating margins for BlackRock with respect to its registered funds are generally consistent with margins earned by similarly situated publicly traded competitors. In addition, the Boards considered, among other things, certain third party data comparing BlackRock’s operating margin with that of other publicly-traded asset management firms. That third party data indicates that larger asset bases do not, in themselves, translate to higher profit margins.
In addition, the Boards considered the cost of the services provided to each Fund by BlackRock, and BlackRock’s and its affiliates’ profits relating to the management and distribution of each Fund and the other funds advised by BlackRock and its affiliates. As part of their analysis, the Boards reviewed BlackRock’s methodology in allocating its costs to the management of each Fund. The Boards also considered whether BlackRock has the financial resources necessary to attract and retain high quality investment management personnel to perform its obligations under the Agreements and to continue to provide the high quality of services that is expected by the Boards.
The Boards of BDV, BDJ, BOE, BME, BGY, BQY and BDT noted that each of their respective Funds’ contractual management fee rate was lower than or equal to the median contractual management fee rate paid by the Fund’s Peers, in each case, before taking into account any expense reimbursements or fee waivers.
The Boards of BQR and BCF noted that each of their respective Funds’ contractual management fee rate was above the median contractual management fee rate paid by the Fund’s Peers, in each case, before taking into account any expense reimbursements or fee waivers. The Boards of BQR and BCF also noted, however, that each Fund’s contractual management fee rate was reasonable relative to the median contractual management fee rate paid by the Fund’s peers.
The Board of BGR noted that BGR’s contractual management fee rate was above the median contractual management fee rate paid by BGR’s Peers, in each case, before taking into account any expense reimbursements or fee waivers. The Board also noted, however, that BGR’s actual management fee rate, after giving effect to any expense reimbursements or fee waivers by BlackRock, was lower than or equal to the median actual management fee rate paid by BGR’s Peers, after giving effect to any expense reimbursements or fee waivers.
D. Economies of Scale
The Boards, including the Independent Board Members, considered the extent to which economies of scale might be realized as the assets of each Fund increase. The Boards also considered the extent to which each Fund benefits from such economies and whether there should be changes in the advisory fee rate or structure in order to enable each Fund to participate in these economies of scale, for example through the use of breakpoints in the advisory fee based upon the asset level of each Fund.
The Boards noted that most closed-end fund complexes do not have fund level breakpoints because closed-end funds generally do not experience substantial growth after the initial public offering and each fund is managed independently consistent with its own investment objectives. The Boards noted that only one closed-end fund in the Fund Complex has breakpoints in its fee structure. Information provided by Lipper also revealed that only one closed-end fund complex with total closed-end fund nets assets exceeding $10 billion, as of December 31, 2009, used a complex level breakpoint structure.
E. Other Factors Deemed Relevant by the Board Members
The Boards, including the Independent Board Members, also took into account other ancillary or “fall-out” benefits that BlackRock or its affiliates
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| | ANNUAL REPORT | | OCTOBER 31, 2010 | 91 |
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Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (concluded) |
and significant shareholders may derive from their respective relationships with the Funds, both tangible and intangible, such as BlackRock’s ability to leverage its investment professionals who manage other portfolios, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates and significant shareholders as service providers to the Funds, including for administrative and distribution services. The Boards also considered BlackRock’s overall operations and its efforts to expand the scale of, and improve the quality of, its operations. The Boards also noted that BlackRock may use and benefit from third party research obtained by soft dollars generated by certain mutual fund transactions to assist in managing all or a number of its other client accounts. The Boards further noted that BlackRock completed the acquisition of a complex of exchange-traded funds (“ETFs”) on December 1, 2009, and that BlackRock’s funds may invest in such ETFs without any offset against the management fees payable by the funds to BlackRock.
In connection with its consideration of the Agreements, the Boards also received information regarding BlackRock’s brokerage and soft dollar practices. The Boards received reports from BlackRock which included information on brokerage commissions and trade execution practices throughout the year.
The Boards noted the competitive nature of the closed-end fund marketplace, and that shareholders are able to sell their respective Fund shares in the secondary market if they believe that the Fund’s fees and expenses are too high or if they are dissatisfied with the performance of the Fund.
Conclusion
Each Board, including its Independent Board Members, unanimously approved the continuation of the Advisory Agreement between the Manager and its respective Fund for a one-year term ending June 30, 2011. The Board of each of BDV, BDJ, BDT, BQR, BGR, BGY, BCF and BQY, including its Independent Board Members, also unanimously approved the continuation of the Sub-Advisory Agreement between the Manager and the Sub-Advisor, with respect to its respective Fund, for a one-year term ending June 30, 2011. As part of its approval, each Board considered the discussions of BlackRock’s fee structure, as it applies to its respective Fund, being conducted by the ad hoc Joint Product Pricing Committee. Based upon its evaluation of all of the aforementioned factors in their totality, each Board, including its Independent Board Members, was satisfied that the terms of the Agreements were fair and reasonable and in the best interest of its respective Fund and its shareholders. In arriving at a decision to approve the Agreements, none of the Boards identified any single factor or group of factors as all-important or controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were also assisted by the advice of independent legal counsel in making this determination. The contractual fee arrangements for each Fund reflect the results of several years of review by the Board Members and predecessor Board Members, and discussions between such Board Members (and predecessor Board Members) and BlackRock. Certain aspects of the arrangements may be the subject of more attention in some years than in others, and the Board Members’ conclusions may be based in part on their consideration of these arrangements in prior years.
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Automatic Dividend Reinvestment Plans |
Pursuant to each Trust’s Dividend Reinvestment Plan (the “Reinvestment Plan”), common shareholders are automatically enrolled, to have all distributions of dividends and capital gains reinvested by BNY Mellon Shareowner Services (the “Plan Agent”) in the respective Trust’s shares pursuant to the Reinvestment Plan. Shareholders who do not participate in the Reinvestment Plan will receive all distributions in cash paid by check and mailed directly to the shareholders of record (or if the shares are held in street or other nominee name, then to the nominee) by the Plan Agent, which serves as agent for the shareholders in administering the plan.
After a Trust declares a dividend or determines to make a capital gain distribution, the Plan Agent will acquire shares for the participants’ account, depending upon the following circumstances, either (i) through receipt of unissued but authorized shares from the Trust (“newly issued shares”) or (ii) by purchase of outstanding shares on the open market, on a Trust’s primary exchange or elsewhere (“open market purchases”). If, on the dividend payment date, the net asset value per share (“NAV”) is equal to or less than the market price per share plus estimated brokerage commissions (such condition being referred to herein as “market premium”), the Plan Agent will invest the dividend 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 dividend by the NAV on the date the shares are issued. However, if the NAV is less than 95% of the market price on the payment date, the dollar amount of the dividend will be divided by 95% of the market price on the payment date. If, on the dividend 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 dividend amount in shares acquired on behalf of the participants in open-market purchases. If the Plan Agent is unable to invest the full dividend amount in open market purchases, or if the market discount shifts to a market premium during the purchase period, the Plan Agent will invest any un-invested portion in newly issued shares.
Participation in the Reinvestment Plan is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and processed by the plan administrator prior to the dividend record date; otherwise such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution.
The Plan Agent’s fees for the handling of the reinvestment of dividends and distributions will be paid by each Trust. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agent’s open market purchases in connection with the reinvestment of dividends and distributions. The automatic reinvestment of dividends and distributions will not relieve participants of any federal income tax that may be payable on such dividends or distributions.
Each Trust reserves the right to amend or terminate the Reinvestment Plan. There is no direct service charge to participants in the Reinvestment Plan; however, each Trust reserves the right to amend the Reinvestment Plan to include a service charge payable by the participants. Participants that request a sale of shares through the Plan Agent are subject to a $0.02 per share sold brokerage commission. All correspondence concerning the Plan should be directed to the Plan Agent at BNY Mellon Shareowner Services, P.O. Box 358035, Pittsburgh, PA 15252-8035; or by calling 1-866-216-0242.
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92 | | ANNUAL REPORT | | OCTOBER 31, 2010 |
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Important Tax Information (unaudited) |
The following information is provided with respect to the distributions paid during the taxable period ended October 31, 2010.
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| | Payable Date | | Long-term
Capital Gains | | Non-Taxable
Return of
Capital | | Qualified
Dividend
Income for
Individuals† | | Dividends
Qualifying for
the Dividends
Received
Deduction for
Corporations† | | Short-Term
Capital Gain
Dividends for
Non-U.S.
Residents†† | | Foreign Source
Income | | Foreign Taxes
Paid* | |
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BDV | | | 12/31/09 | | — | | | — | | | 54.75 | % | | 55.04 | % | | — | | | — | | | — | | |
| | | 3/31/10 - 9/30/10 | | — | | | — | | | 44.22 | % | | 44.03 | % | | — | | | — | | | — | | |
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BDJ | | | 12/31/09 | | — | | | — | | | 33.20 | % | | 33.20 | % | | — | | | — | | | — | | |
| | | 3/31/10 - 9/30/10 | | — | | | 100 | % | | — | | | — | | | — | | | — | | | — | | |
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BDT | | | 12/31/09 | | — | | | — | | | 55.45 | % | | 55.94 | % | | — | | | — | | | — | | |
| | | 3/31/10 - 9/30/10 | | — | | | — | | | 51.57 | % | | 51.80 | % | | — | | | — | | | — | | |
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BQR | | | 12/31/09 | | — | | | — | | | 11.97 | % | | 5.15 | % | | — | | | — | | | — | | |
| | | 3/31/10 - 9/30/10 | | — | | | 100 | % | | — | | | — | | | — | | | — | | | — | | |
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BGR | | | 12/31/09 | | — | | | — | | | 16.82 | % | | 9.39 | % | | — | | | — | | | — | | |
| | | 3/31/10 - 9/30/10 | | — | | | — | | | 13.05 | % | | 6.36 | % | | 100 | % | | — | | | — | | |
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BOE | | | 11/30/09 | | — | | | — | | | 8.49 | % | | 5.17 | % | | — | | | — | | | — | | |
| | | 2/26/10 - 8/31/10 | | — | | | 34.50 | % | | 23.12 | % | | 10.66 | % | | 21.87 | % | | — | | | — | | |
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BME | | | 12/31/09 | | — | | | — | | | 12.50 | % | | 10.94 | % | | — | | | — | | | — | | |
| | | 3/31/10 - 9/30/10 | | 100 | % | | — | | | — | | | — | | | — | | | — | | | — | | |
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BGY | | | 12/31/09 | | — | | | — | | | 5.00 | % | | 0.21 | % | | — | | | 3.28 | % | | 0.69 | % | |
| | | 3/31/10 - 9/30/10 | | — | | | 100 | % | | — | | | — | | | — | | | — | | | — | | |
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BCF | | | 12/31/09 | | — | | | — | | | 7.72 | % | | 5.90 | % | | — | | | — | | | — | | |
| | | 3/31/10 - 9/30/10 | | — | | | 41.50 | % | | 56.49 | % | | 37.58 | % | | — | | | — | | | — | | |
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BQY | | | 11/30/09 | | — | | | — | | | 42.02 | % | | 23.95 | % | | — | | | — | | | — | | |
| | | 2/26/10 - 8/31/10 | | 48.36 | % | | — | | | 68.37 | % | | 29.88 | % | | 74.35 | % | | — | | | — | | |
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| | | | | — | | | — | | | — | | | — | | �� | — | | | — | | | — | | |
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† | The Trusts hereby designate the percentages indicated above or the maximum amount allowable by law. |
| |
†† | Represents the portion of the dividends eligible for exemption from U.S. withholding tax for nonresident aliens and foreign corporations. |
| |
* | The foreign taxes paid represent taxes incurred by the fund on interest received from foreign sources. Foreign taxes paid may be included in taxable income with an offsetting deduction from gross income or may be taken as a credit for taxes paid to foreign governments. You should consult your tax advisor regarding the appropriate treatment of foreign taxes paid. |
| | | | | |
| | ANNUAL REPORT | | OCTOBER 31, 2010 | 93 |
| | | | | | | | | | |
Name, Address and
Year of Birth | | Position(s) Held
with Trust | | Length of
Time Served as
a Trustee2 | | Principal Occupation(s)
During Past Five Years | | Number of BlackRock-
Advised Registered
Investment Companies
(“RICs”) Consisting of
Investment Portfolios
(“Portfolios”) Overseen | | Public Directorships |
Non-Interested Trustees1 |
|
Richard E. Cavanagh
55 East 52nd Street
New York, NY 10055
1946 | | Chairman of the
Board and Trustee | | Since 2003 | | Trustee, Aircraft Finance Trust from 1999 to 2009; Director, The Guardian Life Insurance Company of America since 1998; Trustee, Educational Testing Service from 1997 to 2009 and Chairman thereof from 2005 to 2009; Senior Advisor, The Fremont Group since 2008 and Director thereof since 1996; Adjunct Lecturer, Harvard University since 2007; President and Chief Executive Officer, The Conference Board, Inc. (global business research organization) from 1995 to 2007. | | 99 RICs consisting of
97 Portfolios | | Arch Chemical (chemical and allied products) |
| | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | |
Karen P. Robards
55 East 52nd Street
New York, NY 10055
1950 | | Vice Chair of the
Board and Chair of
the Audit Committee
and Trustee | | Since 2007 | | Partner of Robards & Company, LLC (financial advisory firm) since 1987; Co-founder and Director of the Cooke Center for Learning and Development (a not-for-profit organization) since 1987; Director of Care Investment Trust, Inc. (health care real estate investment trust) from 2007 to 2010; Director of Enable Medical Corp. from 1996 to 2005; Investment Banker at Morgan Stanley from 1976 to 1987. | | 99 RICs consisting of
97 Portfolios | | AtriCure, Inc. (medical devices). |
| | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | |
Frank J. Fabozzi
55 East 52nd Street
New York, NY 10055
1948 | | Trustee and Member
of the Audit
Committee | | Since 2003 | | Consultant/Editor of The Journal of Portfolio Management since 2006; Professor in the Practice of Finance and Becton Fellow, Yale University, School of Management, since 2006; Adjunct Professor of Finance and Becton Fellow, Yale University from 1994 to 2006. | | 99 RICs consisting of
97 Portfolios | | None |
| | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | |
Kathleen F. Feldstein
55 East 52nd Street
New York, NY 10055
1941 | | Trustee | | Since 2005 | | President of Economics Studies, Inc. (private economic consulting firm) since 1987; Chair, Board of Trustees, McLean Hospital from 2000 to 2008 and Trustee Emeritus thereof since 2008; Member of the Board of Partners Community Healthcare, Inc. from 2005 to 2009; Member of the Corporation of Partners HealthCare since 1995; Trustee, Museum of Fine Arts, Boston since 1992; Member of the Visiting Committee to the Harvard University Art Museum since 2003; Director, Catholic Charities of Boston since 2009. | | 99 RICs consisting of
97 Portfolios | | The McClatchy Company (publishing) BellSouth (telecommunications) Knight Ridder (publishing) |
| | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | |
James T. Flynn
55 East 52nd Street
New York, NY 10055
1939 | | Trustee and Member
of the Audit
Committee | | Since 2007 | | Chief Financial Officer of JPMorgan & Co., Inc. from 1990 to 1995. | | 99 RICs consisting of
97 Portfolios | | None |
| | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | |
Jerrold B. Harris
55 East 52nd Street
New York, NY 10055
1942 | | Trustee | | Since 2007 | | Trustee, Ursinus College since 2000; Director, Troemner LLC (scientific equipment) since 2000; Director of Delta Waterfowl Foundation since 2001; President and Chief Executive Officer, VWR Scientific Products Corporation from 1990 to 1999. | | 99 RICs consisting of
97 Portfolios | | BlackRock Kelso Capital Corp. (business development company) |
| | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | |
R. Glenn Hubbard
55 East 52nd Street
New York, NY 10055
1958 | | Trustee | | Since 2004 | | Dean, Columbia Business School since 2004; Columbia faculty member since 1988; Co-Director, Columbia Business School’s Entrepreneurship Program from 1997 to 2004; Chairman, U.S. Council of Economic Advisers under the President of the United States from 2001 to 2003; Chairman, Economic Policy Committee of the OECD from 2001 to 2003. | | 99 RICs consisting of
97 Portfolios | | ADP (data and information services), KKR Financial Corporation (finance), Metropolitan Life Insurance Company (insurance). |
| | | | | | | | | | |
| | | | | | | | | | | |
| | | | |
94 | | ANNUAL REPORT | | OCTOBER 31, 2010 |
|
|
|
Officers and Trustees (continued) |
| | | | | | | | | | |
Name, Address and
Year of Birth | | Position(s) Held
with Trust | | Length of
Time Served as
a Trustee2 | | Principal Occupation(s)
During Past Five Years | | Number of BlackRock-
Advised Registered
Investment Companies
(“RICs”) Consisting of
Investment Portfolios
(“Portfolios”) Overseen | | Public Directorships |
Non-Interested Trustees1 |
W. Carl Kester
55 East 52nd Street
New York, NY 10055
1951 | | Trustee and Member
of the Audit
Committee | | Since 2007 | | George Fisher Baker Jr. Professor of Business Administration, Harvard Business School; Deputy Dean for Academic Affairs, since 2006; Unit Head, Finance, Harvard Business School, from 2005 to 2006; Senior Associate Dean and Chairman of the MBA Program of Harvard Business School, from 1999 to 2005; Member of the faculty of Harvard Business School since 1981; Independent Consultant since 1978. | | 99 RICs consisting of
97 Portfolios | | None |
| | | | | | | | | | |
Interested Trustees3 |
Richard S. Davis
55 East 52nd Street
New York, NY 10055
1945 | | Trustee | | Since 2007 | | Managing Director, BlackRock, Inc. since 2005; Chief Executive Officer, State Street Research & Management Company from 2000 to 2005; Chairman of the Board of Trustees, State Street Research Mutual Funds from 2000 to 2005; Chairman, SSR Realty from 2000 to 2004. | | 169 RICs consisting of
290 Portfolios | | None |
| | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | |
Henry Gabbay
55 East 52nd Street
New York, NY 10055
1947 | | Trustee | | Since 2007 | | Consultant, BlackRock, Inc. from 2007 to 2008; Managing Director, BlackRock, Inc. from 1989 to 2007; Chief Administrative Officer, BlackRock Advisors, LLC from 1998 to 2007; President of BlackRock Funds and BlackRock Bond Allocation Target Shares from 2005 to 2007; Treasurer of certain closed-end funds in the BlackRock fund complex from 1989 to 2006. | | 169 RICs consisting of
290 Portfolios | | None |
|
| | | | | | | | | | | |
| |
1 | Trustees serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. |
2 | Date shown is the earliest date a person has served for the Fund covered by this annual report. Following the combination of Merrill Lynch Investment Managers, L.P. (“MLIM”) and BlackRock, Inc. (“BlackRock”) in September 2006, the various legacy MLIM and legacy BlackRock Fund boards were realigned and consolidated into three new Fund boards in 2007. As a result, although the chart shows certain trustees as joining the Fund’s board in 2007, each trustee first became a member of the board of other legacy MLIM or legacy BlackRock Funds as follows: Richard E. Cavanagh, 1994; Frank J. Fabozzi, 1988; Kathleen F. Feldstein, 2005; James T. Flynn, 1996; Jerrold B. Harris, 1999; R. Glenn Hubbard, 2004; W. Carl Kester, 1995 and Karen P. Robards, 1998. |
3 | Mr. Davis is an “interested person,” as defined in the Investment Company Act of 1940, of the Fund based on his position with BlackRock, Inc. and its affiliates. Mr. Gabbay is an “interested person” of the Fund based on his former positions with BlackRock, Inc. and its affiliates as well as his ownership of BlackRock, Inc. and The PNC Financial Services Group, Inc. securities. Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. |
| | | | | |
| | ANNUAL REPORT | | OCTOBER 31, 2010 | 95 |
|
|
|
Officers and Trustees (concluded) |
| | | | | | | |
Name, Address and
Year of Birth | | Position(s) Held
with the Trust | | Length of
Time Served | | Principal Occupation(s)
During Past Five Years | |
Trust Officers1 |
|
Anne Ackerley
55 East 52nd Street
New York, NY 10055
1962 | | President and Chief
Executive Officer | | Since 20092 | | Managing Director of BlackRock, Inc. since 2000; Vice President of the BlackRock-advised funds from 2007 to 2009; Chief Operating Officer of BlackRock’s Global Client Group (GCG) since 2009; Chief Operating Officer of BlackRock’s U.S. Retail Group from 2006 to 2009; Head of BlackRock’s Mutual Fund Group from 2000 to 2006. | |
| | | | | | | |
| | | | | | | | |
| | | | | | | |
Brendan Kyne
55 East 52nd Street
New York, NY 10055
1977 | | Vice President | | Since 2009 | | Managing Director of BlackRock, Inc. since 2010; Director of BlackRock, Inc. from 2008 to 2009; Head of Product Development and Management for BlackRock’s U.S. Retail Group since 2009, Co-head thereof from 2007 to 2009; Vice President of BlackRock, Inc. from 2005 to 2008. | |
| | | | | | | |
| | | | | | | | |
| | | | | | | |
Neal Andrews
55 East 52nd Street
New York, NY 10055
1966 | | Chief Financial
Officer | | Since 2007 | | Managing Director of BlackRock, Inc. since 2006; Senior Vice President and Line of Business Head of Fund Accounting and Administration at PNC Global Investment Servicing (U.S.) Inc. from 1992 to 2006. | |
| | | | | | | |
| | | | | | | | |
| | | | | | | |
Jay Fife
55 East 52nd Street
New York, NY 10055
1970 | | Treasurer | | Since 2007 | | Managing Director of BlackRock, Inc. since 2007; Director of BlackRock, Inc. in 2006; Assistant Treasurer of the Merrill Lynch Investment Managers, L.P. (“MLIM”) and Fund Asset Management, L.P. advised funds from 2005 to 2006; Director of MLIM Fund Services Group from 2001 to 2006. | |
| | | | | | | |
| | | | | | | | |
| | | | | | | |
Brian Kindelan
55 East 52nd Street
New York, NY 10055
1959 | | Chief Compliance
Officer | | Since 2007 | | Chief Compliance Officer of the BlackRock-advised funds since 2007; Managing Director and Senior Counsel of BlackRock, Inc. since 2005. | |
| | | | | | | |
| | | | | | | | |
| | | | | | | |
Howard Surloff
55 East 52nd Street
New York, NY 10055
1965 | | Secretary | | Since 2007 | | Managing Director and General Counsel of U.S. Funds at BlackRock, Inc. since 2006; General Counsel (U.S.) of Goldman Sachs Asset Management, L.P. from 1993 to 2006. | |
| | | | | | | | |
| |
1 | Officers of the Trusts serve at the pleasure of the Board. |
2 | Ms. Ackerley has been President and Chief Executive Officer since 2009 and was Vice President from 2007 to 2009. |
| | | | |
96 | | ANNUAL REPORT | | OCTOBER 31, 2010 |
The Annual Meeting of Shareholders was held on September 2, 2010 for shareholders of record on July 6, 2010, to elect trustee nominees for each Trust. There were no broker non-votes with regard to any non-routine matter for any of the Trusts.
Below are the results with respect to each nominee, who will continue to serve as Directors for each of the Trust’s:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Richard E. Cavanagh | | Kathleen F. Feldstein | | Henry Gabbay | | Jerrold B. Harris | |
| | | | | | | | | |
| | Votes For | | Votes
Withheld | | Abstain | | Votes For | | Votes
Withheld | | Abstain | | Votes For | | Votes
Withheld | | Abstain | | Votes For | | Votes
Withheld | | Abstain | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
BDV | | | 45,558,453 | | | 1,446,129 | | | 0 | | | 45,396,496 | | | 1,608,086 | | | 0 | | | 45,520,144 | | | 1,484,438 | | | 0 | | | 45,508,790 | | | 1,495,792 | | | 0 | |
BDJ | | | 59,714,987 | | | 1,502,697 | | | 0 | | | 59,623,846 | | | 1,593,838 | | | 0 | | | 59,686,685 | | | 1,530,999 | | | 0 | | | 59,672,638 | | | 1,545,046 | | | 0 | |
BDT | | | 19,921,328 | | | 980,301 | | | 0 | | | 19,691,423 | | | 1,210,206 | | | 0 | | | 19,918,258 | | | 983,371 | | | 0 | | | 19,907,610 | | | 994,019 | | | 0 | |
BQR | | | 11,450,684 | | | 214,259 | | | 0 | | | 11,399,730 | | | 265,213 | | | 0 | | | 11,431,177 | | | 233,766 | | | 0 | | | 11,433,952 | | | 230,991 | | | 0 | |
BGR | | | 26,959,228 | | | 481,945 | | | 0 | | | 26,891,008 | | | 550,165 | | | 0 | | | 26,939,136 | | | 502,037 | | | 0 | | | 26,952,953 | | | 488,220 | | | 0 | |
BOE | | | 58,113,477 | | | 1,392,523 | | | 0 | | | 58,007,498 | | | 1,498,502 | | | 0 | | | 58,096,903 | | | 1,409,097 | | | 0 | | | 58,075,967 | | | 1,430,033 | | | 0 | |
BME | | | 7,232,442 | | | 77,204 | | | 0 | | | 7,217,038 | | | 92,608 | | | 0 | | | 7,228,679 | | | 80,967 | | | 0 | | | 7,225,737 | | | 83,909 | | | 0 | |
BGY | | | 101,288,538 | | | 1,708,689 | | | 0 | | | 101,162,374 | | | 1,834,853 | | | 0 | | | 101,233,653 | | | 1,763,574 | | | 0 | | | 101,271,218 | | | 1,726,009 | | | 0 | |
BCF | | | 50,363,470 | | | 1,343,036 | | | 0 | | | 50,305,421 | | | 1,401,085 | | | 0 | | | 50,454,047 | | | 1,252,459 | | | 0 | | | 50,374,824 | | | 1,331,682 | | | 0 | |
BQY | | | 4,848,109 | | | 360,292 | | | 0 | | | 4,846,175 | | | 362,226 | | | 0 | | | 4,828,492 | | | 379,909 | | | 0 | | | 4,845,540 | | | 362,861 | | | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
For each Trust listed above, Trustees whose term of office continued after the Annual Meeting of Shareholders because they were not up for election are Richard S. Davis, Frank J. Fabozzi, James T. Flynn, R. Glenn Hubbard, W. Carl Kester and Karen P. Robards.
All Trusts, except BQY, are listed for trading on the New York Stock Exchange (“NYSE”) and have filed with the NYSE their annual chief executive officer certification regarding compliance with the NYSE’s listing standards. The Trusts filed with the SEC the certification of its chief executive officer and chief financial officer required by section 302 of the Sarbanes-Oxley Act.
|
| |
|
Investment Advisor |
BlackRock Advisors, LLC |
Wilmington, DE 19809 |
|
|
Sub-Advisor |
BlackRock Financial |
Management, Inc.1 |
New York, NY 10022 |
|
Sub-Advisor |
State Street Research & |
Management Co.2 |
One Financial Center |
Boston, MA 02111 |
|
Sub-Advisor |
BlackRock Capital |
Management, Inc3 |
Wilmington, DE 19809 |
|
Sub-Advisor |
BlackRock Investment |
Management, LLC4 |
Plainsboro, NJ 08536 |
|
Sub-Advisor |
BlackRock International Ltd.4 |
Edinburgh, Scotland |
United Kingdom EH38JB |
|
Custodian |
The Bank of New York Mellon |
New York, NY 10286 |
|
|
Transfer Agent |
BNY Mellon Shareowner |
Services |
Jersey City, NJ 07310 |
|
Accounting Agent |
The Bank of New York Mellon |
Brooklyn, NY 11217 |
|
|
Independent Registered |
Public Accounting Firm |
Deloitte & Touche LLP |
New York, NY 10281 |
|
Legal Counsel |
Skadden, Arps, Slate, |
Meagher & Flom LLP |
New York, NY 10036 |
|
Address of the Trusts |
100 Bellevue Parkway |
Wilmington, DE 19809 |
| |
1 | For BDV, BDJ, BDT and BQY. |
2 | For BGR. |
3 | For BGY and BCF. |
4 | For BQR and BCF. |
| | |
| BDV, BDJ, BDT and BQY are managed by a team of investment professionals. Effective February 16, 2010, Robert Shearer, Kathleen Anderson and Kyle G. McClements are the Trusts’ co-portfolio managers responsible for the day-to-day management of each Trust’s portfolio and the selection of their investments. Mr. McClements has been a member of the Trusts’ management team since 2005. | |
| | |
| Robert Shearer is Managing Director of BlackRock, Inc. since 2006. | |
| | |
| Kathleen Anderson is Managing Director of BlackRock, Inc. since 2008 and Director thereof 2006 to 2007. | |
| | |
| Kyle G. McClements is Managing Director of BlackRock, Inc. since 2010, Director thereof from 2006 to 2009 and Vice President thereof from 2005 to 2006. | |
| | |
| | | | | |
| | | | | |
| | ANNUAL REPORT | | OCTOBER 31, 2010 | 97 |
|
|
|
Additional Information (continued) |
These reported amounts and sources of distributions are estimates and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Trust’s investment experience during the year and may be subject to changes based on the tax regulations. Each Trust will provide a Form 1099-DIV each calendar year that will explain the character of these dividends and distributions for federal income tax purposes.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
October 31, 2010 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Total Cumulative Distributions
for the Fiscal Year | | % Breakdown of the Total Cumulative
Distributions for the Fiscal Year | |
| | | | | |
| | Net
Investment
Income | | Net Realized
Capital Gains
(Short-Term) | | Net Realized
Capital Gains
(Long-Term) | | Return
of
Capital | | Total Per
Common Share | | Net
Investment
Income | | Net Realized
Capital Gains
(Short-Term) | | Net Realized
Capital Gains
(Long-Term) | | Return
of
Capital | | Total Per
Common Share | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
BDV | | $ | 0.218508 | | $ | — | | $ | — | | $ | 0.431492 | | $ | 0.650000 | | | 34 | % | | 0 | % | | 0 | % | | 66 | % | | 100 | % |
BDJ | | $ | 0.161502 | | $ | — | | $ | — | | $ | 0.818498 | | $ | 0.980000 | | | 16 | % | | 0 | % | | 0 | % | | 84 | % | | 100 | % |
BDT | | $ | 0.267171 | | $ | — | | $ | — | | $ | 0.382829 | | $ | 0.650000 | | | 41 | % | | 0 | % | | 0 | % | | 59 | % | | 100 | % |
BQR | | $ | 0.053484 | | $ | — | | $ | — | | $ | 1.146516 | | $ | 1.200000 | | | 4 | % | | 0 | % | | 0 | % | | 96 | % | | 100 | % |
BGR | | $ | 0.261529 | | $ | 1.358471 | | $ | — | | $ | — | | $ | 1.620000 | | | 16 | % | | 84 | % | | 0 | % | | 0 | % | | 100 | % |
BOE | | $ | 0.169689 | | $ | — | | $ | — | | $ | 2.105311 | | $ | 2.275000 | | | 7 | % | | 0 | % | | 0 | % | | 93 | % | | 100 | % |
BME | | $ | 0.044573 | | $ | 1.492927 | | $ | — | | $ | — | | $ | 1.537500 | | | 3 | % | | 97 | % | | 0 | % | | 0 | % | | 100 | % |
BGY | | $ | 0.136640 | | $ | — | | $ | — | | $ | 1.453560 | | $ | 1.590200 | | | 9 | % | | 0 | % | | 0 | % | | 91 | % | | 100 | % |
BCF | | $ | 0.172713 | | $ | — | | $ | — | | $ | 0.914487 | | $ | 1.087200 | | | 16 | % | | 0 | % | | 0 | % | | 84 | % | | 100 | % |
BQY | | $ | 0.282483 | | $ | 0.117479 | | $ | 0.059683 | | $ | — | | $ | 0.459645 | | | 61 | % | | 26 | % | | 13 | % | | 0 | % | | 100 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Each Trust, except BGR, BME and BQY, estimates that it has 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.’
The Trusts do not make available copies of their Statements of Additional Information because the Trusts’ shares are not continuously offered, which means that the Statement of Additional Information of each Trust has not been updated after completion of the respective Trust’s offerings and the information contained in each Trust’s Statement of Additional Information may have become outdated.
BDV’s, BDJ’s, BDT’s and BQY’s Boards each approved a change to the investment strategy employed by each Trust. The Trusts have previously utilized a quantitative, index-based investment style in selecting equity investments. Pursuant to the new investment strategy, effective February 16, 2010, the Trusts now utilize an investment style based on a fundamental analysis of individual securities that is not index-based. As a result, under the Trusts’ new investment strategy, the Trusts are particularly dependent on the analytical abilities of BlackRock. There have been no changes to the Trusts’ investment objectives, guidelines and/or policies apart from the method used to implement their investment strategies. Each Trust will continue to emphasize dividend-paying and/or quality equities, as described in its prospectus, and will continue to utilize an option-writing strategy to enhance current gains.
Other than the revisions to BDV’s, BDJ’s, BDT’s and BQY’s investment strategy discussed above, during the period there were no material changes in the Trusts’ investment objectives or policies or to the Trusts’ charters or bylaws that were not approved by the shareholders or in the principal risk factors associated with investment in the Trusts. Other than as disclosed on page 97, there have been no changes in the persons who are primarily responsible for the day-to-day management of the Trusts’ portfolios.
Electronic Delivery
Electronic copies of most financial reports are available on the Trusts’ websites or shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual reports and prospectuses by enrolling in the Trusts’ electronic delivery program.
Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages:
Please contact your financial advisor. Please note that not all investment advisors, banks or brokerages may offer this service.
Householding
The Trusts will mail only one copy of shareholder documents, including annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and it 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 other-
| | | | |
98 | | ANNUAL REPORT | | OCTOBER 31, 2010 |
|
|
|
Additional Information (concluded) |
|
General Information (concluded) |
wise. 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 (800) 441-7762.
Quarterly performance, semi-annual and annual reports and other information regarding each Trust may be found on BlackRock’s website, which can be accessed at http://www.blackrock.com. This reference to BlackRock’s website is intended to allow investors public access to information regarding each Trust and does not, and is not intended to, incorporate BlackRock’s website into this report.
Availability of Proxy Voting Policies and Procedures
A description of the policies and procedures that the Trusts use to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling toll-free (800) 441-7762; (2) at http://www.blackrock.com; and (3) on the Securities and Exchange Commission’s (the “SEC”) website at http://www.sec.gov.
Availability of Proxy Voting Record
Information about how each Trust voted proxies relating to securities held in each Trust’s portfolio during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com or by calling (800) 441-7762 and (2) on the SEC’s website at http://www.sec.gov.
Availability of Quarterly Schedule of Investments
Each Trust files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each Trust’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. Each Trust’s Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762.
Availability of Trust Updates
BlackRock will update performance data for the Trusts on a monthly basis on its website in the “Closed-end Funds” section of http://www.blackrock.com. Investors and others are advised to periodically check the website for updated performance information and the release of other material information about the Funds.
|
BlackRock Privacy Principles |
BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their nonpublic personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.
If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.
BlackRock obtains or verifies personal nonpublic information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our websites.
BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.
We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to nonpublic personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the nonpublic personal information of its Clients, including procedures relating to the proper storage and disposal of such information.
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| | ANNUAL REPORT | | OCTOBER 31, 2010 | 99 |
This report is transmitted to shareholders only. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. Statements and other information herein are as dated and are subject to change.
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Item 2 – | Code of Ethics – The registrant (or the “Fund”) has adopted a code of ethics, as of the end of the period covered by this report, applicable to the registrant’s principal executive officer, principal financial officer and principal accounting officer, or persons performing similar functions. During the period covered by this report, there have been no amendments to or waivers granted under the code of ethics. A copy of the code of ethics is available without charge at www.blackrock.com. |
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Item 3 – | Audit Committee Financial Expert – The registrant’s board of directors or trustees, as applicable (the “board of directors”), has determined that (i) the registrant has the following audit committee financial experts serving on its audit committee and (ii) each audit committee financial expert is independent: |
| Kent Dixon (retired effective December 31, 2009) |
| Frank J. Fabozzi |
| James T. Flynn |
| W. Carl Kester |
| Karen P. Robards |
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| The registrant’s board of directors has determined that W. Carl Kester and Karen P. Robards qualify as financial experts pursuant to Item 3(c)(4) of Form N-CSR. |
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| Prof. Kester has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Prof. Kester has been involved in providing valuation and other financial consulting services to corporate clients since 1978. Prof. Kester’s financial consulting services present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant’s financial statements. |
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| Ms. Robards has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Ms. Robards has been President of Robards & Company, a financial advisory firm, since 1987. Ms. Robards was formerly an investment banker for more than 10 years where she was responsible for evaluating and assessing the performance of companies based on their financial results. Ms. Robards has over 30 years of experience analyzing financial statements. She also is a member of the audit committee of one publicly held company and a non-profit organization. |
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| Under applicable securities laws, a person determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. The designation or identification as an audit committee financial expert does not affect the duties, obligations, or liability of any other member of the audit committee or board of directors. |
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Item 4 – | Principal Accountant Fees and Services |
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| | (a) Audit Fees | | (b) Audit-Related Fees1 | | (c) Tax Fees2 | | (d) All Other Fees3 | |
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| | Current | | Previous | | Current | | Previous | | Current | | Previous | | Current | | Previous | |
| | Fiscal Year | | Fiscal Year | | Fiscal Year | | Fiscal Year | | Fiscal Year | | Fiscal Year | | Fiscal Year | | Fiscal Year | |
Entity Name | | End | | End | | End | | End | | End | | End | | End | | End | |
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BlackRock Global
Opportunities Equity
Trust | | $46,400 | | $46,400 | | $0 | | $0 | | $6,100 | | $6,326 | | $0 | | $1,028 | |
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1 The nature of the services include assurance and related services reasonably related to the performance of the audit of financial statements not included in Audit Fees.
2 The nature of the services include tax compliance, tax advice and tax planning.
3 The nature of the services include a review of compliance procedures and attestation thereto.
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| (e)(1) Audit Committee Pre-Approval Policies and Procedures: |
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| The registrant’s audit committee (the “Committee”) has adopted policies and procedures with regard to the pre-approval of services. Audit, audit-related and tax compliance services provided to the registrant on an annual basis require specific pre-approval by the Committee. The Committee also must approve other non-audit services provided to the registrant and those non-audit services provided to the registrant’s affiliated service providers that relate directly to the operations and the financial reporting of the registrant. Certain of these non-audit services that the Committee believes are a) consistent with the SEC’s auditor independence rules and b) routine and recurring services that will not impair the independence of the independent accountants may be approved by the Committee without consideration on a specific case-by-case basis (“general pre-approval”). The term of any general pre-approval is 12 months from the date of the pre-approval, unless the Committee provides for a different period. Tax or other non-audit services provided to the registrant which have a direct impact on the operation or financial reporting of the registrant will only be deemed pre-approved provided that any individual project does not exceed $10,000 attributable to the registrant or $50,000 per project. For this purpose, multiple projects will be aggregated to determine if they exceed the previously mentioned cost levels. |
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| Any proposed services exceeding the pre-approved cost levels will require specific pre-approval by the Committee, as will any other services not subject to general pre-approval (e.g., unanticipated but permissible services). The Committee is informed of each service approved subject to general pre-approval at the next regularly scheduled in-person board meeting. At this meeting, an analysis of such services is presented to the Committee for ratification. The Committee may delegate to the Committee Chairman the authority to approve the provision of and fees for any specific engagement of permitted non-audit services, including services exceeding pre-approved cost levels. |
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| (e)(2) None of the services described in each of Items 4(b) through (d) were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. |
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| (f) Not Applicable |
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| (g) Affiliates’ Aggregate Non-Audit Fees: |
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| Current Fiscal Year | Previous Fiscal Year |
Entity Name | End | End |
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BlackRock Global Opportunities Equity Trust | $16,877 | $409,854 |
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| (h) The registrant’s audit committee has considered and determined that the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any non-affiliated sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by the registrant’s investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence. |
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| Regulation S-X Rule 2-01(c)(7)(ii) – $10,777, 0% |
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Item 5 – | Audit Committee of Listed Registrants |
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| (a) The following individuals are members of the registrant’s separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(58)(A)): |
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| Kent Dixon (retired effective December 31, 2009) |
| Frank J. Fabozzi |
| James T. Flynn |
| W. Carl Kester |
| Karen P. Robards |
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| (b) Not Applicable |
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Item 6 – | Investments |
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| (a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this Form. |
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| (b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing. |
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Item 7 – | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – The board of directors has delegated the voting of proxies for the Fund securities to the Fund’s investment adviser (“Investment Adviser”) pursuant to the Investment Adviser’s proxy voting guidelines. Under these guidelines, the Investment Adviser will vote proxies related to Fund securities in the best interests of the Fund and its stockholders. From time to time, a vote may present a conflict between the interests of the Fund’s stockholders, on the one hand, and those of the Investment Adviser, or any affiliated person of the Fund or the Investment Adviser, on the other. In such event, provided that the Investment Adviser’s Equity Investment Policy Oversight Committee, or a sub-committee thereof (the “Oversight Committee”) is aware of the real or potential conflict or material non-routine matter and if the Oversight Committee does not reasonably believe it is able to follow its general voting guidelines (or if the particular proxy matter is not addressed in the guidelines) and vote impartially, the Oversight Committee may retain an independent fiduciary to advise the Oversight Committee on how to vote or to cast votes on behalf of the Investment Adviser’s clients. If the Investment Adviser determines not to retain an independent fiduciary, or does not desire to follow the advice of such independent fiduciary, the Oversight Committee shall |
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| determine how to vote the proxy after consulting with the Investment Adviser’s Portfolio Management Group and/or the Investment Adviser’s Legal and Compliance Department and concluding that the vote cast is in its client’s best interest notwithstanding the conflict. A copy of the Fund’s Proxy Voting Policy and Procedures are attached as Exhibit 99.PROXYPOL. Information on how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, (i) at www.blackrock.com and (ii) on the SEC’s website at http://www.sec.gov. |
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Item 8 – | Portfolio Managers of Closed-End Management Investment Companies – as of October 31, 2010. |
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| (a)(1) The registrant (or “Fund”) is managed by a team of investment professionals comprised of Thomas P. Callan, CFA, Managing Director at BlackRock, Inc., Jean M. Rosenbaum, CFA, Managing Director at BlackRock, Inc., Michael D. Carey, CFA, Managing Director at BlackRock, Inc. and Kyle G. McClements, CFA, Managing Director at BlackRock, Inc. Messrs. Callan, Carey and McClements and Ms. Rosenbaum are the Fund’s portfolio managers responsible for the day-to-day management of the Fund’s portfolio and the selection of its investments. Messrs. Callan, Carey and McClements and Ms. Rosenbaum have been members of the Fund’s portfolio management team since 2005. |
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| Portfolio Manager | Biography |
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| Thomas P. Callan, CFA | Managing Director of BlackRock, Inc. since 1998; Head of BlackRock’s Global Opportunities equity team; Member of BlackRock’s Leadership Committee. |
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| Jean M. Rosenbaum, CFA | Managing Director of BlackRock, Inc. since 2006; Director of BlackRock, Inc. from 2002 to 2005. |
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| Michael D. Carey, CFA | Managing Director of BlackRock, Inc. since 2007; Director of BlackRock, Inc. from 2004 to 2006. |
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| Kyle G. McClements, CFA | Managing Director of BlackRock since 2009; Director of BlackRock, Inc. since 2006; Vice President of BlackRock, Inc. in 2005; Vice President of State Street Research & Management from 2004 to 2005. |
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| (a)(2) As of October 31, 2010: |
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| | (ii) Number of Other Accounts Managed | | (iii) Number of Other Accounts and | |
| | and Assets by Account Type | | Assets for Which Advisory Fee is | |
| | | | Performance-Based | |
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| | Other | | Other Pooled | | | | Other | | Other Pooled | | | |
(i) Name of | | Registered | | Investment | | Other | | Registered | | Investment | | Other | |
Portfolio Manager | | Investment | | Vehicles | | Accounts | | Investment | | Vehicles | | Accounts | |
| | Companies | | | | | | Companies | | | | | |
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Thomas P. Callan | | 12 | | 11 | | 11 | | 0 | | 1 | | 3 | |
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| | $10.02 Billion | | $1.85 Billion | | $1.79 Billion | | $0 | | $577.7 Million | | $1.05 Billion | |
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Jean M. Rosenbaum | | 4 | | 3 | | 2 | | 0 | | 0 | | 0 | |
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| | $5.30 Billion | | $596.1 Million | | $321.6 Million | | $0 | | $0 | | $0 | |
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Michael D. Carey | | 7 | | 2 | | 7 | | 0 | | 0 | | 1 | |
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| | $4.39 Billion | | $182.6 Million | | $1.34 Billion | | $0 | | $0 | | $925.1 Million | |
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Kyle G. McClements | | 9 | | 3 | | 1 | | 0 | | 0 | | 0 | |
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| | $4.47 Billion | | $159.3 Million | | $12.23 Million | | $0 | | $0 | | $0 | |
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| (iv) Potential Material Conflicts of Interest |
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| BlackRock, Inc. (individually and together with its affiliates, “BlackRock”) has built a professional working environment, firm-wide compliance culture and compliance procedures and systems designed to protect against potential incentives that may favor one account over another. BlackRock has adopted policies and procedures that address the allocation of investment opportunities, execution of portfolio transactions, personal trading by employees and other potential conflicts of interest that are designed to ensure that all client accounts are treated equitably over time. Nevertheless, BlackRock furnishes investment management and advisory services to numerous clients in addition to the Fund, and BlackRock may, consistent with applicable law, make investment recommendations to other clients or accounts (including accounts which are hedge funds or have performance or higher fees paid to BlackRock, or in which portfolio managers have a personal interest in the receipt of such fees), which may be the same as or different from those made to the Fund. In addition, BlackRock, its affiliates and significant shareholders and any officer, director, stockholder or employee may or may not have an interest in the securities whose purchase and sale BlackRock recommends to the Fund. BlackRock, or any of its affiliates or significant shareholders, or any officer, director, stockholder, employee or any member of their families may take different actions than those recommended to the Fund by BlackRock with respect to the same securities. Moreover, BlackRock may refrain from rendering any advice or services concerning securities of companies of which any of BlackRock’s (or its affiliates’ or significant shareholders’) officers, directors or employees are directors or officers, or companies as to which BlackRock or any of its affiliates or significant shareholders or the officers, directors and employees of any of them has any substantial economic interest or possesses material non-public information. Each portfolio manager also may manage accounts whose investment strategies may at times be opposed to the strategy utilized for a fund. In this connection, it should be noted that Messrs. Callan and Carey currently manage certain accounts that are subject to performance fees. In addition, Mr. Callan assist in managing certain hedge funds and may be entitled to receive a portion of any incentive fees earned on such funds and a portion of such incentive fees may be voluntarily or involuntarily deferred. Additional portfolio managers may in the future manage other such accounts or funds and may be entitled to receive incentive fees. |
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| As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client fairly. When BlackRock purchases or sells securities for more than one account, the trades must be allocated in a manner consistent with its fiduciary duties. BlackRock attempts to allocate investments in a fair and equitable manner among client accounts, with no account receiving preferential treatment. To this end, BlackRock has adopted a policy that is intended to ensure that investment opportunities are allocated fairly and equitably among client accounts over time. This policy also seeks to achieve reasonable efficiency in client transactions and provide BlackRock with sufficient flexibility to allocate investments in a manner that is consistent with the particular investment discipline and client base. |
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| (a)(3) As of October 31, 2010: |
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| Portfolio Manager Compensation Overview |
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| BlackRock’s financial arrangements with its portfolio managers, its competitive compensation and its career path emphasis at all levels reflect the value senior management places on key resources. Compensation may include a variety of components and may vary from year to year based on a |
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| number of factors. The principal components of compensation include a base salary, a performance and, for certain portfolio managers, revenue-based discretionary bonus, participation in various benefits programs and one or more of the incentive compensation programs established by BlackRock such as its Long-Term Retention and Incentive Plan. |
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| Base compensation. Generally, portfolio managers receive base compensation based on their seniority and/or their position with the firm. Senior portfolio managers who perform additional management functions within the portfolio management group or within BlackRock may receive additional compensation for serving in these other capacities. |
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| Discretionary Incentive Compensation for Messrs. Callan and Carey and Ms. Rosenbaum |
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| Discretionary incentive compensation is based on a formulaic compensation program. BlackRock’s formulaic portfolio manager compensation program includes: pre-tax investment performance relative to appropriate competitors or benchmarks over 1-, 3- and 5-year performance periods and a team revenue component. If a portfolio manager’s tenure is less than five years, performance periods will reflect time in position. In most cases, including for the portfolio managers of the Fund, these benchmarks are the same as the benchmark or benchmarks against which the performance of the Fund or other accounts managed by the portfolio managers are measured. BlackRock’s Chief Investment Officers determine the benchmarks against which the performance of funds and other accounts managed by each portfolio manager is compared and the period of time over which performance is evaluated. With respect to Messrs. Callan and Carey and Ms. Rosenbaum, such benchmarks include a combination of Lipper Global Multi-Cap Core, Global Multi-Cap Growth, Health/Biotechnology, Global Health/Biotechnology, International Multi-Cap Core, International Mutli-Cap Growth, Mid-Cap Core and Mid-Cap Growth Funds classifications. |
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| Portfolio managers who meet relative investment performance and financial management objectives during a specified performance time period are eligible to receive an additional bonus which may or may not be a large part of their overall compensation. A smaller element of portfolio manager discretionary compensation may include consideration of: financial results, expense control, profit margins, strategic planning and implementation, quality of client service, market share, corporate reputation, capital allocation, compliance and risk control, leadership, workforce diversity, supervision, technology and innovation. All factors are considered collectively by BlackRock management. |
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| Discretionary Incentive Compensation for Mr. McClements |
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| Discretionary incentive compensation is a function of several components: the performance of BlackRock, Inc., the performance of the portfolio manager’s group within BlackRock, the investment performance, including risk-adjusted returns, of the firm’s assets under management or supervision by that portfolio manager relative to predetermined benchmarks, and the individual’s seniority, role within the portfolio management team, teamwork and contribution to the overall performance of these portfolios and BlackRock. In most cases, including for the portfolio managers of the Fund, these benchmarks are the same as the benchmark or benchmarks against which the performance of the Fund or other accounts managed by the portfolio managers are measured. BlackRock’s Chief Investment Officers determine the benchmarks against which the performance of funds and other accounts managed by each portfolio manager is compared and the period of time over which performance is evaluated. With respect to Mr. McClements, such benchmarks include a combination of market-based indices (e.g., Mergent Dividend Achievers Index, The S&P/Citigroup |
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| Global Broad Market Index, Lipper Health/Biotechnology Funds Index, The Russell 3000 Healthcare Index, NYSE Arca Tech 100 Index, MSCI World Index) and yield component. |
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| BlackRock’s Chief Investment Officers make a subjective determination with respect to the portfolio manager’s compensation based on the performance of the funds and other accounts managed by each portfolio manager relative to the various benchmarks noted above. Performance is measured on a pre-tax basis over various time periods including 1, 3 and 5-year periods, as applicable. |
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| Distribution of Discretionary Incentive Compensation |
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| Discretionary incentive compensation is distributed to portfolio managers in a combination of cash and BlackRock, Inc. restricted stock units which vest ratably over a number of years. The BlackRock, Inc. restricted stock units, if properly vested, will be settled in BlackRock, Inc. common stock. Typically, the cash bonus, when combined with base salary, represents more than 60% of total compensation for the portfolio managers. Paying a portion of annual bonuses in stock puts compensation earned by a portfolio manager for a given year “at risk” based on BlackRock’s ability to sustain and improve its performance over future periods. |
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| Long-Term Retention and Incentive Plan (“LTIP”) — From time to time long-term incentive equity awards are granted to certain key employees to aid in retention, align their interests with long-term shareholder interests and motivate performance. Equity awards are generally granted in the form of BlackRock, Inc. restricted stock units that, once vested, settle in BlackRock, Inc. common stock. Messrs. Carey and McClements and Ms. Rosenbaum have each received awards under the LTIP. |
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| Deferred Compensation Program — A portion of the compensation paid to eligible BlackRock employees may be voluntarily deferred into an account that tracks the performance of certain of the firm’s investment products. Each participant in the deferred compensation program is permitted to allocate his deferred amounts among the various investment options. Messrs. Callan, Carey and McClements and Ms. Rosenbaum have each participated in the deferred compensation program. |
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| Other compensation benefits. In addition to base compensation and discretionary incentive compensation, portfolio managers may be eligible to receive or participate in one or more of the following: |
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| Incentive Savings Plans — BlackRock, Inc. has created a variety of incentive savings plans in which BlackRock employees are eligible to participate, including a 401(k) plan, the BlackRock Retirement Savings Plan (RSP), and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution components of the RSP include a company match equal to 50% of the first 6% of eligible pay contributed to the plan capped at $4,000 per year, and a company retirement contribution equal to 3-5% of eligible compensation. The RSP offers a range of investment options, including registered investment companies managed by the firm. BlackRock contributions follow the investment direction set by participants for their own contributions or, absent employee investment direction, are invested into a balanced portfolio. The ESPP allows for investment in BlackRock common stock at a 5% discount on the fair market value of the stock on |
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| the purchase date. Annual participation in the ESPP is limited to the purchase of 1,000 shares or a dollar value of $25,000. Each portfolio manager is eligible to participate in these plans. |
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| (a)(4) Beneficial Ownership of Securities – As of October 31, 2010. |
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Portfolio Manager | Dollar Range of Equity Securities |
| of the Fund Beneficially Owned |
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Thomas P. Callan | None |
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Jean M. Rosenbaum | $10,001 - $50,000 |
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Michael D. Carey | $10,001 - $50,000 |
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Kyle G. McClements | $1 - $10,001 |
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Item 9 – | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable due to no such purchases during the period covered by this report. |
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Item 10 – | Submission of Matters to a Vote of Security Holders – On October 25, 2010, the Board of Trustees of the Fund amended and restated in its entirety the bylaws of the Fund (the “Amended and Restated Bylaws”). The Amended and Restated Bylaws were deemed effective as of October 28, 2010 and set forth, among other things, the processes and procedures that shareholders of the Fund must follow, and specifies additional information that shareholders of the Fund must provide, when proposing trustee nominations at any annual meeting or special meeting in lieu of an annual meeting or other business to be considered at an annual meeting or special meeting. |
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Item 11 – | Controls and Procedures |
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11(a) – | The registrant’s principal executive and principal financial officers or persons performing similar functions have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a -15(b) under the Securities Exchange Act of 1934, as amended. |
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11(b) – | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
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Item 12 – | Exhibits attached hereto |
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12(a)(1) – | Code of Ethics – See Item 2 |
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12(a)(2) – | Certifications – Attached hereto |
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12(a)(3) – | Not Applicable |
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12(b) – | Certifications – Attached hereto |
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12(c) – | Notices to the registrant’s common shareholders in accordance with 1940 Act Section 19(a) and Rule 19a-11 |
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| 1 The Fund has received exemptive relief from the Securities and Exchange Commission permitting it to make periodic distributions of long-term capital gains with respect to its outstanding common stock as frequently as twelve times each year, and as frequently as distributions are specified by or in accordance with the terms of its outstanding preferred stock. This relief is conditioned, in part, on an undertaking by the Fund to make the disclosures to the holders of the Fund’s common shares, in addition to the information required by Section 19(a) of the 1940 Act and Rule 19a-1 thereunder. The Fund is likewise obligated to file with the SEC the information contained in any such notice to shareholders and, in that regard, has attached hereto copies of each such notice made during the period. |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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BlackRock Global Opportunities Equity Trust |
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By: | /s/ Anne F. Ackerley |
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| Anne F. Ackerley |
| Chief Executive Officer (principal executive officer) of |
| BlackRock Global Opportunities Equity Trust |
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Date: January 5, 2011 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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By: | /s/ Anne F. Ackerley |
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| Anne F. Ackerley |
| Chief Executive Officer (principal executive officer) of |
| BlackRock Global Opportunities Equity Trust |
|
Date: January 5, 2011 |
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By: | /s/ Neal J. Andrews |
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| Neal J. Andrews |
| Chief Financial Officer (principal financial officer) of |
| BlackRock Global Opportunities Equity Trust |
|
Date: January 5, 2011 |
