UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-21744
| | | | |
| Name of Fund: FDP Series, Inc. |
| | FDP BlackRock Capital Appreciation Fund (Formerly FDP BlackRock Janus Growth Fund) |
| | FDP BlackRock CoreAlpha Bond Fund |
| | FDP BlackRock Equity Dividend Fund (Formerly FDP BlackRock Invesco Value Fund) |
| | FDP BlackRock International Fund (Formerly FDP BlackRock MFS Research International Fund) |
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: John M. Perlowski, Chief Executive Officer, FDP Series, Inc., 55 East 52nd Street, New York, NY 10055
Registrant’s telephone number, including area code: (800) 441-7762
Date of fiscal year end: 05/31/2018
Date of reporting period: 11/30/2017
Item 1 – Report to Stockholders
NOVEMBER 30, 2017
| | |
SEMI-ANNUAL REPORT (UNAUDITED) | |  |
FDP Series, Inc.
| Ø | | FDP BlackRock Capital Appreciation Fund |
| Ø | | FDP BlackRock CoreAlpha Bond Fund |
| Ø | | FDP BlackRock Equity Dividend Fund |
| Ø | | FDP BlackRock International Fund |
|
| Not FDIC Insured • May Lose Value • No Bank Guarantee |
The Markets in Review
Dear Shareholder,
In the 12 months ended November 30, 2017, risk assets, such as stocks and high-yield bonds, continued to deliver strong performance. These markets showed great resilience during a period with big political surprises, including the aftermath of the U.K.’s vote to leave the European Union and the outcome of the U.S. presidential election, which brought only brief spikes in equity market volatility. In contrast, closely watched elections in France, the Netherlands, and Australia countered the isolationist and nationalist political developments in the U.K. and the United States.
Interest rates rose, which worked against high-quality assets with more interest rate sensitivity. Consequently, longer-term U.S. Treasuries posted modest returns, as rising energy prices, modest wage increases, and steady job growth led to expectations of higher inflation and further interest rate increases by the U.S. Federal Reserve (the “Fed”).
The market’s performance reflected reflationary expectations early in the reporting period, as investors began to sense that a global recovery was afoot. Thereafter, many countries throughout the world experienced sustained and synchronized growth for the first time since the financial crisis. Growth rates and inflation are still relatively low, but they are finally rising together.
The Fed responded to these positive developments by increasing short-term interest rates three times and setting expectations for additional interest rate increases. The Fed also began reducing the vast balance sheet reserves that had accumulated in the wake of the financial crisis. In October 2017, the Fed reduced its $4.5 trillion balance sheet by only $10 billion, while setting expectations for additional modest reductions and rate hikes in 2018.
By contrast, the European Central Bank (“ECB”) and the Bank of Japan (“BoJ”) both continued to expand their balance sheets despite nascent signs of sustained economic growth. The Eurozone and Japan are both approaching the limits of central banks’ ownership share of national debt, which is a structural pressure point that limits their capacity to deliver additional monetary stimulus. In October 2017, the ECB announced plans to cut the amount of its bond purchases in half for 2018, while the BoJ reiterated its commitment to economic stimulus until the inflation rate rises to its target of 2.0%.
Emerging market growth also stabilized, as accelerating growth in China, the second largest economy in the world and the most influential of all developing economies, improved the outlook for corporate profits and economic growth across most developing nations. Chinese demand for commodities and other raw materials allayed concerns about the country’s banking system, leading to rising equity prices and foreign investment flows.
While escalating tensions between the United States and North Korea and our nation’s divided politics are concerning, benign credit conditions, modest inflation, solid corporate earnings, and the positive outlook for growth in the world’s largest economies have kept markets relatively tranquil.
Rising consumer confidence and improving business sentiment are driving momentum for the U.S. economy. If the Fed maintains a measured pace of stimulus reduction, to the extent that inflation rises, it’s likely to be accompanied by rising real growth and higher wages. That could lead to a favorable combination of moderately higher inflation, steadily rising interest rates, and improving growth in 2018, even without the potential benefits of major legislative changes.
In this environment, investors need to think globally, extend their scope across a broad array of asset classes, and be nimble as market conditions change. We encourage you to talk with your financial advisor and visit blackrock.com for further insight about investing in today’s markets.
Sincerely,
Rob Kapito
President, BlackRock Advisors, LLC
Rob Kapito
President, BlackRock Advisors, LLC
| | | | |
| Total Returns as of November 30, 2017 |
| | | 6-month | | 12-month |
U.S. large cap equities
(S&P 500® Index) | | 10.89% | | 22.87% |
U.S. small cap equities
(Russell 2000® Index) | | 13.43 | | 18.34 |
International equities
(MSCI Europe, Australasia,
Far East Index) | | 7.94 | | 27.27 |
Emerging market equities
(MSCI Emerging Markets Index) | | 13.03 | | 32.82 |
3-month Treasury bills
(BofA Merrill Lynch 3-Month
U.S. Treasury Bill Index) | | 0.52 | | 0.79 |
U.S. Treasury securities
(BofA Merrill Lynch
10-Year U.S. Treasury
Index) | | (1.00) | | 1.43 |
U.S. investment grade bonds
(Bloomberg Barclays U.S.
Aggregate Bond Index) | | 0.68 | | 3.21 |
Tax-exempt municipal bonds
(S&P Municipal Bond Index) | | 0.45 | | 5.00 |
U.S. high yield bonds
(Bloomberg Barclays U.S. Corporate High Yield 2% Issuer
Capped Index) | | 2.29 | | 9.16 |
| Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index. |
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| 2 | | THIS PAGEISNOT PARTOF YOUR FUND REPORT |
Table of Contents
FDP Series, Inc. is part of the Funds Diversified PortfoliosSM (“FDP”) Service. You may receive separate shareholder reports for other funds available through the Service.
| | |
| Fund Summary as of November 30, 2017 | | FDP BlackRock Capital Appreciation Fund |
Investment Objective
FDP BlackRock Capital Appreciation Fund’s (the “Fund”) investment objective is to seek long-term growth of capital.
On September 12, 2017, the Board approved a proposal to change the name of the Fund from “FDP BlackRock Janus Growth Fund” and certain changes to the Fund’s investment objective and strategies. The Board also approved the termination of the Fund’s sub-advisery agreement with Janus Capital Management LLC. In addition, the Fund’s Manager has determined to change the benchmark index against which the Fund compares its performance. All of these changes became effective on November 28, 2017.
Portfolio Management Commentary
How did the Fund perform?
For the six-month period ended November 30, 2017, the Fund underperformed its current benchmark, the S&P 500® index, and the prior benchmark, the Russell 1000® Growth Index.
What factors influenced performance?
The primary detractors from Fund performance for the period were stock selection in the health care, industrials and information technology (“IT”) sectors. Individual detractors included Allergan PLC, Comcast Corp., Altria Group, Inc., Envision Healthcare Corp., and United Continental Holdings, Inc. Within health care, Envision was the largest detractor. Within industrials and IT, United Continental and Ultimate Software Group, Inc. were the largest detractors.
The largest contributors to performance for the period came mainly from stock selection in consumer discretionary, followed by modest returns within the consumer staples and financials sectors. Individual contributors included Microsoft Corp., Amazon.com, Inc., Apple Inc., Adobe Systems, Inc., and Facebook, Inc. Within consumer discretionary, Amazon.com represented the strongest contributor. Within consumer staples and financials, respectively, Estee Lauder Cos., Inc. and Mastercard, Inc. were the top performers. The cash position at period end is reflective of unsettled trading activity associated with the change in the investment objective and strategies.
Describe recent portfolio activity.
Early in the period, the number of names in the portfolio were reduced, with the goal of raising the predicted tracking error while continuing to stress stock selection. In addition, some internet-based retailers, such as Amazon.com and Priceline Group, Inc., were shifted to the consumer sector from the technology sector in order to align the Fund’s research sectors more closely with financial industry standards. This allowed the Fund’s consumer team to express its view regarding the power of e-commerce and its threat to traditional retailers. The Fund’s former sub-adviser did not make major shifts in positioning in reaction to macroeconomic factors, but traded based on the relative attractiveness of ideas.
Describe portfolio positioning at period end.
Relative to the Russell 1000® Growth Index, the Fund ended the period overweight in materials, consumer discretionary, IT and utilities. Conversely, the Fund ended the period underweight in industrials, consumer staples, telecommunication services, real estate, financials, energy and health care.
The views expressed reflect the opinions of the Fund’s sub-adviser during the reporting period and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
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| 4 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
| | |
| Fund Summary as of November 30, 2017 (continued) | | FDP BlackRock Capital Appreciation Fund |
Performance Summary for the Period Ended November 30, 2017
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Average Annual Total Returns (a)(b) | |
| | | | | | | | | 1 Year | | | | | | 5 Years | | | | | | 10 Years | |
| | | 6-Month
Total Returns | | | | | | w/o sales
charge | | | w/sales
charge | | | | | | w/o sales
charge | | | w/sales
charge | | | | | | w/o sales
charge | | | w/sales
charge | |
Institutional | | | 8.02 | % | | | | | | | 23.74 | % | | | N/A | | | | | | | | 12.99 | % | | | N/A | | | | | | | | 6.09 | % | | | N/A | |
Investor A | | | 7.87 | | | | | | | | 23.50 | | | | 17.01 | % | | | | | | | 12.72 | | | | 11.51 | % | | | | | | | 5.83 | | | | 5.26 | % |
Investor C | | | 7.42 | | | | | | | | 22.44 | | | | 21.44 | | | | | | | | 11.86 | | | | 11.86 | | | | | | | | 5.03 | | | | 5.03 | |
Russell 1000® Growth Index(c) | | | 13.05 | | | | | | | | 30.81 | | | | N/A | | | | | | | | 17.14 | | | | N/A | | | | | | | | 9.87 | | | | N/A | |
S&P 500® Index(d) | | | 10.89 | | | | | | | | 22.87 | | | | N/A | | | | | | | | 15.74 | | | | N/A | | | | | | | | 8.30 | | | | N/A | |
| | (a) | Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See “About Fund Performance” on page 12 for a detailed description of share classes, including any related sales charges and fees. | |
| | (b) | The Fund pursues its investment objective by investing primarily in common stocks of U.S. companies that have potential for growth. The Fund’s total returns prior to January 30, 2016 are the returns of the Fund when it followed different investment strategies under the name FDP BlackRock Janus Growth Fund. | |
| | (c) | A float-adjusted, market capitalization–weighted index measures the performance of the large cap growth segment of the U.S. equity universe and consists of those Russell 1000® securities with higher price-to-book ratios and higher forecasted growth values. | |
| | (d) | An unmanaged index that covers 500 leading companies and captures approximately 80% coverage of available market capitalization. | |
N/A — Not applicable as share class and index do not have a sales charge.
Past performance is not indicative of future results.
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Expense Example
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Actual | | | | | | Hypothetical (f) | | | | |
| | | Beginning
Account Value
(06/01/17) | | | Ending
Account Value
(11/30/17) | | | Expenses
Paid During
the Period (e) | | | | | | Beginning
Account Value
(06/01/17) | | | Ending
Account Value (11/30/17) | | | Expenses
Paid During
the Period (e) | | | Annualized
Expense
Ratio | |
Institutional | | $ | 1,000.00 | | | $ | 1,080.20 | | | $ | 5.74 | | | | | | | $ | 1,000.00 | | | $ | 1,019.55 | | | $ | 5.57 | | | | 1.10 | % |
Investor A | | $ | 1,000.00 | | | $ | 1,078.70 | | | $ | 6.98 | | | | | | | $ | 1,000.00 | | | $ | 1,018.35 | | | $ | 6.78 | | | | 1.34 | % |
Investor C | | $ | 1,000.00 | | | $ | 1,074.20 | | | $ | 11.08 | | | �� | | | | $ | 1,000.00 | | | $ | 1,014.39 | | | $ | 10.76 | | | | 2.13 | % |
| | (e) | For each class of the Fund, expenses are equal to the annualized net expense ratio for the class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period shown). | |
| | (f) | Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365. | |
See “Disclosure of Expenses” on page 13 for further information on how expenses were calculated.
| | |
| Fund Summary as of November 30, 2017 | | FDP BlackRock CoreAlpha Bond Fund |
Investment Objective
FDP BlackRock CoreAlpha Bond Fund’s (the “Fund”) investment objective is to seek to provide a combination of income and capital growth.
Portfolio Management Commentary
How did the Fund perform?
For the six-month period ended November 30, 2017, the Fund’s Institutional Shares performed in line with the benchmark, the Bloomberg Barclays U.S. Aggregate Bond Index, while the Fund’s Investor A and Investor C Shares underperformed.
What factors influenced performance?
The Fund’s global rate strategy represented the largest contributor to performance for the period. The Fund’s model was bearish regarding Canada, as it suggested that the Canadian economy was growing above trend and the country’s labor market continued to tighten. Credit security selection also was positive as a result of the Fund’s overweight to banking and consumer non-cyclicals. Additionally, asset allocation strategies contributed as the Fund was long in high yield and other spread assets that benefited from continued spread tightening and positive carry (cash flow).
The Fund’s mortgage strategies were the only detractor during the period due to the Fund’s 30-year pool selection and up-in-coupon positioning, which came under pressure as the yield curve flattened.
Describe recent portfolio activity.
During the six-month period, the Fund maintained its underweight in industrials, while its overweight to consumer non-cyclicals was increased, particularly within health care and pharmaceuticals. In energy, the Fund moved from slight overweights in integrated energy, independent energy and oil field services into underweights, but remained overweight within midstream and refining credits. The Fund also shifted from an underweight to an overweight within basic materials.
Describe portfolio positioning at period end.
Relative to the Bloomberg Barclays U.S. Aggregate Bond Index, the Fund was underweight in U.S. Treasury securities. Within spread sectors, the Fund was overweight in investment-grade corporate credit, agency mortgage-backed securities and asset-backed securities, with an underweight in real estate investment trusts. The Fund also held a non-benchmark allocation in high yield securities. Within investment grade credit, the portfolio was overweight in the consumer sectors, banking names, and select issues within communications. In terms of global rate positioning, the Fund remained short in Canadian rates, and also held a short position in European rates, as economic data in Europe remained robust.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
| | |
| 6 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
| | |
| Fund Summary as of November 30, 2017 (continued) | | FDP BlackRock CoreAlpha Bond Fund |
Performance Summary for the Period Ended November 30, 2017
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | Average Annual Total Returns (a)(b) | |
| | | | | | | | | | | | 1 Year | | | | | | 5 Years | | | | | | 10 Years | |
| | | Standardized
30-Day Yields | | | 6-Month
Total Returns | | | | | | w/o sales
charge | | | w/sales
charge | | | | | | w/o sales
charge | | | w/sales
charge | | | | | | w/o sales
charge | | | w/sales
charge | |
Institutional | | | 2.20 | % | | | 0.69 | % | | | | | | | 3.98 | % | | | N/A | | | | | | | | 1.91 | % | | | N/A | | | | | | | | 4.25 | % | | | N/A | |
Investor A | | | 1.87 | | | | 0.47 | | | | | | | | 3.63 | | | | (0.51 | )% | | | | | | | 1.66 | | | | 0.83 | % | | | | | | | 3.99 | | | | 3.57 | % |
Investor C | | | 1.40 | | | | 0.19 | | | | | | | | 3.05 | | | | 2.05 | | | | | | | | 1.09 | | | | 1.09 | | | | | | | | 3.41 | | | | 3.41 | |
Bloomberg Barclays U.S. Aggregate Bond Index(c) | | | — | | | | 0.68 | | | | | | | | 3.21 | | | | N/A | | | | | | | | 1.98 | | | | N/A | | | | | | | | 3.99 | | | | N/A | |
| | (a) | Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See “About Fund Performance” on page 12 for a detailed description of share classes, including any related sales charges and fees. | |
| | (b) | The Fund invests, under normal circumstances, at least 80% of its assets in bonds and futures and other instruments that have economic characteristics similar to bonds. For the purposes of this strategy, “bonds” include the following: obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities; mortgage-backed securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities, including U.S. agency mortgage pass-through securities; commercial mortgage-backed securities; debt obligations of U.S. issuers; municipal securities; asset-backed securities; and U.S.-registered dollar-denominated debt obligations of foreign issuers. | |
| | (c) | A market-weighted index, comprised of investment-grade U.S. Treasury bonds, government-related bonds, corporate bonds, mortgage-backed pass-through securities, commercial mortgage-backed securities and asset-backed securities (“ABS”) that are publicly offered for sale in the United States with $250 million or more of outstanding face value and at least one year to maturity. | |
N/A — Not applicable as share class and index do not have a sales charge.
Past performance is not indicative of future results.
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Expense Example
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Actual | | | | | | Hypothetical (e) | |
| | | Beginning
Account Value (06/01/17) | | | Ending
Account Value
(11/30/17) | | | Expenses
Paid During
the Period (d) | | | | | | Beginning
Account Value (06/01/17) | | | Ending
Account Value (11/30/17) | | | Expenses
Paid During
the Period (d) | | | Annualized
Expense
Ratio | |
Institutional | | $ | 1,000.00 | | | $ | 1,006.90 | | | $ | 3.02 | | | | | | | $ | 1,000.00 | | | $ | 1,022.06 | | | $ | 3.04 | | | | 0.60 | % |
Investor A | | $ | 1,000.00 | | | $ | 1,004.70 | | | $ | 4.22 | | | | | | | $ | 1,000.00 | | | $ | 1,020.86 | | | $ | 4.26 | | | | 0.84 | % |
Investor C | | $ | 1,000.00 | | | $ | 1,001.90 | | | $ | 7.08 | | | | | | | $ | 1,000.00 | | | $ | 1,018.00 | | | $ | 7.13 | | | | 1.41 | % |
| | (d) | For each class of the Fund, expenses are equal to the annualized net expense ratio for the class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period shown). | |
| | (e) | Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365. | |
See “Disclosure of Expenses” on page 13 for further information on how expenses were calculated.
| | |
| Fund Summary as of November 30, 2017 | | FDP BlackRock Equity Dividend Fund |
Investment Objective
FDP BlackRock Equity Dividend Fund’s (the “Fund”) investment objective is to seek long-term total return and current income.
On September 12, 2017, the Board approved a proposal to change the name of the Fund from “FDP BlackRock Invesco Value Fund” and certain changes to the Fund’s investment objective and strategies. The Board also approved the termination of the Fund’s sub-advisery agreement with Invesco Advisers, Inc. All of these changes became effective on November 28, 2017.
Portfolio Management Commentary
How did the Fund perform?
For the six-month period ended November 30, 2017, the Fund outperformed its benchmark, the Russell 1000® Value Index.
What factors influenced performance?
During the period, stock selection and an overweight to financials, in particular banks and diversified financials, had a positive impact on relative return. Stock selection within information technology (“IT”), as well as an underweight and stock selection within consumer staples, also contributed to relative performance.
The cash position at period end is reflective of unsettled trading activity associated with the change in the investment objective and strategies. The Fund’s cash position detracted from relative performance, as would be expected in a strong equity market.
Describe recent portfolio activity.
The Fund reduced its positions within financials and IT based on market strength, and also sold a significant portion of its media and retail holdings within consumer discretionary. Lastly, the Fund added to its health care and energy holdings at the margins based on attractive valuations.
Describe portfolio positioning at period end.
Relative to the Russell 1000® Value Index, the Fund ended the period overweight in financials, energy, and IT, and underweight in utilities, consumer staples, industrials, healthcare, materials and telecom. The Fund had no exposure to real estate.
The views expressed reflect the opinions of the Fund’s sub-adviser during the reporting period and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
| | |
| 8 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
| | |
| Fund Summary as of November 30, 2017 (continued) | | FDP BlackRock Equity Dividend Fund |
Performance Summary for the Period Ended November 30, 2017
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Average Annual Total Returns (a)(b) | |
| | | | | | | | | 1 Year | | | | | | 5 Years | | | | | | 10 Years | |
| | | 6-Month
Total Returns | | | | | | w/o sales
charge | | | w/sales
charge | | | | | | w/o sales
charge | | | w/sales
charge | | | | | | w/o sales
charge | | | w/sales
charge | |
Institutional | | | 13.82 | % | | | | | | | 17.11 | % | | | N/A | | | | | | | | 13.82 | % | | | N/A | | | | | | | | 7.15 | % | | | N/A | |
Investor A | | | 13.69 | | | | | | | | 16.83 | | | | 10.70 | % | | | | | | | 13.54 | | | | 12.32 | % | | | | | | | 6.88 | | | | 6.31 | % |
Investor C | | | 13.22 | | | | | | | | 15.94 | | | | 14.94 | | | | | | | | 12.67 | | | | 12.67 | | | | | | | | 6.07 | | | | 6.07 | |
Russell 1000® Value Index(c) | | | 8.79 | | | | | | | | 14.83 | | | | N/A | | | | | | | | 14.17 | | | | N/A | | | | | | | | 6.84 | | | | N/A | |
| | (a) | Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See “About Fund Performance” on page 12 for a detailed description of share classes, including any related sales charges and fees. | |
| | (b) | The Fund pursues its investment objective by investing primarily, under normal circumstances, at least 80% of its assets in equity securities and at least 80% of its assets in dividend paying securities. The Fund’s total returns prior to November 28, 2017 are the returns of the Fund when it followed different investment strategies under the name FDP BlackRock Invesco Value Fund. | |
| | (c) | A float-adjusted, market capitalization–weighted index that is a subset of the Russell 1000® Index that consists of those Russell 1000® securities with lower price-to-book ratios and lower expected growth values. | |
N/A — Not applicable as share class and index do not have a sales charge.
Past performance is not indicative of future results.
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Expense Example
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Actual | | | | | | Hypothetical (e) | | | | |
| | | Beginning
Account Value
(06/01/17) | | | Ending
Account Value
(11/30/17) | | | Expenses
Paid During
the Period (d) | | | | | | Beginning
Account Value
(06/01/17) | | | Ending
Account Value (11/30/17) | | | Expenses
Paid During
the Period (d) | | | Annualized
Expense
Ratio | |
Institutional | | $ | 1,000.00 | | | $ | 1,138.20 | | | $ | 5.36 | | | | | | | $ | 1,000.00 | | | $ | 1,020.05 | | | $ | 5.06 | | | | 1.00 | % |
Investor A | | $ | 1,000.00 | | | $ | 1,136.90 | | | $ | 6.64 | | | | | | | $ | 1,000.00 | | | $ | 1,018.85 | | | $ | 6.28 | | | | 1.24 | % |
Investor C | | $ | 1,000.00 | | | $ | 1,132.20 | | | $ | 10.85 | | | | | | | $ | 1,000.00 | | | $ | 1,014.89 | | | $ | 10.25 | | | | 2.03 | % |
| | (d) | For each class of the Fund, expenses are equal to the annualized net expense ratio for the class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period shown). | |
| | (e) | Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365. | |
See “Disclosure of Expenses” on page 13 for further information on how expenses were calculated.
| | |
| Fund Summary as of November 30, 2017 | | FDP BlackRock International Fund |
Investment Objective
FDP BlackRock International Fund’s (the “Fund”) investment objective is to seek long-term capital growth.
On September 12, 2017, the Board approved a proposal to change the name of the Fund from “FDP BlackRock MFS Research International Fund” and certain changes to the Fund’s investment objective and strategies. The Board also approved the termination of the Fund’s sub-advisery agreement with Massachusetts Financial Services Company. In addition, the Fund’s Manager determined to remove the MSCI EAFE Index as a benchmark index against which the Fund compares its performance. All of these changes became effective on November 28, 2017.
Portfolio Management Commentary
How did the Fund perform?
For the six-month period ended November 30, 2017, the Fund underperformed its former primary benchmark, the MSCI EAFE Index, and its secondary benchmark, the MSCI All Country World (ex U.S.) Index. The following discussion of relative performance pertains to the MSCI EAFE Index.
What factors influenced performance?
During the six-month period, stock selection within the capital goods sector detracted from relative performance. The five largest individual detractors from performance included overweight positions in household products manufacturer Reckitt Benckiser Group PLC (United Kingdom), pharmaceutical and diagnostic company Roche Holding AG (Switzerland), advertising and marketing firm WPP PLC (United Kingdom), pharmaceutical company Bayer AG (Germany) and paint and chemicals manufacturer Nippon Paint Holdings Co. Ltd. (Japan). Moreover, although the Fund’s former sub-adviser did not actively manage currency within their strategy, the Fund’s currency exposure had a negative impact on relative performance.
Conversely, stock selection within the telecommunication services/cable TV sub-sector represented a key contributor to relative performance. The largest individual contributors for the period included an overweight position in household fixture manufacturer Toto Ltd. (Japan), the Fund’s position in online and mobile commerce company Alibaba Group Holding Ltd. (China), overweight positions in automotive lighting systems manufacturer Koito Manufacturing Co. Ltd. (Japan) and insurance company AIA Group Ltd. (Hong Kong), along with a lack of holdings in the pharmaceutical firm GlaxoSmithKline PLC (United Kingdom).
Describe recent portfolio activity.
The Fund’s former sub-adviser continued to be alert to ever-present structural shifts underway in many portions of the consumer cyclical sector, as evidenced by the increased level of retailer bankruptcies. For companies that effectively have existed as an intermediary for a consumer that is increasingly transacting directly, the risks are large and change has come fast. The Fund shifted toward industries that are relatively less exposed to these trends, such as airports and publishers, and within retail, toward specialty retailers such as luxury and pharmacy companies. In financials, European banks have continued their favorable run on expectations that interest rates will normalize as the European Central Bank’s quantitative easing is scaled back. Although the Fund has an overweight to European banks, the Fund’s former sub-adviser remained cautious as these banks have already rallied strongly. Additionally, the Fund’s former sub-adviser saw valuations for the high growth information technology (“IT”) stocks stretch further this quarter, trading at the higher end of historical ranges. While the underlying drivers remain strong, the sub-adviser remained alert to progressing regulatory and political scrutiny in many of these names. The Fund’s former sub-adviser remained comfortable with the portfolio’s positioning, which has seen the Fund prudently trim exposure to Alibaba, reduce semiconductor exposure on the strength of the cycle through 2017, and retain a positive stance to IT consulting and services groups such as Nomura Research Institute Ltd., where the Fund added to its position during the period.
Describe portfolio positioning at period end.
The Fund is a sector-neutral portfolio that emphasizes bottom-up fundamental analysis and therefore, regional and industry allocations are strictly a by-product of where Fund management finds the most attractive opportunities. Relative to the MSCI EAFE Index, the Fund ended the period underweight in the United Kingdom, Japan and Asia-Pacific ex-Japan, and was overweight in North America, emerging markets, Europe ex-U.K. and developed Middle East & Africa.
The views expressed reflect the opinions of the Fund’s sub-adviser during the reporting period and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
| | |
| 10 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
| | |
| Fund Summary as of November 30, 2017 (continued) | | FDP BlackRock International Fund |
Performance Summary for the Period Ended November 30, 2017
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Average Annual Total Returns (a)(b) | |
| | | | | | | | | 1 Year | | | | | | 5 Years | | | | | | 10 Years | |
| | | 6-Month
Total Returns | | | | | | w/o sales
charge | | | w/sales
charge | | | | | | w/o sales
charge | | | w/sales
charge | | | | | | w/o sales
charge | | | w/sales
charge | |
Institutional | | | 7.29 | % | | | | | | | 27.18 | % | | | N/A | | | | | | | | 6.60 | % | | | N/A | | | | | | | | 1.28 | % | | | N/A | |
Investor A | | | 7.08 | | | | | | | | 26.85 | | | | 20.19 | % | | | | | | | 6.33 | | | | 5.19 | % | | | | | | | 1.02 | | | | 0.48 | % |
Investor C | | | 6.67 | | | | | | | | 25.93 | | | | 24.93 | | | | | | | | 5.54 | | | | 5.54 | | | | | | | | 0.26 | | | | 0.26 | |
MSCI EAFE Index(c) | | | 7.94 | | | | | | | | 27.27 | | | | N/A | | | | | | | | 8.24 | | | | N/A | | | | | | | | 1.55 | | | | N/A | |
MSCI All Country World (ex U.S.) Index(d) | | | 9.38 | | | | | | | | 27.59 | | | | N/A | | | | | | | | 7.06 | | | | N/A | | | | | | | | 1.47 | | | | N/A | |
| | (a) | Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See “About Fund Performance” on page 12 for a detailed description of share classes, including any related sales charges and fees. | |
| | (b) | The Fund pursues its investment objective by investing at least 75% of its total assets in global equity securities of any market capitalization, selected for their above-average return potential. The Fund’s total returns prior to November 28, 2017 are the returns of the Fund when it followed different investment strategies under the name FDP BlackRock MFS Research International Fund. | |
| | (c) | A free-float adjusted market capitalization index designed to measure equity performance of developed markets, excluding the United States and Canada. | |
| | (d) | A free float-adjusted market capitalization index designed to measure the combined equity market performance of developed and emerging market countries, excluding the United States. | |
N/A — Not applicable as share class and index do not have a sales charge.
Past performance is not indicative of future results.
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Expense Example
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Actual | | | | | | Hypothetical (f) | | | | |
| | | Beginning
Account Value
(06/01/17) | | | Ending
Account Value
(11/30/17) | | | Expenses
Paid During
the Period (e) | | | | | | Beginning
Account Value
(06/01/17) | | | Ending
Account Value
(11/30/17) | | | Expenses
Paid During
the Period (e) | | | Annualized
Expense
Ratio | |
Institutional | | $ | 1,000.00 | | | $ | 1,072.90 | | | $ | 6.60 | | | | | | | $ | 1,000.00 | | | $ | 1,018.70 | | | $ | 6.43 | | | | 1.27 | % |
Investor A | | $ | 1,000.00 | | | $ | 1,070.80 | | | $ | 7.84 | | | | | | | $ | 1,000.00 | | | $ | 1,017.50 | | | $ | 7.64 | | | | 1.51 | % |
Investor C | | $ | 1,000.00 | | | $ | 1,066.70 | | | $ | 11.92 | | | | | | | $ | 1,000.00 | | | $ | 1,013.54 | | | $ | 11.61 | | | | 2.30 | % |
| | (e) | For each class of the Fund, expenses are equal to the annualized net expense ratio for the class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period shown). | |
| | (f) | Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365. | |
See “Disclosure of Expenses” on page 13 for further information on how expenses were calculated.
About Fund Performance
Shares are only available for purchase through the FDP Service.
Institutional Shares are not subject to any sales charge. These shares bear no ongoing distribution or service fees and are available only to certain eligible investors.
Investor A Shares (for all Funds except FDP BlackRock CoreAlpha Bond Fund) are subject to a maximum initial sales charge (front-end load) of 5.25% and a service fee of 0.25% per year (but no distribution fee). Investor A Shares for FDP BlackRock CoreAlpha Bond Fund are subject to a maximum initial sales charge (front-end load) of 4.00% and a service fee of 0.25% per year (but no distribution fee). Certain redemptions of these shares may be subject to a contingent deferred sales charge (“CDSC”) where no initial sales charge was paid at the time of purchase.
Investor C Shares (for all Funds except FDP BlackRock CoreAlpha Bond Fund) are subject to a distribution fee of 0.75% per year and a service fee of 0.25% per year. Investor C Shares for FDP BlackRock CoreAlpha Bond Fund are subject to a distribution fee of 0.55% per year and a service fee of 0.25% per year. In addition, these shares for all Funds are subject to a 1.00% CDSC if redeemed within one year of purchase.
Performance information reflects past performance and does not guarantee future results. Current performance may be lower or higher than the performance data quoted. Refer to www.blackrock.com to obtain performance data current to the most recent month end. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Figures shown in the performance tables on the previous pages assume reinvestment of all distributions, if any, at net asset value (“NAV”) on the ex-dividend/payable date. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Distributions paid to each class of shares will vary because of the different levels of service, distribution and transfer agency fees applicable to each class, which are deducted from the income available to be paid to shareholders.
BlackRock Advisors, LLC (the “Manager”), the Funds’ investment adviser, has contractually agreed to waive and/or reimburse a portion of the Funds’ expenses. Without such waiver and/or reimbursement, the Funds’ performance would have been lower. The Manager is under no obligation to continue waiving and/or reimbursing its fees after the applicable termination date of such agreement. Effective November 28, 2017, the Manager agreed to contractually waive a portion of its investment advisory fee of its management fee payable by FDP BlackRock Capital Appreciation Fund, FDP BlackRock Equity Dividend Fund and FDP BlackRock International Fund, so that the management fee is 0.65%, 0.60% and 0.75% of average daily net assets, respectively, through September 30, 2019. Also, effective March 10, 2017, the Manager has agreed to contractually waive its management fee payable by FDP BlackRock CoreAlpha Bond Fund so that the management fee is 0.32% of average daily net assets through September 30, 2018. These contractual waiver agreements may be terminated upon 90 days’ notice by a majority of the non-interested directors of FDP Series, Inc. or by a vote of a majority of the outstanding voting securities of the relevant Fund. Regarding the voluntary waivers, the Manager is under no obligation to waive or to continue waiving its fees and such waivers may be reduced or discontinued at any time. Without such contractual or voluntary waivers, the performance of the Funds would have been lower. See Note 6 of the Notes to Financial Statements for additional information on waivers and reimbursements.
| | |
| 12 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Disclosure of Expenses
Shareholders of these Funds may incur the following charges: (a) transactional expenses, such as sales charges; and (b) operating expenses, including investment advisory fees, service and distribution fees, including 12b-1 fees, acquired fund fees and expenses and other fund expenses. The expense examples on previous pages (which are based on a hypothetical investment of $1,000 invested on June 1, 2017 and held through November 30, 2017) are intended to assist shareholders both in calculating expenses based on an investment in each Fund and in comparing these expenses with similar costs of investing in other mutual funds.
The expense examples provide information about actual account values and actual expenses. In order to estimate the expenses a shareholder paid during the period covered by this report, shareholders can divide their account value by $1,000 and then multiply the result by the number corresponding to their Fund and share class under the heading entitled “Expenses Paid During the Period.”
The expense examples also provide information about hypothetical account values and hypothetical expenses based on a Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. In order to assist shareholders in comparing the ongoing expenses of investing in these Funds and other funds, compare the 5% hypothetical examples with the 5% hypothetical examples that appear in shareholder reports of other funds.
The expenses shown in the expense examples are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as sales charges, if any. Therefore, the hypothetical examples are useful in comparing ongoing expenses only, and will not help shareholders determine the relative total expenses of owning different funds. If these transactional expenses were included, shareholder expenses would have been higher.
Derivative Financial Instruments
The Funds may invest in various derivative financial instruments. These instruments are used to obtain exposure to a security, commodity, index, market, and/or other assets without owning or taking physical custody of securities, commodities and/or other referenced assets or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage and involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the instrument. The Funds’ successful use of a derivative financial instrument depends on the investment adviser’s ability to predict pertinent market movements accurately, which cannot be assured. The use of these instruments may result in losses greater than if they had not been used, may limit the amount of appreciation a Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Funds’ investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.
| | | | |
| DISCLOSUREOF EXPENSES / DERIVATIVE FINANCIAL INSTRUMENTS | | | 13 | |
Portfolio Information as of November 30, 2017
FDP BlackRock Capital Appreciation Fund
TEN LARGEST HOLDINGS
| | | | |
| Holding | | Percent of
Net Assets | |
Amazon.com, Inc. | | | 8 | % |
Microsoft Corp. | | | 6 | |
Alphabet, Inc. | | | 6 | |
UnitedHealth Group, Inc. | | | 5 | |
Visa, Inc. | | | 5 | |
Tencent Holdings Ltd. | | | 4 | |
Facebook, Inc. | | | 3 | |
Priceline Group, Inc. | | | 3 | |
Constellation Brands, Inc. | | | 3 | |
Bank of America Corp. | | | 3 | |
SECTOR ALLOCATION
| | | | |
| Sector | | Percent of
Net Assets | |
Information Technology | | | 40 | % |
Consumer Discretionary | | | 20 | |
Health Care | | | 14 | |
Financials | | | 7 | |
Materials | | | 5 | |
Short Term Securities | | | 5 | |
Industrials | | | 5 | |
Consumer Staples | | | 4 | |
Energy | | | 2 | |
Real Estate | | | 1 | |
Telecommunication Services | | | 1 | |
Liabilities in Excess of Other Assets | | | (4 | ) |
FDP BlackRock CoreAlpha Bond Fund
PORTFOLIO COMPOSITION
| | | | |
| Asset Type | | Percent of
Total Investments (a) | |
Corporate Bonds | | | 46 | % |
U.S. Government Sponsored Agency Securities | | | 34 | |
Asset-Backed Securities | | | 12 | |
U.S. Treasury Obligations | | | 5 | |
Non-Agency Mortgage-Backed Securities | | | 2 | |
Foreign Agency Obligations | | | 1 | |
Municipal Bonds | | | 1 | |
Preferred Securities | | | — | (b) |
Floating Rate Loan Interests | | | — | (b) |
TBA Sale Commitments | | | (1 | ) |
| | (a) | Total investments exclude short-term securities. | |
| | (b) | Represents less than 1% of total investments. | |
| | |
| 14 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Portfolio Information as of November 30, 2017 (continued)
FDP BlackRock Equity Dividend Fund
TEN LARGEST HOLDINGS
| | | | |
| Holding | | Percent of
Net Assets | |
JPMorgan Chase & Co. | | | 4 | % |
Bank of America Corp. | | | 4 | |
Citigroup, Inc. | | | 4 | |
Pfizer, Inc. | | | 4 | |
Oracle Corp. | | | 3 | |
Wells Fargo & Co. | | | 3 | |
UnitedHealth Group, Inc. | | | 3 | |
Royal Dutch Shell PLC — ADR | | | 2 | |
DowDuPont, Inc. | | | 2 | |
Microsoft Corp. | | | 1 | |
SECTOR ALLOCATION
| | | | |
| Sector | | Percent of
Net Assets | |
Financials | | | 27 | % |
Health Care | | | 18 | |
Energy | | | 11 | |
Information Technology | | | 10 | |
Short Term Securities | | | 9 | |
Industrials | | | 8 | |
Consumer Staples | | | 6 | |
Utilities | | | 6 | |
Consumer Discretionary | | | 4 | |
Materials | | | 3 | |
Telecommunication Services | | | 3 | |
Liabilities in Excess of Other Assets | | | (5 | ) |
FDP BlackRock International Fund
TEN LARGEST HOLDINGS
| | | | |
| Holding | | Percent of
Net Assets | |
Sony Corp. | | | 5 | % |
Bank of China Ltd. | | | 5 | |
Trend Micro, Inc. | | | 4 | |
Banco Bilbao Vizcaya Argentaria SA | | | 4 | |
Imperial Brands PLC | | | 4 | |
Bayer AG, Registered Shares | | | 4 | |
Diageo PLC | | | 4 | |
Engie SA | | | 4 | |
Cie Financiere Richemont SA, Registered Shares | | | 4 | |
ICICI Bank Ltd. | | | 4 | |
GEOGRAPHIC ALLOCATION
| | | | |
| Country | | Percent of
Net Assets | |
United Kingdom | | | 21 | % |
Japan | | | 14 | |
China | | | 9 | |
Netherlands | | | 8 | |
Spain | | | 6 | |
United States | | | 5 | |
Brazil | | | 5 | |
Germany | | | 4 | |
France | | | 4 | |
Switzerland | | | 4 | |
India | | | 3 | |
Norway | | | 3 | |
Italy | | | 3 | |
Portugal | | | 2 | |
Hong Kong | | | 2 | |
Indonesia | | | 2 | |
Other(a) | | | 1 | |
Other Assets Less Liabilities | | | 4 | |
| | (a) | Other includes a 1% holding or less in each of the following countries: Singapore. | |
| | |
Schedule of Investments (unaudited) November 30, 2017 | | FDP BlackRock Capital Appreciation Fund (Percentages shown are based on Net Assets) |
| | | | | | | | |
| Security | | Shares | | | Value | |
Common Stocks — 99.5% | |
|
| Aerospace & Defense — 1.1% | |
TransDigm Group, Inc. | | | 3,390 | | | $ | 962,048 | |
| | | | | | | | |
| Banks — 5.1% | |
Bank of America Corp. | | | 88,653 | | | | 2,497,355 | |
First Republic Bank | | | 15,093 | | | | 1,441,985 | |
Wells Fargo & Co. | | | 9,446 | | | | 533,416 | |
| | | | | | | | |
| | | | | | | 4,472,756 | |
| Beverages — 3.8% | |
Constellation Brands, Inc., Class A | | | 11,501 | | | | 2,502,503 | |
Dr. Pepper Snapple Group, Inc. | | | 9,797 | | | | 883,591 | |
| | | | | | | | |
| | | | | | | 3,386,094 | |
| Biotechnology — 3.8% | |
Alexion Pharmaceuticals, Inc.(a) | | | 12,279 | | | | 1,348,357 | |
Biogen, Inc.(a) | | | 3,519 | | | | 1,133,716 | |
Vertex Pharmaceuticals, Inc.(a) | | | 6,089 | | | | 878,582 | |
| | | | | | | | |
| | | | | | | 3,360,655 | |
| Capital Markets — 1.0% | | | | | | |
S&P Global, Inc. | | | 5,265 | | | | 871,252 | |
| | | | | | | | |
| Chemicals — 3.5% | |
DowDuPont, Inc. | | | 17,263 | | | | 1,242,245 | |
Monsanto Co. | | | 5,363 | | | | 634,657 | |
Sherwin-Williams Co. | | | 3,025 | | | | 1,208,246 | |
| | | | | | | | |
| | | | | | | 3,085,148 | |
| Construction Materials — 1.6% | |
Vulcan Materials Co. | | | 11,328 | | | | 1,423,363 | |
| | | | | | | | |
| Diversified Financial Services — 1.5% | |
Berkshire Hathaway, Inc., Class B(a) | | | 6,820 | | | | 1,316,328 | |
| | | | | | | | |
| Diversified Telecommunication Services — 0.5% | |
Zayo Group Holdings, Inc.(a) | | | 11,231 | | | | 396,903 | |
| | | | | | | | |
| Energy Equipment & Services — 1.2% | |
Halliburton Co. | | | 26,033 | | | | 1,087,659 | |
| | | | | | | | |
| Equity Real Estate Investment Trusts (REITs) — 1.4% | | | | | | |
Equinix, Inc. | | | 1,878 | | | | 872,312 | |
Invitation Homes, Inc. | | | 1 | | | | 24 | |
SBA Communications Corp.(a) | | | 2,325 | | | | 394,669 | |
| | | | | | | | |
| | | | | | | 1,267,005 | |
| Health Care Equipment & Supplies — 3.5% | |
Becton Dickinson & Co. | | | 6,800 | | | | 1,551,828 | |
Boston Scientific Corp.(a) | | | 56,964 | | | | 1,497,014 | |
| | | | | | | | |
| | | | | | | 3,048,842 | |
| Health Care Providers & Services — 5.0% | |
UnitedHealth Group, Inc. | | | 19,432 | | | | 4,433,799 | |
| | | | | | | | |
| Hotels, Restaurants & Leisure — 1.4% | |
Domino’s Pizza, Inc. | | | 6,377 | | | | 1,187,142 | |
| | | | | | | | |
| Industrial Conglomerates — 1.0% | |
Roper Technologies, Inc. | | | 3,446 | | | | 920,806 | |
| | | | | | | | |
| Internet & Direct Marketing Retail — 13.1% | |
Amazon.com, Inc.(a) | | | 5,902 | | | | 6,945,178 | |
Netflix, Inc.(a) | | | 10,849 | | | | 2,035,055 | |
Priceline Group, Inc.(a) | | | 1,498 | | | | 2,606,086 | |
| | | | | | | | |
| | | | | | | 11,586,319 | |
| Internet Software & Services — 14.7% | |
Alibaba Group Holding Ltd. — ADR(a) | | | 3,837 | | | | 679,456 | |
Alphabet, Inc., Class A(a) | | | 4,925 | | | | 5,103,137 | |
Facebook, Inc., Class A(a) | | | 17,292 | | | | 3,063,797 | |
MercadoLibre, Inc. | | | 2,893 | | | | 795,980 | |
Tencent Holdings Ltd. | | | 64,400 | | | | 3,297,353 | |
| | | | | | | | |
| | | | | | | 12,939,723 | |
| | | | | | | | |
| Security | | Shares | | | Value | |
| IT Services — 6.9% | |
Global Payments, Inc. | | | 4,477 | | | $ | 450,207 | |
PayPal Holdings, Inc.(a) | | | 19,768 | | | | 1,497,031 | |
Visa, Inc., Class A | | | 36,603 | | | | 4,121,132 | |
| | | | | | | | |
| | | | | | | 6,068,370 | |
| Life Sciences Tools & Services — 1.4% | |
Illumina, Inc.(a) | | | 5,226 | | | | 1,202,137 | |
| | | | | | | | |
| Oil, Gas & Consumable Fuels — 0.6% | |
Pioneer Natural Resources Co. | | | 3,392 | | | | 529,288 | |
| | | | | | | | |
| Pharmaceuticals — 0.9% | |
Zoetis, Inc. | | | 11,314 | | | | 817,889 | |
| | | | | | | | |
| Professional Services — 1.7% | |
Equifax, Inc. | | | 12,736 | | | | 1,453,432 | |
| | | | | | | | |
| Road & Rail — 0.8% | |
Union Pacific Corp. | | | 5,260 | | | | 665,390 | |
| | | | | | | | |
| Semiconductors & Semiconductor Equipment — 5.2% | |
ASML Holding NV — NY Shares | | | 7,557 | | | | 1,326,405 | |
Broadcom Ltd. | | | 5,103 | | | | 1,418,328 | |
NVIDIA Corp. | | | 5,998 | | | | 1,203,858 | |
Teradyne, Inc. | | | 15,197 | | | | 615,023 | |
| | | | | | | | |
| | | | | | | 4,563,614 | |
| Software — 11.8% | |
Activision Blizzard, Inc. | | | 11,500 | | | | 717,600 | |
Adobe Systems, Inc.(a) | | | 10,678 | | | | 1,937,737 | |
Autodesk, Inc.(a) | | | 15,782 | | | | 1,731,285 | |
Electronic Arts, Inc.(a) | | | 6,213 | | | | 660,753 | |
Microsoft Corp. | | | 63,725 | | | | 5,363,733 | |
| | | | | | | | |
| | | | | | | 10,411,108 | |
| Specialty Retail — 3.9% | |
Home Depot, Inc. | | | 10,525 | | | | 1,892,605 | |
Ulta Salon Cosmetics & Fragrance, Inc.(a) | | | 7,025 | | | | 1,557,513 | |
| | | | | | | | |
| | | | | | | 3,450,118 | |
| Technology Hardware, Storage & Peripherals — 1.7% | |
Apple, Inc. | | | 8,535 | | | | 1,466,740 | |
| | | | | | | | |
| Textiles, Apparel & Luxury Goods — 1.4% | |
NIKE, Inc., Class B | | | 20,450 | | | | 1,235,589 | |
| | | | | | | | |
Total Long-Term Investments — 99.5%
(Cost — $75,775,872) | | | | 87,609,517 | |
| | | | | | | | |
| | |
Short-Term Securities — 4.7% | | | | | | | | |
BlackRock Liquidity Funds, T-Fund, Institutional Class,
0.96%(b)(c) | | | 4,165,694 | | | | 4,165,694 | |
| | | | | | | | |
Total Short-Term Securities — 4.7%
(Cost — $4,165,694) | | | | 4,165,694 | |
| | | | | | | | |
| |
Total Investments — 104.2%
(Cost — $79,941,566) | | | | 91,775,211 | |
Liabilities in Excess of Other Assets — (4.2)% | | | | (3,667,605 | ) |
| | | | | | | | |
Net Assets — 100.0% | | | $ | 88,107,606 | |
| | | | | | | | |
| (a) | Non-income producing security. |
| (b) | Annualized 7-day yield as of period end. |
| | |
| 16 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
| | |
Schedule of Investments (unaudited) (continued) November 30, 2017 | | FDP BlackRock Capital Appreciation Fund |
| (c) | During the six months ended November 30, 2017, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended were as follows: |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Affiliated | | Net
Activity | | | Shares
Held at
11/30/17 | | | Value at
11/30/17 | | | Income | | | Net
Realized
Gain (Loss) (a) | | | Change in
Unrealized
Appreciation
(Depreciation) | |
BlackRock Liquidity Funds, T-Fund, Institutional Class | | | 4,165,694 | | | | 4,165,694 | | | $ | 4,165,694 | | | $ | 149 | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | (a) | Includes net capital gain distributions, if applicable. | |
For Fund compliance purposes, the Fund’s industry classifications refer to one or more of the industry sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of investments. For information about the Fund’s policy regarding valuation of investments, refer to the Notes to Financial Statements.
The following table summarizes the Fund’s investments categorized in the disclosure hierarchy:
| | | | | | | | | | | | | | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Common Stocks: | | | | | | | | | | | | | | | | |
Aerospace & Defense | | $ | 962,048 | | | $ | — | | | $ | — | | | $ | 962,048 | |
Banks | | | 4,472,756 | | | | — | | | | — | | | | 4,472,756 | |
Beverages | | | 3,386,094 | | | | — | | | | — | | | | 3,386,094 | |
Biotechnology | | | 3,360,655 | | | | — | | | | — | | | | 3,360,655 | |
Capital Markets | | | 871,252 | | | | — | | | | — | | | | 871,252 | |
Chemicals | | | 3,085,148 | | | | — | | | | — | | | | 3,085,148 | |
Construction Materials | | | 1,423,363 | | | | — | | | | — | | | | 1,423,363 | |
Diversified Financial Services | | | 1,316,328 | | | | — | | | | — | | | | 1,316,328 | |
Diversified Telecommunication Services | | | 396,903 | | | | — | | | | — | | | | 396,903 | |
Energy Equipment & Services | | | 1,087,659 | | | | — | | | | — | | | | 1,087,659 | |
Equity Real Estate Investments Trusts (REITs) | | | 1,267,005 | | | | — | | | | — | | | | 1,267,005 | |
Health Care Equipment & Supplies | | | 3,048,842 | | | | — | | | | — | | | | 3,048,842 | |
Health Care Providers & services | | | 4,433,799 | | | | — | | | | — | | | | 4,433,799 | |
Hotels, Restaurants & Leisure | | | 1,187,142 | | | | — | | | | — | | | | 1,187,142 | |
Industrial Conglomerates | | | 920,806 | | | | — | | | | — | | | | 920,806 | |
Internet & Direct Marketing Retail | | | 11,586,319 | | | | — | | | | — | | | | 11,586,319 | |
Internet Software & Services | | | 9,642,370 | | | | 3,297,353 | | | | — | | | | 12,939,723 | |
IT Services | | | 6,068,370 | | | | — | | | | — | | | | 6,068,370 | |
Life Sciences Tools & Services | | | 1,202,137 | | | | — | | | | — | | | | 1,202,137 | |
Oil, Gas & Consumable Fuels | | | 529,288 | | | | — | | | | — | | | | 529,288 | |
Pharmaceuticals | | | 817,889 | | | | — | | | | — | | | | 817,889 | |
Professional Services | | | 1,453,432 | | | | — | | | | — | | | | 1,453,432 | |
Road & Rail | | | 665,390 | | | | — | | | | — | | | | 665,390 | |
Semiconductors & Semiconductors Equipment | | | 4,563,614 | | | | — | | | | — | | | | 4,563,614 | |
Software | | | 10,411,108 | | | | — | | | | — | | | | 10,411,108 | |
Specialty Retail | | | 3,450,118 | | | | — | | | | — | | | | 3,450,118 | |
Technology Hardware, Storage & Peripherals | | | 1,466,740 | | | | — | | | | — | | | | 1,466,740 | |
Textiles. Apparel & Luxury Goods | | | 1,235,589 | | | | — | | | | — | | | | 1,235,589 | |
Short-Term Securities: | | | | | | | | | | | | | | | | |
Money Market Funds | | | 4,165,694 | | | | — | | | | — | | | | 4,165,694 | |
| | | | | | | | | | | | | | | | |
Total | | $ | 88,477,858 | | | $ | 3,297,353 | | | $ | — | | | $ | 91,775,211 | |
| | | | | | | | | | | | | | | | |
During the six months ended November 30, 2017, there were no transfers between levels.
See notes to financial statements.
| | | | |
| SCHEDULES OF INVESTMENTS | | | 17 | |
| | |
Schedule of Investments (unaudited) November 30, 2017 | | FDP BlackRock CoreAlpha Bond Fund (Percentages shown are based on Net Assets) |
| | | | | | | | | | | | |
| Security | | Shares/Par
(000) | | | Value | |
Common Stocks — 0.0% | |
|
| Diversified Financial Services — 0.0% | |
HoldCo 2 NPV, Class A(a)(b) | | | | | | | 1,643,590 | | | $ | — | |
HoldCo 2 NPV, Class B(a)(b) | | | | | | | 163,560 | | | | — | |
| | | | | | | | |
Total Common Stocks — 0.0%
(Cost $—) | | | | — | |
| | | | | | | | |
|
Asset-Backed Securities — 14.1% | |
American Express Credit Account Master Trust, Series 2008-2, Class A, (1 mo. LIBOR + 1.26%), 2.51%, 09/15/20(c) | | | USD | | | | 780 | | | | 781,982 | |
AmeriCredit Automobile Receivables Trust, Series 2017-3, Class C, 2.69%, 06/19/23 | | | | | | | 450 | | | | 450,556 | |
Ameriquest Mortgage Securities, Inc., Series 2004-R4, Class M1, (1 mo. LIBOR US + 0.83%), 2.15%, 06/25/34(c) | | | | | | | 146 | | | | 146,378 | |
Argent Securities, Inc., Series 2005-W2, Class A2C, (1 mo. LIBOR US + 0.36%), 1.69%, 10/25/35(c) | | | | | | | 114 | | | | 114,005 | |
AVANT Loans Funding Trust, Series 2016-B, Class B, 7.80%, 09/15/20(d) | | | | | | | 472 | | | | 476,633 | |
Chase Funding Mortgage Loan Asset-Backed Certificates, Series 2004-2, Class 2A2, (1 mo. LIBOR US + 0.50%), 1.83%, 02/26/35(c) | | | | | | | 119 | | | | 115,748 | |
Chase Issuance Trust, Series 2013-A6, Class A6, (1 mo. LIBOR + 0.42%), 1.67%, 07/15/20(c) | | | | | | | 880 | | | | 882,215 | |
Citibank Credit Card Issuance Trust, Series 2013-A7, Class A7, (1 mo. LIBOR + 0.43%), 1.86%, 09/10/20(c) | | | | | | | 560 | | | | 561,400 | |
Colony American Homes(c)(d): | | | | | | | | | | | | |
Series 2014-1A, Class A, (1 mo. LIBOR + 1.15%), 2.40%, 05/17/31 | | | | | | | 532 | | | | 533,175 | |
Series 2014-2A, Class C, (1 mo. LIBOR + 1.90%), 3.19%, 07/17/31 | | | | | | | 346 | | | | 349,380 | |
Conseco Financial Corp., Series 1996-9, Class M1, 7.63%, 08/15/27(e) | | | | | | | 76 | | | | 81,785 | |
Countrywide Asset-Backed Certificates: | | | | | | | | | | | | |
Series 2004-1, Class M1, (1 mo. LIBOR US + 0.75%), 2.08%, 03/25/34(c) | | | | | | | 49 | | | | 48,937 | |
Series 2005-11, Class AF4, 4.63%, 03/25/34(e) | | | | | | | 700 | | | | 701,936 | |
Drive Auto Receivables Trust, Class C: | | | | | | | | | | | | |
Series 2016-CA, 3.02%, 11/15/21(d) | | | | | | | 800 | | | | 807,339 | |
Series 2017-1, 2.84%, 04/15/22 | | | | | | | 800 | | | | 804,225 | |
Series 2017-2, 2.75%, 09/15/23 | | | | | | | 590 | | | | 591,579 | |
Series 2017-3, 2.80%, 07/15/22 | | | | | | | 400 | | | | 400,800 | |
Exeter Automobile Receivables Trust(d): | | | | | | | | | | | | |
Series 2015-1A, Class C, 4.10%, 12/15/20 | | | | | | | 300 | | | | 304,197 | |
Series 2017-2A, Class A, 2.11%, 06/15/21 | | | | | | | 445 | | | | 445,310 | |
GSAA Home Equity Trust, Series 2005-5, Class M3, (1 mo. LIBOR US + 0.95%), 2.27%, 02/25/35(c) | | | | | | | 158 | | | | 156,194 | |
Home Equity Mortgage Trust, Series 2004-4, Class M3, (1 mo. LIBOR US + 0.98%), 2.30%, 12/25/34(c) | | | | | | | 98 | | | | 97,909 | |
Invitation Homes Trust(c)(d): | | | | | | | | | | | | |
Series 2015-SFR1, Class B, (1 mo. LIBOR + 1.85%), 3.10%, 03/17/32 | | | | | | | 350 | | | | 351,650 | |
Series 2015-SFR2, Class C, (1 mo. LIBOR + 2.00%), 3.27%, 06/17/32 | | | | | | | 110 | | | | 110,739 | |
Series 2015-SFR3, Class C, (1 mo. LIBOR + 2.00%), 3.25%, 08/17/32 | | | | | | | 500 | | | | 503,507 | |
Marlette Funding Trust, Class A(d): | | | | | | | | | | | | |
Series 2017-1A, 2.83%, 03/15/24 | | | | | | | 412 | | | | 413,405 | |
Series 2017-2A, 2.39%, 07/15/24 | | | | | | | 597 | | | | 597,879 | |
Morgan Stanley ABS Capital I Trust, Inc.,
Series 2005-WMC1, Class M2, (1 mo. LIBOR US + 0.74%), 2.06%, 01/25/35(c) | | | | | | | 29 | | | | 28,847 | |
| | | | | | | | | | | | |
| Security | | Par
(000) | | | Value | |
National Collegiate Student Loan Trust(c): | | | | | | | | | | | | |
Series 2006-2, Class A3, (1 mo. LIBOR US + 0.21%), 1.54%, 11/25/27 | | | USD | | | | 582 | | | $ | 572,302 | |
Series 2006-3, Class A4, (1 mo. LIBOR US + 0.27%), 1.60%, 03/26/29 | | | | | | | 726 | | | | 712,218 | |
Series 2007-1, Class A3, (1 mo. LIBOR US + 0.24%), 1.57%, 07/25/30 | | | | | | | 732 | | | | 712,062 | |
Series 2007-2, Class A2, (1 mo. LIBOR US + 0.13%), 1.46%, 06/26/28 | | | | | | | 229 | | | | 228,512 | |
Santander Drive Auto Receivables Trust: | | | | | | | | | | | | |
Series 2016-1, Class C, 3.09%, 04/15/22 | | | | | | | 750 | | | | 758,263 | |
Series 2017-2, Class B, 2.21%, 10/15/21 | | | | | | | 1,300 | | | | 1,301,399 | |
Series 2017-2, Class C, 2.79%, 08/15/22 | | | | | | | 730 | | | | 728,643 | |
SLM Private Education Loan Trust, Series 2011-B, Class A2, 3.74%, 02/15/29(d) | | | | | | | 277 | | | | 280,401 | |
SoFi Consumer Loan Program LLC, Class A(d): | | | | | | | | | | | | |
Series 2017-3, 2.77%, 05/25/26 | | | | | | | 473 | | | | 475,048 | |
Series 2017-4, 2.50%, 05/26/26 | | | | | | | 639 | | | | 636,745 | |
Trafigura Securitisation Finance PLC, Series 2017-1A, Class A1, (1 mo. LIBOR US + 0.85%), 2.10%, 12/15/20(c)(d) | | | | | | | 750 | | | | 752,997 | |
| | | | | | | | |
Total Asset-Backed Securities — 14.1%
(Cost — $17,974,389) | | | | 18,016,300 | |
| | | | | | | | |
|
Corporate Bonds — 52.0% | |
|
| Aerospace & Defense — 1.2% | |
General Dynamics Corp., 2.63%, 11/15/27 | | | | | | | 200 | | | | 192,736 | |
L-3 Communications Corp., 4.75%, 07/15/20 | | | | | | | 500 | | | | 527,448 | |
Lockheed Martin Corp., 4.09%, 09/15/52 | | | | | | | 150 | | | | 153,764 | |
Northrop Grumman Corp.: | | | | | | | | | | | | |
2.93%, 01/15/25 | | | | | | | 205 | | | | 203,944 | |
3.25%, 01/15/28 | | | | | | | 185 | | | | 185,049 | |
Rockwell Collins, Inc., 2.80%, 03/15/22 | | | | | | | 290 | | | | 291,104 | |
| | | | | | | | |
| | | | | | | | | | | 1,554,045 | |
| Auto Components — 0.4% | | | | | | | | | |
Fiat Chrysler Automobiles NV, 4.50%, 04/15/20 | | | | | | | 200 | | | | 206,310 | |
Lear Corp., 3.80%, 09/15/27 | | | | | | | 300 | | | | 299,596 | |
| | | | | | | | |
| | | | | | | | | | | 505,906 | |
| Banks — 4.2% | | | | | | | | | |
Banco Santander SA, 3.50%, 04/11/22 | | | | | | | 400 | | | | 407,543 | |
Capital One Financial Corp.: | | | | | | | | | | | | |
2.50%, 05/12/20 | | | | | | | 125 | | | | 124,968 | |
2.40%, 10/30/20 | | | | | | | 175 | | | | 174,133 | |
Capital One NA/Mclean VA, 2.65%, 08/08/22 | | | | | | | 300 | | | | 296,453 | |
Discover Bank, 3.10%, 06/04/20 | | | | | | | 1,000 | | | | 1,013,191 | |
HSBC Bank USA NA, 4.88%, 08/24/20 | | | | | | | 400 | | | | 424,762 | |
HSBC Holdings PLC: | | | | | | | | | | | | |
3.60%, 05/25/23 | | | | | | | 800 | | | | 825,091 | |
4.30%, 03/08/26 | | | | | | | 400 | | | | 424,661 | |
National Bank of Canada, 2.15%, 06/12/20 | | | | | | | 300 | | | | 298,562 | |
SVB Financial Group, 3.50%, 01/29/25 | | | | | | | 300 | | | | 300,986 | |
Wells Fargo & Co., 2.50%, 03/04/21 | | | | | | | 500 | | | | 499,764 | |
Westpac Banking Corp., 2.25%, 11/09/20(d) | | | | | | | 600 | | | | 598,742 | |
| | | | | | | | |
| | | | | | | | | | | 5,388,856 | |
| Beverages — 0.6% | | | | | | | | | |
Anheuser-Busch InBev Worldwide, Inc., 5.38%, 01/15/20 | | | | | | | 400 | | | | 426,006 | |
Constellation Brands, Inc., 3.70%, 12/06/26 | | | | | | | 300 | | | | 306,785 | |
| | | | | | | | |
| | | | | | | | | | | 732,791 | |
| | |
| 18 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
| | |
Schedule of Investments (unaudited) (continued) November 30, 2017 | | FDP BlackRock CoreAlpha Bond Fund (Percentages shown are based on Net Assets) |
| | | | | | | | | | | | |
| Security | | Par
(000) | | | Value | |
| Biotechnology — 0.9% | |
Baxalta, Inc., 3.60%, 06/23/22 | | | USD | | | | 400 | | | $ | 410,699 | |
Celgene Corp., 2.25%, 08/15/21 | | | | | | | 400 | | | | 392,593 | |
Gilead Sciences, Inc., 2.55%, 09/01/20 | | | | | | | 400 | | | | 403,673 | |
| | | | | | | | |
| | | | | | | | | | | 1,206,965 | |
| Capital Markets — 4.8% | |
Goldman Sachs Group, Inc.: | | | | | | | | | | | | |
2.75%, 09/15/20 | | | | | | | 1,650 | | | | 1,658,697 | |
3.75%, 05/22/25 | | | | | | | 300 | | | | 307,547 | |
3.27%, 09/29/25(e) | | | | | | | 200 | | | | 198,353 | |
3.75%, 02/25/26 | | | | | | | 1,100 | | | | 1,126,016 | |
Jefferies Group LLC, 4.85%, 01/15/27 | | | | | | | 400 | | | | 420,516 | |
Morgan Stanley: | | | | | | | | | | | | |
2.65%, 01/27/20 | | | | | | | 500 | | | | 503,117 | |
5.50%, 07/24/20 | | | | | | | 400 | | | | 429,965 | |
2.75%, 05/19/22 | | | | | | | 200 | | | | 199,678 | |
3.88%, 01/27/26 | | | | | | | 600 | | | | 622,729 | |
4.30%, 01/27/45 | | | | | | | 500 | | | | 526,571 | |
TD Ameritrade Holding Corp., 3.30%, 04/01/27 | | | | | | | 125 | | | | 126,139 | |
| | | | | | | | |
| | | | | | | | | | | 6,119,328 | |
| Chemicals — 0.6% | |
EI du Pont de Nemours & Co., 2.20%, 05/01/20 | | | | | | | 75 | | | | 74,835 | |
LYB International Finance BV, 4.00%, 07/15/23 | | | | | | | 700 | | | | 730,430 | |
| | | | | | | | |
| | | | | | | | | | | 805,265 | |
| Commercial Services & Supplies — 0.4% | |
Aviation Capital Group Corp., 6.75%, 04/06/21(d) | | | | | | | 300 | | | | 335,192 | |
Park Aerospace Holdings Ltd., 5.50%, 02/15/24(d) | | | | | | | 200 | | | | 204,750 | |
| | | | | | | | |
| | | | | | | | | | | 539,942 | |
| Communications Equipment — 0.3% | |
CommScope Technologies LLC, 5.00%, 03/15/27(d) | | | | | | | 400 | | | | 400,000 | |
| | | | | | | | |
| Construction Materials — 0.2% | |
Allegion US Holding Co., Inc., 3.55%, 10/01/27 | | | | | | | 300 | | | | 298,254 | |
| | | | | | | | |
| Consumer Discretionary — 0.1% | |
Royal Caribbean Cruises, Ltd., 2.65%, 11/28/20 | | | | | | | 65 | | | | 65,053 | |
| | | | | | | | |
| Consumer Finance — 2.8% | |
American Express Co., 2.50%, 08/01/22 | | | | | | | 250 | | | | 246,688 | |
American Express Credit Corp., 1.88%, 05/03/19 | | | | | | | 125 | | | | 124,576 | |
Autodesk, Inc., 3.50%, 06/15/27 | | | | | | | 305 | | | | 302,032 | |
CDK Global, Inc., 4.88%, 06/01/27(d) | | | | | | | 60 | | | | 61,800 | |
Ford Motor Credit Co. LLC: | | | | | | | | | | | | |
2.43%, 06/12/20 | | | | | | | 245 | | | | 243,967 | |
3.16%, 08/04/20 | | | | | | | 1,000 | | | | 1,014,931 | |
Synchrony Financial, 2.70%, 02/03/20 | | | | | | | 900 | | | | 901,420 | |
Visa, Inc.: | | | | | | | | | | | | |
2.75%, 09/15/27 | | | | | | | 300 | | | | 294,306 | |
4.15%, 12/14/35 | | | | | | | 400 | | | | 437,685 | |
| | | | | | | | |
| | | | | | | | | | | 3,627,405 | |
| Containers & Packaging — 0.2% | |
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer Lu(d): | | | | | | | | | | | | |
5.13%, 07/15/23 | | | | | | | 100 | | | | 103,750 | |
7.00%, 07/15/24 | | | | | | | 100 | | | | 107,292 | |
| | | | | | | | |
| | | | | | | | | | | 211,042 | |
| Diversified Financial Services — 6.0% | |
AerCap Ireland Capital Ltd./AerCap Global Aviation Trust, 4.25%, 07/01/20 | | | | | | | 250 | | | | 259,584 | |
Bank of America Corp.: | | | | | | | | | | | | |
5.63%, 07/01/20 | | | | | | | 500 | | | | 539,460 | |
3.88%, 08/01/25 | | | | | | | 300 | | | | 314,507 | |
Capital One Bank USA NA, 3.38%, 02/15/23 | | | | | | | 500 | | | | 505,447 | |
| | | | | | | | | | | | |
| Security | | Par
(000) | | | Value | |
| Diversified Financial Services (continued) | | | | | | | | | |
Citigroup, Inc.: | | | | | | | | | | | | |
2.45%, 01/10/20 | | | USD | | | | 500 | | | $ | 500,351 | |
2.65%, 10/26/20 | | | | | | | 400 | | | | 401,415 | |
(3 mo. LIBOR US + 1.39%), 3.67%, 07/24/28(f) | | | | | | | 200 | | | | 202,664 | |
Deutsche Bank AG, 3.30%, 11/16/22 | | | | | | | 300 | | | | 299,680 | |
General Motors Financial Co., Inc.: | | | | | | | | | | | | |
2.65%, 04/13/20 | | | | | | | 400 | | | | 400,661 | |
3.20%, 07/13/20 | | | | | | | 400 | | | | 405,791 | |
5.25%, 03/01/26 | | | | | | | 1,000 | | | | 1,086,037 | |
HSBC Holdings PLC, 3.03%, 11/22/23(e) | | | | | | | 200 | | | | 200,984 | |
JPMorgan Chase & Co.: | | | | | | | | | | | | |
2.40%, 06/07/21 | | | | | | | 500 | | | | 497,905 | |
(3 mo. LIBOR US + 1.16%), 3.22%, 03/01/25(f) | | | | | | | 300 | | | | 301,580 | |
3.30%, 04/01/26 | | | | | | | 1,600 | | | | 1,603,809 | |
ORIX Corp., 2.90%, 07/18/22 | | | | | | | 80 | | | | 79,848 | |
| | | | | | | | |
| | | | | | | | | | | 7,599,723 | |
| Diversified Telecommunication Services — 2.1% | |
AT&T, Inc.: | | | | | | | | | | | | |
2.45%, 06/30/20 | | | | | | | 500 | | | | 498,878 | |
2.85%, 02/14/23 | | | | | | | 135 | | | | 133,798 | |
3.40%, 08/14/24 | | | | | | | 200 | | | | 199,316 | |
3.95%, 01/15/25 | | | | | | | 400 | | | | 407,313 | |
4.50%, 05/15/35 | | | | | | | 500 | | | | 487,552 | |
Verizon Communications, Inc.: | | | | | | | | | | | | |
3.38%, 02/15/25(d) | | | | | | | 419 | | | | 418,629 | |
4.50%, 08/10/33 | | | | | | | 400 | | | | 413,288 | |
4.52%, 09/15/48 | | | | | | | 100 | | | | 97,311 | |
| | | | | | | | |
| | | | | | | | | | | 2,656,085 | |
| Electric Utilities — 1.7% | |
Dominion Resources, Inc., 3.90%, 10/01/25 | | | | | | | 600 | | | | 626,315 | |
Eversource Energy, Series L, 2.90%, 10/01/24 | | | | | | | 170 | | | | 168,474 | |
Public Service Electric & Gas Co., 3.00%, 05/15/27 | | | | | | | 500 | | | | 497,167 | |
Southern Co., 3.25%, 07/01/26 | | | | | | | 800 | | | | 786,022 | |
Virginia Electric & Power Co., Series C, 2.75%, 03/15/23 | | | | | | | 60 | | | | 59,883 | |
| | | | | | | | |
| | | | | | | | | | | 2,137,861 | |
| Electronic Equipment, Instruments & Components — 0.1% | |
Arrow Electronics, Inc., 3.25%, 09/08/24 | | | | | | | 85 | | | | 83,744 | |
Tyco Electronics Group SA, 3.13%, 08/15/27 | | | | | | | 40 | | | | 39,365 | |
| | | | | | | | |
| | | | | | | | | | | 123,109 | |
| Energy Equipment & Services — 0.4% | |
CNOOC Finance 2013 Ltd., 3.00%, 05/09/23 | | | | | | | 500 | | | | 497,068 | |
| | | | | | | | |
| Food & Staples Retailing — 0.3% | |
Lamb Weston Holdings, Inc.(d): | | | | | | | | | | | | |
4.63%, 11/01/24 | | | | | | | 100 | | | | 103,375 | |
4.88%, 11/01/26 | | | | | | | 100 | | | | 105,250 | |
McCormick & Co., Inc., 2.70%, 08/15/22 | | | | | | | 180 | | | | 179,720 | |
| | | | | | | | |
| | | | | | | | | | | 388,345 | |
| Food Products — 0.8% | |
Kraft Heinz Foods Co., 3.50%, 07/15/22 | | | | | | | 1,000 | | | | 1,022,150 | |
| | | | | | | | |
| Health Care Equipment & Supplies — 2.4% | |
Abbott Laboratories: | | | | | | | | | | | | |
2.35%, 11/22/19 | | | | | | | 500 | | | | 500,565 | |
3.75%, 11/30/26 | | | | | | | 250 | | | | 254,418 | |
Baxter International, Inc., 2.60%, 08/15/26 | | | | | | | 250 | | | | 238,416 | |
Becton Dickinson & Co.: | | | | | | | | | | | | |
2.40%, 06/05/20 | | | | | | | 110 | | | | 109,354 | |
2.89%, 06/06/22 | | | | | | | 105 | | | | 104,167 | |
3.36%, 06/06/24 | | | | | | | 667 | | | | 666,654 | |
Boston Scientific Corp., 6.00%, 01/15/20 | | | | | | | 500 | | | | 536,101 | |
| | | | |
| SCHEDULES OF INVESTMENTS | | | 19 | |
| | |
Schedule of Investments (unaudited) (continued) November 30, 2017 | | FDP BlackRock CoreAlpha Bond Fund (Percentages shown are based on Net Assets) |
| | | | | | | | | | | | |
| Security | | Par
(000) | | | Value | |
| Health Care Equipment & Supplies (continued) | |
Stryker Corp.: | | | | | | | | | | | | |
3.50%, 03/15/26 | | | USD | | | | 100 | | | $ | 102,849 | |
4.63%, 03/15/46 | | | | | | | 100 | | | | 111,605 | |
Zimmer Holdings, Inc., 2.70%, 04/01/20 | | | | | | | 500 | | | | 500,502 | |
| | | | | | | | |
| | | | | | | | | | | 3,124,631 | |
| Health Care Providers & Services — 0.9% | |
Anthem, Inc., 3.35%, 12/01/24 | | | | | | | 285 | | | | 286,713 | |
HCA, Inc., 5.88%, 05/01/23 | | | | | | | 200 | | | | 212,000 | |
MPH Acquisition Holdings LLC, 7.13%, 06/01/24(d) | | | | | | | 100 | | | | 107,375 | |
UnitedHealth Group, Inc., 3.10%, 03/15/26 | | | | | | | 600 | | | | 602,773 | |
| | | | | | | | |
| | | | | | | | | | | 1,208,861 | |
| Hotels, Restaurants & Leisure — 1.9% | |
KFC Holding Co./Pizza Hut Holdings LLC/Taco Bell of America LLC, 5.00%, 06/01/24(d) | | | | | | | 200 | | | | 209,500 | |
McDonald’s Corp.: | | | | | | | | | | | | |
2.63%, 01/15/22 | | | | | | | 2,000 | | | | 2,009,767 | |
4.70%, 12/09/35 | | | | | | | 200 | | | | 222,358 | |
| | | | | | | | |
| | | | | | | | | | | 2,441,625 | |
| Household Durables — 0.2% | |
PulteGroup, Inc., 5.00%, 01/15/27 | | | | | | | 300 | | | | 315,690 | |
| | | | | | | | |
| Household Products — 0.4% | |
Procter & Gamble Co., 2.45%, 11/03/26 | | | | | | | 500 | | | | 481,943 | |
| | | | | | | | |
| Industrial Conglomerates — 0.2% | |
Vertiv Group Corp., 9.25%, 10/15/24(d) | | | | | | | 200 | | | | 217,250 | |
| | | | | | | | |
| Insurance — 0.6% | |
Aflac, Inc., 3.63%, 06/15/23 | | | | | | | 500 | | | | 520,589 | |
Willis North America, Inc., 3.60%, 05/15/24 | | | | | | | 200 | | | | 203,595 | |
| | | | | | | | |
| | | | | | | | | | | 724,184 | |
| Internet Software & Services — 0.6% | |
eBay, Inc., 2.75%, 01/30/23 | | | | | | | 300 | | | | 297,032 | |
Expedia, Inc., 5.00%, 02/15/26 | | | | | | | 400 | | | | 429,057 | |
| | | | | | | | |
| | | | | | | | | | | 726,089 | |
| IT Services — 1.7% | |
Alibaba Group Holding Ltd., 4.50%, 11/28/34 | | | | | | | 300 | | | | 327,092 | |
Dell International LLC/EMC Corp., 3.48%, 06/01/19(d) | | | | | | | 500 | | | | 506,383 | |
DXC Technology Co., 4.25%, 04/15/24 | | | | | | | 300 | | | | 313,104 | |
First Data Corp., 5.00%, 01/15/24(d) | | | | | | | 200 | | | | 207,000 | |
Fiserv, Inc., 3.85%, 06/01/25 | | | | | | | 500 | | | | 521,111 | |
Xerox Corp., 3.63%, 03/15/23 | | | | | | | 300 | | | | 291,292 | |
| | | | | | | | |
| | | | | | | | | | | 2,165,982 | |
| Machinery — 0.2% | |
CNH Industrial Capital LLC, 3.88%, 10/15/21 | | | | | | | 100 | | | | 102,250 | |
Terex Corp., 5.63%, 02/01/25(d) | | | | | | | 100 | | | | 105,562 | |
| | | | | | | | |
| | | | | | | | | | | 207,812 | |
| Media — 1.9% | |
Altice US Finance I Corp., 5.50%, 05/15/26(d) | | | | | | | 300 | | | | 303,750 | |
Charter Communications Operating LLC/Charter Communications Operating Capital: | | | | | | | | | | | | |
3.58%, 07/23/20 | | | | | | | 1,000 | | | | 1,016,233 | |
6.48%, 10/23/45 | | | | | | | 200 | | | | 229,993 | |
Hughes Satellite Systems Corp., 6.63%, 08/01/26 | | | | | | | 200 | | | | 209,250 | |
Nexstar Broadcasting, Inc., 5.63%, 08/01/24(d) | | | | | | | 100 | | | | 102,250 | |
Time Warner, Inc., 4.05%, 12/15/23 | | | | | | | 600 | | | | 628,843 | |
| | | | | | | | |
| | | | | | | | | | | 2,490,319 | |
| Metals & Mining — 0.7% | |
ArcelorMittal, 6.00%, 03/01/21 | | | | | | | 200 | | | | 215,776 | |
Southern Copper Corp., 5.88%, 04/23/45 | | | | | | | 150 | | | | 181,861 | |
| | | | | | | | | | | | |
| Security | | Par
(000) | | | Value | |
| Metals & Mining (continued) | |
Vale Overseas Ltd., 6.25%, 08/10/26 | | | USD | | | | 400 | | | $ | 463,956 | |
| | | | | | | | |
| | | | | | | | | | | 861,593 | |
| Multi-Utilities — 0.4% | |
Dominion Energy, Inc., 2.58%, 07/01/20 | | | | | | | 40 | | | | 40,022 | |
Sempra Energy, 3.75%, 11/15/25 | | | | | | | 400 | | | | 411,680 | |
| | | | | | | | |
| | | | | | | | | | | 451,702 | |
| Office Supplies & Equipment — 0.5% | |
VMware, Inc.: | | | | | | | | | | | | |
2.30%, 08/21/20 | | | | | | | 80 | | | | 79,620 | |
2.95%, 08/21/22 | | | | | | | 250 | | | | 247,804 | |
3.90%, 08/21/27 | | | | | | | 300 | | | | 301,270 | |
| | | | | | | | |
| | | | | | | | | | | 628,694 | |
| Oil, Gas & Consumable Fuels — 2.3% | |
Calumet Specialty Products Partners LP/Calumet Finance Corp., 11.50%, 01/15/21(d) | | | | | | | 100 | | | | 114,750 | |
Cheniere Corpus Christi Holdings LLC: | | | | | | | | | | | | |
7.00%, 06/30/24 | | | | | | | 100 | | | | 113,500 | |
5.88%, 03/31/25 | | | | | | | 100 | | | | 108,375 | |
Enable Oklahoma Intrastate Transmission LLC, 6.25%, 03/15/20(d) | | | | | | | 400 | | | | 422,933 | |
Energy Transfer Equity LP, 7.50%, 10/15/20 | | | | | | | 200 | | | | 222,000 | |
ONEOK Partners LP, 4.90%, 03/15/25 | | | | | | | 53 | | | | 56,711 | |
ONEOK, Inc., 4.00%, 07/13/27 | | | | | | | 225 | | | | 225,281 | |
Petroleos Mexicanos, 6.75%, 09/21/47 | | | | | | | 200 | | | | 211,480 | |
Sabine Pass Liquefaction LLC: | | | | | | | | | | | | |
5.75%, 05/15/24 | | | | | | | 200 | | | | 221,736 | |
5.88%, 06/30/26 | | | | | | | 200 | | | | 224,347 | |
5.00%, 03/15/27 | | | | | | | 200 | | | | 212,978 | |
Valero Energy Corp., 3.40%, 09/15/26 | | | | | | | 250 | | | | 247,489 | |
Williams Partners LP, 4.30%, 03/04/24 | | | | | | | 500 | | | | 524,056 | |
| | | | | | | | |
| | | | | | | | | | | 2,905,636 | |
| Paper & Forest Products — 0.1% | |
Masco Corp., 3.50%, 11/15/27 | | | | | | | 175 | | | | 171,889 | |
| | | | | | | | |
| Pharmaceuticals — 1.9% | |
Actavis Funding SCS, 3.00%, 03/12/20 | | | | | | | 400 | | | | 403,633 | |
Johnson & Johnson, 2.95%, 03/03/27 | | | | | | | 752 | | | | 756,857 | |
Novartis Capital Corp., 3.40%, 05/06/24 | | | | | | | 1,000 | | | | 1,039,477 | |
Pfizer, Inc., 4.13%, 12/15/46 | | | | | | | 100 | | | | 107,173 | |
Valeant Pharmaceuticals International, Inc., 6.13%, 04/15/25(d) | | | | | | | 200 | | | | 171,500 | |
| | | | | | | | |
| | | | | | | | | | | 2,478,640 | |
| Real Estate Investment Trusts (REITs) — 0.8% | |
Hospitality Properties Trust, 4.50%, 06/15/23 | | | | | | | 135 | | | | 141,629 | |
MPT Operating Partnership LP/MPT Finance Corp., 5.25%, 08/01/26 | | | | | | | 100 | | | | 105,375 | |
Omega Healthcare Investors, Inc., 4.95%, 04/01/24 | | | | | | | 300 | | | | 313,305 | |
Wyndham Worldwide Corp., 4.15%, 04/01/24 | | | | | | | 500 | | | | 502,372 | |
| | | | | | | | |
| | | | | | | | | | | 1,062,681 | |
| Semiconductors & Semiconductor Equipment — 2.1% | |
Broadcom Corp./Broadcom Cayman Finance Ltd., 3.63%, 01/15/24(d) | | | | | | | 1,200 | | | | 1,186,858 | |
Maxim Integrated Products, Inc., 3.38%, 03/15/23 | | | | | | | 1,000 | | | | 1,011,417 | |
NVIDIA Corp., 3.20%, 09/16/26 | | | | | | | 500 | | | | 499,002 | |
| | | | | | | | |
| | | | | | | | | | | 2,697,277 | |
| Software — 0.1% | |
MSCI, Inc., 4.75%, 08/01/26(d) | | | | | | | 100 | | | | 105,730 | |
| | | | | | | | |
| Technology Hardware, Storage & Peripherals — 1.0% | |
Hewlett Packard Enterprise Co.: | | | | | | | | | | | | |
2.10%, 10/04/19(d) | | | | | | | 115 | | | | 114,202 | |
3.60%, 10/15/20 | | | | | | | 1,000 | | | | 1,024,351 | |
| | |
| 20 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
| | |
Schedule of Investments (unaudited) (continued) November 30, 2017 | | FDP BlackRock CoreAlpha Bond Fund (Percentages shown are based on Net Assets) |
| | | | | | | | | | | | |
| Security | | Par
(000) | | | Value | |
| Technology Hardware, Storage & Peripherals (continued) | |
Western Digital Corp., 7.38%, 04/01/23(d) | | | USD | | | | 100 | | | $ | 108,750 | |
| | | | | | | | |
| | | | | | | | | | | 1,247,303 | |
| Tobacco — 1.4% | | | | | | | | | |
Altria Group, Inc.: | | | | | | | | | | | | |
2.63%, 01/14/20 | | | | | | | 500 | | | | 503,951 | |
3.88%, 09/16/46 | | | | | | | 100 | | | | 97,454 | |
BAT Capital Corp.(d): | | | | | | | | | | | | |
2.30%, 08/14/20 | | | | | | | 285 | | | | 283,483 | |
2.76%, 08/15/22 | | | | | | | 255 | | | | 252,874 | |
3.22%, 08/15/24 | | | | | | | 200 | | | | 199,348 | |
Philip Morris International, Inc., 4.25%, 11/10/44 | | | | | | | 100 | | | | 103,319 | |
Reynolds American, Inc., 5.70%, 08/15/35 | | | | | | | 300 | | | | 351,282 | |
| | | | | | | | |
| | | | | | | | | | | 1,791,711 | |
| Wireless Telecommunication Services — 1.6% | |
American Tower Corp.: | | | | | | | | | | | | |
3.50%, 01/31/23 | | | | | | | 500 | | | | 511,620 | |
4.40%, 02/15/26 | | | | | | | 400 | | | | 419,481 | |
Crown Castle International Corp.: | | | | | | | | | | | | |
5.25%, 01/15/23 | | | | | | | 600 | | | | 658,587 | |
3.20%, 09/01/24 | | | | | | | 125 | | | | 123,210 | |
Sprint Communications, Inc., 6.00%, 11/15/22 | | | | | | | 300 | | | | 303,000 | |
| | | | | | | | |
| | | | | | | | | | | 2,015,898 | |
| | | | | | | | |
Total Corporate Bonds — 52.0%
(Cost — $65,740,131) | | | | 66,402,333 | |
| | | | | | | | |
|
Floating Rate Loan Interests — 0.0% | |
|
| Pharmaceuticals — 0.0% | |
Valeant Pharmaceuticals International, Inc., Series F1 Term Loan B, (1 mo. LIBOR + 4.75%), 6.00%, 04/01/22(g) | | | | | | | 18 | | | | 18,652 | |
| | | | | | | | |
Total Floating Rate Loan Interests — 0.3%
(Cost — $18,472) | | | | 18,652 | |
| | | | | | | | |
|
Foreign Agency Obligations — 0.7% | |
Colombia Government International Bond, 5.63%, 02/26/44 | | | | | | | 200 | | | | 227,100 | |
Mexico Government International Bond, 4.15%, 03/28/27 | | | | | | | 575 | | | | 602,025 | |
Uruguay Government International Bond, 5.10%, 06/18/50 | | | | | | | 100 | | | | 110,000 | |
| | | | | | | | |
Total Foreign Agency Obligations — 0.7%
(Cost — $903,094) | | | | 939,125 | |
| | | | | | | | |
|
Municipal Bonds — 0.7% | |
Port Authority of New York & New Jersey, ARB, 192nd Series | | | | | | | 200 | | | | 237,742 | |
Port Authority of New York & New Jersey, RB | | | | | | | 200 | | | | 219,028 | |
University of California, Refunding RB, Series J, 4.13%, 05/15/45 | | | | | | | 350 | | | | 365,778 | |
| | | | | | | | |
Total Municipal Bonds — 0.7%
(Cost — $750,000) | | | | 822,548 | |
| | | | | | | | |
|
Non-Agency Mortgage-Backed Securities — 2.0% | |
|
| Collateralized Mortgage Obligations — 0.2% | |
American Home Mortgage Investment Trust, Series 2004-3, Class 4A, (6 mo. LIBOR US + 1.50%), 3.01%, 10/25/34(c) | | | | | | | 93 | | | | 91,876 | |
| | | | | | | | | | | | |
| Security | | Par
(000) | | | Value | |
| Collateralized Mortgage Obligations (continued) | |
Bear Stearns Alternative A Trust, Series 2004-13, Class A2, (1 mo. LIBOR US + 0.88%), 2.21%, 11/25/34(c) | | | USD | | | | 27 | | | $ | 26,614 | |
Citigroup Mortgage Loan Trust, Series 2013-A, Class A, 3.00%, 05/25/42(d)(e) | | | | | | | 49 | | | | 49,020 | |
Credit Suisse First Boston Mortgage Securities Corp., Series 2004-6, Class 3A1, 5.00%, 09/25/19 | | | | | | | 20 | | | | 20,357 | |
Credit Suisse Mortgage Capital Certificates, Series 2009-15R, Class 3A1, 3.17%, 03/26/36(d)(e) | | | | | | | 91 | | | | 91,334 | |
Wells Fargo Mortgage-Backed Securities Trust: | | | | | | | | | | | | |
Series 2004-W, Class A9, 3.71%, 11/25/34(e) | | | | | | | 63 | | | | 64,403 | |
Series 2007-3, Class 3A1, 5.50%, 04/25/22 | | | | | | | 9 | | | | 8,838 | |
| | | | | | | | |
| | | | | | | | | | | 352,442 | |
| Commercial Mortgage-Backed Securities — 1.8% | |
Banc of America Merrill Lynch Commercial Mortgage, Inc., Series 2006-4, Class AJ, 5.70%, 07/10/46(e) | | | | | | | 59 | | | | 59,888 | |
Bear Stearns Commercial Mortgage Securities Trust, Series 2005-T20, Class E, 5.27%, 10/12/42(e) | | | | | | | 800 | | | | 727,849 | |
Citigroup Commercial Mortgage Trust, Series 2006-C5, Class AJ, 5.48%, 10/15/49 | | | | | | | 76 | | | | 70,631 | |
Colony Multifamily Mortgage Trust, Series 2014-1, Class A, 2.54%, 04/20/50(d) | | | | | | | 144 | | | | 143,599 | |
Core Industrial Trust, Series 2015-CALW, Class A, 3.04%, 02/10/34(d) | | | | | | | 400 | | | | 407,377 | |
Eleven Madison Avenue Mortgage Trust, Series 2015-11MD, Class A, 3.67%, 09/10/35(d)(e) | | | | | | | 150 | | | | 154,518 | |
GE Commercial Mortgage Corp., Series 2007-C1, Class AM, 5.61%, 12/10/49(e) | | | | | | | 170 | | | | 172,222 | |
Greenwich Capital Commercial Funding Corp. Commercial Mortgage Trust, Series 2006-GG7(e): | | | | | | | | | | | | |
Class AJ, 5.96%, 07/10/38 | | | | | | | 382 | | | | 357,168 | |
Class AM, 5.96%, 07/10/38 | | | | | | | 79 | | | | 79,267 | |
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2006-CB16, Class B, 5.67%, 05/12/45(e) | | | | | | | 210 | | | | 27,767 | |
Morgan Stanley Capital I Trust, Series 2007-IQ16, Class AM, 6.32%, 12/12/49(e) | | | | | | | 37 | | | | 36,649 | |
| | | | | | | | |
| | | | | | | | | | | 2,236,935 | |
| | | | | | | | |
Total Non-Agency Mortgage-Backed Securities — 2.0%
(Cost — $2,748,176) | | | | 2,589,377 | |
| | | | | | | | |
|
Preferred Securities — 0.3% | |
|
| Capital Trusts — 0.3% | |
| Diversified Financial Services — 0.3% | |
JPMorgan Chase & Co., Series X, 6.10%(f)(h) | | | | | | | 300 | | | | 331,313 | |
| | | | | | | | |
Total Preferred Securities — 0.3%
(Cost — $300,000) | | | | 331,313 | |
| | | | | | | | |
|
U.S. Government Sponsored Agency Securities — 39.4% | |
| | | |
| Agency Obligations — 0.9% | | | | | | | | | |
Freddie Mac, 6.25%, 07/15/32: | | | | | | | 800 | | | | 1,119,742 | |
| | | | | | | | |
| Collateralized Mortgage Obligations — 7.2% | |
Fannie Mae Connecticut Avenue Securities: | | | | | | | | | | | | |
Series 2017-C05, Class 1M2A, (1 mo. LIBOR US + 2.20%), 3.53%, 01/25/30(c) | | | | | | | 250 | | | | 255,784 | |
Series 2017-C07, Class 2M2A, 3.74%, 05/25/30(e) | | | | | | | 250 | | | | 258,950 | |
Series 2014-C03, Class 2M2, (1 mo. LIBOR US + 2.90%), 4.23%, 07/25/24(c) | | | | | | | 116 | | | | 122,330 | |
Series 2016-C05, Class 2M2, (1 mo. LIBOR US + 4.45%), 5.78%, 01/25/29(c) | | | | | | | 120 | | | | 132,475 | |
| | | | |
| SCHEDULES OF INVESTMENTS | | | 21 | |
| | |
Schedule of Investments (unaudited) (continued) November 30, 2017 | | FDP BlackRock CoreAlpha Bond Fund (Percentages shown are based on Net Assets) |
| | | | | | | | | | | | |
| Security | | Par
(000) | | | Value | |
| Collateralized Mortgage Obligations (continued) | |
Fannie Mae Connecticut Avenue Securities (continued): | | | | | | | | | | | | |
Series 2015-C01, Class 2M2, (1 mo. LIBOR US + 4.55%), 5.88%, 02/25/25(c) | | | USD | | | | 551 | | | $ | 589,752 | |
Series 2014-C04, Class 1M2, (1 mo. LIBOR US + 4.90%), 6.23%, 11/25/24(c) | | | | | | | 101 | | | | 114,689 | |
Series 2014-C04, Class 1M2, (1 mo. LIBOR US + 5.00%), 6.33%, 11/25/24(c) | | | | | | | 202 | | | | 225,805 | |
Freddie Mac Structured Agency Credit Risk Debt Notes: | | | | | | | | | | | | |
Series 2016-DNA1, Class M2, (1 mo. LIBOR US + 2.90%), 4.23%, 07/25/28(c) | | | | | | | 250 | | | | 257,791 | |
Series 2017-DNA3, Class M1, 2.08%, 03/25/30(e) | | | | | | | 347 | | | | 347,767 | |
Series 2016-HQA3, Class M2, (1 mo. LIBOR US + 1.35%), 2.68%, 03/25/29(c) | | | | | | | 250 | | | | 252,455 | |
Series 2014-DN1, Class M2, (1 mo. LIBOR US + 2.20%), 3.53%, 02/25/24(c) | | | | | | | 216 | | | | 222,712 | |
Series 2016-DNA2, Class M2, (1 mo. LIBOR US + 2.20%), 3.53%, 10/25/28(c) | | | | | | | 1,150 | | | | 1,165,820 | |
Series 2016-HQA2, Class M2, (1 mo. LIBOR US + 2.25%), 3.58%, 11/25/28(c) | | | | | | | 730 | | | | 749,642 | |
Series 2015-HQA1, Class M2, (1 mo. LIBOR US + 2.65%), 3.98%, 03/25/28(c) | | | | | | | 947 | | | | 970,734 | |
Series 2016-HQA1, Class M2, (1 mo. LIBOR US + 2.75%), 4.08%, 09/25/28(c) | | | | | | | 600 | | | | 616,101 | |
Series 2015-HQA2, Class M2, (1 mo. LIBOR US + 2.80%), 4.13%, 05/25/28(c) | | | | | | | 177 | | | | 182,273 | |
Series 2015-DNA3, Class M2, (1 mo. LIBOR US + 2.85%), 4.18%, 04/25/28(c) | | | | | | | 887 | | | | 917,568 | |
Series 2015-HQ1, Class M3, (1 mo. LIBOR US + 3.80%), 5.13%, 03/25/25(c) | | | | | | | 980 | | | | 1,057,317 | |
Series 2015-DN1, Class M3, (1 mo. LIBOR US + 4.15%), 5.48%, 01/25/25(c) | | | | | | | 500 | | | | 538,664 | |
Series 2014-DN4, Class M3, (1 mo. LIBOR US + 4.55%), 5.88%, 10/25/24(c) | | | | | | | 225 | | | | 246,852 | |
| | | | | | | | |
| | | | | | | | | | | 9,225,481 | |
| Commercial Mortgage-Backed Securities — 0.6% | |
Freddie Mac Multifamily Structured Pass-Through Certificates: | | | | | | | | | | | | |
Series K057, Class A2, 2.57%, 07/25/26 | | | | | | | 250 | | | | 244,944 | |
Series K062, Class A2, 3.41%, 12/25/26 | | | | | | | 520 | | | | 541,016 | |
| | | | | | | | |
| | | | | | | | | | | 785,960 | |
| Mortgage-Backed Securities — 30.7% | |
Fannie Mae Mortgage-Backed Securities: | | | | | | | | | | | | |
(11th District Cost of Funds + 1.25%), 1.98%, 9/01/34(c) | | | | | | | 222 | | | | 224,160 | |
(6 mo. LIBOR US + 1.10%), 2.58%, 5/01/33(c) | | | | | | | 10 | | | | 10,560 | |
(1 year CMT + 1.94%), 2.81%, 4/01/35(c) | | | | | | | 17 | | | | 17,251 | |
(6 mo. LIBOR US + 1.36%), 2.84%, 10/01/32(c) | | | | | | | 34 | | | | 34,747 | |
3.00%, 12/01/47(i) | | | | | | | 1,500 | | | | 1,496,200 | |
(12 mo. LIBOR US + 1.37%), 3.12%, 4/01/35(c) | | | | | | | 112 | | | | 116,792 | |
3.50%, 7/01/46 - 12/01/47(i) | | | | | | | 4,480 | | | | 4,595,086 | |
4.00%, 12/01/47(i) | | | | | | | 1,450 | | | | 1,514,910 | |
4.50%, 12/01/47(i) | | | | | | | 8,715 | | | | 9,269,730 | |
5.00%, 08/01/35 - 12/01/47(i) | | | | | | | 4,027 | | | | 4,354,234 | |
5.50%, 11/01/34 - 03/01/36 | | | | | | | 774 | | | | 862,031 | |
6.00%, 06/01/21 - 09/01/38 | | | | | | | 364 | | | | 410,361 | |
6.50%, 1/01/36 | | | | | | | 26 | | | | 28,792 | |
Freddie Mac Mortgage-Backed Securities: | | | | | | | | | | | | |
(11th District Cost of Funds + 1.25%), 1.98%, 11/01/27(c) | | | | | | | 111 | | | | 111,998 | |
(1 year CMT + 2.34%), 3.19%, 4/01/32(c) | | | | | | | 37 | | | | 39,027 | |
3.50%, 9/01/47 | | | | | | | 3,019 | | | | 3,096,950 | |
(12 mo. LIBOR US + 1.79%), 3.54%, 9/01/32(c) | | | | | | | 7 | | | | 7,515 | |
4.00%, 06/01/46 - 08/01/46 | | | | | | | 7,463 | | | | 7,797,803 | |
| | | | | | | | | | | | |
| Security | | Par (000)/
Shares | | | Value | |
| Mortgage-Backed Securities (continued) | |
Freddie Mac Mortgage-Backed Securities (continued): | | | | | | | | | | | | |
4.50%, 9/01/20 | | | USD | | | | 8 | | | $ | 7,657 | |
5.00%, 07/01/23 - 02/01/39 | | | | | | | 408 | | | | 443,405 | |
5.50%, 11/01/37 | | | | | | | 1 | | | | 1,001 | |
6.00%, 10/01/21 - 04/01/38 | | | | | | | 44 | | | | 47,186 | |
6.50%, 9/01/38 | | | | | | | 2 | | | | 2,406 | |
Ginnie Mae Mortgage-Backed Securities: | | | | | | | | | | | | |
3.00%, 12/01/47(i) | | | | | | | 125 | | | | 125,937 | |
3.50%, 4/20/47 - 12/01/47(i) | | | | | | | 3,820 | | | | 3,954,369 | |
4.00%, 12/01/47(i) | | | | | | | 225 | | | | 234,984 | |
4.50%, 12/01/47(i) | | | | | | | 200 | | | | 210,629 | |
6.50%, 12/20/37 - 07/15/38 | | | | | | | 96 | | | | 111,711 | |
| | | | | | | | |
| | | | | | | | | | | 39,127,432 | |
| | | | | | | | |
Total U.S. Government Sponsored Agency Securities — 39.4%
(Cost — $50,083,338) | | | | 50,258,615 | |
| | | | | | | | |
|
U.S. Treasury Obligations — 5.1% | |
U.S. Treasury Bonds: | | | | | | | | | | | | |
3.88%, 08/15/40 | | | | | | | 500 | | | | 594,824 | |
3.75%, 08/15/41 | | | | | | | 1,000 | | | | 1,169,609 | |
3.00%, 05/15/42 | | | | | | | 100 | | | | 103,656 | |
2.75%, 08/15/42 | | | | | | | 1,250 | | | | 1,238,037 | |
2.88%, 05/15/43 | | | | | | | 2,800 | | | | 2,831,063 | |
2.88%, 08/15/45 | | | | | | | 600 | | | | 605,133 | |
| | | | | | | | |
Total U.S. Treasury Obligations — 5.1%
(Cost — $6,304,448) | | | | 6,542,322 | |
| | | | | | | | |
Total Long-Term Investments — 114.3%
(Cost — $144,822,048) | | | | 145,920,585 | |
| | | | | | | | |
|
Short-Term Securities — 0.6% | |
| Money Market Funds — 0.5% | |
BlackRock Liquidity Funds, T-Fund, Institutional
Class, 1.33%(j)(k) | | | | | | | 614,979 | | | | 614,979 | |
| | | | | | | | |
|
| Time Deposits — 0.1% | |
| Europe — 0.1% | | | | | | | | | |
Brown Brother Harriman & Co., (0.57)%, 12/01/17 | | | EUR | | | | 110 | | | | 130,460 | |
| | | | | | | | |
Total Short-Term Securities — 0.6%
(Cost — $745,439) | | | | 745,439 | |
| | | | | | | | |
| |
Total Investments Before TBA Sale Commitments — 114.9%
(Cost — $145,567,487) | | | | 146,666,024 | |
| | | | | | | | |
|
TBA Sale Commitments — (0.9)% | |
|
| Mortgage-Backed Securities — (0.9%) | |
Fannie Mae Mortgage-Backed Securities(i): | | | | | | | | | | | | |
3.50%, 12/01/47 | | | USD | | | | 500 | | | | (512,676 | ) |
4.50%, 12/01/47 | | | | | | | 275 | | | | (292,504 | ) |
5.00%, 12/01/47 | | | | | | | 100 | | | | (108,110 | ) |
Government National Mortgage Association, 4.00%, 12/01/47(i) | | | | | | | 200 | | | | (208,875 | ) |
| | | | | | | | |
Total TBA Sale Commitments — (0.9)%
(Proceeds — $1,122,924) | | | | (1,122,165 | ) |
| | | | | | | | |
| |
Total Investments, Net of TBA Sale Commitments — 114.0%
(Cost — $144,444,563) | | | | 145,543,859 | |
Liabilities in Excess of Other Assets — (14.0)% | | | | (17,849,632 | ) |
| | | | | | | | |
Net Assets — 100.0% | | | $ | 127,694,227 | |
| | | | | | | | |
| | |
| 22 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
| | |
Schedule of Investments (unaudited) (continued) November 30, 2017 | | FDP BlackRock CoreAlpha Bond Fund |
| (a) | Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
| (b) | Non-income producing security. |
| (c) | Floating rate security. Rate shown is the rate in effect as of period end. |
| (d) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors. |
| (e) | Variable or floating rate security, which interest rate adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. Rate shown is the rate in effect as of period end. |
| (f) | Variable rate security. Security may be issued at a fixed coupon rate, which converts to a variable rate at a specified date. Rate shown is the rate in effect as of period end. |
| (g) | Variable rate security. Rate shown is the rate in effect as of period end. |
| (h) | Perpetual security with no stated maturity date. |
| (i) | Represents or includes a TBA transaction. As of period end, unsettled TBA transactions were as follows: |
| | | | | | | | |
| Counterparty | | Value | | | Unrealized
Appreciation
(Depreciation) | |
Barclays Bank PLC | | $ | (512,676 | ) | | $ | (215 | ) |
Citigroup Global Markets, Inc. | | | (208,875 | ) | | | (31 | ) |
Credit Suisse Securities (USA) LLC | | | 1,087,019 | | | | (471 | ) |
Goldman Sachs & Co. | | | 898,974 | | | | (2,275 | ) |
J.P. Morgan Securities LLC | | | 3,922,852 | | | | (6,152 | ) |
Merrill Lynch, Pierce, Fenner & Smith | | | 11,507,803 | | | | (42,511 | ) |
Mizuho Securities USA, Inc. | | | 210,190 | | | | (646 | ) |
Morgan Stanley & Co. LLC | | | 181,917 | | | | (119 | ) |
Nomura Securities | | | 1,347,695 | | | | (2,453 | ) |
RBC Capital Markets | | | 78,328 | | | | (223 | ) |
| (j) | Annualized 7-day yield as of period end. |
| (k) | During the period ended November 30, 2017, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Affiliate | | Shares
Held at
05/31/17 | | | Net
Activity | | | Shares
Held at
11/30/17 | | | Value at
11/30/17 | | | Income | | | Net
Realized
Gain (Loss) (a) | | | Change in
Unrealized
Appreciation
(Depreciation) | |
BlackRock Liquidity Funds, T-Fund, Institutional Class | | | 14,010,343 | | | | (13,395,364 | ) | | | 614,979 | | | $ | 614,979 | | | $ | 13,445 | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (a) | Includes net capital gain distributions, if applicable. | |
For Fund compliance purposes, the Fund’s industry classifications refer to one or more of the industry sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
| | | | | | | | | | | | | | | | |
| Description | | Number of
Contracts | | | Expiration
Date | | | Notional
Amount (000) | | | Value/
Unrealized
Appreciation
(Depreciation) | |
Long Contracts | | | | | | | | | | | | | | | | |
5-Year U.S. Treasury Note | | | 62 | | | | 03/15/18 | | | $ | 7,213,312 | | | $ | (7,450 | ) |
Long U.S. Treasury Bond | | | 14 | | | | 03/15/18 | | | | 2,124,063 | | | | (18,115 | ) |
Ultra Long U.S. Treasury Bond | | | 27 | | | | 03/15/18 | | | | 4,451,625 | | | | (54,459 | ) |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | (80,024 | ) |
| | | | | | | | | | | | | | | | |
Short Contracts | | | | | | | | | | | | | | | | |
2-Year U.S. Treasury Note | | | 2 | | | | 03/15/18 | | | | 428,813 | | | | (2 | ) |
10-Year U.S. Treasury Note | | | 14 | | | | 03/15/18 | | | | 1,736,656 | | | | 5,275 | |
10-Year U.S. Ultra Long Treasury Note | | | 15 | | | | 03/15/18 | | | | 1,997,578 | | | | 6,052 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | 11,325 | |
| | | | | | | | | | | | | | | | |
| | | $ | (68,699 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
| SCHEDULES OF INVESTMENTS | | | 23 | |
| | |
Schedule of Investments (unaudited) (continued) November 30, 2017 | | FDP BlackRock CoreAlpha Bond Fund |
Derivative Financial Instruments Categorized by Risk Exposure
As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Commodity
Contracts | | | Credit
Contracts | | | Equity
Contracts | | | Foreign
Currency
Exchange
Contracts | | | Interest
Rate
Contracts | | | Other
Contracts | | | Total | |
Assets — Derivative Financial Instruments | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Futures contracts | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net unrealized appreciation(a) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 11,327 | | | $ | — | | | $ | 11,327 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Liabilities — Derivative Financial Instruments | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Futures contracts | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net unrealized depreciation(a) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 80,026 | | | $ | — | | | $ | 80,026 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (a) | Includes cumulative appreciation (depreciation) on futures contracts, if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities. | |
For the six months ended November 30, 2017, the effect of derivative financial instruments in the Statements of Operations was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Commodity
Contracts | | | Credit
Contracts | | | Equity
Contracts | | | Foreign
Currency
Exchange
Contracts | | | Interest
Rate
Contracts | | | Other
Contracts | | | Total | |
Net Realized Gain (Loss) from: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Futures contracts | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 84,191 | | | $ | — | | | $ | 84,191 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Change in Unrealized Appreciation (Depreciation) on: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Futures contracts | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | (74,626 | ) | | $ | — | | | $ | (74,626 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Average Quarterly Balances of Outstanding Derivative Financial Instruments
| | | | |
Futures contracts: | |
Average notional value of contracts — long | | $ | 21,001,852 | |
Average notional value of contracts — short | | $ | 2,559,383 | |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.
The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:
| | | | | | | | | | | | | | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Asset-Backed Securities | | $ | — | | | $ | 18,016,300 | | | $ | — | | | $ | 18,016,300 | |
Corporate Bonds | | | — | | | | 66,402,333 | | | | — | | | | 66,402,333 | |
Floating Rate Loan Interests | | | — | | | | 18,652 | | | | — | | | | 18,652 | |
Foreign Agency Obligations | | | — | | | | 939,125 | | | | — | | | | 939,125 | |
Municipal Bonds | | | — | | | | 822,548 | | | | — | | | | 822,548 | |
Non-Agency Mortgage-Backed Securities | | | — | | | | 2,589,377 | | | | — | | | | 2,589,377 | |
Preferred Securities | | | — | | | | 331,313 | | | | — | | | | 331,313 | |
U.S. Government Sponsored Agency Securities | | | — | | | | 49,999,665 | | | | 258,950 | | | | 50,258,615 | |
U.S. Treasury Obligations | | | — | | | | 6,542,322 | | | | — | | | | 6,542,322 | |
Short-Term Securities: | | | | | | | | | | | | | | | | |
Time Deposits | | | — | | | | 130,460 | | | | — | | | | 130,460 | |
Money Market Funds | | | 614,979 | | | | — | | | | — | | | | 614,979 | |
Liabilities: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
TBA Sale Commitments | | | — | | | | (1,122,165 | ) | | | — | | | | (1,122,165 | ) |
Unfunded Floating Rate Loan Interests(a) | | | — | | | | — | | | | (12,551 | ) | | | (12,551 | ) |
| | | | | | | | | | | | | | | | |
| | $ | 614,979 | | | $ | 144,669,930 | | | $ | 246,399 | | | $ | 145,531,308 | |
| | | | | | | | | | | | | | | | |
| | |
| 24 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
| | |
Schedule of Investments (unaudited) (continued) November 30, 2017 | | FDP BlackRock CoreAlpha Bond Fund |
| | | | | | | | | | | | | | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Derivative Financial Instruments(b) | | | | | | | | | | | | | | | | |
Assets: | | | | | | | | | | | | | | | | |
Interest rate contracts | | $ | 11,327 | | | $ | — | | | $ | — | | | $ | 11,327 | |
Liabilities: | | | | | | | | | | | | | | | | |
Interest rate contracts | | | (80,026 | ) | | | — | | | | — | | | | (80,026 | ) |
| | | | | | | | | | | | | | | | |
| | $ | (68,699 | ) | | $ | — | | | $ | — | | | $ | (68,699 | ) |
| | | | | | | | | | | | | | | | |
| | (a) | Unfunded floating rate loan interests are valued at the unrealized appreciation (depreciation) on the commitment. | |
| | (b) | Derivative financial instruments are futures contracts, which are valued at the unrealized appreciation (depreciation) on the instrument. | |
During the six months ended November 30, 2017, there were no transfers between levels.
See notes to financial statements.
| | | | |
| SCHEDULES OF INVESTMENTS | | | 25 | |
| | | | | | | | |
| Security | |
Shares | | | Value | |
Common Stocks — 95.9% | |
|
| Aerospace & Defense — 2.6% | |
Lockheed Martin Corp. | | | 2,830 | | | $ | 903,110 | |
Northrop Grumman Corp. | | | 4,540 | | | | 1,395,596 | |
| | | | | | | | |
| | | | | | | 2,298,706 | |
| Air Freight & Logistics — 0.3% | |
United Parcel Service, Inc., Class B | | | 2,470 | | | | 299,981 | |
| | | | | | | | |
| Banks — 17.4% | |
Bank of America Corp. | | | 123,002 | | | | 3,464,966 | |
Citigroup, Inc. | | | 44,305 | | | | 3,345,028 | |
JPMorgan Chase & Co. | | | 34,276 | | | | 3,582,528 | |
KeyCorp | | | 25,600 | | | | 485,888 | |
SunTrust Banks, Inc. | | | 14,410 | | | | 888,088 | |
U.S. Bancorp | | | 22,936 | | | | 1,264,920 | |
Wells Fargo & Co. | | | 45,192 | | | | 2,551,992 | |
| | | | | | | | |
| | | | | | | 15,583,410 | |
| Beverages — 2.0% | |
Diageo PLC | | | 33,000 | | | | 1,140,930 | |
Dr. Pepper Snapple Group, Inc. | | | 6,900 | | | | 622,311 | |
| | | | | | | | |
| | | | | | | 1,763,241 | |
| Capital Markets — 4.0% | | | | | | |
Charles Schwab Corp. | | | 9,680 | | | | 472,288 | |
Goldman Sachs Group, Inc. | | | 4,672 | | | | 1,156,974 | |
Invesco Ltd. | | | 11,560 | | | | 418,125 | |
Morgan Stanley | | | 30,828 | | | | 1,591,033 | |
| | | | | | | | |
| | | | | | | 3,638,420 | |
| Chemicals — 2.4% | |
DowDuPont, Inc. | | | 26,440 | | | | 1,902,623 | |
Praxair, Inc. | | | 1,810 | | | | 278,595 | |
| | | | | | | | |
| | | | | | | 2,181,218 | |
| Communications Equipment — 0.8% | |
Motorola Solutions, Inc. | | | 7,340 | | | | 690,767 | |
| | | | | | | | |
| Construction Materials — 0.5% | |
CRH PLC | | | 13,370 | | | | 464,308 | |
| | | | | | | | |
| Diversified Telecommunication Services — 2.0% | |
BCE, Inc. | | | 5,350 | | | | 255,784 | |
Verizon Communications, Inc. | | | 31,218 | | | | 1,588,684 | |
| | | | | | | | |
| | | | | | | 1,844,468 | |
| Electric Utilities — 4.5% | |
Exelon Corp. | | | 12,200 | | | | 508,862 | |
FirstEnergy Corp. | | | 30,819 | | | | 1,052,161 | |
NextEra Energy, Inc. | | | 8,760 | | | | 1,384,430 | |
PG&E Corp. | | | 20,570 | | | | 1,115,717 | |
| | | | | | | | |
| | | | | | | 4,061,170 | |
| Electronic Equipment, Instruments & Components — 0.3% | |
CDW Corp. | | | 4,140 | | | | 289,841 | |
| | | | | | | | |
| Energy Equipment & Services — 0.4% | |
Halliburton Co. | | | 7,652 | | | | 319,701 | |
| | | | | | | | |
| Food & Staples Retailing — 0.8% | |
Kroger Co. | | | 27,430 | | | | 709,340 | |
| | | | | | | | |
| Food Products — 1.0% | |
General Mills, Inc. | | | 7,650 | | | | 432,684 | |
Kellogg Co. | | | 6,450 | | | | 426,732 | |
| | | | | | | | |
| | | | | | | 859,416 | |
| Health Care Equipment & Supplies — 3.1% | |
Koninklijke Philips NV | | | 34,310 | | | | 1,330,254 | |
| | |
Schedule of Investments (unaudited) November 30, 2017 | | FDP BlackRock Equity Dividend Fund (Percentages shown are based on Net Assets) |
| | | | | | | | |
| Security | |
Shares | | | Value | |
| Health Care Equipment & Supplies (continued) | |
Medtronic PLC | | | 13,856 | | | $ | 1,137,993 | |
Smith & Nephew PLC | | | 19,020 | | | | 336,638 | |
| | | | | | | | |
| | | | | | | 2,804,885 | |
| Health Care Providers & Services — 7.3% | |
Aetna, Inc. | | | 1,610 | | | | 290,090 | |
Anthem, Inc. | | | 6,622 | | | | 1,555,905 | |
Cardinal Health, Inc. | | | 3,783 | | | | 223,916 | |
Humana, Inc. | | | 3,290 | | | | 858,229 | |
McKesson Corp. | | | 5,285 | | | | 780,806 | |
Quest Diagnostics, Inc. | | | 4,650 | | | | 457,839 | |
UnitedHealth Group, Inc. | | | 10,340 | | | | 2,359,278 | |
| | | | | | | | |
| | | | | | | 6,526,063 | |
| Household Products — 0.9% | |
Procter & Gamble Co. | | | 9,010 | | | | 810,810 | |
| | | | | | | | |
| Industrial Conglomerates — 3.2% | |
3M Co. | | | 2,310 | | | | 561,654 | |
General Electric Co. | | | 56,856 | | | | 1,039,896 | |
Honeywell International, Inc. | | | 8,160 | | | | 1,272,634 | |
| | | | | | | | |
| | | | | | | 2,874,184 | |
| Insurance — 5.5% | |
American International Group, Inc. | | | 25,654 | | | | 1,538,214 | |
Brighthouse Financial, Inc.(a) | | | 1,943 | | | | 114,229 | |
Marsh & McLennan Cos., Inc. | | | 8,200 | | | | 688,226 | |
MetLife, Inc. | | | 25,858 | | | | 1,388,057 | |
Prudential Financial, Inc. | | | 3,070 | | | | 355,629 | |
Travelers Cos., Inc. | | | 6,360 | | | | 862,225 | |
| | | | | | | | |
| | | | | | | 4,946,580 | |
| Leisure Products — 0.6% | |
Mattel, Inc. | | | 27,650 | | | | 504,612 | |
| | | | | | | | |
| Machinery — 0.4% | |
Pentair PLC | | | 5,420 | | | | 385,687 | |
| | | | | | | | |
| Media — 2.1% | |
Comcast Corp., Class A | | | 35,487 | | | | 1,332,182 | |
Interpublic Group of Cos., Inc. | | | 5,880 | | | | 116,306 | |
Publicis Groupe SA | | | 6,207 | | | | 412,073 | |
| | | | | | | | |
| | | | | | | 1,860,561 | |
| Multi-Utilities — 1.2% | |
Public Service Enterprise Group, Inc. | | | 19,640 | | | | 1,042,098 | |
| | | | | | | | |
| Multiline Retail — 0.5% | |
Dollar General Corp. | | | 5,070 | | | | 446,566 | |
| | | | | | | | |
| Oil, Gas & Consumable Fuels — 10.5% | |
Chevron Corp. | | | 13,108 | | | | 1,559,721 | |
Enbridge, Inc. | | | 8,210 | | | | 309,599 | |
Hess Corp. | | | 17,993 | | | | 825,519 | |
Marathon Oil Corp. | | | 44,714 | | | | 663,556 | |
Marathon Petroleum Corp. | | | 9,700 | | | | 607,511 | |
Pioneer Natural Resources Co. | | | 2,200 | | | | 343,288 | |
Royal Dutch Shell PLC — ADR, Class A | | | 31,450 | | | | 2,016,574 | |
Suncor Energy, Inc. | | | 49,034 | | | | 1,704,422 | |
TOTAL SA — ADR | | | 24,530 | | | | 1,387,171 | |
| | | | | | | | |
| | | | | | | 9,417,361 | |
| Paper & Forest Products — 0.4% | |
International Paper Co. | | | 6,120 | | | | 346,453 | |
| | | | | | | | |
| Personal Products — 0.8% | |
Unilever NV — NY Shares | | | 12,623 | | | | 728,852 | |
| | | | | | | | |
| | |
| 26 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
| | |
Schedule of Investments (unaudited) (continued) November 30, 2017 | | FDP BlackRock Equity Dividend Fund (Percentages shown are based on Net Assets) |
| | | | | | | | |
| Security | |
Shares | | | Value | |
| Pharmaceuticals — 8.1% | |
AstraZeneca PLC | | | 24,440 | | | $ | 1,577,317 | |
Johnson & Johnson | | | 1,402 | | | | 195,341 | |
Merck & Co., Inc. | | | 26,164 | | | | 1,446,084 | |
Novo Nordisk A/S — ADR | | | 14,250 | | | | 737,722 | |
Pfizer, Inc. | | | 91,752 | | | | 3,326,928 | |
| | | | | | | | |
| | | | | | | 7,283,392 | |
| Professional Services — 1.2% | | | | | | |
Equifax, Inc. | | | 1,070 | | | | 122,108 | |
Experian PLC | | | 20,810 | | | | 432,999 | |
Nielsen Holdings PLC | | | 15,090 | | | | 554,105 | |
| | | | | | | | |
| | | | | | | 1,109,212 | |
| Road & Rail — 0.6% | | | | | | |
Union Pacific Corp. | | | 4,130 | | | | 522,445 | |
| | | | | | | | |
| Semiconductors & Semiconductor Equipment — 2.1% | | | | | | |
QUALCOMM, Inc. | | | 14,759 | | | | 979,112 | |
Taiwan Semiconductor Manufacturing Co. Ltd. — ADR | | | 22,158 | | | | 877,457 | |
| | | | | | | | |
| | | | | | | 1,856,569 | |
| Software — 5.4% | | | | | | |
Constellation Software, Inc. | | | 720 | | | | 421,726 | |
Microsoft Corp. | | | 22,343 | | | | 1,880,610 | |
Oracle Corp. | | | 52,130 | | | | 2,557,498 | |
| | | | | | | | |
| | | | | | | 4,859,834 | |
| Specialty Retail — 0.5% | | | | | | |
Lowe’s Cos., Inc. | | | 5,450 | | | | 454,366 | |
| | | | | | | | |
| Technology Hardware, Storage & Peripherals — 1.1% | | | | | | |
Lenovo Group Ltd. | | | 568,000 | | | | 324,169 | |
Samsung Electronics Co., Ltd., — GDR | | | 550 | | | | 646,250 | |
| | | | | | | | |
| | | | | | | 970,419 | |
| | | | | | | | |
| Security | | Shares/
Par (000) | | | Value | |
| Tobacco — 0.9% | | | | | | |
Altria Group, Inc. | | | 7,280 | | | $ | 493,802 | |
Philip Morris International, Inc. | | | 3,000 | | | | 308,250 | |
| | | | | | | | |
| | | | | | | 802,052 | |
| Wireless Telecommunication Services — 0.5% | | | | | | |
SK Telecom Co. Ltd. — ADR | | | 17,550 | | | | 481,572 | |
| | | | | | | | |
Total Long-Term Investments — 95.9%
(Cost — $69,638,009) | | | | 86,038,560 | |
| | | | | | | | |
|
Short-Term Securities — 9.1% | |
| Money Market Funds — 8.7% | | | | | | |
BlackRock Liquidity Funds, T-Fund, Institutional Class,
0.97%(b)(c) | | | 7,826,174 | | | | 7,826,174 | |
| | | | | | | | |
| | |
| Time Deposits — 0.4% | | | | | | |
| United States — 0.4% | |
Brown Brothers Harriman & Co., 1.18%, 12/01/17 | | $ | 377 | | | | 376,596 | |
| | | | | | | | |
Total Short-Term Securities — 9.1%
(Cost — $8,202,770) | | | | 8,202,770 | |
| | | | | | | | |
| |
Total Investments — 105.0%
(Cost — $77,840,779) | | | | 94,241,330 | |
Liabilities in Excess of Other Assets — (5.0)% | | | | (4,457,805 | ) |
| | | | | | | | |
Net Assets — 100.0% | | | $ | 89,783,525 | |
| | | | | | | | |
| (a) | Non-income producing security. |
| (b) | Annualized 7-day yield as of period end. |
| (c) | During the six months ended November 30, 2017, investments in issuers considered to be affiliates of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, and/or related parties of the Fund, were as follows: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Affiliate Persons and/or Related Parties | | Shares
Held at
05/31/17 | | | Shares
Purchased | | | Shares
Sold | | | Shares
Held at
11/30/17 | | | Value at
11/30/17 | | | Income | | | Net
Realized
Gain (Loss) (b) | | | Change in
Unrealized
Appreciation
(Depreciation) | |
BlackRock Liquidity Funds, T-Fund, Institutional Class | | | — | | | | 7,826,174 | (a) | | | — | | | | 7,826,174 | | | $ | 7,826,174 | | | $ | 310 | | | $ | — | | | $ | — | |
PNC Financial Services Group, Inc. | | | 500 | | | | — | | | | (500 | ) | | | — | | | | — | | | | 750 | | | | 40,418 | | | | (31,958 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | $ | 7,826,174 | | | $ | 1,060 | | | $ | 40,418 | | | $ | (31,958 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (a) | Represents net shares purchased. | |
| | (b) | Includes net capital gain distributions, if applicable. | |
For Fund compliance purposes, the Fund’s industry classifications refer to one or more of the industry sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.
Derivative Financial Instruments Categorized by Risk Exposure
For the six months ended November 30, 2017, the effect of derivative financial instruments in the Statements of Operations was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Commodity
Contracts | | | Credit
Contracts | | | Equity
Contracts | | | Foreign
Currency
Exchange
Contracts | | | Interest
Rate
Contracts | | | Other
Contracts | | | Total | |
Net Realized Gain (Loss) from: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Forward foreign currency exchange contracts | | $ | — | | | $ | — | | | $ | — | | | $ | (602,340 | ) | | $ | — | | | $ | — | | | $ | (602,340 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Change in Unrealized Appreciation (Depreciation) on: | | | | | | | | | | | | | | | | | | | | | |
Forward foreign currency exchange contracts | | $ | — | | | $ | — | | | $ | — | | | $ | 161,751 | | | $ | — | | | $ | — | | | $ | 161,751 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | |
| SCHEDULES OF INVESTMENTS | | | 27 | |
| | |
Schedule of Investments (unaudited) (continued) November 30, 2017 | | FDP BlackRock Equity Dividend Fund |
Average Quarterly Balances of Outstanding Derivative Financial Instruments
| | | | |
Forward foreign currency exchange contracts: | | | | |
Average amounts purchased — in USD | | $ | 5,475,805 | |
Average amounts sold — in USD | | $ | 105,642 | |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of investments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.
The following table summarizes the Fund’s investments categorized in the disclosure hierarchy:
| | | | | | | | | | | | | | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Common Stocks: | | | | | | | | | | | | | | | | |
Aerospace & Defense | | $ | 2,298,706 | | | $ | — | | | $ | — | | | $ | 2,298,706 | |
Air Freight & Logistics | | | 299,981 | | | | — | | | | — | | | | 299,981 | |
Banks | | | 15,583,410 | | | | — | | | | — | | | | 15,583,410 | |
Beverages | | | 622,311 | | | | 1,140,930 | | | | — | | | | 1,763,241 | |
Capital Markets | | | 3,638,420 | | | | — | | | | — | | | | 3,638,420 | |
Chemicals | | | 2,181,218 | | | | — | | | | — | | | | 2,181,218 | |
Communications Equipment | | | 690,767 | | | | — | | | | — | | | | 690,767 | |
Construction Materials | | | — | | | | 464,308 | | | | — | | | | 464,308 | |
Diversified Telecommunication Services | | | 1,844,468 | | | | — | | | | — | | | | 1,844,468 | |
Electric Utilities | | | 4,061,170 | | | | — | | | | — | | | | 4,061,170 | |
Electronic Equipment, Instruments & Components | | | 289,841 | | | | — | | | | — | | | | 289,841 | |
Energy Equipment & Services | | | 319,701 | | | | — | | | | — | | | | 319,701 | |
Food & Staples Retailing | | | 709,340 | | | | — | | | | — | | | | 709,340 | |
Food Products | | | 859,416 | | | | — | | | | — | | | | 859,416 | |
Health Care Equipment & Supplies | | | 1,137,993 | | | | 1,666,892 | | | | — | | | | 2,804,885 | |
Health Care Providers & Services | | | 6,526,063 | | | | — | | | | — | | | | 6,526,063 | |
Household Products | | | 810,810 | | | | — | | | | — | | | | 810,810 | |
Industrial Conglomerates | | | 2,874,184 | | | | — | | | | — | | | | 2,874,184 | |
Insurance | | | 4,946,580 | | | | — | | | | — | | | | 4,946,580 | |
Leisure Products | | | 504,612 | | | | — | | | | — | | | | 504,612 | |
Machinery | | | 385,687 | | | | — | | | | — | | | | 385,687 | |
Media | | | 1,448,488 | | | | 412,073 | | | | — | | | | 1,860,561 | |
Multi-Utilities | | | 1,042,098 | | | | — | | | | — | | | | 1,042,098 | |
Multiline Retail | | | 446,566 | | | | — | | | | — | | | | 446,566 | |
Oil, Gas & Consumable Fuels | | | 9,417,361 | | | | — | | | | — | | | | 9,417,361 | |
Paper & Forest Products | | | 346,453 | | | | — | | | | — | | | | 346,453 | |
Personal Products | | | 728,852 | | | | — | | | | — | | | | 728,852 | |
Pharmaceuticals | | | 5,706,075 | | | | 1,577,317 | | | | — | | | | 7,283,392 | |
Professional Services | | | 676,213 | | | | 432,999 | | | | — | | | | 1,109,212 | |
Road & Rail | | | 522,445 | | | | — | | | | — | | | | 522,445 | |
Semiconductors & Semiconductor Equipment | | | 1,856,569 | | | | — | | | | — | | | | 1,856,569 | |
Software | | | 4,859,834 | | | | — | | | | — | | | | 4,859,834 | |
Specialty Retail | | | 454,366 | | | | — | | | | — | | | | 454,366 | |
Technology Hardware, Storage & Peripherals | | | 646,250 | | | | 324,169 | | | | — | | | | 970,419 | |
Tobacco | | | 802,052 | | | | — | | | | — | | | | 802,052 | |
Wireless Telecommunication Services | | | 481,572 | | | | — | | | | — | | | | 481,572 | |
Short-Term Securities: | | | | | | | | | | | | | | | | |
Time Deposits | | | — | | | | 376,596 | | | | — | | | | 376,596 | |
Money Market Funds | | | 7,826,174 | | | | — | | | | — | | | | 7,826,174 | |
| | | | | | | | | | | | | | | | |
| | $ | 87,846,046 | | | $ | 6,395,284 | | | $ | — | | | $ | 94,241,330 | |
| | | | | | | | | | | | | | | | |
During the six months ended November 30, 2017, there were no transfers between levels.
See notes to financial statements.
| | |
| 28 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
| | |
Schedule of Investments (unaudited) November 30, 2017 | | FDP BlackRock International Fund (Percentages shown are based on Net Assets) |
| | | | | | | | | | | | |
| Security | | | | |
Shares | | | Value | |
Common Stocks — 95.7% | |
|
| Banks — 23.8% | |
Banco Bilbao Vizcaya Argentaria SA | | | | | | | 504,058 | | | $ | 4,321,358 | |
Banco Comercial Portugues SA, Class R(a) | | | | | | | 8,190,582 | | | | 2,513,494 | |
Bank Mandiri Persero Tbk PT | | | | | | | 3,959,500 | | | | 2,166,221 | |
Bank of China Ltd., Class H | | | | | | | 9,605,000 | | | | 4,660,980 | |
CaixaBank SA | | | | | | | 416,397 | | | | 1,978,693 | |
ICICI Bank Ltd. | | | | | | | 752,803 | | | | 3,590,641 | |
Intesa Sanpaolo SpA | | | | | | | 898,705 | | | | 3,028,009 | |
Itau Unibanco Holding SA, Preference Shares | | | | | | | 160,590 | | | | 2,024,637 | |
| | | | | | | | |
| | | | | | | | | | | 24,284,033 | |
| Beverages — 6.4% | |
Diageo PLC | | | | | | | 111,723 | | | | 3,862,670 | |
Heineken NV | | | | | | | 25,705 | | | | 2,616,520 | |
| | | | | | | | |
| | | | | | | | | | | 6,479,190 | |
| Biotechnology — 2.1% | |
BioMarin Pharmaceutical, Inc.(a) | | | | | | | 24,789 | | | | 2,126,896 | |
| | | | | | | | |
| Diversified Telecommunication Services — 3.2% | |
BT Group PLC | | | | | | | 931,146 | | | | 3,271,051 | |
| | | | | | | | |
| Electronic Equipment, Instruments & Components — 2.2% | |
Omron Corp. | | | | | | | 37,500 | | | | 2,209,116 | |
| | | | | | | | |
| Energy Equipment & Services — 5.2% | |
Schlumberger Ltd. | | | | | | | 43,998 | | | | 2,765,275 | |
TechnipFMC PLC | | | | | | | 89,841 | | | | 2,573,046 | |
| | | | | | | | |
| | | | | | | | | | | 5,338,321 | |
| Health Care Equipment & Supplies — 1.8% | |
Koninklijke Philips NV | | | | | | | 48,669 | | | | 1,886,976 | |
| | | | | | | | |
| Household Durables — 5.0% | |
Sony Corp. | | | | | | | 109,600 | | | | 5,064,904 | |
| | | | | | | | |
| Household Products — 1.9% | |
Reckitt Benckiser Group PLC | | | | | | | 22,682 | | | | 1,990,969 | |
| | | | | | | | |
| Insurance — 6.2% | |
Aegon NV | | | | | | | 342,158 | | | | 2,125,416 | |
AIA Group Ltd. | | | | | | | 295,800 | | | | 2,410,110 | |
Ping An Insurance Group Co. of China Ltd., Class H | | | | | | | 176,500 | | | | 1,740,107 | |
| | | | | | | | |
| | | | | | | | | | | 6,275,633 | |
| Internet Software & Services — 2.8% | |
NetEase, Inc. — ADR | | | | | | | 6,945 | | | | 2,282,891 | |
Sea Ltd., ADR(a) | | | | | | | 50,584 | | | | 586,774 | |
| | | | | | | | |
| | | | | | | | | | | 2,869,665 | |
| Media — 0.8% | |
ITV PLC | | | | | | | 385,983 | | | | 834,684 | |
| | | | | | | | |
| Metals & Mining — 2.8% | |
Vale SA — ADR | | | | | | | 267,594 | | | | 2,863,256 | |
| | | | | | | | |
| Multi-Utilities — 3.8% | |
Engie SA | | | | | | | 220,004 | | | | 3,850,646 | |
| | | | | | | | |
| Oil, Gas & Consumable Fuels — 3.2% | |
Statoil ASA | | | | | | | 162,000 | | | | 3,257,698 | |
| | | | | | | | |
| Pharmaceuticals — 3.8% | |
Bayer AG, Registered Shares | | | | | | | 30,745 | | | | 3,924,388 | |
| | | | | | | | |
| Semiconductors & Semiconductor Equipment — 1.5% | |
ASML Holding NV | | | | | | | 8,460 | | | | 1,484,574 | |
| | | | | | | | |
| Software — 4.3% | |
Trend Micro, Inc. | | | | | | | 77,000 | | | | 4,344,484 | |
| | | | | | | | |
| | | | | | | | | | | | |
| Security | | | | | Shares/Par
(000) | | | Value | |
| Textiles, Apparel & Luxury Goods — 5.5% | |
Burberry Group PLC | | | | | | | 82,198 | | | $ | 1,908,351 | |
Cie Financiere Richemont SA, Registered Shares | | | | | | | 42,818 | | | | 3,690,227 | |
| | | | | | | | |
| | | | | | | | | | | 5,598,578 | |
| Tobacco — 9.4% | |
British American Tobacco PLC | | | | | | | 47,245 | | | | 3,004,419 | |
Imperial Brands PLC | | | | | | | 99,273 | | | | 4,114,795 | |
Japan Tobacco, Inc. | | | | | | | 74,000 | | | | 2,450,751 | |
| | | | | | | | |
| | | | | | | | | | | 9,569,965 | |
| | | | | | | | |
Total Long-Term Investments — 95.7%
(Cost — $93,577,927) | | | | 97,525,027 | |
| | | | | | | | |
|
Time Deposits — 0.0% | |
|
| Europe — 0.0% | |
Brown Brother Harriman & Co., (0.57)%, 12/01/17 | | | EUR | | | | 15 | | | | 17,829 | |
| Japan — 0.0% | |
Sumitomo Bank, (0.23)%, 12/01/17 | | | JPY | | | | 1,700 | | | | 15,106 | |
| | | | | | | | |
Total Short-Term Securities — 0.0%
(Cost — $32,935) | | | | 32,935 | |
| | | | | | | | |
| |
Total Investments — 95.7%
(Cost — $93,610,862) | | | | 97,557,962 | |
Other Assets Less Liabilities — 4.3% | | | | 4,398,277 | |
| | | | | | | | |
Net Assets — 100.0% | | | $ | 101,956,239 | |
| | | | | | | | |
| (a) | Non-income producing security. |
| | | | |
| SCHEDULES OF INVESTMENTS | | | 29 | |
| | |
Schedule of Investments (unaudited) (continued) November 30, 2017 | | FDP BlackRock International Fund |
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of investments. For information about the Fund’s policy regarding valuation of investments, refer to the Notes to Financial Statements.
The following table summarizes the Fund’s investments categorized in the disclosure hierarchy:
| | | | | | | | | | | | | | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | | | | | | | | |
Investments: | | | | | | | | | | | | | | | | |
Common Stocks: | | | | | | | | | | | | | | | | |
Brazil | | $ | 4,887,893 | | | $ | — | | | $ | — | | | $ | 4,887,893 | |
China | | | 2,282,891 | | | | 6,401,087 | | | | — | | | | 8,683,978 | |
France | | | 3,850,646 | | | | — | | | | — | | | | 3,850,646 | |
Germany | | | — | | | | 3,924,388 | | | | — | | | | 3,924,388 | |
Hong Kong | | | — | | | | 2,410,110 | | | | — | | | | 2,410,110 | |
India | | | — | | | | 3,590,641 | | | | — | | | | 3,590,641 | |
Indonesia | | | — | | | | 2,166,221 | | | | — | | | | 2,166,221 | |
Italy | | | — | | | | 3,028,009 | | | | — | | | | 3,028,009 | |
Japan | | | — | | | | 14,069,255 | | | | — | | | | 14,069,255 | |
Netherlands | | | — | | | | 8,113,486 | | | | — | | | | 8,113,486 | |
Norway | | | — | | | | 3,257,698 | | | | — | | | | 3,257,698 | |
Portugal | | | — | | | | 2,513,494 | | | | — | | | | 2,513,494 | |
Singapore | | | 586,774 | | | | — | | | | — | | | | 586,774 | |
Spain | | | — | | | | 6,300,051 | | | | — | | | | 6,300,051 | |
Switzerland | | | — | | | | 3,690,227 | | | | — | | | | 3,690,227 | |
United Kingdom | | | 2,573,046 | | | | 18,986,939 | | | | — | | | | 21,559,985 | |
United States | | | 4,892,171 | | | | — | | | | — | | | | 4,892,171 | |
Short-Term Securities | | | | | | | | | | | | | | | | |
Time Deposits | | | — | | | | 32,935 | | | | — | | | | 32,935 | |
| | | | | | | | | | | | | | | | |
| | $ | 19,073,421 | | | $ | 78,484,541 | | | $ | — | | | $ | 97,557,962 | |
| | | | | | | | | | | | | | | | |
During the six months ended November 30, 2017, there were no transfers between levels.
See notes to financial statements.
| | |
| 30 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Statements of Assets and Liabilities (unaudited)
November 30, 2017
| | | | | | | | | | | | | | | | |
| | | FDP BlackRock
Capital Appreciation
Fund | | | FDP BlackRock
CoreAlpha Bond
Fund | | | FDP BlackRock
Equity Dividend
Fund | | | FDP BlackRock
International
Fund | |
|
ASSETS | |
Investments at value — unaffiliated(a) | | $ | 87,609,517 | | | $ | 146,051,045 | | | $ | 86,415,156 | | | $ | 97,557,962 | |
Investments at value — affiliated(b) | | | 4,165,694 | | | | 614,979 | | | | 7,826,174 | | | | — | |
Cash pledged for futures contracts | | | — | | | | 151,000 | | | | — | | | | — | |
Foreign currency at value(c) | | | — | | | | 52,828 | | | | 963 | | | | 299 | |
Receivables: | |
Investments sold | | | 1,074,533 | | | | 107,359 | | | | 3,835,869 | | | | 94,078,552 | |
Dividends — unaffiliated | | | 99,569 | | | | — | | | | 285,805 | | | | 510,377 | |
Capital shares sold | | | 22,129 | | | | 361,417 | | | | 22,580 | | | | 19,923 | |
Dividends — affiliated | | | 149 | | | | 1,648 | | | | — | | | | — | |
Interest — unaffiliated | | | — | | | | 853,279 | | | | 310 | | | | — | |
TBA sale commitments | | | — | | | | 1,122,924 | | | | — | | | | — | |
Variation margin on futures contracts | | | — | | | | 14,004 | | | | — | | | | — | |
Principal paydowns | | | — | | | | 1,185 | | | | — | | | | — | |
Prepaid expenses | | | 25,760 | | | | 29,057 | | | | 25,759 | | | | 25,705 | |
| | | | | | | | | | | | | | | | |
Total assets | | | 92,997,351 | | | | 149,360,725 | | | | 98,412,616 | | | | 192,192,818 | |
| | | | | | | | | | | | | | | | |
|
LIABILITIES | |
Bank overdraft | | | — | | | | — | | | | — | | | | 509,002 | |
Payables: | |
Investments purchased | | | 4,360,378 | | | | 19,718,484 | | | | 8,104,457 | | | | 89,092,143 | |
Capital shares redeemed | | | 340,707 | | | | 360,082 | | | | 330,997 | | | | 389,438 | |
Other accrued expenses | | | 95,932 | | | | 94,585 | | | | 108,046 | | | | 134,093 | |
Investment advisory fees | | | 54,057 | | | | 34,190 | | | | 47,231 | | | | 67,499 | |
Service and distribution fees | | | 35,538 | | | | 47,672 | | | | 35,489 | | | | 41,231 | |
Officer’s and Directors’ fees | | | 2,898 | | | | 3,162 | | | | 2,871 | | | | 2,919 | |
Other affiliates | | | 235 | | | | 429 | | | | — | | | | 254 | |
Income dividends | | | — | | | | 237,366 | | | | — | | | | — | |
Variation margin on futures contracts | | | — | | | | 35,812 | | | | — | | | | — | |
TBA sale commitments at value(d) | | | — | | | | 1,122,165 | | | | — | | | | — | |
Unrealized depreciation on unfunded floating rate loan interests | | | — | | | | 12,551 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Total liabilities | | | 4,889,745 | | | | 21,666,498 | | | | 8,629,091 | | | | 90,236,579 | |
| | | | | | | | | | | | | | | | |
| | | | |
NET ASSETS | | $ | 88,107,606 | | | $ | 127,694,227 | | | $ | 89,783,525 | | | $ | 101,956,239 | |
| | | | | | | | | | | | | | | | |
|
NET ASSETS CONSIST OF | |
Paid-in capital | | $ | 56,267,559 | | | $ | 130,923,791 | | | $ | 46,483,210 | | | $ | 99,694,698 | |
Undistributed (distributions in excess of) net investment income (loss) | | | (181,100 | ) | | | (1,703,291 | ) | | | 569,710 | | | | (258,826 | ) |
Accumulated net realized gain (loss) | | | 20,186,906 | | | | (2,545,608 | ) | | | 26,332,244 | | | | (1,410,009 | ) |
Net unrealized appreciation (depreciation) | | | 11,834,241 | | | | 1,019,335 | | | | 16,398,361 | | | | 3,930,376 | |
| | | | | | | | | | | | | | | | |
NET ASSETS | | $ | 88,107,606 | | | $ | 127,694,227 | | | $ | 89,783,525 | | | $ | 101,956,239 | |
| | | | | | | | | | | | | | | | |
| | | | |
(a) Investments at cost — unaffiliated | | $ | 75,775,872 | | | $ | 144,952,508 | | | $ | 70,014,605 | | | $ | 93,610,862 | |
(b) Investments at cost — affiliated | | $ | 4,165,694 | | | $ | 614,979 | | | $ | 7,826,174 | | | $ | — | |
(c) Foreign currency at cost | | $ | — | | | $ | 51,736 | | | $ | 963 | | | $ | 299 | |
(d) Proceeds from TBA sale commitments | | $ | — | | | $ | 1,122,924 | | | $ | — | | | $ | — | |
See notes to financial statements.
Statements of Assets and Liabilities (unaudited) (continued)
November 30, 2017
| | | | | | | | | | | | | | | | |
| | | FDP BlackRock
Capital Appreciation
Fund | | | FDP BlackRock
CoreAlpha Bond
Fund | | | FDP BlackRock
Equity Dividend
Fund | | | FDP BlackRock
International
Fund | |
|
Institutional: | |
Net assets | | $ | 4,261,193 | | | $ | 5,694,248 | | | $ | 4,261,273 | | | $ | 4,781,384 | |
| | | | | | | | | | | | | | | | |
Shares outstanding(e) | | | 249,323 | | | | 558,511 | | | | 235,178 | | | | 348,089 | |
| | | | | | | | | | | | | | | | |
Net asset value | | $ | 17.09 | | | $ | 10.20 | | | $ | 18.12 | | | $ | 13.74 | |
| | | | | | | | | | | | | | | | |
|
Investor A: | |
Net assets | | $ | 54,971,592 | | | $ | 74,656,609 | | | $ | 56,353,047 | | | $ | 63,940,038 | |
| | | | | | | | | | | | | | | | |
Shares outstanding(e) | | | 3,335,581 | | | | 7,320,055 | | | | 3,142,891 | | | | 4,682,882 | |
| | | | | | | | | | | | | | | | |
Net asset value | | $ | 16.48 | | | $ | 10.20 | | | $ | 17.93 | | | $ | 13.65 | |
| | | | | | | | | | | | | | | | |
|
Investor C: | |
Net assets | | $ | 28,874,821 | | | $ | 47,343,370 | | | $ | 29,169,205 | | | $ | 33,234,817 | |
| | | | | | | | | | | | | | | | |
Shares outstanding(e) | | | 1,964,058 | | | | 4,641,668 | | | | 1,663,822 | | | | 2,443,073 | |
| | | | | | | | | | | | | | | | |
Net asset value | | $ | 14.70 | | | $ | 10.20 | | | $ | 17.53 | | | $ | 13.60 | |
| | | | | | | | �� | | | | | | | | |
| (e) | 100 million shares authorized, $0.10 par value. |
See notes to financial statements.
| | |
| 32 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Statements of Operations (unaudited)
Six Months Ended November 30, 2017
| | | | | | | | | | | | | | | | |
| | | FDP BlackRock
Capital Appreciation
Fund | | | FDP BlackRock
CoreAlpha Bond
Fund | | | FDP BlackRock
Equity Dividend
Fund | | | FDP BlackRock
International Fund | |
|
INVESTMENT INCOME | |
Dividends — unaffiliated | | $ | 536,128 | | | $ | — | | | $ | 1,138,621 | | | $ | 766,532 | |
Interest — unaffiliated | | | — | | | | 2,136,999 | | | | — | | | | — | |
Dividends — affiliated | | | 149 | | | | 13,445 | | | | 1,060 | | | | — | |
Non-cash dividends — unaffiliated | | | — | | | | — | | | | — | | | | 47,373 | |
Foreign taxes withheld | | | — | | | | (88 | ) | | | (23,007 | ) | | | (61,323 | ) |
| | | | | | | | | | | | | | | | |
Total investment income | | | 536,277 | | | | 2,150,356 | | | | 1,116,674 | | | | 752,582 | |
| | | | | | | | | | | | | | | | |
|
EXPENSES | |
Investment advisory | | | 383,505 | | | | 294,322 | | | | 330,799 | | | | 503,713 | |
Service and distribution — class specific | | | 240,171 | | | | 332,300 | | | | 236,374 | | | | 280,212 | |
Transfer agent — class specific | | | 59,214 | | | | 89,829 | | | | 57,488 | | | | 66,712 | |
Professional | | | 36,145 | | | | 63,082 | | | | 34,315 | | | | 41,906 | |
Registration | | | 24,382 | | | | 27,436 | | | | 24,296 | | | | 24,649 | |
Custodian | | | 14,829 | | | | 8,920 | | | | 11,736 | | | | 85,137 | |
Accounting services | | | 14,562 | | | | 20,891 | | | | 14,835 | | | | 19,417 | |
Directors and Officer | | | 8,604 | | | | 8,970 | | | | 8,513 | | | | 8,696 | |
Printing | | | 5,060 | | | | 20,790 | | | | 9,476 | | | | 7,360 | |
Miscellaneous | | | 7,713 | | | | 23,202 | | | | 7,721 | | | | 9,596 | |
| | | | | | | | | | | | | | | | |
Total expenses | | | 794,185 | | | | 889,742 | | | | 735,553 | | | | 1,047,398 | |
Less: | |
Fees waived by the Manager | | | (24,699 | ) | | | (62,991 | ) | | | (23,997 | ) | | | (56,391 | ) |
Fees paid indirectly | | | (14 | ) | | | (54,743 | ) | | | (2,844 | ) | | | (423 | ) |
| | | | | | | | | | | | | | | | |
Total expenses after fees waived and paid indirectly | | | 769,472 | | | | 772,008 | | | | 708,712 | | | | 990,584 | |
| | | | | | | | | | | | | | | | |
Net investment income (loss) | | | (233,195 | ) | | | 1,378,348 | | | | 407,962 | | | | (238,002 | ) |
| | | | | | | | | | | | | | | | |
|
REALIZED AND UNREALIZED GAIN (LOSS) | |
Net realized gain (loss) from: | |
Investments — unaffiliated | | | 20,612,509 | | | | (580,454 | ) | | | 28,315,535 | | | | 38,175,239 | |
Investments — affiliated | | | — | | | | — | | | | 40,418 | | | | — | |
Futures contracts | | | — | | | | 84,191 | | | | — | | | | — | |
Forward foreign currency exchange contracts | | | — | | | | — | | | | (602,340 | ) | | | — | |
Foreign currency transactions | | | — | | | | (395 | ) | | | 32,453 | | | | 4,315 | |
| | | | | | | | | | | | | | | | |
| | | 20,612,509 | | | | (496,658 | ) | | | 27,786,066 | | | | 38,179,554 | |
| | | | | | | | | | | | | | | | |
Net change in unrealized appreciation (depreciation) on: | | | | | | | | | | | | | | | | |
Investments — unaffiliated | | | (13,427,219 | ) | | | (143,904 | ) | | | (16,420,627 | ) | | | (30,489,330 | ) |
Investments — affiliated | | | — | | | | — | | | | (31,958 | ) | | | — | |
Futures contracts | | | — | | | | (74,626 | ) | | | — | | | | — | |
Forward foreign currency exchange contracts | | | — | | | | — | | | | 161,751 | | | | — | |
Foreign currency translations | | | 596 | | | | (44 | ) | | | (2,548 | ) | | | (22,985 | ) |
Unfunded floating rate loan interests | | | — | | | | (8,743 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
| | | (13,426,623 | ) | | | (227,317 | ) | | | (16,293,382 | ) | | | (30,512,315 | ) |
| | | | | | | | | | | | | | | | |
Net realized and unrealized gain (loss) | | | 7,185,886 | | | | (723,975 | ) | | | 11,492,684 | | | | 7,667,239 | |
| | | | | | | | | | | | | | | | |
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 6,952,691 | | | $ | 654,373 | | | $ | 11,900,646 | | | $ | 7,429,237 | |
| | | | | | | | | | | | | | | | |
See notes to financial statements.
Statements of Changes in Net Assets
| | | | | | | | | | | | | | | | | | | | |
| | | FDP BlackRock Capital Appreciation Fund | | | | | | FDP BlackRock CoreAlpha Bond Fund | |
| | | Six Months Ended
11/30/17
(unaudited) | | | Year Ended
05/31/17 | | | | | | Six Months Ended
11/30/17
(unaudited) | | | Year Ended
05/31/17 | |
| | | | | |
INCREASE (DECREASE) IN NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| | | |
OPERATIONS | | | | | | | | | | | | | |
Net investment income (loss) | | $ | (233,195 | ) | | $ | (612,529 | ) | | | | | | $ | 1,378,348 | | | $ | 4,147,636 | |
Net realized gain (loss) | | | 20,612,509 | | | | 8,648,688 | | | | | | | | (496,658 | ) | | | (2,065,770 | ) |
Net change in unrealized appreciation (depreciation) | | | (13,426,623 | ) | | | 9,154,926 | | | | | | | | (227,317 | ) | | | 3,321,245 | |
| | | | | | | | | | | | | | | | | | | | |
Net increase in net assets resulting from operations | | | 6,952,691 | | | | 17,191,085 | | | | | | | | 654,373 | | | | 5,403,111 | |
| | | | | | | | | | | | | | | | | | | | |
| | | |
DISTRIBUTIONS TO SHAREHOLDERS(a) | | | | | | | | | | | | | |
From net investment income: | | | | | | | | | | | | | | | | | | | | |
Institutional | | | — | | | | — | | | | | | | | (83,821 | ) | | | (103,956 | ) |
Investor A | | | — | | | | — | | | | | | | | (1,054,333 | ) | | | (1,079,778 | ) |
Investor C | | | — | | | | — | | | | | | | | (555,561 | ) | | | (1,124,895 | ) |
From net realized gain: | | | | | | | | | | | | | |
Institutional | | | (178,939 | ) | | | (304,459 | ) | | | | | | | — | | | | — | |
Investor A | | | (2,419,042 | ) | | | (3,175,609 | ) | | | | | | | — | | | | — | |
Investor C | | | (1,349,933 | ) | | | (4,797,952 | ) | | | | | | | — | | | | — | |
From return of capital: | | | | | | | | | | | | | | | | | | | | |
Institutional | | | — | | | | — | | | | | | | | — | | | | (81,411 | ) |
Investor A | | | — | | | | — | | | | | | | | — | | | | (835,787 | ) |
Investor C | | | — | | | | — | | | | | | | | — | | | | (787,081 | ) |
| | | | | | | | | | | | | | | | | | | | |
Decrease in net assets resulting from distributions to shareholders | | | (3,947,914 | ) | | | (8,278,020 | ) | | | | | | | (1,693,715 | ) | | | (4,012,908 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | |
CAPITAL SHARE TRANSACTIONS | | | | | | | | | | | | | |
Net decrease in net assets derived from capital share transactions | | | (24,269,414 | ) | | | (35,307,275 | ) | | | | | | | (42,275,635 | ) | | | (50,248,713 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | |
NET ASSETS | | | | | | | | | | | | | |
Total decrease in net assets | | | (21,264,637 | ) | | | (26,394,210 | ) | | | | | | | (43,314,977 | ) | | | (48,858,510 | ) |
Beginning of period | | | 109,372,243 | | | | 135,766,453 | | | | | | | | 171,009,204 | | | | 219,867,714 | |
| | | | | | | | | | | | | | | | | | | | |
End of period | | $ | 88,107,606 | | | $ | 109,372,243 | | | | | | | $ | 127,694,227 | | | $ | 171,009,204 | |
| | | | | | | | | | | | | | | | | | | | |
Undistributed (distributions in excess of) net investment income (loss), end of period | | $ | (181,100 | ) | | $ | 52,095 | | | | | | | $ | (1,703,291 | ) | | $ | (1,387,924 | ) |
| | | | | | | | | | | | | | | | | | | | |
| (a) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
See notes to financial statements.
| | |
| 34 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Statements of Changes in Net Assets (continued)
| | | | | | | | | | | | | | | | | | | | |
| | | FDP BlackRock Equity Dividend Fund | | | | | | FDP BlackRock International Fund | |
| | | Six Months Ended
11/30/17
(unaudited) | | | Year Ended
05/31/17 | | | | | | Six Months Ended
11/30/17
(unaudited) | | | Year Ended
05/31/17 | |
| | | | | |
INCREASE (DECREASE) IN NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| | | |
OPERATIONS | | | | | | | | | | | | | |
Net investment income (loss) | | $ | 407,962 | | | $ | 899,574 | | | | | | | $ | (238,002 | ) | | $ | 957,455 | |
Net realized gain | | | 27,786,066 | | | | 9,771,819 | | | | | | | | 38,179,554 | | | | 2,125,312 | |
Net change in unrealized appreciation (depreciation) | | | (16,293,382 | ) | | | 9,417,528 | | | | | | | | (30,512,315 | ) | | | 16,325,270 | |
| | | | | | | | | | | | | | | | | | | | |
Net increase in net assets resulting from operations | | | 11,900,646 | | | | 20,088,921 | | | | | | | | 7,429,237 | | | | 19,408,037 | |
| | | | | | | | | | | | | | | | | | | | |
| | | |
DISTRIBUTIONS TO SHAREHOLDERS(a) | | | | | | | | | | | | | |
From net investment income: | | | | | | | | | | | | | |
Institutional | | | (9,006 | ) | | | (129,685 | ) | | | | | | | (65,456 | ) | | | (81,732 | ) |
Investor A | | | (83,684 | ) | | | (1,195,590 | ) | | | | | | | (838,346 | ) | | | (702,227 | ) |
Investor C | | | — | | | | (1,096,409 | ) | | | | | | | — | | | | (287,407 | ) |
From net realized gain: | | | | | | | | | | | | | |
Institutional | | | (206,316 | ) | | | (160,090 | ) | | | | | | | — | | | | — | |
Investor A | | | (2,866,268 | ) | | | (1,638,629 | ) | | | | | | | — | | | | — | |
Investor C | | | (1,722,048 | ) | | | (2,251,146 | ) | | | | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | |
Decrease in net assets resulting from distributions to shareholders | | | (4,887,322 | ) | | | (6,471,549 | ) | | | | | | | (903,802 | ) | | | (1,071,366 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | |
CAPITAL SHARE TRANSACTIONS | | | | | | | | | | | | | |
Net decrease in net assets derived from capital share transactions | | | (21,304,458 | ) | | | (45,893,229 | ) | | | | | | | (32,128,835 | ) | | | (44,737,219 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | |
NET ASSETS | | | | | | | | | | | | | |
Total decrease in net assets | | | (14,291,134 | ) | | | (32,275,857 | ) | | | | | | | (25,603,400 | ) | | | (26,400,548 | ) |
Beginning of period | | | 104,074,659 | | | | 136,350,516 | | | | | | | | 127,559,639 | | | | 153,960,187 | |
| | | | | | | | | | | | | | | | | | | | |
End of period | | $ | 89,783,525 | | | $ | 104,074,659 | | | | | | | $ | 101,956,239 | | | $ | 127,559,639 | |
| | | | | | | | | | | | | | | | | | | | |
Undistributed (distributions in excess of) net investment income, end of period | | $ | 569,710 | | | $ | 254,438 | | | | | | | $ | (258,826 | ) | | $ | 882,978 | |
| | | | | | | | | | | | | | | | | | | | |
| (a) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
See notes to financial statements.
Financial Highlights
(For a share outstanding throughout each period)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | FDP BlackRock Capital Appreciation Fund | |
| | | Institutional | |
| | | Six Months Ended
11/30/17
(unaudited) | | | | | | Year Ended May 31, | |
| | | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | |
Net asset value, beginning of period | | $ | 16.48 | | | | | | | $ | 15.01 | | | $ | 17.66 | | | $ | 17.11 | | | $ | 15.23 | | | $ | 12.63 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss)(a) | | | 0.00 | (b) | | | | | | | 0.02 | | | | (0.08 | ) | | | (0.02 | ) | | | (0.02 | ) | | | 0.07 | |
Net realized and unrealized gain (loss) | | | 1.29 | | | | | | | | 2.34 | | | | (0.30 | ) | | | 1.60 | | | | 2.67 | | | | 2.53 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) from investment operations | | | 1.29 | | | | | | | | 2.36 | | | | (0.38 | ) | | | 1.58 | | | | 2.65 | | | | 2.60 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Distributions from net realized gain(c) | | | (0.68 | ) | | | | | | | (0.89 | ) | | | (2.27 | ) | | | (1.03 | ) | | | (0.77 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 17.09 | | | | | | | $ | 16.48 | | | $ | 15.01 | | | $ | 17.66 | | | $ | 17.11 | | | $ | 15.23 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Total Return(d) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Based on net asset value | | | 8.02 | %(e) | | | | | | | 16.48 | % | | | (2.81 | )% | | | 9.55 | % | | | 17.70 | % | | | 20.59 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Ratios to Average Net Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses | | | 1.15 | %(f) | | | | | | | 1.10 | % | | | 1.35 | % | | | 1.10 | % | | | 1.07 | % | | | 1.13 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses after fees waived and paid indirectly | | | 1.10 | %(f) | | | | | | | 1.05 | % | | | 1.30 | % | | | 1.05 | % | | | 1.02 | % | | | 1.08 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) | | | 0.02 | %(f) | | | | | | | 0.15 | % | | | (0.54 | )% | | | (0.09 | )% | | | (0.10 | )% | | | 0.54 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000) | | $ | 4,261 | | | | | | | $ | 4,787 | | | $ | 5,397 | | | $ | 5,959 | | | $ | 5,597 | | | $ | 4,789 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Portfolio turnover rate | | | 80 | % | | | | | | | 48 | % | | | 128 | % | | | 86 | % | | | 101 | % | | | 127 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Based on average shares outstanding. |
| (b) | Amount is less than $0.005 per share. |
| (c) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (d) | Where applicable, assumes the reinvestment of distributions. |
| (e) | Aggregate total return. |
See notes to financial statements.
| | |
| 36 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | FDP BlackRock Capital Appreciation Fund (continued) | |
| | | Investor A | |
| | | Six Months Ended
11/30/17
(unaudited) | | | | | | Year Ended May 31, | |
| | | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | |
Net asset value, beginning of period | | $ | 15.91 | | | | | | | $ | 14.55 | | | $ | 17.23 | | | $ | 16.75 | | | $ | 14.94 | | | $ | 12.43 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss)(a) | | | (0.02 | ) | | | | | | | (0.01 | ) | | | (0.12 | ) | | | (0.06 | ) | | | (0.06 | ) | | | 0.04 | |
Net realized and unrealized gain (loss) | | | 1.24 | | | | | | | | 2.26 | | | | (0.29 | ) | | | 1.57 | | | | 2.62 | | | | 2.47 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) from investment operations | | | 1.22 | | | | | | | | 2.25 | | | | (0.41 | ) | | | 1.51 | | | | 2.56 | | | | 2.51 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Distributions from net realized gain(b) | | | (0.65 | ) | | | | | | | (0.89 | ) | | | (2.27 | ) | | | (1.03 | ) | | | (0.75 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 16.48 | | | | | | | $ | 15.91 | | | $ | 14.55 | | | $ | 17.23 | | | $ | 16.75 | | | $ | 14.94 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Total Return(c) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Based on net asset value | | | 7.87 | %(d) | | | | | | | 16.24 | % | | | (3.08 | )% | | | 9.32 | % | | | 17.42 | % | | | 20.19 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Ratios to Average Net Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses | | | 1.39 | %(e) | | | | | | | 1.35 | % | | | 1.60 | % | | | 1.35 | % | | | 1.32 | % | | | 1.38 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses after fees waived and paid indirectly | | | 1.34 | %(e) | | | | | | | 1.30 | % | | | 1.55 | % | | | 1.30 | % | | | 1.27 | % | | | 1.33 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) | | | (0.22 | )%(e) | | | | | | | (0.09 | )% | | | (0.79 | )% | | | (0.34 | )% | | | (0.35 | )% | | | 0.30 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000) | | $ | 54,972 | | | | | | | $ | 64,535 | | | $ | 53,675 | | | $ | 61,289 | | | $ | 55,133 | | | $ | 40,097 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Portfolio turnover rate | | | 80 | % | | | | | | | 48 | % | | | 128 | % | | | 86 | % | | | 101 | % | | | 127 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Based on average shares outstanding. |
| (b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) | Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
| (d) | Aggregate total return. |
See notes to financial statements.
Financial Highlights (continued)
(For a share outstanding throughout each period)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | FDP BlackRock Capital Appreciation Fund (continued) | |
| | | Investor C | |
| | | Six Months Ended
11/30/17
(unaudited) | | | | | | Year Ended May 31, | |
| | | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | |
Net asset value, beginning of period | | $ | 14.22 | | | | | | | $ | 13.19 | | | $ | 15.93 | | | $ | 15.68 | | | $ | 14.08 | | | $ | 11.79 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment loss(a) | | | (0.07 | ) | | | | | | | (0.11 | ) | | | (0.21 | ) | | | (0.17 | ) | | | (0.17 | ) | | | (0.06 | ) |
Net realized and unrealized gain (loss) | | | 1.10 | | | | | | | | 2.03 | | | | (0.26 | ) | | | 1.45 | | | | 2.46 | | | | 2.35 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) from investment operations | | | 1.03 | | | | | | | | 1.92 | | | | (0.47 | ) | | | 1.28 | | | | 2.29 | | | | 2.29 | |
| | | | | | | | | | | | | | | | | | | | | | | | | �� | | | |
Distributions from net realized gain(b) | | | (0.55 | ) | | | | | | | (0.89 | ) | | | (2.27 | ) | | | (1.03 | ) | | | (0.69 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 14.70 | | | | | | | $ | 14.22 | | | $ | 13.19 | | | $ | 15.93 | | | $ | 15.68 | | | $ | 14.08 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Total Return(c) | |
Based on net asset value | | | 7.42 | %(d) | | | | | | | 15.37 | % | | | (3.85 | )% | | | 8.46 | % | | | 16.48 | % | | | 19.42 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Ratios to Average Net Assets | |
Total expenses | | | 2.18 | %(e) | | | | | | | 2.12 | % | | | 2.36 | % | | | 2.11 | % | | | 2.08 | % | | | 2.13 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses after fees waived and paid indirectly | | | 2.13 | %(e) | | | | | | | 2.06 | % | | | 2.31 | % | | | 2.06 | % | | | 2.03 | % | | | 2.08 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment loss | | | (1.02 | )%(e) | | | | | | | (0.86 | )% | | | (1.55 | )% | | | (1.10 | )% | | | (1.11 | )% | | | (0.46 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Supplemental Data | |
Net assets, end of period (000) | | $ | 28,875 | | | | | | | $ | 40,050 | | | $ | 76,694 | | | $ | 92,669 | | | $ | 93,094 | | | $ | 80,148 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Portfolio turnover rate | | | 80 | % | | | | | | | 48 | % | | | 128 | % | | | 86 | % | | | 101 | % | | | 127 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Based on average shares outstanding. |
| (b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) | Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
| (d) | Aggregate total return. |
See notes to financial statements.
| | |
| 38 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | FDP BlackRock CoreAlpha Bond Fund | |
| | | Institutional | |
| | | Six Months Ended
11/30/17
(unaudited) | | | | | | Year Ended May 31, | |
| | | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | |
Net asset value, beginning of period | | $ | 10.27 | | | | | | | $ | 10.20 | | | $ | 10.67 | | | $ | 10.75 | | | $ | 10.71 | | | $ | 10.56 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income(a) | | | 0.12 | | | | | | | | 0.27 | | | | 0.23 | | | | 0.23 | | | | 0.28 | | | | 0.30 | |
Net realized and unrealized gain (loss) | | | (0.05 | ) | | | | | | | 0.06 | | | | (0.24 | ) | | | 0.05 | | | | 0.06 | | | | 0.23 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) from investment operations | | | 0.07 | | | | | | | | 0.33 | | | | (0.01 | ) | | | 0.28 | | | | 0.34 | | | | 0.53 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Distributions:(b) | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.14 | ) | | | | | | | (0.14 | ) | | | (0.23 | ) | | | (0.23 | ) | | | (0.29 | ) | | | (0.38 | ) |
From net realized gain | | | — | | | | | | | | — | | | | (0.23 | ) | | | (0.13 | ) | | | (0.01 | ) | | | — | |
From return of capital | | | — | | | | | | | | (0.12 | ) | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total distributions | | | (0.14 | ) | | | | | | | (0.26 | ) | | | (0.46 | ) | | | (0.36 | ) | | | (0.30 | ) | | | (0.38 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 10.20 | | | | | | | $ | 10.27 | | | $ | 10.20 | | | $ | 10.67 | | | $ | 10.75 | | | $ | 10.71 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Total Return(c) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Based on net asset value | | | 0.69 | %(d) | | | | | | | 3.31 | % | | | 0.05 | % | | | 2.61 | % | | | 3.18 | % | | | 5.03 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Ratios to Average Net Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses | | | 0.76 | %(e) | | | | | | | 0.67 | % | | | 0.82 | % | | | 0.69 | % | | | 0.68 | % | | | 0.71 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses after fees waived and paid indirectly | | | 0.60 | %(e) | | | | | | | 0.64 | % | | | 0.81 | % | | | 0.69 | % | | | 0.68 | % | | | 0.71 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 2.30 | %(e) | | | | | | | 2.63 | % | | | 2.26 | % | | | 2.12 | % | | | 2.71 | % | | | 2.76 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000) | | $ | 5,694 | | | | | | | $ | 6,868 | | | $ | 7,507 | | | $ | 7,455 | | | $ | 6,791 | | | $ | 5,506 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Portfolio turnover rate(f) | | | 140 | % | | | | | | | 277 | % | | | 315 | % | | | 283 | % | | | 296 | % | | | 322 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Based on average shares outstanding. |
| (b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) | Where applicable, assumes the reinvestment of distributions. |
| (d) | Aggregate total return. |
| (f) | Includes mortgage dollar roll transactions (“MDRs”). Additional information regarding portfolio turnover rate is as follows: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
11/30/17
(unaudited) | | | | | | Year Ended May 31, | |
| | | | | | | 2017 | | | | | | 2016 | | | | | | 2015 | | | | | | 2014 | | | | | | 2013 | | | | |
Portfolio turnover rate (excluding MDRs) | | | 75 | % | | | | | | | 175 | % | | | | | | | 115 | % | | | | | | | 80 | % | | | | | | | 137 | % | | | | | | | 128 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
See notes to financial statements.
Financial Highlights (continued)
(For a share outstanding throughout each period)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | FDP BlackRock CoreAlpha Bond Fund (continued) | |
| | | Investor A | |
| | | Six Months Ended
11/30/17
(unaudited) | | | | | | Year Ended May 31, | |
| | | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | |
Net asset value, beginning of period | | $ | 10.28 | | | | | | | $ | 10.20 | | | $ | 10.67 | | | $ | 10.76 | | | $ | 10.71 | | | $ | 10.57 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income(a) | | | 0.11 | | | | | | | | 0.24 | | | | 0.21 | | | | 0.20 | | | | 0.26 | | | | 0.27 | |
Net realized and unrealized gain (loss) | | | (0.06 | ) | | | | | | | 0.08 | | | | (0.25 | ) | | | 0.04 | | | | 0.06 | | | | 0.23 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) from investment operations | | | 0.05 | | | | | | | | 0.32 | | | | (0.04 | ) | | | 0.24 | | | | 0.32 | | | | 0.50 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Distributions:(b) | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.13 | ) | | | | | | | (0.14 | ) | | | (0.20 | ) | | | (0.20 | ) | | | (0.26 | ) | | | (0.36 | ) |
From net realized gain | | | — | | | | | | | | — | | | | (0.23 | ) | | | (0.13 | ) | | | (0.01 | ) | | | — | |
From return of capital | | | — | | | | | | | | (0.10 | ) | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total distributions | | | (0.13 | ) | | | | | | | (0.24 | ) | | | (0.43 | ) | | | (0.33 | ) | | | (0.27 | ) | | | (0.36 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 10.20 | | | | | | | $ | 10.28 | | | $ | 10.20 | | | $ | 10.67 | | | $ | 10.76 | | | $ | 10.71 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Total Return(c) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Based on net asset value | | | 0.47 | %(d) | | | | | | | 3.16 | % | | | (0.20 | )% | | | 2.26 | % | | | 3.03 | % | | | 4.67 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Ratios to Average Net Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses | | | 1.00 | %(e) | | | | | | | 0.92 | % | | | 1.07 | % | | | 0.94 | % | | | 0.93 | % | | | 0.95 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses after fees waived and paid indirectly | | | 0.84 | %(e) | | | | | | | 0.89 | % | | | 1.06 | % | | | 0.94 | % | | | 0.93 | % | | | 0.95 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 2.08 | %(e) | | | | | | | 2.38 | % | | | 2.01 | % | | | 1.87 | % | | | 2.46 | % | | | 2.51 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000) | | $ | 74,657 | | | | | | | $ | 95,020 | | | $ | 86,870 | | | $ | 97,067 | | | $ | 86,986 | | | $ | 63,283 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Portfolio turnover rate(f) | | | 140 | % | | | | | | | 277 | % | | | 315 | % | | | 283 | % | | | 296 | % | | | 322 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Based on average shares outstanding. |
| (b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) | Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
| (d) | Aggregate total return. |
| (f) | Includes mortgage dollar roll transactions (“MDRs”). Additional information regarding portfolio turnover rate is as follows: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
11/30/17
(unaudited) | | | | | | Year Ended May 31, | |
| | | | | | | 2017 | | | | | | 2016 | | | | | | 2015 | | | | | | 2014 | | | | | | 2013 | | | | |
Portfolio turnover rate (excluding MDRs) | | | 75 | % | | | | | | | 175 | % | | | | | | | 115 | % | | | | | | | 80 | % | | | | | | | 137 | % | | | | | | | 128 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
See notes to financial statements.
| | |
| 40 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | FDP BlackRock CoreAlpha Bond Fund (continued) | |
| | | Investor C | |
| | | Six Months Ended
11/30/17
(unaudited) | | | | | | Year Ended May 31, | |
| | | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | |
Net asset value, beginning of period | | $ | 10.28 | | | | | | | $ | 10.20 | | | $ | 10.67 | | | $ | 10.76 | | | $ | 10.71 | | | $ | 10.57 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income(a) | | | 0.08 | | | | | | | | 0.19 | | | | 0.15 | | | | 0.14 | | | | 0.20 | | | | 0.21 | |
Net realized and unrealized gain (loss) | | | (0.06 | ) | | | | | | | 0.07 | | | | (0.24 | ) | | | 0.04 | | | | 0.06 | | | | 0.23 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) from investment operations | | | 0.02 | | | | | | | | 0.26 | | | | (0.09 | ) | | | 0.18 | | | | 0.26 | | | | 0.44 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Distributions:(b) | |
From net investment income | | | (0.10 | ) | | | | | | | (0.11 | ) | | | (0.15 | ) | | | (0.14 | ) | | | (0.20 | ) | | | (0.30 | ) |
From net realized gain | | | — | | | | | | | | — | | | | (0.23 | ) | | | (0.13 | ) | | | (0.01 | ) | | | — | |
From return of capital | | | — | | | | | | | | (0.07 | ) | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total distributions | | | (0.10 | ) | | | | | | | (0.18 | ) | | | (0.38 | ) | | | (0.27 | ) | | | (0.21 | ) | | | (0.30 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 10.20 | | | | | | | $ | 10.28 | | | $ | 10.20 | | | $ | 10.67 | | | $ | 10.76 | | | $ | 10.71 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Total Return(c) | |
Based on net asset value | | | 0.19 | %(d) | | | | | | | 2.58 | % | | | (0.76 | )% | | | 1.69 | % | | | 2.45 | % | | | 4.10 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Ratios to Average Net Assets | |
Total expenses | | | 1.57 | %(e) | | | | | | | 1.48 | % | | | 1.63 | % | | | 1.50 | % | | | 1.49 | % | | | 1.51 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses after fees waived and paid indirectly | | | 1.41 | %(e) | | | | | | | 1.45 | % | | | 1.62 | % | | | 1.50 | % | | | 1.49 | % | | | 1.51 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 1.52 | %(e) | | | | | | | 1.84 | % | | | 1.45 | % | | | 1.31 | % | | | 1.90 | % | | | 1.96 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Supplemental Data | |
Net assets, end of period (000) | | $ | 47,343 | | | | | | | $ | 69,120 | | | $ | 125,490 | | | $ | 142,617 | | | $ | 138,904 | | | $ | 116,996 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Portfolio turnover rate(f) | | | 140 | % | | | | | | | 277 | % | | | 315 | % | | | 283 | % | | | 296 | % | | | 322 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Based on average shares outstanding. |
| (b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) | Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
| (d) | Aggregate total return. |
| (f) | Includes mortgage dollar roll transactions (“MDRs”). Additional information regarding portfolio turnover rate is as follows: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended
11/30/17
(unaudited) | | | | | | Year Ended May 31, | |
| | | | | 2017 | | | | | | 2016 | | | | | | 2015 | | | | | | 2014 | | | | | | 2013 | | | | |
Portfolio turnover rate (excluding MDRs) | | | 75 | % | | | | | | | 175 | % | | | | | | | 115 | % | | | | | | | 80 | % | | | | | | | 137 | % | | | | | | | 128 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
See notes to financial statements.
Financial Highlights (continued)
(For a share outstanding throughout each period)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | FDP BlackRock Equity Dividend Fund | |
| | | Institutional | |
| | | Six Months Ended
11/30/17
(unaudited) | | | | | | Year Ended May 31, | |
| | | | | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | |
Net asset value, beginning of period | | $ | 16.76 | | | | | | | $ | 15.12 | | | $ | 16.68 | | | $ | 15.78 | | | $ | 13.36 | | | $ | 9.97 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income(a) | | | 0.12 | | | | | | | | 0.22 | | | | 0.23 | | | | 0.18 | | | | 0.21 | | | | 0.16 | |
Net realized and unrealized gain (loss) | | | 2.11 | | | | | | | | 2.33 | | | | (1.47 | ) | | | 0.99 | | | | 2.30 | | | | 3.36 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) from investment operations | | | 2.23 | | | | | | | | 2.55 | | | | (1.24 | ) | | | 1.17 | | | | 2.51 | | | | 3.52 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Distributions:(b) | |
From net investment income | | | (0.04 | ) | | | | | | | (0.40 | ) | | | (0.32 | ) | | | (0.27 | ) | | | (0.09 | ) | | | (0.13 | ) |
From net realized gain | | | (0.83 | ) | | | | | | | (0.51 | ) | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total distributions | | | (0.87 | ) | | | | | | | (0.91 | ) | | | (0.32 | ) | | | (0.27 | ) | | | (0.09 | ) | | | (0.13 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 18.12 | | | | | | | $ | 16.76 | | | $ | 15.12 | | | $ | 16.68 | | | $ | 15.78 | | | $ | 13.36 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Total Return(c) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Based on net asset value | | | 13.82 | %(d) | | | | | | | 17.03 | % | | | (7.54 | )% | | | 7.49 | % | | | 18.89 | % | | | 35.68 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Ratios to Average Net Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses | | | 1.05 | %(e) | | | | | | | 0.99 | % | | | 1.20 | % | | | 1.00 | % | | | 0.98 | % | | | 1.06 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses after fees waived and paid indirectly | | | 1.00 | %(e) | | | | | | | 0.94 | % | | | 1.20 | % | | | 1.00 | % | | | 0.98 | % | | | 1.06 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 1.38 | %(e) | | | | | | | 1.36 | % | | | 1.54 | % | | | 1.13 | % | | | 1.43 | % | | | 1.37 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000) | | $ | 4,261 | | | | | | | $ | 4,522 | | | $ | 5,376 | | | $ | 5,890 | | | $ | 5,373 | | | $ | 4,330 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Portfolio turnover rate | | | 59 | % | | | | | | | 14 | % | | | 15 | % | | | 19 | % | | | 14 | % | | | 13 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Based on average shares outstanding. |
| (b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) | Where applicable, assumes the reinvestment of distributions. |
| (d) | Aggregate total return. |
See notes to financial statements.
| | |
| 42 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | FDP BlackRock Equity Dividend Fund (continued) | |
| | | Investor A | |
| | | Six Months Ended
11/30/17
(unaudited) | | | | | | Year Ended May 31, | |
| | | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | |
Net asset value, beginning of period | | $ | 16.60 | | | | | | | $ | 14.98 | | | $ | 16.53 | | | $ | 15.63 | | | $ | 13.26 | | | $ | 9.89 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income(a) | | | 0.10 | | | | | | | | 0.18 | | | | 0.19 | | | | 0.14 | | | | 0.17 | | | | 0.13 | |
Net realized and unrealized gain (loss) | | | 2.08 | | | | | | | | 2.31 | | | | (1.46 | ) | | | 0.97 | | | | 2.28 | | | | 3.35 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) from investment operations | | | 2.18 | | | | | | | | 2.49 | | | | (1.27 | ) | | | 1.11 | | | | 2.45 | | | | 3.48 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Distributions:(b) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.02 | ) | | | | | | | (0.36 | ) | | | (0.28 | ) | | | (0.21 | ) | | | (0.08 | ) | | | (0.11 | ) |
From net realized gain | | | (0.83 | ) | | | | | | | (0.51 | ) | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total distributions | | | (0.85 | ) | | | | | | | (0.87 | ) | | | (0.28 | ) | | | (0.21 | ) | | | (0.08 | ) | | | (0.11 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 17.93 | | | | | | | $ | 16.60 | | | $ | 14.98 | | | $ | 16.53 | | | $ | 15.63 | | | $ | 13.26 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Total Return(c) | | | | | | | | | | | | | | | | | | | | | | | | | |
Based on net asset value | | | 13.69 | %(d) | | | | | | | 16.77 | % | | | (7.78 | )% | | | 7.19 | % | | | 18.56 | % | | | 35.47 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Ratios to Average Net Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses | | | 1.30 | %(e) | | | | | | | 1.24 | % | | | 1.45 | % | | | 1.25 | % | | | 1.22 | % | | | 1.30 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses after fees waived and paid indirectly | | | 1.24 | %(e) | | | | | | | 1.19 | % | | | 1.45 | % | | | 1.25 | % | | | 1.22 | % | | | 1.30 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 1.13 | %(e) | | | | | | | 1.11 | % | | | 1.29 | % | | | 0.88 | % | | | 1.19 | % | | | 1.13 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000) | | $ | 56,353 | | | | | | | $ | 61,471 | | | $ | 53,623 | | | $ | 60,815 | | | $ | 54,119 | | | $ | 38,807 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Portfolio turnover rate | | | 59 | % | | | | | | | 14 | % | | | 15 | % | | | 19 | % | | | 14 | % | | | 13 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Based on average shares outstanding. |
| (b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) | Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
| (d) | Aggregate total return. |
See notes to financial statements.
Financial Highlights (continued)
(For a share outstanding throughout each period)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | FDP BlackRock Equity Dividend Fund (continued) | |
| | | Investor C | |
| | | Six Months Ended
11/30/17
(unaudited) | | | | | | Year Ended May 31, | |
| | | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | |
Net asset value, beginning of period | | $ | 16.29 | | | | | | | $ | 14.71 | | | $ | 16.24 | | | $ | 15.37 | | | $ | 13.09 | | | $ | 9.77 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income(a) | | | 0.03 | | | | | | | | 0.06 | | | | 0.08 | | | | 0.02 | | | | 0.06 | | | | 0.04 | |
Net realized and unrealized gain (loss) | | | 2.04 | | | | | | | | 2.27 | | | | (1.45 | ) | | | 0.96 | | | | 2.26 | | | | 3.30 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) from investment operations | | | 2.07 | | | | | | | | 2.33 | | | | (1.37 | ) | | | 0.98 | | | | 2.32 | | | | 3.34 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Distributions:(b) | |
From net investment income | | | — | | | | | | | | (0.24 | ) | | | (0.16 | ) | | | (0.11 | ) | | | (0.04 | ) | | | (0.02 | ) |
From net realized gain | | | (0.83 | ) | | | | | | | (0.51 | ) | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total distributions | | | (0.83 | ) | | | | | | | (0.75 | ) | | | (0.16 | ) | | | (0.11 | ) | | | (0.04 | ) | | | (0.02 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 17.53 | | | | | | | $ | 16.29 | | | $ | 14.71 | | | $ | 16.24 | | | $ | 15.37 | | | $ | 13.09 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Total Return(c) | |
Based on net asset value | | | 13.22 | %(d) | | | | | | | 15.90 | % | | | (8.51 | )% | | | 6.40 | % | | | 17.76 | % | | | 34.30 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Ratios to Average Net Assets | |
Total expenses | | | 2.08 | %(e) | | | | | | | 2.01 | % | | | 2.21 | % | | | 2.01 | % | | | 1.98 | % | | | 2.06 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses after fees waived and paid indirectly | | | 2.03 | %(e) | | | | | | | 1.95 | % | | | 2.21 | % | | | 2.01 | % | | | 1.98 | % | | | 2.06 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.33 | %(e) | | | | | | | 0.37 | % | | | 0.53 | % | | | 0.12 | % | | | 0.41 | % | | | 0.37 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Supplemental Data | |
Net assets, end of period (000) | | $ | 29,169 | | | | | | | $ | 38,081 | | | $ | 77,352 | | | $ | 92,568 | | | $ | 92,201 | | | $ | 79,259 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Portfolio turnover rate | | | 59 | % | | | | | | | 14 | % | | | 15 | % | | | 19 | % | | | 14 | % | | | 13 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Based on average shares outstanding. |
| (b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) | Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
| (d) | Aggregate total return. |
See notes to financial statements.
| | |
| 44 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | FDP BlackRock International Fund | |
| | | Institutional | |
| | | Six Months Ended
11/30/17
(unaudited) | | | | | | Year Ended May 31, | |
| | | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | |
Net asset value, beginning of period | | $ | 12.98 | | | | | | | $ | 11.28 | | | $ | 13.05 | | | $ | 13.32 | | | $ | 11.77 | | | $ | 9.45 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income(a) | | | 0.00 | (b) | | | | | | | 0.16 | | | | 0.16 | | | | 0.17 | | | | 0.28 | | | | 0.19 | |
Net realized and unrealized gain (loss) | | | 0.94 | | | | | | | | 1.70 | | | | (1.78 | ) | | | (0.18 | ) | | | 1.45 | | | | 2.31 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) from investment operations | | | 0.94 | | | | | | | | 1.86 | | | | (1.62 | ) | | | (0.01 | ) | | | 1.73 | | | | 2.50 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income(c) | | | (0.18 | ) | | | | | | | (0.16 | ) | | | (0.15 | ) | | | (0.26 | ) | | | (0.18 | ) | | | (0.18 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 13.74 | | | | | | | $ | 12.98 | | | $ | 11.28 | | | $ | 13.05 | | | $ | 13.32 | | | $ | 11.77 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Total Return(d) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Based on net asset value | | | 7.29 | %(e) | | | | | | | 16.74 | % | | | (12.57 | )% | | | (0.04 | )% | | | 14.88 | % | | | 26.81 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Ratios to Average Net Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses | | | 1.37 | %(f) | | | | | | | 1.30 | % | | | 1.44 | % | | | 1.26 | % | | | 1.23 | % | | | 1.27 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses after fees waived and paid indirectly | | | 1.27 | %(f) | | | | | | | 1.20 | % | | | 1.34 | % | | | 1.26 | % | | | 1.23 | % | | | 1.27 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.06 | %(f) | | | | | | | 1.40 | % | | | 1.37 | % | | | 1.32 | % | | | 2.21 | % | | | 1.73 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000) | | $ | 4,781 | | | | | | | $ | 5,311 | | | $ | 5,817 | | | $ | 6,478 | | | $ | 5,961 | | | $ | 4,768 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Portfolio turnover rate | | | 93 | % | | | | | | | 30 | % | | | 37 | % | | | 27 | % | | | 29 | % | | | 34 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Based on average shares outstanding. |
| (b) | Amount is less than $0.005 per share |
| (c) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (d) | Where applicable, assumes the reinvestment of distributions. |
| (e) | Aggregate total return. |
See notes to financial statements.
Financial Highlights (continued)
(For a share outstanding throughout each period)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | FDP BlackRock International Fund (continued) | |
| | | Investor A | |
| | | Six Months Ended
11/30/17
(unaudited) | | | | | | Year Ended May 31, | |
| | | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | |
Net asset value, beginning of period | | $ | 12.90 | | | | | | | $ | 11.20 | | | $ | 12.97 | | | $ | 13.24 | | | $ | 11.70 | | | $ | 9.41 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss)(a) | | | (0.01 | ) | | | | | | | 0.13 | | | | 0.13 | | | | 0.14 | | | | 0.25 | | | | 0.16 | |
Net realized and unrealized gain (loss) | | | 0.92 | | | | | | | | 1.70 | | | | (1.78 | ) | | | (0.17 | ) | | | 1.45 | | | | 2.29 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) from investment operations | | | 0.91 | | | | | | | | 1.83 | | | | (1.65 | ) | | | (0.03 | ) | | | 1.70 | | | | 2.45 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income(b) | | | (0.16 | ) | | | | | | | (0.13 | ) | | | (0.12 | ) | | | (0.24 | ) | | | (0.16 | ) | | | (0.16 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 13.65 | | | | | | | $ | 12.90 | | | $ | 11.20 | | | $ | 12.97 | | | $ | 13.24 | | | $ | 11.70 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Total Return(c) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Based on net asset value | | | 7.08 | %(d) | | | | | | | 16.55 | % | | | (12.85 | )% | | | (0.25 | )% | | | 14.67 | % | | | 26.34 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Ratios to Average Net Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses | | | 1.61 | %(e) | | | | | | | 1.55 | % | | | 1.68 | % | | | 1.51 | % | | | 1.48 | % | | | 1.51 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total expenses after fees waived and paid indirectly | | | 1.51 | %(e) | | | | | | | 1.45 | % | | | 1.58 | % | | | 1.51 | % | | | 1.48 | % | | | 1.51 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) | | | (0.17 | )%(e) | | | | | | | 1.15 | % | | | 1.12 | % | | | 1.09 | % | | | 2.00 | % | | | 1.51 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000) | | $ | 63,940 | | | | | | | $ | 75,800 | | | $ | 60,141 | | | $ | 70,702 | | | $ | 62,636 | | | $ | 43,560 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Portfolio turnover rate | | | 93 | % | | | | | | | 30 | % | | | 37 | % | | | 27 | % | | | 29 | % | | | 34 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Based on average shares outstanding. |
| (b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) | Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
| (d) | Aggregate total return. |
See notes to financial statements.
| | |
| 46 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | FDP BlackRock International Fund (continued) | |
| | | Investor C | |
| | | Six Months Ended
11/30/17
(unaudited) | | | | | | Year Ended May 31, | |
| | | | | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | |
Net asset value, beginning of period | | $ | 12.75 | | | | | | | $ | 11.06 | | | $ | 12.81 | | | $ | 13.08 | | | $ | 11.57 | | | $ | 9.29 | |
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Net investment income (loss)(a) | | | (0.06 | ) | | | | | | | 0.03 | | | | 0.04 | | | | 0.04 | | | | 0.14 | | | | 0.07 | |
Net realized and unrealized gain (loss) | | | 0.91 | | | | | | | | 1.70 | | | | (1.77 | ) | | | (0.17 | ) | | | 1.44 | | | | 2.28 | |
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Net increase (decrease) from investment operations | | | 0.85 | | | | | | | | 1.73 | | | | (1.73 | ) | | | (0.13 | ) | | | 1.58 | | | | 2.35 | |
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Distributions from net investment income(b) | | | — | | | | | | | | (0.04 | ) | | | (0.02 | ) | | | (0.14 | ) | | | (0.07 | ) | | | (0.07 | ) |
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Net asset value, end of period | | $ | 13.60 | | | | | | | $ | 12.75 | | | $ | 11.06 | | | $ | 12.81 | | | $ | 13.08 | | | $ | 11.57 | |
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Total Return(c) | |
Based on net asset value | | | 6.67 | %(d) | | | | | | | 15.67 | % | | | (13.52 | )% | | | (0.97 | )% | | | 13.72 | % | | | 25.46 | % |
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Ratios to Average Net Assets | |
Total expenses | | | 2.40 | %(e) | | | | | | | 2.31 | % | | | 2.44 | % | | | 2.26 | % | | | 2.24 | % | | | 2.27 | % |
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Total expenses after fees waived and paid indirectly | | | 2.30 | %(e) | | | | | | | 2.21 | % | | | 2.34 | % | | | 2.26 | % | | | 2.24 | % | | | 2.27 | % |
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Net investment income (loss) | | | (0.95 | )%(e) | | | | | | | 0.29 | % | | | 0.34 | % | | | 0.29 | % | | | 1.16 | % | | | 0.69 | % |
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Supplemental Data | |
Net assets, end of period (000) | | $ | 33,235 | | | | | | | $ | 46,449 | | | $ | 88,002 | | | $ | 109,093 | | | $ | 108,426 | | | $ | 89,448 | |
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Portfolio turnover rate | | | 93 | % | | | | | | | 30 | % | | | 37 | % | | | 27 | % | | | 29 | % | | | 34 | % |
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| (a) | Based on average shares outstanding. |
| (b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) | Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
| (d) | Aggregate total return. |
See notes to financial statements.
Notes to Financial Statements (unaudited)
FDP Series, Inc. (the “Corporation”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Corporation is organized as a Maryland corporation. Each Fund is a series of the Corporation. The following are referred to herein collectively as the “Funds” or individually as a “Fund”:
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| Fund Name | | Herein Referred to As | | Diversification
Classification |
FDP BlackRock Capital Appreciation Fund | | Capital Appreciation Fund | | Diversified |
FDP BlackRock CoreAlpha Bond Fund | | CoreAlpha Bond Fund | | Diversified |
FDP BlackRock Equity Dividend Fund | | Equity Dividend Fund | | Diversified |
FDP BlackRock International Fund | | International Fund | | Diversified |
Each Fund offers multiple classes of shares. All classes of shares have identical voting, dividend, liquidation and other rights and are subject to the same terms and conditions, except that certain classes bear expenses related to the shareholder servicing and distribution of such shares, and may be subject to a contingent deferred sales charge (“CDSC”). Each class has exclusive voting rights with respect to matters relating to its shareholder servicing and distribution expenditures.
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| Share Class | | Initial Sales Charge | | CDSC | | | Conversion Privilege |
Institutional Shares | | No | | | No | | | None |
Investor A Shares | | Yes | | | No | (a) | | None |
Investor C Shares | | No | | | Yes | | | None |
| | (a) | Investor A Shares may be subject to a CDSC for certain redemptions where no initial sales charge was paid at the time of purchase. | |
On September 12, 2017, the Board approved a proposal to change the name of the Capital Appreciation Fund from “FDP BlackRock Janus Growth Fund” and certain changes to the Fund’s investment objective and strategies. The Board also approved the termination of the Fund’s sub-advisery agreement with Janus Capital Management LLC. In addition, the Fund’s Manager determined to change the benchmark index against which the Fund compares its performance. All of these changes became effective on November 28, 2017.
On September 12, 2017, the Board approved a proposal to change the name of the Equity Dividend Fund from “FDP BlackRock Invesco Value Fund” and certain changes to the Fund’s investment objective and strategies. The Board also approved the termination of the Fund’s sub-advisery agreement with Invesco Advisers, Inc. All of these changes became effective on November 28, 2017.
On September 12, 2017, the Board approved a proposal to change the name of the International Fund from “FDP BlackRock MFS Research International Fund” and certain changes to the Fund’s investment objective and strategies. The Board also approved the termination of the Fund’s sub-advisery agreement with Massachusetts Financial Services Company. In addition, the Fund’s Manager determined to remove a benchmark index against which the Fund compares its performance. All of these changes became effective on November 28, 2017.
The Funds, together with certain other registered investment companies advised by BlackRock Advisors, LLC (the “Manager”) or its affiliates, are included in a complex of open-end funds referred to as the Equity-Bond Complex.
| 2. | SIGNIFICANT ACCOUNTING POLICIES |
The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. Below is a summary of significant accounting policies:
Investment Transactions and Income Recognition: For financial reporting purposes, investment transactions are recorded on the dates the transactions are entered into (the “trade dates”). Realized gains and losses on investment transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend date. Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when the Funds are informed of the ex-dividend date. Under the applicable foreign tax laws, a withholding tax at various rates may be imposed on capital gains, dividends and interest. Upon notification from issuers, some of the dividend income received from a real estate investment trust may be redesignated as a reduction of cost of the related investment and/or realized gain. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized on an accrual basis. Income, expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.
Foreign Currency Translation: Each Fund’s books and records are maintained in U.S. dollars. Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates determined as of the close of trading on the New York Stock Exchange (“NYSE”). Purchases and sales of investments are recorded at the rates of exchange prevailing on the respective dates of such transactions. Generally, when the U.S. dollar rises in value against a foreign currency, the investments denominated in that currency will lose value; the opposite effect occurs if the U.S. dollar falls in relative value.
Each Fund does not isolate the portion of the results of operations arising as a result of changes in the exchange rates from the changes in the market prices of investments held or sold for financial reporting purposes. Accordingly, the effects of changes in exchange rates on investments are not segregated in the Statements of Operations from the effects of changes in market prices of those investments, but are included as a component of net realized and unrealized gain (loss) from investments.
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| 48 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Notes to Financial Statements (unaudited) (continued)
Each Fund reports realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are generally treated as ordinary income for U.S. federal income tax purposes.
Segregation and Collateralization: In cases where a Fund enters into certain investments (e.g., dollar rolls, to-be-announced (“TBA”) sale commitments, futures contracts, forward foreign currency exchange contracts and swaps) that would be treated as “senior securities” for 1940 Act purposes, a Fund may segregate or designate on its books and records cash or liquid assets having a market value at least equal to the amount of its future obligations under such investments. Doing so allows the investment to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Funds may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments or obligations.
Distributions: For Capital Appreciation Fund, Equity Dividend Fund and International Fund, distributions paid by the Funds are recorded on the ex-dividend date. For CoreAlpha Bond Fund, distributions from net investment income are declared daily and paid monthly. Distributions of capital gains are recorded on the ex-dividend date and made at least annually. The portion of distributions, if any, that exceeds a Fund’s current and accumulated earnings and profits, as measured on a tax basis, constitute a non-taxable return of capital. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.
Recent Accounting Standards: In March 2017, the Financial Accounting Standards Board issued Accounting Standards Update “Premium Amortization of Purchased Callable Debt Securities” which amends the amortization period for certain purchased callable debt securities. Under the new guidance, the premium amortization of purchased callable debt securities that have explicit, non-contingent call features and are callable at fixed prices will be amortized to the earliest call date. The guidance will be applied on a modified retrospective basis and is effective for fiscal years, and their interim periods, beginning after December 15, 2018. Management is currently evaluating the impact of this guidance to the Funds.
Indemnifications: In the normal course of business, a Fund enters into contracts that contain a variety of representations that provide general indemnification. A Fund’s maximum exposure under these arrangements is unknown because it involves future potential claims against a Fund, which cannot be predicted with any certainty.
Other: Expenses directly related to a Fund or its classes are charged to that Fund or the applicable class. Other operating expenses shared by several funds, including other funds managed by the Manager, are prorated among those funds on the basis of relative net assets or other appropriate methods. Expenses directly related to the Funds and other shared expenses prorated to the Funds are allocated daily to each class based on its relative net assets or other appropriate methods.
The Funds have an arrangement with their custodian whereby credits are earned on uninvested cash balances, which could be used to reduce custody fees and/or overdraft charges. The Funds may incur charges on certain uninvested cash balances and overdrafts, subject to certain conditions.
| 3. | INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS |
Investment Valuation Policies: The Funds’ investments are valued at fair value (also referred to as “market value” within the financial statements) as of the close of trading on the NYSE (generally 4:00 p.m., Eastern time). U.S. GAAP defines fair value as the price the Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Funds determine the fair values of their financial instruments using various independent dealers or pricing services under policies approved by the Board of Directors of each Fund (the “Board”). The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to oversee the pricing function for all financial instruments.
Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of each Fund’s assets and liabilities:
| | • | | Equity investments traded on a recognized securities exchange are valued at the official closing price each day, if available. For equity investments traded on more than one exchange, the official closing price on the exchange where the stock is primarily traded is used. Equity investments traded on a recognized exchange for which there were no sales on that day may be valued at the last available bid (long positions) or ask (short positions) price. |
| | • | | Fixed-income securities for which market quotations are readily available are generally valued using the last available bid prices or current market quotations provided by independent dealers or third party pricing services. Floating rate loan interests are valued at the mean of the bid prices from one or more independent brokers or dealers as obtained from a third party pricing service. Pricing services generally value fixed-income securities assuming orderly transactions of an institutional round lot size, but a fund may hold or transact in such securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots. The pricing services may use matrix pricing or valuation models that utilize certain inputs and assumptions to derive values, including transaction data (e.g., recent representative bids and offers), credit quality information, perceived market movements, news, and other relevant information. Certain fixed-income securities, including asset-backed and mortgage related securities may be valued based on valuation models that consider the estimated cash flows of each tranche of the entity, establish a benchmark yield and develop an estimated tranche specific spread to the benchmark yield based on the unique attributes of the tranche. The amortized cost method of valuation may be used with respect to debt obligations with sixty days or less remaining to maturity unless the Manager determines such method does not represent fair value. |
Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the NYSE. Occasionally, events affecting the values of such instruments may occur between the foreign market close and the close of trading on the NYSE that may not be reflected in the computation of the Funds’ net assets. Each business day, the Funds use a pricing service to assist with the valuation of certain foreign exchange-traded equity securities and foreign exchange-traded and over-the-counter (“OTC”) options (the “Systematic Fair Value Price”). Using current market factors, the Systematic Fair Value Price is designed to value such foreign securities and foreign options at fair value as of the close of trading on the NYSE, which follows the close of the local markets.
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| NOTESTO FINANCIAL STATEMENTS | | | 49 | |
Notes to Financial Statements (unaudited) (continued)
| | • | | Municipal investments (including commitments to purchase such investments on a “when-issued” basis) are valued on the basis of prices provided by dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments and information with respect to various relationships between investments. |
| | • | | Investments in open-end U.S. mutual funds are valued at net asset value (“NAV”) each business day. |
| | • | | Futures contracts traded on exchanges are valued at their last sale price. |
| | • | | Forward foreign currency exchange contracts are valued at the mean between the bid and ask prices and are determined as of the close of trading on the NYSE. Interpolated values are derived when the settlement date of the contract is an interim date for which quotations are not available. |
| | • | | TBA commitments are valued on the basis of last available bid prices or current market quotations provided by pricing services. |
If events (e.g., a company announcement, market volatility or a natural disaster) occur that are expected to materially affect the value of such investments, or in the event that the application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the Global Valuation Committee, or its delegate, in accordance with a policy approved by the Board as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the Global Valuation Committee will include market approach, income approach and cost approach. Valuation techniques such as discounted cash flow, use of market comparables and matrix pricing are types of valuation approaches and are typically used in determining fair value. When determining the price for Fair Valued Investments, the Global Valuation Committee, or its delegate, seeks to determine the price that each Fund might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the Global Valuation Committee, or its delegate, deems relevant and consistent with the principles of fair value measurement.
The Global Valuation Committee, or its delegate, employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of each Fund’s pricing vendors, regular reviews of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices and large movements in market values and reviews of any market related activity. The pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis. As a result of the inherent uncertainty in valuation of these investments, the fair values may differ from the values that would have been used had an active market existed.
For investments in equity or debt issued by privately-held companies or funds (“Private Company” or collectively, the “Private Companies”) and other Fair Valued Investments, the fair valuation approaches that are used by third party pricing services utilize one or a combination of, but not limited to, the following inputs.
| | |
| | | Standard Inputs Generally Considered By Third Party Pricing Services |
Market approach | | (i) recent market transactions, including subsequent rounds of financing, in the underlying investment or comparable issuers; (ii) recapitalizations and other transactions across the capital structure; and (iii) market multiples of comparable issuers. |
Income approach | | (i) future cash flows discounted to present and adjusted as appropriate for liquidity, credit, and/or market risks; (ii) quoted prices for similar investments or assets in active markets; and (iii) other risk factors, such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, recovery rates, liquidation amounts and/or default rates. |
Cost approach | | (i) audited or unaudited financial statements, investor communications and financial or operational metrics issued by the Private Company; (ii) changes in the valuation of relevant indices or publicly traded companies comparable to the Private Company; (iii) relevant news and other public sources; and (iv) known secondary market transactions in the Private Company’s interests and merger or acquisition activity in companies comparable to the Private Company. |
Investments in series of preferred stock issued by Private Companies are typically valued utilizing market approach in determining the enterprise value of the company. Such investments often contain rights and preferences that differ from other series of preferred and common stock of the same issuer. Valuation techniques such as an option pricing model (“OPM”), a probability weighted expected return model (“PWERM”) or a hybrid of those techniques are used in allocating enterprise value of the company, as deemed appropriate under the circumstances. The use of OPM and PWERM techniques involve a determination of the exit scenarios of the investment in order to appropriately allocate the enterprise value of the company among the various parts of its capital structure.
The Private Companies are not subject to the public company disclosure, timing, and reporting standards as other investments held by a Fund. Typically, the most recently available information by a Private Company is as of a date that is earlier than the date a Fund is calculating its NAV. This factor may result in a difference between the value of the investment and the price a Fund could receive upon the sale of the investment.
Fair Value Hierarchy: Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial statement purposes as follows:
| | • | | Level 1 — Unadjusted price quotations in active markets/exchanges for identical assets or liabilities that each Fund has the ability to access |
| | • | | Level 2 — Other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market–corroborated inputs) |
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| 50 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Notes to Financial Statements (unaudited) (continued)
| | • | | Level 3 — Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including each Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments) |
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Investments classified within Level 3 have significant unobservable inputs used by the Global Valuation Committee in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by Private Companies. There may not be a secondary market, and/or there are a limited number of investors. Level 3 investments may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Global Valuation Committee in the absence of market information.
Changes in valuation techniques may result in transfers into or out of an assigned level within the hierarchy. In accordance with each Fund’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investments and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities.
| 4. | SECURITIES AND OTHER INVESTMENTS |
Asset-Backed and Mortgage-Backed Securities: Asset-backed securities are generally issued as pass-through certificates or as debt instruments. Asset-backed securities issued as pass-through certificates represent undivided fractional ownership interests in an underlying pool of assets. Asset-backed securities issued as debt instruments, which are also known as collateralized obligations, are typically issued as the debt of a special purpose entity organized solely for the purpose of owning such assets and issuing such debt. Asset-backed securities are often backed by a pool of assets representing the obligations of a number of different parties. The yield characteristics of certain asset-backed securities may differ from traditional debt securities. One such major difference is that all or a principal part of the obligations may be prepaid at any time because the underlying assets (i.e., loans) may be prepaid at any time. As a result, a decrease in interest rates in the market may result in increases in the level of prepayments as borrowers, particularly mortgagors, refinance and repay their loans. An increased prepayment rate with respect to an asset-backed security will have the effect of shortening the maturity of the security. In addition, a fund may subsequently have to reinvest the proceeds at lower interest rates. If a fund has purchased such an asset-backed security at a premium, a faster than anticipated prepayment rate could result in a loss of principal to the extent of the premium paid.
For mortgage pass-through securities (the “Mortgage Assets”), there are a number of important differences among the agencies and instrumentalities of the U.S. Government that issue mortgage-related securities and among the securities that they issue. For example, mortgage-related securities guaranteed by Ginnie Mae are guaranteed as to the timely payment of principal and interest by Ginnie Mae and such guarantee is backed by the full faith and credit of the United States. However, mortgage-related securities issued by Freddie Mac and Fannie Mae, including Freddie Mac and Fannie Mae guaranteed mortgage pass-through certificates, which are solely the obligations of Freddie Mac and Fannie Mae, are not backed by or entitled to the full faith and credit of the United States, but are supported by the right of the issuer to borrow from the U.S. Treasury.
Non-agency mortgage-backed securities are securities issued by non-governmental issuers and have no direct or indirect government guarantees of payment and are subject to various risks. Non-agency mortgage loans are obligations of the borrowers thereunder only and are not typically insured or guaranteed by any other person or entity. The ability of a borrower to repay a loan is dependent upon the income or assets of the borrower. A number of factors, including a general economic downturn, acts of God, terrorism, social unrest and civil disturbances, may impair a borrower’s ability to repay its loans.
Inflation-Indexed Bonds: Inflation-indexed bonds (other than municipal inflation-indexed and certain corporate inflation-indexed bonds) are fixed-income securities whose principal value is periodically adjusted according to the rate of inflation. If the index measuring inflation rises or falls, the principal value of inflation-indexed bonds (other than municipal inflation-indexed and certain corporate inflation-indexed bonds) will be adjusted upward or downward, and consequently the interest payable on these securities (calculated with respect to a larger or smaller principal amount) will be increased or reduced, respectively. Any upward or downward adjustment in the principal amount of an inflation-indexed bond will be included as interest income in the Statements of Operations, even though investors do not receive their principal until maturity. Repayment of the original bond principal upon maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds. For bonds that do not provide a similar guarantee, the adjusted principal value of the bond repaid at maturity may be less than the original principal. With regard to municipal inflation-indexed bonds and certain corporate inflation-indexed bonds, the inflation adjustment is typically reflected in the semi-annual coupon payment. As a result, the principal value of municipal inflation-indexed bonds and such corporate inflation-indexed bonds does not adjust according to the rate of inflation.
Multiple Class Pass-Through Securities: Multiple class pass-through securities, including collateralized mortgage obligations (“CMOs”) and commercial mortgage-backed securities, may be issued by Ginnie Mae, U.S. Government agencies or instrumentalities or by trusts formed by private originators of, or investors in, mortgage loans. In general, CMOs are debt obligations of a legal entity that are collateralized by a pool of residential or commercial mortgage loans or Mortgage Assets. The payments on these are used to make payments on the CMOs or multiple pass-through securities. Multiple class pass-through securities represent direct ownership interests in the Mortgage Assets. Classes of CMOs include interest only (“IOs”), principal only (“POs”), planned amortization classes and targeted amortization classes. IOs and POs are stripped mortgage-backed securities representing interests in a pool of mortgages, the cash flow from which has been separated into interest and principal components. IOs receive the interest portion of the cash flow while POs receive the principal portion. IOs and POs can be extremely volatile in response to changes in interest rates. As interest rates rise and fall, the value of IOs tends to move in the same direction as interest rates. POs perform best when prepayments on the underlying mortgages rise since this increases the rate at which the principal is returned and the yield to maturity on the PO. When payments on mortgages underlying a PO are slower than anticipated, the life of the PO is lengthened and the yield to maturity is reduced. If the underlying Mortgage Assets experience greater than anticipated prepayments of principal, a fund’s initial investment in the IOs may not fully recoup.
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| NOTESTO FINANCIAL STATEMENTS | | | 51 | |
Notes to Financial Statements (unaudited) (continued)
Capital Securities and Trust Preferred Securities: Capital securities, including trust preferred securities, are typically issued by corporations, generally in the form of interest-bearing notes with preferred securities characteristics. In the case of trust preferred securities, an affiliated business trust of a corporation issues these securities, generally in the form of beneficial interests in subordinated debentures or similarly structured securities. The securities can be structured with either a fixed or adjustable coupon that can have either a perpetual or stated maturity date. For trust preferred securities, the issuing bank or corporation pays interest to the trust, which is then distributed to holders of these securities as a dividend. Dividends can be deferred without creating an event of default or acceleration, although maturity cannot take place unless all cumulative payment obligations have been met. The deferral of payments does not affect the purchase or sale of these securities in the open market. These securities generally are rated below that of the issuing company’s senior debt securities and are freely callable at the issuer’s option.
Preferred Stocks: Preferred stock has a preference over common stock in liquidation (and generally in receiving dividends as well), but is subordinated to the liabilities of the issuer in all respects. As a general rule, the market value of preferred stock with a fixed dividend rate and no conversion element varies inversely with interest rates and perceived credit risk, while the market price of convertible preferred stock generally also reflects some element of conversion value. Because preferred stock is junior to debt securities and other obligations of the issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a preferred stock than in a more senior debt security with similar stated yield characteristics. Unlike interest payments on debt securities, preferred stock dividends are payable only if declared by the issuer’s board of directors. Preferred stock also may be subject to optional or mandatory redemption provisions.
Floating Rate Loan Interests: Floating rate loan interests are typically issued to companies (the “borrower”) by banks, other financial institutions, or privately and publicly offered corporations (the “lender”). Floating rate loan interests are generally non-investment grade, often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged or in bankruptcy proceedings. In addition, transactions in floating rate loan interests may settle on a delayed basis, which may result in proceeds from the sale not being readily available for a fund to make additional investments or meet its redemption obligations. Floating rate loan interests may include fully funded term loans or revolving lines of credit. Floating rate loan interests are typically senior in the corporate capital structure of the borrower. Floating rate loan interests generally pay interest at rates that are periodically determined by reference to a base lending rate plus a premium. Since the rates reset only periodically, changes in prevailing interest rates (and particularly sudden and significant changes) can be expected to cause some fluctuations in the NAV of a fund to the extent that it invests in floating rate loan interests. The base lending rates are generally the lending rate offered by one or more European banks, such as the London Interbank Offered Rate (“LIBOR”), the prime rate offered by one or more U.S. banks or the certificate of deposit rate. Floating rate loan interests may involve foreign borrowers, and investments may be denominated in foreign currencies. These investments are treated as investments in debt securities for purposes of a fund’s investment policies.
When a fund purchases a floating rate loan interest, it may receive a facility fee and when it sells a floating rate loan interest, it may pay a facility fee. On an ongoing basis, a fund may receive a commitment fee based on the undrawn portion of the underlying line of credit amount of a floating rate loan interest. Facility and commitment fees are typically amortized to income over the term of the loan or term of the commitment, respectively. Consent and amendment fees are recorded to income as earned. Prepayment penalty fees, which may be received by a fund upon the prepayment of a floating rate loan interest by a borrower, are recorded as realized gains. A fund may invest in multiple series or tranches of a loan. A different series or tranche may have varying terms and carry different associated risks.
Floating rate loan interests are usually freely callable at the borrower’s option. A fund may invest in such loans in the form of participations in loans (“Participations”) or assignments (“Assignments”) of all or a portion of loans from third parties. Participations typically will result in a fund having a contractual relationship only with the lender, not with the borrower. A fund has the right to receive payments of principal, interest and any fees to which it is entitled only from the lender selling the Participation and only upon receipt by the lender of the payments from the borrower. In connection with purchasing Participations, a fund generally will have no right to enforce compliance by the borrower with the terms of the loan agreement, nor any rights of offset against the borrower. A fund may not benefit directly from any collateral supporting the loan in which it has purchased the Participation. As a result, a fund assumes the credit risk of both the borrower and the lender that is selling the Participation. A fund’s investment in loan participation interests involves the risk of insolvency of the financial intermediaries who are parties to the transactions. In the event of the insolvency of the lender selling the Participation, a fund may be treated as a general creditor of the lender and may not benefit from any offset between the lender and the borrower. Assignments typically result in a fund having a direct contractual relationship with the borrower, and a fund may enforce compliance by the borrower with the terms of the loan agreement.
In connection with floating rate loan interests, certain funds may also enter into unfunded floating rate loan interests (“commitments”). In connection with these commitments, a fund earns a commitment fee, typically set as a percentage of the commitment amount. Such fee income, which is included in interest income in the Statements of Operations, is recognized ratably over the commitment period. Unfunded floating rate loan interests are marked-to-market daily, and any unrealized appreciation (depreciation) is included in the Statements of Assets and Liabilities and Statements of Operations. As of period end, the CoreAlpha Bond Fund had the following unfunded floating rate loan interests:
| | | | | | | | | | | | | | | | |
| Borrower | | Par | | | Commitment
Amount | | | Value | | | Unrealized
Depreciation | |
BMC Software Finance, Inc. | | $ | 288,534 | | | $ | 283,773 | | | $ | 271,222 | | | $ | (12,551 | ) |
Forward Commitments and When-Issued Delayed Delivery Securities: Certain funds may purchase securities on a when-issued basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. A fund may purchase securities under such conditions with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, a fund may be required to pay more at settlement than the security is worth. In addition, a fund is not entitled to any of the interest earned prior to settlement. When purchasing a security on a delayed delivery basis, a fund assumes the rights and risks of ownership of the security, including the risk of price and yield fluctuations. In the event of default by the counterparty, a fund’s maximum amount of loss is the unrealized appreciation of unsettled when-issued transactions.
TBA Commitments: TBA commitments are forward agreements for the purchase or sale of mortgage-backed securities for a fixed price, with payment and delivery on an agreed upon future settlement date. The specific securities to be delivered are not identified at the trade date. However, delivered securities must meet specified terms,
| | |
| 52 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Notes to Financial Statements (unaudited) (continued)
including issuer, rate and mortgage terms. When entering into TBA commitments, a fund may take possession of or deliver the underlying mortgage-backed securities but can extend the settlement or roll the transaction. TBA commitments involve a risk of loss if the value of the security to be purchased or sold declines or increases, respectively, prior to settlement date.
In order to better define contractual rights and to secure rights that will help a fund mitigate their counterparty risk, TBA commitments may be entered into by a fund under Master Securities Forward Transaction Agreements (each, an “MSFTA”). An MSFTA typically contains, among other things, collateral posting terms and netting provisions in the event of default and/or termination event. The collateral requirements are typically calculated by netting the mark-to-market amount for each transaction under such agreement and comparing that amount to the value of the collateral currently pledged by a fund and the counterparty. Cash collateral that has been pledged to cover the obligations of a fund and cash collateral received from the counterparty, if any, is reported separately on the Statements of Assets and Liabilities as cash pledged as collateral for TBA commitments or cash received as collateral for TBA commitments, respectively. Non-cash collateral pledged by a fund, if any, is noted in the Schedules of Investments. Typically, a fund is permitted to sell, re-pledge or use the collateral it receives; however, the counterparty is not permitted to do so. To the extent amounts due to a fund is not fully collateralized, contractually or otherwise, a fund bears the risk of loss from counterparty non-performance.
Mortgage Dollar Roll Transactions: Certain funds may sell TBA mortgage-backed securities and simultaneously contract to repurchase substantially similar (i.e., same type, coupon and maturity) securities on a specific future date at an agreed upon price. During the period between the sale and repurchase, a fund is not entitled to receive interest and principal payments on the securities sold. Mortgage dollar roll transactions are treated as purchases and sales and realize gains and losses on these transactions. Mortgage dollar rolls involve the risk that the market value of the securities that a fund is required to purchase may decline below the agreed upon repurchase price of those securities.
| 5. | DERIVATIVE FINANCIAL INSTRUMENTS |
The Funds engage in various portfolio investment strategies using derivative contracts both to increase the returns of the Funds and/or to manage their exposure to certain risks such as credit risk, equity risk, interest rate risk, foreign currency exchange rate risk, commodity price risk or other risks (e.g., inflation risk). Derivative financial instruments categorized by risk exposure are included in the Schedules of Investments. These contracts may be transacted on an exchange or OTC.
Futures Contracts: Futures contracts are purchased or sold to gain exposure to, or manage exposure to, changes in interest rates (interest rate risk), changes in the value of equity securities (equity risk) or foreign currencies (foreign currency exchange rate risk).
Futures contracts are agreements between the Funds and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and on a specified date. Depending on the terms of a contract, it is settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash amount on the settlement date. Upon entering into a futures contract, the Funds are required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contract’s size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract.
Securities deposited as initial margin are designated in the Schedules of Investments and cash deposited, if any, is shown as cash pledged for futures contracts in the Statements of Assets and Liabilities. Pursuant to the contract, the Funds agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation (depreciation) and, if any, shown as variation margin receivable (or payable) on futures contracts in the Statements of Assets and Liabilities. When the contract is closed, a realized gain or loss is recorded in the Statements of Operations equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of futures contracts involves the risk of an imperfect correlation in the movements in the price of futures contracts and interest, foreign currency exchange rates or underlying assets.
Forward Foreign Currency Exchange Contracts: Forward foreign currency exchange contracts are entered into to gain or reduce exposure to foreign currencies (foreign currency exchange rate risk).
A forward foreign currency exchange contract is an agreement between two parties to buy and sell a currency at a set exchange rate on a specified date. These contracts help to manage the overall exposure to the currencies in which some of the investments held by the Funds are denominated and in some cases, may be used to obtain exposure to a particular market.
The contract is marked-to-market daily and the change in market value is recorded as unrealized appreciation (depreciation) in the Statements of Assets and Liabilities. When a contract is closed, a realized gain or loss is recorded in the Statements of Operations equal to the difference between the value at the time it was opened and the value at the time it was closed. Non-deliverable forward foreign currency exchange contracts are settled with the counterparty in cash without the delivery of foreign currency. The use of forward foreign currency exchange contracts involves the risk that the value of a forward foreign currency exchange contract changes unfavorably due to movements in the value of the referenced foreign currencies.
Master Netting Arrangements: In order to define their contractual rights and to secure rights that will help them mitigate their counterparty risk, the Funds may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with their counterparties. An ISDA Master Agreement is a bilateral agreement between each Fund and a counterparty that governs certain OTC derivatives and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, each Fund may, under certain circumstances, offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default including the bankruptcy or insolvency of the counterparty. Bankruptcy or insolvency laws of a particular jurisdiction may restrict or prohibit the right of offset in bankruptcy, insolvency or other events.
Collateral Requirements: For derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the mark-to-market amount for each transaction under such agreement and comparing that amount to the value of any collateral currently pledged by the Fund and the counterparty.
| | | | |
| NOTESTO FINANCIAL STATEMENTS | | | 53 | |
Notes to Financial Statements (unaudited) (continued)
Cash collateral that has been pledged to cover obligations of the Funds and cash collateral received from the counterparty, if any, is reported separately on the Statements of Assets and Liabilities as cash pledged as collateral and cash received as collateral, respectively. Non-cash collateral pledged by the Funds, if any, is noted in the Schedules of Investments. Generally, the amount of collateral due from or to a counterparty is subject to a certain minimum transfer amount threshold before a transfer is required, which is determined at the close of business of the Funds. Any additional required collateral is delivered to/pledged by the Funds on the next business day. Typically, the counterparty is not permitted to sell, re-pledge or use cash and non-cash collateral it receives. A Fund generally agrees not to use non-cash collateral that it receives but may, absent default or certain other circumstances defined in the underlying ISDA Master Agreement, be permitted to use cash collateral received. In such cases, interest may be paid pursuant to the collateral arrangement with the counterparty. To the extent amounts due to the Funds from their counterparties are not fully collateralized, they bear the risk of loss from counterparty non-performance. Likewise, to the extent the Funds have delivered collateral to a counterparty and stand ready to perform under the terms of their agreement with such counterparty, they bear the risk of loss from a counterparty in the amount of the value of the collateral in the event the counterparty fails to return such collateral. Based on the terms of agreements, collateral may not be required for all derivative contracts.
For financial reporting purposes, the Funds do not offset derivative assets and derivative liabilities that are subject to netting arrangements, if any, in the Statements of Assets and Liabilities.
| 6. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock, Inc. (“BlackRock”) for 1940 Act purposes.
Investment Advisory: The Corporation, on behalf of the Funds, entered into an Investment Advisory Agreement with the Manager, the Funds’ investment adviser, an indirect, wholly-owned subsidiary of BlackRock, to provide investment advisory and administrative services. The Manager is responsible for the management of each Fund’s portfolio and provides the personnel, facilities, equipment and certain other services necessary to the operations of each Fund.
For such services, each Fund pays the Manager a monthly fee at an annual rate equal to the following percentages of the average daily value of each Fund’s net assets:
| | | | | | | | | | | | | | | | |
| Average Daily Net Assets | | Capital
Appreciation
Fund | | | CoreAlpha
Bond
Fund | | | Equity
Dividend
Fund | | | International
Fund | |
Not exceeding $1 Billion | | | 0.80 | % | | | 0.40 | % | | | 0.70 | % | | | 0.90 | % |
$1 Billion — $3 Billion | | | 0.75 | | | | 0.38 | | | | 0.66 | | | | 0.85 | |
$3 Billion — $5 Billion | | | 0.72 | | | | 0.36 | | | | 0.63 | | | | 0.81 | |
$5 Billion — $10 Billion | | | 0.70 | | | | 0.35 | | | | 0.61 | | | | 0.78 | |
Greater than $10 Billion | | | 0.68 | | | | 0.34 | | | | 0.60 | | | | 0.77 | |
With respect to Capital Appreciation Fund, Equity Dividend Fund and International Fund, the Manager entered into separate sub-advisery agreements. The Manager paid each sub-adviser for services it provided a monthly fee at the following annual rates, based on each Fund’s average daily net assets:
| | | | |
| | | Sub-Adviser | | Sub-Advisery Fee |
Capital Appreciation Fund | | Janus Capital Management LLC | | 0.40% of first $200 million |
| | | | 0.35% above $200 million |
Equity Dividend Fund | | Invesco Advisers, Inc. | | 0.35% |
International Fund | | Massachusetts Financial Services Company | | 0.45% |
Effective November 28, 2017, the sub-advisery agreements between the Manager and Invesco Advisers, Inc., Janus Capital Management LLC and Massachusetts Financial Services Company were terminated.
Effective November 28, 2017, with respect to the International Fund, the Manager entered into a separate sub-advisery agreement with BlackRock International Limited (“BIL”), an affiliate of the Manager. The Manager pays BIL, for services it provides, a monthly fee that is a percentage of the investment advisory fees paid by each Fund to the Manager.
Service and Distribution Fees: The Corporation, on behalf of the Funds, entered into a Distribution Agreement and a Distribution and Service Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of the Manager. Pursuant to the Distribution and Service Plan and in accordance with Rule 12b-1 under the 1940 Act, each Fund pays BRIL ongoing service and distribution fees. The fees are accrued daily and paid monthly at annual rates based upon the average daily net assets of the relevant share class of each Fund as follows:
| | | | | | | | | | | | | | | | |
| | | Service Fees | |
| | | Capital
Appreciation Fund | | | CoreAlpha
Bond Fund | | | Equity Dividend Fund | | | International Fund | |
Investor A | | | 0.25 | % | | | 0.25 | % | | | 0.25 | % | | | 0.25 | % |
Investor C | | | 0.25 | | | | 0.25 | | | | 0.25 | | | | 0.25 | |
| | | Distribution Fees | |
Investor C | | | 0.75 | % | | | 0.55 | % | | | 0.75 | % | | | 0.75 | % |
BRIL and broker-dealers, pursuant to sub-agreements with BRIL, provide shareholder servicing and distribution services to the Funds. The ongoing service and/or distribution fee compensates BRIL and each broker-dealer for providing shareholder servicing and/or distribution related services to shareholders.
| | |
| 54 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Notes to Financial Statements (unaudited) (continued)
For the six months ended November 30, 2017, the following table shows the class specific service and distribution fees borne directly by each share class of each Fund:
| | | | | | | | | | | | |
| Service and Distribution Fees | | Investor A | | | Investor C | | | Total | |
Capital Appreciation Fund | | $ | 73,264 | | | $ | 166,907 | | | $ | 240,171 | |
CoreAlpha Bond Fund | | | 105,461 | | | | 226,839 | | | | 332,300 | |
Equity Dividend Fund | | | 72,445 | | | | 163,929 | | | | 236,374 | |
International Fund | | | 85,999 | | | | 194,213 | | | | 280,212 | |
Transfer Agent: For the six months ended November 30, 2017, the following table shows the class specific transfer agent fees borne directly by each class of each Fund:
| | | | | | | | | | | | | | | | |
| | | Institutional | | | Investor A | | | Investor C | | | Total | |
Capital Appreciation Fund | | $ | 2,640 | | | $ | 31,925 | | | $ | 24,649 | | | $ | 59,214 | |
CoreAlpha Bond Fund | | | 3,750 | | | | 46,517 | | | | 39,562 | | | | 89,829 | |
Equity Dividend Fund | | | 2,532 | | | | 31,550 | | | | 23,406 | | | | 57,488 | |
International Fund | | | 2,943 | | | | 36,194 | | | | 27,575 | | | | 66,712 | |
In addition, the Funds pay the transfer agent, which is not an affiliate, a fee for the issuance, transfer and redemption of shares and the opening and maintenance of shareholder accounts, which is included in transfer agent in the Statements of Operations.
Other Fees: For the six months ended November 30, 2017, affiliates earned underwriting discounts, direct commissions and dealer concessions on sales of each Fund’s Investor A Shares as follows:
| | | | | | | | | | | | | | | | |
| | | Capital
Appreciation
Fund | | | CoreAlpha
Bond
Fund | | | Equity
Dividend
Fund | | | International
Fund | |
Investor A | | $ | 26 | | | $ | 2 | | | $ | — | | | $ | 32 | |
For the six months ended November 30, 2017, affiliates received CDSCs as follows:
| | | | | | | | | | | | | | | | |
| | | Capital
Appreciation
Fund | | | CoreAlpha
Bond
Fund | | | Equity
Dividend
Fund | | | International
Fund | |
Investor A | | $ | 16 | | | $ | 120 | | | $ | — | | | $ | — | |
Investor C | | | 580 | | | | 1,639 | | | | 559 | | | | 864 | |
Expense Limitations, Waivers and Reimbursements: Effective November 28, 2017, the Manager, for the following Funds, contractually agreed to waive a portion of its investment advisory fees so that the annual management fee rate of each Fund’s average daily net assets is as follows:
| | | | | | | | | | | | | | |
| Capital Appreciation Fund | | | | | Equity Dividend Fund | | | | | International Fund | |
| | 0.65 | % | | | | | 0.60 | % | | | | | 0.75 | % |
Each contractual agreement may be terminated upon 90 days’ notice by a majority of the independent directors who are not “interested persons” of the Funds, as defined in the 1940 Act (“Independent Directors”) or by a vote of a majority of the outstanding voting securities of the Fund.
Prior to November 28, 2017, the Manager, for the following Funds, voluntarily agreed to waive a portion of its investment advisory fees equal to the annual rate of each Fund’s average daily net assets as follows:
| | | | | | | | | | | | | | |
| Capital Appreciation Fund | | | | | Equity Dividend Fund | | | | | International Fund | |
| | 0.05 | % | | | | | 0.05 | % | | | | | 0.10 | % |
Prior to November 28, 2017, with respect to Capital Appreciation Fund, the Manager contractually agreed to waive a portion of its investment advisory fee equal to 0.05% of the Fund’s average daily net assets over $200 million. Effective November 28, 2017, this contractual waiver was terminated by the Manager.
With respect to CoreAlpha Bond Fund, effective March 10, 2017, the Manager contractually agreed to waive a portion of its investment advisory fee as a percentage of the Fund’s average daily net assets as to limit the advisory fee to 0.32% through September 30, 2018. The contractual agreement may be terminated upon 90 days’ notice by a majority of the Independent Directors or by a vote of a majority of the outstanding voting securities of the Fund. These amounts are shown as fees waived by the Manager in the Statements of Operations.
For the six month ended November 30, 2017, the amounts waived were as follows:
| | | | | | | | | | | | | | | | |
| | | Capital
Appreciation
Fund | | | CoreAlpha
Bond
Fund | | | Equity
Dividend
Fund | | | International
Fund | |
Amount waived | | $ | 24,697 | | | $ | 58,864 | | | $ | 23,993 | | | $ | 56,391 | |
| | | | |
| NOTESTO FINANCIAL STATEMENTS | | | 55 | |
Notes to Financial Statements (unaudited) (continued)
With respect to each Fund, the Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Fund pays to the Manager indirectly through its investment in affiliated money market funds (the “affiliated money market fund waiver”). The amount of waivers and/or reimbursements of fees and expenses made pursuant to the expense limitation caps will be reduced by the amount of the affiliated money market fund waiver. These amounts are shown as fees waived by the Manager in the Statements of Operations. For the six months ended November 30, 2017, the amounts waived were as follows:
| | | | | | | | | | | | |
| | | Capital
Appreciation
Fund | | | Equity
Dividend
Fund | | | CoreAlpha
Bond
Fund | |
Amount waived | | $ | 2 | | | $ | 4 | | | $ | 4,127 | |
The Manager has contractually agreed to waive its investment advisory fee with respect to any portion of each Fund’s assets invested in affiliated equity and fixed-income mutual funds and affiliated exchange-traded funds that have a contractual management fee, through September 30, 2019, except with respect to CoreAlpha Bond Fund which is through September 30, 2018. The contractual agreement may be terminated upon 90 days’ notice by a majority of the Independent Directors or by a vote of a majority of the outstanding voting securities of a Fund. For the six months ended November 30, 2017, there were no fees waived by the Manager.
For the six months ended November 30, 2017, the Funds reimbursed the Manager for certain accounting services, which is included in accounting services in the Statements of Operations. The reimbursements were as follows:
| | | | | | | | | | | | | | | | |
| | | Capital
Appreciation
Fund | | | CoreAlpha
Bond
Fund | | | Equity
Dividend
Fund | | | International
Fund | |
Amount reimbursed | | $ | 732 | | | $ | 1,190 | | | $ | 732 | | | $ | 824 | |
With respect to each Fund, the Manager contractually agreed to waive and/or reimburse fees or expenses in order to limit expenses, excluding interest expense, dividend expense, tax expense, acquired fund fees and expenses, and certain other fund expenses, which constitute extraordinary expenses not incurred in the ordinary course of each Fund’s business (“expense limitation”). The expense limitation as a percentage of average daily net assets are as follows:
| | | | | | | | | | | | | | | | |
| Share Class | | Capital
Appreciation Fund | | | CoreAlpha
Bond Fund | | | Equity Dividend Fund | | | International Fund | |
Institutional | | | 1.95 | % | | | 1.95 | % | | | 1.95 | % | | | 1.95 | % |
Investor A | | | 2.20 | | | | 2.20 | | | | 2.20 | | | | 2.20 | |
Investor C | | | 2.95 | | | | 2.75 | | | | 2.95 | | | | 2.95 | |
The Manager has agreed not to reduce or discontinue these contractual expense limitations through September 30, 2019, except with respect to CoreAlpha Bond Fund which is through September 30, 2018, unless approved by the Board, including a majority of the Independent Directors or by a vote of a majority of the outstanding voting securities of the Fund. For the six months ended November 30, 2017, there were no fees waived and/or reimbursed by the Manager pursuant to this agreement.
Interfund Lending: In accordance with an exemptive order (the “Order”) from the U.S. Securities and Exchange Commission, each Fund may participate in a joint lending and borrowing facility for temporary purposes (the “Interfund Lending Program”), subject to compliance with the terms and conditions of the Order, and to the extent permitted by each Fund’s investment policies and restrictions. Each Fund is currently permitted to borrow and lend under the Interfund Lending Program.
A lending BlackRock fund may lend in aggregate up to 15% of its net assets, but may not lend more than 5% of its net assets to any one borrowing fund through the Interfund Lending Program. A borrowing BlackRock fund may not borrow through the Interfund Lending Program or from any other source more than 33 1/3% of its total assets (or any lower threshold provided for by the investment restrictions). If a borrowing BlackRock fund’s total outstanding borrowings exceed 10% of its total assets, each of its outstanding interfund loans will be subject to collateralization of at least 102% of the outstanding principal value of the loan. All interfund loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the highest current overnight repurchase agreement rate available to a lending fund and the bank loan rate, as calculated according to a formula established by the Board.
During the six months ended November 30, 2017, the Funds did not participate in the Interfund Lending Program.
Officers and Directors: Certain directors and/or officers of the Funds are directors and/or officers of BlackRock or its affiliates. The Funds reimburse the Manager for a portion of the compensation paid to the Fund’s Chief Compliance Officer, which is included in Directors and Officer in the Statements of Operations.
Other Transactions: The Funds may purchase securities from, or sell securities to, an affiliated fund provided the affiliation is due solely to having a common investment adviser, common officers, or common directors. For the six month ended November 30, 2017, the purchase and sale transactions and any net realized gains (losses) with an affiliated fund in compliance with Rule 17a-7 under the 1940 Act were as follows:
| | | | | | | | | | | | |
| | | Purchases | | | Sales | | | Net Realized Gain (Loss) | |
Equity Dividend Fund | | $ | 78,103 | | | $ | — | | | $ | — | |
International Fund | | | 1,422 | | | | 488,780 | | | | 98,163 | |
| | |
| 56 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Notes to Financial Statements (unaudited) (continued)
For the six months ended November 30, 2017, purchases and sales of investments, including mortgage dollar rolls and excluding short-term securities were as follows:
| | | | | | | | | | | | | | | | |
| Purchases | | Capital
Appreciation
Fund | | | CoreAlpha
Bond
Fund | | | Equity
Dividend
Fund | | | International
Fund | |
Non-U.S. Government Securities | | $ | 76,644,550 | | | $ | 229,616,048 | | | $ | 55,347,942 | | | $ | 103,303,811 | |
U.S. Government Securities | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
| | $ | 76,644,550 | | | $ | 229,616,048 | | | $ | 55,347,942 | | | $ | 103,303,811 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Sales | | Capital
Appreciation
Fund | | | CoreAlpha
Bond
Fund | | | Equity
Dividend
Fund | | | International
Fund | |
Non-U.S. Government Securities | | $ | 106,379,193 | | | $ | 248,475,515 | | | $ | 85,139,864 | | | $ | 140,278,998 | |
U.S. Government Securities | | | — | | | | 17,973,614 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
| | $ | 106,379,193 | | | $ | 266,449,129 | | | $ | 85,139,864 | | | $ | 140,278,998 | |
| | | | | | | | | | | | | | | | |
For the six months ended November 30, 2017, purchases and sales related to mortgage dollar rolls for CoreAlpha Bond Fund were $106,313,029 and $107,086,166, respectively.
It is each Fund’s policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies, and to distribute substantially all of its taxable income to its shareholders. Therefore, no U.S. federal income tax provision is required.
Each Fund files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on each Fund’s U.S. federal tax returns generally remains open for each of the four years ended May 31, 2017. The statutes of limitations on each Fund’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.
Management has analyzed tax laws and regulations and their application to the Funds as of November 30, 2017, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.
As of May 31, 2017, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:
| | | | | | | | |
| Expires May 31, | | CoreAlpha Bond
Fund | | | International Fund | |
No expiration date(a) | | $ | 2,037,017 | | | $ | 6,617,924 | |
2018 | | | — | | | | 30,473,505 | |
| | | | | | | | |
| | $ | 2,037,017 | | | $ | 37,091,429 | |
| | | | | | | | |
| | (a) | Must be utilized prior to losses subject to expiration. | |
As of November 30, 2017, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:
| | | | | | | | | | | | | | | | |
| | | Capital
Appreciation Fund | | | CoreAlpha
Bond Fund | | | Equity Dividend Fund | | | International Fund | |
Tax cost | | $ | 80,315,069 | | | $ | 145,562,722 | | | $ | 79,121,910 | | | $ | 96,129,690 | |
| | | | | | | | | | | | | | | | |
Gross unrealized appreciation | | $ | 12,813,049 | | | $ | 2,036,206 | | | $ | 16,747,677 | | | $ | 2,379,767 | |
Gross unrealized depreciation | | | (1,352,907 | ) | | | (1,001,603 | ) | | | (1,628,257 | ) | | | (951,495 | ) |
| | | | | | | | | | | | | | | | |
Net unrealized appreciation | | $ | 11,460,142 | | | $ | 1,034,603 | | | $ | 15,119,420 | | | $ | 1,428,272 | |
| | | | | | | | | | | | | | | | |
The Corporation, on behalf of the Funds, along with certain other funds managed by the Manager and its affiliates (“Participating Funds”), is a party to a 364-day, $2.1 billion credit agreement with a group of lenders. Under this agreement, the Funds may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Funds, can borrow up to an aggregate commitment amount of $1.6 billion at any time outstanding, subject to asset coverage and other limitations as specified in the agreement. The credit agreement has the following terms: a fee of 0.12% per annum on unused commitment amounts and interest at a rate equal to the higher of (a) one-month LIBOR (but, in any event, not less than 0.00%) on the date the loan is made plus 0.80% per annum or (b) the Fed Funds rate (but, in any event, not less than 0.00%) in effect from time to time plus 0.80% per annum on amounts borrowed. The agreement
| | | | |
| NOTESTO FINANCIAL STATEMENTS | | | 57 | |
Notes to Financial Statements (unaudited) (continued)
expires in April 2018 unless extended or renewed. Participating Funds paid administration, legal and arrangement fees, which, if applicable, are included in miscellaneous expenses in the Statements of Operations. These fees were allocated among such funds based upon portions of the aggregate commitment available to them and relative net assets of Participating Funds. During the six months ended November 30, 2017, the Funds did not borrow under the credit agreement.
Many municipalities insure repayment of their bonds, which may reduce the potential for loss due to credit risk. The market value of these bonds may fluctuate for other reasons, including market perception of the value of such insurance, and there is no guarantee that the insurer will meet its obligation.
Inventories of municipal bonds held by brokers and dealers may decrease, which would lessen their ability to make a market in these securities. Such a reduction in market making capacity could potentially decrease a Fund’s ability to buy or sell bonds. As a result, a Fund may sell a security at a lower price, sell other securities to raise cash, or give up an investment opportunity, any of which could have a negative impact on performance. If a Fund needed to sell large blocks of bonds, those sales could further reduce the bonds’ prices and impact performance.
In the normal course of business, the certain Funds invest in securities or other instruments and may enter into certain transactions, and such activities subject each Fund to various risks, including among others, fluctuations in the market (market risk) or failure of an issuer to meet all of its obligations. The value of securities or other instruments may also be affected by various factors, including, without limitation: (i) the general economy; (ii) the overall market as well as local, regional or global political and/or social instability; (iii) regulation, taxation or international tax treaties between various countries; or (iv) currency, interest rate and price fluctuations. Each Fund’s prospectus provides details of the risks to which each Fund is subject.
Each Fund may be exposed to prepayment risk, which is the risk that borrowers may exercise their option to prepay principal earlier than scheduled during periods of declining interest rates, which would force each Fund to reinvest in lower yielding securities. Each Fund may also be exposed to reinvestment risk, which is the risk that income from each Fund’s portfolio will decline if each Fund invests the proceeds from matured, traded or called fixed-income securities at market interest rates that are below each Fund portfolio’s current earnings rate.
Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. A Fund may invest in illiquid investments and may experience difficulty in selling those investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause each Fund’s NAV to experience significant increases or decreases over short periods of time. If there is a general decline in the securities and other markets, the NAV of a Fund may lose value, regardless of the individual results of the securities and other instruments in which a Fund invests.
The price a Fund could receive upon the sale of any particular portfolio investment may differ from a Fund’s valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair valuation technique or a price provided by an independent pricing service. Changes to significant unobservable inputs and assumptions (i.e., publicly traded company multiples, growth rate, time to exit) due to the lack of observable inputs may significantly impact the resulting fair value and therefore a Fund’s results of operations. As a result, the price received upon the sale of an investment may be less than the value ascribed by a Fund, and a Fund could realize a greater than expected loss or lesser than expected gain upon the sale of the investment. A Fund’s ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third party service providers.
Counterparty Credit Risk: Similar to issuer credit risk, the Funds may be exposed to counterparty credit risk, or the risk that an entity may fail to or be unable to perform on its commitments related to unsettled or open transactions. The Funds manage counterparty credit risk by entering into transactions only with counterparties that the Manager believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Funds’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Funds.
A derivative contract may suffer a mark-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.
A Fund’s risk of loss from counterparty credit risk on OTC derivatives is generally limited to the aggregate unrealized gain less the value of any collateral held by such Fund.
With exchange-traded futures, there is less counterparty credit risk to the Funds since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Funds.
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| 58 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Notes to Financial Statements (unaudited) (continued)
Concentration Risk: As of period end, Capital Appreciation Fund invested a significant portion of its assets in securities in the information technology sector. As of period end, Equity Dividend Fund invested a significant portion of its assets in securities in the financials sector. Changes in economic conditions affecting such sector would have a greater impact on the Fund and could affect the value, income and/or liquidity of positions in such securities.
CoreAlpha Bond Fund invests a significant portion of its assets in fixed-income securities and/or uses derivatives tied to the fixed-income markets. Changes in market interest rates or economic conditions may affect the value and/or liquidity of such investments. Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall and decrease as interest rates rise. The Fund may be subject to a greater risk of rising interest rates due to the current period of historically low rates.
International Fund invests a substantial amount of its assets in issuers located in a single country or a limited number of countries. When the Fund concentrates its investments in this manner, it assumes the risk that economic, political and social conditions in those countries may have a significant impact on their investment performance. Foreign issuers may not be subject to the same uniform accounting, auditing and financial reporting standards and practices as used in the United States. Foreign securities markets may also be less liquid, more volatile and less subject to governmental supervision not typically associated with investing in U.S. securities. Investment percentages in specific countries are presented in the Schedule of Investments.
International Fund invests a significant portion of its assets in securities of issuers located in Europe or with significant exposure to European issuers or countries. The European financial markets have recently experienced volatility and adverse trends due to concerns about economic downturns in, or rising government debt levels of, several European countries. These events may spread to other countries in Europe and may affect the value and liquidity of certain of the Fund’s investments.
The United Kingdom voted on June 23, 2016 to withdraw from the European Union, which may introduce significant new uncertainties and instability in the financial markets across Europe.
International Fund invests a significant portion of its assets in securities of issuers located in Asia or with significant exposure to Asian issuers or countries. The Asian financial markets have recently experienced volatility and adverse trends due to concerns in several Asian countries regarding monetary policy, government intervention in the markets, rising government debt levels or economic downturns. These events may spread to other countries in Asia and may affect the value and liquidity of certain of the Fund’s investments.
| 11. | CAPITAL SHARE TRANSACTIONS |
Transactions in capital shares for each class were as follows:
| | | | | | | | | | | | | | | | |
| | | Six Months Ended
11/30/17 | | | Year Ended
05/31/17 | |
| Capital Appreciation Fund | | Shares | | | Amount | | | Shares | | | Amount | |
Institutional | | | | | | | | | | | | | | | | |
Shares sold | | | 1,452 | | | $ | 23,248 | | | | 24,535 | | | $ | 368,235 | |
Shares issued in reinvestment of distributions | | | 9,276 | | | | 150,644 | | | | 18,043 | | | | 267,519 | |
Shares redeemed | | | (51,891 | ) | | | (854,918 | ) | | | (111,748 | ) | | | (1,694,294 | ) |
| | | | | | | | | | | | | | | | |
Net decrease | | | (41,163 | ) | | $ | (681,026 | ) | | | (69,170 | ) | | $ | (1,058,540 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Investor A | | | | | | | | | | | | | | | | |
Shares sold | | | 117,972 | | | $ | 1,874,684 | | | | 1,201,434 | | | $ | 18,782,465 | |
Shares issued in reinvestment of distributions | | | 129,265 | | | | 2,025,589 | | | | 198,963 | | | | 2,853,634 | |
Shares redeemed | | | (968,847 | ) | | | (15,370,936 | ) | | | (1,032,825 | ) | | | (15,150,403 | ) |
| | | | | | | | | | | | | | | | |
Net increase (decrease) | | | (721,610 | ) | | $ | (11,470,663 | ) | | | 367,572 | | | $ | 6,485,696 | |
| | | | | | | | | | | | | | | | |
| | | | |
Investor C | | | | | | | | | | | | | | | | |
Shares sold | | | 5,206 | | | $ | 74,585 | | | | 255,933 | | | $ | 3,335,242 | |
Shares issued in reinvestment of distributions | | | 82,993 | | | | 1,163,559 | | | | 320,018 | | | | 4,133,904 | |
Shares redeemed | | | (941,503 | ) | | | (13,355,869 | ) | | | (3,573,476 | ) | | | (48,203,577 | ) |
| | | | | | | | | | | | | | | | |
Net decrease | | | (853,304 | ) | | $ | (12,117,725 | ) | | | (2,997,525 | ) | | $ | (40,734,431 | ) |
| | | | | | | | | | | | | | | | |
Total Net Decrease | | | (1,616,077 | ) | | $ | (24,269,414 | ) | | | (2,699,123 | ) | | $ | (35,307,275 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
| NOTESTO FINANCIAL STATEMENTS | | | 59 | |
Notes to Financial Statements (unaudited) (continued)
| | | | | | | | | | | | | | | | |
| | | Six Months Ended
11/30/17 | | | Year Ended
05/31/17 | |
| CoreAlpha Bond Fund | | Shares | | | Amount | | | Shares | | | Amount | |
Institutional | | | | | | | | | | | | | | | | |
Shares sold | | | 1,293 | | | $ | 13,295 | | | | 108,774 | | | $ | 1,115,796 | |
Shares issued in reinvestment of distributions | | | 6,898 | | | | 70,731 | | | | 15,011 | | | | 153,769 | |
Shares redeemed | | | (118,162 | ) | | | (1,213,249 | ) | | | (191,645 | ) | | | (1,961,167 | ) |
| | | | | | | | | | | | | | | | |
Net decrease | | | (109,971 | ) | | $ | (1,129,223 | ) | | | (67,860 | ) | | $ | (691,602 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Investor A | | | | | | | | | | | | | | | | |
Shares sold | | | 214,526 | | | $ | 2,203,113 | | | | 2,724,501 | | | $ | 27,921,810 | |
Shares issued in reinvestment of distributions | | | 88,040 | | | | 903,194 | | | | 162,113 | | | | 1,661,463 | |
Shares redeemed | | | (2,227,307 | ) | | | (22,867,770 | ) | | | (2,158,779 | ) | | | (22,106,039 | ) |
| | | | | | | | | | | | | | | | |
Net increase (decrease) | | | (1,924,741 | ) | | $ | (19,761,463 | ) | | | 727,835 | | | $ | 7,477,234 | |
| | | | | | | | | | | | | | | | |
| | | | |
Investor C | | | | | | | | | | | | | | | | |
Shares sold | | | 31,005 | | | $ | 317,542 | | | | 999,804 | | | $ | 10,235,950 | |
Shares issued in reinvestment of distributions | | | 44,003 | | | | 451,456 | | | | 153,159 | | | | 1,569,733 | |
Shares redeemed | | | (2,157,714 | ) | | | (22,153,947 | ) | | | (6,732,186 | ) | | | (68,840,028 | ) |
| | | | | | | | | | | | | | | | |
Net decrease | | | (2,082,706 | ) | | $ | (21,384,949 | ) | | | (5,579,223 | ) | | $ | (57,034,345 | ) |
| | | | | | | | | | | | | | | | |
Total Net Decrease | | | (4,117,418 | ) | | $ | (42,275,635 | ) | | | (4,919,248 | ) | | $ | (50,248,713 | ) |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Equity Dividend Fund | | Shares | | | Amount | | | Shares | | | Amount | |
Institutional | | | | | | | | | | | | | | | | |
Shares sold | | | 1,162 | | | $ | 19,382 | | | | 19,138 | | | $ | 304,512 | |
Shares issued in reinvestment of distributions | | | 11,058 | | | | 182,569 | | | | 15,217 | | | | 250,270 | |
Shares redeemed | | | (46,910 | ) | | | (795,606 | ) | | | (120,083 | ) | | | (1,953,413 | ) |
| | | | | | | | | | | | | | | | |
Net decrease | | | (34,690 | ) | | $ | (593,655 | ) | | | (85,728 | ) | | $ | (1,398,631 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Investor A | | | | | | | | | | | | | | | | |
Shares sold | | | 137,617 | | | $ | 2,311,596 | | | | 1,107,273 | | | $ | 18,364,034 | |
Shares issued in reinvestment of distributions | | | 146,438 | | | | 2,394,260 | | | | 150,075 | | | | 2,449,109 | |
Shares redeemed | | | (844,601 | ) | | | (14,238,780 | ) | | | (1,132,968 | ) | | | (18,310,260 | ) |
| | | | | | | | | | | | | | | | |
Net increase (decrease) | | | (560,546 | ) | | $ | (9,532,924 | ) | | | 124,380 | | | $ | 2,502,883 | |
| | | | | | | | | | | | | | | | |
| | | | |
Investor C | | | | | | | | | | | | | | | | |
Shares sold | | | 10,778 | | | $ | 178,277 | | | | 165,827 | | | $ | 2,548,972 | |
Shares issued in reinvestment of distributions | | | 90,145 | | | | 1,445,018 | | | | 170,041 | | | | 2,737,667 | |
Shares redeemed | | | (775,450 | ) | | | (12,801,174 | ) | | | (3,254,931 | ) | | | (52,284,120 | ) |
| | | | | | | | | | | | | | | | |
Net decrease | | | (674,527 | ) | | $ | (11,177,879 | ) | | | (2,919,063 | ) | | $ | (46,997,481 | ) |
| | | | | | | | | | | | | | | | |
Total Net Decrease | | | (1,269,763 | ) | | $ | (21,304,458 | ) | | | (2,880,411 | ) | | $ | (45,893,229 | ) |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| International Fund | | Shares | | | Amount | | | Shares | | | Amount | |
Institutional | | | | | | | | | | | | | | | | |
Shares sold | | | 123 | | | $ | 1,567 | | | | 46,893 | | | $ | 532,671 | |
Shares issued in reinvestment of distributions | | | 4,285 | | | | 56,044 | | | | 6,464 | | | | 71,875 | |
Shares redeemed | | | (65,388 | ) | | | (859,857 | ) | | | (160,013 | ) | | | (1,848,542 | ) |
| | | | | | | | | | | | | | | | |
Net decrease | | | (60,980 | ) | | $ | (802,246 | ) | | | (106,656 | ) | | $ | (1,243,996 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Investor A | | | | | | | | | | | | | | | | |
Shares sold | | | 176,669 | | | $ | 2,330,219 | | | | 1,986,670 | | | $ | 24,815,183 | |
Shares issued in reinvestment of distributions | | | 53,387 | | | | 694,577 | | | | 56,966 | | | | 630,613 | |
Shares redeemed | | | (1,424,038 | ) | | | (18,690,453 | ) | | | (1,534,616 | ) | | | (17,645,886 | ) |
| | | | | | | | | | | | | | | | |
Net increase (decrease) | | | (1,193,982 | ) | | $ | (15,665,657 | ) | | | 509,020 | | | $ | 7,799,910 | |
| | | | | | | | | | | | | | | | |
| | | | |
Investor C | | | | | | | | | | | | | | | | |
Shares sold | | | 5,851 | | | $ | 77,032 | | | | 536,056 | | | $ | 5,975,626 | |
Shares issued in reinvestment of distributions | | | — | | | | — | | | | 22,389 | | | | 246,496 | |
Shares redeemed | | | (1,206,347 | ) | | | (15,737,964 | ) | | | (4,868,252 | ) | | | (57,515,255 | ) |
| | | | | | | | | | | | | | | | |
Net decrease | | | (1,200,496 | ) | | $ | (15,660,932 | ) | | | (4,309,807 | ) | | $ | (51,293,133 | ) |
| | | | | | | | | | | | | | | | |
Total Net Decrease | | | (2,455,458 | ) | | $ | (32,128,835 | ) | | | (3,907,443 | ) | | $ | (44,737,219 | ) |
| | | | | | | | | | | | | | | | |
| | |
| 60 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Notes to Financial Statements (unaudited) (continued)
Management’s evaluation of the impact of all subsequent events on the Funds’ financial statements was completed through the date the financial statements were issued and the following items were noted:
The Funds paid net investment income, short-term capital gain and long-term capital gain distributions in the following amounts per share on December 12, 2017 to shareholders of record on December 8, 2017:
| | | | | | | | | | | | |
| | | From Net
Investment Income | | | From Net Short-
Term Realized Gain | | | From Net Long-
Term Realized Gain | |
Capital Appreciation Fund: | | | | | | | | | | | | |
Institutional | | $ | — | | | $ | 0.1738 | | | $ | 1.14432 | |
Investor A | | | — | | | | 0.1491 | | | | 1.14432 | |
Investor C | | | — | | | | 0.0736 | | | | 1.14432 | |
| | | |
Equity Dividend Fund: | | | | | | | | | | | | |
Institutional | | | 0.0709 | | | | — | | | | 1.8032 | |
Investor A | | | 0.0443 | | | | — | | | | 1.8032 | |
Investor C | | | — | | | | — | | | | 1.8032 | |
| | | | |
| NOTESTO FINANCIAL STATEMENTS | | | 61 | |
Disclosure of Sub-Advisery Agreement
The Board of Directors (the “Board,” and the members of which are referred to as “Board Members”) of FDP Series, Inc. (the “Corporation”), on behalf of its series FDP BlackRock International Fund (the “Fund”), met in person on September 12, 2017 (the “September Meeting”) to consider the initial approval of the sub-advisery agreement (the “Sub-Advisery Agreement”) between BlackRock Advisors, LLC (the “Manager”), the Fund’s investment advisor, and BlackRock International Limited (“BIL”) with respect to the Fund. The Sub-Advisery Agreement was substantially similar to the sub-advisery agreements previously approved with respect to certain other portfolios in the BlackRock Equity-Bond Complex.
On the date of the September Meeting, the Board consisted of thirteen individuals, eleven of whom were not “interested persons” of the Fund as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Board Members”). Pursuant to the 1940 Act, the Board is required to consider the initial approval of the Sub-Advisery Agreement.
At the September Meeting, the Board reviewed materials relating to its consideration of the proposed Sub-Advisery Agreement. The Fund’s investment advisory agreement with the Manager with respect to the Fund was most recently considered and approved by the Board at in-person meetings on April 6, 2017 (the “April Meeting”) and May9-10, 2017 (the “May Meeting”). A discussion of the basis for the Board’s consideration and approval of this agreement at the April and May Meetings is included in the Fund’s annual shareholder report for the fiscal year ended May 31, 2017. The factors considered by the Board at the September Meeting in connection with approval of the proposed Sub-Advisery Agreement were substantially the same as the factors considered at the April and May Meetings for the Corporation’s investment advisory agreement with respect to the Fund.
Following discussion, all the Board Members present at the September Meeting, including all the Independent Board Members present, approved the Sub-Advisery Agreement between the Manager and BIL with respect to the Fund for a two-year term beginning on the effective date of the Sub-Advisery Agreement. Based upon its evaluation of all of the aforementioned factors in their totality, the Board, including the Independent Board Members, was satisfied that the terms of the Sub-Advisery Agreement were fair and reasonable and in the best interest of the Fund and its shareholders. In addition, the Board, including the Independent Directors, determined that the change in sub-adviser from Massachusetts Financial Services Company to BIL does not involve a conflict of interest from which the Manager or BIL derives an inappropriate advantage. In arriving at its decision to approve the Sub-Advisery Agreement, the Board did not identify 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.
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| 62 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Director and Officer Information
Robert M. Hernandez, Chair of the Board and Director
James H. Bodurtha, Director
Bruce R. Bond, Director
Donald W. Burton, Director
Honorable Stuart E. Eizenstat, Director
Henry Gabbay, Director
Lena G. Goldberg, Director
Henry R. Keizer, Director
John F. O'Brien, Director
Donald C. Opatrny, Director
Roberta Cooper Ramo, Director
Robert Fairbairn, Director
John M. Perlowski, Director, President and Chief Executive Officer
Jennifer McGovern, Vice President
Neal J. Andrews, Chief Financial Officer
Jay M. Fife, Treasurer
Charles Park, Chief Compliance Officer
Fernanda Piedra, Anti-Money Laundering Compliance Officer
Benjamin Archibald, Secretary
Effective December 31, 2017, Donald W. Burton and Roberta Cooper Ramo retired as Directors of the Corporation.
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| Investment Adviser | | Transfer Agent |
| BlackRock Advisors, LLC | | BNY Mellon Investment Servicing (US) Inc. |
| Wilmington, DE 19809 | | Wilmington, DE 19809 |
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| Sub-Adviser | | Independent Registered Public Accounting Firm |
| BlackRock International Limited(a) | | Deloitte & Touche LLP |
Edinburgh, EH3 8BL | | Boston, MA 02116 |
| United Kingdom | | |
| | |
| Accounting Agent | | Distributor |
State Street Bank and Trust Company | | BlackRock Investments, LLC |
| Boston, MA 02111 | | New York, NY 10022 |
| | |
Custodian | | Legal Counsel |
Brown Brothers Harriman & Co. | | Willkie Farr & Gallagher LLP |
Boston, MA 02109 | | New York, NY 10019 |
| | |
| | Address of the Trusts |
| | 100 Bellevue Parkway |
| | Wilmington, DE 19809 |
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| | |
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| (a) | For FDP BlackRock International Fund. |
| | | | |
| DIRECTORAND OFFICER INFORMATION | | | 63 | |
Additional Information
General Information
Householding
The Funds will mail only one copy of shareholder documents, including prospectuses, annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please call the Funds at (800) 441-7762.
Availability of Quarterly Schedule of Investments
The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ 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, D.C. Information on the operation of the Public Reference Room or how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The Funds’ Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762.
Availability of Proxy Voting Policies and Procedures
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available upon request and without charge (1) by calling (800) 441-7762; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.
Availability of Proxy Voting Record
Information about how the Funds voted proxies relating to securities held in the Funds’ portfolios 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.
BlackRock’s Mutual Fund Family
BlackRock offers a diverse lineup of open-end mutual funds crossing all investment styles and managed by experts in equity, fixed income and tax-exempt investing. Visit http://www.blackrock.com for more information.
Shareholder Privileges
Account Information
Call us at (800) 441-7762 from 8:00 AM to 6:00 PM ET on any business day to get information about your account balances, recent transactions and share prices. You can also reach us on the Web at http://www.blackrock.com.
Automatic Investment Plans
Investor Class shareholders who want to invest regularly can arrange to have $50 or more automatically deducted from their checking or savings account and invested in any of the BlackRock funds.
Systematic Withdrawal Plans
Investor Class shareholders can establish a systematic withdrawal plan and receive periodic payments of $50 or more from their BlackRock funds, as long as their account balance is at least $10,000.
Retirement Plans
Shareholders may make investments in conjunction with Traditional, Rollover, Roth, Coverdell, Simple IRAs, SEP IRAs and 403(b) Plans.
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| 64 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Additional Information (continued)
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safe-guarding their non-public personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.
If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.
BlackRock obtains or verifies personal non-public information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our websites.
BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.
We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.
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| ADDITIONAL INFORMATION | | | 65 | |
Glossary of Terms Used in this Report
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| Portfolio Abbreviations |
| |
| Symbol | | Name |
| ADR | | American Depositary Receipts |
| ABS | | Asset-Backed Security |
| ARB | | Airport Revenue Bonds |
| EUR | | Euro |
| GDR | | Global Depositary Receipt |
| JPY | | Japanese Yen |
| MBS | | Mortgage-Backed Security |
| MSCI | | Morgan Stanley Capital International |
| RB | | Revenue Bonds |
| USD | | U.S. Dollar |
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| 66 | | 2017 BLACKROCK SEMI-ANNUAL REPORTTO SHAREHOLDERS |
This report is intended for current holders. It is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of a Fund unless preceded or accompanied by the Funds’ current prospectus. Past performance results shown in this report should not be considered a representation of future performance. Investment returns and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are as dated and are subject to change.
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| FDPS-11/17-SAR | |  |
Item 2 – Code of Ethics – During the period covered by this report, the code of ethics was amended to clarify an inconsistency as to whom persons covered by the code should report suspected violations of the code. The amendment clarifies that such reporting should be made to BlackRock Advisors, LLC’s General Counsel, and retains the alternative option of anonymous reporting following “whistleblower” policies. Other non-material changes were also made in connection with this amendment. The registrant undertakes to provide a copy of the code of ethics to any person upon request, without charge, who calls 1-800-441-7762.
Item 3 – Audit Committee Financial Expert – Not Applicable to this semi-annual report
Item 4 – Principal Accountant Fees and Services – Not Applicable to this semi-annual report
Item 5 – Audit Committee of Listed Registrants – Not Applicable
Item 6 – Investments
(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this Form.
(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.
Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not Applicable
Item 8 – Portfolio Managers of Closed-End Management Investment Companies – Not Applicable
Item 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable
Item 10 – Submission of Matters to a Vote of Security Holders –There have been no material changes to these procedures.
Item 11 – Controls and Procedures
(a) – The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 15d-15(b) under the Securities Exchange Act of 1934, as amended.
(b) – There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12 – Disclosure of Securities Lending Activities for Closed-End Management Investment Companies – Not Applicable
Item 13 – Exhibits attached hereto
(a)(1) – Code of Ethics – Not Applicable to this semi-annual report
(a)(2) – Certifications – Attached hereto
(a)(3) – Not Applicable
(a)(4) – Not Applicable
(b) – Certifications – Attached hereto
2
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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| | FDP Series, Inc. | | |
| | | |
| | By: | | /s/ John M. Perlowski | | |
| | | | John M. Perlowski | | |
| | | | Chief Executive Officer (principal executive officer) of | | |
| | | | FDP Series, Inc. | | |
Date: February 2, 2018
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | | | | | |
| | By: | | /s/ John M. Perlowski | | |
| | | | John M. Perlowski | | |
| | | | Chief Executive Officer (principal executive officer) of | | |
| | | | FDP Series, Inc. | | |
Date: February 2, 2018
| | | | | | |
| | By: | | /s/ Neal J. Andrews | | |
| | | | Neal J. Andrews | | |
| | | | Chief Financial Officer (principal financial officer) of | | |
| | | | FDP Series, Inc. | | |
Date: February 2, 2018
3
