The information in the above Financial Highlights represents the operating performance for a share outstanding, total investment returns, ratios to average net assets and other supplemental data for each period indicated. This information has been determined based upon financial information provided in the financial statements and market price data for the Trust’s shares.
| |
|
|
Notes to Financial Statements | |
Note 1. Organization & Accounting Policies
BlackRock Dividend AchieversTM Trust (“Dividend Achievers”), BlackRock Enhanced Dividend AchieversTM Trust (“Enhanced Dividend Achievers”), BlackRock Strategic Dividend AchieversTM Trust (“Strategic Dividend Achievers”), BlackRock EcoSolutions Investment Trust (“EcoSolutions”), BlackRock Global Energy and Resources Trust (“Global Energy and Resources”), BlackRock Global Equity Income Trust (“Global Equity Income”), BlackRock Global Opportunities Equity Trust (“Global Opportunities”), BlackRock Health Sciences Trust (“Health Sciences”), BlackRock International Growth and Income Trust (“International Growth”), BlackRock Real Asset Equity Trust (“Real Asset”), BlackRock S&P Quality Rankings Global Equity Managed Trust (“S&P Quality Rankings”) and BlackRock World Investment Trust (“World Investment”) (collectively, the “Trusts”) are organized as Delaware statutory trusts. All Trusts, except EcoSolutions, Global Energy and Resources, Global Equity Income, Health Sciences, International Growth and Real Asset, are registered as diversified, closed-end management investment companies under the Investment Company Act of 1940, as amended (the “1940 Act”). EcoSolutions, Global Energy and Resources, Global Equity Income, Health Sciences, International Growth and Real Asset are registered as non-diversified, closed-end management investment companies under the 1940 Act.
Real Asset was organized on July 19, 2006, and had no transactions until August 23, 2006, when the Trust sold 8,028 common shares for $115,001 to BlackRock Funding, Inc. Investment operations for Real Asset commenced on September 29, 2006. The Trust incurred organization costs which were deferred from the organization date until the commencement of operations.
Global Equity Income was organized on January 10, 2007, and had no transactions until February 22, 2007, when the Trust sold 6,021 common shares for $115,001 to BlackRock Funding, Inc. Investment operations for Global Equity Income commenced on March 30, 2007. The Trust incurred organization costs which were deferred from the organization date until the commencement of operations.
International Growth was organized on March 13, 2007, and had no transactions until April 18, 2007, when the Trust sold 6,178 common shares for $118,001 to BlackRock Funding, Inc. Investment operations for International Growth commenced on May 30, 2007. The Trust incurred organization costs which were deferred from the organization date until the commencement of operations.
EcoSolutions was organized on June 13, 2007, and had no transactions until July 16, 2007, when the Trust sold 6,964 common shares for $133,012 to BlackRock Funding, Inc. Investment operations for EcoSolutions commenced on September 28, 2007. The Trust incurred organization costs which were deferred from the organization date until the commencement of operations.
The following is a summary of significant accounting policies followed by the Trusts.
Investment Valuation: The Trusts value most of their investments on the basis of current market quotations provided by dealers or pricing services selected under the supervision of each Trust’s Board of Trustees (the “Board”). In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, market transactions in comparable investments, various relationships observed in the market between investments, and calculated yield measures based on valuation technology commonly employed in the market for such investments. Effective September 5, 2007, exchange-traded options are valued at the mean between the last bid and ask prices at the close of the options market in which the options trade and previously were valued at their last sales price as of the close of options trading on applicable exchanges. Over-the-counter (“OTC”) options quotations are provided by dealers or pricing services selected under the supervision of the Board. Considerations utilized by dealers or pricing services in valuing OTC options include, but are not limited to, volatility factors of the underlying security, price movement of the underlying security in relation to the strike price and the time left until expiration of the option. Investments in open-end investment companies are valued at net asset value. Short-term debt investments having a remaining maturity of 60 days or less when purchased and debt investments originally purchased with maturities in excess of 60 days but which currently have maturities of 60 days or less may be valued at amortized cost. Any investments or other assets for which current market quotations are not readily available are valued at their fair value (“Fair Value Assets”) as determined in good faith under procedures established by and under the general supervision and responsibility of the Trust’s Board. The investment advisor and/or sub-advisor will submit its recommendations regarding the valuation and/or valuation methodologies for Fair Value Assets to a valuation committee. The valuation committee may accept, modify or reject any recommendations. The pricing of all Fair Value Assets shall be subsequently reported to the Board.
When determining the price for a Fair Value Asset, the investment advisor and/or sub-advisor shall seek to determine the price that the Trust might reasonably expect to receive from the current sale of that asset in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the investment advisor and/or sub-advisor deems relevant.
In September 2006, Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”), was issued and is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. At this time, management is evaluating the implications for FAS 157 and its impact on the Trust’s financial statements, if any, has not been determined.
In addition, in February 2007, Statement of Financial Accounting Standard No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“FAS 159”), was issued and is effective for fiscal years beginning after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provisions of FAS 157. FAS 159 permits entities to choose to measure many financial instruments and certain other items at
| | | |
| | | |
78 | ANNUAL REPORT | OCTOBER 31, 2007 | |
|
|
|
Notes to Financial Statements (continued) |
fair value that are not currently required to be measured as fair value. FAS 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similiar types of assets and liabilities. At this time, management is evaluating the implications of FAS 159 and its impact on the Trusts’ financial statements, if any, has not been determined.
Investment Transactions and Investment Income: Investment transactions are recorded on the trade date. The cost of investments sold and the related gain or loss is determined by the use of the specific identified method, generally high cost, for both financial reporting and federal income tax purposes. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date, except certain dividends from foreign securities where the ex-dividend date may have passed. These dividends are recorded as soon as the Trusts are informed of the ex-dividend date. Dividend income on foreign securities is recorded net of any applicable withholding tax.
Forward Currency Contracts: Certain Trusts may enter into forward currency contracts primarily to facilitate settlement of purchases and sales of foreign securities and to help manage the overall exposure to foreign currency. A forward contract is a commitment to purchase or sell a foreign currency at a future date (usually the security transaction settlement date) at a negotiated forward rate. In the event that a security fails to settle within the normal settlement period, the forward currency contract is renegotiated at a new rate. The gain or loss arising from the difference between the settlement value of the original and renegotiated forward contracts is isolated and is included in net realized gains (losses) from foreign currency transactions. Risks may arise as a result of the potential inability of the counterparties to meet the terms of their contract.
Forward currency contracts, when used by the Trusts, help to manage the overall exposure to the foreign currency backing some of the investments held by the Trusts. Forward currency contracts are not meant to be used to eliminate all of the exposure to the foreign currency, rather they allow the Trusts to limit their exposure to foreign currency within a narrow band consistent with the objectives of the Trusts.
Foreign Currency Translation: Foreign currency amounts are translated into United States dollars on the following basis:
| | |
| (i) | market value of investment securities, other assets and liabilities at the current rate of exchange; and |
| | |
| (ii) | purchases and sales of investment securities, income and expenses at the relevant rates of exchange prevailing on the respective dates of such transactions. |
The Trusts do not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. The Trusts report forward foreign currency related transactions as components of realized gains for financial reporting purposes, whereas such components are treated as ordinary income for federal income tax purposes.
Net realized and unrealized foreign exchange gains and losses includes realized foreign exchange gains and losses from sales and maturities of foreign portfolio securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of interest and discount recorded on the Trusts’ books and the U.S. dollar equivalent amounts actually received or paid, and changes in unrealized foreign exchange gains and losses in the value of portfolio securities and other assets and liabilities arising as a result of changes in the exchange rate.
Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin, including unanticipated movements in the value of the foreign currency relative to the U.S. dollar.
Option Writing/Purchasing: When a Trust writes or purchases an option, an amount equal to the premium received or paid by the Trust is recorded as a liability or an asset and is subsequently adjusted to the current market value of the option written or purchased. Premiums received or paid from writing or purchasing options which expire unexercised are treated by the Trust on the expiration date as realized gains or losses. The difference between the premium and the amount paid or received on effecting a closing purchase or sale transaction, including brokerage commissions, is also treated as a realized gain or loss. If an option is exercised, the premium paid or received is added to the cost of the purchase or the proceeds from the sale in determining whether a Trust has realized a gain or a loss on investment transactions. A Trust, as writer of an option, may have no control over whether the underlying securities may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the security underlying the written option.
A call option gives the purchaser of the option the right (but not the obligation) to buy, and obligates the seller to sell (when the option is exercised), the underlying position at the exercise price at any time or a specified time during the option period. A put option gives the holder the right to sell and obligates the writer to buy the underlying position at the exercise price at any time or at a specified time during the option period.
The main risk that is associated with purchasing options is that the option expires without being exercised. In this case, the option expires worthless and the premium paid for the option is considered the loss. The risk associated with writing call options is that a Trust may forgo the opportunity for a profit if the market value of the underlying position increases and the option is exercised. The risk in writing put options is that a Trust may incur a loss if the market value of the underlying position decreases and the option is exercised. In addition, the Trust risks not being able to enter into a closing transaction for the written option as a result of an illiquid market.
Certain Trusts may invest in over-the-counter (“OTC”) options. OTC options differ from exchange-listed options in that they are two-party contracts, with exercise price, premium and other terms negotiated between buyer and seller, and generally do not have as much market liquidity as exchange-listed options. The counterparties to these transactions typically will be major international banks, broker-dealers and financial institutions. The
| | | |
| | | |
| ANNUAL REPORT | OCTOBER 31, 2007 | 79 |
|
|
|
Notes to Financial Statements (continued) |
Trusts may be required to restrict the sale of securities being used to cover certain written OTC options. The OTC options written by the Trust will not be issued, guaranteed or cleared by the Options Clearing Corporation. In addition, the Trusts’ ability to terminate the OTC options may be more limited than with exchange-traded options. Banks, broker-dealers or other financial institutions participating in such transaction may fail to settle a transaction in accordance with the terms of the option as written. In the event of default or insolvency of the counterparty, the Trusts may be unable to liquidate an OTC option position. The Trusts closely monitor OTC options and do not anticipate non-performance by any counterparty.
Financial Futures Contracts: A financial futures contract is an agreement between two parties to buy and sell a financial instrument for a set price on a future date. Initial margin deposits are made upon entering into futures contracts and can be either cash or securities. During the period the futures contract is open, changes in the value of the contract are recognized as unrealized gains or losses by “marking-to-market” on a daily basis to reflect the market value of the contract at the end of each day’s trading. Variation margin payments are made or received, depending upon whether unrealized gains or losses are incurred. When the contract is closed, a Trust records a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and a Trust’s basis in the contract.
Financial futures contracts, when used by a Trust, help in maintaining a targeted duration. Financial futures contracts can be sold to effectively shorten an otherwise longer duration portfolio. In the same sense, futures contracts can be purchased to lengthen a portfolio that is shorter than its duration target. Thus, by buying or selling futures contracts, a Trust may attempt to manage the duration of positions so that changes in interest rates do not change the duration of the portfolio unexpectedly.
Securities Lending: The Trusts’ may lend securities to financial institutions that provide cash or securities issued or guaranteed by the U.S. government as collateral, which will be maintained at all times in an amount equal to at least 100% of the current market value of the loaned securities. The market value of the loaned securities is determined at the close of business of the Trusts’ and any additional required collateral is delivered to the Trusts’ on the next business day. Where the Trusts’ receive securities as collateral for the loaned securities, it collects a fee from the borrower. The Trusts’ typically receive the income on the loaned securities but does not receive the income on the collateral. Where the Trusts’ receive cash collateral, it may invest such collateral and retain the amount earned on such investment, net of any amount rebated to the borrower. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within five business days. The Trusts’ may pay reasonable finder’s, lending agent, administrative and custodial fees in connection with its loans. In the event that the borrower defaults on its obligation to return borrowed securities because of insolvency or for any other reason, the Trusts’ could experience delays and costs in gaining access to the collateral. The Trusts’ also could suffer a loss where the value of the collateral falls below the market value of the borrowed securities, in the event of borrower default or in the event of losses on investments made with cash collateral.
Total Return Swaps: Total return swaps are agreements in which one party commits to pay interest in exchange for a market-linked return. To the extent the total return of the security or index underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the Trust will receive a payment from or make a payment to the counterparty.
During the term of the swap, changes in the value of the swap are recognized as unrealized gains or losses by “marking-to-market” to reflect the market value of the swap. When the swap is terminated, a Trust will record a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Trust’s basis in the contract, if any.
The Trusts are exposed to credit loss in the event of non-performance by the other party to the swap. However, the Trusts closely monitor swaps and do not anticipate non-performance by any counterparty.
Segregation: In cases in which the 1940 Act and the interpretive positions of the Securities and Exchange Commission (the “Commission”) require a Trust to segregate assets in connection with certain investments (e.g., call options written), each Trust will, consistent with certain interpretive letters issued by the Commission, designate on its books and records cash or liquid securities having a market value at least equal to the amount that would otherwise be required to be physically segregated.
Federal Income Taxes: It is each Trust’s intention to continue to be treated as a regulated investment company under the Internal Revenue Code and to distribute sufficient net income and net realized gains, if any, to shareholders. Therefore, no federal income tax provisions have been recorded.
In June 2006, the Financial Accounting Standards Board issued Interpretation No. 48 (“FIN 48”) “Accounting for Uncertainty in Income Taxes — an interpretation of FAS Statement No. 109.” FIN 48 prescribes the minimum recognition threshold a tax position must meet in connection with accounting for uncertainties in income tax positions taken or expected to be taken by an entity, including mutual funds, before being measured and recognized in the financial statements. Adoption of FIN 48 is required for the last net asset value calculation in the first required financial statement reporting period for fiscal years beginning after December 15, 2006. The impact on each of Dividend Achievers, Enhanced Dividend Achievers, Strategic Dividend Achievers, Global Energy and Resources, Global Opportunities, Health Sciences, Real Asset, S&P Quality Rankings and World Investment financial statements, if, any, is currently being assessed.
Effective October 31, 2007, EcoSolutions, Global Equity Income and International Growth implemented Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 prescribes the minimum recognition threshold a tax position must meet in connection with accounting for uncertainties in income tax positions taken or expected to be taken by an entity, including investment companies, before being measured and recognized in the financial statements. Management has evaluated the application of FIN 48 to EcoSolutions, Global Equity Income and International Growth and has determined that the adoption of FIN 48 does not have a material impact on the financial
| | | |
| | | |
80 | ANNUAL REPORT | OCTOBER 31, 2007 | |
|
|
|
Notes to Financial Statements (continued) |
statements. The EcoSolutions, Global Equity Income and International Growth will file their first Federal and state tax returns in 2008 for the period ended October 31, 2007.
Dividends and Distributions: All Trusts except Enhanced Dividend AchieversTM, Real Asset and World Investment declare and pay dividends and distributions to shareholders quarterly from net investment income, net realized short-term capital gains and, if necessary, other sources. Enhanced Dividend AchieversTM, Real Asset and World Investment declare and pay dividends and distributions to shareholders monthly from net investment income, net realized short-term capital gains and, if necessary, other sources. Net long-term capital gains, if any, in excess of loss carryforwards may be distributed annually. If the total dividends and distributions made in any tax year exceeds net investment income and accumulated realized capital gains, a portion of the total distribution may be treated as a tax-free return of capital. Dividends and distributions are recorded on the ex-dividend date. Income distributions and capital gain distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America.
Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities including investment valuations at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and such differences may be material.
Deferred Compensation and BlackRock Closed-End Share Equivalent Investment Plan: Under the deferred compensation plan approved by the Trusts’ Board, non-interested Trustees (“Independent Trustees”) are required to defer a portion of their annual complex-wide compensation pursuant to the plan. Deferred amounts earn an approximate return as though equivalent dollar amounts had been invested in common shares of other BlackRock closed-end trusts selected by the Independent Trustees. These amounts are shown on the Statement of Assets and Liabilities as “Investments in affiliates.” This has approximately the same economic effect for the Independent Trustees as if the Independent Trustees had invested the deferred amounts in such Trusts.
The deferred compensation plan is not funded and obligations thereunder represent general unsecured claims against the general assets of the Trust. Each Trust may, however, elect to invest in common shares of those Trusts selected by the Independent Trustees in order to match its deferred compensation obligations.
Other: Expenses that are directly related to one of the Trusts are charged directly to that Trust. Other operating expenses are generally prorated to the Trusts on the basis of relative net assets of all of the BlackRock Closed-End Funds.
Note 2. Agreements and Other Transactions with Affiliates and Related Parties
Each Trust has an Investment Management Agreement with BlackRock Advisors, LLC (the “Advisor”), a wholly owned subsidiary of BlackRock, Inc. BlackRock Financial Management, Inc. (“BFM”), a wholly owned subsidiary of BlackRock, Inc., serves as sub-advisor to Dividend AchieversTM, Enhanced Dividend AchieversTM, Strategic Dividend AchieversTM, S&P Quality Rankings and World Investment. State Street Research & Management Company (“SSRM”), a wholly owned subsidiary of BlackRock, Inc., serves as sub-advisor to Global Energy and Resources. BlackRock Investment Management, LLC (“BIM”) and BlackRock Investment Management International Limited (“BII”), each a wholly owned subsidiary of BlackRock, Inc., serve as sub-advisor to Real Asset. BlackRock Capital Management, Inc. (“BCM”), a wholly owned subsidiary of BlackRock, Inc., and BIM serve as sub-advisor to Global Equity Income. Merrill Lynch & Co., Inc. (“Merrill Lynch”) and The PNC Financial Services Group, Inc. (“PNC”) are principal owners of BlackRock, Inc. The Investment Management Agreement covers both investment advisory and administration services.
The Trusts’ investment advisory fees paid to the Advisor are computed weekly, accrued daily and payable monthly, based on an annual rate, 0.65% for Dividend AchieversTM, 1.00% for Enhanced Dividend AchieversTM, 0.75% for Strategic Dividend AchieversTM, 1.20% for EcoSolutions, 1.20% for Global Energy and Resources, 1.00% for Global Equity Income, 1.00% for Global Opportunities, 1.00% for Health Sciences, 1.00% for International Growth, 1.20% for Real Asset, 0.75% for S&P Quality Rankings and 1.00% for World Investment, of the Trust’s average weekly net assets. “Net assets” means the total assets of the Trust minus the sum of accrued liabilities. The Advisor has voluntarily agreed to waive a portion of the investment advisory fees or some other expenses on Global Energy and Resources and Real Asset as a percentage of its average weekly net assets as follows: 0.20% for the first five years of the Trusts’ operations (2004 through 2009 for Global Energy and Resources and 2006 through 2011 for Real Asset), 0.15% in 2010 for Global Energy and Resources and in 2012 for Real Asset, 0.10% in 2011 for Global Energy and Resources and in 2013 for Real Asset and 0.05% in 2012 for Global Energy and Resources and in 2014 for Real Asset.
The Advisor pays BFM, SSRM, BCM, BIM and BII fees for its sub-advisory services.
Pursuant to the Investment Management Agreement, the Advisor provides continuous supervision of the investment portfolios and pays the compensation of officers of each Trust who are affiliated persons of the Advisor, as well as occupancy and certain clerical and accounting costs of each Trust. The Trust bears all other costs and expenses, which include reimbursements to the Advisor for cost of employees that provide pricing, secondary market support and compliance support to the Trust. For the period ended October 31, 2007, the Trusts reimbursed the Advisor the following amounts which are included in miscellaneous expenses in the Statements of Operations:
| | | |
|
| | | |
| ANNUAL REPORT | OCTOBER 31, 2007 | 81 |
|
|
|
Notes to Financial Statements (continued) |
| | | |
| | | | |
Trust | | Amount | |
| | | | |
Dividend AchieversTM | | $ | 24,160 | |
Enhanced Dividend AchieversTM | | | 26,257 | |
Strategic Dividend AchieversTM | | | 17,022 | |
Global Energy and Resources | | | 27,676 | |
Global Equity Income | | | 12,890 | |
Global Opportunities | | | 10,569 | |
Health Sciences | | | 7,417 | |
International Growth | | | 10,520 | |
Real Asset | | | 12,117 | |
S&P Quality Rankings | | | 3,887 | |
World Investment | | | 22,618 | |
| | | | | |
Dividend Achievers Universe: Dividend AchieversTM, Enhanced Dividend AchieversTM and Strategic Dividend AchieversTM have been granted a revocable license by Mergent®, Inc. (“Mergent®”) to use the Dividend AchieverTM universe of common stocks. If Mergent® revokes each Trust’s license to use the Dividend AchieversTM universe, the Board of that Trust may need to adopt a new investment strategy and/or new investment policies. There is no assurance that a Trust would pursue or achieve its investment objective during the period in which it implements these replacement investment policies or strategies. ‘‘Mergent®’’ and ‘‘Dividend AchieversTM’’ are trademarks of Mergent® and have been licensed for use by Dividend AchieversTM, Enhanced Dividend AchieversTM and Strategic Dividend AchieversTM. The products are not sponsored, endorsed, sold or promoted by Mergent® and Mergent® makes no representation regarding the advisability of investing in any of these three Trusts. The Trusts are required to pay a quarterly licensing fee, which is shown on the Statement of Operations.
S&P Quality Rankings: S&P Quality Rankings has been granted a license by Standard & Poor’s®, (“S&P®”) to use the S&P Quality Rankings and the S&P International Quality Rankings. If S&P® terminates the license to use either the S&P Quality Rankings or the S&P International Quality Rankings, the Board may need to adopt a new investment strategy and/or new investment polices. There is no assurance that the Trust would pursue or achieve its investment objective during the period in which it implements these replacement investment policies or strategies. “Standard & Poor’s®”, “S&P®”, “Standard & Poor’s Earnings and Dividend Rankings”, “S&P Earnings and Dividend Rankings”, “Standard & Poor’s Quality Rankings”, “Standard & Poor’s International Quality Rankings”, “S&P International Quality Rankings” and “S&P Quality Rankings” are trademarks of Standard & Poor’s® and have been licensed for use by the Trust. The Trust is not sponsored, managed, advised, sold or promoted by Standard & Poor’s®. The Trust is required to pay a quarterly licensing fee to S&P, which is shown on the Statement of Operations.
During the period ended October 31, 2007, Merrill Lynch, through its affiliated broker-dealer, Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”), earned commissions on transactions of securities as follows:
| | | | |
| | | | |
Trust | | Commission
Amount | |
| | | | | |
Enhanced Dividend AchieversTM | | $ | 94,302 | |
Global Energy and Resources | | | 28,633 | |
Global Equity Income | | | 826,290 | |
Global Opportunities | | | 32,690 | |
Health Sciences | | | 23,013 | |
International Growth | | | 16,532 | |
Real Asset | | | 111,344 | |
World Investment | | | 89,209 | |
| | | | | |
For the year ended October 31, 2007, investments in companies considered to be an affiliate of the Trusts, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as follows:
| | | | | | | | | |
| | | | | | | | |
Trust | | | Portfolio Company | | Net
Purchases
(000) | | Dividend
Income |
| | | | | | | | |
Enhanced Dividend AchieversTM | | | BlackRock Liquidity Series, LLC
Money Market Series | | | 7,125 | | $ | 8,180 |
Global Energy and Resources | | | BlackRock Liquidity Series, LLC
Money Market Series | | | 44,288 | | | 5,840 |
Health Sciences | | | BlackRock Liquidity Series, LLC
Money Market Series | | | 3,176 | | | 6,107 |
World Investment | | | BlackRock Liquidity Series, LLC
Money Market Series | | | — | | | 174 |
| | | | | | | | | | |
The Trusts’ have received an exemptive order from the Securities and Exchange Commission permitting it to lend portfolio securities to Merrill Lynch, Pierce, Fenner & Smith Incorporated, a wholly owned subsidiary of Merrill Lynch, or its affiliates. As of October 31, 2007, Global Energy and Resources lent securities with a value of $7,482,068 to MLPF&S or its affiliates. Pursuant to that order, the Trusts’ have retained BIM as the securities lending agent for a fee based on a share of the returns on investment of cash collateral. BIM may, on behalf of the Trusts’, invest cash collateral received by the Trusts’ for such loans, among other things, in a private investment company managed by the Manager or in registered money market funds advised by the Manager or its affiliates. For the period ended October 31, 2007, BIM received $5,075 in securities lending agent fees.
Note 3. Portfolio Securities
Purchases and sales of investment securities, other than short-term investments and U.S. government securities, for the period ended October 31, 2007 were as follows:
| | | | | | | |
| | | | | | |
Trust | | Purchases | | Sales | |
| | | | | | |
Dividend AchieversTM | | $ | 108,063,029 | | $ | 135,902,723 | |
Enhanced Dividend AchieversTM | | | 1,006,962,884 | | | 898,253,784 | |
Strategic Dividend AchieversTM | | | 78,353,879 | | | 94,299,467 | |
EcoSolutions | | | 184,432,930 | | | 3,597,974 | |
Global Energy and Resources | | | 433,078,331 | | | 520,115,325 | |
Global Equity Income | | | 1,050,038,205 | | | 274,910,581 | |
Global Opportunities | | | 389,591,251 | | | 400,675,215 | |
Health Sciences | | | 170,536,895 | | | 203,004,814 | |
International Growth | | | 2,649,447,422 | | | 762,460,716 | |
Real Asset | | | 644,592,184 | | | 517,549,143 | |
S&P Quality Rankings | | | 13,776,856 | | | 16,437,638 | |
World Investment | | | 965,681,759 | | | 1,013,493,876 | |
| | | | | | | | |
| | | |
| | | |
82 | ANNUAL REPORT | OCTOBER 31, 2007 | |
|
|
|
Notes to Financial Statements (continued) |
Transactions in options written during the period ended October 31, 2007 were as follows:
| | | | | | | | | | | | | |
| | Calls | | Puts | |
| | | | | |
Trust | | Contracts | | Premiums | | Contracts | | Premiums | |
| | | | | | | | | | |
Enhanced Dividend | | | | | | | | | | | | | |
AchieversTM | | | | | | | | | | | | | |
Options outstanding at beginning of period | | | 6,951,027 | | $ | 8,225,806 | | | 90,000 | | $ | 27,000 | |
Options written | | | 36,011,273 | | | 61,657,096 | | | 362,760 | | | 1,135,510 | |
Options expired | | | (13,107,884 | ) | | (20,142,414 | ) | | (307,965 | ) | | (761,741 | ) |
Options exercised | | | (9,199,896 | ) | | (13,684,509 | ) | | (93,345 | ) | | (274,976 | ) |
Options closed | | | (15,876,007 | ) | | (22,186,743 | ) | | (51,450 | ) | | (125,793 | ) |
| | | | | | | | | | | | | |
Options outstanding at end of period | | | 4,778,513 | | $ | 13,869,236 | | | — | | $ | — | |
| | | | | | | | | | | | | |
EcoSolutions | | | | | | | | | | | | | |
Options outstanding at beginning of period | | | — | | $ | — | | | — | | $ | — | |
Options written | | | 4,384,092 | | | 2,617,220 | | | 2,389,528 | | | 644,955 | |
Options expired | | | — | | | — | | | (50 | ) | | (5,350 | ) |
| | | | | | | | | | | | | |
Options outstanding at end of period | | | 4,384,092 | | $ | 2,617,220 | | | 2,389,478 | | $ | 639,605 | |
| | | | | | | | | | | | | |
Global Energy and Resources | | | | | | | | | | | | | |
Options outstanding at beginning of period | | | 1,136,290 | | $ | 5,347,629 | | | 511,460 | | $ | 1,008,817 | |
Options written | | | 6,574,054 | | | 31,149,259 | | | 126,708 | | | 2,446,775 | |
Options expired | | | (1,474,080 | ) | | (6,655,383 | ) | | (511,176 | ) | | (1,604,093 | ) |
Options exercised | | | (845,295 | ) | | (2,829,349 | ) | | (29,571 | ) | | (326,291 | ) |
Options closed | | | (2,371,144 | ) | | (12,848,553 | ) | | (71,007 | ) | | (1,352,593 | ) |
| | | | | | | | | | | | | |
Options outstanding at end of period | | | 3,019,825 | | $ | 14,163,603 | | | 26,414 | | $ | 172,615 | |
| | | | | | | | | | | | | |
Global Equity Income | | | | | | | | | | | | | |
Options outstanding at beginning of period | | | — | | $ | — | | | — | | $ | — | |
Options written | | | 33,396 | | | 51,811,912 | | | — | | | — | |
Options expired | | | (1,740 | ) | | (1,640,953 | ) | | — | | | — | |
Options closed | | | (28,043 | ) | | (44,735,102 | ) | | — | | | — | |
| | | | | | | | | | | | | |
Options outstanding at end of period | | | 3,613 | | $ | 5,435,857 | | | — | | $ | — | |
| | | | | | | | | | | | | |
Global Opportunities | | | | | | | | | | | | | |
Options outstanding at beginning of period | | | 8,934,189 | | $ | 4,111,793 | | | — | | $ | — | |
Options written | | | 42,554,132 | | | 29,415,522 | | | 198,244 | | | 283,875 | |
Options expired | | | (8,921,988 | ) | | (4,742,211 | ) | | (162,816 | ) | | (109,427 | ) |
Options exercised | | | (14,821,398 | ) | | (5,595,529 | ) | | (33,965 | ) | | (76,656 | ) |
Options closed | | | (14,131,831 | ) | | (11,540,028 | ) | | (763 | ) | | (79,242 | ) |
| | | | | | | | | | | | | |
Options outstanding at end of period | | | 13,613,104 | | $ | 11,649,547 | | | 700 | | $ | 18,550 | |
| | | | | | | | | | | | | |
Health Sciences | | | | | | | | | | | | | |
Options outstanding at beginning of period | | | 235,261 | | $ | 1,704,633 | | | — | | $ | — | |
Options written | | | 1,436,155 | | | 10,120,369 | | | 83,335 | | | 1,422,036 | |
Options expired | | | (428,950 | ) | | (1,870,696 | ) | | (51,754 | ) | | (591,027 | ) |
Options exercised | | | (98,208 | ) | | (1,413,021 | ) | | (1,152 | ) | | (123,124 | ) |
Options closed | | | (702,300 | ) | | (5,465,325 | ) | | (4,068 | ) | | (319,341 | ) |
| | | | | | | | | | | | | |
Options outstanding at end of period | | | 441,958 | | $ | 3,075,960 | | | 26,361 | | $ | 388,544 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | Calls | | Puts | |
| | | | | |
Trust | | Contracts | | Premiums | | Contracts | | Premiums | |
| | | | | | | | | | | | | | |
International Growth | | | | | | | | | | | | | |
Options outstanding at beginning of period | | | — | | $ | — | | | — | | $ | — | |
Options written | | | 318,341,635 | | | 93,131,013 | | | 195,945 | | | 532,872 | |
Options expired | | | (86,801,428 | ) | | (30,032,939 | ) | | (190,000 | ) | | (45,095 | ) |
Options exercised | | | (90,103,929 | ) | | (11,740,787 | ) | | (365 | ) | | (37,249 | ) |
Options closed | | | (37,478,168 | ) | | (15,482,775 | ) | | — | | | — | |
| | | | | | | | | | | | | |
Options outstanding at end of period | | | 103,958,110 | | $ | 35,874,512 | | | 5,580 | | $ | 450,528 | |
| | | | | | | | | | | | | |
Real Asset | | | | | | | | | | | | | |
Options outstanding at beginning of period | | | 6,843,497 | | $ | 4,653,527 | | | 5,234,825 | | $ | 3,404,041 | |
Options written | | | 57,281,070 | | | 59,963,679 | | | 2,338,209 | | | 12,483,516 | |
Options expired | | | (18,568,539 | ) | | (13,951,180 | ) | | (6,111,991 | ) | | (8,925,097 | ) |
Options exercised | | | (20,968,430 | ) | | (12,298,126 | ) | | (595,663 | ) | | (2,934,565 | ) |
Options closed | | | (15,887,969 | ) | | (21,385,953 | ) | | (309,426 | ) | | (2,657,676 | ) |
| | | | | | | | | | | | | |
Options outstanding at end of period | | | 8,699,629 | | $ | 16,981,947 | | | 555,954 | | $ | 1,370,219 | |
| | | | | | | | | | | | | |
World Investment | | | | | | | | | | | | | |
Options outstanding at beginning of period | | | 24,148,361 | | $ | 9,547,129 | | | — | | $ | — | |
Options written | | | 98,037,264 | | | 65,343,073 | | | 837,566 | | | 807,731 | |
Options expired | | | (25,651,710 | ) | | (12,024,500 | ) | | (735,649 | ) | | (349,841 | ) |
Options exercised | | | (34,835,848 | ) | | (14,299,162 | ) | | (98,155 | ) | | (206,425 | ) |
Options closed | | | (30,752,566 | ) | | (22,776,946 | ) | | (1,962 | ) | | (203,766 | ) |
| | | | | | | | | | | | | |
Options outstanding at end of period | | | 30,945,501 | | $ | 25,789,594 | | | 1,800 | | $ | 47,699 | |
| | | | | | | | | | | | | |
As of October 31, 2007, the value of portfolio securities subject to covered call options written were as follows:
| | | | |
| | | | |
Trust | | Value | |
| | | | |
Enhanced Dividend AchieversTM | | $ | 497,460,120 | |
EcoSolutions | | | 63,649,378 | |
Global Energy and Resources | | | 243,537,729 | |
Global Equity Income | | | 426,398,284 | |
Global Opportunities | | | 243,667,328 | |
Health Sciences | | | 58,721,842 | |
International Growth | | | 1,036,905,491 | |
Real Asset | | | 307,367,388 | |
World Investment | | | 602,763,363 | |
| | | | | |
Details of open forward foreign currency exchange contracts at October 31, 2007, were as follows:
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Trust | | Foreign
Currency
Bought | | Settlement
Date | | Contract to
Purchase/
Receive | | Value at
Settlement
Date (US$) | | Value at
October 31,
2007 (US$) | | Unrealized
Appreciation | |
| | | | | | | | | | | | | | | | | | | | |
EcoSolutions | | | Euro | | | 11/05/07 | | 77,000 | | | | 111,240 | | | 111,537 | | | $ | 297 | |
| | | | | | | | | | | | | | | | | | | | |
Real Asset | | | British Pounds | | | 11/05/07 | | 365,000 | | | | 758,223 | | | 758,946 | | | $ | 723 | |
| | | | | | | | | | | | | | | | | | | | |
Details of open total return swaps at October 31, 2007, were as follows:
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Trust(a) | | Notional
Amount | | Counter
Party | | Floating
Rate | | Effective
Date | | Termination
Date | | Unrealized
Appreciation | |
| | | | | | | | | | | | | | |
Global Energy and Resources | | $ | 48,235,850 | | Bank of America | | 6-Month
Libor + 25 Bps | | 08/23/07 | | 02/25/08 | | $ | 15,831,971 | |
| | | | | | | | | | | | | | | |
Health Sciences | | $ | 10,495,794 | | Bank of America | | 6-Month
Libor + 25 Bps | | 08/29/07 | | 02/29/08 | | $ | 354,737 | |
| | | | | | | | | | | | | | | |
| |
(a) | The fixed rate is based on the return of the underlying equity baskets. |
| | | |
|
| | | |
| ANNUAL REPORT | OCTOBER 31, 2007 | 83 |
|
|
|
Notes to Financial Statements (continued) |
Note 4. Income Tax Information
No provision is made for U.S. federal taxes as it is the Trusts’ intention to continue to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended, and to make the requisite distributions to its shareholders which will be sufficient to relieve it from federal income and excise taxes.
Dividends from net investment income and distributions from net capital gains are determined in accordance with U.S. federal income tax regulations, which may differ from those amounts determined under accounting principles generally accepted in the United States. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent, they are charged or credited to paid-in-capital, undistributed net investment income, or accumulated net realized gain, as appropriate, in the period the difference arise.
Reclassification of Capital Accounts: U.S. generally accepted accounting principles require that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. Accordingly, the table below summarizes the amounts reclassified per Trust during the current year between undistributed (distributions in excess of ) net investment income and accumulated net realized gain (loss) and paid-in capital in excess of par as a result of permanent differences attributable to accounting for real estate investment trusts, the tax characterization of income recognized from partnerships, foreign currency transactions and nondeductible expenses. These reclassifications have no effect on net assets or net asset values per share.
| | | | | | | | | | | | | | | | |
| | | | | | | |
Trust | | Undistributed Net
Investment Income/
Distributions in Excess
of Net Investment Income | | Accumulated
Gain/(Loss) | Paid-In
Capital in
Excess
of Par | |
| | | | | | | | | | |
Dividend AchieversTM | | | $ | (769,620 | ) | | | $ | 769,620 | | | | $ | — | | |
Enhanced Dividend AchieversTM | | | | (1,215,055 | ) | | | | 1,215,055 | | | | | — | | |
Strategic Dividend AchieversTM | | | | (1,269,840 | ) | | | | 1,269,840 | | | | | — | | |
EcoSolutions | | | | (177,297 | ) | | | | 195,297 | | | | | (18,000 | ) | |
Global Energy and Resources | | | | (1,410,572 | ) | | | | 1,410,572 | | | | | — | | |
Global Equity Income | | | | 1,910,496 | | | | | (1,895,496 | ) | | | | (15,000 | ) | |
Global Opportunities | | | | 305,585 | | | | | (305,585 | ) | | | | — | | |
Health Sciences | | | | 3,103 | | | | | (3,103 | ) | | | | — | | |
International Growth | | | | 1,072,739 | | | | | (1,054,739 | ) | | | | (18,000 | ) | |
Real Asset | | | | 647,382 | | | | | (647,382 | ) | | | | — | | |
S&P Quality Rankings | | | | (165,639 | ) | | | | 165,639 | | | | | — | | |
World Investment | | | | 1,074,685 | | | | | (1,074,685 | ) | | | | — | | |
| | | | | | | | | | | | | | | | | |
The tax character of distributions paid during the periods ended October 31, 2007 and October 31, 2006 were:
| | | | | | | | | | | | | |
| | Year ended October 31, 2007 | |
| | | |
Distributions
Paid from: | | Ordinary
Income | | Non-taxable
Return of
Capital | | Long-term
Capital Gains | | Total
Distributions | |
| | | | | | | | | | | | | | |
Dividend AchieversTM | | $ | 24,327,327 | | $ | 4,120,753 | | $ | 20,618,405 | | $ | 49,066,485 | |
Enhanced Dividend AchieversTM | | | 71,739,757 | | | — | | | 13,457,482 | | | 85,197,239 | |
Strategic Dividend AchieversTM | | | 10,698,892 | | | 3,200,857 | | | 10,317,479 | | | 24,217,228 | |
EcoSolutions | | | — | | | — | | | — | | | — | |
Global Energy and Resources | | | 54,649,315 | | | — | | | — | | | 54,649,315 | |
Global Equity Income | | | 16,348,253 | | | 26,364,301 | | | — | | | 42,712,554 | |
| | | | | | | | | | | | | |
| | Year ended October 31, 2007 (continued) | |
| | | |
Distributions
Paid from: | | Ordinary
Income | | Non-taxable
Return of
Capital | | Long-term
Capital Gains | | Total
Distributions | |
| | | | | | | | | | |
Global Opportunities Equity | | 24,303,443 | | | — | | | 7,127,139 | | | 31,430,582 | | |
Health Sciences | | 16,832,037 | | | — | | | — | | | 16,832,037 | | |
International Growth | | 64,506,589 | | | — | | | — | | | 64,506,589 | | |
Real Asset | | 58,762,586 | | | — | | | 2,890,383 | | | 61,652,969 | | |
S&P Quality Rankings | | 2,627,579 | | | 393,714 | | | 2,408,434 | | | 5,429,727 | | |
World Investment | | 85,360,467 | | | — | | | 5,688,043 | | | 91,048,510 | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | Year ended October 31, 2006 | |
| | | |
Distributions
Paid from: | | Ordinary
Income | | Non-taxable
Return of
Capital | | Long-term
Capital Gains | | Total
Distributions | |
| | | | | | | | | | | | | | |
Dividend AchieversTM | | $ | 23,135,339 | | | $ | 8,978,900 | | | $ | 16,952,248 | | | $ | 49,066,487 | | |
Enhanced Dividend AchieversTM | | | 51,946,761 | | | | — | | | | 32,569,547 | | | | 84,516,308 | | |
Strategic Dividend AchieversTM | | | 10,051,697 | | | | — | | | | 14,165,531 | | | | 24,217,228 | | |
Global Energy and Resources | | | 42,657,932 | | | | — | | | | 41,980,821 | | | | 84,638,753 | | |
Global Opportunities Equity | | | 27,654,546 | | | | — | | | | 502,975 | | | | 28,157,521 | | |
Health Sciences | | | 12,399,889 | | | | — | | | | 2,032,812 | | | | 14,432,701 | | |
Real Asset | | | — | | | | — | | | | — | | | | — | | |
S&P Quality Rankings | | | 3,563,848 | | | | 29,330 | | | | 2,668,835 | | | | 6,262,013 | | |
World Investment | | | 64,975,119 | | | | — | | | | — | | | | 64,975,119 | | |
| | | | | | | | | | | | | | |
As of October 31, 2007, the components of distributable earnings on a tax basis were as follows:
| | | | | | | | | | |
| | | | | | | | | | | |
Trust | | Undistributed
Ordinary
Income | | Undistributed
Long-Term
Gains | | Unrealized Net
Appreciation | |
| | | | | | | | | | | |
Dividend AchieversTM | | $ | — | | $ | — | | | 103,746,984 | |
Enhanced Dividend AchieversTM | | | 12,002,709 | | | — | | | (26,496,960 | ) |
Strategic Dividend AchieversTM | | | — | | | — | | | 36,325,440 | |
EcoSolutions | | | 95,219 | | | — | | | 14,547,578 | |
Global Energy and Resources | | | 10,743,866 | | | 52,040,300 | | | 347,161,029 | |
Global Equity Income | | | — | | | — | | | 52,734,295 | |
Global Opportunities Equity | | | 2,249,167 | | | 10,062,780 | | | 78,311,388 | |
Health Sciences | | | 452,538 | | | 6,587,937 | | | 42,082,936 | |
International Growth | | | 4,673,349 | | | — | | | 104,850,899 | |
Real Asset | | | 23,706,314 | | | — | | | 344,307,942 | |
S&P Quality Rankings | | | — | | | — | | | 40,993,113 | |
World Investment | | | 1,779,435 | | | 36,382,024 | | | 187,551,557 | |
| | | | | | | | | | | |
The difference between book-basis and tax-basis unrealized gains/losses is attributable primarily to amortization methods of premiums and discounts on fixed income securities, the tax deferral of losses on wash sales, the tax deferral of losses on straddles, the timing of recognition of income from partnership investments, accounting for investments in real estate investment trusts, unrealized gains on investments in passive foreign investment companies, the realization for tax purposes of unrealized gains/(losses) on certain futures and foreign currency contracts, deferred compensation to trustees and other temporary differences.
Note 5. Capital
There are an unlimited number of $0.001 par value common shares of beneficial interest authorized for the Trusts. At October 31, 2007, the shares owned by an affiliate of the Advisor of the Trusts were as follows:
| | |
|
| | | |
84 | ANNUAL REPORT | OCTOBER 31, 2007 | |
Notes to Financial Statements (continued)
| | | | |
| |
Trust | | Common
Shares Owned | |
| |
Dividend AchieversTM | | 8,028 | | |
Enhanced Dividend AchieversTM | | 8,028 | | |
Strategic Dividend AchieversTM | | 8,028 | | |
EcoSolutions | | 6,964 | | |
Global Energy and Resources | | 4,817 | | |
Global Equity Income | | 6,021 | | |
Global Opportunities | | 4,817 | | |
Health Sciences | | 4,817 | | |
International Growth | | 6,178 | | |
Real Asset | | 8,028 | | |
S&P Quality Rankings | | 8,028 | | |
World Investment | | 8,028 | | |
| |
Transaction in common shares of beneficial interest for the periods ended October 31, 2007, and October 31, 2006, were as follows:
| | | | | | | | | | |
| |
Trust | | Commencement
of Investment
Operations | | Initial
Public
Offering | | Underwriters’
Exercising the
Over-allotment
Option | |
| |
EcoSolutions | | | September 28, 2007 | | | 11,756,964 | | | — | |
Global Equity Income | | | March 30, 2007 | | | 40,006,021 | | | 4,919,954 | |
International Growth | | | May 30, 2007 | | | 98,506,178 | | | 7,800,000 | |
Real Asset | | | September 29, 2006 | | | 53,508,028 | | | 3,200,000 | |
| |
| | | | | | | |
| |
Trust | | Reinvestment of
Dividends and
Distributions for
the period ended
October 31, 2007 | | Reinvestment of
Dividends and
Distributions for
the period ended
October 31, 2006 | |
| |
Enhanced Dividend AchieversTM | | 354,756 | | | 334,800 | | |
Global Equity Income | | 69,217 | | | — | | |
Global Opportunities | | 120,470 | | | 36,764 | | |
Health Sciences | | 86,683 | | | — | | |
World Investment | | 98,239 | | | 64,870 | | |
| |
Offering costs incurred in connection with the Trusts’ offering of common shares have been charged against the proceeds from the initial common share offering of the common shares for EcoSolutions, Global Equity Income International Growth, and Real Asset in the amount of $1,415,735, $1,287,151, $1,449,386 and $1,254,847, respectively.
Note 6. Concentration Risks
As of October 31, 2007, the Trusts listed below had the following industry classifications:
| | | | | | | | | | | | | | | | |
| |
Sector | | Global
Equity
Income | | Global
Oppor-
tunities | | Inter-
national
Growth | | S&P
Quality
Rankings | | World
Investment | |
| |
Financial Institutions | | 22 | % | | 12 | % | | 17 | % | | 22 | % | | 13 | % | |
Energy | | 15 | | | 23 | | | 15 | | | 17 | | | 24 | | |
Consumer Products | | 11 | | | 17 | | | 14 | | | 11 | | | 17 | | |
Health Care | | 8 | | | 5 | | | — | | | 6 | | | 6 | | |
Industrials | | 9 | | | 9 | | | 14 | | | 12 | | | 8 | | |
Telecommunications | | 8 | | | 7 | | | 9 | | | 7 | | | 7 | | |
Technology | | 10 | | | 9 | | | 5 | | | 10 | | | 8 | | |
Basic Materials | | 6 | | | 8 | | | 13 | | | 3 | | | 8 | | |
Media | | 3 | | | — | | | 2 | | | — | | | — | | |
Entertainment & Leisure | | 2 | | | 1 | | | — | | | 1 | | | 1 | | |
Real Estate | | 2 | | | 4 | | | 5 | | | 6 | | | 4 | | |
Aerospace & Defense | | — | | | 1 | | | 1 | | | 1 | | | 1 | | |
Automotive | | 2 | | | 1 | | | 2 | | | 1 | | | 1 | | |
Transportation | | 2 | | | 2 | | | 2 | | | — | | | 2 | | |
Building & Development | | — | | | 1 | | | 1 | | | — | | | — | | |
Business Equipment &Services | | — | | | — | | | — | | | 3 | | | — | | |
| |
As of October 31, 2007, the Trusts listed below had the following geographic concentrations:
| | | | | | | | | | | | | |
| |
Country | | EcoSolutions | | Global
Energy and
Resources | | Health
Sciences | | Real
Asset | |
| |
United States | | 35 | % | | 60 | % | | 89 | % | | 45 | % | |
United Kingdom | | 8 | | | 3 | | | — | | | 15 | | |
Belgium | | 7 | | | — | | | — | | | — | | |
Germany | | 7 | | | — | | | 1 | | | — | | |
Brazil | | 4 | | | 2 | | | — | | | 5 | | |
Canada | | 4 | | | 17 | | | — | | | 13 | | |
Hong Kong | | 4 | | | 1 | | | — | | | — | | |
Spain | | 4 | | | — | | | — | | | — | | |
Denmark | | 3 | | | 1 | | | — | | | — | | |
France | | 3 | | | 2 | | | 1 | | | 1 | | |
Australia | | 2 | | | 2 | | | — | | | 9 | | |
Bermuda | | 2 | | | 2 | | | — | | | — | | |
Norway | | 2 | | | 3 | | | — | | | 1 | | |
Switzerland | | 2 | | | — | | | 7 | | | — | | |
Argentina | | 1 | | | — | | | — | | | — | | |
Austria | | 1 | | | — | | | — | | | — | | |
Chile | | 1 | | | — | | | — | | | — | | |
China | | 1 | | | — | | | 2 | | | 2 | | |
Greece | | 1 | | | 3 | | | — | | | — | | |
Israel | | 1 | | | — | | | — | | | — | | |
Italy | | 1 | | | 2 | | | — | | | — | | |
Japan | | 1 | | | — | | | — | | | — | | |
Malaysia | | 1 | | | — | | | — | | | — | | |
Netherlands | | 1 | | | 1 | | | — | | | 2 | | |
Philippines | | 1 | | | — | | | — | | | — | | |
Singapore | | 1 | | | — | | | — | | | — | | |
South Africa | | 1 | | | — | | | — | | | 3 | | |
Luxembourg | | — | | | 1 | | | — | | | — | | |
Mexico | | — | | | — | | | — | | | 1 | | |
New Guinea | | — | | | — | | | — | | | 1 | | |
Peru | | — | | | — | | | — | | | 1 | | |
Russia | | — | | | — | | | — | | | 1 | | |
| |
Note 7. Subsequent Event
Subsequent to October 31, 2007, the relevant Board declared distributions per common share for Enhanced Dividend AchieversTM, Global Opportunities, International Growth, Real Asset, S&P Quality Rankings and World Investment payable November 30, 2007, to shareholders of record on November 15, 2007 with an ex-date of November 13, 2007, and for Dividend AchieversTM, Enhanced Dividend AchieversTM, Strategic Dividend AchieversTM, EcoSolutions, Global Energy and Resources, Health Sciences, Real Asset and World Investment payable December 31, 2007, to shareholders of record on December 20, 2007 with an ex-date of December 18, 2007. The per share distributions declared were as follows:
| | | | | | |
| |
Trust | | Distribution per
Common Share | |
| |
Dividend AchieversTM | | | $ | 0.225000 | | |
Enhanced Dividend AchieversTM | | | | 0.101875 | | |
Strategic Dividend AchieversTM | | | | 0.225000 | | |
EcoSolutions | | | | 0.400000 | | |
Global Energy and Resources | | | | 0.375000 | | |
Global Equity Income | | | | 0.475000 | | |
Global Opportunities | | | | 0.568750 | | |
Health Sciences | | | | 0.384375 | | |
International Growth | | | | 0.151700 | | |
Real Asset | | | | 0.090600 | | |
S&P Quality Rankings | | | | 0.225000 | | |
World Investment | | | | 0.113750 | | |
| |
| | | |
| | | |
| ANNUAL REPORT | OCTOBER 31, 2007 | 85 |
Report of Independent Registered Public Accounting Firm
| |
To the Trustees and Shareholders of: |
| BlackRock Dividend AchieversTM Trust |
| BlackRock Enhanced Dividend AchieversTM Trust |
| BlackRock Strategic Dividend AchieversTM Trust |
| BlackRock EcoSolutions Investment Trust |
| BlackRock Global Energy and Resources Trust |
| BlackRock Global Equity Income Trust |
| BlackRock Global Opportunities Equity Trust |
| BlackRock Health Sciences Trust |
| BlackRock International Growth and Income Trust |
| BlackRock Real Asset Equity Trust |
| BlackRock S&P Quality Rankings Global Equity Managed Trust |
| BlackRock World Investment Trust |
| (Individually a “Trust,” and collectively the “Trusts”) |
We have audited the accompanying statements of assets and liabilities of the Trusts, including the portfolios of investments, as of October 31, 2007, and the related statements of operations for the period then ended, the statements of changes in net assets and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Trusts’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Trusts are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trusts’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2007, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Trusts as of October 31, 2007, the results of their operations for the period then ended, the changes in their net assets and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
New York, New York
December 28, 2007
| | | |
| | | |
86 | ANNUAL REPORT | OCTOBER 31, 2007 | |
Dividend Reinvestment Plans (unaudited)
Pursuant to each Trust’s Dividend Reinvestment Plan (the “Plan”), common shareholders are automatically enrolled to have all distributions reinvested by The Bank of New York (the “Plan Agent”) in the respective Trust’s shares pursuant to the Plan. Shareholders who elect not to participate in the Plan will receive all distributions in cash paid by check and mailed directly to the shareholders of record (or if the shares are held in street or other nominee name, then to the nominee) by the Plan Agent.
The Plan Agent serves as agent for the shareholders in administering the Plan. After a Trust declares a distribution, the Plan Agent will acquire shares for the participants’ accounts, depending upon the circumstances described below, either (i) through receipt of unissued but authorized shares from the Trust (“newly issued shares”) or (ii) by purchase of outstanding shares on the open market, on the Trust’s primary exchange or elsewhere (“open-market purchases”). If, on the distribution payment date, the net asset value per share (“NAV”) is equal to or less than the market price per share plus estimated brokerage commissions (such condition being referred to herein as “market premium”), the Plan Agent will invest the distribution amount in newly issued shares on behalf of the participants. The number of newly issued shares to be credited to each participant’s account will be determined by dividing the dollar amount of the distribution by the NAV on the date the shares are issued. However, if the NAV is less than 95% of the market price on the payment date, the dollar amount of the distribution will be divided by 95% of the market price on the payment date. If, on the distribution payment date, the NAV is greater than the market value per share plus estimated brokerage commissions (such condition being referred to herein as “market discount”), the Plan Agent will invest the distribution amount in shares acquired on behalf of the participants in open-market purchases.
Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and processed by the Plan Administrator prior to the distribution record date; otherwise such termination or resumption will be effective with respect to any subsequently declared distribution.
The Plan Agent’s fees for the handling of the reinvestment of distributions will be paid by each Trust. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agent’s open market purchases in connection with the reinvestment of distributions. The automatic reinvestment of distributions will not relieve participants of any federal income tax that may be payable on such distributions.
Each Trust reserves the right to amend or terminate the Plan. There is no direct service charge to participants in the Plan; however, each Trust reserves the right to amend the Plan to include a service charge payable by the participants. Participants that request a sale of shares through the Plan Agent are subject to a $2.50 sales fee and a $0.15 per share sold brokerage commission. All correspondence concerning the Plan should be directed to the Plan Agent at The Bank of New York, Dividend Reinvestment Department, P.O. Box 1958, Newark, New Jersey 07101-9774; or by calling 1-866-216-0242.
|
BlackRock Privacy Principles |
| |
| BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their nonpublic personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties. |
| |
| If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations. |
| |
| BlackRock obtains or verifies personal nonpublic information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our Web site. |
| |
| BlackRock does not sell or disclose to nonaffiliated third parties any nonpublic personal information about its Clients, except as permitted by law or as is necessary to service Client accounts. These nonaffiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose. |
| |
| We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to nonpublic personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the nonpublic personal information of its Clients, including procedures relating to the proper storage and disposal of such information. |
| | | |
| | | |
| ANNUAL REPORT | OCTOBER 31, 2007 | 87 |
Additional Information (unaudited)
The Joint Annual Meeting of Shareholders, for each Trust other than EcoSolutions was held on August 16, 2007 for shareholders of record on June 20, 2007, to elect director or trustee nominees of each Trust. This proposal was part of the reorganization of the Trust’s Boards of Trustees (the “Boards”) to take effect on or about November 1, 2007. The Board is organized into three classes, one class of which is elected annually. Each Trustee serves a three-year term concurrent with the class into which he or she is elected.
Approved the Class I Directors/Trustees as follows:
| | | | | | | | | | | | | |
| |
| | G. Nicholas Beckwith, III | | Kent Dixon | | R. Glenn Hubbard | |
| | | | | | | |
| | Votes For | | Votes
Withheld | | Votes For | | Votes
Withheld | | Votes For | | Votes
Withheld | |
| |
Dividend AchieversTM | | 46,375,210 | | 486,742 | | 46,364,173 | | 497,779 | | 46,381,468 | | 480,484 | |
Enhanced Dividend AchieversTM | | 59,951,649 | | 524,375 | | 59,962,185 | | 513,839 | | 59,969,621 | | 506,403 | |
Strategic Dividend AchieversTM | | 20,083,640 | | 1,189,563 | | 20,081,132 | | 1,192,071 | | 20,093,119 | | 1,180,085 | |
Global Energy and Resources | | 26,342,759 | | 187,799 | | 26,346,216 | | 184,343 | | 26,344,078 | | 186,480 | |
Global Equity Income | | 22,881,468 | | 136,571 | | 22,886,675 | | 131,364 | | 22,882,548 | | 135,491 | |
Global Opportunities | | 10,779,387 | | 123,908 | | 10,780,071 | | 123,224 | | 10,782,747 | | 120,548 | |
Health Sciences | | 7,106,068 | | 29,559 | | 7,106,621 | | 29,006 | | 7,106,053 | | 29,574 | |
International Growth | | 51,280,619 | | 233,380 | | 51,272,769 | | 241,230 | | 51,279,169 | | 234,830 | |
Real Asset | | 51,422,102 | | 379,437 | | 51,426,173 | | 375,366 | | 51,415,756 | | 385,783 | |
S&P Quality Rankings | | 5,231,311 | | 56,030 | | 5,233,343 | | 53,998 | | 5,229,943 | | 57,398 | |
World Investment | | 46,325,644 | | 840,834 | | 46,318,329 | | 848,149 | | 46,325,529 | | 840,949 | |
| |
| | | | | | | | | |
| | W. Carl Kester | | Robert S. Salomon, Jr. | |
| | | | | |
| | Votes For | | Votes
Withheld | | Votes For | | Votes
Withheld | |
| |
Dividend AchieversTM | | 46,382,675 | | 479,277 | | 46,359,402 | | 502,550 | |
Enhanced Dividend AchieversTM | | 59,977,474 | | 498,550 | | 59,957,132 | | 518,892 | |
Strategic Dividend AchieversTM | | 0 | | 0 | | 20,081,425 | | 1,191,778 | |
Global Energy and Resources | | 0 | | 0 | | 26,344,582 | | 185,977 | |
Global Equity Income | | 22,882,498 | | 135,541 | | 22,886,280 | | 131,759 | |
Global Opportunities | | 0 | | 0 | | 10,780,421 | | 122,874 | |
Health Sciences | | 0 | | 0 | | 7,107,021 | | 28,606 | |
International Growth | | 51,278,269 | | 235,730 | | 51,267,169 | | 246,830 | |
Real Asset | | 0 | | 0 | | 51,428,552 | | 372,987 | |
S&P Quality Rankings | | 0 | | 0 | | 5,231,911 | | 55,430 | |
World Investment | | 0 | | 0 | | 46,312,524 | | 853,954 | |
| |
Approved the Class II Directors/Trustees as follows:
| | | | | | | | | | | | | |
| |
| | Richard S. Davis | | Frank J. Fabozzi | | James T. Flynn | |
| | | | | | | |
| | Votes For | | Votes
Withheld | | Votes For | | Votes
Withheld | | Votes For | | Votes
Withheld | |
| |
Dividend AchieversTM | | 46,380,631 | | 481,321 | | 46,379,611 | | 482,379,611 | | 46,373,717 | | 488,235 | |
Enhanced Dividend AchieversTM | | 59,968,008 | | 508,016 | | 59,968,540 | | 507,484 | | 59,971,745 | | 504,279 | |
Strategic Dividend AchieversTM | | 20,084,205 | | 1,188,999 | | 0 | | 0 | | 20,083,713 | | 1,189,490 | |
Global Energy and Resources | | 26,311,984 | | 218,574 | | 0 | | 0 | | 26,343,800 | | 186,758 | |
Global Equity Income | | 22,886,925 | | 131,114 | | 22,886,475 | | 131,564 | | 22,886,675 | | 131,364 | |
Global Opportunities | | 10,782,927 | | 120,368 | | 0 | | 0 | | 10,781,523 | | 121,772 | |
Health Sciences | | 7,107,068 | | 28,559 | | 0 | | 0 | | 7,106,668 | | 28,959 | |
International Growth | | 51,285,369 | | 228,630 | | 51,282,069 | | 231,930 | | 51,271,369 | | 242,630 | |
Real Asset | | 51,433,329 | | 368,210 | | 0 | | 0 | | 51,429,658 | | 371,881 | |
S&P Quality Rankings | | 5,125,511 | | 161,830 | | 0 | | 0 | | 5,230,543 | | 56,798 | |
World Investment | | 46,333,894 | | 832,584 | | 0 | | 0 | | 46,325,105 | | 841,373 | |
| |
| | | | | | | | | | | | | |
| | Karen P. Robards | | | | | | | | | |
| | | | | | | | | | | |
| | Votes For | | Votes
Withheld | | | | | | | | | |
| |
Dividend AchieversTM | | 46,383,758 | | 478,194 | | | | | | | | | |
Enhanced Dividend AchieversTM | | 59,970,480 | | 505,544 | | | | | | | | | |
Strategic Dividend AchieversTM | | 20,089,314 | | 1,183,890 | | | | | | | | | |
Global Energy and Resources | | 26,349,732 | | 180,826 | | | | | | | | | |
Global Equity Income | | 22,884,498 | | 133,541 | | | | | | | | | |
Global Opportunities | | 10,782,393 | | 120,902 | | | | | | | | | |
Health Sciences | | 7,106,759 | | 28,868 | | | | | | | | | |
International Growth | | 51,278,869 | | 235,130 | | | | | | | | | |
Real Asset | | 51,431,879 | | 369,660 | | | | | | | | | |
S&P Quality Rankings | | 5,231,818 | | 55,523 | | | | | | | | | |
World Investment | | 46,332,003 | | 834,475 | | | | | | | | | |
| |
| | | |
| | | |
88 | ANNUAL REPORT | OCTOBER 31, 2007 | |
Additional Information (continued) (unaudited)
Approved the Class III Directors/Trustees as follows:
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | Richard E. Cavanagh | | Kathleen F. Feldstein | | Henry Gabbay | |
| | | | | | | |
| | Votes For | | Votes
Withheld | | Votes For | | Votes
Withheld | | Votes For | | Votes
Withheld | |
| | | | | | | | | | | | | | |
Dividend AchieversTM | | | 46,383,989 | | | 477,963 | | | 46,380,436 | | | 481,516 | | | 46,418,175 | | | 443,777 | |
Enhanced Dividend AchieversTM | | | 59,973,175 | | | 502,849 | | | 59,955,952 | | | 520,072 | | | 59,966,184 | | | 509,840 | |
Strategic Dividend AchieversTM | | | 20,091,257 | | | 1,181,947 | | | 20,088,857 | | | 1,184,346 | | | 21,011,482 | | | 261,722 | |
Global Energy and Resources | | | 26,350,390 | | | 180,168 | | | 26,344,920 | | | 185,638 | | | 26,319,638 | | | 210,920 | |
Global Equity Income | | | 22,886,475 | | | 131,564 | | | 22,885,798 | | | 132,241 | | | 22,886,925 | | | 131,114 | |
Global Opportunities | | | 10,782,497 | | | 120,798 | | | 10,781,553 | | | 121,742 | | | 10,782,177 | | | 121,118 | |
Health Sciences | | | 7,107,068 | | | 28,559 | | | 7,104,593 | | | 31,033 | | | 7,107,468 | | | 28,159 | |
International Growth | | | 51,282,669 | | | 231,330 | | | 51,268,219 | | | 245,780 | | | 51,286,019 | | | 227,980 | |
Real Asset | | | 51,423,879 | | | 377,660 | | | 51,421,185 | | | 380,354 | | | 51,431,312 | | | 370,227 | |
S&P Quality Rankings | | | 5,232,943 | | | 54,398 | | | 5,231,818 | | | 55,523 | | | 5,135,765 | | | 151,576 | |
World Investment | | | 46,331,951 | | | 834,527 | | | 46,319,128 | | | 847,350 | | | 46,337,190 | | | 829,288 | |
| | | | | | | | | | | | | | | | | | | | |
|
| | Jerrold B. Harris | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | Votes For | | Votes
Withheld | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Dividend AchieversTM | | | 46,384,364 | | | 477,588 | | | | | | | | | | | | | |
Enhanced Dividend AchieversTM | | | 59,972,764 | | | 503,261 | | | | | | | | | | | | | |
Strategic Dividend AchieversTM | | | 20,088,138 | | | 1,185,066 | | | | | | | | | | | | | |
Global Energy and Resources | | | 26,345,652 | | | 184,906 | | | | | | | | | | | | | |
Global Equity Income | | | 22,887,975 | | | 130,064 | | | | | | | | | | | | | |
Global Opportunities | | | 10,782,927 | | | 120,368 | | | | | | | | | | | | | |
Health Sciences | | | 7,107,068 | | | 28,559 | | | | | | | | | | | | | |
International Growth | | | 51,279,469 | | | 234,530 | | | | | | | | | | | | | |
Real Asset | | | 51,429,682 | | | 371,857 | | | | | | | | | | | | | |
S&P Quality Rankings | | | 5,226,862 | | | 60,479 | | | | | | | | | | | | | |
World Investment | | | 46,332,878 | | | 833,600 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Approved the Class III Directors/Trustees as follows: | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | Richard E. Cavanagh | | Kathleen F. Feldstein | | Henry Gabbay | |
| | | | | | | |
| | Votes For | | Votes
Withheld | | Votes For | | Votes
Withheld | | Votes For | | Votes
Withheld | |
| | | | | | | | | | | | | | |
Dividend AchieversTM | | | 46,383,989 | | | 477,963 | | | 46,380,436 | | | 481,516 | | | 46,418,175 | | | 443,777 | |
Enhanced Dividend AchieversTM | | | 59,973,175 | | | 502,849 | | | 59,955,952 | | | 520,072 | | | 59,966,184 | | | 509,840 | |
Strategic Dividend AchieversTM | | | 20,091,257 | | | 1,181,947 | | | 20,088,857 | | | 1,184,346 | | | 21,011,482 | | | 261,722 | |
Global Energy and Resources | | | 26,350,390 | | | 180,168 | | | 26,344,920 | | | 185,638 | | | 26,319,638 | | | 210,920 | |
Global Equity Income | | | 22,886,475 | | | 131,564 | | | 22,885,798 | | | 132,241 | | | 22,886,925 | | | 131,114 | |
Global Opportunities | | | 10,782,497 | | | 120,798 | | | 10,781,553 | | | 121,742 | | | 10,782,177 | | | 121,118 | |
Health Sciences | | | 7,107,068 | | | 28,559 | | | 7,104,593 | | | 31,033 | | | 7,107,468 | | | 28,159 | |
International Growth | | | 51,282,669 | | | 231,330 | | | 51,268,219 | | | 245,780 | | | 51,286,019 | | | 227,980 | |
Real Asset | | | 51,423,879 | | | 377,660 | | | 51,421,185 | | | 380,354 | | | 51,431,312 | | | 370,227 | |
S&P Quality Rankings | | | 5,232,943 | | | 54,398 | | | 5,231,818 | | | 55,523 | | | 5,135,765 | | | 151,576 | |
World Investment | | | 46,331,951 | | | 834,527 | | | 46,319,128 | | | 847,350 | | | 46,337,190 | | | 829,288 | |
| | | | | | | | | | | | | | | | | | | | |
|
| | Jerrold B. Harris | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | Votes For | | Votes
Withheld | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Dividend AchieversTM | | | 46,384,364 | | | 477,588 | | | | | | | | | | | | | |
Enhanced Dividend AchieversTM | | | 59,972,764 | | | 503,261 | | | | | | | | | | | | | |
Strategic Dividend AchieversTM | | | 20,088,138 | | | 1,185,066 | | | | | | | | | | | | | |
Global Energy and Resources | | | 26,345,652 | | | 184,906 | | | | | | | | | | | | | |
Global Equity Income | | | 22,887,975 | | | 130,064 | | | | | | | | | | | | | |
Global Opportunities | | | 10,782,927 | | | 120,368 | | | | | | | | | | | | | |
Health Sciences | | | 7,107,068 | | | 28,559 | | | | | | | | | | | | | |
International Growth | | | 51,279,469 | | | 234,530 | | | | | | | | | | | | | |
Real Asset | | | 51,429,682 | | | 371,857 | | | | | | | | | | | | | |
S&P Quality Rankings | | | 5,226,862 | | | 60,479 | | | | | | | | | | | | | |
World Investment | | | 46,332,878 | | | 833,600 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | |
| | | |
| ANNUAL REPORT | OCTOBER 31, 2007 | 89 |
Additional Information (continued) (unaudited)
The Trusts other than EcoSolutions had an additional proposal (Proposal #2) to amend its respective Declaration of Trust to increase the maximum number of Board Members to 15:
| | | | | | | | | | |
| | | | | | | | | | | |
| | Votes For | | Votes Against | | Votes Abstain | |
| | | | | | | |
Dividend AchieversTM | | | 45,473,852 | | | 772,229 | | | 615,871 | |
Enhanced Dividend AchieversTM | | | 59,480,260 | | | 628,435 | | | 367,329 | |
Strategic Dividend AchieversTM | | | 19,725,710 | | | 1,317,838 | | | 229,656 | |
Global Energy and Resources | | | 26,064,916 | | | 257,258 | | | 208,384 | |
Global Equity Income | | | 21,974,925 | | | 430,371 | | | 612,743 | |
Global Opportunities | | | 10,720,289 | | | 153,983 | | | 29,023 | |
Health Sciences | | | 7,050,306 | | | 54,567 | | | 30,753 | |
International Growth | | | 50,546,605 | | | 555,072 | | | 412,323 | |
Real Asset | | | 50,867,641 | | | 460,466 | | | 473,433 | |
S&P Quality Rankings | | | 5,140,670 | | | 100,300 | | | 46,371 | |
World Investment | | | 45,174,163 | | | 1,286,167 | | | 706,149 | |
| | | | | | | | | | | |
The Trusts listed for trading on the New York Stock Exchange (“NYSE”) have filed with the NYSE their annual chief executive officer certification regarding compliance with the NYSE’s listing standards and the Trusts listed for trading on the American Stock Exchange (“AMEX”) have filed with the AMEX their corporate governance certification regarding compliance with the AMEX’s listing standards. All of the Trusts have filed with the Securities and Exchange Commission the certification of its chief executive officer and chief financial officer required by section 302 of the Sarbanes-Oxley Act.
During the period, there were no material changes in any Trusts’ investment objective or policies or to the Trusts’ charters or by-laws that were not approved by the shareholders or in the principle risk factors associated with investment in the Trusts. There have been no changes in the persons who are primarily responsible for the day-to-day management of the Trusts’ portfolios.
The Trusts do not make available copies of their respective Statements of Additional Information because the Trusts’ shares are not continuously offered, which means that the Statement of Additional Information of each Trust has not been updated after completion of such Trust’s offering and the information contained in each Trust’s Statement of Additional Information may have become outdated.
Quarterly performance, semi-annual and annual reports and other information regarding the Trusts may be found on BlackRock’s website, which can be accessed at http://www.blackrock.com. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Trusts and does not, and is not intended, to incorporate BlackRock’s website into this report.
| | | |
| | | |
90 | ANNUAL REPORT | OCTOBER 31, 2007 | |
Trustees Information (unaudited)
| | | | | | | | | | | | |
Name, Address and
Year of Birth | | Current Positions
Held With the
Trusts | | Term of Office
and Length of
Time Served | | Principal Occupations
During the Past Five Years | | Number of
Portfolios
Overseen
Within the
Fund
Complex1 | | Other Directorships
Held Outside the
Fund Complex1 | | Events or Transactions by
Reason of Which the
Trustee is an Interested
Person as Defined in
Section 2(a) (19) of the
1940 Act |
| | | | | | | | | | | | | |
Interested Trustee2 |
| | | | | | | | | | | | | |
Ralph L. Schlosstein
BlackRock, Inc.
40 East 52nd Street
New York, NY 10022
1951
| | Chairman of the Board3 | | 3 years4/since inception | | Director from 1999 to 2007 and President of BlackRock, Inc. from 1998 to 2007. Chairman and President of the BlackRock Liquidity Funds.
| | 70 | | None | | Former Director and President of the Advisor until September 2007. |
|
| | | | | | | | | | | | | |
| |
1 | The Fund Complex means two or more registered investment companies that: (1) hold themselves out to investors as related companies for purposes of investment and investor services; or (2) have a common investment advisor or have an investment advisor that is an affiliated person of the investment advisor of any of the other registered investment companies. |
2 | Interested Director/Trustee as defined by Section 2(a)(19) of the Investment Company Act of 1940. |
3 | Director/Trustee since inception; appointed Chairman of the Board on August 22, 2002. |
4 | The Board is classified into three classes of which one class is elected annually. Each Director/Trustee serves a three-year term concurrent with the class from which they are elected. |
| | | |
| | | |
| ANNUAL REPORT | OCTOBER 31, 2007 | 91 |
Trustees Information (unaudited) (concluded)
| | | | | | | | | | |
Name, Address and
Year of Birth | | Current Positions Held
With the Trusts | | Term of Office and
Length of Time
Served | | Principal Occupation(s)
During Past 5 Years | | Number of
Portfolios Overseen
Within the Fund
Complex1 | | Other Public Directorships
Held by Trustee |
| |
Independent Trustees |
|
| |
Richard E. Cavanagh
P.O. Box 4546
New York, NY
10163-4546
1946 | | Lead Trustee Audit Committee Member2 | | 3 years3/since inception | | Trustee, Aircraft Finance Trust (AFT) from 1999 to the present; Director, The Guardian Life Insurance Company of America and The Mutual Life Insurance Company from 1998 to the present; Trustee, Educational Testing Service (ETS) from 1997 until the present; Director, the Freemont Group from 1996 until the present. President and Chief Executive Officer of The Conference Board, Inc. (a leading global business research organization) from 1995 to 2007. | | 60 | | Arch Chemical (Chemicals and Allied Products). |
| | | | | | | | | | | |
Kent Dixon
P.O. Box 4546
New York, NY
10163-4546
1937 | | Trustee Audit Committee Member2 | | 3 years3/since inception | | Consultant/Investor since 1988 | | 60 | | None |
| | | | | | | | | | | |
Frank J. Fabozzi
P.O. Box 4546
New York, NY
10163-4546
1948 | | Trustee Audit Committee Member2 | | 3 years3/since inception | | Consultant/Editor of, “The Journal of Portfolio Management”; Yale University, School of Management, Professor in the Practice of Finance and Becton Fellow from 2006 until present; Adjunct Professor of Finance and Becton Fellow from 2005 to 2006; Professor in the practice of Finance from 2003 to 2005; Adjunct Professor of Finance from 1994 to 2003; Author and Editor. | | 60 | | None |
| | | | | | | | | | | |
Kathleen F. Feldstein
P.O. Box 4546
New York, NY
10163-4546
1941 | | Trustee | | 3 years3/since January 19, 2005 | | President of Economic Studies, Inc., (a Belmont MA-based private economic consulting firm) since 1987; Chair, Board of Trustees, McLean Hospital since 2000. Member of the Board of Partners Community Healthcare, Inc. from 2005 until the present; Member of the Board of Partners HealthCare and Sherrill House from 1990 to the present; Trustee, Museum of Fine Arts, Boston from 1992 until the present and a Member of the Visiting Committee to the Harvard University Art Museum from 2003 to the present; Trustee, The Committee for Economic Development (a research organization of business leaders and educators) from 1990 to the present; Member of the Advisory Board to the International School of Business, Brandeis University from 2002 to the present. | | 60 | | Director of The McClatchy Company |
| | | | | | | | | | | |
R. Glenn Hubbard
P.O. Box 4546
New York, NY
10163-4546
1958
| | Trustee | | 3 years3/since November 16, 2004 | | Dean of Columbia Business School since 2004; Columbia faculty member since 1988; Co-director of Columbia Business School’s Entrepreneurship Program 1997 to 2004; Visiting Professor at the John F. Kennedy School of Government at Harvard University and the Harvard Business School from 1985, as well as the University of Chicago from 1994; Deputy Assistant Secretary of the U.S. Treasury Department for Tax Policy from 1991 to 1993; Chairman of the U.S. Council of Economic Advisers under the President of the United States from 2001 to 2003. | | 60 | | ADP, KKR Financial Corporation, Duke Realty, Metropolitan Life Insurance Company. |
| |
1 | The Fund Complex means two or more registered investments companies that: (1) hold themselves out to investors as related companies for purposes of investment and investor services; or (2) have a common investment advisor or have an investment advisor that is an affiliated person of the investment advisor of any of the other registered investment companies. |
2 | The Board of each Trust has determined that each Trust has three Audit Committee financial experts serving on its Audit Committee, Mr. Cavanagh, Mr. Dixon and Mr. Fabozzi, each of whom is independent for the purpose of the definition of Audit Committee financial expert as applicable to the Trusts. |
3 | The Board is classified into three classes of which one class is elected annually. Each Director/Trustee serves a three-year term concurrent with the class from which they are elected. |
| | | |
| | | |
92 | ANNUAL REPORT | OCTOBER 31, 2007 | |
Section 19 Notices (unaudited)
The amounts and sources of distributions reported are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon the Trusts’ investment experience during the remainder of its fiscal year and may be subject to changes based on the tax regulations. The Trusts will send you a Form 1099-DIV for the calendar year that will tell you how to report these dividends and distributions for federal income tax purposes.
October 31, 2007
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Total Cumulative Distributions
for the Fiscal Year to Date | | % Breakdown of the Total Cumulative
Distributions for the Fiscal Year to Date | |
| | | | | |
Fund Name | | Net
Investment
Income | | Net Realized
Capital Gains | | Return of
Capital | | Total Per
Common
Share | | Net
Investment
Income | | Net Realized
Capital Gains | | Return of
Capital | | Total Per
Common
Share | |
| | | | | | | | | | | | | | | | | | |
Dividend AchieversTM* | | $ | 0.44 | | $ | 0.23 | | $ | 0.23 | | $ | 0.90 | | 49 | % | | 25 | % | | 26 | % | | 100 | % | |
Enhanced Dividend AchieversTM | | $ | 0.62 | | $ | 0.60 | | $ | — | | $ | 1.22 | | 51 | % | | 49 | % | | 0 | % | | 100 | % | |
Strategic Dividend AchieversTM* | | $ | 0.45 | | $ | 0.23 | | $ | 0.23 | | $ | 0.90 | | 50 | % | | 25 | % | | 25 | % | | 100 | % | |
Global Energy and Resources Trust | | $ | 0.50 | | $ | 1.33 | | $ | — | | $ | 1.84 | | 28 | % | | 72 | % | | 0 | % | | 100 | % | |
Global Equity Income* | | $ | 0.18 | | $ | 0.20 | | $ | 0.57 | | $ | 0.95 | | 19 | % | | 21 | % | | 60 | % | | 100 | % | |
Global Opportunities | | $ | 1.20 | | $ | 1.31 | | $ | — | | $ | 2.51 | | 48 | % | | 52 | % | | 0 | % | | 100 | % | |
Health Sciences | | $ | 0.04 | | $ | 2.16 | | $ | — | | $ | 2.20 | | 2 | % | | 98 | % | | 0 | % | | 100 | % | |
International Growth & Income | | $ | 0.13 | | $ | 0.20 | | $ | 0.28 | | $ | 0.61 | | 21 | % | | 33 | % | | 46 | % | | 100 | % | |
Real Asset Equity | | $ | 0.26 | | $ | 0.83 | | $ | — | | $ | 1.09 | | 24 | % | | 76 | % | | 0 | % | | 100 | % | |
S&P Quality Rankings* | | $ | 0.43 | | $ | 0.39 | | $ | 0.08 | | $ | 0.90 | | 49 | % | | 43 | % | | 9 | % | | 100 | % | |
World Investment | | $ | 0.27 | | $ | 1.48 | | $ | — | | $ | 1.75 | | 16 | % | | 84 | % | | 0 | % | | 100 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
* | The Fund estimates that it has distributed more than its income and net realized gains; therefore, a portion of the distribution may be a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to the shareholder. A return of capital does not necessarily reflect the Fund’s investment performance and should be confused with ‘yield’ or ‘income’. |
| |
| The amounts and sources of distributions reported are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on the tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purpose. |
| | | |
| | | |
| ANNUAL REPORT | OCTOBER 31, 2007 | 93 |
BlackRock Closed-End Funds
|
Officers |
Robert S. Kapito, President |
Donald C. Burke, Treasurer |
Bartholomew Battista, Chief Compliance Officer |
Anne Ackerley, Vice President |
Vincent B. Tritto, Secretary |
|
Investment Advisor |
BlackRock Advisors, LLC |
100 Bellevue Parkway |
Wilmington, DE 19809 |
(800) 227-7BFM |
|
Sub-Advisors |
BlackRock Financial Management, Inc.1 |
40 East 52nd Street |
New York, NY 10022 |
|
BlackRock Capital Management, Inc.2 |
One Financial Center |
Boston, MA 02111 |
|
BlackRock Investment Management, LLC3 |
800 Scudders Mill Road |
Princeton, NJ 08356 |
|
BlackRock Investment Management International Ltd.4 |
33 King William Street |
London, EC4R 9AS UK |
|
State Street Research & Management Co.5 |
One Financial Center |
Boston, MA 02111 |
|
Accounting Agent |
The Bank of New York Mellon |
2 Hanson Place |
Brooklyn, NY 11217 |
|
Custodian |
The Bank of New York Mellon |
100 Colonial Center Parkway |
Suite 200 |
Lake Mary, FL 32746 |
|
Transfer Agent |
The Bank of New York Mellon |
P.O. Box 11258 |
Church Street Station |
New York, NY 10286 |
(866) 216-0242 |
|
Independent Registered Public Accounting Firm |
Deloitte & Touche LLP |
2 World Financial Center |
New York, NY 10281 |
|
Legal Counsel |
Skadden, Arps, Slate, Meagher & Flom LLP |
Four Times Square |
New York, NY 10036 |
|
Legal Counsel – Independent Trustees |
Debevoise & Plimpton LLP |
919 Third Avenue |
New York, NY 10022 |
| |
1 | For Dividend Achievers, Enhanced Dividend Achievers, Strategic Dividend Achievers, S&P Quality Rankings and World Investment. |
2 | For International Growth and Real Asset. |
3 | For EcoSolutions, Global Equity Income and Real Asset. |
4 | For EcoSolutions and Real Asset. |
5 | For Global Energy and Resources. |
This report is for shareholder information. This is not a prospectus intended for use in the purchase or sale of Trust shares. Statements and other information contained in this report are as dated and are subject to change.
|
BlackRock Closed-End Funds |
c/o BlackRock Advisors, LLC |
100 Bellevue Parkway |
Wilmington, DE 19809 |
(800) 227-7BFM |
The Trusts will mail only one copy of shareholder documents, including annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact the Trusts at (866) 216-0242.
The Trusts have delegated to the Advisor the voting of proxies relating to their voting securities pursuant to the Advisor’s proxy voting policies and procedures. You may obtain a copy of these proxy voting policies and procedures, without charge, by calling (866) 216-0242. These policies and procedures are also available on the website of the Securities and Exchange Commission (the “Commission”) at http://www.sec.gov.
Information on how proxies relating to the Trusts’ voting securities were voted by the Advisor during the most recent 12-month period ended June 30th is available without charge, upon request, by calling (866) 216-0242 or on the website of the Commission at http://www.sec.gov.
The Trusts file their complete schedule of portfolio holdings for the first and third quarters of their respective fiscal years with the Commission on Form N-Q. Each Trust’s Form N-Q will be available on the Commission’s website at http://www.sec.gov. Each Trust’s Form N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information regarding the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Each Trust’s Form N-Q may also be obtained, without charge, upon request, by calling (866) 216-0242.
| | | |
| | | |
| ANNUAL REPORT | OCTOBER 31, 2007 | |
| |
This report is for shareholder information. This is not a prospectus intended for
use in the purchase or sale of Trust shares. Statements and other information
contained in this report are as dated and are subject to change. | |
| |
CEF-ANN-7-1007 | 
|
| Item 2 – | Code of Ethics – The registrant (or the “Fund”) has adopted a code of ethics, as of the end of the period covered by this report, applicable to the registrant's principal executive officer, principal financial officer and principal accounting officer, or persons performing similar functions. During the period covered by this report, there have been no amendments to or waivers granted under the code of ethics. A copy of the code of ethics is available without charge at www.blackrock.com. |
| | |
| Item 3 – | Audit Committee Financial Expert – The registrant's board of directors or trustees, as applicable (the “board of directors”) has determined that (i) the registrant has the following audit committee financial experts serving on its audit committee and (ii) each audit committee financial expert is independent: |
| | |
| | Kent Dixon
Frank J. Fabozzi
Dr. Andrew F. Brimmer (retired as of December 31, 2006)
Robert S. Salomon, Jr. (term began effective November 1, 2007)
W. Carl Kester (term began effective November 1, 2007)
James T. Flynn (term began effective November 1, 2007)
Karen P. Robards (term began effective November 1, 2007) |
| | |
| | The registrant's board of directors has determined that W. Carl Kester and Karen P. Robards qualify as financial experts pursuant to Item 3(c)(4) of Form N-CSR. |
| | |
| | Prof. Kester has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Prof. Kester has been involved in providing valuation and other financial consulting services to corporate clients since 1978. Prof. Kester’s financial consulting services present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant’s financial statements. |
| | |
| | Ms. Robards has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Ms. Robards has been President of Robards & Company, a financial advisory firm, since 1987. Ms. Robards was formerly an investment banker for more than 10 years where she was responsible for evaluating and assessing the performance of companies based on their financial results. Ms. Robards has over 30 years of experience analyzing financial statements. She also is the member of the Audit Committees of one publicly held company and a non-profit organization. |
| | |
| | Under applicable securities laws, a person determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. |
| | |
| Item 4 – | Principal Accountant Fees and Services |
| | (a) Audit Fees | (b) Audit-Related Fees1 | (c) Tax Fees2 | (d) All Other Fees3 |
| | Current | Previous | Current | Previous | Current | Previous | Current | Previous |
| | Fiscal Year | Fiscal Year | Fiscal Year | Fiscal Year | Fiscal Year | Fiscal Year | Fiscal Year | Fiscal Year |
| Entity Name | End | End | End | End | End | End | End | End |
| | | | | | | | | |
BlackRock
International Growth
and Income Trust | $58,500 | N/A | $0 | N/A | $6,100 | N/A | $0 | N/A |
1 The nature of the services include assurance and related services reasonably related to the performance of the audit of financial statements not included in Audit Fees.2 The nature of the services include tax compliance, tax advice and tax planning.3 The nature of the services include a review of compliance procedures and attestation thereto.| | (e)(1) Audit Committee Pre-Approval Policies and Procedures: |
| | |
| | The registrant has polices and procedures (the "Policy") for the pre-approval by the registrant's audit committee of Audit, Audit-Related, Tax and Other Services (as each is defined in the Policy) provided by the Fund's independent auditor (the "Independent Auditor") to the registrant and other "Covered Entities" (as defined below). The term of any such pre-approval is 12 months from the date of pre-approval, unless the audit committee specifically provides for a different period. The amount of any such pre-approval is set forth in the appendices to the Policy (the "Service Pre-Approval Documents"). At its first meeting of each calendar year, the audit committee will review and re-approve the Policy and approve or re-approve the Service Pre-Approval Documents for that year, together with any changes deemed necessary or desirable by the audit committee. The audit committee may, from time to time, modify the nature of the services pre-approved, the aggregate level of fees pre-approved or both. |
| | |
| | For the purposes of the Policy, "Covered Services" means (A) all engagements for audit and non-audit services to be provided by the Independent Auditor to the Fund and (B) all engagements for non-audit services related directly to the operations and financial reporting or the Fund to be provided by the Independent Auditor to any Covered Entity, "Covered Entities" means (1) the Advisor or (2) any entity controlling, controlled by or under common control with the Advisor that provides ongoing services to the Fund. |
| | |
| | In the intervals between the scheduled meetings of the audit committee, the audit committee delegates pre-approval authority under this Policy to the Chairman of the audit committee (the "Chairman"). The Chairman shall report any pre-approval decisions under this Policy to the audit committee at its next scheduled meeting. At each scheduled meeting, the audit committee will review with the Independent Auditor the Covered Services pre-approved by the Chairman pursuant to delegated authority, if any, and the fees related thereto. Based on these reviews, the audit committee can modify, at its discretion, the pre-approval originally granted by the Chairman pursuant to delegated authority. This modification can be to the nature of services pre-approved, the aggregate level of fees approved, or both. Pre-approval of Covered Services by the Chairman pursuant to delegated authority is expected to be the exception rather than the rule and the audit committee may modify or withdraw this delegated authority at any time the audit committee determines that it is appropriate to do so. |
| | |
| | Fee levels for all Covered Services to be provided by the Independent Auditor and pre-approved under this Policy will be established annually by the audit committee and set forth in the Service Pre-Approval Documents. Any increase in pre-approved fee levels will require specific pre-approval by the audit committee (or the Chairman pursuant to delegated authority). |
| | |
| | The terms and fees of the annual Audit services engagement for the Fund are subject to the specific pre-approval of the audit committee. The audit committee (or the Chairman pursuant to delegated authority) will approve, if necessary, any changes in terms, conditions or fees resulting from changes in audit scope, Fund structure or other matters. |
| | |
| | In addition to the annual Audit services engagement specifically approved by the audit committee, any other Audit services for the Fund not listed in the Service Pre-Approval Document for the respective period must be specifically pre-approved by the audit committee (or the Chairman pursuant to delegated authority). |
| | |
| | Audit-Related services are assurance and related services that are not required for the audit, but are reasonably related to the performance of the audit or review of the financial statements of the registrant and, to the extent they are Covered Services, the other Covered Entities (as defined in the Joint Audit Committee Charter) or that are traditionally performed by the Independent Auditor. Audit-Related services that are Covered Services and are not listed in the Service Pre-Approval Document for the respective period must be specifically pre-approved by the audit committee (or the Chairman pursuant to delegated authority). |
| | |
| | The audit committee believes that the Independent Auditor can provide Tax services to the Covered Entities such as tax compliance, tax planning and tax advice without impairing the auditor’s independence. However, the audit committee will not permit the retention of the Independent Auditor in connection with a transaction initially recommended by the Independent Auditor, the sole business purpose of which may be tax avoidance and the tax treatment of which may not be supported in the Internal Revenue Code and related regulations. Tax services that are Covered Services and are not listed in the Service Pre-Approval Document for the respective period must be specifically pre-approved by the audit committee (or the Chairman pursuant to delegated authority). |
| | |
| | All Other services that are covered and are not listed in the Service Pre-Approval Document for the respective period must be specifically pre-approved by the audit committee (or the Chairman pursuant to delegated authority). |
| | |
| | Requests or applications to provide Covered Services that require approval by the audit committee (or the Chairman pursuant to delegated authority) must be submitted to the audit committee or the Chairman, as the case may be, by both the Independent Auditor and the Chief Financial Officer of the respective Covered Entity, and must include a joint statement as to whether, in their view, (a) the request or application is consistent with the rules of the Securities and Exchange Commission ("SEC") on auditor independence and (b) the requested service is or is not a non-audit service prohibited by the SEC. A request or application submitted to the Chairman between scheduled meetings of the audit committee should include a discussion as to why approval is being sought prior to the next regularly scheduled meeting of the audit committee. |
| | |
| | (e)(2) None of the services described in each of Items 4(b) through (d) were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. |
| | |
| | (f) Not Applicable |
| | |
| | (g) Affiliates’ Aggregate Non-Audit Fees: |
| | Current Fiscal Year | Previous Fiscal Year |
| Entity Name | End | End |
| | | |
BlackRock International
Growth and Income Trust | $290,600 | N/A |
| | (h) The registrant’s audit committee has considered and determined that the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any non-affiliated sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by the registrant’s investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence. |
| | |
| | Regulation S-X Rule 2-01(c)(7)(ii) – $284,500, 0% |
| | |
| Item 5 – | Audit Committee of Listed Registrants – The following individuals are members of the registrant’s separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)): |
| | |
| | Dr. Andrew F. Brimmer (retired as of December 31, 2006)
Richard E. Cavanagh (not reappointed to Audit Committee as of November 1, 2007)
Kent Dixon
Frank J. Fabozzi
Robert S. Salomon, Jr. (term began effective November 1, 2007)
W. Carl Kester (term began effective November 1, 2007)
James T. Flynn (term began effective November 1, 2007)
Karen P. Robards (term began effective November 1, 2007) |
| | |
| Item 6 – | Schedule of Investments – The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this form. |
| | |
| Item 7 – | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – The registrant has delegated the voting of proxies relating to Fund portfolio securities to its investment adviser, BlackRock Advisors, LLC and its sub-adviser, as applicable. The Proxy Voting Policies and Procedures of the adviser and sub-adviser are attached hereto as Exhibit 99.PROXYPOL. |
| | |
| | Information about how the Fund voted proxies relating to securities held in the Fund’s portfolio during the most recent 12 month period ended June 30 is available without charge (1) at www.blackrock.com and (2) on the Commission’s web site at http://www.sec.gov. |
| | |
| Item 8 – | Portfolio Managers of Closed-End Management Investment Companies – as of October 31, 2007. |
| | |
| | (a)(1) BlackRock International Growth and Income Trust is managed by a team of investment professionals comprised of Thomas P. Callan, CFA, Managing Director at BlackRock, Jean M. Rosenbaum, CFA, Managing Director at BlackRock, Kyle G. McClements, CFA, Director at BlackRock, Michael D. Carey, CFA, Director at BlackRock, Erin Xie, PhD, MBA, Managing Director at BlackRock and Ian Jamieson, CFA, Director at BlackRock. Messrs. Callan, Carey and Jamieson and Misses Rosenbaum and Xie are members of BlackRock’s Global Opportunities equity team. Mr. Callan is responsible for overseeing management of the Fund’s portfolio. Messrs. Callan, Carey and Jamieson and Misses Rosenbaum and Xie are the Fund’s portfolio managers and are responsible for the day-to-day management of the Fund’s portfolio |
| | |
| | and the selection of its investments. Mr. McClements is responsible for implementing the options strategy for the Fund’s portfolio. Messrs. Callan, Carey, Jamieson and McClements and Misses Rosenbaum and Xie have been members of the Fund’s management team since 2007. |
| | |
| | Thomas P. Callan, CFA, Managing Director and senior portfolio manager, is head of BlackRock’s Global Opportunities equity team. He is lead manager for all global small cap portfolios and is chief strategist for all of the team’s portfolios. Mr. Callan has been a portfolio manager with BlackRock since 1998. |
| | |
| | Jean M. Rosenbaum, CFA, Managing Director and portfolio manager, is a member of BlackRock’s Global Opportunities equity team. She is a portfolio manager for the US opportunities portfolios and a strategist for all of the team’s products. Ms. Rosenbaum has been a portfolio manager with BlackRock since 1998. |
| | |
| | Kyle G. McClements, CFA, Director and equity derivatives trader, is a member of the US equity trading group. Prior to joining BlackRock in 2005, Mr. McClements was a Vice President and senior derivatives strategist responsible for equity derivative strategy and trading in the Quantitative Equity Group at State Street Research. Prior to joining State Street Research in 2004, Mr. McClements was a senior trader/analyst at Deutsche Asset Management, responsible for derivatives, equity program, technology and energy sector, and foreign exchange trading. |
| | |
| | Michael D. Carey, CFA, Director and portfolio manager, is a member of BlackRock’s Global Opportunities equity team. He is a portfolio manager for international small cap equity portfolios and a strategist for all of the team’s products. Mr. Carey has been a portfolio manager with BlackRock since 1998. |
| | |
| | Erin Xie, PhD, MBA, Managing Director and portfolio manager, is a member of BlackRock's Global Opportunities team. She is a lead manager of the BlackRock Health Sciences Portfolio. Prior to joining BlackRock in 2005, Ms. Xie was a Senior Vice President and portfolio manager with State Street Research & Management responsible for managing the State Street Health Sciences Fund. Prior to joining State Street Research in 2001, Ms. Xie was a research associate with Sanford Bernstein covering the pharmaceutical industry. |
| | |
| | Ian Jamieson, CFA, Director and and portfolio manager, is a member of BlackRock’s Global Opportunities Team. Mr. Jamieson is responsible for the Trust’s research and investment in the consumer and utilities sectors. Mr. Jamieson is a portfolio manager for global small and mid portfolios and strategist for all of the Global Opportunities Team’s products. He moved to his current role in 2003. Mr. Jamieson was previously a member of BlackRock’s Large Cap Core Equity and Operations Teams. |
| | |
| | (a)(2) As of October 31, 2007: |
| | | (iii) Number of Other Accounts and |
| | (ii) Number of Other Accounts Managed | Assets for Which Advisory Fee is |
| | and Assets by Account Type | Performance-Based |
| | Other | | | Other | | |
| (i) Name of | Registered | Other Pooled | | Registered | Other Pooled | |
| Portfolio | Investment | Investment | Other | Investment | Investment | Other |
| Manager | Companies | Vehicles | Accounts | Companies | Vehicles | Accounts |
| | | | | | | |
Thomas P.
Callan, CFA | 10 | 1 | 0 | 0 | 1 | 0 |
| | $5,655,107,096 | $39,452,988 | $0 | $0 | $39,452,988 | $0 |
Jean M.
Rosenbaum, CFA | 7 | 1 | 0 | 0 | 0 | 0 |
| | $2,344,246,283 | $118,700,473 | $0 | $0 | $0 | $0 |
Kyle G.
McClements, CFA | 5 | 4 | 0 | 0 | 0 | 0 |
| | $3,008,624,848 | $226,556,433 | $0 | $0 | $0 | $0 |
Michael D.
Carey, CFA | 4 | 0 | 4 | 0 | 0 | 1 |
| | $3,167,401,930 | $0 | $942,741,877 | $0 | $0 | $603,673,236 |
| Erin Xie | 6 | 6 | 1 | 0 | 1 | 0 |
| | $1,984,776,961 | $337,780,027 | $51,042,185 | $0 | $39,452,988 | $0 |
| Ian Jamieson, CFA | 0 | 3 | 0 | 0 | 0 | 0 |
| | $0 | $458,085,011 | $0 | $0 | $0 | $0 |
| (iv) | Potential Material Conflicts of Interest |
| | |
| | BlackRock, Inc. and its affiliates (collectively, herein “BlackRock”) has built a professional working environment, firm-wide compliance culture and compliance procedures and systems designed to protect against potential incentives that may favor one account over another. BlackRock has adopted policies and procedures that address the allocation of investment opportunities, execution of portfolio transactions, personal trading by employees and other potential conflicts of interest that are designed to ensure that all client accounts are treated equitably over time. Nevertheless, BlackRock furnishes investment management and advisory services to numerous clients in addition to the Fund, and BlackRock may, consistent with applicable law, make investment recommendations to other clients or accounts (including accounts which are hedge funds or have performance or higher fees paid to BlackRock, or in which portfolio managers have a personal interest in the receipt of such fees), which may be the same as or different from those made to the Fund. In addition, BlackRock, its affiliates and any officer, director, stockholder or employee may or may not have an interest in the securities whose purchase and sale BlackRock recommends to the Fund. BlackRock, or any of its affiliates, or any officer, director, stockholder, employee or any member of their families may take different actions than those recommended to the Fund by BlackRock with respect to the same securities. Moreover, BlackRock may refrain from rendering any advice or services concerning securities of companies of which any of BlackRock’s (or its affiliates’) officers, directors or employees are directors or officers, or companies as to which BlackRock or any of its affiliates or the officers, directors and employees of any of them has any substantial economic interest or possesses material non-public information. Each portfolio manager also may manage accounts whose investment strategies may at times be opposed to the strategy utilized for the Fund. In this connection, it should be noted that certain portfolio managers currently manage certain accounts that |
| | |
| | are subject to performance fees. In addition, certain portfolio managers assist in managing certain hedge funds and may be entitled to receive a portion of any incentive fees earned on such funds and a portion of such incentive fees may be voluntarily or involuntarily deferred. Additional portfolio managers may in the future manage other such accounts or funds and may be entitled to receive incentive fees. |
| | |
| | As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client fairly. When BlackRock purchases or sells securities for more than one account, the trades must be allocated in a manner consistent with its fiduciary duties. BlackRock attempts to allocate investments in a fair and equitable manner among client accounts, with no account receiving preferential treatment. To this end, BlackRock has adopted a policy that is intended to ensure that investment opportunities are allocated fairly and equitably among client accounts over time. This policy also seeks to achieve reasonable efficiency in client transactions and provide BlackRock with sufficient flexibility to allocate investments in a manner that is consistent with the particular investment discipline and client base. |
| | |
| | (a)(3) As of October 31, 2007: |
| | |
| Portfolio Manager Compensation |
| | |
| | The portfolio manager compensation program of BlackRock is critical to BlackRock’s ability to attract and retain the most talented asset management professionals. This program ensures that compensation is aligned with maximizing investment returns and it provides a competitive pay opportunity for competitive performance. |
| | |
| | Compensation Program |
| | |
| | The elements of total compensation for BlackRock portfolio managers are: fixed base salary, annual performance-based cash and stock compensation (cash and stock bonus) and other benefits. BlackRock has balanced these components of pay to provide portfolio managers with a powerful incentive to achieve consistently superior investment performance. By design, portfolio manager compensation levels fluctuate — both up and down — with the relative investment performance of the portfolios that they manage. |
| | |
| | Base Salary |
| | |
| | Under the BlackRock approach, like that of many asset management firms, fixed base salaries represent a relatively small portion of a portfolio manager’s total compensation. This approach serves to enhance the motivational value of the performance-based (and therefore variable) compensation elements of the compensation program. |
| | |
| | Performance-Based Compensation |
| | |
| | BlackRock believes that the best interests of investors are served by recruiting and retaining exceptional asset management talent and managing their compensation within a consistent and disciplined framework that emphasizes pay for performance in the context of an intensely competitive market for talent. To that end, the portfolio manager incentive compensation is based on a formulaic compensation program. |
| | |
| | BlackRock’s formulaic portfolio manager compensation program includes: pre-tax investment performance relative to the appropriate competitors or benchmarks over 1-, 3- and 5-year performance periods and a measure of operational efficiency. If a portfolio manager’s tenure is less than 5 years, performance periods will reflect time in position. Portfolio managers are compensated based on products they manage. For these purposes, the performance of the Fund is compared to the Lipper Closed-end Options Arbitrage/Options Strategies classification and the S&P Citigroup Global Broad Market Index. A smaller discretionary element of portfolio manager compensation may include consideration of: financial results, expense control, profit margins, strategic planning and implementation, quality of client service, market share, corporate reputation, capital allocation, compliance and risk control, leadership, workforce diversity, supervision, technology and innovation. All factors are considered collectively by BlackRock management. |
| | |
| | Cash Bonus |
| | |
| | Performance-based compensation is distributed to portfolio managers in a combination of cash and stock. Typically, the cash bonus, when combined with base salary, represents more than 60% of total compensation for the portfolio managers. |
| | |
| | Stock Bonus |
| | |
| | A portion of the dollar value of the total annual performance-based bonus is paid in restricted shares of stock of BlackRock, Inc. (the “Company”). Paying a portion of annual bonuses in stock puts compensation earned by a portfolio manager for a given year “at risk” based on the Company’s ability to sustain and improve its performance over future periods. The ultimate value of stock bonuses is dependent on future Company stock price performance. As such, the stock bonus aligns each portfolio manager’s financial interests with those of the Company’s shareholders and encourages a balance between short-term goals and long-term strategic objectives. Management strongly believes that providing a significant portion of competitive performance-based compensation in stock is in the best interests of investors and shareholders. This approach ensures that portfolio managers participate as shareholders in both the “downside risk” and “upside opportunity” of the Company’s performance. Portfolio managers, therefore, have a direct incentive to protect the Company’s reputation for integrity. |
| | |
| | Other Benefits |
| | |
| | Portfolio managers are also eligible to participate in broad-based plans offered generally to BlackRock employees, including broad-based retirement, 401(k), health, and other employee benefit plans. For example, BlackRock, Inc. has created a variety of incentive savings plans in which BlackRock employees are eligible to participate, including a 401(k) plan, the BlackRock Retirement Savings Plan (RSP) and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution components of the RSP include a company match equal to 50% of the first 6% of eligible pay contributed to the plan capped at $4,000 per year, and a company retirement contribution equal to 3% of eligible compensation, plus an additional contribution of 2% for any year in which BlackRock has positive net operating income. The RSP offers a range of investment options, including registered investment companies managed by the firm. Company contributions follow the investment direction set by participants for their own contributions or absent, employee investment direction, are invested into a stable value fund. The ESPP allows for investment in BlackRock common stock at a 5% discount on the fair market value of the stock on the purchase |
| | |
| | date. Annual participation in the ESPP is limited to the purchase of 1,000 shares or a dollar value of $25,000. Each portfolio manager is eligible to participate in these plans. |
| | |
| | (a)(4) | Beneficial Ownership of Securities. As of October 31, 2007, none of Messrs. Callan or Jamieson or Misses Rosenbaum or Xie beneficially owned any stock issued by the Fund. As of October 31, 2007, Mr. Carey beneficially owned stock issued by the Fund in the range of $10,001 to $50,000 and Mr. McClements beneficially owned stock issued by the Fund in the range of $1 to $10,000. |
| | |
| Item 9 – | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable due to no such purchases during the period covered by this report. |
| | |
| Item 10 – | Submission of Matters to a Vote of Security Holders – The registrant’s Nominating and Governance Committee will consider nominees to the Board recommended by shareholders when a vacancy becomes available. Shareholders who wish to recommend a nominee should send nominations which include biographical information and set forth the qualifications of the proposed nominee to the registrant’s Secretary. There have been no material changes to these procedures. |
| | |
| Item 11 – | Controls and Procedures |
| | |
| 11(a) – | The registrant’s principal executive and principal financial officers or persons performing similar functions have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities and Exchange Act of 1934, as amended. |
| | |
| 11(b) – | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
| | |
| Item 12 – | Exhibits attached hereto |
| | |
| 12(a)(1) – | Code of Ethics – See Item 2 |
| | |
| 12(a)(2) – | Certifications – Attached hereto |
| | |
| 12(a)(3) – | Not Applicable |
| | |
| 12(b) – | Certifications – Attached hereto |
| | |
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.
| BlackRock International Growth and Income Trust |
| |
| By: | | /s/ Donald C. Burke |
| | | Donald C. Burke, |
| | | Chief Executive Officer of |
| | | BlackRock International Growth and Income Trust |
| |
| Date: December 19, 2007 |
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/ Donald C. Burke |
| | | Donald C. Burke, |
| | | Chief Executive Officer (principal executive officer) of |
| | | BlackRock International Growth and Income Trust |
| |
| Date: December 19, 2007 |
| |
| By: | | /s/ Neal J. Andrews |
| | | Neal J. Andrews, |
| | | Chief Financial Officer (principal financial officer) of |
| | | BlackRock International Growth and Income Trust |
| |
| Date: December 19, 2007 |
