|
|
Notes to Financial Statements (Unaudited) |
1. Organization and Significant Accounting Policies:
BlackRock Equity Dividend Fund (“Equity Dividend”) and BlackRock Natural Resources Trust (“Natural Resources”) (collectively referred to as the “Funds” or individually as a “Fund”) are registered under the Investment Company Act of 1940, as amended (the “1940 Act”). Equity Dividend is registered as a diversified, open-end management investment company. Natural Resources is registered as a non-diversified, open-end management investment company. Equity Dividend and Natural Resources are organized as Massachusetts business trusts. The Funds’ financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), which may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. The Board of Trustees of the Funds are referred to throughout this report as the “Board of Trustees” or the “Board.” Each Fund offers multiple classes of shares. Institutional and Service Shares are sold without a sales charge and only to certain eligible investors. Investor A Shares are generally sold with a front-end sales charge. Investor B, Investor C and Investor C1 Shares may be subject to a contingent deferred sales charge. Class R Shares are sold without a sales charge and only to certain retirement and other similar plans. All classes of shares have identical voting, dividend, liquidation and other rights and the same terms and conditions, except that Service, Investor A, Investor B, Investor C, Investor C1 and Class R Shares bear certain expenses related to the shareholder servicing of such shares, and Investor B, Investor C, Investor C1 and Class R Shares also bear certain expenses related to the distribution of such shares. Investor B Shares automatically convert to Investor A Shares after approximately eight years. Investor B and Investor C1 Shares are only available through exchanges, dividend reinvestment by existing shareholders or for purchase by certain qualified employee benefit plans. Each class has exclusive voting rights with respect to matters relating to its shareholder servicing and distribution expenditures (except that Investor B shareholders may vote on material changes to the Investor A distribution and service plan).
Reorganization: The Board of Equity Dividend and the Board and shareholders of BlackRock Utilities and Telecommunications Fund, Inc. (the “Target Fund”) approved the reorganization of the Target Fund into Equity Dividend pursuant to which Equity Dividend acquired substantially all of the assets and substantially all of the liabilities of the Target Fund in exchange for an equal aggregate value of newly-issued shares of Equity Dividend.
Each shareholder of the Target Fund received shares of Equity Dividend in an amount equal to the aggregate net asset value of such shareholder’s Target Fund shares, as determined at the close of business on September 9, 2011, less the costs of the Target Fund’s reorganization. In connection with the reorganization, Equity Dividend issued newly-created Investor C1 Shares.
The reorganization was accomplished by a tax-free exchange of shares of Equity Dividend in the following amounts and at the following conversion ratios:
| | | | | | | | | | | | | |
Target Fund’s
Share Class | | Target Fund’s
Shares
Prior to
Reorganization | | Conversion
Ratio | | Equity
Dividend’s
Share Class | | Shares of
Equity
Dividend | |
Institutional | | | 1,070,842 | | | 0.6978647 | | | Institutional | | | 747,303 | |
Investor A | | | 5,458,885 | | | 0.7002220 | | | Investor A | | | 3,822,431 | |
Investor B | | | 58,101 | | | 0.6913849 | | | Investor B | | | 40,170 | |
Investor B1 | | | 67,882 | | | 0.7014217 | | | Investor A | | | 47,614 | |
Investor C | | | 585,806 | | | 0.6975252 | | | Investor C | | | 408,614 | |
Investor C1 | | | 592,378 | | | 0.7045611 | | | Investor C1 | | | 417,366 | |
The Target Fund’s net assets and composition of net assets on September 9, 2011, the date of the merger, were as follows:
| | | | | | | | | | | |
| Net Assets | | | Paid-in
Capital | | | Accumulated Net
Realized Loss | | | Net Unrealized
Appreciation | |
$ | 91,151,057 | | $ | 67,224,663 | | $ | (2,331,754 | ) | $ | 26,258,148 | |
For financial reporting purposes, assets received and shares issued by Equity Dividend were recorded at fair value. However, the cost basis of the investments received from the Target Fund was carried forward to align ongoing reporting of Equity Dividend’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.
The aggregate net assets of Equity Dividend immediately after the acquisition amounted to $14,003,225,509. The Target Fund’s fair value and cost of investments prior to the reorganization were $87,340,910 and $61,056,386, respectively.
The purpose of this transaction was to combine two funds managed by BlackRock Advisors, LLC (the “Manager”) with the same or substantially similar (but not identical) investment objectives, investment policies, strategies, risks and restrictions. The reorganization was a tax-free event and was effective on September 12, 2011.
| | | |
32
|
SEMI-ANNUAL REPORT
|
JANUARY 31, 2012
| |
|
|
Notes to Financial Statements (continued) |
Assuming the acquisition had been completed on August 1, 2011, the beginning of the fiscal reporting period of Equity Dividend, the pro forma results of operations for the six months ended January 31, 2012, are as follows:
| |
• | Net investment income: $175,794,958 |
| |
• | Net realized and change in unrealized gain/loss on investments: $598,314,424 |
| |
• | Net increase in net assets resulting from operations: $774,109,382 |
Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Target Fund that have been included in Equity Dividend’s Statements of Operations since September 12, 2011. Reorganization costs incurred by Equity Dividend in connection with the reorganization were expensed by Equity Dividend. The Manager reimbursed Equity Dividend $128,063, which is included in fees waived and/or reimbursed by advisor in the Statements of Operations.
The following is a summary of significant accounting policies followed by the Funds:
Valuation: US GAAP defines fair value as the price the Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Funds fair value their financial instruments at market value using independent dealers or pricing services under policies approved by the Board. Equity investments traded on a recognized securities exchange or the NASDAQ Global Market System (“NASDAQ”) are valued at the last reported sale price that day or the NASDAQ official closing price, if applicable. For equity investments traded on more than one exchange, the last reported sale price on the exchange where the stock is primarily traded is used. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last available bid (long positions) or ask (short positions) price. If no bid or ask price is available, the prior day’s price will be used, unless it is determined that such prior day’s price no longer reflects the fair value of the security. Financial futures contracts traded on exchanges are valued at their last sale price. Investments in open-end registered investment companies are valued at NAV each business day. Short-term securities with remaining maturities of 60 days or less may be valued at amortized cost, which approximates fair value.
The Funds value their investments in BlackRock Liquidity Series, LLC Money Market Series (the “Money Market Series”) at fair value, which is ordinarily based upon their pro rata ownership in the underlying Fund’s net assets. The Money Market Series seeks current income consistent with maintaining liquidity and preserving capital. Although the Money Market Series is not registered under the 1940 Act, its investments will follow the parameters of investments by a money market fund that is subject to Rule 2a-7 under the 1940 Act. The Funds may withdraw up to 25% of their investment daily, although the manager of the Money Market Series, in its sole discretion, may permit an investor to withdraw more than 25% on any one day.
Securities and other assets and liabilities denominated in foreign currencies are translated into US dollars using exchange rates determined as of the close of business on the New York Stock Exchange (“NYSE”). Foreign currency exchange contracts are valued at the mean between the bid and ask prices and are determined as of the close of business on the NYSE. Interpolated values are derived when the settlement date of the contract is an interim date for which quotations are not available.
In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the market value of such investment or if a price is not available, the investment will be valued in accordance with a policy approved by the Board as reflecting fair value (“Fair Value Assets”). When determining the price for Fair Value Assets, the investment advisor and/or the sub-advisor seeks to determine the price that each Fund 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. The pricing of all Fair Value Assets is subsequently reported to the Board or a committee thereof.
Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of business on the NYSE. Occasionally, events affecting the values of such instruments may occur between the foreign market close and the close of business on the NYSE that may not be reflected in the computation of each Fund’s net assets. If events (for example, a company announcement, market volatility or a natural disaster) occur during such periods that are expected to materially affect the value of such instruments, those instruments may be Fair Value Assets and be valued at their fair value, as determined in good faith by the investment advisor using a pricing service and/or policies approved by the Board. Each business day, the Funds use a pricing service to assist with the valuation of certain foreign exchange-traded equity securities and foreign exchange-traded and OTC options (the “Systematic Fair Value Price”). Using current market factors, the Systematic Fair Value Price is designed to value such foreign securities and foreign options at fair value as of the close of business on the NYSE, which follows the close of the local markets.
| | | |
|
SEMI-ANNUAL REPORT
|
JANUARY 31, 2012
|
33
|
|
|
Notes to Financial Statements (continued) |
Foreign Currency Transactions: The Funds’ books and records are maintained in US dollars. Purchases and sales of investment securities are recorded at the rates of exchange prevailing on the respective date of such transactions. Generally, when the US dollar rises in value against a foreign currency, the Funds’ investments denominated in that currency will lose value because its currency is worth fewer US dollars; the opposite effect occurs if the US dollar falls in relative value.
The Funds do not isolate the portion of the results of operations arising as a result of changes in the foreign exchange rates from the changes in the market prices of investments held or sold for financial reporting purposes. Accordingly, the effects of changes in foreign currency exchange rates on investments are not segregated on the Statements of Operations from the effects of changes in market prices of those investments but are included as a component of net realized and unrealized gain (loss) from investments. The Funds report realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are treated as ordinary income for federal income tax purposes.
Preferred Stock: The Funds may invest in preferred stocks. Preferred stock has a preference over common stock in liquidation (and generally in receiving dividends as well) but is subordinated to the liabilities of the issuer in all respects. As a general rule, the market value of preferred stock with a fixed dividend rate and no conversion element varies inversely with interest rates and perceived credit risk, while the market price of convertible preferred stock generally also reflects some element of conversion value. Because preferred stock is junior to debt securities and other obligations of the issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a preferred stock than in a more senior debt security with similar stated yield characteristics. Unlike interest payments on debt securities, preferred stock dividends are payable only if declared by the issuer’s board of directors. Preferred stock also may be subject to optional or mandatory redemption provisions.
Segregation and Collateralization: In cases in which the 1940 Act and the interpretive positions of the Securities and Exchange Commission (“SEC”) require that the Funds either deliver collateral or segregate assets in connection with certain investments (e.g., financial futures contracts), the Funds will, consistent with SEC rules and/or certain interpretive letters issued by the SEC, segregate collateral or designate on their 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. Furthermore, based on requirements and agreements with certain exchanges and third party broker-dealers, each party to such transactions has requirements to deliver/deposit securities as collateral for certain investments.
Investment Transactions and Investment Income: For financial reporting purposes, investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on investment transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend dates. Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when the Funds are informed of the ex-dividend date. Under the applicable foreign tax laws, a withholding tax at various rates may be imposed on capital gains, dividends and interest. Upon notification from issuers, some of the dividend income received from a real estate investment trust may be redesignated as a reduction of cost of the related investment and/or realized gain. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized on the accrual basis. Income and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.
Dividends and Distributions: Dividends and distributions paid by the Funds are recorded on the ex-dividend dates. 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 return of capital. The amount and timing of dividends and distributions are determined in accordance with federal income tax regulations, which may differ from US GAAP.
Securities Lending: The Funds may lend securities to approved borrowers, such as banks, brokers and other financial institutions. The borrower pledges cash, securities issued or guaranteed by the US government or irrevocable letters of credit issued by a bank 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 Funds and any additional required collateral is delivered to the Funds on the next business day. Securities lending income, as disclosed in the Statements of Operations, represents the income earned from the investment of the cash collateral, net of rebates paid to, or fees paid by, borrowers and less the fees paid to the securities lending agent. During the term of the loan, the Funds earn dividend or interest income on the securities loaned but do not receive interest income on the securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions. In the event that the borrower defaults on its obligation to return borrowed securities because of insolvency or for any other reason, the Funds could experience delays and costs in gaining access to the collateral. The Funds also could suffer a loss if the value of an investment purchased with cash collateral falls below the market value of loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received. During the six months ended January 31, 2012, any securities on loan were collateralized by cash.
| | | |
34
|
SEMI-ANNUAL REPORT
|
JANUARY 31, 2012
| |
|
|
Notes to Financial Statements (continued) |
Income Taxes: It is each Fund’s policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income tax provision is required.
Each Fund files US federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Funds’ US federal tax returns remains open for each of the four years ended July 31, 2011. The statutes of limitations on each Fund’s state and local tax returns may remain open for an additional year depending upon the jurisdiction. Management does not believe there are any uncertain tax positions that require recognition of a tax liability.
Recent Accounting Standards: In May 2011, the Financial Accounting Standards Board (the “FASB”) issued amended guidance to improve disclosure about fair value measurements which will require the following disclosures for fair value measurements categorized as Level 3: quantitative information about the unobservable inputs and assumptions used in the fair value measurement, a description of the valuation policies and procedures and a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs. In addition, the amounts and reasons for all transfers in and out of Level 1 and Level 2 will be required to be disclosed. The amended guidance is effective for financial statements for fiscal years beginning after December 15, 2011, and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Funds’ financial statements disclosures.
In December 2011, the FASB issued guidance that will expand current disclosure requirements on the offsetting of certain assets and liabilities. The new disclosures will be required for investments and derivative financial instruments subject to master netting or similar agreements which are eligible for offset in the Statements of Assets and Liabilities and will require an entity to disclose both gross and net information about such investments and transactions in the financial statements. The guidance is effective for financial statements with fiscal years beginning on or after January 1, 2013, and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Funds’ financial statement disclosures.
Other: Expenses directly related to a Fund or its classes are charged to that Fund or class. Other operating expenses shared by several funds are pro rated among those funds on the basis of relative net assets or other appropriate methods. Expenses directly related to the Fund and other shared expenses pro rated to the Fund are allocated daily to each class based on its relative net assets or other appropriate methods.
The Funds have an arrangement with the custodian whereby fees may be reduced by credits earned on uninvested cash balances, which, if applicable, are shown as fees paid indirectly in the Statements of Operations. The custodian imposes fees on overdrawn cash balances, which can be offset by accumulated credits earned or may result in additional custody charges.
2. Derivative Financial Instruments:
The Funds engage in various portfolio investment strategies using derivative contracts both to increase the returns of the Funds and to economically hedge, or protect, their exposure to certain risks such as equity risk or foreign currency exchange rate risk. These contracts may be transacted on an exchange or OTC.
Losses may arise if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument or if the counterparty does not perform under the contract. The Funds’ maximum risk of loss from counterparty credit risk on OTC derivatives is generally the aggregate unrealized gain netted against any collateral pledged by/posted to the counterparty. Counterparty risk related to exchange-traded financial futures contracts and options is deemed to be minimal due to the protection against defaults provided by the exchange on which these contracts trade.
The Funds may mitigate counterparty risk by procuring collateral and through netting provisions included within an International Swaps and Derivatives Association, Inc. master agreement (“ISDA Master Agreement”) implemented between a Fund and each of its respective counterparties. An ISDA Master Agreement allows each Fund to offset with each separate counterparty certain derivative financial instrument’s payables and/or receivables with collateral held. The amount of collateral moved to/from applicable counterparties is generally based upon minimum transfer amounts of up to $500,000. To the extent amounts due to the Funds from their counterparties are not fully collateralized contractually or otherwise, the Funds bear the risk of loss from counterparty non-performance. See Note 1 “Segregation and Collateralization” for information with respect to collateral practices. In addition, the Funds manage counterparty risk by entering into agreements only with counterparties that it believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.
Certain ISDA Master Agreements allow counterparties to OTC derivatives to terminate derivative contracts prior to maturity in the event the Funds’ net assets decline by a stated percentage or the Funds fail to meet the terms of its ISDA Master Agreements, which would cause the Funds to accelerate payment of any net liability owed to the counterparty.
| | | |
|
SEMI-ANNUAL REPORT
|
JANUARY 31, 2012
|
35
|
|
|
Notes to Financial Statements (continued) |
Financial Futures Contracts: The Funds purchase or sell financial futures contracts and options on financial futures contracts to gain exposure to, or economically hedge against, changes in the value of equity securities (equity risk). Financial futures contracts are agreements between the Funds and counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and at a specified date. Depending on the terms of the particular contract, futures contracts are settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date. Pursuant to the contract, the Funds agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as margin variation and are recorded by the Funds as unrealized appreciation or depreciation. When the contract is closed, the Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of financial futures contracts involves the risk of an imperfect correlation in the movements in the price of financial futures contracts, interest rates and the underlying assets.
Foreign Currency Exchange Contracts: The Funds enter into foreign currency exchange contracts as an economic hedge against either specific transactions or portfolio instruments or to obtain exposure to foreign currencies (foreign currency exchange rate risk). A foreign currency exchange contract is an agreement between two parties to buy and sell a currency at a set exchange rate on a future date. Foreign currency exchange contracts, when used by the Funds, help to manage the overall exposure to the currencies, in which some of the investments held by the Funds are denominated. The contract is marked-to-market daily and the change in market value is recorded by the Funds as an unrealized gain or loss. When the contract is closed, the Funds record a realized gain or loss equal to the difference between the value at the time it was opened and the value at the time it was closed. The use of foreign currency exchange contracts involves the risk that the value of a foreign currency exchange contract changes unfavorably due to movements in the value of the referenced foreign currencies and the risk that a counterparty to the contract does not perform its obligations under the agreement.
| | | | | | | | | | |
Derivative Financial Instruments Categorized by Risk Exposure: | | | | | | |
| | | | | | | | | | |
Fair Values of Derivative Financial Instruments as of January 31, 2012 | |
| | Liability Derivatives | |
| | | | | Equity
Dividend | | Natural
Resources | |
| | Statements of
Assets and
Liabilities Location | | Value | |
Foreign currency
exchange contracts | | | Unrealized depreciation on foreign currency exchange contracts | | $ | (4,456 | ) | $ | (10,331 | ) |
| | | | | | | |
The Effect of Derivative Financial Instruments in the Statements of Operations Six Months Ended January 31, 2012 |
| | Net Realized Gain (Loss) From | |
| | Equity
Dividend | | Natural
Resources | |
Foreign currency exchange contracts | | $ | (330,828 | ) | $ | 17,352 | |
| | | | | | | |
| | Net Change in Unrealized
Appreciation/Depreciation on | |
| | Equity
Dividend | | Natural
Resources | |
Foreign currency exchange contracts | | $ | (68,188 | ) | $ | (10,331 | ) |
For the six months ended January 31, 2012 the average quarterly balances of outstanding derivative financial instruments were as follows:
| | | | | | | |
| | Equity
Dividend | | Natural
Resources | |
Foreign currency exchange contracts: | | | | | | | |
Average number of contracts — US dollars purchased | | | 2 | | | 1 | |
Average number of contracts — US dollars sold | | | — | | | 1 | |
Average US dollar amounts purchased | | $ | 1,418,438 | | $ | 1,491 | |
Average US dollar amounts sold | | | — | | $ | 894,261 | |
| | | |
36
|
SEMI-ANNUAL REPORT
|
JANUARY 31, 2012
| |
|
|
Notes to Financial Statements (continued) |
3. Investment Advisory Agreement and Other Transactions with Affiliates:
The PNC Financial Services Group, Inc. (“PNC”) and Barclays Bank PLC (“Barclays”) are the largest stockholders of BlackRock, Inc. (“BlackRock”). Due to the ownership structure, PNC is an affiliate for 1940 Act purposes, but Barclays is not.
Each Fund entered into an Investment Advisory Agreement with the Manager, the Funds’ investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory and administration services. The Manager is responsible for the management of each Fund’s portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of each Fund. For such services, Equity Dividend and Natural Resources pay the Manager a monthly fee based on a percentage of each Fund’s average daily net assets at the following annual rates:
| | | | |
Equity Dividend | | | | |
Average Daily Net Assets | | |
Investment
Advisory Fee
| |
First $8 billion | | | 0.60% | |
$8 billion – $10 billion | | | 0.56% | |
$10 billion – $12 billion | | | 0.54% | |
$12 billion – $17 billion | | | 0.52% | |
Greater than $17 billion | | | 0.51% | |
| | | | |
Natural Resources | | | | |
Average Daily Net Assets | | |
Investment
Advisory Fee
| |
First $1 billion | | | 0.60% | |
$1 billion – $3billion | | | 0.56% | |
$3 billion – $5 billion | | | 0.54% | |
$5 billion – $10 billion | | | 0.52% | |
Greater than $10 billion | | | 0.51% | |
For Equity Dividend, prior to November 30, 2011, the Manager voluntarily agreed to waive and/or reimburse fees and expenses (excluding interest expense, dividend expense, acquired fund fees and expenses and certain other fund expenses) in order to limit expenses to 0.90% for Institutional Shares, 1.15% for Service and Investor A Shares, 1.90% for Investor B Shares and Investor C Shares and 1.40% for Class R Shares of average daily net assets. Effective December 1, 2011, the Manager discontinued this voluntary waiver.
The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Fund pays to the Manager indirectly through its investment in affiliated money market funds. However, the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid in connection with each Fund’s investment in other affiliated investment companies, if any. These amounts are included in fees waived and/or reimbursed by advisor in the Statements of Operations. For the six months ended January 31, 2012, the amounts waived were as follows:
| | | | |
Equity Dividend | | $ | 357,851 | |
Natural Resources | | $ | 2,798 | |
The Manager entered into a sub-advisory agreement with BlackRock Investment Management, LLC (“BIM”), an affiliate of the Manager. The Manager pays BIM for services it provides, a monthly fee that is a percentage of the investment advisory fees paid by each Fund to the Manager.
For the six months ended January 31, 2012, each Fund reimbursed the Manager for certain accounting services, which is included in accounting services in the Statements of Operations. The reimbursements were as follows:
| | | | |
Equity Dividend | | $ | 67,174 | |
Natural Resources | | $ | 3,501 | |
The Funds entered into a Distribution Agreement and Distribution and Service Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of the Manager. Pursuant to the Distribution and Service Plan and in accordance with Rule 12b-1 under the 1940 Act, each Fund pay BRIL ongoing service and distribution fees. The fees are accrued daily and paid monthly at annual rates based upon the average daily net assets of the shares of each Funds, as follows:
| | | | | | | |
| | Service Fees | |
| | | Equity
Dividend | | | Natural
Resources | |
Service | | | 0.25% | | | — | |
Investor A | | | 0.25% | | | 0.25% | |
Investor B | | | 0.25% | | | 0.25% | |
Investor C | | | 0.25% | | | 0.25% | |
Investor C1 | | | 0.25% | | | — | |
Class R | | | 0.25% | | | — | |
| | | | | | | |
| | Distribution Fees | |
| | | Equity
Dividend | | | Natural
Resources | |
Investor B | | | 0.75% | | | 0.75% | |
Investor C | | | 0.75% | | | 0.75% | |
Investor C1 | | | 0.55% | | | — | |
Class R | | | 0.25% | | | — | |
| | | |
| | | |
|
| SEMI-ANNUAL REPORT | JANUARY 31, 2012 | 37 |
|
|
|
Notes to Financial Statements (continued) |
Pursuant to sub-agreements with BRIL, broker-dealers and BRIL provide shareholder servicing and distribution services to each Fund. The ongoing service and/or distribution fee compensates BRIL and each broker-dealer for providing shareholder servicing and/or distribution related services to Service, Investor A, Investor B, Investor C, Investor C1 and Class R shareholders.
For the six months ended January 31, 2012, affiliates earned underwriting discounts, direct commissions and dealer concessions on sales of the Funds’ Investor A Shares as follows:
| | | | |
Equity Dividend | | $ | 367,507 | |
Natural Resources | | $ | 7,732 | |
For the six months ended January 31, 2012, affiliates received the following contingent deferred sales charges related to transactions in Investor B and Investor C shares:
| | | | | | | |
| | Investor B | | Investor C | |
Equity Dividend | | $ | 44,512 | | $ | 185,733 | |
Natural Resources | | $ | 9,691 | | $ | 10,946 | |
Furthermore, affiliates received contingent deferred sales charges relating to transactions subject to front-end sales charge waivers as follows:
| | | | |
| | Investor A | |
Equity Dividend | | $ | 21,872 | |
Natural Resources | | $ | 77 | |
The Manager maintains a call center, which is responsible for providing certain shareholder services to the Funds, such as responding to shareholder inquiries and processing transactions based upon instructions from shareholders with respect to the subscription and redemption of Fund shares. For the six months ended January 31, 2012, the Funds reimbursed the Manager the following amounts for costs incurred in running the call center, which are included in transfer agent — class specific in the Statements of Operations:
| | | | | | | |
| | Equity
Dividend | | Natural
Resources | |
Institutional | | $ | 14,052 | | $ | 719 | |
Service | | $ | 342 | | | — | |
Investor A | | $ | 53,576 | | $ | 5,233 | |
Investor B | | $ | 1,146 | | $ | 380 | |
Investor C | | $ | 17,442 | | $ | 2,130 | |
Investor C1 | | $ | 119 | | | — | |
Class R | | $ | 3,318 | | | — | |
The Funds received an exemptive order from the SEC permitting them, among other things, to pay an affiliated securities lending agent a fee based on a share of the income derived from the securities lending activities and have retained BIM as the securities lending agent. BIM may, on behalf of the Funds, invest cash collateral received by the Funds 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. As securities lending agent, BIM is responsible for all transaction fees and all other operational costs relating to securities lending activities, other than extraordinary expenses. BIM does not receive any fees for managing the cash collateral. The market value of securities on loan and the value of the related collateral, if applicable, are shown in the Statements of Assets and Liabilities as securities loaned at value and collateral on securities loaned at value, respectively. The cash collateral invested by BIM is disclosed in the Schedules of Investments, if any. Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of rebates paid to, or fees paid by, borrowers of securities. The Funds retain 65% of securities lending income and pay a fee to BIM equal to 35% of such income. The share of income earned by the Funds on such investments is shown as securities lending — affiliated in the Statements of Operations. For the six months ended January 31, 2012, BIM received securities lending agent fees related to securities lending activities as follows:
Certain officers and/or trustees of the Funds are officers and/or directors of BlackRock or its affiliates. The Funds reimburse the Manager for compensation paid to the Funds’ Chief Compliance Officer.
4. Investments:
Purchases and sales of investments excluding short-term securities for the six months ended January 31, 2012 were as follows:
| | | | | | | |
| | | | | | | |
| | Purchases | | Sales | |
Equity Dividend | | $ | 2,869,639,620 | | $ | 76,417,147 | |
Natural Resources | | $ | 8,942,273 | | $ | 30,699,754 | |
| | | |
| | | |
38
|
SEMI-ANNUAL REPORT
|
JANUARY 31, 2012
| |
|
|
|
Notes to Financial Statements (continued) |
5. Income Tax Information:
As of July 31, 2011, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:
| | | | | | | |
| | | | | | | |
Expires July 31, | | | Equity
Dividend | | | Natural
Resources | |
2016 | | $ | 5,748,100 | | | — | |
2017 | | | 55,141,466 | | $ | 167,976 | |
2018 | | | 243,453,541 | | | 6,882,828 | |
2019 | | | 28,330,637 | | | — | |
Total | | $ | 332,673,744 | | $ | 7,050,804 | |
Under the Regulated Investment Company Modernization Act of 2010, capital losses incurred by the Funds after July 31, 2011 will not be subject to expiration. In addition, any such losses must be utilized prior to the losses incurred in pre-enactment taxable years.
As of January 31, 2012, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:
| | | | | | | |
| | | | | | | |
| | | Equity
Dividend | | | Natural
Resources | |
Tax cost | | $ | 16,313,565,701 | | $ | 307,983,091 | |
Gross unrealized appreciation | | $ | 2,522,342,433 | | $ | 270,288,439 | |
Gross unrealized depreciation | | | (242,047,432 | ) | | (11,040,486 | ) |
Net unrealized appreciation | | $ | 2,280,295,001 | | $ | 259,247,953 | |
6. Borrowings:
The Funds, along with certain other funds managed by the Manager and its affiliates, is a party to a $500 million credit agreement with a group of lenders. The Funds may borrow under the credit agreement to fund shareholder redemptions. Effective November 2010 to November 2011, the credit agreement had the following terms: a commitment fee of 0.08% per annum based on each Fund’s pro rata share of the unused portion of the credit agreement and interest at a rate equal to the higher of (a) the one-month LIBOR plus 1.00% per annum or (b) the Fed Funds rate plus 1.00% per annum on amounts borrowed. In addition, the Funds paid administration and arrangement fees which were allocated to the Funds based on their net assets as of October 31, 2010. The credit agreement, which expired in November 2011, was renewed until November 2012. Effective November 2011 to November 2012, the credit agreement has the following terms: a commitment fee of 0.065% per annum based on the Funds’ pro rata share of the unused portion of the credit agreement and interest at a rate equal to the higher of (a) the one-month LIBOR plus 0.80% per annum or (b) the Fed Funds rate plus 0.80% per annum on amounts borrowed. In addition, the Funds paid administration and arrangement fees which were allocated to the Funds based on their net assets as of October 31, 2011. The Funds did not borrow under the credit agreement during the six months ended January 31, 2012.
7. Concentration, Market and Credit Risk:
In the normal course of business, the Funds invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations (issuer credit risk). The value of securities held by the Funds may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Funds; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to issuer credit risk, the Funds may be exposed to counterparty credit risk, or the risk that an entity with which the Funds have unsettled or open transactions may fail to or be unable to perform on its commitments. The Funds manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Funds’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Funds’ Statements of Assets and Liabilities, less any collateral held by the Funds.
As of January 31, 2012, Natural Resources invested a significant portion of its assets in securities in the energy sector. Changes in economic conditions affecting the energy sector would have a greater impact on Natural Resources and could affect the value, income and/or liquidity of positions in such securities.
| | | |
| | | |
|
SEMI-ANNUAL REPORT
|
JANUARY 31, 2012
|
39
|
|
|
Notes to Financial Statements (continued) |
8. Capital Share Transactions:
Transactions in capital shares for each class were as follows:
| | | | | | | | | | | | | | |
| | Six Months Ended
January 31, 2012 | | | Year Ended
July 31, 2011 | |
Equity Dividend | | Shares | | Amount | | | Shares | | Amount | |
Institutional | | | | | | | | | | | | | | |
Shares sold | | | 182,682,741 | | $ | 3,196,162,433 | | | | 190,098,990 | | $ | 3,352,213,205 | |
Shares issued to shareholders in reinvestment of dividends | | | 4,535,823 | | | 79,770,645 | | | | 5,217,566 | | | 93,177,134 | |
Shares issued resulting from reorganization | | | 747,303 | | | 12,486,978 | | | | — | | | — | |
Shares redeemed | | | (49,369,793 | ) | | (865,705,254 | ) | | | (53,615,894 | ) | | (952,917,474 | ) |
Net increase | | | 138,596,074 | | $ | 2,422,714,802 | | | | 141,700,662 | | $ | 2,492,472,865 | |
| | | | | | | | | | | | | | |
Service | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Shares sold | | | 4,922,205 | | $ | 83,532,527 | | | | 1,997,221 | | $ | 35,850,890 | |
Shares issued to shareholders in reinvestment of dividends | | | 85,627 | | | 1,501,764 | | | | 52,796 | | | 943,292 | |
Shares redeemed | | | (723,790 | ) | | (12,825,990 | ) | | | (731,394 | ) | | (12,634,873 | ) |
Net increase | | | 4,284,042 | | $ | 72,208,301 | | | | 1,318,623 | | $ | 24,159,309 | |
| | | | | | | | | | | | | | |
Investor A | | | | | | | | | | | | | | |
Shares sold and automatic conversion of shares | | | 105,129,920 | | $ | 1,846,619,018 | | | | 144,697,865 | | $ | 2,557,334,408 | |
Shares issued to shareholders in reinvestment of dividends | | | 3,724,281 | | | 65,395,128 | | | | 5,279,423 | | | 93,864,222 | |
Shares issued resulting from reorganization | | | 3,870,045 | | | 64,513,650 | | | | — | | | — | |
Shares redeemed | | | (57,478,050 | ) | | (1,017,718,567 | ) | | | (86,594,753 | ) | | (1,486,958,248 | ) |
Net increase | | | 55,246,196 | | $ | 958,809,229 | | | | 63,382,535 | | $ | 1,164,240,382 | |
| | | | | | | | | | | | | | |
Investor B | | | | | | | | | | | | | | |
Shares sold | | | 208,134 | | $ | 3,693,110 | | | | 342,500 | | $ | 6,016,173 | |
Shares issued to shareholders in reinvestment of dividends | | | 16,400 | | | 290,329 | | | | 33,046 | | | 582,796 | |
Shares issued resulting from reorganization | | | 40,170 | | | 673,397 | | | | — | | | — | |
Shares redeemed | | | (496,599 | ) | | (8,765,445 | ) | | | (1,025,035 | ) | | (18,111,830 | ) |
Net decrease | | | (231,895 | ) | $ | (4,108,609 | ) | | | (649,489 | ) | $ | (11,512,862 | ) |
| | | | | | | | | | | | | | |
Investor C | | | | | | | | | | | | | | |
Shares sold | | | 23,095,845 | | $ | 398,539,898 | | | | 34,780,983 | | $ | 603,990,372 | |
Shares issued to shareholders in reinvestment of dividends | | | 632,246 | | | 10,883,212 | | | | 872,797 | | | 15,160,970 | |
Shares issued resulting from reorganization | | | 408,614 | | | 6,667,115 | | | | — | | | — | |
Shares redeemed | | | (8,171,470 | ) | | (139,493,129 | ) | | | (12,980,160 | ) | | (224,281,954 | ) |
Net increase | | | 15,965,235 | | $ | 276,597,096 | | | | 22,673,619 | | $ | 394,869,389 | |
| | |
| | |
40 | SEMI-ANNUAL REPORT | JANUARY 31, 2012 |
|
|
Notes to Financial Statements (concluded) |
| | | | | | | | | | | | | | | |
| | Period September 12, 20111
to January 31, 2012 | | | | | | | | |
Equity Dividend (concluded) | | Shares | | | Amount | | | | | | | | |
Investor C1 | | | | | | | | | | | | | | | |
Shares sold | | | 7,206 | | | $ | 125,664 | | | | | | | | |
Shares issued to shareholders in reinvestment of dividends | | | 3,235 | | | | 55,456 | | | | | | | | |
Shares issued resulting from reorganization | | | 417,366 | | | | 6,809,917 | | | | | | | | |
Shares redeemed | | | (32,136 | ) | | | (558,207 | ) | | | | | | | |
Net increase | | | 395,671 | | | $ | 6,432,830 | | | | | | | | |
| |
1 | Commencement of operations. |
| | | | | | | | | | | | | | |
| | Six Months Ended
January 31, 2012 | | | Year Ended
July 31, 2011 | |
Class R | | | | | | | | | | | | | | |
Shares sold | | | 8,516,281 | | $ | 151,077,484 | | | | 15,592,519 | | $ | 275,450,266 | |
Shares issued to shareholders in reinvestment of dividends | | | 333,546 | | | 5,886,711 | | | | 509,917 | | | 9,080,099 | |
Shares redeemed | | | (4,271,529 | ) | | (74,880,995 | ) | | | (8,051,307 | ) | | (143,867,364 | ) |
Net increase | | | 10,131,463 | | $ | 82,083,200 | | | | 8,051,130 | | $ | 140,663,001 | |
| | | | | | | | | | | | | | |
Natural Resources | | | | | | | | | | | | | | |
Institutional | | | | | | | | | | | | | | |
Shares sold | | | 331,319 | | $ | 20,140,451 | | | | 1,056,418 | | $ | 69,909,561 | |
Shares issued to shareholders in reinvestment of dividends | | | 7,266 | | | 438,880 | | | | — | | | — | |
Shares redeemed | | | (453,329 | ) | | (25,733,495 | ) | | | (608,111 | ) | | (39,559,318 | ) |
Net increase (decrease) | | | (114,744 | ) | $ | (5,154,164 | ) | | | 448,307 | | $ | 30,350,243 | |
| | | | | | | | | | | | | | |
Investor A | | | | | | | | | | | | | | |
Shares sold and automatic conversion of shares | | | 633,198 | | $ | 37,021,900 | | | | 1,748,081 | | $ | 112,358,048 | |
Shares issued to shareholders in reinvestment of dividends | | | 14,702 | | | 866,290 | | | | — | | | — | |
Shares redeemed | | | (1,067,435 | ) | | (61,915,699 | ) | | | (1,645,344 | ) | | (103,331,468 | ) |
Net increase (decrease) | | | (419,535 | ) | $ | (24,027,509 | ) | | | 102,737 | | $ | 9,026,580 | |
| | | | | | | | | | | | | | |
Investor B | | | | | | | | | | | | | | |
Shares sold | | | 2,801 | | $ | 147,689 | | | | 12,546 | | $ | 723,352 | |
Shares redeemed and automatic conversion of shares | | | (68,889 | ) | | (3,664,814 | ) | | | (104,481 | ) | | (5,925,590 | ) |
Net decrease | | | (66,088 | ) | $ | (3,517,125 | ) | | | (91,935 | ) | $ | (5,202,238 | ) |
| | | | | | | | | | | | | | |
Investor C | | | | | | | | | | | | | | |
Shares sold | | | 135,525 | | $ | 7,076,425 | | | | 602,739 | | $ | 34,957,910 | |
Shares redeemed | | | (327,563 | ) | | (16,980,202 | ) | | | (511,176 | ) | | (28,939,155 | ) |
Net increase (decrease) | | | (192,038 | ) | $ | (9,903,777 | ) | | | 91,563 | | $ | 6,018,755 | |
9. Subsequent Events:
Management has evaluated the impact of all subsequent events on each Fund through the date the financial statements were issued and has determined that there were no subsequent events requiring adjustment or additional disclosure in the financial statements.
| | | |
| | | |
| SEMI-ANNUAL REPORT | JANUARY 31, 2012 | 41 |
|
Robert M. Hernandez, Chairman of the Board and Trustee |
Fred G. Weiss, Vice Chairman of the Board and Trustee |
Paul L. Audet, Fund President1 and Trustee |
James H. Bodurtha, Trustee |
Bruce R. Bond, Trustee |
Donald W. Burton, Trustee |
Honorable Stuart E. Eizenstat, Trustee |
Laurence D. Fink, Trustee |
Kenneth A. Froot, Trustee |
Henry Gabbay, Trustee |
John F. O’Brien, Trustee |
Roberta Cooper Ramo, Trustee |
David H. Walsh, Trustee |
John M. Perlowski, Fund President2 and Chief Executive Officer |
Brendan Kyne, Vice President |
Neal Andrews, Chief Financial Officer |
Jay Fife, Treasurer |
Brian Kindelan, Chief Compliance Officer and Anti-Money Laundering Officer |
Ira P. Shapiro, Secretary |
| |
1 | For Equity Dividend. |
| |
2 | For Natural Resources. |
|
Investment Advisor |
BlackRock Advisors, LLC
Wilmington, DE 19809
|
|
Sub-Advisor |
BlackRock Investment Management, LLC
Princeton, NJ 08540
|
|
Custodians |
State Street Bank and Trust Company3
Boston, MA 02110
|
|
The Bank of New York Mellon4
New York, NY 10286 |
|
Transfer Agent |
BNY Mellon Investment Servicing (US) Inc.
Wilmington, DE 19809
|
|
Accounting Agent |
State Street Bank and Trust Company
Boston, MA 02110
|
|
Distributor |
BlackRock Investments, LLC
New York, NY 10022
|
|
Independent Registered Public Accounting Firm |
Deloitte & Touche LLP
Boston, MA 02116
|
|
Legal Counsel |
Willkie Farr & Gallagher LLP
New York, NY 10019
|
|
Address of the Funds |
100 Bellevue Parkway
Wilmington, DE 19809
|
| |
3 | For Equity Dividend. |
| |
4 | For Natural Resources. |
| | |
| | |
42 | SEMI-ANNUAL REPORT | JANUARY 31, 2012 |
Electronic Delivery
Electronic copies of most financial reports and prospectuses are available on the Funds’ websites or shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual reports and prospectuses by enrolling in the Funds’ electronic delivery program.
To enroll:
Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages:
Please contact your financial advisor. Please note that not all investment advisors, banks or brokerages may offer this service.
Shareholders Who Hold Accounts Directly with BlackRock:
| |
1) | Access the BlackRock website at
http://www.blackrock.com/edelivery |
| |
2) | Select “eDelivery” under the “More Information” section |
| |
3) | Log into your account |
Householding
The Funds will mail only one copy of shareholder documents, including prospectuses, annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please call the Funds at (800) 441-7762.
Availability of Quarterly Schedule of Investments
The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The Funds’ Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762.
Availability of Proxy Voting Policies and Procedures
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling (800) 441-7762; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.
Availability of Proxy Voting Record
Information about how the Funds voted proxies relating to securities held in the Funds’ portfolios during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com or by calling (800) 441-7762 and (2) on the SEC’s website at http://www.sec.gov.
| | | |
| | | |
| SEMI-ANNUAL REPORT | JANUARY 31, 2012 | 43 |
|
|
Additional Information (continued) |
Account Information
Call us at (800) 441-7762 from 8:00 AM to 6:00 PM EST on any business day to get information about your account balances, recent transactions and share prices. You can also reach us on the Web at http://www.blackrock.com/funds.
Automatic Investment Plans
Investor Class shareholders who want to invest regularly can arrange to have $50 or more automatically deducted from their checking or savings account and invested in any of the BlackRock funds.
Systematic Withdrawal Plans
Investor Class shareholders can establish a systematic withdrawal plan and receive periodic payments of $50 or more from their BlackRock funds, as long as their account balance is at least $10,000.
Retirement Plans
Shareholders may make investments in conjunction with Traditional, Rollover, Roth, Coverdell, Simple IRAs, SEP IRAs and 403(b) Plans.
| | |
| | |
44 | SEMI-ANNUAL REPORT | JANUARY 31, 2012 |
|
|
Additional Information (concluded) |
|
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 non-public personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.
If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.
BlackRock obtains or verifies personal non-public information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our websites.
BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.
We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.
| | | |
| | | |
| SEMI-ANNUAL REPORT | JANUARY 31, 2012 | 45 |
|
|
A World-Class Mutual Fund Family |
BlackRock offers a diverse lineup of open-end mutual funds crossing all investment styles and managed by experts in equity, fixed income and tax-exempt investing.
|
Equity Funds |
BlackRock ACWI ex-US Index Fund |
BlackRock All-Cap Energy & Resources Portfolio |
BlackRock Asset Allocation Portfolio† |
BlackRock Balanced Capital Fund† |
BlackRock Basic Value Fund |
BlackRock Capital Appreciation Fund |
BlackRock China Fund |
BlackRock Commodity Strategies Fund |
BlackRock Emerging Markets Fund |
BlackRock Emerging Markets Long/Short Equity Fund |
BlackRock Energy & Resources Portfolio |
BlackRock Equity Dividend Fund |
BlackRock EuroFund |
BlackRock Focus Growth Fund |
BlackRock Global Allocation Fund† |
BlackRock Global Dividend Income Portfolio |
BlackRock Global Dynamic Equity Fund |
BlackRock Global Opportunities Portfolio |
BlackRock Global SmallCap Fund |
BlackRock Health Sciences Opportunities Portfolio |
BlackRock Index Equity Portfolio |
BlackRock India Fund |
BlackRock International Fund |
BlackRock International Index Fund |
BlackRock International Opportunities Portfolio |
BlackRock Large Cap Core Fund |
BlackRock Large Cap Core Plus Fund |
BlackRock Large Cap Growth Fund |
BlackRock Large Cap Value Fund |
BlackRock Latin America Fund |
BlackRock Mid-Cap Growth Equity Portfolio |
BlackRock Mid-Cap Value Equity Portfolio |
BlackRock Mid Cap Value Opportunities Fund |
BlackRock Natural Resources Trust |
BlackRock Pacific Fund |
BlackRock Russell 1000 Index Fund |
BlackRock Science & Technology Opportunities Portfolio |
BlackRock Small Cap Growth Equity Portfolio |
BlackRock Small Cap Growth Fund II |
BlackRock Small Cap Index Fund |
BlackRock S&P 500 Index Fund |
BlackRock S&P 500 Stock Fund |
BlackRock U.S. Opportunities Portfolio |
BlackRock Value Opportunities Fund |
BlackRock World Gold Fund |
|
|
Fixed Income Funds |
BlackRock Bond Index Fund |
BlackRock Core Bond Portfolio |
BlackRock Emerging Market Debt Portfolio |
BlackRock Floating Rate Income Portfolio |
BlackRock Global Long/Short Credit Fund |
BlackRock GNMA Portfolio |
BlackRock High Yield Bond Portfolio |
BlackRock Inflation Protected Bond Portfolio |
BlackRock International Bond Portfolio |
BlackRock Long Duration Bond Portfolio |
BlackRock Low Duration Bond Portfolio |
BlackRock Multi-Asset Income Portfolio† |
BlackRock Multi-Sector Bond Portfolio |
BlackRock Strategic Income Opportunities Portfolio |
BlackRock Total Return Fund |
BlackRock US Government Bond Portfolio |
BlackRock US Mortgage Portfolio |
BlackRock World Income Fund |
|
|
Municipal Bond Funds |
BlackRock California Municipal Bond Fund |
BlackRock High Yield Municipal Fund |
BlackRock Intermediate Municipal Fund |
BlackRock National Municipal Fund |
BlackRock New Jersey Municipal Bond Fund |
BlackRock New York Municipal Bond Fund |
BlackRock Pennsylvania Municipal Bond Fund |
BlackRock Short-Term Municipal Fund |
|
|
Target Risk & Target Date Funds† |
BlackRock Prepared Portfolios
Conservative Prepared Portfolio
Moderate Prepared Portfolio
Growth Prepared Portfolio
Aggressive Growth Prepared Portfolio |
|
BlackRock Lifecycle Prepared Portfolios |
2015 |
2020 |
2025 |
2030 |
2035 |
2040 |
2045 |
2050 |
|
LifePath Portfolios
Retirement |
2020 |
2025 |
2030 |
2035 |
2040 |
2045 |
2050 |
2055 |
|
LifePath Index Portfolios
Retirement |
2020 |
2025 |
2030 |
2035 |
2040 |
2045 |
2050 |
2055 |
BlackRock mutual funds are currently distributed by BlackRock Investments, LLC. You should consider the investment objectives, risks, charges and expenses of the funds under consideration carefully before investing. Each fund’s prospectus contains this and other information and is available at www.blackrock.com or by calling (800) 441-7762 or from your financial advisor. The prospectus should be read carefully before investing.
| | |
| | |
46 | SEMI-ANNUAL REPORT | JANUARY 31, 2012 |
This report is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of the Funds unless accompanied or preceded by the Funds’ current prospectus. Past performance results shown in this report should not be considered a representation of future performance. Investment returns and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are as dated and are subject to change. Please see the Funds’ prospectus for a description of risks associated with global investments.
| |
#EDNR-1/12-SAR | 
|
Item 2 – | Code of Ethics – Not Applicable to this semi-annual report |
| |
Item 3 – | Audit Committee Financial Expert – Not Applicable to this semi-annual report |
| |
Item 4 – | Principal Accountant Fees and Services – Not Applicable to this semi-annual report |
| |
Item 5 – | Audit Committee of Listed Registrants – Not Applicable |
| |
Item 6 – | Investments |
| (a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this Form. |
| (b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing. |
| |
Item 7 – | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not Applicable |
| |
Item 8 – | Portfolio Managers of Closed-End Management Investment Companies – Not Applicable |
| |
Item 9 – | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable |
| |
Item 10 – | Submission of Matters to a Vote of Security Holders –There have been no material changes to these procedures. |
| |
Item 11 – | Controls and Procedures |
| |
(a) – | The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 15d-15(b) under the Securities Exchange Act of 1934, as amended. |
| |
(b) – | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
| |
Item 12 – | Exhibits attached hereto |
| |
(a)(1) – | Code of Ethics – Not Applicable to this semi-annual report |
| |
(a)(2) – | Certifications – Attached hereto |
| |
(a)(3) – | Not Applicable |
| |
(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 Natural Resources Trust |
| |
| By: | /s/ John M. Perlowski | |
| | John M. Perlowski |
| | Chief Executive Officer (principal executive officer) of |
| | BlackRock Natural Resources Trust |
| |
| Date: April 2, 2012 |
| |
| Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. |
| |
| By: | /s/ John M. Perlowski | |
| | John M. Perlowski |
| | Chief Executive Officer (principal executive officer) of |
| | BlackRock Natural Resources Trust |
| |
| Date: April 2, 2012 |
| |
| By: | /s/ Neal J. Andrews | |
| | Neal J. Andrews |
| | Chief Financial Officer (principal financial officer) of |
| | BlackRock Natural Resources Trust |
| | |
| Date: April 2, 2012 |
