CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-05576
Name of Fund: BlackRock Global Allocation Fund, Inc.
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Global Allocation Fund, Inc., 55 East 52nd Street, New York, NY 10055
Registrant’s telephone number, including area code: (800) 441-7762
Date of fiscal year end: 10/31/2013
Date of reporting period: 04/30/2013
Item 1 – Report to Stockholders
APRIL 30, 2013
SEMI-ANNUAL REPORT (UNAUDITED)
BlackRock Global Allocation Fund, Inc.
Not FDIC Insured • May Lose Value • No Bank Guarantee
Table of Contents
Page
Dear Shareholder
3
Semi-Annual Report:
Fund Summary
4
About Fund Performance
6
Disclosure of Expenses
6
Portfolio Information
7
Derivative Financial Instruments
7
Financial Statements:
Consolidated Schedule of Investments
8
Consolidated Statement of Assets and Liabilities
26
Consolidated Statement of Operations
27
Consolidated Statements of Changes in Net Assets
28
Financial Highlights
29
Notes to Consolidated Financial Statements
34
Officers and Directors
47
Additional Information
48
A World-Class Mutual Fund Family
50
2
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
Dear Shareholder
About this time one year ago, financial market activity was dominated by concerns about Europe’s debt crisis. Investors were also discouraged by gloomy economic reports from various parts of the world, particularly in China. As the outlook for the global economy worsened, however, investors grew increasingly optimistic that the world’s largest central banks would intervene to stimulate growth. This theme, along with the European Central Bank’s (“ECB’s”) firm commitment to preserve the euro currency bloc, drove most asset classes higher through the summer of 2012. In early September, the ECB announced its sovereign bond-buying program designed to support the region’s debt-laden countries. Days later, the US Federal Reserve announced its own much-anticipated stimulus package.
Although financial markets world-wide were buoyed by these aggressive policy actions, risk assets weakened in the fall of 2012. Global trade slowed as many European countries fell into recession and growth continued to decelerate in China. In the United States, stocks slid on lackluster corporate earnings and volatility rose in advance of the US Presidential election. In the post-election environment, investors became more concerned about the “fiscal cliff,” the automatic tax increases and spending cuts that had been scheduled to take effect at the beginning of 2013. High levels of global market volatility persisted through year-end due to fears that bipartisan gridlock would preclude a timely resolution, putting the US economy at high risk for recession. Ultimately, the worst of the fiscal cliff was averted with a last-minute tax deal, although decisions relating to spending cuts and the debt ceiling were postponed, leaving lingering uncertainty.
Investors shook off the nerve-wracking finale to 2012 and the New Year began with a powerful relief rally. Money that had been pulled to the sidelines amid year-end tax-rate uncertainty poured back into the markets in January. Key indicators signaling modest but broad-based improvements in the world’s major economies underpinned the rally. Underlying this aura of comfort was the absence of negative headlines out of Europe. Against this backdrop, global equities surged through January while rising US Treasury yields pressured high quality fixed income assets (as prices move in the opposite direction of yields).
However, bond markets regained strength in February (as yields once again dropped) when global economic momentum slowed and investors toned down their risk appetite. International stock markets weakened amid a resurgence of macro risk out of Europe. A stalemate presidential election in Italy was a reminder that political instability continued to plague the eurozone and a severe banking crisis in Cyprus underscored the fragility of the broader European banking system. In the United States, stocks continued to rise, but at a more moderate pace. Investors grew more cautious given uncertainty as to how long the central bank would continue its stimulus programs. How government spending cuts would impact the already slow economic recovery was another concern. But improving labor market data and rising home prices boosted sentiment in March, pushing major US stock indices to all-time highs. Investors scaled back their enthusiasm in April due to a series of disappointing economic reports. On the whole, US stocks have performed well thus far in 2013 as the US economy demonstrated enough resilience to allay fears of recession, but growth has remained slow enough to dissuade the US Federal Reserve from changing its stance.
Despite continued headwinds for global growth, risk assets have rallied, driven largely by investors seeking meaningful yields in the ongoing low-interest-rate environment. For the 6- and 12-month periods ended April 30, 2013, US and international stocks and high yield bonds posted strong gains. Emerging market equities lagged the rally as the uneven pace of global growth raised doubts that developing economies could thrive in the near term. US Treasury yields were highly volatile over the past 12 months, although they continue to remain low from a historical perspective. US Treasury and investment-grade bonds generated modest returns in this environment, while tax-exempt municipal bonds benefited from favorable supply-and-demand dynamics. Near-zero short term interest rates continued to keep yields on money market securities near their all-time lows.
Market conditions have improved over the past couple of years, but investors still remain highly uncertain and many of the old ways of investing no longer work. That’s why the new world of investing calls for a new approach. One that seeks out more opportunities in more places across a broader array of investments in a portfolio designed to move freely as the markets move up and down. Visit www.blackrockplan.com to learn more about how to take action.
Sincerely,
Rob Kapito President, BlackRock Advisors, LLC
“Despite continued headwinds for global growth, risk assets have rallied, driven largely by investors seeking meaningful yields in the ongoing low-interest-rate environment”
Rob Kapito President, BlackRock Advisors, LLC
Total Returns as of April 30, 2013
6-month
12-month
US large cap equities (S&P 500® Index)
14.42
%
16.89
%
US small cap equities (Russell 2000® Index)
16.58
17.69
International equities (MSCI Europe, Australasia, Far East Index)
3-month Treasury bill (BofA Merrill Lynch 3-Month US Treasury Bill Index)
0.06
0.12
US Treasury securities (BofA Merrill Lynch 10-Year US Treasury Index)
1.52
5.07
US investment grade bonds (Barclays US Aggregate Bond Index)
0.90
3.68
Tax-exempt municipal bonds (S&P Municipal Bond Index)
2.01
5.74
US high yield bonds (Barclays US Corporate High Yield 2% Issuer Capped Index)
7.26
13.95
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.
THIS PAGE NOT PART OF YOUR FUND REPORT
3
Fund Summary as of April 30, 2013
Investment Objective
BlackRock Global Allocation Fund, Inc.’s (the “Fund”) investment objective is to provide high total investment return through a fully managed investment policy utilizing United States and foreign equity securities, debt and money market securities, the combination of which will be varied from time to time both with respect to types of securities and markets in response to changing market and economic trends. Total return means the combination of capital growth and investment income.
Portfolio Management Commentary
How did the Fund perform?
•
For the six-month period ended April 30, 2013, the Fund outperformed its reference benchmark, which is comprised of the S&P 500® Index (36%), FTSE World (ex US) Index (24%), BofA Merrill Lynch Current 5-Year US Treasury Index (24%) and Citigroup Non-US Dollar World Government Bond Index (16%) (the “Reference Benchmark”), but underperformed the broad-based all-equity benchmark, the FTSE World Index. The Fund invests in both equities and bonds; therefore, the Reference Benchmark provides a truer representation of the Fund’s composition and a more comparable means for measurement. The following discussion of relative performance pertains to the Reference Benchmark.
What factors influenced performance?
•
Within equities, the Fund’s overweight and stock selection in Japan contributed to performance. From a sector perspective, stock selection in consumer discretionary, industrials, and information technology (“IT”) positively impacted returns. An underweight allocation to fixed income relative to the Reference Benchmark contributed to performance. Within fixed income, an overweight in convertible bonds was also additive. From a currency perspective, an underweight in the Japanese yen positively impacted performance.
•
Detractors from performance within equities included stock selection in the United States and Canada. From a sector perspective, stock selection and an overweight (led by gold-related securities) in materials weighed on returns. The Fund’s cash position detracted from performance.
Describe recent portfolio activity.
•
During the six-month period, the Fund’s overall equity allocation remained at 60% of net assets. Within equities, the Fund increased its weightings in Asia (notably Japan) and Europe, and reduced its exposure to the United States. On a sector basis, the Fund increased its weightings in financials, consumer discretionary and industrials, and reduced its exposures to IT, materials and energy.
•
The Fund’s allocation to fixed income decreased during the period from 24% of net assets to 22%. Within fixed income, the Fund trimmed exposures to government bonds, notably Australian sovereign debt and US Treasuries, and to US dollar-denominated foreign corporate bonds. These reductions were partially offset by increased exposure to US convertible bonds and US corporate bonds.
•
Reflecting the changes in the Fund’s overall allocations to the equity and fixed income asset classes during the period, the Fund’s cash and cash equivalent holdings increased from 16% of net assets to 18%. During the six-month period, cash helped mitigate portfolio volatility and served as a source of funds for new investments. In addition, the Fund’s cash position helped keep overall portfolio duration (sensitivity to interest rate movements) relatively low.
Describe portfolio positioning at period end.
•
The Fund ended the period neutral in equities, substantially underweight in fixed income and overweight in cash and cash equivalents. Within equities, the Fund was overweight in Asia (notably Japan) and Brazil, and underweight in the United States and Europe. On a sector basis, the Fund was overweight in materials, health care and telecommunication services, and underweight in consumer staples, IT and financials.
•
Within fixed income, the Fund was underweight in US Treasuries, Japanese government bonds and sovereign debt in Europe, and overweight in Australian government bonds (both sovereign and provincial) and sovereign debt in Brazil. In addition, the Fund was overweight in corporate debt and convertible bonds.
•
With respect to currency exposure, the Fund was overweight in the US dollar, Brazilian real, Canadian dollar, Singapore dollar and held smaller overweights in select emerging Asian currencies. The Fund was underweight in the Japanese yen, euro and British pound.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
4
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
Total Return Based on a $10,000 Investment
1
Assuming maximum sales charges, if any, transaction costs and other operating expenses, including advisory fees. Institutional Shares do not have a sales charge.
2
The Fund invests in a portfolio of US and foreign equity securities, debt and money market securities, the combination of which will be varied from time to time with respect to types of securities and markets in response to changing market and economic trends.
3
This broad-based capitalization-weighted index is comprised of 2,439 equities from 35 countries in 4 regions, including the United States.
4
The Reference Benchmark is an unmanaged weighted index comprised as follows: 36% of the S&P 500® Index; 24% FTSE World (ex US) Index; 24% BofA Merrill Lynch Current 5-Year US Treasury Index; and 16% Citigroup Non-US Dollar World Government Bond Index. Descriptions of these indexes can be found in the footnotes below.
Performance Summary for the Period Ended April 30, 2013
Average Annual Total Returns5
1 Year
5 Years
10 Years
6-Month Total Returns
w/o sales charge
w/sales charge
w/o sales charge
w/sales charge
w/o sales charge
w/sales charge
Institutional
8.93
%
10.08
%
N/A
3.87
%
N/A
10.40
%
N/A
Investor A
8.77
9.77
4.01
%
3.59
2.48
%
10.12
9.53
%
Investor B
8.32
8.88
4.38
2.76
2.40
9.43
9.43
Investor C
8.38
8.98
7.98
2.81
2.81
9.28
9.28
Class R
8.57
9.41
N/A
3.24
N/A
9.81
N/A
FTSE World Index
14.26
16.40
N/A
2.31
N/A
9.35
N/A
Reference Benchmark
7.92
9.98
N/A
4.26
N/A
7.86
N/A
US Stocks: S&P 500® Index6
14.42
16.89
N/A
5.21
N/A
7.88
N/A
Non-US Stocks: FTSE World (ex US) Index7
13.89
15.80
N/A
(0.22
)
N/A
10.80
N/A
US Bonds: BofA Merrill Lynch Current 5-Year US Treasury Index8
1.06
2.27
N/A
5.48
N/A
4.68
N/A
Non-US Bonds: Citigroup Non-US Dollar World Government Bond Index9
(4.23
)
(2.51
)
N/A
3.26
N/A
5.56
N/A
5
Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See “About Fund Performance” on page 6 for a detailed description of share classes, including any related sales charges and fees.
6
This unmanaged index covers 500 industrial, utility, transportation and financial companies of the US markets (mostly New York Stock Exchange (“NYSE”) issues) representing about 75% of NYSE market capitalization and 30% of NYSE issues.
7
This unmanaged capitalization-weighted index is comprised of 1,818 companies in 34 countries, excluding the United States.
8
This unmanaged index is designed to track the total return of the current coupon five-year US Treasury bond.
9
This unmanaged market capitalization-weighted index tracks 22 government bond indexes, excluding the United States.
N/A — Not applicable as share class and index do not have a sales charge.
Past performance is not indicative of future results.
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
5
About Fund Performance
•
Institutional Shares are not subject to any sales charge. These shares bear no ongoing distribution or service fees and are available only to eligible investors.
•
Investor A Shares are subject to a maximum initial sales charge (front-end load) of 5.25% and a service fee of 0.25% per year (but no distribution fee).
•
Investor B Shares are subject to a maximum contingent deferred sales charge (“CDSC”) of 4.50% declining to 0% after six years. In addition, these shares are subject to a distribution fee of 0.75% per year and a service fee of 0.25% per year. These shares automatically convert to Investor A Shares after approximately eight years. (There is no initial sales charge for automatic share conversions.) All returns for periods greater than eight years reflect this conversion. These shares are only available through exchanges and dividend reinvestment by existing shareholders or for purchase by certain employer-sponsored retirement plans.
•
Investor C Shares are subject to a 1.00% CDSC if redeemed within one year of purchase. In addition, these shares are subject to a distribution fee of 0.75% per year and a service fee of 0.25% per year.
•
Class R Shares are not subject to any sales charge. These shares are subject to a distribution fee of 0.25% per year and a service fee of 0.25% per year. These shares are available only to certain employer-sponsored retirement plans and other similar plans.
Performance information reflects past performance and does not guarantee future results. Current performance may be lower or higher than the performance data quoted. Refer to www.blackrock.com/funds to obtain performance data current to the most recent month end. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Figures shown in the performance table on the previous page assume reinvestment of all dividends and capital gain distributions, if any, at net asset value (“NAV”) on the ex-dividend date. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Dividends paid to each class of shares will vary because of the different levels of service, distribution and transfer agency fees applicable to each class, which are deducted from the income available to be paid to shareholders. The Fund’s investment advisor waived a portion of its fee. Without such waiver, the Fund’s returns would have been lower.
Disclosure of Expenses
Shareholders of the Fund may incur the following charges: (a) transactional expenses, such as sales charges; and (b) operating expenses, including investment advisory fees, service and distribution fees, including 12b-1 fees, acquired fund fees and expenses, and other Fund expenses. The expense example shown below (which is based on a hypothetical investment of $1,000 invested on November 1, 2012 and held through April 30, 2013) is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other mutual funds.
The expense example provides information about actual account values and actual expenses. In order to estimate the expenses a shareholder paid during the period covered by this report, shareholders can divide their account value by $1,000 and then multiply the result by the number corresponding to their share class under the heading entitled “Expenses Paid During the Period.”
The expense example also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. In order to assist shareholders in comparing the ongoing expenses of investing in the Fund and other funds, compare the 5% hypothetical example with the 5% hypothetical examples that appear in other funds’ shareholder reports.
The expenses shown in the expense example are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as sales charges, if any. Therefore, the hypothetical example is useful in comparing ongoing expenses only, and will not help shareholders determine the relative total expenses of owning different funds. If these transactional expenses were included, shareholder expenses would have been higher.
Expense Example
Actual
Hypothetical2
Beginning Account Value November 1, 2012
Ending Account Value April 30, 2013
Expenses Paid During the Period1
Beginning Account Value November 1, 2012
Ending Account Value April 30, 2013
Expenses Paid During the Period1
Annualized Expense Ratio
Institutional
$
1,000.00
$
1,089.30
$
4.04
$
1,000.00
$
1,020.93
$
3.91
0.78
%
Investor A
$
1,000.00
$
1,087.70
$
5.44
$
1,000.00
$
1,019.59
$
5.26
1.05
%
Investor B
$
1,000.00
$
1,083.20
$
9.76
$
1,000.00
$
1,015.39
$
9.44
1.89
%
Investor C
$
1,000.00
$
1,083.80
$
9.35
$
1,000.00
$
1,015.79
$
9.05
1.81
%
Class R
$
1,000.00
$
1,085.70
$
7.19
$
1,000.00
$
1,017.89
$
6.95
1.39
%
1
For each class of the Fund, expenses are equal to the annualized net expense ratio for the class multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period shown).
2
Hypothetical 5% annual return before expenses is calculated by pro rating the number of days in the most recent fiscal half year divided by 365.
6
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
Portfolio Information
As of April 30, 2013
Percent of
Ten Largest Holdings (Equity Investments)
Long-Term Investments
SPDR Gold Shares
1
%
Samsung Electronics Co. Ltd
1
General Electric Co
1
Pfizer, Inc.
1
Google, Inc., Class A
1
JPMorgan Chase & Co.
1
Visa, Inc., Class A
1
Wells Fargo & Co
1
Roche Holding AG
1
Oracle Corp
1
Percent of
Geographic Allocation
Long-Term Investments
United States
52
%
Japan
10
United Kingdom
7
Germany
5
Brazil
3
Canada
3
Australia
3
Switzerland
2
France
2
Other1
13
1
Includes holdings within countries and geographic regions that are 1% or less of long-term investments. Please refer to the Consolidated Schedule of Investments for such countries.
Overall Asset Exposure
Percent of Fund’s Net Assets
4/30/13
10/31/12
Reference Benchmark5 Percentages
US Equities
32
%2
35
%2
36
%
European Equities
11
2
11
2
12
Asia Pacific Equities
13
2
10
2
9
Other Equities
4
4
3
Total Equities
60
3
60
3
60
US Dollar Denominated Fixed Income Securities
13
13
24
US Issuers
10
9
—
Non-US Issuers
3
4
—
Non-US Dollar Denominated Fixed Income Securities
9
11
16
Total Fixed Income Securities
22
24
40
Cash & Short-Term Securities4
18
16
—
2
Includes value of financial futures contracts.
3
Includes Preferred Stock.
4
Cash & Short-Term Securities are reduced by the market (or nominal) value of long financial futures contracts.
5
The Reference Benchmark is an unmanaged weighted index comprised as follows: 36% of the S&P 500® Index; 24% FTSE World (ex US) Index; 24% BofA Merrill Lynch Current 5-Year US Treasury Index; and 16% Citigroup Non-US Dollar World Government Bond Index. Descriptions of these indexes are found on page 5 of this report to shareholders in the “Performance Summary” section.
Derivative Financial Instruments
The Fund may invest in various derivative financial instruments, including financial futures contracts, foreign currency exchange contracts, options and swaps, as specified in Note 2 of the Notes to Consolidated Financial Statements, which may constitute forms of economic leverage. Such derivative financial instruments are used to obtain exposure to a security, index and/or market without owning or taking physical custody of securities or to hedge market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the derivative financial instrument. The Fund’s ability to use a derivative financial instrument successfully depends on the investment advisor’s ability to predict pertinent market movements accurately, which cannot be assured. The use of derivative financial instruments may result in losses greater than if they had not been used, may require the Fund to sell or purchase portfolio investments at inopportune times or for distressed values, may limit the amount of appreciation the Fund can realize on an investment, may result in lower dividends paid to shareholders or may cause the Fund to hold an investment that it might otherwise sell. The Fund’s investments in these instruments are discussed in detail in the Notes to Consolidated Financial Statements.
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
7
Consolidated Schedule of Investments April 30, 2013 (Unaudited)
(Percentages shown are based on Net Assets)
Common Stocks
Shares
Value
Argentina — 0.1%
Tenaris SA — ADR (a)
770,121
$
34,262,683
Australia — 0.3%
Asciano Ltd.
8,138,753
45,595,247
Mesoblast, Ltd. (a)(b)
5,063,508
30,961,121
Newcrest Mining Ltd.
2,229,903
39,064,342
Orica Ltd.
1,168,506
27,709,141
QBE Insurance Group Ltd.
3,136,735
43,534,587
186,864,438
Belgium — 0.2%
Anheuser-Busch InBev NV
640,357
61,519,436
RHJ International (a)(b)(c)
4,080,524
19,775,760
RHJ International — ADR (b)(c)
899,200
4,362,649
85,657,845
Brazil — 1.2%
Anhanguera Educacional Participacoes SA
2,115,583
38,066,219
BR Malls Participacoes SA
2,018,556
23,961,367
Cia Brasileira de Distribuicao Grupo Pao de Acucar, Preference Shares
1,167,479
64,654,091
Cielo SA
2,218,375
58,853,603
Cosan Ltd., Class A
5,717,121
118,630,261
Cyrela Brazil Realty SA
4,508,741
40,969,092
Hypermarcas SA (b)
5,965,444
47,735,479
Itau Unibanco Holding SA, Preference Shares
3,079,463
51,777,151
MRV Engenharia e Participacoes SA
7,720,820
33,187,081
Petroleo Brasileiro SA — ADR
4,618,994
92,241,310
Qualicorp SA (b)
3,503,091
34,142,334
SLC Agricola SA
3,978,838
��
35,159,743
Telefonica Brasil — ADR
1,582,710
42,068,432
681,446,163
Canada — 2.2%
Agrium, Inc.
650,279
59,611,076
Athabasca Oil Corp. (b)
7,287,731
52,734,686
Bank of Nova Scotia
828,537
47,773,800
BCE, Inc.
1,285,346
60,206,936
Brookfield Asset Management, Inc., Class A
1,564,240
60,364,022
Canadian Natural Resources Ltd.
1,682,338
49,359,797
Canadian Pacific Railway Ltd.
224,904
28,027,537
Detour Gold Corp. (b)
1,094,441
13,166,535
Eldorado Gold Corp.
4,479,581
35,438,246
First Quantum Minerals Ltd.
2,417,845
42,215,389
Goldcorp, Inc.
5,687,528
168,237,078
Kinross Gold Corp.
1,072,635
5,835,134
Kinross Gold Corp.
4,907,645
26,743,730
Osisko Mining Corp. (b)
4,649,607
19,614,700
Potash Corp. of Saskatchewan, Inc.
2,900,249
122,100,483
Rogers Communications, Inc., Class B
1,002,401
49,448,441
Shaw Communications, Inc., Class B
2,998,580
68,278,749
Silver Wheaton Corp.
2,204,374
54,073,294
Common Stocks
Shares
Value
Canada (concluded)
Suncor Energy, Inc.
240,322
$
7,486,030
Suncor Energy, Inc.
5,105,121
159,166,063
Teck Resources Ltd., Class B
1,315,654
34,956,927
TELUS Corp.
973,560
35,030,572
The Toronto-Dominion Bank
388,087
31,815,083
Valeant Pharmaceuticals International, Inc. (b)
257,300
19,575,384
1,251,259,692
Chile — 0.0%
Sociedad Quimica y Minera de Chile SA — ADR
430,933
21,326,874
China — 0.5%
Baidu.com, Inc. — ADR (b)
269,434
23,130,909
Beijing Enterprises Holdings Ltd.
15,912,232
119,127,915
Chaoda Modern Agriculture Holdings Ltd. (b)
118,119,394
4,724,776
China BlueChemical Ltd.
35,546,800
21,716,490
Dongfeng Motor Group Co. Ltd., Class H
8,822,700
13,180,981
Haitian International Holdings Ltd.
9,842,600
16,843,711
Sinopharm Group Co.
12,104,300
36,070,975
Zhongsheng Group Holdings Ltd.
19,223,671
26,749,635
261,545,392
Denmark — 0.0%
TDC A/S
2,120,152
17,205,089
France — 1.9%
AXA SA
3,690,796
69,116,162
BNP Paribas SA
2,898,823
161,632,271
Compagnie de Saint-Gobain
1,153,891
46,212,097
European Aeronautic Defence and Space Co. NV
2,308,698
121,972,365
Eutelsat Communications SA
780,824
28,213,435
LVMH Moet Hennessy Louis Vuitton SA
297,312
51,519,599
Safran SA
3,460,974
170,126,556
Sanofi
1,017,599
110,018,253
Sanofi — ADR
150,928
8,052,009
Societe Generale SA
636,662
23,128,006
Technip SA
208,014
22,311,644
Total SA
1,891,621
95,218,615
Total SA — ADR
2,070,347
104,014,233
Unibail-Rodamco SE
127,686
33,378,993
1,044,914,238
Germany — 2.1%
Allianz SE, Registered Shares
603,545
89,276,690
BASF SE
356,704
33,391,978
Bayerische Motoren Werke AG
490,205
45,329,303
Deutsche Bank AG, Registered Shares
2,701,390
124,353,182
Deutsche Boerse AG
550,685
34,415,638
Deutsche Telekom AG, Registered Shares
7,690,863
91,091,680
Fresenius SE & Co. KGaA
773,929
97,091,573
Portfolio Abbreviations
To simplify the listings of portfolio holdings in the Consolidated Schedule of Investments, the names and descriptions of many of the securities have been abbreviated according to the following list:
CHF CNY EUR FTSE GBP GDR HKD
Swiss Franc Chinese Renminbi Euro Financial Times Stock Exchange British Pound Global Depositary Receipts Hong Kong Dollar
JPY LIBOR
MXN MYR PCL RUB SGD
Japanese Yen London Interbank Offered Rate Mexican New Peso Malaysian Ringgit Public Company Limited Russian Ruble Singapore Dollar
S&P SPDR
THB TRY USD
Standard and Poor’s Standard and Poor’s Depositary Receipts Thai Baht Turkish Lira US Dollar
ADR AUD BRL CAD
American Depositary Receipts Australian Dollar Brazilian Real Canadian Dollar
BlackRock Liquidity Series LLC, Money Market Series, 0.22% (o)(r)(s)
USD
422,648
422,648,288
Total Money Market Funds — 0.8%
431,194,515
Time Deposits
Par (000)
Australia — 0.0%
Brown Brothers Harriman & Co., 1.81%, 5/01/13
AUD
1,448
1,500,824
JPMorgan Chase & Co., 1.81%, 5/01/13
10,909
11,308,955
12,809,779
Canada — 0.0%
Bank of America Corp., 0.24%, 5/01/13
CAD
514
510,609
Europe — 0.1%
Citibank NA, 0.00%, 5/02/13
EUR
18,197
23,964,126
Hong Kong — 0.1%
JPMorgan Chase & Co., 0.01%, 5/02/13
HKD
396,124
51,045,859
Japan — 0.0%
Citibank NA, 0.01%, 5/02/13
JPY
1,497,410
15,360,410
Singapore — 0.0%
Brown Brothers Harriman & Co., 0.01%, 5/02/13
SGD
3
2,037
Time Deposits
Par (000)
Value
Switzerland — 0.0%
Brown Brothers Harriman & Co., 0.00%, 5/02/13
CHF
3,755
$
4,038,289
United States — 0.0%
Brown Brothers Harriman & Co., 0.06%, 5/01/13
USD
91
90,646
Total Time Deposits — 0.2%
107,821,755
US Treasury Obligations (q)
US Treasury Bills:
0.05% — 0.08%, 5/02/13
709,920
709,918,865
0.07% — 0.09%, 5/09/13
864,650
864,634,914
0.05% — 0.10%, 5/16/13
855,150
855,121,530
0.08% — 0.11%, 5/23/13
495,250
495,225,451
0.07% — 0.08%, 6/06/13
411,000
410,968,633
0.05% — 0.07%, 6/13/13
510,500
510,469,516
0.05% — 0.09%, 6/20/13
610,355
610,288,779
0.05% — 0.08%, 6/27/13
559,500
559,440,704
0.07% — 0.08%, 7/05/13
601,100
601,067,540
0.04% — 0.06%, 7/18/13
970,195
970,100,891
0.04% — 0.07%, 7/25/13
1,400,965
1,400,799,686
0.03% — 0.07%, 7/11/13
1,050,525
1,050,468,272
0.04% — 0.05%, 8/01/13
268,000
267,965,696
Total US Treasury Obligations — 16.6%
9,306,470,477
Total Short-Term Securities (Cost — $10,838,458,575) — 19.4%
10,831,627,482
Options Purchased
Total Options Purchased (Cost — $412,497,903) — 0.9%
519,211,194
Total Investments Before Investments Sold Short and Options Written (Cost — $48,208,893,348) — 102.3%
57,216,941,855
Investments Sold Short
Shares
Japan — 0.1%
Fast Retailing Co., Ltd.
135,900
(49,836,445
)
Par (000)
United States — 0.2%
US Treasury Notes, 2.00%, 2/15/23
87,132
(89,678,219
)
Total Investments Sold Proceeds — $126,990,657) — (0.3)%
(139,514,664
)
Options Written
Total Options Written (Premiums Received — $79,945,196) — (0.2)%
(121,928,563
)
Total Investments, Net of Investments Sold Short and Options Written — 101.8%
56,955,498,628
Liabilities in Excess of Other Assets — (1.8)%
(1,026,615,557
)
Net Assets — 100.0%
$
55,928,883,071
See Notes to Consolidated Financial Statements.
16
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
Consolidated Schedule of Investments (continued)
Notes to Consolidated Schedule of Investments
(a)
Security, or a portion of security, is on loan.
(b)
Non-income producing security.
(c)
Investments in issuers (whereby the Fund held 5% or more of the companies’ outstanding securities) that were considered to be an affiliate during the six months ended April 30, 2013, for purposes of Section 2(a)(3) of 1940 Act, as amended, were as follows:
Affiliate
Shares Held at October 31, 2012
Shares Purchased
Shares Sold
Shares Held at April 30, 2013
Value at April 30, 2013
Realized Gain (Loss)
Income
ETFS Gold Trust
1,355,000
—
—
1,355,000
$
197,138,950
—
—
ETFS Palladium Trust
462,500
—
—
462,500
$
31,667,375
—
—
ETFS Platinum Trust
390,600
—
—
390,600
$
57,668,184
—
—
Fusion-io, Inc.
1,965,637
4,007,445
(934,555
)
5,038,527
$
94,623,537
$
(150,095
)
RHJ International
4,080,524
—
—
4,080,524
$
19,775,760
—
—
RHJ International — ADR
899,200
—
—
899,200
$
4,362,649
—
—
The St. Joe Co.
9,229,019
—
—
9,229,019
$
180,611,902
—
—
Tianjin Development Holdings Ltd.1
83,272,798
—
(83,272,798
)
—
—
$
15,689,715
—
TF Administradora Industrial S de RL de C.V
—
17,471,100
—
17,471,100
$
41,482,405
—
—
1
No longer an affiliated company or held by the Fund as of report date.
(d)
All or a portion of the security has been pledged as collateral in connection with outstanding options written.
(e)
All or a portion of security has been pledged as collateral in connection with swaps.
(f)
Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.
(g)
Variable rate security. Rate shown is as of report date.
(h)
Issuer filed for bankruptcy and/or is in default of principal and/or interest payments.
(i)
Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.
(j)
Convertible security.
(k)
Security is perpetual in nature and has no stated maturity date.
(l)
Represents a step-down bond that pays an initial coupon rate for the first period and then a lower coupon rate for the following periods. Rate shown is as of report date.
(m)
Represents a payment-in-kind security which may pay interest/dividends in additional par/shares.
(n)
All or a portion of security has been pledged in connection with open financial futures contracts.
(o)
Investments in issuers considered to be an affiliate of the Fund during the six months ended April 30, 2013, for purposes of Section 2(a)(3) of 1940 Act, as amended, were as follows:
Affiliate
Shares/ Beneficial Interest Held at October 31, 2012
Shares Purchased
Beneficial Interest Sold
Shares/ Beneficial Interest Held at April 30, 2013
Value at April 30, 2013
Realized Gain
Income
BlackRock Liquidity Funds, TempFund, Institutional Class
—
8,546,227
2
—
8,546,227
$
8,546,227
—
$
3,904
BlackRock Liquidity Series, LLC Money Market Series
$
479,431,482
—
$
(56,783,194
)3
$
422,648,288
$
422,648,288
—
$
1,312,458
iShares Gold Trust
11,836,612
—
—
11,836,612
$
169,855,382
—
—
2
Represents net shares purchased.
3
Represents net beneficial interest sold.
See Notes to Consolidated Financial Statements.
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
17
Consolidated Schedule of Investments (continued)
(p)
Warrants entitle the Fund to purchase a predetermined number of shares of common stock and are non-income producing. The purchase price and number of shares are subject to adjustment under certain conditions until the expiration date of the warrants, if any.
(q)
Rates shown are discount rates or a range of discount rates paid at the time of purchase.
(r)
Represents the current yield as of report date.
(s)
Security was purchased with the cash collateral from loaned securities. The Fund may withdraw up to 25% of its investment daily, although the manager of the BlackRock Liquidity Series LLC, Money Market Series, in its sole discretion, may permit an investor to withdraw more than 25% on any one day.
•
Financial futures contracts as of April 30, 2013 were as follows:
Contracts Purchased/(Sold)
Issue
Exchange
Expiration
Notional Value
Unrealized Appreciation (Depreciation)
5
Nikkei 225
Chicago Mercantile
June 2013
USD
355,311
$
55,906
3,337
Topix Index
Tokyo Stock Exchange
June 2013
USD
399,474,689
50,811,489
(14)
Dax Index
Eurex Mercantile
June 2013
USD
3,651,048
33,189
(173)
FTSE 100 Index
Euronext LIFFE
June 2013
USD
17,154,349
72,271
(7,018)
S&P 500 E-Mini Index
Chicago Mercantile
June 2013
USD
558,702,980
(12,744,422
)
Total
$
38,228,433
•
Foreign currency exchange contracts as of April 30, 2013 were as follows:
Currency Purchased
Currency Sold
Counterparty
Settlement Date
Unrealized Appreciation (Depreciation)
JPY
641,015,687
USD
6,546,788
Goldman Sachs Group, Inc.
5/01/13
$
28,743
USD
12,789,388
AUD
12,356,300
Barclays Plc
5/01/13
(20,391
)
USD
213,488
CAD
216,647
Brown Brothers Harriman & Co.
5/01/13
(1,557
)
USD
30,015
CAD
30,528
Brown Brothers Harriman & Co.
5/01/13
(287
)
USD
7,014,540
GBP
4,518,775
Brown Brothers Harriman & Co.
5/01/13
(4,699
)
USD
15,317,202
JPY
1,497,409,622
Brown Brothers Harriman & Co.
5/01/13
(43,209
)
AUD
133,009,000
USD
137,597,811
Credit Suisse Group AG
5/02/13
292,650
EUR
164,833,908
USD
215,446,160
Deutsche Bank AG
5/02/13
1,631,933
EUR
80,215,798
USD
104,676,804
UBS AG
5/02/13
963,429
EUR
144,310,174
USD
186,655,108
UBS AG
5/02/13
3,394,243
JPY
13,070,766,870
USD
134,349,894
JPMorgan Chase & Co.
5/02/13
(270,119
)
JPY
1,134,857,244
USD
11,606,231
UBS AG
5/02/13
35,122
USD
137,492,068
AUD
133,009,000
Credit Suisse Group AG
5/02/13
(398,392
)
USD
12,783,731
CAD
12,922,166
Brown Brothers Harriman & Co.
5/02/13
(42,877
)
USD
263,925
CAD
267,198
Brown Brothers Harriman & Co.
5/02/13
(1,297
)
USD
320,863
CHF
302,445
Brown Brothers Harriman & Co.
5/02/13
(4,417
)
USD
1,723,052
EUR
1,316,111
BNP Paribas SA
5/02/13
(10,200
)
USD
2,621,618
EUR
2,003,529
Brown Brothers Harriman & Co.
5/02/13
(16,931
)
USD
893,676
EUR
682,821
Brown Brothers Harriman & Co.
5/02/13
(5,565
)
USD
82,049,402
EUR
63,805,000
Deutsche Bank AG
5/02/13
(1,978,623
)
USD
83,372,000
EUR
63,654,896
Deutsche Bank AG
5/02/13
(458,345
)
USD
84,062,302
EUR
64,132,000
Deutsche Bank AG
5/02/13
(396,366
)
USD
82,582,283
EUR
63,329,000
UBS AG
5/02/13
(818,874
)
USD
81,831,861
EUR
62,598,000
UBS AG
5/02/13
(606,604
)
USD
83,772,613
EUR
63,972,000
UBS AG
5/02/13
(475,342
)
USD
9,714,379
JPY
949,387,222
Brown Brothers Harriman & Co.
5/02/13
(24,424
)
USD
137,399,000
JPY
13,070,766,870
JPMorgan Chase & Co.
5/02/13
3,319,225
USD
757,730
THB
22,117,381
Brown Brothers Harriman & Co.
5/02/13
4,157
USD
1,352,450
THB
39,476,649
Brown Brothers Harriman & Co.
5/02/13
7,419
EUR
100,263,285
USD
129,824,912
Barclays Plc
5/03/13
2,216,868
EUR
99,402,836
USD
128,777,864
BNP Paribas SA
5/03/13
2,130,746
EUR
167,754,087
USD
217,231,477
Credit Suisse Group AG
5/03/13
3,692,346
EUR
99,503,992
USD
128,858,665
Goldman Sachs Group, Inc.
5/03/13
2,183,164
USD
3,705,040
CHF
3,452,356
Brown Brothers Harriman & Co.
5/03/13
(7,970
)
USD
3,705,040
CHF
3,452,356
Brown Brothers Harriman & Co.
5/03/13
(7,970
)
USD
82,070,709
EUR
62,881,000
Barclays Plc
5/03/13
(740,453
)
USD
82,387,502
EUR
62,946,000
BNP Paribas SA
5/03/13
(509,263
)
USD
82,496,879
EUR
63,386,000
Credit Suisse Group AG
5/03/13
(979,343
)
USD
82,029,096
EUR
62,734,000
Credit Suisse Group AG
5/03/13
(588,474
)
USD
83,333,265
EUR
63,463,000
Credit Suisse Group AG
5/03/13
(244,362
)
USD
82,598,297
EUR
63,386,000
Goldman Sachs Group, Inc.
5/03/13
(877,926
)
USD
3,280,876
EUR
2,509,274
UBS AG
5/03/13
(23,714
)
See Notes to Consolidated Financial Statements.
18
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
Consolidated Schedule of Investments (continued)
Foreign currency exchange contracts as of April 30, 2013 (concluded):
Currency Purchased
Currency Sold
Counterparty
Settlement Date
Unrealized Appreciation (Depreciation)
USD
2,576,669
MYR
7,857,037
Brown Brothers Harriman & Co.
5/03/13
$
(5,759
)
USD
89,247,133
GBP
58,923,000
JPMorgan Chase & Co.
5/10/13
(2,276,036
)
USD
133,503,340
JPY
12,752,506,000
Barclays Plc
5/10/13
2,683,399
USD
125,559,355
JPY
11,862,094,500
Goldman Sachs Group, Inc.
5/10/13
3,873,587
USD
125,879,115
JPY
11,887,394,200
JPMorgan Chase & Co.
5/10/13
3,933,813
USD
139,099,754
JPY
13,010,000,000
UBS AG
5/13/13
5,636,477
USD
49,708,599
TRY
91,284,872
Credit Suisse Group AG
5/15/13
(1,141,401
)
USD
25,060,706
TRY
46,136,760
Credit Suisse Group AG
5/15/13
(639,656
)
EUR
100,709,000
JPY
12,088,242,262
Bank of America Corp.
5/16/13
8,630,598
USD
136,738,612
JPY
12,782,325,427
Bank of America Corp.
5/16/13
5,609,103
USD
185,889,348
JPY
17,362,065,100
UBS AG
5/16/13
7,777,855
USD
191,638,772
GBP
126,536,000
Deutsche Bank AG
5/17/13
(4,896,322
)
USD
137,959,021
JPY
12,799,093,000
Barclays Plc
5/17/13
6,656,887
USD
44,352,821
JPY
4,115,054,776
BNP Paribas SA
5/17/13
2,137,684
USD
109,676,056
JPY
10,177,938,000
Deutsche Bank AG
5/17/13
5,270,886
CAD
140,915,419
USD
138,497,257
Credit Suisse Group AG
5/23/13
1,305,796
EUR
98,487,000
JPY
12,733,778,178
Morgan Stanley
5/23/13
(916,724
)
USD
128,912,674
JPY
12,753,073,048
Bank of America Corp.
5/23/13
(1,921,016
)
USD
166,529,248
JPY
16,473,073,200
Deutsche Bank AG
5/23/13
(2,467,899
)
USD
181,383,119
JPY
17,924,007,784
JPMorgan Chase & Co.
5/23/13
(2,499,156
)
USD
108,728,805
BRL
217,517,410
Deutsche Bank AG
5/24/13
273,425
USD
128,050,124
JPY
12,745,981,340
Goldman Sachs Group, Inc.
5/24/13
(2,711,422
)
USD
128,029,014
JPY
12,750,345,468
Morgan Stanley
5/24/13
(2,777,304
)
USD
181,838,181
JPY
18,113,083,000
UBS AG
5/24/13
(3,984,683
)
USD
129,986,761
JPY
12,694,767,022
BNP Paribas SA
5/30/13
(253,021
)
USD
130,667,490
JPY
12,753,147,000
Credit Suisse Group AG
5/30/13
(171,231
)
USD
123,678,106
JPY
12,064,960,000
Morgan Stanley
5/30/13
(100,279
)
EUR
101,771,000
JPY
12,955,448,300
Goldman Sachs Group, Inc.
5/31/13
1,136,449
USD
204,599,440
GBP
134,307,122
Deutsche Bank AG
5/31/13
(3,986,334
)
USD
92,303,232
GBP
60,586,700
Goldman Sachs Group, Inc.
5/31/13
(1,790,987
)
EUR
42,718,000
USD
55,595,555
BNP Paribas SA
6/06/13
674,195
EUR
40,631,000
USD
52,802,016
BNP Paribas SA
6/06/13
718,659
USD
139,258,265
EUR
107,032,000
BNP Paribas SA
6/06/13
(1,728,295
)
USD
121,334,011
JPY
12,058,174,000
BNP Paribas SA
6/06/13
(2,379,203
)
USD
114,227,445
JPY
11,354,208,000
Credit Suisse Group AG
6/06/13
(2,263,291
)
USD
124,906,066
JPY
12,409,292,800
Goldman Sachs Group, Inc.
6/06/13
(2,409,520
)
EUR
101,771,000
JPY
13,139,399,382
Barclays Plc
6/07/13
(749,546
)
EUR
98,487,000
JPY
12,716,493,709
BNP Paribas SA
6/07/13
(736,474
)
USD
125,037,147
JPY
12,423,690,975
Goldman Sachs Group, Inc.
6/07/13
(2,426,895
)
USD
137,162,871
AUD
133,009,000
Credit Suisse Group AG
6/13/13
(294,942
)
USD
134,376,137
JPY
13,070,766,870
JPMorgan Chase & Co.
6/13/13
268,614
USD
139,310,000
JPY
13,667,564,790
Morgan Stanley
6/13/13
(920,736
)
USD
125,471,078
JPY
11,170,000,000
Barclays Plc
6/20/13
10,861,008
USD
35,965,759
TRY
65,018,900
Barclays Plc
7/17/13
(23,748
)
USD
51,242,627
MXN
646,354,000
Credit Suisse Group AG
8/22/13
(1,506,232
)
USD
51,153,630
MXN
646,055,000
Credit Suisse Group AG
9/05/13
(1,510,228
)
USD
15,346,089
MXN
193,816,500
Credit Suisse Group AG
9/05/13
(453,068
)
USD
168,699,823
JPY
16,180,000,000
Deutsche Bank AG
9/10/13
2,590,546
USD
27,761,162
TRY
51,608,000
UBS AG
9/11/13
(639,259
)
USD
86,954,909
MXN
1,099,597,000
Credit Suisse Group AG
9/19/13
(2,576,999
)
USD
51,103,941
MXN
646,240,000
Credit Suisse Group AG
9/19/13
(1,514,518
)
USD
174,884,262
MXN
2,196,284,000
Deutsche Bank AG
10/03/13
(3,737,547
)
Total
$
21,971,301
See Notes to Consolidated Financial Statements.
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
19
Consolidated Schedule of Investments (continued)
•
Exchange-traded options purchased as of April 30, 2013 were as follows:
Description
Put/ Call
Strike Price
Expiration Date
Contracts
Market Value
Barrick Gold Corp.
Call
USD
80.00
1/18/14
160,050
$
240,075
Goldcorp, Inc.
Call
USD
80.00
1/18/14
100,070
200,140
Newmont Mining Corp.
Call
USD
90.00
1/18/14
128,039
512,156
S&P 500 Index
Put
USD
1,550.00
5/18/13
15,034
6,614,960
Humana, Inc.
Put
USD
67.50
8/17/13
7,464
1,642,080
Total
$
9,209,411
•
Over-the-counter options purchased as of April 30, 2013 were as follows:
Description
Counterparty
Put/ Call
Strike Price
Expiration Date
Contracts
Notional Amount (000)
Market Value
S&P 500 Volatility Index
Credit Suisse Group AG
Call
USD
18.00
5/22/13
1,301,000
—
$
617,975
Topix Index
Goldman Sachs Group, Inc.
Call
JPY
1,000.42
6/14/13
268,831
—
46,043,649
Topix Index
Bank of America Corp.
Call
JPY
1,013.21
8/09/13
176,137
—
29,957,017
Nikkei 225 Index
Citigroup, Inc.
Call
JPY
9,400.00
12/13/13
14,711
—
68,557,995
Nikkei 225 Index
JPMorgan Chase & Co.
Call
JPY
9,354.06
12/13/13
14,701
—
69,172,977
Nikkei 225 Index
JPMorgan Chase & Co.
Call
JPY
11,000.00
12/13/13
7,365
—
23,010,509
Nikkei 225 Index
JPMorgan Chase & Co.
Call
JPY
11,000.00
12/13/13
2,055
—
6,420,447
Nikkei 225 Index
JPMorgan Chase & Co.
Call
JPY
11,000.00
12/13/13
658
—
2,055,793
Activision Blizzard, Inc.
Goldman Sachs Group, Inc.
Call
USD
20.00
1/17/14
4,043,792
—
675,790
Aetna, Inc.
Goldman Sachs Group, Inc.
Call
USD
60.00
1/17/14
2,935,011
—
9,920,956
Agnico-Eagle Mines, Ltd.
Deutsche Bank AG
Call
USD
85.00
1/17/14
3,018,384
—
234,830
Alcoa, Inc.
Goldman Sachs Group, Inc.
Call
USD
15.00
1/17/14
7,304,915
—
164,054
AngloGold Ashanti Ltd.
Deutsche Bank AG
Call
USD
65.00
1/17/14
3,579,369
—
15,853
Autozone, Inc.
Goldman Sachs Group, Inc.
Call
USD
550.00
1/17/14
306,546
—
221,501
Bank of America Corp.
Goldman Sachs Group, Inc.
Call
USD
17.00
1/17/14
16,305,614
—
1,603,657
Best Buy Co., Inc.
Goldman Sachs Group, Inc.
Call
USD
30.00
1/17/14
8,805,030
—
17,343,990
Boeing Co.
Goldman Sachs Group, Inc.
Call
USD
110.00
1/17/14
2,608,897
—
1,913,989
Boston Scientific Corp.
Goldman Sachs Group, Inc.
Call
USD
10.00
1/17/14
7,370,136
—
961,700
Bristol-Myers Squibb Co.
Goldman Sachs Group, Inc.
Call
USD
50.00
1/17/14
7,304,916
—
564,823
Broadcom Corp.
Goldman Sachs Group, Inc.
Call
USD
55.00
1/17/14
3,913,348
—
272,983
Caterpillar, Inc.
Goldman Sachs Group, Inc.
Call
USD
135.00
1/17/14
4,239,461
—
311,066
Cisco Systems, Inc.
Goldman Sachs Group, Inc.
Call
USD
30.00
1/17/14
16,305,614
—
672,558
Citigroup, Inc.
Goldman Sachs Group, Inc.
Call
USD
50.00
1/17/14
16,305,614
—
44,192,078
Coeur Dalene Mines Corp.
Deutsche Bank AG
Call
USD
40.00
1/17/14
1,432,072
—
126,282
Corning, Inc.
Goldman Sachs Group, Inc.
Call
USD
20.00
1/17/14
8,152,805
—
468,811
Eldorado Gold Corp.
Deutsche Bank AG
Call
USD
25.00
1/17/14
4,249,752
—
33,718
EMC Corp.
Goldman Sachs Group, Inc.
Call
USD
40.00
1/17/14
11,413,929
—
234,819
Endeavour Silver Corp.
Deutsche Bank AG
Call
USD
20.00
1/17/14
1,137,913
—
7,774
First Majestic Silver Corp.
Deutsche Bank AG
Call
USD
35.00
1/17/14
718,999
—
80,165
Freeport-McMoRan Copper & Gold, Inc.
Goldman Sachs Group, Inc.
Call
USD
65.00
1/17/14
8,805,030
—
238,590
General Electric Co.
Goldman Sachs Group, Inc.
Call
USD
35.00
1/17/14
16,305,614
—
116,585
Gold Fields Ltd.
Deutsche Bank AG
Call
USD
22.00
1/17/14
8,785,724
—
8,689
Halliburton Co.
Goldman Sachs Group, Inc.
Call
USD
55.00
1/17/14
6,196,133
—
3,117,962
Harmony Gold Mining Co., Ltd.
Deutsche Bank AG
Call
USD
15.00
1/17/14
2,240,815
—
133,116
Hewlett-Packard Co.
Goldman Sachs Group, Inc.
Call
USD
30.00
1/17/14
16,305,614
—
3,540,568
Humana, Inc.
Goldman Sachs Group, Inc.
Call
USD
105.00
1/17/14
1,304,451
—
369,156
IAMGOLD Corp.
Deutsche Bank AG
Call
USD
30.00
1/17/14
3,779,488
—
17,314
Intel Corp.
Goldman Sachs Group, Inc.
Call
USD
40.00
1/17/14
16,305,614
—
226,534
International Business Machines Co.
Goldman Sachs Group, Inc.
Call
USD
295.00
1/17/14
1,695,784
—
49,503
J.C. Penney Co., Inc.
Goldman Sachs Group, Inc.
Call
USD
55.00
1/17/14
4,565,570
—
104,488
JPMorgan Chase & Co.
Goldman Sachs Group, Inc.
Call
USD
60.00
1/17/14
16,305,614
—
3,488,521
Kinross Gold Corp.
Deutsche Bank AG
Call
USD
20.00
1/17/14
16,269,858
—
442,833
Las Vegas Sands Corp.
Goldman Sachs Group, Inc.
Call
USD
77.25
1/17/14
5,870,020
—
3,645,130
Lowes Cos.
Goldman Sachs Group, Inc.
Call
USD
45.00
1/17/14
13,044,491
—
10,468,778
Marvell Technology Group Ltd.
Goldman Sachs Group, Inc.
Call
USD
20.00
1/17/14
9,457,255
—
70,021
Mastercard, Inc.
Goldman Sachs Group, Inc.
Call
USD
660.00
1/17/14
489,168
—
2,822,077
McDonalds Corp.
Goldman Sachs Group, Inc.
Call
USD
135.00
1/17/14
2,935,011
—
141,488
Microsoft Corp.
Goldman Sachs Group, Inc.
Call
USD
45.00
1/17/14
16,305,614
—
1,238,036
Monster Beverage Corp.
Goldman Sachs Group, Inc.
Call
USD
105.00
1/17/14
2,282,786
—
281,541
See Notes to Consolidated Financial Statements.
20
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
Consolidated Schedule of Investments (continued)
Over-the-counter options purchased as of April 30, 2013 were as follows (concluded):
Description
Counterparty
Put/ Call
Strike Price
Expiration Date
Contracts
Notional Amount (000)
Market Value
NetApp, Inc.
Goldman Sachs Group, Inc.
Call
USD
60.00
1/17/14
5,348,241
—
$
306,347
New Gold, Inc.
Deutsche Bank AG
Call
USD
22.00
1/17/14
2,410,542
—
47,970
Novagold Resources, Inc.
Deutsche Bank AG
Call
USD
12.00
1/17/14
2,227,608
—
379
Pan American Silver Corp.
Deutsche Bank AG
Call
USD
50.00
1/17/14
4,064,342
—
4,142
priceline.com, Inc.
Goldman Sachs Group, Inc.
Call
USD
1,000.00
1/17/14
652,224
—
3,400,979
Qualcomm, Inc.
Goldman Sachs Group, Inc.
Call
USD
95.00
1/17/14
6,522,244
—
413,067
Randgold Resources Ltd.
Deutsche Bank AG
Call
USD
165.00
1/17/14
548,619
—
89,446
Royal Gold, Inc.
Deutsche Bank AG
Call
USD
125.00
1/17/14
540,616
—
59,210
Safeway, Inc.
Goldman Sachs Group, Inc.
Call
USD
25.00
1/17/14
3,913,348
—
4,389,524
Seabridge Gold, Inc.
Deutsche Bank AG
Call
USD
30.00
1/17/14
355,983
—
45,372
Silver Standard Resources, Inc.
Deutsche Bank AG
Call
USD
30.00
1/17/14
995,065
—
2,150
Silver Wheaton Corp.
Deutsche Bank AG
Call
USD
55.00
1/17/14
4,081,653
—
609,758
Silvercorp Metals, Inc.
Deutsche Bank AG
Call
USD
15.00
1/17/14
2,321,188
—
1,634
Staples, Inc.
Goldman Sachs Group, Inc.
Call
USD
20.00
1/17/14
14,348,940
—
912,923
Starwood Hotels & Resort Worldwide, Inc.
Goldman Sachs Group, Inc.
Call
USD
85.00
1/17/14
978,336
—
349,185
Stillwater Mining Co.
Deutsche Bank AG
Call
USD
25.00
1/17/14
2,603,178
—
206,703
United Technologies Corp.
Goldman Sachs Group, Inc.
Call
USD
120.00
1/17/14
2,478,453
—
184,342
UnitedHealth Group, Inc.
Goldman Sachs Group, Inc.
Call
USD
85.00
1/17/14
3,261,124
—
324,658
Visa, Inc.
Goldman Sachs Group, Inc.
Call
USD
190.00
1/17/14
1,500,116
—
5,496,719
Western Union Co.
Goldman Sachs Group, Inc.
Call
USD
25.00
1/17/14
2,282,786
—
12,717
Yahoo!, Inc.
Goldman Sachs Group, Inc.
Call
USD
25.00
1/17/14
11,413,928
—
25,776,256
Yamana Gold, Inc.
Deutsche Bank AG
Call
USD
30.00
1/17/14
9,769,855
—
515,926
Yum! Brands, Inc.
Goldman Sachs Group, Inc.
Call
USD
100.00
1/17/14
2,282,786
—
150,920
Apple, Inc.
Goldman Sachs Group, Inc.
Call
USD
410.00
2/21/14
509,966
—
28,169,451
Nikkei 225 Index
BNP Paribas SA
Call
JPY
9,685.15
3/14/14
15,137
—
67,695,901
KOSPI Index
Citigroup, Inc.
Put
USD
243.53
12/12/13
3,516
—
2,535,036
Russell 2000 Index
JPMorgan Chase & Co.
Put
USD
890.00
5/17/13
144,075
—
332,961
S&P 500 Index
Bank of America Corp.
Put
USD
1,520.00
5/17/13
88,710
—
182,580
S&P 500 Index
Credit Suisse Group AG
Put
USD
1,550.00
5/17/13
180,295
—
785,638
S&P 500 Index
Goldman Sachs Group, Inc.
Put
USD
1,520.28
5/17/13
132,268
—
274,056
EUR Currency
Credit Suisse Group AG
Put
USD
1.20
6/03/13
—
EUR 398,853
4,727
Russell 2000 Index
BNP Paribas SA
Put
USD
884.71
6/21/13
214,409
—
1,782,272
S&P 500 Index
Citigroup, Inc.
Put
USD
1,555.45
6/21/13
121,946
—
2,077,049
S&P 500 Index
Deutsche Bank AG
Put
USD
1,513.22
6/21/13
171,878
—
1,658,928
S&P 500 Index
JPMorgan Chase & Co.
Put
USD
1,555.06
6/21/13
121,975
—
2,066,423
Total
$
507,244,038
•
Over-the-counter interest rate swaptions purchased as of April 30, 2013 were as follows:
Description
Counterparty
Put/ Call
Exercise Rate
Pay/ Receive Exercise Rate
Floating Rate Index
Expiration Date
Notional Amount (000)
Market Value
5-Year Interest Rate Swap
Deutsche Bank AG
Put
1.07%
Pay
6-month JPY LIBOR
4/04/18
JPY
12,865,665
$
2,757,745
•
Exchange-Traded options written as of April 30, 2013 were as follows:
Description
Put/ Call
Strike Price
Expiration Date
Contracts
Market Value
Tiffany & Co.
Call
USD
65.00
5/18/13
5,503
$
(4,773,852
)
Kraft Foods Group, Inc.
Call
USD
47.50
6/22/13
9,741
(4,188,630
)
The Procter & Gamble Co.
Call
USD
72.50
7/20/13
21,478
(10,792,695
)
Marathon Petroleum Corp.
Call
USD
77.50
7/20/13
12,782
(6,391,000
)
Humana, Inc.
Call
USD
75.00
8/17/13
7,464
(2,948,280
)
Corning, Inc.
Call
USD
14.00
8/17/13
40,616
(3,919,444
)
Fusion-io, Inc.
Call
USD
24.00
9/21/13
16,626
(1,288,515
)
Williams Sonoma, Inc.
Call
USD
52.50
1/18/14
3,444
(1,859,760
)
Williams Sonoma, Inc.
Call
USD
55.00
1/18/14
2,483
(1,030,445
)
S&P 500 Index
Put
USD
1,475.00
5/18/13
2,506
(231,805
)
Total
$
(37,424,426
)
See Notes to Consolidated Financial Statements.
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
21
Consolidated Schedule of Investments (continued)
•
Over-the-counter barrier options written as of April 30, 2013 were as follows:
Description
Counterparty
Strike Price
Barrier Price
Expiration Date
Contracts
Market Value
S&P 500 Index
Goldman Sachs Group, Inc.
USD
1,427.20
USD
1,365.15
5/17/13
132,268
$
(39,206
)
S&P 500 Index
Citigroup, Inc.
USD
1,460.21
USD
1,396.73
6/21/13
121,946
(600,316
)
Total
$
(639,522
)
•
Over-the-counter options written as of April 30, 2013 were as follows:
Description
Counterparty
Put/ Call
Strike Price
Expiration Date
Contracts
Notional Amount (000)
Market Value
Yahoo! Japan Corp.
Goldman Sachs Group, Inc.
Call
JPY
37,761.36
5/02/13
41,571
—
$
(4,786,121
)
Russell 2000 Index
JPMorgan Chase & Co.
Call
USD
975.00
5/17/13
144,075
—
(426,615
)
S&P 500 Index
Goldman Sachs Group, Inc.
Call
USD
1,628.87
5/17/13
132,268
—
(398,505
)
S&P 500 Volatility Index
Credit Suisse Group AG
Call
USD
25.00
5/22/13
1,301,000
—
(162,625
)
EUR Currency
Credit Suisse Group AG
Call
USD
1.40
6/03/13
—
EUR
398,853
(14,182
)
Topix Index
Goldman Sachs Group, Inc.
Call
JPY
1,079.66
6/14/13
268,831
—
(26,790,457
)
Russell 2000 Index
BNP Paribas SA
Call
USD
947.91
6/21/13
214,409
—
(4,942,265
)
S&P 500 Index
Citigroup, Inc.
Call
USD
1,666.55
6/21/13
121,946
—
(348,981
)
S&P 500 Index
Deutsche Bank AG
Call
USD
1,621.31
6/21/13
171,878
—
(2,482,116
)
S&P 500 Index
JPMorgan Chase & Co.
Call
USD
1,666.14
6/21/13
121,975
—
(355,216
)
Topix Index
Bank of America Corp.
Call
JPY
1,133.59
8/09/13
88,069
—
(6,914,877
)
Nikkei 225 Index
Citigroup, Inc.
Call
JPY
11,000.00
12/13/13
10,078
—
(31,486,749
)
Russell 2000 Index
JPMorgan Chase & Co.
Put
USD
825.00
5/17/13
144,075
—
(52,371
)
S&P 500 Index
Credit Suisse Group AG
Put
USD
1,450.00
5/17/13
180,295
—
(82,428
)
S&P 500 Index
Bank of America Corp.
Put
USD
1,420.00
5/17/13
88,710
—
(23,036
)
Topix Index
Goldman Sachs Group, Inc.
Put
JPY
921.18
6/14/13
268,831
—
(188,365
)
Russell 2000 Index
BNP Paribas SA
Put
USD
830.55
6/21/13
214,409
—
(670,381
)
S&P 500 Index
Deutsche Bank AG
Put
USD
1,405.13
6/21/13
171,878
—
(438,920
)
S&P 500 Index
JPMorgan Chase & Co.
Put
USD
1,443.99
6/21/13
121,975
—
(492,821
)
Topix Index
Bank of America Corp.
Put
USD
932.96
8/09/13
176,137
—
(824,378
)
Nikkei 225 Index
Citigroup, Inc.
Put
JPY
8,305.01
12/13/13
14,711
—
(551,117
)
Nikkei 225 Index
JPMorgan Chase & Co.
Put
JPY
8,592.09
12/13/13
14,701
—
(659,592
)
S&P 500 Index
Citigroup, Inc.
Put
USD
1,149.60
12/20/13
59,066
—
(356,007
)
Nikkei 225 Index
BNP Paribas SA
Put
JPY
9,300.00
3/14/14
15,137
—
(416,490
)
Total
$
(83,864,615
)
•
Interest rate swaps outstanding as of April 30, 2013 were as follows:
Fixed Rate
Floating Rate
Counterparty
Expiration Date
Notional Amount (000)
Unrealized Appreciation (Depreciation)
0.54%1
3-Month LIBOR
Deutsche Bank AG
9/14/15
USD
331,515
$(909,744)
0.50%1
3-Month LIBOR
JPMorgan Chase & Co.
9/17/15
USD
332,174
(638,240)
0.76%1
6-Month GBP LIBOR
Deutsche Bank AG
2/28/16
GBP
161,965
(342,387)
1.28%2
3-Month LIBOR
UBS AG
6/22/16
USD
155,843
852,179
1.30%2
3-Month LIBOR
Deutsche Bank AG
8/17/16
USD
7,210
36,628
1.01%2
3-Month LIBOR
Deutsche Bank AG
9/27/16
USD
1,268,265
2,184,586
1.00%2
3-Month LIBOR
Goldman Sachs Group, Inc.
9/28/16
USD
1,322,240
2,098,659
1.24%2
3-Month LIBOR
Deutsche Bank AG
9/14/18
USD
132,490
1,734,457
1.19%2
3-Month LIBOR
JPMorgan Chase & Co.
9/17/18
USD
135,010
1,382,200
1.40%2
6-Month GBP LIBOR
Deutsche Bank AG
2/28/19
GBP
64,781
1,120,251
1.95%2
3-Month LIBOR
Deutsche Bank AG
4/12/23
USD
84,756
862,140
Total
$8,380,729
1
Fund pays the fixed rate and receives the floating rate.
2
Fund pays the floating rate and receives the fixed rate.
See Notes to Consolidated Financial Statements.
22
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
Consolidated Schedule of Investments (continued)
•
Total return swaps outstanding as of April 30, 2013 were as follows:
Reference Entity
Fixed Amount
Counterparty
Expiration Date
Contract Amount (000)
Unrealized Appreciation
SGX Nikkei Stock Average Dividend Point Index Futures December 2013
JPY 2,500,656,2001
Citigroup, Inc.
3/31/14
JPY
15,260
$
9,854,226
1
Fund receives the total return of the referenced entity and pays the fixed amount. Net payment at termination.
•
Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows:
•
Level 1 — unadjusted price quotations in active markets/exchanges for identical assets and liabilities that the Fund has the ability to access
•
Level 2 — other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)
•
Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instrumentsand other significant accounting policies, please refer to Note 1 of the Notes to Consolidated Financial Statements.
See Notes to Consolidated Financial Statements.
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
23
Consolidated Schedule of Investments (continued)
The following tables summarizes the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy as of April 30, 2013:
Level 1
Level 2
Level 3
Total
Assets:
Investments:
Long-Term Investments:
Common Stocks:
Argentina
$
34,262,683
—
—
$
34,262,683
Australia
—
$
186,864,438
—
186,864,438
Belgium
19,775,760
65,882,085
—
85,657,845
Brazil
681,446,163
—
—
681,446,163
Canada
1,251,259,692
—
—
1,251,259,692
Chile
21,326,874
—
—
21,326,874
China
39,974,620
221,570,772
—
261,545,392
Denmark
—
17,205,089
—
17,205,089
France
145,445,235
899,469,003
—
1,044,914,238
Germany
—
1,154,544,135
—
1,154,544,135
Hong Kong
—
82,236,894
—
82,236,894
Indonesia
—
19,326,284
—
19,326,284
Ireland
110,785,495
—
—
110,785,495
Israel
6,498,828
—
—
6,498,828
Italy
—
410,659,844
—
410,659,844
Japan
—
4,366,817,035
—
4,366,817,035
Kazakhstan
58,335,867
—
—
58,335,867
Luxembourg
58,727,036
—
—
58,727,036
Malaysia
34,027,936
187,536,899
—
221,564,835
Mexico
131,444,862
—
—
131,444,862
Netherlands
24,568,601
223,318,494
—
247,887,095
Peru
28,882,845
—
—
28,882,845
Philippines
26,518,482
—
—
26,518,482
Portugal
20,885,930
—
—
20,885,930
Russia
45,598,077
61,722,367
—
107,320,444
Singapore
—
321,523,602
—
321,523,602
South Africa
36,624,845
14,755,154
—
51,379,999
South Korea
16,430,405
499,820,203
—
516,250,608
Spain
14,734,890
154,989,705
—
169,724,595
Sweden
—
86,619,090
—
86,619,090
Switzerland
10,113,312
967,066,122
—
977,179,434
Taiwan
41,696,604
103,973,710
—
145,670,314
Thailand
191,778,317
—
—
191,778,317
United Arab Emirates
23,880,565
—
—
23,880,565
United Kingdom
365,138,243
1,447,270,882
$
50,513,506
1,862,922,631
United States
17,307,309,547
—
52,996,072
17,360,305,619
Corporate Bonds
—
3,390,597,358
284,887,620
3,675,484,978
Floating Rate Loan Interests
—
137,299,462
255,760,751
393,060,213
Foreign Agency Obligations
—
4,526,495,340
—
4,526,495,340
Non-Agency Mortgage-Backed Securities
—
68,003,822
—
68,003,822
US Treasury Obligations
—
3,060,278,785
—
3,060,278,785
Investment Companies
859,306,925
—
—
859,306,925
Preferred Securities
737,460,206
141,459,545
55,987,460
934,907,211
Rights
1,618,507
—
—
1,618,507
Warrants
2,781
2,791,518
—
2,794,299
Short-Term Securities:
Foreign Agency Obligations
—
986,140,735
—
986,140,735
Money Market Funds
8,546,227
422,648,288
—
431,194,515
Time Deposits
—
107,821,755
—
107,821,755
US Treasury Obligations
—
9,306,470,477
—
9,306,470,477
Options Purchased:
Equity contracts
9,209,411
507,239,311
—
516,448,722
Foreign currency exchange contracts
—
4,727
—
4,727
Interest rate contracts
—
2,757,745
—
2,757,745
Liabilities:
Investments:
Investments Sold Short
—
(139,514,664
)
—
(139,514,664
)
Total
$
22,363,615,771
$
34,013,666,011
$
700,145,409
$
57,077,427,191
See Notes to Consolidated Financial Statements.
24
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
Consolidated Schedule of Investments (concluded)
Level 1
Level 2
Level 3
Total
Derivatives Financial Instruments1
Assets:
Equity contracts
$
50,972,855
$
9,854,226
—
$
60,827,081
Foreign currency exchange contracts
—
89,939,026
—
89,939,026
Interest rate contracts
—
10,271,100
—
10,271,100
Liabilities:
Equity contracts
(50,168,848
)
(84,489,955
)
—
(134,658,803
)
Foreign currency exchange contracts
—
(67,981,907
)
—
(67,981,907
)
Interest rate contracts
—
(1,890,371
)
—
(1,890,371
)
Total
$
804,007
$
(44,297,881
)
—
$
(43,493,874
)
1
Derivative financial instruments are swaps, financial futures contracts, foreign currency exchange contracts and options written. Swaps, financial futures contracts and foreign currency exchange contracts are valued at unrealized appreciation/depreciation on the instrument and options written are shown at value.
Certain of the Fund’s assets and liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of April 30, 2013, such assets and liabilities are categorized within the disclosure hierarchy as follows:
Level 1
Level 2
Level 3
Total
Assets:
Foreign currency at value
$
7,162,640
—
—
$
7,162,640
Liabilities:
Bank overdraft
—
$
(6,239
)
—
(6,239
)
Cash received as collateral for swaps
—
(82,871,920
)
—
(82,871,920
)
Collateral on securities loaned at value
—
(422,648,288
)
—
(422,648,288
)
Total
$
7,162,640
$
(505,526,447
)
—
$
(498,363,807
)
There were no transfers between levels during the six months ended April 30, 2013.
Certain of the Fund’s investments are categorized as Level 3 and were valued utilizing transaction prices or third party pricing information without adjustment. Such valuations are based on unobservable inputs. A significant change in the unobservable inputs could result in a significantly lower or higher value in such Level 3 investments.
The following table is a reconciliation of Level 3 investments for which significant unobservable inputs were used in determining fair value:
Common Stocks
Corporate Bonds
Floating Rate Loan Interests
Preferred Securities
Total
Assets:
Opening Balance, as of October 31, 2012
$
40,439,364
$
274,379,189
$
144,427,482
—
$
459,246,035
Transfers into Level 32
—
6,181,220
95,472,000
—
101,653,220
Transfers out of Level 32
—
—
—
��
—
—
Accrued discounts/premiums
—
(33,992
)
404,888
—
370,896
Net realized gain (loss)
(31,175,834
)
(202,122
)
185,769
—
(31,192,187
)
Net change in unrealized appreciation/depreciation3
41,356,767
869,627
7,985,257
$
(1,294
)
50,210,357
Purchases
52,889,281
4,591,576
20,161,877
55,988,754
133,631,488
Sales
—
(897,878
)
(12,876,522
)
—
(13,774,400
)
Closing Balance, as of April 30, 2013
$
103,509,578
$
284,887,620
$
255,760,751
$
55,987,460
$
700,145,409
2
Included in the related net change in unrealized appreciation/depreciation in the Consolidated Statement of Operations. Transfers into and transfers out of Level 3 represent the values as of the beginning of the reporting period.
3
Included in the related net change in unrealized appreciation/depreciation in the Consolidated Statement of Operations. The change in unrealized appreciation/depreciation on investments still held as of April 30, 2013 was $19,034,548
See Notes to Consolidated Financial Statements.
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
25
Consolidated Statement of Assets and Liabilities
April 30, 2013 (Unaudited)
Assets
Investments at value — unaffiliated (including securities loaned at value of $391,807,643) (cost — $47,614,692,496)
$
55,988,561,196
Investments at value — affiliated (cost — $594,200,852)
1,228,380,659
Investments sold receivable
341,309,819
Interest receivable
123,900,731
Capital shares sold receivable
91,712,470
Unrealized appreciation on foreign currency exchange contracts
89,939,026
Dividends receivable
87,649,732
Options written receivable
61,689,658
Unrealized appreciation on swaps
20,125,326
Foreign currency at value (cost — $7,193,200)
7,162,640
Securities lending income receivable — affiliated
344,644
Prepaid expenses
278,489
Total assets
58,041,054,390
Liabilities
Collateral on securities loaned at value
422,648,288
Bank overdraft
6,239
Investments purchased payable
1,102,095,104
Investments sold short at value (proceeds — $126,990,657)
139,514,664
Options written at value (premiums received — $79,945,196)
121,928,563
Capital shares redeemed payable
104,367,461
Cash received as collateral for swaps
82,871,920
Unrealized depreciation on foreign currency exchange contracts
67,967,725
Investment advisory fees payable
30,068,310
Service and distribution fees payable
17,365,877
Variation margin payable
2,143,764
Unrealized depreciation on swaps
1,890,371
Swaps payable
1,572,039
Dividends on short sales payable
314,308
Other affiliates payable
285,367
Officer’s and Directors’ fees payable
82,445
Other accrued expenses payable
17,048,874
Total liabilities
2,112,171,319
Net Assets
$
55,928,883,071
Net Assets Consist of
Paid-in capital
$
46,057,311,346
Distributions in excess of net investment income
(76,691,092
)
Accumulated net realized gain
916,777,842
Net unrealized appreciation/depreciation
9,031,484,975
Net Assets
$
55,928,883,071
Net Asset Value
Institutional — Based on net assets of $20,190,602,716 and 954,983,788 shares outstanding, 2 billion shares authorized, $0.10 par value
$
21.14
Investor A — Based on net assets of $18,146,825,121 and 862,817,097 shares outstanding, 2 billion shares authorized, $0.10 par value
$
21.03
Investor B — Based on net assets of $580,745,303 and 28,311,501 shares outstanding, 1.5 billion shares authorized, $0.10 par value
$
20.51
Investor C — Based on net assets of $15,744,976,871 and 805,991,192 shares outstanding, 2 billion shares authorized, $0.10 par value
$
19.53
Class R — Based on net assets of $1,265,733,060 and 62,312,091 shares outstanding, 2 billion shares authorized, $0.10 par value
$
20.31
See Notes to Consolidated Financial Statements.
26
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
Consolidated Statement of Operations
Six Months Ended April 30, 2013 (Unaudited)
Investment Income
Dividends — unaffiliated
$
390,984,955
Foreign taxes withheld
(16,326,628
)
Interest
218,792,033
Securities lending — affiliated — net
1,393,901
Dividends — affiliated
3,904
Total income
594,848,165
Expenses
Investment advisory
200,486,405
Service — Investor A
21,792,648
Service and distribution — Investor B
3,096,244
Service and distribution — Investor C
76,102,453
Service and distribution — Class R
2,985,805
Transfer agent — Institutional
7,251,043
Transfer agent — Investor A
8,884,207
Transfer agent — Investor B
582,340
Transfer agent — Investor C
8,239,844
Transfer agent — Class R
1,130,038
Custodian
3,920,033
Accounting services
2,775,017
Professional
636,774
Officer and Directors
494,235
Registration
362,433
Printing
358,162
Miscellaneous
394,214
Total expenses excluding interest expense, dividend expense and stock loan fees
339,491,895
Interest expense
96,279
Dividend expense
322,371
Stock loan fees
81,443
Total expenses
339,991,988
Less fees waived by Manager
(22,604,475
)
Total expenses after fees waived
317,387,513
Net investment income
277,460,652
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from:
Investments — unaffiliated
1,338,908,942
Investments — affiliated
15,539,620
Financial futures contracts
10,410,902
Foreign currency transactions
137,533,842
Options written
92,106,537
Swaps
(3,275,405
)
1,591,224,438
Net change in unrealized appreciation/depreciation on:
Investments
2,673,615,868
Financial futures contracts
13,878,828
Foreign currency translations
49,254,254
Options written
(84,509,917
)
Swaps
7,953,924
Short sales
(12,524,007
)
2,647,668,950
Total realized and unrealized gain
4,238,893,388
Net Increase in Net Assets Resulting from Operations
$
4,516,354,040
See Notes to Consolidated Financial Statements.
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
27
Consolidated Statements of Changes in Net Assets
Increase (Decrease) in Net Assets:
Six Months Ended April 30, 2013 (Unaudited)
Year Ended October 31, 2012
Operations
Net investment income
$
277,460,652
$
627,731,294
Net realized gain (loss)
1,591,224,438
(344,915,308
)
Net change in unrealized appreciation/depreciation
2,647,668,950
2,125,892,469
Net increase in net assets resulting from operations
4,516,354,040
2,408,708,455
Dividends and Distributions to Shareholders From
Net investment income:
InstitutionaI
(127,397,128
)
(345,855,589
)1
Investor A
(93,490,561
)
(297,480,891
)1
Investor B
(857,229
)
(6,902,310
)1
Investor C
(33,697,742
)
(169,522,537
)1
Class R
(4,557,954
)
(15,982,057
)1
Net realized gain:
Institutional
—
(167,694,664
)1
Investor A
—
(174,007,263
)1
Investor B
—
(8,970,948
)1
Investor C
—
(167,603,674
)1
Class R
—
(11,135,762
)1
Decrease in net assets resulting from dividends and distributions to shareholders
(260,000,614
)
(1,365,155,695
)
Capital Share Transactions
Net decrease in net assets derived from capital share transactions
(1,288,388,327
)
(461,753,985
)
Net Assets
Total increase in net assets
2,967,965,099
581,798,775
Beginning of period
52,960,917,972
52,379,119,197
End of period
$
55,928,883,071
$
52,960,917,972
Distributions in excess of net investment income
$
(76,691,092
)
$
(94,151,130
)
1
Dividends and distributions are determined in accordance with federal income tax regulations.
See Notes to Consolidated Financial Statements.
28
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
Financial Highlights
Institutional
Six Months Ended April 30, 2013 (Unaudited)1
Year Ended October 31,
20121
20111
20101
20091
2008
Per Share Operating Performance
Net asset value, beginning of period
$
19.54
$
19.16
$
19.07
$
17.42
$
15.20
$
21.30
Net investment income2
0.15
0.31
0.38
0.33
0.35
0.34
Net realized and unrealized gain (loss)
1.58
0.64
0.08
3
1.65
3
2.61
3
(5.10
)3
Net increase (decrease) from investment operations
1.73
0.95
0.46
1.98
2.96
(4.76
)
Dividends and distributions from:
Net investment income
(0.13
)
(0.38
)4
(0.37
)4
(0.33
)4
(0.74
)4
(0.52
)4
Net realized gain
—
(0.19
)4
—
—
—
(0.82
)4
Total dividends and distributions
(0.13
)
(0.57
)
(0.37
)
(0.33
)
(0.74
)
(1.34
)
Net asset value, end of period
$
21.14
$
19.54
$
19.16
$
19.07
$
17.42
$
15.20
Total Investment Return5
Based on net asset value
8.93
%6
5.20
%
2.39
%
11.54
%
20.43
%
(23.73
)%
Ratios to Average Net Assets
Total expenses
0.86
%7
0.87
%
0.87
%
0.88
%
0.91
%
0.95
%
Total expenses after fees waived and paid indirectly
0.78
%7
0.79
%
0.78
%
0.81
%
0.87
%
0.86
%
Total expenses after fees waived and paid indirectly and excluding dividend expense
0.78
%7,8
0.79
%8
0.78
%8
0.81
%
0.85
%
0.80
%
Net investment income
1.45
%7
1.61
%
1.92
%
1.83
%
2.26
%
1.78
%
Supplemental Data
Net assets, end of period (000)
$
20,190,603
$
18,657,773
$
16,879,389
$
12,894,088
$
8,066,571
$
5,091,181
Portfolio turnover
22
%
39
%
31
%
29
%
33
%
34
%
1
Consolidated Financial Highlights.
2
Based on average shares outstanding.
3
Includes a redemption fee, which is less than $0.01 per share.
4
Dividends and distributions are determined in accordance with federal income tax regulations.
5
Where applicable, total investment returns include the reinvestment of dividends and distributions.
6
Aggregate total investment return.
7
Annualized.
8
Excludes stock loan fees and interest expense, which had no impact to the ratio.
See Notes to Consolidated Financial Statements.
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
29
Financial Highlights (continued)
Investor A
Six Months Ended April 30, 2013 (Unaudited)1
Year Ended October 31,
20121
20111
20101
20091
2008
Per Share Operating Performance
Net asset value, beginning of period
$
19.44
$
19.06
$
18.97
$
17.34
$
15.13
$
21.22
Net investment income2
0.12
0.25
0.32
0.28
0.31
0.29
Net realized and unrealized gain (loss)
1.58
0.65
0.09
3
1.64
3
2.60
3
(5.09
)3
Net increase (decrease) from investment operations
1.70
0.90
0.41
1.92
2.91
(4.80
)
Dividends and distributions from:
Net investment income
(0.11
)
(0.33
)4
(0.32
)4
(0.29
)4
(0.70
)4
(0.47
)4
Net realized gain
—
(0.19
)4
—
—
—
(0.82
)4
Total dividends and distributions
(0.11
)
(0.52
)
(0.32
)
(0.29
)
(0.70
)
(1.29
)
Net asset value, end of period
$
21.03
$
19.44
$
19.06
$
18.97
$
17.34
$
15.13
Total Investment Return5
Based on net asset value
8.77
%6
4.92
%
2.13
%
11.20
%
20.14
%
(23.96
)%
Ratios to Average Net Assets
Total expenses
1.14
%7
1.15
%
1.14
%
1.15
%
1.18
%
1.20
%
Total expenses after fees waived and paid indirectly
1.05
%7
1.07
%
1.06
%
1.08
%
1.13
%
1.12
%
Total expenses after fees waived and paid indirectly and excluding dividend expense
1.05
%7,8
1.07
%8
1.06
%8
1.08
%
1.12
%
1.06
%
Net investment income
1.17
%7
1.33
%
1.63
%
1.56
%
2.00
%
1.52
%
Supplemental Data
Net assets, end of period (000)
$
18,146,825
$
17,292,587
$
17,638,914
$
15,724,095
$
11,844,981
$
8,387,965
Portfolio turnover
22
%
39
%
31
%
29
%
33
%
34
%
1
Consolidated Financial Highlights.
2
Based on average shares outstanding.
3
Includes a redemption fee, which is less than $0.01 per share.
4
Dividends and distributions are determined in accordance with federal income tax regulations.
5
Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.
6
Aggregate total investment return.
7
Annualized.
8
Excludes stock loan fees and interest expense, which had no impact to the ratio.
See Notes to Consolidated Financial Statements.
30
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
Financial Highlights (continued)
Investor B
Six Months Ended April 30, 2013 (Unaudited)1
Year Ended October 31,
20121
20111
20101
20091
2008
Per Share Operating Performance
Net asset value, beginning of period
$
18.96
$
18.57
$
18.49
$
16.91
$
14.76
$
20.72
Net investment income2
—
0.09
0.10
0.13
0.18
0.13
Net realized and unrealized gain (loss)
1.59
0.65
0.14
3
1.61
3
2.53
3
(4.97
)3
Net increase (decrease) from investment operations
1.59
0.74
0.24
1.74
2.71
(4.84
)
Dividends and distributions from:
Net investment income
(0.04
)
(0.16
)4
(0.16
)4
(0.16
)4
(0.56
)4
(0.30
)4
Net realized gain
—
(0.19
)4
—
—
—
(0.82
)4
Total dividends and distributions
(0.04
)
(0.35
)
(0.16
)
(0.16
)
(0.56
)
(1.12
)
Net asset value, end of period
$
20.51
$
18.96
$
18.57
$
18.49
$
16.91
$
14.76
Total Investment Return5
Based on net asset value
8.32
%6
4.10
%
1.25
%
10.35
%
19.15
%
(24.57
)%
Ratios to Average Net Assets
Total expenses
1.98
%7
1.95
%
1.97
%
1.96
%
2.00
%
2.01
%
Total expenses after fees waived and paid indirectly
1.89
%7
1.86
%
1.87
%
1.89
%
1.95
%
1.92
%
Total expenses after fees waived and paid indirectly and excluding dividend expense
1.89
%7,8
1.86
%8
1.87
%8
1.89
%
1.94
%
1.86
%
Net investment income
0.32
%7
0.51
%
0.50
%
0.74
%
1.17
%
0.70
%
Supplemental Data
Net assets, end of period (000)
$
580,745
$
660,370
$
930,028
$
1,209,744
$ 1,442,397
$
1,514,668
Portfolio turnover
22
%
39
%
31
%
29
%
33
%
34
%
1
Consolidated Financial Highlights.
2
Based on average shares outstanding.
3
Includes a redemption fee, which is less than $0.01 per share.
4
Dividends and distributions are determined in accordance with federal income tax regulations.
5
Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.
6
Aggregate total investment return.
7
Annualized.
8
Excludes stock loan fees and interest expense, which had no impact to the ratio.
See Notes to Consolidated Financial Statements.
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
31
Financial Highlights (continued)
Investor C
Six Months Ended April 30, 2013 (Unaudited)1
Year Ended October 31,
20121
20111
20101
20091
2008
Per Share Operating Performance
Net asset value, beginning of period
$
18.06
$
17.75
$
17.70
$
16.21
$
14.19
$
19.99
Net investment income2
0.98
0.10
0.16
0.13
0.18
0.14
Net realized and unrealized gain (loss)
0.52
0.59
0.08
3
1.54
3
2.43
3
(4.78
)3
Net increase (decrease) from investment operations
1.50
0.69
0.24
1.67
2.61
(4.64
)
Dividends and distributions from:
Net investment income
(0.03
)
(0.19
)4
(0.19
)4
(0.18
)4
(0.59
)4
(0.34
)4
Net realized gain
—
(0.19
)4
—
—
—
(0.82
)4
Total dividends and distributions
(0.03
)
(0.38
)
(0.19
)
(0.18
)
(0.59
)
(1.16
)
Net asset value, end of period
$
19.53
$
18.06
$
17.75
$
17.70
$
16.21
$
14.19
Total Investment Return5
Based on net asset value
8.38
%6
4.08
%
1.34
%
10.37
%
19.24
%
(24.51
)%
Ratios to Average Net Assets
Total expenses
1.90
%7
1.90
%
1.90
%
1.91
%
1.94
%
1.96
%
Total expenses after fees waived and paid indirectly
1.81
%7
1.82
%
1.81
%
1.84
%
1.89
%
1.88
%
Total expenses after fees waived and paid indirectly and excluding dividend expense
1.81
%7,8
1.82
%8
1.81
%8
1.84
%
1.88
%
1.81
%
Net investment income
0.41
%7
0.58
%
0.89
%
0.81
%
1.23
%
0.76
%
Supplemental Data
Net assets, end of period (000)
$
15,744,977
$
15,179,009
$
15,853,615
$
14,921,531
$
11,251,502
$
8,157,355
Portfolio turnover
22
%
39
%
31
%
29
%
33
%
34
%
1
Consolidated Financial Highlights.
2
Based on average shares outstanding.
3
Includes a redemption fee, which is less than $0.01 per share.
4
Dividends and distributions are determined in accordance with federal income tax regulations.
5
Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.
6
Aggregate total investment return.
7
Annualized.
8
Excludes stock loan fees and interest expense, which had no impact to the ratio.
See Notes to Consolidated Financial Statements.
32
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
Financial Highlights (concluded)
Class R
Six Months Ended April 30, 2013 (Unaudited)1
Year Ended October 31,
20121
20111
20101
20091
2008
Per Share Operating Performance
Net asset value, beginning of period
$
18.78
$
18.44
$
18.36
$
16.80
$
14.69
$
20.65
Net investment income2
0.08
0.18
0.21
0.21
0.25
0.22
Net realized and unrealized gain (loss)
1.52
0.62
0.13
3
1.59
3
2.51
3
(4.94
)3
Net increase (decrease) from investment operations
1.60
0.80
0.34
1.80
2.76
(4.72
)
Dividends and distributions from:
Net investment income
(0.07
)
(0.27
)4
(0.26
)4
(0.24
)4
(0.65
)4
(0.42
)4
Net realized gain
—
(0.19
)4
—
—
—
(0.82
)4
Total dividends and distributions
(0.07
)
(0.46
)
(0.26
)
(0.24
)
(0.65
)
(1.24
)
Net asset value, end of period
$
20.31
$
18.78
$
18.44
$
18.36
$
16.80
$
14.69
Total Investment Return5
Based on net asset value
8.57
%6
4.52
%
1.84
%
10.83
%
19.67
%
(24.21
)%
Ratios to Average Net Assets
Total expenses
1.48
%7
1.51
%
1.47
%
1.49
%
1.54
%
1.55
%
Total expenses after fees waived and paid indirectly
1.39
%7
1.43
%
1.38
%
1.42
%
1.49
%
1.46
%
Total expenses after fees waived and paid indirectly and excluding dividend expense
1.39
%7,8
1.43
%8
1.38
%8
1.42
%
1.48
%
1.40
%
Net investment income
0.84
%7
0.97
%
1.11
%
1.22
%
1.65
%
1.18
%
Supplemental Data
Net assets, end of period (000)
$
1,265,733
$
1,171,179
$
1,077,174
$
926,471
$
576,189
$
371,196
Portfolio turnover
22
%
39
%
31
%
29
%
33
%
34
%
1
Consolidated Financial Highlights.
2
Based on average shares outstanding.
3
Includes a redemption fee, which is less than $0.01 per share.
4
Dividends and distributions are determined in accordance with federal income tax regulations.
5
Where applicable, total investment returns include the reinvestment of dividends and distributions.
6
Aggregate total investment return.
7
Annualized.
8
Excludes stock loan fees and interest expense, which had no impact to the ratio.
See Notes to Consolidated Financial Statements.
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
33
Notes to Consolidated Financial Statements (Unaudited)
1. Organization and Significant Accounting Policies:
BlackRock Global Allocation Fund, Inc. (the “Fund”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a diversified, open-end management investment company. The Fund is organized as a Maryland Corporation. The Fund’s consolidated 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 of assets and liabilities in the consolidated financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The Fund offers multiple classes of shares. Institutional 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 and Investor C Shares may be subject to a CDSC. Class R Shares are sold without a sales charge and only to certain employee-sponsored 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 Investor A, Investor B, Investor C and Class R Shares bear certain expenses related to the shareholder servicing of such shares, and Investor B, Investor C 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 Shares are only available through exchanges and dividend reinvestments by existing shareholders and for purchase by certain qualified employee-sponsored retirement 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).
The following is a summary of significant accounting policies followed by the Fund:
Basis of Consolidation: The accompanying consolidated financial statements include the accounts of BlackRock Cayman Global Allocation Fund I, Ltd. (the “Subsidiary”), which is a wholly owned subsidiary of the Fund and which primarily invests in commodity-related instruments and other derivatives. The Subsidiary enables the Fund to hold these commodity-related instruments and other derivatives and still satisfy Regulated Investment Company (“RIC”) tax requirements. The Fund may invest up to 25% of its total assets in the Subsidiary. Intercompany accounts and transactions, if any, have been eliminated. The Subsidiary is subject to the same investment policies and restrictions that apply to the Fund.
Valuation: US GAAP defines fair value as the price the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund determines the fair values of its financial instruments at market value using independent dealers or pricing services under policies approved by the Board of Directors of the Fund (the “Board”). The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to provide oversight of the pricing function for the Fund for all financial instruments. 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. The Fund values its bond investments on the basis of last available bid prices or current market quotations provided by dealers or pricing services. Floating rate loan interests are valued at the mean of the bid prices from one or more brokers or dealers as obtained from a pricing service. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments, various relationships observed in the market between investments and calculated yield measures. Asset-backed and mortgage-backed securities are valued by independent pricing services using models that consider estimated cash flows of each tranche of the security, establish a benchmark yield and develop an estimated tranche specific spread to the benchmark yield based on the unique attributes of the tranche. Financial futures contracts traded on exchanges are valued at their last sale price. Swap agreements are valued utilizing quotes received daily by the Fund’s pricing service or through brokers, which are derived using daily swap curves and models that incorporate a number of market data factors, such as discounted cash flows, trades and values of the underlying reference instruments. 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 Fund values its investments in BlackRock Liquidity Series, LLC Money Market Series (the “Money Market Series”) at fair value, which is ordinarily based upon its 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 Fund may withdraw up to 25% of
34
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
Notes to Consolidated Financial Statements (continued)
its 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.
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. An exchange-traded option for which there is no mean price is valued at the last 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 the prior day’s price no longer reflects the fair value of the option. Over-the-counter (“OTC”) options and swaptions are valued by an independent pricing service using a mathematical model, which incorporates a number of market data factors, such as the trades and prices of the underlying instruments.
In the event that application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the Global Valuation Committee, or its delegate, in accordance with a policy approved by the Board as reflecting fair value (“Fair Value Assets”). When determining the price for Fair Value Assets, the Global Valuation Committee, or its delegate, seeks to determine the price that the 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 Global Valuation Committee, or its delegate, deem relevant consistent with the principles of fair value measurement which include the market approach, income approach and/or in the case of recent investments, the cost approach, as appropriate. A market approach generally consists of using comparable market transactions. The income approach generally is used to discount future cash flows to present value and adjusted for liquidity as appropriate. These factors include but are not limited to: (i) attributes specific to the investment or asset; (ii) the principal market for the investment or asset; (iii) the customary participants in the principal market for the investment or asset; (iv) data assumptions by market participants for the investment or asset, if reasonably available; (v) quoted prices for similar investments or assets in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, recovery rates, liquidation amounts and/or default rates. Due to the inherent uncertainty of valuations of such investments, the fair values may differ from the values that would have been used had an active market existed. The Global Valuation Committee, or its delegate, employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Fund’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices and large movements in market values and reviews of any market related activity. The pricing of all Fair Value Assets is subsequently reported to the Board or a committee thereof on a quarterly basis.
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 the 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 affect the value of such instruments materially, those instruments may be Fair Value Assets and valued at their fair value, as determined in good faith by the Global Valuation Committee using a pricing service and/or policies approved by the Board. Each business day, the Fund uses 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.
Foreign Currency: The Fund’s 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 Fund’s investments denominated in that currency will lose value because that currency is worth fewer US dollars; the opposite effect occurs if the US dollar falls in relative value.
The Fund does 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 in the Consolidated Statement 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 Fund reports realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are treated as ordinary income for federal income tax purposes.
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
35
Notes to Consolidated Financial Statements (continued)
Asset-Backed and Mortgage-Backed Securities: The Fund may invest in asset-backed securities. Asset-backed securities are generally issued as pass-through certificates, which represent undivided fractional ownership interests in an underlying pool of assets, or as debt instruments, which are also known as collateralized obligations, and are generally issued as the debt of a special purpose entity organized solely for the purpose of owning such assets and issuing such debt. Asset-backed securities are often backed by a pool of assets representing the obligations of a number of different parties. The yield characteristics of certain asset-backed securities may differ from traditional debt securities. One such major difference is that all or a principal part of the obligations may be prepaid at any time because the underlying assets (i.e., loans) may be prepaid at any time. As a result, a decrease in interest rates in the market may result in increases in the level of prepayments as borrowers, particularly mortgagors, refinance and repay their loans. An increased prepayment rate with respect to an asset-backed security subject to such a prepayment feature will have the effect of shortening the maturity of the security. In addition, Fund may have to subsequently reinvest the proceeds at lower interest rates. If the Fund has purchased such an asset-backed security at a premium, a faster than anticipated prepayment rate could result in a loss of principal to the extent of the premium paid.
The Fund may purchase certain mortgage pass-through securities. There are a number of important differences among the agencies and instrumentalities of the US government that issue mortgage-related securities and among the securities that they issue. For example, mortgage-related securities guaranteed by Ginnie Mae are guaranteed as to the timely payment of principal and interest by Ginnie Mae and such guarantee is backed by the full faith and credit of the United States. However, mortgage-related securities issued by Freddie Mac and Fannie Mae, including Freddie Mac and Fannie Mae guaranteed mortgage pass-through certificates, which are solely the obligations of Freddie Mac and Fannie Mae, are not backed by or entitled to the full faith and credit of the United States but are supported by the right of the issuer to borrow from the Treasury.
Inflation-Indexed Bonds: The Fund may invest in inflation-indexed bonds. Inflation-indexed bonds are fixed income securities whose principal value is periodically adjusted according to the rate of inflation. If the index measuring inflation rises or falls, the principal value of inflation-indexed bonds will be adjusted upward or downward, and consequently the interest payable on these securities (calculated with respect to a larger or smaller principal amount) will be increased or reduced, respectively. Any upward or downward adjustment in the principal amount of an inflation-indexed bond will be included as interest income in the Consolidated Statement of Operations, even though investors do not receive their principal until maturity. Repayment of the original bond principal upon maturity (as adjusted for inflation) is guaranteed in the case of US Treasury inflation-indexed bonds. For bonds that do not provide a similar guarantee, the adjusted principal value of the bond repaid at maturity may be less than the original principal.
Multiple Class Pass-Through Securities: The Fund may invest in multiple class pass-through securities, including collateralized mortgage obligations (“CMOs”) and commercial mortgage-backed securities. These multiple class securities may be issued by Ginnie Mae, US government agencies or instrumentalities or by trusts formed by private originators of, or investors in, mortgage loans. In general, CMOs are debt obligations of a legal entity that are collateralized by, and multiple class pass-through securities represent direct ownership interests in, a pool of residential or commercial mortgage loans or mortgage pass-through securities (the “Mortgage Assets”), the payments on which are used to make payments on the CMOs or multiple pass-through securities. Classes of CMOs include interest only (“IOs”), principal only (“POs”), planned amortization classes and targeted amortization classes. IOs and POs are stripped mortgage-backed securities representing interests in a pool of mortgages, the cash flow from which has been separated into interest and principal components. IOs receive the interest portion of the cash flow while POs receive the principal portion. IOs and POs can be extremely volatile in response to changes in interest rates. As interest rates rise and fall, the value of IOs tends to move in the same direction as interest rates. POs perform best when prepayments on the underlying mortgages rise since this increases the rate at which the principal is returned and the yield to maturity on the PO. When payments on mortgages underlying a PO are slower than anticipated, the life of the PO is lengthened and the yield to maturity is reduced. If the underlying Mortgage Assets experience greater than anticipated pre-payments of principal, the Fund may not fully recoup its initial investment in IOs.
Zero-Coupon Bonds: The Fund may invest in zero-coupon bonds, which are normally issued at a significant discount from face value and do not provide for periodic interest payments. Zero-coupon bonds may experience greater volatility in market value than similar maturity debt obligations, which provide for regular interest payments.
Capital Trusts: The Fund may invest in capital trusts. These securities are typically issued by corporations, generally in the form of interest-bearing notes with preferred securities characteristics, or by an affiliated business trust of a corporation, generally in the form of beneficial interests in subordinated debentures or similarly structured securities. The securities can be structured as either fixed or adjustable coupon securities that can have either a perpetual or stated maturity date. Dividends can be deferred without creating an event of default or acceleration, although maturity cannot take place unless all cumulative payment obligations have been met. The deferral of payments does not affect the purchase or sale of these securities in the open market.
36
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
Notes to Consolidated Financial Statements (continued)
Payments on these securities are treated as interest rather than dividends for federal income tax purposes. These securities generally are rated below that of the issuing company’s senior debt securities.
Preferred Stock: The Fund may invest in preferred stock. Preferred stock has a preference over common stock in liquidation (and generally in receiving dividends as well) but is subordinated to the liabilities of the issuer in all respects. As a general rule, the market value of preferred stock with a fixed dividend rate and no conversion element varies inversely with interest rates and perceived credit risk, while the market price of convertible preferred stock generally also reflects some element of conversion value. Because preferred stock is junior to debt securities and other obligations of the issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a preferred stock than in a more senior debt security with similar stated yield characteristics. Unlike interest payments on debt securities, preferred stock dividends are payable only if declared by the issuer’s board of directors. Preferred stock also may be subject to optional or mandatory redemption provisions.
Floating Rate Loan Interests: The Fund may invest in floating rate loan interests. The floating rate loan interests the Fund holds are typically issued to companies (the “borrower”) by banks, other financial institutions, and privately and publicly offered corporations (the “lender”). Floating rate loan interests are generally non-investment grade, often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged. The Fund may invest in obligations of borrowers who are in bankruptcy proceedings. Floating rate loan interests may include fully funded term loans or revolving lines of credit. Floating rate loan interests are typically senior in the corporate capital structure of the borrower. Floating rate loan interests generally pay interest at rates that are periodically determined by reference to a base lending rate plus a premium. The base lending rates are generally the lending rate offered by one or more European banks, such as the London Interbank Offered Rate (“LIBOR”), the prime rate offered by one or more US banks or the certificate of deposit rate. Floating rate loan interests may involve foreign borrowers, and investments may be denominated in foreign currencies. The Fund considers these investments to be investments in debt securities for purposes of its investment policies.
When the Fund purchases a floating rate loan interest it may receive a facility fee and when it sells a floating rate loan interest it may pay a facility fee. On an ongoing basis, the Fund may receive a commitment fee based on the undrawn portion of the underlying line of credit amount of a floating rate loan interest. Facility and commitment fees are typically amortized to income over the term of the loan or term of the commitment, respectively. Consent and amendment fees are recorded to income as earned. Prepayment penalty fees, which may be received by the Fund upon the prepayment of a floating rate loan interest by a borrower, are recorded as realized gains. The Fund may invest in multiple series or tranches of a loan. A different series or tranche may have varying terms and carry different associated risks.
Floating rate loan interests are usually freely callable at the borrower’s option. The Fund may invest in such loans in the form of participations in loans (“Participations”) or assignments (“Assignments”) of all or a portion of loans from third parties. Participations typically will result in the Fund having a contractual relationship only with the lender, not with the borrower. The Fund will have the right to receive payments of principal, interest and any fees to which it is entitled only from the lender selling the Participation and only upon receipt by the lender of the payments from the borrower. In connection with purchasing Participations, the Fund generally will have no right to enforce compliance by the borrower with the terms of the loan agreement, nor any rights of offset against the borrower, and the Fund may not benefit directly from any collateral supporting the loan in which it has purchased the Participation. As a result, the Fund will assume the credit risk of both the borrower and the lender that is selling the Participation. The Fund’s investment in loan participation interests involves the risk of insolvency of the financial intermediaries who are parties to the transactions. In the event of the insolvency of the lender selling the Participation, the Fund may be treated as a general creditor of the lender and may not benefit from any offset between the lender and the borrower. Assignments typically result in the Fund having a direct contractual relationship with the borrower and the Fund may enforce compliance by the borrower with the terms of the loan agreement.
Short Sales: The Fund may enter into short sale transactions in which the Fund sells a security it does not hold in anticipation of a decline in the market price of that security. When the Fund makes a short sale, it will borrow the security sold short and deliver the security to the counterparty to which it sold the security short. An amount equal to the proceeds received by the Fund is reflected as an asset and an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the market value of the short sale. The Fund is required to repay the counterparty any dividends or interest received on the security sold short, which is shown as dividend expense or interest expense in the Consolidated Statement of Operations. The Fund may pay a fee on the equity assets borrowed from the counterparty, which is shown as stock loan fees in the Consolidated Statement of Operations. The Fund maintains a segregated account of securities or deposits cash with the broker-dealer as collateral for the short sales. The Fund may receive interest on the cash collateral deposited with the broker-dealer. The Fund is exposed to market risk based on the amount, if any, that the market value of the security increases beyond the market value at which the position was sold. Thus, a short sale of a security involves the risk that instead of declining, the price of the security sold short will rise. The short sale of securities involves the possibility of a theoretically unlimited loss since there is a theoretically unlimited
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
37
Notes to Consolidated Financial Statements (continued)
potential for the market price of the security sold short to increase. A gain, limited to the price at which the Fund sold the security short, or a loss, unlimited as to the dollar amount, will be recognized upon the termination of a short sale if the market price is either less than or greater than the proceeds originally received. There is no assurance the Fund will be able to close out a short position at a particular time or at an acceptable price.
Forward Commitments and When-Issued Delayed Delivery Securities: The Fund may purchase securities on a when-issued basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. The Fund may purchase securities under such conditions with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Fund may be required to pay more at settlement than the security is worth. In addition, the Fund is not entitled to any of the interest earned prior to settlement. When purchasing a security on a delayed delivery basis, the Fund assumes the rights and risks of ownership of the security, including the risk of price and yield fluctuations. In the event of default by the counterparty, the Fund’s maximum amount of loss is the unrealized appreciation of unsettled when-issued transactions, which is shown in the Consolidated Schedule of Investments.
Segregation and Collateralization: In cases in which the 1940 Act and the interpretive positions of the Securities and Exchange Commission (“SEC”) require that the Fund either deliver collateral or segregate assets in connection with certain investments (e.g., dollar rolls, financial futures contracts, foreign currency exchange contracts, swaps, short sales, structured options and options written), the Fund will, consistent with SEC rules and/or certain interpretive letters issued by the SEC, segregate collateral or 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. Furthermore, based on requirements and agreements with certain exchanges and third party broker-dealers, a Fund engaging in such transactions may have requirements to deliver/deposit securities to/with an exchange or broker-dealer 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 Fund is 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 Fund are recorded on the ex-dividend dates. The portion of distributions that exceeds a Fund’s current and accumulated earnings and profits, which are measured on a tax basis, will constitute a nontaxable return of capital. Distributions in excess of a Fund’s taxable income and net capital gains, but not in excess of a Fund’s earnings and profits, will be taxable to shareholders as ordinary income and will not constitute a nontaxable return of capital. The character and timing of dividends and distributions are determined in accordance with federal income tax regulations, which may differ from US GAAP.
Securities Lending: The Fund 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. The initial collateral received by the Fund has a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter 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 Fund and any additional required collateral is delivered to the Fund on the next business day. Securities lending income, as disclosed in the Consolidated Statement 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 Fund earns dividend or interest income on the securities loaned but does 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. The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate this risk the Fund benefits from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of securities lent. The Fund 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
38
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
Notes to Consolidated Financial Statements (continued)
purchased with cash collateral falls below the value of the original cash collateral received. During the six months ended April 30, 2013, any securities on loan were collateralized by cash.
Income Taxes: It is the 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.
The 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 Fund’s US federal tax returns remains open for each of the four years ended October 31, 2012. The statutes of limitations on the 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 December 2011, the Financial Accounting Standards Board (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 Consolidated 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. In January 2013, the FASB issued guidance that clarifies which investments and transactions are subject to the offsetting disclosure requirements. The scope of the disclosure requirements for offsetting will be limited to derivative instruments, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions. 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 Fund’s consolidated financial statement disclosures.
Other: Expenses directly related to the Fund or its classes are charged to the 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 Fund has 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 Consolidated Statement 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 Fund engages in various portfolio investment strategies using derivative contracts both to increase the returns of the Fund and/or to economically hedge its exposure to certain risks such as credit risk, equity risk, interest rate risk, foreign currency exchange rate risk, commodity price risk or other risk (inflation risk). These contracts may be transacted on an exchange or OTC.
Financial Futures Contracts: The Fund purchases and/or sells 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 Fund and a 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, financial 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. Upon entering into a financial futures contract, the Fund is required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contract’s size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Securities deposited as initial margin are designated on the Consolidated Schedule of Investments and cash deposited is recorded on the Consolidated Statement of Assets and Liabilities as cash pledged for financial futures contracts. Pursuant to the contract, the Fund agrees 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 variation margin and are recorded by the Fund as unrealized appreciation or depreciation. When the contract is closed, the Fund records 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 or foreign currency exchange rates and the underlying assets.
Foreign Currency Exchange Contracts: The Fund enters 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 Fund, help to manage the overall exposure to the currencies, in which some of the investments held by the Fund are denominated. The contract is marked-to-market daily and the change in market value is recorded by the Fund as an unrealized gain or loss. When the contract is closed, the Fund records 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
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
39
Notes to Consolidated Financial Statements (continued)
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 the counterparty to the contract does not perform its obligations under the agreement.
Options: The Fund purchases and writes call and put options to increase or decrease its exposure to underlying instruments (including equity risk, interest rate risk and/or commodity price risk) and/or, in the case of options written, to generate gains from options premiums. A call option gives the purchaser (holder) of the option the right (but not the obligation) to buy, and obligates the seller (writer) to sell (when the option is exercised), the underlying instrument at the exercise or strike price at any time or at a specified time during the option period. A put option gives the holder the right to sell and obligates the writer to buy the underlying instrument at the exercise or strike price at any time or at a specified time during the option period. When the Fund purchases (writes) an option, an amount equal to the premium paid (received) by the Fund is reflected as an asset (liability). The amount of the asset (liability) is subsequently marked-to-market to reflect the current market value of the option purchased (written). When an instrument is purchased or sold through an exercise of an option, the related premium paid (or received) is added to (or deducted from) the basis of the instrument acquired or deducted from (or added to) the proceeds of the instrument sold. When an option expires (or the Fund enters into a closing transaction), the Fund realizes a gain or loss on the option to the extent of the premiums received or paid (or gain or loss to the extent the cost of the closing transaction exceeds the premiums received or paid). When the Fund writes a call option, such option is “covered,” meaning that the Fund holds the underlying instrument subject to being called by the option counterparty. When the Fund writes a put option, such option is covered by cash in an amount sufficient to cover the obligation.
Options on swaps (swaptions) are similar to options on securities except that instead of selling or purchasing the right to buy or sell a security, the writer or purchaser of the swap option is granting or buying the right to enter into a previously agreed upon interest rate or credit default swap agreement (interest rate risk and/or credit risk) at any time before the expiration of the option.
The Fund also purchases or sells listed or OTC foreign currency options, foreign currency futures and related options on foreign currency futures as a short or long hedge against possible variations in foreign exchange rates or to gain exposure to foreign currencies (foreign currency exchange rate risk). When foreign currency is purchased or sold through an exercise of a foreign currency option, the related premium paid (or received) is added to (or deducted from) the basis of the foreign currency acquired or deducted from (or added to) the proceeds of the foreign currency sold (receipts from the foreign currency purchased). Such transactions may be effected with respect to hedges on non-US dollar denominated instruments owned by the Fund but not yet delivered, or committed or anticipated to be purchased by the Fund.
The Fund may also purchase and write a variety of options with non-standard payout structures or other features (“barrier options”). Barrier options are generally traded OTC. The Fund may invest in various types of barrier options including down-and-in options. Down-and-in options expire worthless to the purchaser of the option unless the price of the underlying instrument falls below a specific barrier price level prior to the option’s expiration date.
In purchasing and writing options, the Fund bears the risk of an unfavorable change in the value of the underlying instrument or the risk that the Fund may not be able to enter into a closing transaction due to an illiquid market. Exercise of an option written could result in the Fund purchasing or selling a security at a price different from the current market value.
Swaps: The Fund enters into swap agreements, in which the Fund and a counterparty agree either to make periodic net payments on a specified notional amount or a net payment upon termination. These payments received or made by the Fund are recorded in the Consolidated Statement of Operations as realized gains or losses, respectively. Any upfront fees paid are recorded as assets and any upfront fees received are recorded as liabilities and are shown as swap premiums paid and swap premiums received, respectively, in the Consolidated Statement of Assets and Liabilities and amortized over the term of the swap. Swap agreements are privately negotiated in the OTC market and may be entered into as a bilateral contract or centrally cleared (“centrally cleared swaps”). In a centrally cleared swap, immediately following execution of the swap agreement, the swap agreement is novated to a central counterparty (the “CCP”) and the Fund faces the CCP through a broker. Upon entering into a centrally cleared swap, the Fund is required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on the size and risk profile of the particular swap. Securities deposited as initial margin are designated on the Consolidated Schedule of Investments and cash deposited is recorded on the Consolidated Statement of Assets and Liabilities as cash pledged for centrally cleared swaps. Unlike a bilateral swap agreement, for centrally cleared swaps, the Fund has no credit exposure to the counterparty as the CCP stands between the Fund and the counterparty. Swaps are marked-to-market daily and changes in value are recorded as unrealized appreciation (depreciation). The daily change in valuation of centrally cleared swaps, if any, is recorded as a receivable or payable for variation margin in the Consolidated Statement of Assets and Liabilities. When the swap is terminated, the Fund will record a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Fund’s basis in the contract, if any. Generally, the basis of the contracts is the
40
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
Notes to Consolidated Financial Statements (continued)
premium received or paid. Swap transactions involve, to varying degrees, elements of interest rate, credit and market risk in excess of the amounts recognized in the Consolidated Statement of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreements, and that there may be unfavorable changes in interest rates and/or market values associated with these transactions.
•
Total return swaps — The Fund enters into total return swaps to obtain exposure to a security or market without owning such security or investing directly in that market or to transfer the risk/return of one market (e.g., fixed income) to another market (e.g., equity or commodity prices) (equity risk, commodity price risk and/or interest rate risk). Total return swaps are agreements in which there is an exchange of cash flows whereby one party commits to make payments based on the total return (coupons plus capital gains/losses) of an underlying instrument in exchange for fixed or floating rate interest payments. To the extent the total return of the instrument or index underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the Fund will receive a payment from or make a payment to the counterparty.
•
Interest rate swaps — The Fund enters into interest rate swaps to gain or reduce exposure to interest rates or to manage duration, the yield curve or interest rate risk by economically hedging the value of the fixed rate bonds which may decrease when interest rates rise (interest rate risk). Interest rate swaps are agreements in which one party pays a stream of interest payments, either fixed or floating, for another party’s stream of interest payments, either fixed or floating, on the same notional amount for a specified period of time. Interest rate floors, which are a type of interest rate swap, are agreements in which one party agrees to make payments to the other party to the extent that interest rates fall below a specified rate or floor in return for a premium. In more complex swaps, the notional principal amount may decline (or amortize) over time.
•
Credit default swaps — The Fund enters into credit default swaps to manage their exposure to the market or certain sectors of the market, to reduce their risk exposure to defaults of corporate and/or sovereign issuers or to create exposure to corporate and/or sovereign issuers to which they are not otherwise exposed (credit risk). The Fund may either buy or sell (write) credit default swaps on single-name issuers (corporate or sovereign), a combination or basket of single-name issuers or traded indexes. Credit default swaps on single-name issuers are agreements in which the protection buyer pays fixed periodic payments to the seller in consideration for a guarantee from the protection seller to make a specific payment should a negative credit event take place with respect to the referenced entity (e.g., bankruptcy, failure to pay, obligation accelerators, repudiation, moratorium or restructuring). Credit default swaps on traded indexes are agreements in which the buyer pays fixed periodic payments to the seller in consideration for a guarantee from the seller to make a specific payment should a write-down, principal or interest shortfall or default of all or individual underlying securities included in the index occurs. As a buyer, if an underlying credit event occurs, the Fund will either receive from the seller an amount equal to the notional amount of the swap and deliver the referenced security or underlying securities comprising the index or receive a net settlement of cash equal to the notional amount of the swap less the recovery value of the security or underlying securities comprising the index. As a seller (writer), if an underlying credit event occurs, the Fund will either pay the buyer an amount equal to the notional amount of the swap and take delivery of the referenced security or underlying securities comprising the index or pay a net settlement of cash equal to the notional amount of the swap less the recovery value of the security or underlying securities comprising the index.
A derivative contract may suffer a mark to market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract. A Fund’s risk of loss from counterparty credit risk on OTC derivatives is generally limited to the aggregate unrealized gain netted against any collateral held by such Fund. For OTC options purchased, the Fund bears the risk of loss of the amount of the premiums paid plus the positive change in market values net of any collateral held by such Fund should the counterparty fail to perform under the contracts. Options written by the Fund does not typically give rise to counterparty credit risk, as options written generally obligate the Fund, and not, the counterparty to perform. With exchange traded purchased options and futures and centrally cleared swaps, there is minimal counterparty credit risk to the Fund since the exchange’s clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, the credit risk is limited to failure of the clearinghouse. However, credit risk still exists in exchange traded futures and options and centrally cleared swaps with respect to initial and variation margin that is held in a broker’s customer accounts. While brokers are required to segregate customer margin from their own assets, in the event that a broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the broker for all its clients, US bankruptcy laws will typically allocate that shortfall on a pro rata basis across all the broker’s customers, potentially resulting in losses to the Fund.
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
41
Notes to Consolidated Financial Statements (continued)
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs OTC derivatives and foreign exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty certain derivative financial instrument’s payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default (close-out netting) including the bankruptcy or insolvency of the counterparty. However, that bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy, insolvency or other events.
Collateral and margin requirements differ by type of derivative. Margin requirements are established by the broker or clearinghouse for exchange traded and centrally cleared derivatives (financial futures contracts, options and centrally cleared swaps). Brokers can ask for margining in excess of the minimum in certain circumstances. Collateral terms are contract specific for OTC derivatives (foreign currency exchange contracts, options and swaps). For derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the mark to market amount for each transaction under such agreement and comparing that amount to the value of any collateral currently pledged by the Fund and the counterparty. For financial reporting purposes, cash collateral that has been pledged to cover obligations of the Fund and cash collateral received from the counterparty, if any, is reported separately on the Consolidated Statement of Assets and Liabilities as cash pledged as collateral and cash received as collateral, respectively. Non-cash collateral pledged by the Fund, if any, is noted in the Consolidated Schedule of Investments. Generally, the amount of collateral due from or to a party has to exceed a minimum transfer amount threshold (e.g. $500,000) before a transfer has to be made. To the extent amounts due to the Fund from its counterparties are not fully collateralized, contractually or otherwise, the Fund bears the risk of loss from counterparty non-performance. See Note 1 “Segregation and Collateralization” for information with respect to collateral practices. The Fund attempts to mitigate counterparty risk by only entering into agreements 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 Fund’s net assets decline by a stated percentage or the Fund fails to meet the terms of its ISDA Master Agreements, which would cause the Fund to accelerate payment of any net liability owed to the counterparty.
For financial reporting purposes, the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Consolidated Statement of Assets and Liabilities.
Derivative Financial Instruments Categorized by Risk Exposure:
Fair Values of Derivative Financial Instruments as of April 30, 2013
Asset Derivatives
Liability Derivatives
Consolidated Statement of Assets and Liabilities Location
Value
Consolidated Statement of Assets and Liabilities Location
Value
Foreign currency exchange contracts
Unrealized appreciation on foreign currency exchange contracts; Investments at value — unaffiliated1
$
89,943,753
Unrealized depreciation on foreign currency exchange contracts; Options written at value
$
67,981,907
Equity contracts
Net unrealized appreciation/depreciation2; Unrealized appreciation on swaps2; Investments at value — unaffiliated1
577,275,803
Net unrealized appreciation/depreciation2; Unrealized depreciation on swaps; Options written at value
134,658,803
Interest rate contracts
Investments at value — unaffiliated1; Unrealized appreciation on swaps2
13,028,845
Unrealized depreciation on swaps
1,890,371
Total
$
680,248,401
$
204,531,081
1
Includes options purchased at value as reported in the Consolidated Schedule of Investments.
2
Includes cumulative appreciation/depreciation on financial futures contracts and centrally cleared swaps, if any, as reported in the Consolidated Schedule of Investments. Only current day’s variation margin is reported within the Consolidated Statement of Assets and Liabilities.
42
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
Notes to Consolidated Financial Statements (continued)
The Effect of Derivative Financial Instruments in the Consolidated Statement of Operations Six Months Ended April 30, 2013
Net Realized Gain (Loss) From
Financial Futures Contracts
Swaps
Options1
Foreign Currency Transactions
Credit contracts
—
$
2,050,170
—
—
Equity contracts
$
10,410,902
(1,666,300
)
$
87,245,708
$119,197,367
Foreign currency exchange contracts
—
—
—
—
Interest rate contracts
—
(3,659,275
)
1,795,991
—
Total
$
10,410,902
$
(3,275,405
)
$
89,041,699
$119,197,367
Net Change in Unrealized Appreciation/Depreciation on
Financial Futures Contracts
Swaps
Options1
Foreign Currency Translations
Credit contracts
—
—
—
—
Equity contracts
$
13,878,828
$
1,628,775
$
197,779,701
—
Foreign currency exchange contracts
—
—
(1,179,365
)
$ 49,717,427
Interest rate contracts
—
6,325,149
(1,733,731
)
—
Total
$
13,878,828
$
7,953,924
$
194,866,605
$49,717,427
1
Options purchased are included in the net realized gain (loss) from investments and net change in unrealized appreciation/depreciation on investments.
For the six months ended April, 30, 2013, the average quarterly balances of outstanding derivative financial instruments were as follows:
Financial futures contracts:
Average number of contracts purchased
2,602
Average number of contracts sold
8,328
Average notional value of contracts purchased
$
256,597,623
Average notional value of contracts sold
$
710,184,779
Foreign currency exchange contracts:
Average number of contracts-US dollars purchased
62
Average number of contracts-US dollars sold
24
Average US dollar amounts purchased
$
5,181,707,888
Average US dollar amounts sold
$
1,360,649,766
Options:
Average number of option contracts purchased
809,855,533
Average number of option contracts written
403,628,973
Average notional value of option contracts purchased
$
25,072,448,256
Average notional value of option contracts written
$
3,849,016,507
Average number of swaption contracts purchased
1
Average number of swaption contracts written
1
Average notional value of swaption contracts purchased
$
65,987,921
Average notional value of swaption contracts written
$
108,835,683
Interest rate swaps:
Average number of contracts-pays fixed rate
3
Average number of contracts-receives fixed rate
9
Average notional value- pays fixed rate
$
789,483,850
Average notional value- receives fixed rate
$
3,929,762,872
Total return swaps:
Average number of contracts
1
Average notional value
$
26,498,858
3. Investment Advisory Agreement and Other Transactions with Affiliates:
The PNC Financial Services Group, Inc. (“PNC”) is the largest stockholder and an affiliate, for 1940 Act purposes, of BlackRock.
The Fund entered into an Investment Advisory Agreement with BlackRock Advisors, LLC (the “Manager”), the Fund’s investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory and administration services. The Manager is responsible for the management of the Fund’s portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of the Fund. For such services, the Fund pays the Manager a monthly fee at an annual rate of 0.75% of the Fund’s average daily net assets.
The Manager voluntarily agreed to waive a portion of its fees payable by the Fund, which is shown as fees waived by Manager in the Consolidated Statement of Operations. Such fee was reduced for average daily net assets as follows:
In excess of $10 Billion, but not exceeding $15 Billion
0.69
%
In excess of $15 Billion, but not exceeding $20 Billion
0.68
%
In excess of $20 Billion, but not exceeding $25 Billion
0.67
%
In excess of $25 Billion, but not exceeding $30 Billion
0.65
%
In excess of $30 Billion, but not exceeding $40 Billion
0.63
%
In excess of $40 Billion, but not exceeding $60 Billion
0.62
%
In excess of $60 Billion, but not exceeding $80 Billion
0.61
%
Greater than $80 Billion
0.60
%
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
43
Notes to Consolidated Financial Statements (continued)
For the six months ended April 30, 2013, the Manager waived $22,601,662, which is included in fees waived by Manager in the Consolidated Statement of Operations. This voluntary waiver may be reduced or discontinued at any time without notice.
The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees the 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 the Fund’s investment in other affiliated investment companies, if any. This amount is included in fees waived by Manager in the Consolidated Statement of Operations. For the six months ended April 30, 2013, the amount waived was $2,813.
The Manager provides investment management and other services to the Subsidiary. The Manager does not receive separate compensation from the Subsidiary for providing investment management or administrative services. However, the Fund pays the Manager based on the Fund’s net assets, which includes the assets of the Subsidiary.
The Manager entered into a sub-advisory agreement with BlackRock Investment Management, LLC (“BIM”) and BlackRock International Limited (“BIL”), both affiliates of the Manager. The Manager pays BIM and BIL, for services they provide, a monthly fee that is a percentage of the investment advisory fees paid by the Fund to the Manager.
For the six months ended April 30, 2013, the Fund reimbursed the Manager $283,540 for certain accounting services, which is included in accounting services in the Consolidated Statement of Operations.
The Fund 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, the Fund pays BRIL ongoing service and distribution fees. The fees are accrued daily and paid monthly at annual rates based upon the average daily net assets of the shares of the Fund as follows:
Service Fee
Distribution Fee
Investor A
0.25
%
—
Investor B
0.25
%
0.75
%
Investor C
0.25
%
0.75
%
Class R
0.25
%
0.25
%
Pursuant to sub-agreements with BRIL, broker-dealers and BRIL provide shareholder servicing and distribution services to the Fund. The ongoing service and/or distribution fee compensates BRIL and each broker-dealer for providing shareholder servicing and/or distribution related services to Investor A, Investor B, Investor C and Class R shareholders.
For the six months ended April 30, 2013, affiliates earned underwriting discounts, direct commissions and dealer concessions on sales of the Fund’s Investor A Shares, which totaled $1,079,510.
For the six months ended April 30, 2013, affiliates received CDSCs as follows:
Investor A
$
158,354
Investor B
$
309,222
Investor C
$
633,097
The Manager maintains a call center, which is responsible for providing certain shareholder services to the Fund, 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 April 30, 2013, the Fund reimbursed the Manager the following amounts for costs incurred in running the call center, which are included in transfer agent — class specific in the Consolidated Statement of Operations:
Institutional
$
58,067
Investor A
$
154,764
Investor B
$
7,527
Investor C
$
134,961
Class R
$
5,848
The Fund received an exemptive order from the SEC permitting it, 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 has retained BIM as the securities lending agent. BIM may, on behalf of the Fund, invest cash collateral received by the Fund for such loans in a private investment company managed by the Manager or in registered money market funds advised by the Manager or its affiliates. The market value of securities on loan and the value of the related collateral, if applicable, is shown in the Consolidated Statement of Assets and Liabilities as securities loaned at value and collateral on securities loaned at value, respectively. The cash collateral invested by BIM, if any, is disclosed in the Consolidated Schedule of Investments. 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 Fund retains 65% of securities lending income and pays a fee to BIM equal to 35% of such income. The Fund benefits from a borrower default indemnity provided by BlackRock. As securities lending agent, BIM bears all operational costs directly related to securities lending as well as the cost of borrower default indemnification. BIM does not receive any fees for managing the cash collateral. The share of income earned by the Fund is shown as securities lending — affiliated — net in the Consolidated Statement of Operations. For the six months ended April 30, 2013, BIM received $693,296 in securities lending agent fees related to securities lending activities for the Fund.
44
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
Notes to Consolidated Financial Statements (continued)
Certain officers and/or directors of the Fund are officers and/or directors of BlackRock or its affiliates. The Fund reimburses the Manager for a portion of the compensation paid to the Fund’s Chief Compliance Officer, which is included in officer and directors in the Consolidated Statement of Operations.
4. Investments:
Purchases and sales of investments including paydowns and mortgage dollar rolls and excluding short-term securities and US government securities for the six months ended April 30, 2013 were $9,848,465,651 and $12,842,165,158, respectively.
Purchases and sales of US government securities for the Fund for the six months ended April 30, 2013, were $586,118,122 and $553,805,212, respectively.
Transactions in options written for the six months ended April 30, 2013, were as follows:
Calls
Contracts
Notional (000)
Premiums Received
Outstanding options, beginning of period
4,431,392
$
398,853
$
67,958,349
Options written
13,578,253
—
62,072,281
Options exercised
(1,763,027
)
—
(24,783,548
)
Options expired
(6,084,994
)
—
(15,614,277
)
Options closed
(7,425,387
)
—
(54,310,415
)
Outstanding options, end of period
2,736,237
$
398,853
$
35,322,390
Puts
Contracts
Notional (000)
Premiums Received
Outstanding options, beginning of period
2,731,901
$
19,904,958
$
78,551,693
Options written
4,765,775
—
80,643,040
Options expired
(1,368,692
)
(19,904,958
)
(34,715,570
)
Options closed
(4,402,339
)
—
(79,856,357
)
Outstanding options, end of period
1,726,645
—
$
44,622,806
As of April 30, 2013, the value of portfolio securities subject to covered call options written was $500,212,919.
5. Borrowings:
The Fund, along with certain other funds managed by the Manager and its affiliates (“Participating Funds”), is a party to a 364-day, $800 million credit agreement with a group of lenders, under which the Fund may borrow to fund shareholder redemptions. The agreement expires in April 2014. Excluding commitments designated for a certain individual fund, other Participating Funds, including the Fund, can borrow up to an aggregate commitment amount of $500 million, subject to asset coverage and other limitations as specified in the agreement. The credit agreement has the following terms: a fee of 0.065% per annum on unused commitment amounts 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. Participating Funds paid administration and arrangement fees, which, along with commitment fees, were allocated among such funds based upon portions of the aggregate commitment available to them and relative net assets of Participating Funds. The Fund did not borrow under the credit agreement during the six months ended April 30, 2013.
6. Income Tax Information:
As of October 31, 2012, the Fund had a capital loss carryforward available to offset future realized capital gains of $181,471,523. This capital loss carryforward has no expiration date.
As of April 30, 2013, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:
Tax cost
$
48,600,340,714
Gross unrealized appreciation
$
10,123,199,577
Gross unrealized depreciation
(1,506,598,436
)
Net unrealized appreciation
$
8,616,601,141
7. Concentration, Market and Credit Risk:
In the normal course of business, the Fund invests in securities and enters 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 Fund may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Fund; 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 Fund may be exposed to counterparty credit risk, or the risk that an entity with which the Fund has unsettled or open transactions may fail to or be unable to perform on its commitments. The Fund manages counterparty credit risk by entering into transactions only with counterparties that it believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Fund to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Fund’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Consolidated Statement of Assets and Liabilities, less any collateral held by the Fund.
The Fund invests a significant portion of its assets in securities of issuers located in Europe or with significant exposure to European issuers or countries. The European financial markets have recently experienced volatility and adverse trends due to concerns about economic downturns in, or rising government debt levels of several European countries, including Greece, Ireland, Italy, Portugal and Spain. As of April 30, 2013, these events have adversely affected the
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
45
Notes to Consolidated Financial Statements (concluded)
exchange rate of the euro and may continue to spread to other countries in Europe, including countries that do not use the euro. These events may affect the value and liquidity of certain of the Fund’s investments.
The Fund invests a substantial amount of its assets in issuers located in a single country or a limited number of countries. When the Fund concentrates its investments in this manner, it assumes the risk that economic, political and social conditions in those countries may have a significant impact on their investment performance. Foreign issuers may not be subject to the same uniform accounting, auditing and financial reporting standards and practices as used in the United States. Foreign securities markets may also be less liquid, more volatile, and less subject to governmental supervision not typically associated with investing in US securities. Please see the Consolidated Schedule of Investments for concentrations in specific countries.
As of April 30, 2013, the Fund had the following industry classifications:
Industry
Percent of Long-Term Investments
Oil, Gas & Consumable Fuels
7
%
Commercial Banks
6
Health Care Providers & Service
4
Capital Markets
4
Other1
79
1
Consists of US Treasury Obligations and Foreign Government Obligations (17%), all other industries less than 4% of long-term investments (62%).
8. Capital Share Transactions:
Transactions in capital shares for each class were as follows:
Six Months Ended April 30, 2013
Year Ended October 31, 2012
Shares
Amount
Shares
Amount
Institutional
Shares sold
120,215,263
$
2,432,810,690
273,863,655
$
5,245,380,571
Shares issued to shareholders in reinvestment of dividends and distributions
5,879,461
116,472,197
24,700,311
446,810,377
Shares redeemed
(126,006,247
)
(2,541,980,628
)
(224,638,746
)
(4,291,124,720
)
Net increase
88,477
$
7,302,259
73,925,220
$
1,401,066,228
Investor A
Shares sold
75,133,361
$
1,513,428,726
168,071,503
$
3,149,931,066
Shares issued to shareholders in reinvestment of dividends and distributions
4,406,036
86,886,559
24,321,984
437,027,026
Shares redeemed
(106,394,504
)
(2,132,663,021
)
(228,113,808
)
(4,282,494,140
)
Net decrease
(26,855,107
)
$
(532,347,736
)
(35,720,321
)
$
(695,536,048
)
Investor B
Shares sold
300,087
$
5,867,508
887,588
$
16,471,432
Shares issued to shareholders in reinvestment of dividends and distributions
39,599
764,271
816,306
14,204,452
Shares redeemed
(6,859,960
)
(135,073,057
)
(16,941,470
)
(314,419,267
)
Net decrease
(6,520,274
)
$
(128,441,278
)
(15,237,576
)
$
(283,743,383
)
Investor C
Shares sold
50,472,356
$
947,139,303
107,410,201
$
1,902,965,466
Shares issued to shareholders in reinvestment of dividends and distributions
1,681,399
30,887,504
18,672,468
310,979,902
Shares redeemed
(86,462,046
)
(1,612,440,073
)
(179,080,727
)
(3,168,167,011
)
Net decrease
(34,308,291
)
$
(634,413,266
)
(52,998,058
)
$
(954,221,643
)
Class R
Shares sold
8,860,742
$
172,377,577
19,609,466
$
360,751,017
Shares issued to shareholders in reinvestment of dividends and distributions
238,812
4,554,137
1,561,125
27,082,552
Shares redeemed
(9,167,000
)
(177,420,020
)
(17,221,282
)
(317,152,708
)
Net increase (decrease)
(67,446
)
$
(488,306
)
3,949,309
$
70,680,861
Total Net Decrease
(67,662,641
)
$
(1,288,388,327
)
(26,081,426
)
$
(461,753,985
)
9. Subsequent Events:
Management has evaluated the impact of all subsequent events on the Fund through the date the consolidated financial statements were issued and has determined that there were no subsequent events requiring adjustment or additional disclosure in the consolidated financial statements.
46
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
Officers and Directors
Robert M. Hernandez, Chairman of the Board and Director Fred G. Weiss, Vice Chairman of the Board and Director Paul L. Audet, Director James H. Bodurtha, Director Bruce R. Bond, Director Donald W. Burton, Director Honorable Stuart E. Eizenstat, Director Laurence D. Fink, Director Kenneth A. Froot, Director Henry Gabbay, Director John F. O’Brien, Director Roberta Cooper Ramo, Director David H. Walsh, Director John M. Perlowski, President 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 Benjamin Archibald, Secretary
Investment Advisor BlackRock Advisors, LLC Wilmington, DE 19809
BlackRock International Limited Edinburgh, EH3 8JB United Kingdom
Custodian Brown Brothers Harriman & Co. Boston, MA 02109
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 Fund 100 Bellevue Parkway Wilmington, DE 19809
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
47
Additional Information
General Information
Electronic Delivery
Electronic copies of most financial reports and prospectuses are available on the Fund’s website or shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual reports and prospectuses by enrolling in the Fund’s 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 Fund 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 Fund at (800) 441-7762.
Availability of Quarterly Schedule of Investments
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The Fund’s 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 Fund uses 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 Fund voted proxies relating to securities held in the Fund’s portfolio during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com or by calling (800) 441-7762 and (2) on the SEC’s website at http://www.sec.gov.
Shareholder Privileges
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.
48
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
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.
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
49
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 Basic Value Fund BlackRock Capital Appreciation Fund BlackRock China Fund BlackRock Commodity Strategies Fund BlackRock Disciplined Small Cap Core Fund BlackRock Emerging Markets Fund BlackRock Emerging Markets Long/Short Equity Fund BlackRock Energy & Resources Portfolio BlackRock Equity Dividend Fund BlackRock EuroFund BlackRock Flexible Equity Fund BlackRock Focus Growth Fund BlackRock Global Dividend Income Portfolio
BlackRock Global Long/Short Equity Fund BlackRock Global Opportunities Portfolio BlackRock Global SmallCap Fund BlackRock Health Sciences Opportunities 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 Long-Horizon Equity Fund BlackRock Mid-Cap Growth Equity Portfolio BlackRock Mid Cap Value Opportunities Fund
BlackRock Natural Resources Trust BlackRock Pacific Fund BlackRock Real Estate Securities 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 Stock Fund BlackRock U.S. Opportunities Portfolio BlackRock Value Opportunities Fund BlackRock World Gold Fund
Taxable Fixed Income Funds
BlackRock Bond Index Fund BlackRock Core Bond Portfolio BlackRock CoreAlpha Bond Fund BlackRock Emerging Market Local 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 Secured Credit Portfolio BlackRock Short Obligations Fund BlackRock Short-Term Treasury Fund
BlackRock Strategic Income Opportunities Portfolio BlackRock Total Return Fund BlackRock U.S. Government Bond Portfolio BlackRock U.S. Mortgage Portfolio BlackRock Ultra-Short Obligations Fund BlackRock World Income Fund
Municipal Fixed Income 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
Mixed Asset Funds
BlackRock Balanced Capital Fund
LifePath Active Portfolios
LifePath Index Portfolio
BlackRock Emerging Market Allocation Portfolio
2015
2040
Retirement
2040
BlackRock Global Allocation Fund
2020
2045
2020
2045
BlackRock Managed Volatility Portfolio
2025
2050
2025
2050
BlackRock Multi-Asset Income Portfolio
2030
2055
2030
2055
BlackRock Multi-Asset Real Return Fund
2035
2035
BlackRock Strategic Risk Allocation Fund
BlackRock Prepared Portfolios
LifePath Portfolios
Conservative Prepared Portfolio
Retirement
2040
Moderate Prepared Portfolio
2020
2045
Growth Prepared Portfolio
2025
2050
Aggressive Growth Prepared Portfolio
2030
2055
2035
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.
50
BLACKROCK GLOBAL ALLOCATION FUND, INC.
APRIL 30, 2013
[THIS PAGE INTENTIONALLY LEFT BLANK]
This report is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of the Fund unless accompanied or preceded by the Fund’s 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 Fund’s prospectus for a description of risks associated with global investments.
GA-4/13-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
2
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BlackRock Global Allocation Fund, Inc.
By:
/s/ John M. Perlowski
John M. Perlowski
Chief Executive Officer (principal executive officer) of
BlackRock Global Allocation Fund, Inc.
Date: July 2, 2013
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 Global Allocation Fund, Inc.
Date: July 2, 2013
By:
/s/ Neal J. Andrews
Neal J. Andrews
Chief Financial Officer (principal financial officer) of
BlackRock Global Allocation Fund, Inc.
Date: July 2, 2013
3
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