UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-09375
811-09633
Name of Fund: BlackRock Global Financial Services Fund, Inc.
Global Financial Services Master Trust
Fund Address: P.O. Box 9011 Princeton,
NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr., Chief Executive
Officer, BlackRock Global Financial Services Fund, Inc. and Global
Financial Services Master Trust, 800 Scudders Mill Road, Plainsboro, NJ
08536. Mailing address: P.O. Box 9011, Princeton, NJ 08543-9011
Registrant's telephone number, including area code: (609) 282-2800
Date of fiscal year end: 09/30/07
Date of reporting period: 10/01/06 - 03/31/07
Item 1 - Report to Stockholders
ALTERNATIVES BLACKROCK SOLUTIONS EQUITIES
FIXED INCOME LIQUIDITY REAL ESTATE
BlackRock Global Financial BLACKROCK
Services Fund, Inc.
SEMI-ANNUAL REPORT
MARCH 31, 2007 | (UNAUDITED)
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
BlackRock Global Financial Services Fund, Inc.
Officers and Directors/Trustees
Robert C. Doll, Jr., President and Director/Trustee
Ronald W. Forbes, Director/Trustee
Cynthia A. Montgomery, Director/Trustee
Jean Margo Reid, Director/Trustee
Roscoe S. Suddarth, Director/Trustee
Richard R. West, Director/Trustee
Donald C. Burke, Vice President and Treasurer
Jeffrey Hiller, Fund Chief Compliance Officer
Alice A. Pellegrino, Secretary
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109-3661
Transfer Agent
PFPC Inc.
Wilmington, DE 19809
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Effective January 1, 2007, Edward D. Zinbarg retired as a Director/Trustee of
BlackRock Global Financial Services Fund, Inc. and Global Financial Services
Master Trust. The Fund's/Trust's Board of Directors/Trustees wishes Mr. Zinbarg
well in his retirement.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Effective April 13, 2007, Jeffrey Hiller resigned his position as Chief
Compliance Officer of the Fund/Trust. Also effective April 13, 2007, Karen Clark
was appointed Chief Compliance Officer of the Fund/Trust. Ms. Clark has been a
Managing Director of BlackRock, Inc. since 2007. She was a Director thereof from
2005 to 2007. Prior to that, Ms. Clark was a principal and senior compliance
officer at State Street Global Advisors from 2001 to 2005. Ms. Clark was a
principal consultant with PricewaterhouseCoopers, LLP from 1998 to 2001. From
1993 to 1998, Ms. Clark was Branch Chief, Division of Investment Management and
Office of Compliance Inspections and Examinations, with the U.S. Securities and
Exchange Commission.
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2 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007
A Letter to Shareholders
Dear Shareholder
For most financial markets, 2007 opened just as 2006 ended -- on a positive
trajectory. At the end of February and into March, however, global equity
markets registered their first significant decline since last summer. The market
jitters were triggered by a significant setback in the Chinese market and were
exacerbated by several concerns, notably a weakening economy, some disappointing
corporate earnings announcements, escalating geopolitical concerns in the Middle
East and increasing delinquencies in the subprime mortgage market. Despite the
recent spate of volatility, underlying stock market fundamentals appear quite
sound, supported by a generally favorable global economic backdrop, tame
inflation, relatively low interest rates and attractive valuations.
Not unlike the equity market, the bond market also has seen volatility recently
as observers have attempted to interpret mixed economic signals. A bond market
rally late last year reversed itself early in 2007 as economic data
strengthened. Prices improved (and yields fell) again in February as equities
struggled, but retrenched slightly in March. Notably, the Treasury curve
remained inverted for much of 2006 and into 2007. The 30-year Treasury yield
stood at 4.84% at the end of March 2007, while the one-month Treasury offered
the highest yield on the curve at 5.07%.
For its part, the Federal Reserve Board (the Fed) has left the target short-term
interest rate on hold at 5.25% since first pausing in its interest rate-hiking
campaign on August 8, 2006. Although the central bankers continue to express
concern about potential inflationary pressures, they also have made reference to
signs of economic weakness in their public statements. Most observers expect the
Fed to keep interest rates on hold for now.
Notwithstanding some recent volatility, most major market indexes managed to
post positive returns for the annual and semi-annual reporting periods ended
March 31, 2007:
Total Returns as of March 31, 2007 6-month 12-month
======================================================================================================
U.S. equities (Standard & Poor's 500 Index) + 7.38% +11.83%
- ------------------------------------------------------------------------------------------------------
Small cap U.S. equities (Russell 2000 Index) +11.02 + 5.91
- ------------------------------------------------------------------------------------------------------
International equities (MSCI Europe, Australasia, Far East Index) +14.85 +20.20
- ------------------------------------------------------------------------------------------------------
Fixed income (Lehman Brothers Aggregate Bond Index) + 2.76 + 6.59
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Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) + 1.93 + 5.43
- ------------------------------------------------------------------------------------------------------
High yield bonds (Credit Suisse High Yield Index) + 7.59 +11.82
- ------------------------------------------------------------------------------------------------------
If recent market movements are any guide, 2007 could be a year of enhanced
market volatility. As you navigate the uncertainties of the financial markets,
we encourage you to review your investment goals with your financial
professional and to make portfolio changes, as needed. For more reflection on
the markets, please ask your financial professional for the latest issue of
"What's Ahead in 2007: First Quarter Update," or view it online at
www.blackrock.com/funds. We thank you for trusting BlackRock with your
investment assets, and we look forward to continuing to serve you in the months
and years ahead.
Sincerely,
/s/ Robert C. Doll, Jr.
Robert C. Doll, Jr.
Fund President and Director/Trustee
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007 3
A Discussion With Your Fund's Portfolio Manager
We continued to diversify the Fund geographically while also reducing
exposure to more interest-rate-sensitive subsectors within the financials
industry.
How did the Fund perform during the period in light of the existing market
conditions?
For the six-month period ended March 31, 2007, BlackRock Global Financial
Services Fund, Inc.'s Institutional, Investor A, Investor B, Investor C and
Class R Shares had total returns of +8.68%, +8.53%, +8.18%, +8.07% and +8.36%,
respectively. (Fund results shown do not reflect sales charges and would be
lower if sales charges were included. Complete performance information can be
found on pages 6 and 7 of this report to shareholders.) The Fund's results were
competitive with the +8.39% return of the Morgan Stanley Capital International
(MSCI) World Financials Index, but lagged the +11.07% return of the MSCI World
Index for the six-month period, as the financials sector was the third-worst
performer in the broader index.
During the six-month period, the main driver of Fund performance was an
allocation to options on positions in The Goldman Sachs Group, Inc. and The Bear
Stearns Cos., Inc. within the capital markets subsector. This strategy added
over 300 basis points (3%) to performance relative to the MSCI World Financials
Index. An underweight position and strong stock selection in commercial banks
also contributed positively to performance, led by shares of Shinhan Financial
Group Co. Ltd., Kookmin Bank, Mitsubishi UFJ Financial Group, Inc. and Hana
Financial Holdings. On an absolute basis, the insurance subsector contributed
180 basis points to Fund performance, while the real estate management &
development subsector added over 150 basis points for the semi-annual period.
The Fund's exposure to real estate investment trusts (REITs) and thrifts &
mortgage finance weighed on relative returns given the continued weakness in the
U.S. housing market. Stock selection in diversified financial services also
detracted somewhat from performance relative to the benchmark financials index.
What changes were made to the Portfolio during the period?
We continued the repositioning that was started near the end of the last fiscal
year with the intention of further risk reduction and geographic diversification
within the Portfolio. We increased our commercial bank exposure, primarily in
Europe and Asia, with new positions in Shinhan Financial Group, Banco Santander
Central Hispano SA, Kookmin Bank, Sumitomo Mitsui Financial Group, Inc., BNP
Paribas SA and Mitsubishi UFJ Financial Group. The Portfolio's exposure to
capital markets also was increased with the addition of asset management
companies Julius Baer Holdings AG and Franklin Resources, Inc.
The Portfolio's allocation to the thrifts & mortgage finance subsector was
increased with new positions in Fannie Mae and Countrywide Financial Corp.,
although the Portfolio no longer has exposure to the troubled monoline subprime
mortgage companies, such as New Century Mortgage Corp., Accredited Mortgage
Corp. and Fremont General Corp., all of which were sold last year. Having said
that, Countrywide Financial does some subprime originations (generally around 8%
- - 10% of originations) in its mortgage bank, which represent about one-half of
earnings. Securities firms in the Portfolio, such as Lehman Brothers and Bear
Stearns, also originate, securitize and trade subprime mortgages and securities
as part of their well-diversified business mix.
The Portfolio's exposure to the real estate management & development subsector
was increased slightly, primarily in China/Hong Kong, where we believe the
property development sector is attractive despite attempts by the government to
slow housing appreciation. We significantly reduced the Portfolio's exposure to
mortgage REITs. Insurance sector exposure also was reduced, although we did
initiate a new position in AXA SA. Finally, we took profits on our Goldman Sachs
options prior to the downturn in capital markets performance near the middle of
the period.
From a geographic standpoint, we increased the Portfolio's exposure to Europe
and Asia, while reducing exposure to the United States. In Europe, we added to
commercial banks with new positions in Banco Santander Central Hispano SA, BNP
Paribas SA, Erste Bank der Oesterreichischen Sparkassen AG and increased our
existing holding in Barclays Plc. Likewise, we added to our European insurance
weighting with the aforementioned position in AXA, and to asset management
companies with the aforementioned new position in Julius Baer Holding. We added
to positions in Europe for some time with the intent of further diversifying the
Portfolio's portfolio. In our view, an underweight position in Europe is not
warranted given the up-tick in growth we have seen there. We believe growth in
Europe should be at least as good as in the United States, if not better. In
addition, we do not expect
4 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007
margin compression to be as difficult as it could be in the United States. We
anticipate loan growth and deposit growth that is better than we have seen in
the United States, with better net interest margins. We also see more growth
opportunities in consumer lending in Europe.
In Asia, we have been adding to the Portfolio's positions in commercial banks in
Japan and South Korea. In Japan, we believe further interest rate increases this
year, which are still possible, would be good for that nation's banks. The
Portfolio's overweight position in South Korean banks and insurance companies,
while materially reduced, remains significant, as we continue to see value in
their combination of high profitability, high growth and relatively low
valuations. In our view, the valuations and business prospects of these
companies remain more attractive than most alternatives in both developed and
emerging markets, especially since it presently appears that South Korea's
central bank is done raising interest rates. The Portfolio's reduced exposure to
the United States has funded our repositioning elsewhere in the world.
How would you characterize the Portfolio's position at the close of the period?
The Portfolio ended the period underweight in commercial banks, primarily in the
United States. This reflects our negligible exposure to regional or community
banks, which are more susceptible to interest rate movements or inversions of
the yield curve. Most of the commercial bank exposure in the Portfolio is
overseas. The Portfolio ended the period overweight in securities firms,
diversified financial services with large capital markets businesses, and
insurance. We believe the diversified financial services companies are not as
tied to interest rate changes because many of them have large capital markets
businesses. We also believe the diversified financial services and insurance
sectors are undervalued versus other opportunities in the financials sector.
Additionally, the Portfolio ended the period overweight in real estate
management & development, based on our belief that the property development
sector in China and Hong Kong is attractive. The Portfolio had an underweight
position at period-end in the mortgage REIT sector given the continued weakness
in the United States housing market. The Portfolio's commitment to stocks
outside of the financial sector has been almost entirely eliminated.
From a geographic standpoint, the Portfolio ended the period overweight in Asia
ex-Japan, primarily due to the South Korean overweight. The Portfolio had a
neutral weighting in Japan compared to the MSCI World Financials Index and was
underweight in Europe, although much less so than at the beginning of the
period. We do not want to be materially underweight in Europe, as we prefer the
opportunities we are seeing there. Having said that, it will take time to
significantly change the Portfolio's weighting in Europe, as we are being
selective in our stock-selection process. We will continue to move money out of
the United States and into Europe and Asia as we continue to research
opportunities to diversify the portfolio geographically.
Finally, in our view, larger cap financial stocks still appear to be undervalued
and more attractive than their small- to mid-cap counterparts and, as such,
should experience good earnings growth and multiple expansion going forward.
Jacob L. Silady
Portfolio Manager
April 11, 2007
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007 5
Performance Data
About Fund Performance
Effective October 2, 2006, the Fund's Class A, Class B, Class C and Class I
Shares were redesignated Investor A, Investor B, Investor C and Institutional
Shares, respectively. Class R Shares did not change their designation. As
previously communicated to shareholders, new sales charge schedules came into
effect at the same time for certain of these classes.
The Fund has multiple classes of shares:
o Institutional Shares are not subject to any sales charge. Institutional
Shares bear no ongoing distribution or service fees and are available only
to eligible investors.
o Investor A Shares incur a maximum initial sales charge (front-end load) of
5.25% and a service fee of 0.25% per year (but no distribution fee).
o Investor B Shares are subject to a maximum contingent deferred sales
charge of 4.50% declining to 0% after six years. In addition, Investor B
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.
o Investor C Shares are subject to a distribution fee of 0.75% per year and
a service fee of 0.25% per year. In addition, Investor C Shares are
subject to a 1% contingent deferred sales charge if redeemed within one
year of purchase.
o Class R Shares do not incur a maximum initial sales charge (front-end
load) or deferred sales charge. These shares are subject to a distribution
fee of 0.25% per year and a service fee of 0.25% per year. Class R Shares
are available only to certain retirement plans. Prior to inception, Class
R Share performance results are those of Institutional Shares (which have
no distribution or service fees) restated for Class R Share fees.
Performance information reflects past performance and does not guarantee future
results. Current performance may be lower or higher than the performance data
quoted. Refer to www.blackrock.com to obtain performance data current to the
most recent month-end. Performance results do not reflect the deduction of taxes
that a shareholder would pay on Fund distributions or the redemption of Fund
shares. The Fund may charge a 2% redemption fee for sales or exchanges of shares
within 30 days of purchase or exchange. Performance data does not reflect this
potential fee. Figures shown in each of the following tables assume reinvestment
of all dividends and capital gain distributions, if any, at net asset value 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.
Recent Performance Results
6-Month 12-Month Since Inception
As of March 31, 2007 Total Return Total Return Total Return
================================================================================
Institutional Shares* + 8.68% + 0.25% +179.33%
- --------------------------------------------------------------------------------
Investor A Shares* + 8.53 0.00 +174.22
- --------------------------------------------------------------------------------
Investor B Shares* + 8.18 - 0.71 +159.23
- --------------------------------------------------------------------------------
Investor C Shares* + 8.07 - 0.80 +158.98
- --------------------------------------------------------------------------------
Class R Shares* + 8.36 - 0.24 +170.71
- --------------------------------------------------------------------------------
MSCI World Index** +11.07 +15.44 + 26.12
- --------------------------------------------------------------------------------
MSCI World Financials Index*** + 8.39 +15.06 + 74.04
- --------------------------------------------------------------------------------
* Investment results shown do not reflect sales charges; results shown would
be lower if a sales charge was included. Cumulative total investment
returns are based on changes in net asset values for the periods shown,
and assume reinvestment of all dividends and capital gains distributions
at net asset value on the ex-dividend date. Since inception total return
is from 11/26/99.
** This unmanaged market capitalization-weighted Index is comprised of a
representative sampling of large-, medium- and small-capitalization
companies in 23 countries, including the United States. Since inception
total return is from 11/26/99.
*** This Index is comprised of the constituents of the MSCI World Index that
are classified into the financial sector. This secor contains companies
involved in activities such as banking, mortgage finance, consumer
finance, specialized finance, investment banking and brokerage, asset
management and custody, corporate lending, insurance, financial investment
and real estate including REITs. Since inception total return is from
11/30/99.
6 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007
Performance Data (concluded)
Global Financial Services
BlackRock Global Financial Services Fund, Inc. -- EDGAR
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the Fund's Institutional,
Investor A, Investor B, Investor C and Class R Shares compared to growth of an
investment in the MSCI World Index and the MSCI World Financial Index. Values
are from November 26, 1999 to March 2007:
MSCI World
Institutional Investor A Investor B Investor C Class R MSCI World Financial
Shares*+ Shares*+ Shares*+ Shares*+ Shares*+ Index++ Index+++
11/26/99** $10,000 $ 9,475 $10,000 $10,000 $10,000 $10,000 $10,000
3/00 $10,250 $ 9,702 $10,220 $10,220 $10,233 $10,705 $10,002
3/01 $11,498 $10,859 $11,342 $11,342 $11,422 $ 8,018 $ 9,794
3/02 $12,678 $11,948 $12,377 $12,376 $12,531 $ 7,693 $ 9,383
3/03 $ 9,787 $ 9,202 $ 9,457 $ 9,456 $ 9,662 $ 5,820 $ 7,175
3/04 $17,882 $16,764 $17,106 $17,098 $17,599 $ 8,373 $11,221
3/05 $20,250 $18,930 $19,181 $19,165 $19,827 $ 9,257 $12,137
3/06 $27,865 $25,983 $26,109 $26,105 $27,136 $10,926 $15,126
3/07 $27,933 $25,982 $25,923 $25,898 $27,071 $12,612 $17,404
* Assuming maximum sales charge, if any, transaction costs and other
operating expenses, including advisory fees.
** Commencement of operations.
+ The Fund invests primarily in a portfolio of common stocks of financial
services companies that Fund management believes have the potential to
increase in value.
++ This unmanaged market capitalization-weighted Index is comprised of a
representative sampling of large-, medium- and small-capitalization
companies in 23 countries, including the United States.
+++ This Index is comprised of the constituents of the MSCI World Index that
are classified into the financial sector. This sector contains companies
involved in activities such as banking, mortgage finance, consumer
finance, specialized finance, investment banking and brokerage, asset
management and custody, corporate lending, insurance, financial investment
and real estate including REITs. The starting date for the Index in the
Institutional, Investor A, Investor B, Investor C and Class R Shares'
graph is 11/30/99.
Past performance is not indicative of future results.
Average Annual Total Return
Return
================================================================================
Institutional Shares
================================================================================
One Year Ended 3/31/07 + 0.25%
- --------------------------------------------------------------------------------
Five Years Ended 3/31/07 +17.12
- --------------------------------------------------------------------------------
Inception (11/26/99) through 3/31/07 +15.01
- --------------------------------------------------------------------------------
Return Without Return With
Sales Charge Sales Charge*
================================================================================
Investor A Shares
================================================================================
One Year Ended 3/31/07 0.00% - 5.25%
- --------------------------------------------------------------------------------
Five Years Ended 3/31/07 +16.81 +15.56
- --------------------------------------------------------------------------------
Inception (11/26/99) through 3/31/07 +14.72 +13.88
- --------------------------------------------------------------------------------
Return Return
Without CDSC With CDSC+++
================================================================================
Investor B Shares+
================================================================================
One Year Ended 3/31/07 - 0.71% - 4.98%
- --------------------------------------------------------------------------------
Five Years Ended 3/31/07 +15.93 +15.71
- --------------------------------------------------------------------------------
Inception (11/26/99) through 3/31/07 +13.85 +13.85
- --------------------------------------------------------------------------------
Return Return
Without CDSC With CDSC+++
================================================================================
Investor C Shares++
================================================================================
One Year Ended 3/31/07 - 0.80% - 1.74%
- --------------------------------------------------------------------------------
Five Years Ended 3/31/07 +15.91 +15.91
- --------------------------------------------------------------------------------
Inception (11/26/99) through 3/31/07 +13.83 +13.83
- --------------------------------------------------------------------------------
Return
================================================================================
Class R Shares
================================================================================
One Year Ended 3/31/07 - 0.24%
- --------------------------------------------------------------------------------
Five Years Ended 3/31/07 +16.65
- --------------------------------------------------------------------------------
Inception (11/26/99) through 3/31/07 +14.52
- --------------------------------------------------------------------------------
* Assuming maximum sales charge of 5.25%.
+ Maximum contingent deferred sales charge is 4.50% and is reduced to 0%
after six years.
++ Maximum contingent deferred sales charge is 1% and is reduced to 0% after
one year.
+++ Assuming payment of applicable contingent deferred sales charge.
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007 7
Disclosure of Expenses
Shareholders of this Fund may incur the following charges: (a) expenses related
to transactions, including sales charges, redemption fees and exchange fees; and
(b) operating expenses, including advisory fees, distribution fees including
12b-1 fees, and other Fund expenses. The following example (which is based on a
hypothetical investment of $1,000 invested on October 1, 2006 and held through
March 31, 2007) 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 first table below 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 in the first line under the
heading entitled "Expenses Paid During the Period."
The second table below 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 this 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 table are intended to highlight shareholders' ongoing
costs only and do not reflect any transactional expenses, such as sales charges,
redemption fees or exchange fees. Therefore, the second table 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.
Expenses Paid
Beginning Ending During the Period*
Account Value Account Value October 1, 2006
October 1, 2006 March 31, 2007 to March 31, 2007
====================================================================================================================================
Actual
====================================================================================================================================
Institutional $1,000 $ 1,086.80 $ 7.39
- ------------------------------------------------------------------------------------------------------------------------------------
Investor A $1,000 $ 1,085.30 $ 8.68
- ------------------------------------------------------------------------------------------------------------------------------------
Investor B $1,000 $ 1,081.80 $ 12.61
- ------------------------------------------------------------------------------------------------------------------------------------
Investor C $1,000 $ 1,080.70 $ 12.66
- ------------------------------------------------------------------------------------------------------------------------------------
Class R $1,000 $ 1,083.60 $ 10.03
====================================================================================================================================
Hypothetical (5% annual return before expenses)**
====================================================================================================================================
Institutional $1,000 $ 1,017.82 $ 7.14
- ------------------------------------------------------------------------------------------------------------------------------------
Investor A $1,000 $ 1,016.57 $ 8.40
- ------------------------------------------------------------------------------------------------------------------------------------
Investor B $1,000 $ 1,012.78 $ 12.19
- ------------------------------------------------------------------------------------------------------------------------------------
Investor C $1,000 $ 1,012.73 $ 12.24
- ------------------------------------------------------------------------------------------------------------------------------------
Class R $1,000 $ 1,015.28 $ 9.70
- ------------------------------------------------------------------------------------------------------------------------------------
* For each class of the Fund, expenses are equal to the annualized expense
ratio for the class (1.42% for Institutional, 1.67% for Investor A, 2.43%
for Investor B, 2.44% for Investor C and 1.93% for Class R), multiplied by
the average account value over the period, multiplied by 182/365 (to
reflect the one-half year period shown). Because the Fund is a feeder
fund, the expense table example reflects the expenses of both the feeder
fund and the master portfolio in which it invests.
** 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.
8 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007
Statement of Assets and Liabilities
BlackRock Global Financial Services Fund, Inc.
As of March 31, 2007 (Unaudited)
==================================================================================================================================
Assets
- ----------------------------------------------------------------------------------------------------------------------------------
Investment in Global Financial Services Portfolio (the "Portfolio"), at value
(identified cost -- $75,653,717) ........................................................ $94,736,741
Prepaid expenses and other assets ......................................................... 78,028
-----------
Total assets .............................................................................. 94,814,769
-----------
==================================================================================================================================
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------------
Payables:
Other affiliates ...................................................................... $ 74,543
Distributor ........................................................................... 46,657
Administrative fees ................................................................... 27,086
-----------
Total liabilities ......................................................................... 148,286
-----------
==================================================================================================================================
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets ................................................................................ $94,666,483
===========
==================================================================================================================================
Net Assets Consist of
- ----------------------------------------------------------------------------------------------------------------------------------
Institutional Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ....... $ 100,021
Investor A Shares of Common Stock, $.10 par value, 100,000,000 shares authorized .......... 146,222
Investor B Shares of Common Stock, $.10 par value, 100,000,000 shares authorized .......... 160,376
Investor C Shares of Common Stock, $.10 par value, 100,000,000 shares authorized .......... 136,835
Class R Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ............. 43,997
Paid-in capital in excess of par .......................................................... 62,192,795
Undistributed investment income -- net .................................................... $ 26,334
Undistributed realized capital gains allocated from the Portfolio -- net .................. 12,776,879
Unrealized appreciation allocated from the Portfolio -- net ............................... 19,083,024
-----------
Total accumulated earnings -- net ......................................................... 31,886,237
-----------
Net Assets ................................................................................ $94,666,483
===========
==================================================================================================================================
Net Asset Value
- ----------------------------------------------------------------------------------------------------------------------------------
Institutional -- Based on net assets of $16,374,011 and 1,000,208 shares outstanding ...... $ 16.37
===========
Investor A -- Based on net assets of $23,792,751 and 1,462,219 shares outstanding ......... $ 16.27
===========
Investor B -- Based on net assets of $25,700,414 and 1,603,760 shares outstanding ......... $ 16.03
===========
Investor C -- Based on net assets of $21,776,526 and 1,368,347 shares outstanding ......... $ 15.91
===========
Class R -- Based on net assets of $7,022,781 and 439,972 shares outstanding ............... $ 15.96
===========
See Notes to Financial Statements.
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007 9
Statement of Operations BlackRock Global Financial Services Fund, Inc.
For the Six Months Ended March 31, 2007 (Unaudited)
==================================================================================================================================
Investment Income
- ----------------------------------------------------------------------------------------------------------------------------------
Investment income allocated from the Portfolio:
Dividends ............................................................................. $ 1,002,776
Interest from affiliates .............................................................. 90,111
Securities lending -- net ............................................................. 7,949
Expenses .............................................................................. (337,600)
-----------
Total income .............................................................................. 763,236
-----------
==================================================================================================================================
Expenses
- ----------------------------------------------------------------------------------------------------------------------------------
Administration fees ....................................................................... $ 169,816
Service and distribution fees -- Investor B ............................................... 137,513
Service and distribution fees -- Investor C ............................................... 112,977
Registration fees ......................................................................... 30,304
Printing and shareholder reports .......................................................... 29,856
Transfer agent fees -- Investor B ......................................................... 29,497
Service fees -- Investor A ................................................................ 29,375
Transfer agent fees -- Investor C ......................................................... 24,679
Transfer agent fees -- Investor A ......................................................... 24,148
Transfer agent fees -- Institutional ...................................................... 17,481
Professional fees ......................................................................... 16,254
Service and distribution fees -- Class R .................................................. 16,087
Transfer agent fees -- Class R ............................................................ 6,621
Other ..................................................................................... 7,513
-----------
Total expenses ............................................................................ 652,121
-----------
Investment income -- net .................................................................. 111,115
-----------
==================================================================================================================================
Realized & Unrealized Gain (Loss) Allocated from the Portfolio -- Net
- ----------------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) on:
Investments -- net .................................................................... 15,425,141
Foreign currency transactions -- net .................................................. (20,763) 15,404,378
-----------
Change in unrealized appreciation/depreciation on:
Investments -- net .................................................................... (7,689,115)
Foreign currency transactions -- net .................................................. 4,063 (7,685,052)
-------------------------
Total realized and unrealized gain -- net ................................................. 7,719,326
-----------
Net Increase in Net Assets Resulting from Operations ...................................... $ 7,830,441
===========
See Notes to Financial Statements.
10 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007
Statements of Changes in Net Assets
BlackRock Global Financial Services Fund, Inc.
For the Six
Months Ended For the
March 31, Year Ended
2007 September 30,
Increase (Decrease) in Net Assets: (Unaudited) 2006
==================================================================================================================================
Operations
- ----------------------------------------------------------------------------------------------------------------------------------
Investment income -- net .................................................................. $ 111,115 $ 3,223,085
Realized gain -- net ...................................................................... 15,404,378 3,978,060
Change in unrealized appreciation/depreciation -- net ..................................... (7,685,052) 5,772,820
-------------------------
Net increase in net assets resulting from operations ...................................... 7,830,441 12,973,965
-------------------------
==================================================================================================================================
Dividends & Distributions to Shareholders
- ----------------------------------------------------------------------------------------------------------------------------------
Investment income -- net:
Institutional ......................................................................... (457,900) (1,223,262)
Investor A ............................................................................ (573,005) (323,686)
Investor B ............................................................................ (464,138) (424,641)
Investor C ............................................................................ (403,911) (233,824)
Class R ............................................................................... (151,046) (44,595)
Realized gain -- net:
Institutional ......................................................................... (494,767) (5,111,324)
Investor A ............................................................................ (682,148) (1,455,871)
Investor B ............................................................................ (836,184) (3,145,740)
Investor C ............................................................................ (683,251) (1,689,548)
Class R ............................................................................... (189,041) (221,591)
-------------------------
Net decrease in net assets resulting from dividends and distributions to shareholders ..... (4,935,391) (13,874,082)
-------------------------
==================================================================================================================================
Capital Share Transactions
- ----------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets derived from capital share transactions ........................ (4,776,963) (10,473,381)
-------------------------
==================================================================================================================================
Redemption Fee
- ----------------------------------------------------------------------------------------------------------------------------------
Redemption fee ............................................................................ 1,281 15,349
-------------------------
==================================================================================================================================
Net Assets
- ----------------------------------------------------------------------------------------------------------------------------------
Total decrease in net assets .............................................................. (1,880,632) (11,358,149)
Beginning of period ....................................................................... 96,547,115 107,905,264
-------------------------
End of period* ............................................................................ $94,666,483 $96,547,115
=========================
* Undistributed investment income -- net .............................................. $ 26,334 $ 1,965,219
=========================
See Notes to Financial Statements.
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007 11
Financial Highlights BlackRock Global Financial Services Fund, Inc.
Institutional
-------------------------------------------------------------------------
For the Six
Months Ended
The following per share data and ratios March 31, For the Year Ended September 30,
have been derived from information provided 2007 ----------------------------------------------------------
in the financial statements. (Unaudited) 2006 2005 2004 2003 2002
=================================================================================================================================
Per Share Operating Performance
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ..... $ 15.93 $ 15.53 $ 14.12 $ 12.76 $ 9.45 $ 10.89
-----------------------------------------------------------------------
Investment income -- net** ............... .07 .50 .44 .20 .09 .05
Realized and unrealized gain (loss) -- net 1.33++ 1.89++ 3.17++ 2.78++ 3.53 (1.07)
-----------------------------------------------------------------------
Total from investment operations ......... 1.40 2.39 3.61 2.98 3.62 (1.02)
Less dividends and distributions: -----------------------------------------------------------------------
Investment income -- net ............. (.46) (.38) (.18) -- -- --
Realized gain -- net ................. (.50) (1.61) (2.02) (1.62) (.31) (.42)
-----------------------------------------------------------------------
Total dividends and distributions ........ (.96) (1.99) (2.20) (1.62) (.31) (.42)
-----------------------------------------------------------------------
Net asset value, end of period ........... $ 16.37 $ 15.93 $ 15.53 $ 14.12 $ 12.76 $ 9.45
=======================================================================
=================================================================================================================================
Total Investment Return@@
- ---------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ....... 8.68%@ 15.48% 27.37% 25.09% 39.10% (9.85%)
=======================================================================
=================================================================================================================================
Ratios to Average Net Assets+
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses ................................. 1.42%* 1.27% 1.32% 1.53% 1.60% 1.51%
=======================================================================
Investment income -- net ................. .85%* 3.05% 2.93% 1.46% .81% .43%
=======================================================================
=================================================================================================================================
Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) . $16,374 $17,843 $49,612 $11,034 $11,325 $ 8,641
=======================================================================
Portfolio turnover of the Portfolio ...... 32.35% 79.29% 80.05% 115.38% 205.93% 144.60%
=======================================================================
* Annualized.
** Based on average shares outstanding.
+ Includes the Fund's share of the Portfolio's allocated expenses and/or
investment income -- net.
++ Includes a redemption fee, which is less than $.01 per share.
@ Aggregate total investment return.
@@ Total investment returns exclude the effects of any sales charges.
See Notes to Financial Statements.
12 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007
Financial Highlights (continued)
BlackRock Global Financial Services Fund, Inc.
Investor A
-------------------------------------------------------------------------
For the Six
Months Ended
The following per share data and ratios March 31, For the Year Ended September 30,
have been derived from information provided 2007 ----------------------------------------------------------
in the financial statements. (Unaudited) 2006 2005 2004 2003 2002
=================================================================================================================================
Per Share Operating Performance
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ..... $ 15.82 $ 15.45 $ 14.06 $ 12.71 $ 9.43 $ 10.87
-----------------------------------------------------------------------
Investment income -- net*** .............. .05 .44 .27 .17 .06 .02
Realized and unrealized gain (loss) -- net 1.32++ 1.90++ 3.29++ 2.76++ 3.53 (1.07)
-----------------------------------------------------------------------
Total from investment operations ......... 1.37 2.34 3.56 2.93 3.59 (1.05)
-----------------------------------------------------------------------
Less dividends and distributions:
Investment income -- net ............. (.42) (.36) (.15) -- -- --
Realized gain -- net ................. (.50) (1.61) (2.02) (1.58) (.31) (.39)
-----------------------------------------------------------------------
Total dividends and distributions ........ (.92) (1.97) (2.17) (1.58) (.31) (.39)
-----------------------------------------------------------------------
Net asset value, end of period ........... $ 16.27 $ 15.82 $ 15.45 $ 14.06 $ 12.71 $ 9.43
=======================================================================
=================================================================================================================================
Total Investment Return**
- ---------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ....... 8.53%@ 15.17% 27.08% 24.75% 38.83% (10.15%)
=======================================================================
=================================================================================================================================
Ratios to Average Net Assets+
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses ................................. 1.67%* 1.54% 1.62% 1.78% 1.86% 1.76%
=======================================================================
Investment income -- net ................. .60%* 2.66% 1.87% 1.21% .59% .17%
=======================================================================
=================================================================================================================================
Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) . $23,793 $24,078 $10,040 $ 8,684 $ 7,800 $ 5,520
=======================================================================
Portfolio turnover of the Portfolio ...... 32.35% 79.29% 80.05% 115.38% 205.93% 144.60%
=======================================================================
* Annualized.
** Total investment returns exclude the effects of sales charges.
*** Based on average shares outstanding.
+ Includes the Fund's share of the Portfolio's allocated expenses and/or
investment income -- net.
++ Includes a redemption fee, which is less than $.01 per share.
@ Aggregate total investment return.
See Notes to Financial Statements.
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007 13
Financial Highlights (continued)
BlackRock Global Financial Services Fund, Inc.
Investor B
-------------------------------------------------------------------------
For the Six
Months Ended
The following per share data and ratios March 31, For the Year Ended September 30,
have been derived from information provided 2007 ----------------------------------------------------------
in the financial statements. (Unaudited) 2006 2005 2004 2003 2002
=================================================================================================================================
Per Share Operating Performance
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ..... $ 15.52 $ 15.18 $ 13.86 $ 12.51 $ 9.36 $ 10.78
-----------------------------------------------------------------------
Investment income (loss) -- net*** ....... (.01) .33 .16 .06 (.03) (.07)
Realized and unrealized gain (loss) -- net 1.30++ 1.84++ 3.23++ 2.74++ 3.49 (1.06)
-----------------------------------------------------------------------
Total from investment operations ......... 1.29 2.17 3.39 2.80 3.46 (1.13)
-----------------------------------------------------------------------
Less dividends and distributions:
Investment income -- net ............. (.28) (.22) (.05) -- -- --
Realized gain -- net ................. (.50) (1.61) (2.02) (1.45) (.31) (.29)
-----------------------------------------------------------------------
Total dividends and distributions ........ (.78) (1.83) (2.07) (1.45) (.31) (.29)
-----------------------------------------------------------------------
Net asset value, end of period ........... $ 16.03 $ 15.52 $ 15.18 $ 13.86 $ 12.51 $ 9.36
=======================================================================
=================================================================================================================================
Total Investment Return**
- ---------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ....... 8.18%@ 14.23% 26.08% 23.89% 37.71% (10.83%)
=======================================================================
=================================================================================================================================
Ratios to Average Net Assets+
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses ................................. 2.43%* 2.30% 2.39% 2.55% 2.64% 2.53%
=======================================================================
Investment income (loss) -- net .......... (.17%)* 2.08% 1.09% .46% (.24%) (.60%)
=======================================================================
=================================================================================================================================
Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) . $25,700 $27,397 $31,126 $33,733 $37,202 $36,476
=======================================================================
Portfolio turnover of the Portfolio ...... 32.35% 79.29% 80.05% 115.38% 205.93% 144.60%
=======================================================================
* Annualized.
** Total investment returns exclude the effects of sales charges.
*** Based on average shares outstanding.
+ Includes the Fund's share of the Portfolio's allocated expenses and/or
investment income -- net.
++ Includes a redemption fee, which is less than $.01 per share.
@ Aggregate total investment return.
See Notes to Financial Statements.
14 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007
Financial Highlights (continued)
BlackRock Global Financial Services Fund, Inc.
Investor C
-------------------------------------------------------------------------
For the Six
Months Ended
The following per share data and ratios March 31, For the Year Ended September 30,
have been derived from information provided 2007 ----------------------------------------------------------
in the financial statements. (Unaudited) 2006 2005 2004 2003 2002
=================================================================================================================================
Per Share Operating Performance
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ..... $ 15.44 $ 15.10 $ 13.82 $ 12.51 $ 9.36 $ 10.78
-----------------------------------------------------------------------
Investment income (loss) -- net*** ....... (.01) .30 .16 .07 (.02) (.07)
Realized and unrealized gain (loss) -- net 1.27++ 1.87++ 3.21++ 2.72++ 3.48 (1.06)
-----------------------------------------------------------------------
Total from investment operations ......... 1.26 2.17 3.37 2.79 3.46 (1.13)
-----------------------------------------------------------------------
Less dividends and distributions:
Investment income -- net ............. (.29) (.22) (.07) -- -- --
Realized gain -- net ................. (.50) (1.61) (2.02) (1.48) (.31) (.29)
-----------------------------------------------------------------------
Total dividends and distributions ........ (.79) (1.83) (2.09) (1.48) (.31) (.29)
-----------------------------------------------------------------------
Net asset value, end of period ........... $ 15.91 $ 15.44 $ 15.10 $ 13.82 $ 12.51 $ 9.36
=======================================================================
=================================================================================================================================
Total Investment Return**
- ---------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ....... 8.07%@ 14.35% 26.02% 23.83% 37.71% (10.84%)
=======================================================================
=================================================================================================================================
Ratios to Average Net Assets+
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses ................................. 2.44%* 2.31% 2.40% 2.56% 2.64% 2.55%
=======================================================================
Investment income (loss) -- net .......... (.17%)* 1.91% 1.10% .48% (.22%) (.61%)
=======================================================================
=================================================================================================================================
Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) . $21,777 $21,915 $15,087 $16,714 $13,762 $ 9,666
=======================================================================
Portfolio turnover of the Portfolio ...... 32.35% 79.29% 80.05% 115.38% 205.93% 144.60%
=======================================================================
* Annualized.
** Total investment returns exclude the effects of sales charges.
*** Based on average shares outstanding.
+ Includes the Fund's share of the Portfolio's allocated expenses and/or
investment income -- net.
++ Includes a redemption fee, which is less than $.01 per share.
@ Aggregate total investment return.
See Notes to Financial Statements.
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007 15
Financial Highlights (concluded)
BlackRock Global Financial Services Fund, Inc.
Class R
-------------------------------------------------------------------------
For the Six For the
Months Ended For the Year Ended Period
The following per share data and ratios March 31, September 30, Jan. 3, 2003@@
have been derived from information provided 2007 --------------------------------------- to Sept. 30,
in the financial statements. (Unaudited) 2006 2005 2004 2003
=================================================================================================================================
Per Share Operating Performance
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ... $ 15.54 $ 15.21 $ 13.91 $ 12.62 $ 10.16
-------------------------------------------------------------------------
Investment income -- net** ............. .03 .36 .29 .14 .04
Realized and unrealized gain -- net .... 1.29++ 1.90++ 3.18++ 2.74++ 2.42
-------------------------------------------------------------------------
Total from investment operations ....... 1.32 2.26 3.47 2.88 2.46
-------------------------------------------------------------------------
Less dividends and distributions:
Investment income -- net ........... (.40) (.32) (.15) -- --
Realized gain -- net ............... (.50) (1.61) (2.02) (1.59) --
-------------------------------------------------------------------------
Total dividends and distributions ...... (.90) (1.93) (2.17) (1.59) --
-------------------------------------------------------------------------
Net asset value, end of period ......... $ 15.96 $ 15.54 $ 15.21 $ 13.91 $ 12.62
=========================================================================
=================================================================================================================================
Total Investment Return
- ---------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ..... 8.36%@ 14.90% 26.74% 24.51% 24.21%@
=========================================================================
=================================================================================================================================
Ratios to Average Net Assets+
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses ............................... 1.93%* 1.80% 1.83% 2.11% 2.17%*
=========================================================================
Investment income -- net ............... .37%* 2.22% 2.02% .99% .45%*
=========================================================================
=================================================================================================================================
Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 7,023 $ 5,314 $ 2,040 $ 555 $ 49
=========================================================================
Portfolio turnover of the Portfolio .... 32.35% 79.29% 80.05% 115.38% 205.93%
=========================================================================
* Annualized.
** Based on average shares outstanding.
+ Includes the Fund's share of the Portfolio's allocated expenses and/or
investment income -- net.
++ Includes a redemption fee, which is less than $.01 per share.
@ Aggregate total investment return.
@@ Commencement of operations.
See Notes to Financial Statements.
16 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007
Notes to Financial Statements (Unaudited)
BlackRock Global Financial Services Fund, Inc.
1. Significant Accounting Policies:
BlackRock Global Financial Services Fund, Inc. (the "Fund") is registered under
the Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund seeks to achieve its investment
objective by investing all of its assets in Global Financial Services Portfolio
(the "Portfolio") of Global Financial Services Master Trust, which has the same
investment objective and strategies as the Fund. The value of the Fund's
investment in the Portfolio reflects the Fund's proportionate interest in the
net assets of the Portfolio. The performance of the Fund is directly affected by
the performance of the Portfolio. The financial statements of the Portfolio,
including the Schedule of Investments, are included elsewhere in this report and
should be read in conjunction with the Fund's financial statements. The Fund's
financial statements are prepared in conformity with U.S. generally accepted
accounting principles, which may require the use of management accruals and
estimates. Actual results may differ from these estimates. These unaudited
financial statements reflect all adjustments, which are, in the opinion of
management, necessary to present a fair statement of the results for the interim
period. All such adjustments are of a normal, recurring nature. The percentage
of the Portfolio owned by the Fund at March 31, 2007 was 100%. The Fund offers
multiple classes of shares. Effective October 2, 2006, Class I, Class A, Class B
and Class C Shares were redesignated Institutional, Investor A, Investor B and
Investor C Shares, respectively. Class R Shares did not change their
designation. Institutional Shares are sold only to certain eligible investors.
Investor A Shares are sold with a front-end sales charge. Shares of Investor B
and Investor C Shares may be subject to a contingent deferred sales charge.
Class R Shares are sold only to certain retirement 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. 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
certain changes to the Investor A distribution plan). Income, expenses (other
than expenses attributable to a specific class) and realized and unrealized
gains and losses are allocated daily to each class based on its relative net
assets. The following is a summary of significant accounting policies followed
by the Fund.
(a) Valuation of investments -- The Fund records its investment in the Portfolio
at fair value. Valuation of securities held by the Portfolio is discussed in
Note 1(a) of the Portfolio's Notes to Financial Statements, which are included
elsewhere in this report.
(b) Investment income and expenses -- The Fund records daily its proportionate
share of the Portfolio's income, expenses and realized and unrealized gains and
losses. In addition, the Fund accrues its own expenses.
(c) Income taxes -- It is the Fund's policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to shareholders. Therefore,
no federal income tax provision is required.
(d) Prepaid registration fees -- Prepaid registration fees are charged to
expense as the related shares are issued.
(e) Dividends and distributions -- Dividends and distributions paid by the Fund
are recorded on the ex-dividend dates.
(f) Investment transactions -- Investment transactions in the Portfolio are
accounted for on a trade date basis.
(g) Recent accounting pronouncements -- In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes -- an interpretation of FASB Statement No. 109."
FIN 48 prescribes the minimum recognition threshold a tax position must meet in
connection with accounting for uncertainties in income tax positions taken or
expected to be taken by an entity, including mutual funds, before being measured
and recognized in the financial statements. Adoption of FIN 48 is required for
the last net asset value calculation in the first required financial statement
reporting period for fiscal years beginning after December 15, 2006. The impact
on the Fund's financial statements, if any, is currently being assessed.
In September 2006, "Statement of Financial Accounting Standards No. 157, Fair
Value Measurements" ("FAS 157"), was issued and is effective for fiscal years
beginning after November 15, 2007. FAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. At this time, management is evaluating the implications of FAS 157
and its impact on the Fund's financial statements, if any, has not been
determined.
In addition, in February 2007, FASB issued "Statement of Financial Accounting
Standards No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities" ("FAS 159"), which is effective for fiscal years beginning after
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007 17
Notes to Financial Statements (continued)
BlackRock Global Financial Services Fund, Inc.
November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
year that begins on or before November 15, 2007, provided the entity also elects
to apply the provisions of FAS 157. FAS 159 permits entities to choose to
measure many financial instruments and certain other items at fair value that
are not currently required to be measured at fair value. FAS 159 also
establishes presentation and disclosure requirements designed to facilitate
comparisons between entities that choose different measurement attributes for
similar types of assets and liabilities. At this time, management is evaluating
the implications of FAS 159 and its impact on the Fund's financial statements,
if any, has not been determined.
2. Transactions with Affiliates:
The Investment Advisory Agreement between the Trust, on behalf of the Fund, and
BlackRock Advisors, LLC (the "Manager"), an indirect, wholly owned subsidiary of
BlackRock, Inc., became effective on September 29, 2006. Prior to September 29,
2006, Fund Asset Management, L.P. ("FAM") was the Trust's manager. The general
partner of FAM is Princeton Services, Inc. ("PSI"), an indirect, wholly owned
subsidiary of Merrill Lynch & Co., Inc. ("Merrill Lynch"), which is the limited
partner. Merrill Lynch and The PNC Financial Services Group, Inc. are the
principal owners of BlackRock, Inc.
The Fund has entered into an Administration Agreement with the Manager. The Fund
pays a monthly fee at an annual rate of .35% of the Fund's average daily net
assets for the performance of administrative services (other than investment
advice and related portfolio activities) necessary for the operation of the
Fund. Prior to September 29, 2006, FAM acted as the Fund's administrator and was
compensated at the same fee rate.
The Fund has also entered into separate Distribution Agreements and Distribution
Plans with FAM Distributors, Inc. ("FAMD") and BlackRock Distributors, Inc.
("BDI"), collectively, the "Distributor." FAMD is a wholly owned subsidiary of
Merrill Lynch Group, Inc. and BDI is an affiliate of BlackRock, Inc.
Pursuant to the Distribution Plans adopted by the Fund in accordance with Rule
12b-1 under the Investment Company Act of 1940, the Fund pays the Distributor
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 as
follows:
- --------------------------------------------------------------------------------
Distribution
Service Fee Fee
- --------------------------------------------------------------------------------
Investor A ....................................... .25% --
Investor B ....................................... .25% .75%
Investor C ....................................... .25% .75%
Class R .......................................... .25% .25%
- --------------------------------------------------------------------------------
Pursuant to sub-agreements with each Distributor, broker-dealers, including
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"), a wholly owned
subsidiary of Merrill Lynch, and an affiliate of each Distributor, provides
shareholder servicing and distribution services to the Fund. The ongoing service
fee compensates the Distributor and each broker-dealer (including MLPF&S) for
providing shareholder servicing to Investor A, Investor B, Investor C and Class
R shareholders. The ongoing distribution fee compensates each Distributor and
MLPF&S for providing shareholder services and distribution-related services to
Investor B, Investor C and Class R shareholders.
For the six months ended March 31, 2007, FAMD and BDI earned underwriting
discounts and MLPF&S earned dealer concessions on sales of the Fund's Investor A
Shares as follows:
- --------------------------------------------------------------------------------
FAMD MLPF&S BDI
- --------------------------------------------------------------------------------
Investor A .......................... $1,140 $11,692 $504
- --------------------------------------------------------------------------------
For the six months ended March 31, 2007, MLPF&S received contingent deferred
sales charges of $4,319 and $2,668 relating to transactions in Investor B and
Investor C Shares, respectively.
Furthermore, MLPF&S received contingent deferred sales charges of $2,182
relating to transactions subject to front-end sales charge waivers in Class A.
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. During the six months
ended March 31, 2007, the following amounts have been accrued by the Fund to
reimburse the Manager for costs incurred running the call center, which are a
component of the transfer agent fees in the accompanying Statement of
Operations.
18 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007
Notes to Financial Statements (continued)
BlackRock Global Financial Services Fund, Inc.
- --------------------------------------------------------------------------------
Call Center
Fees
- --------------------------------------------------------------------------------
Institutional .................................................. $237
Investor A ..................................................... $642
Investor B ..................................................... $460
Investor C ..................................................... $450
Class R ........................................................ $ 31
- --------------------------------------------------------------------------------
PFPC Inc., an indirect, wholly owned subsidiary of PNC and an affiliate of the
Manager, is the Fund's transfer agent.
Certain officers and/or directors of the Fund are officers and/or directors of
BlackRock, Inc. or its affiliates.
3. Capital Share Transactions:
Net decrease in net assets derived from capital share transactions was
$4,776,963 and $10,473,381 for the six months ended March 31, 2007 and for the
year ended September 30, 2006, respectively.
Transactions in capital shares for each class were as follows:
- -------------------------------------------------------------------------------
Institutional Shares for the Six Dollar
Months Ended March 31, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ................................ 141,597 $ 2,349,026
Shares issued to shareholders in
reinvestment of dividends
and distributions ........................ 50,016 828,755
-----------------------------
Total issued ............................... 191,613 3,177,781
Shares redeemed ............................ (311,336) (5,153,105)
-----------------------------
Net decrease ............................... (119,723) $(1,975,324)
=============================
- -------------------------------------------------------------------------------
Institutional Shares for the Year Dollar
Ended September 30, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .............................. 811,951 $ 13,597,704
Shares issued to shareholders in
reinvestment of dividends
and distributions ...................... 89,283 1,413,354
-----------------------------
Total issued ............................. 901,234 15,011,058
Shares redeemed .......................... (2,974,979) (45,917,547)
-----------------------------
Net decrease ............................. (2,073,745) $(30,906,489)
=============================
- -------------------------------------------------------------------------------
Investor A Shares for the Six Months Dollar
Ended March 31, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ................................ 327,896 $ 5,392,930
Shares issued to shareholders in
reinvestment of dividends
and distributions ........................ 70,448 1,161,692
-----------------------------
Total issued ............................... 398,344 6,554,622
Shares redeemed ............................ (457,967) (7,524,148)
-----------------------------
Net decrease ............................... (59,623) $ (969,526)
=============================
- -------------------------------------------------------------------------------
Investor A Shares for the Year Dollar
Ended September 30, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .............................. 1,208,511 $ 19,950,103
Automatic conversion of shares ........... 76,691 1,265,767
Shares issued to shareholders in
reinvestment of dividends
and distributions ...................... 104,496 1,645,815
-----------------------------
Total issued ............................. 1,389,698 22,861,685
Shares redeemed .......................... (517,621) (8,241,866)
-----------------------------
Net increase ............................. 872,077 $ 14,619,819
=============================
- -------------------------------------------------------------------------------
Investor B Shares for the Six Months Dollar
Ended March 31, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ................................ 80,826 $ 1,309,706
Shares issued to shareholders in
reinvestment of dividends
and distributions ........................ 68,311 1,111,411
-----------------------------
Total issued ............................... 149,137 2,421,117
Shares redeemed ............................ (310,270) (5,019,380)
-----------------------------
Net decrease ............................... (161,133) $(2,598,263)
=============================
- -------------------------------------------------------------------------------
Investor B Shares for the Year Dollar
Ended September 30, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .............................. 270,523 $ 4,392,282
Shares issued to shareholders in
reinvestment of dividends
and distributions ...................... 197,570 3,072,220
-----------------------------
Total issued ............................. 468,093 7,464,502
-----------------------------
Automatic conversion of shares ........... (77,928) (1,265,767)
Shares redeemed .......................... (676,273) (10,785,532)
-----------------------------
Total redeemed ........................... (754,201) (12,051,299)
-----------------------------
Net decrease ............................. (286,108) $ (4,586,797)
=============================
- -------------------------------------------------------------------------------
Investor C Shares for the Six Months Dollar
Ended March 31, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ................................ 219,588 $ 3,543,734
Shares issued to shareholders in
reinvestment of dividends
and distributions ........................ 60,727 981,357
-----------------------------
Total issued ............................... 280,315 4,525,091
Shares redeemed ............................ (331,607) (5,347,694)
-----------------------------
Net decrease ............................... (51,292) $ (822,603)
=============================
- -------------------------------------------------------------------------------
Investor C Shares for the Year Dollar
Ended September 30, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .............................. 731,517 $ 11,953,322
Shares issued to shareholders in
reinvestment of dividends
and distributions ...................... 112,742 1,742,999
-----------------------------
Total issued ............................. 844,259 13,696,321
Shares redeemed .......................... (423,568) (6,645,669)
-----------------------------
Net increase ............................. 420,691 $ 7,050,652
=============================
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007 19
Notes to Financial Statements (concluded)
BlackRock Global Financial Services Fund, Inc.
- -------------------------------------------------------------------------------
Class R Shares for the Six Months Dollar
Ended March 31, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ................................ 194,751 $ 3,146,649
Shares issued to shareholders in
reinvestment of dividends
and distributions ........................ 21,019 340,088
-----------------------------
Total issued ............................... 215,770 3,486,737
Shares redeemed ............................ (117,836) (1,897,984)
-----------------------------
Net increase ............................... 97,934 $ 1,588,753
=============================
- -------------------------------------------------------------------------------
Class R Shares for the Year Dollar
Ended September 30, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ................................ 333,121 $ 5,348,447
Shares issued to shareholders in
reinvestment of dividends
and distributions ........................ 17,173 266,186
-----------------------------
Total issued ............................... 350,294 5,614,633
Shares redeemed ............................ (142,390) (2,265,199)
-----------------------------
Net increase ............................... 207,904 $ 3,349,434
=============================
The Fund charges a 2% redemption fee on the proceeds (calculated at market
value) of a redemption (either by sale or exchange) of Fund shares made within
30 days of purchase or exchange. The redemption fee is paid to the Fund and is
intended to offset the trading costs, market impact and other costs associated
with short-term trading into and out of the Fund.
20 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007
Portfolio Information Global Financial Services Portfolio
As of March 31, 2007
Percent of
Ten Largest Equity Holdings Net Assets
- --------------------------------------------------------------------------------
Citigroup, Inc. ...................................................... 4.9%
Bank of America Corp. ................................................ 4.9
American International Group, Inc. ................................... 4.6
JPMorgan Chase & Co. ................................................. 4.4
Goldman Sachs Group, Inc. ............................................ 4.1
Wachovia ............................................................. 3.4
Hartford Financial Services Group, Inc. .............................. 2.8
ACE Ltd. ............................................................. 2.7
UBS AG ............................................................... 2.2
Shinhan Financial Group Co. Ltd. ..................................... 2.0
- --------------------------------------------------------------------------------
Industries Represented in Percent of
the Portfolio Net Assets*
- --------------------------------------------------------------------------------
Commercial Banks .................................................... 25.9%
Insurance ........................................................... 22.3
Diversified Financial Services ...................................... 16.6
Capital Markets ..................................................... 13.0
Real Estate Management & Development ................................ 7.4
Consumer Finance .................................................... 4.8
Thrifts & Mortgage Finance .......................................... 4.7
Household Durables .................................................. 1.0
Real Estate Investment Trusts (REITS) ............................... 0.5
Other** ............................................................. 6.3
- --------------------------------------------------------------------------------
* Total may not equal 100%.
** Includes portfolio holdings in short-term investments and options.
For Portfolio compliance purposes, the Portfolio's industry classifica
tions refer to any one or more of the industry sub-classifications used by
one or more widely recognized market indexes or ratings group indexes,
and/or as defined by Portfolio management. This definition may not apply
for purposes of this report, which may combine industry
sub-classifications for reporting ease.
Geographic Allocation Percent of
by Country Total Investments
- --------------------------------------------------------------------------------
United States ....................................................... 41.1%
South Korea ......................................................... 10.5
United Kingdom ...................................................... 8.0
Japan ............................................................... 7.7
Hong Kong ........................................................... 3.5
France .............................................................. 3.3
Switzerland ......................................................... 2.8
Cayman Islands ...................................................... 2.6
China ............................................................... 2.4
Spain ............................................................... 1.9
Bermuda ............................................................. 1.4
Netherlands ......................................................... 1.2
Denmark ............................................................. 1.1
Ireland ............................................................. 1.1
Indonesia ........................................................... 1.0
Belgium ............................................................. 0.9
Germany ............................................................. 0.7
India ............................................................... 0.7
Turkey .............................................................. 0.6
Austria ............................................................. 0.4
Singapore ........................................................... 0.4
Egypt ............................................................... 0.3
Malaysia ............................................................ 0.2
Other* .............................................................. 6.2
- --------------------------------------------------------------------------------
* Includes portfolio holdings in short-term investments and options.
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007 21
Schedule of Investments as of March 31, 2007 (Unaudited)
Global Financial Services Portfolio (in U.S. dollars)
Shares
Industry Common Stocks Held Value
================================================================================
Europe
- --------------------------------------------------------------------------------
Austria -- 0.4%
Commercial Banks -- 0.4%
Erste Bank der Oesterreichischen
Sparkassen AG 5,200 $ 404,975
--------------------------------------------------------------------
Total Common Stocks in Austria 404,975
================================================================================
Belgium -- 0.9%
Commercial Banks -- 0.2%
KBC Bancassurance Holding 1,800 223,885
--------------------------------------------------------------------
Diversified Financial
Services -- 0.7%
Fortis 13,600 621,146
--------------------------------------------------------------------
Total Common Stocks in Belgium 845,031
================================================================================
Denmark -- 1.1%
Commercial Banks -- 1.1%
Danske Bank A/S 23,100 1,074,708
--------------------------------------------------------------------
Total Common Stocks in Denmark 1,074,708
================================================================================
France -- 3.4%
Commercial Banks -- 1.5%
BNP Paribas SA 13,500 1,410,071
--------------------------------------------------------------------
Insurance -- 1.9%
AXA 41,900 1,776,548
--------------------------------------------------------------------
Total Common Stocks in France 3,186,619
================================================================================
Germany -- 0.8%
Insurance -- 0.8%
Hannover Rueckversicherungs AG
Registered Shares 16,300 726,172
--------------------------------------------------------------------
Total Common Stocks in Germany 726,172
================================================================================
Ireland -- 1.1%
Commercial Banks -- 1.1%
Allied Irish Banks Plc 35,500 1,051,283
--------------------------------------------------------------------
Total Common Stocks in Ireland 1,051,283
================================================================================
Netherlands -- 1.2%
Diversified Financial
Services -- 1.2%
ING Groep NV CVA 27,300 1,154,230
--------------------------------------------------------------------
Total Common Stocks in the Netherlands 1,154,230
================================================================================
Spain -- 1.9%
Commercial Banks -- 1.9%
Banco Santander Central Hispano SA 102,700 1,832,875
--------------------------------------------------------------------
Total Common Stocks in Spain 1,832,875
================================================================================
Switzerland -- 2.9%
Capital Markets -- 2.9%
Julius Baer Holding AG 4,600 627,643
UBS AG 35,400 2,103,345
--------------------------------------------------------------------
Total Common Stocks in Switzerland 2,730,988
================================================================================
Turkey -- 0.6%
Commercial Banks -- 0.6%
Akbank T.A.S 81,987 547,761
--------------------------------------------------------------------
Total Common Stocks in Turkey 547,761
================================================================================
United Kingdom -- 8.2%
Commercial Banks -- 4.4%
Barclays Plc 118,600 1,682,716
HSBC Holdings Plc 86,100 1,507,093
Lloyds TSB Group Plc 90,200 993,998
----------
4,183,807
--------------------------------------------------------------------
Consumer Finance -- 1.4%
Provident Financial Plc 84,600 1,338,497
--------------------------------------------------------------------
Thrifts & Mortgage Finance -- 2.4%
Kensington Group Plc 79,800 1,044,277
Northern Rock Plc 51,900 1,169,402
----------
2,213,679
--------------------------------------------------------------------
Total Common Stocks in the United Kingdom 7,735,983
--------------------------------------------------------------------
Total Common Stocks in Europe -- 22.5% 21,290,625
================================================================================
================================================================================
Middle East
- --------------------------------------------------------------------------------
Egypt -- 0.3%
Commercial Banks -- 0.3%
Commercial International Bank 31,800 310,115
--------------------------------------------------------------------
Total Common Stocks in the Middle East -- 0.3% 310,115
================================================================================
================================================================================
North America
- --------------------------------------------------------------------------------
Bermuda -- 1.4%
Insurance -- 1.4%
Everest Re Group Ltd. 2,600 250,042
RenaissanceRe Holdings Ltd. 21,300 1,067,982
--------------------------------------------------------------------
Total Common Stocks in Bermuda 1,318,024
================================================================================
Cayman Islands -- 2.7%
Insurance -- 2.7%
ACE Ltd. 44,500 2,539,170
--------------------------------------------------------------------
Total Common Stocks in the Cayman Islands 2,539,170
================================================================================
United States -- 42.1%
Capital Markets -- 8.0%
Affiliated Managers Group (a) 13,700 1,484,395
Franklin Resources, Inc. 5,700 688,731
The Goldman Sachs Group, Inc. 18,800 3,884,644
Lehman Brothers Holdings, Inc. 21,600 1,513,512
----------
7,571,282
--------------------------------------------------------------------
Commercial Banks -- 3.4%
Wachovia Corp. 58,756 3,234,518
--------------------------------------------------------------------
Consumer Finance -- 3.4%
American Express Co. 24,365 1,374,186
Capital One Financial Corp. (b) 24,600 1,856,316
----------
3,230,502
--------------------------------------------------------------------
22 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007
Schedule of Investments (continued)
Global Financial Services Portfolio (in U.S. dollars)
Shares
Industry Common Stocks Held Value
================================================================================
North America (concluded)
- --------------------------------------------------------------------------------
United States (concluded)
Diversified Financial
Services -- 14.2%
Bank of America Corp. 90,868 $ 4,636,085
Citigroup, Inc. 90,319 4,636,977
JPMorgan Chase & Co. 85,875 4,154,633
-----------
13,427,695
--------------------------------------------------------------------
Insurance -- 10.3%
The Allstate Corp. 16,133 968,948
American International Group, Inc. 64,332 4,324,397
Hartford Financial Services Group, Inc. 27,912 2,667,733
Prudential Financial, Inc. 19,424 1,753,210
-----------
9,714,288
--------------------------------------------------------------------
Real Estate Investment Trusts
(REITs) -- 0.5%
American Home Mortgage
Investment Corp. (b) 19,200 518,208
--------------------------------------------------------------------
Thrifts & Mortgage Finance -- 2.3%
Countrywide Financial Corp. 24,400 820,816
Fannie Mae 25,600 1,397,248
-----------
2,218,064
--------------------------------------------------------------------
Total Common Stocks in the United States 39,914,557
--------------------------------------------------------------------
Total Common Stocks in North America -- 46.2% 43,771,751
================================================================================
================================================================================
Pacific Basin/Asia
- --------------------------------------------------------------------------------
China -- 2.5%
Commercial Banks -- 0.4%
China Merchants Bank Co. Ltd. (a) 178,600 360,240
--------------------------------------------------------------------
Real Estate Management &
Development -- 2.1%
Beijing Capital Land Ltd. 1,504,300 633,410
Guangzhou R&F Properties Co. Ltd. 621,000 1,382,914
-----------
2,016,324
--------------------------------------------------------------------
Total Common Stocks in China 2,376,564
================================================================================
Hong Kong -- 3.6%
Commercial Banks -- 0.2%
Industrial & Commercial Bank
of China (a) 270,000 151,353
--------------------------------------------------------------------
Real Estate Management &
Development -- 3.4%
China Resources Land Ltd. 1,466,000 1,767,418
Hopson Development Holdings Ltd. 598,300 1,502,354
-----------
3,269,772
--------------------------------------------------------------------
Total Common Stocks in Hong Kong 3,421,125
================================================================================
India -- 0.8%
Commercial Banks -- 0.5%
ICICI Bank Ltd. 21,000 412,294
--------------------------------------------------------------------
Diversified Financial
Services -- 0.3%
Infrastructure Development Finance
Co. Ltd. 162,900 313,694
--------------------------------------------------------------------
Total Common Stocks in India 725,988
================================================================================
Indonesia -- 1.0%
Commercial Banks -- 1.0%
Bank Central Asia Tbk PT 746,900 417,445
Bank Mandiri Persero Tbk PT 1,874,300 513,507
--------------------------------------------------------------------
Total Common Stocks in Indonesia 930,952
================================================================================
Japan -- 8.0%
Capital Markets -- 2.1%
Daiichi Commodities Co. Ltd. 57,000 340,046
Nomura Holdings, Inc. 31,800 662,500
Takagi Securities Co. Ltd. 85,000 379,413
Toyo Securities Co., Ltd. (a) 125,800 579,679
-----------
1,961,638
--------------------------------------------------------------------
Commercial Banks -- 3.0%
Mitsubishi UFJ Financial Group, Inc. 105 1,185,081
Sumitomo Mitsui Financial Group, Inc. 180 1,634,420
-----------
2,819,501
--------------------------------------------------------------------
Household Durables -- 1.0%
The Japan General Estate Co. Ltd. 36,400 935,947
--------------------------------------------------------------------
Real Estate Management &
Development -- 1.9%
Sumitomo Real Estate Sales 18,500 1,433,342
Sunwood Corp. 100 365,750
-----------
1,799,092
--------------------------------------------------------------------
Total Common Stocks in Japan 7,516,178
================================================================================
Malaysia -- 0.2%
Diversified Financial
Services -- 0.2%
AMMB Holdings BHD 179,500 195,205
--------------------------------------------------------------------
Total Common Stocks in Malaysia 195,205
================================================================================
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007 23
Schedule of Investments (concluded)
Global Financial Services Portfolio (in U.S. dollars)
Shares
Industry Common Stocks Held Value
================================================================================
Pacific Basin/Asia (concluded)
- --------------------------------------------------------------------------------
Singapore -- 0.4%
Commercial Banks -- 0.4%
United Overseas Bank Ltd. 29,200 $ 404,180
--------------------------------------------------------------------
Total Common Stocks in Singapore 404,180
================================================================================
South Korea -- 10.7%
Commercial Banks -- 5.5%
Daegu Bank 86,600 1,574,043
Kookmin Bank 19,500 1,749,362
Shinhan Financial Group Co. Ltd. 32,400 1,859,694
----------
5,183,099
--------------------------------------------------------------------
Insurance -- 5.2%
Dongbu Insurance Co., Ltd. 57,800 1,640,370
Korean Reinsurance Co. 130,321 1,710,740
Meritz Fire & Marine Insurance Co. Ltd. 201,900 1,630,995
----------
4,982,105
--------------------------------------------------------------------
Total Common Stocks in South Korea 10,165,204
--------------------------------------------------------------------
Total Common Stocks in the
Pacific Basin/Asia -- 27.2% 25,735,396
--------------------------------------------------------------------
Total Common Stocks
(Cost -- $72,453,665) -- 96.2% 91,107,887
Beneficial
Short-Term Securities Interest Value
================================================================================
BlackRock Liquidity Series, LLC
Cash Sweep Series, 5.26% (c)(d) $2,664,258 $2,664,258
BlackRock Liquidity Series, LLC
Money Market Series,
5.33% (c)(d)(e) 2,084,800 2,084,800
--------------------------------------------------------------------
Total Short-Term Securities
(Cost -- $4,749,058) -- 5.0% 4,749,058
================================================================================
================================================================================
Number of
Call Options Purchased Contracts
===============================================================================
United States -- 1.3%
The Bear Stearns Cos., Inc., expiring
January 2008 at USD 100 235 1,285,450
-------------------------------------------------------------------
Total Options Purchased
(Premiums Paid -- $859,969) -- 1.3% 1,285,450
===============================================================================
Total Investments
(Cost -- $78,062,692*) -- 102.5% 97,142,395
Liabilities in Excess of Other Assets -- (2.5%) (2,405,654)
-----------
Net Assets -- 100.0% $94,736,741
===========
(d) Represents the current yield as of March 31, 2007.
(e) Security was purchased with cash proceeds from securities loans.
o For Portfolio compliance purposes, the Portfolio's industry
classifications refer to any one or more of the industry
sub-classifications used by one or more widely recognized market indexes
or ratings group indexes, and/or as defined by Portfolio management. This
definition may not apply for purposes of this report, which may combine
industry sub-classifications for reporting ease. Industries are shown as a
percent of net assets.
o Currency Abbreviation:
USD U.S. Dollar
24 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007
Statement of Assets and Liabilities Global Financial Services Portfolio
As of March 31, 2007 (Unaudited)
===================================================================================================================================
Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Investments in unaffiliated securities, at value (including securities loaned of $2,024,709)
(identified cost -- $72,453,665) ............................................ $ 91,107,887
Investments in affiliated securities, at value (identified cost -- $4,749,058) 4,749,058
Options purchased, at value (premiums paid -- $859,969) ....................... 1,285,450
Foreign cash (cost -- $4,678) ................................................. 4,664
Receivables:
Dividends ................................................................. $ 366,334
Contributions ............................................................. 86,201
Securities lending ........................................................ 66 452,601
-------------
Prepaid expenses .............................................................. 4,831
-------------
Total assets .................................................................. 97,604,491
===================================================================================================================================
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------------
Collateral on securities loaned, at value ..................................... 2,084,800
Payables:
Withdrawals ............................................................... 496,628
Securities purchased ...................................................... 191,620
Investment adviser ........................................................ 30,973
Other affiliates .......................................................... 936 720,157
-------------
Accrued expenses and other liabilities ........................................ 62,793
-------------
Total liabilities ............................................................. 2,867,750
-------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets .................................................................... $ 94,736,741
=============
===================================================================================================================================
Net Assets Consist of
- -----------------------------------------------------------------------------------------------------------------------------------
Investor's capital ............................................................ $ 75,653,717
Unrealized appreciation -- net ................................................ 19,083,024
-------------
Net Assets .................................................................... $ 94,736,741
=============
See Notes to Financial Statements.
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007 25
Statement of Operations Global Financial Services Portfolio
For the Six Months Ended March 31, 2007 (Unaudited)
===================================================================================================================================
Investment Income
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends (net of $38,701 foreign withholding tax) ............................ $ 1,002,776
Interest from affiliates ...................................................... 90,111
Securities lending -- net ..................................................... 7,949
-------------
Total income .................................................................. 1,100,836
-------------
===================================================================================================================================
Expenses
- -----------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees ...................................................... $ 194,300
Custodian fees ................................................................ 51,209
Accounting services ........................................................... 46,719
Trustees' fees and expenses ................................................... 19,829
Professional fees ............................................................. 15,973
Pricing fees .................................................................. 2,310
Printing and shareholder reports .............................................. 1,539
Other ......................................................................... 5,721
-------------
Total expenses ................................................................ 337,600
-------------
Investment income -- net ...................................................... 763,236
-------------
===================================================================================================================================
Realized & Unrealized Gain (Loss) -- Net
- -----------------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) on:
Investments -- net .......................................................... 15,425,141
Foreign currency transactions -- net ........................................ (20,763) 15,404,378
-------------
Change in unrealized appreciation/depreciation on:
Investments -- net .......................................................... (7,689,115)
Foreign currency transactions -- net ........................................ 4,063 (7,685,052)
---------------------------------
Total realized and unrealized gain -- net ..................................... 7,719,326
-------------
Net Increase in Net Assets Resulting from Operations .......................... $ 8,482,562
=============
See Notes to Financial Statements.
26 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007
Statements of Changes in Net Assets Global Financial Services Portfolio
For the Six
Months Ended For the
March 31, Year Ended
2007 September 30,
Increase (Decrease) in Net Assets: (Unaudited) 2006
===================================================================================================================================
Operations
- -----------------------------------------------------------------------------------------------------------------------------------
Investment income -- net ...................................................... $ 763,236 $ 4,610,582
Realized gain -- net .......................................................... 15,404,378 3,978,060
Change in unrealized appreciation/depreciation -- net ......................... (7,685,052) 5,772,820
---------------------------------
Net increase in net assets resulting from operations .......................... 8,482,562 14,361,462
---------------------------------
===================================================================================================================================
Capital Transactions
- -----------------------------------------------------------------------------------------------------------------------------------
Proceeds from contributions ................................................... 15,742,045 55,241,858
Fair value of withdrawals ..................................................... (26,088,885) (80,955,336)
---------------------------------
Net decrease in net assets derived from capital transactions .................. (10,346,840) (25,713,478)
---------------------------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total decrease in net assets .................................................. (1,864,278) (11,352,016)
Beginning of period ........................................................... 96,601,019 107,953,035
---------------------------------
End of period ................................................................. $ 94,736,741 $ 96,601,019
=================================
See Notes to Financial Statements.
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007 27
Financial Highlights Global Financial Services Portfolio
For the Six
Months Ended
The following per share data and ratios March 31, For the Year Ended September 30,
have been derived from information provided 2007 -------------------------------------------------------
in the financial statements. (Unaudited) 2006 2005 2004 2003 2002
=============================================================================================================================
Total Investment Return
- -----------------------------------------------------------------------------------------------------------------------------
Total investment return ................ 9.04%+ 16.07% 28.02% 25.86% 40.92% (8.61%)
=====================================================================
=============================================================================================================================
Ratios to Average Net Assets
- -----------------------------------------------------------------------------------------------------------------------------
Expenses ............................... .70%* .66% .70% .78% .76% .67%
=====================================================================
Investment income -- net ............... 1.57%* 3.62% 3.05% 2.23% 1.64% 1.26%
=====================================================================
=============================================================================================================================
Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $94,737 $96,601 $107,953 $70,762 $70,172 $60,342
=====================================================================
Portfolio turnover ..................... 32.35% 79.29% 80.05% 115.38% 205.93% 144.60%
=====================================================================
* Annualized.
+ Aggregate total investment return.
See Notes to Financial Statements.
28 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007
Notes to Financial Statements (Unaudited) Global Financial Services Portfolio
1. Significant Accounting Policies:
Global Financial Services Portfolio (the "Portfolio") is part of Global
Financial Services Master Trust (the "Trust"). The Trust is registered under the
Investment Company Act of 1940, as amended, and is organized as a Delaware
statutory trust. The Declaration of Trust permits the Trustees to issue
nontransferable interests in the Trust, subject to certain limitations. The
Portfolio's financial statements are prepared in conformity with U.S. generally
accepted accounting principles, which may require the use of management accruals
and estimates. Actual results may differ from these estimates. These unaudited
financial statements reflect all adjustments, which are, in the opinion of
management, necessary to present a fair statement of the results for the interim
period. All such adjustments are of a normal, recurring nature. The following is
a summary of significant accounting policies followed by the Portfolio.
(a) Valuation of investments -- Equity securities that are held by the Portfolio
that are traded on stock exchanges or the NASDAQ Global Market are valued at the
last sale price or official close price on the exchange, as of the close of
business on the day the securities are being valued or, lacking any sales, at
the last available bid price for long positions and at the last available asked
price for short positions. In cases where equity securities are traded on more
than one exchange, the securities are valued on the exchange designated as the
primary market by or under the authority of the Board of Trustees of the Trust.
Long positions traded in the over-the-counter ("OTC") market, NASDAQ Capital
Market or Bulletin Board are valued at the last available bid price or yield
equivalent obtained from one or more dealers or pricing services approved by the
Board of Trustees of the Trust. Short positions traded in the OTC market are
valued at the last available asked price. Portfolio securities that are traded
both in the OTC market and on a stock exchange are valued according to the
broadest and most representative market.
Options written or purchased are valued at the last sale price in the case of
exchange-traded options. Options traded in the OTC market are valued at the last
asked price (options written) or the last bid price (options purchased). Swap
agreements are valued based upon quoted fair valuations received daily by the
Portfolio from a pricing service or counterparty. Financial futures contracts
and options thereon, which are traded on exchanges, are valued at their last
sale price as of the close of such exchanges. Valuation of short-term investment
vehicles is generally based on the net asset value of the underlying investment
vehicle or amortized cost.
Repurchase agreements are valued at cost plus accrued interest. The Portfolio
employs pricing services to provide certain securities prices for the Portfolio.
Securities and assets for which market quotations are not readily available are
valued at fair value as determined in good faith by or under the direction of
the Board of Trustees of the Trust, including valuations furnished by the
pricing services retained by the Portfolio, which may use a matrix system for
valuations. The procedures of a pricing service and its valuations are reviewed
by the officers of the Portfolio under the general supervision of the Trust's
Board of Trustees. Such valuations and procedures will be reviewed periodically
by the Board of Trustees of the Trust.
Generally, trading in foreign securities, as well as U.S. government securities,
money market instruments and certain fixed income securities, is substantially
completed each day at various times prior to the close of business on the New
York Stock Exchange ("NYSE"). The values of such securities used in computing
the net assets of the Portfolio are determined as of such times. Foreign
currency exchange rates will generally be determined as of the close of business
on the NYSE. Occasionally, events affecting the values of such securities and
such exchange rates may occur between the times at which they are determined and
the close of business on the NYSE that may not be reflected in the computation
of the Portfolio's net assets. If events (for example, a company announcement,
market volatility or a natural disaster) occur during such periods that are
expected to materially affect the value of such securities, those securities
will be valued at their fair value as determined in good faith by the Trust's
Board of Trustees or by BlackRock Advisors, LLC (the "Manager"), an indirect
wholly owned subsidiary of BlackRock, Inc., using a pricing service and/or
procedures approved by the Trust's Board of Trustees.
(b) Derivative financial instruments -- The Portfolio may engage in various
portfolio investment strategies, both to increase the return of the Portfolio,
and to hedge, or protect, its exposure to interest rate movements and movements
in the securities markets. Losses may arise due to changes in the value of the
contract or if the counterparty does not perform under the contract.
o Financial futures contracts -- The Portfolio may purchase or sell
financial futures contracts and options on such financial futures
contracts. Financial futures contracts are contracts for delayed delivery
of securities at a specific future date and at a specific price or yield.
Upon entering
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007 29
Notes to Financial Statements (continued) Global Financial Services Portfolio
into a contract, the Portfolio deposits, and maintains as collateral, such
initial margin as required by the exchange on which the transaction is effected.
Pursuant to the contract, the Portfolio 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 Portfolio as unrealized gains or losses. When the contract is
closed, the Portfolio 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.
o Options -- The Portfolio may purchase and write call and put options. When
the Portfolio writes an option, an amount equal to the premium received by
the Portfolio is reflected as an asset and an equivalent liability. The
amount of the liability is subsequently marked-to-market to reflect the
current market value of the option written. When a security 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 security
acquired or deducted from (or added to) the proceeds of the security sold.
When an option expires (or the Portfolio enters into a closing
transaction), the Portfolio realizes a gain or loss on the option to the
extent of the premiums received or paid (or a gain or loss to the extent
that the cost of the closing transaction exceeds the premium paid or
received).
Written and purchased options are non-income producing investments.
o Forward foreign exchange contracts -- The Portfolio may enter into forward
foreign exchange contracts as a hedge against either specific transactions
or portfolio positions. The contract is marked-to-market daily and the
change in market value is recorded by the Portfolio as an unrealized gain
or loss. When the contract is closed, the Portfolio 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.
o Foreign currency options and futures -- The Portfolio may also purchase or
sell 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. Such transactions
may be effected with respect to hedges on non-U.S. dollar-denominated
securities owned by the Portfolio, sold by the Portfolio but not yet
delivered, or committed or anticipated to be purchased by the Portfolio.
(c) Foreign currency transactions -- Transactions denominated in foreign
currencies are recorded at the exchange rate prevailing when recognized. Assets
and liabilities denominated in foreign currencies are valued at the exchange
rate at the end of the period. Foreign currency transactions are the result of
settling (realized) or valuing (unrealized) assets or liabilities expressed in
foreign currencies into U.S. dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on investments.
The Portfolio invests in foreign securities, which may involve a number of risk
factors and special considerations not present with investments in securities of
U.S. corporations.
(d) Income taxes -- The Portfolio is considered as a "pass-through" entity for
federal income tax purposes. As such, each investor in the Portfolio is treated
as owner of its proportionate share of the net assets, income, expenses and
realized and unrealized gains and losses of the Portfolio. Therefore, no federal
income tax provision is required. Under the applicable foreign tax law, a
withholding tax may be imposed on interest, dividends and capital gains at
various rates. It is intended that the Portfolio's assets will be managed so an
investor in the Portfolio can satisfy the requirements of Subchapter M of the
Internal Revenue Code.
(e) Security transactions and investment income -- Security transactions are
accounted for on the date the securities are purchased or sold (the trade
dates). Realized gains and losses on security 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 portfolio has determined the ex-dividend date.
Interest income is recognized on the accrual basis.
(f) Securities lending -- The Portfolio may lend securities to financial
institutions that provide cash or securities issued or guaranteed by the U.S.
government as collateral, which will be maintained at all times in an amount
equal to at least 100% of the current market value of the loaned securities. The
market value of the loaned securities is determined at the close of business of
the Portfolio and any additional required collateral is delivered to the
Portfolio on the next business day. Where the Portfolio receives securities as
collateral for the loaned securities, it collects a fee from the borrower. The
Portfolio typically receives the income on the loaned securities but does not
receive the income on the collateral. Where the Portfolio receives cash
collateral, it may invest such collateral and retain the amount earned on such
investment, net of any amount rebated to the borrower. Loans of securities are
terminable at
30 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007
Notes to Financial Statements (continued) Global Financial Services Portfolio
any time and the borrower, after notice, is required to return borrowed
securities within five business days. The Portfolio may pay reasonable finder's,
lending agent, administrative and custodial fees in connection with its loans.
In the event that the borrower defaults on its obligation to return borrowed
securities because of insolvency or for any other reason, the Portfolio could
experience delays and costs in gaining access to the collateral. The Portfolio
also could suffer a loss where the value of the collateral falls below the
market value of the borrowed securities, in the event of borrower default or in
the event of losses on investments made with cash collateral.
(g) Recent accounting pronouncements -- In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes -- an interpretation of FASB Statement No. 109."
FIN 48 prescribes the minimum recognition threshold a tax position must meet in
connection with accounting for uncertainties in income tax positions taken or
expected to be taken by an entity, including mutual funds, before being measured
and recognized in the financial statements. Adoption of FIN 48 is required for
the last net asset value calculation in the first required financial statement
reporting period for fiscal years beginning after December 15, 2006. The impact
on the Portfolio's financial statements, if any, is currently being assessed.
In September 2006, "Statement of Financial Accounting Standards No. 157, Fair
Value Measurements" ("FAS 157"), was issued and is effective for fiscal years
beginning after November 15, 2007. FAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. At this time, management is evaluating the implications of FAS 157
and its impact on the Portfolio's financial statements, if any, has not been
determined.
In addition, in February 2007, FASB issued "Statement of Financial Accounting
Standards No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities" ("FAS 159"), which is effective for fiscal years beginning after
November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
year that begins on or before November 15, 2007, provided the entity also elects
to apply the provisions of FAS 157. FAS 159 permits entities to choose to
measure many financial instruments and certain other items at fair value that
are not currently required to be measured at fair value. FAS 159 also
establishes presentation and disclosure requirements designed to facilitate
comparisons between entities that choose different measurement attributes for
similar types of assets and liabilities. At this time, management is evaluating
the implications of FAS 159 and its impact on the Portfolio's financial
statements, if any, has not been determined.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Investment Advisory Agreement between the Trust and the Manager became
effective on September 29, 2006. Prior to September 29, 2006, Fund Asset
Management, L.P. ("FAM") was the Trust's manager. The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect, wholly owned subsidiary of
Merrill Lynch & Co., Inc. ("Merrill Lynch"), which is the limited partner.
Merrill Lynch and The PNC Financial Services Group, Inc. are the principal
owners of BlackRock, Inc.
The Manager is responsible for the management of the Portfolio's investments and
provides the necessary personnel, facilities, equipment and certain other
services necessary to the operations of the Portfolio. For such services, the
Portfolio pays a monthly fee at an annual rate of .40% of the average daily
value of the Portfolio's net assets. In addition, the Manager has entered into
sub-advisory agreements with BlackRock Investment Management, LLC ("BIM") and
BlackRock Asset Management U.K. Limited, both affiliates of the Manager, under
which the Manager pays each Sub-Adviser for services it provides a monthly fee
at an annual rate that is a percentage of the management fee paid by the
Portfolio to the Manager. Prior to September 29, 2006, FAM had a Sub-Advisory
Agreement with Merrill Lynch Asset Management U.K. Limited ("MLAM U.K."), an
affiliate of FAM.
The Trust has received an exemptive order from the Securities and Exchange
Commission permitting it to lend portfolio securities to Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("MLPF&S"), a wholly owned subsidiary of Merrill
Lynch, or its affiliates. Pursuant to that order, the Portfolio has retained BIM
as the securities lending agent for a fee based on a share of the returns on
investment of cash collateral. Prior to September 29, 2006, BIM was organized as
Merrill Lynch Investment Managers, LLC ("MLIM, LLC"), an affiliate of FAM, and
MLIM, LLC was the securities lending agent. BIM may, on behalf of the Portfolio,
invest cash collateral received by the Portfolio for such loans, among other
things, in a private investment company managed by the Manager or in
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007 31
Notes to Financial Statements (concluded) Global Financial Services Portfolio
registered money market funds advised by the Manager or its affiliates. For the
six months ended March 31, 2007, BIM received $3,301 in securities lending agent
fees.
In addition, MLPF&S received $5,665 in commissions on the execution of portfolio
security transactions for the Portfolio for the six months ended March 31, 2007.
For the six months ended March 31, 2007, the Portfolio reimbursed the Manager
$864 for certain accounting services.
Certain officers and/or trustees of the Trust are officers and/or directors of
BlackRock, Inc. or its affiliates.
3. Investments:
Purchases and sales of investments, for the six months ended March 31, 2007 were
$28,907,000 and $30,520,564, respectively.
4. Short-Term Borrowings:
The Portfolio, along with certain other funds managed by the Manager and its
affiliates, is a party to a $500,000,000 credit agreement with a group of
lenders. The Portfolio may borrow under the credit agreement to fund shareholder
redemptions and for other lawful purposes other than for leverage. The Portfolio
may borrow up to the maximum amount allowable under the Portfolio's current
prospectus and statement of additional information, subject to various other
legal, regulatory or contractual limits. On November 22, 2006, the credit
agreement was renewed for one year under substantially the same terms. The
Portfolio pays a commitment fee of .06% per annum based on the Portfolio's pro
rata share of the unused portion of the credit agreement. Amounts borrowed under
the credit agreement bear interest at a rate equal to, at each fund's election,
the federal funds rate plus .35% or a base rate as defined in the credit
agreement. The Portfolio did not borrow under the credit agreement during the
six months ended March 31, 2007.
32 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007
BlackRock Funds
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former fund
investors and individual clients (collectively, "Clients") and to safeguarding
their nonpublic personal information. The following information is provided to
help you understand what personal information BlackRock collects, how we protect
that information and why in certain cases we share such information with select
parties.
If you are located in a jurisdiction where specific laws, rules or regulations
require BlackRock to provide you with additional or different privacy-related
rights beyond what is set forth below, then BlackRock will comply with those
specific laws, rules or regulations.
BlackRock obtains or verifies personal nonpublic information from and about you
from different sources, including the following: (i) information we receive from
you or, if applicable, your financial intermediary, on applications, forms or
other documents; (ii) information about your transactions with us, our
affiliates, or others; (iii) information we receive from a consumer reporting
agency; and (iv) from visits to our Web sites.
BlackRock does not sell or disclose to nonaffiliated third parties any nonpublic
personal information about its Clients, except as permitted by law or as is
necessary to service Client accounts. These nonaffiliated third parties are
required to protect the confidentiality and security of this information and to
use it only for its intended purpose.
We may share information with our affiliates to service your account or to
provide you with information about other BlackRock products or services that may
be of interest to you. In addition, BlackRock restricts access to nonpublic
personal information about its Clients to those BlackRock employees with a
legitimate business need for the information. BlackRock maintains physical,
electronic and procedural safeguards that are designed to protect the nonpublic
personal information of its Clients, including procedures relating to the proper
storage and disposal of such information.
Availability of Additional Information
Electronic copies of most financial reports and prospectuses are available on
the Fund's Web site 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 Advisers, Banks or Brokerages:
Please contact your financial advisor. Please note that not all investment
advisers, banks or brokerages may offer this service.
Shareholders Who Hold Accounts Directly with BlackRock:
1) Access the BlackRock Web site at
http://www.blackrock.com/edelivery
2) Select eDelivery under the More Information section
3) Log into your account
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 it is intended to reduce expenses and
eliminate duplicate mailings of shareholder documents. Mailings of your
shareholder documents may be householded indefinitely unless you instruct us
otherwise. If you do not want the mailing of these documents to be combined with
those for other members of your household, please contact the Fund at (800)
441-7762.
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007 33
BlackRock Funds (concluded)
Availability of Additional Information (concluded)
Availability of Proxy Voting Policies and Procedures
The Fund has delegated proxy voting responsibilities to BlackRock and its
affiliates, subject to the general oversight of the Fund's Board of
Directors/Trustees. A description of the policies and procedures that BlackRock
and its affiliates use to determine how to vote proxies relating to portfolio
securities is available without charge, upon request, on our Web site at
www.blackrock.com, by calling (800) 441-7762, or on the Web site of the
Securities and Exchange Commission (the"Commission") at http://www.sec.gov.
Availability of Proxy Voting Record
Information on how proxies relating to the Fund's voting securities were voted
(if any) by the Fund's previous manager during the most recent 12-month period
ended June 30 is available, upon request and without charge, on our Web site at
www.blackrock.com, by calling (800) 441-7762 or on the Web site of the
Commission at http://www.sec.gov.
Availability of Quarterly Portfolio Schedule
The Fund files its complete schedule of portfolio holdings for the first and
third quarters of its fiscal year with the Commission on Form N-Q. The Fund's
Forms N-Q are available on the Commission's Web site at http://www.sec.gov and
may be reviewed and copied at the Commission's Public Reference Room in
Washington, D.C. Information regarding the operation of the Public Reference
Room may be obtained by calling (800) SEC-0330. The Fund's Forms N-Q may also be
obtained upon request, without charge, by calling (800) 441-7762.
Shareholder Privileges
Account Information
Call us at (800) 441-7762 8:00 AM - 6:00 PM EST to get information about your
account balances, recent transactions and share prices. You can also reach us on
the Web at www.blackrock.com.
Automatic Investment Plans
Investor Class shareholders who want to invest regularly can arrange to have $50
or more automatically deducted from their checking or savings account and
invested in any of the BlackRock portfolios.
Systematic Withdrawal Plans
Investor Class shareholders can establish a systematic withdrawal plan and
receive periodic payments of $50 or more from their BlackRock portfolios, as
long as their account 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.
34 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007
A World-Class Mutual Fund Family
BlackRock now offers an expanded lineup of open-end mutual funds. Our range
includes more than 85 funds crossing all investment styles and managed by
experts in equity, fixed income and tax-exempt investing.
Equity Portfolios
BlackRock All-Cap Global Resources Portfolio
BlackRock Aurora Portfolio
BlackRock Asset Allocation Portfolio+
BlackRock Balanced Capital Fund+
BlackRock Basic Value Fund
BlackRock Capital Appreciation Portfolio
BlackRock Developing Capital Markets Fund
BlackRock Equity Dividend Fund
BlackRock EuroFund
BlackRock Focus Twenty Fund
BlackRock Focus Value Fund
BlackRock Fundamental Growth Fund
BlackRock Global Allocation Fund+
BlackRock Global Dynamic Equity Fund
BlackRock Global Financial Services Fund
BlackRock Global Growth Fund
BlackRock Global Opportunities Portfolio
BlackRock Global Resources Portfolio*
BlackRock Global Science & Technology
Opportunities Portfolio
BlackRock Global SmallCap Fund
BlackRock Global Technology Fund
BlackRock Healthcare Fund
BlackRock Health Sciences Opportunities Portfolio
BlackRock Index Equity Portfolio*
BlackRock International Fund
BlackRock International Index Fund
BlackRock International Opportunities Portfolio*
BlackRock International Value Fund
BlackRock Investment Trust
BlackRock Large Cap Core Fund
BlackRock Large Cap Growth Fund
BlackRock Large Cap Value Fund
BlackRock Latin America Fund
BlackRock Lifecycle Prepared Portfolios+
BlackRock Mid-Cap Growth Equity Portfolio
BlackRock Mid-Cap Value Equity Portfolio
BlackRock Mid Cap Value Opportunities Fund
BlackRock Natural Resources Trust
BlackRock Pacific Fund
BlackRock Prepared Portfolios+
BlackRock Small Cap Core Equity Portfolio
BlackRock Small Cap Growth Equity Portfolio
BlackRock Small Cap Growth Fund II
BlackRock Small Cap Index Fund
BlackRock Small Cap Value Equity Portfolio*
BlackRock Small/Mid-Cap Growth Portfolio
BlackRock S&P 500 Index Fund
BlackRock U.S. Opportunities Portfolio
BlackRock Utilities and Telecommunications Fund
BlackRock Value Opportunities Fund
Fixed Income Portfolios
BlackRock Bond Fund
BlackRock Commodity Strategies Fund
BlackRock Enhanced Income Portfolio
BlackRock GNMA Portfolio
BlackRock Government Income Portfolio
BlackRock High Income Fund
BlackRock High Yield Bond Portfolio
BlackRock Inflation Protected Bond Portfolio
BlackRock Intermediate Bond Portfolio II
BlackRock Intermediate Government
Bond Portfolio
BlackRock International Bond Portfolio
BlackRock Low Duration Bond Portfolio
BlackRock Managed Income Portfolio
BlackRock Short-Term Bond Fund
BlackRock Total Return Portfolio
BlackRock Total Return Portfolio II
BlackRock World Income Fund
Municipal Bond Portfolios
BlackRock AMT-Free Municipal Bond Portfolio
BlackRock California Insured Municipal Bond Fund
BlackRock Delaware Municipal Bond Portfolio
BlackRock Florida Municipal Bond Fund
BlackRock High Yield Municipal Fund
BlackRock Intermediate Municipal Fund
BlackRock Kentucky Municipal Bond Portfolio
BlackRock Municipal Insured Fund
BlackRock National Municipal Fund
BlackRock New Jersey Municipal Bond Fund
BlackRock New York Municipal Bond Fund
BlackRock Ohio Municipal Bond Portfolio
BlackRock Pennsylvania Municipal Bond Fund
BlackRock Short-Term Municipal Fund
Money Market Portfolios
BlackRock Money Market Portfolio
BlackRock Municipal Money Market Portfolio
BlackRock NC Municipal MM Portfolio
BlackRock NJ Municipal MM Portfolio
BlackRock OH Municipal MM Portfolio
BlackRock PA Municipal MM Portfolio
BlackRock Summit Cash Reserves Fund*
BlackRock U.S. Treasury MM Portfolio
BlackRock VA Municipal MM Portfolio
* See the prospectus for information on specific limitations on investments
in the fund.
+ Mixed asset fund.
BlackRock mutual funds are distributed by BlackRock Distributors, Inc. and
certain funds are also distributed by FAM Distributors, Inc. 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
800-882-0052 or from your financial advisor. The prospectus should be read
carefully before investing.
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. MARCH 31, 2007 35
This report is transmitted to shareholders only. It 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.
Investment in foreign securities involves special risks including fluctuating
foreign exchange rates, foreign government regulations, differing degrees of
liquidity and the possibility of substantial volatility due to adverse
political, economic or other developments.
BlackRock Global Financial Services Fund, Inc.
P.O. Box 9011
Princeton, NJ 08543-9011
BLACKROCK
#MLGFSF-3/07
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 - Schedule of Investments - Not Applicable
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 - The registrant's
Nominating Committee will consider nominees to the Board recommended
by shareholders when a vacancy becomes available. Shareholders who
wish to recommend a nominee should send nominations which include
biographical information and sets forth the qualifications of the
proposed nominee to the registrant's Secretary. There have been no
material changes to these procedures.
Item 11 - Controls and Procedures
11(a) - The registrant's certifying officers have reasonably designed such
disclosure controls and procedures to ensure material information
relating to the registrant is made known to us by others particularly
during the period in which this report is being prepared. The
registrant's certifying officers have determined that the registrant's
disclosure controls and procedures are effective based on our evaluation
of these controls and procedures as of a date within 90 days prior to
the filing date of this report.
11(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR
270.30a-3(d)) that occurred during the last fiscal half-year of the
period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting.
Item 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - Not Applicable to this semi-annual report
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(b) - Certifications - Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
BlackRock Global Financial Services Fund, Inc. and Global Financial Services
Master Trust
By: /s/ Robert C. Doll, Jr.
-------------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
BlackRock Global Financial Services Fund, Inc. and Global Financial
Services Master Trust
Date: May 21, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Robert C. Doll, Jr.
-------------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
BlackRock Global Financial Services Fund, Inc. and Global Financial
Services Master Trust
Date: May 21, 2007
By: /s/ Donald C. Burke
-------------------------------
Donald C. Burke,
Chief Financial Officer of
BlackRock Global Financial Services Fund, Inc. and Global Financial
Services Master Trust
Date: May 21, 2007