UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-09375
811-09633
Name of Fund: BlackRock Global Financial Services Fund, Inc.
Global Financial Services Master LLC
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: Donald C. Burke, Chief Executive
Officer, BlackRock Global Financial Services Fund, Inc. and Global
Financial Services Master LLC, 800 Scudders Mill Road, Plainsboro, NJ
08536. Mailing address: P.O. Box 9011, Princeton, NJ 08543-9011
Registrant's telephone number, including area code: (800) 441-7762
Date of fiscal year end: 09/30/2007
Date of reporting period: 10/01/2006 - 09/30/2007
Item 1 - Report to Stockholders
EQUITIES FIXED INCOME REAL ESTATE
LIQUIDITY ALTERNATIVES BLACKROCK SOLUTIONS
BlackRock Global Financial BLACKROCK
Services Fund, Inc.
ANNUAL REPORT | SEPTEMBER 30, 2007
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
BlackRock Global Financial Services Fund, Inc.
================================================================================
Table of Contents Page
- --------------------------------------------------------------------------------
A Letter to Shareholders ................................................. 3
Annual Report:
Fund Summary ............................................................. 4
About Fund Performance ................................................... 6
Disclosure of Expenses ................................................... 6
Fund Financial Statements:
Statement of Assets and Liabilities .................................... 7
Statement of Operations ................................................ 8
Statements of Changes in Net Assets .................................... 9
Fund Financial Highlights ................................................ 10
Fund Notes to Financial Statements ....................................... 13
Fund Report of Independent Registered Public Accounting Firm ............. 17
Important Tax Information ................................................ 17
Master Portfolio Information ............................................. 18
Master Financial Statements:
Schedule of Investments ................................................ 19
Statement of Assets and Liabilities .................................... 22
Statement of Operations ................................................ 23
Statements of Changes in Net Assets .................................... 24
Master Financial Highlights .............................................. 25
Master Notes to Financial Statements ..................................... 26
Master Report of Independent Registered Public Accounting Firm ........... 29
Officers and Directors ................................................... 30
Proxy Results ............................................................ 32
BlackRock Fund Information ............................................... 33
Mutual Fund Family ....................................................... 35
2 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007
A Letter to Shareholders
Dear Shareholder
The September reporting period took financial markets on a wild ride. While
subprime mortgage woes dominated headlines for much of 2007, troubles
intensified in the final months of the period, spawning a widespread "credit
crunch" that crept into other areas of the market. The U.S. Federal Reserve
Board (the "Fed") and other countries' central banks stepped in to inject
liquidity into the markets and bolster investor confidence. The Fed cut the
discount rate, the rate banks pay to borrow money directly from the Fed, from
6.25% to 5.25% in two moves in August and September. The central bankers also
cut the more widely followed federal funds target rate, which had remained
unchanged at 5.25% for over a year, to 4.75% in September. After a tumultuous
summer, the dust began to settle toward period-end amid speculation that the
worst of the credit crunch had passed.
Although heightened volatility and a weakening U.S. economy have been recurring
themes throughout the past year, equity markets have displayed surprising
resilience. Most recently, the credit turmoil dampened corporate merger-and-
acquisition activity, a key source of strength for equity markets. However,
market fundamentals have held firm, dividend payouts and share buybacks have
continued to grow, and valuations remain attractive. These tailwinds generally
have prevailed over the headwinds created by the slowing U.S. economy and
troubled housing market.
In fixed income markets, mixed economic signals and the credit market debacle
resulted in a flight to quality. At the height of the uncertainty, investors
shunned bonds associated with the housing and credit markets in favor of higher-
quality Treasury issues. The yield on 10-year Treasury issues, which touched
5.30% in June (its highest level in five years), fell to 4.59% by period-end,
while prices correspondingly rose.
Against this backdrop, financial markets posted generally positive results for
the six-month period, and relatively stronger returns for the full year ended
September 30, 2007:
Total Returns as of September 30, 2007 6-month 12-month
==========================================================================================================
U.S. equities (S&P 500 Index) +8.44% +16.44%
- ----------------------------------------------------------------------------------------------------------
Small cap U.S. equities (Russell 2000 Index) +1.19 +12.34
- ----------------------------------------------------------------------------------------------------------
International equities (MSCI Europe, Australasia, Far East Index) +8.72 +24.86
- ----------------------------------------------------------------------------------------------------------
Fixed income (Lehman Brothers U.S. Aggregate Bond Index) +2.31 + 5.14
- ----------------------------------------------------------------------------------------------------------
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) +1.15 + 3.10
- ----------------------------------------------------------------------------------------------------------
High yield bonds (Lehman Brothers U.S. Corporate High Yield 2% Issuer Cap Index) +0.56 + 7.62
- ----------------------------------------------------------------------------------------------------------
Past performance is no guarantee of future results. Index performance shown for
illustrative purposes only. You cannot invest directly in an index.
As you navigate market volatility, we encourage you to review your investment
goals with your financial professional and to make portfolio changes, as needed.
For more market insight, we invite you to view "What's Ahead in 2007: Third
Quarter Update" and "Are You Prepared for Volatility?" at
www.blackrock.com/funds. We thank you for entrusting 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.
Vice Chairman, BlackRock, Inc.
3
THIS PAGE NOT PART OF YOUR FUND REPORT
Fund Summary BlackRock Global Financial Services Fund, Inc.
Portfolio Management Commentary
How did the Fund perform?
o The Fund outperformed its benchmark, the MSCI World Financials Index, for
the 12-month period.
What factors influenced performance?
o Options on Goldman Sachs contributed positively to performance. An
overweight position in South Korea also benefited Fund results, although
we significantly reduced our exposure to South Korean stocks over the past
year. The primary contributors were Korean banks and insurance names, such
as Meritz Fire & Marine Insurance Co. Ltd., Dongbu Insurance Co., Ltd. and
Shinhan Financial Group Co. Ltd.
o Our allocation to and stock selection in China/Hong Kong, primarily real
estate management and development companies like China Resources Land Ltd.
and Guangzhou R&F Properties Co. Ltd., also aided performance, as did an
underweight position in Japan and stock selection in the United States.
o The Fund avoided most of the downturn that occurred in the monoline
subprime mortgage market by being largely out of subprime lenders by the
end of August 2006.
o Detracting from performance was stock selection in the U.K. market, as
well as the Fund's cash position, which was somewhat higher than normal as
we restructured the portfolio over the course of the year. Our underweight
positions in Canada and Australia also hindered relative performance.
Describe recent portfolio activity.
o We focused on restructuring the portfolio after the portfolio management
change in August 2006.
o We increased exposure to commercial banks overseas and to capital markets.
From an industry standpoint, we reduced exposure to insurance, real estate
investment trusts (REITs), consumer finance and real estate management and
development.
o From a geographic perspective, we reduced exposure to the United States,
increased exposure to Europe and diversified our Asian exposure. We also
significantly reduced exposure to South Korea.
o Major additions to the portfolio included AXA SA, Banco Santander SA,
UniCredito Italiano SpA, BNP Paribas SA, HSBC Holdings Plc, The Bank of
New York Mellon Corp. and Fannie Mae.
o Significant sales included American Home Mortgage Investment Corp.,
Industrial Bank of Korea, Hana Financial Group, Inc., Capital One
Financial Corp., Pusan Bank, Shanghai Forte Land Co. Ltd., Beijing Capital
Land Ltd., Provident Financial Plc and Northern Rock Plc.
Describe Fund positioning at period-end.
o Compared to its benchmark, the Fund was overweight in South Korea, the
United States, China, Indonesia and India, and underweight in Australia,
Canada, the United Kingdom, Japan and Germany.
o In terms of subsectors, the Fund was overweight in insurance, diversified
financial services, capital markets and real estate management and
development, and underweight in commercial banks, thrifts and mortgage
finance and consumer finance. The Fund had no exposure to REITs and to the
troubled monoline subprime mortgage lenders at period-end.
o The Fund retains its heavy concentration in emerging markets stocks,
especially in South Korea. We continue to believe the larger-cap financial
names are undervalued and more attractive than the small- to mid-cap
names. In general, we continue our efforts to diversify the portfolio
geographically.
Expense Example
Actual Hypothetical**
----------------------------------------------------- ----------------------------------------------------
Beginning Ending Beginning Ending
Account Value Account Value Expenses Paid Account Value Account Value Expenses Paid
April 1, 2007 Sept. 30, 2007 During the Period* April 1, 2007 Sept. 30, 2007 During the Period*
- ------------------------------------------------------------------------------------------------------------------------------------
Institutional ...... $1,000 $1,023.20 $ 7.16 $1,000 $1,016.62 $ 7.14
Investor A ......... $1,000 $1,022.10 $ 8.37 $1,000 $1,012.93 $ 8.35
Investor B ......... $1,000 $1,018.10 $ 12.08 $1,000 $1,012.43 $ 12.04
Investor C ......... $1,000 $1,018.20 $ 12.58 $1,000 $1,017.82 $ 12.54
Class R ............ $1,000 $1,020.00 $ 10.53 $1,000 $1,014.48 $ 10.50
- ------------------------------------------------------------------------------------------------------------------------------------
* For each class of the Fund, expenses are equal to the annualized expense
ratio for the class (1.42% for Institutional, 1.66% for Investor A, 2.40%
for Investor B, 2.50% for Investor C and 2.09% 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.
See "Disclosure of Expenses" on page 6 for further information on how
expenses were calculated.
4 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the Fund's Institutional
and Investor A Shares compared to growth of an investment in the MSCI World
Index and the MSCI World Financials Index. Values are from November 26, 1999 to
September 2007:
MSCI World
Institutional Investor A MSCI World Financials
Shares*+ Shares*+ Index++ Index+++
11/26/99** $10,000 $ 9,475 $10,000 $10,000
9/00 $12,290 $11,616 $ 9,806 $10,742
9/01 $11,140 $10,511 $ 7,046 $ 8,695
9/02 $10,043 $ 9,444 $ 5,695 $ 7,157
9/03 $13,969 $13,112 $ 7,141 $ 9,302
9/04 $17,474 $16,357 $ 8,362 $11,081
9/05 $22,257 $20,787 $ 9,945 $13,027
9/06 $25,703 $23,940 $11,355 $16,058
9/07 $28,582 $26,557 $13,750 $17,445
* 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
graph is 11/30/99.
Performance Summary for the Period Ended September 30, 2007
Average Annual Total Returns*
----------------------------------------------------------------------------------
1 Year 5 Years Since Inception**
----------------------- ---------------------- ----------------------
6-Month w/o sales w/sales w/o sales w/sales w/o sales w/sales
Total Returns charge charge charge charge charge charge
- -----------------------------------------------------------------------------------------------------------------------------------
Institutional ................ +2.32% +11.20% -- +23.27% -- +14.32% --
Investor A ................... +2.21 +10.93 +5.11% +22.97 +21.65% +14.04 +13.26%
Investor B ................... +1.81 +10.13 +5.63 +22.03 +21.85 +13.17 +13.17
Investor C ................... +1.82 +10.04 +9.04 +22.01 +22.01 +13.15 +13.15
Class R ...................... +2.00 +10.53 -- +22.77 -- +13.82 --
MSCI World Index ............. +9.02 +21.09 -- +19.28 -- + 4.14 --
MSCI World Financials Index .. + .23 + 8.64 -- +19.50 -- + 7.36+ --
- -----------------------------------------------------------------------------------------------------------------------------------
* Assuming maximum sales charges. See "About Fund Performance" on page 6 for
a detailed description of share classes, including any related sales
charges and fees.
** The Fund commenced operations on 11/26/99.
+ Since inception total return is from 11/30/99.
Past performance is not indicative of future results.
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007 5
About Fund Performance BlackRock Global Financial Services Fund, Inc.
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.
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.)
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 to reflect 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 performance tables on page 5 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.
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 expense example on page 4 (which is
based on a hypothetical investment of $1,000 invested on April 1, 2007 and held
through September 30, 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 table provides information about actual account values and actual expenses.
In order to estimate the expenses a shareholder paid during the period covered
by this report, shareholders can divide their account value by $1,000 and then
multiply the result by the number corresponding to their share class under the
heading entitled "Expenses Paid During the Period."
The table also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses. In order to assist shareholders
in comparing the ongoing expenses of investing in 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 hypothetical information 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.
6 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007
Statement of Assets and Liabilities
BlackRock Global Financial Services Fund, Inc.
As of September 30, 2007
===================================================================================================================================
Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Investment in Global Financial Services Portfolio (the "Portfolio"), at value
(identified cost -- $81,344,656) ............................................................. $ 95,205,737
Prepaid expenses and other assets .............................................................. 58,518
-------------
Total assets ................................................................................... 95,264,255
-------------
===================================================================================================================================
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------------
Payables:
Distributor ................................................................................ $ 40,009
Other affiliates ........................................................................... 24,912
Administrative fees ........................................................................ 24,180 89,101
-------------
Accrued expenses ............................................................................... 26,600
-------------
Total liabilities .............................................................................. 115,701
-------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets ..................................................................................... $ 95,148,554
=============
===================================================================================================================================
Net Assets Consist of
- -----------------------------------------------------------------------------------------------------------------------------------
Institutional Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ............ $ 96,980
Investor A Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ............... 160,984
Investor B Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ............... 138,420
Investor C Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ............... 126,757
Class R Shares of Common Stock, $.10 par value, 100,000,000 shares authorized .................. 55,255
Paid-in capital in excess of par ............................................................... 60,588,269
Undistributed investment income -- net ......................................................... $ 424,585
Undistributed realized capital gains allocated from the Portfolio -- net ....................... 19,696,223
Unrealized appreciation allocated from the Portfolio -- net .................................... 13,861,081
-------------
Total accumulated earnings -- net .............................................................. 33,981,889
-------------
Net assets ..................................................................................... $ 95,148,554
=============
===================================================================================================================================
Net Asset Value
- -----------------------------------------------------------------------------------------------------------------------------------
Institutional -- Based on net assets of $16,248,837 and 969,797 shares outstanding ............. $ 16.75
=============
Investor A -- Based on net assets of $26,776,684 and 1,609,838 shares outstanding .............. $ 16.63
=============
Investor B -- Based on net assets of $22,591,616 and 1,384,196 shares outstanding .............. $ 16.32
=============
Investor C -- Based on net assets of $20,534,922 and 1,267,568 shares outstanding .............. $ 16.20
=============
Class R -- Based on net assets of $8,996,495 and 552,545 shares outstanding .................... $ 16.28
=============
See Notes to Financial Statements.
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007 7
Statement of Operations BlackRock Global Financial Services Fund, Inc.
For the Year Ended September 30, 2007
===================================================================================================================================
Investment Income
- -----------------------------------------------------------------------------------------------------------------------------------
Investment income allocated from the Portfolio:
Dividends .................................................................................. $ 2,299,747
Interest from affiliates ................................................................... 174,222
Securities lending -- net .................................................................. 10,906
Expenses ................................................................................... (681,551)
-------------
Total income ................................................................................... 1,803,324
-------------
===================================================================================================================================
Expenses
- -----------------------------------------------------------------------------------------------------------------------------------
Administration fees ............................................................................ $ 334,351
Service and distribution fees -- Investor B .................................................... 260,620
Service and distribution fees -- Investor C .................................................... 217,608
Printing and shareholder reports ............................................................... 68,306
Registration fees .............................................................................. 67,411
Service fees -- Investor A ..................................................................... 59,466
Transfer agent fees -- Investor C .............................................................. 44,926
Transfer agent fees -- Investor B .............................................................. 40,509
Transfer agent fees -- Investor A .............................................................. 38,548
Service and distribution fees -- Class R ....................................................... 36,419
Professional fees .............................................................................. 35,737
Transfer agent fees -- Institutional ........................................................... 26,951
Transfer agent fees -- Class R ................................................................. 19,500
Other .......................................................................................... 14,288
-------------
Total expenses ................................................................................. 1,264,640
-------------
Investment income -- net ....................................................................... 538,684
-------------
===================================================================================================================================
Realized & Unrealized Gain (Loss) Allocated from the Portfolio -- Net
- -----------------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) on:
Investments -- net ......................................................................... 22,323,721
Foreign currency transactions -- net ....................................................... (29,318) 22,294,403
-------------
Change in unrealized appreciation/depreciation on:
Investments -- net ......................................................................... (12,915,538)
Foreign currency transactions -- net ....................................................... 8,543 (12,906,995)
-------------------------------
Total realized and unrealized gain -- net ...................................................... 9,387,408
-------------
Net Increase in Net Assets Resulting from Operations ........................................... $ 9,926,092
=============
See Notes to Financial Statements.
8 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007
Statements of Changes in Net Assets
BlackRock Global Financial Services Fund, Inc.
For the Year Ended
September 30,
-------------------------------
Increase (Decrease) in Net Assets: 2007 2006
===================================================================================================================================
Operations
- -----------------------------------------------------------------------------------------------------------------------------------
Investment income -- net ....................................................................... $ 538,684 $ 3,223,085
Realized gain -- net ........................................................................... 22,294,403 3,978,060
Change in unrealized appreciation/depreciation -- net .......................................... (12,906,995) 5,772,820
-------------------------------
Net increase in net assets resulting from operations ........................................... 9,926,092 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 ................................................................................. (682,147) (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 .......... (4,935,390) (13,874,082)
-------------------------------
===================================================================================================================================
Capital Share Transactions
- -----------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets derived from capital share transactions ............................. (6,392,855) (10,473,381)
-------------------------------
===================================================================================================================================
Redemption Fee
- -----------------------------------------------------------------------------------------------------------------------------------
Redemption fee ................................................................................. 3,592 15,349
-------------------------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total decrease in net assets ................................................................... (1,398,561) (11,358,149)
Beginning of year .............................................................................. 96,547,115 107,905,264
-------------------------------
End of year* ................................................................................... $ 95,148,554 $ 96,547,115
===============================
* Undistributed investment income -- net ................................................... $ 424,585 $ 1,965,219
===============================
See Notes to Financial Statements.
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007 9
Financial Highlights BlackRock Global Financial Services Fund, Inc.
Institutional
The following per share data ------------------------------------------------------------------------------
and ratios have been derived For the Year Ended September 30,
from information provided in ------------------------------------------------------------------------------
the financial statements. 2007 2006 2005 2004 2003
========================================================================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ... $ 15.93 $ 15.53 $ 14.12 $ 12.76 $ 9.45
------------------------------------------------------------------------------
Investment income -- net** ........... .19 .50 .44 .20 .09
Realized and unrealized gain -- net .. 1.59++ 1.89++ 3.17++ 2.78++ 3.53
------------------------------------------------------------------------------
Total from investment operations ..... 1.78 2.39 3.61 2.98 3.62
------------------------------------------------------------------------------
Less dividends and distributions:
Investment income -- net ......... (.46) (.38) (.18) -- --
Realized gain -- net ............. (.50) (1.61) (2.02) (1.62) (.31)
------------------------------------------------------------------------------
Total dividends and distributions .... (.96) (1.99) (2.20) (1.62) (.31)
------------------------------------------------------------------------------
Net asset value, end of year ......... $ 16.75 $ 15.93 $ 15.53 $ 14.12 $ 12.76
==============================================================================
========================================================================================================================
Total Investment Return*
- ------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ... 11.20% 15.48% 27.37% 25.09% 39.10%
==============================================================================
========================================================================================================================
Ratios to Average Net Assets+
- ------------------------------------------------------------------------------------------------------------------------
Expenses ............................. 1.42% 1.27% 1.32% 1.53% 1.60%
==============================================================================
Investment income -- net ............. 1.18% 3.05% 2.93% 1.46% .81%
==============================================================================
========================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) $ 16,249 $ 17,843 $ 49,612 $ 11,034 $ 11,325
==============================================================================
Portfolio turnover of the Portfolio .. 55% 79% 80% 115% 206%
==============================================================================
Investor A
The following per share data ------------------------------------------------------------------------------
and ratios have been derived For the Year Ended September 30,
from information provided in ------------------------------------------------------------------------------
the financial statements. 2007 2006 2005 2004 2003
========================================================================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ... $ 15.82 $ 15.45 $ 14.06 $ 12.71 $ 9.43
------------------------------------------------------------------------------
Investment income -- net** ........... .15 .44 .27 .17 .06
Realized and unrealized gain -- net .. 1.58++ 1.90++ 3.29++ 2.76++ 3.53
------------------------------------------------------------------------------
Total from investment operations ..... 1.73 2.34 3.56 2.93 3.59
------------------------------------------------------------------------------
Less dividends and distributions:
Investment income -- net ......... (.42) (.36) (.15) -- --
Realized gain -- net ............. (.50) (1.61) (2.02) (1.58) (.31)
------------------------------------------------------------------------------
Total dividends and distributions .... (.92) (1.97) (2.17) (1.58) (.31)
------------------------------------------------------------------------------
Net asset value, end of year ......... $ 16.63 $ 15.82 $ 15.45 $ 14.06 $ 12.71
==============================================================================
========================================================================================================================
Total Investment Return*
- ------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ... 10.93% 15.17% 27.08% 24.75% 38.83%
==============================================================================
========================================================================================================================
Ratios to Average Net Assets+
- ------------------------------------------------------------------------------------------------------------------------
Expenses ............................. 1.67% 1.54% 1.62% 1.78% 1.86%
==============================================================================
Investment income -- net ............. .94% 2.66% 1.87% 1.21% .59%
==============================================================================
========================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) $ 26,777 $ 24,078 $ 10,040 $ 8,684 $ 7,800
==============================================================================
Portfolio turnover of the Portfolio .. 55% 79% 80% 115% 206%
==============================================================================
* Total investment returns exclude the effects of any sales charges.
** Based on average shares outstanding.
+ Includes the Fund's share of the Portfolio's allocated expenses and/or
investment income -- net.
++ Includes redemption fees, which are less than $.01 per share.
See Notes to Financial Statements.
10 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007
Financial Highlights (continued) BlackRock Global Financial Services Fund, Inc.
Investor B
The following per share data ------------------------------------------------------------------------------
and ratios have been derived For the Year Ended September 30,
from information provided in ------------------------------------------------------------------------------
the financial statements. 2007 2006 2005 2004 2003
========================================================================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ... $ 15.52 $ 15.18 $ 13.86 $ 12.51 $ 9.36
------------------------------------------------------------------------------
Investment income (loss) -- net** .... .03 .33 .16 .06 (.03)
Realized and unrealized gain -- net .. 1.55++ 1.84++ 3.23++ 2.74++ 3.49
------------------------------------------------------------------------------
Total from investment operations ..... 1.58 2.17 3.39 2.80 3.46
------------------------------------------------------------------------------
Less dividends and distributions:
Investment income -- net ......... (.28) (.22) (.05) -- --
Realized gain -- net ............. (.50) (1.61) (2.02) (1.45) (.31)
------------------------------------------------------------------------------
Total dividends and distributions .... (.78) (1.83) (2.07) (1.45) (.31)
------------------------------------------------------------------------------
Net asset value, end of year ......... $ 16.32 $ 15.52 $ 15.18 $ 13.86 $ 12.51
==============================================================================
========================================================================================================================
Total Investment Return*
- ------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ... 10.13% 14.23% 26.08% 23.89% 37.71%
==============================================================================
========================================================================================================================
Ratios to Average Net Assets+
- ------------------------------------------------------------------------------------------------------------------------
Expenses ............................. 2.42% 2.30% 2.39% 2.55% 2.64%
==============================================================================
Investment income (loss) -- net ...... .18% 2.08% 1.09% .46% (.24%)
==============================================================================
========================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) $ 22,592 $ 27,397 $ 31,126 $ 33,733 $ 37,202
==============================================================================
Portfolio turnover of the Portfolio .. 55% 79% 80% 115% 206%
==============================================================================
Investor C
The following per share data ------------------------------------------------------------------------------
and ratios have been derived For the Year Ended September 30,
from information provided in ------------------------------------------------------------------------------
the financial statements. 2007 2006 2005 2004 2003
========================================================================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ... $ 15.44 $ 15.10 $ 13.82 $ 12.51 $ 9.36
------------------------------------------------------------------------------
Investment income (loss) -- net** .... .02 .30 .16 .07 (.02)
Realized and unrealized gain -- net .. 1.53++ 1.87++ 3.21++ 2.72++ 3.48
------------------------------------------------------------------------------
Total from investment operations ..... 1.55 2.17 3.37 2.79 3.46
------------------------------------------------------------------------------
Less dividends and distributions:
Investment income -- net ......... (.29) (.22) (.07) -- --
Realized gain -- net ............. (.50) (1.61) (2.02) (1.48) (.31)
------------------------------------------------------------------------------
Total dividends and distributions .... (.79) (1.83) (2.09) (1.48) (.31)
------------------------------------------------------------------------------
Net asset value, end of year ......... $ 16.20 $ 15.44 $ 15.10 $ 13.82 $ 12.51
==============================================================================
========================================================================================================================
Total Investment Return*
- ------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ... 10.04% 14.35% 26.02% 23.83% 37.71%
==============================================================================
========================================================================================================================
Ratios to Average Net Assets+
- ------------------------------------------------------------------------------------------------------------------------
Expenses ............................. 2.47% 2.31% 2.40% 2.56% 2.64%
==============================================================================
Investment income (loss) -- net ...... .13% 1.91% 1.10% .48% (.22%)
==============================================================================
========================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) $ 20,535 $ 21,915 $ 15,087 $ 16,714 $ 13,762
==============================================================================
Portfolio turnover of the Portfolio .. 55% 79% 80% 115% 206%
==============================================================================
* 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 redemption fees, which are less than $.01 per share.
See Notes to Financial Statements.
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007 11
Financial Highlights (concluded) BlackRock Global Financial Services Fund, Inc.
Class R
-------------------------------------------------------------------
For the
For the Year Ended Period
September 30, Jan. 3, 2003@@
The following per share data and ratios have been derived ------------------------------------------------- to Sept. 30,
from information provided in the financial statements. 2007 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** .......................... .10 .36 .29 .14 .04
Realized and unrealized gain -- net ................. 1.54++ 1.90++ 3.18++ 2.74++ 2.42
-------------------------------------------------------------------
Total from investment operations .................... 1.64 2.26 3.47 2.88 2.46
-------------------------------------------------------------------
Less dividends and distributions from:
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 ...................... $ 16.28 $ 15.54 $ 15.21 $ 13.91 $ 12.62
===================================================================
====================================================================================================================================
Total Investment Return
- ------------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share .................. 10.53% 14.90% 26.74% 24.51% 24.21%@
===================================================================
====================================================================================================================================
Ratios to Average Net Assets+
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses ............................................ 2.02% 1.80% 1.83% 2.11% 2.17%*
===================================================================
Investment income -- net ............................ .61% 2.22% 2.02% .99% .45%*
===================================================================
====================================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) ............ $ 8,996 $ 5,314 $ 2,040 $ 555 $ 49
===================================================================
Portfolio turnover of the Portfolio ................. 55% 79% 80% 115% 206%
===================================================================
* Annualized.
** Based on average shares outstanding.
+ Includes the Fund's share of the Portfolio's allocated expenses and/or
investment income -- net.
++ Includes redemption fees, which are less than $.01 per share.
@ Aggregate total investment return.
@@ Commencement of operations.
See Notes to Financial Statements.
12 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007
Notes to Financial Statements 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 LLC, 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. The percentage of the
Portfolio owned by the Fund at September 30, 2007 was 100%. The Fund offers
multiple classes of shares. 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 each of 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
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.
(h) Reclassification -- U.S. generally accepted accounting principles require
that certain components of net assets be adjusted to reflect permanent
differences between financial and tax reporting. Accordingly, during the current
year, $29,318 has been reclassified between undistributed net investment income
and undistributed net realized capital gains as a result of permanent
differences attributable to foreign currency transactions. This reclassification
has no effect on net assets or net asset values per share.
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007 13
Notes to Financial Statements (continued)
BlackRock Global Financial Services Fund, Inc.
2. Transactions with Affiliates:
The Fund has entered into an Administrative Services Agreement with BlackRock
Advisors, LLC (the "Administrator"), an indirect, wholly owned subsidiary of
BlackRock, Inc.
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. Merrill Lynch & Co., Inc. ("Merrill Lynch") and The PNC Financial
Services Group, Inc. ("PNC") are the principal owners of BlackRock, Inc.
The Fund has also entered into separate Distribution Agreements and Distribution
Plans with FAM Distributors, Inc. ("FAMD") and BlackRock Distributors, Inc. and
its affiliates ("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 each Distributor provide 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
services to Investor A, Investor B, Investor C and Class R shareholders. The
ongoing distribution fee compensates the Distributor and the broker-dealers for
providing shareholder servicing and distribution-related services to Investor B,
Investor C and Class R shareholders.
For the year ended September 30, 2007, FAMD and BDI earned underwriting
discounts and direct commissions and MLPF&S and BDI earned dealer concessions on
sales of the Fund's Institutional and Investor A Shares which totaled $29,400.
For the year ended September 30, 2007, affiliates received contingent deferred
sales charges of $15,086 and $4,767 relating to transactions in Investor B and
Investor C Shares, respectively.
Furthermore, affiliates received contingent deferred sales charges of $2,182
relating to transactions subject to front-end sales charge waivers in Investor A
Shares.
The Administrator 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 year
ended September 30, 2007, the following amounts have been accrued by the Fund to
reimburse the Administrator for costs incurred running the call center, which
are a component of the transfer agent fees in the accompanying Statement of
Operations.
- --------------------------------------------------------------------------------
Call Center
Fees
- --------------------------------------------------------------------------------
Institutional ..................................................... $ 330
Investor A ........................................................ $2,152
Investor B ........................................................ $1,204
Investor C ........................................................ $1,323
Class R ........................................................... $ 157
- --------------------------------------------------------------------------------
PFPC Inc., an indirect, wholly owned subsidiary of PNC and an affiliate of the
Administrator, 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
$6,392,855 and $10,473,381 for the years ended September 30, 2007 and September
30, 2006, respectively.
14 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007
Notes to Financial Statements (continued)
BlackRock Global Financial Services Fund, Inc.
Transactions in capital shares for each class were as follows:
- -------------------------------------------------------------------------------
Institutional Shares for the Year Dollar
Ended September 30, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .................................... 283,669 $ 4,712,330
Shares issued to shareholders in reinvestment of
dividends and distributions .................. 50,016 828,755
---------------------------
Total issued ................................... 333,685 5,541,085
Shares redeemed ................................ (483,819) (8,031,720)
---------------------------
Net decrease ................................... (150,134) $ (2,490,635)
===========================
- -------------------------------------------------------------------------------
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 Year Dollar
Ended September 30, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .................................... 811,607 $ 13,332,012
Shares issued to shareholders in reinvestment of
dividends and distributions .................. 70,448 1,161,692
---------------------------
Total issued ................................... 882,055 14,493,704
Shares redeemed ................................ (794,059) (13,109,942)
---------------------------
Net increase ................................... 87,996 $ 1,383,762
===========================
- -------------------------------------------------------------------------------
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 Year Dollar
Ended September 30, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .................................... 149,244 $ 2,420,721
Shares issued to shareholders in reinvestment of
dividends and distributions .................. 68,311 1,111,411
---------------------------
Total issued ................................... 217,555 3,532,132
Shares redeemed ................................ (598,252) (9,714,361)
---------------------------
Net decrease ................................... (380,697) $ (6,182,229)
===========================
- -------------------------------------------------------------------------------
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 Year Dollar
Ended September 30, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .................................... 504,395 $ 8,083,175
Shares issued to shareholders in reinvestment of
dividends and distributions .................. 60,728 981,357
---------------------------
Total issued ................................... 565,123 9,064,532
Shares redeemed ................................ (717,194) (11,576,636)
---------------------------
Net decrease ................................... (152,071) $ (2,512,104)
===========================
- -------------------------------------------------------------------------------
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
===========================
- -------------------------------------------------------------------------------
Class R Shares for the Year Dollar
Ended September 30, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .................................... 408,902 $ 6,625,640
Shares issued to shareholders in reinvestment of
dividends and distributions .................. 21,019 340,088
---------------------------
Total issued ................................... 429,921 6,965,728
Shares redeemed ................................ (219,414) (3,557,377)
---------------------------
Net increase ................................... 210,507 $ 3,408,351
===========================
- -------------------------------------------------------------------------------
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
===========================
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007 15
Notes to Financial Statements (concluded)
BlackRock Global Financial Services Fund, Inc.
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.
4. Distributions to Shareholders:
The tax character of distributions paid during the fiscal years ended September
30, 2007 and September 30, 2006 was as follows:
- -------------------------------------------------------------------------------
9/30/2007 9/30/2006
- -------------------------------------------------------------------------------
Distributions paid from:
Ordinary income .............................. $ 2,168,985 $ 5,652,659
Net long-term capital gains .................. 2,766,405 8,221,423
---------------------------
Total taxable distributions .................... $ 4,935,390 $13,874,082
===========================
As of September 30, 2007, the components of accumulated earnings on a tax basis
were as follows:
- -------------------------------------------------------------------------------
Undistributed ordinary income -- net ........................... $ 5,916,467
Undistributed long-term capital gains -- net ................... 14,565,957
-----------
Total undistributed earnings -- net ............................ 20,482,424
Capital loss carryforward ...................................... --
Unrealized gains -- net ........................................ 13,499,465*
-----------
Total accumulated earnings -- net .............................. $33,981,889
===========
* The difference between book-basis and tax-basis net unrealized gains is
attributable primarily to the tax deferral of losses on wash sales and the
realization for tax purposes of unrealized gains (losses) on certain
forward foreign currency contracts.
16 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007
Report of Independent Registered Public Accounting Firm
BlackRock Global Financial Services Fund, Inc.
To the Shareholders and Board of Directors of BlackRock Global Financial
Services Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of
BlackRock Global Financial Services Fund, Inc. (the "Fund") as of September 30,
2007, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
BlackRock Global Financial Services Fund, Inc. as of September 30, 2007, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended, and its financial highlights
for each of the five years in the period then ended, in conformity with
accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
November 28, 2007
Important Tax Information (Unaudited)
The following information is provided with respect to the ordinary income
distributions paid by BlackRock Global Financial Services Fund, Inc. to
shareholders of record on December 14, 2006:
- ---------------------------------------------------------------------------------------------
Qualified Dividend Income for Individuals* ....................................... 79.08%
Dividends Qualifying for the Dividends Received Deduction for Corporations* ...... 18.84%
Short-Term Capital Gain Dividends for Non-U.S. Residents Per Share ............... $.016158**
- ---------------------------------------------------------------------------------------------
* The Fund hereby designates the percentage indicated above or the maximum
amount allowable by law.
** Represents the portion of the taxable ordinary income dividends eligible
for exemption from U.S. withholding tax for nonresident aliens and foreign
corporations.
Additionally, the Fund distributed long-term capital gains of $.475044 per share
to shareholders of record on December 14, 2006.
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007 17
Portfolio Information Global Financial Services Portfolio
As of September 30, 2007
Percent of
Ten Largest Equity Holdings Net Assets
================================================================================
American International Group, Inc. ................................. 4.4%
Bank of America Corp. .............................................. 4.4
Citigroup, Inc. .................................................... 4.2
JPMorgan Chase & Co. ............................................... 3.8
HSBC Holdings Plc .................................................. 3.2
Wachovia Corp. ..................................................... 3.1
AXA SA ............................................................. 2.8
Banco Santander SA ................................................. 2.7
ACE Ltd. ........................................................... 2.6
UniCredito Italiano SpA ............................................ 2.5
- --------------------------------------------------------------------------------
Industries Represented in Percent of
the Portfolio Net Assets*
================================================================================
Commercial Banks ................................................... 35.2%
Insurance .......................................................... 23.5
Diversified Financial Services ..................................... 15.7
Capital Markets .................................................... 13.5
Real Estate Management & Development ............................... 4.5
Thrifts & Mortgage Finance ......................................... 2.0
Consumer Finance ................................................... 1.5
- --------------------------------------------------------------------------------
* Total may not equal 100%.
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 the purposes of this report, which may
combine industry sub-classifications for reporting ease.
Geographic Allocation Percent of
by Country Long-Term Investments
================================================================================
United States ...................................................... 39.8%
United Kingdom ..................................................... 7.7
South Korea ........................................................ 7.2
Japan .............................................................. 5.2
France ............................................................. 5.2
Switzerland ........................................................ 3.9
Spain .............................................................. 2.8
Germany ............................................................ 2.8
Cayman Islands ..................................................... 2.7
Italy .............................................................. 2.6
Hong Kong .......................................................... 2.4
China .............................................................. 2.4
Indonesia .......................................................... 2.3
India .............................................................. 2.0
Netherlands ........................................................ 1.5
Bermuda ............................................................ 1.3
Malaysia ........................................................... 1.1
Austria ............................................................ 1.0
Denmark ............................................................ 1.0
Taiwan ............................................................. 1.0
Ireland ............................................................ 0.9
Turkey ............................................................. 0.9
Belgium ............................................................ 0.7
Singapore .......................................................... 0.6
Egypt .............................................................. 0.5
Thailand ........................................................... 0.5
- --------------------------------------------------------------------------------
18 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007
Schedule of Investments as of September 30, 2007
Global Financial Services Portfolio (in U.S. dollars)
Shares
Common Stocks Held Value
===============================================================================
Europe
- -------------------------------------------------------------------------------
Austria -- 1.0%
Commercial Banks -- 1.0%
Erste Bank der Oesterreichischen Sparkassen AG 12,500 $ 952,709
- -------------------------------------------------------------------------------
Total Common Stocks in Austria 952,709
===============================================================================
Belgium -- 0.7%
Commercial Banks -- 0.3%
KBC Bancassurance Holding 1,800 247,635
- -------------------------------------------------------------------------------
Diversified Financial Services -- 0.4%
Fortis 13,600 400,462
- -------------------------------------------------------------------------------
Total Common Stocks in Belgium 648,097
===============================================================================
Denmark -- 1.0%
Commercial Banks -- 1.0%
Danske Bank A/S 23,100 937,848
- -------------------------------------------------------------------------------
Total Common Stocks in Denmark 937,848
===============================================================================
France -- 5.0%
Commercial Banks -- 2.2%
BNP Paribas SA 19,200 2,100,997
- -------------------------------------------------------------------------------
Insurance -- 2.8%
AXA SA 59,600 2,666,868
- -------------------------------------------------------------------------------
Total Common Stocks in France 4,767,865
===============================================================================
Germany -- 2.6%
Insurance -- 2.6%
Allianz AG Registered Shares 6,200 1,448,573
Hannover Rueckversicherungs AG Registered Shares 20,900 1,060,363
- -------------------------------------------------------------------------------
Total Common Stocks in Germany 2,508,936
===============================================================================
Ireland -- 0.9%
Commercial Banks -- 0.9%
Allied Irish Banks Plc 35,500 855,447
- -------------------------------------------------------------------------------
Total Common Stocks in Ireland 855,447
===============================================================================
Italy -- 2.5%
Commercial Banks -- 2.5%
UniCredito Italiano SpA 276,600 2,366,496
- -------------------------------------------------------------------------------
Total Common Stocks in Italy 2,366,496
===============================================================================
Netherlands -- 1.4%
Diversified Financial Services -- 1.4%
ING Groep NV CVA 29,900 1,327,250
- -------------------------------------------------------------------------------
Total Common Stocks in the Netherlands 1,327,250
===============================================================================
Spain -- 2.7%
Commercial Banks -- 2.7%
Banco Santander SA 131,200 2,549,952
- -------------------------------------------------------------------------------
Total Common Stocks in Spain 2,549,952
===============================================================================
Switzerland -- 3.7%
Capital Markets -- 3.7%
Julius Baer Holding AG Class B 17,300 1,293,507
UBS AG 41,700 2,242,147
- -------------------------------------------------------------------------------
Total Common Stocks in Switzerland 3,535,654
===============================================================================
Turkey -- 0.8%
Commercial Banks -- 0.8%
Akbank T.A.S. 102,483 781,146
- -------------------------------------------------------------------------------
Total Common Stocks in Turkey 781,146
===============================================================================
United Kingdom -- 7.4%
Commercial Banks -- 7.4%
Barclays Plc 118,600 1,445,010
HSBC Holdings Plc 163,500 3,025,734
Lloyds TSB Group Plc 90,200 1,001,176
Standard Chartered Plc 47,900 1,568,050
- -------------------------------------------------------------------------------
Total Common Stocks in the United Kingdom 7,039,970
===============================================================================
Total Common Stocks in Europe -- 29.7% 28,271,370
===============================================================================
===============================================================================
Middle East
- -------------------------------------------------------------------------------
Egypt -- 0.5%
Commercial Banks -- 0.5%
Commercial International Bank 31,800 438,171
- -------------------------------------------------------------------------------
Total Common Stocks in the Middle East -- 0.5% 438,171
===============================================================================
===============================================================================
North America
- -------------------------------------------------------------------------------
Bermuda -- 1.3%
Insurance -- 1.3%
RenaissanceRe Holdings Ltd. 18,700 1,223,167
- -------------------------------------------------------------------------------
Total Common Stocks in Bermuda 1,223,167
===============================================================================
Cayman Islands -- 2.6%
Insurance -- 2.6%
ACE Ltd. 40,600 2,459,142
- -------------------------------------------------------------------------------
Total Common Stocks in the Cayman Islands 2,459,142
===============================================================================
United States -- 38.1%
Capital Markets -- 8.9%
Affiliated Managers Group, Inc. (a) 13,700 1,746,887
The Bank of New York Mellon Corp. 49,000 2,162,860
Franklin Resources, Inc. 8,200 1,045,500
The Goldman Sachs Group, Inc. 10,700 2,319,118
Lehman Brothers Holdings, Inc. 19,500 1,203,735
-----------
8,478,100
- -------------------------------------------------------------------------------
Commercial Banks -- 3.1%
Wachovia Corp. 58,756 2,946,613
- -------------------------------------------------------------------------------
Consumer Finance -- 1.5%
American Express Co. (b) 24,365 1,446,550
- -------------------------------------------------------------------------------
Diversified Financial Services -- 12.4%
Bank of America Corp. 82,968 4,170,801
Citigroup, Inc. 85,919 4,009,840
JPMorgan Chase & Co. 79,875 3,659,873
-----------
11,840,514
- -------------------------------------------------------------------------------
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007 19
Schedule of Investments (continued)
Global Financial Services Portfolio (in U.S. dollars)
Shares
Common Stocks Held Value
===============================================================================
North America (concluded)
- -------------------------------------------------------------------------------
United States (concluded)
Insurance -- 10.2%
American International Group, Inc. 61,932 $ 4,189,700
Hartford Financial Services Group, Inc. 19,111 1,768,723
MetLife, Inc. 18,900 1,317,897
Prudential Financial, Inc. 14,624 1,427,010
The Travelers Cos., Inc. 19,800 996,732
-----------
9,700,062
- -------------------------------------------------------------------------------
Thrifts & Mortgage Finance -- 2.0%
Fannie Mae 31,600 1,921,596
- -------------------------------------------------------------------------------
Total Common Stocks in the United States 36,333,435
- -------------------------------------------------------------------------------
Total Common Stocks in North America -- 42.0% 40,015,744
===============================================================================
===============================================================================
Pacific Basin/Asia
- -------------------------------------------------------------------------------
China -- 2.3%
Commercial Banks -- 1.0%
China Citic Bank (a) 280,000 217,550
China Merchants Bank Co. Ltd. 166,200 730,105
-----------
947,655
- -------------------------------------------------------------------------------
Real Estate Management &
Development -- 1.3%
Guangzhou R&F Properties Co. Ltd. 260,600 1,230,281
- -------------------------------------------------------------------------------
Total Common Stocks in China 2,177,936
===============================================================================
Hong Kong -- 2.3%
Commercial Banks -- 0.4%
Industrial & Commercial Bank of China 480,000 336,513
- -------------------------------------------------------------------------------
Real Estate Management &
Development -- 1.9%
China Resources Land Ltd. 526,000 1,096,136
Hopson Development Holdings Ltd. 228,300 760,623
-----------
1,856,759
- -------------------------------------------------------------------------------
Total Common Stocks in Hong Kong 2,193,272
===============================================================================
India -- 1.9%
Commercial Banks -- 0.8%
ICICI Bank Ltd. 29,400 783,852
- -------------------------------------------------------------------------------
Diversified Financial Services -- 1.1%
Infrastructure Development
Finance Co. Ltd. 298,700 1,057,322
- -------------------------------------------------------------------------------
Total Common Stocks in India 1,841,174
===============================================================================
Indonesia -- 2.2%
Commercial Banks -- 2.2%
Bank Central Asia Tbk PT 1,109,400 746,070
Bank Danamon Indonesia Tbk PT 603,700 557,820
Bank Mandiri Persero Tbk PT 2,146,300 827,305
- -------------------------------------------------------------------------------
Total Common Stocks in Indonesia 2,131,195
===============================================================================
Japan -- 5.0%
Capital Markets -- 0.9%
Nomura Holdings, Inc. 50,200 841,729
- -------------------------------------------------------------------------------
Commercial Banks -- 2.8%
Mitsubishi UFJ Financial Group, Inc. 120 1,055,152
Sumitomo Mitsui Financial Group, Inc. 210 1,636,269
-----------
2,691,421
- -------------------------------------------------------------------------------
Real Estate Management &
Development -- 1.3%
Sumitomo Real Estate Sales 16,000 1,242,502
- -------------------------------------------------------------------------------
Total Common Stocks in Japan 4,775,652
===============================================================================
Malaysia -- 1.0%
Commercial Banks -- 0.7%
Public Bank BHD 231,400 675,695
- -------------------------------------------------------------------------------
Diversified Financial Services -- 0.3%
AMMB Holdings BHD 226,800 288,866
- -------------------------------------------------------------------------------
Total Common Stocks in Malaysia 964,561
===============================================================================
Singapore -- 0.6%
Commercial Banks -- 0.6%
United Overseas Bank Ltd. 39,200 583,184
- -------------------------------------------------------------------------------
Total Common Stocks in Singapore 583,184
===============================================================================
South Korea -- 6.9%
Commercial Banks -- 3.4%
Daegu Bank 60,000 1,111,233
Kookmin Bank 12,200 1,015,778
Shinhan Financial Group Co. Ltd. 16,400 1,071,591
-----------
3,198,602
- -------------------------------------------------------------------------------
Insurance -- 3.5%
Dongbu Insurance Co., Ltd. 25,300 1,061,538
Korean Reinsurance Co. 78,721 1,113,895
Meritz Fire & Marine Insurance Co. Ltd. 105,977 1,156,808
-----------
3,332,241
- -------------------------------------------------------------------------------
Total Common Stocks in South Korea 6,530,843
===============================================================================
Taiwan -- 1.0%
Commercial Banks -- 0.5%
SinoPac Financial Holdings Co., Ltd. 951,000 442,936
- -------------------------------------------------------------------------------
Insurance -- 0.5%
Cathay Financial Holding Co., Ltd. 195,000 461,284
- -------------------------------------------------------------------------------
Total Common Stocks in Taiwan 904,220
===============================================================================
20 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007
Schedule of Investments (concluded)
Global Financial Services Portfolio (in U.S. dollars)
Shares
Common Stocks Held Value
===============================================================================
Pacific Basin/Asia (concluded)
- -------------------------------------------------------------------------------
Thailand -- 0.4%
Commercial Banks -- 0.4%
Bangkok Bank PCL Foreign Shares 124,700 $ 418,395
- -------------------------------------------------------------------------------
Total Common Stocks in Thailand 418,395
- -------------------------------------------------------------------------------
Total Common Stocks in the
Pacific Basin/Asia -- 23.6% 22,520,432
- -------------------------------------------------------------------------------
Total Investments in Common Stocks
(Cost -- $77,169,949) -- 95.8% 91,245,717
===============================================================================
===============================================================================
Rights (a)
- -------------------------------------------------------------------------------
Belgium -- 0.1%
Diversified Financial Services -- 0.1%
Fortis (f) 13,600 72,141
- -------------------------------------------------------------------------------
Total Investments in Rights (Cost -- $38,815) -- 0.1% 72,141
===============================================================================
===============================================================================
Beneficial
Short-Term Securities Interest Value
===============================================================================
BlackRock Liquidity Series, LLC Cash Sweep
Series, 5.22% (c)(d) $4,568,364 $ 4,568,364
BlackRock Liquidity Series, LLC Money Market
Series, 5.26% (c)(d)(e) 1,274,900 1,274,900
- -------------------------------------------------------------------------------
Total Short-Term Securities
(Cost -- $5,843,264) -- 6.1% 5,843,264
===============================================================================
===============================================================================
Number of
Call Options Purchased Contracts
- -------------------------------------------------------------------------------
United States -- 0.7%
The Bear Stearns Cos., Inc., expiring
January 2008 at $100 235 632,150
- -------------------------------------------------------------------------------
Total Call Options Purchased
(Premiums Paid -- $859,969) -- 0.7% 632,150
===============================================================================
Total Investments (Cost -- $83,911,997*) -- 102.7% 97,793,272
Liabilities in Excess of Other Assets -- (2.7%) (2,587,535)
-----------
Net Assets -- 100.0% $95,205,737
===========
* The cost and unrealized appreciation (depreciation) of investments as of
September 30, 2007, as computed for federal income tax purposes, were as
follows:
Aggregate cost .......................................... $ 84,267,373
============
Gross unrealized appreciation ........................... $ 16,209,741
Gross unrealized depreciation ........................... (2,683,842)
------------
Net unrealized appreciation ............................. $ 13,525,899
============
(a) Non-income producing security.
(b) Security, or a portion of security, is on loan.
(c) Investments in companies considered to be an affiliate of the Fund, for
purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as
follows:
--------------------------------------------------------------------------
Net Interest
Affiliate Activity Income
--------------------------------------------------------------------------
BlackRock Liquidity Series, LLC
Cash Sweep Series $ 2,799,803 $174,222
BlackRock Liquidity Series, LLC
Money Market Series $(4,421,400) $ 10,906
--------------------------------------------------------------------------
(d) Represents the current yield as of September 30, 2007.
(e) Security was purchased with the cash proceeds from securities loans.
(f) The rights may be exercised until October 9, 2007.
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. These industry classifications are unaudited.
See Notes to Financial Statements.
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007 21
Statement of Assets and Liabilities Global Financial Services Portfolio
As of September 30, 2007
===================================================================================================================================
Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Investments in unaffiliated securities, at value (including securities loaned of $1,240,833)
(identified cost -- $77,208,764) ............................................................. $ 91,317,858
Investments in affiliated securities, at value (identified cost -- $5,843,264) ................. 5,843,264
Options purchased, at value (premiums paid -- $859,969) ........................................ 632,150
Foreign cash (cost -- $283,098) ................................................................ 286,222
Receivables:
Contributions .............................................................................. $ 1,167,232
Dividends .................................................................................. 207,229
Securities lending ......................................................................... 58 1,374,519
-------------
Prepaid expenses and other assets .............................................................. 2,693
-------------
Total assets ................................................................................... 99,456,706
-------------
===================================================================================================================================
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------------
Collateral on securities loaned, at value ...................................................... 1,274,900
Deferred capital gain tax ...................................................................... 27,994
Payables:
Securities purchased ....................................................................... 2,040,040
Withdrawals ................................................................................ 833,757
Investment adviser ......................................................................... 27,650
Other affiliates ........................................................................... 401 2,901,848
-------------
Accrued expenses and other liabilities ......................................................... 46,227
-------------
Total liabilities .............................................................................. 4,250,969
-------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets ..................................................................................... $ 95,205,737
=============
===================================================================================================================================
Net Assets Consist of
- -----------------------------------------------------------------------------------------------------------------------------------
Investor's capital ............................................................................. $ 81,344,656
Unrealized appreciation -- net ................................................................. 13,861,081
-------------
Net assets ..................................................................................... $ 95,205,737
=============
See Notes to Financial Statements.
22 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007
Statement of Operations Global Financial Services Portfolio
For the Year Ended September 30, 2007
===================================================================================================================================
Investment Income
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends (net of $124,903 foreign withholding tax) ............................................ $ 2,299,747
Interest from affiliates ....................................................................... 174,222
Securities lending -- net ...................................................................... 10,906
-------------
Total income ................................................................................... 2,484,875
-------------
===================================================================================================================================
Expenses
- -----------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees ....................................................................... $ 382,475
Custodian fees ................................................................................. 104,745
Accounting services ............................................................................ 93,499
Trustees' fees and expenses .................................................................... 39,908
Professional fees .............................................................................. 35,517
Printing and shareholder reports ............................................................... 8,442
Pricing fees ................................................................................... 5,065
Other .......................................................................................... 11,900
-------------
Total expenses ................................................................................. 681,551
-------------
Investment income -- net ....................................................................... 1,803,324
-------------
===================================================================================================================================
Realized & Unrealized Gain (Loss) -- Net
- -----------------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) on:
Investments -- net ......................................................................... 22,323,721
Foreign currency transactions -- net ....................................................... (29,318) 22,294,403
-------------
Change in unrealized appreciation/depreciation on:
Investments (including $27,994 from deferred capital gain tax) -- net ...................... (12,915,538)
Foreign currency transactions -- net ....................................................... 8,543 (12,906,995)
-------------------------------
Total realized and unrealized gain -- net ...................................................... 9,387,408
-------------
Net Increase in Net Assets Resulting from Operations ........................................... $ 11,190,732
=============
See Notes to Financial Statements.
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007 23
Statements of Changes in Net Assets Global Financial Services Portfolio
For the Year Ended
September 30,
-------------------------------
Increase (Decrease) in Net Assets: 2007 2006
===================================================================================================================================
Operations
- -----------------------------------------------------------------------------------------------------------------------------------
Investment income -- net ....................................................................... $ 1,803,324 $ 4,610,582
Realized gain -- net ........................................................................... 22,294,403 3,978,060
Change in unrealized appreciation/depreciation -- net .......................................... (12,906,995) 5,772,820
-------------------------------
Net increase in net assets resulting from operations ........................................... 11,190,732 14,361,462
-------------------------------
===================================================================================================================================
Capital Transactions
- -----------------------------------------------------------------------------------------------------------------------------------
Proceeds from contributions .................................................................... 35,173,878 55,241,858
Fair value of withdrawals ...................................................................... (47,759,892) (80,955,336)
-------------------------------
Net decrease in net assets derived from capital transactions ................................... (12,586,014) (25,713,478)
-------------------------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total decrease in net assets ................................................................... (1,395,282) (11,352,016)
Beginning of year .............................................................................. 96,601,019 107,953,035
-------------------------------
End of year .................................................................................... $ 95,205,737 $ 96,601,019
===============================
See Notes to Financial Statements.
24 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007
Financial Highlights Global Financial Services Portfolio
For the Year Ended September 30,
The following ratios have been derived from ---------------------------------------------------------------------------
information provided in the financial statements. 2007 2006 2005 2004 2003
===================================================================================================================================
Total Investment Return
- -----------------------------------------------------------------------------------------------------------------------------------
Total investment return ............................ 11.91% 16.07% 28.02% 25.86% 40.92%
===========================================================================
===================================================================================================================================
Ratios to Average Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses ........................................... .71% .66% .70% .78% .76%
===========================================================================
Investment income -- net ........................... 1.89% 3.62% 3.05% 2.23% 1.64%
===========================================================================
===================================================================================================================================
Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) ............. $ 95,206 $ 96,601 $ 107,953 $ 70,762 $ 70,172
===========================================================================
Portfolio turnover ................................. 55% 79% 80% 115% 206%
===========================================================================
See Notes to Financial Statements.
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007 25
Notes to Financial Statements Global Financial Services Portfolio
1. Significant Accounting Policies:
Global Financial Services Portfolio (the "Portfolio") is part of Global
Financial Services Master LLC (the "Master LLC"). The Master LLC is registered
under the Investment Company Act of 1940, as amended, and is organized as a
Delaware limited liability company. Prior to June 15, 2007, the Master LLC was
organized as a Delaware statutory trust (the "Trust"). The Limited Liability
Company Agreement (the "LLC Agreement") permits the Directors (and prior to June
15, 2007, the Declaration of Trust permitted the Trustees) to issue
nontransferable interests in the Master LLC/Trust, subject to certain
limitations. Throughout this report the Trust and the Master LLC are referred to
as the Master LLC and the Board of Directors and the Board of Trustees are
referred to as the Board of Directors. 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. The following is a summary of significant
accounting policies followed by the Portfolio.
(a) Valuation of investments -- Equity securities 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 Directors. 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 Directors.
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.
Effective September 4, 2007, exchange-traded options written or purchased are
valued at the mean price and previously were valued at the last sale price 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 Directors, 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 Board of Directors. Such
valuations and procedures will be reviewed periodically by the Board of
Directors.
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 Board of
Directors 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 Board of Directors.
(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 an unfavorable change in the
price of the underlying security or index of if the counterparty does not
perform under the contract. The counterparty for certain instruments may pledge
cash or securities as collateral.
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 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
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
26 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007
Notes to Financial Statements (continued) Global Financial Services Portfolio
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 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.
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007 27
Notes to Financial Statements (concluded) Global Financial Services Portfolio
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 Master LLC has entered into an Investment Advisory Agreement with the
Manager. Merrill Lynch & Co., Inc. ("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.
The Master LLC 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. As of September 30, 2007, the Master LLC lent
securities with a value of $1,240,833 to MLPF&S 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. 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 registered money market funds advised by the Manager or its
affiliates. For the year ended September 30, 2007, BIM received $4,324 in
securities lending agent fees.
In addition, MLPF&S received $10,642 in commissions on the execution of
portfolio security transactions for the Portfolio for the year ended September
30, 2007.
For the year ended September 30, 2007, the Portfolio reimbursed the Manager
$1,683 for certain accounting services.
Certain officers and/or directors of the Master LLC are officers and/or
directors of BlackRock, Inc. or its affiliates.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
year ended September 30, 2007 were $50,128,526 and $53,885,570, 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, which expires November 2007. 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.
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 year ended September 30, 2007.
5. Commitments:
At September 30, 2007, the Portfolio had entered into foreign exchange contracts
under which it had purchased various foreign currencies with approximate values
of $1,496,000.
28 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007
Report of Independent Registered Public Accounting Firm
Global Financial Services Master LLC
To the Investor and Board of Directors of Global Financial Services Master LLC:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Global Financial Services Portfolio of Global
Financial Services Master LLC (the "Master LLC") as of September 30, 2007, and
the related statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Master LLC's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The
Master LLC is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audits included consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Master LLC's internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of September 30, 2007, by correspondence with the
custodian and brokers; where replies were not received from brokers, we
performed other auditing procedures. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Global
Financial Services Portfolio of Global Financial Services Master LLC as of
September 30, 2007, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended,
and its financial highlights for each of the five years in the period then
ended, in conformity with accounting principles generally accepted in the United
States of America.
Deloitte & Touche LLP
Princeton, New Jersey
November 28, 2007
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007 29
Officers and Directors as of September 30, 2007
Number of
Funds and
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Name, Address Held with Time Overseen by Held by
and Year of Birth Fund Served Principal Occupation(s) During Past 5 Years Director Director
====================================================================================================================================
Interested Director
- ------------------------------------------------------------------------------------------------------------------------------------
Robert C. Doll, Jr.* Fund 2005 to Vice Chairman and Director of BlackRock, 120 Funds None
P.O. Box 9011 President 2007 Inc., Global Chief Investment Officer for 161 Portfolios
Princeton, NJ 08543-9011 and Equities, Chairman of the BlackRock Retail
1954 Director Operating Committee, and member of the
BlackRock Executive Committee since 2006;
President of the funds advised by Merrill
Lynch Investment Managers, L.P. ("MLIM") and
its affiliates ("MLIM/FAM-advised funds")
from 2005 to 2006 and Chief Investment
Officer thereof from 2001 to 2006; President
of MLIM and Fund Asset Management, L.P.
("FAM") from 2001 to 2006; Co-Head (Americas
Region) thereof from 2000 to 2001 and Senior
Vice President from 1999 to 2001; President
and Director of Princeton Services, Inc.
("Princeton Services") and President of
Princeton Administrators, L.P. ("Princeton
Administrators") from 2001 to 2006; Chief
Investment Officer of OppenheimerFunds, Inc.
in 1999 and Executive Vice President thereof
from 1991 to 1999.
---------------------------------------------------------------------------------------------------------
* Mr. Doll is a director, trustee or member of an advisory board of certain other investment
companies for which BlackRock Advisors, LLC and its affiliates act as investment adviser. Mr.
Doll is an "interested person," as defined in the Investment Company Act, of the Fund based on
his positions with BlackRock, Inc. and its affiliates. Directors serve until their resignation,
removal or death, or until December 31 of the year in which they turn 72. As Fund President, Mr.
Doll serves at the pleasure of the Board of Directors.
====================================================================================================================================
Independent Directors*
- ------------------------------------------------------------------------------------------------------------------------------------
Ronald W. Forbes** Director 1999 to Professor Emeritus of Finance, School of 46 Funds None
P.O. Box 9095 present Business, State University of New York at 48 Portfolios
Princeton, NJ 08543-9095 Albany since 2000 and Professor thereof from
1940 1989 to 2000; International Consultant,
Urban Institute, Washington, D.C. from 1995
to 1999.
- ------------------------------------------------------------------------------------------------------------------------------------
Cynthia A. Montgomery Director 1999 to Professor, Harvard Business School since 46 Funds Newell Rubbermaid,
P.O. Box 9095 present 1989; Associate Professor, J.L. Kellogg 48 Portfolios Inc. (manufacturing)
Princeton, NJ 08543-9095 Graduate School of Management, Northwestern
1952 University from 1985 to 1989; Associate
Professor, Graduate School of Business
Administration, University of Michigan from
1979 to 1985; Director, Harvard Business
School Publishing since 2005; Director,
McLean Hospital since 2005.
- ------------------------------------------------------------------------------------------------------------------------------------
Jean Margo Reid Director 2004 to Self-employed consultant since 2001; Counsel 46 Funds None
P.O. Box 9095 2007 of Alliance Capital Management (investment 48 Portfolios
Princeton, NJ 08543-9095 adviser) in 2000; General Counsel, Director
1945 and Secretary of Sanford C. Bernstein & Co.,
Inc. (investment adviser/broker-dealer) from
1997 to 2000; Secretary, Sanford C.
Bernstein Fund, Inc. from 1994 to 2000;
Director and Secretary of SCB, Inc. since
1998; Director and Secretary of SCB
Partners, Inc. since 2000; and Director of
Covenant House from 2001 to 2004.
- ------------------------------------------------------------------------------------------------------------------------------------
Roscoe S. Suddarth Director 2000 to President, Middle East Institute, from 1995 46 Funds None
P.O. Box 9095 2007 to 2001; Foreign Service Officer, United 48 Portfolios
Princeton, NJ 08543-9095 States Foreign Service, from 1961 to 1995
1935 and Career Minister from 1989 to 1995;
Deputy Inspector General, U.S. Department of
State, from 1991 to 1994; U.S. Ambassador to
the Hashemite Kingdom of Jordan from 1987 to
1990.
- ------------------------------------------------------------------------------------------------------------------------------------
Richard R. West Director 1999 to Professor of Finance from 1984 to 1995, Dean 46 Funds Bowne & Co., Inc.
P.O. Box 9095 2007 from 1984 to 1993 and since 1995 Dean 48 Portfolios (financial printers);
Princeton, NJ 08543-9095 Emeritus of New York University's Leonard N. Vornado Realty
1938 Stern School of Business Administration. Trust (real estate
company);
Alexander's, Inc.
(real estate company)
- ------------------------------------------------------------------------------------------------------------------------------------
* Directors serve until their resignation, removal or death, or until December 31 of the year in
which they turn 72.
** Chairman of the Board of Directors and the Audit Committee.
30 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007
Officers and Directors as of September 30, 2007 (concluded)
Position(s) Length of
Name, Address Held with Time
and Year of Birth Fund Served Principal Occupation(s) During Past 5 Years
====================================================================================================================================
Fund Officers*
- ------------------------------------------------------------------------------------------------------------------------------------
Donald C. Burke Vice 1999 to Managing Director of BlackRock, Inc. since 2006; Managing Director of Merrill Lynch
P.O. Box 9011 President 2007 Investment Managers, L.P. ("MLIM") and Fund Asset Management, L.P. ("FAM") in 2006;
Princeton, NJ 08543-9011 and First Vice President of MLIM and FAM from 1997 to 2005 and Treasurer thereof from
1960 Treasurer 1999 to 2006; Vice President of MLIM and FAM from 1990 to 1997.
- ------------------------------------------------------------------------------------------------------------------------------------
Karen Clark Chief 2007 Managing Director of BlackRock, Inc. and Chief Compliance Officer of certain
P.O. Box 9011 Compliance BlackRock-advised funds since 2007; Director of BlackRock, Inc. from 2005 to 2007;
Princeton, NJ 08543-9011 Officer Principal and Senior Compliance Officer, State Street Global Advisors, from 2001 to
1965 2005; Principal Consultant, PricewaterhouseCoopers, LLP from 1998 to 2001; and
Branch Chief, Division of Investment Management and Office of Compliance
Inspections and Examinations, U.S. Securities and Exchange Commission,
from 1993 to 1998.
- ------------------------------------------------------------------------------------------------------------------------------------
Howard Surloff Secretary 2007 to Managing Director of BlackRock, Inc. and General Counsel of U.S. Funds at
P.O. Box 9011 present BlackRock, Inc. since 2006. General Counsel (U.S.) of Goldman Sachs Asset
Princeton, NJ 08543-9011 Management from 1993 to 2006.
1965
---------------------------------------------------------------------------------------------------------
* Officers of the Fund serve at the pleasure of the Board of Directors.
- ------------------------------------------------------------------------------------------------------------------------------------
Further information about the Fund's Officers and Directors is available in the Fund's Statement of
Additional Information, which can be obtained without charge by calling 1-800-441-7762.
- ------------------------------------------------------------------------------------------------------------------------------------
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109-3661
Transfer Agent
PFPC Inc.
Wilmington, DE 19809
BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007 31
Proxy Results
During the six-month period ended September 30, 2007, the shareholders of
BlackRock Global Financial Services Fund, Inc. voted on the following proposal,
which was approved at a special shareholders' meeting on September 7, 2007. This
proposal was part of the reorganization of the Fund's Board of Directors to take
effect on or about November 1, 2007. A description of the proposal and number of
shares voted are as follows:
- ------------------------------------------------------------------------------------------------------------------
Shares Voted Shares Withheld
For From Voting
- ------------------------------------------------------------------------------------------------------------------
To elect the Fund's Board of Directors: David O. Beim 4,884,889 819
Richard S. Davis 4,885,285 423
Ronald W. Forbes 4,884,889 819
Henry Gabbay 4,885,285 423
Dr. Matina Horner 4,884,929 779
Rodney D. Johnson 4,884,889 819
Herbert I. London 4,884,329 1,380
Cynthia A. Montgomery 4,884,889 819
Joseph P. Platt, Jr. 4,884,725 983
Robert C. Robb, Jr. 4,884,929 779
Toby Rosenblatt 4,884,889 819
Kenneth L. Urish 4,884,889 819
Frederick W. Winter 4,884,889 819
- ------------------------------------------------------------------------------------------------------------------
32 BLACKROCK GLOBAL FINANCIAL SERVICES FUND, INC. SEPTEMBER 30, 2007
BlackRock Fund Information
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former fund
investors and individual clients (collectively, "Clients") and to safeguarding
their non-public personal information. The following information is provided to
help you understand what personal information BlackRock collects, how we protect
that information and why in certain cases we share such information with select
parties.
If you are located in a jurisdiction where specific laws, rules or regulations
require BlackRock to provide you with additional or different privacy-related
rights beyond what is set forth below, then BlackRock will comply with those
specific laws, rules or regulations.
BlackRock obtains or verifies personal non-public information from and about you
from different sources, including the following: (i) information we receive from
you or, if applicable, your financial intermediary, on applications, forms or
other documents; (ii) information about your transactions with us, our
affiliates, or others; (iii) information we receive from a consumer reporting
agency; and (iv) from visits to our Web sites.
BlackRock does not sell or disclose to non-affiliated third parties any
non-public personal information about its Clients, except as permitted by law or
as is necessary to respond to regulatory requests or to service Client accounts.
These non-affiliated third parties are required to protect the confidentiality
and security of this information and to use it only for its intended purpose.
We may share information with our affiliates to service your account or to
provide you with information about other BlackRock products or services that may
be of interest to you. In addition, BlackRock restricts access to non-public
personal information about its Clients to those BlackRock employees with a
legitimate business need for the information. BlackRock maintains physical,
electronic and procedural safeguards that are designed to protect the non-public
personal information of its Clients, including procedures relating to the proper
storage and disposal of such information.
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. SEPTEMBER 30, 2007 33
BlackRock Fund Information (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. 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/funds.
Automatic Investment Plans
Investor Class shareholders who want to invest regularly can arrange to have $50
or more automatically deducted from their checking or savings account and
invested in any of the BlackRock funds.
Systematic Withdrawal Plans
Investor Class shareholders can establish a systematic withdrawal plan and
receive periodic payments of $50 or more from their BlackRock funds, as long as
their account 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. SEPTEMBER 30, 2007
A World-Class Mutual Fund Family
BlackRock offers a diverse lineup of open-end mutual funds crossing all
investment styles and managed by experts in equity, fixed income and tax-exempt
investing.
Equity Funds
BlackRock 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 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 Large Cap Core Fund
BlackRock Large Cap Growth Fund
BlackRock Large Cap Value Fund
BlackRock Latin America Fund
BlackRock Mid-Cap Growth Equity Portfolio
BlackRock Mid-Cap Value Equity Portfolio
BlackRock Mid Cap Value Opportunities Fund
BlackRock Natural Resources Trust
BlackRock Pacific Fund
BlackRock 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 Technology Fund
BlackRock U.S. Opportunities Portfolio
BlackRock Utilities and Telecommunications Fund
BlackRock Value Opportunities Fund
Fixed Income Funds
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 Fund
BlackRock Total Return Portfolio II
BlackRock World Income Fund
Municipal Bond Funds
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
Target Risk & Target Date Funds
BlackRock Prepared Portfolios
Conservative Prepared Portfolio
Moderate Prepared Portfolio
Growth Prepared Portfolio
Aggressive Growth Prepared Portfolio
BlackRock Lifecycle Prepared Portfolios
Prepared Portfolio 2010
Prepared Portfolio 2015
Prepared Portfolio 2020
Prepared Portfolio 2025
Prepared Portfolio 2030
Prepared Portfolio 2035
Prepared Portfolio 2040
Prepared Portfolio 2045
Prepared Portfolio 2050
* 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. SEPTEMBER 30, 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-9/07
Item 2 - Code of Ethics - The registrant (or the "Fund") has adopted a code
of ethics, as of the end of the period covered by this report,
applicable to the registrant's principal executive officer,
principal financial officer and principal accounting officer, or
persons performing similar functions. During the period covered by
this report, there have been no amendments to or waivers granted
under the code of ethics. A copy of the code of ethics is available
without charge at www.blackrock.com.
Item 3 - Audit Committee Financial Expert - The registrant's board of
directors or trustees, as applicable (the "board of directors") has
determined that (i) the registrant has the following audit committee
financial experts serving on its audit committee and (ii) each audit
committee financial expert is independent:
Kenneth L. Urish (term began, effective November 1, 2007) Ronald W.
Forbes (term ended, effective November 1, 2007) Richard R. West
(term ended, effective November 1, 2007) Edward D. Zinbarg (retired
as of December 31, 2006)
Under applicable securities laws, a person determined to be an audit
committee financial expert will not be deemed an "expert" for any
purpose, including without limitation for the purposes of Section 11
of the Securities Act of 1933, as a result of being designated or
identified as an audit committee financial expert. The designation
or identification as an audit committee financial expert does not
impose on such person any duties, obligations, or liabilities
greater than the duties, obligations, and liabilities imposed on
such person as a member of the audit committee and board of
directors in the absence of such designation or identification.
Item 4 - Principal Accountant Fees and Services
- ----------------------------------------------------------------------------------------------------------------------
(a) Audit Fees Fees (b) Audit-Related(1) (c) Tax Fees(2) (d) All Other Fees(3)
- ----------------------------------------------------------------------------------------------------------------------
Current Previous Current Previous Current Previous Current Previous
Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
Entity Name Year End Year End Year End Year End Year End Year End Year End Year End
- ----------------------------------------------------------------------------------------------------------------------
Global Financial
Services Master LLC $27,400 $27,400 $0 $0 $ 0 $1,587 $ 0 $0
- ----------------------------------------------------------------------------------------------------------------------
BlackRock Global
Financial Services
Fund, Inc. $ 6,600 $ 6,600 $0 $0 $6,100 $6,000 $1,042 $0
- ----------------------------------------------------------------------------------------------------------------------
1 The nature of the services include assurance and related services reasonably
related to the performance of the audit of financial statements not included in
Audit Fees.
2 The nature of the services include tax compliance, tax advice and tax
planning.
3 The nature of the services include a review of compliance procedures and
attestation thereto.
(e)(1) Audit Committee Pre-Approval Policies and Procedures:
The registrant's audit committee (the "Committee") has adopted
policies and procedures with regard to the pre-approval of services.
Audit, audit-related and tax compliance services provided to the
registrant on an annual basis require specific pre-approval by the
Committee. The Committee also must approve other non-audit services
provided to the registrant and those non-audit services provided to
the registrant's affiliated service providers that relate directly
to the operations and the financial reporting of the registrant.
Certain of these non-audit services that the Committee believes are
a) consistent with the SEC's auditor independence rules and b)
routine and recurring services that will not impair the independence
of the independent accountants may be approved by the Committee
without consideration on a specific case-by-case basis ("general
pre-approval"). However, such services will only be deemed
pre-approved provided that any individual project does not exceed
$5,000 attributable to the registrant or $50,000 for all of the
registrants the Committee oversees. Any proposed services exceeding
the pre-approved cost levels will require specific pre-approval by
the Committee, as will any other services not subject to general
pre-approval (e.g., unanticipated but permissible services). The
Committee is informed of each service approved subject to general
pre-approval at the next regularly scheduled in-person board
meeting.
(e)(2) None of the services described in each of Items 4(b) through
(d) were approved by the audit committee pursuant to paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not Applicable
(g) Affiliates' Aggregate Non-Audit Fees:
--------------------------------------------------------------------
Entity Name Current Fiscal Year Previous Fiscal
End Year End
--------------------------------------------------------------------
Global Financial Services
Master LLC $284,500 $3,051,837
--------------------------------------------------------------------
BlackRock Global Financial
Services Fund, Inc. $291,642 $3,056,250
--------------------------------------------------------------------
(h) The registrant's audit committee has considered and determined
that the provision of non-audit services that were rendered to the
registrant's investment adviser (not including any non-affiliated
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by the registrant's investment
adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services
to the registrant that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining the principal accountant's independence.
Regulation S-X Rule 2-01(c)(7)(ii) - $284,500, 0%
Item 5 - Audit Committee of Listed Registrants - Not Applicable
Item 6 - Schedule of Investments - The registrant's Schedule of Investments
is included as part of the Report to Stockholders filed under Item 1
of this form.
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies - 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 set forth the
qualifications of the proposed nominee to the registrant's
Secretary. There have been no material changes to these procedures.
Item 11 - Controls and Procedures
11(a) - The registrant's principal executive and principal financial
officers or persons performing similar functions have concluded that
the registrant's disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940, as amended
(the "1940 Act")) are effective as of a date within 90 days of the
filing of this report based on the evaluation of these controls and
procedures required by Rule 30a-3(b) under the 1940 Act and Rule
15d-15(b) under the Securities and Exchange Act of 1934, as amended.
11(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act)
that occurred during the second fiscal quarter of the period covered
by this report that have materially affected, or are reasonably
likely to materially affect, the registrant's internal control over
financial reporting.
Item 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - See Item 2
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(b) - Certifications - Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
BlackRock Global Financial Services Fund, Inc. and Global Financial Services
Master LLC
By: /s/ Donald C. Burke
-----------------------------------
Donald C. Burke,
Chief Executive Officer (principal executive officer) of
BlackRock Global Financial Services Fund, Inc. and
Global Financial Services Master LLC
Date: November 20, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Donald C. Burke
-----------------------------------
Donald C. Burke,
Chief Executive Officer (principal executive officer) of
BlackRock Global Financial Services Fund, Inc. and
Global Financial Services Master LLC
Date: November 20, 2007
By: /s/ Neal J. Andrews
-----------------------------------
Neal J. Andrews,
Chief Financial Officer (principal financial officer) of
BlackRock Global Financial Services Fund, Inc. and
Global Financial Services Master LLC
Date: November 20, 2007