N-CSRS 1 d906080dncsrs.htm BLACKROCK HEALTH SCIENCES TRUST BlackRock Health Sciences Trust

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:  811-21702

Name of Fund:    BlackRock Health Sciences Trust (BME)

Fund Address:    100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Health Sciences Trust, 55 East 52nd Street, New York, NY 10055

Registrant’s telephone number, including area code: (800) 882-0052, Option 4

Date of fiscal year end: 12/31/2020

Date of reporting period: 06/30/2020


Item 1 – Report to Stockholders

 


 

LOGO   JUNE 30, 2020

 

  

2020 Semi-Annual Report

(Unaudited)

 

BlackRock Energy and Resources Trust (BGR)

BlackRock Enhanced Capital and Income Fund, Inc. (CII)

BlackRock Enhanced Equity Dividend Trust (BDJ)

BlackRock Enhanced Global Dividend Trust (BOE)

BlackRock Enhanced International Dividend Trust (BGY)

BlackRock Health Sciences Trust (BME)

BlackRock Health Sciences Trust II (BMEZ)

BlackRock Resources & Commodities Strategy Trust (BCX)

BlackRock Science and Technology Trust (BST)

BlackRock Science and Technology Trust II (BSTZ)

BlackRock Utilities, Infrastructure & Power Opportunities Trust (BUI)

 

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of each Trust’s shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from BlackRock or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.

You may elect to receive all future reports in paper free of charge. If you hold accounts directly with BlackRock, you can call Computershare at (800) 699-1236 to request that you continue receiving paper copies of your shareholder reports. If you hold accounts through a financial intermediary, you can follow the instructions included with this disclosure, if applicable, or contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. Please note that not all financial intermediaries may offer this service. Your election to receive reports in paper will apply to all funds advised by BlackRock Advisors, LLC or its affiliates, or all funds held with your financial intermediary, as applicable.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive electronic delivery of shareholder reports and other communications by contacting your financial intermediary, if you hold accounts through a financial intermediary. Please note that not all financial intermediaries may offer this service.

 

Not FDIC Insured • May Lose Value • No Bank Guarantee


Supplemental Information  (unaudited)

 

Section 19(a) Notices

BlackRock Energy and Resources Trust’s (BGR), BlackRock Enhanced Capital and Income Fund, Inc.’s (CII), BlackRock Enhanced Equity Dividend Trust’s (BDJ), BlackRock Enhanced Global Dividend Trust’s (BOE), BlackRock Enhanced International Dividend Trust’s (BGY), BlackRock Health Sciences Trust’s (BME), BlackRock Health Sciences Trust II’s (BMEZ), BlackRock Resources & Commodities Strategy Trust’s (BCX), BlackRock Science and Technology Trust’s (BST), BlackRock Science and Technology Trust II’s (BSTZ) and BlackRock Utilities, Infrastructure & Power Opportunities Trust’s (BUI) (each, a “Trust” and collectively, the “Trusts”), amounts and sources of distributions reported are estimates and are being provided to you pursuant to regulatory requirements and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Trust’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. Each Trust will provide a Form 1099-DIV each calendar year that will tell you how to report these distributions for U.S. federal income tax purposes.

June 30, 2020

 

    Total Fiscal Year to Date
Cumulative Distributions by Character
    Percentage of Fiscal Year to Date
Cumulative Distributions by Character
 
Ticker  

Net

Investment

Income

   

Net Realized

Capital Gains

Short-Term

   

Net Realized

Capital Gains

Long-Term

    Return of
Capital (a)
   

Total Per

Common
Share

   

Net

Investment

Income

   

Net Realized
Capital Gains

Short-Term

   

Net Realized

Capital Gains

Long-Term

    Return of
Capital
    Total Per
Common
Share
 

BGR

  $ 0.180872     $     $     $ 0.204328     $ 0.385200       47     0     0     53     100

CII

    0.090988             0.434012             0.525000       17       0       83       0       100  

BDJ

    0.212571             0.087429             0.300000       71       0       29       0       100  

BOE

    0.152891                   0.225109       0.378000       40       0       0       60       100  

BGY

    0.071618                   0.131182       0.202800       35       0       0       65       100  

BME

    0.022858                   1.177142       1.200000       2       0       0       98       100  

BMEZ

                      0.300000       0.300000       0       0       0       100       100  

BCX

    0.103460                   0.182940       0.286400       36       0       0       64       100  

BST

                      0.993000       0.993000       0       0       0       100       100  

BSTZ

                      0.600000       0.600000       0       0       0       100       100  
BUI     0.173723                   0.552277       0.726000       24       0       0       76       100  

 

  (a) 

Certain Trusts estimate that they have distributed more than its net investment income and net realized capital gains; therefore, a portion of the distribution may be a return of capital. A return of capital may occur, for example, when some or all of the shareholder’s investment in a Trust is returned to the shareholder. A return of capital does not necessarily reflect a Trust’s investment performance and should not be confused with “yield” or “income.” When distributions exceed total return performance, the difference will reduce the Trust’s net asset value per share.

 

Section 19(a) notices for the Trusts, as applicable, are available on the BlackRock website at blackrock.com.

Section 19(b) Disclosure

The Trusts, acting pursuant to a U.S. Securities and Exchange Commission (“SEC”) exemptive order and with the approval of each Trust’s Board of Trustees/Directors (the “Board”), each have adopted a managed distribution plan, consistent with its investment objectives and policies to support a level distribution of income, capital gains and/or return of capital (the “Plan”). In accordance with the Plans, the Trusts currently distribute the following fixed amounts per share on a monthly basis as of June 30, 2020:

 

Exchange Symbol   Amount Per
Common Share
 

BGR

  $ 0.0470  

CII

    0.0875  

BDJ

    0.0500  

BOE

    0.0630  

BGY

    0.0338  

BME

    0.2000  

BMEZ

    0.1000  

BCX

    0.0400  

BST

    0.1655  

BSTZ

    0.1000  

BUI

    0.1210  

The fixed amounts distributed per share are subject to change at the discretion of each Trust’s Board. Under its Plan, each Trust will distribute all available investment income to its shareholders required by the Internal Revenue Code of 1986, as amended (the “Code”). If sufficient income (inclusive of net investment income and short-term capital gains) is not earned on a monthly basis, the Trusts will distribute long-term capital gains and/or return of capital to shareholders in order to maintain a level distribution. Each monthly distribution to shareholders is expected to be at the fixed amount established by the Board; however, each Trust may make additional distributions from time to time, including additional capital gain distributions at the end of the taxable year, if required to meet requirements imposed by the Code and/or the Investment Company Act of 1940, as amended (the “1940 Act”).

Shareholders should not draw any conclusions about each Trust’s investment performance from the amount of these distributions or from the terms of the Plan. Each Trust’s total return performance is presented in its financial highlights table.

The Board may amend, suspend or terminate a Trust’s Plan at any time without prior notice to the Trust’s shareholders if it deems such actions to be in the best interests of the Trust or its shareholders. The suspension or termination of the Plan could have the effect of creating a trading discount (if the Trust’s stock is trading at or above net asset value) or widening an existing trading discount. The Trusts are subject to risks that could have an adverse impact on their ability to maintain level distributions. Examples of potential risks include, but are not limited to, economic downturns impacting the markets, changes in interest rates, decreased market volatility, companies suspending or decreasing corporate dividend distributions and changes in the Code. Please refer to BME, BST and BUI’s prospectuses for a more complete description of each Trust’s risks.

 

 

2    2020 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS


The Markets in Review

Dear Shareholder,

The last 12 months have been a time of sudden change in global financial markets, as a long period of growth and positive returns was interrupted in early 2020 by the emergence and spread of the coronavirus. For the first part of the reporting period, U.S. equities and bonds both delivered impressive returns, despite fears and doubts about the economy that were ultimately laid to rest with unprecedented monetary stimulus and a sluggish yet resolute performance from the U.S. economy. But as the threat from the coronavirus became more apparent throughout February and March 2020, leading countries around the world took economically disruptive countermeasures, causing equity prices to fall sharply. While markets have since recovered some of these losses as countries around the world begin reopening, there is still significant uncertainty surrounding the course of the pandemic, and an uptick in U.S. infection rates caused concern late in the reporting period.

Returns for most securities were robust for the first part of the reporting period, as investors began to realize that the U.S. economy was maintaining the modest yet steady growth that had characterized this economic cycle. However, once stay-at-home orders and closures of non-essential businesses became widespread, many workers were laid off and unemployment claims spiked. With large portions of the global economy on hold, all types of international equities ended the 12-month reporting period with negative performance, while in the United States large-capitalization stocks, which investors saw as more resilient than smaller companies, delivered solid returns.

The performance of different types of fixed-income securities diverged substantially due to a reduced investor appetite for risk. Treasuries benefited from the risk-off environment, and posted healthy returns, as the 10-year U.S. Treasury yield (which is inversely related to bond prices) fell to an all-time low. Investment-grade corporate bonds also delivered a solid return, while high-yield corporate returns were flat due to credit concerns.

The U.S. Federal Reserve (the “Fed”) reduced interest rates three times in 2019, to support slowing economic growth. After the coronavirus outbreak, the Fed instituted two emergency rate cuts, pushing short-term interest rates close to zero. To stabilize credit markets, the Fed also announced a new bond-buying program, as did several other central banks around the world, including the European Central Bank and the Bank of Japan.

Looking ahead, while coronavirus-related disruption has clearly hindered worldwide economic growth, we believe that the global expansion is likely to continue once the impact of the outbreak subsides. Several risks remain, however, including a potential resurgence of the virus amid loosened restrictions, policy fatigue among governments already deep into deficit spending, and structural damage to the financial system from lengthy economic interruptions.

Overall, we favor a moderately positive stance toward risk, and in particular toward credit given the extraordinary central bank measures taken in recent months. This support extends beyond investment-grade corporates and into high-yield, leading to attractive opportunities throughout the credit market. We believe that both U.S. Treasuries and sustainable investments can help provide portfolio resilience, and the disruption created by the coronavirus appears to be accelerating the shift toward sustainable investments. We remain neutral on equities overall while favoring European stocks, which are poised for a cyclical upside as re-openings continue.

In this environment, our view is that investors need to think globally, extend their scope across a broad array of asset classes, and be nimble as market conditions change. We encourage you to talk with your financial advisor and visit blackrock.com for further insight about investing in today’s markets.

Sincerely,

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

Total Returns as of June 30, 2020
     6-month   12-month

U.S. large cap equities
(S&P 500® Index)

  (3.08)%   7.51%

U.S. small cap equities
(Russell 2000® Index)

  (12.98)   (6.63)

International equities
(MSCI Europe, Australasia, Far East Index)

  (11.34)   (5.13)

Emerging market equities
(MSCI Emerging Markets Index)

  (9.78)   (3.39)

3-month Treasury bills
(ICE BofA 3-Month U.S. Treasury Bill Index)

  0.60   1.63

U.S. Treasury securities
(ICE BofA 10-Year U.S. Treasury Index)

  12.68   14.21

U.S. investment grade bonds
(Bloomberg Barclays U.S. Aggregate Bond Index)

  6.14   8.74

Tax-exempt municipal bonds
(S&P Municipal Bond Index)

  1.97   4.23

U.S. high yield bonds
(Bloomberg Barclays U.S. Corporate High Yield 2% Issuer Capped Index)

  (3.83)   0.00
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.
 

 

 

THIS PAGE IS NOT PART OF YOUR FUND REPORT      3  


Table of Contents

 

      Page  

Section 19(a) Notices

     2  

Section 19(b) Disclosure

     2  

The Markets in Review

     3  

Semi-Annual Report:

  

Option Over-Writing Strategy

     5  

Trust Information

     6  

Derivative Financial Instruments

     28  

Financial Statements:

  

Schedules of Investments

     29  

Statements of Assets and Liabilities

     110  

Statements of Operations

     112  

Statements of Changes in Net Assets

     114  

Statements of Cash Flows

     120  

Financial Highlights

     122  

Notes to Financial Statements

     133  

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements

     144  

Trustee and Officer Information

     152  

Additional Information

     153  

Glossary of Terms Used in this Report

     155  

 

 

4        


Option Over-Writing Strategy

 

Overview

In general, the goal of each of the Trusts is to provide total return through a combination of current income and realized and unrealized gains (capital appreciation). The Trusts seek to pursue these goals primarily by investing in a portfolio of equity securities and also by employing a strategy of writing (selling) call and put options in an effort to generate current gains from option premiums and to enhance each Trust’s risk-adjusted return. Each Trust’s objectives cannot be achieved in all market conditions.

Each Trust primarily writes single stock covered call options, and may also from time to time write single stock put options. When writing (selling) a covered call option, a Trust holds an underlying equity security and enters into an option transaction which allows the counterparty to purchase the equity security at an agreed-upon price (“strike price”) within an agreed-upon time period. The Trust receives cash premiums from the counterparties upon writing (selling) the option, which along with net investment income and net realized gains, if any, are generally available to support current or future distributions paid by the Trust. During the option term, the counterparty may elect to exercise the option if the market value of the equity security rises above the strike price, and the Trust is obligated to sell the equity security to the counterparty at the strike price, realizing a gain or loss. Premiums received increase gains or reduce losses realized on the sale of the equity security. If the option remains unexercised upon its expiration, the Trust realizes gains equal to the premiums received. Alternatively, an option may be closed out by an offsetting purchase or sale of an option prior to expiration. The Trust realizes a capital gain from a closing purchase or sale transaction if the premium paid is less than the premium received from writing the option. The Trust realizes a capital loss from a closing purchase or sale transaction if the premium received is less than the premium paid to purchase the option.

Writing covered call options entails certain risks, which include, but are not limited to, the following: an increase in the value of the underlying equity security above the strike price can result in the exercise of a written option (sale by a Trust to the counterparty) when the Trust might not otherwise have sold the security; exercise of the option by the counterparty may result in a sale below the current market value and a gain or loss being realized by the Trust; and limiting the potential appreciation that could be realized on the underlying equity security to the extent of the strike price of the option. The premium that a Trust receives from writing a covered call option may not be sufficient to offset the potential appreciation on the underlying equity security above the strike price of the option that could have otherwise been realized by the Trust. As such, an option over-writing strategy may outperform the general equity market in flat or falling markets but underperform in rising markets.

Option Over-Writing Strategy Illustration

To illustrate these concepts, assume the following: (1) a common stock purchased at and currently trading at $37.15 per share; (2) a three-month call option is written by a Trust with a strike price of $40 (i.e., 7.7% higher than the current market price); and (3) the Trust receives $2.45, or 6.6% of the common stock’s value, as a premium. If the stock price remains unchanged, the option expires and there would be a 6.6% return for the three-month period. If the stock were to decline in price by 6.6% (i.e., decline to $34.70 per share), the option strategy would “break-even” from an economic perspective resulting in neither a gain nor a loss. If the stock were to climb to a price of $40 or above, the option would be exercised and the stock would return 7.7% coupled with the option premium received of 6.6% for a total return of 14.3%. Under this scenario, the Trust loses the benefit of any appreciation of the stock above $40, and thus is limited to a 14.3% total return. The premium from writing the call option serves to offset some of the unrealized loss on the stock in the event that the price of the stock declines, but if the stock were to decline more than 6.6% under this scenario, the Trust’s downside protection is eliminated and the stock could eventually become worthless.

Each Trust intends to write covered call and other options to varying degrees depending upon market conditions. Please refer to each Trust’s Schedule of Investments and the Notes to Financial Statements for details of written options.

 

 

THE BENEFITS AND RISKS OF OPTION OVER-WRITING      5  


Trust Information  as of June 30, 2020    BlackRock Energy and Resources Trust (BGR)

 

Investment Objective

BlackRock Energy and Resources Trust’s (BGR) (the “Trust”) investment objective is to provide total return through a combination of current income, current gains and long-term capital appreciation. The Trust seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its total assets in equity securities of energy and natural resources companies and equity derivatives with exposure to the energy and natural resources industry. The Trust may invest directly in such securities or synthetically through the use of derivatives. The Trust seeks to pursue this goal primarily by investing in a portfolio of equity securities and also by employing a strategy of writing (selling) call and put options.

No assurance can be given that the Trust’s investment objective will be achieved.

Trust Information

 

Symbol on New York Stock Exchange (“NYSE”)

  BGR

Initial Offering Date

  December 29, 2004

Current Distribution Rate on Closing Market Price as of June 30, 2020 ($7.23)(a)

  7.80%

Current Monthly Distribution per Common Share(b)

  $0.0470

Current Annualized Distribution per Common Share(b)

  $0.5640

 

  (a) 

Current distribution rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a return of capital. Past performance does not guarantee future results.

 
  (b) 

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a return of capital or net realized gain.

 

Performance and Portfolio Management Commentary

Returns for the six months ended June 30, 2020 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BGR(a)(b)

    (36.19 )%       (32.77 )% 

MSCI World Energy Call Overwrite Index(c)

    N/A        (38.19

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b) 

The Trust’s discount to NAV widened during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c) 

MSCI World Energy Call Overwrite Index incorporates an option overlay component on the MSCI World Energy Index with a 33% overwrite level.

 

N/A — Not applicable as the index does not have a market price.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s relative performance based on the index cited above:

What factors influenced performance?

Energy prices fell sharply in the first half of 2020, as the demand outlook was pressured by concerns about the economic impact of the coronavirus pandemic. In combination with the stock market downturn that occurred in February and March, this development led to poor returns for energy-related equities.

Consistent with this environment, the Trust produced a negative absolute return in the six-month period. While most of its holdings declined in value, its positions in more “defensive” energy companies — such as Total SA and the oil pipeline company Williams Cos. — outperformed. The Trust also benefited from not owning Occidental Petroleum Corp. and being significantly underweight Schlumberger NV, as both companies experienced sharp share price declines.

The oil refiner Marathon Petroleum Corp., which was hurt by the prospect of rising gasoline inventories, was the largest detractor from performance. The exploration and production (“E&P”) companies Kosmos Energy Ltd. and Noble Energy, Inc. also weighed on results. Shares of Kosmos slid after the company announced plans to reduce 2020 capital spending and suspend its dividend to preserve cash, while Noble lost ground due to its higher sensitivity to energy prices. An underweight in Enbridge, Inc., which outperformed thanks to progress on a proposed pipeline in the United States, was an additional detractor of note.

The Trust utilized an options overlay strategy in which calls are written on a portion of the portfolio’s holdings. The Trust’s option overlay strategy contributed positively to relative performance for the six-month period.

Early in the period, the Trust held a slightly elevated cash balance. The Trust’s cash balance had no material impact to performance.

Describe recent portfolio activity

The investment adviser adopted a more defensive posture in early March given the risks to oil demand stemming from the virus. This was achieved by remaining focused on high-quality producers that the investment adviser saw as having asset bases and balance sheets strong enough to weather the near-term storm and emerge well-positioned for an eventual upturn. Later in the period, the Trust added to its positions in non-U.S. oil producers.

 

 

6    2020 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS


Trust Information  as of June 30, 2020 (continued)    BlackRock Energy and Resources Trust (BGR)

 

Describe portfolio positioning at period end.

The integrated energy subsector represented the Trust’s largest allocation, followed by the E&P, distribution, refining & marketing, and oil services industries, respectively.

As of June 30, 2020, the Trust had in place an option overwriting program in place whereby 34% of the underlying equities were overwritten with call options. These call options were typically written at levels above prevailing market prices (estimated to be 6.1% out of the money) with an average time until expiration of 45 days.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

Market Price and Net Asset Value Per Share Summary

 

     06/30/20     12/31/19      Change      High      Low  

Market Price

  $ 7.23     $ 11.88        (39.14 )%     $ 12.66      $ 4.17  

Net Asset Value

    8.06       12.57        (35.88      12.82        5.15  

Market Price and Net Asset Value History For the Past Five Years

 

LOGO

Overview of the Trust’s Total Investments *

 

TEN LARGEST HOLDINGS

 

Security   6/30/20  

Chevron Corp.

    14

Royal Dutch Shell PLC — ADR

    10  

TOTAL SA

    9  

BP PLC

    8  

ConocoPhillips

    5  

TC Energy Corp

    4  

Kinder Morgan, Inc.

    4  

Williams Cos., Inc.

    4  

Suncor Energy, Inc.

    4  

Pioneer Natural Resources Co.

    3  

 

  *

Excludes option positions and money market funds.

 

INDUSTRY ALLOCATION

 

Industry   6/30/20     12/31/19  

Oil, Gas & Consumable Fuels

    96     97

Energy Equipment & Services

    4       3  

 

 

For Trust compliance purposes, the Trust’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 the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

 
 

 

 

TRUST INFORMATION      7  


Trust Information  as of June 30, 2020    BlackRock Enhanced Capital and Income Fund (CII)

 

Investment Objective

BlackRock Enhanced Capital and Income Fund, Inc.’s (CII) (the “Trust”) investment objective is to provide investors with a combination of current income and capital appreciation. The Trust seeks to achieve its investment objective by investing in a portfolio of equity securities of U.S. and foreign issuers. The Trust may invest directly in such securities or synthetically through the use of derivatives. The Trust also seeks to achieve its investment objective by employing a strategy of writing (selling) call and put options.

No assurance can be given that the Trust’s investment objective will be achieved.

Trust Information

 

Symbol on NYSE

  CII

Initial Offering Date

  April 30, 2004

Current Distribution Rate on Closing Market Price as of June 30, 2020 ($14.47)(a)

  7.26%

Current Monthly Distribution per Common Share(b)

  $0.0875

Current Annualized Distribution per Common Share(b)

  $1.0500

 

  (a) 

Current distribution rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a return of capital. Past performance does not guarantee future results.

 
  (b) 

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a return of capital or net realized gain.

 

Performance and Portfolio Management Commentary

Returns for the six months ended June 30, 2020 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

CII(a)(b)

    (13.08 )%       (7.29 )% 

MSCI USA Call Overwrite Index(c)

    N/A        (10.36

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b) 

The Trust’s discount to NAV widened during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c) 

MSCI USA Call Overwrite Index incorporates an option overlay component on the MSCI USA Index with a 55% overwrite level.

 

N/A — Not applicable as the index does not have a market price.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s relative performance based on the index cited above:

What factors influenced performance?

In the equity allocation of the Trust, the largest contributor to relative performance was stock selection within the industrials sector. Most notably, an out-of-benchmark position in specialty contractor Quanta Services Inc. and a lack of exposure to aerospace manufacturer Boeing Co. provided strong relative returns. Underweight allocations to real estate also contributed to performance. Lastly, the Trust benefited from stock selection within the communication services sector, particularly given its overweight positions in tech giants Facebook Inc. and Alphabet Inc.

Conversely, the largest detractor from relative performance in the equity allocation of the Trust was stock selection in the information technology (“IT”) sector. Most notably, overweight positions in software developer CDK Global Inc. and IT consulting company Cognizant Technology Solutions Corp. weighed on results. Stock selection in financials also detracted, particularly due to overweight positions in U.S. Bancorp and Bank of America Corp. Also detracting from relative performance was stock selection in the energy sector, most notably through an overweight position in Marathon Oil Corp.

The Trust utilized an options overlay strategy in which calls are written on a portion of the portfolio’s holdings. The Trust’s option overlay strategy contributed positively to relative performance during the period.

Describe recent portfolio activity.

The Trust significantly increased its exposure to the IT sector. Holdings within consumer discretionary and real estate were also increased. Conversely, the Trust significantly reduced its exposure to the financials sector. The Trust also lowered its allocation to energy and consumer staples.

Describe portfolio positioning at period end.

In the equity portion of the portfolio, the Trust’s largest allocations relative to the benchmark were in the consumer discretionary, communication services, and industrials sectors. Conversely, the Trust’s largest relative underweights were in the real estate, IT, and utilities sectors.

As of June 30, 2020, the Trust had in place an option overwriting program whereby 52% of the underlying equities were overwritten with call options on individual stocks. These call options were typically written at prices above the prevailing market prices (estimated to be 5.0% out of the money) with an average time until expiration of 45 days.

 

 

8    2020 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS


Trust Information  as of June 30, 2020 (continued)    BlackRock Enhanced Capital and Income Fund (CII)

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

Market Price and Net Asset Value Per Share Summary

 

     06/30/20     12/31/19      Change      High      Low  

Market Price

  $ 14.47     $ 17.25        (16.12 )%     $ 17.86      $ 9.56  

Net Asset Value

    16.07       17.96        (10.52      18.37        12.31  

Market Price and Net Asset Value History For the Past Five Years

 

 

LOGO

Overview of the Trust’s Total Investments *

 

TEN LARGEST HOLDINGS

 

Security   6/30/20  

Apple, Inc.

    7

Microsoft Corp.

    7  

Alphabet, Inc.

    5  

Amazon.com, Inc.

    5  

Facebook, Inc.

    4  

Visa, Inc.

    3  

UnitedHealth Group, Inc.

    3  

Comcast Corp.

    3  

Cisco Systems, Inc.

    2  

Berkshire Hathaway, Inc.

    2  

 

  *

Excludes option positions and money market funds.

 

SECTOR ALLOCATION

 

Sector   6/30/20     12/31/19  

Information Technology

    26     21

Consumer Discretionary

    16       12  

Health Care

    14       14  

Communication Services

    13       13  

Industrials

    9       9  

Financials

    9       13  

Consumer Staples

    5       7  

Energy

    3       6  

Materials

    3       3  

Utilities

    1       2  

Real Estate

    1        

 

 

For Trust compliance purposes, the Trust’s sector classifications refer to any one or more of the sector sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

 
 

 

 

TRUST INFORMATION      9  


Trust Information  as of June 30, 2020    BlackRock Enhanced Equity Dividend Trust (BDJ)

 

Investment Objective

BlackRock Enhanced Equity Dividend Trust’s (BDJ) (the “Trust”) primary investment objective is to provide current income and current gains, with a secondary investment objective of long-term capital appreciation. The Trust seeks to achieve its investment objectives by investing in common stocks that pay dividends and have the potential for capital appreciation and by employing a strategy of writing (selling) call and put options. The Trust invests, under normal market conditions, at least 80% of its total assets in dividend paying equities. The Trust may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Trust’s investment objectives will be achieved.

Trust Information

 

Symbol on NYSE

  BDJ

Initial Offering Date

  August 31, 2005

Current Distribution Rate on Closing Market Price as of June 30, 2020 ($7.34)(a)

  8.17%

Current Monthly Distribution per Common Share(b)

  $0.0500

Current Annualized Distribution per Common Share(b)

  $0.6000

 

  (a) 

Current distribution rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a return of capital. Past performance does not guarantee future results.

 
  (b) 

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a return of capital or net realized gain.

 

Performance and Portfolio Management Commentary

Returns for the six months ended June 30, 2020 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BDJ(a)(b)

    (23.05 )%       (15.70 )% 

MSCI USA Value Call Overwrite Index(c)

    N/A        (22.21

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b) 

The Trust’s discount to NAV widened during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c) 

MSCI USA Value Call Overwrite Index incorporates an option overlay component on the MSCI USA Value Index with a 55% overwrite level.

 

N/A — Not applicable as the index does not have a market price.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s relative performance based on the index cited above:

What factors influenced performance?

The most significant contributors to relative performance during the six-month period were stock selection and allocation decisions within the consumer discretionary sector. In particular, stock selection in the multiline retail industry proved beneficial. In addition, an underweight to the hotels, restaurants & leisure industry boosted relative return in the sector. Within information technology (“IT”), an overweight to the software industry added to performance. Other notable contributors included an overweight to health care, stock selection in the communication services sector, and an underweight to real estate.

The largest detractor from relative performance was an overweight to the financials sector. Notably, overweight exposure to banks constrained performance, as did selection among capital markets firms. Additionally, underweights to electric utilities and multi-utilities weighed on relative return. Other modest detractors included an underweight to consumer staples as well as stock selection within industrials.

The Trust utilized an options overlay strategy, principally written call options on individual stocks, in order to seek enhanced income returns while continuing to participate in the performance of the underlying equities. The Trust’s option writing strategy contributed positively to performance during the six-month period.

Describe recent portfolio activity.

During the period, a combination of portfolio trading activity and market price changes resulted in increased exposure to the utilities, IT and consumer staples sectors. Conversely, the Trust’s exposures to financials, energy and industrials were reduced.

Describe portfolio positioning at period end.

The Trust’s largest allocations on an absolute basis were in the financials, health care and IT sectors. Relative to the benchmark, the Trust’s largest overweight positions were in the financials, health care and energy sectors. Conversely, the Trust’s largest relative underweights were in the real estate, industrials and consumer staples sectors.

 

 

10    2020 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS


Trust Information  as of June 30, 2020 (continued)    BlackRock Enhanced Equity Dividend Trust (BDJ)

 

As of June 30, 2020, the Trust had in place an option overwriting program whereby 52% of the underlying equities were overwritten with call options on individual stocks. These call options were typically written at prices above the prevailing market prices (estimated to be 5.6% out of the money) with an average time until expiration of 47 days.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

Market Price and Net Asset Value Per Share Summary

 

     06/30/20     12/31/19      Change      High      Low  

Market Price

  $ 7.34     $ 9.92        (26.01 )%     $ 9.97      $ 4.65  

Net Asset Value

    8.13       10.03        (18.94      10.13        6.22  

Market Price and Net Asset Value History For the Past Five Years

 

 

LOGO

Overview of the Trust’s Total Investments *

 

TEN LARGEST HOLDINGS

 

Security   6/30/20  

Verizon Communications, Inc.

    4

Bank of America Corp.

    3  

Citigroup, Inc.

    3  

Anthem, Inc.

    3  

Medtronic PLC

    2  

Cognizant Technology Solutions Corp.

    2  

Altria Group, Inc.

    2  

Morgan Stanley

    2  

Unilever NV — NY Shares

    2  

Koninklijke Philips NV

    2  

 

  *

Excludes option positions and money market funds.

 
   

SECTOR ALLOCATION

 

Sector   6/30/20     12/31/19  

Financials

    27     29

Health Care

    19       19  

Information Technology

    10       9  

Energy

    8       10  

Consumer Staples

    8       7  

Communication Services

    8       8  

Industrials

    7       8  

Utilities

    6       3  

Consumer Discretionary

    5       6  

Materials

    2       1  

 

 

For Trust compliance purposes, the Trust’s sector classifications refer to any one or more of the sector sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

 
 

 

 

TRUST INFORMATION      11  


Trust Information  as of June 30, 2020    BlackRock Enhanced Global Dividend Trust (BOE)

 

Investment Objective

BlackRock Enhanced Global Dividend Trust’s (BOE) (the “Trust”) primary investment objective is to provide current income and current gains, with a secondary investment objective of long-term capital appreciation. The Trust seeks to achieve its investment objectives by investing primarily in equity securities issued by companies located in countries throughout the world and by employing a strategy of writing (selling) call and put options. Under normal circumstances, the Trust invests at least 80% of its net assets in dividend-paying equity securities and at least 40% of its assets outside of the U.S. (unless market conditions are not deemed favorable by Trust management, in which case the Trust would invest at least 30% of its assets outside of the U.S.). The Trust may invest in securities of companies of any market capitalization, but intends to invest primarily in securities of large capitalization companies. The Trust may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Trust’s investment objectives will be achieved.

Trust Information

 

Symbol on NYSE

  BOE

Initial Offering Date

  May 31, 2005

Current Distribution Rate on Closing Market Price as of June 30, 2020 ($9.42)(a)

  8.03%

Current Monthly Distribution per Common Share(b)

  $0.0630

Current Annualized Distribution per Common Share(b)

  $0.7560

 

  (a) 

Current distribution rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a return of capital. Past performance does not guarantee future results.

 
  (b) 

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a return of capital or net realized gain.

 

Performance and Portfolio Management Commentary

Returns for the six months ended June 30, 2020 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BOE(a)(b)

    (10.83 )%       (9.73 )% 

MSCI ACWI Call Overwrite Index(c)

    N/A        (12.58

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b) 

The Trust’s discount to NAV widened during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c) 

MSCI ACWI Call Overwrite Index incorporates an option overlay component on the MSCI ACWI Index with a 45% overwrite level.

 

N/A — Not applicable as the index does not have a market price.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s relative performance based on the index cited above:

What factors influenced performance?

The Trust’s lack of exposure to the energy sector, particularly the oil, gas and consumable fuels industry, contributed to returns during the six-month period. Stock selection within the industrials sector, most notably within machinery, also contributed to relative performance. In addition, an underweight to the real estate sector added to relative return. At the security level, the Trust’s position in the U.S. biotechnology company AbbVie, Inc. was the top individual contributor to performance. AbbVie’s shares rose after the company reported strong financial results, with sales for a number of its products exceeding market expectations. Holdings in the U.S. pharmaceutical firm Johnson & Johnson represented another top contributor as the company’s shares were boosted by a stronger-than-expected profit report. The Trust’s position in the Finnish engineering company Kone OYJ also was additive.

Stock selection within and an underweight to information technology (“IT”), particularly a lack of holdings within software, represented the largest detractor from performance. Stock selection within and an underweight to the consumer discretionary sector, especially within the internet & direct marketing retail industry, also detracted, as did stock selection within the communication services sector. At the security level, the Trust’s position in U.S.-based Darden Restaurants, Inc. was the principal detractor as social distancing measures impacted the company’s earnings. Holdings in the U.S. financial firm M&T Bank Corp. also weighed on returns as the financials sector, and banks in particular, underperformed during the period. The Trust’s position in U.S. toymaker Hasbro, Inc. also traded lower due to potential disruptions in the company’s supply chain and a disappointing earnings projection.

The Trust made use of options, principally written call options on individual stocks, in order to seek enhanced income returns while continuing to participate in the performance of the underlying equities. The Trust’s options writing strategy contributed positively to performance for the six-month period..

Describe recent portfolio activity.

During the period, the Trust added exposure to the consumer staples sector, mainly within the beverages and household products industries. Exposure to the industrials sector also was added, especially within the machinery industry. Conversely, exposure to financials was reduced, especially among banks. The investment adviser also trimmed exposure to the materials sector, mostly within containers and packaging.

 

 

12    2020 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS


Trust Information  as of June 30, 2020 (continued)    BlackRock Enhanced Global Dividend Trust (BOE)

 

Describe portfolio positioning at period end.

At the end of the period, the Trust’s largest sector exposures were in consumer staples and health care, driven by the pharmaceuticals and beverages industries. The largest underweights were to the IT, financials and consumer discretionary sectors. The Trust had no exposure to real estate, utilities or energy at period end. Regionally, the majority of the portfolio was listed in the United States or Europe, with significant exposure in the United Kingdom and Switzerland.

As of June 30, 2020, the Trust had in place an option overwriting program whereby 43% of the underlying equities were overwritten with call options on individual stocks. These call options were typically written at prices above the prevailing market prices (estimated to be 3.9% out of the money) with an average time until expiration of 45 days.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

Market Price and Net Asset Value Per Share Summary

 

     06/30/20     12/31/19      Change      High      Low  

Market Price

  $ 9.42     $ 10.99        (14.29 )%     $ 11.25      $ 7.00  

Net Asset Value

    10.69       12.32        (13.23      12.41        8.34  

Market Price and Net Asset Value History For the Past Five Years

 

 

LOGO

Overview of the Trust’s Total Investments *

 

TEN LARGEST HOLDINGS

 

Security   6/30/20  

Unilever PLC

    4

TELUS Corp.

    3  

Coca-Cola Co.

    3  

Paychex, Inc.

    3  

Sanofi SA

    3  

Novartis AG, Registered Shares

    3  

AbbVie, Inc.

    3  

Lockheed Martin Corp.

    3  

British American Tobacco PLC

    3  

Medtronic PLC

    3  

 

  *

Excludes option positions and money market funds.

 

GEOGRAPHIC ALLOCATION

 

Country   6/30/20     12/31/19  

United States

    52     53

United Kingdom

    16       13  

Switzerland

    7       7  

Canada

    5       7  

France

    4       4  

Netherlands

    4       3  

Australia

    3       3  

Singapore

    2       3  

Denmark

    2       2  

Germany

    2       2  

Finland

    1       1  

Sweden

    1       1  

Taiwan

    1       1  

India

    (a)       

Japan

          (a) 

 

  (a) 

Represents less than 1% of the Trust’s total investments.

 
 

 

 

TRUST INFORMATION      13  


Trust Information  as of June 30, 2020    BlackRock Enhanced International Dividend Trust (BGY)

 

Investment Objective

BlackRock Enhanced International Dividend Trust’s (BGY) (the “Trust”) primary investment objective is to provide current income and current gains, with a secondary objective of long-term capital appreciation. The Trust seeks to achieve its investment objectives by investing primarily in equity securities issued by companies of any market capitalization located in countries throughout the world and by employing a strategy of writing (selling) call and put options. The Trust invests, under normal circumstances, at least 80% of its net assets in dividend-paying equity securities issued by non-U.S. companies of any market capitalization, but intends to invest primarily in securities of large capitalization companies. The Trust may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Trust’s investment objectives will be achieved.

Trust Information

 

Symbol on NYSE

  BGY

Initial Offering Date

  May 30, 2007

Current Distribution Rate on Closing Market Price as of as of June 30, 2020 ($5.14)(a)

  7.89%

Current Monthly Distribution per Common Share(b)

  $0.0338

Current Annualized Distribution per Common Share(b)

  $0.4056

 

  (a) 

Current distribution rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a return of capital. Past performance does not guarantee future results.

 
  (b) 

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a return of capital or net realized gain.

 

Performance and Portfolio Management Commentary

Returns for the six months ended June 30, 2020 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BGY(a)(b)

    (9.25 )%       (5.65 )% 

MSCI ACWI ex USA Call Overwrite Index(c)

    N/A        (17.03

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b) 

The Trust’s discount to NAV widened during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c) 

MSCI ACWI ex USA Call Overwrite Index incorporates an option overlay component on the MSCI ACWI ex USA Index with a 45% overwrite level.

 

N/A — Not applicable as the index does not have a market price.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s relative performance based on the index cited above:

What factors influenced performance?

During the six-month period, the Trust’s lack of exposure to the energy sector, particularly the oil, gas and consumable fuels industry, contributed to returns. In addition, an underweight exposure to the financials sector, as well as an overweight to health care companies, added to relative performance. At the security level, the Trust’s position in Australian medical equipment company Ansell Ltd. was the top individual contributor to returns. Ansell’s shares were strong during the period owing to the increased usage of personal protective equipment, including medical gloves. Holdings in Danish pharmaceutical firm Novo Nordisk A/S and Finnish engineering company Kone OYJ also boosted performance.

Conversely, stock selection within and an underweight to information technology (“IT”), particularly a lack of holdings within software, represented one of the largest detractors from performance. Stock selection in the consumer discretionary and communication services sectors also weighed on returns. At the security level, a lack of exposure to Chinese gaming company Tencent Holdings Ltd. represented the largest individual detractor from relative return. Tencent performed strongly on continued momentum within technology stocks. The Trust’s position in British defense firm BAE Systems PLC also detracted as investors reacted negatively to BAE’s announcement that it would defer its dividend. A lack of exposure to Canadian e-commerce firm Shopify, Inc. also hindered relative performance.

The Trust utilized an options overlay strategy in which calls are written on a portion of the portfolio’s holdings. The Trust’s options overlay strategy contributed positively to relative performance for the six-month period.

Describe recent portfolio activity.

During the period, the Trust added exposure to the consumer staples sector, mainly within the beverages and household products industries. The portfolio also added exposure to the industrials sector, especially within the machinery industry. Exposure to financials, particularly among banks, was reduced. The investment adviser also trimmed its holdings in the materials sector, mainly within containers and packaging.

 

 

14    2020 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS


Trust Information  as of June 30, 2020 (continued)    BlackRock Enhanced International Dividend Trust (BGY)

 

Describe portfolio positioning at period end.

At period end, the Trust’s largest sector exposures were in consumer staples and health care, with an emphasis on the pharmaceuticals and beverages industries, respectively. The largest underweights were to IT, financials and consumer discretionary. The Trust had no exposure to real estate, utilities or energy at the end of the period. From a regional perspective, a majority of portfolio assets was invested in Europe, with significant exposure to the United Kingdom and Switzerland.

As of June 30, 2020, the Trust had in place an option overwriting program whereby 45% of the underlying equities were overwritten with call options on individual stocks. These call options were typically written at prices above the prevailing market prices (estimated to be 3.0% out of the money) with an average time until expiration of 46 days.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

Market Price and Net Asset Value Per Share Summary

 

     06/30/20     12/31/19      Change      High      Low  

Market Price

  $ 5.14     $ 5.89        (12.73 )%     $ 5.96      $ 3.73  

Net Asset Value

    5.87       6.47        (9.27      6.52        4.60  

Market Price and Net Asset Value History For the Past Five Years

 

 

LOGO

Overview of the Trust’s Total Investments *

 

TEN LARGEST HOLDINGS

 

Security   6/30/20  

Unilever PLC

    6

Novartis AG, Registered Shares

    5  

TELUS Corp.

    5  

Sanofi

    5  

Nestle SA, Registered Shares

    5  

British American Tobacco PLC

    4  

Heineken NV

    4  

BAE Systems PLC

    4  

Sonic Healthcare Ltd.

    4  

Koninklijke Philips NV

    4  

 

  *

Excludes option positions and money market funds.

 

GEOGRAPHIC ALLOCATION

 

Country   6/30/20     12/31/19  

United Kingdom

    29     26

Switzerland

    15       13  

Canada

    9       13  

France

    8       7  

Netherlands

    8       7  

Australia

    6       5  

Singapore

    5       5  

Germany

    3       5  

Denmark

    4       3  

United States

    3       9  

Finland

    3       2  

Sweden

    3       2  

Taiwan

    3       2  

China

    1       1  

India(a)

           

 

  (a) 

Represents less than 1% of the Trust’s total investments.

 
 

 

 

TRUST INFORMATION      15  


Trust Information  as of June 30, 2020    BlackRock Health Sciences Trust (BME)

 

Investment Objective

BlackRock Health Sciences Trust’s (BME) (the “Trust”) investment objective is to provide total return through a combination of current income, current gains and long-term capital appreciation. The Trust seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its total assets in equity securities of companies engaged in the health sciences and related industries and equity derivatives with exposure to the health sciences industry. The Trust seeks to pursue this goal primarily by investing in a portfolio of equity securities and by employing a strategy of writing (selling) call and put options.

No assurance can be given that the Trust’s investment objective will be achieved.

Trust Information

 

Symbol on NYSE

  BME

Initial Offering Date

  March 31, 2005

Current Distribution Rate on Closing Market Price as of June 30, 2020 ($40.78)(a)

  5.89%

Current Monthly Distribution per Common Share(b)

  $0.2000

Current Annualized Distribution per Common Share(b)

  $2.4000

 

  (a) 

Current distribution rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a return of capital. Past performance does not guarantee future results.

 
  (b) 

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a return of capital or net realized gain.

 

Performance and Portfolio Management Commentary

Returns for the six months ended June 30, 2020 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BME(a)(b)

    (1.08 )%       2.44

MSCI USA IMI Health Care Call Overwrite Index(c)

    N/A        (4.07

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b) 

The Trust moved from a premium to NAV to a discount during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c) 

MSCI USA IMI Health Care Call Overwrite Index incorporates an option overlay component on the MSCI IMI Health Care Index with a 33% overwrite level.

 

N/A — Not applicable as the index does not have a market price.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s relative performance based on the index cited above:

What factors influenced performance?

Global health care stocks outpaced the broader equity market in the first half of 2020. The sector benefited from its steady earnings and defensive qualities, as well as the outperformance for companies expected to benefit from the development of treatments for the coronavirus.

Strong stock selection, primarily in the pharmaceuticals and biotechnology sub-sectors, was the primary driver of the Trust’s return. An overweight position in the telemedicine company Teladoc Health, Inc., which benefited from increased demand for virtual diagnostics and telemedicine services, was the top contributor to performance. An overweight in the biotechnology company Seattle Genetics, Inc. — which received approval from the Food & Drug Administration for its breast cancer drug — was the second-largest contributor. The company also presented details on its expanding pipeline and investigational therapies.

Weak stock selection in the medical devices and supplies sub-sector detracted from relative performance. Zero weightings in AbbVie, Inc. and Danaher Corp., both of which outpaced the broader category by a wide margin, were the largest detractors. Underweight positions in the pharmaceutical companies Johnson & Johnson and Eli Lilly & Co., which benefited from their efforts at developing a coronavirus vaccine and therapy, respectively, also detracted.

The Trust utilized an options overlay strategy in which calls are written on a portion of the portfolio’s holdings. The Trust’s option overlay strategy contributed positively to relative performance for the six-month period.

Describe recent portfolio activity.

The Trust increased its weighting in the biotechnology industry, and it decreased its allocations to the pharmaceuticals, health care providers & services, and medical devices & supplies subsectors.

Describe portfolio positioning at period end.

As of June 30, 2020, the Trust was overweight in the medical devices & supplies, biotechnology, and health care providers & services sub-sectors, and it was underweight in pharmaceuticals.

 

 

16    2020 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS


Trust Information  as of June 30, 2020 (continued)    BlackRock Health Sciences Trust (BME)

 

The Trust’s investment adviser continued to identify important secular trends that underpin the health care sector, such as an aging global population and rising spending on health care in emerging market economies. This process helps form the basis for an overweight in the medical devices & supplies sub-sector, where the investment adviser continued to see strong fundamentals and growing penetration in the emerging markets.

Demographic changes across the globe, especially increased longevity, are leading to demand for the health sciences industry. This is further supported by innovation in multiple areas within health care. In drug development, for example, biotechnology and pharmaceutical companies are utilizing genomic research that allows for earlier diagnosis of disease and is facilitating the shift toward preventative care. In addition, there has been significant innovation in medical equipment, diagnostic services and biosensors.

As of June 30, 2020, the Trust had an options overwriting program in place whereby 39% of the underlying equities were overwritten with call options. These options were typically written at prices above prevailing market prices (estimated to be 6.4% out of the money) with an average time line until expiration of 49 days.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

Market Price and Net Asset Value Per Share Summary

 

     06/30/20     12/31/19      Change      High      Low  

Market Price

  $ 40.78     $ 42.50        (4.05 )%     $ 43.99      $ 27.00  

Net Asset Value

    40.93       41.19        (0.63      42.23        30.41  

Market Price and Net Asset Value History For the Past Five Years

 

 

LOGO

Overview of the Trust’s Total Investments *

 

TEN LARGEST HOLDINGS

 

Security   6/30/20  

UnitedHealth Group, Inc.

    7

Johnson & Johnson

    5  

Abbott Laboratories

    5  

Amgen, Inc.

    3  

Thermo Fisher Scientific, Inc.

    3  

Medtronic PLC

    3  

Boston Scientific Corp.

    3  

Eli Lilly & Co.

    3  

Vertex Pharmaceuticals, Inc.

    3  

Humana, Inc.

    2  

 

  *

Excludes option positions and money market funds.

 

INDUSTRY ALLOCATION

 

Industry   6/30/20     12/31/19  

Health Care Equipment & Supplies

    28     30

Biotechnology

    23       17  

Pharmaceuticals

    21       23  

Health Care Providers & Services

    19       21  

Life Sciences Tools & Services

    7       8  

Health Care Technology

    2       1  

 

 

For Trust compliance purposes, the Trust’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 the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

 
 

 

 

TRUST INFORMATION      17  


Trust Information  as of June 30, 2020    BlackRock Health Sciences Trust II (BMEZ)

 

Investment Objective

BlackRock Health Sciences Trust II’s (BMEZ) (the “Trust”) investment objective is to provide total return and income through a combination of current income, current gains and long-term capital appreciation. Under normal market conditions, the Trust will invest at least 80% of its total assets in equity securities of companies principally engaged in the health sciences group of industries and equity derivatives with exposure to the health sciences group of industries. Equity derivatives in which the Trust invests include purchased and sold (written) call and put options on equity securities of companies in the health sciences group of industries.

No assurance can be given that the Trust’s investment objective will be achieved.

Trust Information

 

Symbol on NYSE

  BMEZ

Initial Offering Date

  January 30, 2020

Current Distribution Rate on Closing Market Price as of June 30, 2020 ($20.91)(a)

  5.74%

Current Monthly Distribution per Common Share(b)

  $0.1000

Current Annualized Distribution per Common Share(b)

  $1.2000

 

  (a) 

Current distribution rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a return of capital. Past performance does not guarantee future results.

 
  (b) 

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a return of capital or net realized gain.

 

Performance and Portfolio Management Commentary

Returns for the period since inception (January 30, 2020) to June 30, 2020 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BMEZ(a)(b)

    6.10      19.29

MSCI ACWI 25% Call Overwrite Index(c)

    N/A        (9.65

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b) 

The Trust moved to a discount to NAV during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c) 

MSCI ACWI 25% Call Overwrite Index incorporates an option overlay component on the MSCI ACWI Index with a 25% overwrite level.

 

N/A — Not applicable as the index does not have a market price.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

 

18    2020 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS


Trust Information  as of June 30, 2020 (continued)    BlackRock Health Sciences Trust II (BMEZ)

 

Market Price and Net Asset Value Per Share Summary

 

     06/30/20     01/30/20 (a)      Change      High      Low  

Market Price

  $ 20.91     $ 20.00        4.55    $ 21.90      $ 12.60  

Net Asset Value

    23.51       20.00        17.55        23.65        16.49  

Market Price and Net Asset Value History Since Inception

 

 

LOGO

 

(a) 

Commencement of operations.

Overview of the Trust’s Total Investments *

 

TEN LARGEST HOLDINGS

 

Security   6/30/20  

Seattle Genetics, Inc.

    3

Genmab A/S

    3  

Livongo Health, Inc.

    3  

Varian Medical Systems, Inc.

    2  

Masimo Corp.

    2  

Baxter International, Inc.

    2  

Teleflex, Inc.

    2  

UCB SA

    2  

Teladoc Health, Inc.

    2  

Amedisys, Inc.

    2  

 

  *

Excludes option positions and money market funds.

 

INDUSTRY ALLOCATION

 

Industry   6/30/20  

Biotechnology

    41

Health Care Equipment & Supplies

    28  

Pharmaceuticals

    10  

Health Care Providers & Services

    9  

Life Sciences Tools & Services

    6  

Health Care Technology

    5  

Insurance

    1  

 

 

For Trust compliance purposes, the Trust’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 the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

 
 

 

 

TRUST INFORMATION      19  


Trust Information  as of June 30, 2020    BlackRock Resources & Commodities Strategy Trust (BCX)

 

Investment Objective

BlackRock Resources & Commodities Strategy Trust’s (BCX) (the “Trust”) primary investment objective is to seek high current income and current gains, with a secondary objective of capital appreciation. The Trust will seek to achieve its investment objectives, under normal market conditions, by investing at least 80% of its total assets in equity securities issued by commodity or natural resources companies, derivatives with exposure to commodity or natural resources companies or investments in securities and derivatives linked to the underlying price movement of commodities or natural resources. While permitted, the Trust does not currently expect to invest in securities and derivatives linked to the underlying price movement of commodities or natural resources. The Trust seeks to pursue this goal primarily by investing in a portfolio of equity securities and also by employing a strategy of writing (selling) call and put options.

No assurance can be given that the Trust’s investment objectives will be achieved.

Trust Information

 

Symbol on NYSE

  BCX

Initial Offering Date

  March 30, 2011

Current Distribution Rate on Closing Market Price as of June 30, 2020 ($6.13)(a)

  7.83%

Current Monthly Distribution per Common Share(b)

  $0.0400

Current Annualized Distribution per Common Share(b)

  $0.4800

 

  (a) 

Current distribution rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a return of capital. Past performance does not guarantee future results.

 
  (b) 

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a return of capital or net realized gain.

 

Performance and Portfolio Management Commentary

Returns for the six months ended June 30, 2020 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BCX(a)(b)

    (20.43 )%       (15.52 )% 

MSCI ACWI Select Liquidity Natural Resources Call Overwrite Index(c)

    N/A        (23.83

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b) 

The Trust’s discount to NAV widened during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c) 

MSCI ACWI Select Liquidity Natural Resources Call Overwrite Index incorporates an option overlay component on the MSCI ACWI Select Liquidity Natural Resources Index with a 33% overwrite level.

 

N/A — Not applicable as the index does not have a market price.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s relative performance based on the index cited above:

What factors influenced performance?

Commodity prices fell sharply in the first half of 2020, as the demand outlook was pressured by concerns about the economic impact of the coronavirus. In combination with the stock market downturn that occurred in February and March, this development led to poor returns for commodity-related equities.

Consistent with this environment, the Trust produced a negative absolute return in the six-month period. While most of its holdings lost ground, CF Industries Holdings, Inc. was among the worst performers due to the broad-based weakness in fertilizer producers. Kosmos Energy Ltd. also detracted after it announced plans to reduce 2020 capital spending and suspend its dividend to preserve cash in response to the drop in oil prices. An underweight position in Newmont Mining Corp. was among the largest detractors, as well.

On the positive side, Wheaton Precious Metals Corp. — which rallied behind strength in the prices of gold and silver — was a top contributor. An out-of-benchmark position in the Russian mining Polyus PJSC, which gained ground after reporting strong production results, better-than-expected earnings, and positive free cash flow, was another key contributor. The U.S. retailer Tractor Supply Co. also performed well, as its “buy-online-pickup-in store” service led to record sales and earnings.

The Trust made use of options, principally written call options on individual stocks, to seek enhanced income while continuing to participate in the return of the underlying equities. The Trust’s option writing strategy contributed positively to relative performance for the six-month period.

Describe recent portfolio activity.

The investment adviser closely analyzed the portfolio to identify companies facing higher risk due to the combination of dependence on a single asset and elevated debt and sold holdings it believed could be vulnerable in this regard. In addition, the investment adviser made some stock-specific changes based on relative valuations. The investment adviser reduced the portfolio’s weighting in energy and increased its allocation to agriculture, with a focus on companies that are benefitting from changing consumer preferences toward food and nutrition.

 

 

20    2020 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS


Trust Information  as of June 30, 2020 (continued)    BlackRock Resources & Commodities Strategy Trust (BCX)

 

Describe portfolio positioning at period end.

The mining industry represented the Trust’s largest allocation, followed by agriculture and energy, respectively.

As of June 30, 2020, the Trust had an options overwriting program in place whereby 36% of the underlying equities were overwritten with call options. These options were typically written at levels above prevailing market prices (estimated to be 6.3% out of the money) with an average time until expiration of 46 days.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

Market Price and Net Asset Value Per Share Summary

 

     06/30/20     12/31/19      Change      High      Low  

Market Price

  $ 6.13     $ 8.07        (24.04 )%     $ 8.21      $ 3.28  

Net Asset Value

    7.29       9.04        (19.36      9.07        4.99  

Market Price and Net Asset Value History For Past Five Years

 

 

LOGO

Overview of the Trust’s Total Investments *

 

TEN LARGEST HOLDINGS

 

Security   6/30/20  

BHP Group PLC

    6

TOTAL SA

    6  

Chevron Corp.

    5  

BP PLC — ADR

    4  

Newmont Corp.

    4  

CF Industries Holdings, Inc.

    4  

Vale SA — ADR

    4  

Barrick Gold Corp.

    4  

Wheaton Precious Metals Corp.

    4  

FMC Corp.

    4  

 

  *

Excludes option positions and money market funds.

 

INDUSTRY ALLOCATION

 

Industry   6/30/20     12/31/19  

Chemicals

    13     11

Containers & Packaging

    5       9  

Electronic Equipment, Instruments & Components

    2       1  

Food Products

    8       7  

Metals & Mining

    38       35  

Oil, Gas & Consumable Fuels

    32       35  

Paper & Forest Products

    (a)       

Specialty Retail

    2       1  

Machinery

          1  

 

  (a) 

Represents less than 1% of the Trust’s total investments.

 

 

 

For Trust compliance purposes, the Trust’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 the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

 
 

 

 

TRUST INFORMATION      21  


Trust Information  as of June 30, 2020    BlackRock Science and Technology Trust (BST)

 

Investment Objective

BlackRock Science and Technology Trust’s (BST) (the “Trust”) investment objective is to provide income and total return through a combination of current income, current gains and long-term capital appreciation. The Trust seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its total assets in equity securities of U.S. and non-U.S. science and technology companies in any market capitalization range, selected for their rapid and sustainable growth potential from the development, advancement and use of science and/or technology (high growth science and technology stocks), and/or potential to generate current income from advantageous dividend yields (cyclical science and technology stocks). The Trust seeks to pursue this goal primarily by investing in a portfolio of equity securities and also by employing a strategy of writing (selling) call and put options.

No assurance can be given that the Trust’s investment objective will be achieved.

Trust Information

 

Symbol on NYSE

  BST

Initial Offering Date

  October 30, 2014

Current Distribution Rate on Closing Market Price as of June 30, 2020 ($37.81)(a)

  5.25%

Current Monthly Distribution per Common Share(b)

  $0.1655

Current Annualized Distribution per Common Share(b)

  $1.9860

 

  (a) 

Current distribution rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a return of capital. Past performance does not guarantee future results.

 
  (b) 

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a return of capital or net realized gain.

 

Performance and Portfolio Management Commentary

Returns for the six months ended June 30, 2020 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BST(a)(b)

    17.06      21.45

MSCI ACWI IT Call Overwrite Index(c)

    N/A        4.78  

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b) 

The Trust moved from a premium to NAV to a discount during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c) 

MSCI ACWI IT Call Overwrite Index incorporates an option overlay component on the MSCI ACWI IT Index with a 33% overwrite level.

 

N/A — Not applicable as the index does not have a market price.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s relative performance based on the index cited above:

What factors influenced performance?

The Trust’s positions in several software companies that benefited from increases in e-commerce activity were among the largest contributors to relative return. These included out-of-benchmark positions in Canadian e-commerce firm Shopify, Inc. as well as Amazon.com, Inc. E-commerce has received a significant boost as populations across the globe have been forced to make more purchases online due to the coronavirus pandemic lockdowns. Elsewhere, the Trust’s overweight position in cloud communications company Twilio, Inc. was also among the largest contributors, as the company reported favorable first quarter earnings and benefited from increased demand for communication services during the pandemic.

At the sub-sector level, an underweight to hardware was the most significant detractor from relative performance, led by a below-benchmark position in Apple, Inc. The company’s stock displayed resilience during first-quarter of 2020 market volatility based on increased demand for the company’s services segment. An underweight to Microsoft Corp. was also among the largest detractors from returns. Microsoft reported strong growth in its cloud business, and the stock price benefited as investors sought safety in the largest and most liquid names.

The Trust utilized an options overlay strategy in which calls are written on a portion of the portfolio’s holdings. The Trust’s option overlay strategy contributed positively to relative performance for the six-month period.

Describe recent portfolio activity.

During the period, the Trust increased exposure to software and semiconductors, while decreasing exposure to internet companies. From a regional perspective, the Trust’s allocations to Asia and the United States were increased.

Describe portfolio positioning at period end.

Our investment process aims to provide a balance of legacy technology firms that can continually innovate, and new disruptive companies displacing those companies failing to innovate, with approximately 40% of the portfolio consisting of these “core” legacy companies, and 60% making up the “opportunistic,” high-growth portion. At

 

 

22    2020 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS


Trust Information  as of June 30, 2020 (continued)    BlackRock Science and Technology Trust (BST)

 

period end, the largest sub-sector exposures were in internet, and software & services companies. The Trust’s software exposure was characterized by companies that offer enterprise software solutions, cloud computing services, and software-as-a-service. Conversely, the Trust held an underweight position in the semiconductors and hardware sub-sectors due to their cyclical nature.

As of June 30, 2020, the Trust had in place an option overwriting program whereby 32% of the underlying equities were overwritten with call options. These call options were typically written at prices above the prevailing market prices (estimated to be 5.3% out of the money) with an average time until expiration of 45 days.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

Market Price and Net Asset Value Per Share Summary

 

     06/30/20     12/31/19      Change      High      Low  

Market Price

  $ 37.81     $ 33.27        13.65    $ 38.86      $ 22.41  

Net Asset Value

    38.26       32.45        17.90        38.33        25.57  

Market Price and Net Asset Value History For the Past Five Years

 

 

LOGO

Overview of the Trust’s Total Investments *

 

TEN LARGEST HOLDINGS

 

Security   6/30/20  

Microsoft Corp.

    5

Apple, Inc.

    4  

Amazon.com, Inc.

    3  

Tencent Holdings Ltd.

    3  

Alibaba Group Holding Ltd. — ADR

    3  

Alphabet, Inc.

    3  

Mastercard, Inc.

    2  

Twilio, Inc.

    2  

Visa, Inc.

    2  

Shopify, Inc.

    2  

 

  *

Excludes option positions and money market funds.

 

INDUSTRY ALLOCATION

 

Industry   6/30/20     12/31/19  

Software

    27     26

IT Services

    19       19  

Semiconductors & Semiconductor Equipment

    15       15  

Interactive Media & Services

    10       10  

Internet & Direct Marketing Retail

    10       10  

Entertainment

    4       3  

Technology Hardware, Storage & Peripherals

    4       3  

Diversified Consumer Services

    2       2  

Health Care Technology

    2       1  

Electronic Equipment, Instruments & Components

    1       4  

Road & Rail

    1       3  

Diversified Telecommunication Services

    1       1  

Automobiles

    1        

Banks

    1       1  

Diversified Financial Services

    1        

Communications Equipment

    1       1  

Professional Services

          1  

For Trust compliance purposes, the Trust’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 the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

 

 

 

TRUST INFORMATION      23  


Trust Information  as of June 30, 2020    BlackRock Science and Technology Trust II (BSTZ)

 

Investment Objective

BlackRock Science and Technology Trust II’s (BSTZ) (the “Trust”) investment objective is to provide total return and income through a combination of current income, current gains and long-term capital appreciation. The Trust seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its total assets in equity securities issued by U.S. and non-U.S. science and technology companies in any market capitalization range, selected for their rapid and sustainable growth potential from the development, advancement and use of science and/or technology. The Trust seeks to pursue this goal primarily by investing in a portfolio of equity securities and also by employing a strategy of writing (selling) call and put options.

No assurance can be given that the Trust’s investment objective will be achieved.

Trust Information

 

Symbol on NYSE

  BSTZ

Initial Offering Date

  June 27, 2019

Current Distribution Rate on Closing Market Price as of June 30, 2020 ($22.67)(a)

  5.29%

Current Monthly Distribution per Common Share(b)

  $0.1000

Current Annualized Distribution per Common Share(b)

  $1.2000

 

  (a) 

Current distribution rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a return of capital. Past performance does not guarantee future results.

 
  (b) 

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a return of capital or net realized gain.

 

Performance and Portfolio Management Commentary

Returns for the six months ended June 30, 2020 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BSTZ(a)(b)

    13.89      27.13

MSCI ACWI 25% Call Overwrite Index(c)

    N/A        (9.66

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b) 

The Trust’s discount to NAV widened during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c) 

MSCI ACWI 25% Call Overwrite Index incorporates an option overlay component on the MSCI ACWI Index with a 25% overwrite level.

 

N/A — Not applicable as the index does not have a market price.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s relative performance based on the index cited above:

What factors influenced performance?

Within the software industry, the Trust’s positions in a number of companies benefiting from an increase in e-commerce activity were among the largest contributors to relative return during the period. This included positions in Shopify, Inc. and Locaweb. E-commerce has seen a significant increase as populations across the globe have been forced to make more purchases online because of economic lockdowns. Elsewhere, the Trust’s position in cloud communications company Twilio, Inc. was among the largest contributors, as the company reported favorable earnings for the first quarter of 2020 and benefited from increased demand for communication services during the coronavirus pandemic. The Trust’s position in electric vehicle manufacturer Tesla, Inc. also delivered strong positive returns during the period. Tesla announced two delivery updates during the period, both of which beat consensus estimates. The company’s first quarter earnings also exceeded market forecasts. A position in Livongo Health, Inc., a U.S.-based virtual health care company, was also among the largest contributors to return during the period. The company’s platform provides data-based health coaching programs for individuals with diabetes and hypertension. Using a smart glucose monitor, the service allows patients to share their blood glucose levels with certified diabetes educators and receive feedback in real time. This type of monitoring and coaching support is crucial for helping patients to effectively manage their health outcomes. The spread of the coronavirus and subsequent social distancing measures have resulted in increased demand for virtual diagnostics and telemedicine services.

Conversely, the Trust’s position in Chinese technology-centric coffee company Luckin Coffee, Inc. was among the largest detractors from performance. The company announced that in 2019 its chief operating officer, as well as other employees reporting to him, fabricated transactions amounting to 2.2 billion yuan, or $310 million. The Trust has since exited the position. In addition, the Trust’s position in Brazilian software company Linx SA came under pressure during the period. Linx generates revenue from selling software to retailers, but given the current shutdown of the Brazilian economy the stock declined. The Trust had initiated the position based on the company’s strategy to enter the payments space, but this strategy is now postponed and the position was reduced. Elsewhere, a position in Network International Holdings PLC, which provides technology-enabled payment solutions to merchants and financial institutions in the Middle East, weighed on performance. The company was hurt by the strict lockdowns enacted in many Middle Eastern countries, which reduced demand for its services. The Trust exited the position. Other detractors included holdings in Skyworks Solutions, Inc., a U.S.-based semiconductor company, and Sunny Optical Technology Group Co. Ltd., a China-based hardware firm.

The Trust utilized an options overlay strategy in which calls are written on a portion of the portfolio’s holdings. The Trust’s options overlay strategy contributed detracted from relative performance for the six-month period.

Describe recent portfolio activity.

During the period, the Trust deployed capital across both companies likely to experience increased demand in the current environment and those positioned to benefit from longer-term demand trends. This encompasses firms that are seeing an increase in demand due to social distancing and the migration to working remotely, such as those involved in cloud computing, digital transformation and gaming. In addition, the investment adviser continues to perform due diligence on multiple new opportunities in the private equity universe, and expects to further increase exposure to private assets over the coming quarters given a robust pipeline of private transaction opportunities. As of June 30, 2020, the Trust held 13 private investments, comprising approximately 11% of assets or a total commitment of approximately $220 million. Among the Trust’s

 

 

24    2020 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS


Trust Information  as of June 30, 2020 (continued)    BlackRock Science and Technology Trust II (BSTZ)

 

13 private investments, four were initiated during the first half of 2020: A solid state driver controller company focused on cloud, hyperscale and enterprise markets; a “fabless” interconnect semiconductor company (i.e., one that designs microchips but contracts out their production) primarily serving the data center market; a software business providing cloud software that connects accommodation providers to distribution channels; and an artificial intelligence company that offers a complete, “full-stack” AI solution including both silicon and software.

Describe portfolio positioning at period end.

At period end, the Trust was fully invested in equity securities. The Trust held 36% of portfolio assets in software, 20% in semiconductors, 18% in services, 17% in internet, 5% in hardware and 5% in content/telecoms. These industry exposures were a result of bottom-up stock selection. From an options perspective, during periods of extreme volatility, the Trust typically sells further out-of-the-money calls to leave room for a potential rebound in the underlying stocks. Because of the recent extraordinary volatility, this often translated directly into higher option premiums.

As of June 30, 2020, the Trust had in place an option overwriting program whereby approximately 22% of the underlying equities were written with call options. These call options were typically written at prices above the prevailing market prices (estimated to be 6.4% out of the money) with an average time until expiration of 47 days.

Market Price and Net Asset Value Per Share Summary

 

     06/30/20     12/31/19      Change      High      Low  

Market Price

  $ 22.67     $ 20.50        10.59    $ 23.28      $ 12.00  

Net Asset Value

    25.86       20.95        23.44        25.86        15.57  

Market Price and Net Asset Value History Since Inception

 

 

LOGO

 

(a) 

Commencement of operations.

Overview of the Trust’s Total Investments *

 

TEN LARGEST HOLDINGS

 

Security   6/30/20  

Tesla, Inc.

    2

Shopify, Inc.

    2  

Twilio, Inc.

    2  

Lasertec Corp.

    2  

Kakao Corp.

    2  

SambaNova Systems, Inc., Series C

    2  

Square, Inc.

    2  

Delivery Hero SE

    2  

RingCentral, Inc.

    2  

Meituan Dianping

    2  

 

  *

Figures exclude assets held in money market funds and option positions.

 

INDUSTRY ALLOCATION

 

Industry   6/30/20     12/31/19  

Software

    29     26

Semiconductors & Semiconductor Equipment

    20       20  

IT Services

    18       17  

Internet & Direct Marketing Retail

    7       7  

Interactive Media & Services

    5       5  

Entertainment

    4       3  

Health Care Technology

    4       2  

Diversified Consumer Services

    3       3  

Electronic Equipment, Instruments & Components

    3       6  

Automobiles

    2       1  

Multiline Retail

    1       2  

Banks

    1       1  

Diversified Telecommunication Services

    1       1  

Capital Markets

    1       1  

Professional Services

    1       1  

Road & Rail

    (a)      1  

Communications Equipment

          2  

Hotels, Restaurants & Leisure

          1  

 

  (a) 

Represents less than 1% of the Trust’s total investments.

 

For Trust compliance purposes, the Trust’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 the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

 

 

 

TRUST INFORMATION      25  


Trust Information  as of June 30, 2020    BlackRock Utilities, Infrastructure & Power Opportunities Trust (BUI)

 

Investment Objective

BlackRock Utilities, Infrastructure & Power Opportunities Trust’s (BUI) (the “Trust”) investment objective is to provide total return through a combination of current income, current gains and long-term capital appreciation. The Trust seeks to achieve its investment objective by investing primarily in equity securities issued by companies that are engaged in the Utilities, Infrastructure and Power Opportunities business segments anywhere in the world and by employing a strategy of writing (selling) call and put options. The Trust considers the “Utilities” business segment to include products, technologies and services connected to the management, ownership, operation, construction, development or financing of facilities used to generate, transmit or distribute electricity, water, natural resources or telecommunications, the “Infrastructure” business segment to include companies that own or operate infrastructure assets or that are involved in the development, construction, distribution or financing of infrastructure assets and the “Power Opportunities” business segment to include companies with a significant involvement in, supporting, or necessary to renewable energy technology and development, alternative fuels, energy efficiency, automotive and sustainable mobility and technologies that enable or support the growth and adoption of new power and energy sources. Under normal circumstances, the Trust invests a substantial amount of its total assets in foreign issuers, issuers that primarily trade in a market located outside the United States or issuers that do a substantial amount of business outside the United States. The Trust may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Trust’s investment objective will be achieved.

Trust Information

 

Symbol on NYSE

  BUI

Initial Offering Date

  November 25, 2011

Current Distribution Rate on Closing Market Price as of June 30, 2020 ($21.25)(a)

  6.83%

Current Monthly Distribution per Common Share(b)

  $0.1210

Current Annualized Distribution per Common Share(b)

  $1.4520

 

  (a) 

Current distribution rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate consists of income, net realized gains and/or a return of capital. Past performance does not guarantee future results.

 
  (b) 

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a return of capital or net realized gain.

 

Performance and Portfolio Management Commentary

Returns for the six months ended June 30, 2020 were as follows:

 

    Returns Based On  
     Market Price      Net Asset Value  

BUI(a)(b)

    (1.17 )%       (5.75 )% 

MSCI World Select Energy, Utilities and Industry Call Overwrite Index(c)

    N/A        (16.07

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b) 

The Trust’s premium to NAV widened during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c) 

MSCI World Select Energy, Utilities and Industry Call Overwrite Index incorporates an option overlay component on the MSCI World Select Energy, Utilities and Industry Index with a 33% overwrite level.

 

N/A — Not applicable as the index does not have a market price.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s relative performance based on the index cited above:

What factors influenced performance?

The largest contributors to relative returns were the Trust’s positions in clean-power utility companies. These positions benefited from resilient earnings during a challenging environment in which movement restrictions to fight the spread of the coronavirus had a negative impact on economic growth. Among individual clean-power utilities, U.S.-based NextEra Energy, Inc., Spanish utility EDP Renovaveis SA, Italy’s Enel SpA, and RWE AG in Germany made the most notable positive contributions.

The largest detractor from relative returns came from the Trust’s positions in companies with exposure to the automotive industry. In particular, specialty chemical manufacturer Johnson Matthey PLC weighed on performance. Among other individual positions, midstream energy services provider Enterprise Products Partners LP was a notable detractor, as volatility in oil prices had a negative impact on its business. U.S.-based electric power holding company Duke Energy Corp. also detracted from relative returns.

The Trust utilized an options overlay strategy in which calls are written on a portion of the portfolio’s holdings. The Trust’s options overlay strategy contributed positively to relative performance for the six-month period.

Describe recent portfolio activity.

During the period, the Trust took advantage of heightened market volatility to increase its exposure to companies that are playing a role in the energy transition from fossil-fuel based energy sources to renewable energy. In particular, the Trust added to positions in clean-power utilities, as well as companies in the solar power value chain.

 

 

26    2020 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS


Trust Information  as of June 30, 2020 (continued)    BlackRock Utilities, Infrastructure & Power Opportunities Trust (BUI)

 

Describe portfolio positioning at period end.

At period end, the utilities sector accounted for approximately 56% of the Trust’s assets. The Trust had approximately 23% and 10% of its assets invested in the industrials and energy sectors, respectively, and the remainder was invested in other infrastructure- and power-related sectors.

As of June 30, 2020, the Trust had an options overwriting program in place whereby 34% of the underlying equities were overwritten with call options. These call options were typically written at prices above prevailing market prices (estimated to be 4.4% out of the money) with an average time until expiration of 50 days.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

Market Price and Net Asset Value Per Share Summary

 

     06/30/20     12/31/19      Change      High      Low  

Market Price

  $ 21.25     $ 22.31        (4.75 )%     $ 23.31      $ 12.48  

Net Asset Value

    20.00       22.02        (9.17      22.96        15.06  

Market Price and Net Asset Value History For the Past Five Years

 

 

LOGO

Overview of the Trust’s Total Investments *

 

TEN LARGEST HOLDINGS

 

Security   6/30/20  

NextEra Energy, Inc.

    9

Enel SpA

    6  

Iberdrola SA

    4  

EDP Renováveis, S.A.

    4  

RWE AG

    4  

Dominion Energy, Inc.

    3  

Kinder Morgan, Inc.

    3  

TC Energy Corp.

    3  

Williams Cos., Inc.

    3  

Vinci SA

    3  

 

  *

Excludes option positions and money market funds.

 

INDUSTRY ALLOCATION

 

Industry   6/30/20     12/31/19  

Electric Utilities

    33     31

Multi-Utilities

    15       17  

Oil, Gas & Consumable Fuels

    10       11  

Independent Power and Renewable Electricity Producers

    8       8  

Building Products

    6       5  

Electrical Equipment

    6       9  

Chemicals

    5       6  

Commercial Services & Supplies

    5       2  

Semiconductors & Semiconductor Equipment

    4       3  

Construction & Engineering

    4       5  

Machinery

    2       1  

Electronic Equipment, Instruments & Components

    2       2  

For Trust compliance purposes, the Trust’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 the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

 

 

 

TRUST INFORMATION      27  


Derivative Financial Instruments

 

The Trusts may invest in various derivative financial instruments. These instruments are used to obtain exposure to a security, commodity, index, market, and/or other assets without owning or taking physical custody of securities, commodities and/or other referenced assets or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage and involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the instrument. The Trusts’ successful use of a derivative financial instrument depends on the investment adviser’s ability to predict pertinent market movements accurately, which cannot be assured. The use of these instruments may result in losses greater than if they had not been used, may limit the amount of appreciation a Trust can realize on an investment and/or may result in lower distributions paid to shareholders. The Trusts’ investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.

 

 

28    2020 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (unaudited)

June 30, 2020

  

BlackRock Energy and Resources Trust (BGR)

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

Common Stocks — 97.6%

 

Energy Equipment & Services — 4.0%  

Baker Hughes Co.(a)

    224,200     $ 3,450,438  

Schlumberger Ltd.(a)

    344,030       6,326,711  
   

 

 

 
    9,777,149  
Oil, Gas & Consumable Fuels — 93.6%  

Aker BP ASA

    133,000       2,461,270  

BP PLC

    4,694,080       17,983,214  

Cairn Energy PLC(c)

    1,276,691       1,857,938  

Canadian Natural Resources Ltd.

    112,410       1,949,952  

Chevron Corp.(a)(b)

    363,975       32,477,489  

CNOOC Ltd.

    3,007,000       3,374,838  

Concho Resources, Inc.(a)

    71,699       3,692,499  

ConocoPhillips(a)

    297,700       12,509,354  

Enbridge, Inc.

    155,950       4,741,909  

EOG Resources, Inc.(a)

    129,190       6,544,765  

Exxon Mobil Corp.(a)(b)

    87,562       3,915,773  

Galp Energia SGPS SA

    374,735       4,346,919  

Gazprom PJSC — ADR

    215,460       1,163,468  

Hess Corp.(a)

    136,990       7,097,452  

Kinder Morgan, Inc.(a)

    648,239       9,833,786  

Kosmos Energy Ltd.(c)

    1,301,228       2,160,038  

Lukoil PJSC — ADR

    30,810       2,290,234  

Lundin Petroleum AB

    218,040       5,321,402  

Marathon Petroleum Corp.(a)

    154,475       5,774,276  

Oil Search Ltd.

    1,025,118       2,271,824  

Petroleo Brasileiro SA — ADR(a)(c)

    288,821       2,388,550  

Pioneer Natural Resources Co.(a)

    76,646       7,488,314  

Royal Dutch Shell PLC — ADR, Class A(a)

    738,550       24,143,200  

Santos Ltd.

    702,130       2,609,518  

Suncor Energy, Inc.

    538,740       9,083,499  

TC Energy Corp.

    241,350       10,311,064  

TOTAL SA

    573,653       22,119,147  

Valero Energy Corp.(a)

    95,068       5,591,900  
Security   Shares     Value  
Oil, Gas & Consumable Fuels (continued)  

Williams Cos., Inc.(a)

    501,490     $ 9,538,340  
   

 

 

 
    225,041,932  
   

 

 

 

Total Long-Term Investments — 97.6%
(Cost — $294,948,738)

 

    234,819,081  
   

 

 

 

Short-Term Securities — 3.1%

 

BlackRock Liquidity Funds, T-Fund, Institutional Class,
0.11%(d)(e)

    7,415,401       7,415,401  
   

 

 

 

Total Short-Term Securities — 3.1%
(Cost — $7,415,401)

 

    7,415,401  
   

 

 

 

Total Investments Before Options Written — 100.7%
(Cost — $302,364,139)

 

    242,234,482  
   

 

 

 

Options Written — (0.7)%
(Premiums Received — $2,894,347)

 

    (1,754,336
   

 

 

 

Total Investments, Net of Options Written — 100.0%
(Cost — $299,469,792)

 

    240,480,146  

Liabilities in Excess of Other Assets — (0.0)%

 

    (70,763
   

 

 

 

Net Assets — 100.0%

 

  $ 240,409,383  
   

 

 

 

 

(a) 

All or a portion of the security has been pledged and/or segregated as collateral in connection with outstanding exchange-traded options written.

(b) 

All or a portion of the security has been pledged as collateral in connection with outstanding OTC derivatives.

(c) 

Non-income producing security.

(d) 

Annualized 7-day yield as of period end.

(e) 

Investments in issuers considered to be an affiliate/affiliates of the Trust during the six months ended June 30, 2020 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 
Affiliated Issuer    Shares
Held at
12/31/19
     Shares
Purchased
    

Shares

Sold

     Shares
Held at
06/30/20
     Value at
06/30/20
     Income      Net
Realized
Gain (Loss)
 (a)
     Change in
Unrealized
Appreciation
(Depreciation)
 

BlackRock Liquidity Funds, T-Fund, Institutional Class

     12,745,390               (5,329,989 )(b)       7,415,401      $ 7,415,401      $ 39,731      $         
              

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes net capital gain distributions, if applicable.

 
  (b) 

Represents net shares purchased (sold).

 

For Trust compliance purposes, the Trust’s industry classifications refer to one or more of the industry sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

Derivative Financial Instruments Outstanding as of Period End

Exchange-Traded Options Written

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call                                                   

Kinder Morgan, Inc.

     330          07/02/20        USD     16.00        USD     501        $ (331

Royal Dutch Shell PLC — ADR, Class A

     229          07/02/20        USD     34.50        USD     749          (2,290

Royal Dutch Shell PLC — ADR, Class A

     229          07/02/20        USD     39.00        USD     749          (3,435

Chevron Corp.

     426          07/10/20        USD     106.00        USD     3,801          (3,834

EOG Resources, Inc.

     303          07/10/20        USD     59.00        USD     1,535          (1,969

Kinder Morgan, Inc.

     27          07/10/20        USD     17.50        USD     41          (243

 

 

SCHEDULES OF INVESTMENTS      29  


Schedule of Investments  (unaudited) (continued)

June 30, 2020

  

BlackRock Energy and Resources Trust (BGR)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call (continued)                                                   

Marathon Petroleum Corp.

     18          07/10/20        USD     44.00        USD     67        $ (333

Suncor Energy, Inc.

     96          07/10/20        CAD     26.50        CAD     220          (354

TC Energy Corp.

     370          07/10/20        CAD     60.50        CAD     2,146          (3,679

Baker Hughes Co.

     430          07/17/20        USD     14.00        USD     662          (81,700

Baker Hughes Co.

     354          07/17/20        USD     18.00        USD     545          (2,655

Canadian Natural Resources Ltd.

     300          07/17/20        CAD     26.00        CAD     707          (4,530

Chevron Corp.

     199          07/17/20        USD     97.50        USD     1,776          (9,652

ConocoPhillips

     253          07/17/20        USD     50.00        USD     1,063          (2,909

Enbridge, Inc.

     162          07/17/20        CAD     46.00        CAD     669          (716

Exxon Mobil Corp.

     57          07/17/20        USD     50.00        USD     255          (1,453

Hess Corp.

     270          07/17/20        USD     50.00        USD     1,399          (99,225

Hess Corp.

     7          07/17/20        USD     65.00        USD     36          (70

Kinder Morgan, Inc.

     620          07/17/20        USD     16.00        USD     941          (12,090

Marathon Petroleum Corp.

     384          07/17/20        USD     37.50        USD     1,435          (83,136

Petroleo Brasileiro SA — ADR

     135          07/17/20        USD     8.00        USD     112          (7,627

Pioneer Natural Resources Co.

     148          07/17/20        USD     110.00        USD     1,446          (11,100

Pioneer Natural Resources Co.

     9          07/17/20        USD     100.00        USD     88          (3,060

Royal Dutch Shell PLC — ADR, Class A

     631          07/17/20        USD     32.50        USD     2,063          (82,030

Suncor Energy, Inc.

     253          07/17/20        CAD     27.00        CAD     579          (1,491

Suncor Energy, Inc.

     253          07/17/20        CAD     28.00        CAD     579          (1,305

Suncor Energy, Inc.

     58          07/17/20        CAD     26.00        CAD     133          (619

TC Energy Corp.

     116          07/17/20        CAD     64.00        CAD     673          (513

Williams Cos., Inc.

     468          07/17/20        USD     20.00        USD     890          (12,636

Chevron Corp.

     100          07/24/20        USD     94.00        USD     892          (18,800

Concho Resources, Inc.

     130          07/24/20        USD     59.00        USD     670          (7,800

ConocoPhillips

     254          07/24/20        USD     50.50        USD     1,067          (6,223

EOG Resources, Inc.

     149          07/24/20        USD     63.00        USD     755          (2,086

Exxon Mobil Corp.

     113          07/24/20        USD     50.50        USD     505          (3,898

Hess Corp.

     202          07/24/20        USD     55.00        USD     1,047          (36,057

Kinder Morgan, Inc.

     330          07/24/20        USD     17.50        USD     501          (3,960

Marathon Petroleum Corp.

     30          07/24/20        USD     46.50        USD     112          (1,170

Petroleo Brasileiro SA — ADR

     261          07/24/20        USD     8.50        USD     216          (10,571

Pioneer Natural Resources Co.

     49          07/24/20        USD     105.00        USD     479          (13,598

Royal Dutch Shell PLC — ADR, Class A

     863          07/24/20        USD     38.00        USD     2,821          (23,733

Schlumberger Ltd.

     388          07/24/20        USD     23.00        USD     714          (6,208

TC Energy Corp.

     234          07/24/20        CAD     59.50        CAD     1,357          (14,392

Valero Energy Corp.

     121          07/24/20        USD     67.50        USD     712          (8,833

Williams Cos., Inc.

     291          07/24/20        USD     21.50        USD     553          (4,219

Williams Cos., Inc.

     361          07/24/20        USD     19.50        USD     687          (21,480

Chevron Corp.

     151          07/31/20        USD     97.50        USD     1,347          (18,271

Concho Resources, Inc.

     105          07/31/20        USD     56.00        USD     541          (18,375

ConocoPhillips

     534          07/31/20        USD     44.50        USD     2,244          (81,702

Exxon Mobil Corp.

     136          07/31/20        USD     47.50        USD     608          (15,980

Kinder Morgan, Inc.

     331          07/31/20        USD     17.00        USD     502          (2,813

Marathon Petroleum Corp.

     41          07/31/20        USD     43.50        USD     153          (3,833

Petroleo Brasileiro SA — ADR

     614          07/31/20        USD     10.00        USD     508          (7,368

Pioneer Natural Resources Co.

     54          07/31/20        USD     99.50        USD     528          (32,940

Royal Dutch Shell PLC — ADR, Class A

     632          07/31/20        USD     34.00        USD     2,066          (88,480

Valero Energy Corp.

     71          07/31/20        USD     62.00        USD     418          (18,460

Williams Cos., Inc.

     93          07/31/20        USD     20.00        USD     177          (3,487

Chevron Corp.

     127          08/07/20        USD     92.00        USD     1,133          (43,879

Concho Resources, Inc.

     15          08/07/20        USD     55.00        USD     77          (3,562

Kinder Morgan, Inc.

     630          08/07/20        USD     15.00        USD     956          (51,345

Schlumberger Ltd.

     410          08/07/20        USD     19.50        USD     754          (47,560

Williams Cos., Inc.

     117          08/07/20        USD     19.00        USD     223          (15,561

Canadian Natural Resources Ltd.

     93          08/21/20        CAD     30.00        CAD     219          (1,747

Chevron Corp.

     270          08/21/20        USD     95.00        USD     2,409          (81,000

Enbridge, Inc.

     383          08/21/20        USD     44.00        USD     1,581          (13,400

Marathon Petroleum Corp.

     67          08/21/20        USD     37.50        USD     250          (24,623

Schlumberger Ltd.

     410          08/21/20        USD     20.00        USD     754          (48,380

Suncor Energy, Inc.

     952          08/21/20        CAD     27.00        CAD     2,179          (32,608

Suncor Energy, Inc.

     268          08/21/20        CAD     26.00        CAD     613          (12,930

 

 

30    2020 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (unaudited) (continued)

June 30, 2020

  

BlackRock Energy and Resources Trust (BGR)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call (continued)                                                   

TC Energy Corp.

     124          08/21/20        CAD     60.00        CAD     719        $ (14,340

Valero Energy Corp.

     140          08/21/20        USD     65.00        USD     823          (32,200

Williams Cos., Inc.

     425          08/21/20        USD     20.00        USD     808          (33,363
                          

 

 

 
     $ (1,366,220
    

 

 

 

OTC Options Written

 

Description    Counterparty    Number of
Contracts
     Expiration
Date
    

Exercise
Price

     Notional
Amount (000)
     Value  
Call  

Galp Energia SGPS SA

   Credit Suisse International      49,800        07/07/20      EUR     10.31      EUR     514      $ (18,057

Lundin Petroleum AB

   Credit Suisse International      16,800        07/07/20      SEK     234.42      SEK     3,821        (5,049

TOTAL SA

   Credit Suisse International      39,400        07/07/20      EUR     33.55      EUR     1,352        (54,528

BP PLC

   Credit Suisse International      542,500        07/09/20      GBP     3.37      GBP     1,676        (7,398

BP PLC

   Credit Suisse International      304,000        07/14/20      GBP     3.30      GBP     939        (13,680

CNOOC Ltd.

   Goldman Sachs International      222,000        07/14/20      HKD     9.26      HKD     1,931        (2,808

CNOOC Ltd.

   Goldman Sachs International      520,000        07/14/20      HKD     9.15      HKD     4,524        (7,700

Gazprom PJSC — ADR

   UBS AG      8,500        07/14/20      USD     5.78      USD     46        (91

Lukoil PJSC — ADR

   Morgan Stanley & Co. International PLC      7,300        07/14/20      USD     79.98      USD     543        (213

Oil Search Ltd.

   Goldman Sachs International      208,900        07/14/20      AUD     3.60      AUD     671        (5,581

TOTAL SA

   Credit Suisse International      22,200        07/14/20      EUR     35.12      EUR     762        (16,804

Galp Energia SGPS SA

   Goldman Sachs International      23,500        07/15/20      EUR     12.21      EUR     243        (728

Gazprom PJSC — ADR

   Credit Suisse International      14,300        07/15/20      USD     6.03      USD     77        (127

Gazprom PJSC — ADR

   Credit Suisse International      47,000        07/15/20      USD     5.69      USD     254        (564

TOTAL SA

   Credit Suisse International      75,800        07/21/20      EUR     38.25      EUR     2,601        (15,490

Aker BP ASA

   Citibank N.A.      23,000        07/23/20      NOK     191.11      NOK     4,097        (6,538

BP PLC

   Credit Suisse International      603,200        07/23/20      GBP     3.58      GBP     1,864        (8,462

Gazprom PJSC — ADR

   Credit Suisse International      11,500        07/23/20      USD     6.09      USD     62        (70

Lukoil PJSC — ADR

   Credit Suisse International      5,300        07/23/20      USD     81.54      USD     394        (193

TOTAL SA

   Goldman Sachs International      51,200        07/23/20      EUR     38.50      EUR     1,757        (9,789

Lundin Petroleum AB

   Credit Suisse International      38,400        07/24/20      SEK     224.76      SEK     8,733        (46,602

Aker BP ASA

   Goldman Sachs International      23,000        07/29/20      NOK     193.94      NOK     4,097        (6,292

CNOOC Ltd.

   Goldman Sachs International      252,000        07/29/20      HKD     9.37      HKD     2,192        (5,209

TOTAL SA

   Morgan Stanley & Co. International PLC      14,400        07/29/20      EUR     38.34      EUR     494        (4,764

BP PLC

   Credit Suisse International      206,100        08/05/20      GBP     3.28      GBP     637        (26,001

Galp Energia SGPS SA

   Goldman Sachs International      64,200        08/05/20      EUR     10.90      EUR     663        (31,220

Lundin Petroleum AB

   Goldman Sachs International      21,700        08/12/20      SEK     241.61      SEK     4,935        (15,991

Oil Search Ltd.

   Morgan Stanley & Co. International PLC      150,000        08/12/20      AUD     3.36      AUD     482        (18,718

Santos Ltd.

   Morgan Stanley & Co. International PLC      245,700        08/12/20      AUD     5.40      AUD     1,324        (59,449
                     

 

 

 
   $ (388,116
  

 

 

 

Balances Reported in the Statements of Assets and Liabilities for Options Written

 

      Swap
Premium
Paid
     Swap
Premium
Received
     Unrealized
Appreciation
     Unrealized
Depreciation
     Value  

Options Written

     N/A        N/A      $ 1,333,298      $ (193,287    $ (1,754,336

 

 

SCHEDULES OF INVESTMENTS      31  


Schedule of Investments  (unaudited) (continued)

June 30, 2020

  

BlackRock Energy and Resources Trust (BGR)

 

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Liabilities — Derivative Financial Instruments

                    

Options written

                    

Options written, at value

   $      $      $ 1,754,336      $      $      $      $ 1,754,336  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

For the six months ended June 30, 2020, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Net Realized Gain (Loss) from:

                    

Options written

   $      $      ($ 815,024    $      $      $      ($ 815,024
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Net Change in Unrealized Appreciation (Depreciation) on:

                    

Options written

   $      $      $ 2,253,788      $      $      $      $ 2,253,788  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Options:

 

Average value of option contracts written

   $ 2,772,269  

For more information about the Trust’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

Derivative Financial Instruments — Offsetting as of Period End

The Trust’s derivative assets and liabilities (by type) were as follows:

 

      Assets        Liabilities  

Derivative Financial Instruments:

       

Options

   $        $ 1,754,336  

Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)

              (1,366,220
  

 

 

      

 

 

 

Total derivative assets and liabilities subject to an MNA

   $        $ 388,116  
  

 

 

      

 

 

 

The following table presents the Trust’s derivative liabilities by counterparty net of amounts available for offset under an MNA and net of the related collateral pledged by the Trust:

 

Counterparty    Derivative
Liabilities
Subject to
an MNA by
Counterparty
       Derivatives
Available for
Offset
       Non-cash
Collateral
Pledged
 (a)
       Cash
Collateral
Pledged
       Net
Amount of
Derivative
Liabilities
  (b)
 

Citibank N.A.

   $ 6,538        $        $        $          6,538  

Credit Suisse International

     213,025                   (213,025                  

Goldman Sachs International

     85,318                   (85,318                  

Morgan Stanley & Co. International PLC

     83,144                   (27,458                 55,686  

UBS AG

     91                                     91  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
   $ 388,116        $        $ (325,801      $        $ 62,315  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

Excess of collateral pledged to the individual counterparty is not shown for financial reporting purposes.

 
  (b) 

Net amount represents the net amount payable due to counterparty in the event of default. Net amount may be offset further by the options written receivable/payable on the Statements of Assets and Liabilities.

 

 

 

 

32    2020 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (unaudited) (continued)

June 30, 2020

  

BlackRock Energy and Resources Trust (BGR)

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

      Level 1        Level 2        Level 3        Total  

Assets:

 

Investments:

 

Common Stocks:

 

Energy Equipment & Services

   $ 9,777,149        $        $        $ 9,777,149  

Oil, Gas & Consumable Fuels

     159,242,160          65,799,772                   225,041,932  

Short-Term Securities

     7,415,401                            7,415,401  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ 176,434,710        $ 65,799,772        $        $ 242,234,482  
  

 

 

      

 

 

      

 

 

      

 

 

 

Derivative Financial Instruments(a)

 

              

Liabilities:

 

Equity contracts

   $ (1,366,220      $ (388,116      $        $ (1,754,336
  

 

 

      

 

 

      

 

 

      

 

 

 

The breakdown of the Trust’s investments into major categories is disclosed in the Schedule of Investments above.

 

  (a) 

Derivative financial instruments are options written. Options written are shown at value.

 

See notes to financial statements.

 

 

SCHEDULES OF INVESTMENTS      33  


Schedule of Investments  (unaudited)

June 30, 2020

  

BlackRock Enhanced Capital and Income Fund (CII)

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

Common Stocks — 100.3%

 

Aerospace & Defense — 1.2%  

BAE Systems PLC—ADR

    345,362     $ 8,288,688  
   

 

 

 
Automobiles — 1.2%  

General Motors Co.

    339,495       8,589,224  
   

 

 

 
Banks — 4.5%  

Bank of America Corp.(a)

    480,935       11,422,206  

JPMorgan Chase & Co.

    139,233       13,096,256  

U.S. Bancorp

    192,429       7,085,236  
   

 

 

 
    31,603,698  
Biotechnology — 1.3%  

Biogen, Inc.(b)

    33,223       8,888,814  
   

 

 

 
Capital Markets — 1.5%  

E*Trade Financial Corp.

    104,690       5,206,234  

Raymond James Financial, Inc.

    77,318       5,321,798  
   

 

 

 
    10,528,032  
Chemicals — 2.6%  

Axalta Coating Systems Ltd.(b)

    226,922       5,117,091  

Corteva, Inc.(b)

    509,553       13,650,925  
   

 

 

 
    18,768,016  
Communications Equipment — 2.5%  

Cisco Systems, Inc.

    379,539       17,701,699  
   

 

 

 
Construction & Engineering — 2.0%  

Quanta Services, Inc.

    364,421       14,296,236  
   

 

 

 
Consumer Finance — 0.9%  

Ally Financial, Inc.

    309,680       6,140,954  
   

 

 

 
Diversified Financial Services — 2.3%  

Berkshire Hathaway, Inc., Class B(b)

    90,204       16,102,316  
   

 

 

 
Diversified Telecommunication Services — 1.0%  

Verizon Communications, Inc.

    130,379       7,187,794  
   

 

 

 
Electrical Equipment — 1.2%  

Hubbell, Inc.

    67,650       8,480,604  
   

 

 

 
Food & Staples Retailing — 1.6%  

Walmart, Inc.

    93,940       11,252,133  
   

 

 

 
Health Care Equipment & Supplies — 1.4%  

Koninklijke Philips NV—ADR(b)

    217,062       10,167,184  
   

 

 

 
Health Care Providers & Services — 6.2%  

Anthem, Inc.

    45,210       11,889,326  

Laboratory Corp. of America Holdings(b)

    77,439       12,863,392  

UnitedHealth Group, Inc.

    65,930       19,446,054  
   

 

 

 
    44,198,772  
Household Durables — 0.5%  

D.R. Horton, Inc.

    69,646       3,861,871  
   

 

 

 
Independent Power and Renewable Electricity Producers — 1.1%  

AES Corp.

    530,186       7,682,395  
   

 

 

 
Insurance — 0.3%  

Fidelity National Financial, Inc.

    61,839       1,895,984  
   

 

 

 
Interactive Media & Services — 8.9%  

Alphabet, Inc., Class A(a)(b)

    26,728       37,901,640  

Facebook, Inc., Class A(b)

    110,667       25,129,156  
   

 

 

 
    63,030,796  
Internet & Direct Marketing Retail — 6.5%  

Alibaba Group Holding Ltd.—ADR(b)

    46,126       9,949,378  

Amazon.com, Inc.(b)

    11,597       31,994,035  

Booking Holdings, Inc.(b)

    2,690       4,283,395  
   

 

 

 
    46,226,808  
Security   Shares     Value  
IT Services — 5.1%  

Cognizant Technology Solutions Corp., Class A

    217,777     $ 12,374,089  

FleetCor Technologies, Inc.(b)

    6,036       1,518,235  

Visa, Inc., Class A

    115,046       22,223,436  
   

 

 

 
    36,115,760  
Machinery — 2.5%  

Fortive Corp.

    141,953       9,604,540  

Otis Worldwide Corp.

    147,987       8,414,541  
   

 

 

 
    18,019,081  
Media — 3.6%  

Comcast Corp., Class A

    461,744       17,998,781  

Fox Corp., Class A

    272,700       7,313,814  
   

 

 

 
    25,312,595  
Multiline Retail — 3.3%  

Dollar General Corp.

    44,435       8,465,312  

Dollar Tree, Inc.(b)

    159,737       14,804,425  
   

 

 

 
    23,269,737  
Oil, Gas & Consumable Fuels — 3.4%  

BP PLC — ADR

    284,859       6,642,912  

Chevron Corp.

    102,513       9,147,235  

ConocoPhillips

    191,127       8,031,156  
   

 

 

 
    23,821,303  
Personal Products — 2.0%  

Unilever NV — NY Shares

    260,598       13,882,055  
   

 

 

 
Pharmaceuticals — 4.7%  

Novo Nordisk A/S — ADR

    106,483       6,972,507  

Pfizer, Inc.

    393,514       12,867,908  

Sanofi — ADR

    268,542       13,709,069  
   

 

 

 
    33,549,484  
Professional Services — 1.3%  

Robert Half International, Inc.

    169,613       8,960,655  
   

 

 

 
Real Estate Management & Development — 0.5%  

CBRE Group, Inc., Class A(b)

    84,047       3,800,605  
   

 

 

 
Road & Rail — 1.3%  

Norfolk Southern Corp.

    50,828       8,923,872  
   

 

 

 
Semiconductors & Semiconductor Equipment — 2.3%  

NXP Semiconductors NV

    35,979       4,103,045  

Taiwan Semiconductor Manufacturing Co. Ltd. — ADR

    217,838       12,366,663  
   

 

 

 
    16,469,708  
Software — 8.5%  

CDK Global, Inc.

    202,094       8,370,734  

Microsoft Corp.(a)

    254,853       51,865,134  
   

 

 

 
    60,235,868  
Specialty Retail — 3.4%  

Lowe’s Cos., Inc.

    74,579       10,077,115  

O’Reilly Automotive, Inc.(b)

    18,841       7,944,684  

Ross Stores, Inc.

    71,558       6,099,604  
   

 

 

 
    24,121,403  
Technology Hardware, Storage & Peripherals — 7.3%  

Apple, Inc.(a)(c)

    142,306       51,913,229  
   

 

 

 
Textiles, Apparel & Luxury Goods — 0.5%  

Skechers U.S.A., Inc., Class A(b)

    123,711       3,882,051  
   

 

 

 
Tobacco — 1.9%  

Altria Group, Inc.(a)

    350,669       13,763,758  
   

 

 

 

Total Long-Term Investments — 100.3%
(Cost — $557,686,874)

 

    710,933,182  
   

 

 

 
 

 

 

34    2020 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (unaudited) (continued)

June 30, 2020

  

BlackRock Enhanced Capital and Income Fund (CII)

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

Short-Term Securities — 1.6%

 

BlackRock Liquidity Funds, T-Fund, Institutional Class,
0.11%(d)(e)

    11,280,090     $ 11,280,090  
   

 

 

 

Total Short-Term Securities — 1.6%
(Cost — $11,280,090)

 

    11,280,090  
   

 

 

 

Total Investments Before Options Written — 101.9%
(Cost — $568,966,964)

 

    722,213,272  
   

 

 

 

Options Written — (1.9)%
(Premiums Received — $11,792,720)

 

    (13,728,981
   

 

 

 

Total Investments, Net of Options Written — 100.0%
(Cost — $557,174,244)

 

    708,484,291  

Other Assets Less Liabilities — 0.0%

 

    354,060  
   

 

 

 

Net Assets — 100.0%

 

  $ 708,838,351  
   

 

 

 

 

(a) 

All or a portion of the security has been pledged and/or segregated as collateral in connection with outstanding exchange-traded options written.

(b) 

Non-income producing security.

(c) 

All or a portion of the security has been pledged as collateral in connection with outstanding OTC derivatives.

(d) 

Annualized 7-day yield as of period end.

 
(e) 

Investments in issuers considered to be an affiliate/affiliates of the Trust during the six months ended June 30, 2020 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliated Issuer    Shares
Held at
12/31/19
     Shares
Purchased
     Shares
Sold
     Shares
Held at
06/30/20
    

Value at

06/30/20

    
Income
     Net
Realized
Gain (Loss)
 (a)
    

Change in

Unrealized
Appreciation

(Depreciation)

 

BlackRock Liquidity Funds, T-Fund,
Institutional Class

     4,423,595        6,856,495 (b)              11,280,090      $ 11,280,090      $ 19,932      $      $  
              

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes net capital gain distributions, if applicable.

 
  (b) 

Represents net shares purchased (sold).

 

For Trust compliance purposes, the Trust’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

Derivative Financial Instruments Outstanding as of Period End

Exchange-Traded Options Written

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call  

Alphabet, Inc., Class A

     52          07/02/20        USD     1,450.00        USD     7,374        $ (9,360

Altria Group, Inc.

     195          07/02/20        USD     40.50        USD     765          (780

Amazon.com, Inc.

     14          07/02/20        USD     2,475.00        USD     3,862          (397,390

BP PLC — ADR

     92          07/02/20        USD     25.00        USD     215          (276

Bank of America Corp.

     286          07/02/20        USD     26.50        USD     679          (429

Bank of America Corp.

     158          07/02/20        USD     25.00        USD     375          (869

Bank of America Corp.

     81          07/02/20        USD     25.50        USD     192          (202

Cisco Systems, Inc.

     219          07/02/20        USD     47.00        USD     1,021          (5,256

Cognizant Technology Solutions Corp., Class A

     73          07/02/20        USD     55.00        USD     415          (16,060

Fox Corp., Class A

     486          07/02/20        USD     29.00        USD     1,303          (109,350

General Motors Co.

     356          07/02/20        USD     27.00        USD     901          (2,314

Microsoft Corp.

     172          07/02/20        USD     185.00        USD     3,500          (320,780

Norfolk Southern Corp.

     85          07/02/20        USD     175.00        USD     1,492          (30,388

Skechers U.S.A., Inc., Class A

     130          07/02/20        USD     29.50        USD     408          (26,325

Taiwan Semiconductor Manufacturing Co. Ltd. — ADR

     51          07/02/20        USD     56.50        USD     290          (3,442

Taiwan Semiconductor Manufacturing Co. Ltd. — ADR

     40          07/02/20        USD     53.50        USD     227          (12,800

Taiwan Semiconductor Manufacturing Co. Ltd. — ADR

     20          07/02/20        USD     54.50        USD     114          (4,600

U.S. Bancorp

     173          07/02/20        USD     36.00        USD     637          (19,809

Visa, Inc., Class A

     2          07/02/20        USD     195.00        USD     39          (153

Alibaba Group Holding Ltd. — ADR

     25          07/10/20        USD     210.00        USD     539          (20,000

Altria Group, Inc.

     196          07/10/20        USD     40.00        USD     769          (8,526

 

 

SCHEDULES OF INVESTMENTS      35  


Schedule of Investments  (unaudited) (continued)

June 30, 2020

  

BlackRock Enhanced Capital and Income Fund (CII)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call (continued)  

Anthem, Inc.

     77          07/10/20        USD     300.00        USD     2,025        $ (3,619

Apple, Inc.

     193          07/10/20        USD     337.50        USD     7,041          (544,260

Bank of America Corp.

     456          07/10/20        USD     26.00        USD     1,083          (4,560

Bank of America Corp.

     286          07/10/20        USD     27.00        USD     679          (1,144

Bank of America Corp.

     59          07/10/20        USD     29.50        USD     140          (118

Berkshire Hathaway, Inc., Class B

     40          07/10/20        USD     185.00        USD     714          (1,440

BP PLC — ADR

     114          07/10/20        USD     26.50        USD     266          (342

BP PLC — ADR

     83          07/10/20        USD     28.00        USD     194          (498

Chevron Corp.

     193          07/10/20        USD     106.00        USD     1,722          (1,737

Cisco Systems, Inc.

     276          07/10/20        USD     47.00        USD     1,287          (16,284

Cognizant Technology Solutions Corp., Class A

     264          07/10/20        USD     59.00        USD     1,500          (12,540

Cognizant Technology Solutions Corp., Class A

     21          07/10/20        USD     57.00        USD     119          (2,730

Comcast Corp., Class A

     907          07/10/20        USD     43.00        USD     3,535          (1,814

Comcast Corp., Class A

     362          07/10/20        USD     41.50        USD     1,411          (3,620

ConocoPhillips

     120          07/10/20        USD     52.00        USD     504          (840

Facebook, Inc., Class A

     317          07/10/20        USD     237.50        USD     7,198          (51,037

General Motors Co.

     119          07/10/20        USD     29.50        USD     301          (773

JPMorgan Chase & Co.

     123          07/10/20        USD     114.00        USD     1,157          (799

Microsoft Corp.

     343          07/10/20        USD     187.50        USD     6,980          (583,100

Microsoft Corp.

     142          07/10/20        USD     200.00        USD     2,890          (75,615

Pfizer, Inc.

     85          07/10/20        USD     34.50        USD     278          (1,190

Ross Stores, Inc.

     11          07/10/20        USD     105.00        USD     94          (1,650

Taiwan Semiconductor Manufacturing Co. Ltd. — ADR

     20          07/10/20        USD     57.00        USD     114          (1,750

U.S. Bancorp

     179          07/10/20        USD     43.00        USD     659          (1,074

UnitedHealth Group, Inc.

     135          07/10/20        USD     312.50        USD     3,982          (12,487

Verizon Communications, Inc.

     139          07/10/20        USD     57.00        USD     766          (1,668

Verizon Communications, Inc.

     61          07/10/20        USD     58.00        USD     336          (366

Visa, Inc., Class A

     94          07/10/20        USD     200.00        USD     1,816          (7,661

Walmart, Inc.

     157          07/10/20        USD     127.00        USD     1,881          (1,334

AES Corp.

     502          07/17/20        USD     14.00        USD     727          (42,670

Alibaba Group Holding Ltd. — ADR

     115          07/17/20        USD     215.00        USD     2,481          (73,025

Ally Financial, Inc.

     933          07/17/20        USD     17.00        USD     1,850          (303,225

Ally Financial, Inc.

     150          07/17/20        USD     24.00        USD     297          (2,625

Alphabet, Inc., Class A

     34          07/17/20        USD     1,380.00        USD     4,821          (193,290

Alphabet, Inc., Class A

     31          07/17/20        USD     1,465.00        USD     4,396          (33,945

Altria Group, Inc.

     488          07/17/20        USD     42.50        USD     1,915          (8,540

Amazon.com, Inc.

     14          07/17/20        USD     2,460.00        USD     3,862          (424,865

Anthem, Inc.

     14          07/17/20        USD     290.00        USD     368          (1,127

Apple, Inc.

     315          07/17/20        USD     320.00        USD     11,491          (1,415,138

Axalta Coating Systems Ltd.

     156          07/17/20        USD     23.00        USD     352          (9,360

BP PLC — ADR

     182          07/17/20        USD     26.00        USD     424          (2,275

BP PLC — ADR

     83          07/17/20        USD     29.00        USD     194          (830

Bank of America Corp.

     150          07/17/20        USD     25.00        USD     356          (7,725

Bank of America Corp.

     46          07/17/20        USD     26.00        USD     109          (1,288

Bank of America Corp.

     285          07/17/20        USD     27.00        USD     677          (4,417

Berkshire Hathaway, Inc., Class B

     41          07/17/20        USD     185.00        USD     732          (3,505

Biogen, Inc.

     56          07/17/20        USD     335.00        USD     1,498          (5,320

Booking Holdings, Inc.

     3          07/17/20        USD     1,750.00        USD     478          (3,960

CBRE Group, Inc., Class A

     54          07/17/20        USD     45.00        USD     244          (10,935

CDK Global, Inc.

     354          07/17/20        USD     45.00        USD     1,466          (7,965

Chevron Corp.

     117          07/17/20        USD     97.50        USD     1,044          (5,674

Cisco Systems, Inc.

     146          07/17/20        USD     46.00        USD     681          (20,148

Cognizant Technology Solutions Corp., Class A

     84          07/17/20        USD     55.00        USD     477          (21,840

Comcast Corp., Class A

     439          07/17/20        USD     37.50        USD     1,711          (89,995

ConocoPhillips

     205          07/17/20        USD     50.00        USD     861          (2,357

Corteva, Inc.

     418          07/17/20        USD     29.00        USD     1,120          (10,450

D.R. Horton, Inc.

     306          07/17/20        USD     60.00        USD     1,697          (11,934

Dollar Tree, Inc.

     134          07/17/20        USD     95.00        USD     1,242          (22,445

E*Trade Financial Corp.

     337          07/17/20        USD     40.00        USD     1,676          (337,843

Facebook, Inc., Class A

     93          07/17/20        USD     250.00        USD     2,112          (7,812

Facebook, Inc., Class A

     43          07/17/20        USD     240.00        USD     976          (9,761

Fortive Corp.

     258          07/17/20        USD     60.00        USD     1,746          (212,205

 

 

36    2020 BLACKROCK SEMI-ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (unaudited) (continued)

June 30, 2020

   BlackRock Enhanced Capital and Income Fund (CII)

 

Exchange-Traded Options Written (continued)

 

Description    Number of
Contracts
       Expiration
Date
       Exercise
Price
       Notional
Amount (000)
       Value  
Call (continued)  

General Motors Co.

     401          07/17/20        USD     27.00        USD     1,015        $ (20,652

Hubbell, Inc.

     122          07/17/20        USD     125.00        USD     1,529          (48,495

JPMorgan Chase & Co.

     96          07/17/20        USD     115.00        USD     903          (1,296

Laboratory Corp. of America Holdings

     491          07/17/20        USD     180.00        USD     8,156          (38,053

Lowe’s Cos., Inc.

     272          07/17/20        USD     125.00        USD     3,675          (303,960

Lowe’s Cos., Inc.

     44          07/17/20        USD     120.00        USD     595          (68,200

Lowe’s Cos., Inc.

     43          07/17/20        USD     130.00        USD     581          (30,423

Microsoft Corp.

     289          07/17/20        USD     190.00        USD     5,881          (400,265

Norfolk Southern Corp.

     123          07/17/20        USD     190.00        USD     2,160          (28,598

Norfolk Southern Corp.

     61          07/17/20        USD     185.00        USD     1,071          (14,335

Novo Nordisk A/S — ADR

     339          07/17/20        USD     70.00        USD     2,220          (9,322

NXP Semiconductors NV

     126          07/17/20        USD     105.00        USD     1,437          (142,065

Otis Worldwide Corp.

     238          07/17/20        USD     60.00        USD     1,353          (14,875

Pfizer, Inc.

     928          07/17/20        USD     38.00        USD     3,035          (3,248

Quanta Services, Inc.

     599          07/17/20        USD     42.00        USD     2,350          (19,468

Raymond James Financial, Inc.

     169          07/17/20        USD     65.00        USD     1,163          (88,725

Robert Half International, Inc.

     674          07/17/20        USD     50.00        USD     3,561          (259,490

Ross Stores, Inc.

     103          07/17/20        USD     90.00        USD     878          (14,677

Ross Stores, Inc.

     11          07/17/20        USD     105.00        USD     94          (247

Sanofi — ADR

     301          07/17/20        USD     55.00        USD     1,537          (6,772

Skechers U.S.A., Inc., Class A

     219          07/17/20        USD     35.00        USD     687          (6,022

Taiwan Semiconductor Manufacturing Co. Ltd. — ADR

     61          07/17/20        USD     55.00        USD     346          (15,403

U.S. Bancorp

     146          07/17/20        USD     40.00        USD     538          (8,176

UnitedHealth Group, Inc.

     8          07/17/20        USD     300.00        USD     236          (5,480

Verizon Communications, Inc.

     179          07/17/20        USD     57.50        USD     987          (2,685

Visa, Inc., Class A

     94          07/17/20        USD     195.00        USD     1,816          (31,584

Walmart, Inc.

     284          07/17/20        USD     125.00        USD     3,402          (11,928

Alibaba Group Holding Ltd. — ADR

     13          07/24/20        USD     235.00        USD     280          (1,703

Altria Group, Inc.

     488          07/24/20        USD     43.50        USD     1,915          (39,528

Anthem, Inc.

     77          07/24/20        USD     300.00        USD     2,025          (4,158

Apple, Inc.

     208          07/24/20        USD     355.00        USD     7,588          (346,840

Bank of America Corp.

     50          07/24/20        USD     25.50        USD     119          (2,450

Bank of America Corp.

     38          07/24/20        USD     30.50        USD     90          (133

Bank of America Corp.

     29          07/24/20        USD     27.00        USD     69          (652

Berkshire Hathaway, Inc., Class B

     222          07/24/20        USD     185.00        USD     3,963          (34,410

Biogen, Inc.

     14          07/24/20        USD     280.00        USD     375          (9,310

Booking Holdings, Inc.

     7          07/24/20        USD     1,650.00        USD     1,115          (35,210

BP PLC — ADR

     186          07/24/20        USD     26.00        USD     434          (4,185

Chevron Corp.

     48          07/24/20        USD     94.00        USD     428          (9,024

Cisco Systems, Inc.

     147          07/24/20        USD     48.50        USD     686          (8,085

Cognizant Technology Solutions Corp., Class A

     141          07/24/20        USD     56.50        USD     801          (34,545

Comcast Corp., Class A

     419          07/24/20        USD     42.00        USD     1,633          (11,103

ConocoPhillips

     205          07/24/20        USD     50.50        USD     861          (5,022

Dollar General Corp.

     275          07/24/20        USD     195.00        USD