As
filed with the Securities and Exchange Commission on February 10,
2009
Securities
Act File No. 333-
Investment
Company Act File No. 811-21729
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
_____________
FORM
N-14
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
o
Post-Effective Amendment No. __
(Check
appropriate box or boxes)
BLACKROCK
GLOBAL OPPORTUNITIES EQUITY TRUST
(Exact
name of registrant as specified in charter)
100
Bellevue Parkway
Wilmington,
Delaware 19809
(Address
of Principal Executive Offices)
Telephone
Number: (800) 882-0052
(Area
Code and Telephone Number)
Donald C.
Burke
President
and Chief Executive Officer
BlackRock
Global Opportunities Equity Trust
800
Scudders Mill Road
Plainsboro,
New Jersey 08536
(Name
and Address of Agent for Service)
_____________
Copies
to:
|
Michael
K. Hoffman, Esq.
Skadden,
Arps, Slate, Meagher & Flom LLP
4
Times Square
New
York, NY 10036-6522
|
Howard
B. Surloff, Esq.
BlackRock
Advisors, LLC
40
East 52nd Street
New
York, NY 10022
|
Approximate
Date of Proposed Offering: As soon as practicable after this
Registration Statement is declared effective.
CALCULATION
OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
|
Title of Securities Being
Registered
|
|
Amount
Being
Registered
(1)
|
|
Proposed
Maximum
Offering
Price
per Unit (1)(2)
|
|
Proposed
Maximum
Aggregate
Offering
Price (1)
|
|
Amount
of
Registration
Fee
|
|
Common
shares, $0.001 par value
|
|
59,737.15 shares
|
|
$16.74
|
|
$1,000,000.00
|
|
$39.30
|
(1) Estimated
solely for the purpose of calculating the registration fee.
(2) Net
asset value per share or common stock on February 6, 2009.
The
Registrant hereby amends this registration statement on such date or dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
This
Registration Statement is organized as follows:
|
1.
|
Letter
to Shareholders of BlackRock Global Equity Income Trust ("BFD"), BlackRock
World Investment Trust ("BWC") and BlackRock Global Opportunities Equity
Trust ("BOE"), each a registered investment company and statutory trust
organized under the laws of the State of
Delaware.
|
|
2.
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Questions
and Answers to Shareholders of BFD, BWC and
BOE.
|
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3.
|
Notice
of Joint Special Meeting of Shareholders of BFD, BWC and
BOE.
|
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4.
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Joint
Proxy Statement/Prospectus for BFD, BWC and
BOE.
|
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5.
|
Reorganization
Statement of Additional Information regarding the proposed Reorganizations
of BFD and BWC into BOE.
|
|
6.
|
Part
C: Other Information.
|
BLACKROCK
GLOBAL EQUITY INCOME TRUST
BLACKROCK
WORLD INVESTMENT TRUST
BLACKROCK
GLOBAL OPPORTUNITIES EQUITY TRUST
100
Bellevue Parkway
Wilmington,
Delaware 19809
(800)
882-0052
March 30,
2009
Dear
Shareholder:
You are
cordially invited to attend a joint special shareholder meeting (the "Special
Meeting") of BlackRock Global Equity Income Trust ("BFD"), BlackRock World
Investment Trust ("BWC") and BlackRock Global Opportunities Equity Trust
("BOE"), each a Delaware statutory trust, to be held on Tuesday, May 5,
2009. Before the Special Meeting, I would like to provide you with
additional background and ask for your vote on important proposals affecting
BFD, BWC and BOE.
The
proposals you will be asked to consider at the Special Meeting, as described in
the enclosed Joint Proxy Statement/Prospectus, are the proposed reorganizations
(each, a "Reorganization" and, collectively, the "Reorganizations") of BFD and
BWC into BOE, a fund with an investment objective and investment policies
similar, but not identical, to those of BFD and BWC, and the issuance of
additional common shares of BOE (the "Issuance").
The Board
of Trustees of each fund believes the Reorganizations and Issuance are in the
best interests of BFD, BWC and BOE and their shareholders, and unanimously
recommend that you vote "
FOR
" the proposed
Reorganizations and Issuance, as applicable.
The
enclosed materials explain these proposals in more detail, and I encourage you
to review them carefully. As a shareholder, your vote is important,
and we hope that you will respond today to ensure that your common shares will
be represented at the Special Meeting. You may vote using one of the
methods below by following the instructions on your proxy card:
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·
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By
touch-tone telephone;
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·
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By
returning the enclosed proxy card in the postage-paid envelope;
or
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·
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In
person at the Special Meeting.
|
If you do
not vote using one of these methods, you may be called
by ,
our proxy solicitor, to vote your common shares over the phone.
As
always, we appreciate your support.
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|
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Sincerely,
|
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|
|
Donald
C. Burke
President
and Chief Executive Officer of BlackRock Global Equity Income
Trust
BlackRock
World Investment Trust
BlackRock
Global Opportunities Equity Trust
|
|
Please
vote now. Your vote is important.
|
|
To avoid the wasteful and
unnecessary expense of further solicitation, we urge you
to
indicate your voting instructions on the enclosed proxy card, date and
sign it and return it promptly in the envelope provided, or record your
voting instructions by telephone or via the Internet, no matter how large
or small your holdings may be. If you submit a properly
executed proxy but do not indicate how you wish your common shares to be
voted, your common shares will be voted "
For
" the Reorganizations
and Issuance, as applicable. If your common shares are held
through a broker, you must provide voting instructions to your broker
about how to vote your common shares in order for your broker to vote your
common shares at the Special
Meeting.
|
March
30, 2009
IMPORTANT
NOTICE
TO
SHAREHOLDERS OF
BLACKROCK
GLOBAL EQUITY INCOME TRUST
BLACKROCK
WORLD INVESTMENT TRUST
BLACKROCK
GLOBAL OPPORTUNITIES EQUITY TRUST
QUESTIONS
& ANSWERS
Although
we recommend that you read the complete Joint Proxy Statement/Prospectus, we
have provided for your convenience a brief overview of the issues to be voted
on.
Q:
Why
is a shareholder meeting being held?
A:
Shareholders of BlackRock Global
Equity Income Trust ("BFD") and BlackRock World Investment Trust
("BWC")
: You are being asked to vote on a reorganization
(each, a "Reorganization" and, collectively, the "Reorganizations") of BFD and
BWC (each such fund being referred to herein as a "Target Fund" and together as
the "Target Funds") into BlackRock Global Opportunities Equity Trust ("BOE" or
the "Acquiring Fund" and, together with BFD and BWC, each a "Fund" and,
collectively, the "Funds"), a closed-end fund that pursues an investment
objective and has investment policies that are similar, but not identical, to
those of BFD and BWC and has the same investment adviser as BFD and
BWC.
Shareholders of BlackRock Global
Opportunities Equity Trust
: You are being asked to vote on the
issuance of additional common shares of the Acquiring Fund in connection with
each Reorganization.
Q:
Why
is each Reorganization being recommended?
A:
The
Boards of Trustees of the Funds have determined that the Reorganizations will
benefit the common shareholders of each of the Target Funds and the Acquiring
Fund. As a result of the Reorganizations, it is anticipated that
common shareholders of each Fund will experience a reduced annual operating
expense ratio, as certain fixed administrative costs will be spread across the
combined fund's larger asset base. If the Reorganizations are not
approved, the investment adviser anticipates that it would recommend to the
Board of Trustees of BFD that it substantially lower its dividend in order to
reduce or eliminate the amount of capital returned to investors in connection
with its dividend.
The investment objectives of BFD and
the Acquiring Fund are the same and the investment objectives of BWC
and the Acquiring Fund are substantially the same, but not
identical. The investment objective of each of BFD and the Acquiring
Fund is primarily to seek current income and current gains, with a secondary
objective of long-term capital appreciation.
The investment objective
of BWC is primarily to seek current income, dividends and gains, with a
secondary objective of long-term capital appreciation. The Funds'
investment objectives are not a fundamental policy and may be changed without
prior shareholder approval. As of the date of the Special Meeting,
each Fund will seek to achieve its investment objective by investing primarily
in equity securities issued by companies located in countries throughout the
world and may use an option writing strategy to enhance current gains that will
generally focus on individual common stocks. The Funds have the same
investment adviser.
Q:
How
will the Reorganizations be effected?
A:
Assuming
Target Fund shareholders approve the Reorganizations of the Target Funds and
shareholders of the Acquiring Fund approve the issuance of additional common
shares of the Acquiring Fund, the assets and liabilities of the Target Funds
will be combined with those of the Acquiring Fund, and the Target Funds will
dissolve.
Shareholders of the Target
Funds
: You will become a shareholder of the Acquiring
Fund. You will receive newly-issued common shares of the Acquiring
Fund, the aggregate net asset value (not the market value) of which will equal
the aggregate net asset value (not the market value) of the common shares of the
particular Target Fund you held immediately prior to the Reorganization, less
the costs of the Reorganization (though you may receive cash for fractional
shares).
Shareholders of the Acquiring
Fund
: You will remain a shareholder of the Acquiring
Fund.
Q:
At
what prices have common shares of the Target Funds and the Acquiring Fund
historically traded?
A:
The
common shares of BFD have in the past generally traded at a greater discount to
net asset value than the common shares of the Acquiring Fund and the common
shares of BWC have generally traded at a similar discount to net asset value to
the common shares of the Acquiring Fund. Prior to
April , 2009, however, BFD had a policy of
seeking to achieve its investment objective by investing primarily in a
diversified portfolio of domestic and foreign common stocks that pay dividends
and writing (selling) index call options with respect to a portion of its common
stock portfolio. On April , 2009, BFD
changed its investment policies and began seeking to achieve its investment
objective by investing primarily in equity securities issued by companies
located throughout the world with no emphasis on their dividend rate and writing
(selling) options that generally focus on individual common stocks instead of
indices. Accordingly, discount information for the period prior to
April , 2009 may not reflect BFD's market
price and discount history had BFD employed its current investment policies
during that period. In addition, as noted above, if BFD is not
reorganized into the Acquiring Fund, the investment adviser anticipates that it
would recommend to BFD's Board of Trustees that the dividend rate for BFD be
reduced substantially, which may cause the common shares of BFD to trade at a
greater discount to net asset value than they historically have
traded. There can be no assurance that, after the Reorganizations,
common shares of the combined fund will trade at, above or below net asset
value.
Q:
Will
I have to pay any sales load, commission or other similar fees in connection
with the Reorganizations?
A:
You will
pay no sales loads or commissions in connection with the
Reorganizations. However, regardless of whether the Reorganizations
are completed, the costs associated with the Reorganizations, including the
costs associated with the shareholder meeting, will be borne directly by the
respective Fund incurring the expense or allocated among the Funds based upon
some reasonable methodology, as appropriate. Such costs are estimated
to be $906,408 in the aggregate, of which $238,992 is attributable to BOE,
$316,585 is attributable to BFD and $350,831 is attributable to
BWC.
Q:
Will
I have to pay any U.S. federal taxes as a result of the
Reorganizations?
A:
Each of
the Reorganizations is intended to qualify as a "reorganization" within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended. If a Reorganization so qualifies, in general, shareholders
of the respective Target Fund will recognize no gain or loss for U.S. federal
income tax purposes upon the exchange of their Target Fund common shares solely
for Acquiring Fund Common Shares pursuant to the
Reorganization. Additionally, such a Target Fund will recognize no
gain or loss for U.S. federal income tax purposes as a result of the transfer of
all of its assets and liabilities in exchange for the Acquiring Fund Common
Shares or as a result of their dissolution. Neither the Acquiring
Fund nor its shareholders will recognize any gain or loss for U.S. federal
income tax purposes pursuant to either Reorganization.
Prior to the closing date of the
transactions with respect to the Reorganizations (the "Closing Date"), each of
the Target Funds may declare a distribution to its shareholders that, together
with all previous distributions, will have the effect of distributing to each
respective Target Fund's shareholders all of the respective Target Fund's
investment company taxable income (computed without regard to the deduction for
dividends paid) and net capital gains, if any, through the Closing
Date. Such distributions will be taxable to the Target Fund
shareholders.
In connection with each Reorganization,
each Target Fund may sell a portion of its portfolio assets. The tax impact of
such sales will depend on the difference between the price at which such
portfolio assets are sold and the Target Fund's basis in such
assets. Any capital gains that a Target Fund recognizes in these
sales will be distributed to such Target Fund's shareholders as a capital gain
dividend (to the extent of net capital gain, i.e. the excess of net long-term
capital gain over net short-term capital loss) and/or ordinary dividends (to the
extent of net realized short-term capital gain) during or with respect to the
year of sale, and such distributions will be taxable to
shareholders.
Q:
What
happens if shareholders of one Target Fund do not approve its Reorganization but
shareholders of the other Target Fund do approve its
Reorganization?
A:
An
unfavorable vote on a proposed Reorganization by the shareholders of one Target
Fund will not affect the implementation of a Reorganization by the other Target
Fund, if such Reorganization is approved by the shareholders of the other Target
Fund and the issuance of additional common shares is approved by the
shareholders of the Acquiring Fund with respect to the other Target
Fund. However, if the Reorganization of BFD is not approved, the
investment adviser anticipates that it would recommend to the Board of Trustees
of BFD that BFD substantially lower its dividend in order to reduce or eliminate
the amount of capital returned to investors in connection with each
dividend.
Q:
What
happens if shareholders of the Acquiring Fund do not approve the issuance of
additional common shares in connection with the Reorganization of one Target
Fund but do approve the issuance of additional common shares in connection with
the Reorganization of the other Target Fund?
A:
An
unfavorable vote by shareholders of the Acquiring Fund on the issuance of
additional common shares in connection with the Reorganization of one Target
Fund will not affect the implementation of a Reorganization by the other Target
Fund, if such Reorganization is approved by the shareholders of the other Target
Fund and the issuance of additional common shares is approved by the
shareholders of the Acquiring Fund with respect to the other Target
Fund. However, if the Reorganization of BFD is not approved, the
investment adviser anticipates that it would recommend to the Board of Trustees
of BFD that it substantially lower its dividend in order to reduce or eliminate
the amount of capital returned to investors in connection with each
dividend.
Q:
Why
is the vote of common shareholders of the Acquiring Fund being
solicited?
A:
Although
the Acquiring Fund will continue its legal existence and operations after the
Reorganizations, the rules of the New York Stock Exchange (on which the
Acquiring Fund's common shares are listed) require the Acquiring Fund's common
shareholders to approve the issuance of additional common shares in connection
with the Reorganizations. If the issuance of additional common shares
of the Acquiring Fund is not approved, none of the Reorganizations will
occur.
Q:
How
does the Board of Trustees of my Fund suggest that I vote?
A:
After
careful consideration, the Board of Trustees of your Fund recommends that you
vote "
FOR
" each of the
items proposed for your Fund.
Q:
How
do I vote my proxy?
A:
You may
cast your vote by mail, phone, Internet or in person at the Special
Meeting. To vote by mail, please mark your vote on the enclosed proxy
card and sign, date and return the card in the postage-paid envelope
provided. If you choose to vote by phone or Internet, please refer to
the instructions found on the proxy card accompanying this Joint Proxy
Statement/Prospectus. To vote by phone or Internet, you will need the
"control number" that appears on the proxy card.
Q:
Whom
do I contact for further information?
A:
You may
contact your financial adviser for further information. You may also
call ,
the Funds' proxy solicitor,
at
.
BLACKROCK
GLOBAL EQUITY INCOME TRUST
BLACKROCK
WORLD INVESTMENT TRUST
BLACKROCK
GLOBAL OPPORTUNITIES EQUITY TRUST
100
Bellevue Parkway
Wilmington,
Delaware 19809
(800)
882-0052
NOTICE
OF JOINT SPECIAL MEETING OF SHAREHOLDERS
TO
BE HELD ON TUESDAY, MAY 5, 2009
Notice is
hereby given that a joint special meeting of shareholders (the "Special
Meeting") of BlackRock Global Equity Income Trust ("BFD"), BlackRock World
Investment Trust ("BWC") and BlackRock Global Opportunities Equity Trust ("BOE")
will be held at the offices of BlackRock, Inc., 800 Scudders Mill Road,
Plainsboro, NJ 08536, on Tuesday, May 5, 2009 at 9:00 a.m. for the following
purposes:
For shareholders of BlackRock Global
Equity Income Trust
:
|
|
|
a.
|
To
approve an Agreement and Plan of Reorganization between BFD and BOE, the
termination of BFD's registration under the Investment Company Act of 1940
(the "1940 Act") and the dissolution of BFD under Delaware
law;
|
For shareholders of BlackRock World
Investment Trust
:
|
|
b.
|
To
approve an Agreement and Plan of Reorganization between BWC and BOE, the
termination of BWC's registration under the 1940 Act and the dissolution
of BWC under Delaware law;
|
|
|
2.
|
Issuance
of Common Shares
|
For shareholders of BlackRock Global
Opportunities Equity Trust
:
|
|
a.
|
To
approve the issuance of additional common shares of BOE in connection with
an Agreement and Plan of Reorganization between BFD and BOE;
and
|
|
|
b.
|
To
approve the issuance of additional common shares of BOE in connection with
an Agreement and Plan of Reorganization between BWC and
BOE.
|
Shareholders
of record as of the close of business on March 12, 2009 are entitled to vote at
the Special Meeting or any adjournment thereof.
THE
BOARDS OF TRUSTEES OF BFD, BWC AND BOE REQUEST THAT YOU VOTE YOUR COMMON SHARES
BY INDICATING YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATING AND
SIGNING SUCH PROXY CARD AND RETURNING IT IN THE ENVELOPE PROVIDED, WHICH IS
ADDRESSED FOR YOUR CONVENIENCE AND NEEDS NO POSTAGE IF MAILED IN THE UNITED
STATES, OR BY RECORDING YOUR VOTING INSTRUCTIONS BY TELEPHONE OR VIA THE
INTERNET.
THE
BOARDS OF TRUSTEES OF BFD AND BWC RECOMMEND THAT YOU CAST YOUR
VOTE:
|
|
-
|
FOR
THE REORGANIZATION OF YOUR FUND PURSUANT TO AN AGREEMENT AND PLAN OF
REORGANIZATION AS DESCRIBED IN THE JOINT PROXY STATEMENT/PROSPECTUS, THE
TERMINATION OF YOUR FUND'S REGISTRATION UNDER THE 1940 ACT AND THE
DISSOLUTION OF YOUR FUND UNDER
DELAWARE LAW.
|
THE
BOARD OF TRUSTEES OF BOE RECOMMENDS THAT YOU CAST YOUR VOTE:
|
|
−
|
FOR
THE ISSUANCE OF ADDITIONAL COMMON SHARES OF YOUR FUND IN CONNECTION WITH
EACH AGREEMENT AND PLAN OF REORGANIZATION AS DESCRIBED IN THE JOINT PROXY
STATEMENT/PROSPECTUS.
|
IN
ORDER TO AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION, WE ASK THAT YOU
MAIL YOUR PROXY CARD OR RECORD YOUR VOTING INSTRUCTIONS BY TELEPHONE OR VIA THE
INTERNET PROMPTLY.
|
|
|
For
the Boards of Trustees,
|
|
|
|
Donald
C. Burke
President
and Chief Executive
Officer
of BFD, BWC and BOE
|
|
|
|
March
30, 2009
|
YOUR
VOTE IS IMPORTANT.
PLEASE
VOTE PROMPTLY BY SIGNING AND RETURNING THE
ENCLOSED
PROXY CARD OR BY RECORDING YOUR VOTING INSTRUCTIONS BY TELEPHONE
OR
VIA THE INTERNET, NO MATTER HOW MANY COMMON SHARES YOU OWN.
The information contained in this Joint
Proxy Statement/Prospectus
is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these securities
and it is not soliciting an of
f
er to buy these securities in any state
where the offer or sale is not permitted.
S
ubject to completion, dated
February 10, 2009
JOINT
PROXY STATEMENT/PROSPECTUS
BLACKROCK
GLOBAL EQUITY INCOME TRUST
BLACKROCK
WORLD INVESTMENT TRUST
BLACKROCK
GLOBAL OPPORTUNITIES EQUITY TRUST
100
Bellevue Parkway
Wilmington,
Delaware 19809
(800)
882-0052
JOINT
SPECIAL MEETING OF SHAREHOLDERS
May
5, 2009
This
Joint Proxy Statement/Prospectus is furnished to you as a shareholder of
BlackRock Global Equity Income Trust ("BFD"), BlackRock World Investment Trust
("BWC") and/or BlackRock Global Opportunities Equity Trust ("BOE"), each a
registered, diversified, closed-end management investment company under the
Investment Company Act of 1940 (the "1940 Act"). A joint special
meeting of shareholders of BFD, BWC and BOE (the "Special Meeting") will be held
at the offices of BlackRock, Inc. ("BlackRock"), 800 Scudders Mill Road,
Plainsboro, NJ 08536, on Tuesday, May 5, 2009 at 9:00 a.m. to consider the items
listed below and discussed in greater detail elsewhere in this Joint Proxy
Statement/Prospectus. If you are unable to attend the Special Meeting
or any adjournment thereof, the Boards of Trustees of BFD, BWC and BOE request
that you vote your common shares by completing and returning the enclosed proxy
card or by recording your voting instructions by telephone or via the
Internet. The approximate mailing date of this Joint Proxy
Statement/Prospectus and accompanying form of proxy is March 30,
2009.
The
purposes of the Special Meeting are:
1. Reorganizations
For shareholders of BlackRock Global
Equity Income Trust
:
|
|
|
a.
|
To
approve an Agreement and Plan of Reorganization between BFD and BOE, the
termination of BFD's registration under the 1940 Act, and the dissolution
of BFD under Delaware law;
|
For shareholders of BlackRock World
Investment Trust
:
|
|
b.
|
To
approve an Agreement and Plan of Reorganization between BWC and BOE, the
termination of BWC's registration under the 1940 Act and the dissolution
of BWC under Delaware law;
|
2. Issuance of Common
shares
For shareholders of BlackRock Global
Opportunities Equity Trust
:
|
|
|
a.
|
To
approve the issuance of additional common shares of BOE in connection with
an Agreement and Plan of Reorganization between BFD and BOE;
and
|
|
|
|
b.
|
To
approve the issuance of additional common shares of BOE in connection with
an Agreement and Plan of Reorganization between BWC and
BOE.
|
BFD and
BWC are sometimes referred to herein individually as a "Target Fund" and,
collectively, as the "Target Funds," and BOE is sometimes referred to herein as
the "Acquiring Fund." The Target Funds and the Acquiring Fund are
each sometimes referred to herein as a "Fund" and, collectively, as the
"Funds." Each Agreement and Plan of Reorganization is sometimes
referred to herein individually as a "Reorganization Agreement" and,
collectively, as the "Reorganization Agreements." The Reorganization
Agreements that Target Fund shareholders are being asked to consider involve
transactions that will be referred to in this Joint Proxy Statement/Prospectus
individually as a "Reorganization" and, collectively, as the
"Reorganizations."
The
Reorganizations seek to combine three similar, but not identical, Funds to
achieve certain economies of scale and other operational efficiencies for each
Target Fund. The investment objective of each of BFD and the
Acquiring Fund is primarily to seek current income and current gains, with a
secondary objective of long-term capital appreciation.
The investment objective
of BWC is primarily to seek current income, dividends and gains, with a
secondary objective of long-term capital appreciation. The Funds'
investment objectives are not a fundamental policy and may be changed without
prior shareholder approval. As of the date of the Special Meeting,
each Fund will seek to achieve its objectives by investing primarily in equity
securities issued by companies located in countries throughout the world and
utilizing an option writing strategy to enhance current gains that will
generally focus on individual common stocks.
In each
Reorganization, the Acquiring Fund will acquire substantially all of the assets
and assume substantially all of the liabilities of each Target Fund in exchange
for an equal aggregate value of newly-issued common shares of the Acquiring
Fund, par value $0.001 per share ("Acquiring Fund Common
Shares"). Each Target Fund will distribute Acquiring Fund Common
Shares to common shareholders of such Target Fund, and will then terminate its
registration under the 1940 Act and dissolve under Delaware law. The
aggregate net asset value of Acquiring Fund Common Shares received by Target
Fund investors in each Reorganization will equal the aggregate net asset value
of Target Fund common shares held immediately prior to such Reorganization, less
the costs of such Reorganization (though common shareholders may receive cash
for their fractional common shares). The Acquiring Fund will continue
to operate after the Reorganizations as a registered, diversified, closed-end
investment company with the investment objective and policies described in this
Joint Proxy Statement/Prospectus.
In
connection with each Reorganization, common shareholders of the Acquiring Fund
are being asked to approve the issuance of additional Acquiring Fund Common
Shares.
The Board
of Trustees of each Fund has determined that including these proposals in one
Joint Proxy Statement/Prospectus will reduce costs and is in the best interests
of each Fund's shareholders.
In the
event that shareholders of a Target Fund do not approve its Reorganization, such
Target Fund would continue to exist and operate on a stand alone
basis. In the event Acquiring Fund common shareholders do not approve
the issuance of Acquiring Fund Common Shares in connection with a
Reorganization, then the affected Target Fund would continue to exist and
operate on a stand alone basis. If BFD is not reorganized into the
Acquiring Fund, the investment adviser anticipates that it would recommend to
the Board of Trustees of BFD that it substantially lower its dividend in order
to reduce or eliminate the amount of capital returned to investors in connection
with each dividend. An unfavorable vote by one of the Target Funds or
the Acquiring Fund with respect to one of the Reorganizations will not affect
the implementation of a Reorganization by the other Funds.
This
Joint Proxy Statement/Prospectus sets forth concisely the information that
shareholders of each Fund should know before voting on the proposals for their
Fund and constitutes an offering of Acquiring Fund Common
Shares. Please read it carefully and retain it for future
reference. A Reorganization Statement of Additional Information,
dated March 30, 2009, relating to this Joint Proxy Statement/Prospectus (the
"Reorganization Statement of Additional Information") has been filed with the
Securities and Exchange Commission (the "SEC") and is incorporated herein by
reference. Copies of each Fund's most recent annual report and
semi-annual report can be obtained on a web site maintained by BlackRock at
www.blackrock.com. In addition, each Fund will furnish, without
charge, a copy of the Reorganization Statement of Additional Information, its
most recent annual report and any more recent semi-annual report to any
shareholder upon request. Any such request should be directed to
BlackRock by calling (800) 882-0052 or by writing to the respective Fund at P.O.
Box 9011, Princeton, NJ 08543-9011.
The
address of the principal executive offices of the Funds is 100 Bellevue Parkway,
Wilmington, DE 19809, and the telephone number is (800) 882-0052.
The Funds
are subject to the informational requirements of the Securities Exchange Act of
1934 and in accordance therewith file reports, proxy statements, proxy materials
and other information with the SEC. Materials filed with the SEC can
be reviewed and copied at the SEC's Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549 or downloaded from the SEC's web site at
www.sec.gov. Information on the operation of the SEC's Public
Reference Room may be obtained by calling the SEC at (202)
551-8090. You may also request copies of these materials, upon
payment at the prescribed rates of a duplicating fee, by electronic request to
the SEC's e-mail address (publicinfo@sec.gov) or by writing the Public Reference
Branch, Office of Consumer Affairs and Information Services, Securities and
Exchange Commission, Washington, DC, 20549-0102.
The
common shares of the Acquiring Fund are listed on the New York Stock Exchange
("NYSE") under the ticker symbol "BOE" and will continue to be so listed
subsequent to the Reorganizations. The common shares of BlackRock
Global Equity Income Trust are listed on the NYSE under the ticker symbol
"BFD." The common shares of BlackRock World Investment Trust are
listed on the NYSE under the ticker symbol "BWC." Reports, proxy
statements and other information concerning the Acquiring Fund, BFD or BWC may
be inspected at the offices of the NYSE, 20 Broad Street, New York, NY
10005.
This
Joint Proxy Statement/Prospectus serves as a prospectus of the Acquiring Fund in
connection with the issuance of Acquiring Fund Common Shares in each
Reorganization. No person has been authorized to give any information
or make any representation not contained in this Joint Proxy
Statement/Prospectus and, if so given or made, such information or
representation must not be relied upon as having been
authorized. This Joint Proxy Statement/Prospectus does not constitute
an offer to sell or a solicitation of an offer to buy any securities in any
jurisdiction in which, or to any person to whom, it is unlawful to make such
offer or solicitation.
THE
SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY
OF THIS JOINT PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The
date of this Joint Proxy Statement/Prospectus is March 30, 2009.
|
|
Page
|
|
SUMMARY
|
1
|
|
RISK
FACTORS AND SPECIAL CONSIDERATIONS
|
9
|
|
PROPOSAL
1: REORGANIZATIONS OF THE TARGET FUNDS
|
19
|
|
INVESTMENT
OBJECTIVES AND POLICIES OF THE ACQUIRING FUND
|
20
|
|
OTHER
INVESTMENT POLICIES
|
27
|
|
COMPARISON
OF THE FUNDS
|
30
|
|
MANAGEMENT
OF THE FUNDS
|
34
|
|
ADDITIONAL
INFORMATION ABOUT COMMON SHARES OF THE FUNDS
|
38
|
|
DIVIDENDS
AND DISTRIBUTIONS
|
40
|
|
AUTOMATIC
DIVIDEND REINVESTMENT PLAN
|
41
|
|
GOVERNING
LAW
|
42
|
|
CERTAIN
PROVISIONS OF THE AGREEMENT AND DECLARATION OF TRUST
|
43
|
|
CONVERSION
TO OPEN-END FUND
|
44
|
|
VOTING
RIGHTS
|
44
|
|
FINANCIAL
HIGHLIGHTS
|
45
|
|
INFORMATION
ABOUT THE REORGANIZATIONS
|
47
|
|
TERMS
OF THE REORGANIZATION AGREEMENTS
|
48
|
|
REASONS
FOR THE REORGANIZATIONS
|
50
|
|
MATERIAL
U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE
REORGANIZATIONS
|
52
|
|
SHAREHOLDER
APPROVAL
|
54
|
|
PROPOSAL
2: ISSUANCE OF ADDITIONAL ACQUIRING FUND COMMON
SHARES
|
55
|
|
OTHER
INFORMATION
|
56
|
|
VOTING
INFORMATION AND REQUIREMENTS
|
56
|
|
SHAREHOLDER
INFORMATION
|
57
|
|
SECTION
16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
|
57
|
|
SHAREHOLDER
PROPOSALS
|
57
|
|
SOLICITATION
OF PROXIES
|
57
|
|
LEGAL
MATTERS
|
58
|
|
OTHER
MATTERS WITH RESPECT TO THE MEETING
|
58
|
SUMMARY
The
following is a summary of certain information contained elsewhere in this Joint
Proxy Statement/Prospectus and is qualified in its entirety by reference to the
more complete information contained in this Joint Proxy Statement/Prospectus and
in the Reorganization Statement of Additional
Information. Shareholders should read the entire Joint Proxy
Statement/Prospectus carefully.
PROPOSAL 1: REORGANIZATIONS
OF THE TARGET FUNDS
The Proposed
Reorganizations
The Board
of Trustees of each Fund, including the Trustees who are not "interested
persons" of each Fund (as defined in the 1940 Act), has unanimously approved
each Reorganization Agreement. If the shareholders of a Target Fund
approve their Reorganization Agreement and the shareholders of the Acquiring
Fund approve the issuance of Acquiring Fund Common Shares in connection with the
respective Reorganization (see "Proposal 2: Issuance of Additional Acquiring
Fund Common Shares"), Acquiring Fund Common Shares will be issued to such Target
Fund in exchange for substantially all of the assets of such Target Fund and the
assumption of substantially all of the liabilities of such Target
Fund. Each Target Fund will then distribute the Acquiring Fund Common
Shares to its shareholders and terminate its registration under the 1940 Act and
dissolve under Delaware law. The aggregate net asset value of
Acquiring Fund Common Shares received by a Target Fund's investors in a
Reorganization will equal the aggregate net asset value of that Target Fund's
common shares held immediately prior to the Reorganization, less the costs of
the Reorganization (though common shareholders may receive cash for fractional
common shares).
Background and
R
easons for the
P
roposed
Reorganizations
The
Reorganizations seek to combine three similar, but not identical, Funds to
achieve certain economies of scale and other operational efficiencies and a
change of investment objectives or policies for the Target Funds, as
applicable. Each Fund is registered as a diversified, closed-end
management investment company under the 1940 Act. The investment
objective of each of BFD and the Acquiring Fund is primarily to seek current
income and current gains, with a secondary objective of long-term capital
appreciation.
The
investment objective of BWC is primarily to seek current income, dividends and
gains, with a secondary objective of long-term capital
appreciation. The Funds' investment objectives are not a fundamental
policy and may be changed without prior shareholder approval. As of
the date of the Special Meeting, each Fund will seek to achieve its objectives
by investing primarily in equity securities issued by companies located in
countries throughout the world and utilizing an option writing strategy to
enhance current gains that generally focuses on individual common
stocks. The Funds have the same investment adviser.
The
proposed Reorganizations will combine the assets of the Funds by reorganizing
the Target Funds into the Acquiring Fund. The Board of Trustees of
each Target Fund (each, a "Target Fund Board" and, collectively, the "Target
Fund Boards"), based upon its evaluation of all relevant information,
anticipates that the common shareholders of each Target Fund will benefit from
their Fund's respective Reorganization. The Board of Trustees of the
Acquiring Fund (the "Acquiring Fund Board"), based upon its evaluation of all
relevant information, anticipates that each Reorganization will benefit
shareholders of the Acquiring Fund. Each Board of Trustees reviewed
data presented by BlackRock Advisors, LLC, investment adviser to each of the
Funds (the "Investment Adviser"), showing that common shareholders of each Fund
will experience a reduced annual operating expense ratio as a result of their
Fund's respective Reorganization. The combined fund resulting from
the Reorganizations will have a larger asset base than any of the Funds has
currently. Certain fixed administrative costs, such as costs of
printing shareholder reports and proxy statements, legal expenses, audit fees,
mailing costs and other expenses, will be spread across this larger asset base,
thereby lowering the expense ratio for common shareholders of the combined
fund.
In
approving its proposed Reorganization Agreement, the Board of Trustees of each
Fund, including the Independent Trustees, as defined below, determined that
participation in the Reorganizations is in the best interests of the relevant
Fund and its shareholders and that the interests of the shareholders of the
relevant Fund will not be diluted with respect to net asset value as a result of
the Reorganizations. Before reaching these conclusions, the Board of
Trustees of each Fund, including the Independent Trustees, engaged in a thorough
review process relating to the proposed Reorganization. The
Independent Trustees also received a memorandum outlining, among other things,
the legal standards and certain other considerations relevant to the Boards of
Trustees' deliberations. The Boards of Trustees of the Funds,
including all of the Independent Trustees, considered and approved the
Reorganizations at meetings held on December 5, 2008 and February 6,
2009.
The
primary factors considered by the Board of Trustees with regard to the
Reorganizations include, but are not limited to, the following:
|
·
|
The
fact that the investment objectives and policies of the Target Funds and
the Acquiring Fund are similar (although not identical). See
"Proposal 1: Reorganization of the Target Funds—Comparison of
the Funds."
|
|
·
|
The
expectation that the combined fund will have an annual operating expense
ratio that is lower than that of each Fund prior to the
Reorganizations.
|
|
·
|
The
expectation that, if the Reorganization of BFD is not approved, the
Investment Adviser would recommend to the Board of Trustees of BFD that it
substantially lower its dividend in order to reduce or eliminate the
amount of capital returned to investors in connection with each
dividend.
|
|
·
|
The
relative performance history of each
Fund.
|
|
·
|
The
expectation that the combined fund may achieve certain potential benefits
for shareholders of each Fund from its larger asset base, including but
not limited to the benefit of increased
liquidity.
|
|
·
|
Shareholders
will recognize no gain or loss for U.S. federal income tax purposes as a
result of the Reorganizations, as the Reorganizations are intended to be
tax-free transactions.
|
|
·
|
The
identity, investment style and strategies of the portfolio management team
that will manage the Acquiring Fund. See "Proposal
1: Reorganization of the Target Funds—Comparison of the Funds"
and "—Management of the Funds."
|
|
·
|
The
expectation that shareholders will receive substantially the same services
after the Reorganizations.
|
Considering
these and other reasons, the Board of Trustees of each Fund unanimously
concluded that completion of the Reorganizations is in the best interests of
each Fund and its shareholders and that the interests of the shareholders of the
Funds will not be diluted with respect to net asset value as a result of the
Reorganizations. This determination was made on the basis of each
Trustee's business judgment after consideration of all of the factors taken as a
whole, though individual Trustees may have placed different weight on various
factors and assigned different degrees of materiality to various
factors. See "Proposal 1: Reorganization of the Target
Funds—Reasons for the Reorganizations."
If a
Reorganization is not approved by a Target Fund's shareholders, such Target Fund
will continue to operate for the time being as a stand alone Delaware statutory
trust advised by the Investment Adviser. If BFD is not reorganized
into the Acquiring Fund, the Investment Adviser anticipates that it would
recommend to the Board of Trustees of BFD that it substantially lower its
dividend in order to reduce or eliminate the amount of capital returned to
investors in connection with each dividend. An
unfavorable
vote by one of the Target Funds or the Acquiring Fund with respect to one of the
Reorganizations will not affect the implementation of the Reorganization by the
other Funds.
The table
below illustrates the anticipated reduction in operating expenses expected as a
result of the Reorganizations. The table sets forth (i) the fees and
expenses paid by each Target Fund for the 12-month period ended October 31,
2008, (ii) the fees and expenses paid by the Acquiring Fund for the 12-month
period ended October 31, 2008 and (iii) the pro forma fees and expenses for the
combined fund, assuming all of the Reorganizations had taken place on October
31, 2008 and assuming, for each Target Fund, that only its Reorganization
occurs. As shown below, the Reorganizations are expected to result in
decreased total annual expenses for shareholders of each Fund (although such
savings will not be immediately realized (see footnote (c) to the
table)).
Fee
and Expenses Table for Common Shareholders of the Funds as of October 31,
2008
|
|
|
|
|
|
|
|
|
Combined
Fund
(BFD
and BWC into BOE) (a)
|
|
Pro
Forma
Combined
Fund
(BFD
into BOE) (a)
|
|
Pro
Forma
Combined
Fund
(BWC
into BOE) (a)
|
|
Shareholder
Transaction Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum
Sales Load (as a percentage of the offering price) imposed on purchases of
common shares (b)
|
|
None
|
|
None
|
|
None
|
|
None
|
|
None
|
|
None
|
|
Dividend
Reinvestment and Cash Purchase Plan Fees
|
|
None
|
|
None
|
|
None
|
|
None
|
|
None
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual
Expenses (as a percentage of average net assets attributable to common
shares as of October 31, 2008)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
Management Fees
|
|
1.00%
|
|
1.00%
|
|
1.00%
|
|
1.00%
|
|
1.00%
|
|
1.00%
|
|
Other
Expenses (c)
|
|
0.11%
|
|
0.10%
|
|
0.14%
|
|
0.07%
|
|
0.09%
|
|
0.09%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Annual Expenses
|
|
1.11%
|
|
1.10%
|
|
1.14%
|
|
1.07%
|
|
1.09%
|
|
1.09%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______________
|
(a)
|
The
pro forma annual operating expenses for each potential combined fund are
projections for a 12-month period.
|
|
(b)
|
No
sales load will be charged in connection with the issuance of the
Acquiring Fund's common shares as part of the
Reorganizations. Common shares are not available for purchase
from the Funds but may be purchased on the NYSE through a broker-dealer
subject to individually negotiated commission rates. Common
shares purchased in the secondary market may be subject to brokerage
commissions or other charges.
|
|
(c)
|
"Other
Expenses" includes Acquired Fund fees and expenses of each Fund which are
less than 0.01%. An "Acquired Fund" means any company in which
a Fund invests or intends to invest (i) that is an investment company or
(ii) that would be an investment company under Section 3(a) of the 1940
Act but for the exceptions to that definition provided for in Sections
3(c)(1) and 3(c)(7) of the 1940
Act.
|
The Target Funds and the Acquiring Fund
will bear expenses incurred in connection with the Reorganizations that are not
reflected in "Other Expenses," including, but not limited to, costs related to
the preparation and distribution of materials distributed to each Fund's Board
of Trustees, expenses incurred in connection with the preparation of the
Reorganization Agreements and the registration statement on Form
N-14, the
printing and distribution of this Joint Proxy Statement/Prospectus and any other
materials required to be distributed to shareholders, SEC and state securities
commission filing fees and legal and audit fees in connection with the
Reorganizations, legal fees incurred preparing each Fund's Board materials,
attending each Fund's Board meetings and preparing the minutes, auditing fees
associated with each Fund's financial statements, stock exchange fees, transfer
agency fees, rating agency fees, portfolio transfer taxes (if any) and any
similar expenses incurred in connection with the Reorganizations, which will be
borne directly by the respective Fund incurring the expense or allocated among
the Funds based upon some reasonable methodology, as
appropriate. Neither the Funds nor the Investment Adviser will pay
any expenses of shareholders arising out of or in connection with the
Reorganization.
EXAMPLE
: The
following example is intended to help you compare the costs of investing in the
Acquiring Fund pro forma as a result of the Reorganizations with the costs of
investing in the Target Funds and the Acquiring Fund without the
Reorganizations. An investor would pay the following expenses on a
$1,000 investment, assuming (1) the operating expense ratio for each Fund (as a
percentage of net assets attributable to common shares) set forth in the table
above and (2) a 5% annual return throughout the period:
|
|
|
1 Year
|
|
|
3 Years
|
|
|
5 Years
|
|
|
10 Years
|
|
|
BFD
|
|
$
|
11
|
|
|
$
|
35
|
|
|
$
|
61
|
|
|
$
|
135
|
|
|
BWC
|
|
$
|
11
|
|
|
$
|
35
|
|
|
$
|
61
|
|
|
$
|
134
|
|
|
BOE
|
|
$
|
12
|
|
|
$
|
36
|
|
|
$
|
63
|
|
|
$
|
139
|
|
|
Pro
Forma Combined Fund
(BFD
and BWC into BOE)
(a)
|
|
$
|
11
|
|
|
$
|
34
|
|
|
$
|
59
|
|
|
$
|
131
|
|
|
Pro
Forma Combined Fund
(BFD
into BOE)
(a)
|
|
$
|
11
|
|
|
$
|
35
|
|
|
$
|
60
|
|
|
$
|
133
|
|
|
Pro
Forma Combined Fund
(BWC
into BOE)
(a)
|
|
$
|
11
|
|
|
$
|
35
|
|
|
$
|
60
|
|
|
$
|
133
|
|
|
(a)
|
These
figures assume that the Reorganizations had taken place on October 31,
2008. As described herein, an unfavorable vote on a proposed
Reorganization by the stockholders of one Target Fund will not affect the
implementation of a Reorganization by the other Target
Fund
|
The
example set forth above assumes common shares of each Fund were owned as of the
completion of the Reorganizations and the reinvestment of all dividends and
distributions and uses a 5% annual rate of return as mandated by SEC
regulations. The example should not be considered a representation of
past or future expenses or annual rates of return. Actual expenses or
annual rates of return may be more or less than those assumed for purposes of
the example.
Comparison of the
Funds
A summary
comparison of the investment strategies and significant operating policies used
by the Funds as of the date of the Special Meeting is set forth in the table
below. See "Proposal 1: Reorganizations of the Target
Funds—Comparison of the Funds" for a more detailed comparison of the Funds.
After the Reorganizations, the investment strategies and significant operating
policies of the combined fund will be those of BOE.
|
Acquiring Fund
|
Target Funds
|
|
BOE
|
BFD
|
BWC
|
|
General
·
Invests
at least 80% of its total assets in equity securities or options on equity
securities or indices or sectors of equity securities, under normal market
conditions.
·
May
invest up to 20% of its total assets in debt securities, including debt
securities issued by companies located in emerging markets.
·
May
invest up to 10% of its total assets in non-investment grade debt
securities, commonly known as "junk bonds."
|
General
·
Invests
at least 80% of its total assets in equity securities or options on equity
securities or indices or sectors of equity securities, under normal market
conditions.
|
General
·
Invests
at least 75% of its total assets in equity securities or options on equity
securities or indices or sectors of equity securities, under normal market
conditions.
·
May
invest up to 25% of its total assets in debt securities of issuers located
anywhere in the world and including securities rated below investment
grade.
|
|
|
|
|
|
Non-U.S.
Investments
·
May
invest in companies located anywhere in the world.
·
Invests
at least 30% of its total assets at the time of investment in the equity
securities of non-U.S. issuers, under normal market
conditions.
·
May
invest up to 25% of its total assets in equity securities of issuers in
emerging countries.
·
Investment
strategy will cause it to invest in issuers located in a number of
countries throughout the world, but the actual number of countries
represented in BOE's portfolio will vary over time.
·
Invests
in the equity securities of issuers in at least three different countries,
including the United States.
·
As
of December 31, 2008, the investment philosophy caused it to invest in
issuers located in 28 countries globally, with less than 55% of BOE's
equity assets invested in the United States.
|
Non-U.S.
Investments
·
May
invest in the securities of non-U.S. companies without limit.
·
Invests
at least 40% of its total assets in securities of non-U.S. companies,
unless market conditions are not deemed favorable by the Investment
Adviser and BlackRock Investment Management, LLC ("BIM"), as sub-advisor
to BFD, (collectively, "BFD Advisors"), in which case BFD would invest at
least 30% of its total assets in securities of non-U.S.
companies.
·
May
invest up to 25% of its total assets in securities of emerging market
issuers.
·
Invests
in issuers located in a number of countries throughout the world, but the
actual number of countries represented in BFD's portfolio will vary over
time.
·
As
of December 31, 2008, the investment philosophy caused it to invest in
issuers located in 24 countries globally, with less than 51% of BFD's
equity assets invested in the United States.
|
Non-U.S.
Investments
·
May
invest in companies located anywhere in the world.
·
Invests
at least 40% of its assets in issuers located outside of the United
States.
·
May
invest up to 25% of its total assets in equity securities of issuers in
emerging market countries.
·
Investment
strategy will cause it to invest in issuers located in a number of
countries throughout the world, but the actual number of countries
represented in BWC's portfolio will vary over time.
·
Invests
in the equity securities of issuers in at least ten different countries,
including the United States.
·
As
of December 31, 2008, the investment philosophy caused it to invest in
issuers located in 26 countries globally, with less than 54% of BWC's
equity assets invested in the United States.
|
|
|
|
|
|
Leverage
·
BOE
currently does not intend to incur indebtedness or issue preferred shares
for investment purposes.
|
Leverage
·
BFD
currently does not intend to incur indebtedness or issue preferred shares
for investment purposes.
|
Leverage
·
BWC
currently does not intend to incur indebtedness or issue preferred shares
for investment
purposes.
|
|
Target
Stocks
·
May
invest in common stocks, preferred stocks, convertible securities,
warrants, depository receipts and equity interests in REITs.
·
May
invest in companies of any size market capitalization and in companies
conducting initial public offerings.
|
Target
Stocks
·
May
invest in common stocks, preferred stocks, convertible securities,
warrants, depository receipts and equity interests in REITs.
·
May
hold or have exposure to common stocks of issuers of any size, including
small and medium capitalization stocks, and to issuers in any industry or
sector.
|
Target
Stocks
·
May
invest in common stocks, preferred stocks, convertible securities,
warrants, depository receipts and equity interests in REITs.
·
May
invest in companies of any size market capitalization and in companies
conducting initial public offerings.
|
|
|
|
|
|
Option
Strategy
·
Employs
a strategy of writing (selling) covered call options on a portion of the
common stocks in its portfolio and writing (selling) covered put
options.
·
May,
to a lesser extent, write (sell) covered call and put options on indices
of securities and sectors of securities.
·
A
substantial portion of the options written by BOE may be over-the-counter
options ("OTC Options")
·
Generally
writes covered put and call options with respect to approximately 45% to
65% of its total assets, although this percentage may vary from time to
time with market conditions.
|
Option
Strategy
·
Employs
a strategy of writing (selling) covered call options on a portion of the
common stocks in its portfolio and writing (selling) covered put
options.
·
May,
to a lesser extent, write (sell) covered call and put options on indices
of securities and sectors of securities.
·
A
substantial portion of the options written by BFD may be OTC
Options
·
Generally
writes covered put and call options with respect to approximately 45% to
65% of its total assets, although this percentage may vary from time to
time with market conditions.
|
Option
Strategy
·
Employs
a strategy of writing (selling) covered call and put options on individual
common stocks.
·
May,
to a lesser extent, pursue a strategy that includes the writing (selling)
of both covered call and put options on indices of securities and sectors
of securities.
·
A
substantial portion of the options written by BWC may be OTC
Options.
·
Generally
writes covered put and call options with respect to approximately 50% to
60% of its total assets, although this percentage may vary from time to
time with market conditions.
|
|
|
|
|
|
Strategy
·
The
Investment Adviser seeks to invest in companies that it believes have
sizeable market opportunities, global, regional or local competitive
advantages, sound business models and financial strength, proven
management teams and compelling relative and absolute
valuations.
|
Strategy
·
The
Investment Adviser seeks to invest in companies that it believes have
sizeable market opportunities, global, regional or local competitive
advantages, sound business models and financial strength, proven
management teams and compelling relative and absolute
valuations.
|
Strategy
·
The
Investment Adviser and BlackRock Financial Management, Inc. ("BFM"), the
sub-advisor to BWC, seek to invest in companies that they believe have
sizeable market opportunities, global, regional or local competitive
advantages, sound business models and financial strength, proven
management teams and compelling relative and absolute
valuations.
|
|
|
|
|
|
Dividends
·
Intends
to make regular quarterly cash distributions of all or a portion of its
investment company taxable income to common shareholders.
|
Dividends
·
Intends
to make regular quarterly cash distributions of all or a portion of its
investment company taxable income to common shareholders.
|
Dividends
·
Intends
to make regular quarterly cash distributions of all or a portion of its
investment company taxable income to common
shareholders.
|
Further Information Regarding
t
he Reorganizations
The
Target Funds' Boards of Trustees have determined that the Reorganizations are in
the best interests of common shareholders of each Target Fund and that the
interests of such shareholders will not be diluted as a result of their Funds'
Reorganizations. Similarly, the Acquiring Fund Board has determined
that each Reorganization is in the best interests of common shareholders of the
Acquiring Fund and that the interests of such shareholders will not be diluted
as a result of either Reorganization. As a result of the
Reorganizations, however, shareholders of each Fund will hold a reduced
percentage of ownership in the larger combined fund than they did in any of the
separate Funds.
Each of
the Reorganizations is intended to qualify as a "reorganization" within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code"). If a Reorganization so qualifies, in general, shareholders
of the respective Target Fund would recognize no gain or loss for U.S. federal
income tax purposes upon the exchange of their Target Fund common shares solely
for Acquiring Fund Common Shares pursuant to the
Reorganization. Additionally, the respective Target Fund would
recognize no gain or loss for U.S. federal income tax purposes as a result of
the transfer of substantially all of its assets and liabilities in exchange for
Acquiring Fund Common Shares or as a result of its
dissolution. Neither the Acquiring Fund nor its shareholders will
recognize any gain or loss for U.S. federal income tax purposes in connection
with the Reorganizations. It is a condition to the closing of each
Reorganization that the respective Target Fund and the Acquiring Fund receive an
opinion from Skadden, Arps, Slate, Meagher & Flom LLP ("Skadden Arps"),
dated as of the Closing Date, regarding the characterization of such
Reorganization as a reorganization within the meaning of Section 368 (a) of the
Code.
The
Target Funds' Boards of Trustees request that shareholders of each Target Fund
approve their Fund's proposed Reorganization at the Special Meeting to be held
on May 5, 2009. Shareholder approval of each Reorganization requires
the affirmative vote of shareholders of the respective Target Fund representing
the lesser of (i) 67% of the common shares represented at the Special Meeting at
which more than 50% of the outstanding common shares are represented or (ii)
more than 50% of the outstanding shares of the respective Target
Fund. Subject to the requisite approval of the shareholders of each
Target Fund with regard to each Reorganization, it is expected that the closing
date of the transaction (the "Closing Date") will be after the close of business
on or about July 10, 2009, but it may be at a different time as described
herein.
The
Target Funds' Boards of Trustees recommend that you vote "
FOR
" your Target Fund's
proposed Reorganization.
PROPOSAL 2:
I
SSUANCE OF ADDITIONAL
ACQUIRING FUND COMMON
SHARES
In
connection with each proposed Reorganization described under "Proposal 1:
Reorganizations of the Target Funds," the Acquiring Fund will issue additional
Acquiring Fund Common Shares and list such common shares on the
NYSE. The Acquiring Fund will acquire substantially all of the assets
and assume substantially all of the liabilities of each Target Fund in exchange
for newly-issued Acquiring Fund Common Shares. The Reorganizations
will result in no reduction of the net asset value of the Acquiring Fund Common
Shares, other than to reflect the costs of the Reorganizations. No
gain or loss will be recognized by the Acquiring Fund or its shareholders in
connection with the Reorganizations. The Acquiring Fund Board, based
upon its evaluation of all relevant information, anticipates that each
Reorganization will benefit shareholders of the Acquiring Fund. In
particular, the Acquiring Fund Board reviewed data presented by the Investment
Adviser showing that the Acquiring Fund will experience a reduced annual
operating expense ratio as a result of the Reorganizations.
The
Acquiring Fund Board requests that common shareholders of the Acquiring Fund
approve the issuance of additional Acquiring Fund Common Shares for each
Reorganization at the Special Meeting to be held on May 5,
2009. Shareholder approval of the issuance of additional Acquiring
Fund Common Shares requires the affirmative vote of a majority of the votes
cast, provided that total votes cast on the proposal represent over 50% of all
securities entitled to vote on the proposal. Subject to the requisite
approval of the shareholders of each Fund with regard to the Reorganizations, it
is expected that the
Closing
Date will be after the close of business on or about July 10, 2009, but it may
be at a different time as described herein.
The
Acquiring Fund Board recommends that you vote "
FOR
" the issuance of
additional Acquiring Fund Common Shares in connection with each
Reorganization.
RISK FACTORS AND SPECIAL
CONSIDERATIONS
Because
of their similar investment objectives and principal investment strategies in
effect as of the date of the Special Meeting, the Funds will be subject to
similar investment risks. However, the combined fund will have some
risks that differ from those of BWC. Unlike BWC, which can invest up
to 25% of the value of its total assets in non-investment grade securities, the
Acquiring Fund is limited to investing 10% of the value of its total assets in
such securities. The Reorganizations themselves are not expected to
adversely affect the rights of shareholders of any of the
Funds. There is no guarantee that common shares of any Fund will not
lose value. This means shareholders of either Target Fund and
shareholders of the combined fund could lose money.
When
initially formed, BFD had a non-fundamental policy of investing, under normal
market conditions, no less than 80% of its total assets in a combination of (i)
dividend-paying domestic and foreign common stocks and (ii) common stocks the
value of which is subject to covered written index call options (the "BFD
Non-Fundamental Policy"). On February 6, 2009, the Board of Trustees
of BFD approved to change the BFD Non-Fundamental Policy to a policy of
investing, under normal market conditions, no less than 80% of its total assets
in equity securities of companies located in countries throughout the world or
options on equity securities or indices of equity securities. This
change was made in conjunction with a change in BFD's portfolio
manager. Jonathan Clark, BFD's original portfolio manager, became the
Head of Americas Trading for the Investment Adviser and the same team of
portfolio managers that currently manages the Acquiring Fund became the
portfolio manager for BFD. The Board of Trustees for BFD believes
that the change in BFD's investment policy was in the best interests of
shareholders whether or not the reorganization of BFD into BOE is
consummated. In accordance with the 1940 Act, notice of the new
investment policy was mailed to BFD's shareholders on
February , 2009 and the new investment
policy will take effect on April ,
2009.
The
following discussion describes the principal and certain other risks that may
affect the combined fund.
Expenses
While the
Funds currently estimate that the Reorganizations, if consummated, will result
in reduced aggregate expenses of the Funds by approximately $633,682 per year,
the realization of these reduced expenses will not affect holders of the Funds
proportionately, may take longer than expected to be realized or may not be
realized at all. After the Reorganizations, the combined fund is expected to
incur lower expenses on a per common share basis than each of the Funds
currently incurs. However, the combined fund may incur higher expenses for a
period prior to experiencing such savings or may never experience such
savings.
After the
Reorganizations, certain fixed administrative costs will be spread across the
reorganized combined fund's larger asset base, which are expected to result in
lower aggregate costs. Although the magnitude of the benefit of lower expenses
for common shareholders of each respective Fund will be different, it is
expected that each Fund should realize some benefit either immediately or in the
future from the Reorganizations. Each Board of Trustees believes that its Fund's
common shareholders should realize lower expense ratios after the
Reorganizations than they would realize if the Reorganizations did not occur. As
of October 31, 2008, the historical and pro forma total annual gross expense
ratios (i.e., excluding fee waivers) applicable to the Reorganizations are as
follows:
(As
a percentage of average net assets attributable to common shares as of October
31, 2008)
|
|
|
|
|
|
BFD
Total Annual Gross
Expense
Ratio
|
BWC
Total Annual Gross
Expense
Ratio
|
BOE
Total Annual Gross
Expense
Ratio
|
Pro
Forma Total
Annual
Gross Expense Ratio
|
|
1.11%
|
1.10%
|
1.14%
|
1.07%
|
There can
be no assurance that future expenses will not increase or that any expense
savings will be realized. Moreover, to the extent that one of the
Reorganizations is not completed, but the other Reorganization is completed, any
expected savings by BFD, BWC and the Acquiring Fund will be
reduced.
Each Fund
has incurred expenses related to the Reorganizations. Because the Funds have
already incurred expenses solely and directly attributable to the
Reorganizations, if a Fund's respective shareholders do not approve their Fund's
respective Reorganization, each Fund will incur expenses arising from its
proposed Reorganization even though its proposed Reorganization will not occur
and those expenses may be material.
An
investment in Acquiring Fund Common Shares is subject to investment risk,
including the possible loss of the entire amount that you invest. As
with any stock, the price of the Acquiring Fund's common shares will fluctuate
with market conditions and other factors. If common shares are sold,
the price received may be more or less than the original
investment. Acquiring Fund Common Shares are designed for long-term
investors and should not be treated as trading vehicles. Shares of
closed-end management investment companies frequently trade at a discount from
their net asset value. The common shares of BFD have in the past
generally traded at a greater discount to net asset value than the common shares
of the Acquiring Fund and the common shares of BWC have generally traded at a
similar discount to net asset value to the common shares of the Acquiring
Fund. Prior to April , 2009,
however, BFD had a policy of seeking to achieve its investment objective by
investing primarily in a diversified portfolio of domestic and foreign common
stocks that pay dividends and writing (selling) index call options with respect
to a portion of its common stock portfolio. On
April , 2009, BFD changed its investment
policies and began seeking to achieve its investment objective by investing
primarily in equity securities issued by companies located throughout the world
with no emphasis on their dividend rate and writing (selling) options that
generally focus on individual common stocks instead of
indices. Accordingly, discount information for the period prior to
April , 2009 may not reflect BFD's market
price and discount history had BFD employed its current investment policies
during that period. In addition, as noted elsewhere in this
prospectus, if BFD is not reorganized into the Acquiring Fund, the Investment
Adviser anticipates that it would recommend to BFD's Board of Trustees that the
dividend rate for BFD be reduced substantially, which may cause the common
shares of BFD to trade at a greater discount to net asset value than it
historically has traded. There can be no assurance that, after the
Reorganizations, common shares of the combined fund will trade at, above or
below net asset value.
Common
Stock Risk
As of the
date of the Special Meeting, each Fund generally will invest in any type of
common stocks. Although common stocks have historically generated
higher average total returns than fixed income securities over the long-term,
common stocks also have experienced significantly more volatility in those
returns and in certain periods have significantly underperformed relative to
fixed income securities. An adverse event, such as an unfavorable
earnings report, may depress the value of a particular common stock held by the
Acquiring Fund. Also, the price of common stocks is sensitive to
general movements in the stock market and a drop in the stock market may depress
the price of common stocks to which the Acquiring Fund has
exposure. Common stock prices fluctuate for several reasons,
including changes in investors' perceptions of the financial condition of an
issuer or the general condition of the relevant stock market, or when political
or economic events affecting the issuers occur. In addition, common
stock prices may be particularly sensitive to rising interest rates, as the cost
of capital rises and borrowing costs increase. In light of the
current recession and financial turmoil, the stock market has seen increased
volatility that could adversely affect the Acquiring Fund. For more
information, see "—Recent Developments."
Dividend
Risk
Dividends
on common stock are not fixed but are declared at the discretion of an issuer's
board of directors. There is no guarantee that the issuers of the
common stocks in which the Acquiring Fund invests will declare dividends in the
future or that, if declared, they will remain at current levels or increase
over
time. As
described further in "—Tax Risk," "qualified dividend income" received by the
Acquiring Fund will generally be eligible for the reduced tax rate applicable to
individuals for taxable years beginning before January 1,
2011. Higher tax rates will apply to dividend income beginning in
2011, unless further legislative action is taken by Congress. There
is no assurance as to what portion of the Acquiring Fund's distributions will
constitute qualified dividend income.
Small
and Mid-Cap Stock Risk
The
Acquiring Fund may invest in companies with small or medium
capitalizations. Smaller and medium company stocks can be more
volatile than, and perform differently from, larger company
stocks. There may be less trading in a smaller or medium company's
stock, which means that buy and sell transactions in that stock could have a
larger impact on the stock's price than is the case with larger company
stocks. Smaller and medium companies may have fewer business lines;
changes in any one line of business, therefore, may have a greater impact on a
smaller or medium company's stock price than is the case for a larger
company. In addition, smaller or medium company stocks may not be
well known to the investing public.
Investments
in Unseasoned Companies
The
Acquiring Fund may invest in the securities of smaller, less seasoned companies.
These investments may present greater opportunities for growth, but also involve
greater risks than customarily are associated with investments in securities of
more established companies. Some of the companies in which the
Acquiring Fund may invest will be start-up companies which may have
insubstantial operational or earnings histories or may have limited products,
markets, financial resources or management depth. Some may also be
emerging companies at the research and development stage with no products or
technologies to market or approved for marketing. Securities of
emerging companies may lack an active secondary market and may be subject to
more abrupt or erratic price movements than securities of larger, more
established companies or stock market averages in
general. Competitors of certain companies may have substantially
greater financial resources than many of the companies in which the Acquiring
Fund may invest. Further, an unseasoned company is more at risk of
loss in an adverse market due to its lack of financial resources and ability to
sustain itself for an extended period of time in such a market.
Initial
Public Offerings ("IPOs") Risk
The
Acquiring Fund may invest in shares of companies through IPOs. IPOs
and companies that have recently gone public have the potential to produce
substantial gains for the Acquiring Fund. However, there is no
assurance that the Acquiring Fund will have access to profitable
IPOs. The investment performance of the Acquiring Fund during periods
when it is unable to invest significantly, or at all, in IPOs may be lower than
during periods when the Acquiring Fund is able to do so. Securities
issued in IPOs are subject to many of the same risks as investing in companies
with smaller market capitalizations. Securities issued in IPOs have
no trading history, and information about the companies may be available for
limited periods of time. In addition, the prices of securities sold
in IPOs may be highly volatile or may decline shortly after the
IPO.
Non-U.S.
Securities Risk
As of the
date of the Special Meeting, the Acquiring Fund is required to invest at least
30% of its total assets at the time of investment in securities of non-U.S.
issuers. BWC invests at least 40% of its total assets in non-U.S.
securities and BFD also invests 40% of its total assets in such securities
unless its Investment Adviser determines market conditions warrant reducing such
minimum amount to 30% of its total assets. After the
April , 2009 restructuring of its portfolio,
BFD intends to continue to invest 40% of its total assets in non-U.S.
securities. As of December 31, 2008, each Fund invested the following
amounts in securities of non-U.S. issuers: BFD invested 49% in
companies located in 23 countries; BWC invested 46% in companies located in 25
countries; BOE invested 45% in companies located in 27 countries.
Investing
in non-U.S. securities involves certain risks not involved in domestic
investments, including, but not limited to: (1) fluctuations in
foreign exchange rates; (2) future foreign economic, financial, political and
social developments; (3) different legal systems; (4) the possible imposition of
exchange controls or other foreign governmental laws or restrictions, including
expropriation; (5) lower trading volume; (6) much greater price volatility and
illiquidity of certain non-U.S. securities markets; (7) different trading and
settlement practices; (8) less governmental supervision; (9) changes in currency
exchange rates; (10) high and volatile rates of inflation; (11) fluctuating
interest rates; (12) less publicly available information; and (13) different
accounting, auditing and financial recordkeeping standards and
requirements.
Certain
countries in which the Acquiring Fund may invest, especially emerging market
countries, historically have experienced, and may continue to experience, high
rates of inflation, high interest rates, exchange rate fluctuations, large
amounts of external debt, balance of payments and trade difficulties and extreme
poverty and unemployment. Many of these countries are also
characterized by political uncertainty and instability. These risks
are especially evident in the Middle East and West Africa. The cost
of servicing external debt will generally be adversely affected by rising
international interest rates because many external debt obligations bear
interest at rates which are adjusted based upon international interest
rates. In addition, with respect to certain foreign countries, there
is a risk of: (1) the possibility of expropriation or nationalization
of assets; (2) confiscatory taxation; (3) difficulty in obtaining or enforcing a
court judgment; (4) economic, political or social instability; and (5)
diplomatic developments that could affect investments in those
countries.
Because
the Acquiring Fund may invest in securities denominated or quoted in currencies
other than the U.S. dollar, changes in foreign currency exchange rates may
affect the value of securities in the Acquiring Fund and the unrealized
appreciation or depreciation of investments. Currencies of certain
countries may be volatile and therefore may affect the value of securities
denominated in such currencies, which means that the Acquiring Fund's net asset
value or current income could decline as a result of changes in the exchange
rates between foreign currencies and the U.S. dollar. Certain
investments in non-U.S. securities also may be subject to foreign withholding
taxes. Dividend income from non-U.S. corporations may not be eligible
for the reduced rate for qualified dividend income. These risks often
are heightened for investments in smaller, emerging capital
markets. In addition, individual foreign economies may differ
favorably or unfavorably from the U.S. economy in such respects
as: (1) growth of gross domestic product; (2) rates of inflation; (3)
capital reinvestment; (4) resources; (5) self-sufficiency; and (6) balance of
payments position.
As a
result of these potential risks, the Investment Adviser may determine that,
notwithstanding otherwise favorable investment criteria, it may not be
practicable or appropriate to invest in a particular country. The
Acquiring Fund may invest in countries in which foreign investors, including the
Investment Adviser, have had no or limited prior experience.
Emerging
Markets Risk
The Funds
may invest up to 25% of their total assets in equity securities of issuers
located in emerging markets. Investing in securities of issuers based
in underdeveloped emerging markets entails all of the risks of investing in
securities of non-U.S. issuers to a heightened degree. Emerging
market countries generally include every nation in the world except the United
States, Canada, Japan, Australia, New Zealand and most countries located in
Western Europe. These heightened risks include: (i)
greater risks of expropriation, confiscatory taxation, nationalization, and less
social, political and economic stability; (ii) the smaller size of the markets
for such securities and a lower volume of trading, resulting in lack of
liquidity and in price volatility; and (iii) certain national policies which may
restrict the Acquiring Fund's investment opportunities, including restrictions
on investing in issuers or industries deemed sensitive to relevant national
interests.
Foreign
Currency Risk
Because
the Acquiring Fund invests in securities denominated or quoted in currencies
other than the U.S. dollar, changes in foreign currency exchange rates may
affect the value of securities owned by the Acquiring Fund, the unrealized
appreciation or depreciation of investments and gains on and income from
investments. Currencies of certain countries may be volatile and
therefore may affect the value of securities denominated in such currencies,
which means that the Acquiring Fund's net asset value could decline as a result
of changes in the exchange rates between foreign currencies and the U.S.
dollar. In addition, the Acquiring Fund may enter into foreign
currency transactions in an attempt to enhance total return, which may further
expose the Acquiring Fund to the risks of foreign currency movements and other
risks.
Short
Sales Risk
Short
selling involves selling securities that may or may not be owned and borrowing
the same securities for delivery to the purchaser, with an obligation to replace
the borrowed securities at a later date. Short selling allows the
short seller to profit from declines in market prices to the extent such
declines exceed the transaction costs and the costs of borrowing the
securities. A short sale creates the risk of an unlimited loss in
that the price of the underlying security could theoretically increase without
limit, thus increasing the cost of buying those securities to cover the short
position. There can be no assurance that the securities necessary to
cover a short position will be available for purchase. Purchasing
securities to close out the short position can itself cause the price of the
securities to rise further, thereby exacerbating the loss.
Securities
Lending Risk
The
Acquiring Fund may lend its portfolio securities to banks or dealers which meet
the creditworthiness standards established by the Board of Trustees of the
Acquiring Fund. Securities lending is subject to the risk that loaned securities
may not be available to the Acquiring Fund on a timely basis and the Acquiring
Fund may, therefore, lose the opportunity to sell the securities at a desirable
price. Any loss in the market price of securities loaned by the Acquiring Fund
that occurs during the term of the loan would be borne by the Acquiring Fund and
would adversely affect the Acquiring Fund's performance. Also, there may be
delays in recovery, or no recovery, of securities loaned or even a loss of
rights in the collateral should the borrower of the securities fail financially
while the loan is outstanding. These risks may be greater for non-U.S.
securities.
Risks
Associated with the Acquiring Fund's Option Strategy
The
ability of the Acquiring Fund to achieve its primary investment objective of
seeking current income and current gains is primarily dependent on the
successful implementation of its option strategy. As of the date of the Special
Meeting, each Fund enters into options on securities, exchange listed options,
over-the-counter options and, to a lesser extent, index
options. Risks that may adversely affect the ability of the Acquiring
Fund to successfully implement its option strategy include the
following:
Risks Associated
with Options on Securities.
There are several risks associated with
transactions in options on securities used in connection with the Acquiring
Fund's option strategy. For example, there are significant differences between
the securities and options markets that could result in an imperfect correlation
between these markets, causing a given transaction not to achieve its
objectives. A decision as to whether, when and how to use options involves the
exercise of skill and judgment, and even a well conceived transaction may be
unsuccessful to some degree because of market behavior or unexpected
events.
As the
writer of a covered call option, the Acquiring Fund forgoes, during the option's
life, the opportunity to profit from increases in the market value of the
security covering the call option above the sum of the premium and the strike
price of the call, but has retained the risk of loss should the price of
the
underlying
security decline. As the Acquiring Fund writes covered puts and calls over more
of its portfolio, its ability to benefit from capital appreciation becomes more
limited. During the life of an option, the writer of an option has no control
over the time when it may be required to fulfill its obligation as a writer of
the option. Once an option writer has received an exercise notice, it cannot
effect a closing purchase transaction in order to terminate its obligation under
the option and must deliver the underlying security at the exercise
price.
When the
Acquiring Fund writes covered put options, it bears the risk of loss if the
value of the underlying stock declines below the exercise price minus the put
premium. If the option is exercised, the Acquiring Fund could incur a loss if it
is required to purchase the stock underlying the put option at a price greater
than the market price of the stock at the time of exercise plus the put premium
the Acquiring Fund received when it wrote the option. While the Acquiring Fund's
potential gain in writing a covered put option is limited to distributions
earned on the liquid assets securing the put option plus the premium received
from the purchaser of the put option, the Acquiring Fund risks a loss equal to
the entire exercise price of the option minus the put premium.
Exchange-Listed
Option Risks.
There can be no assurance that a liquid market will exist
when the Acquiring Fund seeks to close out an option position on an options
exchange. Reasons for the absence of a liquid secondary market on an exchange
include the following: (i) there may be insufficient trading interest in certain
options; (ii) restrictions may be imposed by an exchange on opening transactions
or closing transactions or both; (iii) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options; (iv) unusual or unforeseen circumstances may interrupt normal
operations on an exchange; (v) the facilities of an exchange or the Options
Clearing Corporation may not at all times be adequate to handle current trading
volume; or (vi) one or more exchanges could, for economic or other reasons,
decide or be compelled at some future date to discontinue the trading of options
(or a particular class or series of options). If trading were discontinued, the
secondary market on that exchange (or in that class or series of options) would
cease to exist. However, outstanding options on that exchange that had been
issued by the Options Clearing Corporation as a result of trades on that
exchange would continue to be exercisable in accordance with their terms. If the
Acquiring Fund were unable to close out a covered call option that it had
written on a security, it would not be able to sell the underlying security
unless the option expired without exercise.
The hours
of trading for options on an exchange may not conform to the hours during which
the underlying securities are traded. To the extent that the options markets
close before the markets for the underlying securities, significant price and
rate movements can take place in the underlying markets that cannot be reflected
in the options markets. Call options are marked to market daily and their value
will be affected by changes in the value and dividend rates of the underlying
common stocks, an increase in interest rates, changes in the actual or perceived
volatility of the stock market and the underlying common stocks and the
remaining time to the options' expiration. Additionally, the exercise price of
an option may be adjusted downward before the option's expiration as a result of
the occurrence of certain corporate events affecting the underlying equity
security, such as extraordinary dividends, stock splits, merger or other
extraordinary distributions or events. A reduction in the exercise price of an
option would reduce the Acquiring Fund's capital appreciation potential on the
underlying security.
Over-the-Counter
Option Risk.
The Acquiring Fund may write (sell) unlisted ("OTC" or
"over-the-counter") options, and options written by the Acquiring Fund with
respect to non-U.S. securities, indices or sectors generally will be OTC
Options. OTC Options differ from exchange-listed options in that they are
two-party contracts, with exercise price, premium and other terms negotiated
between buyer and seller, and generally do not have as much market liquidity as
exchange-listed options. The counterparties to these transactions typically will
be major international banks, broker-dealers and financial institutions. The
Acquiring Fund may be required to treat as illiquid securities being used to
cover certain written OTC Options. The OTC Options written by the Acquiring Fund
will not be issued, guaranteed or cleared by the Options Clearing Corporation.
In addition, the Acquiring Fund's ability to terminate the OTC Options may be
more limited than with exchange-traded options. Banks, broker-dealers or other
financial institutions participating in such transaction may fail to settle a
transaction in accordance with the terms of the option
as
written. In the event of default or insolvency of the counterparty, the
Acquiring Fund may be unable to liquidate an OTC Option position.
Index Option
Risk.
The Acquiring Fund may sell index put and call options from time to
time. The purchaser of an index put option has the right to any depreciation in
the value of the index below the exercise price of the option on or before the
expiration date. The purchaser of an index call option has the right to any
appreciation in the value of the index over the exercise price of the option on
or before the expiration date. Because the exercise of an index option is
settled in cash, sellers of index call options, such as the Acquiring Fund,
cannot provide in advance for their potential settlement obligations by
acquiring and holding the underlying securities. The Acquiring Fund will lose
money if it is required to pay the purchaser of an index option the difference
between the cash value of the index on which the option was written and the
exercise price and such difference is greater than the premium received by the
Acquiring Fund for writing the option. The value of index options written by the
Acquiring Fund, which will be priced daily, will be affected by changes in the
value and dividend rates of the underlying common stocks in the respective
index, changes in the actual or perceived volatility of the stock market and the
remaining time to the options' expiration. The value of the index options also
may be adversely affected if the market for the index options becomes less
liquid or smaller. Distributions paid by the Acquiring Fund on its common shares
may be derived in part from the net index option premiums it receives from
selling index put and call options, less the cost of paying settlement amounts
to purchasers of the options that exercise their options. Net index option
premiums can vary widely over the short term and long term.
Troubled
Asset Relief Plan
On
October 3, 2008, the U.S. Congress enacted the Emergency Economic Stabilization
Act of 2008 ("EESA"), which included the Troubled Asset Relief Plan ("TARP").
TARP is a $700 billion program which permits the U.S. Secretary of the Treasury
(the "Treasury Secretary") to buy certain troubled assets. Financial
institutions eligible to participate in TARP include, but are not necessarily
limited to, depository institutions, brokers and dealers and insurance companies
that are established and regulated under U.S. laws and have significant
operations in the United States. The announced initial focus of EESA
was commercial and residential mortgages and mortgage-related securities;
however, the Treasury Secretary is authorized to purchase any other type of
financial instrument if the Treasury Secretary determines that such purchase is
necessary to promote financial market stability. As of mid-November
of 2008, the Treasury Secretary announced revisions to TARP, including a shifted
focus towards strengthening financial institution balance sheets through direct
purchases of equity in financial institutions rather than on purchasing troubled
assets. The implications of government ownership and disposition of
these assets and equity stakes are unclear, and such a program may have positive
or negative effects on the liquidity, valuation and performance of Acquiring
Fund's investments. Other governments may enact similar
legislation.
Recent
Developments
Recent
instability in the credit markets has made it more difficult for a number of
issuers of debt securities to obtain financing or refinancing for their
investment or lending activities or operations. There is a risk that
such issuers will be unable to successfully complete such financings or
refinancings. In particular, because of the current conditions in the
credit markets, issuers of debt securities may be subject to increased cost for
debt, tightened underwriting standards and reduced liquidity for loans they
make, securities they purchase and securities they issue. There is
also a risk that developments in sectors of the credit markets in which the
Acquiring Fund does not invest may adversely affect the liquidity and the value
of securities in sectors of the equity, option and credit markets in which the
Acquiring Fund does invest, including securities owned by the Acquiring
Fund. The debt and equity capital markets in the United States have
been negatively impacted by significant write-offs in the financial services
sector relating to subprime mortgages and the re-pricing of credit risk in the
broadly syndicated market, among other things. These events, along
with the deterioration of the housing market, the failure of major financial
institutions and the resulting United States federal government actions, have
led to worsening general economic conditions, which have materially and
adversely impacted the broader financial and credit markets and have reduced the
availability of debt and equity capital for the market as a whole and financial
firms in
particular. These
recent events have been adversely affecting the willingness of some lenders to
extend credit, in general, which may make it more difficult for issuers of
securities to finance their operations. These developments may
increase the volatility of the value of securities owned by the Acquiring
Fund. These developments also may make it more difficult for the
Acquiring Fund to accurately value its securities or to sell its securities on a
timely basis. These developments have adversely affected the broader
economy, and may continue to do so, which in turn may adversely affect the
ability of issuers of securities owned by the Acquiring Fund to make payments of
principal and interest when due, and lead to lower credit ratings and increased
defaults. Such developments could, in turn, reduce the value of
securities owned by the Acquiring Fund and adversely affect the net asset value
and market price of the Acquiring Fund's common shares. In addition,
the prolonged continuation or further deterioration of current market conditions
could adversely impact the Acquiring Fund's portfolio.
The
United States and other countries currently are in a period of capital markets
disruption and instability. The Investment Adviser believes that, in
2007 and into 2008, the U.S. capital markets entered into a period of disruption
as evidenced by increasing spreads between the yields realized on riskier debt
securities and those realized on risk-free securities and a lack of liquidity in
parts of the debt capital markets. The Investment Adviser believes
the United States and other countries are also in a period of slowing economic
growth or perhaps a recession, and these conditions may continue for a prolonged
period of time or worsen in the future. This period may increase the
probability that these risks could negatively impact the Acquiring Fund's
portfolio.
Although
these risks also are present with respect to the Target Funds, investors should
be aware that they are present with respect to the Acquiring Fund.
Government
Intervention in Financial Markets
The
recent instability in the financial markets discussed above has led the U.S.
Government to take a number of unprecedented actions designed to support certain
financial institutions and segments of the financial markets that have
experienced extreme volatility, and in some cases a lack of
liquidity. Federal, state, and other governments, their regulatory
agencies, or self regulatory organizations may take actions that affect the
regulation of the instruments in which the Acquiring Fund invests, or the
issuers of such instruments, in ways that are
unforeseeable. Legislation or regulation may also change the way in
which the Acquiring Fund itself is regulated. Such legislation or
regulation could limit or preclude the Acquiring Fund’s ability to achieve its
investment objective.
Governments
or their agencies may also acquire distressed assets from financial institutions
and acquire ownership interests in those institutions. The
implications of government ownership and disposition of these assets are
unclear, and such a program may have positive or negative effects on the
liquidity, valuation and performance of the Acquiring Fund’s portfolio
holdings. Furthermore, volatile financial markets can expose the
Acquiring Fund to greater market and liquidity risk and potential difficulty in
valuing portfolio instruments held by the Acquiring Fund. The
Investment Adviser will monitor developments and seek to manage the Acquiring
Fund’s portfolio in a manner consistent with achieving the Acquiring Fund’s
investment objective, but there can be no assurance that it will be successful
in doing so.
Strategic
Transactions Risk
Strategic
transactions in which the Acquiring Fund may engage for hedging purposes or to
enhance total return, including engaging in transactions such as options,
futures, swaps, foreign currency transactions (including forward foreign
currency contracts, currency swaps or options on currency and currency futures)
and other derivatives transactions ("Strategic Transactions"), also involve
certain risks and special considerations. Strategic Transactions have risks,
including the imperfect correlation between the value of such instruments and
the underlying assets, the possible default of the other party to the
transaction or illiquidity of the derivative instruments. Furthermore, the
ability to successfully use Strategic Transactions depends on the Investment
Adviser's ability to predict pertinent market movements, which cannot be
assured. Thus, the use of Strategic Transactions may result in losses greater
than if they had not
been
used, may require the Acquiring Fund to sell or purchase portfolio securities at
inopportune times or for prices other than current market values, may limit the
amount of appreciation the Acquiring Fund can realize on an investment or may
cause the Acquiring Fund to hold a security that it might otherwise sell. The
use of foreign currency transactions can result in the Acquiring Fund incurring
losses as a result of the imposition of exchange controls, suspension of
settlements or the inability of the Acquiring Fund to deliver or receive a
specified currency. Additionally, amounts paid by the Acquiring Fund as premiums
and cash or other assets held in margin accounts with respect to Strategic
Transactions are not otherwise available to the Acquiring Fund for investment
purposes.
To the
extent that the Acquiring Fund purchases options pursuant to a hedging strategy,
the Acquiring Fund will be subject to the following additional risks. If a put
or call option purchased by the Acquiring Fund is not sold when it has remaining
value, and if the market price of the underlying security remains equal to or
greater than the exercise price (in the case of a put), or remains less than or
equal to the exercise price (in the case of a call), the Acquiring Fund will
lose its entire investment in the option.
Also,
where a put or call option on a particular security is purchased to hedge
against price movements in a related security, the price of the put or call
option may move more or less than the price of the related security. If
restrictions on exercise were imposed, the Acquiring Fund might be unable to
exercise an option it had purchased. If the Acquiring Fund were unable to close
out an option that it had purchased on a security, it would have to exercise the
option in order to realize any profit or the option may expire
worthless.
Tax
Risk
The
Acquiring Fund may employ a strategy of writing (selling) covered call and put
options on individual common stocks and, to a lesser extent, indices of
securities and sectors of securities. Income on such options will not be
recognized by the Acquiring Fund for tax purposes until an option is exercised,
lapses or is subject to a "closing transaction" (as defined by applicable
regulation) pursuant to which the Acquiring Fund's obligations with respect to
the option are otherwise terminated. If the option lapses without exercise or is
otherwise subject to a closing transaction, the premiums received by the
Acquiring Fund from the writing of such options will generally be characterized
as short-term capital gain. If an option written by the Acquiring Fund is
exercised, the Acquiring Fund may recognize taxable gain depending on the
exercise price of the option, the option premium, and the fair market value of
the security underlying the option. The character of any such gain as short-term
or long-term capital gain will depend on the holding period of the Acquiring
Fund in the underlying security. In general, dividends received by shareholders
of the Acquiring Fund that are attributable to short-term capital gains
recognized by the Acquiring Fund from its option writing activities will be
taxed to such shareholders as ordinary income and will not be eligible for the
reduced tax rate applicable to qualified dividend income.
In
pursuing its investment strategy, the Acquiring Fund may invest in shares of
REITs. In general, dividends received by the Acquiring Fund from REIT shares and
distributed to the Acquiring Fund's shareholders will not constitute "qualified
dividend income" eligible for the reduced tax rate applicable to qualified
dividend income. Therefore, the portion of dividend income attributable to REIT
shares held by the Acquiring Fund that shareholders of the Acquiring Fund
receive will generally be taxed to shareholders as ordinary income.
In
general, there can be no assurance as to the percentage (if any) of
distributions on the common shares that will qualify for taxation to individual
common shareholders as "qualified dividend income." In addition, the Acquiring
Fund's investment strategies, including, for example, entering into options on
securities, may cause dividends received by the Acquiring Fund to not constitute
qualified dividend income. Qualified dividend income received by individual
common shareholders is taxed at long-term capital gains rates (currently at a
maximum rate of 15%) provided certain holding period and other requirements are
satisfied by the Acquiring Fund and the recipient common shareholders. The
special tax treatment afforded to qualified dividend income is set to end as of
December 31, 2010. Higher tax rates will apply beginning in 2011 unless further
legislative action is taken by Congress.
Market
Disruption and Geopolitical Risk
The
aftermath of the war in Iraq and the continuing occupation of Iraq, instability
in the Middle East and terrorist attacks in the United States and around the
world may have resulted in market volatility and may have long-term effects on
the U.S. and worldwide financial markets and may cause further economic
uncertainties in the United States and worldwide. The Acquiring Fund does not
know how long the securities markets will continue to be affected by these
events and cannot predict the effects of the occupation or similar events in the
future on the U.S. economy and securities markets. Given the risks described
above, an investment in the common shares may not be appropriate for all
investors. You should carefully consider your ability to assume these risks
before making an investment in the Acquiring Fund.
Counterparty
Risk
The
Acquiring Fund will be subject to credit risk with respect to the counterparties
to the derivative contracts purchased by the Acquiring Fund. If a counterparty
becomes bankrupt or otherwise fails to perform its obligations under a
derivative contract due to financial difficulties, the Acquiring Fund may
experience significant delays in obtaining any recovery under the derivative
contract in bankruptcy or other reorganization proceeding. The Acquiring Fund
may obtain only a limited recovery or may obtain no recovery in such
circumstances.
Anti-Takeover
Provisions
The
Acquiring Fund's Agreement and Declaration of Trust includes provisions that
could limit the ability of other entities or persons to acquire control of the
Acquiring Fund or convert the Acquiring Fund to open-end status. These
provisions could deprive the holders of common shares of opportunities to sell
their common shares at a premium over the then current market price of the
common shares or at net asset value.
PROPOSAL
1: REORGANIZATIONS OF THE TARGET FUNDS
The
Reorganizations seek to combine three similar, but not identical, Funds to
achieve certain economies of scale and other operational efficiencies and a
change of investment objectives or policies for the Target Funds, as
applicable. Each Fund is registered as a diversified, closed-end
management investment company under the 1940 Act. The investment
objective of each of BFD and the Acquiring Fund is primarily to seek current
income and current gains, with a secondary objective of long-term capital
appreciation.
The
investment objective of BWC is primarily to seek current income, dividends and
gains, with a secondary objective of long-term capital
appreciation. The Funds' investment objectives are not a fundamental
policy and may be changed without prior shareholder approval. As of
the date of the Special Meeting, each Fund will seek to achieve its objectives
by investing primarily in equity securities issued by companies located in
countries throughout the world and by utilizing an option writing strategy to
enhance current gains that will generally focus on individual common
stocks.
In each
Reorganization, the Acquiring Fund will acquire substantially all of the assets
and assume substantially all of the liabilities of each Target Fund in exchange
for an equal aggregate value of Acquiring Fund Common Shares. Each
Target Fund will distribute Acquiring Fund Common Shares to common shareholders
of such Target Fund, and will then terminate its registration under the 1940 Act
and dissolve under Delaware
law. The
aggregate net asset value of Acquiring Fund Common Shares received by Target
Fund investors in each Reorganization will equal the aggregate net asset value
of Target Fund common shares held immediately prior to that Reorganization, less
the costs of that Reorganization (though common shareholders may receive cash
for fractional common shares). The Acquiring Fund will continue to
operate as a registered, diversified, closed-end investment company with the
investment objective and policies described in this Joint Proxy
Statement/Prospectus.
The
Target Funds' Boards of Trustees, based upon their evaluation of all relevant
information, anticipate that the common shareholders of each Target Fund will
benefit from their Fund's respective Reorganization. In particular,
the Target Funds' Boards of Trustees believe, based on data presented by the
Investment Adviser, that common shareholders of each Target Fund will experience
a reduced annual operating expense ratio as a result of their Fund's respective
Reorganization. The combined fund resulting from the Reorganizations
will have a larger asset base than any of the Funds have currently; certain
fixed administrative costs, such as costs of printing shareholder reports and
proxy statements, legal expenses, audit fees, mailing costs and other expenses,
will be spread across this larger asset base, thereby lowering the expense ratio
for common shareholders of the combined fund. Also, a larger fund may
produce greater liquidity for the shareholders of the combined
fund.
BFD has
declared distributions at an annual rate equal to 21.79%, calculated with
reference to the closing stock price on the NYSE on December 31,
2008. Prior year distributions have included substantial return of
capital. Because the Investment Adviser believes that continued
payment of such substantial return of capital would not be in the best interests
of BFD or its investors, the Investment Adviser currently anticipates that, if
BFD is not reorganized into the Acquiring Fund, it would recommend to BFD's
Board of Trustees that its dividend be lowered substantially, which may
adversely affect the price at which the common shares of BFD trade on the
NYSE. The possible reduction of BFD's distribution rate would be
dependant upon market conditions at the time any such recommendation was made to
BFD's Board of Trustees, and any such reduction may be smaller or larger than
the Investment Adviser may estimate. For comparative purposes, the
Acquiring Fund recently has declared distributions at an annual rate equal to
14.09%, calculated with reference to the closing stock price on the NYSE on
December 31, 2008. Of course, the distribution rate of the Acquiring
Fund will be affected from time to time by the investment performance of the
Acquiring Fund, and no assurance can be given that the distribution rate of the
Acquiring Fund will not be reduced in the future.
INVESTMENT
OBJECTIVES AND POLICIES OF THE ACQUIRING FUND
The
Acquiring Fund's investment objective is primarily to seek current income
and current gains, with a secondary objective of long-term capital
appreciation. The Acquiring Fund cannot guarantee that it will
achieve its investment objective. The Acquiring Fund's investment
objective is not a fundamental policy and may be changed without prior
shareholder approval. The investment objective and policies of the
Acquiring Fund are similar, but not identical, to those of the Target
Funds. For a comparison of the Funds, see "—Comparison of the
Funds." The following discussion describes the principal and certain
other risks that may affect the combined fund.
The
Acquiring Fund seeks to achieve its investment objective by investing primarily
in equity securities issued by companies located in countries throughout the
world and by utilizing an option writing strategy to enhance current
gains. The Investment Adviser from time to time may vary the
percentage of the Acquiring Fund's assets invested in any particular type of
equity security, based on factors such as market and economic conditions, fiscal
and monetary policy and the relative security valuation of the various equity
asset classes.
The
Acquiring Fund also seeks to achieve its investment objective by employing a
strategy of writing (selling) call and put options on indices of securities and
sectors of securities. In addition to its option strategy on indices,
the Acquiring Fund may pursue a strategy that includes the writing (selling) of
both call and put options on individual common stocks. These option
strategies are intended to generate current gains from option premiums as a
means to enhance distributions payable to the Acquiring Fund's
shareholders. As the Acquiring Fund writes calls and puts over more
of its portfolio, its ability to benefit from capital appreciation becomes more
limited.
Under
normal market conditions, the Acquiring Fund invests at least 80% of its total
assets in equity securities or options on equity securities or indices or
sectors of equity securities. Equity securities in which the
Acquiring Fund invests include common stocks, preferred stocks, convertible
securities, warrants, depository receipts and equity interests in
REITs. The Acquiring Fund may invest in companies located anywhere in
the world. The Acquiring Fund may invest in companies of any size
market capitalization and in companies conducting initial public
offerings. The Acquiring Fund may invest up to 25% of its total
assets in equity securities of issuers in emerging countries. The Acquiring Fund
may invest up to 20% of its total assets in debt securities, including debt
securities issued by companies located in emerging markets. The Acquiring Fund
may invest up to 10% of its total assets in non-investment grade debt
securities, commonly known as "
junk bonds."
Application
of the Acquiring Fund's investment philosophy, from time to time, may cause the
Acquiring Fund to invest a significant portion of its assets in a particular
country or region of the world. The Acquiring Fund's investment strategy causes
it to invest in issuers located in a number of countries throughout the world,
but the actual number of countries represented in the Acquiring Fund's portfolio
will vary over time. As of December 31, 2008, the Acquiring Fund's investment
philosophy caused it to invest in issuers located in 28 countries globally,
including the United States. Under normal market conditions, the Acquiring Fund
invests in the equity securities of issuers in at least three different
countries, including the United States, and invests, under normal market
conditions, at least 30% of its total assets at the time of investment in the
equity securities of non-U.S. issuers. However, the Acquiring Fund may invest in
the securities of non-U.S. issuers without limit. As of December 31,
2008, the Acquiring Fund invested approximately 55% of its total assets in U.S.
issuers and approximately 45% of its total assets in non-U.S.
issuers.
The
Acquiring Fund may engage in various portfolio strategies to seek to increase
its return or to hedge its portfolio against movements in interest rates, in
currency rates and in the securities markets through the use of derivatives,
such as indexed and inverse securities, options, futures, options on futures,
interest rate transactions, including interest rate swaps, total return swaps
and credit default swaps and short selling and foreign exchange
transactions. Each of these portfolio strategies is described
below. No assurance can be given that the Acquiring Fund will employ
these strategies or that, if employed, they will be effective.
The
Acquiring Fund currently does not intend to incur indebtedness or issue
preferred shares for investment purposes.
The
percentage limitations applicable to the Acquiring Fund's portfolio described in
this Joint Proxy Statement/Prospectus apply only at the time of investment, and
the Acquiring Fund will not be required to sell securities due to subsequent
changes in the value of securities it owns.
To the
extent the Acquiring Fund invests in dividend-paying common stocks, the
Investment Adviser currently intends to emphasize those securities
that: (i) are eligible to pay "qualified dividend" income and/or (ii)
make payments that are eligible for the dividends received deduction allowed to
corporate taxpayers (the "Dividends Received Deduction") pursuant to Section 243
of the Code. The current U.S. federal income tax rate on long-term
capital gains and qualified dividend income is generally 15% for
individuals. Long-term capital gains and qualified dividend income
included in distributions of a regulated investment company (a "RIC") to its
individual shareholders are generally passed through to such shareholders and
taxed at such reduced rates. Pursuant to Section 243 of the Code,
corporations generally may deduct 70% of the dividend income they receive from
domestic corporations. Corporate shareholders of a RIC generally are
permitted to claim a deduction with respect to that portion of their dividend
distributions attributable to amounts that the RIC designates as qualifying for
the Dividends Received Deduction. Although the Acquiring Fund has the
ability to borrow money for investment purposes, it has no current intention to
do so. If, however, the Acquiring Fund did use leverage, the use of
leverage through borrowings may reduce the amount of dividends it can designate
as qualifying for the Dividends Received Deduction which will, in turn, limit
the tax benefit to a corporate shareholder of investing in the Acquiring
Fund. Corporate shareholders should consider whether an investment in
the Acquiring Fund is appropriate in light of the Acquiring Fund's ability to
borrow. No assurance can be given as to what percentage of the
dividends paid on the Acquiring Fund's common stock will be eligible
for: (i) the reduced U.S. federal income tax rate for qualified
dividend income and long-term capital gains for individuals or (ii) the
Dividends Received Deduction for corporate shareholders of the Acquiring
Fund. The 15% U.S. federal income tax rate applicable to long-term
capital gains and qualified dividend income is scheduled to expire on December
31, 2010. After this date, absent extension or modification of the
relevant legislative provisions, long-term capital gains distributions paid by
the Acquiring Fund to the individual shareholder generally will be taxable at
the previously applicable maximum 20% rate, and distributions attributable to
qualified dividend income will be taxed to the individual shareholder at his or
her marginal U.S. federal income tax rate (the maximum marginal U.S. federal
income tax rate for individuals is 39.6%).
In
selecting investments for the Acquiring Fund, the Investment Adviser combines
fundamental research with a top-down strategy, analyzing 70 sub-industry groups
on an ongoing basis. The Investment Adviser seeks to identify
companies that it believes have the potential to outperform the
market. The Investment Adviser's investment techniques for the
Acquiring Fund include assessing industry structure and dynamics, evaluating
growth catalysts on an industry and individual company basis and assessing a
company's valuation relative to the broad market and its respective industry
group. The Investment Adviser seeks to invest in companies that it
believes have sizeable market opportunities, global, regional or local
competitive advantages, sound business models and financial strength, proven
management teams and compelling relative and absolute valuations.
The
Acquiring Fund may invest in, among other things, the types of securities and
instruments described below:
Equity
Securities
The
Acquiring Fund invests primarily in equity securities, including common and
preferred stocks, convertible securities, warrants and depository receipts and
equity interests in REITs. Common stocks generally represent an
equity ownership interest in an issuer. Although common stocks have historically
generated higher average total returns than fixed-income securities over the
long-term, common stocks also have experienced significantly more volatility in
those returns and may under-perform relative to fixed income securities during
certain periods. An adverse event, such as an unfavorable earnings report, may
depress the value of a particular common stock held by the Acquiring Fund. Also,
prices of common stocks
are
sensitive to general movements in the stock market and a drop in the stock
market may depress the price of common stocks to which the Acquiring Fund has
exposure. Common stock prices fluctuate for several reasons including changes in
investors' perceptions of the financial condition of an issuer or the general
condition of the relevant stock market, or when political or economic events
affecting the issuers occur. In addition, common stock prices may be
particularly sensitive to rising interest rates, as the cost of capital rises
and borrowing costs increase. The Acquiring Fund will employ a strategy, as
described below, of writing covered call and put options on common
stocks.
For more
information regarding preferred stocks, convertible securities, warrants and
depository receipts and equity securities of REITs, see "Investment Objectives
and Policies of the Acquiring Fund—Equity Securities" in the Reorganization
Statement of Additional Information.
Options
in General
An option
on a security is a contract that gives the holder of the option, in return for a
premium, the right to buy from (in the case of a call) or sell to (in the case
of a put) the writer of the option the security underlying the option at a
specified exercise or "strike" price. The writer of an option on a security has
the obligation upon exercise of the option to deliver the underlying security
upon payment of the exercise price or to pay the exercise price upon delivery of
the underlying security. Certain options, known as "American style" options may
be exercised at any time during the term of the option. Other options, known as
"European style" options, may be exercised only on the expiration date of the
option.
If an
option written by the Acquiring Fund expires unexercised, the Acquiring Fund
realizes on the expiration date a capital gain equal to the premium received by
the Acquiring Fund at the time the option was written. If an option purchased by
the Acquiring Fund expires unexercised, the Acquiring Fund realizes a capital
loss equal to the premium paid. Prior to the earlier of exercise or expiration,
an exchange-traded option may be closed out by an offsetting purchase or sale of
an option of the same series (type, underlying security, exercise price and
expiration). There can be no assurance, however, that a closing purchase or sale
transaction can be effected when the Acquiring Fund desires. The Acquiring Fund
may sell put or call options it has previously purchased, which could result in
a net gain or loss depending on whether the amount realized on the sale is more
or less than the premium and other transaction costs paid on the put or call
option when purchased. The Acquiring Fund will realize a capital gain from a
closing purchase transaction if the cost of the closing option is less than the
premium received from writing the option, or, if it is more, the Acquiring Fund
will realize a capital loss. If the premium received from a closing sale
transaction is more than the premium paid to purchase the option, the Acquiring
Fund will realize a capital gain or, if it is less, the Acquiring Fund will
realize a capital loss. Net gains from the Acquiring Fund's option strategy will
be short-term capital gains which, for federal income tax purposes, will
constitute net investment company taxable income.
Call Options and
Covered Call Writing.
The Acquiring Fund follows a strategy
known as "covered call option writing," which is a strategy designed to generate
current gains from option premiums as a means to enhance distributions payable
to the Acquiring Fund's shareholders. As of December 31, 2008, this
strategy is the Acquiring Fund's primary option investment
strategy. As the Acquiring Fund writes covered calls over more of its
portfolio, its ability to benefit from capital appreciation becomes more
limited.
As part
of its strategy, it may not sell "naked" call options on individual securities,
i.e.
, options
representing more shares of the stock than are held in the portfolio. A call
option written by the Acquiring Fund on a security is "covered" if the Acquiring
Fund owns the security underlying the call or has an absolute and immediate
right to acquire that security without additional cash consideration (or, if
additional cash consideration is required, cash or other assets determined to be
liquid by the Investment Adviser (in accordance with procedures established by
the Board of Trustees) in such amount are segregated by the Acquiring Fund's
custodian) upon conversion or exchange of other securities held by the Acquiring
Fund. A call option is also covered if the Acquiring Fund holds a call on the
same security as the call written where the exercise price of the call held is
(i) equal to or less than the exercise price of the call written,
or
(ii)
greater than the exercise price of the call written, provided the difference is
maintained by the Acquiring Fund in segregated assets determined to be liquid by
the Investment Adviser as described above.
The
standard contract size for a single option is 100 shares of the common stock.
There are four items needed to identify any option: (1) the underlying security,
(2) the expiration month, (3) the strike price and (4) the type (call or put).
For example, ten XYZ Co. October $40 call options provide the right to purchase
1,000 shares of XYZ Co. on or before October 21, 2008 at $40 per share. A call
option whose strike price is above the current price of the underlying stock is
called "out-of-the-money." Most of the options that will be sold by the
Acquiring Fund are expected to be out-of-the-money, allowing for potential
appreciation in addition to the proceeds from the sale of the option. An option
whose strike price is below the current price of the underlying stock is called
"in-the-money" and will be sold by the Acquiring Fund as a defensive measure to
protect against a possible decline in the underlying stock.
The
following is a conceptual example of a covered call transaction, making the
following assumptions: (1) a common stock currently trading at $37.15 per share;
(2) a six-month call option is written with a strike price of $40 (
i.e.
, 7.7% higher than the
current market price); and (3) the writer receives $2.45 (or 6.6% of the common
stock's value) as premium income. This example is not meant to represent the
performance of any actual common stock, option contract or the Acquiring Fund
itself. Under this scenario, before giving effect to any change in the price of
the stock, the covered-call writer receives the premium, representing 6.6% of
the common stock's value, regardless of the stock's performance over the
six-month period until option expiration. If the stock remains unchanged, the
option will expire and there would be a 6.6% return for the 6-month period. If
the stock were to decline in price by 6.6%, the strategy would "break even,"
thus offering no gain or 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 of 6.6% for a total return of 14.3%. Under this
scenario, the investor would not benefit from any appreciation of the stock
above $40, and thus be limited to a 14.3% total return. The premium income 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 investor's downside
protection is eliminated, and the stock could eventually become
worthless.
For
conventional listed call options, the option's expiration date can be up to nine
months from the date the call options are first listed for trading. Longer-term
call options can have expiration dates up to three years from the date of
listing. It is anticipated that most options that are written against Acquiring
Fund stock holdings will be repurchased prior to the option's expiration date,
generating a gain or loss in the options. If the options were not to be
repurchased, the option holders would exercise their rights and buy the stock
from the Acquiring Fund at the strike price, if the stock traded at a higher
price than the strike price. In general, the Acquiring Fund intends to continue
to hold its common stocks rather than allowing them to be called away by the
option holders. See "Risks Factors and Special Considerations—Risks
Associated with the Acquiring Fund's Option Strategy—Risks Associated with
Options on Securities."
Put
Options.
Put options are contracts that give the holder of the
option, in return for a premium, the right to sell to the writer of the option
the security underlying the option at a specified exercise price at any time
during the term of the option. These strategies may produce a
considerably higher return than the Acquiring Fund's primary strategy of covered
call writing, but involve a higher degree of risk and potential
volatility.
The
Acquiring Fund writes (sells) put options on individual securities only if the
put option is "covered." A put option written by the Acquiring Fund on a
security is "covered" if the Acquiring Fund segregates or earmarks assets
determined to be liquid by the Investment Adviser, as described above, equal to
the exercise price. A put option is also covered if the Acquiring Fund holds a
put on the same security as the put written where the exercise price of the put
held is (i) equal to or greater than the exercise price of the put written, or
(ii) less than the exercise price of the put written, provided the difference is
maintained by the Acquiring Fund in segregated or earmarked assets determined to
be liquid by the Investment Adviser, as described above.
The
following is a conceptual example of a put transaction, making the following
assumptions: (1) a common stock currently trading at $37.15 per share; (2) a
six-month put option written with a strike price of $35.00 (
i.e
., 94.2% of the current
market price); and (3) the writer receives $ 1.10 (or 2.95% of the common
stock's value) as premium income. This example is not meant to represent the
performance of any actual common stock, option contract or the Acquiring Fund
itself. Under this scenario, before giving effect to any change in the price of
the stock, the put writer receives the premium, representing 2.95% of the common
stock's value, regardless of the stock's performance over the six-month period
until the option expires. If the stock remains unchanged, appreciates in value
or declines less than 5.8% in value, the option will expire and there would be a
2.95% return for the 6-month period. If the stock were to decline by 5.8% or
more, the Acquiring Fund would lose an amount equal to the amount by which the
stock's price declined minus the premium paid to the Acquiring Fund. The stock's
price could lose its entire value, in which case the Acquiring Fund would lose
$33.90 ($35.00 minus $1.10).
Options on
Indices.
The Acquiring Fund sells put and call options on
indices of securities. Options on an index differ from options on securities
because (i) the exercise of an index option requires cash payments and does not
involve the actual purchase or sale of securities, (ii) the holder of an index
option has the right to receive cash upon exercise of the option if the level of
the index upon which the option is based is greater, in the case of a call, or
less, in the case of a put, than the exercise price of the option and (iii)
index options reflect price fluctuations in a group of securities or segments of
the securities market rather than price fluctuations in a single
security.
As the
seller of an index put or call option, the Acquiring Fund receives cash (the
premium) from the purchaser. The purchaser of an index put option has the right
to any depreciation in the value of the index below a fixed price (the exercise
price) on or before a certain date in the future (the expiration date). The
purchaser of an index call option has the right to any appreciation in the value
of the index over a fixed price (the exercise price) on or before a certain date
in the future (the expiration date). The Acquiring Fund, in effect, agrees to
accept the potential depreciation (in the case of a put) or sell the potential
appreciation (in the case of a call) in the value of the relevant index in
exchange for the premium. If, at or before expiration, the purchaser exercises
the put or call option sold by the Acquiring Fund, the Acquiring Fund will pay
the purchaser the difference between the cash value of the index and the
exercise price of the index option. The premium, the exercise price and the
market value of the index determine the gain or loss realized by the Acquiring
Fund as the seller of the index put or call option.
The
Acquiring Fund may execute a closing purchase transaction with respect to an
index option it has sold and sell another option (with either a different
exercise price or expiration date or both). The Acquiring Fund's objective in
entering into such a closing transaction will be to optimize net index option
premiums. The cost of a closing transaction may reduce the net index option
premiums realized from the sale of the index option.
The
Acquiring Fund covers its obligations when it sells index options. An index
option is considered "covered" if the Acquiring Fund maintains with its
custodian assets determined to be liquid in an amount equal to the contract
value of the index. An index put option also is covered if the Acquiring Fund
holds a put on the same index as the put written where the exercise price of the
put held is (i) equal to or more than the exercise price of the put written, or
(ii) less than the exercise price of the put written, provided the difference is
maintained by the Acquiring Fund in segregated assets determined to be liquid.
An index call option also is covered if the Acquiring Fund holds a call on the
same index as the call written where the exercise price of the call held is (i)
equal to or less than the exercise price of the call written, or (ii) greater
than the exercise price of the call written, provided the difference is
maintained by the Acquiring Fund in segregated assets determined to be
liquid.
Limitation on
Option Writing Strategy.
The Acquiring Fund generally intends to write
covered call and put options with respect to approximately 45% to 65% of its
total assets, although this percentage may vary from time to time with market
conditions. As of December 31, 2008, the Acquiring Fund had written covered call
and put options with respect to approximately 59% of its total
assets. As the Acquiring Fund writes covered calls and puts over a
greater percentage of its portfolio, its ability to benefit from capital
appreciation becomes more limited. The number of covered put and call
options on securities the
Acquiring
Fund can write is limited by the total assets the Acquiring Fund holds, and
further limited by the fact that all options represent 100 share lots of the
underlying common stock. In connection with its option writing strategy, the
Acquiring Fund does not write "naked" or uncovered put or call options.
Furthermore, the Acquiring Fund's exchange-listed option transactions are
subject to limitations established by each of the exchanges, boards of trade or
other trading facilities on which such options are traded. These limitations
govern the maximum number of options in each class which may be written or
purchased by a single investor or group of investors acting in concert,
regardless of whether the options are written or purchased on the same or
different exchanges, boards of trade or other trading facilities or are held or
written in one or more accounts or through one or more brokers. Thus, the number
of options which the Acquiring Fund may write or purchase may be affected by
options written or purchased by other investment advisory clients of the
Investment Adviser. An exchange, board of trade or other trading facility may
order the liquidation of positions found to be in excess of these limits, and it
may impose certain other sanctions.
Non-U.S.
Securities
The
Acquiring Fund may invest a substantial portion of its portfolio in non-U.S.
securities, which may include securities denominated in U.S. dollars or in
non-U.S. currencies or multinational currency units. The Acquiring Fund may
invest in non-U.S. securities of so-called emerging market issuers. For purposes
of the Acquiring Fund, a company is deemed to be a non-U.S. company if it meets
the following tests: (i) such company was not organized in the United States;
(ii) such company's primary business office is not in the United States; (iii)
the principal trading market for such company's securities is not located in the
United States; (iv) less than 50% of such company's assets are located in the
United States; or (v) 50% or more of such issuer's revenues are derived from
outside the United States. As of December 31, 2008, the Acquiring
Fund had invested 45% of the total assets of its portfolio in non-U.S.
securities. Non-U.S. securities markets generally are not as
developed or efficient as those in the United States. Securities of some
non-U.S. issuers are less liquid and more volatile than securities of comparable
U.S. issuers. Similarly, volume and liquidity in most non-U.S. securities
markets are less than in the United States, and, at times, volatility of price
can be greater than in the United States.
Because
evidence of ownership of such securities usually are held outside the United
States, the Acquiring Fund would be subject to additional risks if it invested
in non-U.S. securities, which include possible adverse political and economic
developments, seizure or nationalization of foreign deposits and adoption of
governmental restrictions which might adversely affect or restrict the payment
of principal and interest on the non-U.S. securities to investors located
outside the country of the issuer, whether from currency blockage or
otherwise.
Since
non-U.S. securities may be purchased with and payable in foreign currencies, the
value of these assets as measured in U.S. dollars may be affected favorably or
unfavorably by changes in currency rates and exchange control
regulations.
Short
Sales
The
Acquiring Fund may make short sales of securities. A short sale is a transaction
in which the Acquiring Fund sells a security it does not own in anticipation
that the market price of that security will decline. The Acquiring Fund may make
short sales for risk management, in order to maintain portfolio flexibility or
to enhance income or gain.
When the
Acquiring Fund makes a short sale, it must borrow the security sold short and
deliver it to the broker-dealer through which it made the short sale as
collateral for its obligation to deliver the security upon conclusion of the
sale. Generally, the Acquiring Fund has to pay a fee to borrow particular
securities and is obligated to pay over any payments received on such borrowed
securities.
The
Acquiring Fund's obligation to replace the borrowed security is secured by
collateral deposited with the broker-dealer, usually cash, U.S. government
securities or other liquid securities. The Acquiring Fund also is required to
designate on its books and records similar collateral with its custodian
to
the
extent, if any, necessary so that the aggregate collateral value is at all times
at least equal to the current market value of the security sold short. Depending
on arrangements made with the broker-dealer from which it borrowed the security
regarding payment over of any payments received by the Acquiring Fund on such
security, the Acquiring Fund may not receive any payments (including interest)
on its collateral deposited with such broker-dealer.
If the
price of the security sold short increases between the time of the short sale
and the time the Acquiring Fund replaces the borrowed security, the Acquiring
Fund will incur a loss; conversely, if the price declines, the Acquiring Fund
will realize a gain. Any gain will be decreased, and any loss increased, by the
transaction costs described above. Although the Acquiring Fund's gain is limited
to the price at which it sold the security short, its potential loss is
theoretically unlimited.
The
Acquiring Fund does not make a short sale if, after giving effect to such sale,
the market value of all securities sold short exceeds 25% of the value of its
total assets or the Acquiring Fund's aggregate short sales of a particular class
of securities of an issuer exceeds 25% of the issuer's outstanding securities of
that class. The Acquiring Fund may also make short sales "against the box"
without respect to such limitations. In this type of short sale, at the time of
the sale, the Acquiring Fund owns or has the immediate and unconditional right
to acquire at no additional cost the identical security.
Securities
Lending
The
Acquiring Fund may lend its portfolio securities to banks or dealers which meet
the creditworthiness standards established by the Board of Trustees of the
Acquiring Fund ("Qualified Institutions"). By lending its portfolio securities,
the Acquiring Fund attempts to increase its income through the receipt of
interest on the loan. Any gain or loss in the market price of the securities
loaned that may occur during the term of the loan will be for the account of the
Acquiring Fund. The Acquiring Fund may lend its portfolio securities so long as
the terms and the structure of such loans are not inconsistent with requirements
of the 1940 Act, which currently require that (i) the borrower pledge and
maintain with the Acquiring Fund collateral consisting of cash, a letter of
credit issued by a domestic U.S. bank, or securities issued or guaranteed by the
U.S. government having a value at all times not less than 100% of the value of
the securities loaned, (ii) the borrower add to such collateral whenever the
price of the securities loaned rises (
i.e.
, the value of the loan
is "marked to the market" on a daily basis), (iii) the loan be made subject to
termination by the Acquiring Fund at any time and (iv) the Acquiring Fund
receive reasonable interest on the loan (which may include the Acquiring Fund's
investing any cash collateral in interest bearing short-term investments), any
distributions on the loaned securities and any increase in their market value.
The Acquiring Fund does not lend portfolio securities if, as a result, the
aggregate of such loans exceeds 33
1
/3
% of the value of the
Acquiring Fund's total assets (including such loans). Any loan
arrangements made by the Acquiring Fund complies with all other applicable
regulatory requirements, including the rules of the NYSE, which rules presently
require the borrower, after notice, to redeliver the securities within the
normal settlement time of five business days. All relevant facts and
circumstances, including the creditworthiness of the Qualified Institution, are
monitored by the Investment Adviser, and are considered in making decisions with
respect to lending securities, subject to review by the Acquiring Fund's Board
of Trustees.
The
Acquiring Fund may pay reasonable negotiated fees in connection with loaned
securities, so long as such fees are set forth in a written contract and
approved by the Acquiring Fund's Board of Trustees. In addition, voting rights
may pass with the loaned securities, but if a material event were to occur
affecting such a loan, the loan must be called and the securities
voted.
Short-Term
Debt Securities; Temporary Defensive Position
During
periods in which the Investment Adviser determines that it is temporarily unable
to follow the Acquiring Fund's investment strategy or that it is impractical to
do so or pending re-investment of proceeds received in connection with the sale
of a security, the Acquiring Fund may deviate from its investment strategy and
invest all or any portion of its assets in cash or cash equivalents. The
Investment Adviser’s determination that it is temporarily unable to follow the
Acquiring Fund’s investment strategy or
that it
is impractical to do so will generally occur only in situations in which a
market disruption event has occurred and where trading in the securities
selected through application of the Acquiring Fund’s investment strategy is
extremely limited or absent. In such a case, shares of the Acquiring Fund may be
adversely affected and the Acquiring Fund may not pursue or achieve its
investment objective. The Investment Adviser currently anticipates that these
are the only circumstances in which the Acquiring Fund will invest in income
securities.
Strategic
Transactions
In
addition to the option strategy discussed above, the Acquiring Fund may, but is
not required to, use various strategic transactions described below to
facilitate portfolio management, mitigate risks and generate total return. The
Acquiring Fund does not currently anticipate engaging in strategic transactions
as a matter of course, but rather will consider engaging in strategic
transactions when attractive opportunities become available. Such strategic
transactions are generally accepted under modern portfolio management and are
regularly used by many mutual funds, closed-end funds and other institutional
investors. Although the Investment Adviser seeks to use the practices to further
the Acquiring Fund’s investment objectives, no assurance can be given that these
practices will achieve this result.
The
Acquiring Fund may purchase and sell derivative instruments such as
exchange-listed and over-the-counter put and call options on securities,
financial futures, equity indices and other financial instruments, purchase and
sell financial futures contracts and options thereon and engage in swaps. The
Acquiring Fund also may purchase derivative instruments that combine features of
these instruments. Collectively, all of the above are referred to as “Strategic
Transactions.” The Acquiring Fund generally seeks to use Strategic Transactions
as a portfolio management or hedging technique to seek to protect against
possible adverse changes in the market value of securities held in or to be
purchased for the Acquiring Fund’s portfolio, protect the value of the Acquiring
Fund’s portfolio, facilitate the sale of certain securities for investment
purposes, or establish positions in the derivatives markets as a temporary
substitute for purchasing or selling particular securities. The Acquiring Fund
may use Strategic Transactions to enhance potential gain although the Acquiring
Fund will commit variation margin for Strategic Transactions that involve
futures contracts only in accordance with the rules of the Commodity Futures
Trading Commission.
Strategic
Transactions have risks, including the imperfect correlation between the value
of such instruments and the underlying assets, the possible default of the other
party to the transaction or illiquidity of the derivative instruments.
Furthermore, the ability to successfully use Strategic Transactions depends on
the Investment Adviser’s ability to predict pertinent market movements, which
cannot be assured. Thus, the use of Strategic Transactions may result in losses
greater than if they had not been used, may require the Acquiring Fund to sell
or purchase portfolio securities at inopportune times or for prices other than
current market values, may limit the amount of appreciation the Acquiring Fund
can realize on an investment, or may cause the Acquiring Fund to hold a security
that it might otherwise sell. Additionally, amounts paid by the Acquiring Fund
as premiums and cash or other assets held in margin accounts with respect to
Strategic Transactions are not otherwise available to the Acquiring Fund for
investment purposes. A more complete discussion of Strategic Transactions is
contained in the Reorganization Statement of Additional
Information.
OTHER INVESTMENT
POLICIES
The
Acquiring Fund has adopted certain other policies as set forth
below:
Debt
Securities
The
Acquiring Fund may invest up to 20% of its total assets in debt securities,
including debt securities issued by companies located in emerging
markets. The value of the debt securities held by the Acquiring Fund
generally will fluctuate with (i) changes in the perceived creditworthiness of
the issuers of those securities, (ii) movements in interest rates and (iii)
changes in the relative values of the currencies in which the Acquiring Fund's
investments are denominated with respect to the U.S. dollar. As of
December
31, 2008,
the Acquiring Fund had 0.00% of its total assets invested in debt securities,
including debt securities issued by companies located in emerging
markets.
Many of
the emerging market debt securities that could be held by the Acquiring Fund are
not registered with the SEC, nor are the issuers thereof subject to the SEC's
reporting requirements. Accordingly, there may be less publicly available
information concerning foreign issuers of securities held by the Acquiring Fund
than is available concerning U.S. companies. Foreign companies, and in
particular those companies in emerging markets, may not be subject to uniform
accounting, auditing and financial reporting standards or to other regulatory
requirements comparable to those applicable to U.S. companies. As a result, the
Acquiring Fund may have to rely to a greater degree on the Investment Adviser's
financial and credit analysis with regard to the risks associated with investing
in debt securities of foreign issuers.
Non-Investment
Grade Securities
The
Acquiring Fund may invest up to 10% of its total assets in securities rated
below investment grade, such as those rated Ba or lower by Moody’s Investors
Service, Inc. (“Moody’s”) and BB or lower by Standard & Poor’s Ratings
Group, a division of The McGraw-Hill Companies, Inc. (“S&P”) or Fitch
Ratings (“Fitch”) or securities comparably rated by other rating agencies or in
unrated securities determined by BlackRock to be of comparable quality.
Securities rated Ba by Moody’s are judged to have speculative elements, their
future cannot be considered as well assured and often the protection of interest
and principal payments may be very moderate. Securities rated BB by S&P or
Fitch are regarded as having predominantly speculative characteristics and,
while such obligations have less near-term vulnerability to default than other
speculative grade debt, they face major ongoing uncertainties or exposure to
adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. Securities
rated C are regarded as having extremely poor prospects of ever attaining any
real investment standing. Securities rated D are in default and the payment of
interest and/or repayment of principal is in arrears. The Acquiring Fund may
purchase securities rated as low as D or unrated securities deemed by the
Investment Adviser to be of comparable quality. When the Investment Adviser
believes it to be in the best interests of the Acquiring Fund’s shareholders,
the Acquiring Fund will reduce its investment in lower grade
securities.
Lower
grade securities, though high yielding, are characterized by high risk. They may
be subject to certain risks with respect to the issuing entity and to greater
market fluctuations than certain lower yielding, higher rated securities. The
secondary market for lower grade securities may be less liquid than that of
higher rated securities. Adverse conditions could make it difficult at times for
the Acquiring Fund to sell certain securities or could result in lower prices
than those used in calculating the Acquiring Fund’s net asset
value.
The
prices of debt securities generally are inversely related to interest rate
changes; however, the price volatility caused by fluctuating interest rates of
securities also is inversely related to the coupon of such securities.
Accordingly, lower grade securities may be relatively less sensitive to interest
rate changes than higher quality securities of comparable maturity, because of
their higher coupon. This higher coupon is what the investor receives in return
for bearing greater credit risk. The higher credit risk associated with lower
grade securities potentially can have a greater effect on the value of such
securities than may be the case with higher quality issues of comparable
maturity, and will be a substantial factor in the Acquiring Fund’s relative
share price volatility.
Lower
grade securities may be particularly susceptible to economic downturns. It is
likely that an economic recession could disrupt severely the market for such
securities and may have an adverse impact on the value of such securities. In
addition, it is likely that any such economic downturn could adversely affect
the ability of the issuers of such securities to repay principal and pay
interest thereon and increase the incidence of default for such
securities.
The
ratings of Moody’s, S&P, Fitch and the other rating agencies represent their
opinions as to the quality of the obligations which they undertake to rate.
Ratings are relative and subjective and, although ratings may be useful in
evaluating the safety of interest and principal payments, they do not evaluate
the
market
value risk of such obligations. Although these ratings may be an initial
criterion for selection of portfolio investments, the Investment Adviser also
will independently evaluate these securities and the ability of the issuers of
such securities to pay interest and principal. To the extent that the Acquiring
Fund invests in lower grade securities that have not been rated by a rating
agency, the Acquiring Fund’s ability to achieve its investment objective will be
more dependent on the Investment Adviser’s credit analysis than would be the
case when the Acquiring Fund invests in rated securities.
COMPARISON OF THE
FUNDS
Investment
Objectives
The
investment objectives of BFD and the Acquiring Fund are the same and the
investment objectives of BWC and the Acquiring Fund are substantially
the same, but not identical. The investment objective of BFD and BOE
is primarily to seek current income and current gains, with a secondary
objective of long-term capital appreciation.
The investment objective
of BWC is primarily to seek current income, dividends and gains, with a
secondary objective of long-term capital appreciation. The Funds'
investment objectives are not a fundamental policy and may be changed without
prior shareholder approval.
Investment
Strategies and Restrictions
BOE and
BFD, under normal market conditions, will invest at least 80% of their
respective total assets in equity securities or options on equity securities or
indices or sectors of equity securities. BOE and BFD may invest up to
25% of its total assets in equity securities of issuers in emerging
countries. BOE may invest up to 20% of its total assets in debt
securities, including debt securities issued by companies located in emerging
markets and may invest up to 10% of its total assets in non-investment grade
debt securities, commonly known as "junk bonds."
BWC seeks
to generate current dividends and income by investing in equity securities that
pay dividends and also by investing up to 25% of its total assets in debt
securities from time to time when BWC believes that it is advantageous to do
so.
BWC may also
invest up to 25% of its total assets in equity securities of issuers in emerging
countries. Under normal market conditions, BWC invests at least 75%
of its total assets in equity securities or options on equity securities or
indices or sectors of equity securities. Moreover, BWC may invest up
to 25% of its total assets in debt securities of issuers located anywhere in the
world and including securities rated below investment grade.
A further
comparison of the investment strategies and significant operating policies used
by the Funds as of the date of the Special Meeting is set forth in the table
below. The investment strategies and significant operating policies
of the combined fund will be those of BOE.
|
Acquiring Fund
|
Target Funds
|
|
BOE
|
BFD
|
BWC
|
|
General
·
Invests
at least 80% of its total assets in equity securities or options on equity
securities or indices or sectors of equity securities, under normal market
conditions.
·
May
invest up to 20% of its total assets in debt securities, including debt
securities issued by companies located in emerging markets.
·
May
invest up to 10% of its total assets in non-investment grade debt
securities, commonly known as "junk bonds."
|
General
·
Invests
at least 80% of its total assets in equity securities or options on equity
securities or indices or sectors of equity securities, under normal market
conditions.
|
General
·
Invests
at least 75% of its total assets in equity securities or options on equity
securities or indices or sectors of equity securities, under normal market
conditions.
·
May
invest up to 25% of its total assets in debt securities of issuers located
anywhere in the world and including securities rated below investment
grade.
|
|
|
|
|
|
Non-U.S.
Investments
·
May
invest in companies located anywhere in the world.
·
Invests
at least 30% of its total assets at the time of investment in the equity
securities of non-U.S. issuers, under normal market
conditions.
·
May
invest up to 25% of its total assets in equity securities of issuers in
emerging countries.
·
Investment
strategy will cause it to invest in issuers located in a number of
countries throughout the world, but the actual number of countries
represented in BOE's portfolio will vary over time.
·
Invests
in the equity securities of issuers in at least three different countries,
including the United States.
·
As
of December 31, 2008, the investment philosophy caused it to invest in
issuers located in 28 countries globally, with less than 55% of BOE's
equity assets invested in the United States.
|
Non-U.S.
Investments
·
May
invest in the securities of non-U.S. companies without limit.
·
Invests
at least 40% of its total assets in securities of non-U.S. companies,
unless market conditions are not deemed favorable by the BFD Advisors, in
which case BFD would invest at least 30% of its total assets in securities
of non-U.S. companies.
·
May
invest up to 25% of its total assets in securities of emerging market
issuers.
·
Invests
in issuers located in a number of countries throughout the world, but the
actual number of countries represented in BFD's portfolio will vary over
time.
·
As
of December 31, 2008, the investment philosophy caused it to invest in
issuers located in 24 countries globally, with less than 51% of BFD's
equity assets invested in the United States.
|
Non-U.S.
Investments
·
May
invest in companies located anywhere in the world.
·
Invests
at least 40% of its assets in issuers located outside of the United
States.
·
May
invest up to 25% of its total assets in equity securities of issuers in
emerging market countries.
·
Investment
strategy will cause it to invest in issuers located in a number of
countries throughout the world, but the actual number of countries
represented in BWC's portfolio will vary over time.
·
Invests
in the equity securities of issuers in at least ten different countries,
including the United States.
·
As
of December 31, 2008, the investment philosophy caused it to invest in
issuers located in 26 countries globally, with less than 54% of BWC's
equity assets invested in the United
States.
|
|
Leverage
·
BOE
currently does not intend to incur indebtedness or issue preferred shares
for investment purposes.
|
Leverage
·
BFD
currently does not intend to incur indebtedness or issue preferred shares
for investment purposes.
|
Leverage
·
BWC
currently does not intend to incur indebtedness or issue preferred shares
for investment purposes.
|
|
|
|
|
|
Target
Stocks
·
May
invest in common stocks, preferred stocks, convertible securities,
warrants, depository receipts and equity interests in REITs.
·
May
invest in companies of any size market capitalization and in companies
conducting initial public offerings.
|
Target
Stocks
·
May
invest in common stocks, preferred stocks, convertible securities,
warrants, depository receipts and equity interests in REITs.
·
May
hold or have exposure to common stocks of issuers of any size, including
small and medium capitalization stocks, and to issuers in any industry or
sector.
|
Target
Stocks
·
May
invest in common stocks, preferred stocks, convertible securities,
warrants, depository receipts and equity interests in REITs.
·
May
invest in companies of any size market capitalization and in companies
conducting initial public offerings.
|
|
|
|
|
|
Option
Strategy
·
Employs
a strategy of writing (selling) covered call options on a portion of the
common stocks in its portfolio and writing (selling) covered put
options.
·
May,
to a lesser extent, write (sell) covered call and put options on indices
of securities and sectors of securities.
·
A
substantial portion of the options written by BOE may be OTC
Options.
·
Generally
writes covered put and call options with respect to approximately 45% to
65% of its total assets, although this percentage may vary from time to
time with market conditions.
|
Option
Strategy
·
Employs
a strategy of writing (selling) covered call options on a portion of the
common stocks in its portfolio and writing (selling) covered put
options.
·
May,
to a lesser extent, write (sell) covered call and put options on indices
of securities and sectors of securities.
·
A
substantial portion of the options written by BFD may be OTC
Options
·
Generally
writes covered put and call options with respect to approximately 45% to
65% of its total assets, although this percentage may vary from time to
time with market conditions.
|
Option
Strategy
·
Employs
a strategy of writing (selling) covered call and put options on individual
common stocks.
·
May,
to a lesser extent, pursue a strategy that includes the writing (selling)
of both covered call and put options on indices of securities and sectors
of securities.
·
A
substantial portion of the options written by BWC may be OTC
Options.
·
Generally
writes covered put and call options with respect to approximately 50% to
60% of its total assets, although this percentage may vary from time to
time with market conditions.
|
|
|
|
|
|
Strategy
·
The
Investment Adviser seeks to invest in companies that it believes have
sizeable market opportunities, global, regional or local competitive
advantages, sound business models and financial strength, proven
management teams and compelling relative and absolute
valuations.
|
Strategy
·
The
Investment Adviser seeks to invest in companies that it believes have
sizeable market opportunities, global, regional or local competitive
advantages, sound business models and financial strength, proven
management teams and compelling relative and absolute
valuations.
|
Strategy
·
The
Investment Adviser and BFM, the sub-advisor to BWC, seek to invest in
companies that they believe have sizeable market opportunities, global,
regional or local competitive advantages, sound business models and
financial strength, proven management teams and compelling relative and
absolute valuations.
|
|
|
|
|
|
Dividends
·
Intends
to make regular quarterly cash distributions of all or a portion of its
investment company taxable income to common shareholders.
|
Dividends
·
Intends
to make regular quarterly cash distributions of all or a portion of its
investment company taxable income to common shareholders.
|
Dividends
·
Intends
to make regular quarterly cash distributions of all or a portion of its
investment company taxable income to common
shareholders.
|
The
fundamental investment restrictions of the Funds are identical and, prior to
issuance of any preferred stock, may not be changed without the approval of the
holders of a majority of a Fund's outstanding common shares (which for this
purpose and under the 1940 Act means the lesser of (i) 67% of the common shares
represented at a meeting at which more than 50% of the outstanding common shares
are represented or (ii) more than 50% of the outstanding
shares). Subsequent to the issuance of a class of preferred stock,
the following investment restrictions may not be changed without the approval of
a majority of the outstanding common shares and of the preferred stock, voting
together as a class, and the approval of a majority of the outstanding shares of
preferred stock, voting separately by class. Under the fundamental investment
restrictions, the Funds may not:
(1) invest
25% or more of the value of its total assets in any single
industry;
(2) with
respect to 75% of its total assets, invest more than 5% of the value of its
total assets in the securities of any single issuer or purchase more than 10% of
the outstanding securities of any one issuer;
(3) issue
senior securities or borrow money other than as permitted by the 1940 Act or
pledge its assets other than to secure such issuances or in connection with
hedging transactions, short sales, securities lending, when issued and forward
commitment transactions and similar investment strategies;
(4) make
loans of money or property to any person, except through loans of portfolio
securities, the purchase of debt securities or the entry into repurchase
agreements;
(5) underwrite
the securities of other issuers, except to the extent that, in connection with
the disposition of portfolio securities or the sale of its own securities, the
Funds may be deemed to be an underwriter;
(6) purchase
or sell real estate, except that the Funds may invest in securities of companies
that deal in real estate or are engaged in the real estate business, including
real estate investment trusts and real estate operating companies, and
instruments secured by real estate or interests therein and the Funds may
acquire, hold and sell real estate acquired through default, liquidation, or
other distributions of an interest in real estate as a result of the Funds'
ownership of such other assets; or
(7) purchase
or sell commodities or commodity contracts for any purpose except as, and to the
extent, permitted by applicable law without the Funds becoming subject to
registration with the Commodity Futures Trading Commission (the "CFTC") as a
commodity pool.
The Funds
are also subject to the following non-fundamental restrictions and policies,
which may be changed by their Boards of Trustees. The Funds may
not:
(1) make
any short sale of securities except in conformity with applicable laws, rules
and regulations and unless after giving effect to such sale, the market value of
all securities sold short does not exceed 25% of the value of the Funds' total
assets and the Funds' aggregate short sales of a particular class of securities
of an issuer does not exceed 25% of the then outstanding securities of that
class. The Funds may also make short sales "against the box" without respect to
such limitations. In this type of short sale, at the time of the sale the Funds
own or have the immediate and unconditional right to acquire at no additional
cost the identical security;
(2) purchase
securities of open-end or closed-end investment companies except in compliance
with the 1940 Act or any exemptive relief obtained thereunder. Under the 1940
Act, the Funds may invest up to 10% of its total assets in the aggregate in
shares of other investment companies and up to 5% of its total assets in any one
investment company, provided the investment does not represent more than 3% of
the voting stock of the acquired investment company at the time such shares are
purchased. As a shareholder in any investment company, the Funds will bear its
ratable share of that
investment
company's expenses, and will remain subject to payment of the Funds advisory
fees and other expenses with respect to assets so invested. Holders of common
shares will therefore be subject to duplicative expenses to the extent the Funds
invest in other investment companies. In addition, the securities of other
investment companies may be leveraged and will therefore be subject to the risks
of leverage. The net asset value and market value of leveraged shares will be
more volatile and the yield to shareholders will tend to fluctuate more than the
yield generated by unleveraged shares;
(3) with
respect to each of the Acquiring Fund and BFD, as of the date of the Special
Meeting, under normal market conditions, invest less than 80% of its total
assets in equity securities of companies located in countries throughout the
world or options on equity securities or indices of equity securities; each of
the Acquiring Fund and BFD will provide its shareholders with notice at least 60
days prior to changing this non-fundamental policy of the Acquiring Fund unless
such change was previously approved by shareholders;
(4) solely
with respect to BWC, under normal market conditions, invest less than 75% of its
total assets in equity securities or options on equity securities or indices or
sectors of equity securities, will provide shareholders with notice at least 60
days prior to changing this non-fundamental policy of BWC unless such change was
previously approved by shareholders; and
(5) issue
senior securities or borrow money for investment purposes (except that, for the
avoidance of doubt, the Funds may engage in hedging transactions, short sales,
securities lending, when issued or forward commitment transactions and similar
investment strategies).
In
addition, to comply with U.S. federal income tax requirements for qualification
as a RIC, each Fund's investments will be limited in a manner such that at the
close of each quarter of each taxable year (a) no more than 25% of the value of
the Fund's total assets are invested (i) in the securities (other than U.S.
government securities or securities of other RIC) of a single issuer, (ii) the
securities of two or more issuers controlled by the Fund and engaged in the same
or similar trades or businesses or related trades or businesses or (iii) in the
securities of one or more "qualified publicly traded partnerships" (as defined
under Section 851(h) of the Code) and (b) with regard to at least 50% of the
value of the Fund's total assets, no more than 5% of the value of its total
assets are invested in the securities (other than U.S. government securities or
securities of other regulated investment companies) of a single issuer and no
investment in a single issuer represents more than 10% of the outstanding voting
securities of such issuer. These tax-related limitations may be changed by the
Trustees to the extent appropriate in light of changes to applicable U.S.
federal income tax requirements.
The
percentage limitations applicable to the Funds' portfolio described in the
prospectus and this Reorganization Statement of Additional Information apply
only at the time of investment and the Funds will not be required to sell
securities due to subsequent changes in the value of securities it
owns.
MANAGEMENT OF THE
FUNDS
The
Board of Trustees
The Board
of Trustees of each Fund is responsible for the overall supervision of the
operations of its respective Fund and performs the various duties imposed on
Trustees of investment companies by the 1940 Act and under Delaware
law. A list of the Trustees, a brief biography for each Trustee and
additional information relating to the Boards of Trustees are included in the
Reorganization Statement of Additional Information.
The
Investment Adviser
BlackRock
Advisors, LLC, located at 100 Bellevue Parkway, Wilmington, Delaware 19809,
serves as the Investment Adviser to each Fund. The Investment Adviser
is an indirect, wholly owned subsidiary of BlackRock, Inc. Pursuant
to an investment management agreement between the Investment
Adviser
and the Acquiring Fund, the Acquiring Fund has agreed to pay for the investment
advisory services and facilities provided by the Investment Adviser a fee
payable monthly in arrears at an annual rate equal to 1.00% of the average
weekly value of the Acquiring Fund’s net assets (the "Management
Fee"). In addition, with the approval of the Board of Trustees,
including a majority of the Independent Trustees, a pro rata portion of the
salaries, bonuses, health insurance, retirement benefits and similar employment
costs for the time spent on the Acquiring Fund operations (other than the
provision of services required under the investment management agreement) of all
personnel employed by the Investment Adviser who devote substantial time to the
Acquiring Fund operations may be reimbursed, at cost to the Investment Adviser.
The Investment Adviser may be reimbursed for employees that provide pricing,
secondary market support and compliance services to the Acquiring Fund, subject
to the approval of the Board of Trustees including a majority of the Independent
Trustees.
In
addition to the Management Fee of the Investment Adviser, the Acquiring Fund
pays all other costs and expenses of its operations, including compensation of
its Trustees (other than those affiliated with the Investment Adviser),
custodian, transfer and dividend disbursing agent expenses, legal fees, rating
agency fees, listing fees and expenses, fees and expenses of independent
auditors, expenses of repurchasing shares, expenses of preparing, printing and
distributing shareholder reports, notices, proxy statements and reports to
governmental agencies and taxes, if any.
BIM, the
sub-advisor for BFD, is located at 800 Scudders Mill Road, Plainsboro, New
Jersey 08536 and is a wholly-owned subsidiary of
BlackRock, Inc. Pursuant to an investment management agreement
between the Investment Adviser and BFD, BFD has agreed to pay for the investment
advisory services and facilities provided by the Investment Adviser a management
fee at an annual rate equal to 1.00% of the average daily value of BFD's net
assets. The Investment Adviser will pay a sub-advisory fee to BIM equal to 74%
of the management fee received by the Investment Adviser.
BFM, the
sub-advisor for BWC, is located at 40 East 52nd Street, New York, New York 10022
and is a wholly owned subsidiary of BlackRock, Inc. Pursuant to an
investment management agreement between the Investment Adviser and BWC, BWC has
agreed to pay for the investment advisory services and facilities provided by
the Investment Adviser a fee payable monthly in arrears at an annual rate equal
to 1.00% of the average weekly value of BWC’s net assets. The
Investment Adviser will pay a sub-advisory fee to BFM equal to 50% of the
management fee received by the Investment Adviser.
Currently,
the Acquiring Fund does not have a sub-advisor. After the
Reorganizations, the Acquiring Fund does not expect to enter into a sub-advisory
agreement.
A
discussion regarding the basis for the approval of the investment management
agreements by the Boards of Trustees of the Funds are available in the Funds'
reports to shareholders for the period ending October 31, 2008.
Portfolio
Management
The
Investment Adviser serves as the investment adviser for each of the Funds and is
expected to continue to serve as investment adviser for the combined
fund. As of the date of the Special Meeting, each Fund will be
co-managed by the Investment Adviser's Global Opportunities Team and
Boston-based Equity Derivatives Team, which will continue to co-manage the
combined fund following the Reorganizations. A description of the
portfolio managers for each of BFD, BWC and BOE is discussed below.
As of the
date of the Special Meeting, each Fund will be managed by a team of investment
professionals comprised of Thomas P. Callan, CFA, Managing Director at
BlackRock, Jean M. Rosenbaum, CFA, Managing Director at BlackRock, Michael D.
Carey, CFA, Managing Director at BlackRock and Kyle G. McClements, CFA, Director
at BlackRock. Messrs. Callan and Carey and Ms. Rosenbaum are members
of BlackRock’s Global Opportunities equity team and are or will be,
respectively, the Acquiring Fund’s, BWC's and BFD's portfolio managers
responsible for the day-to-day management of each Fund’s equity component and
the selection of its investments. Mr. McClements is a member of
BlackRock’s US Equity trading group and is responsible for implementing the
options strategy for each
Fund’s
portfolio. Messrs. Callan, Carey and McClements and Ms. Rosenbaum
have been members of each Fund’s portfolio management team since
2005.
Thomas P.
Callan, CFA, Managing Director and senior portfolio manager, is head of
BlackRock’s Global Opportunities equity team. He is lead manager for all global
small cap portfolios and is chief strategist for all of the team’s portfolios.
Mr. Callan has been a portfolio manager with BlackRock since 1998.
Jean M.
Rosenbaum, CFA, Managing Director and portfolio manager, is a member of
BlackRock’s Global Opportunities equity team. She is a portfolio manager for the
US Opportunities portfolios and a strategist for all of the team’s products. Ms.
Rosenbaum has been a portfolio manager with BlackRock since 1998.
Michael
D. Carey, CFA, Managing Director and portfolio manager, is a member of
BlackRock’s Global Opportunities equity team. He is a portfolio manager for
international small cap equity portfolios and a strategist for all of the team’s
products. Mr. Carey has been a portfolio manager with BlackRock since
1998.
Kyle G.
McClements, CFA, Director and equity derivatives trader, is a member of the US
equity trading group. Prior to joining BlackRock in 2005, Mr. McClements was a
Vice President and senior derivatives strategist responsible for equity
derivative strategy and trading in the Quantitative Equity Group at State Street
Research. Prior to joining State Street Research in 2004, Mr. McClements was a
senior trader/analyst at Deutsche Asset Management, responsible for derivatives,
equity program, technology and energy sector, and foreign exchange
trading.
BWC is
also managed by Andrew Gordon, Managing Director at BlackRock. Mr.
Gordon is head of BlackRock's global bond team within the Fixed Income Portfolio
Management Group and is responsible for BWC’s debt component. Mr.
Gordon has been a member of BWC's portfolio management team since
2005.
Andrew
Gordon, Managing Director and portfolio manager, is head of BlackRock's global
bond team within the Fixed Income Portfolio Management Group. His
responsibilities include developing and implementing strategies in the
non-dollar and emerging markets sectors of the fixed income market. Mr. Gordon
has been a portfolio manager with BlackRock since 1996.
The
Reorganization Statement of Additional Information provides additional
information about the portfolio managers' compensation, other accounts managed
by the portfolio managers, and the portfolio managers' ownership of securities
in each Fund.
Portfolio
Transactions with Affiliates
The
Investment Adviser may place portfolio transactions, to the extent permitted by
law, with brokerage firms affiliated with the Funds and the Investment Adviser,
if it reasonably believes that the quality of execution and the commission are
comparable to that available from other qualified firms.
Legal
Proceedings
There are
no material pending legal proceedings against the Funds or the Investment
Adviser.
Other
Service Providers
The
professional service providers for the Funds are as follows:
|
|
|
|
|
|
Investment
Adviser
|
BlackRock
Advisors, LLC
|
BlackRock
Advisors, LLC
|
BlackRock
Advisors, LLC
|
|
Sub-advisor(s)
|
N/A
|
BlackRock
Investment Management, LLC
|
BlackRock
Financial Management, Inc.
|
|
Custodian
|
The
Bank of New York Mellon
|
The
Bank of New York Mellon
|
The
Bank of New York Mellon
|
|
Transfer
Agent, Dividend Disbursing Agent and Registrar
|
The
Bank of New York Mellon
|
The
Bank of New York Mellon
|
The
Bank of New York Mellon
|
|
Accounting
Services Provider
|
The
Bank of New York Mellon
|
The
Bank of New York Mellon
|
The
Bank of New York Mellon
|
|
Independent
Auditors
|
|
|
|
|
Fund
Counsel
|
Skadden,
Arps, Slate, Meagher & Flom LLP
|
Skadden,
Arps, Slate, Meagher & Flom LLP
|
Skadden,
Arps, Slate, Meagher & Flom LLP
|
|
Counsel
to the Independent Trustees
|
Debevoise
& Plimpton LLP
|
Debevoise
& Plimpton LLP
|
Debevoise
& Plimpton LLP
|
It is not
anticipated that the Reorganizations will result in any change in the
organizations providing services to BOE as set forth above. As a
result of the Reorganizations, the service providers to BOE are anticipated to
be the service providers to the combined fund.
Capitalization
The Board
of Trustees of each Fund may authorize separate classes of common shares
together with such designation of preferences, rights, voting powers,
restrictions, limitations, qualifications or terms as may be determined from
time to time by the Trustees. The table below sets forth the
capitalization of the Target Funds and the Acquiring Fund as of October 31,
2008, and the pro forma capitalization of the combined fund as if the
Reorganizations had occurred on that date.
Capitalization
as of October 31, 2008 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma
Combined Fund
(
BFD
and
BWC
into
BOE
)
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net As
set
s (a)
|
|
$
|
227,834,570
|
|
|
$
|
480,405,183
|
|
|
$
|
560,360,471
|
|
|
$
|
1,26
6
,4
3
5,
046
|
|
|
Common shares
Outstanding
|
|
|
12,634,026
|
|
|
|
44,995,192
|
|
|
|
52,162,868
|
|
|
|
70,300
,
871
|
|
|
Net Asset
Value
|
|
$
|
18.03
|
|
|
$
|
10.68
|
|
|
$
|
10.74
|
|
|
$
|
18.01
|
|
___________
|
(a)
|
Based
on the number of outstanding common shares listed in "Outstanding
Securities of the Funds" table
below.
|
|
(b)
|
Reflects
non-recurring aggregate estimated Reorganization expenses of $906,408 of
which $238,992 is attributable to BOE, $316,585 is attributable to BFD and
$350,831 is attributable to BWC.
|
Outstanding
Securities of the Funds as of October 31, 2008
|
|
|
|
|
Amount Held by Fund for its Own
Account
|
|
Amount Outstanding Exclusive of
Amount Shown in Previous Column
|
|
|
|
|
|
|
|
|
|
BFD
|
|
unlimited
|
|
6,021
|
|
44,989,171
|
|
BWC
|
|
unlimited
|
|
8,028
|
|
52,154,840
|
|
BOE
|
|
unlimited
|
|
4,817
|
|
12,629,209
|
|
|
|
|
|
|
|
|
ADDITIONAL INFORMATION ABOUT
COMMON SHARES
OF THE FUNDS
General
Common
shareholders of a Fund are entitled to share equally in dividends declared by
the Fund's Board of Trustees as payable to holders of the common shares and in
the net assets of the Fund available for distribution to holders of the common
shares after payment of any preferential amounts payable to preferred
shareholders. Common shareholders do not have preemptive or
conversion rights and a Fund's common shares are not redeemable. The
outstanding common shares of each Fund are fully paid and
nonassessable. So long as shares of preferred stock of a Fund, if
any, are outstanding, holders of the Fund's common shares will not be entitled
to receive any dividends or other distributions from the Fund unless all
accumulated dividends on the Fund's outstanding shares of preferred stock have
been paid, and unless asset coverage (as defined in the 1940 Act) with respect
to such shares of preferred stock would be at least 200% after giving effect to
such distributions. The Funds do not currently have any preferred stock
outstanding.
Purchase
and Sale
Purchase
and sale procedures for the common shares of each of the Funds are
identical. Investors typically purchase and sell common shares of the
Funds through a registered broker-dealer on the NYSE, thereby incurring a
brokerage commission set by the broker-dealer. Alternatively,
investors may purchase or sell common shares of the Funds through privately
negotiated transactions with existing shareholders.
Common
Share Price Data
The
following tables set forth the high and low market prices for common shares of
each Fund on the NYSE, for each full quarterly period within each Fund's two
most recent fiscal years, along with the net asset value and discount or premium
to net asset value for each quotation.
BFD
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October
31,
2008
|
|
$13.93
|
|
$7.36
|
|
$15.21
|
|
$9.42
|
|
-7.44%
|
|
-28.46%
|
|
July
31,
2008
|
|
$16.63
|
|
$12.65
|
|
$17.27
|
|
$14.58
|
|
2.21%
|
|
-13.96%
|
|
April
30,
2008
|
|
$16.67
|
|
$14.33
|
|
$17.13
|
|
$15.74
|
|
1.22%
|
|
-9.87%
|
|
January
31,
2008
|
|
$17.80
|
|
$14.67
|
|
$19.34
|
|
$16.13
|
|
-2.75%
|
|
-14.69%
|
|
October
31,
2007
|
|
$19.21
|
|
$15.61
|
|
$19.65
|
|
$17.66
|
|
0.70%
|
|
-11.61%
|
|
July
31,
2007
|
|
$20.71
|
|
$18.60
|
|
$20.06
|
|
$18.87
|
|
5.39%
|
|
-3.66%
|
|
April
30,
2007
|
|
$20.59
|
|
$20.00
|
|
$19.84
|
|
$19.06
|
|
5.40%
|
|
1.93%
|
* BFD
commenced investment operations on March 30, 2007. Prior to
April , 2009, BFD employed the investment
policies that emphasized investment in dividend paying common stocks and writing
call options on indices of common stocks. No assurance can be given
that BFD's share price information would have been the same if it employed its
current trading practices prior to such date.
BWC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October
31,
2008
|
|
$14.72
|
|
$6.67
|
|
$15.31
|
|
$9.24
|
|
-1.87%
|
|
-35.68%
|
|
July
31,
2008
|
|
$16.68
|
|
$13.68
|
|
$16.85
|
|
$15.15
|
|
1.94%
|
|
-10.47%
|
|
April
30,
2008
|
|
$16.03
|
|
$13.93
|
|
$16.54
|
|
$15.40
|
|
-0.50%
|
|
-9.93%
|
|
January
31,
2008
|
|
$17.30
|
|
$14.61
|
|
$17.74
|
|
$15.44
|
|
0.82%
|
|
-9.77%
|
|
October
31,
2007
|
|
$16.57
|
|
$13.24
|
|
$17.88
|
|
$15.45
|
|
-3.77%
|
|
-14.34%
|
|
July
31,
2007
|
|
$17.12
|
|
$15.46
|
|
$17.26
|
|
$16.31
|
|
3.00%
|
|
-6.43%
|
|
April
30,
2007
|
|
$16.78
|
|
$15.43
|
|
$16.80
|
|
$15.19
|
|
2.18%
|
|
-4.44%
|
|
January
31,
2007
|
|
$17.07
|
|
$15.33
|
|
$16.05
|
|
$15.27
|
|
7.94%
|
|
-1.03%
|
BOE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October
31,
2008
|
|
$25.21
|
|
$12.13
|
|
$25.67
|
|
$15.58
|
|
1.53%
|
|
-30.53%
|
|
July
31,
2008
|
|
$27.77
|
|
$22.45
|
|
$28.11
|
|
$25.37
|
|
2.24%
|
|
-12.03%
|
|
April
30,
2008
|
|
$26.55
|
|
$23.38
|
|
$27.80
|
|
$25.69
|
|
0.42%
|
|
-9.10%
|
|
January
31,
2008
|
|
$29.48
|
|
$23.79
|
|
$29.99
|
|
$26.01
|
|
2.04%
|
|
-9.98%
|
|
October
31,
2007
|
|
$27.94
|
|
$21.90
|
|
$30.20
|
|
$25.72
|
|
-4.55%
|
|
-14.85%
|
|
July
31,
2007
|
|
$28.77
|
|
$25.13
|
|
$29.16
|
|
$27.49
|
|
1.98%
|
|
-9.69%
|
|
April
30,
2007
|
|
$28.50
|
|
$24.80
|
|
$28.29
|
|
$25.13
|
|
3.91%
|
|
-2.24%
|
|
January
31,
2007
|
|
$28.77
|
|
$25.92
|
|
$26.97
|
|
$25.32
|
|
8.62%
|
|
1.70%
|
As of
October 31, 2008, (i) the net asset value per common share of BFD was $10.68 and
the market price per common share was $9.13, representing a discount to net
asset value of -14.51%, (ii) the net asset value per common share of BWC was
$10.74 and the market price per common share was $9.22, representing a discount
to net asset value of -14.15%, and (iii) the net asset value per common share of
BOE was $18.03 and the market price per common share was $15.89, representing a
discount to net asset value of -11.87%. Common shares of each of the
Funds have historically traded at both a premium and a discount to net asset
value.
Performance
Information
The
performance table below illustrates the past performance of an investment in
each Fund by setting forth the average total returns for the Funds. A
Fund's past performance does not necessarily indicate how such Fund will perform
in the future. This may be particularly true for BFD because, prior
to April , 2009, BFD employed the investment
policies that emphasized investment in dividend paying common stocks and writing
call options on indices of common stocks and restructured its portfolio after
that date. Pursuant to the April ,
2009 restructuring of its portfolio, BFD will place different levels of emphasis
on investment strategies within its investment objective, including a stronger
emphasis on employing a strategy of investing in equity securities of companies
located in countries throughout the world without emphasis on the level of
dividends paid by the companies and options on individual equity securities
rather than indices of equity securities.
Average Annual Total Returns as of
October 31,
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BFD
|
-38.56%
|
|
---
|
|
---
|
|
-22.71%
|
|
-42.44%
|
|
---
|
|
---
|
|
-31.97%
|
|
BWC
|
-34.34%
|
|
---
|
|
---
|
|
0.83%
|
|
-39.20%
|
|
---
|
|
---
|
|
-5.61%
|
|
BOE
|
-35.08%
|
|
---
|
|
---
|
|
1.11%
|
|
-38.15%
|
|
---
|
|
---
|
|
-3.86%
|
____________
(a) BFD,
BWC and BOE commenced investment operations on March 30, 2007, October 27, 2005
and May 31, 2005, respectively.
DIVIDENDS
AND DISTRIBUTIONS
The
dividend and distribution policy of the Acquiring Fund will be the dividend and
distribution policy for the combined fund. The dividend and
distribution policies of the Target Funds are similar to that of the Acquiring
Fund. The Acquiring Fund intends to make regular quarterly cash
distributions. The Acquiring Fund will distribute to common shareholders at
least annually all or substantially all its investment company taxable income.
The Acquiring Fund intends to pay any capital gains distributions at least
annually. The 1940 Act generally limits the Acquiring Fund to one capital gain
distribution per year, subject to certain exceptions. The Acquiring Fund has
applied to the SEC for relief that would permit the Acquiring Fund to distribute
capital gains more frequently. There can be no assurance the Acquiring Fund will
receive such relief.
Various
factors will affect the level of the Acquiring Fund's current income and current
gains, such as its asset mix, and the Acquiring Fund's use of options. To permit
the Acquiring Fund to maintain a more stable quarterly distribution, the
Acquiring Fund may from time to time distribute less than the entire amount of
income and gains earned in a particular period. The undistributed income and
gains would be available to supplement future distributions. As a result, the
distributions paid by the Acquiring Fund for
any
particular quarterly period may be more or less than the amount of income and
gains actually earned by the Acquiring Fund during that period. Undistributed
income and gains will add to the Acquiring Fund's net asset value and,
correspondingly, distributions from undistributed income and gains will deduct
from the Acquiring Fund's net asset value. Shareholders will automatically have
all dividends and distributions reinvested in common shares of the Acquiring
Fund issued by the Acquiring Fund or purchased in the open market in accordance
with the Acquiring Fund's dividend reinvestment plan unless an election is made
to receive cash.
AUTOMATIC DIVIDEND REINVESTMENT
PLAN
Unless
the registered owner of common shares elects to receive cash by contacting the
Plan Agent, all dividends declared for a shareholder's common shares of the
Acquiring Fund will be automatically reinvested by BNY Shareowner Services (the
"Plan Agent"), agent for shareholders in administering the Acquiring Fund's
Dividend Reinvestment Plan (the "Plan"), in to additional common shares of the
Acquiring Fund. If a registered owner of common shares elects not to participate
in the Plan, the shareholder will receive all dividends in cash paid by check
mailed directly to the shareholder (or, if the shares are held in street or
other nominee name, then to such nominee) by BNY Shareowner Services, as
dividend disbursing agent. The shareholder may elect not to participate in the
Plan and to receive all dividends in cash by sending written instructions or by
contacting BNY Shareowner Services, as dividend disbursing agent, at the address
set forth below. Participation in the Plan is completely voluntary and may be
terminated or resumed at any time without penalty by contacting the Plan Agent
before the dividend record date; otherwise such termination or resumption will
be effective with respect to any subsequently declared dividend or other
distribution. Some brokers may automatically elect to receive cash on the
shareholder's behalf and may re-invest that cash in additional common shares of
the Acquiring Fund for the shareholder. If the shareholder wishes for all
dividends declared on the shareholder's common shares of the Acquiring Fund to
be automatically reinvested pursuant to the Plan, the shareholder should contact
the shareholder's broker.
The Plan
Agent opens accounts for common shareholders under the Plan in the same name in
which such common shareholders' common shares are registered. Whenever the
Acquiring Fund declares a dividend or other distribution (together, a
"dividend") payable in cash, non-participants in the Plan will receive cash and
participants in the Plan will receive the equivalent in common shares. The
common shares will be acquired by the Plan Agent for the participants' accounts,
depending upon the circumstances described below, either (i) through receipt of
additional unissued but authorized common shares from the Acquiring Fund ("newly
issued common shares") or (ii) by purchase of outstanding common shares on the
open market ("open-market purchases") on the NYSE or elsewhere.
If, on
the payment date for any dividend, the market price per common share plus
estimated brokerage commissions is greater than the net asset value per common
share (such condition being referred to herein as "market premium"), the Plan
Agent will invest the dividend amount in newly issued common shares, including
fractions, on behalf of the participants. The number of newly issued common
shares to be credited to each participant's account will be determined by
dividing the dollar amount of the dividend by the net asset value per common
share on the payment date; provided that, if the net asset value per common
share is less than 95% of the market price per common share on the payment date,
the dollar amount of the dividend will be divided by 95% of the market price per
common share on the payment date.
If, on
the payment date for any dividend, the net asset value per common share is
greater than the market value per common share plus estimated brokerage
commissions (such condition being referred to herein as "market discount"), the
Plan Agent will invest the dividend amount in common shares acquired on behalf
of the participants in open-market purchases.
In the
event of a market discount on the payment date for any dividend, the Plan Agent
will have until the last business day before the next date on which the common
shares trade on an "ex-dividend" basis or 30 days after the payment date for
such dividend, whichever is sooner (the "last purchase date"), to invest the
dividend amount in common shares acquired in open-market purchases. It is
contemplated that the Acquiring Fund will pay quarterly dividends. Therefore,
the period during which open-market
purchases
can be made shall not exceed 30 days after the payment date. If, before the Plan
Agent has completed its open-market purchases, the market price of a common
share exceeds the net asset value per common share, the average per common share
purchase price paid by the Plan Agent may exceed the net asset value of the
common shares, resulting in the acquisition of fewer common shares than if the
dividend had been paid in newly issued common shares on the dividend payment
date. Because of the foregoing difficulty with respect to open market purchases,
if the Plan Agent is unable to invest the full dividend amount in open market
purchases during the purchase period or if the market discount shifts to a
market premium during the purchase period, the Plan Agent may cease making
open-market purchases and may invest the uninvested portion of the dividend
amount in newly issued common shares at the net asset value per common share at
the close of business on the last purchase date; provided that, if the net asset
value per common share is less than 95% of the market price per common share on
the payment date, the dollar amount of the dividend will be divided by 95% of
the market price per common share on the payment date.
The Plan
Agent maintains all shareholders' accounts in the Plan and furnishes written
confirmation of all transactions in the accounts, including information needed
by shareholders for tax records. Common shares in the account of each Plan
participant will be held by the Plan Agent on behalf of the Plan participant,
and each shareholder proxy will include those shares purchased or received
pursuant to the Plan. The Plan Agent will forward all proxy solicitation
materials to participants and vote proxies for shares held under the Plan in
accordance with the instructions of the participants.
In the
case of shareholders such as banks, brokers or nominees which hold shares for
others who are the beneficial owners, the Plan Agent will administer the Plan on
the basis of the number of common shares certified from time to time by the
record shareholder's name and held for the account of beneficial owners who
participate in the Plan.
There
will be no brokerage charges with respect to common shares issued directly by
the Acquiring Fund. However, each participant will pay a pro rata share of
brokerage commissions incurred in connection with open-market purchases. The
automatic reinvestment of dividends will not relieve participants of any
Federal, state or local income tax that may be payable (or required to be
withheld) on such dividends. Participants that request a sale of
shares through the Plan Agent are subject to a brokerage commission of $0.02 per
share sold.
The
Acquiring Fund reserves the right to amend or terminate the Plan. There is no
direct service charge to participants in the Plan; however, the Acquiring Fund
reserves the right to amend the Plan to include a service charge payable by the
participants.
All
correspondence concerning the Plan should be directed to the Plan Agent at BNY
Shareowner Services, Dividend Reinvestment Department, P.O. Box 358035,
Pittsburgh, PA 15252; telephone: 1-866-216-0242.
GOVERNING LAW
Each Fund
is organized as a Delaware statutory trust pursuant to an Agreement and
Declaration of Trust governed by the laws of the State of
Delaware. BFD was organized on January 10, 2007 and commenced
investment operations on March 30, 2007; BWC was organized on August 19, 2005
and commenced operations on October 27, 2005; and the Acquiring Fund was
organized on March 9, 2005 and commenced investment operations on May 31,
2005.
Each Fund
is also subject to federal securities laws, including the 1940 Act and the rules
and regulations promulgated by the SEC thereunder, and applicable state
securities laws. Each Fund is registered as a diversified, closed-end
management investment company under the 1940 Act.
CERTAIN
PROVISIONS OF THE AGREEMENT AND DECLARATION OF TRUST
Each
Fund's Agreement and Declaration of Trust includes provisions that could have
the effect of limiting the ability of other entities or persons to acquire
control of the Fund or to change the composition of its Board of Trustees. This
could have the effect of depriving shareholders of an opportunity to sell their
shares at a premium over prevailing market prices by discouraging a third party
from seeking to obtain control over the Fund. Such attempts could have the
effect of increasing the expenses of the Fund and disrupting the normal
operation of the Fund. The Board of Trustees for each Fund is divided into three
classes, with the terms of one class expiring at each annual meeting of
shareholders. At each annual meeting, one class of Trustees is elected to a
three-year term. This provision could delay for up to two years the replacement
of a majority of the Board of Trustees. A Trustee may be removed from office for
cause only, and not without cause, and only by the action of a majority of the
remaining Trustees followed by a vote of the holders of at least 75% of the
shares then entitled to vote for the election of the respective
Trustee.
In
addition, each Fund's Agreement and Declaration of Trust requires the favorable
vote of a majority of the Fund's Board of Trustees followed by the favorable
vote of the holders of at least 75% of the outstanding shares of each affected
class or series of the Fund, voting separately as a class or series, to approve,
adopt or authorize certain transactions with 5% or greater holders of a class or
series of shares and their associates, unless the transaction has been approved
by at least 80% of the Trustees, in which case "a majority of the outstanding
voting securities" (as defined in the 1940 Act) of the Fund shall be required.
For purposes of these provisions, a 5% or greater holder of a class or series of
shares (a "Principal Shareholder") refers to any person who, whether directly or
indirectly and whether alone or together with its affiliates and associates,
beneficially owns 5% or more of the outstanding shares of all outstanding
classes or series of common shares of the Fund.
The 5%
holder transactions subject to these special approval requirements are: the
merger or consolidation of the Fund or any subsidiary of the Fund with or into
any Principal Shareholder; the issuance of any securities of the Fund to any
Principal Shareholder for cash, except pursuant to any automatic dividend
reinvestment plan; the sale, lease or exchange of all or any substantial part of
the assets of the Fund to any Principal Shareholder, except assets having an
aggregate fair market value of less than 2% of the total assets of the Fund,
aggregating for the purpose of such computation all assets sold, leased or
exchanged in any series of similar transactions within a twelve month period; or
the sale, lease or exchange to the Fund or any subsidiary of the Fund, in
exchange for securities of the Fund, of any assets of any Principal Shareholder,
except assets having an aggregate fair market value of less than 2% of the total
assets of the Fund, aggregating for purposes of such computation all assets
sold, leased or exchanged in any series of similar transactions within a twelve
month period.
For the
purposes of calculating "a majority of the outstanding voting securities" under
each Fund's Agreement and Declaration of Trust, each class and series of the
Fund shall vote together as a single class, except to the extent required by the
1940 Act or the Fund's Agreement and Declaration of Trust, with respect to any
class or series of shares. If a separate class vote is required, the applicable
proportion of shares of the class or series, voting as a separate class or
series, also will be required.
Each
Fund's Agreement and Declaration of Trust also provides that each Fund may be
liquidated upon the approval of 80% of the Trustees.
The
Boards of Trustees have determined that provisions with respect to the Boards of
Trustees and the shareholder voting requirements described above, which voting
requirements are greater than the minimum requirements under Delaware law or the
1940 Act, are in the best interest of shareholders generally. For a more
complete explanation, see the full text of these provisions in each Fund's
Agreement and Declaration of Trust, which is on file with the SEC.
The
Agreement and Declaration of Trust of each Fund further provides that, no
Trustee or officer of the Fund will be subject in such capacity to any personal
liability whatsoever to any person, except only liability to the Fund or its
shareholders arising from bad faith, willful misfeasance, gross negligence
or
reckless
disregard for his duty to such person; and, subject to the foregoing exception,
all such persons will look solely to the Fund property for satisfaction of
claims of any nature arising in connection with the affairs of the
Fund. The Agreement and Declaration of Trust of each Fund further
provides that the Fund will indemnify each Trustee or officer of the Fund
against any liabilities and expenses; however, no indemnitee will be indemnified
against any liability to any person or any expense of such indemnitee arising by
reason of (i) willful misfeasance, (ii) bad faith, (iii) gross negligence, or
(iv) reckless disregard of the duties involved in the conduct of his
position.
CONVERSION TO OPEN-END
FUND
To
convert each Fund to an open-end investment company, each Fund's Agreement and
Declaration of Trust requires the favorable vote of a majority of the Board of
the Trustees followed by the favorable vote of the holders of at least 75% of
the outstanding shares of each affected class or series of shares of the Fund,
voting separately as a class or series, unless such amendment has been approved
by at least 80% of the Trustees, in which case "a majority of the outstanding
voting securities" (as defined in the 1940 Act) of the Fund shall be required.
The foregoing vote would satisfy a separate requirement in the 1940 Act that any
conversion of the Fund to an open-end investment company be approved by the
shareholders. If approved in the foregoing manner, we anticipate conversion of
the Fund to an open-end investment company might not occur until 90 days after
the shareholders' meeting at which such conversion was approved and would also
require at least 10 days' prior notice to all shareholders. Following any such
conversion, it is possible that certain of the Fund's investment policies and
strategies would have to be modified to assure sufficient portfolio liquidity.
In the event of conversion, the common shares would cease to be listed on the
NYSE or other national securities exchanges or market systems. Shareholders of
an open-end investment company may require the company to redeem their shares at
any time, except in certain circumstances as authorized by or under the 1940
Act, at their net asset value, less such redemption charge, if any, as might be
in effect at the time of a redemption. The Fund expects to pay all such
redemption requests in cash, but reserves the right to pay redemption requests
in a combination of cash and securities. If such partial payment in securities
were made, investors may incur brokerage costs in converting such securities to
cash. If the Fund were converted to an open-end fund, it is likely that new
shares would be sold at net asset value plus a sales load. The Board of Trustees
believes, however, that the closed-end structure is desirable in light of the
Fund's investment objectives and policies. Therefore, shareholders should assume
that it is not likely that the Board of Trustees would vote to convert the Fund
to an open-end fund.
VOTING RIGHTS
Voting
rights are identical for the holders of each Fund's common
shares. Common shareholders of each Fund are entitled to one vote for
each common share held. Except as set forth above under "Certain
Provisions of the Agreement and Declaration of Trust" or "Conversion to Open-End
Fund," or except as expressly required by applicable law or expressly set forth
in the designation of rights and preferences with respect to a Fund's preferred
shares, if any, preferred shareholders have no voting rights. When
preferred shareholders are entitled to vote, they are also entitled to cast one
vote per share of preferred stock held.
The Funds
have not issued any preferred shares. If a Fund were to issue preferred shares,
the preferred shareholders, voting as a class, would be entitled to elect two of
the Fund's Trustees. Under the 1940 Act, if at any time dividends on
a Fund's shares of preferred stock are unpaid in an amount equal to two full
years' dividends thereon, the holders of all outstanding shares of preferred
stock, voting as a class, are entitled to elect a majority of the Fund's
Trustees until all dividends have been paid or declared and set apart for
payment.
The
affirmative vote of a majority of the preferred shareholders of a Fund, voting
as a class, would be required to amend, alter or repeal any of the preferences,
rights or powers of preferred shareholders so as to materially and adversely
affect such preferences, rights or powers, or increase or decrease the number of
preferred shares authorized to be issued. Unless a higher percentage
is provided for under "Certain Provisions of the Agreement and Declaration of
Trust" above, the affirmative vote of the holders of a majority of a Fund's
outstanding preferred shares, voting as a class, would be required to approve
any
action
requiring a vote of security holders under Section 13(a) of the 1940 Act,
including, among other things, changes in a Fund's investment objective or
changes in a Fund's fundamental investment restrictions.
FINANCIAL HIGHLIGHTS
Acquiring
Fund
The
following schedule presents financial highlights for one common share of the
Acquiring Fund outstanding throughout the periods indicated:
|
BlackRock
Global Opportunities Equity Trust (BOE)
|
|
|
|
|
Year
Ended October 31,
|
|
|
Period
May
31, 2005
1
through
October 31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
Per
Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
asset value, beginning of period
|
|
$
|
31.09
|
|
|
$
|
26.72
|
|
|
$
|
23.77
|
|
|
$
|
23.88
2
|
|
|
Net
investment income
|
|
|
0.39
|
|
|
|
0.55
|
|
|
|
0.58
|
|
|
|
0.37
|
|
|
Net
realized and unrealized gain (loss)
|
|
|
(10.39
|
)
|
|
|
6.32
|
|
|
|
4.64
|
|
|
|
0.13
|
|
|
Net
increase (decrease) from investment operations
|
|
|
(10.00
|
)
|
|
|
6.87
|
|
|
|
5.22
|
|
|
|
0.50
|
|
|
Dividends
and distributions from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
|
|
(0.56
|
)
|
|
|
(0.36
|
)
|
|
|
(0.59
|
)
|
|
|
(0.23
|
)
|
|
Net
realized gain
|
|
|
(2.48
|
)
|
|
|
(2.14
|
)
|
|
|
(1.68
|
)
|
|
|
(0.33
|
)
|
|
Tax
return of capital
|
|
|
(0.02
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Total
dividends and distributions
|
|
|
(3.06
|
)
|
|
|
(2.50
|
)
|
|
|
(2.27
|
)
|
|
|
(0.56
|
)
|
|
Offering
costs resulting from the issuance of shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.05
|
)
|
|
Net
asset value, end of period
|
|
$
|
18.03
|
|
|
$
|
31.09
|
|
|
$
|
26.72
|
|
|
$
|
23.77
|
|
|
Market
price, end of period
|
|
$
|
15.89
|
|
|
$
|
28.76
|
|
|
$
|
27.61
|
|
|
$
|
23.88
|
|
|
Total
Investment Return
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based
on net asset value
|
|
|
(35.08
|
)%
|
|
|
27.47
|
%
|
|
|
24.48
|
%
|
|
|
0.81
|
%
4
|
|
Based
on market price
|
|
|
(38.15
|
)%
|
|
|
14.11
|
%
|
|
|
26.64
|
%
|
|
|
(2.21
|
)%
4
|
|
Ratios
to Average Net Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
expenses
|
|
|
1.14
|
%
|
|
|
1.15
|
%
|
|
|
1.16
|
%
|
|
|
1.19
|
%
5
|
|
Net
investment income
|
|
|
1.60
|
%
|
|
|
1.87
|
%
|
|
|
2.45
|
%
|
|
|
3.66
|
%
5
|
|
Supplemental
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of period (000)
|
|
$
|
227,835
|
|
|
$
|
389,741
|
|
|
$
|
331,744
|
|
|
$
|
294,195
|
|
|
Portfolio
turnover
|
|
|
120
|
%
|
|
|
111
|
%
|
|
|
184
|
%
|
|
|
55
|
%
|
|
1
|
Commencement
of investment operations. This information includes the initial investment
by BlackRock Funding, Inc.
|
|
2
|
Net
asset value, beginning of period, reflects a deduction of $1.12 per share
sales charge from the initial offering price of $25.00 per
share.
|
|
3
|
Total
investment returns based on market value, which can be significantly
greater or lesser than the net asset value, may result in substantially
different returns. Total investment returns exclude the effects of sales
charges.
|
|
4
|
Aggregate
total investment return.
|
The
following schedule presents financial highlights for one common share of each
Target Fund outstanding throughout the periods indicated:
|
BlackRock
Global Equity Income Trust (BFD)
1
|
|
|
|
|
Year
Ended October 31,
|
|
|
Period
March
30, 2007
2
through
October 31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Per
Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
asset value, beginning of period
|
|
$
|
19.65
|
|
|
$
|
19.10
3
|
|
|
Net
investment income
|
|
|
0.41
|
|
|
|
0.28
|
|
|
Net
realized and unrealized gain (loss)
|
|
|
(7.48
|
)
|
|
|
1.25
|
|
|
Net
increase (decrease) from investment operations
|
|
|
(7.07
|
)
|
|
|
1.53
|
|
|
Dividends
and distributions from:
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
|
|
(0.41
|
)
|
|
|
(0.28
|
)
|
|
Net
realized gain
|
|
|
—
|
|
|
|
(0.08
|
)
|
|
Tax
return of capital
|
|
|
(1.49
|
)
|
|
|
(0.59
|
)
|
|
Total
dividends and distributions
|
|
|
(1.90
|
)
|
|
|
(0.95
|
)
|
|
Offering
costs resulting from the issuance of shares
|
|
|
—
|
|
|
|
(0.03
|
)
|
|
Net
asset value, end of period
|
|
$
|
10.68
|
|
|
$
|
19.65
|
|
|
Market
price, end of period
|
|
$
|
9.13
|
|
|
$
|
17.93
|
|
|
Total
Investment Return
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based
on net asset value
|
|
|
(38.56
|
)%
|
|
|
8.09
|
%
5
|
|
Based
on market price
|
|
|
(42.44
|
)%
|
|
|
(5.81
|
)%
5
|
|
Ratios
to Average Net Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
expenses
|
|
|
1.11
|
%
|
|
|
1.11
|
%
6
|
|
Net
investment income
|
|
|
2.66
|
%
|
|
|
2.12
|
%
6
|
|
Supplemental
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of period (000)
|
|
$
|
480,405
|
|
|
$
|
884,210
|
|
|
Portfolio
turnover
|
|
|
72
|
%
|
|
|
39
|
%
|
|
1
|
Reflects
information during a period in which BFD's investment policies emphasized
investment in dividend paying common stocks and an option writing strategy
focused on writing call options on indices of common stocks. As
of April , 2009, these policies were
changed to no longer emphasize dividend paying common stocks and to
emphasize writing call options on individual common stocks instead of
indices.
|
|
2
|
Commencement
of investment operations. This information includes the initial investment
by BlackRock Funding, Inc.
|
|
3
|
Net
asset value, beginning of period, reflects a deduction of $0.8975 per
share sales charge from the initial offering price of $20.00 per
share.
|
|
4
|
Total
investment returns based on market value, which can be significantly
greater or lesser than the net asset value, may result in substantially
different returns. Total investment returns exclude the effects of sales
charges.
|
|
5
|
Aggregate
total investment return.
|
|
BlackRock
World Investment Trust (BWC)
|
|
|
|
|
Year
Ended October 31,
|
|
|
Period
October
27, 2005
1
through
October 31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
Per
Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
asset value, beginning of period
|
|
$
|
18.64
|
|
|
$
|
16.35
|
|
|
$
|
14.42
|
|
|
$
|
14.33
2
|
|
|
Net
investment income
|
|
|
0.25
|
|
|
|
0.30
|
|
|
|
0.30
|
|
|
|
—
|
|
|
Net
realized and unrealized gain (loss)
|
|
|
(6.20
|
)
|
|
|
3.74
|
|
|
|
2.88
|
|
|
|
0.11
|
|
|
Net
increase (decrease) from investment operations
|
|
|
(5.95
|
)
|
|
|
4.04
|
|
|
|
3.18
|
|
|
|
0.11
|
|
|
Dividends
and distributions from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
|
|
(0.24
|
)
|
|
|
(0.25
|
)
|
|
|
(0.34
|
)
|
|
|
—
|
|
|
Net
realized gain
|
|
|
(1.71
|
)
|
|
|
(1.50
|
)
|
|
|
(0.91
|
)
|
|
|
—
|
|
|
Total
dividends and distributions
|
|
|
(1.95
|
)
|
|
|
(1.75
|
)
|
|
|
(1.25
|
)
|
|
|
—
|
|
|
Offering
costs resulting from the issuance of shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.02
|
)
|
|
Net
asset value, end of period
|
|
$
|
10.74
|
|
|
$
|
18.64
|
|
|
$
|
16.35
|
|
|
$
|
14.42
|
|
|
Market
price, end of period
|
|
$
|
9.22
|
|
|
$
|
17.28
|
|
|
$
|
16.59
|
|
|
$
|
15.08
|
|
|
Total
Investment Return
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based
on net asset value
|
|
|
(34.34
|
)%
|
|
|
26.48
|
%
|
|
|
22.47
|
%
|
|
|
0.80
|
%
4
|
|
Based
on market price
|
|
|
(39.20
|
)%
|
|
|
15.56
|
%
|
|
|
18.99
|
%
|
|
|
0.53
|
%
4
|
|
Ratios
to Average Net Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
expenses
|
|
|
1.10
|
%
|
|
|
1.11
|
%
|
|
|
1.10
|
%
|
|
|
1.23
|
%
5
|
|
Net
investment income
|
|
|
1.58
|
%
|
|
|
1.62
|
%
|
|
|
2.04
|
%
|
|
|
2.59
|
%
5
|
|
Supplemental
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of period (000)
|
|
$
|
560,360
|
|
|
$
|
970,821
|
|
|
$
|
849,947
|
|
|
$
|
672,981
|
|
|
Portfolio
turnover
|
|
|
123
|
%
|
|
|
110
|
%
|
|
|
153
|
%
|
|
|
—
|
%
|
|
1
|
Commencement
of investment operations. This information includes the initial investment
by BlackRock Funding, Inc.
|
|
2
|
Net
asset value, beginning of period, reflects a deduction of $0.675 per share
sales charge from the initial offering price of $15.00 per
share.
|
|
3
|
Total
investment returns based on market value, which can be significantly
greater or lesser than the net asset value, may result in substantially
different returns. Total investment returns exclude the effects of sales
charges.
|
|
4
|
Aggregate
total investment return.
|
INFORMATION ABOUT THE
REORGANIZATIONS
General
Under the
Reorganization Agreements (a form of which is attached as Appendix A to the
Reorganization Statement of Additional Information), the Acquiring Fund will
acquire substantially all of the assets, and will assume substantially all of
the liabilities, of the Target Funds, in exchange for Acquiring Fund Common
Shares to be issued by the Acquiring Fund. The Acquiring Fund Common
Shares issued to the Target Funds will have an aggregate net asset value equal
to the aggregate net asset value of the Target Funds' common shares, less the
costs of the Reorganizations (though cash may be paid
in lieu
of any fractional common shares). The Target Funds will subsequently
distribute the Acquiring Fund Common Shares to the Target Funds' common
shareholders. As soon as practicable after the Closing Date for the
Reorganizations, the Target Funds will deregister as investment companies under
the 1940 Act and dissolve under Delaware law.
The
Target Funds will distribute the Acquiring Fund Common Shares received by them
pro rata to the holders of record of their common shares, as
applicable. Such distribution will be accomplished by opening new
accounts on the books of the Acquiring Fund in the names of the common
shareholders of the Target Funds and transferring to those shareholder accounts
the Acquiring Fund Common Shares previously credited on those books to the
accounts of the Target Funds. Each newly-opened account on the books
of the Acquiring Fund for the former common shareholders of the Target Funds
will represent the respective pro rata number of Acquiring Fund Common Shares
(rounded down, in the case of fractional common shares held other than in a
Dividend Reinvestment Plan account, to the next largest number of whole common
shares) due such shareholder. No fractional Acquiring Fund Common
Shares will be issued (except for common shares held in a Plan
account). In the event of fractional common shares in an account
other than a Plan account, the Acquiring Fund's transfer agent will aggregate
all such fractional Acquiring Fund Common Shares and sell the resulting whole
common shares on the NYSE for the account of all holders of such fractional
interests, and each such holder will be entitled to the pro rata share of the
proceeds from such sale upon surrender of Target Fund common share
certificates. See "Terms of the Reorganization Agreements—Surrender
and Exchange of Share Certificates" below for a description of the procedures to
be followed by the Target Funds' shareholders to obtain their Acquiring Fund
Common Shares (and cash in lieu of fractional common shares, if
any).
As a
result of the Reorganizations, each common shareholder of a Target Fund will own
Acquiring Fund Common Shares that (except for cash payments received in lieu of
fractional common shares) will have an aggregate net asset value immediately
after the Closing Date equal to the aggregate net asset value of that
shareholder's Target Fund common shares immediately prior to the Closing
Date. Since the Acquiring Fund Common Shares will be issued at net
asset value in exchange for the net assets of each Target Fund having a value
equal to the aggregate net asset value of those Acquiring Fund Common Shares,
the net asset value per share of Acquiring Fund Common Shares should remain
virtually unchanged by the Reorganizations except for its share of the costs of
the Reorganizations. Thus, the Reorganization will result in no
dilution of net asset value of the Acquiring Fund Common Shares, other than to
reflect the costs of the Reorganization. However, as a result of the
Reorganizations, a shareholder of any of the Funds will hold a reduced
percentage of ownership in the larger combined entity than he or she did in any
of the separate Funds. No sales charge or fee of any kind will be
charged to shareholders of the Target Funds in connection with their receipt of
Acquiring Fund Common Shares in the Reorganizations.
TERMS OF THE REORGANIZATION
AGREEMENTS
The
following is a summary of the significant terms of the Reorganization
Agreements. The terms of each Reorganization Agreement are
similar. This summary is qualified in its entirety by reference to
the Form of Reorganization Agreement attached as Appendix A to the
Reorganization Statement of Additional Information.
Valuation
of Assets and Liabilities
The
respective assets of each of the Funds will be valued on the business day prior
to the Closing Date (the "Valuation Time"). The valuation procedures
are the same for each Fund: The net asset value per common share of
each Fund will be determined after the close of business on the NYSE (generally,
4:00 p.m., Eastern Time) at the Valuation Time. For the purpose of
determining the net asset value of a common share of each Fund, the value of the
securities held by the issuing Fund plus any cash or other assets (including
interest accrued but not yet received) minus all liabilities (including accrued
expenses) of the issuing Fund is divided by the total number of common shares of
the issuing Fund outstanding at such time. Daily expenses, including
the fees payable to the Investment Adviser, will accrue at the Valuation
Time.
Amendments
and Conditions
The
Reorganization Agreements may be amended at any time prior to the Closing Date
with respect to any of the terms therein upon mutual agreement. The
obligations of each Fund pursuant to its Reorganization Agreement are subject to
various conditions, including a registration statement on Form N-14 being
declared effective by the SEC, approval by the shareholders of each Target Fund,
approval of the issuance of additional Acquiring Fund Common Shares by the
common shareholders of the Acquiring Fund, receipt of an opinion of counsel as
to tax matters, receipt of an opinion of counsel as to corporate and securities
matters and the continuing accuracy of various representations and warranties of
the Funds being confirmed by the respective parties.
Postponement;
Termination
Under the
Reorganization Agreements, the Board of Trustees of either Fund may cause a
Reorganization to be postponed or abandoned in certain circumstances, should
such Board of Trustees determine that it is in the best interests of the
shareholders of its respective Fund to do so.
The
Reorganization Agreements may be terminated, and the Reorganizations abandoned
at any time (whether before or after adoption thereof by the shareholders of
either of the Funds) prior to the Closing Date, or the Closing Date may be
postponed: (i) by mutual consent of the Boards of Trustees of the
Funds and (ii) by the Board of Trustees of either Fund if any condition to that
Fund's obligations set forth in the pertinent Reorganization Agreement has not
been fulfilled or waived by such Board of Trustees.
Surrender
and Exchange of Share Certificates
The
Acquiring Fund shall issue to the Target Funds certificates or share deposit
receipts for the Acquiring Fund Common Shares registered in the name of the
Target Funds. Each Target Fund shall then distribute the Acquiring
Fund Common Shares to the shareholders of such Target Fund by redelivering the
certificates or share deposit receipts evidencing ownership of the Acquiring
Fund Common Shares to the transfer agent and registrar for the Acquiring Fund
Common Shares, for distribution to the shareholders of such Target Fund on the
basis of such shareholders' proportionate interests in the aggregate net asset
value of such Target Fund's common shares. With respect to any Target
Fund shareholder holding certificates evidencing ownership of Target Fund common
shares as of the Closing Date, and subject to the Acquiring Fund being informed
thereof in writing by such Target Fund, the Acquiring Fund will not permit such
shareholder to receive new certificates evidencing ownership of the Acquiring
Fund Common Shares until notified by such Target Fund or its agent that such
shareholder has surrendered his or her outstanding certificates evidencing
ownership of Target Fund common shares or, in the event of lost certificates,
posted adequate bond. Each Target Fund, at its own expense, will
request its shareholders to surrender their outstanding certificates evidencing
ownership of Target Fund common shares or post adequate bond
therefor.
Please do
not send in any share certificates at this time. Upon consummation of
the Reorganization, shareholders of the Target Funds will be furnished with
instructions for exchanging their stock certificates for Acquiring Fund stock
certificates and, if applicable, cash in lieu of fractional common
shares.
From and
after the Closing Date, there will be no transfers on the stock transfer books
of the Target Funds. If, after the Closing Date, certificates
representing common shares of a Target Fund are presented to the Acquiring Fund,
they will be cancelled and exchanged for certificates representing Acquiring
Fund Common Shares and cash in lieu of fractional common shares, if applicable,
distributable with respect to such Target Fund's common shares in the
Reorganization.
Expenses
of the Reorganizations
The
Target Funds and the Acquiring Fund will bear expenses incurred in connection
with the Reorganizations, including but not limited to, costs related to the
preparation and distribution of materials distributed to each Fund's Board of
Trustees, expenses incurred in connection with the preparation of the
Reorganization Agreements and the registration statement on Form N-14, the
printing and distribution of this Joint Proxy Statement/Prospectus and any other
materials required to be distributed to shareholders, SEC and state securities
commission filing fees and legal and audit fees in connection with the
Reorganizations, legal fees incurred preparing each Fund's Board materials,
attending each Fund's Board meetings and preparing the minutes, auditing fees
associated with each Fund's financial statements, stock exchange fees, transfer
agency fees, rating agency fees, portfolio transfer taxes (if any) and any
similar expenses incurred in connection with the Reorganizations, which will be
borne directly by the respective Fund incurring the expense or allocated among
the Funds based upon some reasonable methodology as
appropriate. Moreover, regardless of whether the Reorganizations are
completed, the costs associated with the Reorganizations, including the costs
associated with the shareholder meeting, will be borne directly by the
respective Fund incurring the expense or allocated among the Funds based upon
some reasonable methodology, as appropriate. Neither the Funds nor
the Investment Adviser will pay any shareholder expenses arising out of or in
connection with the Reorganization.
REASONS FOR THE
REORGANIZATIONS
The
factors considered by the Board of Trustees with regard to the Reorganizations
include, but are not limited to, the following:
|
·
|
The
fact that the investment objectives and policies of the Funds are similar
(but not identical). See "Comparison of the
Funds."
|
Through
the Reorganizations, shareholders will be invested in a combined fund with
similar (but not identical) objectives and strategies as the Target Funds and,
as a result, the style and risk/return profile of the combined fund will remain
comparable to those of a Target Fund shareholders' current investments, subject
to the differences described in "Comparison of the Funds."
|
·
|
The
expectation that the Acquiring Fund will have a projected annual operating
expense ratio that is lower than that of the Target Funds prior to the
Reorganizations.
|
Each
Board of Trustees reviewed data presented by the Investment Adviser showing that
common shareholders of each Fund will experience a reduced annual operating
expense ratio as a result of their Fund's respective
Reorganization. The combined fund resulting from the Reorganizations
will have a larger asset base than any of the Funds has
currently. Certain fixed administrative costs, such as costs of
printing shareholder reports and proxy statements, legal expenses, audit fees,
mailing costs and other expenses, will be spread across this larger asset base,
thereby lowering the expense ratio for common shareholders of the combined
fund.
|
·
|
The
Board of Trustees of BFD considered that, if BFD is not reorganized into
the Acquiring Fund, the Investment Adviser would recommend to the Board of
Trustees of BFD that it substantially lower its dividend in order to
reduce or eliminate the amount of capital returned to investors in
connection with each dividend.
|
If BFD is
not reorganized into the Acquiring Fund, the Investment Adviser also anticipates
that it would recommend to BFD's Board of Trustees that the dividend rate for
BFD be reduced. Recently, BFD has declared distributions at an annual
rate equal to 21.79%, calculated with reference to the closing stock price on
the NYSE on December 31, 2008. Prior year distributions have included
substantial returns of
capital. Because
the Investment Adviser believes that continued payment of such substantial
returns of capital would not be in the best interests of BFD or its investors,
the Investment Adviser currently anticipates that, if BFD is not reorganized
into the Acquiring Fund, it would recommend to BFD's Board of Trustees that its
dividend be lowered substantially, which may adversely affect the price at which
the common shares of BFD trade on the NYSE. The possible reduction of
BFD's distribution rate would be dependant upon market conditions at the time
any such recommendation was made to BFD's Board of Trustees, and any such
reduction may be smaller or larger than the Investment Adviser may
estimate. For comparative purposes, the Acquiring Fund recently has
declared distributions at an annual rate equal to 14.09%, calculated with
reference to the closing stock price on the NYSE on December 31,
2008. Of course, the distribution rate of the Acquiring Fund will be
affected from time to time by the investment performance of the Acquiring Fund
and no assurance can be given that the distribution rate of the Acquiring Fund
will not be reduced in the future.
|
·
|
The
relative performance history of each
Fund.
|
The Board
of Trustees of each Fund reviewed the relative performance of each Fund over
different time periods compared to each other. Prior to
April , 2009, however, BFD had a policy of
seeking to achieve its investment objective by investing primarily in a
diversified portfolio of domestic and foreign common stocks that pay dividends
and writing (selling) index call options with respect to a portion of its common
stock portfolio. On April , 2009,
BFD changed its investment policies and began seeking to achieve its investment
objective by investing primarily in equity securities issued by companies
located throughout the world with no emphasis on their dividend rate and writing
(selling) options that generally focus on individual common stocks instead of
indices. Accordingly, performance history for the period prior to
April , 2009 may not reflect BFD's
performance had BFD employed its current investment policies during that
period. Because the combined fund will most closely resemble the
Acquiring Fund, the Acquiring Fund will be the accounting survivor of the
Reorganizations. As such, the combined fund will assume the
performance history of the Acquiring Fund at the closing of the
Reorganizations.
|
·
|
The
expectation that the Acquiring Fund may achieve certain potential benefits
from its larger net asset base.
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The
larger net asset base of the Acquiring Fund may permit the Acquiring Fund to
achieve certain economies of scale, as certain costs can be spread over a larger
asset base, and the larger Acquiring Fund may achieve greater portfolio
diversity and potentially lower portfolio transaction costs. Further,
the larger net asset base will provide greater liquidity to the combined
fund.
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Shareholders
will recognize no gain or loss for U.S. federal income tax purposes as a
result of the Reorganizations, as the Reorganizations are intended to be
tax-free transactions.
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The
Reorganizations provide for tax-free transfers of substantially all the assets
and certain stated liabilities of the Target Funds in exchange for Acquiring
Fund Common Shares. Shareholders will receive Acquiring Fund Common
Shares equivalent to the aggregate net asset value of their Target Fund common
shares and will pay no U.S. federal income tax on the transaction.
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·
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The
portfolio management team who will manage the Acquiring Fund and the
portfolio management team's investment style and
strategies.
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Shareholders
will benefit from the continuing experience and expertise of the portfolio
management team designated for the Acquiring Fund and the team's commitment to
the investment style and strategies to be used in managing the assets of the
Acquiring Fund. See "Comparison of the Funds—Management of the
Funds."
Subsequent
to the completion of the 60 day notice period to shareholders and the adoption
of the revised non-fundamental policy, the portfolio guidelines of BFD will be
substantially similar to that of the Acquiring Fund; accordingly, it is expected
that BFD will be repositioned by its new portfolio management
team to
closely resemble Acquiring Fund prior to the closure of the proposed
Reorganization. As a result, it is not anticipated that there will be
significant disposition of the holdings in either BFD or BWC as a result of the
proposed Reorganizations. In addition, nothing will require either
the Target Funds or the Acquiring Fund to dispose of holdings in the Target
Funds' portfolios if, in the reasonable judgment of the Target Funds' Boards of
Trustees or of the Acquiring Fund or the Investment Adviser of the Funds, such
disposition would adversely affect the tax-free nature of the Reorganizations
for U.S. federal income tax purposes.
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The
expectation that shareholders will receive substantially the same services
available as shareholders of the Acquiring Fund as they did as
shareholders of the Target Funds.
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The Board
of Trustees of each Fund believes that the Reorganization would benefit
shareholders of the Funds, based on a number of factors, including that
shareholders would not be diluted with respect to net asset value; the relative
similarity of the investment strategies and policies of the two Funds; the
larger net asset base of the Acquiring Fund after the Reorganizations; the
capabilities of the management team of the Acquiring Fund, that would manage the
combined fund; and the possibility of achieving economies of scale going
forward. Considering these and other reasons, the Board of Trustees
of each Fund unanimously concluded that consummation of the Reorganizations is
in the best interests of each Fund and its shareholders and that the interests
of the shareholders of each Fund will not be diluted with respect to net asset
value as a result of the Reorganizations. The approval determination
was made on the basis of each Trustee's business judgment after consideration of
all of the factors taken as a whole, though individual Trustees may have placed
different weight on various factors and assigned different degrees of
materiality to various factors.
MATERIAL
U.S.
FEDERAL INCOME TAX CONSEQUENCES OF
THE
REORGANIZATIONS
The
following is a summary of certain U.S. federal income tax consequences of each
Reorganization. The discussion is based upon the Code, Treasury
regulations, court decisions, published positions of the Internal Revenue
Service ("IRS") and other applicable authorities, all as in effect on the date
hereof and all of which are subject to change or differing interpretations
(possibly with retroactive effect). The discussion is limited to U.S.
persons who hold common shares of a Target Fund as capital assets for U.S.
federal income tax purposes (generally, assets held for
investment). This summary does not address all of the U.S. federal
income tax consequences that may be relevant to a particular shareholder or to
shareholders who may be subject to special treatment under U.S. federal income
tax laws. No ruling has been or will be obtained from the IRS
regarding any matter relating to the Reorganizations. No assurance
can be given that the IRS would not assert, or that a court would not sustain, a
position contrary to any of the tax aspects described below. The
summary of U.S. federal income tax consequences is for general information
only. The Funds' shareholders must consult their own tax advisers as
to the U.S. federal income tax consequences of the Reorganizations, as well as
the effects of state, local and non-U.S. tax laws, including possible changes in
tax law.
It is a
condition to the closing of each Reorganization that the respective Target Fund
and the Acquiring Fund receive an opinion from Skadden Arps, dated as of the
Closing Date, regarding the characterization of such Reorganization as a
"reorganization" within the meaning of Section 368(a) of the Code. As
such a reorganization, the U.S. federal income tax consequences of each
Reorganization can be summarized as follows:
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No
gain or loss will be recognized by a Target Fund or the Acquiring Fund
upon the transfer to the Acquiring Fund of substantially all of the assets
of a Target Fund in exchange for Acquiring Fund Common Shares and the
assumption by the Acquiring Fund of substantially all of the liabilities
of a Target Fund and the subsequent liquidation of a Target
Fund.
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No
gain or loss will be recognized by a shareholder of a Target Fund who
exchanges all of his Target Fund common shares solely for Acquiring Fund
Common Shares pursuant to a
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Reorganization
(except with respect to cash received in lieu of a fractional Acquiring
Fund Common Share, as discussed
below).
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The
aggregate tax basis of the Acquiring Fund Common Shares received by a
shareholder of a Target Fund pursuant to a Reorganization will be the same
as the aggregate tax basis of his Target Fund common shares surrendered in
exchange therefor (reduced by any amount of tax basis allocable to a
fractional Acquiring Fund Common Share for which cash is
received).
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The
holding period of the Acquiring Fund Common Shares received by a
shareholder of a Target Fund pursuant to a Reorganization will include the
holding period of his Target Fund common shares surrendered in exchange
therefor.
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A
shareholder of a Target Fund that receives cash in lieu of a fractional
Acquiring Fund Common Share in connection with a Reorganization will be
treated as having received cash in redemption of such fractional Acquiring
Fund Common Share. Each Target Fund shareholder, that receives
cash in lieu of a fractional Acquiring Fund Common Share will recognize
capital gain or loss equal to the difference between the amount of cash
deemed received for the fractional Acquiring Fund Common Share and such
Target Fund shareholder’s tax basis in the Target Fund common share
allocable to the fractional Acquiring Fund Common Share. The
capital gain or loss will be a long-term capital gain or loss if the
Target Fund shareholder’s holding period for such Target Fund common
shares is more than one year as of the date of the Reorganization is
consummated.
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The
Acquiring Fund's tax basis in a Target Fund's assets received by the
Acquiring Fund pursuant to a Reorganization will, in each instance, equal
the tax basis of such assets in the hands of such Target Fund immediately
prior to such Reorganization, and the Acquiring Fund's holding period for
such assets will, in each instance, include the period during which the
assets were held by such Target
Fund.
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The
Acquiring Fund intends to continue to be taxed under the rules applicable to
regulated investment companies as defined in Section 851 of the Code, which are
the same rules currently applicable to each of the Target Funds and their
shareholders.
The
opinion of Skadden Arps will be based on U.S. federal income tax law in effect
on the Closing Date. In rendering its opinion, Skadden Arps will also
rely upon certain representations of the management of the Acquiring Fund and
each Target Fund and assume, among other things, that each Reorganization will
be consummated in accordance with the applicable Reorganization Agreement and
other operative documents and as described herein. An opinion of
counsel is not binding on the IRS or any court.
Prior to
the Closing Date, each Target Fund will declare a distribution to its
shareholders, which together with all previous distributions, will have the
effect of distributing to the shareholders of such Target Fund all of such
Target Fund's investment company taxable income (computed without regard to the
deduction for dividends paid) and net capital gain, if any, through the Closing
Date. Such distributions will be taxable to the Target Fund
shareholders.
In
connection with each Reorganization, each Target Fund may sell a portion of its
portfolio assets. The tax impact of such sales will depend on the difference
between the price at which such portfolio assets are sold and the Target Fund's
basis in such assets. Any capital gains that a Target Fund recognizes
in these sales will be distributed to such Target Fund's shareholders as capital
gain dividends (to the extent of net capital gain, which is the excess of net
long-term capital gain over net short-term capital loss) and/or ordinary
dividends (to the extent of net realized short-term capital gains) during or
with respect to the year of sale, and such distributions will be taxable to
shareholders.
The Funds
have capital loss carryforwards that, in the absence of the Reorganizations,
would generally be available to offset their respective capital
gains. If, however, either or both of the Reorganizations were to
occur, then the Acquiring Fund would undergo an “ownership change” for U.S.
federal income tax purposes (because the Acquiring Fund is significantly smaller
than either of the Target Funds) and, accordingly, the Acquiring Fund’s use of
its own capital loss carryforwards (and certain “built-in-losses”) would be
significantly limited by the operation of the tax loss limitation rules of the
Code. In addition, if both the Reorganizations were to occur, then
each of the Target Funds would undergo an “ownership change” for U.S. federal
income tax purposes (because each Target Fund is smaller than the combined
Acquiring Fund and Target Funds) and, accordingly, the Acquiring Fund’s use of
each Target Fund’s capital loss carryforwards (and certain “built-in-losses”)
would be significantly limited by the operation of the tax loss limitation rules
of the Code. For each Fund, the Code generally limits the amount of
pre-ownership change losses that may be used to offset post-ownership change
income to a specific "annual loss limation amount" (generally the product of the
fair market value of the stock of such fund (with certain adjustments))
immediately prior to the Reorganization and a rate established by the IRS (for
example, the rate is 5.49% for January, 2009). Subject to certain
limitations, any unused portion of these losses may be available in subsequent
years. If only one of the two Reorganizations, and not both, were to
occur, then the participating Target Fund’s capital loss carryforwards, which
the Acquiring Fund would succeed to in the Reorganization, should
not be
limited solely by reason of the Reorganization (because each
Target Fund is significantly larger than the Acquiring Fund).
Due to
the operation of these loss limitation rules, it is possible that shareholders
of all of the Funds if both Reorganizations were to occur (or solely
shareholders of the Acquiring Fund, if only one of the two Reorganizations were
to occur), may receive taxable distributions of short-term and long-term capital
gains earlier than they would have in the absence of the Reorganizations. Such
taxable distributions will be treated either as ordinary income (and not as
favorably-taxed “qualified dividend income”) if such capital gains are
short-term or as favorably-taxed capital gain dividends if such capital gains
are long term. If both Reorganizations, or only one of the two
Reorganizations, were to occur, the actual financial impact of the loss
limitation rules on the shareholder of a participating Fund, whose losses are
subject to the loss limitation rules, would depend upon many variables,
including such Fund’s expected growth rate if the relevant Reorganization were
not to occur (i.e., whether in the absence of the Reorganization such Fund would
generate capital gains against which to utilize its capital loss carryforwards
(and certain realized built-in losses), prior to their expiration, in excess of
what would have been the “annual loss limitation amount” had the relevant
Reorganization occurred), the timing and amount of future capital gains
recognized by the combined Funds if the Reorganization were to occur, and the
timing of each Fund shareholder’s disposition of his, her or its shares (the tax
basis of which might, depending on the facts, reflect that shareholder’s share
of such Fund’s capital losses). Shareholders of all the Funds are
strongly urged to consult their own tax advisors in this regard.
SHAREHOLDER
APPROVAL
Under the
Agreement and Declaration of Trust of each Target Fund, relevant Delaware law
and the rules of the NYSE, shareholder approval of each Reorganization requires
the affirmative vote of shareholders of the respective Target Fund representing
the lesser of (i) 67% of the common shares represented at the Special Meeting at
which more than 50% of the outstanding common shares are represented or (ii)
more than 50% of the outstanding shares of the respective Target
Fund.
PROPOSAL
2: ISSUANCE OF
ADDITIONAL ACQUIRING FUND
COMMON SHARES
Pursuant
to the Reorganization Agreements, which are described more fully under "Proposal
1: Reorganizations of the Target Funds" above, the Acquiring Fund will acquire
substantially all of the assets and assume substantially all of the liabilities
of each Target Fund in exchange for Acquiring Fund Common
Shares. Each Target Fund will distribute Acquiring Fund Common Shares
to its common shareholders, and will then terminate its registration under the
1940 Act and dissolve under Delaware law. The Acquiring Fund Board,
based upon its evaluation of all relevant information, anticipates that each
Reorganization will benefit the holders of Acquiring Fund Common
Shares.
The
aggregate net asset value of Acquiring Fund Common Shares issued in each
Reorganization will equal the aggregate net asset value of the Target Fund's
common shares held immediately prior to the Reorganization, less the costs of
the Reorganization (though shareholders may receive cash for their fractional
common shares). The Reorganizations will result in no reduction of
the net asset value of the Acquiring Fund Common Shares, other than to reflect
the costs of each Reorganization. No gain or loss will be recognized
by the Acquiring Fund or its shareholders in connection with either
Reorganization. The Acquiring Fund will continue to operate as a
registered, diversified, closed-end investment company with the investment
objective and policies described in this Joint Proxy
Statement/Prospectus.
In
connection with the Reorganizations and as contemplated by the Reorganization
Agreements, the Acquiring Fund will issue additional Acquiring Fund Common
Shares and list such common shares on the NYSE. While applicable
state and federal law does not require the shareholders of the Acquiring Fund to
approve the Reorganizations, Section 312.03(c) of the NYSE Listed Company Manual
requires the common shareholders of the Acquiring Fund to approve the issuance
of additional Acquiring Fund Common Shares to be issued in connection with the
Reorganizations.
Shareholder
approval of the issuance of additional Acquiring Fund Common Shares requires the
affirmative vote of a majority of votes cast by shareholders of the Acquiring
Fund, provided that total votes cast on the proposal represents over 50% of all
securities entitled to vote on the matter. For more information
regarding voting requirements, see "Other Information—Voting Information and
Requirements," below.
OTHER
INFORMATION
VOTING INFORMATION AND
REQUIREMENTS
General
A list of
shareholders of each Fund entitled to be present and vote at the Special Meeting
will be available at the offices of the Funds, 100 Bellevue Parkway, Wilmington,
DE 19809, for inspection by any shareholder during regular business hours for
ten days prior to the date of the Special Meeting.
Record
Date
The
Funds' Boards of Trustees have fixed the close of business on March 12, 2009 as
the record date (the "Record Date") for the determination of shareholders
entitled to notice of, and to vote at, the Special Meeting or any adjournment
thereof. Shareholders on the Record Date will be entitled to one vote
for each common share held, with no shares having cumulative voting
rights. At the Record Date, BFD had
outstanding common shares, BWC
had outstanding common shares and
the Acquiring Fund had
outstanding common shares.
Proxies
Shareholders
may vote by appearing in person at the Special Meeting, by returning the
enclosed proxy card or by casting their vote via telephone or the Internet using
the instructions provided on the enclosed proxy card and more fully described
below. Shareholders of each Fund have the opportunity to submit their
voting instructions via the Internet by utilizing a program provided
by , or by
"touch-tone" telephone voting. The giving of such a proxy will not
affect your right to vote in person should you decide to attend the Special
Meeting. To use the Internet, please access the Internet address
found on your proxy card. To record your voting instructions by
automated telephone, please call the toll-free number listed on your proxy
card. The Internet and automated telephone voting instructions are
designed to authenticate shareholder identities, to allow shareholders to give
their voting instructions, and to confirm that shareholders' instructions have
been recorded properly. Shareholders submitting their voting
instructions via the Internet should understand that there may be costs
associated with Internet access, such as usage charges from Internet access
providers and telephone companies that must be borne by the
shareholders. Any person giving a proxy may revoke it at any time
prior to its exercise by giving written notice of the revocation to the
Secretary of the Fund at the address indicated above, by delivering a duly
executed proxy bearing a later date, by recording later-dated voting
instructions via the Internet or automated telephone or by attending the Special
Meeting and voting in person. The giving of a proxy will not affect
your right to vote in person if you attend the Special Meeting and wish to do
so.
All
properly executed proxies received prior to the Special Meeting will be voted in
accordance with the instructions marked thereon or otherwise as provided
therein. Unless instructions to the contrary are marked, proxies will
be voted "FOR" the approval of each proposal. Abstentions and broker
non-votes (i.e., where a nominee such as a broker holding common shares for
beneficial owners' votes on certain matters pursuant to discretionary authority
or instructions from beneficial owners, but with respect to one or more
proposals does not receive instructions from beneficial owners or does not
exercise discretionary authority) are not treated as votes "FOR" a
proposal.
With
respect to Proposal 1, abstentions and broker non-votes will be counted as votes
cast on the proposal and will therefore have the same effect as votes "AGAINST"
the proposals since their approvals are based on the affirmative vote of a
majority of each Target Fund's outstanding common shares. With
respect to Proposal 2, abstentions will be counted as votes cast on the proposal
and will therefore have the same effect as votes "AGAINST" the
proposal. Broker non-votes will not be counted as votes cast on the
proposal and will therefore have the effect of reducing the aggregate number of
common shares voting on the proposal and reducing the number of votes "FOR"
required to approve the proposal.
With
respect to each proposal, a majority of the outstanding common shares entitled
to vote on the proposal must be present in person or by proxy to have a quorum
to conduct business at the Special Meeting. Abstentions and broker
non-votes will be deemed present for quorum purposes.
SHAREHOLDER
INFORMATION
As of
March 12, 2009, the Record Date, the officers and Trustees of each Fund, as a
group, beneficially owned less than 1% of the outstanding common shares of each
such Fund, and no person owned of record or, to the knowledge of a Fund,
beneficially 5% or more of the outstanding common shares of each such Fund,
except as follows:
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Holdings
(
common
shares)
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BFD
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BWC
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BOE
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SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section
30(f) of the 1940 Act and Section 16(a) of the Securities Exchange Act of 1934
require the Funds' Trustees, officers, investment adviser, affiliated persons of
the investment adviser and persons who own more than 10% of a registered class
of a Fund's equity securities to file forms with the SEC and the NYSE, reporting
their affiliation with a Fund and their ownership and changes in ownership of
Fund common shares. These persons and entities are required by SEC
regulation to furnish a Fund with copies of all such forms they
file. Based on a review of these forms furnished to each Fund, each
Fund believes that, during its last fiscal year, its Trustees, officers,
Investment Adviser and affiliated persons of the Investment Adviser complied
with the applicable filing requirements.
SHAREHOLDER
PROPOSALS
To be
considered for presentation at a shareholder's meeting, rules promulgated by the
SEC generally require that, among other things, a shareholder's proposal must be
received at the offices of the relevant Fund a reasonable time before
solicitation is made. Timely submission of a proposal does not
necessarily mean that such proposal will be included. Any shareholder
who wishes to submit a proposal for consideration at a meeting of such
shareholder's Fund should send such proposal to the relevant Fund at 40 East
52nd Street, New York, NY 10022, Attention: Howard B. Surloff.
SOLICITATION OF
PROXIES
Solicitation
of proxies is being made primarily by the mailing of this Notice and Joint Proxy
Statement/Prospectus with its enclosures on or about March 30,
2009. Shareholders of the Target Funds whose common shares are held
by nominees such as brokers can vote their proxies by contacting their
respective nominee. In addition to the solicitation of proxies by
mail, employees of the Investment Adviser and its affiliates as well as dealers
or their representatives may solicit proxies in person or by mail, telephone,
telegraph, facsimile or oral communication. The Funds have
retained ,
to assist the Investment Adviser in the solicitation and tabulation of proxies
from the Funds' shareholders. The cost of services
of in
connection with the proxy, including out of pocket expenses, is approximately
$129,153 for BFD, $158,749 for BWC and $62,098 for BOE. Proxy
solicitation expenses are an expense of the Reorganizations which will be borne
directly by the respective Fund incurring the expense or allocated among the
Funds based upon some reasonable methodology as appropriate.
LEGAL
MATTERS
Certain
legal matters concerning the U.S. federal income tax consequences of the
Reorganizations and the issuance of Acquiring Fund Common Shares will be passed
upon by Skadden Arps, which serves as special counsel to the Target Funds and
the Acquiring Fund.
OTHER MATTERS WITH RESPECT TO THE
MEETING
A
representative
of may attend
the Special Meeting, will have the opportunity to make a statement if he or she
desires to do so and will be available to answer appropriate
questions.
Failure
of a quorum to be present at the Special Meeting, or any adjournment thereof,
will necessitate adjournment. The persons named in the enclosed proxy may also
move for an adjournment of the Special Meeting to permit further solicitation of
proxies with respect to the proposals if they determine that adjournment and
further solicitation are reasonable and in the best interests of shareholders.
Any such adjournment will require the affirmative vote of a majority of the
shares of the respective Fund present in person or by proxy and entitled to vote
at the time of the Special Meeting to be adjourned. The persons named as proxies
will vote in favor of any such adjournment if they believe the adjournment and
additional proxy solicitation are reasonable and in the best interests of the
respective Fund's shareholders. For purposes of determining the presence of a
quorum, abstentions and broker non-votes will be treated as shares that are
present at the Special Meeting.
If you
cannot be present in person at the Special Meeting, please fill in, sign and
return the enclosed proxy card or please record your voting instructions by
telephone or via the Internet promptly. No postage is necessary if
the enclosed proxy card is mailed in the United States.
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Donald
C. Burke
President
and Chief Executive Officer
BlackRock
Global Equity Income Trust
BlackRock
World Investment Trust
BlackRock
Global Opportunities Equity Trust
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March
30,
2009
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The
information in this Reorganization Statement of Additional Information is not
complete and may be changed. These securities may not be sold until
the registration statement filed with the Securities and Exchange Commission is
effective. This Reorganization Statement of Additional Information is
not an offer to sell these securities and is not soliciting an offer to buy
these securities in any state where the offer or sale is not
permitted.
Subject
to completion, dated February 10, 2009
REORGANIZATION
STATEMENT OF ADDITIONAL INFORMATION
RELATING
TO THE ACQUISITION OF THE ASSETS AND LIABILITIES OF
BLACKROCK
GLOBAL EQUITY INCOME TRUST
AND
BLACKROCK
WORLD INVESTMENT TRUST
BY
AND IN EXCHANGE FOR SHARES OF
BLACKROCK
GLOBAL OPPORTUNITIES EQUITY TRUST
Dated
March 30, 2009
This
Reorganization Statement of Additional Information is available to the
shareholders of BlackRock Global Equity Income Trust ("BFD") and BlackRock World
Investment Trust ("BWC") (each such fund being referred to herein individually a
"Target Fund" and collectively as the "Target Funds") in connection
with proposed reorganizations (each a "Reorganization" and, collectively, the
"Reorganizations") whereby BlackRock Global Opportunities Equity Trust ("BOE" or
the "Acquiring Fund") will acquire substantially all of the assets and assume
substantially all of the liabilities of the Target Funds in exchange for an
equal aggregate value of newly-issued common shares, par value $0.001 per share
("Acquiring Fund Common Shares"). The Target Funds will distribute Acquiring
Fund Common Shares to common shareholders of the Target Funds, and will then
terminate their registrations under the Investment Company Act of 1940 (the
"1940 Act") and dissolve under Delaware law. A copy of a form of the
Agreement and Plan of Reorganization between each Target Fund and the Acquiring
Fund is attached hereto as Appendix A. Unless otherwise defined herein,
capitalized terms have the meanings given to them in the Joint Proxy
Statement/Prospectus.
This
Reorganization Statement of Additional Information is not a prospectus and
should be read in conjunction with the Joint Proxy Statement/Prospectus dated
March 30, 2009 relating to the proposed Reorganizations of the Target Funds into
the Acquiring Fund. A copy of the Joint Proxy Statement/Prospectus
may be obtained, without charge, by writing to the Fund at
P.O. Box 9011,
Princeton, NJ 08543-9011,
or by calling (800)
882-0052.
The
Acquiring Fund will provide, without charge, upon the written or oral request of
any person to whom this Reorganization Statement of Additional Information is
delivered, a copy of any and all documents that have been incorporated by
reference in the registration statement of which this Reorganization Statement
of Additional Information is a part.
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INVESTMENT
OBJECTIVES AND POLICIES OF THE ACQUIRING FUND
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S-3
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RISK
FACTORS AND SPECIAL CONSIDERATIONS
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S-10
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TRUSTEES
AND OFFICERS
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S-12
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INVESTMENT
MANAGEMENT AGREEMENTS
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S-20
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OTHER
AGREEMENTS
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S-22
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FUND
MANAGEMENT
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S-23
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OTHER
INFORMATION
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S-30
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INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
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S-31
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FINANCIAL
STATEMENTS
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S-31
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PRO
FORMA FINANCIAL STATEMENTS
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S-31
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APPENDIX
A FORM OF AGREEMENT AND PLAN OF REORGANIZATION
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A-1
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APPENDIX
B PRO FORMA FINANCIAL STATEMENTS
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B-1
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APPENDIX
C PROXY VOTING POLICIES
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C-1
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INVESTMENT
OBJECTIVES AND POLICIES OF THE ACQUIRING FUND
The
following information supplements the discussion of the Acquiring Fund's
investment objective, policies and techniques that are described in the Joint
Proxy Statement/Prospectus.
Short-Term
Debt Securities
For temporary defensive
purposes or to keep cash on hand, the Acquiring Fund may invest up to 100% of
its total assets in cash equivalents and short-term debt securities. Short-term
debt investments are defined to include, without limitation, the
following:
(1) U.S.
Government securities, including bills, notes and bonds differing as to maturity
and rates of interest that are either issued or guaranteed by the U.S. Treasury
or by U.S. Government agencies or instrumentalities. U.S. Government securities
include securities issued by (a) the Federal Housing Administration, Farmers
Home Administration, Export-Import Bank of the United States, Small Business
Administration, and Government National Mortgage Association, whose securities
are supported by the full faith and credit of the United States; (b) the Federal
Home Loan Banks, Federal Intermediate Credit Banks,
and
Tennessee Valley Authority, whose securities are supported by the right of the
agency to borrow from the U.S. Treasury; (c) the Federal National Mortgage
Association, whose securities are supported by the discretionary authority of
the U.S. Government to purchase certain obligations of the agency or
instrumentality; and (d) the Student Loan Marketing Association, whose
securities are supported only by its credit. While the U.S. Government provides
financial support to such U.S. Government-sponsored agencies or
instrumentalities, no assurance can be given that it always will do so since it
is not so obligated by law. The U.S. Government, its agencies and
instrumentalities do not guarantee the market value of their securities.
Consequently, the value of such securities may fluctuate.
(2) Certificates
of deposit issued against funds deposited in a bank or a savings and loan
association. Such certificates are for a definite period of time, earn a
specified rate of return, and are normally negotiable. The issuer of a
certificate of deposit agrees to pay the amount deposited plus interest to the
bearer of the certificate on the date specified thereon. Certificates of deposit
purchased by the Acquiring Fund may not be fully insured by the Federal Deposit
Insurance Corporation.
(3) Repurchase
agreements, which involve purchases of debt securities. At the time the
Acquiring Fund purchases securities pursuant to a repurchase agreement, it
simultaneously agrees to resell and redeliver such securities to the seller, who
also simultaneously agrees to buy back the securities at a fixed price and time.
This assures a predetermined yield for the Acquiring Fund during its holding
period, since the resale price is always greater than the purchase price and
reflects an agreed-upon market rate. Such actions afford an opportunity for the
Acquiring Fund to invest temporarily available cash. The Acquiring Fund may
enter into repurchase agreements only with respect to obligations of the U.S.
Government, its agencies or instrumentalities; certificates of deposit; or
bankers’ acceptances in which the Acquiring Fund may invest. Repurchase
agreements may be considered loans to the seller, collateralized by the
underlying securities. The risk to the Acquiring Fund is limited to the ability
of the seller to pay the agreed-upon sum on the repurchase date; in the event of
default, the repurchase agreement provides that the Acquiring Fund is entitled
to sell the underlying collateral. If the value of the collateral declines after
the agreement is entered into, and if the seller defaults under a repurchase
agreement when the value of the underlying collateral is less than the
repurchase price, the Acquiring Fund could incur a loss of both principal and
interest. The Investment Adviser monitors the value of the collateral at the
time the action is entered into and at all times during the term of the
repurchase agreement. The Investment Adviser does so in an effort to determine
that the value of the collateral always equals or exceeds the agreed-upon
repurchase price to be paid to the Acquiring Fund. If the seller were to be
subject to a federal bankruptcy proceeding, the ability of the Acquiring Fund to
liquidate the collateral could be delayed or impaired because of certain
provisions of the bankruptcy laws.
(4) Commercial
paper, which consists of short-term unsecured promissory notes, including
variable rate master demand notes issued by corporations to finance their
current operations. Master demand notes are direct lending arrangements between
the Acquiring Fund and a corporation. There is no secondary market for such
notes. However, they are redeemable by the Acquiring Fund at any time. The
Investment Adviser will consider the financial condition of the corporation (
e.g.
, earning power,
cash flow and other liquidity ratios) and will continually monitor the
corporation’s ability to meet all of its financial obligations, because the
Acquiring Fund’s liquidity might be impaired if the corporation were unable to
pay principal and interest on demand. Investments in commercial paper will be
limited to commercial paper rated in the highest categories by a major rating
agency and which mature within one year of the date of purchase or carry a
variable or floating rate of interest.
Equity
Securities
While the
Acquiring Fund primarily invests in common stocks, it may also invest in other
equity securities including preferred stocks, convertible securities, warrants,
depository receipts and equity interests in real estate investment trusts. The
Target Funds also are permitted to invest in these other types of equity
securities.
Convertible
Securities
.
A
convertible security is a bond, debenture, note, preferred stock or other
security that may be converted into or exchanged for a prescribed amount of
common stock or other equity security of the same or a different issuer within a
particular period of time at a specified price or formula. A convertible
security entitles the holder to receive interest paid or accrued on debt or the
dividend paid on preferred stock until the convertible security matures or is
redeemed, converted or exchanged. Before conversion, convertible securities have
characteristics similar to nonconvertible income securities in that they
ordinarily provide a stable stream of income with generally higher yields than
those of common stocks of the same or similar issuers, but lower yields than
comparable nonconvertible securities. The value of a convertible security is
influenced by changes in interest rates, with investment value declining as
interest rates increase and increasing as interest rates decline. The credit
standing of the issuer and other factors also may have an effect on the
convertible security’s investment value. Convertible securities rank senior to
common stock in a corporation’s capital structure but are usually subordinated
to comparable nonconvertible securities. Convertible securities may be subject
to redemption at the option of the issuer at a price established in the
convertible security’s governing instrument.
Warrants
.
Warrants
are privileges issued by corporations enabling the owners to subscribe to and
purchase a specified number of shares of the corporation at a specified price
during a specified period of time. Subscription rights normally have a short
life span. The purchase of warrants involves the risk that the Acquiring Fund
could lose the purchase value of a right or warrant if the right to subscribe to
additional shares is not exercised prior to the warrant's expiration. Also, the
purchase of warrants involves the risk that the effective price paid for the
warrant added to the subscription price of the related security may exceed the
value of the subscribed security’s market price, such as when there is no
movement in the value level of the underlying security.
Depository
Receipts
.
The
Acquiring Fund may invest in both sponsored and unsponsored American Depository
Receipts (“ADRs”), European Depository Receipts (“EDRs”), Global Depository
Receipts (“GDRs”) and other similar global instruments. ADRs typically are
issued by an American bank or trust company and evidence ownership of underlying
securities issued by a non-U.S. corporation. EDRs, which are sometimes referred
to as Continental Depository Receipts, are receipts issued in Europe, typically
by non-U.S. banks and trust companies, that evidence ownership of either
non-U.S. or domestic underlying securities. GDRs are depository receipts
structured like global debt issues to facilitate trading on an international
basis. Unsponsored ADR, EDR and GDR programs are organized independently and
without the cooperation of the issuer of the underlying securities. As a result,
available information concerning the issuer may not be as current as for
sponsored ADRs, EDRs and GDRs, and the prices of unsponsored ADRs, EDRs and GDRs
may be more volatile than if such instruments were sponsored by the issuer.
Investments in ADRs, EDRs and GDRs present additional investment considerations
of non-U.S. securities.
Real Estate
Investment Trusts ("REITs")
.
In
pursuing its investment strategy, the Acquiring Fund may invest in shares of
REITs. REITs possess certain risks which differ from an investment in common
stocks. REITs are financial vehicles that pool investors' capital to purchase or
finance real estate. REITs may concentrate their investments in specific
geographic areas or in specific property types,
i.e.
, hotels, shopping malls,
residential complexes and office buildings. The market value of REIT shares and
the ability of the REITs to distribute income may be adversely affected by
several factors, including rising interest rates, changes in the national, state
and local economic climate and real estate conditions, perceptions of
prospective tenants of the safety, convenience and attractiveness of the
properties, the ability of the owners to provide adequate management,
maintenance and insurance, the cost of complying with the Americans with
Disabilities Act, increased competition from new properties, the impact of
present or future environmental legislation and compliance with environmental
laws, changes in real estate taxes and other operating expenses, adverse changes
in governmental rules and fiscal policies, adverse changes in zoning laws, and
other factors beyond the control of the issuers of the REITs. In addition,
distributions received by the Acquiring Fund from REITs may consist of
dividends, capital gains, and/or return of
capital. As REITs
generally pay a higher rate of dividends (on a pre-tax basis) than operating
companies, to the extent application of the Acquiring Fund’s investment strategy
results in investing in REIT shares, the percentage of the Acquiring Fund’s
dividend income received from REIT shares will likely exceed the percentage of
the Acquiring Fund’s portfolio which is comprised of REIT shares. Generally,
dividends received by the Acquiring Fund from REIT shares and distributed to the
Acquiring Fund’s shareholders will not constitute “qualified dividend income”
eligible for the reduced tax rate applicable to qualified dividend income;
therefore, the tax rate applicable to that portion of the dividend income
attributable to REIT shares held by the Acquiring Fund that shareholders of the
Acquiring Fund receive will be taxed at a higher rate than dividends eligible
for the reduced tax rate applicable to qualified dividend
income.
Non-Investment
Grade Securities
The
Acquiring Fund may invest up to 10% of its total assets in securities rated
below investment grade such as those rated Ba or below by Moody’s Investors
Service, Inc. (“Moody’s”) or BB or below by Standard & Poor’s Ratings Group,
a division of The McGraw-Hill Companies, Inc. (“S&P”) or Fitch Ratings
(“Fitch”) or securities comparably rated by other rating agencies or in unrated
securities determined by the Investment Adviser to be of comparable quality.
Securities rated Ba and below by Moody’s and Fitch are judged to have
speculative elements; their future cannot be regarded as well assured and often
the protection of interest and principal payments may be very moderate.
Securities rated BB by S&P are regarded as having predominantly speculative
characteristics and, while such obligations have less near-term vulnerability to
default than other speculative grade debt, they face major ongoing uncertainties
or exposure to adverse business, financial or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
Lower grade securities, though high yielding, are characterized by high risk.
They may be subject to certain risks with respect to the issuing entity and to
greater market fluctuations than certain lower yielding, higher rated
securities. The retail secondary market for lower grade securities may be less
liquid than that of higher rated securities; adverse conditions could make it
difficult at times for the Acquiring Fund to sell securities or could result in
lower prices than those used in calculating the Acquiring Fund’s net asset
value. The prices of debt securities generally are
inversely
related to interest rate changes; however, the price volatility caused by
fluctuating interest rates of securities also is inversely related to the
coupons of such securities. Accordingly, below investment grade securities may
be relatively less sensitive to interest rate changes than higher quality
securities of comparable maturity because of their higher coupon. This higher
coupon is what the investor receives in return for bearing greater credit risk.
The higher credit risk associated with below investment grade securities
potentially can have a greater effect on the value of such securities than may
be the case with higher quality issues of comparable maturity. Lower grade
securities may be particularly susceptible to economic downturns. It is likely
that an economic recession could severely disrupt the market for such securities
and may have an adverse impact on the value of such securities. In addition, it
is likely that any such economic downturn could adversely affect the ability of
the issuers of such securities to repay principal and pay interest thereon and
increase the incidence of default for such securities. The ratings of Moody’s,
S&P and other rating agencies represent their opinions as to the quality of
the obligations which they undertake to rate. Ratings are relative and
subjective and, although ratings may be useful in evaluating the safety of
interest and principal payments, they do not reflect the potential market value
of such obligations. Therefore, although these ratings may be a useful initial
criterion for selection of portfolio investments, the Investment Adviser will
independently evaluate these securities and the ability for the issuers of such
securities to pay interest and principal. To the extent that the Acquiring Fund
invests in lower grade securities that have not been rated by a rating agency,
the Acquiring Fund’s ability to achieve its investment objective will be more
dependent on the Investment Adviser’s credit analysis than would be the case
when the Acquiring Fund invests in rated securities.
Strategic
Transactions and Risk Management
Futures Contracts
and Options on Futures Contracts
.
In
connection with its Strategic Transactions and other risk management strategies,
the Acquiring Fund may also enter into contracts for the purchase or sale for
future delivery (“futures contracts”) of securities, aggregates of securities or
indices or prices thereof, other financial indices and U.S. government debt
securities or options on the above. The Acquiring Fund will engage in such
transactions only for bona fide risk management and other portfolio management
purposes.
Forward Foreign
Currency Contracts.
The
Acquiring Fund may enter into forward currency contracts to purchase or sell
foreign currencies for a fixed amount of U.S. dollars or another foreign
currency. A forward currency contract involves an obligation to purchase or sell
a specific currency at a future date, which may be any fixed number of days
(term) from the date of the forward currency contract agreed upon by the
parties, at a price set at the time the forward currency contract is entered
into. Forward currency contracts are traded directly between currency traders
(usually large commercial banks) and their customers. The Acquiring Fund may
purchase a forward currency contract to lock in the U.S. dollar
price
of a
security denominated in a foreign currency that the Acquiring Fund intends to
acquire. The Acquiring Fund may sell a forward currency contract to lock in the
U.S. dollar equivalent of the proceeds from the anticipated sale of a security
or a dividend or interest payment denominated in a foreign currency. The
Acquiring Fund may also use forward currency contracts to shift the Acquiring
Fund’s exposure to foreign currency exchange rate changes from one currency to
another. For example, if the Acquiring Fund owns securities denominated in a
foreign currency and the Investment Adviser believes that currency will decline
relative to another currency, the Acquiring Fund might enter into a forward
currency contract to sell the appropriate amount of the first foreign currency
with payment to be made in the second currency. The Acquiring Fund may also
purchase forward currency contracts to enhance income when the Investment
Adviser anticipates that the foreign currency will appreciate in value but
securities denominated in that currency do not present attractive investment
opportunities. The Acquiring Fund may also use forward currency contracts to
offset against a decline in the value of existing investments denominated in a
foreign currency. Such a transaction would tend to offset both positive and
negative currency fluctuations, but would not offset changes in security values
caused by other factors. The Acquiring Fund could also enter into a forward
currency contract to sell another currency expected to perform similarly to the
currency in which the Acquiring Fund’s existing investments are denominated.
This type of transaction could offer advantages in terms of cost, yield or
efficiency, but may not offset currency exposure as effectively as a simple
forward currency transaction to sell U.S. dollars. This type of transaction may
result in losses if the currency sold does not perform similarly to the currency
in which the Acquiring Fund’s existing investments are denominated. The
Acquiring Fund may also use forward currency contracts in one currency or a
basket of currencies to attempt to offset against fluctuations in the value of
securities denominated in a different currency if the Investment Adviser
anticipates that there will be a correlation between currencies. The cost to the
Acquiring Fund of engaging in forward currency contracts varies with factors
such as the currency involved, the length of the contract period and the market
conditions then prevailing. Because forward currency contracts are usually
entered into on a principal basis, no fees or commissions are involved. When the
Acquiring Fund enters into a forward currency contract, it relies on the
counterparty to make or take delivery of the underlying currency at the maturity
of the contract. Failure by the counterparty to do so would result in the loss
of some or all of any expected benefit from the transaction. Secondary markets
generally do not exist for forward currency contracts, with the result that
closing transactions generally can be made for forward currency contracts only
by negotiating directly with the counterparty. Thus, there can be no assurance
that the Acquiring Fund will in fact be able to close out a forward currency
contract at a favorable price prior to maturity. In addition, in the event of
insolvency of the counterparty, the Acquiring Fund might be unable to close out
a forward currency contract. In either event, the Acquiring Fund would continue
to be subject to market risk with respect to the position, and would continue to
be required to maintain a
position in securities denominated
in the foreign currency or to maintain cash or liquid assets in a segregated
account. The precise matching of forward currency contract amounts and the value
of the securities involved generally will not be possible because the value of
such securities, measured in the foreign currency, will change after the forward
currency contract has been established. Thus, the Acquiring Fund might need to
purchase or sell foreign currencies in the spot (cash) market to the extent such
foreign currencies are not covered by forward currency contracts. Accurate
projection of short-term currency market movements is extremely difficult, and
the successful execution of a short-term strategy is highly
uncertain.
Calls on
Securities, Indices and Futures Contracts
.
In
addition to its option strategy, in order to enhance income or reduce
fluctuations on net asset value, the Acquiring Fund may sell or purchase call
options (“calls”) on securities and indices based upon the prices of futures
contracts and debt or equity securities that are traded on U.S. and non-U.S.
securities exchanges and in the over-the-counter markets. A call option gives
the purchaser of the option the right to buy, and obligates the seller to sell,
the underlying security, futures contract or index at the exercise price at any
time or at a specified time during the option period. All such calls sold by the
Acquiring Fund must be “covered” as long as the call is outstanding (
i.e.
, the Acquiring Fund must
own the instrument subject to the call or other securities or assets acceptable
for applicable segregation and coverage requirements). A call sold by the
Acquiring Fund exposes the Acquiring Fund during the term of the option to
possible loss of opportunity to realize appreciation in the market price of the
underlying security, index or futures contract and may require the Acquiring
Fund to hold an instrument which it might otherwise have sold. The purchase of a
call gives the Acquiring Fund the
right to
buy a security, futures contract or index at a fixed price. Calls on futures on
securities must also be covered by assets or instruments acceptable under
applicable segregation and coverage requirements.
Puts on
Securities, Indices and Futures Contracts
.
In
addition to its option strategy, the Acquiring Fund may purchase put options
(“puts”) that relate to securities (whether or not it holds such securities in
its portfolio), indices or futures contracts. For the same purposes, the
Acquiring Fund may also sell puts on securities, indices or futures contracts on
such securities if the Acquiring Fund’s contingent obligations on such puts are
secured by segregated assets consisting of cash or liquid debt securities having
a value not less than the exercise price. In selling puts, there is a risk that
the Acquiring Fund may be required to buy the underlying security at a price
higher than the current market price.
Interest Rate
Transactions
.
Among
the Strategic Transactions which the Acquiring Fund may enter into are interest
rate swaps and the purchase or sale of interest rate caps and floors. The
Acquiring Fund expects to enter into these transactions primarily to preserve a
return or spread on a particular investment or portion of its portfolio as a
duration management technique or to protect against any increase in the price of
securities the Acquiring Fund anticipates purchasing at a later date. The
Acquiring Fund intends to use these transactions for risk management purposes
and not as a speculative investment. The Acquiring Fund will not sell interest
rate caps or floors that it does not own. Interest rate swaps involve the
exchange by the Acquiring Fund with another party of their respective
commitments to pay or receive interest, e.g., an exchange of floating rate
payments for fixed rate payments with respect to a notional amount of principal.
The purchase of an interest rate cap entitles the purchaser, to the extent that
a specified index exceeds a predetermined interest rate, to receive payments of
interest on a notional principal amount from the party selling such interest
rate cap. The purchase of an interest rate floor entitles the purchaser, to the
extent that a specified index falls below a predetermined interest rate, to
receive payments of interest on a notional principal amount from the party
selling such interest rate floor.
The
Acquiring Fund may enter into interest rate swaps, caps and floors on either an
asset-based or liability-based basis, depending on whether it is offsetting
volatility with respect to its assets or liabilities, and will usually enter
into interest rate swaps on a net basis,
i.e.
, the two payment streams
are netted out, with the Acquiring Fund receiving or paying, as the case may be,
only the net amount of the two payments on the payment dates. Inasmuch as these
Strategic Transactions are entered into for good faith risk management purposes,
the Investment Adviser and the Acquiring Fund believe such obligations do not
constitute senior securities, and, accordingly will not treat them as being
subject to its borrowing restrictions. The Acquiring Fund will accrue the net
amount of the excess, if any, of the Acquiring Fund’s obligations over its
entitlements with respect to each interest rate swap on a daily basis and will
designate on its books and records with a custodian an amount of cash or liquid
high grade securities having an aggregate net asset value at all times
at least equal to the accrued excess. The Acquiring Fund will
not enter into any interest rate swap, cap or floor transaction unless the
unsecured senior debt or the claims paying ability of the other party thereto is
rated in the highest rating category of at least one nationally recognized
statistical rating organization at the time of entering into such transaction.
If there is a default by the other party to such a transaction, the Acquiring
Fund will have contractual remedies in place pursuant to the agreements related
to the transaction. The swap market has grown substantially in recent years with
a large number of banks and investment banking firms acting both as principals
and as agents utilizing standardized swap documentation. Caps and floors are
more recent innovations for which standardized documentation has not yet been
developed and, accordingly, they are less liquid than swaps.
Credit
Derivatives
.
The
Acquiring Fund may engage in credit derivative transactions. There are two broad
categories of credit derivatives: default price risk derivatives and market
spread derivatives. Default price risk derivatives are linked to the price of
reference securities or loans after a default by the issuer or borrower,
respectively. Market spread derivatives are based on the risk that changes in
market factors, such as credit spreads, can cause a decline in the value of a
security, loan or index.
There are
three basic transactional forms for credit derivatives: swaps, options and
structured instruments. The use of credit derivatives is a highly specialized
activity which involves strategies and risks different from those associated
with ordinary portfolio security transactions. If the Investment Adviser was
incorrect in its forecasts of default risks, market spreads or other applicable
factors, the investment
performance
of the Acquiring Fund would diminish compared with what it would have been if
these techniques were not used. Moreover, even if the Investment Adviser was
correct in its forecasts, there is a risk that a credit derivative position
might correlate imperfectly with the price of the asset or liability being
purchased. There is limit on the amount of credit derivative
transactions that may be entered with respect to fixed income securities because
80% of its total assets will be invested in equity securities or options on
equity securities or indices or sectors of equity securities. The
Acquiring Fund’s risk of loss in a credit derivative transaction varies with the
form of the transaction. For example, if the Acquiring Fund purchases a default
option on a security, and if no default occurs with respect to the security, the
Acquiring Fund’s loss is limited to the premium it paid for the default option.
In contrast, if there is a default by the grantor of a default option, the
Acquiring Fund’s loss will include both the premium that it paid for the option
and the decline in value of the underlying security that the default option
protects.
Appendix
D contains further information about the characteristics, risks and possible
benefits of Strategic Transactions and the Acquiring Fund’s other policies and
limitations (which are not fundamental policies) relating to investment in
futures contracts and options. The principal risks relating to the use of
futures contracts and other Strategic Transactions are: (a) less than
perfect correlation between the prices of the instrument and the market value of
the securities in the Acquiring Fund’s portfolio; (b) possible lack of a liquid
secondary market for closing out a position in such instruments; (c) losses
resulting from interest rate or other market movements not anticipated by the
Investment Adviser; and (d) the obligation to meet additional variation margin
or other payment requirements, all of which could result in the Acquiring Fund
being in a worse position than if such techniques had not been
used.
Restricted
and Illiquid Securities
Certain
of the Acquiring Fund’s investments may be illiquid. Illiquid securities are
subject to legal or contractual restrictions on disposition or lack an
established secondary trading market. The sale of restricted and illiquid
securities often requires more time and results in higher brokerage charges or
dealer discounts and other selling expenses than does the sale of securities
eligible for trading on national securities exchanges or in the over-the-counter
markets. Restricted securities may sell at a price lower than similar securities
that are not subject to restrictions on resale.
When-Issued
and Forward Commitment Securities
The
Acquiring Fund may purchase securities on a “when-issued” basis and may purchase
or sell securities on a “forward commitment” basis in order to acquire the
security or to offset against anticipated changes in interest rates and prices.
When such transactions are negotiated, the price, which is generally expressed
in yield terms, is
fixed at the time the commitment is made,
but delivery and payment for the securities take place at a later date.
When-issued securities and forward commitments may be sold prior to the
settlement date, but the Acquiring Fund will enter into when-issued and forward
commitments only with the intention of actually receiving or delivering the
securities, as the case may be. If the Acquiring Fund disposes of the right to
acquire a when-issued security prior to its acquisition or disposes of its right
to deliver or receive against a forward commitment, it might incur a gain or
loss. At the time the Acquiring Fund enters into a transaction on a when-issued
or forward commitment basis, it will designate on its books and records cash or
liquid debt securities equal to at least the value of the when-issued or forward
commitment securities. The value of these assets will be monitored daily to
ensure that their marked to market value will at all times equal or exceed the
corresponding obligations of the Acquiring Fund. There is always a risk that the
securities may not be delivered and that the Acquiring Fund may incur a loss.
Settlements in the ordinary course, which may take substantially more than five
business days, are not treated by the Acquiring Fund as when-issued or forward
commitment transactions and accordingly are not subject to the foregoing
restrictions.
Repurchase
Agreements
As
temporary investments, the Acquiring Fund may invest in repurchase agreements. A
repurchase agreement is a contractual agreement whereby the seller of securities
agrees to repurchase the same security at a specified price on a future date
agreed upon by the parties. The agreed-upon repurchase
price
determines the yield during the Acquiring Fund’s holding period. Repurchase
agreements are considered to be loans collateralized by the underlying security
that is the subject of the repurchase contract. The Acquiring Fund will only
enter into repurchase agreements with registered securities dealers or domestic
banks that, in the opinion of the Investment Adviser, present minimal credit
risk. The risk to the Acquiring Fund is limited to the ability of the issuer to
pay the agreed-upon repurchase price on the delivery date; however, although the
value of the underlying collateral at the time the transaction is entered into
always equals or exceeds the agreed-upon repurchase price, if the value of the
collateral declines there is a risk of loss of both principal and interest. In
the event of default, the collateral may be sold but the Acquiring Fund might
incur a loss if the value of the collateral declines, and might incur
disposition costs or experience delays in connection with liquidating the
collateral. In addition, if bankruptcy proceedings are commenced with respect to
the seller of the security, realization upon the collateral by the Acquiring
Fund may be delayed or limited. The Investment Adviser will monitor the value of
the collateral at the time the transaction is entered into and at all times
subsequent during the term of the repurchase agreement in an effort to determine
that such value always equals or exceeds the agreed-upon repurchase price. In
the event the value of the collateral declines below the repurchase price, the
Investment Adviser will demand additional collateral from the issuer to increase
the value of the collateral to at least that of the repurchase price, including
interest.
RISK
FACTORS AND SPECIAL CONSIDERATIONS
The
following information supplements the discussion of the Acquiring Fund's and the
Target Funds' risk factors that are described in the Joint Proxy
Statement/Prospectus and the preceding discussion of the Acquiring Fund's
investment objective, policies and techniques.
Non-Investment
Grade Securities Risk
The
Acquiring Fund may invest up to 10% of the value of its total assets in
securities that are below investment grade. BWC is permitted to
invest up to 25% of the value of its total assets in securities rated below
investment grade. BFD currently does not generally invest in debt securities
rated below investment grade securities, such as those rated Ba or lower by
Moody’s Investors Service, Inc. (“Moody’s”) and BB or lower by Standard &
Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc. (“S&P”)
or Fitch Ratings (“Fitch”) or securities comparably rated by other rating
agencies or in unrated securities determined by BlackRock to be of comparable
quality.
Non-investment
grade securities are commonly referred to as "junk bonds." Investments in lower
grade securities will expose the Acquiring Fund to greater risks than if the
Acquiring Fund owned only higher grade debt securities. Because of the
substantial risks associated with lower grade securities, you could lose money
on your investment in common shares of the Acquiring Fund, both in the
short-term and the long-term. Lower grade securities, though high yielding, are
characterized by high risk. They may be subject to certain risks with respect to
the issuing entity and to greater market fluctuations than certain lower
yielding, higher rated securities. The retail secondary market for lower grade
debt securities may be less liquid than that of higher rated debt securities.
Adverse conditions could make it difficult at times for the Acquiring Fund to
sell certain securities or could result in lower prices than those used in
calculating the Acquiring Fund's net asset value. The Acquiring Fund
is more limited with regard to investing in non-investment grade securities than
BWC, which may invest up to 25% of the value of its total assets in securities
below investment grade. BFD, however, currently does not invest in
below investment grade securities, so the Acquiring Fund is subject to greater
risk with respect to non-investment grade securities than BFD.
Non-U.S.
Securities Risk
Since the
Acquiring Fund may invest without limitation in equity and debt securities of
non-U.S. securities issuers, it offers the potential for more diversification
than a fund that invests only in issuers domiciled in the United
States. This is because securities traded on foreign markets have
often (though not always) performed differently from securities traded in the
United States. However, such investments involve special risks not
present in U.S. investments that can increase the chances that the Acquiring
Fund
will lose
money. In particular, prices of foreign securities may go up and down
more than prices of securities traded in the United States.
The
economies of certain foreign markets may not compare favorably with the economy
of the United States with respect to such issues as growth of gross national
product, reinvestment of capital, resources and balance of payments
position. Such economies may rely heavily on particular industries or
foreign capital and are more vulnerable to diplomatic developments, the
imposition of economic sanctions against a particular country or countries,
changes in international trading patterns, trade barriers and other
protectionist or retaliatory measures.
Investments
in non-U.S. securities also may be adversely affected by governmental actions
such as the imposition of capital controls, nationalization of companies or
industries, expropriation of assets or the imposition of punitive
taxes. In addition, the governments of certain countries may prohibit
or impose substantial restrictions on foreign investment in their capital
markets or in certain industries. Any of these actions could severely
affect securities prices, impair the Acquiring Fund's ability to purchase or
sell foreign securities or transfer the Acquiring Fund's assets or income back
into the United States, or otherwise adversely affect the Acquiring Fund's
operations.
Other
non-U.S. securities risks include foreign exchange controls, difficulties in
pricing securities, defaults on foreign government securities, difficulties in
enforcing favorable legal judgments in foreign courts and political and social
instability. Legal remedies available to investors in certain foreign
countries may be less extensive than those available to investors in the United
States or other foreign countries.
Many
foreign governments supervise and regulate stock exchanges, brokers and the sale
of securities less than the United States does. Some countries may
not have laws to protect investors the way that the U.S. securities laws
do. For example, some foreign countries may have no laws or rules
against insider trading. Insider trading occurs when a person buys or
sells a company's securities based on non-public information about that
company. Accounting standards in other countries are not necessarily
the same as in the United States. If the accounting standards in
another country do not require as much detail as U.S. accounting standards, it
may be harder for the Investment Adviser to completely and accurately determine
a company's financial condition.
Settlement
and clearance procedures in certain foreign markets differ significantly from
those in the United States. Foreign settlement and clearance
procedures and trade regulations also may involve certain risks (such as delays
in payment for or delivery of securities) not typically generated by the
settlement of U.S. investments. Communications between the United
States and emerging market countries may be unreliable, increasing the risk of
delayed settlements or losses of security certificates. Settlements
in certain foreign countries at times have not kept pace with the number of
securities transactions; these problems may make it difficult for the Acquiring
Fund to carry out transactions. If the Acquiring Fund cannot settle
or is delayed in settling a purchase of securities, it may miss attractive
investment opportunities, and certain of its assets may be uninvested with no
return earned thereon for some period. If the Acquiring Fund cannot
settle or is delayed in settling a sale of securities, it may lose money if the
value of the security then declines, or, if it has contracted to sell the
security to another party, the Acquiring Fund could be liable for any losses
incurred.
Portfolio
Turnover Risk
The
Acquiring Fund will engage in portfolio trading as dictated by its investment
strategy, regardless of any income tax consequences or brokerage costs to
shareholders. Although the Acquiring Fund cannot accurately predict
its annual portfolio turnover rate, it is expected that the portfolio turnover
rate of the Acquiring Fund will be greater than that of BFD and similar to that
of BWC. As of October 31, 2008, the yearly turnover rates for BFD,
BWC and the Acquiring Fund were 72%, 123% and 120%,
respectively. However, after the
April , 2009 restructuring of its portfolio,
BFD expects that its portfolio turnover rate will be similar to that of the
Acquiring Fund and BWC. The Acquiring Fund's annual portfolio
turnover rate may continue to be greater than 100%. There are no limits on the
rate of portfolio turnover, and investments may be sold without regard to length
of time held when the Acquiring Fund's
investment
strategy so dictates. A higher portfolio turnover rate results in
correspondingly greater brokerage commissions and other transactional expenses
that are borne by the Acquiring Fund. High portfolio turnover may
result in the realization of net short term capital gains by the Acquiring Fund
which, when distributed to shareholders, will be taxable as ordinary
income.
TRUSTEES
AND OFFICERS
General
The Board
of Trustees of each Fund currently consists of 12 individuals, 10 of whom are
not "interested persons" of the Fund as defined in the 1940 Act (the
"Independent Trustees"). The Trustees are responsible for the
oversight of the operations of the Acquiring Fund and perform the various duties
imposed on the Trustees of investment companies by the 1940 Act. The
Independent Trustees have retained independent legal counsel to assist them in
connection with their duties. The Trustees and officers of the
Acquiring Fund hold the same positions in each Target Fund.
As a
result of the merger of BlackRock and Merrill Lynch & Co., Inc.'s investment
management business, a consolidation of the Board of Trustees of each Fund took
place on November 1, 2007, in which certain prior Trustees departed and certain
Trustees were added to the Board, resulting in a net increase in the size of
each Fund's Board of Trustees.
The Board
of Trustees currently has five standing committees: an Executive Committee, an
Audit Committee, a Governance and Nominating Committee, a Compliance Committee
and a Performance Oversight Committee.
The Audit
Committee is comprised of Karen P. Robards, Kent Dixon, Frank J. Fabozzi, James
T. Flynn and W. Carl Kester, each of whom is an Independent
Trustee. The primary purposes of the Audit Committee is to assist the
Board of Trustees in fulfilling its responsibility for oversight of the
integrity of the accounting, auditing and financial reporting practices of each
Fund, the qualifications and independence of each Fund's independent registered
public accounting firm, and each Fund’s compliance with legal and regulatory
requirements. The Audit Committee reviews the scope of each Fund’s
audit, accounting and financial reporting policies and practices and internal
controls. The Audit Committee approves, and recommends to the
Independent Trustees for their ratification, the selection, appointment,
retention or termination of each Fund’s independent registered public accounting
firms. The Audit Committee also approves all audit and permissible
non-audit services provided by each Fund’s independent registered public
accounting firms to its manager or advisor and any affiliated service providers
if the engagement relates directly to each Fund’s operations and financial
reporting of each Fund.
The Board
of Trustees has a standing Governance and Nominating Committee. The
Governance and Nominating Committee is comprised of R. Glenn Hubbard, G.
Nicholas Beckwith, III, Richard E. Cavanagh, Jerrold B. Harris and Kathleen F.
Feldstein, each of whom is an Independent Trustee. The Governance and
Nominating Committee is responsible for, among other things, recommending
candidates to fill vacancies on the Board of Trustees, scheduling and
organization of meetings of the Board of Trustees, evaluating the structure and
composition of the Board of Trustees and determining compensation of the
Acquiring Fund’s Independent Trustees. The Governance and Nominating
Committee may consider nominees recommended by a shareholder. A
shareholder who wishes to recommend a nominee should send recommendations to the
respective Fund’s Secretary and must include:
|
·
|
As
to each person whom the shareholder proposes to nominate for election as a
Trustee: (1) the name, age, business address and residence address of the
person, (2) the principal occupation or employment of the person, (3) the
class or series and number of shares of the respective Fund which are
owned beneficially or of record by the person, if any, and (4) any other
information relating to the person that would be required to be disclosed
in a proxy statement or other filings required to be made in connection
with solicitations of proxies for election of directors pursuant to
Section 14 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"); and
|
|
·
|
As
to the shareholder giving the notice: (1) the name and record address of
the shareholder, (2) the class or series and number of shares of the
respective Fund which are owned beneficially or of record by the
shareholder, (3) a description of all arrangements or understandings
between the shareholder and each proposed nominee and any other person or
persons (including their names) in connection with which the nomination(s)
are made by the shareholder, (4) a representation that the shareholder
intends to appear in person or by proxy at the meeting to nominate the
persons named in its notice and (5) any other information relating to the
shareholder that would be required to be disclosed in a proxy statement or
other filings required to be made in connection with solicitations of
proxies for election of directors pursuant to Section 14 of the Exchange
Act and the rules and regulations promulgated
thereunder.
|
Such
recommendation must be accompanied by a written consent of each proposed
candidate to being named as a nominee and to serve as a Trustee if
elected. The shareholder recommendation and information described
above must be sent to the respective Fund's Secretary, c/o BlackRock, P.O. Box
4546, New York, New York 10163.
The Funds
have a Compliance Committee composed of Kathleen F. Feldstein, G. Nicholas
Beckwith, III, Richard E. Cavanagh, Jerrold B. Harris and R. Glenn Hubbard, each
of whom is an Independent Trustee. The Compliance Committee performs
those functions enumerated in the Compliance Committee charter, including, but
not limited to, supporting the Trustees in acting independently of the
Investment Adviser in pursuing the best interests of each Fund and its
shareholders, receiving information on and, where appropriate, recommending
policies concerning each Fund’s compliance with applicable law, and receiving
reports from and making certain recommendations in respect of each Fund’s Chief
Compliance Officer.
The Funds
have a Performance Oversight Committee composed of all of the Independent
Trustees. The Performance Oversight Committee acts in accordance with
the Performance Oversight Committee charter. The Performance
Oversight Committee performs those functions enumerated in the Performance
Oversight Committee charter, including, but not limited to, supporting the
Independent Trustees in acting independently of the respective Fund's Investment
Adviser in pursuing the best interests of each Fund and its shareholders,
developing an understanding of and reviewing the investment objectives, policies
and practices of each Fund, and reviewing with respect to each Fund: (a) whether
each Fund has complied with its investment policies and restrictions as
reflected in the prospectus, (b) appropriate benchmarks and competitive
universes, (c) investment performance, (d) unusual or exceptional investment
matters, and (e) other matters bearing on each Fund's investment
results.
The Funds
have an Executive Committee composed of Messrs. Cavanagh and Davis, which acts
on behalf of the full Board of Trustees on certain matters in the intervals
between meetings of the Board of Trustees.
During
the Funds’ last fiscal year and with respect to each Fund, the Executive
Committee held one meeting, the Audit Committee held five meetings, the
Governance and Nominating Committee held four meetings, the Compliance Committee
held five
meetings
and the Performance Oversight Committee held four meetings.
Biographical
Information
Certain
biographical and other information relating to the Trustees and officers of the
Funds is set forth below, including their year of birth, their principal
occupation for at least the last five years, the length of time served, the
total number of investment companies overseen in the complex of funds advised by
the Investment Adviser or its affiliates (the "Fund Complex") and any public
trusteeships. Trustees serve until their resignation, removal or
death, or until December 31 of the year in which they turn 72.
Name,
Year of Birth
and Position(s) Held
with the
Funds
|
|
Term
of
Office and
Length of
Time Served
with
the
Funds
|
|
Principal
Occupation During
the Past Five Years
|
|
Number
of Registered Investment Companies
in Fund
Complex
Overseen*
|
|
|
|
INDEPENDENT
TRUSTEES:
|
|
|
|
|
|
|
|
|
|
G.
Nicholas Beckwith III
(1945)
|
|
Indefinite(2)
|
|
Chairman
and Chief Executive Officer, Arch Street Management, LLC (Beckwith Family
Foundation) and various Beckwith property companies since 2005; Chairman
of the Board of Directors, University of Pittsburgh Medical Center since
2002; Board of Directors, Shady Side Hospital Foundation since 1977; Board
of Directors, Beckwith Institute for Innovation In Patient Care since
1991; Member, Advisory Council on Biology and Medicine, Brown University
since 2002; Trustee, Claude Worthington Benedum
Foundation (charitable foundation) since 1989; Board of
Trustees, Chatham University since 1981; Board of Trustees, University of
Pittsburgh since 2002; Emeritus Trustee, Shady Side Academy since 1977;
Formerly Chairman and Manager, Penn West Industrial Trucks LLC (sales,
rental and servicing of material handling equipment) from 2005 to 2007;
Formerly Chairman, President and Chief Executive Officer, Beckwith
Machinery Company (sales, rental and servicing of construction and
equipment) from 1985 to 2005; Formerly member of the Board of Directors,
National Retail Properties (REIT) from 2006 to 2007.
|
|
105
registered investment companies consisting of 102
portfolios
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
Richard
E. Cavanagh
(1946)
|
|
Indefinite(1)
|
|
Trustee,
Aircraft Finance Trust since 1999; Director, The Guardian Life Insurance
Company of America since 1998; Trustee, Educational Testing Service since
1997; Senior Advisor since 2008 and Director since 1996 of The
|
|
105
registered investment companies consisting of 102
portfolios
|
|
Arch
Chemical, Inc.
(chemical
and allied
products)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fremont
Group; Adjunct Lecturer, Harvard University since 2007; Formerly President
and Chief Executive Officer of The Conference Board, Inc. (global business
research organization) from 1995 to 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kent
Dixon
(1937)
|
|
Indefinite(1)
|
|
Consultant/Investor
since 1988.
|
|
105
registered investment companies consisting of 102
portfolios
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
Frank
J. Fabozzi
(1948)
|
|
Indefinite(1)
|
|
Consultant/Editor
of The Journal of Portfolio Management since 2006; Professor in the
Practice of Finance and Becton Fellow, Yale University, School of
Management, since 2006; Formerly Adjunct Professor of Finance and Becton
Fellow, Yale University from 1994 to 2006.
|
|
105
registered investment companies consisting of 102
portfolios
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
Kathleen
F. Feldstein
(1941)
|
|
Indefinite(1)
|
|
President
of Economics Studies, Inc. (private economic consulting firm) since 1987;
Chair, Board of Trustees, McLean Hospital from 2000 to 2008 and Trustee
Emeritus thereof since 2008; Member of the Board of Partners Community
Healthcare, Inc. since 2005; Member of the Corporation of Partners
HealthCare since 1995; Member of the Corporation of Sherrill House (health
care) since 1990; Trustee, Museum of Fine Arts, Boston since 1992; Member
of the Visiting Committee to the Harvard University Art Museum since 2003;
Trustee, The Committee for Economic Development (research organization)
since 1990; Member of the Advisory Board to the International School of
Business, Brandeis University since 2002.
|
|
105
registered investment companies consisting of 102
portfolios
|
|
The
McClatchy Company (publishing)
|
|
|
|
|
|
|
|
|
|
|
|
James
T. Flynn
(1939)
|
|
Indefinite(2)
|
|
Formerly
Chief Financial Officer of JP Morgan & Co., Inc. from 1990 to
1995.
|
|
105
registered investment companies consisting of 102
portfolios
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
Jerrold
B. Harris
(1942)
|
|
Indefinite(2)
|
|
Trustee,
Ursinus College since 2000; Director, Troemner LLC (scientific equipment)
since 2000.
|
|
105
registered investment companies consisting of 102 portfolios
|
|
BlackRock
Kelso Capital Corporation
|
|
|
|
|
|
|
|
|
|
|
|
R.
Glenn Hubbard
(1958)
|
|
Indefinite(1)
|
|
Dean
of Columbia Business School since 2004; Columbia faculty member since
1988; Formerly Co-Director of Columbia Business School's Entrepreneurship
Program from 1997 to 2004; Visiting Professor at the John F. Kennedy
School of Government at Harvard University and the Harvard Business School
since 1985 and at the University of Chicago since 1994; Formerly Chairman
of the U.S. Council of Economic Advisers under the President of the United
States from 2001 to 2003.
|
|
105
registered investment companies consisting of 102
portfolios
|
|
ADP
(data and information services); KKR Financial Corporation (finance); Duke
Realty (real estate); Information Services Group (media/technology);
Metropolitan Life Insurance Company (insurance)
|
|
W.
Carl Kester
(1951)
|
|
Indefinite(2)
|
|
Professor
of Business Administration and Deputy Dean for Academic Affairs, George
Fisher Baker Jr., Harvard Business School since 2008; Mizuho Financial
Group Professor of Finance, Harvard Business School and Deputy Dean for
Academic Affairs from 2006 to 2008; Unit Head, Finance, Harvard Business
School, from 2005 to 2006; Senior Associate Dean and Chairman of the MBA
Program of Harvard Business School, from 1999 to 2005; Member of the
faculty of Harvard Business School since 1981; Independent Consultant
since 1978.
|
|
105
registered investment companies consisting of 102
portfolios
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
Karen
P. Robards
(1950)
|
|
Indefinite(2)
|
|
Partner
of Robards & Company, LLC (financial advisory firm) since 1987;
Co-founder and Director of the Cooke Center for Learning and Development
(a not-for-profit organization) since 1987; Formerly Director of Enable
Medical Corp. from 1996 to 2005; Formerly an investment banker at Morgan
Stanley from
|
|
105
registered investment companies consisting of 102
portfolios
|
|
AtriCure,
Inc. (medical devices); Care Investment Trust, Inc.
(healthcare
real estate investment trust)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1976
to 1987.
|
|
|
|
|
|
INTERESTED
TRUSTEES:
|
|
|
|
|
|
|
|
|
|
Richard
S. Davis**
(1945)
|
|
Indefinite(2)
|
|
Managing
Director, BlackRock, Inc. since 2005; Formerly Chief Executive Officer,
State Street Research & Management Company from 2000 to 2005; Formerly
Chairman of the Board of Trustees, State Street Research Mutual Funds from
2000 to 2005; Formerly Chairman, SSR Realty from 2000 to
2004.
|
|
174
registered investment companies consisting of 286
portfolios
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
Henry
Gabbay**
(1947)
|
|
Indefinite(2)
|
|
Consultant,
BlackRock, Inc. since 2007; Formerly Managing Director, BlackRock, Inc.
from 1989 to June 2007; Formerly Chief Administrative Officer, BlackRock
Advisors, LLC from 1998 to 2007; Formerly President of BlackRock funds and
BlackRock Bond Allocation Target Shares from 2005 to 2007; Formerly
Treasurer of certain closed-end funds in the BlackRock fund complex from
1989 to 2006.
|
|
174
registered investment companies consisting of 286
portfolios
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
*
|
The
term "Fund Complex" refers to the registered investment companies advised
by the Investment Adviser, including the
Trust.
|
|
**
|
"Interested
person" of the Funds as defined in the 1940 Act. Messrs. Davis
and Gabbay are interested persons due to their employment with the
Advisors or their affiliates.
|
|
(1)
|
Has
served as Trustee in such capacity since the Fund’s
inception.
|
|
(2)
|
Has
served as Trustee in such capacity since November 1,
2007.
|
OFFICERS
|
|
|
Position(s)
Held
with
the Funds
|
|
Principal
Occupation During the
Past
Five Years
|
|
Number
of Registered
Investment
Companies in
Fund
Complex Overseen*
|
|
Donald
C. Burke
(1960)
|
|
President
and Chief Executive Officer
|
|
Managing
Director of BlackRock, Inc. since 2006; Formerly Managing Director of
Merrill Lynch Investment Managers, L.P. ("MLIM") and Fund Asset
Management, L.P. ("FAM") in 2006; First Vice President thereof from 1997
to 2005; Treasurer thereof from 1999 to 2006 and Vice President thereof
from 1990 to 1997.
|
|
184
registered investment companies consisting of 296
portfolios.
|
|
|
|
|
|
|
|
|
|
Neal
J. Andrews
(1966)
|
|
Chief
Financial Officer
|
|
Managing
Director of BlackRock, Inc. since 2006; Formerly Senior Vice President and
Line of Business Head of Fund Accounting and Administration at PNC Global
Investment Servicing (U.S.) Inc. (formerly PFPC Inc.) from 1992 to
2006.
|
|
174
registered investment companies consisting of 286
portfolios.
|
|
|
|
|
|
(formerly
PFPC Inc.) from 1992 to 2006.
|
|
|
|
|
|
|
|
|
|
|
|
Jay
M. Fife
(1970)
|
|
Treasurer
|
|
Managing
Director of BlackRock, Inc. since 2007 and Director of BlackRock, Inc.
since in 2006; Formerly Assistant Treasurer of the MLIM/FAM-advised funds
from 2005 to 2006; Director of MLIM Fund Services Group from 2001 to
2006.
|
|
174
registered investment companies consisting of 286
portfolios.
|
|
|
|
|
|
|
|
|
|
Anne
F. Ackerley
(1962)
|
|
Vice
President
|
|
Managing
Director of BlackRock, Inc. since 2000; Chief Operating Officer of
BlackRock’s U.S. Retail Group since 2006; Head of BlackRock’s Mutual Fund
Group from 2000 to 2006; Merrill Lynch & Co., Inc.
from 1984 to 1986 and from 1988 to 2000, most recently as First Vice
President and Operating Officer of the Mergers and Acquisitions
Group.
|
|
174
registered investment companies consisting of 286
portfolios.
|
|
|
|
|
|
|
|
|
|
Howard
B. Surloff
(1965)
|
|
Secretary
|
|
Managing
Director of BlackRock, Inc. and General Counsel of U.S. Funds at
BlackRock, Inc. since 2006; Formerly General Counsel (U.S.) of Goldman
Sachs Asset Management, L.P. from 1993 to 2006.
|
|
174
registered investment companies consisting of 286
portfolios.
|
|
|
|
|
|
|
|
|
|
Brian
P. Kindelan
(1959)
|
|
Chief
Compliance Officer and Anti-Money Laundering Officer
|
|
Chief
Compliance Officer of the BlackRock-advised funds since 2007; Managing
Director and Senior Counsel of BlackRock, Inc. since 2005; Director and
Senior Counsel of BlackRock Advisors, Inc. from 2001 to 2004 and Vice
President and Senior Counsel thereof from 1998 to 2000.
|
|
174
registered investment companies consisting of 286
portfolios.
|
___________________
Share
Ownership
Information
relating to each Trustee's share ownership in each Fund and in the
BlackRock-Advised Funds that are overseen by the respective Trustee ("Supervised
Funds") as of December 31, 2008 is set forth in the chart below:
|
|
|
Aggregate
Dollar
Range
of Equity
Securities
in BFD
|
|
Aggregate
Dollar
Range
of Equity
Securities
in BWC
|
|
Aggregate
Dollar
Range
of Equity
Securities
in BOE
|
|
Aggregate
Dollar
Range
of Equity
Securities
in
Supervised
Funds
|
|
|
|
|
|
|
|
|
|
|
|
G.
Nicholas Beckwith, III
|
|
$1-$10,000
|
|
$1-$10,000
|
|
$1-$10,000
|
|
Over
$100,000
|
|
Richard
E. Cavanagh
|
|
$1-$10,000
|
|
$1-$10,000
|
|
$1-$10,000
|
|
Over
$100,000
|
|
Richard
S.
Davis
|
|
None
|
|
$1-$10,000
|
|
None
|
|
Over
$100,000
|
|
Kent
Dixon
|
|
$1-$10,000
|
|
$1-$10,000
|
|
$10,001-$50,000
|
|
Over
$100,000
|
|
Frank
J.
Fabozzi
|
|
$1-$10,000
|
|
$1-$10,000
|
|
$1-$10,000
|
|
$10,001-$50,000
|
|
Kathleen
F. Feldstein
|
|
$1-$10,000
|
|
$1-$10,000
|
|
$1-$10,000
|
|
$10,001-$50,000
|
|
James
T.
Flynn
|
|
None
|
|
None
|
|
None
|
|
$10,001-$50,000
|
|
Jerrold
B.
Harris
|
|
$1-$10,000
|
|
$1-$10,000
|
|
$1-$10,000
|
|
$50,001-$100,000
|
|
Henry
Gabbay
|
|
None
|
|
None
|
|
None
|
|
Over
$100,000
|
|
R.
Glenn Hubbard
|
|
$1-$10,000
|
|
$1-$10,000
|
|
$1-$10,000
|
|
$10,001-$50,000
|
|
W.
Carl
Kester
|
|
$1-$10,000
|
|
$10,001-$50,000
|
|
$1-$10,000
|
|
Over
$100,000
|
|
Karen
P. Robards
|
|
None
|
|
None
|
|
None
|
|
$50,001-$100,000
|
|
Robert
S. Salomon, Jr
*
|
|
None
|
|
None
|
|
None
|
|
None
|
_________
* Mr. Salomon retired effective January 1,
2009.
As of
December 31, 2008, the officers and Trustees as a group owned an aggregate of
less than 1% of the outstanding shares of any Supervised Fund. As of
December 31, 2008, none of the Independent Trustees of the Funds or their
immediate family members owned beneficially or of record any securities of
affiliates of the Investment Adviser.
Compensation
of Trustees
The
Supervised Funds, including each Fund, shall pay each Trustee who is an
Independent Trustee, a pro rata portion (based on relative net assets), an
annual retainer of $250,000 per annum for his or her services as Trustee of the
Supervised Funds, including each Fund, and the Supervised Funds shall pay (on a
pro rata basis) each Independent Trustee a $10,000 per day board meeting fee for
attending special unscheduled meetings or meetings in excess of six Board
meetings (whether telephonic or in person) held in a calendar year, together
with out-of-pocket expenses in accordance with a Board policy on travel and
other business expenses relating to attendance at meetings. The Supervised Funds
shall pay (on a pro rata basis) each Audit Committee Member, as compensation, an
additional annual retainer of $25,000. In addition, the Supervised Funds shall
pay (on a pro rata basis) the Chairman and Vice-Chairperson of the Board of
Trustees, as compensation, an additional annual retainer of $120,000 and
$40,000, respectively. The Supervised Funds shall pay (on a pro rata basis) the
Chairperson of the Audit Committee, Compliance Committee, Governance Committee
and Performance Committee, as compensation, an additional annual retainer of
$35,000, $20,000, $10,000, and $20,000, respectively. The following table sets
forth the compensation earned by the Independent Trustees for the fiscal year
ended October 31, 2008, and the aggregate compensation paid to them by all
BlackRock-Advised Funds for the calendar year ended December 31,
2008.
|
Name
of Board Member
|
|
Aggregate
Compensation
From
BFD(1)(2)
|
|
Aggregate
Compensation
From
BWC(1)(3)
|
|
Aggregate
Compensation
From
BOE(1)
|
|
Total
Compensation
from
the Funds and
Fund
Complex Paid to
Board
Members
(4)
|
|
G.
Nicholas Beckwith III
|
|
$6,429
|
|
$7,280
|
|
$2,949
|
|
$250,000
|
|
Richard
E. Cavanagh
|
|
$9,515
|
|
$10,774
|
|
$4,364
|
|
$386,803
|
|
Kent
Dixon
|
|
$7,072
|
|
$8,008
|
|
$3,243
|
|
$287,730
|
|
Frank
J.
Fabozzi
|
|
$7,586
|
|
$8,590
|
|
$3,479
|
|
$304,055
|
|
Kathleen
F. Feldstein
|
|
$6,944
|
|
$7,862
|
|
$3,184
|
|
$273,299
|
|
James
T.
Flynn
|
|
$7,072
|
|
$8,008
|
|
$3,243
|
|
$275,000
|
|
Jerrold
B.
Harris
|
|
$6,429
|
|
$7,280
|
|
$2,949
|
|
$250,000
|
|
R.
Glenn Hubbard
|
|
$6,686
|
|
$7,571
|
|
$3,066
|
|
$280,349
|
|
W.
Carl
Kester
|
|
$7,072
|
|
$8,008
|
|
$3,243
|
|
$275,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
of Board Member
|
|
Aggregate
Compensation
From
BFD(1)(2)
|
|
Aggregate
Compensation
From
BWC(1)(3)
|
|
Aggregate
Compensation
From
BOE(1)
|
|
Total
Compensation
from
the Funds and
Fund
Complex Paid to
Board
Members
(4)
|
|
Karen
P. Robards
|
|
$9,001
|
|
$10,192
|
|
$4,128
|
|
$350,000
|
|
Robert
S. Salomon, Jr.(5)
|
|
$7,072
|
|
$8,008
|
|
$3,243
|
|
$275,000
|
__________________
|
(1)
|
For
the number of BlackRock-Advised Funds for which each Trustee received
compensation, see “Trustees and Officer – Biographical
Information.”
|
|
(2)
|
Includes
deferred compensation from the Fund. For the fiscal year ended
October 31, 2008, Mr. Beckwith deferred $5,286, Mr. Cavanagh deferred
$2,191, Mr. Fabozzi deferred, $3,743, Ms. Feldstein deferred $3,425, Mr.
Flynn deferred $5,815, Mr. Harris deferred $5,286, Mr. Hubbard deferred
$5,498, Mr. Kester deferred $3,172 and Ms. Robards deferred
$4,884.
|
|
(3)
|
Includes
deferred compensation from the Fund. For the fiscal year ended
October 31, 2008, Mr. Beckwith deferred $6,014, Mr. Cavanagh deferred
$2,492, Mr. Fabozzi deferred, $4,258, Ms. Feldstein deferred $3,897, Mr.
Flynn deferred $6,615, Mr. Harris deferred $6,014, Mr. Hubbard deferred
$6,254, Mr. Kester deferred $3,608 and Ms. Robards deferred
$5,557.
|
|
(4)
|
Represents
the aggregate compensation earned by such persons during the calendar year
ended December 31, 2008. Of this amount, Mr. Cavanagh deferred
$51,800, Mr. Beckwith deferred $125,000, Mr. Fabozzi deferred $88,500, Ms.
Feldstein deferred $81,000, Mr. Flynn deferred $137,500, Mr. Harris
deferred $125,000, Mr. Hubbard deferred $130,000, Ms. Robards deferred
$115,500 and Mr. Kester deferred $75,000 pursuant to the BlackRock-Advised
Funds’ deferred compensation plan.
|
|
(5)
|
Mr.
Salomon retired effective January 1,
2009.
|
The
Independent Trustees have agreed that a maximum of 50% of each Independent
Trustee’s total compensation paid by the Supervised Funds may be deferred
pursuant to the Supervised Funds' deferred compensation plan. Under the deferred
compensation plan, deferred amounts earn a return for the Independent Trustees
as though equivalent dollar amounts had been invested in common shares of
certain funds in the Supervised Funds selected by the Independent Trustees. This
has approximately the same economic effect for the Independent Trustees as if
they had invested the deferred amounts in other funds in the Supervised Funds
than that for which they serve. The deferred compensation plan is not funded and
obligations thereunder represent general unsecured claims against the general
assets of a fund. A fund may, however, elect to invest in common shares of those
funds in the Supervised Funds selected by the Independent Trustees in order to
match its deferred compensation obligation.
Brian
Kindelan serves as Chief Compliance Officer and Anti-Money Laundering Compliance
Officer of the Funds. For the fiscal year ending October 31, 2008,
Mr. Kindelan received $1,975, $2,281 and $924 from BFD, BWC and BOE,
respectively.
INVESTMENT
MANAGEMENT AGREEMENTS
Investment
Management Agreement
The
investment management agreement between each Fund and the Investment Adviser was
approved by the Funds' Boards of Trustees, including a majority of the
Independent Trustees. Certain administrative services are also
provided to the Funds by the Investment Adviser pursuant to the investment
management agreement between each Fund and the Investment
Adviser. The agreements provide for the Acquiring Fund and BWC to pay
a management fee of 1.00% of the average weekly value of each respective Fund's
net assets. The agreement between BFD and the Investment Adviser
provides for BFD to pay a management fee of 1.00% of the average daily value of
BFD's net assets.
The
investment management agreements continue in effect for a period of two years
from their effective date, and if not sooner terminated, continue in effect for
successive periods of 12 months thereafter, provided that each continuance is
specifically approved at least annually by both (1) the vote of a majority of
each Fund's Board of Trustees or the vote of a majority of the securities of
each Fund at the time outstanding and entitled to vote (as such term is defined
in the 1940 Act) and (2) by the vote of a majority of the Independent Trustees,
cast in person at a meeting called for the purpose of voting on such approval.
The agreements may be terminated at any time, without the payment of any
penalty, by each Fund (upon the vote of a majority of each Fund's Board of
Trustees or a majority of the outstanding voting securities of each Fund) or by
the Investment Adviser, upon 60 days' written notice by either party to
the
other
which can be waived by the non-terminating party. The agreements will
terminate automatically in the event of their assignment (as such term is
defined in the 1940 Act and the rules thereunder).
The
investment management agreements provide that the Investment Adviser will not be
liable for any error of judgment or mistake of law or for any loss suffered by a
Fund in connection with the performance of the investment management agreements,
except a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on the Investment Adviser's part in
the performance of its duties or from reckless disregard by the Investment
Adviser of its duties under the investment management agreement. The
investment management agreements also provide for indemnification by each Fund
of the Investment Adviser, its directors, officers, employees, agents and
control persons for liabilities incurred by them in connection with their
services to each Fund, subject to certain limitations and
conditions.
The
Investment Adviser will devote such time and effort to the business of each Fund
as is reasonably necessary to perform its duties to each
Fund. However, the services of the Investment Adviser are not
exclusive, and the Investment Adviser provides similar services to other
investment companies and other clients and may engage in other
activities.
Sub-Investment
Advisory Agreements
The
Acquiring Fund does not have a sub-investment advisory agreement.
Pursuant
to the sub-investment advisory agreement between the Investment Adviser and BIM,
the Investment Adviser, on behalf of BFD, pays BIM a sub-advisory fee equal to
74% of the management fee received by the Investment Adviser. BIM is
located at 800 Scudders Mill Road, Plainsboro, New Jersey 08536 and is a wholly
owned subsidiary of BlackRock, Inc.
Pursuant
to the sub-investment advisory agreement between the Investment Adviser and BFM,
the Investment Adviser, on behalf of BWC, pays BFM a sub-advisory fee equal to
50% of the management fee received by the Investment Adviser. BFM is
located at 40 East 52nd Street, New York, New York 10022 and is a wholly owned
subsidiary of BlackRock, Inc.
The
sub-investment advisory agreements continue in effect for a period of two years
from their effective dates, and if not sooner terminated, will continue in
effect for successive periods of 12 months thereafter, provided that each
continuance is specifically approved at least annually by both (1) the vote of a
majority of each Target Fund's Board of Trustees or the vote of a majority of
the outstanding voting securities of each Target Fund at the time outstanding
and entitled to vote (as defined in the 1940 Act) and (2) by the vote of a
majority of the Independent Trustees, cast in person at a meeting called for the
purpose of voting on such approval. The agreements may be terminated at any
time, without the payment of any penalty, by each Target Fund or the Investment
Adviser (upon the vote of a majority of each Target Fund's Board of Trustees or
a majority of the outstanding voting securities of each Target Fund) or by a
sub-adviser, upon 60 days' written notice by either party to the other, which
notice can be waived by the non-terminating party. The agreements
will terminate automatically in the event of their assignment (as such term is
defined in the 1940 Act and the rules thereunder).
The
sub-investment advisory agreements provides that the sub-advisor will not be
liable for any error of judgment or mistake of law or for any loss suffered by a
Target Fund in connection with the performance of the investment management
agreements, except a loss resulting from a breach of fiduciary duty with respect
to the receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on the sub-advisor's part in the
performance of its duties or from reckless disregard by the sub-advisor of its
duties under the sub-investment advisory agreement. The
sub-investment advisory agreements also provide for indemnification by each
Target Fund of the sub-investment advisor, its directors, officers, employees,
agents and control persons for liabilities incurred by them in connection with
their services to each Target Fund, subject to certain limitations and
conditions.
The
sub-advisers will devote such time and effort to the business of each Target
Fund as is reasonably necessary to perform their duties to each Target
Fund. However, the services of the sub-advisors are not exclusive,
and the sub-advisors provide similar services to other investment companies and
other clients and may engage in other activities.
The
tables below set forth information about the total advisory fees paid by the
Target Funds to the Investment Adviser and paid by the Investment Adviser to the
sub-advisers for the periods indicated:
Advisory
Fees
Fiscal Year Ended
October
31
,
|
|
|
|
|
200
8
Paid to the Investment
Adviser
|
$
3,304,775
|
|
|
|
$
7,151,577
|
$
8,194,636
|
|
2007
Pa
id to the Investment
Adviser
|
$
3,523,859
|
$
5,017,131(a)
|
$
8,890,197
|
|
2006
Paid to
the Investment Advise
r
|
$
3,148,839
|
N/A
|
$
8,086,269
|
______________
|
(a)
|
For
the period March 30, 2007 to October 31,
2007.
|
Sub-Advisory
Fees
Fiscal Year Ended
October
31,
|
|
|
|
200
8
Paid
by the
Investment Adviser
to the
respective
sub-adviser
|
|
|
|
$
5,301,053
|
$
4,160,275
|
|
2007
Paid
by the
Investment Adviser
t
o the
respective
sub-adviser
|
$
3,675,312
(a)
|
$
4,446,040
|
|
2006
Paid
by the
Investment Adviser
to the
respective
sub-adviser
|
N/A
|
$
4,079,916
|
______________
|
(a)
|
For
the period March 30, 2007 to October 31,
2007.
|
OTHER
AGREEMENTS
Fund
Accounting Agreement
The fund
accounting services are provided to the Funds by The Bank of New York Mellon
pursuant to the fund accounting agreement. The table below shows the
amounts paid by the Funds to the Accounting Services Provider for such services
for the periods indicated:
Fiscal Year Ended
October
31,
|
|
|
|
|
2008
|
|
|
|
|
Paid to
the Accounting Services
Provider
|
$
27,344
|
$
39,006
|
$
44,011
|
|
2007
|
|
|
|
|
Paid to
the Accounting Services
Provider
|
$
28,163
|
$
26,385
(a)
|
$
47,294
|
|
2006
|
|
|
|
|
Paid to
the Accounting
Services
Provider
|
$
27,039
|
N/A
|
$
43,537
|
|
(a)
|
For
the period April 30, 2007 to October 31,
2007.
|
Other
Accounts Managed by the Portfolio Managers
For BOE,
as of October 31, 2008:
|
|
|
Number of Other Accounts Managed
and Assets by
Account
Type
|
|
|
Number of Other Accounts and
Assets for
Which Advisory Fee is
Performance-
Based
|
|
Name of Portfolio
Manager
|
|
Other
Registered Investment
Companies
|
|
|
Other Pooled
Investment
Vehicles
|
|
|
|
|
|
Other Registered Investment
Companies
|
|
|
Other Pooled Investm
ent
Vehicles
|
|
|
|
|
|
Thomas
P. Callan*
|
|
|
12
|
|
|
|
14
|
|
|
|
4
|
|
|
|
0
|
|
|
|
1
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$5.51
Billion
|
|
|
$951.3
Million
|
|
|
$211.9
Million
|
|
|
$
|
0
|
|
|
$267.2
Million
|
|
|
$86.2
Million
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jean
M. Rosenbaum*
|
|
|
6
|
|
|
|
4
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$2.9
Billion
|
|
|
$133.3
Million
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael
D. Carey*
|
|
|
6
|
|
|
|
1
|
|
|
|
1
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$3.14
Billion
|
|
|
$42.5
Million
|
|
|
$41.5
Million
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kyle
G. McClements*
|
|
|
6
|
|
|
|
4
|
|
|
|
9
|
|
|
|
0
|
|
|
|
0
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$3.17
Billion
|
|
|
$196.6
Million
|
|
|
$3.29
Billion
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$3.29
Billion
|
|
___________________
|
*
|
As
of April , 2009, BFD will have the same
portfolio managers as BOE.
|
For BFD,
as of October 31, 2008:
|
|
|
Numb
er of Other Accounts Managed and
Assets by Account Type
|
|
|
Number of Other Accounts and
Assets for
Which Advisory Fee is
Performance-
Based
|
|
Name of Portfolio
Manager
|
|
Other Registered Investment
Companies
|
|
|
Other Pooled Investment
Vehicles
|
|
|
|
|
|
Other R
egistered Investment
Companies
|
|
|
Other Pooled Investment
Vehicles
|
|
|
|
|
|
Jonathan
Clark
|
|
|
9
|
|
|
|
5
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$1.54
Billion
|
|
|
$516.5
Million
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
____________________
|
*
|
As
of February 2, 2009, Jonathan Clark will no longer be portfolio manager
for BFD.
|
For BWC,
as of October 31, 2008:
|
|
|
Number of Other Accounts Managed
and Assets by Account Type
|
|
|
Number of Other Accounts and
Assets for
Which Advisory Fee is
Performance-Based
|
|
Name of
Portfolio
Manager
|
|
Other Registered Investment
Companies
|
|
|
Other Pooled Investment
Vehicles
|
|
|
|
|
|
Other Registered Investment
Companies
|
|
|
Other Pooled Investment
Vehicles
|
|
|
|
|
|
Thomas
P. Callan
|
|
|
12
|
|
|
|
14
|
|
|
|
4
|
|
|
|
0
|
|
|
|
1
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$5.18
Billion
|
|
|
$951.3
Million
|
|
|
$211.9
Million
|
|
|
$
|
0
|
|
|
$267.2
Million
|
|
|
$86.2
Million
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jean
M. Rosenbaum
|
|
|
6
|
|
|
|
4
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$2.57
Billion
|
|
|
$133.3
Million
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael
D. Carey
|
|
|
6
|
|
|
|
1
|
|
|
|
1
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$2.81
Billion
|
|
|
$42.5
Million
|
|
|
$41.5
Million
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kyle
G. McClements
|
|
|
6
|
|
|
|
4
|
|
|
|
9
|
|
|
|
0
|
|
|
|
0
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$2.84
Billion
|
|
|
$196.6
Million
|
|
|
$3.29
Billion
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$3.29
Billion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew
Gordon
|
|
|
6
|
|
|
|
43
|
|
|
|
108
|
|
|
|
0
|
|
|
|
4
|
|
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$963.7
Million
|
|
|
$7.19
Billion
|
|
|
$36.6
Billion
|
|
|
$
|
0
|
|
|
$1.54
Billion
|
|
|
$4.58
Billion
|
|
Portfolio
Manager Potential Conflicts of Interest
BlackRock
has built a professional working environment, firm-wide compliance culture and
compliance procedures and systems designed to protect against potential
incentives that may favor one account over another. BlackRock has adopted
policies and procedures that address the allocation of investment opportunities,
execution of portfolio transactions, personal trading by employees and other
potential conflicts of interest. Such policies and procedures are
designed to ensure that all client accounts are treated equitably over time.
Nevertheless, BlackRock furnishes investment management and advisory services to
numerous clients in addition to the Funds, and BlackRock may, consistent with
applicable law, make investment recommendations to other clients or accounts
(including accounts which are hedge funds or have performance or higher fees
paid to BlackRock, or in which portfolio managers have a personal interest in
the receipt of such fees), which may be the same as or different from those made
to the Funds. In addition, BlackRock, its affiliates and significant
shareholders and any officer, director, stockholder or employee may or may not
have an interest in the securities whose purchase and sale BlackRock recommends
to the Funds. BlackRock, or any of its affiliates or significant
shareholders, or any officer, director, stockholder, employee or any member of
their families may take different actions than those recommended to the Funds by
BlackRock with respect to the same securities. Moreover, BlackRock
may refrain from rendering any advice or services concerning securities of
companies of which any of BlackRock’s (or its affiliates’ or significant
shareholders') officers, directors or employees are directors or officers, or
companies in which BlackRock or any of its affiliates or significant
shareholders or the officers, directors and employees of any of them has any
substantial economic interest or possesses material non-public
information. Each portfolio manager also may manage accounts whose
investment strategies may at times be opposed to the strategy utilized for a
Fund. In this connection, it should be noted that Messrs. Callan and
Gordon currently manage certain accounts that are subject to performance fees,
Mr. McClements assists in the management of a hedge fund, and each portfolio
manager may in the future manage other such accounts. In addition,
certain portfolio managers may assist in managing certain hedge funds and may be
entitled to receive a portion of any incentive fees earned on such funds and a
portion of such incentive fees may be voluntarily or involuntarily
deferred. Additional portfolio managers may in the future manage
other such accounts or funds and may be entitled to receive incentive
fees.
As
a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each
client fairly. When BlackRock purchases or sells securities for more
than one account, the trades must be allocated in a manner consistent with its
fiduciary duties. BlackRock attempts to allocate investments in a
fair and equitable manner among client accounts, with no account receiving
preferential treatment. To this end, BlackRock has adopted a policy
that is intended to ensure that investment opportunities are allocated fairly
and equitably among client accounts over time. This policy also seeks
to achieve reasonable efficiency in client transactions and provide BlackRock
with sufficient flexibility to allocate investments in a manner that is
consistent with the particular investment discipline and client
base.
Portfolio
Manager Compensation Overview
As of the
date of the Special Meeting, BlackRock's financial arrangements with its
portfolio managers, its competitive compensation and its career path emphasis at
all levels reflect the value senior management places on key resources.
Compensation may include a variety of components and may vary from year to year
based on a number of factors. The principal components of compensation include a
base salary, a discretionary bonus, various retirement benefits and one or more
of the incentive compensation programs established by BlackRock such as its
Long-Term Retention and Incentive Plan and Restricted Stock
Program. The combined fund will maintain the portfolio manager
compensation of the Acquiring Fund.
Acquiring
Fund and BWC Portfolio Manager Compensation
Base compensation.
Generally, portfolio managers receive base compensation based on their
seniority and/or their position with the firm. Senior portfolio managers who
perform additional management functions within the portfolio management group or
within BlackRock may receive additional compensation for serving in these other
capacities.
Discretionary Incentive Compensation
for Messrs. Callan and Carey and Ms. Rosenbaum
Discretionary incentive
compensation is based on a formulaic compensation
program. BlackRock’s formulaic portfolio manager compensation program
includes: pre-tax investment performance relative to appropriate competitors or
benchmarks over 1-, 3- and 5-year performance periods and a team revenue
component. If a portfolio manager’s tenure is less than five years, performance
periods will reflect time in position. In most cases, including for the
portfolio managers of each Fund, these benchmarks are the same as the benchmark
or benchmarks against which the performance of each Fund or other accounts
managed by the portfolio managers are measured. BlackRock’s Chief
Investment Officers determine the benchmarks against which the performance of
funds and other accounts managed by each portfolio manager is compared and the
period of time over which performance is evaluated. With respect to the
portfolio managers, such benchmarks for each Fund include the
following:
|
Portfolio
Manager
|
Benchmarks
Applicable to Each Manager
|
|
Thomas
P. Callan
|
A
combination of market-based indices (e.g., Standard & Poor’s 500
Index, Lipper Health/Biotechnology Funds Index, The Russell 3000
Healthcare Index, The S&P/Citigroup Extended Market Index U.S., The
S&P/Citigroup Global BMI, NYSE Arca Tech 100 Index, S&P Citigroup
Broad Market Index Global Ex-U.S., S&P/Citigroup Extended Market Index
Global Ex-U.S.), certain customized indices and certain fund industry peer
groups.
|
|
Jean
M. Rosenbaum
|
A
combination of market-based indices (e.g., The S&P/Citigroup Extended
Market Index U.S., NYSE Arca Tech 100 Index), certain customized indices
and certain fund industry peer groups.
|
|
Michael
D. Carey
|
A
combination of market-based indices (e.g., The S&P/Citigroup Extended
Market Ex-U.S. Index, The S&P/Citigroup Global BMI, The
S&P/Citigroup
Broad Market Index Global Ex-U.S.), certain customized indices and certain
fund industry peer
groups.
|
Portfolio managers who
meet relative investment performance and financial management objectives during
a specified performance time period are eligible to receive an additional bonus
which may or may not be a large part of their overall compensation. A smaller
element of portfolio manager discretionary compensation may include
consideration of: financial results, expense control, profit margins, strategic
planning and implementation, quality of client service, market share, corporate
reputation, capital allocation, compliance and risk control, leadership,
workforce diversity, supervision, technology and innovation. All factors are
considered collectively by BlackRock management.
Discretionary Incentive Compensation
for Messrs. McClements and Gordon.
Discretionary incentive compensation
is a function of several components: the performance of BlackRock, Inc.,
the performance of the portfolio manager’s group within BlackRock, the
investment performance, including risk-adjusted returns, of the firm’s assets
under management or supervision by that portfolio manager relative to
predetermined benchmarks, and the individual’s seniority, role within the
portfolio management team, teamwork and contribution to the overall performance
of these portfolios and BlackRock. In most cases, including for the
portfolio managers of the Funds, these benchmarks are the same as the benchmark
or benchmarks against which the performance of the Funds or other accounts
managed by the portfolio managers are measured. BlackRock’s Chief
Investment Officers determine the benchmarks against which the performance of
funds and other accounts managed by each portfolio manager is compared and the
period of time over which performance is evaluated. For the Acquiring
Fund, with respect to Mr. McClements, such benchmarks for the Fund’s option
strategy include the Lipper Options Arbitrage/Options Strategies Funds
classification. For BWC, with respect to its portfolio managers, such
benchmarks include the following:
|
Portfolio
Manager
|
Benchmarks
Applicable to Each Manager
|
|
Kyle
G. McClements
|
A
combination of market-based indices, Lipper peer groups and a subset of
other closed-end funds
|
|
Andrew
Gordon
|
A
combination of market-based indices (e.g., Citigroup Non-U.S. World
Government Bond Index, JP Morgan Emerging Markets Bond Index Global
Diversified), certain customized indices and certain fund industry peer
groups.
|
BlackRock’s
Chief Investment Officers make a subjective determination with respect to the
portfolio manager’s compensation based on the performance of the funds and other
accounts managed by each portfolio manager relative to the various benchmarks
noted above. Performance is measured on a pre-tax basis over various time
periods including 1, 3 and 5-year periods, as applicable.
Distribution of Discretionary
Incentive Compensation.
Discretionary incentive compensation
is distributed to portfolio managers in a combination of cash and BlackRock,
Inc. restricted stock units which vest ratably over a number of
years. The BlackRock, Inc. restricted stock units, if properly
vested, will be settled in BlackRock, Inc. common stock. Typically,
the cash bonus, when combined with base salary, represents more than 60% of
total compensation for the portfolio managers. Paying a portion of
annual bonuses in stock puts compensation earned by a portfolio manager for a
given year “at risk” based on BlackRock’s ability to sustain and improve its
performance over future periods.
Long-Term Retention and Incentive
Plan (“LTIP”) —
The LTIP is a long-term incentive plan that seeks to
reward certain key employees. Prior to 2006, the plan provided for the grant of
awards that were expressed as an amount of cash that, if properly vested and
subject to the attainment of certain performance goals, will be settled in cash
and/or in BlackRock, Inc. common stock. Beginning in 2006, awards are
granted under the LTIP in the form of BlackRock, Inc. restricted stock units
that, if properly vested and subject to the attainment of certain performance
goals, will be settled in BlackRock, Inc. common stock. Messrs. Callan, Carey
and McClements and Ms. Rosenbaum, and Mr. Gordon for BWC, have each received
awards under the LTIP.
Deferred Compensation Program —
A portion of the compensation paid to eligible BlackRock employees may be
voluntarily deferred into an account that tracks the performance of certain of
the firm’s investment products. Each participant in the deferred compensation
program is permitted to allocate his deferred amounts among the various
investment options. Messrs. Callan, Carey and McClements and Ms.
Rosenbaum, and Mr. Gordon for BWC, have each participated in the deferred
compensation program.
Options and Restricted Stock Awards
—
A portion of the annual compensation of certain employees is
mandatorily deferred into BlackRock restricted stock units. Prior to the
mandatory deferral into restricted stock units, BlackRock granted stock options
to key employees, including certain portfolio managers who may still hold
unexercised or unvested options. BlackRock, Inc. also granted restricted
stock awards designed to reward certain key employees as an incentive to
contribute to the long-term success of BlackRock. These awards vest over a
period of years. Messrs. Callan and Carey for the Acquiring Fund and Messrs.
Callan, Carey and Gordon and Ms. Rosenbaum for BWC have each been granted stock
options and/or restricted stock in prior years.
Other compensation
benefits.
In addition to base compensation and discretionary
incentive compensation, portfolio managers may be eligible to receive or
participate in one or more of the following:
Incentive Savings Plans —
BlackRock, Inc. has created a variety of incentive savings plans in which
BlackRock employees are eligible to participate, including a 401(k) plan,
the BlackRock Retirement Savings Plan (RSP), and the BlackRock Employee Stock
Purchase Plan (ESPP). The employer contribution components of the RSP include a
company match equal to 50% of the first 6% of eligible pay contributed to the
plan capped at $4,000 per year, and a company retirement contribution equal to
3% of eligible compensation, plus an additional contribution of 2% for any year
in which BlackRock has positive net operating income. The RSP offers a
range of investment options, including registered investment companies managed
by the firm. BlackRock contributions follow the investment direction set by
participants for their own contributions or, absent employee investment
direction, are invested into a balanced portfolio. The ESPP allows for
investment in BlackRock common stock at a 5% discount on the fair market value
of the stock on the purchase date. Annual participation in the ESPP is
limited to the purchase of 1,000 shares or a dollar value of $25,000. Each
portfolio manager is eligible to participate in these plans.
BFD
Portfolio Manager Compensation
*
Base compensation.
Generally, portfolio managers receive base compensation based on their
seniority and/or their position with the firm. Senior portfolio managers who
perform additional management functions within the portfolio management group or
within BlackRock may receive additional compensation for serving in these other
capacities.
Discretionary Incentive
Compensation.
Discretionary incentive compensation is a
function of several components: the performance of BlackRock, Inc., the
performance of the portfolio manager’s group within BlackRock, the investment
performance, including risk-adjusted returns, of the firm’s assets under
management or supervision by that portfolio manager relative to predetermined
benchmarks, and the individual’s seniority, role within the portfolio management
team, teamwork and contribution to the overall performance of these portfolios
and BlackRock. In most cases, including for the portfolio managers of BFD,
these benchmarks are the same as the benchmark or benchmarks against which the
performance of BFD or other accounts managed by the portfolio managers are
measured. BlackRock’s Chief Investment Officers determine the benchmarks
against which the performance of funds and other accounts managed by each
portfolio manager is compared and the period of time over which performance is
evaluated. With respect to the portfolio managers, such benchmarks for the
Fund include a combination of market-based indices (e.g., The S&P 500 Index,
MSCI World Index), certain customized indices and certain fund industry peer
groups.
BlackRock’s Chief
Investment Officers make a subjective determination with respect to the
portfolio manager’s compensation based on the performance of the funds and other
accounts managed by each portfolio manager relative to the various benchmarks
noted above. Performance is measured on a pre-tax basis over various time
periods including 1, 3 and 5-year periods, as applicable.
____________________________________
|
*
|
As
of October 31, 2008.
|
Distribution of Discretionary
Incentive Compensation.
Discretionary incentive compensation
is distributed to portfolio managers in a combination of cash and BlackRock,
Inc. restricted stock units which vest ratably over a number of
years. The BlackRock, Inc. restricted stock units, if properly
vested, will be settled in BlackRock, Inc. common stock. Typically,
the cash bonus, when combined with base salary, represents more than 60% of
total compensation for the portfolio managers. Paying a portion of
annual bonuses in stock puts compensation earned by a portfolio manager for a
given year “at risk” based on BlackRock’s ability to sustain and improve its
performance over future periods.
Long-Term Retention and Incentive
Plan (“LTIP”) —
The LTIP is a long-term incentive plan that seeks to
reward certain key employees. Beginning in 2006, awards are granted under the
LTIP in the form of BlackRock, Inc. restricted stock units that, if properly
vested and subject to the attainment of certain performance goals, will be
settled in BlackRock, Inc. common stock. Mr. Clark has received awards under the
LTIP.
Deferred Compensation Program —
A portion of the compensation paid to eligible BlackRock employees may be
voluntarily deferred into an account that tracks the performance of certain of
the firm’s investment products. Each participant in the deferred compensation
program is permitted to allocate his deferred amounts among the various
investment options. Mr. Clark has participated in the deferred
compensation program.
Other compensation
benefits.
Other compensation benefits are the same as those of
the Acquiring Fund and BWC.
Securities
Ownership of Portfolio Managers
As of
October 31, 2008, the dollar range of securities beneficially owned by each
portfolio manager in the Fund is shown below:
|
Portfolio
Manager
|
Dollar
Range of Equity
Securities
Beneficially
Owned
(BFD)
|
Dollar
Range of Equity
Securities
Beneficially
Owned
(BWC)
|
Dollar
Range of Equity
Securities
Beneficially
Owned
(BOE)
|
|
Thomas
P. Callan
|
N/A
|
None
|
None
|
|
Jean
M. Rosenbaum
|
N/A
|
$1
- $10,000
|
$10,001
- $50,000
|
|
Michael
D. Carey
|
N/A
|
$10,001
- $50,000
|
None
|
|
Kyle
G. McClements
|
N/A
|
$1
- $10,000
|
$1
- $10,000
|
|
Andrew
Gordon
|
N/A
|
None
|
N/A
|
|
Jonathan
Clark
|
None
|
N/A
|
N/A
|
Portfolio
Transactions and Brokerage Allocation
The
Investment Adviser is responsible for decisions to buy and sell securities for
the Funds, the selection of brokers and dealers to effect the transactions and
the negotiation of prices and any brokerage commissions. The Funds
will generally purchase securities on a stock exchange effected through brokers
who charge a commission for their services. The Funds may also invest
in securities that are traded principally in the over-the-counter
market. In the over-the-counter market, securities are generally
traded on a net basis with dealers acting as principal for their own accounts
without a stated commission, although the price of such securities usually
includes a markup to the dealer. Securities purchased in underwritten
offerings generally include in the price a fixed amount of compensation for the
manager(s), underwriter(s) and dealer(s). The Funds may also purchase
certain money market instruments directly from an issuer, in which case no
commissions or discounts are paid.
Payments of commissions to
brokers who are affiliated persons of the Funds (or affiliated persons of such
persons) will be made in accordance with Rule 17e-1 under the 1940
Act. Commissions paid on such transactions would be commensurate with
the rate of commissions paid on similar transactions to brokers that are not so
affiliated.
The
Investment Adviser and sub-advisors may, consistent with the interests of the
Funds, select brokers on the basis of the research, statistical and pricing
services the brokers provide to the Funds and the Investment Adviser's or
sub-advisor's other clients. Such research, statistical and/or
pricing services must provide lawful and appropriate assistance to the
Investment Adviser's or sub-advisors, investment decision-making process in
order for such research, statistical and/or pricing services to be considered by
the Investment Adviser or sub-advisors in selecting a broker. These
research services may include information on securities markets, the economy,
individual companies, pricing information, research products and services and
such other services as may be permitted from time to time by Section 28(e) of
the Securities Exchange Act of 1934. Information and research
received from such brokers will be in addition to, and not in lieu of, the
services required to be performed by the Investment Adviser and sub-advisors
under their respective contracts. A commission paid to such brokers
may be higher than that which another qualified broker would have charged for
effecting the same transaction, provided that the Investment Adviser or
sub-advisors determine in good faith that such commission is reasonable in terms
either of the transaction or the overall responsibility of the Investment
Adviser or sub-advisors and their other clients and that the total commissions
paid by the Funds will be reasonable in relation to the benefits to the Funds
over the long-term. The advisory fees that the Funds pay to the
Investment Adviser will not be reduced as a consequence of the Investment
Adviser's or sub-advisors receipt of brokerage and research
services. To the extent that portfolio transactions are used to
obtain such services, the brokerage commissions paid by the Funds will exceed
those that might otherwise be paid by an amount that cannot be presently
determined. Such services generally would be useful and of value to
the Investment Adviser or sub-advisors in serving one or more of their other
clients and, conversely, such services obtained by the placement of brokerage
business of other clients generally would be useful to the Investment Adviser
and sub-advisors in carrying out their obligations to the
Funds. While such services are not expected to reduce the expenses of
the Investment Adviser or sub-advisors, the Investment Adviser would, through
use of the services, avoid the additional expenses that would be incurred if it
should attempt to develop comparable information through its own
staff. Commission rates for brokerage transactions on foreign stock
exchanges are generally fixed.
One or
more of the other investment companies or accounts that the Investment Adviser
and/or the sub-advisors manage may own from time to time some of the same
investments as the Funds. Investment decisions for the Funds are made
independently from those of such other investment companies or accounts;
however, from time to time, the same investment decision may be made for more
than one company or account. When two or more companies or accounts
seek to purchase or sell the same securities, the securities actually purchased
or sold will be allocated among the companies and accounts on a good faith
equitable basis, usually on a pro rata basis, by the Investment Adviser and/or
the sub-advisors in their discretion in accordance with the accounts' various
investment objectives. Such allocations are based upon the written
procedures of the Investment Adviser and/or sub-advisors, which have been
reviewed and approved by the Board of Trustees. In some cases, this
system may adversely affect the price or size of the position obtainable for the
Funds. In other cases, however, the ability of the Funds to
participate in volume transactions may produce better execution for the
Funds. It is the opinion of the Funds' Board of Trustees that this
advantage, when combined with the other benefits available due to the Investment
Adviser's or the sub-advisors' organization, outweighs any disadvantages that
may be said to exist from exposure to simultaneous transactions.
The
Investment Adviser and its affiliates manage investments for clients from
offices located around the world. As a result, purchases and sales of
securities may be executed through different trading desks or on different
exchanges or markets throughout the day, resulting in transactions in the same
security being effected at different prices over a 24-hour period.
It is not
the Funds' policy to engage in transactions with the objective of seeking
profits from short-term trading. However, the annual portfolio
turnover rate of the Funds may be greater than 100%. Because it is
difficult to predict accurately portfolio turnover rates, actual turnover may be
higher or lower. Higher portfolio turnover results in increased Funds' costs,
including brokerage commissions, dealer markups and other transaction costs on
the sale of securities and on the reinvestment in other securities.
Information about the
brokerage commissions paid by the Funds, including commissions paid to
affiliates, is set forth in the following table:
|
|
|
Aggregate
Brokerage Commissions Paid
|
|
|
Commissions
Paid to Affiliates
|
|
|
Fiscal
Year Ended
October
31,
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
2008
|
|
$
|
960,412
|
|
|
$
|
989,788
|
|
|
$
|
2,364,477
|
|
|
$
|
37,392
|
|
|
$
|
165,402
|
|
|
$
|
101,590
|
|
|
2007
|
|
$
|
945,147
|
|
|
$
|
683,692
|
(a)
|
|
$
|
2,269,131
|
|
|
$
|
32,690
|
|
|
$
|
78,840
|
(a)
|
|
$
|
89,209
|
|
|
2006
|
|
$
|
1,397,276
|
|
|
$
|
-
|
|
|
$
|
3,166,294
|
|
|
$
|
70,172
|
|
|
$
|
-
|
|
|
$
|
209,238
|
|
|
2005
|
|
$
|
782,000
|
(b)
|
|
$
|
-
|
|
|
$
|
1,020,000
|
(c)
|
|
$
|
-
|
(b)
|
|
$
|
-
|
|
|
$
|
-
|
(c)
|
|
(a)
|
For
the period March 30, 2007 (commencement of operations) to
October 31,
2007
.
|
|
(b)
|
For
the period May 31, 2005 (commencement of operations) to
October 31,
200
5
.
|
|
(c)
|
For
the period October 27, 2005 (commencement of operations) to
October 31,
200
5
.
|
Pursuant
to that order, each Fund has retained BIM, as the securities lending agent for a
fee based on a share of the returns on investment of cash
collateral. BIM may, on behalf of the Funds, invest cash collateral
received by the Funds for such loans, among other things, in a private
investment company managed by the Investment Adviser or in registered money
market funds advised by the Investment Adviser or its affiliates.
Set forth
are the securities lending agent fees paid by the Funds to the lending agent for
the periods indicated:
|
|
Security Lending Agent
Fees
|
Fiscal Year Ended
October
31,
|
|
|
|
|
2008
|
$
12,890
|
$
-
|
$
37,661
|
|
2007
|
$
-
|
$
-
(a)
|
$
43
|
|
|
(a)
For the period March 30, 2007 (commencement of operations) to
October
31, 2007
.
|
OTHER
INFORMATION
Custody
of Assets
All
securities owned by the Target Funds and the Acquiring Fund and all cash,
including proceeds from the sale of securities in each Fund's investment
portfolio, are held by The Bank of New York Mellon, 100 Colonial Center Parkway,
Suite 200, Lake Mary, FL 32746, as custodian. The custodian performs
custodial, fund accounting and portfolio accounting services.
Transfer
Agent, Dividend Disbursing Agent and Registrar
BNY
Mellon serves as each Fund's transfer agent with respect to the Funds' common
shares.
Code
of Ethics
The
Acquiring Fund has adopted a Code of Ethics under Rule 17j-1 of the 1940
Act. The Code of Ethics establishes procedures for personal investing
and restricts certain transactions. Employees subject to the Code of
Ethics may invest in securities for their personal investment accounts,
including securities that may be purchased or held by the Acquiring
Fund. The Code of Ethics can be reviewed and copied at the SEC's
Public Reference Room in Washington, D.C. Information on the operation of the
Public Reference Room may be obtained by calling the SEC at (202)
551-8090. The Code of Ethics is also available on the EDGAR Database
on the SEC's Internet site at http://www.sec.gov, and copies may be obtained,
after paying a duplicating fee, by e-mail at publicinfo@sec.gov or by writing
the SEC's Public Reference Section, Washington, DC 20549-0102.
Proxy
Voting Policy
The Board
of Trustees of the Acquiring Fund has delegated the voting of proxies for the
Acquiring Fund securities to the Investment Adviser pursuant to the Investment
Adviser's proxy voting guidelines.
Under
these guidelines, the Investment Adviser will vote proxies related to Acquiring
Fund securities in the best interests of the Acquiring Fund and its
shareholders. From time to time, a vote may present a conflict
between the interests of the Acquiring Fund's shareholders, on the one hand, and
those of the Investment Adviser, or any affiliated person of the Acquiring Fund
or the Investment Adviser, on the other. In such event, provided that the
Investment Adviser's Equity Investment Policy Oversight Committee, or a
sub-committee thereof (the "Committee") is aware of the real or potential
conflict, if the matter to be voted on represents a material, non-routine matter
and if the Committee does not reasonably believe it is able to follow its
general voting guidelines (or if the particular proxy matter is not addressed in
the guidelines) and vote impartially, the Committee may retain an independent
fiduciary to advise the Committee on how to vote or to cast votes on behalf of
the Investment Adviser's clients. If the Investment Adviser
determines not to retain an independent fiduciary, or does not desire to follow
the advice of such independent fiduciary, the Committee shall determine how to
vote the proxy after consulting with the Investment Adviser's Portfolio
Management Group and/or the Investment Adviser's Legal and Compliance Department
and concluding that the vote cast is in its client's best interest
notwithstanding the conflict. A copy of the Acquiring Fund's Proxy
Voting Policy and Procedures is included as Appendix C to this Reorganization
Statement of Additional Information. Information on how each Fund
voted proxies relating to portfolio securities during the most recent 12-month
period ended October 31, 2008 is available without charge, (i) at
www.blackrock.com and (ii) on the SEC's website at
http://www.sec.gov.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
An
independent registered public accounting firm for the Funds performs an annual
audit of each Fund's financial statements. Each Fund's Board of
Trustees has
engaged to be each
Fund's independent registered public accounting firm.
FINANCIAL
STATEMENTS
Incorporated
herein by reference are (i) the audited financial statements of the Acquiring
Fund for the fiscal year ended October 31, 2008, (ii) the audited financial
statements of BFD for the fiscal year ended October 31, 2008 and (iii) the
audited financial statements of BWC for the fiscal year ended October 31,
2008.
PRO
FORMA FINANCIAL STATEMENTS
Set forth
in Appendix B hereto are unaudited pro forma financial statements of the
Acquiring Fund giving effect to the Reorganizations which include: (i) Pro Forma
Condensed Combined Schedule of Investments at October 31, 2008, (ii) Pro Forma
Condensed Combined Statements of Assets and Liabilities at October 31, 2008,
(iii) Pro Forma Condensed Combined Statement of Operations for the twelve months
ended October 31, 2008 and (iv) Notes to Pro Forma Condensed Combined Financial
Statements.
APPENDIX
A
FORM
OF AGREEMENT AND PLAN OF REORGANIZATION
,
2009
In order
to consummate the reorganization contemplated herein (the "
Reorganization
") and
in consideration of the promises and the covenants and agreements hereinafter
set forth, and intending to be legally bound, BlackRock XXXXXX (the "
Target Fund
"), a
registered, diversified, closed-end investment company, File No. 811-XXXX and
BlackRock Global Opportunities Equity Trust (the "
Acquiring Fund
", and,
together with the Target Fund, the "Funds"), a registered, diversified,
closed-end investment company, File No. 811-XXXX, each hereby agree as
follows:
|
1.
|
REPRESENTATIONS
AND WARRANTIES OF THE ACQUIRING
FUND.
|
The
Acquiring Fund represents and warrants to, and agrees with, the Target Fund
that:
(a)
The Acquiring Fund is a
statutory trust
duly organized, validly existing and in
good standing in conformity with the laws of the State of
Delaware
, and has
the power to own all of its assets and
to carry out this Agreement. The Acquiring Fund has all necessary
federal, state and local authorizations to carry on its business as it is now
being conducted and to carry out this Agreement.
(b)
The Acquiring Fund is d
uly registered under the
Investment Company Act
of 1940, as amended (the
"
1940
Act
"
)
,
as a diversified, closed-end management
investment company and such registration has not been revoked or rescinded and
is in full force and effect.
(c)
The
Acquiring Fund ha
s provided or made available (including
by electronic format) to the
Target Fund the Acquiring
Fund
'
s Annual Report to
Shareholder
s for the fiscal year ended
October 31, 2008
, and the audited financial statements
appearing therein, having been audited by
, independent registered public
accounting firm, fairly present the financial position of the Acquiring Fund as
of the respective dates indicated, in conformity with accounting principles
generally accepted in the
United States
applied on a
consistent
basis.
(d)
An unaudited statement of assets,
liabilities and capital of the Acquiring Fund and an unaudited schedule of
investments of the Acquiring Fund, each as of the Valuation Time (as defined in
Section
3(e)
herein), will be
provided or made available
(in
cluding by electronic
format)
furnished to the
Target Fund, at or prior to the Closing Date (as defined in Section 7(a)
herein), for the purpose of determining the number of
Acquiring Fund Common Shares
(as defined in Section 1(l) herein) to
be issued purs
uant to
Section 6 of this Agreement; each will fairly present the financial position of
the Acquiring Fund as of the Valuation Time
(as defined in Section 3(e))
in conformity with
generally accepted accounting principles applied on a consistent
basis.
(e)
The
Acquiring Fund has full power and
authority to enter into and perform its obligations under this
Agreement. The execution, delivery and performance of this Agreement
has been duly authorized by all necessary action of
the Acquiring Fund's
Board of
Trustee
s, and this Agreement constitutes a
valid and binding contract
of the Acquiring Fund
enforceable
against the Acquiring Fund
in accordance with its terms, subject to
the effects of bankruptcy, insolvency, moratorium, fraudulent conveyance and
similar laws r
elating to or
affecting creditors
'
rights generally and court decisions
with respect thereto.
(f)
There are no material legal,
administrative or other proceedings pending or, to the knowledge of the
Acquiring Fund, threatened against it which assert liability
on the part of the Acquiring Fund or
which materially affect its financial condition or its ability to consummate the
Reorganization. The Acquiring Fund is not charged with or, to the
best of its knowledge, threatened with any violation or
investigation o
f any possible violation of any
provisions of any federal, state or local law or regulation or administrative
ruling relating to any aspect of its business.
(g)
The Acquiring Fund is not obligated
under any provision of its
Agreement and Declaration of
Trust
o
r its Bylaws, each as amended to the
date hereof, and is not a party to any contract or other commitment or
obligation, and is not subject to any order or decree, which would be violated
by its execution of or performance under this Agreement, except inso
f
ar as the Funds have mutually agreed to
amend such contract or other commitment or obligation to cure any potential
violation as a condition precedent to the Reorganization.
(h)
There are no material contracts
outstanding to which the Acquiring Fund is a party
that have not been disclosed in the
N-14 Registration Statement (as defined in subsection (k) below) or that will
not otherwise be disclosed to the Target Fund prior to the Valuation
Time.
(i)
The Acquiring Fund has no known
liabilities of a material amount,
contingent or otherwise, other than
those shown on its statements of assets, liabilities and capital referred to in
subsection (
d
) above, those incurred in the ordinary
course of its business as an investment company, and those incurred in
connection with
the
Reorganization. As of the Valuation Time, the Acquiring Fund will
advise the Target Fund of all known liabilities, contingent or otherwise,
whether or not incurred in the ordinary course of business, existing or accrued
as of such time, except to the
extent disclosed in the financial
statements referred to in subsection (
d
) above
or to the extent already known by the
Target Fund
.
(j)
No consent, approval, authorization or
order of any court or government authority is required for the consummation by
the Ac
quiring Fund of the
Reorganization, except such as may be required under the Securities Act of 1933,
as amended (the
"
1933
Act
"
), the Securities Exchange Act of 1934,
as amended (the
"
1934
Act
"
) and the 1940 Act or state securities
laws (which term as used
herein shall include the laws of the District of Columbia and Puerto
Rico)
each of which will
have been obtained on or prior to the Closing Date
.
(k)
The registration statement filed by the
Acquiring Fund on Form N-14, which includes the proxy statement of
th
e Target Fund and the
Acquiring Fund with respect to the transactions contemplated herein (the
"
Joint Proxy
Statement/Prospectus
"
), and any supplement or amendment
thereto or to the documents therein (as amended or supplemented, the
"
N-14
Registration Stat
ement
"
), on its effective date, at the time of
the
shareholder
s
'
meetings referred to in Section 8(a) of
this Agreement and at the Closing Date, insofar as it relates to the Acquiring
Fund, (i) complied or will comply in all material respects with the
prov
isions of the 1933 Act,
the 1934 Act and the 1940 Act and the rules and regulations thereunder and (ii)
did not or will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
ma
k
e the statements therein not misleading;
and the Joint Proxy Statement/Prospectus included therein did not or will not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the ligh
t
of the circumstances under which they
were made, not misleading; provided, however, that the representations and
warranties in this subsection only shall apply to statements in or omissions
from the N-14 Registration Statement made in reliance upon and i
n
conformity with information furnished
by the Acquiring Fund for use in the N-14 Registration
Statement.
(l)
The Acquiring Fund is authorized to
issue
an unlimited number
of
common shares
, par value $
0.001
per share (the
"
Acquiring
Fund Common Shares
"
). Each
outstanding Acquiring Fund Common Share
is fully paid and nonassessable and has full voting rights.
(m)
The
Acquiring Fund Common Shares
to be issued to the Target Fund
pursuant to this Agreement will have been duly authorized and, when issued and
delivered pu
rsuant to this
Agreement, will be legally and validly issued
,
will be fully paid and nonassessable
and will have full voting rights, and no shareholder of the Acquiring Fund will
have any preemptive right of subscription or purchase in respect
thereof.
(n)
At
or prior to the Closing Date, the
Acquiring Fund Common
Shares
to be transferred to
the Target Fund for distribution to the
shareholder
s of the Target Fund on the Closing Date
will be duly qualified for offering to the public in all states of
the
United St
ates
in which the sale of shares of the Funds
presently are qualified, and there will be a sufficient number of such shares
registered under the 1933 Act to permit the transfers contemplated by this
Agreement to be consummated.
(o)
At or prior to the Closing D
ate, the Acquiring Fund will have
obtained any and all regulatory,
Trustee
and shareholder approvals necessary to
issue the
Acquiring Fund
Common Shares
to the Target
Fund.
(p)
The Acquiring Fund has filed, or intends
to file, or has obtained extensions to fil
e, all federal, state and local tax
returns which are required to be filed by it, and has paid or has obtained
extensions to pay, all federal, state and local taxes shown on said returns to
be due and owing and all assessments received by it, up to and in
c
luding the taxable year in which the
Closing Date occurs. All tax liabilities of the Acquiring Fund have
been adequately provided for on its books, and no tax deficiency or liability of
the Acquiring Fund has been asserted and no question with respect th
e
reto has been raised by the Internal
Revenue Service or by any state or local tax authority for taxes in excess of
those already paid, up to and including the taxable year in which the Closing
Date occurs.
(q)
The Acquiring Fund has elected to
qualify and has
qualified
as a regulated investment company within the meaning of Section 851 of the
Internal Revenue Code of 1986, as amended (the “
Code”
) for each of its taxable years since
its inception; and has satisfied the RIC distribution requirements imposed by
S
e
ction 852 of the Code for each of its
taxable years.
|
2.
|
REPRESENTATIONS
AND WARRANTIES OF THE TARGET FUND.
|
The Target Fund represents and
warrants to, and agrees with, the Acquiring Fund that:
(a)
The Target Fund is a
statutory trust
duly organized, validly
exis
ting and in good
standing in conformity with the laws of the State of
Delaware
, and has the power to own all of its
assets and to carry out this Agreement. The Target Fund has all
necessary federal, state and local authorizations to carry on its business
as it is now being
conducted and to carry out this Agreement.
(b)
The Target Fund is duly registered under
the
Investment Company Act
of
1940 as a diversified,
closed-end management investment company, and such registration has not been
revoked or rescinded an
d is
in full force and effect.
(c)
The Target Fund has full power and
authority to enter into and perform its obligations under this
Agreement. The execution, delivery and performance of this Agreement
has been duly authorized by all necessary action of
the T
arget Funds
Board of
Trustee
s and this Agreement constitutes a valid
and binding contract
of the
Target Fund
enforceable
against the Target Fund
in accordance with its
terms, subject to the effects of bankruptcy, insolvency, moratorium, fraudulent
conveyan
ce and similar laws
relating to or affecting creditors
'
rights generally and court decisions
with respect thereto.
(d)
The
Target Fund has provided or made
available (including by electronic format) to the
Acquiring Fund the Target
Fund
'
s Annual Report to
Shar
eholder
s for the fiscal year ended
October 31, 2008
, and the audited financial statements
appearing therein, having been audited by
, independent registered public
accounting firm, fairly present the financial position of the Target Fund as of
the r
espective dates
indicated, in conformity with accounting principles generally accepted in
the
United States
applied on a consistent
basis.
(e)
An unaudited statement of assets,
liabilities and capital of the Target Fund and an unaudited schedule of
investments
of the Target
Fund, each as of the Valuation Time
(as defined in Section
3(e))
, will be
provided or made available (including by
electronic format)
to the
Acquiring Fund at or prior to the Closing Date for the purpose of determining
the number of shares o
f
Acquiring Fund
Common
Shares
to be issued to the Target Fund
pursuant to Section 3 of this Agreement; each will fairly present the financial
position of the Target Fund as of the Valuation Time
(as defined in Section
3(e))
in conformity with
generally ac
cepted
accounting principles applied on a consistent basis.
(f)
There are no material legal,
administrative or other proceedings pending or, to the knowledge of the Target
Fund, threatened against it which assert liability on the part of the Target
Fund or whi
ch materially
affect its financial condition or its ability to consummate the
Reorganization. The Target Fund is not charged with or, to the best
of its knowledge, threatened with any violation or investigation of any possible
violation of any provisions
of any federal, state or local law or
regulation or administrative ruling relating to any aspect of its
business.
(g)
There are no material contracts
outstanding to which the Target Fund is a party that have not been disclosed in
the N-14 Registration Statemen
t or will not otherwise be disclosed to
the Acquiring Fund prior to the Valuation Time.
(h)
The Target Fund is not obligated under
any provision of its
Agreement and Declaration of
Trust
or its Bylaws, each
as amended to the date hereof, or a party to any cont
ract or other commitment or obligation,
and is not subject to any order or decree which would be violated by its
execution of or performance under this Agreement, except insofar as the Funds
have mutually agreed to amend such contract or other commitment
o
r obligation to cure any potential
violation as a condition precedent to the Reorganization.
(i)
The Target Fund has no known liabilities
of a material amount, contingent or otherwise, other than those shown on its
statements of assets, liabilities and capital
referred to
in subsection (e)
above, those incurred in the ordinary
course of its business as an investment company and those incurred in connection
with the Reorganization. As of the Valuation Time, the Target Fund
will advise the Acquiring Fund of all
known liabilities, contingent or
otherwise, whether or not incurred in the ordinary course of business, existing
or accrued as of such time
,
except to the extent disclosed in subsection (e) above or to the extent already
known by the Acquiring Fund
.
(j)
The Ta
rget Fund has filed, or intends to file,
or has obtained extensions to file, all federal, state and local tax returns
which are required to be filed by it, and has paid or has obtained extensions to
pay, all federal, state and local taxes shown on said re
t
urns to be due and owing and all
assessments received by it, up to and including the taxable year in which the
Closing Date occurs. All tax liabilities of the Target Fund have been
adequately provided for on its books, and no tax deficiency or liability
o
f the Target Fund has been asserted and
no question with respect thereto has been raised by the Internal Revenue Service
or by any state or local tax authority for taxes in excess of those already
paid, up to and including the taxable year in which the Cl
o
sing Date occurs.
(k)
At both the Valuation Time and the
Closing Date, the Target Fund will have full right, power and authority to sell,
assign, transfer and deliver the Target Fund Investments. As used in
this Agreement, the term
"
Target Fund
Investments
"
s
hall mean (i) the investments of the
Target Fund shown on the schedule of its investments as of the Valuation Time
furnished to the Acquiring Fund; and (ii) all other assets owned by the Target
Fund or liabilities incurred as of the Valuation Time. At
th
e
Closing Date, subject only to the
obligation to deliver the Target Fund Investments as contemplated by this
Agreement, the Target Fund will have good and marketable title to all of the
Target Fund Investments, and the Acquiring Fund will acquire all of
t
h
e Target Fund Investments free and clear
of any encumbrances, liens or security interests and without any restrictions
upon the transfer thereof (except those imposed by the federal or state
securities laws and those imperfections of title or encumbrances
as do not materially detract from the
value or use of the Target Fund Investments or materially affect title
thereto).
(l)
No consent, approval, authorization or
order of any court or governmental authority is required for the consummation by
the Target Fund o
f the
Reorganization, except such as may be required under the 1933 Act, the 1934 Act,
the 1940 Act or state securities laws
(which term as used herein shall include
the laws of the District of
Columbia and Puerto Rico)
each of which will have been
obtaine
d on or prior to the
Closing Date
.
(m)
The N-14 Registration Statement, on its
effective date, at the time of the
shareholder
s
'
meetings called to vote on this
Agreement and on the Closing Date, insofar as it relates to the Target Fund (i)
complied or will com
ply in
all material respects with the provisions of the 1933 Act, the 1934 Act and the
1940 Act and the rules and regulations thereunder, and (ii) did not or will not
contain any untrue statement of a material fact or omit to state any material
fact requi
r
ed to be stated therein or necessary to
make the statements therein not misleading; and the Joint Proxy
Statement/Prospectus included therein did not or will not contain any untrue
statement of a material fact or omit to state any material fact necessary
t
o make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection shall apply
only to statements in or omissions from the N-14 Registr
a
tion Statement made in reliance upon and
in conformity with information furnished by the Target Fund for use in the N-14
Registration Statement.
(n)
The Target Fund is authorized to issue
an unlimited number of
common shares
, par value
$
0.001
per share (the
"
T
arget Fund
Common Shares
"
). Each outstanding Target
Fund Common Share is fully paid and nonassessable and has full voting
rights.
(o)
All of the issued and outstanding Target
Fund Common Shares were offered for sale and sold in conformity with all
applicable
federal and
state securities laws.
(p)
The books and records of the Target Fund
made available to the Acquiring Fund and/or its counsel are substantially true
and correct and contain no material misstatements or omissions with respect to
the operations of the
Target Fund.
(q)
The Target Fund will not sell or
otherwise dispose of any of the
Acquiring Fund Common Shares
to be received in the Reorganization,
except in distribution to the
shareholder
s of the Target Fund as provided in
Section 3 of this Agreement.
(r)
The T
arget Fund has elected to qualify and
has qualified as a regulated investment company within the meaning of Section
851 of the Code for each of its taxable years since its inception; and has
satisfied the RIC distribution requirements imposed by Section 8
5
2 of the Code for each of its taxable
years.
(a)
Subject to receiving the requisite
approvals of the
shareholder
s of the Fund
s
, and to the other terms and conditions
contained herein, the Target Fund agrees to convey, transfer and deliver
t
o the Acquiring Fund and
the Acquiring Fund agrees to acquire from the Target Fund, on the Closing Date,
all of the Target Fund Investments (including interest accrued as of the
Valuation Time on debt instruments), and assume substantially all of the
liab
i
lities of the Target Fund, in exchange
for that number of
Acquiring Fund Common Shares
provided in Section 4 of this
Agreement. Pursuant to this Agreement, as soon as practicable after
the Closing Date, the Target Fund will distribute all
Acquiring Fund C
ommon Shares
received by it to its
shareholder
s in exchange for their Target Fund
Common Shares. Such distributions shall be accomplished by the
opening of shareholder accounts on the share ledger records of the Acquiring
Fund in the amounts due the
share
holder
s of the Target Fund based on their
respective holdings in the Target Fund as of the Valuation
Time.
(b)
If it is determined that the portfolios
of the Target Fund and the Acquiring Fund, when aggregated, would contain
investments exceeding certain perce
ntage limitations imposed upon the
Acquiring Fund with respect to such investments, the Target Fund, if requested
by the Acquiring Fund, will dispose of a sufficient amount of such investments
as may be necessary to avoid violating such limitations as of
t
he Closing
Date. Notwithstanding the foregoing, (
i
) nothing herein will require the Target
Fund to dispose of any portfolios, securities or other investments, if, in the
reasonable judgment of the Target Fund
'
s
Trustee
s or investment adviser, such
disposi
tion would adversely
affect the tax-free nature of the Reorganization for
U.S.
federal income tax purposes or would
otherwise not be in the best interests of the Target Fund, and (
ii
) nothing will permit the Target Fund to
dispose of any portfolio securiti
es or other investments if, in the
reasonable judgment of the Acquiring Fund
'
s
Trustee
s or investment adviser,
such
disposition would adversely affect the
tax-free nature of the Reorganization for
U.S.
federal income tax purposes or would
otherwise not be
in the
best interests of the Acquiring Fund.
(c)
Prior to the Closing Date, the Target
Fund shall declare a dividend or dividends which, together with all such
previous dividends, shall have the effect of distributing to its
shareholder
s all of its net investm
ent company taxable income to and
including the Closing Date, if any (computed without regard to any deduction for
dividends paid), and all of its net capital gain, if any, realized to and
including the Closing Date.
(d)
The Target Fund will pay or cause to
b
e paid to the Acquiring
Fund any interest the Target Fund receives on or after the Closing Date with
respect to any of the Target Fund Investments transferred to the Acquiring Fund
hereunder.
(e)
The Valuation Time shall be 4:00 p.m.,
Eastern time,
on the
full
business day
proceeding the Closing Date or at such other time and date agreed to by the
Funds
on
a date
mutually agreed upon in writing (the
"
Valuation
Time
"
).
(f)
Recourse for liabilities assumed from
the Target Fund by the Acquiring Fund in the Reorganizat
ion will be limited to the net assets
acquired by the Acquiring Fund. The known liabilities of the Target
Fund, as of the Valuation Time, shall be confirmed to the Acquiring Fund
pursuant to Section 2(i) of this Agreement.
(g)
The Target Fund will be
terminat
ed as soon as
practicable following the Closing Date by terminating its registration under the
1940 Act and dissolving under
Delaware
law and will withdraw its authority to
do business in any state where it is registered.
(h)
For
U.S.
federal income tax purpos
es, this Agreement will constitute a
plan of reorganization within the meaning of United States Treasury Regulations
Section 1.368-2(g).
|
4.
|
ISSUANCE
AND VALUATION OF ACQUIRING FUND COMMON SHARES IN THE
REORGANIZATION.
|
A number
of Acquiring Fund Common Shares with an aggregate net asset value equal to the
value of the assets of the Target Fund acquired in the Reorganization determined
as hereinafter provided, reduced by the amount of liabilities of the Target Fund
assumed by the Acquiring Fund in the Reorganization, shall be issued by the
Acquiring Fund to the Target Fund in exchange for such assets of the Target
Fund, which shall be determined as set forth below.
The net
asset value of each of the Funds and the values of their assets and the amounts
of their liabilities shall be determined as of the Valuation Time in accordance
with the regular procedures of the investment adviser, and no formula will be
used to adjust the net asset value so determined of any Fund to take into
account differences in realized and unrealized gains and losses. Such
valuation and determination shall be made by the Acquiring Fund in cooperation
with the Target Fund and shall be confirmed in writing by the Acquiring Fund to
the Target Fund. For purposes of determining the net
asset value per share of each Fund's Common Shares, the value of the securities
held by the applicable Fund plus any cash or other assets (including interest
accrued but not yet received) minus all liabilities (including accrued expenses)
shall be divided by the total number of Target Fund Common Shares or Acquiring
Fund Common Shares, as the case may be, outstanding at such time. The
Acquiring Fund shall issue to the Target Fund certificates or share deposit
receipts for the Acquiring Fund Common Shares registered in the name of the
Target Fund. The Target Fund shall then distribute the Acquiring Fund
Common Shares to the holders of Target Fund Common Shares by redelivering the
certificates or share deposit receipts evidencing ownership of the Acquiring
Fund Common Shares to the transfer agent and registrar for the Acquiring Fund
Common Shares, for distribution to the holders of Target Fund Common Shares on
the basis of such holder's proportionate interest in the aggregate net asset
value of the Target Fund Common Shares. With respect to any Target
Fund shareholder holding certificates evidencing ownership of Target Fund
Common
Shares as
of the Closing Date, and subject to the Acquiring Fund being informed thereof in
writing by the Target Fund, the Acquiring Fund will not permit such shareholder
to receive new certificates evidencing ownership of the Acquiring Fund Common
Shares until notified by the Target Fund or its agent that such shareholder has
surrendered his or her outstanding certificates evidencing ownership of Target
Fund Common Shares or, in the event of lost certificates, posted adequate
bond. The Target Fund, at its own expense, will request its
shareholders to surrender their outstanding certificates evidencing ownership of
Target Fund Common Shares or post adequate bond therefor.
No
fractional shares of Acquiring Fund Common Shares will be issued to holders of
Target Fund Common Shares unless such shares are held in a Dividend Reinvestment
Plan account. In lieu thereof, the Acquiring Fund's transfer agent
will aggregate all fractional Acquiring Fund Common Shares to be issued in
connection with the Reorganization (other than those issued to a Dividend
Reinvestment Plan account) and sell the resulting full shares on the New York
Stock Exchange at the current market price for Acquiring Fund Common Shares for
the account of all holders of such fractional interests, and each such holder
will receive such holder's pro rata share of the proceeds of such sale upon
surrender of such holder's certificates representing Acquiring Fund Common
Shares.
(a)
The Target Fund, the Acquiring Fund and
any other closed-end investment company that sells substantially all of its
assets to the Acquiring Fund on or about the Closing Date (for purposes of
th
is Section 5(a) only, a
"
Fund
"
) will bear expenses incurred in
connection with the Reorganization, including but not limited to, costs related
to the preparation and distribution of materials distributed to each
Fund
'
s Board of
Trustee
s, expenses incurred
in connection with the preparation of
the Agreement and Plan of Reorganization and a registration statement on Form
N-14, the printing and distribution of the Joint Proxy Statement/Prospectus and
any other materials
required to be distributed to shareholde
rs
, SEC and state securities commission
filing fees and legal and audit fees in connection with the Reorganization,
legal fees incurred preparing each Fund
'
s board materials, attending each
Fund
'
s board meetings and preparing the
minutes, auditing fees ass
ociated with each Fund
'
s financial statements, stock exchange
fees, transfer agency fees, rating agency fees, portfolio transfer taxes (if
any) and any similar expenses incurred in connection with the Reorganization,
which will be borne directly by the res
pective Fund incurring the expense or
allocated among the Funds based upon some reasonable methodology as
appropriate.
Neither the Funds nor the Investment
Adviser will pay any expenses of shareholders arising out of or in connection
with the Reorganizati
on.
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6.
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COVENANTS
OF THE FUNDS.
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(a)
Each Fund covenants to operate its
business as presently conducted between the date hereof and the Closing
Date.
(b)
The Target Fund agrees that following
the consummation of the Reorganization, it will dissolve in accordance with
t
he laws of the State of
Delaware
and any other applicable law, it will
not make any distributions of any
Acquiring Fund Common Shares
other than to its
shareholder
s and without first paying or adequately
providing for the payment of all of its respective l
iabilities not assumed by the Acquiring
Fund, if any, and on and after the Closing Date it shall not conduct any
business except in connection with its termination.
(c)
The Target Fund undertakes that if the
Reorganization is consummated, it will file an appli
cation pursuant to Section 8(f) of the
1940 Act for an order declaring that the Target Fund has ceased to be a
registered investment company.
(d)
The Acquiring Fund will file the N-14
Registration Statement with the Securities and Exchange Commission (the
"
SEC
"
) and will use its best efforts to
provide that the N-14 Registration Statement becomes effective as promptly as
practicable. Each Fund agrees to cooperate fully with the other, and
each will furnish to the other the information relating to itself to be
set forth in the N-14
Registration
Statement as required by the 1933 Act,
the 1934 Act the 1940 Act, and the rules and regulations thereunder and the
state securities laws.
(e)
The Acquiring Fund has no plan or
intention to sell or otherwise dispose of the Tar
get Fund Investments, except for
dispositions made in the ordinary course of business.
(f)
Each of the Funds agrees that by the
Closing Date all of its federal and other tax returns and reports required to be
filed on or before such date shall have been filed
and all taxes shown as due on said
returns either have been paid or adequate liability reserves have been provided
for the payment of such taxes.
The
intention of the parties is that the transaction contemplated by this Agreement
will qualify as a reorganization within the meaning of Section 368(a) of the
Code. Neither the Acquiring Fund nor the Target Fund shall take any
action or cause any action to be taken (including, without limitation, the
filing of any tax return) that is inconsistent with such treatment or results in
the failure of the transaction to qualify as a reorganization within the meaning
of Section 368(a) of the Code. At or prior to the Closing Date, the
Acquiring Fund and the Target Fund will take such action, or cause such action
to be taken, as is reasonably necessary to enable Skadden, Arps, Slate, Meagher
& Flom LLP ("
Skadden
"), special
counsel to the Funds, to render the tax opinion required herein (including,
without limitation, each party's execution of representations reasonably
requested by and addressed to Skadden).
In
connection with this covenant, the Funds agree to cooperate with each other in
filing any tax return, amended return or claim for refund, determining a
liability for taxes or a right to a refund of taxes or participating in or
conducting any audit or other proceeding in respect of taxes. The
Acquiring Fund agrees to retain for a period of ten years following the Closing
Date all returns, schedules and work papers and all material records or other
documents relating to tax matters of the Target Fund for each of such Fund's
taxable period first ending after the Closing Date and for all prior taxable
periods.
After the
Closing Date, the Target Fund shall prepare, or cause its agents to prepare, any
federal, state or local tax returns required to be filed by such fund with
respect to its final taxable year ending with its complete liquidation and for
any prior periods or taxable years and further shall cause such tax returns to
be duly filed with the appropriate taxing
authorities. Notwithstanding the aforementioned provisions of this
subsection, any expenses incurred by the Target Fund (other than for payment of
taxes) in connection with the preparation and filing of said tax returns after
the Closing Date shall be borne by such Fund to the extent such expenses have
been accrued by such Fund in the ordinary course without regard to the
Reorganization; any excess expenses shall be borne by the investment adviser or
an affiliate thereof.
(g)
Each
Fund agrees to mail to its
shar
eholder
s of record entitled to vote at the
special meeting of
shareholder
s at which action is to be considered
regarding this Agreement, in sufficient time to comply with requirements as to
notice thereof, a combined proxy statement and prospectus which co
mplies in all material respects with the
applicable provisions of Section 14(a) of the 1934 Act and Section 20(a) of the
1940 Act, and the rules and regulations, respectively,
thereunder.
(h)
Following the consummation of the
Reorganization, the Acquiring Fund
will continue its business as a
diversified, closed-end management investment company registered under the 1940
Act.
(a)
Delivery of the assets of the Target
Fund to be transferred, together with any other Target Fund Investments, and the
Acquir
ing Fund Common Shares
to be issued as provided in this
Agreement, shall be made
on
the date specified as the closing date in the N-14 Registration
Statement
, or at such other
time and date agreed to by the Funds, the date and time upon which such
delivery
is to take place
being referred to herein as the
"
Closing
Date
.
"
To the extent that any
Target Fund Investments, for any reason, are not transferable on the Closing
Date, the Target Fund shall cause such Target Fund Investments to be transferred
to the A
cquiring
Fund
'
s account with its custodian at the
earliest practicable date thereafter.
(b)
The Target Fund will deliver to the
Acquiring Fund on the Closing Date confirmation or other adequate evidence as to
the tax basis of the Target Fund Investments delive
red to the Acquiring Fund
hereunder.
(c)
As soon as practicable after the close
of business on the Closing Date, the Target Fund shall deliver to
or make available (including by
electronic format)
the
Acquiring Fund a list of the names and addresses of all of
the
shareholder
s of record of the Target Fund on the
Closing Date and the number of Target Fund Common Shares owned by each such
shareholder, certified to the best of its knowledge and belief by the transfer
agent for the Target Fund or by its President.
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8.
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CONDITIONS
OF THE TARGET FUND.
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The
obligations of the Target Fund hereunder shall be subject to the following
conditions:
(a)
That this Agreement shall have been
adopted, and the Reorganization shall have been approved, by the affirmative
vote of two-thirds of
the
members of the Board of
Trustee
s of the Target Fund and
by an affirmative vote of
shareholders
of the Target
Fund representing
the
lesser of (i) 67% of the common shares represented at the special meeting of
shareholders at which more than 50% of the o
utstanding common shares are represented
or (ii) more than 50% of the outstanding shares of the Target Fund
; and that the Acquiring Fund shall have
made available
to the Target Fund a copy of the
resolution approving this Agreement adopted by the Board of
Trustee
s of the Acquiring Fund, and a
certificate setting forth the vote of holders of
Acquiring Fund Common Shares
approving the issuance of additional
Acquiring Fund Common
Shares
, each certified by
its Secretary.
(b)
That the
Acquiring Fund shall have
provi
ded or made available
(including by electronic format) to the
Target Fund a statement of assets,
liabilities and capital, with values determined as provided in Section 4 of this
Agreement, together with a schedule of the Acquiring Fund
'
s investments, all a
s of the Valuation Time, certified on
the Acquiring Fund
'
s behalf by its President (or any Vice
President) or its Treasurer, and a certificate signed by the Acquiring
Fund
'
s President (or any Vice President) and
its Treasurer, dated as of the Closing Date,
certifying that as of the Valuation
Time and as of the Closing Date there has been no material adverse change in the
financial position of the Acquiring Fund since the date of the Acquiring
Fund
'
s most recent Annual or Semi-Annual
Report, as applicable, o
ther than changes in its portfolio
securities since that date or changes in the market value of its portfolio
securities.
(c)
That the Acquiring Fund shall have
furnished to the Target Fund a certificate signed by the Acquiring
Fund
'
s President (or any Vice Pr
esident) or its Treasurer, dated as of
the Closing Date, certifying that, as of the Valuation Time and as of the
Closing Date, all representations and warranties of the Acquiring Fund made in
this Agreement are true and correct in all material respects wi
t
h the same effect as if made at and as
of such dates, and that the Acquiring Fund has complied with all of the
agreements and satisfied all of the conditions on its part to be performed or
satisfied at or prior to each of such dates.
(d)
That there shall not b
e any material litigation pending with
respect to the matters contemplated by this Agreement.
(e)
The Target Fund shall have received the
opinion of Skadden, acting as special counsel for the Acquiring Fund, dated as
of the Closing Date, addressed to the Targe
t Fund, substantially in the form and to
the effect that:
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(i) the
Acquiring Fund is validly existing and in good standing under the laws of
the State of Delaware;
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(ii) the
Acquiring Fund is registered as a closed-end management investment company
under the 1940 Act;
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(iii) the
Acquiring Fund has the power and authority to execute, deliver and perform
all of its obligations under this Agreement under the laws of the State of
Delaware, the execution and delivery and the consummation by the Acquiring
Fund of the transactions contemplated hereby have been duly authorized by
all requisite action of the Acquiring Fund under the laws of the State of
Delaware, and this Agreement has been duly executed and delivered by the
Acquiring Fund under the laws of the State of Delaware;
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(iv) this
Agreement constitutes a valid and binding obligation of the Acquiring Fund
(assuming this Agreement is a valid and binding obligation of the other
party hereto);
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(v) the
execution and delivery by the Acquiring Fund of this Agreement and the
performance by the Acquiring Fund of its obligations under this Agreement
do not conflict with the Agreement and Declaration of Trust or the Bylaws
of the Acquiring Fund;
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(vi) neither
the execution, delivery or performance by the Acquiring Fund of this
Agreement nor the compliance by the Acquiring Fund with the terms and
provisions hereof contravene any provision of the laws of the State of
Delaware or the federal laws of the United States;
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(vii) no
governmental approval, which has not been obtained or taken and is not in
full force and effect, is required to authorize, or is required in
connection with, the execution or delivery of this Agreement by the
Acquiring Fund or the enforceability of this Agreement against the
Acquiring Fund; and
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(viii) the
Acquiring Fund Common Shares have each been duly authorized and, upon
issuance thereof in accordance with this Agreement, each will be validly
issued, fully paid and
nonassessable.
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(f)
That the Target Fund shall have obtained
an opinion from Skadden, special counsel for the Acquiring Fund, dated as of
the Closing Date, addressed
to the Target Fund, that the consummation of the transactions set forth in this
Agreement comply with the requirements of a reorganization as described in
Section 368(a) of the Code.
(g)
That all proceedings taken by each of
the Fun
ds and its counsel
in connection with the Reorganization and all documents incidental thereto shall
be satisfactory in form and substance to the others.
(h)
That the N-14 Registration Statement
shall have become effective under the 1933 Act, and no stop order
suspending such effectiveness shall have
been instituted or, to the knowledge of the Acquiring Fund, be contemplated by
the SEC.
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9.
|
CONDITIONS
OF THE ACQUIRING FUND.
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The
obligations of the Acquiring Fund hereunder shall be subject to the following
conditions:
(a)
That this Agreement shall have been
adopted, and the Reorganization shall have been approved, by the Board of
Trustee
s of the Acquiring Fund and that the
issuance of additional
Acquiring Fund Common Shares
shall have been approved by the
affirmative vote
of a
majority of votes cast, where total votes cast represented over 50% of all
securities entitled to vote; and the Target Fund shall have
made available
to the Acquiring Fund a copy of the
resolution approving this Agreement adopted by the Target Fund
'
s
Board of
Trustee
s, and a certificate setting forth the
vote of the holders of Target Fund Common Shares obtained, each certified by its
Secretary.
(b)
That the
Target Fund shall have provided or made
available (including by electronic format) to the Acquiring
Fund
a statement of its assets, liabilities
and capital, with values determined as
provided in Section 4 of this Agreement,
together with a schedule of investments with their respective dates of
acquisition and tax costs, all as of the Valuation Time, cert
ified on the Target Fund
'
s behalf by its President (or any Vice
President) or its Treasurer, and a certificate signed by the Target
Fund
'
s President (or any Vice President) or
its Treasurer, dated as of the Closing Date, certifying that as of the
Valuation
Time and as of
the Closing Date there has been no material adverse change in the financial
position of the Target Fund since the date of the Target Fund
'
s most recent Annual Report or
Semi-Annual Report, as applicable, other than changes in the Target
Fun
d Investments since that
date or changes in the market value of the Target Fund
Investments.
(c)
That the Target Fund shall have
furnished to the Acquiring Fund a certificate signed by the Target
Fund
'
s President (or any Vice President) or
its Treasurer, dated
the
Closing Date, certifying that as of the Valuation Time and as of the Closing
Date all representations and warranties of the Target Fund made in this
Agreement are true and correct in all material respects with the same effect as
if made at and as of
s
uch dates and the Target Fund has
complied with all of the agreements and satisfied all of the conditions on its
part to be performed or satisfied at or prior to such dates.
(d)
That there shall not be any material
litigation pending with respect to the matter
s contemplated by this
Agreement.
(e)
That the Acquiring Fund shall have
received the opinion of Skadden, acting as special counsel for the Target Fund,
dated as of the Closing Date, addressed to the Acquiring Fund, substantially in
the form and to the effect
that:
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(i) the
Target Fund is validly existing and in good standing under the laws of the
State of Delaware;
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(ii) the
Target Fund is registered as a closed-end management investment company
under the 1940 Act;
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(iii) the
Target Fund has the power and authority to execute, deliver and perform
all of its obligations under this Agreement under the laws of the State of
Delaware, the execution and delivery and the consummation by the Target
Fund of the transactions contemplated hereby have been duly authorized by
all requisite action of the Target Fund under the laws of the State of
Delaware, and this Agreement has been duly executed and delivered by the
Target Fund under the laws of the State of Delaware;
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(iv) this
Agreement constitutes a valid and binding obligation of the Target Fund
(assuming this Agreement is a valid and binding obligation of the other
party hereto);
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(v) the
execution and delivery by the Target Fund of this Agreement and the
performance by the Target Fund of its obligations under this Agreement do
not conflict with the charter or the Bylaws of the Target
Fund;
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(vi) neither
the execution, delivery or performance by the Target Fund of this
Agreement nor the compliance by the Target Fund with the terms and
provisions hereof contravene any provision of the laws of the State of
Delaware or the federal laws of the United States; and
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(vii) no
governmental approval, which has not been obtained or taken and is not in
full force and effect, is required to authorize, or is required in
connection with, the execution or delivery of this Agreement by the Target
Fund or the enforceability of this Agreement against the Target
Fund.
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(f)
That the Acquiring Fund shall have
obtained an opinion from Skadden, special counsel for the Target Fund, dated as
of the Closing Date, addressed to the Acquiring Fund,
that the
consummation
of the transactions set forth in this
Agreement comply with the requirements of a reorganization as described in
Section 368(a) of the Code.
(g)
That the N-14 Registration Statement
shall have become effective under the 1933 Act and no s
top order suspending such effectiveness
shall have been instituted or, to the knowledge of the Target Fund, be
contemplated by the SEC.
(h)
That all proceedings taken by the Target
Fund and its counsel in connection with the Reorganization and all documents
in
cidental thereto shall be
satisfactory in form and substance to the Acquiring Fund.
(i)
That prior to the Closing Date the
Target Fund shall have declared a dividend or dividends which, together with all
such previous dividends, shall have the effect of distri
buting to its
shareholder
s all of its net investment company
taxable income for the period to and including the Closing Date, if any
(computed without regard to any deduction for dividends paid), and all of its
net capital gain, if any, realized to and inc
luding the Closing
Date.
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10.
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TERMINATION,
POSTPONEMENT AND WAIVERS.
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(a)
Notwithstanding anything contained in
this Agreement to the contrary, this Agreement may be terminated and the
Reorganization abandoned at any time (whether before or after adoption thereof
b
y the
shareholder
s of the Funds) prior to the Closing
Date, or the Closing Date may be postponed, (i) by mutual consent of the Boards
of
Trustee
s of the Funds, (ii) by the Board of
Trustee
s of the Target Fund if any condition of
the Target Fund
'
s obligatio
ns set forth in Section 8 of this
Agreement has not been fulfilled or waived by such Board of
Trustee
s
,
or (iii) by the Board of
Trustee
s of the Acquiring Fund if any condition
of the Acquiring Fund
'
s obligations set forth in Section 9
o
f this Agreement
ha
s
not been fulfilled or waived by such
Board of
Trustee
s.
(b)
If the transactions contemplated by this
Agreement have not been consummated by December 31, 2009,
this Agreement automatically shall
terminate on that date, unless a later date is mutually agreed to by the
Bo
ards of
Trustee
s of the Funds.
(c)
In the event of termination of this
Agreement pursuant to the provisions hereof, the same shall become void and have
no further effect, and there shall not be any liability on the part of any Fund
or persons who are their
Tru
stee
s, trustees, officers, agents or
shareholder
s in respect of this
Agreement.
(d)
At any time prior to the Closing Date,
any of the terms or conditions of this Agreement may be waived by
a
Fund (whichever is entitled to the
benefit thereof), if, in the judgm
ent of such
Fund
after consultation with its counsel,
such action or waiver will not have a material adverse effect on the benefits
intended under this Agreement to the
shareholder
s of their respective fund, on behalf of
which such action is taken.
(e)
The res
pective representations and warranties
contained in Sections 1 and 2 of this Agreement shall expire with, and be
terminated by, the consummation of the Reorganization, and neither Fund nor any
of its officers, trustees, agents or
shareholder
s shall have an
y liability with respect to such
representations or warranties after the Closing Date. This provision
shall not protect any officer, trustee, agent or shareholder of either Fund
against any liability to the entity for which that officer, trustee, agent
o
r
shareholder so acts or to its
shareholder
s, to which that officer, trustee, agent
or shareholder otherwise would be subject by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties in the conduct of
such office.
(f)
I
f any order or orders of the SEC with
respect to this Agreement shall be issued prior to the Closing Date and shall
impose any terms or conditions which are determined by action of the Boards of
Trustee
s of the Funds to be acceptable, such
terms and condit
ions shall
be binding as if a part of this Agreement without further vote or approval of
the
shareholder
s of the Funds unless such terms
and
conditions shall result in a change in
the method of computing the number of
Acquiring Fund Common Shares
to be iss
ued to the Acquired Funds, as
applicable, in which event, unless such terms and conditions shall have been
included in the proxy solicitation materials furnished to the
shareholder
s of the Funds prior to the meetings at
which the Reorganization shall have
been approved, this Agreement shall not
be consummated and shall terminate unless the Funds promptly shall call a
special meeting of
shareholder
s at which such conditions so imposed
shall be submitted for approval.
(a)
Each party (an
"
Indemnit
or
"
) shall indemnify and hold the other and
its officers, trustees, agents and persons controlled by or controlling any of
them (each, an
"
Indemnified
Party
"
) harmless from and against any and all
losses, damages, liabilities, claims, demands, judgments, s
ettlements, deficiencies, taxes,
assessments, charges, costs and expenses of any nature whatsoever (including
reasonable attorneys
'
fees)
,
including amounts paid in satisfaction
of judgments, in compromise or as fines and penalties, and counsel fees
reason
ably incurred by such
the
Indemnified Party in connection with the
defense or disposition of any claim, action, suit or other proceeding, whether
civil or criminal, before any court or administrative or investigative body in
which such
the
Indemnified Part
y may be or may have been involved as a
party or otherwise or with which such
the
Indemnified Party may be or may have
been threatened (collectively, the
"
Losses
"
) arising out of or related to any claim
of a breach of any representation, warranty or covena
nt made herein by the Indemnitor;
provided, however, that no Indemnified Party shall be indemnified hereunder
against any Losses arising directly from such
the
Indemnified Party
'
s (i) willful misfeasance, (ii) bad
faith, (iii) gross negligence or (iv) reck
less disregard of the duties involved in
the conduct of such Indemnified Party
'
s position.
(b)
The Indemnified Party shall use its best
efforts to minimize any liabilities, damages, deficiencies, claims, judgments,
assessments, costs and expenses in respect of
which indemnity may be sought
hereunder. The Indemnified Party shall give written notice to
Indemnitor within the earlier of ten days of receipt of written notice to the
Indemnified Party or 30 days from discovery by the Indemnified Party of any
matters
which may give rise to a claim for
indemnification or reimbursement under this Agreement. The failure to
give such notice shall not affect the right of the Indemnified Party to
indemnity hereunder unless such failure has materially and adversely
affected
the rights of the Indemnitor; provided
that in any event such notice shall have been given prior to the expiration of
the Survival Period. At any time after ten days from the giving of
such notice, the Indemnified Party may, at its option, resist,
settle
or otherwise compromise, or pay such
claim unless it shall have received notice from the Indemnitor that the
Indemnitor intends, at the Indemnitor
'
s sole cost and expense, to assume the
defense of any such matter, in which case the Indemnified Party shall
have the right, at no cost
or expense to the Indemnitor, to participate in such defense. If the
Indemnitor does not assume the defense of such matter, and in any event until
the Indemnitor states in writing that it will assume the defense, the
Indemnitor
shall pay all costs of the Indemnified
Party arising out of the defense until the defense is assumed; provided,
however, that the Indemnified Party shall consult with the Indemnitor and obtain
i
ndemnitor
'
s prior written consent to any payment
or settlement
of any such
claim. The Indemnitor shall keep the Indemnified Party fully apprised
at all times as to the status of the defense. If the Indemnitor does
not assume the defense, the Indemnified Party shall keep the Indemnitor apprised
at all times as to t
h
e status of the
defense. Following indemnification as provided for hereunder, the
Indemnitor shall be subrogated to all rights of the Indemnified Party with
respect to all third parties, firms or corporations relating to the matter for
which indemnificat
i
on has been made.
(a)
All covenants, agreements,
representations and warranties made under this Agreement and any certificates
delivered pursuant to this Agreement shall be deemed to have been material and
relied upon by each of the parties, not
withstanding any investigation made by
them or on their behalf.
(b)
All notices hereunder shall be
sufficiently given for all purposes hereunder if in writing and delivered
personally or sent by registered mail or certified mail, postage
prepaid. Notice to th
e Target Fund shall be addressed to the
Target Fund c/o BlackRock Advisors, LLC,
40 East 52nd Street
,
New York
,
NY
10022
, Attention: Howard Surloff, Secretary
of the Target Fund
, or at
such other address as the Target Fund may designate by written notice
to the Acquiring
Fund. Notice to the Acquiring Fund shall be addressed to the
Acquiring Fund c/o BlackRock Advisors, LLC,
40 East 52nd Street
,
New York
,
NY
10022
, Attention: Howard Surloff, Secretary
of the
Acquiring
Fund
, or at such other address and
to
the attention of such
other person as the Acquiring Fund may designate by written notice to the Target
Fund. Any notice shall be deemed to have been served or given as of
the date such notice is delivered personally or mailed.
(c)
This Agreement supersedes a
ll previous correspondence and oral
communications between the parties regarding the Reorganization, constitutes the
only understanding with respect to the Reorganization, may not be changed except
by a letter of agreement signed by each party and shall b
e
governed by and construed in accordance
with the laws of the State of New York applicable to agreements made and to be
performed in said state.
(d)
It is expressly agreed that the
obligations of the Funds hereunder shall not be binding upon any of their
respe
ctive
Trustee
s,
shareholder
s, nominees, officers, agents, or
employees personally, but shall bind only the property of the respective
Fund. The execution and delivery of this Agreement has been
authorized by the
Trustee
s of each Fund and signed by
authori
zed officers of each
Fund, acting as such, and neither such authorization by such
Trustee
s, nor such execution and delivery by
such officers shall be deemed to have been made by any of them individually or
to impose any liability on any of them personally,
but shall bind only the trust property
of each Fund.
This
Agreement may be executed in any number of counterparts, each of which, when
executed and delivered, shall be deemed to be an original but all such
counterparts together shall constitute but one instrument.
IN
WITNESS WHEREOF, the parties have hereunto caused this Agreement to be executed
and delivered by their duly authorized officers as of the day and year first
written above.
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BLACKROCK
XXXXXXXXXXXXX
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[Name]
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[Title]
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BLACKROCK
GLOBAL
OPPORTUNITIES
EQUITY TRUST
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[Name]
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[Title]
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APPENDIX
B
PRO
FORMA FINANCIAL STATEMENTS
The following presents the pro forma
financial statements for the combination of BlackRock Global Equity Income Trust
("BFD"), BlackRock World Investment Trust ("BWC") and BlackRock Global
Opportunities Equity Trust ("BOE"). The statements are presented as
of October 31, 2008, the most recent interim period for which financial
information is currently available and the fiscal year end for the BFD, BWC and
BOE.
The unaudited Pro Forma Condensed
Combined Schedule of Investments and Pro Forma Condensed Combined Statement of
Assets and Liabilities reflect the financial position as if the transactions
occurred on October 31, 2008. The Pro Forma Condensed Combined
Statement of Operations reflects the operations for the 12 months ended October
31, 2008 as if the reorganizations (each, a "Reorganization" and, collectively,
the "Reorganizations") of BFD and BWC into BOE had taken place on October 31,
2008. The pro forma statements give effect to the proposed exchange
of BOE shares for the assets and liabilities of BFD and BWC, with BOE being the
surviving entity. The proposed transactions will be accounted for as
tax-free reorganizations in accordance with accounting principles generally
accepted in the United States. The historical cost basis of the
investments is carried over to the surviving entity. It is not
anticipated that BOE will sell any securities of BFD and BWC acquired in the
reorganizations other than in the ordinary course of business.
Pro
Forma Condensed Combined Schedule of Investments for
BlackRock
Global Opportunities Equity Trust (BOE)
BlackRock
Global Equity Income Trust (BFD)
BlackRock
World Investment Trust (BWC)
As
of October 31, 2008 (Unaudited)
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Shares
Held
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Value
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Common
Stocks
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BOE
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BFD
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BWC
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Pro
Forma Combined Fund (BFD and BWC into BOE)
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BOE
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BFD
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BWC
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Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
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Australia-1.4%
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|
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|
|
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|
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BHP
Billiton Ltd. (ADR)
|
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7,000
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-
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17,300
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24,300
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$
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272,160
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$
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-
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$
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672,624
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$
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944,784
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Commonwealth
Bank of Australia
|
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-
|
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113,845
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-
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113,845
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-
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3,112,041
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-
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3,112,041
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Dexus
Property Group (REIT)
|
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-
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761,448
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-
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761,448
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-
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379,463
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-
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379,463
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Foster's
Group Ltd.
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332,400
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-
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834,800
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1,167,200
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1,270,696
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-
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3,191,265
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4,461,961
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Insurance
Australia Group Ltd.
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-
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930,331
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-
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930,331
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-
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2,356,644
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-
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2,356,644
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Macquarie
Airports
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-
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894,897
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-
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894,897
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-
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1,272,700
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-
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1,272,700
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Macquarie
Infrastructure Group
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-
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195,800
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-
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195,800
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-
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256,642
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-
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256,642
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National
Australia Bank Ltd.
|
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-
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84,458
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-
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84,458
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-
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1,370,424
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-
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1,370,424
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Sims
Group Ltd.
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63,500
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-
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156,500
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220,000
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608,943
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-
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1,500,781
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2,109,724
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Wesfarmers
Ltd.
|
|
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-
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92,905
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-
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92,905
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-
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1,335,189
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-
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1,335,189
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2,151,799
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10,083,103
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5,364,670
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17,599,572
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Austria-0.0%
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Voestalpine
AG
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-
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16,603
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-
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16,603
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-
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405,187
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-
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405,187
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Belgium-0.5%
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Belgacom
S.A.
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56,100
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-
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140,300
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196,400
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1,919,439
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-
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4,800,309
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6,719,748
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Bermuda-0.6%
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Arch
Capital Group Ltd. (a)
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7,300
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-
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18,100
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25,400
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|
|
|
509,175
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|
-
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1,262,475
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1,771,650
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Covidien
Ltd.
|
|
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27,100
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|
37,675
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68,000
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|
|
|
132,775
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|
|
|
1,200,259
|
|
|
|
1,668,626
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|
|
|
3,011,720
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|
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|
5,880,605
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,709,434
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1,668,626
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4,274,195
|
|
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|
7,652,255
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Brazil-1.1%
|
|
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|
|
|
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|
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Banco
Bradesco S.A. (ADR)
|
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14,800
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|
-
|
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36,600
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|
|
|
51,400
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|
|
|
173,160
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|
|
|
-
|
|
|
|
428,220
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|
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|
601,380
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|
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Banco
Itau Holding Financeira S.A. (ADR)
|
|
|
14,900
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|
|
|
-
|
|
|
|
36,800
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|
|
|
51,700
|
|
|
|
164,794
|
|
|
|
-
|
|
|
|
407,008
|
|
|
|
571,802
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|
|
BM&FBOVESPA
S.A.
|
|
|
81,644
|
|
|
|
-
|
|
|
|
172,692
|
|
|
|
254,336
|
|
|
|
216,687
|
|
|
|
-
|
|
|
|
458,333
|
|
|
|
675,020
|
|
|
Cia
Energetica de Minas Gerais (ADR)
|
|
|
107,634
|
|
|
|
-
|
|
|
|
272,298
|
|
|
|
379,932
|
|
|
|
1,637,113
|
|
|
|
-
|
|
|
|
4,141,653
|
|
|
|
5,778,766
|
|
|
Petroleo
Brasileiro S.A. (ADR)
|
|
|
50,400
|
|
|
|
-
|
|
|
|
160,400
|
|
|
|
210,800
|
|
|
|
1,355,256
|
|
|
|
-
|
|
|
|
4,313,156
|
|
|
|
5,668,412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,547,010
|
|
|
|
-
|
|
|
|
9,748,370
|
|
|
|
13,295,380
|
|
|
Canada-3.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agnico-Eagles
Mines Ltd.
|
|
|
-
|
|
|
|
23,900
|
|
|
|
-
|
|
|
|
23,900
|
|
|
|
-
|
|
|
|
659,516
|
|
|
|
-
|
|
|
|
659,516
|
|
|
Bank
of Montreal
|
|
|
-
|
|
|
|
82,500
|
|
|
|
-
|
|
|
|
82,500
|
|
|
|
-
|
|
|
|
2,944,620
|
|
|
|
-
|
|
|
|
2,944,620
|
|
|
Bank
of Nova Scotia
|
|
|
-
|
|
|
|
12,100
|
|
|
|
-
|
|
|
|
12,100
|
|
|
|
-
|
|
|
|
403,467
|
|
|
|
-
|
|
|
|
403,467
|
|
|
Barrick
Gold Corp. (b)
|
|
|
-
|
|
|
|
-
|
|
|
|
127,700
|
|
|
|
127,700
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,919,947
|
|
|
|
2,919,947
|
|
|
Barrick
Gold Corp. (b)
|
|
|
97,400
|
|
|
|
-
|
|
|
|
118,300
|
|
|
|
215,700
|
|
|
|
2,212,928
|
|
|
|
-
|
|
|
|
2,687,776
|
|
|
|
4,900,704
|
|
|
Bombardier,
Inc., Class B
|
|
|
250,000
|
|
|
|
-
|
|
|
|
650,000
|
|
|
|
900,000
|
|
|
|
964,490
|
|
|
|
-
|
|
|
|
2,507,674
|
|
|
|
3,472,164
|
|
|
Canadian
Imperial Bank of Commerce
|
|
|
-
|
|
|
|
3,700
|
|
|
|
-
|
|
|
|
3,700
|
|
|
|
-
|
|
|
|
167,794
|
|
|
|
-
|
|
|
|
167,794
|
|
|
Canadian
National Railway Co.
|
|
|
34,000
|
|
|
|
-
|
|
|
|
85,000
|
|
|
|
119,000
|
|
|
|
1,470,840
|
|
|
|
-
|
|
|
|
3,677,100
|
|
|
|
5,147,940
|
|
|
Canadian
Natural Resources Ltd.
|
|
|
-
|
|
|
|
28,400
|
|
|
|
-
|
|
|
|
28,400
|
|
|
|
-
|
|
|
|
1,433,077
|
|
|
|
-
|
|
|
|
1,433,077
|
|
|
Canadian
Oil Sands Trust
|
|
|
-
|
|
|
|
76,691
|
|
|
|
-
|
|
|
|
76,691
|
|
|
|
-
|
|
|
|
2,057,734
|
|
|
|
-
|
|
|
|
2,057,734
|
|
|
EnCana
Corp.
|
|
|
-
|
|
|
|
55,900
|
|
|
|
-
|
|
|
|
55,900
|
|
|
|
-
|
|
|
|
2,839,755
|
|
|
|
-
|
|
|
|
2,839,755
|
|
|
Husky
Energy, Inc.
|
|
|
35,511
|
|
|
|
-
|
|
|
|
87,213
|
|
|
|
122,724
|
|
|
|
1,066,538
|
|
|
|
-
|
|
|
|
2,619,357
|
|
|
|
3,685,895
|
|
|
Manulife
Financial Corp.
|
|
|
-
|
|
|
|
9,500
|
|
|
|
-
|
|
|
|
9,500
|
|
|
|
-
|
|
|
|
190,110
|
|
|
|
-
|
|
|
|
190,110
|
|
|
PAN
American Silver Corp. (a)
|
|
|
-
|
|
|
|
78,569
|
|
|
|
-
|
|
|
|
78,569
|
|
|
|
-
|
|
|
|
895,659
|
|
|
|
-
|
|
|
|
895,659
|
|
|
Penn
West Energy Trust
|
|
|
-
|
|
|
|
10,046
|
|
|
|
-
|
|
|
|
10,046
|
|
|
|
-
|
|
|
|
179,116
|
|
|
|
-
|
|
|
|
179,116
|
|
|
Potash
Corp. of Saskatchewan
|
|
|
8,000
|
|
|
|
-
|
|
|
|
18,700
|
|
|
|
26,700
|
|
|
|
682,080
|
|
|
|
-
|
|
|
|
1,594,362
|
|
|
|
2,276,442
|
|
|
Research
In Motion Ltd. (a)
|
|
|
-
|
|
|
|
18,300
|
|
|
|
-
|
|
|
|
18,300
|
|
|
|
-
|
|
|
|
926,463
|
|
|
|
-
|
|
|
|
926,463
|
|
|
Research
In Motion Ltd. (a)
|
|
|
11,300
|
|
|
|
-
|
|
|
|
27,500
|
|
|
|
38,800
|
|
|
|
569,859
|
|
|
|
-
|
|
|
|
1,386,825
|
|
|
|
1,956,684
|
|
|
RioCan
(REIT)
|
|
|
-
|
|
|
|
113,138
|
|
|
|
-
|
|
|
|
113,138
|
|
|
|
-
|
|
|
|
1,577,906
|
|
|
|
-
|
|
|
|
1,577,906
|
|
|
Royal
Bank of Canada
|
|
|
13,000
|
|
|
|
31,100
|
|
|
|
32,800
|
|
|
|
76,900
|
|
|
|
505,202
|
|
|
|
1,208,599
|
|
|
|
1,274,664
|
|
|
|
2,988,465
|
|
|
Shaw
Communications, Inc.
|
|
|
-
|
|
|
|
52,200
|
|
|
|
-
|
|
|
|
52,200
|
|
|
|
-
|
|
|
|
914,247
|
|
|
|
-
|
|
|
|
914,247
|
|
|
Toronto-Dominion
Bank
|
|
|
-
|
|
|
|
7,300
|
|
|
|
-
|
|
|
|
7,300
|
|
|
|
-
|
|
|
|
344,741
|
|
|
|
-
|
|
|
|
344,741
|
|
|
Ultra
Petroleum Corp. (a)
|
|
|
31,900
|
|
|
|
-
|
|
|
|
78,800
|
|
|
|
110,700
|
|
|
|
1,484,945
|
|
|
|
-
|
|
|
|
3,668,140
|
|
|
|
5,153,085
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,956,882
|
|
|
|
16,742,804
|
|
|
|
22,335,845
|
|
|
|
48,035,531
|
|
|
China-0.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
China
Construction Bank Corp., Class H
|
|
|
2,257,100
|
|
|
|
-
|
|
|
|
5,554,100
|
|
|
|
7,811,200
|
|
|
|
1,119,700
|
|
|
|
-
|
|
|
|
2,755,274
|
|
|
|
3,874,974
|
|
|
Industrial
& Commercial Bank of China
|
|
|
2,635,100
|
|
|
|
-
|
|
|
|
6,484,700
|
|
|
|
9,119,800
|
|
|
|
1,239,869
|
|
|
|
-
|
|
|
|
3,051,185
|
|
|
|
4,291,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,359,569
|
|
|
|
-
|
|
|
|
5,806,459
|
|
|
|
8,166,028
|
|
|
Denmark-0.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TrygVesta
AS
|
|
|
-
|
|
|
|
40,851
|
|
|
|
-
|
|
|
|
40,851
|
|
|
|
-
|
|
|
|
2,456,334
|
|
|
|
-
|
|
|
|
2,456,334
|
|
|
Finland-0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fortum
Oyj
|
|
|
40,598
|
|
|
|
65,366
|
|
|
|
100,027
|
|
|
|
205,991
|
|
|
|
997,739
|
|
|
|
1,606,439
|
|
|
|
2,458,270
|
|
|
|
5,062,448
|
|
|
Nokia
Oyj
|
|
|
-
|
|
|
|
90,450
|
|
|
|
-
|
|
|
|
90,450
|
|
|
|
-
|
|
|
|
1,385,532
|
|
|
|
-
|
|
|
|
1,385,532
|
|
|
Orion
Oyj
|
|
|
-
|
|
|
|
126,149
|
|
|
|
-
|
|
|
|
126,149
|
|
|
|
-
|
|
|
|
1,853,761
|
|
|
|
-
|
|
|
|
1,853,761
|
|
|
Wartsila
Oyj, B Shares
|
|
|
30,300
|
|
|
|
-
|
|
|
|
75,800
|
|
|
|
106,100
|
|
|
|
767,690
|
|
|
|
-
|
|
|
|
1,920,492
|
|
|
|
2,688,182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,765,429
|
|
|
|
4,845,732
|
|
|
|
4,378,762
|
|
|
|
10,989,923
|
|
|
|
|
Shares
Held
|
|
|
Value
|
|
|
Common
Stocks
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC into BOE)
|
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC into BOE)
|
|
|
France-3.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Air
Liquide
|
|
|
-
|
|
|
|
10,607
|
|
|
|
-
|
|
|
|
10,607
|
|
|
$
|
-
|
|
|
$
|
915,333
|
|
|
$
|
-
|
|
|
$
|
915,333
|
|
|
Alstom
S.A.
|
|
|
23,000
|
|
|
|
26,641
|
|
|
|
57,200
|
|
|
|
106,841
|
|
|
|
1,139,965
|
|
|
|
1,320,427
|
|
|
|
2,835,044
|
|
|
|
5,295,436
|
|
|
AXA
S.A.
|
|
|
17,200
|
|
|
|
99,012
|
|
|
|
42,500
|
|
|
|
158,712
|
|
|
|
328,590
|
|
|
|
1,891,531
|
|
|
|
811,922
|
|
|
|
3,032,043
|
|
|
BNP
Paribas
|
|
|
6,300
|
|
|
|
-
|
|
|
|
15,500
|
|
|
|
21,800
|
|
|
|
454,868
|
|
|
|
-
|
|
|
|
1,119,121
|
|
|
|
1,573,989
|
|
|
Compagnie
Generale des Etablissements Michelin, Class B
|
|
|
25,100
|
|
|
|
-
|
|
|
|
63,200
|
|
|
|
88,300
|
|
|
|
1,291,924
|
|
|
|
-
|
|
|
|
3,252,972
|
|
|
|
4,544,896
|
|
|
Credit
Agricole S.A.
|
|
|
-
|
|
|
|
201,756
|
|
|
|
-
|
|
|
|
201,756
|
|
|
|
-
|
|
|
|
2,918,808
|
|
|
|
-
|
|
|
|
2,918,808
|
|
|
Electricite
de France S.A.
|
|
|
-
|
|
|
|
2,976
|
|
|
|
-
|
|
|
|
2,976
|
|
|
|
-
|
|
|
|
178,809
|
|
|
|
-
|
|
|
|
178,809
|
|
|
France
Telecom S.A.
|
|
|
-
|
|
|
|
140,009
|
|
|
|
-
|
|
|
|
140,009
|
|
|
|
-
|
|
|
|
3,530,410
|
|
|
|
-
|
|
|
|
3,530,410
|
|
|
Lafarge
S.A.
|
|
|
-
|
|
|
|
1,620
|
|
|
|
-
|
|
|
|
1,620
|
|
|
|
-
|
|
|
|
107,094
|
|
|
|
-
|
|
|
|
107,094
|
|
|
PPR
|
|
|
9,500
|
|
|
|
-
|
|
|
|
23,300
|
|
|
|
32,800
|
|
|
|
605,440
|
|
|
|
-
|
|
|
|
1,484,921
|
|
|
|
2,090,361
|
|
|
Renault
S.A.
|
|
|
-
|
|
|
|
7,304
|
|
|
|
-
|
|
|
|
7,304
|
|
|
|
-
|
|
|
|
223,851
|
|
|
|
-
|
|
|
|
223,851
|
|
|
Sanofi-Aventis
|
|
|
-
|
|
|
|
29,748
|
|
|
|
-
|
|
|
|
29,748
|
|
|
|
-
|
|
|
|
1,884,749
|
|
|
|
-
|
|
|
|
1,884,749
|
|
|
Societe
Television Francaise 1
|
|
|
-
|
|
|
|
117,377
|
|
|
|
-
|
|
|
|
117,377
|
|
|
|
-
|
|
|
|
1,504,935
|
|
|
|
-
|
|
|
|
1,504,935
|
|
|
Total
S.A.
|
|
|
38,800
|
|
|
|
37,809
|
|
|
|
98,200
|
|
|
|
174,809
|
|
|
|
2,134,523
|
|
|
|
2,080,005
|
|
|
|
5,402,324
|
|
|
|
9,616,852
|
|
|
Unibail-Rodamco
(REIT)
|
|
|
1,400
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,400
|
|
|
|
209,979
|
|
|
|
-
|
|
|
|
-
|
|
|
|
209,979
|
|
|
Vallourec
|
|
|
-
|
|
|
|
1,386
|
|
|
|
-
|
|
|
|
1,386
|
|
|
|
-
|
|
|
|
155,036
|
|
|
|
-
|
|
|
|
155,036
|
|
|
Vivendi
|
|
|
41,300
|
|
|
|
53,354
|
|
|
|
103,600
|
|
|
|
198,254
|
|
|
|
1,079,546
|
|
|
|
1,394,627
|
|
|
|
2,708,013
|
|
|
|
5,182,186
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,244,835
|
|
|
|
18,105,615
|
|
|
|
17,614,317
|
|
|
|
42,964,767
|
|
|
Germany-3.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adidas
AG
|
|
|
32,700
|
|
|
|
-
|
|
|
|
81,500
|
|
|
|
114,200
|
|
|
|
1,135,879
|
|
|
|
-
|
|
|
|
2,831,013
|
|
|
|
3,966,892
|
|
|
Allianz
SE
|
|
|
-
|
|
|
|
22,848
|
|
|
|
-
|
|
|
|
22,848
|
|
|
|
-
|
|
|
|
1,676,815
|
|
|
|
-
|
|
|
|
1,676,815
|
|
|
BASF
AG
|
|
|
-
|
|
|
|
72,402
|
|
|
|
-
|
|
|
|
72,402
|
|
|
|
-
|
|
|
|
2,390,255
|
|
|
|
-
|
|
|
|
2,390,255
|
|
|
Beiersdorf
AG
|
|
|
15,400
|
|
|
|
-
|
|
|
|
38,600
|
|
|
|
54,000
|
|
|
|
803,645
|
|
|
|
-
|
|
|
|
2,014,330
|
|
|
|
2,817,975
|
|
|
DaimlerChrysler
AG
|
|
|
-
|
|
|
|
57,078
|
|
|
|
-
|
|
|
|
57,078
|
|
|
|
-
|
|
|
|
1,934,946
|
|
|
|
-
|
|
|
|
1,934,946
|
|
|
Deutsche
Bank AG
|
|
|
-
|
|
|
|
3,148
|
|
|
|
-
|
|
|
|
3,148
|
|
|
|
-
|
|
|
|
117,600
|
|
|
|
-
|
|
|
|
117,600
|
|
|
Deutsche
Boerse AG
|
|
|
-
|
|
|
|
-
|
|
|
|
13,300
|
|
|
|
13,300
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,040,137
|
|
|
|
1,040,137
|
|
|
Deutsche
Lufthansa AG
|
|
|
-
|
|
|
|
146,531
|
|
|
|
-
|
|
|
|
146,531
|
|
|
|
-
|
|
|
|
2,029,473
|
|
|
|
-
|
|
|
|
2,029,473
|
|
|
Deutsche
Post AG
|
|
|
-
|
|
|
|
13,868
|
|
|
|
-
|
|
|
|
13,868
|
|
|
|
-
|
|
|
|
152,057
|
|
|
|
-
|
|
|
|
152,057
|
|
|
Deutsche
Telekom AG
|
|
|
-
|
|
|
|
67,279
|
|
|
|
-
|
|
|
|
67,279
|
|
|
|
-
|
|
|
|
987,055
|
|
|
|
-
|
|
|
|
987,055
|
|
|
E.ON
AG
|
|
|
32,535
|
|
|
|
3,950
|
|
|
|
80,163
|
|
|
|
116,648
|
|
|
|
1,219,245
|
|
|
|
148,026
|
|
|
|
3,004,097
|
|
|
|
4,371,368
|
|
|
Fresenius
Medical Care AG & Co. KGaA
|
|
|
36,200
|
|
|
|
-
|
|
|
|
90,900
|
|
|
|
127,100
|
|
|
|
1,603,755
|
|
|
|
-
|
|
|
|
4,027,109
|
|
|
|
5,630,864
|
|
|
Hannover
Rueckversicherung AG
|
|
|
17,100
|
|
|
|
-
|
|
|
|
96,000
|
|
|
|
113,100
|
|
|
|
423,322
|
|
|
|
-
|
|
|
|
2,376,548
|
|
|
|
2,799,870
|
|
|
K+S
AG
|
|
|
26,500
|
|
|
|
-
|
|
|
|
65,000
|
|
|
|
91,500
|
|
|
|
1,026,503
|
|
|
|
-
|
|
|
|
2,517,838
|
|
|
|
3,544,341
|
|
|
Linde
AG
|
|
|
21,900
|
|
|
|
-
|
|
|
|
56,300
|
|
|
|
78,200
|
|
|
|
1,812,052
|
|
|
|
-
|
|
|
|
4,658,381
|
|
|
|
6,470,433
|
|
|
Metro
AG
|
|
|
-
|
|
|
|
6,903
|
|
|
|
-
|
|
|
|
6,903
|
|
|
|
-
|
|
|
|
220,114
|
|
|
|
-
|
|
|
|
220,114
|
|
|
RWE
AG
|
|
|
-
|
|
|
|
37,704
|
|
|
|
-
|
|
|
|
37,704
|
|
|
|
-
|
|
|
|
3,091,013
|
|
|
|
-
|
|
|
|
3,091,013
|
|
|
Siemens
AG
|
|
|
-
|
|
|
|
18,874
|
|
|
|
-
|
|
|
|
18,874
|
|
|
|
-
|
|
|
|
1,109,898
|
|
|
|
-
|
|
|
|
1,109,898
|
|
|
Wincor
Nixdorf AG
|
|
|
-
|
|
|
|
4,768
|
|
|
|
-
|
|
|
|
4,768
|
|
|
|
-
|
|
|
|
206,495
|
|
|
|
-
|
|
|
|
206,495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,024,401
|
|
|
|
14,063,747
|
|
|
|
22,469,453
|
|
|
|
44,557,601
|
|
|
Greece-0.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPAP
S.A.
|
|
|
-
|
|
|
|
85,765
|
|
|
|
-
|
|
|
|
85,765
|
|
|
|
-
|
|
|
|
1,872,651
|
|
|
|
-
|
|
|
|
1,872,651
|
|
|
Hong
Kong-1.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASM
Pacific Technology Ltd.
|
|
|
388,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
388,000
|
|
|
|
1,296,283
|
|
|
|
-
|
|
|
|
|
|
|
|
1,296,283
|
|
|
BOC
Hong Kong Holdings Ltd.
|
|
|
-
|
|
|
|
928,500
|
|
|
|
-
|
|
|
|
928,500
|
|
|
|
-
|
|
|
|
1,063,068
|
|
|
|
-
|
|
|
|
1,063,068
|
|
|
China
Mobile Ltd.
|
|
|
65,200
|
|
|
|
-
|
|
|
|
362,400
|
|
|
|
427,600
|
|
|
|
573,976
|
|
|
|
-
|
|
|
|
3,190,322
|
|
|
|
3,764,298
|
|
|
Esprit
Holdings Ltd.
|
|
|
65,200
|
|
|
|
-
|
|
|
|
169,300
|
|
|
|
234,500
|
|
|
|
370,473
|
|
|
|
-
|
|
|
|
961,979
|
|
|
|
1,332,452
|
|
|
Hang
Seng Bank Ltd.
|
|
|
-
|
|
|
|
170,616
|
|
|
|
-
|
|
|
|
170,616
|
|
|
|
-
|
|
|
|
2,128,859
|
|
|
|
-
|
|
|
|
2,128,859
|
|
|
Industrial
and Commercial Bank of China Asia Ltd.
|
|
|
207,500
|
|
|
|
-
|
|
|
|
511,600
|
|
|
|
719,100
|
|
|
|
218,653
|
|
|
|
-
|
|
|
|
539,099
|
|
|
|
757,752
|
|
|
Kerry
Properties Ltd.
|
|
|
-
|
|
|
|
-
|
|
|
|
698,600
|
|
|
|
698,600
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,754,915
|
|
|
|
1,754,915
|
|
|
New
World Development Co. Ltd.
|
|
|
729,000
|
|
|
|
-
|
|
|
|
1,927,800
|
|
|
|
2,656,800
|
|
|
|
606,845
|
|
|
|
-
|
|
|
|
1,604,766
|
|
|
|
2,211,611
|
|
|
Pacific
Basin Shipping Ltd.
|
|
|
-
|
|
|
|
576,238
|
|
|
|
-
|
|
|
|
576,238
|
|
|
|
-
|
|
|
|
308,545
|
|
|
|
-
|
|
|
|
308,545
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,066,230
|
|
|
|
3,500,472
|
|
|
|
8,051,081
|
|
|
|
14,617,783
|
|
|
Ireland-0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CRH
Plc
|
|
|
-
|
|
|
|
13,439
|
|
|
|
-
|
|
|
|
13,439
|
|
|
|
-
|
|
|
|
295,281
|
|
|
|
-
|
|
|
|
295,281
|
|
|
Elan
Corp. Plc (a)
|
|
|
-
|
|
|
|
21,327
|
|
|
|
-
|
|
|
|
21,327
|
|
|
|
-
|
|
|
|
160,906
|
|
|
|
-
|
|
|
|
160,906
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
456,187
|
|
|
|
-
|
|
|
|
456,187
|
|
|
Israel-0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Partner
Communications (ADR) (b)
|
|
|
166,300
|
|
|
|
-
|
|
|
|
418,500
|
|
|
|
584,800
|
|
|
|
3,106,484
|
|
|
|
-
|
|
|
|
7,817,580
|
|
|
|
10,924,064
|
|
|
Italy-1.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AEM
S.p.A.
|
|
|
424,746
|
|
|
|
-
|
|
|
|
1,046,488
|
|
|
|
1,471,234
|
|
|
|
774,152
|
|
|
|
-
|
|
|
|
1,907,354
|
|
|
|
2,681,506
|
|
|
Assicurazioni
Generali S.p.A.
|
|
|
15,100
|
|
|
|
-
|
|
|
|
37,300
|
|
|
|
52,400
|
|
|
|
381,333
|
|
|
|
-
|
|
|
|
941,969
|
|
|
|
1,323,302
|
|
|
Enel
S.p.A.
|
|
|
-
|
|
|
|
420,930
|
|
|
|
-
|
|
|
|
420,930
|
|
|
|
|
|
|
|
2,816,131
|
|
|
|
-
|
|
|
|
2,816,131
|
|
|
Eni
S.p.A.
|
|
|
55,000
|
|
|
|
153,073
|
|
|
|
140,000
|
|
|
|
348,073
|
|
|
|
1,312,749
|
|
|
|
3,653,572
|
|
|
|
3,341,543
|
|
|
|
8,307,864
|
|
|
Intesa
Sanpaolo S.p.A.
|
|
|
104,200
|
|
|
|
-
|
|
|
|
261,900
|
|
|
|
366,100
|
|
|
|
309,280
|
|
|
|
-
|
|
|
|
777,354
|
|
|
|
1,086,634
|
|
|
Mediaset
S.p.A.
|
|
|
-
|
|
|
|
165,983
|
|
|
|
-
|
|
|
|
165,983
|
|
|
|
-
|
|
|
|
901,783
|
|
|
|
-
|
|
|
|
901,783
|
|
|
Parmalat
S.p.A.
|
|
|
534,000
|
|
|
|
-
|
|
|
|
1,341,200
|
|
|
|
1,875,200
|
|
|
|
937,585
|
|
|
|
-
|
|
|
|
2,354,848
|
|
|
|
3,292,433
|
|
|
Terna
Rete Elettrica Nazionale S.p.A.
|
|
|
-
|
|
|
|
769,837
|
|
|
|
-
|
|
|
|
769,837
|
|
|
|
-
|
|
|
|
2,482,827
|
|
|
|
-
|
|
|
|
2,482,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,715,099
|
|
|
|
9,854,313
|
|
|
|
9,323,068
|
|
|
|
22,892,480
|
|
|
Japan-5.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asahi
Kasei Corp.
|
|
|
-
|
|
|
|
48,000
|
|
|
|
-
|
|
|
|
48,000
|
|
|
|
-
|
|
|
|
180,548
|
|
|
|
-
|
|
|
|
180,548
|
|
|
Astellas
Pharma, Inc.
|
|
|
-
|
|
|
|
24,300
|
|
|
|
-
|
|
|
|
24,300
|
|
|
|
-
|
|
|
|
978,774
|
|
|
|
-
|
|
|
|
978,774
|
|
|
|
|
Shares
Held
|
|
|
Value
|
|
|
Common
Stocks
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
|
|
Canon,
Inc.
|
|
|
32,400
|
|
|
|
27,200
|
|
|
|
79,600
|
|
|
|
139,200
|
|
|
$
|
1,133,729
|
|
|
$
|
951,773
|
|
|
$
|
2,785,335
|
|
|
$
|
4,870,837
|
|
|
Daiichi
Sankyo Co. Ltd.
|
|
|
-
|
|
|
|
36,600
|
|
|
|
-
|
|
|
|
36,600
|
|
|
|
-
|
|
|
|
750,480
|
|
|
|
-
|
|
|
|
750,480
|
|
|
Daito
Trust Construction Co. Ltd.
|
|
|
-
|
|
|
|
59,200
|
|
|
|
-
|
|
|
|
59,200
|
|
|
|
-
|
|
|
|
2,497,352
|
|
|
|
-
|
|
|
|
2,497,352
|
|
|
Daiwa
Securities Group, Inc.
|
|
|
-
|
|
|
|
225,000
|
|
|
|
-
|
|
|
|
225,000
|
|
|
|
-
|
|
|
|
1,272,043
|
|
|
|
-
|
|
|
|
1,272,043
|
|
|
Ebara
Corp.
|
|
|
-
|
|
|
|
227,000
|
|
|
|
-
|
|
|
|
227,000
|
|
|
|
-
|
|
|
|
452,501
|
|
|
|
-
|
|
|
|
452,501
|
|
|
Eisai
Co. Ltd.
|
|
|
-
|
|
|
|
23,200
|
|
|
|
-
|
|
|
|
23,200
|
|
|
|
-
|
|
|
|
752,718
|
|
|
|
-
|
|
|
|
752,718
|
|
|
Fast
Retailing Co. Ltd
|
|
|
-
|
|
|
|
19,200
|
|
|
|
-
|
|
|
|
19,200
|
|
|
|
-
|
|
|
|
2,046,875
|
|
|
|
-
|
|
|
|
2,046,875
|
|
|
FUJIFILM
Holdings Corp.
|
|
|
-
|
|
|
|
6,900
|
|
|
|
-
|
|
|
|
6,900
|
|
|
|
-
|
|
|
|
158,840
|
|
|
|
-
|
|
|
|
158,840
|
|
|
Fujitsu
Ltd.
|
|
|
-
|
|
|
|
71,000
|
|
|
|
-
|
|
|
|
71,000
|
|
|
|
-
|
|
|
|
279,158
|
|
|
|
-
|
|
|
|
279,158
|
|
|
Hitachi
Ltd.
|
|
|
-
|
|
|
|
90,000
|
|
|
|
-
|
|
|
|
90,000
|
|
|
|
-
|
|
|
|
422,555
|
|
|
|
-
|
|
|
|
422,555
|
|
|
Honda
Motor Co. Ltd.
|
|
|
-
|
|
|
|
40,000
|
|
|
|
-
|
|
|
|
40,000
|
|
|
|
-
|
|
|
|
994,616
|
|
|
|
-
|
|
|
|
994,616
|
|
|
ITOCHU
Corp.
|
|
|
206,300
|
|
|
|
-
|
|
|
|
519,100
|
|
|
|
725,400
|
|
|
|
1,090,244
|
|
|
|
-
|
|
|
|
2,743,314
|
|
|
|
3,833,558
|
|
|
Japan
Real Estate Investment Corp. (REIT)
|
|
|
-
|
|
|
|
25
|
|
|
|
-
|
|
|
|
25
|
|
|
|
-
|
|
|
|
221,377
|
|
|
|
-
|
|
|
|
221,377
|
|
|
Japan
Tobacco, Inc.
|
|
|
-
|
|
|
|
118
|
|
|
|
-
|
|
|
|
118
|
|
|
|
-
|
|
|
|
418,626
|
|
|
|
-
|
|
|
|
418,626
|
|
|
JFE
Holdings, Inc.
|
|
|
-
|
|
|
|
49,700
|
|
|
|
-
|
|
|
|
49,700
|
|
|
|
-
|
|
|
|
1,268,114
|
|
|
|
-
|
|
|
|
1,268,114
|
|
|
Kansai
Electric Power Co., Inc. (The)
|
|
|
-
|
|
|
|
17,100
|
|
|
|
-
|
|
|
|
17,100
|
|
|
|
-
|
|
|
|
428,787
|
|
|
|
-
|
|
|
|
428,787
|
|
|
Kao
Corp.
|
|
|
-
|
|
|
|
47,000
|
|
|
|
-
|
|
|
|
47,000
|
|
|
|
-
|
|
|
|
1,374,355
|
|
|
|
-
|
|
|
|
1,374,355
|
|
|
Kobe
Steel Ltd.
|
|
|
-
|
|
|
|
180,000
|
|
|
|
-
|
|
|
|
180,000
|
|
|
|
-
|
|
|
|
291,967
|
|
|
|
-
|
|
|
|
291,967
|
|
|
Komatsu
Ltd.
|
|
|
-
|
|
|
|
52,200
|
|
|
|
-
|
|
|
|
52,200
|
|
|
|
-
|
|
|
|
573,869
|
|
|
|
-
|
|
|
|
573,869
|
|
|
Konami
Corp.
|
|
|
-
|
|
|
|
31,600
|
|
|
|
-
|
|
|
|
31,600
|
|
|
|
-
|
|
|
|
571,671
|
|
|
|
-
|
|
|
|
571,671
|
|
|
Konica
Minolta Holdings, Inc.
|
|
|
109,000
|
|
|
|
17,000
|
|
|
|
270,000
|
|
|
|
396,000
|
|
|
|
715,836
|
|
|
|
111,644
|
|
|
|
1,773,173
|
|
|
|
2,600,653
|
|
|
Marui
Co. Ltd.
|
|
|
-
|
|
|
|
58,800
|
|
|
|
-
|
|
|
|
58,800
|
|
|
|
-
|
|
|
|
359,434
|
|
|
|
-
|
|
|
|
359,434
|
|
|
Mitsubishi
Chemical Holdings Corp.
|
|
|
-
|
|
|
|
189,000
|
|
|
|
-
|
|
|
|
189,000
|
|
|
|
-
|
|
|
|
764,065
|
|
|
|
-
|
|
|
|
764,065
|
|
|
Mitsubishi
Corp.
|
|
|
-
|
|
|
|
26,600
|
|
|
|
-
|
|
|
|
26,600
|
|
|
|
-
|
|
|
|
445,865
|
|
|
|
-
|
|
|
|
445,865
|
|
|
Mitsubishi
Electric Corp.
|
|
|
-
|
|
|
|
37,000
|
|
|
|
-
|
|
|
|
37,000
|
|
|
|
-
|
|
|
|
229,375
|
|
|
|
-
|
|
|
|
229,375
|
|
|
Mitsubishi
UFJ Financial Group, Inc.
|
|
|
-
|
|
|
|
212,718
|
|
|
|
-
|
|
|
|
212,718
|
|
|
|
-
|
|
|
|
1,336,757
|
|
|
|
-
|
|
|
|
1,336,757
|
|
|
Mitsui
& Co. Ltd.
|
|
|
-
|
|
|
|
90,000
|
|
|
|
-
|
|
|
|
90,000
|
|
|
|
-
|
|
|
|
872,056
|
|
|
|
-
|
|
|
|
872,056
|
|
|
Mizuho
Financial Group, Inc.
|
|
|
120
|
|
|
|
-
|
|
|
|
300
|
|
|
|
420
|
|
|
|
293,016
|
|
|
|
-
|
|
|
|
732,540
|
|
|
|
1,025,556
|
|
|
Nidec
Corp.
|
|
|
-
|
|
|
|
4,300
|
|
|
|
-
|
|
|
|
4,300
|
|
|
|
-
|
|
|
|
231,269
|
|
|
|
-
|
|
|
|
231,269
|
|
|
Nintendo
Co. Ltd.
|
|
|
8,000
|
|
|
|
6,800
|
|
|
|
20,700
|
|
|
|
35,500
|
|
|
|
2,570,466
|
|
|
|
2,184,896
|
|
|
|
6,651,082
|
|
|
|
11,406,444
|
|
|
Nippon
Building Fund, Inc. (REIT)
|
|
|
-
|
|
|
|
100
|
|
|
|
-
|
|
|
|
100
|
|
|
|
-
|
|
|
|
960,899
|
|
|
|
-
|
|
|
|
960,899
|
|
|
Nippon
Mining Holdings, Inc.
|
|
|
-
|
|
|
|
350,500
|
|
|
|
-
|
|
|
|
350,500
|
|
|
|
-
|
|
|
|
1,073,004
|
|
|
|
-
|
|
|
|
1,073,004
|
|
|
Nippon
Steel Corp.
|
|
|
-
|
|
|
|
205,000
|
|
|
|
-
|
|
|
|
205,000
|
|
|
|
-
|
|
|
|
690,013
|
|
|
|
-
|
|
|
|
690,013
|
|
|
Nissan
Motor Co. Ltd.
|
|
|
-
|
|
|
|
440,700
|
|
|
|
-
|
|
|
|
440,700
|
|
|
|
-
|
|
|
|
2,188,691
|
|
|
|
-
|
|
|
|
2,188,691
|
|
|
Nomura
Holdings, Inc.
|
|
|
-
|
|
|
|
120,100
|
|
|
|
-
|
|
|
|
120,100
|
|
|
|
-
|
|
|
|
1,137,868
|
|
|
|
-
|
|
|
|
1,137,868
|
|
|
Oracle
Corp.
|
|
|
-
|
|
|
|
19,400
|
|
|
|
-
|
|
|
|
19,400
|
|
|
|
-
|
|
|
|
843,397
|
|
|
|
-
|
|
|
|
843,397
|
|
|
OSG
Corp.
|
|
|
-
|
|
|
|
64,200
|
|
|
|
-
|
|
|
|
64,200
|
|
|
|
-
|
|
|
|
464,300
|
|
|
|
-
|
|
|
|
464,300
|
|
|
Seven
& I Holdings Co. Ltd.
|
|
|
-
|
|
|
|
58,100
|
|
|
|
-
|
|
|
|
58,100
|
|
|
|
-
|
|
|
|
1,631,330
|
|
|
|
-
|
|
|
|
1,631,330
|
|
|
Shin-Etsu
Chemical Co. Ltd.
|
|
|
-
|
|
|
|
10,500
|
|
|
|
-
|
|
|
|
10,500
|
|
|
|
-
|
|
|
|
558,132
|
|
|
|
-
|
|
|
|
558,132
|
|
|
Shiseido
Co. Ltd.
|
|
|
-
|
|
|
|
33,000
|
|
|
|
-
|
|
|
|
33,000
|
|
|
|
-
|
|
|
|
678,984
|
|
|
|
-
|
|
|
|
678,984
|
|
|
Shizuoka
Bank Ltd. (The)
|
|
|
80,200
|
|
|
|
-
|
|
|
|
201,400
|
|
|
|
281,600
|
|
|
|
708,307
|
|
|
|
-
|
|
|
|
1,778,715
|
|
|
|
2,487,022
|
|
|
Sumitomo
Corp.
|
|
|
134,000
|
|
|
|
-
|
|
|
|
336,000
|
|
|
|
470,000
|
|
|
|
1,178,938
|
|
|
|
-
|
|
|
|
2,956,142
|
|
|
|
4,135,080
|
|
|
Sumitomo
Metal Industries Ltd.
|
|
|
-
|
|
|
|
557,000
|
|
|
|
-
|
|
|
|
557,000
|
|
|
|
-
|
|
|
|
1,432,570
|
|
|
|
-
|
|
|
|
1,432,570
|
|
|
Sumitomo
Metal Mining Co. Ltd.
|
|
|
-
|
|
|
|
42,000
|
|
|
|
-
|
|
|
|
42,000
|
|
|
|
-
|
|
|
|
314,972
|
|
|
|
-
|
|
|
|
314,972
|
|
|
Sumitomo
Mitsui Financial Group, Inc.
|
|
|
-
|
|
|
|
113
|
|
|
|
-
|
|
|
|
113
|
|
|
|
-
|
|
|
|
453,002
|
|
|
|
-
|
|
|
|
453,002
|
|
|
Takeda
Pharmaceutical Co. Ltd.
|
|
|
-
|
|
|
|
30,000
|
|
|
|
-
|
|
|
|
30,000
|
|
|
|
-
|
|
|
|
1,490,556
|
|
|
|
-
|
|
|
|
1,490,556
|
|
|
Tokio
Marine Holdings, Inc.
|
|
|
-
|
|
|
|
8,000
|
|
|
|
-
|
|
|
|
8,000
|
|
|
|
-
|
|
|
|
246,767
|
|
|
|
-
|
|
|
|
246,767
|
|
|
TonenGeneral
Sekiyu KK
|
|
|
-
|
|
|
|
186,000
|
|
|
|
-
|
|
|
|
186,000
|
|
|
|
-
|
|
|
|
1,573,220
|
|
|
|
-
|
|
|
|
1,573,220
|
|
|
Toyota
Motor Corp.
|
|
|
-
|
|
|
|
67,000
|
|
|
|
-
|
|
|
|
67,000
|
|
|
|
-
|
|
|
|
2,616,412
|
|
|
|
-
|
|
|
|
2,616,412
|
|
|
Toyota
Motor Corp. (ADR)
|
|
|
11,400
|
|
|
|
-
|
|
|
|
28,600
|
|
|
|
40,000
|
|
|
|
867,426
|
|
|
|
-
|
|
|
|
2,176,174
|
|
|
|
3,043,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,557,962
|
|
|
|
41,776,477
|
|
|
|
21,596,475
|
|
|
|
71,930,914
|
|
|
Luxembourg-0.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ArcelorMittal
(b)
|
|
|
31,400
|
|
|
|
-
|
|
|
|
93,600
|
|
|
|
125,000
|
|
|
|
824,250
|
|
|
|
-
|
|
|
|
2,457,000
|
|
|
|
3,281,250
|
|
|
ArcelorMittal
(a)
|
|
|
-
|
|
|
|
49,313
|
|
|
|
-
|
|
|
|
49,313
|
|
|
|
-
|
|
|
|
1,282,602
|
|
|
|
-
|
|
|
|
1,282,602
|
|
|
Tenaris
S.A. (ADR)
|
|
|
35,600
|
|
|
|
-
|
|
|
|
88,500
|
|
|
|
124,100
|
|
|
|
733,004
|
|
|
|
-
|
|
|
|
1,822,215
|
|
|
|
2,555,219
|
|
|
Oriflame
Cosmetics S.A.
|
|
|
-
|
|
|
|
16,650
|
|
|
|
-
|
|
|
|
16,650
|
|
|
|
-
|
|
|
|
520,171
|
|
|
|
-
|
|
|
|
520,171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,557,254
|
|
|
|
1,802,773
|
|
|
|
4,279,215
|
|
|
|
7,639,242
|
|
|
Mexico-0.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fomento
Economico Mexicano SAB de CV (ADR)
|
|
|
57,900
|
|
|
|
-
|
|
|
|
142,000
|
|
|
|
199,900
|
|
|
|
1,464,291
|
|
|
|
-
|
|
|
|
3,591,180
|
|
|
|
5,055,471
|
|
|
Netherlands-0.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
InBev
N.V.
|
|
|
-
|
|
|
|
25,945
|
|
|
|
-
|
|
|
|
25,945
|
|
|
|
-
|
|
|
|
1,046,444
|
|
|
|
-
|
|
|
|
1,046,444
|
|
|
Corio
N.V. (REIT)
|
|
|
3,900
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,900
|
|
|
|
208,415
|
|
|
|
-
|
|
|
|
-
|
|
|
|
208,415
|
|
|
Akzo
Nobel N.V.
|
|
|
-
|
|
|
|
3,178
|
|
|
|
-
|
|
|
|
3,178
|
|
|
|
-
|
|
|
|
132,097
|
|
|
|
-
|
|
|
|
132,097
|
|
|
Aegon
N.V.
|
|
|
-
|
|
|
|
102,815
|
|
|
|
-
|
|
|
|
102,815
|
|
|
|
-
|
|
|
|
427,214
|
|
|
|
-
|
|
|
|
427,214
|
|
|
Royal
KPN N.V.
|
|
|
-
|
|
|
|
93,627
|
|
|
|
-
|
|
|
|
93,627
|
|
|
|
-
|
|
|
|
1,318,568
|
|
|
|
-
|
|
|
|
1,318,568
|
|
|
ING
Groep N.V.
|
|
|
-
|
|
|
|
41,668
|
|
|
|
-
|
|
|
|
41,668
|
|
|
|
-
|
|
|
|
390,861
|
|
|
|
-
|
|
|
|
390,861
|
|
|
Unilever
N.V.
|
|
|
-
|
|
|
|
141,901
|
|
|
|
-
|
|
|
|
141,901
|
|
|
|
-
|
|
|
|
3,419,742
|
|
|
|
-
|
|
|
|
3,419,742
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
208,415
|
|
|
|
6,734,926
|
|
|
|
-
|
|
|
|
6,943,341
|
|
|
New
Zealand-0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fletcher
Building Ltd.
|
|
|
-
|
|
|
|
147,482
|
|
|
|
-
|
|
|
|
147,482
|
|
|
|
-
|
|
|
|
500,784
|
|
|
|
-
|
|
|
|
500,784
|
|
|
Norway-0.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fred
Olsen Energy ASA
|
|
|
33,200
|
|
|
|
-
|
|
|
|
83,600
|
|
|
|
116,800
|
|
|
|
1,097,616
|
|
|
|
-
|
|
|
|
2,763,876
|
|
|
|
3,861,492
|
|
|
Norsk
Hydro ASA
|
|
|
-
|
|
|
|
18,554
|
|
|
|
-
|
|
|
|
18,554
|
|
|
|
-
|
|
|
|
77,524
|
|
|
|
-
|
|
|
|
77,524
|
|
|
|
|
Shares
Held
|
|
|
Value
|
|
|
Common
Stocks
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
|
|
Orkla
ASA
|
|
|
158,000
|
|
|
|
-
|
|
|
|
256,000
|
|
|
|
414,000
|
|
|
$
|
1,051,840
|
|
|
$
|
-
|
|
|
$
|
1,704,247
|
|
|
$
|
2,756,087
|
|
|
Petroleum
Geo-Services ASA (a)
|
|
|
-
|
|
|
|
91,102
|
|
|
|
-
|
|
|
|
91,102
|
|
|
|
-
|
|
|
|
453,634
|
|
|
|
-
|
|
|
|
453,634
|
|
|
StatoilHydro
ASA
|
|
|
-
|
|
|
|
16,002
|
|
|
|
-
|
|
|
|
16,002
|
|
|
|
-
|
|
|
|
321,858
|
|
|
|
-
|
|
|
|
321,858
|
|
|
Yara
International ASA
|
|
|
43,000
|
|
|
|
-
|
|
|
|
105,000
|
|
|
|
148,000
|
|
|
|
898,365
|
|
|
|
-
|
|
|
|
2,193,682
|
|
|
|
3,092,047
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,047,821
|
|
|
|
853,016
|
|
|
|
6,661,805
|
|
|
|
10,562,642
|
|
|
Philippines-0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philippine
Long Distance Telephone Co. (ADR)
|
|
|
30,100
|
|
|
|
-
|
|
|
|
74,100
|
|
|
|
104,200
|
|
|
|
1,231,090
|
|
|
|
-
|
|
|
|
3,030,690
|
|
|
|
4,261,780
|
|
|
Portugal-0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energias
de Portugal S.A.
|
|
|
-
|
|
|
|
52,705
|
|
|
|
-
|
|
|
|
52,705
|
|
|
|
-
|
|
|
|
179,518
|
|
|
|
-
|
|
|
|
179,518
|
|
|
Russia-0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gazprom
OAO (ADR)
|
|
|
47,300
|
|
|
|
-
|
|
|
|
116,500
|
|
|
|
163,800
|
|
|
|
941,889
|
|
|
|
-
|
|
|
|
2,319,874
|
|
|
|
3,261,763
|
|
|
LUKOIL
(ADR)
|
|
|
22,700
|
|
|
|
-
|
|
|
|
55,800
|
|
|
|
78,500
|
|
|
|
871,476
|
|
|
|
-
|
|
|
|
2,142,219
|
|
|
|
3,013,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,813,365
|
|
|
|
-
|
|
|
|
4,462,093
|
|
|
|
6,275,458
|
|
|
Singapore-1.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CapitaLand
Ltd.
|
|
|
-
|
|
|
|
-
|
|
|
|
887,699
|
|
|
|
887,699
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,779,097
|
|
|
|
1,779,097
|
|
|
ComfortDelgro
Corp. Ltd.
|
|
|
-
|
|
|
|
401,000
|
|
|
|
-
|
|
|
|
401,000
|
|
|
|
-
|
|
|
|
328,918
|
|
|
|
-
|
|
|
|
328,918
|
|
|
Parkway
Holdings Ltd.
|
|
|
-
|
|
|
|
1,035,874
|
|
|
|
-
|
|
|
|
1,035,874
|
|
|
|
-
|
|
|
|
1,110,635
|
|
|
|
-
|
|
|
|
1,110,635
|
|
|
SembCorp
Industries Ltd.
|
|
|
-
|
|
|
|
85,000
|
|
|
|
-
|
|
|
|
85,000
|
|
|
|
-
|
|
|
|
142,859
|
|
|
|
-
|
|
|
|
142,859
|
|
|
Singapore
Airlines Ltd.
|
|
|
183,000
|
|
|
|
-
|
|
|
|
461,000
|
|
|
|
644,000
|
|
|
|
1,402,057
|
|
|
|
-
|
|
|
|
3,531,957
|
|
|
|
4,934,014
|
|
|
Singapore
Telecommunications Ltd.
|
|
|
827,520
|
|
|
|
920,000
|
|
|
|
2,182,035
|
|
|
|
3,929,555
|
|
|
|
1,392,648
|
|
|
|
1,548,284
|
|
|
|
3,672,184
|
|
|
|
6,613,116
|
|
|
United
Overseas Bank Ltd.
|
|
|
179,296
|
|
|
|
-
|
|
|
|
452,538
|
|
|
|
631,834
|
|
|
|
1,620,971
|
|
|
|
-
|
|
|
|
4,091,285
|
|
|
|
5,712,256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,415,676
|
|
|
|
3,130,696
|
|
|
|
13,074,523
|
|
|
|
20,620,895
|
|
|
South
Korea-0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hyundai
Motor Co.
|
|
|
15,800
|
|
|
|
-
|
|
|
|
39,700
|
|
|
|
55,500
|
|
|
|
730,100
|
|
|
|
-
|
|
|
|
1,834,492
|
|
|
|
2,564,592
|
|
|
Samsung
Electronics Co. Ltd.
|
|
|
2,700
|
|
|
|
-
|
|
|
|
6,700
|
|
|
|
9,400
|
|
|
|
1,138,330
|
|
|
|
-
|
|
|
|
2,824,744
|
|
|
|
3,963,074
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,868,430
|
|
|
|
-
|
|
|
|
4,659,236
|
|
|
|
6,527,666
|
|
|
Spain-0.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Banco
Bilbao Vizcaya Argentaria S.A.
|
|
|
29,600
|
|
|
|
-
|
|
|
|
72,900
|
|
|
|
102,500
|
|
|
|
343,547
|
|
|
|
-
|
|
|
|
846,101
|
|
|
|
1,189,648
|
|
|
Banco
Santander S.A.
|
|
|
81,200
|
|
|
|
205,548
|
|
|
|
199,500
|
|
|
|
486,248
|
|
|
|
878,192
|
|
|
|
2,223,036
|
|
|
|
2,157,626
|
|
|
|
5,258,854
|
|
|
Iberia
Lineas Aereas de Espana
|
|
|
-
|
|
|
|
491,164
|
|
|
|
-
|
|
|
|
491,164
|
|
|
|
-
|
|
|
|
1,158,745
|
|
|
|
-
|
|
|
|
1,158,745
|
|
|
Telefonica
S.A.
|
|
|
-
|
|
|
|
146,458
|
|
|
|
-
|
|
|
|
146,458
|
|
|
|
-
|
|
|
|
2,711,663
|
|
|
|
-
|
|
|
|
2,711,663
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,221,739
|
|
|
|
6,093,444
|
|
|
|
3,003,727
|
|
|
|
10,318,910
|
|
|
Sweden-0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hennes
& Mauritz AB
|
|
|
-
|
|
|
|
68,225
|
|
|
|
-
|
|
|
|
68,225
|
|
|
|
-
|
|
|
|
2,446,509
|
|
|
|
-
|
|
|
|
2,446,509
|
|
|
Nordea
Bank AB
|
|
|
29,600
|
|
|
|
-
|
|
|
|
73,000
|
|
|
|
102,600
|
|
|
|
237,248
|
|
|
|
-
|
|
|
|
585,105
|
|
|
|
822,353
|
|
|
Skanska
AB, B Shares
|
|
|
-
|
|
|
|
235,400
|
|
|
|
-
|
|
|
|
235,400
|
|
|
|
-
|
|
|
|
2,067,531
|
|
|
|
-
|
|
|
|
2,067,531
|
|
|
Swedbank
AB
|
|
|
-
|
|
|
|
100,100
|
|
|
|
-
|
|
|
|
100,100
|
|
|
|
-
|
|
|
|
827,218
|
|
|
|
-
|
|
|
|
827,218
|
|
|
Volvo
AB, B Shares
|
|
|
-
|
|
|
|
22,411
|
|
|
|
-
|
|
|
|
22,411
|
|
|
|
-
|
|
|
|
117,112
|
|
|
|
-
|
|
|
|
117,112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
237,248
|
|
|
|
5,458,370
|
|
|
|
585,105
|
|
|
|
6,280,723
|
|
|
Switzerland-4.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ABB
Ltd. (a)
|
|
|
-
|
|
|
|
161,719
|
|
|
|
-
|
|
|
|
161,719
|
|
|
|
-
|
|
|
|
2,121,932
|
|
|
|
-
|
|
|
|
2,121,932
|
|
|
ACE
Ltd.
|
|
|
11,000
|
|
|
|
-
|
|
|
|
27,500
|
|
|
|
38,500
|
|
|
|
630,960
|
|
|
|
-
|
|
|
|
1,577,400
|
|
|
|
2,208,360
|
|
|
Alcon,
Inc.
|
|
|
11,200
|
|
|
|
-
|
|
|
|
27,800
|
|
|
|
39,000
|
|
|
|
986,944
|
|
|
|
-
|
|
|
|
2,449,736
|
|
|
|
3,436,680
|
|
|
Credit
Suisse Group AG
|
|
|
10,100
|
|
|
|
82,715
|
|
|
|
-
|
|
|
|
92,815
|
|
|
|
377,678
|
|
|
|
3,093,034
|
|
|
|
-
|
|
|
|
3,470,712
|
|
|
Julius
Baer Holding AG
|
|
|
14,500
|
|
|
|
-
|
|
|
|
36,400
|
|
|
|
50,900
|
|
|
|
567,098
|
|
|
|
-
|
|
|
|
1,423,612
|
|
|
|
1,990,710
|
|
|
Nestle
S.A.
|
|
|
67,000
|
|
|
|
71,299
|
|
|
|
154,000
|
|
|
|
292,299
|
|
|
|
2,605,429
|
|
|
|
2,772,604
|
|
|
|
5,988,597
|
|
|
|
11,366,630
|
|
|
Novartis
AG
|
|
|
-
|
|
|
|
49,017
|
|
|
|
-
|
|
|
|
49,017
|
|
|
|
-
|
|
|
|
2,488,006
|
|
|
|
-
|
|
|
|
2,488,006
|
|
|
Novartis
AG (ADR)
|
|
|
31,300
|
|
|
|
-
|
|
|
|
77,700
|
|
|
|
109,000
|
|
|
|
1,595,987
|
|
|
|
-
|
|
|
|
3,961,923
|
|
|
|
5,557,910
|
|
|
Roche
Holding AG
|
|
|
13,300
|
|
|
|
1,734
|
|
|
|
32,800
|
|
|
|
47,834
|
|
|
|
2,033,927
|
|
|
|
265,175
|
|
|
|
5,016,001
|
|
|
|
7,315,103
|
|
|
SGS
S.A.
|
|
|
-
|
|
|
|
757
|
|
|
|
-
|
|
|
|
757
|
|
|
|
-
|
|
|
|
745,296
|
|
|
|
-
|
|
|
|
745,296
|
|
|
Swiss
Reinsurance
|
|
|
-
|
|
|
|
30,601
|
|
|
|
-
|
|
|
|
30,601
|
|
|
|
-
|
|
|
|
1,276,174
|
|
|
|
-
|
|
|
|
1,276,174
|
|
|
Syngenta
AG
|
|
|
5,800
|
|
|
|
6,574
|
|
|
|
15,200
|
|
|
|
27,574
|
|
|
|
1,084,213
|
|
|
|
1,228,899
|
|
|
|
2,841,386
|
|
|
|
5,154,498
|
|
|
Synthes,
Inc.
|
|
|
-
|
|
|
|
2,334
|
|
|
|
-
|
|
|
|
2,334
|
|
|
|
-
|
|
|
|
301,185
|
|
|
|
-
|
|
|
|
301,185
|
|
|
UBS
AG (a)
|
|
|
27,900
|
|
|
|
-
|
|
|
|
-
|
|
|
|
27,900
|
|
|
|
473,387
|
|
|
|
-
|
|
|
|
-
|
|
|
|
473,387
|
|
|
Zurich
Financial Services AG
|
|
|
2,100
|
|
|
|
6,314
|
|
|
|
5,100
|
|
|
|
13,514
|
|
|
|
426,043
|
|
|
|
1,280,970
|
|
|
|
1,034,676
|
|
|
|
2,741,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,781,666
|
|
|
|
15,573,275
|
|
|
|
24,293,331
|
|
|
|
50,648,272
|
|
|
Taiwan-0.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taiwan
Semiconductor Manufacturing Co. Ltd. (ADR)
|
|
|
151,303
|
|
|
|
-
|
|
|
|
379,509
|
|
|
|
530,812
|
|
|
|
1,249,763
|
|
|
|
-
|
|
|
|
3,134,744
|
|
|
|
4,384,507
|
|
|
United
Kingdom-6.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anglo
American Plc
|
|
|
-
|
|
|
|
100,114
|
|
|
|
-
|
|
|
|
100,114
|
|
|
|
-
|
|
|
|
2,511,984
|
|
|
|
-
|
|
|
|
2,511,984
|
|
|
AstraZeneca
Plc
|
|
|
29,300
|
|
|
|
18,597
|
|
|
|
71,400
|
|
|
|
119,297
|
|
|
|
1,241,689
|
|
|
|
788,112
|
|
|
|
3,025,822
|
|
|
|
5,055,623
|
|
|
Aviva
Plc
|
|
|
-
|
|
|
|
30,152
|
|
|
|
-
|
|
|
|
30,152
|
|
|
|
-
|
|
|
|
179,857
|
|
|
|
-
|
|
|
|
179,857
|
|
|
Barclays
Plc
|
|
|
91,300
|
|
|
|
605,793
|
|
|
|
224,400
|
|
|
|
921,493
|
|
|
|
261,719
|
|
|
|
1,736,554
|
|
|
|
643,261
|
|
|
|
2,641,534
|
|
|
BP
Plc
|
|
|
-
|
|
|
|
535,876
|
|
|
|
-
|
|
|
|
535,876
|
|
|
|
-
|
|
|
|
4,368,180
|
|
|
|
-
|
|
|
|
4,368,180
|
|
|
British
American Tobacco Plc
|
|
|
-
|
|
|
|
145,729
|
|
|
|
-
|
|
|
|
145,729
|
|
|
|
-
|
|
|
|
3,997,241
|
|
|
|
-
|
|
|
|
3,997,241
|
|
|
BT
Group Plc
|
|
|
-
|
|
|
|
173,984
|
|
|
|
-
|
|
|
|
173,984
|
|
|
|
-
|
|
|
|
326,924
|
|
|
|
-
|
|
|
|
326,924
|
|
|
De
La Rue Plc
|
|
|
165,066
|
|
|
|
-
|
|
|
|
180,253
|
|
|
|
345,319
|
|
|
|
2,381,209
|
|
|
|
-
|
|
|
|
2,600,294
|
|
|
|
4,981,503
|
|
|
Diageo
Plc
|
|
|
-
|
|
|
|
33,290
|
|
|
|
-
|
|
|
|
33,290
|
|
|
|
-
|
|
|
|
508,022
|
|
|
|
-
|
|
|
|
508,022
|
|
|
Electrocomponents
Plc
|
|
|
-
|
|
|
|
320,279
|
|
|
|
-
|
|
|
|
320,279
|
|
|
|
-
|
|
|
|
734,549
|
|
|
|
-
|
|
|
|
734,549
|
|
|
GKN
Plc
|
|
|
-
|
|
|
|
27,255
|
|
|
|
-
|
|
|
|
27,255
|
|
|
|
-
|
|
|
|
52,262
|
|
|
|
-
|
|
|
|
52,262
|
|
|
GlaxoSmithKline
Plc
|
|
|
-
|
|
|
|
280,721
|
|
|
|
-
|
|
|
|
280,721
|
|
|
|
-
|
|
|
|
5,396,563
|
|
|
|
-
|
|
|
|
5,396,563
|
|
|
HSBC
Holdings Plc
|
|
|
135,000
|
|
|
|
499,957
|
|
|
|
331,800
|
|
|
|
966,757
|
|
|
|
1,598,968
|
|
|
|
5,921,594
|
|
|
|
3,929,907
|
|
|
|
11,450,469
|
|
|
|
|
Shares
Held
|
|
|
Value
|
|
|
Common
Stocks
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
|
|
Imperial
Tobacco Group Plc
|
|
|
68,700
|
|
|
|
12,291
|
|
|
|
169,200
|
|
|
|
250,191
|
|
|
$
|
1,841,263
|
|
|
$
|
329,417
|
|
|
$
|
4,534,813
|
|
|
$
|
6,705,493
|
|
|
Legal
& General Group Plc
|
|
|
-
|
|
|
|
-
|
|
|
|
2,000,000
|
|
|
|
2,000,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,300,182
|
|
|
|
2,300,182
|
|
|
Lloyds
TSB Group Plc
|
|
|
-
|
|
|
|
124,516
|
|
|
|
-
|
|
|
|
124,516
|
|
|
|
-
|
|
|
|
402,449
|
|
|
|
-
|
|
|
|
402,449
|
|
|
Mondi
Plc
|
|
|
-
|
|
|
|
158,519
|
|
|
|
-
|
|
|
|
158,519
|
|
|
|
-
|
|
|
|
575,323
|
|
|
|
-
|
|
|
|
575,323
|
|
|
National
Express Group Plc
|
|
|
100,000
|
|
|
|
-
|
|
|
|
205,100
|
|
|
|
305,100
|
|
|
|
921,193
|
|
|
|
-
|
|
|
|
1,889,367
|
|
|
|
2,810,560
|
|
|
Rio
Tinto Plc (ADR)
|
|
|
1,200
|
|
|
|
-
|
|
|
|
3,000
|
|
|
|
4,200
|
|
|
|
223,044
|
|
|
|
-
|
|
|
|
557,610
|
|
|
|
780,654
|
|
|
Royal
Dutch Shell Plc
|
|
|
-
|
|
|
|
122,798
|
|
|
|
-
|
|
|
|
122,798
|
|
|
|
-
|
|
|
|
3,349,237
|
|
|
|
-
|
|
|
|
3,349,237
|
|
|
Severn
Trent Plc
|
|
|
-
|
|
|
|
23,231
|
|
|
|
-
|
|
|
|
23,231
|
|
|
|
-
|
|
|
|
513,481
|
|
|
|
-
|
|
|
|
513,481
|
|
|
Standard
Chartered Plc
|
|
|
34,300
|
|
|
|
-
|
|
|
|
98,300
|
|
|
|
132,600
|
|
|
|
566,876
|
|
|
|
-
|
|
|
|
1,624,605
|
|
|
|
2,191,481
|
|
|
Tate
& Lyle Plc
|
|
|
-
|
|
|
|
342,468
|
|
|
|
-
|
|
|
|
342,468
|
|
|
|
-
|
|
|
|
2,035,965
|
|
|
|
-
|
|
|
|
2,035,965
|
|
|
Tomkins
Plc
|
|
|
-
|
|
|
|
1,507,130
|
|
|
|
-
|
|
|
|
1,507,130
|
|
|
|
-
|
|
|
|
2,766,331
|
|
|
|
-
|
|
|
|
2,766,331
|
|
|
Unilever
Plc
|
|
|
84,600
|
|
|
|
-
|
|
|
|
212,600
|
|
|
|
297,200
|
|
|
|
1,900,608
|
|
|
|
-
|
|
|
|
4,776,232
|
|
|
|
6,676,840
|
|
|
United
Utilities Group Plc
|
|
|
-
|
|
|
|
243,369
|
|
|
|
|
|
|
|
243,369
|
|
|
|
-
|
|
|
|
2,748,120
|
|
|
|
-
|
|
|
|
2,748,120
|
|
|
Vodafone
Group Plc
|
|
|
-
|
|
|
|
1,568,393
|
|
|
|
-
|
|
|
|
1,568,393
|
|
|
|
-
|
|
|
|
3,017,139
|
|
|
|
-
|
|
|
|
3,017,139
|
|
|
Vodafone
Group Plc (ADR) (b)
|
|
|
54,800
|
|
|
|
-
|
|
|
|
135,200
|
|
|
|
190,000
|
|
|
|
1,055,996
|
|
|
|
-
|
|
|
|
2,605,304
|
|
|
|
3,661,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,992,565
|
|
|
|
42,259,304
|
|
|
|
28,487,397
|
|
|
|
82,739,266
|
|
|
United
States-46.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3M
Co. (b)
|
|
|
-
|
|
|
|
59,500
|
|
|
|
-
|
|
|
|
59,500
|
|
|
|
-
|
|
|
|
3,825,850
|
|
|
|
-
|
|
|
|
3,825,850
|
|
|
Abbott
Laboratories (b)
|
|
|
-
|
|
|
|
76,600
|
|
|
|
-
|
|
|
|
76,600
|
|
|
|
-
|
|
|
|
4,224,490
|
|
|
|
-
|
|
|
|
4,224,490
|
|
|
Allied
Capital Corp.
|
|
|
-
|
|
|
|
89,500
|
|
|
|
-
|
|
|
|
89,500
|
|
|
|
-
|
|
|
|
653,350
|
|
|
|
-
|
|
|
|
653,350
|
|
|
Allstate
Corp. (The) (b)
|
|
|
10,600
|
|
|
|
32,800
|
|
|
|
26,200
|
|
|
|
69,600
|
|
|
|
279,734
|
|
|
|
865,592
|
|
|
|
691,418
|
|
|
|
1,836,744
|
|
|
Altera
Corp.
|
|
|
72,000
|
|
|
|
-
|
|
|
|
178,000
|
|
|
|
250,000
|
|
|
|
1,249,200
|
|
|
|
-
|
|
|
|
3,088,300
|
|
|
|
4,337,500
|
|
|
Altria
Group, Inc. (b)(c)
|
|
|
130,300
|
|
|
|
184,600
|
|
|
|
299,800
|
|
|
|
614,700
|
|
|
|
2,500,457
|
|
|
|
3,542,474
|
|
|
|
5,753,162
|
|
|
|
11,796,093
|
|
|
American
International Group, Inc.
|
|
|
-
|
|
|
|
62,800
|
|
|
|
-
|
|
|
|
62,800
|
|
|
|
-
|
|
|
|
119,948
|
|
|
|
-
|
|
|
|
119,948
|
|
|
Amgen,
Inc. (a)(b)
|
|
|
66,300
|
|
|
|
-
|
|
|
|
163,500
|
|
|
|
229,800
|
|
|
|
3,970,707
|
|
|
|
-
|
|
|
|
9,792,015
|
|
|
|
13,762,722
|
|
|
Aon
Corp. (b)
|
|
|
40,100
|
|
|
|
-
|
|
|
|
101,500
|
|
|
|
141,600
|
|
|
|
1,696,230
|
|
|
|
-
|
|
|
|
4,293,450
|
|
|
|
5,989,680
|
|
|
Apache
Corp. (b)
|
|
|
-
|
|
|
|
8,200
|
|
|
|
-
|
|
|
|
8,200
|
|
|
|
-
|
|
|
|
675,106
|
|
|
|
-
|
|
|
|
675,106
|
|
|
Apple,
Inc. (a)(b)
|
|
|
9,700
|
|
|
|
41,400
|
|
|
|
23,800
|
|
|
|
74,900
|
|
|
|
1,043,623
|
|
|
|
4,454,226
|
|
|
|
2,560,642
|
|
|
|
8,058,491
|
|
|
Applied
Materials, Inc. (b)
|
|
|
-
|
|
|
|
14,300
|
|
|
|
-
|
|
|
|
14,300
|
|
|
|
-
|
|
|
|
184,613
|
|
|
|
-
|
|
|
|
184,613
|
|
|
Arch
Coal, Inc.
|
|
|
-
|
|
|
|
60,600
|
|
|
|
-
|
|
|
|
60,600
|
|
|
|
-
|
|
|
|
1,297,446
|
|
|
|
-
|
|
|
|
1,297,446
|
|
|
AT&T
Inc. (b)
|
|
|
-
|
|
|
|
83,500
|
|
|
|
-
|
|
|
|
83,500
|
|
|
|
-
|
|
|
|
2,235,295
|
|
|
|
-
|
|
|
|
2,235,295
|
|
|
Autodesk,
Inc. (a)(b)
|
|
|
-
|
|
|
|
69,300
|
|
|
|
-
|
|
|
|
69,300
|
|
|
|
-
|
|
|
|
1,476,783
|
|
|
|
-
|
|
|
|
1,476,783
|
|
|
AvalonBay
Communities, Inc. (REIT)
|
|
|
7,400
|
|
|
|
-
|
|
|
|
18,600
|
|
|
|
26,000
|
|
|
|
525,548
|
|
|
|
-
|
|
|
|
1,320,972
|
|
|
|
1,846,520
|
|
|
Baker
Hughes, Inc.
|
|
|
-
|
|
|
|
7,900
|
|
|
|
-
|
|
|
|
7,900
|
|
|
|
-
|
|
|
|
276,105
|
|
|
|
-
|
|
|
|
276,105
|
|
|
Bank
of America Corp. (b)
|
|
|
44,900
|
|
|
|
228,800
|
|
|
|
113,100
|
|
|
|
386,800
|
|
|
|
1,085,233
|
|
|
|
5,530,096
|
|
|
|
2,733,627
|
|
|
|
9,348,956
|
|
|
Baxter
International, Inc. (b)
|
|
|
44,400
|
|
|
|
-
|
|
|
|
112,500
|
|
|
|
156,900
|
|
|
|
2,685,756
|
|
|
|
-
|
|
|
|
6,805,125
|
|
|
|
9,490,881
|
|
|
BB&T
Corp. (b)
|
|
|
46,500
|
|
|
|
136,500
|
|
|
|
116,900
|
|
|
|
299,900
|
|
|
|
1,667,025
|
|
|
|
4,893,525
|
|
|
|
4,190,865
|
|
|
|
10,751,415
|
|
|
Becton
Dickinson & Co. (b)
|
|
|
56,400
|
|
|
|
-
|
|
|
|
139,200
|
|
|
|
195,600
|
|
|
|
3,914,160
|
|
|
|
-
|
|
|
|
9,660,480
|
|
|
|
13,574,640
|
|
|
Bristol-Myers
Squibb Co. (b)
|
|
|
-
|
|
|
|
191,900
|
|
|
|
-
|
|
|
|
191,900
|
|
|
|
-
|
|
|
|
3,943,545
|
|
|
|
-
|
|
|
|
3,943,545
|
|
|
Broadcom
Corp. (a)
|
|
|
60,000
|
|
|
|
-
|
|
|
|
150,000
|
|
|
|
210,000
|
|
|
|
1,024,800
|
|
|
|
-
|
|
|
|
2,562,000
|
|
|
|
3,586,800
|
|
|
Campbell
Soup Co.
|
|
|
32,200
|
|
|
|
-
|
|
|
|
79,000
|
|
|
|
111,200
|
|
|
|
1,221,990
|
|
|
|
-
|
|
|
|
2,998,050
|
|
|
|
4,220,040
|
|
|
Carnival
Corp. (b)
|
|
|
-
|
|
|
|
86,900
|
|
|
|
-
|
|
|
|
86,900
|
|
|
|
-
|
|
|
|
2,207,260
|
|
|
|
-
|
|
|
|
2,207,260
|
|
|
CBS
Corp., Class B (b)
|
|
|
-
|
|
|
|
50,600
|
|
|
|
-
|
|
|
|
50,600
|
|
|
|
-
|
|
|
|
491,326
|
|
|
|
-
|
|
|
|
491,326
|
|
|
Charles
Schwab Corp. (The)
|
|
|
36,900
|
|
|
|
-
|
|
|
|
92,700
|
|
|
|
129,600
|
|
|
|
705,528
|
|
|
|
-
|
|
|
|
1,772,424
|
|
|
|
2,477,952
|
|
|
Chesapeake
Energy Corp. (b)
|
|
|
62,900
|
|
|
|
-
|
|
|
|
156,600
|
|
|
|
219,500
|
|
|
|
1,381,913
|
|
|
|
-
|
|
|
|
3,440,502
|
|
|
|
4,822,415
|
|
|
Chevron
Corp. (b)
|
|
|
39,000
|
|
|
|
87,200
|
|
|
|
95,000
|
|
|
|
221,200
|
|
|
|
2,909,400
|
|
|
|
6,505,120
|
|
|
|
7,087,000
|
|
|
|
16,501,520
|
|
|
Cisco
Systems, Inc. (a)(b)
|
|
|
22,400
|
|
|
|
132,500
|
|
|
|
56,200
|
|
|
|
211,100
|
|
|
|
398,048
|
|
|
|
2,354,525
|
|
|
|
998,674
|
|
|
|
3,751,247
|
|
|
Citigroup,
Inc. (b)
|
|
|
106,100
|
|
|
|
-
|
|
|
|
265,400
|
|
|
|
371,500
|
|
|
|
1,448,265
|
|
|
|
-
|
|
|
|
3,622,710
|
|
|
|
5,070,975
|
|
|
Coca-Cola
Co. (The) (b)
|
|
|
-
|
|
|
|
52,000
|
|
|
|
-
|
|
|
|
52,000
|
|
|
|
-
|
|
|
|
2,291,120
|
|
|
|
-
|
|
|
|
2,291,120
|
|
|
Colgate-Palmolive
Co.
|
|
|
13,500
|
|
|
|
-
|
|
|
|
33,900
|
|
|
|
47,400
|
|
|
|
847,260
|
|
|
|
-
|
|
|
|
2,127,564
|
|
|
|
2,974,824
|
|
|
Comcast
Corp., Class A
|
|
|
81,200
|
|
|
|
-
|
|
|
|
204,000
|
|
|
|
285,200
|
|
|
|
1,279,712
|
|
|
|
-
|
|
|
|
3,215,040
|
|
|
|
4,494,752
|
|
|
ConocoPhillips
(b)(c)
|
|
|
34,100
|
|
|
|
83,800
|
|
|
|
88,100
|
|
|
|
206,000
|
|
|
|
1,773,882
|
|
|
|
4,359,276
|
|
|
|
4,582,962
|
|
|
|
10,716,120
|
|
|
Consolidated
Edison, Inc. (b)
|
|
|
-
|
|
|
|
84,700
|
|
|
|
-
|
|
|
|
84,700
|
|
|
|
-
|
|
|
|
3,669,204
|
|
|
|
-
|
|
|
|
3,669,204
|
|
|
Corning,
Inc. (b)
|
|
|
-
|
|
|
|
43,300
|
|
|
|
-
|
|
|
|
43,300
|
|
|
|
-
|
|
|
|
468,939
|
|
|
|
-
|
|
|
|
468,939
|
|
|
Cummins,
Inc. (c)
|
|
|
-
|
|
|
|
11,100
|
|
|
|
-
|
|
|
|
11,100
|
|
|
|
-
|
|
|
|
286,935
|
|
|
|
-
|
|
|
|
286,935
|
|
|
CVS
Caremark Corp. (b)
|
|
|
13,300
|
|
|
|
-
|
|
|
|
103,900
|
|
|
|
117,200
|
|
|
|
407,645
|
|
|
|
-
|
|
|
|
3,184,535
|
|
|
|
3,592,180
|
|
|
Developers
Diversified Realty Corp. (REIT)
|
|
|
-
|
|
|
|
109,300
|
|
|
|
-
|
|
|
|
109,300
|
|
|
|
-
|
|
|
|
1,439,481
|
|
|
|
-
|
|
|
|
1,439,481
|
|
|
Devon
Energy Corp. (b)
|
|
|
-
|
|
|
|
10,500
|
|
|
|
-
|
|
|
|
10,500
|
|
|
|
-
|
|
|
|
849,030
|
|
|
|
-
|
|
|
|
849,030
|
|
|
Diamond
Offshore Drilling, Inc. (b)
|
|
|
19,000
|
|
|
|
-
|
|
|
|
48,000
|
|
|
|
67,000
|
|
|
|
1,687,200
|
|
|
|
-
|
|
|
|
4,262,400
|
|
|
|
5,949,600
|
|
|
Dominion
Resources, Inc.
|
|
|
-
|
|
|
|
15,800
|
|
|
|
-
|
|
|
|
15,800
|
|
|
|
-
|
|
|
|
573,224
|
|
|
|
-
|
|
|
|
573,224
|
|
|
Dow
Chemical Co. (The) (b)
|
|
|
44,400
|
|
|
|
37,600
|
|
|
|
110,100
|
|
|
|
192,100
|
|
|
|
1,184,148
|
|
|
|
1,002,792
|
|
|
|
2,936,367
|
|
|
|
5,123,307
|
|
|
Duke
Energy Corp.
|
|
|
-
|
|
|
|
44,300
|
|
|
|
-
|
|
|
|
44,300
|
|
|
|
-
|
|
|
|
725,634
|
|
|
|
-
|
|
|
|
725,634
|
|
|
Duke
Realty Corp. (REIT)
|
|
|
-
|
|
|
|
52,900
|
|
|
|
-
|
|
|
|
52,900
|
|
|
|
-
|
|
|
|
746,419
|
|
|
|
-
|
|
|
|
746,419
|
|
|
E.I.
du Pont de Nemours & Co. (b)
|
|
|
-
|
|
|
|
50,000
|
|
|
|
-
|
|
|
|
50,000
|
|
|
|
-
|
|
|
|
1,600,000
|
|
|
|
-
|
|
|
|
1,600,000
|
|
|
Eagle
Bulk Shipping, Inc.
|
|
|
13,800
|
|
|
|
-
|
|
|
|
33,900
|
|
|
|
47,700
|
|
|
|
137,586
|
|
|
|
-
|
|
|
|
337,983
|
|
|
|
475,569
|
|
|
Eastman
Kodak Co.
|
|
|
-
|
|
|
|
170,600
|
|
|
|
-
|
|
|
|
170,600
|
|
|
|
-
|
|
|
|
1,566,108
|
|
|
|
-
|
|
|
|
1,566,108
|
|
|
eBay,
Inc. (a)(b)
|
|
|
-
|
|
|
|
149,900
|
|
|
|
-
|
|
|
|
149,900
|
|
|
|
-
|
|
|
|
2,288,973
|
|
|
|
-
|
|
|
|
2,288,973
|
|
|
Electronic
Arts, Inc. (a)
|
|
|
-
|
|
|
|
63,800
|
|
|
|
-
|
|
|
|
63,800
|
|
|
|
-
|
|
|
|
1,453,364
|
|
|
|
-
|
|
|
|
1,453,364
|
|
|
Eli
Lilly & Co.
|
|
|
-
|
|
|
|
43,300
|
|
|
|
-
|
|
|
|
43,300
|
|
|
|
-
|
|
|
|
1,464,406
|
|
|
|
-
|
|
|
|
1,464,406
|
|
|
Embarq
Corp.
|
|
|
-
|
|
|
|
87,700
|
|
|
|
-
|
|
|
|
87,700
|
|
|
|
-
|
|
|
|
2,631,000
|
|
|
|
-
|
|
|
|
2,631,000
|
|
|
EMC
Corp. (a)
|
|
|
-
|
|
|
|
71,000
|
|
|
|
-
|
|
|
|
71,000
|
|
|
|
-
|
|
|
|
836,380
|
|
|
|
-
|
|
|
|
836,380
|
|
|
Emerson
Electric Co. (b)
|
|
|
-
|
|
|
|
54,000
|
|
|
|
-
|
|
|
|
54,000
|
|
|
|
-
|
|
|
|
1,767,420
|
|
|
|
-
|
|
|
|
1,767,420
|
|
|
EOG
Resources, Inc. (b)
|
|
|
21,500
|
|
|
|
-
|
|
|
|
53,000
|
|
|
|
74,500
|
|
|
|
1,739,780
|
|
|
|
-
|
|
|
|
4,288,760
|
|
|
|
6,028,540
|
|
|
Exxon
Mobil Corp. (b)
|
|
|
40,500
|
|
|
|
112,200
|
|
|
|
77,500
|
|
|
|
230,200
|
|
|
|
3,001,860
|
|
|
|
8,316,264
|
|
|
|
5,744,300
|
|
|
|
17,062,424
|
|
|
|
|
Shares
Held
|
|
|
Value
|
|
|
Common
Stocks
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
|
|
First
Solar, Inc. (a)(b)
|
|
|
-
|
|
|
|
7,800
|
|
|
|
-
|
|
|
|
7,800
|
|
|
$
|
-
|
|
|
$
|
1,120,860
|
|
|
$
|
-
|
|
|
$
|
1,120,860
|
|
|
FirstEnergy
Corp.
|
|
|
-
|
|
|
|
10,700
|
|
|
|
-
|
|
|
|
10,700
|
|
|
|
-
|
|
|
|
558,112
|
|
|
|
-
|
|
|
|
558,112
|
|
|
Flowserve
Corp.
|
|
|
-
|
|
|
|
19,700
|
|
|
|
-
|
|
|
|
19,700
|
|
|
|
-
|
|
|
|
1,121,324
|
|
|
|
-
|
|
|
|
1,121,324
|
|
|
FPL
Group, Inc. (b)
|
|
|
35,400
|
|
|
|
-
|
|
|
|
87,900
|
|
|
|
123,300
|
|
|
|
1,672,296
|
|
|
|
-
|
|
|
|
4,152,396
|
|
|
|
5,824,692
|
|
|
Freeport-McMoRan
Copper & Gold, Inc. (b)
|
|
|
23,000
|
|
|
|
39,000
|
|
|
|
56,400
|
|
|
|
118,400
|
|
|
|
669,300
|
|
|
|
1,134,900
|
|
|
|
1,641,240
|
|
|
|
3,445,440
|
|
|
Genentech,
Inc. (a)
|
|
|
35,600
|
|
|
|
-
|
|
|
|
87,500
|
|
|
|
123,100
|
|
|
|
2,952,664
|
|
|
|
-
|
|
|
|
7,257,250
|
|
|
|
10,209,914
|
|
|
General
Electric Co. (b)
|
|
|
59,000
|
|
|
|
350,800
|
|
|
|
144,000
|
|
|
|
553,800
|
|
|
|
1,151,090
|
|
|
|
6,844,108
|
|
|
|
2,809,440
|
|
|
|
10,804,638
|
|
|
Genzyme
Corp. (a)
|
|
|
19,800
|
|
|
|
-
|
|
|
|
48,400
|
|
|
|
68,200
|
|
|
|
1,443,024
|
|
|
|
-
|
|
|
|
3,527,392
|
|
|
|
4,970,416
|
|
|
Gilead
Sciences, Inc. (a)
|
|
|
-
|
|
|
|
26,600
|
|
|
|
-
|
|
|
|
26,600
|
|
|
|
-
|
|
|
|
1,219,610
|
|
|
|
-
|
|
|
|
1,219,610
|
|
|
Google,
Inc., Class A (a)(b)
|
|
|
3,900
|
|
|
|
10,140
|
|
|
|
9,900
|
|
|
|
23,940
|
|
|
|
1,401,504
|
|
|
|
3,643,910
|
|
|
|
3,557,664
|
|
|
|
8,603,078
|
|
|
Greenhill
& Co., Inc. (d)
|
|
|
17,300
|
|
|
|
-
|
|
|
|
42,500
|
|
|
|
59,800
|
|
|
|
1,141,281
|
|
|
|
-
|
|
|
|
2,803,725
|
|
|
|
3,945,006
|
|
|
H.J.
Heinz Co. (b)
|
|
|
28,000
|
|
|
|
-
|
|
|
|
70,000
|
|
|
|
98,000
|
|
|
|
1,226,960
|
|
|
|
-
|
|
|
|
3,067,400
|
|
|
|
4,294,360
|
|
|
Halliburton
Co.
|
|
|
22,200
|
|
|
|
-
|
|
|
|
57,500
|
|
|
|
79,700
|
|
|
|
439,338
|
|
|
|
-
|
|
|
|
1,137,925
|
|
|
|
1,577,263
|
|
|
Hewlett-Packard
Co.
|
|
|
-
|
|
|
|
21,100
|
|
|
|
-
|
|
|
|
21,100
|
|
|
|
-
|
|
|
|
807,708
|
|
|
|
-
|
|
|
|
807,708
|
|
|
Home
Depot, Inc.
|
|
|
-
|
|
|
|
137,100
|
|
|
|
-
|
|
|
|
137,100
|
|
|
|
-
|
|
|
|
3,234,189
|
|
|
|
-
|
|
|
|
3,234,189
|
|
|
Hudson
City Bancorp, Inc.
|
|
|
17,600
|
|
|
|
-
|
|
|
|
43,500
|
|
|
|
61,100
|
|
|
|
331,056
|
|
|
|
-
|
|
|
|
818,235
|
|
|
|
1,149,291
|
|
|
Intel
Corp. (b)
|
|
|
72,000
|
|
|
|
143,100
|
|
|
|
178,000
|
|
|
|
393,100
|
|
|
|
1,152,000
|
|
|
|
2,289,600
|
|
|
|
2,848,000
|
|
|
|
6,289,600
|
|
|
IntercontinentalExchange,
Inc. (a)
|
|
|
9,000
|
|
|
|
-
|
|
|
|
22,400
|
|
|
|
31,400
|
|
|
|
770,040
|
|
|
|
-
|
|
|
|
1,916,544
|
|
|
|
2,686,584
|
|
|
International
Business Machines Corp. (b)
|
|
|
21,300
|
|
|
|
8,700
|
|
|
|
52,700
|
|
|
|
82,700
|
|
|
|
1,980,261
|
|
|
|
808,839
|
|
|
|
4,899,519
|
|
|
|
7,688,619
|
|
|
International
Paper Co.
|
|
|
-
|
|
|
|
23,300
|
|
|
|
-
|
|
|
|
23,300
|
|
|
|
-
|
|
|
|
401,226
|
|
|
|
-
|
|
|
|
401,226
|
|
|
Johnson
& Johnson (b)
|
|
|
47,100
|
|
|
|
124,400
|
|
|
|
116,100
|
|
|
|
287,600
|
|
|
|
2,889,114
|
|
|
|
7,630,696
|
|
|
|
7,121,574
|
|
|
|
17,641,384
|
|
|
Joy
Global, Inc. (b)
|
|
|
-
|
|
|
|
15,200
|
|
|
|
-
|
|
|
|
15,200
|
|
|
|
-
|
|
|
|
440,496
|
|
|
|
-
|
|
|
|
440,496
|
|
|
JPMorgan
Chase & Co. (b)
|
|
|
30,200
|
|
|
|
121,000
|
|
|
|
74,600
|
|
|
|
225,800
|
|
|
|
1,245,750
|
|
|
|
4,991,250
|
|
|
|
3,077,250
|
|
|
|
9,314,250
|
|
|
Kellogg
Co. (b)
|
|
|
28,100
|
|
|
|
-
|
|
|
|
70,500
|
|
|
|
98,600
|
|
|
|
1,416,802
|
|
|
|
-
|
|
|
|
3,554,610
|
|
|
|
4,971,412
|
|
|
KeyCorp
|
|
|
49,400
|
|
|
|
-
|
|
|
|
121,800
|
|
|
|
171,200
|
|
|
|
604,162
|
|
|
|
-
|
|
|
|
1,489,614
|
|
|
|
2,093,776
|
|
|
Kohl's
Corp. (a)
|
|
|
24,600
|
|
|
|
-
|
|
|
|
60,500
|
|
|
|
85,100
|
|
|
|
864,198
|
|
|
|
-
|
|
|
|
2,125,365
|
|
|
|
2,989,563
|
|
|
Kraft
Foods, Inc.
|
|
|
-
|
|
|
|
111,170
|
|
|
|
-
|
|
|
|
111,170
|
|
|
|
-
|
|
|
|
3,239,494
|
|
|
|
-
|
|
|
|
3,239,494
|
|
|
Lam
Research Corp. (a)
|
|
|
-
|
|
|
|
21,800
|
|
|
|
-
|
|
|
|
21,800
|
|
|
|
-
|
|
|
|
487,448
|
|
|
|
-
|
|
|
|
487,448
|
|
|
Leggett
& Platt, Inc. (c)
|
|
|
-
|
|
|
|
155,200
|
|
|
|
-
|
|
|
|
155,200
|
|
|
|
-
|
|
|
|
2,694,272
|
|
|
|
-
|
|
|
|
2,694,272
|
|
|
Lincoln
National Corp.
|
|
|
-
|
|
|
|
15,700
|
|
|
|
-
|
|
|
|
15,700
|
|
|
|
-
|
|
|
|
270,668
|
|
|
|
-
|
|
|
|
270,668
|
|
|
Linear
Technology Corp.
|
|
|
52,500
|
|
|
|
74,900
|
|
|
|
136,200
|
|
|
|
263,600
|
|
|
|
1,190,700
|
|
|
|
1,698,732
|
|
|
|
3,089,016
|
|
|
|
5,978,448
|
|
|
Masco
Corp.
|
|
|
-
|
|
|
|
185,500
|
|
|
|
-
|
|
|
|
185,500
|
|
|
|
-
|
|
|
|
1,882,825
|
|
|
|
-
|
|
|
|
1,882,825
|
|
|
Massey
Energy Co.
|
|
|
-
|
|
|
|
8,200
|
|
|
|
-
|
|
|
|
8,200
|
|
|
|
-
|
|
|
|
189,338
|
|
|
|
-
|
|
|
|
189,338
|
|
|
Mattel,
Inc.
|
|
|
-
|
|
|
|
128,500
|
|
|
|
-
|
|
|
|
128,500
|
|
|
|
-
|
|
|
|
1,930,070
|
|
|
|
-
|
|
|
|
1,930,070
|
|
|
McDonald's
Corp. (b)
|
|
|
34,000
|
|
|
|
78,400
|
|
|
|
86,000
|
|
|
|
198,400
|
|
|
|
1,969,620
|
|
|
|
4,541,712
|
|
|
|
4,981,980
|
|
|
|
11,493,312
|
|
|
Medco
Health Solutions, Inc. (a)
|
|
|
28,300
|
|
|
|
20,400
|
|
|
|
71,200
|
|
|
|
119,900
|
|
|
|
1,073,985
|
|
|
|
774,180
|
|
|
|
2,702,040
|
|
|
|
4,550,205
|
|
|
Medtronic,
Inc.
|
|
|
68,800
|
|
|
|
-
|
|
|
|
169,300
|
|
|
|
238,100
|
|
|
|
2,774,704
|
|
|
|
-
|
|
|
|
6,827,869
|
|
|
|
9,602,573
|
|
|
Merck
& Co., Inc.
|
|
|
-
|
|
|
|
61,300
|
|
|
|
-
|
|
|
|
61,300
|
|
|
|
-
|
|
|
|
1,897,235
|
|
|
|
-
|
|
|
|
1,897,235
|
|
|
Microchip
Technology, Inc.
|
|
|
-
|
|
|
|
102,600
|
|
|
|
-
|
|
|
|
102,600
|
|
|
|
-
|
|
|
|
2,527,038
|
|
|
|
-
|
|
|
|
2,527,038
|
|
|
Microsoft
Corp. (b)
|
|
|
73,700
|
|
|
|
202,600
|
|
|
|
184,600
|
|
|
|
460,900
|
|
|
|
1,645,721
|
|
|
|
4,524,058
|
|
|
|
4,122,118
|
|
|
|
10,291,897
|
|
|
Molson
Coors Brewing Co., Class B
|
|
|
27,500
|
|
|
|
-
|
|
|
|
68,000
|
|
|
|
95,500
|
|
|
|
1,027,400
|
|
|
|
-
|
|
|
|
2,540,480
|
|
|
|
3,567,880
|
|
|
Monsanto
Co. (b)
|
|
|
-
|
|
|
|
23,300
|
|
|
|
-
|
|
|
|
23,300
|
|
|
|
-
|
|
|
|
2,073,234
|
|
|
|
-
|
|
|
|
2,073,234
|
|
|
Motorola,
Inc.
|
|
|
70,000
|
|
|
|
118,100
|
|
|
|
180,000
|
|
|
|
368,100
|
|
|
|
375,900
|
|
|
|
634,197
|
|
|
|
966,600
|
|
|
|
1,976,697
|
|
|
NASDAQ
OMX Group (The) (a)
|
|
|
29,500
|
|
|
|
-
|
|
|
|
72,700
|
|
|
|
102,200
|
|
|
|
957,570
|
|
|
|
-
|
|
|
|
2,359,842
|
|
|
|
3,317,412
|
|
|
National
Oilwell Varco, Inc. (a)
|
|
|
-
|
|
|
|
12,300
|
|
|
|
-
|
|
|
|
12,300
|
|
|
|
-
|
|
|
|
367,647
|
|
|
|
-
|
|
|
|
367,647
|
|
|
New
York Community Bancorp, Inc. (b)
|
|
|
-
|
|
|
|
238,100
|
|
|
|
-
|
|
|
|
238,100
|
|
|
|
-
|
|
|
|
3,728,646
|
|
|
|
-
|
|
|
|
3,728,646
|
|
|
Newmont
Mining Corp.
|
|
|
34,000
|
|
|
|
-
|
|
|
|
86,000
|
|
|
|
120,000
|
|
|
|
895,560
|
|
|
|
-
|
|
|
|
2,265,240
|
|
|
|
3,160,800
|
|
|
Nike,
Inc.
|
|
|
41,500
|
|
|
|
-
|
|
|
|
104,100
|
|
|
|
145,600
|
|
|
|
2,391,645
|
|
|
|
-
|
|
|
|
5,999,283
|
|
|
|
8,390,928
|
|
|
Norfolk
Southern Corp.
|
|
|
35,600
|
|
|
|
-
|
|
|
|
88,000
|
|
|
|
123,600
|
|
|
|
2,133,864
|
|
|
|
-
|
|
|
|
5,274,720
|
|
|
|
7,408,584
|
|
|
Nucor
Corp.
|
|
|
-
|
|
|
|
56,000
|
|
|
|
-
|
|
|
|
56,000
|
|
|
|
-
|
|
|
|
2,268,560
|
|
|
|
-
|
|
|
|
2,268,560
|
|
|
Occidental
Petroleum Corp. (b)
|
|
|
69,200
|
|
|
|
-
|
|
|
|
173,800
|
|
|
|
243,000
|
|
|
|
3,843,368
|
|
|
|
-
|
|
|
|
9,652,852
|
|
|
|
13,496,220
|
|
|
Oracle
Corp. (a)(b)
|
|
|
-
|
|
|
|
108,100
|
|
|
|
-
|
|
|
|
108,100
|
|
|
|
-
|
|
|
|
1,977,149
|
|
|
|
-
|
|
|
|
1,977,149
|
|
|
Peabody
Energy Corp.
|
|
|
-
|
|
|
|
7,200
|
|
|
|
-
|
|
|
|
7,200
|
|
|
|
-
|
|
|
|
248,472
|
|
|
|
-
|
|
|
|
248,472
|
|
|
PepsiCo,
Inc.
|
|
|
-
|
|
|
|
13,400
|
|
|
|
-
|
|
|
|
13,400
|
|
|
|
-
|
|
|
|
763,934
|
|
|
|
-
|
|
|
|
763,934
|
|
|
Pfizer,
Inc. (c)
|
|
|
159,700
|
|
|
|
327,200
|
|
|
|
391,300
|
|
|
|
878,200
|
|
|
|
2,828,287
|
|
|
|
5,794,712
|
|
|
|
6,929,923
|
|
|
|
15,552,922
|
|
|
Pioneer
Natural Resources Co.
|
|
|
39,400
|
|
|
|
-
|
|
|
|
96,800
|
|
|
|
136,200
|
|
|
|
1,096,502
|
|
|
|
-
|
|
|
|
2,693,944
|
|
|
|
3,790,446
|
|
|
Procter
& Gamble Co. (b)
|
|
|
29,500
|
|
|
|
92,700
|
|
|
|
72,700
|
|
|
|
194,900
|
|
|
|
1,903,930
|
|
|
|
5,982,858
|
|
|
|
4,692,058
|
|
|
|
12,578,846
|
|
|
Progress
Energy, Inc.
|
|
|
-
|
|
|
|
18,600
|
|
|
|
-
|
|
|
|
18,600
|
|
|
|
-
|
|
|
|
732,282
|
|
|
|
-
|
|
|
|
732,282
|
|
|
Public
Service Enterprise Group, Inc.
|
|
|
26,200
|
|
|
|
-
|
|
|
|
67,800
|
|
|
|
94,000
|
|
|
|
737,530
|
|
|
|
-
|
|
|
|
1,908,570
|
|
|
|
2,646,100
|
|
|
Qualcomm,
Inc. (b)
|
|
|
28,900
|
|
|
|
21,900
|
|
|
|
68,800
|
|
|
|
119,600
|
|
|
|
1,105,714
|
|
|
|
837,894
|
|
|
|
2,632,288
|
|
|
|
4,575,896
|
|
|
Regions
Financial Corp.
|
|
|
51,100
|
|
|
|
-
|
|
|
|
125,900
|
|
|
|
177,000
|
|
|
|
566,699
|
|
|
|
-
|
|
|
|
1,396,231
|
|
|
|
1,962,930
|
|
|
Reynolds
American, Inc. (c)
|
|
|
-
|
|
|
|
59,400
|
|
|
|
-
|
|
|
|
59,400
|
|
|
|
-
|
|
|
|
2,908,224
|
|
|
|
-
|
|
|
|
2,908,224
|
|
|
Salesforce.com,
Inc. (a)
|
|
|
-
|
|
|
|
13,700
|
|
|
|
-
|
|
|
|
13,700
|
|
|
|
-
|
|
|
|
424,152
|
|
|
|
-
|
|
|
|
424,152
|
|
|
Sara
Lee Corp.
|
|
|
-
|
|
|
|
69,400
|
|
|
|
-
|
|
|
|
69,400
|
|
|
|
-
|
|
|
|
775,892
|
|
|
|
-
|
|
|
|
775,892
|
|
|
Schlumberger
Ltd.
|
|
|
-
|
|
|
|
29,200
|
|
|
|
-
|
|
|
|
29,200
|
|
|
|
-
|
|
|
|
1,508,180
|
|
|
|
-
|
|
|
|
1,508,180
|
|
|
Simon
Property Group, Inc. (REIT)
|
|
|
5,300
|
|
|
|
-
|
|
|
|
13,200
|
|
|
|
18,500
|
|
|
|
355,259
|
|
|
|
-
|
|
|
|
884,796
|
|
|
|
1,240,055
|
|
|
Smith
International, Inc. (b)
|
|
|
-
|
|
|
|
48,183
|
|
|
|
-
|
|
|
|
48,183
|
|
|
|
-
|
|
|
|
1,661,350
|
|
|
|
-
|
|
|
|
1,661,350
|
|
|
Southern
Co.
|
|
|
-
|
|
|
|
124,100
|
|
|
|
-
|
|
|
|
124,100
|
|
|
|
-
|
|
|
|
4,261,594
|
|
|
|
-
|
|
|
|
4,261,594
|
|
|
Spectra
Energy Corp. (b)
|
|
|
-
|
|
|
|
166,500
|
|
|
|
-
|
|
|
|
166,500
|
|
|
|
-
|
|
|
|
3,218,445
|
|
|
|
-
|
|
|
|
3,218,445
|
|
|
Sprint
Nextel Corp.
|
|
|
-
|
|
|
|
146,100
|
|
|
|
-
|
|
|
|
146,100
|
|
|
|
-
|
|
|
|
457,293
|
|
|
|
-
|
|
|
|
457,293
|
|
|
SunTrust
Banks, Inc.
|
|
|
-
|
|
|
|
24,400
|
|
|
|
-
|
|
|
|
24,400
|
|
|
|
-
|
|
|
|
979,416
|
|
|
|
-
|
|
|
|
979,416
|
|
|
SYSCO
Corp. (b)
|
|
|
-
|
|
|
|
39,100
|
|
|
|
-
|
|
|
|
39,100
|
|
|
|
-
|
|
|
|
1,024,420
|
|
|
|
-
|
|
|
|
1,024,420
|
|
|
T.
Rowe Price Group, Inc.
|
|
|
15,200
|
|
|
|
-
|
|
|
|
38,300
|
|
|
|
53,500
|
|
|
|
601,008
|
|
|
|
-
|
|
|
|
1,514,382
|
|
|
|
2,115,390
|
|
|
Target
Corp.
|
|
|
25,600
|
|
|
|
-
|
|
|
|
62,800
|
|
|
|
88,400
|
|
|
|
1,027,072
|
|
|
|
-
|
|
|
|
2,519,536
|
|
|
|
3,546,608
|
|
|
|
|
Shares
Held
|
|
|
Value
|
|
|
Common
Stocks
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
|
|
Texas
Instruments, Inc. (b)
|
|
|
-
|
|
|
|
25,500
|
|
|
|
-
|
|
|
|
25,500
|
|
|
$
|
-
|
|
|
$
|
498,780
|
|
|
$
|
-
|
|
|
$
|
498,780
|
|
|
Thermo
Fisher Scientific, Inc. (a)
|
|
|
-
|
|
|
|
14,400
|
|
|
|
-
|
|
|
|
14,400
|
|
|
|
-
|
|
|
|
584,640
|
|
|
|
-
|
|
|
|
584,640
|
|
|
Torchmark
Corp.
|
|
|
8,300
|
|
|
|
-
|
|
|
|
20,400
|
|
|
|
28,700
|
|
|
|
346,691
|
|
|
|
-
|
|
|
|
852,108
|
|
|
|
1,198,799
|
|
|
Transocean,
Inc. (a)
|
|
|
-
|
|
|
|
6,607
|
|
|
|
-
|
|
|
|
6,607
|
|
|
|
-
|
|
|
|
543,954
|
|
|
|
-
|
|
|
|
543,954
|
|
|
Travelers
Cos., Inc. (The) (b)
|
|
|
-
|
|
|
|
20,700
|
|
|
|
-
|
|
|
|
20,700
|
|
|
|
-
|
|
|
|
880,785
|
|
|
|
-
|
|
|
|
880,785
|
|
|
Tyco
Electronics Ltd.
|
|
|
-
|
|
|
|
16,675
|
|
|
|
-
|
|
|
|
16,675
|
|
|
|
-
|
|
|
|
324,162
|
|
|
|
-
|
|
|
|
324,162
|
|
|
U.S.
Bancorp (b)
|
|
|
32,900
|
|
|
|
147,100
|
|
|
|
82,200
|
|
|
|
262,200
|
|
|
|
980,749
|
|
|
|
4,385,051
|
|
|
|
2,450,382
|
|
|
|
7,816,182
|
|
|
UMB
Financial Corp.
|
|
|
16,700
|
|
|
|
-
|
|
|
|
41,900
|
|
|
|
58,600
|
|
|
|
757,011
|
|
|
|
-
|
|
|
|
1,899,327
|
|
|
|
2,656,338
|
|
|
United
Parcel Service, Inc., Class B (b)
|
|
|
-
|
|
|
|
48,400
|
|
|
|
-
|
|
|
|
48,400
|
|
|
|
-
|
|
|
|
2,554,552
|
|
|
|
-
|
|
|
|
2,554,552
|
|
|
Verizon
Communications, Inc. (b)
|
|
|
-
|
|
|
|
80,500
|
|
|
|
-
|
|
|
|
80,500
|
|
|
|
-
|
|
|
|
2,388,435
|
|
|
|
-
|
|
|
|
2,388,435
|
|
|
VF
Corp.
|
|
|
-
|
|
|
|
52,700
|
|
|
|
-
|
|
|
|
52,700
|
|
|
|
-
|
|
|
|
2,903,770
|
|
|
|
-
|
|
|
|
2,903,770
|
|
|
Wal-Mart
Stores, Inc.
|
|
|
24,300
|
|
|
|
27,000
|
|
|
|
60,100
|
|
|
|
111,400
|
|
|
|
1,356,183
|
|
|
|
1,506,870
|
|
|
|
3,354,181
|
|
|
|
6,217,234
|
|
|
Walt
Disney Co. (The)
|
|
|
53,300
|
|
|
|
-
|
|
|
|
133,800
|
|
|
|
187,100
|
|
|
|
1,380,470
|
|
|
|
-
|
|
|
|
3,465,420
|
|
|
|
4,845,890
|
|
|
Waste
Management, Inc.
|
|
|
-
|
|
|
|
30,700
|
|
|
|
-
|
|
|
|
30,700
|
|
|
|
-
|
|
|
|
958,761
|
|
|
|
-
|
|
|
|
958,761
|
|
|
Wells
Fargo & Co.
|
|
|
59,900
|
|
|
|
124,800
|
|
|
|
150,700
|
|
|
|
335,400
|
|
|
|
2,039,595
|
|
|
|
4,249,440
|
|
|
|
5,131,335
|
|
|
|
11,420,370
|
|
|
Weyerhauser
Co.
|
|
|
23,300
|
|
|
|
51,800
|
|
|
|
57,300
|
|
|
|
132,400
|
|
|
|
890,526
|
|
|
|
1,979,796
|
|
|
|
2,190,006
|
|
|
|
5,060,328
|
|
|
Wyeth
|
|
|
-
|
|
|
|
27,000
|
|
|
|
-
|
|
|
|
27,000
|
|
|
|
-
|
|
|
|
868,860
|
|
|
|
-
|
|
|
|
868,860
|
|
|
Yahoo!
Inc. (a)
|
|
|
-
|
|
|
|
7,900
|
|
|
|
-
|
|
|
|
7,900
|
|
|
|
-
|
|
|
|
101,278
|
|
|
|
-
|
|
|
|
101,278
|
|
|
Yum!
Brands, Inc. (b)
|
|
|
43,000
|
|
|
|
-
|
|
|
|
109,000
|
|
|
|
152,000
|
|
|
|
1,247,430
|
|
|
|
-
|
|
|
|
3,162,090
|
|
|
|
4,409,520
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
104,618,223
|
|
|
|
218,354,227
|
|
|
|
260,315,087
|
|
|
|
583,287,537
|
|
|
Total
Common Stocks-89.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
201,832,119
|
|
|
|
426,771,581
|
|
|
|
503,158,717
|
|
|
|
1,131,762,417
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange-Traded
Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United
States-4.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
Select Sector SPDR Fund
|
|
|
93,400
|
|
|
|
-
|
|
|
|
334,400
|
|
|
|
427,800
|
|
|
|
1,450,502
|
|
|
|
-
|
|
|
|
5,193,232
|
|
|
|
6,643,734
|
|
|
iShares
Dow Jones Euro Stoxx Banks
|
|
|
78,700
|
|
|
|
-
|
|
|
|
104,800
|
|
|
|
183,500
|
|
|
|
1,848,661
|
|
|
|
-
|
|
|
|
2,461,749
|
|
|
|
4,310,410
|
|
|
iShares
Dow Jones Stoxx 600 Banks
|
|
|
106,400
|
|
|
|
-
|
|
|
|
280,000
|
|
|
|
386,400
|
|
|
|
2,708,176
|
|
|
|
-
|
|
|
|
7,126,780
|
|
|
|
9,834,956
|
|
|
iShares
Dow Jones U.S. Real Estate Index Fund
|
|
|
37,900
|
|
|
|
-
|
|
|
|
94,200
|
|
|
|
132,100
|
|
|
|
1,608,476
|
|
|
|
-
|
|
|
|
3,997,848
|
|
|
|
5,606,324
|
|
|
KBW
Insurance
|
|
|
65,200
|
|
|
|
-
|
|
|
|
71,900
|
|
|
|
137,100
|
|
|
|
1,615,656
|
|
|
|
-
|
|
|
|
1,781,682
|
|
|
|
3,397,338
|
|
|
Lyxor
Dow Jones Stoxx 600 Financial Services
|
|
|
30,700
|
|
|
|
-
|
|
|
|
30,500
|
|
|
|
61,200
|
|
|
|
885,874
|
|
|
|
-
|
|
|
|
880,103
|
|
|
|
1,765,977
|
|
|
Lyxor
Dow Jones Stoxx 600 Insurance
|
|
|
25,500
|
|
|
|
-
|
|
|
|
-
|
|
|
|
25,500
|
|
|
|
422,839
|
|
|
|
-
|
|
|
|
|
|
|
|
422,839
|
|
|
PowerShares
Dynamic Insurance Portfolio
|
|
|
-
|
|
|
|
-
|
|
|
|
52,900
|
|
|
|
52,900
|
|
|
|
-
|
|
|
|
-
|
|
|
|
697,222
|
|
|
|
697,222
|
|
|
SPDR
Trust Series 1
|
|
|
73,000
|
|
|
|
-
|
|
|
|
180,000
|
|
|
|
253,000
|
|
|
|
7,068,590
|
|
|
|
-
|
|
|
|
17,429,400
|
|
|
|
24,497,990
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,608,774
|
|
|
|
-
|
|
|
|
39,568,016
|
|
|
|
57,176,790
|
|
|
Total Long-Term Investments
(Cost-$1,672,045,623)-93.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
219,440,893
|
|
|
|
426,771,581
|
|
|
|
542,726,733
|
|
|
|
1,188,939,207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-Term
Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money
Market Funds-3.4%
|
|
Beneficial
Interest/Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock
Liquidity Series, LLC, Money Market Series, 1.57%
(e)(f)(g)
|
|
1,130,500
|
|
|
|
-
|
|
|
|
2,812,950
|
|
|
|
3,943,450
|
|
|
|
1,130,500
|
|
|
|
-
|
|
|
|
2,812,950
|
|
|
|
3,943,450
|
|
|
Fidelity
Institutional Money Market Prime Portfolio, 2.44% (e)
|
|
|
3,384,302
|
|
|
|
35,550,390
|
|
|
|
823,521
|
|
|
|
39,758,213
|
|
|
|
3,384,302
|
|
|
|
35,550,390
|
|
|
|
823,521
|
|
|
|
39,758,213
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,514,802
|
|
|
|
35,550,390
|
|
|
|
3,636,471
|
|
|
|
43,701,663
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Government and Agency Discount Notes-2.8%
|
|
Principal
Amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
National Mortgage Association Discount Note, 2.08%, 11/04/08
(h)
|
|
|
9,100,000
|
|
|
|
-
|
|
|
|
26,700,000
|
|
|
|
35,800,000
|
|
|
|
9,098,430
|
|
|
|
-
|
|
|
|
26,695,394
|
|
|
|
35,793,824
|
|
|
Total Short-Term Securities
(Cost-$79,495,487)-6.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,613,232
|
|
|
|
35,550,390
|
|
|
|
30,331,865
|
|
|
|
79,495,487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contracts
|
|
|
Value
|
|
|
Options
Purchased
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
|
|
Call
Options Purchased-0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American
Electric Power Co., Inc., strike price $45, expires
11/21/08
|
|
|
26,000
|
|
|
|
-
|
|
|
|
64,000
|
|
|
|
90,000
|
|
|
$
|
460
|
|
|
$
|
-
|
|
|
$
|
1,133
|
|
|
$
|
1,593
|
|
|
Archer
Daniels Midland Co., strike price $45, expires 12/22/08
|
|
|
439
|
|
|
|
-
|
|
|
|
1,471
|
|
|
|
1,910
|
|
|
|
3,293
|
|
|
|
-
|
|
|
|
11,032
|
|
|
|
14,325
|
|
|
BHP
Billiton Ltd. (ADR), strike price $95, expires 11/24/08
|
|
|
70
|
|
|
|
-
|
|
|
|
173
|
|
|
|
243
|
|
|
|
350
|
|
|
|
-
|
|
|
|
865
|
|
|
|
1,215
|
|
|
Citigroup,
Inc., strike price $28.25, expires 11/03/08
|
|
|
145
|
|
|
|
-
|
|
|
|
352
|
|
|
|
497
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
CVS
Caremark Corp., strike price $42.50, expires 11/24/08
|
|
|
340
|
|
|
|
-
|
|
|
|
-
|
|
|
|
340
|
|
|
|
2,550
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,550
|
|
|
Dime
Community Bancshares, strike price $20, expires 11/07/08
|
|
|
70,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
70,000
|
|
|
|
553
|
|
|
|
-
|
|
|
|
-
|
|
|
|
553
|
|
|
EOG
Resources, Inc., strike price $145, expires 11/21/08
|
|
|
7,000
|
|
|
|
-
|
|
|
|
18,000
|
|
|
|
25,000
|
|
|
|
155
|
|
|
|
-
|
|
|
|
400
|
|
|
|
555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contracts
|
|
|
Value
|
|
|
Options
Purchased
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC into BOE)
|
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
|
|
Financial
Select Sector SPDR Fund, strike price $27, expires
12/22/08
|
|
|
238
|
|
|
|
-
|
|
|
|
754
|
|
|
|
992
|
|
|
$
|
595
|
|
|
$
|
-
|
|
|
$
|
1,885
|
|
|
$
|
2,480
|
|
|
Google,
Inc., strike price $640, expires 12/22/08
|
|
|
10
|
|
|
|
-
|
|
|
|
25
|
|
|
|
35
|
|
|
|
150
|
|
|
|
-
|
|
|
|
375
|
|
|
|
525
|
|
|
Legal
& General Group Plc, strike price 1.14 GBP, expires
11/04/08
|
|
|
745,200
|
|
|
|
-
|
|
|
|
-
|
|
|
|
745,200
|
|
|
|
12
|
|
|
|
-
|
|
|
|
-
|
|
|
|
12
|
|
|
Oriflame
Cosmetics S.A., strike price 410 SEK, expires 11/07/08
|
|
|
18,476
|
|
|
|
-
|
|
|
|
44,118
|
|
|
|
62,594
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Research
In Motion Ltd., strike price $160, expires 12/22/08
|
|
|
55
|
|
|
|
-
|
|
|
|
150
|
|
|
|
205
|
|
|
|
220
|
|
|
|
-
|
|
|
|
600
|
|
|
|
820
|
|
|
TELUS
Corp., strike price 48 CAD, expires 11/24/08
|
|
|
340
|
|
|
|
-
|
|
|
|
850
|
|
|
|
1,190
|
|
|
|
11,989
|
|
|
|
-
|
|
|
|
29,972
|
|
|
|
41,961
|
|
|
Ultra
Petroleum Corp., strike price $115, expires 12/22/08
|
|
|
58
|
|
|
|
-
|
|
|
|
142
|
|
|
|
200
|
|
|
|
726
|
|
|
|
-
|
|
|
|
1,776
|
|
|
|
2,502
|
|
|
Yara
International ASA, strike price 330 NOK, expires 11/04/08
|
|
|
14,500
|
|
|
|
-
|
|
|
|
83,400
|
|
|
|
97,900
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Total Options Purchased
(Cost-$832,233)-0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,053
|
|
|
|
-
|
|
|
|
48,038
|
|
|
|
69,091
|
|
|
Total Investments Before Options Written
(Cost-$1,752,373,343*)-100.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
233,075,178
|
|
|
|
462,321,971
|
|
|
|
573,106,636
|
|
|
|
1,268,503,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contracts
|
|
|
Value
|
|
|
Options
Written
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
|
|
Call
Options Written-(1.5)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACE
Ltd., strike price $55, expires 11/24/08
|
|
|
(110
|
)
|
|
|
-
|
|
|
|
(275
|
)
|
|
|
(385
|
)
|
|
$
|
(61,050
|
)
|
|
$
|
-
|
|
|
$
|
(152,625
|
)
|
|
$
|
(213,675
|
)
|
|
Adidas
AG, strike price 44 EUR, expires 12/19/08
|
|
|
(80
|
)
|
|
|
-
|
|
|
|
(200
|
)
|
|
|
(280
|
)
|
|
|
(1,630
|
)
|
|
|
-
|
|
|
|
(4,074
|
)
|
|
|
(5,704
|
)
|
|
Adidas
AG, strike price 47.48 EUR, expires 11/04/08
|
|
|
(18,000
|
)
|
|
|
-
|
|
|
|
(44,800
|
)
|
|
|
(62,800
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
AEM
S.p.A., strike price 2.50 EUR, expires 11/04/08
|
|
|
(235,000
|
)
|
|
|
-
|
|
|
|
(576,000
|
)
|
|
|
(811,000
|
)
|
|
|
(3
|
)
|
|
|
-
|
|
|
|
(7
|
)
|
|
|
(10
|
)
|
|
Alcon,
Inc., strike price $100, expires 11/24/08
|
|
|
(25
|
)
|
|
|
-
|
|
|
|
(60
|
)
|
|
|
(85
|
)
|
|
|
(17,543
|
)
|
|
|
-
|
|
|
|
(42,102
|
)
|
|
|
(59,645
|
)
|
|
Alcon,
Inc., strike price $165, expires 11/24/08
|
|
|
(75
|
)
|
|
|
-
|
|
|
|
(190
|
)
|
|
|
(265
|
)
|
|
|
(1,125
|
)
|
|
|
-
|
|
|
|
(2,850
|
)
|
|
|
(3,975
|
)
|
|
Allstate
Corp. (The), strike price $47.50, expires 01/19/09
|
|
|
(60
|
)
|
|
|
-
|
|
|
|
(140
|
)
|
|
|
(200
|
)
|
|
|
(600
|
)
|
|
|
-
|
|
|
|
(1,400
|
)
|
|
|
(2,000
|
)
|
|
Alstom
S.A., strike price 82 EUR, expires 11/06/08
|
|
|
(13,000
|
)
|
|
|
-
|
|
|
|
(32,000
|
)
|
|
|
(45,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Altera
Corp., strike price $23, expires 11/07/08
|
|
|
(75
|
)
|
|
|
-
|
|
|
|
(175
|
)
|
|
|
(250
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Altera
Corp., strike price $23.41, expires 11/18/08
|
|
|
(32,100
|
)
|
|
|
-
|
|
|
|
(80,400
|
)
|
|
|
(112,500
|
)
|
|
|
(3
|
)
|
|
|
-
|
|
|
|
(8
|
)
|
|
|
(11
|
)
|
|
Altria
Group, Inc., strike price $22.25, expires 11/21/08
|
|
|
(52,000
|
)
|
|
|
-
|
|
|
|
(128,000
|
)
|
|
|
(180,000
|
)
|
|
|
(3,536
|
)
|
|
|
-
|
|
|
|
(8,704
|
)
|
|
|
(12,240
|
)
|
|
Altria
Group, Inc., strike price $22.50, expires 12/20/08
|
|
|
(195
|
)
|
|
|
-
|
|
|
|
(485
|
)
|
|
|
(680
|
)
|
|
|
(5,948
|
)
|
|
|
-
|
|
|
|
(14,793
|
)
|
|
|
(20,741
|
)
|
|
American
Electric Power Co., Inc., strike price $45, expires
11/24/08
|
|
|
(130
|
)
|
|
|
-
|
|
|
|
(320
|
)
|
|
|
(450
|
)
|
|
|
(1,300
|
)
|
|
|
-
|
|
|
|
(3,200
|
)
|
|
|
(4,500
|
)
|
|
American
Electric Power Co., Inc., strike price $47.50, expires
11/24/08
|
|
|
(130
|
)
|
|
|
-
|
|
|
|
(320
|
)
|
|
|
(450
|
)
|
|
|
(1,300
|
)
|
|
|
-
|
|
|
|
(3,200
|
)
|
|
|
(4,500
|
)
|
|
Amgen,
Inc., strike price $65, expires 01/19/09
|
|
|
(200
|
)
|
|
|
-
|
|
|
|
(500
|
)
|
|
|
(700
|
)
|
|
|
(57,400
|
)
|
|
|
-
|
|
|
|
(143,500
|
)
|
|
|
(200,900
|
)
|
|
Amgen,
Inc., strike price $65, expires 12/22/08
|
|
|
(165
|
)
|
|
|
-
|
|
|
|
(385
|
)
|
|
|
(550
|
)
|
|
|
(32,340
|
)
|
|
|
-
|
|
|
|
(75,460
|
)
|
|
|
(107,800
|
)
|
|
Aon
Corp., strike price $47.75, expires 11/07/08
|
|
|
(120
|
)
|
|
|
-
|
|
|
|
(240
|
)
|
|
|
(360
|
)
|
|
|
(56
|
)
|
|
|
-
|
|
|
|
(113
|
)
|
|
|
(169
|
)
|
|
Aon
Corp., strike price $51, expires 11/21/08
|
|
|
(10,000
|
)
|
|
|
-
|
|
|
|
(26,000
|
)
|
|
|
(36,000
|
)
|
|
|
(189
|
)
|
|
|
-
|
|
|
|
(491
|
)
|
|
|
(680
|
)
|
|
Apple,
Inc., strike price $200, expires 01/19/09
|
|
|
(47
|
)
|
|
|
-
|
|
|
|
(118
|
)
|
|
|
(165
|
)
|
|
|
(517
|
)
|
|
|
-
|
|
|
|
(1,298
|
)
|
|
|
(1,815
|
)
|
|
ArcelorMittal,
strike price $110, expires 12/22/08
|
|
|
(65
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(65
|
)
|
|
|
(975
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(975
|
)
|
|
ArcelorMittal,
strike price $95, expires 12/20/08
|
|
|
(144
|
)
|
|
|
-
|
|
|
|
(426
|
)
|
|
|
(570
|
)
|
|
|
(2,880
|
)
|
|
|
-
|
|
|
|
(8,520
|
)
|
|
|
(11,400
|
)
|
|
Arch
Capital Group Ltd., strike price $70, expires 12/22/08
|
|
|
(40
|
)
|
|
|
-
|
|
|
|
(100
|
)
|
|
|
(140
|
)
|
|
|
(17,600
|
)
|
|
|
-
|
|
|
|
(44,000
|
)
|
|
|
(61,600
|
)
|
|
Archer
Daniels Midland Co., strike price $46, expires 11/03/08
|
|
|
(26,900
|
)
|
|
|
-
|
|
|
|
(92,100
|
)
|
|
|
(119,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
ASM
Pacific Technology Ltd., strike price 67.32 HKD, expires
11/05/08
|
|
|
(213,400
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(213,400
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Assicurazioni
Generali S.p.A., strike price 22.04 EUR, expires 12/09/08
|
|
|
(5,000
|
)
|
|
|
-
|
|
|
|
(10,000
|
)
|
|
|
(15,000
|
)
|
|
|
(2,768
|
)
|
|
|
-
|
|
|
|
(5,537
|
)
|
|
|
(8,305
|
)
|
|
AstraZeneca
Plc, strike price 24.50 GBP, expires 12/02/08
|
|
|
(16,200
|
)
|
|
|
-
|
|
|
|
(39,000
|
)
|
|
|
(55,200
|
)
|
|
|
(49,610
|
)
|
|
|
-
|
|
|
|
(119,432
|
)
|
|
|
(169,042
|
)
|
|
AvalonBay
Communities, Inc. (REIT), strike price $105, expires
11/11/08
|
|
|
(30
|
)
|
|
|
-
|
|
|
|
(74
|
)
|
|
|
(104
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
AvalonBay
Communities, Inc. (REIT), strike price $110, expires
01/19/09
|
|
|
(15
|
)
|
|
|
-
|
|
|
|
(35
|
)
|
|
|
(50
|
)
|
|
|
(1,050
|
)
|
|
|
-
|
|
|
|
(2,450
|
)
|
|
|
(3,500
|
)
|
|
AXA
S.A., strike price 26 EUR, expires 11/21/08
|
|
|
(100
|
)
|
|
|
-
|
|
|
|
(230
|
)
|
|
|
(330
|
)
|
|
|
(1,020
|
)
|
|
|
-
|
|
|
|
(2,345
|
)
|
|
|
(3,365
|
)
|
|
Banco
Bradesco S.A. (ADR), strike price $15, expires 01/19/09
|
|
|
(30
|
)
|
|
|
-
|
|
|
|
(70
|
)
|
|
|
(100
|
)
|
|
|
(3,675
|
)
|
|
|
-
|
|
|
|
(8,575
|
)
|
|
|
(12,250
|
)
|
|
Banco
Bradesco S.A. (ADR), strike price $22.50, expires 12/22/08
|
|
|
(70
|
)
|
|
|
-
|
|
|
|
(180
|
)
|
|
|
(250
|
)
|
|
|
(350
|
)
|
|
|
-
|
|
|
|
(900
|
)
|
|
|
(1,250
|
)
|
|
Banco
Itau Holding Financeira S.A. (ADR), strike price $11, expires
11/10/08
|
|
|
(79
|
)
|
|
|
-
|
|
|
|
(188
|
)
|
|
|
(267
|
)
|
|
|
(8,604
|
)
|
|
|
-
|
|
|
|
(20,475
|
)
|
|
|
(29,079
|
)
|
|
Banco
Itau Holding Financeira S.A. (ADR), strike price $22.50, expires
12/22/08
|
|
|
(70
|
)
|
|
|
-
|
|
|
|
(180
|
)
|
|
|
(250
|
)
|
|
|
(700
|
)
|
|
|
-
|
|
|
|
(1,800
|
)
|
|
|
(2,500
|
)
|
|
|
|
Contracts
|
|
|
Value
|
|
|
Options
Written
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
|
|
Banco
Santander S.A., strike price 12.41 EUR, expires 11/07/08
|
|
|
(30,000
|
)
|
|
|
-
|
|
|
|
(74,000
|
)
|
|
|
(104,000
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
Bank
of America Corp., strike price $37.50, expires 11/10/08
|
|
|
(7,600
|
)
|
|
|
-
|
|
|
|
(19,000
|
)
|
|
|
(26,600
|
)
|
|
|
(3
|
)
|
|
|
-
|
|
|
|
(8
|
)
|
|
|
(11
|
)
|
|
Bank
of America Corp., strike price $40, expires 11/24/08
|
|
|
(170
|
)
|
|
|
-
|
|
|
|
(430
|
)
|
|
|
(600
|
)
|
|
|
(425
|
)
|
|
|
-
|
|
|
|
(1,075
|
)
|
|
|
(1,500
|
)
|
|
Barrick
Gold Corp., strike price $51, expires 11/21/08
|
|
|
(25,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(25,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Barrick
Gold Corp., strike price $52, expires 11/03/08
|
|
|
(250
|
)
|
|
|
-
|
|
|
|
(150
|
)
|
|
|
(400
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Baxter
International, Inc., strike price $65, expires 11/22/08
|
|
|
(100
|
)
|
|
|
-
|
|
|
|
(250
|
)
|
|
|
(350
|
)
|
|
|
(8,500
|
)
|
|
|
-
|
|
|
|
(21,250
|
)
|
|
|
(29,750
|
)
|
|
Baxter
International, Inc., strike price $67.50, expires 11/24/08
|
|
|
(100
|
)
|
|
|
-
|
|
|
|
(250
|
)
|
|
|
(350
|
)
|
|
|
(3,500
|
)
|
|
|
-
|
|
|
|
(8,750
|
)
|
|
|
(12,250
|
)
|
|
Baxter
International, Inc., strike price $70, expires 11/24/08
|
|
|
(50
|
)
|
|
|
-
|
|
|
|
(125
|
)
|
|
|
(175
|
)
|
|
|
(625
|
)
|
|
|
-
|
|
|
|
(1,562
|
)
|
|
|
(2,187
|
)
|
|
BB&T
Corp., strike price $35, expires 12/22/08
|
|
|
(160
|
)
|
|
|
-
|
|
|
|
(385
|
)
|
|
|
(545
|
)
|
|
|
(61,600
|
)
|
|
|
-
|
|
|
|
(148,225
|
)
|
|
|
(209,825
|
)
|
|
BB&T
Corp., strike price $45, expires 11/24/08
|
|
|
(50
|
)
|
|
|
-
|
|
|
|
(100
|
)
|
|
|
(150
|
)
|
|
|
(500
|
)
|
|
|
-
|
|
|
|
(1,000
|
)
|
|
|
(1,500
|
)
|
|
BB&T
Corp., strike price $45, expires 12/22/08
|
|
|
(100
|
)
|
|
|
-
|
|
|
|
(260
|
)
|
|
|
(360
|
)
|
|
|
(2,750
|
)
|
|
|
-
|
|
|
|
(7,150
|
)
|
|
|
(9,900
|
)
|
|
Becton
Dickinson & Co., strike price $75, expires 12/22/08
|
|
|
(50
|
)
|
|
|
-
|
|
|
|
(90
|
)
|
|
|
(140
|
)
|
|
|
(9,250
|
)
|
|
|
-
|
|
|
|
(16,650
|
)
|
|
|
(25,900
|
)
|
|
Becton
Dickinson & Co., strike price $85, expires 12/22/08
|
|
|
(145
|
)
|
|
|
-
|
|
|
|
(355
|
)
|
|
|
(500
|
)
|
|
|
(3,988
|
)
|
|
|
-
|
|
|
|
(9,763
|
)
|
|
|
(13,751
|
)
|
|
Becton
Dickinson & Co., strike price $90.05, expires 11/21/08
|
|
|
(11,500
|
)
|
|
|
-
|
|
|
|
(32,000
|
)
|
|
|
(43,500
|
)
|
|
|
(49
|
)
|
|
|
-
|
|
|
|
(138
|
)
|
|
|
(187
|
)
|
|
Beiersdorf
AG, strike price 43.04 EUR, expires 11/11/08
|
|
|
(8,500
|
)
|
|
|
-
|
|
|
|
(21,200
|
)
|
|
|
(29,700
|
)
|
|
|
(10,277
|
)
|
|
|
-
|
|
|
|
(25,633
|
)
|
|
|
(35,910
|
)
|
|
Belgacom
S.A., strike price 27.24 EUR, expires 12/02/08
|
|
|
(15,000
|
)
|
|
|
-
|
|
|
|
(35,000
|
)
|
|
|
(50,000
|
)
|
|
|
(18,520
|
)
|
|
|
-
|
|
|
|
(43,212
|
)
|
|
|
(61,732
|
)
|
|
BHP
Billiton Ltd. (ADR), strike price $47.18, expires 12/15/08
|
|
|
(1,750
|
)
|
|
|
-
|
|
|
|
(4,250
|
)
|
|
|
(6,000
|
)
|
|
|
(2,263
|
)
|
|
|
-
|
|
|
|
(5,496
|
)
|
|
|
(7,759
|
)
|
|
BNP
Paribas, strike price 69 EUR, expires 11/07/08
|
|
|
(3,100
|
)
|
|
|
-
|
|
|
|
(7,700
|
)
|
|
|
(10,800
|
)
|
|
|
(12
|
)
|
|
|
-
|
|
|
|
(30
|
)
|
|
|
(42
|
)
|
|
Bombardier,
Inc., Class B, strike price 9 CAD, expires 01/19/09
|
|
|
(750
|
)
|
|
|
-
|
|
|
|
(1,950
|
)
|
|
|
(2,700
|
)
|
|
|
(4,045
|
)
|
|
|
-
|
|
|
|
(10,516
|
)
|
|
|
(14,561
|
)
|
|
Bombardier,
Inc., Class B, strike price 9 CAD, expires 11/23/08
|
|
|
(500
|
)
|
|
|
-
|
|
|
|
(1,300
|
)
|
|
|
(1,800
|
)
|
|
|
(4,148
|
)
|
|
|
-
|
|
|
|
(10,786
|
)
|
|
|
(14,934
|
)
|
|
Broadcom
Corp., strike price $30, expires 11/24/08
|
|
|
(330
|
)
|
|
|
-
|
|
|
|
(825
|
)
|
|
|
(1,155
|
)
|
|
|
(1,650
|
)
|
|
|
-
|
|
|
|
(4,125
|
)
|
|
|
(5,775
|
)
|
|
Campbell
Soup Co., strike price $40, expires 11/24/08
|
|
|
(322
|
)
|
|
|
-
|
|
|
|
(790
|
)
|
|
|
(1,112
|
)
|
|
|
(15,295
|
)
|
|
|
-
|
|
|
|
(37,525
|
)
|
|
|
(52,820
|
)
|
|
Canadian
National Railway Co., strike price $51.59, expires
11/21/08
|
|
|
(17,000
|
)
|
|
|
-
|
|
|
|
(43,000
|
)
|
|
|
(60,000
|
)
|
|
|
(1,639
|
)
|
|
|
-
|
|
|
|
(4,145
|
)
|
|
|
(5,784
|
)
|
|
Canon,
Inc., strike price 5,900 JPY, expires 11/05/08
|
|
|
(17,800
|
)
|
|
|
-
|
|
|
|
(43,800
|
)
|
|
|
(61,600
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
CapitaLand
Ltd., strike price 4.68 SGD, expires 11/12/08
|
|
|
-
|
|
|
|
-
|
|
|
|
(242,000
|
)
|
|
|
(242,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(2
|
)
|
|
|
(2
|
)
|
|
Charles
Schwab Corp. (The), strike price $25, expires 12/22/08
|
|
|
(55
|
)
|
|
|
-
|
|
|
|
(145
|
)
|
|
|
(200
|
)
|
|
|
(1,375
|
)
|
|
|
-
|
|
|
|
(3,625
|
)
|
|
|
(5,000
|
)
|
|
Charles
Schwab Corp. (The), strike price $25.50, expires 11/10/08
|
|
|
(12,200
|
)
|
|
|
-
|
|
|
|
(30,600
|
)
|
|
|
(42,800
|
)
|
|
|
(12
|
)
|
|
|
-
|
|
|
|
(31
|
)
|
|
|
(43
|
)
|
|
Chesapeake
Energy Corp., strike price $55.05, expires 12/19/08
|
|
|
(30,000
|
)
|
|
|
-
|
|
|
|
(77,500
|
)
|
|
|
(107,500
|
)
|
|
|
(4,281
|
)
|
|
|
-
|
|
|
|
(11,059
|
)
|
|
|
(15,340
|
)
|
|
Chesapeake
Energy Corp., strike price $57, expires 11/03/08
|
|
|
(170
|
)
|
|
|
-
|
|
|
|
(400
|
)
|
|
|
(570
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Chevron
Corp., strike price $80, expires 01/19/09
|
|
|
(100
|
)
|
|
|
-
|
|
|
|
(250
|
)
|
|
|
(350
|
)
|
|
|
(52,000
|
)
|
|
|
-
|
|
|
|
(130,000
|
)
|
|
|
(182,000
|
)
|
|
China
Construction Bank Corp., strike price 7.11 HKD, expires
11/05/08
|
|
|
(1,128,000
|
)
|
|
|
-
|
|
|
|
(2,777,000
|
)
|
|
|
(3,905,000
|
)
|
|
|
(2
|
)
|
|
|
-
|
|
|
|
(4
|
)
|
|
|
(6
|
)
|
|
China
Mobile Ltd., strike price 110.61 HKD, expires 11/05/08
|
|
|
(36,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(36,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
China
Mobile Ltd., strike price 144.82 HKD, expires 11/05/08
|
|
|
-
|
|
|
|
-
|
|
|
|
(200,000
|
)
|
|
|
(200,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
China
Mobile Ltd., strike price 98.16 HKD, expires 11/05/08
|
|
|
(29,000
|
)
|
|
|
-
|
|
|
|
(162,000
|
)
|
|
|
(191,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Cia
Energetica de Minas Gerais (ADR), strike price $25, expires
12/22/08
|
|
|
(160
|
)
|
|
|
-
|
|
|
|
(400
|
)
|
|
|
(560
|
)
|
|
|
(5,600
|
)
|
|
|
-
|
|
|
|
(14,000
|
)
|
|
|
(19,600
|
)
|
|
Cisco
Systems, Inc., strike price $29.50, expires 11/07/08
|
|
|
(180
|
)
|
|
|
-
|
|
|
|
(370
|
)
|
|
|
(550
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Citigroup,
Inc., strike price $21.50, expires 11/10/08
|
|
|
(19,300
|
)
|
|
|
-
|
|
|
|
(48,300
|
)
|
|
|
(67,600
|
)
|
|
|
(17
|
)
|
|
|
-
|
|
|
|
(43
|
)
|
|
|
(60
|
)
|
|
Citigroup,
Inc., strike price $25, expires 01/19/09
|
|
|
(70
|
)
|
|
|
-
|
|
|
|
(180
|
)
|
|
|
(250
|
)
|
|
|
(840
|
)
|
|
|
-
|
|
|
|
(2,160
|
)
|
|
|
(3,000
|
)
|
|
Citigroup,
Inc., strike price $25, expires 12/22/08
|
|
|
(320
|
)
|
|
|
-
|
|
|
|
(780
|
)
|
|
|
(1,100
|
)
|
|
|
(1,920
|
)
|
|
|
-
|
|
|
|
(4,680
|
)
|
|
|
(6,600
|
)
|
|
Citigroup,
Inc., strike price $28.50, expires 11/03/08
|
|
|
(145
|
)
|
|
|
-
|
|
|
|
(352
|
)
|
|
|
(497
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Colgate-Palmolive
Co., strike price $75, expires 11/24/08
|
|
|
(120
|
)
|
|
|
-
|
|
|
|
(295
|
)
|
|
|
(415
|
)
|
|
|
(1,200
|
)
|
|
|
-
|
|
|
|
(2,950
|
)
|
|
|
(4,150
|
)
|
|
Comcast
Corp., Class A, strike price $22.50, expires 01/19/09
|
|
|
(420
|
)
|
|
|
-
|
|
|
|
(1,080
|
)
|
|
|
(1,500
|
)
|
|
|
(6,300
|
)
|
|
|
-
|
|
|
|
(16,200
|
)
|
|
|
(22,500
|
)
|
|
Compagnie
Generale des Etablissements Michelin, Class B, strike price 50.09 EUR,
expires 11/13/08
|
|
|
(13,800
|
)
|
|
|
-
|
|
|
|
(34,800
|
)
|
|
|
(48,600
|
)
|
|
|
(5,091
|
)
|
|
|
-
|
|
|
|
(12,838
|
)
|
|
|
(17,929
|
)
|
|
ConocoPhillips,
strike price $60, expires 01/19/09
|
|
|
(80
|
)
|
|
|
-
|
|
|
|
(220
|
)
|
|
|
(300
|
)
|
|
|
(25,800
|
)
|
|
|
-
|
|
|
|
(70,950
|
)
|
|
|
(96,750
|
)
|
|
Covidien
Ltd., strike price $55, expires 11/24/08
|
|
|
(135
|
)
|
|
|
-
|
|
|
|
(340
|
)
|
|
|
(475
|
)
|
|
|
(1,350
|
)
|
|
|
-
|
|
|
|
(3,400
|
)
|
|
|
(4,750
|
)
|
|
|
|
Contracts
|
|
|
Value
|
|
|
Options
Written
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC into BOE)
|
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC into BOE)
|
|
|
CVS
Caremark Corp., strike price $44, expires 11/21/08
|
|
|
(34,000
|
)
|
|
|
-
|
|
|
|
(86,000
|
)
|
|
|
(120,000
|
)
|
|
$
|
(10
|
)
|
|
$
|
-
|
|
|
$
|
(26
|
)
|
|
$
|
(36
|
)
|
|
CVS
Caremark Corp., strike price $45, expires 11/24/08
|
|
|
(65
|
)
|
|
|
-
|
|
|
|
(160
|
)
|
|
|
(225
|
)
|
|
|
(325
|
)
|
|
|
-
|
|
|
|
(800
|
)
|
|
|
(1,125
|
)
|
|
De
La Rue Plc, strike price 8.90 GBP, expires 12/02/08
|
|
|
-
|
|
|
|
-
|
|
|
|
(50,000
|
)
|
|
|
(50,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(32,628
|
)
|
|
|
(32,628
|
)
|
|
De
La Rue Plc, strike price 8.90 GBP, expires 12/09/08
|
|
|
-
|
|
|
|
-
|
|
|
|
(50,000
|
)
|
|
|
(50,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(36,071
|
)
|
|
|
(36,071
|
)
|
|
De
La Rue Plc, strike price 9.69 GBP, expires 11/04/08
|
|
|
(111,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(111,000
|
)
|
|
|
(2,773
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,773
|
)
|
|
Diamond
Offshore Drilling, Inc., strike price $141, expires
11/21/08
|
|
|
(10,000
|
)
|
|
|
-
|
|
|
|
(27,000
|
)
|
|
|
(37,000
|
)
|
|
|
(24
|
)
|
|
|
-
|
|
|
|
(65
|
)
|
|
|
(89
|
)
|
|
Dime
Community Bancshares, strike price $20.52, expires
11/07/08
|
|
|
(70,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(70,000
|
)
|
|
|
(224
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(224
|
)
|
|
Dow
Chemical Co. (The), strike price $25.80, expires 12/24/08
|
|
|
(22,000
|
)
|
|
|
-
|
|
|
|
(55,000
|
)
|
|
|
(77,000
|
)
|
|
|
(60,564
|
)
|
|
|
-
|
|
|
|
(151,410
|
)
|
|
|
(211,974
|
)
|
|
Dow
Jones Euro Stoxx, strike price 2,650 EUR, expires 12/19/08
|
|
|
-
|
|
|
|
(275
|
)
|
|
|
-
|
|
|
|
(275
|
)
|
|
|
-
|
|
|
|
(577,802
|
)
|
|
|
-
|
|
|
|
(577,802
|
)
|
|
Dow
Jones Euro Stoxx, strike price 2,850 EUR, expires 12/19/08
|
|
|
-
|
|
|
|
(1,085
|
)
|
|
|
-
|
|
|
|
(1,085
|
)
|
|
|
-
|
|
|
|
(1,111,150
|
)
|
|
|
-
|
|
|
|
(1,111,150
|
)
|
|
E.ON
AG, strike price 40.82 EUR, expires 11/13/08
|
|
|
(8,000
|
)
|
|
|
-
|
|
|
|
(20,000
|
)
|
|
|
(28,000
|
)
|
|
|
(8
|
)
|
|
|
-
|
|
|
|
(21
|
)
|
|
|
(29
|
)
|
|
Eni
S.p.A., strike price 22.37 EUR, expires 11/13/08
|
|
|
(55,000
|
)
|
|
|
-
|
|
|
|
(140,000
|
)
|
|
|
(195,000
|
)
|
|
|
(8,038
|
)
|
|
|
-
|
|
|
|
(20,460
|
)
|
|
|
(28,498
|
)
|
|
EOG
Resources, Inc., strike price $150, expires 11/03/08
|
|
|
(95
|
)
|
|
|
-
|
|
|
|
(240
|
)
|
|
|
(335
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
EOG
Resources, Inc., strike price $95, expires 12/19/08
|
|
|
(10,000
|
)
|
|
|
-
|
|
|
|
(37,000
|
)
|
|
|
(47,000
|
)
|
|
|
(34,922
|
)
|
|
|
-
|
|
|
|
(129,211
|
)
|
|
|
(164,133
|
)
|
|
Esprit
Holdings Ltd., strike price 107.07 HKD, expires 11/05/08
|
|
|
(47,200
|
)
|
|
|
-
|
|
|
|
(122,300
|
)
|
|
|
(169,500
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Esprit
Holdings Ltd., strike price 99.10 HKD, expires 11/05/08
|
|
|
(18,000
|
)
|
|
|
-
|
|
|
|
(47,000
|
)
|
|
|
(65,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Exxon
Mobil Corp., strike price $85, expires 12/22/08
|
|
|
(225
|
)
|
|
|
-
|
|
|
|
(425
|
)
|
|
|
(650
|
)
|
|
|
(50,963
|
)
|
|
|
-
|
|
|
|
(96,263
|
)
|
|
|
(147,226
|
)
|
|
Financial
Select Sector SPDR Fund, strike price $26, expires
01/19/09
|
|
|
(750
|
)
|
|
|
-
|
|
|
|
(2,300
|
)
|
|
|
(3,050
|
)
|
|
|
(3,000
|
)
|
|
|
-
|
|
|
|
(9,200
|
)
|
|
|
(12,200
|
)
|
|
Financial
Select Sector SPDR Fund, strike price $27.05, expires
11/21/08
|
|
|
(23,800
|
)
|
|
|
-
|
|
|
|
(75,400
|
)
|
|
|
(99,200
|
)
|
|
|
(193
|
)
|
|
|
-
|
|
|
|
(611
|
)
|
|
|
(804
|
)
|
|
Fomento
Economico Mexicana SAB de CV, strike price $49, expires
11/07/08
|
|
|
(16,000
|
)
|
|
|
-
|
|
|
|
(40,000
|
)
|
|
|
(56,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Fomento
Economico Mexicano SAB de CV, strike price $48, expires
11/03/08
|
|
|
(419
|
)
|
|
|
-
|
|
|
|
(1,020
|
)
|
|
|
(1,439
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
Fortum
Oyj, strike price 27.86 EUR, expires 11/04/08
|
|
|
(22,300
|
)
|
|
|
-
|
|
|
|
(55,000
|
)
|
|
|
(77,300
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
Foster's
Group Ltd., strike price 5.88 AUD, expires 11/05/08
|
|
|
(183,000
|
)
|
|
|
-
|
|
|
|
(459,000
|
)
|
|
|
(642,000
|
)
|
|
|
(9,151
|
)
|
|
|
-
|
|
|
|
(22,952
|
)
|
|
|
(32,103
|
)
|
|
FPL
Group, Inc., strike price $70, expires 12/22/08
|
|
|
(95
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(95
|
)
|
|
|
(475
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(475
|
)
|
|
FPL
Group, Inc., strike price $71, expires 11/21/08
|
|
|
(10,000
|
)
|
|
|
-
|
|
|
|
(26,000
|
)
|
|
|
(36,000
|
)
|
|
|
(213
|
)
|
|
|
-
|
|
|
|
(554
|
)
|
|
|
(767
|
)
|
|
Fred
Olsen Energy ASA, strike price 334.40 NOK, expires
11/04/08
|
|
|
(4,000
|
)
|
|
|
-
|
|
|
|
(8,000
|
)
|
|
|
(12,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Fresenius
Medical Care AG & Co. KGaA, strike price 35.50 EUR, expires
11/04/08
|
|
|
(20,000
|
)
|
|
|
-
|
|
|
|
(50,000
|
)
|
|
|
(70,000
|
)
|
|
|
(16,064
|
)
|
|
|
-
|
|
|
|
(40,161
|
)
|
|
|
(56,225
|
)
|
|
FTSE
100 Index, strike price 4,325 GBP, expires 12/19/08
|
|
|
-
|
|
|
|
(95
|
)
|
|
|
-
|
|
|
|
(95
|
)
|
|
|
-
|
|
|
|
(537,783
|
)
|
|
|
-
|
|
|
|
(537,783
|
)
|
|
FTSE
100 Index, strike price 4,775 GBP, expires 12/19/08
|
|
|
-
|
|
|
|
(360
|
)
|
|
|
-
|
|
|
|
(360
|
)
|
|
|
-
|
|
|
|
(809,663
|
)
|
|
|
-
|
|
|
|
(809,663
|
)
|
|
Gazprom
OAO (ADR), strike price $64.68, expires 11/04/08
|
|
|
(16,500
|
)
|
|
|
-
|
|
|
|
(40,800
|
)
|
|
|
(57,300
|
)
|
|
|
(12
|
)
|
|
|
-
|
|
|
|
(29
|
)
|
|
|
(41
|
)
|
|
Genentech,
Inc., strike price $95, expires 12/22/08
|
|
|
(200
|
)
|
|
|
-
|
|
|
|
(480
|
)
|
|
|
(680
|
)
|
|
|
(31,500
|
)
|
|
|
-
|
|
|
|
(75,600
|
)
|
|
|
(107,100
|
)
|
|
General
Electric Co., strike price $21, expires 12/22/08
|
|
|
(325
|
)
|
|
|
-
|
|
|
|
(800
|
)
|
|
|
(1,125
|
)
|
|
|
(35,263
|
)
|
|
|
-
|
|
|
|
(86,800
|
)
|
|
|
(122,063
|
)
|
|
Genzyme
Corp., strike price $75, expires 12/22/08
|
|
|
(85
|
)
|
|
|
-
|
|
|
|
(215
|
)
|
|
|
(300
|
)
|
|
|
(33,150
|
)
|
|
|
-
|
|
|
|
(83,850
|
)
|
|
|
(117,000
|
)
|
|
Google,
Inc., strike price $440, expires 01/19/09
|
|
|
(10
|
)
|
|
|
-
|
|
|
|
(25
|
)
|
|
|
(35
|
)
|
|
|
(8,550
|
)
|
|
|
-
|
|
|
|
(21,375
|
)
|
|
|
(29,925
|
)
|
|
Google,
Inc., strike price $600, expires 12/22/08
|
|
|
(10
|
)
|
|
|
-
|
|
|
|
(25
|
)
|
|
|
(35
|
)
|
|
|
(150
|
)
|
|
|
-
|
|
|
|
(375
|
)
|
|
|
(525
|
)
|
|
Google,
Inc., strike price $650, expires 12/22/08
|
|
|
(10
|
)
|
|
|
-
|
|
|
|
(25
|
)
|
|
|
(35
|
)
|
|
|
(100
|
)
|
|
|
-
|
|
|
|
(250
|
)
|
|
|
(350
|
)
|
|
Greenhill
& Co., Inc., strike price $70, expires 12/22/08
|
|
|
(85
|
)
|
|
|
-
|
|
|
|
(234
|
)
|
|
|
(319
|
)
|
|
|
(27,200
|
)
|
|
|
-
|
|
|
|
(74,880
|
)
|
|
|
(102,080
|
)
|
|
H.J.
Heinz Co., strike price $50.05, expires 11/21/08
|
|
|
(10,000
|
)
|
|
|
-
|
|
|
|
(25,000
|
)
|
|
|
(35,000
|
)
|
|
|
(1,582
|
)
|
|
|
-
|
|
|
|
(3,955
|
)
|
|
|
(5,537
|
)
|
|
H.J.
Heinz Co., strike price $52, expires 12/19/08
|
|
|
(18,000
|
)
|
|
|
-
|
|
|
|
(45,000
|
)
|
|
|
(63,000
|
)
|
|
|
(7,414
|
)
|
|
|
-
|
|
|
|
(18,536
|
)
|
|
|
(25,950
|
)
|
|
Halliburton
Co., strike price $27.50, expires 01/19/09
|
|
|
-
|
|
|
|
-
|
|
|
|
(120
|
)
|
|
|
(120
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(7,860
|
)
|
|
|
(7,860
|
)
|
|
Halliburton
Co., strike price $52.29, expires 11/03/08
|
|
|
(12,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(12,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Hannover
Rueckversicherung AG, strike price 34.22 EUR, expires
11/04/08
|
|
|
(9,400
|
)
|
|
|
-
|
|
|
|
(52,800
|
)
|
|
|
(62,200
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
HSBC
Holdings Plc, strike price 8.67 GBP, expires 11/07/08
|
|
|
(16,000
|
)
|
|
|
-
|
|
|
|
(39,000
|
)
|
|
|
(55,000
|
)
|
|
|
(209
|
)
|
|
|
-
|
|
|
|
(510
|
)
|
|
|
(719
|
)
|
|
HSBC
Holdings Plc, strike price 8.85 GBP, expires 12/02/08
|
|
|
(11,000
|
)
|
|
|
-
|
|
|
|
(27,000
|
)
|
|
|
(38,000
|
)
|
|
|
(1,878
|
)
|
|
|
-
|
|
|
|
(4,610
|
)
|
|
|
(6,488
|
)
|
|
HSBC
Holdings Plc, strike price 9.35 GBP, expires 11/07/08
|
|
|
(40,000
|
)
|
|
|
-
|
|
|
|
(99,000
|
)
|
|
|
(139,000
|
)
|
|
|
(7
|
)
|
|
|
-
|
|
|
|
(16
|
)
|
|
|
(23
|
)
|
|
Hudson
City Bancorp, Inc., strike price $19, expires 11/03/08
|
|
|
(8,800
|
)
|
|
|
-
|
|
|
|
(21,800
|
)
|
|
|
(30,600
|
)
|
|
|
(1,675
|
)
|
|
|
-
|
|
|
|
(4,149
|
)
|
|
|
(5,824
|
)
|
|
Husky
Energy, Inc., strike price 49 CAD, expires 11/20/08
|
|
|
(355
|
)
|
|
|
-
|
|
|
|
(870
|
)
|
|
|
(1,225
|
)
|
|
|
(2,356
|
)
|
|
|
-
|
|
|
|
(5,775
|
)
|
|
|
(8,131
|
)
|
|
Hyundai
Motor Co., strike price 70,980 KRW, expires 11/12/08
|
|
|
(8,700
|
)
|
|
|
-
|
|
|
|
(21,800
|
)
|
|
|
(30,500
|
)
|
|
|
(3,223
|
)
|
|
|
-
|
|
|
|
(8,075
|
)
|
|
|
(11,298
|
)
|
|
|
|
Contracts
|
|
|
Value
|
|
|
Options
Written
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC into BOE)
|
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC into BOE)
|
|
|
Industrial
and Commercial Bank of China Asia Ltd., strike price 20.69 HKD, expires
12/03/08
|
|
|
(103,000
|
)
|
|
|
-
|
|
|
|
(255,000
|
)
|
|
|
(358,000
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Intel
Corp., strike price $23, expires 11/21/08
|
|
|
(40,000
|
)
|
|
|
-
|
|
|
|
(98,000
|
)
|
|
|
(138,000
|
)
|
|
|
(24
|
)
|
|
|
-
|
|
|
|
(59
|
)
|
|
|
(83
|
)
|
|
IntercontinentalExchange,
Inc., strike price $100, expires 12/22/08
|
|
|
(48
|
)
|
|
|
-
|
|
|
|
(92
|
)
|
|
|
(140
|
)
|
|
|
(30,000
|
)
|
|
|
-
|
|
|
|
(57,500
|
)
|
|
|
(87,500
|
)
|
|
IntercontinentalExchange,
Inc., strike price $90, expires 11/24/08
|
|
|
(25
|
)
|
|
|
-
|
|
|
|
(75
|
)
|
|
|
(100
|
)
|
|
|
(14,750
|
)
|
|
|
-
|
|
|
|
(44,250
|
)
|
|
|
(59,000
|
)
|
|
International
Business Machines Corp., strike price $135, expires
11/03/08
|
|
|
(25
|
)
|
|
|
-
|
|
|
|
(50
|
)
|
|
|
(75
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
iShares
Dow Jones Real Estate Index Fund, strike price $67, expires
11/03/08
|
|
|
(100
|
)
|
|
|
-
|
|
|
|
(250
|
)
|
|
|
(350
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Johnson
& Johnson, strike price $68, expires 11/07/08
|
|
|
(100
|
)
|
|
|
-
|
|
|
|
(250
|
)
|
|
|
(350
|
)
|
|
|
(115
|
)
|
|
|
-
|
|
|
|
(287
|
)
|
|
|
(402
|
)
|
|
Johnson
& Johnson, strike price $70, expires 11/28/08
|
|
|
(160
|
)
|
|
|
-
|
|
|
|
(390
|
)
|
|
|
(550
|
)
|
|
|
(3,083
|
)
|
|
|
-
|
|
|
|
(7,515
|
)
|
|
|
(10,598
|
)
|
|
JPMorgan
Chase & Co., strike price $45, expires 12/22/08
|
|
|
(90
|
)
|
|
|
-
|
|
|
|
(220
|
)
|
|
|
(310
|
)
|
|
|
(17,415
|
)
|
|
|
-
|
|
|
|
(42,570
|
)
|
|
|
(59,985
|
)
|
|
JPMorgan
Chase & Co., strike price $47.50, expires 12/22/08
|
|
|
(60
|
)
|
|
|
-
|
|
|
|
(150
|
)
|
|
|
(210
|
)
|
|
|
(6,990
|
)
|
|
|
-
|
|
|
|
(17,475
|
)
|
|
|
(24,465
|
)
|
|
Julius
Baer Holding AG, strike price 67.50 CHF, expires 11/04/08
|
|
|
(4,800
|
)
|
|
|
-
|
|
|
|
(12,000
|
)
|
|
|
(16,800
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
K+S
AG, strike price 240 EUR, expires 12/19/08
|
|
|
(10
|
)
|
|
|
-
|
|
|
|
(18
|
)
|
|
|
(28
|
)
|
|
|
(1,003
|
)
|
|
|
-
|
|
|
|
(1,806
|
)
|
|
|
(2,809
|
)
|
|
K+S
AG, strike price 260 EUR, expires 12/19/08
|
|
|
(56
|
)
|
|
|
-
|
|
|
|
(144
|
)
|
|
|
(200
|
)
|
|
|
(21,983
|
)
|
|
|
-
|
|
|
|
(56,529
|
)
|
|
|
(78,512
|
)
|
|
Kellogg
Co., strike price $55, expires 12/22/08
|
|
|
(280
|
)
|
|
|
-
|
|
|
|
(700
|
)
|
|
|
(980
|
)
|
|
|
(25,900
|
)
|
|
|
-
|
|
|
|
(64,750
|
)
|
|
|
(90,650
|
)
|
|
Kerry
Properties Ltd., strike price 61.46 HKD, expires 11/05/08
|
|
|
-
|
|
|
|
-
|
|
|
|
(350,000
|
)
|
|
|
(350,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
KeyCorp,
strike price $11.25, expires 12/30/08
|
|
|
(270
|
)
|
|
|
-
|
|
|
|
(670
|
)
|
|
|
(940
|
)
|
|
|
(63,936
|
)
|
|
|
-
|
|
|
|
(158,656
|
)
|
|
|
(222,592
|
)
|
|
Kohl's
Corp., strike price $50.29, expires 11/21/08
|
|
|
(13,500
|
)
|
|
|
-
|
|
|
|
(33,500
|
)
|
|
|
(47,000
|
)
|
|
|
(216
|
)
|
|
|
-
|
|
|
|
(536
|
)
|
|
|
(752
|
)
|
|
Konica
Minolta Holdings, Inc., strike price 1,572.64 JPY, expires
11/12/08
|
|
|
(27,000
|
)
|
|
|
-
|
|
|
|
(67,000
|
)
|
|
|
(94,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Legal
& General Group Plc, strike price 1.15 GBP, expires
11/04/08
|
|
|
(482,200
|
)
|
|
|
-
|
|
|
|
(2,000,000
|
)
|
|
|
(2,482,200
|
)
|
|
|
(8
|
)
|
|
|
-
|
|
|
|
(32
|
)
|
|
|
(40
|
)
|
|
Legal
& General Group Plc, strike price 1.16 GBP, expires
11/04/08
|
|
|
(263,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(263,000
|
)
|
|
|
(4
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(4
|
)
|
|
Linde
AG, strike price 87.97 EUR, expires 11/07/08
|
|
|
(8,700
|
)
|
|
|
-
|
|
|
|
(22,100
|
)
|
|
|
(30,800
|
)
|
|
|
(26
|
)
|
|
|
-
|
|
|
|
(65
|
)
|
|
|
(91
|
)
|
|
Linde
AG, strike price 94 EUR, expires 11/23/08
|
|
|
(34
|
)
|
|
|
-
|
|
|
|
(89
|
)
|
|
|
(123
|
)
|
|
|
(3,068
|
)
|
|
|
-
|
|
|
|
(8,031
|
)
|
|
|
(11,099
|
)
|
|
Linear
Technology Corp., strike price $32.50, expires 01/19/09
|
|
|
(85
|
)
|
|
|
-
|
|
|
|
(225
|
)
|
|
|
(310
|
)
|
|
|
(1,063
|
)
|
|
|
-
|
|
|
|
(2,813
|
)
|
|
|
(3,876
|
)
|
|
McDonald's
Corp., strike price $61, expires 11/21/08
|
|
|
(17,000
|
)
|
|
|
-
|
|
|
|
(43,000
|
)
|
|
|
(60,000
|
)
|
|
|
(20,405
|
)
|
|
|
-
|
|
|
|
(51,613
|
)
|
|
|
(72,018
|
)
|
|
Medco
Health Solutions, Inc., strike price $40, expires 01/19/09
|
|
|
(40
|
)
|
|
|
-
|
|
|
|
(110
|
)
|
|
|
(150
|
)
|
|
|
(13,800
|
)
|
|
|
-
|
|
|
|
(37,950
|
)
|
|
|
(51,750
|
)
|
|
Medco
Health Solutions, Inc., strike price $50, expires 11/24/08
|
|
|
(115
|
)
|
|
|
-
|
|
|
|
(285
|
)
|
|
|
(400
|
)
|
|
|
(1,150
|
)
|
|
|
-
|
|
|
|
(2,850
|
)
|
|
|
(4,000
|
)
|
|
Medtronic,
Inc., strike price $55, expires 01/19/09
|
|
|
(100
|
)
|
|
|
-
|
|
|
|
(250
|
)
|
|
|
(350
|
)
|
|
|
(2,250
|
)
|
|
|
-
|
|
|
|
(5,625
|
)
|
|
|
(7,875
|
)
|
|
Mizuho
Financial Group, Inc., strike price 575,921.50 JPY, expires
11/05/08
|
|
|
(120
|
)
|
|
|
-
|
|
|
|
(300
|
)
|
|
|
(420
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Motorola,
Inc., strike price $7.50, expires 01/19/09
|
|
|
(175
|
)
|
|
|
-
|
|
|
|
(450
|
)
|
|
|
(625
|
)
|
|
|
(3,063
|
)
|
|
|
-
|
|
|
|
(7,875
|
)
|
|
|
(10,938
|
)
|
|
NASDAQ
OMX Group (The), strike price $30, expires 12/22/08
|
|
|
(150
|
)
|
|
|
-
|
|
|
|
(370
|
)
|
|
|
(520
|
)
|
|
|
(78,750
|
)
|
|
|
-
|
|
|
|
(194,250
|
)
|
|
|
(273,000
|
)
|
|
National
Express Group Plc, strike price 9.08 GBP, expires 11/04/08
|
|
|
(25,000
|
)
|
|
|
-
|
|
|
|
(50,000
|
)
|
|
|
(75,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
Nestle
S.A., strike price 45 CHF, expires 11/04/08
|
|
|
(30,000
|
)
|
|
|
-
|
|
|
|
(69,000
|
)
|
|
|
(99,000
|
)
|
|
|
(25,000
|
)
|
|
|
-
|
|
|
|
(57,499
|
)
|
|
|
(82,499
|
)
|
|
Nestle
S.A., strike price 52.40 CHF, expires 11/07/08
|
|
|
(37,000
|
)
|
|
|
-
|
|
|
|
(85,000
|
)
|
|
|
(122,000
|
)
|
|
|
(99
|
)
|
|
|
-
|
|
|
|
(227
|
)
|
|
|
(326
|
)
|
|
New
World Development Co. Ltd., strike price 23.19 HKD, expires
11/05/08
|
|
|
(365,000
|
)
|
|
|
-
|
|
|
|
(964,000
|
)
|
|
|
(1,329,000
|
)
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
Newmont
Mining Corp., strike price $60, expires 12/22/08
|
|
|
(70
|
)
|
|
|
-
|
|
|
|
(170
|
)
|
|
|
(240
|
)
|
|
|
(280
|
)
|
|
|
-
|
|
|
|
(680
|
)
|
|
|
(960
|
)
|
|
Nike,
Inc., strike price $65.50, expires 12/19/08
|
|
|
(10,000
|
)
|
|
|
-
|
|
|
|
(25,000
|
)
|
|
|
(35,000
|
)
|
|
|
(15,888
|
)
|
|
|
-
|
|
|
|
(39,720
|
)
|
|
|
(55,608
|
)
|
|
Nike,
Inc., strike price $71, expires 11/21/08
|
|
|
(13,000
|
)
|
|
|
-
|
|
|
|
(32,000
|
)
|
|
|
(45,000
|
)
|
|
|
(1,108
|
)
|
|
|
-
|
|
|
|
(2,726
|
)
|
|
|
(3,834
|
)
|
|
Nikkei,
strike price 10,500 JPY, expires 12/12/08
|
|
|
-
|
|
|
|
(220
|
)
|
|
|
-
|
|
|
|
(220
|
)
|
|
|
-
|
|
|
|
(463,405
|
)
|
|
|
-
|
|
|
|
(463,405
|
)
|
|
Nikkei,
strike price 9,000 JPY, expires 12/12/08
|
|
|
-
|
|
|
|
(120
|
)
|
|
|
-
|
|
|
|
(120
|
)
|
|
|
-
|
|
|
|
(831,388
|
)
|
|
|
-
|
|
|
|
(831,388
|
)
|
|
Nintendo
Co. Ltd., strike price 62,485.84 JPY, expires 11/05/08
|
|
|
(3,400
|
)
|
|
|
-
|
|
|
|
(8,200
|
)
|
|
|
(11,600
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Nintendo
Co. Ltd., strike price 62,685 JPY, expires 11/05/08
|
|
|
(2,200
|
)
|
|
|
-
|
|
|
|
(5,800
|
)
|
|
|
(8,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Nordea
Bank AB, strike price 104 SEK, expires 11/04/08
|
|
|
(15,000
|
)
|
|
|
-
|
|
|
|
(37,000
|
)
|
|
|
(52,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Norfolk
Southern Corp., strike price $62.99, expires 11/03/08
|
|
|
(18,000
|
)
|
|
|
-
|
|
|
|
(44,000
|
)
|
|
|
(62,000
|
)
|
|
|
(3,422
|
)
|
|
|
-
|
|
|
|
(8,364
|
)
|
|
|
(11,786
|
)
|
|
Novartis
AG (ADR), strike price $60, expires 11/21/08
|
|
|
(17,000
|
)
|
|
|
-
|
|
|
|
(42,000
|
)
|
|
|
(59,000
|
)
|
|
|
(2,105
|
)
|
|
|
-
|
|
|
|
(5,200
|
)
|
|
|
(7,305
|
)
|
|
Occidental
Petroleum Corp., strike price $65, expires 01/19/09
|
|
|
(170
|
)
|
|
|
-
|
|
|
|
(430
|
)
|
|
|
(600
|
)
|
|
|
(71,400
|
)
|
|
|
-
|
|
|
|
(180,600
|
)
|
|
|
(252,000
|
)
|
|
Oriflame
Cosmetics S.A., strike price 415.86 SEK, expires 11/07/08
|
|
|
(18,476
|
)
|
|
|
-
|
|
|
|
(44,118
|
)
|
|
|
(62,594
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Orkla
ASA, strike price 68.99 NOK, expires 11/04/08
|
|
|
(118,500
|
)
|
|
|
-
|
|
|
|
(192,000
|
)
|
|
|
(310,500
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
Contracts
|
|
|
Value
|
|
|
Options
Written
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
|
|
Parmalat
S.p.A., strike price 1.94 EUR, expires 11/11/08
|
|
|
(307,837
|
)
|
|
|
-
|
|
|
|
(772,734
|
)
|
|
|
(1,080,571
|
)
|
|
$
|
(4
|
)
|
|
$
|
-
|
|
|
$
|
(10
|
)
|
|
$
|
(14
|
)
|
|
Partner
Communications (ADR), strike price $24.03, expires
11/21/08
|
|
|
(67,000
|
)
|
|
|
-
|
|
|
|
(168,000
|
)
|
|
|
(235,000
|
)
|
|
|
(161
|
)
|
|
|
-
|
|
|
|
(403
|
)
|
|
|
(564
|
)
|
|
Partner
Communications (ADR), strike price $25, expires 11/24/08
|
|
|
(245
|
)
|
|
|
-
|
|
|
|
(625
|
)
|
|
|
(870
|
)
|
|
|
(3,675
|
)
|
|
|
-
|
|
|
|
(9,375
|
)
|
|
|
(13,050
|
)
|
|
Petroleo
Brasileiro S.A. (ADR), strike price $55, expires 11/24/08
|
|
|
(90
|
)
|
|
|
-
|
|
|
|
(280
|
)
|
|
|
(370
|
)
|
|
|
(450
|
)
|
|
|
-
|
|
|
|
(1,400
|
)
|
|
|
(1,850
|
)
|
|
Pfizer,
Inc., strike price $20, expires 01/19/09
|
|
|
(370
|
)
|
|
|
-
|
|
|
|
(930
|
)
|
|
|
(1,300
|
)
|
|
|
(27,010
|
)
|
|
|
-
|
|
|
|
(67,890
|
)
|
|
|
(94,900
|
)
|
|
Pfizer,
Inc., strike price $20, expires 12/22/08
|
|
|
(500
|
)
|
|
|
-
|
|
|
|
(1,200
|
)
|
|
|
(1,700
|
)
|
|
|
(21,250
|
)
|
|
|
-
|
|
|
|
(51,000
|
)
|
|
|
(72,250
|
)
|
|
Philippine
Long Distance Telephone Co. (ADR), strike price $65, expires
01/19/09
|
|
|
(165
|
)
|
|
|
-
|
|
|
|
(405
|
)
|
|
|
(570
|
)
|
|
|
(8,250
|
)
|
|
|
-
|
|
|
|
(20,250
|
)
|
|
|
(28,500
|
)
|
|
Pioneer
Natural Resources Co., strike price $65, expires 12/22/08
|
|
|
(314
|
)
|
|
|
-
|
|
|
|
(778
|
)
|
|
|
(1,092
|
)
|
|
|
(4,710
|
)
|
|
|
-
|
|
|
|
(11,670
|
)
|
|
|
(16,380
|
)
|
|
Pioneer
Natural Resources Co., strike price $75, expires 12/22/08
|
|
|
(80
|
)
|
|
|
-
|
|
|
|
(190
|
)
|
|
|
(270
|
)
|
|
|
(800
|
)
|
|
|
-
|
|
|
|
(1,900
|
)
|
|
|
(2,700
|
)
|
|
Potash
Corp. of Saskatchewan, strike price $120, expires 01/19/09
|
|
|
(15
|
)
|
|
|
-
|
|
|
|
(45
|
)
|
|
|
(60
|
)
|
|
|
(4,800
|
)
|
|
|
-
|
|
|
|
(14,400
|
)
|
|
|
(19,200
|
)
|
|
PowerShares
Dynamic Insurance Portfolio, strike price $16.94, expires
11/03/08
|
|
|
-
|
|
|
|
-
|
|
|
|
(26,000
|
)
|
|
|
(26,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
PPR,
strike price 82.29 EUR, expires 11/04/08
|
|
|
(5,200
|
)
|
|
|
-
|
|
|
|
(12,800
|
)
|
|
|
(18,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Procter
& Gamble Co., strike price $68.50, expires 11/21/08
|
|
|
(15,000
|
)
|
|
|
-
|
|
|
|
(36,500
|
)
|
|
|
(51,500
|
)
|
|
|
(10,218
|
)
|
|
|
-
|
|
|
|
(24,864
|
)
|
|
|
(35,082
|
)
|
|
Public
Service Enterprise Group, Inc., strike price $45, expires
12/22/08
|
|
|
(105
|
)
|
|
|
-
|
|
|
|
(275
|
)
|
|
|
(380
|
)
|
|
|
(788
|
)
|
|
|
-
|
|
|
|
(2,063
|
)
|
|
|
(2,851
|
)
|
|
Qualcomm,
Inc., strike price $48.75, expires 11/03/08
|
|
|
(144
|
)
|
|
|
-
|
|
|
|
(358
|
)
|
|
|
(502
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Qualcomm,
Inc., strike price $52.50, expires 01/19/09
|
|
|
(145
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(145
|
)
|
|
|
(4,858
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(4,858
|
)
|
|
Qualcomm,
Inc., strike price $57.50, expires 01/19/09
|
|
|
-
|
|
|
|
-
|
|
|
|
(330
|
)
|
|
|
(330
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,465
|
)
|
|
|
(3,465
|
)
|
|
Regions
Financial Corp., strike price $11.38, expires 12/30/08
|
|
|
(280
|
)
|
|
|
-
|
|
|
|
(690
|
)
|
|
|
(970
|
)
|
|
|
(41,126
|
)
|
|
|
-
|
|
|
|
(101,347
|
)
|
|
|
(142,473
|
)
|
|
Research
In Motion Ltd., strike price $170, expires 12/22/08
|
|
|
(55
|
)
|
|
|
-
|
|
|
|
(150
|
)
|
|
|
(205
|
)
|
|
|
(165
|
)
|
|
|
-
|
|
|
|
(450
|
)
|
|
|
(615
|
)
|
|
Rio
Tinto Plc (ADR), strike price $195, expires 12/22/08
|
|
|
(2
|
)
|
|
|
-
|
|
|
|
(6
|
)
|
|
|
(8
|
)
|
|
|
(4,840
|
)
|
|
|
-
|
|
|
|
(14,520
|
)
|
|
|
(19,360
|
)
|
|
Roche
Holding AG, strike price 190 CHF, expires 12/09/08
|
|
|
(3,300
|
)
|
|
|
-
|
|
|
|
(8,200
|
)
|
|
|
(11,500
|
)
|
|
|
(20,494
|
)
|
|
|
-
|
|
|
|
(50,925
|
)
|
|
|
(71,419
|
)
|
|
Royal
Bank of Canada, strike price 50 CAD, expires 01/19/09
|
|
|
(50
|
)
|
|
|
-
|
|
|
|
(110
|
)
|
|
|
(160
|
)
|
|
|
(11,844
|
)
|
|
|
-
|
|
|
|
(26,056
|
)
|
|
|
(37,900
|
)
|
|
S&P
500, ,strike price $965, expires 12/22/08
|
|
|
-
|
|
|
|
(590
|
)
|
|
|
-
|
|
|
|
(590
|
)
|
|
|
-
|
|
|
|
(4,277,500
|
)
|
|
|
-
|
|
|
|
(4,277,500
|
)
|
|
S&P
500, strike price $1,005, expires 12/22/08
|
|
|
-
|
|
|
|
(695
|
)
|
|
|
-
|
|
|
|
(695
|
)
|
|
|
-
|
|
|
|
(3,554,924
|
)
|
|
|
-
|
|
|
|
(3,554,924
|
)
|
|
S&P
500, strike price $1,070, expires 12/22/08
|
|
|
-
|
|
|
|
(400
|
)
|
|
|
-
|
|
|
|
(400
|
)
|
|
|
-
|
|
|
|
(994,000
|
)
|
|
|
-
|
|
|
|
(994,000
|
)
|
|
Samsung
Electronics Co. Ltd., strike price 799,580.37 KRW, expires
11/05/08
|
|
|
(1,450
|
)
|
|
|
-
|
|
|
|
(3,250
|
)
|
|
|
(4,700
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Shizuoka
Bank Ltd. (The), strike price 895.02 JPY, expires 01/06/09
|
|
|
(26,500
|
)
|
|
|
-
|
|
|
|
(66,500
|
)
|
|
|
(93,000
|
)
|
|
|
(26,450
|
)
|
|
|
-
|
|
|
|
(66,375
|
)
|
|
|
(92,825
|
)
|
|
Simon
Property Group, Inc., strike price $95, expires 01/19/09
|
|
|
(26
|
)
|
|
|
-
|
|
|
|
(66
|
)
|
|
|
(92
|
)
|
|
|
(3,900
|
)
|
|
|
-
|
|
|
|
(9,900
|
)
|
|
|
(13,800
|
)
|
|
Sims
Group Ltd., strike price 34 AUD, expires 11/05/08
|
|
|
(28,600
|
)
|
|
|
-
|
|
|
|
(70,500
|
)
|
|
|
(99,100
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Sims
Group Ltd., strike price 41.57 AUD, expires 11/05/08
|
|
|
(34,900
|
)
|
|
|
-
|
|
|
|
(86,000
|
)
|
|
|
(120,900
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
Singapore
Airlines Ltd., strike price 17.16 SGD, expires 11/05/08
|
|
|
(55,000
|
)
|
|
|
-
|
|
|
|
(138,000
|
)
|
|
|
(193,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
Singapore
Telecommunications Ltd., strike price 3.97 SGD, expires
11/05/08
|
|
|
(414,000
|
)
|
|
|
-
|
|
|
|
(1,100,000
|
)
|
|
|
(1,514,000
|
)
|
|
|
(3
|
)
|
|
|
-
|
|
|
|
(7
|
)
|
|
|
(10
|
)
|
|
SPDR
KBW Insurance, strike price $48, expires 12/22/08
|
|
|
(200
|
)
|
|
|
-
|
|
|
|
(215
|
)
|
|
|
(415
|
)
|
|
|
(7,000
|
)
|
|
|
-
|
|
|
|
(7,525
|
)
|
|
|
(14,525
|
)
|
|
SPDR
KBW Insurance, strike price $49.86, expires 11/21/08
|
|
|
(13,000
|
)
|
|
|
-
|
|
|
|
(14,500
|
)
|
|
|
(27,500
|
)
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
Sumitomo
Corp., strike price 763.76 JPY, expires 01/06/09
|
|
|
(44,000
|
)
|
|
|
-
|
|
|
|
(111,000
|
)
|
|
|
(155,000
|
)
|
|
|
(78,423
|
)
|
|
|
-
|
|
|
|
(197,841
|
)
|
|
|
(276,264
|
)
|
|
Syngenta
AG, strike price 334.41 CHF, expires 11/04/08
|
|
|
(5,800
|
)
|
|
|
-
|
|
|
|
(15,200
|
)
|
|
|
(21,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
T.
Rowe Price Group, Inc., strike price $60, expires 11/24/08
|
|
|
(30
|
)
|
|
|
-
|
|
|
|
(70
|
)
|
|
|
(100
|
)
|
|
|
(300
|
)
|
|
|
-
|
|
|
|
(700
|
)
|
|
|
(1,000
|
)
|
|
T.
Rowe Price Group, Inc., strike price $62, expires 11/11/08
|
|
|
(5,000
|
)
|
|
|
-
|
|
|
|
(12,500
|
)
|
|
|
(17,500
|
)
|
|
|
(20
|
)
|
|
|
-
|
|
|
|
(49
|
)
|
|
|
(69
|
)
|
|
Taiwan
Semiconductor Manufacturing Co. Ltd. (ADR), strike price $11, expires
11/14/08
|
|
|
(80,000
|
)
|
|
|
-
|
|
|
|
(220,000
|
)
|
|
|
(300,000
|
)
|
|
|
(48
|
)
|
|
|
-
|
|
|
|
(132
|
)
|
|
|
(180
|
)
|
|
Target
Corp., strike price $62.50, expires 01/19/09
|
|
|
(100
|
)
|
|
|
-
|
|
|
|
(250
|
)
|
|
|
(350
|
)
|
|
|
(6,850
|
)
|
|
|
-
|
|
|
|
(17,125
|
)
|
|
|
(23,975
|
)
|
|
TELUS
Corp., strike price 50 CAD, expires 11/24/08
|
|
|
(140
|
)
|
|
|
-
|
|
|
|
(350
|
)
|
|
|
(490
|
)
|
|
|
(2,207
|
)
|
|
|
-
|
|
|
|
(5,517
|
)
|
|
|
(7,724
|
)
|
|
TELUS
Corp., strike price 52 CAD, expires 11/22/08
|
|
|
(200
|
)
|
|
|
-
|
|
|
|
(500
|
)
|
|
|
(700
|
)
|
|
|
(1,825
|
)
|
|
|
-
|
|
|
|
(4,563
|
)
|
|
|
(6,388
|
)
|
|
Torchmark
Corp., strike price $65, expires 11/24/08
|
|
|
(40
|
)
|
|
|
-
|
|
|
|
(100
|
)
|
|
|
(140
|
)
|
|
|
(3,000
|
)
|
|
|
-
|
|
|
|
(7,500
|
)
|
|
|
(10,500
|
)
|
|
Total
S.A., strike price 52.89 EUR, expires 11/04/08
|
|
|
(10,000
|
)
|
|
|
-
|
|
|
|
(24,000
|
)
|
|
|
(34,000
|
)
|
|
|
(4
|
)
|
|
|
-
|
|
|
|
(10
|
)
|
|
|
(14
|
)
|
|
|
|
Contracts
|
|
|
Value
|
|
|
Options
Written
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
|
|
BOE
|
|
|
BFD
|
|
|
BWC
|
|
|
Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
|
|
Total
S.A., strike price 58.29 EUR, expires 11/04/08
|
|
|
(5,000
|
)
|
|
|
-
|
|
|
|
(16,000
|
)
|
|
|
(21,000
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Toyota
Motor Corp. (ADR), strike price $90, expires 01/19/09
|
|
|
(65
|
)
|
|
|
-
|
|
|
|
(160
|
)
|
|
|
(225
|
)
|
|
|
(23,400
|
)
|
|
|
-
|
|
|
|
(57,600
|
)
|
|
|
(81,000
|
)
|
|
U.S.
Bancorp, strike price $30, expires 11/03/08
|
|
|
(56
|
)
|
|
|
-
|
|
|
|
(144
|
)
|
|
|
(200
|
)
|
|
|
(2,752
|
)
|
|
|
-
|
|
|
|
(7,076
|
)
|
|
|
(9,828
|
)
|
|
U.S.
Bancorp, strike price $37.50, expires 12/22/08
|
|
|
(125
|
)
|
|
|
-
|
|
|
|
(305
|
)
|
|
|
(430
|
)
|
|
|
(1,875
|
)
|
|
|
-
|
|
|
|
(4,575
|
)
|
|
|
(6,450
|
)
|
|
Ultra
Petroleum Corp., strike price $60, expires 01/19/09
|
|
|
(80
|
)
|
|
|
-
|
|
|
|
(200
|
)
|
|
|
(280
|
)
|
|
|
(22,400
|
)
|
|
|
-
|
|
|
|
(56,000
|
)
|
|
|
(78,400
|
)
|
|
UMB
Financial Corp., strike price $56.50, expires 11/10/08
|
|
|
(5,400
|
)
|
|
|
-
|
|
|
|
(13,600
|
)
|
|
|
(19,000
|
)
|
|
|
(1,725
|
)
|
|
|
-
|
|
|
|
(4,345
|
)
|
|
|
(6,070
|
)
|
|
Unilever
Plc, strike price 16.60 GBP, expires 11/11/08
|
|
|
(46,500
|
)
|
|
|
-
|
|
|
|
(117,000
|
)
|
|
|
(163,500
|
)
|
|
|
(1,654
|
)
|
|
|
-
|
|
|
|
(4,162
|
)
|
|
|
(5,816
|
)
|
|
United
Overseas Bank Ltd., strike price 22.07 SGD, expires
11/05/08
|
|
|
(90,000
|
)
|
|
|
-
|
|
|
|
(226,300
|
)
|
|
|
(316,300
|
)
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(2
|
)
|
|
|
(3
|
)
|
|
Vivendi,
strike price 24.98 EUR, expires 11/13/08
|
|
|
(22,700
|
)
|
|
|
-
|
|
|
|
(57,000
|
)
|
|
|
(79,700
|
)
|
|
|
(4,554
|
)
|
|
|
-
|
|
|
|
(11,436
|
)
|
|
|
(15,990
|
)
|
|
Vodafone
Group Plc (ADR), strike price $35.25, expires 11/21/08
|
|
|
(28,000
|
)
|
|
|
-
|
|
|
|
(72,000
|
)
|
|
|
(100,000
|
)
|
|
|
(8
|
)
|
|
|
-
|
|
|
|
(22
|
)
|
|
|
(30
|
)
|
|
Wal-Mart
Stores, Inc., strike price $60, expires 12/22/08
|
|
|
(120
|
)
|
|
|
-
|
|
|
|
(300
|
)
|
|
|
(420
|
)
|
|
|
(24,540
|
)
|
|
|
-
|
|
|
|
(61,350
|
)
|
|
|
(85,890
|
)
|
|
Wal-Mart
Stores, Inc., strike price $65, expires 11/24/08
|
|
|
(120
|
)
|
|
|
-
|
|
|
|
(300
|
)
|
|
|
(420
|
)
|
|
|
(2,760
|
)
|
|
|
-
|
|
|
|
(6,900
|
)
|
|
|
(9,660
|
)
|
|
Walt
Disney Co. (The), strike price $33.39, expires 11/21/08
|
|
|
(19,500
|
)
|
|
|
-
|
|
|
|
(48,500
|
)
|
|
|
(68,000
|
)
|
|
|
(226
|
)
|
|
|
-
|
|
|
|
(563
|
)
|
|
|
(789
|
)
|
|
Walt
Disney Co. (The), strike price $35, expires 01/19/09
|
|
|
(100
|
)
|
|
|
-
|
|
|
|
(260
|
)
|
|
|
(360
|
)
|
|
|
(2,250
|
)
|
|
|
-
|
|
|
|
(5,850
|
)
|
|
|
(8,100
|
)
|
|
Wells
Fargo & Co., strike price $30, expires 11/03/08
|
|
|
(145
|
)
|
|
|
-
|
|
|
|
(355
|
)
|
|
|
(500
|
)
|
|
|
(59,288
|
)
|
|
|
-
|
|
|
|
(145,152
|
)
|
|
|
(204,440
|
)
|
|
Wells
Fargo & Co., strike price $40, expires 01/19/09
|
|
|
(90
|
)
|
|
|
-
|
|
|
|
(240
|
)
|
|
|
(330
|
)
|
|
|
(12,825
|
)
|
|
|
-
|
|
|
|
(34,200
|
)
|
|
|
(47,025
|
)
|
|
Wells
Fargo & Co., strike price $40, expires 11/24/08
|
|
|
(100
|
)
|
|
|
-
|
|
|
|
(250
|
)
|
|
|
(350
|
)
|
|
|
(2,250
|
)
|
|
|
-
|
|
|
|
(5,625
|
)
|
|
|
(7,875
|
)
|
|
Weyerhauser
Co., strike price $65, expires 01/19/09
|
|
|
(120
|
)
|
|
|
-
|
|
|
|
(290
|
)
|
|
|
(410
|
)
|
|
|
(1,800
|
)
|
|
|
-
|
|
|
|
(4,350
|
)
|
|
|
(6,150
|
)
|
|
Yara
International ASA, strike price 332.72 NOK, expires
11/04/08
|
|
|
(57,500
|
)
|
|
|
-
|
|
|
|
(188,400
|
)
|
|
|
(245,900
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Yum!
Brands, Inc., strike price $40.50, expires 11/07/08
|
|
|
(22,000
|
)
|
|
|
-
|
|
|
|
(57,000
|
)
|
|
|
(79,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
Total
Call Options Written
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,757,902
|
)
|
|
|
(13,157,615
|
)
|
|
|
(4,420,423
|
)
|
|
|
(19,335,940
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Put
Options Written-(0.0)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IntercontinentalExchange,
Inc., strike price $70, expires 11/24/08
|
|
|
(
70
|
)
|
|
|
-
|
|
|
|
(170
|
)
|
|
|
(240
|
)
|
|
|
(19,775
|
)
|
|
|
-
|
|
|
|
(48,026
|
)
|
|
|
(67,801
|
)
|
|
Target
Corp., strike price $40, expires 11/24/08
|
|
|
(75
|
)
|
|
|
-
|
|
|
|
(175
|
)
|
|
|
(250
|
)
|
|
|
(27,000
|
)
|
|
|
-
|
|
|
|
(63,000
|
)
|
|
|
(90,000
|
)
|
|
Total
Put Options Written
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(46,775
|
)
|
|
|
-
|
|
|
|
(111,026
|
)
|
|
|
(157,801
|
)
|
|
Total
Options Written (Premium Received-$38,447,767)-(1.5)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
231,270,501
|
|
|
|
449,164,356
|
|
|
|
568,575,187
|
|
|
|
1,249,010,044
|
|
|
Total
Investments Net of Options Written-98.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,804,677
|
)
|
|
|
(13,157,615
|
)
|
|
|
(4,531,449
|
)
|
|
|
(19,493,741
|
)
|
|
Other
Assets in Excess of Liabilities (Liabilities in Excess of Other
Assets)-1.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,435,93
|
)
|
|
|
31,240,827
|
|
|
|
(8,214,716
|
)
|
|
|
17,425,002
|
**
|
|
Net
Assets-100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
227,834,570
|
|
|
$
|
480,405,183
|
|
|
$
|
560,360,471
|
|
|
$
|
1,266,435,046
|
|
|
* The
cost and unrealized appreciation (depreciation) of investments, as of
October 31, 2008, as computed for federal income tax purposes, were as
follows:
|
|
|
|
Aggregate
cost
|
$ 1,757,826,393
|
|
|
|
|
|
|
|
|
|
Gross
unrealized appreciation
|
$ 11,380,084
|
|
|
|
|
|
|
|
|
|
Gross
unrealized depreciation
|
(500,702,692)
|
|
|
|
|
|
|
|
|
|
Net
unrealized depreciation
|
$ (489,322,608)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** Reflects
pro forma adjustments to the Condensed Combined Statement of Assets and
Liabilities.
|
|
|
|
|
|
|
(a) Non-income
producing security.
|
|
|
|
|
|
|
|
|
|
|
(b) Security,
or a portion thereof, pledged as collateral for outstanding options
written.
|
|
|
|
|
|
|
|
(c) All
or a portion of a security has been pledged as collateral in connection
with open financial futures contracts.
|
|
|
|
|
|
|
(d) Security,
or a portion of security, is on loan.
|
|
|
|
|
|
|
|
|
|
(e) Represents
current yield as of report date.
|
|
|
|
|
|
|
|
|
|
|
(f) Investments
in companies considered to be an affiliate of the Trusts, for purposes of
Section 2(a)(3) of the Investment Company Act of 1940 were as
follows:
|
|
|
|
|
Net
Activity
|
|
Income
|
|
Affiliate
|
BOE
|
BFD
|
BWC
|
Pro
Forma Combined Fund (BFD and BWC into BOE)
|
|
BOE
|
BFD
|
BWC
|
Pro
Forma Combined Fund (BFD and BWC
into
BOE)
|
|
BlackRock
Liquidity Series, LLC Money Market Series
|
1,130,500
|
-
|
2,812,950
|
3,943,450
|
|
$ 51,605
|
$ -
|
$ 147,177
|
$ 198,782
|
|
(g) Security
purchased with the cash proceeds from securities loans.
|
|
|
|
|
|
|
|
|
(h) Rate
Shown is the yield to maturity as of the date of purchase.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
• Foreign
currency exchange contracts as of October 31, 2008 were as
follows:
|
|
|
|
|
|
|
|
|
Currency
Purchased
|
Currency
Sold
|
Settlement
Date
|
Unrealized
Appreciation
|
|
|
|
|
|
|
|
USD 43,798
|
JPY 4,256,000
|
11/04/08
|
$ 588
|
|
|
|
|
|
|
|
USD 110,298
|
JPY 10,718,000
|
11/04/08
|
1,481
|
|
|
|
|
|
|
|
USD 12,216
|
CHF 14,000
|
11/03/08
|
144
|
|
|
|
|
|
|
|
USD 29,668
|
CHF 34,000
|
11/03/08
|
349
|
|
|
|
|
|
|
|
Total
|
|
|
$ 2,562
|
|
|
|
|
|
|
• Financial
futures contracts purchased as of October 31, 2008 were as
follows:
|
Contracts
|
Issue
|
Expiration
Date
|
Face
Value
|
Unrealized
Appreciation (Depreciation)
|
|
|
|
|
|
|
|
|
363
|
Dow
Jones Euro Stoxx
|
December
2008
|
$ 11,992,200
|
$ (1,745,365)
|
|
|
|
|
|
|
|
|
149
|
FTSE
100 Index
|
December
2008
|
$ 10,499,324
|
(1,248,842)
|
|
|
|
|
|
|
|
|
182
|
Nikkei
|
December
2008
|
$ 8,124,505
|
(2,188,608)
|
|
|
|
|
|
|
|
|
536
|
S&P
500
|
December
2008
|
$ 25,923,640
|
610,260
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
$ (4,572,555)
|
|
|
|
|
|
|
|
|
*
|
Key to Abbreviations
|
|
|
ADR
|
–
American Depository Receipt
|
|
|
AUD
|
–
Australian Dollar
|
|
|
CAD
|
–
Canadian Dollar
|
|
|
CHF
|
–
Swiss Franc
|
|
|
EUR
|
–
Euro
|
|
|
GBP
|
–
British Pound
|
|
|
HKD
|
–
Hong Kong Dollar
|
|
|
JPY
|
–
Japanese Yen
|
|
|
KRW
|
–
South Korean Won
|
|
|
NOK
|
–
Norwegian Krane
|
|
|
REIT
|
–
Real Estate Investment Trust
|
|
|
SEK
|
–
Swedish Krona
|
|
|
SGD
|
–
Singapore Dollar
|
|
|
SPDR
|
–
Standard & Poor's Depository Receipt
|
|
|
USD
|
–
U.S. Dollar
|
Pro
Forma Condensed Combined Statement of Assets and Liabilities for
BlackRock
Global Opportunities Equity Trust (BOE)
BlackRock
Global Equity Income Trust (BFD)
BlackRock
World Investment Trust (BWC)
October
31, 2008 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro
Forma
Combined
Fund
(
BFD
and
BWC
into
BOE
)
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
at value – unaffiliated*
,
**
|
|
$
|
231,944,678
|
|
|
$
|
462,321,971
|
|
|
$
|
570,293,686
|
|
|
$
|
–
|
|
|
|
|
$
|
1,264,560,335
|
|
|
Investments
at value – affiliated***
|
|
|
1,130,500
|
|
|
|
–
|
|
|
|
2,812,950
|
|
|
|
–
|
|
|
|
|
|
3,943,450
|
|
|
Cash
|
|
|
–
|
|
|
|
11,773
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
11,773
|
|
|
Foreign currency at
value
†
|
|
|
14,306
|
|
|
|
27,955,529
|
|
|
|
36,977
|
|
|
|
–
|
|
|
|
|
|
28,006,812
|
|
|
Investments
sold receivable
|
|
|
151,889
|
|
|
|
627,868
|
|
|
|
352,705
|
|
|
|
–
|
|
|
|
|
|
1,132,462
|
|
|
Margin
variation receivable
|
|
|
–
|
|
|
|
1,694,917
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
1,694,917
|
|
|
Unrealized
appreciation on foreign currency exchange contracts
|
|
|
732
|
|
|
|
–
|
|
|
|
1,830
|
|
|
|
–
|
|
|
|
|
|
2,562
|
|
|
Dividends
and interest receivable
|
|
|
530,173
|
|
|
|
2,021,296
|
|
|
|
1,377,295
|
|
|
|
–
|
|
|
|
|
|
3,928,764
|
|
|
Securities
lending income receivable - affiliated
|
|
|
11,566
|
|
|
|
–
|
|
|
|
30,658
|
|
|
|
–
|
|
|
|
|
|
42,224
|
|
|
Other
assets
|
|
|
62,025
|
|
|
|
132,465
|
|
|
|
162,082
|
|
|
|
–
|
|
|
|
|
|
356,572
|
|
|
|
|
|
233,845,869
|
|
|
|
494,765,819
|
|
|
|
575,068,183
|
|
|
|
–
|
|
|
|
|
|
1,303,679,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collateral
at value - securities loaned
|
|
|
1,130,500
|
|
|
|
–
|
|
|
|
2,812,950
|
|
|
|
–
|
|
|
|
|
|
3,943,450
|
|
|
Investments
purchased payable
|
|
|
2,619,954
|
|
|
|
84,495
|
|
|
|
6,382,110
|
|
|
|
–
|
|
|
|
|
|
9,086,559
|
|
|
Options written at
value
††
|
|
|
1,804,677
|
|
|
|
13,157,615
|
|
|
|
4,531,449
|
|
|
|
–
|
|
|
|
|
|
19,493,741
|
|
|
Margin
variation payable
|
|
|
–
|
|
|
|
246,967
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
246,967
|
|
|
Investment
advisory fees payable
|
|
|
200,812
|
|
|
|
418,572
|
|
|
|
492,211
|
|
|
|
–
|
|
|
|
|
|
1,111,595
|
|
|
Income
dividends payable
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
1,258,770
|
|
(1)
|
|
|
|
1,258,770
|
|
|
Reorganization
fees payable
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
906,408
|
|
(2)
|
|
|
|
906,408
|
|
|
Officer's
and Trustees' fees payable
|
|
|
17,107
|
|
|
|
30,412
|
|
|
|
47,612
|
|
|
|
–
|
|
|
|
|
|
95,131
|
|
|
Other
accrued expenses payable
|
|
|
238,249
|
|
|
|
422,575
|
|
|
|
441,380
|
|
|
|
–
|
|
|
|
|
|
1,102,204
|
|
|
|
|
|
6,011,299
|
|
|
|
14,360,636
|
|
|
|
14,707,712
|
|
|
|
2,165,178
|
|
|
|
|
|
37,244,825
|
|
|
Net
Assets
|
|
$
|
227,834,570
|
|
|
$
|
480,405,183
|
|
|
$
|
560,360,471
|
|
|
$
|
(2,165,178
|
)
|
|
|
|
$
|
1,266,435,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Assets Consist of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.001
par value
|
|
$
|
12,634
|
|
|
$
|
44,995
|
|
|
$
|
52,163
|
|
|
$
|
(39,491
|
)
|
(3)
|
|
|
$
|
70,301
|
|
|
Paid-in
capital in excess of par
|
|
|
301,552,572
|
|
|
|
764,227,682
|
|
|
|
746,486,768
|
|
|
|
(906,408
|
)
|
(2)
|
|
|
|
1,811,400,105
|
|
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
39,491
|
|
(3)
|
|
|
|
|
|
|
Undistributed
(distributions in excess of) net investment income
|
|
|
21,527
|
|
|
|
(14,254
|
)
|
|
|
1,258,770
|
|
|
|
(1,258,770
|
)
|
(1)
|
|
|
|
7,273
|
|
|
Accumulated
net realized loss
|
|
|
(1,497,798
|
)
|
|
|
(69,442,442
|
)
|
|
|
(3,387,164
|
)
|
|
|
–
|
|
|
|
|
|
(74,327,404
|
)
|
|
Net
unrealized appreciation/depreciation
|
|
|
(72,254,365
|
)
|
|
|
(214,410,798
|
)
|
|
|
(184,050,066
|
)
|
|
|
–
|
|
|
|
|
|
(470,715,229
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Assets
|
|
$
|
227,834,570
|
|
|
$
|
480,405,183
|
|
|
$
|
560,360,471
|
|
|
$
|
(2,165,178
|
)
|
|
|
|
$
|
1,266,435,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value
†††
|
|
$
|
18.03
|
|
|
$
|
10.68
|
|
|
$
|
10.74
|
|
|
|
|
|
|
|
|
$
|
18.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Investments
at cost – unaffiliated
|
|
$
|
310,850,579
|
|
|
$
|
667,387,045
|
|
|
$
|
770,192,269
|
|
|
|
|
|
|
|
|
$
|
1,748,429,893
|
|
|
**Securities
on loan at value
|
|
$
|
1,121,490
|
|
|
$
|
–
|
|
|
$
|
2,790,531
|
|
|
|
|
|
|
|
|
$
|
3,912,021
|
|
|
***Investments
at cost – affiliated
|
|
$
|
1,130,500
|
|
|
$
|
–
|
|
|
$
|
2,812,950
|
|
|
|
|
|
|
|
|
$
|
3,943,450
|
|
|
†
Foreign
currency at cost
|
|
$
|
14,442
|
|
|
$
|
29,113,835
|
|
|
$
|
37,300
|
|
|
|
|
|
|
|
|
$
|
29,165,577
|
|
|
††
Premiums
received
|
|
$
|
8,453,687
|
|
|
$
|
9,618,280
|
|
|
$
|
20,375,800
|
|
|
|
|
|
|
|
|
$
|
38,447,767
|
|
|
†††
Shares
Outstanding
|
|
|
12,634,026
|
|
|
|
44,995,192
|
|
|
|
52,162,868
|
|
|
|
(39,491,215
|
)
|
(3)
|
|
|
|
70,300,871
|
|
_____________________
|
(1)
|
Reflects
the distribution of undistributed net investment income of $1,258,770
attributable to BWC.
|
|
(2)
|
Reflects
the charge for estimated reorganization expenses of $906,408 of which
$238,992 was attributable to BOE, $316,585 was attributable to BFD and
$350,831 was attributable to BWC, respectively.
|
|
(3)
|
Reflects
the capitalization adjustments giving the effect of the transfer of shares
of BOE which BFD and BWC shareholders will receive as if the
Reorganization had taken place on October 31, 2008. The foregoing should
not be relied upon to reflect the number of shares of BOE that actually
will be received on or after such
date.
|
Pro
Forma Condensed Combined Statement of Operations for
BlackRock
Global Opportunities Equity Trust (BOE)
BlackRock
Global Equity Income Trust (BFD)
BlackRock
World Investment Trust (BWC)
For
the Year Ended October 31, 2008 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro
Forma Combined Fund (BFD and BWC into BOE) (1)
|
|
|
Investment
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
|
|
$
|
8,751,778
|
|
|
$
|
27,190,695
|
|
|
$
|
21,349,768
|
|
|
$
|
-
|
|
|
|
|
|
|
$
|
57,292,241
|
|
|
Interest
|
|
|
767,629
|
|
|
|
1,179,432
|
|
|
|
1,882,122
|
|
|
|
-
|
|
|
|
|
|
|
|
3,829,183
|
|
|
Securities
lending – affiliated
|
|
|
51,605
|
|
|
|
-
|
|
|
|
147,177
|
|
|
|
-
|
|
|
|
|
|
|
|
198,782
|
|
|
Foreign
taxes withheld
|
|
|
(527,018
|
)
|
|
|
(1,403,893
|
)
|
|
|
(1,363,029
|
)
|
|
|
-
|
|
|
|
|
|
|
|
(3,293,940
|
)
|
|
Total
income
|
|
|
9,043,994
|
|
|
|
26,966,234
|
|
|
|
22,016,038
|
|
|
|
-
|
|
|
|
|
|
|
|
58,026,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
advisory
|
|
|
3,304,776
|
|
|
|
7,151,577
|
|
|
|
8,194,636
|
|
|
|
-
|
|
|
|
|
|
|
|
18,650,989
|
|
|
Printing
|
|
|
63,817
|
|
|
|
157,954
|
|
|
|
165,111
|
|
|
|
(67,382
|
)
|
|
|
(2
|
)
|
|
|
319,500
|
|
|
Professional
|
|
|
95,298
|
|
|
|
147,099
|
|
|
|
152,943
|
|
|
|
(175,841
|
)
|
|
|
(2
|
)
|
|
|
219,499
|
|
|
Custodian
|
|
|
200,538
|
|
|
|
294,572
|
|
|
|
334,541
|
|
|
|
(390,443
|
)
|
|
|
(2
|
)
|
|
|
439,208
|
|
|
Officer
and Trustees
|
|
|
23,496
|
|
|
|
93,109
|
|
|
|
95,488
|
|
|
|
(137,093
|
)
|
|
|
(2
|
)
|
|
|
75,000
|
|
|
Insurance
|
|
|
17,416
|
|
|
|
39,508
|
|
|
|
43,380
|
|
|
|
7,502
|
|
|
|
(2
|
)
|
|
|
107,806
|
|
|
Transfer
agent
|
|
|
13,754
|
|
|
|
10,843
|
|
|
|
14,489
|
|
|
|
(28,586
|
)
|
|
|
(2
|
)
|
|
|
10,500
|
|
|
Miscellaneous
|
|
|
1,699
|
|
|
|
18,958
|
|
|
|
14,434
|
|
|
|
2,984
|
|
|
|
(2
|
)
|
|
|
38,075
|
|
|
Registration
|
|
|
43,819
|
|
|
|
16,382
|
|
|
|
14,530
|
|
|
|
(29,731
|
)
|
|
|
(2
|
)
|
|
|
45,000
|
|
|
Total
Expenses
|
|
|
3,764,613
|
|
|
|
7,930,002
|
|
|
|
9,029,552
|
|
|
|
(818,590
|
)
|
|
|
|
|
|
|
19,905,577
|
|
|
Less
fees paid indirectly
|
|
|
(224
|
)
|
|
|
(1,942
|
)
|
|
|
(382
|
)
|
|
|
-
|
|
|
|
|
|
|
|
(2,548
|
)
|
|
Total
expenses after fees paid indirectly
|
|
|
3,764,389
|
|
|
|
7,928,060
|
|
|
|
9,029,170
|
|
|
|
(818,590
|
)
|
|
|
|
|
|
|
19,903,029
|
|
|
Net
investment income
|
|
|
5,279,605
|
|
|
|
19,038,174
|
|
|
|
12,986,868
|
|
|
|
818,590
|
|
|
|
|
|
|
|
38,123,237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized
and Unrealized Gain (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
realized gain (loss) from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
3,815,970
|
|
|
|
(97,682,952
|
)
|
|
|
8,402,472
|
|
|
|
-
|
|
|
|
|
|
|
|
(85,464,510
|
)
|
|
Foreign
currency
|
|
|
(334,493
|
)
|
|
|
(546,527
|
)
|
|
|
(532,517
|
)
|
|
|
-
|
|
|
|
|
|
|
|
(1,413,537
|
)
|
|
Futures
|
|
|
-
|
|
|
|
(16,948,409
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
(16,948,409
|
)
|
|
Options
written
|
|
|
20,373,804
|
|
|
|
45,937,146
|
|
|
|
49,684,859
|
|
|
|
-
|
|
|
|
|
|
|
|
115,995,809
|
|
|
|
|
|
23,855,281
|
|
|
|
(69,240,742
|
)
|
|
|
57,554,814
|
|
|
|
-
|
|
|
|
|
|
|
|
12,169,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
change in unrealized appreciation/depreciation on:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
(170,715,701
|
)
|
|
|
(256,289,182
|
)
|
|
|
(429,377,536
|
)
|
|
|
-
|
|
|
|
|
|
|
|
(856,382,419
|
)
|
|
Foreign
currency
|
|
|
(36,466
|
)
|
|
|
(2,351,679
|
)
|
|
|
(76,851
|
)
|
|
|
-
|
|
|
|
|
|
|
|
(2,464,996
|
)
|
|
Futures
|
|
|
-
|
|
|
|
(5,329,862
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
(5,329,862
|
)
|
|
Options
written
|
|
|
15,656,508
|
|
|
|
(4,140,287
|
)
|
|
|
48,562,174
|
|
|
|
-
|
|
|
|
|
|
|
|
60,078,395
|
|
|
|
|
|
(155,095,659
|
)
|
|
|
(268,111,010
|
)
|
|
|
(380,892,213
|
)
|
|
|
-
|
|
|
|
|
|
|
|
(804,098,882
|
)
|
|
Total
realized and unrealized loss
|
|
|
(131,240,378
|
)
|
|
|
(337,351,752
|
)
|
|
|
(323,337,399
|
)
|
|
|
-
|
|
|
|
|
|
|
|
(791,929,529
|
)
|
|
Net
Increase (Decrease) in Net Assets Resulting from
Operations
|
|
$
|
(125,960,773
|
)
|
|
$
|
(318,313,578
|
)
|
|
$
|
(310,350,531
|
)
|
|
$
|
818,590
|
|
|
|
|
|
|
$
|
(753,806,292
|
)
|
_____________________
|
(1)
|
This
Pro Forma Condensed Combined Statement of Operations excludes
non-recurring aggregate estimated Reorganization expenses of $906,408 of
which $238,992 was attributable to BOE, $316,585 was attributable to BFD
and $350,831 was attributable to BWC, respectively.
|
|
|
|
|
(2)
|
Reflects
the estimated savings as a result of the Reorganization through fewer
audits and consolidation of accounting, custody, legal, printing and other
services.
|
Notes
to Pro Forma Condensed Combined Financial Statements
BlackRock
Global Opportunities Equity Trust
(Unaudited)
NOTE
1—Basis of Combination:
The Board
of Trustees (the "Board") of BlackRock Global Equity Income Trust ("BFD"),
BlackRock World Investment Trust ("BWC" and, together with BFD, each a "Target
Fund" and, collectively, the "Target Funds") and BlackRock Global Opportunities
Equity Trust ("BOE" or the "Acquiring Fund" and, together with BFD and BWC, the
"Fund" or the "Funds") at a meeting held on February 6, 2009 each approved the
following: (a) a proposed tax-free reorganization in which BOE will acquire
substantially all of the assets of BFD in exchange for shares of BOE and the
assumption by BOE of substantially all of the liabilities of BFD (the "BFD
Reorganization") and (b) a proposed tax-free reorganization in which BOE will
acquire substantially all of the assets of BWC in exchange for shares of BOE and
the assumption by BOE of substantially all of the liabilities of BWC (the "BWC
Reorganization" and, together with the BFD Reorganization, each a
"Reorganization" and, collectively, the "Reorganizations"). Pursuant
to the Reorganizations, subject to separate approvals by the stockholders of BFD
and BWC, BFD and BWC will transfer all of their assets, subject to their
liabilities, to BOE, in exchange for a number of shares of BOE equal in value to
the net assets of BFD and BWC (the "Exchange"). If the Exchange is
consummated, shares of BOE then will be distributed to BFD and BWC shareholders
on a pro rata basis in liquidation of BFD and BWC.
The
Exchange will be accounted for as a tax-free merger of investment
companies. The unaudited pro forma condensed combined schedule of
investments and condensed combined statement of assets and liabilities reflect
the financial position of the Funds at October 31, 2008. The
unaudited pro forma condensed combined statement of operations reflects the
results of operations of the Funds for the twelve months ended October 31,
2008. These statements have been derived from the books and records
of the Funds utilized in calculating daily net asset value at the dates
indicated above in conformity with accounting principles generally accepted in
the United States of America. As of October 31, 2008, all the
securities held by the Target Funds comply with the compliance guidelines and/or
investment restrictions of BOE. The historical cost of investment
securities will be carried forward to the surviving entity. The
fiscal year ends for the Funds is October 31.
The
accompanying pro forma condensed combined financial statements should be read in
conjunction with the historical financial statements of the Funds included or
incorporated by reference in their respective Statements of Additional
Information. Such pro forma condensed combined financial statements
are presented for information only and may not necessarily be representative of
what the actual combined financial statements would have been had the Exchange
occurred on October 31, 2008. Following the Exchange, BOE will be the
accounting survivor.
If the
Reorganizations are completed, the costs associated with the Reorganizations,
including the costs associated with the stockholder meeting, will be borne
directly by the respective Fund incurring the expenses or allocated among the
Funds based upon some reasonable methodology as appropriate. The estimated
expenses of the Reorganization attributable to BFD, BWC and BOE are $316,585,
$350,831 and $238,992, respectively.
NOTE
2—BOE Fund Valuation:
Equity
investments traded on a recognized securities exchange or the NASDAQ Global
Market System are valued at the last reported sale price that day or the NASDAQ
official closing price, if applicable. For equity investments traded on more
than one exchange, the last reported sale price on the exchange where the stock
is primarily traded is used. Equity investments traded on a recognized exchange
for which there were no sales on that day are valued at the last available bid
price. If no bid price is available, the prior day's price will be used, unless
it is determined that such prior day's price no longer
reflects
the fair value of the security. Investments in open-end investment companies are
valued at net asset value each business day. Financial futures contracts traded
on exchanges are valued at their last sale price. Foreign currency exchange
rates will be determined as of the close of business on the NYSE. Swap
agreements are valued utilizing quotes received daily by the Trusts' pricing
service or through brokers. Short-term securities are valued at amortized cost.
The Trusts value their investments in the BlackRock Liquidity Series, LLC Money
Market Series at fair value, which is ordinarily based upon their pro rata
ownership in the net assets of the underlying fund.
Exchange-traded
options are valued at the mean between the last bid and ask prices at the close
of the options market in which the options trade. An exchange-traded option for
which there is no mean price is valued at the last bid (long positions) or ask
(short positions) price. If no bid or ask price is available, the prior day's
price will be used, unless it is determined that such prior day's price no
longer reflects the fair value of the option. Over-the-counter options are
valued by an independent pricing service using a mathematical model which
incorporates a number of market data factors.
In the
event that application of these methods of valuation results in a price for an
investment which is deemed not to be representative of the market value of such
investment, the investment will be valued by a method approved by the Board as
reflecting fair value ("Fair Value Assets"). When determining the price for Fair
Value Assets, the investment advisor and/or sub-advisor seeks to determine the
price that each Trust might reasonably expect to receive from the current sale
of that asset in an arm's-length transaction. Fair value determinations shall be
based upon all available factors that the investment advisor and/or sub-advisor
deems relevant. The pricing of all Fair Value Assets is subsequently reported to
the Board or a committee thereof.
Generally,
trading in foreign securities is substantially completed each day at various
times prior to the close of business on the New York Stock Exchange ("NYSE").
The values of such securities used in computing the net assets of the Trusts are
determined as of such times. Foreign currency exchange rates will be determined
as of the close of business on the NYSE. Occasionally, events affecting the
values of such securities and such exchange rates may occur between the times at
which they are determined and the close of business on the NYSE that may not be
reflected in the computation of the Trust's net assets. If events (for example,
a company announcement, market volatility or a natural disaster) occur during
such periods that are expected to materially affect the value of such
securities, those securities will be valued at their fair value as determined in
good faith by the Board or by the investment advisor using a pricing service
and/or procedures approved by the Board.
NOTE
3—Capital Shares:
The pro
forma net asset value per share assumes the issuance of shares of BOE that would
have been issued at October 31, 2008 in connection with the proposed
Reorganizations. The number of shares assumed to be issued is equal
to the net asset value of shares of BFD and BWC, as of October 31, 2008, divided
by the net asset value per share of the shares of BOE as of October 31,
2008. The pro forma number of shares outstanding for the combined
fund consists of the following at October 31, 2008:
|
Total
Outstanding
BOE
Shares
Pre-Combination
|
Additional
Shares
Assumed
Issued In
BFD
Reorganization
|
Additional
Shares
Assumed
Issued In
BWC
Reorganization
|
Total
Outstanding
BOE
Shares
Post-Combination
|
|
12,634,026
|
26,650,126
|
31,016,719
|
70,300,871
|
NOTE
4—Pro Forma Operating Expenses:
The pro
forma condensed combined statement of operations for the twelve-month period
ending October 31, 2008, as adjusted, giving effect to the Exchange reflects
changes in expenses of BOE as if the Exchange was consummated on November 1,
2008. Although it is anticipated that there will be an elimination of
certain duplicative expenses because of the Exchange, the actual amount of such
expenses cannot be determined because it is not possible to predict the cost of
future operations.
NOTE
5—Federal Income Taxes:
The
Acquiring Fund and each Target Fund each has elected to be taxed as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended (the
"Code"). If the Exchange is consummated, the Acquiring Fund would seek to
continue to qualify as a regulated investment company, if such qualification is
in the best interests of its shareholders, by complying with the provisions
available to certain investment companies, as defined in applicable sections of
the Code, and to make distributions of taxable income sufficient to relieve it
from all, or substantially all, U.S. federal income taxes. In
addition, the Target Funds will make any required income or capital gain
distributions prior to consummation of this Exchange, in accordance with
provisions of the Code relating to tax-free mergers of investment
companies.
The Funds
have capital loss carryforwards that, in the absence of the Reorganizations,
would generally be available to offset their respective capital
gains. If, however, either or both of the Reorganizations were to
occur, then the Acquiring Fund would undergo an “ownership change” for U.S.
federal income tax purposes (because the Acquiring Fund is significantly smaller
than either of the Target Funds) and, accordingly, the Acquiring Fund’s use of
its own capital loss carryforwards (and certain “built-in-losses”) would be
significantly limited by the operation of the tax loss limitation rules of the
Code. In addition, if both the Reorganizations were to occur, then
each of the Target Funds would undergo an “ownership change” for U.S. federal
income tax purposes (because each Target Fund is smaller than the combined
Acquiring Fund and both Target Funds) and, accordingly, the Acquiring Fund’s use
of each Target Fund’s capital loss carryforwards (and certain “built-in-losses”)
would be significantly limited by the operation of the tax loss limitation rules
of the Code. For each Fund, the Code generally limits the amount of
pre-ownership change losses that may be used to offset post-ownership change
income to a specific “annual loss limitation amount” (generally the product of
the fair market value of the stock of such fund (with certain adjustments))
immediately prior to the Reorganization and a rate established by the IRS (for
example, the rate is 5.49% for January, 2009). Subject to certain
limitations, any unused portion of these losses may be available in subsequent
years. If only one of the two Reorganizations, and not both, were to
occur, then the participating Target Fund’s capital loss carryforwards, which
the Acquiring Fund would succeed to in the Reorganization, should not be limited
solely by reason of the Reorganization (because each Target Fund is
significantly larger than the Acquiring Fund).
The
identified cost of investments for the Acquiring Fund and the Target Funds is
substantially the same for both financial accounting and federal income tax
purposes. The tax cost of investments will remain unchanged for the combined
entity.
APPENDIX
C
PROXY
VOTING POLICIES
For the
BlackRock-Advised Funds
October
31, 2008
Table of
Contents
Page
|
Introduction
|
3
|
|
Proxy
Voting Policies
|
3
|
|
Boards
of Trustees
|
3
|
|
Auditors
|
4
|
|
Compensation
and Benefits
|
4
|
|
Capital
Structure
|
4
|
|
Corporate
Charter and By-Laws
|
4
|
|
Corporate
Meetings
|
4
|
|
Investment
Companies
|
4
|
|
Environmental
and Social Issues
|
5
|
|
Reports
to the Board
|
5
|
Introduction
The
Trustees/Directors ("Trustees") of the BlackRock-Advised Funds (the "Funds")
have the responsibility for voting proxies relating to portfolio securities of
the Funds, and have determined that it is in the best interests of the Funds and
their shareholders to delegate that responsibility to BlackRock Advisors, LLC
and its affiliated U.S. registered investment advisers ("BlackRock"), the
investment adviser to the Funds, as part of BlackRock's authority to manage,
acquire and dispose of account assets. The Trustees hereby direct
BlackRock to vote such proxies in accordance with this Policy, and any proxy
voting guidelines that the Adviser determines are appropriate and in the best
interests of the Funds' shareholders and which are consistent with the
principles outlined in this Policy. The Trustees have authorized
BlackRock to utilize an unaffiliated third-party as its agent to vote portfolio
proxies in accordance with this Policy and to maintain records of such portfolio
proxy voting.
When
BlackRock votes proxies for an advisory client that has delegated to BlackRock
proxy voting authority, BlackRock acts as the client's agent. Under
the Investment Advisers Act of 1940 (the "Advisers Act"), an investment adviser
is a fiduciary that owes each of its clients a duty of care and loyalty with
respect to all services the adviser undertakes on the client's behalf, including
proxy voting. BlackRock is therefore subject to a fiduciary duty to
vote proxies in a manner BlackRock believes is consistent with the client's best
interests.
1
When voting proxies for the Funds,
BlackRock's primary objective is to make voting decisions solely in the best
interests of the Funds' shareholders. In fulfilling its obligations
to shareholders, BlackRock will seek to act in a manner that it believes is most
likely to enhance the economic value of the underlying securities held in client
accounts.
2
It
is imperative that BlackRock considers the interests of Fund shareholders, and
not the interests of BlackRock, when voting proxies and that real (or perceived)
material conflicts that may arise between BlackRock's interest and those of
BlackRock's clients are properly addressed and resolved.
Advisers
Act Rule 206(4)-6 was adopted by the SEC in 2003 and requires, among other
things, that an investment adviser that exercises voting authority over clients'
proxy voting adopt policies and procedures reasonably designed to ensure that
the adviser votes proxies in the best interests of clients, discloses to its
clients information about those policies and procedures and also discloses to
clients how they may obtain information on how the adviser has voted their
proxies.
BlackRock
has adopted separate but substantially similar guidelines and procedures that
are consistent with the principles of this Policy. BlackRock's Equity
Investment Policy Oversight Committee, or a sub-committee thereof (the
"Committee"), addresses proxy voting issues on behalf of BlackRock and its
clients, including the Funds. The Committee is comprised of senior
members of BlackRock's Portfolio Management and Administration Groups and is
advised by BlackRock's Legal and Compliance Department.
Proxy
Voting Policies
A. Boards
of Trustees
These
proposals concern those issues submitted to shareholders relating to the
composition of the board of trustees of companies other than investment
companies. As a general matter, the Funds believe that a company's
board of trustees (rather than shareholders) is most likely to have access to
important,
__________________________________
|
1
|
Letter
from Harvey L. Pitt, Chairman, SEC, to John P.M. Higgins, President, Ram
Trust Services (February 12, 2002) (Section 206 of the
Investment Advisers Act imposes a fiduciary responsibility to vote proxies
fairly and in the best interests of clients); SEC Release No. IA-2106
(February 3, 2003).
|
|
2
|
Other
considerations, such as social, labor, environmental or other policies,
may be of interest to particular clients. While BlackRock is cognizant of
the importance of such considerations, when voting proxies it will
generally take such matters into account only to the extent that they have
a direct bearing on the economic value of the underlying securities. To
the extent that a BlackRock client, such as the Funds, desires to pursue a
particular social, labor, environmental or other agenda through the proxy
votes made for its securities held through BlackRock as investment
adviser, BlackRock encourages the client to consider retaining direct
proxy voting authority or to appoint independently a special proxy voting
fiduciary other than BlackRock.
|
nonpublic
information regarding a company's business and prospects, and is therefore
best-positioned to set corporate policy and oversee management. The
Funds therefore believe that the foundation of good corporate governance is the
election of qualified, independent corporate Trustees who are likely to
diligently represent the interests of shareholders and oversee management of the
corporation in a manner that will seek to maximize shareholder value over
time. In individual cases, consideration may be given to a Trustee
nominee's history of representing shareholder interests as a Trustee of other
companies, or other factors to the extent deemed relevant by the
Committee.
B. Auditors
These
proposals concern those issues submitted to shareholders related to the
selection of auditors. As a general matter, the Funds believe
that corporate auditors have a responsibility to represent the interests of
shareholders and provide an independent view on the propriety of financial
reporting decisions of corporate management. While the Funds
anticipate that the Committee will generally defer to a corporation's choice of
auditor, in individual cases, consideration may be given to an auditor's history
of representing shareholder interests as auditor of other companies, to the
extent deemed relevant.
C. Compensation
and Benefits
These
proposals concern those issues submitted to shareholders related to management
compensation and employee benefits. As a general matter, the Funds
favor disclosure of a company's compensation and benefit policies and oppose
excessive compensation, but believe that compensation matters are normally best
determined by a corporation's board of trustees, rather than
shareholders. Proposals to "micro-manage" a company's compensation
practices or to set arbitrary restrictions on compensation or benefits should
therefore generally not be supported by the Committee.
D. Capital
Structure
These
proposals relate to various requests, principally from management, for approval
of amendments that would alter the capital structure of a company, such as an
increase in authorized shares. As a general matter, the Funds expect
that the Committee will support requests that it believes enhance the rights of
common shareholders and oppose requests that appear to be unreasonably
dilutive.
E. Corporate
Charter and By-Laws
These
proposals relate to various requests for approval of amendments to a
corporation's charter or by-laws, principally for the purpose of adopting or
redeeming "poison pills". As a general matter, the Funds expect that
the Committee will oppose poison pill provisions unless, after consultation with
the portfolio managers, it is determined that supporting the poison pill is in
the best interest of shareholders.
F. Corporate
Meetings
These are
routine proposals relating to various requests regarding the formalities of
corporate meetings. As a general matter, the Funds expect that
the Committee will support company management except where the proposals are
substantially duplicative or serve no legitimate business purpose.
G. Investment
Companies
These
proposals relate to proxy issues that are associated solely with holdings of
shares of investment companies, including, but not limited to, investment
companies for which BlackRock provides investment advisory, administrative
and/or other services. As with other types of companies, the Funds
believe that an investment company's board of trustees (rather than its
shareholders) is best positioned to set fund policy and oversee
management. However, the Funds oppose granting Boards of Trustees
authority over certain matters, such as changes to a fund's investment
objective, that the Investment Company Act of 1940 envisions will be approved
directly by shareholders.
H. Environmental
and Social Issues
These are
shareholder proposals to limit corporate conduct in some manner that relates to
the shareholder's environmental or social concerns. The Funds
generally believe that annual shareholder meetings are inappropriate forums for
the discussion of larger social issues, and oppose shareholder resolutions
"micro-managing" corporate conduct or requesting release of information that
would not help a shareholder evaluate an investment in the corporation as an
economic matter. While the Funds are generally supportive of
proposals to require corporate disclosure of matters that seem relevant and
material to the economic interests of shareholders, the Funds generally are not
supportive of proposals to require disclosure of corporate matters for other
purposes.
Reports to the
Board
BlackRock
will report to the trustees on proxy votes it has made on behalf of the Funds at
least annually.
APPENDIX
D
GENERAL
CHARACTERISTICS AND RISKS
OF
STRATEGIC TRANSACTIONS
In order
to manage the risk of its securities portfolio, or to enhance income or gain as
described in the prospectus, the Acquiring Fund will engage in Strategic
Transactions. The Acquiring Fund will engage in such activities in the
Investment Adviser’s discretion, and may not necessarily be engaging in such
activities when movements in interest rates that could affect the value of the
assets of the Acquiring Fund occur. The Acquiring Fund’s ability to pursue
certain of these strategies may be limited by applicable regulations of the
CFTC. Certain Strategic Transactions may give rise to taxable
income.
Put and Call Options on
Securities and Indices
The
Acquiring Fund may purchase and sell put and call options on securities and
indices. A put option gives the purchaser of the option the right to sell and
the writer the obligation to buy the underlying security at the exercise price
during the option period. The Acquiring Fund may also purchase and sell options
on securities indices (“index options”). Index options are similar to options on
securities except that, rather than taking or making delivery of securities
underlying the option at a specified price upon exercise, an index option gives
the holder the right to receive cash upon exercise of the option if the level of
the securities index upon which the option is based is greater, in the case of a
call, or less, in the case of a put, than the exercise price of the option. The
purchase of a put option on a security could protect the Acquiring Fund’s
holdings in a security or a number of securities against a substantial decline
in the market value. A call option gives the purchaser of the option the right
to buy and the seller the obligation to sell the underlying security or index at
the exercise price during the option period or for a specified period prior to a
fixed date. The purchase of a call option on a security could protect the
Acquiring Fund against an increase in the price of a security that it intended
to purchase in the future. In the case of either put or call options that it has
purchased, if the option expires without being sold or exercised, the Acquiring
Fund will experience a loss in the amount of the option premium plus any related
commissions. When the Acquiring Fund sells put and call options, it receives a
premium as the seller of the option. The premium that the Acquiring Fund
receives for selling the option will serve as a partial offset, in the amount of
the option premium, against changes in the value of the securities in its
portfolio. During the term of the option, however, a covered call seller has, in
return for the premium on the option, given up the opportunity for capital
appreciation above the exercise price of the option if the value of the
underlying security increases, but has retained the risk of loss should the
price of the underlying security decline. Conversely, a secured put seller
retains the risk of loss should the market value of the underlying security
decline below the exercise price of the option, less the premium received on the
sale of the option. The Acquiring Fund is authorized to purchase and sell
exchange listed options and over-the-counter options (“OTC Options”) which are
privately negotiated with the counterparty. Listed options are issued by the
Options Clearing Corporation (“OCC”) which guarantees the performance of the
obligations of the parties to such options.
The Acquiring Fund’s
ability to close out its position as a purchaser or seller of an exchange listed
put or call option is dependent upon the existence of a liquid secondary market
on option exchanges. Among the possible reasons for the absence of a liquid
secondary market on an exchange are: (i) insufficient trading interest in
certain options; (ii) restrictions on transactions imposed by an exchange; (iii)
trading halts, suspensions or other restrictions imposed with respect to
particular classes or series of options or underlying securities; (iv)
interruption of the normal operations on an exchange; (v) inadequacy of the
facilities of an exchange or OCC to handle current trading volume; or (vi) a
decision by one or more exchanges to discontinue the trading of options (or a
particular class or series of options), in which event the secondary market on
that exchange (or in that class or series of options) would cease to exist,
although outstanding options on that exchange that had been listed by the OCC as
a result of trades on that exchange would generally continue to be exercisable
in accordance with their terms. OTC Options are purchased from or sold to
dealers, financial institutions or other counterparties which have entered into
direct agreements with the Acquiring Fund. With OTC Options, such variables as
expiration date, exercise price
and
premium will be agreed upon between the Acquiring Fund and the counterparty,
without the intermediation of a third party such as the OCC. If the counterparty
fails to make or take delivery of the securities underlying an option it has
written, or otherwise settle the transaction in accordance with the terms of
that option as written, the Acquiring Fund would lose the premium paid for the
option as well as any anticipated benefit of the transaction.
The hours
of trading for options on securities may not conform to the hours during which
the underlying securities are traded. To the extent that the option markets
close before the markets for the underlying securities, significant price
movements can take place in the underlying markets that cannot be reflected in
the option markets.
Futures Contracts and
Related Options
Characteristics
.
The
Acquiring Fund may sell financial futures contracts or purchase put and call
options on such futures as an offset against anticipated market movements. The
sale of a futures contract creates an obligation by the Acquiring Fund, as
seller, to deliver the specific type of financial instrument called for in the
contract at a specified future time for a specified price. Options on futures
contracts are similar to options on securities except that an option on a
futures contract gives the purchaser the right in return for the premium paid to
assume a position in a futures contract (a long position if the option is a call
and a short position if the option is a put).
Margin
Requirements
.
At
the time a futures contract is purchased or sold, the Acquiring Fund must
allocate cash or securities as a deposit payment (“initial margin”). It is
expected that the initial margin that the Acquiring Fund will pay may range from
approximately 1% to approximately 5% of the value of the securities or
commodities underlying the contract. In certain circumstances, however, such as
periods of high volatility, the Acquiring Fund may be required by an exchange to
increase the level of its initial margin payment. Additionally, initial margin
requirements may be increased generally in the future by regulatory action. An
outstanding futures contract is valued daily and the payment in case of
“variation margin” may be required, a process known as “marking to the market.”
Transactions in listed options and futures are usually settled by entering into
an offsetting transaction, and are subject to the risk that the position may not
be able to be closed if no offsetting transaction can be arranged.
Limitations on
Use of Futures and Options on Futures
.
The
Acquiring Fund’s use of futures and options on futures will in all cases be
consistent with applicable regulatory requirements and in particular the rules
and regulations of the CFTC. The Acquiring Fund currently may enter into such
transactions without limit for bona fide strategic purposes, including risk
management and duration management and other portfolio strategies. The Acquiring
Fund may also engage in transactions in futures contracts or related options for
non-strategic purposes to enhance income or gain provided that the Acquiring
Fund will not enter into a futures contract or related option (except for
closing transactions) for purposes other than bona fide strategic purposes, or
risk management including duration management if, immediately thereafter, the
sum of the amount of its initial deposits and premiums on open contracts and
options would exceed 5% of the Acquiring Fund’s liquidation value,
i.e.
, net assets (taken at
current value); provided, however, that in the case of an option that is
in-the-money at the time of the purchase, the in-the-money amount may be
excluded in calculating the 5% limitation. The above policies are
non-fundamental and may be changed by the Acquiring Fund’s board of trustees at
any time. Also, when required, an account of cash equivalents designated on the
books and records will be maintained and marked to market on a daily basis in an
amount equal to the market value of the contract.
Segregation and
Cover Requirements
.
Futures
contracts, interest rate swaps, caps, floors and collars, short sales, reverse
repurchase agreements and dollar rolls, and listed or OTC Options on securities,
indices and futures contracts sold by the Acquiring Fund are generally subject
to earmarking and coverage requirements of either the CFTC or the SEC, with the
result that, if the Acquiring Fund does not hold the security or futures
contract underlying the instrument, the Acquiring Fund will be required to
designate on its books and records an ongoing basis, cash, U.S. government
securities, or other liquid high grade debt obligations in an amount at least
equal to the Acquiring Fund’s obligations with respect to such
instruments.
Such amounts
fluctuate as the obligations increase or decrease
.
The
earmarking requirement can result in the Acquiring Fund maintaining securities
positions it would otherwise liquidate, segregating assets at a time when it
might be disadvantageous to do so or otherwise restrict portfolio
management.
Strategic
Transactions Present Certain Risks
.
With
respect to Strategic Transactions and risk management, the variable degree of
correlation between price movements of strategic instruments and price movements
in the position being offset create the possibility that losses using the
strategy may be greater than gains in the value of the Acquiring Fund’s
position. The same is true for such instruments entered into for income or
gain.
In
addition, certain instruments and markets may not be liquid in all
circumstances. As a result, in volatile markets, the Acquiring Fund may not be
able to close out a transaction without incurring losses substantially greater
than the initial deposit. Although the contemplated use of these instruments
predominantly for Strategic Transactions should tend to minimize the risk of
loss due to a decline in the value of the position, at the same time they tend
to limit any potential gain which might result from an increase in the value of
such position. The ability of the Acquiring Fund to successfully utilize
Strategic Transactions will depend on the Investment Adviser’s ability to
predict pertinent market movements and sufficient correlations, which cannot be
assured. Finally, the daily deposit requirements in futures contracts that the
Acquiring Fund has sold create an on going greater potential financial risk than
do options transactions, where the exposure is limited to the cost of the
initial premium. Losses due to the use of Strategic Transactions will reduce net
asset value.
Regulatory
Considerations
.
The
Acquiring Fund has claimed an exclusion from the term “commodity pool operator”
under the Commodity Exchange Act and, therefore, is not subject to registration
or regulation as a commodity pool operator under the Commodity Exchange
Act.
PART
C: OTHER INFORMATION
ITEM
15. Indemnification
Articles
5.1 and 5.2 of the Registrant's Agreement and Declaration of Trust, a copy of
which is filed as an exhibit hereto, provides for indemnification, as set forth
below:
"
5.1 No Personal Liability of
Shareholders, Trustees, etc.
No Shareholder of the Trust shall be subject
in such capacity to any personal liability whatsoever to any Person in
connection with Trust Property or the acts, obligations or affairs of the Trust.
Shareholders shall have the same limitation of personal liability as is extended
to stockholders of a private corporation for profit incorporated under the
Delaware General Corporation Law. No Trustee or officer of the Trust shall be
subject in such capacity to any personal liability whatsoever to any Person,
save only liability to the Trust or its Shareholders arising from bad faith,
willful misfeasance, gross negligence or reckless disregard for his duty to such
Person; and, subject to the foregoing exception, all such Persons shall look
solely to the Trust Property for satisfaction of claims of any nature arising in
connection with the affairs of the Trust. If any Shareholder, Trustee or
officer, as such, of the Trust, is made a party to any suit or proceeding to
enforce any such liability, subject to the foregoing exception, he shall not, on
account thereof, be held to any personal liability. Any repeal or modification
of this Section 5.1 shall not adversely affect any right or protection of a
Trustee or officer of the Trust existing at the time of such repeal or
modification with respect to acts or omissions occurring prior to such repeal or
modification.
5.2 Mandatory Indemnification.
(a) The Trust hereby agrees to indemnify each person who at any time serves as a
Trustee or officer of the Trust (each such person being an "indemnitee") against
any liabilities and expenses, including amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and reasonable counsel fees
reasonably incurred by such indemnitee in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or criminal,
before any court or administrative or investigative body in which he may be or
may have been involved as a party or otherwise or with which he may be or may
have been threatened, while acting in any capacity set forth in this Article V
by reason of his having acted in any such capacity, except with respect to any
matter as to which he shall not have acted in good faith in the reasonable
belief that his action was in the best interest of the Trust or, in the case of
any criminal proceeding, as to which he shall have had reasonable cause to
believe that the conduct was unlawful, provided, however, that no indemnitee
shall be indemnified hereunder against any liability to any person or any
expense of such indemnitee arising by reason of (i) willful misfeasance, (ii)
bad faith, (iii) gross negligence, or (iv) reckless disregard of the duties
involved in the conduct of his position (the conduct referred to in such clauses
(i) through (iv) being sometimes referred to herein as "disabling conduct").
Notwithstanding the foregoing, with respect to any action, suit or other
proceeding voluntarily prosecuted by any indemnitee as plaintiff,
indemnification shall be mandatory only if the prosecution of such action, suit
or other proceeding by such indemnitee (1) was authorized by a majority of the
Trustees or (2) was instituted by the indemnitee to enforce his or her rights to
indemnification hereunder in a case in which the indemnitee is found to be
entitled to such indemnification. The rights to indemnification set forth in
this Declaration shall continue as to a person who has ceased to be a Trustee or
officer of the Trust and shall inure to the benefit of his or her heirs,
executors and personal and legal representatives. No amendment or restatement of
this Declaration or repeal of any of its provisions shall limit or eliminate any
of the benefits provided to any person who at any time is or was a Trustee or
officer of the Trust or otherwise entitled to indemnification hereunder in
respect of any act or omission that occurred prior to such amendment,
restatement or repeal.
(b)
Notwithstanding the foregoing, no indemnification shall be made hereunder unless
there has been a determination (i) by a final decision on the merits by a court
or other body of competent jurisdiction before whom the issue of entitlement to
indemnification hereunder was brought that such indemnitee is entitled to
indemnification hereunder or, (ii) in the absence of such a decision, by (1) a
majority vote of a quorum of those Trustees who are neither "interested persons"
of the Trust (as defined in Section 2(a)(19) of the 1940 Act) nor parties to the
proceeding ("Disinterested Non-Party Trustees"), that the indemnitee is entitled
to indemnification hereunder, or (2) if such quorum is not obtainable or even if
obtainable, if such
majority
so directs, independent legal counsel in a written opinion concludes that the
indemnitee should be entitled to indemnification hereunder. All determinations
to make advance payments in connection with the expense of defending any
proceeding shall be authorized and made in accordance with the immediately
succeeding paragraph (c) below.
(c) The
Trust shall make advance payments in connection with the expenses of defending
any action with respect to which indemnification might be sought hereunder if
the Trust receives a written affirmation by the indemnitee of the indemnitee's
good faith belief that the standards of conduct necessary for indemnification
have been met and a written undertaking to reimburse the Trust unless it is
subsequently determined that the indemnitee is entitled to such indemnification
and if a majority of the Trustees determine that the applicable standards of
conduct necessary for indemnification appear to have been met. In addition, at
least one of the following conditions must be met: (i) the indemnitee shall
provide adequate security for his undertaking, (ii) the Trust shall be insured
against losses arising by reason of any lawful advances, or (iii) a majority of
a quorum of the Disinterested Non-Party Trustees, or if a majority vote of such
quorum so direct, independent legal counsel in a written opinion, shall
conclude, based on a review of readily available facts (as opposed to a full
trial-type inquiry), that there is substantial reason to believe that the
indemnitee ultimately will be found entitled to indemnification.
(d) The
rights accruing to any indemnitee under these provisions shall not exclude any
other right which any person may have or hereafter acquire under this
Declaration, the By-Laws of the Trust, any statute, agreement, vote of
stockholders or Trustees who are "disinterested persons" (as defined in Section
2(a)(19) of the 1940 Act) or any other right to which he or she may be lawfully
entitled.
(e)
Subject to any limitations provided by the 1940 Act and this Declaration, the
Trust shall have the power and authority to indemnify and provide for the
advance payment of expenses to employees, agents and other Persons providing
services to the Trust or serving in any capacity at the request of the Trust to
the full extent corporations organized under the Delaware General Corporation
Law may indemnify or provide for the advance payment of expenses for such
Persons, provided that such indemnification has been approved by a majority of
the Trustees.
5.3 No Bond Required of
Trustees.
No Trustee shall, as such, be obligated to give any bond or
other security for the performance of any of his duties hereunder.
5.4 No Duty of Investigation; No
Notice in Trust Instruments, etc.
No purchaser, lender, transfer agent or
other person dealing with the Trustees or with any officer, employee or agent of
the Trust shall be bound to make any inquiry concerning the validity of any
transaction purporting to be made by the Trustees or by said officer, employee
or agent or be liable for the application of money or property paid, loaned, or
delivered to or on the order of the Trustees or of said officer, employee or
agent. Every obligation, contract, undertaking, instrument, certificate, Share,
other security of the Trust, and every other act or thing whatsoever executed in
connection with the Trust shall be conclusively taken to have been executed or
done by the executors thereof only in their capacity as Trustees under this
Declaration or in their capacity as officers, employees or agents of the Trust.
The Trustees may maintain insurance for the protection of the Trust Property,
the Shareholders, Trustees, officers, employees and agents in such amount as the
Trustees shall deem adequate to cover possible tort liability, and such other
insurance as the Trustees in their sole judgment shall deem advisable or is
required by the 1940 Act.
5.5 Reliance on Experts, etc.
Each Trustee and officer or employee of the Trust shall, in the performance of
its duties, be fully and completely justified and protected with regard to any
act or any failure to act resulting from reliance in good faith upon the books
of account or other records of the Trust, upon an opinion of counsel, or upon
reports made to the Trust by any of the Trust's officers or employees or by any
advisor, administrator, manager, distributor, selected dealer, accountant,
appraiser or other expert or consultant selected with reasonable care by the
Trustees, officers or employees of the Trust, regardless of whether such counsel
or expert may also be a Trustee."
ITEM
16. Exhibits
|
1)
|
|
Agreement
and Declaration of Trust of the Registrant and amendments thereto
(a)
|
|
2)
|
|
By-laws
of the Registrant (b)
|
|
3)
|
|
Not
applicable
|
|
4)
|
|
Form
of Agreement and Plan of Reorganization (d)
|
|
5)
|
(a)
|
Portions
of the Agreement and Declaration of Trust and By-laws of the Registrant
defining the rights of holders of common shares of the Registrant
(d)
|
|
|
(b)
|
Form
of specimen certificate for common shares of the Registrant
(c)
|
|
6)
|
|
Investment
Management Agreement between the Registrant and BlackRock Advisors, LLC
(d)
|
|
7)
|
|
Not
Applicable
|
|
8)
|
|
Not
Applicable
|
|
9)
|
(a)
|
Custodian
Agreement between the Registrant and The Bank of New York Mellon
(c)
|
|
|
(b)
|
Foreign
Custody Manager Agreement between the Registrant and The Bank of New York
Mellon (c)
|
|
10)
|
|
Not
Applicable
|
|
11)
|
|
Opinion
and Consent of Skadden, Arps, Slate, Meagher & Flom LLP, special
counsel for the Registrant (e)
|
|
12)
|
|
Tax
opinion of Skadden, Arps, Slate, Meagher & Flom LLP
(e)
|
|
13)
|
(a)
|
Stock
Transfer Agency Agreement between the Registrant and The Bank of New York
Mellon (c)
|
|
|
(b)
|
Form
of Fund Accounting Agreement between the Registrant and The Bank of New
York Mellon (c)
|
|
14)
|
|
Consent
of ,
independent auditors for the Registrant (e)
|
|
15)
|
|
Not
Applicable
|
|
16)
|
|
Power
of Attorney (d)
|
|
17)
|
|
Proxy
cards for the Funds (d)
|
_______________
|
|
(a)
Incorporated by reference as an Exhibit to our Form N-2 as filed with the
Securities Exchange Commission on March 14,
2005.
|
|
|
(b)
Incorporated by reference as an Exhibit to our Form 8-K as filed with the
Securities Exchange Commission on October 7,
2008.
|
|
|
(c)
Incorporated by reference as an Exhibit to our Form N-2 as filed with the
Securities Exchange Commission on May 25,
2005.
|
|
|
(e)
To be filed by further amendment.
|
ITEM
17. Undertakings
(1) The
undersigned Registrant agrees that prior to any public reoffering of the
securities registered through use of a prospectus which is part of this
Registration Statement by any person or party who is deemed to be an underwriter
within the meaning of Rule 145(c) of the Securities Act of 1933, as amended, the
reoffering prospectus will contain information called for by the applicable
Exchange registration form for reofferings by persons who may be deemed
underwriters, in addition to the information called for by other items of the
applicable form.
(2) The
undersigned Registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as part of an amendment to the registration
statement and will not be used until the amendment is effective, and that, in
determining any liability under the Securities Act of 1933, as amended, each
post-effective amendment shall be deemed to be a new registration statement for
the securities offered therein, and the offering of securities at that time
shall be deemed to be the initial bona fide offering of them.
(3) The
undersigned Registrant agrees to file, by post-effective amendment, an opinion
of counsel supporting the tax consequences of the Reorganization within a
reasonably prompt time after receipt of such opinion.
SIGNATURES
As
required by the Securities Act of 1933, this Registration Statement has been
signed on behalf of the Registrant, in the City of New York and the State of New
York, on February 10, 2009.
BLACKROCK
GLOBAL OPPORTUNITIES EQUITY TRUST
By:
/s/ Donald C.
Burke_______
Donald C.
Burke
President and Chief
Executive Officer
As
required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and on the date
indicated.
|
Name
|
|
Title
|
|
/s/
Donald C. Burke
|
|
President
and Chief Executive Officer
|
|
Donald
C. Burke
|
|
(Principal
Executive Officer)
|
|
|
|
|
|
*
|
|
Chief
Financial Officer
|
|
Neal
J. Andrews
|
|
(Principal
Financial Officer)
|
|
|
|
|
|
*
|
|
Trustee
|
|
G.
Nicholas Beckwith, III
|
|
|
|
|
|
|
|
*
|
|
Trustee
|
|
Richard
E. Cavanagh
|
|
|
|
|
|
|
|
*
|
|
Trustee
|
|
Kent
Dixon
|
|
|
|
|
|
|
|
*
|
|
Trustee
|
|
Frank
J. Fabozzi
|
|
|
|
|
|
|
|
*
|
|
Trustee
|
|
Kathleen
F. Feldstein
|
|
|
|
|
|
|
|
*
|
|
Trustee
|
|
James
T. Flynn
|
|
|
|
|
|
|
|
|
|
Trustee
|
|
Jerrold
B. Harris
|
|
|
|
|
|
|
|
*
|
|
Trustee
|
|
R.
Glenn Hubbard
|
|
|
|
|
|
|
|
*
|
|
Trustee
|
|
W.
Carl Kester
|
|
|
|
*
|
|
Trustee
|
|
Karen
P. Robards
|
|
|
|
|
|
|
|
*
|
|
Trustee
|
|
Richard
S. Davis
|
|
|
|
|
|
|
|
*
|
|
Trustee
|
|
Henry
Gabbay
|
|
|
|
|
|
|
|
|
|
|
|
*By:
/s/ Donald C. Burke
|
|
|
|
Donald
C. Burke, Attorney-in-Fact
|
|
|
February
10, 2009
|
|
SCHEDULE
OF EXHIBITS TO FORM N-14
BLACKROCK
GLOBAL OPPORTUNITIES EQUITY TRUST
Exhibit
---------
|
4)
|
|
Form
of Agreement and Plan of Reorganization
|
|
5)
|
(a)
|
Portions
of the Agreement and Declaration of Trust and By-laws of the Registrant
defining the rights of holders of common shares of the
Registrant
|
|
6)
|
|
Investment
Management Agreement between the Registrant and BlackRock Advisors,
LLC
|
|
16)
|
|
Power
of Attorney
|
|
17)
|
|
Proxy
cards for the Funds
|