BlackRock Science And Technology Term Trust Q2 2024 Commentary

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BSTZ returned +4.1% on market price and +4.9% on net asset value during Q2 2024.During the quarter, the Trust increased its exposure to the semiconductors sub-sector while sourcing capital from ...

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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nBlackRock Science And Technology Term Trust Q2 2024 Commentary\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-09-18 23:05 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4721874-blackrock-science-and-technology-term-trust-q2-2024-commentary><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>BSTZ returned +4.1% on market price and +4.9% on net asset value during Q2 2024.During the quarter, the Trust increased its exposure to the semiconductors sub-sector while sourcing capital from ...</p>\n\n<a href=\"https://seekingalpha.com/article/4721874-blackrock-science-and-technology-term-trust-q2-2024-commentary\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"IE00B1XK9C88.USD","symbol_name":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A\" (USD) ACC","start_time":0,"source_url":"https://seekingalpha.com/article/4721874-blackrock-science-and-technology-term-trust-q2-2024-commentary","article_id":"2468533780","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1712920747/image_1712920747.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2468533780","pubTimestamp":1726671900,"columns":[],"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"BSTZ returned +4.1% on market price and +4.9% on net asset value during Q2 2024.During the quarter, the Trust increased its exposure to the semiconductors sub-sector while sourcing capital from software.BSTZ held 22 private investments that accounted for 28.4%  of the portfolio’s NAV.   Thicha Satapitanon/iStock via Getty Images  The views expressed reflect the opinions of BlackRock as of 6/30/2024 and are subject to change based on changes in market, economic or other conditions. 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Thicha Satapitanon/iStock via Getty Images  The views expressed reflect the opinions of BlackRock as of 6/30/2024 and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results. \nClick to enlarge Quarterly Highlights All information is as of 6/30/2024 unless otherwise noted Performance: BSTZ returned +4.1% on market price and +4.9% on net asset value (NAV) during Q2 2024. The MSCI Custom ACWI SMID Growth IT Call Overwrite Index returned -2.3%.* Distributions: The portfolio’s distribution rate based on market price was +12.7%, annualized. Monthly distributions were increased by 101% in May 2024 and now represent an annualized rate of 12% of NAV. See 5/20/2024 Press Release. NAV of $22.80 per share plus the $9.58 cumulative distributions paid since inception equals $32.38 per share. ** Portfolio: During the quarter, the Trust increased its exposure to the semiconductors sub-sector while sourcing capital from software. As of quarter-end, the portfolio held many small- and mid-cap companies, which provide more pure-play exposure into emerging technologies when compared to larger tech peers. We expect the secular growth trends driving technology to be multi-year transformations and persist regardless of the macroeconomic environment. Private Investments: BSTZ held 22 private investments that accounted for 28.4% ($496 million) of the portfolio’s NAV. Discount Management Program (DMP): The Trust has also announced the adoption of a DMP to repurchase a portion of its common shares via tender offer if certain conditions are met during specified periods. See the 5/3/2024 and 7/1/2024 press releases for more details. Liquidity at NAV: There will be a liquidity event at NAV for Trust shareholders in 2031.1  [1]BSTZ has a contingent limited term structure and will offer investors a liquidity event at net asset value either at the Dissolution Date (as indicated below) or in connection an Eligible Tender Offer (as discussed below). The Trust intends to dissolve on or about June 26, 2031 (the “Dissolution Date”) in accordance with its Agreement and Declaration of Trust; provided that the Board of Trustees of the Trust (the “Board”) may vote to extend the Dissolution Date: (i) once for up to one year, and (ii) once for up to an additional six months, to a date up to and including eighteen months after the initial Dissolution Date (which date shall then become the Dissolution Date). Each holder of common shares would be paid a pro rata portion of the Trust’s net assets upon dissolution of the Trust. The Board may also vote to cause the Trust to conduct a tender offer, as of a date within twelve months preceding the Dissolution Date (as may be extended as described above), to all common shareholders to purchase 100% of the then outstanding common shares of the Trust at a price equal to the NAV per common share on the expiration date of the tender offer (an “Eligible Tender Offer”). The Trust must have at least $200 million of aggregate net assets immediately following the completion of an Eligible Tender Offer to ensure the continued viability of the Trust. Following the completion of an Eligible Tender Offer, the Board may vote to eliminate the Dissolution Date without shareholder approval and provide for the Trust’s perpetual existence. If an Eligible Tender Offer would result in the Trust having aggregate net assets below $200 million, the Eligible Tender Offer will be canceled, and the Trust will dissolve on its Dissolution Date. The Trust is not a so-called “target date” or “life cycle” fund whose asset allocation becomes more conservative over time as its target date, often associated with retirement, approaches. In addition, the Trust is not a “target term” fund and thus does not seek to return its initial public offering price per common share upon dissolution. BSTZ’s name was changed to “BlackRock Science and Technology Term Trust” on April 5, 2023, to increase awareness of this limited term structure. * See page 6 for further information. Source: Morningstar & BlackRock as of 6/30/2024.Returns are shown net of advisory fees paid by the Trust and net of the Trust’s operating fees and expenses. As of the Trust’s annual report dated 12/31/2023, the Trust’s gross expense ratio is 1.35%. Investors who purchase shares of the Trust through an investment adviser or other financial professional may separately pay a fee to that service provider. Past performance is not indicative of future results. The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted, and numbers may reflect small variances due to rounding. Refer to BlackRock.com for current month end performance. ** See page 9 for further information. Distribution rate is calculated by annualizing the Trust’s latest declared regular distribution on 6/30/2024 and dividing that number by the Trust’s market price as of 6/30/2024. The distribution rate is calculated net of expenses. BSTZ’s estimated source of distributions paid during the current fiscal year to date is 100% return of capital as of 6/30/2024. The amounts and sources of distributions reported are only estimates and are not provided for tax reporting purposes. Past performance does not guarantee or indicate future results. BSTZ’s IPO price was $20 a share. BSTZ has announced changes to its distribution rate under its managed distribution plan (“Plan”). The Trust has adopted a Plan to support a level distribution of income, capital gains and/or return of capital. Effective with the distribution to be declared on 5/20/2024, the Trust will pay monthly distributions to shareholders at an annual rate of 12% of the Trust’s 12-month rolling average daily net asset value to be calculated 5 business days prior to declaration date. Each month this formula will be applied, and the distribution per share will be re-set and announced on the distribution declaration date. The annual distribution rate is subject to change at the discretion of each Trust’s Board of Trustees. Under its Plan, each Trust will distribute all available investment income to its shareholders, consistent with its investment objectives and as required by the Internal Revenue Code of 1986, as amended. If sufficient investment income is not available for a monthly distribution, a Trust will distribute long-term capital gains and/or return capital to its shareholders in order to maintain its stated annual distribution rate under the Plan. Shareholders should not draw any conclusions about a Trust’s investment performance from the terms of the Trust’s Plan, which is to provide shareholders with a level distribution. The amounts and sources of distributions for tax reporting purposes will depend upon each Trust’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Trust will send you a Form 1099-DIV for the calendar year that will tell you how to report distributions for federal income tax purposes. \nClick to enlarge Investing in next generation technology companies The BlackRock Science and Technology Term Trust (NYSE:BSTZ) is a closed-end fund (“CEF”) that takes a unique approach to investing in the technology sector by blending “next generation” technology stocks and private investments along with a tactical single-stock option-writing strategy. The Trust will invest in equity securities issued by mid- and small-capitalization companies that are believed to have above-average earnings growth potential.    BlackRock believes that the use of technology is reshaping industries across the globe, presenting unique investment opportunities and creating a strong structural backdrop for long-term growth in the sector. The technology sector is supported by strong and accelerated global earnings and increased spending. With tech disruption re-shaping entire industries, we believe this growth and spending will permeate across different types of companies and sectors. BSTZ seeks to invest in these themes through both publicly traded and private companies. Distribution Key Points   Annualized Distribution Rate as of 6/30/20241 Distribution per Share Since Inception1 Total Distributions Since Inception1   12.7% $9.58 $754 million  \nClick to enlarge BSTZ may earn its distribution from various sources, including 1) appreciation of portfolio holdings, 2) proceeds from the sale (or writing) of call options on portfolio holdings and 3) return of capital. If BSTZ’s earnings are less than distributions paid, a portion of the distribution may be considered return of capital. Understanding return of capital: BSTZ invests in mid- and small-capitalization technology companies that typically do not pay out dividend income. This may result in a portion of BMEZ’s distribution being classified as return of capital, which is an accounting term to describe any part of the distribution not attributable to either income or capital gains. Importantly, prior capital losses can be used to offset current capital gains, which may result in return of capital from a tax perspective, effectively reducing the tax liability for shareholders. ** Private investments2  Access to private equity  CEFs may pursue investment strategies that focus on a broader opportunity set, including less liquid and private investments that may offer differentiated return and income profiles. Taking advantage of this structure, BSTZ seeks to invest a meaningful portion of its portfolio in private investments. The companies we seek are typically younger and more growth-oriented. Many of them do not have clear public company competitors and are pursuing entirely new and innovative strategies.  Private equity holdings  During the quarter, the Trust did not add additional capital to private investments, and there were no liquidity events among the Trust’s holdings. As of 6/30/2024, BSTZ held 22 private companies with a combined valuation of $496 million, or 28.4% of the portfolio’s NAV.  Private equity outlook  Our private investments have not been immune to the rising interest rate environment which has pressured public equities. Increased IPO (initial public offering) and M&A (mergers and acquisitions) activity could be an encouraging sign and would help companies raise capital. However, uncertainty lingers and has adversely impacted the Trust’s performance as private valuations have been marked down and exit strategies for some of our companies have been prolonged. We continue to seek opportunities to harvest the illiquidity premium by taking advantage of the “closed” structure and adding exposure to private investments as capacity increases. The Team continues to perform due diligence on multiple new opportunities and aims to manage exposure to private assets over the coming quarters given the current allocation to private equity.   * For illustrative purposes only. See page 8 for more details on market capitalization. ** The information provided here is neither tax nor legal advice. Investors should speak to their tax professional for specific information regarding their tax situation. [1]See page 9 for further information. Distribution rate is calculated by annualizing the Trust’s latest declared regular distribution on 6/30/2024 and dividing that number by the Trust’s market price as of 6/30/2024. The distribution rate is calculated net of expenses. BSTZ’s estimated source of distributions paid during the current fiscal year to date is 100% return of capital as of 6/30/2024. The amounts and sources of distributions reported are only estimates and are not provided for tax reporting purposes. Past performance does not guarantee or indicate future results. Total BSTZ estimated source of distributions paid since inception are 1% short-term gain, 52% long-term gain, and 47% return of capital as of 6/30/2024. [2]See page 3 for further information and private investment disclosure. \nClick to enlarge Private investments in BSTZ:1   Investment Quarter Company Project Name as per BlackRock website among Top 10 Holdings* Industry Investment Amount ($m) Market Value ($m)**   Q1 2021 Rapyd Financial Network - Software $14.0 $9.2   Q1 2021 Astranis Space Tech - Communications Equipment $19.2 $9.9   Q1 2021 Deep Instinct - IT Services $12.0 $8.7   Q1 2021 Automattic - IT Services $34.0 $16.7   Q1 2021 Mythic AI, Inc. - Internet $7.0 $0.0   Q4 2020 ByteDance Bond Interactive Media & Services $16.4 $25.4   Q4 2020 Snyk Limited Salinger Software $22.5 $30.9   Q4 2020 DataRobot - Software $12.9 $3.9   Q4 2020 Snorkel Ai - Diversified Financial Services $3.0 $5.1   Q3 2020 Think & Learn Pvt Ltd - Education Tech $21.4 $0.0   Q3 2020 ResearchGate - Entertainment $7.0 $5.2   Q3 2020 Trumid - IT Services $16.0 $24.2   Q3 2020 GrubMarket Gaugamela Food Tech $8.0 $38.4   Q3 2020 Farmers Business Network - Food Tech $12.0 $0.9   Q1 2020 SambaNova Sibelius Semiconductors $40.9 $39.9   Q1 2020 CNEX - Semiconductors $5.7 $0.0   Q4 2019 Databricks Debussy Software $37.2 $116.0   Q3 2019 Unqork - Software $14.8 $5.1   Q3 2019 Trax - IT Services $21.0 $12.4   Q3 2019 PsiQuantum Picasso Semiconductors $29.1 $78.5   Q3 2019 Klarna - IT Services $23.4 $39.6   Q3 2019 Flix Mobility - Road & Rail $17.0 $26.1  \nClick to enlarge  Shaded areas for illustrative purposes only. 1) For the Private investments shown: These investments were selected to illustrate the Trust’s private investments made since the inception of the Trust. The investments shown should not be considered a recommendation to purchase or sell a particular investment. The information above is not a prediction of future performance or any assurance that comparable investment opportunities will be available at the time of investment. It is non-representative of all underlying investments made by the investment team and it should not be assumed that the investment team will invest in comparable investments, or that any future investments made by the investment team will be successful. To the extent that these investments prove to be profitable, it should not be assumed that the investment team’s other investments will be profitable or will be as profitable. Past performance is not indicative of future results. Private companies that have gone public, merged or been acquired are not shown. * As of 6/30/2024. Company names may appear as “Project Names” on the BlackRock website. ** As of 6/30/2024. Figures are sourced from BlackRock and deemed to be accurate. Figures are unaudited. For full holdings see the Shareholder Report. \nClick to enlarge Performance* Over the second quarter of 2024, the Trust returned +4.1% on a NAV basis, and +4.9% on a market price basis, net of fees.1 Its benchmark, the MSCI Custom ACWI SMID Growth IT Call Overwrite Index** returned -2.3% over the same period.1 Global equity markets rose during the quarter with the MSCI ACWI returning +2.9%2. The index ended the first half of 2024 up +11.3%2, led higher by mega-cap tech stocks exposed to the artificial intelligence theme. Resilient economic data and better-than-anticipated earnings also propelled the rally. Over the same period in the US, the S&P 500 Index returned +4.3%2. In April, stock markets generally traded down while investors questioned the timing of interest rate cuts and yields spiked. Throughout the period, a resilient labor market and cooling inflation led policymakers to moderate their hawkish tones, and the market rallied. Over the second quarter, the MSCI ACWI Information Technology Index returning +11.4%2. Investor enthusiasm around accelerated computing led semiconductors to appear as the top performing sub-sector. Market breadth remained limited as a cohort of seven mega-cap tech stocks, popularly referred to as the “Magnificent Seven,” climbed higher. Q1 2024 tech earnings demonstrated strong results across the sector. Monetization continued to reside in the compute layers of the AI stack, most notably exemplified by NVIDIA’s (NVDA) quarterly results3. At the same time, hyperscalers announced accelerated revenue growth in their cloud divisions as enterprises invest in technology infrastructure to support AI workloads. Within software, weak growth was experienced as enterprises delay IT spending on non-essential applications. Notable AI advancements were announced during the period. Microsoft previewed new developments with AI-integration for enterprises and consumers, both of which are expected to be critical verticals for the software company4. OpenAI5, Google6, and Anthropic7 released updated AI models which are faster and more accurate than previous iterations. Elsewhere, Apple marked a significant step in its progress with AI integration after reaching a deal that will bring ChatGPT to iOS 188. On the M&A front, IBM announced the acquisition of cloud software provider, HashiCorp, for $6.4bn9, in an effort to bolster its software business. Elsewhere, data management software provider, Rubrik, closed at a $5.6bn valuation in its IPO10. These transactions were perceived as positive signals for technology capital markets. COMPUTEX Taipei, one of the largest tech trade shows in the world was held in June. NVIDIA CEO Jensen Huang revealed the firm’s newest AI chip during his keynote address, only months after debuting the most recent version. Mr. Huang also discussed new products and platform launches, which may influence the rest of the industry to keep a similar pace.11 Hyperscalers revealed plans to construct large-scale data centers in the US. Meta committed $800mn to construct a data center in Alabama12 and Microsoft announced aspirations to construct a $3.3bn data center in Wisconsin13, which is favorable due to its cold climate and proximity to data demand. President Biden signed a bill mandating the divestment of TikTok by its Chinese parent company, ByteDance, within a year. ByteDance has indicated its intention to not sell TikTok, and plans to contest the legality of the bill, implying a prolonged potential legal battle ahead.14  1) Returns are shown net of advisory fees paid by the Trust and net of the Trust’s operating fees and expenses. Investors who purchase shares of the Trust through an investment adviser or other financial professional may separately pay a fee to that service provider. Past performance is not indicative of future results. The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted, and numbers may reflect small variances due to rounding. Refer to BlackRock.com for current month end performance. 2) Bloomberg, 6/30/2024. 3) NVIDIA IR, 5/22/2024. 4) Microsoft IR, 5/21/2024. 5) CNBC, 5/13/2024. 6) CNBC, 5/14/2024. 7) CNBC, 6/20/2024. 8) Forbes, 5/14/2024. 9) Wall Street Journal, 4/29/2024. 10) Reuters, 4/24/2024. 11) NVIDIA IR, 6/2/2024. 12) Office of the Alabama Governor, 5/2/2024. 13) Microsoft IR, 5/8/2024. 14) NPR, 4/24/2024. * References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities. BlackRock may or may not own the securities referenced and, if such securities are owned, no representation is being made that such securities will continue to be held. The holdings mentioned in the commentary represent the largest contributors and detractors to performance relative to the benchmark. They are not representative of all underlying investments made by the manager on behalf of the strategy, and it should not be assumed that the manager will invest in these investments or in comparable investments, or that any future investments made by the manager will be successful. To the extent that these investments prove to be profitable, it should not be assumed that the strategy will be profitable or will be as profitable. ** MSCI Custom ACWI SMID Growth IT Call Overwrite Index: Source BlackRock as of 6/30/2024. An index representing the IT (Information Technology) sector stocks within the MSCI ACWI SMID Cap Growth Index. An index that captures mid and small-cap securities exhibiting overall growth style characteristics across 23 Developed Markets and 24 Emerging Markets countries. Indexes are unmanaged and index performance is shown for illustrative purposes only. It is not possible to invest directly in an index. Past performance is not indicative of future results. \nClick to enlarge Contributors to performance Monetization within generative AI (genAI) continued to lead technology equities higher over the quarter. Within the portfolio, semiconductor and hardware holdings with exposure to the build-out of AI data centers appeared as some of the largest contributors to active returns. Accordingly, an overweight position in NVIDIA was the single largest contributor to active performance in the second quarter. The semiconductor design company’s stock continued to rise after consecutive earnings releases which evidenced robust demand from data center customers for accelerator chips1. The firm’s graphics processing units (GPUs) are the building blocks of most AI stacks today. Similarly, memory chip firms benefitted over the quarter, given the necessity of storage in genAI infrastructure. An off-benchmark position in SK Hynix (OTCPK:HXSCF) contributed to relative performance. The South Korean supplier of dynamic random-access memory (DRAM) and flash memory chips continued to rise as the firm experienced strong demand related to AI workloads. Elsewhere within semiconductors, an overweight position in Credo Technology (CRDO) contributed to relative performance. The firm beat earnings and revenue expectations after reporting quarterly financials in May. The firm has benefitted as they provide high-speed connectivity solutions which have been in demand as AI data centers are constructed. Lastly, global fintech (financial technology) equities continued to recover over the quarter as consumer sentiment stabilized. An off-benchmark private position in Klarna (KLAR) was among the contributors to active returns. The buy-now-pay-later fintech company saw its valuation appreciate over the period after reporting healthy growth and smaller losses than previously anticipated. Detractors from performance While strength continued among equities exposed to the AI theme, private valuations among select holdings in the Trust were pressured over the quarter as public comparable companies sold off. Within the portfolio, an off-benchmark private position in Databricks detracted from active performance. The private data infrastructure company’s valuation was challenged over the period as public comparable companies traded down due to weak demand from enterprises. Databricks may benefit from infrastructure spending as organizations seek to manage and categorize their data for use in AI tools and applications. An off-benchmark private position in Snyk also detracted from relative returns over the second quarter. The private cybersecurity company’s valuation detracted due to weakness across the industry as public peer stocks declined due to demand and profitability concerns. Elsewhere, an off-benchmark private position in SambaNova appeared among the largest detractors over the period. Despite the AI compute platform company appearing as a potential beneficiary in the race for AI development, the private valuation detracted over the quarter on the back of lower than anticipated revenues. While security selection within the hardware sub-sector contributed, a lack of exposure to select holdings that experienced strong performance detracted from relative returns. As such, an underweight position in TDK Corp (OTCPK:TTDKY), a Japanese hardware company, was a relative detractor. The electronic components manufacturer saw its share price rise in the second quarter after reporting a breakthrough in materials used in their small solid-state batteries. Such batteries are used in devices like Apple smartphones and watches2.  1) NVIDIA IR, 5/22/2024. 2) CNBC, 6/17/2024. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities. BlackRock may or may not own the securities referenced and, if such securities are owned, no representation is being made that such securities will continue to be held. The holdings mentioned in the commentary represent the largest contributors and detractors to performance relative to the benchmark. They are not representative of all underlying investments made by the manager on behalf of the strategy and it should not be assumed that the manager will invest in these investments or in comparable investments, or that any future investments made by the manager will be successful. To the extent that these investments prove to be profitable, it should not be assumed that the strategy will be profitable or will be as profitable. A full list of each holdings contribution to performance is made available upon request. \nClick to enlarge BSTZ performance summary     1 Year Since Inception (Annualized) Q2 2024   Total return (NAV) +13.9% +10.4% +4.1%   Total return (Market Price) +19.7% +8.4% +4.9%   MSCI Custom ACWI SMID Growth IT Call Overwrite Index +13.7% - * -2.3%  \nClick to enlarge  Source: Morningstar and BlackRock as of 6/30/2024. The Trust’s inception was 6/27/2019. Returns are shown net of advisory fees paid by the Trust and net of the Trust’s operating fees and expenses. As of the Trust’s shareholder report dated 12/31/2023, the Trust’s gross expense ratio is 1.35%. Investors who purchase shares of the Trust through an investment adviser or other financial professional may separately pay a fee to that service provider. Past performance is not indicative of future results. The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted, and numbers may reflect small variances due to rounding. Refer to BlackRock.com for current month end performance. * Benchmark is the MSCI Custom ACWI SMID Growth IT Call Overwrite Index: An index representing the IT (Information Technology) sector stocks within the MSCI ACWI SMID Cap Growth Index. An index that captures mid and small-cap securities exhibiting overall growth style characteristics across 23 Developed Markets and 24 Emerging Markets countries. Indexes are unmanaged and index performance is shown for illustrative purposes only. It is not possible to invest directly in an index. * The index commenced on March 31, 2022 and therefore the since inception return as “-“. \nClick to enlarge Investment outlook The Investment Team believes that AI is the next frontier of innovation and is one of the biggest singular technology trends today. Despite the strong year-to-date performance of the technology sector, we believe that we are in the early stages of AI’s development. The tech sector may present an opportunity to investors with a dynamic we’ve seen over the past three decades: disrupting existing industries and creating new markets. The infrastructure rebuild requires a new supply chain that includes AI accelerator chips (GPUs, ASICs), memory chips, networking hardware, optical equipment, power solutions, advanced packaging, and assembly. While most attention is justifiably spent on demand for AI accelerator chips, the situation also presents an investment opportunity among other aspects of the supply chain. Concurrently, AI will require massive amounts of electricity to run. New grid investments may be required to power AI data centers. Over the coming decade, we may see value creation emerge in software as enterprises adopt AI, and in hardware as AI is integrated into devices such as smartphones, cars, humanoids, augmented reality glasses/headsets, and other AI native devices. The last several years have marked significant volatility across technology equities. This has not always been the case with this sector because leadership in tech tends to rotate, with new secular trends take center stage. The unique market environment over the past several years has disrupted this pattern. In 2022, higher rates to combat inflation led tech stocks to drawdown, followed by a strong 2023 where a cohort seven mega cap stocks, often referred to as the “Magnificent 7,” emerged. This was partially due to the uncertain macro environment and investor preference for established companies. In addition, the rise of generative AI benefitted those with significant data assets and data center infrastructure. We believe that the stock market rally could possibly broaden outside of today’s tech giants. Portfolio positioning During the second quarter, the Trust increased its exposure to the semiconductors sub-sector while sourcing capital from select software stocks where the near-term outlook appeared unattractive. The portfolio also increased exposure to areas that may benefit from the vertical integration of AI, and the associated increased power demand. These trades were made to optimize the portfolio's exposure to the key themes of the technology sector. At the end of the period, the Trust held approximately 36% of net asset value (“NAV”) in semiconductors, 28% in software, 14% in hardware, 10% in services, 9% in internet, 2% in new industries, and 2% in content & infrastructure. These industry exposures were a result of bottom-up stock selection.  1) Bloomberg, 6/30/2024. Technology sector as represented by the MSCI ACWI Information Technology Index. \nClick to enlarge  Important information about the Trust This document and the information contained herein relates solely to BlackRock Science and Technology Term Trust (BSTZ). The information contained herein does not relate to, and is not relevant to, any other Trust or product sponsored or distributed by BlackRock or any of its affiliates. This document is not an offer to sell any securities and is not a solicitation of an offer to buy any securities. Carefully consider the Trust’s investment objective, risk factors and charges and expenses before investing. This and other information can be found in the Trust’s Prospectus and shareholder report which may be obtained by visiting the SEC Edgar database. Read the Prospectus and shareholder report carefully before investing. Common shares for the closed-end fund identified above are only available for purchase and sale at current market price on a stock exchange. A closed-end fund’s dividend yield, market price and NAV will fluctuate with market conditions. The information for this Trust is provided for informational purposes only and does not constitute a solicitation of an offer to buy or sell Trust shares. Performance results reflect past performance and are no guarantee of future results. Current performance may be lower or higher than the performance data quoted. All returns assume reinvestment of all dividends. The market value and net asset value (NAV) of a Trust’s shares will fluctuate with market conditions. Closed-end funds may trade at a premium to NAV but often trade at a discount. Science and Technology Risk. The Trust’s investment policies, including its fundamental policy of concentrating its investments in companies operating in one or more industries within the technology group of industries, and investment focus may subject it to more risks than Trusts that are more broadly diversified over companies with differing characteristics and operating in numerous sectors of the economy. General changes in market sentiment towards science and technology companies may adversely affect the Trust, and the performance of science and technology companies may lag behind the broader market as a whole. Also, the Trust’s investments may subject it to a variety of risks, which may cause the value of the common shares of the Trust to fluctuate significantly over relatively short periods of time. For more information on these and other risks associated with investments in the science and technology sector, including particular risk considerations for technology companies, telecommunications companies, life sciences industries, biotechnology and pharmaceutical companies, industrial products, services and equipment companies, media companies, consumer finance companies, energy companies and defense/aerospace companies, see “Risks — Science and Technology Risk” in the Trust’s shareholder report. Risks Associated with the Trust’s Options Strategy. The ability of the Trust to generate current gains from options premiums and to enhance the Trust’s risk-adjusted returns is partially dependent on the successful implementation of its options strategy. There are several risks associated with transactions in options on securities. 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. Restricted and Illiquid Investments Risk. The Trust may invest without limitation in illiquid or less liquid investments or investments in which no secondary market is readily available or which are otherwise illiquid, including private placement securities. The Trust may not be able to readily dispose of such investments at prices that approximate those at which the Trust could sell such investments if they were more widely traded and, as a result of such illiquidity, the Trust may have to sell other investments or engage in borrowing transactions if necessary to raise cash to meet its obligations. Limited liquidity can also affect the market price of investments, thereby adversely affecting the Trust’s NAV and ability to make dividend distributions. The financial markets in general, and certain segments of the mortgage-related securities markets in particular, have in recent years experienced periods of extreme secondary market supply and demand imbalance, resulting in a loss of liquidity during which market prices were suddenly and substantially below traditional measures of intrinsic value. During such periods, some investments could be sold only at arbitrary prices and with substantial losses. Periods of such market dislocation may occur again at any time. Privately issued debt securities are often of below investment grade quality, frequently are unrated and present many of the same risks as investing in below investment grade public debt securities. There is no assurance that the Trust will achieve its investment objective. The Trust is subject to numerous risks, including investment risks discussed above. The Trust is not a complete investment program and you may lose money investing in the Trust. An investment in the Trust may not be appropriate for all investors. The amounts and sources of distributions reported in any notices are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Trust’s investment experience during the remainder of its fiscal year and may be subject to change based on tax regulations. The Trust will send a Form 1099-DIV for the calendar year that will tell how to report these distributions for federal income tax purposes. Some BlackRock Trusts make distributions of ordinary income and capital gains at calendar year-end. Those distributions temporarily cause extraordinarily high yields. There is no assurance that a Trust will repeat that yield in the future. Subsequent monthly distributions that do not include ordinary income or capital gains in the form of dividends will likely be lower. Index definitions: MSCI Custom ACWI SMID Growth IT Call Overwrite Index: An index representing the IT (Information Technology) sector stocks within the MSCI ACWI SMID Cap Growth Index. An index that captures mid and small-cap securities exhibiting overall growth style characteristics across 23 Developed Markets and 24 Emerging Markets countries. © 2024 BlackRock, Inc. or its affiliates. All Rights Reserved. BLACKROCK is a trademark of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners. Prepared by BlackRock Investments, LLC, member FINRA. Not FDIC Insured • May Lose Value • No Bank Guarantee \nClick to enlarge Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors. This post originally appeared on BlackRock.Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. 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