BlackRock Enhanced Dividend Achievers Trust merger

Yes, BlackRock has proposed merging two BlackRock closed-end funds, the BlackRock Equity Dividend Trust (BDV) and the BlackRock Strategic Equity Dividend Trust (BDT), into the BlackRock Enhanced Equity Dividend Trust (BDJ). All three funds invest in companies with a history of paying and increasing dividends, but there are a couple of important differences. BDJ relies more heavily on covered calls to generate additional income on the common stock portfolio than do BDV and BDT. Another difference is that BDV focuses on large-capitalization stocks and BDT focuses on small- to mid-capitalization stocks.

Following completion of the merger, all assets will be managed according to the objectives of BlackRock Enhanced Dividend Achievers Trust. That is to say that covered calls will remain a vital part of BDJ’s investment strategy. The combination of BDJ, BDV, and BDT will be completed via a share for share exchange based on the net asset value of each fund. The combination of BDV and BDT into BDJ is expected to reduce the expense ratio of BDJ by about 20 basis points.

Shareholders of all three funds must approve the combination. Shareholders of BDT have already approved the merger, and a special meeting is scheduled for the end of January for shareholders of BDJ and BDV to approve the merger. If you own shares of BDJ and have not yet voted, you can vote in favor of the merger. If approved, BlackRock expects the merger to be completed by the end of the first quarter.