Company: BCAT
Filing Date: 2025-09-04
Form Type: N-CSRS
Source: 0001193125-25-196039
Chunk: 3

Company: BlackRock Capital Allocation Term Trust
Filing Date: 2025-09-04
Form: N-CSRS
Chunk 3
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 the future direction of interest rates are very difficult to predict accurately, and there is no assurance that a Trust ’ s intended leveraging strategy will be successful. The use of leverage also generally causes greater changes in each Trust ’ s NAV, market price and dividend rates than comparable portfolios without leverage. In a declining market, leverage is likely to cause a greater decline in the NAV and market price of a Trust’s shares than if the Trust were not leveraged. In addition, each Trust may be required to sell portfolio securities at inopportune times or at distressed values in order to comply with regulatory requirements applicable to the use of leverage or as required by the terms of leverage instruments, which may cause the Trust to incur losses. The use of leverage may limit a Trust’s ability to invest in certain types of securities or use certain types of hedging strategies. Each Trust incurs expenses in connection with the use of leverage, all of which are borne by shareholders and may reduce income to the shareholders. Moreover, to the extent the calculation of each Trust ’ s investment advisory fees includes assets purchased with the proceeds of leverage, the investment advisory fees payable to the Trusts ’ investment adviser will be higher than if the Trusts did not use leverage. Each Trust may utilize leverage through a credit facility or reverse repurchase agreements as described in the Notes to Consolidated Financial Statements, if applicable. Under the Investment Company Act of 1940, as amended (the “1940 Act”), each Trust is permitted to borrow money (including through the use of TOB Trusts) or issue debt securities up to 33 1/3% of its total managed assets. A Trust may voluntarily elect to limit its leverage to less than the maximum amount permitted under the 1940 Act. In addition, a Trust may also be subject to certain asset coverage, leverage or portfolio composition requirements imposed by its credit facility, which may be more stringent than those imposed by the 1940 Act.

4 2025 BlackRock Semi-Annual Report to Shareholders

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