Company: BCAT
Filing Date: 2025-03-07
Form Type: N-CSR
Source: 0001193125-25-049576
Chunk: 12

Company: BlackRock Capital Allocation Term Trust
Filing Date: 2025-03-07
Form: N-CSR
Chunk 12
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 of future results. The Trust is presenting the performance of one or more indices for informational purposes only. The Trust is actively managed and does not seek to track or replicate the performance of any index. The index performance shown is not intended to be indicative of the Trust’s investment strategies, portfolio components or past or future performance. More information about the Trust’s historical performance can be found in the “Closed End Funds” section of blackrock.com . The following discussion relates to the Trust’s absolute performance based on NAV: What factors influenced performance? Due to the nature of the Trust’s mandate, performance is reviewed on an absolute return basis. The Trust has an unconstrained approach (i.e., the flexibility to invest across all equity and fixed-income asset classes, spanning public and private markets) with ESG considerations. As such, the Trust is not managed specifically to a benchmark. The index returns listed above are for reference purposes only. Performance information below is expressed on a contribution to return basis. In equities, positioning in the information technology, financials, and healthcare sectors were the primary contributors to the Trust’s absolute return. In fixed-income, positioning in corporate bonds and securitized assets, notably commercial mortgage-backed securities, contributed positively. The Trust’s cash position added value, as well. Positioning in energy and real estate were the primary detractors from returns in equities. Duration management via interest-rate derivatives detracted in fixed-income, as did holdings in agency mortgage-backed securities (“MBS”). (Duration is a measure of interest rate sensitivity.) The Trust used derivatives, which may include options, futures, swaps, and forward contracts, in an effort to enhance returns and manage the risk of adverse market movements. Private investments comprised approximately 6.1% of the Trust’s total assets at the close of the period. The Trust’s holdings in this area made a small contribution to results, driven by private credit. The Trust’s practice of maintaining a specified level of monthly distributions to shareholders did not have a material impact on the Trust’s investment strategy. The distribution policy resulted in return of capital for the period. Refer to the financial highlights and income tax information sections in this report for further information about the distributions. Describe recent portfolio activity. The Trust’s allocation to equities increased by 2.1 percentage points, with the largest additions in information technology, communication services and financials. Its weightings in healthcare and consumer staples decreased. The allocation to fixed-income rose by 3.3 percentage points, with the largest increase in high yield bonds. The