blackrock income strategies trust plc - theaic.co.uk of the current attitude of a sample of citizens...

BlackRock Income Strategies Trust plc. August 31st 2015

FOR PROFESSIONAL CLIENTS / QUALIFIED INVESTORS ONLY

FOR PROFESSIONAL CLIENTS / QUALIFIED INVESTORS ONLY ISGPS-0683

2 FOR PROFESSIONAL CLIENTS / QUALIFIED INVESTORS ONLY ISGPS-0683

How can the investment trust structure help multi-asset investors?

The investment trust structure is ideal for long-term multi-asset investment strategies

Unit Trust Investment Trust

Long-term leverage

Illiquid assets

Reserve Income

BlackRock Income Strategies Trust

Multi-Asset Strategy, outcome-oriented approach

• Aim to achieve a total return of CPI +4% per annum (before ongoing charges) over 5-7 year cycle*.

• Aim to deliver dividend growth in line with inflation and strive to never cut the dividend in absolute terms

• Focus on capital stability when compared to an equity only portfolio

• Global, multi-asset approach with c.40% invested in the BlackRock UK Equity Income team

• No individual company exposure in the portfolio may exceed 10% of total assets. No more than 15% may be invested in unlisted alternative assets

• May use derivatives to enhance portfolio returns and efficient portfolio management

• May use gearing; not normally be expected to exceed 20%.

Source: BlackRock *Note: Target returns and expected volatility are not guaranteed.

FOR PROFESSIONAL CLIENTS / QUALIFIED INVESTORS ONLY ISGPS-0683 3

Introducing the UK’s first dynamic diversified income investment trust

BLACKROCK INCOME

STRATEGIES TRUST

Diversified Income and Growth Strategies

Access global investment opportunities across equities, bonds and non-traditional assets, such as property

Investment Trust

Utilises the full flexibility of the Trust structure

BlackRock’s Dynamic Asset Allocation Process

Adapts to changing market conditions and aims to deliver consistent results


BlackRock research shows that a multi-asset approach can meet the priorities for financial futures

51 Funding a comfortable retirement

%

Preserving my wealth 26 %

Being able to earn or draw an income from savings and investments

24 %

1 Aims for long term real capital growth

Aims for lower risk

Diversified income sources

2

3

Top three financial priorities Why a multi-asset approach?

Source: BlackRock Investor Pulse survey, research conducted from 24 July to 23 August 2014 amongst a nationally representative sample of 27,500 financial decision-makers, in 20 countries, aged 25 to 74 years old, of which 2,000 are UK residents. The results of this survey are provided for information purposes. The conclusions are intended to provide an indication of the current attitude of a sample of citizens in the UK to saving and investing and should not be relied upon for any other purposes


Dynamic asset allocation in action

Asset allocation is shown for illustrative purposes only to highlight the dynamic characteristics of the investment strategy and asset allocation process. It is taken from the vehicle with the longest tenure of the dynamic diversified growth strategy. This will vary from the actual allocation of BlackRock Income Strategies Trust. Source: BlackRock. BIJF DDG Fund as at 31 December 2014. 1 Note: Cash represents Cash, FX and Derivatives Cover

% Asset allocation for Dynamic Diversified Growth Strategy

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q32005

Q12006

Q32006

Q12007

Q32007

Q12008

Q32008

Q12009

Q32009

Q12010

Q32010

Q12011

Q32011

Q12012

Q32012

Q12013

Q32013

Q12014

Q32014

Equities Fixed Income Alternatives Cash*1

2008: Quickly increased allocation to cash, to

protect investor capital

2009 / 10: Maintained a large allocation to investment grade credit as investors sought yield

2013: Reduced exposure to alternatives (commodities) as super-cycle drew to a close


How much do we want to

invest?

How do we want to invest?

Where do we want to invest?

BlackRock dynamic asset allocation investment process: refined over many years

Global Economic Roadmap

Formulate Economic Road Map

Identify asset preferences / key themes

Draw on BlackRock specialists to enhance research

Idea Selection

Does not follow a benchmark

Multiple Investment Tools e.g. active and passive

Scaling & Risk

Constantly monitor impact of decisions on risk

Scaling reflects conviction

System allows us to have a very detailed view of the investments held to analyse all holdings

Our process has been refined and enhanced over many years to ensure tight control over risk and aims to capture income and growth opportunities


A highly experienced portfolio management team dedicated to delivering client outcomes

Adam graduated in Engineering from Cambridge University in 1991

Source: BlackRock. 31 July 2015

18 strong Diversified Strategies team within BlackRock’s Multi-Asset Strategies Group

20 years of industry experience. Adam has been head of the flagship Dynamic Diversified Growth Strategy since 2008

Adam joined BlackRock in 1999 where he has managed private client, fixed income and absolute return portfolios.

He was previously at Credit Suisse and Goldman Sachs

Adam Ryan

Head of Diversified

Strategies team


What? Why? Who?

Proposed multi-asset approach

Expert stock picking identifies sustainable and

growing dividends

Uncover a range of income and growth opportunities

across equities and bonds

Identify non-traditional sources of income

Mark Wharrier BlackRock UK Equity team

Adam Ryan BlackRock Diversified

Strategies Team

Adam Ryan BlackRock Diversified

Strategies Team

Tactical Asset Allocation

UK Equity Income

Alternative Investments (up to 15%)


Investment solution: Look beyond the UK for sources of income

Data as at 30 September, income percentage above given as a broad indication of asset class income yield. Reference to asset allocation on this slide is merely for explaining the investment strategy, and should not be construed as investment advice or investment recommendation of those companies.

4-8

Equity Derivative Strategies

UK Equities

Alternatives

10

4

%

%

High Yield Bonds 6 %

Asset Potential Income

%


Portfolio Activity

11

Purchases Pearson BHP Billiton

Sky Altria

Barclays

Additions Bodycote Admiral Royal Dutch Shell

Legal & General Carnival

Reductions Imperial Tobacco

Aviva

Sales Prudential Howdens Joinery

3i Spectris

Diageo Compass Friends Life Informa

Source BlackRock 1 April 2015 to 31 July 2015. Reference to the names of each company mentioned in this communications is merely for explaining the investment strategy, and should not be construed as investment advice or investment recommendation of those companies

70% Yield & Free Cash Flow

10% Turnarounds

20% Growth

Companies


Investment idea: Alternatives for income diversification

Direct Lending

Commercial Property

Renewable Energy

Residential mortgages

• Intention to build alternatives exposure up to 15% total portfolio allocation over several years

• Intention, over time, to leverage BlackRock’s broad range of income-generating alternative strategies

All investments involve risk to both income and capital and you may get back less than you invested



BIST Performance versus wider opportunity Set From 27th February 2015 to 31st August 2015

Source: BlackRock, August 31st 2015. NAV calculated with debt at fair value, BlackRock official inception date 26th Feb 2015 performance calculated from 27th Feb 2015 (month end).UK Equities: FTSE All Share Index (Total Return), UK Gilts: FTSE Actuaries All Gilt Index (Total Return Index). CPI data, one month lagged. May not available, April data used as a substitute. BIST performance figures impacted by the transition that occurred during the month of March 2015. UK Equities FTSE ALL SHARE - TOT RETURN IND £ Global Equities MSCI ACWI (£) - TOT RETURN IND, Emerging Market Equities: MSCI EM (Local) Gold Spot Rate $ Commodities Goldman Sachs Commodities Index $ Oil Spot Index $ Gilts BOFA ML UK GILTS ALL STOCKS (£) - TOT RETURN IND US 10yr Treasuries US BENCHMARK 10 YEAR DS GOVT. INDEX - TOT RETURN IND $ German 10yr Bunds BD BENCHMARK 10 YEAR DS GOVT. INDEX - TOT RETURN IND (LC) UK Corporate Bonds IBOXX £ CORP. ALL MATS. - TOT RETURN IND (£) Global Corporate Bonds BOFA ML GLB BROAD CORP (£) - TOT RETURN IND Global High Yield Bonds BOFA ML GLB ORIGINAL HIGH YIELD (£) - TOT RETURN IND Emerging Market Debt JPM GBI-EM BROAD Composite ($) - REITS TOT RETURN IND REITS FTSE/NAREIT


Yield Comparison vs. cross-asset opportunity set: 31st August 2015

Yield Comparator

% Y

ield

Source: BlackRock, August 31st 2015. Dividend yield used for equities, and BIST. Yield to Maturity used for fixed income. UK Equities FTSE ALL SHARE - TOT RETURN IND £ Global Equities MSCI ACWI (£) - TOT RETURN IND, Gilts: BOFA ML UK GILTS ALL STOCKS (£) - TOT RETURN IND US 10yr Treasuries: US BENCHMARK 10 YEAR DS GOVT. INDEX - TOT RETURN IND $ German 10yr Bunds: BD BENCHMARK 10 YEAR DS GOVT. INDEX - TOT RETURN IND (LC) UK Corporate Bonds IBOXX £ CORP. ALL MATS. - TOT RETURN IND (£) Global Corporate Bonds BOFA ML GLB BROAD CORP (£) - TOT RETURN IND Global High Yield Bonds BOFA ML GLB ORIGINAL HIGH YIELD (£) - TOT RETURN IND Emerging Market Debt JPM GBI-EM BROAD Composite ($) – REITS: TOT RETURN IND REITS FTSE/NAREIT


Equities (Income & Growth) 44.5% Investment Grade Credit 5.2% BlackRock UK Equity Income Sleeve 41.4% BlackRock Global Investment Grade Corporate Bond Fund 5.2%

UK Equity Hedge -7.0%BlackRock Global Equity Income Fund 5.2% High Yield Bonds 12.3%

BlackRock Throgmorton Trust 2.4% High Yield Index Strategy 5.5%BlackRock Emerging Equity Income Fund 1.5% BlackRock Credit Opportunities Sleeve 4.5%

Scottish Mortgage Investment Trust 1.1% BlackStone GSO Loan Fund 2.2%

Equities Thematic 7.7% International Government Bonds (Income) 3.0%European Periphery Basket 3.7% Portuguese Government Bonds 3.0%

US Policy Basket 2.1%Oil Beneficiaries Basket 2.0% Listed Alternatives 5.2%

iShares UK Property Fund 1.1%Equities Tactical 9.7% BlueCrest Blue Trend 1.1%

TOPIX Index 4.1% Foresight Solar Fund 1.1%Options 1.7% NB Distressed Debt Fund 1.0%

DAX Index 1.0% Woodford Patient Capital Fund 0.8%India ETF 1.0%

BlackRock Asian Dragon Fund 0.9% Cash & Short Dated Government Bonds 2.0%BlackRock ASEAN Leaders Fund 0.9% Australian Government Bonds 3.0%

New Zealand Government Bonds 0.9%Volatility Strategies 10.5% Synthetic Cash (margin) -23.0%

Volatility Strategies 10.5% Physical Cash 21.1%

Commodities 0.0% Total 100.0%Gold Options Strategies 0.0%

Portfolio Holdings: August 31st 2015

Source: BlackRock, 31st August 2015. Cash includes derivatives cover and does not include cash held in the UK equity sleeve. Weightings as of date shown and do not necessarily represent current or future portfolio holdings. Reference to the names of each holding mentioned in this communication is merely for explaining the investment strategy, and should not be construed as investment advice or investment recommendation of those holdings.

Why BlackRock?

Strongly positioned to capitalise on the opportunity

Strong Track Record underpins proposition for Shareholders

BlackRock Income Strategies is at the heart of BlackRock’s retirement solutions offering

Excellent reputation in multi-asset

Committed to success in this

growing market space

Marketing and distribution strengths


Macro Outlook 2015

Source: BlackRock 30th Sept 2015. European Equities: ESTOXX, UK Equities FTSE All Share, US Equities: S&P 500, EM Equities: MSCI Em Markets. *TED Spread The TED spread is the difference between the interest rates on interbank loans and on short-term U.S. government debt ("T-bills"). TED is an acronym formed from T-Bill and ED, the ticker symbol for the Eurodollar futures contract.

Global equity market sell-off Peak to trough June 30th to September 30th 2015

Market Snapshot: Q3 2015

Shanghai A Shares: The bubble bursts Dec 31st 2013 to Sept 30th 2015

Volatility at levels not seen since 2011: Vix Index 31st Dec 2007 to 30th Sept 2015

No signs of severe financial market stress: TED Spreads have not moved aggressively*

-40% off the highs


Seeking out the best opportunities globally

Australia • Can economy rebalance from dependency

on mining and avoid downturn?

Europe (core) • German Bunds with low yields, re-

pricing of longer end, increase of volatility

• Subdued inflation pushing ECB towards further action

Europe (periphery) • Peripheral sovereigns are reaping the rewards of

reforms and recovery is supported by ECB QE • Reform momentum? • Election woes?

US • How will the Fed react to US labour

market strength? • “global economic and financial

developments” • Fed inertia fuelling market

uncertainty?

UK • Strong economic momentum, however

BoE rate hike priced to 2017.

Emerging Markets • Commodity supercycle

coming to an end • Concerns around China

and knock-on impact • Select opportunities

eg India

Japan • Large QE programme enough to

spur inflation and growth?

Source: BlackRock as at 30 September 2015

For Professional Clients / Qualified Investors Only IISGPS-0693

No asset class is an island

Volatility is making a comeback

Sources: Bloomberg Move Index and VIX Index as at 26 August 2015

Downside protection In Portfolios

Volatility in fixed income markets has been

moving higher since late 2014, it was a matter

of time before this fed in to equity market

volatility

In August, equity volatility reached its highest

level since November 2011 as investors

focused on slowing Chinese growth, falling oil

prices, renewed concern over Greece, and the

prospect of higher interest rates in the US.

As equity volatility moves higher over the

medium term….the cost of mistiming asset

allocation decisions in increasing

0

5

10

15

20

25

30

35

40

0

20

40

60

80

100

120

31/0

1/20

1428

/02/

2014

31/0

3/20

14

30/0

4/20

14

31/0

5/20

14

30/0

6/20

14

31/0

7/20

14

31/0

8/20

14

30/0

9/20

14

31/1

0/20

14

30/1

1/20

14

31/1

2/20

14

31/0

1/20

1528

/02/

2015

31/0

3/20

15

30/0

4/20

15

31/0

5/20

15

30/0

6/20

15

31/0

7/20

15

Vix

Inde

x

Mov

e In

dex

Fixed Income Volatility (MOVE Index) Equity (VIX Index)


The Fed wants to hike rates…..

Labour market slack is diminishing

Sources: Blackrock/ Bloomberg/ Thomson Reuters Datastream, July 2015

Avoid duration assets In Portfolios

Its time for the Fed to raise interest rates.

Macro-economic and labour market data in the

US continues to point towards a broad based

and sustained economic recovery

Whilst the Fed have signalled their desire to

begin normalizing interest rates in 2015,

continued oil price declines and uncertainty

around the outlook for global growth may push

interest rate hikes out to the new year.

The market is pricing a gradual pace of hikes

and lower terminal rate

Fed tightening has widespread implications

for global asset prices

0

2

4

6

8

10

12

% u

nem

ploy

ed

US Unemployment


The hunt for yield to continue

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

US Treasury US Municipal Global Credit Global High Yield

US Agencies Emerging Market US MBS US CMBS

Euro Periphery Euro Core

Actively managed credit In Portfolios

Fixed Income Asset Yielding over 4% Despite the prospect of rising rates in the

US, the proportion of global fixed income

assets yielding over 4% continues to fall.

With many sovereign and even some

corporate bond yields in negative territory,

investors are desperate to find yield where

they can.

Depressed yields in sovereign bonds should

provide support for investment grade credit.

While default rates remain low, active

management is preferable as rising rates

should induce more volatility into fixed

income markets in 2015.

Sources: Blackrock/ Bloomberg/ Thomson Reuters Datastream, February 2015


European QE and the domestic recovery

The ECB surpassed market expectations in

January by announcing a €1.1 trillion program of

quantitative easing.

The domestic recovery in peripheral Europe is

already well underway

Despite recent underperformance in European

sovereign bonds, we think the fundamentals point

to lower yields from here. Supply and demand

dynamics over the summer should cause a gradual

grind lower in yields and the periphery should

converge with the core

As deflationary pressures from the continued fall in

commodity prices may lead the ECB to act further

in the coming months

Peripheral sovereign debt and European domestic equities In Portfolios

Forward Eurozone Inflation Expectations

Sources: Markit 5yr5yr Inflation swaps 08/25/2015

1.4

1.5

1.6

1.7

1.8

1.9

2.0

2.1

2.2

Infla

tion

Rat

e


No more bull in the China shop

Most indicators point to slowing growth

Sources: Blackrock/ Bloomberg/ Thomson Reuters Datastream, July 2015

China’s growth is slowing and financial

leverage is reaching its limits as China

attempts to make the transition to a services

based economy.- China cannot deleverage

without accepting lower growth.

Continued RMB depreciation could lead to

further capital outflows and tighter

monetary conditions onshore – an

undesirable outcome for China.

Chinese official GDP continues to print

higher than one would expect looking at

the underlying economic data- but it is

clear that Chinese economic growth is

slowing, and this will have profound

implications beyond emerging markets

Avoid China Related Assets In Portfolios

-20%

0%

20%

40%

60%

% G

row

th

Steel Production

-50%

0%

50%

100%

150%

% G

row

th

Auto Sales


Appendix


Portfolio Holdings: August 31st 2015

Source: BlackRock, 31st August 2015. Cash includes derivatives cover and does not include cash held in the UK equity sleeve. Weightings as of date shown and do not necessarily represent current or future portfolio holdings. Reference to the names of each holding mentioned in this communication is merely for explaining the investment strategy, and should not be construed as investment advice or investment recommendation of those holdings.

26

UK Equities 43.8% Investment Grade Corporate Bonds 5.2% BlackRock UK Equity Income Sleeve 41.4% BlackRock Global Investment Grade Corporate Bond Fund 5.2%

BlackRock Throgmorton Trust 2.4%High Yield Bonds 12.3%

High Yield Index Strategy 5.5%Overseas Equities 15.5% BlackRock Credit Opportunities Sleeve 4.5%

BlackRock Global Equity Income Fund 5.2% BlackStone GSO Loan Fund 2.2%TOPIX Index 4.1%

European Periphery Basket 3.7% International Government Bonds 6.9%US Policy Basket 2.1% Portuguese Government Bonds 3.0%

Oil Beneficiaries Basket 2.0% New Zealand Government Bonds 0.9%Gold Miners Index 1.6% Australian Government Bonds 3.0%

iShares UK Property Fund 1.1%Scottish Mortgage Investment Trust 1.1% Commodities 0.0%

India ETF 1.0% Gold Options Strategy 0.0%DAX Index 1.0%

Individual Equities (legacy) 0.2% Alternatives 4.0%Options -0.7% BlueCrest Blue Trend 1.1%

Equities Futures (Hedging) -7.0% Foresight Solar Fund 1.1%NB Distressed Debt Fund 1.0%

Emerging Market Equities 3.3% Woodford Patient Capital Fund 0.8%BlackRock Asian Dragon Fund 0.9%

BlackRock ASEAN Leaders Fund 0.9% Cash Equivalents -1.4%BlackRock Emerging Equity Income Fund 1.5% Synthetic Cash (margin) -22.5%

Physical Cash 21.1%

Volatility Strategies 10.5%Volatility Strategies 10.5% Total 100.0%

• Expect sustained lower oil prices – any recovery likely to be shallow rather than V-shaped

• Analysts are slow to incorporate new commodity price environment into pricing models

• Potential for sectors where oil is a significant operating cost • Those which indirectly benefit from higher consumer

disposable income and companies with negative EPS sensitivity to the oil price to outperform e.g. Airlines, Trucking, Retail.

• Prefer companies that have not hedged commodity exposure

• Build bespoke basket to reflect these themes • Equal weight constituent companies to avoid stock specific

risk

• Implemented position on 30th January 2015.

Multi-Asset Research

Maximise return from our research

Portfolio construction

Trade example: Oil Beneficiaries basket

Source: BlackRock representative account, breakdown of basket as at 30/1/2015

Market Cap split by Geography

Market Cap split by Industry

ISGPS-0547 27 FOR PROFESSIONAL CLIENTS / QUALIFIED INVESTORS ONLY ISGPS-0683


Source: Bloomberg. 10yr weekly correlations of total returns (in local currency) Aug 2005-Aug 2015

Low correlation to equities

Source: Credit Suisse, July 2015

Growing market = Greater opportunity

Source: S&P LCD, March 2015

Leveraged loan spreads remain elevated

Source: Barclays, July 2015

Significant yield pick-up available down the European credit spectrum

BlackRock Credit Opportunities Yield enhancement amidst improving macro and company fundamentals

1

2

3

4

0

5

10

15

20

25

30

Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14

%

Pan-European HY Yield % Pan-European IG Yield %Ratio HY Yield to IG Yield (RH Axis)

200250300350400450500550600

Rol

ling

3 M

onth

Ave

rage

of

Term

Loa

n B

New

Issu

e Sp

read

s (b

ps)

050

100150200250300350400450500

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Eur B

n. O

utst

andi

ng

• The high yield market has grown

rapidly post crisis, offering

increased opportunities for credit

selection and generating yield

• Leveraged loan issuance (not

shown) has also been increasing

amidst renewed demand

New issue European

leveraged loan spreads

currently look cheap on a

risk-adjusted basis and

benefit from senior secured

status at good LTV

attachments

Correlation Matrix

European High Yield

European Lev. Loans

Eurostoxx 50 FTSE 100

European High Yield

1.00 0.76 0.66 0.66

European Lev. Loans

0.76 1.00 0.44 0.33

Eurostoxx 50 0.66 0.44 1.00 0.78

FTSE 100 0.66 0.33 0.78 1.00

29

Performance (as at 31st August 2015)*

*As the Company’s investment objective and strategy changed with effect from 27 February 2015, investment performance has not been given for any periods prior to this date. Annual performance to the latest calendar quarter end will be given for the first time from 31 March 2016. **BlackRock took over the investment management of the Company with effect from 27 February 2015. ***NAV performance is calculated based on Net Asset Value with debt at market value and with dividends reinvested. Where a company holds debt, for example in the form of a Bond or Debenture, this can be valued at Par value (i.e. the ultimate cost to the company of redeeming that debt) or, where the debt instrument is quoted, a market valuation may be used to value the debt. BlackRock Income Strategies Trust plc. has a £60m 2031 Bond, which is included in the NAV at market valuation based on the latest available quoted offer price on the London Stock Exchange. ****The Company’s investment objective is, over the medium term (5 to 7 years), to aim to preserve capital in real terms and to grow the dividend at least in line with inflation. The Company targets a total portfolio return of UK Consumer Price Index (“CPI”) plus 4 per cent. per annum (before ongoing charges) over a 5 to 7 year cycle. The percentage calculations given for CPI+4% above are for information purposes.

Performance (£)* 1m (%) 3m (%) 6m (%) Since Inception**

Share Price -1.6 -1.9 1.3 1.8

Net Asset Value*** -3.8 -5.2 -5.6 -5.5

Net Aset Vaue (before deduction of ongoing charges) -3.8 -5.1 -5.4 -5.3

CPI +4%**** 0.6 1.1 2.8 2.8

Sources: BlackRock, Office of National Statistics


30

Fund Information (as at 31st August 2015)*

Fund Information (as at 31.08.2015)

Net Asset Value including income (debt at fair value): 134.06p

Share Price 134.75p

Premium to cum income NAV (debit at fair value): 0.5%

Total assets (including income): £440.0 (m)

Net yield*: 5.0%

2014 Ongoing charges ratio** 0.65%

* Yield calculations are based on dividends announced in the last 12 months as at the date of release of this announcement. ** Calculated as a percentage of average net assets and using expenses excluding interest costs for the year ended 30 September 2014.


Board Members

James Long (Chairman) was appointed in 2006. He was formerly Director of Risk and Compliance for AstraZeneca Europe, Corporate Finance Director of Inchcape plc and Managing Director, Asia and Emerging Markets, for the ESAB Group. He is Chairman of JPMorgan Asian Investment Trust plc.

Lynn Ruddick was appointed in 2010. She is a fellow of the Chartered Association of Certified Accountants. She is non-executive chairman of Fidelity Special Values plc, and a non-executive director of Standard Life UK Smaller Companies Trust plc, a member of the Investment Committee of the Pearson Group Pension Plan and Chairman of the Scottish & Newcastle and Western Provident Association Pension Plans. Before retiring from Merrill Lynch Investment Managers in 2004 she headed their investment trust business unit.


Board Members

Jim Grover was appointed on 25 June 2013. He was, until September 2013, Group Strategy Director of Diageo plc and a member of its Executive Committee.

Jimmy West (Senior Independent Director) was appointed in 1995 and was formerly a Managing Director of Lazard Brothers and Co Ltd and Chief Executive of Lazard Asset Management Ltd. He is Chairman of New City High Yield Fund Ltd and a non-executive director of JPMorgan Income & Capital Trust plc, Aberdeen Smaller Companies High Income Trust plc and Threadneedle UK Select Trust plc. He is Chairman of Associated British Foods Pension Fund Ltd.

Ian Russell (Chairman of the Audit Committee) was appointed in 2008. He was formerly Chief Executive of Scottish Power plc. He is currently non-executive Chairman of Johnston Press plc, Remploy Ltd, and the Advanced Power AG advisory board, a non-executive director of British Polythene Industries plc, The Mercantile Investment Trust plc, and HICL Infrastructure Company Limited, and an adviser to the Clyde Bergemann Power Group.


Board Members


Julian Sinclair was appointed as a director of BlackRock Income Strategies Trust plc on 21 July 2015. He is the Chief Investment Officer at Talisman Global Asset Management Limited. Prior to joining Talisman, he was a Senior Portfolio Manager at BlueBay Asset Management plc and a Partner at Altima Partners LLP. He started his career at Gartmore as an analyst and portfolio manager.

33

Diversified Strategies Team

Andrew Warwick Managing Director (22 yrs experience)

Diversified Strategies Team Top-down, macro asset allocation team responsible for portfolio management, risk monitoring, and tactical investment ideas Managing assets for individual investors, institutions, pension plans, central banks and sovereign wealth funds Risk & Quantitative Analysis: Daily interaction & stress testing with dedicated risk managers and analysts

Dominic Byrne

Joanna Langton

Kyle Smith

John Mullins

BlackRock Global Investment Platform

Multi-Asset Research

+170 investment professionals dedicated to multi-asset

investing

Global Investment Teams

+1,700 investment professionals with specialties across all

asset classes

Risk & Quantitative Analysis

+500 professionals partner with investment teams to monitor

and analyze risk

BlackRock Solutions

Proprietary Aladdin® platform integrates portfolio

management, risk analytics, trading and operations

BlackRock Investment Institute

Internal forum facilitates idea sharing and debates insights

Adam Ryan Managing Director

Head of Team (22 yrs experience)

Sara Morgan Managing Director (25 yrs experience)

19 Investment Professionals

Source: BlackRock as at October 2015

34

Jason Byrom

Aatish Patel

Einar Benediktsson

James Ayling

Rupert Harrison

Conan MacKenzie

Mindaugas Mazeikis

Carlo Zarattini

Beata Harasim

Filip Wyszynski

Mihail Calinescu

Roderick MacKenzie

For Professional Clients / Qualified Investors Only IISGPS-0693

• Alternative investments (such as property, renewable power) are expected to have a different risk and return profile to the rest of the Trust’s investment portfolio. These investments will be relatively illiquid and it may be difficult for the Company to realise these investments over a short time period, which may have a negative impact on the Trust’s performance.

• The Company may from time to time utilise gearing. Gearing works by magnifying the company’s performance. If a company ‘gears up’ and then markets rise and the returns on the investments outstrip the costs of borrowing, the overall returns to investors will be even greater. But if markets fall and the performance of the assets in the portfolio is poor, then losses suffered by the investor will also be magnified.

• Net Asset Value (NAV) performance is not the same as share price performance, and shareholders may realise returns that are lower or higher than NAV performance.

• The Trust invests in fixed interest securities such as corporate or government bonds which pay a fixed or variable rate of interest (also known as the ‘coupon’) and behave similarly to a loan. These securities are therefore exposed to changes in interest rates which will affect the value of any securities held.

• The Trust invests in fixed interest securities issued by companies which, compared to bonds issued or guaranteed by governments, are exposed to greater risk of default in the repayment of the capital provided to the company or interest payments due to the fund.

• The Trust may be exposed to finance sector companies, as a service provider or as counter party for financial contracts. Liquidity in the financial markets has been severely restricted, causing a number of firms to withdrawn from the market, or in some extreme cases, becoming insolvent. This may have an adverse affect on the activities of the fund.

• Derivatives may be used substantially for complex investment strategies. These include the creation of short positions where the Investment Manager artificially sells an investment it does not physically own. Derivatives can also be used to generate exposure to investments greater than the net asset value of the fund / investment trust. Investment Managers refer to this practice as obtaining market leverage or gearing. As a result, a small positive or negative movement in stockmarkets will have a larger impact on the value of these derivatives than owning the physical investments. The use of derivatives in this manner may have the effect of increasing the overall risk profile of the Funds.

• Certain developing countries are especially large debtors to commercial banks and foreign governments. Investment in debt obligations (sovereign debt) issued or guaranteed by developing governments or their agencies involve a high degree of risk.

• The Trust invests a large portion of assets which are denominated in other currencies; hence changes in the relevant exchange rate will affect the value of the investment.

• The Trust can invest in Exchange Traded Funds and Collective Investment Schemes that may also be managed by BlackRock.

Key Risks


Important Information

This material is for distribution to Professional Clients (as defined by the FCA Rules) and should not be relied upon by any other persons.

Issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial Conduct Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Tel: 020 7743 3000. Registered in England No. 2020394. For your protection telephone calls are usually recorded. BlackRock is a trading name of BlackRock Investment Management (UK) Limited.

Past performance is not a guide to future performance. The value of investments and the income from them can fall as well as rise and is not guaranteed. You may not get back the amount originally invested. Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time.

Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy.

This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer. BlackRock have not considered the suitability of this investment against your individual needs and risk tolerance. Any decision to invest must be based solely on the information contained in the Company’s Prospectus, and the latest half-yearly report and unaudited accounts and/or annual report and audited accounts. BlackRock Investor Pulse survey, conducted in association with research agency Cicero Group in September 2013 amongst a nationally representative sample of 17,600 individuals in 12 countries aged 25 to 74 years old, of which 2,000 UK residents. The results of this survey are provided for information purposes. The conclusions are intended to provide an indication of the current attitude of a sample of citizens in the UK to saving and investing and should not be relied upon for any other purposes. Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy. This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer. Important information The BlackRock Investment Trusts ISA is managed by BlackRock Investment Management (UK) Limited. The BlackRock Investment Trusts Savings Plan is operated by BlackRock Investment Management (UK) Limited. BlackRock have not considered the suitability of this investment against your individual needs and risk tolerance. To ensure you understand whether our product is suitable, please read the Key Features document, current Shareholder circular and the Annual and Half Yearly Reports which are available from the manager and provide more information about the risk profile of the investment. We strongly recommend you seek financial advice prior to investing. Non-mainstream pooled investment products status The Company currently conducts its affairs so that its securities can be recommended by IFAs to ordinary retail investors in accordance with the FCA’s rules in relation to non-mainstream investment products and intends to continue to do so for the foreseeable future. The securities are excluded from the FCA’s restrictions which apply to non-mainstream investment products because they are shares in an investment trust.

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