BlackRock Science and Technology Trust II (BSTZ)

[Pages:6]BlackRock Science & Technology Trust II (BSTZ)

Commentary for First Quarter 2022

The views expressed reflect the opinions of BlackRock as of March 31st, 2022 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.

Investing in next generation technology companies:

BlackRock Science and Technology Trust II (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. CEFs may pursue investment strategies that focus on a broader opportunity set, including less liquid and private investments that may offer higher return and income potential. Taking advantage of this structure, BSTZ seeks to invest up to 25% of its portfolio in private investments.

BlackRock believes that the use of technology is reshaping industries across the globe, presenting unique growth 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.

The Trust has a distribution rate1 of 7.8%, paid monthly. BSTZ also has a limited term, meaning it will offer full liquidity at net asset value to investors in year 12 of the Trust's life2.

Private investments3

The team continues to perform due diligence on multiple new opportunities and expects to manage exposure to private assets over the coming quarters, given the current allocation to private equity. As of March 31st, 2022, the Trust held 22 private investments, comprising 30.7% of total assets or a total commitment of approximately $779 million.

During the quarter, the Trust did not add additional capital to private investments. One private investment in the portfolio, Credo Technology, experienced a liquidity event during the period. The US-based semiconductor company underwent an IPO in January.

Other noteworthy private companies such as GrubMarket, Klarna, and Think & Learn are highlighted in the performance section. 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.

1 Distribution rate is calculated by annualizing the Trust's latest declared regular distribution on July 1st, 2021 and dividing that number by theTrust's market price as of thesame day. The distribution rate is calculated net of expenses. BSTZ's estimated source of distributions paid during the current fiscal year to date is 100% short-term capital gains as of 12/31/21. The amounts and sources of distributions reported are only estimates and are not provided for tax reporting purposes. 2 The Trust currently intends to dissolve on or about January 29, 2032 (the "Dissolution Date"); 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 dateup to and including eighteen months after the initial Dissolution Date (which date shall then become the Dissolution Date). Each holder of common shares would bepaid a pro rataportion of the Trust's net assets upon dissolution of theTrust. 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 priceequal to the NAV per common share on the expiration date of the tender offer 3 These investments were selected to illustratethe Trust's private investments made since the inception of the fund. The information above is not a prediction of future performanceor any assurancethat 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 beassumed that the investment team will invest in comparable investments, or that any future investments madeby theinvestment team will besuccessful. To theextent that these investments prove to be profitable, it should not beassumed that the investment team's other investments will be profitable or will be as profitable.

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Private investments in BSTZ:3

Company

Industry

Flix Mobility Klarna C3.ai

Innovium PSI Quantum

Gitlab Trax Unqork Databricks SiteMinder CNEX Credo Sambanova AvidXchange Farmers Business Network GrubMarket Trumid Nuvia ResearchGate Think & Learn Pvt Ltd Cazoo Limited Snorkel Ai DataRobot Snyk Limited ByteDance Arrival Mythic AI, Inc. Automattic Deep Instinct Astranis Space Tech Rapyd Financial Network

Road & Rail IT Services Software Semiconductors Semiconductors Software IT Services Software Software Software Semiconductors Electrical Equipment Semiconductors Software Food Tech Food Tech IT Services Semiconductors Entertainment Education Tech Specialty Retail Diversified Financial Services Software Software Interactive Media & Services Automobiles

Internet IT Services IT Services Communications Equipment Software

Investment Quarter

Q3 2019 Q3 2019 Q3 2019 Q3 2019 Q3 2019 Q3 2019 Q3 2019 Q3 2019 Q4 2019 Q1 2020 Q1 2020 Q1 2020 Q1 2020 Q3 2020 Q3 2020 Q3 2020 Q3 2020 Q3 2020 Q3 2020 Q3 2020 Q4 2020 Q4 2020 Q4 2020 Q4 2020 Q4 2020 Q4 2020 Q1 2021 Q1 2021 Q1 2021 Q1 2021 Q1 2021

Investment Amount ($m)

$9.6 $101.2 $26.2 $17.8

$9.2 $25.4 $26.0 $24.4 $83.7 $24.9 $10.0 $24.9 $49.5 $8.2 $13.9 $8.0 $20.4 $30.8 $6.8 $31.1 $46.1 $3.0 $13.1 $32.5 $42.0 $20.0 $7.0 $34.0 $12.0 $17.0 $14.0

Current Phase

Private Private Public Acquired Private Public Private Private Private Public Private Private Private Public Private Private Private Acquired Private Private Public Private Private Private Private Public Private Private Public Private Private

Portfolio Ownership

Held Held Exited Exited Held Held Held Held Held Held Held Held Held Held Held Held Held Exited Held Held Held Held Held Held Held Held Held Held Held Held Held

Performance

The Trust posted negative performance of -15.9%4 (net of fees) over the first quarter of 2022.

With regards to M&A activity, gaming companies continued to consolidate as multiple large-scale acquisitions occurred in Q1. Microsoft's $69 billion

Global equity markets detracted during in the first quarter of the year, with the MSCI ACWI Index returning -5.4% in USD terms, making it the worst performing quarter since the COVID-19 pandemic drawdown of 2020. Implied volatility spiked due to growing geopolitical concerns surrounding

acquisition of Activision Blizzard marked the largest deal in the gaming industry. Take-Two's roughly $13 billion acquisition of Zynga marked another high-profile acquisition with the hopes of expanding presence in the mobile game space.

the Russian invasion of Ukraine, coupled with surging energy prices, global supply chain disruptions, and persistent inflation.

At an industry level, one of the Trust's sub-sector exposures, New Industries, contributed to absolute returns. Software, internet, services, content & infrastructure,

Amidst a highly volatile market during the period, investors sold out of risk assets such as smaller-capped, high-growth

semiconductors, and hardware detracted from returns during the period.

tech stocks, which make up the investable universe of the Trust. March 2022 brought the first interest rate hike since 2018 in the US, hurting tech stocks as high-multiple risk assets traded downward. Smaller, growthier tech broadly underperformed value tech and other cyclical sectors over the quarter.

On a stock-specific basis, a position in semiconductor inspection company Lasertec was the largest detractor from performance during the period. The company's stock came under pressure due to its high revenue exposure to

China and traded down due to weakening investor sentiment towards the country. Overall, Chinese equities

The Russia-Ukraine war has led to both direct and indirect consequences for the technology sector. Eastern Europe is home to a large pool of tech talent, namely web and digital engineers. As such, the invasion hurt companies with a

broadly sold-off as disruptions from the country's COVID19 outbreak brought the near-term outlooks for companies

like Silergy into question, leading the company to also appear in the top detractors over the quarter.

strong employee presence in the region. Elsewhere, the

supply constraints from global sanctions in the region have

increased inflation concerns, contributing to the

aforementioned sell-off of growth assets.

4 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 guaranteefuture 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 performancequoted, and numbers may reflect small variances due to rounding.

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In addition, a position in Grid Dynamics also hindered performance during the quarter. The IT services company was hurt by the geopolitical uncertainty due to their strong employee presence in Eastern Europe. The conflict continues to complicate the risk-reward profile for many global IT services names.

Lastly, high-growth stocks like Marvell and GitLab were among the top detractors, despite strong fundamentals. Marvell, a high-multiple semiconductor manufacturer came under pressure over the period, even after reporting healthy quarterly financials. The drawdown was part of a broader sell-off of the semiconductor industry, which has continued to be one of the most resilient and best performing segments of the technology sector. The Trust took advantage of this price dislocation to add exposure to the industry during the quarter. Elsewhere, GitLab also detracted after the DevOps platform company sold off during the quarter, following a strong IPO in December.

Despite the volatility in the market during the quarter, private investments continued to add resilience and contribution on a relative basis. As a reminder, in addition to the initial valuation, private investments undergo continuous evaluation from our internal and external valuation teams and are reassessed for impacts to their valuations during high periods of volatility. Depending on information flow and a given company's circumstances, valuations may be updated quarterly, monthly or daily and can be reflected in the Trust's NAV. On a stock-specific basis, a private investment in GrubMarket was the top contributor to returns over the period. The farm-to-table grocery delivery company secured additional funding and benefitted from investor optimism of consumer demand for convenient, healthy food services.

Additionally, the Trust saw positive contribution from two private investments during the period. Klarna, a Swedishbased digital payments provider, announced results for 2021 that showed a 71% increase in users. The company's net operating income increased 38% to $1.6 billion by the end of 2021. In addition, Think & Learn, an Indian ed-tech company, benefitted from an enhanced valuation after the latest funding round in March.

Elsewhere, the shortage of semiconductors continued to disrupt many sectors. The insatiable global demand for chips led a private investment in Credo to appear as one of the top contributors, after the company went public during the quarter. The US-based semiconductor manufacturer provides connectivity IP for use in data centers, benefitting from both the general need for semiconductors as well as the increase in enterprise spending on digitalization.

Lastly, stocks that stand to benefit from increased enterprise spending contributed to the Trust's performance. Pure Storage, the US-based hardware company, rose on strong financials from increased enterprise spending over the quarter. The company appeared as one of the top contributors to the Trust's returns.5

BSTZ performance summary

Total return (NAV)

Q1 2022

-15.9%

Since Inception (cumulative)

90.0%

Total return (market price) -23.0%

75.8%

S&P MidCap 400 Info Tech Index

MSCI All Country Info Tech Index

-8.1% -10.3%

60% 97.1%

Source: BlackRock as of 3/31/22. The Trust's inception was 6/25/19. Returns are shown net of advisory fees paid by the Trust and net of the Trust's operating fees and expenses. A s of the Trust's shareholder report dated 12/31/2021, the Trust's g r oss expense ratio is 1.31%. Investors who purchase shares of the Trust through an investment adviser or other financial professional may separately pay a fee to that service provider. Pas t 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.

Option activity

The team maintained the call option writing strategy during the period, and at the end of the quarter 22.4% of the portfolio was overwritten. The Trust continues to seek opportunities to generate option premiums during periods of heightened volatility.

The option strategy employs a dynamic call writing process, focused on single stocks to allow for the greatest combination of cash flow and capital appreciation. This includes using multiple option positions diversified across strike prices and expiration dates while taking into account changes in market conditions effecting option pricing. For instance, given the rise in volatility for the portfolio companies during the quarter the option overlay was able to increase its average strike from approximately 8.5% out of the money on Dec 31st, 2021 to over 13% out of money by the end of the quarter while maintaining a similar level of cash flow.

Portfolio positioning as of 3/31/2022

In the portfolio, we have been taking advantage of market volatility by actively adding to high conviction holdings and trimming smaller, high-risk positions. We have reduced our allocation to the software sub-sector as some names face challenged near-term outlooks. The Trust has increased its exposures to hardware and semiconductors as many stocks now offer attractive entry points and healthy fundamentals. Over the long-term, we continue to focus on companies that are exposed to long-term secular demand; this encompasses companies seeing heightened demand from the migration to working remotely and increased adoption of emerging technologies, such as artificial intelligence, cloud computing, digital transformation, and e-commerce.

5 References tospecificsecurities and their issuers are for illustrativepurposes 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 thestrategy and it should not be assumed that the manager will invest in these investments or in comparableinvestments, or that any future investments made by themanager will besuccessful. To the extent that these investments prove to beprofitable, it should not be assumed that thestrategy will beprofitable or will be as profitable. A full list of each holdings contribution to performance is madeavailable upon request.

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At the end of the period, the Trust held 31% of net asset value ("NAV") in software, 25% in semiconductors, 17% in services, 11% in internet, 8% in hardware, 4% in new industries, and 3% in content & infrastructure. These industry exposures were a result of bottom-up stock selection.

Investment Outlook

We believe the recent shift in market sentiment is a shortterm phenomenon. While growth assets have been penalized due to rising rate concerns, the fundamentals of the companies within the portfolio remain compelling. In addition, given the persistent negative market sentiment towards growth stocks, we believe much of the rising rate risk could already be priced into the market.

We maintain our exposure to long-term secular themes within the portf olio, while also taking advantage of attractively valued cyclical names which are likely to benefit from the resumption of economic normalcy. Social distancing and the migration to working remotely have accelerated the pace of adoption for trends we were already positioned for in the p ortf olio, such as cloud computing, e-commerce, and gaming.

In the near-term, we have bolstered the portfolio against continued volatility through the addition of more quality, and less rate-sensitive companies, particularly on the large and mega market cap spectrum. We have also maintained our conviction in software comp anies with strong market-leading products and secular demand, such as in cloud computing, data analytics, developer tools, and cybersecurity.

Long-term we believe the investment thesis for the companies in which we are investing is unimpeded by the medium-term effects of COVID-19, and many of these companies are in fact experiencing increased demand as global enterprises rush to invest in the modernization of their operations and as consumers continue to leverage technology in a socially distanced world.

BSTZ portfolio/Trust statistics

Distribution rate (market price) % of NAV overwritten with options Number of public holdings Private investments (% of total assets)

7.8% 22.4%

70 30.7%

Top 10 holdings

(as % of portfolio assets)

Company name

Industry

Klarna

Marvell Technology Inc Tesla Inc

Sambanova

Credo Technology Group

Kakao Corp

Wolfspeed Inc Databricks ByteDance Endava

IT Services Semiconductors & Semiconductor Equipment Automobiles Semiconductors & Semiconductor Equipment Semiconductors & Semiconductor Equipment Interactive Media & Services Semiconductors & Semiconductor Equipment Software Internet IT Services

Source: BlackRock as of 3/31/2022.

Position size

5.2%

4.2% 3.6%

2.5%

2.5% 2.4%

2.2% 2.1% 2.0% 1.8%

Geography breakdown

(as % of portfolio assets)

Country United States Korea (South), Republic of Sweden United Kingdom China Netherlands Japan Cayman Islands Australia India France Israel Argentina Other

Allocation 58.9% 5.2% 5.2% 4.9% 4.6% 3.5% 3.1% 2.5% 1.9% 1.8% 1.2% 1.1% 1.0% 5.2%

Source: BlackRock as of 3/31/2022. Other includes positions in Singapore, Brazil, New Zealand, Germany, Canada, Uruguay, Luxembourg, Norway, Taiwan, and Hong Kong.

Source: BlackRock as of 3/31/2022. Distribution rate is calculated by annualizing the Trust's latest declared regular distribution and dividing that number by the Trust's market price as of 3/31/2022.

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Sector breakdown

(as % of portfolio assets)

Sector

Software Software IT Services Interactive Media & Services Professional Services

Semiconductors Semiconductors & Semiconductor Equipment None

Services IT Services Software Professional Services Capital Markets

Internet Interactive Media & Services Internet & Direct Marketing Retail None Road & Rail Entertainment Software Hotels, Restaurants & Leisure

Hardware Automobiles Electronic Equipment, Instruments & Components Technology Hardware, Storage & Peripherals

New Industries Diversified Consumer Services Food & Staples Retailing Food Products

Content & Infrastructure Entertainment Software Communications Equipment

Other

Source: BlackRock as of 3/31/2022

Market cap breakdown

(as a % of portfolio assets)

Allocation

31.3% 21.7% 7.7% 1.5% 0.4% 25.3% 25.1% 0.2% 16.7% 13.5% 1.8% 1.2% 0.2% 11.1% 3.8% 2.1% 2.1% 1.2% 0.8% 0.6% 0.6% 7.8% 4.1% 2.4% 1.3% 4.2% 1.8% 1.6% 0.8% 3.3% 1.7% 0.9% 0.6% 0.5%

50bln and over 25bln to 50bln 10.0bln to 25bln 2.0bln to10.0bln

500 to 2.0bln 0 to 500mln

Private holdings & other Cash

3.1% 0%

2%

10.1%

15.8%

18.5% 16.9%

0% 5% 10% 15% 20% 25%

30%

33.8% 35% 40%

Source: BlackRock as of 3/31/2022. Other includes private investments and locked up capital.

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Important information about the Trust

This document and the information contained herein relates solely to BlackRock Science and Technology Trust II(BSTZ). Theinformation contained herein does not relateto, and is not relevant to, any other fund 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 c onsider the Trust's in vestment objective, risk factors, and ch arges and expenses bef ore in vesting. This and other information can be found in the Trust's prospectus which may be obtained by visiting the SEC Edgar database. Read the prospectus carefully before investing.

Common shares for the closed-end fund identified above are only available for purchase and sale at current market price on astock exchange. A closed-end fund's dividend yield, market price and NAV will fluctuatewith market conditions. Theinformation for this fund is provided for informational purposes only and does not constitutea solicitation of an offer tobuy or sell fund shares.

Performance results reflect pas t performance and are no guarantee of future results. Current p erformance may be lower or high er th an th e performance data quoted. All returns assume rein vestment of all dividends. The market valu e and net ass et value (NAV) of a fund'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 thetechnology group of industries, and investment focus may subject it to more risks than funds 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, theTrust's investments may subject it to a variety of risks, which may cause the value of the common shares of the Trust tofluctuatesignificantly 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 prospectus.

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 agiven 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 approximatethose 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 themortgage-related securities markets in particular, havein recent years experienced periods of extremesecondary 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 assurancethat the Trust will achieve its investment objective. The Trust is subject tonumerous risks, including investment risks discussed above. The Trust is not acomplete investment program and you may losemoney investing in the Trust. An investment in the Trust may not beappropriate 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 theFund's investment experienceduring the remainder of its fiscal year and may besubject to change based on tax regulations. The Fund 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 funds 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 fund 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:

S&P MidCap 400 Info Tech Index: Imposes capped weights on the index constituents of the S&P MidCap 400 that are classified in theGICS? information technology sector.

MSCI All Country Info Tech Index: Includes large and mid cap securities across 23 Developed Markets (DM) countries and 27 Emerging Markets (EM) countries. All securities in the index are classified in the Information Technology as per the Global Industry Classification Standard (GICS?).

? 2022 BlackRock, Inc. All Rights Reserved. BLACKROCK, BLACKROCK SOLUTIONS and iSHARES are trademarks of BlackRock, Inc., or its subsidiaries in the United States and elsewhere. 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

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