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Share Name | Share Symbol | Market | Type |
---|---|---|---|
MR Cooper Group (delisted) | NASDAQ:WMIH | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 1.31 | 0.62 | 1.56 | 0 | 01:00:00 |
Fund Overview | Key facts and details about the listed in this prospectus, including investment objective, principal investment strategies, principal risk factors, fee and expense information, and historical performance information | |
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11 |
Account Information | Information about account services, sales charges & waivers, shareholder transactions, and distributions and other payments | |
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29 | |
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34 | |
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35 | |
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40 | |
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42 |
Management of the Fund | Information about BlackRock and the Portfolio Manager | |
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48 |
Financial Highlights |
Financial
Performance of the Fund
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50 |
Glossary |
Glossary
of Investment Terms
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57 |
For More Information |
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Inside Back Cover |
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Back Cover |
Shareholder
Fees
(fees paid directly from your investment) |
Investor
A
Shares |
Investor
B
Shares |
Investor
C
Shares |
Institutional
Shares |
Class
R
Shares |
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Maximum Sales Charge (Load) Imposed on Purchases (as percentage of offering price) | 5.25% | None | None | None | None | |||||
Maximum Deferred Sales Charge (Load) (as percentage of offering price or redemption proceeds,percentage of offering price or redemption proceeds,whichever is lower) | None 1 | 4.50% 2 | 1.00% 2 | None | None | |||||
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment) |
Investor
A
Shares |
Investor
B
Shares |
Investor
C
Shares |
Institutional
Shares |
Class
R
Shares |
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Management Fee 3 | 0.43% | 0.43% | 0.43% | 0.43% | 0.43% | |||||
Distribution and/or Service (12b-1) Fees | 0.25% | 1.00% | 1.00% | None | 0.50% | |||||
Other Expenses | 0.61% | 0.90% | 0.64% | 0.55% | 0.73% | |||||
Other Expenses of the Subsidiary 4 | — | — | — | — | — | |||||
Total Annual Fund Operating Expenses | 1.29% | 2.33% | 2.07% | 0.98% | 1.66% | |||||
Fee Waivers and/or Expense Reimbursements 3 | (0.32)% | (0.32)% | (0.32)% | (0.32)% | (0.32)% | |||||
Total Annual Fund Operating Expenses After Fee Waivers and/ or Expense Reimbursements 3 | 0.97% | 2.01% | 1.75% | 0.66% | 1.34% |
1 | A contingent deferred sales charge (“CDSC”) of 0.75% is assessed on certain redemptions of Investor A Shares made within 18 months after purchase where no initial sales charge was paid at the time of purchase of an investment of $1,000,000 or more. |
2 | The CDSC for Investor B Shares is 4.50% if shares are redeemed in less than one year. The CDSC for Investor B Shares decreases for redemptions made in subsequent years. After six years there is no CDSC on Investor B Shares. (See the section “Details About the Share Classes — Investor B Shares” for the complete schedule of CDSCs.) There is no CDSC on Investor C Shares after one year. |
3 | As described in the Fund’s prospectus on page 44, BlackRock has contractually agreed to waive its management fee by the amount of any management fees the Fund pays the manager of the Master Portfolios (defined below) indirectly through its investment in the Master Portfolios for as long as the Fund invests in the Master Portfolios. The contractual agreement may be terminated upon 90 days notice by a majority of the non-interested directors of the Fund or by a vote of a majority of the outstanding voting securities of the Fund. |
4 | Other expenses of the BlackRock Cayman Master Total Return Portfolio I, Ltd. (the “Subsidiary”) were less than 0.01% for the Fund’s last fiscal year. |
1 Year | 3 Years | 5 Years | 10 Years | |
Investor A Shares | $619 | $818 | $1,033 | $1,652 |
Investor B Shares | $654 | $980 | $1,283 | $2,069 |
Investor C Shares | $278 | $551 | $ 949 | $2,062 |
Institutional Shares | $ 67 | $211 | $ 368 | $ 822 |
Class R Shares | $136 | $425 | $ 734 | $1,613 |
1 Year | 3 Years | 5 Years | 10 Years | |
Investor B Shares | $204 | $630 | $1,083 | $2,069 |
Investor C Shares | $178 | $551 | $ 949 | $2,062 |
■ | Commodities Related Investments Risks — Exposure to the commodities markets may subject the Fund to greater volatility than investments in traditional securities. The value of commodity-linked derivative investments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity, such as drought, floods, weather, embargoes, tariffs and international economic, political and regulatory developments. |
■ | Convertible Securities Risk — The market value of a convertible security performs like that of a regular debt security; that is, if market interest rates rise, the value of a convertible security usually falls. In addition, convertible securities are subject to the risk that the issuer will not be able to pay interest or dividends when due, and their market value may change based on changes in the issuer’s credit rating or the market’s perception of the issuer’s creditworthiness. Since it derives a portion of its value from the common stock into which it may be converted, a convertible security is also subject to the same types of market and issuer risks that apply to the underlying common stock. |
■ | Debt Securities Risk — Debt securities, such as bonds, involve interest rate risk, credit risk, extension risk, and prepayment risk, among other things. |
Interest Rate Risk — The market value of bonds and other fixed-income securities changes in response to interest rate changes and other factors. Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall and decrease as interest rates rise. The Fund may be subject to a greater risk of rising interest rates due to the current period of historically low rates. For example, if interest rates increase by 1%, assuming a current portfolio duration of ten years, and all other factors being equal, the value of the Fund’s portfolio would be expected to decrease by 10%. The magnitude of these fluctuations in the market price of bonds and other fixed-income securities is generally greater for those securities with longer maturities. Fluctuations in the market price of the Fund’s investments will not affect interest income derived from instruments already owned by the Fund, but will be reflected in the Fund’s net asset value. The Fund may lose money if short-term or long-term |
interest rates rise sharply in a manner not anticipated by Fund management. To the extent the Fund invests in debt securities that may be prepaid at the option of the obligor (such as mortgage-backed securities), the sensitivity of such securities to changes in interest rates may increase (to the detriment of the Fund) when interest rates rise. Moreover, because rates on certain floating rate debt securities typically reset only periodically, changes in prevailing interest rates (and particularly sudden and significant changes) can be expected to cause some fluctuations in the net asset value of the Fund to the extent that it invests in floating rate debt securities. These basic principles of bond prices also apply to U.S. Government securities. A security backed by the “full faith and credit” of the U.S. Government is guaranteed only as to its stated interest rate and face value at maturity, not its current market price. Just like other fixed-income securities, government-guaranteed securities will fluctuate in value when interest rates change. | |
Credit Risk — Credit risk refers to the possibility that the issuer of a debt security (i.e., the borrower) will not be able to make principal and interest payments when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer. The degree of credit risk depends on the issuer’s financial condition and on the terms of the securities. | |
Extension Risk — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these obligations to fall. | |
Prepayment Risk — When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields. | |
■ | Derivatives Risk — The Fund’s use of derivatives may reduce the Fund’s returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. A risk of the Fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately. Valuation may be more difficult in times of markey turmoil since many investors and market makers may be reluctant to purchase complex instruments or quote prices for them. Derivatives also may expose the Fund to greater risk and increase its costs. Certain transactions in derivatives involve substantial leverage risk and may expose the Fund to potential losses that exceed the amount originally invested by the Fund. Recent legislation calls for new regulation of the derivatives markets. The extent and impact of the regulation is not yet known and may not be known for some time. New regulation may make derivatives more costly, may limit the availability of derivatives, or may otherwise adversely affect the value or performance of derivatives. Certain aspects of the tax treatment of derivative instruments, including swap agreements and commodity-linked derivative instruments, are currently unclear and may be affected by changes in legislation, regulations or other legally binding authority that could affect the character, timing and amount of the Fund’s taxable income or gains and distributions. |
■ | Dollar Rolls Risk — Dollar rolls involve the risk that the market value of the securities that the Fund is committed to buy may decline below the price of the securities the Fund has sold. These transactions may involve leverage. |
■ | Emerging Markets Risk — Emerging markets are riskier than more developed markets because they tend to develop unevenly and may never fully develop. Investments in emerging markets may be considered speculative. Emerging markets are more likely to experience hyperinflation and currency devaluations, which adversely affect returns to U.S. investors. In addition, many emerging securities markets have far lower trading volumes and less liquidity than developed markets. |
■ | Equity Securities Risk — Stock markets are volatile. The price of an equity security fluctuates based on changes in a company’s financial condition and overall market and economic conditions. |
■ | Foreign Securities Risk — Foreign investments often involve special risks not present in U.S. investments that can increase the chances that the Fund will lose money. These risks include: |
■ | The Fund generally holds its foreign securities and cash in foreign banks and securities depositories, which may be recently organized or new to the foreign custody business and may be subject to only limited or no regulatory oversight. |
■ | Changes in foreign currency exchange rates can affect the value of the Fund’s portfolio. |
■ | The economies of certain foreign markets may not compare favorably with the economy of the United States with respect to such issues as growth of gross national product, reinvestment of capital, resources and balance of payments position. |
■ | The governments of certain countries may prohibit or impose substantial restrictions on foreign investments in their capital markets or in certain industries. |
■ | Many foreign governments do not supervise and regulate stock exchanges, brokers and the sale of securities to the same extent as does the United States and may not have laws to protect investors that are comparable to U.S. securities laws. |
■ | Settlement and clearance procedures in certain foreign markets may result in delays in payment for or delivery of securities not typically associated with settlement and clearance of U.S. investments. |
■ | High Portfolio Turnover Risk — The Fund may engage in active and frequent trading of its portfolio securities. High portfolio turnover (more than 100%) may result in increased transaction costs to the Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of Fund portfolio securities may result in the realization and/or distribution to shareholders of higher capital gains or losses as compared to a fund with less active trading policies. These effects of higher than normal portfolio turnover may adversely affect Fund performance. In addition, investment in mortgage dollar rolls and participation in TBA transactions may significantly increase the Fund’s portfolio turnover rate. A TBA transaction is a method of trading mortgage-backed securities where the buyer and seller agree upon general trade parameters such as agency, settlement date, par amount, and price. |
■ | Investment Style Risk — Because different kinds of stocks go in and out of favor depending on market conditions, the Fund’s performance may be better or worse than other funds with different investment styles (e.g., growth vs. value, large cap vs. small cap). |
■ | Junk Bonds Risk — Although junk bonds generally pay higher rates of interest than investment grade bonds, junk bonds are high risk investments that may cause income and principal losses for the Fund. |
■ | Market Risk and Selection Risk — Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money. |
■ | Mid Cap Securities Risk — The securities of mid cap companies generally trade in lower volumes and are generally subject to greater and less predictable price changes than the securities of larger capitalization companies. |
■ | Money Market Securities Risk — If market conditions improve while the Fund has temporarily invested some or all of its assets in high quality money market securities, this strategy could result in reducing the potential gain from the market upswing, thus reducing the Fund’s opportunity to achieve its investment objective. |
■ | Mortgage- and Asset-Backed Securities Risks — Mortgage- and asset-backed securities represent interests in “pools” of mortgages or other assets, including consumer loans or receivables held in trust. Mortgage- and asset- backed securities are subject to credit, interest rate, prepayment and extension risks. These securities also are subject to risk of default on the underlying mortgage or asset, particularly during periods of economic downturn. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities. |
■ | Preferred Securities Risk — Preferred securities may pay fixed or adjustable rates of return. Preferred securities are subject to issuer-specific and market risks applicable generally to equity securities. In addition, a company’s preferred securities generally pay dividends only after the company makes required payments to holders of its bonds and other debt. For this reason, the value of preferred securities will usually react more strongly than bonds and other debt to actual or perceived changes in the company’s financial condition or prospects. Preferred securities of smaller companies may be more vulnerable to adverse developments than preferred stock of larger companies. |
■ | Sovereign Debt Risk — Sovereign debt instruments are subject to the risk that a governmental entity may delay or refuse to pay interest or repay principal on its sovereign debt, due, for example, to cash flow problems, insufficient foreign currency reserves, political considerations, the relative size of the governmental entity’s debt position in relation to the economy or the failure to put in place economic reforms required by the International Monetary Fund or other multilateral agencies. |
■ | Structured Notes Risk — Structured notes and other related instruments purchased by the Fund are generally privately negotiated debt obligations where the principal and/or interest is determined by reference to the performance of a specific asset, benchmark asset, market or interest rate (“reference measure”). The purchase of structured notes exposes the Fund to the credit risk of the issuer of the structured product. Structured notes may be leveraged, increasing the volatility of each structured note’s value relative to the change in the reference measure. Structured notes may also be less liquid and more difficult to price accurately than less complex securities and instruments or more traditional debt securities. |
■ | Subsidiary Risk — By indirectly investing in the Subsidiary through its investments in the Total Return Portfolio, the Fund is indirectly exposed to the risks associated with the Subsidiary’s investments. The commodity-related instruments held by the Subsidiary are generally similar to those that are permitted to be held by the Fund or the Total Return Portfolio and are subject to the same risks that apply to similar investments if held directly by the Fund or the Total Return Portfolio (see “Commodities Related Investment Risks” above). There can be no assurance that the investment objective of the Subsidiary will be achieved. The Subsidiary is not registered under the Investment Company Act, and, unless otherwise noted in this prospectus, is not subject to all the investor protections of the Investment Company Act. However, the Total Return Portfolio wholly owns and controls the Subsidiary, and the Total Return Portfolio and the Subsidiary are both managed by BlackRock, making it unlikely that the Subsidiary will take action contrary to the interests of the Fund and its shareholders. Changes in the laws of the United States and/or the Cayman Islands could result in the inability of the Fund and/or the Subsidiary to operate as described in this prospectus and the Statement of Additional Information (“SAI”) and could adversely affect the Fund. |
In late July 2011, the Internal Revenue Service suspended the granting of private letter rulings that concluded that the income and gain generated by a registered investment company’s investments in commodity-linked notes, and the income generated from investments in controlled foreign subsidiaries that invest in physical commodities and/or commodity-linked derivative instruments, would be “qualifying income” for regulated investment company qualification purposes. As a result, there can be no assurances that the Internal Revenue Service will treat such income and gain as “qualifying income.” If the Internal Revenue Service makes an adverse determination relating to the treatment of such income and gain, the Fund will likely need to change its investment strategies, which could adversely affect the Fund. | |
■ | U.S. Government Issuer Risk — Treasury obligations may differ in their interest rates, maturities, times of issuance and other characteristics. Obligations of U.S. Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the U.S. Government. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so. |
■ | U.S. Government Mortgage-Related Securities Risk — There are a number of important differences among the agencies and instrumentalities of the U.S. Government that issue mortgage-related securities and among the securities that they issue. Mortgage-related securities guaranteed by the Government National Mortgage Association (“GNMA” or “Ginnie Mae”) are guaranteed as to the timely payment of principal and interest by GNMA and such guarantee is backed by the full faith and credit of the United States. GNMA securities also are supported by the right of GNMA to borrow funds from the U.S. Treasury to make payments under its guarantee. Mortgage-related securities issued by Fannie Mae or Freddie Mac are solely the obligations of Fannie Mae or Freddie Mac as the case may be, and are not backed by or entitled to the full faith and credit of the United States but are supported by the right of the issuer to borrow from the Treasury. |
As
of 12/31/13
Average Annual Total Returns |
1 Year | 5 Years 1 | 10 Years 1 |
BlackRock Balanced Capital Fund, Inc. — Investor A Shares | |||
Return Before Taxes | 13.74% | 11.41% | 5.25% |
Return After Taxes on Distributions | 10.33% | 9.95% | 3.68% |
Return After Taxes on Distributions and Sale of Shares | 9.05% | 8.65% | 3.83% |
BlackRock Balanced Capital Fund, Inc. — Investor B Shares | |||
Return Before Taxes | 14.28% | 11.27% | 5.10% |
BlackRock Balanced Capital Fund, Inc. — Investor C Shares | |||
Return Before Taxes | 18.05% | 11.73% | 4.99% |
BlackRock Balanced Capital Fund, Inc. — Institutional Shares | |||
Return Before Taxes | 20.35% | 12.97% | 6.13% |
BlackRock Balanced Capital Fund, Inc. — Class R Shares | |||
Return Before Taxes | 19.58% | 12.16% | 5.45% |
Russell
1000
®
Index
(Reflects no deduction for fees, expenses or taxes) |
33.11% | 18.59% | 7.78% |
Barclays
U.S. Aggregate Bond Index
(Reflects no deduction for fees, expenses or taxes) |
(2.02)% | 4.44% | 4.55% |
60%
Russell 1000 Index/40% Barclays U.S. Aggregate Bond Index
(Reflects no deduction for fees, expenses or taxes) |
17.95% | 13.09% | 6.78% |
1 | A portion of the Fund’s total return was attributable to proceeds received in a settlement of a litigation seeking recovery of investment losses previously realized by the Fund. |
Name |
Portfolio
Manager
of the Fund Since |
Title |
Philip Green | 2006 | Managing Director of BlackRock, Inc. |
Name |
Portfolio
Manager of the
Total Return Portfolio Since |
Title |
Rick Rieder | 2010 |
Chief
Investment Officer of Fixed Income,
Fundamental Portfolios BlackRock, Inc. |
Bob Miller | 2011 | Managing Director of BlackRock, Inc. |
Name |
Portfolio
Manager of the
Core Portfolio Since |
Title |
Peter Stournaras, CFA | 2010 | Managing Director of BlackRock, Inc. |
Investor
A and
Investor C Shares |
Investor B Shares | Institutional Shares | Class R Shares | |
Minimum
Initial
Investment |
$1,000
for all accounts except:
• $250 for certain fee-based programs. • $100 for certain employer-sponsored retirement plans. • $50, if establishing an Automatic Investment Plan. |
Available only through exchanges and dividend reinvestments by current holders and for purchase by certain employer-sponsored retirement plans. |
$2
million for institutions and individuals.
Institutional Shares are available to clients of registered investment advisers who have $250,000 invested in the Fund. |
$100 for all accounts. |
Minimum
Additional
Investment |
$50 for all accounts (with the exception of certain employer-sponsored retirement plans which may have a lower minimum). | N/A | No subsequent minimum. | No subsequent minimum. |
■ | Valuation |
■ | Management |
■ | Capital allocation |
■ | Business growth, and |
■ | Investor sentiment |
■ | Relative price to earnings and price to book ratios |
■ | Stability and quality of earnings |
■ | Earnings momentum and growth |
■ | Weighted median market capitalization of a Fund’s portfolio |
■ | Allocation among the economic sectors of a Fund’s portfolio as compared to the applicable index |
■ | Weighted individual stocks within the applicable index |
■ | U.S. Government debt securities |
■ | Corporate debt securities issued by U.S. and foreign companies |
■ | Asset-backed securities |
■ | Mortgage-backed securities |
■ | Preferred securities issued by U.S. and foreign companies |
■ | Corporate debt securities and preferred securities convertible into common stock |
■ | Foreign sovereign debt instruments |
■ | Money market securities |
■ | Borrowing — The Fund may borrow for temporary or emergency purposes, including to meet redemptions, for the payment of dividends, for share repurchases or for the clearance of transactions. In addition, the Fund may participate in certain loan programs sponsored by the United States of America (and any of its subdivisions, agencies, departments, commissions, boards, authorities, instrumentalities or bureaus) to the extent permitted by the Investment Company Act or any SEC relief granted thereunder. Such participations will not be considered borrowings for purposes of the Fund’s limitation on borrowing, but may create similar risk of leverage to the Fund. Borrowing may exaggerate changes in the net asset value of Fund shares and in the return on the Fund’s portfolio. Borrowing will cost the Fund interest expense and other fees. The costs of borrowing may reduce the Fund’s return. Certain derivative securities that the Fund may buy or other techniques that the Fund may use may create leverage, including, but not limited to, when-issued securities, forward commitments and futures contracts and options. |
■ | Collateralized Debt Obligations — The Fund may invest up to 10% of its net assets in collateralized debt obligations (“CDOs”), of which 5% (as a percentage of the Fund’s net assets) may be in collateralized loan obligations (“CLOs”). CDOs are types of asset-backed securities. CLOs are ordinarily issued by a trust or other special purposes entity and are typically collateralized by a pool of loans, which may include, among others, domestic and non-U.S. senior secured loans, senior unsecured loans, and subordinate corporate loans, including loans that may be rated below investment grade or equivalent unrated loans, held by such issuer. |
■ | Depositary Receipts — The Fund may invest in securities of foreign issuers in the form of depositary receipts or other securities that are convertible into securities of foreign issuers. |
■ | Illiquid/Restricted Securities — The Fund may invest up to 15% of its net assets in illiquid securities that it cannot sell within seven days at approximately current value. The Subsidiary will also limit its investment in illiquid securities to 15% of its net assets. In applying the illiquid securities restriaction to the Fund, the Total Return Portfolio’s investment in the Subsidiary is considered to be liquid. Restricted securities are securities that cannot be offered for public resale unless registered under the applicable securities laws or that have a contractual restriction that prohibits or limits their resale (i.e., Rule 144A securities). They may include private placement securities that have not been registered under the applicable securities laws. Restricted securities may not be listed on an exchange and may have no active trading market and therefore may be considered to be illiquid. Rule 144A securities are restricted securities that can be resold to qualified institutional buyers but not to the general public. |
■ | Indexed and Inverse Securities — The Fund may invest in securities the potential return of which is directly related to changes in an underlying index or interest rate, known as indexed securities. The Fund may also invest in securities the potential return of which is inversely related to changes in an interest rate (inverse floaters). The Fund may also purchase synthetically created inverse floating rate bonds evidenced by custodial or trust receipts. |
■ | Investment Companies — The Fund has the ability to invest in other investment companies, such as exchange-traded funds, unit investment trusts, and open-end and closed-end funds. The Fund may invest in affiliated investment companies, including affiliated money market funds and affiliated exchange-traded funds. |
■ | Master Limited Partnerships — The Fund may invest in publicly traded MLPs, which are limited partnerships or limited liability companies taxable as partnerships. MLPs generally have two classes of owners, the general partner and limited partners. If investing in an MLP, the Fund intends to purchase publicly traded common units issued to limited partners of the MLP. Limited partners have a limited role in the operations and management of the MLP. |
■ | Real Estate Investment Trusts —The Fund may invest in real estate investment trusts (“REITs”). |
■ | Repurchase Agreements and Purchase and Sale Contracts — The Fund may enter into certain types of repurchase agreements or purchase and sale contracts. Under a repurchase agreement, the seller agrees to repurchase a security at a mutually agreed-upon time and price. A purchase and sale contract is similar to a repurchase agreement, but purchase and sale contracts also provide that the purchaser receives any interest on the security paid during the period. |
■ | Reverse Repurchase Agreements — Reverse repurchase agreements involve the sale of securities held by a Fund with an agreement to repurchase the securities at an agreed-upon price, date and interest payment. |
■ | Securities Lending — The Fund may lend securities with a value up to 33 1 ∕ 3 % of its total assets to financial institutions that provide cash or securities issued or guaranteed by the U.S. government as collateral. |
■ | Short Sales — The Fund may make short sales of securities, either as a hedge against potential declines in value of a portfolio security or to realize appreciation when a security that the Fund does not own declines in value. The Fund will not make a short sale if, after giving effect to such sale, the market value of all securities sold short exceeds 10% of the value of its total assets. The Fund may also make short sales “against-the-box” without regard to this restriction. In this type of short sale, at the time of the sale, the Fund owns or has the immediate and unconditional right to acquire the identical security at no additional cost. |
■ | Small Cap and Emerging Growth Securities — The Fund may invest in equity securities of issuers with limited product lines or markets. |
■ | Standby Commitment Agreements — Standby commitment agreements commit the Fund, for a stated period of time, to purchase a stated amount of securities that may be issued and sold to the Fund at the option of the issuer. |
■ | Temporary Defensive Strategies — For temporary defensive purposes, the Fund may restrict the markets in which it invests and may invest without limitation in cash, cash equivalents, money market securities, such as U.S. Treasury and agency obligations, other U.S. Government securities, short-term debt obligations of corporate issuers, certificates of deposit, bankers acceptances, commercial paper (short-term, unsecured, negotiable promissory notes of a domestic or foreign issuer) or other high quality fixed-income securities. Normally a portion of the Fund’s assets would be held in these securities in anticipation of investment in equities or to meet redemptions. Investments in money market securities can be sold easily and have limited risk of loss. These investments may affect the Fund’s ability to achieve its investment objective. |
■ | When-Issued and Delayed Delivery Securities and Forward Commitments — The purchase or sale of securities on a when-issued basis, on a delayed delivery basis or through a forward commitment involves the purchase or sale of securities by the Fund at an established price with payment and delivery taking place in the future. The Fund enters into these transactions to obtain what is considered an advantageous price to the Fund at the time of entering into the transaction. |
■ | Commodities Related Investments Risks — Exposure to the commodities markets may subject the Fund to greater volatility than investments in traditional securities. The value of commodity-linked derivative investments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity, such as drought, floods, weather, embargoes, tariffs and international economic, political and regulatory developments. |
■ | Convertible Securities Risk — The market value of a convertible security performs like that of a regular debt security; that is, if market interest rates rise, the value of a convertible security usually falls. In addition, convertible securities are subject to the risk that the issuer will not be able to pay interest or dividends when due, and their market value may change based on changes in the issuer’s credit rating or the market’s perception of the issuer’s creditworthiness. Since it derives a portion of its value from the common stock into which it may be converted, a convertible security is also subject to the same types of market and issuer risks that apply to the underlying common stock. |
■ | Debt Securities Risk — Debt securities, such as bonds, involve interest rate risk, credit risk, extension risk, and prepayment risk, among other things. |
Interest Rate Risk — The market value of bonds and other fixed-income securities changes in response to interest rate changes and other factors. Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall and decrease as interest rates rise. The Fund may be subject to a greater risk of rising interest rates due to the current period of historically low rates. For example, if interest rates increase by 1%, assuming a current portfolio duration of ten years, and all other factors being equal, the value of the Fund’s |
portfolio would be expected to decrease by 10%. The magnitude of these fluctuations in the market price of bonds and other fixed-income securities is generally greater for those securities with longer maturities. Fluctuations in the market price of the Fund’s investments will not affect interest income derived from instruments already owned by the Fund, but will be reflected in the Fund’s net asset value. The Fund may lose money if short-term or long-term interest rates rise sharply in a manner not anticipated by Fund management. To the extent the Fund invests in debt securities that may be prepaid at the option of the obligor (such as mortgage-backed securities), the sensitivity of such securities to changes in interest rates may increase (to the detriment of the Fund) when interest rates rise. Moreover, because rates on certain floating rate debt securities typically reset only periodically, changes in prevailing interest rates (and particularly sudden and significant changes) can be expected to cause some fluctuations in the net asset value of the Fund to the extent that it invests in floating rate debt securities. These basic principles of bond prices also apply to U.S. Government securities. A security backed by the “full faith and credit” of the U.S. Government is guaranteed only as to its stated interest rate and face value at maturity, not its current market price. Just like other fixed-income securities, government-guaranteed securities will fluctuate in value when interest rates change. | |
Credit Risk — Credit risk refers to the possibility that the issuer of a debt security (i.e., the borrower) will not be able to make principal and interest payments when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer. The degree of credit risk depends on the issuer’s financial condition and on the terms of the securities. | |
Extension Risk — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these obligations to fall. Rising interest rates tend to extend the duration of securities, making them more sensitive to changes in interest rates. The value of longer-term securities generally changes more in response to changes in interest rates than shorter-term securities. As a result, in a period of rising interest rates, securities may exhibit additional volatility and may lose value. | |
Prepayment Risk — When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields. In periods of falling interest rates, the rate of prepayments tends to increase (as does price fluctuation) as borrowers are motivated to pay off debt and refinance at new lower rates. During such periods, reinvestment of the prepayment proceeds by the management team will generally be at lower rates of return than the return on the assets that were prepaid. Prepayment reduces the yield to maturity and the average life of the security. | |
■ | Derivatives Risk — Derivatives are volatile and involve significant risks, including: |
Volatility Risk — The Fund’s use of derivatives may reduce the Fund’s returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. A risk of the Fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. | |
Counterparty Risk — Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. | |
Market and Liquidity Risk — Some derivatives are more sensitive to interest rate changes and market price fluctuations than other securities. The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately. The Fund could also suffer losses related to its derivatives positions as a result of unanticipated market movements, which losses are potentially unlimited. Finally, BlackRock may not be able to predict correctly the direction of securities prices, interest rates and other economic factors, which could cause the Fund’s derivatives positions to lose value. | |
Valuation Risk — Valuation may be more difficult in times of market turmoil since many investors and market makers may be reluctant to purchase complex instruments or quote prices for them. Derivatives may also expose the Fund to greater risk and increase its costs. Certain transactions in derivatives involve substantial leverage risk and may expose the Fund to potential losses that exceed the amount originally invested by the Fund. | |
Hedging Risk — When a derivative is used as a hedge against a position that the Fund holds, any loss generated by the derivative generally should be substantially offset by gains on the hedged investment, and vice versa. While hedging can reduce or eliminate losses, it can also reduce or eliminate gains. Hedges are sometimes subject to imperfect matching between the derivative and the underlying security, and there can be no assurance that the Fund’s hedging transactions will be effective. The use of hedging may result in certain adverse tax consequences noted below. | |
Tax Risk —The federal income tax treatment of a derivative may not be as favorable as a direct investment in an underlying asset and may adversely affect the timing, character and amount of income the Fund realizes from its investments. As a result, a larger portion of the Fund’s distributions may be treated as ordinary income rather than |
capital gains. In addition, certain derivatives are subject to mark-to-market or straddle provisions of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). If such provisions are applicable, there could be an increase (or decrease) in the amount of taxable dividends paid by the Fund. In addition, the tax treatment of certain derivatives, such as swaps, is unsettled and may be subject to future legislation, regulation or administrative pronouncements issued by the IRS. | |
Regulatory Risk — Recent legislation calls for new regulation of the derivatives markets. The extent and impact of the regulation is not yet known and may not be known for some time. In particular, the Dodd-Frank Wall Street Reform Act (the “Reform Act”) may make derivatives more costly, may limit the availability of derivatives, or may otherwise adversely affect the value or performance of derivatives. The Reform Act substantially increases regulation of the over-the-counter derivatives market and participants in that market, including imposing clearing and reporting requirements on transactions involving instruments that fall within the Reform Act’s definition of “swap” and “security-based swap,” which terms generally include over-the-counter derivatives and imposing registration and potential substantive requirements on certain swap and security-based swap market participants. In addition, under the Reform Act, the Fund may be subject to additional recordkeeping and reporting requirements. | |
Risks Specific to Certain Derivatives Used by the Fund | |
Swaps — Swap agreements are two-party contracts entered into for periods ranging from a few weeks to more than one year. In a standard “swap” transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments, which can be adjusted for an interest factor. Swap agreements involve the risk that the party with whom the Fund has entered into the swap will default on its obligation to pay the Fund and the risk that the Fund will not be able to meet its obligations to pay the other party to the agreement. | |
Credit Default Swaps — Credit default swaps may have as reference obligations one or more securities that are not currently held by the Fund. The protection “buyer” may be obligated to pay the protection “seller” an up-front payment or a periodic stream of payments over the term of the contract, provided generally that no credit event on a reference obligation has occurred. Credit default swaps involve special risks in addition to those mentioned above because they are difficult to value, are highly susceptible to liquidity and credit risk, and generally pay a return to the party that has paid the premium only in the event of an actual default by the issuer of the underlying obligation (as opposed to a credit downgrade or other indication of financial difficulty). | |
Forward Foreign Currency Exchange Contracts — Forward foreign currency exchange transactions are over-the-counter (“OTC”) contracts to purchase or sell a specified amount of a specified currency or multinational currency unit at a price and future date set at the time of the contract. Forward foreign currency exchange contracts do not eliminate fluctuations in the value of non-U.S. securities but rather allow the Fund to establish a fixed rate of exchange for a future point in time. This strategy can have the effect of reducing returns and minimizing opportunities for gain. | |
Indexed and Inverse Securities — Indexed and inverse securities provide a potential return based on a particular index of value or interest rates. The Fund’s return on these securities will be subject to risk with respect to the value of the particular index. These securities are subject to leverage risk and correlation risk. Certain indexed and inverse securities have greater sensitivity to changes in interest rates or index levels than other securities, and the Fund’s investment in such instruments may decline significantly in value if interest rates or index levels move in a way Fund management does not anticipate. | |
Futures — Futures are standardized, exchange-traded contracts that obligate a purchaser to take delivery, and a seller to make delivery, of a specific amount of an asset at a specified future date at a specified price. The primary risks associated with the use of futures contracts and options are (a) the imperfect correlation between the change in market value of the instruments held by a Fund and the price of the futures contract or option; (b) possible lack of a liquid secondary market for a futures contract and the resulting inability to close a futures contract when desired; (c) losses caused by unanticipated market movements, which are potentially unlimited; (d) the investment advisor’s inability to predict correctly the direction of securities prices, interest rates, currency exchange rates and other economic factors; and (e) the possibility that the counterparty will default in the performance of its obligations. | |
Options — An option is an agreement that, for a premium payment or fee, gives the option holder (the purchaser) the right but not the obligation to buy (a “call option”) or sell (a “put option”) the underlying asset (or settle for cash an amount based on an underlying asset, rate, or index) at a specified price (the “exercise price”) during a period of time or on a specified date. Investments in options are considered speculative. When the Fund purchases an option, it may lose the premium paid for it if the price of the underlying security or other assets decreased or remained the same (in the case of a call option) or increased or remained the same (in the case of a put option). If a put or call option purchased by the Fund were permitted to expire without being sold or exercised, its premium would represent a loss to the Fund. To the extent that the Fund writes or sells an option, if the decline or increase in |
the underlying asset is significantly below or above the exercise price of the written option, the Fund could experience a substantial loss. | |
Commodity-Linked Derivatives — The value of a commodity-linked derivative investment typically is based upon the price movements of a commodity, a commodity futures contract or commodity index, or some other readily measurable economic variable. The value of commodity-linked derivative instruments may be affected by changes in overall market movements, volatility of the underlying benchmark, changes in interest rates, or factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments. The value of commodity-linked derivatives will rise or fall in response to changes in the underlying commodity or related index. Investments in commodity-linked derivatives may be subject to greater volatility than non-derivative based investments. A highly liquid secondary market may not exist for certain commodity-linked derivatives, and there can be no assurance that one will develop. | |
Commodity-linked derivatives also may be subject to credit and interest rate risks that in general affect the values of fixed income securities. Therefore, at maturity, the Fund may receive more or less principal than it originally invested. The Fund might receive interest payments that are more or less than the stated coupon interest payments. | |
In connection with the Fund’s direct and indirect investments in commodity-linked derivatives, the Fund will attempt to manage its counterparty exposure so as to limit its exposure to any one counterparty. However, due to the limited number of entities that may serve as counterparties (and which the Fund believes are creditworthy) at any one time the Fund may enter into swap agreements with a limited number of counterparties and may invest in commodity-linked notes issued by a limited number of issuers that will act as counterparties, which may increase the Fund’s exposure to counterparty credit risk. There can be no assurance that the Fund will be able to limit exposure to any one counterparty at all times. | |
Commodity-Linked Notes — Commodity-linked notes involve substantial risks, including the risk of loss of a significant portion of their principal value. In addition to commodity risk and general derivatives risk, they may be subject to additional special risks, such as risk of loss of interest and principal, lack of secondary market and risk of greater volatility, that do not affect traditional equity and debt securities. | |
■ | Dollar Rolls Risk — A dollar roll transaction involves a sale by the Fund of a mortgage-backed or other security concurrently with an agreement by the Fund to repurchase a similar security at a later date at an agreed-upon price. Dollar roll transactions involve the risk that the market value of the securities the Fund is required to purchase may decline below the agreed upon repurchase price of those securities. If the broker/dealer to whom the Fund sells securities becomes insolvent, the Fund’s right to purchase or repurchase securities may be restricted. Successful use of mortgage dollar rolls may depend upon the adviser’s ability to correctly predict interest rates and prepayments. There is no assurance that dollar rolls can be successfully employed. |
■ | Emerging Markets Risk — The risks of foreign investments are usually much greater for emerging markets. Investments in emerging markets may be considered speculative. Emerging markets include those in countries defined as emerging or developing by the World Bank, the International Finance Corporation or the United Nations. Emerging markets are riskier than more developed markets because they tend to develop unevenly and may never fully develop. They are more likely to experience hyperinflation and currency devaluations, which adversely affect returns to U.S. investors. In addition, many emerging markets have far lower trading volumes and less liquidity than developed markets. Since these markets are often small, they may be more likely to suffer sharp and frequent price changes or long-term price depression because of adverse publicity, investor perceptions or the actions of a few large investors. In addition, traditional measures of investment value used in the United States, such as price to earnings ratios, may not apply to certain small markets. Also, there may be less publicly available information about issuers in emerging markets than would be available about issuers in more developed capital markets, and such issuers may not be subject to accounting, auditing and financial reporting standards and requirements comparable to those to which U.S. companies are subject. |
Many emerging markets have histories of political instability and abrupt changes in policies. As a result, their governments are more likely to take actions that are hostile or detrimental to private enterprise or foreign investment than those of more developed countries, including expropriation of assets, confiscatory taxation, high rates of inflation or unfavorable diplomatic developments. In the past, governments of such nations have expropriated substantial amounts of private property, and most claims of the property owners have never been fully settled. There is no assurance that such expropriations will not reoccur. In such an event, it is possible that the Fund could lose the entire value of its investments in the affected market. Some countries have pervasiveness of corruption and crime that may hinder investments. Certain emerging markets may also face other significant internal or external risks, including the risk of war, and ethnic, religious and racial conflicts. In addition, governments in many emerging market countries participate to a significant degree in their economies and |
securities markets, which may impair investment and economic growth. National policies that may limit the Fund’s investment opportunities include restrictions on investment in issuers or industries deemed sensitive to national interests. | |
Emerging markets may also have differing legal systems and the existence or possible imposition of exchange controls, custodial restrictions or other foreign or U.S. governmental laws or restrictions applicable to such investments. Sometimes, they may lack or be in the relatively early development of legal structures governing private and foreign investments and private property. Many emerging markets do not have income tax treaties with the United States, and as a result, investments by the Fund may be subject to higher withholding taxes in such countries. In addition, some countries with emerging markets may impose differential capital gains taxes on foreign investors. | |
Practices in relation to settlement of securities transactions in emerging markets involve higher risks than those in developed markets, in part because the Fund will need to use brokers and counterparties that are less well capitalized, and custody and registration of assets in some countries may be unreliable. The possibility of fraud, negligence, undue influence being exerted by the issuer or refusal to recognize that ownership exists in some emerging markets, and, along with other factors, could result in ownership registration being completely lost. The Fund would absorb any loss resulting from such registration problems and may have no successful claim for compensation. In addition, communications between the United States and emerging market countries may be unreliable, increasing the risk of delayed settlements or losses of security certificates. | |
■ | Equity Securities Risk — Common and preferred stocks represent equity ownership in a company. Stock markets are volatile. The price of equity securities will fluctuate and can decline and reduce the value of a portfolio investing in equities. The value of equity securities purchased by the Fund could decline if the financial condition of the companies the Fund invests in declines or if overall market and economic conditions deteriorate. The value of equity securities may also decline due to factors that affect a particular industry or industries, such as labor shortages or an increase in production costs and competitive conditions within an industry. In addition, the value may decline due to general market conditions that are not specifically related to a company or industry, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or generally adverse investor sentiment. |
■ | Foreign Securities Risk — Securities traded in foreign markets have often (though not always) performed differently from securities traded in the United States. However, such investments often involve special risks not present in U.S. investments that can increase the chances that the Fund will lose money. In particular, the Fund is subject to the risk that because there may be fewer investors on foreign exchanges and a smaller number of securities traded each day, it may be more difficult for the Fund to buy and sell securities on those exchanges. In addition, prices of foreign securities may go up and down more than prices of securities traded in the United States. |
■ | High Portfolio Turnover Risk — The Fund may engage in active and frequent trading of its portfolio securities. High portfolio turnover (more than 100%) may result in increased transaction costs to the Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of Fund portfolio securities may result in the realization and/or distribution to shareholders of higher capital gains or losses as compared to a fund with less active trading policies. These effects of higher than normal portfolio turnover may adversely affect Fund performance. In addition, investment in mortgage dollar rolls and participation in TBA transactions may significantly increase the Fund’s portfolio turnover rate. A TBA transaction is a method of trading mortgage-backed securities where the buyer and seller agree upon general trade parameters such as agency, settlement date, par amount, and price. |
■ | Investment Style Risk — Under certain market conditions, growth investments have performed better during the later stages of economic expansion and value investments have performed better during periods of economic recovery. Therefore, these investment styles may over time go in and out of favor. At times when the investment style used by the Fund is out of favor, the Fund may underperform other equity funds that use different investment styles. |
■ | Junk Bonds Risk — Although junk bonds generally pay higher rates of interest than investment grade bonds, junk bonds are high risk investments that may cause income and principal losses for the Fund. The major risks of junk bond investments include: |
■ | Junk bonds may be issued by less creditworthy issuers. Issuers of junk bonds may have a larger amount of outstanding debt relative to their assets than issuers of investment grade bonds. In the event of an issuer’s bankruptcy, claims of other creditors may have priority over the claims of junk bond holders, leaving few or no assets available to repay junk bond holders. |
■ | Prices of junk bonds are subject to extreme price fluctuations. Adverse changes in an issuer’s industry and general economic conditions may have a greater impact on the prices of junk bonds than on other higher rated fixed-income securities. |
■ | Issuers of junk bonds may be unable to meet their interest or principal payment obligations because of an economic downturn, specific issuer developments, or the unavailability of additional financing. |
■ | Junk bonds frequently have redemption features that permit an issuer to repurchase the security from the Fund before it matures. If the issuer redeems junk bonds, the Fund may have to invest the proceeds in bonds with lower yields and may lose income. |
■ | Junk bonds may be less liquid than higher rated fixed-income securities, even under normal economic conditions. There are fewer dealers in the junk bond market, and there may be significant differences in the prices quoted for junk bonds by the dealers. Because they are less liquid, judgment may play a greater role in valuing certain of the Fund’s securities than is the case with securities trading in a more liquid market. |
■ | The Fund may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting issuer. |
■ | Market Risk and Selection Risk — Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money. |
■ | Mid Cap Securities Risk — The securities of mid cap companies generally trade in lower volumes and are generally subject to greater and less predictable price changes than the securities of larger capitalization companies. |
■ | Money Market Securities Risk — If market conditions improve while the Fund has temporarily invested some or all of its assets in high quality money market securities, this strategy could result in reducing the potential gain from the market upswing, thus reducing the Fund’s opportunity to achieve its investment objective. |
■ | Mortgage- and Asset-Backed Securities Risks — Mortgage-backed securities (residential and commercial) and asset-backed securities represent interests in “pools” of mortgages or other assets, including consumer loans or receivables held in trust. Although asset-backed and commercial mortgage-backed securities (“CMBS”) generally experience less prepayment than residential mortgage-backed securities, mortgage-backed and asset-backed securities, like traditional fixed-income securities, are subject to credit, interest rate, prepayment and extension risks. |
Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities. The Fund’s investments in asset-backed securities are subject to risks similar to those associated with mortgage-related securities, as well as additional risks associated with the nature of the assets and the servicing of those assets. These securities also are subject to the risk of default on the underlying mortgage or assets, particularly during periods of economic downturn. Certain CMBS are issued in several classes with different levels of yield and credit protection. The Fund’s investments in CMBS with several classes may be in the lower classes that have greater risks than the higher classes, including greater interest rate, credit and prepayment risks. | |
Mortgage-backed securities may be either pass-through securities or collateralized mortgage obligations (“CMOs”). Pass-through securities represent a right to receive principal and interest payments collected on a pool of mortgages, which are passed through to security holders. CMOs are created by dividing the principal and interest payments collected on a pool of mortgages into several revenue streams (tranches) with different priority rights to portions of the underlying mortgage payments. Certain CMO tranches may represent a right to receive interest only (“IOs”), principal only (“POs”) or an amount that remains after floating-rate tranches are paid (an inverse floater). These securities are frequently referred to as “mortgage derivatives” and may be extremely sensitive to changes in interest rates. Interest rates on inverse floaters, for example, vary inversely with a short-term floating rate (which may be reset periodically). Interest rates on inverse floaters will decrease when short-term rates increase, and will increase when short-term rates decrease. These securities have the effect of providing a degree of investment leverage. In response to changes in market interest rates or other market conditions, the value of an inverse floater may increase or decrease at a multiple of the increase or decrease in the value of the underlying securities. If the Fund invests in CMO tranches (including CMO tranches issued by government agencies) and interest rates move in a manner not anticipated by Fund management, it is possible that the Fund could lose all or substantially all of its investment. Certain mortgage-backed securities in which the Fund may invest may also provide a degree of investment leverage, which could cause the Fund to lose all or substantially all of its investment. | |
The mortgage market in the United States has experienced difficulties that may adversely affect the performance and market value of certain of the Fund’s mortgage-related investments. Delinquencies and losses on mortgage loans (including subprime and second-lien mortgage loans) generally have increased and may continue to increase, |
and a decline in or flattening of real-estate values (as has been experienced and may continue to be experienced in many housing markets) may exacerbate such delinquencies and losses. Also, a number of mortgage loan originators have experienced serious financial difficulties or bankruptcy. Reduced investor demand for mortgage loans and mortgage-related securities and increased investor yield requirements have caused limited liquidity in the secondary market for mortgage-related securities, which can adversely affect the market value of mortgage-related securities. It is possible that such limited liquidity in such secondary markets could continue or worsen. | |
Asset-backed securities entail certain risks not presented by mortgage-backed securities, including the risk that in certain states it may be difficult to perfect the liens securing the collateral backing certain asset-backed securities. In addition, certain asset-backed securities are based on loans that are unsecured, which means that there is no collateral to seize if the underlying borrower defaults. | |
■ | Preferred Securities Risk — Preferred securities may pay fixed or adjustable rates of return. Preferred securities are subject to issuer-specific and market risks applicable generally to equity securities. In addition, a company’s preferred securities generally pay dividends only after the company makes required payments to holders of its bonds and other debt. For this reason, the value of preferred securities will usually react more strongly than bonds and other debt to actual or perceived changes in the company’s financial condition or prospects. Preferred securities of smaller companies may be more vulnerable to adverse developments than preferred stock of larger companies. |
■ | Sovereign Debt Risk — Sovereign debt instruments are subject to the risk that a governmental entity may delay or refuse to pay interest or repay principal on its sovereign debt, due, for example, to cash flow problems, insufficient foreign currency reserves, political considerations, the relative size of the governmental entity’s debt position in relation to the economy or the failure to put in place economic reforms required by the International Monetary Fund or other multilateral agencies. If a governmental entity defaults, it may ask for more time in which to pay or for further loans. There is no legal process for collecting sovereign debt that a government does not pay nor are there bankruptcy proceedings through which all or part of the sovereign debt that a governmental entity has not repaid may be collected. |
■ | Structured Notes Risk — Structured notes and other related instruments purchased by the Fund are generally privately negotiated debt obligations where the principal and/or interest is determined by reference to the performance of a specific asset, benchmark asset, market or interest rate (“reference measure”). The interest rate or the principal amount payable upon maturity or redemption may increase or decrease, depending upon changes in the value of the reference measure. The terms of a structured note may provide that, in certain circumstances, no principal is due at maturity and, therefore, may result in a loss of invested capital by the Fund. The interest and/or principal payments that may be made on a structured product may vary widely, depending on a variety of factors, including the volatility of the reference measure. |
Structured notes may be positively or negatively indexed, so the appreciation of the reference measure may produce an increase or a decrease in the interest rate or the value of the principal at maturity. The rate of return on structured notes may be determined by applying a multiplier to the performance or differential performance of reference measures. Application of a multiplier involves leverage that will serve to magnify the potential for gain and the risk of loss. | |
The purchase of structured notes exposes the Fund to the credit risk of the issuer of the structured product. Structured notes may also be more volatile, less liquid, and more difficult to price accurately than less complex securities and instruments or more traditional debt securities. | |
■ | Subsidiary Risk — By indirectly investing in the Subsidiary through its investment in the Total Return Portfolio the Fund is indirectly exposed to the risks associated with the Subsidiary’s investments. The commodity-related instruments held by the Subsidiary are generally similar to those that are permitted to be held by the Fund or the Total Return Portfolio and are subject to the same risks that apply to similar investments if held directly by the Fund or the Total Return Portfolio (see “Commodities Related Investment Risks” above). These risks are described elsewhere in this prospectus. There can be no assurance that the investment objective of the Subsidiary will be achieved. The Subsidiary is not registered under the Investment Company Act, and, unless otherwise noted in this prospectus, is not subject to all the investor protections of the Investment Company Act. However, the Total Return Portfolio wholly owns and controls the Subsidiary, and the Total Return Portfolio and the Subsidiary are both managed by BlackRock, making it unlikely that the Subsidiary will take action contrary to the interests of the Fund and its shareholders. The Board has oversight responsibility for the investment activities of the Fund and the Total Return Portfolio, including the Total Return Portfolio’s investment in the Subsidiary, and the Total Return Portfolio’s role as sole shareholder of the Subsidiary. The Subsidiary will be subject to the same investment restrictions and limitations, and follow the same compliance policies and procedures, as the Fund and the Master Bond LLC. Changes in the laws of the United States and/or the Cayman Islands could result in the inability of the Fund, the Total Return Portfolio and/or the Subsidiary to operate as described in this prospectus and the SAI and could |
adversely affect the Fund. For example, the Cayman Islands does not currently impose any income, corporate or capital gains tax, estate duty, inheritance tax, gift tax or withholding tax on the Subsidiary. If Cayman Islands law changes such that the Subsidiary must pay Cayman Islands taxes, Fund shareholders would likely suffer decreased investment returns. | |
In late July 2011, the Internal Revenue Service suspended the granting of private letter rulings that concluded that the income and gain generated by a registered investment company’s investments in commodity-linked notes, and the income generated from investments in controlled foreign subsidiaries that invest in physical commodities and/or commodity-linked derivative instruments, would be “qualifying income” for regulated investment company qualification purposes. As a result, there can be no assurances that the Internal Revenue Service will treat such income and gain as “qualifying income.” If the Internal Revenue Service makes an adverse determination relating to the treatment of such income and gain, the Fund will likely need to change its investment strategies, which could adversely affect the Fund. | |
■ | U.S. Government Issuer Risk — Treasury obligations may differ in their interest rates, maturities, times of issuance and other characteristics. Obligations of U.S. Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the U.S. Government. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so. |
■ | U.S. Government Mortgage-Related Securities Risk — There are a number of important differences among the agencies and instrumentalities of the U.S. Government that issue mortgage-related securities and among the securities that they issue. Mortgage-related securities guaranteed by the Government National Mortgage Association (“GNMA” or “Ginnie Mae”) are guaranteed as to the timely payment of principal and interest by GNMA and such guarantee is backed by the full faith and credit of the United States. GNMA securities also are supported by the right of GNMA to borrow funds from the U.S. Treasury to make payments under its guarantee. Mortgage-related securities issued by Fannie Mae or Freddie Mac are solely the obligations of Freddie Mac or Fannie Mae, as the case may be, and are not backed by or entitled to the full faith and credit of the United States but are supported by the right of the issuer to borrow from the U.S. Treasury. |
■ | Borrowing Risk — Borrowing may exaggerate changes in the net asset value of Fund shares and in the return on the Fund’s portfolio. Borrowing will cost the Fund interest expense and other fees. The costs of borrowing may reduce the Fund’s return. Borrowing may cause the Fund to liquidate positions when it may not be advantageous to do so to satisfy its obligations. |
■ | Collateralized Debt Obligations Risk — In addition to the typical risks associated with fixed income securities and asset-backed securities, CDOs carry additional risks including, but not limited to: (i) the possibility that distributions from collateral securities will not be adequate to make interest or other payments; (ii) the risk that the collateral may default or decline in value or be downgraded, if rated by a nationally recognized statistical rating organization; (iii) the Fund may invest in tranches of CDOs that are subordinate to other tranches; (iv) the structure and complexity of the transaction and the legal documents could lead to disputes among investors regarding the characterization of proceeds; (v) the investment return achieved by the Fund could be significantly different than those predicted by financial models; (vi) the lack of a readily available secondary market for CDOs; (vii) risk of forced “fire sale” liquidation due to technical defaults such as coverage test failures; and (viii) the CDO’s manager may perform poorly. In addition, investments in CDOs may be characterized by the Fund as illiquid securities. |
■ | Depositary Receipts Risk — The issuers of unsponsored depositary receipts are not obligated to disclose information that is, in the United States, considered material. Therefore, there may be less information available regarding these issuers and there may not be a correlation between such information and the market value of the depositary receipts. Depositary receipts are generally subject to the same risks as the foreign securities that they evidence or into which they may be converted. |
■ | Expense Risk — Fund expenses are subject to a variety of factors, including fluctuations in the Fund’s net assets. Accordingly, actual expenses may be greater or less than those indicated. For example, to the extent that the Fund’s net assets decrease due to market declines or redemptions, the Fund’s expenses will increase as a percentage of Fund net assets. During periods of high market volatility, these increases in the Fund’s expense ratio could be significant. |
■ | Indexed and Inverse Securities Risk — Certain indexed and inverse securities have greater sensitivity to changes in interest rates or index levels than other securities, and the Fund’s investment in such instruments may decline significantly in value if interest rates or index levels move in a way Fund management does not anticipate. |
■ | Investment in Other Investment Companies Risk — As with other investments, investments in other investment companies are subject to market and selection risk. In addition, if the Fund acquires shares of investment companies, including ones affiliated with the Fund, shareholders bear both their proportionate share of expenses in the Fund (including management and advisory fees) and, indirectly, the expenses of the investment companies. To the extent the Fund is held by an affiliated fund, the ability of the Fund itself to hold other investment companies may be limited. |
■ | Leverage Risk — Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund Fund to greater risk and increase its costs. As an open-end investment company registered with the the Securities and Exchange Commission (the “SEC”), the Fund is subject to the federal securities laws, including the Investment Company Act, the rules thereunder, and various SEC and SEC staff interpretive positions. In accordance with these laws, rules and positions, the Fund must “set aside” liquid assets (often referred to as “asset segregation”), or engage in other SEC- or staff-approved measures, to “cover” open positions with respect to certain kinds of instruments. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage. |
■ | Liquidity Risk — Liquidity risk exists when particular investments are difficult to purchase or sell. The Fund’s investments in illiquid securities may reduce the returns of the Fund because it may be difficult to sell the illiquid securities at an advantageous time or price. To the extent that the Fund’s principal investment strategies involve derivatives or securities with substantial market and/or credit risk, the Fund will tend to have the greatest exposure to liquidity risk. Liquid investments may become illiquid after purchase by the Fund, particularly during periods of market turmoil. Illiquid investments may be harder to value, especially in changing markets, and if the Fund is forced to sell these investments to meet redemption requests or for other cash needs, the Fund may suffer a loss. In addition, when there is illiquidity in the market for certain securities, the Fund, due to limitations on illiquid investments, may be subject to purchase and sale restrictions. |
■ | Master Limited Partnerships Risk — The common units of an MLP are listed and traded on U.S. securities exchanges and their value fluctuates predominantly based on prevailing market conditions and the success of the MLP. Unlike owners of common stock of a corporation, owners of common units have limited voting rights and have no ability annually to elect directors. In the event of liquidation, common units have preference over subordinated units, but not over debt or preferred units, to the remaining assets of the MLP. |
■ | Real Estate Related Securities Risk — The main risk of real estate related securities is that the value of the underlying real estate may go down. Many factors may affect real estate values. These factors include both the general and local economies, the amount of new construction in a particular area, the laws and regulations (including zoning and tax laws) affecting real estate and the costs of owning, maintaining and improving real estate. The availability of mortgages and changes in interest rates may also affect real estate values. If the Master Portfolio’s real estate related investments are concentrated in one geographic area or in one property type, the Master Portfolio will be particularly subject to the risks associated with that area or property type. |
■ | REIT Investment Risk — In addition to the risks facing real estate related securities, such as a decline in property values due to increasing vacancies, a decline in rents resulting from unanticipated economic, legal or technological developments or a decline in the price of securities of real estate companies due to a failure of borrowers to pay their loans or poor management, investments in REITs involve unique risks. REITs may have limited financial resources, may trade less frequently and in limited volume and may be more volatile than other securities. |
■ | Repurchase Agreements and Purchase and Sale Contracts Risks — If the other party to a repurchase agreement or purchase and sale contract defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security in either situation and the market value of the security declines, the Fund may lose money. |
■ | Reverse Repurchase Agreements Risk — Reverse repurchase agreements involve the sale of securities held by the Fund with an agreement to repurchase the securities at an agreed-upon price, date and interest payment. Reverse repurchase agreements involve the risk that the other party may fail to return the securities in a timely manner or at all. The Fund could lose money if it is unable to recover the securities and the value of the collateral held by the Fund, including the value of the investments made with cash collateral, is less than the value of securities. These events could also trigger adverse tax consequences to the Fund. |
■ | Securities Lending Risk — Securities lending involves the risk that the borrower may fail to return the securities in a timely manner or at all. As a result, the Fund may lose money and there may be a delay in recovering the loaned securities. The Fund could also lose money if it does not recover the securities and/or the value of the collateral falls, including the value of investments made with cash collateral. These events could trigger adverse tax consequences for the Fund. |
■ | Short Sales Risk — Because making short sales in securities that it does not own exposes the Fund to the risks associated with those securities, such short sales involve speculative exposure risk. The Fund will incur a loss as a result of a short sale if the price of the security increases between the date of the short sale and the date on which the Fund replaces the security sold short. The Fund will realize a gain if the security declines in price between those dates. As a result, if the Fund makes short sales in securities that increase in value, it will likely underperform similar funds that do not make short sales in securities they do not own. There can be no assurance that the Fund will be able to close out a short sale position at any particular time or at an acceptable price. Although the Fund’s gain is limited to the amount at which it sold a security short, its potential loss is limited only by the maximum attainable price of the security, less the price at which the security was sold. The Fund may also pay transaction costs and borrowing fees in connection with short sales. |
■ | Small Cap and Emerging Growth Securities Risk — Small cap or emerging growth companies may have limited product lines or markets. They may be less financially secure than larger, more established companies. They may depend on a small number of key personnel. If a product fails or there are other adverse developments, or if management changes, the Fund’s investment in a small cap or emerging growth company may lose substantial value. In addition, it is more difficult to get information on smaller companies, which tend to be less well known, have shorter operating histories, do not have significant ownership by large investors and are followed by relatively few securities analysts. |
The securities of small cap or emerging growth companies generally trade in lower volumes and are subject to greater and more unpredictable price changes than larger cap securities or the market as a whole. In addition, small cap and emerging growth securities may be particularly sensitive to changes in interest rates, borrowing costs and earnings. Investing in small cap or emerging growth securities requires a longer term view. | |
■ | Standby Commitment Agreements Risk — Standby commitment agreements involve the risk that the security the Fund buys will lose value prior to its delivery to the Fund and will no longer be worth what the Fund has agreed to pay for it. These agreements also involve the risk that if the security goes up in value, the counterparty will decide not to issue the security. In this case, the Fund loses both the investment opportunity for the assets it set aside to pay for the security and any gain in the security’s price. |
■ | When-Issued and Delayed Delivery Securities and Forward Commitments Risk — When-issued and delayed delivery securities and forward commitments involve the risk that the security the Fund buys will lose value prior to its delivery. There also is the risk that the security will not be issued or that the other party to the transaction will not meet its obligation. If this occurs, the Fund may lose both the investment opportunity for the assets it set aside to pay for the security and any gain in the security’s price. |
Investor A | Investor B | Investor C 2,3 | Institutional | Class R | |
Availability | Generally available through Financial Intermediaries. | Available only through exchanges and dividend reinvestments by current holders and for purchase by certain employer-sponsored retirement plans. | Generally available through Financial Intermediaries. |
Limited
to certain investors, including:
• Current Institutional shareholders that meet certain requirements. • Certain employer-sponsored retirement plans. • Participants in certain programs sponsored by BlackRock or its affiliates or other Financial Intermediaries. • Certain employees of BlackRock or its affiliates. |
Available only to certain employer-sponsored retirement plans. |
Investor A | Investor B | Investor C 2,3 | Institutional | Class R | |
Minimum Investment |
$1,000
for all accounts except:
• $250 for certain fee-based programs. • $100 for certain employer-sponsored retirement plans. • $50, if establishing an Automatic Investment Plan (“AIP”). |
Investor B Shares are not generally available for purchase (see above). |
$1,000
for all accounts except:
• $250 for certain fee-based programs. • $100 for certain employer-sponsored retirement plans. • $50, if establishing an AIP. |
•
$2 million for institutions and individuals.
• Institutional Shares are available to clients of registered investment advisers who have $250,000 invested in the Fund. |
• $100 for all accounts. |
Initial Sales Charge? | Yes. Payable at time of purchase. Lower sales charges are available for larger investments. | No. Entire purchase price is invested in shares of the Fund. | No. Entire purchase price is invested in shares of the Fund. | No. Entire purchase price is invested in shares of the Fund. | No. Entire purchase price is invested in shares of the Fund. |
Deferred Sales Charge? | No. (May be charged for purchases of $1 million or more that are redeemed within 18 months.) | Yes. Payable if you redeem within six years of purchase. | Yes. Payable if you redeem within one year of purchase. | No. | No. |
Distribution and Service (12b-1) Fees? |
No
Distribution Fee.
0.25% Annual Service Fee. |
0.75%
Annual Distribution Fee.
0.25% Annual Service Fee. |
0.75%
Annual Distribution Fee.
0.25% Annual Service Fee. |
No. |
0.25%
Annual Distribution Fee.
0.25% Annual Service Fee. |
Redemption Fees? | No. | No. | No. | No. | No. |
Conversion to Investor A Shares? | N/A | Yes, automatically after approximately eight years. | No. | No. | No. |
Advantage | Makes sense for investors who are eligible to have the sales charge reduced or eliminated or who have a long-term investment horizon because there are no ongoing distribution fees. | No up-front sales charge so you start off owning more shares. | No up-front sales charge so you start off owning more shares. These shares may make sense for investors who have a shorter investment horizon relative to Investor A Shares. | No up-front sales charge so you start off owning more shares. No distribution or service fees. | No up-front sales charge so you start off owning more shares. |
Investor A | Investor B | Investor C 2,3 | Institutional | Class R | |
Disadvantage | You pay a sales charge up-front, and therefore you start off owning fewer shares. | You pay ongoing distribution fees each year you own Investor B Shares, which means that you can expect lower total performance than Investor A Shares. | You pay ongoing distribution fees each year you own Investor C Shares, which means that over the long term you can expect higher total fees per share than Investor A Shares and, as a result, lower total performance. | Limited availability. | You pay ongoing distribution fees each year you own Class R Shares, which means that over the long term you can expect higher total fees per share than Investor A Shares and, as a result, lower total performance. Class R Shares do not convert to Investor A Shares, so you will continue paying the ongoing distribution fees as long as you hold Class R Shares. Over the long term, this can add up to higher total fees than Investor A Shares. There is limited availability of these shares. |
1 | Please see “Details About the Share Classes” for more information about each share class. |
2 | If you establish a new account directly with the Fund and do not have a Financial Intermediary associated with your account, you may only invest in Investor A Shares. Applications without a Financial Intermediary that select Investor C Shares will not be accepted. |
3 | The Fund will not accept a purchase order of $500,000 or more for Investor C Shares. Your Financial Intermediary may set a lower maximum for Investor C Shares. |
Your Investment |
Sales
Charge
as a % of Offering Price |
Sales
Charge
as a % of Your Investment 1 |
Dealer
Compensation as a % of Offering Price |
Less than $25,000 | 5.25% | 5.54% | 5.00% |
$25,000 but less than $50,000 | 4.75% | 4.99% | 4.50% |
Your Investment |
Sales
Charge
as a % of Offering Price |
Sales
Charge
as a % of Your Investment 1 |
Dealer
Compensation as a % of Offering Price |
$50,000 but less than $100,000 | 4.00% | 4.17% | 3.75% |
$100,000 but less than $250,000 | 3.00% | 3.09% | 2.75% |
$250,000 but less than $500,000 | 2.50% | 2.56% | 2.25% |
$500,000 but less than $750,000 | 2.00% | 2.04% | 1.75% |
$750,000 but less than $1,000,000 | 1.50% | 1.52% | 1.25% |
$1,000,000 and over 2 | 0.00% | 0.00% | — 2 |
1 | Rounded to the nearest one-hundredth percent. |
2 | If you invest $1,000,000 or more in Investor A Shares, you will not pay an initial sales charge. In that case, BlackRock compensates the Financial Intermediary from its own resources. However, if you redeem your shares within 18 months after purchase, you may be charged a deferred sales charge of 0.75% of the lesser of the original cost of the shares being redeemed or your redemption proceeds. Such deferred sales charge may be waived in connection with certain fee-based programs. |
■ | Certain employer-sponsored retirement plans. For purposes of this sales charge waiver, employer-sponsored retirement plans do not include SEP IRAs, SIMPLE IRAs or SARSEPs; |
■ | Rollovers of current investments through certain employer-sponsored retirement plans, provided the shares are transferred to the same BlackRock Fund as either a direct rollover, or subsequent to distribution, the rolled-over proceeds are contributed to a BlackRock IRA through an account directly with the Fund; or purchases by IRA programs that are sponsored by Financial Intermediary firms provided the Financial Intermediary firm has entered into a Class A Net Asset Value agreement with respect to such program with the Distributor; |
■ | Insurance company separate accounts; |
■ | Registered investment advisers, trust companies and bank trust departments exercising discretionary investment authority with respect to amounts to be invested in the Fund; |
■ | Persons participating in a fee-based program (such as a wrap account) under which they pay advisory fees to a broker-dealer or other financial institution; |
■ | Financial Intermediaries who have entered into an agreement with the Distributor and have been approved by the Distributor to offer Fund shares to self-directed investment brokerage accounts that may or may not charge a transaction fee; |
■ | Persons associated with the Fund, the Fund’s manager, the Fund’s sub-advisers, transfer agent, Distributor, fund accounting agents, Barclays PLC (“Barclays”) and their respective affiliates (to the extent permitted by these firms) including: (a) officers, directors and partners; (b) employees and retirees; (c) employees of firms who have entered into selling agreements to distribute shares of BlackRock Funds; (d) immediate family members of such persons; and (e) any trust, pension, profit-sharing or other benefit plan for any of the persons set forth in (a) through (d); and |
■ | State sponsored 529 college savings plans. |
Years Since Purchase | Sales Charge 1 |
0 – 1 | 4.50% |
1 – 2 | 4.00% |
2 – 3 | 3.50% |
3 – 4 | 3.00% |
4 – 5 | 2.00% |
5 – 6 | 1.00% |
6 and thereafter | 0.00% |
1 | The percentage charge will apply to the lesser of the original cost of the shares being redeemed or the proceeds of your redemption. Not all BlackRock Funds have identical deferred sales charge schedules. If you exchange your shares for shares of another BlackRock Fund, the original deferred sales charge schedule will apply. |
■ | Redemptions of shares purchased through certain employer-sponsored retirement plans and rollovers of current investments in the Fund through such plans; |
■ | Exchanges pursuant to the exchange privilege, as described in “How to Buy, Sell, Exchange and Transfer Shares — How to Exchange Shares or Transfer your Account”; |
■ | Redemptions made in connection with minimum required distributions from IRA or 403(b)(7) accounts due to the shareholder reaching the age of 70½; |
■ | Certain post-retirement withdrawals from an IRA or other retirement plan if you are over 59½ years old and you purchased your shares prior to October 2, 2006; |
■ | Redemptions made with respect to certain retirement plans sponsored by the Fund, BlackRock or an affiliate; |
■ | Redemptions resulting from shareholder death as long as the waiver request is made within one year of death or, if later, reasonably promptly following completion of probate (including in connection with the distribution of account assets to a beneficiary of the decedent); |
■ | Withdrawals resulting from shareholder disability (as defined in the Internal Revenue Code) as long as the disability arose subsequent to the purchase of the shares; |
■ | Involuntary redemptions made of shares in accounts with low balances; |
■ | Certain redemptions made through the Systematic Withdrawal Plan offered by the Fund, BlackRock or an affiliate; |
■ | Redemptions related to the payment of BNY Mellon Investment Servicing Trust Company custodial IRA fees; and |
■ | Redemptions when a shareholder can demonstrate hardship, in the absolute discretion of the Fund. |
■ | Investors who currently own Institutional Shares of the Fund may make additional purchases of Institutional Shares of the Fund directly from the Fund; |
■ | Institutional and individual retail investors with a minimum investment of $2 million who purchase directly from the Fund; |
■ | Certain employer-sponsored retirement plans. For this purpose, employer-sponsored retirement plans do not include SEP IRAs, SIMPLE IRAs or SARSEPs; |
■ | Investors in selected fee-based programs; |
■ | Clients of registered investment advisers who have $250,000 invested in the Fund; |
■ | Trust department clients of PNC Bank and Bank of America, N.A. and their affiliates for whom they (i) act in a fiduciary capacity (excluding participant directed employee benefit plans); (ii) otherwise have investment discretion; or (iii) act as custodian for at least $2 million in assets; |
■ | Unaffiliated banks, thrifts or trust companies that have agreements with the Distributor; |
■ | Holders of certain Bank of America Corporation (“BofA Corp.”) sponsored unit investment trusts (“UITs”) who reinvest dividends received from such UITs in shares of the Fund; and |
■ | Employees, officers and directors/trustees of BlackRock, Inc., BlackRock Funds, BofA Corp., PNC, Barclays or their respective affiliates. |
■ | Responding to customer questions on the services performed by the Financial Intermediary and investments in Investor A, Investor B, Investor C and Class R Shares; |
■ | Assisting customers in choosing and changing dividend options, account designations and addresses; and |
■ | Providing other similar shareholder liaison services. |
Your Choices | Important Information for You to Know | |
Initial Purchase (continued) | Next, determine the amount of your investment (continued) | information on a lower initial investment requirement for certain Fund investors if their purchase, combined with purchases by other investors received together by the Fund, meets the minimum investment requirement. |
Have your financial professional, Financial Intermediary or the Fund Financial Intermediary submit your purchase order |
The
price of your shares is based on the next calculation of the Fund’s net asset value after your order is placed. Any purchase orders placed prior to the close of business on the NYSE (generally 4:00 p.m. (Eastern time)) will be priced at the
net asset value determined that day. Certain Financial Intermediaries, however, may require submission of orders prior to that time. Purchase orders placed after that time will be priced at the net asset value determined on the next business
day.
A broker-dealer or financial institution maintaining the account in which you hold shares may charge a separate account, service or transaction fee on the purchase or sale of Fund shares that would be in addition to the fees and expenses shown in the Fund’s “Fees and Expenses” table. The Fund may reject any order to buy shares and may suspend the sale of shares at any time. Other Financial Intermediaries may charge a processing fee to confirm a purchase. |
|
Or contact BlackRock (for accounts held directly with BlackRock) | To purchase shares directly from BlackRock, call (800) 441-7762 and request a new account application. Mail the completed application along with a check payable to “BlackRock Funds” to the Transfer Agent at the address on the application. | |
Add to Your Investment | Purchase additional shares | For Investor A and Investor C Shares, the minimum investment for additional purchases is generally $50 for all accounts (with the exception of certain employer-sponsored retirement plans which may have a lower minimum for additional purchases). (The minimums for additional purchases may be waived under certain circumstances.) Institutional and Class R Shares have no minimum for additional purchases. |
Have your Financial Intermediary submit your purchase order for additional shares |
To
purchase additional shares you may contact your Financial Intermediary.
For more details on purchasing by Internet see below. |
|
Or contact BlackRock (for accounts held directly with BlackRock) |
Purchase
by Telephone:
Call (800) 441-7762 and speak with one of our representatives. The Fund has the right to reject any telephone request for any reason.
Purchase in Writing: You may send a written request to BlackRock at the address on the back cover of this prospectus. Purchase by VRU: Investor Shares may also be purchased by use of the Fund’s automated voice response unit service (“VRU”) at (800) 441-7762. Purchase by Internet: You may purchase your shares, and view activity in your account, by logging onto the BlackRock website at www.blackrock.com/funds. Purchases made on the Internet using the Automated Clearing House (“ACH”) will have a trade date that is the day after the purchase is made. Certain institutional clients’ purchase orders of Institutional Shares placed by wire prior to the close of business on the NYSE will be priced at the net asset value determined that day. Contact your Financial Intermediary or BlackRock for further information. The Fund limits Internet purchases in Investor Shares of the Fund to $25,000 per trade. Different maximums may apply to certain institutional investors. Please read the On-Line Services Disclosure Statement and User Agreement, the Terms and Conditions page and the Consent to Electronic Delivery Agreement (if you consent to electronic delivery), before attempting to transact online. The Fund employs reasonable procedures to confirm that transactions entered over the Internet are genuine. By entering into the User |
Your Choices | Important Information for You to Know | |
Add to Your Investment (continued) | Or contact BlackRock (for accounts held directly with BlackRock) (continued) | Agreement with the Fund in order to open an account through the website, the shareholder waives any right to reclaim any losses from the Fund or any of its affiliates incurred through fraudulent activity. |
Acquire additional shares by reinvesting dividends and capital gains | All dividends and capital gains distributions are automatically reinvested without a sales charge. To make any changes to your dividend and/or capital gains distributions options, please call (800) 441-7762 or contact your Financial Intermediary (if your account is not held directly with BlackRock). | |
Participate in the Automatic Investment Plan (“AIP”) | BlackRock’s AIP allows you to invest a specific amount on a periodic basis from your checking or savings account into your investment account. Refer to the “Account Services and Privileges” section of this prospectus for additional information. | |
How to Pay for Shares | Making payment for purchases |
Payment
for an order must be made in Federal funds or other immediately available funds by the time specified by your Financial Intermediary, but in no event later than 4:00 p.m. (Eastern time) on the third business day (in the case of Investor Shares) or
first business day (in the case of Institutional Shares) following BlackRock’s receipt of the order. If payment is not received by this time, the order will be canceled and you and your Financial Intermediary will be responsible for any loss
to the Fund.
For shares purchased directly from the Fund, a check payable to BlackRock Funds which bears the name of the Fund must accompany a completed purchase application. There is a $20 fee for each purchase check that is returned due to insufficient funds. The Fund does not accept third-party checks. You may also wire Federal funds to the Fund to purchase shares, but you must call (800) 441-7762 before doing so to confirm the wiring instructions. |
Your Choices | Important Information for You to Know | |
Full or Partial Redemption of Shares | Have your Financial Intermediary submit your sales order |
You
can make redemption requests through your Financial Intermediary. Shareholders should indicate whether they are redeeming Investor A, Investor B, Investor C, Institutional or Class R Shares. The price of your shares is based on the next calculation
of the Fund’s net asset value after your order is placed. For your redemption request to be priced at the net asset value on the day of your request, you must submit your request to your Financial Intermediary prior to that day’s close
of business on the NYSE (generally 4:00 p.m. Eastern time). Certain Financial Intermediaries, however, may require submission of orders prior to that time. Any redemption request placed after that time will be priced at the net asset value at the
close of business on the next business day.
Financial Intermediaries may charge a fee to process a redemption of shares. The Fund may reject an order to sell shares under certain circumstances. |
Selling shares held directly with BlackRock |
Methods
of Redeeming
Redeem by Telephone: You may redeem Investor Shares held directly with BlackRock by telephone request if certain conditions are met and if the amount being sold is less than (i) $100,000 for payments by check or (ii) $250,000 for payments through ACH or wire transfer. Certain redemption requests, such as those in excess of these amounts, must be in writing with a medallion signature guarantee. For Institutional Shares, certain redemption requests may require written instructions with a medallion signature guarantee. Call (800) 441-7762 for details. You can obtain a medallion signature guarantee stamp from a bank, securities dealer, securities broker, credit union, savings and loan association, national securities exchange or registered securities association. A notary public seal will not be acceptable. |
Your Choices | Important Information for You to Know | |
Full or Partial Redemption of Shares (continued) | Selling shares held directly with BlackRock (continued) |
The
Fund, its administrators and the Distributor will employ reasonable procedures to confirm that instructions communicated by telephone are genuine. The Fund and its service providers will not be liable for any loss, liability, cost or expense for
acting upon telephone instructions that are reasonably believed to be genuine in accordance with such procedures. The Fund may refuse a telephone redemption request if it believes it is advisable to do so.
During periods of substantial economic or market change, telephone redemptions may be difficult to complete. Please find alternative redemption methods below. Redeem by VRU: Investor Shares may also be redeemed by use of the Fund’s automated VRU. Payment for Investor Shares redeemed by VRU may be made for non-retirement accounts in amounts up to $25,000, either through check, ACH or wire. Redeem by Internet: You may redeem in your account, by logging onto the BlackRock website at www.blackrock.com/funds. Proceeds from Internet redemptions may be sent via check, ACH or wire to the bank account of record. Payment for Investor Shares redeemed by Internet may be made for non-retirement accounts in amounts up to $25,000, either through check, ACH or wire. Different maximums may apply to investors in Institutional Shares. Redeem in Writing: You may sell shares held at BlackRock by writing to BlackRock, P.O. Box 9819, Providence, Rhode Island 02940-8019 or for overnight delivery, 4400 Computer Drive, Westborough, Massachusetts 01588. All shareholders on the account must sign the letter. A medallion signature guarantee will generally be required but may be waived in certain limited circumstances. You can obtain a medallion signature guarantee stamp from a bank, securities dealer, securities broker, credit union, savings and loan association, national securities exchange or registered securities association. A notary public seal will not be acceptable. If you hold stock certificates, return the certificates with the letter. Proceeds from redemptions may be sent via check, ACH or wire to the bank account of record. Payment of Redemption Proceeds: Redemption proceeds may be paid by check or, if the Fund has verified banking information on file, through ACH or by wire transfer. Payment by Check: BlackRock will normally mail redemption proceeds within seven days following receipt of a properly completed request. Shares can be redeemed by telephone and the proceeds sent by check to the shareholder at the address on record. Shareholders will pay $15 for redemption proceeds sent by check via overnight mail. You are responsible for any additional charges imposed by your bank for this service. Payment by Wire Transfer: Payment for redeemed shares for which a redemption order is received before 4:00 p.m. (Eastern time) on a business day is normally made in Federal funds wired to the redeeming shareholder on the next business day, provided that the Fund’s custodian is also open for business. Payment for redemption orders received after 4:00 p.m. (Eastern time) or on a day when the Fund’s custodian is closed is normally wired in Federal funds on the next business day following redemption on which the Fund’s custodian is open for business. The Fund reserves the right to wire redemption proceeds within seven days after receiving a redemption order if, in the judgment of the Fund, an earlier payment could adversely affect the Fund. If a shareholder has given authorization for expedited redemption, shares can be redeemed by Federal wire transfer to a single previously designated bank account. Shareholders will pay $7.50 for redemption proceeds sent by Federal wire transfer. You are responsible for any additional charges imposed by your bank for this service. No charge for wiring redemption payments with respect to Institutional Shares is |
Your Choices | Important Information for You to Know | |
Full or Partial Redemption of Shares (continued) | Selling shares held directly with BlackRock (continued) |
imposed
by the Fund.
The Fund is not responsible for the efficiency of the Federal wire system or the shareholder’s firm or bank. To change the name of the single, designated bank account to receive wire redemption proceeds, it is necessary to send a written request to the Fund at the address on the back cover of this prospectus. Payment by ACH: Redemption proceeds may be sent to the shareholder’s bank account (checking or savings) via ACH. Payment for redeemed shares for which a redemption order is received before 4:00 p.m. (Eastern time) on a business day is normally sent to the redeeming shareholder the next business day, with receipt at the receiving bank within the next two business days (48-72 hours); provided that the Fund’s custodian is also open for business. Payment for redemption orders received after 4:00 p.m. (Eastern time) or on a day when the Fund’s custodian is closed is normally sent on the next business day following redemption on which the Fund’s custodian is open for business. The Fund reserves the right to send redemption proceeds within seven days after receiving a redemption order if, in the judgment of the Fund, an earlier payment could adversely affect the Fund. No charge for sending redemption payments via ACH is imposed by the Fund.
***
If you make a redemption request before the Fund has collected payment for the purchase of shares, the Fund may delay mailing your proceeds. This delay will usually not exceed ten days. |
Your Choices | Important Information for You to Know | |
Exchange Privilege | Selling shares of one fund to purchase shares of another BlackRock Fund (“exchanging”) |
Investor
and Institutional Shares of the Fund are generally exchangeable for shares of the same class of another BlackRock Fund. No exchange privilege is available for Class R Shares.
You can exchange $1,000 or more of Investor Shares from one fund into the same class of another fund which offers that class of shares (you can exchange less than $1,000 of Investor Shares if you already have an account in the fund into which you are exchanging). Investors who currently own Institutional Shares of the Fund may make exchanges into Institutional Shares of other BlackRock Funds except for investors holding shares through certain client accounts at financial professionals that are omnibus with the Fund and do not meet applicable minimums. There is no required minimum amount with respect to exchanges of Institutional Shares. You may only exchange into a share class and fund that are open to new investors or in which you have a current account if the fund is closed to new investors. Some of the BlackRock Funds impose a different initial or deferred sales charge schedule. The CDSC will continue to be measured from the date of the original purchase. The CDSC schedule applicable to your original purchase will apply to the shares you receive in the exchange and any subsequent exchange. To exercise the exchange privilege, you may contact your Financial Intermediary. Alternatively, if your account is held directly with BlackRock, you may: (i) call (800) 441-7762 and speak with one of our representatives, (ii) make the exchange via the Internet by accessing your account online at www.blackrock.com/funds, or (iii) send a written request to the Fund at the address on the back cover of this prospectus. Please note, if you indicated on your New Account Application that you did not want the Telephone Exchange Privilege, you will not be able to place exchanges via the telephone until you update this option either in writing or by calling (800) 441-7762. The Fund has the right to reject any telephone request for any reason. Although there |
Your Choices | Important Information for You to Know | |
Exchange Privilege (continued) | Selling shares of one fund to purchase shares of another BlackRock Fund (“exchanging”) (continued) | is currently no limit on the number of exchanges that you can make, the exchange privilege may be modified or terminated at any time in the future. The Fund may suspend or terminate your exchange privilege at any time for any reason, including if the Fund believes, in its sole discretion, that you are engaging in market timing activities. See “Short-Term Trading Policy” below. For Federal income tax purposes a share exchange is a taxable event and a capital gain or loss may be realized. Please consult your tax adviser or other Financial Intermediary before making an exchange request. |
Transfer Shares to Another Financial Intermediary | Transfer to a participating Financial Intermediary |
You
may transfer your shares of the Fund only to another Financial Intermediary that has entered into an agreement with the Distributor. Certain shareholder services may not be available for the transferred shares. All future trading of these assets
must be coordinated by the receiving firm.
If your account is held directly with BlackRock, you may call (800) 441-7762 with any questions; otherwise please contact your Financial Intermediary to accomplish the transfer of shares. |
Transfer to a non-participating Financial Intermediary |
You
must either:
• Transfer your shares to an account with the Fund; or • Sell your shares, paying any applicable deferred sales charge. If your account is held directly with BlackRock, you may call (800) 441-7762 with any questions; otherwise please contact your Financial Intermediary to accomplish the transfer of shares. |
Automatic Investment Plan | Allows systematic investments on a periodic basis from your checking or savings account. | BlackRock’s AIP allows you to invest a specific amount on a periodic basis from your checking or savings account into your investment account. You may apply for this option upon account opening or by completing the Automatic Investment Plan application. The minimum investment amount for an automatic investment is $50 per portfolio. There is no AIP for Investor B Shares. |
Dividend Allocation Plan | Automatically invests your distributions into another BlackRock Fund of your choice pursuant to your instructions, without any fees or sales charges. | Dividend and capital gains distributions may be reinvested in your account to purchase additional shares or paid in cash. Using the Dividend Allocation Plan, you can direct your distributions to your bank account (checking or savings), to purchase shares of another fund at BlackRock without any fees or sales charges, or by check to a special payee. Please call (800) 441-7762 for details. If investing in another BlackRock Fund, the receiving fund must be open to new purchases. |
EZ Trader | Allows an investor to purchase or sell Investor Shares by telephone or over the Internet through ACH. |
(NOTE:
This option is offered to shareholders whose accounts are held directly with BlackRock. Please speak with your Financial Intermediary if your account is held elsewhere.)
Prior to establishing an EZ Trader account, please contact your bank to confirm that it is a member of the ACH system. Once confirmed, complete an application, making sure to include the appropriate bank information, and return the application to the address listed on the form. Prior to placing a telephone or Internet purchase or sale order, please call (800) 441-7762 to confirm that your bank information has been updated on your account. Once this is established, you may place your request to sell shares with the Fund by telephone or Internet. Proceeds will be sent to your pre-designated bank account. |
■ | Suspend the right of redemption if trading is halted or restricted on the NYSE or under other emergency conditions described in the Investment Company Act; |
■ | Postpone the date of payment upon redemption if trading is halted or restricted on the NYSE or under other emergency conditions described in the Investment Company Act or if a redemption request is made before the Fund has collected payment for the purchase of shares; |
■ | Redeem shares for property other than cash if conditions exist which make cash payments undesirable in accordance with its rights under the Investment Company Act; and |
■ | Redeem shares involuntarily in certain cases, such as when the value of a shareholder account falls below a specified level. |
Portfolio Manager | Primary Role | Since | Title and Recent Biography |
Philip Green | Responsible for the asset allocation of the equity and fixed-income portions of the Fund’s portfolio. | 2006 | Managing Director of BlackRock, Inc. since 2006; Vice President of Merrill Lynch Investment Managers L.P. (“MLIM”) from 1999 to 2006. |
Total
Return
Portfolio Manager |
Primary Role | Since | Title and Recent Biography |
Rick Rieder | Jointly and primarily responsible for the day-to-day management of the Total Return Portfolio’s portfolio, including setting the Total Return Portfolio’s overall investment strategy and overseeing the management of the Total Return Portfolio. | 2010 | Chief Investment Officer of Fixed Income, Fundamental Portfolios of BlackRock Inc. and Head of its Global Credit Business and Credit Strategies, Multi-Sector, and Mortgage Groups since 2010; Managing Director of BlackRock, Inc. since 2009; President and Chief Executive Officer of R3 Capital Partners from 2008 to 2009; Managing Director of Lehman Brothers from 1994 to 2008. |
Bob Miller | Jointly and primarily responsible for the day-to-day management of the Total Return Portfolio’s portfolio, including setting the Total Return Portfolio’s overall investment strategy and overseeing the management of the Total Return Portfolio. | 2011 | Managing Director of BlackRock, Inc. since 2011; Co-Founder and Partner of Round Table Investment Management Company from 2007 to 2009; Managing Director of Bank of America from 1999 to 2007. |
Core Portfolio Managers | Primary Role | Since | Title and Recent Biography |
Peter Stournaras, CFA | Responsible for the day-to-day management of the Core Portfolio’s portfolio including setting the overall investment strategy and overseeing the management of the Core Portfolio. | 2010 | Managing Director of BlackRock, Inc. since 2010; Director at Northern Trust Company from 2006 to 2010; Portfolio Manager at Smith Barney/Legg Mason from 2005 to 2006; Director at Citigroup Asset Management from 1998 to 2005. |
Institutional | |||||
Year Ended September 30, | |||||
2013 | 2012 | 2011 | 2010 | 2009 | |
Per Share Operating Performance | |||||
Net asset value, beginning of year | $ 23.77 | $ 20.18 | $ 20.28 | $ 19.17 | $ 21.96 |
Net investment income 1 | 0.47 | 0.55 | 0.51 | 0.46 | 0.54 |
Net realized and unrealized gain (loss) | 2.35 | 3.55 | (0.13) | 1.20 | (1.60) |
Net increase (decrease) from investment operations | 2.82 | 4.10 | 0.38 | 1.66 | (1.06) |
Dividends and distributions from: 2 | |||||
Net investment income | (0.53) | (0.51) | (0.48) | (0.55) | (0.62) |
Net realized gain | (0.90) | — | — | — | (1.11) |
Total dividends and distributions | (1.43) | (0.51) | (0.48) | (0.55) | (1.73) |
Net asset value, end of year | $ 25.16 | $ 23.77 | $ 20.18 | $ 20.28 | $ 19.17 |
Total Investment Return 3 | |||||
Based on net asset value | 12.42% | 20.52% | 1.67% | 8.75% 4 | (3.53)% 5 |
Ratios to Average Net Assets 6 | |||||
Total expenses | 0.98% | 0.96% | 1.07% | 1.08% | 0.85% |
Total expenses after fees waived | 0.66% | 0.66% | 0.76% | 0.76% | 0.64% |
Net investment income | 1.87% | 2.45% | 2.33% | 2.28% | 3.12% |
Supplemental Data | |||||
Net assets, end of year (000) | $317,572 | $426,027 | $511,458 | $547,721 | $626,711 |
Portfolio turnover of the Fund 7 | — | — | — | — | 94% 8 |
Portfolio turnover of the Master Total Return Portfolio | 777% 9 | 1,346% 10 | 1,771% 11 | 1,754% 12 | 708% 13 |
Portfolio turnover of the Master Large Cap Core Portfolio | 50% | 128% | 129% | 173% | 168% 14 |
1 | Based on average shares outstanding. |
2 | Dividends and distributions are determined in accordance with federal income tax regulations. |
3 | Where applicable, total investment returns exclude the effects of any sales charges and assume the reinvestment of dividends and distributions. |
4 | Includes proceeds received from a settlement of litigation, through its investment in Master Large Cap Core Portfolio, which impacted the Fund’s total return. Excluding these proceeds, the Fund’s total return would have been 8.32%. |
5 | Includes proceeds received from a settlement of litigation, through its investment in Master Large Cap Core Portfolio, which impacted the Fund’s total return. Excluding these proceeds, the Fund’s total return would have been (3.88)%. |
6 | Includes the Fund’s share of the Master Portfolios’ allocated expenses and/or net investment income. |
7 | Excludes transactions in the Master Portfolios. |
8 | Represents portfolio turnover for the period October 1, 2008 to January 30, 2009. |
9 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 450%. |
10 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 752%. |
11 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 1,379%. |
12 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 1,248%. |
13 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 469%. |
14 | Represents portfolio turnover for the period November 1, 2008 to September 30, 2009. |
Investor A | |||||
Year Ended September 30, | |||||
2013 | 2012 | 2011 | 2010 | 2009 | |
Per Share Operating Performance | |||||
Net asset value, beginning of year | $ 23.68 | $ 20.10 | $ 20.21 | $ 19.11 | $ 21.88 |
Net investment income 1 | 0.38 | 0.47 | 0.40 | 0.39 | 0.48 |
Net realized and unrealized gain (loss) | 2.37 | 3.55 | (0.10) | 1.19 | (1.58) |
Net increase (decrease) from investment operations | 2.75 | 4.02 | 0.30 | 1.58 | (1.10) |
Dividends and distributions from: 2 | |||||
Net investment income | (0.42) | (0.44) | (0.41) | (0.48) | (0.56) |
Net realized gain | (0.90) | — | — | — | (1.11) |
Total dividends and distributions | (1.32) | (0.44) | (0.41) | (0.48) | (1.67) |
Net asset value, end of year | $ 25.11 | $ 23.68 | $ 20.10 | $ 20.21 | $ 19.11 |
Total Investment Return 3 | |||||
Based on net asset value | 12.14% | 20.16% | 1.31% | 8.38% 4 | (3.79)% 5 |
Ratios to Average Net Assets 6 | |||||
Total expenses | 1.29% | 1.28% | 1.39% | 1.40% | 1.17% |
Total expenses after fees waived | 0.97% | 0.97% | 1.07% | 1.08% | 0.95% |
Net investment income | 1.51% | 2.12% | 1.83% | 1.96% | 2.80% |
Supplemental Data | |||||
Net assets, end of year (000) | $445,295 | $447,620 | $426,819 | $488,087 | $529,120 |
Portfolio turnover of the Fund 7 | — | — | — | — | 94% 8 |
Portfolio turnover of the Master Total Return Portfolio | 777% 9 | 1,346% 10 | 1,771% 11 | 1,754% 12 | 708% 13 |
Portfolio turnover of the Master Large Cap Core Portfolio | 50% | 128% | 129% | 173% | 168% 14 |
1 | Based on average shares outstanding. |
2 | Dividends and distributions are determined in accordance with federal income tax regulations. |
3 | Where applicable, total investment returns exclude the effects of any sales charges and assume the reinvestment of dividends and distributions. |
4 | Includes proceeds received from a settlement of litigation, through its investment in Master Large Cap Core Portfolio, which impacted the Fund’s total return. Excluding these proceeds, the Fund’s total return would have been 7.95%. |
5 | Includes proceeds received from a settlement of litigation, through its investment in Master Large Cap Core Portfolio, which impacted the Fund’s total return. Excluding these proceeds, the Fund’s total return would have been (4.19)%. |
6 | Includes the Fund’s share of the Master Portfolios’ allocated expenses and/or net investment income. |
7 | Excludes transactions in the Master Portfolios. |
8 | Represents portfolio turnover for the period October 1, 2008 to January 30, 2009. |
9 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 450%. |
10 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 752%. |
11 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 1,379%. |
12 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 1,248%. |
13 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 469%. |
14 | Represents portfolio turnover for the period November 1, 2008 to September 30, 2009. |
Investor B | |||||
Year Ended September 30, | |||||
2013 | 2012 | 2011 | 2010 | 2009 | |
Per Share Operating Performance | |||||
Net asset value, beginning of year | $23.07 | $19.55 | $19.65 | $ 18.56 | $ 21.24 |
Net investment income 1 | 0.13 | 0.24 | 0.18 | 0.20 | 0.32 |
Net realized and unrealized gain (loss) | 2.29 | 3.46 | (0.10) | 1.16 | (1.55) |
Net increase (decrease) from investment operations | 2.42 | 3.70 | 0.08 | 1.36 | (1.23) |
Dividends and distributions from: 2 | |||||
Net investment income | (0.12) | (0.18) | (0.18) | (0.27) | (0.34) |
Net realized gain | (0.90) | — | — | — | (1.11) |
Total dividends and distributions | (1.02) | (0.18) | (0.18) | (0.27) | (1.45) |
Net asset value, end of year | $24.47 | $23.07 | $19.55 | $ 19.65 | $ 18.56 |
Total Investment Return 3 | |||||
Based on net asset value | 10.94% | 19.01% | 0.34% | 7.37% 4 | (4.69)% 5 |
Ratios to Average Net Assets 6 | |||||
Total expenses | 2.33% | 2.29% | 2.36% | 2.34% | 2.09% |
Total expenses after fees waived | 2.01% | 1.98% | 2.04% | 2.02% | 1.90% |
Net investment income | 0.51% | 1.13% | 0.86% | 1.03% | 1.93% |
Supplemental Data | |||||
Net assets, end of year (000) | $4,926 | $7,128 | $8,786 | $14,374 | $23,963 |
Portfolio turnover of the Fund 7 | — | — | — | — | 94% 8 |
Portfolio turnover of the Master Total Return Portfolio | 777% 9 | 1,346% 10 | 1,771% 11 | 1,754% 12 | 708% 13 |
Portfolio turnover of the Master Large Cap Core Portfolio | 50% | 128% | 129% | 173% | 168% 14 |
1 | Based on average shares outstanding. |
2 | Dividends and distributions are determined in accordance with federal income tax regulations. |
3 | Where applicable, total investment returns exclude the effects of any sales charges and assume the reinvestment of dividends and distributions. |
4 | Includes proceeds received from a settlement of litigation, through its investment in Master Large Cap Core Portfolio, which impacted the Fund’s total return. Excluding these proceeds, the Fund’s total return would have been 6.82%. |
5 | Includes proceeds received from a settlement of litigation, through its investment in Master Large Cap Core Portfolio, which impacted the Fund’s total return. Excluding these proceeds, the Fund’s total return would have been (5.10)%. |
6 | Includes the Fund’s share of the Master Portfolios’ allocated expenses and/or net investment income. |
7 | Excludes transactions in the Master Portfolios. |
8 | Represents portfolio turnover for the period October 1, 2008 to January 30, 2009. |
9 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 450%. |
10 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 752%. |
11 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 1,379%. |
12 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 1,248%. |
13 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 469%. |
14 | Represents portfolio turnover for the period November 1, 2008 to September 30, 2009. |
Investor C | |||||
Year Ended September 30, | |||||
2013 | 2012 | 2011 | 2010 | 2009 | |
Per Share Operating Performance | |||||
Net asset value, beginning of year | $ 21.92 | $ 18.64 | $ 18.77 | $ 17.79 | $ 20.51 |
Net investment income 1 | 0.18 | 0.28 | 0.21 | 0.21 | 0.32 |
Net realized and unrealized gain (loss) | 2.17 | 3.28 | (0.08) | 1.12 | (1.50) |
Net increase (decrease) from investment operations | 2.35 | 3.56 | 0.13 | 1.33 | (1.18) |
Dividends and distributions from: 2 | |||||
Net investment income | (0.17) | (0.28) | (0.26) | (0.35) | (0.43) |
Net realized gain | (0.90) | — | — | — | (1.11) |
Total dividends and distributions | (1.07) | (0.28) | (0.26) | (0.35) | (1.54) |
Net asset value, end of year | $ 23.20 | $ 21.92 | $ 18.64 | $ 18.77 | $ 17.79 |
Total Investment Return 3 | |||||
Based on net asset value | 11.22% | 19.22% | 0.55% | 7.53% 4 | (4.56)% 5 |
Ratios to Average Net Assets 6 | |||||
Total expenses | 2.07% | 2.06% | 2.18% | 2.20% | 1.97% |
Total expenses after fees waived | 1.75% | 1.75% | 1.87% | 1.88% | 1.76% |
Net investment income | 0.72% | 1.33% | 1.04% | 1.16% | 2.00% |
Supplemental Data | |||||
Net assets, end of year (000) | $63,952 | $61,541 | $56,608 | $61,017 | $60,461 |
Portfolio turnover of the Fund 7 | — | — | — | — | 94% 8 |
Portfolio turnover of the Master Total Return Portfolio | 777% 9 | 1,346% 10 | 1,771% 11 | 1,754% 12 | 708% 13 |
Portfolio turnover of the Master Large Cap Core Portfolio | 50% | 128% | 129% | 173% | 168% 14 |
1 | Based on average shares outstanding. |
2 | Dividends and distributions are determined in accordance with federal income tax regulations. |
3 | Where applicable, total investment returns exclude the effects of any sales charges and assume the reinvestment of dividends and distributions. |
4 | Includes proceeds received from a settlement of litigation, through its investment in Master Large Cap Core Portfolio, which impacted the Fund’s total return. Excluding these proceeds, the Fund’s total return would have been 7.12%. |
5 | Includes proceeds received from a settlement of litigation, through its investment in Master Large Cap Core Portfolio, which impacted the Fund’s total return. Excluding these proceeds, the Fund’s total return would have been (4.94)%. |
6 | Includes the Fund’s share of the Master Portfolios’ allocated expenses and/or net investment income. |
7 | Excludes transactions in the Master Portfolios. |
8 | Represents portfolio turnover for the period October 1, 2008 to January 30, 2009. |
9 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 450%. |
10 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 752%. |
11 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 1,379%. |
12 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 1,248%. |
13 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 469%. |
14 | Represents portfolio turnover for the period November 1, 2008 to September 30, 2009. |
Class R | |||||
Year Ended September 30, | |||||
2013 | 2012 | 2011 | 2010 | 2009 | |
Per Share Operating Performance | |||||
Net asset value, beginning of year | $22.63 | $19.22 | $19.33 | $18.31 | $ 21.06 |
Net investment income 1 | 0.28 | 0.37 | 0.30 | 0.29 | 0.38 |
Net realized and unrealized gain (loss) | 2.24 | 3.39 | (0.09) | 1.14 | (1.54) |
Net increase (decrease) from investment operations | 2.52 | 3.76 | 0.21 | 1.43 | (1.16) |
Dividends and distributions from: 2 | |||||
Net investment income | (0.29) | (0.35) | (0.32) | (0.41) | (0.48) |
Net realized gain | (0.90) | — | — | — | (1.11) |
Total dividends and distributions | (1.19) | (0.35) | (0.32) | (0.41) | (1.59) |
Net asset value, end of year | $23.96 | $22.63 | $19.22 | $19.33 | $ 18.31 |
Total Investment Return 3 | |||||
Based on net asset value | 11.66% | 19.73% | 0.96% | 7.87% 4 | (4.25)% 5 |
Ratios to Average Net Assets 6 | |||||
Total expenses | 1.66% | 1.67% | 1.77% | 1.84% | 1.64% |
Total expenses after fees waived | 1.33% | 1.36% | 1.46% | 1.52% | 1.42% |
Net investment income | 1.16% | 1.73% | 1.44% | 1.51% | 2.29% |
Supplemental Data | |||||
Net assets, end of year (000) | $8,542 | $8,963 | $8,118 | $9,737 | $10,194 |
Portfolio turnover of the Fund 7 | — | — | — | — | 94% 8 |
Portfolio turnover of the Master Total Return Portfolio | 777% 9 | 1,346% 10 | 1,771% 11 | 1,754% 12 | 708% 13 |
Portfolio turnover of the Master Large Cap Core Portfolio | 50% | 128% | 129% | 173% | 168% 14 |
1 | Based on average shares outstanding. |
2 | Dividends and distributions are determined in accordance with federal income tax regulations. |
3 | Where applicable, total investment returns assume the reinvestment of dividends and distributions. |
4 | Includes proceeds received from a settlement of litigation, through its investment in Master Large Cap Core Portfolio, which impacted the Fund’s total return. Excluding these proceeds, the Fund’s total return would have been 7.53%. |
5 | Includes proceeds received from a settlement of litigation, through its investment in Master Large Cap Core Portfolio, which impacted the Fund’s total return. Excluding these proceeds, the Fund’s total return would have been (4.62)%. |
6 | Includes the Fund’s share of the Master Portfolios’ allocated expenses and/or net investment income. |
7 | Excludes transactions in the Master Portfolios. |
8 | Represents portfolio turnover for the period October 1, 2008 to January 30, 2009. |
9 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 450%. |
10 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 752%. |
11 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 1,379%. |
12 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 1,248%. |
13 | Includes mortgage dollar roll transactions; excluding these transactions the portfolio turnover would have been 469%. |
14 | Represents portfolio turnover for the period November 1, 2008 to September 30, 2009. |
■ | Access the BlackRock website at http://www.blackrock.com/edelivery; and |
■ | Log into your account. |
Class | Ticker Symbol | |
Investor A
Shares
|
MDCPX | |
Investor B
Shares
|
MBCPX | |
Investor C
Shares
|
MCCPX | |
Institutional
Shares
|
MACPX | |
Class R Shares
|
MRBPX |
BlackRock
Balanced Capital Fund, Inc. |
|
144A Securities | X |
Asset-Backed Securities | X |
Asset-Based Securities | X |
Precious Metal-Related Securities | X |
Bank Loans | X |
Borrowing and Leverage | X |
Cash Flows; Expenses | |
Cash Management | X |
Collateralized Debt Obligations | X |
Collateralized Bond Obligations | X |
Collateralized Loan Obligations | X |
Commercial Paper | X |
Commodity-Linked Derivative Instruments and Hybrid Instruments | X |
Qualifying Hybrid Instruments | X |
Hybrid Instruments Without Principal Protection | X |
Limitations on Leverage | X |
Counterparty Risk | X |
Convertible Securities | X |
Debt Securities | X |
Depositary Receipts (ADRs, EDRs and GDRs) | X |
Derivatives | X |
Hedging | X |
Indexed and Inverse Securities | X |
Swap Agreements | X |
Credit Default Swap Agreements and Similar Instruments | X |
Credit Linked Securities | X |
Interest Rate Transactions and Swaptions | X |
Total Return Swap Agreements | X |
Types of Options | X |
Options on Securities and Securities Indices | X |
Call Options | X |
Put Options | X |
Options on Government National Mortgage Association (“GNMA”) Certificates | X |
Risks Associated with Options | X |
Futures | X |
Risks Associated with Futures | X |
Foreign Exchange Transactions | X |
BlackRock
Balanced Capital Fund, Inc. |
|
Forward Foreign Exchange Transactions | X |
Currency Futures | X |
Currency Options | X |
Currency Swaps | X |
Limitations on Currency Transactions | X |
Risk Factors in Hedging Foreign Currency | X |
Risk Factors in Derivatives | X |
Credit Risk | X |
Currency Risk | X |
Leverage Risk | X |
Liquidity Risk | X |
Correlation Risk | X |
Index Risk | X |
Additional Risk Factors of OTC Transactions; Limitations on the Use of OTC Derivatives | X |
Distressed Securities | X |
Dollar Rolls | X |
Equity Securities | X |
Exchange Traded Notes | X |
Foreign Investment Risks | X |
Foreign Market Risk | X |
Foreign Economy Risk | X |
Currency Risk and Exchange Risk | X |
Governmental Supervision and Regulation/Accounting Standards | X |
Certain Risks of Holding Fund Assets Outside the United States | X |
Settlement Risk | X |
Funding Agreements | |
Guarantees | |
Illiquid or Restricted Securities | X |
Inflation-Indexed Bonds | X |
Inflation Risk | X |
Information Concerning the Indices | |
Standard & Poor’s 500 Index | |
Russell Indexes | |
MSCI Index | |
Investment Grade Debt Obligations | X |
Investment in Emerging Markets | X |
Brady Bonds | X |
Investment in Other Investment Companies | X |
Junk Bonds | X |
Lease Obligations | |
Life Settlement Investments | |
Liquidity Management | X |
Master Limited Partnerships | X |
Merger Transaction Risk | |
Mezzanine Investments | X |
Money Market Obligations of Domestic Banks, Foreign Banks and Foreign Branches of U.S. Banks | X |
Money Market Securities | X |
Mortgage-Related Securities | X |
Mortgage-Backed Securities | X |
Collateralized Mortgage Obligations (“CMOs”) | X |
Adjustable Rate Mortgage Securities | X |
CMO Residuals | X |
Stripped Mortgage-Backed Securities | X |
Tiered Index Bonds | X |
BlackRock
Balanced Capital Fund, Inc. |
|
Municipal Investments | X |
Risk Factors and Special Considerations Relating to Municipal Bonds | X |
Description of Municipal Bonds | X |
General Obligation Bonds | X |
Revenue Bonds | X |
PABs | X |
Moral Obligation Bonds | X |
Municipal Notes | X |
Municipal Commercial Paper | X |
Municipal Lease Obligations | X |
Tender Option Bonds | X |
Yields | X |
Variable Rate Demand Obligations (“VRDOs”) and Participating VRDOs | X |
Transactions in Financial Futures Contracts | X |
Call Rights | X |
Municipal Interest Rate Swap Transactions | X |
Insured Municipal Bonds | X |
Build America Bonds | X |
Net Interest Margin (NIM) Securities | X |
Participation Notes | X |
Pay-in-Kind Bonds | X |
Portfolio Turnover Rates | X |
Preferred Stock | X |
Real Estate Related Securities | X |
Real Estate Investment Trusts (“REITS”) | X |
Repurchase Agreements and Purchase and Sale Contracts | X |
Reverse Repurchase Agreements | X |
Rights Offerings and Warrants to Purchase | X |
Securities Lending | X |
Securities of Smaller or Emerging Growth Companies | X |
Short Sales | X |
Sovereign Debt | X |
Standby Commitment Agreements | X |
Stripped Securities | X |
Structured Notes | X |
Supranational Entities | X |
Tax-Exempt Derivatives | |
Tax-Exempt Preferred Shares | |
Taxability Risk | |
Trust Preferred Securities | X |
U.S. Government Obligations | X |
Utility Industries | X |
When Issued Securities, Delayed Delivery Securities and Forward Commitments | X |
Yields and Ratings | X |
Zero Coupon Securities | X |
Directors | Experience, Qualifications and Skills | |
Independent Directors | ||
James H. Bodurtha | James H. Bodurtha has served for more than 21 years on the boards of registered investment companies, most recently as a member of the Board of the Equity-Bond Complex and its predecessor funds, including as Chairman of the Board of certain of the legacy-Merrill Lynch Investment Managers, L.P. (“MLIM”) funds. Prior thereto, Mr. Bodurtha was counsel to and a member of the Board of a smaller bank-sponsored mutual funds group. In addition, Mr. Bodurtha is a member of, and previously served as Chairman of, the Independent Directors Council and currently serves as an independent director on the Board of Governors of the Investment Company Institute. He also has more than 30 years of executive management and business experience through his work as a consultant and as the chairman of the board of a privately-held company. In addition, Mr. Bodurtha has more than 20 years of legal experience as a corporate attorney and partner in a law firm, where his practice included counseling registered investment companies and their boards. | |
Bruce R. Bond | Bruce R. Bond has served for approximately 16 years on the board of registered investment companies, having served as a member of the Board of the Equity-Bond Complex and its predecessor funds, including the legacy-BlackRock funds and the State Street Research Mutual Funds. He also has executive management and business experience, having served as president and chief executive officer of several communications networking companies. Mr. Bond also has corporate governance experience from his service as a director of a computer equipment company. |
Directors | Experience, Qualifications and Skills | |
Donald W. Burton | Donald W. Burton has served for approximately 27 years on the board of registered investment companies, having served as a member of the Board of the Equity-Bond Complex and its predecessor funds, including the legacy-MLIM and Raymond James funds. He also has more than 30 years of investment management business experience, having served as the managing general partner of an investment partnership, and a member of the Investment Advisory Council of the Florida State Board of Administration. In addition, Mr. Burton has corporate governance experience, having served as a board member of publicly-held financial, health-care, and telecommunications companies. | |
The
Honorable
Stuart E. Eizenstat |
The Honorable Stuart E. Eizenstat has served for approximately 12 years on the board of registered investment companies, having served as a member of the Board of the Equity-Bond Complex and its predecessor funds, including the legacy-BlackRock funds. He served as U.S. Ambassador to the European Union Under Secretary of Commerce for International Trade, Under Secretary of State for Economic, Business & Agricultural Affairs, and Deputy Secretary of the U.S. Treasury during the Clinton Administration. He was Director of the White House Domestic Policy Staff and Chief Domestic Policy Adviser to President Carter. In addition, Mr. Eizenstat is a practicing attorney and Head of the International Practice at a major international law firm. Mr. Eizenstat has business and executive management experience and corporate governance experience through his service on the advisory boards and corporate boards of publicly-held consumer, energy, environmental delivery, metallurgical and telecommunications companies. Mr. Eizenstat has been determined by the Audit Committee to be an audit committee financial expert, as such term is defined in the applicable SEC rules. | |
Kenneth A. Froot | Kenneth A. Froot has served for approximately 18 years on the boards of registered investment companies, having served as a member of the Board of the Equity-Bond Complex and its predecessor funds, including the legacy-MLIM funds. The Equity-Bond Board benefits from Mr. Froot’s years of academic experience, having served as a professor of finance at Harvard University since 1992 and teaching courses on capital markets, international finance, and risk management. Mr. Froot has published numerous articles and books on a range of topics, including, among others, the financing of risk, risk management, the global financial system, currency analysis, foreign investing, and investment style strategies. He has served as a director of research for Harvard Business School for approximately 6 years, and as a managing partner of an investment partnership. In addition, Mr. Froot has served as a consultant to the International Monetary Fund, the World Bank, and the Board of Governors of the Federal Reserve, and served on the staff of the US President’s Council of Economic Advisers and the Economic Advisory Board of the Export-Import Bank of the United States. | |
Robert M. Hernandez | Robert M. Hernandez has served for approximately 19 years on the board of registered investment companies, having served as Chairman of the Board of the Equity-Bond Complex and as Vice Chairman and Chairman of the Audit and Nominating/Governance Committees of its predecessor funds, including certain legacy-BlackRock funds. Mr. Hernandez has business and executive experience through his service as group president, chief financial officer, Chairman and vice chairman, among other positions, of publicly-held energy, steel, and metal companies. He has served as a director of other public companies in various industries throughout his career. He also has broad corporate governance experience, having served as a board member of publicly-held energy, insurance, chemicals, metals and electronics companies. Mr. Hernandez has been determined by the Audit Committee to be an audit committee financial expert, as such term is defined in the applicable SEC rules. |
Directors | Experience, Qualifications and Skills | |
John F. O’Brien | John F. O’Brien has served for approximately 8 years on the board of registered investment companies, having served as a member of the Board of the Equity-Bond Complex and its predecessor funds, including the legacy-MLIM funds. He also has investment management experience, having served as the president, director, and chairman of the board of an investment management firm and a life insurance company. Mr. O’Brien also has broad corporate governance and audit committee experience, having served as a board member and audit committee member of publicly-held financial, medical, energy, chemical, retail, life insurance, and auto parts manufacturing companies, and as a director of a not-for-profit organization. | |
Roberta Cooper Ramo | Roberta Cooper Ramo has served for approximately 13 years on the board of registered investment companies, having served as a member of the Board of the Equity-Bond Complex and its predecessor funds, including the legacy-MLIM funds. She is a practicing attorney and shareholder in a law firm for more than 30 years. Ms. Ramo has oversight experience through her service as chairman of the board of a retail company and as president of the American Bar Association and the American Law Institute and as President, for 2 years, and Member of the Board of Regents, for 6 years, of the University of New Mexico. She also has corporate governance experience, having served on the boards of United New Mexico Bank and the First National Bank of New Mexico and on the boards of non-profit organizations. | |
David H. Walsh | David H. Walsh has served for approximately 10 years on the board of registered investment companies, having served as a member of the Board of the Equity-Bond Complex and its predecessor funds, including the legacy-MLIM funds. Mr. Walsh has investment management experience, having served as a consultant with Putnam Investments (“Putnam”) from 1993 to 2003, and employed in various capacities at Putnam from 1971 to 1992. He has oversight experience, serving as the director of an academic institute, and a board member of various not-for-profit organizations. | |
Fred G. Weiss | Fred G. Weiss has served for approximately 15 years on the board of registered investment companies, having served as a member of the Board of the Equity-Bond Complex and its predecessor funds, including as Chairman of the board of certain of the legacy-MLIM funds. He also has more than 30 years of business and executive management experience, having served in senior executive positions of two public companies where he was involved in both strategic planning and corporate development, as Chairman of the Committee on Investing Employee Assets (CIBA) and as a managing director of an investment consulting firm. Mr. Weiss also has corporate governance experience, having served as a board member of a publicly-held global technology company and a pharmaceutical company, and as a director of a not-for-profit foundation. Mr. Weiss has been determined by the Audit Committee to be an audit committee financial expert, as such term is defined in the applicable SEC rules. | |
Interested Directors | ||
Paul L. Audet | Paul L. Audet has a wealth of experience in the investment management industry, including more than 15 years with BlackRock and over 30 years in finance and asset management. His expertise in finance is demonstrated by his positions as Chief Financial Officer of BlackRock and head of BlackRock’s Global Cash Management business. Mr. Audet currently is a member of BlackRock’s Global Operating and Corporate Risk Management Committees, the BlackRock Alternative Investors Executive Committee and the Investment Committee for the Private Equity Fund of Funds. Prior to joining BlackRock, Mr. Audet was the Senior Vice President of Finance at PNC Bank Corp. and Chief Financial Officer of the investment management and mutual fund processing businesses and head of PNC’s Mergers & Acquisitions unit. |
Directors | Experience, Qualifications and Skills | |
Laurence D. Fink | Laurence D. Fink has served for approximately 13 years on the board of registered investment companies, having served as a member of the Board of the Equity-Bond Complex and its predecessor funds. He serves as Chairman of the Board and Chief Executive Officer of BlackRock, Inc. since its formation in 1998 and of BlackRock, Inc.’s predecessor entities since 1988 and Chairman of the Executive and Management Committees. Mr. Fink served as a managing director of The First Boston Corporation, Member of its Management Committee, Co-head of its Taxable Fixed Income Division and Head of its Mortgage and Real Estate Products Group. He also is Chairman of the Board of several of BlackRock’s alternative investment vehicles, Director of several of BlackRock’s offshore funds, a Member of the Board of Trustees of New York University, Chair of the Financial Affairs Committee and a member of the Executive Committee, the Ad Hoc Committee on Board Governance, and the Committee on Trustees. Mr. Fink serves as Co-Chairman of the NYU Hospitals Center Board of Trustees, Chairman of the Development/Trustee Stewardship Committee and Chairman of the Finance Committee, and a Trustee of The Boys’ Club of New York. | |
Henry Gabbay | Henry Gabbay’s many years of experience in finance provide the Board with a wealth of practical business knowledge and leadership. In particular, Mr. Gabbay’s experience as a Consultant for and Managing Director of BlackRock, Inc., Chief Administrative Officer of BlackRock and President of BlackRock Funds provides the Fund with greater insight into the analysis and evaluation of both its existing investment portfolios and potential future investments as well as enhanced oversight of its investment decisions and investment valuation processes. In addition, Mr. Gabbay’s former positions as Chief Administrative Officer of BlackRock and as Treasurer of certain closed-end funds in the BlackRock Fund Complexes provide the Boards with direct knowledge of the operations of the BlackRock-advised Funds and its investment adviser. Mr. Gabbay’s previous service on and long-standing relationship with the Boards also provide him with a specific understanding of the BlackRock-advised Funds, its operations, and the business and regulatory issues facing the BlackRock-advised Funds. |
Name,
Address
and Year of Birth |
Position(s)
Held with the Fund and Master Bond LLC |
Length
of
Time Served as a Director 1,2 |
Principal
Occupation(s)
During Past Five Years |
Number
of
BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen |
Public
Company
or Investment Company Directorships held During Past Five Years |
|||||
Independent Directors | ||||||||||
James
H. Bodurtha
3
55 East 52nd Street New York, NY 10055 1944 |
Director | 2007 to present | Director, The China Business Group, Inc. (consulting and investing firm) from 1996 to 2013 and Executive Vice President thereof from 1996 to 2003; Chairman of the Board, Berkshire Holding Corporation since 1980. | 28 RICs consisting of 84 Portfolios | None | |||||
Bruce
R. Bond
55 East 52nd Street New York, NY 10055 1946 |
Director | 2007 to present | Trustee and Member of the Governance Committee, State Street Research Mutual Funds from 1997 to 2005; Board Member of Governance, Audit and Finance Committee, Avaya Inc. (computer equipment) from 2003 to 2007. | 28 RICs consisting of 84 Portfolios | None |
Name,
Address
and Year of Birth |
Position(s)
Held with the Fund and Master Bond LLC |
Length
of
Time Served as a Director 1,2 |
Principal
Occupation(s)
During Past Five Years |
Number
of
BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen |
Public
Company
or Investment Company Directorships held During Past Five Years |
|||||
Donald
W. Burton
55 East 52nd Street New York, NY 10055 1944 |
Director | Director of the Fund from 2002 to present; Director of Master Bond LLC from 2007 to present | Managing General Partner, The Burton Partnership, LP (an investment partnership) since 1979; Managing General Partner, The South Atlantic Venture Funds from 1983 to 2012; Director, IDology, Inc. (technology solutions) since 2006; Director, Knology, Inc. (telecommunications) from 1996 to 2012; Director, Capital Southwest (financial) from 2006 to 2012. | 28 RICs consisting of 84 Portfolios | None | |||||
Honorable
Stuart E. Eizenstat
4
55 East 52nd Street New York, NY 10055 1943 |
Director | 2007 to present | Partner and Head of International Practice, Covington and Burling LLP (law firm) since 2001; International Advisory Board Member, The Coca Cola Company from 2002 to 2011; Advisory Board Member, Veracity Worldwide, LLC (risk management) from 2007 to 2012; Member of the International Advisory Board GML Ltd. (energy) since 2003; Advisory Board Member, BT Americas (telecommunications) from 2004 to 2009. | 28 RICs consisting of 84 Portfolios | Alcatel-Lucent (telecommunications); Global Specialty Metallurgical; UPS Corporation (delivery service) | |||||
Kenneth
A. Froot
55 East 52nd Street New York, NY 10055 1957 |
Director | 2007 to present | Professor, Harvard University since 1992. | 28 RICs consisting of 84 Portfolios | None | |||||
Robert
M. Hernandez
5
55 East 52nd Street New York, NY 10055 1944 |
Director | 2007 to present | Director, Vice Chairman and Chief Financial Officer of USX Corporation (energy and steel business) from 1991 to 2001; Director, TE Connectivity (electronics) from 2006 to 2012. | 28 RICs consisting of 84 Portfolios | ACE Limited (insurance company); Eastman Chemical Company; RTI International Metals, Inc.; TYCO Electronics (electronics) | |||||
John
F. O’Brien
55 East 52nd Street New York, NY 10055 1943 |
Director | Director of the Fund from 2005 to present; Director of Master Bond LLC from 2007 to present | Chairman, Woods Hole Oceanographic Institute since 2009 and Trustee thereof from 2003 to 2009; Director, Ameresco, Inc. (energy solutions company) from 2006 to 2007. | 28 RICs consisting of 84 Portfolios | Cabot Corporation (chemicals); LKQ Corporation (auto parts manufacturing); TJX Companies, Inc. (retailer) | |||||
Roberta
Cooper Ramo
55 East 52nd Street New York, NY 10055 1942 |
Director | 2007 to present | Shareholder and Attorney, Modrall, Sperling, Roehl, Harris & Sisk, P.A. (law firm) since 1993; Chairman of the Board, Cooper’s Inc. (retail) since 1999; Director, ECMC Group (service provider to students, schools and lenders) since 2001; President, The American Law Institute (non-profit) since 2008. | 28 RICs consisting of 84 Portfolios | None |
Name,
Address
and Year of Birth |
Position(s)
Held with the Fund and Master Bond LLC |
Length
of
Time Served as a Director 1,2 |
Principal
Occupation(s)
During Past Five Years |
Number
of
BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen |
Public
Company
or Investment Company Directorships held During Past Five Years |
|||||
David
H. Walsh
6
55 East 52nd Street New York, NY 10055 1941 |
Director | Director of the Fund from 2003 to present; Director of Master Bond LLC from 2007 to present | Director, National Museum of Wildlife Art since 2007; Trustee, University of Wyoming Foundation since 2008; Director, Ruckelshaus Institute and Haub School of Natural Resources at the University of Wyoming from 2006 to 2008; Director, The American Museum of Fly Fishing since 1997. | 28 RICs consisting of 84 Portfolios | None | |||||
Fred
G. Weiss
7
55 East 52nd Street New York, NY 10055 1941 |
Director | Director of the Fund from 1998 to present; Director of Master Bond LLC from 2007 to present | Managing Director, FGW Associates (consulting and investment company) since 1997; Director, Michael J. Fox Foundation for Parkinson’s Research since 2000; Director, BTG International PLC (medical technology commercialization company) from 2001 to 2007. | 28 RICs consisting of 84 Portfolios | Actavis plc (pharmaceuticals) | |||||
Interested Directors 1,8 | ||||||||||
Paul
L. Audet
55 East 52nd Street New York, NY 10055 1953 |
Director | 2011 to present | Senior Managing Director of BlackRock, Inc. and Head of U.S. Mutual Funds since 2011; Chair of the U.S. Mutual Funds Committee reporting to the Global Executive Committee since 2011; Head of BlackRock’s Real Estate business from 2008 to 2011; Member of BlackRock’s Global Operating and Corporate Risk Management Committees and of the BlackRock Alternative Investors Executive Committee and Investment Committee for the Private Equity Fund of Funds business since 2008; Head of BlackRock’s Global Cash Management business from 2005 to 2010; Acting Chief Financial Officer of BlackRock from 2007 to 2008; Chief Financial Officer of BlackRock from 1998 to 2005. | 143 RICs consisting of 273 Portfolios | None |
Name,
Address
and Year of Birth |
Position(s)
Held with the Fund and Master Bond LLC |
Length
of
Time Served as a Director 1,2 |
Principal
Occupation(s)
During Past Five Years |
Number
of
BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen |
Public
Company
or Investment Company Directorships held During Past Five Years |
|||||
Laurence
D. Fink
55 East 52nd Street New York, NY 10055 1952 |
Director | 2007 to present | Chairman and Chief Executive Officer of BlackRock, Inc. since its formation in 1998 and of BlackRock, Inc.’s predecessor entities since 1988 and Chairman of the Executive and Management Committees; Formerly Managing Director, The First Boston Corporation, Member of its Management Committee, Co-head of its Taxable Fixed Income Division and Head of its Mortgage and Real Estate Products Group; Chairman of the Board of several of BlackRock’s alternative investment vehicles; Director of several of BlackRock’s offshore funds; Member of the Board of Trustees of New York University, Chair of the Financial Affairs Committee and a member of the Executive Committee, the Ad Hoc Committee on Board Governance, and the Committee on Trustees; Co-Chairman of the NYU Hospitals Center Board of Trustees, Chairman of the Development/Trustee Stewardship Committee and Chairman of the Finance Committee; Trustee, The Boys’ Club of New York. | 28 RICs consisting of 84 Portfolios | BlackRock, Inc. | |||||
Henry
Gabbay
55 East 52nd Street New York, NY 10055 1947 |
Director | 2007 to present | Consultant, BlackRock, Inc. from 2007 to 2008; Managing Director, BlackRock, Inc. from 1989 to 2007; Chief Administrative Officer, BlackRock from 1998 to 2007; President of BlackRock Funds and BlackRock Allocation Target Shares (formerly, BlackRock Bond Allocation Target Shares) from 2005 to 2007 and Treasurer of certain closed-end funds in the BlackRock Fund Complex from 1989 to 2006. | 143 RICs consisting of 273 Portfolios | None |
1 | Each Director holds office until his or her successor is duly elected and qualifies or until his or her earlier death, resignation, retirement or removal as provided by the Fund’s by-laws or charter or statute. In no event may an Independent Director hold office beyond December 31 of the year in which he or she turns 74. In no event may an Interested Director hold office beyond December 31 of the year in which he or she turns 72. |
2 | Following the combination of MLIM and BlackRock, Inc. in September 2006, the various legacy MLIM and legacy BlackRock Fund boards were realigned and consolidated into three new Fund boards in 2007. As a result, although the chart shows certain Directors as joining the Fund’s board in 2007, each Director first became a member of the Board of Directors/Trustees of other legacy MLIM or legacy BlackRock Funds as follows: James H. Bodurtha, 1995; Bruce R. Bond, 2005; Donald W. Burton, 2002; Honorable Stuart E. Eizenstat, 2001; Kenneth A. Froot, 2005; Robert M. Hernandez, 1996; John F. O’Brien, 2005; Roberta Cooper Ramo, 1999; David H. Walsh, 2003; and Fred G. Weiss, 1998. |
3 | Chairman of the Compliance Committee. |
4 | Chairman of the Governance Committee. |
5 | Chairman of the Board of Directors. |
6 | Chairman of the Performance Committee. |
7 | Vice-Chairman of the Board of Directors and Chairman of the Audit Committee. |
8 | Messrs. Audet and Fink are both “interested persons,” as defined in the Investment Company Act, of the Fund based on their positions at BlackRock, Inc. and its affiliates. Mr. Gabbay is an “interested person” of the Fund due to his former position at BlackRock, Inc. and to his ownership of BlackRock, Inc. and The PNC Financial Services Group, Inc. securities. |
Directors | Experience, Qualifications and Skills | |
Independent Directors | ||
David O. Beim | David O. Beim has served for over 16 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy Merrill Lynch Investment Managers, L.P. (“MLIM”) funds. Mr. Beim has served as a professor of finance and economics at the Columbia University Graduate School of Business since 1991 and has taught courses on corporate finance, international banking and emerging financial markets. The Board benefits from the perspective and background gained by his almost 20 years of academic experience. He has published numerous articles and books on a range of topics, including, among others, banking and finance. In addition, Mr. Beim spent 25 years in investment banking, including starting and running the investment banking business at Bankers Trust Company. | |
Ronald W. Forbes | Ronald W. Forbes has served for more than 30 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy MLIM funds. This length of service provides Mr. Forbes with direct knowledge of the operation of the Fund and the business and regulatory issues facing the Fund. He currently serves as professor emeritus at the School of Business at the State University of New York at Albany, and has served as a professor of finance thereof since 1989. Mr. Forbes’ experience as a professor of finance provides valuable background for his service on the Board. Mr. Forbes has also served as a member of the task force on municipal securities markets for the Twentieth Century Fund. |
Directors | Experience, Qualifications and Skills | |
Dr. Matina S. Horner | Dr. Matina S. Horner has served for over ten years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy BlackRock funds. The Board benefits from her prior service as Executive Vice President of Teachers Insurance and Annuity Association and College Retirement Equities Fund, which provided Dr. Horner with management and corporate governance experience. In addition, Dr. Horner served as a professor in the Department of Psychology at Harvard University and served as President of Radcliffe College for 17 years. Dr. Horner also served on various public, private and non-profit boards. | |
Rodney D. Johnson | Rodney D. Johnson has served for over 20 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy BlackRock funds. He has over 25 years of experience as a financial advisor covering a range of engagements, which has broadened his knowledge of and experience with the investment management business. Prior to founding Fairmount Capital Advisors, Inc., Mr. Johnson served as Chief Financial Officer of Temple University for four years. He served as Director of Finance and Managing Director, in addition to a variety of other roles, for the City of Philadelphia, and has extensive experience in municipal finance. Mr. Johnson was also a tenured associate professor of finance at Temple University and a research economist with the Federal Reserve Bank of Philadelphia. | |
Herbert I. London | Herbert I. London has served for over 20 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy MLIM funds. Dr. London’s experience as president of the Hudson Institute, an internationally recognized think tank and public policy research organization in Washington D.C., from 1997 to 2011, and in various positions at New York University provide both background and perspective on financial, economic and global issues, which enhance his service on the Board. He has authored several books and numerous articles, which have appeared in major newspapers and journals throughout the United States. | |
Ian A. MacKinnon | Ian A. MacKinnon recently joined as a member of the boards of the funds in the Equity-Liquidity Complex. Mr. MacKinnon spent over 25 years in fixed income investing. He served over 20 years as a portfolio manager at The Vanguard Group and was managing director and head of the Vanguard Fixed Income Group. The Board benefits from the perspective and experience he has gained over 25 years in portfolio management and his expertise in the fixed income markets. Mr. MacKinnon has also served as a board member of the Municipal Securities Rulemaking Board. | |
Cynthia A. Montgomery | Cynthia A. Montgomery has served for over 20 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy MLIM funds. The Board benefits from Ms. Montgomery’s more than 20 years of academic experience as a professor at Harvard Business School where she taught courses on corporate strategy and corporate governance. Ms. Montgomery also has business management and corporate governance experience through her service on the corporate boards of a variety of public companies. She has also authored numerous articles and books on these topics. | |
Joseph P. Platt | Joseph P. Platt has served for over 15 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy BlackRock funds. Mr. Platt currently serves as general partner at Thorn Partners, LP, a private investment company. Prior to his joining Thorn Partners, LP, he was an owner, director and executive vice president with Johnson and Higgins, an insurance broker and employee benefits consultant. He has over 25 years’ experience in the areas of insurance, compensation and benefits. Mr. Platt also serves on the boards of public, private and non-profit companies. |
Directors | Experience, Qualifications and Skills | |
Robert C. Robb, Jr. | Robert C. Robb, Jr. has served for over 15 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy BlackRock funds. Mr. Robb has over 30 years of experience in management consulting and has worked with many companies and business associations located throughout the United States. Mr. Robb brings to the Board a wealth of practical business experience across a range of industries. | |
Toby Rosenblatt | Toby Rosenblatt has served for over 20 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy BlackRock funds. He has served as president and general partner of Founders Investments, Ltd., a private investment limited partnership, since 1999, providing him with relevant experience with the issues faced by investment management firms and their clients. Mr. Rosenblatt has been active in the civic arena and has served as a trustee of a number of community and educational organizations for over 30 years. | |
Kenneth L. Urish | Kenneth L. Urish has served for over 15 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy BlackRock funds. He has over 30 years of experience in public accounting. Mr. Urish has served as a managing member of an accounting and consulting firm. Mr. Urish has been determined by the Audit Committee to be an audit committee financial expert, as such term is defined in the applicable Commission rules. | |
Frederick W. Winter | Frederick W. Winter has served for over 15 years on the boards of registered investment companies, most recently as a member of the boards of the funds in the Equity-Liquidity Complex and its predecessor funds, including the legacy BlackRock funds. The Board benefits from Mr. Winter’s years of academic experience, having served as a professor and dean emeritus of the Joseph M. Katz Graduate School of Business at the University of Pittsburgh since 2005, and dean thereof from 1997 to 2005. He is widely regarded as a specialist in marketing strategy, marketing management, business-to-business marketing and services marketing. He has also served as a consultant to more than 50 different firms. |
Directors | Experience, Qualifications and Skills | |
Interested Directors | ||
Paul L. Audet | Paul L. Audet has a wealth of experience in the investment management industry, including more than 15 years with BlackRock and over 30 years in finance and asset management. His expertise in finance is demonstrated by his positions as Chief Financial Officer of BlackRock and head of BlackRock’s Global Cash Management business. Mr. Audet currently is a member of BlackRock’s Global Operating and Corporate Risk Management Committees, the BlackRock Alternative Investors Executive Committee and the Investment Committee for the Private Equity Fund of Funds. Prior to joining BlackRock, Mr. Audet was the Senior Vice President of Finance at PNC Bank Corp. and Chief Financial Officer of the investment management and mutual fund processing businesses and head of PNC’s Mergers & Acquisitions unit. |
Directors | Experience, Qualifications and Skills | |
Henry Gabbay | Henry Gabbay’s many years of experience in finance provide the Board with a wealth of practical business knowledge and leadership. In particular, Mr. Gabbay’s experience as a Consultant for and Managing Director of BlackRock, Inc., Chief Administrative Officer of BlackRock and President of BlackRock Funds provides the Fund with greater insight into the analysis and evaluation of both its existing investment portfolios and potential future investments as well as enhanced oversight of its investment decisions and investment valuation processes. In addition, Mr. Gabbay’s former positions as Chief Administrative Officer of BlackRock and as Treasurer of certain closed-end funds in the BlackRock Fund Complexes provide the Boards with direct knowledge of the operations of the BlackRock-advised Funds and its investment adviser. Mr. Gabbay’s previous service on and long-standing relationship with the Boards also provide him with a specific understanding of the BlackRock-advised Funds, its operations, and the business and regulatory issues facing the BlackRock-advised Funds. |
Name,
Address
and Year of Birth |
Position(s)
Held with the Fund |
Length
of
Time Served 2 |
Principal
Occupation(s)
During Past Five Years |
Number
of
BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen |
Public
Company and Investment Company Directorships |
|||||
Independent Directors 1 | ||||||||||
David
O. Beim
3
55 East 52nd Street New York, NY 10055 1940 |
Director | 1999 to present | Professor of Professional Practice at the Columbia University Graduate School of Business since 1991; Trustee, Phillips Exeter Academy from 2002 to 2012; Chairman, Wave Hill, Inc. (public garden and cultural center) from 1990 to 2006. | 33 RICs consisting of 107 Portfolios | None | |||||
Ronald
W. Forbes
4
55 East 52nd Street New York, NY 10055 1940 |
Director | 2007 to present | Professor Emeritus of Finance, School of Business, State University of New York at Albany since 2000. | 33 RICs consisting of 107 Portfolios | None | |||||
Dr.
Matina S. Horner
5
55 East 52nd Street New York, NY 10055 1939 |
Director | 2007 to present | Executive Vice President, Teachers Insurance and Annuity Association and College Retirement Equities Fund from 1989 to 2003. | 33 RICs consisting of 107 Portfolios | NSTAR (electric & gas utility) | |||||
Rodney
D. Johnson
4
55 East 52nd Street New York, NY 10055 1941 |
Director | 2007 to present | President, Fairmount Capital Advisors, Inc. from 1987 to 2013; Member of the Archdiocesan Investment Committee of the Archdiocese of Philadelphia from 2004 to 2012; Director, The Committee of Seventy (civic) from 2006 to 2012; Director, Fox Chase Cancer Center from 2004 to 2011. | 33 RICs consisting of 107 Portfolios | None |
Name,
Address
and Year of Birth |
Position(s)
Held with the Fund |
Length
of
Time Served 2 |
Principal
Occupation(s)
During Past Five Years |
Number
of
BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen |
Public
Company and Investment Company Directorships |
|||||
Herbert
I. London
55 East 52nd Street New York, NY 10055 1939 |
Director | 1999 to present | Professor Emeritus, New York University since 2005; John M. Olin Professor of Humanities, New York University from 1993 to 2005 and Professor thereof from 1980 to 2005; President Emeritus, Hudson Institute (policy research organization) from 2011 to 2012, President thereof from 1997 to 2011 and Trustee from 1980 to 2012; Chairman of the Board of Trustees for Grantham University since 2006; Director, InnoCentive, Inc. (global internet service) since 2005; Director, Cerego, LLC (educational software) since 2005; Director, Cybersettle (online adjudication) since 2009; Director, AIMS Worldwide, Inc. (marketing) from 2007 to 2012. | 33 RICs consisting of 107 Portfolios | AIMS Worldwide, Inc. (marketing) | |||||
Ian
A. MacKinnon
55 East 52nd Street New York, NY 10055 1948 |
Trustee | 2012 to present | Director, Kennett Capital, Inc. (investments) since 2006; Director, Free Library of Philadelphia from 1998 to 2008. | 33 RICs consisting of 107 Portfolios | None | |||||
Cynthia
A. Montgomery
55 East 52nd Street New York, NY 10055 1952 |
Director | 2007 to present | Professor, Harvard Business School since 1989; Director, McLean Hospital from 2005 to 2012; Director, Harvard Business School Publishing from 2005 to 2010. | 33 RICs consisting of 107 Portfolios | Newell Rubbermaid, Inc. (manufacturing) | |||||
Joseph
P. Platt
6
55 East 52nd Street New York, NY 10055 1947 |
Director | 2007 to present | Director, Jones and Brown (Canadian insurance broker) since 1998; General Partner, Thorn Partners, LP (private investments) since 1998; Director, WQED Multi-Media (public broadcasting not-for-profit) since 2001; Director, The West Penn Allegheny Health System (a not-for-profit health system) from 2008 to 2013; Partner, Amarna Corporation, LLC (private investment company) from 2002 to 2008. | 33 RICs consisting of 106 Portfolios | Greenlight Capital Re, Ltd. (reinsurance company) | |||||
Robert
C. Robb, Jr.
55 East 52nd Street New York, NY 10055 1945 |
Director | 2007 to present | Partner, Lewis, Eckert, Robb and Company (management and financial consulting firm) since 1981. | 33 RICs consisting of 106 Portfolios | None | |||||
Toby
Rosenblatt
7
55 East 52nd Street New York, NY 10055 1938 |
Director | 2007 to present | President, Founders Investments Ltd. (private investments) since 1999; Director, Forward Management, LLC since 2007; Director, College Access Foundation of California (philanthropic foundation) since 2009; Director, A.P. Pharma, Inc. (specialty pharmaceuticals) from 1983 to 2011; Director, The James Irvine Foundation (philanthropic foundation) from 1998 to 2008. | 33 RICs consisting of 106 Portfolios | None |
Name,
Address
and Year of Birth |
Position(s)
Held with the Fund |
Length
of
Time Served 2 |
Principal
Occupation(s)
During Past Five Years |
Number
of
BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen |
Public
Company and Investment Company Directorships |
|||||
Kenneth
L. Urish
8
55 East 52nd Street New York, NY 10055 1951 |
Director | 2007 to present | Managing Partner, Urish Popeck & Co., LLC (certified public accountants and consultants) since 1976; Immediate past-Chairman of the Professional Ethics Committee of the Pennsylvania Institute of Certified Public Accountants and Committee Member thereof since 2007; Member of External Advisory Board, The Pennsylvania State University Accounting Department since 2001; Trustee, The Holy Family Institute from 2001 to 2010; President and Trustee, Pittsburgh Catholic Publishing Associates from 2003 to 2008; Director, Inter-Tel from 2006 to 2007. | 33 RICs consisting of 107 Portfolios | None | |||||
Frederick
W. Winter
55 East 52nd Street New York, NY 10055 1945 |
Director | 2007 to present | Director, Alkon Corporation (pneumatics) since 1992; Professor and Dean Emeritus of the Joseph M. Katz School of Business, University of Pittsburgh from 2005 to 2013 and Dean thereof from 1997 to 2005; Director, Tippman Sports (recreation) from 2005 to 2013; Director, Indotronix International (IT services) from 2004 to 2008. | 33 RICs consisting of 107 Portfolios | None | |||||
Interested Directors 1,8 | ||||||||||
Paul
L. Audet
55 East 52nd Street New York, NY 10055 1953 |
Director | 2011 to present | Senior Managing Director of BlackRock, Inc. and Head of U.S. Mutual Funds since 2011; Chair of the U.S. Mutual Funds Committee reporting to the Global Executive Committee since 2011; Head of BlackRock’s Real Estate business from 2008 to 2011; Member of BlackRock’s Global Operating and Corporate Risk Management Committees and of the BlackRock Alternative Investors Executive Committee and Investment Committee for the Private Equity Fund of Funds business since 2008; Head of BlackRock’s Global Cash Management business from 2005 to 2010; Acting Chief Financial Officer of BlackRock from 2007 to 2008; Chief Financial Officer of BlackRock from 1998 to 2005. | 143 RICs consisting of 273 Portfolios | None | |||||
Henry
Gabbay
55 East 52nd Street New York, NY 10055 1947 |
Director | 2007 to present | Consultant, BlackRock, Inc. from 2007 to 2008; Managing Director, BlackRock, Inc. from 1989 to 2007; Chief Administrative Officer, BlackRock from 1998 to 2007; President of BlackRock Funds and BlackRock Allocation Target Shares (formerly, BlackRock Bond Allocation Target Shares) from 2005 to 2007 and Treasurer of certain closed-end funds in the BlackRock Fund Complex from 1989 to 2006. | 143 RICs consisting of 273 Portfolios | None |
1 | Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. The Master Large Cap LLC Board has approved one-year extensions in the terms of Directors who turn 72 prior to December 31, 2013. |
2 | Following the combination of Merrill Lynch Investment Managers, L.P. (“MLIM”) and BlackRock, Inc. in September 2006, the various legacy MLIM and legacy BlackRock fund boards were realigned and consolidated into three new fund boards in 2007. As a result, although the chart shows certain Directors as joining the Master Large Cap LLC’s Board in 2007, each Independent Director first became a member of the board of directors of other legacy MLIM or legacy BlackRock Funds as follows: David O. Beim, 1998; Ronald W. Forbes, 1977; Dr. Matina S. Horner, |
2004; Rodney D. Johnson, 1995; Herbert I. London, 1987; Cynthia A. Montgomery, 1994; Joseph P. Platt, Jr., 1999; Robert C. Robb, Jr., 1999; Toby Rosenblatt, 2005; Kenneth L. Urish, 1999; and Frederick W. Winter, 1999. | |
3 | Chairman of the Master Large Cap LLC Performance Committee. |
4 | Co-Chairman of the Master Large Cap LLC Board of Directors. |
5 | Chairman of the Master Large Cap LLC Governance Committee. |
6 | Chairman of the Master Large Cap LLC Compliance Committee. |
7 | Vice-Chairman of the Master Large Cap LLC Performance Committee. |
8 | Chairman of the Master Large Cap LLC Audit Committee. |
9 | Mr. Audet is an “interested person,” as defined in the Investment Company Act, of Master Large Cap LLC based on his position with BlackRock, Inc. and its affiliates. Mr. Gabbay is an “interested person” of Master Large Cap LLC based on his former positions with BlackRock, Inc. and its affiliates as well as his ownership of BlackRock, Inc. and PNC securities. |
Name,
Address
and Year of Birth |
Position(s)
Held with the Fund, Master Bond LLC and Master Large Cap LLC |
Length
of
Time Served 1 |
Principal
Occupation(s)
During Past Five Years |
Number
of
BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen |
Public
Company and Investment Company Directorships |
|||||
Fund Officers | ||||||||||
John
M. Perlowski
55 East 52nd Street New York, NY 10055 1964 |
President and Chief Executive Officer | 2010 to present | Managing Director of BlackRock, Inc. since 2009; Global Head of BlackRock Fund Administration since 2009; Managing Director and Chief Operating Officer of the Global Product Group at Goldman Sachs Asset Management, L.P. from 2003 to 2009; Treasurer of Goldman Sachs Mutual Funds from 2003 to 2009 and Senior Vice President thereof from 2007 to 2009; Director of Goldman Sachs Offshore Funds from 2002 to 2009; Director of Family Resource Network (charitable foundation) since 2009. | 143 RICs consisting of 273 Portfolios | None | |||||
Brendan
Kyne
55 East 52nd Street New York, NY 10055 1977 |
Vice President | 2009 to present | Managing Director of BlackRock, Inc. since 2010; Director of BlackRock, Inc. from 2008 to 2009; Head of Product Development and Management for BlackRock’s U.S. Retail Group since 2009 and Co-head thereof from 2007 to 2009; Vice President of BlackRock, Inc. from 2005 to 2008. | 143 RICs consisting of 273 Portfolios | None | |||||
Neal
J. Andrews
55 East 52nd Street New York, NY 10055 1966 |
Chief Financial Officer | 2007 to present | Managing Director of BlackRock, Inc. since 2006; Senior Vice President and Line of Business Head of Fund Accounting and Administration at PNC Global Investment Servicing (U.S.) Inc. from 1992 to 2006. | 143 RICs consisting of 273 Portfolios | None | |||||
Jay
M. Fife
55 East 52nd Street New York, NY 10055 1970 |
Treasurer | 2007 to present | Managing Director of BlackRock, Inc. since 2007; Director of BlackRock, Inc. in 2006; Assistant Treasurer of MLIM and Fund Asset Management, L.P. advised funds from 2005 to 2006; Director of MLIM Fund Services Group from 2001 to 2006. | 143 RICs consisting of 273 Portfolios | None | |||||
Brian
P. Kindelan
55 East 52nd Street New York, NY 10055 1959 |
Chief Compliance Officer and Anti-Money Laundering Officer | 2007 to present | Chief Compliance Officer of the BlackRock-advised Funds since 2007; Managing Director and Senior Counsel of BlackRock, Inc. since 2005. | 143 RICs consisting of 273 Portfolios | None |
Name,
Address
and Year of Birth |
Position(s)
Held with the Fund, Master Bond LLC and Master Large Cap LLC |
Length
of
Time Served 1 |
Principal
Occupation(s)
During Past Five Years |
Number
of
BlackRock- Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen |
Public
Company and Investment Company Directorships |
|||||
Benjamin
Archibald
55 East 52nd Street New York, NY 10055 1975 |
Secretary | 2012 to present | Managing Director of BlackRock, Inc. since 2014; Director of BlackRock, Inc. from 2010 to 2013; Assistant Secretary of the Fund from 2010 to 2012; General Counsel and Chief Operating Officer of Uhuru Capital Management from 2009 to 2010; Executive Director and Counsel of Goldman Sachs Asset Management from 2005 to 2009. | 61 RICs consisting of 191 Portfolios | None |
1 | Officers of the Fund, Master Bond LLC and Master Large Cap LLC serve at the pleasure of the Board of Directors of the Fund, Master Bond LLC and Master Large Cap LLC, respectively. |
Aggregate
Dollar Range of Equity
Securities in |
||||||
Name of Director 1 | The Fund | Master Bond LLC 2 |
Supervised
Funds |
|||
Interested Directors: | ||||||
Paul L. Audet
|
None | N/A | Over $100,000 | |||
Laurence D.
Fink
|
None | N/A | None 3 | |||
Henry Gabbay
|
None | N/A | Over $100,000 | |||
Independent Directors: | ||||||
James H.
Bodurtha
|
None | N/A | Over $100,000 | |||
Bruce R. Bond
|
None | N/A | Over $100,000 | |||
Donald W.
Burton
|
None | N/A | Over $100,000 | |||
Honorable Stuart E.
Eizenstat
|
None | N/A | Over $100,000 | |||
Kenneth A.
Froot
|
None | N/A | Over $100,000 | |||
Robert M.
Hernandez
|
None | N/A | Over $100,000 | |||
John F.
O’Brien
|
None | N/A | Over $100,000 | |||
Roberta Cooper
Ramo
|
None | N/A | Over $100,000 | |||
David H. Walsh
|
None | N/A | Over $100,000 | |||
Fred G. Weiss
|
None | N/A | Over $100,000 |
1 | Directors of the Fund and Master Bond LLC are eligible to purchase Institutional Shares of the Fund. The Directors anticipate purchasing additional shares of the Supervised Funds in the near future. |
2 | Master Bond LLC does not offer interests for sale to the public. |
3 | As of December 31, 2013, Mr. Fink had invested, in the aggregate, over $100,000 in BlackRock-advised funds, including funds not overseen by him as a Director or Trustee. |
Aggregate Dollar Range of Equity Securities in | ||||
Name of Director | Master Large Cap LLC 1 |
Supervised
Funds |
||
Interested Directors: | ||||
Paul L. Audet
|
N/A | Over $100,000 | ||
Henry Gabbay
|
N/A | $50,001 - $100,000 2 | ||
Independent Directors : | ||||
David O. Beim
|
N/A | Over $100,000 | ||
Ronald W.
Forbes
|
N/A | Over $100,000 | ||
Dr. Matina
Horner
|
N/A | Over $100,000 | ||
Rodney D.
Johnson
|
N/A | Over $100,000 | ||
Herbert I.
London
|
N/A | $50,001 - $100,000 | ||
Ian A.
MacKinnon
|
N/A | Over $100,000 | ||
Cynthia A.
Montgomery
|
N/A | Over $100,000 | ||
Joseph P. Platt,
Jr
|
N/A | Over $100,000 | ||
Robert C. Robb,
Jr
|
N/A | Over $100,000 | ||
Toby Rosenblatt
|
N/A | Over $100,000 | ||
Kenneth L.
Urish
|
N/A | Over $100,000 | ||
Frederick W.
Winter
|
N/A | Over $100,000 |
2 | As of December 31, 2013, Mr. Gabbay had invested, in the aggregate, over $100,000 in BlackRock-advised funds. |
Name 1 |
Aggregate
Compensation from the Fund and Master Bond LLC |
Estimated
Annual
Benefits Upon Retirement |
Aggregate
Compensation from the Fund, Master Bond LLC and Other BlackRock- Advised Funds 1 |
|||
Interested Directors: 2 | ||||||
Paul L. Audet
|
None | None | None | |||
Laurence D.
Fink
|
None | None | None | |||
Henry Gabbay
|
$1,924 | None | $661,563 | |||
Independent Directors: | ||||||
James H.
Bodurtha
3
|
$2,877 | None | $340,000 | |||
Bruce R. Bond
|
$2,679 | None | $305,000 | |||
Donald W.
Burton
|
$2,679 | None | $305,000 | |||
Honorable Stuart E.
Eizenstat
4
|
$2,877 | None | $335,000 | |||
Kenneth A.
Froot
|
$2,679 | None | $305,000 | |||
Robert M.
Hernandez
5
|
$3,330 | None | $420,000 | |||
John F.
O’Brien
|
$2,679 | None | $305,000 | |||
Roberta Cooper
Ramo
|
$2,679 | None | $305,000 | |||
David H.
Walsh
6
|
$2,877 | None | $340,000 | |||
Fred G.
Weiss
7
|
$3,075 | None | $375,000 |
1 | For the number of BlackRock-advised Funds from which each Director receives compensation see the Biographical Information Chart beginning on page I-16 |
2 | Mr. Gabbay began receiving compensation from the Fund and Master Bond LLC for his services as Director effective January 1, 2009. Messrs. Audet and Fink receive no compensation from the Fund or Master Bond LLC for their services as Director. |
3 | Chairman of the Compliance Committee. |
4 | Chairman of the Governance Committee. |
5 | Chairman of the Board of Directors. |
6 | Chairman of the Performance Committee. |
7 | Vice Chairman of the Board of Directors and Chairman of the Audit Committee. |
Name |
Aggregate
Compensation from the Core Portfolio |
Estimated
Annual Benefits Upon Retirement |
Aggregate
Compensation from Master Large Cap LLC and Other BlackRock- Advised Funds 1 |
|||
Independent Directors: | ||||||
David O.
Beim
2
|
$5,367 | None | $340,000 | |||
Ronald W.
Forbes
3
|
$6,249 | None | $388,750 | |||
Dr. Matina
Horner
4
|
$5,367 | None | $340,000 | |||
Rodney D.
Johnson
3
|
$6,249 | None | $388,750 | |||
Herbert I.
London
|
$4,960 | None | $315,000 | |||
Ian MacKinnon
|
$5,006 | None | $320,000 | |||
Cynthia A.
Montgomery
|
$5,006 | None | $320,000 | |||
Joseph P. Platt,
Jr.
5
|
$5,786 | None | $356,250 | |||
Robert C. Robb,
Jr
|
$5,006 | None | $320,000 | |||
Toby Rosenblatt
|
$5,160 | None | $321,250 | |||
Kenneth L.
Urish
6
|
$5,367 | None | $347,500 | |||
Frederick W.
Winter
|
$5,006 | None | $320,000 | |||
Interested Director: | ||||||
Paul L.
Audet
7
|
None | None | None | |||
Henry
Gabbay
8
|
$3,462 | None | $661,563 |
1 | For the number of RICs and Portfolios from which each Independent Director receives compensation, see the Biographical Information chart beginning on page I-23. |
2 | Chairman of the Master Large Cap LLC Performance Oversight Committee. |
3 | Co-Chairman of the Master Large Cap LLC Board of Directors. |
4 | Chair of the Master Large Cap LLC Governance Committee. |
5 | Chairman of the Master Large Cap LLC Compliance Committee. |
6 | Chairman of the Master Large Cap LLC Audit Committee. |
7 | Mr. Audet receives no compensation for his service as a Director. |
8 | Mr. Gabbay began receiving compensation for his service as a Director effective January 1, 2009. |
Fiscal Year Ended September 30, |
Paid
to the
Manager |
Waived
by the
Manager 1 |
||
2013
|
$3,824,235 | $2,826,242 | ||
2012
|
$4,316,133 | $3,096,809 | ||
2011
|
$4,920,817 | $3,611,351 |
Fiscal Year Ended September 30, |
Paid
to the
Manager |
Waived
by the
Manager 1 |
||
2013
|
$2,470,632 | $ 9,736 | ||
2012
|
$2,512,731 | $19,382 | ||
2011
|
$2,653,158 | $45,704 |
Fiscal Year/Period Ended |
Paid
to the
Manager |
Waived
by the
Manager 1 |
||
September 30,
2013
|
$10,773,589 | $19,256 | ||
September 30,
2012
|
$11,473,651 | $ 9,138 | ||
September 30,
2011
|
$15,147,528 | $ 389 |
1 | The Manager may waive a portion of the Core Portfolio’s management fee in connection with the Core Portfolio’s investment in an affiliated money market fund. |
Fiscal Year Ended September 30, | Paid to the Sub-Adviser | |
2013
|
$156,615 | |
2012
|
$912,431 | |
2011
|
$975,352 |
Fiscal Year Ended September 30, | Paid to the Sub-Adviser | |
2013
|
$ 706,241 | |
2012
|
$1,450,191 | |
2011
|
$1,537,134 |
Fiscal Year/Period | Paid to the Sub-Adviser | |
September 30,
2013
|
$ 5,308,139 | |
September 30,
2012
|
$ 9,373,063 | |
September 30,
2011
|
$11,825,701 |
Portfolio Manager | Fund | Applicable Benchmarks | ||
Peter Stournaras,
CFA
|
Core Portfolio | Lipper Large-Cap Core, Lipper Large-Cap Growth and Lipper Large-Cap Value Fund Classifications |
Portfolio Managers | Fund | Applicable Benchmarks | ||
Bob Miller
Rick
Rieder
|
Total Return |
A
combination of market-based indices
(e.g., Barclays U.S. Aggregate Bond Index), certain customized indices and certain fund industry peer groups. |
Portfolio Manager | Dollar Range | |
Peter Stournaras,
CFA
|
None | |
Philip Green
|
None | |
Bob Miller
|
None | |
Rick Rieder
|
None |
Fiscal Year Ended September 30, |
Paid
to
Manager |
|
2013
|
$54,684 | |
2012
|
$25,667 | |
2011
|
$22,476 |
Fiscal Year Ended September 30, |
Paid
to
BNY Mellon 1 |
Paid
to
State Street 1 |
Paid
to the
Manager |
|||
2013
|
$336,170 2 | $186,793 3 | $31,155 | |||
2012
|
N/A | $661,591 | $19,382 | |||
2011
|
N/A | $610,407 | $63,209 |
1 | For providing services to the Total Return Portfolio and each feeder fund which invests its assets in the Total Return Portfolio. |
2 | For the period January 28, 2013 to September 30, 2013. |
3 | For the period October 1, 2012 to January 27, 2013. |
Fiscal Year/Period Ended |
Paid
to
BNY Mellon 1 |
Paid
to
State Street 1 |
Paid
to the
Manager |
|||
September 30,
2013
|
$228,000 2 | $135,961 3 | $21,936 | |||
September 30,
2012
|
N/A | $416,207 | $26,212 | |||
September 30,
2011
|
N/A | $547,342 | $40,545 |
1 | For providing services to the Core Portfolio and each feeder fund which invests its assets in the Core Portfolio. |
2 | For the period January 28, 2013 to September 30, 2013. |
3 | For the period October 1, 2012 to January 27, 2013. |
Investor A Shares | ||||||||
Fiscal
Year Ended
September 30, |
Gross
Sales
Charges Collected |
Sales
Charges
Retained by the Distributor |
Sales
Charges
Paid to Affiliates |
CDSCs
Received
on Redemption of Load-Waived Shares |
||||
2013
|
$158,891 | $12,662 | $12,662 | $ 0 | ||||
2012
|
$ 89,646 | $ 6,832 | $ 6,832 | $ 0 | ||||
2011
|
$ 74,772 | $ 6,186 | $ 6,186 | $25 |
Investor B Shares 1 | ||||
Fiscal
Year
Ended September 30, |
CDSCs
Received by the Distributor |
CDSCs
Paid to Affiliates |
||
2013
|
$ 2,800 | $ 2,800 | ||
2012
|
$ 4,313 | $ 4,313 | ||
2011
|
$11,602 | $11,602 |
Investor C Shares | ||||
Fiscal
Year
Ended September 30, |
CDSCs
Received by the Distributor |
CDSCs
Paid to Affiliates |
||
2013
|
$2,094 | $2,094 | ||
2012
|
$1,930 | $1,930 | ||
2011
|
$ 3,749 | $3,749 |
1 | Additional Investor B CDSCs payable to a distributor may have been waived or converted to a contingent obligation in connection with a shareholder’s participation in certain fee-based programs. |
Class Name |
Paid
to
the Distributor |
|
Investor A
Shares
|
$1,107,548 | |
Investor B
Shares
|
$ 59,628 | |
Investor C
Shares
|
$ 623,065 | |
Class R Shares
|
$ 42,188 |
Investor
A Shares |
|
Net Assets
|
$445,295,356 |
Number of Shares
Outstanding
|
17,736,583 |
Net Asset Value Per Share (net assets divided by
number of shares
outstanding)
|
$25.11 |
Sales Charge (5.25% of offering price;
5.54% of net asset value per
share)
1
|
1.39 |
Offering Price
|
$26.50 |
1 | Rounded to the nearest one-hundredth percent; assumes maximum sales charge is applicable. |
Fiscal Year Ended September 30, |
Aggregate
Brokerage
Commissions Paid |
Commissions
Paid
to Affiliates |
||
2013
|
$0 | $0 | ||
2012
|
$0 | $0 | ||
2011
|
$0 | $0 |
Fiscal Year Ended September 30, |
Aggregate
Brokerage
Commissions Paid |
Commissions
Paid
to Affiliates |
||
2013
|
$ 891,852 | $0 | ||
2012
|
$1,441,151 | $0 | ||
2011
|
$1,015,382 | $0 |
Fiscal Year/Period Ended |
Aggregate
Brokerage
Commissions Paid |
Commissions
Paid
to Affiliates |
||
September 30,
2013
|
$1,070,032 | $0 | ||
September 30,
2012
|
$3,753,097 | $0 |
Fiscal Year/Period Ended |
Aggregate
Brokerage
Commissions Paid |
Commissions
Paid
to Affiliates |
||
September 30,
2011
|
$1,168,763 | $0 |
Amount
of Commissions
Paid to Brokers For Providing Research Services |
Amount
of Brokerage
Transactions Involved |
||||
$0 | $0 |
Regular Broker-Dealer |
Debt
(D)/
Equity (E) |
Aggregate
Holdings (000’s) |
||
Bank of America
Corp.
|
D | $25,843 | ||
HSBC Securities (USA),
Inc.
|
D | $16,305 | ||
CitiGroup Global Markets,
Inc.
|
D | $15,078 | ||
J.P. Morgan Securities
LLC
|
D | $14,020 | ||
Goldman Sachs Group,
Inc.
|
D | $10,178 | ||
Morgan Stanley & Co.,
LLC
|
D | $ 2,652 | ||
Barclays Bank
PLC
|
D | $ 2,452 | ||
BNP Paribas Securities
Corp.
|
D | $ 233 | ||
Credit Suisse Securities
LLC
|
D | $ 135 | ||
Deutsche Bank Securities,
Inc.
|
D | $ 116 | ||
UBS Securities
LLC
|
D | $ 1,283 |
Fiscal Year Ended September 30, |
Amount
Paid |
|
2013
|
$0 | |
2012
|
$0 | |
2011
|
$0 |
Fiscal Year Ended September 30, |
Amount
Paid |
|
2013
|
$0 | |
2012
|
$0 | |
2011
|
$0 |
Fiscal Year/Period Ended |
Amount
Paid |
|
September 30, 2013
|
$ 12,972 | |
September 30, 2012
|
$1,264,206 | |
September 30, 2011
|
$ 33,956 |
Name | Address | % | Class | |||
*Merrill Lynch Pierce Fenner & Smith Incorporated |
4800
Deer Lake Drive East
Jacksonville, FL 32246-6484 |
78.69% | Investor A Shares | |||
*Merrill Lynch Pierce Fenner & Smith Incorporated |
4800
Deer Lake Drive East
Jacksonville, FL 32246-6484 |
81.84% | Investor B Shares | |||
*Merrill Lynch Pierce Fenner & Smith Incorporated |
4800
Deer Lake Drive East
Jacksonville, FL 32246-6484 |
64.92% | Investor C Shares |
Name | Address | % | Class | |||
*Merrill Lynch Pierce Fenner & Smith Incorporated |
4800
Deer Lake Drive East
Jacksonville, FL 32246-6484 |
67.70% | Institutional Shares | |||
*Merrill Lynch Pierce Fenner & Smith Incorporated |
4800
Deer Lake Drive East
Jacksonville, FL 32246-6484 |
45.14% | Class R Shares | |||
*State Street Bank TTEE Cust (FBO) ADP Access |
8515
E. Orchard Rd. 2T2
Greenwood Village, CO 80111 |
35.72% | Class R Shares |
* | Record holder that does not beneficially hold the shares. |
• | Junk bonds may be issued by less creditworthy companies. These securities are vulnerable to adverse changes in the issuer’s industry and to general economic conditions. Issuers of junk bonds may be unable to meet their interest or principal payment obligations because of an economic downturn, specific issuer developments or the unavailability of additional financing. |
• | The issuers of junk bonds may have a larger amount of outstanding debt relative to their assets than issuers of investment grade bonds. If the issuer experiences financial stress, it may be unable to meet its debt obligations. The issuer’s ability to pay its debt obligations also may be lessened by specific issuer developments, or the unavailability of additional financing. Issuers of high yield securities are often in the growth stage of their development and/or involved in a reorganization or takeover. |
• | Junk bonds are frequently ranked junior to claims by other creditors. If the issuer cannot meet its obligations, the senior obligations are generally paid off before the junior obligations, which will potentially limit a Fund’s ability to fully recover principal or to receive interest payments when senior securities are in default. Thus, investors in |
high yield securities have a lower degree of protection with respect to principal and interest payments then do investors in higher rated securities. | |
• | Junk bonds frequently have redemption features that permit an issuer to repurchase the security from a Fund before it matures. If an issuer redeems the junk bonds, a Fund may have to invest the proceeds in bonds with lower yields and may lose income. |
• | Prices of junk bonds are subject to extreme price fluctuations. Negative economic developments may have a greater impact on the prices of junk bonds than on those of other higher rated fixed income securities. |
• | The secondary markets for high yield securities are not as liquid as the secondary markets for higher rated securities. The secondary markets for high yield securities are concentrated in relatively few market makers and participants in the markets are mostly institutional investors, including insurance companies, banks, other financial institutions and mutual funds. In addition, the trading volume for high yield securities is generally lower than that for higher rated securities and the secondary markets could contract under adverse market or economic conditions independent of any specific adverse changes in the condition of a particular issuer. Under certain economic and/or market conditions, a Fund may have difficulty disposing of certain high yield securities due to the limited number of investors in that sector of the market. An illiquid secondary market may adversely affect the market price of the high yield security, which may result in increased difficulty selling the particular issue and obtaining accurate market quotations on the issue when valuing a Fund’s assets. Market quotations on high yield securities are available only from a limited number of dealers, and such quotations may not be the actual prices available for a purchase or sale. When the secondary market for high yield securities becomes more illiquid, or in the absence of readily available market quotations for such securities, the relative lack of reliable objective data makes it more difficult to value a Fund’s securities, and judgment plays a more important role in determining such valuations. |
• | A Fund may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting issuer. |
• | The junk bond markets may react strongly to adverse news about an issuer or the economy, or to the perception or expectation of adverse news, whether or not it is based on fundamental analysis. Additionally, prices for high yield securities may be affected by legislative and regulatory developments. These developments could adversely affect a Fund’s net asset value and investment practices, the secondary market for high yield securities, the financial condition of issuers of these securities and the value and liquidity of outstanding high yield securities, especially in a thinly traded market. For example, federal legislation requiring the divestiture by federally insured savings and loan associations of their investments in high yield bonds and limiting the deductibility of interest by certain corporate issuers of high yield bonds adversely affected the market in the past. |
• | The rating assigned by a rating agency evaluates the issuing agency’s assessment of the safety of a non-investment grade security’s principal and interest payments, but does not address market value risk. Because such ratings of the ratings agencies may not always reflect current conditions and events, in addition to using recognized rating agencies and other sources, the sub-adviser performs its own analysis of the issuers whose non-investment grade securities a Fund holds. Because of this, the Fund’s performance may depend more on the sub-adviser’s own credit analysis than in the case of mutual funds investing in higher-rated securities. |
(a) | U.S. dollar-denominated obligations issued or supported by the credit of U.S. or foreign banks or savings institutions with total assets in excess of $1 billion (including obligations of foreign branches of such banks); |
(b) | high quality commercial paper and other obligations issued or guaranteed by U.S. and foreign corporations and other issuers rated (at the time of purchase) A-2 or higher by S&P, Prime-2 or higher by Moody’s or F-2 or higher by Fitch, as well as high quality corporate bonds rated (at the time of purchase) A or higher by those rating agencies; |
(c) | unrated notes, paper and other instruments that are of comparable quality to the instruments described in (b) above as determined by the Fund’s Manager; |
(d) | asset-backed securities (including interests in pools of assets such as mortgages, installment purchase obligations and credit card receivables); |
(e) | securities issued or guaranteed as to principal and interest by the U.S. Government or by its agencies or authorities and related custodial receipts; |
(f) | dollar-denominated securities issued or guaranteed by foreign governments or their political subdivisions, agencies or authorities; |
(g) | funding agreements issued by highly-rated U.S. insurance companies; |
(h) | securities issued or guaranteed by state or local governmental bodies; |
(i) | repurchase agreements relating to the above instruments; |
(j) | municipal bonds and notes whose principal and interest payments are guaranteed by the U.S. Government or one of its agencies or authorities or which otherwise depend on the credit of the United States; |
(k) | fixed and variable rate notes and similar debt instruments rated MIG-2, VMIG-2 or Prime-2 or higher by Moody’s, SP-2 or A-2 or higher by S&P, or F-2 or higher by Fitch; |
(l) | tax-exempt commercial paper and similar debt instruments rated Prime-2 or higher by Moody’s, A-2 or higher by S&P, or F-2 or higher by Fitch; |
(m) | municipal bonds rated A or higher by Moody’s, S&P or Fitch; |
(n) | unrated notes, paper or other instruments that are of comparable quality to the instruments described above, as determined by the Fund’s Manager under guidelines established by the Board; and |
(o) | municipal bonds and notes which are guaranteed as to principal and interest by the U.S. Government or an agency or instrumentality thereof or which otherwise depend directly or indirectly on the credit of the United States. |
Mortgage-Related Securities. |
1. | Month-end portfolio characteristics are available to shareholders, prospective shareholders, intermediaries and consultants on the fifth calendar day after month-end. 1 |
2. | Fund Fact Sheets, which contain certain portfolio characteristics, are available, in both hard copy and electronically, to shareholders, prospective shareholders, intermediaries and consultants on a monthly or quarterly basis no earlier than the fifth calendar day after the end of a month or quarter. |
3. | Money Market Performance Reports, which contain money market fund performance for the recent month, rolling 12-month average yields and benchmark performance, are available on a monthly basis to shareholders, prospective shareholders, intermediaries and consultants by the tenth calendar day of the month. This information may also be obtained electronically upon request. |
• | Generally, month-end portfolio holdings may be made available to fund shareholders, prospective shareholders, intermediaries, consultants and third party data providers ( e.g. , Lipper, Morningstar and Bloomberg) on the 20th calendar day after the end of each month; except for BlackRock Global Allocation Fund, Inc., BlackRock Long-Horizon Equity Fund, BlackRock Global Allocation Portfolio of BlackRock Series Fund, Inc. and BlackRock Global Allocation V.I. Fund of BlackRock Variable Series Funds, Inc., whose holdings may be made available on the 40th calendar day after the end of the quarter (based on each Fund’s fiscal year end). 1 |
• | Weekly portfolio holdings made available to fund shareholders, prospective shareholders, intermediaries and consultants on the next business day after the end of the weekly period. |
• | Weekly portfolio holdings and characteristics made available to third-party data providers ( e.g. , Lipper, Morningstar, Bloomberg, S&P, Fitch, Moody’s, Crane Data and iMoneyNet, Inc.) on the next business day after the end of the weekly period. |
1. | Fund’s Board of Directors and, if necessary independent Directors’ counsel and Fund counsel |
2. | Fund’s Transfer Agent |
3. | Fund’s Custodian |
4. | Fund’s Administrator, if applicable |
5. | Fund’s independent registered public accounting firm |
1 | The precise number of days specified above may vary slightly from period to period depending on whether specified calendar day falls on a weekend or holiday. |
6. | Fund’s accounting services provider |
7. | Independent rating agencies — Morningstar, Inc., Lipper Inc., S&P, Moody’s, Fitch |
8. | Information aggregators — Markit on Demand, Thomson Financial and Bloomberg, eVestments Alliance, Informa/PSN Investment Solutions, Crane Data, and iMoneyNet |
9. | Sponsors of 401(k) plans that include BlackRock-advised funds — E.I. Dupont de Nemours and Company, Inc. |
10. | Consultants for pension plans that invest in BlackRock-advised funds — Rocaton Investment Advisors, LLC, Mercer Investment Consulting, Callan Associates, Brockhouse & Cooper, Cambridge Associates, Morningstar/Investorforce, Russell Investments (Mellon Analytical Solutions), and Wilshire Associates |
11. | Pricing Vendors — Reuters Pricing Service, Bloomberg, FT Interactive Data (FT IDC), ITG, Telekurs Financial, FactSet Research Systems, Inc., JP Morgan Pricing Direct (formerly Bear Stearns Pricing Service), Standard and Poor’s Security Evaluations Service, Lehman Index Pricing, Bank of America High Yield Index, Loan Pricing Corporation (LPC), LoanX, Super Derivatives, IBOXX Index, Barclays Euro Gov’t Inflation-Linked Bond Index, JPMorgan Emerging & Developed Market Index, Reuters/WM Company, Nomura BPI Index, Japan Securities Dealers Association, Valuation Research Corporate and Murray, Devine & Co., Inc. |
12. | Portfolio Compliance Consultants — Oracle/i-Flex Solutions, Inc. |
13. | Third-party feeder funds — Hewitt Money Market Fund, Hewitt Series Fund, Hewitt Financial Services LLC, Homestead, Inc., Transamerica, State Farm Mutual Fund, Sterling Capital Funds and their respective boards, sponsors, administrators and other service providers |
14. | Affiliated feeder funds — BlackRock Cayman Prime Money Market Fund, Ltd. and BlackRock Cayman Treasury Money Market Fund Ltd., and their respective boards, sponsors, administrators and other service providers |
15. | Other — Investment Company Institute |
$1 million but less than $3
million
|
1.00% |
$3 million but less than $15
million
|
0.50% |
$15 million and
above
|
0.25% |
$1 million but less than $3
million
|
0.75% |
$3 million but less than $15
million
|
0.50% |
$15 million and
above
|
0.25% |
$1 million but less than $3 million
|
0.50% |
$3 million but less than $15
million
|
0.25% |
$15 million and
above
|
0.15% |
Years
Since Purchase
Payment Made |
CDSC
as a Percentage
of Dollar Amount Subject to Charge* |
|
0 – 1
|
4.50% | |
1 – 2
|
4.00% | |
2 – 3
|
3.50% | |
3 – 4
|
3.00% | |
4 – 5
|
2.00% | |
5 – 6
|
1.00% | |
6 and
thereafter
|
None |
Years
Since Purchase
Payment Made |
CDSC
as a Percentage
of Dollar Amount Subject to Charge* |
|
0 – 1
|
4.00% | |
1 – 2
|
4.00% | |
2 – 3
|
3.00% | |
3 – 4
|
3.00% | |
4 – 5
|
2.00% | |
5 – 6
|
1.00% | |
6 and
thereafter
|
None |
* | The percentage charge will apply to the lesser of the original cost of the shares being redeemed or the proceeds of your redemption. Shares acquired through reinvestment of dividends are not subject to a deferred sales charge. Not all BlackRock funds have identical deferred sales charge schedules. If you exchange your shares for shares of another fund, the original charge will apply. |
Aaa | Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk. |
Aa | Obligations rated Aa are judged to be of high quality and are subject to very low credit risk. |
A | Obligations rated A are considered upper-medium grade and are subject to low credit risk. |
Baa | Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics. |
Ba | Obligations rated Ba are judged to be speculative and are subject to substantial credit risk. |
B | Obligations rated B are considered speculative and are subject to high credit risk. |
Caa | Obligations rated Caa are judged to be speculative of poor standing and are subject to very high credit risk. |
Ca | Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest. |
C | Obligations rated C are the lowest rated class and are typically in default, with little prospect for recovery of principal or interest. |
P-1 | Issuers (or supporting institutions) rated Prime-1 have a superior ability to repay short-term debt obligations. |
P-2 | Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay short-term debt obligations. |
P-3 | Issuers (or supporting institutions) rated Prime-3 have an acceptable ability to repay short-term obligations. |
NP | Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating categories. |
MIG 1 | This designation denotes superior credit quality. Excellent protection is afforded by established cash flows, highly reliable liquidity support, or demonstrated broad-based access to the market for refinancing. |
MIG 2 | This designation denotes strong credit quality. Margins of protection are ample, although not as large as in the preceding group. |
MIG 3 | This designation denotes acceptable credit quality. Liquidity and cash-flow protection may be narrow, and market access for refinancing is likely to be less well-established. |
SG | This designation denotes speculative-grade credit quality. Debt instruments in this category may lack sufficient margins of protection. |
VMIG 1 | This designation denotes superior credit quality. Excellent protection is afforded by the superior short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand. |
VMIG 2 | This designation denotes strong credit quality. Good protection is afforded by the strong short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand. |
VMIG 3 | This designation denotes acceptable credit quality. Adequate protection is afforded by the satisfactory short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand. |
SG | This designation denotes speculative-grade credit quality. Demand features rated in this category may be supported by a liquidity provider that does not have an investment grade short-term rating or may lack the structural and/or legal protections necessary to ensure the timely payment of purchase price upon demand. |
• | Likelihood of payment — capacity and willingness of the obligor to meet its financial commitment on an obligation in accordance with the terms of the obligation; |
• | Nature of and provisions of the obligation; |
• | Protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors’ rights. |
AAA | An obligation rated ‘AAA’ has the highest rating assigned by Standard & Poor’s. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong. |
AA | An obligation rated ‘AA’ differs from the highest-rated obligations only to a small degree. The obligor’s capacity to meet its financial commitment on the obligation is very strong. |
A | An obligation rated ‘A’ is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor’s capacity to meet its financial commitment on the obligation is still strong. |
BBB | An obligation rated ‘BBB’ exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. |
BB
B CCC CC C |
Obligations rated ‘BB’, ‘B’, ‘CCC’, ‘CC’, and ‘C’ are regarded as having significant speculative characteristics. ‘BB’ indicates the least degree of speculation and ‘C’ the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions. |
BB | An obligation rated ‘BB’ is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions, which could lead to the obligor’s inadequate capacity to meet its financial commitment on the obligation. |
B | An obligation rated ‘B’ is more vulnerable to nonpayment than obligations rated ‘BB’, but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor’s capacity or willingness to meet its financial commitment on the obligation. |
CCC | An obligation rated ‘CCC’ is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation. |
CC | An obligation rated ‘CC’ is currently highly vulnerable to nonpayment. |
C | A ‘C’ rating is assigned to obligations that are currently highly vulnerable to nonpayment, obligations that have payment arrearages allowed by the terms of the documents, or obligations of an issuer that is the subject of a bankruptcy petition or similar action which have not experienced a payment default. Among others, the ‘C’ rating may be assigned to subordinated debt, preferred stock or other obligations on which cash payments have been suspended in accordance with the instrument’s terms or when preferred stock is the subject of a distressed exchange offer, whereby some or all of the issue is either repurchased for an amount of cash or replaced by other instruments having a total value that is less than par. |
* | The ratings from ‘AA’ to ‘CCC’ may be modified by the addition of a plus (+) or minus (–) sign to show relative standing within the major rating categories. |
D | An obligation rated ‘D’ is in payment default. The ‘D’ rating category is used when payments on an obligation are not made on the date due, unless Standard & Poor’s believes that such payments will be made within five business days, irrespective of any grace period. The ‘D’ rating also will be used upon the filing of a bankruptcy petition or the taking of similar action if payments on an obligation are jeopardized. An obligation’s rating is lowered to ‘D’ upon completion of a distressed exchange offer, whereby some or all of the issue is either repurchased for an amount of cash or replaced by other instruments having a total value that is less than par. |
NR | This indicates that no rating has been requested, that there is insufficient information on which to base a rating, or that Standard & Poor’s does not rate a particular obligation as a matter of policy. |
A-1 | A short-term obligation rated ‘A-1’ is rated in the highest category by Standard & Poor’s. The obligor’s capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor’s capacity to meet its financial commitment on these obligations is extremely strong. |
A-2 | A short-term obligation rated ‘A-2’ is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor’s capacity to meet its financial commitment on the obligation is satisfactory. |
A-3 | A short-term obligation rated ‘A-3’ exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. |
B | A short-term obligation rated ‘B’ is regarded as vulnerable and has significant speculative characteristics. The obligor currently has the capacity to meet its financial commitments; however, it faces major ongoing uncertainties which could lead to the obligor’s inadequate capacity to meet its financial commitments. |
C | A short-term obligation rated ‘C’ is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. |
D | A short-term obligation rated ‘D’ is in payment default. The ‘D’ rating category is used when payments on an obligation are not made on the date due, unless Standard & Poor’s believes that such payments will be made within any stated grace period. However, any stated grace period longer than five business days will be treated as five business days. The ‘D’ rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized. |
• | Amortization schedule — the larger the final maturity relative to other maturities, the more likely it will be treated as a note; and |
• | Source of payment — the more dependent the issue is on the market for its refinancing, the more likely it will be treated as a note. |
Standard & Poor’s municipal short-term note rating symbols are as follows: |
SP-1 | Strong capacity to pay principal and interest. An issue determined to possess a very strong capacity to pay debt service is given a plus (+) designation. |
SP-2 | Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes. |
SP-3 | Speculative capacity to pay principal and interest. |
AAA | Highest credit quality. ‘AAA’ ratings denote the lowest expectation of credit risk. They are assigned only in cases of exceptionally strong capacity for payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events. |
AA | Very high credit quality. ‘AA’ ratings denote expectations of very low credit risk. They indicate very strong capacity for payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events. |
A | High credit quality. ‘A’ ratings denote expectations of low credit risk. The capacity for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to adverse business or economic conditions than is the case for higher ratings. |
BBB | Good credit quality. ‘BBB’ ratings indicate that expectations of credit risk are currently low. The capacity for payment of financial commitments is considered adequate but adverse business or economic conditions are more likely to impair this capacity. |
BB | Speculative. ‘BB’ ratings indicate an elevated vulnerability to credit risk, particularly in the event of adverse changes in business or economic conditions over time; however, business or financial alternatives may be available to allow financial commitments to be met. |
B | Highly speculative. ‘B’ ratings indicate that material credit risk is present. |
CCC | ‘CCC’ ratings indicate that substantial credit risk is present. |
CC | ‘CC’ ratings indicate very high levels of credit risk. |
C | ‘C’ ratings indicate exceptionally high levels of credit risk. |
NR | This designation is used to denote securities not rated by Fitch where Fitch has rated some, but not all, securities comprising an issuance capital structure. |
WD | This designation indicates that the rating has been withdrawn and the issue or issuer is no longer rated by Fitch. |
F1 | Highest short-term credit quality. Indicates the strongest intrinsic capacity for timely payment of financial commitments; may have an added “+” to denote any exceptionally strong credit feature. |
F2 | Good short-term credit quality. Good intrinsic capacity for timely payment of financial commitments. |
F3 | Fair short-term credit quality. The intrinsic capacity for timely payment of financial commitments is adequate. |
B | Speculative short-term credit quality. Minimal capacity for timely payment of financial commitments, plus heightened vulnerability to near term adverse changes in financial and economic conditions. |
C | High short-term default risk. Default is a real possibility. |
RD | Restricted default. Indicates an entity that has defaulted on one or more of its financial commitments, although it continues to meet other financial obligations. Applicable to entity ratings only. |
D | Default. Indicates a broad-based default event for an entity, or the default of a short-term obligation. |
NR | This designation is used to denote securities not rated by Fitch where Fitch has rated some, but not all, securities comprising an issuance capital structure. |
WD | This designation indicates that the rating has been withdrawn and the issue or issuer is no longer rated by Fitch. |
1 Year WMIH Corp. Chart |
1 Month WMIH Corp. Chart |
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