Multi-Asset Class Investing: BlackRock Global Allocation Fund

[Pages:10]Multi-Asset Class Investing: BlackRock Global Allocation Fund

Oscar D. Pulido, CFA Managing Director Senior Product Specialist

May 2012

FOR FINANCIAL PROFESSIONAL USE ONLY ? Not to be shown or distributed to clients.

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BlackRock Global Allocation Fund: Portfolio Construction

Asset allocation is driven largely by relative valuations and absolute risk across asset classes, currencies, sectors and securities

Entire asset classes, countries, and/or sectors can be omitted based on valuations

Internal reference benchmark serves as a neutral asset mix and performance standard

? Created to reflect global opportunity set, does not necessarily reflect our perception of value at a given point in time ? The portfolio can deviate significantly from the reference benchmark ? Benchmark has remained consistent since inception

Internal Reference Benchmark

Universe of Securities

16%

36%

24%

24%

S&P 500 FTSE World ex-US BoA ML Current 5-Yr US Treasury Citigroup Non-USD World Gov't Bond

Neutral asset class allocation ? 60% Equity ? 40% Fixed Income

Neutral regional allocation ? 60% US ? 40% Non-US

In addition to conventional securities, the portfolio has the flexibility to invest in:

? Private placements ? High yield fixed income ? Distressed fixed income ? Convertible fixed income ? Inflation-linked bonds ? Emerging market debt ? Preferred equity ? Equity and fixed income index futures ? Structured products ? Options & Warrants ? Real estate investment trusts (REITS) ? Precious metal-related securities ? Short sales (up to 20% of NAV)

As of March 31, 2012. Subject to change. This fund is not a "balanced" product, as its weightings are not rigidly adhered to. The fund is actively managed and its characteristics will vary. The Internal Reference Benchmark consists of 36% S&P 500, 24% FTSE World (ex US), 24% BofA ML Current 5-Year US Treasury Index, 16% Citigroup Non-USD World Government Bond Index.

FOR FINANCIAL PROFESSIONAL USE ONLY ? Not to be shown or distributed to clients. 2

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BlackRock Global Allocation Fund: Flexibility in Practice

Flexible investment style offers opportunities in a variety of market environments

Cash is actively managed

? Cash assets may be diversified across global currencies: not solely USD-denominated ? Cash is currently considered primarily "zero duration" fixed income

The chart demonstrates management's allocation strategy since inception, highlighting the fund's flexibility and active management

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

BM Dec-89 Jun-90 Dec-90 Jun-91 Dec-91 Jun-92 Dec-92 Jun-93 Dec-93 Jun-94 Dec-94 Jun-95 Dec-95 Jun-96 Dec-96 Jun-97 Dec-97 Jun-98 Dec-98 Jun-99 Dec-99 Jun-00 Dec-00 Jun-01 Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11

Equities

Fixed Income

Cash

Benchmark

As of December 31, 2011. Source: BlackRock. Subject to change. This fund is not a "balanced" product, as its weightings are not rigidly adhered to. The fund is actively managed and its characteristics will vary. Benchmark referred to is the Internal Reference Benchmark, which consists of 36% S&P 500, 24% FTSE World (ex US), 24% BofA ML Current 5-Year US Treasury Index, 16% Citigroup Non-USD World Government Bond Index.

FOR FINANCIAL PROFESSIONAL USE ONLY ? Not to be shown or distributed to clients. 3

GA_7

BlackRock Global Allocation Fund: Flexibility in Practice

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Portfolio composition by asset class (March 2006 to December 2011)

Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11

US Equities US Treasuries & Agencies Non US Credit

Non US Developed Equities US TIPS Cash Equivalents

Non US Emerging Equities US Credit

Precious Metals-Related Non US Sovereign Debt

As of December 31, 2011. Source: BlackRock. Subject to change. Asset allocation strategies do not assure profit and do not protect against loss. US credit includes US convertible bonds and US corporate bonds net of credit default swaps.

FOR FINANCIAL PROFESSIONAL USE ONLY ? Not to be shown or distributed to clients. 4

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BlackRock Global Allocation Fund: Flexibility in Practice

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% -10%

Portfolio composition by net currency exposure (March 2006 to December 2011)

Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11

US Dollar Japanese Yen Other Asia British Pound Sterling Euro Other Europe Latin America Rest of the World

As of December 31, 2011. Source: BlackRock. Subject to change. Asset allocation strategies do not assure profit and do not protect against loss.

FOR FINANCIAL PROFESSIONAL USE ONLY ? Not to be shown or distributed to clients. 5

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BlackRock Global Allocation Fund: A Diversified Fund Designed to Perform in all Market Conditions

Cumulative Total Returns (January 2000 to March 2012)

180% 150% 120%

Technology Bubble

Global Market Recovery

134.84%

Global Credit Crisis

Combined Period

169.39%

90%

60%

30%

2.62% 0%

11.78%

-30%

-60%

BlackRock Global Allocation (Institutional) Internal Reference Benchmark FTSE World Index Citigroup World Gov't Bond Index Lipper Global Flexible Category Avg.

1/1/2000 - 12/31/2002 2.62% -16.88% -39.56% 20.19% -10.16%

1/1/2003 - 12/31/2007 134.84% 79.67% 133.92% 39.03% 112.94%

1/1/2008 - 3/31/2012 11.78% 11.52% -6.23% 26.53% -0.93%

1/1/2000 - 3/31/2012 169.39% 66.54% 32.39% 111.48% 99.86%

Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Refer to funds to obtain performance data current to the most recent month-end.

Source: Lipper, Bloomberg. Total returns are cumulative, based on NAV and do not include sales charges. Returns include reinvestment of dividends and capital gains. Other classes of shares with differing fees and expenses are available. Index performance is shown for illustrative purposes only. It is not possible to invest directly in an index.

FOR FINANCIAL PROFESSIONAL USE ONLY ? Not to be shown or distributed to clients. 6

Adding BlackRock Global Allocation Fund to a Moderate Portfolio

Global Allocation has enhanced portfolio returns with lower levels of risk

11

100% BlackRock Global Allocation (I)

BlackRock Global Allocation Instl

10% Moderate Allocation & 90% MALOX 10

20% Moderate Allocation & 80% MALOX

30% Moderate Allocation & 70% MALOX

9 50%/ 50%

40% Moderate Allocation & 60% MALOX 50% Moderate Allocation & 50% MALOX

60% Moderate Allocation & 40% MALOX

8

70% Moderate Allocation & 30% MALOX

80% Moderate Allocation & 20% MALOX

90% Moderate Allocation & 10% MALOX

7

Moderate Allocation

100% Moderate Allocation

Return

6

9.4

9.6

9.8

10

10.2

10.4

10.6

Risk

As of December 31, 2011. Source Zephyr Style Advisor, BlackRock. Returns calculated from first full month post inception (February 28, 1989). The returns for the Global Allocation Fund are shown at NAV. Had sales charges been included the returns would have been lower. The indexes are unmanaged and do not take transaction charges into consideration. It is not possible to invest directly in an index. * Moderate Allocation is based on an allocation of 60% MSCI All Country World Index and 40% Citigroup World Government Bond Index rebalanced quarterly. BlackRock Global Allocation A and Moderate Allocation are rebalanced quarterly.

FOR FINANCIAL PROFESSIONAL USE ONLY ? Not to be shown or distributed to clients. 7

BlackRock Global Allocation Fund: Portfolio Snapshot as of March 31, 2012

Equity Strategy (64% ~ Overweight)

? Overweight: ? Regions: Asia (Japan & Asia-ex Japan) and Latin America ? Sectors: Materials, Energy, Telecom Services, Healthcare, Information Technology, and Utilities

? Underweight: ? Regions: Europe and US ? Sectors: Financials, Consumer Staples, Consumer Discretionary, and Industrials

Fixed Income Strategy (24% ~ Underweight)

? Overweight: ? Convertibles (4%) and Corporates (4%)

? Underweight: ? Nominal US Treasuries, Japanese Government Bonds, and European Sovereign Debt

Cash (12% ~ Overweight)

? Actively managed, both USD and non-USD

Asset Allocation (as % of Net Assets) 12%

14%

10% 29%

35%

US Equties Non-US Equities US Fixed Income Non-US Fixed Income Cash

Currency Allocation (as % of Net Assets)

4% 4% 3% 6% 3%

10%

6%

64%

US Dollar Japanese Yen Other Asia British Pound Sterling Euro Other Europe Latin America Rest of the World

As of March 31, 2012. Note: Portfolio allocation subject to change. The asset allocations illustrated are shown as a percentage of net assets. Asset allocation strategies do not assure profit and do not protect against loss. Overweight/underweight indicators are relative to fund's Internal Reference Benchmark, which consists of 36% S&P 500, 24% FTSE World (ex US), 24% BofA ML Current 5-Year US Treasury Index, 16% Citigroup Non-USD World Government Bond Index.

FOR FINANCIAL PROFESSIONAL USE ONLY ? Not to be shown or distributed to clients. 8

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