close

Enter

Log in using OpenID

BlackRock Global Allocation Fund

embedDownload
BlackRock Global Allocation Fund
NOT FDIC INSURED – MAY LOSE VALUE – NO BANK GUARANTEE
USR-7321
October 2015
Bank of America Corporation (“Bank of America”) is a financial holding company that, through its
subsidiaries and affiliated companies, provides banking and investment products and other financial
services.
Merrill Lynch, Pierce, Fenner & Smith Incorporated is a wholly-owned subsidiary of Bank of America
Corporation, and a registered broker-dealer and member of FINRA and SIPC.
Investment products provided by Merrill Lynch, Pierce, Fenner & Smith, Incorporated:
Are Not FDIC Insured
Are Not Bank Guaranteed
May Lose Value
The views and opinions expressed in this presentation are not necessarily those of Bank of America
Corporation; Merrill Lynch, Pierce, Fenner & Smith Incorporated; or any affiliates.
Nothing discussed or suggested in these materials should be construed as permission to supersede or
circumvent any Bank of America, Merrill Lynch, Pierce, Fenner & Smith Incorporated policies, procedures,
rules, and guidelines.
USR-7321
Merrill Lynch, Pierce, Fenner & Smith Incorporated are not tax or legal advisors. Clients should consult a
personal tax or legal advisor prior to making any tax or legal related investment decisions.
2
GA_I
BlackRock Global Allocation Fund has delivered on its objective for over 26
years
Our Mission: Provide a rate of return competitive with that of global stocks at a lower level of
volatility over a full market cycle
1/3rd less volatility
Competitive returns
Annualized total return since inception
Annualized standard deviation since inception
12%
18%
10.09%
8%
9.69%
12%
6.76%
4%
15.36%
14.49%
FTSE World Index
S&P 500 Index
9.79%
6%
0%
0%
BlackRock Global
Allocation Fund (I)
FTSE World Index
S&P 500 Index
BlackRock Global
Allocation Fund (I)
Annualized total return as of September 30, 2015
1 Year
5 Years
10 Years
Capture ratios vs. FTSE World since inception
BlackRock Global Allocation Fund (I)
-4.14%
4.97%
6.02%
Upside capture
66%
Performance data quoted represents past performance and does not guarantee future results.
Downside capture
47%
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 blackrock.com/funds to obtain performance
data current to the most recent month-end. Total/Net, annual fund operating expenses, including investment-related expenses as stated in the Fund’s
most recent prospectus are 0.87%/0.78% for Institutional shares. The Fund’s Net annual fund operating expenses including investment-related
expenses, include investment dividend expense, interest expense, acquired fund fees and expenses and certain other fund expenses. Net expenses
also take into account fees which BlackRock has agreed to waive voluntarily. Investment results reflect total fund operating expenses, net of all fees,
waivers and/or expense reimbursements. Please note that BlackRock may discontinue these voluntarily waivers at any time without notice.
3
USR-7321
As of September 30, 2015. Source: BlackRock, Bloomberg. Returns calculated from first full month post inception (February 28, 1989). Fund Inception is February 3, 1989. Returns are net
of fees and include reinvestment of dividends and capital gains. Institutional shares are not available to all investors. Please see prospectus for details. Minimum initial investment for
Institutional shares is $2 million. Institutional shares also are available to clients of registered investment advisors with $250,000 invested in the fund, and offered to participants in various
wrap fee programs and other sponsored arrangements at various minimums. Up capture shows how much the fund gained, relative to a benchmark, when the benchmark rose. Down
capture shows how much the fund lost, relative to the benchmark, when the benchmark decreased. The indexes are unmanaged. It is not possible to invest directly in an index. See
‘Important Notes’ for more information.
What makes the Global Allocation Fund unique?
Incepted in February 1989, partially in response to the October 1987 stock market crash, the strategy is one of the
original global multi-asset portfolios
The team combines a fundamental, bottom-up process with top-down asset allocation in order to find undervalued
investment opportunities around the globe while seeking to mitigate macro risks
Unconstrained in
search of opportunity
 Diversified portfolio invested in 700+
securities across 40+ countries and 30+
currencies
 Combines traditional and non-traditional
asset classes and investments across
the capital structure
 Ability to deviate from benchmark to
capture opportunity and manage risk
Flexibility to adapt as markets change
One of the most experienced
global multi-asset teams*
Proven record of growing &
protecting assets
 50+ person dedicated team with
proven stability
 Compelling risk-adjusted results for
more than 26 years
 Continuous PM management since
fund inception in 1989
 Superior downside capture history
relative to 60/40 portfolios†
 Portfolio managers and senior
investors average over 20 years of
investment experience
 Independent risk management
Experience through
bull & bear markets
Returns in excess of global stocks
and bonds with one-third less
volatility than global stocks‡
As of September 30, 2015. Source: BlackRock, Bloomberg, Morningstar, Zephyr Style Advisor.
* Source: Morningstar. Portfolio managers have the longest tenure among funds within its category.
†
USR-7321
From inception through December 2014, downside capture of the fund relative to the FTSE World Index is 47%. Over the same period, downside capture of a hypothetical portfolio
comprised of 60% Morningstar World Stock category and 40% Morningstar World Bond category is 65%. Returns calculated from first full month post inception (February 28, 1989).
‡
Volatility is measured by standard deviation. From inception through September 2015, annualized standard deviation of the fund is 9.8% and standard deviation of global stocks
(represented by the FTSE World Index) is 15.4%. Standard deviation calculated from first full month post inception (February 28, 1989).
4
USR-7321
Unconstrained in search of opportunity
Ability to invest across the full opportunity set
Benefits of a 50+ person team leveraging BlackRock’s resources:
 Breadth of exposures: Ability to invest in traditional and difficult to access asset classes, regions, countries, and securities
 Exposure to complex strategies: Ability to implement hedging (FX, credit, duration, equity beta), fixed income curve trades
(steepeners, flatteners, forward markets), interest rate swaps, short sales
 Flexibility to trade in real time: Ability to rebalance portfolio as warranted in an attempt to capitalize on security price changes
 Directly holds securities: This is not a “fund of funds” portfolio, securities are purchased and held directly by the fund
•
•
•
•
•
•
•
•
•
•
•
•
Common stock
Preferred stock
Single name options
Index options
Futures
Dividend futures
Warrants
Developed markets
Emerging markets
Frontier markets
American depository receipts
Locally listed shares
Bonds
• U.S. Treasuries and agencies
• Developed market sovereigns
• Emerging markets (USD and
local currency)
• Investment grade corporates
• High yield bonds
• Distressed bonds
• Inflation-linked
• Bank loans
• Interest rate swaps
• Yield curve trades
• Credit default swaps (CDS)
Cash/FX
•
•
•
•
U.S. Treasury bills
Non-U.S. government bills
Foreign exchange forwards
Foreign exchange options
Non-Traditional
•
•
•
•
•
•
Convertible bonds
Private placements
Real estate investment trusts
Precious metals-related securities
Structured notes
Short sales (up to 20% of NAV)
USR-7321
Stocks
As of September 30, 2015. Source: BlackRock.
6
GA_I
Reference benchmark
The reference benchmark serves as a performance standard. It does not, however, represent the team’s entire
investment universe.
 Consistent benchmark since the fund’s inception in 1989: Represents a neutral asset mix and a way to communicate
overweight and underweight positions
 Portfolio is unconstrained relative to benchmark: Asset allocation is driven largely by relative valuations and absolute risk
across asset classes, currencies, sectors, and securities
 Risk is primarily defined as “the chance of permanent loss of capital”: Relative risk measures, such as standard deviation and
beta, are closely monitored, but are not comprehensive risk indicators. The realized volatilities of the fund and reference benchmark
have tracked each other closely across market cycles.
Reference benchmark
Comparable levels of volatility
Annualized standard deviation since inception
16%
12%
36%
24%
S&P 500
FTSE World ex-U.S.
BofA/ML Current 5-Yr U.S. Treasury
Citi Non-USD World Gov't Bond
Neutral asset class allocation
9.3%
6%
Neutral regional allocation
• 60% Stocks
• 60% U.S.
• 40% Bonds
• 40% Non-U.S.
0%
BlackRock Global Allocation Fund (I)
Reference Benchmark
Performance data quoted represents past performance and does not guarantee future results. As of September 30, 2015. Source: BlackRock. Standard deviation is
calculated from first full month post inception (February 28, 1989). The indexes are unmanaged and do not take transaction charges into consideration. It is not possible to invest directly in
an index. Volatility is based on standard deviation, which is a measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. Standard
deviation is also known as historical volatility and is used by investors as a gauge for the amount of expected volatility.
7
USR-7321
24%
9.8%
Flexibility in practice
Portfolio composition
The fund was underweight stocks relative to its
benchmark for most of the 1990s
One of the largest stock overweights
in the fund’s history was H2’01
Cash equivalents have regularly
been held since inception
100%
80%
60%
40%
20%
Stocks
Bonds
Commodity-Related
Cash Equivalents
Jun-15
Jun-14
Jun-13
Jun-12
Jun-11
Jun-10
Jun-09
Jun-08
Jun-07
Jun-06
Jun-05
Jun-04
Jun-03
Jun-02
Jun-01
Jun-00
Jun-99
Jun-98
Jun-97
Jun-96
Jun-95
Jun-94
Jun-93
Jun-92
Jun-91
Jun-90
Benchmark
0%
Benchmark
USR-7321
As of June 30, 2015. Subject to change. The fund is not a “balanced” product, as its weightings are not rigidly adhered to. The fund is actively managed and its characteristics will vary.
Prior to 2015, the fund’s exposure was based on market value and adjusted for the economic value of futures and swaps. From 2015, the fund’s exposure is based on the economic value
of securities and is adjusted for futures, options, swaps and convertible bonds. Prior to 2015, commodity-related exposure, which is comprised of precious metals ETFs, was included in
stocks. Benchmark referred to is the reference benchmark, which consists of 36% S&P 500 Index, 24% FTSE World (ex-U.S.) Index, 24% BofA/ML Current 5-Year U.S. Treasury Index,
16% Citigroup Non-USD World Government Bond Index.
8
Flexibility in practice
Portfolio composition
The team added to U.S. stocks
at attractive valuations after
successfully avoiding the
technology bubble
The team emphasized high-quality
government bonds in response to
tightening spreads and concerns
around financial and household
leverage
The team increased exposure to
commodity-related securities
prior to the global credit crisis
and further added as central
bank balance sheets expanded
The team added to non-U.S.
stocks due to attractive
valuations and accommodative
monetary policies
100%
80%
60%
40%
20%
Emerging Market Stocks
U.S. Credit
Mar-15
Mar-14
Mar-13
Mar-12
Mar-11
Mar-10
Mar-09
Mar-08
Mar-07
Mar-06
Mar-05
Mar-04
Mar-03
Mar-02
Mar-01
Developed Stocks ex-U.S.
U.S. TIPS
Cash Equivalents
Commodity-Related
Non U.S. Sovereign Debt
USR-7321
U.S. Stocks
U.S. Treasuries & Agencies
Non U.S. Credit
Mar-00
Mar-99
Mar-98
Mar-97
Mar-96
Mar-95
0%
As of September 30, 2015. Source: BlackRock. Subject to change. Asset allocation strategies do not assure profit and do not protect against loss. Prior to 2015, the fund’s exposure was
based on market value and adjusted for the economic value of futures and swaps. From 2015, the fund’s exposure is based on the economic value of securities and is adjusted for futures,
options, swaps and convertible bonds. Commodity-related is comprised of precious metals ETFs.
9
* Source: Morningstar. Portfolio managers have the longest tenure among funds within its category.
USR-7321
One of the most experienced global
multi-asset teams*
Global Allocation team
Product Strategist Team
Quantitative Strategy
Randy Berkowitz, CFA*
Sam Indyawan, CFA*
Oscar Pulido, CFA
Matt Estes
Brian Miller, CFA
Noah Kroll
Meghan Colarusso, CFA
Simon Rafferty
Melissa Barnett
Marketing Strategy &
Communications
Judy Rice
Erica Quinn, CFA
Matt Callahan
Chris Strayer
Senior Investors
Ben Moyer, CFA
34 years experience
Eric Mitofsky
32 years experience
Kate Brady Rauscher, CFA
29 years experience
Lisa Walker, CFA
29 years experience
Asia Pacific Investments,
Industrials, Autos
Quantitative Analysis
Derivatives, Risk Management
Equity & Fixed Income
Utilities, Renewable Power,
Insurance
Equity & Fixed Income
Financial Services, Banks
Greg Spencer
Investment Group Leader
26 years experience
Equity & Fixed Income
Telecom, Consumer,
Financials, Media, Transports,
Insurance
David Clayton, CFA, JD
Investment Group Leader
25 years experience
Equity & Fixed Income
Energy, Real Estate, Autos,
Industrials, Insurance,
Materials, Utilities
Portfolio Management
Dan Chamby, CFA
Portfolio Manager
27 years experience
Dennis Stattman, CFA
Portfolio Manager
35 years experience
Aldo Roldan, Ph.D
Portfolio Manager
31 years experience
Mike Trudel, CFA, JD
Global Strategist
18 years experience
Asset Allocation &
Investment Strategy
Asset Allocation &
Investment Strategy
Asset Allocation &
Investment Strategy
Macro Strategy & Analysis
Senior Investors
Mike Walsh, CFA
Investment Group Leader
24 years experience
Fixed Income, Derivatives
Analysts
Daniel Daniel, CFA, CMT
18 years experience
Equity & Fixed Income
Information Technology,
Technical Analysis
Portfolio
Transactions
Marie Dwyer
Mike Carlucci
Pete Mathern
Kim Moore
Andy Nielsen
Doug Smith
Ariana Berry, JD* – Private Placements, Distressed Debt
Randy Berkowitz, CFA* – Healthcare
Kevin Bynum, CFA – Fixed Income / Fx
Miguel Crivelli, CFA – Financials
Martin Fransson, Ph.D, CFA – Materials, Precious Metals
Matt Gerard – Energy, Real Estate
Sam Indyawan, CFA* – Generalist
Lindsay Klitsch, CFA – Consumer
Matt Litwin, CFA – Energy
Jonathan Lux, CFA – Industrials
Chirayu Patel, CFA – Materials
Reid Ross, CFA – Autos
Sonia Wang, CFA – Japan, Healthcare
Angela Yu, CFA – China, Information Technology
Senior Investors
Patrick Edelmann, CFA
Investment Group Leader
16 years experience
Equity & Fixed Income
Healthcare, Industrials,
Information Technology
Kent Hogshire, CFA
Investment Group Leader
15 years experience
Equity & Fixed Income
Industrials, Transports,
Macro Strategy
Portfolio
Administration
Nicole Apostol
Christine Garvey
Lisa Gill
Wendy Held
Lisa Peterson
USR-7321
Kevin McKenna, co-COO
32 years experience
Lisa O’Donnell, JD, co-COO
28 years experience
Cheryl Domenech
Ariana Berry, JD*
Ken DaPonte
Team Development, Risk,
Operations, Compliance
As of September 30, 2015.
* Dual role.
11
Investment process combines security selection & asset allocation
 Flexible, price-sensitive process seeks opportunities across broad investment universe
 Significant team interaction and knowledge sharing
Top-Down Asset Allocation
Top-down overlay applied with relative value comparison among and within asset classes
 Evaluates the relative
attractiveness of
securities within various
global market sectors
and asset classes
 Securities evaluated
based on expected
risk/return profiles
 Ongoing research of
over 1,000 companies
Security
Selection
Buy/Sell
Approval
 Based on fundamental
research, not
benchmark composition
 Analysts conduct
independent research
and rate securities
 Valuation screens
include EV/EBITDA,
P/E, P/CF, P/B, and a
large variety of other
metrics
 Process is designed to
give individual analysts
discretion to make
incremental changes in
the portfolio
 Proprietary tools
facilitate information
sharing
 Initial security purchases
typically involve PM
approval/collaboration
Portfolio
Construction
Monitoring
 Typically +700 securities
across 40+ countries
 Partnership with firm’s
internal risk team (RQA)
 No min/max industry or
country constraints.
 Stress testing
 Max 35% in non-IG FI
 Risk alignment
 Attribution analysis
 Derivatives primarily
used to hedge against
adverse market
movements
 Turnover 30-50% per
annum
USR-7321
Bottom-up
Research
As of September 30, 2015. Current process for selecting investments in the fund’s portfolio in accordance with its stated investment objectives and policies. Subject to change based on
market conditions, portfolio manager’s opinion and other factors.
12
Risk & Quantitative Analysis (RQA) provides objectivity & independence
• RQA monitors dozens of active risk
factors globally on a continuous
basis
• Helps Global Allocation team ensure
the portfolio is not unintentionally
overexposed to specific top-down
factors
Risk
Assessment
Stress
Testing
• Risk cannot (and should not) be
entirely eliminated, but it can – and
must be – identified
• Allows the PM team to pro-actively
estimate how changes in identified
market prices affect the portfolio in
relative and absolute terms
• Enables team to quantify portfolio
effects of specific market scenarios
rather, than relying on intuition
RQA
• Comprehensive portfolio attribution
includes country, sector, currency,
and individual security analysis
Performance
Attribution
Risk
Alignment
• In addition to traditional purchases
and sales, derivatives can be used to
hedge away undesired top-down
exposures
USR-7321
• Review cumulative effect of
investment decisions to identify
factors contributing to, and
subtracting from, alpha generation
• Regularly scheduled meetings
between RQA and Global Allocation
team help ensure current portfolio
positioning is consistent with team’s
market views
As of September 30, 2015.
13
USR-7321
Proven record of growing & protecting assets
GA_I
The benefits of active management
Seeking to grow & protect over the long term (Inception through September 2015)
1300%
BlackRock Global
Allocation Fund (I)
Higher Return/Lower Volatility
Higher Return/Higher Volatility
Large Cap U.S. Stocks
1100%
Emerging Market Stocks
Cumulative Return
900%
Small Cap U.S. Stocks
U.S. Convertibles
700%
U.S. High Yield
Morningstar World
Allocation Category
U.S. Credit Reference Benchmark*
10-Year Treasury Bonds
500%
300%
5-Year Treasury
Bonds
100%
Cash
U.S. CPI
Global Gov't
Bonds
Asia-ex Japan Stocks
Global Stocks
European Stocks
Non-U.S. Gov't Bonds
Gold
Non-U.S. Stocks
Commodities
Japanese Stocks
-100%
Lower Return/Lower Volatility
0%
5%
Lower Return/Higher Volatility
10%
15%
Risk (Ann. Standard Deviation)
20%
25%
Morningstar. Returns calculated from first full month post inception (February 28, 1989). Returns are net of fees and include reinvestment of dividends and capital gains. Morningstar
category returns are based on total return and do not reflect sales charges. The indexes are unmanaged and do not take transaction charges into consideration. It is not possible to invest
directly in an index. See ‘Important Notes’ for index descriptions.
* Reference benchmark consists of 36% S&P 500 Index, 24% FTSE World (ex-U.S.) Index, 24% BofA/ML Current 5-Year U.S. Treasury Index, 16% Citigroup Non-USD World Government
Bond Index.
15
USR-7321
Performance data quoted represents past performance and does not guarantee future results. As of September 30, 2015. Source: BlackRock, Bloomberg, Lipper,
GA_I
Experience that has weathered bull & bear markets
Cumulative total returns
250%
210.43%
200%
150%
134.84%
100%
50%
32.58%
2.62%
0%
-2.84%
-50%
BlackRock Global Allocation Fund (I)
Reference Benchmark*
FTSE World Index
Citigroup World Gov't Bond Index
Morningstar World Allocation Category
Technology
Bubble
2000 - 2002
2.62%
-16.88%
-39.56%
20.19%
-7.72%
Global Market
Recovery
2003 - 2007
134.84%
79.67%
133.92%
39.03%
97.54%
Global Credit
Crisis
2008 - 2009
-2.84%
-6.87%
-20.59%
13.71%
-13.39%
Global Easing
Cycle
2010 - 9/30/15
32.58%
41.61%
50.44%
6.20%
22.18%
Combined Period
2000 - 9/30/15
210.43%
96.95%
68.66%
101.85%
92.90%
Morningstar. Returns are net of fees and include reinvestment of dividends and capital gains. Index performance is shown for illustrative purposes only. It is not possible to invest directly in
an index.
* Reference benchmark consists of 36% S&P 500 Index, 24% FTSE World (ex-U.S.) Index, 24% BofA/ML Current 5-Year U.S. Treasury Index, 16% Citigroup Non-USD World Government
Bond Index.
16
USR-7321
Performance data quoted represents past performance and does not guarantee future results. As of September 30, 2015. Source: BlackRock, Bloomberg,
USR-7321
Current portfolio positioning and performance
Portfolio snapshot as of September 30, 2015
Stocks: 56% (Underweight)
Asset allocation (as % of net assets*)
Overweight:
20%
 Regions: Japan, Emerging Markets
 Sectors: Healthcare, Energy, Telecommunications,
Materials, Industrials
Underweight:
 Regions: U.S.
26%
2%
10%
 Sectors: Consumer Staples, Consumer Discretionary,
Financials, Technology, Utilities
12%
30%
U.S. Stocks
Non-U.S. Stocks
U.S. Bonds
Non-U.S. Bonds
Commodity-Related
Cash Equivalents
Bonds: 22% (Underweight)
Overweight:
 Corporates, Emerging Market Debt
Underweight:
 U.S. Treasuries, Japanese Government Bonds,
European Sovereign Debt
Currency allocation (as % of net assets)
1%
6% 2%1%
2%
5%
7%
Commodity-Related: 2% (Overweight)
 Precious metal ETFs
Cash Equivalents: 20% (Overweight)
76%
U.S. Dollar
Euro
British Pound Sterling
Other Europe
Japanese Yen
Other Asia
Latin America
Rest of the World
As of September 30, 2015. Subject to change. The fund is actively managed and its characteristics will vary. Overweight/underweight indicators are relative to fund’s reference benchmark,
which consists of 36% S&P 500 Index, 24% FTSE World (ex-U.S.) Index, 24% BofA/ML Current 5-Year U.S. Treasury Index, 16% Citigroup Non-USD World Government Bond Index.
* % of net assets represents the fund’s exposure based on the economic value of securities and is adjusted for futures, options, swaps and convertible bonds.
18
USR-7321
 Actively managed, both USD and non-USD
GA_I
Performance as of September 30, 2015
Annualized total returns
10%
Morningstar Analyst Rating™
5%
0%
Morningstar has awarded the fund a Gold
rating, its highest level of conviction
(effective 1/13/15). See ‘Important Notes’
for additional information.
-5%
-10%
BlackRock Global Allocation Fund (I)
Reference Benchmark*
FTSE World Index
Citigroup World Gov't Bond Index
Morningstar World Alloc. Category
YTD†
-3.60%
-3.56%
-6.34%
-2.37%
-5.58%
1 Year
-4.14%
-2.98%
-5.81%
-3.83%
-6.23%
3 Years
4.66%
4.84%
7.91%
-2.85%
2.95%
5 Years
4.97%
5.97%
7.78%
-0.16%
4.27%
10 Years
6.02%
5.32%
5.27%
3.38%
4.33%
15 Years
7.47%
4.79%
3.94%
4.98%
4.77%
The performance depicted above is for the BlackRock Global Allocation Fund (Institutional). Returns are net of fees and 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.
* Reference benchmark consists of 36% S&P 500 Index, 24% FTSE World (ex-U.S.) Index, 24% BofA/ML Current 5-Year U.S. Treasury Index, 16% Citigroup Non-USD World Government
Bond Index.
† Periods less than 1 year are not annualized.
19
USR-7321
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 blackrock.com/funds to obtain performance data current to the most recent month-end.
Total/Net, annual fund operating expenses, including investment-related expenses as stated in the Fund’s most recent prospectus are 0.87%/0.78% for
Institutional shares. The Fund’s Net annual fund operating expenses including investment-related expenses, include investment dividend expense,
interest expense, acquired fund fees and expenses and certain other fund expenses. Net expenses also take into account fees which BlackRock has
agreed to waive voluntarily. Investment results reflect total fund operating expenses, net of all fees, waivers and/or expense reimbursements. Please
note that BlackRock may discontinue these voluntarily waivers at any time without notice. As of September 30, 2015. Source: BlackRock, Bloomberg, Morningstar.
USR-7321
So what do I do with my money?®
GA_I
Global Allocation Fund has provided growth over the long-term
Hypothetical performance of $10,000 (Inception through September 2015)
$150,000
$128,693
$120,000
$90,000
$67,290
$65,851
$56,975
$60,000
$46,065
$30,000
$24,264
2015
2013
2011
2009
2007
2005
2003
2001
1999
1997
1995
1993
1991
1989
$0
BlackRock Global Allocation Fund (I)
Reference Benchmark*
FTSE World Index
Citigroup World Gov't Bond Index
Morningstar World Allocation Category
Cash (BofA/ML 3-month T Bill Index)
Morningstar. This illustration is based on an initial hypothetical investment of $10,000 in Institutional shares made first full month post inception (February 28, 1989). Returns are net of fees
and include reinvestment of dividends and capital gains. Index performance is shown for illustrative purposes only. It is not possible to invest directly in an index.
* Reference benchmark consists of 36% S&P 500 Index, 24% FTSE World (ex-U.S.) Index, 24% BofA/ML Current 5-Year U.S. Treasury Index, 16% Citigroup Non-USD World Government
Bond Index.
21
USR-7321
Performance data quoted represents past performance and does not guarantee future results. As of September 30, 2015. Source: BlackRock, Bloomberg,
GA_I
Global Allocation Fund has served as a source of income
 $100,000 invested in BlackRock Global Allocation Fund (I) on February 28, 1989
 Annual withdrawals increased by 3% each year to account for inflation
Inflation-adjusted withdrawal scenario for $100,000 investment in Global Allocation
$1,400,000
Withdrawal Rate
$1,200,000
$1,000,000
Total Withdrawals
Ending Value
$0
$1,336,167
̶ ̶ ̶ 4%
$154,045
$828,266
̶ ̶ ̶ 6%
$231,308
$574,025
̶ ̶ ̶ 8%
$299,966
$328,587
̶ ̶ ̶ Buy & Hold
$800,000
$600,000
$400,000
$200,000
$0
Feb-89
Feb-91
Feb-93
Feb-95
Feb-97
Feb-99
Feb-01
Feb-03
Feb-05
Feb-07
Feb-09
Feb-11
Feb-13
depicted above is for the BlackRock Global Allocation Fund (Institutional). Returns are net of fees and include reinvestment of dividends and capital gains. Methodology: Each example
assumes a $100,000 investment at first full month post inception (February 28, 1989) and a lump sum withdrawal on December 31 of every year until 2014. The size of the initial withdrawal
is equal to the withdrawal rate times the initial investment, and each year that amount is increased by 3% to account for inflation. Does not consider taxes. Results are hypothetical and will
vary based on selection of other time frames and over time as assumptions change. These figures are for illustrative purposes only.
22
USR-7321
Performance data quoted represents past performance and does not guarantee future results. As of December 31, 2014. Source: BlackRock. The performance
GA_I
Global Allocation Fund has improved the risk-adjusted return of a portfolio
Adding Global Allocation to a balanced portfolio (Inception through September 2015)
10.5%
100% BlackRock Global
Allocation Fund (I)
Annualized Return
9.5%
8.5%
50% / 50%
7.5%
100% Balanced Portfolio*
6.5%
 Build and test your own allocation at gachallenge.com
5.5%
9.50%
9.75%
10.00%
10.25%
Performance data quoted represents past performance and does not guarantee future results. As of September 30, 2015. Source: BlackRock, Morningstar. Returns
calculated from first full month post inception (February 28, 1989). The performance depicted above is for the BlackRock Global Allocation Fund (Institutional). Returns are net of fees and
include reinvestment of dividends and capital gains.
* Balanced portfolio is based on an allocation of 60% Morningstar World Stock category and 40% Morningstar World Bond category, rebalanced annually.
23
USR-7321
Risk (Ann. Standard Deviation)
What makes the Global Allocation Fund unique?
Unconstrained in
search of opportunity
 Diversified portfolio invested in 700+
securities across 40+ countries and 30+
currencies
 Combines traditional and non-traditional
asset classes and investments across
the capital structure
 Ability to deviate from benchmark to
capture opportunity and manage risk
Flexibility to adapt as markets change
One of the most experienced
global multi-asset teams*
Proven record of growing &
protecting assets
 50+ person dedicated team with
proven stability
 Compelling risk-adjusted results for
more than 26 years
 Continuous PM management since
fund inception in 1989
 Superior downside capture history
relative to 60/40 portfolios†
 Portfolio managers and senior
investors average over 20 years of
investment experience
 Independent risk management
Experience through
bull & bear markets
Returns in excess of global stocks
and bonds with one-third less
volatility than global stocks‡
As of September 30, 2015. Source: BlackRock, Bloomberg, Morningstar, Zephyr Style Advisor.
* Source: Morningstar. Portfolio managers have the longest tenure among funds within its category.
†
USR-7321
From inception through December 2014, downside capture of the fund relative to the FTSE World Index is 47%. Over the same period, downside capture of a hypothetical portfolio
comprised of 60% Morningstar World Stock category and 40% Morningstar World Bond category is 65%. Returns calculated from first full month post inception (February 28, 1989).
‡
Volatility is measured by standard deviation. From inception through September 2015, annualized standard deviation of the fund is 9.8% and standard deviation of global stocks
(represented by the FTSE World Index) is 15.4%. Standard deviation is calculated from first full month post inception (February 28, 1989).
24
Important notes
USR-7321
Index and Morningstar Peer Group Descriptions: Indexes are unmanaged. You cannot invest directly in an index. Morningstar Peer Group:
Refers to Morningstar World Allocation Category. Cash: BofA/ML U.S. Treasury Bill 3-Month Index, an unmanaged index based on the value of a 3-month
Treasury bill assumed to be purchased at the beginning of the month and rolled into another single issue at the end of the month. U.S. Consumer Price
Index (CPI): a statistical time-series measure of a weighted average of prices of a specified set of goods and services purchased by consumers. It is a
price index that tracks the prices of a specified basket of consumer goods and services, providing a measure of inflation. The CPI is a fixed quantity price
index and considered by some a cost-of-living index. Commodities: S&P Goldman Sachs Commodity Index, a composite index of commodity sector
returns, representing an unleveraged, long-only investment in commodity futures that is broadly diversified across the spectrum of commodities. U.S.
Convertibles: BofA/ML All U.S. Convertible Bond Index, a market capitalization-weighted index of domestic U.S. corporate convertible securities including
mandatory convertible preferreds. Gold: S&P GSCI Gold Index, a sub-index of the S&P GSCI, provides investors with a reliable and publicly available
benchmark tracking the COMEX gold future. 5-Year Treasury Bonds and 10-Year Treasury Bonds: BofA/ML 5-Year U.S. Treasury Bond Index and
BofA/ML 10-Year U.S. Treasury Bond Index, respectively, are unmanaged indices designed to track the total return of the current coupon 5-year U.S.
Treasury bonds and 10-year U.S. Treasury bonds. U.S. Treasury securities are direct obligations of the U.S. government and are backed by the “full faith
and credit” of the U.S. government if held to maturity. U.S. Credit: Barclays U.S. Credit Index, an unmanaged index considered representative of publicly
issued, SEC-registered U.S. corporate and specified foreign debentures and secured notes. U.S. High Yield: Barclays U.S. High Yield Index, which covers
the universe of fixed rate, non-investment-grade debt. Non-U.S. Government Bonds: Citigroup Non-U.S. Dollar World Government Bond Index, an
unmanaged, market-capitalization-weighted index that tracks 10 government bond indices, excluding the United States. Global Government Bonds:
Citigroup World Government Bond Index, which includes the most significant and liquid government bond markets globally that carry at least an investment
grade rating. Currently, this includes all countries in the Citigroup EMU Governments Index (EGBI) and Australia, Canada, Denmark, Japan, Sweden,
Switzerland, United Kingdom and the United States. Index weights are based on the market capitalization of qualifying outstanding debt stocks. Global
Stocks: The FTSE World Index, a broad based capitalization weighted index comprised of 2,200 equities from 24 countries in 12 regions, including the
United States. Large Cap U.S. Stocks: S&P 500 Index, which covers 500 of the largest companies of the U.S. markets (mostly NYSE issues). The
unmanaged index represents about 75% of NYSE market capitalization and 30% of NYSE issues. Small Cap U.S. Stocks: Russell 2000 Index, a marketweighted index composed of approximately 2,000 common stocks issued by small-capitalization U.S. companies in a range of businesses. Non-U.S.
Stocks: MSCI EAFE Index, a broad market cap-weighted index composed of large- and mid-capitalization developed market equities, excluding the U.S.
and Canada. European Stocks: MSCI Europe Index, an unmanaged index considered representative of stocks in developed European countries.
Japanese Stocks: MSCI Japan Index, an unmanaged index considered representative of stocks in Japan. Asia ex-Japan Stocks: MSCI Pac-X Japan
Index, an unmanaged index considered representative of stocks of Asia Pacific countries excluding Japan. Emerging Market Stocks: MSCI Emerging
Markets Index, an unmanaged index considered representative of stocks in developing countries.
25
Important notes
Principal risks: The fund is actively managed and its characteristics will vary. Stock and bond values fluctuate in price so the value of your
investment can go down depending on market conditions. International investing involves special risks including, but not limited to currency
fluctuations, illiquidity and volatility. These risks may be heightened for investments in emerging markets. Fixed income risks include interest rate
and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond
issuer will not be able to make principal and interest payments. Non-investment grade debt securities (high yield/junk bonds) may be subject to
greater market fluctuations, risk of default or loss of income and principal than higher-rated securities. Asset allocation strategies do not assure
profit and do not protect against loss. Short selling entails special risks. If the fund makes short sales in securities that increase in value, the fund
will lose value. Any loss on short positions may or may not be offset by investing short sale proceeds in other investments. The fund may use
derivatives to hedge its investments or to seek to enhance returns. Derivatives entail risks relating to liquidity, leverage and credit that may reduce
returns and increase volatility.
The Morningstar Analyst Rating is not a credit or risk rating. It is a subjective evaluation performed by the manager research analysts of Morningstar. Morningstar evaluates funds based on five
key pillars, which are process, performance, people, parent, and price. Analysts use this five pillar evaluation to determine how they believe funds are likely to perform over the long term on a
risk-adjusted basis. They consider quantitative and qualitative factors in their research, and the weighting of each pillar may vary. The Analyst Rating scale is Gold, Silver, Bronze, Neutral,
Negative. A Morningstar Analyst Rating of Gold, Silver, or Bronze reflect an Analyst’s conviction in a fund’s prospects for outperformance. Analyst Ratings are continuously monitored and
reevaluated at least every 14 months. The Morningstar Analyst Rating should not be used as the sole basis in evaluating a mutual fund. Morningstar Analyst Ratings involve unknown risks and
uncertainties which may cause Morningstar's expectations not to occur or to differ significantly from what we expected. For more detailed information about Morningstar's Analyst Rating,
including its methodology, please go to http://corporate.morningstar.com/us/ documents/MethodologyDocuments/AnalystRatingforFundsMethodology.pdf.
You should consider the investment objectives, risks, charges and expenses of the fund carefully before investing. The prospectus and
summary prospectus contain this and other information about the fund and are available, along with information on other BlackRock funds,
by calling 800-882-0052 or at blackrock.com/funds. The prospectus and, if available, the summary prospectus should be read carefully
before investing.
USR-7321
Prepared by BlackRock Investments, LLC, member FINRA.
© 2015 BlackRock, Inc. All rights reserved. BLACKROCK and SO WHAT DO I DO WITH MY MONEY are registered trademarks of BlackRock, Inc. or its subsidiaries in
the United States and elsewhere. All other trademarks are those of their respective owners.
26
Author
Document
Category
Uncategorized
Views
30
File Size
840 KB
Tags
1/--pages
Report inappropriate content