REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 | ☒ |
Pre-Effective Amendment No. | □ |
Post-Effective Amendment No. 49 | ☒ |
INVESTMENT COMPANY ACT OF 1940 | ☒ |
Amendment No. 51 | ☒ |
Counsel for the Fund: | |
Margery
K. Neale, Esq.
Willkie Farr & Gallagher LLP 787 Seventh Avenue New York, New York 10019-6099 |
Benjamin
Archibald, Esq.
BlackRock Advisors, LLC 55 East 52nd Street New York, New York 10055 |
Fund Overview | Key facts and details about the Fund listed in this prospectus, including investment objectives, principal investment strategies, principal risk factors, fee and expense information and historical performance information | |
|
3 | |
|
3 | |
|
4 | |
|
4 | |
|
5 | |
|
6 | |
|
6 | |
|
7 | |
|
9 | |
|
9 |
Account Information | Information about account services, sales charges and waivers, shareholder transactions, and distributions and other payments | |
|
17 | |
|
20 | |
|
25 | |
|
26 | |
|
32 | |
|
33 | |
|
33 | |
|
34 |
Management of the Fund | Information about BlackRock and the Portfolio Managers | |
|
36 | |
|
37 | |
|
38 | |
|
38 | |
|
40 |
Financial Highlights |
Financial Performance of the
Fund
|
41 |
Glossary |
Glossary of Investment
Terms
|
48 |
For More Information |
|
Inside Back Cover |
|
Back Cover |
Shareholder
Fees
(fees paid directly from your investment) |
Investor
A
Shares |
Investor
B
Shares |
Investor
C
Shares |
Institutional
Shares |
Class
R
Shares |
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, whichever is lower) | None 1 | 4.50% 2 | 1.00% 3 | 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 |
Management Fee 4 | 0.55% | 0.55% | 0.55% | 0.55% | 0.55% |
Distribution and/or Service (12b-1) Fees | 0.25% | 1.00% | 1.00% | None | 0.50% |
Other Expenses | 0.16% | 0.19% | 0.14% | 0.16% | 0.22% |
Acquired Fund Fees and Expenses 5 | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% |
Total Annual Fund Operating Expenses 5 | 0.97% | 1.75% | 1.70% | 0.72% | 1.28% |
Fee Waivers and/or Expense Reimbursements 4 | — | — | — | — | — |
Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements 4 | 0.97% | 1.75% | 1.70% | 0.72% | 1.28% |
1 | A contingent deferred sales charge (“CDSC”) of 1.00% is assessed on certain redemptions of Investor A Shares made within 18 months after purchase where no initial sales charge was paid at time of purchase as part of an investment of $1,000,000 or more. |
2 | The CDSC 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” in the Fund’s prospectus for the complete schedule of CDSCs.) |
3 | There is no CDSC on Investor C Shares after one year. |
4 | As described in the “Management of the Fund” section of the Fund’s prospectus beginning on page 36, BlackRock has contractually agreed to waive the management fee with respect to any portion of the Fund’s assets estimated to be attributable to investments in other equity and fixed-income mutual funds and exchange-traded funds managed by BlackRock or its affiliates that have a contractual management fee through November 30, 2017. The contractual agreement may be terminated upon 90 days’ notice by a majority of the non-interested trustees of the Fund or by a vote of a majority of the outstanding voting securities of the Fund. |
5 | The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Fund’s most recent annual report which does not include Acquired Fund Fees and Expenses. |
1 Year | 3 Years | 5 Years | 10 Years | |
Investor A Shares | $619 | $818 | $1,033 | $1,652 |
Investor B Shares | $628 | $901 | $1,149 | $1,856 |
Investor C Shares | $273 | $536 | $ 923 | $2,009 |
Institutional Shares | $ 74 | $230 | $ 401 | $ 894 |
Class R Shares | $130 | $406 | $ 702 | $1,545 |
1 Year | 3 Years | 5 Years | 10 Years | |
Investor B Shares | $178 | $551 | $949 | $1,856 |
Investor C Shares | $173 | $536 | $923 | $2,009 |
■ | 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. |
■ | Equity Securities Risk — Stock markets are volatile. The price of equity securities 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. |
■ | Income Producing Stock Availability Risk — Depending upon market conditions, income producing common stock that meets the Fund’s investment criteria may not be widely available and/or may be highly concentrated in only a few market sectors. This may limit the ability of the Fund to produce current income while remaining fully diversified. |
■ | 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. |
■ | 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. |
As
of 12/31/15
Average Annual Total Returns |
1 Year | 5 Years | 10 Years |
BlackRock Equity Dividend Fund — Investor A Shares | |||
Return Before Taxes | (5.62)% | 8.63% | 6.66% |
Return After Taxes on Distributions | (9.14)% | 7.10% | 5.50% |
Return After Taxes on Distributions and Sale of Fund Shares | (0.35)% | 6.64% | 5.09% |
BlackRock Equity Dividend Fund — Investor B Shares | |||
Return Before Taxes | (4.89)% | 8.69% | 6.57% |
BlackRock Equity Dividend Fund — Investor C Shares | |||
Return Before Taxes | (1.92)% | 9.03% | 6.46% |
BlackRock Equity Dividend Fund — Institutional Shares | |||
Return Before Taxes | (0.10)% | 10.10% | 7.53% |
BlackRock Equity Dividend Fund — Class R Shares | |||
Return Before Taxes | (0.67)% | 9.46% | 6.91% |
Russell
1000
®
Value Index
(Reflects no deduction for fees, expenses or taxes) |
(3.83)% | 11.27% | 6.16% |
Standard
& Poor’s (S&P) 500
®
Index
(Reflects no deduction for fees, expenses or taxes) |
1.38% | 12.57% | 7.31% |
Name |
Portfolio
Manager
of the Fund Since |
Title |
Robert M. Shearer, CFA | 2001 | Managing Director of BlackRock, Inc. |
Tony DeSpirito | 2014 | Managing Director of BlackRock, Inc. |
David J. Cassese, CFA | 2011 | 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. |
There
is no minimum initial investment for employer-sponsored retirement plans (not including SEP IRAs, SIMPLE IRAs or SARSEPs), state sponsored 529 college savings plans, collective trust funds, investment companies or other pooled investment vehicles,
unaffiliated thrifts and unaffiliated banks and trust companies, each of which may purchase shares of the Fund through a Financial Intermediary that has entered into an agreement with the Fund’s distributor to purchase such shares.
|
$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. |
■ | Borrowing — The Fund may borrow from banks as a temporary measure for extraordinary or emergency purposes, or to meet redemptions. |
■ | Debt Securities — This includes fixed income securities issued by companies, as well as U.S. and foreign sovereign debt obligations. When choosing debt securities, Fund management considers various factors including the credit quality of issuers and yield analysis. The Fund may invest in debt securities that are rated investment grade of any maturity. |
■ | Derivative Transactions — The Fund may use derivatives to hedge its investment portfolio against market, interest rate and currency risks or to seek to enhance its return. The derivatives that the Fund may use include indexed and inverse securities, options, futures, swaps and forward foreign exchange transactions. |
■ | 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. 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 based on the change in a specified interest rate or equity index (an “indexed security”). The Fund may also invest in securities the return of which is inversely related to changes in an interest rate or index (“inverse securities”). In general, the return on inverse securities will decrease when the underlying index or interest rate goes up and increase when that index or interest rate goes down. |
■ | 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. |
■ | 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. |
■ | Rights — The Fund may purchase securities pursuant to the exercise of subscription rights, which allow an issuer’s existing shareholders to purchase additional common stock at a price substantially below the market price of the shares. |
■ | 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-term Securities — The Fund will normally invest a portion of its assets in short-term debt securities, money market securities, including repurchase agreements, or cash. The Fund invests in such securities or cash when Fund management is unable to find enough attractive long-term investments to reduce exposure to stocks when Fund management believes it is advisable to do so or to meet redemptions. Except during temporary defensive periods, such investments will not exceed 20% of the Fund’s assets. |
■ | 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 Purposes — The Fund reserves the right to hold, as a temporary defensive measure or as a reserve for redemptions, short-term U.S. Government securities, money market securities, including repurchase agreements, or cash in such proportions as, in the opinion of BlackRock, prevailing market or economic conditions warrant. Except during temporary defensive periods, such securities or cash will not exceed 20% of its total assets. Although the Fund will make temporary defensive investments only to the extent that Fund management believes they present less risk than the Fund’s usual investments, temporary defensive investments may limit the Fund’s ability to achieve its investment objective. |
■ | Warrants — A warrant gives the Fund the right to buy stock. The warrant specifies the amount of underlying stock, the purchase (or “exercise”) price, and the date the warrant expires. The Fund has no obligation to exercise the warrant and buy the stock. A warrant has value only if the Fund is able to exercise it or sell it before it expires. |
■ | 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. |
■ | 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. |
■ | 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. |
■ | Income Producing Stock Availability Risk — Depending upon market conditions, income producing common stock that meets the Fund’s investment criteria may not be widely available and/or may be highly concentrated in only a few market sectors. This may limit the ability of the Fund to produce current income while remaining fully diversified. |
■ | 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. |
■ | 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. |
■ | 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. |
■ | Debt Securities Risk — Debt securities, such as bonds, involve credit risk. Credit risk is the risk that the borrower will not make timely payments of principal and interest. 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. Debt securities are also subject to interest rate risk. Interest rate risk is the risk that the value of a debt security may fall when interest rates rise. In general, the market price of debt securities with longer maturities will go up or down more in response to changes in interest rates than the market price of shorter term securities. The Fund may be subject to a greater risk of rising interest rates due to the current period of historically low rates. |
■ | Derivatives Risk — The Fund’s use of derivatives may increase its costs, reduce the Fund’s returns and/or increase volatility. Derivatives 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 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 Internal Revenue Service (“IRS”). |
Regulatory Risk — Derivative contracts, including, without limitation, swaps, currency forwards and non-deliverable forwards, are subject to regulation under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) in the U.S. and under comparable regimes in Europe, Asia and other non-U.S. jurisdictions. Under the Dodd-Frank Act, certain derivatives will become subject to margin requirements and swap dealers will be required to collect margin from the Fund with respect to such derivatives. Implementation of such regulations under the Dodd-Frank Act regarding clearing, mandatory trading and margining of swaps and other derivatives may increase the costs to the Fund of trading in these instruments and, as a result, may affect returns to investors in the Fund. |
In December 2015, the Securities and Exchange Commission (“SEC”) proposed a new rule to regulate the use of derivatives by registered investment companies, such as the Fund. If the rule goes into effect, it could limit the ability of the Fund to invest or remain invested in derivatives. In addition, other future regulatory developments may impact the Fund’s ability to invest or remain invested in certain derivatives. Legislation or regulation may also change the way in which the Fund itself is regulated. BlackRock cannot predict the effects of any new governmental regulation that may be implemented on the ability of the Fund to use swaps or any other financial derivative product, and there can be no assurance that any new governmental regulation will not adversely affect the Fund’s ability to achieve its investment objective. |
■ | 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, including ETFs, 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 not offset by BlackRock through waivers to the Fund’s management fees). 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 to greater risk and increase its costs. As an open-end investment company registered with 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. |
■ | 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. |
■ | Repurchase Agreements and Purchase and Sale Contracts Risk — 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. |
■ | Rights Risk — The failure to exercise subscription rights to purchase common stock would result in the dilution of the Fund’s interest in the issuing company. The market for such rights is not well developed, and, accordingly, the Fund may not always realize full value on the sale of rights. |
■ | 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. |
■ | Small Cap Securities Risk — Small cap 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 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 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 securities may be particularly sensitive to changes in interest rates, borrowing costs and earnings. Investing in small cap 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. |
■ | Valuation Risk — The price the Fund could receive upon the sale of any particular portfolio investment may differ from the Fund’s valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair valuation methodology or a price provided by an independent pricing service. As a result, the price received upon the sale of an investment may be less than the value ascribed by the Fund, and the Fund could realize a greater than expected loss or lesser than expected gain upon the sale of the investment. Pricing services that value fixed-income securities generally utilize a range of market-based and security-specific inputs and assumptions, as well as considerations about general market conditions, to establish a price. Pricing services generally value fixed-income securities assuming orderly transactions of an institutional round lot size, but may be held or transactions may be conducted in such securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots. The Fund’s ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third-party service providers. |
■ | Warrants Risk — If the price of the underlying stock does not rise above the exercise price before the warrant expires, the warrant generally expires without any value and the Fund will lose any amount it paid for the warrant. Thus, investments in warrants may involve substantially more risk than investments in common stock. Warrants may trade in the same markets as their underlying stock; however, the price of the warrant does not necessarily move with the price of the underlying stock. |
■ | 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:
• Individuals and “Institutional Investors,” which include, but are not limited to, endowments, foundations, family offices, local, city, and state governmental institutions, corporations and insurance company separate accounts, who may purchase shares of the Fund through a Financial Intermediary that has entered into an agreement with the Distributor to purchase such shares. • Employer-sponsored retirement plans (not including SEP IRAs, SIMPLE IRAs or SARSEPs), state sponsored 529 college savings plans, collective trust funds, investment companies or other pooled investment vehicles, unaffiliated thrifts and unaffiliated banks and trust companies, each of which may purchase shares of the Fund through a Financial Intermediary that has entered into an agreement with the Distributor to purchase such shares. • Employees, officers and directors/trustees of BlackRock or its affiliates. • Participants in certain programs sponsored by BlackRock or its affiliates or other Financial Intermediaries. |
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. |
There
is no investment minimum for:
• Employer-sponsored retirement plans (not including SEP IRAs, SIMPLE IRAs or SARSEPs), state sponsored 529 college savings plans, collective trust funds, investment companies or other pooled investment vehicles, unaffiliated thrifts and unaffiliated banks and trust companies. • Employees, officers and directors/trustees of BlackRock or its affiliates. |
• $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. |
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% |
$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 1.00% 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 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-adviser, 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. |
■ | Individuals and “Institutional Investors” with a minimum initial investment of $2 million who may purchase shares of the Fund through a Financial Intermediary that has entered into an agreement with the Distributor to purchase such shares; |
■ | Investors of Financial Intermediaries that: (i) charge such investors a fee for advisory, investment consulting, or similar services or (ii) have entered into an agreement with the Distributor to offer Institutional Shares through a no-load program or investment platform, in each case, with a minimum initial investment of $1,000; |
■ | Employer-sponsored retirement plans (not including SEP IRAs, SIMPLE IRAs or SARSEPs), state sponsored 529 college savings plans, collective trust funds, investment companies or other pooled investment vehicles, unaffiliated thrifts and unaffiliated banks and trust companies, each of which is not subject to any minimum initial investment and may purchase shares of the Fund through a Financial Intermediary that has entered into an agreement with the Distributor to purchase such shares; |
■ | 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, who are not subject to any minimum initial investment; |
■ | Holders of certain BofA Corp. sponsored UITs who reinvest dividends received from such UITs in shares of the Fund, who are not subject to any minimum initial investment; and |
■ | Employees, officers and directors/trustees of BlackRock, Inc., BlackRock Funds, BofA Corp., PNC, Barclays or their respective affiliates, who are not subject to any minimum initial investment. |
■ | Answering customer inquiries regarding account status and history, the manner in which purchases, exchanges and redemptions or repurchases of shares may be effected and certain other matters pertaining to the customers’ investments; |
■ | Assisting customers in designating and changing dividend options, account designations and addresses; and |
■ | Providing other similar shareholder liaison services. |
Your Choices | Important Information for You to Know | |
Add to Your Investment (continued) | 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.
|
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.
|
|
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
the 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.
|
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.
|
Selling shares held directly with BlackRock |
Methods
of Redeeming
|
Your Choices | Important Information for You to Know | |
Full or Partial Redemption of Shares (continued) | Selling shares held directly with BlackRock (continued) |
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.
Redemption proceeds may be paid by check or, if the Fund has verified banking information on file, through ACH or by wire transfer. The Fund reserves the right to reinvest any dividend or distribution amounts (e.g., income dividends or capital gains) which you have elected to receive by check should your check be returned as undeliverable or remain uncashed for more than 6 months. No interest will accrue on amounts represented by uncashed checks. Your check will be reinvested in your account at the net asset value next calculated, on the day of the investment. When reinvested, those amounts are subject to the risk of loss like any Fund investment. If you elect to receive distributions in cash and a check remains undeliverable or uncashed for more than 6 months, your cash election may also be changed automatically to reinvest and your future dividend and capital gains distributions will be reinvested in the Fund at the net asset value as of the date of payment of the distribution. |
Your Choices | Important Information for You to Know | |
Full or Partial Redemption of Shares (continued) | Selling shares held directly with BlackRock (continued) |
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
or 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.
|
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.
|
Your Choices | Important Information for You to Know | |
Transfer Shares to Another Financial Intermediary (continued) | 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. |
Systematic
Withdrawal Plan
(“SWP”) (continued) |
This feature can be used by investors who want to receive regular distributions from their accounts. (continued) |
through
the SWP that do not exceed 12% of the account’s net asset value on an annualized basis. For example, monthly, quarterly, and semi-annual SWP redemptions of Investor A, Investor B or Investor C Shares will not be subject to the CDSC if they do
not exceed 1%, 3% and 6%, respectively, of an account’s net asset value on the redemption date. SWP redemptions of Investor A, Investor B or Investor C Shares in excess of this limit will still pay any applicable CDSC.
|
Reinstatement Privilege | If you redeem Investor A or Institutional Shares, and within 60 days buy new Investor A Shares of the same or another BlackRock Fund (equal to all or a portion of the redemption amount), you will not pay a sales charge on the new purchase amount. This right may be exercised once a year and within 60 days of the redemption, provided that the Investor A Share class of that fund is currently open to new investors or the shareholder has a current account in that closed fund. Shares will be purchased at the net asset value calculated at the close of trading on the day the request is received. To exercise this privilege, the Fund must receive written notification from the shareholder of record or the Financial Intermediary of record, at the time of purchase. Investors should consult a tax adviser concerning the tax consequences of exercising this reinstatement privilege. |
■ | 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 as may be permitted 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. |
Average Daily Net Assets |
Rate
of
Management Fee |
Not exceeding $8 billion | 0.60% |
In excess of $8 billion but not more than $10 billion | 0.56% |
In excess of $10 billion but not more than $12 billion | 0.54% |
In excess of $12 billion but not more than $17 billion | 0.52% |
In excess of $17 billion but not more than $25 billion | 0.51% |
In excess of $25 billion but not more than $30 billion | 0.50% |
In excess of $30 billion but not more than $40 billion | 0.47% |
In excess of $40 billion | 0.45% |
Average Daily Net Assets |
Rate
of
Management Fee |
Not exceeding $8 billion | 0.60% |
In excess of $8 billion but not more than $10 billion | 0.56% |
In excess of $10 billion but not more than $12 billion | 0.54% |
In excess of $12 billion but not more than $17 billion | 0.52% |
In excess of $17 billion but not more than $25 billion | 0.51% |
In excess of $25 billion but not more than $30 billion | 0.50% |
In excess of $30 billion but not more than $40 billion | 0.49% |
In excess of $40 billion | 0.48% |
Portfolio Manager | Primary Role | Since | Title and Recent Biography |
Robert M. Shearer, CFA | Jointly and primarily responsible for the day-to-day management of the Fund’s portfolio, including setting the Fund’s overall investment strategy and overseeing the management of the Fund. | 2001 | Managing Director of BlackRock, Inc. since 2006. |
Tony DeSpirito | Jointly and primarily responsible for the day-to-day management of the Fund’s portfolio, including setting the Fund’s overall investment strategy and overseeing the management of the Fund. | 2014 | Managing Director of BlackRock, Inc. since 2014; Managing Principal, Portfolio Manager and Member of the Executive Committee of Pzena Investment Management from 2009 to 2014. |
David J. Cassese, CFA | Jointly and primarily responsible for the day-to-day management of the Fund’s portfolio, including setting the Fund’s overall investment strategy and overseeing the management of the Fund. | 2011 | Director of BlackRock, Inc. since 2011; Senior Vice President of Oppenheimer Capital from 2008 to 2011; Vice President of Oppenheimer Capital from 2005 to 2008. |
Institutional | |||||
Year Ended July 31, | |||||
2016 | 2015 | 2014 | 2013 | 2012 | |
Per Share Operating Performance | |||||
Net asset value, beginning of year | $ 24.94 | $ 24.71 | $ 22.64 | $ 19.52 | $ 18.17 |
Net investment income 1 | 0.44 | 0.47 | 0.48 | 0.48 | 0.43 |
Net realized and unrealized gain | 0.79 | 1.34 | 2.10 | 3.12 | 1.34 |
Net increase from investment operations | 1.23 | 1.81 | 2.58 | 3.60 | 1.77 |
Distributions: 2 | |||||
From net investment income | (0.45) | (0.48) | (0.49) | (0.47) | (0.41) |
From net realized gain | (3.39) | (1.10) | (0.02) | (0.01) | (0.01) |
Total distributions | (3.84) | (1.58) | (0.51) | (0.48) | (0.42) |
Net asset value, end of year | $ 22.33 | $ 24.94 | $ 24.71 | $ 22.64 | $ 19.52 |
Total Return 3 | |||||
Based on net asset value | 6.29% | 7.55% | 11.49% | 18.63% | 9.90% |
Ratios to Average Net Assets | |||||
Total expenses | 0.71% 4 | 0.70% | 0.70% | 0.73% | 0.71% |
Total expenses after fees waived | 0.69% 4 | 0.69% | 0.70% | 0.72% | 0.70% |
Net investment income | 2.00% | 1.86% | 2.00% | 2.28% | 2.34% |
Supplemental Data | |||||
Net assets, end of year (000) | $11,620,763 | $13,242,101 | $14,595,350 | $14,610,283 | $11,068,796 |
Portfolio turnover rate | 25% | 25% | 6% | 15% | 3% |
1 | Based on average shares outstanding. |
2 | Distributions for annual periods determined in accordance with federal income tax regulations. |
3 | Where applicable, assumes the reinvestment of distributions. |
4 | Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
Year
Ended
July 31, 2016 |
|
Investments in underlying funds | 0.01% |
Investor A | |||||
Year Ended July 31, | |||||
2016 | 2015 | 2014 | 2013 | 2012 | |
Per Share Operating Performance | |||||
Net asset value, beginning of year | $ 24.88 | $ 24.65 | $ 22.59 | $ 19.48 | $ 18.13 |
Net investment income 1 | 0.39 | 0.40 | 0.42 | 0.42 | 0.38 |
Net realized and unrealized gain | 0.79 | 1.33 | 2.09 | 3.11 | 1.34 |
Net increase from investment operations | 1.18 | 1.73 | 2.51 | 3.53 | 1.72 |
Distributions: 2 | |||||
From net investment income | (0.39) | (0.40) | (0.43) | (0.41) | (0.36) |
From net realized gain | (3.39) | (1.10) | (0.02) | (0.01) | (0.01) |
Total distributions | (3.78) | (1.50) | (0.45) | (0.42) | (0.37) |
Net asset value, end of year | $ 22.28 | $ 24.88 | $ 24.65 | $ 22.59 | $ 19.48 |
Total Return 3 | |||||
Based on net asset value | 6.07% | 7.25% | 11.19% | 18.31% | 9.63% |
Ratios to Average Net Assets | |||||
Total expenses | 0.96% 4 | 0.97% | 0.95% | 0.99% | 0.98% |
Total expenses after fees waived | 0.93% 4 | 0.96% | 0.95% | 0.99% | 0.98% |
Net investment income | 1.76% | 1.61% | 1.75% | 2.03% | 2.09% |
Supplemental Data | |||||
Net assets, end of year (000) | $5,951,054 | $7,226,833 | $10,115,394 | $10,573,927 | $8,582,557 |
Portfolio turnover rate | 25% | 25% | 6% | 15% | 3% |
1 | Based on average shares outstanding. |
2 | Distributions for annual periods determined in accordance with federal income tax regulations. |
3 | Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
4 | Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
Year
Ended
July 31, 2016 |
|
Investments in underlying funds | 0.01% |
Investor B | |||||
Year Ended July 31, | |||||
2016 | 2015 | 2014 | 2013 | 2012 | |
Per Share Operating Performance | |||||
Net asset value, beginning of year | $25.11 | $ 24.86 | $ 22.76 | $ 19.62 | $ 18.25 |
Net investment income 1 | 0.24 | 0.22 | 0.24 | 0.28 | 0.24 |
Net realized and unrealized gain | 0.78 | 1.33 | 2.11 | 3.12 | 1.34 |
Net increase from investment operations | 1.02 | 1.55 | 2.35 | 3.40 | 1.58 |
Distributions: 2 | |||||
From net investment income | (0.19) | (0.20) | (0.23) | (0.25) | (0.20) |
From net realized gain | (3.39) | (1.10) | (0.02) | (0.01) | (0.01) |
Total distributions | (3.58) | (1.30) | (0.25) | (0.26) | (0.21) |
Net asset value, end of year | $22.55 | $ 25.11 | $ 24.86 | $ 22.76 | $ 19.62 |
Total Return 3 | |||||
Based on net asset value | 5.22% | 6.38% | 10.40% | 17.41% | 8.74% |
Ratios to Average Net Assets | |||||
Total expenses | 1.74% 4 | 1.72% | 1.71% | 1.73% | 1.79% |
Total expenses after fees waived | 1.72% 4 | 1.72% | 1.71% | 1.73% | 1.79% |
Net investment income | 1.05% | 0.87% | 1.02% | 1.33% | 1.33% |
Supplemental Data | |||||
Net assets, end of year (000) | $9,636 | $21,395 | $34,515 | $44,315 | $48,906 |
Portfolio turnover rate | 25% | 25% | 6% | 15% | 3% |
1 | Based on average shares outstanding. |
2 | Distributions for annual periods determined in accordance with federal income tax regulations. |
3 | Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
4 | Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
Year
Ended
July 31, 2016 |
|
Investments in underlying funds | 0.01% |
Investor C | |||||
Year Ended July 31, | |||||
2016 | 2015 | 2014 | 2013 | 2012 | |
Per Share Operating Performance | |||||
Net asset value, beginning of year | $ 24.27 | $ 24.08 | $ 22.08 | $ 19.06 | $ 17.76 |
Net investment income 1 | 0.22 | 0.22 | 0.24 | 0.27 | 0.24 |
Net realized and unrealized gain | 0.76 | 1.31 | 2.05 | 3.04 | 1.31 |
Net increase from investment operations | 0.98 | 1.53 | 2.29 | 3.31 | 1.55 |
Distributions: 2 | |||||
From net investment income | (0.24) | (0.24) | (0.27) | (0.28) | (0.24) |
From net realized gain | (3.39) | (1.10) | (0.02) | (0.01) | (0.01) |
Total distributions | (3.63) | (1.34) | (0.29) | (0.29) | (0.25) |
Net asset value, end of year | $ 21.62 | $ 24.27 | $ 24.08 | $ 22.08 | $ 19.06 |
Total Return 3 | |||||
Based on net asset value | 5.24% | 6.51% | 10.43% | 17.47% | 8.80% |
Ratios to Average Net Assets | |||||
Total expenses | 1.69% 4 | 1.67% | 1.67% | 1.69% | 1.73% |
Total expenses after fees waived | 1.67% 4 | 1.66% | 1.67% | 1.68% | 1.73% |
Net investment income | 1.02% | 0.88% | 1.02% | 1.32% | 1.33% |
Supplemental Data | |||||
Net assets, end of year (000) | $3,043,757 | $3,361,651 | $3,476,705 | $3,124,236 | $2,245,569 |
Portfolio turnover rate | 25% | 25% | 6% | 15% | 3% |
1 | Based on average shares outstanding. |
2 | Distributions for annual periods determined in accordance with federal income tax regulations. |
3 | Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
4 | Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
Year
Ended
July 31, 2016 |
|
Investments in underlying funds | 0.01% |
Class R | |||||
Year Ended July 31, | |||||
2016 | 2015 | 2014 | 2013 | 2012 | |
Per Share Operating Performance | |||||
Net asset value, beginning of year | $ 25.01 | $ 24.76 | $ 22.69 | $ 19.57 | $ 18.21 |
Net investment income 1 | 0.32 | 0.32 | 0.34 | 0.36 | 0.32 |
Net realized and unrealized gain | 0.79 | 1.35 | 2.10 | 3.12 | 1.36 |
Net increase from investment operations | 1.11 | 1.67 | 2.44 | 3.48 | 1.68 |
Distributions: 2 | |||||
From net investment income | (0.32) | (0.32) | (0.35) | (0.35) | (0.31) |
From net realized gain | (3.39) | (1.10) | (0.02) | (0.01) | (0.01) |
Total distributions | (3.71) | (1.42) | (0.37) | (0.36) | (0.32) |
Net asset value, end of year | $ 22.41 | $ 25.01 | $ 24.76 | $ 22.69 | $ 19.57 |
Total Return 3 | |||||
Based on net asset value | 5.70% | 6.96% | 10.83% | 17.93% | 9.33% |
Ratios to Average Net Assets | |||||
Total expenses | 1.27% 4 | 1.28% | 1.27% | 1.28% | 1.31% |
Total expenses after fees waived | 1.25% 4 | 1.28% | 1.27% | 1.28% | 1.30% |
Net investment income | 1.44% | 1.28% | 1.43% | 1.72% | 1.76% |
Supplemental Data | |||||
Net assets, end of year (000) | $862,531 | $987,928 | $1,202,121 | $1,202,571 | $902,790 |
Portfolio turnover rate | 25% | 25% | 6% | 15% | 3% |
1 | Based on average shares outstanding. |
2 | Distributions for annual periods determined in accordance with federal income tax regulations. |
3 | Where applicable, assumes the reinvestment of distributions. |
4 | Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
Year
Ended
July 31, 2016 |
|
Investments in underlying funds | 0.01% |
■ | Access the BlackRock website at http://www.blackrock.com/edelivery; and |
■ | Log into your account. |
Fund Overview | Key facts and details about the Fund listed in this prospectus, including investment objectives, principal investment strategies, principal risk factors, fee and expense information and historical performance information | |
|
3 | |
|
3 | |
|
3 | |
|
4 | |
|
5 | |
|
5 | |
|
6 | |
|
6 | |
|
6 | |
|
6 |
Account Information | Information about account services, sales charges and waivers, shareholder transactions, and distributions and other payments | |
|
14 | |
|
14 | |
|
15 | |
|
19 | |
|
19 |
Management of the Fund | Information about BlackRock and the Portfolio Managers | |
|
21 | |
|
22 | |
|
23 | |
|
23 | |
|
25 |
Financial Highlights |
Financial Performance of the
Fund
|
26 |
Glossary |
Glossary of Investment
Terms
|
29 |
For More Information |
|
Inside Back Cover |
|
Back Cover |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment) |
Service
Shares |
||||
Management Fee 1 | 0.55% | ||||
Distribution and/or Service (12b-1) Fees | 0.25% | ||||
Other Expenses | 0.24% | ||||
Acquired Fund Fees and Expenses 2 | 0.01% | ||||
Total Annual Fund Operating Expenses 2 | 1.05% | ||||
Fee Waivers and/or Expense Reimbursements 1 | — | ||||
Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements 1 | 1.05% |
1 | As described in the “Management of the Fund” section of the Fund’s prospectus beginning on page 21, BlackRock has contractually agreed to waive the management fee with respect to any portion of the Fund’s assets estimated to be attributable to investments in other equity and fixed-income mutual funds and exchange-traded funds managed by BlackRock or its affiliates that have a contractual management fee through November 30, 2017. The contractual agreement may be terminated upon 90 days’ notice by a majority of the non-interested trustees of the Fund or by a vote of a majority of the outstanding voting securities of the Fund. |
2 | The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Fund’s most recent annual report which does not include Acquired Fund Fees and Expenses. |
1 Year | 3 Years | 5 Years | 10 Years | |
Service Shares | $107 | $334 | $579 | $1,283 |
■ | 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. |
■ | Equity Securities Risk — Stock markets are volatile. The price of equity securities 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. |
■ | Income Producing Stock Availability Risk — Depending upon market conditions, income producing common stock that meets the Fund’s investment criteria may not be widely available and/or may be highly concentrated in only a few market sectors. This may limit the ability of the Fund to produce current income while remaining fully diversified. |
■ | 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. |
■ | 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. |
As
of 12/31/15
Average Annual Total Returns |
1 Year | 5 Years | 10 Years |
BlackRock Equity Dividend Fund — Service Shares | |||
Return Before Taxes | (0.43)% | 9.77% | 7.23% |
Return After Taxes on Distributions | (4.12)% | 8.23% | 6.06% |
Return After Taxes on Distributions and Sale of Fund Shares | 2.73% | 7.57% | 5.57% |
Russell
1000
®
Value Index
(Reflects no deduction for fees, expenses or taxes) |
(3.83)% | 11.27% | 6.16% |
Standard
& Poor’s (S&P) 500
®
Index
(Reflects no deduction for fees, expenses or taxes) |
1.38% | 12.57% | 7.31% |
Name |
Portfolio
Manager
of the Fund Since |
Title |
Robert M. Shearer, CFA | 2001 | Managing Director of BlackRock, Inc. |
Tony DeSpirito | 2014 | Managing Director of BlackRock, Inc. |
David J. Cassese, CFA | 2011 | Director of BlackRock, Inc. |
Service Shares | |
Minimum Initial Investment | $5,000 |
Minimum Additional Investment | There is no minimum amount for additional investments. |
■ | Borrowing — The Fund may borrow from banks as a temporary measure for extraordinary or emergency purposes, or to meet redemptions. |
■ | Debt Securities — This includes fixed income securities issued by companies, as well as U.S. and foreign sovereign debt obligations. When choosing debt securities, Fund management considers various factors including the credit quality of issuers and yield analysis. The Fund may invest in debt securities that are rated investment grade of any maturity. |
■ | Derivative Transactions — The Fund may use derivatives to hedge its investment portfolio against market, interest rate and currency risks or to seek to enhance its return. The derivatives that the Fund may use include indexed and inverse securities, options, futures, swaps and forward foreign exchange transactions. |
■ | 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. 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 based on the change in a specified interest rate or equity index (an “indexed security”). The Fund may also invest in securities the return of which is inversely related to changes in an interest rate or index (“inverse securities”). In general, the return on inverse securities will decrease when the underlying index or interest rate goes up and increase when that index or interest rate goes down. |
■ | 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. |
■ | 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. |
■ | Rights — The Fund may purchase securities pursuant to the exercise of subscription rights, which allow an issuer’s existing shareholders to purchase additional common stock at a price substantially below the market price of the shares. |
■ | 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-term Securities — The Fund will normally invest a portion of its assets in short-term debt securities, money market securities, including repurchase agreements, or cash. The Fund invests in such securities or cash when Fund management is unable to find enough attractive long-term investments to reduce exposure to stocks when Fund management believes it is advisable to do so or to meet redemptions. Except during temporary defensive periods, such investments will not exceed 20% of the Fund’s assets. |
■ | 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 Purposes — The Fund reserves the right to hold, as a temporary defensive measure or as a reserve for redemptions, short-term U.S. Government securities, money market securities, including repurchase agreements, or cash in such proportions as, in the opinion of BlackRock, prevailing market or economic conditions warrant. Except during temporary defensive periods, such securities or cash will not exceed 20% of its total assets. Although the Fund will make temporary defensive investments only to the extent that Fund management believes they present less risk than the Fund’s usual investments, temporary defensive investments may limit the Fund’s ability to achieve its investment objective. |
■ | Warrants — A warrant gives the Fund the right to buy stock. The warrant specifies the amount of underlying stock, the purchase (or “exercise”) price, and the date the warrant expires. The Fund has no obligation to exercise the warrant and buy the stock. A warrant has value only if the Fund is able to exercise it or sell it before it expires. |
■ | 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. |
■ | 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. |
■ | 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. |
■ | Income Producing Stock Availability Risk — Depending upon market conditions, income producing common stock that meets the Fund’s investment criteria may not be widely available and/or may be highly concentrated in only a few market sectors. This may limit the ability of the Fund to produce current income while remaining fully diversified. |
■ | 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. |
■ | 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. |
■ | 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. |
■ | Debt Securities Risk — Debt securities, such as bonds, involve credit risk. Credit risk is the risk that the borrower will not make timely payments of principal and interest. 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. Debt securities are also subject to interest rate risk. Interest rate risk is the risk that the value of a debt security may fall when interest rates rise. In general, the market price of debt securities with longer maturities will go up or down more in response to changes in interest rates than the market price of shorter term securities. The Fund may be subject to a greater risk of rising interest rates due to the current period of historically low rates. |
■ | Derivatives Risk — The Fund’s use of derivatives may increase its costs, reduce the Fund’s returns and/or increase volatility. Derivatives 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 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 Internal Revenue Service (“IRS”). |
Regulatory Risk — Derivative contracts, including, without limitation, swaps, currency forwards and non-deliverable forwards, are subject to regulation under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) in the U.S. and under comparable regimes in Europe, Asia and other non-U.S. jurisdictions. Under the Dodd-Frank Act, certain derivatives will become subject to margin requirements and swap dealers will be required to collect margin from the Fund with respect to such derivatives. Implementation of such regulations under the Dodd-Frank Act regarding clearing, mandatory trading and margining of swaps and other derivatives may increase the costs to the Fund of trading in these instruments and, as a result, may affect returns to investors in the Fund. |
In December 2015, the Securities and Exchange Commission (“SEC”) proposed a new rule to regulate the use of derivatives by registered investment companies, such as the Fund. If the rule goes into effect, it could limit the ability of the Fund to invest or remain invested in derivatives. In addition, other future regulatory developments may impact the Fund’s ability to invest or remain invested in certain derivatives. Legislation or regulation may also change the way in which the Fund itself is regulated. BlackRock cannot predict the effects of any new governmental regulation that may be implemented on the ability of the Fund to use swaps or any other financial derivative product, and there can be no assurance that any new governmental regulation will not adversely affect the Fund’s ability to achieve its investment objective. |
■ | 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, including ETFs, 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 not offset by BlackRock through waivers to the Fund’s management fees). 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 to greater risk and increase its costs. As an open-end investment company registered with 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. |
■ | 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. |
■ | Repurchase Agreements and Purchase and Sale Contracts Risk — 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. |
■ | Rights Risk — The failure to exercise subscription rights to purchase common stock would result in the dilution of the Fund’s interest in the issuing company. The market for such rights is not well developed, and, accordingly, the Fund may not always realize full value on the sale of rights. |
■ | 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. |
■ | Small Cap Securities Risk — Small cap 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 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 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 securities may be particularly sensitive to changes in interest rates, borrowing costs and earnings. Investing in small cap 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. |
■ | Valuation Risk — The price the Fund could receive upon the sale of any particular portfolio investment may differ from the Fund’s valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair valuation methodology or a price provided by an independent pricing service. As a result, the price received upon the sale of an investment may be less than the value ascribed by the Fund, and the Fund could realize a greater than expected loss or lesser than expected gain upon the sale of the investment. Pricing services that value fixed-income securities generally utilize a range of market-based and security-specific inputs and assumptions, as well as considerations about general market conditions, to establish a price. Pricing services generally value fixed-income securities assuming orderly transactions of an institutional round lot size, but may be held or transactions may be conducted in such securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots. The Fund’s ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third-party service providers. |
■ | Warrants Risk — If the price of the underlying stock does not rise above the exercise price before the warrant expires, the warrant generally expires without any value and the Fund will lose any amount it paid for the warrant. Thus, investments in warrants may involve substantially more risk than investments in common stock. Warrants may trade in the same markets as their underlying stock; however, the price of the warrant does not necessarily move with the price of the underlying stock. |
■ | 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. |
Service Share Class at a Glance | |
Availability | Limited to certain investors, including: Financial Intermediaries (such as banks and brokerage firms) acting on behalf of their customers, certain persons who were shareholders of the Compass Capital Group of Funds at the time of its combination with The PNC ® Fund in 1996 and investors that participate in the Capital Directions SM asset allocation program. Service Shares will normally be held by Financial Intermediaries or in the name of nominees of Financial Intermediaries on behalf of their customers. Service Shares are normally purchased through a customer’s account at a Financial Intermediary through procedures established by such Financial Intermediary. In these cases, confirmation of share purchases and redemptions will be sent to the Financial Intermediaries. A customer’s ownership of shares will be recorded by the Financial Intermediary and reflected in the account statements provided by such Financial Intermediaries to their customers. Investors wishing to purchase Service Shares should contact their Financial Intermediaries. |
Minimum Investment | $5,000. However, institutions may set a higher minimum for their customers. |
Initial Sales Charge? | No. Entire purchase price is invested in shares of the Fund. |
Deferred Sales Charge? | No. |
Distribution and Service (12b-1) Fees? | No Distribution Fee. 0.25% Annual Service Fee. |
Redemption Fees? | No. |
Advantage | No up-front sales charge so you start off owning more shares. |
Disadvantage | Limited availability. |
■ | Answering customer inquiries regarding account status and history, the manner in which purchases, exchanges and redemptions or repurchases of shares may be effected and certain other matters pertaining to the customers’ investments; |
■ | Assisting customers in designating 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 | Determine the amount of your investment | Refer to the minimum initial investment in the “Service Share Class at a Glance” table in this prospectus (be sure to read this prospectus carefully). |
Have your 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 New York Stock Exchange (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.
|
|
Add to Your Investment | Purchase additional shares | There is no minimum amount for additional investments. |
Have your Financial Intermediary submit your purchase order for additional shares | To purchase additional shares you may contact your Financial Intermediary. | |
Or contact BlackRock (for accounts held directly with BlackRock) |
Purchase
by Telephone:
Call the Fund at (800) 537-4942 and speak with one of our representatives. The Fund has the right to reject any telephone request for any reason.
|
|
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 BlackRock at (800) 537-4942, or contact your Financial Intermediary (if your account is not held directly with BlackRock). |
Your Choices | Important Information for You to Know | |
How to Pay for Shares | Making payment for purchases | Payment for Service Shares must normally be made in Federal funds or other immediately available funds by your Financial Intermediary but in no event later than 4:00 p.m. (Eastern time) on the first business day following receipt of the order. Payment may also, at the discretion of the Fund, be made in the form of securities that are permissible investments for the Fund. 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. |
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 in accordance with the procedures applicable to your accounts. These procedures may vary according to the type of account and the Financial Intermediary involved and customers should
consult their Financial Intermediary in this regard.
|
Selling shares held directly with BlackRock |
Methods
of Redeeming
|
Your Choices | Important Information for You to Know | |
Full or Partial Redemption of Shares (continued) | Selling shares held directly with BlackRock (continued) |
Your
check will be reinvested in your account at the net asset value next calculated, on the day of the investment. When reinvested, those amounts are subject to the risk of loss like any Fund investment. If you elect to receive distributions in cash
and a check remains undeliverable or uncashed for more than 6 months, your cash election may also be changed automatically to reinvest and your future dividend and capital gains distributions will be reinvested in the Fund at the net asset value as
of the date of payment of the distribution.
***
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 | |
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.
|
Transfer to a non-participating Financial Intermediary |
You
must either:
• Transfer your shares to an account with the Fund; or • Sell your shares. |
■ | 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 as may be permitted 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. |
Average Daily Net Assets |
Rate
of
Management Fee |
Not exceeding $8 billion | 0.60% |
In excess of $8 billion but not more than $10 billion | 0.56% |
In excess of $10 billion but not more than $12 billion | 0.54% |
In excess of $12 billion but not more than $17 billion | 0.52% |
In excess of $17 billion but not more than $25 billion | 0.51% |
In excess of $25 billion but not more than $30 billion | 0.50% |
In excess of $30 billion but not more than $40 billion | 0.47% |
In excess of $40 billion | 0.45% |
Average Daily Net Assets |
Rate
of
Management Fee |
Not exceeding $8 billion | 0.60% |
In excess of $8 billion but not more than $10 billion | 0.56% |
In excess of $10 billion but not more than $12 billion | 0.54% |
In excess of $12 billion but not more than $17 billion | 0.52% |
In excess of $17 billion but not more than $25 billion | 0.51% |
In excess of $25 billion but not more than $30 billion | 0.50% |
In excess of $30 billion but not more than $40 billion | 0.49% |
In excess of $40 billion | 0.48% |
Portfolio Manager | Primary Role | Since | Title and Recent Biography |
Robert M. Shearer, CFA | Jointly and primarily responsible for the day-to-day management of the Fund’s portfolio, including setting the Fund’s overall investment strategy and overseeing the management of the Fund. | 2001 | Managing Director of BlackRock, Inc. since 2006. |
Tony DeSpirito | Jointly and primarily responsible for the day-to-day management of the Fund’s portfolio, including setting the Fund’s overall investment strategy and overseeing the management of the Fund. | 2014 | Managing Director of BlackRock, Inc. since 2014; Managing Principal, Portfolio Manager and Member of the Executive Committee of Pzena Investment Management from 2009 to 2014. |
David J. Cassese, CFA | Jointly and primarily responsible for the day-to-day management of the Fund’s portfolio, including setting the Fund’s overall investment strategy and overseeing the management of the Fund. | 2011 | Director of BlackRock, Inc. since 2011; Senior Vice President of Oppenheimer Capital from 2008 to 2011; Vice President of Oppenheimer Capital from 2005 to 2008. |
Service | |||||
Year Ended July 31, | |||||
2016 | 2015 | 2014 | 2013 | 2012 | |
Per Share Operating Performance | |||||
Net asset value, beginning of year | $ 24.86 | $ 24.63 | $ 22.56 | $ 19.46 | $ 18.12 |
Net investment income 1 | 0.37 | 0.39 | 0.40 | 0.42 | 0.37 |
Net realized and unrealized gain | 0.79 | 1.33 | 2.10 | 3.10 | 1.36 |
Net increase from investment operations | 1.16 | 1.72 | 2.50 | 3.52 | 1.73 |
Distributions: 2 | |||||
From net investment income | (0.37) | (0.39) | (0.41) | (0.41) | (0.38) |
From net realized gain | (3.39) | (1.10) | (0.02) | (0.01) | (0.01) |
Total distributions | (3.76) | (1.49) | (0.43) | (0.42) | (0.39) |
Net asset value, end of year | $ 22.26 | $ 24.86 | $ 24.63 | $ 22.56 | $ 19.46 |
Total Return 3 | |||||
Based on net asset value | 5.95% | 7.19% | 11.17% | 18.23% | 9.68% |
Ratios to Average Net Assets | |||||
Total expenses | 1.04% 4 | 1.02% | 1.01% | 1.01% | 1.02% |
Total expenses after fees waived | 1.01% 4 | 1.01% | 1.01% | 1.01% | 1.01% |
Net investment income | 1.68% | 1.58% | 1.69% | 1.99% | 2.00% |
Supplemental Data | |||||
Net assets, end of year (000) | $86,382 | $99,271 | $295,017 | $323,071 | $207,027 |
Portfolio turnover rate | 25% | 25% | 6% | 15% | 3% |
1 | Based on average shares outstanding. |
2 | Distributions for annual periods in accordance with federal income tax regulations. |
3 | Where applicable, assumes the reinvestment of distributions. |
4 | Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
Year
Ended
July 31, 2016 |
|
Investments in underlying funds | 0.01% |
■ | Access the BlackRock website at http://www.blackrock.com/edelivery; and |
■ | Log into your account. |
Fund Overview | Key facts and details about the Fund listed in this prospectus, including investment objectives, principal investment strategies, principal risk factors, fee and expense information and historical performance information | |
|
3 | |
|
3 | |
|
4 | |
|
4 | |
|
5 | |
|
6 | |
|
6 | |
|
6 | |
|
6 | |
|
6 |
Account Information | Information about account services, sales charges and waivers, shareholder transactions, and distributions and other payments | |
|
14 | |
|
14 | |
|
14 | |
|
15 | |
|
19 | |
|
20 | |
|
20 | |
|
21 |
Management of the Fund | Information about BlackRock and the Portfolio Managers | |
|
23 | |
|
24 | |
|
25 | |
|
25 | |
|
27 |
Financial Highlights |
Financial Performance of the
Fund
|
28 |
Glossary |
Glossary of Investment
Terms
|
31 |
For More Information |
|
Inside Back Cover |
|
Back Cover |
Shareholder
Fees
(fees paid directly from your investment) |
Investor
C1
Shares |
|||
Maximum Sales Charge (Load) Imposed on Purchases (as percentage of offering price) | None | |||
Maximum Deferred Sales Charge (Load) (as percentage of offering price or redemption proceeds, whichever is lower) | None 1 | |||
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment) |
Investor
C1
Shares |
|||
Management Fee 2 | 0.55% | |||
Distribution and/or Service (12b-1) Fees | 0.80% | |||
Other Expenses | 0.14% | |||
Acquired Fund Fees and Expenses 3 | 0.01% | |||
Total Annual Fund Operating Expenses 3 | 1.50% | |||
Fee Waivers and/or Expense Reimbursements 2 | — | |||
Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements 2 | 1.50% |
1 | A contingent deferred sales charge (“CDSC”) of 1.00% is assessed on certain redemptions of Investor C1 Shares made within one year after purchase. The CDSC does not apply to redemptions by certain employer-sponsored retirement plans or to redemptions of shares acquired through reinvestment of dividends and capital gains by existing shareholders. |
2 | As described in the “Management of the Fund” section of the Fund’s prospectus beginning on page 23, BlackRock has contractually agreed to waive the management fee with respect to any portion of the Fund’s assets estimated to be attributable to investments in other equity and fixed-income mutual funds and exchange-traded funds managed by BlackRock or its affiliates that have a contractual management fee through November 30, 2017. The contractual agreement may be terminated upon 90 days’ notice by a majority of the non-interested trustees of the Fund or by a vote of a majority of the outstanding voting securities of the Fund. |
3 | The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Fund’s most recent annual report which does not include Acquired Fund Fees and Expenses. |
1 Year | 3 Years | 5 Years | 10 Years | |
Investor C1 Shares | $153 | $474 | $818 | $1,791 |
■ | 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. |
■ | Equity Securities Risk — Stock markets are volatile. The price of equity securities 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. |
■ | Income Producing Stock Availability Risk — Depending upon market conditions, income producing common stock that meets the Fund’s investment criteria may not be widely available and/or may be highly concentrated in only a few market sectors. This may limit the ability of the Fund to produce current income while remaining fully diversified. |
■ | 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. |
■ | 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. |
As
of 12/31/15
Average Annual Total Returns |
1 Year | 5 Years | 10 Years |
BlackRock Equity Dividend Fund — Investor C1 Shares | |||
Return Before Taxes | (0.88)% | 9.22% | 6.67% |
Return After Taxes on Distributions | (4.57)% | 7.77% | 5.51% |
Return After Taxes on Distributions and Sale of Fund Shares | 2.46% | 7.15% | 5.09% |
Russell
1000
®
Value Index
(Reflects no deduction for fees, expenses or taxes) |
(3.83)% | 11.27% | 6.16% |
Standard
& Poor’s (S&P) 500
®
Index
(Reflects no deduction for fees, expenses or taxes) |
1.38% | 12.57% | 7.31% |
Name |
Portfolio
Manager
of the Fund Since |
Title |
Robert M. Shearer, CFA | 2001 | Managing Director of BlackRock, Inc. |
Tony DeSpirito | 2014 | Managing Director of BlackRock, Inc. |
David J. Cassese, CFA | 2011 | Director of BlackRock, Inc. |
Investor C1 Shares | |
Minimum
Initial
Investment |
Available only for purchase by certain employer-sponsored retirement plans and for dividend and capital gain reinvestment by existing shareholders. |
Minimum
Additional
Investment |
No subsequent minimum. |
■ | Borrowing — The Fund may borrow from banks as a temporary measure for extraordinary or emergency purposes, or to meet redemptions. |
■ | Debt Securities — This includes fixed income securities issued by companies, as well as U.S. and foreign sovereign debt obligations. When choosing debt securities, Fund management considers various factors including the credit quality of issuers and yield analysis. The Fund may invest in debt securities that are rated investment grade of any maturity. |
■ | Derivative Transactions — The Fund may use derivatives to hedge its investment portfolio against market, interest rate and currency risks or to seek to enhance its return. The derivatives that the Fund may use include indexed and inverse securities, options, futures, swaps and forward foreign exchange transactions. |
■ | 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. 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 based on the change in a specified interest rate or equity index (an “indexed security”). The Fund may also invest in securities the return of which is inversely related to changes in an interest rate or index (“inverse securities”). In general, the return on inverse securities will decrease when the underlying index or interest rate goes up and increase when that index or interest rate goes down. |
■ | 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. |
■ | 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. |
■ | Rights — The Fund may purchase securities pursuant to the exercise of subscription rights, which allow an issuer’s existing shareholders to purchase additional common stock at a price substantially below the market price of the shares. |
■ | 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-term Securities — The Fund will normally invest a portion of its assets in short-term debt securities, money market securities, including repurchase agreements, or cash. The Fund invests in such securities or cash when Fund management is unable to find enough attractive long-term investments to reduce exposure to stocks when Fund management believes it is advisable to do so or to meet redemptions. Except during temporary defensive periods, such investments will not exceed 20% of the Fund’s assets. |
■ | 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 Purposes — The Fund reserves the right to hold, as a temporary defensive measure or as a reserve for redemptions, short-term U.S. Government securities, money market securities, including repurchase agreements, or cash in such proportions as, in the opinion of BlackRock, prevailing market or economic conditions warrant. Except during temporary defensive periods, such securities or cash will not exceed 20% of its total assets. Although the Fund will make temporary defensive investments only to the extent that Fund management believes they present less risk than the Fund’s usual investments, temporary defensive investments may limit the Fund’s ability to achieve its investment objective. |
■ | Warrants — A warrant gives the Fund the right to buy stock. The warrant specifies the amount of underlying stock, the purchase (or “exercise”) price, and the date the warrant expires. The Fund has no obligation to exercise the warrant and buy the stock. A warrant has value only if the Fund is able to exercise it or sell it before it expires. |
■ | 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. |
■ | 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. |
■ | 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. |
■ | Income Producing Stock Availability Risk — Depending upon market conditions, income producing common stock that meets the Fund’s investment criteria may not be widely available and/or may be highly concentrated in only a few market sectors. This may limit the ability of the Fund to produce current income while remaining fully diversified. |
■ | 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. |
■ | 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. |
■ | 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. |
■ | Debt Securities Risk — Debt securities, such as bonds, involve credit risk. Credit risk is the risk that the borrower will not make timely payments of principal and interest. 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. Debt securities are also subject to interest rate risk. Interest rate risk is the risk that the value of a debt security may fall when interest rates rise. In general, the market price of debt securities with longer maturities will go up or down more in response to changes in interest rates than the market price of shorter term securities. The Fund may be subject to a greater risk of rising interest rates due to the current period of historically low rates. |
■ | Derivatives Risk — The Fund’s use of derivatives may increase its costs, reduce the Fund’s returns and/or increase volatility. Derivatives 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 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 Internal Revenue Service (“IRS”). |
Regulatory Risk — Derivative contracts, including, without limitation, swaps, currency forwards and non-deliverable forwards, are subject to regulation under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) in the U.S. and under comparable regimes in Europe, Asia and other non-U.S. jurisdictions. Under the Dodd-Frank Act, certain derivatives will become subject to margin requirements and swap dealers will be required to collect margin from the Fund with respect to such derivatives. Implementation of such regulations under the Dodd-Frank Act regarding clearing, mandatory trading and margining of swaps and other derivatives may increase the costs to the Fund of trading in these instruments and, as a result, may affect returns to investors in the Fund. |
In December 2015, the Securities and Exchange Commission (“SEC”) proposed a new rule to regulate the use of derivatives by registered investment companies, such as the Fund. If the rule goes into effect, it could limit the ability of the Fund to invest or remain invested in derivatives. In addition, other future regulatory developments may impact the Fund’s ability to invest or remain invested in certain derivatives. Legislation or regulation may also change the way in which the Fund itself is regulated. BlackRock cannot predict the effects of any new governmental regulation that may be implemented on the ability of the Fund to use swaps or any other financial derivative product, and there can be no assurance that any new governmental regulation will not adversely affect the Fund’s ability to achieve its investment objective. |
■ | 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, including ETFs, 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 not offset by BlackRock through waivers to the Fund’s management fees). 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 to greater risk and increase its costs. As an open-end investment company registered with 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. |
■ | 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. |
■ | Repurchase Agreements and Purchase and Sale Contracts Risk — 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. |
■ | Rights Risk — The failure to exercise subscription rights to purchase common stock would result in the dilution of the Fund’s interest in the issuing company. The market for such rights is not well developed, and, accordingly, the Fund may not always realize full value on the sale of rights. |
■ | 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. |
■ | Small Cap Securities Risk — Small cap 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 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 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 securities may be particularly sensitive to changes in interest rates, borrowing costs and earnings. Investing in small cap 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. |
■ | Valuation Risk — The price the Fund could receive upon the sale of any particular portfolio investment may differ from the Fund’s valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair valuation methodology or a price provided by an independent pricing service. As a result, the price received upon the sale of an investment may be less than the value ascribed by the Fund, and the Fund could realize a greater than expected loss or lesser than expected gain upon the sale of the investment. Pricing services that value fixed-income securities generally utilize a range of market-based and security-specific inputs and assumptions, as well as considerations about general market conditions, to establish a price. Pricing services generally value fixed-income securities assuming orderly transactions of an institutional round lot size, but may be held or transactions may be conducted in such securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots. The Fund’s ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third-party service providers. |
■ | Warrants Risk — If the price of the underlying stock does not rise above the exercise price before the warrant expires, the warrant generally expires without any value and the Fund will lose any amount it paid for the warrant. Thus, investments in warrants may involve substantially more risk than investments in common stock. Warrants may trade in the same markets as their underlying stock; however, the price of the warrant does not necessarily move with the price of the underlying stock. |
■ | 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. |
■ | Answering customer inquiries regarding account status and history, the manner in which purchases, exchanges and redemptions or repurchases of shares may be effected and certain other matters pertaining to the customers’ investments; |
■ | Assisting customers in designating and changing dividend options, account designations and addresses; and |
■ | Providing other similar shareholder liaison services. |
Your Choices | Important Information For You to Know | |
Add to Your Investment | First, have your Financial Intermediary submit your purchase order |
Since
purchases are limited to certain employer-sponsored retirement plans, contact your Financial Intermediary to see if you qualify.
|
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 professional or Financial Intermediary (if your account is not held directly with BlackRock). |
Your Choices | Important Information For You to Know | |
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 professional or Financial Intermediary, but in no event later than 4:00 p.m. (Eastern time) on the third business day 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 professional or other Financial Intermediary will be responsible for any loss to the Fund. |
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 C1 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 |
Your Choices | Important Information For You to Know | |
Full or Partial Redemption of Shares (continued) | Have your Financial Intermediary submit your sales order (continued) |
business
on the next business day.
|
Selling shares held directly with BlackRock |
Methods
of Redeeming
|
Your Choices | Important Information For You to Know | |
Full or Partial Redemption of Shares (continued) | Selling shares held directly with BlackRock (continued) |
The
Fund reserves the right to reinvest any dividend or distribution amounts (e.g., income dividends or capital gains) which you have elected to receive by check should your check be returned as undeliverable or remain uncashed for more than 6 months.
No interest will accrue on amounts represented by uncashed checks. Your check will be reinvested in your account at the net asset value next calculated, on the day of the investment. When reinvested, those amounts are subject to the risk of loss
like any Fund investment. If you elect to receive distributions in cash and a check remains undeliverable or uncashed for more than 6 months, your cash election may also be changed automatically to reinvest and your future dividend and capital gains
distributions will be reinvested in the Fund at the net asset value as of the date of payment of the distribution.
***
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
C1 Shares of the Funds are generally exchangeable for Investor C Shares of another BlackRock Fund. Shares of other BlackRock Funds may not be exchanged for Investor C1 Shares of the Fund.
|
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 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. |
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. |
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 special payee. Please call (800) 441-7762 for details. If investing in another fund at BlackRock, the receiving fund must be open to new purchases. |
Systemic Exchange | This feature can be used by investors to systematically exchange money from one fund to up to four other funds. | A minimum of $10,000 in the initial BlackRock Fund is required and investments in any additional funds must meet minimum initial investment requirements. |
Systematic Withdrawal Plan (“SWP”) | This feature can be used by investors who want to receive regular distributions from their accounts. |
To
start an SWP a shareholder must have a current investment of $10,000 or more in a BlackRock Fund.
|
■ | 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 as may be permitted 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. |
Average Daily Net Assets |
Rate
of
Management Fee |
Not exceeding $8 billion | 0.60% |
In excess of $8 billion but not more than $10 billion | 0.56% |
In excess of $10 billion but not more than $12 billion | 0.54% |
In excess of $12 billion but not more than $17 billion | 0.52% |
In excess of $17 billion but not more than $25 billion | 0.51% |
In excess of $25 billion but not more than $30 billion | 0.50% |
In excess of $30 billion but not more than $40 billion | 0.47% |
In excess of $40 billion | 0.45% |
Average Daily Net Assets |
Rate
of
Management Fee |
Not exceeding $8 billion | 0.60% |
In excess of $8 billion but not more than $10 billion | 0.56% |
In excess of $10 billion but not more than $12 billion | 0.54% |
In excess of $12 billion but not more than $17 billion | 0.52% |
In excess of $17 billion but not more than $25 billion | 0.51% |
In excess of $25 billion but not more than $30 billion | 0.50% |
In excess of $30 billion but not more than $40 billion | 0.49% |
In excess of $40 billion | 0.48% |
Portfolio Manager | Primary Role | Since | Title and Recent Biography |
Robert M. Shearer, CFA | Jointly and primarily responsible for the day-to-day management of the Fund’s portfolio, including setting the Fund’s overall investment strategy and overseeing the management of the Fund. | 2001 | Managing Director of BlackRock, Inc. since 2006. |
Tony DeSpirito | Jointly and primarily responsible for the day-to-day management of the Fund’s portfolio, including setting the Fund’s overall investment strategy and overseeing the management of the Fund. | 2014 | Managing Director of BlackRock, Inc. since 2014; Managing Principal, Portfolio Manager and Member of the Executive Committee of Pzena Investment Management from 2009 to 2014. |
David J. Cassese, CFA | Jointly and primarily responsible for the day-to-day management of the Fund’s portfolio, including setting the Fund’s overall investment strategy and overseeing the management of the Fund. | 2011 | Director of BlackRock, Inc. since 2011; Senior Vice President of Oppenheimer Capital from 2008 to 2011; Vice President of Oppenheimer Capital from 2005 to 2008. |
Investor C1 | |||||
Year Ended July 31, |
Period
September 12, 2011 1 to July 31, 2012 |
||||
2016 | 2015 | 2014 | 2013 | ||
Per Share Operating Performance | |||||
Net asset value, beginning of period | $24.24 | $24.06 | $22.06 | $19.03 | $16.32 |
Net investment income 2 | 0.26 | 0.26 | 0.28 | 0.32 | 0.22 |
Net realized and unrealized gain | 0.76 | 1.30 | 2.05 | 3.03 | 2.78 |
Net increase from investment operations | 1.02 | 1.56 | 2.33 | 3.35 | 3.00 |
Distributions: 3 | |||||
From net investment income | (0.28) | (0.28) | (0.31) | (0.31) | (0.28) |
From net realized gain | (3.39) | (1.10) | (0.02) | (0.01) | (0.01) |
Total distributions | (3.67) | (1.38) | (0.33) | (0.32) | (0.29) |
Net asset value, end of period | $21.59 | $24.24 | $24.06 | $22.06 | $19.03 |
Total Return 4 | |||||
Based on net asset value | 5.47% | 6.69% | 10.63% | 17.74% | 18.51% 5 |
Ratios to Average Net Assets | |||||
Total expenses | 1.49% 6 | 1.49% | 1.49% | 1.46% | 1.63% 7 |
Total expenses after fees waived | 1.47% 6 | 1.48% | 1.49% | 1.45% | 1.63% 7 |
Net investment income | 1.22% | 1.07% | 1.21% | 1.59% | 1.37% 7 |
Supplemental Data | |||||
Net assets, end of period (000) | $6,834 | $7,340 | $7,680 | $7,670 | $7,255 |
Portfolio turnover rate | 25% | 25% | 6% | 15% | 3% |
1 | Commencement of operations. |
2 | Based on average shares outstanding. |
3 | Distributions for annual periods in accordance with federal income tax regulations. |
4 | Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
5 | Aggregate total return. |
6 | Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
Year
Ended
July 31, 2016 |
|
Investments in underlying funds | 0.01% |
7 | Annualized. |
■ | Access the BlackRock website at http://www.blackrock.com/edelivery; and |
■ | Log into your account. |
Fund Overview | Key facts and details about the Fund listed in this prospectus, including investment objectives, principal investment strategies, principal risk factors, fee and expense information and historical performance information | |
|
3 | |
|
3 | |
|
3 | |
|
4 | |
|
5 | |
|
6 | |
|
6 | |
|
6 | |
|
6 | |
|
6 |
Account Information | Information about account services, sales charges and waivers, shareholder transactions, and distributions and other payments | |
|
14 | |
|
15 | |
|
19 | |
|
19 |
Management of the Fund | Information about BlackRock and the Portfolio Managers | |
|
21 | |
|
22 | |
|
23 | |
|
23 | |
|
25 |
Financial Highlights |
Financial Performance of the
Fund
|
27 |
Glossary |
Glossary of Investment
Terms
|
30 |
For More Information |
|
Inside Back Cover |
|
Back Cover |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment) |
Class
K
Shares |
||||
Management Fee 1 | 0.55% | ||||
Distribution and/or Service (12b-1) Fees | None | ||||
Other Expenses 2 | 0.03% | ||||
Acquired Fund Fees and Expenses 3 | 0.01% | ||||
Total Annual Fund Operating Expenses 3 | 0.59% | ||||
Fee Waivers and/or Expense Reimbursements 1 | — | ||||
Total Annual Operating Expenses After Fee Waivers and/or Expense Reimbursements 1 | 0.59% |
1 | As described in the “Management of the Fund” section of the Fund’s prospectus beginning on page 21, BlackRock has contractually agreed to waive the management fee with respect to any portion of the Fund’s assets estimated to be attributable to investments in other equity and fixed-income mutual funds and exchange-traded funds managed by BlackRock or its affiliates that have a contractual management fee through November 30, 2017. The contractual agreement may be terminated upon 90 days’ notice by a majority of the non-interested trustees of the Fund or by a vote of a majority of the outstanding voting securities of the Fund. |
2 | Other Expenses are based on estimated amounts for the current fiscal year. |
3 | The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Fund’s most recent annual report which does not include Acquired Fund Fees and Expenses. |
1 Year | 3 Years | 5 Years | 10 Years | |
Class K Shares | $60 | $189 | $329 | $738 |
■ | 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. |
■ | Equity Securities Risk — Stock markets are volatile. The price of equity securities 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. |
■ | Income Producing Stock Availability Risk — Depending upon market conditions, income producing common stock that meets the Fund’s investment criteria may not be widely available and/or may be highly concentrated in only a few market sectors. This may limit the ability of the Fund to produce current income while remaining fully diversified. |
■ | 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. |
■ | 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. |
As
of 12/31/15
Average Annual Total Returns |
1 Year | 5 Years | 10 Years |
BlackRock Equity Dividend Fund — Institutional Shares | |||
Return Before Taxes | (0.10)% | 10.10% | 7.53% |
Return After Taxes on Distributions | (3.88)% | 8.48% | 6.28% |
Return After Taxes on Distributions and Sale of Fund Shares | 2.99% | 7.82% | 5.79% |
Russell
1000
®
Value Index
(Reflects no deduction for fees, expenses or taxes) |
(3.83)% | 11.27% | 6.16% |
Standard
& Poor’s (S&P) 500
®
Index
(Reflects no deduction for fees, expenses or taxes) |
1.38% | 12.57% | 7.31% |
Name |
Portfolio
Manager
of the Fund Since |
Title |
Robert M. Shearer, CFA | 2001 | Managing Director of BlackRock, Inc. |
Tony DeSpirito | 2014 | Managing Director of BlackRock, Inc. |
David J. Cassese, CFA | 2011 | Director of BlackRock, Inc. |
■ | Borrowing — The Fund may borrow from banks as a temporary measure for extraordinary or emergency purposes, or to meet redemptions. |
■ | Debt Securities — This includes fixed income securities issued by companies, as well as U.S. and foreign sovereign debt obligations. When choosing debt securities, Fund management considers various factors including the credit quality of issuers and yield analysis. The Fund may invest in debt securities that are rated investment grade of any maturity. |
■ | Derivative Transactions — The Fund may use derivatives to hedge its investment portfolio against market, interest rate and currency risks or to seek to enhance its return. The derivatives that the Fund may use include indexed and inverse securities, options, futures, swaps and forward foreign exchange transactions. |
■ | 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. 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 based on the change in a specified interest rate or equity index (an “indexed security”). The Fund may also invest in securities the return of which is inversely related to changes in an interest rate or index (“inverse securities”). In general, the return on inverse securities will decrease when the underlying index or interest rate goes up and increase when that index or interest rate goes down. |
■ | 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. |
■ | 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. |
■ | Rights — The Fund may purchase securities pursuant to the exercise of subscription rights, which allow an issuer’s existing shareholders to purchase additional common stock at a price substantially below the market price of the shares. |
■ | 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-term Securities — The Fund will normally invest a portion of its assets in short-term debt securities, money market securities, including repurchase agreements, or cash. The Fund invests in such securities or cash when Fund management is unable to find enough attractive long-term investments to reduce exposure to stocks when Fund management believes it is advisable to do so or to meet redemptions. Except during temporary defensive periods, such investments will not exceed 20% of the Fund’s assets. |
■ | 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 Purposes — The Fund reserves the right to hold, as a temporary defensive measure or as a reserve for redemptions, short-term U.S. Government securities, money market securities, including repurchase agreements, or cash in such proportions as, in the opinion of BlackRock, prevailing market or economic conditions warrant. Except during temporary defensive periods, such securities or cash will not exceed 20% of its total assets. Although the Fund will make temporary defensive investments only to the extent that Fund management believes they present less risk than the Fund’s usual investments, temporary defensive investments may limit the Fund’s ability to achieve its investment objective. |
■ | Warrants — A warrant gives the Fund the right to buy stock. The warrant specifies the amount of underlying stock, the purchase (or “exercise”) price, and the date the warrant expires. The Fund has no obligation to exercise the warrant and buy the stock. A warrant has value only if the Fund is able to exercise it or sell it before it expires. |
■ | 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. |
■ | 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. |
■ | 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. |
■ | Income Producing Stock Availability Risk — Depending upon market conditions, income producing common stock that meets the Fund’s investment criteria may not be widely available and/or may be highly concentrated in only a few market sectors. This may limit the ability of the Fund to produce current income while remaining fully diversified. |
■ | 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. |
■ | 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. |
■ | 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. |
■ | Debt Securities Risk — Debt securities, such as bonds, involve credit risk. Credit risk is the risk that the borrower will not make timely payments of principal and interest. 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. Debt securities are also subject to interest rate risk. Interest rate risk is the risk that the value of a debt security may fall when interest rates rise. In general, the market price of debt securities with longer maturities will go up or down more in response to changes in interest rates than the market price of shorter term securities. The Fund may be subject to a greater risk of rising interest rates due to the current period of historically low rates. |
■ | Derivatives Risk — The Fund’s use of derivatives may increase its costs, reduce the Fund’s returns and/or increase volatility. Derivatives 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 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 Internal Revenue Service (“IRS”). |
Regulatory Risk — Derivative contracts, including, without limitation, swaps, currency forwards and non-deliverable forwards, are subject to regulation under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) in the United States and under comparable regimes in Europe, Asia and other non-U.S. jurisdictions. Under the Dodd-Frank Act, certain derivatives will become subject to margin requirements and swap dealers will be required to collect margin from the Fund with respect to such derivatives. Implementation of such regulations under the Dodd-Frank Act regarding clearing, mandatory trading and margining of swaps and other derivatives may increase the costs to the Fund of trading in these instruments and, as a result, may affect returns to investors in the Fund. |
In December 2015, the Securities and Exchange Commission (“SEC”) proposed a new rule to regulate the use of derivatives by registered investment companies, such as the Fund. If the rule goes into effect, it could limit the ability of the Fund to invest or remain invested in derivatives. In addition, other future regulatory developments may impact the Fund’s ability to invest or remain invested in certain derivatives. Legislation or regulation may also change the way in which the Fund itself is regulated. BlackRock cannot predict the effects of any new governmental regulation that may be implemented on the ability of the Fund to use swaps or any other financial derivative product, and there can be no assurance that any new governmental regulation will not adversely affect the Fund’s ability to achieve its investment objective. |
■ | 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, including ETFs, 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 not offset by BlackRock through waivers to the Fund’s management fees). 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 to greater risk and increase its costs. As an open-end investment company registered with 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. |
■ | 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. |
■ | Repurchase Agreements and Purchase and Sale Contracts Risk — 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. |
■ | Rights Risk — The failure to exercise subscription rights to purchase common stock would result in the dilution of the Fund’s interest in the issuing company. The market for such rights is not well developed, and, accordingly, the Fund may not always realize full value on the sale of rights. |
■ | 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. |
■ | Small Cap Securities Risk — Small cap 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 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 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 securities may be particularly sensitive to changes in interest rates, borrowing costs and earnings. Investing in small cap 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. |
■ | Valuation Risk — The price the Fund could receive upon the sale of any particular portfolio investment may differ from the Fund’s valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair valuation methodology or a price provided by an independent pricing service. As a result, the price received upon the sale of an investment may be less than the value ascribed by the Fund, and the Fund could realize a greater than expected loss or lesser than expected gain upon the sale of the investment. Pricing services that value fixed-income securities generally utilize a range of market-based and security-specific inputs and assumptions, as well as considerations about general market conditions, to establish a price. Pricing services generally value fixed-income securities assuming orderly transactions of an institutional round lot size, but may be held or transactions may be conducted in such securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots. The Fund’s ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third-party service providers. |
■ | Warrants Risk — If the price of the underlying stock does not rise above the exercise price before the warrant expires, the warrant generally expires without any value and the Fund will lose any amount it paid for the warrant. Thus, investments in warrants may involve substantially more risk than investments in common stock. Warrants may trade in the same markets as their underlying stock; however, the price of the warrant does not necessarily move with the price of the underlying stock. |
■ | 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. |
Availability | Available only to (i) employer-sponsored retirement plans (not including SEP IRAs, SIMPLE IRAs and SARSEPs) (“Employer-Sponsored Retirement Plans”), (ii) collective trust funds, investment companies and other pooled investment vehicles, each of which may purchase shares of the Fund through a Financial Intermediary that has entered into an agreement with the Distributor to purchase such shares, (iii) “Institutional Investors,” which include, but are not limited to, endowments, foundations, family offices, local, city and state governmental institutions, corporations and insurance company separate accounts, each of which may purchase shares of the Fund through a Financial Intermediary that has entered into an agreement with the Distributor to purchase such shares and (iv) any other investors who met the eligibility criteria for BlackRock Shares or Class K Shares prior to August 15, 2016 and have continually held Class K Shares of the Fund in the same account since August 15, 2016. |
Minimum Investment |
There
is no minimum initial investment requirement for any Employer–Sponsored Retirement Plans or any other eligible investors other than Institutional Investors.
$5 million minimum initial investment for Institutional Investors. There is no minimum investment amount for additional purchases. |
Initial Sales Charge? | No. Entire purchase price is invested in shares of the Fund. |
Deferred Sales Charge? | No. |
Distribution and Service (12b-1) Fees? | No. |
Redemption Fees? | No. |
Your Choices | Important Information for You to Know | |
Initial Purchase |
Determine
the amount of your
investment |
There
is no minimum initial investment for any Employer-Sponsored Retirement Plans or any other investors other than Institutional Investors.
|
Have
your 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 New York Stock Exchange (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.
|
|
Or
contact BlackRock (for
accounts held directly with BlackRock) |
For investors not purchasing shares through an Employer-Sponsored Retirement Plan, to purchase shares directly from BlackRock, call (800) 537-4942 and request a new account application. | |
Add
to Your
Investment |
Purchase additional shares | There is no minimum investment amount for additional purchases. |
Have
your Financial
Intermediary submit your purchase order for additional shares |
To purchase additional shares, you may contact your Financial Intermediary or Employer-Sponsored Retirement Plan. | |
Or
contact BlackRock (for
accounts held directly with BlackRock) |
For
investors not purchasing shares through an Employer-Sponsored Retirement Plan
:
|
Your Choices | Important Information for You to Know | |
Add
to Your
Investment (continued) |
Or
contact BlackRock (for
accounts held directly with BlackRock) (continued) |
Purchase
by Internet
: You may purchase your shares, and view activity in your account, by logging onto the BlackRock website at www.blackrock.com. 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 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. Limits on amounts that may be purchased via Internet may vary. For additional information call BlackRock at (800) 537-4942.
|
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 BlackRock at (800) 537-4942 (for investors who are not purchasing shares through an Employer-Sponsored Retirement Plan) or contact your Financial Intermediary. | |
How to Pay for Shares | Making payment for purchases |
If
you are purchasing shares through an Employer-Sponsored Retirement Plan, 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 first business day following the Employer Sponsored Retirement Plan 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.
|
Your Choices | Important Information for You to Know | |
Full or Partial Redemption of Shares |
Have
your Financial
Intermediary submit your sales order |
If
you purchased shares through an Employer-Sponsored Retirement Plan, you can make redemption requests through your Financial Intermediary in accordance with the procedures applicable to your accounts. These procedures may vary according to the type
of account and the Financial Intermediary involved, and customers should consult their Financial Intermediary in this regard. Financial Intermediaries are responsible for transmitting redemption orders and crediting their customers’ accounts
with redemption proceeds on a timely basis. Information relating to such redemption services and charges to process a redemption of shares, if any, should be obtained by customers from their Financial Intermediaries.
|
Your Choices | Important Information for You to Know | |
Full or Partial Redemption of Shares (continued) |
Have
your Financial
Intermediary submit your sales order (continued) |
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.
|
Selling
shares held directly with
BlackRock |
Methods
of Redeeming if You Did Not Purchase Your Shares Through an Employer-Sponsored Retirement Plan
Redemption proceeds may be paid by check or, if the Fund has verified banking information on file, by wire transfer. |
Your Choices | Important Information for You to Know | |
Full or Partial Redemption of Shares (continued) |
Selling
shares held directly with
BlackRock (continued) |
elect
to receive distributions in cash and a check remains undeliverable or uncashed for more than 6 months, your cash election may also be changed automatically to reinvest and your future dividend and capital gains distributions will be reinvested in
the Fund at the net asset value as of the date of payment of the distribution.
***
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 | |
Transfer Shares to Another Financial Intermediary |
Transfer
to a participating
Financial Intermediary |
You
may transfer your Class K 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.
|
Transfer
to a non-participating
Financial Intermediary |
You
must either:
• Transfer your Class K Shares to an account with the Fund; or • Sell your Class K Shares. |
■ | 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 as may be permitted 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. |
Average Daily Net Assets |
Rate
of
Management Fee |
Not exceeding $8 billion | 0.60% |
In excess of $8 billion but not more than $10 billion | 0.56% |
In excess of $10 billion but not more than $12 billion | 0.54% |
In excess of $12 billion but not more than $17 billion | 0.52% |
In excess of $17 billion but not more than $25 billion | 0.51% |
In excess of $25 billion but not more than $30 billion | 0.50% |
In excess of $30 billion but not more than $40 billion | 0.47% |
In excess of $40 billion | 0.45% |
Average Daily Net Assets |
Rate
of
Management Fee |
Not exceeding $8 billion | 0.60% |
In excess of $8 billion but not more than $10 billion | 0.56% |
In excess of $10 billion but not more than $12 billion | 0.54% |
In excess of $12 billion but not more than $17 billion | 0.52% |
In excess of $17 billion but not more than $25 billion | 0.51% |
In excess of $25 billion but not more than $30 billion | 0.50% |
In excess of $30 billion but not more than $40 billion | 0.49% |
In excess of $40 billion | 0.48% |
Portfolio Manager | Primary Role | Since | Title and Recent Biography |
Robert M. Shearer, CFA | Jointly and primarily responsible for the day-to-day management of the Fund’s portfolio, including setting the Fund’s overall investment strategy and overseeing the management of the Fund. | 2001 | Managing Director of BlackRock, Inc. since 2006. |
Tony DeSpirito | Jointly and primarily responsible for the day-to-day management of the Fund’s portfolio, including setting the Fund’s overall investment strategy and overseeing the management of the Fund. | 2014 | Managing Director of BlackRock, Inc. since 2014; Managing Principal, Portfolio Manager and Member of the Executive Committee of Pzena Investment Management from 2009 to 2014. |
David J. Cassese, CFA | Jointly and primarily responsible for the day-to-day management of the Fund’s portfolio, including setting the Fund’s overall investment strategy and overseeing the management of the Fund. | 2011 | Director of BlackRock, Inc. since 2011; Senior Vice President of Oppenheimer Capital from 2008 to 2011; Vice President of Oppenheimer Capital from 2005 to 2008. |
Class K | |
Period
March 28, 2016 1 to July 31, 2016 |
|
Per Share Operating Performance | |
Net asset value, beginning of period | $ 20.97 |
Net investment income 2 | 0.09 |
Net realized and unrealized gain | 1.48 |
Net increase from investment operations | 1.57 |
Distributions from net investment income 3 | (0.22) |
Net asset value, end of period | $ 22.32 |
Total Return 4 | |
Based on net asset value | 7.50% 5 |
Ratios to Average Net Assets | |
Total expenses | 0.58% 6,7,8 |
Total expenses after fees waived | 0.57% 6,8 |
Net investment income | 1.22% 6 |
Supplemental Data | |
Net assets, end of period (000) | $ 22,861 |
Portfolio turnover rate | 25% |
1 | Commencement of operations. |
2 | Based on average shares outstanding. |
3 | Distributions for annual periods determined in accordance with federal income tax regulations. |
4 | Where applicable, assumes the reinvestment of distributions. |
5 | Aggregate total return. |
6 | Annualized. |
7 | Audit and offering costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expense ratio would have been 0.58%. |
8 | Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
Period
March 28, 2016 1 to July 31, 2016 |
|
Investments in underlying funds | 0.01% |
■ | Access the BlackRock website at http://www.blackrock.com/edelivery; and |
■ | Log into your account. |
Class | Ticker Symbol | |
Investor A
Shares
|
MDDVX | |
Investor B
Shares
|
MBDVX | |
Investor C
Shares
|
MCDVX | |
Investor C1
Shares
|
BEDCX | |
Institutional
Shares
|
MADVX | |
Class R
Shares
|
MRDVX | |
Service
Shares
|
MSDVX | |
Class K
Shares
|
MKDVX |
BlackRock
Equity
Dividend Fund |
|
144A Securities | X |
Asset-Backed Securities | |
Asset-Based Securities | |
Precious Metal-Related Securities | X |
Bank Loans | |
Borrowing and Leverage | X |
Cash Flows; Expenses | |
Cash Management | |
Collateralized Debt Obligations | |
Collateralized Bond Obligations | |
Collateralized Loan Obligations | |
Commercial Paper | X |
Commodity-Linked Derivative Instruments and Hybrid Instruments | |
Qualifying Hybrid Instruments | |
Hybrid Instruments Without Principal Protection | |
Limitations on Leverage | |
Counterparty Risk | |
Convertible Securities | X |
Cyber Security Issues | 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 | |
Contracts for Difference | X |
Credit Linked Securities | |
Interest Rate Transactions and Swaptions | |
Total Return Swap Agreements | |
Types of Options | X |
Options on Securities and Securities Indices | X |
Call Options | X |
BlackRock
Equity
Dividend Fund |
|
Put Options | X |
Options on Government National Mortgage Association (“GNMA”) Certificates | |
Risks Associated with Options | X |
Futures | X |
Risks Associated with Futures | X |
Foreign Exchange Transactions | X |
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 | |
Index Risk | |
Additional Risk Factors of OTC Transactions; Limitations on the Use of OTC Derivatives | X |
Distressed Securities | |
Dollar Rolls | |
Equity Securities | X |
Exchange Traded Notes (“ETNs”) | |
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 |
Publicly Available Information | X |
Settlement Risk | X |
Funding Agreements | |
Guarantees | |
Illiquid or Restricted Securities | X |
Inflation-Indexed Bonds | |
Inflation Risk | X |
Information Concerning the Indexes | |
Standard & Poor’s 500 Index | |
Russell Indexes | |
MSCI Indexes | |
FTSE Indexes | |
Initial Public Offering (“IPO”) Risk | X |
Investment Grade Debt Obligations | X |
Investment in Emerging Markets | X |
Brady Bonds | |
Investment in Other Investment Companies | X |
Exchange-Traded Funds | X |
Junk Bonds | |
Lease Obligations | |
Liquidity Management | X |
Master Limited Partnerships | X |
Merger Transaction Risk | |
Mezzanine Investments | |
Money Market Obligations of Domestic Banks, Foreign Banks and Foreign Branches of U.S. Banks | X |
Mortgage-Related Securities | X |
BlackRock
Equity
Dividend Fund |
|
Mortgage-Backed Securities | X |
Collateralized Mortgage Obligations (“CMOs”) | X |
Adjustable Rate Mortgage Securities | |
CMO Residuals | |
Stripped Mortgage-Backed Securities | |
Tiered Index Bonds | |
TBA Commitments | X |
Municipal Bonds | |
Risk Factors and Special Considerations Relating to Municipal Bonds | |
General Obligation Bonds | |
Revenue Bonds | |
Private Activity Bonds (“PABs”) | |
Tender Option Bonds | |
Participation Notes | |
Pay-in-kind-Bonds | |
Portfolio Turnover Rates | |
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 | |
Rights Offerings and Warrants to Purchase | X |
Risks of Investing in China | X |
Securities Lending | X |
Securities of Smaller or Emerging Growth Companies | X |
Short Sales | |
Sovereign Debt | |
Standby Commitment Agreements | |
Stripped Securities | |
Structured Notes | |
Supranational Entities | X |
Trust Preferred Securities | X |
U.S. Government Obligations | X |
U.S. Treasury Obligations | X |
Utility Industries | X |
When-Issued Securities, Delayed Delivery Securities and Forward Commitments | X |
Yields and Ratings | |
Zero Coupon Securities |
Trustees | Experience, Qualifications and Skills | |
Independent Trustees | ||
James H. Bodurtha | James H. Bodurtha has served for more than 23 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 served for 11 years 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 18 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. | |
Donald W. Burton | Donald W. Burton has served for approximately 29 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 14 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. | |
Lena G. Goldberg | Lena G. Goldberg has more than 20 years of business and oversight experience, most recently through her service as a senior lecturer at Harvard Business School. Prior thereto, she held legal and management positions at FMR LLC/Fidelity Investments as well as positions on the boards of various Fidelity subsidiaries over a 12-year period. She has additional corporate governance experience as a member of board and advisory committees for privately held corporations and non-profit organizations. Ms. Goldberg also has more than 17 years of legal experience as an attorney in private practice, including as a partner in a law firm. |
Trustees | Experience, Qualifications and Skills | |
Robert M. Hernandez | Robert M. Hernandez has served for approximately 21 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. | |
John F. O’Brien | John F. O’Brien 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. 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. | |
Donald C. Opatrny | Donald C. Opatrny has more than 39 years of business, oversight and executive experience, including through his service as president, director and investment committee chair for academic and not-for-profit organizations, and his experience as a partner, managing director and advisory director at Goldman Sachs for 32 years. He also has investment management experience as a board member of Athena Capital Advisors LLC. | |
Roberta Cooper Ramo | Roberta Cooper Ramo 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 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 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-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. |
Trustees | Experience, Qualifications and Skills | |
Fred G. Weiss | Fred G. Weiss has served for approximately 17 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 Trustees | ||
Robert Fairbairn | Robert Fairbairn has more than 20 years of experience with BlackRock, Inc. and over 28 years in finance and asset management. In particular, Mr. Fairbairn’s positions as Senior Managing Director of BlackRock, Inc., Global Head of BlackRock’s Retail and iShares ® businesses, and Member of BlackRock’s Global Executive and Global Operating Committees provide the Board with a wealth of practical business knowledge and leadership. In addition, Mr. Fairbairn has global investment management and oversight experience through his former positions as Head of BlackRock’s Global Client Group and Chairman of BlackRock’s international businesses. Prior to joining BlackRock, Mr. Fairbairn was Senior Vice President and Head of the EMEA Pacific region at MLIM, a member of the MLIM Executive Committee, head of the EMEA Sales Division and Chief Operating Officer of the EMEA Pacific region. | |
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 Advisors, LLC 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 Advisors, LLC and as Treasurer of certain closed-end funds in the BlackRock Fund Complex provide the Board with direct knowledge of the operations of the BlackRock-advised Funds and their investment adviser. Mr. Gabbay’s previous service on and long-standing relationship with the Board also provide him with a specific understanding of the BlackRock-advised Funds, their operations, and the business and regulatory issues facing the BlackRock-advised Funds. | |
Henry R. Keizer | Henry R. Keizer has executive, financial, operational, strategic and global expertise from his 35 year career at KPMG, a global professional services organization. He has extensive experience with issues facing complex, global companies and expertise in financial reporting, accounting, auditing, risk management, and regulatory affairs for such companies. Mr. Keizer’s experience also includes service as a director and audit committee chair to both publicly and privately held organizations across numerous industries including professional services, property and casualty reinsurance, insurance, diversified financial services, banking, direct to consumer, business to business and technology. Mr. Keizer is a certified public accountant and also served on the board of the American Institute of Certified Public Accountants. |
Trustees | Experience, Qualifications and Skills | |
John M. Perlowski | John M. Perlowski’s experience as Managing Director of BlackRock, Inc. since 2009, as the Head of BlackRock Global Fund & Accounting Services since 2009, and as President and Chief Executive Officer of the BlackRock-advised Funds provides him with a strong understanding of the BlackRock-advised Funds, their operations, and the business and regulatory issues facing the BlackRock-advised Funds. Mr. Perlowski’s prior position as Managing Director and Chief Operating Officer of the Global Product Group at Goldman Sachs Asset Management, and his former service as Treasurer and Senior Vice President of the Goldman Sachs Mutual Funds and as Director of the Goldman Sachs Offshore Funds provides the Board with the benefit of his experience with the management practices of other financial companies. |
Name,
Address
1
and Year of Birth |
Position(s)
Held with the Fund |
Length
of
Time Served 2,3 |
Principal
Occupation(s)
During Past Five Years |
Number
of BlackRock-Advised Registered
Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen |
Public
Company
and Other Investment Company Directorships Held During Past Five Years |
|||||
Independent Trustees | ||||||||||
James
H. Bodurtha
|
Trustee | Since 2007 | 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; Director, ICI Mutual since 2010. | 28 RICs consisting of 98 Portfolios | None | |||||
Bruce
R. Bond
|
Trustee | Since 2007 | 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 98 Portfolios | None | |||||
Donald
W. Burton
|
Trustee | Since 2007 | Managing General Partner, The Burton Partnership, LP (an investment partnership) since 1979; Managing General Partner, The Burton Partnership (QP), LP (an investment partnership) since 2000; 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; Director, Besito (restaurant) since 2013; Director, PDQ South Texas (restaurant) since 2013; Director, ITC/Talon (data) since 2015. | 28 RICs consisting of 98 Portfolios |
Knology,
Inc.
(telecommunications); Capital Southwest (financial) |
Name,
Address
1
and Year of Birth |
Position(s)
Held with the Fund |
Length
of
Time Served 2,3 |
Principal
Occupation(s)
During Past Five Years |
Number
of BlackRock-Advised Registered
Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen |
Public
Company
and Other Investment Company Directorships Held During Past Five Years |
|||||
Honorable
Stuart E. Eizenstat
|
Trustee | Since 2007 | 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 98 Portfolios | Alcatel-Lucent (telecommunications); Global Specialty Metallurgical; UPS Corporation (delivery service) | |||||
Lena
G. Goldberg
|
Trustee | Since 2016 | Senior Lecturer, Harvard Business School, since 2008; Executive Vice President, FMR LLC/Fidelity Investments (financial services) from 2007 to 2008, Executive Vice President and General Counsel thereof from 2002 to 2007, Senior Vice President and General Counsel thereof from 1999 to 2002, Vice President and General Counsel thereof from 1997 to 1999, Senior Vice President and Deputy General Counsel thereof in 1997, and Vice President and Corporate Counsel thereof from 1996 to 1997; Partner, Sullivan & Worcester LLP from 1985 to 1996 and Associate thereof from 1979 to 1985. | 28 RICs consisting of 98 Portfolios | None | |||||
Robert
M. Hernandez
|
Trustee | Since 2007 | Director, Vice Chairman and Chief Financial Officer of USX Corporation (energy and steel business) from 1991 to 2001; Director, RTI International Metals, Inc. from 1990 to 2015; Director, TE Connectivity (electronics) from 2006 to 2012. | 28 RICs consisting of 98 Portfolios | Chubb Limited (insurance company); Eastman Chemical Company | |||||
John
F. O’Brien
|
Trustee | Since 2007 | Trustee, Woods Hole Oceanographic Institute since 2003 and Chairman thereof from 2009 to 2015; Co-Founder and Managing Director, Board Leaders LLC (director education) since 2005. | 28 RICs consisting of 98 Portfolios | Cabot Corporation (chemicals); LKQ Corporation (auto parts manufacturing); TJX Companies, Inc. (retailer) | |||||
Donald
C. Opatrny
|
Trustee | Since 2015 | Trustee, Member of the Executive Committee and Chair of the Investment Committee, Cornell University since 2004; Member of the Board and Investment Committee, University School since 2007; Member of the Investment Committee, Mellon Foundation from 2009 to 2015; President and Trustee, the Center for the Arts, Jackson Hole since 2011; Director, Athena Capital Advisors LLC (investment management firm) since 2013; Trustee and Chair of the Investment Committee, Community Foundation of Jackson Hole since 2014; Trustee, Artstor (a Mellon Foundation affiliate) from 2010 to 2015; President, Trustee and Member of the Investment Committee, The Aldrich Contemporary Art Museum from 2007 to 2014. | 28 RICs consisting of 98 Portfolios | None |
Name,
Address
1
and Year of Birth |
Position(s)
Held with the Fund |
Length
of
Time Served 2,3 |
Principal
Occupation(s)
During Past Five Years |
Number
of BlackRock-Advised Registered
Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen |
Public
Company
and Other Investment Company Directorships Held During Past Five Years |
|||||
Roberta
Cooper Ramo
|
Trustee | Since 2007 | Shareholder and Attorney, Modrall, Sperling, Roehl, Harris & Sisk, P.A. (law firm) since 1993; Director, ECMC Group (service provider to students, schools and lenders) since 2001; President, The American Law Institute (non-profit) since 2008; Vice President, Santa Fe Opera (non-profit) since 2011; Chair, Think New Mexico (non-profit) since 2013; Chairman of the Board, Cooper’s Inc. (retail) from 1999 to 2011. | 28 RICs consisting of 98 Portfolios | None | |||||
David
H. Walsh
|
Trustee | Since 2007 | Director, National Museum of Wildlife Art since 2007; Trustee, University of Wyoming Foundation from 2008 to 2012; Director, The American Museum of Fly Fishing since 1997. | 28 RICs consisting of 98 Portfolios | None | |||||
Fred
G. Weiss
|
Trustee | Since 2007 | Managing Director, FGW Consultancy LLC (consulting and investment company) since 1997; Director and Treasurer, Michael J. Fox Foundation for Parkinson’s Research since 2000. | 28 RICs consisting of 98 Portfolios |
Allergan
plc
(pharmaceuticals) |
|||||
Interested Trustees 4 | ||||||||||
Robert
Fairbairn
|
Trustee | Since 2015 | Senior Managing Director of BlackRock, Inc. since 2010; Global Head of BlackRock’s Retail and iShares ® businesses since 2012; Member of BlackRock’s Global Executive and Global Operating Committees; Head of BlackRock’s Global Client Group from 2009 to 2012; Chairman of BlackRock’s international businesses from 2007 to 2010. | 28 RICs consisting of 98 Portfolios | None | |||||
Henry
Gabbay
|
Trustee | Since 2007 | Consultant, BlackRock, Inc. from 2007 to 2008; Managing Director, BlackRock, Inc. from 1989 to 2007; Chief Administrative Officer, BlackRock Advisors, LLC 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. | 28 RICs consisting of 98 Portfolios | None |
Name,
Address
1
and Year of Birth |
Position(s)
Held with the Fund |
Length
of
Time Served 2,3 |
Principal
Occupation(s)
During Past Five Years |
Number
of BlackRock-Advised Registered
Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen |
Public
Company
and Other Investment Company Directorships Held During Past Five Years |
|||||
Henry
R. Keizer
|
Trustee | Since 2016 | Director, Park Indemnity Ltd. (captive insurer) since 2010; Director, MUFG Americas Holdings Corporation and MUFG Union Bank, N.A. (financial and bank holding company) from 2014 to 2016; Director, Montpelier Re Holdings, Ltd. (publicly held property and casual reinsurance) from 2013 to 2015; Director, American Institute of Certified Public Accountants from 2009 to 2011; Director, KPMG LLP (audit, tax and advisory services) in 2004 to 2005 and 2010 to 2012; Director, KPMG International in 2012, Deputy Chairman and Chief Operating Officer thereof from 2010 to 2012 and U.S. Vice Chairman of Audit thereof from 2005 to 2010; Global Head of Audit, KPMGI (consortium of KPMG firms), from 2006 to 2010; Director, YMCA of Greater New York from 2006 to 2010. | 28 RICs consisting of 98 Portfolios | Hertz Global Holdings (car rental); WABCO (commercial vehicle safety systems) | |||||
John
M. Perlowski
|
Trustee, President and Chief Executive Officer | Since 2015 (Trustee); Since 2010 (President and Chief Executive Officer) | Managing Director of BlackRock, Inc. since 2009; Head of BlackRock Global Fund & Accounting Services 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. | 128 RICs consisting of 315 Portfolios | None |
1 | The address of each Trustee is c/o BlackRock, Inc., 55 East 52 nd Street, New York, NY 10055. |
2 | Each Independent Trustee 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, or until December 31 of the year in which he or she turns 75. The Board has determined to extend the terms of Independent Trustees on a case-by-case basis, as appropriate. The Board has unanimously approved extending the mandatory retirement age for Messrs. Walsh and Weiss until January 31, 2017, which the Board believes to be in the best interests of shareholders of the Fund. Interested Trustees serve until their successor is duly elected and qualifies or until their earlier death, resignation, retirement or removal as provided by the Fund’s by-laws or statute, or until December 31 of the year in which they turn 72. |
3 | 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 Independent Trustees as joining the Fund’s board in 2007, those Trustees first became members of the boards 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; Robert M. Hernandez, 1996; John F. O’Brien, 2005; Roberta Cooper Ramo, 1999; David H. Walsh, 2003; and Fred G. Weiss, 1998. |
4 | Messrs. Fairbairn and Perlowski are both “interested persons,” as defined in the Investment Company Act, of the Fund based on their positions with BlackRock, Inc. and its affiliates. Mr. Perlowski is also a board member of the BlackRock Closed-End Complex and the BlackRock Equity-Liquidity Complex. Mr. Gabbay may be deemed an “interested person” of the Fund based on his former positions with BlackRock, Inc. and its affiliates. Mr. Keizer may be deemed an “interested person” of the Fund based on his former directorship at another company which is not an affiliate of BlackRock, Inc. It is anticipated that Mr. Keizer will become an Independent Trustee effective January 31, 2017. Messrs. Gabbay and Keizer do not currently serve as officers or employees of BlackRock, Inc. or its affiliates or own any securities of BlackRock, Inc. or The PNC Financial Services Group, Inc. Each of Messrs. Gabbay and Keizer is a non-management Interested Trustee. |
Name,
Address
1
and Year of Birth |
Position(s)
Held with the Fund |
Length
of
Time Served as an Officer |
Principal
Occupation(s)
During Past Five Years |
|||
Officers Who Are Not Trustees 2 | ||||||
Jennifer
McGovern
|
Vice President | Since 2014 | Managing Director of BlackRock, Inc. since 2016; Director of BlackRock, Inc. from 2011 to 2015; Head of Product Structure and Oversight for BlackRock’s U.S. Wealth Advisory Group since 2013; Vice President of BlackRock, Inc. from 2008 to 2010. | |||
Neal
J. Andrews
|
Chief Financial Officer | Since 2007 | 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. | |||
Jay
M. Fife
|
Treasurer | Since 2007 | Managing Director of BlackRock, Inc. since 2007; Director of BlackRock, Inc. in 2006; Assistant Treasurer of the MLIM and Fund Asset Management, L.P. advised funds from 2005 to 2006; Director of MLIM Fund Services Group from 2001 to 2006. | |||
Charles
Park
|
Chief Compliance Officer | Since 2014 | Anti-Money Laundering Compliance Officer for the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and the Closed-End Complex from 2014 to 2015; Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and the Closed-End Complex since 2014; Principal of and Chief Compliance Officer for iShares ® Delaware Trust Sponsor LLC since 2012 and BlackRock Fund Advisors (“BFA”) since 2006; Chief Compliance Officer for the BFA-advised iShares ® exchange traded funds since 2006; Chief Compliance Officer for BlackRock Asset Management International Inc. since 2012. | |||
Fernanda
Piedra
|
Anti-Money Laundering Compliance Officer | Since 2015 | Director of BlackRock, Inc. since 2014; Anti-Money Laundering Compliance Officer and Regional Head of Financial Crime for the Americas at BlackRock, Inc. since 2014; Head of Regulatory Changes and Remediation for the Asset Wealth Management Division of Deutsche Bank from 2010 to 2014; Vice President of Goldman Sachs (Anti-Money Laundering/Suspicious Activities Group) from 2004 to 2010. | |||
Benjamin
Archibald
|
Secretary | Since 2012 | Managing Director of BlackRock, Inc. since 2014; Director of BlackRock, Inc. from 2010 to 2013; Secretary of the iShares ® exchange traded funds since 2015; Secretary of the BlackRock-advised mutual funds since 2012. |
1 | The address of each Officer is c/o BlackRock, Inc., 55 East 52 nd Street, New York, NY 10055. |
2 | Officers of the Fund serve at the pleasure of the Board. |
Name of Trustee |
Aggregate
Dollar
Range of Equity Securities in the Fund |
Aggregate
Dollar
Range of Equity Securities in BlackRock-Advised Funds |
||
Interested Trustees: | ||||
Robert
Fairbairn
|
None | $50,001 - $100,000 | ||
Henry
Gabbay
|
None | Over $100,000 | ||
Henry R.
Keizer
1
|
None | None | ||
John M.
Perlowski
|
None | Over $100,000 | ||
Independent Trustees: | ||||
James H.
Bodurtha
|
None | Over $100,000 | ||
Bruce R.
Bond
|
None | Over $100,000 | ||
Donald W.
Burton
|
None | Over $100,000 | ||
Honorable Stuart E.
Eizenstat
|
None | Over $100,000 | ||
Lena G.
Goldberg
2
|
None | None | ||
Robert M.
Hernandez
|
None | Over $100,000 | ||
John F.
O’Brien
|
None | Over $100,000 | ||
Donald C.
Opatrny
3
|
None | None | ||
Roberta Cooper
Ramo
|
None | Over $100,000 | ||
David H.
Walsh
|
None | Over $100,000 | ||
Fred G.
Weiss
|
Over $100,000 | Over $100,000 |
1 | Mr. Keizer was appointed to serve as a Trustee of the Fund effective July 28, 2016. |
2 | Ms. Goldberg was appointed to serve as a Trustee of the Fund effective November 4, 2016. |
3 | Mr. Opatrny was appointed to serve as a Trustee of the Fund effective as of the close of business on May 13, 2015. |
Name 1 |
Aggregate
Compensation from the Fund |
Estimated
Annual
Benefits Upon Retirement |
Aggregate
Compensation from the Fund and Other BlackRock Advised Funds |
|||
Interested Trustees : 2 | ||||||
Robert
Fairbairn
|
None | None | None | |||
Henry
Gabbay
|
$21,205 | None | $465,000 | |||
Henry R.
Keizer
3
|
$2,573 | None | None | |||
John M.
Perlowski
|
None | None | None | |||
Independent Trustees: | ||||||
James H.
Bodurtha
4
|
$25,099 | None | $340,000 | |||
Bruce R.
Bond
|
$21,205 | None | $305,000 | |||
Valerie G.
Brown
5
|
$14,434 | None | $191,057 | |||
Donald W.
Burton
|
$21,205 | None | $305,000 | |||
Honorable Stuart E.
Eizenstat
6
|
$25,099 | None | $340,000 | |||
Kenneth A.
Froot
7
|
$19,421 | None | $305,000 | |||
Lena G.
Goldberg
8
|
None | None | None | |||
Robert M.
Hernandez
9
|
$34,000 | None | $420,000 | |||
John F.
O’Brien
|
$21,205 | None | $305,000 | |||
Donald C.
Opatrny
10
|
$21,205 | None | $191,057 | |||
Roberta Cooper
Ramo
|
$21,205 | None | $305,000 | |||
David H.
Walsh
11
|
$25,099 | None | $340,000 | |||
Fred G.
Weiss
12
|
$25,175 | None | $375,000 |
1 | For the number of BlackRock-advised Funds from which each Trustee receives compensation see the Biographical Information Chart beginning on page I-12. |
2 | Messrs. Fairbairn and Perlowski receive no compensation from the BlackRock-advised Funds for their service as Trustees/Directors. Messrs. Gabbay and Keizer receive compensation from the BlackRock-advised Funds for their service as non-management Interested Trustees/Directors. Mr. Gabbay began receiving compensation from the BlackRock-advised Funds for his service as a Trustee/Director effective January 1, 2009. Mr. Keizer began receiving compensation for his service as a Trustee/Director upon his appointment as a Trustee. |
3 | Mr. Keizer was appointed to serve as a Trustee of the Fund effective July 28, 2016. |
4 | Chairman of the Compliance Committee. |
5 | Ms. Brown resigned as a Trustee of the Fund effective May 6, 2016. |
6 | Chairman of the Governance Committee. |
7 | Mr. Froot resigned as a Trustee of the Fund effective May 10, 2016. |
8 | Ms. Goldberg was appointed to serve as a Trustee of the Fund effective November 4, 2016. |
9 | Chairman of the Board of Trustees. |
10 | Mr. Opatrny was appointed to serve as a Trustee of the Fund effective as of the close of business on May 13, 2015. |
11 | Chairman of the Performance Committee. |
12 | Vice Chairman of the Board of Trustees and Chairman of the Audit Committee. |
Average Daily Net Assets |
Rate
of
Management Fee |
|
Not exceeding $8
billion
|
0.60% | |
In excess of $8 billion but not more than $10
billion
|
0.56% | |
In excess of $10 billion but not more than $12
billion
|
0.54% | |
In excess of $12 billion but not more than $17
billion
|
0.52% | |
In excess of $17 billion but not more than $25
billion
|
0.51% | |
In excess of $25 billion but not more than $30
billion
|
0.50% | |
In excess of $30 billion but not more than $40
billion
|
0.47% | |
In excess of $40
billion
|
0.45% |
Average Daily Net Assets |
Rate
of
Management Fee |
|
Not exceeding $8
billion
|
0.60% | |
In excess of $8 billion but not more than $10
billion
|
0.56% | |
In excess of $10 billion but not more than $12
billion
|
0.54% | |
In excess of $12 billion but not more than $17
billion
|
0.52% | |
In excess of $17 billion but not more than $25
billion
|
0.51% | |
In excess of $25 billion but not more than $30
billion
|
0.50% | |
In excess of $30 billion but not more than $40
billion
|
0.49% | |
In excess of $40
billion
|
0.48% |
Average Daily Net Assets |
Rate
of
Management Fee |
|
Not exceeding $8
billion
|
0.60% | |
In excess of $8 billion but not more than $10
billion
|
0.56% | |
In excess of $10 billion but not more than $12
billion
|
0.54% | |
In excess of $12 billion but not more than $17
billion
|
0.52% | |
In excess of $17 billion but not more than $25
billion
|
0.51% | |
In excess of $25 billion but not more than $35
billion
|
0.50% | |
In excess of $35 billion but not more than $50
billion
|
0.49% | |
In excess of $50
billion
|
0.48% |
Fiscal Year Ended July 31, |
Paid
to
the Manager |
Waived
by
the Manager 1 |
Reimbursement
by the Manager |
|||
2016
|
$121,267,078 | $5,347,383 | $0 | |||
2015
|
$151,855,019 | $1,527,967 | $0 | |||
2014
|
$162,300,957 | $ 220,548 | $0 |
1 | The Manager voluntarily agreed to waive a portion of the Fund’s management fee in connection with the Fund’s investment in an affiliated money market fund. |
Fiscal Year Ended July 31, | Paid to the Sub-Adviser | |
2016
|
N/A | |
2015
|
N/A | |
2014
1
|
$109,597,300 |
1 | The information shown is for the period from August 1, 2013 through June 30, 2014. |
Portfolio Manager | Dollar Range | |
Robert M. Shearer,
CFA
|
Over $1,000,000 | |
Tony
DeSpirito
|
Over $1,000,000 | |
David J.
Cassese
|
$100,001-$500,000 |
Fiscal Year Ended July 31, | Fees Reimbursed | |
2016
|
$166,848 | |
2015
|
$191,989 | |
2014
|
$133,554 |
Fiscal Year Ended July 31, |
Paid
to
State Street |
Paid
to
the Manager |
||
2016
|
$2,025,218 | $238,954 | ||
2015
|
$2,677,217 | $300,939 | ||
2014
|
$2,799,667 | $332,216 |
Investor A Shares | ||||||||
For
the Fiscal Year
Ended July 31, |
Gross
Sales
Charges Collected |
Sales
Charges
Retained by BRIL |
Sales
Charges
Paid to Affiliates |
CDSCs
Received
on Redemption of Load-Waived Shares |
||||
2016
|
$ 4,716,676 | $337,272 | $337,272 | $ 82,182 | ||||
2015
|
$ 7,521,409 | $534,416 | $534,416 | $155,861 | ||||
2014
|
$11,482,836 | $812,733 | $812,733 | $ 83,075 |
Investor B 1 Shares | ||||
For
the Fiscal Year
Ended July 31, |
CDSCs
Received by BRIL |
CDSCs
Paid to Affiliates |
||
2016
|
$ 73 | $ 73 | ||
2015
|
$ 5,475 | $ 5,475 | ||
2014
|
$20,104 | $20,104 |
Investor C Shares | ||||
For
the Fiscal Year
Ended July 31, |
CDSCs
Received by BRIL |
CDSCs
Paid to Affiliates |
||
2016
|
$171,610 | $171,610 | ||
2015
|
$276,099 | $276,099 | ||
2014
|
$408,235 | $408,235 |
Investor C1 Shares | ||||
For
the Fiscal Year
Ended July 31, |
CDSCs
Received by BRIL |
CDSCs
Paid to Affiliates |
||
2016
|
$ 0 | $ 0 | ||
2015
|
$20 | $20 | ||
2014
|
$71 | $71 |
1 | Additional Investor B CDSCs payable to the Distributor may have been waived or converted to a contingent obligation in connection with a shareholder’s participation in certain fee-based programs. |
Class | Paid to BRIL | |
Investor A
Shares
|
$15,419,011 | |
Investor B
Shares
|
$ 147,992 | |
Investor C
Shares
|
$30,636,948 | |
Investor C1
Shares
|
$ 54,221 | |
Class R
Shares
|
$ 4,415,817 | |
Service
Shares
|
$ 221,199 |
Investor
A
Shares |
|
Net
Assets
|
$5,951,054,291 |
Number of Shares
Outstanding
|
267,160,325 |
Net Asset Value Per Share (net assets divided by number of shares
outstanding)
|
$22.28 |
Sales Charge (for Investor A Shares: 5.25% of offering price; 5.54% of net asset value per
share)
1
|
1.23 |
Offering
Price
|
$23.51 |
1 | Rounded to the nearest one-hundredth percent; assumes maximum sales charge is applicable. |
Fiscal Year Ended July 31, |
Aggregate
Brokerage
Commissions Paid 1 |
Commissions
Paid
to Affiliates |
||
2016
|
$5,327,453 | $0 | ||
2015
|
$8,156,711 | $0 | ||
2014
|
$3,710,607 | $0 |
1 | The increase in brokerage commissions paid by the Fund from 2014 to 2016 was due to an increase in trading activity and the decrease in brokerage commissions from 2015 to 2016 was due to a change in trade execution style. |
Amount
of Commissions
Paid to Brokers for Providing Research Services |
Amount
of Brokerage
Transactions Involved |
|||
$4,821,370 | $12,507,542,407 |
Fiscal Year Ended July 31, |
Amount
Paid |
|
2016
|
$134,144 | |
2015
|
$ 58,796 | |
2014
|
$200,197 |
Regular Broker-Dealer | Debt (D)/Equity (E) | Aggregate Holdings (000’s) | ||
Goldman Sachs Group,
Inc.
|
E | $254,820 |
Name | Address | % | Class | |||
Merrill
Lynch Pierce Fenner & Smith
Incorporated |
4800
East Deer Lake Drive 3
rd
Floor
Jacksonville, FL 32246-6484 |
28.88% | Investor A Shares | |||
National Financial Services LLC |
499
Washington Blvd 5th Floor
Jersey City, NJ 07310-2010 |
8.85% | Investor A Shares | |||
American Enterprise Investment SVC |
707
2nd Ave S
Minneapolis, MN 55402-2405 |
8.73% | Investor A Shares | |||
Edward D. Jones and Co |
12555
Manchester Road
St. Louis, MO 63131-3710 |
5.50% | Investor A Shares | |||
Merrill
Lynch Pierce Fenner & Smith
Incorporated |
4800
East Deer Lake Drive 3
rd
Floor
Jacksonville, FL 32246-6484 |
33.78% | Investor B Shares | |||
National Financial Services LLC |
499
Washington Blvd 5th Floor
Jersey City, NJ 07310-2010 |
13.69% | Investor B Shares | |||
First Clearing, LLC |
2801
Market Street
St. Louis, MO 63103 |
12.85% | Investor B Shares | |||
Pershing LLC |
1
Pershing Plaza
Jersey City, NJ 07399-0001 |
7.54% | Investor B Shares | |||
Edward D. Jones and Co |
12555
Manchester Road
St. Louis, MO 63131-3710 |
5.92% | Investor B Shares | |||
Merrill
Lynch Pierce Fenner & Smith
Incorporated |
4800
East Deer Lake Drive 3
rd
Floor
Jacksonville, FL 32246-6484 |
43.98% | Investor C Shares |
Name | Address | % | Class | |||
Morgan Stanley & Co. |
Harborside
Financial Center
Plaza II 3rd Floor Jersey City, NJ 07311 |
15.22% | Investor C Shares | |||
Pershing LLC |
1
Pershing Plaza
Jersey City, NJ 07399-0001 |
5.46% | Investor C Shares | |||
UBS WM USA |
499
Washington Blvd 9th Floor
Jersey City, NJ 07310-2055 |
5.34% | Investor C Shares | |||
First Clearing, LLC |
2801
Market Street
St. Louis, MO 63103 |
5.14% | Investor C Shares | |||
Merrill
Lynch Pierce Fenner & Smith
Incorporated |
4800
East Deer Lake Drive 3
rd
Floor
Jacksonville, FL 32246-6484 |
79.09% | Investor C1 Shares | |||
UBS WM USA |
499
Washington Blvd 9th Floor
Jersey City, NJ 07310-2055 |
6.23% | Investor C1 Shares | |||
Merrill
Lynch Pierce Fenner & Smith
Incorporated |
4800
East Deer Lake Drive 3
rd
Floor
Jacksonville, FL 32246-6484 |
23.59% | Institutional Shares | |||
Morgan Stanley & Co. |
Harborside
Financial Center
Plaza II 3rd Floor Jersey City, NJ 07311 |
13.01% | Institutional Shares | |||
Edward D. Jones and Co. |
12555
Manchester Road
St. Louis, MO 63131-3710 |
11.52% | Institutional Shares | |||
National Financial Services LLC |
499
Washington Blvd 5
th
Floor
Jersey City, NJ 07310-2010 |
9.56% | Institutional Shares | |||
UBS WM USA |
499
Washington Blvd 9th Floor
Jersey City, NJ 07310-2055 |
5.36% | Institutional Shares | |||
Voya Retirement Insurance and Annuity Company |
One
Orange Way
Windsor, CT 06095-4774 |
18.53% | Class R Shares | |||
Voya Institutional Trust Company |
One
Orange Way
Windsor, CT 06095-4774 |
14.67% | Class R Shares | |||
Merrill
Lynch Pierce Fenner & Smith
Incorporated |
4800
East Deer Lake Drive 3
rd
Floor
Jacksonville, FL 32246-6484 |
13.01% | Class R Shares | |||
Hartford Life Insurance Company |
PO
Box 2999
Hartford, CT 06104-2999 |
12.49% | Class R Shares | |||
State Street Bank and Trust TTEE |
1
Lincoln Street
Boston, MA 02111-2901 |
10.12% | Class R Shares | |||
National Financial Services LLC |
499
Washington Blvd 5
th
Floor
Jersey City, NJ 07310-2010 |
9.79% | Class R Shares | |||
Charles Schwab & Co Inc |
101
Montgomery St.
San Francisco, CA 94104-4122 |
20.96% | Service Shares | |||
Taynik
& Co
|
1200
Crown Colony Dr.
Quincy, MA 02169-0938 |
15.42% | Service Shares | |||
ICMA Retirement Corporation |
777
North Capitol St, NE
Washington, DC 20002 |
7.46% | Service Shares | |||
PIMS/Prudential Retirement |
10500
Seymour Avenue
Franklin Park, IL 60131-1212 |
7.11% | Service Shares |
Name | Address | % | Class | |||
Pershing LLC |
1
Pershing Plaza
Jersey City, NJ 07399-0001 |
7.10% | Service Shares | |||
National Financial Services LLC |
499
Washington Blvd 5
th
Floor
Jersey City, NJ 07310-2010 |
6.73% | Service Shares | |||
Fidelity Investments |
100
Magellan Way (KW1C)
Covington, KY 41015-0000 |
5.87% | Service Shares | |||
State Street Bank and Trust Co |
1
Lincoln Street
Boston, MA 02111-2901 |
32.18% | Class K Shares | |||
National Financial Services LLC |
499
Washington Blvd. 5
th
Floor
Jersey City, NJ 07310-2010 |
30.91% | Class K Shares | |||
Mid Atlantic Trust Company |
1251
Waterfront Place, Suite 525
Pittsburgh, PA 15222 |
5.03% | Class K 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. |
• | Junk bonds may be less liquid than higher rated fixed-income securities even under normal economic conditions. 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. 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, and such quotations may not be the actual prices available for a purchase or sale. Because junk bonds are less liquid, judgment may play a greater role in valuing certain of a Fund’s portfolio securities than in the case of securities trading in a more liquid market. |
• | 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 assets of domestic and 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 instrumentalities or which otherwise depend directly or indirectly 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. |
• | Portfolio Characteristics: Portfolio characteristics include, but are not limited to, sector allocation, credit quality breakdown, maturity distribution, duration and convexity measures, average credit quality, average maturity, average coupon, top 10 holdings with percent of the fund held, average market capitalization, capitalization range, ROE, P/E, P/B, P/CF, P/S, and EPS. Additional characteristics specific to money market funds include, but are not limited to, historical daily and weekly liquid assets (as defined under Rule 2a-7) and historical fund net inflows and outflows. |
• | Portfolio Holdings: Portfolio holdings include, but are not limited to, issuer name, CUSIP, ticker symbol, total shares and market value for equity portfolios and issuer name, CUSIP, ticker symbol, coupon, maturity current face value and market value for fixed-income portfolios. Other information that will be treated as portfolio holdings for purposes of the Guidelines includes but is not limited to quantity, SEDOL, market price, yield, WAL, duration and convexity as of a specific date. For derivatives, indicative data may also be provided, including but not limited to, pay leg, receive leg, notional amount, reset frequency, and trade counterparty. Risk related information ( e.g. , value at risk, standard deviation) will be treated as portfolio holdings. |
Open-End Mutual Funds (Excluding Money Market Funds) | |||
Time Periods (Calendar Days) | |||
Prior
to 5
Calendar Days After Month-End |
5-20
Calendar
Days After Month-End |
20 Calendar Days After Month-End To Date of Public Filing | |
Portfolio
Holdings |
Cannot disclose without non-disclosure or confidentiality agreement and Chief Compliance Officer (“CCO”) approval. | May disclose to shareholders, prospective shareholders, intermediaries, consultants and third-party data providers ( e.g. , Lipper, Morningstar and Bloomberg), except with respect to Global Allocation funds* (whose holdings may be disclosed 40 calendar days after quarter-end based on the applicable fund’s fiscal year end). If portfolio holdings are disclosed to one party, they must also be disclosed to all other parties requesting the same information. | |
Portfolio
Characteristics |
Cannot disclose without non-disclosure or confidentiality agreement and CCO approval*, ** | May disclose to shareholders, prospective shareholders, intermediaries, consultants and third-party data providers ( e.g ., Lipper, Morningstar and Bloomberg). If portfolio characteristics are disclosed to one party, they must also be disclosed to all other parties requesting the same information. | |
*Global
Allocation:
For purposes of portfolio holdings, Global Allocation funds include BlackRock Global Allocation Fund, Inc., BlackRock Global Allocation Portfolio of BlackRock Series Fund, Inc. and BlackRock Global
Allocation V.I. Fund of BlackRock Variable Series Funds, Inc. Information on certain portfolio characteristics of BlackRock Global Allocation Portfolio and BlackRock Global Allocation V.I. Fund are available, upon request, to insurance companies
that use these funds as underlying investments (and to advisers and sub-advisers of funds invested in BlackRock Global Allocation Portfolio and BlackRock Global Allocation V.I. Fund) in their variable annuity contracts and variable life insurance
policies on a weekly basis (or such other period as may be determined to be appropriate). Disclosure of such characteristics of these two funds constitutes a disclosure of Confidential Information and is being made for reasons deemed appropriate by
BlackRock and in accordance with the requirements set forth in the Guidelines.
**Strategic Income Opportunities: Information on certain portfolio characteristics of the Strategic Income Opportunities Portfolio may be made available to shareholders, prospective shareholders, intermediaries, consultants and third party data providers, upon request on a more frequent basis as may be deemed appropriate by BlackRock from time-to-time. |
Money Market Funds | ||
Time Periods (Calendar Days) | ||
Prior
to 5 Calendar Days
After Month-End |
5
Calendar Days After
Month-End to Date of Public Filing |
|
Portfolio
Holdings |
Cannot
disclose without non-disclosure or confidentiality agreement and CCO approval except the following portfolio holdings information may be released as follows:
• Weekly portfolio holdings information released on the website at least one business day after week-end. • Other information as may be required under Rule 2a-7 ( e.g., name of issuer, category of investment, principal amount, maturity dates, yields). |
May disclose to shareholders, prospective shareholders, intermediaries, consultants and third-party data providers. If portfolio holdings are disclosed to one party, they must also be disclosed to all other parties requesting the same information. |
Portfolio
Characteristics |
Cannot
disclose without non-disclosure or confidentiality agreement and CCO approval except the following information may be released on the Fund’s website daily:
• Historical net asset values per share (“NAVs”) calculated based on market factors ( e.g., marked to market) • Percentage of fund assets invested in daily and weekly liquid assets (as defined under Rule 2a-7) • Daily net inflows and outflows • Yields, SEC yields, WAM, WAL, current assets • Other information as may be required by Rule 2a-7 |
May disclose to shareholders, prospective shareholders, intermediaries, consultants and third-party data providers. If portfolio characteristics are disclosed to one party, they must also be disclosed to all other parties requesting the same information. |
(i) | the preparation and posting of the Fund’s portfolio holdings and/or portfolio characteristics to its website on a more frequent basis than authorized above; |
(ii) | the disclosure of the Fund’s portfolio holdings to third-party service providers not noted above; and |
(iii) | the disclosure of the Fund’s portfolio holdings and/or portfolio characteristics to other parties for legitimate business purposes. |
• | Fund Fact Sheets are available 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. |
• | Money Market Performance Reports are available to shareholders, prospective shareholders, intermediaries and consultants by the tenth calendar day of the month (and on a one day lag for certain institutional funds). They contain monthly money market Fund performance, rolling 12-month average and benchmark performance. |
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. |
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 Corporation 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 and 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, Mizuho Asset Management Co., Ltd. and Nationwide Fund Advisors. |
All
Funds Except
Balanced Capital |
Balanced Capital | ||
Less than
$3,000,000
|
1.00% | 0.75% | |
$3 million but less than $15
million
|
0.50% | 0.50% | |
$15 million and
above
|
0.25% | 0.25% |
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 |
* | 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 judged to be 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 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, and the promise we impute; |
• | 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; and 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. The ‘CC’ rating is used when a default has not yet occurred, but Standard & Poor’s expects default to be a virtual certainty, regardless of the anticipated time to default. |
C | An obligation rated ‘C’ is currently highly vulnerable to nonpayment, and the obligation is expected to have lower relative seniority or lower ultimate recovery compared to obligations that are rated higher. |
D | An obligation rated ‘D’ is in default or in breach of an imputed promise. For non-hybrid capital instruments, 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 in the absence of a stated grace period or within the earlier of the stated grace period or 30 calendar days. The ‘D’ rating also will be used upon the filing of a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. An obligation’s rating is lowered to ‘D’ if it is subject to a distressed exchange offer. |
NR | This indicates that no rating has been requested, or 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 default or in breach of an imputed promise. For non-hybrid capital instruments, 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 and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. An obligation’s rating is lowered to ‘D’ if it is subject to a distressed exchange offer. |
• | 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 | Substantial credit risk. ‘CCC’ ratings indicate that substantial credit risk is present. |
CC | Very high levels of credit risk. ‘CC’ ratings indicate very high levels of credit risk. |
C | Exceptionally high levels of credit risk. ‘C’ indicates exceptionally high levels of credit risk. |
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. Typically applicable to entity ratings only. |
D | Default. Indicates a broad-based default event for an entity, or the default of a short-term obligation. |
1 | iShares MSCI All Peru Capped ETF, iShares MSCI KLD 400 Social ETF, iShares MSCI USA ESG Select ETF and iShares MSCI ACWI Low Carbon Target ETF have separate Fund Proxy Voting Policies. |
Page | |
|
B-3 |
|
B-3 |
|
B-3 |
|
B-4 |
|
B-5 |
|
B-5 |
|
B-6 |
|
B-6 |
|
B-6 |
|
B-7 |
|
B-7 |
|
B-7 |
|
B-8 |
|
B-9 |
|
B-9 |
• | Boards and directors |
• | Auditors and audit-related issues |
• | Capital structure, mergers, asset sales and other special transactions |
• | Remuneration and benefits |
• | Social, ethical and environmental issues |
• | General corporate governance matters |
• | establishing an appropriate corporate governance structure; |
• | supporting and overseeing management in setting strategy; |
• | ensuring the integrity of financial statements; |
• | making decisions regarding mergers, acquisitions and disposals; |
• | establishing appropriate executive compensation structures; and |
• | addressing business issues including social, ethical and environmental issues when they have the potential to materially impact company reputation and performance. |
• | current employment at the company or a subsidiary; |
• | former employment within the past several years as an executive of the company; |
• | providing substantial professional services to the company and/or members of the company’s management; |
• | having had a substantial business relationship in the past three years; |
• | having, or representing a shareholder with, a substantial shareholding in the company; |
• | being an immediate family member of any of the aforementioned; and |
• | interlocking directorships. |
• | BlackRock has adopted a proxy voting oversight structure whereby the Corporate Governance Committees oversee the voting decisions and other activities of the Corporate Governance Group, and particularly its activities with respect to voting in the relevant region of each Corporate Governance Committee’s jurisdiction. |
• | The Corporate Governance Committees have adopted Guidelines for each region, which set forth the firm’s views with respect to certain corporate governance and other issues that typically arise in the proxy voting context. The Corporate Governance Committees receive periodic reports regarding the specific votes cast by the Corporate Governance Group and regular updates on material process issues, procedural changes and other matters of concern to the Corporate Governance Committees. |
• | BlackRock’s Global Corporate Governance Oversight Committee oversees the Global Head, the Corporate Governance Group and the Corporate Governance Committees. The Global Corporate Governance Oversight Committee conducts a review, at least annually, of the proxy voting process to ensure compliance with BlackRock’s risk policies and procedures. |
• | BlackRock maintains a reporting structure that separates the Global Head and Corporate Governance Group from employees with sales responsibilities. In addition, BlackRock maintains procedures intended to ensure that all engagements with corporate issuers or dissident shareholders are managed consistently and without regard to BlackRock’s relationship with the issuer of the proxy or dissident shareholder. Within the normal course of business, the Global Head or Corporate Governance Group may engage directly with BlackRock clients, and with employees with sales responsibilities, in discussions regarding general corporate governance policy matters, and to otherwise ensure that proxy-related client service levels are met. The Global Head or Corporate Governance Group does not discuss any specific voting matter with a client prior to the disclosure of the vote decision to all applicable clients after the shareholder meeting has taken place, except if the client is acting in the capacity as issuer of the proxy or dissident shareholder and is engaging through the established procedures independent of the client relationship. |
• | In certain instances, BlackRock may determine to engage an independent fiduciary to vote proxies as a further safeguard to avoid potential conflicts of interest or as otherwise required by applicable law. The independent fiduciary may either vote such proxies or provide BlackRock with instructions as to how to vote such proxies. In the latter case, BlackRock votes the proxy in accordance with the independent fiduciary’s determination. Use of an independent fiduciary has been adopted for voting the proxies related to any company that is affiliated with BlackRock or any company that includes BlackRock employees on its board of directors. |
Exhibit
Number |
Description | |
1(a) | — | Declaration of Trust of the Registrant.(a) |
(b) | — | Amendment to Declaration of Trust of Registrant, dated July 14, 1987.(a) |
(c) | — | Instrument establishing Class A shares and Class B shares of Registrant.(a) |
(d) | — | Certificate of Amendment to Declaration of Trust and Establishment and Designation of Class C and D shares, dated October 19, 1994.(a) |
(e) | — | Amendment to Declaration of Trust of Registrant, dated December 27, 2000.(f) |
(f) | — | Establishment and Designation of Classes, dated December 13, 2002.(i) |
(g) | — | Establishment and Designation of Classes, dated March 18, 2003.(d) |
(h) | — | Certificate of Amendment to Declaration of Trust of the Registrant, dated September 24, 2003.(d) |
(i) | — | Form of Certificate of Establishment and Designation of Classes.(q) |
(j) | — | Form of Amendment changing the name of the Registrant to BlackRock Equity Dividend Fund.(q) |
(k) | — | Form of Amended and Restated Establishment and Designation of Classes.(v) |
2 | — | Amended and Restated By-laws of Registrant, dated December 9, 2008.(s) |
3 | — | Instruments Defining Rights of Shareholders. Incorporated by reference to Exhibits 1 and 2 above. |
4(a) | — | Form of Management Agreement between Registrant and BlackRock Advisors, LLC (the “Manager”).(q) |
(b) | — | Form of Amendment No. 1 to the Investment Management Agreement.(w) |
(c) | — | Amendment No. 2 to the Investment Management Agreement, dated June 1, 2012.(x) |
(d) | — | Amendment No. 3 to the Investment Management Agreement, dated June 1, 2014.(z) |
(e) | — | Amendment No. 4 to the Investment Management Agreement, dated June 17, 2016* |
5(a) | — | Form of Unified Distribution Agreement between the Registrant and BlackRock Investments, Inc.(n) |
6 | — | None. |
7 | — | Custodian Contract between Registrant and State Street Bank and Trust Company.(a) |
8(a) | — | Form of Transfer Agency and Shareholder Services Agreement between Registrant and BNY Mellon Investment Servicing (US) Inc.(m) |
(b) | — | Form of Third Amended and Restated Credit Agreement among the Registrant, a syndicate of banks and certain other parties.(o) |
(c) | — | Administrative Services Agreement between Registrant and State Street Bank and Trust Company.(e) |
(d) | — | Form of Third Amended and Restated Securities Lending Agency Agreement between the Registrant and BlackRock Investment Management, LLC.(h) |
(e) | — | Form of Amended and Restated Shareholders’ Administrative Services Agreement between the Registrant and the Manager.(j) |
(f) | — | Form of Appendix A to Amended and Restated Shareholders’ Administrative Services Agreement between Registrant and the Manager.(t) |
(g) | — | Form of Amended Accounting Support Services Agreement between the Registrant and BlackRock Advisors LLC. (aa) |
(h) | — | Form of Master Advisory Fee Waiver Agreement between the Registrant, BlackRock Advisors, LLC and BlackRock Fund Advisors. (bb) |
9 | — | Opinion of Shearman & Sterling LLP, counsel for Registrant.(c) |
10 | — | Consent of Deloitte & Touche LLP, independent registered public accounting firm for the Registrant.* |
11 | — | None. |
Exhibit
Number |
Description | |
12 | — | Form of Certificate of Fund Asset Management, L.P.(b) |
13(a) | — | Form of Investor A Distribution Plan.(n) |
(b) | — | Form of Investor B Distribution Plan.(n) |
(c) | — | Form of Investor C Distribution Plan.(n) |
(d) | — | Form of Class R Distribution Plan.(n) |
(e) | — | Form of Service Shares Distribution Plan.(p) |
(f) | — | Form of Investor C1 Shares Distribution Plan.(u) |
14 | — | Plan pursuant to Rule 18f-3.(l) |
15(a) | — | Code of Ethics of the Registrant.(r) |
(b) | — | Code of Ethics of BlackRock Investments, LLC (formerly BlackRock Investments, Inc.).(g) |
(c) | — | Code of Ethics of BlackRock Advisors, LLC.(y) |
16(a) | — | Power of Attorney (all Trustees other than Lena G. Goldberg).(k) |
(b) | — | Power of Attorney (Lena G. Goldberg).(cc) |
* | Filed herewith. |
(a) | Incorporated by reference to an Exhibit to Post-Effective Amendment No. 9 to Registrant’s Registration Statement under the Securities Act of 1933 on Form N-1A (File No. 33-14517) (the “Registration Statement”), filed on November 28, 1995. |
(b) | Incorporated by reference to an Exhibit to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-1A of BlackRock Large Cap Series Funds, Inc., filed on December 22, 1999. |
(c) | Incorporated by reference to Exhibit 10(b) to Post-Effective Amendment No. 20 to Registrant’s Registration Statement, filed on December 27, 2002. |
(d) | Incorporated by reference to an Exhibit to Post-Effective Amendment No. 21 to the Registration Statement, filed on November 24, 2003. |
(e) | Incorporated by reference to Exhibit 8(d) to Post-Effective Amendment No. 1 to the Registration Statement on Form N-1A of Merrill Lynch Focus Twenty Fund, Inc. (File No. 333-89775), filed on March 20, 2001. |
(f) | Incorporated by reference to identically numbered Exhibit to Post-Effective Amendment No. 17 to the Registrant’s Registration Statement on Form N-1A, filed on December 28, 2000. |
(g) | Incorporated by reference to Exhibit 15(b) to Post-Effective Amendment No. 48 to the Registration Statement on Form N-1A of BlackRock Value Opportunities Fund, Inc. (File No. 2-60836), filed on July 28, 2014. |
(h) | Incorporated by reference to Exhibit 8(d) to Post-Effective Amendment No. 41 to the Registration Statement on Form N-1A of BlackRock California Municipal Opportunities Fund of BlackRock California Municipal Series Trust (File No. 2-96581), filed on January 26, 2015. |
(i) | Incorporated by reference to identically numbered Exhibit to Post-Effective Amendment No. 20 to the Registration Statement, filed on December 27, 2002. |
(j) | Incorporated by reference to Exhibit 8(i) to Post-Effective Amendment No. 35 of the Registration Statement of BlackRock EuroFund (File No. 33-04026) on Form N-1A, filed on October 26, 2012. |
(k) | Incorporated by reference to Exhibit 16 to Post-Effective Amendment No. 52 to the Registration Statement on Form N-1A of BlackRock Value Opportunities Fund, Inc. (File No. 002-60836) filed on July 28, 2016. |
(l) | Amended and Restated Plan pursuant to Rule 18f-3 is incorporated by reference to Exhibit 14 of Post-Effective Amendment No. 51 of the Registration Statement on Form N-1A of BlackRock Basic Value Fund, Inc. (File No. 002-58521), filed on February 3, 2015. |
(m) | Incorporated by reference to Exhibit 8(a) to Post-Effective Amendment No. 48 to the Registration Statement on Form N-1A of BlackRock Series Fund, Inc. (File No. 2-69062), filed on April 18, 2014. |
(n) | Incorporated by reference to the identically numbered Exhibits to Post-Effective Amendment No. 18 to the Registration Statement on Form N-1A of BlackRock Global SmallCap Fund, Inc. (File No. 33-53399), filed on October 28, 2008. |
(o) | Incorporated by reference to Exhibit 8(b) to Post-Effective Amendment No. 56 to the Registration Statement on Form N-1A of BlackRock Pacific Fund, Inc. (File No. 2-56978), filed on April 27, 2016. |
(p) | Incorporated by reference to the identically numbered Exhibit to Post-Effective Amendment No. 27 to the Registration Statement on Form N-1A of the Registrant (File No. 33-14517), filed on November 25, 2008. |
(q) | Incorporated by reference to an Exhibit to Post-Effective Amendment No. 25 to the Registration Statement, filed on September 29, 2006. |
(r) | Incorporated by reference to Exhibit 15(a) to Post-Effective Amendment No. 48 to the Registration Statement on Form N-1A of BlackRock Value Opportunities Fund, Inc. (File No. 2-60836), filed on July 28, 2014. |
(s) | Incorporated by reference to Exhibit 2 to Post-Effective Amendment No. 29 to the Registration Statement on Form N-1A of the Registrant (File No. 33-14517), filed on November 24, 2009. |
(t) | Incorporated by reference to Exhibit 8(f) to Post-Effective Amendment No. 138 to the Registration Statement on Form N-1A of BlackRock Funds II (File No. 333-142592), filed on October 31, 2014. |
(u) | Incorporated by reference to Exhibit 13(e) to Post-Effective Amendment No. 24 to the Registration Statement on Form N-1A of BlackRock Utilities and Telecommunications Fund, Inc. (File No. 33-37103) filed on November 25, 2008. |
(v) | Filed on November 28, 2011 as Exhibit 1(k) to Post-Effective Amendment No. 34 to the Registration Statement. |
(w) | Filed on November 28, 2011 as Exhibit 4(c) to Post-Effective Amendment No. 34 to the Registration Statement. |
(x) | Incorporated by reference to Exhibit 4(d) to Post-Effective Amendment No. 36 of the Registrant’s Registration Statement (File No. 33-14517) on Form N-1A, filed on November 27, 2012. |
(y) | Incorporated by reference to Exhibit 15(c) to Post-Effective Amendment No. 48 to the Registration Statement on Form N-1A of BlackRock Value Opportunities Fund, Inc. (File No. 2-60836), filed on July 28, 2014. |
(z) | Filed on November 25, 2014 as Exhibit 4(d) to Post-Effective Amendment No. 40 to the Registration Statement. |
(aa) | Incorporated by reference to Exhibit 8(g) to Post-Effective Amendment No. 37 to the Registration Statement on Form N-1A of BlackRock Natural Resources Trust (File No. 2-97095), filed on November 24, 2015. |
(bb) | Incorporated by reference to Exhibit 8(h) of Post-Effective Amendment No. 43 to the Registration Statement on Form N-1A of BlackRock EuroFund (File No. 33-04026), filed on October 27, 2016. |
(cc) | Incorporated by reference to Exhibit 99(b) to Post-Effective Amendment No. 220 to the Registration Statement on Form N-1A of BlackRock Funds II (File No. 333-142592) filed on November 18, 2016. |
BLACKROCK EQUITY DIVIDEND FUND
(Registrant) |
|
By: | /s/ John M. Perlowski |
(John
M. Perlowski,
President and Chief Executive Officer) |
Signature | Title | Date | ||
/s/
John M. Perlowski
(John M. Perlowski) |
Trustee, President and Chief Executive Officer (Principal Executive Officer) | November 22, 2016 | ||
/s/
Neal J. Andrews
(Neal J. Andrews) |
Chief Financial Officer (Principal Financial and Accounting Officer) | November 22, 2016 | ||
James H.
Bodurtha*
(James H. Bodurtha) |
Trustee | |||
Bruce R.
Bond*
(Bruce R. Bond) |
Trustee | |||
Donald W.
Burton*
(Donald W. Burton) |
Trustee | |||
Stuart E.
Eizenstat*
(Stuart E. Eizenstat) |
Trustee | |||
Lena
G. Goldberg*
(Lena G. Goldberg) |
Trustee | |||
Robert M.
Hernandez*
(Robert M. Hernandez) |
Trustee | |||
John F.
O’Brien*
(John F. O’Brien) |
Trustee | |||
Donald
C. Opatrny*
(Donald C. Opatrny) |
Trustee | |||
Roberta Cooper Ramo*
(Roberta Cooper Ramo) |
Trustee | |||
David H.
Walsh*
(David H. Walsh) |
Trustee |
Signature | Title | Date | ||
Fred G.
Weiss*
(Fred G. Weiss) |
Trustee | |||
Robert
Fairbairn*
(Robert Fairbairn) |
Trustee | |||
Henry Gabbay*
(Henry Gabbay) |
Trustee | |||
Henry
R. Keizer*
(Henry R. Keizer) |
Trustee | |||
*By:
/s/ Benjamin Archibald
(Benjamin Archibald, Attorney-In-Fact) |
November 22, 2016 |
Exhibit 4(e)
Amendment No. 4 to the Investment Management Agreement
This Amendment No. 4 to the Investment Management Agreement dated as of June 17, 2016 (the Amendment) is entered into by and between BlackRock Equity Dividend Fund, a Massachusetts business trust (the Fund), and BlackRock Advisors, LLC, a Delaware limited liability company (the Advisor).
WHEREAS, the Fund and the Advisor have entered into an Investment Management Agreement dated September 29, 2006, as amended on June 1, 2011, June 1, 2012 and June 1, 2014 (the Management Agreement) pursuant to which the Advisor agreed to act as investment advisor to the Fund; and
WHEREAS, the Management Agreement provides that the Fund will pay to the Advisor a monthly fee in arrears at an annual rate equal to the amount set forth in Schedule A thereto; and
WHEREAS, the Management Agreement provides that the Management Agreement may be amended by the parties to the Management Agreement only if the amendment is specifically approved by a vote of the Board of Trustees of the Fund, including a majority of those Trustees who are not parties to the Management Agreement or interested persons of any such party cast in person at a meeting called for the purpose of voting on such approval, and, where required by the Investment Company Act of 1940, by a vote of the majority of the outstanding voting securities of the Fund; and
WHEREAS, the Board of Trustees, including a majority of those Trustees who are not interested persons of the Fund, specifically approved this Amendment at an in-person meeting held on May 11, 2016;
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:
1. | Schedule A of the Management Agreement is hereby amended as set forth on the Schedule A attached hereto with respect to the Fund. |
2. | Except as otherwise set forth herein, the terms and conditions of the Management Agreement shall remain in full force and effect. |
-1-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 4 to the Investment Management Agreement to be executed by their officers designated below as of the day and year first above written.
BLACKROCK EQUITY DIVIDEND FUND | ||
By: |
/s/ John M. Perlowski |
|
Name: John M. Perlowski | ||
Title: President and Chief Executive Officer | ||
BLACKROCK ADVISORS, LLC | ||
By: |
/s/ Neal J. Andrews |
|
Name: Neal J. Andrews | ||
Title: Managing Director |
-2-
Schedule A
Investment Advisory Fee
0.60% of the average daily Net Assets of the Fund not exceeding $8 billion; 0.56% of the average daily Net Assets of the Fund exceeding $8 billion but not exceeding $10 billion; 0.54% of the average daily Net Assets of the Fund exceeding $10 billion but not exceeding $12 billion; 0.52% of the average daily Net Assets of the Fund exceeding $12 billion but not exceeding $17 billion; 0.51% of the average daily Net Assets of the Fund exceeding $17 billion but not exceeding $25 billion; 0.50% of the average daily Net Assets of the Fund exceeding $25 billion but not exceeding $30 billion; 0.47% of the average daily Net Assets of the Fund exceeding $30 billion but not exceeding $40 billion; and 0.45% of the average daily Net Assets of the Fund exceeding $40 billion.
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Post-Effective Amendment No.49 to Registration Statement No. 33-14517 on Form N-1A of our report dated September 26, 2016, relating to the financial statements and financial highlights of BlackRock Equity Dividend Fund (the Fund), appearing in the Annual Report on Form N-CSR of the Fund for the year ended July 31, 2016. We also consent to the references to us under the headings Financial Highlights and Independent Registered Public Accounting Firm in the Prospectuses and Independent Registered Public Accounting Firm and Financial Statements in the Statement of Additional Information, which are part of such Registration Statement.
/s/ Deloitte & Touche LLP |
Boston, Massachusetts |
November 22, 2016 |