MAY 16, 2013
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SUMMARY PROSPECTUS
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BlackRock
Funds
SM
| Investor and Institutional Shares
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BlackRock Emerging Market Allocation Portfolio
Investor A:
BEEAX Investor C: BEECX Institutional: BEEIX
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Before you invest, you may want to
review the Fund’s prospectus, which contains more information about the Fund and its risks. You can find the Fund’s prospectus (including
amendments and supplements) and other information about the Fund, including the Fund’s statement of additional information and shareholder report,
online at http://www.blackrock.com/prospectus. You can also get this information at no cost by calling (800) 441-7762 or by sending an e-mail request
to
prospectus.request@blackrock.com
, or from your financial professional. The Fund’s prospectus and statement of additional information,
both dated May 16, 2013, as amended and supplemented from time to time, are incorporated by reference into (legally made a part of) this Summary
Prospectus.
This Summary Prospectus contains
information you should know before investing, including information about risks. Please read it before you invest and keep it for future
reference.
The Securities and Exchange
Commission has not approved or disapproved these securities or passed upon the adequacy of this Summary Prospectus. Any representation to the contrary
is a criminal offense.
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Not FDIC Insured • No Bank Guarantee • May Lose Value
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Summary Prospectus
The investment objective of BlackRock Emerging Market Allocation
Portfolio (the “Fund”), a series of BlackRock Funds
SM
(the “Trust”), is to seek total return.
Fees and Expenses of the
Fund
This table describes the fees and expenses that you may pay if you
buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least
$25,000 in the fund complex advised by BlackRock Advisors, LLC (“BlackRock”) or its affiliates. More information about these and other
discounts is available from your financial professional and in the “Details About the Share Classes” section on page 37 of the Fund’s
prospectus and in the “Purchase of Shares” section on page II-58 of the Fund’s statement of additional information (the
“SAI”).
Shareholder Fees
(fees paid
directly from your investment)
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Investor A
Shares
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Investor C
Shares
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Institutional
Shares
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Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)
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5.25
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%
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None
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None
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Maximum Deferred Sales Charge (Load) (as a percentage of
offering price or redemption proceeds,
whichever is lower)
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None
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1
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1.00
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%
2
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None
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Annual Fund Operating
Expenses
(expenses that you pay each year as a
percentage of the value of your investment)
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Investor A
Shares
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Investor C
Shares
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Institutional
Shares
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Management Fee
3
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1.00
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%
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1.00
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%
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1.00
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%
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Distribution and/or Service (12b-1) Fees
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0.25
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%
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1.00
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%
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None
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Other Expenses
4
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0.40
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%
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0.40
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%
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0.35
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%
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Acquired Fund Fees and Expenses
5
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0.07
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%
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0.07
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%
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0.07
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%
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Total Annual Fund Operating Expenses
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1.72
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%
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2.47
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%
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1.42
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%
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1
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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.
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2
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There is no CDSC on Investor C Shares after one
year.
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3
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The Management Fee payable by the Fund is based on
assets estimated to be attributable to the Fund’s direct investments in fixed-income and equity securities and instruments, including
exchange-traded funds (“ETFs”) advised by BlackRock or other investment advisers, other investments and cash and cash equivalents (including
money market funds). BlackRock has contractually agreed to waive the Management Fee on assets estimated to be attributed to the Fund’s investments
in other equity and fixed-income mutual funds managed by BlackRock or its affiliates (the “mutual funds”).
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4
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Other Expenses are based on estimated amounts for
the current year.
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5
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Acquired Fund Fees and Expenses are estimated for
the current year.
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6
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As described in the “Management of the
Fund” section of the Fund’s prospectus on pages 52-56, BlackRock has contractually agreed to waive and/or reimburse fees or expenses in order
to limit Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (excluding Dividend Expense, Interest Expense, Acquired
Fund Fees and Expenses and certain other Fund expenses) as a percentage of average daily net assets to 1.65% (for Investor A Shares), 2.40% (for
Investor C Shares) and 1.40% (for Institutional Shares) until June 1, 2014. The Fund may have to repay some of these waivers and reimbursements to
BlackRock in the following two years. The agreement may be terminated upon 90 days’ notice by a majority of the non-interested trustees of the
Trust or by a vote of a majority of the outstanding voting securities of the Fund.
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Example:
This Example is intended to help you compare the cost of investing
in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated
and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the
Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would
be:
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1 Year
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3 Years
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Investor A Shares
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$691
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$1,038
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Investor C Shares
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$350
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$ 770
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Institutional Shares
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$145
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$ 449
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You would pay the following expenses if you did not redeem your
shares:
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1 Year
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3 Years
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Investor C Shares
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$250
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$ 770
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Portfolio Turnover:
The Fund pays transaction costs, such as commissions, when it buys
and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in
higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example,
affect the Fund’s performance.
Principal Investment Strategies
of the Fund
Under normal circumstances, the Fund seeks to invest at least 80%
of its net assets plus any borrowings for investment purposes in equity and debt instruments and related derivative instruments issued by, or tied
economically to, companies or other issuers located in emerging markets. This is a non-fundamental policy of the Fund and may be changed with 60
days’ prior notice to shareholders. BlackRock considers an emerging market country to include any country that is: 1) generally recognized to be
an emerging market country by the international financial community, including the World Bank; 2) classified by the United Nations as a developing
country; or 3) included in the MSCI Emerging Markets Index
SM
. BlackRock determines that an investment is tied economically to an emerging
market if such investment satisfies one or more of the following conditions: 1) the issuer’s primary trading market is in an emerging market; 2)
the issuer is organized under the laws of, derives at least 50% of its revenue from, or has at least 50% of its assets in emerging markets; 3) the
investment is included in an index representative of emerging markets; and 4) the investment is exposed to the economic risks and returns of emerging
markets.
The Fund seeks to achieve its investment objective by investing in
a broad range of asset classes, such as equity securities, fixed- and floating-rate debt instruments, derivatives, other investment companies,
including affiliated and unaffiliated mutual funds and ETFs, currency- and commodity-related instruments and structured products. The Fund has
flexibility in the relative weighting of each asset class and expects to vary the percentages of assets invested in each asset category from time to
time. The Fund may invest in securities of companies of any market capitalization and may take both long and short positions in a variety of global
instruments.
The Fund may invest a significant portion of its assets in
affiliated and unaffiliated equity, money-market and fixed income mutual funds and affiliated and unaffiliated ETFs. Unless otherwise indicated or the
context requires otherwise, references to the Fund’s investments and related risk factors in this prospectus and the SAI include investments by
any underlying mutual funds and ETFs in which the Fund may invest.
With respect to the Fund’s equity investments, the Fund may
invest in common stock, preferred stock, securities convertible into common and preferred stock and non-convertible preferred stock. From time to time,
the Fund may invest in shares of companies through initial public offerings (“IPOs”). The Fund may invest in securities of both U.S. or
non-U.S. issuers, which can be U.S. dollar based or non-U.S. dollar based and may be currency hedged or unhedged.
With respect to the Fund’s fixed income investments, the Fund
may invest in a variety of instruments such as government obligations, corporate bonds and notes, including bonds and notes convertible into equity
securities, mortgage-backed securities, asset-backed securities, floating or variable rate obligations, municipal obligations, zero coupon debt
securities and bank loans. The Fund may also invest significantly in non-investment grade bonds (high yield bonds or distressed securities),
non-investment grade bank loans, and non-dollar denominated bonds. The Fund’s
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non-dollar denominated bonds may be on a currency hedged or
unhedged basis. The average portfolio duration of the fixed income portion of the Fund will vary based on the management team’s forecast of
interest rates and there are no limits regarding portfolio duration or average maturity.
The Fund may use derivatives, including options, futures, indexed
securities, inverse securities, contracts for difference, swap agreements, including interest rate and credit default swap agreements, forward
contracts and foreign currency transactions, including forwards on currency, both to seek to increase the return of the Fund and to hedge (or protect)
the value of its assets against adverse movements in currency exchange rates, interest rates and movements in the securities markets. The Fund expects
to utilize contracts for difference, swap agreements and other derivatives to maintain all or a significant portion of its long and short positions in
emerging market securities. In order to manage cash flows into or out of the Fund effectively, the Fund may buy and sell financial futures contracts or
options on such contracts. Derivatives are financial instruments whose value is derived from another security, a commodity (such as oil or gas), a
currency or an index. The Fund may seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase
and sale contracts or by using other investment techniques (such as reverse repurchase agreements or dollar rolls). The Fund may invest in
commodity-linked derivatives. The Fund may gain exposure to commodity-linked derivatives by investing in BlackRock Cayman Emerging Market Allocation
Fund, Ltd., a wholly-owned subsidiary of the Fund (the “Subsidiary”) formed in the Cayman Islands, which will invest primarily in
commodity-related instruments.
As part of its normal operations, the Fund may hold cash or high
quality money market securities pending investments or when it expects to need cash to pay redeeming shareholders. The Fund also may invest in these
securities in order to achieve its investment goal. Money market securities are short term securities consisting primarily of short term U.S.
Government securities, U.S. Government agency securities, securities issued by U.S. Government sponsored enterprises and U.S. Government
instrumentalities, bank obligations, commercial paper, including asset backed commercial paper, corporate notes and repurchase
agreements.
Principal Risks of Investing in
the Fund
Risk is inherent in all investing. The value of your investment in
the Fund, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part
or all of your investment in the Fund or your investment may not perform as well as other similar investments. The following is a summary description
of principal risks of investing in the Fund.
Principal Risks of Investing in the Fund
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Bank Loan Risk
— The market for bank loans may
not be highly liquid and the Fund may have difficulty selling them. These investments expose the Fund to the credit risk of both the financial
institution and the underlying borrower.
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Commodities Related Investments Risks
—
Exposure to the commodities markets may subject the Fund to greater volatility than investments in traditional securities. The value of
commodity-linked derivative investments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates,
or sectors affecting a particular industry or commodity, such as drought, floods, weather, embargoes, tariffs and international economic, political and
regulatory developments.
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Concentration Risk
— To the extent that the
Fund’s portfolio reflects concentration in the securities of issuers in a particular region, market, industry, group of industries, country, group
of countries, sector or asset class, the Fund may be adversely affected by the performance of those securities, may be subject to increased price
volatility and may be more susceptible to adverse economic, market, political or regulatory occurrences affecting that region, market, industry, group
of industries, country, group of countries, sector or asset class.
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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.
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Corporate Loans Risk
— Commercial banks and
other financial institutions or institutional investors make corporate loans to companies that need capital to grow or restructure. Borrowers generally
pay interest on corporate loans at rates that change in response to changes in market interest rates such as the London Interbank Offered Rate
(“LIBOR”) or the prime rates of U.S. banks. As a result, the value of corporate loan investments is generally less
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exposed to the adverse effects of shifts in market interest rates
than investments that pay a fixed rate of interest. The market for corporate loans may be subject to irregular trading activity, wide bid/ask spreads
and extended trade settlement periods. The corporate loans in which the Fund invests are usually rated below investment grade.
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Counterparty Risk
— The counterparty to an
over-the-counter derivatives contract or a borrower of the Fund’s securities may be unable or unwilling to make timely principal, interest or
settlement payments, or otherwise to honor its obligations.
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Credit Risk
— Credit risk refers to the
possibility that the issuer of a security will not be able to make payments of interest and principal when due. Changes in an issuer’s credit
rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that
issuer.
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Debt Securities Risk
— Debt securities, such as
bonds, involve credit risk. Debt securities are also subject to interest rate risk.
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Derivatives Risk
— The Fund’s use of
derivatives may reduce the Fund’s returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a
market to fluctuate significantly in price within a short time period. A risk of the Fund’s use of derivatives is that the fluctuations in their
values may not correlate perfectly with the overall securities markets. Derivatives are also subject to counterparty risk, which is the risk that the
other party in the transaction will not fulfill its contractual obligation. The possible lack of a liquid secondary market for derivatives and the
resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more
difficult for the Fund to value accurately. Valuation may be more difficult in times of market turmoil since many investors and market makers may be
reluctant to purchase complex instruments or quote prices for them. Derivatives also may expose the Fund to greater risk and increase its costs.
Certain transactions in derivatives involve substantial leverage risk and may expose the Fund to potential losses that exceed the amount originally
invested by the Fund. Recent legislation calls for new regulation of the derivatives markets. The extent and impact of the regulation is not yet known
and may not be known for some time. New regulation may make derivatives more costly, may limit the availability of derivatives, or may otherwise
adversely affect the value or performance of derivatives.
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Risks Specific to Certain Derivatives
Used by the Fund
Swaps
—
Swap agreements are two-party contracts entered into for periods
ranging from a few weeks to more than one year. In a standard
“swap” transaction, two parties agree to exchange
the returns (or differentials in rates of return) earned or
realized on particular predetermined investments or instruments,
which can be adjusted for an interest factor. Swap agreements
involve the risk that the party with whom the Fund has entered
into the swap will default on its obligation to pay the Fund
and the risk that the Fund will not be able to meet its obligations
to pay the other party to the agreement. The income tax treatment
of swap agreements is unsettled and may be subject to future
legislation, regulation or administrative pronouncements issued
by the Internal Revenue Service (“IRS”). If such
future guidance limits the Fund’s ability to use derivatives,
the Fund may have to find other ways of achieving its investment
objective.
Forward Foreign
Currency Exchange Contracts
— Forward foreign currency
exchange transactions are over-the-counter contracts to purchase
or sell a specified amount of a specified currency or multinational
currency unit at a price and future date set at the time of
the contract. Forward foreign currency exchange contracts do
not eliminate fluctuations in the value of non-U.S. securities
but rather allow the Fund to establish a fixed rate of exchange
for a future point in time. This strategy can have the effect
of reducing returns and minimizing opportunities for gain.
Contracts for
Difference
— Contracts for difference are subject
to liquidity risk because the liquidity of contracts for difference
is based on the liquidity of the underlying instrument, and
are subject to counterparty risk, i.e., the risk that the counterparty
to the contracts for difference transaction may be unable or
unwilling to make payments or to otherwise honor its financial
obligations under the terms of the contract. To the extent
that there is an imperfect correlation between the return on
the Fund’s obligation to its counterparty under the contract
for difference and the return on related assets in its portfolio,
the contracts for difference transaction may increase the Fund’s
financial risk. Contracts for difference, like many other derivative
instruments, involve the risk that, if the derivative security
declines in value, additional margin would be required to maintain
the margin level. The seller may require the Fund to deposit
additional sums to cover this, and this may be at short notice.
If additional margin is not provided in time, the seller may
liquidate the positions at a loss for which the Fund is liable.
Contracts for difference are not registered with the Securities
and Exchange Commission (the “SEC”) or any U.S. regulator,
and are not subject to U.S. regulation.
To the extent derivatives are utilized
to implement the Fund’s investment strategies, these transactions involve the risks described below with respect to investments in emerging market
securities and short sales of securities.
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Distressed Securities Risk
— Distressed
securities are speculative and involve substantial risks in addition to the risks of investing in junk bonds. The Fund will generally not receive
interest payments on the distressed securities and may incur costs to protect its investment. In addition, distressed securities involve the
substantial risk that principal will not be repaid. These securities may present a substantial risk of default or may be in default at the time of
investment.
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Dollar Rolls Risk
— Dollar rolls involve the
risk that the market value of the securities that the Fund is committed to buy may decline below the price of the securities the Fund has sold. These
transactions may involve leverage.
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Emerging Markets Risk
— Emerging markets are
riskier than more developed markets because they tend to develop unevenly and may never fully develop. Investments in emerging markets may be
considered speculative. Emerging markets are more likely to experience hyperinflation and currency devaluations, which adversely affect returns to U.S.
investors. In addition, many emerging securities markets have far lower trading volumes and less liquidity than developed markets.
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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.
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Extension Risk
— When interest rates rise,
certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.
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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:
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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.
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Changes in foreign currency exchange rates can affect the value of
the Fund’s portfolio.
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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.
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The governments of certain countries may prohibit or impose
substantial restrictions on foreign investments in their capital markets or in certain industries.
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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.
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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.
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High Portfolio Turnover Risk
— High portfolio
turnover (more than 100%) may result in increased transaction costs to the Fund and potentially higher capital gains or losses for shareholders. The
effects of higher than normal portfolio turnover may adversely affect Fund performance.
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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.
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Inflation-Indexed Bonds Risk
— The principal
value of an investment is not protected or otherwise guaranteed by virtue of the Fund’s investments in inflation-indexed bonds.
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Inflation-indexed bonds
are fixed income securities whose principal value is periodically adjusted according to the rate of inflation. If the index measuring inflation falls,
the principal value of inflation-indexed bonds will be adjusted downward, and consequently the interest payable on these securities (calculated with
respect to a smaller principal amount) will be reduced.
Repayment of the
original bond principal upon maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds. For bonds that do
not provide a similar guarantee, the adjusted principal value of the bond repaid at maturity may be less than the original principal
value.
The value of
inflation-indexed bonds is expected to change in response to changes in real interest rates. Real interest rates are tied to the relationship between
nominal interest rates and the rate of inflation. If nominal interest rates increase at a faster rate than inflation, real interest rates may rise,
leading to a decrease in value of inflation-indexed bonds. Short-term increases in inflation may lead to a decline in value. Any increase in the
principal amount of an inflation-indexed bond will be considered taxable ordinary income, even though investors do not receive their principal until
maturity.
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Periodic adjustments
for inflation to the principal amount of an inflation-indexed bond may give rise to original issue discount, which will be includable in the
Fund’s gross income. Due to original issue discount, the Fund may be required to make annual distributions to shareholders that exceed the cash
received, which may cause the Fund to liquidate certain investments when it is not advantageous to do so. Also, if the principal value of an
inflation-indexed bond is adjusted downward due to deflation, amounts previously distributed in the taxable year may be characterized in some
circumstances as a return of capital.
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Interest Rate Risk
— Interest rate risk is the
risk that prices of bonds and other fixed income securities will increase as interest rates fall and decrease as interest rates rise. 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.
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Investments in Mutual Funds and ETFs Risk
— The
Fund may invest a substantial portion of its assets in mutual funds or ETFs, so the Fund’s investment performance may be directly related to the
performance of the mutual funds or ETFs. The Fund’s net asset value will change with changes in the value of the mutual funds, ETFs and other
securities in which it invests. An investment in the Fund will entail more direct and indirect costs and expenses than a direct investment in the
underlying funds and ETFs. For example, the Fund indirectly pays a portion of the expenses (including operating expenses and management fees) incurred
by the underlying funds and ETFs.
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One underlying fund may
buy the same securities that another underlying fund sells. In addition, the Fund may buy the same securities that an underlying fund sells, or
vice-versa. If this happens, an investor in the Fund would indirectly bear the costs of these transactions without accomplishing the intended
investment purpose. Also, an investor in the Fund may receive taxable gains from portfolio transactions by an underlying fund, as well as taxable gains
from transactions in shares of the underlying fund by the Fund. Certain of the underlying funds may hold common portfolio securities, thereby reducing
the diversification benefits of the Fund.
As the underlying funds
or the Fund’s allocations among the underlying funds change from time to time, or to the extent that the expense ratio of the underlying funds
changes, the weighted average operating expenses borne by the Fund may increase or decrease.
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Junk Bonds Risk
— Although junk bonds generally
pay higher rates of interest than investment grade bonds, junk bonds are high risk investments that may cause income and principal losses for the
Fund.
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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. 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.
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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.
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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.
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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.
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Money Market Securities Risk
— If market
conditions improve while the Fund has invested some or all of its assets in high quality money market securities, this strategy could result in
reducing the potential gain from the market upswing, thus reducing the Fund’s opportunity to achieve its investment objective.
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Mortgage- and Asset-Backed Securities Risks
—
Mortgage- and asset-backed securities represent interests in “pools” of mortgages or other assets, including consumer loans or receivables
held in trust. Mortgage- and asset-backed securities are subject to credit, interest rate, prepayment and extension risks. These securities
also
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are subject to risk of default on the underlying mortgage or
asset, particularly during periods of economic downturn. Small movements in interest rates (both increases and decreases) may quickly and significantly
reduce the value of certain mortgage-backed securities.
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n
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Municipal Bonds Risk
— Municipal bonds are
subject to interest rate, credit and market risk. The ability of an issuer to make payments could be affected by litigation, legislation or other
political events or the bankruptcy of the issuer. Lower rated municipal bonds are subject to greater credit and market risk than higher quality
municipal bonds. The market prices of residual interest bonds may be highly sensitive to changes in market rates and may decrease significantly when
market rates increase.
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“New Issues” Risk
— “New
Issues” are initial public offerings of equity securities of U.S. and non-U.S. issuers. Securities issued in IPOs have no trading history, and
information about the companies may be available for very limited periods. In addition, the prices of securities sold in IPOs may be highly volatile or
may decline shortly after the initial public offering.
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Non-Diversification Risk
— The Fund is a
non-diversified fund. Because the Fund may invest in securities of a smaller number of issuers, it may be more exposed to the risks associated with and
developments affecting an individual issuer than a fund that invests more widely.
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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.
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Prepayment Risk
— When interest rates fall,
certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in
securities with lower yields.
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Repurchase Agreements and Purchase and Sale Contracts
Risks
— If the other party to a repurchase agreement or purchase and sale contract defaults on its obligation under the agreement, the
Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security in
either situation and the market value of the security declines, the Fund may lose money.
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Reverse Repurchase Agreements Risk
— Reverse
repurchase agreements involve the sale of securities held by the Fund with an agreement to repurchase the securities at an agreed-upon price, date and
interest payment. Reverse repurchase agreements involve the risk that the other party may fail to return the securities in a timely manner or at all.
The Fund could lose money if it is unable to recover the securities and the value of the collateral held by the Fund, including the value of the
investments made with cash collateral, is less than the value of securities. These events could also trigger adverse tax consequences to the
Fund.
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Short Sales Risk
— Because making short sales
in securities that it does not own exposes the Fund to the risks associated with those securities, such short sales involve speculative exposure risk.
The Fund may incur a loss as a result of a short sale if the price of the security increases between the date of the short sale and the date on which
the Fund replaces the security sold short.
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Small Cap and Emerging Growth Securities Risks
— Small cap or emerging growth companies may have limited product lines or markets. They may be less financially secure than larger, more
established companies. They may depend on a more limited management group than larger capitalized companies.
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Sovereign Debt Risk
— Sovereign debt
instruments are subject to the risk that a governmental entity may delay or refuse to pay interest or repay principal on its sovereign debt, due, for
example, to cash flow problems, insufficient foreign currency reserves, political considerations, the relative size of the governmental entity’s
debt position in relation to the economy or the failure to put in place economic reforms required by the International Monetary Fund or other
multilateral agencies.
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Structured Products Risk
— Holders of
structured products bear risks of the underlying investments, index or reference obligation and are subject to counterparty risk. The Fund may have the
right to receive payments only from the structured product, and generally does not have direct rights against the issuer or the entity that sold the
assets to be securitized. Certain structured products may be thinly traded or have a limited trading market. In addition to the general risks
associated with debt securities discussed herein, structured products carry additional risks, including, but not limited to: the possibility that
distributions from collateral securities will not be adequate to make interest or other payments; the quality of the collateral may decline in value or
default; and the possibility that the structured products are subordinate to other classes.
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Subsidiary Risk
— By investing in the
Subsidiary, the Fund is indirectly exposed to the risks associated with the Subsidiary’s investments. The commodity-related instruments held by
the Subsidiary are generally similar to those that are permitted to be held by the Fund and are subject to the same risks that apply to similar
investments if held directly by the Fund. There can be no assurance that the investment objective of the Subsidiary will be achieved. The Subsidiary is
not registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”), and, unless otherwise noted in this
prospectus, is not subject to all the investor protections of the Investment Company Act. However, the Fund wholly owns and controls the Subsidiary,
and the Fund and the
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Subsidiary are both managed by BlackRock, making it unlikely that
the Subsidiary will take action contrary to the interests of the Fund and its shareholders. Changes in the laws of the United States and/or the Cayman
Islands could result in the inability of the Fund and/or the Subsidiary to operate as described in this prospectus and the SAI and could adversely
affect the Fund.
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Supranational Entities Risk
— The Fund may
invest in obligations issued or guaranteed by the International Bank for Reconstruction and Development (the World Bank). If one or more stockholders
of the World Bank fail to make necessary additional capital contributions, the entity may be unable to pay interest or repay principal on its debt
securities, and the Fund may lose money on such investments.
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Tax and Regulatory Risk
— The tax treatment of
derivative instruments, including swap agreements and commodity-linked derivative instruments, may be affected by changes in legislation, regulations
or other legally binding authority that could affect the character, timing and amount of the Fund’s taxable income or gains and
distributions.
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In late July 2011, the
IRS suspended the granting of private letter rulings that concluded that the income and gain generated by a registered investment company’s
investments in commodity-linked notes, and the income generated from investments in controlled foreign subsidiaries that invest in physical commodities
and/or commodity-linked derivative instruments, would be “qualifying income” for regulated investment company qualification purposes. As a
result, there can be no assurance that the IRS will treat such income and gain as “qualifying income.” If the IRS makes an adverse
determination relating to the treatment of such income and gain, the Fund would likely need to change its investment strategies, which could adversely
affect the Fund.
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Treasury Obligations Risk
— Treasury
obligations may differ in their interest rates, maturities, times of issuance and other characteristics. Obligations of U.S. Government agencies and
authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the U.S. Government. No assurance
can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do
so.
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U.S. Government Mortgage-Related Securities Risk
— There are a number of important differences among the agencies and instrumentalities of the U.S. Government that issue mortgage-related
securities and among the securities that they issue. Mortgage-related securities guaranteed by the Government National Mortgage Association
(“Ginnie Mae”) are guaranteed as to the timely payment of principal and interest by Ginnie Mae and such guarantee is backed by the full faith
and credit of the United States. Ginnie Mae securities also are supported by the right of Ginnie Mae to borrow funds from the U.S. Treasury to make
payments under its guarantee. Mortgage-related securities issued by The Federal National Mortgage Association (“Fannie Mae”) or The Federal
Home Loan Mortgage Corporation (“Freddie Mac”) are solely the obligations of Fannie Mae or Freddie Mac, as the case may be, and are not
backed by or entitled to the full faith and credit of the United States but are supported by the right of the issuer to borrow from the U.S.
Treasury.
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U.S. Government Obligations Risk
— Certain
securities in which the Fund may invest, including securities issued by certain U.S. Government agencies and U.S. Government sponsored enterprises, are
not guaranteed by the U.S. Government or supported by the full faith and credit of the United States.
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Variable and Floating Rate Instrument Risk
—
The absence of an active market for these securities could make it difficult for the Fund to dispose of them if the issuer defaults.
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Zero Coupon Securities Risk
— While interest
payments are not made on such securities, holders of such securities are deemed to have received income (“phantom income”) annually,
notwithstanding that cash may not be received currently. Some of these securities may be subject to substantially greater price fluctuations during
periods of changing market interest rates than are comparable securities that pay interest currently. Longer term zero coupon bonds are more exposed to
interest rate risk than shorter term zero coupon bonds.
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9
Because the Fund has not commenced operations as of the date of
this prospectus, it does not have performance information an investor would find useful in evaluating the risks of investing in the Fund. The
Fund’s benchmark index is a customized weighted index comprised of the returns of the MSCI Emerging Markets Index (60%) and the JPMorgan Emerging
Markets Bond Index Plus (40%).
The Fund’s investment manager is BlackRock Advisors, LLC
(previously defined as “BlackRock”). The Fund’s sub-advisers are BlackRock Fund Advisors, BlackRock International Limited, BlackRock
Asset Management North Asia Limited and BlackRock (Singapore) Limited. Where applicable, “BlackRock” refers also to the Fund’s
sub-advisers.
Name
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Portfolio Manager
of the Fund
Since
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Title
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Jeff Shen, PhD
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2013
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Managing Director, Head of
Emerging Markets and Co-head of Investments for Scientific Active
Equity of BlackRock, Inc.
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Purchase and Sale of Fund
Shares
You may purchase or redeem shares of the Fund each day the New
York Stock Exchange is open. To purchase or sell shares you should contact your financial intermediary or financial professional, or, if you hold your
shares through the Fund, you should contact the Fund by phone at (800) 441-7762, by mail (c/o BlackRock Funds, P.O. Box 9819, Providence, Rhode Island
02940-8019), or by the Internet at www.blackrock.com/funds. The Fund’s initial and subsequent investment minimums generally are as follows,
although the Fund may reduce or waive the minimums in some cases:
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Investor A and
Investor C
Shares
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Institutional Shares
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Minimum Initial Investment
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$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.
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$2 million for institutions and individuals.
Institutional Shares are available to clients of
registered investment advisors who have $250,000 invested in the Fund.
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Minimum Additional Investment
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$50 for all accounts (with the exception of certain employer-sponsored retirement plans which may
have a lower minimum).
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No subsequent minimum.
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The Fund’s dividends and distributions may be subject to
Federal income taxes and may be taxed as ordinary income or capital gains, unless you are a tax-exempt investor or are investing through a retirement
plan, in which case you may be subject to Federal income tax upon withdrawal from such tax-deferred arrangements.
Payments to Broker/Dealers and
Other Financial Intermediaries
If you purchase shares of the Fund through a broker-dealer or
other financial intermediary, the Fund and BlackRock Investments, LLC, the Fund’s distributor, or its affiliates may pay the intermediary for the
sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other financial
intermediary and your individual financial professional to recommend the Fund over another investment. Ask your individual financial professional or
visit your financial intermediary’s website for more information.
10
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INVESTMENT COMPANY ACT FILE #811-05742
© BlackRock Advisors, LLC
SPRO-EMAP-0513
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CAM (PK) (USOTC:CAMG)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
CAM (PK) (USOTC:CAMG)
Gráfica de Acción Histórica
De May 2023 a May 2024
