Multi-Asset Income Fund

May 2020 | Commentary

INST: BIICX • A: BAICX • C: BCICX

Morningstar Overall Rating™ (Inst)

Performance: Cautious optimism about re-opening economies and historic stimulus measures allowed risk assets to rebound in April. The fund delivered its strongest monthly return since its inception amid the rally.

Contributors: Covered calls, high yield, global equities Detractors: Credit hedges, elevated cash allocation

Positioning: The uncertain growth backdrop keeps us disciplined in adding to risk in the near-term. High quality credit spreads look attractive and, with security dispersion elevated, the more resilient sectors present opportunities. Increased: Investment grade corporate bonds, U.S. equity futures Decreased: High yield bonds, European equity futures, emerging market debt

Tactical asset allocation in actionAs of April 30, the fund’s overall allocation was 66% fixed income, 30% equity and 3% cash.

30-day SEC Yield reflects the income earned by an investor in the fund during a 30-day period after deducting the fund’s expenses. Unsubsidized SEC Yield represents what a fund’s 30-day SEC Yield would have been had no fee waiver or expense reimbursement been in place over the period. Institutional shares may not be available to all investors. Performance data quoted represents past performance and is no guarantee of future results. Investment returns and principal values may fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvestment of dividends and capital gains. Current performance may be lower or higher than that shown. Refer to blackrock.com for most recent month-end performance.The overall Morningstar rating of 4 stars pertains to the fund’s Institutional shares, rated against 512 funds in the 30% to 50% Equity Allocation category as of 4/30/20. Ratings are based on a risk-adjusted total return and a weighted average of performance figures associated with 3-, 5- and 10-year Morningstar rating metrics. Ratings are determined monthly and subject to change.1

30-day SEC yield as of 4/30/20 Institutional Investor A Investor C Effective duration

Subsidized 5.20% 4.69% 4.22%2.81 years

Unsubsidized 5.07% 4.59% 4.09%

2017 2018 2019 202020162015201420132012

-25

0

25

50

75

100%

As of 4/30 High Low

Intl Dividend Equity 5 16 4

Global REITs 314

4 0

Preferred Stock 79

12 5

Agency/Govt 5 8 0

Cash 3 11 0

Bank Loans/CLOs 14% 16% 0%

16 0Non-Agency/CMBS6 7 1EM Debt

21 0Covered Calls

EM Dividend Equity 3 8 1

High Yield 15 55 12Inv Grade Bonds 10 20 0

Equity Hedges -4 -13 0

Currency Hedges -4 -6 0Interest Rate Hedges 0 -21 0

1 7MLP/Energy Infra 1

4 11 3U.S. Dividend Equity

Historical Apr yieldcontr.

3

2

6

2

0

11%

97

35

2

165

–

–Credit Hedges -3 -6 0 –

–

2

2

Values may not equal 100% due to rounding. Asset class exposure shown as a percent of market value. Hedging strategies shown as a percent of notional value and only include short positions.

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2

Higher yield and less downsideThe fund has provided a competitive yield while managing risk to limit losses during periods of market stress.

5.57

-7.43

4.90

-5.79

U.S.Equities

2.06

-4.89

TreasuryBonds

2.02

-11.90

CoreBonds

2.37

-3.03

Inv. Grade Debt

3.22

-4.81

Dividend Equities

4.05

-11.97

High Yield

6.37

-6.40

U.S. REITs

EM Debt

3.81

-14.53

5.71

-4.00

BankLoans

MLPs

7.26

-7.80

Average yield (%)

Average annual drawdown(%)

Non-traditional sources of incomeTraditional sources of income

Preferred Stock

6.51

-27.73

Source: Morningstar and Bloomberg. Since strategy inception (11/28/11) through 4/30/20. For illustrative purposes only. Data represents past performance and is no guarantee of future results. Yield data based on month-end numbers. Fund yield represented by average 30-Day SEC Yield (subsidized). Index yields are shown for illustrative purposes only and do not predict or depict the yield of any BlackRock fund. Yields for the various asset class indices have material differences including investment objectives, liquidity, safety, guarantees of insurance, fluctuation of principal or return and tax features. Fixed income yields represented by yield-to-worst; equity yields by 12-month dividend yield; MLP yield consists primarily of return of capital, which reduces the investor’s adjusted cost basis, the composition of which varies based on income, expenses, depreciation and tax elections made by the MLP based on each investor’s share of the MLP’s income, expenses, gains and losses. Average annual drawdown is the average of the largest declines in value from peak to trough during each of the calendar years 2012-2019 and YTD 2020. Represented Indices: Treasury bonds, Bloomberg Barclays U.S. 7-10 Year Treasury Bond Index; Core bonds, Bloomberg Barclays U.S. Aggregate Bond Index; Inv. grade debt, Bloomberg Barclays U.S. Corporate Bond Index; High yield bonds, Bloomberg Barclays HY 2% Issuer Capped Index; EM debt, JP Morgan Emerging Market Bond Index Global; Bank loans, S&P Leveraged Loan Index; U.S. equities, S&P 500 Index; Dividend equities, MSCI World High Dividend Yield Index; Preferred stock, S&P U.S. Preferred Stock Index; U.S. REITs, FTSE NAREIT Equity REIT Index; MLPs, Alerian MLP Index.

Lower volatility than a 50% stock/50% bond portfolioThe fund pursues a lower level of risk than a portfolio comprised of 50% stocks and 50% bonds.

● 50% stock/50% bond portfolio avg = 5.37● Fund avg = 3.93

0

20

40%

2019 20202017 201820162015201420132012

Source: Morningstar. Estimated 30-day standard deviation based on daily returns. 50% stock/50% bond portfolio represented by 50% MSCI World Index/50% Bloomberg Barclays U.S. Aggregate Bond Index. Standard deviation measures the volatility of returns. Higher deviation represents higher volatility.

Consistent monthly yieldSince inception of the strategy, the fund has provided a consistent and compelling level of monthly income.

5%

3

1 Core bonds avg = 2.37%

Global equities avg = 2.55%

Fund avg (sub) = 4.90%

2019 20202017 201820162015201420132012

Fund yield is 30-day SEC yield (subsidized), Institutional share class. Core bonds: Bloomberg Barclays U.S. Aggregate Bond Index. Global equities: MSCI World Index.

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Income insights

Take opportunities, with great disciplineApril saw the start of what is likely to be persistently poor economic data. We’ve already seen historic drops across consumption, manufacturing and employment data. The pace and path of the recovery is difficult to forecast. Analyst earnings estimates on the S&P 500 Index have not been as widely dispersed since 2008, and an increasing number of companies have withdrawn or suspended forward guidance. Furthermore, U.S. equity valuations are back to their recent highs and the threat of a second wave of the COVID-19 outbreak still looms as economies begin to normalize. Ultimately, our base case calls for growth resuming later this year, supported by historic stimulus, but we are staying disciplined in adding to equities and lower quality risk assets at these levels.

The opportunity within credit is particularly encouraging, with certain quality tranches trading at spreads on the higher end of their historical ranges (i.e., they are relatively inexpensive).

Covered call writing presents significant income-generating opportunities given elevated volatility levels. We’re identifying call candidates in three key groups:

• resilient businesses that can weather this storm,

• COVID “beneficiaries” and secular growth themes that should outlast the virus, and

• companies that may recover more quickly than others as growth rebounds.

Performance dispersion across and within sectors is growing, and we are seeking to identify the winners and losers.

We encourage long-term investors not to miss the opportunities presented in today’s markets. Consider the big picture. Central banks anchoring interest rates at zero means safe-haven assets have low forward return and income potential. But as the global population ages and interest rates remain low, the need for income-generating assets remains. Compelling income opportunities do exist today and are best sought through a risk-managed tactical strategy like the BlackRock Multi-Asset Income Fund.

3

Historical return compositionThe fund has consistently generated a significant portion of its total return from income.

Since strategy

inception

54.8

Total returnNAV (price) returnIncome return

’12 ’13 ’14 ’15 ’16

13.4%

6.7%

9.0%

’17 ’19 ’20YTD

’18

13.9%

-6.7%

9.4%

5.0%

-1.4%

-3.6%

58.5%

3.7

Source: Bloomberg. Since strategy inception (11/28/11) through 4/30/20.

Performance during market downturns

BlackRock Multi-Asset Income Fund (Inst) MSCI World IndexBloomberg Barclays U.S. Aggregate Bond Index

2.0%

-2.0%

Average total returnsin periods of rising rates

-12.8%

-5.8%

Average annual maximumdrawdown vs. equities

Source: Morningstar and Bloomberg. Since strategy inception (11/28/11) through 4/30/20. Average annual drawdown is the average of the largest declines in value from peak to trough during each of the calendar years 2012 - 2019 and YTD 2020. Rising rate periods include the average returns during periods of at least a 40-basis point (0.40%) increase in 10-year Treasury from start date to end date within a 90-day rolling window.

Michael Fredericks Head of Income Investing for BlackRock’s Multi-Asset Strategies Team

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Total returns (annualized) as of 3/31/20 for Institutional shares: 1 Yr, -5.99%; 5 Yrs, 1.81%; 10 Yrs, 5.18%; for Investor A shares without/with maximum sales charge: 1 Yr, -6.24%/-11.16%; 5 Yrs, 1.55%/0.46%; 10 Yrs, 4.91%/4.35%.

Data represents past performance and is no guarantee of future results. Investment returns and principal values may fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvestment of dividends and capital gains. Current performance may be lower or higher than that shown. Share classes have different sales charges, fees and other features. Returns with sales charge reflect the deduction of current maximum initial sales charge of 5.25% for Investor A shares. Institutional shares have no front- or back-end load, limited availability and may be purchased at various minimums. See prospectus for details. Investment returns reflect total fund operating expenses, net of all fees, waivers and/or reimbursements. Expenses, as stated in the fund’s most recent prospectus, for Institutional/Inv A shares: Total, 0.70%/0.94%; Net, Including Investment-Related Expenses (dividend expense, interest expense, acquired fund fees and expenses and certain other fund expenses): 0.59%/0.84%. All share classes have contractual waivers with an end date of 11/30/20 terminable upon 90 days’ notice. Index performance is shown for illustrative purposes only. It is not possible to invest directly in an unmanaged index. Net expenses, excluding investment-related expenses for Institutional/Inv A shares: 0.55%/0.80%.Important risks: The fund is actively managed and its characteristics will vary. The fund may invest significantly in BlackRock equity and/or fixed income mutual funds (“underlying funds”) and affiliated and unaffiliated ETFs. Stock and bond values fluctuate in price so the value of your investment can go down depending on market conditions. International investing involves special risks including, but not limited to political risks, currency fluctuations, illiquidity and volatility. These risks may be heightened for investments in emerging markets. Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments. Non-investment-grade debt securities (high-yield/junk bonds) may be subject to greater market fluctuations, risk of default or loss of income and principal than higher-rated securities. Asset allocation strategies do not assure profit and do not protect against loss. Non-diversification of investments means that more assets are potentially invested in fewer securities than if investments were diversified, so risk is increased because each investment has a greater effect on performance. The fund may use derivatives to hedge its investments or to seek to enhance returns. Derivatives entail risks relating to liquidity, leverage and credit that may reduce returns and increase volatility. Negative weightings may result from the use of leverage. Leverage involves the use of various financial instruments or borrowed capital in an attempt to increase investment return. Leverage risks include potential for higher volatility, greater decline of the fund’s net asset value and fluctuations of dividends and distributions paid by the fund. The opinions expressed are those of the fund’s portfolio management team as of April 30, 2020, and may change as subsequent conditions vary. Information and opinions are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy.

1 The Morningstar RatingTM for funds, or “star rating,” is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. With respect to U.S.-domiciled funds in the 30% to 50% Equity Allocation category, the fund received a Morningstar Rating of 3 stars for the 3-year period, rated against 512 funds; 3 stars for the 5-year period, rated against 418 funds; and 4 stars for the 10-year period, rated against 272 funds. Ratings are for Institutional share class. Other classes may have different performance characteristics. 2 MSCI World Index is a market capitalization-weighted index that represents the performance of developed market equities; Bloomberg Barclays U.S. Aggregate Bond Index represents the performance of the total U.S. investment grade bond market.

Must be preceded or accompanied by a prospectus.

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Prepared by BlackRock Investments, LLC, member FINRA.

Not FDIC Insured • May Lose Value • No Bank Guarantee

Lit No. MAI-COM-0420 OE12060T-0520

Average annual total returns (%) as of 4/30/201 Month

(not annualized)YTD

(not annualized)

1 Year

3 Years

5 Years

10 YearsStrategy

11/28/11

Institutional 5.62 -6.72 -1.79 2.35 2.83 5.64 5.76

Investor A (Without Sales Charge) 5.60 -6.80 -2.04 2.12 2.57 5.37 5.50

Investor A (With Sales Charge) 0.06 -11.70 -7.18 0.30 1.47 4.81 4.82

50% MSCI World/50% Bloomberg Barclays U.S. Aggregate Bond2 6.35 -3.66 3.82 5.44 4.64 6.10 6.85

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