M O N T H LY I N S I G H T

blackrock.com/ga

GLOBAL ALLOCATION FUND

Institutional: MALOX A: MDLOX C: MCLOX R: MRLOX

Portfolio Positioning Highlights as of August 31, 2016

} Volatility has once again reached unusually low levels. However, this could
change if the Fed tightens policy faster than markets are expecting.

Morningstar Analyst Rating

} The funds cash position increased during the month as we reduced exposure to
global stocks following their strong rally after the Brexit referendum.
}  We reduced exposure to consumer staples as we believe structural industry
headwinds, high valuations and rising interest rates will weigh on the sector.

Morningstar has awarded the fund a Gold medal,

its highest level of conviction. (Last Rating 4/4/16).1

Why investment style matters when interest rates rise

Investor interest in defensive stocks has pushed valuations to record highs. Given
the ongoing low-for-longer rate environment, traditional bond investors continue to
be attracted to any asset class offering income. This stretch for yield combined with
a preference for less volatile stocks has supported dividend and minimum-volatility
strategies for much of 2016. While there are good long-term reasons to invest in
both higher-yielding and lower-volatility assets, in the near-term, this trend may
have run its course.
Dividend stocks in the United States, particularly those in traditionally defensive
sectors such as utilities and consumer staples, are starting to struggle due to
valuations near all-time highs and less-than-stellar fundamentals. Long-term rates
appear to have bottomed, while short-term yields are now above their pre-Brexit
referendum level. This is pertinent because many of these dividend stocks are
highly sensitive to interest rates. As rates rise, investors may be coaxed back into
bonds, creating selling pressure on already overextended valuations.

Overall Morningstar Rating

HHHH

Institutional shares rated against 472 World Allocation

Funds, as of 8/31/16, based on risk-adjusted total
return. Ratings are determined monthly and subject
to change. The Overall Morningstar Rating for a
fund is derived from a weighted average of the
performance figures associated with its 3-, 5- and
10-year (if applicable) Morningstar Rating metrics.2

Portfolio Managers
Dennis Stattman, CFA
36 years of experience
Dan Chamby, CFA
28 years of experience
Aldo Roldan, PhD
32 years of experience

U.S. DEFENSIVE SECTORS ARE EXPENSIVE

5.5%

25

4.5

20

3.5

15

2.5

10

1.5
0.5

5
2005

2006

2007

2008

2009

S&P Utilities (LHS)

2010

2011

2012

2013

S&P Consumer Staples (LHS)

2014

10-YEAR TREASURY YIELD

FORWARD P/E ESTIMATES

In recent years, valuations have reached decade highs as the 10-year Treasury yield declined

Head of Asset Allocation

2015

10-Year Treas (RHS)

Source: Bloomberg. As of August 31, 2016.

Within the BlackRock Global Allocation Fund, valuation is a key factor in the
investment process. As of August 31, 2016, the fund was underweight both
consumer staples and utilities. In this environment, these value biases may be
appropriate for a variety of portfolios that focus on risk management and downside
protection. As a portfolio holding, the fund has historically provided lower-risk
equity exposure in more conservative portfolios and has dampened risk in more
aggressive, equity-centric portfolios, while providing incremental value given its
flexibility during periods of heightened volatility.

Russ Koesterich, CFA shares the

teams outlook on the markets.

PORTFOLIO CHARACTERISTICS

ASSET CLASS ALLOCATION

% of Net Assets

U.S. Equities 27
Non-U.S. Equities 28
U.S. Fixed Income 19
Non-U.S. Fixed Income 14

Number of Issuers

539

Upside Capture Ratio Since Inception*

70%

Downside Capture Ratio Since Inception*

43%

Equity Price/Earnings (FY1)

15.5x
$97.0B

Equity Wtd. Avg. Market Capitalization

Commodity-Related 4

1.3 years

Portfolio Effective Duration3

Cash Equivalents 8

Portfolio effective duration assumes 0 duration for equity holdings.

Largest change this month: Cash Equivalents from 6% to 8%
of assets.

GEOGRAPHIC ALLOCATION

Fixed Income Effective Duration

3.8 years

Fixed Income + Cash Effective Duration

3.0 years

CURRENCY ALLOCATION

% of Net Assets

% of Net Assets
United States 50

U.S. Dollar 67

Canada 3

Euro 10

Developed Europe 17

British Pound Sterling 4

Emerging Europe 1

Other Europe 3
Japanese Yen 10

Japan 11
Asia Pacific ex-Japan 3
Emerging Asia 3

Other Asia 3
Latin America 1

Latin America 3

Rest of the World 2

Africa/Middle East 1
Cash Equivalents 8

Largest change this month: United States from 52% to 50%

of assets.

Largest change this month: U.S. Dollar from 69% to 67%

of assets.

PORTFOLIO ALLOCATION CHANGES OVER TIME

100%

% OF NET ASSETS

80
60

40

20

1995

1996 1997 1998 1999 2000

As of
8/31/16

2001 2002

2003 2004

Over/
Under**

Historical
Range

2005 2006 2007 2008 2009 2010 2011

2012 2013 2014 2015

As of
8/31/16

Over/
Under**

8/16

Historical
Range

n U.S. Equities

26.9%

15-45%

n U.S. TIPS

4.6%

0-15%

n Developed Equities ex-U.S.

24.7%

10-35%

n U.S. Credit

6.8%

0-25%

n Emerging Market Equities

2.9%

0-15%

n Non U.S. Sovereign Debt

10.6%

0-25%

n Commodity-Related

4.4%

0-5%

n Non U.S. Credit

3.7%

0-25%

n U.S. Treasuries & Agencies

7.1%

0-15%

n Cash Equivalents

8.3%

0-30%

Prior to 2015, the funds exposure was based on market value and adjusted for the economic value of futures and swaps. From 2015, the funds exposure is based on the economic value of
securities and is adjusted for futures, options, swaps and convertible bonds. Commodity-related is comprised of precious metals ETFs. Historical ranges represent actual exposures, not
minimum or maximum prospectus limits. Subject to change.
* Fund inception is February 3, 1989. Up/down capture ratios relative to FTSE World Index. Up/down capture measures relative performance in up and down markets. Up capture shows how
much the fund gained relative to an index, when the index rose. Down capture shows how much the fund lost, relative to the index, when the index decreased.
** Over/under indications are relative to the funds reference benchmark, which is 36% S&P 500 Index, 24% FTSE World (ex-U.S.) Index, 24% BofA Merrill Lynch 5-year U.S. Treasury Bond
Index and 16% Citigroup Non-U.S. Dollar World Government Bond Index.
All data as of 8/31/16.

THE FUND HAS DELIVERED CONSISTENT GROWTH

WITH LESS VOLATILITY THAN GLOBAL STOCKS

10-year rolling annualized returns

10-year rolling annualized standard deviation

15%

18%

12

16.94

16

14
5.52
5.06

12

BlackRock Global Allocation Fund

FTSE World Index

2015
8/16

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

10.36

1999

2015
8/16

2014

2013

2012

2011

2010

2009

2007

2008

2006

2005

2004

2003

2002

8
2001

-3
2000

10

1999

2001

2000

FTSE World Index

BlackRock Global Allocation Fund

THE BENEFITS OF ACTIVE MANAGEMENT

OUTPERFORMANCE OVER THE LONG TERM

Risk and return since fund inception*

Since inception*, the longer the time horizon, the higher the
frequency of the funds outperformance versus Morningstar peers.

1500%

100%

U.S. Stocks

CUMULATIVE RETURN

1200

900
Reference Benchmark
600

Morningstar
Category Avg.

U.S. Bonds
Global Bonds

Global Stocks

300

Cash

0%

12

16

FREQUENCY OF FUND OUTPERFORMANCE

BlackRock Global Allocation Fund

ANNUALIZED STANDARD DEVIATION (RISK)

94%
86%
71%

319
periods

295
periods

271
periods

211
periods

Rolling 1-Year

Rolling 3-Year

Rolling 5-Year

Rolling 10-Year

*Data starts the first full month after the funds inception date of February 3, 1989.

PERFORMANCE DURING MARKET DOWNTURNS

20%

TOTAL RETURN

10
0

12.2
1.9

1.7
-2.3 -0.8

-10
-20

4.8

8.9
0.4
-4.3
-11.1

-5.1

-17.1

2.1

0.8
-7.8
-16.1

-30

-4.2

-7.7

-3.4

-5.8 -4.1
-19.1

-20.4

-6.5

-3.7

-0.8 -1.4 -0.8

-4.1

-21.9
-30.3

-40

-40.9

-50
1990

1992

2000

BlackRock Global Allocation Fund

2001

2002
FTSE World Index

2008
Reference Benchmark

2011

2015

Morningstar Category Avg.

Source: BlackRock, Bloomberg, Lipper, Morningstar. All data as of 8/31/16. All fund performance and data based on the Institutional shares, all other share classes will vary.
Asset classes represented by the following indexes. Global Stocks: The FTSE World Index, comprised of world equities, including the U.S.; U.S. Stocks: S&P 500 Index, comprises largecapitalization U.S. equities; Global Bonds: Citigroup World Government Bond Index, includes the most significant and liquid government bond markets globally with at least an investmentgrade rating. Index weights are based on the market capitalization of qualifying outstanding debt stocks; U.S. Bonds: BofA/ML 10-Year U.S. Treasury Bond Index, tracks the 10-year U.S.
Treasury bond; Cash: BoA/ML 3-Month U.S. Treasury Bill Index, tracks U.S. government securities maturing in 90 days.
Standard deviation measures the volatility of the funds returns. Higher deviation represents higher volatility.

Performance data quoted represents past performance and is no guarantee of future results. Investment returns and principal values
may fluctuate so that an investors 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.

% AVERAGE ANNUAL TOTAL RETURNS AS OF 8/31/16

1 Month

YTD

(not annualized) (not annualized)

0.43

Institutional
Investor A (Without Sales Charge)

Investor A (With Sales Charge)4

FTSE World Index5
Morningstar World Allocation Category Avg.
Reference Benchmark6

3.62

1 Year

3 Years

5 Years

10 Years

Since
Inception4

3.52

4.36

5.07

5.52

9.94
9.66

0.44

3.42

3.27

4.09

4.79

5.24

-4.84

-2.01

-2.15

2.23

3.66

4.68

9.44

0.20

6.18

7.71

7.37

9.23

5.06

6.96

0.12

5.96

5.01

3.76

4.94

4.47

-0.21

6.97

8.21

6.14

6.73

5.48

Total annualized returns as of 6/30/16 for Institutional shares: 1 Yr, -3.46%; 5 Yrs, 3.69%; 10 Yrs, 5.40%; Since Inception, 9.87%;
for Investor A shares without/with maximum sales charge: 1 Yr, -3.72%/-8.77%; 5 Yrs, 3.41%/2.30%; 10 Yrs, 5.12%/4.56%;
Since Inception, 9.59%/9.37%.
Performance data quoted represents past performance and is no guarantee of future results. Investment returns and principal
values may fluctuate so that an investors shares, when redeemed, may be worth more or less than their original cost. All returns
assume reinvestment of dividend and capital gain distributions. Current performance may be lower or higher than that shown.
Refer to blackrock.com for current month-end performance. Index performance is shown for illustrative purposes only. It is
not possible to invest directly in an unmanaged index. Share classes have different sales charges, fees and other features.
Returns with sales charge reflect deduction of current maximum initial sales charge of 5.25% for Investor A shares. Institutional
shares have no front- or back-end load. Institutional shares have limited availability and may be purchased at various minimums.
See prospectus for details. Total expenses for Institutional shares: 0.87%; Investor A: 1.14%. Expenses stated as of he funds most
recent prospectus. Investment returns reflect total fund operating expenses, net of all fees, waivers and/or expense reimbursements.
Important Risks: The fund is actively managed and its characteristics will vary. Stock and bond values fluctuate in price so the value of
your investment can go down depending on market conditions. International investing involves special risks including, but not limited
to currency fluctuations, illiquidity and volatility. These risks may be heightened for investments in emerging markets. Fixed income
risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk
refers to the possibility that the bond issuer will not be able to make principal and interest payments. Non-investment-grade debt
securities (high-yield/junk bonds) may be subject to greater market fluctuations, risk of default or loss of income and principal than
higher-rated securities. Asset allocation strategies do not assure profit and do not protect against loss. Short selling entails special
risks. If the fund makes short sales in securities that increase in value, the fund will lose value. Any loss on short positions may or may
not be offset by investing short-sale proceeds in other investments. The fund may use derivatives to hedge its investments or to seek
to enhance returns. Derivatives entail risks relating to liquidity, leverage and credit that may reduce returns and increase volatility.
The opinions expressed are those of the funds portfolio management team as of August 31, 2016, 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. There is no guarantee that any of these
views will come to pass. Reliance upon information in this material is at the sole discretion of the reader. Percent of net assets figures represent the Funds exposure based on the economic
value of securities adjusted for futures, options, swaps and convertible bonds.
1 The Morningstar Analyst Rating is not a credit or risk rating. It is a subjective evaluation performed by the manager research analysts of Morningstar. Morningstar evaluates funds based on five
key pillars, which are process, performance, people, parent, and price. Analysts use this five pillar evaluation to determine how they believe funds are likely to perform over the long term on a
risk-adjusted basis. They consider quantitative and qualitative factors in their research, and the weighting of each pillar may vary. The Analyst Rating scale is Gold, Silver, Bronze, Neutral, Negative.
A Morningstar Analyst Rating of Gold, Silver, or Bronze reflect an Analysts conviction in a funds prospects for outperformance. Analyst Ratings are continuously monitored and reevaluated
at least every 14 months. For more detailed information about Morningstars Analyst Rating, including its methodology, please go to http://corporate.morningstar.com/us/documents/%20
MethodologyDocuments/AnalystRatingforFundsMethodology.pdf. The Morningstar Analyst Rating should not be used as the sole basis in evaluating a mutual fund. Morningstar Analyst Ratings
involve unknown risks and uncertainties which may cause Morningstars expectations not to occur or to differ significantly from what we expected. 2 For each fund with a 3-year history, a
Morningstar Rating is calculated based on risk-adjusted returns that account for variations in a funds monthly performance (including sales charges, loads and redemption fees), placing more
emphasis on downward variations and rewarding consistent performance. The top 10% of funds 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. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution
percentages.) The fund was rated against the following numbers of U.S.-domiciled World Allocation funds: 472 in the last 3 years, 370 in the last 5 years and 179 in the last 10 years. With respect
to these World Allocation funds, the fund received a Morningstar Rating of 3, 3 and 4 for the 3-, 5- and 10-year periods, respectively. Ratings are for Institutional share class. Other classes may
have different performance characteristics. 3 Effective Duration measures the sensitivity of the price of a bond with embedded options to changes in interest rates, taking into account the likelihood
of the bond being called, put and/or sunk prior to its final maturity date. BlackRock uses a proprietary duration model which employs certain assumptions and may differ from other fund complexes.
Effective Duration is measured at the portfolio level and adjusted for leverage, hedging transactions and non-bond holdings, including derivatives. 4 Fund Inception: 2/3/89. Performance for
Investor A shares prior to their introduction (10/21/94) is based on the performance of Institutional shares adjusted to reflect the fees applicable to Investor A at time of such share class launch. This
information may be considered when assessing the funds performance, but does not represent actual performance of this share class. 5 The FTSE World Index is comprised of world equities,
including the U.S. 6 The Reference Benchmark is 36% S&P 500 Index, 24% FTSE World (ex-U.S.) Index, 24% BofA Merrill Lynch 5-year U.S. Treasury Bond Index and 16% Citigroup Non-U.S.
Dollar World Government Bond Index. S&P 500 Index comprises large-capitalization U.S. equities. FTSE World (ex-U.S.) Index comprises world equities, ex-U.S. BofA ML 5-year U.S. Treasury Bond
Index tracks the 5-year U.S. Treasury bond. Citigroup Non-U.S. Dollar World Government Bond Index tracks government bond indices, ex-U.S.

You should consider the investment objectives, risks, charges and expenses of the fund carefully before investing. The
prospectus and, if available, the summary prospectus contain this and other information about the fund and are available,
along with information on other BlackRock funds, by calling 800-882-0052 or from your financial professional. The prospectus
should be read carefully before investing.
2016 BlackRock, Inc. All Rights Reserved. BLACKROCK is a registered trademark of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are
those of their respective owners.
Prepared by BlackRock Investments, LLC, member FINRA.
Not FDIC Insured May Lose Value No Bank Guarantee
Lit. No. GA-COM-0816

OE21626T-0916 / USR-10245