BlackRock Funds III

 

STATEMENT OF ADDITIONAL INFORMATION

BlackRock Funds III

BlackRock LifePath® Dynamic Retirement Fund

BlackRock LifePath® Dynamic 2025 Fund

BlackRock LifePath® Dynamic 2030 Fund

BlackRock LifePath® Dynamic 2035 Fund

BlackRock LifePath® Dynamic 2040 Fund

BlackRock LifePath® Dynamic 2045 Fund

BlackRock LifePath® Dynamic 2050 Fund

BlackRock LifePath® Dynamic 2055 Fund

BlackRock LifePath® Dynamic 2060 Fund

BlackRock LifePath® Dynamic 2065 Fund

400 Howard Street, San Francisco, California 94105 • Phone No. (800) 441-7762

 

BlackRock Funds III (the “Trust”) is an open-end, series management investment company. This combined Statement of Additional Information (“SAI”) contains additional information about Investor A Shares, Investor C Shares, Institutional Shares, Class K Shares and Class R Shares of the Trust’s BlackRock LifePath® Dynamic Retirement Fund, BlackRock LifePath® Dynamic 2025 Fund, BlackRock LifePath® Dynamic 2030 Fund, BlackRock LifePath® Dynamic 2035 Fund, BlackRock LifePath® Dynamic 2040 Fund, BlackRock LifePath® Dynamic 2045 Fund, BlackRock LifePath® Dynamic 2050 Fund, BlackRock LifePath® Dynamic 2055 Fund, BlackRock LifePath® Dynamic 2060 Fund and BlackRock LifePath® Dynamic 2065 Fund (each, a “Fund” and collectively, the “Funds”).

Each Fund invests in a combination of stock, bond and money market funds (the “Underlying Funds”) and derivatives. BlackRock Fund Advisors (“BFA”) serves as investment adviser to the Funds, and BFA or its affiliates serves as investment adviser to certain Underlying Funds.

This SAI is not a prospectus and should be read in conjunction with the current prospectuses of the Funds, each dated April 28, 2023 (each, a “Prospectus” and collectively, the “Prospectuses”), which have been filed with the Securities and Exchange Commission (the “Commission”) and can be obtained, without charge, by calling (800) 441-7762 or by writing to the Funds at the above address. The Prospectuses are incorporated by reference into this SAI, and Part I of this SAI and the portions of Part II of this SAI that relate to the Funds have been incorporated by reference into the Funds’ Prospectuses. The portions of Part II of this SAI that do not relate to the Funds do not form a part of the Funds’ SAI, have not been incorporated by reference into the Funds’ Prospectuses and should not be relied upon by investors in the Funds. All terms used in this SAI that are defined in the Prospectuses have the meanings assigned in the Prospectuses. The audited financial statements for the Funds are incorporated into this SAI by reference to the Funds’ combined Annual Report to Shareholders for the fiscal year ended December 31, 2022 (the “Annual Report”). You may request a copy of the Annual Report at no charge by calling (800) 441-7762 between 8:00 a.m. and 6:00 p.m. Eastern time on any business day.

References to the Investment Company Act of 1940, as amended (the “Investment Company Act”), or other applicable law, will include any rules promulgated thereunder and any guidance,


interpretations or modifications by the Commission, Commission staff or other authority with appropriate jurisdiction, including court interpretations, and exemptive, no-action or other relief or permission from the Commission, Commission staff or other authority.

LifePath® is a registered service mark of BlackRock Institutional Trust Company, N.A. and the LifePath products are covered by U.S. Patents 5,812,987 and 6,336,102.

 

Class

  BlackRock
LifePath®
Dynamic

Retirement
Fund
  BlackRock
LifePath®
Dynamic

2025 Fund
  BlackRock
LifePath®
Dynamic

2030 Fund
  BlackRock
LifePath®
Dynamic

2035 Fund
  BlackRock
LifePath®
Dynamic

2040 Fund
Investor A Shares   LPRAX   LPBAX   LPRDX   LPJAX   LPREX
Investor C Shares   LPCRX   LPBCX   LPCNX   LPJCX   LPCKX
Institutional Shares   STLAX   LPBIX   STLDX   LPJIX   STLEX
Class K Shares   LPSAX   LPBKX   LPSDX   LPJKX   LPSFX
Class R Shares   LPRRX   LPBRX   LPRNX   LPJRX   LPRKX

Class

  BlackRock
LifePath®
Dynamic

2045 Fund
  BlackRock
LifePath®
Dynamic

2050 Fund
  BlackRock
LifePath®
Dynamic

2055 Fund
  BlackRock
LifePath®
Dynamic

2060 Fund
  BlackRock
LifePath®
Dynamic

2065 Fund
Investor A Shares   LPHAX   LPRFX   LPVAX   LPDAX   LPWAX
Investor C Shares   LPHCX   LPCPX   LPVCX   LPDCX   LPWCX
Institutional Shares   LPHIX   STLFX   LPVIX   LPDIX   LPWIX
Class K Shares   LPHKX   LPSGX   LPVKX   LPDKX   LPWKX
Class R Shares   LPHRX   LPRPX   LPVRX   LPDRX   LPWRX

BlackRock Fund Advisors — Manager

BlackRock Investments, LLC — Distributor

 

The date of this Statement of Additional Information is April 28, 2023.


TABLE OF CONTENTS

 

    Page  

PART I

 

Investment Objectives and Policies

    I-2  

Investment Restrictions

    I-11  

Information on Trustees and Officers

    I-13  

Management, Advisory and Other Service Arrangements

    I-24  

Information on Distribution Related Expenses

    I-36  

Computation of Offering Price Per Share

    I-38  

Portfolio Transactions and Brokerage

    I-39  

Additional Information

    I-42  

Financial Statements

    I-50  

Disclaimers

    I-50  

PART II

 

Investment Risks and Considerations

    II-1  

Management and Other Service Arrangements

    II-74  

Selective Disclosure of Portfolio Holdings

    II-76  

Purchase of Shares

    II-88  

Redemption of Shares

    II-105  

Shareholder Services

    II-107  

Pricing of Shares

    II-111  

Portfolio Transactions and Brokerage

    II-114  

Dividends and Taxes

    II-118  

Performance Data

    II-125  

Proxy Voting Policies and Procedures

    II-127  

General Information

    II-127  

Appendix A — Description of Bond Ratings

    A-1  

Appendix B — Proxy Voting Policies

    B-1  


PART I: INFORMATION ABOUT THE FUNDS

 

Part I of this Statement of Additional Information (“SAI”) sets forth information about BlackRock LifePath® Dynamic Retirement Fund, BlackRock LifePath® Dynamic 2025 Fund, BlackRock LifePath® Dynamic 2030 Fund, BlackRock LifePath® Dynamic 2035 Fund, BlackRock LifePath® Dynamic 2040 Fund, BlackRock LifePath® Dynamic 2045 Fund, BlackRock LifePath® Dynamic 2050 Fund, BlackRock LifePath® Dynamic 2055 Fund, BlackRock LifePath® Dynamic 2060 Fund and BlackRock LifePath® Dynamic 2065 Fund (each, a “Fund” and collectively, the “Funds”), each a series of BlackRock Funds III (the “Trust”). It includes information about the Trust’s Board of Trustees (the “Board” or the “Board of Trustees” and the members of which are “Trustees”), the advisory and management services provided to and the management fees paid by the Funds, and information about other fees applicable to and services provided to the Funds. This Part I should be read in conjunction with the current prospectuses for Investor A Shares, Investor C Shares, Institutional Shares, Class K Shares and Class R Shares of the Funds, each dated April 28, 2023 (each, a “Prospectus” and collectively, the “Prospectuses”) and those portions of Part II of this SAI that pertain to the Funds.

 

I.   Investment Objectives and Policies

 

Please see the Prospectuses for more information about each Fund’s investment objective and policies. Each Fund invests in a combination of stock, bond and money market funds (the “Underlying Funds”) and derivatives, and may also invest in U.S. government securities and short-term paper. BlackRock Institutional Trust Company, N.A. (“BTC”) has granted the Trust a non-exclusive license to use the name “LifePath.” If the license agreement is terminated, the Trust, at BTC’s request, will cease using the “LifePath” name.

 

The investment objective and policies of a Fund determine the allocation and reallocation of assets to the combination of Underlying Funds and derivatives, the degree of risk to which the Fund is subject and, ultimately, its performance. As with all investment companies, there can be no assurance that the investment objective of any Fund will be achieved.

 

Each Fund is classified as diversified under the Investment Company Act.

 

On March 9, 2020, each Fund ceased to invest in its corresponding “master” portfolio (each, a “Master Portfolio”) of Master Investment Portfolio (“MIP”), as part of a “master/feeder” structure and instead operates as a stand-alone fund. In connection with this change, the Trust, on behalf of each Fund, entered into a management agreement with BFA, the terms of which are substantially the same as the management agreement between BFA and MIP, on behalf of each Master Portfolio, including the management fee rate. Additionally, the change to the stand-alone structure did not increase the fees and expenses borne by each Fund or create a taxable event for each Fund or their shareholders.

 

I-2


A list of the Master Portfolio that each Fund invested in prior to March 9, 2020 is shown below.

 

Fund

  

Master Portfolio in Which the Fund Previously Invested

BlackRock LifePath® Dynamic Retirement Fund    LifePath® Dynamic Retirement Master Portfolio
BlackRock LifePath® Dynamic 2025 Fund    LifePath® Dynamic 2025 Master Portfolio
BlackRock LifePath® Dynamic 2030 Fund    LifePath® Dynamic 2030 Master Portfolio
BlackRock LifePath® Dynamic 2035 Fund    LifePath® Dynamic 2035 Master Portfolio
BlackRock LifePath® Dynamic 2040 Fund    LifePath® Dynamic 2040 Master Portfolio
BlackRock LifePath® Dynamic 2045 Fund    LifePath® Dynamic 2045 Master Portfolio
BlackRock LifePath® Dynamic 2050 Fund    LifePath® Dynamic 2050 Master Portfolio
BlackRock LifePath® Dynamic 2055 Fund    LifePath® Dynamic 2055 Master Portfolio
BlackRock LifePath® Dynamic 2060 Fund    LifePath® Dynamic 2060 Master Portfolio
BlackRock LifePath® Dynamic 2065 Fund    LifePath® Dynamic 2065 Master Portfolio

 

In implementing each Fund’s investment strategy, from time to time, BlackRock Fund Advisors (“BFA” or the “Manager”), each Fund’s investment manager, may consider and employ techniques and strategies designed to minimize and defer the U.S. federal income taxes which may be incurred by shareholders in connection with their investment in such Fund.

 

* * *

 

Set forth below is a listing of some of the types of investments and investment strategies that a Fund and its Underlying Funds may use, and the risks and considerations associated with those investments and investment strategies. Please see Part II of this SAI for further information on these investments and investment strategies. Information contained in Part II about the risks and considerations associated with investments and/or investment strategies applies only to the extent a Fund or its Underlying Funds makes each type of investment or uses each investment strategy. Information that does not apply to a Fund or its Underlying Funds does not form a part of the Fund’s SAI and should not be relied on by investors in that Fund.

 

Only information that is clearly identified as applicable to a Fund is considered to form a part of that Fund’s SAI.

 

    

BlackRock
LifePath®

Dynamic

Retirement
Fund

 

BlackRock
LifePath®

Dynamic

2025
Fund

 

BlackRock
LifePath®

Dynamic

2030
Fund

 

BlackRock
LifePath®

Dynamic

2035
Fund

 

BlackRock
LifePath®

Dynamic

2040
Fund

 

BlackRock
LifePath®

Dynamic

2045
Fund

 

BlackRock
LifePath®

Dynamic

2050
Fund

 

BlackRock
LifePath®

Dynamic

2055
Fund

 

BlackRock
LifePath®

Dynamic

2060
Fund

 

BlackRock
LifePath®

Dynamic

2065
Fund

144A Securities

  X   X   X   X   X   X   X   X   X   X

Asset-Backed Securities

  X   X   X   X   X   X   X   X   X   X

Asset-Based Securities

  X   X   X   X   X   X   X   X   X   X

Precious Metal-
Related Securities

  X   X   X   X   X   X   X   X   X   X

Borrowing and Leverage

  X   X   X   X   X   X   X   X   X   X

Cash Flows; Expenses

  X   X   X   X   X   X   X   X   X   X

Cash Management

  X   X   X   X   X   X   X   X   X   X

 

I-3


    

BlackRock
LifePath®

Dynamic

Retirement
Fund

 

BlackRock
LifePath®

Dynamic

2025
Fund

 

BlackRock
LifePath®

Dynamic

2030
Fund

 

BlackRock
LifePath®

Dynamic

2035
Fund

 

BlackRock
LifePath®

Dynamic

2040
Fund

 

BlackRock
LifePath®

Dynamic

2045
Fund

 

BlackRock
LifePath®

Dynamic

2050
Fund

 

BlackRock
LifePath®

Dynamic

2055
Fund

 

BlackRock
LifePath®

Dynamic

2060
Fund

 

BlackRock
LifePath®

Dynamic

2065
Fund

Collateralized Debt Obligations

  X   X   X   X   X   X   X   X   X   X

Collateralized Bond Obligations

  X   X   X   X   X   X   X   X   X   X

Collateralized Loan Obligations

  X   X   X   X   X   X   X   X   X   X

Commercial Paper

  X   X   X   X   X   X   X   X   X   X

Commodity-Linked Derivative Instruments and Hybrid Instruments

  X   X   X   X   X   X   X   X   X   X

Qualifying Hybrid Instruments

  X   X   X   X   X   X   X   X   X   X

Hybrid Instruments Without Principal Protection

  X   X   X   X   X   X   X   X   X   X

Limitations on Leverage

  X   X   X   X   X   X   X   X   X   X

Counterparty Risk

  X   X   X   X   X   X   X   X   X   X

Convertible Securities

  X   X   X   X   X   X   X   X   X   X

Corporate Loans

  X   X   X   X   X   X   X   X   X   X

Direct Lending

                   

Credit Linked Securities

  X   X   X   X   X   X   X   X   X   X

Cyber Security Issues

  X   X   X   X   X   X   X   X   X   X

Debt Securities

  X   X   X   X   X   X   X   X   X   X

Inflation-Indexed Bonds

  X   X   X   X   X   X   X   X   X   X

Investment Grade Debt Obligations

  X   X   X   X   X   X   X   X   X   X

High Yield Investments (“Junk Bonds”)

  X   X   X   X   X   X   X   X   X   X

Mezzanine Investments

  X   X   X   X   X   X   X   X   X   X

Pay-in-kind Bonds

  X   X   X   X   X   X   X   X   X   X

Supranational Entities

  X   X   X   X   X   X   X   X   X   X

Depositary Receipts (ADRs, EDRs and GDRs)

  X   X   X   X   X   X   X   X   X   X

 

I-4


    

BlackRock
LifePath®

Dynamic

Retirement
Fund

 

BlackRock
LifePath®

Dynamic

2025
Fund

 

BlackRock
LifePath®

Dynamic

2030
Fund

 

BlackRock
LifePath®

Dynamic

2035
Fund

 

BlackRock
LifePath®

Dynamic

2040
Fund

 

BlackRock
LifePath®

Dynamic

2045
Fund

 

BlackRock
LifePath®

Dynamic

2050
Fund

 

BlackRock
LifePath®

Dynamic

2055
Fund

 

BlackRock
LifePath®

Dynamic

2060
Fund

 

BlackRock
LifePath®

Dynamic

2065
Fund

Derivatives

  X   X   X   X   X   X   X   X   X   X

Hedging

  X   X   X   X   X   X   X   X   X   X

Speculation

  X   X   X   X   X   X   X   X   X   X

Risk Factors in Derivatives

  X   X   X   X   X   X   X   X   X   X

Correlation Risk

  X   X   X   X   X   X   X   X   X   X

Counterparty Risk

  X   X   X   X   X   X   X   X   X   X

Credit Risk

  X   X   X   X   X   X   X   X   X   X

Currency Risk

  X   X   X   X   X   X   X   X   X   X

Illiquidity Risk

  X   X   X   X   X   X   X   X   X   X

Leverage Risk

  X   X   X   X   X   X   X   X   X   X

Market Risk

  X   X   X   X   X   X   X   X   X   X

Valuation Risk

  X   X   X   X   X   X   X   X   X   X

Volatility Risk

  X   X   X   X   X   X   X   X   X   X

Futures

  X   X   X   X   X   X   X   X   X   X

Swap Agreements

  X   X   X   X   X   X   X   X   X   X

Credit Default Swaps and Similar Instruments

  X   X   X   X   X   X   X   X   X   X

Interest Rate Swaps, Floors and Caps

  X   X   X   X   X   X   X   X   X   X

Total Return Swaps

  X   X   X   X   X   X   X   X   X   X

Options

  X   X   X   X   X   X   X   X   X   X

Options on Securities and Securities Indices

  X   X   X   X   X   X   X   X   X   X

Call Options

  X   X   X   X   X   X   X   X   X   X

Put Options

  X   X   X   X   X   X   X   X   X   X

Options on Government National Mortgage Association (“GNMA”) Certificates

  X   X   X   X   X   X   X   X   X   X

Options on Swaps
(“Swaptions”)

  X   X   X   X   X   X   X   X   X   X

Foreign Exchange Transactions

  X   X   X   X   X   X   X   X   X   X

 

I-5


    

BlackRock
LifePath®

Dynamic

Retirement
Fund

 

BlackRock
LifePath®

Dynamic

2025
Fund

 

BlackRock
LifePath®

Dynamic

2030
Fund

 

BlackRock
LifePath®

Dynamic

2035
Fund

 

BlackRock
LifePath®

Dynamic

2040
Fund

 

BlackRock
LifePath®

Dynamic

2045
Fund

 

BlackRock
LifePath®

Dynamic

2050
Fund

 

BlackRock
LifePath®

Dynamic

2055
Fund

 

BlackRock
LifePath®

Dynamic

2060
Fund

 

BlackRock
LifePath®

Dynamic

2065
Fund

Spot Transactions and FX Forwards

  X   X   X   X   X   X   X   X   X   X

Currency Futures

  X   X   X   X   X   X   X   X   X   X

Currency Options

  X   X   X   X   X   X   X   X   X   X

Currency Swaps

  X   X   X   X   X   X   X   X   X   X

Distressed Securities

  X   X   X   X   X   X   X   X   X   X

Environmental, Social and Governance (“ESG”) Integration

  X   X   X   X   X   X   X   X   X   X

Equity Securities

  X   X   X   X   X   X   X   X   X   X

Real Estate-Related Securities

  X   X   X   X   X   X   X   X   X   X

Securities of Smaller or Emerging Growth Companies

  X   X   X   X   X   X   X   X   X   X

Exchange-Traded Notes (“ETNs”)

  X   X   X   X   X   X   X   X   X   X

Foreign Investments

  X   X   X   X   X   X   X   X   X   X

Foreign Investment Risks

  X   X   X   X   X   X   X   X   X   X

Foreign Market Risk

  X   X   X   X   X   X   X   X   X   X

Foreign Economy Risk

  X   X   X   X   X   X   X   X   X   X

Currency Risk and Exchange Risk

  X   X   X   X   X   X   X   X   X   X

Governmental Supervision and Regulation/
Accounting Standards

  X   X   X   X   X   X   X   X   X   X

Certain Risks of Holding Fund Assets Outside
the United States

  X   X   X   X   X   X   X   X   X   X

Publicly Available Information

  X   X   X   X   X   X   X   X   X   X

 

I-6


    

BlackRock
LifePath®

Dynamic

Retirement
Fund

 

BlackRock
LifePath®

Dynamic

2025
Fund

 

BlackRock
LifePath®

Dynamic

2030
Fund

 

BlackRock
LifePath®

Dynamic

2035
Fund

 

BlackRock
LifePath®

Dynamic

2040
Fund

 

BlackRock
LifePath®

Dynamic

2045
Fund

 

BlackRock
LifePath®

Dynamic

2050
Fund

 

BlackRock
LifePath®

Dynamic

2055
Fund

 

BlackRock
LifePath®

Dynamic

2060
Fund

 

BlackRock
LifePath®

Dynamic

2065
Fund

Settlement Risk

  X   X   X   X   X   X   X   X   X   X

Sovereign Debt

  X   X   X   X   X   X   X   X   X   X

Withholding Tax Reclaims Risk

  X   X   X   X   X   X   X   X   X   X

Funding Agreements

  X   X   X   X   X   X   X   X   X   X

Guarantees

  X   X   X   X   X   X   X   X   X   X

Illiquid Investments

  X   X   X   X   X   X   X   X   X   X

Index Funds

  X   X   X   X   X   X   X   X   X   X

Tracking Error Risk

  X   X   X   X   X   X   X   X   X   X

S&P 500 Index

  X   X   X   X   X   X   X   X   X   X

Russell Indexes

  X   X   X   X   X   X   X   X   X   X

MSCI Indexes

  X   X   X   X   X   X   X   X   X   X

FTSE Indexes

  X   X   X   X   X   X   X   X   X   X

Bloomberg Indexes

  X   X   X   X   X   X   X   X   X   X

ICE BofA Indexes

  X   X   X   X   X   X   X   X   X   X

Indexed and Inverse Securities

  X   X   X   X   X   X   X   X   X   X

Inflation Risk

  X   X   X   X   X   X   X   X   X   X

Initial Public Offering (“IPO”) Risk

  X   X   X   X   X   X   X   X   X   X

Interfund Lending Program

  X   X   X   X   X   X   X   X   X   X

Borrowing, to the extent permitted by the Fund’s investment policies and restrictions

  X   X   X   X   X   X   X   X   X   X

Lending, to the extent permitted by the Fund’s investment policies and restrictions

  X   X   X   X   X   X   X   X   X   X

Investment in Emerging Markets

  X   X   X   X   X   X   X   X   X   X

Brady Bonds

  X   X   X   X   X   X   X   X   X   X

China Investments Risk

  X   X   X   X   X   X   X   X   X   X

 

I-7


    

BlackRock
LifePath®

Dynamic

Retirement
Fund

 

BlackRock
LifePath®

Dynamic

2025
Fund

 

BlackRock
LifePath®

Dynamic

2030
Fund

 

BlackRock
LifePath®

Dynamic

2035
Fund

 

BlackRock
LifePath®

Dynamic

2040
Fund

 

BlackRock
LifePath®

Dynamic

2045
Fund

 

BlackRock
LifePath®

Dynamic

2050
Fund

 

BlackRock
LifePath®

Dynamic

2055
Fund

 

BlackRock
LifePath®

Dynamic

2060
Fund

 

BlackRock
LifePath®

Dynamic

2065
Fund

Investment in Other Investment Companies

  X   X   X   X   X   X   X   X   X   X

Exchange-Traded Funds

  X   X   X   X   X   X   X   X   X   X

Lease Obligations

  X   X   X   X   X   X   X   X   X   X

LIBOR Risk

  X   X   X   X   X   X   X   X   X   X

Life Settlement Investments

  X   X   X   X   X   X   X   X   X   X

Liquidity Risk Management

  X   X   X   X   X   X   X   X   X   X

Master Limited Partnerships

  X   X   X   X   X   X   X   X   X   X

Merger Transaction Risk

  X   X   X   X   X   X   X   X   X   X

Money Market Obligations of Domestic Banks, Foreign Banks and Foreign Branches of U.S. Banks

  X   X   X   X   X   X   X   X   X   X

Money Market Securities

  X   X   X   X   X   X   X   X   X   X

Mortgage-Related Securities

  X   X   X   X   X   X   X   X   X   X

Mortgage-Backed Securities

  X   X   X   X   X   X   X   X   X   X

Collateralized Mortgage Obligations (“CMOs”)

  X   X   X   X   X   X   X   X   X   X

Adjustable Rate Mortgage Securities

  X   X   X   X   X   X   X   X   X   X

CMO Residuals

  X   X   X   X   X   X   X   X   X   X

Stripped Mortgage-Backed Securities

  X   X   X   X   X   X   X   X   X   X

Tiered Index Bonds

  X   X   X   X   X   X   X   X   X   X

TBA Commitments

  X   X   X   X   X   X   X   X   X   X

Mortgage Dollar Rolls

  X   X   X   X   X   X   X   X   X   X

Net Interest Margin (NIM) Securities

  X   X   X   X   X   X   X   X   X   X

 

I-8


    

BlackRock
LifePath®

Dynamic

Retirement
Fund

 

BlackRock
LifePath®

Dynamic

2025
Fund

 

BlackRock
LifePath®

Dynamic

2030
Fund

 

BlackRock
LifePath®

Dynamic

2035
Fund

 

BlackRock
LifePath®

Dynamic

2040
Fund

 

BlackRock
LifePath®

Dynamic

2045
Fund

 

BlackRock
LifePath®

Dynamic

2050
Fund

 

BlackRock
LifePath®

Dynamic

2055
Fund

 

BlackRock
LifePath®

Dynamic

2060
Fund

 

BlackRock
LifePath®

Dynamic

2065
Fund

Municipal Investments

  X   X   X   X   X   X   X   X   X   X

Risk Factors and Special Considerations Relating to Municipal Bonds

  X   X   X   X   X   X   X   X   X   X

Description of Municipal Bonds

  X   X   X   X   X   X   X   X   X   X

General Obligation Bonds

  X   X   X   X   X   X   X   X   X   X

Revenue Bonds

  X   X   X   X   X   X   X   X   X   X

Private Activity Bonds (“PABs”)

  X   X   X   X   X   X   X   X   X   X

Moral Obligation Bonds

  X   X   X   X   X   X   X   X   X   X

Municipal Notes

  X   X   X   X   X   X   X   X   X   X

Municipal Commercial Paper

  X   X   X   X   X   X   X   X   X   X

Municipal Lease Obligations

  X   X   X   X   X   X   X   X   X   X

Tender Option Bonds

  X   X   X   X   X   X   X   X   X   X

Yields

  X   X   X   X   X   X   X   X   X   X

Variable Rate Demand Obligations (“VRDOs”)

  X   X   X   X   X   X   X   X   X   X

Transactions in Financial Futures Contracts on Municipal Indexes

  X   X   X   X   X   X   X   X   X   X

Call Rights

  X   X   X   X   X   X   X   X   X   X

Municipal Interest Rate Swap Transactions

  X   X   X   X   X   X   X   X   X   X

Insured Municipal Bonds

  X   X   X   X   X   X   X   X   X   X

 

I-9


    

BlackRock
LifePath®

Dynamic

Retirement
Fund

 

BlackRock
LifePath®

Dynamic

2025
Fund

 

BlackRock
LifePath®

Dynamic

2030
Fund

 

BlackRock
LifePath®

Dynamic

2035
Fund

 

BlackRock
LifePath®

Dynamic

2040
Fund

 

BlackRock
LifePath®

Dynamic

2045
Fund

 

BlackRock
LifePath®

Dynamic

2050
Fund

 

BlackRock
LifePath®

Dynamic

2055
Fund

 

BlackRock
LifePath®

Dynamic

2060
Fund

 

BlackRock
LifePath®

Dynamic

2065
Fund

Build America Bonds

  X   X   X   X   X   X   X   X   X   X

Tax-Exempt Municipal Investments

  X   X   X   X   X   X   X   X   X   X

Participation Notes

  X   X   X   X   X   X   X   X   X   X

Portfolio Turnover Rates

  X   X   X   X   X   X   X   X   X   X

Preferred Stock

  X   X   X   X   X   X   X   X   X   X

Tax-Exempt Preferred Shares

  X   X   X   X   X   X   X   X   X   X

Trust Preferred Securities

  X   X   X   X   X   X   X   X   X   X

Real Estate Investment Trusts (“REITs”)

  X   X   X   X   X   X   X   X   X   X

Recent Market Events

  X   X   X   X   X   X   X   X   X   X

Repurchase Agreements and Purchase and Sale Contracts

  X   X   X   X   X   X   X   X   X   X

Restricted Securities

  X   X   X   X   X   X   X   X   X   X

Reverse Repurchase Agreements

  X   X   X   X   X   X   X   X   X   X

Rights Offerings and Warrants to Purchase

  X   X   X   X   X   X   X   X   X   X

Securities Lending

  X   X   X   X   X   X   X   X   X   X

Short Sales

  X   X   X   X   X   X   X   X   X   X

Special Purpose Acquisition Companies

  X   X   X   X   X   X   X   X   X   X

Standby Commitment Agreements

  X   X   X   X   X   X   X   X   X   X

Stripped Securities

  X   X   X   X   X   X   X   X   X   X

Structured Notes

  X   X   X   X   X   X   X   X   X   X

Taxability Risk

  X   X   X   X   X   X   X   X   X   X

Temporary Defensive Measures

  X   X   X   X   X   X   X   X   X   X

U.S. Government Obligations

  X   X   X   X   X   X   X   X   X   X

U.S. Treasury Obligations

  X   X   X   X   X   X   X   X   X   X

 

I-10


    

BlackRock
LifePath®

Dynamic

Retirement
Fund

 

BlackRock
LifePath®

Dynamic

2025
Fund

 

BlackRock
LifePath®

Dynamic

2030
Fund

 

BlackRock
LifePath®

Dynamic

2035
Fund

 

BlackRock
LifePath®

Dynamic

2040
Fund

 

BlackRock
LifePath®

Dynamic

2045
Fund

 

BlackRock
LifePath®

Dynamic

2050
Fund

 

BlackRock
LifePath®

Dynamic

2055
Fund

 

BlackRock
LifePath®

Dynamic

2060
Fund

 

BlackRock
LifePath®

Dynamic

2065
Fund

U.S. Treasury Rolls

  X   X   X   X   X   X   X   X   X   X

Utility Industries

  X   X   X   X   X   X   X   X   X   X

When-Issued Securities, Delayed Delivery Securities and Forward Commitments

  X   X   X   X   X   X   X   X   X   X

Yields and Ratings

  X   X   X   X   X   X   X   X   X   X

Zero Coupon Securities

  X   X   X   X   X   X   X   X   X   X

 

Regulation Regarding Derivatives

 

The Commodity Futures Trading Commission (“CFTC”) subjects advisers to registered investment companies to regulation by the CFTC if a fund that is advised by the investment adviser either (i) invests, directly or indirectly, more than a prescribed level of its liquidation value in CFTC-regulated futures, options and swaps (“CFTC Derivatives”), or (ii) markets itself as providing investment exposure to such instruments. The CFTC also subjects advisers to registered investment companies to regulation by the CFTC if the registered investment company invests in one or more commodity pools. To the extent a Fund uses CFTC Derivatives, it intends to do so below such prescribed levels and will not market itself as a “commodity pool” or a vehicle for trading such instruments.

 

The Funds may have investments in “underlying funds” (and such underlying funds themselves may invest in underlying funds) not advised by BFA (which for purposes of the no-action letter referenced below may include certain securitized vehicles, mortgage real estate investment trusts and/or investment companies that may invest in CFTC Derivatives), and therefore may be viewed by the CFTC as a commodity pool. BFA has no transparency into the holdings of these underlying funds because they are not advised by BFA. To address this issue of lack of transparency, the CFTC staff issued a no-action letter on November 29, 2012 permitting the adviser of a fund that invests in such underlying funds and that would otherwise have filed a claim of exclusion pursuant to Rule 4.5 to delay registration as a “commodity pool operator” until six months from the date on which the CFTC issues additional guidance on the treatment of CFTC Derivatives held by underlying funds. BFA, the adviser of the Funds, has filed a claim with the CFTC for the Funds to rely on this no-action relief. Accordingly, BFA is not subject to registration or regulation as a “commodity pool operator” under the Commodity Exchange Act in respect of the Funds.

 

II.   Investment Restrictions

 

The Trust, on behalf of the Funds, has adopted restrictions and policies relating to investment of the Funds’ assets and their activities. Certain of the restrictions are fundamental policies of a Fund and may not be changed without the approval of the holders of a majority of the Fund’s outstanding voting securities (which for this purpose and under the Investment Company Act, means the lesser of (i) 67% of the shares represented at a meeting at which more than 50% of the outstanding shares are represented or (ii) more than 50% of the outstanding shares). The Trust, on behalf of the Funds, has also adopted certain non-fundamental investment restrictions, which may be changed by the Board without shareholder approval. None of the following fundamental or non-fundamental investment restrictions shall prevent a Fund from investing all of its assets in shares of another registered investment company with the same investment objective and fundamental policies (in a master/feeder structure).

 

I-11


The Funds are subject to the following investment restrictions, all of which are fundamental policies. Each Fund may not:

 

(1) Purchase the securities of issuers conducting their principal business activity in the same industry if, immediately after the purchase and as a result thereof, the value of a Fund’s investments in that industry would equal or exceed 25% of the current value of the Fund’s total assets, provided that this restriction does not limit a Fund’s: (i) investments in securities of other investment companies, (ii) investments in securities issued or guaranteed by the U.S. government, its agencies or instrumentalities, or (iii) investments in repurchase agreements collateralized by U.S. government securities;

 

(2) Purchase the securities of any single issuer if, as a result, with respect to 75% of a Fund’s total assets, more than 5% of the value of its total assets would be invested in the securities of such issuer or the Fund’s ownership would be more than 10% of the outstanding voting securities of such issuer, provided that this restriction does not limit a Fund’s cash or cash items, investments in securities issued or guaranteed by the U.S. government, its agencies and instrumentalities, or investments in securities of other investment companies;

 

(3) Borrow money or issue senior securities, except to the extent permitted under the Investment Company Act, including the rules, regulations and any orders obtained thereunder;

 

(4) Make loans to other parties, except to the extent permitted under the Investment Company Act, including the rules, regulations and any orders obtained thereunder. For the purposes of this limitation, entering into repurchase agreements, lending securities and acquiring any debt securities are not deemed to be the making of loans;

 

(5) Underwrite securities of other issuers, except to the extent that the purchase of permitted investments directly from the issuer thereof or from an underwriter for an issuer and the later disposition of such securities in accordance with a Fund’s investment program may be deemed to be an underwriting; and provided further, that the purchase by the Fund of securities issued by an open-end management investment company, or a series thereof, with substantially the same investment objective, policies and restrictions as the Fund shall not constitute an underwriting for purposes of this paragraph;

 

(6) Purchase or sell real estate unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the Fund from investing in securities or other instruments backed by real estate or securities of companies engaged in the real estate business); and

 

(7) Purchase or sell commodities, provided that (i) currency will not be deemed to be a commodity for purposes of this restriction, (ii) this restriction does not limit the purchase or sale of futures contracts, forward contracts or options, and (iii) this restriction does not limit the purchase or sale of securities or other instruments backed by commodities or the purchase or sale of commodities acquired as a result of ownership of securities or other instruments.

 

Notations Regarding the Funds’ Fundamental Investment Restrictions

 

The following notations are not considered to be part of the Funds’ fundamental investment restrictions and are subject to change without shareholder approval.

 

With respect to paragraph (3) above, the Investment Company Act currently allows a Fund to borrow up to one-third of the value of its total assets (including the amount borrowed) valued at the lesser of cost or market, less liabilities (not including the amount borrowed) at the time the borrowing is made. In addition, each Fund has received an exemptive order from the SEC permitting it to borrow through the Interfund Lending Program (discussed below), subject to the conditions of the exemptive order. With respect to paragraph (4) above, the Investment Company Act and regulatory interpretations currently limit the percentage of a Fund’s securities that may be loaned to one-third of the value of its total assets.

 

While certain swaps are now considered commodity interests for purposes of the Commodity Exchange Act and the rules thereunder, at the time of each Fund’s adoption of fundamental investment restriction no. 7

 

I-12


above, many swaps were treated as securities for purposes of the Fund’s compliance with applicable law. Accordingly, fundamental investment restriction no. 7 above is being interpreted to permit each Fund to engage in transactions in swaps and options on swaps related to financial instruments, such as securities, securities indices and currencies, but not to engage in transactions in swaps or options on swaps related to physical commodities, such as oil or metals.

 

Under its non-fundamental investment restrictions, which may be changed by the Board without shareholder approval, each Fund may not:

 

(1) Purchase securities of other investment companies, except to the extent permitted by the Investment Company Act. As a matter of policy, however, each Fund will not purchase shares of any registered open-end investment company or registered unit investment trust, in reliance on Section 12(d)(1 )(F) or (G) (the “fund of funds” provisions) of the Investment Company Act, at any time a Fund has knowledge that its shares are purchased by another investment company investor in reliance on the provisions of subparagraph (G) of Section 12(d)(1).

 

(2) Make short sales of securities or maintain a short position, except to the extent permitted by each Fund’s Prospectus and Statement of Additional Information, as amended from time to time, and applicable law.

 

Notwithstanding any other investment policy or restriction (whether or not fundamental), the Underlying Funds in which the Funds may invest have adopted certain investment restrictions that may be different from those listed above, thereby permitting the Funds to engage indirectly in investment strategies that are prohibited under the restrictions listed above. The investment restrictions of each Underlying Fund are set forth in its respective statement of additional information.

 

III.   Information on Trustees and Officers

 

The Board consists of twelve individuals (each, a “Trustee”), ten of whom are not “interested persons” of the Trust as defined in the Investment Company Act (the “Independent Trustees”). The registered investment companies advised by the Manager or its affiliates (the “BlackRock-advised Funds”) are organized into the BlackRock Multi-Asset Complex, the BlackRock Fixed-Income Complex, and the iShares Complex (each, a “BlackRock Fund Complex”). The Trust is included in the BlackRock Fund Complex referred to as the BlackRock Multi-Asset Complex. The Trustees also oversee as board members the operations of the other open-end registered investment companies included in the BlackRock Multi-Asset Complex.

 

The Board has overall responsibility for the oversight of the Trust and each Fund. The Chair of the Board is an Independent Trustee, and the Chair of each Board committee (each, a “Committee”) is an Independent Trustee. The Board has five standing Committees: an Audit Committee, a Governance and Nominating Committee, a Compliance Committee, a Performance Oversight Committee and an Ad Hoc Topics Committee. The role of the Chair of the Board is to preside at all meetings of the Board and to act as a liaison with service providers, officers, attorneys and other Trustees generally between meetings. The Chair of each Committee performs a similar role with respect to the Committee. The Chair of the Board or the Chair of a Committee may also perform such other functions as may be delegated by the Board or the Committee from time to time. The Independent Trustees meet regularly outside the presence of Fund management, in executive session or with other service providers to each Fund. The Board has regular meetings five times a year, and may hold special meetings if required before its next regular meeting. Each Committee meets regularly to conduct the oversight functions delegated to that Committee by the Board and reports its findings to the Board. The Board and each standing Committee conduct annual assessments of their oversight function and structure. The Board has determined that the Board’s leadership structure is appropriate because it allows the Board to exercise independent judgment over management and to allocate areas of responsibility among Committees and the full Board to enhance effective oversight.

 

The Board has engaged the Manager to manage each Fund on a day-to-day basis. The Board is responsible for overseeing the Manager, other service providers, the operations of each Fund and associated risks in accordance with the provisions of the Investment Company Act, state law, other applicable laws, the Trust’s

 

I-13


charter, and each Fund’s investment objective and strategies. The Board reviews, on an ongoing basis, each Fund’s performance, operations and investment strategies and techniques. The Board also conducts reviews of the Manager and its role in running the operations of each Fund.

 

Day-to-day risk management with respect to each Fund is the responsibility of the Manager or of sub-advisers or other service providers (depending on the nature of the risk), subject to the supervision of the Manager. Each Fund is subject to a number of risks, including investment, compliance, operational and valuation risks, among others. While there are a number of risk management functions performed by the Manager and the sub-advisers or other service providers, as applicable, it is not possible to eliminate all of the risks applicable to the Funds. Risk oversight forms part of the Board’s general oversight of each Fund and is addressed as part of various Board and Committee activities. The Board, directly or through a Committee, also reviews reports from, among others, management, the independent registered public accounting firm for each Fund, sub-advisers and internal auditors for the investment adviser or its affiliates, as appropriate, regarding risks faced by each Fund and management’s or the service provider’s risk functions. The Committee system facilitates the timely and efficient consideration of matters by the Trustees, and facilitates effective oversight of compliance with legal and regulatory requirements and of each Fund’s activities and associated risks. The Board has appointed a Chief Compliance Officer, who oversees the implementation and testing of the Trust’s compliance program and reports to the Board regarding compliance matters for the Funds and their service providers. The Independent Trustees have engaged independent legal counsel to assist them in performing their oversight responsibilities.

 

Audit Committee. The members of the Audit Committee (the “Audit Committee”) are Henry R. Keizer (Chair), Neil A. Cotty, Lena G. Goldberg and Kenneth L. Urish, all of whom are Independent Trustees. The principal responsibilities of the Audit Committee are to approve, and recommend to the full Board for approval, the selection, retention, termination and compensation of each Fund’s independent registered public accounting firm (the “Independent Registered Public Accounting Firm”) and to oversee the Independent Registered Public Accounting Firm’s work. The Audit Committee’s responsibilities include, without limitation, to (1) evaluate the qualifications and independence of the Independent Registered Public Accounting Firm; (2) approve all audit engagement terms and fees for each Fund; (3) review the conduct and results of each independent audit of each Fund’s annual financial statements; (4) review any issues raised by the Independent Registered Public Accounting Firm or Fund management regarding the accounting or financial reporting policies and practices of each Fund and the internal controls of each Fund and certain service providers; (5) oversee the performance of each Fund’s Independent Registered Public Accounting Firm; (6) review and discuss with management and each Fund’s Independent Registered Public Accounting Firm the performance and findings of each Fund’s internal auditors; (7) discuss with Fund management its policies regarding risk assessment and risk management as such matters relate to each Fund’s financial reporting and controls; (8) resolve any disagreements between Fund management and the Independent Registered Public Accounting Firm regarding financial reporting; and (9) undertake such other duties and responsibilities as may from time to time be delegated by the Board to the Audit Committee. The Board has adopted a written charter for the Audit Committee. During the fiscal year ended December 31, 2022, the Audit Committee met four times.

 

Governance and Nominating Committee. The members of the Governance and Nominating Committee (the “Governance Committee”) are Cynthia A. Montgomery (Chair), Susan J. Carter, Collette Chilton and Henry R. Keizer, all of whom are Independent Trustees. The principal responsibilities of the Governance Committee are to (1) identify individuals qualified to serve as Independent Trustees of the Trust and recommend Independent Trustee nominees for election by shareholders or appointment by the Board; (2) advise the Board with respect to Board composition, procedures and committees (other than the Audit Committee); (3) oversee periodic self-assessments of the Board and committees of the Board (other than the Audit Committee); (4) review and make recommendations regarding Independent Trustee compensation; (5) monitor corporate governance matters and develop appropriate recommendations to the Board; (6) act as the administrative committee with respect to Board policies and procedures, committee policies and procedures (other than the Audit Committee) and codes of ethics as they relate to Independent Trustees; and (7) undertake such other duties and responsibilities as may from time to time be delegated by the Board to the Governance Committee.

 

I-14


The Governance Committee may consider nominations for the office of Trustee made by Fund shareholders as it deems appropriate. Fund shareholders who wish to recommend a nominee should send nominations to the Secretary of the Trust that include biographical information and set forth the qualifications of the proposed nominee. The Board has adopted a written charter for the Governance Committee. During the fiscal year ended December 31, 2022, the Governance Committee met four times.

 

Compliance Committee. The members of the Compliance Committee (the “Compliance Committee”) are Lena G. Goldberg (Chair), Cynthia A. Montgomery, Donald C. Opatrny, Kenneth L. Urish and Claire A. Walton, all of whom are Independent Trustees. The Compliance Committee’s purpose is to assist the Board in fulfilling its responsibility to oversee regulatory and fiduciary compliance matters involving the Trust, the fund-related activities of BFA and any sub-adviser and the Trust’s third-party service providers. The Compliance Committee’s responsibilities include, without limitation, to (1) oversee the compliance policies and procedures of the Trust and its service providers and recommend changes or additions to such policies and procedures; (2) review information on and, where appropriate, recommend policies concerning the Trust’s compliance with applicable law; (3) review reports from, oversee the annual performance review of, and make certain recommendations and determinations regarding the Trust’s Chief Compliance Officer (the “CCO”), including determining the amount and structure of the CCO’s compensation and recommending such amount and structure to the full Board for approval and ratification; and (4) undertake such other duties and responsibilities as may from time to time be delegated by the Board to the Compliance Committee. The Board has adopted a written charter for the Compliance Committee. During the fiscal year ended December 31, 2022, the Compliance Committee met four times.

 

Performance Oversight Committee. The members of the Performance Oversight Committee (the “Performance Oversight Committee”) are Donald C. Opatrny (Chair), Susan J. Carter, Collette Chilton, Neil A. Cotty and Claire A. Walton, all of whom are Independent Trustees. The Performance Oversight Committee’s purpose is to assist the Board in fulfilling its responsibility to oversee each Fund’s investment performance relative to its agreed-upon performance objectives and to assist the Independent Trustees in their consideration of investment advisory agreements. The Performance Oversight Committee’s responsibilities include, without limitation, to (1) review information on, and make recommendations to the full Board in respect of, each Fund’s investment objective, policies and practices; (2) review information on each Fund’s investment performance; (3) review information on appropriate benchmarks and competitive universes and unusual or exceptional investment matters; (4) review personnel and other resources devoted to management of each Fund and evaluate the nature and quality of information furnished to the Performance Oversight Committee; (5) recommend any required action regarding changes in fundamental and non-fundamental investment policies and restrictions, fund mergers or liquidations; (6) request and review information on the nature, extent and quality of services provided to the shareholders; (7) make recommendations to the Board concerning the approval or renewal of investment advisory agreements; and (8) undertake such other duties and responsibilities as may from time to time be delegated by the Board to the Performance Oversight Committee. The Board has adopted a written charter for the Performance Oversight Committee. During the fiscal year ended December 31, 2022, the Performance Oversight Committee met four times.

 

Ad Hoc Topics Committee. The members of the Ad Hoc Topics Committee (the “Ad Hoc Topics Committee”) are Mark Stalnecker (Chair) and Lena G. Goldberg, both of whom are Independent Trustees, and John M. Perlowski, who serves as an interested Trustee. The principal responsibilities of the Ad Hoc Topics Committee are to (1) act on routine matters between meetings of the Board; (2) act on such matters as may require urgent action between meetings of the Board; and (3) exercise such other authority as may from time to time be delegated to the Ad Hoc Topics Committee by the Board. The Board has adopted a written charter for the Ad Hoc Topics Committee. During the fiscal year ended December 31, 2022, the Ad Hoc Topics Committee did not meet.

 

The Governance Committee has adopted a statement of policy that describes the experience, qualifications, skills and attributes that are necessary and desirable for potential Independent Trustee candidates (the “Statement of Policy”). The Board believes that each Independent Trustee satisfied, at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement

 

I-15


of Policy. Furthermore, in determining that a particular Independent Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Independent Trustees have balanced and diverse experience, skills, attributes and qualifications, which allow the Board to operate effectively in governing the Trust and protecting the interests of shareholders. Among the attributes common to all Independent Trustees are their ability to review critically, evaluate, question and discuss information provided to them, to interact effectively with each Fund’s investment adviser, sub-advisers, other service providers, counsel and the Independent Registered Public Accounting Firm, and to exercise effective business judgment in the performance of their duties as Trustees.

 

Each Trustee’s ability to perform his or her duties effectively is evidenced by his or her educational background or professional training; business, consulting, public service or academic positions; experience from service as a board member of the Trust and the other funds in the BlackRock Fund Complexes (and any predecessor funds), other investment funds, public companies, non-profit entities or other organizations; ongoing commitment to and participation in Board and Committee meetings, as well as his or her leadership of standing and ad hoc committees throughout the years; or other relevant life experiences.

 

The table below discusses some of the experiences, qualifications and skills of each of the Trustees that support the conclusion that each Trustee should serve on the Board.

 

Trustees

 

Experience, Qualifications and Skills

Independent Trustees  
Susan J. Carter   Susan J. Carter has over 35 years of experience in investment management. She has served as President & Chief Executive Officer of Commonfund Capital, Inc. (“CCI”), a registered investment adviser focused on non-profit investors, from 1997 to 2013, Chief Executive Officer of CCI from 2013 to 2014 and Senior Advisor to CCI in 2015. Ms. Carter also served as trustee to the Pacific Pension Institute from 2014 to 2018. She currently serves as trustee to the Financial Accounting Foundation, Advisory Board Member for the Center for Private Equity and Entrepreneurship at Tuck School of Business, Advisory Board Member for Bridges Fund Management, Member of the President’s Counsel, Common Fund and Practitioner Advisory Board Member for Private Capital Research Institute (“PCRI”). These positions have provided her with insight and perspective on the markets and the economy.
Collette Chilton   Collette Chilton has over 20 years of experience in investment management. She has held the position of Chief Investment Officer of Williams College since October 2006. Prior to that she was President and Chief Investment Officer of Lucent Asset Management Corporation, where she oversaw approximately $40 billion in pension and retirement savings assets for the company. These positions have provided her with insight and perspective on the markets and the economy.
Neil A. Cotty   Neil A. Cotty has more than 30 years of experience in the financial services industry, including 19 years at Bank of America Corporation and its affiliates, where he served, at different times, as the Chief Financial Officer of various businesses including Investment Banking, Global Markets, Wealth Management and Consumer and also served ten years as the Chief Accounting Officer for Bank of America Corporation. Mr. Cotty has been determined by the Audit Committee to be an audit committee financial expert, as such term is defined in the applicable Commission 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.
Henry R. Keizer   Henry R. Keizer brings over 40 years of executive, financial, operational, strategic and global expertise gained through his 35 year career at KPMG, a global professional services organization and by his service as a director to both publicly and privately held organizations. 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 an 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. Mr. Keizer has been determined by the Audit Committee to be an audit committee financial expert, as such term is defined in the applicable Commission rules.

 

I-16


Trustees

 

Experience, Qualifications and Skills

Cynthia A. Montgomery   Cynthia A. Montgomery has served for over 20 years on the boards of registered investment companies, most recently as a member of the boards of certain BlackRock-advised Funds and predecessor funds, including the legacy Merrill Lynch Investment Managers, L.P. (“MLIM”) funds. The Board benefits from Ms. Montgomery’s more than 20 years of academic experience as a professor at Harvard Business School where she taught courses on corporate strategy and corporate governance. Ms. Montgomery also has business management and corporate governance experience through her service on the corporate boards of a variety of public companies. She has also authored numerous articles and books on these topics.
Donald C. Opatrny   Donald C. Opatrny has more than 40 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.
Mark Stalnecker   Mark Stalnecker has gained a wealth of experience in investing and asset management from his over 13 years of service as the Chief Investment Officer of the University of Delaware as well as from his various positions with First Union Corporation, including Senior Vice President and State Investment Director of First Investment Advisors. The Board benefits from his experience and perspective as the Chief Investment Officer of a university endowment and from the oversight experience he gained from service on various private and non-profit boards.
Kenneth L. Urish   Kenneth L. Urish has served for over 15 years on the boards of registered investment companies, most recently as a member of the boards of certain BlackRock-advised Funds and predecessor funds, including the legacy BlackRock funds. He has over 30 years of experience in public accounting. Mr. Urish has served as a managing member of an accounting and consulting firm. Mr. Urish has been determined by the Audit Committee to be an audit committee financial expert, as such term is defined in the applicable Commission rules.
Claire A. Walton   Claire A. Walton has over 25 years of experience in investment management. She served as the Chief Operating Officer and Chief Financial Officer of Liberty Square Asset Management, LP from 1998 to 2015, an investment manager that specialized in long/short non-U.S. equity investments, and has been an owner and General Partner of Neon Liberty Capital Management, LLC since 2003, a firm focusing on long/short equities in global emerging and frontier markets. These positions have provided her with insight and perspective on the markets and the economy.
Interested Trustees  
Robert Fairbairn   Robert Fairbairn has more than 25 years of experience with BlackRock, Inc. and over 30 years of experience in finance and asset management. In particular, Mr. Fairbairn’s positions as Vice Chairman of BlackRock, Inc., Member of BlackRock’s Global Executive and Global Operating Committees and Co-Chair of BlackRock’s Human Capital Committee 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 Global Head of BlackRock’s Retail and iShares® businesses, Head of BlackRock’s Global Client Group, Chairman of BlackRock’s international businesses and his previous oversight over BlackRock’s Strategic Partner Program and Strategic Product Management Group. Mr. Fairbairn also serves as a board member for the funds in the BlackRock Fixed-Income Complex.
John M. Perlowski   John M. Perlowski’s experience as Managing Director of BlackRock, Inc. since 2009, as the Head of BlackRock Global Accounting and Product 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. Mr. Perlowski also serves as a board member for the funds in the BlackRock Fixed-Income Complex.

 

I-17


Biographical Information

 

Certain biographical and other information relating to the Trustees of the Trust is set forth below, including their address and year of birth, principal occupations for at least the last five years, length of time served, total number of registered investment companies and investment portfolios overseen in the BlackRock-advised Funds and any currently held public company and other investment company directorships.

 

Name and
Year of Birth1,2

 

Position(s)
Held (Length
of Service)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        

Mark Stalnecker

1951

 

Chair of the Board (Since 2019)

and Trustee

(Since 2015)

  Chief Investment Officer, University of Delaware from 1999 to 2013; Trustee and Chair of the Finance and Investment Committees, Winterthur Museum and Country Estate from 2005 to 2016; Member of the Investment Committee, Delaware Public Employees’ Retirement System since 2002; Member of the Investment Committee, Christiana Care Health System from 2009 to 2017; Member of the Investment Committee, Delaware Community Foundation from 2013 to 2014; Director and Chair of the Audit Committee, SEI Private Trust Co. from 2001 to 2014.   28 RICs consisting of 166 Portfolios   None

Susan J. Carter

1956

 

Trustee

(Since 2016)

  Trustee, Financial Accounting Foundation from 2017 to 2021; Advisory Board Member, Center for Private Equity and Entrepreneurship at Tuck School of Business from 1997 to 2021; Director, Pacific Pension Institute from 2014 to 2018; Senior Advisor, CCI (investment adviser) in 2015; Chief Executive Officer, CCI from 2013 to 2014; President & Chief Executive Officer, CCI from 1997 to 2013; Advisory Board Member, Girls Who Invest from 2015 to 2018 and Board Member thereof from 2018 to 2022; Advisory Board Member, Bridges Fund Management since 2016; Practitioner Advisory Board Member, PCRI since 2017; Lecturer in the Practice of Management, Yale School of Management since 2019; Advisor to Finance Committee, Altman Foundation since 2020. Investment Committee Member, Tostan since 2021; Member of the President’s Counsel, Commonfund since 2023.   28 RICs consisting of 166 Portfolios   None

Collette Chilton

1958

 

Trustee

(Since 2015)

  Chief Investment Officer, Williams College since 2006; Chief Investment Officer, Lucent Asset Management Corporation from 1998 to 2006; Director, Boys and Girls Club of Boston since 2017; Director, B1 Capital since 2018; Director, David and Lucile Packard Foundation since 2020.   28 RICs consisting of 166 Portfolios   None

Neil A. Cotty

1954

 

Trustee

(Since 2016)

  Director, Pioneer Legal Institute since 2023; Bank of America Corporation from 1996 to 2015, serving in various senior finance leadership roles, including Chief Accounting Officer from 2009 to 2015, Chief Financial Officer of Global Banking, Markets and Wealth Management from 2008 to 2009, Chief Accounting Officer from 2004 to 2008, Chief Financial Officer of Consumer Bank from 2003 to 2004, Chief Financial Officer of Global Corporate Investment Bank from 1999 to 2002.   28 RICs consisting of 166 Portfolios   None

 

I-18


Name and
Year of Birth1,2

 

Position(s)
Held (Length
of Service)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

Lena G. Goldberg

1949

 

Trustee

(Since 2019)

  Director, Pioneer Legal Institute since 2023; Director, Charles Stark Draper Laboratory, Inc. from 2013 to 2021; Senior Lecturer, Harvard Business School from 2008 to 2021; FMR LLC/Fidelity Investments (financial services) from 1996 to 2008, serving in various senior roles including Executive Vice President — Strategic Corporate Initiatives and Executive Vice President and General Counsel; Partner, Sullivan & Worcester LLP from 1985 to 1996 and Associate thereof from 1979 to 1985.   28 RICs consisting of 166 Portfolios   None

Henry R. Keizer

1956

 

Trustee

(Since 2019)

  Director, Park Indemnity Ltd. (captive insurer) from 2010 to 2022.   28 RICs consisting of 166 Portfolios  

GrafTech International Ltd. (materials manufacturing); Sealed Air Corp. (packaging); WABCO (commercial vehicle safety systems) from 2015 to 2020; Hertz Global Holdings (car rental) from 2015 to 2021.

Cynthia A. Montgomery

1952

  Trustee
(Since 2009)
  Professor, Harvard Business School since 1989.   28 RICs consisting of 166 Portfolios  

None

Donald C. Opatrny

1952

 

Trustee

(Since 2019)

  Trustee and Chair of the Investment Committee, Community Foundation of Jackson Hole since 2014; Member of Affordable Housing Supply Board of Jackson, Wyoming since 2017; Member, Investment Funds Committee, State of Wyoming since 2017; Chair of the Board, Phoenix Art Museum since 2022 and Trustee thereof since 2018; Chair of the Investment Committee, Arizona Community Foundation since 2022 and Trustee thereof since 2020; Director, Athena Capital Advisors LLC (investment management firm) from 2013 to 2020; Trustee, Vice Chair, Member of the Executive Committee and Chair of the Investment Committee, Cornell University from 2004 to 2019; President and Trustee, the Center for the Arts, Jackson Hole from 2011 to 2018; Member of the Board and Investment Committee, University School from 2007 to 2018; Trustee, Artstor (a Mellon Foundation affiliate) from 2010 to 2015; Member of the Investment Committee, Mellon Foundation from 2009 to 2015; President, Trustee and Member of the Investment Committee, The Aldrich Contemporary Art Museum from 2007 to 2014.   28 RICs consisting of 166 Portfolios   None

 

I-19


Name and
Year of Birth1,2

 

Position(s)
Held (Length
of Service)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

Kenneth L. Urish

1951

 

Trustee

(Since 2009)

  Managing Partner, Urish Popeck & Co., LLC (certified public accountants and consultants) since 1976; Past-Chairman of the Professional Ethics Committee of the Pennsylvania Institute of Certified Public Accountants and Committee Member thereof since 2007; Member of External Advisory Board, The Pennsylvania State University Accounting Department since 2001, Emeritus since 2022; Principal, UP Strategic Wealth Investment Advisors, LLC since 2013; Trustee, The Holy Family Institute from 2001 to 2010; President and Trustee, Pittsburgh Catholic Publishing Associates from 2003 to 2008; Director, Inter-Tel from 2006 to 2007; Member, Advisory Board, ESG Competent Boards since 2020.   28 RICs consisting of 166 Portfolios   None

Claire A. Walton

1957

 

Trustee

(Since 2016)

 

Advisory Board Member, Grossman School of Business at the University of Vermont since 2023; Advisory Board Member, Scientific Financial Systems since 2022; General Partner of Neon Liberty Capital Management, LLC since 2003; Chief Operating Officer and Chief Financial Officer of Liberty Square Asset Management, LP from 1998 to 2015; Director, Boston Hedge Fund Group from 2009 to 2018; Director, Massachusetts Council on Economic Education from 2013 to 2015; Director, Woodstock Ski Runners from 2013 to 2022.

  28 RICs consisting of 166 Portfolios   None
Interested Trustees 4        

Robert Fairbairn

1965

  Trustee
(Since 2018)
  Vice Chairman of BlackRock, Inc. since 2019; Member of BlackRock’s Global Executive and Global Operating Committees; Co-Chair of BlackRock’s Human Capital Committee; Senior Managing Director of BlackRock, Inc. from 2010 to 2019; oversaw BlackRock’s Strategic Partner Program and Strategic Product Management Group from 2012 to 2019; Member of the Board of Managers of BlackRock Investments, LLC from 2011 to 2018; Global Head of BlackRock’s Retail and iShares® businesses from 2012 to 2016.   98 RICs consisting of 266 Portfolios   None

John M. Perlowski 5

1964

  Trustee
(Since 2015) President and Chief Executive Officer (Since 2010)
  Managing Director of BlackRock, Inc. since 2009; Head of BlackRock Global Accounting and Product Services since 2009; Advisory Director of Family Resource Network (charitable foundation) since 2009.   100 RICs consisting of 268 Portfolios   None

1    The address of each Trustee is c/o BlackRock, Inc., 50 Hudson Yards, New York, New York 10001.
2    Independent Trustees serve until their resignation, retirement, removal or death, or until December 31 of the year in which they turn 75. The Board may determine to extend the terms of Independent Trustees on a case-by-case basis, as appropriate.
3    In connection with the acquisition of Barclays Global Investors by BlackRock, Inc. in December 2009, certain Independent Trustees were elected to the Board. Furthermore, effective January 1, 2019, three BlackRock Fund Complexes were realigned and consolidated into two BlackRock Fund Complexes. As a result, although the chart shows the year that each Independent Trustee joined the Board, certain Independent Trustees first became members of the boards of other BlackRock-advised Funds as follows: Cynthia A. Montgomery, 1994; Kenneth L. Urish, 1999; Lena G. Goldberg, 2016; Henry R. Keizer, 2016; Donald C. Opatrny, 2015.
4    Mr. Fairbairn and Mr. Perlowski are both “interested persons,” as defined in the Investment Company Act, of the Trust based on their positions with BlackRock, Inc. and its affiliates. Mr. Fairbairn and Mr. Perlowski are also board members of the BlackRock Fixed-Income Complex.
5    Mr. Perlowski is also a trustee of the BlackRock Credit Strategies Fund and BlackRock Private Investments Fund.

 

I-20


Certain biographical and other information relating to the officers of the Trust who are not Trustees is set forth below, including their address and year of birth, principal occupations for at least the last five years and length of time served.

 

Name and
Year of Birth1,2

  

Position(s)
Held (Length
of Service)

  

Principal Occupation(s)
During Past Five Years

Officers Who Are Not Trustees   

Roland Villacorta

1971

   Vice President
(Since 2022)
   Managing Director of BlackRock, Inc. since 2022; Head of Global Cash Management and Head of Securities Lending within BlackRock’s Portfolio Management Group since 2022; Member of BlackRock’s Global Operating Committee since 2022; Head of Portfolio Management in BlackRock’s Financial Markets Advisory Group within BlackRock Solutions from 2008 to 2015; Co-Head of BlackRock Solutions’ Portfolio Analytics Group; previously Mr. Villacorta was Co-Head of Fixed Income within BlackRock’s Risk & Quantitative Analysis Group.

Jennifer McGovern

1977

   Vice President
(Since 2014)
   Managing Director of BlackRock, Inc. since 2016; Director of BlackRock, Inc. from 2011 to 2015; Head of Americas Product Development and Governance for BlackRock’s Global Product Group since 2019; Head of Product Structure and Oversight for BlackRock’s U.S. Wealth Advisory Group from 2013 to 2019.

Trent Walker

1974

   Chief Financial Officer
(Since 2021)
   Managing Director of BlackRock, Inc. since September 2019; Executive Vice President of PIMCO from 2016 to 2019; Senior Vice President of PIMCO from 2008 to 2015; Treasurer from 2013 to 2019 and Assistant Treasurer from 2007 to 2017 of PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, 2 PIMCO-sponsored interval funds and 21 PIMCO-sponsored closed-end funds.

Jay M. Fife

1970

   Treasurer
(Since 2009)
   Managing Director of BlackRock, Inc. since 2007.

Charles Park

1967

   Chief Compliance Officer
(Since 2014)
   Anti-Money Laundering Compliance Officer for certain BlackRock-advised Funds from 2014 to 2015; Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the BlackRock Multi-Asset Complex and the BlackRock Fixed-Income 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.

Lisa Belle

1968

   Anti-Money Laundering Compliance Officer
(Since 2019)
   Managing Director of BlackRock, Inc. since 2019; Global Financial Crime Head for Asset and Wealth Management of JP Morgan from 2013 to 2019; Managing Director of RBS Securities from 2012 to 2013; Head of Financial Crimes for Barclays Wealth Americas from 2010 to 2012.

Janey Ahn

1975

   Secretary
(Since 2019)
   Managing Director of BlackRock, Inc. since 2018; Director of BlackRock, Inc. from 2009 to 2017.

1    The address of each Officer is c/o BlackRock, Inc., 50 Hudson Yards, New York, New York 10001.
2    Officers of the Trust serve at the pleasure of the Board.

 

I-21


Share Ownership

 

Information relating to each Trustee’s share ownership in the Funds and in all BlackRock-advised Funds that are currently overseen by the respective Trustee (“Supervised Funds”) as of December 31, 2022 is set forth in the chart below. Amounts shown may include shares as to which a Trustee has indirect beneficial ownership, such as through participation in certain family accounts, 529 college savings plan interests, or similar arrangements where the Trustee has beneficial economic interest but not a direct ownership interest.

 

Name     

Dollar
Range of Equity
Securities in the Funds

    

Aggregate Dollar
Range of Equity
Securities in
Supervised Funds

Independent Trustees:          

Susan J. Carter

     None      Over $100,000

Collette Chilton

     None      Over $100,000

Neil A. Cotty

     None      Over $100,000

Lena G. Goldberg

     None      Over $100,000

Henry R. Keizer

     None      Over $100,000

Cynthia A. Montgomery

     None      Over $100,000

Donald C. Opatrny

     None      Over $100,000

Mark Stalnecker

     None      Over $100,000

Kenneth L. Urish

     None      Over $100,000

Claire A. Walton

     None      Over $100,000
Interested Trustees:          

Robert Fairbairn

     None      Over $100,000

John M. Perlowski

     None      Over $100,000

 

As of April 4, 2023, the Trustees and officers of the Trust as a group directly or indirectly beneficially owned an aggregate of less than 1% of any class of the outstanding shares of each Fund. As of December 31, 2022, none of the Independent Trustees of the Trust or their immediate family members owned beneficially or of record any securities of each Fund’s investment adviser, sub-advisers, principal underwriter, or any person directly or indirectly controlling, controlled by, or under common control with such entities.

 

Compensation of Trustees

 

Each Trustee who is an Independent Trustee is paid as compensation an annual retainer of $325,000 per year for his or her services as a board member of the BlackRock-advised Funds in the BlackRock Multi-Asset Complex, including the Trust, and a $20,000 board meeting fee to be paid for each in-person board meeting attended (and may receive a board meeting fee for telephonic attendance at board meetings), for up to five board meetings held in a calendar year (compensation for meetings in excess of this number to be determined on a case-by-case basis), together with out-of-pocket expenses in accordance with a board policy on travel and other business expenses relating to attendance at meetings. The Chairs of the Audit Committee, Compliance Committee, Governance Committee and Performance Committee are paid as compensation an additional annual retainer of $45,000, respectively. The Chair of the Boards is paid an additional annual retainer of $150,000.

 

The following table sets forth the compensation the Trust, on behalf of the Funds, paid to the Trustees for the fiscal year ended December 31, 2022 and the aggregate compensation paid to them by all BlackRock-advised Funds for the calendar year ended December 31, 2022.

 

I-22


Name

  Compensation
from BlackRock
LifePath®
Dynamic
Retirement
  Compensation
from BlackRock
LifePath®
Dynamic 2025
Fund
  Compensation
from BlackRock
LifePath®
Dynamic 2030
Fund
  Compensation
from BlackRock
LifePath®
Dynamic 2035
Fund
  Compensation
from BlackRock
LifePath®
Dynamic 2040
Fund
  Compensation
from BlackRock
LifePath®
Dynamic 2045
Fund
Independent Trustees:            

Susan J. Carter

  $756   $681   $775   $694   $758   $683

Collette Chilton

  $756   $681   $775   $694   $758   $683

Neil A. Cotty

  $756   $681   $775   $694   $758   $683

Lena G. Goldberg2

  $774   $689   $796   $703   $777   $691

Henry R. Keizer3

  $774   $689   $796   $703   $777   $691

Cynthia A. Montgomery4

  $774   $689   $796   $703   $777   $691

Donald C. Opatrny5

  $774   $689   $796   $703   $777   $691

Joseph P. Platt6

  $756   $681   $775   $694   $758   $683

Mark Stalnecker7

  $818   $706   $846   $725   $822   $709

Kenneth L. Urish

  $756   $681   $775   $694   $758   $683

Claire A. Walton

  $756   $681   $775   $694   $758   $683
Interested Trustees:            

Robert Fairbairn

  None   None   None   None   None   None

John M. Perlowski

  None   None   None   None   None   None

 

Name

  Compensation
from BlackRock
LifePath®
Dynamic 2050
Fund
  Compensation
from BlackRock
LifePath®
Dynamic 2055
Fund
  Compensation
from BlackRock
LifePath®
Dynamic 2060
Fund
  Compensation
from BlackRock
LifePath®
Dynamic 2065
Fund
  Estimated Annual
Benefits upon
Retirement
  Aggregate
Compensation from
the Funds1
Independent Trustees:            

Susan J. Carter

  $703   $668   $641   $635   None   $400,000

Collette Chilton

  $703   $668   $641   $635   None   $400,000

Neil A. Cotty

  $703   $668   $641   $635   None   $400,000

Lena G. Goldberg2

  $714   $673   $643   $636   None   $445,000

Henry R. Keizer3

  $714   $673   $643   $636   None   $445,000

Cynthia A. Montgomery4

  $714   $673   $643   $636   None   $445,000

Donald C. Opatrny5

  $714   $673   $643   $636   None   $445,000

Joseph P. Platt6

  $703   $668   $641   $635   None   $400,000

Mark Stalnecker7

  $739   $686   $646   $637   None   $550,000

Kenneth L. Urish

  $703   $668   $641   $635   None   $400,000

Claire A. Walton

  $703   $668   $641   $635   None   $400,000
Interested Trustees:            

Robert Fairbairn

  None   None   None   None   None   None

John M. Perlowski

  None   None   None   None   None   None

1    For the number of BlackRock-advised Funds from which each Trustee receives compensation, see “Biographical Information” beginning on page I-18.
2    Chair of the Compliance Committee.
3    Chair of the Audit Committee.
4    Chair of the Governance Committee.
5    Chair of the Performance Oversight Committee.
6    Mr. Platt retired as Trustee of the Trust effective December 31, 2022.
7    Chair of the Board and Chair of the Ad Hoc Topics Committee.

 

I-23


IV.   Management, Advisory and Other Service Arrangements

 

Investment Adviser

 

BFA provides investment advisory services to each Fund pursuant to an investment advisory contract (the “Advisory Contract”) with the Trust. BFA, in turn, has entered into sub-advisory agreements (the “Sub-Advisory Agreements”) with BlackRock International Limited (“BIL”) and BlackRock (Singapore) Limited (“BSL” and, together with BIL, the “Sub-Advisers”) with respect to each Fund with substantially identical terms, conditions and fees. Pursuant to the Advisory Contract, BFA furnishes to the Board periodic reports on the investment strategy and performance of each Fund.

 

BFA is an indirect wholly-owned subsidiary of BlackRock, Inc.

 

The Advisory Contract is subject to annual approval by (i) the Board or (ii) vote of a majority (as defined in the Investment Company Act) of the outstanding voting securities of a Fund, provided that in either event the continuance also is approved by a majority of Independent Trustees of the Trust, by a vote cast in person at a meeting called for the purpose of voting on such approval. The Advisory Contract is terminable without penalty on 60 days’ written notice by either party. The Advisory Contract will terminate automatically, as to each Fund, in the event of its assignment (as defined in the Investment Company Act).

 

BFA is entitled to receive monthly fees at the annual rate of 0.30% of the average daily net assets of each Fund.

 

Prior to March 9, 2020, each Fund invested all of its assets in a corresponding Master Portfolio of MIP that had the same investment objectives and strategies as the applicable Fund. Accordingly, prior to March 9, 2020, each Fund did not invest directly in portfolio securities and did not require investment advisory services. All portfolio management occurred at the level of the applicable Master Portfolio. MIP, on behalf of each Master Portfolio, was party to a management agreement with BFA pursuant to which BFA provided MIP with investment advisory and management services with respect to each Master Portfolio and BFA was party to sub-advisory agreements with each Sub-Adviser with respect to each Master Portfolio. Effective March 9, 2020, the Trust, on behalf of each Fund, entered into the Advisory Contract with substantially identical terms, conditions and fees pursuant to which BFA provides each Fund with investment advisory and management services. BFA, in turn, entered into the Sub-Advisory Agreements with each Sub-Adviser with respect to each Fund with substantially identical terms, conditions and fees. Pursuant to the Advisory Contract, BFA furnishes to the Board periodic reports on the investment strategy and performance of each Fund.

 

Pursuant to the Sub-Advisory Agreements, BFA pays each Sub-Adviser for providing services to BFA with respect to each Fund a monthly fee at an annual rate equal to a percentage of the management fee paid to BFA under the Advisory Contract.

 

The information shown below prior to March 9, 2020 for each Fund/Master Portfolio reflects the “master/feeder” structure in place during that time.

 

Effective March 9, 2020, BFA has contractually agreed to waive its management fees by the amount of investment advisory fees each Fund pays to BFA indirectly through its investment in money market funds managed by BFA or its affiliates, through June 30, 2024. Prior to March 9, 2020, such agreement to waive a portion of each Master Portfolio’s management fee in connection with the Master Portfolio’s investment in affiliated money market funds was voluntary.

 

I-24


Investment Advisor

 

For the fiscal years shown below, each Fund paid BFA management fees, and BFA waived management fees and/or reimbursed expenses, as follows:

 

Fund

    

Fiscal Year Ended December 31, 2022

     Fees Paid to BFA      Fees Waived by BFA
BlackRock LifePath® Dynamic Retirement Fund      $247,126      $510,501
BlackRock LifePath® Dynamic 2025 Fund      $69,856      $215,132
BlackRock LifePath® Dynamic 2030 Fund      $194,982      $689,273
BlackRock LifePath® Dynamic 2035 Fund      $53,149      $315,288
BlackRock LifePath® Dynamic 2040 Fund      $86,914      $704,800
BlackRock LifePath® Dynamic 2045 Fund      $13,188      $288,508
BlackRock LifePath® Dynamic 2050 Fund      $52,446      $383,702
BlackRock LifePath® Dynamic 2055 Fund      $15,811      $187,618
BlackRock LifePath® Dynamic 2060 Fund      $(18,141)      $50,149
BlackRock LifePath® Dynamic 2065 Fund      $(25,454)      $17,286

 

Fund

    

Fiscal Year Ended December 31, 2021

     Fees Paid to BFA      Fees Waived by BFA
BlackRock LifePath® Dynamic Retirement Fund      $429,985      $658,824
BlackRock LifePath® Dynamic 2025 Fund      $104,239      $255,191
BlackRock LifePath® Dynamic 2030 Fund      $309,814      $841,141
BlackRock LifePath® Dynamic 2035 Fund      $72,889      $346,976
BlackRock LifePath® Dynamic 2040 Fund      $159,855      $841,141
BlackRock LifePath® Dynamic 2045 Fund      $19,642      $309,443
BlackRock LifePath® Dynamic 2050 Fund      $78,662      $424,021
BlackRock LifePath® Dynamic 2055 Fund      $14,158      $188,509
BlackRock LifePath® Dynamic 2060 Fund      $(29,435)      $44,996
BlackRock LifePath® Dynamic 2065 Fund      $(35,515)      $17,185

 

For the fiscal year shown below, each Fund or Master Portfolio, as applicable, paid BFA management fees, and BFA waived management fees and/or reimbursed expenses, as follows:

 

    

Fiscal Year Ended December 31, 2020

Fund/Master Portfolio

  

Fees Paid to BFA

  

Fees Waived by BFA

BlackRock LifePath® Dynamic Retirement Fund/LifePath® Dynamic Retirement Master Portfolio1    $387,959    $832,908
BlackRock LifePath® Dynamic 2025 Fund/LifePath® Dynamic 2025 Master Portfolio1    $63,123    $216,932
BlackRock LifePath® Dynamic 2030 Fund/LifePath® Dynamic 2030 Master Portfolio1    $254,227    $838,666
BlackRock LifePath® Dynamic 2035 Fund/LifePath® Dynamic 2035 Master Portfolio1    $40,205    $241,074
BlackRock LifePath® Dynamic 2040 Fund/LifePath® Dynamic 2040 Master Portfolio1    $152,763    $772,986
BlackRock LifePath® Dynamic 2045 Fund/LifePath® Dynamic 2045 Master Portfolio1    $9,791    $182,326
BlackRock LifePath® Dynamic 2050 Fund/LifePath® Dynamic 2050 Master Portfolio1    $50,128    $330,409
BlackRock LifePath® Dynamic 2055 Fund/LifePath® Dynamic 2055 Master Portfolio1    $(3,064)    $108,602
BlackRock LifePath® Dynamic 2060 Fund/LifePath® Dynamic 2060 Master Portfolio1    $(24,150)    $21,257
BlackRock LifePath® Dynamic 2065 Fund/LifePath® Dynamic 2065 Master Portfolio1    $(23,304)    $12,028

1    Effective March 9, 2020, amounts were paid by the Fund. Prior to March 9, 2020, amounts were paid by the Master Portfolio.

 

Effective March 9, 2020, the fees and expenses of the Independent Trustees of the Trust, counsel to the Independent Trustees of the Trust and the independent registered public accounting firm that provides audit services in connection with the Funds (collectively referred to as the “Trust Independent Expenses”) are paid directly by the Funds. BAL and BFA, as applicable, have contractually undertaken to reimburse or provide an offsetting credit to each Fund for such Trust Independent Expenses. Prior to March 9, 2020, the fees and

 

I-25


expenses of the Independent Trustees of MIP, counsel to the Independent Trustees of MIP and the independent registered public accounting firm that provided audit services in connection with the Master Portfolios (collectively referred to as the “MIP Independent Expenses”) were paid directly by the Master Portfolios. Prior to March 9, 2020. BAL and BFA, as applicable, had contractually undertaken to reimburse or provide an offsetting credit to each Master Portfolio for such MIP Independent Expenses.

 

For the period shown below, BFA provided an offsetting credit for Trust Independent Expenses in the amounts shown, against management fees paid by the Funds:

 

Fund Portfolio

     For the Fiscal Year Ended
December 31, 2022
LifePath® Dynamic Retirement Fund      $29,792
LifePath® Dynamic 2025 Fund      $28,779
LifePath® Dynamic 2030 Fund      $30,033
LifePath® Dynamic 2035 Fund      $28,929
LifePath® Dynamic 2040 Fund      $29,762
LifePath® Dynamic 2045 Fund      $28,767
LifePath® Dynamic 2050 Fund      $29,095
LifePath® Dynamic 2055 Fund      $28,605
LifePath® Dynamic 2060 Fund      $28,209
LifePath® Dynamic 2065 Fund      $28,107

 

For the period shown below, BFA provided an offsetting credit for Trust Independent Expenses in the amounts shown, against management fees paid by the Funds:

 

Fund Portfolio

 

For the Fiscal Year Ended
December 31, 2021

LifePath® Dynamic Retirement Fund   $26,892
LifePath® Dynamic 2025 Fund   $40,757
LifePath® Dynamic 2030 Fund   $41,481
LifePath® Dynamic 2035 Fund   $40,858
LifePath® Dynamic 2040 Fund   $41,254
LifePath® Dynamic 2045 Fund   $40,829
LifePath® Dynamic 2050 Fund   $40,774
LifePath® Dynamic 2055 Fund   $40,776
LifePath® Dynamic 2060 Fund   $40,784
LifePath® Dynamic 2065 Fund   $39,391

 

For the fiscal period shown below, BFA provided an offsetting credit for Trust Independent Expenses or MIP Independent Expenses, as applicable, in the amounts shown, against management fees paid by the Funds or the Master Portfolios in which the Funds invested:

 

Fund/Master Portfolio

 

Fiscal Year Ended
December 31, 2020

BlackRock LifePath® Dynamic Retirement Fund/LifePath® Dynamic Retirement Master Portfolio1   $19,762
BlackRock LifePath® Dynamic 2025 Fund/LifePath® Dynamic 2025 Master Portfolio1   $28,892
BlackRock LifePath® Dynamic 2030 Fund/LifePath® Dynamic 2030 Master Portfolio1   $30,047
BlackRock LifePath® Dynamic 2035 Fund/LifePath® Dynamic 2035 Master Portfolio1   $28,853
BlackRock LifePath® Dynamic 2040 Fund/LifePath® Dynamic 2040 Master Portfolio1   $29,896
BlackRock LifePath® Dynamic 2045 Fund/LifePath® Dynamic 2045 Master Portfolio1   $28,758
BlackRock LifePath® Dynamic 2050 Fund/LifePath® Dynamic 2050 Master Portfolio1   $29,013
BlackRock LifePath® Dynamic 2055 Fund/LifePath® Dynamic 2055 Master Portfolio1   $28,577
BlackRock LifePath® Dynamic 2060 Fund/LifePath® Dynamic 2060 Master Portfolio1   $28,470
BlackRock LifePath® Dynamic 2065 Fund/LifePath® Dynamic 2065 Master Portfolio1   $25,558

1    Effective March 9, 2020, amounts were paid by the Fund. Prior to March 9, 2020, amounts were paid by the Master Portfolio.

 

I-26


Underlying Funds. BFA or its affiliate serves as investment adviser to certain Underlying Funds. Each Fund, as a shareholder of the Underlying Funds, bears a pro rata share of the Underlying Funds’ management fees, which are based on aggregate net assets, as listed in the chart below. As discussed above, BFA and BAL have contractually agreed to reimburse each Fund for Acquired Fund Fees and Expenses up to a maximum amount equal to the combined management fee and administration fee of each share class of the Fund, through June 30, 2024. Please note that the list of Underlying Funds below is as of April 27, 2023, but BFA may, at its discretion, add, eliminate or replace Underlying Funds at any time without notice to shareholders.

 

Underlying Funds

   Advisory
Fee
Diversified Equity Master Portfolio    0.15%1
International Tilts Master Portfolio    0.39%2
Advantage CoreAlpha Bond Master Portfolio    0.23%3
iShares TIPS Bond ETF    0.19%4
BlackRock Tactical Opportunities Fund    0.53%5
Master Total Return Portfolio    0.05%6
BlackRock Cash Funds: Treasury    0.07%7
iShares Russell 2000 ETF    0.19%8
iShares MSCI EAFE Small-Cap ETF    0.39%9
iShares MSCI Canada ETF    0.50%10
BlackRock Advantage Emerging Markets Fund    0.54%11
iShares Developed Real Estate Index Fund    0.12%12
BlackRock Cash Funds: Institutional    0.07%13
BlackRock High Yield Bond Portfolio    0.40%14
BlackRock Diversified Fixed Income Fund    0.15%15
iShares Core U.S. Aggregate Bond ETF    0.03%16
iShares iBoxx $ Investment Grade Corporate Bond ETF    0.14%17
iShares MSCI EAFE ETF    0.32%18

1    For its services to the Diversified Equity Master Portfolio, BFA is entitled to receive a maximum annual management fee (as a percentage of average daily net assets) calculated as follows: 0.25% per annum of the first $1.0 billion of average daily net assets, 0.24% per annum of the average daily net assets exceeding $1.0 billion, up to and including $3.0 billion, 0.23% per annum of the average daily net assets exceeding $3.0 billion, up to and including $5.0 billion, 0.22% per annum of the average daily net assets exceeding $5.0 billion, up to and including $10.0 billion, 0.21% per annum of the average daily net assets in excess of $10.0 billion.
2    For its services to the International Tilts Master Portfolio, BlackRock Advisors, LLC (“BAL”) is entitled to receive a maximum annual management fee (as a percentage of average daily net assets) calculated as follows: 0.40% per annum of the first $1.0 billion of average daily net assets, plus 0.38% per annum of the average daily net assets exceeding $1.0 billion, up to and including $3.0 billion, plus 0.36% per annum of the average daily net assets exceeding $3.0 billion, up to and including $5.0 billion, plus 0.35% per annum of the average daily net assets exceeding $5.0 billion, up to and including $10.0 billion, plus 0.34% per annum of the average daily net assets in excess of $10.0 billion.
3    BAL receives as compensation for its services to the Advantage CoreAlpha Bond Master Portfolio a maximum annual management fee (as a percentage of average daily net assets) calculated as follows: 0.24% per annum of the first $1.0 billion of average daily net assets, plus 0.23% per annum of the average daily net assets exceeding $1.0 billion, up to and including $3.0 billion, plus 0.22% per annum of the average daily net assets exceeding $3.0 billion, up to and including $5.0 billion, plus 0.21% per annum of the average daily net assets exceeding $5.0 billion, up to and including $10.0 billion, plus 0.20% per annum of the average daily net assets in excess of $10.0 billion.
4    For its investment advisory services to the iShares TIPS Bond ETF, BFA is paid a management fee from the iShares TIPS Bond ETF calculated based on the aggregate average daily net assets of the following iShares funds: iShares 1-5 Year Investment Grade Corporate Bond ETF, iShares 5-10 Year Investment Grade Corporate Bond ETF, iShares 10+ Year Investment Grade Corporate Bond ETF, iShares Biotechnology ETF, iShares Cohen & Steers REIT ETF, iShares iBoxx $ Investment Grade Corporate Bond ETF, iShares MBS ETF, iShares Russell 1000 Growth ETF, iShares Russell 1000 Value ETF, iShares Russell Mid-Cap ETF, iShares Russell Mid-Cap Growth ETF, iShares Russell Mid-Cap Value ETF, iShares S&P Mid-Cap 400 Growth ETF and iShares TIPS Bond ETF. The management fee for the iShares TIPS Bond ETF equals the ratio of the iShares TIPS Bond ETF’s net assets over the aggregate net assets of the above iShares funds multiplied by the amount calculated as follows: 0.2000% per annum of the aggregate net assets less than or equal to $121 billion, plus 0.1900% per annum of the aggregate net assets over $121 billion, up to and including $181 billion, plus 0.1805% per annum of the aggregate net assets over $181 billion, up to and including $231 billion, plus 0.1715% per annum of the aggregate net assets over $231 billion, up to and including $281 billion, plus 0.1630% per annum of the aggregate net assets in excess of $281 billion.
5    For its services to the BlackRock Tactical Opportunities Fund, BAL is entitled to receive a maximum annual management fee (as a percentage of average daily net assets) calculated as follows: 0.550% per annum of the first $1.0 billion of average daily net assets, plus 0.500% per annum of the average daily net assets exceeding $1.0 billion, up to and including $2.0 billion, plus 0.475% per annum of the average daily net assets exceeding $2.0 billion, up to and including $3.0 billion, plus 0.450% per annum of the average daily net assets in excess of $3.0 billion.

 

I-27


6    For its services to the Master Total Return Portfolio, BAL is entitled to receive a maximum annual management fee (as a percentage of average daily net assets) calculated as follows: 0.16% per annum of the first $250 million of average daily net assets, plus 0.12% per annum of the average daily net assets exceeding $250 million, up to and including $500 million, plus 0.08% per annum of the average daily net assets exceeding $500 million, up to and including $750 million, plus 0.05% per annum of the average daily net assets in excess of $750 million.
7    The management fee for BlackRock Cash Funds: Treasury is 0.10%; however BFA has contractually agreed to waive a portion of its management fee through June 30, 2024. After giving effect to such contractual waiver, the management fee will be 0.07%.
8    For its investment advisory services to the iShares Russell 2000 ETF, BFA is paid a management fee from iShares Russell 2000 ETF calculated based on the aggregate average daily net assets of the following iShares funds: iShares Latin America 40 ETF, iShares MSCI Pacific ex Japan ETF, iShares Preferred and Income Securities ETF, iShares Russell 2000 ETF, iShares Russell 2000 Growth ETF, iShares Russell 2000 Value ETF and iShares Select Dividend ETF (“Combined Funds”). The management fee for the iShares Russell 2000 ETF equals the ratio of the iShares Russell 2000 ETF’s net assets over the aggregate net assets of the above iShares funds multiplied by the amount calculated as follows: 0.2000% per annum of the aggregate net assets less than or equal to $46 billion, plus 0.1900% per annum of the aggregate net assets over $46 billion, up to and including $81 billion, plus 0.1805% per annum of the aggregate net assets over $81 billion, up to and including $111 billion, plus 0.1715% per annum of the aggregate net assets over $111 billion, up to and including $141 billion, plus 0.1630% of the aggregate net assets over $141 billion, up to and including $171 billion, plus 0.1548% per annum of the aggregate net assets in excess of $171 billion.
9    For its investment advisory services to the iShares MSCI EAFE Small-Cap ETF, BFA is paid a management fee from the iShares MSCI EAFE Small-Cap ETF calculated based on the aggregate average daily net assets of the following iShares funds: iShares Europe ETF, iShares International Select Dividend ETF and iShares MSCI EAFE Small-Cap ETF. The management fee for the iShares MSCI EAFE Small-Cap ETF equals the ratio of the iShares MSCI EAFE Small-Cap ETF’s net assets over the aggregate net assets of the above iShares funds multiplied by the amount calculated as follows: 0.4000% per annum of the aggregate net assets less than or equal to $12 billion, plus 0.3800% per annum of the aggregate net assets over $12 billion, up to and including $18 billion, plus 0.3610% per annum of the aggregate net assets over $18 billion, up to and including $24 billion, plus 0.3430% per annum of the aggregate net assets over $24 billion, up to and including $30 billion, plus 0.3259% per annum of the aggregate net assets in excess of $30 billion.
10    For its investment advisory services to the iShares MSCI Canada ETF, BFA is paid a management fee from the iShares MSCI Canada ETF corresponding to the iShares MSCI Canada ETF’s allocable portion of an aggregate management fee calculated based on the aggregate average daily net assets of the following iShares funds: iShares MSCI Australia ETF, iShares MSCI Austria ETF, iShares MSCI Belgium ETF, iShares MSCI Canada ETF, iShares MSCI Eurozone ETF, iShares MSCI France ETF, iShares MSCI Germany ETF, iShares MSCI Hong Kong ETF, iShares MSCI Ireland ETF, iShares MSCI Italy ETF, iShares MSCI Japan ETF, iShares MSCI Japan Small-Cap ETF, iShares MSCI Malaysia ETF, iShares MSCI Mexico ETF, iShares MSCI Netherlands ETF, iShares MSCI New Zealand ETF, iShares MSCI Singapore ETF, iShares MSCI Spain ETF, iShares MSCI Sweden ETF, iShares MSCI Switzerland ETF and iShares MSCI United Kingdom ETF. The aggregate management fee is calculated as follows: 0.59% per annum of the aggregate net assets less than or equal to $7.0 billion, plus 0.54% per annum of the aggregate net assets over $7.0 billion, up to and including $11.0 billion, plus 0.49% per annum of the aggregate net assets over $11.0 billion, up to and including $24.0 billion, plus 0.44% per annum of the aggregate net assets over $24.0 billion, up to and including $48.0 billion, plus 0.40% per annum of the aggregate net assets over $48.0 billion, up to and including $72.0 billion, plus 0.36% per annum of the aggregate net assets over $72.0 billion, up to and including $96.0 billion, plus 0.32% per annum of the aggregate net assets in excess of $96.0 billion.
11    For its services to the BlackRock Advantage Emerging Markets Fund, BAL is entitled to receive a maximum annual management fee (as a percentage of average daily net assets) calculated as follows: 0.80% per annum of the first $1.0 billion of average daily net assets, plus 0.75% per annum of the average daily net assets exceeding $1.0 billion, up to and including $3.0 billion, plus 0.72% per annum of the average daily net assets exceeding $3.0 billion, up to and including $5.0 billion, plus 0.70% per annum of the average daily net assets exceeding $5.0 billion, up to and including $10.0 billion, plus 0.68% per annum of the average daily net assets in excess of $10.0 billion.
12    For its services to the iShares Developed Real Estate Index Fund, BAL is entitled to receive a management fee at the annual rate of 0.12% of the Fund’s average daily net assets.
13    The management fee for BlackRock Cash Funds: Institutional is 0.10%; however BFA has contractually agreed to waive a portion of its management fee through June 30, 2024. After giving effect to such contractual waiver, the management fee will be 0.07%.
14    For its services to the High Yield Bond Portfolio, BAL is entitled to receive an annual management fee (as a percentage of average daily net assets) calculated as follows: 0.500% per annum of the first $1.0 billion of average daily net assets, 0.450% per annum of the average daily net assets exceeding $1.0 billion, up to and including $2.0 billion, 0.425% per annum of the average daily net assets exceeding $2.0 billion, up to and including $3.0 billion, 0.400% per annum of the average daily net assets exceeding $3.0 billion, up to and including $25.0 billion, 0.375% per annum of the average daily net assets exceeding $25.0 billion, up to and including $30.0 billion, 0.350% per annum of the average daily net assets in excess of $30.0 billion.
15    For its services to the Diversified Fixed Income Fund, BFA is entitled to receive a maximum annual management fee (as a percentage of average daily net assets) calculated as follows: 0.25% per annum of the first $1.0 billion of average daily net assets, 0.24% per annum of the average daily net assets exceeding $1.0 billion, up to and including $3.0 billion, 0.23% per annum of the average daily net assets exceeding $3.0 billion, up to and including $5.0 billion, 0.22% per annum of the average daily net assets exceeding $5.0 billion, up to and including $10.0 billion, 0.21% per annum of the average daily net assets in excess of $10.0 billion.
16    For its investment advisory services to the iShares Core U.S. Aggregate Bond ETF, BFA is paid a management fee from the iShares Core U.S. Aggregate Bond ETF based on a percentage of the iShares Core U.S. Aggregate Bond ETF’s average daily net assets, at the annual rate of 0.03%. BFA has contractually agreed to waive 0.10% of its management fees payable by the Fund through June 30, 2024. After giving effect to such contractual waiver, the management fee will be 0.10%.
17   

For its investment advisory services to the iShares iBoxx $ Investment Grade Corporate Bond ETF, BFA is paid a management fee from the iShares iBoxx $ Investment Grade Corporate Bond ETF calculated based on the aggregate average daily net assets of the following iShares funds: iShares 1-5 Year Investment Grade Corporate Bond ETF, iShares 5-10 Year Investment Grade Corporate Bond ETF, iShares 10+ Year Investment Grade Corporate Bond ETF, iShares Biotechnology ETF, iShares Cohen & Steers REIT ETF, iShares iBoxx $ Investment Grade Corporate Bond ETF, iShares MBS ETF, iShares Russell 1000 Growth ETF, iShares Russell 1000 Value ETF, iShares Russell Mid-Cap ETF, iShares Russell Mid-Cap Growth ETF, iShares Russell Mid-Cap Value ETF, iShares S&P Mid-Cap 400 Growth ETF and iShares TIPS Bond ETF. The management fee for the iShares iBoxx $ Investment Grade Corporate Bond ETF equals the ratio of the iShares iBoxx $ Investment Grade Corporate Bond ETF’s net assets over the aggregate net assets of the above iShares funds multiplied by the amount calculated as follows: 0.1500% per annum of the aggregate net assets less than or equal to $121 billion, plus 0.1425% per annum of the aggregate

 

I-28


 

net assets over $121 billion, up to and including $181 billion, plus 0.1354% per annum of the aggregate net assets over $181 billion, up to and including $231 billion, plus 0.1287% per annum of the aggregate net assets over $231 billion, up to and including $281 billion, plus 0.1222% per annum of the aggregate net assets in excess of $281 billion.

18    For its investment advisory services to the iShares MSCI EAFE ETF, BFA is paid a management fee from the iShares MSCI EAFE ETF corresponding to the iShares MSCI EAFE ETF’s allocable portion of an aggregate management fee calculated based on the aggregate average daily net assets of the following iShares funds: iShares MSCI ACWI ETF, iShares MSCI ACWI ex U.S. ETF, iShares MSCI EAFE ETF, iShares MSCI EAFE Min Vol Factor ETF and iShares MSCI Global Min Vol Factor ETF. The aggregate management fee is calculated as follows: 0.3500% per annum of the aggregate net assets less than or equal to $30.0 billion, plus 0.3200% per annum of the aggregate net assets over $30.0 billion, up to and including $60.0 billion, plus 0.2800% per annum of the aggregate net assets over $60.0 billion, up to and including $90.0 billion, plus 0.2520% per annum of the aggregate net assets over $90.0 billion, up to and including $120.0 billion, plus 0.2270% per annum of the aggregate net assets over $120.0 billion, up to and including $150.0 billion, plus 0.2040% per annum of the aggregate net assets in excess of $150.0 billion.

 

Administration Arrangements

 

The Trust has engaged BAL to provide certain administration services to the Funds. BAL and its affiliates provide the Funds with administration services, including management reporting and treasury administration services, financial reporting, legal and tax services, and supervision of the Funds’ administrative operations, preparation of proxy statements and shareholder reports. BAL and its affiliates also furnish office space and certain facilities to conduct the Funds’ business and compensate the Trust’s Trustees, officers and employees who are affiliated with BAL. Effective April 29, 2022, BAL is entitled to receive an annual administration fee of 0.29% of the average daily net assets of Investor A, Investor C and Institutional Shares, 0.24% of the average daily net assets of Class R Shares and 0.04% of the average daily net assets of Class K Shares of each Fund for providing administrative services. Prior to April 29, 2022, BAL received an annual administration fee of 0.30% of the average daily net assets of Investor A, Investor C and Institutional Shares, 0.25% of the average daily net assets of Class R Shares and 0.05% of the average daily net assets of Class K Shares of each Fund for providing administrative services. Prior to March 9, 2020, BAL received for its administrative services to each Fund an annual administration fee of 0.35% of the average daily net assets of Investor A and Institutional Shares, 0.40% of the average daily net assets of Investor C Shares, 0.30% of the average daily net assets of Class R Shares and 0.15% of the average daily net assets of Class K Shares of each Fund.

 

BFA and BAL have contractually agreed to reimburse each Fund for Acquired Fund Fees and Expenses up to a maximum amount equal to the combined management fee and administration fee of each share class of the Fund, through June 30, 2024.

 

BAL also may engage and supervise Shareholder Servicing Agents, as defined in “Shareholder Servicing Agents” below, on behalf of Investor A, Investor C, Institutional and Class R Shares of the Funds.

 

BAL has also agreed to bear all costs of the Funds’ operations, including shareholder servicing fees described below, other than brokerage expenses, management fees, distribution plan expenses, certain fees and expenses related to the Trust’s Independent Trustees and their counsel, auditing fees, litigation expenses, taxes or other extraordinary expenses.

 

For the fiscal years shown below, the Funds paid the following administration fees to BAL, net of waivers and/or offsetting credits:

 

     Fiscal Year Ended December 31,

Fund

   2022    2021    2020
BlackRock LifePath® Dynamic Retirement Fund    $534,121    $728,994    $879,128
BlackRock LifePath® Dynamic 2025 Fund    $100,687    $120,971    $123,730
BlackRock LifePath® Dynamic 2030 Fund    $586,009    $746,193    $782,649
BlackRock LifePath® Dynamic 2035 Fund    $127,638    $139,572    $131,801
BlackRock LifePath® Dynamic 2040 Fund    $533,134    $665,306    $671,272
BlackRock LifePath® Dynamic 2045 Fund    $90,373    $91,932    $80,694
BlackRock LifePath® Dynamic 2050 Fund    $252,962    $294,098    $264,046
BlackRock LifePath® Dynamic 2055 Fund    $65,052    $59,448    $50,318
BlackRock LifePath® Dynamic 2060 Fund    $(11,329)    $(25,626)    $(16,097)
BlackRock LifePath® Dynamic 2065 Fund    $(19,822)    $(30,996)    $(11,995)

 

I-29


The fees and expenses of the Independent Trustees of the Trust, counsel to the Independent Trustees of the Trust, and the Independent Registered Public Accounting Firm that provides audit services in connection with the Funds (collectively referred to as the “Independent Expenses”) are paid directly by the Funds. Each of BAL and BFA, as applicable, has contractually undertaken, through June 30, 2033, to reimburse or provide an offsetting credit to the Funds for such Independent Expenses. This contractual arrangement may not be terminated prior to July 1, 2033 without the consent of the Board.

 

In addition, pursuant to a Shareholders’ Administrative Services Agreement, BAL provides certain shareholder liaison services in connection with the Trust’s investor service center. The Trust, on behalf of the Funds, reimburses BAL for its costs in maintaining the service center, which costs include, among other things, employee salaries, leasehold expenses, and other out-of-pocket expenses.

 

For the past three fiscal years, the Funds did not reimburse BAL fees for services it provided under this agreement.

 

Information Regarding the Portfolio Managers

 

Philip Green and Chris Chung, CFA, the portfolio managers, are jointly and primarily responsible for the day-to-day management of each Fund’s portfolio.

 

Other Funds and Accounts Managed

 

The following table sets forth information about funds and accounts other than the Funds, for which the portfolio managers are primarily responsible for the day-to-day portfolio management as of December 31, 2022.

 

BlackRock LifePath® Dynamic Retirement Fund

 

     Number of Other Accounts Managed and
Assets by Account Type
   Number of Other Accounts and Assets for
Which Advisory Fee is Performance-Based

Name of Portfolio Manager

   Other
Registered
Investment
Companies
   Other Pooled
Investment
Vehicles
   Name of
Portfolio
Manager
   Other
Registered
Investment
Companies
   Other Pooled
Investment
Vehicles
   Name of
Portfolio
Manager
Philip Green    26    42    11    0    2    4
   $15.47 Billion    $10.51 Billion    $7.77 Billion    $0    $382.1 Million    $2.36 Billion
Chris Chung, CFA    30    8    0    0    0    0
   $56.34 Billion    $721.0 Million    $0    $0    $0    $0

 

BlackRock LifePath® Dynamic 2025 Fund

 

     Number of Other Accounts Managed and
Assets by Account Type
   Number of Other Accounts and Assets for
Which Advisory Fee is Performance-Based

Name of Portfolio Manager

   Other
Registered
Investment
Companies
   Other Pooled
Investment
Vehicles
   Name of
Portfolio
Manager
   Other
Registered
Investment
Companies
   Other Pooled
Investment
Vehicles
   Name of
Portfolio
Manager
Philip Green    26    42    11    0    2    4
   $15.59 Billion    $10.51 Billion    $7.77 Billion    $0    $382.1 Million    $2.36 Billion
Chris Chung, CFA    30    8    0    0    0    0
   $56.47 Billion    $721.0 Million    $0    $0    $0    $0

 

BlackRock LifePath® Dynamic 2030 Fund

 

     Number of Other Accounts Managed and
Assets by Account Type
   Number of Other Accounts and Assets for
Which Advisory Fee is Performance-Based

Name of Portfolio Manager

   Other
Registered
Investment
Companies
   Other Pooled
Investment
Vehicles
   Name of
Portfolio
Manager
   Other
Registered
Investment
Companies
   Other Pooled
Investment
Vehicles
   Name of
Portfolio
Manager
Philip Green    26    42    11    0    2    4
   $15.42 Billion    $10.51 Billion    $7.77 Billion    $0    $382.1 Million    $2.36 Billion
Chris Chung, CFA    30    8    0    0    0    0
   $56.29 Billion    $721.0 Million    $0    $0    $0    $0

 

I-30


BlackRock LifePath® Dynamic 2035 Fund

 

     Number of Other Accounts Managed and
Assets by Account Type
   Number of Other Accounts and Assets for
Which Advisory Fee is Performance-Based

Name of Portfolio Manager

   Other
Registered
Investment
Companies
   Other Pooled
Investment
Vehicles
   Name of
Portfolio
Manager
   Other
Registered
Investment
Companies
   Other Pooled
Investment
Vehicles
   Name of
Portfolio
Manager
Philip Green    26    42    11    0    2    4
   $15.56 Billion    $10.51 Billion    $7.77 Billion    $0    $382.1 Million    $2.36 Billion
Chris Chung, CFA    30    8    0    0    0    0
   $56.43 Billion    $721.0 Million    $0    $0    $0    $0

 

BlackRock LifePath® Dynamic 2040 Fund

 

     Number of Other Accounts Managed and
Assets by Account Type
   Number of Other Accounts and Assets for
Which Advisory Fee is Performance-Based

Name of Portfolio Manager

   Other
Registered
Investment
Companies
   Other Pooled
Investment
Vehicles
   Name of
Portfolio
Manager
   Other
Registered
Investment
Companies
   Other Pooled
Investment
Vehicles
   Name of
Portfolio
Manager
Philip Green    26    42    11    0    2    4
   $15.44 Billion    $10.51 Billion    $7.77 Billion    $0    $382.1 Million    $2.36 Billion
Chris Chung, CFA    30    8    0    0    0    0
   $56.31 Billion    $721.0 Million    $0    $0    $0    $0

 

BlackRock LifePath® Dynamic 2045 Fund

 

     Number of Other Accounts Managed and
Assets by Account Type
   Number of Other Accounts and Assets for
Which Advisory Fee is Performance-Based

Name of Portfolio Manager

   Other
Registered
Investment
Companies
   Other Pooled
Investment
Vehicles
   Name of
Portfolio
Manager
   Other
Registered
Investment
Companies
   Other Pooled
Investment
Vehicles
   Name of
Portfolio
Manager
Philip Green    26    42    11    0    2    4
   $15.58 Billion    $10.51 Billion    $7.77 Billion    $0    $382.1 Million    $2.36 Billion
Chris Chung, CFA    30    8    0    0    0    0
   $56.45 Billion    $721.0 Million    $0    $0    $0    $0

 

BlackRock LifePath® Dynamic 2050 Fund

 

     Number of Other Accounts Managed and
Assets by Account Type
   Number of Other Accounts and Assets for
Which Advisory Fee is Performance-Based

Name of Portfolio Manager

   Other
Registered
Investment
Companies
   Other Pooled
Investment
Vehicles
   Name of
Portfolio
Manager
   Other
Registered
Investment
Companies
   Other Pooled
Investment
Vehicles
   Name of
Portfolio
Manager
Philip Green    26    42    11    0    2    4
   $15.54 Billion    $10.51 Billion    $7.77 Billion    $0    $382.1 Million    $2.36 Billion
Chris Chung, CFA    30    8    0    0    0    0
   $56.41 Billion    $721.0 Million    $0    $0    $0    $0

 

BlackRock LifePath® Dynamic 2055 Fund

 

     Number of Other Accounts Managed and
Assets by Account Type
   Number of Other Accounts and Assets for
Which Advisory Fee is Performance-Based

Name of Portfolio Manager

   Other
Registered
Investment
Companies
   Other Pooled
Investment
Vehicles
   Name of
Portfolio
Manager
   Other
Registered
Investment
Companies
   Other Pooled
Investment
Vehicles
   Name of
Portfolio
Manager
Philip Green    26    42    11    0    2    4
   $15.61 Billion    $10.51 Billion    $7.77 Billion    $0    $382.1 Million    $2.36 Billion
Chris Chung, CFA    30    8    0    0    0    0
   $56.48 Billion    $721.0 Million    $0    $0    $0    $0

 

I-31


BlackRock LifePath® Dynamic 2060 Fund

 

     Number of Other Accounts Managed and
Assets by Account Type
   Number of Other Accounts and Assets for
Which Advisory Fee is Performance-Based

Name of Portfolio Manager

   Other
Registered
Investment
Companies
   Other Pooled
Investment
Vehicles
   Name of
Portfolio
Manager
   Other
Registered
Investment
Companies
   Other Pooled
Investment
Vehicles
   Name of
Portfolio
Manager
Philip Green    26    42    11    0    2    4
   $15.67 Billion    $10.51 Billion    $7.77 Billion    $0    $382.1 Million    $2.36 Billion
Chris Chung, CFA    30    8    0    0    0    0
   $56.53 Billion    $721.0 Million    $0    $0    $0    $0

 

BlackRock LifePath® Dynamic 2065 Fund

 

     Number of Other Accounts Managed and
Assets by Account Type
   Number of Other Accounts and Assets for
Which Advisory Fee is Performance-Based

Name of Portfolio Manager

   Other
Registered
Investment
Companies
   Other Pooled
Investment
Vehicles
   Name of
Portfolio
Manager
   Other
Registered
Investment
Companies
   Other Pooled
Investment
Vehicles
   Name of
Portfolio
Manager
Philip Green    26    42    11    0    2    4
   $15.67 Billion    $10.51 Billion    $7.77 Billion    $0    $382.1 Million    $2.36 Billion
Chris Chung, CFA    30    8    0    0    0    0
   $56.54 Billion    $721.0 Million    $0    $0    $0    $0

 

Portfolio Manager Compensation Overview

 

The discussion below describes the portfolio managers’ compensation as of December 31, 2022.

 

BlackRock’s financial arrangements with its portfolio managers, its competitive compensation and its career path emphasis at all levels reflect the value senior management places on key resources. Compensation may include a variety of components and may vary from year to year based on a number of factors. The principal components of compensation include a base salary, a performance-based discretionary bonus, participation in various benefits programs and one or more of the incentive compensation programs established by BlackRock.

 

Base Compensation. Generally, portfolio managers receive base compensation based on their position with the firm.

 

Discretionary incentive compensation is a function of several components: the performance of BlackRock, Inc., the performance of the portfolio manager’s group within BlackRock, the investment performance, including risk-adjusted returns, of the firm’s assets under management or supervision by that portfolio manager relative to predetermined benchmarks, and the individual’s performance and contribution to the overall performance of these portfolios and BlackRock. Among other things, BlackRock’s Chief Investment Officers make a subjective determination with respect to each portfolio manager’s compensation based on the performance of the Funds and other accounts managed by each portfolio manager relative to the various benchmarks. Performance is generally assessed over trailing 1-,3-, and 5-year periods relative to applicable benchmarks. The relative benchmarks for these portfolio managers are:

 

Portfolio Manager

  

Applicable Benchmarks

Philip Green    A combination of market based indices (Russell 1000, MSCI All Country World Index, ICE BofA 3-Month US T Bill), certain custom indices and certain fund industry peer groups.
Chris Chung, CFA    A combination of market-based indices (Russell 1000, MSCI All-Country World, Bloomberg U.S. Aggregate Bond Index), certain customized indices and certain fund industry peer groups.

 

Distribution of Discretionary Incentive Compensation. Discretionary incentive compensation is distributed to portfolio managers in a combination of cash, deferred BlackRock, Inc. stock awards, and/or deferred cash awards that notionally track the return of certain BlackRock investment products.

 

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Portfolio managers receive their annual discretionary incentive compensation in the form of cash. Portfolio managers whose total compensation is above a specified threshold also receive deferred BlackRock, Inc. stock awards annually as part of their discretionary incentive compensation. Paying a portion of discretionary incentive compensation in the form of deferred BlackRock, Inc. stock puts compensation earned by a portfolio manager for a given year “at risk” based on BlackRock’s ability to sustain and improve its performance over future periods. In some cases, additional deferred BlackRock, Inc. stock may be granted to certain key employees as part of a long-term incentive award to aid in retention, align interests with long-term shareholders and motivate performance. Deferred BlackRock, Inc. stock awards are generally granted in the form of BlackRock, Inc. restricted stock units that vest pursuant to the terms of the applicable plan and, once vested, settle in BlackRock, Inc. common stock. The portfolio managers of these Funds have deferred BlackRock, Inc. stock awards.

 

For certain portfolio managers, a portion of the discretionary incentive compensation is also distributed in the form of deferred cash awards that notionally track the returns of select BlackRock investment products they manage, which provides direct alignment of portfolio manager discretionary incentive compensation with investment product results. Deferred cash awards vest ratably over a number of years and, once vested, settle in the form of cash. Only portfolio managers who manage specified products and whose total compensation is above a specified threshold are eligible to participate in the deferred cash award program.

 

Other Compensation Benefits. In addition to base salary and discretionary incentive compensation, portfolio managers may be eligible to receive or participate in one or more of the following:

 

Incentive Savings Plans — BlackRock, Inc. has created a variety of incentive savings plans in which BlackRock employees are eligible to participate, including a 401(k) plan, the BlackRock Retirement Savings Plan (“RSP”), and the BlackRock Employee Stock Purchase Plan (“ESPP”). The employer contribution components of the RSP include a company match equal to 50% of the first 8% of eligible pay contributed to the plan capped at $5,000 per year, and a company retirement contribution equal to 3-5% of eligible compensation up to the Internal Revenue Service limit ($305,000 for 2022). The RSP offers a range of investment options, including registered investment companies and collective investment funds managed by the firm. BlackRock contributions follow the investment direction set by participants for their own contributions or, absent participant investment direction, are invested into a target date fund that corresponds to, or is closest to, the year in which the participant attains age 65. The ESPP allows for investment in BlackRock common stock at a 5% discount on the fair market value of the stock on the purchase date. Annual participation in the ESPP is limited to the purchase of 1,000 shares of common stock or a dollar value of $25,000 based on its fair market value on the purchase date. All of the eligible portfolio managers are eligible to participate in these plans.

 

Portfolio Manager Beneficial Ownership

 

As of December 31, 2022, the portfolio managers beneficially owned no interests in any of the Funds for which they are primarily responsible for the day-to-day management.

 

Portfolio Manager Potential Material Conflicts of Interest

 

BlackRock has built a professional working environment, firm-wide compliance culture and compliance procedures and systems designed to protect against potential incentives that may favor one account over another. BlackRock has adopted policies and procedures that address the allocation of investment opportunities, execution of portfolio transactions, personal trading by employees and other potential conflicts of interest that are designed to ensure that all client accounts are treated equitably over time. Nevertheless, BlackRock furnishes investment management and advisory services to numerous clients in addition to the Funds, and BlackRock may, consistent with applicable law, make investment recommendations to other clients or accounts (including accounts which are hedge funds or have performance or higher fees paid to BlackRock, or in which portfolio managers have a personal interest in the receipt of such fees), which may be the same as or different from those made to the Funds. In addition, BlackRock, its affiliates and significant shareholders and any officer, director, shareholder or employee may or may not have an interest in the

 

I-33


securities whose purchase and sale BlackRock recommends to the Funds. BlackRock, or any of its affiliates or significant shareholders, or any officer, director, shareholder, employee or any member of their families may take different actions than those recommended to the Funds by BlackRock with respect to the same securities. Moreover, BlackRock may refrain from rendering any advice or services concerning securities of companies of which any of BlackRock’s (or its affiliates’ or significant shareholders’) officers, directors or employees are directors or officers, or companies as to which BlackRock or any of its affiliates or significant shareholders or the officers, directors and employees of any of them has any substantial economic interest or possesses material non-public information. Certain Fund managers also may manage accounts whose investment strategies may at times be opposed to the strategy utilized for a Fund. It should also be noted that a portfolio manager may be managing hedge fund and/or long only accounts, or may be part of a team managing hedge fund and/or long only accounts, subject to incentive fees. Such portfolio managers may therefore be entitled to receive a portion of any incentive fees earned on such accounts. Currently, the portfolio managers of these Funds are not entitled to receive a portion of incentive fees of other accounts.

 

As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client fairly. When BlackRock purchases or sells securities for more than one account, the trades must be allocated in a manner consistent with its fiduciary duties. BlackRock attempts to allocate investments in a fair and equitable manner among client accounts, with no account receiving preferential treatment. To this end, BlackRock has adopted policies that are intended to ensure reasonable efficiency in client transactions and provide BlackRock with sufficient flexibility to allocate investments in a manner that is consistent with the particular investment discipline and client base, as appropriate.

 

Shareholder Servicing Agents

 

The Board has adopted a Shareholder Servicing Plan pursuant to which the Funds have entered or may enter into Shareholder Servicing Agreements with BAL and other entities, and BAL may also enter into such Agreements with securities dealers, brokers, investment advisers, service providers or other industry professionals (including BlackRock, BlackRock Investments, LLC (“BRIL”), Barclays PLC (“Barclays”) and their affiliates) (collectively, “Shareholder Servicing Agents”) for the provision of certain services to holders of Investor A, Investor C, Institutional and Class R Shares. No such agreements are contemplated in respect of Class K Shares. The shareholder services provided by BAL or Shareholder Servicing Agents may include serving as an agent of the Funds for purposes of accepting orders for purchases and redemptions of Fund shares, providing administrative support and account service such as processing purchases and redemptions of shares on behalf of individual and omnibus Fund accounts, keeping records, transmitting reports and communications from the Funds, and providing reports on the status of individual and omnibus accounts. Shareholder Servicing Agents may provide these services, in whole or in part, by operating electronic transaction systems or websites through which shareholders may obtain information or engage in purchase or redemption transactions of Fund shares. By operating these systems or providing other services described above, the Shareholder Servicing Agents make the Funds available to their clients.

 

A Shareholder Servicing Agent may make decisions about which investment options it will service and make available to its clients based on the payments the Shareholder Servicing Agent may be eligible to receive for its services. Therefore, payments to a Shareholder Servicing Agent may create potential conflicts of interest between the Shareholder Servicing Agent and its clients where the Shareholder Servicing Agent determines which investment options it will make available to those clients.

 

Pursuant to its Administration Agreement with the Trust, as described in the section entitled “Administration Arrangements,” BAL pays shareholder servicing fees to certain Shareholder Servicing Agents in amounts not exceeding maximum fee rates approved by the Trust’s Board of Trustees for those shareholder servicing, sub-administration, recordkeeping, sub-transfer agency and processing services that the Shareholder Servicing Agents perform for their clients that would otherwise be performed by BAL or the Funds’ other service providers. For providing some or all of these services for investors in shares of each Fund, each Shareholder Servicing Agent is entitled to receive a monthly fee at an annual rate of up to 0.25% of the average daily net assets of shares of each Fund represented by shares owned during the period for which payment is being made by investors with whom the Shareholder Servicing Agent maintains a servicing relationship.

 

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A Shareholder Servicing Agent also may impose certain conditions on its customers, subject to the terms of the Funds’ Prospectuses and this SAI, that are in addition to or different from those imposed by the Trust, such as requiring a minimum initial investment or payment of a separate fee for additional services.

 

Accounting Services

 

State Street Bank and Trust Company (“State Street”), serves as the accounting services provider for the Funds. State Street maintains the books of account and other financial records (other than those maintained by the Funds’ custodian); records general ledger entries; calculates daily net income; reconciles activity to the trial balance; calculates and publishes daily net asset value; prepares account balances; and provides such other accounting services as may be required. In connection with its accounting services, State Street also provides certain administration services.

 

Prior to March 9, 2020, each Fund invested all of its assets in its corresponding Master Portfolio as part of a “master/feeder” structure, and accounting services were paid at the Master Portfolio level. Effective March 9, 2020, the accounting services agreement was terminated solely with respect to each Master Portfolio. The information shown below prior to March 9, 2020 for each Fund/Master Portfolio reflects the “master/feeder” structure in place during that time.

 

The table below shows the amounts paid by BFA, on behalf of each Master Portfolio, to State Street for accounting services for the periods shown:

 

     Fiscal Year Ended December 31,

Fund/Master Portfolio

   2022    2021    2020
BlackRock LifePath® Dynamic Retirement Fund/LifePath® Dynamic Retirement Master1 Portfolio    $16,081    $17,847    $22,865
BlackRock LifePath® Dynamic 2025 Fund/LifePath® Dynamic 2025 Master Portfolio1    $14,713    $14,645    $16,526
BlackRock LifePath® Dynamic 2030 Fund/LifePath® Dynamic 2030 Master Portfolio1    $20,435    $18,779    $24,055
BlackRock LifePath® Dynamic 2035 Fund/LifePath® Dynamic 2035 Master Portfolio1    $13,040    $14,835    $18,633
BlackRock LifePath® Dynamic 2040 Fund/LifePath® Dynamic 2040 Master Portfolio1    $21,641    $18,569    $24,116
BlackRock LifePath® Dynamic 2045 Fund/LifePath® Dynamic 2045 Master Portfolio1    $13,058    $14,427    $17,672
BlackRock LifePath® Dynamic 2050 Fund/LifePath® Dynamic 2050 Master Portfolio1    $12,203    $14,471    $16,311
BlackRock LifePath® Dynamic 2055 Fund/LifePath® Dynamic 2055 Master Portfolio1    $11,112    $13,872    $15,415
BlackRock LifePath® Dynamic 2060 Fund/LifePath® Dynamic 2060 Master Portfolio1    $10,077    $12,247    $13,341
BlackRock LifePath® Dynamic 2065 Fund/LifePath® Dynamic 2065 Master Portfolio1    $8,601    $11,029    $12,120

1    Effective March 9, 2020, amounts were paid by the Fund. Prior to March 9, 2020, amounts were paid by the Master Portfolio.

 

Custodian

 

State Street, which has its principal place of business at One Lincoln Street, Boston, Massachusetts 02111, serves as the custodian for each Fund (the “Custodian”). The Custodian, among other responsibilities, maintains a custody account or accounts in the name of each Fund, receives and delivers all assets for each Fund upon purchase and upon sale or maturity, and collects and receives all income and other payments and distributions on account of the assets of each Fund.

 

Transfer and Dividend Disbursing Agent

 

BNY Mellon Investment Servicing (US) Inc., a subsidiary of The Bank of New York Mellon Corporation, acts as each Fund’s transfer and dividend disbursing agent and is located at 301 Bellevue Parkway, Wilmington, Delaware 19809.

 

Credit Agreement

 

The Trust, on behalf of each Fund, along with certain other funds managed by the Manager and its affiliates (“Participating Funds”), is a party to a 364-day, $2.5 billion credit agreement with a group of lenders, which

 

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facility terminates on April 11, 2024, unless otherwise extended or renewed (the “Credit Agreement”). Excluding commitments designated for certain Participating Funds, the Participating Funds, including each Fund, can borrow up to an aggregate commitment amount of $1.75 billion at any time outstanding, subject to asset coverage and other limitations as specified in the Credit Agreement. Each Fund may borrow under the Credit Agreement to meet shareholder redemptions and for other lawful purposes. However, each Fund may not borrow under the Credit Agreement for leverage. Each Fund may borrow up to the maximum amount allowable under its current Prospectus and SAI, subject to various other legal, regulatory or contractual limits. Borrowing results in interest expense and other fees and expenses for a Fund which may impact the Fund’s net expenses. The costs of borrowing may reduce a Fund’s return. Each Fund is charged its pro rata share of upfront fees and commitment fees on the aggregate commitment amount based on its net assets. If a Fund borrows pursuant to the Credit Agreement, the Fund will be charged interest at a variable rate.

 

V.   Information on Distribution Related Expenses

 

Distributor

 

BlackRock Investments, LLC (“BRIL” or the “Distributor”) is the distributor for the Funds’ shares. BRIL is a registered broker-dealer located at 50 Hudson Yards, New York, New York 10001. The Trust has entered into a distribution agreement with BRIL under which BRIL, as agent, offers shares of each Fund on a continuous basis.

 

Set forth below is information on sales charges (including any contingent deferred sales charges (“CDSCs”)) received by the Funds, including the amounts paid to affiliates of BFA, for the periods indicated.

 

Investor A Sales Charge Information

 

     Fiscal Year Ended December 31, 2022

Fund

   Gross Sales
Charges
Collected
   Sales Charges
Retained by
BRIL
   Sales Charges
Paid to
Affiliates
   CDSCs Received
on Redemption of
Load-Waived Shares
BlackRock LifePath® Dynamic Retirement Fund    $887    $65    $65    $0
BlackRock LifePath® Dynamic 2025 Fund    $3,750    $234    $234    $0
BlackRock LifePath® Dynamic 2030 Fund    $9,901    $602    $602    $31
BlackRock LifePath® Dynamic 2035 Fund    $14,628    $860    $860    $0
BlackRock LifePath® Dynamic 2040 Fund    $16,203    $865    $865    $0
BlackRock LifePath® Dynamic 2045 Fund    $14,538    $974    $974    $0
BlackRock LifePath® Dynamic 2050 Fund    $15,569    $886    $886    $0
BlackRock LifePath® Dynamic 2055 Fund    $17,380    $859    $859    $0
BlackRock LifePath® Dynamic 2060 Fund    $10,389    $521    $521    $0
BlackRock LifePath® Dynamic 2065 Fund    $11,604    $566    $566    $0

 

     Fiscal Year Ended December 31, 2021

Fund

   Gross Sales
Charges
Collected
   Sales Charges
Retained by
BRIL
   Sales Charges
Paid to
Affiliates
   CDSCs Received
on Redemption of
Load-Waived Shares
BlackRock LifePath® Dynamic Retirement Fund    $12,486    $866    $866    $642
BlackRock LifePath® Dynamic 2025 Fund    $14,333    $914    $914    $0
BlackRock LifePath® Dynamic 2030 Fund    $20,004    $1,107    $1,107    $404
BlackRock LifePath® Dynamic 2035 Fund    $17,351    $1,024    $1,024    $0
BlackRock LifePath® Dynamic 2040 Fund    $25,710    $1,507    $1,507    $0
BlackRock LifePath® Dynamic 2045 Fund    $15,749    $1,072    $1,072    $0
BlackRock LifePath® Dynamic 2050 Fund    $22,749    $1,256    $1,256    $0
BlackRock LifePath® Dynamic 2055 Fund    $19,573    $1,242    $1,242    $0
BlackRock LifePath® Dynamic 2060 Fund    $6,116    $311    $311    $0
BlackRock LifePath® Dynamic 2065 Fund    $4,361    $221    $221    $0

 

I-36


     Fiscal Year Ended December 31, 2020

Fund

   Gross Sales
Charges
Collected
   Sales Charges
Retained by
BRIL
   Sales Charges
Paid to
Affiliates
   CDSCs Received
on Redemption of
Load-Waived Shares
BlackRock LifePath® Dynamic Retirement Fund    $12,267    $944    $944    $28
BlackRock LifePath® Dynamic 2025 Fund    $13,500    $1,096    $1,096    $24
BlackRock LifePath® Dynamic 2030 Fund    $16,286    $1,209    $1,209    $9
BlackRock LifePath® Dynamic 2035 Fund    $10,848    $829    $829    $0
BlackRock LifePath® Dynamic 2040 Fund    $8,924    $672    $672    $0
BlackRock LifePath® Dynamic 2045 Fund    $9,884    $1,468    $1,468    $0
BlackRock LifePath® Dynamic 2050 Fund    $5,863    $353    $353    $0
BlackRock LifePath® Dynamic 2055 Fund    $2,700    $270    $270    $0
BlackRock LifePath® Dynamic 2060 Fund    $443    $21    $21    $0
BlackRock LifePath® Dynamic 2065 Fund    $118    $6    $6    $0

 

Investor C Sales Charge Information

 

     Fiscal Year Ended December 31, 2022

Fund

   CDCs Received by BRIL    CDCs Paid to Affiliates
BlackRock LifePath® Dynamic Retirement Fund    $296    $0
BlackRock LifePath® Dynamic 2025 Fund    $9    $0
BlackRock LifePath® Dynamic 2030 Fund    $81    $0
BlackRock LifePath® Dynamic 2035 Fund    $744    $0
BlackRock LifePath® Dynamic 2040 Fund    $0    $0
BlackRock LifePath® Dynamic 2045 Fund    $3,615    $0
BlackRock LifePath® Dynamic 2050 Fund    $343    $0
BlackRock LifePath® Dynamic 2055 Fund    $0    $0
BlackRock LifePath® Dynamic 2060 Fund    $0    $0
BlackRock LifePath® Dynamic 2065 Fund    $0    $0

 

     Fiscal Year Ended December 31, 2021

Fund

   CDCs Received by BRIL    CDCs Paid to Affiliates
BlackRock LifePath® Dynamic Retirement Fund    $324    $324
BlackRock LifePath® Dynamic 2025 Fund    $0    $0
BlackRock LifePath® Dynamic 2030 Fund    $146    $146
BlackRock LifePath® Dynamic 2035 Fund    $64    $64
BlackRock LifePath® Dynamic 2040 Fund    $18    $18
BlackRock LifePath® Dynamic 2045 Fund    $27    $27
BlackRock LifePath® Dynamic 2050 Fund    $43    $43
BlackRock LifePath® Dynamic 2055 Fund    $16    $16
BlackRock LifePath® Dynamic 2060 Fund    $0    $0
BlackRock LifePath® Dynamic 2065 Fund    $0    $0

 

     Fiscal Year Ended December 31, 2020

Fund

   CDSCs Received by BRIL    CDSCs Paid to Affiliates
BlackRock LifePath® Dynamic Retirement Fund    $0    $0
BlackRock LifePath® Dynamic 2025 Fund    $262    $0
BlackRock LifePath® Dynamic 2030 Fund    $157    $0
BlackRock LifePath® Dynamic 2035 Fund    $550    $0
BlackRock LifePath® Dynamic 2040 Fund    $56    $0
BlackRock LifePath® Dynamic 2045 Fund    $4    $0
BlackRock LifePath® Dynamic 2050 Fund    $517    $0
BlackRock LifePath® Dynamic 2055 Fund    $137    $0
BlackRock LifePath® Dynamic 2060 Fund    $0    $0
BlackRock LifePath® Dynamic 2065 Fund    $0    $0

 

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The table below provides information for the fiscal year ended December 31, 2022 about the distribution and/ or service fees each Fund paid to BRIL pursuant to the Funds’ Distribution and Service Plan. A portion of the fees collected by BRIL were paid to affiliates, for providing shareholder servicing activities for Investor A Shares and for providing shareholder servicing and distribution related activities and services for Investor C and Class R Shares.

 

Fund

     Investor A Shares      Investor C Shares      Class R Shares
BlackRock LifePath® Dynamic Retirement Fund      $337,338      $17,794      $26,146
BlackRock LifePath® Dynamic 2025 Fund      $51,348      $23,658      $17,779
BlackRock LifePath® Dynamic 2030 Fund      $362,019      $24,480      $25,392
BlackRock LifePath® Dynamic 2035 Fund      $61,104      $31,827      $18,548
BlackRock LifePath® Dynamic 2040 Fund      $323,618      $22,566      $23,757
BlackRock LifePath® Dynamic 2045 Fund      $47,873      $15,199      $16,124
BlackRock LifePath® Dynamic 2050 Fund      $166,958      $17,625      $14,488
BlackRock LifePath® Dynamic 2055 Fund      $38,974      $12,532      $10,780
BlackRock LifePath® Dynamic 2060 Fund      $3,126      $890      $4,882
BlackRock LifePath® Dynamic 2065 Fund      $2,016      $4,896      $2,280

 

VI.   Computation of Offering Price Per Share

 

An illustration of the computation of the offering price of the Investor A Shares of each Fund based on the value of each Fund’s Investor A Shares’ net assets and the number of Investor A Shares outstanding on December 31, 2022, is set forth below.

 

Computation of
Offering Price Per
Share:

     BlackRock
LifePath®
Dynamic
Retirement
Fund
     BlackRock
LifePath®
Dynamic
2025 Fund
     BlackRock
LifePath®
Dynamic
2030 Fund
     BlackRock
LifePath®
Dynamic
2035 Fund
     BlackRock
LifePath®
Dynamic
2040 Fund
Net Assets      $116,172,701      $18,334,733      $133,739,604      $24,670,258      $121,680,359
Number of Shares Outstanding      15,187,944      1,540,395      12,206,558      1,883,036      9,621,172
Net Asset Value Per Share (net assets divided by number of shares outstanding)      $7.65      $11.90      $10.96      $13.10      $12.65
Sales Charge (5.25% of offering price; 5.54% of net asset value per share)1      0.42      0.66      0.61      0.73      0.70
Offering Price      $8.07      $12.56      $11.57      $13.83      $13.35

 

Computation of Offering
Price Per Share:

     BlackRock
LifePath®
Dynamic
2045 Fund
     BlackRock
LifePath®
Dynamic
2050 Fund
     BlackRock
LifePath®
Dynamic
2055 Fund
     BlackRock
LifePath®
Dynamic
2060 Fund
     BlackRock
LifePath®
Dynamic
2065 Fund
Net Assets      $17,896,362      $64,526,362      $14,873,239      $1,561,644      $867,821
Number of Shares Outstanding      1,256,434      3,558,816      999,881      141,049      86,392
Net Asset Value Per Share (net assets divided by number of shares outstanding)      $14.24      $18.13      $14.88      $11.07      $10.05
Sales Charge (5.25% of offering price; 5.54% of net asset value per share)1      0.79      1.00      0.82      0.61      0.56
Offering Price      $15.03      $19.13      $15.70      $11.68      $10.61

1   Rounded to the nearest one-hundredth percent; assumes maximum sales charge is applicable.

 

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The offering price for each Fund’s other share classes is equal to the share class’ net asset value computed as set forth above for Investor A Shares. Though not subject to a sales charge, certain share classes may be subject to a CDSC on redemption. For more information on the purchasing and valuation of shares, please see “Purchase of Shares” and “Pricing of Shares” in Part II of this SAI.

 

VII.   Portfolio Transactions and Brokerage

 

See “Portfolio Transactions and Brokerage” in Part II of this SAI for more information.

 

Brokerage Commissions

 

Each Fund purchases and sells those portfolio securities that are interests in Underlying Funds that are not iShares Funds by dealing directly with the issuer — the Underlying Funds. Each Fund purchases and sells those portfolio securities that are Underlying iShares Funds through brokers and will incur brokerage commissions on those transactions.

 

Prior to March 9, 2020, each Fund invested all of its assets in its corresponding Master Portfolio and the brokerage activity was done at the Master Portfolio level. The information shown below prior to March 9, 2020 for each Fund/Master Portfolio reflects the “master/feeder” structure in place during that time.

 

Information about the brokerage commissions paid by each Fund or Master Portfolio, as applicable, for the periods shown is set forth in the following table:

 

    

Fiscal Year Ended December 31,

Fund/Master Portfolio

 

2022

 

2021

 

2020

BlackRock LifePath® Dynamic Retirement Fund/LifePath® Dynamic Retirement Master Portfolio1  

$17,143

 

$19,723

 

$26,509

BlackRock LifePath® Dynamic 2025 Fund/LifePath® Dynamic 2025 Master Portfolio1  

$7,355

 

$7,464

 

$6,881

BlackRock LifePath® Dynamic 2030 Fund/LifePath® Dynamic 2030 Master Portfolio1  

$18,307

 

$21,812

 

$23,948

BlackRock LifePath® Dynamic 2035 Fund/LifePath® Dynamic 2035 Master Portfolio1  

$9,229

 

$8,839

 

$6,661

BlackRock LifePath® Dynamic 2040 Fund/LifePath® Dynamic 2040 Master Portfolio1  

$17,611

 

$18,367

 

$19,620

BlackRock LifePath® Dynamic 2045 Fund/LifePath® Dynamic 2045 Master Portfolio1  

$9,049

 

$6,196

 

$4,520

BlackRock LifePath® Dynamic 2050 Fund/LifePath® Dynamic 2050 Master Portfolio1  

$12,428

 

$7,730

 

$6,595

BlackRock LifePath® Dynamic 2055 Fund/LifePath® Dynamic 2055 Master Portfolio1  

$7,326

 

$4,283

 

$2,353

BlackRock LifePath® Dynamic 2060 Fund/LifePath® Dynamic 2060 Master Portfolio1  

$2,434

 

$2,278

 

$419

BlackRock LifePath® Dynamic 2065 Fund/LifePath® Dynamic 2065 Master Portfolio1  

$707

 

$637

 

$198

1    Effective March 9, 2020, amounts were paid by the Fund. Prior to March 9, 2020, amounts were paid by the Master Portfolio.

 

Regular Broker-Dealer Information:

 

During the past three fiscal years, the Funds and the Master Portfolios paid no brokerage commissions to brokers affiliated with BFA or MIP.

 

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The following table shows the dollar amount of brokerage commissions paid to brokers for providing Section 28(e) research/brokerage services under Section 28(e) of the Securities Exchange Act of 1934, as amended, and the approximate dollar amount of the transactions involved for the fiscal year ended December 31, 2022. The provision of Section 28(e) research/brokerage services was not necessarily a factor in the placement of all brokerage business with such brokers.

 

Fund/Master Portfolio

 

Amount of
Commissions Paid to
Brokers for Providing
28(e) Eligible Research
Services

 

Amount of Brokerage
Transactions Involved

BlackRock LifePath® Dynamic Retirement Fund   $152.23   $709,849.01
BlackRock LifePath® Dynamic 2025 Fund   $0   $0
BlackRock LifePath® Dynamic 2030 Fund   $95.88   $447,086.52
BlackRock LifePath® Dynamic 2035 Fund   $0   $0
BlackRock LifePath® Dynamic 2040 Fund   $0   $0
BlackRock LifePath® Dynamic 2045 Fund   $0   $0
BlackRock LifePath® Dynamic 2050 Fund   $0   $0
BlackRock LifePath® Dynamic 2055 Fund   $0   $0
BlackRock LifePath® Dynamic 2060 Fund   $0   $0
BlackRock LifePath® Dynamic 2065 Fund   $0   $0

 

Securities Lending

 

Each Fund conducts its securities lending pursuant to an exemptive order from the Commission permitting it to lend portfolio securities to borrowers affiliated with the Fund and to retain an affiliate of the Fund as lending agent. To the extent that a Fund engages in securities lending, BlackRock Institutional Trust Company, N.A. (previously defined as “BTC”), an affiliate of BFA, acts as securities lending agent for the Fund, subject to the overall supervision of BFA. BTC administers the lending program in accordance with guidelines approved by the Board.

 

The Funds retain a portion of securities lending income and remit a remaining portion to BTC as compensation for its services as securities lending agent. Securities lending income is equal to the total of income earned from the reinvestment of cash collateral (and excludes collateral investment fees as defined below), and any fees or other payments to and from borrowers of securities. As securities lending agent, BTC bears all operational costs directly related to securities lending. Each Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan in money market funds advised by BFA or its affiliates, and such fees will not be subject to any waivers. However, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees each Fund bears to an annual rate of 0.04% (the “collateral investment fees”). Such money market fund shares will not be subject to a sales load, distribution fee or service fee. If the money market fund’s weekly liquid assets fall below 30% of its total assets, the board of directors of the money market fund, including the majority of the non-interested directors of the money market fund, is permitted at any time, if it determines it to be in the best interests of the money market fund, to impose a liquidity fee of up to 2% on all redemptions or impose a redemption gate that temporarily suspends the right of redemption out of the money market fund. In addition, if the money market fund’s weekly liquid assets fall below 10% of its total assets at the end of any business day, the board of directors of the money market fund, including the majority of the non-interested directors of the money market fund, will impose a liquidity fee in the default amount of 1% on all redemptions, generally effective as of the next business day, unless the board of directors of the money market fund, including the majority of the non-interested directors of the money market fund, determines that a higher (not to exceed 2%) or lower fee level or not imposing a liquidity fee is in the best interests of the money market fund. The shares of the money market fund purchased by the Funds would be subject to any such liquidity fee or redemption gate imposed.

 

I-40


Under the securities lending program, each Fund is categorized into a specific asset class. The determination of a Fund’s asset class category (fixed-income, domestic equity, international equity, or fund of funds), each of which may be subject to a different fee arrangement, is based on a methodology agreed to between the Trust and BTC.

 

Pursuant to the current securities lending agreement: (i) the Funds retain 82% of securities lending income (which excludes collateral investment fees); and (ii) this amount can never be less than 70% of the sum of securities lending income plus collateral investment fees.

 

In addition, commencing the business day following the date that the aggregate securities lending income earned across the BlackRock Multi-Asset Complex in a calendar year exceeds a specified threshold, each Fund, pursuant to the current securities lending agreement, will receive for the remainder of that calendar year securities lending income as follows: (i) 85% of securities lending income (which excludes collateral investment fees); and (ii) this amount can never be less than 70% of the sum of securities lending income plus collateral investment fees.

 

The services provided to each Fund or Master Portfolio, as applicable, by BTC, in the most recent fiscal year ended December 31, 2022, primarily included the following:

 

  (1)

selecting borrowers from an approved list of borrowers and executing a securities lending agreement as agent on behalf of each Fund or Master Portfolio, as applicable, with each such borrower;

  (2)

negotiating the terms of securities loans, including the amount of fees;

  (3)

directing the delivery of loaned securities;

  (4)

monitoring the daily value of the loaned securities and directing the payment of additional collateral or the return of excess collateral, as necessary;

  (5)

investing cash collateral received in connection with any loaned securities;

  (6)

monitoring distributions on loaned securities (for example, interest and dividend activity);

  (7)

in the event of default by a borrower with respect to any securities loan, using the collateral or the proceeds of the liquidation of collateral to purchase replacement securities of the same issue, type, class and series as that of the loaned securities; and

  (8)

terminating securities loans and arranging for the return of loaned securities to each Fund or Master Portfolio, as applicable, at loan termination.

 

The following tables show the dollar amounts of income and fees/compensation related to the securities lending activities of each Fund or Master Portfolio, as applicable, during its most recent fiscal year ended

December 31, 2022.

 

    BlackRock
LifePath®
Dynamic
Retirement
Fund/

LifePath®
Dynamic
Retirement
Master
Portfolio
    BlackRock
LifePath®
Dynamic
2025
Fund/

LifePath®
Dynamic
2025
Master
Portfolio
    BlackRock
LifePath®
Dynamic
2030
Fund/

LifePath®
Dynamic
2030
Master
Portfolio
    BlackRock
LifePath®
Dynamic
2035
Fund/

LifePath®
Dynamic
2035
Master
Portfolio
    BlackRock
LifePath®
Dynamic
2040
Fund/

LifePath®
Dynamic
2040
Master
Portfolio
 

(1) Gross income from securities lending activities

    $230,635       $109,520       $314,342       $92,711       $252,861  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(2) Fees and/or compensation for securities lending activities and related services

         

(a) Securities lending income paid to BIM for services as securities lending agent

    $7,501       $2,960       $7,674       $2,391       $5,711  

(b) Collateral management expenses (including fees deducted from a polled cash collateral vehicle) not included in (a)

    $5,171       $2,219       $5,639       $1,772       $3,853  

(c) Administrative fees not included in (a)

    $0       $0       $0       $0       $0  

(d) Indemnification fees not included in (a)

    $0       $0       $0       $0       $0  

(e) Rebate (paid to borrowers)

    $181,053       $83,390       $261,191       $76,019       $212,932  

(f) Other fees not included in (a)

    $0       $0       $0       $0       $0  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(3) Aggregate fees/compensation for securities lending activities

    $193,725       $94,569       $274,504       $80,182       $222,496  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(4) Net income from securities lending activities

    $36,910       $14,951       $39,838       $12,529       $30,365  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

I-41


    BlackRock
LifePath®
Dynamic
2045
Fund/

LifePath®
Dynamic
2045
Master
Portfolio
    BlackRock
LifePath®
Dynamic
2050
Fund/

LifePath®
Dynamic
2050
Master
Portfolio
    BlackRock
LifePath®
Dynamic
2055
Fund/

LifePath®
Dynamic
2055
Master
Portfolio
    BlackRock
LifePath®
Dynamic
2060
Fund/

LifePath®
Dynamic
2060
Master
Portfolio
    BlackRock
LifePath®
Dynamic
2065
Fund/

LifePath®
Dynamic
2065
Master
Portfolio
 

(1) Gross income from securities lending activities

    $69,302       $80,725       $28,174       $16,450       $7,284  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(2) Fees and/or compensation for securities lending activities and related services

         

(a) Securities lending income paid to BIM for services as securities lending agent

    $1,705       $2,043       $697       $840       $308  

(b) Collateral management expenses (including fees deducted from a polled cash collateral vehicle) not included in (a)

    $1,270