APRIL 29, 2024, as amended AUGUST 16, 2024 |
• | 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 |
Not FDIC Insured • May Lose Value • No Bank Guarantee |
For More Information | Funds and Service Providers | Inside Back Cover |
Additional Information | Back Cover |
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Class K Shares | ||||
Management
Fee1 |
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Distribution
and/or Service (12b-1) Fees |
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Other
Expenses1,2,3,4 |
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Administration
Fees1 |
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Independent
Expenses2,3,4 |
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Acquired
Fund Fees and Expenses1,3 |
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Total
Annual Fund Operating Expenses3 |
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Fee
Waivers and/or Expense Reimbursements1,4 |
( |
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Total
Annual Fund Operating Expenses After Fee Waivers and/or Expense
Reimbursements1,4 |
1 | As
described in the “Management of the Funds” section of the Fund’s
prospectus beginning on page 199, BlackRock Advisors, LLC (“BAL”) and BFA
have contractually agreed to reimburse the 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 |
2 |
3 |
4 | Independent
Expenses consist of the Fund’s allocable portion of the fees and expenses
of the independent trustees of the Trust, counsel to such independent
trustees and the independent registered public accounting firm that
provides audit services to the Fund. BAL and BFA have contractually agreed
to reimburse, or provide offsetting credits to, the Fund for Independent
Expenses through June 30, 2034. After giving effect to such contractual
arrangements, Independent Expenses will be 0.00%. Such contractual
arrangements may not be terminated prior to July 1, 2034 without the
consent of the Board of Trustees of the
Trust. |
1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||
Class
K Shares |
$ | $ | $ | $ |
∎ |
Equity
Securities Risk — Stock markets are volatile. The price of
equity securities fluctuates based on changes in a company’s financial
condition and overall market and economic
conditions. |
∎ |
Debt Securities
Risk — Debt securities, such as bonds, involve risks, such
as credit risk, interest rate risk, extension risk, and prepayment risk,
each of which are described in further detail
below: |
∎ |
Allocation
Risk — The Fund’s ability to achieve its investment
objective depends upon BFA’S skill in determining the Fund’s strategic
asset class allocation and in selecting the best mix of Underlying Funds
and direct investments. There is a risk that BFA’s evaluations and
assumptions regarding asset classes or Underlying Funds may be incorrect
in view of actual market conditions. In addition, the asset allocation or
the combination of Underlying Funds determined by BFA could result in
underperformance as compared to funds with similar investment objectives
and strategies. |
∎ |
Market Risk and
Selection Risk — Market risk is the risk that one or more
markets in which the Fund invests will go down in value, including the
possibility that the markets will go down sharply and unpredictably. The
value of a security or other asset may decline due to changes in general
market conditions, economic trends or events that are not specifically
related to the issuer of the security or other asset, or factors that
affect a particular issuer or issuers, exchange, country, group of
countries, region, market, industry, group of industries, sector or asset
class. Local, regional or global events such as war, acts of terrorism,
the spread of infectious illness or other public health issues like
pandemics or epidemics, recessions, or other events could have a
significant impact on the Fund and its investments. Selection risk is the
risk that the securities selected by Fund management will underperform the
markets, the relevant indices or the securities selected by other funds
with similar investment objectives and investment strategies. This means
you may lose
money. |
∎ |
Investments in
Underlying Funds Risk — The Fund’s investments are
concentrated in Underlying Funds, so the Fund’s investment performance is
directly related to the performance of the Underlying Funds. The Fund’s
net asset value will change with changes in the equity and bond markets
and the value of the Underlying Funds and other securities in which it
invests. An investment in the Fund will entail more direct and indirect
costs and expenses than a direct investment in the Underlying Funds. For
example, the Fund indirectly pays a portion of the expenses (including
operating expenses and management fees) incurred by the Underlying
Funds. |
∎ |
Affiliated Fund
Risk — In managing the Fund, BFA will have authority to
select and substitute underlying funds and ETFs. BFA may be subject to
potential conflicts of interest in selecting underlying funds and ETFs
because the fees paid to BFA by some underlying funds and ETFs are higher
than the fees paid by other underlying funds and ETFs. However, BFA is a
fiduciary to the Fund and is legally obligated to act in the Fund’s best
interests when selecting underlying funds and ETFs. If an underlying fund
or ETF holds interests in an affiliated fund, the Fund may be prohibited
from purchasing shares of that underlying fund or
ETF. |
∎ |
Retirement
Income Risk — The Fund does not provide a guarantee that
sufficient capital appreciation will be achieved to provide adequate
income at and through retirement. The Fund also does not ensure that you
will have assets in your account sufficient to cover your retirement
expenses; this will depend on the amount of money you have invested in the
Fund, the length of time you have held your investment, the returns of the
markets over time, the amount you spend in retirement, and your other
assets and income sources. |
∎ |
Derivatives
Risk — The Fund’s use of derivatives may increase its costs,
reduce the Fund’s returns and/or increase volatility. Derivatives involve
significant risks,
including: |
∎ |
Leverage
Risk — Some transactions may give rise to a form of economic
leverage. These transactions may include, among others, derivatives, and
may expose the Fund to greater risk and increase its costs. The use of
leverage may cause the Fund to liquidate portfolio positions when it may
not be advantageous to do so to satisfy its obligations or to meet the
applicable requirements of the Investment Company Act of 1940, as amended,
and the rules thereunder. Increases and decreases in the value of the
Fund’s portfolio will be magnified when the Fund uses
leverage. |
∎ |
Asset
Class Risk — Securities and other
assets or financial instruments in the Underlying Index of an Underlying
Fund or in an Underlying Fund’s portfolio may underperform in comparison
to the general financial markets, a particular financial market or other
asset classes. |
∎ |
Authorized
Participant Concentration Risk — Only an authorized
participant may engage in creation or redemption transactions directly
with an ETF, and none of those authorized participants is obligated to
engage in creation and/ or redemption transactions. The Underlying Funds
that are ETFs have a limited number of institutions that may act as
authorized participants on an agency basis (i.e., on behalf of other
market participants). To the extent that authorized participants exit the
business or are unable to proceed with creation or redemption orders with
respect to an ETF and no other authorized participant is able to step
forward to create or redeem, the ETF shares may be more likely to trade at
a premium or discount to net asset value and possibly face trading halts
or delisting. Authorized participant concentration risk may be heightened
for ETFs that invest in securities issued by non‑U.S. issuers or other
securities or instruments that have lower trading
volumes. |
∎ |
Collateralized
Debt Obligations Risk — In addition to the typical risks
associated with fixed-income securities and asset-backed securities,
collateralized debt obligations (“CDOs”), including collateralized loan
obligations, carry additional risks including, but not limited to:
(i) the possibility that distributions from collateral securities
will not be adequate to make interest or other payments; (ii) the
risk that the collateral may default or decline in value or be downgraded,
if rated by a nationally recognized statistical rating organization;
(iii) the Fund may invest in tranches of CDOs that are subordinate to
other tranches; (iv) the structure and complexity of the transaction
and the legal documents could lead to disputes among investors regarding
the characterization of proceeds; (v) the investment return achieved
by the Fund could be significantly different than those predicted by
financial models; (vi) the lack of a readily available secondary
market for CDOs; (vii) the risk of forced “fire sale” liquidation due
to technical defaults such as coverage test failures; and (viii) the
CDO’s manager may perform
poorly. |
∎ |
Commodities
Related Investments Risk — Exposure to the commodities
markets may subject the Fund to greater volatility than investments in
traditional securities. The value of commodity-linked derivative
investments may be affected by changes in overall market movements,
commodity index volatility, changes in inflation, interest rates, or
factors affecting a particular industry or commodity, such as drought,
floods, weather, embargoes, tariffs and international economic, political
and regulatory developments. |
∎ |
Concentration
Risk — To the extent that the Fund or an Underlying Fund is
concentrated in the securities of companies, a particular market,
industry, group of industries, sector or asset class, country, region or
group of countries, the Fund or that Underlying Fund may be adversely
affected by the performance of those securities, may be subject to
increased price volatility and may be more susceptible to adverse
economic, market, political or regulatory occurrences affecting that
market, industry, group of industries, sector or asset class, country,
region or group of countries. |
∎ |
Convertible
Securities Risk — The market value of a convertible security
performs like that of a regular debt security; that is, if market interest
rates rise, the value of a convertible security usually falls. In
addition, convertible securities are subject to the risk that the issuer
will not be able to pay interest, principal or dividends when due, and
their market value may change based on changes in the issuer’s credit
rating or the market’s perception of the issuer’s creditworthiness. Since
it derives a portion of its value from the common stock into which it may
be converted, a convertible security is also subject to the same types of
market and issuer risks that apply to the underlying common stock,
including the potential for increased volatility in the price of the
convertible security. |
∎ |
Corporate Loans
Risk — Commercial banks and other financial institutions or
institutional investors make corporate loans to companies that need
capital to grow or restructure. Borrowers generally pay interest on
corporate loans at rates that change in response to changes in market
interest rates such as the Secured Overnight Financing Rate (“SOFR”), the
London Interbank Offered Rate (“LIBOR”) or the prime rates of U.S. banks.
As a result, the value of corporate loan investments is generally less
exposed to the adverse effects of shifts in market interest rates than
investments that pay a fixed rate of interest. The market for corporate
loans may be subject to irregular trading activity and wide bid/ask
spreads. In addition, transactions in corporate loans may settle on a
delayed basis. As a result, the proceeds from the sale of corporate loans
may not be readily available to make additional investments or to meet the
Fund’s redemption obligations. To the extent the extended settlement
process gives rise to short-term liquidity needs, the Fund may hold
additional cash, sell investments or temporarily borrow from banks and
other lenders. |
∎ |
Counterparty
Risk — The counterparty to an over‑the‑counter derivatives
contract or a borrower of the Fund’s securities may be unable or unwilling
to make timely principal, interest or settlement payments, or otherwise to
honor its obligations. Any such failure to honor its obligations may cause
significant losses to the Fund. |
∎ |
Depositary
Receipts Risk — Depositary receipts are generally subject to
the same risks as the foreign securities that they evidence or into which
they may be converted. In addition to investment risks associated with the
underlying issuer, depositary receipts expose the Fund to additional risks
associated with the non‑uniform terms that apply
to |
depositary
receipt programs, credit exposure to the depository bank and to the
sponsors and other parties with whom the depository bank establishes the
programs, currency risk and the risk of an illiquid market for depositary
receipts. The issuers of unsponsored depositary receipts are not
obligated to disclose information that is, in the United States,
considered material. Therefore, there may be less information available
regarding these issuers and there may not be a correlation between such
information and the market value of the depositary receipts. While
depositary receipts provide an alternative to directly purchasing
underlying foreign securities in their respective markets and currencies,
they continue to be subject to many of the risks associated with investing
directly in foreign securities, including political, economic, and
currency risk. |
∎ |
Distressed
Securities Risk — Distressed securities are speculative and
involve substantial risks in addition to the risks of investing in junk
bonds. The Fund will generally not receive interest payments on the
distressed securities and may incur costs to protect its investment. In
addition, distressed securities involve the substantial risk that
principal will not be repaid. These securities may present a substantial
risk of default or may be in default at the time of investment. The Fund
may incur additional expenses to the extent it is required to seek
recovery upon a default in the payment of principal of or interest on its
portfolio holdings. In any reorganization or liquidation proceeding
relating to a portfolio company, the Fund may lose its entire investment
or may be required to accept cash or securities with a value less than its
original investment. Distressed securities and any securities received in
an exchange for such securities may be subject to restrictions on
resale. |
∎ |
Dollar Rolls
Risk — Dollar rolls involve the risk that the market value
of the securities that the Fund is committed to buy may decline below the
price of the securities the Fund has sold. These transactions may involve
leverage. |
∎ |
Emerging
Markets Risk — Emerging markets are riskier than more
developed markets because they tend to develop unevenly and may never
fully develop. Investments in emerging markets may be considered
speculative. Emerging markets are more likely to experience hyperinflation
and currency devaluations, which adversely affect returns to U.S.
investors. In addition, many emerging securities markets have far lower
trading volumes and less liquidity than developed
markets. |
∎ |
Foreign
Securities Risk — Foreign investments often involve special
risks not present in U.S. investments that can increase the chances that
the Fund will lose money. These risks
include: |
∎ |
The
Fund generally holds its foreign securities and cash in foreign banks and
securities depositories, which may be recently organized or new to the
foreign custody business and may be subject to only limited or no
regulatory oversight. |
∎ |
Changes
in foreign currency exchange rates can affect the value of the Fund’s
portfolio. |
∎ |
The
economies of certain foreign markets may not compare favorably with the
economy of the United States with respect to such issues as growth of
gross national product, reinvestment of capital, resources and balance of
payments position. |
∎ |
The
governments of certain countries, or the U.S. Government with respect to
certain countries, may prohibit or impose substantial restrictions through
capital controls and/or sanctions on foreign investments in the capital
markets or certain industries in those countries, which may prohibit or
restrict the ability to own or transfer currency, securities, derivatives
or other assets. |
∎ |
Many
foreign governments do not supervise and regulate stock exchanges, brokers
and the sale of securities to the same extent as does the United States
and may not have laws to protect investors that are comparable to U.S.
securities laws. |
∎ |
Settlement
and clearance procedures in certain foreign markets may result in delays
in payment for or delivery of securities not typically associated with
settlement and clearance of U.S.
investments. |
∎ |
The
Fund’s claims to recover foreign withholding taxes may not be successful,
and if the likelihood of recovery of foreign withholding taxes materially
decreases, due to, for example, a change in tax regulation or approach in
the foreign country, accruals in the Fund’s net asset value for such
refunds may be written down partially or in full, which will adversely
affect the Fund’s net asset
value. |
∎ |
The
European financial markets have recently experienced volatility and
adverse trends due to concerns about economic downturns in, or rising
government debt levels of, several European countries as well as acts of
war in the region. These events may spread to other countries in Europe
and may affect the value and liquidity of certain of the Fund’s
investments. |
∎ |
Geographic
Risk — A natural disaster could occur in a geographic region
in which the Fund invests, which could adversely affect the economy or the
business operations of companies in the specific geographic region,
causing an adverse impact on the Fund’s investments in, or which are
exposed to, the affected region. |
∎ |
High Portfolio
Turnover Risk — The Fund may engage in active and frequent
trading of its portfolio securities. High portfolio turnover (more than
100%) may result in increased transaction costs to the Fund, including
brokerage commissions, dealer mark‑ups and other transaction costs on the
sale of the securities and on reinvestment in other securities. The sale
of Fund portfolio securities may result in the realization and/or
distribution to shareholders of higher capital gains or losses as compared
to a fund with less active trading policies. These effects of higher than
normal portfolio turnover may adversely affect Fund
performance. |
∎ |
High Yield
Bonds Risk — Although junk bonds generally pay higher rates
of interest than investment grade bonds, junk bonds are high risk
investments that are considered speculative and may cause income and
principal losses for the Fund. |
∎ |
Income
Risk — Income risk is the risk that the Fund’s yield will
vary as short-term securities in its portfolio mature and the proceeds are
reinvested in securities with different interest
rates. |
∎ |
Indexed and
Inverse Securities Risk — Indexed and inverse securities
provide a potential return based on a particular index of value or
interest rates. The Fund’s return on these securities will be subject to
risk with respect to the value of the particular index. These securities
are subject to leverage risk and correlation risk. Certain indexed and
inverse securities have greater sensitivity to changes in interest rates
or index levels than other securities, and the Fund’s investment in such
instruments may decline significantly in value if interest rates or index
levels move in a way Fund management does not
anticipate. |
∎ |
Index-Related
Risk — There is no guarantee that an Underlying Fund’s
investment results will have a high degree of correlation to those of its
underlying index or that the Underlying Fund will achieve its investment
objective. Market disruptions or high volatility, other unusual market
circumstances and regulatory restrictions could have an adverse effect on
an Underlying Fund’s ability to adjust its exposure to the required levels
in order to track its underlying index. Errors in index data, index
computations or the construction of an underlying index in accordance with
its methodology may occur from time to time and may not be identified and
corrected by the index provider for a period of time or at all, which may
have an adverse impact on an Underlying Fund and its shareholders. Unusual
market conditions or other unforeseen circumstances (such as natural
disasters, political unrest or war) may impact the index provider or a
third-party data provider and could cause the index provider to postpone a
scheduled rebalance. This could cause an underlying index to vary from its
normal or expected
composition. |
∎ |
Inflation-Indexed Bonds Risk —
The principal value of an investment is not protected or otherwise
guaranteed by virtue of the Fund’s investments in inflation-indexed
bonds. |
∎ |
Investment
Style Risk — Under certain market conditions, growth
investments have performed better during the later stages of economic
expansion and value investments have performed better during periods of
economic recovery. Therefore, these investment styles may over time go in
and out of favor. At times when an investment style used by the Fund or an
Underlying Fund is out of favor, the Fund may underperform other funds
that use different investment
styles. |
∎ |
Issuer
Risk — Fund performance depends on the performance of
individual securities to which the Fund has exposure. Changes in the
financial condition or credit rating of an issuer of those securities may
cause the value of the securities to
decline. |
∎ |
Management
Risk — If a passively managed ETF does not fully replicate
the underlying index, it is subject to the risk that the manager’s
investment management strategy may not produce the intended
results. |
∎ |
Mezzanine
Securities Risk — Mezzanine securities carry the risk that
the issuer will not be able to meet its obligations and that the equity
securities purchased with the mezzanine investments may lose
value. |
∎ |
Model Risk
— The Fund seeks to pursue its investment objective by using
proprietary models that incorporate quantitative analysis. Investments
selected using these models may perform differently than as forecasted due
to the factors incorporated into the models and the weighting of each
factor, changes from historical trends, and issues in the construction and
implementation of the models (including, but not limited to, software
issues and other technological issues). There is no guarantee that
BlackRock’s use of these models will result in effective investment
decisions for the
Fund. |
∎ |
Mortgage- and
Asset-Backed Securities Risks — Mortgage- and asset-backed
securities represent interests in “pools” of mortgages or other assets,
including consumer loans or receivables held in trust. Mortgage- and
asset-backed securities are subject to credit, interest rate, prepayment
and extension risks. These securities also are subject to risk of default
on the underlying mortgage or asset, particularly during periods of
economic downturn. Small movements in interest rates (both increases and
decreases) may quickly and significantly reduce the value of certain
mortgage-backed securities. |
∎ |
Municipal
Securities Risks — Municipal securities risks include the
ability of the issuer to repay the obligation, the relative lack of
information about certain issuers of municipal securities, and the
possibility of future legislative changes which could affect the market
for and value of municipal securities. Budgetary constraints of local,
state, and federal governments upon which the issuers may be relying for
funding may also impact municipal securities. These risks
include: |
∎ |
National Closed
Market Trading Risk — To the extent that the underlying
securities and/or other assets held by an Underlying Fund that is an ETF
trade on foreign exchanges or in foreign markets that may be closed when
the securities exchange on which the Underlying Fund’s shares trade is
open, there are likely to be deviations between the current price of such
an underlying security and the last quoted price for the underlying
security (i.e., an Underlying Fund’s quote from the closed foreign
market). The impact of a closed foreign market on an Underlying Fund is
likely to be greater where a large portion of the Underlying Fund’s
underlying securities and/or other
assets |
trade
on that closed foreign market or when the foreign market is closed for
unscheduled reasons. These deviations could result in premiums or
discounts to one or more of the Underlying Funds’ net asset values that
may be greater than those experienced by other
ETFs. |
∎ |
“New Issues”
Risk — “New issues” are initial public offerings (“IPOs”) of
equity securities. Securities issued in IPOs have no trading history, and
information about the companies may be available for very limited periods.
In addition, the prices of securities sold in IPOs may be highly volatile
or may decline shortly after the
IPO. |
∎ |
Passive
Investment Risk — Because BFA does not select individual
companies in the underlying indexes for certain Underlying Funds, those
Underlying Funds may hold securities of companies that present risks that
an investment adviser researching individual securities might seek to
avoid. |
∎ |
Pay-in-kind
Bonds Risk — Similar to zero coupon obligations, pay-in-kind
bonds also carry additional risk as holders of these types of securities
realize no cash until the cash payment date unless a portion of such
securities is sold and, if the issuer defaults, the Fund may obtain no
return at all on its investment. The market price of pay-in-kind bonds is
affected by interest rate changes to a greater extent, and therefore tends
to be more volatile, than that of securities which pay interest in
cash. |
∎ |
Preferred
Securities Risk — Preferred securities may pay fixed or
adjustable rates of return. Preferred securities are subject to
issuer-specific and market risks applicable generally to equity
securities. In addition, a company’s preferred securities generally pay
dividends only after the company makes required payments to holders of its
bonds and other debt. For this reason, the value of preferred securities
will usually react more strongly than bonds and other debt to actual or
perceived changes in the company’s financial condition or prospects.
Preferred securities of smaller companies may be more vulnerable to
adverse developments than preferred securities of larger
companies. |
∎ |
Real
Estate-Related Securities Risk — The main risk of real
estate-related securities is that the value of the underlying real estate
may go down. Many factors may affect real estate values. These factors
include both the general and local economies, vacancy rates, changes in
rent schedules, tenant bankruptcies, the ability to re‑lease space under
expiring leases on attractive terms, the amount of new construction in a
particular area, the laws and regulations (including zoning, environmental
and tax laws) affecting real estate and the costs of owning, maintaining
and improving real estate. The availability of mortgage financing and
changes in interest rates may also affect real estate values. If the
Fund’s real estate-related investments are concentrated in one geographic
area or in one property type, the Fund will be particularly subject to the
risks associated with that area or property type. Many issuers of real
estate-related securities are highly leveraged, which increases the risk
to holders of such securities. The value of the securities the Fund buys
will not necessarily track the value of the underlying investments of the
issuers of such securities. |
∎ |
REIT Investment
Risk — Investments in REITs involve unique risks. REITs may
have limited financial resources, may trade less frequently and in limited
volume, may engage in dilutive offerings of securities and may be more
volatile than other securities. REIT issuers may also fail to maintain
their exemptions from investment company registration or fail to qualify
for the “dividends paid deduction” under the Internal Revenue Code of
1986, as amended (the “Internal Revenue Code”), which allows REITs to
reduce their corporate taxable income for dividends paid to their
shareholders. In addition, certain issuers of real estate-related
securities may have developed or commenced development on properties and
may develop additional properties in the future. Real estate development
involves significant risks in addition to those involved in the ownership
and operation of established properties. Real estate securities may have
limited diversification and are, therefore, subject to risks inherent in
operating and financing a limited number of projects. Real estate
securities are also subject to heavy cash flow dependency and defaults by
borrowers or tenants. |
∎ |
Representative
Sampling Risk — Representative sampling is a method of
indexing that involves investing in a representative sample of securities
that collectively have a similar investment profile to the index and
resemble the index in terms of risk factors and other key characteristics.
An ETF may or may not hold every security in the index. When an ETF
deviates from a full replication indexing strategy to utilize a
representative sampling strategy, the ETF is subject to an increased risk
of tracking error, in that the securities selected in the aggregate for
the ETF may not have an investment profile similar to those of its
index. |
∎ |
Repurchase
Agreements and Purchase and Sale Contracts Risk — If the
other party to a repurchase agreement or purchase and sale contract
defaults on its obligation under the agreement, the Fund may suffer delays
and incur costs or lose money in exercising its rights under the
agreement. If the seller fails to repurchase the security in either
situation and the market value of the security declines, the Fund may lose
money. |
∎ |
Reverse
Repurchase Agreements Risk — Reverse repurchase agreements
involve the sale of securities held by the Fund with an agreement to
repurchase the securities at an agreed-upon price, date and interest
payment. Reverse repurchase agreements involve the risk that the other
party may fail to return the securities in a timely manner or at all. The
Fund could lose money if it is unable to recover the securities and the
value of the collateral held by the Fund, including the value of the
investments made with cash collateral, is less than the value of the
securities. |
These
events could also trigger adverse tax consequences for the Fund. In
addition, reverse repurchase agreements involve the risk that the interest
income earned in the investment of the proceeds will be less than the
interest expense. |
∎ |
Risks of Loan
Assignments and Participations — As the purchaser of an
assignment, the Fund typically succeeds to all the rights and obligations
of the assigning institution and becomes a lender under the credit
agreement with respect to the debt obligation; however, the Fund may not
be able unilaterally to enforce all rights and remedies under the loan and
with regard to any associated collateral. Because assignments may be
arranged through private negotiations between potential assignees and
potential assignors, the rights and obligations acquired by the Fund as
the purchaser of an assignment may differ from, and be more limited than,
those held by the assigning lender. In addition, if the loan is
foreclosed, the Fund could become part owner of any collateral and could
bear the costs and liabilities of owning and disposing of the collateral.
The Fund may be required to pass along to a purchaser that buys a loan
from the Fund by way of assignment a portion of any fees to which the Fund
is entitled under the loan. In connection with purchasing participations,
the Fund generally will have no right to enforce compliance by the
borrower with the terms of the loan agreement relating to the loan, nor
any rights of set‑off against the borrower, and the Fund may not directly
benefit from any collateral supporting the loan in which it has purchased
the participation. As a result, the Fund will be subject to the credit
risk of both the borrower and the lender that is selling the
participation. In the event of the insolvency of the lender selling a
participation, the Fund may be treated as a general creditor of the lender
and may not benefit from any set‑off between the lender and the
borrower. |
∎ |
Second Lien
Loans Risk — Second lien loans generally are subject to
similar risks as those associated with investments in senior loans.
Because second lien loans are subordinated or unsecured and thus lower in
priority of payment to senior loans, they are subject to the additional
risk that the cash flow of the borrower and property securing the loan or
debt, if any, may be insufficient to meet scheduled payments after giving
effect to the senior secured obligations of the
borrower. |
∎ |
Senior Loans
Risk — There is less readily available, reliable information
about most senior loans than is the case for many other types of
securities. An economic downturn generally leads to a higher non‑payment
rate, and a senior loan may lose significant value before a default
occurs. Moreover, any specific collateral used to secure a senior loan may
decline in value or become illiquid, which would adversely affect the
senior loan’s value. No active trading market may exist for certain senior
loans, which may impair the ability of the Fund to realize full value in
the event of the need to sell a senior loan and which may make it
difficult to value senior loans. Although senior loans in which the Fund
will invest generally will be secured by specific collateral, there can be
no assurance that liquidation of such collateral would satisfy the
borrower’s obligation in the event of non‑payment of scheduled interest or
principal or that such collateral could be readily liquidated. To the
extent that a senior loan is collateralized by stock in the borrower or
its subsidiaries, such stock may lose all of its value in the event of the
bankruptcy of the borrower. Uncollateralized senior loans involve a
greater risk of loss. |
∎ |
Shares of an
ETF May Trade at Prices Other Than Net Asset Value — Shares
of an ETF trade on exchanges at prices at, above or below their most
recent net asset value (“NAV”). The per share net asset value of an ETF is
calculated at the end of each business day and fluctuates with changes in
the market value of the ETF’s holdings since the most recent calculation.
The trading prices of an ETF’s shares fluctuate continuously throughout
trading hours based on market supply and demand rather than net asset
value. The trading prices of an ETF’s shares may deviate significantly
from net asset value during periods of market volatility. Any of these
factors may lead to an ETF’s shares trading at a premium or discount to
net asset value. However, because shares can be created and redeemed in
creation units, which are aggregated blocks of shares that authorized
participants who have entered into agreements with the ETF’s distributor
can purchase or redeem directly from the ETF, at net asset value (unlike
shares of many closed‑end funds, which frequently trade at appreciable
discounts from, and sometimes at premiums to, their net asset values),
large discounts or premiums to the net asset value of an ETF are not
likely to be sustained over the long-term. While the creation/redemption
feature is designed to make it likely that an ETF’s shares normally trade
on exchanges at prices close to the ETF’s next calculated net asset value,
exchange prices are not expected to correlate exactly with an ETF’s net
asset value due to timing reasons as well as market supply and demand
factors. In addition, disruptions to creations and redemptions or the
existence of extreme market volatility may result in trading prices that
differ significantly from net asset value. If a shareholder purchases at a
time when the market price is at a premium to the net asset value or sells
at a time when the market price is at a discount to the net asset value,
the shareholder may sustain losses. The use of cash creations and
redemptions may also cause the ETFs’ shares to trade in the market at
greater bid-ask spreads or greater premiums or discounts to the ETFs’
NAV. |
∎ |
Short Sales
Risk — Because making short sales in securities that it does
not own exposes the Fund to the risks associated with those securities,
such short sales involve speculative exposure risk. The Fund will incur a
loss as a result of a short sale if the price of the security increases
between the date of the short sale and the date on which the Fund replaces
the security sold short. |
∎ |
Small and
Mid‑Capitalization Company Risk — Companies with small or
mid‑size market capitalizations will normally have more limited product
lines, markets and financial resources and will be dependent upon a
more |
limited
management group than larger capitalized companies. In addition, it is
more difficult to get information on smaller companies, which tend to be
less well known, have shorter operating histories, do not have significant
ownership by large investors and are followed by relatively few securities
analysts. |
∎ |
Small Cap and
Emerging Growth Securities Risk — Small cap or emerging
growth companies may have limited product lines or markets. They may be
less financially secure than larger, more established companies. They may
depend on a more limited management group than larger capitalized
companies. |
∎ |
Sovereign Debt
Risk — Sovereign debt instruments are subject to the risk
that a governmental entity may delay or refuse to pay interest or repay
principal on its sovereign debt, due, for example, to cash flow problems,
insufficient foreign currency reserves, political considerations, the
relative size of the governmental entity’s debt position in relation to
the economy or the failure to put in place economic reforms required by
the International Monetary Fund or other multilateral
agencies. |
∎ |
Structured
Notes Risk — Structured notes and other related instruments
purchased by the Fund are generally privately negotiated debt obligations
where the principal and/or interest is determined by reference to the
performance of a specific asset, benchmark asset, market or interest rate
(“reference measure”). The purchase of structured notes exposes the Fund
to the credit risk of the issuer of the structured product. Structured
notes may be leveraged, increasing the volatility of each structured
note’s value relative to the change in the reference measure. Structured
notes may also be less liquid and more difficult to price accurately than
less complex securities and instruments or more traditional debt
securities. |
∎ |
Structured
Securities Risk — Because structured securities of the type
in which the Fund may invest typically involve no credit enhancement,
their credit risk generally will be equivalent to that of the underlying
instruments, index or reference obligation and will also be subject to
counterparty risk. The Fund may have the right to receive payments only
from the structured security, and generally does not have direct rights
against the issuer or the entity that sold the assets to be securitized.
In addition to the general risks associated with debt securities discussed
herein, structured securities carry additional risks, including, but not
limited to: the possibility that distributions from collateral securities
will not be adequate to make interest or other payments; the quality of
the collateral may decline in value or default; and the possibility that
the structured securities are subordinate to other classes. The Fund is
permitted to invest in a class of structured securities that is either
subordinated or unsubordinated to the right of payment of another class.
Subordinated structured securities typically have higher yields and
present greater risks than unsubordinated structured securities.
Structured securities are typically sold in private placement
transactions, and there currently is no active trading market for
structured securities. Structured securities are based upon the movement
of one or more factors, including currency exchange rates, interest rates,
reference bonds and stock indices, and changes in interest rates and
impact of these factors may cause significant price fluctuations.
Additionally, changes in the reference instrument or security may cause
the interest rate on the structured security to be reduced to zero.
Certain issuers of such structured securities may be deemed to be
“investment companies” as defined in the Investment Company Act. As a
result, the Fund’s investment in such securities may be limited by certain
investment restrictions contained in the Investment Company
Act. |
∎ |
Supranational
Entities Risk — The Fund may invest in obligations issued or
guaranteed by the World Bank. The government members, or “stockholders,”
usually make initial capital contributions to the World Bank and in many
cases are committed to make additional capital contributions if the World
Bank is unable to repay its borrowings. There is no guarantee that one or
more stockholders of the World Bank will continue to make any necessary
additional capital contributions. If such contributions are not made, the
entity may be unable to pay interest or repay principal on its debt
securities, and the Fund may lose money on such
investments. |
∎ |
Tender Option
Bonds and Related Securities Risk — The Fund’s participation
in tender option bond transactions may reduce the Fund’s returns and/or
increase volatility. Investments in tender option bond transactions expose
the Fund to counterparty risk and leverage risk. An investment in a tender
option bond transaction typically will involve greater risk than an
investment in a municipal fixed rate security, including the risk of loss
of principal. Distributions on residual inverse floating rate interest
tender option bonds (“TOB Residuals”) will bear an inverse relationship to
short-term municipal security interest rates. Distributions on TOB
Residuals paid to the Fund will be reduced or, in the extreme, eliminated
as short-term municipal interest rates rise and will increase when
short-term municipal interest rates fall. TOB Residuals generally will
underperform the market for fixed rate municipal securities in a rising
interest rate environment. The Fund may invest in beneficial interests in
a special purpose trust formed for the purpose of holding Municipal Bonds
contributed by one or more funds (a “TOB Trust”) on either a non‑recourse
or recourse basis. If the Fund invests in a TOB Trust on a recourse basis,
it could suffer losses in excess of the value of its TOB
Residuals. |
∎ |
Tracking Error
Risk — The Fund may be subject to tracking error, which is
the divergence of an Underlying Fund’s performance from that of its
underlying index. Tracking error may occur because of differences between
the securities (including shares of the Underlying Funds) and other
instruments held in an Underlying Fund’s portfolio and those included in
its underlying index, pricing differences (including, as applicable,
differences between a security’s price at the local market close and an
Underlying Fund’s valuation of a security at the time of
calculation |
of
an Underlying Fund’s NAV, differences in transaction costs, an Underlying
Fund’s holding of uninvested cash, differences in timing of the accrual of
or the valuation of dividends or other distributions, interest, the
requirements to maintain pass-through tax treatment, portfolio
transactions carried out to minimize the distribution of capital gains to
shareholders, changes to an underlying index and the cost to an Underlying
Fund of complying with various new or existing regulatory requirements,
among other reasons. These risks may be heightened during times of
increased market volatility or other unusual market conditions. In
addition, tracking error may result because a fund incurs fees and
expenses, while the Underlying Index does
not. |
∎ |
U.S. Government
Issuer Risk — Treasury obligations may differ in their
interest rates, maturities, times of issuance and other characteristics.
Obligations of U.S. Government agencies and authorities are supported by
varying degrees of credit but generally are not backed by the full faith
and credit of the U.S. Government. No assurance can be given that the U.S.
Government will provide financial support to its agencies and authorities
if it is not obligated by law to do
so. |
∎ |
U.S. Government
Mortgage-Related Securities Risk — There are a number of
important differences among the agencies and instrumentalities of the U.S.
Government that issue mortgage-related securities and among the securities
that they issue. Mortgage-related securities guaranteed by the Government
National Mortgage Association (“GNMA” or “Ginnie Mae”) are guaranteed as
to the timely payment of principal and interest by GNMA and such guarantee
is backed by the full faith and credit of the United States. GNMA
securities also are supported by the right of GNMA to borrow funds from
the U.S. Treasury to make payments under its guarantee. Mortgage-related
securities issued by Fannie Mae or Freddie Mac are solely the obligations
of Fannie Mae or Freddie Mac, as the case may be, and are not backed by or
entitled to the full faith and credit of the United States but are
supported by the right of the issuer to borrow from the
Treasury. |
∎ |
Variable and
Floating Rate Instrument Risk — Variable and floating rate
securities provide for periodic adjustment in the interest rate paid on
the securities. These securities may be subject to greater illiquidity
risk than other fixed income securities, meaning the absence of an active
market for these securities could make it difficult for the Fund to
dispose of them at any given
time. |
∎ |
Warrants Risk
— If the price of the underlying stock does not rise above
the exercise price before the warrant expires, the warrant generally
expires without any value and the Fund will lose any amount it paid for
the warrant. Thus, investments in warrants may involve substantially more
risk than investments in common stock. Warrants may trade in the same
markets as their underlying stock; however, the price of the warrant does
not necessarily move with the price of the underlying
stock. |
∎ |
When-Issued and
Delayed Delivery Securities and Forward Commitments Risk —
When-issued and delayed delivery securities and forward commitments
involve the risk that the security the Fund buys will lose value prior to
its delivery. There also is the risk that the security will not be issued
or that the other party to the transaction will not meet its obligation.
If this occurs, the Fund may lose both the investment opportunity for the
assets it set aside to pay for the security and any gain in the security’s
price. |
∎ |
Zero Coupon
Securities Risk —
While interest payments are not made on such securities, holders of such
securities are deemed to have received income (“phantom income”) annually,
notwithstanding that cash may not be received currently. The effect of
owning instruments that do not make current interest payments is that a
fixed yield is earned not only on the original investment but also, in
effect, on all discount accretion during the life of the obligations. This
implicit reinvestment of earnings at a fixed rate eliminates the risk of
being unable to invest distributions at a rate as high as the implicit
yield on the zero coupon bond, but at the same time eliminates the
holder’s ability to reinvest at higher rates in the future. For this
reason, some of these securities may be subject to substantially greater
price fluctuations during periods of changing market interest rates than
are comparable securities that pay interest currently. Longer term zero
coupon bonds are more exposed to interest rate risk than shorter term zero
coupon bonds. These investments benefit the issuer by mitigating its need
for cash to meet debt service, but also require a higher rate of return to
attract investors who are willing to defer receipt of
cash. |
|
1 Year | 5 Years | 10 Years | |||||||||
LifePath
Dynamic Retirement Fund — Class K Shares |
||||||||||||
Return
Before Taxes |
% | % | % | |||||||||
Return
After Taxes on Distributions |
% | % | % | |||||||||
Return
After Taxes on Distributions and Sale of Fund Shares |
% | % | % | |||||||||
LifePath
Dynamic Retirement Fund Custom Benchmark (Reflects no deduction for fees, expenses or taxes) |
% | % | % | |||||||||
Bloomberg
U.S. Aggregate Bond Index (Reflects no deduction for fees, expenses or taxes) |
% | % | % |
Portfolio
Manager |
Portfolio Manager of the Fund Since | Title | ||
Philip
Green |
2016 | Managing Director of BlackRock, Inc. | ||
Chris
Chung, CFA |
2020 | Managing Director of BlackRock, Inc. | ||
Michael
Pensky, CFA |
2024 | Managing Director of BlackRock, Inc. |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
Class K Shares | ||||
Management
Fee1 |
|||||
Distribution
and/or Service (12b-1) Fees |
|||||
Other
Expenses1,2,3,4 |
|||||
Administration
Fees1 |
|||||
Independent
Expenses2,3,4 |
|||||
Acquired
Fund Fees and Expenses1,3 |
|||||
Total
Annual Fund Operating Expenses3 |
|||||
Fee
Waivers and/or Expense Reimbursements1,4 |
( |
||||
Total
Annual Fund Operating Expenses After Fee Waivers and/or Expense
Reimbursements1,4 |
1 | As
described in the “Management of the Funds” section of the Fund’s
prospectus beginning on page 199, BlackRock Advisors, LLC (“BAL”) and BFA
have contractually agreed to reimburse the 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 |
2 |
3 |
4 | Independent
Expenses consist of the Fund’s allocable portion of the fees and expenses
of the independent trustees of the Trust, counsel to such independent
trustees and the independent registered public accounting firm that
provides audit services to the Fund. BAL and BFA have contractually agreed
to reimburse, or provide offsetting credits to, the Fund for Independent
Expenses through June 30, 2034. After giving effect to such contractual
arrangements, Independent Expenses will be 0.00%. Such contractual
arrangements may not be terminated prior to July 1, 2034 without the
consent of the Board of Trustees of the
Trust. |
1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||
Class
K Shares |
$ | $ | $ | $ |
Years Until Retirement | Equity Funds (includes REITs)1 |
Fixed‑Income Funds1 | ||||||||
45 |
99 | % | 1 | % | ||||||
40 |
99 | % | 1 | % | ||||||
35 |
99 | % | 1 | % | ||||||
30 |
96 | % | 4 | % | ||||||
25 |
89 | % | 11 | % | ||||||
20 |
79 | % | 21 | % | ||||||
15 |
68 | % | 32 | % | ||||||
10 |
56 | % | 44 | % | ||||||
5 |
43 | % | 57 | % | ||||||
0 |
40 | % | 60 | % | ||||||
1 BFA may adjust the
allocation to equity and fixed-income in the Fund, based on an assessment
of the current market conditions and the potential contribution of each
asset class to the expected risk and return characteristics of the Fund.
In general, the adjustments will be limited to +/- 10% relative to the
target allocations. |
|
∎ |
Equity
Securities Risk — Stock markets are volatile. The price of
equity securities fluctuates based on changes in a company’s financial
condition and overall market and economic
conditions. |
∎ |
Debt Securities
Risk — Debt securities, such as bonds, involve risks, such
as credit risk, interest rate risk, extension risk, and prepayment risk,
each of which are described in further detail
below: |
∎ |
Allocation
Risk — The Fund’s ability to achieve its investment
objective depends upon BFA’S skill in determining the Fund’s strategic
asset class allocation and in selecting the best mix of Underlying Funds
and direct investments. There is a risk that BFA’s evaluations and
assumptions regarding asset classes or Underlying Funds may be incorrect
in view of actual market conditions. In addition, the asset allocation or
the combination of Underlying Funds determined by BFA could result in
underperformance as compared to funds with similar investment objectives
and strategies. |
∎ |
Market Risk and
Selection Risk — Market risk is the risk that one or more
markets in which the Fund invests will go down in value, including the
possibility that the markets will go down sharply and unpredictably. The
value of a security or other asset may decline due to changes in general
market conditions, economic trends or events that are not specifically
related to the issuer of the security or other asset, or factors that
affect a particular issuer or issuers, exchange, country, group of
countries, region, market, industry, group of industries, sector or asset
class. Local, regional or global events such as war, acts of terrorism,
the spread of infectious illness or other public health issues like
pandemics or epidemics, recessions, or other events could have a
significant impact on the Fund and its investments. Selection risk is the
risk that the securities selected by Fund management will underperform the
markets, the relevant indices or the securities selected by other funds
with similar investment objectives and investment strategies. This means
you may lose money. |
∎ |
Investments in
Underlying Funds Risk — The Fund’s investments are
concentrated in Underlying Funds, so the Fund’s investment performance is
directly related to the performance of the Underlying Funds. The Fund’s
net asset value will change with changes in the equity and bond markets
and the value of the Underlying Funds and other securities in which it
invests. An investment in the Fund will entail more direct and indirect
costs and expenses than a direct investment in the Underlying Funds. For
example, the Fund indirectly pays a portion of the expenses (including
operating expenses and management fees) incurred by the Underlying
Funds. |
∎ |
Affiliated Fund
Risk — In managing the Fund, BFA will have authority to
select and substitute underlying funds and ETFs. BFA may be subject to
potential conflicts of interest in selecting underlying funds and ETFs
because the fees paid to BFA by some underlying funds and ETFs are higher
than the fees paid by other underlying funds and ETFs. However, BFA is a
fiduciary to the Fund and is legally obligated to act in the Fund’s best
interests when selecting underlying funds and ETFs. If an underlying fund
or ETF holds interests in an affiliated fund, the Fund may be prohibited
from purchasing shares of that underlying fund or
ETF. |
∎ |
Retirement
Income Risk — The Fund does not provide a guarantee that
sufficient capital appreciation will be achieved to provide adequate
income at and through retirement. The Fund also does not ensure that you
will have assets in your account sufficient to cover your retirement
expenses or that you will have enough saved to be able to retire in the
target year identified in the Fund’s name; this will depend on the amount
of money you have invested in the Fund, the length of time you have held
your investment, the returns of the markets over time, the amount you
spend in retirement, and your other assets and income
sources. |
∎ |
Derivatives
Risk — The Fund’s use of derivatives may increase its costs,
reduce the Fund’s returns and/or increase volatility. Derivatives involve
significant risks,
including: |
∎ |
Leverage
Risk — Some transactions may give rise to a form of economic
leverage. These transactions may include, among others, derivatives, and
may expose the Fund to greater risk and increase its costs. The use of
leverage may cause the Fund to liquidate portfolio positions when it may
not be advantageous to do so to satisfy its obligations or to meet the
applicable requirements of the Investment Company Act of 1940, as amended,
and the rules thereunder. Increases and decreases in the value of the
Fund’s portfolio will be magnified when the Fund uses
leverage. |
∎ |
Asset
Class Risk — Securities and other
assets or financial instruments in the Underlying Index of an Underlying
Fund or in an Underlying Fund’s portfolio may underperform in comparison
to the general financial markets, a particular financial market or other
asset classes. |
∎ |
Authorized
Participant Concentration Risk — Only an authorized
participant may engage in creation or redemption transactions directly
with an ETF, and none of those authorized participants is obligated to
engage in creation and/ or redemption transactions. The Underlying Funds
that are ETFs have a limited number of institutions that may act as
authorized participants on an agency basis (i.e., on behalf of other
market participants). To the extent that authorized participants exit the
business or are unable to proceed with creation or redemption orders with
respect to an ETF and no other authorized participant is able to step
forward to create or redeem, the ETF shares may be more likely to trade at
a premium or discount to net asset value and possibly face trading halts
or delisting. Authorized participant concentration risk may be heightened
for ETFs that invest in securities issued by non‑U.S. issuers or other
securities or instruments that have lower trading
volumes. |
∎ |
Collateralized
Debt Obligations Risk — In addition to the typical risks
associated with fixed-income securities and asset-backed securities,
collateralized debt obligations (“CDOs”), including collateralized loan
obligations, carry additional risks including, but not limited to:
(i) the possibility that distributions from collateral securities
will not be adequate to make interest or other payments; (ii) the
risk that the collateral may default or decline in value or be downgraded,
if rated by a nationally recognized statistical rating organization;
(iii) the Fund may invest in tranches of CDOs that are subordinate to
other tranches; (iv) the structure and complexity of the transaction
and the legal documents could lead to disputes among investors regarding
the characterization of proceeds; (v) the investment return achieved
by the Fund could be significantly different than those predicted by
financial models; (vi) the lack of a readily available secondary
market for CDOs; (vii) the risk of forced “fire sale” liquidation due
to technical defaults such as coverage test failures; and (viii) the
CDO’s manager may perform
poorly. |
∎ |
Commodities
Related Investments Risk — Exposure to the commodities
markets may subject the Fund to greater volatility than investments in
traditional securities. The value of commodity-linked derivative
investments may be affected by changes in overall market movements,
commodity index volatility, changes in inflation, interest rates, or
factors affecting a particular industry or commodity, such as drought,
floods, weather, embargoes, tariffs and international economic, political
and regulatory developments. |
∎ |
Concentration
Risk — To the extent that the Fund or an Underlying Fund is
concentrated in the securities of companies, a particular market,
industry, group of industries, sector or asset class, country, region or
group of countries, the Fund or that Underlying Fund may be adversely
affected by the performance of those securities, may be subject to
increased price volatility and may be more susceptible to adverse
economic, market, political or regulatory occurrences affecting that
market, industry, group of industries, sector or asset class, country,
region or group of countries. |
∎ |
Convertible
Securities Risk — The market value of a convertible security
performs like that of a regular debt security; that is, if market interest
rates rise, the value of a convertible security usually falls. In
addition, convertible securities are subject to the risk that the issuer
will not be able to pay interest, principal or dividends when due, and
their market value may change based on changes in the issuer’s credit
rating or the market’s perception of the issuer’s creditworthiness. Since
it derives a portion of its value from the common stock into which it may
be converted, a convertible security is also subject to the same types of
market and issuer risks that apply to the underlying common stock,
including the potential for increased volatility in the price of the
convertible security. |
∎ |
Corporate Loans
Risk — Commercial banks and other financial institutions or
institutional investors make corporate loans to companies that need
capital to grow or restructure. Borrowers generally pay interest on
corporate loans at rates that change in response to changes in market
interest rates such as the Secured Overnight Financing Rate (“SOFR”), the
London Interbank Offered Rate (“LIBOR”) or the prime rates of U.S. banks.
As a result, the value of corporate loan investments is generally less
exposed to the adverse effects of shifts in market interest rates than
investments that pay a fixed rate of interest. The market for corporate
loans may be subject to irregular trading activity and wide bid/ask
spreads. In addition, transactions in corporate loans may settle on a
delayed basis. As a result, the proceeds from the sale of corporate loans
may not be readily available to make additional investments or to meet the
Fund’s redemption obligations. To the extent the extended settlement
process gives rise to short-term liquidity needs, the Fund may hold
additional cash, sell investments or temporarily borrow from banks and
other lenders. |
∎ |
Counterparty
Risk — The counterparty to an over‑the‑counter derivatives
contract or a borrower of the Fund’s securities may be unable or unwilling
to make timely principal, interest or settlement payments, or otherwise to
honor its obligations. Any such failure to honor its obligations may cause
significant losses to the Fund. |
∎ |
Depositary
Receipts Risk — Depositary receipts are generally subject to
the same risks as the foreign securities that they evidence or into which
they may be converted. In addition to investment risks associated with the
underlying issuer, depositary receipts expose the Fund to additional risks
associated with the non‑uniform terms that apply to depositary receipt
programs, credit exposure to the depository bank and to the sponsors and
other parties with whom the depository bank establishes the programs,
currency risk and the risk of an illiquid market for depositary
receipts. The issuers of unsponsored depositary receipts are not
obligated to disclose information that is, in the United States,
considered material. Therefore, there may be less information available
regarding these issuers and there may not be a correlation between such
information and the market value of the depositary receipts. While
depositary receipts provide an alternative to directly purchasing
underlying foreign securities in their respective markets and currencies,
they continue to be subject to many of the risks associated with investing
directly in foreign securities, including political, economic, and
currency risk. |
∎ |
Distressed
Securities Risk — Distressed securities are speculative and
involve substantial risks in addition to the risks of investing in junk
bonds. The Fund will generally not receive interest payments on the
distressed securities and may incur costs to protect its investment. In
addition, distressed securities involve the substantial risk that
principal will not be repaid. These securities may present a substantial
risk of default or may be in default at the time of investment. The Fund
may incur additional expenses to the extent it is required to seek
recovery upon a default in the payment of principal of or interest on its
portfolio holdings. In any reorganization or liquidation proceeding
relating to a portfolio company, the Fund may lose its entire investment
or may be required to accept cash or securities with a value less than its
original investment. Distressed securities and any securities received in
an exchange for such securities may be subject to restrictions on
resale. |
∎ |
Dollar Rolls
Risk — Dollar rolls involve the risk that the market value
of the securities that the Fund is committed to buy may decline below the
price of the securities the Fund has sold. These transactions may involve
leverage. |
∎ |
Emerging
Markets Risk — Emerging markets are riskier than more
developed markets because they tend to develop unevenly and may never
fully develop. Investments in emerging markets may be considered
speculative. Emerging markets are more likely to experience hyperinflation
and currency devaluations, which adversely affect returns to U.S.
investors. In addition, many emerging securities markets have far lower
trading volumes and less liquidity than developed
markets. |
∎ |
Foreign
Securities Risk — Foreign investments often involve special
risks not present in U.S. investments that can increase the chances that
the Fund will lose money. These risks
include: |
∎ |
The
Fund generally holds its foreign securities and cash in foreign banks and
securities depositories, which may be recently organized or new to the
foreign custody business and may be subject to only limited or no
regulatory oversight. |
∎ |
Changes
in foreign currency exchange rates can affect the value of the Fund’s
portfolio. |
∎ |
The
economies of certain foreign markets may not compare favorably with the
economy of the United States with respect to such issues as growth of
gross national product, reinvestment of capital, resources and balance of
payments position. |
∎ |
The
governments of certain countries, or the U.S. Government with respect to
certain countries, may prohibit or impose substantial restrictions through
capital controls and/or sanctions on foreign investments in the capital
markets or certain industries in those countries, which may prohibit or
restrict the ability to own or transfer currency, securities, derivatives
or other assets. |
∎ |
Many
foreign governments do not supervise and regulate stock exchanges, brokers
and the sale of securities to the same extent as does the United States
and may not have laws to protect investors that are comparable to U.S.
securities laws. |
∎ |
Settlement
and clearance procedures in certain foreign markets may result in delays
in payment for or delivery of securities not typically associated with
settlement and clearance of U.S.
investments. |
∎ |
The
Fund’s claims to recover foreign withholding taxes may not be successful,
and if the likelihood of recovery of foreign withholding taxes materially
decreases, due to, for example, a change in tax regulation or approach in
the foreign country, accruals in the Fund’s net asset value for such
refunds may be written down partially or in full, which will adversely
affect the Fund’s net asset
value. |
∎ |
The
European financial markets have recently experienced volatility and
adverse trends due to concerns about economic downturns in, or rising
government debt levels of, several European countries as well as acts of
war in the region. These events may spread to other countries in Europe
and may affect the value and liquidity of certain of the Fund’s
investments. |
∎ |
Geographic
Risk — A natural disaster could occur in a geographic region
in which the Fund invests, which could adversely affect the economy or the
business operations of companies in the specific geographic region,
causing an adverse impact on the Fund’s investments in, or which are
exposed to, the affected region. |
∎ |
High Portfolio
Turnover Risk — The Fund may engage in active and frequent
trading of its portfolio securities. High portfolio turnover (more than
100%) may result in increased transaction costs to the Fund, including
brokerage commissions, dealer mark‑ups and other transaction costs on the
sale of the securities and on reinvestment in other securities. The sale
of Fund portfolio securities may result in the realization and/or
distribution to shareholders of higher capital gains or losses as compared
to a fund with less active trading policies. These effects of higher than
normal portfolio turnover may adversely affect Fund
performance. |
∎ |
High Yield
Bonds Risk — Although junk bonds generally pay higher rates
of interest than investment grade bonds, junk bonds are high risk
investments that are considered speculative and may cause income and
principal losses for the Fund. |
∎ |
Income
Risk — Income risk is the risk that the Fund’s yield will
vary as short-term securities in its portfolio mature and the proceeds are
reinvested in securities with different interest
rates. |
∎ |
Indexed and
Inverse Securities Risk — Indexed and inverse securities
provide a potential return based on a particular index of value or
interest rates. The Fund’s return on these securities will be subject to
risk with respect to the value of the particular index. These securities
are subject to leverage risk and correlation risk. Certain indexed and
inverse securities have greater sensitivity to changes in interest rates
or index levels than other securities, and the Fund’s investment in such
instruments may decline significantly in value if interest rates or index
levels move in a way Fund management does not
anticipate. |
∎ |
Index-Related
Risk — There is no guarantee that an Underlying Fund’s
investment results will have a high degree of correlation to those of its
underlying index or that the Underlying Fund will achieve its investment
objective. Market disruptions or high volatility, other unusual market
circumstances and regulatory restrictions could have an adverse effect on
an Underlying Fund’s ability to adjust its exposure to the required levels
in order to track its underlying index. Errors in index data, index
computations or the construction of an underlying index in accordance with
its methodology may occur from time to time and may not be identified and
corrected by the index provider for a period of time or at all, which may
have an adverse impact on an Underlying Fund and its shareholders. Unusual
market conditions or other unforeseen circumstances (such as natural
disasters, political unrest or war) may impact the index provider or a
third-party data provider and could cause the index provider to postpone a
scheduled rebalance. This could cause an underlying index to vary from its
normal or expected
composition. |
∎ |
Inflation-Indexed Bonds Risk —
The principal value of an investment is not protected or otherwise
guaranteed by virtue of the Fund’s investments in inflation-indexed
bonds. |
∎ |
Investment
Style Risk — Under certain market conditions, growth
investments have performed better during the later stages of economic
expansion and value investments have performed better during periods of
economic |
recovery.
Therefore, these investment styles may over time go in and out of favor.
At times when an investment style used by the Fund or an Underlying Fund
is out of favor, the Fund may underperform other funds that use different
investment styles. |
∎ |
Issuer
Risk — Fund performance depends on the performance of
individual securities to which the Fund has exposure. Changes in the
financial condition or credit rating of an issuer of those securities may
cause the value of the securities to
decline. |
∎ |
Management
Risk — If a passively managed ETF does not fully replicate
the underlying index, it is subject to the risk that the manager’s
investment management strategy may not produce the intended
results. |
∎ |
Mezzanine
Securities Risk — Mezzanine securities carry the risk that
the issuer will not be able to meet its obligations and that the equity
securities purchased with the mezzanine investments may lose
value. |
∎ |
Model Risk
— The Fund seeks to pursue its investment objective by using
proprietary models that incorporate quantitative analysis. Investments
selected using these models may perform differently than as forecasted due
to the factors incorporated into the models and the weighting of each
factor, changes from historical trends, and issues in the construction and
implementation of the models (including, but not limited to, software
issues and other technological issues). There is no guarantee that
BlackRock’s use of these models will result in effective investment
decisions for the
Fund. |
∎ |
Mortgage- and
Asset-Backed Securities Risks — Mortgage- and asset-backed
securities represent interests in “pools” of mortgages or other assets,
including consumer loans or receivables held in trust. Mortgage- and
asset-backed securities are subject to credit, interest rate, prepayment
and extension risks. These securities also are subject to risk of default
on the underlying mortgage or asset, particularly during periods of
economic downturn. Small movements in interest rates (both increases and
decreases) may quickly and significantly reduce the value of certain
mortgage-backed securities. |
∎ |
Municipal
Securities Risks — Municipal securities risks include the
ability of the issuer to repay the obligation, the relative lack of
information about certain issuers of municipal securities, and the
possibility of future legislative changes which could affect the market
for and value of municipal securities. Budgetary constraints of local,
state, and federal governments upon which the issuers may be relying for
funding may also impact municipal securities. These risks
include: |
∎ |
National Closed
Market Trading Risk — To the extent that the underlying
securities and/or other assets held by an Underlying Fund that is an ETF
trade on foreign exchanges or in foreign markets that may be closed when
the securities exchange on which the Underlying Fund’s shares trade is
open, there are likely to be deviations
between |
the
current price of such an underlying security and the last quoted price for
the underlying security (i.e., an Underlying Fund’s quote from the closed
foreign market). The impact of a closed foreign market on an Underlying
Fund is likely to be greater where a large portion of the Underlying
Fund’s underlying securities and/or other assets trade on that closed
foreign market or when the foreign market is closed for unscheduled
reasons. These deviations could result in premiums or discounts to one or
more of the Underlying Funds’ net asset values that may be greater than
those experienced by other
ETFs. |
∎ |
“New Issues”
Risk — “New issues” are initial public offerings (“IPOs”) of
equity securities. Securities issued in IPOs have no trading history, and
information about the companies may be available for very limited periods.
In addition, the prices of securities sold in IPOs may be highly volatile
or may decline shortly after the
IPO. |
∎ |
Passive
Investment Risk — Because BFA does not select individual
companies in the underlying indexes for certain Underlying Funds, those
Underlying Funds may hold securities of companies that present risks that
an investment adviser researching individual securities might seek to
avoid. |
∎ |
Pay-in-kind
Bonds Risk — Similar to zero coupon obligations, pay-in-kind
bonds also carry additional risk as holders of these types of securities
realize no cash until the cash payment date unless a portion of such
securities is sold and, if the issuer defaults, the Fund may obtain no
return at all on its investment. The market price of pay-in-kind bonds is
affected by interest rate changes to a greater extent, and therefore tends
to be more volatile, than that of securities which pay interest in
cash. |
∎ |
Preferred
Securities Risk — Preferred securities may pay fixed or
adjustable rates of return. Preferred securities are subject to
issuer-specific and market risks applicable generally to equity
securities. In addition, a company’s preferred securities generally pay
dividends only after the company makes required payments to holders of its
bonds and other debt. For this reason, the value of preferred securities
will usually react more strongly than bonds and other debt to actual or
perceived changes in the company’s financial condition or prospects.
Preferred securities of smaller companies may be more vulnerable to
adverse developments than preferred securities of larger
companies. |
∎ |
Real
Estate-Related Securities Risk — The main risk of real
estate-related securities is that the value of the underlying real estate
may go down. Many factors may affect real estate values. These factors
include both the general and local economies, vacancy rates, changes in
rent schedules, tenant bankruptcies, the ability to re‑lease space under
expiring leases on attractive terms, the amount of new construction in a
particular area, the laws and regulations (including zoning, environmental
and tax laws) affecting real estate and the costs of owning, maintaining
and improving real estate. The availability of mortgage financing and
changes in interest rates may also affect real estate values. If the
Fund’s real estate-related investments are concentrated in one geographic
area or in one property type, the Fund will be particularly subject to the
risks associated with that area or property type. Many issuers of real
estate-related securities are highly leveraged, which increases the risk
to holders of such securities. The value of the securities the Fund buys
will not necessarily track the value of the underlying investments of the
issuers of such securities. |
∎ |
REIT Investment
Risk — Investments in REITs involve unique risks. REITs may
have limited financial resources, may trade less frequently and in limited
volume, may engage in dilutive offerings of securities and may be more
volatile than other securities. REIT issuers may also fail to maintain
their exemptions from investment company registration or fail to qualify
for the “dividends paid deduction” under the Internal Revenue Code of
1986, as amended (the “Internal Revenue Code”), which allows REITs to
reduce their corporate taxable income for dividends paid to their
shareholders. In addition, certain issuers of real estate-related
securities may have developed or commenced development on properties and
may develop additional properties in the future. Real estate development
involves significant risks in addition to those involved in the ownership
and operation of established properties. Real estate securities may have
limited diversification and are, therefore, subject to risks inherent in
operating and financing a limited number of projects. Real estate
securities are also subject to heavy cash flow dependency and defaults by
borrowers or tenants. |
∎ |
Representative
Sampling Risk — Representative sampling is a method of
indexing that involves investing in a representative sample of securities
that collectively have a similar investment profile to the index and
resemble the index in terms of risk factors and other key characteristics.
An ETF may or may not hold every security in the index. When an ETF
deviates from a full replication indexing strategy to utilize a
representative sampling strategy, the ETF is subject to an increased risk
of tracking error, in that the securities selected in the aggregate for
the ETF may not have an investment profile similar to those of its
index. |
∎ |
Repurchase
Agreements and Purchase and Sale Contracts Risk — If the
other party to a repurchase agreement or purchase and sale contract
defaults on its obligation under the agreement, the Fund may suffer delays
and incur costs or lose money in exercising its rights under the
agreement. If the seller fails to repurchase the security in either
situation and the market value of the security declines, the Fund may lose
money. |
∎ |
Reverse
Repurchase Agreements Risk — Reverse repurchase agreements
involve the sale of securities held by the Fund with an agreement to
repurchase the securities at an agreed-upon price, date and interest
payment. Reverse |
repurchase
agreements involve the risk that the other party may fail to return the
securities in a timely manner or at all. The Fund could lose money if it
is unable to recover the securities and the value of the collateral held
by the Fund, including the value of the investments made with cash
collateral, is less than the value of the securities. These events could
also trigger adverse tax consequences for the Fund. In addition, reverse
repurchase agreements involve the risk that the interest income earned in
the investment of the proceeds will be less than the interest
expense. |
∎ |
Risks of Loan
Assignments and Participations — As the purchaser of an
assignment, the Fund typically succeeds to all the rights and obligations
of the assigning institution and becomes a lender under the credit
agreement with respect to the debt obligation; however, the Fund may not
be able unilaterally to enforce all rights and remedies under the loan and
with regard to any associated collateral. Because assignments may be
arranged through private negotiations between potential assignees and
potential assignors, the rights and obligations acquired by the Fund as
the purchaser of an assignment may differ from, and be more limited than,
those held by the assigning lender. In addition, if the loan is
foreclosed, the Fund could become part owner of any collateral and could
bear the costs and liabilities of owning and disposing of the collateral.
The Fund may be required to pass along to a purchaser that buys a loan
from the Fund by way of assignment a portion of any fees to which the Fund
is entitled under the loan. In connection with purchasing participations,
the Fund generally will have no right to enforce compliance by the
borrower with the terms of the loan agreement relating to the loan, nor
any rights of set‑off against the borrower, and the Fund may not directly
benefit from any collateral supporting the loan in which it has purchased
the participation. As a result, the Fund will be subject to the credit
risk of both the borrower and the lender that is selling the
participation. In the event of the insolvency of the lender selling a
participation, the Fund may be treated as a general creditor of the lender
and may not benefit from any set‑off between the lender and the
borrower. |
∎ |
Second Lien
Loans Risk — Second lien loans generally are subject to
similar risks as those associated with investments in senior loans.
Because second lien loans are subordinated or unsecured and thus lower in
priority of payment to senior loans, they are subject to the additional
risk that the cash flow of the borrower and property securing the loan or
debt, if any, may be insufficient to meet scheduled payments after giving
effect to the senior secured obligations of the
borrower. |
∎ |
Senior Loans
Risk — There is less readily available, reliable information
about most senior loans than is the case for many other types of
securities. An economic downturn generally leads to a higher non‑payment
rate, and a senior loan may lose significant value before a default
occurs. Moreover, any specific collateral used to secure a senior loan may
decline in value or become illiquid, which would adversely affect the
senior loan’s value. No active trading market may exist for certain senior
loans, which may impair the ability of the Fund to realize full value in
the event of the need to sell a senior loan and which may make it
difficult to value senior loans. Although senior loans in which the Fund
will invest generally will be secured by specific collateral, there can be
no assurance that liquidation of such collateral would satisfy the
borrower’s obligation in the event of non‑payment of scheduled interest or
principal or that such collateral could be readily liquidated. To the
extent that a senior loan is collateralized by stock in the borrower or
its subsidiaries, such stock may lose all of its value in the event of the
bankruptcy of the borrower. Uncollateralized senior loans involve a
greater risk of loss. |
∎ |
Shares of an
ETF May Trade at Prices Other Than Net Asset Value — Shares
of an ETF trade on exchanges at prices at, above or below their most
recent net asset value (“NAV”). The per share net asset value of an ETF is
calculated at the end of each business day and fluctuates with changes in
the market value of the ETF’s holdings since the most recent calculation.
The trading prices of an ETF’s shares fluctuate continuously throughout
trading hours based on market supply and demand rather than net asset
value. The trading prices of an ETF’s shares may deviate significantly
from net asset value during periods of market volatility. Any of these
factors may lead to an ETF’s shares trading at a premium or discount to
net asset value. However, because shares can be created and redeemed in
creation units, which are aggregated blocks of shares that authorized
participants who have entered into agreements with the ETF’s distributor
can purchase or redeem directly from the ETF, at net asset value (unlike
shares of many closed‑end funds, which frequently trade at appreciable
discounts from, and sometimes at premiums to, their net asset values),
large discounts or premiums to the net asset value of an ETF are not
likely to be sustained over the long-term. While the creation/redemption
feature is designed to make it likely that an ETF’s shares normally trade
on exchanges at prices close to the ETF’s next calculated net asset value,
exchange prices are not expected to correlate exactly with an ETF’s net
asset value due to timing reasons as well as market supply and demand
factors. In addition, disruptions to creations and redemptions or the
existence of extreme market volatility may result in trading prices that
differ significantly from net asset value. If a shareholder purchases at a
time when the market price is at a premium to the net asset value or sells
at a time when the market price is at a discount to the net asset value,
the shareholder may sustain losses. The use of cash creations and
redemptions may also cause the ETFs’ shares to trade in the market at
greater bid-ask spreads or greater premiums or discounts to the ETFs’
NAV. |
∎ |
Short Sales
Risk — Because making short sales in securities that it does
not own exposes the Fund to the risks associated with those securities,
such short sales involve speculative exposure risk. The Fund will incur a
loss as a result of a short sale if the price of the security increases
between the date of the short sale and the date on which the Fund replaces
the security sold short. |
∎ |
Small and
Mid‑Capitalization Company Risk — Companies with small or
mid‑size market capitalizations will normally have more limited product
lines, markets and financial resources and will be dependent upon a more
limited management group than larger capitalized companies. In addition,
it is more difficult to get information on smaller companies, which tend
to be less well known, have shorter operating histories, do not have
significant ownership by large investors and are followed by relatively
few securities analysts. |
∎ |
Small Cap and
Emerging Growth Securities Risk — Small cap or emerging
growth companies may have limited product lines or markets. They may be
less financially secure than larger, more established companies. They may
depend on a more limited management group than larger capitalized
companies. |
∎ |
Sovereign Debt
Risk — Sovereign debt instruments are subject to the risk
that a governmental entity may delay or refuse to pay interest or repay
principal on its sovereign debt, due, for example, to cash flow problems,
insufficient foreign currency reserves, political considerations, the
relative size of the governmental entity’s debt position in relation to
the economy or the failure to put in place economic reforms required by
the International Monetary Fund or other multilateral
agencies. |
∎ |
Structured
Notes Risk — Structured notes and other related instruments
purchased by the Fund are generally privately negotiated debt obligations
where the principal and/or interest is determined by reference to the
performance of a specific asset, benchmark asset, market or interest rate
(“reference measure”). The purchase of structured notes exposes the Fund
to the credit risk of the issuer of the structured product. Structured
notes may be leveraged, increasing the volatility of each structured
note’s value relative to the change in the reference measure. Structured
notes may also be less liquid and more difficult to price accurately than
less complex securities and instruments or more traditional debt
securities. |
∎ |
Structured
Securities Risk — Because structured securities of the type
in which the Fund may invest typically involve no credit enhancement,
their credit risk generally will be equivalent to that of the underlying
instruments, index or reference obligation and will also be subject to
counterparty risk. The Fund may have the right to receive payments only
from the structured security, and generally does not have direct rights
against the issuer or the entity that sold the assets to be securitized.
In addition to the general risks associated with debt securities discussed
herein, structured securities carry additional risks, including, but not
limited to: the possibility that distributions from collateral securities
will not be adequate to make interest or other payments; the quality of
the collateral may decline in value or default; and the possibility that
the structured securities are subordinate to other classes. The Fund is
permitted to invest in a class of structured securities that is either
subordinated or unsubordinated to the right of payment of another class.
Subordinated structured securities typically have higher yields and
present greater risks than unsubordinated structured securities.
Structured securities are typically sold in private placement
transactions, and there currently is no active trading market for
structured securities. Structured securities are based upon the movement
of one or more factors, including currency exchange rates, interest rates,
reference bonds and stock indices, and changes in interest rates and
impact of these factors may cause significant price fluctuations.
Additionally, changes in the reference instrument or security may cause
the interest rate on the structured security to be reduced to zero.
Certain issuers of such structured securities may be deemed to be
“investment companies” as defined in the Investment Company Act. As a
result, the Fund’s investment in such securities may be limited by certain
investment restrictions contained in the Investment Company
Act. |
∎ |
Supranational
Entities Risk — The Fund may invest in obligations issued or
guaranteed by the World Bank. The government members, or “stockholders,”
usually make initial capital contributions to the World Bank and in many
cases are committed to make additional capital contributions if the World
Bank is unable to repay its borrowings. There is no guarantee that one or
more stockholders of the World Bank will continue to make any necessary
additional capital contributions. If such contributions are not made, the
entity may be unable to pay interest or repay principal on its debt
securities, and the Fund may lose money on such
investments. |
∎ |
Tender Option
Bonds and Related Securities Risk — The Fund’s participation
in tender option bond transactions may reduce the Fund’s returns and/or
increase volatility. Investments in tender option bond transactions expose
the Fund to counterparty risk and leverage risk. An investment in a tender
option bond transaction typically will involve greater risk than an
investment in a municipal fixed rate security, including the risk of loss
of principal. Distributions on residual inverse floating rate interest
tender option bonds (“TOB Residuals”) will bear an inverse relationship to
short-term municipal security interest rates. Distributions on TOB
Residuals paid to the Fund will be reduced or, in the extreme, eliminated
as short-term municipal interest rates rise and will increase when
short-term municipal interest rates fall. TOB Residuals generally will
underperform the market for fixed rate municipal securities in a rising
interest rate environment. The Fund may invest in beneficial interests in
a special purpose trust formed for the purpose of holding Municipal Bonds
contributed by one or more funds (a “TOB Trust”) on either a non‑recourse
or recourse basis. If the Fund invests in a TOB Trust on a recourse basis,
it could suffer losses in excess of the value of its TOB
Residuals. |
∎ |
Tracking Error
Risk — The Fund may be subject to tracking error, which is
the divergence of an Underlying Fund’s performance from that of its
underlying index. Tracking error may occur because of differences between
the securities (including shares of the Underlying Funds) and other
instruments held in an Underlying Fund’s portfolio and those included in
its underlying index, pricing differences (including, as applicable,
differences between a security’s price at the local market close and an
Underlying Fund’s valuation of a security at the time of
calculation |
of
an Underlying Fund’s NAV, differences in transaction costs, an Underlying
Fund’s holding of uninvested cash, differences in timing of the accrual of
or the valuation of dividends or other distributions, interest, the
requirements to maintain pass-through tax treatment, portfolio
transactions carried out to minimize the distribution of capital gains to
shareholders, changes to an underlying index and the cost to an Underlying
Fund of complying with various new or existing regulatory requirements,
among other reasons. These risks may be heightened during times of
increased market volatility or other unusual market conditions. In
addition, tracking error may result because a fund incurs fees and
expenses, while the Underlying Index does
not. |
∎ |
U.S. Government
Issuer Risk — Treasury obligations may differ in their
interest rates, maturities, times of issuance and other characteristics.
Obligations of U.S. Government agencies and authorities are supported by
varying degrees of credit but generally are not backed by the full faith
and credit of the U.S. Government. No assurance can be given that the U.S.
Government will provide financial support to its agencies and authorities
if it is not obligated by law to do
so. |
∎ |
U.S. Government
Mortgage-Related Securities Risk — There are a number of
important differences among the agencies and instrumentalities of the U.S.
Government that issue mortgage-related securities and among the securities
that they issue. Mortgage-related securities guaranteed by the Government
National Mortgage Association (“GNMA” or “Ginnie Mae”) are guaranteed as
to the timely payment of principal and interest by GNMA and such guarantee
is backed by the full faith and credit of the United States. GNMA
securities also are supported by the right of GNMA to borrow funds from
the U.S. Treasury to make payments under its guarantee. Mortgage-related
securities issued by Fannie Mae or Freddie Mac are solely the obligations
of Fannie Mae or Freddie Mac, as the case may be, and are not backed by or
entitled to the full faith and credit of the United States but are
supported by the right of the issuer to borrow from the
Treasury. |
∎ |
Variable and
Floating Rate Instrument Risk — Variable and floating rate
securities provide for periodic adjustment in the interest rate paid on
the securities. These securities may be subject to greater illiquidity
risk than other fixed income securities, meaning the absence of an active
market for these securities could make it difficult for the Fund to
dispose of them at any given
time. |
∎ |
Warrants Risk
— If the price of the underlying stock does not rise above
the exercise price before the warrant expires, the warrant generally
expires without any value and the Fund will lose any amount it paid for
the warrant. Thus, investments in warrants may involve substantially more
risk than investments in common stock. Warrants may trade in the same
markets as their underlying stock; however, the price of the warrant does
not necessarily move with the price of the underlying
stock. |
∎ |
When-Issued and
Delayed Delivery Securities and Forward Commitments Risk —
When-issued and delayed delivery securities and forward commitments
involve the risk that the security the Fund buys will lose value prior to
its delivery. There also is the risk that the security will not be issued
or that the other party to the transaction will not meet its obligation.
If this occurs, the Fund may lose both the investment opportunity for the
assets it set aside to pay for the security and any gain in the security’s
price. |
∎ |
Zero Coupon
Securities Risk —
While interest payments are not made on such securities, holders of such
securities are deemed to have received income (“phantom income”) annually,
notwithstanding that cash may not be received currently. The effect of
owning instruments that do not make current interest payments is that a
fixed yield is earned not only on the original investment but also, in
effect, on all discount accretion during the life of the obligations. This
implicit reinvestment of earnings at a fixed rate eliminates the risk of
being unable to invest distributions at a rate as high as the implicit
yield on the zero coupon bond, but at the same time eliminates the
holder’s ability to reinvest at higher rates in the future. For this
reason, some of these securities may be subject to substantially greater
price fluctuations during periods of changing market interest rates than
are comparable securities that pay interest currently. Longer term zero
coupon bonds are more exposed to interest rate risk than shorter term zero
coupon bonds. These investments benefit the issuer by mitigating its need
for cash to meet debt service, but also require a higher rate of return to
attract investors who are willing to defer receipt of
cash. |
|
1 Year | 5 Years | 10 Years | |||||||||
LifePath
Dynamic 2025 Fund — Class K Shares |
||||||||||||
Return
Before Taxes |
% | % | ||||||||||
Return
After Taxes on Distributions |
% | % | ||||||||||
Return
After Taxes on Distributions and Sale of Fund Shares |
% | % | ||||||||||
LifePath
Dynamic 2025 Fund Custom Benchmark (Reflects no deduction for fees, expenses or taxes) |
% | % | ||||||||||
Russell
1000®
Index (Reflects no deduction for fees, expenses or taxes) |
% | % |
Portfolio
Manager |
Portfolio Manager of the Fund Since | Title | ||
Philip
Green |
2016 | Managing Director of BlackRock, Inc. | ||
Chris
Chung, CFA |
2020 | Managing Director of BlackRock, Inc. | ||
Michael
Pensky, CFA |
2024 | Managing Director of BlackRock, Inc. |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
Class K Shares | ||||
Management
Fee1 |
|||||
Distribution
and/or Service (12b-1) Fees |
|||||
Other
Expenses1,2,3,4 |
|||||
Administration
Fees1 |
|||||
Independent
Expenses2,3,4 |
|||||
Acquired
Fund Fees and Expenses1,3 |
|||||
Total
Annual Fund Operating Expenses3 |
|||||
Fee
Waivers and/or Expense Reimbursements1,4 |
( |
||||
Total
Annual Fund Operating Expenses After Fee Waivers and/or Expense
Reimbursements1,4 |
1 | As
described in the “Management of the Funds” section of the Fund’s
prospectus beginning on page 199, BlackRock Advisors, LLC (“BAL”) and BFA
have contractually agreed to reimburse the 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 |
2 |
3 |
4 | Independent
Expenses consist of the Fund’s allocable portion of the fees and expenses
of the independent trustees of the Trust, counsel to such independent
trustees and the independent registered public accounting firm that
provides audit services to the Fund. BAL and BFA have contractually agreed
to reimburse, or provide offsetting credits to, the Fund for Independent
Expenses through June 30, 2034. After giving effect to such contractual
arrangements, Independent Expenses will be 0.00%. Such contractual
arrangements may not be terminated prior to July 1, 2034 without the
consent of the Board of Trustees of the
Trust. |
1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||
Class
K Shares |
$ | $ | $ | $ |
Years Until Retirement | Equity Funds (includes REITs)1 |
Fixed‑Income Funds1 | ||||||||
45 |
99 | % | 1 | % | ||||||
40 |
99 | % | 1 | % | ||||||
35 |
99 | % | 1 | % | ||||||
30 |
96 | % | 4 | % | ||||||
25 |
89 | % | 11 | % | ||||||
20 |
79 | % | 21 | % | ||||||
15 |
68 | % | 32 | % | ||||||
10 |
56 | % | 44 | % | ||||||
5 |
43 | % | 57 | % | ||||||
0 |
40 | % | 60 | % | ||||||
1 BFA may adjust the
allocation to equity and fixed-income in the Fund, based on an assessment
of the current market conditions and the potential contribution of each
asset class to the expected risk and return characteristics of the Fund.
In general, the adjustments will be limited to +/- 10% relative to the
target allocations. |
|
∎ |
Equity
Securities Risk — Stock markets are volatile. The price of
equity securities fluctuates based on changes in a company’s financial
condition and overall market and economic
conditions. |
∎ |
Debt Securities
Risk — Debt securities, such as bonds, involve risks, such
as credit risk, interest rate risk, extension risk, and prepayment risk,
each of which are described in further detail
below: |
∎ |
Allocation
Risk — The Fund’s ability to achieve its investment
objective depends upon BFA’S skill in determining the Fund’s strategic
asset class allocation and in selecting the best mix of Underlying Funds
and direct investments. There is a risk that BFA’s evaluations and
assumptions regarding asset classes or Underlying Funds may be incorrect
in view of actual market conditions. In addition, the asset allocation or
the combination of Underlying Funds determined by BFA could result in
underperformance as compared to funds with similar investment objectives
and strategies. |
∎ |
Market Risk and
Selection Risk — Market risk is the risk that one or more
markets in which the Fund invests will go down in value, including the
possibility that the markets will go down sharply and unpredictably. The
value of a security or other asset may decline due to changes in general
market conditions, economic trends or events that are not specifically
related to the issuer of the security or other asset, or factors that
affect a particular issuer or issuers, exchange, country, group of
countries, region, market, industry, group of industries, sector or asset
class. Local, regional or global events such as war, acts of terrorism,
the spread of infectious illness or other public health issues like
pandemics or epidemics, recessions, or other events could have a
significant impact on the Fund and its investments. Selection risk is the
risk that the securities selected by Fund management will underperform
the |
markets,
the relevant indices or the securities selected by other funds with
similar investment objectives and investment strategies. This means you
may lose
money. |
∎ |
Investments in
Underlying Funds Risk — The Fund’s investments are
concentrated in Underlying Funds, so the Fund’s investment performance is
directly related to the performance of the Underlying Funds. The Fund’s
net asset value will change with changes in the equity and bond markets
and the value of the Underlying Funds and other securities in which it
invests. An investment in the Fund will entail more direct and indirect
costs and expenses than a direct investment in the Underlying Funds. For
example, the Fund indirectly pays a portion of the expenses (including
operating expenses and management fees) incurred by the Underlying
Funds. |
∎ |
Affiliated Fund
Risk — In managing the Fund, BFA will have authority to
select and substitute underlying funds and ETFs. BFA may be subject to
potential conflicts of interest in selecting underlying funds and ETFs
because the fees paid to BFA by some underlying funds and ETFs are higher
than the fees paid by other underlying funds and ETFs. However, BFA is a
fiduciary to the Fund and is legally obligated to act in the Fund’s best
interests when selecting underlying funds and ETFs. If an underlying fund
or ETF holds interests in an affiliated fund, the Fund may be prohibited
from purchasing shares of that underlying fund or
ETF. |
∎ |
Retirement
Income Risk — The Fund does not provide a guarantee that
sufficient capital appreciation will be achieved to provide adequate
income at and through retirement. The Fund also does not ensure that you
will have assets in your account sufficient to cover your retirement
expenses or that you will have enough saved to be able to retire in the
target year identified in the Fund’s name; this will depend on the amount
of money you have invested in the Fund, the length of time you have held
your investment, the returns of the markets over time, the amount you
spend in retirement, and your other assets and income
sources. |
∎ |
Derivatives
Risk — The Fund’s use of derivatives may increase its costs,
reduce the Fund’s returns and/or increase volatility. Derivatives involve
significant risks,
including: |
∎ |
Leverage
Risk — Some transactions may give rise to a form of economic
leverage. These transactions may include, among others, derivatives, and
may expose the Fund to greater risk and increase its costs. The use of
leverage may cause the Fund to liquidate portfolio positions when it may
not be advantageous to do so to satisfy its obligations or to meet the
applicable requirements of the Investment Company Act of 1940, as amended,
and the rules thereunder. Increases and decreases in the value of the
Fund’s portfolio will be magnified when the Fund uses
leverage. |
∎ |
Asset
Class Risk — Securities and other
assets or financial instruments in the Underlying Index of an Underlying
Fund or in an Underlying Fund’s portfolio may underperform in comparison
to the general financial markets, a particular financial market or other
asset classes. |
∎ |
Authorized
Participant Concentration Risk — Only an authorized
participant may engage in creation or redemption transactions directly
with an ETF, and none of those authorized participants is obligated to
engage in creation and/ or redemption transactions. The Underlying Funds
that are ETFs have a limited number of institutions that may act as
authorized participants on an agency basis (i.e., on behalf of other
market participants). To the extent that authorized participants exit the
business or are unable to proceed with creation or redemption orders with
respect to an ETF and no other authorized participant is able to step
forward to create or redeem, the ETF shares may be more likely to trade at
a premium or discount to net asset value and possibly face trading halts
or delisting. Authorized participant concentration risk may be heightened
for ETFs that invest in securities issued by non‑U.S. issuers or other
securities or instruments that have lower trading
volumes. |
∎ |
Collateralized
Debt Obligations Risk — In addition to the typical risks
associated with fixed-income securities and asset-backed securities,
collateralized debt obligations (“CDOs”), including collateralized loan
obligations, carry additional risks including, but not limited to:
(i) the possibility that distributions from collateral securities
will not be adequate to make interest or other payments; (ii) the
risk that the collateral may default or decline in value or be downgraded,
if rated by a nationally recognized statistical rating organization;
(iii) the Fund may invest in tranches of CDOs that are subordinate to
other tranches; (iv) the structure and complexity of the transaction
and the legal documents could lead to disputes among investors regarding
the characterization of proceeds; (v) the investment return achieved
by the Fund could be significantly different than those predicted by
financial models; (vi) the lack of a readily available secondary
market for CDOs; (vii) the risk of forced “fire sale” liquidation due
to technical defaults such as coverage test failures; and (viii) the
CDO’s manager may perform
poorly. |
∎ |
Commodities
Related Investments Risk — Exposure to the commodities
markets may subject the Fund to greater volatility than investments in
traditional securities. The value of commodity-linked derivative
investments may be affected by changes in overall market movements,
commodity index volatility, changes in inflation, interest rates, or
factors affecting a particular industry or commodity, such as drought,
floods, weather, embargoes, tariffs and international economic, political
and regulatory developments. |
∎ |
Concentration
Risk — To the extent that the Fund or an Underlying Fund is
concentrated in the securities of companies, a particular market,
industry, group of industries, sector or asset class, country, region or
group of countries, the Fund or that Underlying Fund may be adversely
affected by the performance of those securities, may be subject to
increased price volatility and may be more susceptible to adverse
economic, market, political or regulatory occurrences affecting that
market, industry, group of industries, sector or asset class, country,
region or group of countries. |
∎ |
Convertible
Securities Risk — The market value of a convertible security
performs like that of a regular debt security; that is, if market interest
rates rise, the value of a convertible security usually falls. In
addition, convertible securities are subject to the risk that the issuer
will not be able to pay interest, principal or dividends when due, and
their market value may change based on changes in the issuer’s credit
rating or the market’s perception of the issuer’s creditworthiness. Since
it derives a portion of its value from the common stock into which it may
be converted, a convertible security is also subject to the same types of
market and issuer risks that apply to the underlying common stock,
including the potential for increased volatility in the price of the
convertible security. |
∎ |
Corporate Loans
Risk — Commercial banks and other financial institutions or
institutional investors make corporate loans to companies that need
capital to grow or restructure. Borrowers generally pay interest on
corporate loans at rates that change in response to changes in market
interest rates such as the Secured Overnight Financing Rate (“SOFR”), the
London Interbank Offered Rate (“LIBOR”) or the prime rates of U.S. banks.
As a result, the value of corporate loan investments is generally less
exposed to the adverse effects of shifts in market interest rates than
investments that pay a fixed rate of interest. The market for corporate
loans may be subject to irregular trading activity and wide bid/ask
spreads. In addition, transactions in corporate loans may settle on a
delayed basis. As a |
result,
the proceeds from the sale of corporate loans may not be readily available
to make additional investments or to meet the Fund’s redemption
obligations. To the extent the extended settlement process gives rise to
short-term liquidity needs, the Fund may hold additional cash, sell
investments or temporarily borrow from banks and other
lenders. |
∎ |
Counterparty
Risk — The counterparty to an over‑the‑counter derivatives
contract or a borrower of the Fund’s securities may be unable or unwilling
to make timely principal, interest or settlement payments, or otherwise to
honor its obligations. Any such failure to honor its obligations may cause
significant losses to the Fund. |
∎ |
Depositary
Receipts Risk — Depositary receipts are generally subject to
the same risks as the foreign securities that they evidence or into which
they may be converted. In addition to investment risks associated with the
underlying issuer, depositary receipts expose the Fund to additional risks
associated with the non‑uniform terms that apply to depositary receipt
programs, credit exposure to the depository bank and to the sponsors and
other parties with whom the depository bank establishes the programs,
currency risk and the risk of an illiquid market for depositary
receipts. The issuers of unsponsored depositary receipts are not
obligated to disclose information that is, in the United States,
considered material. Therefore, there may be less information available
regarding these issuers and there may not be a correlation between such
information and the market value of the depositary receipts. While
depositary receipts provide an alternative to directly purchasing
underlying foreign securities in their respective markets and currencies,
they continue to be subject to many of the risks associated with investing
directly in foreign securities, including political, economic, and
currency risk. |
∎ |
Distressed
Securities Risk — Distressed securities are speculative and
involve substantial risks in addition to the risks of investing in junk
bonds. The Fund will generally not receive interest payments on the
distressed securities and may incur costs to protect its investment. In
addition, distressed securities involve the substantial risk that
principal will not be repaid. These securities may present a substantial
risk of default or may be in default at the time of investment. The Fund
may incur additional expenses to the extent it is required to seek
recovery upon a default in the payment of principal of or interest on its
portfolio holdings. In any reorganization or liquidation proceeding
relating to a portfolio company, the Fund may lose its entire investment
or may be required to accept cash or securities with a value less than its
original investment. Distressed securities and any securities received in
an exchange for such securities may be subject to restrictions on
resale. |
∎ |
Dollar Rolls
Risk — Dollar rolls involve the risk that the market value
of the securities that the Fund is committed to buy may decline below the
price of the securities the Fund has sold. These transactions may involve
leverage. |
∎ |
Emerging
Markets Risk — Emerging markets are riskier than more
developed markets because they tend to develop unevenly and may never
fully develop. Investments in emerging markets may be considered
speculative. Emerging markets are more likely to experience hyperinflation
and currency devaluations, which adversely affect returns to U.S.
investors. In addition, many emerging securities markets have far lower
trading volumes and less liquidity than developed
markets. |
∎ |
Foreign
Securities Risk — Foreign investments often involve special
risks not present in U.S. investments that can increase the chances that
the Fund will lose money. These risks
include: |
∎ |
The
Fund generally holds its foreign securities and cash in foreign banks and
securities depositories, which may be recently organized or new to the
foreign custody business and may be subject to only limited or no
regulatory oversight. |
∎ |
Changes
in foreign currency exchange rates can affect the value of the Fund’s
portfolio. |
∎ |
The
economies of certain foreign markets may not compare favorably with the
economy of the United States with respect to such issues as growth of
gross national product, reinvestment of capital, resources and balance of
payments position. |
∎ |
The
governments of certain countries, or the U.S. Government with respect to
certain countries, may prohibit or impose substantial restrictions through
capital controls and/or sanctions on foreign investments in the capital
markets or certain industries in those countries, which may prohibit or
restrict the ability to own or transfer currency, securities, derivatives
or other assets. |
∎ |
Many
foreign governments do not supervise and regulate stock exchanges, brokers
and the sale of securities to the same extent as does the United States
and may not have laws to protect investors that are comparable to U.S.
securities laws. |
∎ |
Settlement
and clearance procedures in certain foreign markets may result in delays
in payment for or delivery of securities not typically associated with
settlement and clearance of U.S.
investments. |
∎ |
The
Fund’s claims to recover foreign withholding taxes may not be successful,
and if the likelihood of recovery of foreign withholding taxes materially
decreases, due to, for example, a change in tax regulation or approach in
the foreign country, accruals in the Fund’s net asset value for such
refunds may be written down partially or in full, which will adversely
affect the Fund’s net asset
value. |
∎ |
The
European financial markets have recently experienced volatility and
adverse trends due to concerns about economic downturns in, or rising
government debt levels of, several European countries as well as acts of
war in the region. These events may spread to other countries in Europe
and may affect the value and liquidity of certain of the Fund’s
investments. |
∎ |
Geographic
Risk — A natural disaster could occur in a geographic region
in which the Fund invests, which could adversely affect the economy or the
business operations of companies in the specific geographic region,
causing an adverse impact on the Fund’s investments in, or which are
exposed to, the affected region. |
∎ |
High Portfolio
Turnover Risk — The Fund may engage in active and frequent
trading of its portfolio securities. High portfolio turnover (more than
100%) may result in increased transaction costs to the Fund, including
brokerage commissions, dealer mark‑ups and other transaction costs on the
sale of the securities and on reinvestment in other securities. The sale
of Fund portfolio securities may result in the realization and/or
distribution to shareholders of higher capital gains or losses as compared
to a fund with less active trading policies. These effects of higher than
normal portfolio turnover may adversely affect Fund
performance. |
∎ |
High Yield
Bonds Risk — Although junk bonds generally pay higher rates
of interest than investment grade bonds, junk bonds are high risk
investments that are considered speculative and may cause income and
principal losses for the Fund. |
∎ |
Income
Risk — Income risk is the risk that the Fund’s yield will
vary as short-term securities in its portfolio mature and the proceeds are
reinvested in securities with different interest
rates. |
∎ |
Indexed and
Inverse Securities Risk — Indexed and inverse securities
provide a potential return based on a particular index of value or
interest rates. The Fund’s return on these securities will be subject to
risk with respect to the value of the particular index. These securities
are subject to leverage risk and correlation risk. Certain indexed and
inverse securities have greater sensitivity to changes in interest rates
or index levels than other securities, and the Fund’s investment in such
instruments may decline significantly in value if interest rates or index
levels move in a way Fund management does not
anticipate. |
∎ |
Index-Related
Risk — There is no guarantee that an Underlying Fund’s
investment results will have a high degree of correlation to those of its
underlying index or that the Underlying Fund will achieve its investment
objective. Market disruptions or high volatility, other unusual market
circumstances and regulatory restrictions could have an adverse effect on
an Underlying Fund’s ability to adjust its exposure to the required levels
in order to track its underlying index. Errors in index data, index
computations or the construction of an underlying index in accordance with
its methodology may occur from time to time and may not be identified and
corrected by the index provider for a period of time or at all, which may
have an adverse impact on an Underlying Fund and its shareholders. Unusual
market conditions or other unforeseen circumstances (such as natural
disasters, political unrest or war) may impact the index provider or a
third-party data provider and could cause the index provider to postpone a
scheduled rebalance. This could cause an underlying index to vary from its
normal or expected
composition. |
∎ |
Inflation-Indexed Bonds Risk —
The principal value of an investment is not protected or otherwise
guaranteed by virtue of the Fund’s investments in inflation-indexed
bonds. |
∎ |
Investment
Style Risk — Under certain market conditions, growth
investments have performed better during the later stages of economic
expansion and value investments have performed better during periods of
economic recovery. Therefore, these investment styles may over time go in
and out of favor. At times when an investment style used by the Fund or an
Underlying Fund is out of favor, the Fund may underperform other funds
that use different investment
styles. |
∎ |
Issuer
Risk — Fund performance depends on the performance of
individual securities to which the Fund has exposure. Changes in the
financial condition or credit rating of an issuer of those securities may
cause the value of the securities to
decline. |
∎ |
Management
Risk — If a passively managed ETF does not fully replicate
the underlying index, it is subject to the risk that the manager’s
investment management strategy may not produce the intended
results. |
∎ |
Mezzanine
Securities Risk — Mezzanine securities carry the risk that
the issuer will not be able to meet its obligations and that the equity
securities purchased with the mezzanine investments may lose
value. |
∎ |
Model Risk
— The Fund seeks to pursue its investment objective by using
proprietary models that incorporate quantitative analysis. Investments
selected using these models may perform differently than as forecasted due
to the factors incorporated into the models and the weighting of each
factor, changes from historical trends, and issues in the construction and
implementation of the models (including, but not limited to, software
issues and other technological issues). There is no guarantee that
BlackRock’s use of these models will result in effective investment
decisions for the
Fund. |
∎ |
Mortgage- and
Asset-Backed Securities Risks — Mortgage- and asset-backed
securities represent interests in “pools” of mortgages or other assets,
including consumer loans or receivables held in trust. Mortgage- and
asset-backed securities are subject to credit, interest rate, prepayment
and extension risks. These securities also are subject to risk of default
on the underlying mortgage or asset, particularly during periods of
economic downturn. Small movements in interest rates (both increases and
decreases) may quickly and significantly reduce the value of certain
mortgage-backed securities. |
∎ |
Municipal
Securities Risks — Municipal securities risks include the
ability of the issuer to repay the obligation, the relative lack of
information about certain issuers of municipal securities, and the
possibility of future legislative changes which could affect the market
for and value of municipal securities. Budgetary constraints of local,
state, and federal governments upon which the issuers may be relying for
funding may also impact municipal securities. These risks
include: |
∎ |
National Closed
Market Trading Risk — To the extent that the underlying
securities and/or other assets held by an Underlying Fund that is an ETF
trade on foreign exchanges or in foreign markets that may be closed when
the securities exchange on which the Underlying Fund’s shares trade is
open, there are likely to be deviations between the current price of such
an underlying security and the last quoted price for the underlying
security (i.e., an Underlying Fund’s quote from the closed foreign
market). The impact of a closed foreign market on an Underlying Fund is
likely to be greater where a large portion of the Underlying Fund’s
underlying securities and/or other assets trade on that closed foreign
market or when the foreign market is closed for unscheduled reasons. These
deviations could result in premiums or discounts to one or more of the
Underlying Funds’ net asset values that may be greater than those
experienced by other ETFs. |
∎ |
“New Issues”
Risk — “New issues” are initial public offerings (“IPOs”) of
equity securities. Securities issued in IPOs have no trading history, and
information about the companies may be available for very limited periods.
In addition, the prices of securities sold in IPOs may be highly volatile
or may decline shortly after the
IPO. |
∎ |
Passive
Investment Risk — Because BFA does not select individual
companies in the underlying indexes for certain Underlying Funds, those
Underlying Funds may hold securities of companies that present risks that
an investment adviser researching individual securities might seek to
avoid. |
∎ |
Pay-in-kind
Bonds Risk — Similar to zero coupon obligations, pay-in-kind
bonds also carry additional risk as holders of these types of securities
realize no cash until the cash payment date unless a portion of such
securities is sold and, if the issuer defaults, the Fund may obtain no
return at all on its investment. The market price of pay-in-kind bonds is
affected by interest rate changes to a greater extent, and therefore tends
to be more volatile, than that of securities which pay interest in
cash. |
∎ |
Preferred
Securities Risk — Preferred securities may pay fixed or
adjustable rates of return. Preferred securities are subject to
issuer-specific and market risks applicable generally to equity
securities. In addition, a company’s preferred securities generally pay
dividends only after the company makes required payments to holders of its
bonds and other debt. For this reason, the value of preferred securities
will usually react more strongly than bonds and other debt to actual or
perceived changes in the company’s financial condition or prospects.
Preferred securities of smaller companies may be more vulnerable to
adverse developments than preferred securities of larger
companies. |
∎ |
Real
Estate-Related Securities Risk — The main risk of real
estate-related securities is that the value of the underlying real estate
may go down. Many factors may affect real estate values. These factors
include both the general and local economies, vacancy rates, changes in
rent schedules, tenant bankruptcies, the ability to re‑lease space under
expiring leases on attractive terms, the amount of new construction in a
particular area, the laws and regulations (including zoning, environmental
and tax laws) affecting real estate and the costs of owning, maintaining
and improving real estate. The availability of mortgage financing and
changes in interest rates may also affect real estate values. If the
Fund’s real estate-related investments are concentrated in one geographic
area or in one property type, the Fund will be particularly subject to the
risks associated with that area or property type. Many issuers of real
estate-related securities are highly leveraged, which increases the risk
to holders of such securities. The value of the securities the Fund buys
will not necessarily track the value of the underlying investments of the
issuers of such securities. |
∎ |
REIT Investment
Risk — Investments in REITs involve unique risks. REITs may
have limited financial resources, may trade less frequently and in limited
volume, may engage in dilutive offerings of securities and may be more
volatile than other securities. REIT issuers may also fail to maintain
their exemptions from investment company registration or fail to qualify
for the “dividends paid deduction” under the Internal Revenue Code of
1986, as amended (the “Internal Revenue Code”), which allows REITs to
reduce their corporate taxable income for dividends paid to their
shareholders. In addition, certain issuers of real estate-related
securities may have developed or commenced development on properties and
may develop additional properties in the future. Real estate development
involves significant risks in addition to those involved in the ownership
and operation of established properties. Real estate securities may have
limited diversification and are, therefore, subject to risks inherent in
operating and financing a limited number of projects. Real estate
securities are also subject to heavy cash flow dependency and defaults by
borrowers or tenants. |
∎ |
Representative
Sampling Risk — Representative sampling is a method of
indexing that involves investing in a representative sample of securities
that collectively have a similar investment profile to the index and
resemble the index in terms of risk factors and other key characteristics.
An ETF may or may not hold every security in the index. When an ETF
deviates from a full replication indexing strategy to utilize a
representative sampling strategy, the ETF is subject to an increased risk
of tracking error, in that the securities selected in the aggregate for
the ETF may not have an investment profile similar to those of its
index. |
∎ |
Repurchase
Agreements and Purchase and Sale Contracts Risk — If the
other party to a repurchase agreement or purchase and sale contract
defaults on its obligation under the agreement, the Fund may suffer delays
and incur costs or lose money in exercising its rights under the
agreement. If the seller fails to repurchase the security in either
situation and the market value of the security declines, the Fund may lose
money. |
∎ |
Reverse
Repurchase Agreements Risk — Reverse repurchase agreements
involve the sale of securities held by the Fund with an agreement to
repurchase the securities at an agreed-upon price, date and interest
payment. Reverse repurchase agreements involve the risk that the other
party may fail to return the securities in a timely manner or at all. The
Fund could lose money if it is unable to recover the securities and the
value of the collateral held by the Fund, including the value of the
investments made with cash collateral, is less than the value of the
securities. These events could also trigger adverse tax consequences for
the Fund. In addition, reverse repurchase agreements involve the risk that
the interest income earned in the investment of the proceeds will be less
than the interest expense. |
∎ |
Risks of Loan
Assignments and Participations — As the purchaser of an
assignment, the Fund typically succeeds to all the rights and obligations
of the assigning institution and becomes a lender under the credit
agreement with respect to the debt obligation; however, the Fund may not
be able unilaterally to enforce all rights and remedies under the loan and
with regard to any associated collateral. Because assignments may be
arranged through private negotiations between potential assignees and
potential assignors, the rights and obligations acquired by the Fund as
the purchaser of an assignment may differ from, and be more limited than,
those held by the assigning lender. In addition, if the loan is
foreclosed, the Fund could become part owner of any collateral and could
bear the costs and liabilities of owning and disposing of the collateral.
The Fund may be required to pass along to a purchaser that buys a loan
from the Fund by way of assignment a portion of any fees to which the Fund
is entitled under the loan. In connection with purchasing participations,
the Fund generally will have no right to enforce compliance by the
borrower with the terms of the loan agreement relating to the loan, nor
any rights of set‑off against the borrower, and the Fund may not directly
benefit from any collateral supporting the loan in which it has purchased
the participation. As a result, the Fund will be subject to the credit
risk of both the borrower and the lender that is selling the
participation. In the event of the insolvency of the lender selling a
participation, the Fund may be treated as a general creditor of the lender
and may not benefit from any set‑off between the lender and the
borrower. |
∎ |
Second Lien
Loans Risk — Second lien loans generally are subject to
similar risks as those associated with investments in senior loans.
Because second lien loans are subordinated or unsecured and thus lower in
priority of payment to senior loans, they are subject to the additional
risk that the cash flow of the borrower and property securing the loan or
debt, if any, may be insufficient to meet scheduled payments after giving
effect to the senior secured obligations of the
borrower. |
∎ |
Senior Loans
Risk — There is less readily available, reliable information
about most senior loans than is the case for many other types of
securities. An economic downturn generally leads to a higher non‑payment
rate, and a senior loan may lose significant value before a default
occurs. Moreover, any specific collateral used to secure a senior loan may
decline in value or become illiquid, which would adversely affect the
senior loan’s value. No active trading market may exist for certain senior
loans, which may impair the ability of the Fund to realize full value in
the event of the need to sell a senior loan and which may make it
difficult to value senior loans. Although senior loans in which the Fund
will invest generally will be secured by specific collateral, there can be
no assurance that liquidation of such collateral would satisfy the
borrower’s obligation in the event of non‑payment of scheduled interest or
principal or that such collateral could be readily liquidated. To the
extent that a senior loan is collateralized by stock in the borrower or
its subsidiaries, such stock may lose all of its value in the event of the
bankruptcy of the borrower. Uncollateralized senior loans involve a
greater risk of loss. |
∎ |
Shares of an
ETF May Trade at Prices Other Than Net Asset Value — Shares
of an ETF trade on exchanges at prices at, above or below their most
recent net asset value (“NAV”). The per share net asset value of an ETF is
calculated at the end of each business day and fluctuates with changes in
the market value of the ETF’s holdings since the most recent calculation.
The trading prices of an ETF’s shares fluctuate continuously throughout
trading hours based on market supply and demand rather than net asset
value. The trading prices of an ETF’s shares may deviate significantly
from net asset value during periods of market volatility. Any of these
factors may lead to an ETF’s shares trading at a premium or discount to
net asset value. However, because shares can be created and redeemed in
creation units, which are aggregated blocks of shares that authorized
participants who have entered into agreements with the ETF’s distributor
can purchase or redeem directly from the ETF, at net asset value (unlike
shares of many closed‑end funds, which frequently trade at appreciable
discounts from, and sometimes at premiums to, their net asset values),
large discounts or premiums to the net asset value of an ETF are not
likely to be sustained over the long-term. While the creation/redemption
feature is designed to make it likely that an ETF’s shares normally trade
on exchanges at prices close to the ETF’s next calculated net asset value,
exchange prices are not expected to correlate exactly with an ETF’s net
asset value due to timing reasons as well as market supply and demand
factors. In addition, disruptions to creations and redemptions or the
existence of extreme market volatility may result in trading prices that
differ significantly from net asset value. If a shareholder purchases at a
time when the market price is at a premium to the net asset value or sells
at a time when the market price is at a discount to the net asset value,
the shareholder may sustain losses. The use of cash creations and
redemptions may also cause the ETFs’ shares to trade in the market at
greater bid-ask spreads or greater premiums or discounts to the ETFs’
NAV. |
∎ |
Short Sales
Risk — Because making short sales in securities that it does
not own exposes the Fund to the risks associated with those securities,
such short sales involve speculative exposure risk. The Fund will incur a
loss as a result of a short sale if the price of the security increases
between the date of the short sale and the date on which the Fund replaces
the security sold short. |
∎ |
Small and
Mid‑Capitalization Company Risk — Companies with small or
mid‑size market capitalizations will normally have more limited product
lines, markets and financial resources and will be dependent upon a more
limited management group than larger capitalized companies. In addition,
it is more difficult to get information on smaller companies, which tend
to be less well known, have shorter operating histories, do not have
significant ownership by large investors and are followed by relatively
few securities analysts. |
∎ |
Small Cap and
Emerging Growth Securities Risk — Small cap or emerging
growth companies may have limited product lines or markets. They may be
less financially secure than larger, more established companies. They may
depend on a more limited management group than larger capitalized
companies. |
∎ |
Sovereign Debt
Risk — Sovereign debt instruments are subject to the risk
that a governmental entity may delay or refuse to pay interest or repay
principal on its sovereign debt, due, for example, to cash flow problems,
insufficient foreign currency reserves, political considerations, the
relative size of the governmental entity’s debt position in relation to
the economy or the failure to put in place economic reforms required by
the International Monetary Fund or other multilateral
agencies. |
∎ |
Structured
Notes Risk — Structured notes and other related instruments
purchased by the Fund are generally privately negotiated debt obligations
where the principal and/or interest is determined by reference to the
performance of a specific asset, benchmark asset, market or interest rate
(“reference measure”). The purchase of structured notes exposes the Fund
to the credit risk of the issuer of the structured product. Structured
notes may be leveraged, increasing the volatility of each structured
note’s value relative to the change in the reference measure. Structured
notes may also be less liquid and more difficult to price accurately than
less complex securities and instruments or more traditional debt
securities. |
∎ |
Structured
Securities Risk — Because structured securities of the type
in which the Fund may invest typically involve no credit enhancement,
their credit risk generally will be equivalent to that of the underlying
instruments, index or reference obligation and will also be subject to
counterparty risk. The Fund may have the right to receive payments only
from the structured security, and generally does not have direct rights
against the issuer or the entity that sold the assets to be securitized.
In addition to the general risks associated with debt securities discussed
herein, structured securities carry additional risks, including, but not
limited to: the possibility that distributions from collateral securities
will not be adequate to make interest or other payments; the quality of
the collateral may decline in value or default; and the possibility that
the structured securities are subordinate to other classes. The Fund is
permitted to invest in a class of structured securities that is either
subordinated or unsubordinated to the right of payment of another class.
Subordinated structured securities typically have higher yields and
present greater risks than unsubordinated structured securities.
Structured securities are typically sold in private placement
transactions, and there currently is no active trading market for
structured securities. Structured securities are based upon the movement
of one or more factors, including currency exchange rates, interest rates,
reference bonds and stock indices, and changes in interest rates and
impact of these factors may cause significant price fluctuations.
Additionally, changes in the reference instrument or security may cause
the interest rate on the structured security to be reduced to zero.
Certain issuers of such structured securities may be deemed to be
“investment companies” as defined in the Investment Company Act. As a
result, the Fund’s investment in such securities may be limited by certain
investment restrictions contained in the Investment Company
Act. |
∎ |
Supranational
Entities Risk — The Fund may invest in obligations issued or
guaranteed by the World Bank. The government members, or “stockholders,”
usually make initial capital contributions to the World Bank and in many
cases are committed to make additional capital contributions if the World
Bank is unable to repay its borrowings. There is no guarantee that one or
more stockholders of the World Bank will continue to make any necessary
additional capital contributions. If such contributions are not made, the
entity may be unable to pay interest or repay principal on its debt
securities, and the Fund may lose money on such
investments. |
∎ |
Tender Option
Bonds and Related Securities Risk — The Fund’s participation
in tender option bond transactions may reduce the Fund’s returns and/or
increase volatility. Investments in tender option bond transactions expose
the Fund to counterparty risk and leverage risk. An investment in a tender
option bond transaction typically will involve greater risk than an
investment in a municipal fixed rate security, including the risk of loss
of principal. Distributions on residual inverse floating rate interest
tender option bonds (“TOB Residuals”) will bear an inverse relationship to
short-term municipal security interest rates. Distributions on TOB
Residuals paid to the Fund will be reduced or, in the extreme, eliminated
as short-term municipal interest rates rise and will increase when
short-term municipal interest rates fall. TOB Residuals generally will
underperform the market for fixed rate municipal securities in a rising
interest rate environment. The Fund may invest in beneficial interests in
a special purpose trust formed for the purpose of holding Municipal Bonds
contributed by one or more funds (a “TOB Trust”) on either a non‑recourse
or recourse basis. If the Fund invests in a TOB Trust on a recourse basis,
it could suffer losses in excess of the value of its TOB
Residuals. |
∎ |
Tracking Error
Risk — The Fund may be subject to tracking error, which is
the divergence of an Underlying Fund’s performance from that of its
underlying index. Tracking error may occur because of differences between
the securities (including shares of the Underlying Funds) and other
instruments held in an Underlying Fund’s portfolio and those included in
its underlying index, pricing differences (including, as applicable,
differences between a security’s price at the local market close and an
Underlying Fund’s valuation of a security at the time of
calculation |
of
an Underlying Fund’s NAV, differences in transaction costs, an Underlying
Fund’s holding of uninvested cash, differences in timing of the accrual of
or the valuation of dividends or other distributions, interest, the
requirements to maintain pass-through tax treatment, portfolio
transactions carried out to minimize the distribution of capital gains to
shareholders, changes to an underlying index and the cost to an Underlying
Fund of complying with various new or existing regulatory requirements,
among other reasons. These risks may be heightened during times of
increased market volatility or other unusual market conditions. In
addition, tracking error may result because a fund incurs fees and
expenses, while the Underlying Index does
not. |
∎ |
U.S. Government
Issuer Risk — Treasury obligations may differ in their
interest rates, maturities, times of issuance and other characteristics.
Obligations of U.S. Government agencies and authorities are supported by
varying degrees of credit but generally are not backed by the full faith
and credit of the U.S. Government. No assurance can be given that the U.S.
Government will provide financial support to its agencies and authorities
if it is not obligated by law to do
so. |
∎ |
U.S. Government
Mortgage-Related Securities Risk — There are a number of
important differences among the agencies and instrumentalities of the U.S.
Government that issue mortgage-related securities and among the securities
that they issue. Mortgage-related securities guaranteed by the Government
National Mortgage Association (“GNMA” or “Ginnie Mae”) are guaranteed as
to the timely payment of principal and interest by GNMA and such guarantee
is backed by the full faith and credit of the United States. GNMA
securities also are supported by the right of GNMA to borrow funds from
the U.S. Treasury to make payments under its guarantee. Mortgage-related
securities issued by Fannie Mae or Freddie Mac are solely the obligations
of Fannie Mae or Freddie Mac, as the case may be, and are not backed by or
entitled to the full faith and credit of the United States but are
supported by the right of the issuer to borrow from the
Treasury. |
∎ |
Variable and
Floating Rate Instrument Risk — Variable and floating rate
securities provide for periodic adjustment in the interest rate paid on
the securities. These securities may be subject to greater illiquidity
risk than other fixed income securities, meaning the absence of an active
market for these securities could make it difficult for the Fund to
dispose of them at any given
time. |
∎ |
Warrants Risk
— If the price of the underlying stock does not rise above
the exercise price before the warrant expires, the warrant generally
expires without any value and the Fund will lose any amount it paid for
the warrant. Thus, investments in warrants may involve substantially more
risk than investments in common stock. Warrants may trade in the same
markets as their underlying stock; however, the price of the warrant does
not necessarily move with the price of the underlying
stock. |
∎ |
When-Issued and
Delayed Delivery Securities and Forward Commitments Risk —
When-issued and delayed delivery securities and forward commitments
involve the risk that the security the Fund buys will lose value prior to
its delivery. There also is the risk that the security will not be issued
or that the other party to the transaction will not meet its obligation.
If this occurs, the Fund may lose both the investment opportunity for the
assets it set aside to pay for the security and any gain in the security’s
price. |
∎ |
Zero Coupon
Securities Risk —
While interest payments are not made on such securities, holders of such
securities are deemed to have received income (“phantom income”) annually,
notwithstanding that cash may not be received currently. The effect of
owning instruments that do not make current interest payments is that a
fixed yield is earned not only on the original investment but also, in
effect, on all discount accretion during the life of the obligations. This
implicit reinvestment of earnings at a fixed rate eliminates the risk of
being unable to invest distributions at a rate as high as the implicit
yield on the zero coupon bond, but at the same time eliminates the
holder’s ability to reinvest at higher rates in the future. For this
reason, some of these securities may be subject to substantially greater
price fluctuations during periods of changing market interest rates than
are comparable securities that pay interest currently. Longer term zero
coupon bonds are more exposed to interest rate risk than shorter term zero
coupon bonds. These investments benefit the issuer by mitigating its need
for cash to meet debt service, but also require a higher rate of return to
attract investors who are willing to defer receipt of
cash. |
|
1 Year | 5 Years | 10 Years | |||||||||
LifePath
Dynamic 2030 Fund — Class K Shares |
||||||||||||
Return
Before Taxes |
% | % | % | |||||||||
Return
After Taxes on Distributions |
% | % | % | |||||||||
Return
After Taxes on Distributions and Sale of Fund Shares |
% | % | % | |||||||||
LifePath
Dynamic 2030 Fund Custom Benchmark (Reflects no deduction for fees, expenses or taxes) |
% | % | % | |||||||||
Russell
1000®
Index (Reflects no deduction for fees, expenses or taxes) |
% | % | % |
Portfolio
Manager |
Portfolio Manager of the Fund Since | Title | ||
Philip
Green |
2016 | Managing Director of BlackRock, Inc. | ||
Chris
Chung, CFA |
2020 | Managing Director of BlackRock, Inc. | ||
Michael
Pensky, CFA |
2024 | Managing Director of BlackRock, Inc. |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
Class K Shares | ||||
Management
Fee1 |
|||||
Distribution
and/or Service (12b-1) Fees |
|||||
Other
Expenses1,2,3,4 |
|||||
Administration
Fees1 |
|||||
Independent
Expenses2,3,4 |
|||||
Acquired
Fund Fees and Expenses1,3 |
|||||
Total
Annual Fund Operating Expenses3 |
|||||
Fee
Waivers and/or Expense Reimbursements1,4 |
( |
||||
Total
Annual Fund Operating Expenses After Fee Waivers and/or Expense
Reimbursements1,4 |
1 | As
described in the “Management of the Funds” section of the Fund’s
prospectus beginning on page 199, BlackRock Advisors, LLC (“BAL”) and BFA
have contractually agreed to reimburse the 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 |
2 |
3 |
4 | Independent
Expenses consist of the Fund’s allocable portion of the fees and expenses
of the independent trustees of the Trust, counsel to such independent
trustees and the independent registered public accounting firm that
provides audit services to the Fund. BAL and BFA have contractually agreed
to reimburse, or provide offsetting credits to, the Fund for Independent
Expenses through June 30, 2034. After giving effect to such contractual
arrangements, Independent Expenses will be 0.00%. Such contractual
arrangements may not be terminated prior to July 1, 2034 without the
consent of the Board of Trustees of the
Trust. |
1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||
Class
K Shares |
$ | $ | $ | $ |
Years Until Retirement | Equity Funds (includes REITs)1 |
Fixed‑Income Funds1 | ||||||||
45 |
99 | % | 1 | % | ||||||
40 |
99 | % | 1 | % | ||||||
35 |
99 | % | 1 | % | ||||||
30 |
96 | % | 4 | % | ||||||
25 |
89 | % | 11 | % | ||||||
20 |
79 | % | 21 | % | ||||||
15 |
68 | % | 32 | % | ||||||
10 |
56 | % | 44 | % | ||||||
5 |
43 | % | 57 | % | ||||||
0 |
40 | % | 60 | % | ||||||
1 BFA may adjust the
allocation to equity and fixed-income in the Fund, based on an assessment
of the current market conditions and the potential contribution of each
asset class to the expected risk and return characteristics of the Fund.
In general, the adjustments will be limited to +/- 10% relative to the
target allocations. |
|
∎ |
Equity
Securities Risk — Stock markets are volatile. The price of
equity securities fluctuates based on changes in a company’s financial
condition and overall market and economic
conditions. |
∎ |
Debt Securities
Risk — Debt securities, such as bonds, involve risks, such
as credit risk, interest rate risk, extension risk, and prepayment risk,
each of which are described in further detail
below: |
∎ |
Allocation
Risk — The Fund’s ability to achieve its investment
objective depends upon BFA’S skill in determining the Fund’s strategic
asset class allocation and in selecting the best mix of Underlying Funds
and direct investments. There is a risk that BFA’s evaluations and
assumptions regarding asset classes or Underlying Funds may be incorrect
in view of actual market conditions. In addition, the asset allocation or
the combination of Underlying Funds determined by BFA could result in
underperformance as compared to funds with similar investment objectives
and strategies. |
∎ |
Market Risk and
Selection Risk — Market risk is the risk that one or more
markets in which the Fund invests will go down in value, including the
possibility that the markets will go down sharply and unpredictably. The
value of a security or other asset may decline due to changes in general
market conditions, economic trends or events that are not specifically
related to the issuer of the security or other asset, or factors that
affect a particular issuer or issuers, exchange, country, group of
countries, region, market, industry, group of industries, sector or asset
class. Local, regional or global events such as war, acts of terrorism,
the spread of infectious illness or other public health issues like
pandemics or epidemics, recessions, or other events could have a
significant impact on the Fund and
its |
investments.
Selection risk is the risk that the securities selected by Fund management
will underperform the markets, the relevant indices or the securities
selected by other funds with similar investment objectives and investment
strategies. This means you may lose
money. |
∎ |
Investments in
Underlying Funds Risk — The Fund’s investments are
concentrated in Underlying Funds, so the Fund’s investment performance is
directly related to the performance of the Underlying Funds. The Fund’s
net asset value will change with changes in the equity and bond markets
and the value of the Underlying Funds and other securities in which it
invests. An investment in the Fund will entail more direct and indirect
costs and expenses than a direct investment in the Underlying Funds. For
example, the Fund indirectly pays a portion of the expenses (including
operating expenses and management fees) incurred by the Underlying
Funds. |
∎ |
Affiliated Fund
Risk — In managing the Fund, BFA will have authority to
select and substitute underlying funds and ETFs. BFA may be subject to
potential conflicts of interest in selecting underlying funds and ETFs
because the fees paid to BFA by some underlying funds and ETFs are higher
than the fees paid by other underlying funds and ETFs. However, BFA is a
fiduciary to the Fund and is legally obligated to act in the Fund’s best
interests when selecting underlying funds and ETFs. If an underlying fund
or ETF holds interests in an affiliated fund, the Fund may be prohibited
from purchasing shares of that underlying fund or
ETF. |
∎ |
Retirement
Income Risk — The Fund does not provide a guarantee that
sufficient capital appreciation will be achieved to provide adequate
income at and through retirement. The Fund also does not ensure that you
will have assets in your account sufficient to cover your retirement
expenses or that you will have enough saved to be able to retire in the
target year identified in the Fund’s name; this will depend on the amount
of money you have invested in the Fund, the length of time you have held
your investment, the returns of the markets over time, the amount you
spend in retirement, and your other assets and income
sources. |
∎ |
Derivatives
Risk — The Fund’s use of derivatives may increase its costs,
reduce the Fund’s returns and/or increase volatility. Derivatives involve
significant risks,
including: |
∎ |
Leverage
Risk — Some transactions may give rise to a form of economic
leverage. These transactions may include, among others, derivatives, and
may expose the Fund to greater risk and increase its costs. The use of
leverage may cause the Fund to liquidate portfolio positions when it may
not be advantageous to do so to satisfy its obligations or to meet the
applicable requirements of the Investment Company Act of 1940, as amended,
and the rules thereunder. Increases and decreases in the value of the
Fund’s portfolio will be magnified when the Fund uses
leverage. |
∎ |
Asset
Class Risk — Securities and other
assets or financial instruments in the Underlying Index of an Underlying
Fund or in an Underlying Fund’s portfolio may underperform in comparison
to the general financial markets, a particular financial market or other
asset classes. |
∎ |
Authorized
Participant Concentration Risk — Only an authorized
participant may engage in creation or redemption transactions directly
with an ETF, and none of those authorized participants is obligated to
engage in creation and/ or redemption transactions. The Underlying Funds
that are ETFs have a limited number of institutions that may act as
authorized participants on an agency basis (i.e., on behalf of other
market participants). To the extent that authorized participants exit the
business or are unable to proceed with creation or redemption orders with
respect to an ETF and no other authorized participant is able to step
forward to create or redeem, the ETF shares may be more likely to trade at
a premium or discount to net asset value and possibly face trading halts
or delisting. Authorized participant concentration risk may be heightened
for ETFs that invest in securities issued by non‑U.S. issuers or other
securities or instruments that have lower trading
volumes. |
∎ |
Collateralized
Debt Obligations Risk — In addition to the typical risks
associated with fixed-income securities and asset-backed securities,
collateralized debt obligations (“CDOs”), including collateralized loan
obligations, carry additional risks including, but not limited to:
(i) the possibility that distributions from collateral securities
will not be adequate to make interest or other payments; (ii) the
risk that the collateral may default or decline in value or be downgraded,
if rated by a nationally recognized statistical rating organization;
(iii) the Fund may invest in tranches of CDOs that are subordinate to
other tranches; (iv) the structure and complexity of the transaction
and the legal documents could lead to disputes among investors regarding
the characterization of proceeds; (v) the investment return achieved
by the Fund could be significantly different than those predicted by
financial models; (vi) the lack of a readily available secondary
market for CDOs; (vii) the risk of forced “fire sale” liquidation due
to technical defaults such as coverage test failures; and (viii) the
CDO’s manager may perform
poorly. |
∎ |
Commodities
Related Investments Risk — Exposure to the commodities
markets may subject the Fund to greater volatility than investments in
traditional securities. The value of commodity-linked derivative
investments may be affected by changes in overall market movements,
commodity index volatility, changes in inflation, interest rates, or
factors affecting a particular industry or commodity, such as drought,
floods, weather, embargoes, tariffs and international economic, political
and regulatory developments. |
∎ |
Concentration
Risk — To the extent that the Fund or an Underlying Fund is
concentrated in the securities of companies, a particular market,
industry, group of industries, sector or asset class, country, region or
group of countries, the Fund or that Underlying Fund may be adversely
affected by the performance of those securities, may be subject to
increased price volatility and may be more susceptible to adverse
economic, market, political or regulatory occurrences affecting that
market, industry, group of industries, sector or asset class, country,
region or group of countries. |
∎ |
Convertible
Securities Risk — The market value of a convertible security
performs like that of a regular debt security; that is, if market interest
rates rise, the value of a convertible security usually falls. In
addition, convertible securities are subject to the risk that the issuer
will not be able to pay interest, principal or dividends when due, and
their market value may change based on changes in the issuer’s credit
rating or the market’s perception of the issuer’s creditworthiness. Since
it derives a portion of its value from the common stock into which it may
be converted, a convertible security is also subject to the same types of
market and issuer risks that apply to the underlying common stock,
including the potential for increased volatility in the price of the
convertible security. |
∎ |
Corporate Loans
Risk — Commercial banks and other financial institutions or
institutional investors make corporate loans to companies that need
capital to grow or restructure. Borrowers generally pay interest on
corporate loans at rates that change in response to changes in market
interest rates such as the Secured Overnight Financing Rate (“SOFR”), the
London Interbank Offered Rate (“LIBOR”) or the prime rates of U.S. banks.
As a result, the value of corporate loan investments is generally less
exposed to the adverse effects of shifts in market interest rates than
investments that pay a fixed rate of interest. The market for corporate
loans may be subject to irregular trading activity and wide bid/ask
spreads. In addition, transactions in corporate loans may settle on a
delayed basis. As a result, the proceeds from the sale of corporate loans
may not be readily available to make additional investments
or |
to
meet the Fund’s redemption obligations. To the extent the extended
settlement process gives rise to short-term liquidity needs, the Fund may
hold additional cash, sell investments or temporarily borrow from banks
and other lenders. |
∎ |
Counterparty
Risk — The counterparty to an over‑the‑counter derivatives
contract or a borrower of the Fund’s securities may be unable or unwilling
to make timely principal, interest or settlement payments, or otherwise to
honor its obligations. Any such failure to honor its obligations may cause
significant losses to the Fund. |
∎ |
Depositary
Receipts Risk — Depositary receipts are generally subject to
the same risks as the foreign securities that they evidence or into which
they may be converted. In addition to investment risks associated with the
underlying issuer, depositary receipts expose the Fund to additional risks
associated with the non‑uniform terms that apply to depositary receipt
programs, credit exposure to the depository bank and to the sponsors and
other parties with whom the depository bank establishes the programs,
currency risk and the risk of an illiquid market for depositary
receipts. The issuers of unsponsored depositary receipts are not
obligated to disclose information that is, in the United States,
considered material. Therefore, there may be less information available
regarding these issuers and there may not be a correlation between such
information and the market value of the depositary receipts. While
depositary receipts provide an alternative to directly purchasing
underlying foreign securities in their respective markets and currencies,
they continue to be subject to many of the risks associated with investing
directly in foreign securities, including political, economic, and
currency risk. |
∎ |
Distressed
Securities Risk — Distressed securities are speculative and
involve substantial risks in addition to the risks of investing in junk
bonds. The Fund will generally not receive interest payments on the
distressed securities and may incur costs to protect its investment. In
addition, distressed securities involve the substantial risk that
principal will not be repaid. These securities may present a substantial
risk of default or may be in default at the time of investment. The Fund
may incur additional expenses to the extent it is required to seek
recovery upon a default in the payment of principal of or interest on its
portfolio holdings. In any reorganization or liquidation proceeding
relating to a portfolio company, the Fund may lose its entire investment
or may be required to accept cash or securities with a value less than its
original investment. Distressed securities and any securities received in
an exchange for such securities may be subject to restrictions on
resale. |
∎ |
Dollar Rolls
Risk — Dollar rolls involve the risk that the market value
of the securities that the Fund is committed to buy may decline below the
price of the securities the Fund has sold. These transactions may involve
leverage. |
∎ |
Emerging
Markets Risk — Emerging markets are riskier than more
developed markets because they tend to develop unevenly and may never
fully develop. Investments in emerging markets may be considered
speculative. Emerging markets are more likely to experience hyperinflation
and currency devaluations, which adversely affect returns to U.S.
investors. In addition, many emerging securities markets have far lower
trading volumes and less liquidity than developed
markets. |
∎ |
Foreign
Securities Risk — Foreign investments often involve special
risks not present in U.S. investments that can increase the chances that
the Fund will lose money. These risks
include: |
∎ |
The
Fund generally holds its foreign securities and cash in foreign banks and
securities depositories, which may be recently organized or new to the
foreign custody business and may be subject to only limited or no
regulatory oversight. |
∎ |
Changes
in foreign currency exchange rates can affect the value of the Fund’s
portfolio. |
∎ |
The
economies of certain foreign markets may not compare favorably with the
economy of the United States with respect to such issues as growth of
gross national product, reinvestment of capital, resources and balance of
payments position. |
∎ |
The
governments of certain countries, or the U.S. Government with respect to
certain countries, may prohibit or impose substantial restrictions through
capital controls and/or sanctions on foreign investments in the capital
markets or certain industries in those countries, which may prohibit or
restrict the ability to own or transfer currency, securities, derivatives
or other assets. |
∎ |
Many
foreign governments do not supervise and regulate stock exchanges, brokers
and the sale of securities to the same extent as does the United States
and may not have laws to protect investors that are comparable to U.S.
securities laws. |
∎ |
Settlement
and clearance procedures in certain foreign markets may result in delays
in payment for or delivery of securities not typically associated with
settlement and clearance of U.S.
investments. |
∎ |
The
Fund’s claims to recover foreign withholding taxes may not be successful,
and if the likelihood of recovery of foreign withholding taxes materially
decreases, due to, for example, a change in tax regulation or approach in
the foreign country, accruals in the Fund’s net asset value for such
refunds may be written down partially or in full, which will adversely
affect the Fund’s net asset
value. |
∎ |
The
European financial markets have recently experienced volatility and
adverse trends due to concerns about economic downturns in, or rising
government debt levels of, several European countries as well as acts of
war in the region. These events may spread to other countries in Europe
and may affect the value and liquidity of certain of the Fund’s
investments. |
∎ |
Geographic
Risk — A natural disaster could occur in a geographic region
in which the Fund invests, which could adversely affect the economy or the
business operations of companies in the specific geographic region,
causing an adverse impact on the Fund’s investments in, or which are
exposed to, the affected region. |
∎ |
High Portfolio
Turnover Risk — The Fund may engage in active and frequent
trading of its portfolio securities. High portfolio turnover (more than
100%) may result in increased transaction costs to the Fund, including
brokerage commissions, dealer mark‑ups and other transaction costs on the
sale of the securities and on reinvestment in other securities. The sale
of Fund portfolio securities may result in the realization and/or
distribution to shareholders of higher capital gains or losses as compared
to a fund with less active trading policies. These effects of higher than
normal portfolio turnover may adversely affect Fund
performance. |
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High Yield
Bonds Risk — Although junk bonds generally pay higher rates
of interest than investment grade bonds, junk bonds are high risk
investments that are considered speculative and may cause income and
principal losses for the Fund. |
∎ |
Income
Risk — Income risk is the risk that the Fund’s yield will
vary as short-term securities in its portfolio mature and the proceeds are
reinvested in securities with different interest
rates. |
∎ |
Indexed and
Inverse Securities Risk — Indexed and inverse securities
provide a potential return based on a particular index of value or
interest rates. The Fund’s return on these securities will be subject to
risk with respect to the value of the particular index. These securities
are subject to leverage risk and correlation risk. Certain indexed and
inverse securities have greater sensitivity to changes in interest rates
or index levels than other securities, and the Fund’s investment in such
instruments may decline significantly in value if interest rates or index
levels move in a way Fund management does not
anticipate. |
∎ |
Index-Related
Risk — There is no guarantee that an Underlying Fund’s
investment results will have a high degree of correlation to those of its
underlying index or that the Underlying Fund will achieve its investment
objective. Market disruptions or high volatility, other unusual market
circumstances and regulatory restrictions could have an adverse effect on
an Underlying Fund’s ability to adjust its exposure to the required levels
in order to track its underlying index. Errors in index data, index
computations or the construction of an underlying index in accordance with
its methodology may occur from time to time and may not be identified and
corrected by the index provider for a period of time or at all, which may
have an adverse impact on an Underlying Fund and its shareholders. Unusual
market conditions or other unforeseen circumstances (such as natural
disasters, political unrest or war) may impact the index provider or a
third-party data provider and could cause the index provider to postpone a
scheduled rebalance. This could cause an underlying index to vary from its
normal or expected
composition. |
∎ |
Inflation-Indexed Bonds Risk —
The principal value of an investment is not protected or otherwise
guaranteed by virtue of the Fund’s investments in inflation-indexed
bonds. |
∎ |
Investment
Style Risk — Under certain market conditions, growth
investments have performed better during the later stages of economic
expansion and value investments have performed better during periods of
economic recovery. Therefore, these investment styles may over time go in
and out of favor. At times when an investment style used by the Fund or an
Underlying Fund is out of favor, the Fund may underperform other funds
that use different investment
styles. |
∎ |
Issuer
Risk — Fund performance depends on the performance of
individual securities to which the Fund has exposure. Changes in the
financial condition or credit rating of an issuer of those securities may
cause the value of the securities to
decline. |
∎ |
Management
Risk — If a passively managed ETF does not fully replicate
the underlying index, it is subject to the risk that the manager’s
investment management strategy may not produce the intended
results. |
∎ |
Mezzanine
Securities Risk — Mezzanine securities carry the risk that
the issuer will not be able to meet its obligations and that the equity
securities purchased with the mezzanine investments may lose
value. |
∎ |
Model Risk
— The Fund seeks to pursue its investment objective by using
proprietary models that incorporate quantitative analysis. Investments
selected using these models may perform differently than as forecasted due
to the factors incorporated into the models and the weighting of each
factor, changes from historical trends, and issues in the construction and
implementation of the models (including, but not limited to, software
issues and other technological issues). There is no guarantee that
BlackRock’s use of these models will result in effective investment
decisions for the
Fund. |
∎ |
Mortgage- and
Asset-Backed Securities Risks — Mortgage- and asset-backed
securities represent interests in “pools” of mortgages or other assets,
including consumer loans or receivables held in trust. Mortgage- and
asset-backed securities are subject to credit, interest rate, prepayment
and extension risks. These securities also are subject to risk of default
on the underlying mortgage or asset, particularly during periods of
economic downturn. Small movements in interest rates (both increases and
decreases) may quickly and significantly reduce the value of certain
mortgage-backed securities. |
∎ |
Municipal
Securities Risks — Municipal securities risks include the
ability of the issuer to repay the obligation, the relative lack of
information about certain issuers of municipal securities, and the
possibility of future legislative changes which could affect the market
for and value of municipal securities. Budgetary constraints of local,
state, and federal governments upon which the issuers may be relying for
funding may also impact municipal securities. These risks
include: |
∎ |
National Closed
Market Trading Risk — To the extent that the underlying
securities and/or other assets held by an Underlying Fund that is an ETF
trade on foreign exchanges or in foreign markets that may be closed when
the securities exchange on which the Underlying Fund’s shares trade is
open, there are likely to be deviations between the current price of such
an underlying security and the last quoted price for the underlying
security (i.e., an Underlying Fund’s quote from the closed foreign
market). The impact of a closed foreign market on an Underlying Fund is
likely to be greater where a large portion of the Underlying Fund’s
underlying securities and/or other assets trade on that closed foreign
market or when the foreign market is closed for unscheduled reasons. These
deviations could result in premiums or discounts to one or more of the
Underlying Funds’ net asset values that may be greater than those
experienced by other ETFs. |
∎ |
“New Issues”
Risk — “New issues” are initial public offerings (“IPOs”) of
equity securities. Securities issued in IPOs have no trading history, and
information about the companies may be available for very limited periods.
In addition, the prices of securities sold in IPOs may be highly volatile
or may decline shortly after the
IPO. |
∎ |
Passive
Investment Risk — Because BFA does not select individual
companies in the underlying indexes for certain Underlying Funds, those
Underlying Funds may hold securities of companies that present risks that
an investment adviser researching individual securities might seek to
avoid. |
∎ |
Pay-in-kind
Bonds Risk — Similar to zero coupon obligations, pay-in-kind
bonds also carry additional risk as holders of these types of securities
realize no cash until the cash payment date unless a portion of such
securities is sold and, if the issuer defaults, the Fund may obtain no
return at all on its investment. The market price of pay-in-kind bonds is
affected by interest rate changes to a greater extent, and therefore tends
to be more volatile, than that of securities which pay interest in
cash. |
∎ |
Preferred
Securities Risk — Preferred securities may pay fixed or
adjustable rates of return. Preferred securities are subject to
issuer-specific and market risks applicable generally to equity
securities. In addition, a company’s preferred securities generally pay
dividends only after the company makes required payments to holders of its
bonds and other debt. For this reason, the value of preferred securities
will usually react more strongly th |