Balanced Capital Fund - Q1 2020
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Q1 2020
Balanced Capital Fund
Morningstar has awarded the Fund a Bronze Medal. Fewer than 10% of US open-end funds hold medalist ratings. (Effective 8/29/2019).
USRMH0120U-1052065-1/11GA_I
Why do so many investors use a 60/40 blend of stocks and
bonds?
A 60/40 allocation provided an attractive risk and return profile over the past 40 years
12%
100% S&P 500
Avg. 88% of the return of stocks
11%
60/40 Portfolio
Annualized Return
10%
BUT avg. 36% lower volatility vs. stocks
9%
8%
100% BBG Barclays Aggregate
7%
4% 6% 8% 10% 12% 14% 16%
Annualized Standard Deviation
Source: Morningstar Direct from 1 January 1980 through 31 December 2019. Based on a hypothetical portfolio consisting of a 60% allocation to the S&P 500 Index and a 40%
allocation to the BBG Barclays US Aggregate Index with monthly rebalancing. Performance data quoted represents past performance and is no guarantee of future results.
Index performance is shown for illustrative purposes only. It is not possible to invest directly in an index.
USRMH0120U-1052065-2/11
2Diversification provided a similar winning outcome with a
smoother ride than equities
BlackRock
Years S&P 500 Index Investor experience
Balanced Capital
2000-2002 -37.6% -11.2% “I lost money”
2003-2007 +82.9% +66.3% “I didn’t make as much”
2008 -37.0% -28.1% “I lost money”
2009-2017 +258.8% +155.0% “I didn’t make as much”
2018 -4.4% -3.1% “I lost money”
2019 +31.5% +21.8% “I didn’t make as much”
Total Return +224.2% +219.8% “Diversification provided a
similar winning outcome
with a smoother ride than
Growth of $100K $324,209 $319,787 equities”
Performance data quoted represents past performance and does not guarantee future results. As of 31 December 2019. Source: Morningstar.
Balanced Capital performance is based on the institutional share class: Gross Expense Ratio 0.92%; Net Expense Ratio 0.63%. Index performance is shown
for illustrative purposes only. It is not possible to invest directly in an index.
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3BlackRock Balanced Capital Fund (MACPX)
Performance summary
Average Annual Total Returns
1 Year 3 Year 5 Year 10 Year
as of 31 December 2019
BlackRock Balanced Capital Fund (Inst.) 21.84% 10.60% 8.07% 9.76%
Blended Benchmark1 22.16% 10.74% 8.25% 9.76%
Active -0.32% -0.14% -0.18% 0.00%
Morningstar Quartile Rankings (Inst.) (%)2 1 (109 out of 697 funds) 1 (61 out of 643 funds) 1 (49 out of 570 funds) 1 (35 out of 420 funds)
BlackRock Balanced Capital Fund (Inv. A)
21.57% / 15.18% 10.29% / 8.32% 7.77% / 6.61% 9.44% / 8.85%
(Inv. A without / with maximum sales charge)3
Morningstar Quartile Rankings (Inv. A) (%)2 1 (129 out of 697 funds) 1 (93 out of 643 funds) 1 (66 out of 570 funds) 1 (51 out of 420 funds)
Source: BlackRock and Morningstar as of 31 December 2019.
Rated against 643 of Allocation Funds in the 50%-70% Equity category as of 31 December 2019 based on risk adjusted total return. Overall ratings are determined monthly and
subject to change. The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its 3,5,10 year (if applicable).
Morningstar Rating metrics. Morningstar has awarded the Fund a Bronze Medal. Fewer than 10% of US open-end funds hold medalist ratings. (Effective 8/29/2019).
BlackRock Balanced Capital Fund performance data quoted represents past performance and is no guarantee of future results.
Investment returns and principal values may fluctuate so that an investor’s shares, when redeemed, may be worth more or lessthan their
original cost. Current performance may be lower or higher than that shown. All returns assume reinvestment of all dividend and capital
gain distributions. Refer to www.blackrock.com for current month-end performance. Expenses for Institutional shares: Gross Expense
Ratio 0.92%; Net Expense Ratio 0.63%. Expenses for A shares: Gross Expense Ratio 1.21%; Net Expense Ratio 0.92%. Performancedata
for certain share classes are based on pre-class inception information dating back to an older class of fund shares. This information may
be considered when assessing a fund's performance, but it does not represent actual performance of these classes of shares.
The Institutional share class Net Expense Ratio excluding Investment Related Expenses is 0.55%. The A share class Net ExpenseRatio excluding Investment Related Expenses is
0.84%. Investment Related Expenses include acquired fund fees of 0.37%, and interest expense (cost of borrowing securities toseek to enhance return or reduce risk) of 0.00%, and
certain other expenses, if applicable. Expenses stated as of the fund's most recent prospectus. The difference between grossand net expense ratios are due to contractual and/or
voluntary waivers, if applicable. BlackRock has contractually agreed to waive the management fee with respect to any portionof the Fund’s assets estimated to be attributable to
investments in other equity and fixed-income mutual funds and exchange-traded funds managed by BlackRock or its affiliates that have a contractual management fee, through
January 31, 2020.
1) Blended benchmark: 60% Russell Growth 1000 Index, 40% BBG Barc Aggregate Index.
2) Morningstar Category: US Fund Allocation--50% to 70% Equity.
3) Maximum Sales Charge (Load) is 5.25% on the A share class.
USRMH0120U-1052065-4/11
445+ year track record with only 6 down calendar years
Demonstrating long-term growth across market cycles
1 down calendar years in 10
4 down calendar years in 20
6 down calendar years in 46
Balanced Capital Fund Net Returns
40%
30%
20%
10%
0%
-10%
Dot-com
-20%
Bubble Burst
-30% Energy
crisis Global Financial
-40% Crisis
Annual Return Avg. Annual Return Since Inception Rolling 5-year Avg. Annual Return
Source: Morningstar Direct as of 31 December 2019. Chart represents net returns since inception. Inception date is 8 November 1973. Performance data quoted represents past
performance and is no guarantee of future results. Based on monthly returns. Expenses on the institutional share class: Gross Expense Ratio 0.92%; Net Expense Ratio 0.63%.
USRMH0120U-1052065-5/11
5Case study: Winning by losing less
Proven record of downside risk management
Balanced Capital Fund has generated similar growth to the S&P 500 since 2000, with smaller drawdowns
This focus on capital preservation has enabled the portfolio to achieve stable, long-term growth
Growth of a hypothetical $100k investment in US stocks vs. BlackRock Balanced Capital Fund
$330,000
$324k
$320k
$300,000
$270,000
$240,000
$210,000 2007 – 2008 Drawdown
S&P 500: -51%
$180,000 2000 – 2003 Drawdown Balanced Capital: -39%
S&P 500: -45%
$150,000 Balanced Capital: -22%
$120,000
$90,000
$60,000
$30,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
BlackRock Balanced Capital Instl. S&P 500 Index
Source: BlackRock from 31 December 1999 – 31 December 2019. Performance data quoted represents past performance and is no guarantee of future results. Based on monthly
returns. Represents changes to the NAV and accounts for distributions. Balanced Capital performance is based on the instituti onal share class: Gross Expense Ratio 0.92%; Net
Expense Ratio 0.63%. Index performance is shown for illustrative purposes only. It is not possible to invest directly in an i ndex.
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6Case Study: Funding Retirement
Balanced Capital would have served as a source of income and capital preservation
Balanced Capital has provided a track record of consistent performance, while effectively preserving capital
Over the past 30 years, the Fund would have successfully sustained an annual withdrawal of $5,000, adjusted
upwards by 3% annually to adjust for inflation, for an investor with a $100k initial investment
Inflation-adjusted withdrawal scenarios for $100k initial investment
Ending Value
$1,000,000
Withdrawal Rate Total Withdrawals
$980,784
Buy and Hold -
3% $142,726
$800,000
4% $190,302
5% $237,877
$600,000 $565,626
$427,240
$400,000
$288,854
$200,000
$0
1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
Buy and Hold 5% 4% 3%
Source: BlackRock from 31 December 1989 – 31 December 2019. Performance data quoted represents past performance and is no guarantee of future results. The performance
depicted above is for the BlackRock Balanced Capital Fund (Institutional). Institutional shares are not available to all investors. Performance, fees and rankings for other share
classes could be higher. Returns are net of fees. Methodology: Assumes a $100,000 investment at 31 December 1989 and a lump s um withdrawal on December 31 of each year. The
size of the initial withdrawal is equal to the withdrawal rate times the initial investment, and each year that amount is increased by 3% to account for inflation. Does not consider
taxes. Results are hypothetical and will vary based on selection of other time frames and over time as assumptions change. Th ese figures are for illustrative purposes only.
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7BlackRock Balanced Capital Review
Morningstar Category: US Fund Allocation--50% to 70% Equity
Key features of Balanced Capital
Top down asset allocation P
Bottom up security selection P
Industry leading risk management P
Long (45-year) track record across bull and bear
P
markets*
Low cost (bottom quintile pricing)** P
Long-Term Growth Across Market Cycles P
*Inception date is 8 November 1973.**Funds Ranked by Prospectus Net Expense Ratio within the Morningstar US OE Allocation 50-70% Equity Category. Balanced Capital
ranked by institutional share class. Universe includes all share classes and all funds in the Morningstar US Fund Allocation50-70% Equity Category as of 31 December 2019
with a 5 Yr. track record between 1 January 2015 and 31 December 2019.
USRMH0120U-1052065-8/11
8Important notes
The Morningstar Rating TM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity
and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year
history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is
calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly
excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of
products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5%
receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a
weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating
metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating
for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months
of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent
three-year period actually has the greatest impact because it is included in all three rating periods. The fund was rated agains t the
following numbers of U.S.-domiciled Allocation --50% to 70% Equity funds over the following time periods: 643 in the last 3
years, 570 in the last 5 years and 420 in the last 10 years. With respect to these Allocation--50% to 70% Equity funds, the fund
received a Morningstar Rating of 4, 5 and 4 stars for the 3-, 5- and 10-year periods, respectively. Other classes may have different
performance characteristics.
Past performance does not guarantee future results.
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9Important notes
Morningstar Analyst Rating ™is not a credit or risk rating. It is a subjective evaluation performed by Morningstar’s manager
research group, which consists of various Morningstar, Inc. subsidiaries (“Manager Research Group”). In the United States, th at
subsidiary is Morningstar Research Services LLC, which is registered with and governed by the U.S. Securities and Exchange
Commission. The Manager Research Group evaluates funds based on five key pillars, which are process, performance, people,
parent, and price. The Manager Research Group uses this five pillar evaluation to determine how they believe funds are likely to
perform relative to a benchmark, or in the case of exchange-traded funds and index mutual funds, a relevant peer group, over the
long term on a risk-adjusted basis. They consider quantitative and qualitative factors in their research, and the weight of each
pillar may vary. The Analyst Rating scale is Gold, Silver, Bronze, Neutral, and Negative. A Morningstar Analyst Rating of Gol d, Silver,
or Bronze reflects the Manager Research Group’s conviction in a fund’s prospects for outperformance. Analyst Ratings ultimate ly
reflect the Manager Research Group’s overall assessment, are overseen by an Analyst Rating Committee, and are continuously
monitored and reevaluated at least every 14 months. For more detailed information about Morningstar’s Analyst Rating, includi ng
its methodology, please go to global.morningstar.com/managerdisclosures/.
The Morningstar Analyst Rating (i) should not be used as the sole basis in evaluating a fund, (ii) involves unknown risks and
uncertainties which may cause Analyst expectations not to occur or to differ significantly from what they expected, and (iii) should
not be considered an offer or solicitation to buy or sell the fund.
Past performance does not guarantee future results.
Represented indices: US bonds represented by the Bloomberg Barclays US Aggregate Index, comprising more than 5,000
investment-grade taxable bonds. US stocks represented by the S&P 500 Index, covering 500 industrial, utility, transportation and
financial companies of the US markets (mostly NYSE issues). The reference benchmark represents a 60% / 40% allocation to the
Russell 1000 Index and the Bloomberg Barclays US Aggregate Index, respectively. The Russell 1000 Index, which is an index of
approximately 1,000 of the largest companies in the U.S. equity market and typically comprises approximately 90% of the total
market capitalization of all listed U.S. stocks.
USRMH0120U-1052065-10/11
10Important notes
You should consider the investment objectives, risks, charges and expenses of the fund carefully before investing.
The prospectus and summary prospectus contain this and other information about the fund and are available, along
with information on other BlackRock funds, by calling 800-882-0052 or at blackrock.com. The prospectus and, if
available, the summary prospectus should be read carefully before investing.
Important Risks of the Fund: The fund is actively managed and its characteristics will vary. The Fund may invest
significantly in BlackRock equity and/or fixed income mutual funds (“underlying funds”) and affiliated and unaffiliated
ETFs. As such, it is subject to the risks associated with the underlying BlackRock funds in which it invests. Stock and
bond values fluctuate in price so the value of your investment can go down depending on market conditions.
International investing involves special risks including, but not limited to political risks, currency fluctuations, illiquidity
and volatility. These risks may be heightened for investments in emerging markets. Fixed income risks include interest-
rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refer s
to the possibility that the bond issuer will not be able to make principal and interest payments. Asset allocation
strategies do not assure profit and do not protect against loss. Non-diversification of investments means that more
assets are potentially invested in fewer securities than if investments were diversified, so risk is increased because each
investment has a greater effect on performance. The fund may use derivatives to hedge its investments or to seek to
enhance returns. Derivatives entail risks relating to liquidity, leverage and credit that may reduce returns and increase
volatility.
This information should not be relied upon as research, investment advice, or a recommendation regarding any
products, strategies, or any security in particular. This material is strictly for illustrative, educational, or informationa l
purposes and is subject to change.
Prepared by BlackRock Investments, LLC, member FINRA.
BLACKROCK and ALADDIN are registered trademarks of BlackRock, Inc. All other trademarks are the property of their respective owners.
©2020 BlackRock, Inc. All Rights Reserved.
USRMH0120U-1052065-11/11
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