Total Factor Fund

Inst: BSTIX A: BSTAX C: BSTCX

Commentary as of 06/30/21 management ● The fund posted returns of 4.02% (Institutional shares) and 3.93% (Investor A shares, Ked Hogan, Philip Hodges without sales charge) for the second quarter of 2021, while its benchmark, a blend of 60% MSCI World Index and 40% Barclays U.S. Aggregate Index, returned 5.28%.

● We had another strong quarter, as both the market-neutral style factor side of the fund Investment approach and the -parity allocation contributed materially. The style factor side experienced The fund invests in a broad range of global flat-to-positive returns across four out of five asset classes and factor buckets, while the asset classes, such as equity securities, risk-parity book was underpinned by pro-cyclical exposures and a rebound in real rates. fixed and floating rate debt instruments, derivatives, other investment companies, ● Allocations remained largely aligned with those of the previous quarter, as style factors including money market funds and received the bulk, approximately 70%. There was a slight tilt toward single-name equity exchange traded funds, real estate strategies and, in terms of factors, overweight exposures toward Momentum and Value investment trusts and commodity-related at the overall level. Single-name equities also saw a slight tilt toward Value strategies instruments. and away from Low Volatility.

Contributors Detractors

The style factor side piggybacked on a Long/short commodity style factors were strong first quarter to account for roughly the lone detractors, albeit only slightly, as 40% of the return contribution in the “carry” and Momentum insights in the second quarter, as most asset classes asset class detracted to the tune of a and factors gained. On the derivatives couple dozen basis points. Specifically, a side, all asset classes apart from short position in natural gas resulted in commodities finished higher. Currency losses as late winter storms early in the and equity market positions were quarter pushed up prices, followed by underpinned by strong security selection soaring summer demand for cooling in in Latin America and Asia, respectively. June. From a factor perspective, it was Meanwhile, fixed income was propped up only the Momentum strategies that by its highest-conviction position in long- detracted, particularly in bonds and dated Australian bonds. Market-neutral commodities. On the risk-parity front, the equities were helped by quality-based nominal bond-based inflation factor was insights. the lone underperformer.

Further insight The second quarter saw continued oscillations across market regions, asset classes, and factors, especially in mid-June as the Federal Reserve (Fed) shifted to a more “hawkish” stance. The Fed indicated that interest rates could be raised sooner than expected. When investors had time to digest the information, there were market moves across inflation- sensitive assets. Against this backdrop, there was a rally in the risk-parity portion of the fund, which made its way back into positive territory. Economic growth (a risk-balanced mix of equities, commodities, and credit) and real rates (inflation-linked bonds) faced challenges in the form of cautious optimism about the global reopening, and transitory inflation readings. These meant that the Fed was unlikely to raise rates prematurely.

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USRRMH0721U/S-1736342-1/2 Average annual total returns (%) as of 6/30/21

2Q21 YTD Since (not annualized) (not annualized) 1 Year 3 Year 5 Years 10 Years Inception1 Institutional 4.02 8.50 6.39 -0.80 1.75 — 2.04 Investor A (Without Sales Charge) 3.93 8.44 6.08 -1.05 1.49 — 1.78 Investor A (With Sales Charge) -1.52 2.75 0.51 -2.81 0.40 — 1.14 Morningstar Multistrategy Category Avg. 2.72 5.60 12.76 4.12 3.42 2.54 — Blended Benchmark2 5.28 7.69 21.14 11.74 10.60 — — Expenses for Institutional shares: Total 0.85%; Net, Including Investment Related Expenses (dividend expense, interest expense, acquired fund fees and expenses and certain other fund expenses) 0.56%. For Investor A shares: Total 1.23%; Net, Including Investment Related Expenses 0.81%. Institutional and Investor A shares have contractual waivers with an end date of 11/30/2021 terminable upon 90 days' notice. For certain share classes, BlackRock may voluntarily agree to waive certain fees and expenses in which the adviser may discontinue at any time without notice. Expenses stated as of the fund’s most recent prospectus. Data represents past performance and is no guarantee of

future results. Investment returns and principal values may fluctuate so that an investor s shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvestment of dividends and capital gains. Current performance may be lower or higher than that shown. Refer to blackrock.com for most recent month-end performance. Investment returns reflect total fund operating expenses, net of all fees, waivers and/or expense reimbursements. Index performance is shown for illustrative purposes only. It is not possible to invest directly in an unmanaged index. Share classes have different sales charges, fees and other features. Returns with sales charge reflect deduction of current maximum initial sales charge of 5.25% for Investor A shares. Institutional shares have no front- or back-end load. Institutional shares have limited availability and may be purchased at various minimums. See prospectus for details. Net Expenses Excluding Investment Related Expenses for Institutional shares: 0.55%; for Investor A shares:0.80%.

Important : 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. 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 . Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments. Obligations of US govt. agencies are supported by varying degrees of credit but generally are not backed by the full faith and credit of the US govt. Non-investment-grade debt securities (high-yield/junk bonds) may be subject to greater market fluctuations, risk of default or loss of income and principal than higher rated securities.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 its investments or to seek to enhance returns. Derivatives entail risks relating to liquidity, leverage and credit that may reduce returns and increase volatility. Investing in commodity-linked derivatives and commodity-related companies may increase volatility. Price movements are outside of the funds control and may be influenced by weather and climate conditions, livestock dis- ease, war, terrorism, political conflicts and economic events, interest rates, currency and exchange rates, government regulation and taxation. and bond values fluctuate in price so the value of your investment can go down depending on market conditions. The opinions expressed are those of the fund’s portfolio management team as of June 30, 2021, and may change as subsequent conditions vary. Information and opinions are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy.

1 Fund inception: 12/27/12. 2 The Blended Benchmark represents 60% MSCI World/40% Barclays U.S. Aggregate Bond Index. The Morgan Stanley Capital International (MSCI) World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. The MSCI World Index consists of 23 developed countries, including the United States. The unmanaged, market-weighted Barclays U.S. Aggregate Bond Index comprises investment-grade corporate bonds (rated BBB or better), mortgages and U.S. Treasury and government agency issues with at least 1 year to maturity. You should consider the investment objectives, risks, charges and expenses of the fund carefully before investing. The prospectus and, if available, the summary prospectus contain this and other information about the fund and are available, along with information on other BlackRock funds, by calling 800-882-0052 or from your financial professional. The prospectus should be read carefully before investing. ©2021 BlackRock, Inc. All Rights Reserved. BLACKROCK is a trademark of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners. Prepared by BlackRock Investments, LLC, member FINRA.

Not FDIC Insured • May Lose Value • No Bank Guarantee

07/21 — Total Factor Fund Want to know more? blackrock.com

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