#1BlackRock Global Long/Short Credit Absolute Return Credit April 2018 FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. BLACKROCK USR0418U-470515-1498457#2BlackRock Global Long/Short Credit Overview Client Challenge Why GLSC Why Now Why BlackRock BLACKROCK* ● ● Investors need to diversify their fixed income exposure in preparation for potential monetary policy regime change With yields low, credit spreads compressed and valuations high, returns from fixed income beta are less likely versus prior years GLSC has the potential to offer a lower volatility & low correlation alternative to fixed income Access to global credit markets vs. solely domestic markets doubles the opportunity set GLSC provides the flexibility to go long and short different parts of credit markets within a zero duration construct Complacency around fixed income and credit beta has risen and investors need flexible solutions With interest rates on the rise, clients can invest without concerns of duration risk Greater dispersion across credit asset classes, sectors and industries provides alpha opportunities accessible through a long/short framework Led by Josh Tarnow (25+ years of experience), GLSC leverages an experienced credit team with global reach Beta, carry, absolute return and hedging strategies provide diversified sources of return and the ability to adapt to changing markets Value-add from BlackRock's Risk & Quantitative Analysis that enhances the investment process with portfolio and position-level risk analysis, emphasizing credit diversification and liquidity FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. USR0418U-470515-1498457 2#3Today's Landscape Reflects a Change in Regime The combination of rising interest rates, tighter spreads and increasing volatility creates challenges Fixed income investors have traditionally relied on falling interest rates for performance, and swelling AUM has created risks as rates rise ● Easy monetary policy suppressed volatility which is returning to markets, and complacency means investors are unprepared for a potential regime change 10 Year Treasury Yield % 3 2.5 2 1.5 1 Jan-16 Mar-16 Interest rates are on the rise Your May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 What May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 High Yield Spreads (bps) 850 750 650 550 450 350 250 Credit spreads are at post-crisis tights Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. Historical average = 503bps Jan-17 Jan-18 Source: Bloomberg. Barclays Live. All information as of 3/31/18. Index performance is for illustrative purposes only. It is not possible to invest directly in an unmanaged index. Past performance is no guarantee of future results. BLACKROCK* USR0418U-470515-1498457 3#4GLSC Offers a Low Volatility Approach to Fixed Income BlackRock Global Long/Short Credit Fund is a liquid alternative strategy that maximizes flexibility to capitalize on long and short opportunities and provide credit-driven returns, independent of interest rates Attractive returns outpacing traditional fixed income but with far less volatility 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2.86% 2.20% Return Global Long/Short Credit (Inst.) 1.55% 3.10% Risk Bbg Barclays Agg Source: Morningstar, 9/30/2011 - 3/31/2018. Risk as measured by standard deviation. Past performance is no guarantee of future results. Institutional share returns calculated using weekly data since the fund's inception (9/30/11). Index performance is for illustrative purposes only. It is not possible to invest directly in an unmanaged index. BLACKROCK Long/short focus on credit has led to lower correlation to major indices 0.80 0.60 0.40 0.20 0.00 -0.20 -0.40 -0.32 GLSC Beta -0.19 -0.12 -0.02 0.19 0.30 0.64 0.58 0.40 li 10-Yr Core Muni US Inv Eur Inv Eur HY US HY Bank Tsy Bonds Bonds Grade Grade -0.08 -0.10 -0.07 -0.01 0.08 0.05 0.20 0.51 0.05 FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. S&P Loans 500 Source: BlackRock, Morningstar. Past correlations are no guarantee of future correlations. Institutional share correlations calculated using weekly data since the fund's inception (9/30/11). Core Bonds represented by the Bbg Barclays Aggregate Index. Municipal Bonds represented by the Bbg Barclays Capital Muni Bond Index. US Investment Grade and US High Yield represented by the Bbg Barclays Capital Investment Grade Corporate and High Yield Indices. European Investment Grade and European High Yield represented by Bbg Barclays Capital Euro Aggregate Corporate Index and Pan European High Yield Indices. Bank Loans represented by S&P/LSTA U.S. Leveraged Loan 100 (the index). Diversification strategies do not ensure profits in declining markets. USR0418U-470515-1498457 4#5Access to Global Credit Markets is a Differentiator Global investment landscape provides more access to over $15 trillion in credit opportunities across the U.S., Europe and Asia • GLSC does not have a home bias and seeks a minimum 40% exposure to non-U.S. markets (currency-hedged) With portfolio managers, credit research analysts and traders based in the U.S., Europe, and Asia, resources provide deep insight into local markets Long/Short Exposure By Region % of Notional Market Value Longs Shorts 120% 80% 40% 0% -40% -80% -120% 2011 Europe BLACKROCK 2012 North America 2013 Asia 2014 EM Fund Net Credit Position 2015 Source: BlackRock, as of 3/31/18. Includes only credit positions and excludes all interest rate and currency hedges. Subject to change. 2016 FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. 2017 USR0418U-470515-1498457 5#6Focused on Opportunities in Credit Assets GLSC leverages the team's expertise in credit and has flexibility to access a variety of credit assets Focused on investment grade, cross-over and high yield corporate credit, bank loans, sovereigns, and securitized assets Expresses views and hedges risk with credit default swaps, equity futures and options, FX forwards and options and total return swaps ● Long/Short Exposure By Asset Class % of Notional Market Value Longs Shorts 140% 120% 100% 80% 60% 40% 20% 0% -20% -40% -60% -80% -100% -120% Government Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 BLACKROCK* IG Credit High Yield Loans Securitized CDX Converts/Preferred Source: BlackRock, as of 3/31/18. Includes only credit positions and excludes all interest rate and currency hedges. Subject to change. FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. Equity Other USR0418U-470515-1498457 6#7GLSC Seeks to Isolate Credit Risk GLSC seeks to drive returns through allocation and management of credit risk The Fund seeks to neutralize the impact of small and large changes in interest rates by tailoring hedges to each trade and asset class ● Maintaining a duration of zero makes GLSC a simple solution to protect from the risk of rising rates All non-USD positions are regularly hedged back to USD Hypothetical Illustration of Effects of Duration Duration in Years BlackRock Global Long/Short Credit Fund 0 No Impact The potential pain if rates spike 1% (change in bond prices) 2 -2% - 4% 6 -6% Illustrative Duration and Currency Hedge Go long a bond + Credit Risk Interest Rate Risk Currency Risk Apply hedges Sell --> Treasury futures Corporate bond inherent risks* Remove Interest Rate Risk Sell FX forwards Remove Currency Risk = FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. Isolate credit risk For illustrative purposes only. Assumes the purchase of a non-USD-denominated bond. No currency hedge is necessary for securities that are USD denominated. BLACKROCK* Credit Risk USR0418U-470515-1498457 7#8Long and Short Expression of Credit Opportunities A long/short approach allows investors more flexibility to take advantage of both sides of the market, diversifying risk and potentially providing more consistent results GLSC actively allocates across long, short and pair trades but is expected to tilt net long • Short exposures can be expressed through broad market hedges, credit index overlays and individual idiosyncratic short positions to take advantage of a specific theme or catalyst ● Historical Gross and Net Exposures 250% 200% 150% 100% 50% 0% Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 BLACKROCK Mar-14 Sep-14 Mar-15 Gross Net Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Historical Long and Short Exposures Short % -80% -130% Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 -30% Source: BlackRock, as of 3/31/18. Includes only credit positions and excludes all interest rate and currency hedges. Subject to change. Long % 70% 20% FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. 120% USR0418U-470515-1498457 8#9Diversifying the Sources of Return GLSC implements four key strategies to express and manage risk, blending traditional and alternative approaches to credit investing ● The combination of credit beta, carry and less correlated absolute return strategies allow the Fund to position efficiently as the market changes Emphasis on absolute return as volatility, dispersion and catalysts increase, and creating opportunities for more flexible credit risk expression Traditional Carry Absolute Return Hedges Strategy Overview ● ● Directional views and name selection Core holdings and fundamental likes/dislikes BLACKROCK Focus on assets with attractive yields and limited price volatility Funding source for short positions Idiosyncratic and relative value long and short opportunities Event driven, capital structure and special situation trades Manage aggregate directional risk Hedge macro or external risks Asset Classes HY & IG bonds CDX Bank loans CLOS CMBS & ABS EETCS HY & IG bonds Bank loans Equities CDS/CDX Sovereign Equities ETFs Historical Range 40-50% 10-20% 25-30% 10-15% Current Allocation 15-20% 10-20% 60-70% 10-15% Increasing emphasis on Absolute Return Gross Notionals by Strategy 200% 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% 2011 2012 2013 2014 2015 2016 2017 Traditional ■Carry ■Absolute ■Hedge Source: BlackRock, as of 3/31/18. Includes only credit positions and excludes all interest rate and currency hedges. Subject to change. FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. USR0418U-470515-1498457 9#10Demystifying Absolute Return The absolute return component of the Fund seeks to produce differentiated returns that are more insulated from market beta relative to traditional strategies ● ● The absolute return strategy uses the combination of additional tools and nontraditional strategies to capture idiosyncratic opportunities and relative value through longs, shorts and pair trades ● 1 Long Positions GLSC can take outright long positions in companies that we think offer good value or upside due to strong or improving balance sheets or positive catalysts like management changes or acquisitions Types of absolute return strategies: Single name relative value - focus on high conviction long vs. short opportunities, leveraging BlackRock's global credit fundamental research capabilities ● 2 Short Positions GLSC can take outright short positions in companies that we think are overvalued or could be negatively impacted by broader economic factors, changes in their industry or company-specific factors • Industry relative value trades - focus on sectors where we believe the market is mispricing potential risks Capital structure trades - isolate unusual relationships between instruments of the same issuer, most frequently debt vs. equity 3 Pair Trades GLSC can express a view on the relationships between different companies in the same sector, different parts of a single company's capital structure, and how different sectors or markets behave BLACKROCK* Event-driven trades - position in anticipation of a near to medium term catalyst such as M&A, change in credit rating, new debt issuance, or balance sheet management exercises FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. USR0418U-470515-1498457 10#11The Outcome: Insulated from Rising Interest Rates. Growth of a hypothetical $10,000 investment from fund inception (9/30/11) through 3/31/18 Rates Rose 50 bps 56 bps 45 bps 47 bps 107 bps 53 bps GLSC 0.50% 0.79% 1.48% 2.04% -0.83% 1.19% BarCap Agg -1.25% -1.18% -0.71% -0.96% -4.44% -1.07% 56 bps 65 bps 1.54% 0.00% -1.91% -2.44% $12,400 $12,100 $11,800 $11,500 $11,200 $10,900 $10,600 $10,300 $10,000 $9,700 $9,400 Herber Period of Rising Rates GLSC averages over 2.50% BlackRock Global L/S Credit - Inst. 84bps 0.70% -3.32% outperformance in rising rate periods www. Sep-11 Feb-12 Jul-12 Nov-12 Apr-13 Aug-13 Jan-14 Jun-14 Oct-14 Mar-15 Jul-15 Dec-15 May-16 Oct-16 Feb-17 Jul-17 Dec-17 Bbg Barclays Aggregate www 39bps 41bps 0.96% 0.87% -1.16% -1.18% US 10-Year Treasury Source: BlackRock, Morningstar, Bloomberg. Past performance is no guarantee of future results. Assumes $10,000 Investment in BlackRock Global Long/Short Credit Institutional share on the fund's inception date (9/30/11) and reinvestment of all dividend and capital gain distributions. Periods of rising rates represented by the 10-year Treasury. Volatility calculated using annualized standard deviation based on weekly market movements 10/2/11-3/31/18. Index performance is for illustrative purposes only. It is not possible to invest directly in an unmanaged index. Please see accompanying fund fact sheet for standardized average annual total returns. BLACKROCK* FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. USR0418U-470515-1498457 11#12The Outcome: Protection Against Credit Market Volatility GLSC has delivered downside protection during weaker credit environments Hedges and short positions can dampen the potentially negative impact of broad market selloffs, reduce exposure to credit market volatility and help manage idiosyncratic risk • The Fund emphasizes flexibility across asset classes and within capital structures, diversification across credit issuers and liquidity in underlying instruments GLSC Offered Protection During Credit Selloffs Total Returns When Spreads Widened Spreads Spreads ↑ 112 bps 10/27/11-11/25/11 -0.20% -2.88% 129 bps 3/19/12-6/6/12 -0.41% -0.82% Spreads 109 bps 5/9/13-6/25/13 -1.65% Global L/S Credit (Inst. Class) U.S. High Yield -5.18% Spreads 171 bps 6/18/14-2/2/15 -0.98% -1.96% Spreads ↑ 49 bps 3/6/15-3/18/15 -0.57% -0.93% Spreads 371 bps 6/3/15-2/11/16 -4.44% Spreads ↑ 64 bps 6/8/16-6/27/16 -0.41% -1.16% Spreads FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. 52 bps 1/26/18-2/9/18 -0.29% -2.14% -12.71% Source: BlackRock, Barclays Live. Past performance is no guarantee of future results. Index performance is for illustrative purposes only. It is not possible to invest directly in an unmanaged index. U.S. High Yield is represented by Bbg Barclays U.S. High Yield Corporate Index. BLACKROCK® USR0418U-470515-1498457 12#13How to Implement GLSC GLSC is a liquid alternative strategy that plays a risk-reducing role in broader portfolios Adding GLSC Reduced Duration and Volatility Hypothetical portfolio characteristics (9/30/11 - 3/31/8) 5.90 years 3.10% 2.13% 0.73 -5.00 100% Traditional Fixed Income Portfolio Duration Annualized volatility Return Sharpe Max Drawdown 4.23 years 2.64% 2.35% 1.15 -4.92 70% Traditional Fixed Income 30% GLSC ● ● Allocated to credit opportunities in a less volatile strategy Reduced portfolio sensitivity to interest rate risk Source: Morningstar and BlackRock as of 3/31/18. Past performance is no guarantee of future results. The hypotheticals are for illustrative purposes only. These results are not based on actual investments. Not a recommended allocation. This is an illustration of a traditional fixed income portfolio consisting of a 100% allocation to iShares Core U.S. Aggregate Bond ETF. The new portfolio is an illustration of a 30% allocation to BlackRock Global Long/Short Credit Fund Institutional share and 70% to iShares Core U.S. Aggregate Bond ETF. Volatility calculated using annualized standard deviation based on weekly returns. Returns are annualized, including reinvestment of dividends and capital gains. BLACKROCK® FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. USR0418U-470515-1498457 13#14Positioning & Performance USR0418U-470515-1498457#15BLK Global Long/Short Credit Fund Positioning as of 3/31/18 Symbols I: BGCIX A: BGCAX C: BGCCX Exposure Total Longs Total Shorts Gross Net Overall Positioning HY Corporates Bank Loans IG Corporates CDX Securitized Converts & Preferreds Other Government Equity % Notional Market Value 124.14 -46.83 170.97 77.31 % Long % Short % Net 42.92 29.39 27.16 12.50 3.28 0.78 1.01 2.14 4.97 -7.85 -0.01 -15.24 -9.05 0.00 -0.19 -0.47 -2.12 -11.89 35.06 29.38 11.91 3.45 3.28 0.59 0.54 0.02 -6.92 Regional Breakdown Europe North America Emerging Markets Asia Pacific Credit Rating Breakdown AAA AA A BBB BB B CCC & Below Not Rated Other % Long 53.95 63.02 6.01 1.16 Derivatives % Short -17.84 -25.21 -3.07 -0.71 % Long 3.39 1.38 4.45 26.46 28.49 29.34 3.62 3.73 3.13 20.17 % Net 36.12 37.82 2.95 0.45 FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. % Short 0.00 -0.71 -4.73 -1.76 -1.34 -2.02 -0.13 -0.22 -4.01 -31.88 % Net 3.39 0.67 -0.28 24.70 27.15 27.31 3.49 3.51 -0.88 -11.72 As of 3/31/18. Holdings can change at any time and are provided for informational purposes only and should not be deemed as a recommendation to buy or sell the securities mentioned or securities in the industries shown above. Includes only credit positions and excludes all interest rate and currency hedges. Credit Quality Ratings are based on the Barclays methodology - whereas the median of the three rating agencies (Moody's, S&P, Fitch) is used to determine credit rating, while the lower of split ratings is used when an instrument is rated by two agencies. Not Rated may include equities. BLACKROCK USR0418U-470515-1498457 15#16BLK Global Long/Short Credit Fund Positioning as of 3/31/18 Symbols I: BGCIX A: BGCAX C: BGCCX Long and short ideas expressed through idiosyncratic (name-specific) positions and broad market exposures Top Issuer Exposure Long iTraxx European Senior Financials Index iTraxx European Main Index CenturyLink Inc iTraxx European Subordinated Financials Index Next Luxembourg SCSP Valeant Pharmaceuticals International Inc Manta Holdings PLC HSBC Holdings PLC Unicredit SPA Rite Aid Corporation 6.18% 5.55% 2.68% 2.38% 2.27% 1.97% 1.85% 1.70% 1.51% 1.45% Top Issuer Exposure Short iTraxx European Crossover High Yield Index iTraxx European Senior Financials Index JPMorgan Chase & Co U.S. Investment Grade CDX iShares iBoxx High Yield Corporate Bond ETF iTraxx European Senior Financials Index Vodafone Group PLC Celgene Corporation Raytheon Company The Goldman Sachs Group Inc -3.50% -2.92% -2.64% -2.38% -1.99% -1.16% -1.11% -0.96% -0.95% -0.87% As of 3/31/18. Holdings can change at any time and are provided for informational purposes only and should not be deemed as a recommendation to buy or sell the securities mentioned or securities in the industries shown above. Includes only credit positions and excludes all interest rate and currency hedges. BLACKROCK® FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. USR0418U-470515-1498457 16#17BLK Global Long/Short Credit Performance as of 3/31/18 Symbols I: BGCIX A: BGCAX A: BGCAX C: BGCCX Total Returns (%) BLK Global Long/Short Credit Fund (Institutional) BLK Global Long/Short Credit Fund (Inv. A@NAV) BLK Global Long/Short Credit Fund (Inv. A @MSC) Bbg Barclays US Aggregate Bond Index iShares Core US Aggregate Bond ETF (AGG) (Total Return) iShares Core US Aggregate Bond ETF (AGG) (Mkt Price Return) BofA Merrill Lynch 3-Month Treasury Bill MTD* -0.38 BLACKROCK® -0.48 -4.46 1Q18 0.48 2.84 1 3 Year Year -3.63 0.39 2.49 1.32 0.64 -1.46 -1.61 1.20 1.57 2.02 5 Year 1.76 -0.05 0.93 1.20 1.82 0.71 -1.48 1.18 1.13 0.62 -1.49 1.15 1.12 1.77 1.74 0.14 0.35 1.11 0.53 0.34 Since Inception (9/30/11) 2.86 2.60 1.95 1 1 Morningstar Global Long/Short Credit Category Rankings (Institutional Shares) 1 year 30th % ile 3 years 51 st % ile 5 years 27th % ile Morningstar Overall Rating® (Institutional)¹ ★★★ ¹Rated against 35 Global Long/Short Credit Funds, as of 3/31/18, based on risk adjusted total return. Ratings are determined monthly and subject to change. The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) Morningstar Rating metrics. Performance data quoted represents past performance and does not guarantee 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. 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. Investment returns reflect total fund operating expenses, net of all fees, waivers and/or expense reimbursements. Returns include reinvestment of dividends and capital gains. Maximum sales charge for Global Long/Short Credit Fund Investor A is 4.00%. Expenses stated as of the fund's most recent prospectus including Total / Net, Including Investment Related Expenses: Institutional, 1.87% / 1.87%; Investor A, 2.14% / 2.14% / Investment dividend expense, interest expense, acquired fund fees and expenses and certain other fund expenses are included in the Net, Including Investment Related expenses. Other classes of shares with differing fees and expenses are available. BlackRock has agreed to contractually waive or reimburse certain fees and expenses until 11/30/18. Contractual waivers are terminable upon 90 days notice by the fund's independent trustees or majority vote of outstanding fund securities. Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Market returns are based upon the midpoint of the bid/ask spread at 4:00 p.m. Eastern time (when NAV is normally determined for most ETFs), and do not represent the returns you would receive if you traded shares at other times. The expense ratio for AGG is 0.05%. *Performance for periods of less than one year is not annualized. FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. USR0418U-470515-1498457 17#18BLK Global Long/Short Credit Month-by-Month Performance Symbols - I: BGCIX A: BGCAX C: BGCCX 2012 2013 2014 2015 2016 2017 2018 BLK Global Long/Short Credit (Inst'l) BLK Global Long/Short Credit (Inv. A) Bbg Barclays US Aggregate Bond Index BLK Global Long/Short Credit (Inst'l) BLK Global Long/Short Credit (Inv. A) Bbg Barclays US Aggregate Bond Index BLK Global Long/Short Credit (Inst'l) BLK Global Long/Short Credit (Inv. A) Bbg Barclays US Aggregate Bond Index BLK Global Long/Short Credit (Inst'l) BLK Global Long/Short Credit (Inv. A) Bbg Barclays US Aggregate Bond Index BLK Global Long/Short Credit (Inst'l) BLK Global Long/Short Credit (Inv. A) Bbg Barclays US Aggregate Bond Index BLK Global Long/Short Credit (Inst'l) BLK Global Long/Short Credit (Inv. A) Bbg Barclays US Aggregate Bond Index Jan 0.90 0.80 0.88 0.69 0.77 -0.70 0.48 0.48 2.10 0.03 1.16 0.01 1.14 1.48 0.53 -0.51 -0.51 1.38 0.89 0.89 0.20 Feb 0.59 0.49 0.06 BLK Global Long/Short Credit (Inst'l) 0.87 BLK Global Long/Short Credit (Inv. A) 0.87 Bbg Barclays US Aggregate Bond Index -1.15 Mar Apr May Jun Jul Aug 0.20 -0.42 0.66 0.88 0.59 0.20 0.20 0.12 -0.35 0.56 0.87 0.57 -0.55 1.11 0.90 0.04 1.38 0.07 0.13 0.11 0.04 0.50 0.08 0.16 0.89 0.21 -1.06 0.54 0.97 0.10 -1.06 0.42 1.01 -1.78 -1.55 0.14 0.29 0.20 0.67 -0.05 0.01 -0.17 1.25 0.00 1.15 0.00 -0.94 0.46 -0.82 0.62 -0.93 0.62 0.71 0.92 0.38 -0.10 0.00 -0.05 0.49 0.31 0.47 0.19 0.84 1.14 0.00 -0.38 0.00 -0.48 -0.95 0.64 0.38 0.00 -0.94 0.38 0.00 -0.95 -0.36 -0.24 -1.09 0.83 0.41 -0.10 0.83 0.41 -0.10 0.03 1.80 0.29 0.20 0.39 0.00 0.39 0.00 0.77 0.77 -0.10 0.09 0.07 -0.51 0.10 -0.38 0.10 -0.48 0.70 -0.14 0.50 -0.36 0.09 -0.73 0.00 0.00 -0.50 0.48 -0.36 0.09 -0.82 0.09 -0.09 -0.52 0.05 -0.25 1.10 -0.68 0.98 0.71 0.09 1.02 0.61 0.92 0.61 0.63 -0.11 0.58 0.59 0.43 Sep 0.80 Oct Nov Dec YTD 1.22 0.23 1.01 7.07 0.99 6.75 -0.14 4.21 0.22 0.16 0.89 1.11 0.14 0.20 0.96 0.20 0.68 0.28 0.26 0.95 0.81 -0.37 -0.57 0.94 0.27 0.56 -1.34 0.78 -0.19 -1.10 -1.25 0.68 -0.19 -1.12 0.68 -0.26 -0.32 0.02 0.80 -0.10 0.70 0.81 -0.20 0.70 -2.37 0.14 -0.76 0.10 0.10 -0.06 3.74 3.49 -2.02 0.92 0.67 5.97 -1.00 -1.22 0.55 FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. 3.58 3.28 2.65 0.00 0.48 0.58 -0.19 0.20 3.46 0.00 0.39 0.48 -0.19 0.23 3.21 0.90 -0.48 0.06 -0.13 0.46 3.54 Performance for periods less than one year is not annualized. Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Refer to www.blackrock.com to obtain performance data current to the most recent month-end. Returns include reinvestment of dividends and capital gains. Maximum sales charge for Global Long/Short Credit Fund Investor A is 4.00%. Expenses stated as of the fund's most recent prospectus including Total / Net, Including Investment Related Expenses: Institutional 1.87% / 1.87%: Investor A, 2.14% / 2.14%. Investment dividend expense, interest expense, acquired fund fees and expenses and certain other fund expenses are included in the Net, Including Investment Related expenses. Other classes of shares with differing fees and expenses are available. BlackRock has agreed to contractually waive or reimburse certain fees and expenses until 11/30/18. Contractual waivers are terminable upon 90 days notice by the fund's independent trustees or majority vote of outstanding fund securities. 1. Performance for periods of less than one year is not annualized. BLACKROCK USR0418U-470515-1498457 18#19Global Long/Short Credit Attribution Balanced return contribution from U.S. and foreign credit exposures over time Diversified sources of return through multiple investment strategies (traditional, carry, absolute, hedge) Regional Attribution (basis points) 1050 850 650 450 250 50 -150 2011 2012 2013 2014 2015 2016 2017 2018 U.S. Total Europe Total Asia Total EM Total Other ■ BLACKROCK Strategy-Based Attribution (basis points) 1050 850 650 450 250 50 -150 Source: BlackRock, as of 3/31/18. Attribution based on gross returns and does not reflect the deduction of expenses. Emphasis on credit beta Increasing contribution from absolute return strategies 2011 2012 2013 2014 2015 2016 2017 2018 ■Traditional Carry Absolute Hedge Other FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. USR0418U-470515-1498457 19#20Performance Highlights January 2018 February 2018 March 2018 ● ● ● ● ● ● ● ● Contributors Positioning in U.S. investment grade corporates, particularly long financials and short industrials U.S. idiosyncratic long positions, and event related trades in the U.S. and Europe U.S. carry strategies, including bank loans, CLOS, ABS and CMBS Idiosyncratic long and short positions in Europe Directional long U.S. high yield positions Short positions in low beta industrial credits within technology, cable & satellite, healthcare, and tobacco A short position in an investment grade CDX and a short position in a European high yield crossover index Event related trades in the U.S. and Europe U.S. idiosyncratic short positions within technology and pharmaceuticals U.S. carry strategies, particularly bank loans and CLOS, as well as European CLOS European event related trades in the gaming sector U.S. event related trades with a catalyst of liability management or consolidation A thematic trade in the U.S. around hard disk-drive (HDD) consolidation • U.S. idiosyncratic short positions within pharmaceuticals and technology BLACKROCK* ● ● ● ● ● Detractors U.S. equity hedges in the form of ETFs U.S. idiosyncratic short positions in pharmaceuticals and a retailer European event related trade in a telecommunications credit Directional positioning in high yield globally and European investment grade corporates and financials Relative value trades, particularly long positions in energy credits A media consolidation thematic trade Directional positioning in aggregate, more notably global high yield, as well as European investment grade corporates and financials across the capital structure U.S. relative value trades, particularly long positions in energy credits Event related trades in media and telecommunications credit in the U.S. and Europe FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. USR0418U-470515-1498457 20#21Team & Investment Process USR0418U-470515-1498457#22BlackRock Credit - Global Reach with Local Expertise $84 billion in client assets* 165+ total global credit professionals 115+ global investment and research professionals 20 Senior leaders' average years of investment experience 10 offices Newport Beach BLACKROCK* Source: BlackRock, as of 12/31/2017. Chicago Americas 100+ total professionals New York London Munich EMEA 40+ total professionals Gurgaon Singapore. APAC 25+ total professionals FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. Shanghai Tokyo Sydney USR0418U-470515-1498457 22#23An Experienced Team with Global Reach Seasoned and well-resourced team across US, European and Asian fixed income markets provides a deep and broad global information network in order to understand complex and diverse markets ● ● Integrated credit research teams uncover value across regions and credit quality Access to an unparalleled risk management platform Jose Aguilar London Managing Director 13 years investment experience Sovereigns As of 12/31/17 and subject to change. BLACKROCK® GLSC Portfolio Managers Josh Tarnow New York Managing Director, Global Credit 25 years investment experience Head BlackRock Aviation and Bank Loans / CLOS Prior experience: R3 Capital Partners; Lehman Brothers Stephen Gough Supported By Over 80 Portfolio Managers, Traders & Research Analysts Globally Asset-Backed Securities London Director 14 years investment experience Investment Grade Carly Wilson New York Director 14 years investment experience Leveraged Finance FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. USR0418U-470515-1498457 23#24BlackRock Global Long/Short Credit Investment Team PRODUCT STRATEGY Specialized investment strategists provide a link between the investment team and clients Julianne Woodson / Erin Hayes Carly Wilson Director US Asset Allocation Portfolio Construction Dave Delbos US High Yield Allie Selnick US Dan Chen US Absolute Return. Justin Chung Portfolio Construction Portfolio Construction As of 12/31/17 and subject to change. BLACKROCK® US Josh Tarnow Lead Portfolio Manager Managing Director, Global Credit David Taerstein Director US Absolute Return Additional Investment Resources Adrian Marshall US Bank Loans Remi Combeaud European Portfolio Construction Jose Aguilar Managing Director European Asset Allocation Portfolio Construction Scott Snell US CLOS Sahil Shah European Portfolio Construction Aly Hirji European Bank Loans Derek Schoenhofen US Trading Global Credit Research Dedicated professionals provide independent risk management and oversight Reade Ryan / Pranav Sawjiany / Benedict Treloar Connor Daly European Bank Loans RQA Brian Lysiak US Trading Stephen Gough Director European Asset Allocation Portfolio Construction Provides fundamental research across sectors and industries: Teams execute locally while connecting across platforms to identify global opportunities Americas (+45) Europe (+20) Asia (+10) Jeff Soar European CLOS Jeysson Abergel European Trading FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. USR0418U-470515-1498457 24#25Investment Process Integrates Top-Down Relative Value with Bottom-Up Fundamental Analysis Top-Down Assessment Determine the macroeconomic regime and investment thesis which serve as the starting point for our evaluation of issuer fundamentals and credit views Identify top-down investment themes which have the potential to materially affect pricing Inputs: global macroeconomic data, central bank policy, financial conditions, fundamental, technical and valuation considerations across asset classes BLACKROCK* Capital Allocation Assess expected returns and potential drawdown by global asset classes Allocate capital by region, seeking to optimize return while maintaining low volatility Leverage traditional, absolute and hedge strategies and target positively asymmetric upside/downside Hedge strategies used to increase asymmetry of outcomes, manage tail risks and adjust market beta Portfolio Solutions Bottom-Up Idea Generation Trading Bottom-up fundamental and research-led approach with a focus on catalysts ● Research analyst dialogue with companies, issuers, industry professionals, investors, market participants Team discussion on mispricing, catalysts, dynamics and timing Determine relative attractiveness of credit and how our view may differ from consensus BlackRock Global Resources ● • Portfolio Construction Daily Performance/Risk Attribution Feedback Loop PMs work with research teams to populate allocations with individual credit selection or indices (as appropriate) Determine most efficient expression of the credit view Size positions based on guidelines and market themes Risk Management Product Strategy COO FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. Analysis and Review Positions and themes constantly re- underwritten for performance and time horizon Adjust with new information, changes in circumstances and price movement Utilize scenario analysis and stress testing to understand impact of changing market dynamics Monitor overall risk levels and liquidity USR0418U-470515-1498457 25#26BlackRock's Fundamental Credit Analysis Framework We leverage our relationships with issuers, their competitors, customers, suppliers and consultants, our clients and counterparties to develop a global investment perspective Framework combines quantitative assessment of corporate capital structures with qualitative perspective on management and industry positioning Fundamental Analysis Industry Assessment • Macro economic view • Market demand & growth potential Competitive Position • Operating performance & event risk • Revenue/cashflow diversification Management Quality • Experience and depth of resources • Operating track record Financial Position • Ability to pay obligations • Access to capital markets • Liquidity and refinancing needs • Event risk • Investor confidence BLACKROCK® For illustrative purposes only ● ● Desired characteristics Strong management team • Pricing power and ability to maintain/expand margins Free cash flow to reduce debt ● ● Analysis Considerations Key Investment Factors ● Covenants and prudent capital structure Catalyst to reduce credit risk Characteristics to avoid Volatility of revenues/cash flows Seasonal, project-oriented or start-up ventures Poorly defined downside risks Litigation, environment & regulatory issues Weak or shareholder-friendly management teams Industries at a competitive disadvantage ● Significant market presence facilitates analysis • One-on-one company meetings Relationships with industry consultants and outside legal counsel • Favorably impact new issue pricing and covenants with underwriters Source transactions on favorable terms FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. BlackRock Credit View USR0418U-470515-1498457 26#27A Deep Risk Focus and Sell Discipline Enhance the Investment Process Risk management is embedded in BlackRock's culture Dedicated RQA (Risk & Quantitative Analysis) group supports global credit and GLSC specifically Investment process is enhanced with detailed risk analytics covering market, portfolio and position-level risk analysis Emphasis on diversification, liquidity and efficient expression of credit views ● Negative information from proprietary network For illustrative purposes only Credit Risk Assessing the issuer's ability to make whole on debt obligations involves extensive financial statement analysis Concentration Risk Ensuring the portfolio has successfully maximized diversification across issuers, industries and ratings BLACKROCK* Sell discipline is an integral part of credit risk analysis - committed to re-underwriting methodology Publicly-reported negative information for sector or peers Liquidity Risk Analysis of changes in financing costs, liquidation costs, credit conditions, and market activity Primary credit triggers Interest Rate Risk Cognisant of neutral duration profile and potential implications of changing interest rates for global credit markets Portfolio Benchmarking Analysis of portfolio risk as well as beta versus custom index Bond experiences significant price movement Instant first assessment of credit trigger by credit analyst and PMs Decision to ADD, HOLD, or SELL Re-underwriting FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. USR0418U-470515-1498457 27#28Trade Examples USR0418U-470515-1498457#29Case Study: Idiosyncratic Long Event Trade Background Unity Media is a German cable operator owned by Liberty Global with solid fundamentals ● ● ● We believe M&A activity in the German cable space will increase this year and that the company could benefit from a potential acquisition Additionally, we believe an IG buyer could potentially acquire the company Prospect for M&A led to opportunity Bond Price (EUR) 105 100 95 90 85 80 www.yo Jan-16 مرا Apr-16 Jul-16 mun Oct-16 human The Opportunity ● Long Unity Media debt Jan-17 Unity Media Debt Apr-17 We believe there is the potential for a credit upgrade to high single B or low BB as a result of an acquisition We identified bonds with attractive coupons and upside in price and took a long position Jul-17 لسا Oct-17 mur FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. Jan-18 Source: Bloomberg, as of 3/31/18. Trade is represented by a 3.75%, 2027 maturity bond for Unity Media. For illustrative purposes only. As of 3/31/18, the fund had a 0.41% position in Unity Media. BLACKROCK* USR0418U-470515-1498457#30Case Study: Idiosyncratic Short Position Background Within the technology sector, cloud infrastructure, software and services has become an area many companies are focusing on given forward growth projections However, there are sizable differences between some of the various players, both in terms of product capabilities as well as balance sheet capacity to invest Bond Price 109 107 105 103 101 Industry laggard presented deteriorating fundamentals 99 97 95 Sep-17 Oct-17 The Opportunity Nov-17 ● Short Rackspace Debt ● ● We identified a company (Rackspace) that was underperforming competitors from a growth and balance sheet perspective Additionally, we believed Rackspace could be negatively impacted by recent U.S. tax reform around interest expense given their high debt burden After the team identified these potential weaknesses, Rackspace became a short candidate Dec-17 Rackspace Debt Jan-18 Feb-18 Mar-18 Source: Bloomberg, as of 3/31/18. Trade is represented by a 8.625%, 2024 maturity bond for Rackspace Hosting Inc. For illustrative purposes only. As of 3/31/18, the fund had a -0.13% position in Rackspace Hosting. BLACKROCK® FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. USR0418U-470515-1498457#31Case Study: Event Trade / Liability Management Background In late 2017 Walgreens received regulatory clearance for a deal to acquire 50% of Rite Aid's stores for $4.4 billion ● ● Rite Aid announced it would use the proceeds from the Walgreens deal to de-lever its balance sheet In February 2018, Rite Aid agreed to go through a merger with Albertson's Strengthening credit with positive catalyst Bond Price 110 105 100 95 90 85 Sep-17 Oct-17 Nov-17 Dec-17 The Opportunity ● Long Rite Aid Debt Rite Aid Debt We identified multiple bonds within the Rite Aid capital structure that were attractive and took a long position We hedged the long exposure with a small equity short position and CDS to minimize downside risk Jan-18 Feb-18 Mar-18 Source: Bloomberg, as of 3/31/18. Trade is represented by a 6.125%, 2023 maturity bond for Rite Aid Corporation. For illustrative purposes only. As of 3/31/18, the fund had a 1.17% position in Rite Aid Corporation. BLACKROCK® FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. USR0418U-470515-1498457 31#32Important Notes Important Risks of the Fund: The fund is actively managed and its characteristics will vary. Bond values fluctuate in price so the value of your investment can go down depending on market conditions. Two main risks related to fixed income investing are interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in the market value of bonds. Credit risk refers to the possibility the bond issuer will not be able to make principal and interest payments. The principal on mortgage- or asset-backed securities normally may be prepaid at any time, which will reduce the yield and market value of those securities. US obligations are supported by varying degrees of credit but generally are not backed by the full faith and credit of the US government. Investments in non-investment-grade debt securities ("high- yield" or "junk" bonds) may be subject to greater market fluctuations and risk of default or loss of income and principal than securities in higher rating categories. Investing in derivatives entails specific risks relating to liquidity, leverage and credit that may reduce returns and/or increase volatility. Compared to a traditional long-only portfolio, the potential for volatility (compared to the market and the fund's benchmark) is anticipated to be greater given the fund's additional long exposure along with the short exposure. The fund may actively engage in short-selling, which entails special risks. If the fund makes short sales in securities that increase in value, the fund will lose value. Any loss on short positions may or may not be offset by investing short-sale proceeds in other investments. The fund may engage in active and frequent trading of it's portfolio securities which may result in short term capital gains or losses that could increase an investor's tax liability. For a complete list of fund risks, please see the prospectus. This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of 3/31/18 and may change as subsequent conditions vary. Individual portfolio managers for BlackRock may have opinions and/or make investment decisions that, in certain respects, may not be consistent with the information contained in this report. The information and opinions contained in this material 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. Past performance is no guarantee of future results. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. This material is not intended to be a recommendation or advice by BlackRock. If this material were construed to be a recommendation by Black Rock, BlackRock would seek to rely on Department of Labor Regulation Section 2510.3-21(c)(1). As such, by providing this material to you, a plan fiduciary that is independent of BlackRock, BlackRock does not undertake to provide impartial investment advice or give advice in a fiduciary capacity. Further, BlackRock receives revenue in the form of advisory fees for our mutual funds and exchange traded funds and management fees for our collective investment trusts. Please ask your clients to 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 and iShares ETFs, by calling 800-882-0052 or at www.blackrock.com/funds and www.ishares.com/us. The prospectus and, if available, the summary prospectus should be read carefully before investing. BLACKROCK* FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. USR0418U-470515-1498457 32#33Important Notes iShares ETFs are not sponsored, endorsed, issued, sold, or promoted by Markit Indices Limited, nor does this company make any representation regarding the advisability of investing in the Funds. BlackRock is not affiliated with Markit Indices Limited. Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Market returns are based upon the midpoint of the bid/ask spread at 4:00 p.m. Eastern time (when NAV is normally determined for most ETFs), and do not represent the returns you would receive if you traded shares at other times. Morningstar disclosure: 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 against the following number of U.S.-domiciled Long-Short Credit funds over the following time periods: 35 in the last 3 years and 14 in the last 5 years. With respect to these Long-Short Credit funds, the fund received a Morningstar Rating of 3- and 4 stars for the 3 and 5-year periods, respectively. Other classes may have different performance. Prepared by Black Rock Investments, LLC, member FINRA ©2018 BlackRock, Inc. All rights reserved. BLACKROCK, ISHARES and SO WHAT DO I DO WITH MY MONEY? are registered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners. BLACKROCK* FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. USR0418U-470515-1498457 33#34Appendix USR0418U-470515-1498457#35Seeks to Minimize Interest Rate Risk BLK Global Long/Short Credit Performance Across Rate Regimes Average Returns Across Different Rate Regimes (9/30/11-3/31/18) Rising Flat Total Return (%) 5 4 3 -2 0.83 -1.64 0.61 0.62 BLK Global L/S Credit (Inst) Falling -0.10 2.20 Bbg Barclays US Agg Bond Overall 2.96 2.13 Source: Morningstar, Federal Reserve; from fund inception 9/30/11 to 3/31/18. Past performance is no guarantee of future results. Performance of Global Long/Short Credit Fund Institutional Shares. Rate period returns are an average of cumulative returns, with periods represented by change in the 10-year Treasury yield. Since inception return of fund vs. the index is annualized, including reinvestment of dividends and capital gains. Index performance is for illustrative purposes only. It is not possible to invest directly in an unmanaged index. Rising Rate Periods: Counts period if <= 60 day period with at least a 40 bp increase in 10-year Treasury from start date to end date; 10/1/11 to 10/27/11, 1/31/12 to 3/19/12, 7/25/12 to 9/14/12, 11/16/12 to 2/13/13, 5/1/13 to 7/5/13, 10/23/13 to 12/31/13, 1/30/15 to 3/6/15, 4/3/15 to 6/10/15, 9/7/2016 to 11/30/2016, 9/7/2017 to 10/26/2017, 11/6/2017 to 1/30/2018. Flat Rate Periods: Ending date rate must be within +/- 2 bps of start date rate, period must be at least 30 days and no more than 90 days (business days), variance of rate in the periods must be +/- 15 bps from start date rate on each date over the period (ensures minimal volatility over the period as a whole); 11/17/11 to 3/6/12, 6/5/12 to 8/1/12, 10/10/12 to 12/14/12, 1/3/13 to 3/25/13, 6/25/13 to 8/12/13, 9/25/13 to 11/7/13, 1/30/14 to 4/29/14, 5/16/14 to 9/30/14, 10/22/14 to 12/8/14, 8/3/15 to 10/30/15, 11/4/15 to 12/31/15, 2/2/16 to 3/28/16, 3/30/16 to 5/31/16, 6/16/16 to 8/31/16, 12/9/2016 to 1/31/2017, 2/6/2017 to 3/31/2017, 4/18/17 to 6/21/17, 6/22/17 to 8/30/17, 9/29/17 to 11/28/17, 1/31/18 to 3/29/18. Falling Rate Periods: Counts period if <=60 day period with at least a 40 bp decline in 10-year Treasury rate from start date to end date; 10/27/11 to 12/19/11, 3/19/12 to 6/1/12, 3/11/13 to 5/2/13, 9/5/13 to 10/23/13, 12/31/13 to 3/3/14, 9/18/14 to 10/15/14, 11/6/14 to 1/30/15, 6/10/15 to 8/24/15, 11/9/2015 to 1/29/16, 3/13/17 to 5/31/17. BLACKROCK FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. USR0418U-470515-1498457 35#36Less Volatile Returns in Spite of Choppy Markets The fund's long/short strategy offered more stability during the worst days for the broader fixed income markets Date 7/5/13 11/9/2016 12/3/15 3/2/17 1/19/17 2/1/18 6/20/13 8/25/15 1/25/17 6/19/13 3/6/15 11/14/16 5/18/16 3/14/12 11/8/13 All figures are in bps BLK Global BLK Global Long/Short Credit (1) Long/Short Credit (A) +9 0 +10 +10 +20 +10 -19 +29 +20 0 +9 -30 +10 +10 -9 +10 0 +19 +20 +10 +0 -19 +29 +20 0 +9 -30 0 0 +1 Bbg Barclays US Aggregate Bond -101 -98 -72 -69 -68 -68 -62 -61 -61 -60 -59 -58 -57 -57 -56 Morningstar Intermediate-Term Bond Funds -91 -83 -62 -54 -59 -53 -73 -39 -46 -55 -50 -40 -46 -47 -49 Morningstar Short- Term Bond Funds FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. -25 -15 -13 -18 -17 -5 -24 -8 -12 -22 -17 -16 -16 -13 -11 Source: Morningstar. As of 3/31/18. Based on daily returns of the Bbg Barclays US Aggregate Bond Index since the fund's inception (9/30/11). Index performance is for illustrative purposes only. It is not possible to invest directly in an unmanaged index. Past performance is no guarantee of future results. BLACKROCK USR0418U-470515-1498457 36#37Derivative Usage, Instruments and Risks Management of credit risk while minimizing other risk factors The hedging process for interest rate and currency risks is separate from the credit decision • Hedges are carefully identified and managed based on asset type Hedges Active Credit Decisions Instrument FX forwards Treasury futures Bund futures UK Gilt futures Interest rate cap Interest rate options CDS CDX/iTraxx Equity index futures Equity index options Total return swaps BLACKROCK* Reason for Use Hedge non-US currency risk back to USD Hedge duration for US bond investments Hedge duration for European bond investments Hedge duration for UK bond investments Hedge duration for select non-US investments Hedge duration for select US bond investments Express a long or short credit view on an issuer or hedge a long position Gain or hedge asset class exposures via an equally-weighted index of CDS Hedge portfolio credit risk Hedge portfolio credit risk Hedge credit risk/convertible bond option premium or express a negative view on a stock Risks Foreign currency risk FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. Interest rate risk Market risk Liquidity risk Credit risk Counterparty risk Market risk Counterparty risk Market risk Counterparty risk USR0418U-470515-1498457 37#38Biographies Josh Tarnow, Managing Director, is the is the lead PM of BlackRock's Aviation funds, manager of the Bank Loans & CLO businesses, and a member of Global Credit. Prior to joining BlackRock in 2009, Mr. Tarnow was a Senior Partner and head of Aviation and Private Investment at R3 Capital. Prior to R3, he was a Managing Director and head of the Aviation Group for Lehman Brothers' Global Principal Strategies team, which he joined in 2006. He built a unique business model that included a fleet of corporate and commercial aircraft, private equity investments, and a trading platform with positions in the credit, equity, and structured volatility markets of the aerospace sector. In 2003, Mr. Tarnow formed the Aviation Finance Group within the firm's Fixed Income Division. Earlier in his 17-year career at Lehman Brothers, Mr. Tarnow was a member of the Corporate Bond Trading Desk and traded in sectors including Industrials, Utilities, and Transportation. Mr. Tarnow earned a BA degree from the University of Wisconsin-Madison in 1990. Jose Aguilar, Managing Director, is a senior portfolio manager in Global Credit. Prior to joining BlackRock in 2009, Mr. Aguilar was a senior research analyst at R3 Capital Partners focusing on Leverage Finance and Special Situations. He began his career at Lehman Brothers in 2005 in the Mergers and Acquisitions Group covering Financial Institutions and subsequently moved to Global Principal Strategies (GPS). Mr. Aguilar earned degrees in business administration and law from Universidad Pablo de Olavide in Seville, Spain. Stephen Gough, Director, is a senior portfolio manager in Global Credit. Prior to joining BlackRock in 2014, Mr. Gough was a portfolio manager for cyclical and industrial companies at Goldentree Asset Management. Earlier he was with Claren Road Asset Management where he was a senior analyst for European corporates. He joined Claren Road from UBS, where he was a publishing credit analyst. Before taking on that role, he was a chartered accountant with Moore Stephens in London. Mr. Gough earned a BA degree in geography from the University of Oxford in 2000. Carly Wilson, Director, is a senior Portfolio Manager in Global Credit. Previously she focused on bank loan strategies. Prior to joining BlackRock in 2009, Ms. Wilson was an Associate and trader in at R3 Capital Partners. From 2004-2008 she was with Lehman Brothers, in Equity Trading and then the Global Principal Strategies team, focusing on capital structure arbitrage across sectors. Ms. Wilson earned a BS in Economics from the University of Pennsylvania's Wharton School of Business in 2004. As of 12/31/17 BLACKROCK* FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE GENERAL PUBLIC. USR0418U-470515-1498457 38