U.S. Mortgage Fund | BMPAX

Overview

About this Fund

Seeking Income in Mortgages
Access BlackRock's Deep Bond Expertise
A History of Risk-Adjusted Income and Returns

Investment Approach

Invests primarily in mortgage-related securities of any maturity, including U.S. government securities, U.S. government agency securities, securities issued by U.S. government instrumentalities and U.S. government-sponsored enterprises and other mortgage-backed securities or mortgage-related securities issued by the U.S. government or by private issuers.

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Performance

Returns

Average Annual
Cumulative
Calendar Year

	1y	3y	5y	10y
Total Return (%) Total return represents changes to the NAV and accounts for distributions from the fund. as of Dec 31, 2019	6.60	3.18	2.61	4.38
Return w/ Sales Charge (%) Max Sales Charge: - as of Dec 31, 2019	2.34	1.79	1.78	3.96
Benchmark (%) Index: Bloomberg Barclays US Mortgage Backed Securities Index.<br /><br /> Index returns are for illustrative purposes only. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. as of Dec 31, 2019	6.35	3.25	2.58	3.15
Morningstar Category Avg. (%) Intermediate Core Bond as of Dec 31, 2019	8.06	3.59	2.72	3.55
Morningstar Ranking Rankings are based on total return excluding sales charges, independently calculated and not combined to create an overall ranking. as of Dec 31, 2019	370/430	292/382	194/327	-
Morningstar Quartile Rankings based on total return excluding sales charges, independently calculated and not combined to create an overall ranking. as of Dec 31, 2019	4	4	3	1
Lipper Category Avg. (%) US Mortgage Funds as of Dec 31, 2019	6.47	3.25	2.48	3.28
Lipper Ranking Rankings are based on total return excluding sales charges. as of Dec 31, 2019	29/123	47/109	35/100	-
Lipper Quartile Rankings are based on total return excluding sales charges. as of Dec 31, 2019	1	2	2	-

Missing average annual returns data

	YTD	1m	3m	1y	3y	5y	10y
Total Return (%) Total return represents changes to the NAV and accounts for distributions from the fund. as of Dec 31, 2019	6.60	0.23	0.69	6.60	9.86	13.77	53.58
Return w/ Sales Charge (%) Max Sales Charge: - as of Dec 31, 2019	2.34	-3.78	-3.34	2.34	5.46	9.22	47.44
Benchmark (%) Index: Bloomberg Barclays US Mortgage Backed Securities Index.<br /><br /> Index returns are for illustrative purposes only. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. as of Dec 31, 2019	6.35	0.28	0.71	6.35	10.06	13.59	36.42
Morningstar Category Avg. (%) Intermediate Core Bond as of Dec 31, 2019	8.06	-0.07	0.12	8.06	11.18	14.34	41.73
Lipper Category Avg. (%) US Mortgage Funds as of Dec 31, 2019	6.47	0.12	0.51	6.47	10.09	13.10	38.51

Missing cumulative returns data

	2015	2016	2017	2018	2019
Total Return (%) Total return represents changes to the NAV and accounts for distributions from the fund.	1.19	2.34	2.64	0.40	6.60
Benchmark (%) Index: Bloomberg Barclays US Mortgage Backed Securities Index<br /><br /> Index returns are for illustrative purposes only. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.	1.51	1.67	2.47	0.99	6.35
Morningstar Category Avg. (%) Intermediate Core Bond	-0.26	3.23	3.71	-0.50	8.06

Missing calendar year returns data

The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. The performance information for periods prior to the inception date of the share class is based on the Fund’s Institutional Shares, adjusted to reflect the fees and expenses applicable to such share class. See the fund prospectus for more details.

Growth of Hypothetical $10,000 The growth of hypothetical $10,000 chart reflects a hypothetical $10,000 investment and assumes reinvestment of dividends and capital gains. Fund expenses, including management fees and other expenses were deducted.

Performance chart data not available for display.

Growth of Hypothetical $10,000
Historical NAVs

U.S. Mortgage Fund ($)

Cum. Fund Perf. Since Inception: 97.04

Source: Lipper. Data reflects different methodology from the BlackRock calculated returns in the Returns tab. The $10,000 Hypothetical Over Time chart reflects a hypothetical $10,000 investment in the investor class of shares noted and does not assume the max sales charge. Had sales charge been included, returns would have been lower. The chart uses total return NAV performance and assumes reinvestment of dividends and capital gains. Fund expenses, including 12b-1 fees, management fees and other expenses were deducted. Performance for other share classes will vary.

Historical NAVs

Distributions

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Recent
Calendar Year

Chart
Table

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Ex-Date	Payable Date	Record Date	Total Distribution Current year distributions are not classified as “Income,” “Short-Term Capital Gains,” “Long-Term Capital Gains,” or “Return of Capital” until approximately 60 days following calendar year-end.	Income	ST Cap Gains	LT Cap Gains	Return of Capital

Chart
Table

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Year	Total Distribution Current year distributions are not classified as “Income,” “Short-Term Capital Gains,” “Long-Term Capital Gains,” or “Return of Capital” until calendar year-end.	Income	ST Cap Gains	LT Cap Gains

Past distributions are not indicative of future distributions.
Click here, for the most recent distributions.

21 of 24 U.S. bond funds, accounting for 98% of our active mutual fund assets, outperformed within their Morningstar peer groups. Based on institutional share class.^*

Key Facts

Size of Class (Millions) as of Jan 23, 2020 $26.4 M

Size of Fund (Millions) as of Jan 23, 2020 $287.3 M

Share Class launch date Dec 06, 2010

Asset Class Fixed Income

Morningstar Category Intermediate Core Bond

Lipper Classification US Mortgage Funds

Benchmark Index Bloomberg Barclays US Mortgage Backed Securities Index

CUSIP 56166L105

Distribution Frequency How often a distribution is paid by the fund. The most common distribution frequencies are annually, biannually and quarterly. None

Number of Holdings as of Dec 31, 2019 466

Max Offer Price as of Jan 23, 2020 $10.70

Open to New Investors Yes

Turnover Percent as of Dec 31, 2019 841%

Portfolio Characteristics

Alpha (3y) Compared to FTSE Mortgage Index. Alpha is calculated at the portfolio level. A measure of performance on a risk-adjusted basis. Alpha takes the volatility (price risk) of a mutual fund and compares its risk-adjusted performance to a benchmark index. The excess return of the fund relative to the return of the benchmark index is a fund's alpha. as of Dec 31, 2019 0.03

R-Squared (3y) as of Dec 31, 2019 93.73

Beta (3y) as of Dec 31, 2019 0.87

30 Day SEC Yield A standard calculation of yield introduced by the SEC in order to provide fairer comparison among funds. This yield reflects the interest earned after deducting the fund's expenses during the most recent 30-day period by the average investor in the fund. Negative 30-Day SEC Yield results when accrued expenses of the past 30 days exceed the income collected during the past 30 days. as of Dec 31, 2019 2.29%

Unsubsidized 30-Day SEC Yield Represents what a fund's 30-Day SEC Yield would have been had no fee waiver or expense reimbursement been in place over the period. as of Dec 31, 2019 2.09%

Yield to Maturity Yield to Maturity (YTM) is the discount rate that equates the present value of a bond's cash flows with its market price (including accrued interest). The Fund Average YTM is the weighted average of the fund's individual bond holding YTMs based upon Net Asset Value ('NAV'). The measure does not include fees and expenses. For callable bonds, YTM is the yield-to-worst. as of Dec 31, 2019 3.08%

Yield to Worst The average rate of return of the portfolio at current market prices, adjusting for optionality. as of Dec 31, 2019 3.11%

Effective Duration Effective Duration measures the sensitivity of the price of a bond with or without embedded options to changes in interest rates, taking into account the likelihood of the bond being called, put and/or sunk prior to its final maturity date while incorporating after-tax impacts on the bond. The options-based duration model used by BlackRock employs certain assumptions and may differ from other fund complexes. Effective Duration is measured at the individual bond level, aggregated to the portfolio level, and adjusted for leverage, hedging transactions and non-bond holdings, including derivatives. as of Dec 31, 2019 3.05 yrs

Weighted Average Life Nominal Weighted Average Life is shown. Weighted Average Life is the average number of years for which each dollar of unpaid principal on a loan or mortgage remains outstanding. as of Dec 31, 2019 7.20 yrs

Best 3-Month Return Over the Last 3 Years 3 months ending Jan 31, 2019 3.15%

Worst 3-Month Return Over the Last 3 Years 3 months ending Feb 28, 2018 -1.43%

Fund Standard Deviation (3y) as of Dec 31, 2019 1.95

For the latest month-end Distribution Yield, click here.

This information must be preceded or accompanied by a current prospectus. For standardized performance, please see the Performance section above.

Fees

as of current prospectus

Gross Expense Ratio	1.91%
Net Expense Ratio The difference between gross and net expense ratios are due to contractual and/or voluntary waivers, if applicable. Any applicable contractual waiver will be terminable upon 90 days’ notice. BlackRock may agree to voluntarily waive certain fees and expenses, which the adviser may discontinue at any time without notice. For this share class, the contractual waiver end date is Aug 31, 2020.	1.69%

Net Expense Ratio excluding Investment Related Expenses is 0.70%

Ratings

Lipper Leader

Lipper Leader Ratings

Consistent Return U.S. Mortgage Fund received the following Consistent Return ratings for the 3-, 5-, and 10-year periods, respectively: 3 (109 funds), 4 (100 funds), and - ( funds). Lipper ratings for Consistent Return reflect funds' historical risk-adjusted returns, adjusted for volatility, relative to peers.

Expense U.S. Mortgage Fund received the following Expense ratings for the 3-, 5-, and 10-year periods, respectively: 4 (50 funds), 4 (49 funds), and - ( funds). Lipper ratings for Expense reflect funds' expense minimization relative to peers with similar load structures.

Preservation U.S. Mortgage Fund received the following Preservation ratings for the 3-, 5-, and 10-year periods, respectively: 4 (5,840 funds), 5 (5,100 funds), and - ( funds). Lipper ratings for Preservation reflect funds' historical loss avoidance relative to other funds within the same asset class. Preservation ratings are relative, rather than absolute, measures, and funds named Lipper Leaders for Preservation may still experience losses periodically; those losses may be larger for equity and mixed equity funds than for fixed income funds.

Total Return U.S. Mortgage Fund received the following Total Return ratings for the 3-, 5-, and 10-year periods, respectively: 3 (109 funds), 4 (100 funds), and - ( funds). Lipper ratings for Total Return reflect funds' historical total return performance relative to peers.

Overall Lipper Leaders ratings based on an equal-weighted average of percentile ranks for each measure over 3-, 5-, and 10-year periods (if applicable) and do not take into account the effects of sales charges for these categories (Consistent Return, Preservation, Total Return, Expense, and Tax Efficiency) as of Dec 31, 2019 out of 109, 5,840, 109, 50 and 109 Funds, respectively in Lipper's US Mortgage Funds classification.

Morningstar Analyst Rating

Morningstar has awarded the Fund a Bronze medal. Fewer than 10% of US open-end funds hold medalist ratings. (Effective Apr 23, 2019) ‡

Holdings

as of Dec 31, 2019

Name	Weight (%)
UMBS 30YR TBA(REG A)	39.13
GNMA2 30YR TBA(REG C)	10.81
GNMA2 30YR 2016 PRODUCTION	9.85
GNMA2 30YR 2019 PRODUCTION	5.19
UMBS 30YR TBA	4.82

Name	Weight (%)
UMBS 15YR TBA(REG B)	2.12
GNMA2 30YR 2017 PRODUCTION	1.87
FORD0_19-B A4	1.33
FNMA 30YR 4% LLB 85K 2016	1.33
FNMA 30YR 4.5% MLB 125K 2018	1.30

as of Dec 31, 2019

% Notional Exposures % of Notional Exposures is a breakdown designed to represent a fund’s ownership of both traditional fixed income securities and derivatives including, but not limited to, futures, options and swap contracts. For traditional fixed income securities, there is no difference between the market value and the notional exposure. For derivatives, the notional exposure represents the exposure to the underlying assets plus the value of the financing (or lending) associated with the implementation of these derivatives. The sum of all exposures (both market value and notional exposure) is equal to the fund’s net asset value (open-end) or net managed assets (closed-end). Net Derivatives represents the approximate net notional value of the longs less the short derivatives held in the fund.

Type	Fund	Benchmark	Net

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as of Dec 31, 2019

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as of Dec 31, 2019

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as of Dec 31, 2019

% Market Value

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Allocations subject to change.

as of Dec 31, 2019

% Market Value

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as of Dec 31, 2019

Type	Fund	Benchmark	Net

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as of Dec 31, 2019

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The fund itself has not been rated by an independent rating agency. Credit quality ratings on underlying securities of the fund are received from S&P, Moody’s and Fitch and converted to the equivalent S&P major rating category. This breakdown is provided by BlackRock and takes the median rating of the three agencies when all three agencies rate a security the lower of the two ratings if only two agencies rate a security and one rating if that is all that is provided. Unrated securities do not necessarily indicate low quality. Below investment-grade is represented by a rating of BB and below. Ratings and portfolio credit quality may change over time.

Negative weightings may result from specific circumstances (including timing differences between trade and settle dates of securities purchased by the funds) and/or the use of certain financial instruments, including derivatives, which may be used to gain or reduce market exposure and/or risk management. Certain transactions the funds may utilize may give rise to a form of leverage through either (a) additional market exposure or (b) borrowing capital in an attempt to increase investment return. The use of such transactions includes certain leverage-related risks, including potential for higher volatility, greater decline of the fund’s net asset value and fluctuations of dividends and distributions paid by the fund.

Allocations are subject to change.

Portfolio Managers

Lead Portfolio Manager, Mortgage Portfolios

Portfolio Manager, Mortgage Portfolios

Portfolio Manager

Read the Team's Commentary

Literature

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Important Information

Carefully consider the Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses which may be obtained by visiting the iShares Fund and BlackRock Fund prospectus pages. Read the prospectus carefully before investing.

BlackRock offers investments across a comprehensive range of asset classes and exposures, addressing investor needs with respect to growth, income, and capital preservation.

Source: BlackRock and Morningstar as of 9/30/19.
^*Based on 5-year performance. 21 of 24 fixed income funds outperformed their respective Morningstar category median 5-year performance. 21 of 24 fixed income funds accounts for 88% of BlackRock active fixed income mutual funds. Over the 1, 3, 5 and 10-year periods, 14, 19, 21 and 19 of BlackRock fixed income funds outperformed the Morningstar category median. 22 funds have 5-year performance track records. Based on institutional share classes of BlackRock open-end taxable and tax-free fixed income funds (based on 24 funds). 98% statistic based on $71.1B out of $72.9B AUM of all institutional share classes of the funds. Strategic Income Opportunities Fund (institutional share class) AUM is $22.7B which accounts for 31% of the total $72.9B AUM of funds that outperformed their Morningstar category median 5-year performance.

^†Source: BlackRock and Morningstar. As of 5/31/18. Current fee rankings may vary based on recent and frequent prospectus updates to the funds within the respective Morningstar categories. Expenses are based on the funds’ most recent prospectus net expense ratios, excluding investment dividend expense, interest expense, and certain other fund expenses. Morningstar category net expense ratio also excludes these expenses. Includes active open-end taxable and tax-free fixed income mutual funds only, and excludes index funds. Analysis based only on institutional shares of BlackRock active retail fixed income funds vs. institutional shares of active fixed income funds within their respective Morningstar categories. 88% of BlackRock active fixed income funds are in the lowest fee quartile (22 out of 25 funds). Based on 25 BlackRock active taxable and tax-free funds. Institutional shares may not be available to all retail investors. Performance for different share classes may vary.

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.

Fixed income risks include interest-rate and credit risk. 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.

Principal of mortgage- or asset-backed securities normally may be prepaid at any time, reducing the yield and market value of those securities.

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.

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.

Short-selling 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.

‡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, that 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 Gold, Silver, or Bronze reflects the Manager Research Group’s conviction in a fund’s prospects for outperformance. Analyst Ratings ultimately 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, including 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.

Performance results reflect past performance and are no guarantee of future results. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvestment of all dividends. Performance information shown without sales charge would have been lower if the applicable sales charge had been included. Performance during periods of exceptional market conditions should not be expected to be repeated in a normal market environment. Current performance may be lower or higher than the performance data quoted.

Performance shown for certain share classes of certain funds is synthetic, pre-inception performance leveraging the performance of a different share class of the fund. When evaluating fund performance, it is important to note that it does not represent actual performance of such share class. All performance after inception of the share class is actual performance. For details regarding which funds and share classes leverage synthetic, pre-inception performance, please visit this page.

Investing involves risk, including possible loss of principal.

Fund details, holdings and characteristics are as of the date noted and subject to change.

Yields are based on income earned for the period cited and on the Fund's NAV at the end of the period.

Some BlackRock funds make distributions of ordinary income and capital gains at calendar year end. Those distributions temporarily cause extraordinarily high yields. There is no assurance that a fund will repeat that yield in the future. Subsequent monthly distributions that do not include ordinary income or capital gains in the form of dividends will likely be lower.

The Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).

© 2020 BlackRock, Inc. All rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, BUILD ON BLACKROCK, ALADDIN, iSHARES, iBONDS, iSHARES CONNECT, FUND FRENZY, LIFEPATH, SO WHAT DO I DO WITH MY MONEY, INVESTING FOR A NEW WORLD, BUILT FOR THESE TIMES, the iShares Core Graphic, CoRI and the CoRI logo are registered and unregistered trademarks of BlackRock, Inc., or its subsidiaries in the United States and elsewhere. All other marks are the property of their respective owners.

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