Bond prices may change in response to a variety of factors not solely related to interest rates.
The two main risks related with bond investing are 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. Historically, traditional bond funds have been dominated by interest rate risk. Flexible bond strategies, like the Fund's, have the ability to actively manage the level of interest rate risk and assume more credit risk through exposure to securities such as high yield bonds, securitized assets and foreign debt.
All data as of based on Institutional shares. Institutional shares have limited availability and may be purchased at various minimums. See prospectus for details.
All data in the “Performance” tab is since September 30, 2011, the Fund’s inception. Traditional Bonds are represented by the iShares Core US Aggregate Bond Fund. Interest rates are represented by the United States 10-Year Constant Maturity Treasury Rate.
Volatility refers to annualized standard deviation of daily returns for the trailing 30 days. Standard deviation is a measure of the dispersion of an investment's actual returns compared to its expected returns. Standard deviation is only one element of risk. Other risk factors should be considered.
Returns on the "Performance" tab are cumulative from 9/30/11. The chart shows the growth of a $10,000 investment in the Fund's Institutional shares made on 9/30/11. Click the links beneath the charts for standardized returns.
The basis for referring to the Fund's performance as being independent of rates is that the Fund does not follow the trends of the Bloomberg Barclays US Aggregate Bond Index (which tends to move in opposite directions as interest rates). Since inception, the Fund has had a correlation of -0.18 to the Bloomberg Barclays US Aggregate Bond Index as of .
Traditional Bonds in the "Implementation" tab are represented by the iShares Core US Aggregate Bond Fund.
You should consider the investment objectives, risks, charges and expenses of iShares and BlackRock mutual funds carefully before investing. The prospectuses and, if available, the summary prospectuses contain this and other information about the funds and are available, along with information on other BlackRock funds, by visiting www.blackrock.com/funds or ishares.com. The prospectuses and, if available, summary prospectuses should be read carefully before investing.
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Prepared by BlackRock Investments, LLC, member FINRA.