Form 497K BLACKROCK FUND
Main investment strategies of the Fund
The Fund seeks to achieve its investment objective by investing primarily in a diversified portfolio of equity securities. Under normal circumstances, the Fund will invest at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in equity securities and equity-linked instruments, including bonds linked to bonds. actions. The Fund may invest in securities of companies of any market capitalization, but will generally focus on large capitalization securities. The Fund may invest up to 50% of its assets in equity-linked bonds that provide exposure to equities and covered call options or other types of financial instruments.
With respect to investments in shares of the Fund, the Fund may invest in common stocks, preferred stocks, securities convertible into common and preferred stocks, non-convertible preferred stocks and certificates of deposit. The Fund generally intends to invest in dividend paying stocks. From time to time, the Fund may invest in shares of companies through initial public offerings (“IPOs”). The Fund may invest in securities of any country, including emerging markets. The Fund may invest in securities denominated in both US dollars and currencies other than US dollars. BlackRock selects investments for the Fund which it believes will provide current income and gains.
The Fund’s portfolio as a whole will be structured to generate high current income while maintaining prospects for capital appreciation.
The Fund intends to employ a strategy of writing (writing) covered call and put options on common stocks, securities indices, securities sectors and baskets of securities, primarily by means of structured notes. This options strategy aims to generate ongoing gains on option premiums as a means of improving the distributions payable to shareholders of the Fund. As the Fund writes more covered call options, its ability to profit from capital appreciation becomes more limited and the total return of the Fund may deviate further from the returns of the Russell 1000.® Value Index, a benchmark index for all stocks. The Fund seeks to generate a high level of current income from dividends and premiums on writing options.
The Fund may invest in Master Limited Partnerships (“MLPs”) which are generally in energy and financial related industries and in US and non-US Real Estate Investment Trusts (“REITs”), as well as structured products, including equity linked bonds, to maximize the Fund’s current income.
The Fund may engage in active and frequent trading in portfolio securities to achieve its main investment strategies.
Main risks of investing in the Fund
Risk is inherent in any investment. The value of your investment in the Fund, as well as the amount of return you receive on your investment, can fluctuate significantly from day to day and over time. You may lose some or all of your investment in the Fund or your investment may not perform as well as other similar investments. The following is a summary description of the main risks associated with an investment in the Fund. The order of risk factors below does not indicate the importance of any particular risk factor.
|■||Risk associated with convertible securities – The market value of a convertible security behaves like that of an ordinary debt security; that is, if market interest rates rise, the value of a convertible security typically decreases. In addition, convertible securities are subject to the risk that the issuer will not be able to pay interest or dividends when due, and their market value may change depending on changes in the credit rating of the issuer or the market’s perception of the issuer’s creditworthiness. Since it derives part of its value from the ordinary share into which it can be converted, a convertible security is also subject to the same types of market and issuer risks as those which apply to the ordinary share under -jacent.|
|■||Risk associated with certificates of deposit – Certificates of deposit are generally subject to the same risks as the foreign securities that they attest or into which they can be converted. In addition to the investment risks associated with the underlying issuer, certificates of deposit expose the Fund to additional risks related to non-uniform terms that apply to certificate of deposit programs, credit exposure of the custodian bank and to the sponsors and other parties with which the custodian bank establishes the programs, the currency risk and the risk of an illiquid market for certificates of deposit. Issuers of unsponsored certificates of deposit are under no obligation to disclose information that in the United States is considered material. Therefore, there may be less information available regarding these issuers and there may not be any correlation between this information and the market value of the certificates of deposit.|
|■||Derivatives risk – The use of derivative instruments by the Fund may increase its costs, reduce the Fund’s returns and / or increase volatility. Derivatives involve significant risks, including:|