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brf25:S000018357Member brf25:ClassRsharesMember rr:AfterTaxesOnDistributionsAndSalesMember brf25:C000050815Member 2012-01-29 2013-01-28 0001398078 brf25:S000018357Member brf25:ClassRsharesMember 2012-01-29 2013-01-28 pure iso4217:USD 2013-01-28 485BPOS BlackRock Funds II 0001398078 2013-01-28 2013-01-28 false 2012-09-30 0.04 0 0 0 0 0.045 0.01 0 0.0054 0.0054 0.0054 0.0054 0.0025 0.01 0.01 0 0.0027 0.0034 0.0028 0.0028 0.0106 0.0188 0.0182 0.0082 0.0106 0.0187 0.0182 0.0062 504 640 285 63 724 940 573 242 961 1215 985 435 1642 1886 2137 995 190 185 590 573 1015 985 1886 2137 0.0272 0.0346 0.0234 0.038 0.0668 0.0836 0.0574 0.0721 0.0657 0.0377 -0.0035 -0.0205 -0.001 -0.0151 0.0211 0.0414 0.0242 0.0544 0.0363 0.0361 0.0517 0.0555 0.0672 0.0603 0.046 0.0283 0.0287 0.0447 0.0427 0.0542 0.0521 <b>Investment Objective </b> The investment objective of the BlackRock GNMA Portfolio (the “GNMA Portfolio” or the “Fund”) is to seek to maximize total return, consistent with income generation and prudent investment management. <b>Fees and Expenses of the Fund </b> This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $25,000 in the BlackRock-advised fund complex. More information about these and other discounts is available from your financial professional and in the “Details about the Share Classes” section on page 38 of the Fund’s prospectus and in the “Purchase of Shares” section on page II-71 of the Fund’s statement of additional information. <b>Shareholder Fees</b><br /><b>(fees paid directly from your investment)</b> This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: You would pay the following expenses if you did not redeem your shares: <b>Portfolio Turnover: </b> The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 741% of the average value of its portfolio. <b>Principal Investment Strategies of the Fund </b> <b>Principal Risks of Investing in the Fund </b> <b>Performance Information </b> The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Fund’s performance to that of the Barclays GNMA MBS Index. As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. If the Fund’s investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. Updated information on the Fund’s performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052. During the ten-year period shown in the bar chart, the highest return for a quarter was 4.24% (quarter ended December 31, 2008) and the lowest return for a quarter was –0.98% (quarter ended June 30, 2004). After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Investor A Shares only, and the after-tax returns for Investor B, Investor C and Institutional Shares will vary. <b>Annual Fund Operating Expenses<b><br /><b>(expenses that you pay each year as a percentage of the value of</b><br /><b>your investment)</b> <b>Example: </b> Under normal circumstances, the Fund invests at least 80% of its assets in Government National Mortgage Association (“GNMA”) securities. The Fund invests primarily in securities issued by the GNMA as well as other U.S. Government securities in the five to ten year maturity range. <br /><br />Securities purchased by the Fund are rated in the highest rating category (AAA or Aaa) at the time of purchase by at least one major rating agency or are determined by the Fund management team to be of similar quality. Split rated bonds will be considered to have the higher credit rating. Split rated bonds are bonds that receive different ratings from two or more rating agencies. <br /><br />The Fund measures its performance against the Barclays GNMA MBS Index (the benchmark). The Fund management team will normally attempt to structure the Fund’s portfolio to have comparable duration to its benchmark. <br /><br />The Fund also makes investments in residential and commercial mortgage-backed securities and other asset-backed securities. <br /><br />The Fund may buy or sell options or futures on a security or an index of securities, or enter into credit default swaps and interest rate transactions, including swaps (collectively, commonly known as derivatives). The Fund may seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as reverse repurchase agreements or dollar rolls). <br /><br />The Fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies. <b>Investor A Shares </b><br /><b>ANNUAL TOTAL RETURNS </b><br /><b>GNMA Portfolio </b><br /><b>As of 12/31 </b> <b>As of 12/31/12</b><br /><b>Average Annual Total Returns</b> February 1, 2014 7.41 You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $25,000 in the BlackRock-advised fund complex. 25000 You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. 800-882-0052 http://www.blackrock.com/funds As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Investor A Shares only, and the after-tax returns for Investor B, Investor C and Institutional Shares will vary. highest return 2008-12-31 0.0424 lowest return 2004-06-30 -0.0098 0.04 0 0 0 0 0.045 0.01 0 Risk is inherent in all investing. The value of your investment in the Fund, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part 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 principal risks of investing in the Fund. <br /> <ul type="square"><li style="margin-left:-20px"><b>Credit Risk</b> — Credit risk refers to the possibility that the issuer of a security will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Derivatives Risk</b> — The Fund’s use of derivatives may reduce the Fund’s returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. A risk of the Fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately. Derivatives may give rise to a form of leverage and may expose the Fund to greater risk and increase its costs. Recent legislation calls for new regulation of the derivatives markets. The extent and impact of the regulation is not yet known and may not be known for some time. New regulation may make derivatives more costly, may limit the availability of derivatives, or may otherwise adversely affect the value or performance of derivatives. </li></ul> <ul type="square"><li style="margin-left:-20px"><b>Dollar Rolls Risk</b> — Dollar rolls involve the risk that the market value of the securities that the Fund is committed to buy may decline below the price of the securities the Fund has sold. These transactions may involve leverage.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Extension Risk</b> — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>High Portfolio Turnover Risk</b> — The Fund may engage in active and frequent trading of its portfolio securities. High portfolio turnover (more than 100%) may result in increased transaction costs to the Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of Fund portfolio securities may result in the realization and/or distribution to shareholders of higher capital gains or losses as compared to a fund with less active trading policies. These effects of higher than normal portfolio turnover may adversely affect Fund performance. In addition, investment in mortgage dollar rolls and participation in TBA transactions may significantly increase the Fund’s portfolio turnover rate. A TBA transaction is a method of trading mortgage-backed securities where the buyer and seller agree upon general trade parameters such as agency, settlement date, par amount, and price.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Interest Rate Risk</b> — Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall, and decrease as interest rates rise.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Leverage Risk</b> — Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Liquidity Risk</b> — Liquidity risk exists when particular investments are difficult to purchase or sell. The Fund’s investments in illiquid securities may reduce the returns of the Fund because it may be difficult to sell the illiquid securities at an advantageous time or price. To the extent that the Fund’s principal investment strategies involve derivatives or securities with substantial market and/or credit risk, the Fund will tend to have the greatest exposure to liquidity risk. Liquid investments may become illiquid after purchase by the Fund, particularly during periods of market turmoil. Illiquid investments may be harder to value, especially in changing markets, and if the Fund is forced to sell these investments to meet redemption requests or for other cash needs, the Fund may suffer a loss. In addition, when there is illiquidity in the market for certain securities, the Fund, due to limitations on illiquid investments, may be subject to purchase and sale restrictions.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Market Risk and Selection Risk</b> — Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Mortgage- and Asset-Backed Securities Risks</b> — Mortgage- and asset-backed securities represent interests in “pools” of mortgages or other assets, including consumer loans or receivables held in trust. Mortgage- and asset-backed securities are subject to credit, interest rate, prepayment and extension risks. These securities also are subject to risk of default on the underlying mortgage or asset, particularly during periods of economic downturn. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Prepayment Risk</b> — When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Repurchase Agreements, Purchase and Sale Contracts Risks</b> — If the other party to a repurchase agreement or purchase and sale contract defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security in either situation and the market value of the security declines, the Fund may lose money.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Reverse Repurchase Agreements Risk</b> — Reverse repurchase agreements involve the sale of securities held by the Fund with an agreement to repurchase the securities at an agreed-upon price, date and interest payment. Reverse repurchase agreements involve the risk that the other party may fail to return the securities in a timely manner or at all. The Fund could lose money if it is unable to recover the securities and the value of the collateral held by the Fund, including the value of the investments made with cash collateral, is less than the value of securities. These events could also trigger adverse tax consequences to the Fund.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>U.S. Government Issuer Risk</b> — Treasury obligations may differ in their interest rates, maturities, times of issuance and other characteristics. Obligations of U.S. Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the U.S. Government. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so.</li></ul> 0.0036 0.0036 0.0036 0.0036 0.0025 0.01 0.01 0 0.0034 0.0027 0.0021 0.002 0.0001 0.0001 0.0001 0.0001 0.0096 0.0164 0.0158 0.0057 -0.001 -0.0012 0.0086 0.0164 0.0158 0.0045 0.0002 0.0002 0.0002 0.0002 0.0025 0.0032 0.0026 0.0026 -0.0001 -0.002 484 617 261 46 684 867 499 171 900 1092 860 306 1522 1677 1878 702 167 161 517 499 892 860 1677 1878 0.0362 0.0072 0.1183 0.0023 0.1015 0.0582 0.1147 0.0662 0.0237 0.0143 0.0178 0.0129 0.0488 0.0694 0.0698 0.0593 0.0458 0.043 0.0561 0.0601 0.071 0.0704 0.0624 0.0466 0.0443 0.0609 0.0604 0.071 0.0676 2004-06-28 2004-06-28 2004-06-28 2004-06-28 <b>Investment Objective </b> The investment objective of the BlackRock Inflation Protected Bond Portfolio (the “Inflation Protected Bond Portfolio” or the “Fund”) is to seek to maximize real return, consistent with preservation of real capital and prudent investment management. <b>Fees and Expenses of the Fund </b> This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $25,000 in the BlackRock-advised fund complex. More information about these and other discounts is available from your financial professional and in the “Details about the Share Classes” section on page 38 of the Fund’s prospectus and in the “Purchase of Shares” section on page II-71 of the Fund’s statement of additional information. This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: You would pay the following expenses if you did not redeem your shares: <b>Portfolio Turnover: </b> The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 120% of the average value of its portfolio. <b>Principal Investment Strategies of the Fund </b> <b>Principal Risks of Investing in the Fund </b> <b>Performance Information </b> The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Fund’s performance to that of the Barclays Global Real: U.S. TIPS Index. As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. If the Fund’s investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. Updated information on the Fund’s performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Investor A Shares only, and the after-tax returns for Investor B, Investor C and Institutional Shares will vary. <b>Shareholder Fees</b><br /><b>(fees paid directly from your investment)</b> <b>Annual Fund Operating Expenses</b><br /><b>(expenses that you pay each year as a percentage of the value of<br /> your investment)</b> <b>Example:</b> <b>Investor A Shares </b><br /><b>ANNUAL TOTAL RETURNS </b><br /><b>Inflation Protected Bond Portfolio </b><br /><b>As of 12/31 </b> <b>As of 12/31/12</b><br /><b>Average Annual Total Returns</b> During the period shown in the bar chart, the highest return for a quarter was 5.80% (quarter ended March 31, 2008) and the lowest return for a quarter was –3.76% (quarter ended September 30, 2008). Fund Overview<br /><br /><b>Key Facts about BlackRock Inflation Protected Bond Portfolio </b> <div style="display:none">~ http://www.blackrock.com/role/ScheduleShareholderFeesBLACKROCKGNMAPORTFOLIO column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBLACKROCKGNMAPORTFOLIO column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleTransposedBLACKROCKGNMAPORTFOLIO column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleNoRedemptionTransposedBLACKROCKGNMAPORTFOLIO column period compact * ~</div> Under normal circumstances, the Fund invests at least 80% of its assets in inflation-indexed bonds of varying maturities issued by the U.S. and non-U.S. governments, their agencies or instrumentalities, and U.S. and non-U.S. corporations. <br /><br />The Fund maintains an average portfolio duration that is within ±20% of the duration of the Barclays Global Real: U.S. TIPS Index (the benchmark).<br /><br />The Fund may invest up to 20% of it assets in non-investment grade bonds (high yield or junk bonds) or securities of emerging market issuers. The Fund may also invest up to 20% of its assets in non-dollar denominated securities of non-U.S. issuers, and may invest without limit in U.S. dollar denominated securities of non-U.S. issuers.<br /><br />The Fund is non-diversified under the Investment Company Act of 1940, as amended, which means that it may concentrate its assets in a smaller number of issuers than a diversified fund.<br /><br />The Fund also makes investments in residential and commercial mortgage-backed securities and other asset-backed securities.<br /><br />Non-investment grade bonds acquired by the Fund will generally be in the lower rating categories of the major rating agencies (BB or lower by Standard & Poor’s (“S&P”) or Ba or lower by Moody’s Investors Service, Inc. (“Moody’s”)) or will be determined by the management team to be of similar quality. Split rated bonds will be considered to have the higher credit rating. Split rated bonds are bonds that receive different ratings from two or more rating agencies.<br /><br />The Fund may buy or sell options or futures, or enter into credit default swaps and interest rate or foreign currency transactions, including swaps (collectively, commonly known as derivatives). The Fund may seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as reverse repurchase agreements or dollar rolls).<br /><br />The Fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies. <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualTotalReturnsBLACKROCKGNMAPORTFOLIOBarChart column period compact * ~</div> February 1, 2014 1.2 You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $25,000 in the BlackRock-advised fund complex. 25000 The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Fund’s most recent annual report which does not include the Acquired Fund Fees and Expenses. You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. <ul type="square"><li style="margin-left:-20px"><b>Non-Diversification Risk</b> — The Fund is a non-diversified fund. Because the Fund may invest in securities of a smaller number of issuers, it may be more exposed to the risks associated with and developments affecting an individual issuer than a fund that invests more widely.</li></ul> The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. 800-882-0052 http://www.blackrock.com/funds As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Investor A Shares only, and the after-tax returns for Investor B, Investor C and Institutional Shares will vary. highest return 2008-03-31 0.058 lowest return 2008-09-30 -0.0376 <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBLACKROCKGNMAPORTFOLIO column period compact * ~</div> Fund Overview<br /><br /><b>Key Facts about BlackRock GNMA Portfolio</b> Risk is inherent in all investing. The value of your investment in the Fund, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part 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 principal risks of investing in the Fund. <br /> <ul type="square"><li style="margin-left:-20px"><b>Credit Risk — </b>Credit risk refers to the possibility that the issuer of a security will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Deflation Risk — </b>Deflation risk is the possibility that prices throughout the economy decline over time — the opposite of inflation. If inflation is negative, the principal and income of an inflation-protected bond will decline and could result in losses for the Fund.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Derivatives Risk — </b>The Fund's use of derivatives may reduce the Fund's returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. A risk of the Fund's use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately. Derivatives may give rise to a form of leverage and may expose the Fund to greater risk and increase its costs. Recent legislation calls for new regulation of the derivatives markets. The extent and impact of the regulation is not yet known and may not be known for some time. New regulation may make derivatives more costly, may limit the availability of derivatives, or may otherwise adversely affect the value or performance of derivatives.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Dollar Rolls Risk — </b>Dollar rolls involve the risk that the market value of the securities that the Fund is committed to buy may decline below the price of the securities the Fund has sold. These transactions may involve leverage.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Emerging Markets Risk — </b>Emerging markets are riskier than more developed markets because they tend to develop unevenly and may never fully develop. Investments in emerging markets may be considered speculative. Emerging markets are more likely to experience hyperinflation and currency devaluations, which adversely affect returns to U.S. investors. In addition, many emerging securities markets have far lower trading volumes and less liquidity than developed markets.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Extension Risk — </b>When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Foreign Securities Risk — </b>Foreign investments often involve special risks not present in U.S. investments that can increase the chances that the Fund will lose money. These risks include:</li></ul><p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">The Fund generally holds its foreign securities and cash in foreign banks and securities depositories, which may be recently organized or new to the foreign custody business and may be subject to only limited or no regulatory oversight. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">Changes in foreign currency exchange rates can affect the value of the Fund's portfolio. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">The economies of certain foreign markets may not compare favorably with the economy of the United States with respect to such issues as growth of gross national product, reinvestment of capital, resources and balance of payments position. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">The governments of certain countries may prohibit or impose substantial restrictions on foreign investments in their capital markets or in certain industries. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">Many foreign governments do not supervise and regulate stock exchanges, brokers and the sale of securities to the same extent as does the United States and may not have laws to protect investors that are comparable to U.S. securities laws </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">Settlement and clearance procedures in certain foreign markets may result in delays in payment for or delivery of securities not typically associated with settlement and clearance of U.S. investments. </td></tr></table><ul type="square"><li style="margin-left:-20px"><b>High Portfolio Turnover Risk — </b> The Fund may engage in active and frequent trading of its portfolio securities. High portfolio turnover (more than 100%) may result in increased transaction costs to the Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of Fund portfolio securities may result in the realization and/or distribution to shareholders of higher capital gains or losses as compared to a fund with less active trading policies. These effects of higher than normal portfolio turnover may adversely affect Fund performance. In addition, investment in mortgage dollar rolls and participation in TBA transactions may significantly increase the Fund's portfolio turnover rate. A TBA transaction is a method of trading mortgage-backed securities where the buyer and seller agree upon general trade parameters such as agency, settlement date, par amount, and price.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Inflation Indexed Bonds — </b>The principal value of an investment is not protected or otherwise guaranteed by virtue of the Fund's investments in inflation-indexed bonds.<br/><br/> Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted according to the rate of inflation. If the index measuring inflation falls, the principal value of inflation-indexed bonds will be adjusted downward, and consequently the interest payable on these securities (calculated with respect to a smaller principal amount) will be reduced.</li></ul>Repayment of the original bond principal upon maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds. For bonds that do not provide a similar guarantee, the adjusted principal value of the bond repaid at maturity may be less than the original principal value.<br/><br/>The value of inflation-indexed bonds is expected to change in response to changes in real interest rates. Real interest rates are tied to the relationship between nominal interest rates and the rate of inflation. If nominal interest rates increase at a faster rate than inflation, real interest rates may rise, leading to a decrease in value of inflation-indexed bonds. Short-term increases in inflation may lead to a decline in value. Any increase in the principal amount of an inflation-indexed bond will be considered taxable ordinary income, even though investors do not receive their principal until maturity.<br/><br/>Periodic adjustments for inflation to the principal amount of an inflation-indexed bond may give rise to original issue discount, which will be includable in the Fund's gross income. Due to original issue discount, the Fund may be required to make annual distributions to shareholders that exceed the cash received, which may cause the Fund to liquidate certain investments when it is not advantageous to do so. Also, if the principal value of an inflation-indexed bond is adjusted downward due to deflation, amounts previously distributed in the taxable year may be characterized in some circumstances as a return of capital.<ul type="square"><li style="margin-left:-20px"><b>Interest Rate Risk — </b>Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall, and decrease as interest rates rise.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Leverage Risk — </b>Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements. Increases and decreases in the value of the Fund's portfolio will be magnified when the Fund uses leverage.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Liquidity Risk — </b>Liquidity risk exists when particular investments are difficult to purchase or sell. The Fund's investments in illiquid securities may reduce the returns of the Fund because it may be difficult to sell the illiquid securities at an advantageous time or price. To the extent that the Fund's principal investment strategies involve derivatives or securities with substantial market and/or credit risk, the Fund will tend to have the greatest exposure to liquidity risk. Liquid investments may become illiquid after purchase by the Fund, particularly during periods of market turmoil. Illiquid investments may be harder to value, especially in changing markets, and if the Fund is forced to sell these investments to meet redemption requests or for other cash needs, the Fund may suffer a loss. In addition, when there is illiquidity in the market for certain securities, the Fund, due to limitations on illiquid investments, may be subject to purchase and sale restrictions.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Market Risk and Selection Risk — </b>Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Mortgage- and Asset-Backed Securities Risks — </b>Mortgage- and asset-backed securities represent interests in "pools" of mortgages or other assets, including consumer loans or receivables held in trust. Mortgage- and asset-backed securities are subject to credit, interest rate, prepayment and extension risks. These securities also are subject to risk of default on the underlying mortgage or asset, particularly during periods of economic downturn. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Non-Diversification Risk — </b>The Fund is a non-diversified fund. Because the Fund may invest in securities of a smaller number of issuers, it may be more exposed to the risks associated with and developments affecting an individual issuer than a fund that invests more widely.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Non-Investment Grade Securities Risk — </b>Although non-investment grade securities generally pay higher rates of interest than investment grade securities, non-investment grade securities are high risk investments that may cause income and principal losses for the Fund.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Prepayment Risk — </b>When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Repurchase Agreements, Purchase and Sale Contracts Risks — </b>If the other party to a repurchase agreement or purchase and sale contract defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security in either situation and the market value of the security declines, the Fund may lose money.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Reverse Repurchase Agreements Risk — </b>Reverse repurchase agreements involve the sale of securities held by the Fund with an agreement to repurchase the securities at an agreed-upon price, date and interest payment. Reverse repurchase agreements involve the risk that the other party may fail to return the securities in a timely manner or at all. The Fund could lose money if it is unable to recover the securities and the value of the collateral held by the Fund, including the value of the investments made with cash collateral, is less than the value of securities. These events could also trigger adverse tax consequences to the Fund.</li></ul><ul type="square"><li style="margin-left:-20px"><b>U.S. Government Issuer Risk — </b>Treasury obligations may differ in their interest rates, maturities, times of issuance and other characteristics. Obligations of U.S. Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the U.S. Government. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so.</li></ul> <div style="display:none">~ http://www.blackrock.com/role/ScheduleShareholderFeesBLACKROCKINFLATIONPROTECTEDBONDPORTFOLIO column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBLACKROCKINFLATIONPROTECTEDBONDPORTFOLIO column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleTransposedBLACKROCKINFLATIONPROTECTEDBONDPORTFOLIO column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleNoRedemptionTransposedBLACKROCKINFLATIONPROTECTEDBONDPORTFOLIO column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualTotalReturnsBLACKROCKINFLATIONPROTECTEDBONDPORTFOLIOBarChart column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBLACKROCKINFLATIONPROTECTEDBONDPORTFOLIO column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleShareholderFeesBLACKROCKLONGDURATIONBONDPORTFOLIO column period compact * ~</div> Fund Overview<br/><br/><b>Key Facts about BlackRock Long Duration Bond Portfolio</b> <b>Investment Objective </b> The investment objective of the BlackRock Long Duration Bond Portfolio (the “Long Duration Bond Portfolio” or the “Fund”) is to seek to maximize total return, consistent with income generation and prudent investment management. <b>Fees and Expenses of the Fund </b> This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $25,000 in the BlackRock-advised fund complex. More information about these and other discounts is available from your financial professional and in the “Details about the Share Classes” section on page 38 of the Fund’s prospectus and in the “Purchase of Shares” section on page II-71 of the Fund’s statement of additional information. <b>Shareholder Fees<br/>(fees paid directly from your investment)</b> <b>Annual Fund Operating Expenses<br/>(expenses that you pay each year as a percentage of the value of your investment)</b> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBLACKROCKLONGDURATIONBONDPORTFOLIO column period compact * ~</div> <b>Example: </b> This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: <b>Portfolio Turnover: </b> The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 86% of the average value of its portfolio. <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleTransposedBLACKROCKLONGDURATIONBONDPORTFOLIO column period compact * ~</div> <b>Principal Investment Strategies of the Fund </b> <b>Principal Risks of Investing in the Fund </b> 0.04 0 <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualTotalReturnsBLACKROCKLONGDURATIONBONDPORTFOLIOBarChart column period compact * ~</div> 0 0 <b>Performance Information </b> 0 0 0.045 0.01 0 0 The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Fund’s performance to that of the Barclays Long Government/Credit Index. As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. If the Fund’s investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. Updated information on the Fund’s performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052. <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBLACKROCKLONGDURATIONBONDPORTFOLIO column period compact * ~</div> <b>Investment Objective </b> <b>Fees and Expenses of the Fund </b> This table describes the fees and expenses that you may pay if you buy and hold BlackRock Shares of the Fund. <b>Example: </b> This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: <b>Portfolio Turnover: </b> <b>Principal Risks of Investing in the Fund </b> 0.0049 0.0049 0.0049 0.0049 0.0049 0.0025 0.01 0.01 0 0.005 0.0031 0.0047 0.0038 0.0034 0.0042 0.0105 0.0196 0.0187 0.0083 0.0141 -0.0008 -0.0005 -0.0021 -0.002 0.0182 0.0062 0.0121 55 0.0105 216 0.0188 503 641 285 63 123 721 958 583 244 427 752 440 1006 956 1250 1631 1932 2186 1006 1674 392 900 0.0338 0.0392 0.0257 0.0436 0.0702 0.0879 0.0597 0.0767 0.0701 0.0416 191 185 608 583 1050 1006 1932 2186 0.0155 0.0211 0.0119 0.0358 0.0685 0.0496 0.035 0.0585 0.0629 0.0246 During the ten-year period shown in the bar chart, the highest return for a quarter was 4.45% (quarter ended December 31, 2008) and the lowest return for a quarter was –0.85% (quarter ended June 30, 2007). <b>Investment Objective </b> <b>Investment Objective </b> The investment objective of the BlackRock Inflation Protected Bond Portfolio (the “Inflation Protected Bond Portfolio” or the “Fund”) is to seek to maximize real return, consistent with preservation of real capital and prudent investment management. The investment objective of the BlackRock U.S. Government Bond Portfolio (the “U.S. Government Bond Portfolio” or the “Fund”) is to seek to maximize total return, consistent with income generation and prudent investment management.<br /><br /> 0.0416 0.0225 <b>Fees and Expenses of the Fund </b> <b>Fees and Expenses of the Fund </b> 0.0284 This table describes the fees and expenses that you may pay if you buy and hold Service Shares of the Fund. This table describes the fees and expenses that you may pay if you buy and hold Class R Shares of the Fund. 0.0242 <b>Example: </b> This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: <b>Portfolio Turnover: </b> 0.0671 0.0473 0.0461 The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 120% of the average value of its portfolio. 0.0603 <b>Principal Investment Strategies of the Fund </b> <b>Investment Objective </b> 0.0547 0.0352 0.0352 0.0521 <b>Principal Risks of Investing in the Fund </b> <b>Example: </b> This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: Fund Overview<br/><br/><b>Key Facts about BlackRock Inflation Protected Bond Portfolio</b> <b>Portfolio Turnover: </b><br /><br /> The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 790% of the average value of its portfolio. <b>Principal Investment Strategies of the Fund </b> <b>Fees and Expenses of the Fund </b> This table describes the fees and expenses that you may pay if you buy and hold BlackRock Shares of the Fund. <b>Fees and Expenses of the Fund </b> This table describes the fees and expenses that you may pay if you buy and hold Service Shares of the Fund. Under normal circumstances, the Fund invests at least 80% of its assets in bonds that are issued or guaranteed by the U.S. Government and its agencies. The Fund invests primarily in the highest rated government and agency bonds and maintains an average portfolio duration that is within ±20% of the Barclays U.S. Government/Mortgage Index (the benchmark).<br/><br/>Securities purchased by the Fund generally are rated in the highest rating category (AAA or Aaa) at the time of purchase by at least one major rating agency or are determined by the Fund management team to be of similar quality. In addition, the Fund’s dollar-weighted average maturity will be between 3 and 10 years. <br /><br />The Fund evaluates sectors of the bond market and individual securities within these sectors. The Fund selects bonds from several sectors including: U.S. Treasuries and agency securities, commercial and residential mortgage-backed securities, collateralized mortgage obligations (“CMOs”), asset-backed securities and corporate bonds. <br /><br/>The Fund invests primarily in dollar-denominated bonds, but may invest up to 10% of its assets in non-dollar denominated bonds of issuers located outside of the United States. The Fund’s investment in non-dollar denominated bonds may be on a currency hedged or unhedged basis. <br /><br />The Fund may buy or sell options or futures on a security or an index of securities, or enter into credit default swaps and interest rate or foreign currency transactions, including swaps (collectively, commonly known as derivatives). The Fund may seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as reverse repurchase agreements or dollar rolls). <br /><br />The Fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies. <b>Principal Risks of Investing in the Fund </b><br /><br /> 0.0237 0.0143 0.0178 0.0698 0.0027 0.0025 <b>Annual Fund Operating Expenses</b><br/><b>(expenses that you pay each year as a percentage of the value of your investment)</b> 0.0593 <b>Example: </b> 0.0458 0.043 0.0704 <b>Portfolio Turnover: </b> 0.0131 The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 120% of the average value of its portfolio. 0.04 0 <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualTotalReturnsBLACKROCKU.S.GOVERNMENTBONDPORTFOLIOBarChart column period compact * ~</div> Fund Overview<br/><br/><b>Key Facts about BlackRock GNMA Portfolio </b> <b>Investment Objective </b> The investment objective of the BlackRock GNMA Portfolio (the “GNMA Portfolio” or the “Fund”) is to seek to maximize total return, consistent with income generation and prudent investment management. <b>Example: </b> <b>Fees and Expenses of the Fund </b> This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: This table describes the fees and expenses that you may pay if you buy and hold Service Shares of the Fund. <b>Performance Information </b> <b>Principal Risks of Investing in the Fund </b> The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Fund’s performance to that of the Barclays U.S. Government/Mortgage Index. As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. If the Fund’s investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. Updated information on the Fund’s performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052.<br /><br /> 0 0 During the ten-year period shown in the bar chart, the highest return for a quarter was 4.23% (quarter ended September 30, 2011) and the lowest return for a quarter was –2.05% (quarter ended June 30, 2004). 0.0624 0.0466 <b>Example: </b> 0.0443 0.0676 -0.0164 This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: -0.0213 -0.0107 -0.0299 0.0036 0.0063 2004-06-28 0.027 <b>Portfolio Turnover: </b> 0.0222 0.0227 0.0025 0.0025 0.0001 0.0087 0.0374 0.0244 -0.0011 0.0243 0.0339 0.0381 0.0501 0.0442 0.0546 0.0076 0.0339 0.0212 0.0213 0.0326 0.0423 0.0303 0.0363 0.005 0.0487 0.005 133 415 718 1579 0.0025 0 After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. <b>Annual Fund Operating Expenses</b><br/><b>(expenses that you pay each year as a percentage of the value of your investment)</b> 0.0032 The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 741% of the average value of its portfolio. 0.0033 <b> Principal Investment Strategies of the Fund </b> 0.0001 0.0001 A contingent deferred sales charge (“CDSC”) of 0.15% is assessed on certain redemptions of Investor A Shares made within 18 months after purchase where no initial sales charge was paid at time of purchase as part of an investment of $1,000,000 or more. 0.0108 0.0084 The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Fund’s performance to that of the Barclays Global Real: U.S. TIPS Index. As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. If the Fund’s investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. Updated information on the Fund’s performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052.<br /><br /> Under normal circumstances, the Fund invests at least 80% of its assets in Government National Mortgage Association (“GNMA”) securities. The Fund invests primarily in securities issued by the GNMA as well as other U.S. Government securities in the five to ten year maturity range. <br /><br /> Securities purchased by the Fund are rated in the highest rating category (AAA or Aaa) at the time of purchase by at least one major rating agency or are determined by the Fund management team to be of similar quality. Split rated bonds will be considered to have the higher credit rating. Split rated bonds are bonds that receive different ratings from two or more rating agencies. <br /><br /> The Fund measures its performance against the Barclays GNMA MBS Index (the benchmark). The Fund management team will normally attempt to structure the Fund’s portfolio to have comparable duration to its benchmark. <br /><br /> The Fund also makes investments in residential and commercial mortgage-backed securities and other asset-backed securities. <br /><br /> The Fund may buy or sell options or futures on a security or an index of securities, or enter into credit default swaps and interest rate transactions, including swaps (collectively, commonly known as derivatives). The Fund may seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as reverse repurchase agreements or dollar rolls). <br /><br /> The Fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies. -0.0028 -0.0017 0.0091 0.0056 0 0 <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleTransposedBLACKROCKGNMAPORTFOLIOClassRShares column period compact * ~</div> <b>Principal Investment Strategies of the Fund</b> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualTotalReturnsBLACKROCKGNMAPORTFOLIOClassRSharesBarChart column period compact * ~</div> Under normal circumstances, the Fund invests at least 80% of its assets in inflation-indexed bonds of varying maturities issued by the U.S. and non-U.S. governments, their agencies or instrumentalities, and U.S. and non-U.S. corporations. <br /><br />The Fund maintains an average portfolio duration that is within ±20% of the duration of the Barclays Global Real: U.S. TIPS Index (the benchmark). <br /><br />The Fund may invest up to 20% of it assets in non-investment grade bonds (high yield or junk bonds) or securities of emerging market issuers. The Fund may also invest up to 20% of its assets in non-dollar denominated securities of non-U.S. issuers, and may invest without limit in U.S. dollar denominated securities of non-U.S. issuers. <br /><br />The Fund is non-diversified under the Investment Company Act of 1940, as amended, which means that it may concentrate its assets in a smaller number of issuers than a diversified fund. <br /><br />The Fund also makes investments in residential and commercial mortgage-backed securities and other asset-backed securities. <br /><br />Non-investment grade bonds acquired by the Fund will generally be in the lower rating categories of the major rating agencies (BB or lower by Standard & Poor’s (“S&P”) or Ba or lower by Moody’s Investors Service, Inc. (“Moody’s”)) or will be determined by the management team to be of similar quality. Split rated bonds will be considered to have the higher credit rating. Split rated bonds are bonds that receive different ratings from two or more rating agencies. <br /><br />The Fund may buy or sell options or futures, or enter into credit default swaps and interest rate or foreign currency transactions, including swaps (collectively, commonly known as derivatives). The Fund may seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as reverse repurchase agreements or dollar rolls). <br /><br />The Fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.<br /><br /> 0.01 0.04 <b>Principal Risks of Investing in the Fund </b> <b>Investment Objective </b> The investment objective of the BlackRock GNMA Portfolio (the “GNMA Portfolio” or the “Fund”) is to seek to maximize total return, consistent with income generation and prudent investment management. <b>Performance Information</b> The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Fund’s performance to that of the Barclays Global Real: U.S. TIPS Index. As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. If the Fund’s investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. Updated information on the Fund’s performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052. <b>Fees and Expenses of the Fund </b> 0.0362 This table describes the fees and expenses that you may pay if you buy and hold Class R Shares of the Fund. 0.0072 0.1183 <b>Example: </b> This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: <b>Principal Risks of Investing in the Fund </b> 0.0023 0.0049 0.1015 0.0049 <b>Portfolio Turnover: </b> The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 741% of the average value of its portfolio. <b>Principal Investment Strategies of the Fund </b> 0.0075 0.0582 <b>Principal Risks of Investing in the Fund </b> 0.008 489 57 0.1147 0.0662 <b>Service Shares </b><br/><b>ANNUAL TOTAL RETURNS </b><br/><b>Inflation Protected Bond Portfolio </b><br/><b>As of 12/31</b> 0.0054 0.0048 0.0049 0.0178 714 0.0025 0.0177 240 0.0033 Since Class R Shares of the GNMA Portfolio have no performance history, the chart and table below give you a picture of the Fund’s long-term performance for Investor A Shares. Although the chart and table show returns for the Investor A Shares which are not offered in this Prospectus, the Investor A Shares would have substantially similar annual returns as the Class R Shares offered in this Prospectus because the Investor A Shares and the Class R Shares are invested in the same portfolio of securities and the annual returns would differ only to the extent that the Investor A Shares and the Class R Shares do not have the same expenses. The actual return of Class R Shares would have been lower than that of Investor A Shares because Class R Shares have higher expenses than Investor A Shares. Investor A Shares of the Fund are estimated to have expenses of 1.06% of average daily net assets for the current fiscal year and Class R Shares of the Fund are expected to have expenses of 1.31% of average daily net assets for the current fiscal year. <br/><br/>The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Fund’s performance to that of the Barclays GNMA MBS Index. As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. If the Fund’s investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. Updated information on the Fund’s performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052. 0.0107 956 438 -0.0026 During the period shown in the bar chart, the highest return for a quarter was 5.86% (quarter ended March 31, 2008) and the lowest return for a quarter was –3.72% (quarter ended September 30, 2008). 1650 0.0081 1011 -0.0033 -0.0024 <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleTransposedBLACKROCKGNMAPORTFOLIOBlackRockShares column period compact * ~</div> 0.0153 0.0145 <b>As of 12/31/12</b><br/><b>Average Annual Total Returns</b> After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. February 1, 2014 1.2 Risk is inherent in all investing. The value of your investment in the Fund, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part 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 principal risks of investing in the Fund. <ul type="square"><li style="margin-left:-20px"><p style="PADDING-LEFT: 15px"><b> Credit Risk </b>— Credit risk refers to the possibility that the issuer of a security will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer.</p></li></ul><ul type="square"><li style="margin-left:-20px"><p style="PADDING-LEFT: 15px"><b> Derivatives Risk </b>— The Fund’s use of derivatives may reduce the Fund’s returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. A risk of the Fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately. Derivatives may give rise to a form of leverage and may expose the Fund to greater risk and increase its costs. Recent legislation calls for new regulation of the derivatives markets. The extent and impact of the regulation is not yet known and may not be known for some time. New regulation may make derivatives more costly, may limit the availability of derivatives, or may otherwise adversely affect the value or performance of derivatives.</p></li></ul><ul type="square"><li style="margin-left:-20px"><p style="PADDING-LEFT: 15px"><b> Dollar Rolls Risk </b>— Dollar rolls involve the risk that the market value of the securities that the Fund is committed to buy may decline below the price of the securities the Fund has sold. These transactions may involve leverage.</p></li></ul><ul type="square"><li style="margin-left:-20px"><p style="PADDING-LEFT: 15px"><b> Extension Risk </b>— When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.</p></li></ul><ul type="square"><li style="margin-left:-20px"><p style="PADDING-LEFT: 15px"><b> High Portfolio Turnover Risk </b>— The Fund may engage in active and frequent trading of its portfolio securities. High portfolio turnover (more than 100%) may result in increased transaction costs to the Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of Fund portfolio securities may result in the realization and/or distribution to shareholders of higher capital gains or losses as compared to a fund with less active trading policies. These effects of higher than normal portfolio turnover may adversely affect Fund performance. In addition, investment in mortgage dollar rolls and participation in TBA transactions may significantly increase the Fund’s portfolio turnover rate. A TBA transaction is a method of trading mortgage-backed securities where the buyer and seller agree upon general trade parameters such as agency, settlement date, par amount, and price.</p></li></ul><ul type="square"><li style="margin-left:-20px"><p style="PADDING-LEFT: 15px"><b> Interest Rate Risk </b>— Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall, and decrease as interest rates rise.</p></li></ul><ul type="square"><li style="margin-left:-20px"><p style="PADDING-LEFT: 15px"><b> Leverage Risk </b>— Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage.</p></li></ul><ul type="square"><li style="margin-left:-20px"><p style="PADDING-LEFT: 15px"><b> Liquidity Risk </b>— Liquidity risk exists when particular investments are difficult to purchase or sell. The Fund’s investments in illiquid securities may reduce the returns of the Fund because it may be difficult to sell the illiquid securities at an advantageous time or price. To the extent that the Fund’s principal investment strategies involve derivatives or securities with substantial market and/or credit risk, the Fund will tend to have the greatest exposure to liquidity risk. Liquid investments may become illiquid after purchase by the Fund, particularly during periods of market turmoil. Illiquid investments may be harder to value, especially in changing markets, and if the Fund is forced to sell these investments to meet redemption requests or for other cash needs, the Fund may suffer a loss. In addition, when there is illiquidity in the market for certain securities, the Fund, due to limitations on illiquid investments, may be subject to purchase and sale restrictions.</p></li></ul><ul type="square"><li style="margin-left:-20px"><p style="PADDING-LEFT: 15px"><b> Market Risk and Selection Risk </b>— Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money.</p></li></ul><ul type="square"><li style="margin-left:-20px"><p style="PADDING-LEFT: 15px"><b> Mortgage- and Asset-Backed Securities Risks </b>— Mortgage- and asset-backed securities represent interests in “pools” of mortgages or other assets, including consumer loans or receivables held in trust. Mortgage- and asset-backed securities are subject to credit, interest rate, prepayment and extension risks. These securities also are subject to risk of default on the underlying mortgage or asset, particularly during periods of economic downturn. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities.</p></li></ul><ul type="square"><li style="margin-left:-20px"><p style="PADDING-LEFT: 15px"><b> Prepayment Risk </b>— When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields.</p></li></ul><ul type="square"><li style="margin-left:-20px"><p style="PADDING-LEFT: 15px"><b> Repurchase Agreements, Purchase and Sale Contracts Risks </b>— If the other party to a repurchase agreement or purchase and sale contract defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security in either situation and the market value of the security declines, the Fund may lose money.</p></li></ul><ul type="square"><li style="margin-left:-20px"><p style="PADDING-LEFT: 15px"><b> Reverse Repurchase Agreements Risk </b>— Reverse repurchase agreements involve the sale of securities held by the Fund with an agreement to repurchase the securities at an agreed-upon price, date and interest payment. Reverse repurchase agreements involve the risk that the other party may fail to return the securities in a timely manner or at all. The Fund could lose money if it is unable to recover the securities and the value of the collateral held by the Fund, including the value of the investments made with cash collateral, is less than the value of securities. These events could also trigger adverse tax consequences to the Fund.</p></li></ul><ul type="square"><li style="margin-left:-20px"><p style="PADDING-LEFT: 15px"><b> U.S. Government Issuer Risk </b>— Treasury obligations may differ in their interest rates, maturities, times of issuance and other characteristics. Obligations of U.S. Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the U.S. Government. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so. </p></li></ul> 83 Fund Overview<br/><br/><b>Key Facts about BlackRock Inflation Protected Bond Portfolio </b> The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Fund’s most recent annual report which does not include the Acquired Fund Fees and Expenses. 315 Fund Overview<br/><br/><b>Key Facts about BlackRock GNMA Portfolio </b> 565 1282 <b>Annual Fund Operating Expenses</b><br/><b>(expenses that you pay each year as a percentage of the value of your investment)</b> You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBLACKROCKU.S.GOVERNMENTBONDPORTFOLIO column period compact * ~</div> <b>Principal Investment Strategies of the Fund </b> Under normal circumstances, the Fund invests at least 80% of its assets in inflation-indexed bonds of varying maturities issued by the U.S. and non-U.S. governments, their agencies or instrumentalities, and U.S. and non-U.S. corporations. <br /><br />The Fund maintains an average portfolio duration that is within ±20% of the duration of the Barclays Global Real: U.S. TIPS Index (the benchmark). <br/><br/>The Fund may invest up to 20% of it assets in non-investment grade bonds (high yield or junk bonds) or securities of emerging market issuers. The Fund may also invest up to 20% of its assets in non-dollar denominated securities of non-U.S. issuers, and may invest without limit in U.S. dollar denominated securities of non-U.S. issuers. <br /><br />The Fund is non-diversified under the Investment Company Act of 1940, as amended, which means that it may concentrate its assets in a smaller number of issuers than a diversified fund. <br /><br />The Fund also makes investments in residential and commercial mortgage-backed securities and other asset-backed securities. <br /><br />Non-investment grade bonds acquired by the Fund will generally be in the lower rating categories of the major rating agencies (BB or lower by Standard & Poor’s (“S&P”) or Ba or lower by Moody’s Investors Service, Inc. (“Moody’s”)) or will be determined by the management team to be of similar quality. Split rated bonds will be considered to have the higher credit rating. Split rated bonds are bonds that receive different ratings from two or more rating agencies. <br /><br />The Fund may buy or sell options or futures, or enter into credit default swaps and interest rate or foreign currency transactions, including swaps (collectively, commonly known as derivatives). The Fund may seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as reverse repurchase agreements or dollar rolls). <br /><br />The Fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies. Under normal circumstances, the Fund invests at least 80% of its assets in Government National Mortgage Association (“GNMA”) securities. The Fund invests primarily in securities issued by the GNMA as well as other U.S. Government securities in the five to ten year maturity range. <br /><br />Securities purchased by the Fund are rated in the highest rating category (AAA or Aaa) at the time of purchase by at least one major rating agency or are determined by the Fund management team to be of similar quality. Split rated bonds will be considered to have the higher credit rating. Split rated bonds are bonds that receive different ratings from two or more rating agencies. <br /><br />The Fund measures its performance against the Barclays GNMA MBS Index (the benchmark). The Fund management team will normally attempt to structure the Fund’s portfolio to have comparable duration to its benchmark. <br /><br />The Fund also makes investments in residential and commercial mortgage-backed securities and other asset-backed securities. <br /><br />The Fund may buy or sell options or futures on a security or an index of securities, or enter into credit default swaps and interest rate transactions, including swaps (collectively, commonly known as derivatives). The Fund may seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as reverse repurchase agreements or dollar rolls). <br /><br />The Fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies. <b>Performance Information</b> Risk is inherent in all investing. The value of your investment in the Fund, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part 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 principal risks of investing in the Fund.<ul type="square"><li style="margin-left:-20px"><b>Credit Risk</b> — Credit risk refers to the possibility that the issuer of a security will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Derivatives Risk</b> — The Fund’s use of derivatives may reduce the Fund’s returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. A risk of the Fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately. Derivatives may give rise to a form of leverage and may expose the Fund to greater risk and increase its costs. Recent legislation calls for new regulation of the derivatives markets. The extent and impact of the regulation is not yet known and may not be known for some time. New regulation may make derivatives more costly, may limit the availability of derivatives, or may otherwise adversely affect the value or performance of derivatives.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Dollar Rolls Risk</b> — Dollar rolls involve the risk that the market value of the securities that the Fund is committed to buy may decline below the price of the securities the Fund has sold. These transactions may involve leverage.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Extension Risk</b> — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.</li></ul><ul type="square"><li style="margin-left:-20px"><b>High Portfolio Turnover Risk</b> — The Fund may engage in active and frequent trading of its portfolio securities. High portfolio turnover (more than 100%) may result in increased transaction costs to the Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of Fund portfolio securities may result in the realization and/or distribution to shareholders of higher capital gains or losses as compared to a fund with less active trading policies. These effects of higher than normal portfolio turnover may adversely affect Fund performance. In addition, investment in mortgage dollar rolls and participation in TBA transactions may significantly increase the Fund’s portfolio turnover rate. A TBA transaction is a method of trading mortgage-backed securities where the buyer and seller agree upon general trade parameters such as agency, settlement date, par amount, and price.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Interest Rate Risk</b> — Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall, and decrease as interest rates rise.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Leverage Risk</b> — Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Liquidity Risk</b> — Liquidity risk exists when particular investments are difficult to purchase or sell. The Fund’s investments in illiquid securities may reduce the returns of the Fund because it may be difficult to sell the illiquid securities at an advantageous time or price. To the extent that the Fund’s principal investment strategies involve derivatives or securities with substantial market and/or credit risk, the Fund will tend to have the greatest exposure to liquidity risk. Liquid investments may become illiquid after purchase by the Fund, particularly during periods of market turmoil. Illiquid investments may be harder to value, especially in changing markets, and if the Fund is forced to sell these investments to meet redemption requests or for other cash needs, the Fund may suffer a loss. In addition, when there is illiquidity in the market for certain securities, the Fund, due to limitations on illiquid investments, may be subject to purchase and sale restrictions.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Market Risk and Selection Risk</b> — Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Mortgage- and Asset-Backed Securities Risks</b> — Mortgage- and asset-backed securities represent interests in “pools” of mortgages or other assets, including consumer loans or receivables held in trust. Mortgage- and asset-backed securities are subject to credit, interest rate, prepayment and extension risks. These securities also are subject to risk of default on the underlying mortgage or asset, particularly during periods of economic downturn. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Prepayment Risk</b> — When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Repurchase Agreements, Purchase and Sale Contracts Risks</b> — If the other party to a repurchase agreement or purchase and sale contract defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security in either situation and the market value of the security declines, the Fund may lose money.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Reverse Repurchase Agreements Risk</b> — Reverse repurchase agreements involve the sale of securities held by the Fund with an agreement to repurchase the securities at an agreed-upon price, date and interest payment. Reverse repurchase agreements involve the risk that the other party may fail to return the securities in a timely manner or at all. The Fund could lose money if it is unable to recover the securities and the value of the collateral held by the Fund, including the value of the investments made with cash collateral, is less than the value of securities. These events could also trigger adverse tax consequences to the Fund.</li></ul><ul type="square"><li style="margin-left:-20px"><b>U.S. Government Issuer Risk</b> — Treasury obligations may differ in their interest rates, maturities, times of issuance and other characteristics. Obligations of U.S. Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the U.S. Government. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so.</li></ul> Since Class R Shares of the Inflation Protected Bond Portfolio have no performance history, the chart and table below give you a picture of the Fund's long-term performance for Investor A Shares. Although the chart and table show returns for the Investor A Shares which are not offered in this Prospectus, the Investor A Shares would have substantially similar annual returns as the Class R Shares offered in this Prospectus because the Investor A Shares and the Class R Shares are invested in the same portfolio of securities and the annual returns would differ only to the extent that the Investor A Shares and the Class R Shares do not have the same expenses. The actual return of Class R Shares would have been lower than that of Investor A Shares because Class R Shares have higher expenses than Investor A Shares. Investor A Shares of the Fund are estimated to have expenses of 0.86% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Class R Shares of the Fund are expected to have expenses of 1.21% of average daily net assets (after waivers and reimbursements) for the current fiscal year.<br/><br/>The information shows you how the Fund's performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Fund's performance to that of the Barclays Global Real: U.S. TIPS Index. As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. If the Fund's investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund's returns would have been lower. Updated information on the Fund's performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052. <b>Performance Information</b> <b>Investor A Shares<br/>ANNUAL TOTAL RETURNS<br/>Inflation Protected Bond Portfolio<br/>As of 12/31</b> <b>Performance Information</b> During the period shown in the bar chart, the highest return for a quarter was 5.80% (quarter ended March 31, 2008) and the lowest return for a quarter was –3.76% (quarter ended September 30, 2008). The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. <b>As of 12/31/12<br/>Average Annual Total Returns</b> 800-882-0052 http://www.blackrock.com/funds After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. As with all such investments, past performance (before and after taxes) is not an indication of future results. The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Fund’s performance to that of the Barclays GNMA MBS Index. As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. If the Fund’s investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. Updated information on the Fund’s performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052. <b>Annual Fund Operating Expenses</b><br/><b>(expenses that you pay each year as a percentage of the value of your investment)</b> The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Fund’s performance to that of the Barclays GNMA MBS Index. As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. If the Fund’s investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. Updated information on the Fund’s performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052. <b>BlackRock Shares </b><br /><b>ANNUAL TOTAL RETURNS </b><br /><b>GNMA Portfolio </b><br /><b>As of 12/31 </b> After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. Fund Overview<br/><br/><b>Key Facts about BlackRock Long Duration Bond Portfolio </b> Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. <b>Investment Objective </b> The investment objective of the BlackRock Long Duration Bond Portfolio (the “Long Duration Bond Portfolio” or the “Fund”) is to seek to maximize total return, consistent with income generation and prudent investment management. <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleNoRedemptionTransposedBLACKROCKU.S.GOVERNMENTBONDPORTFOLIO column period compact * ~</div> <b>Fees and Expenses of the Fund </b> This table describes the fees and expenses that you may pay if you buy and hold BlackRock Shares of the Fund. However, the table includes all applicable fees and sales charges. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. <b>As of 12/31/12 <br/>ANNUAL TOTAL RETURNS </b> 548 <b>Service Shares </b><br/><b>ANNUAL TOTAL RETURNS </b><br/><b>GNMA Portfolio </b><br/><b>As of 12/31 </b> 256 828 534 1134 937 <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleTransposedBLACKROCKU.S.GOVERNMENTBONDPORTFOLIO column period compact * ~</div> During the ten-year period shown in the bar chart, the highest return for a quarter was 4.26% (quarter ended December 31, 2008) and the lowest return for a quarter was –0.94% (quarter ended June 30, 2004). 2067 <b>Annual Fund Operating Expenses</b><br/><b>(expenses that you pay each year as a percentage of the value of your investment)</b> 2064 0.074 0.0163 0.005 0.0396 Risk is inherent in all investing. The value of your investment in the Fund, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part 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 principal risks of investing in the Fund. <br /> <ul type="square"><li style="margin-left:-20px"><b>Credit Risk</b> — Credit risk refers to the possibility that the issuer of a security will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Derivatives Risk</b> — The Fund’s use of derivatives may reduce the Fund’s returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. A risk of the Fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately. Derivatives may give rise to a form of leverage and may expose the Fund to greater risk and increase its costs. Recent legislation calls for new regulation of the derivatives markets. The extent and impact of the regulation is not yet known and may not be known for some time. New regulation may make derivatives more costly, may limit the availability of derivatives, or may otherwise adversely affect the value or performance of derivatives. </li></ul> <ul type="square"><li style="margin-left:-20px"><b>Dollar Rolls Risk </b>— Dollar rolls involve the risk that the market value of the securities that the Fund is committed to buy may decline below the price of the securities the Fund has sold. These transactions may involve leverage.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Extension Risk </b>— When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>High Portfolio Turnover Risk </b>— The Fund may engage in active and frequent trading of its portfolio securities. High portfolio turnover (more than 100%) may result in increased transaction costs to the Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of Fund portfolio securities may result in the realization and/or distribution to shareholders of higher capital gains or losses as compared to a fund with less active trading policies. These effects of higher than normal portfolio turnover may adversely affect Fund performance. In addition, investment in mortgage dollar rolls and participation in TBA transactions may significantly increase the Fund’s portfolio turnover rate. A TBA transaction is a method of trading mortgage-backed securities where the buyer and seller agree upon general trade parameters such as agency, settlement date, par amount, and price.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Interest Rate Risk </b>— Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall, and decrease as interest rates rise.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Leverage Risk </b>— Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Liquidity Risk </b>— Liquidity risk exists when particular investments are difficult to purchase or sell. The Fund’s investments in illiquid securities may reduce the returns of the Fund because it may be difficult to sell the illiquid securities at an advantageous time or price. To the extent that the Fund’s principal investment strategies involve derivatives or securities with substantial market and/or credit risk, the Fund will tend to have the greatest exposure to liquidity risk. Liquid investments may become illiquid after purchase by the Fund, particularly during periods of market turmoil. Illiquid investments may be harder to value, especially in changing markets, and if the Fund is forced to sell these investments to meet redemption requests or for other cash needs, the Fund may suffer a loss. In addition, when there is illiquidity in the market for certain securities, the Fund, due to limitations on illiquid investments, may be subject to purchase and sale restrictions.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Market Risk and Selection Risk </b>— Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Mortgage- and Asset-Backed Securities Risks </b>— Mortgage- and asset-backed securities represent interests in “pools” of mortgages or other assets, including consumer loans or receivables held in trust. Mortgage- and asset-backed securities are subject to credit, interest rate, prepayment and extension risks. These securities also are subject to risk of default on the underlying mortgage or asset, particularly during periods of economic downturn. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Prepayment Risk </b>— When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Repurchase Agreements, Purchase and Sale Contracts Risks </b>— If the other party to a repurchase agreement or purchase and sale contract defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security in either situation and the market value of the security declines, the Fund may lose money.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Reverse Repurchase Agreements Risk </b>— Reverse repurchase agreements involve the sale of securities held by the Fund with an agreement to repurchase the securities at an agreed-upon price, date and interest payment. Reverse repurchase agreements involve the risk that the other party may fail to return the securities in a timely manner or at all. The Fund could lose money if it is unable to recover the securities and the value of the collateral held by the Fund, including the value of the investments made with cash collateral, is less than the value of securities. These events could also trigger adverse tax consequences to the Fund.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>U.S. Government Issuer Risk </b>— Treasury obligations may differ in their interest rates, maturities, times of issuance and other characteristics. Obligations of U.S. Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the U.S. Government. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so.</li></ul> 0.0235 0.102 0 0.0119 0.216 0.038 0.0019 0.0701 0.1081 0.0001 78 0.007 -0.0024 0.0509 267 0.0046 <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBLACKROCKU.S.GOVERNMENTBONDPORTFOLIO column period compact * ~</div> 0.0363 471 Under normal circumstances, the Fund invests at least 80% of its assets in Government National Mortgage Association (“GNMA”) securities. The Fund invests primarily in securities issued by the GNMA as well as other U.S. Government securities in the five to ten year maturity range. <br/><br/> Securities purchased by the Fund are rated in the highest rating category (AAA or Aaa) at the time of purchase by at least one major rating agency or are determined by the Fund management team to be of similar quality. Split rated bonds will be considered to have the higher credit rating. Split rated bonds are bonds that receive different ratings from two or more rating agencies.<br/><br/>The Fund measures its performance against the Barclays GNMA MBS Index (the benchmark). The Fund management team will normally attempt to structure the Fund’s portfolio to have comparable duration to its benchmark.<br/><br/>The Fund also makes investments in residential and commercial mortgage-backed securities and other asset-backed securities.<br/><br/>The Fund may buy or sell options or futures on a security or an index of securities, or enter into credit default swaps and interest rate transactions, including swaps (collectively, commonly known as derivatives). The Fund may seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as reverse repurchase agreements or dollar rolls).<br/><br/>The Fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies. 0.0597 1062 0.0644 0.0259 During the ten-year period shown in the bar chart, the highest return for a quarter was 4.24% (quarter ended December 31, 2008) and the lowest return for a quarter was –0.98% (quarter ended June 30, 2004). <b>Investor A Shares </b><br /><b>ANNUAL TOTAL RETURNS </b><br /><b>GNMA Portfolio </b><br /><b>As of 12/31 </b> <b>As of 12/31/12</b><br /><b>Average Annual Total Returns</b> After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. February 1, 2014 You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. <b>As of 12/31/12<br/>Average Annual Total Returns</b> February 1, 2014 1.2 The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. 800-882-0052 http://www.blackrock.com/funds As with all such investments, past performance (before and after taxes) is not an indication of future results. 7.41 You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. <ul type="square"><li style="margin-left:-20px"><b>Non-Diversification Risk</b> — The Fund is a non-diversified fund. Because the Fund may invest in securities of a smaller number of issuers, it may be more exposed to the risks associated with and developments affecting an individual issuer than a fund that invests more widely.</li></ul> The information shows you how the Fund's performance has varied year by year and provides some indication of the risks of investing in the Fund. 800-882-0052 http://www.blackrock.com/funds As with all such investments, past performance (before and after taxes) is not an indication of future results. 0.0356 0.0079 Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. 0.1179 0.0014 0.0259 However, the table includes all applicable fees and sales charges. 0.102 0.0204 0.0168 0.0227 0.059 0.1155 0.0641 0.0316 0.1117 0.0497 Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. 0.0878 0.0658 highest return 0.0474 0.0338 0.0325 0.0546 0.0974 0.0727 After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. 2008-12-31 0.0706 0.1096 0.1016 0.0445 However, the table includes all applicable fees and sales charges. 0.0395 0.0262 lowest return 0.0259 0.0487 2007-06-30 After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. -0.0085 Actual after-tax returns depend on the investor's tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. Actual after-tax returns depend on the investor's tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. February 1, 2014 7.41 0.101 0.108 0.0696 You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. 0.0716 0.0961 Fund Overview<br/><br/><b>Key Facts about BlackRock U.S. Government Bond Portfolio </b> The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. <b>Investment Objective </b> 800-882-0052 The investment objective of the BlackRock U.S. Government Bond Portfolio (the “U.S. Government Bond Portfolio” or the “Fund”) is to seek to maximize total return, consistent with income generation and prudent investment management. http://www.blackrock.com/funds <b>Fees and Expenses of the Fund </b> This table describes the fees and expenses that you may pay if you buy and hold BlackRock Shares of the Fund. 2007-10-19 As with all such investments, past performance (before and after taxes) is not an indication of future results. 2007-10-19 <b>Annual Fund Operating Expenses</b><br/><b>(expenses that you pay each year as a percentage of the value of your investment)</b> Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. <b>Portfolio Turnover: </b> The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 790% of the average value of its portfolio. <b> Principal Investment Strategies of the Fund </b> However, the table includes all applicable fees and sales charges. Under normal circumstances, the Fund invests at least 80% of its assets in bonds that are issued or guaranteed by the U.S. Government and its agencies. The Fund invests primarily in the highest rated government and agency bonds and maintains an average portfolio duration that is within ±20% of the Barclays U.S. Government/Mortgage Index (the benchmark).<br/><br/>Securities purchased by the Fund generally are rated in the highest rating category (AAA or Aaa) at the time of purchase by at least one major rating agency or are determined by the Fund management team to be of similar quality. In addition, the Fund’s dollar-weighted average maturity will be between 3 and 10 years.<br/><br/>The Fund evaluates sectors of the bond market and individual securities within these sectors. The Fund selects bonds from several sectors including: U.S. Treasuries and agency securities, commercial and residential mortgage-backed securities, collateralized mortgage obligations (“CMOs”), asset-backed securities and corporate bonds. <br/><br/>The Fund invests primarily in dollar-denominated bonds, but may invest up to 10% of its assets in non-dollar denominated bonds of issuers located outside of the United States. The Fund’s investment in non-dollar denominated bonds may be on a currency hedged or unhedged basis.<br/><br/>The Fund may buy or sell options or futures on a security or an index of securities, or enter into credit default swaps and interest rate or foreign currency transactions, including swaps (collectively, commonly known as derivatives). The Fund may seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as reverse repurchase agreements or dollar rolls).<br/><br/> The Fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies. <b>Example: </b> This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. <b>Principal Risks of Investing in the Fund </b> Actual after-tax returns depend on the investor's tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. Risk is inherent in all investing. The value of your investment in the Fund, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part 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 principal risks of investing in the Fund. <br /> <ul type="square"><li style="margin-left:-20px"><b>Credit Risk </b>— Credit risk refers to the possibility that the issuer of a security will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Derivatives Risk </b>— The Fund’s use of derivatives may reduce the Fund’s returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. A risk of the Fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately. Derivatives may give rise to a form of leverage and may expose the Fund to greater risk and increase its costs. Recent legislation calls for new regulation of the derivatives markets. The extent and impact of the regulation is not yet known and may not be known for some time. New regulation may make derivatives more costly, may limit the availability of derivatives, or may otherwise adversely affect the value or performance of derivatives. </li></ul> <ul type="square"><li style="margin-left:-20px"><b>Dollar Rolls Risk </b>— Dollar rolls involve the risk that the market value of the securities that the Fund is committed to buy may decline below the price of the securities the Fund has sold. These transactions may involve leverage.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Extension Risk </b>— When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Foreign Securities Risk</b> — Foreign investments often involve special risks not present in U.S. investments that can increase the chances that the Fund will lose money. These risks include:</li></ul><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">The Fund generally holds its foreign securities and cash in foreign banks and securities depositories, which may be recently organized or new to the foreign custody business and may be subject to only limited or no regulatory oversight.</p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">Changes in foreign currency exchange rates can affect the value of the Fund’s portfolio.</p></td></tr></table></div><br/> <div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">The economies of certain foreign markets may not compare favorably with the economy of the United States with respect to such issues as growth of gross national product, reinvestment of capital, resources and balance of payments position.</p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">The governments of certain countries may prohibit or impose substantial restrictions on foreign investments in their capital markets or in certain industries. </p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">Many foreign governments do not supervise and regulate stock exchanges, brokers and the sale of securities to the same extent as does the United States and may not have laws to protect investors that are comparable to U.S. securities laws. </p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">Settlement and clearance procedures in certain foreign markets may result in delays in payment for or delivery of securities not typically associated with settlement and clearance of U.S. investments.</p></td></tr></table></div><ul type="square"><li style="margin-left:-20px"><b>High Portfolio Turnover Risk </b>— The Fund may engage in active and frequent trading of its portfolio securities. High portfolio turnover (more than 100%) may result in increased transaction costs to the Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of Fund portfolio securities may result in the realization and/or distribution to shareholders of higher capital gains or losses as compared to a fund with less active trading policies. These effects of higher than normal portfolio turnover may adversely affect Fund performance. In addition, investment in mortgage dollar rolls and participation in TBA transactions may significantly increase the Fund’s portfolio turnover rate. A TBA transaction is a method of trading mortgage-backed securities where the buyer and seller agree upon general trade parameters such as agency, settlement date, par amount, and price.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Interest Rate Risk </b>— Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall, and decrease as interest rates rise.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Leverage Risk </b>— Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Liquidity Risk </b>— Liquidity risk exists when particular investments are difficult to purchase or sell. The Fund’s investments in illiquid securities may reduce the returns of the Fund because it may be difficult to sell the illiquid securities at an advantageous time or price. To the extent that the Fund’s principal investment strategies involve derivatives or securities with substantial market and/or credit risk, the Fund will tend to have the greatest exposure to liquidity risk. Liquid investments may become illiquid after purchase by the Fund, particularly during periods of market turmoil. Illiquid investments may be harder to value, especially in changing markets, and if the Fund is forced to sell these investments to meet redemption requests or for other cash needs, the Fund may suffer a loss. In addition, when there is illiquidity in the market for certain securities, the Fund, due to limitations on illiquid investments, may be subject to purchase and sale restrictions.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Market Risk and Selection Risk </b>— Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Mortgage- and Asset-Backed Securities Risks</b> — Mortgage- and asset-backed securities represent interests in “pools” of mortgages or other assets, including consumer loans or receivables held in trust. Mortgage- and asset-backed securities are subject to credit, interest rate, prepayment and extension risks. These securities also are subject to risk of default on the underlying mortgage or asset, particularly during periods of economic downturn. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Prepayment Risk</b> — When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Repurchase Agreements, Purchase and Sale Contracts Risks </b>— If the other party to a repurchase agreement or purchase and sale contract defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security in either situation and the market value of the security declines, the Fund may lose money.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Reverse Repurchase Agreements Risk </b>— Reverse repurchase agreements involve the sale of securities held by the Fund with an agreement to repurchase the securities at an agreed-upon price, date and interest payment. Reverse repurchase agreements involve the risk that the other party may fail to return the securities in a timely manner or at all. The Fund could lose money if it is unable to recover the securities and the value of the collateral held by the Fund, including the value of the investments made with cash collateral, is less than the value of securities. These events could also trigger adverse tax consequences to the Fund.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>U.S. Government Issuer Risk</b> — Treasury obligations may differ in their interest rates, maturities, times of issuance and other characteristics. Obligations of U.S. Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the U.S. Government. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so.</li></ul> 0.0036 <b>Performance Information </b> 0 Since BlackRock Shares of the U.S. Government Bond Portfolio are not currently offered for sale and have no current performance history, the chart and table below give you a picture of the Fund’s long-term performance for Investor A Shares. Although the chart and table show returns for the Investor A Shares which are not offered in this Prospectus, the Investor A Shares would have substantially similar annual returns as the BlackRock Shares offered in this Prospectus because the Investor A Shares and the BlackRock Shares are invested in the same portfolio of securities and the annual returns would differ only to the extent that the Investor A Shares and the BlackRock Shares do not have the same expenses. The actual return of BlackRock Shares would have been higher than that of Investor A Shares because BlackRock Shares have lower expenses than Investor A Shares. Investor A Shares of the Fund are estimated to have expenses of 1.05% of average daily net assets (after waivers and reimbursements) for the current fiscal year and BlackRock Shares of the Fund are expected to have expenses of 0.45% of average daily net assets (after waivers and reimbursements) for the current fiscal year.<br/><br/>The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Fund’s performance to that of the Barclays U.S. Government/Mortgage Index. As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. If the Fund’s investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. Updated information on the Fund’s performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052. 0.0011 <b>Service Shares</b><br/><b>ANNUAL TOTAL RETURNS</b><br/><b>U.S. Government Bond Portfolio</b><br/><b>As of 12/31</b> 0.0001 highest return 0.0048 <b>Investor A Shares </b><br/><b>ANNUAL TOTAL RETURNS </b><br/><b>BlackRock U.S. Government Bond Portfolio </b><br/><b>As of 12/31 </b> 2008-12-31 -0.0015 During the ten-year period shown in the bar chart, the highest return for a quarter was 4.19% (quarter ended September 30, 2011) and the lowest return for a quarter was –2.09% (quarter ended June 30, 2004). 0.0424 0.0033 <b>As of 12/31/12<br/>Average Annual Total Returns</b> lowest return After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor&#8217s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Investor A Shares, and the after tax returns for BlackRock Shares will vary. 2004-06-30 -0.0098 0.0658 0.056 0.0453 0.0698 0.068 0.0544 0.0506 0.0704 0.0661 0.0511 0.0482 0.0676 February 1, 2014 7.9 Fund Overview<br /><br /><b>Key Facts about BlackRock GNMA Portfolio</b> You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. 2004-06-28 The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. A contingent deferred sales charge (“CDSC”) of 0.50% is assessed on certain redemptions of Investor A Shares made within 18 months after purchase where no initial sales charge was paid at time of purchase as part of an investment of $1,000,000 or more. 800-882-0052 http://www.blackrock.com/funds As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. <b>Example: </b> However, the table includes all applicable fees and sales charges. This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: 47 200 <b>As of 12/31/12</b><br/><b>Average Annual Total Returns</b> 366 Fund Overview<br/><br/><b>Key Facts about BlackRock U.S. Government Bond Portfolio</b> <b>Annual Fund Operating Expenses</b><br/><b>(expenses that you pay each year as a percentage of the value of your investment)</b> 848 148 156 528 February 1, 2014 534 934 937 2067 7.41 2064 You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. 800-882-0052 The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 86% of the average value of its portfolio. http://www.blackrock.com/funds 34 As with all such investments, past performance (before and after taxes) is not an indication of future results. 139 254 Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. 589 However, the table includes all applicable fees and sales charges. <b>Principal Investment Strategies of the Fund</b> After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. 0.011 0.0181 highest return 0.0066 After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Fund Overview<br/><br/><b>Key Facts about BlackRock U.S. Government Bond Portfolio</b> 2008-12-31 <b>Investment Objective </b> 0.0326 Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. The investment objective of the BlackRock U.S. Government Bond Portfolio (the “U.S. Government Bond Portfolio” or the “Fund”) is to seek to maximize total return, consistent with income generation and prudent investment management. 0.0634 0.0426 After-tax returns are shown for Investor A Shares, and the after tax returns for BlackRock Shares will vary. 0.0463 0.0308 lowest return <b>Fees and Expenses of the Fund </b> 0.0541 This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $25,000 in the BlackRock-advised fund complex. More information about these and other discounts is available from your financial professional and in the “Details about the Share Classes” section on page 38 of the Fund’s prospectus and in the “Purchase of Shares” section on page II-71 of the Fund’s statement of additional information. 2004-06-30 0.0581 <b>Shareholder Fees</b><br/><b>(fees paid directly from your investment)</b> -0.0094 Under normal circumstances, the Fund invests at least 80% of its assets in bonds and maintains an average portfolio duration that is within ±20% of the duration of the Barclays Long Government/Credit Index (the benchmark). <br /><br /> Fund management evaluates sectors of the U.S. and non-U.S. bond market and individual securities within these sectors. The Fund selects bonds from several sectors including: U.S. Treasuries and agency securities, commercial and residential mortgage-backed securities, collateralized mortgage obligations (“CMOs”), pass-throughs, asset-backed securities, corporate bonds and taxable and tax-exempt municipal bonds. The Fund may also invest in preferred stock. <br /><br /> The Fund invests primarily in dollar-denominated investment grade bonds, but may invest up to 20% of its assets in any combination of non-investment grade bonds (high yield or junk bonds), non-dollar denominated bonds and bonds of emerging market issuers. The Fund’s investment in non-dollar denominated bonds may be on a currency hedged or unhedged basis. Non-investment grade bonds acquired by the Fund will generally be in the lower rating categories of the major rating agencies (BB or lower by Standard & Poor’s (“S&P”) or Ba or lower by Moody’s Investors Service, Inc. (“Moody’s”)) or will be determined by the management team to be of similar quality. The Fund may invest in securities rated in the category C and above or determined by the management team to be of comparable quality. Split rated bonds will be considered to have the higher credit rating. Split rated bonds are bonds that receive different ratings from two or more rating agencies. <br /><br /> The Fund may buy or sell options or futures on a security or an index of securities, or enter into credit default swaps and interest rate or foreign currency transactions, including swaps (collectively, commonly known as derivatives). The Fund may seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as reverse repurchase agreements or dollar rolls). <br /><br /> The Fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies. <b>Principal Risks of Investing in the Fund </b> 0.0189 0.0272 0.0346 0.0234 0.038 <b>Annual Fund Operating Expenses</b><br/><b>(expenses that you pay each year as a percentage of the <br/> value of your investment)</b> 0.0668 <b>Portfolio Turnover: </b> The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 790% of the average value of its portfolio. 0.0836 0.0574 0.0721 0.0657 <b>Example:</b> 0.0377 This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: <b>Principal Investment Strategies of the Fund </b> 7.9 0.0408 Under normal circumstances, the Fund invests at least 80% of its assets in bonds that are issued or guaranteed by the U.S. Government and its agencies. The Fund invests primarily in the highest rated government and agency bonds and maintains an average portfolio duration that is within ±20% of the Barclays U.S. Government/Mortgage Index (the benchmark).<br/><br/>Securities purchased by the Fund generally are rated in the highest rating category (AAA or Aaa) at the time of purchase by at least one major rating agency or are determined by the Fund management team to be of similar quality. In addition, the Fund’s dollar-weighted average maturity will be between 3 and 10 years.<br/><br/>The Fund evaluates sectors of the bond market and individual securities within these sectors. The Fund selects bonds from several sectors including: U.S. Treasuries and agency securities, commercial and residential mortgage-backed securities, collateralized mortgage obligations (“CMOs”), asset-backed securities and corporate bonds.<br/><br/>The Fund invests primarily in dollar-denominated bonds, but may invest up to 10% of its assets in non-dollar denominated bonds of issuers located outside of the United States. The Fund’s investment in non-dollar denominated bonds may be on a currency hedged or unhedged basis.<br/><br/>The Fund may buy or sell options or futures on a security or an index of securities, or enter into credit default swaps and interest rate or foreign currency transactions, including swaps (collectively, commonly known as derivatives). The Fund may seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as reverse repurchase agreements or dollar rolls).<br/><br/>The Fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies. February 1, 2014 0.0125 <b>Principal Risks of Investing in the Fund </b> <b>Performance Information</b> -0.0211 0.1205 You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. -0.0245 -0.0138 0.0087 The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. 0.0227 0.0058 0.0054 0.1066 The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Fund’s performance to that of the Barclays U.S. Government/Mortgage Index. The returns in the table for Class R Shares, which commenced operations on July 18, 2011, are based on the Fund’s Institutional Shares adjusted to reflect the class specific fees applicable to Class R Shares. As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. If the Fund’s investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. Updated information on the Fund’s performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052. 0.0633 <b>Investor A Shares </b><br/><b>ANNUAL TOTAL RETURNS </b><br/><b>U.S. Government Bond Portfolio </b><br/><b>As of 12/31 </b> 0.1195 0.0381 0.0025 During the ten-year period shown in the bar chart, the highest return for a quarter was 4.19% (quarter ended September 30, 2011) and the lowest return for a quarter was –2.09% (quarter ended June 30, 2004). 0.0243 0.0244 0.0406 0.0546 0.0708 http://www.blackrock.com/funds <b>As of 12/31/12</b><br/><b>Average Annual Total Returns</b> 0.0338 0.02 0.0207 0.0329 0.0487 800-882-0052 After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Investor A Shares only, and the after-tax returns for Investor B, Investor C, Institutional and Class R Shares will vary. 0.0032 As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. 0.0002 After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. 0.003 Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. You would pay the following expenses if you did not redeem your shares: February 1, 2014 7.9 0.0111 You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $25,000 in the BlackRock-advised fund complex. You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. -0.0019 The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. 800-882-0052 http://www.blackrock.com/funds highest return 0.0092 As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. 2011-09-30 After-tax returns are shown for Investor A Shares only, and the after-tax returns for Investor B, Investor C, Institutional and Class R Shares will vary. Actual after-tax returns depend on the investor's tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. highest return <b>Performance Information </b> 2004-06-30 2011-09-30 The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Fund’s performance to that of the Barclays Long Government/Credit Index. As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. If the Fund’s investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. Updated information on the Fund’s performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052. -0.0205 During the period shown in the bar chart, the highest return for a quarter was 15.02% (quarter ended December 31, 2008) and the lowest return for a quarter was –6.36% (quarter ended March 31, 2009). <b>Performance Information</b> 0.0419 lowest return 2004-06-30 -0.0209 <b><a name="toc439740_2"></a>Investment Objective </b> The investment objective of the BlackRock U.S. Government Bond Portfolio (the “U.S. Government Bond Portfolio” or the “Fund”) is to seek to maximize total return, consistent with income generation and prudent investment management. <b><a name="toc439740_3"></a>Fees and Expenses of the Fund </b> This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. A contingent deferred sales charge (“CDSC”) of 0.50% is assessed on certain redemptions of Investor A Shares made within 18 months after purchase where no initial sales charge was paid at time of purchase as part of an investment of $1,000,000 or more. <b>Example: </b> This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 790% of the average value of its portfolio. <b><a name="toc439740_4"></a>Principal Investment Strategies of the Fund </b> 94 334 593 1335 0.1136 0.078 0.0878 0.0822 0.1109 0.0844 0.0814 0.1016 0.1092 0.0831 0.0801 0.101 0.0377 2007-10-19 0.0671 0.0715 0.058 0.0846 0.0672 0.0401 0.0226 0.0348 0.0281 0.0049 0 0.0034 0.0083 <div style="display:none">~ http://www.blackrock.com/role/ScheduleShareholderFeesBLACKROCKU.S.GOVERNMENTBONDPORTFOLIO column period compact * ~</div> -0.0038 0.0045 46 227 423 990 0.0155 0.0211 0.0119 0.0358 0.0685 0.0496 0.035 0.0377 0.0199 0.0258 0.0242 0.0585 0.0629 0.0246 0.0637 0.0452 0.0439 0.0603 <b><a name="toc439740_6"></a>Performance Information </b> 0.051 0.0329 0.0329 The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Fund’s performance to that of the Barclays U.S. Government/Mortgage Index. Prior to July 18, 2011, the returns for Investor B1 and Investor C1 Shares are based on the Fund’s Institutional Shares adjusted to reflect the applicable distribution and service (12b-1) fees. As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. If the Fund’s investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. Updated information on the Fund’s performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052. 0.0521 During the ten-year period shown in the bar chart, the highest return for a quarter was 4.05% (quarter ended September 30, 2011 and the lowest return for a quarter was –2.17% (quarter ended June 30, 2004). -0.0164 -0.0107 0.0227 0.0374 0.0244 0.0243 0.0546 0.0339 0.0212 After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Investor A Shares only, and the after-tax returns for Investor B1 and Investor C1 Shares will vary. 0.0213 0.0487 Risk is inherent in all investing. The value of your investment in the Fund, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part 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 principal risks of investing in the Fund. <ul type="square"><li style="margin-left:-20px"> <b>Credit Risk</b> — Credit risk refers to the possibility that the issuer of a security will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer. </li></ul> <ul type="square"><li style="margin-left:-20px"> <b>Derivatives Risk</b> — The Fund’s use of derivatives may reduce the Fund’s returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. A risk of the Fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately. Derivatives may give rise to a form of leverage and may expose the Fund to greater risk and increase its costs. Recent legislation calls for new regulation of the derivatives markets. The extent and impact of the regulation is not yet known and may not be known for some time. New regulation may make derivatives more costly, may limit the availability of derivatives, or may otherwise adversely affect the value or performance of derivatives. </li></ul> <ul type="square"><li style="margin-left:-20px"> <b>Dollar Rolls Risk</b> — Dollar rolls involve the risk that the market value of the securities that the Fund is committed to buy may decline below the price of the securities the Fund has sold. These transactions may involve leverage. </li></ul> <ul type="square"><li style="margin-left:-20px"> <b>Extension Risk</b> — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall. </li></ul><ul type="square"><li style="margin-left:-20px"><b>Foreign Securities Risk — </b>Foreign investments often involve special risks not present in U.S. investments that can increase the chances that the Fund will lose money. These risks include:</li></ul><p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">The Fund generally holds its foreign securities and cash in foreign banks and securities depositories, which may be recently organized or new to the foreign custody business and may be subject to only limited or no regulatory oversight. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">Changes in foreign currency exchange rates can affect the value of the Fund's portfolio. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">The economies of certain foreign markets may not compare favorably with the economy of the United States with respect to such issues as growth of gross national product, reinvestment of capital, resources and balance of payments position. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">The governments of certain countries may prohibit or impose substantial restrictions on foreign investments in their capital markets or in certain industries. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">Many foreign governments do not supervise and regulate stock exchanges, brokers and the sale of securities to the same extent as does the United States and may not have laws to protect investors that are comparable to U.S. securities laws. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">Settlement and clearance procedures in certain foreign markets may result in delays in payment for or delivery of securities not typically associated with settlement and clearance of U.S. investments. </td></tr></table><ul type="square"><li style="margin-left:-20px"><b>High Portfolio Turnover Risk</b> — The Fund may engage in active and frequent trading of its portfolio securities. High portfolio turnover (more than 100%) may result in increased transaction costs to the Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of Fund portfolio securities may result in the realization and/or distribution to shareholders of higher capital gains or losses as compared to a fund with less active trading policies. These effects of higher than normal portfolio turnover may adversely affect Fund performance. In addition, investment in mortgage dollar rolls and participation in TBA transactions may significantly increase the Fund’s portfolio turnover rate. A TBA transaction is a method of trading mortgage-backed securities where the buyer and seller agree upon general trade parameters such as agency, settlement date, par amount, and price. </li></ul> <ul type="square"><li style="margin-left:-20px"><b>Interest Rate Risk</b> — Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall, and decrease as interest rates rise. </li></ul><ul type="square"><li style="margin-left:-20px"><b>Leverage Risk</b> — Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage. </li></ul> <ul type="square"><li style="margin-left:-20px"><b>Liquidity Risk</b> — Liquidity risk exists when particular investments are difficult to purchase or sell. The Fund’s investments in illiquid securities may reduce the returns of the Fund because it may be difficult to sell the illiquid securities at an advantageous time or price. To the extent that the Fund’s principal investment strategies involve derivatives or securities with substantial market and/or credit risk, the Fund will tend to have the greatest exposure to liquidity risk. Liquid investments may become illiquid after purchase by the Fund, particularly during periods of market turmoil. Illiquid investments may be harder to value, especially in changing markets, and if the Fund is forced to sell these investments to meet redemption requests or for other cash needs, the Fund may suffer a loss. In addition, when there is illiquidity in the market for certain securities, the Fund, due to limitations on illiquid investments, may be subject to purchase and sale restrictions. </li></ul> <ul type="square"><li style="margin-left:-20px"><b>Market Risk and Selection Risk </b>— Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money. </li></ul> <ul type="square"><li style="margin-left:-20px"><b>Mortgage- and Asset-Backed Securities Risks</b> — Mortgage- and asset-backed securities represent interests in “pools” of mortgages or other assets, including consumer loans or receivables held in trust. Mortgage- and asset-backed securities are subject to credit, interest rate, prepayment and extension risks. These securities also are subject to risk of default on the underlying mortgage or asset, particularly during periods of economic downturn. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities. </li></ul><ul type="square"><li style="margin-left:-20px"><b>Prepayment Risk</b> — When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields. </li></ul> <ul type="square"><li style="margin-left:-20px"><b>Repurchase Agreements, Purchase and Sale Contracts Risks</b> — If the other party to a repurchase agreement or purchase and sale contract defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security in either situation and the market value of the security declines, the Fund may lose money. </li></ul> <ul type="square"><li style="margin-left:-20px"><b>Reverse Repurchase Agreements Risk</b> — Reverse repurchase agreements involve the sale of securities held by the Fund with an agreement to repurchase the securities at an agreed-upon price, date and interest payment. Reverse repurchase agreements involve the risk that the other party may fail to return the securities in a timely manner or at all. The Fund could lose money if it is unable to recover the securities and the value of the collateral held by the Fund, including the value of the investments made with cash collateral, is less than the value of securities. These events could also trigger adverse tax consequences to the Fund. </li></ul> <ul type="square"><li style="margin-left:-20px"><b>U.S. Government Issuer Risk</b> — Treasury obligations may differ in their interest rates, maturities, times of issuance and other characteristics. Obligations of U.S. Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the U.S. Government. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so. </li></ul> <b>Annual Fund Operating Expenses</b><br /><b>(expenses that you pay each year as a percentage of the value of your investment)</b> <b>Shareholder Fees</b><br /><b>(fees paid directly from your investment)</b> You would pay the following expenses if you did not redeem your shares: Under normal circumstances, the Fund invests at least 80% of its assets in bonds and maintains an average portfolio duration that is within ±20% of the duration of the Barclays Long Government/Credit Index (the benchmark).<br/><br/> Fund management evaluates sectors of the U.S. and non-U.S. bond market and individual securities within these sectors. The Fund selects bonds from several sectors including: U.S. Treasuries and agency securities, commercial and residential mortgage-backed securities, collateralized mortgage obligations ("CMOs"), pass-throughs, asset-backed securities, corporate bonds and taxable and tax-exempt municipal bonds. The Fund may also invest in preferred stock.<br/><br/> The Fund invests primarily in dollar-denominated investment grade bonds, but may invest up to 20% of its assets in any combination of non-investment grade bonds (high yield or junk bonds), non-dollar denominated bonds and bonds of emerging market issuers. The Fund's investment in non-dollar denominated bonds may be on a currency hedged or unhedged basis. Non-investment grade bonds acquired by the Fund will generally be in the lower rating categories of the major rating agencies (BB or lower by Standard & Poor's ("S&P") or Ba or lower by Moody's Investors Service, Inc. ("Moody's")) or will be determined by the management team to be of similar quality. The Fund may invest in securities rated in the category C and above or determined by the management team to be of comparable quality. Split rated bonds will be considered to have the higher credit rating. Split rated bonds are bonds that receive different ratings from two or more rating agencies.<br/><br/> The Fund may buy or sell options or futures on a security or an index of securities, or enter into credit default swaps and interest rate or foreign currency transactions, including swaps (collectively, commonly known as derivatives). The Fund may seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as reverse repurchase agreements or dollar rolls).<br/><br/> The Fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies. 0.0423 Risk is inherent in all investing. The value of your investment in the Fund, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part 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 principal risks of investing in the Fund.<ul type="square"><li style="margin-left:-20px"><b>Credit Risk </b>— Credit risk refers to the possibility that the issuer of a security will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Deflation Risk</b> — Deflation risk is the possibility that prices throughout the economy decline over time — the opposite of inflation. If inflation is negative, the principal and income of an inflation-protected bond will decline and could result in losses for the Fund.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Derivatives Risk </b>— The Fund’s use of derivatives may reduce the Fund’s returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. A risk of the Fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately. Derivatives may give rise to a form of leverage and may expose the Fund to greater risk and increase its costs. Recent legislation calls for new regulation of the derivatives markets. The extent and impact of the regulation is not yet known and may not be known for some time. New regulation may make derivatives more costly, may limit the availability of derivatives, or may otherwise adversely affect the value or performance of derivatives.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Dollar Rolls Risk</b> — Dollar rolls involve the risk that the market value of the securities that the Fund is committed to buy may decline below the price of the securities the Fund has sold. These transactions may involve leverage.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Emerging Markets Risk </b>— Emerging markets are riskier than more developed markets because they tend to develop unevenly and may never fully develop. Investments in emerging markets may be considered speculative. Emerging markets are more likely to experience hyperinflation and currency devaluations, which adversely affect returns to U.S. investors. In addition, many emerging securities markets have far lower trading volumes and less liquidity than developed markets.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Extension Risk</b> — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Foreign Securities Risk — </b>Foreign investments often involve special risks not present in U.S. investments that can increase the chances that the Fund will lose money. These risks include:</li></ul><p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">The Fund generally holds its foreign securities and cash in foreign banks and securities depositories, which may be recently organized or new to the foreign custody business and may be subject to only limited or no regulatory oversight. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">Changes in foreign currency exchange rates can affect the value of the Fund's portfolio. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">The economies of certain foreign markets may not compare favorably with the economy of the United States with respect to such issues as growth of gross national product, reinvestment of capital, resources and balance of payments position. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">The governments of certain countries may prohibit or impose substantial restrictions on foreign investments in their capital markets or in certain industries. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">Many foreign governments do not supervise and regulate stock exchanges, brokers and the sale of securities to the same extent as does the United States and may not have laws to protect investors that are comparable to U.S. securities laws. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">Settlement and clearance procedures in certain foreign markets may result in delays in payment for or delivery of securities not typically associated with settlement and clearance of U.S. investments. </td></tr></table><ul type="square"><li style="margin-left:-20px"> <b>High Portfolio Turnover Risk</b> — The Fund may engage in active and frequent trading of its portfolio securities. High portfolio turnover (more than 100%) may result in increased transaction costs to the Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of Fund portfolio securities may result in the realization and/or distribution to shareholders of higher capital gains or losses as compared to a fund with less active trading policies. These effects of higher than normal portfolio turnover may adversely affect Fund performance. In addition, investment in mortgage dollar rolls and participation in TBA transactions may significantly increase the Fund’s portfolio turnover rate. A TBA transaction is a method of trading mortgage-backed securities where the buyer and seller agree upon general trade parameters such as agency, settlement date, par amount, and price.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Inflation Indexed Bonds </b>— The principal value of an investment is not protected or otherwise guaranteed by virtue of the Fund’s investments in inflation-indexed bonds.<br/><br/>Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted according to the rate of inflation. If the index measuring inflation falls, the principal value of inflation-indexed bonds will be adjusted downward, and consequently the interest payable on these securities (calculated with respect to a smaller principal amount) will be reduced.<br/><br/>Repayment of the original bond principal upon maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds. For bonds that do not provide a similar guarantee, the adjusted principal value of the bond repaid at maturity may be less than the original principal value.<br/><br/>The value of inflation-indexed bonds is expected to change in response to changes in real interest rates. Real interest rates are tied to the relationship between nominal interest rates and the rate of inflation. If nominal interest rates increase at a faster rate than inflation, real interest rates may rise, leading to a decrease in value of inflation-indexed bonds. Short-term increases in inflation may lead to a decline in value. Any increase in the principal amount of an inflation-indexed bond will be considered taxable ordinary income, even though investors do not receive their principal until maturity.<br/><br/>Periodic adjustments for inflation to the principal amount of an inflation-indexed bond may give rise to original issue discount, which will be includable in the Fund's gross income. Due to original issue discount, the Fund may be required to make annual distributions to shareholders that exceed the cash received, which may cause the Fund to liquidate certain investments when it is not advantageous to do so. Also, if the principal value of an inflation-indexed bond is adjusted downward due to deflation, amounts previously distributed in the taxable year may be characterized in some circumstances as a return of capital.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Interest Rate Risk</b> — Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall, and decrease as interest rates rise.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Leverage Risk</b> — Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Liquidity Risk </b>— Liquidity risk exists when particular investments are difficult to purchase or sell. The Fund’s investments in illiquid securities may reduce the returns of the Fund because it may be difficult to sell the illiquid securities at an advantageous time or price. To the extent that the Fund’s principal investment strategies involve derivatives or securities with substantial market and/or credit risk, the Fund will tend to have the greatest exposure to liquidity risk. Liquid investments may become illiquid after purchase by the Fund, particularly during periods of market turmoil. Illiquid investments may be harder to value, especially in changing markets, and if the Fund is forced to sell these investments to meet redemption requests or for other cash needs, the Fund may suffer a loss. In addition, when there is illiquidity in the market for certain securities, the Fund, due to limitations on illiquid investments, may be subject to purchase and sale restrictions.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Market Risk and Selection Risk</b> — Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Mortgage- and Asset-Backed Securities Risks </b>— Mortgage- and asset-backed securities represent interests in “pools” of mortgages or other assets, including consumer loans or receivables held in trust. Mortgage- and asset-backed securities are subject to credit, interest rate, prepayment and extension risks. These securities also are subject to risk of default on the underlying mortgage or asset, particularly during periods of economic downturn. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Non-Diversification Risk</b> — The Fund is a non-diversified fund. Because the Fund may invest in securities of a smaller number of issuers, it may be more exposed to the risks associated with and developments affecting an individual issuer than a fund that invests more widely.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Non-Investment Grade Securities Risk </b>— Although non-investment grade securities generally pay higher rates of interest than investment grade securities, non-investment grade securities are high risk investments that may cause income and principal losses for the Fund.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Prepayment Risk </b>— When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Repurchase Agreements, Purchase and Sale Contracts Risks </b> — If the other party to a repurchase agreement or purchase and sale contract defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security in either situation and the market value of the security declines, the Fund may lose money.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Reverse Repurchase Agreements Risk </b>— Reverse repurchase agreements involve the sale of securities held by the Fund with an agreement to repurchase the securities at an agreed-upon price, date and interest payment. Reverse repurchase agreements involve the risk that the other party may fail to return the securities in a timely manner or at all. The Fund could lose money if it is unable to recover the securities and the value of the collateral held by the Fund, including the value of the investments made with cash collateral, is less than the value of securities. These events could also trigger adverse tax consequences to the Fund.</li></ul><ul type="square"><li style="margin-left:-20px"><b>U.S. Government Issuer Risk</b> — Treasury obligations may differ in their interest rates, maturities, times of issuance and other characteristics. Obligations of U.S. Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the U.S. Government. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so.</li></ul> lowest return highest return 2011-09-30 0.0419 lowest return -0.0035 2004-06-30 -0.0205 -0.001 -0.0209 0.0242 February 1, 2014 7.9 You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. Risk is inherent in all investing. The value of your investment in the Fund, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part 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 principal risks of investing in the Fund. <br /> <ul type="square"><li style="margin-left:-20px"><b>Credit Risk</b> — Credit risk refers to the possibility that the issuer of a security will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Derivatives Risk</b> — The Fund’s use of derivatives may reduce the Fund’s returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. A risk of the Fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately. Derivatives may give rise to a form of leverage and may expose the Fund to greater risk and increase its costs. Recent legislation calls for new regulation of the derivatives markets. The extent and impact of the regulation is not yet known and may not be known for some time. New regulation may make derivatives more costly, may limit the availability of derivatives, or may otherwise adversely affect the value or performance of derivatives. </li></ul> <ul type="square"><li style="margin-left:-20px"><b>Dollar Rolls Risk</b> — Dollar rolls involve the risk that the market value of the securities that the Fund is committed to buy may decline below the price of the securities the Fund has sold. These transactions may involve leverage.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Extension Risk</b> — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Foreign Securities Risk</b> — Foreign investments often involve special risks not present in U.S. investments that can increase the chances that the Fund will lose money. These risks include:</li></ul><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="2%"> </td> <td valign="top" width="3.5%" align="left">—</td> <td valign="top" align="left"> <p style="margin-top: 0px; margin-bottom: 0px;">The Fund generally holds its foreign securities and cash in foreign banks and securities depositories, which may be recently organized or new to the foreign custody business and may be subject to only limited or no regulatory oversight. </p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="2%"> </td> <td valign="top" width="3.5%" align="left">—</td> <td valign="top" align="left"> <p style="margin-top: 0px; margin-bottom: 0px;">Changes in foreign currency exchange rates can affect the value of the Fund’s portfolio. </p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="2%"> </td> <td valign="top" width="3.5%" align="left">—</td> <td valign="top" align="left"> <p style="margin-top: 0px; margin-bottom: 0px;">The economies of certain foreign markets may not compare favorably with the economy of the United States with respect to such issues as growth of gross national product, reinvestment of capital, resources and balance of payments position. </p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="2%"> </td> <td valign="top" width="3.5%" align="left">—</td> <td valign="top" align="left"> <p style="margin-top: 0px; margin-bottom: 0px;">The governments of certain countries may prohibit or impose substantial restrictions on foreign investments in their capital markets or in certain industries.</p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="2%"> </td> <td valign="top" width="3.5%" align="left">—</td> <td valign="top" align="left"> <p style="margin-top: 0px; margin-bottom: 0px;">Many foreign governments do not supervise and regulate stock exchanges, brokers and the sale of securities to the same extent as does the United States and may not have laws to protect investors that are comparable to U.S. securities laws. </p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="2%"> </td> <td valign="top" width="3.5%" align="left">—</td> <td valign="top" align="left"> <p style="margin-top: 0px; margin-bottom: 0px;">Settlement and clearance procedures in certain foreign markets may result in delays in payment for or delivery of securities not typically associated with settlement and clearance of U.S. investments. </p></td></tr></table></div><br/> <ul type="square"><li style="margin-left:-20px"><b>High Portfolio Turnover Risk</b> — The Fund may engage in active and frequent trading of its portfolio securities. High portfolio turnover (more than 100%) may result in increased transaction costs to the Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of Fund portfolio securities may result in the realization and/or distribution to shareholders of higher capital gains or losses as compared to a fund with less active trading policies. These effects of higher than normal portfolio turnover may adversely affect Fund performance. In addition, investment in mortgage dollar rolls and participation in TBA transactions may significantly increase the Fund’s portfolio turnover rate. A TBA transaction is a method of trading mortgage-backed securities where the buyer and seller agree upon general trade parameters such as agency, settlement date, par amount, and price.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Interest Rate Risk</b> — Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall, and decrease as interest rates rise.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Leverage Risk</b> — Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Liquidity Risk</b> — Liquidity risk exists when particular investments are difficult to purchase or sell. The Fund’s investments in illiquid securities may reduce the returns of the Fund because it may be difficult to sell the illiquid securities at an advantageous time or price. To the extent that the Fund’s principal investment strategies involve derivatives or securities with substantial market and/or credit risk, the Fund will tend to have the greatest exposure to liquidity risk. Liquid investments may become illiquid after purchase by the Fund, particularly during periods of market turmoil. Illiquid investments may be harder to value, especially in changing markets, and if the Fund is forced to sell these investments to meet redemption requests or for other cash needs, the Fund may suffer a loss. In addition, when there is illiquidity in the market for certain securities, the Fund, due to limitations on illiquid investments, may be subject to purchase and sale restrictions.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Market Risk and Selection Risk</b> — Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Mortgage- and Asset-Backed Securities Risks</b> — Mortgage- and asset-backed securities represent interests in “pools” of mortgages or other assets, including consumer loans or receivables held in trust. Mortgage- and asset-backed securities are subject to credit, interest rate, prepayment and extension risks. These securities also are subject to risk of default on the underlying mortgage or asset, particularly during periods of economic downturn. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Prepayment Risk</b> — When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Repurchase Agreements, Purchase and Sale Contracts Risks</b> — If the other party to a repurchase agreement or purchase and sale contract defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security in either situation and the market value of the security declines, the Fund may lose money.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Reverse Repurchase Agreements Risk</b> — Reverse repurchase agreements involve the sale of securities held by the Fund with an agreement to repurchase the securities at an agreed-upon price, date and interest payment. Reverse repurchase agreements involve the risk that the other party may fail to return the securities in a timely manner or at all. The Fund could lose money if it is unable to recover the securities and the value of the collateral held by the Fund, including the value of the investments made with cash collateral, is less than the value of securities. These events could also trigger adverse tax consequences to the Fund.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>U.S. Government Issuer Risk</b> — Treasury obligations may differ in their interest rates, maturities, times of issuance and other characteristics. Obligations of U.S. Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the U.S. Government. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so.</li></ul> The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. 0.0544 0.0363 0.0361 800-882-0052 0.0603 http://www.blackrock.com/funds As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. 0.046 0.0283 <b>As of 12/31/12<br/>Average Annual Total Returns</b> 0.0287 highest return 0.0521 2011-09-30 0.0405 lowest return 2004-06-30 After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Investor A Shares only, and the after-tax returns for Institutional Shares will vary. -0.0217 However, the table includes all applicable fees and sales charges. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Investor A Shares only, and the after-tax returns for Investor B1 and Investor C1 Shares will vary. Risk is inherent in all investing. The value of your investment in the Fund, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part 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 principal risks of investing in the Fund. <ul type="square"><li style="margin-left:-20px"><b>Credit Risk</b> — Credit risk refers to the possibility that the issuer of a security will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Derivatives Risk</b> — The Fund’s use of derivatives may reduce the Fund’s returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. A risk of the Fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately. Derivatives may give rise to a form of leverage and may expose the Fund to greater risk and increase its costs. Recent legislation calls for new regulation of the derivatives markets. The extent and impact of the regulation is not yet known and may not be known for some time. New regulation may make derivatives more costly, may limit the availability of derivatives, or may otherwise adversely affect the value or performance of derivatives.</li></ul><ul type="square"><li style="margin-left:-20px"> <b>Dollar Rolls Risk</b> — Dollar rolls involve the risk that the market value of the securities that the Fund is committed to buy may decline below the price of the securities the Fund has sold. These transactions may involve leverage.</li></ul><ul type="square"><li style="margin-left:-20px"><b> Emerging Markets Risk</b> — Emerging markets are riskier than more developed markets because they tend to develop unevenly and may never fully develop. Investments in emerging markets may be considered speculative. Emerging markets are more likely to experience hyperinflation and currency devaluations, which adversely affect returns to U.S. investors. In addition, many emerging securities markets have far lower trading volumes and less liquidity than developed markets.</li></ul><ul type="square"><li style="margin-left:-20px"><b> Extension Risk</b> — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Foreign Securities Risk</b> — Foreign investments often involve special risks not present in U.S. investments that can increase the chances that the Fund will lose money. These risks include:</li></ul> <div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">The Fund generally holds its foreign securities and cash in foreign banks and securities depositories, which may be recently organized or new to the foreign custody business and may be subject to only limited or no regulatory oversight.</p></td></tr></table></div><br/> <div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">Changes in foreign currency exchange rates can affect the value of the Fund’s portfolio. </p></td></tr></table></div><br/> <div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">The economies of certain foreign markets may not compare favorably with the economy of the United States with respect to such issues as growth of gross national product, reinvestment of capital, resources and balance of payments position.</p></td></tr></table></div><br/> <div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">The governments of certain countries may prohibit or impose substantial restrictions on foreign investments in their capital markets or in certain industries. </p></td></tr></table></div><br/> <div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">Many foreign governments do not supervise and regulate stock exchanges, brokers and the sale of securities to the same extent as does the United States and may not have laws to protect investors that are comparable to U.S. securities laws.</p></td></tr></table></div><br/> <div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">Settlement and clearance procedures in certain foreign markets may result in delays in payment for or delivery of securities not typically associated with settlement and clearance of U.S. investments. </p></td></tr></table></div><ul type="square"><li style="margin-left:-20px"><b>High Portfolio Turnover Risk</b> — The Fund may engage in active and frequent trading of its portfolio securities. High portfolio turnover (more than 100%) may result in increased transaction costs to the Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of Fund portfolio securities may result in the realization and/or distribution to shareholders of higher capital gains or losses as compared to a fund with less active trading policies. These effects of higher than normal portfolio turnover may adversely affect Fund performance. In addition, investment in mortgage dollar rolls and participation in TBA transactions may significantly increase the Fund’s portfolio turnover rate. A TBA transaction is a method of trading mortgage-backed securities where the buyer and seller agree upon general trade parameters such as agency, settlement date, par amount, and price.</li></ul><ul type="square"><li style="margin-left:-20px"><b> Interest Rate Risk</b> — Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall, and decrease as interest rates rise.</li></ul><ul type="square"><li style="margin-left:-20px"> <b>Leverage Risk</b> — Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage.</li></ul><ul type="square"><li style="margin-left:-20px"> <b>Liquidity Risk</b> — Liquidity risk exists when particular investments are difficult to purchase or sell. The Fund’s investments in illiquid securities may reduce the returns of the Fund because it may be difficult to sell the illiquid securities at an advantageous time or price. To the extent that the Fund’s principal investment strategies involve derivatives or securities with substantial market and/or credit risk, the Fund will tend to have the greatest exposure to liquidity risk. Liquid investments may become illiquid after purchase by the Fund, particularly during periods of market turmoil. Illiquid investments may be harder to value, especially in changing markets, and if the Fund is forced to sell these investments to meet redemption requests or for other cash needs, the Fund may suffer a loss. In addition, when there is illiquidity in the market for certain securities, the Fund, due to limitations on illiquid investments, may be subject to purchase and sale restrictions.</li></ul><ul type="square"><li style="margin-left:-20px"><b> Market Risk and Selection Risk</b> — Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Mortgage- and Asset-Backed Securities Risks</b> — Mortgage- and asset-backed securities represent interests in “pools” of mortgages or other assets, including consumer loans or receivables held in trust. Mortgage- and asset-backed securities are subject to credit, interest rate, prepayment and extension risks. These securities also are subject to risk of default on the underlying mortgage or asset, particularly during periods of economic downturn. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities.</li></ul><ul type="square"><li style="margin-left:-20px"><b> Municipal Bonds Risk</b> — Municipal bonds are subject to interest rate, credit and market risk. The ability of an issuer to make payments could be affected by litigation, legislation or other political events or the bankruptcy of the issuer. Lower rated municipal bonds are subject to greater credit and market risk than higher quality municipal bonds. The market prices of residual interest bonds may be highly sensitive to changes in market rates and may decrease significantly when market rates increase.</li></ul><ul type="square"><li style="margin-left:-20px"><b> Non-Investment Grade Securities Risk</b> — Although non-investment grade securities generally pay higher rates of interest than investment grade securities, non-investment grade securities are high risk investments that may cause income and principal losses for the Fund.</li></ul> <ul type="square"><li style="margin-left:-20px"><b> Prepayment Risk</b> — When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields.</li></ul><ul type="square"><li style="margin-left:-20px"><b> Repurchase Agreements, Purchase and Sale Contracts Risks</b> — If the other party to a repurchase agreement or purchase and sale contract defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security in either situation and the market value of the security declines, the Fund may lose money.</li></ul><ul type="square"><li style="margin-left:-20px"><b> Reverse Repurchase Agreements Risk</b> — Reverse repurchase agreements involve the sale of securities held by the Fund with an agreement to repurchase the securities at an agreed-upon price, date and interest payment. Reverse repurchase agreements involve the risk that the other party may fail to return the securities in a timely manner or at all. The Fund could lose money if it is unable to recover the securities and the value of the collateral held by the Fund, including the value of the investments made with cash collateral, is less than the value of securities. These events could also trigger adverse tax consequences to the Fund.</li></ul><ul type="square"><li style="margin-left:-20px"><b> U.S. Government Issuer Risk</b> — Treasury obligations may differ in their interest rates, maturities, times of issuance and other characteristics. Obligations of U.S. Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the U.S. Government. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so.</li></ul> <b>BlackRock Shares </b><br/><b>ANNUAL TOTAL RETURNS </b><br/><b>Long Duration Bond Portfolio </b><br/><b>As of 12/31 </b> <b>As of 12/31/12<br/>Average Annual Total Returns</b> After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleTransposedBLACKROCKGNMAPORTFOLIOServiceShares column period compact * ~</div> February 1, 2014 0.86 Risk is inherent in all investing. The value of your investment in the Fund, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part 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 principal risks of investing in the Fund.<ul type="square"><li style="margin-left:-20px"><b>Credit Risk</b> — Credit risk refers to the possibility that the issuer of a security will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Derivatives Risk</b> — The Fund’s use of derivatives may reduce the Fund’s returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. A risk of the Fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately. Derivatives may give rise to a form of leverage and may expose the Fund to greater risk and increase its costs. Recent legislation calls for new regulation of the derivatives markets. The extent and impact of the regulation is not yet known and may not be known for some time. New regulation may make derivatives more costly, may limit the availability of derivatives, or may otherwise adversely affect the value or performance of derivatives.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Dollar Rolls Risk</b> — Dollar rolls involve the risk that the market value of the securities that the Fund is committed to buy may decline below the price of the securities the Fund has sold. These transactions may involve leverage.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Extension Risk</b> — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Foreign Securities Risk</b> — Foreign investments often involve special risks not present in U.S. investments that can increase the chances that the Fund will lose money. These risks include:</li></ul><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">The Fund generally holds its foreign securities and cash in foreign banks and securities depositories, which may be recently organized or new to the foreign custody business and may be subject to only limited or no regulatory oversight.</p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">Changes in foreign currency exchange rates can affect the value of the Fund’s portfolio.</p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">The economies of certain foreign markets may not compare favorably with the economy of the United States with respect to such issues as growth of gross national product, reinvestment of capital, resources and balance of payments position.</p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">The governments of certain countries may prohibit or impose substantial restrictions on foreign investments in their capital markets or in certain industries.</p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">Many foreign governments do not supervise and regulate stock exchanges, brokers and the sale of securities to the same extent as does the United States and may not have laws to protect investors that are comparable to U.S. securities laws.</p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">Settlement and clearance procedures in certain foreign markets may result in delays in payment for or delivery of securities not typically associated with settlement and clearance of U.S. investments.</p></td></tr></table></div><br/><ul type="square"><li style="margin-left:-20px"><b>High Portfolio Turnover Risk</b> — The Fund may engage in active and frequent trading of its portfolio securities. High portfolio turnover (more than 100%) may result in increased transaction costs to the Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of Fund portfolio securities may result in the realization and/or distribution to shareholders of higher capital gains or losses as compared to a fund with less active trading policies. These effects of higher than normal portfolio turnover may adversely affect Fund performance. In addition, investment in mortgage dollar rolls and participation in TBA transactions may significantly increase the Fund’s portfolio turnover rate. A TBA transaction is a method of trading mortgage-backed securities where the buyer and seller agree upon general trade parameters such as agency, settlement date, par amount, and price.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Interest Rate Risk</b> — Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall, and decrease as interest rates rise.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Leverage Risk</b> — Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Liquidity Risk</b> — Liquidity risk exists when particular investments are difficult to purchase or sell. The Fund’s investments in illiquid securities may reduce the returns of the Fund because it may be difficult to sell the illiquid securities at an advantageous time or price. To the extent that the Fund’s principal investment strategies involve derivatives or securities with substantial market and/or credit risk, the Fund will tend to have the greatest exposure to liquidity risk. Liquid investments may become illiquid after purchase by the Fund, particularly during periods of market turmoil. Illiquid investments may be harder to value, especially in changing markets, and if the Fund is forced to sell these investments to meet redemption requests or for other cash needs, the Fund may suffer a loss. In addition, when there is illiquidity in the market for certain securities, the Fund, due to limitations on illiquid investments, may be subject to purchase and sale restrictions.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Market Risk and Selection Risk</b> — Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Mortgage- and Asset-Backed Securities Risks</b> — Mortgage- and asset-backed securities represent interests in “pools” of mortgages or other assets, including consumer loans or receivables held in trust. Mortgage- and asset-backed securities are subject to credit, interest rate, prepayment and extension risks. These securities also are subject to risk of default on the underlying mortgage or asset, particularly during periods of economic downturn. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Prepayment Risk</b> — When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Repurchase Agreements, Purchase and Sale Contracts Risks</b> — If the other party to a repurchase agreement or purchase and sale contract defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security in either situation and the market value of the security declines, the Fund may lose money.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Reverse Repurchase Agreements Risk</b> — Reverse repurchase agreements involve the sale of securities held by the Fund with an agreement to repurchase the securities at an agreed-upon price, date and interest payment. Reverse repurchase agreements involve the risk that the other party may fail to return the securities in a timely manner or at all. The Fund could lose money if it is unable to recover the securities and the value of the collateral held by the Fund, including the value of the investments made with cash collateral, is less than the value of securities. These events could also trigger adverse tax consequences to the Fund.</li></ul><ul type="square"><li style="margin-left:-20px"><b>U.S. Government Issuer Risk </b> — Treasury obligations may differ in their interest rates, maturities, times of issuance and other characteristics. Obligations of U.S. Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the U.S. Government. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so.</li></ul> You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualTotalReturnsBLACKROCKGNMAPORTFOLIOServiceSharesBarChart column period compact * ~</div> 800-882-0052 http://www.blackrock.com/funds As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBLACKROCKGNMAPORTFOLIOServiceShares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBLACKROCKINFLATIONPROTECTEDBONDPORTFOLIOClassRShares column period compact * ~</div> However, the table includes all applicable fees and sales charges. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Fund’s most recent annual report which does not include the Acquired Fund Fees and Expenses. 0.0777 0.0429 0.1069 0.2213 0.1136 <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleTransposedBLACKROCKINFLATIONPROTECTEDBONDPORTFOLIOClassRShares column period compact * ~</div> Under normal circumstances, the Fund invests at least 80% of its assets in bonds that are issued or guaranteed by the U.S. Government and its agencies. The Fund invests primarily in the highest rated government and agency bonds and maintains an average portfolio duration that is within ±20% of the Barclays U.S. Government/Mortgage Index (the benchmark). <br /><br />Securities purchased by the Fund generally are rated in the highest rating category (AAA or Aaa) at the time of purchase by at least one major rating agency or are determined by the Fund management team to be of similar quality. In addition, the Fund’s dollar-weighted average maturity will be between 3 and 10 years. <br /><br />The Fund evaluates sectors of the bond market and individual securities within these sectors. The Fund selects bonds from several sectors including: U.S. Treasuries and agency securities, commercial and residential mortgage-backed securities, collateralized mortgage obligations (“CMOs”), asset-backed securities and corporate bonds. <br /><br />The Fund invests primarily in dollar-denominated bonds, but may invest up to 10% of its assets in non-dollar denominated bonds of issuers located outside of the United States. The Fund’s investment in non-dollar denominated bonds may be on a currency hedged or unhedged basis. <br /><br />The Fund may buy or sell options or futures on a security or an index of securities, or enter into credit default swaps and interest rate or foreign currency transactions, including swaps (collectively, commonly known as derivatives). The Fund may seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as reverse repurchase agreements or dollar rolls). <br /><br />The Fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies. <b>Investor B1 Shares </b><br /><b>ANNUAL TOTAL RETURNS </b><br /><b>BlackRock U.S. Government Bond Portfolio </b><br /><b>As of 12/31 </b> <b>As of 12/31/12</b><br /><b>Average Annual Total Returns</b> Risk is inherent in all investing. The value of your investment in the Fund, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part 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 principal risks of investing in the Fund. <br /> <ul type="square"><li style="margin-left:-20px"><b>Credit Risk</b> — Credit risk refers to the possibility that the issuer of a security will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Derivatives Risk</b> — The Fund's use of derivatives may reduce the Fund's returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. A risk of the Fund's use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately. Derivatives may give rise to a form of leverage and may expose the Fund to greater risk and increase its costs. Recent legislation calls for new regulation of the derivatives markets. The extent and impact of the regulation is not yet known and may not be known for some time. New regulation may make derivatives more costly, may limit the availability of derivatives, or may otherwise adversely affect the value or performance of derivatives.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Dollar Rolls Risk</b> — Dollar rolls involve the risk that the market value of the securities that the Fund is committed to buy may decline below the price of the securities the Fund has sold. These transactions may involve leverage.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Emerging Markets Risk</b> — Emerging markets are riskier than more developed markets because they tend to develop unevenly and may never fully develop. Investments in emerging markets may be considered speculative. Emerging markets are more likely to experience hyperinflation and currency devaluations, which adversely affect returns to U.S. investors. In addition, many emerging securities markets have far lower trading volumes and less liquidity than developed markets.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Extension Risk</b> — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Foreign Securities Risk</b> — Foreign investments often involve special risks not present in U.S. investments that can increase the chances that the Fund will lose money. These risks include:</li></ul><p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">The Fund generally holds its foreign securities and cash in foreign banks and securities depositories, which may be recently organized or new to the foreign custody business and may be subject to only limited or no regulatory oversight. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">Changes in foreign currency exchange rates can affect the value of the Fund's portfolio. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">The economies of certain foreign markets may not compare favorably with the economy of the United States with respect to such issues as growth of gross national product, reinvestment of capital, resources and balance of payments position. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">The governments of certain countries may prohibit or impose substantial restrictions on foreign investments in their capital markets or in certain industries. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">Many foreign governments do not supervise and regulate stock exchanges, brokers and the sale of securities to the same extent as does the United States and may not have laws to protect investors that are comparable to U.S. securities laws.</td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">Settlement and clearance procedures in certain foreign markets may result in delays in payment for or delivery of securities not typically associated with settlement and clearance of U.S. investments. </td></tr></table><ul type="square"><li style="margin-left:-20px"><b>High Portfolio Turnover Risk</b> — The Fund may engage in active and frequent trading of its portfolio securities. High portfolio turnover (more than 100%) may result in increased transaction costs to the Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of Fund portfolio securities may result in the realization and/or distribution to shareholders of higher capital gains or losses as compared to a fund with less active trading policies. These effects of higher than normal portfolio turnover may adversely affect Fund performance. In addition, investment in mortgage dollar rolls and participation in TBA transactions may significantly increase the Fund's portfolio turnover rate. A TBA transaction is a method of trading mortgage-backed securities where the buyer and seller agree upon general trade parameters such as agency, settlement date, par amount, and price.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Interest Rate Risk</b> — Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall, and decrease as interest rates rise.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Leverage Risk</b> — Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements. Increases and decreases in the value of the Fund's portfolio will be magnified when the Fund uses leverage.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Liquidity Risk</b> — Liquidity risk exists when particular investments are difficult to purchase or sell. The Fund's investments in illiquid securities may reduce the returns of the Fund because it may be difficult to sell the illiquid securities at an advantageous time or price. To the extent that the Fund's principal investment strategies involve derivatives or securities with substantial market and/or credit risk, the Fund will tend to have the greatest exposure to liquidity risk. Liquid investments may become illiquid after purchase by the Fund, particularly during periods of market turmoil. Illiquid investments may be harder to value, especially in changing markets, and if the Fund is forced to sell these investments to meet redemption requests or for other cash needs, the Fund may suffer a loss. In addition, when there is illiquidity in the market for certain securities, the Fund, due to limitations on illiquid investments, may be subject to purchase and sale restrictions.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Market Risk and Selection Risk</b> — Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Mortgage- and Asset-Backed Securities Risks</b> — Mortgage- and asset-backed securities represent interests in "pools" of mortgages or other assets, including consumer loans or receivables held in trust. Mortgage- and asset-backed securities are subject to credit, interest rate, prepayment and extension risks. These securities also are subject to risk of default on the underlying mortgage or asset, particularly during periods of economic downturn. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Municipal Bonds Risk</b> — Municipal bonds are subject to interest rate, credit and market risk. The ability of an issuer to make payments could be affected by litigation, legislation or other political events or the bankruptcy of the issuer. Lower rated municipal bonds are subject to greater credit and market risk than higher quality municipal bonds. The market prices of residual interest bonds may be highly sensitive to changes in market rates and may decrease significantly when market rates increase.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Non-Investment Grade Securities Risk</b> — Although non-investment grade securities generally pay higher rates of interest than investment grade securities, non-investment grade securities are high risk investments that may cause income and principal losses for the Fund.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Prepayment Risk</b> — When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Repurchase Agreements, Purchase and Sale Contracts Risks</b> — If the other party to a repurchase agreement or purchase and sale contract defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security in either situation and the market value of the security declines, the Fund may lose money.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Reverse Repurchase Agreements Risk</b> — Reverse repurchase agreements involve the sale of securities held by the Fund with an agreement to repurchase the securities at an agreed-upon price, date and interest payment. Reverse repurchase agreements involve the risk that the other party may fail to return the securities in a timely manner or at all. The Fund could lose money if it is unable to recover the securities and the value of the collateral held by the Fund, including the value of the investments made with cash collateral, is less than the value of securities. These events could also trigger adverse tax consequences to the Fund.</li></ul><ul type="square"><li style="margin-left:-20px"><b>U.S. Government Issuer Risk</b> — Treasury obligations may differ in their interest rates, maturities, times of issuance and other characteristics. Obligations of U.S. Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the U.S. Government. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so.</li></ul> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualTotalReturnsBLACKROCKINFLATIONPROTECTEDBONDPORTFOLIOClassRSharesBarChart column period compact * ~</div> February 1, 2014 0.86 <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBLACKROCKINFLATIONPROTECTEDBONDPORTFOLIOClassRShares column period compact * ~</div> 123 384 665 <b> Portfolio Turnover: </b> 1466 0.0036 You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. 0.005 The information shows you how the Fund's performance has varied year by year and provides some indication of the risks of investing in the Fund. 800-882-0052 http://www.blackrock.com/funds 0.0034 As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. 0.0001 Actual after-tax returns depend on the investor's tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. 0.0121 0.0121 After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. However, the table includes all applicable fees and sales charges. highest return 2008-12-31 0.1493 lowest return 2009-03-31 -0.0642 highest return 2008-03-31 0.058 lowest return 2008-09-30 -0.0376 0.0054 0.005 0.0002 0.0131 Risk is inherent in all investing. The value of your investment in the Fund, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part 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 principal risks of investing in the Fund.<ul type="square"><li style="margin-left:-20px"><b>Credit Risk </b>— Credit risk refers to the possibility that the issuer of a security will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Deflation Risk</b> — Deflation risk is the possibility that prices throughout the economy decline over time — the opposite of inflation. If inflation is negative, the principal and income of an inflation-protected bond will decline and could result in losses for the Fund.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Derivatives Risk </b>— The Fund’s use of derivatives may reduce the Fund’s returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. A risk of the Fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately. Derivatives may give rise to a form of leverage and may expose the Fund to greater risk and increase its costs. Recent legislation calls for new regulation of the derivatives markets. The extent and impact of the regulation is not yet known and may not be known for some time. New regulation may make derivatives more costly, may limit the availability of derivatives, or may otherwise adversely affect the value or performance of derivatives.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Dollar Rolls Risk</b> — Dollar rolls involve the risk that the market value of the securities that the Fund is committed to buy may decline below the price of the securities the Fund has sold. These transactions may involve leverage.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Emerging Markets Risk </b>— Emerging markets are riskier than more developed markets because they tend to develop unevenly and may never fully develop. Investments in emerging markets may be considered speculative. Emerging markets are more likely to experience hyperinflation and currency devaluations, which adversely affect returns to U.S. investors. In addition, many emerging securities markets have far lower trading volumes and less liquidity than developed markets.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Extension Risk</b> — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Foreign Securities Risk</b> — Foreign investments often involve special risks not present in U.S. investments that can increase the chances that the Fund will lose money. These risks include:</li></ul><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">The Fund generally holds its foreign securities and cash in foreign banks and securities depositories, which may be recently organized or new to the foreign custody business and may be subject to only limited or no regulatory oversight.</p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">Changes in foreign currency exchange rates can affect the value of the Fund’s portfolio.</p></td></tr></table></div><br/> <div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">The economies of certain foreign markets may not compare favorably with the economy of the United States with respect to such issues as growth of gross national product, reinvestment of capital, resources and balance of payments position.</p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">The governments of certain countries may prohibit or impose substantial restrictions on foreign investments in their capital markets or in certain industries. </p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">Many foreign governments do not supervise and regulate stock exchanges, brokers and the sale of securities to the same extent as does the United States and may not have laws to protect investors that are comparable to U.S. securities laws. </p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="3%"><font class="_mt" size="1"> </font></td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left"><p style="margin-top: 0px; margin-bottom: 0px;">Settlement and clearance procedures in certain foreign markets may result in delays in payment for or delivery of securities not typically associated with settlement and clearance of U.S. investments.</p></td></tr></table></div><ul type="square"><li style="margin-left:-20px"> <b>High Portfolio Turnover Risk</b> — The Fund may engage in active and frequent trading of its portfolio securities. High portfolio turnover (more than 100%) may result in increased transaction costs to the Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of Fund portfolio securities may result in the realization and/or distribution to shareholders of higher capital gains or losses as compared to a fund with less active trading policies. These effects of higher than normal portfolio turnover may adversely affect Fund performance. In addition, investment in mortgage dollar rolls and participation in TBA transactions may significantly increase the Fund’s portfolio turnover rate. A TBA transaction is a method of trading mortgage-backed securities where the buyer and seller agree upon general trade parameters such as agency, settlement date, par amount, and price.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Inflation Indexed Bonds </b>— The principal value of an investment is not protected or otherwise guaranteed by virtue of the Fund’s investments in inflation-indexed bonds.</li></ul> <p style="margin-top: -20px; margin-bottom: 0px; margin-left: 1%;">Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted according to the rate of inflation. If the index measuring inflation falls, the principal value of inflation-indexed bonds will be adjusted downward, and consequently the interest payable on these securities (calculated with respect to a smaller principal amount) will be reduced.</p> <p style="margin-top: 0px; margin-bottom: -8px;"> </p> <p style="margin-top: 0px; margin-bottom: 0px; margin-left: 1%;">Repayment of the original bond principal upon maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds. For bonds that do not provide a similar guarantee, the adjusted principal value of the bond repaid at maturity may be less than the original principal value.</p> <p style="margin-top: 0px; margin-bottom: -8px;"> </p> <p style="margin-top: 0px; margin-bottom: 0px; margin-left: 1%;">The value of inflation-indexed bonds is expected to change in response to changes in real interest rates. Real interest rates are tied to the relationship between nominal interest rates and the rate of inflation. If nominal interest rates increase at a faster rate than inflation, real interest rates may rise, leading to a decrease in value of inflation-indexed bonds. Short-term increases in inflation may lead to a decline in value. Any increase in the principal amount of an inflation-indexed bond will be considered taxable ordinary income, even though investors do not receive their principal until maturity. </p><p style="margin-top: 0px; margin-bottom: -8px;"> </p> <p style="margin-top: 0px; margin-bottom: 0px; margin-left: 1%;">Periodic adjustments for inflation to the principal amount of an inflation-indexed bond may give rise to original issue discount, which will be includable in the Fund’s gross income. Due to original issue discount, the Fund may be required to make annual distributions to shareholders that exceed the cash received, which may cause the Fund to liquidate certain investments when it is not advantageous to do so. Also, if the principal value of an inflation-indexed bond is adjusted downward due to deflation, amounts previously distributed in the taxable year may be characterized in some circumstances as a return of capital. </p><ul type="square"><li style="margin-left:-20px"><b>Interest Rate Risk</b> — Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall, and decrease as interest rates rise.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Leverage Risk</b> — Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Liquidity Risk </b>— Liquidity risk exists when particular investments are difficult to purchase or sell. The Fund’s investments in illiquid securities may reduce the returns of the Fund because it may be difficult to sell the illiquid securities at an advantageous time or price. To the extent that the Fund’s principal investment strategies involve derivatives or securities with substantial market and/or credit risk, the Fund will tend to have the greatest exposure to liquidity risk. Liquid investments may become illiquid after purchase by the Fund, particularly during periods of market turmoil. Illiquid investments may be harder to value, especially in changing markets, and if the Fund is forced to sell these investments to meet redemption requests or for other cash needs, the Fund may suffer a loss. In addition, when there is illiquidity in the market for certain securities, the Fund, due to limitations on illiquid investments, may be subject to purchase and sale restrictions.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Market Risk and Selection Risk</b> — Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Mortgage- and Asset-Backed Securities Risks </b>— Mortgage- and asset-backed securities represent interests in “pools” of mortgages or other assets, including consumer loans or receivables held in trust. Mortgage- and asset-backed securities are subject to credit, interest rate, prepayment and extension risks. These securities also are subject to risk of default on the underlying mortgage or asset, particularly during periods of economic downturn. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Non-Diversification Risk</b> — The Fund is a non-diversified fund. Because the Fund may invest in securities of a smaller number of issuers, it may be more exposed to the risks associated with and developments affecting an individual issuer than a fund that invests more widely.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Non-Investment Grade Securities Risk </b>— Although non-investment grade securities generally pay higher rates of interest than investment grade securities, non-investment grade securities are high risk investments that may cause income and principal losses for the Fund.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Prepayment Risk </b>— When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Repurchase Agreements, Purchase and Sale Contracts Risks </b> — If the other party to a repurchase agreement or purchase and sale contract defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security in either situation and the market value of the security declines, the Fund may lose money.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Reverse Repurchase Agreements Risk </b>— Reverse repurchase agreements involve the sale of securities held by the Fund with an agreement to repurchase the securities at an agreed-upon price, date and interest payment. Reverse repurchase agreements involve the risk that the other party may fail to return the securities in a timely manner or at all. The Fund could lose money if it is unable to recover the securities and the value of the collateral held by the Fund, including the value of the investments made with cash collateral, is less than the value of securities. These events could also trigger adverse tax consequences to the Fund.</li></ul><ul type="square"><li style="margin-left:-20px"><b>U.S. Government Issuer Risk</b> — Treasury obligations may differ in their interest rates, maturities, times of issuance and other characteristics. Obligations of U.S. Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the U.S. Government. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Non-Diversification Risk</b> — The Fund is a non-diversified fund. Because the Fund may invest in securities of a smaller number of issuers, it may be more exposed to the risks associated with and developments affecting an individual issuer than a fund that invests more widely.</li></ul> highest return 2008-03-31 0.0586 lowest return 2008-09-30 -0.0372 <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBLACKROCKU.S.GOVERNMENTBONDPORTFOLIOBlackRockShares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleTransposedBLACKROCKU.S.GOVERNMENTBONDPORTFOLIOBlackRockShares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualTotalReturnsBLACKROCKU.S.GOVERNMENTBONDPORTFOLIOBlackRockSharesBarChart column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBLACKROCKU.S.GOVERNMENTBONDPORTFOLIOBlackRockShares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBLACKROCKLONGDURATIONBONDPORTFOLIOBlackRockShares column period compact * ~</div> <b>Annual Fund Operating Expenses<br/>(expenses that you pay each year as a percentage of the value of your investment)</b> <div style="display:none">~ http://www.blackrock.com/role/ScheduleShareholderFeesBLACKROCKU.S.GOVERNMENTBONDPORTFOLIOInvestorB1andC1Shares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBLACKROCKGNMAPORTFOLIOClassRShares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBLACKROCKU.S.GOVERNMENTBONDPORTFOLIOInvestorB1andC1Shares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleTransposedBLACKROCKU.S.GOVERNMENTBONDPORTFOLIOInvestorB1andC1Shares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleNoRedemptionTransposedBLACKROCKU.S.GOVERNMENTBONDPORTFOLIOInvestorB1andC1Shares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualTotalReturnsBLACKROCKU.S.GOVERNMENTBONDPORTFOLIOInvestorB1andC1SharesBarChart column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBLACKROCKU.S.GOVERNMENTBONDPORTFOLIOInvestorB1andC1Shares column period compact * ~</div> Fund Overview<br /><br /><b>Key Facts about BlackRock U.S. Government Bond Portfolio </b> <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleTransposedBLACKROCKLONGDURATIONBONDPORTFOLIOBlackRockShares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualTotalReturnsBLACKROCKLONGDURATIONBONDPORTFOLIOBlackRockSharesBarChart column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBLACKROCKLONGDURATIONBONDPORTFOLIOBlackRockShares column period compact * ~</div> highest return 2008-12-31 0.1502 lowest return 2009-03-31 -0.0636 <b>Portfolio Turnover: </b> The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 741% of the average value of its portfolio. <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualTotalReturnsBLACKROCKGNMAPORTFOLIOBlackRockSharesBarChart column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBLACKROCKGNMAPORTFOLIOBlackRockShares column period compact * ~</div> The investment objective of the BlackRock GNMA Portfolio (the “GNMA Portfolio” or the “Fund”) is to seek to maximize total return, consistent with income generation and prudent investment management. <b>Investor A Shares </b><br/><b>ANNUAL TOTAL RETURNS </b><br/><b>Long Duration Bond Portfolio </b><br/><b>As of 12/31 </b> During the period shown in the bar chart, the highest return for a quarter was 14.93% (quarter ended December 31, 2008) and the lowest return for a quarter was –6.42% (quarter ended March 31, 2009). 0.0054 <b>Annual Fund Operating Expenses</b><br/><b>(expenses that you pay each year as a percentage of the value of your investment)</b> 0.002 The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 120% of the average value of its portfolio. 0.0002 <b>Principal Investment Strategies of the Fund </b> 0.0018 0.0074 Under normal circumstances, the Fund invests at least 80% of its assets in inflation-indexed bonds of varying maturities issued by the U.S. and non-U.S. governments, their agencies or instrumentalities, and U.S. and non-U.S. corporations.<br/><br/>The Fund maintains an average portfolio duration that is within ±20% of the duration of the Barclays Global Real: U.S. TIPS Index (the benchmark).<br/><br/>The Fund may invest up to 20% of it assets in non-investment grade bonds (high yield or junk bonds) or securities of emerging market issuers. The Fund may also invest up to 20% of its assets in non-dollar denominated securities of non-U.S. issuers, and may invest without limit in U.S. dollar denominated securities of non-U.S. issuers.<br/><br/>The Fund is non-diversified under the Investment Company Act of 1940, as amended, which means that it may concentrate its assets in a smaller number of issuers than a diversified fund. <br/><br/>The Fund also makes investments in residential and commercial mortgage-backed securities and other asset-backed securities.<br/><br/>Non-investment grade bonds acquired by the Fund will generally be in the lower rating categories of the major rating agencies (BB or lower by Standard & Poor’s (“S&P”) or Ba or lower by Moody’s Investors Service, Inc. (“Moody’s”)) or will be determined by the management team to be of similar quality. Split rated bonds will be considered to have the higher credit rating. Split rated bonds are bonds that receive different ratings from two or more rating agencies.<br/><br/>The Fund may buy or sell options or futures, or enter into credit default swaps and interest rate or foreign currency transactions, including swaps (collectively, commonly known as derivatives). The Fund may seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as reverse repurchase agreements or dollar rolls).<br/><br/>The Fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies. -0.002 <b>Performance Information</b> 0.0054 <b>BlackRock Shares </b><br/><b>ANNUAL TOTAL RETURNS </b><br/><b>Inflation Protected Bond Portfolio </b><br/><b>As of 12/31 </b> During the period shown in the bar chart, the highest return for a quarter was 5.87% (quarter ended March 31, 2008) and the lowest return for a quarter was –3.53% (quarter ended September 30, 2008). <b>As of 12/31/12<br/>Average Annual Total Returns</b> Risk is inherent in all investing. The value of your investment in the Fund, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part 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 principal risks of investing in the Fund.<ul type="square"><li style="margin-left:-20px"><b>Credit Risk</b> — Credit risk refers to the possibility that the issuer of a security will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Deflation Risk</b> — Deflation risk is the possibility that prices throughout the economy decline over time — the opposite of inflation. If inflation is negative, the principal and income of an inflation-protected bond will decline and could result in losses for the Fund.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Derivatives Risk </b>— The Fund’s use of derivatives may reduce the Fund’s returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. A risk of the Fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately. Derivatives may give rise to a form of leverage and may expose the Fund to greater risk and increase its costs. Recent legislation calls for new regulation of the derivatives markets. The extent and impact of the regulation is not yet known and may not be known for some time. New regulation may make derivatives more costly, may limit the availability of derivatives, or may otherwise adversely affect the value or performance of derivatives.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Dollar Rolls Risk </b>— Dollar rolls involve the risk that the market value of the securities that the Fund is committed to buy may decline below the price of the securities the Fund has sold. These transactions may involve leverage.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Emerging Markets Risk </b>— Emerging markets are riskier than more developed markets because they tend to develop unevenly and may never fully develop. Investments in emerging markets may be considered speculative. Emerging markets are more likely to experience hyperinflation and currency devaluations, which adversely affect returns to U.S. investors. In addition, many emerging securities markets have far lower trading volumes and less liquidity than developed markets. </li></ul> <ul type="square"><li style="margin-left:-20px"><b>Extension Risk</b> — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Foreign Securities Risk</b> — Foreign investments often involve special risks not present in U.S. investments that can increase the chances that the Fund will lose money. These risks include:</li></ul><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="2%"> </td> <td valign="top" width="3.5%" align="left">—</td> <td valign="top" align="left"> <p style="margin-top: 0px; margin-bottom: 0px;">The Fund generally holds its foreign securities and cash in foreign banks and securities depositories, which may be recently organized or new to the foreign custody business and may be subject to only limited or no regulatory oversight. </p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="2%"> </td> <td valign="top" width="3.5%" align="left">—</td> <td valign="top" align="left"> <p style="margin-top: 0px; margin-bottom: 0px;">Changes in foreign currency exchange rates can affect the value of the Fund’s portfolio. </p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="2%"> </td> <td valign="top" width="3.5%" align="left">—</td> <td valign="top" align="left"> <p style="margin-top: 0px; margin-bottom: 0px;">The economies of certain foreign markets may not compare favorably with the economy of the United States with respect to such issues as growth of gross national product, reinvestment of capital, resources and balance of payments position. </p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="2%"> </td> <td valign="top" width="3.5%" align="left">—</td> <td valign="top" align="left"> <p style="margin-top: 0px; margin-bottom: 0px;">The governments of certain countries may prohibit or impose substantial restrictions on foreign investments in their capital markets or in certain industries.</p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="2%"> </td> <td valign="top" width="3.5%" align="left">—</td> <td valign="top" align="left"> <p style="margin-top: 0px; margin-bottom: 0px;">Many foreign governments do not supervise and regulate stock exchanges, brokers and the sale of securities to the same extent as does the United States and may not have laws to protect investors that are comparable to U.S. securities laws. </p></td></tr></table></div><br/><div><table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td width="2%"> </td> <td valign="top" width="3.5%" align="left">—</td> <td valign="top" align="left"> <p style="margin-top: 0px; margin-bottom: 0px;">Settlement and clearance procedures in certain foreign markets may result in delays in payment for or delivery of securities not typically associated with settlement and clearance of U.S. investments. </p></td></tr></table></div><ul type="square"><li style="margin-left:-20px"><b>High Portfolio Turnover Risk </b>— The Fund may engage in active and frequent trading of its portfolio securities. High portfolio turnover (more than 100%) may result in increased transaction costs to the Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of Fund portfolio securities may result in the realization and/or distribution to shareholders of higher capital gains or losses as compared to a fund with less active trading policies. These effects of higher than normal portfolio turnover may adversely affect Fund performance. In addition, investment in mortgage dollar rolls and participation in TBA transactions may significantly increase the Fund’s portfolio turnover rate. A TBA transaction is a method of trading mortgage-backed securities where the buyer and seller agree upon general trade parameters such as agency, settlement date, par amount, and price.</li></ul> <ul type="square"><li style="margin-left:-20px"> <b>Inflation Indexed Bonds </b>— The principal value of an investment is not protected or otherwise guaranteed by virtue of the Fund’s investments in inflation-indexed bonds.<br/><br/>Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted according to the rate of inflation. If the index measuring inflation falls, the principal value of inflation-indexed bonds will be adjusted downward, and consequently the interest payable on these securities (calculated with respect to a smaller principal amount) will be reduced.<br/><br/>Repayment of the original bond principal upon maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds. For bonds that do not provide a similar guarantee, the adjusted principal value of the bond repaid at maturity may be less than the original principal value.<br/><br/>The value of inflation-indexed bonds is expected to change in response to changes in real interest rates. Real interest rates are tied to the relationship between nominal interest rates and the rate of inflation. If nominal interest rates increase at a faster rate than inflation, real interest rates may rise, leading to a decrease in value of inflation-indexed bonds. Short-term increases in inflation may lead to a decline in value. Any increase in the principal amount of an inflation-indexed bond will be considered taxable ordinary income, even though investors do not receive their principal until maturity. <br/><br/>Periodic adjustments for inflation to the principal amount of an inflation-indexed bond may give rise to original issue discount, which will be includable in the Fund’s gross income. Due to original issue discount, the Fund may be required to make annual distributions to shareholders that exceed the cash received, which may cause the Fund to liquidate certain investments when it is not advantageous to do so. Also, if the principal value of an inflation-indexed bond is adjusted downward due to deflation, amounts previously distributed in the taxable year may be characterized in some circumstances as a return of capital. </li></ul><ul type="square"><li style="margin-left:-20px"><b>Interest Rate Risk</b> — Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall, and decrease as interest rates rise.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Leverage Risk </b>— Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage. </li></ul> <ul type="square"><li style="margin-left:-20px"> <b>Liquidity Risk </b>— Liquidity risk exists when particular investments are difficult to purchase or sell. The Fund’s investments in illiquid securities may reduce the returns of the Fund because it may be difficult to sell the illiquid securities at an advantageous time or price. To the extent that the Fund’s principal investment strategies involve derivatives or securities with substantial market and/or credit risk, the Fund will tend to have the greatest exposure to liquidity risk. Liquid investments may become illiquid after purchase by the Fund, particularly during periods of market turmoil. Illiquid investments may be harder to value, especially in changing markets, and if the Fund is forced to sell these investments to meet redemption requests or for other cash needs, the Fund may suffer a loss. In addition, when there is illiquidity in the market for certain securities, the Fund, due to limitations on illiquid investments, may be subject to purchase and sale restrictions.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Market Risk and Selection Risk </b>— Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money.</li></ul> <ul type="square"><li style="margin-left:-20px"> <b>Mortgage- and Asset-Backed Securities Risks </b>— Mortgage- and asset-backed securities represent interests in “pools” of mortgages or other assets, including consumer loans or receivables held in trust. Mortgage- and asset-backed securities are subject to credit, interest rate, prepayment and extension risks. These securities also are subject to risk of default on the underlying mortgage or asset, particularly during periods of economic downturn. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Non-Diversification Risk </b>— The Fund is a non-diversified fund. Because the Fund may invest in securities of a smaller number of issuers, it may be more exposed to the risks associated with and developments affecting an individual issuer than a fund that invests more widely.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Non-Investment Grade Securities Risk</b> — Although non-investment grade securities generally pay higher rates of interest than investment grade securities, non-investment grade securities are high risk investments that may cause income and principal losses for the Fund.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Prepayment Risk </b>— When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Repurchase Agreements, Purchase and Sale Contracts Risks</b> — If the other party to a repurchase agreement or purchase and sale contract defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security in either situation and the market value of the security declines, the Fund may lose money.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Reverse Repurchase Agreements Risk </b>— Reverse repurchase agreements involve the sale of securities held by the Fund with an agreement to repurchase the securities at an agreed-upon price, date and interest payment. Reverse repurchase agreements involve the risk that the other party may fail to return the securities in a timely manner or at all. The Fund could lose money if it is unable to recover the securities and the value of the collateral held by the Fund, including the value of the investments made with cash collateral, is less than the value of securities. These events could also trigger adverse tax consequences to the Fund.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>U.S. Government Issuer Risk</b> — Treasury obligations may differ in their interest rates, maturities, times of issuance and other characteristics. Obligations of U.S. Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the U.S. Government. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so.</li></ul> Actual after-tax returns depend on the investor's tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. However, the table includes all applicable fees and sales charges. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. As with all such investments, past performance (before and after taxes) is not an indication of future results. http://www.blackrock.com/funds 800-882-0052 The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. <ul type="square"><li style="margin-left:-20px"><b>Non-Diversification Risk </b>— The Fund is a non-diversified fund. Because the Fund may invest in securities of a smaller number of issuers, it may be more exposed to the risks associated with and developments affecting an individual issuer than a fund that invests more widely.</li></ul> You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Fund’s most recent annual report which does not include the Acquired Fund Fees and Expenses. 1.2 February 1, 2014 You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $25,000 in the BlackRock-advised fund complex. 25000 A contingent deferred sales charge (“CDSC”) of 0.50% is assessed on certain redemptions of Investor A Shares made within 18 months after purchase where no initial sales charge was paid at time of purchase as part of an investment of $1,000,000 or more. The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Fund’s most recent annual report which does not include the Acquired Fund Fees and Expenses. After-tax returns are shown for Investor A Shares only, and the after-tax returns for Institutional Shares will vary. 0.0708 0.0604 0.0486 0.0698 0.0724 0.0577 0.0538 0.0704 0.0717 0.054 0.0513 0.0676 2004-06-28 <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBLACKROCKINFLATIONPROTECTEDBONDPORTFOLIOBlackRockShares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleTransposedBLACKROCKINFLATIONPROTECTEDBONDPORTFOLIOBlackRockShares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualTotalReturnsBLACKROCKINFLATIONPROTECTEDBONDPORTFOLIOBlackRockSharesBarChart column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBLACKROCKINFLATIONPROTECTEDBONDPORTFOLIOBlackRockShares column period compact * ~</div> highest return lowest return 2008-03-31 0.0587 2008-09-30 -0.0353 Fund Overview<br/><br/><b>Key Facts about BlackRock Inflation Protected Bond Portfolio </b> The investment objective of the BlackRock Inflation Protected Bond Portfolio (the “Inflation Protected Bond Portfolio” or the “Fund”) is to seek to maximize real return, consistent with preservation of real capital and prudent investment management. This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: <b>Portfolio Turnover: </b> After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. <b>Investment Objective </b> The investment objective of the BlackRock Inflation Protected Bond Portfolio (the “Inflation Protected Bond Portfolio” or the “Fund”) is to seek to maximize real return, consistent with preservation of real capital and prudent investment management. <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBLACKROCKINFLATIONPROTECTEDBONDPORTFOLIOServiceShares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleTransposedBLACKROCKINFLATIONPROTECTEDBONDPORTFOLIOServiceShares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualTotalReturnsBLACKROCKINFLATIONPROTECTEDBONDPORTFOLIOServiceSharesBarChart column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBLACKROCKINFLATIONPROTECTEDBONDPORTFOLIOServiceShares column period compact * ~</div> 0.005 0.005 0.0032 0.0001 0.0133 0.0133 135 421 729 1601 0.074 0.0396 0.102 0.216 0.1081 0.0641 0.0316 0.0878 0.0497 0.0974 0.0727 0.0706 0.1016 <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBLACKROCKLONGDURATIONBONDPORTFOLIOClassRShares column period compact * ~</div> 0.0961 0.0716 0.0696 0.101 2007-10-19 <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleTransposedBLACKROCKLONGDURATIONBONDPORTFOLIOClassRShares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualTotalReturnsBLACKROCKLONGDURATIONBONDPORTFOLIOClassRSharesBarChart column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBLACKROCKLONGDURATIONBONDPORTFOLIOClassRShares column period compact * ~</div> Fund Overview<br/><br/><b>Key Facts about BlackRock Long Duration Bond Portfolio </b> <b>Investment Objective </b> The investment objective of the BlackRock Long Duration Bond Portfolio (the “Long Duration Bond Portfolio” or the “Fund”) is to seek to maximize total return, consistent with income generation and prudent investment management. <b>Fees and Expenses of the Fund </b> This table describes the fees and expenses that you may pay if you buy and hold Class R Shares of the Fund. <b>Annual Fund Operating Expenses<br/>(expenses that you pay each year as a percentage of the value of your investment)</b> <b>Portfolio Turnover: </b> The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 86% of the average value of its portfolio. <b>Example: </b> This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: <b>Principal Investment Strategies of the Fund </b> Under normal circumstances, the Fund invests at least 80% of its assets in bonds and maintains an average portfolio duration that is within ±20% of the duration of the Barclays Long Government/Credit Index (the benchmark).<br/><br/>Fund management evaluates sectors of the U.S. and non-U.S. bond market and individual securities within these sectors. The Fund selects bonds from several sectors including: U.S. Treasuries and agency securities, commercial and residential mortgage-backed securities, collateralized mortgage obligations (“CMOs”), pass-throughs, asset-backed securities, corporate bonds and taxable and tax-exempt municipal bonds. The Fund may also invest in preferred stock.<br/><br/>The Fund invests primarily in dollar-denominated investment grade bonds, but may invest up to 20% of its assets in any combination of non-investment grade bonds (high yield or junk bonds), non-dollar denominated bonds and bonds of emerging market issuers. The Fund’s investment in non-dollar denominated bonds may be on a currency hedged or unhedged basis. Non-investment grade bonds acquired by the Fund will generally be in the lower rating categories of the major rating agencies (BB or lower by Standard & Poor’s (“S&P”) or Ba or lower by Moody’s Investors Service, Inc. (“Moody’s”)) or will be determined by the management team to be of similar quality. The Fund may invest in securities rated in the category C and above or determined by the management team to be of comparable quality. Split rated bonds will be considered to have the higher credit rating. Split rated bonds are bonds that receive different ratings from two or more rating agencies.<br/><br/>The Fund may buy or sell options or futures on a security or an index of securities, or enter into credit default swaps and interest rate or foreign currency transactions, including swaps (collectively, commonly known as derivatives). The Fund may seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as reverse repurchase agreements or dollar rolls).<br/><br/>The Fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies. <b>Principal Risks of Investing in the Fund </b> Risk is inherent in all investing. The value of your investment in the Fund, as well as the amount of return you receive on your investment, may fluctuate significantly from day to day and over time. You may lose part 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 principal risks of investing in the Fund. <ul type="square"><li style="margin-left:-20px"> <b>Credit Risk</b> — Credit risk refers to the possibility that the issuer of a security will not be able to make payments of interest and principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer. </li></ul> <ul type="square"><li style="margin-left:-20px"> <b>Derivatives Risk</b> — The Fund’s use of derivatives may reduce the Fund’s returns and/or increase volatility. Volatility is defined as the characteristic of a security, an index or a market to fluctuate significantly in price within a short time period. Derivatives are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. A risk of the Fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. The possible lack of a liquid secondary market for derivatives and the resulting inability of the Fund to sell or otherwise close a derivatives position could expose the Fund to losses and could make derivatives more difficult for the Fund to value accurately. Derivatives may give rise to a form of leverage and may expose the Fund to greater risk and increase its costs. Recent legislation calls for new regulation of the derivatives markets. The extent and impact of the regulation is not yet known and may not be known for some time. New regulation may make derivatives more costly, may limit the availability of derivatives, or may otherwise adversely affect the value or performance of derivatives. </li></ul> <ul type="square"><li style="margin-left:-20px"> <b>Dollar Rolls Risk</b> — Dollar rolls involve the risk that the market value of the securities that the Fund is committed to buy may decline below the price of the securities the Fund has sold. These transactions may involve leverage. </li></ul> <ul type="square"><li style="margin-left:-20px"> <b>Emerging Markets Risk</b> — Emerging markets are riskier than more developed markets because they tend to develop unevenly and may never fully develop. Investments in emerging markets may be considered speculative. Emerging markets are more likely to experience hyperinflation and currency devaluations, which adversely affect returns to U.S. investors. In addition, many emerging securities markets have far lower trading volumes and less liquidity than developed markets. </li></ul> <ul type="square"><li style="margin-left:-20px"> <b>Extension Risk</b> — When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these securities to fall. </li></ul><ul type="square"><li style="margin-left:-20px"><b>Foreign Securities Risk — </b>Foreign investments often involve special risks not present in U.S. investments that can increase the chances that the Fund will lose money. These risks include:</li></ul><p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">The Fund generally holds its foreign securities and cash in foreign banks and securities depositories, which may be recently organized or new to the foreign custody business and may be subject to only limited or no regulatory oversight. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">Changes in foreign currency exchange rates can affect the value of the Fund's portfolio. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">The economies of certain foreign markets may not compare favorably with the economy of the United States with respect to such issues as growth of gross national product, reinvestment of capital, resources and balance of payments position. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">The governments of certain countries may prohibit or impose substantial restrictions on foreign investments in their capital markets or in certain industries. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">Many foreign governments do not supervise and regulate stock exchanges, brokers and the sale of securities to the same extent as does the United States and may not have laws to protect investors that are comparable to U.S. securities laws. </td></tr></table> <p style="margin-top: 0px; margin-bottom: -6px"> </p> <table style="border-collapse: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="2%"> </td> <td valign="top" width="3%" align="left">—</td> <td valign="top" align="left">Settlement and clearance procedures in certain foreign markets may result in delays in payment for or delivery of securities not typically associated with settlement and clearance of U.S. investments. </td></tr></table><ul type="square"><li style="margin-left:-20px"><b>High Portfolio Turnover Risk</b> — The Fund may engage in active and frequent trading of its portfolio securities. High portfolio turnover (more than 100%) may result in increased transaction costs to the Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale of the securities and on reinvestment in other securities. The sale of Fund portfolio securities may result in the realization and/or distribution to shareholders of higher capital gains or losses as compared to a fund with less active trading policies. These effects of higher than normal portfolio turnover may adversely affect Fund performance. In addition, investment in mortgage dollar rolls and participation in TBA transactions may significantly increase the Fund’s portfolio turnover rate. A TBA transaction is a method of trading mortgage-backed securities where the buyer and seller agree upon general trade parameters such as agency, settlement date, par amount, and price. </li></ul> <ul type="square"><li style="margin-left:-20px"><b>Interest Rate Risk</b> — Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall, and decrease as interest rates rise. </li></ul><ul type="square"><li style="margin-left:-20px"><b>Leverage Risk</b> — Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage. </li></ul> <ul type="square"><li style="margin-left:-20px"><b>Liquidity Risk</b> — Liquidity risk exists when particular investments are difficult to purchase or sell. The Fund’s investments in illiquid securities may reduce the returns of the Fund because it may be difficult to sell the illiquid securities at an advantageous time or price. To the extent that the Fund’s principal investment strategies involve derivatives or securities with substantial market and/or credit risk, the Fund will tend to have the greatest exposure to liquidity risk. Liquid investments may become illiquid after purchase by the Fund, particularly during periods of market turmoil. Illiquid investments may be harder to value, especially in changing markets, and if the Fund is forced to sell these investments to meet redemption requests or for other cash needs, the Fund may suffer a loss. In addition, when there is illiquidity in the market for certain securities, the Fund, due to limitations on illiquid investments, may be subject to purchase and sale restrictions. </li></ul> <ul type="square"><li style="margin-left:-20px"><b>Market Risk and Selection Risk </b>— Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities selected by Fund management will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. This means you may lose money. </li></ul> <ul type="square"><li style="margin-left:-20px"><b>Mortgage- and Asset-Backed Securities Risks</b> — Mortgage- and asset-backed securities represent interests in “pools” of mortgages or other assets, including consumer loans or receivables held in trust. Mortgage- and asset-backed securities are subject to credit, interest rate, prepayment and extension risks. These securities also are subject to risk of default on the underlying mortgage or asset, particularly during periods of economic downturn. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities. </li></ul><ul type="square"><li style="margin-left:-20px"><b>Municipal Bonds Risk</b> — Municipal bonds are subject to interest rate, credit and market risk. The ability of an issuer to make payments could be affected by litigation, legislation or other political events or the bankruptcy of the issuer. Lower rated municipal bonds are subject to greater credit and market risk than higher quality municipal bonds. The market prices of residual interest bonds may be highly sensitive to changes in market rates and may decrease significantly when market rates increase.</li></ul><ul type="square"><li style="margin-left:-20px"><b>Non-Investment Grade Securities Risk</b> — Although non-investment grade securities generally pay higher rates of interest than investment grade securities, non-investment grade securities are high risk investments that may cause income and principal losses for the Fund.</li></ul> <ul type="square"><li style="margin-left:-20px"><b>Prepayment Risk</b> — When interest rates fall, certain obligations will be paid off by the obligor more quickly than originally anticipated, and the Fund may have to invest the proceeds in securities with lower yields. </li></ul> <ul type="square"><li style="margin-left:-20px"><b>Repurchase Agreements, Purchase and Sale Contracts Risks</b> — If the other party to a repurchase agreement or purchase and sale contract defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security in either situation and the market value of the security declines, the Fund may lose money. </li></ul> <ul type="square"><li style="margin-left:-20px"><b>Reverse Repurchase Agreements Risk</b> — Reverse repurchase agreements involve the sale of securities held by the Fund with an agreement to repurchase the securities at an agreed-upon price, date and interest payment. Reverse repurchase agreements involve the risk that the other party may fail to return the securities in a timely manner or at all. The Fund could lose money if it is unable to recover the securities and the value of the collateral held by the Fund, including the value of the investments made with cash collateral, is less than the value of securities. These events could also trigger adverse tax consequences to the Fund. </li></ul> <ul type="square"><li style="margin-left:-20px"><b>U.S. Government Issuer Risk</b> — Treasury obligations may differ in their interest rates, maturities, times of issuance and other characteristics. Obligations of U.S. Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the U.S. Government. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so. </li></ul> <b>Performance Information </b> Since Class R Shares of the Long Duration Bond Portfolio have no performance history, the chart and table below give you a picture of the Fund’s long-term performance for Investor A Shares. Although the chart and table show returns for the Investor A Shares which are not offered in this Prospectus, the Investor A Shares would have substantially similar annual returns as the Class R Shares offered in this Prospectus because the Investor A Shares and the Class R Shares are invested in the same portfolio of securities and the annual returns would differ only to the extent that the Investor A Shares and the Class R Shares do not have the same expenses. The actual return of Class R Shares would have been lower than that of Investor A Shares because Class R Shares have higher expenses than Investor A Shares. Investor A Shares of the Fund are estimated to have expenses of 0.91% of average daily net assets (after waivers and reimbursements) for the current fiscal year and Class R Shares of the Fund are expected to have expenses of 1.33% of average daily net assets (after waivers and reimbursements) for the current fiscal year.<br/><br/>The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Fund’s performance to that of the Barclays Long Government/Credit Index. As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. If the Fund’s investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Fund’s returns would have been lower. Updated information on the Fund’s performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052. <b>Investor A Shares </b><br/><b>ANNUAL TOTAL RETURNS </b><br/><b>Long Duration Bond Portfolio </b><br/><b>As of 12/31 </b> During the period shown in the bar chart, the highest return for a quarter was 14.93% (quarter ended December 31, 2008) and the lowest return for a quarter was –6.42% (quarter ended March 31, 2009). <b>As of 12/31/12 <br/>Average Annual Total Returns</b> After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. February 1, 2014 0.86 Other Expenses are based on estimated amounts for the current fiscal year. You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. 800-882-0052 http://www.blackrock.com/funds As with all such investments, past performance (before and after taxes) is not an indication of future results. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. highest return 2008-12-31 0.1493 lowest return 2009-03-31 -0.0642 25000 Other Expenses are based on estimated amounts for the current fiscal year. Other Expenses are based on estimated amounts for the current fiscal year. <B>Principal Risks of Investing in the Fund</b> -0.0213 <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBLACKROCKU.S.GOVERNMENTBONDPORTFOLIOServiceShares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleTransposedBLACKROCKU.S.GOVERNMENTBONDPORTFOLIOServiceShares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualTotalReturnsBLACKROCKU.S.GOVERNMENTBONDPORTFOLIOServiceSharesBarChart column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBLACKROCKU.S.GOVERNMENTBONDPORTFOLIOServiceShares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBLACKROCKGNMAPORTFOLIOBlackRockShares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBLACKROCKGNMAPORTFOLIOClassRShares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBLACKROCKGNMAPORTFOLIOServiceShares column period compact * ~</div> Since BlackRock Shares of the U.S. Government Bond Portfolio are not currently offered for sale and have no current performance history, the chart and table below give you a picture of the Fund’s long-term performance for Investor A Shares. Although the chart and table show returns for the Investor A Shares which are not offered in this Prospectus, the Investor A Shares would have substantially similar annual returns as the BlackRock Shares offered in this Prospectus because the Investor A Shares and the BlackRock Shares are invested in the same portfolio of securities and the annual returns would differ only to the extent that the Investor A Shares and the BlackRock Shares do not have the same expenses. Since Class R Shares of the GNMA Portfolio have no performance history, the chart and table below give you a picture of the Fund’s long-term performance for Investor A Shares. Although the chart and table show returns for the Investor A Shares which are not offered in this Prospectus, the Investor A Shares would have substantially similar annual returns as the Class R Shares offered in this Prospectus because the Investor A Shares and the Class R Shares are invested in the same portfolio of securities and the annual returns would differ only to the extent that the Investor A Shares and the Class R Shares do not have the same expenses. Since Class R Shares of the Inflation Protected Bond Portfolio have no performance history, the chart and table below give you a picture of the Fund’s long-term performance for Investor A Shares. Although the chart and table show returns for the Investor A Shares which are not offered in this Prospectus, the Investor A Shares would have substantially similar annual returns as the Class R Shares offered in this Prospectus because the Investor A Shares and the Class R Shares are invested in the same portfolio of securities and the annual returns would differ only to the extent that the Investor A Shares and the Class R Shares do not have the same expenses. Since Class R Shares of the Long Duration Bond Portfolio have no performance history, the chart and table below give you a picture of the Fund’s long-term performance for Investor A Shares. Although the chart and table show returns for the Investor A Shares which are not offered in this Prospectus, the Investor A Shares would have substantially similar annual returns as the Class R Shares offered in this Prospectus because the Investor A Shares and the Class R Shares are invested in the same portfolio of securities and the annual returns would differ only to the extent that the Investor A Shares and the Class R Shares do not have the same expenses. Other Expenses are based on estimated amounts for the current fiscal year. 0 A contingent deferred sales charge ("CDSC") of 0.50% is assessed on certain redemptions of Investor A Shares made within 18 months after purchase where no initial sales charge was paid at time of purchase as part of an investment of $1,000,000 or more. The CDSC is 4.50% if shares are redeemed in less than one year. The CDSC for Investor B Shares decreases for redemptions made in subsequent years. After six years there is no CDSC on Investor B Shares. (See the section "Details about the Share Classes - Investor B Shares" in the Fund's prospectus for the complete schedule of CDSCs.) There is no CDSC on Investor C Shares after one year. A contingent deferred sales charge ("CDSC") of 0.15% is assessed on certain redemptions of Investor A Shares made within 18 months after purchase where no initial sales charge was paid at time of purchase as part of an investment of $1,000,000 or more. The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Fund's most recent annual report which does not include the Acquired Fund Fees and Expenses. As described in the "Management of the Funds" section of the Fund's prospectus on page 52, BlackRock has contractually agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (excluding Dividend Expense, Interest Expense, Acquired Fund Fees and Expenses and certain other Fund expenses) to 0.85% (for Investor A Shares), 1.63% (for Investor B Shares), 1.62% (for Investor C Shares) and 0.44% (for Institutional Shares) of average daily net assets until February 1, 2014. The Fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. The contractual agreement may be terminated upon 90 days' notice by a majority of the non-interested trustees of the Fund or by a vote of a majority of the outstanding voting securities of the Fund. As described in the "Management of the Funds" section of the Fund's prospectus on page 35, BlackRock has contractually agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (excluding Dividend Expense, Interest Expense, Acquired Fund Fees and Expenses and certain other Fund expenses) to 0.81% of average daily net assets until February 1, 2014. The Fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. The contractual agreement may be terminated upon 90 days' notice by a majority of the non-interested trustees of the Fund or by a vote of a majority of the outstanding voting securities of the Fund. As described in the "Management of the Funds" section of the Fund's prospectus on page 35, BlackRock has contractually agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (excluding Dividend Expense, Interest Expense, Acquired Fund Fees and Expenses and certain other Fund expenses) to 0.52% of average daily net assets until February 1, 2014. The Fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. The contractual agreement may be terminated upon 90 days' notice by a majority of the non-interested trustees of the Fund or by a vote of a majority of the outstanding voting securities of the Fund. The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Fund's most recent annual report which does not include the Acquired Fund Fees and Expenses. As described in the "Management of the Funds" section for the Fund's prospectus on page 35, BlackRock has contractually agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (excluding Dividend Expense, Interest Expense, Acquired Fund Fees and Expenses and certain other Fund expenses) to 0.75% of average daily net assets until February 1, 2014. The Fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. The contractual agreement may be terminated upon 90 days' notice by a majority of the non-interested trustees of the Fund or by a vote of a majority of the outstanding voting securities of the Fund. Other Expenses are based on estimated amounts for the current fiscal year. As described in the "Management of the Funds" section of the Fund's prospectus on page 36, BlackRock has contractually agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (excluding Dividend Expense, Interest Expense, Acquired Fund Fees and Expenses and certain other Fund expenses) to 1.93% of average daily net assets until February 1, 2014. The Fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. The contractual agreement may be terminated upon 90 days' notice by a majority of the non-interested trustees of the Fund or by a vote of a majority of the outstanding voting securities of the Fund. The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Fund's most recent annual report which does not include the Acquired Fund Fees and Expenses. As described in the "Management of the Funds" section of the Fund's prospectus on page 35, BlackRock has contractually agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (excluding Dividend Expense, Interest Expense, Acquired Fund Fees and Expenses and certain other Fund expenses) to 0.32% of average daily net assets until February 1, 2014. The Fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. The contractual agreement may be terminated upon 90 days' notice by a majority of the non-interested trustees of the Fund or by a vote of a majority of the outstanding voting securities of the Fund. As described in the "Management of the Funds" section of the Fund's prospectus on page 35, BlackRock has contractually agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (excluding Dividend Expense, Interest Expense, Acquired Fund Fees and Expenses and certain other Fund expenses) to 0.90% of average daily net assets until February 1, 2014. The Fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. The contractual agreement may be terminated upon 90 days' notice by a majority of the non-interested trustees of the Fund or by a vote of a majority of the outstanding voting securities of the Fund. Other Expenses are based on estimated amounts for the current fiscal year. As described in the "Management of the Fund" section of the Fund's prospectus on page 20, BlackRock has contractually agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (excluding Dividend Expense, Interest Expense, Acquired Fund Fees and Expenses and certain other Fund expenses) to 0.45% of average daily net assets until February 1, 2014. The Fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. The contractual agreement may be terminated upon 90 days' notice by a majority of the non-interested trustees of the Fund or by a vote of a majority of the outstanding voting securities of the Fund. As described in the "Management of the Funds" section of the Fund's prospectus on page 36, BlackRock has contractually agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (excluding Dividend Expense, Interest Expense, Acquired Fund Fees and Expenses and certain other Fund expenses) to 1.79% of average daily net assets until February 1, 2014. The Fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. The contractual agreement may be terminated upon 90 days' notice by a majority of the non-interested trustees of the Fund or by a vote of a majority of the outstanding voting securities of the Fund. The CDSC is 4.00% if shares are redeemed in less than two years. The CDSC for Investor B1 Shares decreases for redemptions made in subsequent years. After six years there is no CDSC on Investor B1 Shares. (See the section "Details about the Share Classes - Investor B1 Shares" in the Fund's prospectus for the complete schedule of CDSCs.) There is no CDSC on Investor C1 Shares after one year. As described in the "Management of the Funds" section of the Fund's prospectus on page 52, BlackRock has contractually agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (excluding Dividend Expense, Interest Expense, Acquired Fund Fees and Expenses and certain other Fund expenses) to 0.90% (for Investor A Shares) and 0.55% (for Institutional Shares) of average daily net assets until February 1, 2014. The Fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. The contractual agreement may be terminated upon 90 days' notice by a majority of the non-interested trustees of the Fund or by a vote of a majority of the outstanding voting securities of the Fund. The CDSC is 4.50% if shares are redeemed in less than one year. The CDSC for Investor B Shares decreases for redemptions made in subsequent years. After six years there is no CDSC on Investor B Shares. (See the section "Details about the Share Classes - Investor B Shares" in the Fund's prospectus for the complete schedule of CDSCs.) As described in the "Management of the Funds" section of the Fund's prospectus on page 36, BlackRock has contractually agreed to waive or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (excluding Dividend Expense, Interest Expense, Acquired Fund Fees and Expenses and certain other Fund expenses) to 2.22% of average daily net assets until February 1, 2014. The Fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. The contractual agreement may be terminated upon 90 days' notice by a majority of the non-interested trustees of the Fund or by a vote of a majority of the outstanding voting securities of the Fund. As described in the "Management of the Fund" section of the Fund's prospectus on page 24, BlackRock has contractually agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (excluding Dividend Expense, Interest Expense, Acquired Fund Fees and Expenses and certain other Fund expenses) to 1.45% (for Investor B1 Shares) and 1.53% (for Investor C1 Shares) of average daily net assets until February 1, 2014. The Fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. The contractual agreement may be terminated upon 90 days' notice by a majority of the non-interested trustees of the Fund or by a vote of a majority of the outstanding voting securities of the Fund. As described in the "Management of the Funds" section of the Fund's prospectus on page 52, BlackRock has contractually agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (excluding Dividend Expense, Interest Expense, Acquired Fund Fees and Expenses and certain other Fund expenses) to 1.07% (for Investor A Shares), 1.88% (for Investor B Shares), 1.82% (for Investor C Shares), 0.62% (for Institutional Shares) and 1.21% (for Class R Shares) of average daily net assets until February 1, 2014. The Fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. The contractual agreement may be terminated upon 90 days' notice by a majority of the non-interested trustees of the Fund or by a vote of a majority of the outstanding voting securities of the Fund. As described in the "Management of the Funds" section of the Fund's prospectus on page 35, BlackRock has contractually agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (excluding Dividend Expense, Interest Expense, Acquired Fund Fees and Expenses and certain other Fund expenses) to 0.45% of average daily net assets until February 1, 2014. The Fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. The contractual agreement may be terminated upon 90 days' notice by a majority of the non-interested trustees of the Fund or by a vote of a majority of the outstanding voting securities of the Fund. As described in the "Management of the Funds" section of the Fund's prospectus on page 52, BlackRock has contractually agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements (excluding Dividend Expense, Interest Expense, Acquired Fund Fees and Expenses and certain other Fund expenses) to 1.07% (for Investor A Shares), 1.85% (for Investor B Shares), 1.82% (for Investor C Shares) and 0.60% (for Institutional Shares) of average daily net assets until February 1, 2014. The Fund may have to repay some of these waivers and reimbursements to BlackRock in the following two years. The contractual agreement may be terminated upon 90 days' notice by a majority of the non-interested trustees of the Fund or by a vote of a majority of the outstanding voting securities of the Fund.