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rr:AfterTaxesOnDistributionsAndSalesMember bmbfi:C000006118Member 2011-10-27 2012-10-26 0000225635 bmbfi:S000002334Member bmbfi:BlackRockSharesMember bmbfi:SpMunicipalBondIndexMember 2011-10-27 2012-10-26 0000225635 bmbfi:S000011867Member bmbfi:InvestorAndInstitutionalMember rr:AfterTaxesOnDistributionsMember bmbfi:C000032428Member 2011-10-27 2012-10-26 0000225635 bmbfi:S000011867Member bmbfi:InvestorAndInstitutionalMember rr:AfterTaxesOnDistributionsAndSalesMember bmbfi:C000032428Member 2011-10-27 2012-10-26 0000225635 bmbfi:S000011867Member bmbfi:InvestorAndInstitutionalMember bmbfi:SAndPMunicipalBondIndexMember 2011-10-27 2012-10-26 0000225635 bmbfi:S000011867Member bmbfi:InvestorAndInstitutionalMember bmbfi:SandPCustomizedHighYieldMunicipalBondMember 2011-10-27 2012-10-26 pure iso4217:USD 466 787 990 785 894 1047 2012-09-30 2012-09-30 2012-09-30 2012-09-30 2012-09-30 2012-09-30 790 2012-09-30 Example: Example: Example: Example: <div style="display:none">~ http://www.blackrock.com/role/ScheduleShareholderFeesBlackRockShort-TermMunicipalFund column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleShareholderFeesBlackRockNationalMunicipalFundserviceshares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleShareholderFeesBlackRockHighYieldMunicipalFund column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleShareholderFeesBlackRockNationalMunicipalFund column period compact * ~</div> Example: Example: Example: <div style="display:none">~ http://www.blackrock.com/role/ScheduleShareholderFeesBlackRockShort-TermMunicipalFundinvestora1shares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleShareholderFeesBlackRockShort-TermMunicipalFundblackrock column period compact * ~</div> 2012-09-30 <div style="display:none">~ http://www.blackrock.com/role/ScheduleShareholderFeesBlackRockNationalMunicipalFundclassb1c1 column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleShareholderFeesBlackRockNationalMunicipalFundinvestorashares column period compact * ~</div> 515 657 466 787 280 990 990 444 http://www.blackrock.com/funds 908 985 894 395 http://www.blackrock.com/funds http://www.blackrock.com/funds 0.0608 0.0151 http://www.blackrock.com/funds 0.0608 http://www.blackrock.com/funds http://www.blackrock.com/funds 219 399 0.0142 0.0151 349 Example: 1247 790 http://www.blackrock.com/funds 0.0549 0.0608 Fund Overview Key Facts about BlackRock National Municipal Fund Fund Overview Key Facts about BlackRock Short-Term Municipal Fund Fund Overview Key Facts about BlackRock National Municipal Fund Shareholder Fees (fees paid directly from your investment) 0 0.0425 0 0 0 Shareholder Fees (fees paid directly from your investment) 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 Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 51% of the average value of its portfolio. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in the BlackRock-advised fund complex. 50000 Fund Overview Key Facts about BlackRock High Yield Municipal Fund Shareholder Fees (fees paid directly from your investment) 0.03 0 0 0 You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in the BlackRock-advised fund complex. 0.0425 0 0 Shareholder Fees (fees paid directly from your investment) 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 Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 39% of the average value of its portfolio. 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 Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 17% of the average value of its portfolio. 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 Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 39% of the average value of its portfolio. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in the BlackRock-advised fund complex. 0.007 0.0919 0.133 <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBlackRockShort-TermMunicipalFund column period compact * ~</div> 0.0919 <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBlackRockHighYieldMunicipalFund column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBlackRockNationalMunicipalFundserviceshares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBlackRockNationalMunicipalFund column period compact * ~</div> Fund Overview Key Facts about BlackRock Short-Term Municipal Fund Fund Overview Key Facts about BlackRock Short-Term Municipal Fund Shareholder Fees (fees paid directly from your investment) 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 Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 51% of the average value of its portfolio. Shareholder Fees (fees paid directly from your investment) 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 Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 51% of the average value of its portfolio. 0.0071 0 0.01 0.0062 Fund Overview Key Facts about BlackRock National Municipal Fund Fund Overview Key Facts about BlackRock National Municipal Fund Shareholder Fees (fees paid directly from your investment) Shareholder Fees (fees paid directly from your investment) 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 Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 39% of the average value of its portfolio. 0 0 0 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 Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 39% of the average value of its portfolio. http://www.blackrock.com/funds <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBlackRockShort-TermMunicipalFundinvestora1shares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBlackRockShort-TermMunicipalFundblackrock column period compact * ~</div> 0.0919 0.0875 <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBlackRockNationalMunicipalFundclassb1c1 column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualFundOperatingExpensesBlackRockNationalMunicipalFundinvestorashares column period compact * ~</div> BlackRock Shares commenced operations on July 18, 2011. As a result, the chart gives you a picture of the long-term performance of the Fund for Investor A Shares, which are not offered in this prospectus. Investor A Shares would have annual returns substantially similar to BlackRock Shares differing only to the extent that Investor A and BlackRock Shares have different expenses. The actual return of BlackRock Shares would generally be higher than that of Investor A Shares because BlackRock Shares are not subject to distribution and/or service (12b-1) fees. Service Shares commenced operations on July 18, 2011. As a result, the chart gives you a picture of the long-term performance of the Fund for Investor A Shares, which are not offered in this prospectus. Investor A Shares would have annual returns substantially similar to Service Shares differing only to the extent that Investor A and Service Shares have different expenses. The actual return of Service Shares would be similar to that of Investor A Shares because Service Shares are subject to the same distribution and/or service (12b-1) fees as Investor A Shares. 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 $100,000 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 30 of the Funds prospectus and in the Purchase of Shares section on page II-71 of the Funds statement of additional information. 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 $50,000 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 30 of the Funds prospectus and in the Purchase of Shares section on page II-71 of the Funds statement of additional information. This table describes the fees and expenses that you may pay if you buy and hold Service Shares of the Fund. 485BPOS Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) BLACKROCK MUNICIPAL BOND FUND, INC. 2012-10-26 Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) 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 Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: Principal Investment Strategies of the Fund The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Funds most recent annual report, which does not include Acquired Fund Fees and Expenses. Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) 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 $100,000 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 30 of the Funds prospectus and in the Purchase of Shares section on page II-71 of the Funds statement of additional information. 100000 -0.0011 -0.0013 -0.0009 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 Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: 95 Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) 365 186 247 51 1037 1724 Principal Investment Strategies of the Fund A contingent deferred sales charge (CDSC) of 1.00% is assessed on certain redemptions of Investor A Shares made within 18 months after purchase where no initial sales charge was paid at the time of purchase of an investment of $1,000,000 or more. 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 the time of purchase of an investment of $250,000 or more. A contingent deferred sales charge (CDSC) of 1.00% is assessed on certain redemptions of Investor A Shares made within 18 months after purchase where no initial sales charge was paid at the time of purchase 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 Funds most recent annual report, which does not include Acquired Fund Fees and Expenses. 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 Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: Principal Investment Strategies of the Fund 529 286 82 2148 The information shows you how the Funds performance has varied year by year and provides some indication of the risks of investing in the Fund. The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Funds most recent annual report, which does not include Acquired Fund Fees and Expenses. 100000 800-882-0052 505 535 260 73 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 Institutional Shares only, and the after-tax returns for Investor A, Investor B and Investor C Shares will vary. The information shows you how the Funds performance has varied year by year and provides some indication of the risks of investing in the Fund. 1735 1958 800-882-0052 During the ten-year period shown in the bar chart, the highest return for a quarter was 1.67% (quarter ended December 31, 2008) and the lowest return for a quarter was –0.37% (quarter ended June 30, 2004). The year-to-date return as of September 30, 2012 was 0.70%. Principal Investment Strategies of the Fund The information shows you how the Funds performance has varied year by year and provides some indication of the risks of investing in the Fund. 800-882-0052 During the ten-year period shown in the bar chart, the highest return for a quarter was 7.42% (quarter ended September 30, 2009) and the lowest return for a quarter was –4.66% (quarter ended December 31, 2008). The year-to-date return as of September 30, 2012 was 9.19%. As of 12/31/11 Average Annual Total Returns During the period shown in the bar chart, the highest return for a quarter was 16.53% (quarter ended September 30, 2009) and the lowest return for a quarter was –19.35% (quarter ended December 31, 2008). The year-to-date return as of September 30, 2012 was 13.30%. The information shows you how the Funds performance has varied year by year and provides some indication of the risks of investing in the Fund. 800-882-0052 As of 12/31/11 Average Annual Total Returns 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 Service Shares will vary. During the ten-year period shown in the bar chart, the highest return for a quarter was 7.42% (quarter ended September 30, 2009) and the lowest return for a quarter was –4.66% (quarter ended December 31, 2008). The year-to-date return as of September 30, 2012 was 9.19%. As of 12/31/11 Average Annual Total Returns 2006-08-01 2006-08-01 2006-08-01 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 investors 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. 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 Institutional Shares only, and the after-tax returns for Investor A and Investor C Shares will vary. <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualTotalReturnsBlackRockShort-TermMunicipalFundBarChart column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualTotalReturnsBlackRockHighYieldMunicipalFundBarChart column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualTotalReturnsBlackRockNationalMunicipalFundservicesharesBarChart column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualTotalReturnsBlackRockNationalMunicipalFundBarChart column period compact * ~</div> 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 Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Principal Investment Strategies of the Fund As of 12/31/11 Average Annual Total Returns 800-882-0052 This table describes the fees and expenses that you may pay if you buy and hold Investor A1 Shares of the Fund. Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) 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 Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: Principal Investment Strategies of the Fund This table describes the fees and expenses that you may pay if you buy and hold BlackRock Shares of the Fund. 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. 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 Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: During the ten-year period shown in the bar chart, the highest return for a quarter was 1.65% (quarter ended December 31, 2008) and the lowest return for a quarter was –0.40% (quarter ended December 31, 2010). The year-to-date return as of September 30, 2012 was 0.62%. As of 12/31/11 Average Annual Total Returns The information shows you how the Funds performance has varied year by year and provides some indication of the risks of investing in the Fund. 800-882-0052 40 155 This table describes the fees and expenses that you may pay if you buy and hold Investor B1 and Investor C1 Shares of the Fund. This table describes the fees and expenses that you may pay if you buy and hold BlackRock Shares of the Fund. Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) A contingent deferred sales charge (CDSC) of 4.50% is assessed if shares are redeemed in less than one year. 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 for the complete schedule of CDSCs.) -0.0008 The information shows you how the Funds performance has varied year by year and provides some indication of the risks of investing in the Fund. The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Funds most recent annual report, which does not include Acquired Fund Fees and Expenses. During the ten-year period shown in the bar chart, the highest return for a quarter was 1.65% (quarter ended December 31, 2008) and the lowest return for a quarter was –0.37% (quarter ended June 30, 2004). The year-to-date return as of September 30, 2012 was 0.71%. 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 Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: 57 The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Funds most recent annual report, which does not include Acquired Fund Fees and Expenses. 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 Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: Principal Investment Strategies of the Fund 647 240 1878 1739 Principal Investment Strategies of the Fund 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/ScheduleAnnualTotalReturnsBlackRockShort-TermMunicipalFundinvestora1sharesBarChart column period compact * ~</div> The information shows you how the Funds performance has varied year by year and provides some indication of the risks of investing in the Fund. 800-882-0052 During the ten-year period shown in the bar chart, the highest return for a quarter was 7.42% (quarter ended September 30, 2009) and the lowest return for a quarter was –4.66% (quarter ended December 31, 2008). The year-to-date return as of September 30, 2012 was 9.19%. As of 12/31/11 Average Annual Total Returns The information shows you how the Funds performance has varied year by year and provides some indication of the risks of investing in the Fund. 800-882-0052 During the ten-year period shown in the bar chart, the highest return for a quarter was 7.39% (quarter ended September 30, 2009) and the lowest return for a quarter was –4.82% (quarter ended December 31, 2010). The year-to-date return as of September 30, 2012 was 8.75%. 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 BlackRock Shares will vary. 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 C1 Shares only, and the after-tax returns for Investor B1 Shares will vary. <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualTotalReturnsBlackRockShort-TermMunicipalFundblackrockBarChart column period compact * ~</div> As of 12/31/11 Average Annual Total Returns <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualTotalReturnsBlackRockNationalMunicipalFundinvestorasharesBarChart column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAnnualTotalReturnsBlackRockNationalMunicipalFundclassb1c1BarChart column period compact * ~</div> As of 12/31/11 Average Annual Total Returns -0.0008 Investment Objective Investment Objective Fees and Expenses of the Fund Investment Objective Fees and Expenses of the Fund Fees and Expenses of the Fund 0 0 0.04 0.01 0 0000225635 Portfolio Turnover: 2012-06-30 0.0008 0.001 0.0093 Investment Objective You would pay the following expenses if you did not redeem your shares: Fees and Expenses of the Fund Under normal circumstances, the Short-Term Fund seeks to achieve its objective by investing at least 80% of its assets in municipal bonds. Municipal bonds include debt obligations issued by or on behalf of a governmental entity or other qualifying issuer that pay interest that is, in the opinion of bond counsel to the issuer, generally excludable from gross income for Federal income tax purposes (except that the interest may be includable in taxable income for purposes of the Federal alternative minimum tax). Municipal bonds may be obligations of a variety of issuers, including governmental entities or other qualifying issuers. Issuers may be states, territories and possessions of the United States and the District of Columbia and their political subdivisions, agencies and instrumentalities. Municipal bonds also include short-term tax-exempt obligations like municipal notes and variable rate demand obligations. The Short-Term Fund invests primarily in investment grade municipal bonds or municipal notes, including variable rate demand obligations. Investment grade bonds are securities which are rated in the four highest categories by at least one of the major rating agencies or determined by the management team to be of similar quality. Generally, the higher the rating of a bond, the higher the likelihood that interest and principal payments will be made on time. Municipal notes are shorter-term municipal debt obligations that pay interest that is, in the opinion of bond counsel to the issuer, generally excludable from gross income for Federal income tax purposes (except that the interest may be includable in taxable income for purposes of the Federal alternative minimum tax) and that have a maturity that is generally one year or less. The Fund will maintain a dollar weighted maturity of no more than two years. Because of their shorter maturities, the Funds investments will not usually be as sensitive to changes in prevailing interest rates as are long-term municipal bonds. Fluctuations in interest rates on short-term municipal bonds may, however, vary more widely from time to time than those on long-term municipal bonds. 0 0.0008 0.0008 0.0008 0.0008 0.001 0.0013 0.0008 0.0013 0.0093 0.0146 0.0166 0.0071 0.0066 0.0084 0.0144 0.005 0 296 0 0.01 0 0.01 0.01 505 293 456 160 0.0009 0.0009 0.0009 0.0017 0.0018 0.0015 0.0107 0.0183 0.008 Portfolio Turnover: 86 147 Under normal circumstances, the Fund seeks to achieve its objective by investing at least 80% of its assets in municipal bonds. Municipal bonds include debt obligations issued by or on behalf of a governmental entity or other qualifying issuer that pay interest that is, in the opinion of bond counsel to the issuer, generally excludable from gross income for Federal income tax purposes (except that the interest may be includable in taxable income for purposes of the Federal alternative minimum tax). Municipal bonds may be obligations of a variety of issuers, including governmental entities or other qualifying issuers. Issuers may be states, territories and possessions of the United States and the District of Columbia and their political subdivisions, agencies and instrumentalities. Municipal bonds also include short-term tax-exempt obligations like municipal notes and variable rate demand obligations. The Fund may invest in municipal bonds rated in any rating category or in unrated municipal bonds. Although Fund management presently intends to invest at least 65% of the Funds net assets in municipal bonds rated investment grade or in unrated municipal bonds that Fund management believes are of comparable quality, it is possible that in the future the Fund could invest up to 100% of its assets in junk bonds. Investment grade bonds are securities which are rated in the four highest categories by at least one of the major rating agencies or determined by the management team to be of similar quality. The Fund does not intend to invest more than 35% of its net assets in junk bonds or in unrated bonds that Fund management believes are of comparable quality. This is a non-fundamental policy and may be changed by the Board at any time. The Fund will usually invest in municipal bonds that have a maturity of five years or longer. The Fund may engage in transactions in certain derivatives, such as financial futures contracts and options thereon, indexed and inverse floating rate obligations and swap agreements, including credit default swap agreements. The Fund may use derivative instruments to hedge its investments or to seek to enhance returns. The Fund may invest in tender option bonds and residual interest tender option bonds, and may also invest in securities the return of which is inversely related to changes in an interest rate (inverse floaters). The Fund will look through to the underlying municipal bond held by a tender option bond trust for purposes of the Funds 80% policy. You would pay the following expenses if you did not redeem your shares: 751 576 255 186 Portfolio Turnover: Under normal circumstances, the High Yield Fund seeks to achieve its objective by investing at least 80% of its assets in municipal bonds. Municipal bonds include debt obligations issued by or on behalf of a governmental entity or other qualifying issuer that pay interest that is, in the opinion of bond counsel to the issuer, generally excludable from gross income for Federal income tax purposes (except that the interest may be includable in taxable income for purposes of the Federal alternative minimum tax). Municipal bonds may be obligations of a variety of issuers, including governmental entities or other qualifying issuers. Issuers may be states, territories and possessions of the United States and the District of Columbia and their political subdivisions, agencies and instrumentalities. Municipal bonds also include short-term tax-exempt obligations like municipal notes and variable rate demand obligations. The High Yield Fund may invest in municipal bonds rated in any rating category or in unrated municipal bonds. Although the Fund may invest in municipal bonds in any rating category, Fund management presently intends to invest at least 65% of the Funds net assets in medium- to low-quality bonds as rated by at least one independent rating agency (BBB or lower by Standard & Poors (S&P) or Fitch Ratings (Fitch) or Baa or lower by Moodys Investors Service, Inc. (Moodys)), or if unrated, judged to be of comparable quality by BlackRock. Obligations rated below BBB or Baa are commonly known as junk bonds. It is possible that the Fund could invest up to 100% of its assets in junk bonds. The Fund may also invest up to 10% of its assets in municipal bonds that are distressed securities. Distressed securities are securities that are the subject of bankruptcy proceedings or otherwise in default as to the repayment of principal and/or payment of interest at the time of acquisition or are rated in the lowest rating categories by at least one independent rating agency (CC or lower by S&P or Fitch or Ca or lower by Moodys), or if unrated, judged to be of comparable quality by BlackRock. The Fund will usually invest in municipal bonds that have a maturity of five years or longer. November 1, 2013 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>Credit Risk — 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 issuers credit rating or the markets perception of an issuers creditworthiness may also affect the value of the Funds investment in that issuer.</li></ul><ul type="square"><li>Interest Rate Risk — 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>Leverage Risk — 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 Funds portfolio will be magnified when the Fund uses leverage.</li></ul><ul type="square"><li>Liquidity Risk — Liquidity risk exists when particular investments are difficult to purchase or sell. The Funds 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 Funds 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>Market Risk and Selection Risk — 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>Municipal Securities Risks — Municipal securities risks include the ability of the issuer to repay the obligation, the relative lack of information about certain issuers of municipal securities, and the possibility of future legislative changes which could affect the market for and value of municipal securities. These risks include: General Obligation Bonds Risks — Timely payments depend on the issuers credit quality, ability to raise tax revenues and ability to maintain an adequate tax base. Revenue Bonds Risks — These payments depend on the money earned by the particular facility or class of facilities, or the amount of revenues derived from another source. Private Activity Bonds Risks — Municipalities and other public authorities issue private activity bonds to finance development of industrial facilities for use by a private enterprise. The private enterprise pays the principal and interest on the bond, and the issuer does not pledge its faith, credit and taxing power for repayment. Moral Obligation Bonds Risks — Moral obligation bonds are generally issued by special purpose public authorities of a state or municipality. If the issuer is unable to meet its obligations, repayment of these bonds becomes a moral commitment, but not a legal obligation, of the state or municipality. Municipal Notes Risks — Municipal notes are shorter term municipal debt obligations. If there is a shortfall in the anticipated proceeds, the notes may not be fully repaid and the Fund may lose money. Municipal Lease Obligations Risks — In a municipal lease obligation, the issuer agrees to make payments when due on the lease obligation. Although the issuer does not pledge its unlimited taxing power for payment of the lease obligation, the lease obligation is secured by the leased property. Tax-Exempt Status Risk — The Fund and its investment manager will rely on the opinion of issuers bond counsel and, in the case of derivative securities, sponsors counsel, on the tax-exempt status of interest on municipal bonds and payments under derivative securities. Neither the Fund nor its investment manager will independently review the bases for those tax opinions, which may ultimately be determined to be incorrect and subject the Fund and its shareholders to substantial tax liabilities.</li></ul><ul type="square"><li>Prepayment and Extension Risk — When interest rates fall, an issuer may redeem a security with call features by repaying it early, and the Fund may have to invest the proceeds in securities with lower yields. When interest rates rise, certain obligations will be paid off by the issuer more slowly than anticipated, causing the value of these securities to fall.</li></ul><ul type="square"><li>Variable Rate Demand Obligations Risks — Variable rate demand obligations are floating rate securities that combine an interest in a long term municipal bond with a right to demand payment before maturity from a bank or other financial institution. If the bank or financial institution is unable to pay, the Fund may lose money.</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. Portfolio Turnover: 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>Credit Risk 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 issuers credit rating or the markets perception of an issuers creditworthiness may also affect the value of the Funds investment in that issuer. </li></ul><ul type="square"><li> Distressed Securities Risk Distressed securities are speculative and involve substantial risks in addition to the risks of investing in junk bonds. The Fund will generally not receive interest payments on the distressed securities and may incur costs to protect its investment. In addition, distressed securities involve the substantial risk that principal will not be repaid. These securities may present a substantial risk of default or may be in default at the time of investment. The Fund may incur additional expenses to the extent it is required to seek recovery upon a default in the payment of principal of or interest on its portfolio holdings. In any reorganization or liquidation proceeding relating to a portfolio company, the Fund may lose its entire investment or may be required to accept cash or securities with a value less than its original investment. Distressed securities and any securities received in an exchange for such securities may be subject to restrictions on resale. </li></ul><ul type="square"><li> Interest Rate Risk 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>Junk Bonds Risk Although junk bonds generally pay higher rates of interest than investment grade bonds, junk bonds are high risk investments that may cause income and principal losses for the Fund. </li></ul><ul type="square"><li>Leverage Risk 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 Funds portfolio will be magnified when the Fund uses leverage. </li></ul><ul type="square"><li>Liquidity Risk Liquidity risk exists when particular investments are difficult to purchase or sell. The Funds 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 Funds 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>Market Risk and Selection Risk 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>Municipal Securities Risks Municipal securities risks include the ability of the issuer to repay the obligation, the relative lack of information about certain issuers of municipal securities, and the possibility of future legislative changes which could affect the market for and value of municipal securities. These risks include: General Obligation Bonds Risks Timely payments depend on the issuers credit quality, ability to raise tax revenues and ability to maintain an adequate tax base. Revenue Bonds Risks These payments depend on the money earned by the particular facility or class of facilities, or the amount of revenues derived from another source. Private Activity Bonds Risks Municipalities and other public authorities issue private activity bonds to finance development of industrial facilities for use by a private enterprise. The private enterprise pays the principal and interest on the bond, and the issuer does not pledge its faith, credit and taxing power for repayment. Moral Obligation Bonds Risks Moral obligation bonds are generally issued by special purpose public authorities of a state or municipality. If the issuer is unable to meet its obligations, repayment of these bonds becomes a moral commitment, but not a legal obligation, of the state or municipality. Municipal Notes Risks Municipal notes are shorter term municipal debt obligations. If there is a shortfall in the anticipated proceeds, the notes may not be fully repaid and the Fund may lose money. Municipal Lease Obligations Risks In a municipal lease obligation, the issuer agrees to make payments when due on the lease obligation. Although the issuer does not pledge its unlimited taxing power for payment of the lease obligation, the lease obligation is secured by the leased property. Tax-Exempt Status Risk The Fund and its investment manager will rely on the opinion of issuers bond counsel and, in the case of derivative securities, sponsors counsel, on the tax-exempt status of interest on municipal bonds and payments under derivative securities. Neither the Fund nor its investment manager will independently review the bases for those tax opinions, which may ultimately be determined to be incorrect and subject the Fund and its shareholders to substantial tax liabilities.</li></ul><ul type="square"><li> Prepayment and Extension Risk When interest rates fall, an issuer may redeem a security with call features by repaying it early, and the Fund may have to invest the proceeds in securities with lower yields. When interest rates rise, certain obligations will be paid off by the issuer more slowly than anticipated, causing the value of these securities to fall.</li></ul> 698 749 515 227 You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. 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. 135 160 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.<ul type="square"><li>Credit Risk — 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 issuers credit rating or the markets perception of an issuers creditworthiness may also affect the value of the Funds investment in that issuer.</li></ul><ul type="square"><li> Derivatives Risk — The Funds use of derivatives may reduce the Funds 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 Funds 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>Interest Rate Risk — 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>Junk Bonds Risk — Although junk bonds generally pay higher rates of interest than investment grade bonds, junk bonds are high risk investments that may cause income and principal losses for the Fund. </li></ul><ul type="square"><li>Leverage Risk — 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 Funds portfolio will be magnified when the Fund uses leverage. </li></ul><ul type="square"><li>Liquidity Risk — Liquidity risk exists when particular investments are difficult to purchase or sell. The Funds 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 Funds 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>Market Risk and Selection Risk — 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>Municipal Securities Risks — Municipal securities risks include the ability of the issuer to repay the obligation, the relative lack of information about certain issuers of municipal securities, and the possibility of future legislative changes which could affect the market for and value of municipal securities. These risks include: General Obligation Bonds Risks — Timely payments depend on the issuers credit quality, ability to raise tax revenues and ability to maintain an adequate tax base. Revenue Bonds Risks — These payments depend on the money earned by the particular facility or class of facilities, or the amount of revenues derived from another source. Private Activity Bonds Risks — Municipalities and other public authorities issue private activity bonds to finance development of industrial facilities for use by a private enterprise. The private enterprise pays the principal and interest on the bond, and the issuer does not pledge its faith, credit and taxing power for repayment. Moral Obligation Bonds Risks — Moral obligation bonds are generally issued by special purpose public authorities of a state or municipality. If the issuer is unable to meet its obligations, repayment of these bonds becomes a moral commitment, but not a legal obligation, of the state or municipality. Municipal Notes Risks — Municipal notes are shorter term municipal debt obligations. If there is a shortfall in the anticipated proceeds, the notes may not be fully repaid and the Fund may lose money. Municipal Lease Obligations Risks — In a municipal lease obligation, the issuer agrees to make payments when due on the lease obligation. Although the issuer does not pledge its unlimited taxing power for payment of the lease obligation, the lease obligation is secured by the leased property. Tax-Exempt Status Risk — The Fund and its investment manager will rely on the opinion of issuers bond counsel and, in the case of derivative securities, sponsors counsel, on the tax-exempt status of interest on municipal bonds and payments under derivative securities. Neither the Fund nor its investment manager will independently review the bases for those tax opinions, which may ultimately be determined to be incorrect and subject the Fund and its shareholders to substantial tax liabilities. </li></ul><ul type="square"><li>Prepayment and Extension Risk — When interest rates fall, an issuer may redeem a security with call features by repaying it early, and the Fund may have to invest the proceeds in securities with lower yields. When interest rates rise, certain obligations will be paid off by the issuer more slowly than anticipated, causing the value of these securities to fall. </li></ul><ul type="square"><li>Tender Option Bonds and Related Securities Risk — Investments in tender option bonds, residual interest tender option bonds and inverse floaters expose the Fund to the same risks as investments in derivatives, as well as risks associated with leverage, described above, especially the risk of increased volatility. An investment in these securities typically will involve greater risk than an investment in a municipal fixed rate security, including the risk of loss of principal. Distributions on residual interest tender option bonds and inverse floaters will bear an inverse relationship to short-term municipal security interest rates. Distributions on the residual interests and inverse floaters paid to the Fund will be reduced or, in the extreme, eliminated as short-term municipal interest rates rise and will increase when short-term municipal interest rates fall. Residual interest tender option bonds and inverse floaters generally will underperform the market for fixed rate municipal securities in a rising interest rate environment. </li></ul> You would pay the following expenses if you did not redeem your shares: -0.2736 0.1213 2008-12-31 0.0167 lowest return 2004-06-30 You may lose part or all of your investment in the Fund or your investment may not perform as well as other similar investments. Under normal circumstances, the National Fund seeks to achieve its objective by investing at least 80% of its assets in municipal bonds. Municipal bonds include debt obligations issued by or on behalf of a governmental entity or other qualifying issuer that pay interest that is, in the opinion of bond counsel to the issuer, generally excludable from gross income for Federal income tax purposes (except that the interest may be includable in taxable income for purposes of the Federal alternative minimum tax). Municipal bonds may be obligations of a variety of issuers, including governmental entities or other qualifying issuers. Issuers may be states, territories and possessions of the United States and the District of Columbia and their political subdivisions, agencies and instrumentalities. Municipal bonds also include short-term tax-exempt obligations like municipal notes and variable rate demand obligations. The Fund may invest in municipal bonds rated in any rating category or in unrated municipal bonds. Although Fund management presently intends to invest at least 65% of the Funds net assets in municipal bonds rated investment grade or in unrated municipal bonds that Fund management believes are of comparable quality, it is possible that in the future the Fund could invest up to 100% of its assets in junk bonds. Investment grade bonds are securities which are rated in the four highest categories by at least one of the major rating agencies or determined by the management team to be of similar quality. The Fund does not intend to invest more than 35% of its net assets in junk bonds or in unrated bonds that Fund management believes are of comparable quality. This is a non-fundamental policy and may be changed by the Board at any time. The Fund will usually invest in municipal bonds that have a maturity of five years or longer. The Fund may engage in transactions in certain derivatives, such as financial futures contracts and options thereon, indexed and inverse floating rate obligations and swap agreements, including credit default swap agreements. The Fund may use derivative instruments to hedge its investments or to seek to enhance returns. The Fund may invest in tender option bonds and residual interest tender option bonds, and may also invest in securities the return of which is inversely related to changes in an interest rate (inverse floaters). The Fund will look through to the underlying municipal bond held by a tender option bond trust for purposes of the Funds 80% policy. lowest return 2009-09-30 0.0742 2008-12-31 0.0241 0.0241 0.0239 0.0184 0.0203 0.0138 0.0535 0.0316 -0.0887 0.1136 0.038 0.038 0.0175 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>Credit Risk — 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 issuers credit rating or the markets perception of an issuers creditworthiness may also affect the value of the Funds investment in that issuer.</li></ul> <ul type="square"><li>Derivatives Risk — The Funds use of derivatives may reduce the Funds 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 Funds 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>Interest Rate Risk — 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>Junk Bonds Risk — Although junk bonds generally pay higher rates of interest than investment grade bonds, junk bonds are high risk investments that may cause income and principal losses for the Fund.</li></ul> <ul type="square"><li>Leverage Risk — 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 Funds portfolio will be magnified when the Fund uses leverage.</li></ul> <ul type="square"><li>Liquidity Risk — Liquidity risk exists when particular investments are difficult to purchase or sell. The Funds 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 Funds 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>Market Risk and Selection Risk — 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>Municipal Securities Risks — Municipal securities risks include the ability of the issuer to repay the obligation, the relative lack of information about certain issuers of municipal securities, and the possibility of future legislative changes which could affect the market for and value of municipal securities. These risks include: General Obligation Bonds Risks Timely payments depend on the issuers credit quality, ability to raise tax revenues and ability to maintain an adequate tax base. Revenue Bonds Risks These payments depend on the money earned by the particular facility or class of facilities, or the amount of revenues derived from another source. Private Activity Bonds Risks Municipalities and other public authorities issue private activity bonds to finance development of industrial facilities for use by a private enterprise. The private enterprise pays the principal and interest on the bond, and the issuer does not pledge its faith, credit and taxing power for repayment. Moral Obligation Bonds Risks Moral obligation bonds are generally issued by special purpose public authorities of a state or municipality. If the issuer is unable to meet its obligations, repayment of these bonds becomes a moral commitment, but not a legal obligation, of the state or municipality. Municipal Notes Risks Municipal notes are shorter term municipal debt obligations. If there is a shortfall in the anticipated proceeds, the notes may not be fully repaid and the Fund may lose money. Municipal Lease Obligations Risks In a municipal lease obligation, the issuer agrees to make payments when due on the lease obligation. Although the issuer does not pledge its unlimited taxing power for payment of the lease obligation, the lease obligation is secured by the leased property. Tax-Exempt Status Risk The Fund and its investment manager will rely on the opinion of issuers bond counsel and, in the case of derivative securities, sponsors counsel, on the tax-exempt status of interest on municipal bonds and payments under derivative securities. Neither the Fund nor its investment manager will independently review the bases for those tax opinions, which may ultimately be determined to be incorrect and subject the Fund and its shareholders to substantial tax liabilities. </li></ul><ul type="square"><li>Prepayment and Extension Risk — When interest rates fall, an issuer may redeem a security with call features by repaying it early, and the Fund may have to invest the proceeds in securities with lower yields. When interest rates rise, certain obligations will be paid off by the issuer more slowly than anticipated, causing the value of these securities to fall.</li></ul> <ul type="square"><li>Tender Option Bonds and Related Securities Risk — Investments in tender option bonds, residual interest tender option bonds and inverse floaters expose the Fund to the same risks as investments in derivatives, as well as risks associated with leverage, described above, especially the risk of increased volatility. An investment in these securities typically will involve greater risk than an investment in a municipal fixed rate security, including the risk of loss of principal. Distributions on residual interest tender option bonds and inverse floaters will bear an inverse relationship to short-term municipal security interest rates. Distributions on the residual interests and inverse floaters paid to the Fund will be reduced or, in the extreme, eliminated as short-term municipal interest rates rise and will increase when short-term municipal interest rates fall. Residual interest tender option bonds and inverse floaters generally will underperform the market for fixed rate municipal securities in a rising interest rate environment.</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. 0.0478 0.0478 0.0476 0.0524 0.0535 2009-09-30 0.1653 lowest return 2008-12-31 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. However, the table includes all applicable fees and sales charges. Actual after-tax returns depend on the investors 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. 0.0904 -0.0887 0.1136 2009-09-30 0.0742 lowest return 2008-12-31 However, the table includes all applicable fees and sales charges. 0.0478 0.0478 0.0476 0.0471 0.0445 0.0549 0.0535 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. 0.0904 Investment Objective Fees and Expenses of the Fund Portfolio Turnover: lowest return Investment Objective Fees and Expenses of the Fund Portfolio Turnover: Under normal circumstances, the Short-Term Fund seeks to achieve its objective by investing at least 80% of its assets in municipal bonds. Municipal bonds include debt obligations issued by or on behalf of a governmental entity or other qualifying issuer that pay interest that is, in the opinion of bond counsel to the issuer, generally excludable from gross income for Federal income tax purposes (except that the interest may be includable in taxable income for purposes of the Federal alternative minimum tax). Municipal bonds may be obligations of a variety of issuers, including governmental entities or other qualifying issuers. Issuers may be states, territories and possessions of the United States and the District of Columbia and their political subdivisions, agencies and instrumentalities. Municipal bonds also include short-term tax-exempt obligations like municipal notes and variable rate demand obligations. The Short-Term Fund invests primarily in investment grade municipal bonds or municipal notes, including variable rate demand obligations. Investment grade bonds are securities which are rated in the four highest categories by at least one of the major rating agencies or determined by the management team to be of similar quality. Generally, the higher the rating of a bond, the higher the likelihood that interest and principal payments will be made on time. Municipal notes are shorter-term municipal debt obligations that pay interest that is, in the opinion of bond counsel to the issuer, generally excludable from gross income for Federal income tax purposes (except that the interest may be includable in taxable income for purposes of the Federal alternative minimum tax) and that have a maturity that is generally one year or less. The Fund will maintain a dollar weighted maturity of no more than two years. Because of their shorter maturities, the Funds investments will not usually be as sensitive to changes in prevailing interest rates as are long-term municipal bonds. Fluctuations in interest rates on short-term municipal bonds may, however, vary more widely from time to time than those on long-term municipal bonds. 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>Credit Risk — 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 issuers credit rating or the markets perception of an issuers creditworthiness may also affect the value of the Funds investment in that issuer. </li></ul><ul type="square"><li>Interest Rate Risk — 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>Leverage Risk — 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 Funds portfolio will be magnified when the Fund uses leverage. </li></ul><ul type="square"><li>Liquidity Risk — Liquidity risk exists when particular investments are difficult to purchase or sell. The Funds 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 Funds 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>Market Risk and Selection Risk — 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>Municipal Securities Risks — Municipal securities risks include the ability of the issuer to repay the obligation, the relative lack of information about certain issuers of municipal securities, and the possibility of future legislative changes which could affect the market for and value of municipal securities. These risks include: General Obligation Bonds Risks — Timely payments depend on the issuers credit quality, ability to raise tax revenues and ability to maintain an adequate tax base. Revenue Bonds Risks — These payments depend on the money earned by the particular facility or class of facilities, or the amount of revenues derived from another source. Private Activity Bonds Risks — Municipalities and other public authorities issue private activity bonds to finance development of industrial facilities for use by a private enterprise. The private enterprise pays the principal and interest on the bond, and the issuer does not pledge its faith, credit and taxing power for repayment. Moral Obligation Bonds Risks — Moral obligation bonds are generally issued by special purpose public authorities of a state or municipality. If the issuer is unable to meet its obligations, repayment of these bonds becomes a moral commitment, but not a legal obligation, of the state or municipality. Municipal Notes Risks — Municipal notes are shorter term municipal debt obligations. If there is a shortfall in the anticipated proceeds, the notes may not be fully repaid and the Fund may lose money. Municipal Lease Obligations Risks — In a municipal lease obligation, the issuer agrees to make payments when due on the lease obligation. Although the issuer does not pledge its unlimited taxing power for payment of the lease obligation, the lease obligation is secured by the leased property. Tax-Exempt Status Risk — The Fund and its investment manager will rely on the opinion of issuers bond counsel and, in the case of derivative securities, sponsors counsel, on the tax-exempt status of interest on municipal bonds and payments under derivative securities. Neither the Fund nor its investment manager will independently review the bases for those tax opinions, which may ultimately be determined to be incorrect and subject the Fund and its shareholders to substantial tax liabilities. </li></ul><ul type="square"><li>Prepayment and Extension Risk — When interest rates fall, an issuer may redeem a security with call features by repaying it early, and the Fund may have to invest the proceeds in securities with lower yields. When interest rates rise, certain obligations will be paid off by the issuer more slowly than anticipated, causing the value of these securities to fall. </li></ul><ul type="square"><li>Variable Rate Demand Obligations Risks — Variable rate demand obligations are floating rate securities that combine an interest in a long term municipal bond with a right to demand payment before maturity from a bank or other financial institution. If the bank or financial institution is unable to pay, the Fund may lose money.</li></ul> Under normal circumstances, the Short-Term Fund seeks to achieve its objective by investing at least 80% of its assets in municipal bonds. Municipal bonds include debt obligations issued by or on behalf of a governmental entity or other qualifying issuer that pay interest that is, in the opinion of bond counsel to the issuer, generally excludable from gross income for Federal income tax purposes (except that the interest may be includable in taxable income for purposes of the Federal alternative minimum tax). Municipal bonds may be obligations of a variety of issuers, including governmental entities or other qualifying issuers. Issuers may be states, territories and possessions of the United States and the District of Columbia and their political subdivisions, agencies and instrumentalities. Municipal bonds also include short-term tax-exempt obligations like municipal notes and variable rate demand obligations. The Short-Term Fund invests primarily in investment grade municipal bonds or municipal notes, including variable rate demand obligations. Investment grade bonds are securities which are rated in the four highest categories by at least one of the major rating agencies or determined by the management team to be of similar quality. Generally, the higher the rating of a bond, the higher the likelihood that interest and principal payments will be made on time. Municipal notes are shorter-term municipal debt obligations that pay interest that is, in the opinion of bond counsel to the issuer, generally excludable from gross income for Federal income tax purposes (except that the interest may be includable in taxable income for purposes of the Federal alternative minimum tax) and that have a maturity that is generally one year or less. The Fund will maintain a dollar weighted maturity of no more than two years. Because of their shorter maturities, the Funds investments will not usually be as sensitive to changes in prevailing interest rates as are long-term municipal bonds. Fluctuations in interest rates on short-term municipal bonds may, however, vary more widely from time to time than those on long-term municipal bonds. 2008-12-31 0.0165 2004-06-30 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 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. 0.0039 0 0.0054 125 271 2008-12-31 0.0165 lowest return 2010-12-31 0.0219 0.0219 0.0219 0.0535 0.0316 Investment Objective Investment Objective Fees and Expenses of the Fund Fees and Expenses of the Fund Portfolio Turnover: November 1, 2013 0 0.045 0.01 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>Credit Risk 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 issuers credit rating or the markets perception of an issuers creditworthiness may also affect the value of the Funds investment in that issuer. </li></ul><ul type="square"><li>Interest Rate Risk 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>Leverage Risk 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 Funds portfolio will be magnified when the Fund uses leverage. </li></ul><ul type="square"><li>Liquidity Risk Liquidity risk exists when particular investments are difficult to purchase or sell. The Funds 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 Funds 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>Market Risk and Selection Risk 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>Municipal Securities Risks Municipal securities risks include the ability of the issuer to repay the obligation, the relative lack of information about certain issuers of municipal securities, and the possibility of future legislative changes which could affect the market for and value of municipal securities. These risks include: General Obligation Bonds Risks Timely payments depend on the issuers credit quality, ability to raise tax revenues and ability to maintain an adequate tax base. Revenue Bonds Risks These payments depend on the money earned by the particular facility or class of facilities, or the amount of revenues derived from another source. Private Activity Bonds Risks Municipalities and other public authorities issue private activity bonds to finance development of industrial facilities for use by a private enterprise. The private enterprise pays the principal and interest on the bond, and the issuer does not pledge its faith, credit and taxing power for repayment. Moral Obligation Bonds Risks Moral obligation bonds are generally issued by special purpose public authorities of a state or municipality. If the issuer is unable to meet its obligations, repayment of these bonds becomes a moral commitment, but not a legal obligation, of the state or municipality. Municipal Notes Risks Municipal notes are shorter term municipal debt obligations. If there is a shortfall in the anticipated proceeds, the notes may not be fully repaid and the Fund may lose money. Municipal Lease Obligations Risks In a municipal lease obligation, the issuer agrees to make payments when due on the lease obligation. Although the issuer does not pledge its unlimited taxing power for payment of the lease obligation, the lease obligation is secured by the leased property. Tax-Exempt Status Risk The Fund and its investment manager will rely on the opinion of issuers bond counsel and, in the case of derivative securities, sponsors counsel, on the tax-exempt status of interest on municipal bonds and payments under derivative securities. Neither the Fund nor its investment manager will independently review the bases for those tax opinions, which may ultimately be determined to be incorrect and subject the Fund and its shareholders to substantial tax liabilities. </li></ul><ul type="square"><li>Prepayment and Extension Risk When interest rates fall, an issuer may redeem a security with call features by repaying it early, and the Fund may have to invest the proceeds in securities with lower yields. When interest rates rise, certain obligations will be paid off by the issuer more slowly than anticipated, causing the value of these securities to fall. </li></ul><ul type="square"><li>Variable Rate Demand Obligations Risks Variable rate demand obligations are floating rate securities that combine an interest in a long term municipal bond with a right to demand payment before maturity from a bank or other financial institution. If the bank or financial institution is unable to pay, the Fund may lose money. </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. 0.0369 0.037 0.0153 0.0008 0.0006 0.0064 0.0008 0.0008 0.0036 0.0008 However, the table includes all applicable fees and sales charges. 0.0194 0.0146 November 1, 2013 0.038 0.0375 0.0165 197 Portfolio Turnover: 0.024 0.0535 0.0238 0.0316 You would pay the following expenses if you did not redeem your shares: 959 454 Under normal circumstances, the National Fund seeks to achieve its objective by investing at least 80% of its assets in municipal bonds. Municipal bonds include debt obligations issued by or on behalf of a governmental entity or other qualifying issuer that pay interest that is, in the opinion of bond counsel to the issuer, generally excludable from gross income for Federal income tax purposes (except that the interest may be includable in taxable income for purposes of the Federal alternative minimum tax). Municipal bonds may be obligations of a variety of issuers, including governmental entities or other qualifying issuers. Issuers may be states, territories and possessions of the United States and the District of Columbia and their political subdivisions, agencies and instrumentalities. Municipal bonds also include short-term tax-exempt obligations like municipal notes and variable rate demand obligations. The Fund may invest in municipal bonds rated in any rating category or in unrated municipal bonds. Although Fund management presently intends to invest at least 65% of the Funds net assets in municipal bonds rated investment grade or in unrated municipal bonds that Fund management believes are of comparable quality, it is possible that in the future the Fund could invest up to 100% of its assets in junk bonds. Investment grade bonds are securities which are rated in the four highest categories by at least one of the major rating agencies or determined by the management team to be of similar quality. The Fund does not intend to invest more than 35% of its net assets in junk bonds or in unrated bonds that Fund management believes are of comparable quality. This is a non-fundamental policy and may be changed by the Board at any time. The Fund will usually invest in municipal bonds that have a maturity of five years or longer. The Fund may engage in transactions in certain derivatives, such as financial futures contracts and options thereon, indexed and inverse floating rate obligations and swap agreements, including credit default swap agreements. The Fund may use derivative instruments to hedge its investments or to seek to enhance returns. The Fund may invest in tender option bonds and residual interest tender option bonds, and may also invest in securities the return of which is inversely related to changes in an interest rate (inverse floaters). The Fund will look through to the underlying municipal bond held by a tender option bond trust for purposes of the Funds 80% policy. 140 197 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>Credit Risk — 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 issuers credit rating or the markets perception of an issuers creditworthiness may also affect the value of the Funds investment in that issuer.</li></ul><ul type="square"><li> Derivatives Risk — The Funds use of derivatives may reduce the Funds 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 Funds 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>Interest Rate Risk — 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>Junk Bonds Risk — Although junk bonds generally pay higher rates of interest than investment grade bonds, junk bonds are high risk investments that may cause income and principal losses for the Fund. </li></ul><ul type="square"><li>Leverage Risk — 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 Funds portfolio will be magnified when the Fund uses leverage. </li></ul><ul type="square"><li>Liquidity Risk — Liquidity risk exists when particular investments are difficult to purchase or sell. The Funds 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 Funds 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>Market Risk and Selection Risk — 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>Municipal Securities Risks — Municipal securities risks include the ability of the issuer to repay the obligation, the relative lack of information about certain issuers of municipal securities, and the possibility of future legislative changes which could affect the market for and value of municipal securities. These risks include: General Obligation Bonds Risks — Timely payments depend on the issuers credit quality, ability to raise tax revenues and ability to maintain an adequate tax base. Revenue Bonds Risks — These payments depend on the money earned by the particular facility or class of facilities, or the amount of revenues derived from another source. Private Activity Bonds Risks — Municipalities and other public authorities issue private activity bonds to finance development of industrial facilities for use by a private enterprise. The private enterprise pays the principal and interest on the bond, and the issuer does not pledge its faith, credit and taxing power for repayment. Moral Obligation Bonds Risks — Moral obligation bonds are generally issued by special purpose public authorities of a state or municipality. If the issuer is unable to meet its obligations, repayment of these bonds becomes a moral commitment, but not a legal obligation, of the state or municipality. Municipal Notes Risks — Municipal notes are shorter term municipal debt obligations. If there is a shortfall in the anticipated proceeds, the notes may not be fully repaid and the Fund may lose money. Municipal Lease Obligations Risks — In a municipal lease obligation, the issuer agrees to make payments when due on the lease obligation. Although the issuer does not pledge its unlimited taxing power for payment of the lease obligation, the lease obligation is secured by the leased property. Tax-Exempt Status Risk — The Fund and its investment manager will rely on the opinion of issuers bond counsel and, in the case of derivative securities, sponsors counsel, on the tax-exempt status of interest on municipal bonds and payments under derivative securities. Neither the Fund nor its investment manager will independently review the bases for those tax opinions, which may ultimately be determined to be incorrect and subject the Fund and its shareholders to substantial tax liabilities. </li></ul><ul type="square"><li>Prepayment and Extension Risk — When interest rates fall, an issuer may redeem a security with call features by repaying it early, and the Fund may have to invest the proceeds in securities with lower yields. When interest rates rise, certain obligations will be paid off by the issuer more slowly than anticipated, causing the value of these securities to fall. </li></ul><ul type="square"><li>Tender Option Bonds and Related Securities Risk — Investments in tender option bonds, residual interest tender option bonds and inverse floaters expose the Fund to the same risks as investments in derivatives, as well as risks associated with leverage, described above, especially the risk of increased volatility. An investment in these securities typically will involve greater risk than an investment in a municipal fixed rate security, including the risk of loss of principal. Distributions on residual interest tender option bonds and inverse floaters will bear an inverse relationship to short-term municipal security interest rates. Distributions on the residual interests and inverse floaters paid to the Fund will be reduced or, in the extreme, eliminated as short-term municipal interest rates rise and will increase when short-term municipal interest rates fall. Residual interest tender option bonds and inverse floaters generally will underperform the market for fixed rate municipal securities in a rising interest rate environment. </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. Under normal circumstances, the National Fund seeks to achieve its objective by investing at least 80% of its assets in municipal bonds. Municipal bonds include debt obligations issued by or on behalf of a governmental entity or other qualifying issuer that pay interest that is, in the opinion of bond counsel to the issuer, generally excludable from gross income for Federal income tax purposes (except that the interest may be includable in taxable income for purposes of the Federal alternative minimum tax). Municipal bonds may be obligations of a variety of issuers, including governmental entities or other qualifying issuers. Issuers may be states, territories and possessions of the United States and the District of Columbia and their political subdivisions, agencies and instrumentalities. Municipal bonds also include short-term tax-exempt obligations like municipal notes and variable rate demand obligations. The Fund may invest in municipal bonds rated in any rating category or in unrated municipal bonds. Although Fund management presently intends to invest at least 65% of the Funds net assets in municipal bonds rated investment grade or in unrated municipal bonds that Fund management believes are of comparable quality, it is possible that in the future the Fund could invest up to 100% of its assets in junk bonds. Investment grade bonds are securities which are rated in the four highest categories by at least one of the major rating agencies or determined by the management team to be of similar quality. The Fund does not intend to invest more than 35% of its net assets in junk bonds or in unrated bonds that Fund management believes are of comparable quality. This is a non-fundamental policy and may be changed by the Board at any time. The Fund will usually invest in municipal bonds that have a maturity of five years or longer. The Fund may engage in transactions in certain derivatives, such as financial futures contracts and options thereon, indexed and inverse floating rate obligations and swap agreements, including credit default swap agreements. The Fund may use derivative instruments to hedge its investments or to seek to enhance returns. The Fund may invest in tender option bonds and residual interest tender option bonds, and may also invest in securities the return of which is inversely related to changes in an interest rate (inverse floaters). The Fund will look through to the underlying municipal bond held by a tender option bond trust for purposes of the Funds 80% policy. 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. 0.024 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>Credit Risk — 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 issuers credit rating or the markets perception of an issuers creditworthiness may also affect the value of the Funds investment in that issuer.</li></ul><ul type="square"><li> Derivatives Risk — The Funds use of derivatives may reduce the Funds 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 Funds 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>Interest Rate Risk — 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>Junk Bonds Risk — Although junk bonds generally pay higher rates of interest than investment grade bonds, junk bonds are high risk investments that may cause income and principal losses for the Fund. </li></ul><ul type="square"><li>Leverage Risk — 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 Funds portfolio will be magnified when the Fund uses leverage. </li></ul><ul type="square"><li>Liquidity Risk — Liquidity risk exists when particular investments are difficult to purchase or sell. The Funds 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 Funds 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>Market Risk and Selection Risk — 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>Municipal Securities Risks — Municipal securities risks include the ability of the issuer to repay the obligation, the relative lack of information about certain issuers of municipal securities, and the possibility of future legislative changes which could affect the market for and value of municipal securities. These risks include: General Obligation Bonds Risks — Timely payments depend on the issuers credit quality, ability to raise tax revenues and ability to maintain an adequate tax base. Revenue Bonds Risks — These payments depend on the money earned by the particular facility or class of facilities, or the amount of revenues derived from another source. Private Activity Bonds Risks — Municipalities and other public authorities issue private activity bonds to finance development of industrial facilities for use by a private enterprise. The private enterprise pays the principal and interest on the bond, and the issuer does not pledge its faith, credit and taxing power for repayment. Moral Obligation Bonds Risks — Moral obligation bonds are generally issued by special purpose public authorities of a state or municipality. If the issuer is unable to meet its obligations, repayment of these bonds becomes a moral commitment, but not a legal obligation, of the state or municipality. Municipal Notes Risks — Municipal notes are shorter term municipal debt obligations. If there is a shortfall in the anticipated proceeds, the notes may not be fully repaid and the Fund may lose money. Municipal Lease Obligations Risks — In a municipal lease obligation, the issuer agrees to make payments when due on the lease obligation. Although the issuer does not pledge its unlimited taxing power for payment of the lease obligation, the lease obligation is secured by the leased property. Tax-Exempt Status Risk — The Fund and its investment manager will rely on the opinion of issuers bond counsel and, in the case of derivative securities, sponsors counsel, on the tax-exempt status of interest on municipal bonds and payments under derivative securities. Neither the Fund nor its investment manager will independently review the bases for those tax opinions, which may ultimately be determined to be incorrect and subject the Fund and its shareholders to substantial tax liabilities. </li></ul><ul type="square"><li>Prepayment and Extension Risk — When interest rates fall, an issuer may redeem a security with call features by repaying it early, and the Fund may have to invest the proceeds in securities with lower yields. When interest rates rise, certain obligations will be paid off by the issuer more slowly than anticipated, causing the value of these securities to fall. </li></ul><ul type="square"><li>Tender Option Bonds and Related Securities Risk — Investments in tender option bonds, residual interest tender option bonds and inverse floaters expose the Fund to the same risks as investments in derivatives, as well as risks associated with leverage, described above, especially the risk of increased volatility. An investment in these securities typically will involve greater risk than an investment in a municipal fixed rate security, including the risk of loss of principal. Distributions on residual interest tender option bonds and inverse floaters will bear an inverse relationship to short-term municipal security interest rates. Distributions on the residual interests and inverse floaters paid to the Fund will be reduced or, in the extreme, eliminated as short-term municipal interest rates rise and will increase when short-term municipal interest rates fall. Residual interest tender option bonds and inverse floaters generally will underperform the market for fixed rate municipal securities in a rising interest rate environment. </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. 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. However, the table includes all applicable fees and sales charges. 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. 2009-09-30 0.0742 lowest return 2008-12-31 0.0855 -0.093 0.1076 0.0904 2009-09-30 0.0739 lowest return 2010-12-31 -0.0887 0.1136 0.0466 0.0466 0.046 0.0447 0.0535 0.0478 0.0476 0.0535 0.0562 0.0478 However, the table includes all applicable fees and sales charges. For the year ended June 30, 2012, the Investor B1 Shares did not pay distribution fees due to regulatory fee limits. The Total Annual Fund Operating Expenses have been restated to reflect as if the distribution fees had been paid. The investment objective of the BlackRock National Municipal Fund (the National Fund or the Fund) is to provide shareholders with as high a level of income exempt from Federal income taxes as is consistent with the investment policies of the Fund. The investment objective of the BlackRock National Municipal Fund (the Fund) is to provide shareholders with as high a level of income exempt from Federal income taxes as is consistent with the investment policies of the Fund. The investment objective of the BlackRock Short-Term Municipal Fund (the Short-Term Fund or the Fund) is to provide shareholders with as high a level of income exempt from Federal income taxes as is consistent with the investment policies of the Fund. false 2012-10-26 2012-10-26 0.0048 0.0025 0.51 0.0018 0.0002 The investment objective of the BlackRock High Yield Municipal Fund (the High Yield Fund or the Fund) is to provide shareholders with as high a level of income exempt from Federal income taxes as is consistent with the investment policies of the Fund. Principal Risks of Investing in the Fund 0.0048 0.0048 0.0048 0.0048 0.0025 0.0075 0.01 0 0.0018 0.0021 0.0016 0.0021 0.0002 0.0002 0.0002 0.0002 0.0033 0.0033 0.0033 0.0033 0.0082 0.0133 0.0157 0.0071 0.0025 0.0035 0.01 0 0.0008 0.0016 0.0011 0.0017 1143 0.0055 0.0055 0.0055 0.0025 0.01 0 0.0026 0.0027 0.0024 0.0001 0.0001 0.0001 1098 1037 1724 628 268 456 0.39 Principal Risks of Investing in the Fund 1675 2148 990 576 0.17 Principal Risks of Investing in the Fund Performance Information The information shows you how the Funds performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Funds performance to that of the S&P Municipal Bond Index and the S&P Limited Maturity Municipal Bond Index, which are relevant to the Fund because they have characteristics similar to the Funds investment strategies. Prior to the Investor A and Investor C Shares inception date of October 2, 2006, the returns for Investor A and Investor C Shares are based on the performance of the Institutional Shares adjusted to reflect the distribution and service (12b-1) fees applicable to Investor A and Investor C 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 Funds investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Funds returns would have been lower. Updated information on the Funds performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052. <center>Institutional Shares ANNUAL TOTAL RETURNS BlackRock Short-Term Municipal Fund As of 12/31 As with all such investments, past performance (before and after taxes) is not an indication of future results. 0.39 1510 1735 1958 883 Performance Information The information shows you how the Funds performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Funds performance to that of the S&P Municipal Bond Index and the S&P Customized High Yield Municipal Bond Index, which are relevant to the Fund because they have characteristics similar to the Funds investment strategies. 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 Funds investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Funds returns would have been lower. Updated information on the Funds performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. After-tax returns are shown for Institutional Shares only, and the after-tax returns for Investor A, Investor B and Investor C Shares will vary. 449 515 <center>Institutional Shares ANNUAL TOTAL RETURNS BlackRock High Yield Municipal Fund As of 12/31 Performance Information Service Shares commenced operations on July 18, 2011. As a result, the chart gives you a picture of the long-term performance of the Fund for Investor A Shares, which are not offered in this prospectus. Investor A Shares would have annual returns substantially similar to Service Shares differing only to the extent that Investor A and Service Shares have different expenses. The actual return of Service Shares would be similar to that of Investor A Shares because Service Shares are subject to the same distribution and/or service (12b-1) fees as Investor A Shares. The information shows you how the Funds performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Funds performance to that of the S&P Municipal Bond Index. Prior to the Service Shares inception date of July 18, 2011, the returns for Service Shares are based on the Funds 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 Funds investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Funds returns would have been lower. Updated information on the Funds performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052. -0.0588 0.3876 0.056 year-to-date return highest return -0.0037 Principal Risks of Investing in the Fund As with all such investments, past performance (before and after taxes) is not an indication of future results. <center>Investor A Shares ANNUAL TOTAL RETURNS BlackRock National Municipal Fund As of 12/31 year-to-date return highest return 0.0175 0.0175 0.0154 -0.0167 0.0033 -0.0042 0.1062 0.025 -0.0466 0.0277 0.0277 0.0269 0.0188 0.0238 0.0172 0.0486 0.0357 0.0532 0.0444 0.0522 0.0134 0.1756 0.0294 0.0072 0.014 0.0285 0.0397 0.0372 0.0065 Performance Information The information shows you how the Funds performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Funds performance to that of the S&P Municipal Bond Index. Prior to the Investor C Shares inception date of October 2, 2006, the returns for Investor C Shares are based on the performance of the Institutional Shares adjusted to reflect the distribution and service (12b-1) fees applicable to Investor C 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 Funds investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Funds returns would have been lower. Updated information on the Funds performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052. 0.0663 0.0663 0.0591 0.1143 0.1062 0.0357 0.0357 0.0367 0.0447 0.0486 year-to-date return highest return As with all such investments, past performance (before and after taxes) is not an indication of future results. -0.1935 <center>Investor A Shares ANNUAL TOTAL RETURNS BlackRock National Municipal Fund As of 12/31 Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. 0.1213 0.1213 0.0991 0.0709 0.0998 0.1062 0.1013 0.0235 0.0233 0.027 0.0119 0.0132 0.0486 0.0243 0.0284 0.0282 0.0311 0.018 0.0171 0.0512 0.0305 After-tax returns are shown for Investor A Shares only, and the after-tax returns for Service Shares will vary. 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. 0.0532 0.0444 0.0522 0.0134 0.1756 0.0294 <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleTransposedBlackRockShort-TermMunicipalFund column period compact * ~</div> highest return -0.0466 year-to-date return <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleNoRedemptionTransposedBlackRockShort-TermMunicipalFund column period compact * ~</div> 0.0663 0.0663 0.0591 0.0688 0.0954 0.1158 0.1062 <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBlackRockShort-TermMunicipalFund column period compact * ~</div> 0.0357 0.0357 0.0367 0.0361 0.0368 0.0471 0.0486 After-tax returns are shown for Institutional Shares only, and the after-tax returns for Investor A Shares and Investor C Shares will vary. <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleTransposedBlackRockHighYieldMunicipalFund column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleNoRedemptionTransposedBlackRockHighYieldMunicipalFund column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBlackRockHighYieldMunicipalFund column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleTransposedBlackRockNationalMunicipalFundserviceshares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBlackRockNationalMunicipalFundserviceshares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleTransposedBlackRockNationalMunicipalFund column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBlackRockNationalMunicipalFund column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleNoRedemptionTransposedBlackRockNationalMunicipalFund column period compact * ~</div> 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. Principal Risks of Investing in the Fund Performance Information <center>BlackRock Shares ANNUAL TOTAL RETURNS BlackRock Short-Term Municipal Fund As of 12/31 year-to-date return highest return The investment objective of the BlackRock Short-Term Municipal Fund (the Short-Term Fund or the Fund) is to provide shareholders with as high a level of income exempt from Federal income taxes as is consistent with the investment policies of the Fund. The investment objective of the BlackRock Short-Term Municipal Fund (the Short-Term Fund or the Fund) is to provide shareholders with as high a level of income exempt from Federal income taxes as is consistent with the investment policies of the Fund. Principal Risks of Investing in the Fund Performance Information The information shows you how the Funds performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Funds performance to that of the S&P Municipal Bond Index and the S&P Limited Maturity Municipal Bond Index, which are relevant to the Fund because they have characteristics similar to the Funds investment strategies. 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 Funds investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Funds returns would have been lower. Updated information on the Funds performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052. <center>Investor A1 Shares ANNUAL TOTAL RETURNS BlackRock Short-Term Municipal Fund As of 12/31 0.51 -0.0037 0.51 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. 0.0033 0 0.0006 0.0033 0.001 0.0011 493 770 year-to-date return highest return -0.004 0.0051 0.0051 0.0069 0.1062 0.025 0.0243 0.0243 0.0239 0.0486 0.0357 The investment objective of the BlackRock National Municipal Fund (the National Fund or the Fund) is to provide shareholders with as high a level of income exempt from Federal income taxes as is consistent with the investment policies of the Fund. The investment objective of the BlackRock National Municipal Fund (the National Fund or the Fund) is to provide shareholders with as high a level of income exempt from Federal income taxes as is consistent with the investment policies of the Fund. 0.39 0.0062 0.012 0.0285 0.0387 0.036 0.0053 The information shows you how the Funds performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Funds performance to that of the S&P Municipal Bond Index and the S&P Limited Maturity Municipal Bond Index, which are relevant to the Fund because they have characteristics similar to the Funds investment strategies. The returns for BlackRock Shares prior to October 2, 2006, the commencement of operations of BlackRock Shares, are based upon performance of the Funds Institutional Shares and are adjusted to reflect class-specific fees applicable to BlackRock 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 Funds investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Funds returns would have been lower. Updated information on the Funds performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052. 0.0048 0 0.0014 0.0002 0.0056 0.0048 0.0048 0.008 0.0044 0.0016 0.0002 0.0002 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. 0.0194 0.0138 0.01 0.0072 0.014 0.0285 0.0404 0.0368 0.0065 791 0.0165 0.0165 0.0148 0.1062 0.025 0.0275 0.0275 0.0267 0.0486 0.0357 0.39 1878 1739 609 454 Principal Risks of Investing in the Fund Performance Information Principal Risks of Investing in the Fund BlackRock Shares commenced operations on July 18, 2011. As a result, the chart gives you a picture of the long-term performance of the Fund for Investor A Shares, which are not offered in this prospectus. Investor A Shares would have annual returns substantially similar to BlackRock Shares differing only to the extent that Investor A and BlackRock Shares have different expenses. The actual return of BlackRock Shares would generally be higher than that of Investor A Shares because BlackRock Shares are not subject to distribution and/or service (12b-1) fees. The information shows you how the Funds performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Funds performance to that of the S&P Municipal Bond Index. Prior to the BlackRock Shares inception date of July 18, 2011, the returns for BlackRock Shares are based on the Funds Institutional Shares adjusted to reflect the class-specific fees applicable to BlackRock 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 Funds investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Funds returns would have been lower. Updated information on the Funds 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/ScheduleExpenseExampleTransposedBlackRockShort-TermMunicipalFundinvestora1shares column period compact * ~</div> Performance Information <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBlackRockShort-TermMunicipalFundinvestora1shares column period compact * ~</div> 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. The information shows you how the Funds performance has varied year by year and provides some indication of the risks of investing in the Fund. The table compares the Funds performance to that of the S&P Municipal Bond Index. Prior to the Investor B1 Shares inception date of July 18, 2011, the returns for Investors B1 Shares are based on the Funds 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 Funds investment manager and its affiliates had not waived or reimbursed certain Fund expenses during these periods, the Funds returns would have been lower. Updated information on the Funds performance can be obtained by visiting http://www.blackrock.com/funds or can be obtained by phone at 800-882-0052. <center>Investor A Shares ANNUAL TOTAL RETURNS BlackRock National Municipal Fund As of 12/31 As with all such investments, past performance (before and after taxes) is not an indication of future results. <center>Investor C1 Shares ANNUAL TOTAL RETURNS BlackRock National Municipal Fund As of 12/31 Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. After-tax returns are shown for Investor A Shares only, and the after-tax returns for BlackRock Shares will vary. <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleTransposedBlackRockShort-TermMunicipalFundblackrock column period compact * ~</div> 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. After-tax returns are shown for Investor C1 Shares only, and the after-tax returns for Investor B1 Shares will vary. year-to-date return <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBlackRockShort-TermMunicipalFundblackrock column period compact * ~</div> highest return -0.0466 0.0464 0.0396 0.0453 0.0077 0.1693 0.0228 highest return 0.0532 0.0444 -0.0482 0.0522 0.0134 year-to-date return 0.1756 0.0294 0.0976 0.0976 0.0782 0.0629 0.1062 0.039 0.039 0.0388 0.0339 0.0486 0.0663 0.0663 0.0591 0.1168 0.1062 0.0357 0.0357 0.0367 0.0484 0.0486 <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleTransposedBlackRockNationalMunicipalFundclassb1c1 column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleNoRedemptionTransposedBlackRockNationalMunicipalFundclassb1c1 column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleExpenseExampleTransposedBlackRockNationalMunicipalFundinvestorashares column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBlackRockNationalMunicipalFundclassb1c1 column period compact * ~</div> <div style="display:none">~ http://www.blackrock.com/role/ScheduleAverageAnnualTotalReturnsTransposedBlackRockNationalMunicipalFundinvestorashares column period compact * ~</div> BlackRock Shares commenced operations on July 18, 2011. Service Shares commenced operations on July 18, 2011. 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 Acquired Fund Fees and Expenses. A contingent deferred sales charge ("CDSC") of 1.00% is assessed on certain redemptions of Investor A Shares made within 18 months after purchase where no initial sales charge was paid at the time of purchase of an investment of $1,000,000 or more. The CDSC is 4.00% if shares are redeemed in less than two years. 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" for the complete schedule of CDSCs.) There is no CDSC on Investor C Shares after one year. A contingent deferred sales charge ("CDSC") of 0.50% is assessed on certain redemptions of Investor A Shares made within 18 months after purchase where no initial sales charge was paid at the time of purchase of an investment of $250,000 or more. The CDSC is 1.00% if shares are redeemed in less than one year. The CDSC for Investor B Shares decreases for redemptions made in subsequent years. After three years there is no CDSC on Investor B Shares. (See the section "Details about the Share Classes - Investor B Shares" for the complete schedule of CDSCs.) As described in the "Management of the Funds" section of the Fund's prospectus on page 46, 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 0.72% (for Investor A Shares), 1.23% (for Investor B Shares) and 1.47% (for Investor C Shares) of average daily net assets until November 1, 2013. The contractual agreement may be terminated upon 90 days' notice by a majority of the non-interested directors of the Fund or by a vote of a majority of the outstanding voting securities of the Fund. A contingent deferred sales charge ("CDSC") of 4.50% is assessed if shares are redeemed in less than one year. 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" for the complete schedule of CDSCs.) There is no CDSC on Investor C1 Shares after one year. For the year ended June 30, 2012, the Investor B1 Shares did not pay distribution fees due to regulatory fee limits. The Total Annual Fund Operating Expenses have been restated to reflect as if the distribution fees had been paid. As described in the "Management of the Funds" section of the Fund's prospectus on page 26, 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 0.46% of average daily net assets until November 1, 2013. The contractual agreement may be terminated upon 90 days' notice by a majority of the non-interested directors 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 31, 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 1.28% (for Investor C1 Shares) of average daily net assets until November 1, 2013. The contractual agreement may be terminated upon 90 days' notice by a majority of the non-interested directors of the Fund or by a vote of a majority of the outstanding voting securities of the Fund.