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In the final quarter of 2025, the BlackRock Systematic Multi-Strategy Fund recorded notable returns, with Institutional shares yielding 1.78% and Investor A shares (without sales charge) achieving 1.67%. The fund's diverse strategic approaches saw varied outcomes, as certain components propelled growth while others faced headwinds. Despite these challenges, the fund demonstrated resilience against bond market benchmarks, although it did not match the robust performance of the S&P 500 Index.

During the fourth quarter of 2025, the fund's investment strategies demonstrated a mixed performance landscape. The Directional Asset Allocation (DAA) strategy, which aims to dynamically adjust asset exposures based on market conditions, proved beneficial, contributing positively to overall returns. Similarly, the Defensive Equity Long/Short strategy, designed to capitalize on both rising and falling stock prices while mitigating risk, also added value. These strategies collectively underscored the fund's ability to generate returns through diversified approaches.

However, the Macro strategy encountered difficulties, primarily attributed to inflationary pressures and the intricate dynamics of cross-sectional rate strategies. These factors created an challenging environment, causing this segment of the fund to detract from the overall performance. The period was characterized by fluctuating economic indicators that impacted interest rate sensitive investments, highlighting the complexities inherent in macroeconomic forecasting and positioning.

Comparing its performance to market benchmarks, the BlackRock Systematic Multi-Strategy Fund successfully surpassed the Bloomberg U.S. Aggregate Bond Index and the Bloomberg U.S. High-Yield Bond Index. This outperformance in the fixed-income space suggests effective management of credit and duration risks within its bond allocations. Nevertheless, the fund's returns were below those of the S&P 500 Index, indicating that equity market growth, particularly in large-cap U.S. stocks, outpaced the multi-strategy approach during this quarter.

The fund's performance in Q4 2025 illustrates the intricate balance of its multi-strategy framework, where the strengths of some components offset the weaknesses of others. While the Directional Asset Allocation and Defensive Equity Long/Short strategies provided positive momentum, the Macro strategy faced headwinds from inflation and rate volatility. This dynamic interplay resulted in solid returns relative to bond markets but a lag compared to the S&P 500, underscoring the continuous adaptation required in a diversified investment portfolio.