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The BlackRock International V.I. Fund concluded the fourth quarter of 2025 with a notable return of 4.03% for its Class I shares, yet it registered an underperformance against its designated benchmark. This disparity primarily stemmed from specific stock selections within the materials, industrials, and information technology sectors. However, positive contributions from the financials and health care sectors provided some offset, demonstrating a mixed but strategically balanced portfolio performance during the period.

Looking ahead to 2026, the fund's strategic allocation emphasizes an overweight position in Europe, financials, consumer discretionary, and communication services, while being underweight in Asia, emerging markets, consumer staples, utilities, and real estate. This positioning is predicated on an anticipated favorable environment for 'carry countries,' aligning with expectations for a weaker U.S. dollar and reduced bond yields. These macroeconomic conditions are projected to bolster international equities, indicating a forward-looking strategy that seeks to capitalize on global economic shifts.

Despite the recent underperformance, the fund's long-term investment thesis remains robust, particularly given the expectation of a broadened economic recovery in 2026. The continued influence of technology as a dominant market driver is also a central tenet of this outlook. This strategic foresight highlights a commitment to leveraging global trends and sector-specific strengths to achieve sustained growth and navigate evolving market dynamics effectively.

The current financial landscape underscores the critical importance of adaptable investment strategies that anticipate and respond to global economic shifts. By continuously evaluating sector performance and macroeconomic indicators, investors can refine their portfolios to align with positive market forces, fostering resilience and growth in an ever-changing world.