In the fourth quarter of 2025, the BlackRock International Fund's returns for Institutional shares were 4.09%, and for Investor A shares (excluding sales charges) were 4.00%. Despite these positive figures, the fund's overall performance fell short of its benchmark. This underperformance was mainly attributed to specific stock choices within the industrials, materials, and information technology sectors. Conversely, strong contributions from financials and healthcare sectors provided some offset. Notably, SK Hynix significantly boosted returns, benefiting from robust memory chip demand driven by artificial intelligence infrastructure and its strong market position. In contrast, Sony's performance was hindered by concerns over rising memory chip prices impacting its profit margins, following a period of strong growth.

Looking forward to 2026, the fund's strategy is influenced by anticipated global economic shifts. We foresee a more widespread economic recovery, which is expected to create a more dynamic market environment. Additionally, projections suggest a weakening U.S. dollar and a reduction in bond yields, factors that traditionally favor international equity markets. The fund maintains an overweight position in European markets, as well as in the financial, consumer discretionary, and communication services sectors. Conversely, it holds an underweight stance in Asian and emerging markets, along with the consumer staples, utilities, and real estate sectors.

These strategic allocations and a detailed understanding of market dynamics are crucial for navigating the evolving economic landscape. The fund aims to capitalize on these trends to enhance returns, reflecting a commitment to informed investment decisions and adapting to global economic changes.