BlackRock Technology Opportunities Fund Q2 2024 Commentary

BlackRock

9–12 minutes

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Average annual total returns (%) as of 6/30/24

2Q24 (not annualized)	YTD (not annualized)	1 Year	3 Year	5 Years	10 Years
Institutional ( MUTF: BGSIX )	10.23	26.56	40.34	2.81	19.33	19.86
Investor A (Without Sales Charge)	10.16	26.39	39.99	2.55	19.03	19.55
Investor A (With Sales Charge)	4.38	19.76	32.64	0.73	17.75	18.90

Expenses for Institutional shares: Total 0.98% ; Net, Including Investment Related Expenses (dividend expense, interest expense, acquired fund fees and expenses and certain other fund expenses) 0.92% . For Investor A shares: Total 1.23% ; Net, Including Investment Related Expenses 1.17% . Institutional and Investor A shares have contractual waivers with an end date of 06/30/2025 terminable upon 90 days' notice. For certain share classes, BlackRock may voluntarily agree to waive certain fees and expenses in which the adviser may discontinue at any time without notice. Expenses stated as of the fund's most recent prospectus. Data represents past performance and is no guarantee of future results. Investment returns and principal values may fluctuate so that an investor s shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvestment of dividends and capital gains. Current performance may be lower or higher than that shown. Refer to Investment Management & Financial Services | BlackRock for most recent month-end performance. Investment returns reflect total fund operating expenses, net of all fees, waivers and/or expense reimbursements. Index performance is shown for illustrative purposes only. It is not possible to invest directly in an unmanaged index. Share classes have different sales charges, fees and other features. Returns with sales charge reflect deduction of current maximum initial sales charge of 5.25% for Investor A shares. Institutional shares have no front- or back-end load. Institutional shares have limited availability and may be purchased at various minimums. See prospectus for details. Net Expenses Excluding Investment Related Expenses for Institutional shares: 0.92% ; for Investor A shares: 1.17% .

Commentary as of 06/30/24

The fund posted returns of 10.23% (Institutional shares) and 10.16% (Investor A shares, without sales charge) for the second quarter of 2024. The fund outperformed its benchmark during the quarter, primarily driven by security selection. The fund increased its exposure to the semiconductor and hardware industries, while taking profits on select software stocks. It added to companies involved in artificial intelligence ('AI') infrastructure, including power solutions for data centers.

Top 10 holdings (%)

Nvidia Corporation ( NVDA )	15.15
Microsoft ( MSFT )	9.41
Apple ( AAPL )	7.41
Broadcom Inc ( AVGO )	4.04
Cadence Design Systems Inc ( CDNS )	3.19
ASML Holding ( ASML )	2.82
Meta Platforms Inc ( META )	2.81
Amazon.com ( AMZN )	2.44

Contributors

Security selection within the semiconductor industry contributed to relative performance. On a stock-specific basis, an overweight position in Nvidia was the largest contributor to relative returns. Investor sentiment toward the stock continued to improve as the semiconductor design company announced its latest generation of graphics processing unit (GPU) chips for AI data center customers. A lack of exposure to Intel contributed to relative performance after the company announced disappointing revenue guidance that weighed on the stock.

Detractors

An off-benchmark allocation to the internet industry weighed on active returns. On a stock-specific basis, an underweight position in Taiwan Semiconductor Manufacturing ( TSM ) was the largest detractor from relative performance. The stock rose as the semiconductor manufacturer benefited from its role as the primary manufacturer of GPUs. An overweight position in MongoDB ( MDB ) was unhelpful as the software company reported a deceleration in growth and significantly lowered guidance.

Further insight

Today marks the early stages of the AI era, which will drive exponential growth and value creation in the technology sector and beyond, we believe. AI is the next frontier of innovation and may be one of the biggest singular technology trends that the global economy has ever seen. While the initial beneficiaries have been mega-cap technology companies building the physical infrastructure required to train generative AI models, we see a variety of opportunities in companies aligned with the theme. Elsewhere, we maintain our exposure to other long-term secular themes, such as cloud computing and electric vehicles.

Important Risks: The fund is actively managed and its characteristics will vary. Holdings shown should not be deemed as a recommendation to buy or sell securities. Stock and bond values fluctuate in price so the value of your investment can go down depending on market conditions. Investing in small-cap companies may entail greater risk than large-cap companies due to shorter operating histories, less seasoned management or lower trading volumes. Investing in mid-cap companies may entail greater risk than large-cap companies due to shorter operating histories, less seasoned management or lower trading volumes. Investments in technology industries may be affected by limited product lines, markets or financial resources. Technology industries are rapidly changing and stocks of these companies may be more volatile than the stock market in general. International investing involves special risks including, but not limited to political risks, currency fluctuations, illiquidity and volatility. These risks may be heightened for investments in emerging markets. The fund may use derivatives to hedge its investments or to seek to enhance returns. Derivatives entail risks relating to liquidity, leverage and credit that may reduce returns and increase volatility. Performance may be attributable to unusually high IPO profits. There is no guarantee this level of performance will be repeated. IPO securities have no trading history and the price may be volatile.

The opinions expressed are those of the fund's portfolio management team as of June 30, 2024, and may change as subsequent conditions vary. Information and opinions are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy.

BlackRock provides compensation in connection with obtaining or using third-party ratings and rankings.

1 Class R shares are sold to a limited group of investors, including certain retirement plans. See prospectus for details. 2 The MSCI ACWI Information Technology Index captures largeand mid-cap information-technology markets of developed countries. All securities in the index are classified in the Information Technology sector as per the Global Industry Classification Standard. †† The Morningstar Rating TM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchangetraded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.The fund was rated against the following numbers of U.S.-domiciled Technology funds over the following time periods:231 in the last 3 years, 201 in the last 5 years and 155 in the last 10 years. With respect to these Technology funds, the fund received a Morningstar Rating of 3, 3 and 4 stars for the 3-, 5- and 10-year periods, respectively.Other classes may have different performance characteristics.

You should consider the investment objectives, risks, charges and expenses of the fund carefully before investing. The prospectus and, if available, the summary prospectus contain this and other information about the fund and are available, along with information on other BlackRock funds, by calling 800-882-0052 or from your financial professional. The prospectus should be read carefully before investing.

Prepared by BlackRock Investments, LLC, member FINRA.

Not FDIC Insured • May Lose Value • No Bank Guarantee

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

This post originally appeared on BlackRock.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

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