BlackRock EuroFund Q2 2024 Commentary

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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:MAEFX)	-2.84	9.17	11.26	2.04	8.56	3.80
Investor A (Without Sales Charge)	-2.87	9.07	11.01	1.81	8.34	3.58
Investor A(With Sales Charge)	-7.97	3.35	5.18	-0.01	7.17	3.02
MSCI Europe 2	0.55	5.81	11.68	3.87	7.13	4.16

Expenses for Institutional shares: Total 1.48%; Net, Including Investment Related Expenses(dividend expense, interest expense, acquired fund fees and expenses and certain other fund expenses) 1.31%. For Investor A shares: Total 1.71%; Net, Including Investment Related Expenses 1.56%. 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: 1.31%; for Investor A shares: 1.56%.

Commentary as of 06/30/24

The fund posted returns of-2.84% (Institutional shares) and-2.87% (Investor A shares, without sales charge) for the second quarter of 2024. Eurozone equity markets weakened during the quarter as they faced some volatility, driven by stickier-than-expected U.S. inflation, mixed macroeconomic data, and a snap election in France. The first-quarter earnings season favored resilient companies adept at navigating weaker economic conditions. Turnover within the fund was very low. We built a position in Adidas, where brand momentum has started to improve after a few years of challenging performance, with the popularity of key franchises helping the top line and gross margin improve strongly. We closed the positions in Campari and Stellantis (STLA).

Top 10 holdings (%)

Contributors

The strongest relative performance came from the information technology sector. Stocks in the semiconductor& semiconductor equipment industry, such as ASM, ASML, and BE Semiconductor Industries (OTC:BESIY), were among the top contributors as they benefited from artificial intelligence(‘AI’) spending announcements. Another AI beneficiary, Schneider Electric, was a strong contributor. The fund’s positioning in the financials sector also aided returns. For example, Munich RE delivered encouraging first-quarter results that beat consensus expectations across all its business units. In the banks industry, Commerzbank (OTCPK:CRZBF), CaixaBank (OTCPK:CAIXY), and UniCredit contributed positively.

Detractors

The fund’s exposure to the industrials sector detracted from returns, largely driven by holdings in IMCD (OTCPK:IMCDY) and Airbus (OTCPK:EADSF). Shares of chemicals distribution business IMCD remained weak due to a difficult pricing environment and a lack of momentum as end markets recovered slowly. Airbus was challenged as it issued a profit warning. A few luxury stocks also weighed on returns, given suggestions of modestly weaker trading and concern about U.S. consumer strength, with LVMH, Hermes, and Moncler (OTCPK:MONRF) among the worst performers.

Further insight

As economic momentum gathers pace and company guidance strikes a more optimistic tone, Europe has come into the spotlight. The European Central Bank’s decision to cut interest rates was taken positively, though uncertainty persists about how quickly monetary policy will be further loosened. We continue to see a broad opportunity set in Europe, with a number of industries entering the early stages of a new cycle. Valuations are attractive versus history, especially compared with U.S. equities, we believe. Overall, evidence of a resilient consumer, healthy corporate sector, and a decent outlook underpinned by”green” stimulus should be supportive for the companies held in the fund.

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 condi- tions. 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.

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.

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1 Class R shares are sold to a limited group of investors, including certain retirement plans. See prospectus for details.

2 Morgan Stanley Capital International (MSCI) Europe Index is an unmanaged market-capitalization-weighted equity index composed of developed market Euopean equities.

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

07/24- EuroFund

This post originally appeared on BlackRock.

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

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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