BlackRock Global Funds - World Energy Fund D2 LU

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1 Page 1 of 9 Morningstar Category Sector Equity Energy Category Index MSCI World/Energy NR Total Assets 1, Mil Current Yield % 2.63 Inception Date 19/5/6 Domicile/ Currency LUX/ Morningstar Rating QQQ Equity Style Map Giant Large Mid Small K 1K Performance 3/6/18 Growth of 1, Annualized Value Ret % Fund 6, Category 6, Index 1, Full Manager Change Partial Manager Change Deep Value People Value Blend Growth High Growth Micro Alastair Bishop 11/15 Mark Hume 3/18 Total Named Managers 2 Morningstar Pillars Process p. 2-3 Performance p. 4 People p. 5 Parent p. 6 Price p. 7 Neutral Neutral Negative * ( & * ) & * ( * ( * 4K Morningstar Rating QQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQ QQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQ QQQQQQQQQQQQQQQQQQQQQQQQ QQQQQQQQ QQ Quartile Rank in Category Percentile Rank in Category % Total Return /- Category /- Index Process Equity Style Box Asset Allocation Stock Bond Cash Other Equity Supersectors m Cyclical w Sensitive x Defensive Price TER/OGC Analyst View Fatima Khizou, Senior Portfolio Manager A new team set-up for this strategy. The conduct of Morningstar's analysts is governed by Morningstar's Code of Ethics, Securities Trading and Disclosure Policy, and Morningstar Manager Research Integrity Policy. For informaton regarding conflicts of interest, please click Morningstar evaluates mutual funds based on five key pillars, which its analysts believe lead to funds that are more likely to outperform over the long term on a risk-adjusted basis. Analyst Rating Spectrum Œ Á The for Funds is a forward-looking analysis of a fund. Morningstar has identified five key areas crucial to predicting the future success of a fund: People, Parent, Process, Performance, and Price. The pillars are used in determining the for a fund. s are assigned on a five-tier scale running from Gold to Negative. The top three ratings, Gold, Silver, and Bronze, all indicate that our analysts think highly of a fund; the difference between them corresponds to differences in the level of analyst conviction in a fund s ability to outperform its benchmark and peers through time, within the context of the level of risk taken over the long term (defined as a full market cycle or at least five years). Neutral represents funds in which our analysts don t have a strong positive or negative conviction over the long term (defined as a full market cycle or at least five years) and Negative represents funds that possess at least one flaw that our analysts believe is likely to significantly hamper future performance over the long term (defined as a full market cycle or at least five years). Past performance of a security may or may not be sustained in future and is no indication of future performance. For detailed information about the Morningstar Analyst Rating for Funds, please visit 2 Nov, 217 BGF World Energy s several changes in the past two years and the limited portfolio management of its new leadership combined with high expenses sees us drop its Morningstar Analyst Rating to Neutral from Bronze. This fund is now led by Alastair Bishop, who became sole named manager in April 217, when longtime comanager Poppy Allonby decided to relinquish her portfolio management responsibilities. Bishop joined the team as an energy analyst in 21, and was appointed to the comanager role in November 215. In running this fund, he now works alongside the newly hired comanager Mark Hume who joined the group in September 217 from First State, where worked for seven years within its global resources team. This duo is supported by a team of two dedicated analysts who have been hired in the last two years. Though the strategy benefits now from more resources with deep knowledge of the energy sector, neither of the managers has much of a track record as a portfolio manager. Additionally, the overall set-up is relatively new and there are uncertainties concerning how well they will work together. The overall investment approach which combines top down, macro-orientated research, and bottom-up analysis has remained unchanged. The top-down analysis aims to identify trends that will impact the supply/demand balance of the underlying commodities, monitoring the political environment. At the company level, the focus is on companies with long-term growth that are trading at attractive valuations. A formal review of the process was undertaken in late 216, resulting in few enhancements to the top-down analysis and greater emphasis on fundamentals. In all, we view these changes positively as they should help the fund mitigate losses during challenging periods for the energy sector. The track record since Bishop has been involved through the end of September 217 is short. Over that period, the fund has marginally outperformed the Sector Equity Energy Morningstar Category but significantly lagged its benchmark. Weakness in returns was largely due to a poor first half of 217, weighed down by its overweight to the E&P sub-sector.

2 Page 2 of 9 Process: Approach Morningstar Category Category Index Index Proxy Sector Equity Energy MSCI World/Energy NR The overall investment approach is unchanged under the new set-up but there are uncertainties around its implementation. Process Pillar Equity Style 31/5/18 Holdings-Based Style Map Deep Value Value Blend Growth High Growth Equity Style Box Factors Giant Large Mid Small Micro Fund Centroid: Weighted average of equity holdings Zone: 75% of fund equity holdings Category Average Index Proxy Market Cap Fund 3-Yr Avg Category Proxy Giant/Large Mid Small/Micro Avg Market Cap Bil Value Measures Fund 3-Yr Avg Category Proxy Price/Prospect. Earnings Price/Book Price/Sales Price/Cash Flow Dividend Yield Growth Measures Fund 3-Yr Avg Category Proxy Long-Term Earnings % Historical Earnings % Sales % Cash Flow % Book-Value % Nov, 217 The approach combines top-down research and bottom-up analysis, with emphasis on the latter. The team seeks to identify trends that will impact the supply/demand balance of the underlying commodities, monitoring the political environment. Rigorous stock analysis complements the top-down assessment, with the managers aiming to identify firms with long-term growth prospects that have been undervalued by the market. Within this framework, meeting with management is key in addition to their valuation analysis, and they seek to identify catalysts for outperformance in their largest active positions relative to the benchmark. They will invest across the market spectrum and tend to hold on for longterm once they buy. They typically completely exit positions when valuations reflect expected catalysts, fundamentals deteriorate, or management Asset Allocation 31/5/18 Current Allocation 3-Year Average Net Assets % Fund 3-Yr Avg Category Proxy Equity Fixed Income...1 Cash Other..1. Regional Exposure 31/5/18 Market Type Equity % Fund 3-Yr Avg Category Proxy Developed Emerging Top 5 Countries Equity % Fund 3-Yr Avg Category Proxy United States United Kingdom Canada France Ghana Key Ratios 31/5/18 Fund 3-Yr Avg Category Proxy Net Margin % ROA % Debt/Total Capital % ROE % changes. A few enhancements have been made to the process in the last two years, which we view positively. These included dedicated research to the more cyclical areas of the energy space to react quicker to the turning points, more in-depth scenario analysis to enhance their topdown views, and a greater focus on fundamentals. Additionally, the number of holdings were reduced, and Bishop believes in running a more concentrated portfolio of 3-5 stocks. While the overall process has remained unchanged, there are uncertainties around its implementation. Sectors 31/5/18 Sector Delta Defensive Sensitive Cyclical Fund Index Larger sector concentrations versus the index move the investment to the corner of the triangle corresponding to that equity Super Sector. Equity Sectors Fund 3-Yr Avg Category Proxy xdefensive sconsumer Defensive...1 dhealthcare...3 futilities wsensitive icommunication Serv....1 oenergy pindustrials atechnology...7 mcyclical rbasic Materials tconsumer Cyclical...6 yfinancial Services...4 ureal Estate... Economic Moat 31/5/18 Fund 3-Yr Avg Category Proxy Wide Moat Narrow Moat No Moat Coverage Ratio

3 Page 3 of 9 Process: Portfolio Morningstar Category Category Index Index Proxy Sector Equity Energy MSCI World/Energy NR A greater emphasis on quality across the portfolio. A preference for exploration & production and oil services companies, particularly U.S. names. Process Pillar 2 Nov, 217 The portfolio is typically diversified across six subsectors: integrated energy, oil and gas E&P, oil and gas services, refining, distribution, and alternative energy (although this will only ever be a small part of the portfolio s assets). The top-down overlay will play a significant role Similarity to Index Proxy 31/3/18 when the team has a strong view on the economic and energy cycles, which will be reflected in the portfolio s subsector exposure. As of September 217, the team continued to position the fund for an improvement in oil prices. This thinking was shown in the portfolio s positioning, with an overweight to the E&P companies biased towards U.S. shale, and an underweight to integrated oil & gas companies, particularly the more defensive names. Within the former, the team took advantage of the weakness during the second quarter and again in August to increase the exposure through existing and new holdings (for example International Petroleum) while maintaining a greater emphasis on quality. These companies, in their view, should hold up well at a level of $5/barrel but deliver good returns at and over $6/barrel. They also added to their oil services allocation, funded using the proceeds from the reduction of some of their integrated names. Within this segment, the exposure was tilted toward U.S. onshore names which will benefit from rising shale production. Finally, an underweighting to refiners was maintained. Index Proxy Overlap Number of Equity Holdings Fund 31 Index Proxy Fund Overlap With Index Proxy Holdings Overlap Asset Overlap Largest Common Holdings Fund % Proxy % Largest Distinct Holdings Fund % Portfolio Holdings 31/3/18 Previous Portfolio Date Equity Holdings Bond Holdings Other Holdings Assets in Top 1 Holdings Turnover Ratio (Reported) 28/2/ % Top 1 Equity Holdings Country Assets % Assets % Proxy % 31/3/18 28/2/18 31/3/18 Y Chevron Corp USA /15 <1 Narrow o Energy 25.4 Y Royal Dutch Shell PLC Class A GBR /15 <1 No o Energy Y BP PLC GBR /14 <1 No o Energy Total SA FRA /17 <1 No o Energy Y ConocoPhillips USA /8 <1 No o Energy 6.87 Y EOG Resources Inc USA /8 <1 Narrow o Energy T Suncor Energy Inc CAN /18 <1 No o Energy Y Halliburton Co USA /16 <1 Narrow o Energy 7.19 Y Pioneer Natural Resources Co USA /14 <1 Narrow o Energy Y Valero Energy Corp USA /16 <1 Narrow o Energy Change since previous portfolio: T Increase Y Decrease R New First Bought Days Trading Economic Moat Sector 1-Yr Total New Holdings Largest Purchases % Assets Sector Williams Companies Inc 1.82 o CAITHNESS PETROLEUM PRVT Prvt. Total. Eliminated Holdings Largest Sales % Assets Sector Enbridge Inc 1.73 o Precision Drilling Corp.48 o CAITHNESS PETROLEUM PRVT Prvt. Largest Position Changes Current % Prior % Y Royal Dutch Shell PLC Class A Y BP PLC T Suncor Energy Inc R Williams Companies Inc Y Enbridge Inc. 1.73

4 Page 4 of 9 Morningstar Category Category Index Performance Sector Equity Energy MSCI World/Energy NR A short track record under Bishop s tenure. Performance Pillar Neutral 2 Nov, 217 The fund s track record since Alastair Bishop has been involved is short. From November 215, when he became comanager, through the end of September 217, the fund has marginally outperformed the Sector Equity Energy Morningstar category but significantly trailed its MSCI World/Energy 1/4 benchmark. Weakness in returns was largely due to a poor first half of 217, when the fund materially lagged both yardsticks. The fund s positioning--an overweight to the exploration & production sector, particularly the U.S. names, and an underweight to the large integrated companies--was a significant headwind as oil prices were weak on the back of rising rig counts in the U.S. and investors scepticism around the OPEC supply cuts deal. At a stock level, the largest detractor was the fund s position in Anadarko Petroleum whose share price, in addition to a weaker oil price, was also dragged down by two operational incidents. Performance in 216 was strong and ahead of the benchmark and average category peer by a wide margin. An overweighting in the E&P sector, which performed well during the period, bolstered returns, with Cimarex, Anadarko Petroleum, and Pioneer Natural Resources being amongst the largest performers. Success came also from the fund s oil services names while its midstream holdings proved detrimental. Morningstar Rating and Risk 3/6/18 Period Morningstar Ret vs Cat Morningstar Risk vs Cat Morningstar Rating 3 Years Avg Above Avg QQQ 5 Years Below Avg Avg QQ 1 Years Avg Avg QQQ Overall Rating Risk Analysis 3/6/18 3-Year Return and Risk Analysis Total Return % QQQ Fund Category Index * ( & * ) & * ( * ( * History 3/6/18 12-Month Rolling Return % Fund Full Manager Change Partial Manager Change Quartile Rank in Cat Percentile Rank in Cat % Total Return /- Category /- Index Income Return Standard Deviation 3-Year Risk Measures Fund Category Index Standard Deviation Sharpe Ratio R-Squared Beta 1.16 Alpha Maximum Drawdown Fund Category Index Max Drawdown (%) Peak Date 7/8 6/8 7/8 Valley Date 2/16 2/16 2/9 Max Drawdown (Months) Upside/Downside Fund Category Index Upside Capture Ratio 17.3 Downside Capture Ratio Returns 3/6/18 Trailing Returns Total Investor Rank in Cat Cat Index 1 Year Years Years Years Tenure 11/ Inception 5/ Rolling-Returns Summary 12% Month Rolling Periods 11 Observations, 9 Years The shading and percentages correspond to how often the fund returns landed in each category quartile. Income and Capital Returns Return % Income Return Capital Return Year /18 Income Income % Rank in Cat Capital Capital % Rank in Cat /

5 Page 5 of 9 Morningstar Category Category Index People Sector Equity Energy MSCI World/Energy NR A new leadership supported by a relatively new supporting cast. People Pillar Neutral 2 Nov, 217 This fund is now led by Alastair Bishop, who was appointed sole named manager in April 217, following longtime comanager Poppy Allonby s decision to step back from the management of this fund. Bishop joined the team in 21 as an energy analyst and became comanager in November 215. He boasts more than 1 Management Team years of investment experience, all of which have been dedicated to energy equities analysis including the renewable segment. From September 217 Bishop has worked alongside the newly hired energy specialist Mark Hume who joined as comanager from First State after a seven-year stint within the global resources team. We note that both managers have an in-depth knowledge of the energy space, but their portfolio management experience is fairly limited. Furthermore, the team supporting this strategy is also relatively new and is made up of two analysts. Ruth Brooker joined the team in late 215 from Goldman Sachs where she had worked as an oil equity analyst. Her focus has been on the upstream segments of the energy complex, but she now also covers the downstream subsectors. The more recent addition is Charlie Lilford who joined in October 216 and has a background in renewable energy. The fund benefits now from resources, but the limited portfolio management experience and uncertainties around how well this new unit will work together lead us to lower this fund s People rating to Neutral. Experience and Asset Load Total AUM Bil in Funds Managed 2+ Number of Managers Longest Tenure Years Manager Retention Rate 5-Year % Average Manager Tenure 1.5 Years 15 1 Advisor Subadvisor BlackRock Investment Management (UK) Ltd Tenure Years Alastair Bishop 11/15 to Present Years on Managed Funds Years on Fund 17 2 Fund AUM Current Funds Managed 6, Mil 12 Largest Funds Managed Tenure Dates Role Fund Size Bil Investment Mil Tenure Index BGF World Energy Fund 11/15 to Present 1 of BGF New Energy Fund 11/15 to Present 1 of BlackRock Resources&Commodities 6/12 to Present 1 of Strategy JNL/BlackRock Global Natural Res Fd 9/17 to Present 1 of 3.82 None BlackRock Energy and Resources 11/15 to Present 1 of Mark Hume 3/18 to Present Years on Managed Funds Years on Fund Fund AUM Current Funds Managed 2, Mil 3 Largest Funds Managed Tenure Dates Role Fund Size Bil Investment Mil Tenure Index BGF World Energy Fund 3/18 to Present 1 of BlackRock Energy and Resources 3/18 to Present 1 of BlackRock All Cap Energy & Res Port 3/18 to Present 1 of 2.9 None

6 Page 6 of 9 Morningstar Category Category Index Parent Sector Equity Energy MSCI World/Energy NR BlackRock, though not perfect, has largely served fundholders well. Parent Pillar 9 Jun, 217 At $5 trillion in assets under management, BlackRock is the largest asset manager in the world. The firm isn't perfect--after struggling with its active-equity capabilities for years, it's reorganizing that outfit for the second time, and its ishares franchise launches some trendy exchange-traded funds. But the firm has made Assets By Region, By Domicile Bil Fund Family Details Europe (*) Breakdown great strides to encourage its portfolio managers to invest alongside fundholders, and strengthen its investment offerings. The firm's Parent rating was raised to Positive from Neutral. The firm has grown quickly, in large part thanks to the strength of ishares and its active fixed-income and multi-asset businesses, as well as a growing institutional business, which includes mostly index-based strategies. BlackRock's solid stewardship of capital stems in large part from its decision that to succeed as a publicly traded asset manager, it must act as a responsible, high-performing fiduciary. The firm uses its scale and technological capabilities to achieve this goal. BlackRock is constantly evolving and has focused on technology in recent years to further growth, including selling its proprietary riskmanagement system, Aladdin, to competitors and developing a pared-down version for advisors. A recent announcement to move $3 billion in active equity to quant-driven strategies demonstrates a willingness to rely more heavily on technology to run portfolios. Morningstar Rating Breakdown Americas 437. Europe & Africa Asia & Australia 8.5 Rating Assets % Œ ˇ 4.3 Ø 1.9 Not Rated 6. Rating Assets % QQQQQ 13.3 QQQQ 28.7 QQQ 18.6 QQ 6.1 Q.2 Not Rated 33.1 Asset Class Breakdown Europe (ex Money Mkt) Assets Bil Asset Class Assets Bil Assets % Equity Fixed Income Allocation Convertibles Property Alternative Commodities Fund Family Details Europe Top Performing Funds Category Name Fund Size Mil Return % 3-Year Rank in Cat 3-Year BlackRock Active Selection Fund - European Europe Large-Cap Blend Equity Unconstrained Equity Fund Institutional EUR Acc BlackRock UK Fund A Acc UK Large-Cap Blend Equity BlackRock Global Funds - United Kingdom Fund A2 UK Large-Cap Blend Equity Largest Funds Category Name Fund Size Mil Return % 3-Year Rank in Cat 3-Year BlackRock Global Funds - Global Allocation Moderate Allocation 18, Fund A2 BlackRock Global Funds - Euro Short Duration EUR Diversified Bond - Short 14, Bond Fund A2 EUR Term ishares Developed World Index Fund (IE) Flexible Acc Global Large-Cap Blend Equity 13, Recent Fund Launches Category Name Fund Size Mil Return % Inception Inception Date BlackRock Funds I ICAV - BlackRock Advantage Europe Large-Cap Blend Equity /6/18 Europe Equity Fund X EUR Acc BlackRock Funds I ICAV - BlackRock Advantage US Large-Cap Blend Equity /6/18 US Equity Fund X Acc BlackRock Funds I ICAV - BlackRock Advantage World Equity Fund X Acc Global Large-Cap Blend Equity /6/18 (*) All data is based on Branding name and refers to funds domiciled in Europe.

7 Page 7 of 9 Morningstar Category Category Index Price Sector Equity Energy MSCI World/Energy NR High expenses TER/OGC Expense History TER/OGC Price Pillar Negative 2 Nov, 217 The fund s ongoing charge at 1.31% on its clean share class sits within the most expensive quantile of ongoing charges for a peer group of similarly priced share classes of sector equity funds. This is particularly disappointing given the high level of assets under management and the firm s large size TER/OGC Net Assets Bil Net Flows Mil Expense Breakdown Ongoing charge Ongoing charge 2/2/ Fee Level Fee Level Peer Group Selected Components Max Management Fee 1. Performance Fee Fee Level Breakpoints High >. Above Average.-. Average.-. Below Average.-. Low <. Fund 1.32 Peer Median Share Class Information Share Class Identifier Morningstar Category TER/OGC Max Mgmt Fee Performance Fee Maximum Inital Charge BGF World Energy D2 Sector Equity Energy ,.11 BGF World Energy A2 UL Sector Equity Energy 1.75 BGF World Energy I2 EUR LU Sector Equity Energy BGF World Energy A2 LU Sector Equity Energy , 1.34 BGF World Energy E2 LU Sector Equity Energy ,.7 BGF World Energy A2 EUR Hedged LU Other Equity Minimum Initial Inv Assets Bil

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Investors should consult a financial adviser regarding the suitability of any investment product, taking into account their specific investment objectives, financial situation or particular needs, before making any investment decisions. Negative Represents funds that possess at least one flaw that our analysts believe is likely to significantly hamper future performance, such as high fees or an unstable management team. Because of these faults, we believe these funds are inferior to most competitors and will likely underperform their relevant performance benchmark and/or peer group, within the context of the level of risk taken, over a full market cycle. Morningstar may also use two other designations in place of a rating: Under Review This designation means that a change that occurred with the fund or at the fund company requires further review to determine the impact on the rating. Not Ratable This designation is used only where we are providing a report on a new strategy or on a strategy where there are no relevant comparators, but where investors require information as to suitability. For more information about our Analyst Rating methodology please go to Morningstar Star Rating The Morningstar Star Rating is a proprietary data point that is quantitatively driven. Funds are rated from one to five stars based on how well the fund performed (after adjusting for risk and accounting for sales charges) in comparison to similar funds. Within each Morningstar Category, the top 1% of funds receive five-stars and the bottom 1% receives one-star. Funds are rated for up to three time periods three-, five-, and ten-years and these ratings are combined to produce an overall star rating, which is noted within the Report. Funds with less than three years of history are not rated. Morningstar Star Ratings are based entirely on a mathematical evaluation of past performance. Morningstar Star Ratings are in no way to be considered a buy or sell signal nor should be viewed as a statement of fact. Equity-Related Data Points The Report lists the fund s top ten holdings as of the dated noted. For each underlying holding, a series of data points is provided including, where applicable, that security s Economic Moat as of the date noted. Economic Moat The concept of an economic moat plays a vital role in our equity analyst s qualitative assessment of a firm s long-term investment potential, but also in the actual calculation of its fair value estimate. An economic moat is a structural feature that allows a firm to sustain excess profits over a long period of time. We define economic profits as returns on invested capital (or ROIC) over and above our estimate of a firm s cost of capital, or weighted average cost of capital (or WACC). Without a moat, profits are more susceptible to competition. We have identified five sources of economic moats: intangible assets, switching costs, network effect, cost advantage, and efficient scale. Companies with a narrow moat are those we believe are more likely than not to achieve normalized excess returns for at least the next 1 years. Wide-moat companies are those in which we have very high confidence that excess returns will remain for 1 years, with excess returns more likely than not to remain for at least 2 years. The longer a firm generates economic profits, the higher its intrinsic value. We believe low-quality, no-moat companies will see their normalized returns gravitate toward the firm s cost of capital more quickly than companies with moats. For more information about methodology in analysing stocks, please go to For Recipients in Australia: This Report has been issued and distributed in Australia by Morningstar Australasia Pty Ltd (ABN: ; ASFL: 24892). Morningstar Australasia Pty Ltd is the provider of the general advice ( the Service ) and takes responsibility for the production of this report. The Service is provided through the research of investment products. To the extent the Report contains general advice it has been prepared without reference to an investor s objectives, financial situation or needs. Investors should consider the advice in light of these matters and, if applicable, the relevant Product Disclosure Statement before making any decision to invest. Refer to our Financial Services Guide (FSG) for more information at For Recipients in Hong Kong: The Report is distributed by Morningstar Investment Management Asia Limited, which is regulated by the Hong Kong Securities and Futures Commission to provide services to professional investors only. Neither Morningstar Investment Management Asia Limited, nor its representatives, are acting or will be deemed to be acting as an investment advisor to any recipients of this information unless expressly agreed to by Morningstar Investment Management Asia Limited. For enquiries regarding this research, please contact a Morningstar Investment Management Asia Limited Licensed Representative at For Recipients in India: This Investment Research is issued by Morningstar Investment Adviser India Private