Asia Pacific Equity Income Fund

FOR PROFESSIONAL AND INSTITUTIONAL INVESTORS USE ONLY PLEASE READ IMPORTANT DISCLOSURES INVESTMENT COMMENTARY NOV 2018 Asia Pacific Equity Income Fund A sub- fund of BlackRock Global Funds Fund Manager(s): Oisin Crawley Alethea Leung Capital at risk. The value of investments and the income from them can fall as well as rise and is not guaranteed. You may not get back the amount originally invested. Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time. Past Performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy. Performance The Fund rose by 3.5% over the month, underperforming its benchmark, which was up by 4.5%. Asia ex Japan equities rose 5.2%, as China surged 7.3% (Hong Kong +7.0%) on signs of a US China trade truce as the world anticipated a deal to be made at the G20 summit. India (+10.2%) and Indonesia (+12.2%) rallied on currency gains, as a basket of emerging-market currencies rose by 1.5% against the US dollar. India recouped all losses from October, benefiting from the collapse in oil. Indonesia raised rates by 25 basis points, which caused a rally in the banking sector. There was weaker relative performance from South Korea (+3.4%) and, in particular, Taiwan (-0.7%), which underperformed on weaker earnings and a gloomy outlook for the technology sector. Weak guidance from Apple, as well as an update from the company that it will stop breaking down the unit sales for its iphone, ipad and Mac orders, led to concern in the supply chain and a subsequent downward revision of the 2019 EPS growth estimates for Taiwan to 1.8%. Our stock picks in China and Australia were the main source of underperformance, while our stock selection in Taiwan and India helped to offset some of the losses. At the stock level, being underweight Tencent, the Chinese internet company, was this month s biggest detractor from performance, as the stock rebounded from a previous sell-off after reporting better-thanexpected results. Not owning Alibaba, the Chinese e-commerce giant, also hurt performance. The stock gained as market sentiment recovered, and investors think the company s revenue guidance is overly conservative. On the other hand, Larsen & Toubro, an Indian EPC (engineering, procurement and construction) contractor, was this month s top contributor. The stock rallied after posting better-than-expected results, driven by strong order inflows. Bharat Petroleum, the Indian oil-refining and marketing company, also helped performance, as the stock saw strong performance on the back of a sharp fall in crude oil prices that should help normalise the company s margin. Portfolio Activity During the month, we sold out of Chinese steel producer Angang Steel on the back of concerns around the government s disappointing execution of winter curtailment of metal production, and hence the lack of support to the steel price. We reduced Shihan Financial Group, the Korean bank, due to concerns on slowing growth and worsening asset quality. We used the proceeds to purchase Tencent, the Chinese internet company, to reduce our underweight position, as we expect a share-price rebound after the recent correction. We also trimmed Korean chemical producer MKTGM1218E-690292-1/5

Kumho Petrochemical, as we are concerned on chemical spreads, given continued weak demand. We topped up CK Asset, as we like this property developer for its declining exposure to China and Hong Kong, attractive dividend and cheap valuation. Our previous concern on its proposed expensive acquisition of APA Group was eased after the deal was blocked by the Australian government. Outlook & Positioning Asian equities volatility continues, as investor confidence is being tested by further trade tensions and persisting currency and rate adjustments. The recent verbal agreement between China and US at the G20 summit to halt new tariffs (with the goal of reaching a new deal within 90 days), the new dovish tone from the US Federal Reserve and the weakness in oil are testament to the ongoing shifting dynamics impacting global markets. While visibility is reduced, Asian equities continue to be attractive to us: valuations have now reset to the recent lows of 2016, providing attractive entry levels and highlighting that a lot of bad news is reflected in current stock prices. Companies earnings remain generally positive, with good profit trends and improving cashflows for domestic companies. Costs remain under control, and the capex cycle is still early, meaning margins are also expanding, improving profitability throughout. Within Asia, our outlook is more mixed: the deterioration in the US China relationship is blurring the outlook, despite policymakers firmly shifting towards providing more stimulus to the economy. We believe the market is pricing in a lot of bad news already, and while we are not overly positive on this market, we are finding selective opportunities already in domestic names. The relative resilience of Indian equities is being tested adjusting rates and the impact on domestic financials, along with the forthcoming elections, are further adding to the volatility, which we think will continue. We remain confident in our stock selection to navigate this period. Pockets of the ASEAN countries have shown good resilience and improving trends in their domestic economies. We see continued recovery of select local currencies, driven by a good response from local central banks and strengthening domestic drivers. The South Korean macro environment is deteriorating, with many of the policies implemented by the current government backfiring and putting pressure on wage growth, spilling out to the property market. While the macro environment is getting worse, we are still able to find interesting single-stock opportunities. Finally, we are seeing good value emerge in parts of the Taiwanese technology sector, and are therefore seeing interesting entry points for selective names. The increased level of volatility may well continue as markets adjust to the new interest-rate regime and the political tensions between the US and China extend. This is, however, a good environment for us, active investors, as volatility creates price dislocation, and we are already seeing good opportunities in specific stocks and countries. We also remain confident in the underlying drivers of the asset class and believe that this midcycle correction will provide good entry points for long-term investors. Going into 2019, we think Asian markets have further catch-up to do, especially versus developed markets. Given that global growth is being questioned further, this environment should be conducive to US dollar weakness. We are looking to position within this rotation by reducing our cyclical exposures further, gaining more exposure to local currencies and increasing our duration through quality growth names in our Asian portfolios, in this case. In terms of positioning, we are overweight Australia and New Zealand but underweight China and South Korea. Our underweight in China is driven by our low exposure to the expensive and non-yielding information technology (e-commerce) sector. We have the largest overweights in the financials and industrials sectors, while we are most underweight the communication services sector. All performance data is from MSCI, total return, in US dollars. MKTGM1218E-690292-2/5

Key Risks Exchange Rate Risk Overseas investment will be affected by movements in currency exchange rates. Emerging market risk Emerging market investments are usually associated with higher investment risk than developed market investments. Therefore the value of these investments may be unpredictable and subject to greater variation. Derivative Risk The Fund uses derivatives as part of its investment strategy. Compared to a fund which only invests in traditional instruments such as stocks and bonds, derivatives are potentially subject to a higher level of risk. Capital growth / income variation Investors in this Fund should understand that capital growth is not a priority and values may fluctuate and the level of income may vary from time to time and is not guaranteed. Risk to Capital Growth through Distributions The fund may make distributions from capital as well as income or pursue certain investment strategies in order to generate income. Whilst this might allow more income to be distributed, it may also have the effect of reducing capital and the potential for long-term capital growth. MKTGM1218E-690292-3/5

Important information Unless indicated the fund information displayed only provides summary information. Investment should be made on the basis of the relevant booklet together with the Prospectus and Key Investor Information Document, which are available from the Manager. Reference to individual investments mentioned in this communication is for illustrative purposes only and should not be construed as investment advice or investment recommendation. The number of shares quoted for each Fund are indicative and actual numbers may fall outside of the ranges shown. This material is for distribution to Professional Clients (as defined by the FCA or MiFID Rules) and Qualified Investors only and should not be relied upon by any other persons. Issued by BlackRock Investment Management (UK) Limited (authorised and regulated by the Financial Conduct Authority). Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Registered in England No. 2020394. Tel: 020 7743 3000. For your protection, telephone calls are usually recorded. BlackRock is a trading name of BlackRock Investment Management (UK) Limited. Austria: For further information, the prospectus, Key Investor Information Document, annual report and semiannual report can be obtained free of charge in hardcopy form from the Austrian paying agent: Raiffeisen Zentralbank Österreich AG, A-1030 Vienna, Am Stadtpark 9. Germany: This is a financial promotion. For further information, the prospectus, Key Investor Information Document, annual report and semi-annual report can be obtained free of charge in hardcopy form from the German information centre: BlackRock Investment Management (UK) Limited, German Branch, Frankfurt am Main, Bockenheimer Landstraße 2 4, 60306 Frankfurt am Main. The paying agent in Germany is J.P. Morgan AG, CIB / Investor Services Trustee & Fiduciary, Taunustor 1 (Taunus Turm), D-60310 Frankfurt am Main. Hong Kong: In Hong Kong, this information is issued by BlackRock Asset Management North Asia Limited and has not been reviewed by the Securities and Futures Commission of Hong Kong. This material is for distribution to "Professional Investors" (as defined in the Securities and Futures Ordinance (Cap.571 of the laws of Hong Kong) and any rules made under that ordinance.) and should not be relied upon by any other persons or redistributed to retail clients in Hong Kong. For Hong Kong investors, please refer to the BlackRock Global Funds Offering Documents for details, including risk factors. Netherlands: The risk indicator shown on this document refers to the A2 share class of the Fund. Higher or lower risk may apply to the other share classes of the Fund. Issued in the Netherlands by the Amsterdam branch office of BlackRock Investment Management (UK) Limited: Amstelplein 1, 1096 HA Amsterdam, Tel: 020-549 5200. BlackRock Global Funds ("BGF") is a UCITS (icbe) as defined in section 1:1 Financial Markets Supervision Act (Wet op het financieel toezicht; "FMSA"). BGF and its sub funds are listed in the register as defined in section 1:107 FMSA. Please refer to the Key Investor Information Document (essentiële beleggersinformatie; "EBI") for further information about BGF and its sub funds. The prospectus and EBI of BGF and its sub funds are available on BlackRock's website www.blackrock.nl. All financial investments contain a certain risk. The value of the assets managed by BGF and its sub funds may greatly fluctuate as a result of the investment policy and your initial investment is not guaranteed. Poland: BGF has been registered on the official list of the Financial Supervision Commission (Komisja Nadzoru Finansowego) for distribution in Poland. Issued in Poland by the representative office BlackRock Investment Management (UK) Limited, Dubiński, Fabrycki, Jeleński i Wspólnicy Kancelaria Prawna sp.k., ul. Zielna 37, 00-108 Warszawa. Paying agent in Poland is Bank Handlowy w Warszawie SA, ul. Senatorska 16, 00-950 Warsaw, Poland. Singapore: In Singapore, this information is issued by BlackRock (Singapore) Limited (company registration number: 200010143N) for use only by institutional investors as defined in Section 4A of the Securities and Futures Act, Chapter 289 of Singapore and should not be relied upon by or redistributed to any other persons in Singapore. The above warnings and fund specific risks are explained in greater detail in in the current Prospectus and you should read them before investing. MKTGM1218E-690292-4/5

Spain / Portugal: Certain share classes of certain Fund(s) mentioned in this document are registered for public distribution in Spain and Portugal alongside each Prospectus for the Fund. In Spain, BlackRock Global Funds (BGF) is registered with the number 626 in the Comisión Nacional del Mercado de Valores de España (CNMV) and the Prospectus for each registered fund has been registered with the CNMV. In Portugal, certain share classes of certain BGF funds are registered with the Comissão do Mercado de Valores Mobiliários (CMVM) and the Prospectus for each registered fund has been registered with the CMVM. This document contains BLACKROCK INC. products or services that might be offered directly or indirectly within the Andorran jurisdiction, and it should not be regarded as solicitation of business in any jurisdiction including the Principality of Andorra. Switzerland: For professional clients and qualified investors only. The BlackRock Global Funds (BGF) Asia Pacific Equity Income Fund is domiciled in Luxembourg. BlackRock Asset Management Schweiz AG, Bahnhofstrasse 39, CH-8001 Zurich, is the Swiss representative and State Street Bank International GmbH, Munich, Zurich Branch, Beethovenstrasse 19, CH-8002 Zurich, the Swiss Paying Agent. The Prospectus, Key Investor Information Document, the Articles of Incorporation, the latest and any previous annual and semiannual reports are available free of charge from the Swiss Representative. Investors should read the fund specific risks in the Key Investor Information Document and the Prospectus. BlackRock Global Funds (BGF) is an open-ended investment company established and domiciled in Luxembourg which is available for sale in certain jurisdictions only. BGF is not available for sale in the U.S. or to U.S. persons. Product information concerning BGF should not be published in the U.S. It is recognised under Section 264 of the Financial Services and Markets Act 2000. BlackRock Investment Management (UK) Limited is the UK distributor of BGF. Most of the protections provided by the UK regulatory system, and the compensation under the Financial Services Compensation Scheme, will not be available. A limited range of BGF sub-funds have a reporting fund status A sterling share class that seeks to comply with UK Reporting Fund Status requirements. Subscriptions in BGF are valid only if made on the basis of the current Prospectus, the most recent financial reports and the Key Investor Information Document, which are available on our website. Prospectuses, Key Investor Information Documents and application forms may not be available to investors in certain jurisdictions where the Fund in question has not been authorised. Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy. This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer. 2018 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, ishares, BUILD ON BLACKROCK, SO WHAT DO I DO WITH MY MONEY and the stylised i logo are registered and unregistered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners. MKTGM1218E-690292-5/5