UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

Investment Company Act file number: 811-23345

Name of Fund:  BlackRock Series Fund II, Inc.

BlackRock High Yield Portfolio

BlackRock U.S. Government Bond Portfolio    

Fund Address:    100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Series Fund II, Inc., 55 East 52^nd Street, New York, NY 10055

Registrant’s telephone number, including area code: (800) 441-7762

Date of fiscal year end: 12/31/2018

Date of reporting period: 12/31/2018

Item 1 – Report to Stockholders

DECEMBER 31, 2018

ANNUAL REPORT

BlackRock Series Fund, Inc.

^Ø  BlackRock Advantage Large Cap Core Portfolio

^Ø  BlackRock Balanced Capital Portfolio

^Ø  BlackRock Capital Appreciation Portfolio

^Ø  BlackRock Global Allocation Portfolio

^Ø  BlackRock Government Money Market Portfolio

BlackRock Series Fund II, Inc.

^Ø  BlackRock High Yield Portfolio

^Ø  BlackRock U.S. Government Bond Portfolio

Not FDIC Insured • May Lose Value • No Bank Guarantee

The Markets in Review

Dear Shareholder,

In the 12 months ended December 31, 2018, concerns about a variety of political risks and a modest slowdown in global growth worked against the equity market despite solid corporate earnings, while rising interest rates constrained bond returns. Though the market’s appetite for risk remained healthy for most of the reporting period, risk-taking declined sharply later in the reporting period. As a result, bonds held their value better than stocks, which posted negative returns across the globe. Shorter-term, higher-quality securities led the bond market, and U.S. equities outperformed most international stock markets.

Volatility rose in emerging market stocks, as the rising U.S. dollar and higher interest rates in the U.S. disrupted economic growth abroad. U.S.-China trade relations and debt concerns adversely affected the Chinese stock market, while Turkey and Argentina became embroiled in currency crises, largely due to hyperinflation in both countries. An economic slowdown in Europe also led to negative performance for European equities.

In fixed income markets, short-term U.S. Treasury interest rates rose the fastest, while longer-term rates slightly increased. This led to a negative return for long-term U.S. Treasuries and a substantial flattening of the yield curve. Many investors are concerned with the flattening yield curve as a harbinger of recession. However, given the extraordinary monetary measures in the last decade, we believe a more accurate barometer for the economy is the returns along the risk spectrums in stock and bond markets. Although the fundamentals in credit markets remained relatively solid, investment-grade bonds posted flat returns, and high-yield bonds declined slightly. Recent sell-offs in risk assets have flattened asset returns along the risk spectrum somewhat, which bears further scrutiny in the months ahead.

In response to rising growth and inflation, the U.S. Federal Reserve (the “Fed”) increased short-term interest rates four times during the reporting period. The Fed also continued to reduce its balance sheet, gradually reversing the unprecedented stimulus measures it enacted after the financial crisis. By our estimation, the Fed’s neutral interest rate, or the theoretical rate that is neither stimulative nor restrictive to the economy, is approximately 3.0%. With that perspective, the Fed’s current policy is still mildly stimulative to the U.S. economy, which leaves room for further Fed rate hikes to arrive at monetary policy that is a neutral factor for economic growth.

Volatility in the U.S. equity market spiked in October, as a wide range of risks were brought to bear on markets, ranging from rising interest rates and slowing global growth to heightened trade tensions and political turmoil in several countries, including the United States. This was accompanied by a broad based risk-off in December — which was the worst December performance on record since 1931. Although fears of recession drove equity volatility higher at the end of 2018, we continue to believe the probability of recession in 2019 remains relatively low.

Economic growth and global earnings are likely to slow somewhat in 2019 — the tax cut stimulus will be less pronounced, and the Fed’s rate hikes in 2018 will gain traction in 2019. Trade frictions look more baked into asset prices than a year ago, but markets may be overlooking European political risks. Consequently, we are cautious on European equities, as European unity remains tenuous with a history of flare-ups. We continue to prefer to take risk in U.S. and emerging market equities. Within U.S. equities, we believe that companies with high-quality earnings and strong balance sheets offer the most attractive risk/reward trade-off. Going into 2019, we also favor short-term bonds over long-term bonds because they offer nearly equivalent yields with far lower volatility.

In this environment, investors need to think globally, extend their scope across a broad array of asset classes, and be nimble as market conditions change. We encourage you to talk with your financial advisor and visit blackrock.com for further insight about investing in today’s markets.

Sincerely,

Rob Kapito

President, BlackRock Advisors, LLC

Rob Kapito

President, BlackRock Advisors, LLC

Total Returns as of December 31, 2018
	6-month	12-month
U.S. large cap equities (S&P 500® Index)	(6.85)%	(4.38)%
U.S. small cap equities (Russell 2000® Index)	(17.35)	(11.01)
International equities (MSCI Europe, Australasia, Far East Index)	(11.35)	(13.79)
Emerging market equities (MSCI Emerging Markets Index)	(8.48)	(14.57)
3-month Treasury bills (ICE BofAML 3-Month U.S. Treasury Bill Index)	1.06	1.87
U.S. Treasury securities (ICE BofAML 10-Year U.S. Treasury Index)	2.72	(0.03)
U.S. investment grade bonds (Bloomberg Barclays U.S. Aggregate Bond Index)	1.65	0.01
Tax-exempt municipal bonds (S&P Municipal Bond Index)	1.38	1.36
U.S. high yield bonds (Bloomberg Barclays U.S. Corporate High Yield 2% Issuer Capped Index)	(2.24)	(2.08)
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.

2 THIS PAGE IS NOT PART OF YOUR FUND REPORT

Table of Contents

	Page
The Markets in Review		2
Annual Report:
Fund Summaries		4
The Benefits and Risks of Leveraging		23
Disclosure of Expenses		23
Derivative Financial Instruments		23
Financial Statements:
Schedules of Investments		24
Statements of Assets and Liabilities		109
Statements of Operations		113
Statements of Changes in Net Assets		115
Statement of Cash Flows		119
Financial Highlights		121
Notes to Financial Statements		128
Report of Independent Registered Public Accounting Firm		148
Disclosure of Investment Advisory Agreement		149
Director and Officer Information		152
Additional Information		155
Glossary of Terms Used in this Report		157

3

Fund Summary  as of December 31, 2018 BlackRock Advantage Large Cap Core Portfolio

Investment Objective

BlackRock Advantage Large Cap Core Portfolio’s (the “Fund”) investment objective is to seek long-term capital appreciation.

Portfolio Management Commentary

How did the Fund perform?

For the 12-month period ended December 31, 2018, the Fund underperformed its benchmark, the Russell 1000^® Index.

What factors influenced performance?

After beginning the year favoring growth stocks and trend-based strategies, investors later reversed course and sold out of more expensive, growth-oriented areas of the market on fears of expensive valuations and of approaching the end of the market cycle. As the sell-off was often disconnected with the broader sentiment of management and market participants, it created a difficult environment for sentiment-based signals and resulted in sentiment insights detracting from relative performance for the period. A signal that gauges company sentiment based on trends in online job postings was the largest detractor for the period. Identifying sentiment based on short positions of hedge funds acted as a drag on performance as well, largely due to significant hedge fund de-risking toward the end of the year. A signal that uses geo-location data to determine consumer foot traffic patterns into various brick-and-mortar locations further detracted. Given a rotation out of growth positions, investors typically flock to pockets of attractive relative valuation. However, as value stocks showed some of the strongest earnings trends heading into the fourth quarter, they sold-off amid the rotation away from growth expectations. As a result, while fundamental signals held up well for the period, an insight that evaluates each stock based on forward sales relative to enterprise value hindered relative performance for the year.

As volatility and concerns about the approaching end of the current cycle increased, investors returned their focus to company fundamentals and to finding quality businesses offering sustainable growth prospects. In this vein, the Fund’s fundamental insights, particularly quality insights, were the primary drivers of positive relative return over the course of the year. Among the portfolio’s fundamental signals, identifying companies with attractive cash flow growth relative to operating assets was the top contributor. Identifying positive dividend growth trends as a measure of quality also proved beneficial. Although the portfolio’s sentiment insights overall were a drag on relative performance, sentiment insights that provide a more quality-based lens into companies contributed positively. Specifically, an insight that gauges sentiment from informed bond investors contributed significantly, given interest rate volatility. Text-based analyses of management conference calls to determine longer-term trends in company fundamentals proved beneficial as well. Both of these signals held up extremely well in the fourth quarter, in a market environment that was generally challenging for trend- and sentiment-based insights. Finally, thematic signals showed mixed results for the period, contributing marginally overall to relative performance.

Describe recent portfolio activity.

Over the course of the period, the portfolio maintained a balanced allocation of risk across all major return drivers. However, a number of new stock selection insights were added to the portfolio. Among these insights, a model that evaluates companies on the basis of governance and the ethics and sustainability of its business practices from a social and environmental perspective was added to the Fund’s bucket of quality signals. In addition, a new insight was added that captures the location of hotel booking trends and invests in related stocks most sensitive to those areas. A new macro thematic model that evaluates industries across various inputs such as labor costs and hiring activity was added as well.

Describe portfolio positioning at period end.

Relative to the Russell 1000^® Index, the Fund was positioned essentially neutrally from a sector perspective. The Fund had slight overweight positions in health care and financials and slight underweight positions in communications services and consumer discretionary.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

4 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Fund Summary  as of December 31, 2018 (continued) BlackRock Advantage Large Cap Core Portfolio

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a)  Assuming transaction costs and other operating expenses, including investment advisory fees, if any. Does not include insurance-related fees and expenses. Under normal circumstances, the Fund seeks to invest at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in large cap equity securities and derivatives that have similar economic characteristics to such securities. The Fund’s total returns prior to June 12, 2017 are the returns of the Fund when it followed different investment strategies under the name BlackRock Large Cap Core Portfolio.

^(b)  The index measures the performance of the large cap segment of the U.S. equity universe. It is a subset of the Russell 3000^® Index and includes approximately 1,000 of the largest securities based on a combination of their market capitalization and current index membership. The index represents approximately 92% of the total market capitalization of the Russell 3000^® Index.

Performance Summary for the Period Ended December 31, 2018

	6-Month Total Returns (a)			Average Annual Total Returns (a)
				1 Year			5 Years			10 Years
BlackRock Advantage Large Cap Core Portfolio		(8.50	)%		(5.11	)%		7.81	%		11.86	%
Russell 1000® Index		(7.42	)		(4.78	)		8.21			13.28

^(a)  Cumulative and average annual total returns are based on changes in net asset value for the periods shown and assume reinvestment of all distributions at net asset value on the ex-dividend date. Insurance-related fees and expenses are not reflected in these returns. The Fund’s total returns prior to June 12, 2017 are the returns of the Fund when it followed different investment strategies under the name BlackRock Large Cap Core Portfolio.

Past performance is not indicative of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Expense Example

	Actual						Hypothetical (a)
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Annualized Expense Ratio
BlackRock Advantage Large Cap Core Portfolio	$	1,000.00	$	915.00	$	2.41	$	1,000.00	$	1,022.68	$	2.55		0.50	%

^(a)  Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

^(b)  Expenses are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

See “Disclosure of Expenses” on Page 18 for further information on how expenses were calculated.

FUND SUMMARY 5

Fund Summary  as of December 31, 2018 (continued) BlackRock Advantage Large Cap Core Portfolio

Portfolio Information

SECTOR ALLOCATION

Sector	Percent of Net Assets
Information Technology		20	%
Health Care		15
Financials		14
Industrials		10
Consumer Discretionary		10
Communication Services		9
Consumer Staples		6
Energy		5
Real Estate		4
Utilities		4
Materials		2
Short-Term Securities		4
Liabilities in Excess of Other Assets		(3	)
For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine sector sub classifications for reporting ease.

6 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Fund Summary  as of December 31, 2018  BlackRock Balanced Capital Portfolio

Investment Objective

BlackRock Balanced Capital Portfolio’s (the “Fund”) investment objective is to seek high total investment return.

Portfolio Management Commentary

How did the Fund perform?

For the 12-month period ended December 31, 2018, the Fund returned (2.66)%, underperforming its blended benchmark (60% Russell 1000^® Index/40% Bloomberg Barclays U.S. Aggregate Bond Index), which returned (2.59)% for the period. The Russell 1000^® Index returned (4.78)%, while the Bloomberg Barclays U.S. Aggregate Bond Index returned 0.01%.

What factors influenced performance?

From an asset allocation perspective, a favorable stance on equities was the primary detractor from performance, namely an overweight position in both Japanese and U.S. equities held during the fourth quarter as global equity markets sold off. The Fund tilted to European equities in the first half of the year, which benefitted performance as a dovish European Central Bank stance boosted equity returns. However, these positive contributions were more than offset by our overweight equity position in the fourth quarter.

Within U.S. equities, sentiment insights detracted from performance for the period. A signal that gauges company sentiment based on trends in online job postings was the largest detractor for the period. Identifying sentiment based on short positions of hedge funds acted as a drag on performance as well, largely due to significant hedge fund de-risking towards the end of the year. A signal that uses geo-location data to determine consumer foot traffic patterns into various brick-and-mortar locations further detracted. While fundamental signals held up well overall, an insight that evaluates each stock based on forward sales relative to enterprise value hindered performance.

Within fixed income, overweight positions to emerging market bonds, corporate credit in Europe and Asia, and U.S. investment grade corporate credit detracted from returns.

From an asset allocation standpoint, the largest positive contributor to performance over the year was an underweight stance with respect to U.S. duration (and corresponding sensitivity to interest rate changes). The duration underweight added significant value as yields moved higher early in 2018. The Fund ultimately closed the position at a profit as the U.S. Federal Reserve hiked rates again in late September.

Within the equity allocation, among the portfolio’s fundamental signals, identifying companies with good growth relative to operating assets was the top contributor. Identifying positive dividend growth trends as a measure of quality also proved beneficial. Although broadly speaking the portfolio’s sentiment insights were a drag on relative performance, an insight that gauges sentiment from informed bond investors contributed significantly, given interest rate volatility. Text-based analyses of management conference calls to determine longer-term trends in company fundamentals proved beneficial as well.

Within fixed income, allocations to securitized assets such as non-agency mortgage-backed securities (“MBS”) and collateralized loan obligations (“CLOs”) contributed positively to return. Macro investment strategies, duration positioning and an overweight to municipal bonds also added to performance.

The Fund held derivatives primarily in financial futures contracts during the period as part of its investment strategy. Although the positions were small, the contribution to Fund performance was positive. Derivatives are used by the investment adviser as a means to manage risk and/or take outright views on equities, interest rates, credit risk and/or foreign exchange positions.

Describe recent portfolio activity.

From a broad asset allocation perspective, the Fund began the period with a modest preference for stocks over bonds, notably in international developed markets. The Fund reduced the magnitude of its underweight position in U.S. bonds over the period. During the period, the Fund initiated an overweight position in European equities, and closed this position as prices moved higher. The Fund retained a preference for Japanese equities versus U.S. equities. The Fund initiated an overweight position in U.S. equities late in the period on an expectation that continued inflationary pressures would benefit equities. The sell-off in U.S. equities at the end of 2018 provided an attractive opportunity to add to this overweight, given a belief that market pricing of the growth outlook had become overly pessimistic.

Within U.S. equities, new stock selection insights were added including a model that evaluates companies on the basis of governance as well as the sustainability of their business practices from a social and environmental perspective. Also, a new insight was added that captures the location of hotel booking trends and invests in related stocks most sensitive to those areas.

Within fixed income, an underweight stance with respect to duration and corresponding interest rate sensitivity was maintained early in the period, but reduced as the first quarter of 2018 progressed. The Fund held a constructive view on emerging market bonds early in the period but decreased its allocation in the second quarter. The Fund also became more cautious on corporate credit, while adding exposure to agency MBS and municipal bonds. The Fund continued to favor front-end Treasuries and securitized assets. During the third quarter, the portfolio moved to overweight duration as the rise in interest rates provided an attractive entry point. During the fourth quarter, the duration overweight was reduced and exposure was increased to sectors expected to benefit from more accommodative monetary policy such as agency MBS and municipal bonds, as well as local currency emerging market debt. The portfolio reduced bank loans in favor of high yield bonds while adding to investment grade credit for high quality income. The Fund took profits on its allocation to securitized assets.

At period end, the Fund held a slightly elevated allocation to cash at 7%. The cash position did not have a material impact on performance results for the period.

FUND SUMMARY 7

Fund Summary  as of December 31, 2018 (continued) BlackRock Balanced Capital Portfolio

Describe portfolio positioning at period end.

The Fund ended the period with a preference for stocks over bonds, notably in the United States and Japan. Within U.S. equities, the Fund had slight overweight positions in health care and financials and slight underweight positions in communication services and consumer discretionary. Within fixed income, the Fund ended the period with a slightly overweight duration stance and a tilt toward higher quality, more liquid sectors such as agency MBS, investment grade corporate credit and municipals. The Fund maintained a small allocation to emerging market bonds.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions.

These views are not intended to be a forecast of future events and are no guarantee of future results.

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a) Assuming transaction costs and other operating expenses, including investment advisory fees, if any. Does not include insurance-related fees and expenses. The Fund invests in U.S. and foreign equity and fixed income securities of any maturity.

^(b) A widely recognized unmanaged market-weighted index comprised of investment-grade corporate bonds rated BBB or better, mortgages and U.S. Treasury and U.S. Government agency issues with at least one year to maturity.

^(c) The index measures the performance of the large cap segment of the U.S. equity universe. It is a subset of the Russell 3000^® Index and includes approximately 1,000 of the largest securities based on a combination of their market capitalization and current index membership. The index represents approximately 92% of the total market capitalization of the Russell 3000^® Index.

^(d) The Fund compares its performance to that of a customized weighted index comprised of the returns of the Russell 1000^® Index (60%) and Bloomberg Barclays U.S. Aggregate Bond Index (40%).

Performance Summary for the Period Ended December 31, 2018

	6-Month Total Returns (a)			Average Annual Total Returns (a)
				1 Year			5 Years			10 Years
BlackRock Balanced Capital Portfolio		(4.71	)%		(2.66	)%		6.23	%		9.36	%
60% Russell 1000® Index/40% Bloomberg Barclays US Aggregate Bond Index		(3.67	)		(2.59	)		6.07			9.52
Russell 1000® Index		(7.42	)		(4.78	)		8.21			13.28
Bloomberg Barclays U.S. Aggregate Bond Index		1.65			0.01			2.52			3.48

^(a)  Cumulative and average annual total returns are based on changes in net asset value for the periods shown and assume reinvestment of all distributions at net asset value on the ex-dividend date. Insurance-related fees and expenses are not reflected in these returns.

Past performance is not indicative of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

8 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Fund Summary  as of December 31, 2018 (continued) BlackRock Balanced Capital Portfolio

Expense Example

	Actual										Hypothetical (a)
					Including interest expense		Excluding interest expense				Including interest expense				Excluding interest expense
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Expenses Paid During the Period (c)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Ending Account Value (12/31/18)		Expenses Paid During the Period (c)
BlackRock Balanced Capital Portfolio	$	1,000.00	$	952.90	$	2.56	$	2.46	$	1,000.00	$	1,022.58	$	2.65	$	1,022.68	$	2.55

^(a) Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

^(b) Expenses are equal to the annualized expense ratio (0.52%), multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

^(c)  Expenses are equal to the annualized expense ratio (0.50%), multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

See “Disclosure of Expenses” on page 18 for further information on how expenses were calculated.

Portfolio Information

PORTFOLIO COMPOSITION

Asset Type	Percent of Total Investments (a)
Common Stocks		56	%
U.S. Government Sponsored Agency Securities		17
Corporate Bonds		12
U.S. Treasury Obligations		5
Asset-Backed Securities		4
Municipal Bonds		3
Non-Agency Mortgage-Backed Securities		2
Foreign Government Obligations		1
Investment Companies		—	(b)
Capital Trusts		—	(b)
Foreign Agency Obligations		—	(b)

^(a)  Total Investments exclude short-term securities, options purchased, options written, borrowed bonds, TBA sale commitments and Investments Sold Short.

^(b) Representing less than 0.5% of the Fund’s total investments.

FUND SUMMARY 9

Fund Summary  as of December 31, 2018  BlackRock Capital Appreciation Portfolio

Investment Objective

BlackRock Capital Appreciation Portfolio’s (the “Fund”) investment objective is to seek long term growth of capital.

Portfolio Management Commentary

How did the Fund perform?

For the 12-month period ended December 31, 2018, the Fund outperformed its benchmark, the Russell 1000^® Growth Index, and the broad market S&P 500^® Index. The following discussion of relative performance pertains to the Russell 1000^® Growth Index.

What factors influenced performance?

On a sector basis, the largest contributor to relative performance was consumer discretionary where internet & direct marketing retail holdings had the most positive impact. Selection within hotels, restaurants & leisure and a lack of exposure to media also added value within the sector. Health care and industrials were additional sources of strength. Within health care, equipment & supplies and life sciences tools & services holdings drove gains, while positioning to machinery and zero exposure to air freight & logistics benefited performance in industrials.

The top individual contributors were Amazon.com Inc. and Netflix Inc. Amazon outperformed as the company delivered a series of strong earnings reports, with revenue acceleration in North America, International, Prime, Amazon Web Services (“AWS”) and advertising. In addition, Amazon’s operating margin expansion has been notable, driven by advertising, subscription services, AWS and shipping efficiencies. Netflix continued to outperform after a series of strong earnings reports. The company exceeded 23 million global net subscriber additions for 2017 and is on pace to exceed 28 million in 2018, ahead of forecasts.

Conversely, communication services detracted from performance with entertainment holdings hindering results. Consumer staples and materials also weighed on performance. Selection within beverages was a drag in consumer staples, while an overweight to construction materials was a weakness in materials (at period end the Fund had zero exposure to construction materials).

The top detractors over the annual period were Tencent Holdings Ltd. and Constellation Brands Inc. Tencent underperformed amid U.S./China trade tensions, weakness in the Chinese stock market, regulatory uncertainty and questions around timing of game launches and monetization. In addition, data showed a modest decline in Tencent’s share of mobile user time spent. Constellation has underperformed on investor concerns over sales growth for its Mexican import beers and overall beer profit margin growth, as well over reinvestment risk in cannabis and hemp company Canopy Growth. Constellation announced a $4 billion investment in Canopy Growth during the second quarter. 

Describe recent portfolio activity.

Due to a combination of portfolio trading activity, market movement and sector reclassifications during the 12-month period, the portfolio’s weighting in the communication services sector increased, particularly within entertainment and interactive media & services. Health care exposure also increased, namely within equipment & supplies and pharmaceuticals. Exposure to information technology decreased, largely with respect to internet software & services. Consumer discretionary exposure, namely within specialty retail, declined as well.

Describe portfolio positioning at period end.

As of period end, the Fund’s largest overweight relative to the Russell 1000^® Growth Index was the health care sector, followed by communication services. Industrials was the largest sector underweight, followed by consumer staples.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

10 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Fund Summary  as of December 31, 2018 (continued) BlackRock Capital Appreciation Portfolio

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a) Assuming transaction costs and other operating expenses, including investment advisory fees, if any. Does not include insurance-related fees and expenses. The Fund invests primarily in a diversified portfolio consisting primarily of common stock of U.S. companies that the investment adviser believes have exhibited above-average growth rates in earnings over the long term.

^(b) This unmanaged index covers 500 leading companies and captures approximately 80% coverage of available market capitalization.

^(c) This unmanaged index measures the performance of the large cap growth segment of the U.S. equity universe and consists of those Russell 1000^® securities with higher price-to-book ratios and higher forecasted growth values.

Performance Summary for the Period Ended December 31, 2018

	6-Month Total Returns  (a)			Average Annual Total Returns (a)
				1 Year			5 Years			10 Years
BlackRock Capital Appreciation Portfolio		(10.78	)%		2.42	%		9.93	%		14.05	%
S&P 500® Index		(6.85	)		(4.38	)		8.49			13.12
Russell 1000® Growth Index		(8.17	)		(1.51	)		10.40			15.29

^(a)  Cumulative and average annual total returns are based on changes in net asset value for the periods shown and assume reinvestment of all distributions at net asset value on the ex-dividend date. Insurance-related fees and expenses are not reflected in these returns.

Past performance is not indicative of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Expense Example

	Actual						Hypothetical (a)
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Annualized Expense Ratio
BlackRock Capital Appreciation Portfolio	$	1,000.00	$	892.20	$	2.34	$	1,000.00	$	1,022.74	$	2.50		0.49	%

^(a)  Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

^(b)  Expenses are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

See “Disclosure of Expenses” on Page 18 for further information on how expenses were calculated.

FUND SUMMARY 11

Fund Summary  as of December 31, 2018 (continued) BlackRock Capital Appreciation Portfolio

Portfolio Information

SECTOR ALLOCATION

Sector	Percent of Net Assets
Information Technology		32	%
Health Care		19
Consumer Discretionary		16
Communication Services		15
Industrials		6
Financials		5
Consumer Staples		2
Real Estate		2
Materials		1
Short-Term Securities		5
Liabilities in Excess of Other Assets		(3	)
For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine sector sub classifications for reporting ease.

12 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Fund Summary  as of December 31, 2018 BlackRock Global Allocation Portfolio

Investment Objective

BlackRock Global Allocation Portfolio’s (the “Fund”) investment objective is to seek high total investment return.

Portfolio Management Commentary

How did the Fund perform?

For the 12-month period ended December 31, 2018, the Fund underperformed its Reference Benchmark and outperformed the broad-based all-equity benchmark, the FTSE World Index. The Reference Benchmark is comprised as follows: 36% S&P 500^® Index; 24% FTSE World (ex-U.S.) Index; 24% ICE BofAML Current 5-Year U.S. Treasury Index; and 16% FTSE Non-US Dollar World Government Bond Index. The Fund invests in both equities and bonds, and therefore, Fund management believes that the Reference Benchmark provides a more accurate representation of the Fund’s composition and a more comparable means for measurement. The following discussion of relative performance pertains to the Reference Benchmark. The following commentary (and referenced allocation percentages) are based on the economic exposures of the Fund, which reflect adjustments for futures, swaps and options (except with respect to fixed income securities), and convertible bonds, and may vary relative to the market value.

What factors influenced performance?

Within equities, the Fund’s overweight to Japan and underweight to the United States detracted from performance. In Europe, exposure to financials negatively influenced returns. From a sector perspective, an overweight to and stock selection within energy weighed on returns, as did stock selection within information technology (“IT”), health care, consumer discretionary, materials and real estate. Broadly speaking, an underweight to fixed income negatively impacted returns. Within fixed income, an overweight stance with respect to U.S. duration (and corresponding sensitivity to interest rate changes) weighed on performance, as did exposure to select emerging market government bonds. Exposure to commodity-related securities detracted as well. In terms of currency management, an overweight to the Indian rupee negatively impacted performance.

Within equities, an overweight to India positively impacted returns. From a sector perspective, overweight positions to health care and technology and underweights to consumer staples, financials and industrials contributed to performance. Stock selection within utilities and industrials was additive. The Fund’s performance also benefited from exposure to cash and cash equivalents. With respect to currency exposure, an underweight to the euro and an overweight to the U.S. dollar contributed to performance.

The Fund uses derivatives, which may include options, futures, swaps, and forward contracts both to seek to enhance returns of the Fund and to hedge (or protect) against adverse movements in currency exchange rates, interest rates, and movements in the securities markets. During the period, the Fund’s use of derivatives detracted from its performance.

Describe recent portfolio activity.

During the 12-month period, the Fund’s overall equity allocation decreased from 62% to 58% of net assets. Within equities, the Fund decreased exposure to Europe, notably the United Kingdom, Germany and France, and increased exposure to Canada and Brazil. From a sector perspective, the Fund decreased exposure to IT, financials, industrials and consumer discretionary, and increased exposure to healthcare, consumer staples and communication services.

The Fund’s overall allocation to fixed income increased from 31% to 33% of net assets. Within fixed income, the Fund increased exposure to government bonds and corporate credit.

The Fund’s exposure to commodity-related securities decreased from 4% to 2% of net assets.

Reflecting the above changes, the Fund’s holdings of cash and cash equivalents increased from 3% to 7% of net assets. During the 12-month period, the Fund’s cash position helped mitigate portfolio volatility and served as a source of funds for new investments and redemptions.

Describe portfolio positioning at period end.

Relative to its Reference Benchmark, the Fund was underweight in equities and fixed income, and overweight in commodity-related securities and cash. Within equities, the Fund was overweight in Asia and underweight in the United States and Europe. Within Asia, the Fund was overweight in Japan, China and India, and underweight in Australia. Within Europe, the Fund was overweight in the Netherlands and underweight in the United Kingdom, Germany and Switzerland. From a sector perspective, the Fund was overweight in communication services, energy and health care, and was underweight in financials, information technology, industrials and consumer discretionary. Within fixed income, the Fund was underweight in developed market government bonds and overweight in corporate debt. With respect to currency exposure, the Fund was overweight in the U.S. dollar, Indian rupee and Hong Kong dollar, and underweight in the euro, Australian dollar, Swiss franc and British pound.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

FUND SUMMARY 13

Fund Summary  as of December 31, 2018 (continued) BlackRock Global Allocation Portfolio

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a) Assuming transaction costs, if any, and other operating expenses, including investment advisory fees. Does not include insurance-related fees and expenses.

^(b) The Fund invests in a portfolio of U.S. and foreign equity securities, debt and money market securities, the combination of which will be varied from time to time with respect to types of securities and markets in response to changing markets and economic trends.

^(c)  This unmanaged capitalization-weighted index is comprised of 2,602 equities from 35 countries in 4 regions, including the United States.

^(d) The Reference Benchmark is an unmanaged weighted index comprised as follows: 36% S&P 500^® Index; 24% FTSE World (ex-U.S.) Index; 24% ICE BofAML Current 5-Year U.S. Treasury Index; and 16% FTSE Non-U.S. Dollar World Government Bond Index.

Performance Summary for the Period Ended December 31, 2018

				Average Annual Total Returns (a)
	6-Month Total Returns (a)			1 Year			5 Years			10 Years
BlackRock Global Allocation Portfolio		(5.89	)%		(7.27	)%		2.31	%		6.40	%
FTSE World Index		(8.72	)		(8.77	)		4.91			10.13
Reference Benchmark		(4.47	)		(4.68	)		3.87			7.35
U.S. Stocks: S&P 500 Index(b)		(6.85	)		(4.38	)		8.49			13.12
Non U.S. Stocks: FTSE World (ex-U.S.) Index(c)		(10.68	)		(13.81	)		1.08			7.05
U.S. Bonds: ICE BofAML Current 5-Year U.S. Treasury Index(d)		2.56			1.46			1.42			2.09
Non U.S. Stocks: FTSE Non U.S. Dollar World Government Bond Index(e)		(0.91	)		(1.82	)		0.28			1.27

^(a) Cumulative and average annual total returns are based on changes in net asset value for the periods shown and assume reinvestment of all distributions at net asset value on the ex-dividend date. Insurance-related fees and expenses are not reflected in these returns.

^(b) This unmanaged index covers 500 leading companies and captures approximately 80% coverage of available market capitalization.

^(c) This unmanaged capitalization-weighted index comprised of 1,979 equities from 34 countries, excluding the United States.

^(d) This unmanaged index is designed to track the total return of the current coupon five-year U.S. Treasury bond.

^(e) This unmanaged market capitalization-weighted index tracks 22 government bond indexes, excluding the United States.

Past performance is not indicative of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Expense Example

	Actual								Hypothetical (a)
					Including dividend expense		Excluding dividend expense				Including dividend expense				Excluding dividend expense
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Expenses Paid During the Period (c)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Ending Account Value (12/31/18)		Expenses Paid During the Period (c)
BlackRock Global Allocation Portfolio	$	1,000.00	$	941.10	$	2.84	$	2.79	$	1,000.00	$	1,022.28	$	2.96	$	1,022.33	$	2.91

^(a) Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

^(b) Expenses are equal to the annualized expense ratio (0.58%), multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

^(c) Expenses are equal to the annualized expense ratio (0.57%), multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

See “Disclosure of Expenses” on page 18 for further information on how expenses were calculated.

14 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Fund Summary  as of December 31, 2018 (continued) BlackRock Global Allocation Portfolio

OVERALL ASSET EXPOSURE

	Percent of Fund’s Net Assets (a)						Reference Benchmark (b) Percentage (Open)
Portfolio Composition	12/31/2018			12/31/2017
U.S. Equities		31	%		32	%		35	%
European Equities		9			15			12
Asia Pacific Equities		15			14			10
Other Equities		3			1			3
Total Equities		58			62			60
U.S Dollar Denominated Fixed Income Securities		31			22			24
U.S. Issuers		29			19			—
Non-U.S. Issuers		2			3			—
Non-U.S Dollar Denominated Fixed Income Securities		2			9			16
Total Fixed Income Securities		33			31			40
Commodity-Related Securities		2			4
Cash & Short-Term Securities		7			3			—

^(a) Exposure based on market value and adjusted for the economic value of futures, swaps and options (except with respect to fixed income securities), and convertible bonds.

^(b) The Reference Benchmark is an unmanaged weighted index comprised as follows: 36% of the S&P 500 Index^®; 24% FTSE World (ex U.S.) Index; 24% ICE BofA Merrill Lynch Current 5-Year U.S. Treasury Index; and 16% FTSE Non-U.S. Dollar World Government Bond Index. Descriptions of these indexes are found on page 14 of this report to shareholders in the “Performance Summary” section.

FUND SUMMARY 15

Money Market Overview  For the 12-Month Period Ended December 31,  2018 BlackRock Government Money Market Portfolio

Noteworthy market conditions during 2018 included the continued steady removal of monetary accommodation by the Federal Open Market Committee (“FOMC”), the ongoing gradual reduction of the Fed’s balance sheet, increased Treasury bill issuance and various geopolitical events including trade-tariffs, the Italian elections, and Brexit uncertainty. 2018 was generally a strong year for cash as an asset class in terms of return and flows, but a volatile year for the overall financial markets.

The FOMC continued on their path to normalize monetary policy by hiking the federal funds rate four times during 2018, bringing the target range to 2.25%-2.50%. In the final statement of the year released by the FOMC at their December meeting, the FOMC’s assessments of economic growth, labor market conditions, and inflation were largely unchanged. As was generally expected, the “forward guidance” part of their statement was altered to signifying greater emphasis on a more “data dependent” approach to monetary policy. In another significant change, at the last FOMC meeting of the year, the FOMC’s interest rate forecast was revised to reflect just two hikes in 2019 (as compared with three hikes projected in the prior forecast in September). The outlook included one additional hike for 2020, while the median “longer run” rate forecast came down 0.25% to 2.75%.

In an effort to promote trading in the federal funds market at rates that are comfortably within the target range, the interest on overnight excess reserves rate (“IOER”) was raised just 0.20% to 2.40% at the June 2018 meeting. This move was widely viewed as a “technical adjustment” by the FOMC. As was the case with the technical adjustment in June, the FOMC followed the same action in December when they hiked the IOER by 0.20% and the federal funds range by 0.25%. To conclude the year, the Fed’s Summary of Economic Projections was updated to reflect modest declines in the near-term outlook for economic growth, while the unemployment rate was left unchanged.

U.S. Treasury bill supply during the year was robust, hitting record levels for net new issuance of $384 billion. Furthermore in October, the U.S. Treasury introduced the two-month Treasury bill to the market with a $25 billion initial offering while moving the auctions for four-week and eight-week Treasury bills to Thursdays. This move helped the Treasury to ladder maturing debt. Also of note, government agencies issued floating rate notes indexed to the Secured Overnight Financing Rate (“SOFR”), which is a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities, and is the reference rate eventually expected to replace the London Inter-Bank Offered Rate (“LIBOR”). In addition to the agency notes referenced to SOFR, some large financial institutions also issued certificates of deposit and commercial paper linked to this index, and demand for such obligations was generally strong.

Credit spreads were periodically elevated in 2018 for a multitude of reasons including the surge in Treasury bill issuance, a lack of clarity about repatriation related flows early in the year, and bank balance sheet and funding pressures toward the end of the period. For example, credit spreads as evidenced by the three-month LIBOR and overnight indexed swaps widened out to 0.60% in April. This measure later contracted to around 0.17% by early October, before subsequently rising to a high of 0.43% later in the fourth quarter.

In our view, the FOMC’s interest rate normalization campaign appears closer to winding down, although a few additional interest rate hikes remain possible in 2019, subject to further declines in the unemployment rate, upward pressure on inflation, and an easing in financial conditions. That said, we believe the bar for further action has materially risen. We also surmise that the timing of any additional hikes has become less certain and could occur outside of the quarterly meeting cycle that market participants have generally been accustomed to, given the FOMC’s emphasis on “data-dependence.” The implementation of a press conference after every FOMC meeting reinforces to us this possibility. The net new supply of Treasury bills is expected to contract during the first quarter of 2019 as the U.S. Treasury reduces its cash balance in advance of the expiration of the suspension of the debt ceiling in early March. In the event that Congress does not address the debt ceiling in a timely fashion, we anticipate that extraordinary measures would be used to provide additional borrowing authority until around the third quarter of 2019.

Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.

16 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Fund Summary  as of December 31, 2018 BlackRock Government Money Market Portfolio

Investment Objective

BlackRock Government Money Market Portfolio’s (the “Fund”) investment objective is to seek to preserve capital, to maintain liquidity and achieve the highest possible current income consistent with the foregoing.

Portfolio Information

PORTFOLIO COMPOSITION

Asset Type	Percent of Net Assets
U.S. Government Sponsored Agency Obligations		47	%
Repurchase Agreements		38
U.S. Treasury Obligations		11
Other Assets Less Liabilities		4

CURRENT SEVEN-DAY YIELDS

	7-Day SEC Yield			7-Day Yield
BlackRock Government Money Market Portfolio		1.99	%		1.99	%

The 7-Day SEC Yield may differ from the 7-Day Yield shown above due to the fact that the 7-Day SEC Yield excludes distributed capital gains.

Past performance is not indicative of future results.

Expense Example

	Actual						Hypothetical (a)
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Annualized Expense Ratio
BlackRock Government Money Market Portfolio	$	1,000.00	$	1,008.40	$	2.53	$	1,000.00	$	1,022.68	$	2.55		0.50	%

^(a)  Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

^(b)  Expenses are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

See “Disclosure of Expenses” on page 18 for further information on how expenses were calculated.

FUND SUMMARY 17

Fund Summary  as of December 31, 2018 BlackRock High Yield Portfolio

Investment Objective

BlackRock High Yield Portfolio’s (the “Fund”) investment objective is to seek to maximize total return, consistent with income generation and prudent investment management.

Portfolio Management Commentary

How did the Fund perform?

During the 12-month period ended December 31, 2018, the Fund underperformed the benchmark, the Bloomberg Barclays U.S. Corporate High Yield 2% Issuer Capped Index.

What factors influenced performance?

The past year was a challenging time for the high yield market. After producing a modest gain through the end of September, the index declined 5.10% in the fourth quarter due to the combination of slowing economic growth, falling oil prices and heightened investor risk aversion. The index closed the year with a loss of 2.08% as a result.

Security selection in the wireless, independent energy and metals & mining industries detracted from Fund performance. Security selection in the not-rated segment of the market, as well as an overweight allocation to CCC rated positions detracted, as well. Tactical allocations to equities and floating rate loan interests (“bank loans”) also detracted, largely due to their poor returns in the fourth quarter.

Security selection in the gaming and oilfield services contributed to performance, as did an underweight position in the midstream energy sector. Security selection in BB and B rated bonds also added value.

At period end, the Fund had a slightly above average cash balance. The cash balance did not have a material impact on Fund performance.

Describe recent portfolio activity.

The Fund actively managed risk throughout the annual period and ended the year with a beta of slightly less than 1.0. (Beta measures a security’s sensitivity to the movements of the market as a whole. A beta of greater than one indicates more volatility than the market, while a beta of less than one indicates lower volatility.)

The Fund added to its weighting in bank loans on the belief that these senior, secured assets provide attractive income with minimal interest-rate risk. The Fund held a steady credit positioning over the course of the year, with underweight positions in BB rated issues and overweights in the B and CCC credit tiers. The Fund maintained an underweight in consumer cyclicals on the belief that the industry faces fundamental headwinds. The portfolio was slightly underweight in energy, with a preference for the independent energy industry.

Describe portfolio positioning at period end.

The Fund’s general investment themes and core positions reflected the investment adviser’s views regarding issuer cash flows, firm or industry catalysts, and idiosyncratic factors.

The Fund was underweight in the market’s “tails” — both the higher-yielding segment that contains a larger concentration of stressed assets, as well as the portion that features higher quality and lower yields. With that said, the Fund maintained a position in select CCC rated issues with improving credit positions and/or attractive yields.

At the industry level, the Fund’s largest overweight positions were in technology, wireless and chemicals. Conversely, the Fund was underweight in the retail, automotive and consumer products industries. The Fund had an approximately 15% weighting in bank loans, coupled with smaller allocations to both preferred and common stocks.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions.

These views are not intended to be a forecast of future events and are no guarantee of future results.

18 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Fund Summary  as of December 31, 2018 (continued) BlackRock High Yield Portfolio

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a) Assuming transaction costs and other operating expenses, including investment advisory fees, if any. Does not include insurance-related fees and expenses. The Fund invests primarily in non-investment grade bonds with maturities of ten years or less. On September 17, 2018, the Fund acquired all the assets, subject to the liabilities of BlackRock High Yield Portfolio (the “Predecessor Fund”), a series of BlackRock Series Fund, Inc., through a tax-free reorganization (the “Reorganization”). The Predecessor Fund is the performance and accounting survivor of the Reorganization. The Fund’s total returns prior to October 1, 2011 are the returns of the Predecessor Fund when it followed a different investment objective and different investment strategies under the name “BlackRock High Income Portfolio”.

^(b) This unmanaged index is comprised of issues that meet the following criteria: at least $150 million par value outstanding; maximum credit rating of Ba1; at least one year to maturity; and no issuer represents more than 2% of the index.

Performance Summary for the Period Ended December 31, 2018

	Standardized 30-Day Yield (b)			Unsubsidized 30-Day Yield (b)			6-Month Total Returns (a)			Average Annual Total Returns (a)
										1 Year			5 Years			10 Years
BlackRock High Yield Portfolio		7.04	%		5.54	%		(3.00	)%		(2.31	)%		3.23	%		10.59	%
Bloomberg Barclays U.S. Corporate High Yield 2% Issuer Capped Index		—			—			(2.24	)		(2.08	)		3.84			11.14

^(a)  Cumulative and average annual total returns are based on changes in net asset value for the periods shown and assume reinvestment of all distributions at net asset value on the ex-dividend/payable date. Insurance-related fees and expenses are not reflected in these returns. On September 17, 2018, the Fund acquired the assets, subject to the liabilities of BlackRock High Yield Portfolio (the “Predecessor Fund”), a series of BlackRock Series Fund, Inc., through a tax-free reorganization (the “Reorganization”). The Predecessor Fund is the performance and accounting survivor of the Reorganization. The Fund’s total returns prior to October 1, 2011 are the returns of the Predecessor Fund when it followed a different investment objective and different investment strategies under the name “BlackRock High Income Portfolio”.

^(b)  The standardized 30-day yield includes the effects of any waivers and/or reimbursements. The unsubsidized 30-day yield excludes the effects of any waivers and/or reimbursements.

Past performance is not indicative of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Expense Example

	Actual						Hypothetical (a)
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Annualized Expense Ratio
BlackRock High Yield Portfolio	$	1,000.00	$	970.00	$	2.48	$	1,000.00	$	1,022.68	$	2.55		0.50	%

^(a)  Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

^(b)  Expenses are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

See “Disclosure of Expenses” on page 18 for further information on how expenses were calculated.

FUND SUMMARY 19

Fund Summary  as of December 31, 2018 (continued) BlackRock High Yield Portfolio

Portfolio Information

CREDIT QUALITY ALLOCATION

Credit Rating (a)	Percent of Total Investments (b)
BBB/Baa		6	%
BB/Ba		35
B		46
CCC/Caa		10
NR		3

^(a)  For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P Global Ratings or Moody’s Investors Service if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

^(b)  Total investments exclude short-term securities.

20 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Fund Summary  as of December 31, 2018 BlackRock U.S. Government Bond Portfolio

Investment Objective

BlackRock U.S. Government Bond Portfolio’s (the “Fund”) investment objective is to seek to maximize total return, consistent with income generation and prudent investment management.

Portfolio Management Commentary

How did the Fund perform?

For the 12-month period ended December 31, 2018, the Fund underperformed its benchmark, the Bloomberg Barclays U.S. Government/Mortgage Index.

What factors influenced performance?

The largest detractors from performance relative to the benchmark included an allocation to Treasury inflation protected securities. Security selection within 30-year agency mortgage-backed securities (“MBS”) and the Fund’s underweighting of 15-year agency MBS also weighed on the Fund’s return.

Positive contributors to performance relative to the benchmark included the Fund’s stance with respect to U.S. interest rates. A below-benchmark stance with respect to duration (and corresponding interest rate sensitivity) aided return as rates rose. In addition, the Fund’s positioning along the U.S. Treasury yield curve added to performance. Allocations to securitized sectors including commercial mortgage-backed securities (“CMBS”), agency collateralized mortgage obligations (“CMOs”) and senior floating rate collateralized loan obligations (“CLOs”) also contributed positively. These segments continued to benefit from favorable fundamentals around the U.S. consumer, housing and commercial real estate. The Fund’s strategies with respect to both global interest rates and currencies added to relative performance as well.

Describe recent portfolio activity.

During the 12-month period, the Fund decreased its allocation to U.S. government securities, while adding exposures in agency MBS, primarily in pass-throughs with a smaller increase to CMOs. The Fund kept its out-of-benchmark allocation to securitized assets roughly unchanged during the period, adding some exposures in CMBS while trimming exposures in CLOs. The Fund maintained an underweight stance with respect to duration, with the degree of underweight decreasing over the period.

The Fund held a small percentage of assets in derivatives including options and futures contracts as a means to manage risk to allocations in MBS and securitized assets. The Fund’s use of derivatives provided a positive return to Fund performance.

Describe portfolio positioning at period end.

At period end, the Fund was slightly underweight in agency MBS relative to the benchmark, with exposures continuing to favor higher coupons relative to lower coupons, given valuations that appeared attractive relative to the underlying fundamentals. The Fund continued to hold a core allocation to agency CMBS and CMOs for carry (incremental income), while pursuing an increased allocation to CMBS owing to attractive valuations versus low coupon MBS. The Fund was modestly short U.S. duration. Outside of the United States, the Fund was tactically short at the long-end of the German yield curve in anticipation of a heavy January supply calendar. The Fund was also positioned with a short real rate position in the United Kingdom on the belief that the market was pricing an overly negative outcome from Brexit negotiations. Lastly, the Fund had a short position in the middle of the Japanese curve on the view that valuations for that segment were stretched.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions.

These views are not intended to be a forecast of future events and are no guarantee of future results.

Portfolio Information

PORTFOLIO COMPOSITION

Asset Type	Percent of Total Investments (a)
U.S. Government Sponsored Agency Securities		61	%
U.S. Treasury Obligations		35
Asset-Backed Securities		2
Non-Agency Mortgage-Backed Securities		2
Foreign Government Obligations			—(b)

^(a)  Total investments exclude short-term securities, options purchased, options written and TBA sale commitments.

^(b)  Representing less than 0.5% of the Fund’s total long investments.

FUND SUMMARY 21

Fund Summary  as of December 31, 2018 (continued) BlackRock U.S. Government Bond Portfolio

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a) Assuming transaction costs and other operating expenses, including investment advisory fees, if any. Does not include insurance-related fees and expenses. The Fund, under normal circumstances, will invest at least 80% of its assets in bonds that are issued or guaranteed by the U.S. Government and its agencies. On September 17, 2018, the Fund acquired all of the assets, subject to the liabilities, of BlackRock U.S. Government Bond Portfolio (the “Predecessor Fund”), a series of BlackRock Series Fund, Inc., through a tax-free reorganization (the “Reorganization”). The Predecessor Fund is the performance and accounting survivor of the Reorganization. The Predecessor Fund’s total returns prior to October 1, 2011 are the returns of the Fund when it followed a different investment objective and different investment strategies under the name “BlackRock Government Income Portfolio.”

^(b) This index measures debt issued by the U.S. Government, and its agencies, as well as mortgage-backed pass-through securities of Ginnie Mae, Fannie Mae and Freddie Mac.

^(c) This unmanaged index includes the mortgage-backed pass-through securities of Ginnie Mae, Fannie Mae and Freddie Mac that meet certain maturity and liquidity criteria.

Performance Summary for the Period Ended December 31, 2018

	Standardized 30-Day Yield (b)			Unsubsidized 30-Day Yield  (b)			6-Month Total Returns (a)			Average Annual Total Returns (a)
										1 Year			5 Years			10 Years
BlackRock U.S. Government Bond Portfolio		2.72	%		2.15	%		1.46	%		0.77	%		2.09	%		2.31	%
Bloomberg Barclays U.S. Government/Mortgage Index		—			—			1.96			0.93			2.22			2.61
Bloomberg Barclays U.S. Mortgage-Backed Securities Index		—			—			1.96			0.99			2.53			3.11

^(a) Cumulative and average annual total returns are based on changes in net asset value for the periods shown and assume reinvestment of all distributions at net asset value on the ex-dividend/payable date. Insurance-related fees and expenses are not reflected in these returns. On September 17, 2018, the Fund acquired all of the assets, subject to the liabilities, of BlackRock U.S. Government Bond Portfolio (the “Predecessor Fund”), a series of BlackRock Series Fund, Inc., through a tax-free reorganization (the “Reorganization”). The Predecessor Fund is the performance and accounting survivor of the Reorganization. The Predecessor Fund’s total returns prior to October 1, 2011 are the returns of the Fund when it followed a different investment objective and different investment strategies under the name “BlackRock Government Income Portfolio.”

^(b) The standardized 30-day yield includes the effects of any waivers and/or reimbursements. The unsubsidized 30-day yield excludes the effects of any waivers and/or reimbursements

Past performance is not indicative of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Expense Example

	Actual								Hypothetical (a)
					Including Interest Expense		Excluding Interest Expense				Including Interest Expense				Excluding Interest Expense
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Expenses Paid During the Period (c)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (b)		Ending Account Value (12/31/18)		Expenses Paid During the Period (c)
BlackRock U.S. Government Bond Portfolio	$	1,000.00	$	1,014.60	$	5.08	$	2.54	$	1,000.00	$	1,020.16	$	5.09	$	1,022.68	$	2.55

^(a)  Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

^(b)  Expenses are equal to the annualized expense ratio (1.00%), multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

^(c)  Expenses are equal to the annualized expense ratio (0.50%), multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown).

See “Disclosure of Expenses” on page 18 for further information on how expenses were calculated.

22 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

The Benefits and Risks of Leveraging

The Funds may utilize leverage to seek to enhance returns and net asset value (“NAV”). However, there is no guarantee that these objectives can be achieved in all interest rate environments.

The Funds may utilize leverage by entering into reverse repurchase agreements.

In general, the concept of leveraging is based on the premise that the financing cost of leverage, which is based on short-term interest rates, is normally lower than the income earned by each Fund on its longer-term portfolio investments purchased with the proceeds from leverage. To the extent that the total assets of each Fund (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, the Funds’ shareholders benefit from the incremental net income.

The interest earned on securities purchased with the proceeds from leverage is distributed to the Funds’ shareholders, and the value of these portfolio holdings is reflected in the Funds’ per share NAV. However, in order to benefit shareholders, the return on assets purchased with leverage proceeds must exceed the ongoing costs associated with the leverage. If interest and other ongoing costs of leverage exceed a Fund’s return on assets purchased with leverage proceeds, income to shareholders is lower than if the Funds had not used leverage.

Furthermore, the value of each Fund’s portfolio investments generally varies inversely with the direction of long-term interest rates, although other factors can also influence the value of portfolio investments. As a result, changes in interest rates can influence each Fund’s NAV positively or negatively in addition to the impact on each Fund’s performance from leverage. Changes in the direction of interest rates are difficult to predict accurately, and there is no assurance that a Fund’s leveraging strategy will be successful.

The use of leverage also generally causes greater changes in each Fund’s NAV and dividend rates than comparable portfolios without leverage. In a declining market, leverage is likely to cause a greater decline in the NAV of a Fund’s shares than if the Fund were not leveraged. In addition, each Fund may be required to sell portfolio securities at inopportune times or at distressed values in order to comply with regulatory requirements applicable to the use of leverage or as required by the terms of the leverage instruments, which may cause the Funds to incur losses. The use of leverage may limit a Fund’s ability to invest in certain types of securities or use certain types of hedging strategies. Each Fund incurs expenses in connection with the use of leverage, all of which are borne by each Fund’s shareholders and may reduce income.

Disclosure of Expenses

Shareholders of the Funds may incur the following charges: (a) transactional expenses, and (b) operating expenses, including investment advisory fees, service and distribution fees, including 12b-1 fees, acquired fund fees and expenses, and other fund expenses. The expense examples on the previous pages (which are based on a hypothetical investment of $1,000 invested on July 1, 2018 and held through December 31, 2018) are intended to assist shareholders both in calculating expenses based on an investment in each Fund and in comparing these expenses with similar costs of investing in other mutual funds.

The expense examples provide information about actual account values and actual expenses. In order to estimate the expenses a shareholder paid during the period covered by this report, shareholders can divide their account value by $1,000 and then multiply the result by the number corresponding to their Fund under the headings entitled “Expenses Paid During the Period.”

The expense examples also provide information about hypothetical account values and hypothetical expenses based on a Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. In order to assist shareholders in comparing the ongoing expenses of investing in these Funds and other funds, compare the 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

The expenses shown in the expense examples are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as sales charges, if any. Therefore, the hypothetical examples are useful in comparing ongoing expenses only, and will not help shareholders determine the relative total expenses of owning different funds. If these transactional expenses were included, shareholder expenses would have been higher.

Derivative Financial Instruments

The Funds may invest in various derivative financial instruments. These instruments are used to obtain exposure to a security, commodity, index, market, and/or other assets without owning or taking physical custody of securities, commodities and/or other referenced assets or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage and involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the instrument. The Funds’ successful use of a derivative financial instrument depends on the investment adviser’s ability to predict pertinent market movements accurately, which cannot be assured. The use of these instruments may result in losses greater than if they had not been used, may limit the amount of appreciation a Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Funds’ investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.

THE BENEFITS AND RISKS OF LEVERAGING / DISCLOSURE OF EXPENSES / DERIVATIVE FINANCIAL INSTRUMENTS 23

Schedule of Investments   December 31, 2018 BlackRock Advantage Large Cap Core Portfolio (Percentages shown are based on Net Assets)

Security	Shares		Value
Common Stocks — 98.8%
Aerospace & Defense — 2.3%
Boeing Co. (The)		4,096	$	1,320,960
General Dynamics Corp.		1,270		199,656
Lockheed Martin Corp.		1,794		469,741
Raytheon Co.(a)		11,745		1,801,096
				3,791,453
Airlines — 0.4%
Delta Air Lines, Inc.		3,349		167,115
Southwest Airlines Co.		11,940		554,971
				722,086
Auto Components — 0.1%
BorgWarner, Inc.		2,911		101,128
Automobiles — 0.1%
Ford Motor Co.		9,563		73,157
General Motors Co.		3,083		103,126
				176,283
Banks — 5.7%
Bank of America Corp.		128,879		3,175,579
BB&T Corp.		17,349		751,559
Citigroup, Inc.		14,671		763,772
Citizens Financial Group, Inc.		25,358		753,893
Cullen/Frost Bankers, Inc.		917		80,641
East West Bancorp, Inc.		4,890		212,862
First Republic Bank(a)		8,633		750,208
JPMorgan Chase & Co.		16,791		1,639,137
Wells Fargo & Co.		24,926		1,148,590
				9,276,241
Beverages — 1.5%
Coca-Cola European Partners plc		10,469		480,004
Constellation Brands, Inc., Class A		1,935		311,187
Keurig Dr. Pepper, Inc.		1,218		31,229
Molson Coors Brewing Co., Class B		1,186		66,606
Monster Beverage Corp.(b)		7,677		377,862
PepsiCo, Inc.		10,182		1,124,907
				2,391,795
Biotechnology — 4.0%
AbbVie, Inc.		15,335		1,413,734
Amgen, Inc.		6,672		1,298,838
Biogen, Inc.(b)		1,069		321,683
Celgene Corp.(b)		16,353		1,048,064
Genomic Health, Inc.(b)		1,083		69,756
Gilead Sciences, Inc.		28,413		1,777,233
Incyte Corp.(b)		588		37,391
Regeneron Pharmaceuticals, Inc.(b)		347		129,604
Vertex Pharmaceuticals, Inc.(b)		1,922		318,495
				6,414,798
Building Products — 0.3%
Allegion plc		5,667		451,717
Capital Markets — 3.4%
Charles Schwab Corp. (The)		37,301		1,549,110
CME Group, Inc.(a)		4,130		776,936
Evercore, Inc., Class A		1,621		115,999
Moelis & Co., Class A		8,574		294,774
Morgan Stanley		52,526		2,082,656
S&P Global, Inc.		3,774		641,354
SEI Investments Co.		451		20,836
TD Ameritrade Holding Corp.(a)		398		19,486
				5,501,151

Security	Shares		Value
Chemicals — 1.7%
Air Products & Chemicals, Inc.		9,508	$	1,521,755
Celanese Corp.(a)		4,531		407,654
Eastman Chemical Co.		3,626		265,097
Ecolab, Inc.		2,687		395,930
Huntsman Corp.		954		18,403
Linde plc		944		147,302
Mosaic Co. (The)		573		16,737
				2,772,878
Commercial Services & Supplies — 0.2%
Clean Harbors, Inc.(b)		4,246		209,540
Waste Connections, Inc.		739		54,871
				264,411
Communications Equipment — 1.1%
Ciena Corp.(b)		6,226		211,124
Cisco Systems, Inc.		23,674		1,025,794
Motorola Solutions, Inc.		3,189		366,863
Palo Alto Networks, Inc.(a)(b)		721		135,800
				1,739,581
Construction Materials — 0.1%
Martin Marietta Materials, Inc.		339		58,264
Vulcan Materials Co.		288		28,454
				86,718
Consumer Finance — 0.8%
American Express Co.		12,260		1,168,623
Capital One Financial Corp.		1,482		112,025
				1,280,648
Containers & Packaging — 0.3%
Packaging Corp. of America		3,307		276,002
WestRock Co.		7,419		280,142
				556,144
Diversified Consumer Services — 0.2%
H&R Block, Inc.		12,219		309,996
Diversified Financial Services — 1.5%
Berkshire Hathaway, Inc., Class B(b)		12,112		2,473,028
Diversified Telecommunication Services — 1.4%
AT&T, Inc.		25,450		726,343
Verizon Communications, Inc.		26,917		1,513,274
				2,239,617
Electric Utilities — 2.0%
IDACORP, Inc.		4,476		416,537
OGE Energy Corp.		13,517		529,731
Pinnacle West Capital Corp.		15,320		1,305,264
Portland General Electric Co.		19,581		897,789
Xcel Energy, Inc.		1,131		55,724
				3,205,045
Electrical Equipment — 0.9%
AMETEK, Inc.		5,639		381,760
Rockwell Automation, Inc.		7,284		1,096,097
				1,477,857
Electronic Equipment, Instruments & Components — 0.9%
CDW Corp.		7,331		594,178
Keysight Technologies, Inc.(b)		391		24,273
National Instruments Corp.		15,200		689,776
Zebra Technologies Corp., Class A(b)		747		118,945
				1,427,172
Energy Equipment & Services — 0.5%
Halliburton Co.		27,385		727,893
Nabors Industries Ltd.(a)		14,330		28,660
				756,553

24 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Advantage Large Cap Core Portfolio (Percentages shown are based on Net Assets)

Security	Shares		Value
Entertainment — 1.1%
Activision Blizzard, Inc.		1,093	$	50,901
Electronic Arts, Inc.(b)		5,011		395,418
Netflix, Inc.(b)		2,079		556,465
Twenty-First Century Fox, Inc., Class A		2,475		119,097
Twenty-First Century Fox, Inc., Class B		1,751		83,663
Viacom, Inc., Class B		16,854		433,148
World Wrestling Entertainment, Inc., Class A(a)		1,673		125,006
				1,763,698
Equity Real Estate Investment Trusts (REITs) — 3.7%
Equity LifeStyle Properties, Inc.		1,775		172,406
Host Hotels & Resorts, Inc.		37,488		624,925
Outfront Media, Inc.		2,836		51,388
Park Hotels & Resorts, Inc.		28,170		731,857
Prologis, Inc.		34,386		2,019,146
Realty Income Corp.		17,637		1,111,837
Simon Property Group, Inc.		7,959		1,337,032
				6,048,591
Food & Staples Retailing — 1.0%
Costco Wholesale Corp.		6,836		1,392,561
Walmart, Inc.		2,464		229,522
				1,622,083
Food Products — 2.0%
Archer-Daniels-Midland Co.		31,835		1,304,280
Hershey Co. (The)		15,336		1,643,713
Kellogg Co.		1,058		60,317
Lamb Weston Holdings, Inc.		1,954		143,736
Tyson Foods, Inc., Class A		1,336		71,342
				3,223,388
Gas Utilities — 0.5%
Atmos Energy Corp.		7,538		698,923
UGI Corp.		842		44,921
				743,844
Health Care Equipment & Supplies — 3.1%
Abbott Laboratories		7,086		512,530
Danaher Corp.		11,615		1,197,739
DexCom, Inc.(b)		378		45,284
IDEXX Laboratories, Inc.(b)		897		166,860
Intuitive Surgical, Inc.(b)		860		411,871
Masimo Corp.(b)		2,545		273,257
Medtronic plc		5,541		504,009
STERIS plc		2,413		257,829
Stryker Corp.		9,938		1,557,782
				4,927,161
Health Care Providers & Services — 3.5%
AmerisourceBergen Corp.		6,807		506,441
Anthem, Inc.		395		103,739
Cardinal Health, Inc.		13,817		616,238
CVS Health Corp.		5,100		334,152
Halfmoon Parent, Inc.		750		142,533
Humana, Inc.		2,423		694,141
McKesson Corp.		5,721		631,999
Quest Diagnostics, Inc.		827		68,864
UnitedHealth Group, Inc.		9,626		2,398,029
WellCare Health Plans, Inc.(b)		985		232,549
				5,728,685
Health Care Technology — 0.3%(b)
athenahealth, Inc.		267		35,225
Cerner Corp.		481		25,224
Veeva Systems, Inc., Class A		5,632		503,050
				563,499

Security	Shares		Value
Hotels, Restaurants & Leisure — 2.2%
Boyd Gaming Corp.		1,374	$	28,552
Carnival Corp.		8,442		416,191
Darden Restaurants, Inc.		3,045		304,074
Domino’s Pizza, Inc.		2,949		731,322
Dunkin’ Brands Group, Inc.(a)		2,399		153,824
Extended Stay America, Inc.		12,315		190,882
Hilton Worldwide Holdings, Inc.		4,988		358,138
Las Vegas Sands Corp.		2,686		139,806
McDonald’s Corp.(a)		5,131		911,112
Norwegian Cruise Line Holdings Ltd.(b)		5,688		241,114
Yum! Brands, Inc.		655		60,208
				3,535,223
Household Durables — 0.3%
Garmin Ltd.		8,435		534,104
Household Products — 0.7%
Church & Dwight Co., Inc.		13,615		895,322
Clorox Co. (The)		1,012		155,990
Procter & Gamble Co. (The)		1,677		154,150
				1,205,462
Industrial Conglomerates — 0.9%
3M Co.		5,360		1,021,294
General Electric Co.		26,555		201,021
Honeywell International, Inc.		706		93,277
Roper Technologies, Inc.		224		59,701
				1,375,293
Insurance — 2.3%
Allstate Corp. (The)		11,797		974,786
American Financial Group, Inc.		5,959		539,468
Arthur J Gallagher & Co.		4,520		333,124
Athene Holding Ltd., Class A(b)		6,077		242,047
First American Financial Corp.		8,545		381,449
Hartford Financial Services Group, Inc. (The)		8,150		362,267
Lincoln National Corp.		2,438		125,094
Loews Corp.		521		23,716
Progressive Corp. (The)		4,375		263,944
Unum Group		15,995		469,933
				3,715,828
Interactive Media & Services — 4.4%(b)
Alphabet, Inc., Class A		1,765		1,844,355
Alphabet, Inc., Class C		2,084		2,158,211
Cargurus, Inc.		2,946		99,369
Facebook, Inc., Class A		19,249		2,523,351
Snap, Inc., Class A(a)		4,238		23,351
TripAdvisor, Inc.		965		52,052
Twitter, Inc.		2,711		77,914
Yelp, Inc.		9,591		335,589
				7,114,192
Internet & Direct Marketing Retail — 2.9%(b)
Amazon.com, Inc.		2,956		4,439,823
Booking Holdings, Inc.		147		253,196
				4,693,019
IT Services — 4.6%
Accenture plc, Class A		3,307		466,320
Amdocs Ltd.		278		16,285
Automatic Data Processing, Inc.		9,961		1,306,086
Booz Allen Hamilton Holding Corp.		15,596		702,912
Broadridge Financial Solutions, Inc.		2,166		208,478
Cognizant Technology Solutions Corp., Class A		576		36,564
Fidelity National Information Services, Inc.		6,521		668,729
First Data Corp., Class A(b)		5,296		89,555
GoDaddy, Inc., Class A(b)		5,558		364,716

SCHEDULES OF INVESTMENTS 25

Schedule of Investments  (continued) December 31, 2018 BlackRock Advantage Large Cap Core Portfolio (Percentages shown are based on Net Assets)

Security	Shares		Value
IT Services (continued)
International Business Machines Corp.		3,703	$	420,920
Mastercard, Inc., Class A		8,885		1,676,155
Paychex, Inc.		950		61,893
PayPal Holdings, Inc.(b)		3,301		277,581
Square, Inc., Class A(b)		1,300		72,917
Total System Services, Inc.		208		16,908
Visa, Inc., Class A		4,587		605,209
Western Union Co. (The)		24,184		412,579
				7,403,807
Life Sciences Tools & Services — 0.3%
Agilent Technologies, Inc.		5,476		369,411
Thermo Fisher Scientific, Inc.		195		43,639
				413,050
Machinery — 3.3%
Crane Co.		20,115		1,451,901
Illinois Tool Works, Inc.		9,532		1,207,609
Ingersoll-Rand plc		13,693		1,249,212
PACCAR, Inc.		18,635		1,064,804
Parker-Hannifin Corp.		137		20,432
Snap-on, Inc.		2,558		371,652
				5,365,610
Media — 1.9%
AMC Networks, Inc., Class A(b)		7,102		389,758
CBS Corp. (Non-Voting), Class B		8,234		359,991
Comcast Corp., Class A		31,002		1,055,618
Interpublic Group of Cos., Inc. (The)		16,483		340,044
Liberty Media Corp.-Liberty SiriusXM, Class A(b)		10,485		385,848
Liberty Media Corp.-Liberty SiriusXM, Class C(b)		12,683		469,017
Sinclair Broadcast Group, Inc., Class A		1,238		32,609
Sirius XM Holdings, Inc.		10,160		58,014
Tribune Media Co., Class A		598		27,137
				3,118,036
Metals & Mining — 0.3%
Newmont Mining Corp.		9,134		316,493
Reliance Steel & Aluminum Co.		1,900		135,223
Steel Dynamics, Inc.		1,846		55,454
				507,170
Multiline Retail — 0.9%
Target Corp.		23,007		1,520,533
Multi-Utilities — 0.4%
CMS Energy Corp.		658		32,670
Consolidated Edison, Inc.		7,549		577,196
				609,866
Oil, Gas & Consumable Fuels — 4.5%
Anadarko Petroleum Corp.		19,784		867,330
Antero Resources Corp.(b)		1,723		16,179
Chevron Corp.		8,909		969,210
Concho Resources, Inc.(b)		468		48,106
ConocoPhillips		18,849		1,175,235
Continental Resources, Inc.(b)		2,331		93,683
Exxon Mobil Corp.		23,682		1,614,876
Kinder Morgan, Inc.		41,286		634,979
Occidental Petroleum Corp.		11,709		718,698
Phillips 66		8,186		705,224
Suncor Energy, Inc.(a)		10,884		304,425
Valero Energy Corp.		203		15,219
Williams Cos., Inc. (The)		4,054		89,391
				7,252,555
Personal Products — 0.5%
Estee Lauder Cos., Inc. (The), Class A		5,868		763,427

Security	Shares		Value
Pharmaceuticals — 4.2%
Bristol-Myers Squibb Co.		19,474	$	1,012,258
Eli Lilly & Co.		10,026		1,160,209
Johnson & Johnson		17,035		2,198,367
Merck & Co., Inc.		23,149		1,768,815
Zoetis, Inc.		6,900		590,226
				6,729,875
Professional Services — 0.6%
Insperity, Inc.		8,024		749,121
Robert Half International, Inc.		3,874		221,593
				970,714
Road & Rail — 0.9%
Landstar System, Inc.		7,858		751,775
Norfolk Southern Corp.		4,343		649,452
Schneider National, Inc., Class B		1,775		33,139
				1,434,366
Semiconductors & Semiconductor Equipment — 3.4%
Analog Devices, Inc.		4,973		426,832
Applied Materials, Inc.		15,228		498,565
Broadcom, Inc.		291		73,995
Intel Corp.		39,803		1,867,955
Maxim Integrated Products, Inc.(a)		9,801		498,381
NVIDIA Corp.		3,967		529,594
NXP Semiconductors NV(b)		399		29,239
QUALCOMM, Inc.		3,688		209,884
Skyworks Solutions, Inc.		3,880		260,038
Texas Instruments, Inc.		7,468		705,726
Xilinx, Inc.		4,611		392,719
				5,492,928
Software — 6.5%
Dropbox, Inc., Class A(b)		8,379		171,183
Intuit, Inc.		3,454		679,920
Microsoft Corp.		51,324		5,212,979
New Relic, Inc.(b)		1,234		99,917
Oracle Corp.		32,022		1,445,793
salesforce.com, Inc.(b)		13,951		1,910,868
Synopsys, Inc.(b)		7,111		599,031
Ultimate Software Group, Inc. (The)(b)		402		98,438
VMware, Inc., Class A(b)		1,631		223,659
				10,441,788
Specialty Retail — 1.8%
AutoNation, Inc.(b)		2,003		71,507
Best Buy Co., Inc.		311		16,471
Dick’s Sporting Goods, Inc.(a)		1,575		49,140
Five Below, Inc.(b)		1,568		160,438
Home Depot, Inc. (The)		7,258		1,247,069
Penske Automotive Group, Inc.(a)		11,494		463,438
Ross Stores, Inc.		1,975		164,320
TJX Cos., Inc. (The)		15,155		678,035
				2,850,418
Technology Hardware, Storage & Peripherals — 3.8%
Apple, Inc.		31,876		5,028,120
Dell Technologies, Inc., Class C(b)		4,896		239,280
Hewlett Packard Enterprise Co.		4,368		57,702
HP, Inc.		32,250		659,835
Pure Storage, Inc., Class A(b)		13,275		213,462
				6,198,399
Textiles, Apparel & Luxury Goods — 1.0%
NIKE, Inc., Class B		19,397		1,438,093
VF Corp.		3,608		257,395
				1,695,488

26 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Advantage Large Cap Core Portfolio (Percentages shown are based on Net Assets)

Security	Shares		Value
Thrifts & Mortgage Finance — 0.1%
Essent Group Ltd.(b)		3,088	$	105,548
Tobacco — 0.7%
Altria Group, Inc.		13,061		645,083
Philip Morris International, Inc.		6,477		432,404
				1,077,487
Water Utilities — 0.7%
American Water Works Co., Inc.		12,864		1,167,665
Wireless Telecommunication Services — 0.1%
Telephone & Data Systems, Inc.		7,102		231,098
Total Common Stocks — 98.8% (Cost: $167,714,618)				159,560,198
Total Long-Term Investments — 98.8% (Cost: $167,714,618)				159,560,198

Security	Shares		Value
Short-Term Securities — 3.8%(c)
BlackRock Liquidity Funds, T-Fund, Institutional Class, 2.32%(e)		1,878,651	$	1,878,651
JPMorgan US Treasury Plus Money Market Fund, Agency Class, 2.24%		19,032		19,032
SL Liquidity Series, LLC, Money Market Series, 2.57%(d)(e)		4,227,706		4,227,284
Total Short-Term Securities — 3.8% (Cost: $6,125,224)				6,124,967
Total Investments — 102.6% (Cost: $173,839,842)				165,685,165
Liabilities in Excess of Other Assets — (2.6)%				(4,272,075	)
Net Assets — 100.0%			$	161,413,090

^(a)  Security, or a portion of the security, is on loan.

^(b)  Non-income producing security.

^(c)  Annualized 7-day yield as of period end.

^(d)  Security was purchased with the cash collateral from loaned securities.

^(e)  During the year ended December 31, 2018, investments in issuers considered to be affiliates of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

Affiliate	Shares Held at 12/31/17		Net Activity			Shares Held at 12/31/18		Value at 12/31/18		Income			Net Realized Gain (Loss) (a)			Change in Unrealized Appreciation (Depreciation)
BlackRock Liquidity Funds, T-Fund, Institutional Class		1,953,092		(74,441	)		1,878,651	$	1,878,651	$	29,009		$	—		$	—
SL Liquidity Series, LLC, Money Market Series		661,529		3,566,177			4,227,706		4,227,284		6,147	(b)		(1,907	)		(257	)
								$	6,105,935	$	35,156		$	(1,907	)	$	(257	)

^(a)  Includes net capital gain distributions, if applicable.

^(b)  Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

For Fund compliance purposes, the Fund’s industry classifications refer to one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

Description	Number of Contracts		Expiration Date		Notional Amount (000)		Value/ Unrealized Appreciation (Depreciation)
Long Contracts
S&P 500 E-Mini Index		17		03/15/19	$	2,129	$	(25,914	)

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

	Commodity Contracts		Credit Contracts		Equity Contracts		Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Liabilities — Derivative Financial Instruments
Futures contracts
Net unrealized depreciation(a)	$	—	$	—	$	25,914	$	—	$	—	$	—	$	25,914

^(a) Includes cumulative depreciation on futures contracts, if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

SCHEDULES OF INVESTMENTS 27

Schedule of Investments  (continued) December 31, 2018 BlackRock Advantage Large Cap Core Portfolio

For the year ended December 31, 2018, the effect of derivative financial instruments in the Statements of Operations were as follows:

	Commodity Contracts		Credit Contracts		Equity Contracts			Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Net Realized Gain (Loss) from:
Futures contracts	$	—	$	—	$	(70,904	)	$	—	$	—	$	—	$	(70,904	)
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts	$	—	$	—	$	(35,342	)	$	—	$	—	$	—	$	(35,342	)

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	2,115,118

For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to financial statements.

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

The following table summarizes the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:

	Level 1			Level 2		Level 3		Total
Assets:
Investments:
Long-Term Investments:
Common Stocks(a)	$	159,560,198		$	—	$	—	$	159,560,198
Short-Term Securities		1,897,683			—		—		1,897,683
Subtotal	$	161,457,881		$	—	$	—	$	161,457,881
Investments valued at NAV(b)								$	4,227,284
Total Investments								$	165,685,165
Derivative Financial Instruments(c)
Liabilities:
Equity contracts	$	(25,914	)	$	—	$	—	$	(25,914	)

^(a)  See above Schedule of Investments for values in each security type.

^(b)  As of December 31, 2018, certain investments of the Fund were fair valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

^(c)  Derivative financial instruments are futures contracts, which are valued at the unrealized appreciation (depreciation) on the instrument.

During the year ended December 31, 2018, there were no transfers between levels.

See notes to financial statements.

28 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments December 31, 2018 BlackRock Balanced Capital Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Asset-Backed Securities — 4.2%
ACE Securities Corp. Home Equity Loan Trust, Series 2007-HE4, Class A2A, (LIBOR USD 1 Month + 0.13%), 2.64%, 05/25/37(a)	USD		50	$	14,485
Ajax Mortgage Loan Trust(b):
Series 2017-D, Class A, 3.75%, 12/25/57			156		157,012
Series 2018-E, Class A, 4.38%, 06/25/58(c)			100		99,479
Series 2018-F, Class A, 4.38%, 11/25/58(c)			455		452,810
Series 2018-G, Class A, 4.38%, 06/25/57(d)			250		248,850
Series 2018-G, Class B, 5.25%, 06/25/57(d)			100		97,750
Series 2018-G, Class C, 5.25%, 06/25/57			100		92,255
Allegro CLO II-S Ltd., Series 2014-1RA, Class A1, (LIBOR USD 3 Month + 1.08%), 3.23%, 10/21/28(a)(b)			250		248,954
Anchorage Capital CLO 5-R Ltd.(a)(b):
Series 2014-5RA, Class B, (LIBOR USD 3 Month + 1.45%), 3.89%, 01/15/30			250		244,277
Series 2014-5RA, Class C, (LIBOR USD 3 Month + 1.85%), 4.29%, 01/15/30			250		236,916
Anchorage Capital CLO 6 Ltd., Series 2015-6A, Class AR, (LIBOR USD 3 Month + 1.27%), 3.71%, 07/15/30(a)(b)			250		247,508
Apidos CLO XII, Series 2013-12A, Class AR, (LIBOR USD 3 Month + 1.08%), 3.52%, 04/15/31(a)(b)			500		494,917
Arbor Realty Collateralized Loan Obligation Ltd., Series 2017-FL3, Class A, (LIBOR USD 1 Month + 0.99%), 3.45%, 12/15/27(a)(b)			100		99,452
Arbor Realty Commercial Real Estate Notes Ltd.(a)(b):
Series 2016-FL1A, Class A, (LIBOR USD 1 Month + 1.70%), 4.16%, 09/15/26			100		101,109
Series 2017-FL2, Class A, (LIBOR USD 1 Month + 0.99%), 3.45%, 08/15/27			250		249,019
Argent Mortgage Loan Trust, Series 2005-W1, Class A2, (LIBOR USD 1 Month + 0.48%), 2.99%, 05/25/35(a)			86		75,727
Avery Point V CLO Ltd., Series 2014-5A, Class AR, (LIBOR USD 3 Month + 0.98%), 3.43%, 07/17/26(a)(b)			205		204,526
Avery Point VI CLO Ltd., Series 2015-6A, Class AR, (LIBOR USD 3 Month + 1.05%), 3.63%, 08/05/27(a)(b)			250		248,073
B2R Mortgage Trust(b):
Series 2015-1, Class A1, 2.52%, 05/15/48			29		28,425
Series 2015-2, Class A, 3.34%, 11/15/48			52		51,574
Barings CLO Ltd., Series 2018-3A, Class A1, (LIBOR USD 3 Month + 0.95%), 3.42%, 07/20/29(a)(b)			250		247,558
BCMSC Trust(c):
Series 2000-A, Class A2, 7.58%, 06/15/30			53		17,077
Series 2000-A, Class A3, 7.83%, 06/15/30			49		16,380
Series 2000-A, Class A4, 8.29%, 06/15/30			83		29,633
Bear Stearns Asset-Backed Securities I Trust(a):
Series 2004-HE7, Class M2, (LIBOR USD 1 Month + 1.73%), 4.23%, 08/25/34			3		3,184
Series 2006-HE7, Class 1A2, (LIBOR USD 1 Month + 0.17%), 2.68%, 09/25/36			183		208,169
Series 2007-HE1, Class 21A2, (LIBOR USD 1 Month + 0.16%), 2.67%, 01/25/37			51		50,132
Series 2007-HE2, Class 22A, (LIBOR USD 1 Month + 0.14%), 2.65%, 03/25/37			26		26,001
Series 2007-HE2, Class 23A, (LIBOR USD 1 Month + 0.14%), 2.65%, 03/25/37			56		56,784
Series 2007-HE3, Class 1A3, (LIBOR USD 1 Month + 0.25%), 2.76%, 04/25/37			87		90,205
Bear Stearns Asset-Backed Securities Trust, Series 2005-4, Class M2, (LIBOR USD 1 Month + 1.20%), 3.52%, 01/25/36(a)			7		6,848
Benefit Street Partners CLO VI Ltd., Series 2015-VIA, Class A1R, (LIBOR USD 3 Month + 1.24%), 3.68%, 10/18/29(a)(b)			250		249,271

Security		Par (000)		Value
Asset-Backed Securities (continued)
BSPRT Issuer Ltd., Series 2017-FL1, Class A, (LIBOR USD 1 Month + 1.35%), 3.81%, 06/15/27(a)(b)	USD		22	$	21,733
Carlyle Global Market Strategies CLO Ltd.(a)(b):
Series 2014-1A, Class A1R2, (LIBOR USD 3 Month + 0.97%), 3.42%, 04/17/31			250		245,900
Series 2015-3A, Class A2R, (LIBOR USD 3 Month + 1.60%), 4.11%, 07/28/28			250		247,351
Carlyle US CLO Ltd., Series 2017-4A, Class A1, (LIBOR USD 3 Month + 1.18%), 3.62%, 01/15/30(a)(b)			250		247,751
Carrington Mortgage Loan Trust(a):
Series 2006-FRE2, Class A2, (LIBOR USD 1 Month + 0.12%), 2.63%, 10/25/36			70		51,478
Series 2006-FRE2, Class A3, (LIBOR USD 1 Month + 0.16%), 2.67%, 10/25/36			59		43,003
Series 2006-NC4, Class A3, (LIBOR USD 1 Month + 0.16%), 2.67%, 10/25/36			88		81,823
C-BASS Trust:
Series 2007-CB1, Class AF4, 3.58%, 01/25/37(d)			73		33,032
Series 2007-CB5, Class A2, (LIBOR USD 1 Month + 0.17%), 2.49%, 04/25/37(a)			58		43,163
Cedar Funding VI CLO Ltd., Series 2016-6A, Class AR, (LIBOR USD 3 Month + 1.09%), 3.56%, 10/20/28(a)(b)			250		247,903
Cedar Funding VIII CLO Ltd., Series 2017-8A, Class A1, (LIBOR USD 3 Month + 1.25%), 3.70%, 10/17/30(a)(b)			250		248,659
Cent CLO 24 Ltd., Series 2015-24A, Class A1R, (LIBOR USD 3 Month + 1.07%), 3.51%, 10/15/26(a)(b)			250		249,042
CIFC Funding Ltd.(a)(b):
Series 2013-1A, Class A2R, (LIBOR USD 3 Month + 1.75%), 4.19%, 07/16/30			250		245,206
Series 2014-4RA, Class A1A, (LIBOR USD 3 Month + 1.13%), 3.59%, 10/17/30			250		249,174
Citigroup Mortgage Loan Trust(a):
Series 2006-NC1, Class A2D, (LIBOR USD 1 Month + 0.25%), 2.76%, 08/25/36			90		87,879
Series 2007-AHL2, Class A3B, (LIBOR USD 1 Month + 0.20%), 2.71%, 05/25/37			218		161,486
Series 2007-AHL2, Class A3C, (LIBOR USD 1 Month + 0.27%), 2.78%, 05/25/37			99		73,863
Conseco Finance Corp.:
Series 1998-8, Class A1, 6.28%, 09/01/30			24		25,595
Series 1998-8, Class M1, 6.98%, 09/01/30(c)			60		51,079
Series 2001-D, Class B1, (LIBOR USD 1 Month + 2.50%), 4.96%, 11/15/32(a)			108		107,326
Conseco Finance Securitizations Corp.:
Series 2000-1, Class A5, 8.06%, 09/01/29(c)			31		14,408
Series 2000-4, Class A5, 7.97%, 05/01/32			95		41,384
Series 2000-4, Class A6, 8.31%, 05/01/32(c)			42		19,338
Series 2000-5, Class A6, 7.96%, 05/01/31			40		23,383
Countrywide Asset-Backed Certificates:
Series 2006-8, Class 2A3, (LIBOR USD 1 Month + 0.16%), 2.67%, 12/25/35(a)			47		46,108
Series 2006-S3, Class A4, 6.63%, 01/25/29(d)			19		20,264
Series 2006-SPS1, Class A, (LIBOR USD 1 Month + 0.22%), 2.73%, 12/25/25(a)			3		3,261
Credit Suisse First Boston Mortgage Securities Corp., Series 2001-MH29, Class B1, 8.10%, 09/25/31(c)			30		31,725
Credit-Based Asset Servicing & Securitization LLC, Series 2006-MH1, Class B1, 6.25%, 10/25/36(b)(d)			100		100,232
CWABS Asset-Backed Certificates Trust, Series 2005-17, Class 1AF4, 6.05%, 05/25/36(d)			39		38,278
CWHEQ Home Equity Loan Trust:
Series 2006-S5, Class A4, 5.84%, 06/25/35			2		4,245
Series 2006-S5, Class A5, 6.16%, 06/25/35			18		19,508

SCHEDULES OF INVESTMENTS 29

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Asset-Backed Securities (continued)
Series 2007-S1, Class A3, 5.81%, 11/25/36(c)	USD		2	$	1,519
CWHEQ Revolving Home Equity Loan Resuritization Trust(a)(b):
Series 2006-RES, Class 4Q1B, (LIBOR USD 1 Month + 0.30%), 2.76%, 12/15/33(e)			31		28,533
Series 2006-RES, Class 5B1A, (LIBOR USD 1 Month + 0.19%), 2.65%, 05/15/35			154		142,517
CWHEQ Revolving Home Equity Loan Trust(a):
Series 2005-B, Class 2A, (LIBOR USD 1 Month + 0.18%), 2.64%, 05/15/35			20		19,314
Series 2006-H, Class 1A, (LIBOR USD 1 Month + 0.15%), 2.61%, 11/15/36			32		25,891
DCP Rights LLC, Series 2014-1A, Class A, 5.46%, 10/25/44(b)			280		286,068
Dryden 53 CLO Ltd., Series 2017-53A, Class A, (LIBOR USD 3 Month + 1.12%), 3.56%, 01/15/31(a)(b)			280		277,747
First Franklin Mortgage Loan Trust, Series 2006-FFH1, Class M2, (LIBOR USD 1 Month + 0.40%), 2.91%, 01/25/36(a)			46		26,367
Flatiron CLO Ltd., Series 2015-1A, Class AR, (LIBOR USD 3 Month + 0.89%), 3.33%, 04/15/27(a)(b)			250		248,358
GE-WMC Mortgage Securities Trust, Series 2006-1, Class A2B, (LIBOR USD 1 Month + 0.15%), 2.66%, 08/25/36(a)			548		334,858
GSAMP Trust(a):
Series 2007-H1, Class A1B, (LIBOR USD 1 Month + 0.20%), 2.71%, 01/25/47			30		18,701
Series 2007-HS1, Class M6, (LIBOR USD 1 Month + 2.25%), 4.76%, 02/25/47			25		25,269
Halcyon Loan Advisors Funding Ltd., Series 2015-2A, Class AR, (LIBOR USD 3 Month + 1.08%), 3.57%, 07/25/27(a)(b)			250		249,942
Home Equity Asset Trust, Series 2007-1, Class 2A3, (LIBOR USD 1 Month + 0.15%), 2.66%, 05/25/37(a)			40		32,580
Home Equity Mortgage Loan Asset-Backed Trust, Series 2007-B, Class 2A3, (LIBOR USD 1 Month + 0.20%), 2.71%, 07/25/37(a)			77		48,114
Home Equity Mortgage Trust, Series 2006-2, Class 1A1, 5.87%, 07/25/36(d)			169		56,355
Home Loan Mortgage Loan Trust, Series 2005-1, Class A3, (LIBOR USD 1 Month + 0.72%), 3.18%, 04/15/36(a)			42		38,340
ICG US CLO Ltd., Series 2015-1A, Class A1R, (LIBOR USD 3 Month + 1.14%), 3.59%, 10/19/28(a)(b)			250		247,771
Invitation Homes Trust, Series 2018-SFR3, Class E, (LIBOR USD 1 Month + 2.00%), 4.46%, 07/17/37(a)(b)			100		98,997
IXIS Real Estate Capital Trust, Series 2007-HE1, Class A4, (LIBOR USD 1 Month + 0.23%), 2.74%, 05/25/37(a)			704		235,082
KKR CLO 23 Ltd., Series 23, Class B, (LIBOR USD 3 Month + 1.75%), 4.24%, 10/20/31(a)(b)			250		245,266
Lehman ABS Manufactured Housing Contract Trust:
Series 2001-B, Class M1, 6.63%, 04/15/40(c)			130		136,162
Series 2002-A, Class C, 0.00%, 06/15/33			9		6,698
Lendmark Funding Trust, Series 2017-1A, Class A, 2.83%, 12/22/25(b)			210		207,196
Litigation Fee Residual Funding LLC, Series 2015-1, Class A, 4.00%, 10/30/27(e)			126		125,656
LoanCore Issuer Ltd., Series 2018-CRE1, Class A, (LIBOR USD 1 Month + 1.13%), 3.59%, 05/15/28(a)(b)			100		99,471
Long Beach Mortgage Loan Trust(a):
Series 2006-2, Class 1A, (LIBOR USD 1 Month + 0.18%), 2.69%, 03/25/46			99		73,481
Series 2006-3, Class 2A3, (LIBOR USD 1 Month + 0.18%), 2.69%, 05/25/46			29		11,677

Security		Par (000)		Value
Asset-Backed Securities (continued)
Series 2006-5, Class 2A3, (LIBOR USD 1 Month + 0.15%), 2.66%, 06/25/36	USD		28	$	15,364
Series 2006-7, Class 2A3, (LIBOR USD 1 Month + 0.16%), 2.67%, 08/25/36			17		9,130
Series 2006-9, Class 2A2, (LIBOR USD 1 Month + 0.11%), 2.62%, 10/25/36			22		9,406
Series 2006-10, Class 2A4, (LIBOR USD 1 Month + 0.22%), 2.73%, 11/25/36			15		6,456
Madison Park Funding XVIII Ltd., Series 2015-18A, Class A1R, (LIBOR USD 3 Month + 1.19%), 3.66%, 10/21/30(a)(b)			250		247,136
Merrill Lynch First Franklin Mortgage Loan Trust, Series 2007-2, Class A2C, (LIBOR USD 1 Month + 0.24%), 2.75%, 05/25/37(a)			25		16,811
Morgan Stanley ABS Capital I, Inc. Trust(a):
Series 2005-HE1, Class A2MZ, (LIBOR USD 1 Month + 0.60%), 3.11%, 12/25/34			78		76,417
Series 2007-NC1, Class A1, (LIBOR USD 1 Month + 0.13%), 2.64%, 11/25/36			199		118,345
Morgan Stanley Mortgage Loan Trust, Series 2007-9SL, Class A, (LIBOR USD 1 Month + 0.32%), 2.83%, 07/25/37(a)			20		19,154
MP CLO VIII Ltd., Series 2015-2A, Class AR, (LIBOR USD 3 Month + 0.91%), 3.42%, 10/28/27(a)(b)			250		247,488
Navient Private Education Loan Trust(b):
Series 2014-CTA, Class B, (LIBOR USD 1 Month + 1.75%), 4.21%, 10/17/44(a)			250		253,274
Series 2016-AA, Class B, 3.50%, 12/16/58(c)			100		95,532
Oakwood Mortgage Investors, Inc., Series 2001-D, Class A4, 6.93%, 09/15/31(c)			13		11,204
OCP CLO Ltd., Series 2016-12A, Class A1R, (LIBOR USD 3 Month + 1.12%), 3.56%, 10/18/28(a)(b)			100		99,387
Octagon Investment Partners 24 Ltd.(a)(b):
Series 2015-1A, Class A1R, (LIBOR USD 3 Month + 0.90%), 3.54%, 05/21/27			250		249,308
Series 2015-1A, Class A2AR, (LIBOR USD 3 Month + 1.35%), 3.99%, 05/21/27			250		243,355
Octagon Investment Partners 33 Ltd., Series 2017-1A, Class A1, (LIBOR USD 3 Month + 1.19%), 3.66%, 01/20/31(a)(b)			250		248,480
Octagon Investment Partners XVI Ltd., Series 2013-1A, Class A1R, (LIBOR USD 3 Month + 1.02%), 3.36%, 07/17/30(a)(b)			305		300,407
OFSI Fund VI Ltd., Series 2014-6A, Class A2R, (LIBOR USD 3 Month + 1.13%), 3.57%, 03/20/25(a)(b)			210		209,131
OHA Loan Funding Ltd., Series 2013-2A, Class AR, (LIBOR USD 3 Month + 1.04%), 3.72%, 05/23/31(a)(b)			285		280,046
Option One Mortgage Loan Trust:
Series 2007-CP1, Class 2A3, (LIBOR USD 1 Month + 0.21%), 2.72%, 03/25/37(a)			40		26,161
Series 2007-FXD1, Class 1A1, 5.87%, 01/25/37(d)			43		39,937
Series 2007-FXD1, Class 2A1, 5.87%, 01/25/37(d)			52		48,449
Series 2007-FXD2, Class 1A1, 5.82%, 03/25/37(d)			191		186,691
Origen Manufactured Housing Contract Trust, Series 2007-B, Class A1, (LIBOR USD 1 Month + 1.20%), 3.66%, 10/15/37(a)(b)(e)			37		35,685
Ownit Mortgage Loan Trust, Series 2006-2, Class A2C, 6.00%, 01/25/37(d)			30		27,421
OZLM Funding III Ltd., Series 2013-3A, Class BR, (LIBOR USD 3 Month + 3.00%), 5.47%, 01/22/29(a)(b)			250		249,571
OZLM Funding IV Ltd., Series 2013-4A, Class A1R, (LIBOR USD 3 Month + 1.25%), 3.72%, 10/22/30(a)(b)			495		492,392

30 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Asset-Backed Securities (continued)
OZLM XXI Ltd., Series 2017-21A, Class B, (LIBOR USD 3 Month + 1.90%), 4.37%, 01/20/31(a)(b)	USD		250	$	236,681
Parallel Ltd., Series 2015-1A, Class AR, (LIBOR USD 3 Month + 0.85%), 3.32%, 07/20/27(a)(b)			250		247,542
PRPM LLC, Series 2017-1A, Class A1, 4.25%, 01/25/22(b)(d)			27		26,855
RAMP Trust, Series 2006-RS6, Class A4, (LIBOR USD 1 Month + 0.27%), 2.78%, 11/25/36(a)			104		87,060
Regatta VI Funding Ltd., Series 2016-1A, Class AR, (LIBOR USD 3 Month + 1.08%), 3.55%, 07/20/28(a)(b)			250		248,206
Rockford Tower CLO Ltd., Series 2017-1A, Class B, (LIBOR USD 3 Month + 1.80%), 4.24%, 04/15/29(a)(b)			250		250,109
Scholar Funding Trust, Series 2013-A, Class A, (LIBOR USD 1 Month + 0.65%), 3.16%, 01/30/45(a)(b)			202		200,755
Securitized Asset-Backed Receivables LLC Trust, Series 2006-WM4, Class A1, (LIBOR USD 1 Month + 0.19%), 2.70%, 11/25/36(a)(b)			43		25,343
SG Mortgage Securities Trust, Series 2006-FRE2, Class A2C, (LIBOR USD 1 Month + 0.16%), 2.67%, 07/25/36(a)			18		5,553
Silver Creek CLO Ltd., Series 2014-1A, Class AR, (LIBOR USD 3 Month + 1.24%), 3.71%, 07/20/30(a)(b)			250		249,298
SLM Private Credit Student Loan Trust(a):
Series 2004-B, Class A3, (LIBOR USD 3 Month + 0.33%), 3.12%, 03/15/24			139		138,034
Series 2005-A, Class A3, (LIBOR USD 3 Month + 0.20%), 2.99%, 06/15/23			58		57,917
Sound Point CLO XII Ltd., Series 2016-2A, Class A, (LIBOR USD 3 Month + 1.66%), 4.13%, 10/20/28(a)(b)			250		249,961
Sound Point CLO XIV Ltd., Series 2016-3A, Class C, (LIBOR USD 3 Month + 2.65%), 5.13%, 01/23/29(a)(b)			250		246,177
Springleaf Funding Trust, Series 2015-AA, Class B, 3.62%, 11/15/24(b)			320		319,486
Structured Asset Investment Loan Trust, Series 2004-8, Class M4, (LIBOR USD 1 Month + 1.50%), 4.01%, 09/25/34(a)			44		43,526
Structured Asset Securities Corp. Mortgage Pass-Through Certificates, Series 2004-23XS, Class 2A1, (LIBOR USD 1 Month + 0.30%), 2.81%, 01/25/35(a)			60		58,544
Symphony CLO XII Ltd., Series 2013-12A, Class AR, (LIBOR USD 3 Month + 1.03%), 3.47%, 10/15/25(a)(b)			354		352,401
Symphony CLO XVII Ltd., Series 2016-17A, Class AR, (LIBOR USD 3 Month + 0.88%), 3.32%, 04/15/28(a)(b)			250		248,030
TCI-Flatiron CLO Ltd., Series 2017-1A, Class A, (LIBOR USD 3 Month + 1.20%), 3.84%, 11/17/30(a)(b)			250		248,687
Union Pacific Railroad Co. Pass-Through Trust, Series 2014-1, 3.23%, 05/14/26			55		54,196
Venture CDO Ltd., Series 2018-35A, Class AS, (LIBOR USD 3 Month + 1.15%), 3.65%, 10/22/31(a)(b)			250		249,545
Wachovia Asset Securitization Issuance II LLC Trust, Series 2007-HE2A, Class A, (LIBOR USD 1 Month + 0.13%), 2.64%, 07/25/37(a)(b)			66		63,148
Washington Mutual Asset-Backed CertificatesTrust, Series 2007-HE2, Class 2A2, (LIBOR USD 1 Month + 0.22%), 2.73%, 02/25/37(a)			93		39,764
West CLO Ltd., Series 2013-1A, Class A1AR, (LIBOR USD 3 Month + 1.16%), 3.75%, 11/07/25(a)(b)			74		74,367
Total Asset-Backed Securities — 4.2% (Cost: $19,244,552)					19,050,193

Security	Shares		Value
Common Stocks — 59.6%
Aerospace & Defense — 1.4%
Boeing Co. (The)		7,001	$	2,257,822
General Dynamics Corp.		1,503		236,287
Lockheed Martin Corp.		3,377		884,234
Raytheon Co.		19,771		3,031,883
United Technologies Corp.		1		106
				6,410,332
Airlines — 0.3%
Delta Air Lines, Inc.		3,814		190,318
Southwest Airlines Co.		21,883		1,017,122
				1,207,440
Auto Components — 0.0%
BorgWarner, Inc.		5,780		200,797
Automobiles — 0.1%
Ford Motor Co.		15,036		115,025
General Motors Co.		5,150		172,268
				287,293
Banks — 3.5%
Bank of America Corp.		219,131		5,399,388
BB&T Corp.		29,603		1,282,402
Citigroup, Inc.		25,139		1,308,736
Citizens Financial Group, Inc.		39,380		1,170,767
Cullen/Frost Bankers, Inc.		1,934		170,076
East West Bancorp, Inc.		8,275		360,211
First Republic Bank(f)		15,875		1,379,538
JPMorgan Chase & Co.		29,778		2,906,928
Wells Fargo & Co.		43,433		2,001,393
				15,979,439
Beverages — 0.9%
Coca-Cola European Partners plc		17,940		822,549
Constellation Brands, Inc., Class A		3,465		557,241
Keurig Dr. Pepper, Inc.		2,048		52,511
Molson Coors Brewing Co., Class B		1,993		111,927
Monster Beverage Corp.(g)		13,201		649,753
PepsiCo, Inc.		16,612		1,835,294
				4,029,275
Biotechnology — 2.4%
AbbVie, Inc.		25,936		2,391,040
Amgen, Inc.		11,533		2,245,129
Biogen, Inc.(g)		1,819		547,373
Celgene Corp.(g)		27,743		1,778,049
Genomic Health, Inc.(g)		2,141		137,902
Gilead Sciences, Inc.		47,472		2,969,374
Incyte Corp.(g)		1,267		80,569
Regeneron Pharmaceuticals, Inc.(g)		602		224,847
Vertex Pharmaceuticals, Inc.(g)		3,209		531,763
				10,906,046
Building Products — 0.2%
Allegion plc		9,596		764,897
Capital Markets — 2.0%
Charles Schwab Corp. (The)		64,621		2,683,710
CME Group, Inc.(f)		6,800		1,279,216
Evercore, Inc., Class A		3,112		222,695
Moelis & Co., Class A		13,487		463,683
Morgan Stanley		89,026		3,529,881
S&P Global, Inc.		5,961		1,013,012
SEI Investments Co.		1,355		62,601
TD Ameritrade Holding Corp.(f)		754		36,916
				9,291,714

SCHEDULES OF INVESTMENTS 31

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio (Percentages shown are based on Net Assets)

Security	Shares		Value
Chemicals — 1.0%
Air Products & Chemicals, Inc.		16,032	$	2,565,921
Celanese Corp.(f)		6,594		593,262
Eastman Chemical Co.		6,288		459,716
Ecolab, Inc.		5,135		756,642
Huntsman Corp.		3,844		74,151
Linde plc		1,157		180,538
Mosaic Co. (The)		1,099		32,102
				4,662,332
Commercial Services & Supplies — 0.1%
Clean Harbors, Inc.(g)		6,645		327,931
Waste Connections, Inc.		1,425		105,806
				433,737
Communications Equipment — 0.6%
Ciena Corp.(g)		11,310		383,522
Cisco Systems, Inc.		35,219		1,526,039
Motorola Solutions, Inc.		5,459		628,003
Palo Alto Networks, Inc.(f)(g)		1,607		302,679
				2,840,243
Construction Materials — 0.0%
Martin Marietta Materials, Inc.		562		96,591
Vulcan Materials Co.		727		71,827
				168,418
Consumer Finance — 0.5%
American Express Co.		20,080		1,914,025
Capital One Financial Corp.		2,466		186,405
				2,100,430
Containers & Packaging — 0.2%
Packaging Corp. of America		5,013		418,385
WestRock Co.		12,720		480,307
				898,692
Distributors — 0.0%
Genuine Parts Co.		276		26,501
Diversified Consumer Services — 0.1%
H&R Block, Inc.		21,027		533,455
Diversified Financial Services — 0.9%
Berkshire Hathaway, Inc., Class B(g)		20,444		4,174,256
Diversified Telecommunication Services — 0.8%
AT&T, Inc.		36,593		1,044,364
Verizon Communications, Inc.		47,164		2,651,560
				3,695,924
Electric Utilities — 1.1%
IDACORP, Inc.		6,194		576,414
OGE Energy Corp.		25,575		1,002,284
Pinnacle West Capital Corp.		23,369		1,991,039
Portland General Electric Co.		33,333		1,528,318
Xcel Energy, Inc.		2,461		121,253
				5,219,308
Electrical Equipment — 0.5%
AMETEK, Inc.		8,688		588,178
Rockwell Automation, Inc.		12,584		1,893,640
				2,481,818
Electronic Equipment, Instruments & Components — 0.5%
CDW Corp.		12,491		1,012,396
Keysight Technologies, Inc.(g)		800		49,664
National Instruments Corp.		25,956		1,177,883
Zebra Technologies Corp., Class A(g)		1,074		171,013
				2,410,956

Security	Shares		Value
Energy Equipment & Services — 0.3%
Halliburton Co.		47,006	$	1,249,419
Nabors Industries Ltd.(f)		25,697		51,394
				1,300,813
Entertainment — 0.7%
Activision Blizzard, Inc.		1,937		90,206
Electronic Arts, Inc.(g)		8,870		699,932
Netflix, Inc.(g)		3,398		909,509
Twenty-First Century Fox, Inc., Class A		3,261		156,919
Twenty-First Century Fox, Inc., Class B		4,001		191,168
Viacom, Inc., Class B		28,085		721,784
Walt Disney Co. (The)		296		32,456
World Wrestling Entertainment, Inc., Class A(f)		3,122		233,276
				3,035,250
Equity Real Estate Investment Trusts (REITs) — 2.3%
Equity LifeStyle Properties, Inc.		3,153		306,251
Host Hotels & Resorts, Inc.		68,633		1,144,112
Outfront Media, Inc.		4,675		84,711
Park Hotels & Resorts, Inc.		45,787		1,189,546
Prologis, Inc.		57,711		3,388,790
Realty Income Corp.		33,200		2,092,928
Simon Property Group, Inc.		12,210		2,051,158
				10,257,496
Food & Staples Retailing — 0.6%
Costco Wholesale Corp.		11,837		2,411,315
Walmart, Inc.		3,369		313,823
				2,725,138
Food Products — 1.2%
Archer-Daniels-Midland Co.		53,515		2,192,510
Hershey Co. (The)		25,686		2,753,025
Hormel Foods Corp.(f)		2,422		103,371
Kellogg Co.		1,498		85,401
Lamb Weston Holdings, Inc.		2,710		199,348
Tyson Foods, Inc., Class A		2,603		139,000
				5,472,655
Gas Utilities — 0.3%
Atmos Energy Corp.		13,280		1,231,322
UGI Corp.		1,535		81,892
				1,313,214
Health Care Equipment & Supplies — 1.8%
Abbott Laboratories		12,047		871,360
Danaher Corp.		17,145		1,767,992
DexCom, Inc.(g)		490		58,702
IDEXX Laboratories, Inc.(g)		1,680		312,514
Intuitive Surgical, Inc.(g)		1,538		736,579
Masimo Corp.(g)		4,741		509,041
Medtronic plc		9,391		854,205
STERIS plc		3,868		413,296
Stryker Corp.		16,889		2,647,351
				8,171,040
Health Care Providers & Services — 2.1%
AmerisourceBergen Corp.		11,881		883,946
Anthem, Inc.		558		146,548
Cardinal Health, Inc.		22,835		1,018,441
CVS Health Corp.		8,348		546,961
Halfmoon Parent, Inc.		1,570		298,144
Humana, Inc.		3,606		1,033,047
McKesson Corp.		9,833		1,086,251
Quest Diagnostics, Inc.		1,544		128,569
UnitedHealth Group, Inc.		17,015		4,238,777
WellCare Health Plans, Inc.(g)		1,565		369,481
				9,750,165

32 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio (Percentages shown are based on Net Assets)

Security	Shares		Value
Health Care Technology — 0.2%(g)
athenahealth, Inc.		457	$	60,292
Cerner Corp.		1,033		54,170
Veeva Systems, Inc., Class A		9,306		831,212
				945,674
Hotels, Restaurants & Leisure — 1.3%
Carnival Corp.		13,828		681,720
Darden Restaurants, Inc.		5,372		536,448
Domino’s Pizza, Inc.		4,995		1,238,710
Dunkin’ Brands Group, Inc.(f)		5,001		320,664
Extended Stay America, Inc.		20,965		324,958
Hilton Worldwide Holdings, Inc.		8,127		583,519
Las Vegas Sands Corp.		4,508		234,641
McDonald’s Corp.		7,752		1,376,523
Norwegian Cruise Line Holdings Ltd.(g)		11,362		481,635
Yum! Brands, Inc.		1,385		127,309
				5,906,127
Household Durables — 0.2%
Garmin Ltd.		13,892		879,641
Household Products — 0.5%
Church & Dwight Co., Inc.		25,155		1,654,193
Clorox Co. (The)		1,152		177,569
Procter & Gamble Co. (The)		2,879		264,638
				2,096,400
Industrial Conglomerates — 0.5%
3M Co.(f)		8,943		1,703,999
General Electric Co.		42,756		323,663
Honeywell International, Inc.		1,726		228,039
Roper Technologies, Inc.		430		114,604
				2,370,305
Insurance — 1.4%
Allstate Corp. (The)		20,247		1,673,010
American Financial Group, Inc.		8,786		795,397
Arthur J Gallagher & Co.(f)		8,272		609,646
Athene Holding Ltd., Class A(g)		9,624		383,324
First American Financial Corp.		11,938		532,912
Hartford Financial Services Group, Inc. (The)		15,578		692,442
Lincoln National Corp.		4,587		235,359
Loews Corp.		686		31,227
Progressive Corp. (The)		6,234		376,097
Unum Group		30,098		884,279
				6,213,693
Interactive Media & Services — 2.7%(g)
Alphabet, Inc., Class A		3,001		3,135,925
Alphabet, Inc., Class C		3,525		3,650,525
Cargurus, Inc.		5,100		172,023
Facebook, Inc., Class A		32,550		4,266,980
Snap, Inc., Class A(f)		7,188		39,606
TripAdvisor, Inc.		1,279		68,989
Twitter, Inc.		3,571		102,631
Yelp, Inc.		16,558		579,364
				12,016,043
Internet & Direct Marketing Retail — 1.8%(g)
Amazon.com, Inc.		5,034		7,560,917
Booking Holdings, Inc.		249		428,883
				7,989,800
IT Services — 2.8%
Accenture plc, Class A		6,198		873,980
Amdocs Ltd.		609		35,675
Automatic Data Processing, Inc.		16,986		2,227,204
Booz Allen Hamilton Holding Corp.		26,582		1,198,051

Security	Shares		Value
IT Services (continued)
Broadridge Financial Solutions, Inc.		3,649	$	351,216
Cognizant Technology Solutions Corp., Class A		1,084		68,812
Fidelity National Information Services, Inc.		10,447		1,071,340
First Data Corp., Class A(f)(g)		6,963		117,744
GoDaddy, Inc., Class A(f)(g)		11,247		738,028
International Business Machines Corp.		6,405		728,056
Mastercard, Inc., Class A		14,516		2,738,444
Paychex, Inc.		1,987		129,453
PayPal Holdings, Inc.(g)		5,408		454,759
Square, Inc., Class A(g)		2,437		136,691
Total System Services, Inc.		324		26,338
Visa, Inc., Class A		6,344		837,028
Western Union Co. (The)		47,546		811,135
				12,543,954
Life Sciences Tools & Services — 0.2%
Agilent Technologies, Inc.		9,348		630,616
Thermo Fisher Scientific, Inc.		386		86,383
				716,999
Machinery — 2.0%
Crane Co.		34,462		2,487,467
Illinois Tool Works, Inc.		15,783		1,999,548
Ingersoll-Rand plc		22,883		2,087,616
PACCAR, Inc.		30,661		1,751,970
Snap-on, Inc.(f)		4,293		623,730
				8,950,331
Media — 1.2%
AMC Networks, Inc., Class A(g)		11,972		657,024
CBS Corp. (Non-Voting), Class B		13,532		591,619
Comcast Corp., Class A		53,523		1,822,458
Interpublic Group of Cos., Inc. (The)		27,779		573,081
Liberty Media Corp.-Liberty SiriusXM, Class A(g)		17,898		658,646
Liberty Media Corp.-Liberty SiriusXM, Class C(g)		23,054		852,537
Sinclair Broadcast Group, Inc., Class A		2,105		55,446
Sirius XM Holdings, Inc.		18,510		105,692
Tribune Media Co., Class A		1,003		45,516
				5,362,019
Metals & Mining — 0.2%
Newmont Mining Corp.		15,723		544,802
Reliance Steel & Aluminum Co.		3,699		263,258
Steel Dynamics, Inc.		3,498		105,080
				913,140
Multiline Retail — 0.6%
Target Corp.		39,402		2,604,078
Multi-Utilities — 0.2%
CMS Energy Corp.		3,250		161,363
Consolidated Edison, Inc.		12,344		943,822
				1,105,185
Oil, Gas & Consumable Fuels — 2.7%
Anadarko Petroleum Corp.		33,110		1,451,542
Antero Resources Corp.(g)		2,104		19,757
Chevron Corp.		14,870		1,617,707
Concho Resources, Inc.(g)		965		99,192
ConocoPhillips		32,373		2,018,457
Continental Resources, Inc.(g)		3,715		149,306
Exxon Mobil Corp.		40,844		2,785,152
Kinder Morgan, Inc.		68,705		1,056,683
Occidental Petroleum Corp.		19,498		1,196,787
Phillips 66		13,043		1,123,655
Suncor Energy, Inc.(f)		18,889		528,325
Valero Energy Corp.		731		54,803
Williams Cos., Inc. (The)		10,517		231,900
				12,333,266

SCHEDULES OF INVESTMENTS 33

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio (Percentages shown are based on Net Assets)

Security	Shares		Value
Personal Products — 0.3%
Estee Lauder Cos., Inc. (The), Class A		9,906	$	1,288,771
Pharmaceuticals — 2.5%
Bristol-Myers Squibb Co.		31,675		1,646,467
Eli Lilly & Co.		17,072		1,975,572
Johnson & Johnson		29,804		3,846,206
Merck & Co., Inc.		39,066		2,985,033
Zoetis, Inc.		11,506		984,223
				11,437,501
Professional Services — 0.4%
Insperity, Inc.		14,250		1,330,380
Robert Half International, Inc.		6,678		381,982
				1,712,362
Road & Rail — 0.5%
Landstar System, Inc.		13,553		1,296,616
Norfolk Southern Corp.		7,206		1,077,585
Schneider National, Inc., Class B		4,500		84,015
				2,458,216
Semiconductors & Semiconductor Equipment — 2.1%
Analog Devices, Inc.		8,637		741,314
Applied Materials, Inc.		25,161		823,771
Broadcom, Inc.		706		179,522
Intel Corp.		68,505		3,214,940
Maxim Integrated Products, Inc.		15,280		776,988
NVIDIA Corp.		6,662		889,377
NXP Semiconductors NV(g)		363		26,600
QUALCOMM, Inc.		6,022		342,712
Skyworks Solutions, Inc.		6,808		456,272
Texas Instruments, Inc.		13,353		1,261,858
Xilinx, Inc.		7,552		643,204
				9,356,558
Software — 3.9%
Dropbox, Inc., Class A(g)		14,094		287,941
Intuit, Inc.		5,451		1,073,029
Microsoft Corp.		85,834		8,718,159
New Relic, Inc.(g)		1,957		158,458
Oracle Corp.		53,796		2,428,890
salesforce.com, Inc.(g)		24,201		3,314,811
ServiceNow, Inc.(g)		399		71,042
Synopsys, Inc.(g)		12,005		1,011,301
Ultimate Software Group, Inc. (The)(g)		631		154,513
VMware, Inc., Class A(g)		2,914		399,597
				17,617,741
Specialty Retail — 1.1%
AutoNation, Inc.(g)		2,667		95,212
Best Buy Co., Inc.		668		35,377
Dick’s Sporting Goods, Inc.		2,042		63,711
Five Below, Inc.(g)		2,525		258,358
Home Depot, Inc. (The)		12,656		2,174,554
Penske Automotive Group, Inc.		18,581		749,186
Ross Stores, Inc.		3,483		289,786
TJX Cos., Inc. (The)		24,922		1,115,010
Ulta Beauty, Inc.(g)		117		28,646
				4,809,840
Technology Hardware, Storage & Peripherals — 2.3%
Apple, Inc.		54,234		8,554,871
Dell Technologies, Inc., Class C(g)		3,994		195,170
Hewlett Packard Enterprise Co.		7,490		98,943
HP, Inc.		52,364		1,071,367
Pure Storage, Inc., Class A(g)		21,522		346,074
				10,266,425

Security		Shares		Value
Textiles, Apparel & Luxury Goods — 0.6%
NIKE, Inc., Class B			33,186	$	2,460,410
Ralph Lauren Corp.			269		27,831
VF Corp.			5,267		375,748
					2,863,989
Thrifts & Mortgage Finance — 0.0%
Essent Group Ltd.(g)			3,317		113,375
Tobacco — 0.4%
Altria Group, Inc.			22,867		1,129,401
British American Tobacco plc, ADR			1		32
Philip Morris International, Inc.			10,984		733,292
					1,862,725
Water Utilities — 0.5%
American Water Works Co., Inc.			24,421		2,216,694
Wireless Telecommunication Services — 0.1%
Telephone & Data Systems, Inc.			11,451		372,616
Total Common Stocks — 59.6% (Cost: $285,909,959)					270,072,542
		Par (000)
Corporate Bonds — 13.1%
Aerospace & Defense — 0.5%
BAE Systems Holdings, Inc.(b):
2.85%, 12/15/20	USD		138		136,183
3.85%, 12/15/25			90		89,228
4.75%, 10/07/44			8		8,033
Boeing Co. (The), 6.13%, 02/15/33			15		18,987
General Dynamics Corp., 3.75%, 05/15/28			55		55,500
Harris Corp.:
2.70%, 04/27/20			39		38,668
4.40%, 06/15/28			125		124,434
5.05%, 04/27/45			55		56,577
L3 Technologies, Inc.:
4.95%, 02/15/21			25		25,582
3.85%, 06/15/23			90		90,140
3.85%, 12/15/26			90		87,125
4.40%, 06/15/28			15		14,997
Lockheed Martin Corp.:
3.55%, 01/15/26			43		42,669
3.60%, 03/01/35			85		79,149
4.50%, 05/15/36			17		17,541
4.07%, 12/15/42			49		46,755
3.80%, 03/01/45			35		31,890
4.70%, 05/15/46			110		114,623
4.09%, 09/15/52			32		29,869
Northrop Grumman Corp.:
2.55%, 10/15/22			135		130,633
2.93%, 01/15/25			150		142,333
3.25%, 01/15/28			143		133,419
3.85%, 04/15/45			43		37,964
4.03%, 10/15/47			45		40,928
Raytheon Co., 7.20%, 08/15/27			20		25,170
United Technologies Corp.:
1.95%, 11/01/21			200		191,990
4.13%, 11/16/28			135		133,745
4.50%, 06/01/42			160		151,158
4.15%, 05/15/45			2		1,789
					2,097,079

34 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Air Freight & Logistics — 0.0%
FedEx Corp.:
4.90%, 01/15/34	USD		40	$	40,880
3.90%, 02/01/35			55		49,795
3.88%, 08/01/42			70		58,122
4.05%, 02/15/48			75		62,824
					211,621
Airlines — 0.2%
American Airlines Group, Inc., 4.63%, 03/01/20(b)			91		90,545
American Airlines Pass-Through Trust:
Series 2015-1, Class B, 3.70%, 05/01/23			3		3,281
Series 2015-2, Class B, 4.40%, 09/22/23			92		90,517
Series 2016-1, Class B, 5.25%, 01/15/24			2		1,635
Series 2017-1, Class B, 4.95%, 02/15/25			9		8,799
Series 2017-2, Class B, 3.70%, 10/15/25			5		4,592
Series 2015-1, Class A, 3.38%, 05/01/27			79		75,548
Delta Air Lines, Inc.:
2.88%, 03/13/20			338		335,755
2.60%, 12/04/20			130		127,831
3.40%, 04/19/21			10		9,916
3.63%, 03/15/22			32		31,315
Gol Finance, Inc., 7.00%, 01/31/25(b)			62		54,948
Turkish Airlines Pass-Through Trust, Series 2015-1, Class A, 4.20%, 03/15/27(b)			51		44,093
United Airlines Pass-Through Trust:
Series 2014-1, Class B, 4.75%, 04/11/22			13		12,946
Series 2018-1, Class B, 4.60%, 03/01/26			25		25,010
Series 2016-2, Class AA, 2.88%, 10/07/28			9		8,698
US Airways Pass-Through Trust:
Series 2012-2, Class B, 6.75%, 06/03/21			4		3,775
Series 2013-1, Class B, 5.38%, 11/15/21			8		8,711
					937,915
Auto Components — 0.0%
Aptiv plc, 4.25%, 01/15/26			20		19,457
ZF North America Capital, Inc., 4.75%, 04/29/25(b)			150		139,600
					159,057
Automobiles — 0.3%
BMW US Capital LLC, 2.80%, 04/11/26(b)			45		41,251
Daimler Finance North America LLC(b):
3.10%, 05/04/20			150		149,170
3.35%, 05/04/21			170		169,484
3.75%, 11/05/21			150		150,512
General Motors Co.:
6.75%, 04/01/46			20		19,362
5.40%, 04/01/48			30		25,550
Hyundai Capital America, 2.55%, 04/03/20(b)			402		396,792
Toyota Motor Corp., 3.67%, 07/20/28			25		25,299
Volkswagen Group of America Finance LLC, 4.00%, 11/12/21(b)			325		324,798
					1,302,218
Banks — 2.7%
ABN AMRO Bank NV, 2.65%, 01/19/21(b)			235		231,617
Bank of America Corp.:
2.63%, 10/19/20			15		14,843
(LIBOR USD 3 Month + 0.66%), 2.37%, 07/21/21(a)			230		225,884
(LIBOR USD 3 Month + 0.63%), 2.33%, 10/01/21(a)			465		455,924
5.70%, 01/24/22			125		132,484
(LIBOR USD 3 Month + 0.63%), 3.50%, 05/17/22(a)			110		110,017
3.30%, 01/11/23			40		39,394
4.00%, 04/01/24			30		30,166

Security		Par (000)		Value
Banks (continued)
4.20%, 08/26/24	USD		270	$	267,786
Series L, 3.95%, 04/21/25			265		256,768
3.88%, 08/01/25			166		164,218
(LIBOR USD 3 Month + 0.81%), 3.37%, 01/23/26(a)			60		57,365
3.50%, 04/19/26			52		50,041
Series L, 4.18%, 11/25/27			135		129,757
(LIBOR USD 3 Month + 1.04%), 3.42%, 12/20/28(a)			360		336,294
(LIBOR USD 3 Month + 1.07%), 3.97%, 03/05/29(a)			50		48,602
Barclays plc:
(LIBOR USD 3 Month + 1.36%), 4.34%, 05/16/24(a)			200		194,449
4.95%, 01/10/47			200		176,740
BNP Paribas SA, 3.80%, 01/10/24(b)			200		194,724
Citigroup, Inc.:
2.50%, 07/29/19			285		284,026
2.90%, 12/08/21			255		250,876
(LIBOR USD 3 Month + 0.95%), 2.88%, 07/24/23(a)			66		63,870
3.75%, 06/16/24			85		84,404
4.40%, 06/10/25			53		51,868
4.45%, 09/29/27			73		70,359
(LIBOR USD 3 Month + 1.56%), 3.89%, 01/10/28(a)			32		30,877
Citizens Bank NA:
2.25%, 03/02/20			277		274,035
2.65%, 05/26/22			250		242,884
Credit Suisse Group Funding Guernsey Ltd., 2.75%, 03/26/20			250		247,303
HSBC Holdings plc:
2.65%, 01/05/22			277		268,726
(USD Swap Rate 5 Year + 3.75%), 6.00%(a)(h)			200		180,096
ING Groep NV, 4.10%, 10/02/23			200		199,878
Intesa Sanpaolo SpA, 5.02%, 06/26/24(b)			200		181,376
JPMorgan Chase & Co.:
2.55%, 03/01/21			100		98,590
4.63%, 05/10/21			63		64,835
(LIBOR USD 3 Month + 0.61%), 3.51%, 06/18/22(a)			145		145,328
2.97%, 01/15/23			85		82,873
(LIBOR USD 3 Month + 0.73%), 3.56%, 04/23/24(a)			30		29,773
(LIBOR USD 3 Month + 0.89%), 3.80%, 07/23/24(a)			199		199,359
(LIBOR USD 3 Month + 1.00%), 4.02%, 12/05/24(a)			400		403,183
(LIBOR USD 3 Month + 1.34%), 3.78%, 02/01/28(a)			130		126,194
(LIBOR USD 3 Month + 1.38%), 3.54%, 05/01/28(a)			90		85,805
(LIBOR USD 3 Month + 1.26%), 4.20%, 07/23/29(a)			150		149,544
(LIBOR USD 3 Month + 1.33%), 4.45%, 12/05/29(a)			50		50,857
(LIBOR USD 3 Month + 1.36%), 3.88%, 07/24/38(a)			135		122,605
KeyCorp, 4.15%, 10/29/25			45		45,709
Lloyds Banking Group plc, 4.65%, 03/24/26			400		376,076
Mitsubishi UFJ Financial Group, Inc.:
3.54%, 07/26/21			60		60,225
3.46%, 03/02/23			360		357,790
Mizuho Financial Group, Inc.:
2.63%, 04/12/21(b)			200		196,207
2.95%, 02/28/22			472		462,733
(LIBOR USD 3 Month + 1.00%), 3.92%, 09/11/24(a)			200		202,115
Nordea Bank AB, 2.13%, 05/29/20(b)			205		201,888
Royal Bank of Scotland Group plc, (LIBOR USD 3 Month + 1.91%), 5.08%, 01/27/30(a)			200		192,853
Santander UK Group Holdings plc, 2.88%, 08/05/21			215		207,401
Santander UK plc, 5.00%, 11/07/23(b)			200		195,298
Standard Chartered plc, (LIBOR USD 3 Month + 1.15%), 4.25%, 01/20/23(a)(b)			265		262,339
Sumitomo Mitsui Trust Bank Ltd.(b):
2.05%, 03/06/19			505		504,123
1.95%, 09/19/19			235		232,912
Toronto-Dominion Bank (The), 3.50%, 07/19/23			45		45,310

SCHEDULES OF INVESTMENTS 35

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Banks (continued)
UBS Group Funding Switzerland AG(b):
2.95%, 09/24/20	USD		335	$	331,458
(LIBOR USD 3 Month + 0.95%), 2.86%, 08/15/23(a)			235		226,020
4.13%, 09/24/25			200		199,260
US Bancorp:
2.95%, 07/15/22			135		133,163
Series X, 3.15%, 04/27/27			20		19,160
Wells Fargo & Co.:
2.60%, 07/22/20			68		67,341
2.55%, 12/07/20			90		88,732
2.50%, 03/04/21			180		177,043
3.50%, 03/08/22			70		69,767
2.63%, 07/22/22			160		154,282
(LIBOR USD 3 Month + 1.31%), 3.58%, 05/22/28(a)			160		153,612
					12,269,414
Beverages — 0.2%
Anheuser-Busch Cos. LLC(b):
3.65%, 02/01/26			25		23,639
4.70%, 02/01/36			225		208,664
4.90%, 02/01/46			90		83,465
Anheuser-Busch InBev Finance, Inc.:
2.63%, 01/17/23			39		37,119
3.30%, 02/01/23			255		247,949
Anheuser-Busch InBev Worldwide, Inc., 2.50%, 07/15/22			5		4,774
Keurig Dr. Pepper, Inc., 3.55%, 05/25/21(b)			40		39,939
PepsiCo, Inc., 4.00%, 05/02/47			45		43,992
					689,541
Biotechnology — 0.2%
AbbVie, Inc.:
2.30%, 05/14/21			50		48,829
3.75%, 11/14/23			60		59,697
3.60%, 05/14/25			105		100,714
4.25%, 11/14/28			50		48,540
4.50%, 05/14/35			105		97,136
4.40%, 11/06/42			35		30,779
Amgen, Inc., 4.40%, 05/01/45			65		60,787
Baxalta, Inc.:
4.00%, 06/23/25			30		29,330
5.25%, 06/23/45			15		15,204
Celgene Corp.:
3.95%, 10/15/20			10		10,108
3.25%, 08/15/22			60		58,907
3.55%, 08/15/22			60		59,341
Gilead Sciences, Inc.:
2.50%, 09/01/23			60		57,881
3.70%, 04/01/24			130		129,783
3.65%, 03/01/26			30		29,406
4.60%, 09/01/35			29		29,280
4.00%, 09/01/36			50		45,581
5.65%, 12/01/41			60		66,287
4.50%, 02/01/45			39		37,507
					1,015,097
Building Products — 0.0%
Johnson Controls International plc, 5.13%, 09/14/45			23		22,964
Capital Markets — 0.8%
Bank of New York Mellon Corp. (The), (LIBOR USD 3 Month + 1.07%), 3.44%, 02/07/28(a)			50		48,787
CME Group, Inc., 3.75%, 06/15/28			5		5,067
Credit Suisse Group AG, (LIBOR USD 3 Month + 1.24%), 4.21%, 06/12/24(a)(b)			250		249,353

Security		Par (000)		Value
Capital Markets (continued)
Deutsche Bank AG:
2.70%, 07/13/20	USD		144	$	140,060
2.95%, 08/20/20			129		125,209
4.25%, 02/04/21			300		295,655
4.25%, 10/14/21			40		39,110
Goldman Sachs & Co. LLC, (LIBOR USD 3 Month + 0.44%), 3.06%, 02/08/19(a)			1,000		999,376
Goldman Sachs Group, Inc. (The):
2.00%, 04/25/19			48		47,833
2.75%, 09/15/20			71		70,266
2.35%, 11/15/21			209		201,520
(LIBOR USD 3 Month + 1.17%), 3.79%, 05/15/26(a)			40		38,391
(LIBOR USD 3 Month + 1.51%), 3.69%, 06/05/28(a)			315		292,752
(LIBOR USD 3 Month + 1.30%), 4.22%, 05/01/29(a)			130		125,110
(LIBOR USD 3 Month + 1.37%), 4.02%, 10/31/38(a)			60		52,800
Intercontinental Exchange, Inc.:
3.45%, 09/21/23			45		45,226
4.00%, 10/15/23			20		20,478
3.75%, 09/21/28			20		20,013
Moody’s Corp., 2.75%, 12/15/21			62		60,803
Morgan Stanley:
2.75%, 05/19/22			235		228,627
6.25%, 08/09/26			100		110,732
3.63%, 01/20/27			70		66,528
(LIBOR USD 3 Month + 1.34%), 3.59%, 07/22/28(a)			270		255,286
(LIBOR USD 3 Month + 1.14%), 3.77%, 01/24/29(a)			135		129,164
Nuveen LLC, 4.00%, 11/01/28(b)			20		20,609
S&P Global, Inc., 4.00%, 06/15/25			15		15,274
State Street Corp., 2.65%, 05/19/26			38		35,579
					3,739,608
Chemicals — 0.2%
Cydsa SAB de CV, 6.25%, 10/04/27(b)			200		178,750
Dow Chemical Co. (The):
9.00%, 04/01/21			55		60,988
4.38%, 11/15/42			27		23,694
4.63%, 10/01/44			20		18,173
DowDuPont, Inc.:
4.49%, 11/15/25			235		241,950
5.42%, 11/15/48			130		135,063
Sherwin-Williams Co. (The):
4.00%, 12/15/42			26		21,860
4.50%, 06/01/47			15		13,526
					694,004
Commercial Services & Supplies — 0.0%
Catholic Health Initiatives, 4.35%, 11/01/42			30		27,137
Republic Services, Inc.:
4.75%, 05/15/23			30		31,402
2.90%, 07/01/26			42		39,616
3.95%, 05/15/28			45		45,029
Waste Management, Inc., 3.90%, 03/01/35			42		40,765
					183,949
Communications Equipment — 0.0%
Cisco Systems, Inc., 2.95%, 02/28/26			30		28,604
Juniper Networks, Inc., 3.30%, 06/15/20			79		78,704
					107,308
Consumer Finance — 0.7%
AerCap Ireland Capital DAC, 4.63%, 10/30/20			220		221,535
American Express Co.:
3.70%, 11/05/21			210		211,887
3.70%, 08/03/23			70		70,202
American Express Credit Corp., 2.25%, 08/15/19			119		118,459

36 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Consumer Finance (continued)
Capital One Financial Corp.:
2.40%, 10/30/20	USD		94	$	92,028
3.45%, 04/30/21			70		69,967
3.75%, 03/09/27			30		27,864
Discover Financial Services, 4.10%, 02/09/27			17		15,871
Ford Motor Credit Co. LLC:
5.75%, 02/01/21			200		203,980
3.22%, 01/09/22			425		399,103
2.98%, 08/03/22			200		184,843
General Motors Financial Co., Inc.:
3.10%, 01/15/19			43		42,998
4.20%, 03/01/21			35		34,981
3.20%, 07/06/21			267		260,807
4.20%, 11/06/21			435		434,804
3.15%, 06/30/22			175		167,153
4.00%, 01/15/25			140		130,959
4.00%, 10/06/26			15		13,467
HSBC USA, Inc., 2.35%, 03/05/20			270		267,274
Synchrony Financial:
2.60%, 01/15/19			90		89,969
2.70%, 02/03/20			52		51,117
Tarjeta Naranja SA, (Argentina Deposit Rates Badlar Private Banks ARS 30 to 35 Days + 3.50%), 52.29%, 04/11/22(a)(b)			44		17,600
Toyota Motor Credit Corp., 3.05%, 01/11/28			50		48,246
Unifin Financiera SAB de CV SOFOM ENR, 7.25%, 09/27/23(b)			200		183,850
					3,358,964
Containers & Packaging — 0.0%
Reynolds Group Issuer, Inc., 5.75%, 10/15/20			87		87,002
Diversified Consumer Services — 0.1%
Boston University, Series CC, 4.06%, 10/01/48			32		32,098
George Washington University (The), Series 2018, 4.13%, 09/15/48			58		58,039
University of Notre Dame du Lac, Series 2017, 3.39%, 02/15/48			36		34,021
University of Southern California, 3.03%, 10/01/39			31		28,111
Wesleyan University, 4.78%, 07/01/2116			79		80,786
					233,055
Diversified Financial Services — 0.1%
AXA Equitable Holdings, Inc.(b):
3.90%, 04/20/23			10		9,876
5.00%, 04/20/48			50		44,352
GE Capital International Funding Co. Unlimited Co., 4.42%, 11/15/35			200		167,513
Shell International Finance BV:
2.25%, 01/06/23			145		139,450
3.25%, 05/11/25			50		49,302
4.13%, 05/11/35			38		37,713
3.63%, 08/21/42			16		14,504
Woodside Finance Ltd., 3.65%, 03/05/25(b)			15		14,247
					476,957
Diversified Telecommunication Services — 0.5%
AT&T, Inc.:
3.40%, 05/15/25			30		28,250
4.13%, 02/17/26			20		19,544
4.30%, 02/15/30			455		429,968
5.25%, 03/01/37			70		68,756
4.35%, 06/15/45			200		169,013
5.15%, 02/15/50			80		74,113
Axtel SAB de CV, 6.38%, 11/14/24(b)			200		189,250

Security		Par (000)		Value
Diversified Telecommunication Services (continued)
Oi SA, 8.00% ( 8.00% Cash or 4.00% PIK), 07/27/25(i)	USD		100	$	96,969
Telefonica Emisiones SA, 4.67%, 03/06/38			150		135,689
TELUS Corp., 4.60%, 11/16/48			10		9,913
Verizon Communications, Inc.:
(LIBOR USD 3 Month + 0.55%), 3.20%, 05/22/20(a)			205		204,552
4.33%, 09/21/28			518		520,129
4.50%, 08/10/33			175		172,740
4.40%, 11/01/34			33		31,805
4.13%, 08/15/46			50		44,114
5.50%, 03/16/47			200		212,683
					2,407,488
Electric Utilities — 0.6%
AEP Texas, Inc., 3.95%, 06/01/28(b)			130		130,194
AEP Transmission Co. LLC, 4.25%, 09/15/48			70		70,532
Alabama Power Co.:
4.15%, 08/15/44			10		9,783
3.75%, 03/01/45			15		13,835
Series B, 3.70%, 12/01/47			15		13,674
Series A, 4.30%, 07/15/48			60		60,097
Alliant Energy Finance LLC, 3.75%, 06/15/23(b)			25		25,154
Baltimore Gas & Electric Co.:
3.50%, 08/15/46			35		31,060
3.75%, 08/15/47			35		32,094
4.25%, 09/15/48			45		44,688
CenterPoint Energy Houston Electric LLC, 3.95%, 03/01/48			20		19,432
DTE Electric Co., Series A, 4.05%, 05/15/48			85		84,226
Duke Energy Carolinas LLC:
3.95%, 11/15/28			40		41,037
3.88%, 03/15/46			60		56,264
3.70%, 12/01/47			35		31,790
Duke Energy Corp., 4.80%, 12/15/45			5		5,093
Duke Energy Florida LLC:
3.20%, 01/15/27			130		125,785
3.80%, 07/15/28			35		35,350
4.20%, 07/15/48			10		9,957
Duke Energy Progress LLC:
3.00%, 09/15/21			25		25,036
3.25%, 08/15/25			50		48,654
3.70%, 09/01/28			135		136,371
4.20%, 08/15/45			15		14,884
Emera US Finance LP, 2.15%, 06/15/19			101		100,174
Entergy Louisiana LLC:
5.40%, 11/01/24			20		21,984
4.20%, 09/01/48			10		9,870
Eversource Energy, Series L, 2.90%, 10/01/24			60		57,502
Exelon Corp.:
2.45%, 04/15/21			28		27,385
4.95%, 06/15/35			21		21,145
4.45%, 04/15/46			85		79,952
FirstEnergy Transmission LLC, 4.35%, 01/15/25(b)			25		25,261
Florida Power & Light Co.:
3.95%, 03/01/48			76		74,225
4.13%, 06/01/48			60		60,154
Genneia SA, 8.75%, 01/20/22(b)			55		49,569
Kansas City Power & Light Co., 4.20%, 03/15/48			70		67,891
MidAmerican Energy Co., 4.40%, 10/15/44			37		38,119
Mid-Atlantic Interstate Transmission LLC, 4.10%, 05/15/28(b)			25		24,822
Northern States Power Co.:
3.40%, 08/15/42			65		58,580
4.00%, 08/15/45			40		38,980
4.20%, 09/01/48			30		29,507

SCHEDULES OF INVESTMENTS 37

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Electric Utilities (continued)
Ohio Power Co., Series G, 6.60%, 02/15/33	USD		50	$	62,422
Oncor Electric Delivery Co. LLC, 4.55%, 12/01/41			50		52,133
Pacific Gas & Electric Co., 6.05%, 03/01/34			30		27,797
PacifiCorp, 4.13%, 01/15/49			20		19,682
Public Service Electric & Gas Co., 3.65%, 09/01/28			80		80,998
Southern Co. (The), 4.40%, 07/01/46			95		87,349
Southwestern Electric Power Co., Series M, 4.10%, 09/15/28			45		45,159
Tampa Electric Co.:
2.60%, 09/15/22			30		29,084
4.30%, 06/15/48			15		14,333
4.45%, 06/15/49			40		38,995
Trans-Allegheny Interstate Line Co., 3.85%, 06/01/25(b)			79		78,666
Virginia Electric & Power Co.:
Series C, 2.75%, 03/15/23			100		97,505
Series A, 3.50%, 03/15/27			97		95,528
4.00%, 01/15/43			100		94,442
Series B, 4.20%, 05/15/45			28		27,161
Series C, 4.00%, 11/15/46			50		47,293
4.60%, 12/01/48			15		15,645
					2,764,302
Electrical Equipment — 0.0%
Eaton Corp., 2.75%, 11/02/22			49		47,657
Electronic Equipment, Instruments & Components — 0.0%
Corning, Inc., 4.38%, 11/15/57			120		100,716
Tyco Electronics Group SA:
3.45%, 08/01/24			15		14,600
3.13%, 08/15/27			30		27,750
					143,066
Energy Equipment & Services — 0.1%
Halliburton Co.:
3.80%, 11/15/25			240		232,557
5.00%, 11/15/45			15		14,728
Odebrecht Drilling Norbe VIII/IX Ltd., 6.35%, 12/01/21(b)			16		15,475
Odebrecht Offshore Drilling Finance Ltd., 6.72%, 12/01/22(b)			11		10,145
					272,905
Entertainment — 0.1%
NBCUniversal Media LLC, 4.45%, 01/15/43			40		38,557
Viacom, Inc., 6.88%, 04/30/36			40		42,926
Warner Media LLC:
2.10%, 06/01/19			143		142,180
3.55%, 06/01/24			50		48,233
3.60%, 07/15/25			64		60,616
4.65%, 06/01/44			20		17,504
4.85%, 07/15/45			77		69,090
					419,106
Equity Real Estate Investment Trusts (REITs) — 0.2%
American Tower Corp.:
3.30%, 02/15/21			71		70,593
3.50%, 01/31/23			19		18,673
3.00%, 06/15/23			220		211,667
4.40%, 02/15/26			14		13,989
CC Holdings GS V LLC, 3.85%, 04/15/23			40		39,612
Crown Castle International Corp.:
3.40%, 02/15/21			33		32,989
2.25%, 09/01/21			120		116,018
3.20%, 09/01/24			175		166,023
					669,564

Security		Par (000)		Value
Food & Staples Retailing — 0.1%
Kroger Co. (The), 2.65%, 10/15/26	USD		105	$	93,498
Walgreens Boots Alliance, Inc.:
3.80%, 11/18/24			20		19,696
3.45%, 06/01/26			210		197,586
4.80%, 11/18/44			6		5,463
Walmart, Inc.:
3.55%, 06/26/25			65		65,717
4.05%, 06/29/48			30		29,851
					411,811
Food Products — 0.1%
General Mills, Inc.:
3.20%, 04/16/21			40		39,780
4.00%, 04/17/25			44		43,303
Marfrig Holdings Europe BV, 8.00%, 06/08/23(b)			200		200,000
Tyson Foods, Inc.:
3.90%, 09/28/23			15		14,979
3.95%, 08/15/24			75		74,565
3.55%, 06/02/27			70		65,236
5.10%, 09/28/48			15		14,394
					452,257
Health Care Equipment & Supplies — 0.2%
Abbott Laboratories:
3.40%, 11/30/23			14		13,957
3.75%, 11/30/26			142		140,239
Baxter International, Inc., 1.70%, 08/15/21			10		9,594
Becton Dickinson and Co.:
2.13%, 06/06/19			255		253,514
2.68%, 12/15/19			61		60,420
2.89%, 06/06/22			185		179,176
3.30%, 03/01/23			70		68,773
4.69%, 12/15/44			10		9,360
Covidien International Finance SA, 2.95%, 06/15/23			85		83,223
Edwards Lifesciences Corp., 4.30%, 06/15/28			25		25,276
Medtronic, Inc.:
3.50%, 03/15/25			90		89,645
4.38%, 03/15/35			160		163,814
					1,096,991
Health Care Providers & Services — 0.6%
Aetna, Inc.:
4.50%, 05/15/42			27		25,065
4.13%, 11/15/42			25		21,642
4.75%, 03/15/44			30		28,624
AHS Hospital Corp., 5.02%, 07/01/45			21		23,325
Anthem, Inc.:
3.70%, 08/15/21			7		7,047
3.50%, 08/15/24			15		14,713
4.10%, 03/01/28			40		39,206
Baylor Scott & White Holdings, 4.19%, 11/15/45			40		39,428
CHRISTUS Health, Series C, 4.34%, 07/01/28			47		47,962
Cigna Corp., 3.25%, 04/15/25			125		118,794
CVS Health Corp.:
3.70%, 03/09/23			290		286,896
4.00%, 12/05/23			95		95,271
4.10%, 03/25/25			135		133,653
4.78%, 03/25/38			35		33,539
5.13%, 07/20/45			240		233,618
5.05%, 03/25/48			100		97,261
Dignity Health, 2.64%, 11/01/19			57		56,667
Halfmoon Parent, Inc., 3.20%, 09/17/20(b)			360		358,520
Kaiser Foundation Hospitals:
3.50%, 04/01/22			56		56,934
4.15%, 05/01/47			15		14,815

38 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Health Care Providers & Services (continued)
Laboratory Corp. of America Holdings, 2.63%, 02/01/20	USD		85	$	84,409
Mercy Health, Series 2018, 4.30%, 07/01/28			26		26,523
Montefiore Obligated Group, Series 18-C, 5.25%, 11/01/48			49		47,441
Ochsner Clinic Foundation, 5.90%, 05/15/45			33		39,955
PeaceHealth Obligated Group, Series 2018, 4.79%, 11/15/48			45		47,572
Providence St. Joseph Health Obligated Group, Series A, 3.93%, 10/01/48			38		36,196
Southern Baptist Hospital of Florida, Inc., 4.86%, 07/15/45			35		38,093
SSM Health Care Corp., Series 2018, 3.69%, 06/01/23			49		49,449
Sutter Health, Series 2018, 3.70%, 08/15/28			45		45,123
Toledo Hospital (The), 5.75%, 11/15/38			83		87,641
Trinity Health Corp., 4.13%, 12/01/45			36		34,205
UnitedHealth Group, Inc.:
3.75%, 07/15/25			70		70,859
3.70%, 12/15/25			80		80,798
3.10%, 03/15/26			30		28,953
4.63%, 07/15/35			20		21,200
4.20%, 01/15/47			25		24,841
3.75%, 10/15/47			50		45,758
4.45%, 12/15/48			30		30,880
					2,572,876
Hotels, Restaurants & Leisure — 0.1%
McDonald’s Corp.:
3.35%, 04/01/23			85		84,570
3.70%, 01/30/26			70		68,620
4.70%, 12/09/35			50		50,221
3.70%, 02/15/42			20		17,289
4.88%, 12/09/45			57		57,379
4.45%, 03/01/47			40		38,244
					316,323
Industrial Conglomerates — 0.0%
Honeywell International, Inc., 3.81%, 11/21/47			20		18,986
Insurance — 0.2%
Ambac Assurance Corp., 5.10%, 06/07/20(b)			5		6,430
Ambac LSNI LLC, (LIBOR USD 3 Month + 5.00%), 7.80%, 02/12/23(a)(b)			30		29,981
Aon Corp., 4.50%, 12/15/28			120		121,477
Aon plc, 4.75%, 05/15/45			20		19,625
Hartford Financial Services Group, Inc. (The), 4.30%, 04/15/43			15		13,935
Marsh & McLennan Cos., Inc.:
4.05%, 10/15/23			35		35,511
3.50%, 06/03/24			144		141,845
3.50%, 03/10/25			45		44,206
3.75%, 03/14/26			5		4,941
4.35%, 01/30/47			7		6,528
4.20%, 03/01/48			60		54,495
MetLife, Inc., 4.13%, 08/13/42			10		9,363
Principal Financial Group, Inc., 4.30%, 11/15/46			15		13,801
Prudential Financial, Inc., 3.88%, 03/27/28			90		90,446
Travelers Cos., Inc. (The), 4.60%, 08/01/43			35		36,290
Trinity Acquisition plc, 4.40%, 03/15/26			20		19,874
Willis North America, Inc., 3.60%, 05/15/24			131		127,903
					776,651
IT Services — 0.2%
DXC Technology Co., 2.88%, 03/27/20			48		47,585
Fidelity National Information Services, Inc.:
3.63%, 10/15/20			8		8,037
3.00%, 08/15/26			180		165,594

Security		Par (000)		Value
IT Services (continued)
4.50%, 08/15/46	USD		5	$	4,547
4.75%, 05/15/48			60		55,773
Fiserv, Inc.:
3.85%, 06/01/25			20		19,822
4.20%, 10/01/28			65		64,870
IBM Credit LLC, 3.45%, 11/30/20			100		100,517
Total System Services, Inc.:
3.80%, 04/01/21			20		19,996
3.75%, 06/01/23			25		24,796
4.80%, 04/01/26			124		124,965
Visa, Inc.:
3.15%, 12/14/25			50		49,135
4.15%, 12/14/35			41		42,403
4.30%, 12/14/45			30		31,004
					759,044
Life Sciences Tools & Services — 0.1%
Thermo Fisher Scientific, Inc.:
4.50%, 03/01/21			95		97,094
3.00%, 04/15/23			50		48,645
4.15%, 02/01/24			110		111,427
2.95%, 09/19/26			117		107,973
					365,139
Media — 0.5%
CBS Corp., 2.30%, 08/15/19			107		106,206
Charter Communications Operating LLC:
3.58%, 07/23/20			220		219,763
4.46%, 07/23/22			80		80,769
4.50%, 02/01/24			50		49,924
4.91%, 07/23/25			129		128,272
6.38%, 10/23/35			200		205,289
5.75%, 04/01/48			100		93,642
Comcast Corp.:
3.30%, 10/01/20			195		195,746
3.45%, 10/01/21			20		20,203
3.38%, 02/15/25			15		14,691
3.15%, 03/01/26			140		133,954
4.15%, 10/15/28			75		76,157
4.25%, 10/15/30			70		70,792
4.40%, 08/15/35			34		32,892
3.20%, 07/15/36			229		196,987
3.40%, 07/15/46			172		142,515
4.95%, 10/15/58			40		40,666
Cox Communications, Inc., 3.15%, 08/15/24(b)			210		202,021
Discovery Communications LLC:
4.38%, 06/15/21			70		71,234
3.80%, 03/13/24			67		65,361
3.95%, 06/15/25(b)			55		52,831
5.20%, 09/20/47			15		13,786
Interpublic Group of Cos., Inc. (The):
3.50%, 10/01/20			25		25,031
3.75%, 10/01/21			15		15,093
Time Warner Cable LLC:
5.00%, 02/01/20			89		90,248
4.00%, 09/01/21			25		24,848
5.50%, 09/01/41			29		26,428
4.50%, 09/15/42			9		7,235
					2,402,584
Metals & Mining — 0.1%
Anglo American Capital plc, 3.63%, 09/11/24(b)			200		189,050
Barrick Gold Corp., 5.25%, 04/01/42			29		28,999
BHP Billiton Finance USA Ltd., 5.00%, 09/30/43			38		41,514
Largo Resources Ltd., 9.25%, 06/01/21(b)			4		4,205

SCHEDULES OF INVESTMENTS 39

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Metals & Mining (continued)
Newmont Mining Corp., 3.50%, 03/15/22	USD		120	$	118,748
Nucor Corp., 5.20%, 08/01/43			21		22,271
Steel Dynamics, Inc., 5.13%, 10/01/21			38		37,952
					442,739
Multi-Utilities — 0.1%
Ameren Illinois Co., 3.80%, 05/15/28			50		50,864
Consumers Energy Co.:
3.80%, 11/15/28			15		15,362
4.05%, 05/15/48			15		14,791
DTE Energy Co., Series D, 3.70%, 08/01/23			40		39,720
NiSource, Inc.:
2.65%, 11/17/22			10		9,574
3.49%, 05/15/27			80		76,339
WEC Energy Group, Inc., 3.38%, 06/15/21			20		19,988
					226,638
Oil, Gas & Consumable Fuels — 1.5%
Anadarko Petroleum Corp., 6.20%, 03/15/40			70		72,327
Andeavor Logistics LP:
5.50%, 10/15/19			90		90,758
5.25%, 01/15/25			20		20,359
5.20%, 12/01/47			70		63,020
Apache Corp.:
2.63%, 01/15/23			43		40,618
5.10%, 09/01/40			30		27,172
4.75%, 04/15/43			80		68,621
BP Capital Markets America, Inc., 3.79%, 02/06/24			60		60,647
Buckeye Partners LP, 4.88%, 02/01/21			155		156,722
Cimarex Energy Co.:
4.38%, 06/01/24			120		119,332
3.90%, 05/15/27			80		74,235
Concho Resources, Inc.:
4.38%, 01/15/25			125		123,463
3.75%, 10/01/27			135		127,084
Continental Resources, Inc.:
5.00%, 09/15/22			173		171,773
4.50%, 04/15/23			233		229,313
3.80%, 06/01/24			75		71,000
Devon Energy Corp., 4.00%, 07/15/21			40		40,039
Enbridge, Inc.:
2.90%, 07/15/22			90		87,099
3.70%, 07/15/27			70		66,300
(LIBOR USD 3 Month + 3.42%), 5.50%, 07/15/77(a)			70		59,269
Energy Transfer LP:
4.25%, 03/15/23			215		206,938
5.88%, 01/15/24			130		132,275
Energy Transfer Operating LP:
5.20%, 02/01/22			20		20,539
4.90%, 02/01/24			20		20,242
6.50%, 02/01/42			120		119,763
Energy Transfer Partners LP:
5.75%, 09/01/20			20		20,526
5.88%, 03/01/22			165		171,678
5.00%, 10/01/22			30		30,616
4.50%, 11/01/23			125		125,041
Enterprise Products Operating LLC:
4.45%, 02/15/43			67		60,799
5.10%, 02/15/45			23		23,084
4.25%, 02/15/48			35		31,023
EOG Resources, Inc.:
4.15%, 01/15/26			52		53,372
3.90%, 04/01/35			10		9,441

Security		Par (000)		Value
Oil, Gas & Consumable Fuels (continued)
Exxon Mobil Corp., 1.82%, 03/15/19	USD		84	$	83,845
Hess Corp., 5.80%, 04/01/47			35		31,414
Kinder Morgan Energy Partners LP:
5.80%, 03/15/35			10		10,223
6.38%, 03/01/41			15		15,920
5.00%, 03/01/43			25		22,685
Kinder Morgan, Inc.:
3.05%, 12/01/19			100		99,423
3.15%, 01/15/23			190		184,630
5.55%, 06/01/45			10		9,904
5.05%, 02/15/46			160		146,102
Marathon Oil Corp., 2.70%, 06/01/20			140		137,931
Marathon Petroleum Corp.:
5.13%, 03/01/21			175		180,052
4.75%, 12/15/23(b)			180		184,697
5.85%, 12/15/45			50		49,365
MPLX LP:
4.88%, 12/01/24			25		25,449
4.88%, 06/01/25			50		50,458
4.13%, 03/01/27			140		133,296
5.20%, 03/01/47			35		32,217
Northwest Pipeline LLC, 4.00%, 04/01/27			135		131,216
Petrobras Global Finance BV:
8.75%, 05/23/26			40		44,900
7.38%, 01/17/27			78		80,145
6.00%, 01/27/28			40		37,700
Pioneer Natural Resources Co.:
3.95%, 07/15/22			10		10,030
4.45%, 01/15/26			192		193,852
Plains All American Pipeline LP, 3.65%, 06/01/22			10		9,817
Resolute Energy Corp., 8.50%, 05/01/20			90		88,650
Sabine Pass Liquefaction LLC:
5.63%, 04/15/23			190		200,180
5.75%, 05/15/24			140		146,070
5.63%, 03/01/25			180		186,923
5.88%, 06/30/26			149		157,762
Spectra Energy Partners LP, 4.50%, 03/15/45			89		80,476
Sunoco Logistics Partners Operations LP:
5.35%, 05/15/45			55		48,682
5.40%, 10/01/47			80		72,497
Tecpetrol SA, 4.88%, 12/12/22(b)			14		12,845
Texas Eastern Transmission LP(b):
3.50%, 01/15/28			60		56,648
4.15%, 01/15/48			30		26,701
TransCanada PipeLines Ltd.:
4.88%, 01/15/26			110		113,853
6.10%, 06/01/40			55		61,387
5.00%, 10/16/43			30		29,644
Transcontinental Gas Pipe Line Co. LLC:
7.85%, 02/01/26			41		49,564
4.00%, 03/15/28			80		78,227
4.60%, 03/15/48			25		23,376
Valero Energy Corp.:
3.65%, 03/15/25			76		72,526
3.40%, 09/15/26			9		8,256
Williams Cos., Inc. (The):
4.13%, 11/15/20			70		70,556
7.88%, 09/01/21			50		54,603
3.70%, 01/15/23			50		48,775
4.55%, 06/24/24			40		40,388
4.00%, 09/15/25			90		86,901
Series A, 7.50%, 01/15/31			35		41,780
5.75%, 06/24/44			55		55,277
					6,612,306

40 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Paper & Forest Products — 0.0%
Georgia-Pacific LLC:
5.40%, 11/01/20(b)	USD		50	$	51,809
3.73%, 07/15/23(b)			45		45,428
7.38%, 12/01/25			37		44,617
					141,854
Pharmaceuticals — 0.4%
Allergan Finance LLC, 3.25%, 10/01/22			45		43,997
Allergan Funding SCS:
3.45%, 03/15/22			250		246,011
3.80%, 03/15/25			484		472,492
Bayer US Finance II LLC, 3.60%, 07/15/42(b)			23		16,969
Bayer US Finance LLC, 3.38%, 10/08/24(b)			200		188,599
GlaxoSmithKline Capital, Inc., 3.88%, 05/15/28			105		106,703
Johnson & Johnson:
2.63%, 01/15/25			10		9,631
2.45%, 03/01/26			15		14,088
3.63%, 03/03/37			15		14,429
Shire Acquisitions Investments Ireland DAC:
1.90%, 09/23/19			290		285,936
2.40%, 09/23/21			35		33,844
3.20%, 09/23/26			120		108,591
Takeda Pharmaceutical Co. Ltd., 5.00%, 11/26/28(b)			200		204,272
Wyeth LLC:
6.45%, 02/01/24			15		17,176
5.95%, 04/01/37			70		83,948
					1,846,686
Road & Rail — 0.2%
Burlington Northern Santa Fe LLC:
6.15%, 05/01/37			23		28,017
4.15%, 04/01/45			16		15,513
4.70%, 09/01/45			11		11,502
4.13%, 06/15/47			73		70,648
4.15%, 12/15/48			5		4,869
CSX Corp.:
4.25%, 03/15/29			45		45,688
4.75%, 11/15/48			20		20,217
4.25%, 11/01/66			43		37,175
Norfolk Southern Corp.:
3.65%, 08/01/25			60		60,313
2.90%, 06/15/26			90		85,223
4.05%, 08/15/52			41		36,617
Penske Truck Leasing Co. LP, 3.40%, 11/15/26(b)			94		87,849
Ryder System, Inc., 3.75%, 06/09/23			10		9,939
Union Pacific Corp.:
3.75%, 07/15/25			75		75,712
3.38%, 02/01/35			29		25,380
3.60%, 09/15/37			80		71,498
3.80%, 10/01/51			20		16,963
3.88%, 02/01/55			37		31,592
					734,715
Semiconductors & Semiconductor Equipment — 0.4%
Analog Devices, Inc.:
2.50%, 12/05/21			80		78,092
3.90%, 12/15/25			39		38,272
3.50%, 12/05/26			29		27,756
5.30%, 12/15/45			28		29,455
Applied Materials, Inc.:
3.90%, 10/01/25			110		110,694
5.10%, 10/01/35			58		61,724
4.35%, 04/01/47			49		47,907

Security		Par (000)		Value
Semiconductors & Semiconductor Equipment (continued)
Broadcom Corp.:
2.38%, 01/15/20	USD		115	$	113,564
3.00%, 01/15/22			383		368,332
2.65%, 01/15/23			35		32,572
3.63%, 01/15/24			26		24,599
Lam Research Corp.:
2.75%, 03/15/20			60		59,436
2.80%, 06/15/21			35		34,610
NVIDIA Corp., 3.20%, 09/16/26			80		75,876
NXP BV(b):
4.13%, 06/01/21			200		197,500
3.88%, 09/01/22			230		220,800
4.88%, 03/01/24			45		45,198
QUALCOMM, Inc.:
2.60%, 01/30/23			75		72,174
2.90%, 05/20/24			50		47,610
3.45%, 05/20/25			65		62,539
4.80%, 05/20/45			56		53,340
4.30%, 05/20/47			95		84,374
Texas Instruments, Inc.:
2.25%, 05/01/23			30		28,829
4.15%, 05/15/48			25		24,946
					1,940,199
Software — 0.3%
Autodesk, Inc., 3.50%, 06/15/27			160		149,551
Microsoft Corp.:
3.50%, 02/12/35			69		65,854
3.45%, 08/08/36			175		164,825
3.70%, 08/08/46			210		201,177
Oracle Corp.:
2.50%, 10/15/22			10		9,732
2.40%, 09/15/23			30		28,789
3.40%, 07/08/24			70		69,861
2.65%, 07/15/26			30		27,803
3.25%, 11/15/27			41		39,544
3.90%, 05/15/35			62		59,348
4.00%, 07/15/46			74		69,048
4.00%, 11/15/47			15		13,976
VMware, Inc., 2.30%, 08/21/20			264		258,577
					1,158,085
Specialty Retail — 0.0%
Home Depot, Inc. (The):
3.90%, 12/06/28			20		20,485
5.88%, 12/16/36			45		54,065
3.50%, 09/15/56			20		16,817
Lowe’s Cos., Inc., 4.38%, 09/15/45			60		53,878
					145,245
Technology Hardware, Storage & Peripherals — 0.2%
Apple, Inc.:
2.70%, 05/13/22			80		79,109
3.00%, 02/09/24			138		136,284
2.85%, 05/11/24			205		200,006
4.50%, 02/23/36			30		31,548
3.85%, 05/04/43			100		94,698
3.45%, 02/09/45			29		25,679
4.65%, 02/23/46			78		82,566
Seagate HDD Cayman:
4.25%, 03/01/22			25		23,892
5.75%, 12/01/34			3		2,335
					676,117

SCHEDULES OF INVESTMENTS 41

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Thrifts & Mortgage Finance — 0.0%
Washington Mutual Escrow Bonds(e)(g):
0.00%, 11/06/09	USD		100	$	—
0.00%, 09/29/17			400		—
					—
Tobacco — 0.1%
Altria Group, Inc.:
2.85%, 08/09/22			30		28,800
4.00%, 01/31/24			125		122,843
BAT Capital Corp.:
3.22%, 08/15/24			225		207,246
4.54%, 08/15/47			82		65,276
Reynolds American, Inc., 4.45%, 06/12/25			240		231,416
					655,581
Trading Companies & Distributors — 0.0%
Air Lease Corp., 2.63%, 07/01/22			70		66,353
GATX Corp., 2.60%, 03/30/20			67		66,349
					132,702
Wireless Telecommunication Services — 0.2%
Sprint Spectrum Co. LLC(b):
3.36%, 09/20/21			193		190,772
4.74%, 03/20/25			415		407,219
Vodafone Group plc:
3.75%, 01/16/24			241		237,537
4.13%, 05/30/25			55		54,334
5.25%, 05/30/48			130		122,049
					1,011,911
Total Corporate Bonds — 13.1% (Cost: $60,466,026)					59,207,281
Foreign Agency Obligations — 0.1%
Argentina — 0.0%
YPF SA, 8.75%, 04/04/24			47		44,180
France — 0.1%
Electricite de France SA, 4.50%, 09/21/28(b)			200		193,847
Total Foreign Agency Obligations — 0.1% (Cost: $250,948)					238,027
Foreign Government Obligations — 0.8%
Argentina — 0.1%
Bonos de la Nacion Argentina con Ajuste por CER, 4.00%, 03/06/20	ARS		740		17,052
Republic of Argentina:
8.00%, 10/08/20	USD		58		54,244
6.88%, 04/22/21			187		169,002
5.63%, 01/26/22			82		69,188
4.63%, 01/11/23			30		23,662
8.75%, 05/07/24			56		51,213
6.88%, 01/11/48			83		57,581
7.13%, 06/28/2117			49		35,035
					476,977
Colombia — 0.1%
Republic of Colombia:
7.50%, 08/26/26	COP		476,000		154,279
3.88%, 04/25/27	USD		340		324,445
7.00%, 06/30/32	COP		344,000		104,294
					583,018

Security		Par (000)		Value
Egypt — 0.0%
Arab Republic of Egypt, 5.75%, 04/29/20	USD		100	$	100,875
Hungary — 0.0%
Republic of Hungary, 5.38%, 03/25/24			140		149,238
Indonesia — 0.0%
Republic of Indonesia, 7.50%, 05/15/38	IDR		1,432,000		90,670
Mexico — 0.3%
United Mexican States:
4.15%, 03/28/27	USD		1,032		994,590
7.50%, 06/03/27	MXN		12		56,841
7.75%, 11/23/34			14		65,665
10.00%, 11/20/36			10		55,945
8.50%, 11/18/38			20		97,834
7.75%, 11/13/42			20		89,711
					1,360,586
Oman — 0.1%
Oman Sovereign Sukuk SAOC, 5.93%, 10/31/25(b)	USD		200		190,250
Panama — 0.1%
Republic of Panama, 3.75%, 03/16/25			200		198,450
Peru — 0.0%
Republic of Peru, 7.35%, 07/21/25			150		182,025
Philippines — 0.1%
Republic of the Philippines, 3.00%, 02/01/28			260		246,025
South Africa — 0.0%
Republic of South Africa, 8.75%, 02/28/48	ZAR		810		50,070
Uruguay — 0.0%
Oriental Republic of Uruguay, 4.38%, 10/27/27	USD		140		140,315
Total Foreign Government Obligations — 0.8% (Cost: $3,928,430)					3,768,499
		Shares
Investment Companies — 0.4%(v)
iShares Edge MSCI Multifactor USA ETF			12,018		334,822
iShares iBoxx $ High Yield Corporate Bond ETF			11,100		900,210
iShares J.P. Morgan USD Emerging Markets Bond ETF			5,333		554,152
Total Investment Companies — 0.4% (Cost: $1,852,128)					1,789,184
		Par (000)
Municipal Bonds — 2.8%
Adams & Weld Counties School District No. 27J, Series 2017, GO, 5.00%, 12/01/42	USD		20		22,805
Alamo Community College District;
Series 2017, GO, 5.00%, 08/15/35			20		23,181
Series 2017, GO, 5.00%, 08/15/36			20		23,066
Series 2017, GO, 5.00%, 08/15/37			20		22,984
Series 2017, GO, 5.00%, 08/15/38			20		22,886
American Municipal Power, Inc. (Combined Hydroelectric Project);
Series 2010B, RB, 7.83%, 02/15/41			20		29,310
Series 2009B, RB, 6.45%, 02/15/44			15		19,259
Arizona Health Facilities Authority (Banner Health), Series 2007B, RB, VRDN, 2.42%, 01/01/37(j)			40		38,089
Arizona State University, Series 2017B, RB, 5.00%, 07/01/43			10		11,353

42 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Municipal Bonds (continued)
Bay Area Toll Authority;
Series 2010S-1, RB, 6.92%, 04/01/40	USD		80	$	106,804
Series 2010S-1, RB, 7.04%, 04/01/50			110		156,287
Berks County Industrial Development Authority (Tower Health Project);
Series 2017, RB, 5.00%, 11/01/47			20		21,629
Series 2017, RB, 5.00%, 11/01/50			20		21,505
Buckeye Tobacco Settlement Financing Authority, Series 2007A-2, RB, 5.88%, 06/01/47			90		85,387
Buena Park School District, Series 2018, GO, 5.00%, 08/01/47			10		11,373
California Health Facilities Financing Authority (Cedars- Sinai Medical Center);
Series 2016A, RB, 5.00%, 08/15/33			20		23,207
Series 2017A, RB, 5.00%, 08/15/47			20		21,949
California Infrastructure & Economic Development Bank;
Series 2017, RB, 5.00%, 05/15/47			10		11,368
Series 2017, RB, 5.00%, 05/15/52			10		11,308
California Municipal Finance Authority (LINXS APM Project), Series 2018A, RB, 5.00%, 12/31/47			20		21,715
California State Public Works Board (Various Capital Projects), Series 2009G, Sub-Series G-2, RB, 8.36%, 10/01/34			40		58,119
Canaveral Port Authority;
Series 2018A, RB, 5.00%, 06/01/45			30		32,479
Series 2018B, RB, 5.00%, 06/01/48			30		33,025
Central Puget Sound Regional Transit Authority, Series 2015S-1, RB, 5.00%, 11/01/50			20		22,321
Central Texas Regional Mobility Authority;
Series 2015A, RB, 5.00%, 01/01/45			20		21,513
Series 2016, RB, 5.00%, 01/01/46			20		21,589
Chesapeake Bay Bridge & Tunnel District (Parallel Thimble Shoal Tunnel Project);
Series 2016, RB, 5.00%, 07/01/41			20		22,524
Series 2016, RB, 5.00%, 07/01/51			10		10,803
Chicago O’Hare International Airport, Series 2018C, RB, 4.47%, 01/01/49			120		121,741
City & County of Denver;
Series 2016A, RB, 5.00%, 08/01/44			40		44,810
Series 2018A-1, RB, 5.00%, 08/01/48			50		55,763
City & County of Denver Airport System;
Series 2017A, RB, 5.00%, 11/15/29			15		17,447
Series 2017A, RB, 5.00%, 11/15/30			15		17,332
City of Atlanta;
Series 2015, RB, 5.00%, 11/01/40			10		11,114
Series 2018A, RB, 5.00%, 11/01/41			30		34,247
Series 2018B, RB, 5.00%, 11/01/43			20		22,798
Series 2018B, RB, 5.00%, 11/01/47			20		22,732
City of Aurora;
Series 2016, RB, 5.00%, 08/01/41			50		56,407
Series 2016, RB, 5.00%, 08/01/46			60		67,602
City of Austin Water & Wastewater System, Series 2014, RB, 5.00%, 11/15/43			20		22,031
City of Cartersville, Series 2018, RB, 5.00%, 06/01/48			20		22,818
City of Colorado Springs Utilities System, Series 2017A-2, RB, 5.00%, 11/15/42			10		11,429
City of Columbia Waterworks & Sewer System;
Series 2018, RB, 5.00%, 02/01/42			20		22,935
Series 2018, RB, 5.00%, 02/01/48			20		22,833
City of Long Beach, Series 2017C, RB, 5.00%, 05/15/47			30		34,053
City of New York;
Series 2018F, Sub-Series F-1, GO, 5.00%, 04/01/40			30		34,239
Series 2018F, Sub-Series F-1, GO, 5.00%, 04/01/45			30		34,085

Security		Par (000)		Value
Municipal Bonds (continued)
City of Portland (Portland Building Project);
Series 2018B, GO, 5.00%, 06/15/37	USD		20	$	23,522
Series 2018B, GO, 5.00%, 06/15/40			20		23,306
City of Riverside, Series 2010A, RB, 7.61%, 10/01/40			25		36,578
City of San Antonio Electric & Gas Systems;
Series 2010A, RB, 5.81%, 02/01/41			45		57,060
Series 2013, RB, 5.00%, 02/01/48(k)			15		16,179
Clark County School District;
Series 2018A, GO, 5.00%, 06/15/30			10		11,644
Series 2018A, GO, 5.00%, 06/15/31			30		34,771
Series 2018A, GO, 5.00%, 06/15/33			30		34,505
Series 2018A, GO, 5.00%, 06/15/34			30		34,216
Colorado Health Facilities Authority (Catholic Health Initiatives), Series 2011A, RB, 5.25%, 02/01/31			10		10,505
Commonwealth Financing Authority;
Series 2018A, RB, 3.86%, 06/01/38			30		29,585
Series 2016A, RB, 4.14%, 06/01/38			30		30,316
Commonwealth of Massachusetts;
Series 2017F, GO, 5.00%, 11/01/42			30		34,148
Series 2018A, GO, 5.00%, 01/01/45			30		34,091
Series 2017F, GO, 5.00%, 11/01/45			20		22,683
Commonwealth of Massachusetts Transportation Fund (Rail Enhancement & Accelerated Bridge Programs), Series 2018A, RB, 5.00%, 06/01/48			40		45,636
Commonwealth of Puerto Rico, Series 2014A, GO, 8.00%, 07/01/35(g)(l)			235		126,312
Connecticut State Health & Educational Facilities Authority (Hartford Healthcare Corp.);
Series 2015F, RB, 5.00%, 07/01/45			30		31,877
Series 2015L, RB, 5.00%, 07/01/45			40		43,799
Contra Costa Community College District, Series 2010B, GO, 6.50%, 08/01/34			25		31,764
County of Anne Arundel, Series 2018, GO, 5.00%, 10/01/47			20		22,923
County of Clark;
Series 2018A, GO, 5.00%, 06/01/43			40		45,740
Series 2018A, GO, 5.00%, 05/01/48			100		113,481
County of Franklin;
Series 2018, RB, 5.00%, 06/01/43			20		23,028
Series 2018, RB, 5.00%, 06/01/48			40		45,880
County of King;
Series 2017, RB, 5.00%, 07/01/42			10		11,401
Series 2015A, RB, 5.00%, 07/01/47			20		22,064
County of Miami-Dade;
Series 2016B, RB, 2.50%, 10/01/24			50		48,368
Series 2017D, RB, 3.35%, 10/01/29			10		9,551
Series 2017D, RB, 3.45%, 10/01/30			15		14,337
Series 2017D, RB, 3.50%, 10/01/31			15		14,285
Series 2018C, RB, 4.06%, 10/01/31			20		20,514
Series 2016A, GO, 5.00%, 07/01/35			20		22,782
Series 2015A, RB, 5.00%, 10/01/38			45		49,106
Series 2017B, RB, 5.00%, 10/01/40			20		22,163
Dallas Area Rapid Transit;
Series 2016A, RB, 5.00%, 12/01/41			30		33,521
Series 2016A, RB, 5.00%, 12/01/46			40		44,563
Denton Independent School District, Series 2018, GO, 5.00%, 08/15/43			30		34,062
District of Columbia, Series 2017D, GO, 5.00%, 06/01/42			25		28,354
District of Columbia Water & Sewer Authority, Series 2018B, RB, 5.00%, 10/01/49			20		22,706
DuBois Hospital Authority (Penn Highlands Healthcare), Series 2018, RB, 5.00%, 07/15/43			20		21,965

SCHEDULES OF INVESTMENTS 43

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Municipal Bonds (continued)
Dutchess County Local Development Corp. (Health Quest Systems, Inc. Project), Series 2016B, RB, 5.00%, 07/01/46	USD		50	$	54,631
Florida Department of Management Services;
Series 2018A, 5.00%, 11/01/27			30		36,224
Series 2018A, 5.00%, 11/01/28			30		36,615
Series 2018A, 5.00%, 11/01/29			20		24,674
Grand Parkway Transportation Corp. (Grand Parkway Project), Series 2018A, RB, 5.00%, 10/01/43			70		79,292
Grant County Public Utility District No. 2 (The Priest Rapids Project), Series 2015M, RB, 4.58%, 01/01/40			15		15,772
Great Lakes Water Authority Water Supply System, Series 2016C, RB, 5.25%, 07/01/33			5		5,797
Health & Educational Facilities Authority of the State of Missouri (Saint Luke’s Health System, Inc.);
Series 2016, RB, 5.00%, 11/15/29			15		17,033
Series 2016A, RB, 3.65%, 01/15/46			15		14,451
Series 2017A, RB, 3.65%, 08/15/57			60		56,646
Houston Independent School District, Series 2018, GO, 5.00%, 07/15/36			20		23,403
Idaho Health Facilities Authority (Trinity Health Credit Group), Series 2017A, RB, 5.00%, 12/01/47			20		22,263
Indiana Finance Authority (CWA Authority Project);
Series 2018A, RB, 5.00%, 02/01/35			20		23,610
Series 2015A, RB, 5.00%, 10/01/45			40		43,617
Indiana Housing & Community Development Authority, Series 2018A, RB, 3.80%, 07/01/38			10		10,038
Kentucky Economic Development Finance Authority (Owensboro Health, Inc.), Series 2015A, RB, 5.25%, 06/01/50			10		10,470
Kentucky Turnpike Authority (Revitalization Projects), Series 2010A, RB, 5.00%, 07/01/20			20		20,900
Las Vegas Convention & Visitors Authority, Series 2018B, RB, 5.00%, 07/01/43			30		33,557
Las Vegas Valley Water District, Series 2016A, GO, 5.00%, 06/01/46			10		11,144
Lexington County Health Services District, Inc., Series 2016, RB, 5.00%, 11/01/41			20		21,429
Los Angeles Community College District, Series 2010E, GO, 6.60%, 08/01/42			95		130,532
Los Angeles County Metropolitan Transportation Authority, Series 2017A, RB, 5.00%, 07/01/42			40		45,927
Los Angeles Department of Water & Power System (Water System Revenue Bonds);
Series 2010D, RB, 6.57%, 07/01/45			20		27,733
Series 2010A, RB, 6.60%, 07/01/50			60		84,680
Los Angeles Unified School District, Series 2010I, GO, 6.76%, 07/01/34			60		77,215
Louisiana Public Facilities Authority, Series 2018E, RB, 5.00%, 07/01/48			20		21,789
Maryland Community Development Administration, Series 2018A, RB, 3.85%, 09/01/33			20		20,354
Maryland Stadium Authority (Baltimore City Public Schools Construction & Revitalization Program), Series 2016, RB, 5.00%, 05/01/41			20		22,293
Massachusetts Bay Transportation Authority;
Series 2017A, Sub-Series A-1, RB, 5.00%, 07/01/39			10		11,361
Series 2017A, Sub-Series A-1, RB, 5.00%, 07/01/40			10		11,337
Series 2017A, Sub-Series A-1, RB, 5.00%, 07/01/41			20		22,643
Series 2017A, Sub-Series A-1, RB, 5.00%, 07/01/42			20		22,627
Series 2017A, Sub-Series A-2, RB, 5.00%, 07/01/43			10		11,298

Security		Par (000)		Value
Municipal Bonds (continued)
Massachusetts Development Finance Agency (Partners Healthcare System Issue);
Series 2018J-2, RB, 5.00%, 07/01/43	USD		30	$	32,747
Series 2017, RB, 5.00%, 09/01/45			10		11,191
Series 2016Q, RB, 5.00%, 07/01/47			20		21,990
Series 2018J-2, RB, 5.00%, 07/01/48			60		65,245
Series 2018J-2, RB, 5.00%, 07/01/53			30		32,301
Massachusetts Housing Finance Agency;
Series 2014B, RB, 4.50%, 12/01/39			10		10,338
Series 2014B, RB, 4.60%, 12/01/44			10		10,328
Series 2015A, RB, 4.50%, 12/01/48			10		10,330
Massachusetts Port Authority, Series 2016B, RB, 5.00%, 07/01/43			20		22,046
Massachusetts School Building Authority, Series 2018A, RB, 5.25%, 02/15/48			35		40,543
Massachusetts Water Resources Authority, Series 2016C, RB, 5.00%, 08/01/40			10		11,260
Mesquite Independent School District, Series 2017B, GO, 5.00%, 08/15/42			20		22,401
Metropolitan Atlanta Rapid Transit Authority;
Series 2015A, RB, 5.00%, 07/01/41			20		22,232
Series 2015A, RB, 5.00%, 07/01/42			20		22,220
Series 2015B, RB, 5.00%, 07/01/45			20		22,453
Metropolitan Government Nashville & Davidson County Health & Educational Facilities Board (Vanderbilt University Medical Center);
Series 2016A, RB, 5.00%, 07/01/40			10		10,790
Series 2016A, RB, 5.00%, 07/01/46			30		32,227
Metropolitan St. Louis Sewer District;
Series 2017A, RB, 5.00%, 05/01/42			30		34,178
Series 2017A, RB, 5.00%, 05/01/47			30		33,942
Metropolitan Transportation Authority;
Series 2009C, RB, 7.34%, 11/15/39			170		241,320
Series 2010C-1, RB, 6.69%, 11/15/40			30		38,681
Series 2017A, RB, 5.00%, 11/15/42			30		33,959
Series 2015A, Sub-Series 2015A-1, RB, 5.00%, 11/15/45			10		10,831
Series 2017A, Sub-Series A-1, RB, 5.25%, 11/15/57			40		44,334
Metropolitan Washington Airports Authority;
Series 2016A, RB, 5.00%, 10/01/32			40		45,342
Series 2018A, RB, 5.00%, 10/01/43			40		44,671
Metropolitan Washington Airports Authority Dulles Toll Road (Dulles Metrorail and Capital Improvement Project), Series 2009D, RB, 7.46%, 10/01/46			30		43,092
Miami-Dade County Educational Facilities Authority (University of Miami Issue);
Series 2018A, RB, 5.00%, 04/01/48			20		22,251
Series 2015B, RB, 5.07%, 04/01/50			30		33,765
Series 2018A, RB, 5.00%, 04/01/53			40		44,104
Michigan Finance Authority (Henry Ford Health System);
Series 2016, RB, 5.00%, 11/15/41			20		21,547
Series 2017A-MI, RB, 5.00%, 12/01/47			80		85,404
Michigan State Housing Development Authority;
Series 2018B, RB, 3.55%, 10/01/33			10		10,014
Series 2018A, RB, 4.00%, 10/01/43			10		9,937
Series 2018A, RB, 4.05%, 10/01/48			10		9,931
Series 2018A, RB, 4.15%, 10/01/53			30		29,998
Mississippi Hospital Equipment & Facilities Authority (Baptist Memorial Health Corp.), Series 2016A, RB, 5.00%, 09/01/46			30		31,921
Municipal Electric Authority of Georgia (Plant Vogtle Units 3&4 Units Project), Series 2010A, RB, 6.64%, 04/01/57			45		47,576

44 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Municipal Bonds (continued)
New Hope Cultural Education Facilities Finance Corp. (Children’s Health System of Texas Project), Series 2017A, RB, 5.00%, 08/15/47	USD		20	$	22,246
New Jersey Transportation Trust Fund Authority, Series 2016A, Sub-Series A-1, RB, 5.00%, 06/15/29			20		22,201
New Jersey Turnpike Authority, Series 2009F, RB, 7.41%, 01/01/40			66		92,994
New Orleans Aviation Board (North Terminal Project), Series 2015B, RB, 5.00%, 01/01/40			20		21,498
New York City Housing Development Corp.;
Series 2018C-1-A, RB, 3.70%, 11/01/38			10		9,944
Series 2018C-1-B, RB, 3.85%, 11/01/43			40		39,935
Series 2018C-1-A, RB, 4.00%, 11/01/53			40		39,775
New York City Transitional Finance Authority Building Aid, Series 2015S-2, RB, 5.00%, 07/15/40			20		22,194
New York City Transitional Finance Authority Future Tax Secured;
Series 2018, Sub-Series C-4, RB, 3.55%, 05/01/25			65		65,691
Series 2017F, Sub-Series F-2, RB, 3.05%, 05/01/27			70		67,355
Series 2017B, RB, 5.00%, 08/01/31			10		11,544
Series 2016E, Sub-Series E-1, RB, 5.00%, 02/01/35			20		22,629
Series 2017A, Sub-Series A-1, RB, 5.00%, 05/01/36			20		22,627
New York City Water & Sewer System;
Series 2018FF, RB, 5.00%, 06/15/39			50		57,509
Series 2018FF, RB, 5.00%, 06/15/40			30		34,400
Series 2010AA, RB, 5.75%, 06/15/41			35		43,771
Series 2011EE, RB, 5.38%, 06/15/43			215		228,085
Series 2011AA, RB, 5.44%, 06/15/43			25		30,298
Series 2011EE, RB, 5.50%, 06/15/43			255		271,679
Series 2011CC, RB, 5.88%, 06/15/44			50		64,113
Series 2017DD, RB, 5.00%, 06/15/47			65		72,961
New York Convention Center Development Corp.;
Series 2015, RB, 5.00%, 11/15/40			20		22,294
Series 2016A, RB, 5.00%, 11/15/46			40		44,794
New York State Dormitory Authority;
Series 2016A, RB, 5.00%, 02/15/31			10		11,581
Series 2015B, RB, 5.00%, 03/15/32			30		34,281
Series 2017B, RB, 5.00%, 02/15/36			30		34,476
Series 2017B, RB, 5.00%, 02/15/37			20		22,902
Series 2017B, RB, 5.00%, 02/15/38			20		22,821
Series 2018B, RB, 5.00%, 10/01/38			40		46,873
Series 2017B, RB, 5.00%, 02/15/39			20		22,756
Series 2018A, RB, 5.00%, 03/15/39			40		45,903
Series 2017B, RB, 5.00%, 02/15/40			30		34,086
Series 2010H, RB, 5.39%, 03/15/40			50		58,568
Series 2017B, RB, 5.00%, 02/15/41			30		34,013
Series 2018A, RB, 5.00%, 03/15/41			20		22,848
Series 2017B, RB, 5.00%, 02/15/42			40		45,319
Series 2018A, RB, 5.00%, 03/15/42			20		22,831
Series 2017B, RB, 5.00%, 02/15/43			20		22,643
Series 2017A, RB, 5.00%, 03/15/43			20		22,547
Series 2018A, RB, 5.00%, 03/15/43			20		22,814
Series 2018E, RB, 5.00%, 03/15/48			130		148,559
Series 2018A, RB, 5.00%, 10/01/48			10		13,159
New York State Urban Development Corp.;
Series 2017B, RB, 2.86%, 03/15/24			80		79,352
Series 2017B, RB, 3.12%, 03/15/25			40		39,672
Series 2017D, RB, 3.32%, 03/15/29			55		53,687
New York Transportation Development Corp. (LaGuardia Airport Terminal B Redevelopment Project);
Series 2016A, RB, 5.00%, 07/01/46			20		21,028
Series 2016A, RB, 5.25%, 01/01/50			130		138,142

Security		Par (000)		Value
Municipal Bonds (continued)
North Carolina Turnpike Authority, Series 2018, RB, 5.00%, 01/01/35	USD		20	$	22,893
Ohio Turnpike & Infrastructure Commission, Series 2013A, RB, 5.00%, 02/15/48			20		21,433
Omaha Public Power District, Series 2017A, RB, 5.00%, 02/01/42			30		34,132
Orange County Local Transportation Authority, Series 2010A, RB, 6.91%, 02/15/41			75		99,274
Oregon School Boards Association;
Series 2002B, GO, 5.49%, 06/30/23			65		72,399
Series 2005A, GO, 4.76%, 06/30/28			80		86,346
Pennsylvania Economic Development Financing Authority (Pennsylvania Rapid Bridge Replacement Project (The));
Series 2015, RB, 5.00%, 06/30/23			100		108,609
Series 2015, RB, 5.00%, 12/31/38			25		26,789
Pennsylvania State University;
Series 2018, RB, 5.00%, 09/01/43			20		23,025
Series 2018, RB, 5.00%, 09/01/48			20		22,935
Pennsylvania Turnpike Commission;
Series 2018B, RB, 5.00%, 12/01/43			40		44,421
Series 2016A-1, RB, 5.00%, 12/01/46			20		21,739
Series 2018A, RB, 5.00%, 12/01/48			150		168,435
Port Authority of New York & New Jersey;
Series 181, RB, 4.96%, 08/01/46			30		34,442
Series 180-1, RB, 5.00%, 11/15/47			10		11,094
Series 174, RB, 4.46%, 10/01/62			55		55,958
Series 192, RB, 4.81%, 10/15/65			15		16,288
Port of Seattle, Series 2018A, RB, 5.00%, 05/01/43			10		10,962
Public Power Generation Agency, Series 2016A, RB, 5.00%, 01/01/35			20		22,241
Royal Oak Hospital Finance Authority (William Beaumont Hospital Obligated Group), Series 2014D, RB, 5.00%, 09/01/39			20		21,600
Sacramento County Sanitation Districts Financing Authority, Series 2035B, RB, VRDN, 2.36%, 12/01/35(j)			20		19,425
Salt Lake City Corp.;
Series 2017A, RB, 5.00%, 07/01/47			35		38,532
Series 2017B, RB, 5.00%, 07/01/47			25		28,008
Salt River Project Agricultural Improvement & Power District;
Series 2017A, RB, 5.00%, 01/01/36			20		23,460
Series 2015A, RB, 5.00%, 12/01/45			90		99,926
San Antonio Water System, Series 2015B, RB, 5.00%, 05/15/39			60		66,943
San Diego County Regional Airport Authority, Series 2017A, RB, 5.00%, 07/01/47			20		22,532
San Diego Public Facilities Financing Authority, Series 2016A, RB, 5.00%, 05/15/39			25		28,673
San Diego Unified School District, Series 2017I, GO, 5.00%, 07/01/41			30		34,567
San Francisco City & County Airport Comm-San Francisco International Airport;
Series 2016B, RB, 5.00%, 05/01/46			40		43,874
Series 2017A, RB, 5.00%, 05/01/47			20		22,120
San Jose Redevelopment Agency Successor Agency, Series 2017A-T, 2.96%, 08/01/24			50		49,480
South Carolina Ports Authority, Series 2018, RB, 5.00%, 07/01/55			20		21,633
South Carolina Public Service Authority;
Series 2016D, RB, 2.39%, 12/01/23			51		48,395
Series 2014A, RB, 5.00%, 12/01/49			30		31,253
Series 2015A, RB, 5.00%, 12/01/50			30		31,421
State of Alabama, Series 2018A, GO, 5.00%, 11/01/38			30		35,129

SCHEDULES OF INVESTMENTS 45

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Municipal Bonds (continued)
State of California;
Series 2017, GO, 2.25%, 10/01/23	USD		90	$	87,602
Series 2009, GO, 7.50%, 04/01/34			60		81,764
Series 2018, GO, 4.60%, 04/01/38			265		273,308
Series 2009, GO, 7.55%, 04/01/39			30		42,977
Series 2009, GO, 7.30%, 10/01/39			40		54,909
Series 2009, GO, 7.35%, 11/01/39			220		303,708
State of Connecticut, Series 2017A, GO, 3.31%, 01/15/26			65		63,719
State of Illinois;
Series 2018A, GO, 5.00%, 05/01/20			20		20,534
Series 2017D, GO, 5.00%, 11/01/22			20		21,094
Series 2017D, GO, 5.00%, 11/01/24			60		64,020
Series 2017A, GO, 5.00%, 12/01/24			10		10,673
Series 2017D, GO, 5.00%, 11/01/25			160		171,046
Series 2003, GO, 5.10%, 06/01/33			175		166,850
State of Minnesota;
Series 2018A, GO, 5.00%, 08/01/31			10		12,089
Series 2018A, GO, 5.00%, 08/01/32			10		12,032
Series 2018A, GO, 5.00%, 08/01/33			10		11,986
Series 2018A, GO, 5.00%, 08/01/34			10		11,930
Series 2018A, GO, 5.00%, 08/01/35			20		23,766
State of Mississippi, Series 2018A, GO, 5.00%, 11/01/35			10		11,483
State of Ohio;
Series 2017A, GO, 5.00%, 03/15/32			40		44,826
Series 2017A, GO, 5.00%, 05/01/34			20		22,671
Series 2017A, GO, 5.00%, 05/01/35			20		22,621
Series 2017A, GO, 5.00%, 05/01/36			40		45,118
Series 2017A, GO, 5.00%, 05/01/37			30		33,746
State of Texas;
Series 2016, GO, 5.00%, 04/01/40			20		22,586
Series 2016, GO, 5.00%, 04/01/43			30		33,692
State of Washington;
Series R-2015C, GO, 5.00%, 07/01/30			60		68,159
Series R-2017A, GO, 5.00%, 08/01/30			20		23,342
Series 2016A-1, GO, 5.00%, 08/01/40			40		44,666
Series 2018B, GO, 5.00%, 08/01/40			20		22,794
Series 2017D, GO, 5.00%, 02/01/41			30		33,930
Series 2018B, GO, 5.00%, 08/01/41			20		22,762
Series 2018B, GO, 5.00%, 08/01/42			20		22,746
State of West Virginia;
Series 2018B, GO, 5.00%, 06/01/40			30		34,410
Series 2018B, GO, 5.00%, 12/01/40			30		34,410
Series 2018B, GO, 5.00%, 12/01/41			30		34,358
State of Wisconsin;
Series 2017C, RB, 3.15%, 05/01/27			50		49,298
Series 2017B, GO, 5.00%, 05/01/32			10		11,423
Series 2017B, GO, 5.00%, 05/01/33			10		11,398
Series 2017-3, GO, 5.00%, 11/01/33			20		23,426
Series 2017B, GO, 5.00%, 05/01/34			20		22,771
Series 2017B, GO, 5.00%, 05/01/36			20		22,671
Series 2017B, GO, 5.00%, 05/01/38			20		22,461
Tennessee Housing Development Agency (Residential Finance Program);
Series 2018-3, RB, 3.75%, 07/01/38			10		10,000
Series 2018-3, RB, 3.85%, 07/01/43			10		9,953
Series 2018-3, RB, 3.95%, 01/01/49			5		5,000
Texas A&M University;
Series 2017B, RB, 2.76%, 05/15/26			75		72,576
Series 2017B, RB, 2.84%, 05/15/27			30		28,862
Texas Municipal Gas Acquisition & Supply Corp., Series 2008D, RB, 6.25%, 12/15/26			10		11,426

Security		Par (000)		Value
Municipal Bonds (continued)
Texas Private Activity Bond Surface Transportation Corp. (Blueridge Transportation Group, LLC Share 288 Toll Lanes Project), Series 2016, RB, 5.00%, 12/31/55	USD		25	$	26,217
Texas Water Development Board;
Series 2018B, RB, 5.00%, 10/15/38			40		46,590
Series 2018A, RB, 5.00%, 10/15/43			30		34,332
Series 2017A, RB, 5.00%, 10/15/47			10		11,352
Series 2018B, RB, 5.00%, 04/15/49			240		275,162
Tobacco Settlement Finance Authority, Series 2007A, RB, 7.47%, 06/01/47			55		53,885
TSASC, Inc., Series 2017A, RB, 5.00%, 06/01/41			20		20,636
University of California;
Series 2017AX, RB, 3.06%, 07/01/25			25		24,673
Series 2013AJ, RB, 4.60%, 05/15/31			30		32,210
Series 2012AD, RB, 4.86%, 05/15/2112			50		52,486
University of California Medical Centre;
Series 2016L, RB, 5.00%, 05/15/47			20		22,248
Series 2009F, RB, 6.58%, 05/15/49			75		99,203
University of Houston;
Series 2017A, RB, 5.00%, 02/15/33			20		22,793
Series 2017A, RB, 5.00%, 02/15/34			20		22,710
Series 2017A, RB, 5.00%, 02/15/35			40		45,255
Series 2017A, RB, 5.00%, 02/15/36			50		56,364
University of Oregon, Series 2016A, RB, 5.00%, 04/01/46			20		22,379
University of Texas, Series 2017A, RB, 3.38%, 07/01/47			25		22,645
Upper Arlington City School District, Series 2018A, GO, 5.00%, 12/01/48			30		34,132
Virginia Small Business Financing Authority (Transform 66 P3 Project);
Series 2017, RB, 5.00%, 12/31/52			30		31,942
Series 2017, RB, 5.00%, 12/31/56			30		31,831
Washington Metropolitan Area Transit Authority, Series 2017B, RB, 5.00%, 07/01/36			10		11,506
Washington State Convention Center Public Facilities District, Series 2018, RB, 5.00%, 07/01/58			90		99,523
Weld County School District No. 4, Series 2016, GO, 5.25%, 12/01/41			20		23,072
West Virginia Hospital Finance Authority (West Virginia United Health System Obligated Group);
Series 2016A, RB, 5.00%, 06/01/19			20		20,256
Series 2016A, RB, 5.00%, 06/01/20			20		20,793
Series 2016A, RB, 5.00%, 06/01/21			20		21,298
Series 2016A, RB, 5.00%, 06/01/22			20		21,789
Series 2016A, RB, 5.00%, 06/01/23			20		22,217
Series 2016A, RB, 5.00%, 06/01/24			20		22,591
Wisconsin Health & Educational Facilities Authority (Thedacare, Inc.), Series 2015, RB, 5.00%, 12/15/44			10		10,672
Total Municipal Bonds — 2.8% (Cost: $12,879,381)					12,874,478
Non-Agency Mortgage-Backed Securities — 2.2%
Collateralized Mortgage Obligations — 0.9%
Ajax Mortgage Loan Trust(e):
Series 2018-B, Class A, 3.75%, 02/26/57			177		170,712
Series 2018-D, Class A, 3.75%, 08/25/58(b)(c)			165		162,078
Alternative Loan Trust:
Series 2005-22T1, Class A1, 2.86%, 06/25/35(c)			67		59,398
Series 2005-72, Class A3, 3.11%, 01/25/36(c)			26		22,255
Series 2006-11CB, Class 3A1, 6.50%, 05/25/36			27		21,011
Series 2006-OA21, Class A1, 2.66%, 03/20/47(c)			1,000		838,390
Series 2006-OA9, Class 2A1B, 2.67%, 07/20/46(c)			145		109,851

46 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Collateralized Mortgage Obligations (continued)
Series 2006-OC10, Class 2A3, 2.74%, 11/25/36(c)	USD		25	$	19,016
Series 2007-OA3, Class 1A1, 2.65%, 04/25/47(c)			41		38,629
Series 2007-OA3, Class 2A2, 2.69%, 04/25/47(c)			61		9,510
Series 2007-OA8, Class 2A1, 2.69%, 06/25/47(c)			28		21,448
Series 2007-OH2, Class A2A, 2.75%, 08/25/47(c)			15		11,512
American Home Mortgage Assets Trust, Series 2006-3, Class 2A11, 3.10%, 10/25/46(c)			71		61,736
APS Resecuritization Trust(b)(c):
Series 2016-1, Class 1MZ, 4.71%, 07/31/57			118		35,555
Series 2016-3, Class 3A, 5.36%, 09/27/46(e)			116		115,944
Series 2016-3, Class 4A, 5.11%, 04/27/47(e)			54		52,283
Banc of America Funding Trust, Series 2016-R2, Class 1A1, 4.70%, 05/01/33(b)(c)(e)			163		167,095
Bear Stearns Mortgage Funding Trust, Series 2006-SL1, Class A1, 2.79%, 08/25/36(c)			58		57,477
Chase Mortgage Finance Trust, Series 2007-S6, Class 1A1, 6.00%, 12/25/37			407		300,594
CHL Mortgage Pass-Through Trust:
Series 2006-OA4, Class A1, 3.12%, 04/25/46(c)			67		33,775
Series 2007-15, Class 2A2, 6.50%, 09/25/37			107		79,024
Citicorp Mortgage Securities Trust, Series 2008-2, Class 1A1, 6.50%, 06/25/38			46		38,496
Credit Suisse Mortgage Capital Certificates, Series 2009-12R, Class 3A1, 6.50%, 10/27/37(b)			109		62,528
CSFB Mortgage-Backed Pass-Through Certificates, Series 2005-10, Class 10A1, 3.86%, 11/25/35(c)			21		7,454
CSMC Mortgage-Backed Trust, Series 2007-5, Class 1A11, 7.00%, 08/25/37(c)			30		24,825
CSMC Trust, Series 2009-5R, Class 4A4, 3.80%, 06/25/36(b)(c)			29		26,299
Deutsche Alt-A Securities Mortgage Loan Trust, Series 2007-OA4, Class A2A, 2.68%, 08/25/47(c)			163		111,153
Deutsche Alt-A Securities, Inc., Series 2007-RS1, Class A2, 2.82%, 01/27/37(b)(c)(e)			6		6,229
GreenPoint Mortgage Funding Trust, Series 2006-AR2, Class 4A1, 4.16%, 03/25/36(c)			10		9,545
IndyMac INDX Mortgage Loan Trust, Series 2007-AR19, Class 3A1, 3.74%, 09/25/37(c)			39		26,864
JPMorgan Alternative Loan Trust, Series 2007-A1, Class 1A4, 2.72%, 03/25/37(c)			58		53,302
JPMorgan Mortgage Trust, Series 2017-3, Class 1A6, 3.00%, 08/25/47(b)(c)			303		293,237
LSTAR Securities Investment Ltd., Series 2018-1, Class A, 3.89%, 02/01/23(b)(c)			98		98,483
MCM Capital Partners I LP, 4.00%, 06/01/57(e)			484		475,769
MCM Trust, Series 2018-NPL2, Class A, 4.00%, 10/25/28(b)(e)			200		197,400
Nomura Asset Acceptance Corp. Alternative Loan Trust, Series 2007-2, Class A4, 2.93%, 06/25/37(c)			8		6,780
Seasoned Credit Risk Transfer Trust, Series 2017-3, Class M2, 4.75%, 07/25/56(c)			30		28,951
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-3, Class 4A, 3.79%, 04/25/36(c)			16		12,848
Structured Asset Mortgage Investments II Trust, Series 2006-AR4, Class 3A1, 2.70%, 06/25/36(c)(e)			21		17,802
Washington Mutual Mortgage Pass-Through Certificates Trust:
Series 2006-4, Class 1A1, 6.00%, 04/25/36			87		77,729
Series 2006-4, Class 3A5, 6.35%, 05/25/36(d)			82		69,738
					4,032,725
Commercial Mortgage-Backed Securities — 1.2%
280 Park Avenue Mortgage Trust, Series 2017-280P, Class E, 4.57%, 09/15/34(b)(c)			100		97,987

Security		Par (000)		Value
Commercial Mortgage-Backed Securities (continued)
BAMLL Commercial Mortgage Securities Trust, Series 2018-DSNY, Class D, 4.16%, 09/15/34(b)(c)	USD		100	$	99,741
Banc of America Commercial Mortgage Trust, Series 2007-1, Class AMFX, 5.48%, 01/15/49(c)			7		6,787
BANK, Series 2018-BN13, Class A5, 4.22%, 08/15/61			20		20,705
Bayview Commercial Asset Trust(b)(c):
Series 2005-4A, Class A1, 2.81%, 01/25/36			29		27,813
Series 2005-4A, Class M1, 2.96%, 01/25/36			22		20,975
Series 2006-1A, Class A2, 2.87%, 04/25/36			14		13,361
Series 2006-3A, Class A1, 2.76%, 10/25/36			21		20,140
Series 2006-3A, Class A2, 2.81%, 10/25/36			21		20,191
Series 2006-4A, Class A1, 2.74%, 12/25/36			252		242,722
BBCMS Mortgage Trust, Series 2018-TALL, Class A, 3.18%, 03/15/37(b)(c)			15		14,736
BBCMS Trust, Series 2015-SRCH, Class A1, 3.31%, 08/10/35(b)			100		98,253
Bear Stearns Commercial Mortgage Securities Trust, Series 2007-T26, Class AM, 5.46%, 01/12/45(c)			15		14,685
Benchmark Mortgage Trust:
Series 2018-B5, Class A4, 4.21%, 07/15/51			20		20,772
Series 2018-B7, Class A4, 4.51%, 11/15/51			39		41,475
BHMS, Series 2018-ATLS, Class A, 3.71%, 07/15/35(b)(c)			100		99,506
BWAY Mortgage Trust, Series 2013-1515, Class C, 3.45%, 03/10/33(b)			100		97,571
BX Commercial Mortgage Trust, Series 2018-IND, Class H, 5.46%, 11/15/35(b)(c)			220		217,339
BXP Trust(b)(c):
Series 2017-CC, Class D, 3.55%, 08/13/37			25		23,314
Series 2017-CC, Class E, 3.55%, 08/13/37			40		35,857
CCRESG Commercial Mortgage Trust, Series 2016-HEAT, Class D, 5.49%, 04/10/29(b)(c)			10		10,217
CCUBS Commercial Mortgage Trust, Series 2017-C1, Class A4, 3.54%, 11/15/50			12		11,883
CD Mortgage Trust:
Series 2006-CD3, Class AM, 5.65%, 10/15/48			185		190,086
Series 2017-CD3, Class A4, 3.63%, 02/10/50			10		10,014
CFCRE Commercial Mortgage Trust, Series 2016-C3, Class A3, 3.87%, 01/10/48			10		10,125
CGDBB Commercial Mortgage Trust(b)(c):
Series 2017-BIOC, Class A, 3.25%, 07/15/32			100		99,065
Series 2017-BIOC, Class D, 4.06%, 07/15/32			100		98,379
Series 2017-BIOC, Class E, 4.61%, 07/15/32			100		98,431
Citigroup Commercial Mortgage Trust, Series 2016-C1, Class C, 4.95%, 05/10/49(c)			30		30,205
CLNS Trust, Series 2017-IKPR, Class E, 5.90%, 06/11/32(b)(c)			50		49,604
Commercial Mortgage Trust:
Series 2014-CR16, Class A4, 4.05%, 04/10/47			87		89,774
Series 2014-CR17, Class A5, 3.98%, 05/10/47			43		44,257
Series 2014-CR18, Class A4, 3.55%, 07/15/47			10		10,062
Series 2014-CR19, Class A5, 3.80%, 08/10/47			30		30,595
Series 2014-LC15, Class A4, 4.01%, 04/10/47			20		20,596
Series 2014-PAT, Class A, 3.19%, 08/13/27(b)(c)			100		99,913
Series 2014-TWC, Class B, 3.99%, 02/13/32(b)(c)			100		99,556
Series 2014-UBS4, Class C, 4.62%, 08/10/47(c)			20		19,831
Series 2015-CR23, Class C, 4.25%, 05/10/48(c)			10		9,751
Series 2015-CR23, Class CMD, 3.68%, 05/10/48(b)(c)			110		108,663
Series 2015-CR25, Class A4, 3.76%, 08/10/48			40		40,550
Series 2015-CR25, Class C, 4.54%, 08/10/48(c)			60		58,614
Series 2015-LC19, Class A4, 3.18%, 02/10/48			23		22,684
Series 2017-COR2, Class D, 3.00%, 09/10/50(b)			100		79,271
Core Industrial Trust, Series 2015-TEXW, Class F, 3.85%, 02/10/34(b)(c)			100		97,205

SCHEDULES OF INVESTMENTS 47

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Commercial Mortgage-Backed Securities (continued)
CSMC Trust(b):
Series 2015-GLPB, Class A, 3.64%, 11/15/34	USD		100	$	101,882
Series 2018-RPL8, Class A1, 4.07%, 07/25/58			161		160,567
DBUBS Mortgage Trust(b):
Series 2017-BRBK, Class A, 3.45%, 10/10/34			40		39,725
Series 2017-BRBK, Class E, 3.53%, 10/10/34(c)			170		159,862
Series 2017-BRBK, Class F, 3.53%, 10/10/34(c)(e)			40		35,505
GPMT Ltd., Series 2018-FL1, Class A, 3.38%, 11/21/35(b)(c)			100		99,115
GS Mortgage Securities Corp. II, Series 2013-KING, Class E, 3.44%, 12/10/27(b)(c)			350		346,171
GS Mortgage Securities Corp. Trust(b)(c):
Series 2017-500K, Class D, 3.76%, 07/15/32			10		9,890
Series 2017-500K, Class E, 3.96%, 07/15/32			20		19,689
Series 2017-500K, Class F, 4.26%, 07/15/32			10		9,846
GS Mortgage Securities Trust:
Series 2014-GC24, Class A5, 3.93%, 09/10/47			20		20,495
Series 2017-GS7, Class D, 3.00%, 08/10/50(b)			10		8,372
HMH Trust, Series 2017-NSS, Class A, 3.06%, 07/05/31(b)			100		97,947
IMT Trust, Series 2017-APTS, Class AFX, 3.48%, 06/15/34(b)			100		100,529
JPMBB Commercial Mortgage Securities Trust:
Series 2014-C21, Class A5, 3.77%, 08/15/47			30		30,463
Series 2014-C22, Class A4, 3.80%, 09/15/47			10		10,165
JPMorgan Chase Commercial Mortgage Securities Trust(b):
Series 2015-UES, Class D, 3.62%, 09/05/32(c)			110		108,840
Series 2016-NINE, Class A, 2.85%, 10/06/38(c)			100		94,994
Series 2018-WPT, Class FFX, 5.54%, 07/05/33			10		9,773
Lehman Brothers Small Balance Commercial Mortgage Trust, Series 2007-1A, Class 1A, 2.76%, 03/25/37(b)(c)			23		22,171
MAD Mortgage Trust, Series 2017-330M, Class E, 4.03%, 08/15/34(b)(c)			100		96,141
Madison Avenue Trust, Series 2013-650M, Class D, 4.03%, 10/12/32(b)(c)			120		120,290
Morgan Stanley Bank of America Merrill Lynch Trust:
Series 2014-C16, Class A5, 3.89%, 06/15/47			70		71,550
Series 2015-C26, Class D, 3.06%, 10/15/48(b)			26		22,096
Morgan Stanley Capital I, Series 2017-HR2, Class D, 2.73%, 12/15/50			10		7,628
Morgan Stanley Capital I Trust:
Series 2006-IQ11, Class C, 6.25%, 10/15/42(c)			100		103,019
Series 2006-T21, Class AJ, 5.24%, 10/12/52(c)			2		2,383
Series 2007-T27, Class AJ, 5.95%, 06/11/42(c)			40		42,167
Series 2017-CLS, Class F, 5.06%, 11/15/34(b)(c)			84		82,581
Series 2017-H1, Class A5, 3.53%, 06/15/50			68		66,840
Series 2018-H3, Class A5, 4.18%, 07/15/51			20		20,626
Resource Capital Corp. Ltd.(b)(c):
Series 2017-CRE5, Class A, 3.26%, 07/15/34			16		15,663
Series 2017-CRE5, Class B, 4.46%, 07/15/34			19		18,870
Waldorf Astoria Boca Raton Trust, Series 2016-BOCA, Class A, 3.81%, 06/15/29(b)(c)			100		99,805
Wells Fargo Commercial Mortgage Trust:
Series 2015-C27, Class C, 3.89%, 02/15/48			27		25,530
Series 2015-C31, Class A4, 3.70%, 11/15/48			30		30,267
Series 2015-P2, Class A4, 3.81%, 12/15/48			30		30,638
Series 2017-C38, Class A5, 3.45%, 07/15/50			20		19,613
Series 2017-C41, Class D, 2.60%, 11/15/50(b)(c)			25		19,968
Series 2017-HSDB, Class A, 3.28%, 12/13/31(b)(c)			100		99,526
WFRBS Commercial Mortgage Trust:
Series 2014-C21, Class A5, 3.68%, 08/15/47			30		30,444
Series 2014-C22, Class C, 3.76%, 09/15/57(c)			120		113,700
					5,298,607

Security		Par (000)		Value
Interest Only Collateralized Mortgage Obligations — 0.0%
Banc of America Funding Trust, Series 2014-R2, Class 1C, 0.00%, 11/26/36(b)(c)	USD		64	$	12,778
Interest Only Commercial Mortgage-Backed Securities — 0.1%(c)
Banc of America Commercial Mortgage Trust, Series 2017-BNK3, Class XB, 0.63%, 02/15/50			1,000		43,430
BBCMS Trust, Series 2015-SRCH, Class XA, 0.96%, 08/10/35(b)			1,000		63,680
BB-UBS Trust, Series 2012-SHOW, Class XA, 0.60%, 11/05/36(b)			4,250		140,952
CFCRE Commercial Mortgage Trust:
Series 2016-C4, Class XA, 1.73%, 05/10/58			125		11,763
Series 2016-C4, Class XB, 0.73%, 05/10/58(e)			120		5,820
Commercial Mortgage Trust, Series 2015-3BP, Class XA, 0.06%, 02/10/35(b)			2,522		13,947
Core Industrial Trust, Series 2015-TEXW, Class XA, 0.77%, 02/10/34(b)			992		20,274
JPMDB Commercial Mortgage Securities Trust, Series 2016-C4, Class XC, 0.75%, 12/15/49(b)			1,800		88,135
LSTAR Commercial Mortgage Trust, Series 2017-5, Class X, 1.11%, 03/10/50(b)			890		41,896
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2014-C19, Class XF, 1.19%, 12/15/47(b)			100		5,351
Morgan Stanley Capital I Trust, Series 2018-H4, Class XA, 0.87%, 12/15/51			210		13,806
One Market Plaza Trust(b):
Series 2017-1MKT, Class XCP, 0.09%, 02/10/32			1,000		4,370
Series 2017-1MKT, Class XNCP, 0.00%, 02/10/32(e)			200		2
					453,426
Principal Only Collateralized Mortgage Obligations — 0.0%
Seasoned Credit Risk Transfer Trust, Series 2017-3, Class B, 0.00%, 07/25/56(m)			40		2,763
Total Non-Agency Mortgage-Backed Securities — 2.2% (Cost: $9,733,813)					9,800,299
		Beneficial Interest (000)
Other Interests — 0.0%(e)(g)(l)(n)
Capital Markets — 0.0%
Lehman Brothers Holdings, Inc.			620		—
Total Other Interests — 0.0%					—
		Par (000)
Preferred Securities — 0.1%
Capital Markets — 0.1%(h)(o)
Bank of New York Mellon Corp. (The), Series F, 4.62%			92		82,455
State Street Corp., Series H, 5.63%			140		132,300
					214,755
Consumer Finance — 0.0%
General Motors Financial Co., Inc., Series A, 5.75%(h)(o)			15		11,962
Entertainment — 0.0%
NBCUniversal Enterprise, Inc., 5.25%(b)(h)			80		81,000
Total Preferred Securities — 0.1% (Cost: $327,000)					307,717

48 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
U.S. Government Sponsored Agency Securities — 18.3%
Collateralized Mortgage Obligations — 0.1%
Federal National Mortgage Association Variable Rate Notes(a):
Series 2017-C05, Class 1B1, (LIBOR USD 1 Month + 3.60%), 6.11%, 01/25/30	USD		131	$	130,103
Series 2017-C07, Class 1B1, (LIBOR USD 1 Month + 4.00%), 6.51%, 05/25/30			50		50,136
					180,239
Commercial Mortgage-Backed Securities — 0.1%
Federal Home Loan Mortgage Corp.:
Series K058, Class A2, 2.65%, 08/25/26			22		21,175
Series K064, Class A2, 3.22%, 03/25/27			27		26,938
Series K072, Class A2, 3.44%, 12/25/27			10		10,086
Series 2018-SB52, Class A10F, 3.48%, 06/25/28(o)			30		29,951
Federal Home Loan Mortgage Corp. Variable Rate Notes(o):
Series K059, Class A2, 3.12%, 09/25/26			50		49,648
Series K061, Class A2, 3.35%, 11/25/26			20		20,132
Series K034, Class A2, 3.53%, 07/25/23			20		20,468
Series K085, Class A2, 4.06%, 10/25/28			100		105,313
Federal National Mortgage Association ACES Variable Rate Notes(o):
Series 2017-M7, Class A2, 2.96%, 02/25/27			81		78,806
Series 2018-M1, Class A2, 2.99%, 12/25/27			23		22,496
Series 2017-M8, Class A2, 3.06%, 05/25/27			14		13,707
Government National Mortgage Association:
Series 2016-158, Class VA, 2.00%, 03/16/35(e)			91		81,630
Series 2015-97, Class VA, 2.25%, 12/16/38			17		15,731
					496,081
Interest Only Commercial Mortgage-Backed Securities — 0.0%
Federal Home Loan Mortgage Corp. Variable Rate Notes(o):
Series K718, Class X1, 0.62%, 01/25/22			185		2,957
Series KW03, Class X1, 0.85%, 06/25/27			114		6,141
Government National Mortgage Association:
Series 2014-52, Class AI, 0.83%, 08/16/41			148		3,096
Series 2014-40, Class AI, 1.00%, 02/16/39			109		1,373
Government National Mortgage Association Variable Rate Notes:
Series 2013-63, 0.79%, 09/16/51(o)			853		44,849
Series 2017-100, 0.81%, 05/16/59(o)			127		8,608
Series 2016-26, 0.96%, 02/16/58(o)			230		15,867
Series 2016-34, 0.99%, 01/16/58(o)			137		10,500
Series 2016-87, 1.00%, 08/16/58(o)			183		13,734
Series 2016-110, 1.03%, 05/16/58(o)			116		8,599
Series 2016-113, (LIBOR USD 1 Month + 0.00%), 1.19%, 02/16/58(a)			114		10,322
					126,046
Mortgage-Backed Securities — 18.1%
Federal Home Loan Mortgage Corp.:
2.50%, 01/01/29 - 04/01/31			437		428,204
2.50%, 01/15/34(p)			507		494,860
3.00%, 09/01/27 - 12/01/46			1,474		1,453,555
3.00%, 01/15/34 - 01/15/49(p)			2,507		2,455,051
3.50%, 04/01/31 - 01/01/48			3,124		3,146,408
3.50%, 01/15/34 - 01/15/49(p)			979		978,926
4.00%, 01/15/34 - 01/15/49(p)			2,059		2,099,491
4.00%, 08/01/40 - 08/01/47			1,105		1,134,800
4.50%, 02/01/39 - 08/01/48			1,084		1,134,277
4.50%, 01/15/49(p)			199		205,983
5.00%, 10/01/41 - 11/01/41			274		290,171
5.00%, 01/15/49(p)			63		65,976
5.50%, 06/01/41			108		116,087
6.00%, 01/01/34			58		61,919

Security		Par (000)		Value
Mortgage-Backed Securities (continued)
Federal National Mortgage Association:
2.00%, 10/01/31 - 03/01/32	USD		250	$	239,202
2.50%, 09/01/27 - 02/01/33			1,256		1,229,009
2.50%, 01/25/34(p)			129		125,881
3.00%, 04/01/29 - 03/01/47			4,693		4,634,736
3.00%, 01/25/34 - 01/25/49(p)			2,355		2,311,134
3.50%, 04/01/29 - 01/01/48			6,085		6,126,259
3.50%, 01/25/49(p)			1,753		1,753,022
4.00%, 09/01/25 - 08/01/48			8,167		8,394,355
4.00%, 01/25/49(p)			1,235		1,258,928
4.50%, 02/01/25 - 07/01/48			2,323		2,429,993
4.50%, 01/25/49 - 02/25/49(p)			8,710		9,014,884
5.00%, 09/01/35 - 06/01/45			336		354,549
5.00%, 01/25/49(p)			4,364		4,570,949
5.50%, 02/01/35 - 04/01/41			672		720,709
6.00%, 12/01/27 - 06/01/41			393		428,708
6.50%, 05/01/40			112		126,590
Government National Mortgage Association:
3.00%, 02/15/45 - 12/20/46			2,497		2,464,487
3.00%, 01/15/49(p)			674		663,719
3.50%, 01/15/42 - 10/20/46			6,716		6,769,055
3.50%, 01/15/49(p)			1,510		1,519,320
4.00%, 04/20/39 - 03/15/41			374		385,900
4.00%, 01/15/49(p)			7,713		7,897,389
4.50%, 12/20/39 - 09/20/48			569		593,950
4.50%, 01/15/49(p)			3,025		3,130,107
5.00%, 12/15/38 - 07/20/42			176		186,098
5.00%, 01/15/49(p)			403		419,419
5.50%, 01/15/49(p)			295		312,942
7.50%, 03/15/32			3		3,324
					82,130,326
Total U.S. Government Sponsored Agency Securities — 18.3% (Cost: $82,954,513)					82,932,692
U.S. Treasury Obligations — 4.9%
U.S. Treasury Bonds:
4.25%, 05/15/39			112		135,113
4.50%, 08/15/39			109		135,833
4.38%, 11/15/39			109		133,636
3.13%, 02/15/43			425		433,517
2.88%, 05/15/43 - 11/15/46			549		535,483
3.63%, 08/15/43			406		449,407
3.75%, 11/15/43(q)			431		486,777
3.00%, 02/15/47			77		76,783
3.00%, 08/15/48(q)			1,669		1,661,111
3.38%, 11/15/48			20		21,388
U.S. Treasury Notes:
1.25%, 08/31/19			1,090		1,080,164
1.00%, 10/15/19			1,090		1,076,247
1.63%, 06/30/20 - 10/31/23			1,821		1,783,690
2.63%, 08/31/20 - 12/31/23			1,765		1,769,151
2.63%, 05/15/21(q)			1,278		1,282,094
1.13%, 06/30/21			658		636,846
2.25%, 07/31/21 - 02/15/27			2,076		2,045,162
2.13%, 09/30/21			253		250,599
1.88%, 04/30/22			763		748,396
2.75%, 08/31/23 - 08/31/25			1,875		1,895,269
2.00%, 04/30/24 - 11/15/26			2,031		1,965,788
3.00%, 10/31/25			3,570		3,662,457
Total U.S. Treasury Obligations — 4.9% (Cost: $22,208,625)					22,264,911
Total Long-Term Investments — 106.5% (Cost: $499,755,381)					482,305,823

SCHEDULES OF INVESTMENTS 49

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Short-Term Securities — 4.7%
Borrowed Bond Agreements — 0.9%(r)
BNP Paribas SA, 2.85%, 01/02/19 (Purchased on 12/31/18 to be repurchased at USD 141,936, collateralized by U.S. Treasury Notes, 2.75%, due at 09/15/21, par and fair value of USD 140,000 and $140,974, respectively)	USD		142	$	141,925
BNP Paribas SA, 2.85%, 01/02/19 (Purchased on 12/31/18 to be repurchased at USD 173,201, collateralized by U.S. Treasury Notes, 2.88%, due at 10/31/23, par and fair value of USD 170,000 and $172,829, respectively)			173		173,187
Deutsche Bank Securities, Inc., 2.75%, 01/02/19 (Purchased on 12/31/18 to be repurchased at USD 2,137,188, collateralized by U.S. Treasury Notes, 2.88%, due at 08/15/28, par and fair value of USD 2,090,000 and $2,122,329, respectively)			2,137		2,137,025
Deutsche Bank Securities, Inc., 2.75%, 01/02/19 (Purchased on 12/31/18 to be repurchased at USD 294,010, collateralized by U.S. Treasury Notes, 2.88%, due at 11/15/21, par and fair value of USD 290,000 and $293,229, respectively)			294		293,988
Merrill Lynch, Pierce, Fenner & Smith Inc., 2.50%, 01/02/19 (Purchased on 12/31/18 to be repurchased at USD 591,416, collateralized by U.S. Treasury Notes, 3.13%, due at 11/15/28, par and fair value of USD 570,000 and $591,241, respectively)			591		591,375
Merrill Lynch, Pierce, Fenner & Smith Inc., 2.95%, 01/02/19 (Purchased on 12/31/18 to be repurchased at USD 71,318, collateralized by U.S. Treasury Bonds, 3.13%, due at 05/15/48, par and fair value of USD 70,000 and $71,329, respectively)			71		71,313
Merrill Lynch, Pierce, Fenner & Smith Inc., 2.98%, 01/02/19 (Purchased on 12/31/18 to be repurchased at USD 503,704, collateralized by U.S. Treasury Notes, 2.88%, due at 11/30/23, par and fair value of USD 495,000 and $503,624, respectively)			504		503,662
Total Borrowed Bond Agreements — 0.9% (Cost: $3,912,475)					3,912,475
Commercial Paper — 0.0%
General Motors Financial Co., Inc., 3.69%, 03/27/19(s)			250		248,104
Total Commercial Paper — 0.0% (Cost: $247,846)					248,104
Foreign Government Obligations — 1.3%
Egypt — 0.0%
Arab Republic of Egypt Treasury Bills(s):
18.65%, 03/05/19	EGP		1,100		59,543
19.90%, 08/27/19			500		24,737
					84,280
Japan — 1.3%
Government of Japan Treasury Bills, (0.29)%, 01/21/19(s)	JPY		614,950		5,610,983
Nigeria — 0.0%
Federal Republic of Nigeria Treasury Bills, 14.66%, 04/04/19(s)	NGN		5,998		16,060
Total Foreign Government Obligations — 1.3% (Cost: $5,585,547)					5,711,323

Security			Shares		Value
Money Market Funds — 2.5%(t)
BlackRock Liquidity Funds, T-Fund, Institutional Class, 2.32%(v)				5,808,467	$	5,808,467
JPMorgan US Treasury Plus Money Market Fund, Agency Class, 2.24%				33,063		33,063
SL Liquidity Series, LLC, Money Market Series, 2.57%(u)(v)				5,719,066		5,718,493
Total Money Market Funds — 2.5% (Cost: $11,560,284)						11,560,023
Total Short-Term Securities — 4.7% (Cost: $21,306,152)						21,431,925
Total Options Purchased — 0.0% (Cost: $301,878)						322,300
Total Investments Before Options Written, Borrowed Bonds and TBA Sale Commitments — 111.2% (Cost: $521,363,411)						504,060,048
Total Options Written — 0.0% (Premium Received — $98,198)						(125,793	)
	Par (000)
Borrowed Bonds — (0.8)%
U.S. Treasury Obligations — (0.8)%
U.S. Treasury Bonds, 3.13%, 05/15/48		USD		70		(71,329	)
U.S. Treasury Notes:
2.75%, 09/15/21				140		(140,974	)
2.88%, 11/15/21 - 08/15/28				3,045		(3,092,011	)
3.13%, 11/15/28				570		(591,241	)
Total Borrowed Bonds — (0.8)% (Proceeds: $3,811,640)						(3,895,555	)
TBA Sale Commitments — (5.9)%(p)
Mortgage-Backed Securities — (5.9)%
Federal Home Loan Mortgage Corp.:
3.50%, 01/15/49				4		(4,152	)
4.50%, 01/15/49				108		(111,790	)
Federal National Mortgage Association:
2.00%, 01/25/34				274		(262,232	)
3.00%, 01/25/49				375		(365,514	)
3.50%, 01/25/34 - 02/25/49				7,364		(7,361,540	)
4.00%, 01/25/34 - 01/25/49				5,000		(5,098,938	)
4.50%, 01/25/49				5,600		(5,798,734	)
5.50%, 01/25/49				615		(650,747	)
6.00%, 01/25/49				280		(300,697	)
Government National Mortgage Association:
3.00%, 01/15/49				315		(309,702	)
3.50%, 01/15/49 - 02/15/49				3,104		(3,122,374	)
4.00%, 01/15/49				2,638		(2,701,065	)
4.50%, 01/15/49				500		(517,373	)
Total TBA Sale Commitments — (5.9)% (Proceeds: $26,353,784)						(26,604,858	)
Total Investments Net of Options Written, Borrowed Bonds and TBA Sale Commitments — 104.5% (Cost: $491,099,789)						473,433,842
Liabilities in Excess of Other Assets — (4.5)%						(20,404,199	)
Net Assets — 100.0%					$	453,029,643

50 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio

^(a)  Variable rate security. Security may be issued at a fixed coupon rate, which converts to a variable rate at a specified date. Rate shown is the rate in effect as of period end.

^(b)  Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

^(c)  Variable or floating rate security, which interest rate adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. Rate shown is the rate in effect as of period end.

^(d)  Step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate as of period end.

^(e)  Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy.

^(f)  Security, or a portion of the security, is on loan.

^(g)  Non-income producing security.

^(h)  Perpetual security with no stated maturity date.

⁽ⁱ⁾  Payment-in-kind security which may pay interest/dividends in additional par/shares and/or in cash. Rates shown are the current rate and possible payment rates.

^(j)  Variable rate security. Rate as of period end and maturity is the date the principal owed can be recovered through demand.

^(k)  When-issued security.

^(l)  Issuer filed for bankruptcy and/or is in default.

^(m)  Zero-coupon bond.

⁽ⁿ⁾  Other interests represent beneficial interests in liquidation trusts and other reorganizational or private entities.

^(o)  Variable rate security. Rate shown is the rate in effect as of period end.

^(p)  Represents or includes a TBA transaction.

^(q)  All or a portion of the security has been pledged in connection with outstanding futures contracts.

^(r)  Certain agreements have no stated maturity and can be terminated by either party at any time.

^(s)  Rates are discount rates or a range of discount rates as of period end.

^(t)  Annualized 7-day yield as of period end.

^(u)  Security was purchased with the cash collateral from loaned securities.

^(v)  During the year ended December 31, 2018, investments in issuers considered to be affiliates of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, and/or related parties of the Fund were as follows:

Affiliate	Shares Held at 12/31/17		Shares Purchased		Shares Sold			Shares Held at 12/31/18		Value at 12/31/18		Income			Net Realized Gain (Loss)(a)			Change in Unrealized Appreciation (Depreciation)
BlackRock Liquidity Funds, T-Fund, Institutional Class		41,993,401		—		(36,184,934	)(b)		5,808,467	$	5,808,467	$	571,405		$	—		$	—
SL Liquidity Series, LLC, Money Market Series		6,750,211		—		(1,031,145	)(b)		5,719,066		5,718,493		10,878	(c)		994			(184	)
iShares Edge MSCI Multifactor USA ETF		297,982		—		(285,964	)		12,018		334,822		10,935			239,276			87,172
iShares iBoxx $ High Yield Corporate Bond ETF		18,780		30,100		(37,780	)		11,100		900,210		13,530			15,394			(22,111	)
iShares J.P. Morgan USD Emerging Markets Bond ETF		—		55,982		(50,649	)		5,333		554,152		68,676			(79,558	)		(54	)
										$	13,316,144	$	675,424		$	176,106		$	64,823

^(a)  Includes net capital gain distributions, if applicable.

^(b)  Represents net shares sold.

^(c)  Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

For Fund compliance purposes, the Fund’s industry classifications refer to one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

Description	Number of Contracts		Expiration Date		Notional Amount (000)		Value/ Unrealized Appreciation (Depreciation)
Long Contracts
TOPIX Index		44		03/07/19	$	5,996	$	(363,638	)
S&P 500 E-Mini Index		194		03/15/19		24,300		(763,493	)
U.S. Treasury 10 Year Note		133		03/20/19		16,228		231,331
U.S. Treasury 10 Year Ultra Bond		25		03/20/19		3,252		72,649
U.S. Treasury Ultra Bond		39		03/20/19		6,266		335,632
U.S. Treasury 2 Year Note		71		03/29/19		15,074		88,595
U.S. Treasury 5 Year Note		157		03/29/19		18,006		229,375
								(169,549	)
Short Contracts
Euro-Bund		17		03/07/19		3,185		(17,725	)
Euro-Buxl		2		03/07/19		414		(874	)
Japan 10 Year Bond		1		03/13/19		1,391		(6,587	)
U.S. Treasury Long Bond		7		03/20/19		1,022		179
3 Month Eurodollar		54		12/14/20		13,167		(54,758	)
								(79,765	)
							$	(249,314	)

SCHEDULES OF INVESTMENTS 51

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio

Forward Foreign Currency Exchange Contracts

Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
BRL	761,274	USD	196,000	Citibank NA		01/03/19	$	420
BRL	78,493	USD	20,225	Goldman Sachs International		01/03/19		27
TWD	1,851,780	USD	60,240	BNP Paribas SA		01/03/19		6
USD	140,329	BRL	542,035	Goldman Sachs International		01/03/19		477
USD	30,000	ZAR	426,738	BNP Paribas SA		01/10/19		362
USD	20,000	COP	64,210,000	Royal Bank of Scotland		01/11/19		236
ARS	389,500	USD	10,000	BNP Paribas SA		01/16/19		149
ARS	968,950	USD	25,000	Citibank NA		01/16/19		247
ARS	998,300	USD	25,000	Deutsche Bank AG		01/16/19		1,012
ARS	199,650	USD	5,000	Royal Bank of Scotland		01/16/19		202
MXN	405,967	USD	20,225	Goldman Sachs International		01/16/19		393
USD	50,000	CLP	34,388,220	BNP Paribas SA		01/16/19		436
USD	50,000	RUB	3,370,500	Bank of America NA		01/16/19		1,717
USD	140,000	ZAR	2,013,232	BNP Paribas SA		01/16/19		289
IDR	1,848,600,000	USD	120,000	Barclays Bank plc		01/18/19		8,086
KRW	66,798,000	USD	60,000	Bank of America NA		02/07/19		42
USD	60,000	KRW	66,288,000	Morgan Stanley & Co. International plc		02/07/19		417
ARS	199,622	USD	4,736	BNP Paribas SA		03/07/19		147
ARS	499,800	USD	12,000	BNP Paribas SA		03/11/19		170
EUR	7,845,685	USD	9,012,550	Bank of America NA		03/20/19		34,667
GBP	738,000	USD	937,134	Barclays Bank plc		03/20/19		7,023
USD	178,000	CHF	173,406	Citibank NA		03/20/19		302
USD	570,680	EUR	440,000	Deutsche Bank AG		12/13/19		51,208
USD	574,376	EUR	440,000	Deutsche Bank AG		02/25/20		51,709
JPY	59,510,000	USD	551,427	JPMorgan Chase Bank NA		03/16/20		12,209
USD	594,031	JPY	59,510,000	HSBC Bank plc		03/16/20		30,395
								202,348
BRL	57,465	USD	15,000	Goldman Sachs International		01/03/19		(173	)
USD	90,896	BRL	356,040	Goldman Sachs International		01/03/19		(967	)
USD	60,000	TWD	1,851,780	BNP Paribas SA		01/03/19		(246	)
ZAR	422,673	USD	30,000	BNP Paribas SA		01/10/19		(645	)
COP	63,220,000	USD	20,000	BNP Paribas SA		01/11/19		(541	)
CLP	40,221,300	USD	60,000	BNP Paribas SA		01/16/19		(2,028	)
CLP	33,456,000	USD	50,000	Deutsche Bank AG		01/16/19		(1,780	)
COP	63,852,200	USD	20,000	Goldman Sachs International		01/16/19		(352	)
RUB	3,323,000	USD	50,000	Bank of America NA		01/16/19		(2,397	)
USD	18,000	ARS	695,250	HSBC Bank plc		01/16/19		(116	)
USD	103,682	IDR	1,500,616,574	BNP Paribas SA		01/16/19		(321	)
USD	85,000	KRW	95,719,350	Citibank NA		01/16/19		(983	)
USD	90,000	MXN	1,812,078	Citibank NA		01/16/19		(2,030	)
USD	80,900	MXN	1,645,608	JPMorgan Chase Bank NA		01/16/19		(2,676	)
ZAR	712,119	USD	50,000	Northern Trust Co.		01/16/19		(582	)
ZAR	1,270,260	USD	90,000	UBS AG		01/16/19		(1,849	)
USD	120,000	IDR	1,769,640,000	JPMorgan Chase Bank NA		01/18/19		(2,615	)
USD	5,514,970	JPY	615,363,112	JPMorgan Chase Bank NA		01/22/19		(108,356	)
USD	100,706	COP	332,530,000	Goldman Sachs International		01/23/19		(1,580	)
USD	29,968	COP	97,516,000	HSBC Bank plc		01/23/19		(28	)
USD	121,194	COP	400,000,000	UBS AG		01/23/19		(1,845	)
USD	386,406	MXN	7,780,000	Citibank NA		01/23/19		(8,214	)
USD	52,288	ZAR	760,000	Bank of America NA		01/23/19		(404	)
BRL	543,087	USD	140,329	Goldman Sachs International		02/04/19		(483	)
USD	2,056	JPY	230,000	State Street Bank & Trust Co.		02/05/19		(48	)
USD	118,963	MXN	2,401,000	Standard Chartered Bank		02/05/19		(2,547	)
USD	10,000	ARS	403,000	BNP Paribas SA		02/11/19		(135	)
USD	10,000	ARS	403,000	JPMorgan Chase Bank NA		02/11/19		(135	)
AUD	11,752,927	USD	8,515,442	Citibank NA		03/20/19		(226,452	)
CAD	559,035	EUR	356,000	BNP Paribas SA		03/20/19		(299	)
CAD	485,028	USD	356,000	Toronto Dominion Bank		03/20/19		(87	)
USD	935,622	GBP	738,000	Morgan Stanley & Co. International plc		03/20/19		(8,535	)
TRY	135,908	USD	25,379	JPMorgan Chase Bank NA		06/19/19		(1,820	)
EUR	440,000	USD	538,349	JPMorgan Chase Bank NA		12/13/19		(18,877	)
EUR	440,000	USD	542,232	JPMorgan Chase Bank NA		02/25/20		(19,565	)
								(419,711	)
	Net Unrealized Depreciation						$	(217,363	)

52 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio

OTC Barrier Options Purchased

Description

Type of Option

Counterparty

Expiration Date

Exercise Price

Barrier Price/Range

Notional Amount (000)

Value

Put

USD Currency

One Touch

Deutsche Bank AG

01/07/19

BRL

3.60

BRL

4.00

USD

180

$

—

USD Currency

One Touch

Deutsche Bank AG

02/07/19

BRL

3.50

BRL

4.00

USD

131

1

$

1

OTC Currency Options Purchased

Description	Counterparty	Expiration Date	Exercise Price			Notional Amount (000)			Value
Call
USD Currency	Morgan Stanley & Co. International plc	01/10/19		BRL	3.92		USD	60	$	311
USD Currency	Deutsche Bank AG	04/03/19		JPY	112.00		USD	1,097		6,291
										6,602
Put
USD Currency	Goldman Sachs International	01/08/19		BRL	3.60		USD	60		—
USD Currency	Morgan Stanley & Co. International plc	01/10/19		BRL	3.74		USD	60		32
USD Currency	HSBC Bank plc	01/31/19		KRW	1,110.00		USD	85		725
USD Currency	Goldman Sachs International	02/07/19		BRL	3.90		USD	60		1,210
USD Currency	HSBC Bank plc	02/07/19		KRW	1,115.00		USD	60		725
USD Currency	JPMorgan Chase Bank NA	02/21/19		ZAR	13.50		USD	58		257
USD Currency	Deutsche Bank AG	04/03/19		JPY	112.00		USD	1,097		36,847
										39,796
									$	46,398

OTC Interest Rate Swaptions Purchased

Paid by the Fund

Received by the Fund

Expiration

Exercise

Notional

Description

Rate

Frequency

Rate

Frequency

Counterparty

Date

Rate

Amount (000)

Value

Call

10-Year Interest Rate Swap

3 month LIBOR

Quarterly

2.75%

Semi-Annual

Citibank NA

04/24/19

2.75

%

USD

890

$

12,736

10-Year Interest Rate Swap

3 month LIBOR

Quarterly

2.75%

Semi-Annual

Citibank NA

04/24/19

2.75

%

USD

220

3,148

10-Year Interest Rate Swap

3 month LIBOR

Quarterly

2.70%

Semi-Annual

Barclays Bank plc

06/10/19

2.70

%

USD

497

7,244

10-Year Interest Rate Swap

3 month LIBOR

Quarterly

3.04%

Semi-Annual

JPMorgan Chase Bank NA

04/27/38

3.04

%

USD

2,320

132,549

10-Year Interest Rate Swap

3 month LIBOR

Quarterly

3.04%

Semi-Annual

JPMorgan Chase Bank NA

04/27/38

3.04

%

USD

104

5,751

161,428

Put

10-Year Interest Rate Swap

3.77%

Semi-Annual

3 month LIBOR

Quarterly

Citibank NA

04/24/19

3.77

%

USD

555

111

10-Year Interest Rate Swap

3.04%

Semi-Annual

3 month LIBOR

Quarterly

JPMorgan Chase Bank NA

04/27/38

3.04

%

USD

104

4,999

10-Year Interest Rate Swap

3.04%

Semi-Annual

3 month LIBOR

Quarterly

JPMorgan Chase Bank NA

04/27/38

3.04

%

USD

2,320

109,363

114,473

$

275,901

OTC Currency Options Written

Description	Counterparty	Expiration Date	Exercise Price			Notional Amount (000)			Value
Call
USD Currency	Morgan Stanley & Co. International plc	01/10/19		BRL	3.90		USD	60	$	(414	)
USD Currency	Citibank NA	01/11/19		MXN	20.90		USD	60		(8	)
USD Currency	JPMorgan Chase Bank NA	02/07/19		KRW	1,140.00		USD	30		(97	)
USD Currency	Morgan Stanley & Co. International plc	04/03/19		JPY	112.00		USD	1,097		(6,264	)
										(6,783	)

SCHEDULES OF INVESTMENTS 53

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio

Description	Counterparty	Expiration Date	Exercise Price		Notional Amount (000)			Value
Put
USD Currency	Morgan Stanley & Co. International plc	01/10/19	BRL	3.60		USD	60	$	—
USD Currency	JPMorgan Chase Bank NA	02/07/19	KRW	1,085.00		USD	30		(78	)
USD Currency	HSBC Bank plc	02/07/19	KRW	1,085.00		USD	60		(156	)
USD Currency	Goldman Sachs International	02/07/19	BRL	3.75		USD	90		(475	)
USD Currency	Morgan Stanley & Co. International plc	04/03/19	JPY	112.00		USD	1,097		(36,918	)
									(37,627	)
								$	(44,410	)

OTC Interest Rate Swaptions Written     

Paid by the Fund

Received by the Fund

Counterparty

Expiration

Exercise

Notional

Description

Rate

Frequency

Rate

Frequency

Date

Rate

Amount (000)

Value

Call

2-Year Interest Rate Swap

3 month LIBOR

Quarterly

2.75%

Semi-Annual

Citibank NA

10/16/20

2.75

%

USD

6,765

$

(73,326)

Put

2-Year Interest Rate Swap

3.75%

Semi-Annual

3 month LIBOR

Quarterly

Citibank NA

10/16/20

3.75

%

USD

6,765

(8,057)

$

(81,383)

Centrally Cleared Inflation Swaps

Paid by the Fund

Received by the Fund

Termination Date

Notional Amount (000)

Value

Upfront Premium Paid (Received)

Unrealized Appreciation (Depreciation)

Reference

Frequency

Rate

Frequency

UK Retail Price Index All Items Monthly

At Termination

3.57%

At Termination

11/15/28

GBP

555

$

2,612

$

(279)

$

2,891

Centrally Cleared Interest Rate Swaps

Paid by the Fund		Received by the Fund		Effective Date			Termination Date		Notional Amount (000)		Value			Upfront Premium Paid (Received)			Unrealized Appreciation (Depreciation)
Rate	Frequency	Rate	Frequency
7.36%	Monthly	28 day MXIBTIIE	Monthly		N/A			01/28/19	MXN	12,895	$	626		$	—		$	626
28 day MXIBTIIE	Monthly	8.21%	Monthly		N/A			10/07/20	MXN	4,597		(1,623	)		—			(1,623	)
28 day MXIBTIIE	Monthly	8.21%	Monthly		N/A			10/07/20	MXN	9,354		(3,293	)		—			(3,293	)
6 month EURIBOR	Semi-Annual	0.38%	Annual		11/09/20	(a)		11/09/21	EUR	7,920		26,896			(376	)		27,272
6 month EURIBOR	Semi-Annual	0.38%	Annual		11/09/20	(a)		11/09/21	EUR	7,920		26,440			(106	)		26,546
1.55%	Semi-Annual	6 month LIBOR	Semi-Annual		11/09/20	(a)		11/09/21	GBP	14,381		(39,265	)		1,462			(40,727	)
6 month EURIBOR	Semi-Annual	0.32%	Annual		11/16/20	(a)		11/16/21	EUR	8,022		21,419			—			21,419
1.42%	Semi-Annual	6 month LIBOR	Semi-Annual		11/16/20	(a)		11/16/21	GBP	6,190		(7,096	)		—			(7,096	)
1.34%	Semi-Annual	6 month LIBOR	Semi-Annual		12/10/20	(a)		12/10/21	GBP	3,690		141			(87	)		228
6 month EURIBOR	Semi-Annual	0.24%	Annual		12/14/20	(a)		12/14/21	EUR	4,045		6,014			120			5,894
7.11%	Monthly	28 day MXIBTIIE	Monthly		N/A			10/14/22	MXN	2,077		5,173			—			5,173
7.11%	Monthly	28 day MXIBTIIE	Monthly		N/A			10/14/22	MXN	1,575		3,912			—			3,912
1.66%	Semi-Annual	6 month LIBOR	Semi-Annual		11/08/21	(a)		11/08/22	GBP	3,647		(11,698	)		304			(12,002	)
1.67%	Semi-Annual	6 month LIBOR	Semi-Annual		11/08/21	(a)		11/08/22	GBP	3,648		(12,150	)		797			(12,947	)
1.54%	Semi-Annual	6 month LIBOR	Semi-Annual		11/15/21	(a)		11/15/22	GBP	3,223		(5,637	)		—			(5,637	)
28 day MXIBTIIE	Monthly	6.32%	Monthly		N/A			07/17/25	MXN	2,027		(12,312	)		—			(12,312	)
3 month LIBOR	Quarterly	2.13%	Semi-Annual		N/A			08/25/25	USD	65		(1,636	)		—			(1,636	)
6 month EURIBOR	Semi-Annual	0.82%	Annual		03/11/19	(a)		02/15/28	EUR	1,870		13,959			—			13,959
1.58%	Semi-Annual	6 month LIBOR	Semi-Annual		N/A			11/21/28	GBP	771		(14,973	)		82			(15,055	)
2.85%	Semi-Annual	3 month LIBOR	Quarterly		N/A			12/24/28	USD	36		(396	)		—			(396	)
3.26%	Semi-Annual	3 month LIBOR	Quarterly		04/26/19	(a)		04/26/29	USD	130		(6,034	)		—			(6,034	)
3 month LIBOR	Quarterly	3.35%	Semi-Annual		04/26/19	(a)		04/26/29	USD	90		4,841			—			4,841
3.23%	Semi-Annual	3 month LIBOR	Quarterly		04/26/19	(a)		04/26/29	USD	31		(1,352	)		—			(1,352	)
2.93%	Semi-Annual	3 month LIBOR	Quarterly		06/12/19	(a)		06/12/29	USD	154		(2,593	)		—			(2,593	)
											$	(10,637)		$	2,196		$	(12,833)

^(a)  Forward Swaps.

54 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio

OTC Currency Swaps

Paid by the Fund

Received by the Fund

Notional Amount (000)

Counterparty

Termination Date (a)

Value

Upfront Premium Paid (Received)

Unrealized Appreciation (Depreciation)

Rate

Frequency

Rate

Frequency

Delivered

Received

16.77 TRY

Annual

3 month LIBOR

Quarterly

TRY

136

USD

25

JPMorgan Chase Bank NA

06/19/24

$

(1,060

)

$

—

$

(1,060

)

^(a)  At expiration date, the notional amount delivered will be exchanged for the notional amount received.

OTC Credit Default Swaps — Buy Protection

Reference Obligation/Index	Financing Rate Paid by the Fund			Payment Frequency		Counterparty	Termination Date		Notional Amount (000)		Value			Upfront Premium Paid (Received)			Unrealized Appreciation (Depreciation)
United Mexican States		1.00	%		Quarterly	JPMorgan Chase Bank NA		06/20/20	USD	209	$	(412	)	$	557		$	(969	)
United Mexican States		1.00			Quarterly	Bank of America NA		09/20/20	USD	209		(370	)		923			(1,293	)
Federative Republic of Brazil		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	45		2,170			2,072			98
Federative Republic of Brazil		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	39		1,865			1,699			166
Federative Republic of Brazil		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	77		3,682			3,387			295
Federative Republic of Brazil		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	76		3,635			3,343			292
Federative Republic of Brazil		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	39		1,865			1,732			133
Federative Republic of Brazil		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	38		1,817			1,688			129
Federative Republic of Brazil		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	39		1,865			1,746			119
Federative Republic of Brazil		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	38		1,817			1,645			172
Federative Republic of Brazil		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	38		1,817			1,655			162
Federative Republic of Brazil		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	38		1,817			1,637			180
Federative Republic of Brazil		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	39		1,848			1,773			75
Federative Republic of Brazil		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	38		1,817			1,655			162
Federative Republic of Brazil		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	38		1,817			1,655			162
Federative Republic of Brazil		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	39		1,865			1,680			185
Federative Republic of Brazil		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	39		1,865			1,699			166
Federative Republic of Brazil		1.00			Quarterly	Goldman Sachs International		12/20/23	USD	90		4,305			7,633			(3,328	)
Federative Republic of Brazil		1.00			Quarterly	Goldman Sachs International		12/20/23	USD	25		1,196			1,108			88
Federative Republic of Brazil		1.00			Quarterly	Goldman Sachs International		12/20/23	USD	50		2,391			4,241			(1,850	)
Federative Republic of Brazil		1.00			Quarterly	HSBC Bank plc		12/20/23	USD	390		18,643			33,145			(14,502	)
Republic of Colombia		1.00			Quarterly	Bank of America NA		12/20/23	USD	22		567			240			327
Republic of Colombia		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	37		953			708			245
Republic of Colombia		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	37		953			708			245
Republic of Colombia		1.00			Quarterly	BNP Paribas SA		12/20/23	USD	39		996			654			342
Republic of Colombia		1.00			Quarterly	BNP Paribas SA		12/20/23	USD	36		918			556			362
Republic of Colombia		1.00			Quarterly	Citibank NA		12/20/23	USD	36		926			688			238
Republic of Colombia		1.00			Quarterly	Citibank NA		12/20/23	USD	37		953			732			221
Republic of Colombia		1.00			Quarterly	Citibank NA		12/20/23	USD	36		926			728			198
Republic of Colombia		1.00			Quarterly	Citibank NA		12/20/23	USD	12		309			224			85
Republic of Colombia		1.00			Quarterly	Citibank NA		12/20/23	USD	37		953			691			262
Republic of Colombia		1.00			Quarterly	Deutsche Bank AG		12/20/23	USD	38		978			727			251
Republic of the Philippines		1.00			Quarterly	BNP Paribas SA		12/20/23	USD	254		(1,660	)		(1,194	)		(466	)
Republic of the Philippines		1.00			Quarterly	Morgan Stanley & Co. International plc		12/20/23	USD	15		(98	)		(77	)		(21	)
United Mexican States		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	59		1,469			464			1,005
United Mexican States		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	30		747			229			518
United Mexican States		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	75		1,868			573			1,295
United Mexican States		1.00			Quarterly	BNP Paribas SA		12/20/23	USD	30		747			241			506
United Mexican States		1.00			Quarterly	BNP Paribas SA		12/20/23	USD	30		747			664			83
United Mexican States		1.00			Quarterly	BNP Paribas SA		12/20/23	USD	30		747			241			506
United Mexican States		1.00			Quarterly	BNP Paribas SA		12/20/23	USD	36		897			796			101
United Mexican States		1.00			Quarterly	BNP Paribas SA		12/20/23	USD	30		747			241			506
United Mexican States		1.00			Quarterly	BNP Paribas SA		12/20/23	USD	30		747			228			519
United Mexican States		1.00			Quarterly	BNP Paribas SA		12/20/23	USD	36		897			796			101
United Mexican States		1.00			Quarterly	BNP Paribas SA		12/20/23	USD	21		523			201			322
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23	USD	29		722			169			553
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23	USD	37		922			806			116
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23	USD	100		2,491			2,190			301

SCHEDULES OF INVESTMENTS 55

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio

Reference Obligation/Index	Financing Rate Paid by the Fund			Payment Frequency		Counterparty	Termination Date		Notional Amount (000)			Value			Upfront Premium Paid (Received)			Unrealized Appreciation (Depreciation)
United Mexican States		1.00	%		Quarterly	Citibank NA		12/20/23		USD	37	$	922		$	838		$	84
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	37		922			733			189
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	50		1,245			480			765
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	44		1,097			1,036			61
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	29		722			215			507
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	37		922			708			214
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	29		722			156			566
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	80		1,992			767			1,225
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	44		1,102			789			313
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	34		847			190			657
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	18		447			140			307
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	30		747			181			566
United Mexican States		1.00			Quarterly	Deutsche Bank AG		12/20/23		USD	28		698			274			424
United Mexican States		1.00			Quarterly	Deutsche Bank AG		12/20/23		USD	28		698			274			424
United Mexican States		1.00			Quarterly	Morgan Stanley & Co. International plc		12/20/23		USD	20		498			206			292
United Mexican States		1.00			Quarterly	Morgan Stanley & Co. International plc		12/20/23		USD	29		722			240			482
CMBX.NA.9.A		2.00			Monthly	Citigroup Global Markets, Inc.		09/17/58		USD	20		805			370			435
CMBX.NA.9.A		2.00			Monthly	Credit Suisse International		09/17/58		USD	32		1,288			500			788
CMBX.NA.9.A		2.00			Monthly	Credit Suisse International		09/17/58		USD	50		2,012			852			1,160
CMBX.NA.9.AAA		0.50			Monthly	Credit Suisse International		09/17/58		USD	60		220			709			(489	)
CMBX.NA.9.A		2.00			Monthly	Credit Suisse International		09/17/58		USD	20		805			346			459
CMBX.NA.9.AAA		0.50			Monthly	Deutsche Bank AG		09/17/58		USD	50		183			600			(417	)
CMBX.NA.9.A		2.00			Monthly	Goldman Sachs International		09/17/58		USD	10		403			184			219
CMBX.NA.9.AAA		0.50			Monthly	Morgan Stanley & Co. International plc		09/17/58		USD	40		147			474			(327	)
CMBX.NA.9.AAA		0.50			Monthly	Morgan Stanley & Co. International plc		09/17/58		USD	110		403			1,400			(997	)
CMBX.NA.9.AAA		0.50			Monthly	Morgan Stanley & Co. International plc		09/17/58		USD	50		183			592			(409	)
CMBX.NA.6.AAA		0.50			Monthly	Deutsche Bank AG		05/11/63		USD	100		(604	)		(73	)		(531	)
CMBX.NA.6.AAA		0.50			Monthly	Deutsche Bank AG		05/11/63		USD	70		(422	)		(9	)		(413	)
CMBX.NA.6.AAA		0.50			Monthly	Deutsche Bank AG		05/11/63		USD	120		(724	)		—			(724	)
CMBX.NA.6.BBB-		3.00			Monthly	JPMorgan Securities LLC		05/11/63		USD	20		3,215			1,897			1,318
												$	101,477		$	104,966		$	(3,489	)

OTC Credit Default Swaps — Sell Protection

Reference Obligation/Index	Financing Rate Received by the Fund			Payment Frequency		Counterparty		Termination Date		Credit Rating (a)	Notional Amount (000) (b)			Value			Upfront Premium Paid (Received)			Unrealized Appreciation (Depreciation)
United Mexican States		1.00	%		Quarterly		Bank of America NA		06/20/20	BBB+		USD	209	$	412		$	(643	)	$	1,055
United Mexican States		1.00			Quarterly		JPMorgan Chase Bank NA		09/20/20	BBB+		USD	209		370			(807	)		1,177
CMBX.NA.3.AM		0.50			Monthly		Credit Suisse International		12/13/49	NR		USD	670		(88	)		(2,615	)		2,527
CMBX.NA.3.AM		0.50			Monthly		Goldman Sachs International		12/13/49	NR		USD	1,320		(174	)		(5,217	)		5,043
CMBX.NA.4.AM		0.50			Monthly		Deutsche Bank AG		02/17/51	NR		USD	120		(1	)		(24	)		23
CMBX.NA.8.A		2.00			Monthly		Goldman Sachs International		10/17/57	A3		USD	30		(1,110	)		(1,624	)		514
CMBX.NA.8.A		2.00			Monthly		Goldman Sachs International		10/17/57	A3		USD	20		(740	)		(1,953	)		1,213
CMBX.NA.9.BBB-		3.00			Monthly		Credit Suisse International		09/17/58	NR		USD	44		(5,321	)		(3,810	)		(1,511	)
CMBX.NA.9.BBB-		3.00			Monthly		Deutsche Bank AG		09/17/58	NR		USD	23		(2,781	)		(2,749	)		(32	)
CMBX.NA.9.BBB-		3.00			Monthly		Deutsche Bank AG		09/17/58	NR		USD	30		(3,628	)		(3,179	)		(449	)
CMBX.NA.9.BBB-		3.00			Monthly		JPMorgan Securities LLC		09/17/58	NR		USD	12		(1,451	)		(1,048	)		(403	)
CMBX.NA.9.BBB-		3.00			Monthly		Morgan Stanley & Co. International plc		09/17/58	NR		USD	21		(2,539	)		(2,470	)		(69	)
CMBX.NA.10.BBB-		3.00			Monthly		JPMorgan Securities LLC		11/17/59	BBB-		USD	5		(572	)		(426	)		(146	)
CMBX.NA.6.BBB-		3.00			Monthly		Credit Suisse International		05/11/63	BBB		USD	20		(3,215	)		(1,568	)		(1,647	)
														$	(20,838	)	$	(28,133	)	$	7,295

^(a)  Using S&P’s rating of the issuer or the underlying securities of the index, as applicable.

^(b)  The maximum potential amount the Fund may pay should a negative credit event take place as defined under the terms of the agreement.

56 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio

OTC Interest Rate Swaps

Paid by the Fund		Received by the Fund			Counterparty	Termination Date		Notional Amount (000)			Value			Upfront Premium Paid (Received)		Unrealized Appreciation (Depreciation)
Rate	Frequency	Rate		Frequency
1 day BZDIOVER	At Termination		7.46%	At Termination	Bank of America NA		01/04/21		BRL	731	$	496		$	—	$	496
1 day BZDIOVER	At Termination		7.48%	At Termination	Bank of America NA		01/04/21		BRL	2,550		1,978			—		1,978
1 day BZDIOVER	At Termination		7.42%	At Termination	Credit Suisse International		01/04/21		BRL	1,274		596			—		596
1 day BZDIOVER	At Termination		7.43%	At Termination	JPMorgan Chase Bank NA		01/04/21		BRL	545		282			—		282
3.27%	Semi-Annual		3 month LIBOR	Quarterly	Deutsche Bank AG		05/16/21		USD	550		(8,676	)		—		(8,676	)
1 day BZDIOVER	At Termination		8.53%	At Termination	Citibank NA		01/02/23		BRL	1,520		1,856			—		1,856
5.73%	Monthly		28 day MXIBTIIE	Monthly	Bank of America NA		01/03/25		MXN	940		6,652			—		6,652
28 day MXIBTIIE	Monthly		6.43%	Monthly	Bank of America NA		06/06/25		MXN	836		(4,745	)		—		(4,745	)
28 day MXIBTIIE	Monthly		6.33%	Monthly	Citibank NA		07/17/25		MXN	1,010		(6,122	)		—		(6,122	)
6.31%	Monthly		28 day MXIBTIIE	Monthly	Deutsche Bank AG		08/11/25		MXN	3,807		23,500			—		23,500
28 day MXIBTIIE	Monthly		6.27%	Monthly	Bank of America NA		12/05/25		MXN	116		(754	)		—		(754	)
											$	15,063		$	—	$	15,063

The following reference rates, and their values as of period end, are used for security descriptions:

Reference Index		Reference rate
1 day BZDIOVER	Overnight Brazil CETIP — Interbank Rate	0.25%
28 day MXIBTIIE	Mexico Interbank TIIE 28-Day	8.41%
3 month LIBOR	London Interbank Offered Rate	2.81%
6 month EURIBOR	Euro Interbank Offered Rate	(0.24%)

Balances Reported in the Statements of Assets and Liabilities for Centrally Cleared Swaps, OTC Swaps and Options Written

	Swap Premiums Paid		Swap Premiums Received			Unrealized Appreciation		Unrealized Depreciation			Value
Centrally Cleared Swaps(a)	$	2,765	$	(848	)	$	112,761	$	(122,703	)	$	—
OTC Swaps		106,319		(29,486	)		70,159		(52,350	)		—
Options Written		N/A		N/A			33,965		(61,560	)		(125,793	)

^(a) Includes cumulative appreciation (depreciation) on centrally cleared swaps, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities and is net of any previously paid (received) swap premium amounts.

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

	Commodity Contracts		Credit Contracts		Equity Contracts		Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Assets — Derivative Financial Instruments
Futures contracts
Net unrealized appreciation(a)	$	—	$	—	$	—	$	—	$	957,761	$	—	$	957,761
Forward foreign currency exchange contracts
Unrealized appreciation on forward foreign currency exchange contracts		—		—		—		202,348		—		—		202,348
Options purchased
Investments at value — unaffiliated(b)		—		—		—		46,399		275,901		—		322,300
Swaps — centrally cleared
Net unrealized appreciation(a)		—		—		—		—		109,870		2,891		112,761
Swaps — OTC
Unrealized appreciation on OTC swaps; Swap premiums paid		—		141,118		—		—		35,360		—		176,478
	$	—	$	141,118	$	—	$	248,747	$	1,378,892	$	2,891	$	1,771,648

SCHEDULES OF INVESTMENTS 57

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio

	Commodity Contracts		Credit Contracts		Equity Contracts		Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Liabilities — Derivative Financial Instruments
Futures contracts
Net unrealized depreciation(a)	$	—	$	—	$	1,127,131	$	—	$	79,944	$	—	$	1,207,075
Forward foreign currency exchange contracts
Unrealized depreciation on forward foreign currency exchange contracts		—		—		—		419,711		—		—		419,711
Options written
Options written, at value		—		—		—		44,410		81,383		—		125,793
Swaps — centrally cleared
Net unrealized depreciation(a)		—		—		—		—		122,703		—		122,703
Swaps — OTC
Unrealized depreciation on OTC swaps; Swap premiums received		—		60,479		—		1,060		20,297		—		81,836
	$	—	$	60,479	$	1,127,131	$	465,181	$	304,327	$	—	$	1,957,118

^(a)  Includes cumulative appreciation (depreciation) on futures contracts and centrally cleared swaps, if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

^(b)  Includes options purchased at value as reported in the Schedule of Investments.

For the year ended December 31, 2018, the effect of derivative financial instruments in the Statements of Operations were as follows:

	Commodity Contracts		Credit Contracts		Equity Contracts			Foreign Currency Exchange Contracts			Interest Rate Contracts			Other Contracts			Total
Net Realized Gain (Loss) from:
Futures contracts	$	—	$	—	$	23,459		$	—		$	1,840,093		$	—		$	1,863,552
Forward foreign currency exchange contracts		—		—		—			(270,333	)		—			—			(270,333	)
Options purchased(a)		—		—		—			(335,780	)		(81,192	)		—			(416,972	)
Options written		—		—		22,049			199,590			284,541			—			506,180
Swaps		—		9,827		—			(4,210	)		(54,870	)		(14,794	)		(64,047	)
	$	—	$	9,827	$	45,508		$	(410,733	)	$	1,988,572		$	(14,794	)	$	1,618,380
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts	$	—	$	—	$	(1,131,351	)	$	—		$	1,444,834		$	—		$	313,483
Forward foreign currency exchange contracts		—		—		—			(142,115	)		—			—			(142,115	)
Options purchased(b)		—		—		—			92,516			138,772			—			231,288
Options written		—		—		—			(71,057	)		(84,931	)		—			(155,988	)
Swaps		—		3,542		—			(1,060	)		109,438			(1,551	)		110,369
	$	—	$	3,542	$	(1,131,351	)	$	(121,716	)	$	1,608,113		$	(1,551	)	$	357,037

^(a)  Options purchased are included in net realized gain (loss) from investments — unaffiliated.

^(b)  Options purchased are included in net change in unrealized appreciation (depreciation) on investments — unaffiliated.

Derivative Financial Instruments — Offsetting as of Period End    

The Fund’s derivative assets and liabilities (by type) were as follows:    

	Assets			Liabilities
Derivative Financial Instruments:
Futures contracts	$	506,768		$	22,364
Forward foreign currency exchange contracts		202,348			419,711
Options(a)		322,300			125,793
Swaps — Centrally cleared		5,530			—
Swaps — OTC(b)		176,478			81,836
Total derivative assets and liabilities in the Statements of Assets and Liabilities	$	1,213,424		$	649,704
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)		(512,298	)		(22,364	)
Total derivative assets and liabilities subject to an MNA	$	701,126		$	627,340

^(a)  Includes options purchased at value which is included in Investments at value — unaffiliated in the Statements of Assets and Liabilities and reported in the Schedule of Investments.

^(b)  Includes unrealized appreciation (depreciation) on OTC swaps and swap premiums (paid/received) in the Statements of Assets and Liabilities.    

58 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio

The following tables present the Fund’s derivative assets and liabilities by counterparty net of amounts available for offset under an MNA and net of the related collateral received and pledged by the Fund:

Counterparty	Derivative Assets Subject to an MNA by Counterparty		Derivatives Available for Offset (a)			Non-cash Collateral Received		Cash Collateral Received		Net Amount of Derivative Assets  (b)
Bank of America NA	$	48,097	$	(10,236	)	$	—	$	—	$	37,861
Barclays Bank plc		59,905		—			—		—		59,905
BNP Paribas SA		9,525		(5,875	)		—		—		3,650
Citibank NA		38,709		(38,709	)		—		—		—
Citigroup Global Markets, Inc.		805		—			—		—		805
Credit Suisse International		7,937		(7,937	)		—		—		—
Deutsche Bank AG		173,565		(19,056	)		—		—		154,509
Goldman Sachs International		22,350		(18,002	)		—		—		4,348
HSBC Bank plc		64,990		(14,802	)		—		—		50,188
JPMorgan Chase Bank NA		267,144		(157,055	)		—		—		110,089
JPMorgan Securities LLC		3,215		(2,023	)		—		—		1,192
Morgan Stanley & Co. International plc		4,446		(4,446	)		—		—		—
Royal Bank of Scotland		438		—			—		—		438
	$	701,126	$	(278,141	)	$	—	$	—	$	422,985

Counterparty	Derivative Liabilities Subject to an MNA by Counterparty		Derivatives Available for Offset (a)			Non-cash Collateral Pledged		Cash Collateral Pledged			Net Amount of Derivative Liabilities  (c)
Bank of America NA	$	10,236	$	(10,236	)	$	—	$	—		$	—
BNP Paribas SA		5,875		(5,875	)		—		—			—
Citibank NA		325,192		(38,709	)		—		—			286,483
Credit Suisse International		11,640		(7,937	)		—		—			3,703
Deutsche Bank AG		19,056		(19,056	)		—		—			—
Goldman Sachs International		18,002		(18,002	)		—		—			—
HSBC Bank plc		14,802		(14,802	)		—		—			—
JPMorgan Chase Bank NA		157,055		(157,055	)		—		—			—
JPMorgan Securities LLC		2,023		(2,023	)		—		—			—
Morgan Stanley & Co. International plc		56,501		(4,446	)		—		(52,055	)		—
Northern Trust Co.		582		—			—		—			582
Standard Chartered Bank		2,547		—			—		—			2,547
State Street Bank & Trust Co.		48		—			—		—			48
Toronto Dominion Bank		87		—			—		—			87
UBS AG		3,694		—			—		—			3,694
	$	627,340	$	(278,141	)	$	—	$	—		$	349,199

^(a)  The amount of derivatives available for offset is limited to the amount of derivative assets and/or liabilities that are subject to an MNA.

^(b)  Net amount represents the net amount receivable from the counterparty in the event of default.

^(c)  Net amount represents the net amount payable due to the counterparty in the event of default.

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	111,346,685
Average notional value of contracts — short	$	49,734,182
Forward foreign currency exchange contracts:
Average amounts purchased — in USD	$	12,044,191
Average amounts sold — in USD	$	16,582,128
Options:
Average value of option contracts purchased	$	80,924
Average value of option contracts written	$	44,855
Average notional value of swaption contracts purchased	$	5,175,750
Average notional value of swaption contracts written	$	31,462,500
Credit default swaps:
Average notional value — buy protection	$	3,901,950
Average notional value — sell protection	$	2,791,982
Interest rate swaps:
Average notional value — pays fixed rate	$	14,340,825
Average notional value — receives fixed rate	$	13,074,779

SCHEDULES OF INVESTMENTS 59

Schedule of Investments  (continued) December 31, 2018 BlackRock Balanced Capital Portfolio

Currency swaps:
Average notional value — pays	$	6,420
Average notional value — receives	$	6,345
Inflation swaps:
Average notional value — receives fixed rate	$	561,061
Total return swaps:
Average notional value	$	964,000

For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:

	Level 1			Level 2			Level 3		Total
Assets:
Investments:
Long-Term Investments:
Asset-Backed Securities	$	—		$	18,860,319		$	189,874	$	19,050,193
Common Stocks(a)		270,072,542			—			—		270,072,542
Corporate Bonds(a)		—			59,207,281			—		59,207,281
Foreign Agency Obligations		—			238,027			—		238,027
Foreign Government Obligations		—			3,768,499			—		3,768,499
Investment Companies		1,789,184			—			—		1,789,184
Municipal Bonds		—			12,874,478			—		12,874,478
Non-Agency Mortgage-Backed Securities		—			8,393,660			1,406,639		9,800,299
Other Interests		—			—			—		—
Preferred Securities(a)		—			307,717			—		307,717
U.S. Government Sponsored Agency Securities		—			82,851,062			81,630		82,932,692
U.S. Treasury Obligations		—			22,264,911			—		22,264,911
Short-Term Securities:
Borrowed Bond Agreements		—			3,912,475			—		3,912,475
Commercial Paper		—			248,104			—		248,104
Foreign Government Obligations		—			5,711,323			—		5,711,323
Money Market Funds		5,841,530			—			—		5,841,530
Options Purchased:
Foreign currency exchange contracts		—			46,399			—		46,399
Interest rate contracts		—			275,901			—		275,901
Liabilities:
Borrowed Bonds		—			(3,895,555	)		—		(3,895,555	)
TBA Sale Commitments		—			(26,604,858	)		—		(26,604,858	)
Subtotal	$	277,703,256		$	188,459,743		$	1,678,143	$	467,841,142
Investments valued at NAV(b)										5,718,493
Total Investments									$	473,559,635
Derivative Financial Instruments(c)
Assets:
Credit contracts	$	—		$	34,799		$	—	$	34,799
Foreign currency exchange contracts		—			202,348			—		202,348
Interest rate contracts		957,761			145,230			—		1,102,991
Other contracts		—			2,891			—		2,891
Liabilities:
Credit contracts		—			(30,993	)		—		(30,993	)
Equity contracts		(1,127,131	)		—			—		(1,127,131	)
Foreign currency exchange contracts		—			(465,181	)		—		(465,181	)
Interest rate contracts		(79,944	)		(224,383	)		—		(304,327	)
	$	(249,314	)	$	(335,289	)	$	—	$	(584,603	)

^(a) See above Schedule of Investments for values in each industry.

^(b) As of December 31, 2018, certain investments of the Fund were fair valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

^(c) Derivative financial instruments are swaps, futures contracts, forward foreign currency exchange contracts and options written. Swaps, futures contracts and forward foreign currency exchange contracts are valued at the unrealized appreciation (depreciation) on the instrument and options written are shown at value.

During the year ended December 31, 2018, there were no transfers between Level 1 and Level 2.

See notes to financial statements.

60 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments December 31, 2018 BlackRock Capital Appreciation Portfolio (Percentages shown are based on Net Assets)

Security	Shares		Value
Common Stocks — 97.5%
Automobiles — 0.8%
Tesla, Inc.(a)(b)		3,722	$	1,238,682
Banks — 0.6%
First Republic Bank(a)		10,648		925,311
Beverages — 1.8%
Constellation Brands, Inc., Class A		17,944		2,885,754
Biotechnology — 1.7%(b)
BioMarin Pharmaceutical, Inc.		8,091		688,948
Vertex Pharmaceuticals, Inc.		12,732		2,109,820
				2,798,768
Capital Markets — 3.4%
CME Group, Inc.(a)		12,877		2,422,421
S&P Global, Inc.		18,338		3,116,360
				5,538,781
Chemicals — 1.5%
Sherwin-Williams Co. (The)		6,307		2,481,552
Diversified Financial Services — 1.2%
Berkshire Hathaway, Inc., Class B(b)		9,827		2,006,477
Entertainment — 5.4%
Activision Blizzard, Inc.		27,492		1,280,302
Electronic Arts, Inc.(b)		37,227		2,937,583
Netflix, Inc.(b)		17,111		4,579,930
				8,797,815
Equity Real Estate Investment Trusts (REITs) — 1.8%
SBA Communications Corp.(b)		17,608		2,850,559
Health Care Equipment & Supplies — 7.6%
Align Technology, Inc.(b)		11,868		2,485,515
Becton Dickinson and Co.		15,513		3,495,389
Boston Scientific Corp.(b)		106,368		3,759,045
Intuitive Surgical, Inc.(b)		5,577		2,670,937
				12,410,886
Health Care Providers & Services — 5.4%
Centene Corp.(b)		19,956		2,300,927
UnitedHealth Group, Inc.		25,673		6,395,658
				8,696,585
Hotels, Restaurants & Leisure — 1.0%
Domino’s Pizza, Inc.(a)		6,691		1,659,301
Industrial Conglomerates — 1.0%
Roper Technologies, Inc.		6,150		1,639,098
Interactive Media & Services — 9.4%
Alphabet, Inc., Class A(b)		6,320		6,604,147
Facebook, Inc., Class A(b)		21,600		2,831,544
IAC/InterActiveCorp(b)		7,732		1,415,265
Tencent Holdings Ltd.		112,700		4,517,056
				15,368,012
Internet & Direct Marketing Retail — 13.1%
Amazon.com, Inc.(b)		9,651		14,495,512
Booking Holdings, Inc.(b)		2,445		4,211,317
MercadoLibre, Inc.		8,957		2,623,057
				21,329,886
IT Services — 10.5%
Mastercard, Inc., Class A		29,096		5,488,960
PayPal Holdings, Inc.(b)		35,442		2,980,318
Visa, Inc., Class A		65,201		8,602,620
				17,071,898

Security	Shares		Value
Life Sciences Tools & Services — 1.7%
Illumina, Inc.(b)		9,257	$	2,776,452
Machinery — 0.9%
Xylem, Inc.(a)		22,828		1,523,084
Pharmaceuticals — 2.6%
Novartis AG, ADR		31,293		2,685,253
Zoetis, Inc.		18,058		1,544,681
				4,229,934
Professional Services — 2.2%
CoStar Group, Inc.(b)		10,781		3,636,863
Road & Rail — 1.6%
Union Pacific Corp.		19,136		2,645,169
Semiconductors & Semiconductor Equipment — 3.0%
ASML Holding NV (Registered), NYRS		19,242		2,994,440
NVIDIA Corp.		14,297		1,908,650
				4,903,090
Software — 17.2%
Adobe, Inc.(b)		17,850		4,038,384
Autodesk, Inc.(b)		19,398		2,494,777
Intuit, Inc.		18,982		3,736,606
Microsoft Corp.		102,990		10,460,694
salesforce.com, Inc.(b)		35,743		4,895,719
ServiceNow, Inc.(b)		13,720		2,442,846
				28,069,026
Technology Hardware, Storage & Peripherals — 0.9%
Apple, Inc.		9,174		1,447,107
Textiles, Apparel & Luxury Goods — 1.2%
NIKE, Inc., Class B		25,090		1,860,173
Total Common Stocks — 97.5% (Cost: $123,481,524)				158,790,263
Preferred Stocks — 0.6%(b)(c)(d)
Software — 0.6%
Palantir Technologies, Inc., Series I (Acquired 02/11/14, cost $1,152,906)		188,076		1,017,491
Total Preferred Stocks — 0.6% (Cost: $1,152,906)				1,017,491
Total Long-Term Investments — 98.1% (Cost: $124,634,430)				159,807,754
Short-Term Securities — 5.2%(e)
BlackRock Liquidity Funds, T-Fund, Institutional Class, 2.32%(g)		3,749,583		3,749,583
JPMorgan US Treasury Plus Money Market Fund, Agency Class, 2.24%		96,847		96,847
SL Liquidity Series, LLC, Money Market Series, 2.57%(f)(g)		4,608,561		4,608,100
Total Short-Term Securities — 5.2% (Cost: $8,454,629)				8,454,530
Total Investments — 103.3% (Cost: $133,089,059)				168,262,284
Liabilities in Excess of Other Assets — (3.3)%				(5,396,218	)
Net Assets — 100.0%			$	162,866,066

^(a)  Security, or a portion of the security, is on loan.

^(b)  Non-income producing security.

^(c)  Restricted security as to resale, excluding 144A securities. The Fund held restricted securities with a current value of $1,017,491, representing 0.62% of its net assets as of period end, and an original cost of $1,152,906.

SCHEDULES OF INVESTMENTS 61

Schedule of Investments  (continued) December 31, 2018 BlackRock Capital Appreciation Portfolio (Percentages shown are based on Net Assets)

^(d)  Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy.

^(e)  Annualized 7-day yield as of period end.

^(f)  Security was purchased with the cash collateral from loaned securities.

^(g)  During the year ended December 31, 2018, investments in issuers considered to be affiliates of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

Affiliate	Shares Held at 12/31/17		Net Activity			Shares Held at 12/31/18		Value at 12/31/18		Income			Net Realized Gain (Loss) (a)			Change in Unrealized Appreciation (Depreciation)
BlackRock Liquidity Funds, T-Fund, Institutional Class		221,423		3,528,160			3,749,583	$	3,749,583	$	28,243		$	—		$	—
SL Liquidity Series, LLC, Money Market Series		8,905,737		(4,297,176	)		4,608,561		4,608,100		20,600	(b)		(2,428	)		223
								$	8,357,683	$	48,843		$	(2,428	)	$	223

^(a) Includes net capital gain distributions, if applicable.

^(b) Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

For Fund compliance purposes, the Fund’s industry classifications refer to one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments. For information about the Fund’s policy regarding valuation of investments, refer to the Notes to Financial Statements.

The following table summarizes the Fund’s investments categorized in the disclosure hierarchy:

	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Long-Term Investments:
Common Stocks:
Automobiles	$	1,238,682	$	—	$	—	$	1,238,682
Banks		925,311		—		—		925,311
Beverages		2,885,754		—		—		2,885,754
Biotechnology		2,798,768		—		—		2,798,768
Capital Markets		5,538,781		—		—		5,538,781
Chemicals		2,481,552		—		—		2,481,552
Diversified Financial Services		2,006,477		—		—		2,006,477
Entertainment		8,797,815		—		—		8,797,815
Equity Real Estate Investment Trusts (REITs)		2,850,559		—		—		2,850,559
Health Care Equipment & Supplies		12,410,886		—		—		12,410,886
Health Care Providers & Services		8,696,585		—		—		8,696,585
Hotels, Restaurants & Leisure		1,659,301		—		—		1,659,301
Industrial Conglomerates		1,639,098		—		—		1,639,098
Interactive Media & Services		10,850,956		4,517,056		—		15,368,012
Internet & Direct Marketing Retail		21,329,886		—		—		21,329,886
IT Services		17,071,898		—		—		17,071,898
Life Sciences Tools & Services		2,776,452		—		—		2,776,452
Machinery		1,523,084		—		—		1,523,084
Pharmaceuticals		4,229,934		—		—		4,229,934
Professional Services		3,636,863		—		—		3,636,863
Road & Rail		2,645,169		—		—		2,645,169
Semiconductors & Semiconductor Equipment		4,903,090		—		—		4,903,090
Software		28,069,026		—		—		28,069,026
Technology Hardware, Storage & Peripherals		1,447,107		—		—		1,447,107
Textiles, Apparel & Luxury Goods		1,860,173		—		—		1,860,173
Preferred Stocks		—		—		1,017,491		1,017,491
Short-Term Securities		3,846,430		—		—		3,846,430
Subtotal	$	158,119,637	$	4,517,056	$	1,017,491	$	163,654,184
Investments valued at NAV(a)							$	4,608,100
Total Investments							$	168,262,284

^(a)  As of December 31, 2018, certain investments of the Fund were fair valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

During the year ended December 31, 2018, there were no transfers between Level 1 and Level 2.

See notes to financial statements.

62 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Consolidated Schedule of Investments December 31, 2018 BlackRock Global Allocation Portfolio (Percentages shown are based on Net Assets)

Security	Shares		Value
Common Stocks — 58.4%
Australia — 0.2%
AGL Energy Ltd.		1,565	$	22,727
BHP Group Ltd.		199		4,810
Coles Group Ltd.(a)		233		1,927
Newcrest Mining Ltd.		5,986		91,999
Quintis HoldCo Pty. Ltd. (Acquired 10/22/18, cost $115,835)(a)(b)(c)		218,994		117,229
Rio Tinto Ltd.		151		8,357
Stockland		2,645		6,562
Telstra Corp. Ltd.		203		407
Woolworths Group Ltd.		493		10,227
				264,245
Belgium — 0.2%
Anheuser-Busch InBev SA		6,213		409,306
Brazil — 0.7%
Azul SA, ADR(a)(d)		22,988		636,538
Banco do Brasil SA(a)		934		11,203
Banco Santander Brasil SA		300		3,305
Hapvida Participacoes e Investimentos SA(a)(e)		27,780		223,631
Notre Dame Intermedica Participacoes SA(a)		49,118		368,535
Petrobras Distribuidora SA		306		2,029
Suzano Papel e Celulose SA		306		3,007
TIM Participacoes SA(a)		616		1,883
				1,250,131
Canada — 1.5%
Canadian Natural Resources Ltd.		132		3,185
Canadian Pacific Railway Ltd.		38		6,743
Enbridge, Inc.(d)		25,485		791,693
Encana Corp.		30,711		177,509
Goldcorp, Inc.		74		725
Husky Energy, Inc.		817		8,444
Imperial Oil Ltd.		341		8,640
Manulife Financial Corp.		1,294		18,360
Nutrien Ltd.(d)		339		15,922
Rogers Communications, Inc., Class B		237		12,145
Suncor Energy, Inc.		23,633		660,069
Teck Resources Ltd., Class B		443		9,537
TransCanada Corp.		21,508		768,030
Wheaton Precious Metals Corp.		2,814		54,932
				2,535,934
China — 1.5%
Agile Group Holdings Ltd.		6,000		7,078
Agricultural Bank of China Ltd., Class H		11,000		4,818
Alibaba Group Holding Ltd., ADR(a)		2,811		385,304
Angang Steel Co. Ltd., Class H		8,000		5,519
Angel Yeast Co. Ltd., Class A		20,400		75,235
Anhui Conch Cement Co. Ltd., Class H		1,500		7,254
BAIC Motor Corp. Ltd., Class H(a)(e)		1,000		529
Baidu, Inc., ADR(a)		50		7,930
Bank of China Ltd., Class H		3,000		1,293
Beijing Capital International Airport Co. Ltd., Class H		82,000		87,029
Beijing Enterprises Holdings Ltd.		1,500		7,954
China CITIC Bank Corp. Ltd., Class H		13,000		7,887
China Construction Bank Corp., Class H		6,000		4,913
China Mobile Ltd.		2,000		19,353
China National Building Material Co. Ltd., Class H		4,000		2,737
China Petroleum & Chemical Corp., Class H		32,000		22,810
China Resources Beer Holdings Co. Ltd.		2,000		6,992
China Resources Cement Holdings Ltd.		16,000		14,428
China Resources Gas Group Ltd.		2,000		7,925
China Shenhua Energy Co. Ltd., Class H		5,500		11,995
CITIC Ltd.		10,000		15,692

Security	Shares		Value
China (continued)
CNOOC Ltd.		15,000	$	23,105
Country Garden Holdings Co. Ltd.		4,000		4,857
Country Garden Services Holdings Co. Ltd.(a)		3,114		4,930
Dongfeng Motor Group Co. Ltd., Class H		2,000		1,818
Fosun International Ltd.		9,000		13,116
Guangzhou Automobile Group Co. Ltd., Class H		4,800		4,785
Industrial & Commercial Bank of China Ltd., Class H		35,000		24,894
Jiangsu Expressway Co. Ltd., Class H		2,000		2,792
Jiangsu Yanghe Brewery Joint-Stock Co. Ltd., Class A		4,900		67,880
Kweichow Moutai Co. Ltd., Class A		2,800		241,769
Luzhou Laojiao Co. Ltd., Class A		12,400		73,612
Meituan Dianping, Class B		6,875		38,532
Momo, Inc., ADR(a)		70		1,662
New Oriental Education & Technology Group, Inc., ADR(a)		132		7,235
PetroChina Co. Ltd., Class H		2,000		1,241
Ping An Healthcare and Technology Co. Ltd.(a)(e)		46,856		164,741
SINA Corp.(a)		274		14,697
Sinopec Shanghai Petrochemical Co. Ltd., Class H		26,000		11,381
Tencent Holdings Ltd.		24,500		981,969
Tingyi Cayman Islands Holding Corp.		2,000		2,679
Want Want China Holdings Ltd.		86,000		60,172
Wuliangye Yibin Co. Ltd., Class A		9,300		69,131
Yanzhou Coal Mining Co. Ltd., Class H		4,000		3,230
Yum China Holdings, Inc.		1,503		50,396
Zhejiang Expressway Co. Ltd., Class H		6,000		5,205
Zijin Mining Group Co. Ltd., Class H		8,000		3,032
				2,583,536
Czech Republic — 0.0%
CEZ A/S		3,172		75,615
Denmark — 0.1%
Carlsberg A/S, Class B		265		28,190
Danske Bank A/S		423		8,398
Novo Nordisk A/S, Class B		2,623		120,467
				157,055
Finland — 0.0%
Nokia OYJ		2,798		16,243
France — 2.7%
AXA SA		14,907		321,721
Cie de Saint-Gobain		492		16,333
Cie Generale des Etablissements Michelin SCA		156		15,354
Danone SA		18,971		1,337,126
Dassault Aviation SA		205		284,203
Eiffage SA		1,487		124,324
Engie SA		1,043		14,986
EssilorLuxottica SA		3,934		489,727
Eutelsat Communications SA		3,674		72,382
Kering SA		70		32,793
L’Oreal SA		80		18,306
Publicis Groupe SA		282		16,090
Safran SA		5,935		711,814
Sanofi		1,293		112,168
Societe Generale SA		791		25,078
Sodexo SA		8,641		886,182
TOTAL SA, ADR		274		14,297
Unibail-Rodamco-Westfield		1,571		243,104
				4,735,988
Germany — 1.3%
adidas AG		16		3,344
Allianz SE (Registered)		163		32,756
Bayer AG (Registered)		10,839		753,839
Evonik Industries AG		944		23,563
Fresenius SE & Co. KGaA		17,416		841,787
Knorr-Bremse AG(a)		6,158		554,706

CONSOLIDATED SCHEDULES OF INVESTMENTS 63

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation Portfolio (Percentages shown are based on Net Assets)

Security	Shares		Value
Germany (continued)
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen (Registered)		29	$	6,325
SAP SE		165		16,376
Vonovia SE		981		44,222
				2,276,918
Hong Kong — 0.9%
CK Asset Holdings Ltd.		500		3,658
CK Infrastructure Holdings Ltd.		10,500		79,461
CLP Holdings Ltd.		8,000		90,407
Hang Lung Properties Ltd.		47,000		89,334
HKT Trust & HKT Ltd.(f)		39,000		56,181
Hongkong Land Holdings Ltd.		2,100		13,239
I-CABLE Communications Ltd.(a)		7,664		115
Jardine Matheson Holdings Ltd.		1,700		118,369
Link REIT		8,500		86,171
Nine Dragons Paper Holdings Ltd.		1,000		924
Power Assets Holdings Ltd.		3,000		20,842
Sino Land Co. Ltd.		26,000		44,545
Sun Hung Kai Properties Ltd.		60,666		865,803
Swire Pacific Ltd., Class A		5,500		58,069
WH Group Ltd.(e)		27,500		21,121
Wharf Real Estate Investment Co. Ltd.		9,000		53,828
				1,602,067
India — 1.2%
Coal India Ltd.		19,979		68,877
HCL Technologies Ltd.		433		5,983
Hero MotoCorp Ltd.		1,417		62,965
Hindustan Petroleum Corp. Ltd.		3,375		12,264
Housing Development Finance Corp. Ltd.		20,348		573,290
Infosys Ltd.		725		6,850
JSW Steel Ltd.		601		2,638
Maruti Suzuki India Ltd.		1,975		211,034
Oil & Natural Gas Corp. Ltd.		20,569		44,155
Reliance Industries Ltd.		57,408		921,344
State Bank of India(a)		43,803		185,508
Tata Consultancy Services Ltd.		294		7,972
				2,102,880
Indonesia — 0.0%
Bank Central Asia Tbk. PT		35,600		64,381
Italy — 0.6%
Enel SpA		77,414		448,788
Eni SpA		995		15,718
RAI Way SpA(e)		38,277		190,115
Snam SpA		32,378		141,763
Telecom Italia SpA(a)		275,826		152,700
Telecom Italia SpA		13,780		6,609
UniCredit SpA		261		2,956
				958,649
Japan — 7.7%
Aeon Co. Ltd.		200		3,909
Ajinomoto Co., Inc.		36,900		655,679
Alfresa Holdings Corp.		2,000		50,979
Alps Electric Co. Ltd.		1,020		19,778
Asahi Kasei Corp.		19,700		202,189
Astellas Pharma, Inc.		36,750		469,541
Canon Marketing Japan, Inc.		1,800		32,081
Daicel Corp.		7,100		72,886
Daikin Industries Ltd.		2,600		276,264
Daiwa House Industry Co. Ltd.		200		6,380
Denso Corp.		18,030		798,146
Dowa Holdings Co. Ltd.		1,000		29,931
East Japan Railway Co.		10,727		947,303
Eisai Co. Ltd.		200		15,484

Security	Shares		Value
Japan (continued)
Exedy Corp.		1,200	$	29,312
Fujitsu Ltd.		100		6,234
GS Yuasa Corp.		2,400		48,946
Hino Motors Ltd.		3,300		31,075
Hitachi Chemical Co. Ltd.		2,500		37,609
Hitachi Ltd.		1,000		26,510
Hoya Corp.		9,101		548,791
Japan Airlines Co. Ltd.		27,300		967,541
Japan Aviation Electronics Industry Ltd.		3,500		40,278
JFE Holdings, Inc.		200		3,186
Kajima Corp.		300		4,030
Kamigumi Co. Ltd.		1,700		34,780
KDDI Corp.		2,600		62,127
Keyence Corp.		100		50,545
Kinden Corp.		7,100		114,958
Koito Manufacturing Co. Ltd.		10,200		526,254
Kuraray Co. Ltd.		2,700		37,974
Kyowa Hakko Kirin Co. Ltd.		300		5,669
Kyudenko Corp.		900		34,108
Mabuchi Motor Co. Ltd.		1,900		58,203
Maeda Road Construction Co. Ltd.		1,800		37,291
Medipal Holdings Corp.		2,300		49,207
Mitsubishi Electric Corp.		59,300		653,936
Mitsubishi Estate Co. Ltd.		3,300		51,921
Mitsubishi Heavy Industries Ltd.		400		14,353
Mitsubishi Tanabe Pharma Corp.		100		1,444
Mitsubishi UFJ Financial Group, Inc.		800		3,926
Mitsui & Co. Ltd.		100		1,536
Mitsui Fudosan Co. Ltd.		400		8,885
Murata Manufacturing Co. Ltd.		4,440		598,289
Nexon Co. Ltd.(a)		100		1,291
Nichias Corp.		2,000		34,107
Nippo Corp.		1,700		32,525
Nippon Telegraph & Telephone Corp.		1,320		53,855
Nippon Television Holdings, Inc.		4,300		63,304
Nitto Denko Corp.		13,500		677,085
NTT Docomo, Inc.		200		4,494
Okumura Corp.		2,154		62,761
Olympus Corp.		100		3,058
Ono Pharmaceutical Co. Ltd.		200		4,084
Oracle Corp.		200		12,696
Otsuka Holdings Co. Ltd.		100		4,086
Panasonic Corp.		1,200		10,780
Rohm Co. Ltd.		5,260		335,720
Seino Holdings Co. Ltd.		2,500		32,731
Seven & i Holdings Co. Ltd.		900		39,110
Shimamura Co. Ltd.		400		30,630
Shin-Etsu Chemical Co. Ltd.		8,320		639,249
Shiseido Co. Ltd.		200		12,526
Sony Corp.		400		19,284
Stanley Electric Co. Ltd.		1,100		30,772
Subaru Corp.		35,660		761,818
Sumitomo Chemical Co. Ltd.		3,000		14,528
Suzuken Co. Ltd.		900		45,830
Suzuki Motor Corp.		17,261		870,152
Sysmex Corp.		100		4,749
Taisei Corp.		100		4,283
Toagosei Co. Ltd.		5,600		61,720
Toda Corp.		9,000		56,088
Tokyo Gas Co. Ltd.		24,916		630,179
Tokyo Steel Manufacturing Co. Ltd.		9,200		74,519
Toray Industries, Inc.		41,300		291,996
Toshiba Corp.(a)		600		16,942
Toyota Industries Corp.		9,714		447,328
TV Asahi Holdings Corp.		3,200		57,614

64 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation Portfolio (Percentages shown are based on Net Assets)

Security	Shares		Value
Japan (continued)
Ube Industries Ltd.		14,660	$	296,474
Unicharm Corp.		300		9,703
Yamato Kogyo Co. Ltd.		1,300		30,385
				13,447,924
Macau — 0.0%
Galaxy Entertainment Group Ltd.		1,000		6,317
Sands China Ltd.		400		1,744
				8,061
Malaysia — 0.0%
Malaysia Airports Holdings Bhd.		14,800		29,980
Mexico — 0.0%
America Movil SAB de CV		10,486		7,465
Cemex SAB de CV(a)		7,153		3,458
Grupo Financiero Banorte SAB de CV, Class O		137		669
				11,592
Netherlands — 2.3%
ABN AMRO Group NV, CVA(e)		13,119		308,714
ASML Holding NV		19		2,977
Koninklijke Ahold Delhaize NV		419		10,585
Koninklijke Philips NV		40,931		1,435,020
NXP Semiconductors NV(a)		238		17,441
Royal Dutch Shell plc, Class A		50,883		1,499,752
Royal Dutch Shell plc, Class B		603		18,028
Royal Dutch Shell plc, ADR, Class A(d)		11,019		642,077
				3,934,594
Norway — 0.0%
Equinor ASA		196		4,158
Peru — 0.0%
Southern Copper Corp.		43		1,323
Poland — 0.0%
Polski Koncern Naftowy ORLEN SA		98		2,839
Polskie Gornictwo Naftowe i Gazownictwo SA(a)		1,102		2,038
				4,877
Portugal — 0.1%
Jeronimo Martins SGPS SA		3,320		39,344
NOS SGPS SA		24,524		148,712
				188,056
Singapore — 0.6%
CapitaLand Ltd.		335,700		765,540
ComfortDelGro Corp. Ltd.		38,200		60,339
Genting Singapore Ltd.		22,400		16,034
Singapore Telecommunications Ltd.		30,600		65,858
United Overseas Bank Ltd.		3,000		54,270
				962,041
South Africa — 0.0%
Anglo American plc(d)		357		7,983
Aspen Pharmacare Holdings Ltd.		513		4,800
Kumba Iron Ore Ltd.		26		511
MTN Group Ltd.		396		2,448
Naspers Ltd., Class N		4		801
Old Mutual Ltd.		5,819		9,041
				25,584
South Korea — 0.7%
Coway Co. Ltd.		809		53,726
Doosan Bobcat, Inc.(a)		5,538		156,793
E-MART, Inc.		46		7,512
Hana Financial Group, Inc.		404		13,139
Industrial Bank of Korea		650		8,186
KB Financial Group, Inc.		158		6,591
KT&G Corp.		5,608		510,590

Security	Shares		Value
South Korea (continued)
LG Chem Ltd.		273	$	85,099
LG Electronics, Inc.		18		1,010
Lotte Chemical Corp.		3		746
NCSoft Corp.		135		56,588
POSCO		369		80,712
Samsung Electro-Mechanics Co. Ltd.(a)		5		466
Samsung Electronics Co. Ltd.		751		26,144
Samsung SDS Co. Ltd.		29		5,307
Shinhan Financial Group Co. Ltd.		656		23,259
SK Innovation Co. Ltd.		6		963
SK Telecom Co. Ltd.		312		75,279
S-Oil Corp.		605		52,772
Woori Bank		555		7,761
				1,172,643
Spain — 0.4%
Banco Bilbao Vizcaya Argentaria SA		4,594		24,402
Cellnex Telecom SA(e)		23,231		594,098
				618,500
Sweden — 0.0%
Sandvik AB		665		9,528
Telefonaktiebolaget LM Ericsson, Class B		2,043		18,085
				27,613
Switzerland — 0.9%
Nestle SA (Registered)		19,184		1,557,027
Roche Holding AG		91		22,591
Swiss Re AG		147		13,524
				1,593,142
Taiwan — 0.9%
Cathay Financial Holding Co. Ltd.		52,000		79,603
Cheng Shin Rubber Industry Co. Ltd.		24,341		32,377
Chunghwa Telecom Co. Ltd.		116,000		423,535
Far EasTone Telecommunications Co. Ltd.(a)		70,000		173,878
Formosa Chemicals & Fibre Corp.		16,000		54,737
Formosa Petrochemical Corp.(a)		12,000		42,582
Formosa Plastics Corp.		18,000		59,166
Fubon Financial Holding Co. Ltd.		62,000		95,126
Hon Hai Precision Industry Co. Ltd.(a)		30,760		70,792
MediaTek, Inc.		1,000		7,443
Nan Ya Plastics Corp.		23,000		56,565
Nanya Technology Corp.		5,000		8,954
Taiwan Cooperative Financial Holding Co. Ltd.		30		17
Taiwan Mobile Co. Ltd.		56,000		193,933
Taiwan Semiconductor Manufacturing Co. Ltd.		15,000		108,919
Uni-President Enterprises Corp.		38,000		86,209
				1,493,836
Thailand — 0.2%
Advanced Info Service PCL		16,200		85,908
Intouch Holdings PCL, Class F		41,300		60,568
PTT Global Chemical PCL		34,700		76,031
Siam Cement PCL (The)		5,100		68,322
Thai Oil PCL		23,900		48,574
				339,403
Turkey — 0.0%
Eregli Demir ve Celik Fabrikalari TAS		218		296
Turk Hava Yollari AO(a)		2,008		6,094
Turkiye Is Bankasi A/S, Class C		1,585		1,353
				7,743
United Arab Emirates — 0.4%
NMC Health plc		19,102		666,684
United Kingdom — 1.6%
Barclays plc		6,137		11,742

CONSOLIDATED SCHEDULES OF INVESTMENTS 65

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation Portfolio (Percentages shown are based on Net Assets)

Security	Shares		Value
United Kingdom (continued)
Berkeley Group Holdings plc		1,349	$	59,832
Experian plc		216		5,236
GlaxoSmithKline plc		1,496		28,511
GW Pharmaceuticals plc, ADR(a)		714		69,537
HSBC Holdings plc		77,177		636,690
Kingfisher plc		151,480		398,285
Liberty Global plc, Class A(a)		15,789		336,937
Liberty Global plc, Class C(a)		539		11,125
National Grid plc		2,963		28,988
SSE plc		589		8,134
Vodafone Group plc		630,892		1,226,637
				2,821,654
United States — 31.7%
Abbott Laboratories		642		46,436
AbbVie, Inc.(d)		655		60,384
Accenture plc, Class A		213		30,036
Adobe, Inc.(a)		186		42,081
AES Corp.		848		12,262
Agilent Technologies, Inc.		157		10,591
Air Products & Chemicals, Inc.		7,572		1,211,899
Allergan plc		120		16,039
Alliance Data Systems Corp.		45		6,754
Ally Financial, Inc.		336		7,614
Alphabet, Inc., Class A(a)		29		30,304
Alphabet, Inc., Class C(a)		2,527		2,616,986
Altria Group, Inc.		19,120		944,337
Amazon.com, Inc.(a)		1,107		1,662,681
American Airlines Group, Inc.		254		8,156
American International Group, Inc.		60		2,365
American Tower Corp.		288		45,559
Ameriprise Financial, Inc.		285		29,745
Amgen, Inc.		307		59,764
Anadarko Petroleum Corp.		16,350		716,784
Anthem, Inc.		6,416		1,685,034
Apple, Inc.		16,044		2,530,781
AT&T, Inc.		5,296		151,148
Autodesk, Inc.(a)		53		6,816
Automatic Data Processing, Inc.		71		9,310
Bank of America Corp.		26,617		655,843
Bank of New York Mellon Corp. (The)		312		14,686
Baxter International, Inc.		672		44,231
Berkshire Hathaway, Inc., Class B(a)		537		109,645
Biogen, Inc.(a)		1,407		423,394
Boeing Co. (The)		184		59,340
Booking Holdings, Inc.(a)		11		18,947
Bristol-Myers Squibb Co.		620		32,228
Capital One Financial Corp.		144		10,885
Carnival Corp.		40		1,972
Caterpillar, Inc.		223		28,337
Celgene Corp.(a)		122		7,819
CenterPoint Energy, Inc.		342		9,655
CH Robinson Worldwide, Inc.		604		50,790
Charles Schwab Corp. (The)		17,267		717,098
Charter Communications, Inc., Class A(a)		5,073		1,445,653
Chevron Corp.		350		38,076
Chubb Ltd.		4,175		539,326
Cisco Systems, Inc.(d)		1,318		57,109
Citigroup, Inc.		9,977		519,403
Cloudera, Inc.(a)		30,073		332,607
Cognizant Technology Solutions Corp., Class A		338		21,456
Colgate-Palmolive Co.		17,529		1,043,326
Comcast Corp., Class A(g)		57,581		1,960,633
Conagra Brands, Inc.		278		5,938
ConocoPhillips		101		6,297
Constellation Brands, Inc., Class A		50		8,041

Security	Shares		Value
United States (continued)
Corning, Inc.		708	$	21,389
Costco Wholesale Corp.		84		17,112
CSX Corp.		674		41,876
Cummins, Inc.		64		8,553
CVS Health Corp.		19,239		1,260,539
DaVita, Inc.(a)		8,368		430,617
Dell Technologies, Inc., Class C(a)(d)		54		2,649
Delta Air Lines, Inc.		326		16,267
Discover Financial Services		235		13,860
Dollar General Corp.		152		16,428
Dollar Tree, Inc.(a)		8,336		752,908
Domo, Inc., Class B(a)		6,742		132,345
Domo, Inc., Class B (Acquired 04/01/15-04/12/17, cost $469,893)(a)(b)		3,715		72,932
Dover Corp.		5,812		412,361
DowDuPont, Inc.		14,528		776,957
Dropbox, Inc., Class A(a)		24,291		496,272
DXC Technology Co.		201		10,687
Eaton Corp. plc		366		25,130
eBay, Inc.(a)		636		17,853
Edgewell Personal Care Co.(a)(d)		7,260		271,161
Edwards Lifesciences Corp.(a)		78		11,947
Eli Lilly & Co.		69		7,985
Equity Residential		4,585		302,656
Exelon Corp.		449		20,250
Expedia Group, Inc.		132		14,870
Exxon Mobil Corp.		23,548		1,605,738
Facebook, Inc., Class A(a)		8,320		1,090,669
Fieldwood Energy, Inc.(a)(c)		2,201		83,638
Fifth Third Bancorp		686		16,142
FleetCor Technologies, Inc.(a)		4,073		756,438
Fortune Brands Home & Security, Inc.		898		34,115
General Electric Co.		1,677		12,695
General Motors Co.(d)		396		13,246
Gilead Sciences, Inc.		12,972		811,399
Global Payments, Inc.		336		34,652
Goldman Sachs Group, Inc. (The)		229		38,254
Halfmoon Parent, Inc.		75		14,170
Hartford Financial Services Group, Inc. (The)		1,054		46,850
HCA Healthcare, Inc.		3,797		472,537
Helmerich & Payne, Inc.		243		11,649
Hewlett Packard Enterprise Co.		1,186		15,667
Home Depot, Inc. (The)		253		43,470
HP, Inc.		563		11,519
Humana, Inc.		49		14,038
Huntsman Corp.		443		8,545
Illumina, Inc.(a)		71		21,295
Intel Corp.		1,505		70,630
International Business Machines Corp.		307		34,897
Intuit, Inc.		246		48,425
Intuitive Surgical, Inc.(a)		25		11,973
Jawbone Health Hub, Inc. (Acquired 01/24/17, cost $0)(a)(b)(c)		6,968		—
Johnson & Johnson		17,411		2,246,890
JPMorgan Chase & Co.		6,347		619,594
Kinder Morgan, Inc.		208		3,199
KLA-Tencor Corp.		155		13,871
Kohl’s Corp.		208		13,799
Kroger Co. (The)		557		15,317
Las Vegas Sands Corp.		357		18,582
Lear Corp.		69		8,477
Liberty Broadband Corp., Class A(a)		1,215		87,249
Liberty Broadband Corp., Class C(a)		5,113		368,290
Liberty Media Corp.-Liberty SiriusXM, Class A(a)		4,266		156,989
Liberty Media Corp.-Liberty SiriusXM, Class C(a)		7,149		264,370
Lookout, Inc. (Acquired 03/04/15, cost $16,643)(a)(b)(c)		1,457		29

66 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation Portfolio (Percentages shown are based on Net Assets)

Security	Shares		Value
United States (continued)
Lowe’s Cos., Inc.		1,039	$	95,962
Marathon Petroleum Corp.		9,189		542,243
Marsh & McLennan Cos., Inc.		14,134		1,127,186
Masco Corp.		3,084		90,176
Mastercard, Inc., Class A(d)		361		68,103
McDonald’s Corp.		148		26,280
McKesson Corp.		143		15,797
Medtronic plc		674		61,307
Merck & Co., Inc.		1,379		105,369
MetLife, Inc.		612		25,129
MGM Resorts International		13,863		336,316
Micron Technology, Inc.(a)		633		20,085
Microsoft Corp.		24,741		2,512,943
Mondelez International, Inc., Class A		1,358		54,361
Morgan Stanley		18,078		716,793
Newmont Mining Corp.		14,545		503,984
NextEra Energy Partners LP		6,379		274,616
NextEra Energy, Inc.		8,138		1,414,547
NIKE, Inc., Class B		180		13,345
Norfolk Southern Corp.		127		18,992
Northrop Grumman Corp.		37		9,061
NRG Energy, Inc.		350		13,860
Occidental Petroleum Corp.		293		17,984
Omnicom Group, Inc.		894		65,477
Oracle Corp.		4,417		199,428
Packaging Corp. of America		162		13,521
Paychex, Inc.		290		18,893
PayPal Holdings, Inc.(a)		148		12,445
PepsiCo, Inc.		763		84,296
Pfizer, Inc.		34,539		1,507,627
PG&E Corp.(a)		352		8,360
Philip Morris International, Inc.		9,209		614,793
Phillips 66		480		41,352
Procter & Gamble Co. (The)		8,276		760,730
Prudential Financial, Inc.		154		12,559
Pure Storage, Inc., Class A(a)		15,209		244,561
PVH Corp.		111		10,317
QUALCOMM, Inc.		10,743		611,384
Raytheon Co.		2,284		350,251
Red Hat, Inc.(a)		96		16,861
Reinsurance Group of America, Inc.		137		19,211
Rockwell Automation, Inc.		182		27,387
Ross Stores, Inc.		201		16,723
Royal Caribbean Cruises Ltd.		128		12,517
Schlumberger Ltd.		4,159		150,057
Sempra Energy(d)		3,452		373,472
Sprint Corp.(a)		78		454
St Joe Co. (The)(a)		2,545		33,518
Starbucks Corp.		9,100		586,040
State Street Corp.		112		7,064
Stryker Corp.		375		58,781
SunTrust Banks, Inc.		10,308		519,936
Symantec Corp.		63		1,190
Sysco Corp.		171		10,715
Target Corp.		181		11,962
Tenet Healthcare Corp.(a)		3,634		62,287
Thermo Fisher Scientific, Inc.		279		62,437
Travelers Cos., Inc. (The)		597		71,491
Union Pacific Corp.		111		15,344
United Continental Holdings, Inc.(a)		7,213		603,944
United Technologies Corp.		5,137		546,988
UnitedHealth Group, Inc.		798		198,798
US Bancorp		385		17,594
Valero Energy Corp.		443		33,212
VeriSign, Inc.(a)		155		22,985

Security		Shares		Value
United States (continued)
Verizon Communications, Inc.			11,787	$	662,665
VF Corp.			74		5,279
Visa, Inc., Class A			606		79,956
Vistra Energy Corp.(a)			3,665		83,892
VMware, Inc., Class A(a)			128		17,553
Vornado Realty Trust			247		15,321
Walgreens Boots Alliance, Inc.			35		2,392
Walmart, Inc.			483		44,991
Walt Disney Co. (The)			194		21,272
Waste Management, Inc.			91		8,098
Wells Fargo & Co.			31,590		1,455,667
Western Digital Corp.			12,310		455,101
Weyerhaeuser Co.			649		14,187
Williams Cos., Inc. (The)			63,200		1,393,560
Wyndham Destinations, Inc.			331		11,863
Xcel Energy, Inc.			184		9,066
Yum! Brands, Inc.			281		25,830
Zoetis, Inc.			171		14,627
Zynga, Inc., Class A(a)			93,070		365,765
					55,189,998
Total Common Stocks — 58.4% (Cost: $105,310,372)					101,582,354
		Par (000)
Corporate Bonds — 4.6%
Australia — 0.4%
Quintis Australia Pty. Ltd.(c)(e)(h):
7.50% (7.50% Cash or 8.00% PIK), 10/01/26	USD		360		354,367
12.00% (0.00% Cash or 0.00% PIK), 10/01/28			427		426,980
					781,347
Belgium — 0.1%
Anheuser-Busch InBev Worldwide, Inc.:
3.50%, 01/12/24			80		78,252
4.00%, 04/13/28			132		126,262
					204,514
Chile — 0.0%
Inversiones Alsacia SA, 8.00%, 12/31/18(a)(e)(i)			166		3,326
China — 0.0%
China Milk Products Group Ltd., 0.00%, 01/05/12(a)(i)(j)(k)			300		3,000
France — 0.1%
Danone SA, 2.59%, 11/02/23(e)			200		190,138
Germany — 0.2%
Bayer Capital Corp. BV, 5.63%, 11/22/19(e)(j)	EUR		300		262,850
India — 0.0%
REI Agro Ltd.(a)(c)(i)(j):
5.50%, 11/13/14(e)	USD		220		—
5.50%, 11/13/14			152		—
					—
Japan — 0.2%
Sumitomo Mitsui Financial Group, Inc., 3.94%, 10/16/23			410		417,208
Luxembourg — 0.0%
Intelsat Jackson Holdings SA, 8.00%, 02/15/24(e)			37		38,110
Netherlands — 0.1%
ING Groep NV, 4.10%, 10/02/23			200		199,879
Singapore — 0.1%
CapitaLand Ltd., 1.95%, 10/17/23(e)(j)	SGD		250		177,652

CONSOLIDATED SCHEDULES OF INVESTMENTS 67

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Turkey — 0.1%
Bio City Development Co. BV, 8.00%, 07/06/20(a)(c)(e)(i)(j)	USD		800	$	124,000
United Kingdom — 0.1%
HSBC Holdings plc, (LIBOR USD 3 Month + 1.06%), 3.26%, 03/13/23(l)			200		195,731
United States — 3.2%
Allergan Funding SCS, 3.45%, 03/15/22			127		124,973
Allergan Sales LLC, 5.00%, 12/15/21(e)			63		64,821
American Express Co., 3.70%, 08/03/23			285		285,824
Apple, Inc.:
3.35%, 02/09/27			233		227,033
3.20%, 05/11/27			224		216,178
AT&T, Inc., 3.60%, 02/17/23			278		276,277
AvalonBay Communities, Inc., 3.50%, 11/15/24			28		27,832
Bank of America Corp.:
(LIBOR USD 3 Month + 0.66%), 2.37%, 07/21/21(l)			58		56,962
3.30%, 01/11/23			133		130,986
4.00%, 01/22/25			71		69,165
Becton Dickinson and Co.:
3.13%, 11/08/21			129		127,227
2.89%, 06/06/22			106		102,663
3.36%, 06/06/24			57		54,747
BP Capital Markets America, Inc., 3.79%, 02/06/24			115		116,241
Capital One Financial Corp.:
3.20%, 01/30/23			96		93,420
3.30%, 10/30/24			40		37,830
Citigroup, Inc., 2.45%, 01/10/20			128		126,972
Comcast Corp.:
3.45%, 10/01/21			106		107,075
2.75%, 03/01/23			134		130,418
3.70%, 04/15/24			264		265,612
CVS Health Corp., 3.70%, 03/09/23			409		404,622
DowDuPont, Inc., 3.77%, 11/15/20			105		106,007
eBay, Inc., 2.75%, 01/30/23			75		72,104
Edgewell Personal Care Co.:
4.70%, 05/19/21			66		65,010
4.70%, 05/24/22			65		62,563
Enterprise Products Operating LLC:
3.35%, 03/15/23			71		70,030
3.90%, 02/15/24			40		40,339
Gilead Sciences, Inc., 3.25%, 09/01/22			133		132,687
Goldman Sachs Group, Inc. (The), (LIBOR USD 3 Month + 1.05%), 2.91%, 06/05/23(l)			133		127,679
Halfmoon Parent, Inc.(e):
3.40%, 09/17/21			181		180,588
3.75%, 07/15/23			154		153,487
Hughes Satellite Systems Corp., 7.63%, 06/15/21			21		21,788
Northrop Grumman Corp., 2.55%, 10/15/22			133		128,698
Philip Morris International, Inc.:
2.50%, 11/02/22			24		23,066
3.60%, 11/15/23			53		53,122
QUALCOMM, Inc.:
2.60%, 01/30/23			67		64,475
2.90%, 05/20/24			80		76,176
Sempra Energy, 2.88%, 10/01/22			35		33,755
Sherwin-Williams Co. (The), 2.25%, 05/15/20			25		24,617
Simon Property Group LP, 2.75%, 06/01/23			53		51,359
Starbucks Corp., 3.10%, 03/01/23			134		131,984
UnitedHealth Group, Inc.:
3.50%, 06/15/23			133		134,147
3.50%, 02/15/24			85		85,544

Security		Par (000)		Value
United States (continued)
Verizon Communications, Inc., 3.13%, 03/16/22	USD		139	$	138,073
Walgreen Co., 3.10%, 09/15/22			136		132,668
Wells Fargo & Co., 3.07%, 01/24/23			28		27,270
Wells Fargo Bank NA, 3.55%, 08/14/23			250		248,943
Williams Cos., Inc. (The), 3.70%, 01/15/23			67		65,359
					5,498,416
Total Corporate Bonds — 4.6% (Cost: $9,776,390)					8,096,171
Floating Rate Loan Interests — 0.2%(m)
United States — 0.2%
Fieldwood Energy LLC, 2nd Lien Term Loan, (LIBOR USD 1 Month + 7.25%), 9.77%, 04/11/23			75		65,318
Fieldwood Energy LLC, Term Loan, (LIBOR USD 1 Month + 5.25%), 7.77%, 04/11/22			56		51,885
Hilton Worldwide Finance LLC, 1st Lien Term Loan B2, (LIBOR USD 1 Month + 1.75%), 4.26%, 10/25/23			212		203,710
					320,913
Total Floating Rate Loan Interests — 0.2% (Cost: $288,619)					320,913
Foreign Government Obligations — 2.8%
Argentina — 0.8%
Republic of Argentina:
3.38%, 01/15/23	EUR		110		99,881
6.88%, 01/26/27	USD		559		424,840
5.88%, 01/11/28			808		578,730
7.82%, 12/31/33	EUR		322		308,072
					1,411,523
Australia — 0.2%
Commonwealth of Australia, 3.00%, 03/21/47	AUD		568		413,921
Canada — 0.2%
Canadian Government Bond, 0.75%, 03/01/21	CAD		446		318,982
Germany — 0.9%
Federal Republic of Germany, 0.50%, 02/15/28	EUR		1,265		1,491,788
Mexico — 0.7%
United Mexican States:
6.50%, 06/10/21	MXN		128		619,686
8.00%, 12/07/23			122		605,596
					1,225,282
Total Foreign Government Obligations — 2.8% (Cost: $5,298,422)					4,861,496
		Shares
Investment Companies — 1.3%
iShares Gold Trust(a)(n)(u)			126,072		1,549,425
SPDR Gold Shares(a)(g)(n)			4,023		487,789
VanEck Vectors Gold Miners ETF(d)			10,194		214,991
Total Investment Companies — 1.3% (Cost: $2,367,452)					2,252,205

68 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Preferred Securities — 2.5%
Capital Trusts — 0.9%
United Kingdom — 0.3%(m)(o)
HSBC Holdings plc, 6.37%	USD		235	$	218,550
Lloyds Bank plc, 13.00%	GBP		155		317,157
					535,707
United States — 0.6%
American Express Co., Series C, 4.90%(m)(o)			88		84,260
Citigroup, Inc.(m)(o):
Series O, 5.87%			300		289,500
Series Q, 5.95%			121		116,765
Goldman Sachs Group, Inc. (The), Series M, 5.38%(m)(o)			141		136,244
Morgan Stanley, Series H, 5.45%(m)(o)			100		97,262
NBCUniversal Enterprise, Inc., 5.25%(e)(o)			100		101,250
Prudential Financial, Inc.(m):
5.63%, 06/15/43			51		49,946
5.87%, 09/15/42			76		76,760
USB Capital IX, 3.50%(m)(o)			37		27,380
					979,367
Total Capital Trusts — 0.9% (Cost: $1,587,310)					1,515,074
		Shares
Preferred Stocks — 1.2%
Brazil — 0.1%
Braskem SA (Preference)			200		2,445
Itau Unibanco Holding SA (Preference)			10,134		92,822
Petroleo Brasileiro SA (Preference)(a)			332		1,943
					97,210
South Korea — 0.0%
Samsung Electronics Co. Ltd. (Preference)(a)			429		12,258
United States — 1.1%
Grand Rounds, Inc., Series C (Acquired 03/31/15, cost $127,944), 0.00%(a)(b)(c)			46,081		112,899
Grand Rounds, Inc., Series D (Acquired 05/01/18, cost $51,112), 0.00%(a)(b)(c)			21,089		51,036
Lookout, Inc., Series F (Acquired 09/19/14-10/22/14, cost $243,061), 0.00%(a)(b)(c)			21,278		128,519
Palantir Technologies, Inc., Series I (Acquired 02/11/14, cost $272,246), 0.00%(a)(b)(c)			44,412		240,269
Uber Technologies, Inc., Series D (Acquired 06/06/14, cost $418,728), 0.00%(a)(b)(c)			26,992		1,213,830
Wells Fargo & Co., Series L, 7.50%(j)(o)			57		71,932
Welltower, Inc., Series I, 6.50%(d)(j)(o)			2,453		154,907
					1,973,392
Total Preferred Stocks — 1.2% (Cost: $1,393,312)					2,082,860
Trust Preferreds — 0.4%
China — 0.2%
Mandatory Exchangeable Trust, 5.75%, 06/01/19(e)(j)			2,682		413,913
United States — 0.2%(m)
Citigroup Capital XIII, 8.89%, 10/30/40			6,206		164,024
GMAC Capital Trust I, Series 2, 8.40%, 02/15/40			6,800		172,380
					336,404
Total Trust Preferreds — 0.4% (Cost: $593,769)					750,317
Total Preferred Securities — 2.5% (Cost: $3,574,391)					4,348,251

Security		Par (000)			Value
U.S. Treasury Obligations — 24.3%
U.S. Treasury Inflation Linked Notes, 0.63%, 04/15/23	USD		1,441		$	1,416,963
U.S. Treasury Notes:
1.50%, 11/30/19(n)			3,346			3,311,098
2.75%, 08/31/23			4,305			4,353,263
2.88%, 09/30/23-11/30/25			15,045			15,296,375
2.88%, 10/31/23(g)			11,928			12,126,591
3.00%, 10/31/25(p)			5,623			5,768,217
Total U.S. Treasury Obligations — 24.3% (Cost: $41,455,070)						42,272,507
Total Long-Term Investments — 94.1% (Cost: $168,070,716)						163,733,897
Short-Term Securities — 7.5%
Foreign Government Obligations — 2.0%(q)
Japan — 2.0%
Japan Treasury Bills:
(0.32)%, 01/28/19	JPY		110,300			1,006,448
(0.34)%, 02/04/19			110,400			1,007,394
(0.25)%, 03/04/19			114,050			1,040,828
(0.16)%, 03/25/19			48,400			441,743
						3,496,413
Total Foreign Government Obligations — 2.0% (Cost: $3,412,773)						3,496,413
		Shares
Money Market Funds — 1.6%(r)(u)
BlackRock Liquidity Funds, T-Fund, Institutional Class, 2.32%			572,384			572,384
SL Liquidity Series, LLC, Money Market Series, 2.57%(s)			2,217,730			2,217,509
Total Money Market Funds — 1.6% (Cost: $2,789,953)						2,789,893
		Par (000)
Time Deposits — 0.0%
Canada — 0.0%
Brown Brothers Harriman & Co., 0.84%, 01/02/19	CAD		6			4,582
Europe — 0.0%
Citibank NA, (0.57)%, 01/02/19	EUR		18			20,211
Hong Kong — 0.0%
Brown Brothers Harriman & Co., 1.52%, 01/02/19	HKD		15			1,975
United Kingdom — 0.0%
JPMorgan Chase & Co., 0.37%, 01/02/19	GBP		—	(t)		296
United States — 0.0%
Brown Brothers Harriman & Co., 2.42%, 01/02/19	USD		1			985
Total Time Deposits — 0.0% (Cost: $28,049)						28,049
U.S. Treasury Obligations — 3.9%
U.S. Treasury Bills(q):
2.28%, 01/08/19			4,000			3,998,502
2.31%, 01/15/19			2,000			1,998,358
2.35%, 01/22/19			750			749,041
Total U.S. Treasury Obligations — 3.9% (Cost: $6,745,408)						6,745,901

CONSOLIDATED SCHEDULES OF INVESTMENTS 69

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation Portfolio (Percentages shown are based on Net Assets)

Security	Par (000)		Value
Total Short-Term Securities — 7.5% (Cost: $12,976,183)			$	13,060,256
Total Options Purchased — 0.2% (Cost: $962,935)				426,631
Total Investments Before Options Written and Investments Sold Short — 101.8% (Cost: $182,009,834)				177,220,784
Total Options Written — (0.8)% (Premiums Received — $880,316)				(1,355,470	)
	Shares
Investments Sold Short — (0.2)%
Common Stocks — (0.2)%
France — (0.1)%
Pernod Ricard SA		600		(98,472	)
Japan — (0.1)%
SUMCO Corp.		9,800		(109,143	)
Yaskawa Electric Corp.		4,800		(117,332	)
				(226,475	)
United States — 0.0%
LyondellBasell Industries NV, Class A		735		(61,122	)
Total Common Stocks — (0.2)% (Proceeds: $491,633)				(386,069	)
Total Investments Sold Short — (0.2)% (Proceeds: $491,633)				(386,069	)
Total Investments Net of Options Written and Investments Sold Short — 100.8% (Cost: $180,637,885)				175,479,245
Liabilities in Excess of Other Assets — (0.8)%				(1,496,183	)
Net Assets — 100.0%			$	173,983,062

^(a)  Non-income producing security.

^(b)  Restricted security as to resale, excluding 144A securities. The Fund held restricted securities with a current value of $1,936,743, representing 1.11% of its net assets as of period end, and an original cost of $1,715,462.

^(c)  Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy.

^(d) Security, or a portion of the security, is on loan.

^(e) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

^(f) A security contractually bound to one or more other securities to form a single saleable unit which cannot be sold separately.

^(g) All or a portion of the security has been pledged and/or segregated as collateral in connection with outstanding exchange-traded options written.

^(h) Payment-in-kind security which may pay interest/dividends in additional par/shares and/or in cash. Rates shown are the current rate and possible payment rates.

⁽ⁱ⁾ Issuer filed for bankruptcy and/or is in default.

^(j) Convertible security.

^(k) Zero-coupon bond.

^(l) Variable rate security. Security may be issued at a fixed coupon rate, which converts to a variable rate at a specified date. Rate shown is the rate in effect as of period end.

^(m)  Variable rate security. Rate shown is the rate in effect as of period end.

⁽ⁿ⁾  All or a portion of the security is held by a wholly-owned subsidiary. See Note 1 of the Notes to Financial Statements for details on the wholly-owned subsidiary.

^(o)  Perpetual security with no stated maturity date.

^(p)  All or a portion of the security has been pledged in connection with outstanding centrally cleared swaps.

^(q)  Rates are discount rates or a range of discount rates as of period end.

^(r)  Annualized 7-day yield as of period end.

^(s)  Security was purchased with the cash collateral from loaned securities.

^(t)  Amount is less than $500.

^(u)  During the year ended December 31, 2018, investments in issuers considered to be affiliates of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, and/or related parties of the Fund were as follows:

Affiliated Persons and/or Related Parties	Shares Held at 12/31/17		Shares Purchased		Shares Sold			Shares Held at 12/31/18		Value at 12/31/18		Income			Net Realized Gain (Loss)(a)		Change in Unrealized Appreciation (Depreciation)
BlackRock Liquidity Funds, T-Fund, Institutional Class		8,343,679		—		(7,771,295	)(b)		572,384	$	572,384	$	53,944		$	—	$	—
SL Liquidity Series, LLC, Money Market Series		4,119,672		—		(1,901,942	)(b)		2,217,730		2,217,509		18,967	(c)		1,209		43
iShares Gold Trust		55,980		70,092		—			126,072		1,549,425		—			—		(55,469	)
										$	4,339,318	$	72,911		$	1,209	$	(55,426	)

^(a)  Includes capital gain distribution, if applicable.

^(b)  Represents net shares sold.

^(c)  Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

70 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation Portfolio

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

Description	Number of Contracts		Expiration Date		Notional Amount (000)		Value/ Unrealized Appreciation (Depreciation)
Short Contracts
Yen Denominated Nikkei 225 Index		4		03/07/19		362	$	16,077
EURO STOXX 50 Index		105		03/15/19		3,578		100,439
NASDAQ 100 E-mini Index		6		03/15/19		760		17,815
S&P 500 E-Mini Index		5		03/15/19		626		699
Canada 10 Year Bond		15		03/20/19		1,503		(18,093	)
							$	116,937

Forward Foreign Currency Exchange Contracts

Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
JPY	19,999	USD	181	UBS AG		01/04/19	$	1
JPY	346,829	USD	3,142	UBS AG		01/07/19		24
JPY	102,493,612	USD	923,000	JPMorgan Chase Bank NA		01/25/19		13,832
USD	307,698	AUD	435,000	JPMorgan Chase Bank NA		01/25/19		1,161
JPY	102,108,000	USD	914,225	Citibank NA		01/31/19		19,524
JPY	156,520,000	USD	1,392,112	JPMorgan Chase Bank NA		02/14/19		40,700
EUR	406,000	USD	463,863	Goldman Sachs International		02/15/19		3,026
EUR	400,000	USD	455,155	Morgan Stanley & Co. International plc		02/28/19		5,299
JPY	62,120,993	USD	550,000	Morgan Stanley & Co. International plc		03/07/19		19,575
EUR	393,000	USD	447,007	Morgan Stanley & Co. International plc		03/14/19		5,936
SEK	8,174,948	EUR	791,000	Bank of America NA		03/21/19		15,919
								124,997
GBP	635,000	USD	828,977	JPMorgan Chase Bank NA		01/11/19		(19,287	)
EUR	401,000	USD	460,818	Morgan Stanley & Co. International plc		01/25/19		(482	)
USD	995,123	JPY	110,300,000	Morgan Stanley & Co. International plc		01/28/19		(13,301	)
NOK	3,032,000	USD	365,816	JPMorgan Chase Bank NA		02/01/19		(14,655	)
USD	986,958	JPY	110,400,000	Goldman Sachs International		02/04/19		(22,926	)
GBP	718,000	USD	939,894	JPMorgan Chase Bank NA		02/15/19		(22,750	)
USD	466,825	EUR	406,000	Morgan Stanley & Co. International plc		02/15/19		(63	)
GBP	375,000	USD	490,920	JPMorgan Chase Bank NA		02/21/19		(11,781	)
USD	459,068	EUR	400,000	Deutsche Bank AG		02/28/19		(1,387	)
USD	506,348	BRL	1,974,000	Deutsche Bank AG		03/01/19		(796	)
USD	1,023,408	JPY	114,050,000	Goldman Sachs International		03/04/19		(21,995	)
USD	450,646	EUR	393,000	Morgan Stanley & Co. International plc		03/14/19		(2,297	)
ZAR	7,840,000	USD	547,289	BNP Paribas SA		03/14/19		(6,957	)
USD	439,817	JPY	48,400,000	JPMorgan Chase Bank NA		03/25/19		(4,716	)
								(143,393	)
	Net Unrealized Depreciation						$	(18,396	)

CONSOLIDATED SCHEDULES OF INVESTMENTS 71

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation Portfolio

OTC Options Purchased

Description	Counterparty	Number of Contracts	Expiration Date		Exercise Price			Notional Amount (000)			Value
Call
Chevron Corp.	UBS AG	5,390		01/18/19		USD	125.00		USD	586	$	189
Exxon Mobil Corp.	UBS AG	3,664		01/18/19		USD	95.00		USD	250		55
Schlumberger Ltd.	UBS AG	5,304		01/18/19		USD	90.00		USD	191		26
SPDR Gold Shares(a)	JPMorgan Chase Bank NA	2,851		02/15/19		USD	120.00		USD	346		8,140
TOPIX Index	Morgan Stanley & Co. International plc	38,681		03/08/19		JPY	1,785.00		JPY	57,793		293
KOSPI 200 Index	Goldman Sachs International	2		03/14/19		USD	302.50		USD	5		444
Russell 2000 Index	Bank of America NA	537		03/15/19		USD	1,700.00		USD	724		148
SPDR Gold Shares(a)	Societe Generale SA	5,092		03/15/19		USD	121.00		USD	617		16,164
SPDR Gold Shares(a)	Societe Generale SA	5,338		04/18/19		USD	123.00		USD	647		16,281
GBP Currency	UBS AG	—		05/15/19		USD	1.32		GBP	2,843		67,239
SPDR Gold Shares(a)	Morgan Stanley & Co. International plc	2,871		05/17/19		USD	120.00		USD	348		12,197
BP plc	UBS AG	17,142		06/21/19		USD	52.00		USD	650		1,457
ConocoPhillips Co.	UBS AG	9,003		06/21/19		USD	75.00		USD	561		11,209
Occidental Petroleum Corp.	UBS AG	7,980		06/21/19		USD	92.50		USD	490		1,608
Royal Dutch Shell plc	UBS AG	9,785		06/21/19		USD	77.00		USD	570		1,566
SPDR Gold Shares(a)	Societe Generale SA	5,092		06/21/19		USD	124.00		USD	617		20,674
Suncor Energy, Inc.	UBS AG	11,597		06/21/19		USD	45.00		USD	324		290
Facebook, Inc.	UBS AG	5,568		09/20/19		USD	165.00		USD	730		31,020
TOTAL SA	UBS AG	12,113		09/20/19		USD	70.00		USD	632		1,551
TOPIX Banks Index	Bank of America NA	134,228		12/13/19		JPY	191.28		JPY	19,695		1,816
TOPIX Banks Index	Morgan Stanley & Co. International plc	254,099		12/13/19		JPY	191.28		JPY	37,284		3,438
Alphabet, Inc.	JPMorgan Chase Bank NA	324		01/17/20		USD	1,225.00		USD	336		18,720
Anadarko Petroleum Corp.	Credit Suisse International	3,417		01/17/20		USD	67.50		USD	150		5,433
BP plc	Nomura International plc	15,600		01/17/20		USD	43.50		USD	592		24,380
CVS Health Corp.	JPMorgan Chase Bank NA	2,397		01/17/20		USD	78.50		USD	157		8,883
Halliburton Co.	Citibank NA	6,585		01/17/20		USD	50.00		USD	175		1,119
Johnson & Johnson	Bank of America NA	2,430		01/17/20		USD	155.00		USD	314		6,282
JPMorgan Chase & Co.	Citibank NA	2,402		01/17/20		USD	114.50		USD	234		7,995
Schlumberger Ltd.	UBS AG	5,511		01/17/20		USD	70.00		USD	199		661
Sumitomo Mitsui Financial Group, Inc.	Morgan Stanley & Co. International plc	6,991		03/13/20		JPY	4,756.33		JPY	25,482		2,881
TOPIX Banks Index	BNP Paribas SA	181,254		03/13/20		JPY	194.04		JPY	26,595		2,939
TOPIX Banks Index	Morgan Stanley & Co. International plc	161,095		04/10/20		JPY	192.04		JPY	23,637		3,022
Sumitomo Mitsui Financial Group, Inc.	Morgan Stanley & Co. International plc	5,643		09/11/20		JPY	4,816.24		JPY	20,569		2,983
Sumitomo Mitsui Financial Group, Inc.	Morgan Stanley & Co. International plc	5,646		12/11/20		JPY	4,894.87		JPY	20,580		2,969
EURO STOXX Bank Index	Barclays Bank plc	3,161		03/19/21		EUR	136.97		EUR	952		3,149
EURO STOXX Bank Index	UBS AG	3,260		06/18/21		EUR	134.92		EUR	982		3,343
												290,564
Put
S&P 500 Index	Barclays Bank plc	71		01/18/19		USD	2,350.00		USD	178	$	948
S&P 500 Index	Barclays Bank plc	86		01/18/19		USD	2,400.00		USD	216		1,724
S&P 500 Index	Barclays Bank plc	669		01/18/19		USD	2,700.00		USD	1,677		128,716
S&P 500 Index	Barclays Bank plc	71		01/31/19		USD	2,400.00		USD	178		2,215
												133,603
											$	424,167

^(a)  All or a portion of the security is held by a wholly-owned subsidiary. See Note 1 of the Notes to Financial Statements for details on the wholly-owned subsidiary.

OTC Interest Rate Swaptions Purchased

Paid by the Fund

Received by the Fund

Counterparty

Expiration Date

Exercise Rate

Notional Amount (000)

Value

Description

Rate

Frequency

Rate

Frequency

Put

5-Year Interest Rate Swap

3.00

%

Semi-Annual

3 month LIBOR

Quarterly

Nomura International plc

03/04/19

3.00

%

USD  5,694

$

2,464

72 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation Portfolio

Exchange-Traded Options Written

Description	Number of Contracts		Expiration Date		Exercise Price		Notional Amount (000)		Value
Call
McDonald’s Corp.		1		01/18/19	USD	185.00	USD	18	$	(88)
Amazon.com, Inc.		2		02/15/19	USD	1,790.00	USD	300		(3,070	)
Amazon.com, Inc.		2		02/15/19	USD	1,780.00	USD	300		(3,460	)
Amazon.com, Inc.		2		02/15/19	USD	1,800.00	USD	300		(2,770	)
									$	(9,388	)

OTC Options Written

Description	Counterparty	Number of Contracts		Expiration Date		Exercise Price			Notional Amount (000)			Value
Call
Apple, Inc.	Barclays Bank plc		1,364		01/18/19		USD	160.00		USD	215	$	(5,763)
Microsoft Corp.	Barclays Bank plc		2,417		01/18/19		USD	90.00		USD	245		(29,125	)
United Continental Holdings, Inc.	Deutsche Bank AG		1,754		01/18/19		USD	75.00		USD	147		(16,137	)
TOPIX Index	Morgan Stanley & Co. International plc		38,681		03/08/19		JPY	1,950.00		JPY	57,793		(71	)
KOSPI 200 Index	Goldman Sachs International		2		03/14/19		USD	327.50		USD	5		(32	)
ConocoPhillips Co.	UBS AG		9,003		06/21/19		USD	85.00		USD	561		(2,071	)
TOTAL SA	UBS AG		12,113		09/20/19		USD	75.00		USD	632		(2,315	)
TOPIX Banks Index	Bank of America NA		134,228		12/13/19		JPY	221.29		JPY	19,695		(519	)
TOPIX Banks Index	Morgan Stanley & Co. International plc		254,099		12/13/19		JPY	221.29		JPY	37,284		(982	)
Alphabet, Inc.	JPMorgan Chase Bank NA		324		01/17/20		USD	1,350.00		USD	336		(9,491	)
Anadarko Petroleum Corp.	Credit Suisse International		3,417		01/17/20		USD	76.00		USD	150		(2,932	)
Comcast Corp.	Citibank NA		5,994		01/17/20		USD	37.50		USD	204		(14,266	)
CVS Health Corp.	JPMorgan Chase Bank NA		2,397		01/17/20		USD	87.50		USD	157		(3,571	)
Facebook, Inc.	UBS AG		13,009		01/17/20		USD	220.00		USD	1,705		(17,237	)
Johnson & Johnson	Bank of America NA		2,430		01/17/20		USD	170.00		USD	314		(2,150	)
JPMorgan Chase & Co.	Citibank NA		2,402		01/17/20		USD	125.50		USD	234		(3,555	)
Sumitomo Mitsui Financial Group, Inc.	Morgan Stanley & Co. International plc		6,991		03/13/20		JPY	5,679.90		JPY	25,482		(732	)
TOPIX Banks Index	BNP Paribas SA		181,254		03/13/20		JPY	237.47		JPY	26,595		(642	)
TOPIX Banks Index	Morgan Stanley & Co. International plc		161,095		04/10/20		JPY	233.87		JPY	23,637		(717	)
													(112,308	)
Put
S&P 500 Index	Barclays Bank plc		71		01/18/19		USD	2,200.00		USD	178		(246	)
S&P 500 Index	Barclays Bank plc		86		01/18/19		USD	2,250.00		USD	216		(473	)
S&P 500 Index	Barclays Bank plc		71		01/31/19		USD	2,250.00		USD	178		(753	)
TOPIX Index	Morgan Stanley & Co. International plc		38,681		03/08/19		JPY	1,600.00		JPY	57,793		(44,290	)
KOSPI 200 Index	Goldman Sachs International		2		03/14/19		USD	270.00		USD	5		(33,315	)
S&P 500 Index	Bank of America NA		284		03/15/19		USD	2,600.00		USD	712		(40,172	)
SPDR Gold Shares(a)	Morgan Stanley & Co. International plc		1,435		05/17/19		USD	113.00		USD	174		(378	)
TOPIX Banks Index	Bank of America NA		134,228		12/13/19		JPY	156.59		JPY	19,695		(27,105	)
TOPIX Banks Index	Morgan Stanley & Co. International plc		254,099		12/13/19		JPY	156.59		JPY	37,284		(51,308	)
Alphabet, Inc.	JPMorgan Chase Bank NA		324		01/17/20		USD	860.00		USD	336		(14,693	)
Anadarko Petroleum Corp.	Credit Suisse International		3,417		01/17/20		USD	46.00		USD	150		(29,809	)
BP plc	Nomura International plc		15,600		01/17/20		USD	28.00		USD	592		(16,770	)
CVS Health Corp.	JPMorgan Chase Bank NA		2,397		01/17/20		USD	56.00		USD	157		(9,453	)
Facebook, Inc.	UBS AG		13,009		01/17/20		USD	155.00		USD	1,705		(399,701	)
Halliburton Co.	Citibank NA		6,585		01/17/20		USD	35.00		USD	175		(62,887	)
Johnson & Johnson	Bank of America NA		2,430		01/17/20		USD	109.00		USD	314		(11,202	)
JPMorgan Chase & Co.	Citibank NA		2,402		01/17/20		USD	87.25		USD	234		(15,121	)
Schlumberger Ltd.	UBS AG		5,511		01/17/20		USD	52.50		USD	199		(96,718	)
Sumitomo Mitsui Financial Group, Inc.	Morgan Stanley & Co. International plc		6,991		03/13/20		JPY	3,832.77		JPY	25,482		(34,287	)
TOPIX Banks Index	BNP Paribas SA		181,254		03/13/20		JPY	155.80		JPY	26,595		(39,256	)
TOPIX Banks Index	Morgan Stanley & Co. International plc		161,095		04/10/20		JPY	157.82		JPY	23,637		(37,897	)
Sumitomo Mitsui Financial Group, Inc.	Morgan Stanley & Co. International plc		3,762		09/11/20		JPY	3,820.96		JPY	13,712		(23,197	)
Sumitomo Mitsui Financial Group, Inc.	Morgan Stanley & Co. International plc		3,764		12/11/20		JPY	3,786.60		JPY	13,720		(22,394	)
EURO STOXX Bank Index	Barclays Bank plc		2,107		03/19/21		EUR	110.23		EUR	635		(86,101	)
EURO STOXX Bank Index	UBS AG		2,144		06/18/21		EUR	106.38		EUR	646		(86,077	)
													(1,183,603	)
												$	(1,295,911)

^(a)  All or a portion of the security is held by a wholly-owned subsidiary. See Note 1 of the Notes to Financial Statements for details on the wholly-owned subsidiary.

CONSOLIDATED SCHEDULES OF INVESTMENTS 73

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation Portfolio

OTC Interest Rate Swaptions Written

Description

Paid by the Fund

Received by the Fund

Counterparty

Expiration

Exercise

Notional

Value

Rate

Frequency

Rate

Frequency

Date

Rate

Amount (000)

Call

5-Year Interest Rate Swap

3 month LIBOR

Quarterly

2.70

%

Semi-Annual

Nomura International plc

03/04/19

2.70

%

USD

5,694

$

(50,171)

Centrally Cleared Credit Default Swaps — Buy Protection

Reference Obligation/Index	Financing Rate Paid by the Fund			Payment Frequency		Termination Date		Notional Amount (000)		Value			Upfront Premium Paid (Received)			Unrealized Appreciation (Depreciation)
CDX.NA.HY.30.V1		5.00	%		Quarterly		06/20/23		USD    175	$	(5,681	)	$	(11,509	)	$	5,828

Centrally Cleared Interest Rate Swaps

Paid by the Fund		Received by the Fund		Effective Date			Termination Date		Notional Amount(000)		Value			Upfront Premium Paid (Received)		Unrealized Appreciation (Depreciation)
Rate	Frequency	Rate	Frequency
3 month LIBOR	Quarterly	2.97%	Semi-Annual		07/20/20	(a)		07/18/25	USD	6,141	$	105,254		$	—	$	105,254
0.84%	Annual	6 month EURIBOR	Semi-Annual		N/A			02/15/28	EUR	660		(12,182	)		—		(12,182	)
0.84%	Annual	6 month EURIBOR	Semi-Annual		N/A			02/15/28	EUR	729		(13,465	)		—		(13,465	)
0.99%	Annual	6 month EURIBOR	Semi-Annual		N/A			10/29/28	EUR	3,805		(90,616	)		—		(90,616	)
3 month LIBOR	Quarterly	3.20%	Semi-Annual		N/A			10/29/28	USD	4,806		212,798			—		212,798
2.99%	Semi-Annual	3 month LIBOR	Quarterly		07/20/20	(a)		07/18/50	USD	1,380		(33,283	)		—		(33,283	)
											$	168,506		$	—	$	168,506

^(a)  Forward Swap

OTC Total Return Swaps

Reference Entity	Fixed Amount Paid/(Received) by the Fund (a)				Counterparty		Termination Date		Notional Amount (000)			Value		Upfront Premium Paid (Received)		Unrealized Appreciation (Depreciation)
EURO STOXX Banks Net Return Index		EUR	(278,081	)		BNP Paribas SA		04/30/19		EUR	278	$	29,600	$	—	$	29,600
S&P 500 Index Annual Dividend Future December 2020		USD	59,969			Goldman Sachs International		12/18/20		USD	60		10,656		—		10,656
Nikkei Dividend Future December 2020		JPY	3,827,500			BNP Paribas SA		04/01/21		JPY	3,828		4,585		—		4,585
Nikkei Dividend Future December 2020		JPY	7,760,000			BNP Paribas SA		04/01/21		JPY	7,760		8,211		—		8,211
Nikkei Dividend Future December 2020		JPY	4,215,000			BNP Paribas SA		04/01/21		JPY	4,215		1,049		—		1,049
S&P 500 Index Annual Dividend Future December 2021		USD	72,825			BNP Paribas SA		12/17/21		USD	73		12,525		—		12,525
Nikkei Dividend Future December 2021		JPY	4,260,000			BNP Paribas SA		04/01/22		JPY	4,260		739		—		739
Nikkei Dividend Future December 2021		JPY	3,975,000			BNP Paribas SA		04/01/22		JPY	3,975		3,339		—		3,339
Nikkei Dividend Future December 2021		JPY	7,860,000			BNP Paribas SA		04/01/22		JPY	7,860		7,500		—		7,500
Nikkei Dividend Future December 2021		JPY	3,985,000			BNP Paribas SA		04/01/22		JPY	3,985		3,248		—		3,248
												$	81,452	$	—	$	81,452

^(a)  At termination, the fixed amount paid (received) will be exchanged for the total return of the reference entity.

74 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation Portfolio

OTC Total Return Swaps ^(a)

Reference Entity	Counterparty	Expiration Date		Net Notional Amount			Unrealized Appreciation (Depreciation)			Net Value of Reference Entities			Gross Notional Amount Net Asset Percentage
Equity Securities Long/Short	Citibank NA		02/24/23-02/27/23	$	(332,253	)	$	(10,776	)(b)	$	(343,633	)		0.2	%
	JP Morgan Chase Bank NA		02/08/23		(414,615	)		16,545	(c)		(399,055	)		0.2	%
							$	5,769		$	(742,688	)

^(a)  The Fund receives or pays the total return on a portfolio of long and short positions underlying the total return swap. In addition, the Fund pays or receives a variable rate of interest, based on a specified benchmark, plus or minus a spread in a range of 20-151 basis points. The benchmark and spread are determined based upon the country and/or currency of the individual underlying positions. The following are the specified benchmarks used in determining the variable rate of interest:

Intercontinental Exchange LIBOR

EUR 1 Week

USD 1 Week

^(b)  Amount includes $604 of net dividends and financing fees.

^(c)  Amount includes $985 of net dividends and financing fees.

The following reference rates, and their values as of period end, are used for security descriptions:

Reference Index		Reference Rate
3 month LIBOR	London Interbank Offered Rate	2.81%
6 month EURIBOR	Euro Interbank Offered Rate	(0.24%)

Balances Reported in the Statements of Assets and Liabilities for Centrally Cleared Swaps, Swaps and Options Written

	Swap Premiums Paid		Swap Premiums Received			Unrealized Appreciation		Unrealized Depreciation			Value
Centrally Cleared Swaps(a)	$	—	$	(11,509	)	$	323,880	$	(149,546	)	$	—
OTC Swaps		—		—			97,997		(10,776	)		—
Options Written		N/A		N/A			318,532		(793,686	)		(1,355,470	)

^(a)  Includes cumulative appreciation (depreciation) on centrally cleared swaps, as reported in the Consolidated Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities and is net of any previously paid (received) swap premium amounts.

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

	Commodity Contracts		Credit Contracts		Equity Contracts		Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Assets — Derivative Financial Instruments
Futures contracts
Net unrealized appreciation(a)	$	—	$	—	$	135,030	$	—	$	—	$	—	$	135,030
Forward foreign currency exchange contracts
Unrealized appreciation on forward foreign currency exchange contracts		—		—		—		124,997		—		—		124,997
Options purchased
Investments at value — unaffiliated(b)		—		—		356,928		67,239		2,464		—		426,631
Swaps — centrally cleared
Net unrealized appreciation(a)		—		5,828		—		—		318,052		—		323,880
Swaps — OTC
Unrealized appreciation on OTC swaps; Swap premiums paid		—		—		97,997		—		—		—		97,997
	$	—	$	5,828	$	589,955	$	192,236	$	320,516	$	—	$	1,108,535

CONSOLIDATED SCHEDULES OF INVESTMENTS 75

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation Portfolio

	Commodity Contracts		Credit Contracts		Equity Contracts		Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Liabilities — Derivative Financial Instruments
Futures contracts
Net unrealized depreciation(a)	$	—	$	—	$	—	$	—	$	18,093	$	—	$	18,093
Forward foreign currency exchange contracts
Unrealized depreciation on forward foreign currency exchange contracts		—		—		—		143,393		—		—		143,393
Options written
Options written, at value		—		—		1,305,299		—		50,171		—		1,355,470
Swaps — centrally cleared
Net unrealized depreciation(a)		—		—		—		—		149,546		—		149,546
Swaps — OTC
Unrealized depreciation on OTC swaps; Swap premiums received		—		—		10,776		—		—		—		10,776
	$	—	$	—	$	1,316,075	$	143,393	$	217,810	$	—	$	1,677,278

^(a) Includes cumulative appreciation (depreciation) on futures contracts and centrally cleared swaps, if any, as reported in the Consolidated Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

^(b) Includes options purchased at value as reported in the Consolidated Schedule of Investments.

For the year ended December 31, 2018, the effect of derivative financial instruments in the Statements of Operations were as follows:

	Commodity Contracts		Credit Contracts			Equity Contracts			Foreign Currency Exchange Contracts			Interest Rate Contracts			Other Contracts		Total
Net Realized Gain (Loss) from:
Futures contracts	$	—	$	—		$	16,345		$	—		$	—		$	—	$	16,345
Forward foreign currency exchange contracts		—		—			—			(267,965	)		—			—		(267,965	)
Options purchased(a)		—		—			197,511			(210,942	)		(116,264	)		—		(129,695	)
Options written		—		—			241,438			87,865			(91,885	)		—		237,418
Swaps		—		(38,636	)		405,255			47,469			(280,381	)		—		133,707
	$	—	$	(38,636	)	$	860,549		$	(343,573	)	$	(488,530	)	$	—		$ (10,190)
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts	$	—	$	—		$	139,836		$	—		$	(18,093	)	$	—	$	121,743
Forward foreign currency exchange contracts		—		—			—			(149,643	)		—			—		(149,643	)
Options purchased(b)		—		—			(670,659	)		(81,689	)		93,109			—		(659,239	)
Options written		—		—			(563,015	)		(47,379	)		(100,286	)		—		(710,680	)
Swaps		—		36,645			(363,407	)		—			4,382			—		(322,380	)
	$	—	$	36,645		$	(1,457,245	)	$	(278,711	)	$	(20,888	)	$	—	$	(1,720,199	)

^(a) Options purchased are included in net realized gain (loss) from investments — unaffiliated.

^(b) Options purchased are included in net change in unrealized appreciation (depreciation) on investments — unaffiliated.

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	248,807
Average notional value of contracts — short	$	5,011,375
Forward foreign currency exchange contracts:
Average amounts purchased — in USD	$	6,625,332
Average amounts sold — in USD	$	10,513,124
Options:
Average value of option contracts purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	544,260
Average value of option contracts written . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	864,525
Average notional value of swaption contracts purchased . . . . . . . . . . . . . . . . . . . . . .	$	12,005,716
Average notional value of swaption contracts written . . . . . . . . . . . . . . . . . . . . . . . . .	$	14,837,115
Credit default swaps:
Average notional value — buy protection	$	161,356

76 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation Portfolio

Interest rate swaps:
Average notional value — pays fixed rate	$	9,161,844
Average notional value — receives fixed rate	$	9,614,691
Currency swaps:
Average notional value — pays	$	887,441
Average notional value — receives	$	946,109
Total return swaps:
Average notional value	$	1,330,610

For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

Derivative Financial Instruments — Offsetting as of Period End

The Fund’s derivative assets and liabilities (by type) were as follows:

	Assets			Liabilities
Derivative Financial Instruments:
Futures contracts	$	4,564		$	75,756
Forward foreign currency exchange contracts		124,997			143,393
Options(a)		426,631			1,355,470
Swaps — Centrally cleared		21,934			—
Swaps — OTC(b)		97,997			10,776
Total derivative assets and liabilities in the Statements of Assets and Liabilities	$	676,123		$	1,585,395
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)		(26,498	)		(85,144	)
Total derivative assets and liabilities subject to an MNA	$	649,625		$	1,500,251

^(a) Includes options purchased at value which is included in Investments at value — unaffiliated in the Statements of Assets and Liabilities and reported in the Consolidated Schedule of Investments.

^(b) Includes unrealized appreciation (depreciation) on OTC swaps and swap premiums (paid/received) in the Statements of Assets and Liabilities.

The following tables present the Fund’s derivative assets and liabilities by counterparty net of amounts available for offset under an MNA and net of the related collateral received and pledged by the Fund:

Counterparty	Derivative Assets Subject to an MNA by Counterparty		Derivatives Available for Offset (a)			Non-cash Collateral Received		Cash Collateral Received (b)			Net Amount of Derivative Assets (c)
Bank of America NA	$	24,165	$	(24,165	)	$	—	$	—		$	—
Barclays Bank plc		136,752		(122,461	)		—		—			14,291
BNP Paribas SA		73,735		(46,855	)		—		(26,880	)		—
Citibank NA		28,638		(28,638	)		—		—			—
Credit Suisse International		5,433		(5,433	)		—		—			—
Goldman Sachs International		14,126		(14,126	)		—		—			—
JPMorgan Chase Bank NA		99,841		(99,841	)		—		—			—
JPMorgan Chase Bank NA(e)		8,140		—			—		—			8,140
Morgan Stanley & Co. International plc		46,396		(46,396	)		—		—			—
Morgan Stanley & Co. International plc(e)		12,197		(378	)		—		—			11,819
Nomura International plc		26,844		(26,844	)		—		—			—
Societe Generale SA(e)		53,119		—			—		—			53,119
UBS AG		120,239		(120,239	)		—		—			—
	$	649,625	$	(535,376	)	$	—	$	(26,880	)	$	87,369

CONSOLIDATED SCHEDULES OF INVESTMENTS 77

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation Portfolio

Counterparty	Derivative Liabilities Subject to an MNA by Counterparty		Derivatives Available for Offset (a)			Non-cash Collateral Pledged			Cash Collateral Pledged		Net Amount of Derivative Liabilities (d)
Bank of America NA	$	81,148	$	(24,165	)	$	—		$	—	$	56,983
Barclays Bank plc		122,461		(122,461	)		—			—		—
BNP Paribas SA		46,855		(46,855	)		—			—		—
Citibank NA		106,605		(28,638	)		—			—		77,967
Credit Suisse International		32,741		(5,433	)		—			—		27,308
Deutsche Bank AG		18,320		—			—			—		18,320
Goldman Sachs International		78,268		(14,126	)		—			—		64,142
JPMorgan Chase Bank NA		110,397		(99,841	)		—			—		10,556
Morgan Stanley & Co. International plc		232,018		(46,396	)		—			—		185,622
Morgan Stanley & Co. International plc(e)		378		(378	)		—			—		—
Nomura International plc		66,941		(26,844	)		—			—		40,097
UBS AG		604,119		(120,239	)		(432,629	)		—		51,251
	$	1,500,251	$	(535,376	)	$	(432,629	)	$	—	$	532,246

^(a) The amount of derivatives available for offset is limited to the amount of derivative assets and/or liabilities that are subject to an MNA.

^(b) Excess of collateral received from the individual counterparty is not shown for financial reporting purposes.

^(c) Net amount represents the net amount receivable from the counterparty in the event of default.

^(d) Net amount represents the net amount payable due to the counterparty in the event of default.

^(e) Represents derivatives owned by the BlackRock Cayman Global Allocation Portfolio. Fund I, Ltd., a wholly-owed subsidiary of the Fund. See Note 1.

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:

	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Long-Term Investments:
Common Stocks:
Australia	$	1,927	$	145,089	$	117,229	$	264,245
Belgium		—		409,306		—		409,306
Brazil		1,250,131		—		—		1,250,131
Canada		2,535,934		—		—		2,535,934
China		467,224		2,116,312		—		2,583,536
Czech Republic		—		75,615		—		75,615
Denmark		—		157,055		—		157,055
Finland		—		16,243		—		16,243
France		788,227		3,947,761		—		4,735,988
Germany		554,706		1,722,212		—		2,276,918
Hong Kong		—		1,602,067		—		1,602,067
India		—		2,102,880		—		2,102,880
Indonesia		—		64,381		—		64,381
Italy		190,115		768,534		—		958,649
Japan		—		13,447,924		—		13,447,924
Macau		—		8,061		—		8,061
Malaysia		—		29,980		—		29,980
Mexico		11,592		—		—		11,592
Netherlands		659,518		3,275,076		—		3,934,594
Norway		—		4,158		—		4,158
Peru		1,323		—		—		1,323
Poland		—		4,877		—		4,877
Portugal		—		188,056		—		188,056
Singapore		—		962,041		—		962,041
South Africa		—		25,584		—		25,584
South Korea		53,726		1,118,917		—		1,172,643
Spain		—		618,500		—		618,500
Sweden		—		27,613		—		27,613
Switzerland		—		1,593,142		—		1,593,142
Taiwan		—		1,493,836		—		1,493,836
Thailand		—		339,403		—		339,403

78 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation Portfolio

	Level 1			Level 2			Level 3		Total
Turkey	$	—		$	7,743		$	—	$	7,743
United Arab Emirates		—			666,684			—		666,684
United Kingdom		417,599			2,404,055			—		2,821,654
United States		55,033,399			72,932			83,667		55,189,998
Corporate Bonds:
Australia		—			—			781,347		781,347
Belgium		—			204,514			—		204,514
Chile		—			3,326			—		3,326
China		—			3,000			—		3,000
France		—			190,138			—		190,138
Germany		—			262,850			—		262,850
Japan		—			417,208			—		417,208
Luxembourg		—			38,110			—		38,110
Netherlands		—			199,879			—		199,879
Singapore		—			177,652			—		177,652
Turkey		—			—			124,000		124,000
United Kingdom		—			195,731			—		195,731
United States		—			5,498,416			—		5,498,416
Floating Rate Loan Interests		—			320,913			—		320,913
Foreign Government Obligations		—			4,861,496			—		4,861,496
Investment Companies		2,252,205			—			—		2,252,205
Preferred Securities:
Brazil		97,210			—			—		97,210
China		—			413,913			—		413,913
South Korea		—			12,258			—		12,258
United Kingdom		—			535,707			—		535,707
United States		563,243			979,367			1,746,553		3,289,163
U.S. Treasury Obligations		—			42,272,507			—		42,272,507
Short-Term Securities:
Foreign Government Obligations		—			3,496,413			—		3,496,413
Money Market Funds		572,384			—			—		572,384
Time Deposits		—			28,049			—		28,049
U.S. Treasury Obligations		—			6,745,901			—		6,745,901
Options Purchased:
Equity contracts		—			356,928			—		356,928
Foreign currency exchange contracts		—			67,239			—		67,239
Interest rate contracts		—			2,464			—		2,464
Liabilities:
Investment Sold Short
Common Stocks:
France		—			(98,472	)		—		(98,472	)
Japan		—			(226,475	)		—		(226,475	)
United States		(61,122	)		—			—		(61,122	)
Subtotal	$	65,389,341		$	106,375,069		$	2,852,796	$	174,617,206
Investments valued at NAV(a)										2,217,509
Total Investments									$	176,834,715
Derivative Financial Instruments(b)
Assets:
Credit contracts	$	—		$	5,828		$	—	$	5,828
Equity contracts		135,030			97,997			—		233,027
Foreign currency exchange contracts		—			124,997			—		124,997
Interest rate contracts		—			318,052			—		318,052
Liabilities:
Equity contracts		(9,388	)		(1,306,687	)		—		(1,316,075	)
Foreign currency exchange contracts		—			(143,393	)		—		(143,393	)
Interest rate contracts		(18,093	)		(199,717	)		—		(217,810	)
	$	107,549		$	(1,102,923	)	$	—	$	(995,374	)

^(a) As of December 31, 2018, certain investments of the Fund were fair valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

^(b) Derivative financial instruments are swaps, futures contracts, forward foreign currency exchange contracts, and options written. Swaps, futures contracts and forward foreign currency exchange contracts are valued at the unrealized appreciation (depreciation) on the instrument and options written are shown at value.

CONSOLIDATED SCHEDULES OF INVESTMENTS 79

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation Portfolio

Transfers between Level 1 and Level 2 were as follows:         

	Transfers Out of Level 1(a)		Transfers Into Level 2(a)
Assets:
Investments:
Common Stocks:
Czech Republic	$	87,740	$	87,740
Hong Kong		199,749		199,749
India		1,395		1,395
Japan		5,627		5,627
Poland		1,097		1,097
Portugal		206,795		206,795
South Korea		462,530		462,530
Taiwan		361,793		361,793
Thailand		151,715		151,715
United Arab Emirates		784,100		784,100
United Kingdom		313,532		313,532
	$	2,576,073	$	2,576,073

^(a) External pricing service used to reflect any significant market movements between the time the Fund valued such foreign securities and the earlier closing of foreign markets. See notes to financial statements.    

A reconciliation of Level 3 investments is presented when the Fund had a significant amount of Level 3 investments at the beginning and/or end of the year in relation to net assets. The following table is a reconciliation of Level 3 investments for which significant unobservable inputs were used in determining fair value:

	Common Stocks			Corporate Bonds			Preferred Securities			Warrants			Total
Investments:
Assets:
Opening Balance, as of December 31, 2017	$	9,808		$	225,617		$	2,338,429		$	1		$	2,573,855
Transfers into Level 3		—			—			—			—			—
Transfers out of Level 3		—			(1,500	)		(866,832	)		—			(868,332	)
Accrued discounts/premiums		—			(2,635	)		—			—			(2,635	)
Net realized gain (loss)		—			(982,547	)		—			—			(982,547	)
Net change in unrealized appreciation (depreciation)(a)(b)		(87,886	)		831,630			223,843			(1	)		967,586
Purchases		278,974			834,782			51,113			—			1,164,869
Sales		—			—			—			—			—
Closing Balance, as of December 31, 2018	$	200,896		$	905,347		$	1,746,553		$	—		$	2,852,796
Net change in unrealized appreciation (depreciation) on investments still held at December 31, 2018(b)	$	(87,886	)	$	(136,320	)	$	223,843		$	—		$	(363	)

^(a)  Included in the related net change in unrealized appreciation (depreciation) in the Statements of Operations.

^(b)  Any difference between net change in unrealized appreciation (depreciation) and net change in unrealized appreciation (depreciation) on investments still held at December 31, 2018 is generally due to investments no longer held or categorized as Level 3 at period end.

The Fund’s investments that are categorized as Level 3 were valued utilizing third party pricing information without adjustment. Such valuations are based on unobservable inputs. A significant change in third party information could result in a significantly lower or higher value of such Level 3 investments.

80 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Consolidated Schedule of Investments  (continued) December 31, 2018 BlackRock Global Allocation Portfolio

The following table summarizes the valuation approaches used and unobservable inputs utilized by the BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) to determine the value of certain of the Fund’s Level 3 investments as of period end. The table does not include Level 3 investments with values based upon unadjusted third party pricing information in the amount of $83,638. A significant change in the third party information could result in a significantly lower or higher value of such Level 3 investments.

	Value		Valuation Approach	Unobservable Inputs	Range of Unobservable Inputs Utilized		Weighted Average of Unobservable Inputs
Common Stocks	$	117,258	Market	Revenue Multiple(a)		3.50x		—
				Time to Exit(a)		0.5 years		—
				Volatility(a)		44%		—
			Income	Discount Rate(b)		15%		—
Corporate Bonds		905,347	Income	Discount Rate(b)		15% - 38%		18%
Preferred Stocks(c)		1,746,553	Market	Recent Transactions(a)		—		—
				Revenue Multiple(a)		3.50x - 14.25x		7.43x
				Time to Exit(b)		0.5 years		—
				Volatility(b)		44%		—
	$	2,769,158

^(a)  Increase in unobservable input may result in a significant increase to value, while a decrease in unobservable input may result in a significant decrease to value.

^(b)  Decrease in unobservable input may result in a significant increase to value, while an increase in unobservable input may result in a significant decrease to value.

^(c)  For the year ended December 31, 2018, the valuation technique for investments classified as preferred stocks amounting to $1,213,830 changed to Current Value. The investments were previously valued utilizing Transaction Price. The change was due to consideration of the information that was available at the time the investments were valued.

See notes to financial statements.

CONSOLIDATED SCHEDULES OF INVESTMENTS 81

Schedule of Investments December 31, 2018 BlackRock Government Money Market Portfolio (Percentages shown are based on Net Assets)

Security	Par (000)			Value
U.S. Government Sponsored Agency Obligations — 47.3%
Federal Farm Credit Bank Discount Notes(a):
2.09%, 01/15/19		USD	1,995	$	1,993,231
2.11%, 01/16/19			1,380		1,378,770
2.30%, 02/04/19			780		778,372
2.39%, 03/11/19			745		741,830
2.40%, 03/19/19			745		741,447
2.44%, 04/12/19			200		198,754
2.50%, 06/17/19			765		756,483
2.51%, 06/28/19			530		523,684
2.52%, 07/23/19			1,175		1,158,351
2.52%, 07/29/19			3,080		3,033,741
2.55%, 08/15/19			720		709,152
2.56%, 09/12/19			495		485,885
Federal Farm Credit Bank Variable Rate Notes(b):
(LIBOR USD 1 Month - 0.05%), 2.33%, 02/07/20			1,545		1,544,983
(LIBOR USD 1 Month + 0.00%), 2.47%, 06/19/20			1,000		1,000,683
(LIBOR USD 1 Month - 0.05%), 2.41%, 08/17/20			455		455,000
(LIBOR USD 1 Month - 0.04%), 2.36%, 09/11/20			545		544,972
(LIBOR USD 1 Month + 0.03%), 2.47%, 12/14/20			685		684,945
Federal Home Loan Bank Discount Notes(a):
1.21%, 01/04/19			525		524,907
1.88%, 01/09/19			1,885		1,884,045
1.98%, 01/11/19			1,900		1,898,784
2.11%, 01/16/19			3,250		3,246,860
2.21%, 01/23/19			430		429,384
2.25%, 01/29/19			210		209,637
2.30%, 02/05/19			430		429,020
2.31%, 02/06/19			640		638,496
2.32%, 02/11/19			1,305		1,301,486
2.33%, 02/13/19			300		299,147
2.33%, 02/15/19			810		807,602
2.35%, 02/20/19			360		358,810
2.39%, 03/06/19			200		199,201
2.40%, 03/20/19			1,250		1,243,714
2.41%, 03/27/19			5,000		4,971,348
2.50%, 06/21/19			735		726,307
Federal Home Loan Bank Variable Rate Notes(b):
(LIBOR USD 1 Month - 0.09%), 2.42%, 01/25/19			845		845,000
(LIBOR USD 1 Month - 0.13%), 2.38%, 01/28/19			495		495,000
(LIBOR USD 1 Month - 0.13%), 2.22%, 02/01/19			855		855,000
(LIBOR USD 1 Month - 0.12%), 2.39%, 02/25/19			810		810,000
(LIBOR USD 1 Month - 0.12%), 2.39%, 03/25/19			1,700		1,700,000
(LIBOR USD 1 Month - 0.09%), 2.29%, 04/05/19			3,000		3,000,000
(LIBOR USD 3 Month - 0.16%), 2.62%, 06/12/19			340		339,961
(LIBOR USD 1 Month - 0.09%), 2.35%, 06/14/19			1,620		1,620,000
(LIBOR USD 3 Month - 0.16%), 2.63%, 06/20/19			855		855,000
2.50%, 06/21/19			225		225,000
(LIBOR USD 1 Month - 0.08%), 2.32%, 07/11/19			1,760		1,760,000
(LIBOR USD 1 Month - 0.11%), 2.36%, 07/19/19			2,095		2,095,000
(LIBOR USD 1 Month - 0.08%), 2.43%, 08/27/19			785		785,000
(LIBOR USD 1 Month - 0.09%), 2.30%, 09/09/19			1,655		1,655,000
(LIBOR USD 1 Month - 0.07%), 2.39%, 09/17/19			630		630,000
(LIBOR USD 3 Month - 0.14%), 2.66%, 12/19/19			430		430,000
(LIBOR USD 1 Month - 0.06%), 2.44%, 02/24/20			1,180		1,180,000
(LIBOR USD 1 Month - 0.04%), 2.41%, 04/17/20			1,805		1,804,773
(LIBOR USD 3 Month - 0.14%), 2.31%, 04/20/20			2,000		2,000,000
Federal Home Loan Mortgage Corp. Variable Rate Notes, (LIBOR USD 1 Month - 0.10%), 2.29%, 08/08/19(b)			965		964,713
Federal National Mortgage Association Discount Notes, 1.88%, 01/09/19(a)			1,485		1,484,261
Federal National Mortgage Association Notes, 0.88%, 08/02/19			730		722,666
Total U.S. Government Sponsored Agency Obligations — 47.3% (Cost: $62,155,405)					62,155,405

Security	Par (000)			Value
U.S. Treasury Obligations — 11.3%
U.S. Treasury Bills(a):
2.05%, 01/17/19		USD	7,305	$	7,298,034
2.28%, 02/07/19			2,130		2,125,228
2.31%, 02/21/19			965		962,013
U.S. Treasury Notes:
1.13%, 01/31/19			60		59,948
1.25%, 01/31/19			60		59,955
(US Treasury 3 Month Bill Money Market Yield + 0.14%), 2.57%, 01/31/19(b)			3,000		3,000,000
(US Treasury 3 Month Bill Money Market Yield + 0.05%), 2.47%, 10/31/20(b)			1,300		1,297,519
Total U.S. Treasury Obligations — 11.3% (Cost: $14,802,697)					14,802,697
Total Repurchase Agreements — 37.8% (Cost: $49,700,000)					49,700,000
Total Investments — 96.4% (Cost: $126,658,102)(c)					126,658,102
Other Assets Less Liabilities — 3.6%					4,702,498
Net Assets — 100.0%				$	131,360,600

^(a)  Rates are discount rates or a range of discount rates as of period end.

^(b)  Variable rate security. Rate shown is the rate in effect as of period end.

^(c)  Cost for U.S. federal income tax purposes.

82 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Government Money Market Portfolio

Repurchase Agreements

	Repurchase Agreements												Collateral
Counterparty	Coupon Rate			Purchase Date		Maturity Date		Par (000)		At Value (000)		Proceeds Including Interest	Position	Original Par	Position Received, At Value
Bank of Montreal		2.90	%		12/31/18		01/02/19	$	1,500	$	1,500	$1,500,242	U.S. Government Sponsored Agency Obligations and U.S. Treasury Obligations, 0.63% to 5.00%, due 02/28/19 to 08/15/48	$4,551,473	$1,540,014
BNP Paribas SA		3.00			12/31/18		01/02/19		10,000		10,000	10,001,667	U.S. Government Sponsored Agency Obligations, 3.00% to 6.00%, due 12/15/23 to 08/20/48	24,253,021	10,200,001
Goldman Sachs & Co. LLC		2.67			12/31/18		01/07/19		3,000		3,000	3,001,557	U.S. Government Sponsored Agency Obligation, 3.75%, due 08/01/28	3,022,712	3,090,001
JP Morgan Securities LLC		2.67	(a)		12/31/18		02/06/19		2,500		2,500	2,506,867	U.S. Government Sponsored Agency Obligations, 3.13% to 4.09%, due 01/20/40 to 02/25/51	47,937,800	2,625,003
		2.95			12/31/18		01/02/19		10,000		10,000	10,001,639	U.S. Treasury Obligation, 1.50%, due 11/30/19	10,291,400	10,200,027
Total JP Morgan Securities LLC										$	12,500				$12,825,030
Merrill Lynch, Pierce, Fenner & Smith, Inc.		2.65			12/31/18		01/07/19		1,500		1,500	1,500,773	U.S. Government Sponsored Agency Obligation, 4.00%, due 08/01/48	1,538,070	1,545,000
		3.00			12/31/18		01/02/19		10,000		10,000	10,001,667	U.S. Government Sponsored Agency Obligation, 4.50%, due 08/20/48	9,690,300	10,200,000
Total Merrill Lynch, Pierce, Fenner & Smith, Inc.										$	11,500				$11,745,000
Mizuho Securities USA LLC		2.95			12/31/18		01/02/19		10,000		10,000	10,001,639	U.S. Treasury Obligation, 2.63%, due 12/31/23	10,175,000	10,200,030
Wells Fargo Securities LLC		2.50			12/26/18		01/02/19		1,200		1,200	1,200,583	U.S. Government Sponsored Agency Obligations, 0.00% to 9.00%, due 03/01/19 to 06/01/53	13,399,161	1,225,899
										$	49,700				$50,825,975

^(a)  Variable rate security. Rate as of period end and maturity is the date the principal owed can be recovered through demand.

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments. For information about the Fund’s policy regarding valuation of investments, refer to the Notes to Financial Statements.

The following table summarizes the Fund’s investments categorized in the disclosure hierarchy:

	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Short-Term Securities(a)	$	—	$	126,658,102	$	—	$	126,658,102

^(a)  See above Schedule of Investments for values in each security type.

During the year ended December 31, 2018, there were no transfers between levels.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 83

Schedule of Investments  (continued) December 31, 2018 BlackRock High Yield Portfolio (Percentages shown are based on Net Assets)

Security		Shares		Value
Common Stocks — 1.3%
Chemicals — 0.4%
Platform Specialty Products Corp.(a)			8,813	$	91,038
Containers & Packaging — 0.2%
Crown Holdings, Inc.(a)			1,433		59,570
Equity Real Estate Investment Trusts (REITs) — 0.1%
Gaming and Leisure Properties, Inc.			880		28,433
Hotels, Restaurants & Leisure — 0.4%
Star Group, Inc. (The)(a)			6,142		101,407
Media — 0.1%
Altice USA, Inc., Class A			1,650		27,258
Metals & Mining — 0.1%
Constellium NV, Class A(a)			5,016		35,062
Total Common Stocks — 1.3% (Cost: $451,103)					342,768
		Par (000)
Corporate Bonds — 76.2%
Aerospace & Defense — 2.3%
Arconic, Inc., 5.13%, 10/01/24	USD		100		96,001
BBA US Holdings, Inc., 5.38%, 05/01/26(b)			27		25,582
Bombardier, Inc.(b):
7.75%, 03/15/20			10		10,150
8.75%, 12/01/21			46		47,380
5.75%, 03/15/22			13		12,122
6.00%, 10/15/22			2		1,875
6.13%, 01/15/23			67		62,812
7.50%, 12/01/24			128		120,640
7.50%, 03/15/25			99		93,308
BWX Technologies, Inc., 5.38%, 07/15/26(b)			15		14,433
Kratos Defense & Security Solutions, Inc., 6.50%, 11/30/25(b)			27		27,473
Pioneer Holdings LLC, 9.00%, 11/01/22(b)			14		14,070
TransDigm, Inc.:
6.00%, 07/15/22			12		11,820
6.50%, 07/15/24			50		48,625
6.50%, 05/15/25			14		13,370
6.38%, 06/15/26			28		26,040
					625,701
Auto Components — 0.2%
Icahn Enterprises LP:
6.00%, 08/01/20			3		2,996
6.75%, 02/01/24			41		40,590
6.38%, 12/15/25			21		20,213
Lear Corp., Escrow(a)(c):
0.00%, 12/01/13			150		—
0.00%, 08/01/14			100		—
					63,799
Automobiles — 0.1%
Tesla, Inc., 5.30%, 08/15/25(b)			41		35,619
Banks — 0.4%
Banco Espirito Santo SA, 4.75%, 01/15/18(a)(d)	EUR		100		32,940
CIT Group, Inc.:
5.00%, 08/01/23	USD		54		52,920
5.25%, 03/07/25			12		11,730
6.13%, 03/09/28			10		9,950
					107,540

Security		Par (000)		Value
Building Products — 0.5%(b)
CPG Merger Sub LLC, 8.00%, 10/01/21	USD		37	$	35,890
Jeld-Wen, Inc., 4.63%, 12/15/25			14		12,250
Masonite International Corp., 5.75%, 09/15/26			15		14,138
NCI Building Systems, Inc., 8.00%, 04/15/26			7		6,405
PGT Escrow Issuer, Inc., 6.75%, 08/01/26			10		9,850
Standard Industries, Inc.:
5.38%, 11/15/24			13		12,204
6.00%, 10/15/25			36		34,527
USG Corp., 4.88%, 06/01/27			18		18,135
					143,399
Capital Markets — 0.2%
Eagle Holding Co. II LLC, 7.63% ( 7.63% Cash or 8.38% PIK), 05/15/22(b)(e)			21		20,055
FS Energy & Power Fund, 7.50%, 08/15/23(b)			19		18,050
Lehman Brothers Holdings Capital Trust VII Escrow Bonds(a)(d):
9.00%, 03/01/15			30		570
0.00%, 05/17/49			110		2,090
Lions Gate Capital Holdings LLC, 5.88%, 11/01/24(b)			10		9,875
MSCI, Inc., 5.25%, 11/15/24(b)			12		11,940
					62,580
Chemicals — 2.9%
Blue Cube Spinco LLC:
9.75%, 10/15/23			42		46,200
10.00%, 10/15/25			32		36,160
Chemours Co. (The):
6.63%, 05/15/23			14		14,140
7.00%, 05/15/25			41		41,307
5.38%, 05/15/27			14		12,600
Gates Global LLC, 6.00%, 07/15/22(b)			85		83,300
GCB MPM Escrow LLC, 8.88%, 10/15/20(c)			82		—
GCP Applied Technologies, Inc., 5.50%, 04/15/26(b)			16		15,600
Hexion, Inc., 10.38%, 02/01/22(b)			22		17,545
Huntsman International LLC, 5.13%, 11/15/22			20		20,150
Koppers, Inc., 6.00%, 02/15/25(b)			10		8,800
Momentive Performance Materials, Inc., 3.88%, 10/24/21			28		29,680
NOVA Chemicals Corp., 4.88%, 06/01/24(b)			31		27,978
Olin Corp., 5.13%, 09/15/27			30		27,600
Platform Specialty Products Corp.(b):
6.50%, 02/01/22			200		200,000
5.88%, 12/01/25			126		117,810
PQ Corp.(b):
6.75%, 11/15/22			42		43,260
5.75%, 12/15/25			51		47,175
					789,305
Commercial Services & Supplies — 2.0%
ADT Corp. (The):
3.50%, 07/15/22			37		34,225
4.13%, 06/15/23			34		31,110
4.88%, 07/15/32(b)			46		34,040
Advanced Disposal Services, Inc., 5.63%, 11/15/24(b)			9		8,797
APX Group, Inc.:
8.75%, 12/01/20			34		32,385
7.88%, 12/01/22			25		23,625
Aramark Services, Inc.(b):
5.00%, 04/01/25			5		4,887
5.00%, 02/01/28			63		58,748
GFL Environmental, Inc., 5.38%, 03/01/23(b)			13		11,375
Harland Clarke Holdings Corp., 8.38%, 08/15/22(b)			14		12,758
Hulk Finance Corp., 7.00%, 06/01/26(b)			12		10,470

84 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock High Yield Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Commercial Services & Supplies (continued)
KAR Auction Services, Inc., 5.13%, 06/01/25(b)	USD		20	$	18,050
Matthews International Corp., 5.25%, 12/01/25(b)			2		1,860
Mobile Mini, Inc., 5.88%, 07/01/24			50		49,000
Nielsen Co. Luxembourg SARL (The), 5.00%, 02/01/25(b)			6		5,610
Nielsen Finance LLC, 5.00%, 04/15/22(b)			35		33,425
Prime Security Services Borrower LLC, 9.25%, 05/15/23(b)			99		102,094
Ritchie Bros Auctioneers, Inc., 5.38%, 01/15/25(b)			20		19,400
Tervita Escrow Corp., 7.63%, 12/01/21(b)			32		30,480
Waste Pro USA, Inc., 5.50%, 02/15/26(b)			12		11,040
					533,379
Communications Equipment — 0.4%
CommScope Technologies LLC, 5.00%, 03/15/27(b)			40		32,400
CommScope, Inc., 5.50%, 06/15/24(b)			3		2,745
Nokia OYJ, 6.63%, 05/15/39			60		60,900
					96,045
Construction & Engineering — 0.3%
Brand Industrial Services, Inc., 8.50%, 07/15/25(b)			22		18,755
Engility Corp., 8.88%, 09/01/24			26		27,755
New Enterprise Stone & Lime Co., Inc.(b):
10.13%, 04/01/22			17		16,575
6.25%, 03/15/26			7		6,370
Tutor Perini Corp., 6.88%, 05/01/25(b)			12		11,160
Weekley Homes LLC, 6.63%, 08/15/25			3		2,752
					83,367
Consumer Finance — 1.4%
Ally Financial, Inc.:
4.63%, 05/19/22			24		23,610
5.13%, 09/30/24			40		39,700
8.00%, 11/01/31			133		147,630
Navient Corp.:
6.63%, 07/26/21			22		21,230
6.50%, 06/15/22			6		5,595
5.50%, 01/25/23			37		32,375
7.25%, 09/25/23			17		15,597
5.88%, 10/25/24			7		5,845
6.75%, 06/25/25			13		11,083
6.75%, 06/15/26			12		9,960
5.63%, 08/01/33			24		15,840
Springleaf Finance Corp.:
5.63%, 03/15/23			4		3,690
6.88%, 03/15/25			38		34,010
7.13%, 03/15/26			6		5,355
					371,520
Containers & Packaging — 1.7%
Ardagh Packaging Finance plc, 4.63%, 05/15/23(b)			200		191,000
BWAY Holding Co., 5.50%, 04/15/24(b)			76		71,440
Crown Americas LLC:
4.75%, 02/01/26(b)			37		34,872
4.25%, 09/30/26			28		25,130
Intertape Polymer Group, Inc., 7.00%, 10/15/26(b)			12		11,850
OI European Group BV, 4.00%, 03/15/23(b)			19		17,765
Reynolds Group Issuer, Inc.:
5.75%, 10/15/20			8		7,733
5.13%, 07/15/23(b)			6		5,715
7.00%, 07/15/24(b)			95		90,488
Sealed Air Corp., 6.88%, 07/15/33(b)			9		8,978
					464,971

Security		Par (000)		Value
Distributors — 0.2%(b)
American Builders & Contractors Supply Co., Inc.:
5.75%, 12/15/23	USD		2	$	1,980
5.88%, 05/15/26			27		25,582
Core & Main LP, 6.13%, 08/15/25			29		25,520
					53,082
Diversified Consumer Services — 0.4%
frontdoor, Inc., 6.75%, 08/15/26(b)			26		24,700
Graham Holdings Co., 5.75%, 06/01/26(b)			18		18,045
Laureate Education, Inc., 8.25%, 05/01/25(b)			11		11,302
Service Corp. International, 4.50%, 11/15/20			20		19,850
ServiceMaster Co. LLC (The), 5.13%, 11/15/24(b)			26		24,570
					98,467
Diversified Financial Services — 1.7%(b)
Jefferies Finance LLC, 7.38%, 04/01/20			200		199,500
Refinitiv US Holdings, Inc.:
4.50%, 05/15/26	EUR		100		111,424
6.25%, 05/15/26	USD		3		2,895
8.25%, 11/15/26			50		45,688
Tempo Acquisition LLC, 6.75%, 06/01/25			43		39,775
Travelport Corporate Finance plc, 6.00%, 03/15/26			18		18,180
Verscend Escrow Corp., 9.75%, 08/15/26			55		51,700
					469,162
Diversified Telecommunication Services — 6.1%
Altice France SA, 8.13%, 02/01/27(b)			248		233,740
CCO Holdings LLC(b):
4.00%, 03/01/23			29		27,043
5.13%, 05/01/23			7		6,807
5.13%, 05/01/27			222		206,771
5.00%, 02/01/28			71		65,320
CenturyLink, Inc.:
Series S, 6.45%, 06/15/21			40		39,900
Series W, 6.75%, 12/01/23			4		3,855
Series Y, 7.50%, 04/01/24			3		2,895
Series P, 7.60%, 09/15/39			2		1,580
Series U, 7.65%, 03/15/42			64		50,400
Cincinnati Bell, Inc.(b):
7.00%, 07/15/24			37		30,525
8.00%, 10/15/25			15		12,375
Embarq Corp., 8.00%, 06/01/36			42		38,010
Frontier Communications Corp.:
10.50%, 09/15/22			17		11,815
11.00%, 09/15/25			137		85,276
Intelsat Jackson Holdings SA:
5.50%, 08/01/23			63		54,810
8.50%, 10/15/24(b)			77		74,690
9.75%, 07/15/25(b)			98		98,274
Level 3 Financing, Inc.:
5.38%, 08/15/22			21		20,590
5.63%, 02/01/23			10		9,825
5.13%, 05/01/23			13		12,545
5.38%, 01/15/24			21		20,003
5.38%, 05/01/25			17		15,937
5.25%, 03/15/26			74		67,710
Level 3 Parent LLC, 5.75%, 12/01/22			40		39,300
Qualitytech LP, 4.75%, 11/15/25(b)			16		14,960
Qwest Corp., 6.75%, 12/01/21			10		10,224
Sprint Capital Corp.:
6.90%, 05/01/19			25		25,125
8.75%, 03/15/32			66		69,630
Telecom Italia Capital SA:
6.38%, 11/15/33			36		32,495

SCHEDULES OF INVESTMENTS 85

Schedule of Investments  (continued) December 31, 2018 BlackRock High Yield Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Diversified Telecommunication Services (continued)
6.00%, 09/30/34	USD		45	$	38,925
Telesat Canada, 8.88%, 11/15/24(b)			27		28,080
Virgin Media Finance plc, 5.75%, 01/15/25(b)			200		188,006
					1,637,441
Electric Utilities — 0.0%
NextEra Energy Operating Partners LP, 4.25%, 09/15/24(b)			10		9,250
Electrical Equipment — 0.4%(b)
Energizer Gamma Acquisition, Inc., 6.38%, 07/15/26			6		5,505
Sensata Technologies BV:
5.63%, 11/01/24			7		6,895
5.00%, 10/01/25			39		36,660
Vertiv Group Corp., 9.25%, 10/15/24			53		48,760
					97,820
Electronic Equipment, Instruments & Components — 0.3%
CDW LLC:
5.50%, 12/01/24			32		31,600
5.00%, 09/01/25			53		50,747
					82,347
Energy Equipment & Services — 2.4%
Apergy Corp., 6.38%, 05/01/26			10		9,700
Calfrac Holdings LP, 8.50%, 06/15/26(b)			11		7,810
CSI Compressco LP, 7.50%, 04/01/25(b)			33		30,690
Diamond Offshore Drilling, Inc.:
7.88%, 08/15/25			16		13,280
5.70%, 10/15/39			4		2,440
4.88%, 11/01/43			24		13,320
Ensco Jersey Finance Ltd., 3.00%, 01/31/24(f)			23		15,209
Ensco plc:
4.50%, 10/01/24			8		5,200
5.20%, 03/15/25			19		12,635
7.75%, 02/01/26			25		18,500
5.75%, 10/01/44			14		7,824
McDermott Technology Americas, Inc., 10.63%, 05/01/24(b)			5		4,219
Nabors Industries, Inc.:
4.63%, 09/15/21			6		5,380
5.50%, 01/15/23			5		3,969
5.75%, 02/01/25			15		11,356
Noble Holding International Ltd.:
7.75%, 01/15/24			11		8,332
7.88%, 02/01/26(b)			92		78,430
5.25%, 03/15/42			12		6,960
Oceaneering International, Inc., 4.65%, 11/15/24			6		4,739
Pacific Drilling First Lien Escrow Issuer Ltd., 8.38%, 10/01/23(b)			71		67,805
Pioneer Energy Services Corp., 6.13%, 03/15/22			28		17,080
Rowan Cos., Inc., 4.88%, 06/01/22			26		21,450
SESI LLC:
7.13%, 12/15/21			10		8,500
7.75%, 09/15/24			22		17,490
Transocean Guardian Ltd., 5.88%, 01/15/24(b)			17		16,278
Transocean Pontus Ltd., 6.13%, 08/01/25(b)			20		19,300
Transocean, Inc.:
5.80%, 10/15/22			23		20,240
9.00%, 07/15/23(b)			82		81,590
7.25%, 11/01/25(b)			30		26,175
7.50%, 01/15/26(b)			4		3,510
Trinidad Drilling Ltd., 6.63%, 02/15/25(b)			25		25,213

Security		Par (000)		Value
Energy Equipment & Services (continued)
USA Compression Partners LP, 6.88%, 04/01/26(b)	USD		37	$	35,520
Vantage Drilling International, 9.25%, 11/15/23(b)			12		11,730
Weatherford International Ltd.:
5.13%, 09/15/20			20		15,600
6.50%, 08/01/36			14		7,280
5.95%, 04/15/42			11		5,596
					660,350
Entertainment — 0.5%
Ascend Learning LLC, 6.88%, 08/01/25(b)			24		22,980
Live Nation Entertainment, Inc., 4.88%, 11/01/24(b)			3		2,850
Netflix, Inc.:
5.50%, 02/15/22			42		42,367
4.38%, 11/15/26			6		5,445
5.88%, 11/15/28(b)			48		46,642
WMG Acquisition Corp., 5.50%, 04/15/26(b)			12		11,460
					131,744
Equity Real Estate Investment Trusts (REITs) — 2.2%
CoreCivic, Inc., 4.75%, 10/15/27			17		14,067
CyrusOne LP, 5.38%, 03/15/27			8		7,760
Equinix, Inc.:
5.88%, 01/15/26			70		70,525
5.38%, 05/15/27			15		14,663
ESH Hospitality, Inc., 5.25%, 05/01/25(b)			18		16,740
GEO Group, Inc. (The):
5.13%, 04/01/23			11		9,900
5.88%, 10/15/24			24		21,180
GLP Capital LP:
5.38%, 11/01/23			6		6,082
5.25%, 06/01/25			6		5,958
iStar, Inc.:
4.63%, 09/15/20			4		3,900
6.00%, 04/01/22			3		2,902
5.25%, 09/15/22			11		10,284
MGM Growth Properties Operating Partnership LP:
5.63%, 05/01/24			103		101,970
4.50%, 09/01/26			72		65,160
4.50%, 01/15/28			34		29,750
MPT Operating Partnership LP:
6.38%, 03/01/24			3		3,075
5.50%, 05/01/24			5		4,975
5.00%, 10/15/27			50		45,719
SBA Communications Corp.:
4.00%, 10/01/22			44		41,910
4.88%, 09/01/24			92		86,480
VICI Properties 1 LLC, 8.00%, 10/15/23			23		25,156
					588,156
Food & Staples Retailing — 0.1%
Albertsons Cos. LLC, 5.75%, 03/15/25			22		19,250
Rite Aid Corp., 6.13%, 04/01/23(b)			11		8,690
					27,940
Food Products — 0.9%(b)
Chobani LLC, 7.50%, 04/15/25			15		11,813
JBS USA LUX SA:
5.88%, 07/15/24			29		28,529
5.75%, 06/15/25			74		70,948
6.75%, 02/15/28			55		53,488
Post Holdings, Inc.:
5.50%, 03/01/25			29		27,834
5.75%, 03/01/27			30		28,125
5.63%, 01/15/28			8		7,360

86 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock High Yield Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Food Products (continued)
Simmons Foods, Inc., 7.75%, 01/15/24	USD		17	$	17,085
					245,182
Gas Utilities — 0.1%
Superior Plus LP, 7.00%, 07/15/26(b)			31		29,915
Health Care Equipment & Supplies — 1.8%
Avantor, Inc.(b):
6.00%, 10/01/24			138		135,585
9.00%, 10/01/25			47		47,000
DJO Finance LLC, 8.13%, 06/15/21(b)			79		81,370
Hologic, Inc., 4.38%, 10/15/25(b)			4		3,720
Immucor, Inc., 11.13%, 02/15/22(b)			8		8,000
Mallinckrodt International Finance SA(b):
4.88%, 04/15/20			9		8,685
5.75%, 08/01/22			43		36,980
5.63%, 10/15/23			4		3,040
Ortho-Clinical Diagnostics, Inc., 6.63%, 05/15/22(b)			139		125,100
Sotera Health Holdings LLC, 6.50%, 05/15/23(b)			28		26,810
Teleflex, Inc., 4.88%, 06/01/26			15		14,325
					490,615
Health Care Providers & Services — 5.1%
Acadia Healthcare Co., Inc.:
5.13%, 07/01/22			9		8,595
5.63%, 02/15/23			16		15,160
6.50%, 03/01/24			38		36,670
AHP Health Partners, Inc., 9.75%, 07/15/26(b)			14		14,175
Centene Corp., 4.75%, 05/15/22			37		36,537
Centene Escrow I Corp., 5.38%, 06/01/26(b)			135		131,288
Community Health Systems, Inc., 8.63%, 01/15/24(b)			39		38,513
DaVita, Inc., 5.00%, 05/01/25			28		25,410
HCA, Inc.:
5.00%, 03/15/24			71		70,290
5.38%, 02/01/25			4		3,900
5.25%, 04/15/25			117		116,415
5.25%, 06/15/26			88		87,340
5.38%, 09/01/26			36		35,010
5.63%, 09/01/28			38		36,670
5.50%, 06/15/47			121		114,648
inVentiv Group Holdings, Inc., 7.50%, 10/01/24(b)			25		26,000
MEDNAX, Inc.(b):
5.25%, 12/01/23			12		11,760
6.25%, 01/15/27			8		7,720
Molina Healthcare, Inc., 4.88%, 06/15/25(b)			12		10,950
MPH Acquisition Holdings LLC, 7.13%, 06/01/24(b)			32		29,840
NVA Holdings, Inc., 6.88%, 04/01/26(b)			14		12,530
Polaris Intermediate Corp., 8.41% ( 8.50% Cash or 9.25% PIK), 12/01/22(b)(e)			94		85,739
RegionalCare Hospital Partners Holdings, Inc., 8.25%, 05/01/23(b)			18		18,180
Surgery Center Holdings, Inc.(b):
8.88%, 04/15/21			14		13,965
6.75%, 07/01/25			35		29,750
Team Health Holdings, Inc., 6.38%, 02/01/25(b)			41		33,466
Tenet Healthcare Corp.:
6.00%, 10/01/20			27		27,338
7.50%, 01/01/22(b)			32		32,480
8.13%, 04/01/22			73		73,182
4.63%, 07/15/24			111		103,230
6.88%, 11/15/31			24		20,160
Vizient, Inc., 10.38%, 03/01/24(b)			38		40,280
WellCare Health Plans, Inc.:
5.25%, 04/01/25			8		7,700

Security		Par (000)		Value
Health Care Providers & Services (continued)
5.38%, 08/15/26(b)	USD		31	$	29,915
					1,384,806
Hotels, Restaurants & Leisure — 3.1%
1011778 BC ULC(b):
4.25%, 05/15/24			36		33,120
5.00%, 10/15/25			169		155,480
Boyd Gaming Corp., 6.00%, 08/15/26			11		10,285
Boyne USA, Inc., 7.25%, 05/01/25(b)			8		8,260
Caesars Resort Collection LLC, 5.25%, 10/15/25(b)			27		23,220
Churchill Downs, Inc., 4.75%, 01/15/28(b)			14		12,666
Eldorado Resorts, Inc.:
6.00%, 04/01/25			8		7,717
6.00%, 09/15/26(b)			12		11,340
Golden Nugget, Inc., 6.75%, 10/15/24(b)			49		46,182
Hilton Domestic Operating Co., Inc.:
4.25%, 09/01/24			12		11,340
5.13%, 05/01/26(b)			51		48,960
Hilton Worldwide Finance LLC, 4.88%, 04/01/27			10		9,375
IRB Holding Corp., 6.75%, 02/15/26(b)			3		2,625
KFC Holding Co.(b):
5.00%, 06/01/24			10		9,650
5.25%, 06/01/26			27		26,122
4.75%, 06/01/27			2		1,860
MGM Resorts International:
6.63%, 12/15/21			88		90,200
7.75%, 03/15/22			28		29,785
4.63%, 09/01/26			2		1,795
Sabre GLBL, Inc.(b):
5.38%, 04/15/23			11		10,945
5.25%, 11/15/23			19		18,762
Scientific Games International, Inc.:
10.00%, 12/01/22			51		51,765
5.00%, 10/15/25(b)			37		33,023
Six Flags Entertainment Corp., 4.88%, 07/31/24(b)			49		46,183
Stars Group Holdings BV, 7.00%, 07/15/26(b)			11		10,698
Station Casinos LLC, 5.00%, 10/01/25(b)			6		5,430
Viking Cruises Ltd.(b):
6.25%, 05/15/25			21		20,685
5.88%, 09/15/27			84		78,330
Wyndham Destinations, Inc., 5.75%, 04/01/27			8		7,340
Yum! Brands, Inc.:
3.88%, 11/01/23			2		1,890
5.35%, 11/01/43			2		1,660
					826,693
Household Durables — 0.9%
K. Hovnanian Enterprises, Inc., 10.00%, 07/15/22(b)			17		14,875
Lennar Corp.:
6.63%, 05/01/20			6		6,172
8.38%, 01/15/21			44		46,750
5.25%, 06/01/26			14		13,195
4.75%, 11/29/27			40		36,100
Mattamy Group Corp.(b):
6.88%, 12/15/23			18		16,808
6.50%, 10/01/25			4		3,580
MDC Holdings, Inc., 6.00%, 01/15/43			10		7,800
Meritage Homes Corp., 5.13%, 06/06/27			9		7,650
PulteGroup, Inc.:
6.38%, 05/15/33			22		20,075
6.00%, 02/15/35			6		5,190
Tempur Sealy International, Inc., 5.50%, 06/15/26			6		5,475
TRI Pointe Group, Inc.:
4.38%, 06/15/19			10		9,925
4.88%, 07/01/21			13		12,415

SCHEDULES OF INVESTMENTS 87

Schedule of Investments  (continued) December 31, 2018 BlackRock High Yield Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Household Durables (continued)
Williams Scotsman International, Inc.(b):
7.88%, 12/15/22	USD		13	$	12,708
6.88%, 08/15/23			16		15,360
					234,078
Independent Power and Renewable Electricity Producers — 1.6%
AES Corp.:
5.50%, 04/15/25			20		19,850
6.00%, 05/15/26			27		27,405
5.13%, 09/01/27			35		33,600
Calpine Corp.:
5.38%, 01/15/23			66		61,875
5.88%, 01/15/24(b)			31		30,380
5.75%, 01/15/25			10		9,150
5.25%, 06/01/26(b)			69		62,962
Clearway Energy Operating LLC:
5.38%, 08/15/24			23		21,850
5.75%, 10/15/25(b)			11		10,505
NRG Energy, Inc.:
6.25%, 05/01/24			8		8,120
6.63%, 01/15/27			78		78,585
5.75%, 01/15/28			7		6,720
Pattern Energy Group, Inc., 5.88%, 02/01/24(b)			24		23,160
Talen Energy Supply LLC, 6.50%, 06/01/25			19		13,490
Vistra Energy Corp., 7.63%, 11/01/24			12		12,660
					420,312
Insurance — 0.7%(b)
Alliant Holdings Intermediate LLC, 8.25%, 08/01/23			118		116,230
AmWINS Group, Inc., 7.75%, 07/01/26			14		13,230
HUB International Ltd., 7.00%, 05/01/26			56		50,540
USIS Merger Sub, Inc., 6.88%, 05/01/25			6		5,509
					185,509
Interactive Media & Services — 0.0%
Rackspace Hosting, Inc., 8.63%, 11/15/24(b)			15		11,700
Internet & Direct Marketing Retail — 0.0%
Uber Technologies, Inc., 7.50%, 11/01/23(b)			12		11,610
IT Services — 2.0%
Alliance Data Systems Corp.(b):
5.88%, 11/01/21			37		36,948
5.38%, 08/01/22			24		23,400
Banff Merger Sub, Inc., 9.75%, 09/01/26(b)			118		107,970
Booz Allen Hamilton, Inc., 5.13%, 05/01/25(b)			5		4,750
First Data Corp., 5.75%, 01/15/24(b)			186		181,350
Gartner, Inc., 5.13%, 04/01/25(b)			22		21,354
WEX, Inc., 4.75%, 02/01/23(b)			16		15,600
Zayo Group LLC:
6.00%, 04/01/23			53		50,223
6.38%, 05/15/25			25		23,250
5.75%, 01/15/27(b)			86		76,755
					541,600
Leisure Products — 0.1%
Mattel, Inc.:
6.75%, 12/31/25(b)			31		27,658
6.20%, 10/01/40			7		5,145
5.45%, 11/01/41			4		2,840
					35,643
Life Sciences Tools & Services — 0.1%
Charles River Laboratories International, Inc., 5.50%, 04/01/26(b)			15		14,775

Security		Par (000)		Value
Machinery — 1.3%(b)
Grinding Media, Inc., 7.38%, 12/15/23	USD		26	$	25,155
Mueller Water Products, Inc., 5.50%, 06/15/26			17		16,490
Navistar International Corp., 6.63%, 11/01/25			29		27,985
Novelis Corp., 6.25%, 08/15/24			118		110,920
RBS Global, Inc., 4.88%, 12/15/25			30		27,225
SPX FLOW, Inc., 5.63%, 08/15/24			16		15,120
Stevens Holding Co., Inc., 6.13%, 10/01/26			19		18,715
Terex Corp., 5.63%, 02/01/25			35		32,593
Titan Acquisition Ltd., 7.75%, 04/15/26			55		47,025
Wabash National Corp., 5.50%, 10/01/25			23		19,694
					340,922
Media — 7.3%
Altice Luxembourg SA, 7.75%, 05/15/22(b)			200		182,000
AMC Networks, Inc., 4.75%, 08/01/25			48		43,560
Cablevision Systems Corp., 8.00%, 04/15/20			15		15,187
Clear Channel International BV, 8.75%, 12/15/20(b)			96		96,720
Clear Channel Worldwide Holdings, Inc.:
Series B, 7.63%, 03/15/20			65		63,375
Series A, 6.50%, 11/15/22			321		320,830
CSC Holdings LLC:
6.75%, 11/15/21			164		168,100
10.13%, 01/15/23(b)			200		215,250
5.25%, 06/01/24			43		39,399
10.88%, 10/15/25(b)			200		224,750
5.50%, 05/15/26(b)			200		188,500
DISH DBS Corp.:
6.75%, 06/01/21			11		10,887
5.88%, 07/15/22			132		121,440
5.00%, 03/15/23			23		19,147
5.88%, 11/15/24			4		3,220
Gray Escrow, Inc., 7.00%, 05/15/27(b)			21		20,437
MDC Partners, Inc., 6.50%, 05/01/24(b)			40		36,400
Meredith Corp., 6.88%, 02/01/26(b)			16		15,640
Midcontinent Communications, 6.88%, 08/15/23(b)			28		28,700
Outfront Media Capital LLC:
5.63%, 02/15/24			4		3,940
5.88%, 03/15/25			5		4,913
Radiate Holdco LLC(b):
6.88%, 02/15/23			6		5,445
6.63%, 02/15/25			16		13,840
Sirius XM Radio, Inc.(b):
5.38%, 04/15/25			15		14,212
5.00%, 08/01/27			18		16,448
TEGNA, Inc., 5.50%, 09/15/24(b)			8		7,750
Tribune Media Co., 5.88%, 07/15/22			32		32,160
Univision Communications, Inc.(b):
6.75%, 09/15/22			1		995
5.13%, 05/15/23			17		15,257
5.13%, 02/15/25			23		20,183
Videotron Ltd., 5.13%, 04/15/27(b)			38		35,910
					1,984,595
Metals & Mining — 2.8%
Big River Steel LLC, 7.25%, 09/01/25(b)			21		20,842
Cleveland-Cliffs, Inc., 4.88%, 01/15/24(b)			20		18,600
Constellium NV, 5.88%, 02/15/26(b)			250		222,500
Freeport-McMoRan, Inc.:
4.00%, 11/14/21			22		21,395
3.55%, 03/01/22			60		56,775
3.88%, 03/15/23			110		101,750
4.55%, 11/14/24			24		22,140
5.40%, 11/14/34			10		7,875
5.45%, 03/15/43			146		111,143

88 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock High Yield Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Metals & Mining (continued)
Joseph T Ryerson & Son, Inc., 11.00%, 05/15/22(b)	USD		16	$	16,120
Kaiser Aluminum Corp., 5.88%, 05/15/24			14		13,685
Steel Dynamics, Inc.:
5.25%, 04/15/23			7		6,904
5.50%, 10/01/24			26		25,740
4.13%, 09/15/25			22		20,212
SunCoke Energy Partners LP, 7.50%, 06/15/25(b)			26		24,635
Teck Resources Ltd.:
4.50%, 01/15/21			2		1,995
5.20%, 03/01/42			28		23,520
5.40%, 02/01/43			5		4,350
United States Steel Corp.:
6.88%, 08/15/25			25		22,875
6.25%, 03/15/26			13		11,375
					754,431
Mortgage Real Estate Investment Trusts (REITs) — 0.0%
Starwood Property Trust, Inc., 5.00%, 12/15/21			12		11,790
Oil, Gas & Consumable Fuels — 9.1%
Antero Midstream Partners LP, 5.38%, 09/15/24			5		4,662
Antero Resources Corp.:
5.13%, 12/01/22			12		11,280
5.63%, 06/01/23			10		9,500
5.00%, 03/01/25			36		32,580
Ascent Resources Utica Holdings LLC(b):
10.00%, 04/01/22			14		14,319
7.00%, 11/01/26			20		18,100
Berry Petroleum Co. LLC, 7.00%, 02/15/26(b)			36		32,400
Bruin E&P Partners LLC, 8.88%, 08/01/23(b)			36		32,040
California Resources Corp., 8.00%, 12/15/22(b)			74		50,135
Callon Petroleum Co.:
6.13%, 10/01/24			21		19,530
6.38%, 07/01/26			13		12,090
Carrizo Oil & Gas, Inc.:
6.25%, 04/15/23			28		25,900
8.25%, 07/15/25			28		27,440
Chaparral Energy, Inc., 8.75%, 07/15/23(b)			27		19,305
Cheniere Corpus Christi Holdings LLC:
7.00%, 06/30/24			100		105,500
5.88%, 03/31/25			25		24,875
5.13%, 06/30/27			10		9,440
Cheniere Energy Partners LP:
5.25%, 10/01/25			15		13,987
5.63%, 10/01/26(b)			36		33,660
Chesapeake Energy Corp.:
6.63%, 08/15/20			28		27,090
4.88%, 04/15/22			8		6,980
7.00%, 10/01/24			54		46,710
8.00%, 01/15/25			31		27,357
8.00%, 06/15/27			88		73,920
CNX Resources Corp., 5.88%, 04/15/22			171		164,160
Comstock Escrow Corp., 9.75%, 08/15/26(b)			17		14,365
CONSOL Energy, Inc., 11.00%, 11/15/25(b)			38		41,610
Covey Park Energy LLC, 7.50%, 05/15/25(b)			30		25,800
Crestwood Midstream Partners LP, 6.25%, 04/01/23			5		4,812
CrownRock LP, 5.63%, 10/15/25(b)			54		48,600
DCP Midstream Operating LP:
4.75%, 09/30/21(b)			35		34,562
5.38%, 07/15/25			4		3,910
6.45%, 11/03/36(b)			17		16,490
6.75%, 09/15/37(b)			29		28,565
Denbury Resources, Inc., 9.25%, 03/31/22(b)			34		31,365

Security		Par (000)		Value
Oil, Gas & Consumable Fuels (continued)
Diamondback Energy, Inc.:
4.75%, 11/01/24(b)	USD		20	$	19,300
4.75%, 11/01/24			21		20,265
5.38%, 05/31/25			13		12,675
Endeavor Energy Resources LP(b):
5.50%, 01/30/26			43		44,075
5.75%, 01/30/28			24		24,485
EnLink Midstream Partners LP:
4.40%, 04/01/24			22		20,732
4.15%, 06/01/25			2		1,803
4.85%, 07/15/26			19		17,134
5.05%, 04/01/45			8		6,250
5.45%, 06/01/47			19		15,366
EP Energy LLC:
9.38%, 05/01/20			2		1,555
9.38%, 05/01/24(b)			24		10,680
7.75%, 05/15/26(b)			27		23,895
Extraction Oil & Gas, Inc.(b):
7.38%, 05/15/24			31		25,575
5.63%, 02/01/26			43		31,390
Genesis Energy LP:
6.50%, 10/01/25			11		9,680
6.25%, 05/15/26			16		13,720
Great Western Petroleum LLC, 9.00%, 09/30/21(b)			51		46,410
Gulfport Energy Corp., 6.63%, 05/01/23			17		16,065
Halcon Resources Corp., 6.75%, 02/15/25			40		29,200
Hess Infrastructure Partners LP, 5.63%, 02/15/26(b)			27		26,123
Jagged Peak Energy LLC, 5.88%, 05/01/26(b)			3		2,790
Magnolia Oil & Gas Operating LLC, 6.00%, 08/01/26(b)			10		9,650
Matador Resources Co., 5.88%, 09/15/26			36		33,120
MEG Energy Corp., 6.50%, 01/15/25(b)			50		50,750
NGPL PipeCo LLC(b):
4.88%, 08/15/27			30		28,275
7.77%, 12/15/37			42		47,880
Northern Oil and Gas, Inc., 8.50% ( 8.50% Cash or 1.00% PIK), 05/15/23(e)			28		26,913
Oasis Petroleum, Inc., 6.88%, 03/15/22			9		8,483
Parsley Energy LLC(b):
6.25%, 06/01/24			9		8,730
5.38%, 01/15/25			42		38,640
5.25%, 08/15/25			9		8,145
5.63%, 10/15/27			22		19,993
PBF Holding Co. LLC, 7.25%, 06/15/25			20		18,800
PDC Energy, Inc.:
1.13%, 09/15/21(f)			2		1,773
6.13%, 09/15/24			2		1,850
5.75%, 05/15/26			15		13,350
QEP Resources, Inc.:
6.88%, 03/01/21			3		3,023
5.38%, 10/01/22			35		31,850
5.25%, 05/01/23			5		4,425
5.63%, 03/01/26			60		49,800
Range Resources Corp.:
5.88%, 07/01/22			4		3,700
5.00%, 03/15/23			12		10,560
4.88%, 05/15/25			10		8,200
Resolute Energy Corp., 8.50%, 05/01/20			44		43,340
Sanchez Energy Corp.:
7.75%, 06/15/21			160		37,600
7.25%, 02/15/23(b)			12		9,780
Seven Generations Energy Ltd.(b):
6.88%, 06/30/23			8		7,880
5.38%, 09/30/25			2		1,790

SCHEDULES OF INVESTMENTS 89

Schedule of Investments  (continued) December 31, 2018 BlackRock High Yield Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Oil, Gas & Consumable Fuels (continued)
SM Energy Co.:
6.13%, 11/15/22	USD		7	$	6,615
5.00%, 01/15/24			6		5,220
5.63%, 06/01/25			27		23,490
6.75%, 09/15/26			14		12,530
Southwestern Energy Co.:
6.20%, 01/23/25			16		14,300
7.50%, 04/01/26			13		12,285
7.75%, 10/01/27			36		34,200
Sunoco LP:
4.88%, 01/15/23			28		27,300
5.50%, 02/15/26			8		7,580
5.88%, 03/15/28			2		1,871
Tallgrass Energy Partners LP(b):
4.75%, 10/01/23			2		1,930
5.50%, 09/15/24			38		37,335
5.50%, 01/15/28			86		82,560
Targa Resources Partners LP:
5.25%, 05/01/23			2		1,960
5.13%, 02/01/25			48		45,000
5.88%, 04/15/26(b)			27		26,258
5.00%, 01/15/28			12		10,860
TerraForm Power Operating LLC(b):
4.25%, 01/31/23			19		17,718
5.00%, 01/31/28			20		17,600
W&T Offshore, Inc., 9.75%, 11/01/23(b)			1		875
Whiting Petroleum Corp., 6.63%, 01/15/26			10		8,575
WildHorse Resource Development Corp., 6.88%, 02/01/25			14		13,230
WPX Energy, Inc.:
6.00%, 01/15/22			6		5,835
8.25%, 08/01/23			6		6,270
5.25%, 09/15/24			9		8,145
					2,470,049
Paper & Forest Products — 0.2%
Mercer International, Inc.:
6.50%, 02/01/24			15		14,663
5.50%, 01/15/26			13		11,635
Norbord, Inc., 6.25%, 04/15/23(b)			22		22,035
					48,333
Pharmaceuticals — 2.2%(b)
Bausch Health Cos., Inc.
5.63%, 12/01/21			11		10,835
5.50%, 03/01/23			63		57,645
5.88%, 05/15/23			95		87,875
7.00%, 03/15/24			42		42,420
6.13%, 04/15/25			104		90,740
5.50%, 11/01/25			72		67,140
9.00%, 12/15/25			13		12,935
Catalent Pharma Solutions, Inc., 4.88%, 01/15/26			35		33,162
Elanco Animal Health, Inc.
4.27%, 08/28/23			13		12,989
4.90%, 08/28/28			17		17,299
Endo Finance LLC
7.25%, 01/15/22			5		4,325
5.38%, 01/15/23			60		45,600
Valeant Pharmaceuticals International, Inc.:
9.25%, 04/01/26			36		36,000
8.50%, 01/31/27			64		62,080
					581,045

Security		Par (000)		Value
Professional Services — 0.3%
Jaguar Holding Co. II, 6.38%, 08/01/23(b)	USD		91	$	87,087
Real Estate Management & Development — 0.3%(b)
Five Point Operating Co. LP, 7.88%, 11/15/25			16		15,440
Greystar Real Estate Partners LLC, 5.75%, 12/01/25			18		17,595
Howard Hughes Corp. (The), 5.38%, 03/15/25			25		23,500
Newmark Group, Inc., 6.13%, 11/15/23			10		9,847
					66,382
Road & Rail — 0.5%(b)
Avolon Holdings Funding Ltd., 5.13%, 10/01/23			32		30,560
Herc Rentals, Inc.:
7.50%, 06/01/22			6		6,225
7.75%, 06/01/24			17		17,722
Hertz Corp. (The), 7.63%, 06/01/22			39		36,757
Park Aerospace Holdings Ltd.:
3.63%, 03/15/21			26		25,025
5.25%, 08/15/22			27		26,123
					142,412
Semiconductors & Semiconductor Equipment — 0.3%
Advanced Micro Devices, Inc., 7.50%, 08/15/22			10		10,725
Entegris, Inc., 4.63%, 02/10/26(b)			20		18,400
Qorvo, Inc., 5.50%, 07/15/26(b)			36		34,380
Versum Materials, Inc., 5.50%, 09/30/24(b)			14		13,860
					77,365
Software — 3.6%
ACI Worldwide, Inc., 5.75%, 08/15/26(b)			59		57,967
CDK Global, Inc., 4.88%, 06/01/27			73		67,708
Genesys Telecommunications Laboratories, Inc., 10.00%, 11/30/24(b)			72		75,420
Infor Software Parent LLC, 7.13% ( 7.13% Cash or 7.88% PIK), 05/01/21(b)(e)			42		40,845
Infor US, Inc., 6.50%, 05/15/22			227		219,543
Informatica LLC, 7.13%, 07/15/23(b)			93		90,572
Nuance Communications, Inc.:
6.00%, 07/01/24			21		20,895
5.63%, 12/15/26			25		23,750
PTC, Inc., 6.00%, 05/15/24			22		22,110
RP Crown Parent LLC, 7.38%, 10/15/24(b)			44		44,330
Solera LLC, 10.50%, 03/01/24(b)			170		181,050
Sophia LP, 9.00%, 09/30/23(b)			26		26,000
Symantec Corp., 5.00%, 04/15/25(b)			22		20,519
TIBCO Software, Inc., 11.38%, 12/01/21(b)			82		85,895
					976,604
Specialty Retail — 0.5%
Asbury Automotive Group, Inc., 6.00%, 12/15/24			36		34,470
Group 1 Automotive, Inc.:
5.00%, 06/01/22			10		9,475
5.25%, 12/15/23(b)			4		3,710
L Brands, Inc.:
6.88%, 11/01/35			44		36,749
6.75%, 07/01/36			5		4,075
Penske Automotive Group, Inc.:
5.75%, 10/01/22			13		12,967
5.50%, 05/15/26			8		7,440
Staples, Inc., 8.50%, 09/15/25(b)			28		25,262
					134,148
Technology Hardware, Storage & Peripherals — 0.6%
Dell International LLC, 7.13%, 06/15/24(b)			68		69,190
Western Digital Corp., 4.75%, 02/15/26			107		92,822
					162,012

90 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock High Yield Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)			Value
Thrifts & Mortgage Finance — 0.2%(b)
Ladder Capital Finance Holdings LLLP, 5.25%, 10/01/25	USD		33		$	29,453
Nationstar Mortgage Holdings, Inc.:
8.13%, 07/15/23			18			17,550
9.13%, 07/15/26			14			13,615
						60,618
Trading Companies & Distributors — 1.1%
Flexi-Van Leasing, Inc., 10.00%, 02/15/23(b)			15			12,150
Fortress Transportation & Infrastructure Investors LLC(b):
6.75%, 03/15/22			8			8,020
6.50%, 10/01/25			8			7,480
HD Supply, Inc., 5.38%, 10/15/26(b)			176			170,720
United Rentals North America, Inc.:
5.50%, 07/15/25			4			3,770
4.63%, 10/15/25			37			33,023
5.88%, 09/15/26			30			28,275
5.50%, 05/15/27			29			26,897
4.88%, 01/15/28			15			13,162
						303,497
Wireless Telecommunication Services — 2.8%
Digicel Ltd., 6.00%, 04/15/21(b)			200			180,250
Hughes Satellite Systems Corp.:
7.63%, 06/15/21			10			10,375
5.25%, 08/01/26			25			22,906
Sprint Corp.:
7.88%, 09/15/23			101			103,652
7.13%, 06/15/24			206			204,010
7.63%, 02/15/25			8			8,000
7.63%, 03/01/26			84			82,950
T-Mobile USA, Inc.:
4.00%, 04/15/22			10			9,750
6.38%, 03/01/25			28			28,280
5.13%, 04/15/25			6			5,827
6.50%, 01/15/26			18			18,360
4.50%, 02/01/26			67			61,473
4.75%, 02/01/28			33			29,865
						765,698
Total Corporate Bonds — 76.2% (Cost: $22,121,271)						20,632,410
Floating Rate Loan Interests — 14.8%(g)
Aerospace & Defense — 0.1%
Atlantic Aviation FBO, Inc., Term Loan B, (LIBOR USD 6 Month + 3.75%), 6.13%, 11/30/25(c)			13			12,870
Sequa Mezzanine Holdings LLC, 1st Lien Term Loan, (LIBOR USD 3 Month + 5.00%), 7.41%, 11/28/21			20			18,740
Sequa Mezzanine Holdings LLC, 2nd Lien Term Loan, (LIBOR USD 3 Month + 9.00%), 11.52%, 04/28/22(c)			5			4,725
						36,335
Auto Components — 0.0%(c)
Mavis Tire Express Services Corp., 1st Lien Term Loan, (LIBOR USD 1 Month + 3.25%), 5.75%, 03/15/25			7			6,973
Mavis Tire Express Services Corp., Delayed Draw 1st Lien Term Loan, (LIBOR USD 1 Month + 3.25%), 6.05%, 03/15/25			—	(h)		167
						7,140

Security		Par (000)		Value
Chemicals — 1.4%
Alpha 3 BV, Term Loan, 01/31/24(i)	USD		43	$	40,726
Ascend Performance Materials Operations LLC, 1st Lien Term Loan B, (LIBOR USD 3 Month + 5.25%), 8.05%, 08/12/22(c)			162		159,614
Greenrock Finance, Inc., Term Loan, (LIBOR USD 3 Month + 3.50%), 6.30%, 06/28/24			6		5,821
Invictus Co., Term Loan B, (LIBOR USD 3 Month + 3.00%), 5.50%, 03/28/25			12		11,232
Invictus Co., Term Loan B26, (LIBOR USD 3 Month + 6.75%), 9.25%, 03/30/26			6		5,985
Messer Industries LLC, Term Loan, 10/01/25(i)			82		77,627
Starfruit Finco BV, Term Loan, 10/01/25(c)(i)			91		86,715
					387,720
Commercial Services & Supplies — 0.8%
Access CIG LLC, 2nd Lien Term Loan:
(LIBOR USD 3 Month + 7.75%), 10.46%, 02/27/26			3		3,426
Brand Energy & Infrastructure Services, Inc., Term Loan, (LIBOR USD 3 Month + 4.25%), 6.73% - 6.76%, 06/21/24			131		124,068
GFL Environmental, Inc., Term Loan B, (LIBOR USD 1 Month + 3.00%), 5.52%, 05/30/25			67		62,187
Tempo Acquisition LLC, Term Loan, (LIBOR USD 1 Month + 3.00%), 5.52%, 05/01/24			14		13,101
West Corp., Term Loan, (LIBOR USD 3 Month + 3.50%), 6.03%, 10/10/24			8		7,260
					210,042
Construction & Engineering — 0.3%
Ply Gem, Inc., Term Loan B, (LIBOR USD 3 Month + 3.75%), 6.18%, 04/01/25(c)			41		37,576
SRS Distribution, Inc., Term Loan B, (LIBOR USD 1 Month + 3.25%), 5.77%, 05/23/25			37		34,347
					71,923
Diversified Consumer Services — 0.1%
Laureate Education, Inc., Term Loan, (LIBOR USD 3 Month + 3.50%), 6.03%, 04/26/24			12		11,800
TierPoint LLC, Term Loan, (LIBOR USD 1 Month + 3.75%), 6.27%, 05/06/24			14		12,942
					24,742
Diversified Financial Services — 0.1%
LTI Holdings, Inc., Term Loan, (LIBOR USD 1 Month + 3.50%), 6.02%, 09/06/25			13		12,179
WP CPP Holdings, Term Loan B, (LIBOR USD 3 Month + 3.75%), 6.28%, 03/16/25			6		5,768
					17,947
Diversified Telecommunication Services — 0.6%
Altice France SA, Term Loan, (LIBOR USD 1 Month + 4.00%), 6.46%, 08/14/26			66		62,205
CenturyLink, Inc., Term Loan, (LIBOR USD 1 Month + 2.75%), 5.27%, 01/31/25			82		76,491
Frontier Communications Corp., Term Loan, 03/31/21(i)			22		20,410
					159,106
Electric Utilities — 0.1%
Vistra Operations Co. LLC, Term Loan B3, 12/31/25(i)			16		15,268
Energy Equipment & Services — 1.0%
McDermott International, Inc., Term Loan, 05/12/25(i)			162		150,926
Pioneer Energy Services Corp., Term Loan, (LIBOR USD 1 Month + 7.75%), 10.21%, 11/08/22(c)			80		78,800

SCHEDULES OF INVESTMENTS 91

Schedule of Investments  (continued) December 31, 2018 BlackRock High Yield Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Energy Equipment & Services (continued)
Weatherford International Ltd., Term Loan, (LIBOR USD 1 Month + 1.43%), 3.96%, 07/13/20(c)	USD		36	$	33,974
					263,700
Food Products — 0.1%
CHG PPC Parent LLC, Term Loan, (LIBOR USD 1 Month + 2.75%), 5.27%, 03/31/25			11		10,480
Chobani LLC, Term Loan, (LIBOR USD 1 Month + 3.50%), 6.02%, 10/10/23			8		7,305
JBS USA Lux SA, Term Loan, (LIBOR USD 3 Month + 2.50%), 5.02% - 5.30%, 10/30/22			8		7,801
					25,586
Gas Utilities — 0.1%
Midcoast Operating LP, Term Loan, (LIBOR USD 3 Month + 5.50%), 8.30%, 06/30/25			26		25,116
Health Care Equipment & Supplies — 0.6%
DJO Finance LLC, 1st Lien Term Loan B, 06/08/20(i)			79		78,162
Immucor, Inc., 1st Lien Term Loan, (LIBOR USD 3 Month + 5.00%), 7.80%, 06/15/21			77		75,818
Universal Hospital Services, Inc., Delayed Draw Term Loan B, 10/18/25(c)(i)			9		8,685
					162,665
Health Care Providers & Services — 0.9%
AHP Health Partners, Inc., Term Loan, (LIBOR USD 1 Month + 4.50%), 7.02%, 06/30/25			14		13,686
Auris LuxCo, Term Loan, 07/24/25(i)			15		14,559
Concentra, Inc., 2nd Lien Term Loan, (LIBOR USD 1 Month + 6.50%), 8.88%, 07/25/23			22		21,780
Dentalcorp Perfect Smile ULC, 1st Lien Term Loan, (LIBOR USD 1 Month + 3.75%), 6.27%, 05/31/25			9		8,836
Dentalcorp Perfect Smile ULC, Delayed Draw Term Loan, (LIBOR USD 1 Month + 3.75%), 0.00% - 6.27%, 05/31/25			1		1,248
Envision Healthcare Corp., Term Loan, (LIBOR USD 1 Month + 3.75%), 6.27%, 10/10/25			96		89,431
Gentiva Health Services, Inc., Term Loan, (LIBOR USD 1 Month + 7.00%), 9.56%, 07/02/26			5		5,446
Gentiva Health Services, Inc., Term Loan U, (LIBOR USD 1 Month + 3.75%), 6.31%, 07/02/25(c)			39		37,944
Ortho-Clinical Diagnostics, Inc., Term Loan B, (LIBOR USD 1 Month + 3.25%), 5.76%, 06/30/25			16		14,583
Quorum Health Corp., 1st Lien Term Loan, (LIBOR USD 1 Month + 6.75%), 9.27%, 04/29/22			20		19,719
Team Health Holdings, Inc., Term Loan, (LIBOR USD 1 Month + 2.75%), 5.27%, 02/06/24			24		20,970
					248,202
Health Care Technology — 0.1%
Change Healthcare Holdings LLC, Term Loan B, 03/01/24(i)			31		29,709
Goodrx, Inc., Term Loan, (LIBOR USD 1 Month + 3.00%), 5.43%, 10/10/25			9		8,651
					38,360
Hotels, Restaurants & Leisure — 0.8%
IRB Holding Corp., Term Loan B, (LIBOR USD 1 Month + 3.25%), 5.68%, 02/05/25			24		22,779
Las Vegas Sands LLC, Term Loan, (LIBOR USD 1 Month + 1.75%), 4.27%, 03/27/25			57		53,893
Penn National Gaming, Inc., 1st Lien Term Loan, (LIBOR USD 1 Month + 2.25%), 4.71%, 10/15/25			7		6,742
Stars Group Holdings BV, Term Loan, (LIBOR USD 3 Month + 3.50%), 6.30%, 07/10/25			143		138,146
					221,560

Security		Par (000)		Value
Household Products — 0.0%
Energizer Holdings, Inc., 1st Lien Term Loan B, 06/20/25(i)	USD		5	$	4,819
Industrial Conglomerates — 0.5%
Accudyne Industries LLC, Term Loan, (LIBOR USD 1 Month + 3.00%), 5.52%, 08/18/24			43		40,594
Filtration Group Corp., Term Loan B, (LIBOR USD 1 Month + 3.00%), 5.52%, 03/29/25			7		6,681
PSAV Holdings LLC, 1st Lien Term Loan, (LIBOR USD 3 Month + 3.25%), 5.77% - 6.05%, 02/21/25			12		11,255
PSAV Holdings LLC, 2nd Lien Term Loan, 09/01/25(c)(i)			7		6,858
Uber Technologies, Inc., Term Loan, (LIBOR USD 1 Month + 4.00%), 6.39%, 03/14/25(c)			44		42,576
Vertiv Co., Term Loan B, (LIBOR USD 3 Month + 4.00%), 6.71%, 11/30/23			22		20,111
					128,075
Insurance — 0.5%
Alliant Holdings Intermediate LLC, Term Loan, (LIBOR USD 1 Month + 2.75%), 5.21%, 05/09/25			5		4,692
Asurion LLC, 2nd Lien Term Loan B2, (LIBOR USD 1 Month + 6.50%), 9.02%, 08/04/25			46		45,396
Sedgwick, 1st Lien Term Loan, 11/06/25(i)			69		65,751
USI, Inc., 1st Lien Term Loan B, (LIBOR USD 3 Month + 3.00%), 5.80%, 05/16/24			22		20,505
					136,344
IT Services — 1.1%
Boxer Parent Co., Inc., Term Loan B, (LIBOR USD 3 Month + 4.25%), 7.05%, 10/02/25			44		42,336
CCC Information Services, Inc., 2nd Lien Term Loan, (LIBOR USD 1 Month + 6.75%), 9.27%, 04/28/25			4		3,930
CCC Information Services, Inc., Term Loan, (LIBOR USD 1 Month + 3.00%), 5.53%, 04/29/24			15		13,784
Deck Chassis Acquisition, Inc., Term Loan, (LIBOR USD 3 Month + 6.00%), 8.53%, 06/15/23(c)			3		2,575
Mitchell International, Inc., 1st Lien Term Loan, (LIBOR USD 1 Month + 3.25%), 5.77%, 11/29/24			21		19,837
Mitchell International, Inc., 2nd Lien Term Loan, (LIBOR USD 1 Month + 7.25%), 9.77%, 12/01/25			10		9,694
Peak 10 Holding Corp., 2nd Lien Term Loan, (LIBOR USD 3 Month + 7.25%), 9.79%, 08/01/25			7		6,239
Peak 10 Holding Corp., Term Loan, (LIBOR USD 3 Month + 3.50%), 6.31%, 08/01/24			17		15,221
Renaissance Learning, Inc., Term Loan, (LIBOR USD 1 Month + 3.25%), 5.77%, 05/24/25			12		11,052
SS&C Technologies Holdings, Inc., Term Loan B, (LIBOR USD 1 Month + 2.25%), 4.77%, 04/16/25			34		31,713
SS&C Technologies, Inc., 1st Lien Term Loan B5, (LIBOR USD 1 Month + 2.25%), 4.77%, 04/16/25			22		20,669
Verscend Holding Corp., Term Loan B, (LIBOR USD 1 Month + 4.50%), 7.02%, 08/27/25			126		121,689
					298,739
Life Sciences Tools & Services — 0.0%
Albany Molecular Research, Inc., Term Loan, (LIBOR USD 1 Month + 3.25%), 5.77%, 08/30/24			9		8,363
Machinery — 0.3%
Altra Industrial Motion Corp., Term Loan, (LIBOR USD 1 Month + 2.00%), 4.52%, 09/26/25			18		16,801
Brookfield WEC Holdings, Inc., 2nd Lien Term Loan, (LIBOR USD 1 Month + 6.75%), 9.27%, 08/03/26			10		9,750
Titan Acquisition Ltd., Term Loan, 03/28/25(i)			64		58,097
					84,648

92 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock High Yield Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Media — 1.4%
Ascend Learning LLC, Term Loan B, (LIBOR USD 1 Month + 3.00%), 5.52%, 07/12/24	USD		7	$	6,515
Charter Communications Operating LLC, Term Loan, (LIBOR USD 1 Month + 1.50%), 4.03%, 03/31/23			133		126,350
Gray Television, Inc., Term Loan, 11/02/25(i)			9		8,679
Intelsat Jackson Holdings SA, Term Loan:
(LIBOR USD 1 Month + 3.75%), 6.26% , 11/27/23			8		8,115
(LIBOR USD 6 Month + 6.63%), 6.63% , 01/02/24			164		161,539
(LIBOR USD 1 Month + 4.50%), 7.01% , 01/02/24			31		30,903
Xplornet Communications, Inc., Term Loan, (LIBOR USD 3 Month + 4.00%), 6.80%, 09/09/21(c)			28		27,373
					369,474
Multiline Retail — 0.1%
Neiman Marcus Group Ltd. LLC, Term Loan, (LIBOR USD 1 Month + 3.25%), 5.63%, 10/25/20			28		23,945
Multi-Utilities — 0.0%
Exgen Renewables IV LLC, Term Loan, (LIBOR USD 3 Month + 3.00%), 5.71%, 11/28/24			9		8,341
Oil, Gas & Consumable Fuels — 0.7%
BCP Raptor II LLC, Term Loan, (LIBOR USD 3 Month + 4.75%), 7.14%, 10/22/25			9		8,314
Bronco Midstream Funding LLC, Term Loan B, (LIBOR USD 1 Month + 3.50%), 6.01%, 08/14/23			3		3,036
California Resources Corp., Term Loan:
, 12/31/21(i)			55		53,527
(LIBOR USD 1 Month + 4.75%), 7.26% , 12/31/22			76		73,590
CNX Resources Corp., Term Loan, (LIBOR USD 1 Month + 6.00%), 8.53%, 11/28/22			32		31,888
Gavilan Resources LLC, 2nd Lien Term Loan, (LIBOR USD 1 Month + 6.00%), 8.50%, 03/01/24			14		10,793
					181,148
Pharmaceuticals — 0.4%
Amneal Pharmaceuticals LLC, Term Loan B18, (LIBOR USD 1 Month + 3.50%), 6.06%, 03/21/25			30		28,429
Bausch Health Co., Inc., Term Loan, (LIBOR USD 1 Month + 3.00%), 5.38%, 06/02/25			36		33,870
Endo Pharmaceuticals, Inc., Term Loan B, (LIBOR USD 1 Month + 4.25%), 6.81%, 04/29/24			38		35,549
Valeant Pharmaceuticals International, Inc., Term Loan, (LIBOR USD 1 Month + 2.75%), 5.13%, 11/14/25			20		18,701
					116,549
Real Estate Management & Development — 0.0%
Forest City, Term Loan B, (LIBOR USD 6 Month + 4.00%), 6.38%, 12/31/25			9		8,760
Software — 1.5%
Financial & Risk US Holdings, Inc., Term Loan, (LIBOR USD 1 Month + 3.75%), 6.27%, 10/01/25			305		289,750
Infor US, Inc., Term Loan, (LIBOR USD 1 Month + 2.75%), 5.27%, 02/01/22			10		9,440
Kronos, Inc., 2nd Lien Term Loan B, (LIBOR USD 3 Month + 8.25%), 9.25%, 11/01/24			63		61,602
McAfee LLC, Term Loan, (LIBOR USD 1 Month + 3.75%), 6.27%, 09/30/24			15		14,178
PowerSchool Group LLC, 1st Lien Term Loan, (LIBOR USD 1 Month + 3.25%), 5.63%, 07/31/25(c)			9		8,505
SS&C Technologies Holdings, Inc., Term Loan, (LIBOR USD 1 Month + 2.25%), 4.77%, 04/16/25			12		11,586
					395,061

Security		Par (000)		Value
Specialty Retail — 0.0%
Belron Finance US LLC, Term Loan B, (LIBOR USD 3 Month + 2.25%), 4.84%, 11/07/24(c)	USD		13	$	12,259
Trading Companies & Distributors — 0.1%
Beacon Roofing Supply, Inc., Term Loan B, (LIBOR USD 1 Month + 2.25%), 4.68%, 01/02/25			14		13,186
Wireless Telecommunication Services — 1.1%
Digicel International Finance Ltd., Term Loan, (LIBOR USD 3 Month + 3.25%), 5.96%, 05/27/24			26		23,687
Ligado Networks LLC, Term Loan, (LIBOR USD 3 Month + 12.50%), 15.27%, 12/07/20			74		13,938
New Lightsquared LLC, 1st Lien Term Loan, (LIBOR USD 3 Month + 0.00%), 11.52%, 12/07/20			288		195,941
Sprint Communications, Inc., Term Loan, (LIBOR USD 1 Month + 3.00%), 5.56%, 02/02/24			63		60,795
					294,361
Total Floating Rate Loan Interests — 14.8% (Cost: $4,275,732)					3,999,484
Preferred Securities — 2.6%
Capital Trusts — 1.8%(g)(j)
Banks — 1.6%
Bank of America Corp.:
Series X, 6.25%			66		65,208
Series Z, 6.50%			33		33,412
Series AA, 6.10%			106		104,410
CIT Group, Inc., Series A, 5.80%			26		23,530
JPMorgan Chase & Co.:
Series V, 5.00%			65		62,725
Series Q, 5.15%			20		19,052
Series R, 6.00%			5		4,887
Series U, 6.13%			7		6,948
Series X, 6.10%			78		77,512
Wells Fargo & Co.:
Series S, 5.90%			15		14,291
Series U, 5.87%			34		33,608
					445,583
Capital Markets — 0.2%
Goldman Sachs Group, Inc. (The), Series P, 5.00%			20		16,748
Morgan Stanley, Series H, 5.45%			27		26,261
					43,009
Total Capital Trusts — 1.8% (Cost: $517,601)					488,592
		Shares
Trust Preferreds — 0.8%
Banks — 0.8%
GMAC Capital Trust I, Series 2, 8.40%, 02/15/40(g)			8,676		219,937
Total Trust Preferreds — 0.8% (Cost: $227,891)					219,937
Total Preferred Securities — 2.6% (Cost: $745,492)					708,529
Total Long-Term Investments — 94.9% (Cost: $27,593,598)					25,683,191

SCHEDULES OF INVESTMENTS 93

Schedule of Investments  (continued) December 31, 2018 BlackRock High Yield Portfolio (Percentages shown are based on Net Assets)

Security	Shares		Value
Short-Term Securities — 5.2%(k)
BlackRock Liquidity Funds, T-Fund, Institutional Class, 2.32%(l)		1,355,813	$	1,355,813
JPMorgan US Treasury Plus Money Market Fund, Agency Class, 2.24%		52,133		52,134
Total Short-Term Securities — 5.2% (Cost: $1,407,947)				1,407,947
Total Investments — 100.1% (Cost: $29,001,545)				27,091,138
Liabilities in Excess of Other Assets — (0.1)%				(23,279	)
Net Assets — 100.0%			$	27,067,859

^(a)  Non-income producing security.

^(b)  Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

^(c)  Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy.

^(d)  Issuer filed for bankruptcy and/or is in default.

^(e)  Payment-in-kind security which may pay interest/dividends in additional par/shares and/or in cash. Rates shown are the current rate and possible payment rates.

^(f)  Convertible security.

^(g)  Variable rate security. Rate shown is the rate in effect as of period end.

^(h)  Amount is less than $500.

⁽ⁱ⁾  Represents an unsettled loan commitment at period end. Certain details associated with this purchase are not known prior to the settlement date, including coupon rate.

^(j)  Perpetual security with no stated maturity date.

^(k)  Annualized 7-day yield as of period end.

^(l)  During the year ended December 31, 2018, investments in issuers considered to be affiliates of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, and/or related parties of the Fund were as follows:

Affiliate	Shares Held at 12/31/17		Shares Purchased			Shares Sold			Shares Held at 12/31/18		Value at 12/31/18		Income		Net Realized Gain (Loss) (a)			Change in Unrealized Appreciation (Depreciation)
BlackRock Liquidity Funds, T-Fund, Institutional Class		228,778		1,127,035	(b)		—			1,355,813	$	1,355,813	$	9,029	$	—		$	—
iShares iBoxx $ High Yield Corporate Bond ETF		472		—			(472	)		—		—		334		(1,178	)		270
											$	1,355,813	$	9,363	$	(1,178	)	$	270

^(a)  Includes net capital gains distributions.

^(b)  Represents net shares purchased.

For Fund compliance purposes, the Fund’s industry classifications refer to one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

Description	Number of Contracts		Expiration Date		Notional Amount (000)		Value/ Unrealized Appreciation (Depreciation)
Long Contracts
U.S. Treasury 2 Year Note		6		03/29/19	$	1,274	$	3,658
U.S. Treasury 5 Year Note		6		03/29/19		688		4,278
							$	7,936

Forward Foreign Currency Exchange Contracts

Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
EUR	282,000	USD	322,371	Citibank NA		02/05/19	$	1,668

94 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock High Yield Portfolio

Centrally Cleared Credit Default Swaps — Sell Protection

Reference Obligation/Index	Financing Rate Received by the Fund			Payment Frequency		Termination Date		Credit Rating (a)	Notional Amount (000) (b)		Value		Upfront Premium Paid (Received)		Unrealized Appreciation (Depreciation)
CDX.NA.HY.31.V1		5.00	%		Quarterly		12/20/23	B+	USD	269	$	5,811	$	10,483	$	(4,672	)

^(a)  Using S&P’s rating of the issuer or the underlying securities of the index, as applicable.

^(b)  The maximum potential amount the Fund may pay should a negative credit event take place as defined under the terms of the agreement.

OTC Credit Default Swaps — Sell Protection

Reference Obligation/Index	Financing Rate Received by the Fund			Payment Frequency		Counterparty		Termination Date		Credit Rating (a)	Notional Amount (000) (b)		Value			Upfront Premium Paid (Received)			Unrealized Appreciation (Depreciation)
CenturyLink, Inc.		1.00	%		Quarterly		Barclays Bank plc		12/20/23	B+	USD	8	$	(1,272	)	$	(609	)	$	(663	)
Chesapeake Energy Corp.		5.00			Quarterly		Barclays Bank plc		12/20/23	B-	USD	8		(1,089	)		15			(1,104	)
Chesapeake Energy Corp.		5.00			Quarterly		Barclays Bank plc		12/20/23	B-	USD	16		(2,177	)		149			(2,326	)
CenturyLink, Inc.		1.00			Quarterly		Barclays Bank plc		06/20/25	B+	USD	6		(1,305	)		(1,031	)		(274	)
													$	(5,843	)	$	(1,476	)	$	(4,367	)

^(a)  Using S&P’s rating of the issuer or the underlying securities of the index, as applicable.

^(b)  The maximum potential amount the Fund may pay should a negative credit event take place as defined under the terms of the agreement.

Balances reported in the Statements of Assets and Liabilities for Centrally Cleared Swaps and OTC Swaps

	Swap Premiums Paid		Swap Premiums Received			Unrealized Appreciation		Unrealized Depreciation
Centrally Cleared Swaps(a)	$	10,483	$	—		$	—	$	(4,672	)
OTC Swaps		164		(1,640	)		—		(4,367	)

^(a)  Includes cumulative appreciation (depreciation) on centrally cleared swaps, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities and is net of any previously paid (received) swap premium amounts.

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

	Commodity Contracts		Credit Contracts		Equity Contracts		Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Assets — Derivative Financial Instruments
Futures contracts
Net unrealized appreciation(a)	$	—	$	—	$	—	$	—	$	7,936	$	—	$	7,936
Forward foreign currency exchange contracts
Unrealized appreciation on forward foreign currency exchange contracts		—		—		—		1,668		—		—		1,668
Swaps — OTC
Unrealized appreciation on OTC swaps; Swap premiums paid		—		164		—		—		—		—		164
	$	—	$	164	$	—	$	1,668	$	7,936	$	—	$	9,768
Liabilities — Derivative Financial Instruments
Swaps — centrally cleared
Net unrealized depreciation(a)	$	—	$	4,672	$	—	$	—	$	—	$	—	$	4,672
Swaps — OTC
Unrealized depreciation on OTC swaps; Swap premiums received		—		6,007		—		—		—		—		6,007
	$	—	$	10,679	$	—	$	—	$	—	$	—	$	10,679

^(a)  Includes cumulative appreciation (depreciation) on futures contracts and centrally cleared swaps, if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

SCHEDULES OF INVESTMENTS 95

Schedule of Investments  (continued) December 31, 2018 BlackRock High Yield Portfolio

For the year ended December 31, 2018, the effect of derivative financial instruments in the Statements of Operations were as follows:

	Commodity Contracts		Credit Contracts			Equity Contracts			Foreign Currency Exchange Contracts			Interest Rate Contracts		Other Contracts		Total
Net Realized Gain (Loss) from:
Futures contracts	$	—	$	—		$	(820	)	$	—		$	7,044	$	—	$	6,224
Forward foreign currency exchange contracts		—		—			—			(17,312	)		—		—		(17,312	)
Options purchased(a)		—		—			(22,793	)		—			—		—		(22,793	)
Options written		—		—			10,486			—			—		—		10,486
Swaps		—		17,284			—			—			—		—		17,284
	$	—	$	17,284		$	(13,127	)	$	(17,312	)	$	7,044	$	—	$	(6,111	)
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts	$	—	$	—		$	—		$	—		$	7,035	$	—	$	7,035
Forward foreign currency exchange contracts		—		—			—			3,209			—		—		3,209
Swaps		—		(8,927	)		—			—			—		—		(8,927	)
	$	—	$	(8,927	)	$	—		$	3,209		$	7,035	$	—	$	1,317

^(a)  Options purchased are included in net realized gain (loss) from investments — unaffiliated.

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	490,500
Average notional value of contracts — short		148,013
Forward foreign currency exchange contracts:
Average amounts sold — in USD		192,565
Credit default swaps:
Average notional value — buy protection		8,253
Average notional value — sell protection		554,875

For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

Derivative Financial Instruments — Offsetting as of Period End

The Fund’s derivative assets and liabilities (by type) were as follows:

	Assets			Liabilities
Derivative Financial Instruments:
Futures contracts	$	2,343		$	—
Forward foreign currency exchange contracts		1,668			—
Swaps — Centrally cleared		309			—
Swaps — OTC(a)		164			6,007
Total derivative assets and liabilities in the Statements of Assets and Liabilities	$	4,484		$	6,007
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)		(2,652	)		—
Total derivative assets and liabilities subject to an MNA	$	1,832		$	6,007

^(a)  Includes unrealized appreciation (depreciation) on OTC swaps and swap premiums (paid/received) in the Statements of Assets and Liabilities.

The following tables present the Fund’s derivative assets and liabilities by counterparty net of amounts available for offset under an MNA and net of the related collateral received and pledged by the Fund:

Counterparty	Derivative Assets Subject to an MNA by Counterparty		Derivatives Available for Offset (a)			Non-cash Collateral Received		Cash Collateral Received		Net Amount of Derivative Assets (b)
Citibank NA	$	1,668	$	—		$	—	$	—	$	1,668
Barclays Bank plc		164		(164	)		—		—		—
	$	1,832	$	(164	)	$	—	$	—	$	1,668

96 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock High Yield Portfolio

Counterparty	Derivative Liabilities Subject to an MNA by Counterparty		Derivatives Available for Offset (a)			Non-cash Collateral Pledged		Cash Collateral Pledged		Net Amount of Derivative Liabilities  (c)
Barclays Bank plc	$	6,007	$	(164	)	$	—	$	—	$	5,843

^(a)  The amount of derivatives available for offset is limited to the amount of derivative assets and/or liabilities that are subject to an MNA.

^(b)  Net amount represents the net amount receivable from the counterparty in the event of default.

^(c)  Net amount represents the net amount payable due to the counterparty in the event of default.

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:

	Level 1		Level 2			Level 3			Total
Assets:
Investments:
Long-Term Investments:
Common Stocks(a)	$	342,768	$	—		$	—		$	342,768
Corporate Bonds(a)		—		20,632,410			—			20,632,410
Floating Rate Loan Interests:
Aerospace & Defense		—		18,740			17,595			36,335
Auto Components		—		—			7,140			7,140
Chemicals		—		141,391			246,329			387,720
Commercial Services & Supplies		—		210,042			—			210,042
Construction & Engineering		—		34,347			37,576			71,923
Diversified Consumer Services		—		24,742			—			24,742
Diversified Financial Services		—		17,947			—			17,947
Diversified Telecommunication Services		—		159,106			—			159,106
Electric Utilities		—		15,268			—			15,268
Energy Equipment & Services		—		150,926			112,774			263,700
Food Products		—		25,586			—			25,586
Gas Utilities		—		25,116			—			25,116
Health Care Equipment & Supplies		—		153,980			8,685			162,665
Health Care Providers & Services		—		210,258			37,944			248,202
Health Care Technology		—		38,360			—			38,360
Hotels, Restaurants & Leisure		—		221,560			—			221,560
Household Products		—		4,819			—			4,819
Industrial Conglomerates		—		78,641			49,434			128,075
Insurance		—		136,344			—			136,344
IT Services		—		296,164			2,575			298,739
Life Sciences Tools & Services		—		8,363			—			8,363
Machinery		—		84,648			—			84,648
Media		—		342,101			27,373			369,474
Multiline Retail		—		23,945			—			23,945
Multi-Utilities		—		8,341			—			8,341
Oil, Gas & Consumable Fuels		—		181,148			—			181,148
Pharmaceuticals		—		116,549			—			116,549
Real Estate Management & Development		—		8,760			—			8,760
Software		—		386,556			8,505			395,061
Specialty Retail		—		—			12,259			12,259
Trading Companies & Distributors		—		13,186			—			13,186
Wireless Telecommunication Services		—		294,361			—			294,361
Preferred Securities:
Banks		219,937		445,583			—			665,520
Capital Markets		—		43,009			—			43,009
Short-Term Securities		1,407,947		—			—			1,407,947
Liabilities:
Unfunded Floating Rate Loan Interests(b)		—		(42	)		(32	)		(74	)
Total Investments	$	1,970,652	$	24,552,255		$	568,157		$	27,091,064
Derivative Financial Instruments(c)

SCHEDULES OF INVESTMENTS 97

Schedule of Investments  (continued) December 31, 2018 BlackRock High Yield Portfolio

	Level 1		Level 2			Level 3		Total
Assets:
Foreign currency exchange contracts	$	—	$	1,668		$	—	$	1,668
Interest rate contracts		7,936		—			—		7,936
Liabilities:
Credit contracts		—		(9,039	)		—		(9,039	)
	$	7,936	$	(7,371	)	$	—	$	565

^(a)  See above Schedule of Investments for values in each industry.

^(b)  Unfunded floating rate loan interests are valued at the unrealized appreciation (depreciation) on the commitment.

^(c)  Derivative financial instruments are swaps, futures contracts and foreign currency exchange contracts. Swaps, futures contracts and foreign currency exchange contracts are valued at the unrealized appreciation (depreciation) on the instrument.

During the year ended December 31, 2018, there were no transfers between Level 1 and Level 2.

A reconciliation of Level 3 investments is presented when the Fund had a significant amount of Level 3 investments at the beginning and/or end of the period in relation to net assets. The following table is a reconciliation of Level 3 investments for which significant unobservable inputs were used in determining fair value:

	Corporate Bonds			Floating Rate Loan Interests			Unfunded Floating Rate Loan Interests			Total
Investments:
Assets:
Opening Balance, as of December 31, 2017	$	148,500		$	317,239		$	6		$	465,745
Transfers into Level 3		—			64,102			—			64,102
Transfers out of Level 3		—			(9,090	)		—			(9,090	)
Accrued discounts/premiums		—			1,283			—			1,283
Net realized gain (loss)		3,910			665			—			4,575
Net change in unrealized appreciation (depreciation)(a)(b)		1,500			(19,708	)		(38	)		(18,246	)
Purchases		—			407,923			—			407,923
Sales		(153,910	)		(194,225	)		—			(348,135	)
Closing Balance, as of December 31, 2018	$	—		$	568,189		$	(32	)	$	568,157
Net change in unrealized appreciation (depreciation) on investments still held at December 31, 2018(b)	$	—		$	(20,332	)	$	(38	)	$	(20,364	)

^(a)  Included in the related net change in unrealized appreciation (depreciation) in the Statements of Operations.

^(b)  Any difference between net change in unrealized appreciation (depreciation) and net change in unrealized appreciation (depreciation) on investments still held at December 31, 2018 is generally due to investments no longer held or categorized as Level 3 at period end.

The Fund’s investments that are categorized as Level 3 were valued utilizing third party pricing information without adjustment. Such valuations are based on unobservable inputs. A significant change in third party information could result in a significantly lower or higher value of such Level 3 investments.

See notes to financial statements.

98 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments December 31, 2018 BlackRock U.S. Government Bond Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Asset-Backed Securities — 2.2%(a)
Arbor Realty Commercial Real Estate Notes Ltd., Series 2016-FL1A, Class A, (LIBOR USD 1 Month + 1.70%), 4.16%, 09/15/26(b)	USD		170	$	171,886
BSPRT Issuer Ltd., Series 2017-FL1, Class A, (LIBOR USD 1 Month + 1.35%), 3.81%, 06/15/27(b)			37		36,946
Dryden XXVIII Senior Loan Fund, Series 2013-28A, Class A1LR, (LIBOR USD 3 Month + 1.20%), 3.81%, 08/15/30(b)			500		495,171
Progress Residential Trust, Series 2017-SFR1, Class A, 2.77%, 08/17/34			100		97,786
Romark WM-R Ltd., Series 2018-1A, Class A1, (LIBOR USD 3 Month + 1.03%), 3.50%, 04/20/31(b)			400		393,354
Total Asset-Backed Securities — 2.2% (Cost: $1,206,596)					1,195,143
Foreign Government Obligations — 0.1%
Colombia — 0.0%
Republic of Colombia:
7.50%, 08/26/26	COP		70,000		22,688
7.00%, 06/30/32			51,000		15,462
					38,150
Mexico — 0.1%
United Mexican States, 8.50%, 11/18/38	MXN		10		48,917
Total Foreign Government Obligations — 0.1% (Cost: $85,830)					87,067
Non-Agency Mortgage-Backed Securities — 2.2%
Collateralized Mortgage Obligations — 0.5%
Seasoned Credit Risk Transfer Trust:
Series 2018-2, Class MA, 3.50%, 11/25/57	USD		123		123,787
Series 2018-3, Class MA, 3.50%, 08/25/57			156		156,298
					280,085
Commercial Mortgage-Backed Securities — 1.3%(a)
AREIT Trust, Series 2018-CRE1, Class A, 3.29%, 02/14/35(c)(d)			106		106,104
Commercial Mortgage Trust, Series 2017-PANW, Class A, 3.24%, 10/10/29			350		343,813
CSMC Trust, Series 2016-MFF, Class A, 4.06%, 11/15/33(c)			69		69,507
LMREC, Inc., Series 2016-CRE2, Class A, 4.20%, 11/24/31(c)			94		93,949
RAIT Trust, Series 2017-FL7, Class A, 3.41%, 06/15/37(c)			98		97,523
					710,896
Interest Only Commercial Mortgage-Backed Securities — 0.4%(c)
CFCRE Commercial Mortgage Trust, Series 2016-C4, Class XA, 1.73%, 05/10/58			619		58,283
Core Industrial Trust(a):
Series 2015-TEXW, Class XA, 0.77%, 02/10/34			2,580		52,714
Series 2015-WEST, Class XA, 0.93%, 02/10/37			1,276		64,662
					175,659
Total Non-Agency Mortgage-Backed Securities — 2.2% (Cost: $1,182,088)					1,166,640

Security		Par (000)		Value
U.S. Government Sponsored Agency Securities — 88.3%
Agency Obligations — 10.0%
Federal Home Loan Bank, 4.00%, 04/10/28	USD		400	$	424,856
Federal Home Loan Bank Discount Notes, 2.39%, 01/25/19(e)			5,000		4,992,395
					5,417,251
Collateralized Mortgage Obligations — 1.7%
Federal National Mortgage Association:
Series 2011-8, Class ZA, 4.00%, 02/25/41			256		264,204
Series 2017-69, Class HA, 3.00%, 06/25/46			522		518,927
Government National Mortgage Association Variable Rate Notes, Series 2014-107, Class WX, 6.81%, 07/20/39(f)			121		133,976
					917,107
Commercial Mortgage-Backed Securities — 1.5%
Federal Home Loan Mortgage Corp.:
Series K076, Class A2, 3.90%, 06/25/51			140		146,057
Series K079, Class A2, 3.93%, 06/25/28			260		271,680
Federal Home Loan Mortgage Corp. Variable Rate Notes(f):
Series K082, Class A2, 3.92%, 09/25/28			40		41,756
Series K086, Class A2, 3.86%, 11/25/28			265		275,364
Federal National Mortgage Association ACES Variable Rate Notes, Series 2018-M7, Class A2, 3.05%, 03/25/28(f)			60		58,374
					793,231
Interest Only Commercial Mortgage-Backed Securities — 2.7%
Federal Home Loan Mortgage Corp., Series 2015-K718, Class X2A, 0.10%, 02/25/48(a)(f)			17,915		43,343
Federal National Mortgage Association ACES Variable Rate Notes(f):
Series 2015-M1, Class X2, 0.55%, 09/25/24			5,807		145,803
Series 2016-M4, Class X2, 2.63%, 01/25/39			308		27,642
Government National Mortgage Association Variable Rate Notes:
Series 2002-83, 0.00%, 10/16/42(f)			450		1
Series 2003-17, 0.00%, 03/16/43(f)			897		—
Series 2003-109, 0.00%, 11/16/43(f)			879		167
Series 2016-22, 0.77%, 11/16/55(f)			2,135		114,050
Series 2016-45, 1.01%, 02/16/58(f)			3,219		242,313
Series 2016-113, (LIBOR 1 Month + 0.00%), 1.19%, 02/16/58(b)			1,421		129,033
Series 2016-119, (LIBOR 1 Month + 0.00%), 1.12%, 04/16/58(b)			3,408		282,366
Series 2017-30, 0.76%, 08/16/58(f)			621		40,322
Series 2017-44, 0.70%, 04/17/51(f)			619		36,617
Series 2017-53, 0.69%, 11/16/56(f)			3,883		230,116
Series 2017-54, 0.65%, 12/16/58(f)			148		9,098
Series 2017-61, 0.77%, 05/16/59(f)			422		31,523
Series 2017-64, 0.72%, 11/16/57(f)			769		51,122
Series 2017-72, 0.68%, 04/16/57(f)			1,096		69,850
					1,453,366
Mortgage-Backed Securities — 72.4%
Federal Home Loan Mortgage Corp.:
2.50%, 03/01/30 - 04/01/31			209		204,224
2.50%, 01/15/34(g)			196		191,307
3.00%, 09/01/27 - 12/01/46			528		521,376
3.00%, 01/15/34 - 01/15/49(g)			1,199		1,172,937
3.50%, 04/01/31 - 01/01/48			2,738		2,755,467
3.50%, 01/15/49(g)			9		8,995
4.00%, 01/15/34 - 01/15/49(g)			473		482,408

SCHEDULES OF INVESTMENTS 99

Schedule of Investments  (continued) December 31, 2018 BlackRock U.S. Government Bond Portfolio (Percentages shown are based on Net Assets)

Security		Par (000)		Value
Mortgage-Backed Securities (continued)
4.00%, 08/01/40 - 06/01/48	USD		872	$	896,476
4.50%, 02/01/39 - 08/01/48			454		475,123
4.50%, 01/15/49(g)			150		155,264
5.00%, 11/01/41			119		126,484
5.00%, 01/15/4 9(g)			21		21,992
5.50%, 06/01/41			108		116,087
8.00%, 03/01/30 - 06/01/31			13		13,836
Federal National Mortgage Association:
2.00%, 10/01/31 - 03/01/32			128		122,454
2.50%, 04/01/30 - 02/01/33			724		708,312
3.00%, 04/01/29 - 03/01/47			4,551		4,496,122
3.00%, 01/25/34 - 01/25/49(g)			1,527		1,509,660
3.50%, 04/01/29 - 01/01/48			3,154		3,176,476
3.50%, 01/25/34 - 01/25/49(g)			928		928,970
4.00%, 09/01/33 - 04/01/48			3,980		4,090,724
4.00%, 01/25/49(g)			575		586,141
4.50%, 06/01/26 - 12/01/48			1,776		1,861,358
4.50%, 01/25/49 - 02/25/49(g)			1,671		1,729,457
5.00%, 02/01/35 - 12/01/43			249		263,334
5.00%, 01/25/49(g)			1,294		1,355,364
5.50%, 11/01/21 - 09/01/39			325		345,718
6.00%, 04/01/35 - 09/01/40			225		245,655
6.50%, 05/01/40			48		54,352
Government National Mortgage Association:
3.00%, 02/15/45 - 12/20/46			1,689		1,666,301
3.00%, 01/15/49(g)			315		310,195
3.50%, 01/15/42 - 10/20/46			2,923		2,945,753
3.50%, 01/15/49(g)			605		608,734
4.00%, 10/20/40 - 01/15/48			442		454,890
4.00%, 01/15/49(g)			2,382		2,438,945
4.50%, 12/20/39 - 09/20/48			996		1,041,519
4.50%, 01/15/49(g)			689		712,940
5.00%, 07/15/39 - 07/20/44			84		88,521
5.00%, 01/15/49(g)			161		167,560
					39,051,431
Total U.S. Government Sponsored Agency Securities — 88.3% (Cost: $47,887,125)					47,632,386
U.S. Treasury Obligations — 50.8%
U.S. Treasury Bonds:
4.25%, 05/15/39			190		229,210
4.50%, 08/15/39			184		229,296
4.38%, 11/15/39			185		226,813
3.13%, 02/15/43			720		734,428
2.88%, 05/15/43 - 11/15/46			929		906,130
3.63%, 08/15/43			687		760,450
3.75%, 11/15/43			729		823,343
3.00%, 02/15/47 - 08/15/48			1,126		1,120,928
U.S. Treasury Inflation Linked Notes, 0.63%, 04/15/23			611		600,705
U.S. Treasury Notes:
1.25%, 08/31/19			1,846		1,829,343
1.00%, 10/15/19(h)			1,846		1,822,709
1.63%, 06/30/20 - 07/31/20(h)			2,308		2,276,040
2.63%, 08/31/20(h)			2,520		2,523,347
1.13%, 06/30/21(h)			1,293		1,251,432
2.25%, 07/31/21(h)			1,293		1,285,828
2.75%, 09/15/21 - 08/31/25			1,225		1,236,794
2.13%, 09/30/21(h)			1,293		1,280,727
1.88%, 04/30/22			1,293		1,268,251
1.63%, 10/31/23			1,016		975,161
2.25%, 01/31/24 - 02/15/27			2,226		2,180,907
2.00%, 04/30/24 - 05/31/24(h)			2,216		2,156,791
2.00%, 08/15/25 - 11/15/26			1,226		1,174,689

Security		Par (000)		Value
U.S. Treasury Obligations (continued)
2.88%, 08/15/28	USD		495	$	502,657
Total U.S. Treasury Obligations — 50.8% (Cost: $27,432,151)					27,395,979
Total Long-Term Investments — 143.6% (Cost: $77,793,790)					77,477,215
Short-Term Securities — 3.9%
Commercial Paper — 0.9%
Macquarie Bank Ltd., 3.27%, 10/11/19(e)			500		488,013
Total Commercial Paper — 0.9% (Cost: $487,501)					488,013
		Shares
Money Market Funds — 3.0%
BlackRock Liquidity Funds, T-Fund, Institutional Class, 2.32%(i)(j)			1,608,196		1,608,196
Total Money Market Funds — 3.0% (Cost: $1,608,196)					1,608,196
Total Short-Term Securities — 3.9% (Cost: $2,095,697)					2,096,209
Total Options Purchased — 0.3% (Cost: $94,075)					137,265
Total Investments Before Options Written and TBA Sale Commitments — 147.8% (Cost: $79,983,562)					79,710,689
Total Options Written — (0.2)% (Premium Received — $47,816)					(114,015	)
		Par (000)
TBA Sale Commitments — (28.0)%(g)
Mortgage-Backed Securities — (28.0)%
Federal Home Loan Mortgage Corp.:
2.50%, 01/15/34	USD		14		(13,665	)
3.00%, 01/15/34 - 01/15/49			50		(49,141	)
3.50%, 01/15/34 - 01/15/49			1,249		(1,248,948	)
4.00%, 01/15/49			4		(4,077	)
4.50%, 01/15/49			106		(109,720	)
Federal National Mortgage Association:
2.00%, 01/25/34			139		(133,030	)
2.50%, 01/25/34			112		(109,182	)
3.00%, 01/25/49 - 02/25/49			1,343		(1,308,419	)
3.50%, 01/25/34 - 02/25/49			5,030		(5,031,815	)
4.00%, 01/25/34 - 01/25/49			2,366		(2,412,862	)
4.50%, 01/25/49			1,664		(1,723,053	)
5.50%, 01/25/49			74		(78,301	)
6.00%, 01/25/49			69		(74,100	)
Government National Mortgage Association:
3.00%, 01/15/49 - 02/15/49			803		(790,068	)
3.50%, 01/15/49 - 02/15/49			1,302		(1,309,944	)
4.00%, 01/15/49			665		(680,898	)
Total TBA Sale Commitments — (28.0)% (Proceeds: $14,894,774)					(15,077,223	)
Total Investments Net of Options Written and TBA Sale Commitments — 119.6% (Cost: $65,040,972)					64,519,451
Liabilities in Excess of Other Assets — (19.6)%					(10,578,353	)
Net Assets — 100.0%				$	53,941,098

100 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock U.S. Government Bond Portfolio (Percentages shown are based on Net Assets)

^(a) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

^(b) Variable rate security. Security may be issued at a fixed coupon rate, which converts to a variable rate at a specified date. Rate shown is the rate in effect as of period end.

^(c) Variable or floating rate security, which interest rate adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. Rate shown is the rate in effect as of period end.

^(d) Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy.

^(e) Rates are discount rates or a range of discount rates as of period end.

^(f) Variable rate security. Rate shown is the rate in effect as of period end.

^(g) Represents or includes a TBA transaction.

^(h) All or a portion of the securities has been pledged as collateral in connection with outstanding reverse repurchase agreements.

⁽ⁱ⁾ Annualized 7-day yield as of period end.

^(j) During the year ended December 31, 2018, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

Affiliate	Shares Held at 12/31/17		Net Activity			Shares Held at 12/31/18		Value at 12/31/18		Income		Net Realized Gain (Loss)(a)		Change in Unrealized Appreciation (Depreciation)
BlackRock Liquidity Funds, T-Fund, Institutional Class		1,681,021		(72,825	)		1,608,196	$	1,608,196	$	30,122	$	—	$	—

^(a) Includes net capital gain distributions, if applicable.

Reverse Repurchase Agreements

Counterparty	Interest Rate			Trade Date		Maturity Date		Face Value		Face Value Including Accrued Interest		Type of Non-Cash Underlying Collateral	Remaining Contractual Maturity of the Agreements
BNP Paribas SA		3.12	%		12/31/18		01/02/19	$	2,545,200	$	2,545,421	U.S. Treasury Obligations	Overnight
Merrill Lynch, Pierce, Fenner & Smith, Inc.		3.20	%		12/31/18		01/02/19		1,077,530		1,077,626	U.S. Treasury Obligations	Overnight
Merrill Lynch, Pierce, Fenner & Smith, Inc.		3.20	%		12/31/18		01/02/19		1,249,361		1,249,472	U.S. Treasury Obligations	Overnight
Merrill Lynch, Pierce, Fenner & Smith, Inc.		3.20	%		12/31/18		01/02/19		1,138,132		1,138,233	U.S. Treasury Obligations	Overnight
Merrill Lynch, Pierce, Fenner & Smith, Inc.		3.20	%		12/31/18		01/02/19		1,080,300		1,080,396	U.S. Treasury Obligations	Overnight
Merrill Lynch, Pierce, Fenner & Smith, Inc.		3.20	%		12/31/18		01/02/19		1,296,233		1,296,348	U.S. Treasury Obligations	Overnight
Merrill Lynch, Pierce, Fenner & Smith, Inc.		3.20	%		12/31/18		01/02/19		1,827,540		1,827,702	U.S. Treasury Obligations	Overnight
Merrill Lynch, Pierce, Fenner & Smith, Inc.		3.20	%		12/31/18		01/02/19		1,286,535		1,286,649	U.S. Treasury Obligations	Overnight
Merrill Lynch, Pierce, Fenner & Smith, Inc.		3.20	%		12/31/18		01/02/19		1,145,345		1,145,447	U.S. Treasury Obligations	Overnight
								$	12,646,176	$	12,647,294

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

Description	Number of Contracts		Expiration Date		Notional Amount (000)		Value/ Unrealized Appreciation (Depreciation)
Long Contracts
U.S. Treasury 10 Year Ultra Bond		2		03/20/19	$	260	$	1,761
U.S. Treasury Long Bond		8		03/20/19		1,168		20,315
U.S. Treasury 2 Year Note		60		03/29/19		12,739		71,026
U.S. Treasury 5 Year Note		38		03/29/19		4,358		28,103
								121,205

SCHEDULES OF INVESTMENTS 101

Schedule of Investments  (continued) December 31, 2018 BlackRock U.S. Government Bond Portfolio

Description	Number of Contracts		Expiration Date		Notional Amount (000)		Value/ Unrealized Appreciation (Depreciation)
Short Contracts
Euro-Bund		4		03/07/19	$	750	$	(4,147	)
Euro-Buxl		1		03/07/19		207		927
U.S. Treasury 10 Year Note		10		03/20/19		1,220		(8,732	)
U.S. Treasury Ultra Bond		1		03/20/19		161		(7,395	)
3 Month Eurodollar		17		12/14/20		4,145		(17,239	)
								(36,586	)
							$	84,619

Forward Foreign Currency Exchange Contracts

Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
BRL	69,913	USD	18,000	Citibank NA		01/03/19	$	39
USD	8,961	BRL	34,613	Goldman Sachs International		01/03/19		30
ARS	192,200	USD	5,000	Citibank NA		01/16/19		8
BRL	38,829	USD	10,000	Goldman Sachs International		01/16/19		9
USD	12,800	CLP	8,710,069	BNP Paribas SA		01/16/19		246
USD	10,000	RUB	674,100	Bank of America NA		01/16/19		343
USD	20,000	ZAR	287,605	BNP Paribas SA		01/16/19		41
IDR	308,100,000	USD	20,000	Barclays Bank plc		01/18/19		1,348
JPY	183,473,171	USD	1,640,207	HSBC Bank plc		01/22/19		36,412
GBP	219,000	USD	278,092	Barclays Bank plc		03/20/19		2,084
USD	194,550	EUR	150,000	Deutsche Bank AG		12/13/19		17,457
USD	195,810	EUR	150,000	Deutsche Bank AG		02/25/20		17,628
JPY	19,510,000	USD	180,782	JPMorgan Chase Bank NA		03/16/20		4,003
USD	194,750	JPY	19,510,000	HSBC Bank plc		03/16/20		9,965
								89,613
USD	9,039	BRL	35,406	Goldman Sachs International		01/03/19		(96	)
CLP	8,564,736	USD	12,800	Deutsche Bank AG		01/16/19		(455	)
RUB	664,600	USD	10,000	Bank of America NA		01/16/19		(479	)
USD	10,000	KRW	11,261,100	Citibank NA		01/16/19		(116	)
USD	300	MXN	6,102	JPMorgan Chase Bank NA		01/16/19		(10	)
USD	10,000	MXN	201,342	Citibank NA		01/16/19		(225	)
ZAR	141,140	USD	10,000	UBS AG		01/16/19		(205	)
ZAR	142,448	USD	10,000	HSBC Bank plc		01/16/19		(115	)
USD	20,000	IDR	294,940,000	JPMorgan Chase Bank NA		01/18/19		(436	)
USD	1,644,312	JPY	183,473,171	JPMorgan Chase Bank NA		01/22/19		(32,307	)
USD	2,048	COP	6,736,000	JPMorgan Chase Bank NA		01/23/19		(24	)
USD	4,429	COP	14,412,000	HSBC Bank plc		01/23/19		(4	)
USD	14,558	COP	48,070,000	Goldman Sachs International		01/23/19		(228	)
USD	18,179	COP	60,000,000	UBS AG		01/23/19		(277	)
USD	48,114	MXN	970,000	Citibank NA		01/23/19		(1,086	)
BRL	34,680	USD	8,961	Goldman Sachs International		02/04/19		(31	)
USD	28,288	MXN	571,000	Standard Chartered Bank		02/05/19		(610	)
USD	277,644	GBP	219,000	Morgan Stanley & Co. International plc		03/20/19		(2,533	)
EUR	150,000	USD	183,528	JPMorgan Chase Bank NA		12/13/19		(6,435	)
EUR	150,000	USD	184,852	JPMorgan Chase Bank NA		02/25/20		(6,670	)
								(52,342	)
	Net Unrealized Appreciation						$	37,271

102 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock U.S. Government Bond Portfolio

OTC Barrier Options Purchased

Description

Type of Option

Counterparty

Expiration Date

Exercise Price

Barrier Price/Range

Notional Amount (000)

Value

Put

USD Currency

Up and In

Deutsche Bank AG

01/07/19

BRL

3.60

BRL

4.00

USD

40

$

—

USD Currency

Up and In

Deutsche Bank AG

02/07/19

BRL

3.50

BRL

4.00

USD

29

—

$

—

OTC Interest Rate Swaptions Purchased

Paid by the Fund

Received by the Fund

Expiration Date

Exercise Rate

Notional Amount (000)

Description

Rate

Frequency

Rate

Frequency

Counterparty

Value

Call

2-Year Interest Rate Swap

3 month LIBOR

Quarterly

3.00%

Semi-Annual

Barclays Bank plc

05/31/19

3.00

%

USD

5,400

$

46,661

10-Year Interest Rate Swap

3 month LIBOR

Quarterly

2.75%

Semi-Annual

Citibank NA

04/24/19

2.75

%

USD

320

4,579

10-Year Interest Rate Swap

3 month LIBOR

Quarterly

2.75%

Semi-Annual

Citibank NA

04/24/19

2.75

%

USD

70

1,002

10-Year Interest Rate Swap

3 month LIBOR

Quarterly

2.70%

Semi-Annual

Barclays Bank plc

06/10/19

2.70

%

USD

179

2,609

10-Year Interest Rate Swap

3 month LIBOR

Quarterly

3.04%

Semi-Annual

JPMorgan Chase Bank NA

04/27/38

3.04

%

USD

790

45,135

99,986

Put

10-Year Interest Rate Swap

3.77%

Semi-Annual

3 month LIBOR

Quarterly

Citibank NA

04/24/19

3.77

%

USD

195

39

10-Year Interest Rate Swap

3.04%

Semi-Annual

3 month LIBOR

Quarterly

JPMorgan Chase Bank NA

04/27/38

3.04

%

USD

790

37,240

37,279

$

137,265

OTC Interest Rate Swaptions Written

Description	Paid by the Fund			Received by the Fund			Counterparty	Expiration Date		Exercise Rate			Notional Amount (000)		Value
	Rate		Frequency	Rate		Frequency
Call
2-Year Interest Rate Swap		3 month LIBOR	Quarterly		2.90%	Semi-Annual	Bank of America NA		02/28/19		2.90	%	USD	2,700	$	(15,111	)
2-Year Interest Rate Swap		3 month LIBOR	Quarterly		2.70%	Semi-Annual	Citibank NA		03/05/19		2.70	%	USD	2,900		(8,333	)
2-Year Interest Rate Swap		3 month LIBOR	Quarterly		2.60%	Semi-Annual	Barclays Bank plc		05/31/19		2.60	%	USD	5,400		(18,983	)
2-Year Interest Rate Swap		3 month LIBOR	Quarterly		2.80%	Semi-Annual	Barclays Bank plc		05/31/19		2.80	%	USD	5,400		(30,828	)
2-Year Interest Rate Swap		3 month LIBOR	Quarterly		2.75%	Semi-Annual	Citibank NA		10/16/20		2.75	%	USD	2,110		(22,870	)
5-Year Interest Rate Swap		3 month LIBOR	Quarterly		2.71%	Semi-Annual	Citibank NA		03/14/19		2.71	%	USD	1,600		(15,206	)
																(111,331	)
Put
2-Year Interest Rate Swap		3.33%	Semi-Annual		3 month LIBOR	Quarterly	Citibank NA		04/30/19		3.33	%	USD	2,700		(171	)
2-Year Interest Rate Swap		3.75%	Semi-Annual		3 month LIBOR	Quarterly	Citibank NA		10/16/20		3.75	%	USD	2,110		(2,513	)
																(2,684	)
															$	(114,015	)

Centrally Cleared Inflation Swaps

Paid by the Fund

Received by the Fund

Termination Date

Notional Amount (000)

Value

Upfront Premium Paid (Received)

Unrealized Appreciation (Depreciation)

Reference

Frequency

Rate

Frequency

UK Retail Price Index All Items Monthly

At Termination

3.57%

At Termination

11/15/28

GBP

171

$

805

$

(86

)

$

891

SCHEDULES OF INVESTMENTS 103

Schedule of Investments  (continued) December 31, 2018 BlackRock U.S. Government Bond Portfolio

Centrally Cleared Interest Rate Swaps

Paid by the Fund		Received by the Fund		Effective Date			Termination Date		Notional Amount (000)		Value			Upfront Premium Paid (Received)			Unrealized Appreciation (Depreciation)
Rate	Frequency	Rate	Frequency
7.36%	Monthly	28 day MXIBTIIE	Monthly		N/A			01/28/19	MXN	2,579	$	125		$	—		$	125
1 day Fed Funds	At Termination	1.47%	At Termination		N/A			03/20/19	USD	23,511		(55,463	)		(6,505	)		(48,958	)
1.47%	At Termination	1 day Fed Funds	At Termination		N/A			03/20/19	USD	23,511		55,463			—			55,463
28 day MXIBTIIE	Monthly	8.21%	Monthly		N/A			10/07/20	MXN	687		(242	)		—			(242	)
28 day MXIBTIIE	Monthly	8.21%	Monthly		N/A			10/07/20	MXN	1,397		(491	)		—			(491	)
3.07%	Semi-Annual	3 month LIBOR	Quarterly		N/A			10/11/20	USD	2,050		(16,881	)		—			(16,881	)
3.05%	Semi-Annual	3 month LIBOR	Quarterly		N/A			10/15/20	USD	2,050		(16,070	)		28			(16,098	)
3.11%	Semi-Annual	3 month LIBOR	Quarterly		N/A			10/23/20	USD	2,050		(18,375	)		—			(18,375	)
3.06%	Semi-Annual	3 month LIBOR	Quarterly		N/A			10/25/20	USD	2,050		(16,204	)		—			(16,204	)
1.37%	Semi-Annual	3 month LIBOR	Quarterly		N/A			11/30/20	USD	1,400		35,171			—			35,171
3 month LIBOR	Quarterly	1.37%	Semi-Annual		N/A			11/30/20	USD	470		(11,807	)		(2,858	)		(8,949	)
6 month EURIBOR	Semi-Annual	0.38%	Annual		11/09/20	(a)		11/09/21	EUR	2,360		7,879			(32	)		7,911
1.55%	Semi-Annual	6 month LIBOR	Semi-Annual		11/09/20	(a)		11/09/21	GBP	4,285		(11,699	)		439			(12,138	)
6 month EURIBOR	Semi-Annual	0.38%	Annual		11/09/20	(a)		11/09/21	EUR	2,360		8,015			(112	)		8,127
1.42%	Semi-Annual	6 month LIBOR	Semi-Annual		11/16/20	(a)		11/16/21	GBP	2,170		(2,488	)		—			(2,488	)
6 month EURIBOR	Semi-Annual	0.32%	Annual		11/16/20	(a)		11/16/21	EUR	2,376		6,344			—			6,344
1.34%	Semi-Annual	6 month LIBOR	Semi-Annual		12/10/20	(a)		12/10/21	GBP	1,095		42			(26	)		68
6 month EURIBOR	Semi-Annual	0.24%	Annual		12/14/20	(a)		12/14/21	EUR	1,195		1,777			36			1,741
7.11%	Monthly	28 day MXIBTIIE	Monthly		N/A			10/14/22	MXN	350		871			—			871
7.11%	Monthly	28 day MXIBTIIE	Monthly		N/A			10/14/22	MXN	265		659			—			659
1.66%	Semi-Annual	6 month LIBOR	Semi-Annual		11/08/21	(a)		11/08/22	GBP	1,087		(3,487	)		91			(3,578	)
1.67%	Semi-Annual	6 month LIBOR	Semi-Annual		11/08/21	(a)		11/08/22	GBP	1,087		(3,621	)		237			(3,858	)
1.54%	Semi-Annual	6 month LIBOR	Semi-Annual		11/15/21	(a)		11/15/22	GBP	1,100		(1,924	)		—			(1,924	)
2.50%	Semi-Annual	3 month LIBOR	Quarterly		N/A			01/29/23	USD	841		(2,954	)		—			(2,954	)
3 month LIBOR	Quarterly	2.13%	Semi-Annual		N/A			08/25/25	USD	10		(251	)		—			(251	)
3.07%	Semi-Annual	3 month LIBOR	Quarterly		N/A			08/31/25	USD	970		(27,535	)		—			(27,535	)
6 month EURIBOR	Semi-Annual	0.82%	Annual		03/11/19	(a)		02/15/28	EUR	510		3,807			—			3,807
1.58%	Semi-Annual	6 month LIBOR	Semi-Annual		N/A			11/21/28	GBP	231		(4,493	)		25			(4,518	)
2.85%	Semi-Annual	3 month LIBOR	Quarterly		N/A			12/21/28	USD	200		(2,111	)		—			(2,111	)
2.85%	Semi-Annual	3 month LIBOR	Quarterly		N/A			12/24/28	USD	13		(143	)		—			(143	)
3 month LIBOR	Quarterly	3.35%	Semi-Annual		04/26/19	(a)		04/26/29	USD	32		1,721			—			1,721
3.26%	Semi-Annual	3 month LIBOR	Quarterly		04/26/19	(a)		04/26/29	USD	50		(2,321	)		—			(2,321	)
3.23%	Semi-Annual	3 month LIBOR	Quarterly		04/26/19	(a)		04/26/29	USD	10		(436	)		—			(436	)
2.93%	Semi-Annual	3 month LIBOR	Quarterly		06/12/19	(a)		06/12/29	USD	55		(926	)		—			(926	)
											$	(78,048	)	$	(8,677	)	$	(69,371	)

^(a)  Forward Swaps.

OTC Credit Default Swaps — Buy Protection

Reference Obligation/Index	Financing Rate Paid by the Fund			Payment Frequency		Counterparty	Termination Date		Notional Amount (000)		Value			Upfront Premium Paid (Received)			Unrealized Appreciation (Depreciation)
Republic of Colombia		1.00	%		Quarterly	Barclays Bank plc		12/20/23	USD	5	$	128		$	96		$	32
Republic of Colombia		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	6		154			115			39
Republic of Colombia		1.00			Quarterly	BNP Paribas SA		12/20/23	USD	6		167			101			66
Republic of Colombia		1.00			Quarterly	BNP Paribas SA		12/20/23	USD	6		156			103			53
Republic of Colombia		1.00			Quarterly	Citibank NA		12/20/23	USD	5		128			99			29
Republic of Colombia		1.00			Quarterly	Citibank NA		12/20/23	USD	5		128			93			35
Republic of Colombia		1.00			Quarterly	Citibank NA		12/20/23	USD	6		154			121			33
Republic of Colombia		1.00			Quarterly	Citibank NA		12/20/23	USD	6		154			115			39
Republic of Colombia		1.00			Quarterly	Citibank NA		12/20/23	USD	2		51			37			14
Republic of Colombia		1.00			Quarterly	Deutsche Bank AG		12/20/23	USD	5		128			96			32
Republic of the Philippines		1.00			Quarterly	BNP Paribas SA		12/20/23	USD	40		(261	)		(188	)		(73	)
United Mexican States		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	5		125			38			87
United Mexican States		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	14		348			107			241
United Mexican States		1.00			Quarterly	Barclays Bank plc		12/20/23	USD	10		250			79			171
United Mexican States		1.00			Quarterly	BNP Paribas SA		12/20/23	USD	6		150			133			17
United Mexican States		1.00			Quarterly	BNP Paribas SA		12/20/23	USD	5		125			40			85

104 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock U.S. Government Bond Portfolio

Reference Obligation/Index	Financing Rate Paid by the Fund			Payment Frequency		Counterparty	Termination Date		Notional Amount (000)			Value		Upfront Premium Paid (Received)		Unrealized Appreciation (Depreciation)
United Mexican States		1.00	%		Quarterly	BNP Paribas SA		12/20/23		USD	5	$	124	$	110	$	14
United Mexican States		1.00			Quarterly	BNP Paribas SA		12/20/23		USD	5		124		40		84
United Mexican States		1.00			Quarterly	BNP Paribas SA		12/20/23		USD	4		100		88		12
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	5		124		37		87
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	10		249		96		153
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	7		178		127		51
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	10		250		96		154
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	6		150		115		35
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	23		573		180		393
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	6		150		119		31
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	6		150		136		14
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	7		174		164		10
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	6		150		131		19
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	5		124		27		97
United Mexican States		1.00			Quarterly	Citibank NA		12/20/23		USD	5		124		28		96
United Mexican States		1.00			Quarterly	Deutsche Bank AG		12/20/23		USD	4		100		39		61
United Mexican States		1.00			Quarterly	Deutsche Bank AG		12/20/23		USD	4		100		39		61
United Mexican States		1.00			Quarterly	Goldman Sachs International		12/20/23		USD	32		797		293		504
												$	5,826	$	3,050	$	2,776

OTC Interest Rate Swaps

Paid by the Fund		Received by the Fund			Counterparty	Termination Date		Notional Amount (000)			Value			Upfront Premium Paid (Received)		Unrealized Appreciation (Depreciation)
Rate	Frequency	Rate		Frequency
1 day BZDIOVER	At Termination		8.53%	At Termination	Citibank NA		01/02/23		BRL	220	$	269		$	—	$	269
28 day MXIBTIIE	Monthly		6.32%	Monthly	Goldman Sachs International		08/06/25		MXN	511		(3,136	)		—		(3,136	)
6.31%	Monthly		28 day MXIBTIIE	Monthly	Deutsche Bank AG		08/11/25		MXN	640		3,949			—		3,949
											$	1,082		$	—	$	1,082

The following reference rates, and their values as of period end, are used for security descriptions:

Reference Index		Reference rate
1 day BZDIOVER	Overnight Brazil CETIP — Interbank Rate	0.25%
1 day Fed Funds	1 day Fed Funds	2.40%
28 day MXIBTIIE	Mexico Interbank TIIE 28-Day	8.41%
3 month LIBOR	London Interbank Offered Rate	2.81%
6 month EURIBOR	Euro Interbank Offered Rate	(0.24%)

Balances Reported in the Statements of Assets and Liabilities for Centrally Cleared Swaps and OTC Swaps and Options Written

	Swap Premiums Paid		Swap Premiums Received			Unrealized Appreciation		Unrealized Depreciation			Value
Centrally Cleared Swaps(a)	$	856	$	(9,619	)	$	122,899	$	(191,379	)	$	—
OTC Swaps		3,238		(188	)		7,067		(3,209	)		—
Options Written		NA		NA			10,270		(76,469	)		(114,015	)

^(a) Includes cumulative appreciation (depreciation) on centrally cleared swaps, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities and is net of any previously paid (received) swap premium amounts.

SCHEDULES OF INVESTMENTS 105

Schedule of Investments  (continued) December 31, 2018 BlackRock U.S. Government Bond Portfolio

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

	Commodity Contracts		Credit Contracts		Equity Contracts		Foreign Currency Exchange Contracts		Interest Rate Contracts		Other Contracts		Total
Assets — Derivative Financial Instruments
Futures contracts
Net unrealized appreciation(a)	$	—	$	—	$	—	$	—	$	122,132	$	—	$	122,132
Forward foreign currency exchange contracts
Unrealized appreciation on forward foreign currency exchange contracts		—		—		—		89,613		—		—		89,613
Options purchased
Investments at value — unaffiliated(b)		—		—		—		—		137,265		—		137,265
Swaps — centrally cleared
Net unrealized appreciation(a)		—		—		—		—		122,008		891		122,899
Swaps — OTC
Unrealized appreciation on OTC swaps; Swap premiums paid		—		6,087		—		—		4,218		—		10,305
	$	—	$	6,087	$	—	$	89,613	$	385,623		891	$	482,214
Liabilities — Derivative Financial Instruments
Futures contracts
Net unrealized depreciation(a)	$	—	$	—	$	—	$	—	$	37,513	$	—	$	37,513
Forward foreign currency exchange contracts
Unrealized depreciation on forward foreign currency exchange contracts		—		—		—		52,342		—		—		52,342
Options written
Options written, at value		—		—		—		—		114,015		—		114,015
Swaps — centrally cleared
Net unrealized depreciation(a)		—		—		—		—		191,379		—		191,379
Swaps — OTC
Unrealized depreciation on OTC swaps; Swap premiums received		—		261		—		—		3,136		—		3,397
	$	—	$	261	$	—	$	52,342	$	346,043	$	—	$	398,646

^(a) Includes cumulative appreciation (depreciation) on futures contracts and centrally cleared swaps, if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

^(b) Includes options purchased at value as reported in the Schedule of Investments.

For the year ended December 31, 2018, the effect of derivative financial instruments in the Statements of Operations were as follows:

	Commodity Contracts		Credit Contracts			Equity Contracts		Foreign Currency Exchange Contracts			Interest Rate Contracts			Other Contracts			Total
Net Realized Gain (Loss) from:
Futures contracts	$	—	$	—		$	—	$	—		$	47,716		$	—		$	47,716
Forward foreign currency exchange contracts		—		—			—		101,063			—			—			101,063
Options purchased(a)		—		—			—		(20,636	)		77,863			—			57,227
Options written		—		—			—		3,737			70,415			—			74,152
Swaps		—		(2,156	)		—		—			(55,497	)		(3,493	)		(61,146	)
	$	—	$	(2,156	)	$	—	$	84,164		$	140,497		$	(3,493	)	$	219,012
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts	$	—	$	—		$	—	$	—		$	90,285		$	(15	)	$	90,270
Forward foreign currency exchange contracts		—		—			—		19,689			—			—			19,689
Options purchased(b)		—		—			—		8,160			78,184			—			86,344
Options written		—		—			—		—			(85,462	)		—			(85,462	)
Swaps		—		5,169			—		—			(59,203	)		(860	)		(54,894	)
	$	—	$	5,169		$	—	$	27,849		$	23,804		$	(875	)	$	55,947

^(a) Options purchased are included in net realized gain (loss) from investments — unaffiliated.

^(b)  Options purchased are included in net change in unrealized appreciation (depreciation) on investments — unaffiliated.

106 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock U.S. Government Bond Portfolio

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	21,280,679
Average notional value of contracts — short	$	12,433,848
Forward foreign currency exchange contracts:
Average amounts purchased — in USD	$	2,447,261
Average amounts sold — in USD	$	1,501,957
Options:
Average value of option contracts purchased	$	10,724
Average value of option contracts written	$	2,061
Average notional value of swaption contracts purchased	$	3,378,500
Average notional value of swaption contracts written	$	20,528,000
Credit default swaps:
Average notional value — buy protection	$	395,787
Interest rate swaps:
Average notional value — pays fixed rate	$	32,736,586
Average notional value — receives fixed rate	$	28,759,461
Inflation Swaps:
Average notional value — receives fixed rate	$	351,775

For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

Derivative Financial Instruments — Offsetting as of Period End

The Fund’s derivative assets and liabilities (by type) were as follows:

	Assets			Liabilities
Derivative Financial Instruments:
Futures contracts	$	22,258		$	6,791
Forward foreign currency exchange contracts		89,613			52,342
Options(a)		137,265			114,015
Swaps — Centrally cleared		—			7,462
Swaps — OTC(b)		10,305			3,397
Total derivative assets and liabilities in the Statements of Assets and Liabilities	$	259,441		$	184,007
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)		(22,258	)		(14,253	)
Total derivative assets and liabilities subject to an MNA	$	237,183		$	169,754

^(a)  Includes options purchased at value which is included in Investments at value — unaffiliated in the Statements of Assets and Liabilities and reported in the Schedule of Investments.

^(b)  Includes unrealized appreciation (depreciation) on OTC swaps and swap premiums (paid/received) in the Statements of Assets and Liabilities.

The following tables present the Fund’s derivative assets and liabilities by counterparty net of amounts available for offset under an MNA and net of the related collateral received and pledged by the Fund:

Counterparty	Derivative Assets Subject to an MNA by Counterparty		Derivatives Available for Offset (a)			Non-cash Collateral Received		Cash Collateral Received		Net Amount of Derivative Assets (b)
Bank of America NA	$	343	$	(343	)	$	—	$	—	$	—
Barclays Bank plc		53,707		(49,811	)		—		—		3,896
BNP Paribas SA		1,233		(261	)		—		—		972
Citibank NA		8,947		(8,947	)		—		—		—
Deutsche Bank AG		39,362		(455	)		—		—		38,907
Goldman Sachs International		836		(836	)		—		—		—
HSBC Bank plc		46,377		(119	)		—		—		46,258
JPMorgan Chase Bank NA		86,378		(45,882	)		—		—		40,496
	$	237,183	$	(106,654	)	$	—	$	—	$	130,529

SCHEDULES OF INVESTMENTS 107

Schedule of Investments  (continued) December 31, 2018 BlackRock U.S. Government Bond Portfolio

Counterparty	Derivative Liabilities Subject to an MNA by Counterparty		Derivatives Available for Offset (a)			Non-cash Collateral Pledged		Cash Collateral Pledged		Net Amount of Derivative Liabilities (c)
Bank of America NA	$	15,590	$	(343	)	$	—	$	—	$	15,247
Barclays Bank plc		49,811		(49,811	)		—		—		—
BNP Paribas SA		261		(261	)		—		—		—
Citibank NA		50,520		(8,947	)		—		—		41,573
Deutsche Bank AG		455		(455	)		—		—		—
Goldman Sachs International		3,491		(836	)		—		—		2,655
HSBC Bank plc		119		(119	)		—		—		—
JPMorgan Chase Bank NA		45,882		(45,882	)		—		—		—
Morgan Stanley & Co. International plc		2,533		—			—		—		2,533
Standard Chartered Bank		610		—			—		—		610
UBS AG		482		—			—		—		482
	$	169,754	$	(106,654	)	$	—	$	—	$	63,100

^(a)  The amount of derivatives available for offset is limited to the amount of derivative assets and/or liabilities that are subject to an MNA.

^(b)  Net amount represents the net amount receivable from the counterparty in the event of default.

^(c)  Net amount represents the net amount payable due to the counterparty in the event of default.

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:

	Level 1			Level 2			Level 3		Total
Assets:
Investments:
Long-Term Investments:
Asset-Backed Securities	$	—		$	1,195,143		$	—	$	1,195,143
Foreign Government Obligations		—			87,067			—		87,067
Non-Agency Mortgage-Backed Securities		—			1,060,536			106,104		1,166,640
U.S. Government Sponsored Agency Securities		—			47,632,386			—		47,632,386
U.S. Treasury Obligations		—			27,395,979			—		27,395,979
Short-Term Securities:
Commercial Paper		—			488,013			—		488,013
Money Market Funds		1,608,196			—			—		1,608,196
Options Purchased:
Interest rate contracts		—			137,265			—		137,265
Liabilities:
TBA Sale Commitments		—			(15,077,223	)		—		(15,077,223	)
	$	1,608,196		$	62,919,166		$	106,104	$	64,633,466
Derivative Financial Instruments(a)
Assets:
Credit contracts	$	—		$	2,849		$	—	$	2,849
Foreign currency exchange contracts		—			89,613			—		89,613
Interest rate contracts		122,132			126,226			—		248,358
Other contracts		—			891			—		891
Liabilities:
Credit contracts		—			(73	)		—		(73	)
Foreign currency exchange contracts		—			(52,342	)		—		(52,342	)
Interest rate contracts		(37,513	)		(308,530	)		—		(346,043	)
	$	84,619		$	(141,366	)	$	—	$	(56,747	)

^(a) Derivative financial instruments are swaps, futures contracts, forward foreign currency exchange contracts and options written. Swaps, futures contracts, forward foreign currency exchange contracts and options written are valued at the unrealized appreciation (depreciation) on the instrument.

The Fund may hold liabilities in which the fair value approximates the carrying amount or face value, including accrued interest, for financial statements purposes. As of year end, reverse repurchase agreements of $12,647,294 are categorized as Level 2 within the disclosure hierarchy.

During the year ended December 31, 2018, there were no transfers between levels.

See notes to financial statements.

108 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities

December 31, 2018

	BlackRock Advantage Large Cap Core Portfolio		BlackRock Balanced Capital Portfolio		BlackRock Capital Appreciation Portfolio		BlackRock Global Allocation Portfolio (a)
ASSETS
Investments at value — unaffiliated(b)(c)	$	159,579,230	$	490,743,904	$	159,904,601	$	172,881,466
Investments at value — affiliated(d)		6,105,935		13,316,144		8,357,683		4,339,318
Cash		18,563		—		—		572,850
Cash pledged:
Collateral — OTC derivatives		—		300,000		—		—
Futures contracts		85,000		1,009,275		—		377,000
Centrally cleared swaps		—		219,182		—		228,000
Foreign currency at value(e)		—		1,268,306		58		22,381
Receivables:
Investments sold		1,808,407		14,152,774		—		357,913
Securities lending income — affiliated		854		946		984		691
Swaps		—		—		—		22,162
TBA sale commitments		—		26,353,784		—		—
Capital shares sold		2,091		897		4,770		6,234
Dividends — affiliated		3,123		21,234		5,146		1,691
Dividends — unaffiliated		253,746		429,747		25,553		156,554
Interest — unaffiliated		—		1,329,267		—		395,429
From custodian		—		—		96,847		—
From the Manager		—		—		1,608		316
Variation margin on futures contracts		12,013		506,768		—		4,564
Variation margin on centrally cleared swaps		—		5,530		—		21,934
Swap premiums paid		—		106,319		—		—
Unrealized appreciation on:
Forward foreign currency exchange contracts		—		202,348		—		124,997
OTC swaps		—		70,159		—		97,997
Prepaid expenses		684		1,007		682		693
Other assets		—		3,867		—		—
Total assets		167,869,646		550,041,458		168,397,932		179,612,190
LIABILITIES
Investments sold short, at value(f)		—		—		—		386,069
Bank overdraft		—		498,653		—		—
Cash received as collateral for OTC derivatives		—		—		—		410,000
Borrowed bonds at value(g)		—		3,895,555		—		—
Cash collateral on securities loaned at value		4,229,010		5,717,412		4,610,994		2,214,925
Options written at value(h)		—		125,793		—		1,355,470
TBA sale commitments at value(i)		—		26,604,858		—		—
Payables:
Investments purchased		1,916,938		58,815,741		683,344		567,044
Board realignment and consolidation		1,150		1,167		1,139		1,158
Capital shares redeemed		21,529		114,617		10,993		26,908
Custodian fees		16,064		38,994		4,824		77,176
Deferred foreign capital gain tax		—		—		—		14,759
Interest expense		—		30,300		—		—
Investment advisory fees		50,207		145,612		53,427		40,652
Directors’ and Officer’s fees		3,903		5,052		3,893		3,958
Other affiliates		515		1,391		459		602
Professional fees		12,635		27,103		6,502		51,688
Transfer agent fees		115,902		335,119		123,251		133,130
Other accrued expenses		88,703		130,537		33,040		115,664
Variation margin on futures contracts		—		22,364		—		75,756
Swap premiums received		—		29,486		—		—
Unrealized depreciation on:
Forward foreign currency exchange contracts		—		419,711		—		143,393
OTC swaps		—		52,350		—		10,776
Total liabilities		6,456,556		97,011,815		5,531,866		5,629,128
NET ASSETS	$	161,413,090	$	453,029,643	$	162,866,066	$	173,983,062

See notes to financial statements.

FINANCIAL STATEMENTS 109

Statements of Assets and Liabilities  (continued)

December 31, 2018

	BlackRock Advantage Large Cap Core Portfolio			BlackRock Balanced Capital Portfolio			BlackRock Capital Appreciation Portfolio		BlackRock Global Allocation Portfolio (a)
NET ASSETS CONSIST OF
Paid-in capital	$	171,592,507		$	475,069,839		$	126,503,533	$	178,411,247
Accumulated earnings (loss)		(10,179,417	)		(22,040,196	)		36,362,533		(4,428,185	)
NET ASSETS	$	161,413,090		$	453,029,643		$	162,866,066	$	173,983,062
Share outstanding, $0.10 par value(j)		8,168,291			32,436,923			4,445,704		12,248,332
Net asset value, offering and redemption price per share	$	19.76		$	13.97		$	36.63	$	14.20
(a) Consolidated Statement of Assets and Liabilities
(b) Investments at cost — unaffiliated	$	167,733,650		$	507,984,062		$	124,731,277	$	177,541,343
(c) Securities loaned at value	$	4,142,764		$	5,605,805		$	4,529,210	$	2,117,364
(d) Investments at cost — affiliated	$	6,106,192		$	13,379,349		$	8,357,782	$	4,468,491
(e) Foreign currency at cost	$	—		$	1,270,217		$	58	$	22,330
(f)  Proceeds received from investments sold short at value — unaffiliated	$	—		$	—		$	—	$	491,633
(g) Proceeds received from borrowed bonds	$	—		$	3,811,640		$	—	$	—
(h) Premiums received	$	—		$	98,198		$	—	$	880,316
(i)  Proceeds from TBA sale commitments	$	—		$	26,353,784		$	—	$	—
(j)  Authorized shares		100 million			300 million			100 million		100 million

See notes to financial statements.

110 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Statements of Assets and Liabilities

December 31, 2018

	BlackRock Government Money Market Portfolio		BlackRock High Yield Portfolio		BlackRock U.S. Government Bond Portfolio
ASSETS
Investments at value — unaffiliated(a)	$	76,958,102	$	25,735,325	$	78,102,493
Investments at value — affiliated(b)		—		1,355,813		1,608,196
Cash		4,190,645		—		—
Cash pledged:
Futures contracts		—		8,000		84,540
Centrally cleared swaps		—		15,000		145,000
Foreign currency at value(c)		—		2,776		140,341
Repurchase agreements at value — unaffiliated(d)		49,700,000		—		—
Receivables:
Investments sold		—		46,328		6,164,837
TBA sale commitments		—		—		14,894,774
Capital shares sold		548,498		325		—
Dividends — affiliated		—		1,829		1,631
Dividends — unaffiliated		—		1,047		25,004
Interest — unaffiliated		64,731		404,067		306,027
From the Manager		580		170,941		180,066
Investment adviser		—		4,408		4,201
Variation margin on futures contracts		—		2,343		22,258
Variation margin on centrally cleared swaps		—		309		—
Swap premiums paid		—		164		3,238
Unrealized appreciation on:
Forward foreign currency exchange contracts		—		1,668		89,613
OTC swaps		—		—		7,067
Prepaid expenses		634		526		56
Other assets		—		351		10,801
Total assets		131,463,190		27,751,220		101,790,143
LIABILITIES
Bank overdraft		—		1,628		1,106
Options written at value(e)		—		—		114,015
TBA sale commitments at value(f)		—		—		15,077,223
Reverse repurchase agreements at value		—		—		12,647,294
Payables:
Investments purchased		—		281,996		19,271,421
Accounting services fees		6,458		21,605		10,838
Printing fees		18,472		16,587		18,136
Board realignment and consolidation		1,131		154,157		178,843
Capital shares redeemed		557		1,441		259,995
Custodian fees		4,718		8,536		12,343
Income dividend distributions		—		125,584		115,431
Investment advisory fees		37,023		—		—
Directors’ and Officer’s fees		3,695		3,344		3,440
Other affiliates		223		85		142
Professional fees		2,030		17,546		10,339
Transfer agent fees		24,982		16,632		31,431
Other accrued expenses		3,301		28,139		27,056
Variation margin on futures contracts		—		—		6,791
Variation margin on centrally cleared swaps		—		—		7,462
Swap premiums received		—		1,640		188
Unrealized depreciation on:
Forward foreign currency exchange contracts		—		—		52,342
OTC swaps		—		4,367		3,209
Unfunded floating rate loan interests		—		74		—
Total liabilities		102,590		683,361		47,849,045
NET ASSETS	$	131,360,600	$	27,067,859	$	53,941,098

See notes to financial statements.

FINANCIAL STATEMENTS 111

Statements of Assets and Liabilities  (continued)

December 31, 2018

	BlackRock Government Money Market Portfolio		BlackRock High Yield Portfolio			BlackRock U.S. Government Bond Portfolio
NET ASSETS CONSIST OF
Paid-in capital	$	131,359,718	$	30,941,011		$	57,629,679
Accumulated earnings (loss)		882		(3,873,152	)		(3,688,581	)
NET ASSETS	$	131,360,600	$	27,067,859		$	53,941,098
Share outstanding, $0.10 par value(g)		131,359,724		5,416,319			5,096,002
Net asset value	$	1.00	$	5.00		$	10.58
(a) Investments at cost — unaffiliated	$	76,958,102	$	27,645,732		$	78,375,366
(b) Investments at cost — affiliated	$	—	$	1,355,813		$	1,608,196
(c) Foreign currency at cost	$	—	$	2,871		$	140,693
(d) Repurchase agreements at cost — unaffiliated	$	49,700,000	$	—		$	—
(e) Premiums received	$	—	$	—		$	47,816
(f)  Proceeds from TBA sale commitments	$	—	$	—		$	14,894,774
(g) Authorized shares		2 billion		100 million			100 million

See notes to financial statements.

112 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Statements of Operations

Year Ended December 31, 2018

	BlackRock Advantage Large Cap Core Portfolio			BlackRock Balanced Capital Portfolio			BlackRock Capital Appreciation Portfolio			BlackRock Global Allocation Portfolio (a)
INVESTMENT INCOME
Dividends — affiliated	$	29,009		$	664,546		$	28,243		$	53,944
Dividends — unaffiliated		3,731,008	(b)		6,007,933			1,458,417	(c)		2,678,879
Interest — unaffiliated		—			5,901,261			—			1,894,255
Securities lending income — affiliated — net		6,147			10,878			20,600			18,967
Foreign taxes withheld		(6,542	)		(24,974	)		—			(179,010	)
Total investment income		3,759,622			12,559,644			1,507,260			4,467,035
EXPENSES
Investment advisory		687,934			1,846,963			677,761			729,816
Transfer agent		266,172			738,473			264,809			308,628
Custodian		53,619			145,313			11,124			222,213
Professional		52,943			75,197			49,586			95,268
Accounting services		52,013			141,790			51,667			116,409
Printing		27,252			26,987			11,717			12,315
Directors and Officer		18,701			21,766			18,205			17,176
Pricing		1,373			80,088			1,133			26,793
Board realignment and consolidation		1,262			1,467			1,251			1,276
Registration		704			704			704			704
Miscellaneous		11,324			5,735			6,035			4,730
Total expenses excluding dividend expense and interest expense		1,173,297			3,084,483			1,093,992			1,535,328
Dividend expense — unaffiliated		—			—			—			15,459
Interest expense		—			122,700			—			—
Total expenses		1,173,297			3,207,183			1,093,992			1,550,787
Less:
Transfer agent fees waived and/or reimbursed		(233,495	)		(579,288	)		(186,173	)		(303,213	)
Fees waived and/or reimbursed by the Manager		(3,026	)		(34,249	)		(1,198	)		(97,045	)
Total expenses after fees waived and/or reimbursed		936,776			2,593,646			906,621			1,150,529
Net investment income		2,822,846			9,965,998			600,639			3,316,506
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — affiliated		(1,907	)		176,106			(2,428	)		1,209
Investments — unaffiliated		16,210,773			20,020,373			17,306,610			6,780,183	(d)
Borrowed bonds		—			(15,321	)		—			—
Forward foreign currency exchange contracts		—			(270,333	)		—			(267,965	)
Foreign currency transactions		—			66,114			(30	)		224,060
Futures contracts		(70,904	)		1,863,552			—			16,345
Options written		—			506,180			—			237,418
Short sales — unaffiliated		—			489,891			—			83,731
Swaps		—			(64,047	)		—			133,707
		16,137,962			22,772,515			17,304,152			7,208,688
Net change in unrealized appreciation (depreciation) on:
Investments — affiliated		(257	)		64,823			223			(55,426	)
Investments — unaffiliated		(26,751,355	)		(44,276,014	)		(12,615,433	)		(23,388,485	)(e)
Borrowed bonds		—			(64,978	)		—			—
Forward foreign currency exchange contracts		—			(142,115	)		—			(149,643	)
Foreign currency translations		—			(8,843	)		—			(3,273	)
Futures contracts		(35,342	)		313,483			—			121,743
Options written		—			(155,988	)		—			(710,680	)
Short sales — unaffiliated		—			—			—			105,564
Swaps		—			110,369			—			(322,380	)
		(26,786,954	)		(44,159,263	)		(12,615,210	)		(24,402,580	)
Net realized and unrealized gain (loss)		(10,648,992	)		(21,386,748	)		4,688,942			(17,193,892	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(7,826,146	)	$	(11,420,750	)	$	5,289,581		$	(13,877,386	)
(a) Consolidated Statement of Operations
(b) Includes non-recurring dividends in the amount of $107,355.
(c) Includes non-recurring dividends in the amount of $398,693.
(d) Net of $(4,338) foreign capital gain tax.
(e) Net of $2,794 foreign capital gain tax.

See notes to financial statements.

FINANCIAL STATEMENTS 113

Statements of Operations

Year Ended December 31, 2018

	BlackRock Government Money Market Portfolio			BlackRock High Yield Portfolio			BlackRock U.S. Government Bond Portfolio
INVESTMENT INCOME
Dividends — affiliated	$	—		$	9,363		$	30,122
Dividends — unaffiliated		—			28,047			295
Interest — unaffiliated		2,403,101			1,801,520			1,772,484
Foreign taxes withheld		—			—			(134	)
Total investment income		2,403,101			1,838,930			1,802,767
EXPENSES
Investment advisory		462,355			109,745			204,096
Transfer agent		195,163			48,446			87,698
Professional		58,413			85,944			68,393
Accounting services		39,041			129,368			75,200
Directors and Officer		17,436			16,340			16,619
Custodian		11,739			21,358			32,023
Printing		10,684			9,894			8,809
Registration		3,517			704			222
Pricing		1,897			9,410			56,623
Board realignment and consolidation		1,209			154,157			178,843
Miscellaneous		5,811			5,326			12,454
Total expenses excluding interest expense		807,265			590,692			740,980
Interest expense		—			—			197,421
Total expenses		807,265			590,692			938,401
Less:
Transfer agent fees waived and/or reimbursed		(175,939	)		(43,449	)		(82,697	)
Fees waived and/or reimbursed by the Manager		(5,475	)		(398,032	)		(380,702	)
Total expenses after fees waived and/or reimbursed		625,851			149,211			475,002
Net investment income		1,777,250			1,689,719			1,327,765
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — affiliated		—			(1,178	)		—
Investments — unaffiliated		715			(58,521	)		(768,870	)
Borrowed bonds		—			—			34
Forward foreign currency exchange contracts		—			(17,312	)		101,063
Foreign currency transactions		—			(14,610	)		12,781
Futures contracts		—			6,224			47,716
Options written		—			10,486			74,152
Payment by affiliate		—			2,724	(a)		—
Swaps		—			17,284			(61,146	)
		715			(54,903	)		(594,270	)
Net change in unrealized appreciation (depreciation) on:
Investments — affiliated		—			270			—
Investments — unaffiliated		—			(2,322,620	)		(248,355	)
Forward foreign currency exchange contracts		—			3,209			19,689
Foreign currency translations		—			(102	)		(737	)
Futures contracts		—			7,035			90,270
Options written		—			—			(85,462	)
Swaps		—			(8,927	)		(54,894	)
Unfunded floating rate loan interests		—			(80	)		—
		—			(2,321,215	)		(279,489	)
Net realized and unrealized gain (loss)		715			(2,376,118	)		(873,759	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	1,777,965		$	(686,399	)	$	454,006

^(a)  See Note 6 of the Notes to Financial Statements.

See notes to financial statements.

114 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets

	BlackRock Advantage Large Cap Core Portfolio						BlackRock Balanced Capital Portfolio
	Year Ended December 31,						Year Ended December 31,
	2018			2017			2018			2017
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income	$	2,822,846		$	2,397,763		$	9,965,998		$	8,916,319
Net realized gain		16,137,962			47,477,016			22,772,515			84,848,949
Net change in unrealized appreciation (depreciation)		(26,786,954	)		(14,151,938	)		(44,159,263	)		(25,392,201	)
Net increase (decrease) in net assets resulting from operations		(7,826,146	)		35,722,841			(11,420,750	)		68,373,067
DISTRIBUTIONS TO SHAREHOLDERS(a)(b)
Decrease in net assets resulting from distributions to shareholders		(23,736,716	)		(51,414,199	)		(42,865,047	)		(94,650,453	)
CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net assets derived from capital share transactions		5,438,391			35,241,835			(3,877,300	)		47,028,541
NET ASSETS(b)
Total increase (decrease) in net assets		(26,124,471	)		19,550,477			(58,163,097	)		20,751,155
Beginning of year		187,537,561			167,987,084			511,192,740			490,441,585
End of year	$	161,413,090		$	187,537,561		$	453,029,643		$	511,192,740

^(a)  Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

^(b)  Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 12 for this prior year information.

See notes to financial statements.

FINANCIAL STATEMENTS 115

Statements of Changes in Net Assets

	BlackRock Capital Appreciation Portfolio						BlackRock Global Allocation Portfolio (a)
	Year Ended December 31,						Year Ended December 31,
	2018			2017			2018			2017
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income	$	600,639		$	464,587		$	3,316,506		$	3,291,636
Net realized gain		17,304,152			15,183,647			7,208,688			8,073,637
Net change in unrealized appreciation (depreciation)		(12,615,210	)		29,407,057			(24,402,580	)		16,327,473
Net increase (decrease) in net assets resulting from operations		5,289,581			45,055,291			(13,877,386	)		27,692,746
DISTRIBUTIONS TO SHAREHOLDERS(b)(c)
Decrease in net assets resulting from distributions to shareholders		(19,636,188	)		(16,717,731	)		(12,321,000	)		(2,964,477	)
CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net assets derived from capital share transactions		6,382,954			3,473,022			(11,373,660	)		(19,698,247	)
NET ASSETS(c)
Total increase (decrease) in net assets		(7,963,653	)		31,810,582			(37,572,046	)		5,030,022
Beginning of year		170,829,719			139,019,137			211,555,108			206,525,086
End of year	$	162,866,066		$	170,829,719		$	173,983,062		$	211,555,108

^(a)  Consolidated Statements of Changes in Net Assets

^(b)  Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

^(c)  Prior year distribution character information and (distributions in excess of) net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 12 for this prior year information.

See notes to financial statements.

116 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Statements of Changes in Net Assets

	BlackRock Government Money Market Portfolio						BlackRock High Yield Portfolio
	Year Ended December 31,						Year Ended December 31,
	2018			2017			2018			2017
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income	$	1,777,250		$	498,444		$	1,689,719		$	1,851,923
Net realized gain (loss)		715			533			(54,903	)		920,556
Net change in unrealized appreciation (depreciation)		—			—			(2,321,215	)		(186,639	)
Net increase (decrease) in net assets resulting from operations		1,777,965			498,977			(686,399	)		2,585,840
DISTRIBUTIONS TO SHAREHOLDERS(a)(b)
From net investment income and net realized gain		(1,777,250	)		(498,810	)		(1,697,206	)		(1,883,102	)
From return of capital		—			—			(8,797	)		—
Decrease in net assets resulting from distributions to shareholders		(1,777,250	)		(498,810	)		(1,706,003	)		(1,883,102	)
CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net assets derived from capital share transactions		24,060,474			(14,758,053	)		(2,544,915	)		(2,491,823	)
NET ASSETS(b)
Total increase (decrease) in net assets		24,061,189			(14,757,886	)		(4,937,317	)		(1,789,085	)
Beginning of year		107,299,411			122,057,297			32,005,176			33,794,261
End of year	$	131,360,600		$	107,299,411		$	27,067,859		$	32,005,176

^(a)  Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

^(b)  Prior year distribution character information and undistributed (distributions in excess of) net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 12 for this prior year information.

See notes to financial statements.

FINANCIAL STATEMENTS 117

Statements of Changes in Net Assets

	BlackRock U.S. Government Bond Portfolio
	Year Ended December 31,
	2018			2017
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income	$	1,327,765		$	1,097,605
Net realized loss		(594,270	)		(923,940	)
Net change in unrealized appreciation (depreciation)		(279,489	)		876,423
Net increase in net assets resulting from operations		454,006			1,050,088
DISTRIBUTIONS TO SHAREHOLDERS(a)(b)
Decrease in net assets resulting from distributions to shareholders		(1,565,228	)		(1,311,639	)
CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net assets derived from capital share transactions		472,083			(5,663,932	)
NET ASSETS(b)
Total decrease in net assets		(639,139	)		(5,925,483	)
Beginning of year		54,580,237			60,505,720
End of year	$	53,941,098		$	54,580,237

^(a)  Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

^(b)  Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 12 for this prior year information.

See notes to financial statements.

118 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Statement of Cash Flows

Year Ended December 31, 2018

	BlackRock U.S. Government Bond Portfolio
CASH USED FOR OPERATING ACTIVITIES
Net increase in net assets resulting from operations	$	454,006
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided for operating activities:
Proceeds from sales of long-term investments and principal paydowns		460,250,521
Purchases of long term investments		(466,332,925	)
Net purchases of short-term securities		(414,676	)
Amortization of premium and accretion of discount on investments		(25,227	)
Premiums received from options written		345,328
Premiums paid on closing options written		(276,367	)
Net realized (gain) loss on investments and options written		694,683
Net unrealized (appreciation) depreciation on investments, forward foreign currency exchange contracts, foreign currency translations, options written and swaps		310,299
(Increase) Decrease in Assets:
Receivables:
Dividends — affiliated		326
Dividends — unaffiliated		(8,517	)
Interest — unaffiliated		(79,663	)
From the Manager		(118,434	)
Investment adviser		(4,201	)
Variation margin on futures contracts		(22,258	)
Variation margin on centrally cleared swaps		2,788
Swap premiums paid		(3,137	)
Prepaid expenses		191
Other assets		22,461
Increase (Decrease) in Liabilities:
Payables:
Accounting services fees		(7,780	)
Board realignment and consolidation		178,843
Custodian fees		(20,494	)
Directors’ and Officer’s fees		(62	)
Printing fees		5,030
Professional fees		(34,926	)
Transfer agent fees		31,431
Other accrued expenses		(40,723	)
Other affiliates		(262	)
Variation margin on futures contracts		(3,640	)
Variation margin on centrally cleared swaps		7,462
Interest expense and fees		670
Swap premiums received		(3,323	)
Net cash used for operating activities		(5,092,576	)
CASH PROVIDED BY FINANCING ACTIVITIES
Cash dividends paid to shareholders		1
Payments on redemption of capital shares		(8,985,464	)
Proceeds from issuance of capital shares		8,076,002
Net borrowing of reverse repurchase agreements		5,998,933
Increase in bank overdraft		1,024
Net cash provided by financing activities		5,090,496
CASH IMPACT FROM FOREIGN EXCHANGE FLUCTUATIONS
Cash impact from foreign exchange fluctuations		(452	)
CASH AND FOREIGN CURRENCY
Net decrease in restricted and unrestricted cash and foreign currency		(2,532	)
Restricted and unrestricted cash and foreign currency at beginning of year		372,413
Restricted and unrestricted cash and foreign currency at end of year	$	369,881
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest expense	$	196,751
NON-CASH FINANCING ACTIVITIES
Capital shares issued in reinvestment of dividends and distributions paid to shareholders	$	1,539,514

See notes to financial statements.

FINANCIAL STATEMENTS 119

Statement of Cash Flows   (continued)

Year Ended December 31, 2018

	Year Ended December 31, 2018		Year Ended December 31, 2017
RECONCILIATION OF RESTRICTED AND UNRESTRICTED CASH AND FOREIGN CURRENCY TO THE STATEMENTS OF ASSETS AND LIABILITIES
Cash	$	—	$	23,568
Cash Pledged:
Futures contracts		84,540		110,540
Centrally cleared swaps		145,000		138,000
Foreign currency at value		140,341		100,305
	$	369,881	$	372,413

See notes to financial statements.

120 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights

(For a share outstanding throughout each period)

	BlackRock Advantage Large Cap Core Portfolio
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	24.31		$	27.15		$	26.53		$	28.11		$	27.50
Net investment income(a)		0.38	(b)		0.40			0.36			0.32			0.29
Net realized and unrealized gain (loss)		(1.62	)		5.58			2.47			(0.15	)		3.23
Net increase (decrease) from investment operations		(1.24	)		5.98			2.83			0.17			3.52
Distributions(c)
From net investment income		(0.39	)		(0.41	)		(0.37	)		(0.33	)		(0.32	)
From net realized gain		(2.92	)		(8.41	)		(1.84	)		(1.42	)		(2.59	)
Total distributions		(3.31	)		(8.82	)		(2.21	)		(1.75	)		(2.91	)
Net asset value, end of year	$	19.76		$	24.31		$	27.15		$	26.53		$	28.11
Total Return(d)
Based on net asset value		(5.11	)%		22.24	%		10.69	%		0.60	%		12.79	%
Ratios to Average Net Assets
Total expenses		0.63	%		0.63	%		0.60	%		0.60	%		0.59	%
Total expenses after fees waived and/or reimbursed		0.50	%		0.50	%		0.50	%		0.50	%		0.49	%
Net investment income		1.51	%(b)		1.35	%		1.36	%		1.14	%		1.03	%
Supplemental Data
Net assets, end of year (000)	$	161,413		$	187,538		$	167,987		$	169,173		$	184,854
Portfolio turnover rate		151	%		154	%		48	%		31	%		47	%

^(a)  Based on average shares outstanding.

^(b)  Net investment income per share and the ratio of net investment income to average net assets includes $0.01 per share and 0.06%, respectively, resulting from a non-recurring dividend.

^(c)  Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

^(d)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 121

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Balanced Capital Portfolio
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	15.81		$	16.87		$	16.74		$	17.81		$	18.26
Net investment income(a)		0.32			0.31			0.29			0.28			0.33
Net realized and unrealized gain (loss)		(0.73	)		2.14			1.16			(0.19	)		1.67
Net increase (decrease) from investment operations		(0.41	)		2.45			1.45			0.09			2.00
Distributions(b)
From net investment income		(0.31	)		(0.34	)		(0.30	)		(0.30	)		(0.36	)
From net realized gain		(1.12	)		(3.17	)		(1.02	)		(0.86	)		(2.09	)
Total distributions		(1.43	)		(3.51	)		(1.32	)		(1.16	)		(2.45	)
Net asset value, end of year	$	13.97		$	15.81		$	16.87		$	16.74		$	17.81
Total Return(c)
Based on net asset value		(2.66	)%		14.59	%		8.65	%		0.52	%		11.07	%
Ratios to Average Net Assets(d)
Total expenses		0.64	%		0.66	%		0.62	%		0.61	%		0.57	%
Total expenses after fees waived and/or reimbursed		0.52	%		0.53	%		0.52	%		0.50	%		0.48	%
Total expenses after fees waived and/or reimbursed and excluding interest expense		0.49	%		0.49	%		0.49	%		0.49	%		0.47	%
Net investment income		1.98	%		1.75	%		1.72	%		1.54	%		1.72	%
Supplemental Data
Net assets, end of year (000)	$	453,030		$	511,193		$	490,442		$	499,439		$	546,054
Portfolio turnover rate(e)		280	%		332	%		264	%		340	%		345	%

^(a)  Based on average shares outstanding.

^(b)  Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

^(c)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

^(d)  Excludes expenses incurred indirectly as a result of investments in underlying funds as follows:

	Year Ended December 31,
	2018			2017			2016			2015			2014
Investments in underlying funds		0.02	%		0.01	%		0.01	%		—	%		—	%

^(e)  Includes mortgage dollar roll transactions (“MDRs”). Additional information regarding portfolio turnover rate is as follows:

	Year Ended December 31,
	2018			2017			2016			2015			2014
Portfolio turnover rate (excluding MDRs)		211	%		248	%		188	%		240	%		259	%

See notes to financial statements.

122 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Capital Appreciation Portfolio
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	40.56		$	33.61		$	34.32		$	34.75		$	38.16
Net investment income(a)		0.15	(b)		0.12	(c)		0.07	(d)		0.05			0.07
Net realized and unrealized gain		0.83			11.11			0.07			2.45			3.33
Net increase from investment operations		0.98			11.23			0.14			2.50			3.40
Distributions(e)
From net investment income		(0.14	)		(0.12	)		(0.08	)		(0.05	)		(0.07	)
From net realized gain		(4.77	)		(4.16	)		(0.77	)		(2.88	)		(6.74	)
Total distributions		(4.91	)		(4.28	)		(0.85	)		(2.93	)		(6.81	)
Net asset value, end of year	$	36.63		$	40.56		$	33.61		$	34.32		$	34.75
Total Return(f)
Based on net asset value		2.42	%		33.62	%		0.40	%		7.09	%		9.12	%
Ratios to Average Net Assets
Total expenses		0.59	%(g)		0.60	%		0.62	%		0.61	%		0.60	%
Total expenses after fees waived and/or reimbursed		0.49	%(g)		0.51	%		0.53	%		0.51	%		0.51	%
Net investment income		0.33	%(b)g)		0.29	%(c)		0.21	%(d)		0.14	%		0.19	%
Supplemental Data
Net assets, end of year (000)	$	162,866		$	170,830		$	139,019		$	156,722		$	157,387
Portfolio turnover rate		45	%		48	%		86	%		71	%		99	%

^(a)  Based on average shares outstanding.

^(b)  Net investment income per share and the ratio of net investment income to average net assets includes $0.10 per share and 0.22%, respectively, resulting from a non-recurring dividend.

^(c)  Net investment income per share and the ratio of net investment income to average net assets includes $0.04 per share and 0.09%, respectively, resulting from a non-recurring dividend.

^(d)  Net investment income per share and the ratio of net investment income to average net assets includes $0.03 per share and 0.08%, respectively, resulting from a non-recurring dividend.

^(e)  Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

^(f)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

^(g)  Excludes expenses incurred indirectly as a result of investments in underlying funds of 0.01%.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 123

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Global Allocation Portfolio
	Year Ended December 31,(a)
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	16.42		$	14.60		$	14.25		$	15.55		$	16.97
Net investment income(b)		0.27			0.25			0.23			0.24			0.31
Net realized and unrealized gain (loss)		(1.44	)		1.80			0.37			(0.35	)		0.12
Net increase (decrease) from investment operations		(1.17	)		2.05			0.60			(0.11	)		0.43
Distributions(c)
From net investment income		(0.24	)		(0.23	)		(0.25	)		(0.30	)		(0.43	)
From net realized gain		(0.81	)		—			—			(0.89	)		(1.42	)
From return of capital		—			—			—			—	(d)		—
Total distributions		(1.05	)		(0.23	)		(0.25	)		(1.19	)		(1.85	)
Net asset value, end of year	$	14.20		$	16.42		$	14.60		$	14.25		$	15.55
Total Return(e)
Based on net asset value		(7.27	)%		14.05	%		4.17	%		(0.74	)%		2.52	%
Ratios to Average Net Assets(f)
Total expenses		0.78	%		0.79	%		0.83	%		0.77	%		0.72	%
Total expenses after fees waived and/or reimbursed		0.58	%		0.58	%		0.58	%		0.58	%		0.57	%
Total expenses after fees waived and/or reimbursed and excluding dividend expense, broker fees and expenses on short sales, interest expense and stock loan fees		0.57	%		0.57	%		0.57	%		0.57	%		0.57	%
Net investment income		1.67	%		1.56	%		1.62	%		1.52	%		1.81	%
Supplemental Data
Net assets, end of year (000)	$	173,983		$	211,555		$	206,525		$	229,649		$	257,696
Portfolio turnover rate		145	%		129	%		134	%		89	%(g)		70	%

^(a)  Consolidated Financial Highlights.

^(b)  Based on average shares outstanding.

^(c)  Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

^(d)  Amount is greater than $(0.005) per share.

^(e)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

^(f)  Excludes expenses incurred indirectly as a result of investments in underlying funds as follows:

	Year Ended December 31,
	2018			2017			2016			2015			2014
Investments in underlying funds		0.02	%		0.01	%		—	%		—	%		—	%

^(g)  Includes mortgage dollar roll transactions. Excluding these transactions the portfolio rate would have been 87%.

See notes to financial statements.

124 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Government Money Market Portfolio
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income		0.0139			0.0044			0.0000	(a)		0.0000	(a)		0.0000	(a)
Net realized gain		0.0000	(a)		0.0000	(a)		0.0000	(a)		0.0001			0.0001
Net increase from investment operations		0.0139			0.0044			0.0000			0.0001			0.0001
Distributions(b)
From net investment income		(0.0139	)		(0.0044	)		(0.0000	)(c)		(0.0000	)(c)		(0.0000	)(c)
From net realized gain		—			(0.0000	)(c)		(0.0000	)(c)		(0.0001	)		(0.0001	)
Total distributions		(0.0139	)		(0.0044	)		(0.0000	)		(0.0001	)		(0.0001	)
Net asset value, end of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total Return(d)
Based on net asset value		1.41	%		0.45	%		0.00	%		0.01	%		0.01	%
Ratios to Average Net Assets
Total expenses		0.64	%		0.70	%		0.54	%		0.54	%		0.49	%
Total expenses after fees waived and/or reimbursed		0.50	%		0.50	%		0.42	%		0.22	%		0.23	%
Net investment income		1.41	%		0.44	%		0.00	%		0.00	%		0.00	%
Supplemental Data
Net assets, end of year (000)	$	131,361		$	107,299		$	122,057		$	125,641		$	138,033

^(a)  Amount is less than $0.00005 per share.

^(b)  Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

^(c)  Amount is greater than $(0.00005) per share.

^(d)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 125

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock High Yield Portfolio
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	5.42		$	5.31		$	4.91		$	5.44		$	5.69
Net investment income(a)		0.30			0.30			0.29			0.28			0.32
Net realized and unrealized gain (loss)		(0.42	)		0.12			0.40			(0.52	)		(0.21	)
Net increase (decrease) from investment operations		(0.12	)		0.42			0.69			(0.24	)		0.11
Distributions(b)
From net investment income		(0.30	)		(0.31	)		(0.29	)		(0.29	)		(0.36	)
From return of capital		(0.00	)(c)		—			—			—			—
Total distributions		(0.30	)		(0.31	)		(0.29	)		(0.29	)		(0.36	)
Net asset value, end of year	$	5.00		$	5.42		$	5.31		$	4.91		$	5.44
Total Return(d)
Based on net asset value		(2.31	)%(e)		7.95	%		14.43	%		(4.65	)%		1.88	%
Ratios to Average Net Assets
Total expenses		1.98	%		1.34	%		0.99	%(f)		0.91	%		0.84	%
Total expenses after fees waived and/or reimbursed		0.50	%		0.50	%		0.50	%(f)		0.50	%		0.51	%
Total expenses after fees waived and/or reimbursed and excluding interest expense		0.50	%		0.50	%		0.50	%(f)		0.50	%		0.50	%
Net investment income		5.66	%		5.53	%		5.64	%(f)		5.30	%		5.54	%
Supplemental Data
Net assets, end of year (000)	$	27,068		$	32,005		$	33,794		$	31,788		$	39,081
Portfolio turnover rate		67	%		73	%		101	%		84	%		78	%

^(a)  Based on average shares outstanding.

^(b)  Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

^(c)  Amount is greater than $(0.005) per share.

^(d)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

^(e)  Includes payment received from an affiliate, which had no impact on the Fund’s total return.

^(f)  Excludes expenses incurred indirectly as a result of investments in underlying funds of 0.01%.

See notes to financial statements.

126 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock U.S. Government Bond Portfolio
	Year Ended December 31,
	2018			2017			2016			2015			2014
Net asset value, beginning of year	$	10.80		$	10.86		$	10.90		$	11.07		$	10.67
Net investment income(a)		0.25			0.21			0.17			0.17			0.20
Net realized and unrealized gain (loss)		(0.17	)		(0.02	)		0.00	(b)		(0.11	)		0.43
Net increase from investment operations		0.08			0.19			0.17			0.06			0.63
Distributions from net investment income(c)		(0.30	)		(0.25	)		(0.21	)		(0.23	)		(0.23	)
Net asset value, end of year	$	10.58		$	10.80		$	10.86		$	10.90		$	11.07
Total Return(d)
Based on net asset value		0.77	%		1.72	%		1.54	%		0.54	%		5.95	%
Ratios to Average Net Assets(e)
Total expenses		1.69	%		1.15	%		0.94	%		0.81	%		0.76	%
Total expenses after fees waived and/or reimbursed		0.86	%		0.63	%		0.59	%		0.53	%		0.53	%
Total expenses after fees waived and/or reimbursed and excluding interest expense		0.50	%		0.50	%		0.50	%		0.50	%		0.50	%
Net investment income		2.39	%		1.89	%		1.50	%		1.58	%		1.79	%
Supplemental Data
Net assets, end of year (000)	$	53,941		$	54,580		$	60,506		$	66,263		$	74,925
Portfolio turnover rate(f)		728	%		1,058	%		1,004	%		1,421	%		1,374	%

^(a)  Based on average shares outstanding.

^(b)  Amount is less than $0.005 per share.

^(c)  Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

^(d)  Where applicable, excludes insurance-related fees and expenses and assumes the reinvestment of distributions.

^(e)  Excludes expenses incurred indirectly as a result of investments in underlying funds as follows:

	Year Ended December 31,
	2018			2017			2016		2015			2014
Investments in underlying funds		0.01	%		0.01	%		—		0.01	%		—

^(f)  Includes mortgage dollar roll transactions (“MDRs”). Additional information regarding portfolio turnover rate is as follows:

	Year Ended December 31,
	2018			2017			2016			2015			2014
Portfolio turnover rate (excluding MDRs)		434	%		694	%		631	%		891	%		723	%

See notes to financial statements.

FINANCIAL HIGHLIGHTS 127

Notes to Financial Statements

1. ORGANIZATION

BlackRock Series Fund, Inc. (“Series Fund”) and BlackRock Series Fund II, Inc. (“Series Fund II” and together with Series Fund, the “Companies” and each, a “Company”) are each registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as open-end management investment companies. Each Company is organized as a Maryland corporation and is comprised of the separate portfolios indicated below. The following are referred to herein collectively as the “Funds” or individually as a “Fund”:

Fund Name	Company	Herein Referred To As	Diversification Classification
BlackRock Advantage Large Cap Core Portfolio	Series Fund	Advantage Large Cap Core	Diversified
BlackRock Balanced Capital Portfolio	Series Fund	Balanced Capital	Diversified
BlackRock Capital Appreciation Portfolio	Series Fund	Capital Appreciation	Diversified
BlackRock Global Allocation Portfolio	Series Fund	Global Allocation	Diversified
BlackRock Government Money Market Portfolio	Series Fund	Government Money Market	Diversified
BlackRock High Yield Portfolio	Series Fund II	High Yield	Diversified
BlackRock U.S. Government Bond Portfolio	Series Fund II	U.S. Government Bond	Diversified

The Funds offer shares to insurance companies for their separate accounts to fund benefits under certain variable annuity and variable life insurance contracts.

The Funds, together with certain other registered investment companies advised by BlackRock Advisors, LLC (the “Manager”) or its affiliates, are included in a complex of open-end funds referred to as the Equity-Bond Complex.

Government Money Market operates as a “government money market fund” under Rule 2a-7 under the 1940 Act. The Fund is not subject to liquidity fees or temporary suspensions of redemptions due to declines in the Fund’s weekly liquid assets.

Reorganization: The Board (as defined below) approved an Agreement and Plan of Reorganization with respect to each of the following funds (each, a “Target Fund”), pursuant to which each Target Fund reorganized into a newly created series (each, an “Acquiring Fund”) of BlackRock Series Fund II, Inc., a newly organized Maryland corporation. These reorganizations (the “Reorganizations”) closed on September 17, 2018 and were not subject to approval by shareholders of the Target Funds.

Target Fund	Target Fund’s Registrant	Acquiring Fund	Acquiring Fund’s Registrant
BlackRock U.S Government Bond Portfolio	BlackRock Series Fund, Inc.	BlackRock U.S. Government Bond Portfolio	BlackRock Series Fund II, Inc.
BlackRock High Yield Portfolio	BlackRock Series Fund, Inc.	BlackRock High Yield Portfolio	BlackRock Series Fund II, Inc.

The Reorganizations were effected in connection with the proposed reconfiguration of the boards of directors/trustees of certain BlackRock-advised funds.

Each Acquiring Fund has the same investment objective, strategies and policies, investment adviser, portfolio management team and service providers as the corresponding Target Fund. Each Target Fund is the performance and accounting survivor of its Reorganization, meaning that the corresponding Acquiring Fund assumed the performance and financial history of the Target Fund upon completion of the Reorganization. In addition, each Acquiring Fund is subject to the same contractual arrangements, including the same contractual fees and expenses, as those of the corresponding Target Fund as of the date of the Reorganization. The Reorganizations were tax-free, meaning that each Target Fund’s shareholders became shareholders of the corresponding Acquiring Fund without realizing any gain or loss for federal income tax purposes.

As a result, each Acquiring Fund acquired all of the assets and assumed all of the liabilities of the corresponding Target Fund in exchange for an equal aggregate value of newly-issued shares of the Acquiring Fund. Each shareholder of a Target Fund received shares of the corresponding Acquiring Fund in an amount equal to the aggregate net asset value (“NAV”) of such shareholder’s Target Fund shares, as determined at the close of business on September 14, 2018.

The Reorganizations were accomplished by a tax-free exchange of shares of each Acquiring Fund in the following amounts and at the following conversion ratio:

Target Fund	Shares Prior to Reorganization		Conversion Ratio		Shares Post- Reorganization
U.S. Government Bond		5,309,106		1		5,309,106
High Yield		5,600,142		1		5,600,142

For financial reporting purposes, assets received and shares issued by each Acquiring Fund were recorded at fair value. However, the cost basis of the investments received from each Target Fund were carried forward to align ongoing reporting of each Acquiring Fund’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.

Prior to the Reorganizations, the Acquiring Funds had not yet commenced operations and had no assets or liabilities. Each Target Fund’s net assets, fair value and cost of investments and derivative financial instruments prior to the Reorganizations were as follows:

Target Fund	Net Assets		Fair Value of Investments		Cost of Investments
U.S. Government Bond	$	55,767,462	$	51,133,566	$	52,360,462
High Yield		29,943,625		29,394,482		29,569,493

128 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements  (continued)

Prior to the Reorganizations’ effective date, each Target Fund began to incur expenses in connection with the proposed realignment and consolidation of the boards of directors/trustees of certain BlackRock-advised funds. These expenses and liabilities have been assumed by each respective Acquiring Fund. The Manager has voluntarily agreed to reimburse certain funds for all or a portion of such expenses, which amounts are included in fees waived and/or reimbursed by the Manager in the Statements of Operations.

Basis of Consolidation: The accompanying consolidated financial statements of Global Allocation include the accounts of BlackRock Cayman Global Allocation Portfolio I, Ltd. (the “Subsidiary”), which is a wholly-owned subsidiary of Global Allocation and primarily invests in commodity-related instruments and other derivatives. The Subsidiary enables Global Allocation to hold these commodity-related instruments and satisfy regulated investment company tax requirements. Global Allocation may invest up to 25% of its total assets in the Subsidiary. The net assets of the Subsidiary as of period end were $5,425,892, which is 3.1% of Global Allocation’s consolidated net assets. Intercompany accounts and transactions, if any, have been eliminated. The Subsidiary is subject to the same investment policies and restrictions that apply to Global Allocation, except that the Subsidiary may invest without limitation in commodity-related instruments.

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. Below is a summary of significant accounting policies:

Investment Transactions and Income Recognition: For financial reporting purposes, investment transactions are recorded on the dates the transactions are entered into (the “trade dates”). Realized gains and losses on investment transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend date. Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when the Funds are informed of the ex-dividend date. Under the applicable foreign tax laws, a withholding tax at various rates may be imposed on capital gains, dividends and interest. Upon notification from issuers, a portion of the dividend income received from a real estate investment trust may be redesignated as a reduction of cost of the related investment and/or realized gain. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized on an accrual basis.

Foreign Currency Translation: Each Fund’s books and records are maintained in U.S. dollars. Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates determined as of the close of trading on the New York Stock Exchange (“NYSE”). Purchases and sales of investments are recorded at the rates of exchange prevailing on the respective dates of such transactions. Generally, when the U.S. dollar rises in value against a foreign currency, the investments denominated in that currency will lose value; the opposite effect occurs if the U.S. dollar falls in relative value.

Each Fund does not isolate the portion of the results of operations arising as a result of changes in the exchange rates from the changes in the market prices of investments held or sold for financial reporting purposes. Accordingly, the effects of changes in exchange rates on investments are not segregated in the Statements of Operations from the effects of changes in market prices of those investments, but are included as a component of net realized and unrealized gain (loss) from investments. Each Fund reports realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are generally treated as ordinary income for U.S. federal income tax purposes.

Segregation and Collateralization: In cases where a Fund enters into certain investments (e.g., dollar rolls, TBA sale commitments, futures contracts, forward foreign currency exchange contracts, options written, swaps and short sales) or certain borrowings (e.g., reverse repurchase transactions) that would be treated as “senior securities” for 1940 Act purposes, a Fund may segregate or designate on its books and records cash or liquid assets having a market value at least equal to the amount of its future obligations under such investments or borrowings. Doing so allows the investment or borrowing to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Funds may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments or obligations.

Distributions: For Government Money Market, distributions from net investment income are declared daily and paid monthly. For Advantage Large Cap Core, Balanced Capital, Capital Appreciation and Global Allocation, distributions from net investment income are declared and paid at least annually. For High Yield and U.S. Government Bond, distributions from net investment income are declared daily and paid monthly. For each Fund, distributions of capital gains are recorded on the ex-dividend dates and made at least annually.

Portions of return of capital distributions under U.S. GAAP may be taxed at ordinary income rates.

The character of distributions is determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP. The portion of distributions, if any, that exceeds a Fund’s current and accumulated earnings and profits, as measured on a tax basis, constitute a non-taxable return of capital. Realized net capital gains can be offset by capital losses carried forward from prior years. However, certain Funds have capital loss carryforwards from pre-2012 tax years that offset realized net capital gains but do not offset current earnings and profits. Consequently, if distributions in any tax year are less than the Fund’s current earnings and profits but greater than net investment income and net realized capital gains (taxable income), distributions in excess of taxable income are not treated as non-taxable return of capital, but rather may be taxable to shareholders at ordinary income rates. Under certain circumstances, taxable excess distributions could be significant. See Note 8, Income Tax Information, for the tax character of each Fund’s distributions paid during the year.

Net income and realized gains from investments held by the Subsidiary are treated as ordinary income for tax purposes. If a net loss is realized by the Subsidiary in any taxable year, the loss will generally not be available to offset Global Allocation’s ordinary income and/or capital gains for that year.

NOTES TO FINANCIAL STATEMENTS 129

Notes to Financial Statements  (continued)

Recent Accounting Standards: In March 2017, the Financial Accounting Standards Board issued Accounting Standards Update “Premium Amortization of Purchased Callable Debt Securities” which amends the amortization period for certain purchased callable debt securities. Under the new guidance, the premium amortization of purchased callable debt securities that have explicit, non-contingent call features and are callable at fixed prices will be amortized to the earliest call date. The guidance will be applied on a modified retrospective basis and is effective for fiscal years, and their interim periods, beginning after December 15, 2018. Management is currently evaluating the impact of this guidance to the Funds.

In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update 2018-13 “Changes to the Disclosure Requirements for Fair Value Measurement” which modifies disclosure requirements for fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. Management is currently evaluating the impact of this guidance to the Funds.

Indemnifications: In the normal course of business, a Fund enters into contracts that contain a variety of representations that provide general indemnification. A Fund’s maximum exposure under these arrangements is unknown because it involves future potential claims against a Fund, which cannot be predicted with any certainty.

Other: Expenses directly related to a Fund are charged to that Fund. Other operating expenses shared by several funds, including other funds managed by the Manager, are prorated among those funds on the basis of relative net assets or other appropriate methods.

Global Allocation has an arrangement with its custodian whereby credits are earned on uninvested cash balances, which could be used to reduce custody fees and/or overdraft charges. Global Allocation may incur charges on certain uninvested cash balances and overdrafts, subject to certain conditions.

3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Investment Valuation Policies: The Funds’ investments are valued at fair value (also referred to as “market value” within the financial statements) as of the close of trading on the NYSE (generally 4:00 p.m., Eastern time). U.S. GAAP defines fair value as the price the Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Funds determine the fair values of their financial instruments using various independent dealers or pricing services under policies approved by the Boards of Directors of the Companies (together, the “Board”). The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to oversee the pricing function for all financial instruments.

Government Money Market’s investments are valued under the amortized cost method which approximates current market value in accordance with Rule 2a-7 under the 1940 Act. Under this method, investments are valued at cost when purchased and, thereafter, a constant proportionate accretion of discounts and amortization of premiums are recorded until the maturity of the security. The Fund seeks to maintain its NAV per share at $1.00, although there is no assurance that it will be able to do so on a continuing basis.

Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of each Fund’s assets and liabilities:

• Equity investments traded on a recognized securities exchange are valued at the official closing price each day, if available. For equity investments traded on more than one exchange, the official closing price on the exchange where the stock is primarily traded is used. Equity investments traded on a recognized exchange for which there were no sales on that day may be valued at the last available bid (long positions) or ask (short positions) price.

• Fixed-income securities for which market quotations are readily available are generally valued using the last available bid prices or current market quotations provided by independent dealers or third party pricing services. Floating rate loan interests are valued at the mean of the bid prices from one or more independent brokers or dealers as obtained from a third party pricing service. Pricing services generally value fixed-income securities assuming orderly transactions of an institutional round lot size, but a fund may hold or transact in such securities in smaller, odd lot sizes. Odd lots may trade at lower prices than institutional round lots. The pricing services may use matrix pricing or valuation models that utilize certain inputs and assumptions to derive values, including transaction data (e.g., recent representative bids and offers), credit quality information, perceived market movements, news, and other relevant information. Certain fixed-income securities, including asset-backed and mortgage related securities may be valued based on valuation models that consider the estimated cash flows of each tranche of the entity, establish a benchmark yield and develop an estimated tranche specific spread to the benchmark yield based on the unique attributes of the tranche. The amortized cost method of valuation may be used with respect to debt obligations with sixty days or less remaining to maturity unless the Manager determines such method does not represent fair value.

Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the NYSE. Occasionally, events affecting the values of such instruments may occur between the foreign market close and the close of trading on the NYSE that may not be reflected in the computation of the Funds’ net assets. Each business day, the Funds use a pricing service to assist with the valuation of certain foreign exchange-traded equity securities and foreign exchange-traded over-the-counter (“OTC”) options (the “Systematic Fair Value Price”). Using current market factors, the Systematic Fair Value Price is designed to value such foreign securities and foreign options at fair value as of the close of trading on the NYSE, which follows the close of the local markets.

• Municipal investments (including commitments to purchase such investments on a “when-issued” basis) are valued on the basis of prices provided by dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments and information with respect to various relationships between investments.

• Investments in open-end U.S. mutual funds are valued at NAV each business day.

• The Funds value their investment in SL Liquidity Series, LLC, Money Market Series (the “Money Market Series”) at fair value, which is ordinarily based upon their pro rata ownership in the underlying fund’s net assets. The Money Market Series seeks current income consistent with maintaining liquidity and preserving capital. Although the Money Market Series is not registered under the 1940 Act, its investments may follow the parameters of investments by a money market fund that is subject to Rule 2a-7 under the 1940 Act.

• Futures contracts traded on exchanges are valued at their last sale price.

130 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements  (continued)

• Forward foreign currency exchange contracts are valued at the mean between the bid and ask prices and are determined as of the close of trading on the NYSE. Interpolated values are derived when the settlement date of the contract is an interim date for which quotations are not available.

• Exchange-traded options are valued at the mean between the last bid and ask prices at the close of the options market in which the options trade. An exchange-traded option for which there is no mean price is valued at the last bid (long positions) or ask (short positions) price. If no bid or ask price is available, the prior day’s price will be used, unless it is determined that the prior day’s price no longer reflects the fair value of the option. OTC options and options on swaps (“swaptions”) are valued by an independent pricing service using a mathematical model, which incorporates a number of market data factors, such as the trades and prices of the underlying instruments.

• Swap agreements are valued utilizing quotes received daily by the Funds’ pricing service or through brokers, which are derived using daily swap curves and models that incorporate a number of market data factors, such as discounted cash flows, trades and values of the underlying reference instruments.

• To-be-announced (“TBA”) commitments are valued on the basis of last available bid prices or current market quotations provided by pricing services.

If events (e.g., a company announcement, market volatility or a natural disaster) occur that are expected to materially affect the value of such investments, or in the event that the application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the Global Valuation Committee, or its delegate, in accordance with a policy approved by the Board as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the Global Valuation Committee will include market approach, income approach and cost approach. Valuation techniques such as discounted cash flow, use of market comparables and matrix pricing are types of valuation approaches and are typically used in determining fair value. When determining the price for Fair Valued Investments, the Global Valuation Committee, or its delegate, seeks to determine the price that each Fund might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the Global Valuation Committee, or its delegate, deems relevant and consistent with the principles of fair value measurement.

The Global Valuation Committee, or its delegate, employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of each Fund’s pricing vendors, regular reviews of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices and large movements in market values and reviews of any market related activity. The pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis. As a result of the inherent uncertainty in valuation of these investments, the fair values may differ from the values that would have been used had an active market existed.

For investments in equity or debt issued by privately held companies or funds (a “Private Company” or collectively, the “Private Companies”) and other Fair Valued Investments, the fair valuation approaches that are used by third party pricing services utilize one or a combination of, but not limited to, the following inputs:

	Standard Inputs Generally Considered By Third Party Pricing Services
Market approach	(i)  recent market transactions, including subsequent rounds of financing, in the underlying investment or comparable issuers; (ii)   recapitalizations and other transactions across the capital structure; and (iii)  market multiples of comparable issuers
Income approach	(i)  future cash flows discounted to present and adjusted as appropriate for liquidity, credit, and/or market risks; (ii)   quoted prices for similar investments or assets in active markets; and (iii)  other risk factors, such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, recovery rates, liquidation amounts and/or default rates.
Cost approach.	(i)  audited or unaudited financial statements, investor communications and financial or operational metrics issued by the Private Company; (ii)   changes in the valuation of relevant indices or publicly traded companies comparable to the Private Company; (iii)  relevant news and other public sources; and (iv)  known secondary market transactions in the Private Company’s interests and merger or acquisition activity in companies comparable to the Private Company.

Investments in series of preferred stock issued by Private Companies are typically valued utilizing market approach in determining the enterprise value of the company. Such investments often contain rights and preferences that differ from other series of preferred and common stock of the same issuer. Valuation techniques such as an option pricing model (“OPM”), a probability weighted expected return model (“PWERM”) or a hybrid of those techniques are used in allocating enterprise value of the company, as deemed appropriate under the circumstances. The use of OPM and PWERM techniques involve a determination of the exit scenarios of the investment in order to appropriately allocate the enterprise value of the company among the various parts of its capital structure.

The Private Companies are not subject to the public company disclosure, timing, and reporting standards as other investments held by a Fund. Typically, the most recently available information by a Private Company is as of a date that is earlier than the date a Fund is calculating its NAV. This factor may result in a difference between the value of the investment and the price a Fund could receive upon the sale of the investment.

Fair Value Hierarchy: Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial statements purposes as follows:

• Level 1 — Unadjusted price quotations in active markets/exchanges for identical assets or liabilities that each Fund has the ability to access

• Level 2 — Other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market–corroborated inputs)

NOTES TO FINANCIAL STATEMENTS 131

Notes to Financial Statements  (continued)

• Level 3 — Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including each Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Investments classified within Level 3 have significant unobservable inputs used by the Global Valuation Committee in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by Private Companies. There may not be a secondary market, and/or there are a limited number of investors. Level 3 investments may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Global Valuation Committee in the absence of market information.

Changes in valuation techniques may result in transfers into or out of an assigned level within the hierarchy. In accordance with each Fund’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investments and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities.

As of December 31, 2018, certain investments of the Funds were valued using NAV per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy.

4. SECURITIES AND OTHER INVESTMENTS

Asset-Backed and Mortgage-Backed Securities: Asset-backed securities are generally issued as pass-through certificates or as debt instruments. Asset-backed securities issued as pass-through certificates represent undivided fractional ownership interests in an underlying pool of assets. Asset-backed securities issued as debt instruments, which are also known as collateralized obligations, are typically issued as the debt of a special purpose entity organized solely for the purpose of owning such assets and issuing such debt. Asset-backed securities are often backed by a pool of assets representing the obligations of a number of different parties. The yield characteristics of certain asset-backed securities may differ from traditional debt securities. One such major difference is that all or a principal part of the obligations may be prepaid at any time because the underlying assets (i.e., loans) may be prepaid at any time. As a result, a decrease in interest rates in the market may result in increases in the level of prepayments as borrowers, particularly mortgagors, refinance and repay their loans. An increased prepayment rate with respect to an asset-backed security will have the effect of shortening the maturity of the security. In addition, a fund may subsequently have to reinvest the proceeds at lower interest rates. If a fund has purchased such an asset-backed security at a premium, a faster than anticipated prepayment rate could result in a loss of principal to the extent of the premium paid.

For mortgage pass-through securities (the “Mortgage Assets”) there are a number of important differences among the agencies and instrumentalities of the U.S. Government that issue mortgage-related securities and among the securities that they issue. For example, mortgage-related securities guaranteed by Ginnie Mae are guaranteed as to the timely payment of principal and interest by Ginnie Mae and such guarantee is backed by the full faith and credit of the United States. However, mortgage-related securities issued by Freddie Mac and Fannie Mae, including Freddie Mac and Fannie Mae guaranteed mortgage pass-through certificates, which are solely the obligations of Freddie Mac and Fannie Mae, are not backed by or entitled to the full faith and credit of the United States, but are supported by the right of the issuer to borrow from the U.S. Treasury.

Non-agency mortgage-backed securities are securities issued by non-governmental issuers and have no direct or indirect government guarantees of payment and are subject to various risks. Non-agency mortgage loans are obligations of the borrowers thereunder only and are not typically insured or guaranteed by any other person or entity. The ability of a borrower to repay a loan is dependent upon the income or assets of the borrower. A number of factors, including a general economic downturn, acts of God, terrorism, social unrest and civil disturbances, may impair a borrower’s ability to repay its loans.

Collateralized Debt Obligations: Collateralized debt obligations (“CDOs”), including collateralized bond obligations (“CBOs”) and collateralized loan obligations (“CLOs”), are types of asset-backed securities. A CDO is an entity that is backed by a diversified pool of debt securities (CBOs) or syndicated bank loans (CLOs). The cash flows of the CDO can be split into multiple segments, called “tranches,” which will vary in risk profile and yield. The riskiest segment is the subordinated or “equity” tranche. This tranche bears the greatest risk of defaults from the underlying assets in the CDO and serves to protect the other, more senior, tranches from default in all but the most severe circumstances. Since it is shielded from defaults by the more junior tranches, a “senior” tranche will typically have higher credit ratings and lower yields than their underlying securities, and often receive investment grade ratings from one or more of the nationally recognized rating agencies. Despite the protection from the more junior tranches, senior tranches can experience substantial losses due to actual defaults, increased sensitivity to future defaults and the disappearance of one or more protecting tranches as a result of changes in the credit profile of the underlying pool of assets.

Inflation-Indexed Bonds: Inflation-indexed bonds (other than municipal inflation-indexed and certain corporate inflation-indexed bonds) are fixed-income securities whose principal value is periodically adjusted according to the rate of inflation. If the index measuring inflation rises or falls, the principal value of inflation-indexed bonds (other than municipal inflation-indexed and certain corporate inflation-indexed bonds) will be adjusted upward or downward, and consequently the interest payable on these securities (calculated with respect to a larger or smaller principal amount) will be increased or reduced, respectively. Any upward or downward adjustment in the principal amount of an inflation-indexed bond will be included as interest income in the Statements of Operations, even though investors do not receive their principal until maturity. Repayment of the original bond principal upon maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds. For bonds that do not provide a similar guarantee, the adjusted principal value of the bond repaid at maturity may be less than the original principal. With regard to municipal inflation-indexed bonds and certain corporate inflation-indexed bonds, the inflation adjustment is typically reflected in the semi-annual coupon payment. As a result, the principal value of municipal inflation-indexed bonds and such corporate inflation-indexed bonds does not adjust according to the rate of inflation.

Multiple Class Pass-Through Securities: Multiple class pass-through securities, including collateralized mortgage obligations (“CMOs”) and commercial mortgage-backed securities, may be issued by Ginnie Mae, U.S. Government agencies or instrumentalities or by trusts formed by private originators of, or investors in, mortgage

132 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements  (continued)

loans. In general, CMOs are debt obligations of a legal entity that are collateralized by a pool of residential or commercial mortgage loans or Mortgage Assets. The payments on these are used to make payments on the CMOs or multiple pass-through securities. Multiple class pass-through securities represent direct ownership interests in the Mortgage Assets. Classes of CMOs include interest only (“IOs”), principal only (“POs”), planned amortization classes and targeted amortization classes. IOs and POs are stripped mortgage-backed securities representing interests in a pool of mortgages, the cash flow from which has been separated into interest and principal components. IOs receive the interest portion of the cash flow while POs receive the principal portion. IOs and POs can be extremely volatile in response to changes in interest rates. As interest rates rise and fall, the value of IOs tends to move in the same direction as interest rates. POs perform best when prepayments on the underlying mortgages rise since this increases the rate at which the principal is returned and the yield to maturity on the PO. When payments on mortgages underlying a PO are slower than anticipated, the life of the PO is lengthened and the yield to maturity is reduced. If the underlying Mortgage Assets experience greater than anticipated prepayments of principal, a fund’s initial investment in the IOs may not fully recoup.

Stripped Mortgage-Backed Securities: Stripped mortgage-backed securities are typically issued by the U.S. Government, its agencies and instrumentalities. Stripped mortgage-backed securities are usually structured with two classes that receive different proportions of the interest (IOs) and principal (POs) distributions on a pool of Mortgage Assets. Stripped mortgage-backed securities may be privately issued.

Zero-Coupon Bonds: Zero-coupon bonds are normally issued at a significant discount from face value and do not provide for periodic interest payments. These bonds may experience greater volatility in market value than other debt obligations of similar maturity which provide for regular interest payments.

Capital Securities and Trust Preferred Securities: Capital securities, including trust preferred securities, are typically issued by corporations, generally in the form of interest-bearing notes with preferred securities characteristics. In the case of trust preferred securities, an affiliated business trust of a corporation issues these securities, generally in the form of beneficial interests in subordinated debentures or similarly structured securities. The securities can be structured with either a fixed or adjustable coupon that can have either a perpetual or stated maturity date. For trust preferred securities, the issuing bank or corporation pays interest to the trust, which is then distributed to holders of these securities as a dividend. Dividends can be deferred without creating an event of default or acceleration, although maturity cannot take place unless all cumulative payment obligations have been met. The deferral of payments does not affect the purchase or sale of these securities in the open market. These securities generally are rated below that of the issuing company’s senior debt securities and are freely callable at the issuer’s option.

Preferred Stocks: Preferred stock has a preference over common stock in liquidation (and generally in receiving dividends as well), but is subordinated to the liabilities of the issuer in all respects. As a general rule, the market value of preferred stock with a fixed dividend rate and no conversion element varies inversely with interest rates and perceived credit risk, while the market price of convertible preferred stock generally also reflects some element of conversion value. Because preferred stock is junior to debt securities and other obligations of the issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a preferred stock than in a more senior debt security with similar stated yield characteristics. Unlike interest payments on debt securities, preferred stock dividends are payable only if declared by the issuer’s board of directors. Preferred stock also may be subject to optional or mandatory redemption provisions.

Warrants: Warrants entitle a fund to purchase a specified number of shares of common stock and are non-income producing. The purchase price and number of shares are subject to adjustment under certain conditions until the expiration date of the warrants, if any. If the price of the underlying stock does not rise above the strike price before the warrant expires, the warrant generally expires without any value and a fund will lose any amount it paid for the warrant. Thus, investments in warrants may involve more risk than investments in common stock. Warrants may trade in the same markets as their underlying stock; however, the price of the warrant does not necessarily move with the price of the underlying stock.

Floating Rate Loan Interests: Floating rate loan interests are typically issued to companies (the “borrower”) by banks, other financial institutions, or privately and publicly offered corporations (the “lender”). Floating rate loan interests are generally non-investment grade, often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged or in bankruptcy proceedings. In addition, transactions in floating rate loan interests may settle on a delayed basis, which may result in proceeds from the sale not being readily available for a fund to make additional investments or meet its redemption obligations. Floating rate loan interests may include fully funded term loans or revolving lines of credit. Floating rate loan interests are typically senior in the corporate capital structure of the borrower. Floating rate loan interests generally pay interest at rates that are periodically determined by reference to a base lending rate plus a premium. Since the rates reset only periodically, changes in prevailing interest rates (and particularly sudden and significant changes) can be expected to cause some fluctuations in the NAV of a fund to the extent that it invests in floating rate loan interests. The base lending rates are generally the lending rate offered by one or more European banks, such as the London Interbank Offered Rate (“LIBOR”), the prime rate offered by one or more U.S. banks or the certificate of deposit rate. Floating rate loan interests may involve foreign borrowers, and investments may be denominated in foreign currencies. These investments are treated as investments in debt securities for purposes of a fund’s investment policies.

When a fund purchases a floating rate loan interest, it may receive a facility fee and when it sells a floating rate loan interest, it may pay a facility fee. On an ongoing basis, a fund may receive a commitment fee based on the undrawn portion of the underlying line of credit amount of a floating rate loan interest. Facility and commitment fees are typically amortized to income over the term of the loan or term of the commitment, respectively. Consent and amendment fees are recorded to income as earned. Prepayment penalty fees, which may be received by a fund upon the prepayment of a floating rate loan interest by a borrower, are recorded as realized gains. A fund may invest in multiple series or tranches of a loan. A different series or tranche may have varying terms and carry different associated risks.

Floating rate loan interests are usually freely callable at the borrower’s option. A fund may invest in such loans in the form of participations in loans (“Participations”) or assignments (“Assignments”) of all or a portion of loans from third parties. Participations typically will result in a fund having a contractual relationship only with the lender, not with the borrower. A fund has the right to receive payments of principal, interest and any fees to which it is entitled only from the lender selling the Participation and only upon receipt by the lender of the payments from the borrower. In connection with purchasing Participations, a fund generally will have no right to enforce compliance by the borrower with the terms of the loan agreement, nor any rights of offset against the borrower. A fund may not benefit directly from any collateral supporting the loan in which it has purchased the Participation. As a result, a fund assumes the credit risk of both the borrower and the lender that is selling the Participation. A fund’s investment in loan participation interests involves the risk of insolvency of the financial intermediaries who are parties to the transactions. In the event of the insolvency of the lender selling the Participation, a fund may be treated as a general creditor of the lender and may not benefit from any offset between the lender and the borrower. Assignments typically result in a fund having a direct contractual relationship with the borrower, and a fund may enforce compliance by the borrower with the terms of the loan agreement.

NOTES TO FINANCIAL STATEMENTS 133

Notes to Financial Statements  (continued)

In connection with floating rate loan interests, High Yield may also enter into unfunded floating rate loan interests (“commitments”). In connection with these commitments, a fund earns a commitment fee, typically set as a percentage of the commitment amount. Such fee income, which is included in interest income in the Statements of Operations, is recognized ratably over the commitment period. Unfunded floating rate loan interests are marked-to-market daily, and any unrealized appreciation (depreciation) is included in the Statements of Assets and Liabilities and Statements of Operations. As of period end, High Yield had the following unfunded floating rate loan interests:

Borrower	Par		Commitment Amount		Value		Unrealized Appreciation (Depreciation)
Access CIG LLC, Term Loan	$	831	$	831	$	820	$	(11	)
Dentalcorp Perfect Smile ULC, Delayed Draw Term Loan		999		999		968		(31	)
Mavis Tire Express Services Corp., Delayed Draw 1st Lien Term Loan		995		990		958		(32	)
							$	(74	)

Forward Commitments and When-Issued Delayed Delivery Securities: Certain funds may purchase securities on a when-issued basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. A fund may purchase securities under such conditions with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, a fund may be required to pay more at settlement than the security is worth. In addition, a fund is not entitled to any of the interest earned prior to settlement. When purchasing a security on a delayed delivery basis, a fund assumes the rights and risks of ownership of the security, including the risk of price and yield fluctuations. In the event of default by the counterparty, a fund’s maximum amount of loss is the unrealized appreciation of unsettled when-issued transactions.

TBA Commitments: TBA commitments are forward agreements for the purchase or sale of mortgage-backed securities for a fixed price, with payment and delivery on an agreed upon future settlement date. The specific securities to be delivered are not identified at the trade date. However, delivered securities must meet specified terms, including issuer, rate and mortgage terms. When entering into TBA commitments, a fund may take possession of or deliver the underlying mortgage-backed securities but can extend the settlement or roll the transaction. TBA commitments involve a risk of loss if the value of the security to be purchased or sold declines or increases, respectively, prior to settlement date.

In order to better define contractual rights and to secure rights that will help a fund mitigate their counterparty risk, TBA commitments may be entered into by a fund under Master Securities Forward Transaction Agreements (each, an “MSFTA”). An MSFTA typically contains, among other things, collateral posting terms and netting provisions in the event of default and/or termination event. The collateral requirements are typically calculated by netting the mark-to-market amount for each transaction under such agreement and comparing that amount to the value of the collateral currently pledged by a fund and the counterparty. Cash collateral that has been pledged to cover the obligations of a fund and cash collateral received from the counterparty, if any, is reported separately in the Statements of Assets and Liabilities as cash pledged as collateral for TBA commitments or cash received as collateral for TBA commitments, respectively. Non-cash collateral pledged by a fund, if any, is noted in the Schedules of Investments. Typically, a fund is permitted to sell, re-pledge or use the collateral it receives; however, the counterparty is not permitted to do so. To the extent amounts due to a fund are not fully collateralized, contractually or otherwise, a fund bears the risk of loss from counterparty non-performance.

Mortgage Dollar Roll Transactions: Certain funds may sell TBA mortgage-backed securities and simultaneously contract to repurchase substantially similar (i.e., same type, coupon and maturity) securities on a specific future date at an agreed upon price. During the period between the sale and repurchase, a fund is not entitled to receive interest and principal payments on the securities sold. Mortgage dollar roll transactions are treated as purchases and sales and realize gains and losses on these transactions. Mortgage dollar rolls involve the risk that the market value of the securities that a fund is required to purchase may decline below the agreed upon repurchase price of those securities.

Repurchase Agreements: Repurchase agreements are commitments to purchase a security from a counterparty who agrees to repurchase the same security at a mutually agreed upon date and price. On a daily basis, the counterparty is required to maintain collateral subject to the agreement and in value no less than the agreed upon repurchase amount. Pursuant to the custodial undertaking associated with a tri-party repurchase arrangement, an unaffiliated third party custodian maintains accounts to hold collateral for a fund and its counterparties. Typically, a fund and counterparty are not permitted to sell, re-pledge or use the collateral absent a default by the counterparty or a fund, respectively.

In the event the counterparty defaults and the fair value of the collateral declines, a fund could experience losses, delays and costs in liquidating the collateral.

Repurchase agreements are entered into by a fund under Master Repurchase Agreements (each, an “MRA”). The MRA permits a fund, under certain circumstances including an event of default (such as bankruptcy or insolvency), to offset payables and/or receivables with collateral held by and/or posted to the counterparty. As a result, one single net payment is created. Bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of the MRA counterparty’s bankruptcy or insolvency. Based on the terms of the MRA, a fund receives securities as collateral with a market value in excess of the repurchase price at maturity. Upon a bankruptcy or insolvency of the MRA counterparty, a fund would recognize a liability with respect to such excess collateral. The liability reflects a fund’s obligation under bankruptcy law to return the excess to the counterparty.

Borrowed Bond Agreements: Repurchase agreements may be referred to as borrowed bond agreements when entered into in connection with short sales of bonds. In a borrowed bond agreement, a fund borrows a bond from a counterparty in exchange for cash collateral. The agreement contains a commitment that the security and the cash will be returned to the counterparty and a fund at a mutually agreed upon date. Certain agreements have no stated maturity and can be terminated by either party at any time. Earnings on cash collateral and compensation to the lender of the bond are based on agreed upon rates between a fund and the counterparty. The value of the underlying cash collateral approximates the market value and accrued interest of the borrowed bond. To the extent that a borrowed bond transaction exceeds one business day, the value of the cash collateral in the possession of the counterparty is monitored on a daily basis to ensure the adequacy of the collateral. As the market value of the borrowed bond changes, the cash collateral is periodically increased or decreased with a frequency and in amounts prescribed in the borrowed bond agreement. A fund may also experience delays in gaining access to the collateral.

134 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements  (continued)

Reverse Repurchase Agreements: Reverse repurchase agreements are agreements with qualified third party broker dealers in which a fund sells securities to a bank or broker-dealer and agrees to repurchase the same securities at a mutually agreed upon date and price. A fund receives cash from the sale to use for other investment purposes. During the term of the reverse repurchase agreement, a fund continues to receive the principal and interest payments on the securities sold. Certain agreements have no stated maturity and can be terminated by either party at any time. Interest on the value of the reverse repurchase agreements issued and outstanding is based upon competitive market rates determined at the time of issuance. A fund may utilize reverse repurchase agreements when it is anticipated that the interest income to be earned from the investment of the proceeds of the transaction is greater than the interest expense of the transaction. Reverse repurchase agreements involve leverage risk. If a fund suffers a loss on its investment of the transaction proceeds from a reverse repurchase agreement, a fund would still be required to pay the full repurchase price. Further, a fund remains subject to the risk that the market value of the securities repurchased declines below the repurchase price. In such cases, a fund would be required to return a portion of the cash received from the transaction or provide additional securities to the counterparty.

Cash received in exchange for securities delivered plus accrued interest due to the counterparty is recorded as a liability in the Statements of Assets and Liabilities at face value including accrued interest. Due to the short-term nature of the reverse repurchase agreements, face value approximates fair value. Interest payments made by a fund to the counterparties are recorded as a component of interest expense in the Statements of Operations. In periods of increased demand for the security, a fund may receive a fee for the use of the security by the counterparty, which may result in interest income to a fund.

For the year ended December 31, 2018, the average amount of reverse repurchase agreements and the daily weighted average interest rate for the Funds were as follows:

	Balanced Capital			U.S. Government Bond
Average Borrowings	$	5,722,761		$	9,853,311
Daily Weighted Average Interest Rate		1.63	%		1.88	%

Borrowed bond agreements and reverse repurchase transactions are entered into by a fund under Master Repurchase Agreements (each, an “MRA”), which permit a fund, under certain circumstances, including an event of default (such as bankruptcy or insolvency), to offset payables and/or receivables under the MRA with collateral held and/or posted to the counterparty and create one single net payment due to or from a fund. With borrowed bond agreements and reverse repurchase transactions, typically a fund and counterparty under an MRA are permitted to sell, re-pledge, or use the collateral associated with the transaction. Bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of the MRA counterparty’s bankruptcy or insolvency. Pursuant to the terms of the MRA, a fund receives or posts securities and cash as collateral with a market value in excess of the repurchase price to be paid or received by a fund upon the maturity of the transaction. Upon a bankruptcy or insolvency of the MRA counterparty, a fund is considered an unsecured creditor with respect to excess collateral and, as such, the return of excess collateral may be delayed.

As of period end, the following table is a summary of the Funds’ open borrowed bond agreements and reverse repurchase agreements by counterparty which are subject to offset under an MRA on a net basis:

Counterparty	Borrowed Bond Agreements (a)		Borrowed Bond at Value including Accrued Interest (b)			Exposure Due (to) / from Counterparty before Collateral			Non-cash Collateral Received		Cash Collateral Received		Non-cash Collateral Pledged		Cash Collateral Pledged		Net Collateral (Received)/ Pledged		Net Exposure Due (to) / from Counterparty  (c)
Balanced Capital
BNP Paribas SA	$	315,112	$	(315,788	)	$	(676	)	$	—	$	—	$	—	$	—	$	—	$	(676	)
Deutsche Bank Securities, Inc.		2,431,013		(2,439,337	)		(8,324	)		—		—		—		—		—		(8,324	)
Merrill Lynch, Pierce, Fenner & Smith Inc.		1,166,350		(1,170,042	)		(3,692	)		—		—		—		—		—		(3,692	)
	$	3,912,475	$	(3,925,167	)	$	(12,692	)	$	—	$	—	$	—	$	—	$	—	$	(12,692	)

^(a)  Included in Investments at value — unaffiliated in the Statements of Assets and Liabilities.

^(b)  Includes accrued interest on borrowed bonds in the amount of $29,612 which is included in interest expense payable in the Statements of Assets and Liabilities.

^(c)  Net exposure represents the net receivable (payable) that would be due from/to the counterparty in the event of default.

Counterparty	Reverse Repurchase Agreements			Fair Value of Non-cash Collateral Pledged Including Accrued Interest (a)		Cash Collateral Pledged		Net Amount
U.S. Government Bond
BNP Paribas SA	$	(2,545,421	)	$	2,545,421	$	—	$	—
Merrill Lynch, Pierce, Fenner & Smith Inc.		(10,101,873	)		10,101,873		—		—
	$	(12,647,294	)	$	12,647,294	$	—	$	—

^(a)  Net collateral with a value of $12,656,183 has been pledged in connection with open reverse repurchase agreements. Excess of net collateral pledged to the individual counterparty is not shown for financial reporting purposes.

NOTES TO FINANCIAL STATEMENTS 135

Notes to Financial Statements  (continued)

In the event the counterparty of securities under an MRA files for bankruptcy or becomes insolvent, a fund’s use of the proceeds from the agreement may be restricted while the counterparty, or its trustee or receiver, determines whether or not to enforce a fund’s obligation to repurchase the securities.

Short Sale Transactions (Borrowed Bonds): In short sale transactions, a fund sells a security it does not hold in anticipation of a decline in the market price of that security. When a fund makes a short sale, it will borrow the security sold short (borrowed bond) and deliver the fixed-income security to the counterparty to which it sold the security short. An amount equal to the proceeds received by a fund is reflected as an asset and an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the market value of the short sale. A fund is required to repay the counterparty interest on the security sold short, which, if applicable, is included in interest expense in the Statements of Operations. A fund is exposed to market risk based on the amount, if any, that the market value of the security increases beyond the market value at which the position was sold. Thus, a short sale of a security involves the risk that instead of declining, the price of the security sold short will rise. The short sale of securities involves the possibility of an unlimited loss since there is an unlimited potential for the market price of the security sold short to increase. A gain is limited to the price at which a fund sold the security short. A realized gain or loss is recognized upon the termination of a short sale if the market price is either less than or greater than the proceeds originally received. There is no assurance that a fund will be able to close out a short position at a particular time or at an acceptable price.

Short Sale Transactions (Equities): In short sale transaction, a fund sells a security it does not hold in anticipation of a decline in the market price of that security. When a fund makes a short sale, it will borrow the security sold short from a broker/counterparty and deliver the security to the purchaser. To close out a short position, a fund delivers the same security to the broker and records a liability to reflect the obligation to return the security to the broker. The amount of the liability is subsequently marked-to-market to reflect the market value of the short sale. A fund maintains a segregated account of securities or deposits cash with the broker-dealer as collateral for the short sales. Cash deposited with the broker is recorded as an asset in the Statements of Assets and Liabilities. Securities segregated as collateral are denoted in the Schedules of Investments. A fund may pay a financing fee for the difference between the market value of the short position and the cash collateral deposited with the broker which would be recorded as interest expense. A fund is required to repay the counterparty any dividends received on the security sold short, which, if applicable, is shown as dividend expense in the Statements of Operations. A fund may pay a fee on the assets borrowed from the counterparty, which, if applicable, is shown as broker fees and expenses on short sales in the Statements of Operations. A fund is exposed to market risk based on the amount, if any, that the market value of the security increases beyond the market value at which the position was sold. Thus, a short sale of a security involves the risk that instead of declining, the price of the security sold short will rise. The short sale of securities involves the possibility of an unlimited loss since there is an unlimited potential for the market price of the security sold short to increase. A gain, limited to the price at which a fund sold the security short. A realized gain or loss is recognized upon the termination of a short sale if the market price is either less than or greater than the proceeds originally received. There is no assurance that a fund will be able to close out a short position at a particular time or at an acceptable price.

Securities Lending: Certain Funds may lend their securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Funds collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by each Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current market value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Fund and any additional required collateral is delivered to the Fund, or excess collateral returned by the Fund, on the next business day. During the term of the loan, the Funds are entitled to all distributions made on or in respect of the loaned securities, but do not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

The market value of any securities on loan, all of which were classified as common stocks and investment companies in the Funds’ Schedules of Investments, and the value of any related collateral are shown separately in the Statements of Assets and Liabilities as a component of investments at value — unaffiliated, and collateral on securities loaned at value, respectively. As of period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested by the securities lending agent, BlackRock Investment Management, LLC (“BIM”), if any, is disclosed in the Schedules of Investments.

Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements (each, an “MSLA”), which provide the right, in the event of default (including bankruptcy or insolvency), for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, the Funds, as lender, would offset the market value of the collateral received against the market value of the securities loaned. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, absent an event of default, the borrower can resell or re-pledge the loaned securities, and a Fund can reinvest cash collateral received in connection with loaned securities. Upon an event of default, the parties’ obligations to return the securities or collateral to the other party are extinguished, and the parties can resell or re-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting party’s net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.

As of period end, the following tables are a summary of the Funds’ securities lending agreements by counterparty which are subject to offset under an MSLA:

Counterparty	Securities Loaned at Value		Cash Collateral Received (a)			Net Amount (b)
Advantage Large Cap Core
Citigroup Global Markets Inc.	$	2,275,288	$	(2,275,288	)	$	—
Credit Suisse Securities (USA) LLC		28,372		(28,372	)		—
Deutsche Bank Securities Inc.		2,855		(2,855	)		—
JP Morgan Securities LLC		1,034,695		(1,034,695	)		—
Morgan Stanley & Co. LLC		242,281		(242,281	)		—
State Street Bank & Trust Co.		65,926		(65,926	)		—
UBS Securities LLC		493,347		(493,347	)		—
	$	4,142,764	$	(4,142,764	)	$	—

136 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements  (continued)

Counterparty	Securities Loaned at Value		Cash Collateral Received (a)			Net Amount (b)
Balanced Capital
Citigroup Global Markets Inc.	$	1,872,646	$	(1,872,646	)	$	—
Credit Suisse Securities (USA) LLC		268,815		(268,815	)		—
JP Morgan Securities LLC		1,396,813		(1,396,813	)		—
Morgan Stanley & Co. LLC		2,011,836		(2,011,836	)		—
State Street Bank & Trust Co.		55,695		(55,695	)		—
	$	5,605,805	$	(5,605,805	)	$	—
Capital Appreciation
Citigroup Global Markets Inc.	$	916,013	$	(916,013	)	$	—
Deutsche Bank Securities Inc.		1,226,035		(1,226,035	)		—
Fidelity Investments		233,520		(233,478	)		42
JP Morgan Securities LLC		2,130,083		(2,130,083	)		—
State Street Bank & Trust Co.		23,559		(23,559	)		—
	$	4,529,210	$	(4,529,168	)	$	42
Global Allocation
Citigroup Global Markets Inc.	$	1,453	$	(1,453	)	$	—
Credit Suisse Securities (USA) LLC		1,081,142		(1,081,142	)		—
JP Morgan Securities LLC		738,806		(738,806	)		—
Merrill Lynch, Pierce, Fenner & Smith		1,346		(1,261	)		85
Morgan Stanley & Co. LLC		267,986		(267,986	)		—
Nomura Securities International Inc.		12,054		(12,054	)		—
State Street Bank & Trust Co.		14,577		(14,577	)		—
	$	2,117,364	$	(2,117,279	)	$	85

^(a)  Cash Collateral with a value of $4,229,010, $5,717,412, $4,610,994 and $2,214,925 has been received by Advantage Large Cap Core, Balanced Capital, Capital Appreciation and Global Allocation, respectively, in connection with securities lending agreements. Collateral received in excess of the value of securities loaned from the individual counterparty, if any, is not shown for financial reporting purposes in the table above.

^(b) The market value of the loaned securities is determined as of December 31, 2018. Additional collateral is delivered to the Funds on the next business day in accordance with the MSLA. The net amount would be subject to the borrower default indemnity in the event of default by the counterparty.

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BIM. BIM’s indemnity allows for full replacement of the securities loaned if the collateral received does not cover the value on the securities loaned in the event of borrower default. Each Fund could incur a loss if the value of an investment purchased with cash collateral falls below the market value of loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received.

5. DERIVATIVE FINANCIAL INSTRUMENTS

The Funds engage in various portfolio investment strategies using derivative contracts both to increase the returns of the Funds and/or to manage their exposure to certain risks such as credit risk, equity risk, interest rate risk, foreign currency exchange rate risk, commodity price risk or other risks (e.g., inflation risk). Derivative financial instruments categorized by risk exposure are included in the Schedules of Investments. These contracts may be transacted on an exchange or OTC.

Futures Contracts: Futures contracts are purchased or sold to gain exposure to, or manage exposure to, changes in interest rates (interest rate risk) and changes in the value of equity securities (equity risk) or foreign currencies (foreign currency exchange rate risk).

Futures contracts are agreements between the Funds and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and on a specified date. Depending on the terms of a contract, it is settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash amount on the settlement date. Upon entering into a futures contract, the Funds are required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contract’s size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Amounts pledged, which are considered restricted, are included in cash pledged for futures contracts in the Statements of Assets and Liabilities.

Securities deposited as initial margin are designated in the Schedules of Investments and cash deposited, if any, is shown as cash pledged for futures contracts in the Statements of Assets and Liabilities. Pursuant to the contract, the Funds agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation (depreciation) and, if any, shown as variation margin receivable (or payable) on futures contracts in the Statements of Assets and Liabilities. When the contract is closed, a realized gain or loss is recorded in the Statements of Operations equal to the difference between the notional amount of the contract at the time it was opened and the notional amount at the time it was closed. The use of futures contracts involves the risk of an imperfect correlation in the movements in the price of futures contracts and interest, foreign currency exchange rates or underlying assets.

Forward Foreign Currency Exchange Contracts: Forward foreign currency exchange contracts are entered into to gain or reduce exposure to foreign currencies (foreign currency exchange rate risk).

A forward foreign currency exchange contract is an agreement between two parties to buy and sell a currency at a set exchange rate on a specified date. These contracts help to manage the overall exposure to the currencies in which some of the investments held by the Funds are denominated and in some cases, may be used to obtain exposure to a particular market.

NOTES TO FINANCIAL STATEMENTS 137

Notes to Financial Statements  (continued)

The contract is marked-to-market daily and the change in market value is recorded as unrealized appreciation (depreciation) in the Statements of Assets and Liabilities. When a contract is closed, a realized gain or loss is recorded in the Statements of Operations equal to the difference between the value at the time it was opened and the value at the time it was closed. Non-deliverable forward foreign currency exchange contracts are settled with the counterparty in cash without the delivery of foreign currency. The use of forward foreign currency exchange contracts involves the risk that the value of a forward foreign currency exchange contract changes unfavorably due to movements in the value of the referenced foreign currencies. Cash amounts pledged for forward foreign currency exchange contracts are considered restricted and are included in cash pledged as collateral for OTC derivatives in the Statements of Assets and Liabilities.

Options: Certain Funds purchase and write call and put options to increase or decrease their exposure to the risks of underlying instruments, including equity risk, interest rate risk and/or commodity price risk and/or, in the case of options written, to generate gains from options premiums.

A call option gives the purchaser (holder) of the option the right (but not the obligation) to buy, and obligates the seller (writer) to sell (when the option is exercised) the underlying instrument at the exercise or strike price at any time or at a specified time during the option period. A put option gives the holder the right to sell and obligates the writer to buy the underlying instrument at the exercise or strike price at any time or at a specified time during the option period.

Premiums paid on options purchased and premiums received on options written, as well as the daily fluctuation in market value, are included in investments at value — unaffiliated and options written at value, respectively, in the Statements of Assets and Liabilities. When an instrument is purchased or sold through the exercise of an option, the premium is offset against the cost or proceeds of the underlying instrument. When an option expires, a realized gain or loss is recorded in the Statements of Operations to the extent of the premiums received or paid. When an option is closed or sold, a gain or loss is recorded in the Statements of Operations to the extent the cost of the closing transaction exceeds the premiums received or paid. When the Funds write a call option, such option is typically “covered,” meaning that they hold the underlying instrument subject to being called by the option counterparty. When the Funds write a put option, such option is covered by cash in an amount sufficient to cover the obligation. These amounts, which are considered restricted, are included in cash pledged as collateral for options written in the Statements of Assets and Liabilities.

• Swaptions — Certain Funds purchase and write options on swaps (“swaptions”) primarily to preserve a return or spread on a particular investment or portion of the Funds’ holdings, as a duration management technique or to protect against an increase in the price of securities it anticipates purchasing at a later date. The purchaser and writer of a swaption is buying or granting the right to enter into a previously agreed upon interest rate or credit default swap agreement (interest rate risk and/or credit risk) at any time before the expiration of the option.

• Interest rate and caps and floors — Interest rate caps and floors are entered into to gain or reduce exposure to interest rates (interest rate risk and/or other risk). Caps are agreements whereby one party agrees to make payments to the other, in return for a premium, to the extent that interest rate indexes exceed a specified rate, or “cap.” Floors are agreements whereby one party agrees to make payments to the other, in return for a premium, to the extent that interest rate indexes fall below a specified rate, or “floor.” The maximum potential amount of future payments that a Fund would be required to make under an interest rate cap would be the notional amount times the percentage increase in interest rates determined by the difference between the interest rate index current value and the value at the time the cap was entered into.

• Foreign currency options — Certain Funds purchase and write foreign currency options, foreign currency futures and options on foreign currency futures to gain or reduce exposure to foreign currencies (foreign currency exchange rate risk). Foreign currency options give the purchaser the right to buy from or sell to the writer a foreign currency at any time before the expiration of the option.

• Barrier options — Certain Funds may purchase and write a variety of options with non-standard payout structures or other features (“barrier options”) that are generally traded OTC.

The Funds may invest in various types of barrier options, including down-and-out options, down-and-in options, double no-touch options, one-touch options, up-and-out options and up-and-in options. Down-and-out options expire worthless to the purchaser if the price of the underlying instrument falls below a specific barrier price level prior to the expiration date. Down-and-in options expire worthless to the purchaser unless the price of the underlying instrument falls below a specific barrier price level prior to the expiration date. Double no-touch options provide the purchaser an agreed-upon payout if the price of the underlying instrument does not reach or surpass predetermined barrier price levels prior to the option’s expiration date. One-touch options provide the purchaser an agreed-upon payout if the price of the underlying instrument reaches or surpasses predetermined barrier price levels prior to the expiration date. Up-and-out options expire worthless to the purchaser if the price of the underlying instrument increases beyond a predetermined barrier price level prior to the expiration date. Up-and-in options can only be exercised when the price of the underlying instrument increases beyond a predetermined barrier price level.

In purchasing and writing options, the Funds bear the risk of an unfavorable change in the value of the underlying instrument or the risk that they may not be able to enter into a closing transaction due to an illiquid market. Exercise of a written option could result in the Funds purchasing or selling a security when it otherwise would not, or at a price different from the current market value.

Swaps: Swap contracts are entered into to manage exposure to issuers, markets and securities. Such contracts are agreements between the Funds and a counterparty to make periodic net payments on a specified notional amount or a net payment upon termination. Swap agreements are privately negotiated in the OTC market and may be entered into as a bilateral contract (“OTC swaps”) or centrally cleared (“centrally cleared swaps”).

For OTC swaps, any upfront premiums paid and any upfront fees received are shown as swap premiums paid and swap premiums received, respectively, in the Statements of Assets and Liabilities and amortized over the term of the contract. The daily fluctuation in market value is recorded as unrealized appreciation (depreciation) on OTC Swaps in the Statements of Assets and Liabilities. Payments received or paid are recorded in the Statements of Operations as realized gains or losses, respectively. When an OTC swap is terminated, a realized gain or loss is recorded in the Statements of Operations equal to the difference between the proceeds from (or cost of) the closing transaction and the Funds’ basis in the contract, if any. Generally, the basis of the contract is the premium received or paid.

138 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements  (continued)

In a centrally cleared swap, immediately following execution of the swap contract, the swap contract is novated to a central counterparty (the “CCP”) and the Funds’ counterparty on the swap agreement becomes the CCP. The Funds are required to interface with the CCP through the broker. Upon entering into a centrally cleared swap, the Funds are required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on the size and risk profile of the particular swap. Securities deposited as initial margin are designated in the Schedules of Investments and cash deposited is shown as cash pledged for centrally cleared swaps in the Statements of Assets and Liabilities. Amounts pledged, which are considered restricted cash, are included in cash pledged for centrally cleared swaps in the Statements of Assets and Liabilities. Pursuant to the contract, the Funds agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation (depreciation) and shown as variation margin receivable (or payable) on centrally cleared swaps in the Statements of Assets and Liabilities. Payments received from (paid to) the counterparty, including at termination, are recorded as realized gains (losses) in the Statements of Operations.

• Credit default swaps — Credit default swaps are entered into to manage exposure to the market or certain sectors of the market, to reduce risk exposure to defaults of corporate and/or sovereign issuers or to create exposure to corporate and/or sovereign issuers to which a fund is not otherwise exposed (credit risk).

The Funds may either buy or sell (write) credit default swaps on single-name issuers (corporate or sovereign), a combination or basket of single-name issuers or traded indexes. Credit default swaps are agreements in which the protection buyer pays fixed periodic payments to the seller in consideration for a promise from the protection seller to make a specific payment should a negative credit event take place with respect to the referenced entity (e.g., bankruptcy, failure to pay, obligation acceleration, repudiation, moratorium or restructuring). As a buyer, if an underlying credit event occurs, the Funds will either (i) receive from the seller an amount equal to the notional amount of the swap and deliver the referenced security or underlying securities comprising the index, or (ii) receive a net settlement of cash equal to the notional amount of the swap less the recovery value of the security or underlying securities comprising the index. As a seller (writer), if an underlying credit event occurs, the Funds will either pay the buyer an amount equal to the notional amount of the swap and take delivery of the referenced security or underlying securities comprising the index or pay a net settlement of cash equal to the notional amount of the swap less the recovery value of the security or underlying securities comprising the index.

• Total return swaps — Total return swaps are entered into to obtain exposure to a security or market without owning such security or investing directly in such market or to exchange the risk/return of one market (e.g., fixed-income) with another market (e.g., equity or commodity prices) (equity risk, commodity price risk and/or interest rate risk).

Total return swaps are agreements in which there is an exchange of cash flows whereby one party commits to make payments based on the total return (distributions plus capital gains/losses) of an underlying instrument, or basket or underlying instruments, in exchange for fixed or floating rate interest payments. If the total return of the instrument or index underlying the transaction exceeds or falls short of the offsetting fixed or floating interest rate obligation, the Funds receive payment from or make a payment to the counterparty.

Certain total return swaps are designed to function as a portfolio of direct investments in long and short equity positions. This means that each Fund has the ability to trade in and out of these long and short positions within the swap and will receive the economic benefits and risks equivalent to direct investment in these positions, subject to certain adjustments due to events related to the counterparty. Benefits and risks include capital appreciation (depreciation), corporate actions and dividends received and paid, all of which are reflected in the swap’s market value. The market value also includes interest charges and credits (“financing fees”) related to the notional values of the long and short positions and cash balances within the swap. These interest charges and credits are based on a specified benchmark rate plus or minus a specified spread determined based upon the country and/or currency of the positions in the portfolio.

Positions within the swap and financing fees are reset periodically. During a reset, any unrealized appreciation (depreciation) on positions and accrued financing fees become available for cash settlement between the Funds and the counterparty. The amounts that are available for cash settlement are recorded as realized gains or losses in the Statements of Operations. Cash settlement in and out of the swap may occur at a reset date or any other date, at the discretion of the Funds and the counterparty, over the life of the agreement. Certain swaps have no stated expiration and can be terminated by either party at any time.

• Interest rate swaps — Interest rate swaps are entered into to gain or reduce exposure to interest rates or to manage duration, the yield curve or interest rate (interest rate risk).

Interest rate swaps are agreements in which one party pays a stream of interest payments, either fixed or floating, in exchange for another party’s stream of interest payments, either fixed or floating, on the same notional amount for a specified period of time. In more complex interest rate swaps, the notional principal amount may decline (or amortize) over time.

• Currency swaps — Currency swaps are entered into to gain or reduce exposure to foreign currencies (foreign currency exchange rate risk).

Currency swaps are interest rate swaps in which one party pays a stream of interest payments, either fixed or floating, in exchange for another party’s stream of interest payments, either fixed or floating, based on the notional amounts of two different currencies. The notional amounts are typically determined based on the spot exchange rates at the inception of the trade. Currency swaps may also involve an exchange of notional amounts at the start, during and/or at expiration of the contract, either at the current spot rate or another specified rate.

• Forward swaps — Certain Funds enter into forward interest rate swaps and forward total return swaps. In a forward swap, each Fund and the counterparty agree to make periodic net payments beginning on a specified date or a net payment at termination.

Swap transactions involve, to varying degrees, elements of interest rate, credit and market risk in excess of the amounts recognized in the Statements of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreements, and that there may be unfavorable changes in interest rates and/or market values associated with these transactions.

NOTES TO FINANCIAL STATEMENTS 139

Notes to Financial Statements  (continued)

Master Netting Arrangements: In order to define their contractual rights and to secure rights that will help them mitigate their counterparty risk, the Funds may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with their counterparties. An ISDA Master Agreement is a bilateral agreement between each Fund and a counterparty that governs certain OTC derivatives and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, each Fund may, under certain circumstances, offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default including the bankruptcy or insolvency of the counterparty. Bankruptcy or insolvency laws of a particular jurisdiction may restrict or prohibit the right of offset in bankruptcy, insolvency or other events.

Collateral Requirements: For derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the mark-to-market amount for each transaction under such agreement and comparing that amount to the value of any collateral currently pledged by the Fund and the counterparty.

Cash collateral that has been pledged to cover obligations of the Funds and cash collateral received from the counterparty, if any, is reported separately in the Statements of Assets and Liabilities as cash pledged as collateral and cash received as collateral, respectively. Non-cash collateral pledged by the Funds, if any, is noted in the Schedules of Investments. Generally, the amount of collateral due from or to a counterparty is subject to a certain minimum transfer amount threshold before a transfer is required, which is determined at the close of business of the Funds. Any additional required collateral is delivered to/pledged by the Funds on the next business day. Typically, the counterparty is not permitted to sell, re-pledge or use cash and non-cash collateral it receives. A Fund generally agrees not to use non-cash collateral that it receives but may, absent default or certain other circumstances defined in the underlying ISDA Master Agreement, be permitted to use cash collateral received. In such cases, interest may be paid pursuant to the collateral arrangement with the counterparty. To the extent amounts due to the Funds from their counterparties are not fully collateralized, they bear the risk of loss from counterparty non-performance. Likewise, to the extent the Funds have delivered collateral to a counterparty and stand ready to perform under the terms of their agreement with such counterparty, they bear the risk of loss from a counterparty in the amount of the value of the collateral in the event the counterparty fails to return such collateral. Based on the terms of agreements, collateral may not be required for all derivative contracts.

For financial reporting purposes, the Funds do not offset derivative assets and derivative liabilities that are subject to netting arrangements, if any, in the Statements of Assets and Liabilities.

6. INVESTMENT ADVISORY AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Advisory: Each Company, on behalf of its respective Funds, entered into an Investment Advisory Agreement with the Manager, the Funds’ investment adviser and an indirect, wholly-owned subsidiary of BlackRock, to provide investment advisory and administrative services. The Manager is responsible for the management of each Fund’s portfolio and provides the personnel, facilities, equipment and certain other services necessary to the operations of each Fund.

For such services, each Fund pays the Manager a monthly fee based on the percentage of the seven combined Funds’ average daily net assets at the following annual rates:

Average Daily Net Assets of the Seven Combined Funds	Investment Advisory Fee
First $250 Million		0.50	%
$250 Million — $300 Million		0.45
$300 Million — $400 Million		0.40
$400 Million — $800 Million		0.35
Greater than $800 Million		0.30

The portion of the assets of a Fund to which the rate of each breakpoint level applies will be determined on a “uniform percentage” basis. The uniform percentage applicable to a breakpoint level is determined by dividing the amount of the aggregate average daily net assets of the seven combined Funds that falls within that breakpoint level by the aggregate average daily net assets of the seven combined Funds. The amount of the fee for a Fund at each breakpoint level is determined by multiplying the average net assets of that Fund by the uniform percentage applicable to that breakpoint level and multiplying the product by the applicable advisory fee rate.

The Manager provides investment management and other services to the Subsidiary of Global Allocation. The Manager does not receive separate compensation from the Subsidiary for providing investment management or administrative services. However, Global Allocation pays the Manager based on the Fund’s net assets which includes the assets of the Subsidiary.

Distribution Fees: Each Company, on behalf of its respective Funds, entered into a Distribution Agreement and a Distribution Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of the Manager.

Transfer Agent: On behalf of the Funds, the Manager entered into agreements with insurance companies and other financial intermediaries (“Service Organizations”), some of which may be affiliates. Pursuant to these agreements, the Service Organizations provide the Funds with administrative, networking, recordkeeping, sub-transfer agency and shareholder services to sub-accounts they service. For these services, the Service Organizations receive an annual fee per shareholder account, which will vary depending on share class and/or net assets of Fund shareholders serviced by the Service Organizations. For the year ended December 31, 2018, the Funds did not pay any amounts to affiliates in return for these services.

Expense Limitations, Waivers and Reimbursements: With respect to each Fund, the Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Fund pays to the Manager indirectly through its investment in affiliated money market funds (the “affiliated money market fund waiver”). The amount of waivers and/or reimbursements of fees and expenses made pursuant to the expense limitation, described below, will be reduced by the amount of the affiliated money market fund waiver. However, the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid in connection with the

140 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements  (continued)

Government Money Market’s investments in other affiliated investment companies, if any. These amounts are included in fees waived and/or reimbursed by the Manager in the Statements of Operations. For the year ended December 31, 2018, the amounts waived were as follows:

Advantage Large Cap Core	Balanced Capital		Capital Appreciation		Global Allocation		High Yield		U.S. Government Bond
$            1,231		$      25,552		$          1,198		$      2,758		$      361		$                1,408

The Funds have begun to incur expenses in connection with the proposed realignment and consolidation of the boards of directors of certain BlackRock-advised funds, including the Funds. The Manager has voluntarily agreed to reimburse certain Funds for all or a portion of such expenses, which amounts are included in fees waived and/or reimbursed by the Manager in the Statements of Operations. For the year ended December 31, 2018, the amounts reimbursed to High Yield and U.S. Government Bond were $154,157 and $178,843, respectively.

The Manager has contractually agreed to waive its investment advisory fee with respect to any portion of each Fund’s assets (other than Government Money Market) invested in affiliated equity and fixed-income mutual funds and affiliated exchange-traded funds that have a contractual management fee through April 30, 2019, except High Yield and U.S. Government Bond which are through April 30, 2020. The contractual agreement may be terminated upon 90 days’ notice by a majority of the directors who are not “interested persons” of the Funds, as defined in the 1940 Act (“Independent Directors”), or by a vote of a majority of the outstanding voting securities of a Fund. These amounts are included in fees waived and/or reimbursed by the Manager in the Statements of Operations. For the year ended December 31, 2018, the amounts waived in investment advisory fees pursuant to these arrangements were as follows:

Balanced Capital	Global Allocation		High Yield
$            8,232		$                4,377		$          35

For the year ended December 31, 2018, the Funds reimbursed the Manager for certain accounting services, which are included in accounting services in the Statements of Operations. The reimbursements were as follows:

Advantage Large Cap Core		Balanced Capital	Capital Appreciation		Global Allocation	Government Money Market		High Yield	U.S. Government Bond
$	2,263	$      5,748	$	2,084	$      2,187	$	1,211	$         320	$	502

The Manager has contractually agreed to waive and/or reimburse transfer agent fees in order to limit such expenses as a percentage of average daily net assets as follows:

Advantage Large Cap Core		Balanced Capital	Capital Appreciation		Global Allocation	Government Money Market		High Yield	U.S. Government Bond
	0.04%	0.04%		0.04%	0.04%		0.02%	0.05%		0.05%

The Manager has agreed not to reduce or discontinue this contractual expense limitation prior to April 30, 2019, except High Yield and U.S. Government Bond which are through April 30, 2020. The contractual agreement may be terminated, with respect to each Fund, upon 90 days’ notice by a majority of the Independent Directors of the Funds or by a vote of a majority of the outstanding voting securities of a Fund.

These amounts waived and/or reimbursed are shown as transfer agent fees waived and/or reimbursed the Statements of Operations. For the year ended December 31, 2018, class specific expense waivers and/or reimbursement are as follows:

Advantage Large Cap Core	Balanced Capital	Capital Appreciation		Global Allocation	Government Money Market		High Yield	U.S. Government Bond
$      186,391	$      532,905	$	174,134	$      223,905	$	165,021	$      28,523	$	54,939

With respect to each Fund, the Manager contractually agreed to waive and/or reimburse fees or expenses in order to limit expenses, excluding interest expense, dividend expense, tax expense, acquired fund fees and expenses, and certain other fund expenses, which constitute extraordinary expenses not incurred in the ordinary course of each Fund’s business (“expense limitation”). The expense limitations as a percentage of average daily net assets are as follows:

Advantage Large Cap Core	0.50	%
Balanced Capital	0.50
Capital Appreciation	0.57
Global Allocation	0.57
Government Money Market	0.50
High Yield	0.50
U.S. Government Bond	0.50

NOTES TO FINANCIAL STATEMENTS 141

Notes to Financial Statements  (continued)

The Manager has agreed not to reduce or discontinue these contractual expense limitations through April 30, 2019 for each Fund, except High Yield and U.S. Government Bond which are through April 30, 2020. The contractual agreement may be terminated, with respect to each Fund, upon 90 days’ notice by a majority of the Independent Directors of the Funds or by a vote of a majority of the outstanding voting securities of a Fund. For the year ended December 31, 2018, the following amounts are included in fees waived and/or reimbursed by the Manager and transfer agent fees waived and/or reimbursed in the Statements of Operations:

	Advantage Large Cap Core		Balanced Capital		Global Allocation		Government Money Market		High Yield		U.S. Government Bond
Fees waived and/or reimbursed by the Manager	$	1,795	$	465	$	89,910	$	5,475	$	243,479	$	200,451

	Advantage Large Cap Core		Balanced Capital		Capital Appreciation		Global Allocation		Government Money Market		High Yield		U.S. Government Bond
Transfer agent fees waived and/or reimbursed	$	47,104	$	46,383	$	12,039	$	79,308	$	10,918	$	14,926	$	27,758

The Manager and BRIL voluntarily agreed to waive a portion of their respective management and distribution fees and/or reimburse operating expenses to enable Government Money Market to maintain minimum levels of daily net investment income. For the year ended December 31, 2018, there were no fees waived and/or reimbursed by the Manager. However, the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid in connection with the Fund’s investments in other affiliated investment companies, if any. The Manager and BRIL may discontinue the waiver or reimbursement at any time.

Securities Lending: The U.S. Securities and Exchange Commission (“SEC”) has issued an exemptive order which permits BIM, an affiliate of the Manager, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BIM bears all operational costs directly related to securities lending. The Funds are responsible for expenses in connection with the investment of cash collateral received for securities on loan (the “collateral investment expenses”). The cash collateral is invested in a private investment company managed by the Manager or its affiliates. However, BIM has agreed to cap the collateral investment expenses of the private investment company to an annual rate of 0.04%. The investment adviser to the private investment company will not charge any advisory fees with respect to shares purchased by the Funds. The private investment company in which the cash collateral has been invested may, under certain circumstances, impose a liquidity fee of up to 2% of the value withdrawn or temporarily restrict withdrawals for up to 10 business days during a 90 day period, in the event that the private investment company’s weekly liquid assets fall below certain thresholds.

Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment expenses. Each Fund retains a portion of securities lending income and remits a remaining portion to BIM as compensation for its services as securities lending agent.

Pursuant to a securities lending agreement, Government Money Market, High Yield and U.S. Government Bond retain 80% of securities lending income (which excludes collateral investment expenses), and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment expenses. In addition, commencing the business day following the date that the aggregate securities lending income earned across the Equity-Bond Complex in a calendar year exceeds a specified threshold, Government Money Market, High Yield and U.S. Government Bond, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 85% of securities lending income, and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment expenses.

Pursuant to a securities lending agreement, Advantage Large Cap Core, Balanced Capital and Capital Appreciation retain 71.5% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment expenses. In addition, commencing the business day following the date that the aggregate securities lending income earned across the Equity-Bond Complex in a calendar year exceeds a specified threshold, Advantage Large Cap Core, Balanced Capital and Capital Appreciation, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 75% of securities lending income, and this amount retained can never be less than 65% of the total of securities lending income plus the collateral investment expenses.

Pursuant to a securities lending agreement, Global Allocation retains 80% of securities lending income, and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment expenses. In addition, commencing the business day following the date that the aggregate securities lending income earned across the Equity-Bond Complex in a calendar year exceeds a specified threshold, Global Allocation, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 85% of securities lending income, and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment expenses.

The share of securities lending income earned by each Fund is shown as securities lending income — affiliated — net in the Statements of Operations. For the year ended December 31, 2018, each Fund paid BIM the following amounts for securities lending agent services:

Advantage Large Cap Core		Balanced Capital		Capital Appreciation		Global Allocation
$	2,209	$	3,898	$	7,712	$	4,382

Interfund Lending: In accordance with an exemptive order (the “Order”) from the SEC, each Fund may participate in a joint lending and borrowing facility for temporary purposes (the “Interfund Lending Program”), subject to compliance with the terms and conditions of the Order, and to the extent permitted by each Fund’s investment policies and restrictions. Each Fund is currently permitted to borrow and lend under the Interfund Lending Program.

A lending BlackRock fund may lend in aggregate up to 15% of its net assets, but may not lend more than 5% of its net assets to any one borrowing fund through the Interfund Lending Program. A borrowing BlackRock fund may not borrow through the Interfund Lending Program or from any other source more than 33 1/3% of its total assets (or any lower threshold provided for by the fund’s investment restrictions). If a borrowing BlackRock fund’s total outstanding borrowings exceed 10% of its total assets, each of its outstanding interfund loans will be subject to collateralization of at least 102% of the outstanding principal value of the loan. All interfund loans are for

142 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements  (continued)

temporary or emergency purposes and the interest rate to be charged will be the average of the highest current overnight repurchase agreement rate available to a lending fund and the bank loan rate, as calculated according to a formula established by the Board.

During the year ended December 31, 2018, the Funds did not participate in the Interfund Lending Program.

Directors and Officers: Certain directors and/or officers of the Companies are directors and/or officers of BlackRock or its affiliates. The Funds reimburse the Manager for a portion of the compensation paid to the Companies’ Chief Compliance Officer, which is included in Directors and Officer in the Statements of Operations.

Other Transactions: During the year ended December 31, 2018, High Yield received a reimbursement of $2,724 from an affiliate, which is included in payment by affiliate in the Statements of Operations, related to an operating event.

The Funds may purchase securities from, or sell securities to, an affiliated fund provided the affiliation is due solely to having a common investment adviser, common officers, or common directors. For the year ended December 31, 2018, the purchase and sale transactions and any net realized gains (losses) with affiliated funds in compliance with Rule 17a-7 under the 1940 Act were as follows:

	Purchases		Sales		Net Realized Gain (Loss)
Balanced Capital	$	502,270	$	102,256	$	(3,823	)
Global Allocation	$	66,914	$	174,012	$	5,735
High Yield	$	44,839		—		—
U.S. Government Bond Portfolio	$	19,278		—		—

7. PURCHASES AND SALES

For the year ended December 31, 2018, purchases and sales of investments, including mortgage dollar rolls and excluding short-term securities, were as follows:

Purchases	Advantage Large Cap Core		Balanced Capital		Capital Appreciation		Global Allocation		High Yield		U.S. Government Bond Portfolio
Non-U.S Government Securities	$	277,626,133	$	1,280,729,849	$	81,814,312	$	90,353,774	$	19,593,433	$	405,710,858
U.S Government Securities		—		54,269,940		—		172,109,921		—		52,058,543
Total Purchases	$	277,626,133	$	1,334,999,789	$	81,814,312	$	262,463,695	$	19,593,433	$	457,769,401
Sales
Non-U.S Government Securities	$	293,061,458	$	1,270,402,999	$	96,445,863	$	111,988,343	$	23,528,951	$	405,361,015
U.S Government Securities		—		82,082,534		—		162,365,543		—		54,904,772
Total Sales	$	293,061,458	$	1,352,485,533	$	96,445,863	$	274,353,886	$	23,528,951	$	460,265,787

For the year ended December 31, 2018, purchases and sales related to mortgage dollar rolls were as follows:

Purchases and Sales — MDRs	Balanced Capital		U.S. Government Bond Portfolio
Purchases	$	331,474,343	$	185,124,317
Sales	$	331,633,158	$	185,146,405

8. INCOME TAX INFORMATION

It is each Fund’s policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies, and to distribute substantially all of its taxable income to its shareholders. Therefore, no U.S. federal income tax provision is required.

Each Fund files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on each Fund’s U.S. federal tax returns generally remains open for each of the four years ended December 31, 2018. The statutes of limitations on each Fund’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.

Management has analyzed tax laws and regulations and their application to the Funds as of December 31, 2018, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.

US GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. As of December 31, 2018 the following permanent differences, attributable to investment in wholly owned subsidiaries, were reclassified to the following accounts:

	Global Allocation
Paid-in capital	$	(380,540	)
Accumulated earnings		380,540

NOTES TO FINANCIAL STATEMENTS 143

Notes to Financial Statements  (continued)

The tax character of distributions paid was as follows:

		Advantage Large Cap Core		Balanced Capital		Capital Appreciation		Global Allocation		Government Money Market		High Yield		U.S. Government Bond
Ordinary income	12/31/2018	$	15,692,629	$	30,251,389	$	1,372,000	$	5,546,837	$	1,777,250	$	1,697,206	$	1,565,228
	12/31/2017		6,679,027		20,664,975		3,691,980		2,964,477		498,459		1,883,102		1,311,639
Long-term capital gains	12/31/2018		8,044,087		12,613,658		18,264,188		6,774,163		—		—		—
	12/31/2017		44,735,172		73,985,478		13,025,751		—		351		—		—
Tax return of capital	12/31/2018		—		—		—		—		—		8,797		—
	12/31/2017		—		—		—		—		—		—		—
Total	12/31/2018	$	23,736,716	$	42,865,047	$	19,636,188	$	12,321,000	$	1,777,250	$	1,706,003	$	1,565,228
	12/31/2017	$	51,414,199	$	94,650,453	$	16,717,731	$	2,964,477	$	498,810	$	1,883,102	$	1,311,639

As of December 31, 2018, the tax components of accumulated earnings (loss) were as follows:

	Advantage Large Cap Core			Balanced Capital			Capital Appreciation		Global Allocation			Government Money Market		High Yield			U.S. Government Bond
Undistributed ordinary income	$	53,976		$	—		$	39,776	$	106,682		$	882	$	—		$	40,449
Undistributed long-term capital gains		—			—			1,127,876		1,480,751			—		—			—
Capital loss carryforwards		—			—			—		—			—		(1,825,510	)		(3,146,705	)
Net unrealized gains (losses)(a)		(9,079,702	)		(20,469,280	)		35,194,881		(6,015,618	)		—		(2,041,706	)		(582,325	)
Qualified late-year losses(b)		(1,153,691	)		(1,570,916	)		—		—			—		(5,936	)		—
	$	(10,179,417	)	$	(22,040,196	)	$	36,362,533	$	(4,428,185	)	$	882	$	(3,873,152	)	$	(3,688,581	)

^(a)  The difference between book-basis and tax-basis net unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sales and straddles, amortization and accretion methods of premiums and discounts on fixed income securities, the realization for tax purposes of unrealized gains/losses on certain futures, options and foreign currency contracts, the timing and recognition of partnership income, the accounting for swap agreements, and the classification of investments.

^(b)  The Fund has elected to defer certain qualified late-year losses and recognize such losses in the next taxable year.

As of December 31, 2018, the Funds had capital loss carryforwards available to offset future realized capital gains with no expiration as follows:

	High Yield		U.S. Government Bond
No expiration date	$	1,825,510	$	3,146,705

As of December 31, 2018, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:

	Advantage Large Cap Core			Balanced Capital			Capital Appreciation			Global Allocation			High Yield			U.S. Government Bond
Tax cost	$	174,790,235		$	523,830,072		$	133,110,603		$	182,787,009		$	28,997,933		$	80,001,931
Gross unrealized appreciation	$	5,585,740		$	8,599,843		$	39,480,091		$	10,069,982		$	53,251		$	774,454
Gross unrealized depreciation		(14,690,810	)		(29,097,720	)		(4,328,410	)		(15,904,190	)		(1,969,210	)		(1,365,884	)
Net unrealized appreciation (depreciation)	$	(9,105,070	)	$	(20,497,877	)	$	35,151,681		$	(5,834,208	)	$	(1,915,959	)	$	(591,430	)

9. BANK BORROWINGS

The Companies, on behalf of the Funds (except for Government Money Market), along with certain other funds managed by the Manager and its affiliates (“Participating Funds”), is a party to a 364-day, $2.25 billion credit agreement with a group of lenders. Under this agreement, the Funds may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Funds, can borrow up to an aggregate commitment amount of $1.75 billion at any time outstanding, subject to asset coverage and other limitations as specified in the agreement. The credit agreement has the following terms: a fee of 0.10% per annum on unused commitment amounts and interest at a rate equal to the higher of (a) one-month LIBOR (but, in any event, not less than 0.00%) on the date the loan is made plus 0.80% per annum or (b) the Fed Funds rate (but, in any event, not less than 0.00%) in effect from time to time plus 0.80% per annum on amounts borrowed. The agreement expires in April 2019 unless extended or renewed. Prior to April 19, 2018, the aggregate commitment amount was $2.1 billion and the fee was 0.12% per annum. Participating Funds paid an upfront commitment fee of 0.02% on the total commitment amounts, in addition to administration, legal and arrangement fees, which are included in miscellaneous expenses in the Statements of Operations. These fees were allocated among such funds based upon portions of the aggregate commitment available to them and relative net assets of Participating Funds. During the year ended December 31, 2018, the Funds did not borrow under the credit agreement.

144 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements  (continued)

10. PRINCIPAL RISKS

Many municipalities insure repayment of their bonds, which may reduce the potential for loss due to credit risk. The market value of these bonds may fluctuate for other reasons, including market perception of the value of such insurance, and there is no guarantee that the insurer will meet its obligation.

Inventories of municipal bonds held by brokers and dealers may decrease, which would lessen their ability to make a market in these securities. Such a reduction in market making capacity could potentially decrease a Fund’s ability to buy or sell bonds. As a result, a Fund may sell a security at a lower price, sell other securities to raise cash, or give up an investment opportunity, any of which could have a negative impact on performance. If a Fund needed to sell large blocks of bonds, those sales could further reduce the bonds’ prices and impact performance.

In the normal course of business, certain Funds invest in securities or other instruments and may enter into certain transactions, and such activities subject each Fund to various risks, including among others, fluctuations in the market (market risk) or failure of an issuer to meet all of its obligations. The value of securities or other instruments may also be affected by various factors, including, without limitation: (i) the general economy; (ii) the overall market as well as local, regional or global political and/or social instability; (iii) regulation, taxation or international tax treaties between various countries; or (iv) currency, interest rate and price fluctuations. Each Fund’s prospectus provides details of the risks to which each Fund is subject.

Each Fund may be exposed to prepayment risk, which is the risk that borrowers may exercise their option to prepay principal earlier than scheduled during periods of declining interest rates, which would force each Fund to reinvest in lower yielding securities. Each Fund may also be exposed to reinvestment risk, which is the risk that income from each Fund’s portfolio will decline if each Fund invests the proceeds from matured, traded or called fixed-income securities at market interest rates that are below each Fund portfolio’s current earnings rate.

Certain obligations held by the Government Money Market have a credit enhancement or liquidity feature that may, under certain circumstances, provide for repayment of principal and interest on the obligation when due. These enhancements, which may include letters of credit, stand-by bond purchase agreements and/or third party insurance, are issued by financial institutions. The value of the obligations may be affected by changes in creditworthiness of the entities that provide the credit enhancements or liquidity features. The Government Money Market monitors its exposure by reviewing the creditworthiness of the issuers, as well as the financial institutions issuing the credit enhancements and by limiting the amount of holdings with credit enhancements from one financial institution.

The Funds may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00, which may be subject to redemption gates or liquidity fees under certain circumstances.

Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. A Fund may invest in illiquid investments and may experience difficulty in selling those investments in a timely manner at the price that they believe the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause each Fund’s NAV to experience significant increases or decreases over short periods of time. If there is a general decline in the securities and other markets, the NAV of a Fund may lose value, regardless of the individual results of the securities and other instruments in which a Fund invests.

The price a Fund could receive upon the sale of any particular portfolio investment may differ from a Fund’s valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair valuation technique or a price provided by an independent pricing service. Changes to significant unobservable inputs and assumptions (i.e., publicly traded company multiples, growth rate, time to exit) due to the lack of observable inputs may significantly impact the resulting fair value and therefore a Fund’s results of operations. As a result, the price received upon the sale of an investment may be less than the value ascribed by a Fund, and a Fund could realize a greater than expected loss or lesser than expected gain upon the sale of the investment. A Fund’s ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third party service providers.

Counterparty Credit Risk: The Funds may be exposed to counterparty credit risk, or the risk that an entity may fail to or be unable to perform on its commitments related to unsettled or open transactions. The Funds manage counterparty credit risk by entering into transactions only with counterparties that the Manager believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Funds’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Funds.

A derivative contract may suffer a mark-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.

A Fund’s risk of loss from counterparty credit risk on OTC derivatives is generally limited to the aggregate unrealized gain less the value of any collateral held by such Fund.

For OTC options purchased, each Fund bears the risk of loss in the amount of the premiums paid plus the positive change in market values net of any collateral held by the Funds should the counterparty fail to perform under the contracts. Options written by the Funds do not typically give rise to counterparty credit risk, as options written generally obligate the Funds, and not the counterparty, to perform. The Funds may be exposed to counterparty credit risk with respect to options written to the extent each Fund deposits collateral with its counterparty to a written option.

With exchange-traded options purchased and futures and centrally cleared swaps, there is less counterparty credit risk to the Funds since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures and centrally cleared swaps with

NOTES TO FINANCIAL STATEMENTS 145

Notes to Financial Statements  (continued)

respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Funds.

Concentration Risk: As of period end, Capital Appreciation invested a significant portion of its assets in securities in the Information Technology sector. Changes in economic conditions affecting such sector would have a greater impact on the Fund and could affect the value, income and/or liquidity of positions in such securities.

Certain Funds may invest in securities that are rated below investment grade quality (sometimes called “junk bonds”), which are predominantly speculative, have greater credit risk and generally are less liquid and have more volatile prices than higher quality securities.

Certain Funds invest a significant portion of their assets in fixed-income securities and/or use derivatives tied to the fixed-income markets. Changes in market interest rates or economic conditions may affect the value and/or liquidity of such investments. Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall and decrease as interest rates rise. The Funds may be subject to a greater risk of rising interest rates due to the current period of historically low rates. The Federal Reserve has begun to raise the Federal Funds rate, and each increase results in more pronounced interest rate risk in the current market environment.

Global Allocation invests a significant portion of its assets in securities of issuers located in Europe or with significant exposure to European issuers or countries. The European financial markets have recently experienced volatility and adverse trends due to concerns about economic downturns in, or rising government debt levels of, several European countries. These events may spread to other countries in Europe and may affect the value and liquidity of certain of the Fund’s investments.

The United Kingdom is scheduled to withdraw from the European Union in March 2019, which may introduce significant new uncertainties and instability in the financial markets across Europe.

Certain Funds invest a significant portion of their assets in securities backed by commercial or residential mortgage loans or in issuers that hold mortgage and other asset-backed securities. Investment percentages in these securities are presented in the Schedules of Investments. Changes in economic conditions, including delinquencies and/or defaults on assets underlying these securities, can affect the value, income and/or liquidity of such positions.

11. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares were as follows:

	Year Ended 12/31/2018						Year Ended 12/31/2017
	Shares			Amount			Shares			Amount
Advantage Large Cap Core
Shares sold		99,043		$	2,482,951			67,459		$	1,993,192
Shares issued in reinvestment of distributions		1,179,759			23,736,716			2,075,146			51,414,199
Shares redeemed		(825,637	)		(20,781,276	)		(615,362	)		(18,165,556	)
Net increase		453,165		$	5,438,391			1,527,243		$	35,241,835
Balanced Capital
Shares sold		334,548		$	5,391,449			127,486		$	2,301,988
Shares issued in reinvestment of distributions		3,015,997			42,865,047			5,916,860			94,650,453
Shares redeemed		(3,241,325	)		(52,133,796	)		(2,783,339	)		(49,923,900	)
Net increase (decrease)		109,220		$	(3,877,300	)		3,261,007		$	47,028,541
Capital Appreciation
Shares sold		146,630		$	6,537,756			73,811		$	2,839,338
Shares issued in reinvestment of distributions		528,706			19,636,188			411,735			16,717,731
Shares redeemed		(440,896	)		(19,790,990	)		(410,434	)		(16,084,047	)
Net increase		234,440		$	6,382,954			75,112		$	3,473,022
Global Allocation
Shares sold		254,002		$	4,146,671			217,883		$	3,442,483
Shares issued in reinvestment of distributions		839,563			12,321,000			182,085			2,964,477
Shares redeemed		(1,729,560	)		(27,841,331	)		(1,660,211	)		(26,105,207	)
Net decrease		(635,995	)	$	(11,373,660	)		(1,260,243	)	$	(19,698,247	)
Government Money Market
Shares sold		99,118,478		$	99,118,478			58,382,126		$	58,382,126
Shares issued in reinvestment of distributions		1,777,250			1,777,250			500,974			500,974
Shares redeemed		(76,835,254	)		(76,835,254	)		(73,641,153	)		(73,641,153	)
Net increase (decrease)		24,060,474		$	24,060,474			(14,758,053	)	$	(14,758,053	)

146 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Notes to Financial Statements  (continued)

	Year Ended 12/31/2018						Year Ended 12/31/2017
	Shares			Amount			Shares			Amount
High Yield
Shares sold		534,177		$	2,855,921			320,121		$	1,725,112
Shares issued in reinvestment of distributions		322,100			1,715,158			352,197			1,906,199
Shares redeemed		(1,340,521	)		(7,115,994	)		(1,134,478	)		(6,123,134	)
Net decrease		(484,244	)	$	(2,544,915	)		(462,160	)	$	(2,491,823	)
U.S. Government Bond
Shares sold		764,341		$	8,076,002			150,584		$	1,637,179
Shares issued in reinvestment of distributions		145,821			1,539,514			121,674			1,323,617
Shares redeemed		(866,836	)		(9,143,433	)		(792,757	)		(8,624,728	)
Net increase (decrease)		43,326		$	472,083			(520,499	)	$	(5,663,932	)

12. REGULATION S-X AMENDMENTS

On August 17, 2018, the SEC adopted amendments to certain disclosure requirements in Securities Act Release No. 33-10532, Disclosure Update and Simplification. The Funds have adopted the amendments pertinent to Regulation S-X in this shareholder report. The amendments impacted certain disclosure presentation on the Statements of Assets and Liabilities, Statements of Changes in Net Assets and Notes to the Financial Statements.

Prior year distribution information and undistributed (distributions in excess of) net investment income in the Statements of Changes in Net Assets has been modified to conform to the current year presentation in accordance with the Regulation S-X changes.

Distributions for the year ended December 31, 2017 were classified as follows:

Fund Name	Class		Net Investment Income			Net Realized Gain
Advantage Large Cap Core		I	$	(2,382,955	)	$	(49,031,244	)
Balanced Capital		I		(9,065,930	)		(85,584,523	)
Capital Appreciation		I		(450,001	)		(16,267,730	)
Global Allocation		I		(2,964,477	)		—
Government Money Market		I		(498,444	)		(366	)
High Yield		I		(1,883,102	)		—
U.S. Government Bond		I		(1,311,639	)		—

Undistributed (distributions in excess of) net investment income as of December 31, 2017 is as follows:

Fund Name	Undistributed (Distributions in Excess of) Net Investment Income
Advantage Large Cap Core	$	32,209
Balanced Capital		305,034
Capital Appreciation		32,372
Global Allocation		(556,143	)
Government Money Market		—
High Yield		(126,702	)
U.S. Government Bond		126,329

13. SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were issued and has determined that there were no subsequent events requiring adjustment or additional disclosure in the financial statements.

NOTES TO FINANCIAL STATEMENTS 147

Report of Independent Registered Public Accounting Firm

To the Shareholders of the BlackRock Advantage Large Cap Core Portfolio, BlackRock Balanced Capital Portfolio, BlackRock Capital Appreciation Portfolio, BlackRock Global Allocation Portfolio, BlackRock Government Money Market Portfolio, BlackRock High Yield Portfolio, and BlackRock U.S. Government Bond Portfolio, and the Board of Directors of BlackRock Series Fund, Inc. and BlackRock Series Fund II, Inc.

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying consolidated statement of assets and liabilities of BlackRock Global Allocation Portfolio of BlackRock Series Fund, Inc. and subsidiary, including the consolidated schedule of investments, as of December 31, 2018, the related consolidated statement of operations for the year then ended, the consolidated statements of changes in net assets for each of the two years in the period then ended, the consolidated financial highlights for each of the five years in the period then ended, and the related notes. We have also audited the accompanying statements of assets and liabilities of BlackRock Advantage Large Cap Core Portfolio, BlackRock Balanced Capital Portfolio, BlackRock Capital Appreciation Portfolio, and BlackRock Government Money Market Portfolio of BlackRock Series Fund, Inc., and of BlackRock High Yield Portfolio and BlackRock U.S. Government Bond Portfolio of BlackRock Series Fund II, Inc., (collectively with BlackRock Global Allocation Portfolio, the “Funds”), including the schedules of investments, as of December 31, 2018, the related statements of operations (and the statement of cash flows for the Blackrock U.S. Government Bond Portfolio) for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Funds as of December 31, 2018, and the results of their operations (and BlackRock U.S. Government Bond Portfolio’s cash flows) for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2018, by correspondence with the custodian, agent banks, and brokers; when replies were not received from agent banks and brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

Deloitte & Touche LLP

Boston, Massachusetts

February 15, 2019

We have served as the auditor of one or more BlackRock investment companies since 1992.

148 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Disclosure of Investment Advisory Agreement

The Board of Directors (the “Board,” the members of which are referred to as “Board Members”) of BlackRock Series Fund II, Inc. (the “Corporation”) met in person on May 8, 2018 (the “Organizational Meeting”) to consider the initial approval of the investment advisory agreement (the “Advisory Agreement” or the “Agreement”) between the Corporation, on behalf of BlackRock High Yield Portfolio (the “High Yield Portfolio”) and BlackRock U.S. Government Bond Portfolio (the “U.S. Government Bond Portfolio”) (each, a “Fund,” and collectively, the “Funds”), each a series of the Corporation, and BlackRock Advisors, LLC (the “Manager” or “BlackRock”), each Fund’s investment advisor.    

On September 17, 2018, each Fund acquired the assets, subject to the liabilities of the BlackRock High Yield Portfolio (the “Predecessor High Yield Portfolio”) and BlackRock U.S. Government Bond Portfolio (the “Predecessor U.S. Government Bond Portfolio”) (each, a “Predecessor Fund,” and collectively, the “Predecessor Funds”), each a series of BlackRock Series Fund, Inc. (the “Predecessor Corporation”), through a reorganization (the “Reorganization”). Each Fund has the same investment objectives, strategies and policies, portfolio management team and contractual arrangements, including the same contractual fees and expenses, as its respective Predecessor Fund. As a result of the Reorganization, each Fund adopted the performance and financial history of its respective Predecessor Fund. The Agreement is substantially similar to the advisory agreement (the “Predecessor Advisory Agreement” or the “Predecessor Agreement”) between the Predecessor Corporation, on behalf of each Predecessor Fund, and the Manager.

Activities and Composition of the Board

On the date of the Organizational Meeting, the Board consisted of eleven individuals, nine of whom were not “interested persons” of the Corporation as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Board Members”). The Board Members are responsible for the oversight of the operations of each Fund and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Board Members have retained independent legal counsel to assist them in connection with their duties. The Chair of the Board is an Independent Board Member. The Board has established five standing committees: an Audit Committee, a Governance and Nominating Committee, a Compliance Committee, a Performance Oversight Committee and an Executive Committee, each of which is chaired by an Independent Board Member and composed of Independent Board Members (except for the Performance Oversight Committee and the Executive Committee, each of which also has one interested Board Member).

The Agreement

Pursuant to the 1940 Act, the Board is required to consider the initial approval of the Agreement. In connection with this deliberative process, the Board assessed, among other things, the nature, extent and quality of the services to be provided to each Fund (and those provided to each Predecessor Fund) by BlackRock, BlackRock’s personnel and affiliates, including (as applicable): investment management; accounting, administrative and shareholder services; oversight of each Fund’s (and each Predecessor Fund’s) service providers; marketing and promotional services; risk management and oversight; legal and compliance services; and ability to meet applicable legal and regulatory requirements.

Board Considerations in Approving the Agreement

The Approval Process: At the Organizational Meeting, the Board reviewed materials relating to its consideration of the proposed Agreement. The Predecessor Agreement was most recently considered and approved by the board of directors of the Predecessor Corporation (the “Predecessor Board”) at in person meetings held on April 10, 2018 (the “April Meeting”) and May 8, 2018 (the “May Meeting”). The factors considered by the Board Members at the Organizational Meeting in connection with approval of the proposed Agreement were identical to the factors considered by them as members of the Predecessor Board at the April and May Meetings for the Predecessor Agreement. (Accordingly, references below to the “Board” mean both the Board and the Predecessor Board, and references below to the Board Members mean the members of both the Board and the Predecessor Board, unless the context requires otherwise.) These factors included, among other things: (a) the nature, extent and quality of the services to be provided by BlackRock (and those provided by BlackRock to each Predecessor Fund); (b) the investment performance of each Predecessor Fund as compared with a peer group of funds (“Performance Peers”) and other metrics, as applicable; (c) the advisory fee and the estimated cost of the services and estimated profits realized by BlackRock and its affiliates from their relationship with each Fund and each Predecessor Fund; (d) the sharing of potential economies of scale; (e) fall-out benefits to BlackRock and its affiliates as a result of BlackRock’s relationship with each Fund and each Predecessor Fund; and (f) other factors deemed relevant by the Board Members.

In determining whether to approve the Predecessor Agreement, the Board met with the relevant investment advisory personnel from BlackRock and considered all information it deemed reasonably necessary to evaluate the terms of the Predecessor Agreement. These meetings were considered by the Board in evaluating approval of the Agreement. The Board received materials in advance of the Organizational Meeting relating to its consideration of the Agreement, including, among other things, (a) fees and estimated expense ratios of each Fund and the fees and expense ratios of each Predecessor Fund in comparison to the fees and expense ratios of a peer group of funds as determined by Broadridge Financial Solutions, Inc. (“Broadridge”) (“Expense Peers”); (b) information regarding BlackRock’s economic outlook for each Predecessor Fund and its general investment outlook for the markets; (c) information regarding fees paid to service providers that are affiliates of BlackRock; and (d) information outlining the legal duties of the Board under the 1940 Act with respect to the consideration and approval of the Agreement. The Board also received information at prior Board meetings concerning compliance records and regulatory matters relating to BlackRock.

The Board also considered other matters it deemed important to the approval process, such as other payments to be made to BlackRock or its affiliates, securities lending and cash management, services related to the valuation and pricing of Fund portfolio holdings, and advice from independent legal counsel with respect to the review process and materials submitted for the Board’s review. The Board noted the willingness of BlackRock personnel to engage in open, candid discussions with the Board. The Board did not identify any particular information as determinative, and each Board Member may have attributed different weights to the various items considered.

A. Nature, Extent and Quality of the Services to be Provided by BlackRock: The Board, including the Independent Board Members, considered the nature, extent and quality of services to be provided by BlackRock, including the investment advisory services to be provided to each Fund and those provided to each Predecessor Fund and the resulting performance of each Predecessor Fund. Throughout the year, the Board Members compared Predecessor Fund performance to the performance of a

DISCLOSURE OF INVESTMENT ADVISORY AGREEMENT 149

Disclosure of Investment Advisory Agreement  (continued)

comparable group of mutual funds, a relevant benchmark, and performance metrics, as applicable. The Board met with

BlackRock’s senior management personnel responsible for investment activities, including the senior investment officers, in connection with its evaluation of each Predecessor Fund. The Board also reviewed the materials provided by each Fund’s portfolio management team discussing each Predecessor Fund’s performance and each Fund’s investment objective(s), strategies and outlook.

The Board considered, among other factors, with respect to BlackRock: the number, education and experience of investment personnel generally and each Fund’s portfolio management team; BlackRock’s research capabilities; investments by portfolio managers in the funds they manage; portfolio trading capabilities; use of technology; commitment to compliance; credit analysis capabilities; risk analysis and oversight capabilities; and the approach to training and retaining portfolio managers and other research, advisory and management personnel. The Board also considered BlackRock’s overall risk management program, including the continued efforts of BlackRock and its affiliates to address cybersecurity risks and the role of BlackRock’s Risk & Quantitative Analysis Group. The Board considered BlackRock’s compensation structure with respect to each Fund’s portfolio management team and BlackRock’s ability to attract and retain high-quality talent and create performance incentives that had been presented in connection with the Board’s evaluation of the Predecessor Agreement.

In addition to investment advisory services, the Board considered the quality of the administrative and other non-investment advisory services to be provided to each Fund (and those provided to each Predecessor Fund). The Board considered that BlackRock and its affiliates will provide each Fund (and provided each Predecessor Fund) with certain administrative, shareholder and other services (in addition to any such services provided to each Fund by third parties) and officers and other personnel as are necessary for the operations of each Fund. In particular, the Board noted that BlackRock and its affiliates will provide each Fund (and provided each Predecessor Fund) with administrative services including, among others: (i) responsibility for disclosure documents, such as the prospectus, the summary prospectus (as applicable), the statement of additional information and periodic shareholder reports; (ii) oversight of daily accounting and pricing; (iii) responsibility for periodic filings with regulators; (iv) overseeing and coordinating the activities of other service providers including, among others, each Fund’s custodian, fund accountant, transfer agent, and auditor; (v) organizing Board meetings and preparing the materials for such Board meetings; (vi) providing legal and compliance support; (vii) furnishing analytical and other support to assist the Board in its consideration of strategic issues such as the merger, consolidation or repurposing of certain open-end funds; and (viii) performing administrative functions necessary for the operation of each Fund, such as tax reporting, expense management, fulfilling regulatory filing requirements, overseeing each Fund’s distribution partners, and shareholder call center and other services. The Board considered the structure and duties of BlackRock’s fund administration, shareholder services, and legal & compliance departments and considered BlackRock’s policies and procedures for assuring compliance with applicable laws and regulations.

B. The Investment Performance of each Predecessor Fund and BlackRock: The Board, including the Independent Board Members, also reviewed and considered the performance history of each Predecessor Fund. In connection with its review of each Predecessor Fund’s performance history, the Board had been provided with reports independently prepared by Broadridge, which included a comprehensive analysis of each Predecessor Fund’s performance as of December 31, 2017. Broadridge ranks funds in quartiles, ranging from first to fourth, where first is the most desirable quartile position and fourth is the least desirable. In connection with this review, the Board had received and reviewed information regarding the investment performance of each Predecessor Fund as compared to its Performance Peers.

In evaluating performance, the Board recognized that the performance data reflects a snapshot of a period as of a particular date and that selecting a different performance period could produce significantly different results. Further, the Board recognized that it is possible that long-term performance can be impacted by even one period of significant outperformance or underperformance, so that a single investment theme has the ability to affect long-term performance disproportionately.

The Board noted that for the one-, three- and five-year periods reported, the Predecessor High Yield Portfolio ranked in the first, second, and first quartiles, respectively, against its Performance Peers.

The Board noted that for the one-, three- and five-year periods reported, the Predecessor U.S. Government Bond Portfolio ranked in the third, second and second quartiles, respectively, against its Performance Peers. The Board and BlackRock reviewed the Predecessor U.S. Government Bond Portfolio’s underperformance during the applicable period.

C. Consideration of the Advisory/Management Fees and the Estimated Cost of the Services to be Provided and Estimated Profits Realized by BlackRock and its Affiliates from their Relationship with each Fund and each Predecessor Fund: In connection with the initial approval of the Agreement, the Board, including the Independent Board Members, considered that each Fund’s proposed contractual management fee rate was identical to each Predecessor Fund’s contractual management fee rate. The contractual management fee rate represents a combination of the advisory fee and any administrative fees, before taking into account any reimbursements or fee waivers. The Board also considered that each Fund’s estimated total net expense ratio was identical to each Predecessor Fund’s total expense ratio. The Board also considered the comparison of each Predecessor Fund’s actual and contractual management fee rate to those of its Expense Peers. The total expense ratio represents a fund’s total net operating expenses, including any 12b-1 or non 12b-1 service fees. The total expense ratio gives effect to any expense reimbursements or fee waivers that benefit a fund, and the actual management fee rate gives effect to any management fee reimbursements or waivers that benefit a fund. The Board considered the services provided and the fees charged by BlackRock and its affiliates to other types of clients with similar investment mandates, as applicable, including institutional accounts and sub-advised mutual funds (including mutual funds sponsored by third parties) that had been presented in connection with its evaluation of the Predecessor Agreement.

The Board considered BlackRock’s profitability methodology, including an estimated profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to each Predecessor Fund, which would be the same services to be provided to each Fund. The Board reviewed BlackRock’s estimated profitability with respect to each Predecessor Fund and other funds the Board currently oversees for the year ended December 31, 2017 compared to available aggregate estimated profitability data provided for the prior two years. The Board considered its review of, in connection with its review of the Predecessor Agreement, BlackRock’s estimated profitability with respect to certain other U.S. fund complexes managed by the Manager and/or its affiliates, including BlackRock’s assumptions and methodology of allocating expenses in the estimated profitability analysis and the inherent limitations in allocating costs among various advisory products. The Board recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, precision of expense allocations and business mix. As a result, calculating and comparing profitability at individual fund levels is difficult.

150 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Disclosure of Investment Advisory Agreement  (continued)

The Board noted that, in general, individual fund or product line profitability of other advisors is not publicly available. In connection with its review of the Predecessor Agreement, the Board reviewed BlackRock’s operating margin, in general, compared to that of certain other publicly-traded asset management firms and considered the differences between BlackRock and these other firms, including the contribution of technology at BlackRock, BlackRock’s expense management, and the relative product mix.

In addition, the Board considered the estimated cost of the services to be provided to each Fund based on its review of the estimated cost of the services provided to each Predecessor Fund by BlackRock, and BlackRock’s and its affiliates’ estimated profits relating to the management and distribution of each Predecessor Fund and the other funds advised by BlackRock and its affiliates. As part of this analysis, the Board had reviewed BlackRock’s methodology in allocating its costs of managing the Predecessor Funds to each Predecessor Fund. The Board considered whether BlackRock has the financial resources necessary to attract and retain high quality investment management personnel to perform its obligations under the Agreement and to continue to provide the high quality of services that is expected by the Board Members. The Board further considered factors including but not limited to BlackRock’s commitment of time, assumption of risk, and liability profile in servicing each Fund and each Predecessor Fund in contrast to what is required of BlackRock with respect to other products with similar investment mandates across the open-end fund, exchange-traded fund, closed-end fund, sub-advised mutual fund, separately managed account, collective investment trust, and institutional separate account product channels, as applicable.

The Board noted that the Predecessor High Yield Portfolio’s contractual management fee rate ranked in the first quartile, and that the actual management fee rate and total expense ratio each ranked in the first quartile, relative to the Predecessor High Yield Portfolio’s Expense Peers. The Board also noted that the High Yield Portfolio has an advisory fee arrangement that includes breakpoints that adjust the fee rate downward as the aggregate assets of the High Yield Portfolio, combined with the assets of the U.S. Government Bond Portfolio and the series of the Predecessor Corporation, increase above certain contractually specified levels. The Board further noted that BlackRock and the Board have contractually agreed to a cap on the High Yield Portfolio’s total expenses as a percentage of the High Yield Portfolio’s average daily net assets. Additionally, the Board noted that BlackRock and the Board have contractually agreed to a cap on certain operational and recordkeeping fees for the High Yield Portfolio.

The Board noted that the Predecessor U.S. Government Bond Portfolio’s contractual management fee rate ranked in the first quartile, and that the actual management fee rate and total expense ratio each ranked in the first quartile, relative to the Predecessor U.S. Government Bond Portfolio’s Expense Peers. The Board also noted that the U.S. Government Bond Portfolio has an advisory fee arrangement that includes breakpoints that adjust the fee rate downward as the aggregate assets of the U.S. Government Bond Portfolio, combined with the assets of the High Yield Portfolio and the series of the Predecessor Corporation, increase above certain contractually specified levels. The Board further noted that BlackRock and the Board have contractually agreed to a cap on the U.S. Government Bond Portfolio’s total expenses as a percentage of the U.S. Government Bond Portfolio’s average daily net assets. Additionally, the Board noted that BlackRock and the Board have contractually agreed to a cap on certain operational and recordkeeping fees for the U.S. Government Bond Portfolio.

D. Economies of Scale: The Board, including the Independent Board Members, considered the extent to which economies of scale might be realized as the assets of each Fund increase, including the existence of fee waivers and/or expense caps, as applicable, noting that any contractual fee waivers and expense caps had been approved by the Board. The Board also considered the extent to which each Predecessor Fund benefited from such economies in a variety of ways, and whether there should be changes in the advisory fee rate or breakpoint structure in order to enable each Fund to more fully participate in these economies of scale. The Board considered each Predecessor Fund’s asset levels and, in light of those asset levels, whether the current fee schedule was appropriate for each Fund. In its consideration, the Board Members took into account the existence of any expense caps and further considered the continuation and/or implementation, as applicable, of such caps.

E. Other Factors Deemed Relevant by the Board Members: The Board, including the Independent Board Members, also took into account other potential ancillary or “fall-out” benefits that BlackRock or its affiliates may derive from BlackRock’s respective relationships with each Fund based on its review of the Predecessor Agreement, including both tangible and intangible benefits, such as BlackRock’s ability to leverage its investment professionals who manage other portfolios and risk management personnel, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates as service providers to each Fund (and each Predecessor Fund), including for administrative, distribution, securities lending and cash management services. The Board also considered BlackRock’s overall operations and its efforts to expand the scale of, and improve the quality of, its operations. The Board also considered that, subject to applicable law, BlackRock may use and benefit from third party research obtained by soft dollars generated by certain registered fund transactions to assist in managing all or a number of its other client accounts.

In connection with its consideration of the Agreement, the Board also considered information regarding BlackRock’s brokerage and soft dollar practices and reports from BlackRock which included information on brokerage commissions and trade execution practices that it had received in consideration of the Predecessor Agreement.

The Board considered the competitive nature of the open-end fund marketplace, and that shareholders are able to redeem their Fund shares if they believe that each Fund’s fees and expenses are too high or if they are dissatisfied with the performance of each Fund.

Conclusion

Following discussion, the Board, including the Independent Board Members, approved the Advisory Agreement between the Manager and the Corporation, on behalf of each Fund, for a two-year term beginning on the effective date of the Advisory Agreement. Based upon its evaluation of all of the aforementioned factors in their totality, as well as other information, the Board, including the Independent Board Members, was satisfied that the terms of the Agreement were fair and reasonable and in the best interest of each Fund and its shareholders. In arriving at its decision to approve the Agreement, the Board did not identify any single factor or group of factors as all-important or controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were also assisted by the advice of independent legal counsel in making this determination.

DISCLOSURE OF INVESTMENT ADVISORY AGREEMENT 151

Director and Officer Information

Independent Directors (a)
Name Year of Birth (b)	Position(s) Held (Length of Service) (c)	Principal Occupation(s) During Past Five Years	Number of BlackRock-Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Company and Other Investment Company Directorships Held During Past Five Years
Robert M. Hernandez 1944	Chair of the Board and Director (Since 2007)	Director, Vice Chairman and Chief Financial Officer of USX Corporation (energy and steel business) from 1991 to 2001; Director and non-executive Chairman, RTI International Metals, Inc. from 1990 to 2015; Director, TE Connectivity (electronics) from 2006 to 2012.	32 RICs consisting of 95 Portfolios	Chubb Limited (insurance company); Eastman Chemical Company
James H. Bodurtha 1944	Director (Since 2007)	Director, The China Business Group, Inc. (consulting and investing firm) from 1996 to 2013 and Executive Vice President thereof from 1996 to 2003; Chairman of the Board, Berkshire Holding Corporation since 1980; Director, ICI Mutual since 2010.	32 RICs consisting of 95 Portfolios	None
Bruce R. Bond 1946	Director (Since 2007)	Board Member, Amsphere Limited (software) since 2018; Trustee and Member of the Governance Committee, State Street Research Mutual Funds from 1997 to 2005; Board Member of Governance, Audit and Finance Committee, Avaya Inc. (computer equipment) from 2003 to 2007.	32 RICs consisting of 95 Portfolios	None
Honorable Stuart E. Eizenstat 1943	Director (Since 2007)	Senior Counsel of Covington and Burling LLP (law firm) since 2016; Head of International Practice thereof since 2001, and Partner thereof from 2001 to 2016; Advisory Board Member, OCP S.A. (phosphates) since 2010; International Advisory Board Member, The Coca-Cola Company from 2002 to 2011; Advisory Board Member, Veracity Worldwide, LLC (risk management) from 2007 to 2012; Member of the International Advisory Board, GML Ltd. (energy) since 2003; Board of Directors, Ferroglobe (silicon metals) since 2016.	32 RICs consisting of 95 Portfolios	Alcatel-Lucent (telecommunications); Global Specialty Metallurgical; UPS Corporation (delivery service)
Henry Gabbay 1947	Director (Since 2007)	Board Member, Equity-Liquidity and Closed-End Fund Boards from 2007 through 2014; Consultant, BlackRock, Inc. from 2007 to 2008; Managing Director, BlackRock, Inc. from 1989 to 2007; Chief Administrative Officer, BlackRock Advisors, LLC from 1998 to 2007; President of BlackRock Funds and BlackRock Allocation Target Shares (formerly, BlackRock Bond Allocation Target Shares) from 2005 to 2007 and Treasurer of certain closed-end funds in the BlackRock fund complex from 1989 to 2006.	32 RICs consisting of 95 Portfolios	None
Lena G. Goldberg 1949	Director (Since 2016)	Senior Lecturer, Harvard Business School since 2008; Director, Charles Stark Draper Laboratory, Inc. since 2013; FMR LLC/Fidelity Investments (financial services) from 1996 to 2008, serving in various senior roles including Executive Vice President — Strategic Corporate Initiatives and Executive Vice President and General Counsel; Partner, Sullivan & Worcester LLP from 1985 to 1996 and Associate thereof from 1979 to 1985.	32 RICs consisting of 95 Portfolios	None
Henry R. Keizer 1956	Director (Since 2016)	Director, Park Indemnity Ltd. (captive insurer) since 2010; Director, MUFG Americas Holdings Corporation and MUFG Union Bank, N.A. (financial and bank holding company) from 2014 to 2016; Director, American Institute of Certified Public Accountants from 2009 to 2011; Director, KPMG LLP (audit, tax and advisory services) from 2004 to 2005 and 2010 to 2012; Director, KPMG International in 2012, Deputy Chairman and Chief Operating Officer thereof from 2010 to 2012 and U.S. Vice Chairman of Audit thereof from 2005 to 2010; Global Head of Audit, KPMGI (consortium of KPMG firms) from 2006 to 2010; Director, YMCA of Greater New York from 2006 to 2010.	32 RICs consisting of 95 Portfolios	Hertz Global Holdings (car rental); Montpelier Re Holdings, Ltd. (publicly held property and casual reinsurance) from 2013 until 2015; Sealed Air Corp. (packaging); WABCO (commercial vehicle safety systems)

152 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Director and Officer Information  (continued)

Independent Directors (a)
Name Year of Birth (b)	Position(s) Held (Length of Service) (c)	Principal Occupation(s) During Past Five Years	Number of BlackRock-Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Company and Other Investment Company Directorships Held During Past Five Years
John F O’Brien 1943	Director (Since 2007)	Trustee, Woods Hole Oceanographic Institute since 2003 and Chairman thereof from 2009 to 2015; Co-Founder and Managing Director, Board Leaders LLC (director education) since 2005.	32 RICs consisting of 95 Portfolios	Cabot Corporation (chemicals); LKQ Corporation (auto parts manufacturing); TJX Companies, Inc. (retailer)
Donald C. Opatrny 1952	Director (Since 2015)	Trustee, Vice Chair, Member of the Executive Committee and Chair of the Investment Committee, Cornell University since 2004; President, Trustee and Member of the Investment Committee, The Aldrich Contemporary Art Museum from 2007 to 2014; Member of the Board and Investment Committee, University School from 2007 to 2018; Member of the Investment Committee, Mellon Foundation from 2009 to 2015; Trustee, Artstor (a Mellon Foundation affiliate) from 2010 to 2015; President and Trustee, the Center for the Arts, Jackson Hole from 2011 to 2018; Director, Athena Capital Advisors LLC (investment management firm) since 2013; Trustee and Chair of the Investment Committee, Community Foundation of Jackson Hole since 2014; Member of Affordable Housing Supply Board of Jackson, Wyoming since 2017; Member, Investment Funds Committee, State of Wyoming since 2017; Trustee, Phoenix Art Museum since 2018.	32 RICs consisting of 95 Portfolios	None

Interested Directors (a)(d)
Name Year of Birth (b)	Position(s) Held (Length of Service) (c)	Principal Occupation(s) During Past Five Years	Number of BlackRock-Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Company and Other Investment Company Directorships Held During Past Five Years
Robert Fairbairn 1965	Director (Since 2015)	Senior Managing Director of BlackRock, Inc. since 2010; oversees BlackRock’s Strategic Partner Program and Strategic Product Management Group; Member of BlackRock’s Global Executive and Global Operating Committees; Co-Chair of BlackRock’s Human Capital Committee; Member of the Board of Managers of BlackRock Investments, LLC since 2011; Global Head of BlackRock’s Retail and iShares® businesses from 2012 to 2016.	127 RICs consisting of 304 Portfolios	None
John M. Perlowski 1964	Director (Since 2015) and President and Chief Executive Officer (Since 2010)	Managing Director of BlackRock, Inc. since 2009; Head of BlackRock Global Accounting and Product Services since 2009; Advisory Director of Family Resource Network (charitable foundation) since 2009.	127 RICs consisting of 304 Portfolios	None

^(a) The address of each Director is c/o BlackRock, Inc., 55 East 52nd Street, New York, NY 10055.

^(b) Each Independent Director holds office until his or her successor is duly elected and qualifies or until his or her earlier death, resignation, retirement or removal as provided by the Fund’s by-laws or charter or statute, or until December 31 of the year in which he or she turns 75. The Board may determine to extend the terms of Independent Directors on a case-by-case basis, as appropriate. Interested Directors serve until their successor is duly elected and qualifies or until their earlier death, resignation, retirement or removal as provided by the Fund’s by-laws or statute, or until December 31 of the year in which they turn 72.

^(c) Following the combination of Merrill Lynch Investment Managers, L.P. (“MLIM”) and BlackRock, Inc. in September 2006, the various legacy MLIM and legacy BlackRock fund boards were realigned and consolidated into three new fund boards in 2007. As a result, although the chart shows certain Independent Directors as joining the Fund’s board in 2007, those Directors first became members of the boards of other legacy MLIM or legacy BlackRock funds as follows: James H. Bodurtha, 1995; Bruce R. Bond, 2005; Honorable Stuart E. Eizenstat, 2001; Robert M. Hernandez, 1996; and John F. O’Brien, 2005. For High Yield and U.S. Government Bond, Length of Service includes service as director of the Target Funds.

^(d) Mr. Fairbairn and Mr. Perlowski are both “interested persons,” as defined in the 1940 Act, of the Fund based on their positions with BlackRock, Inc. and its affiliates. Mr. Fairbairn and Mr. Perlowski are also board members of the BlackRock Closed-End Complex and the BlackRock Equity-Liquidity Complex.

DIRECTOR AND OFFICER INFORMATION 153

Director and Officer Information  (continued)

Officers Who Are Not Directors (a)
Name Year of Birth (b)	Position(s) Held (Length of Service)	Principal Occupation(s) During Past Five Years
Jennifer McGovern 1977	Vice President (Since 2014)	Managing Director of BlackRock, Inc. since 2016; Director of BlackRock, Inc. from 2011 to 2015; Head of Product Structure and Oversight for BlackRock’s U.S. Wealth Advisory Group since 2013.
Neal J. Andrews 1966	Chief Financial Officer (Since 2007)	Managing Director of BlackRock, Inc. since 2006.
Jay M. Fife 1970	Treasurer (Since 2007)	Managing Director of BlackRock, Inc. since 2007.
Charles Park 1967	Chief Compliance Officer (Since 2014)	Anti-Money Laundering Compliance Officer for the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and the Closed-End Complex from 2014 to 2015; Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and the Closed-End Complex since 2014; Principal of and Chief Compliance Officer for iShares® Delaware Trust Sponsor LLC since 2012 and BlackRock Fund Advisors (“BFA”) since 2006; Chief Compliance Officer for the BFA-advised iShares® exchange traded funds since 2006; Chief Compliance Officer for BlackRock Asset Management International Inc. since 2012.
John MacKessy 1972	Anti-Money Laundering Compliance Officer (Since 2018)	Director of BlackRock, Inc. since 2017; Global Head of Anti-Money Laundering at BlackRock, Inc. since 2017; Director of AML Monitoring and Investigations Group of Citibank from 2015 to 2017; Global Anti-Money Laundering and Economic Sanctions Officer for MasterCard from 2011 to 2015.
Benjamin Archibald 1975	Secretary (Since 2012)	Managing Director of BlackRock, Inc. since 2014; Director of BlackRock, Inc. from 2010 to 2013; Secretary of the iShares® exchange traded funds since 2015; Secretary of the BlackRock-advised mutual funds since 2012.

^(a)  The address of each Officer is c/o BlackRock, Inc., 55 East 52nd Street, New York, NY 10055.

^(b)  Officers of the Funds serve at the pleasure of the Board.

Further information about the Funds’ Directors and Officers is available in the Funds’ Statement of Additional Information, which can be obtained without charge by calling 1-800-441-7762.

At a special meeting of shareholders held on November 21, 2018, each Fund’s shareholders elected Directors who took office on January 1, 2019. For BlackRock Series Fund, Inc., the newly elected Directors include seven former Directors and eight individuals who served as directors/trustees of the funds in the BlackRock Equity-Liquidity Complex. For BlackRock Series Fund II, Inc., the newly elected Directors include three former Directors and eight individuals who served as directors/trustees of the funds in the BlackRock Closed-End Complex. Information regarding the individuals who began serving as Directors effective January 1, 2019 can be found in the proxy statement for the special meeting of shareholders, which is available on the SEC’s EDGAR Database at http://www.sec.gov.

Investment Adviser and Administrator

BlackRock Advisors, LLC Wilmington, DE 19809

Accounting Agent

JPMorgan Chase Bank, N.A.

New York, NY 10179

Transfer Agent

BNY Mellon Investment Servicing (US) Inc.

Wilmington, DE 19809

Custodians

JPMorgan Chase Bank, N.A.^(a)

New York, NY 10179

Brown Brothers Harriman & Co.^(b)

40 Water Street

Boston, Massachusetts 02109

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

Boston, MA 02116

Distributor

BlackRock Investments, LLC

New York, NY 10022

Legal Counsel

Willkie Farr & Gallagher LLP

New York, NY 10019

Address of the Trust

100 Bellevue Parkway

Wilmington, DE 19809

^(a) For all Funds except BlackRock Global Allocation Portfolio.

^(b) For BlackRock Global Allocation Portfolio.

154 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Additional Information

Proxy Results

BlackRock Series Fund, Inc.

A Special Meeting of Shareholders was held on November 21, 2018 for shareholders of record on September 24, 2018, to elect a Board of Directors of the Funds. The newly elected Directors took office effective January 1, 2019.

Shareholders approved the Directors* of BlackRock Series Fund, Inc. with voting results as follows:

	Votes For		Votes Against		Votes Abstained
Bruce R. Bond		154,036,422		4,356,173		10,178,217
Susan J. Carter		154,890,683		3,540,878		10,139,252
Collette Chilton		154,768,085		3,664,197		10,138,532
Neil A. Cotty		154,597,173		3,762,236		10,211,404
Robert Fairbairn		154,581,970		3,810,626		10,178,217
Lena G. Goldberg		154,066,831		4,321,401		10,182,581
Robert M. Hernandez		153,482,177		4,839,268		10,249,368
Henry R. Keizer		154,488,013		3,893,720		10,189,080
Cynthia A. Montgomery		154,504,449		3,927,112		10,139,252
Donald C. Opatrny		154,259,291		4,130,255		10,181,267
John M. Perlowski		154,585,558		3,774,571		10,210,684
Joseph P. Platt		154,111,387		4,237,880		10,221,546
Mark Stalnecker		154,342,201		4,058,927		10,169,684
Kenneth L. Urish		154,448,446		3,978,678		10,143,689
Claire A. Walton		154,839,562		3,595,164		10,136,087

* Denotes Company-wide proposal and voting results.

The above Directors, referred to as the BlackRock Multi-Asset Board, have also been elected to serve as directors for other BlackRock-advised equity, multi-asset, index and money market funds.

BlackRock Series Fund II, Inc.

A Special Meeting of Shareholders was held on November 21, 2018 for shareholders of record on September 24, 2018, to elect a Board of Directors of the Funds. The newly elected Directors took office effective January 1, 2019.

Shareholders approved the Directors* of BlackRock Series Fund II, Inc. with voting results as follows:

	Votes For		Votes Against		Votes Abstained
Michael J. Castellano		9,453,671		275,283		491,101
Richard E. Cavanagh		9,442,528		286,426		491,101
Cynthia L. Egan		9,672,468		56,486		491,101
Frank J. Fabozzi		9,558,438		170,516		491,101
Robert Fairbairn		9,599,043		129,911		491,101
Henry Gabbay		9,508,557		220,397		491,101
R. Glenn Hubbard		9,593,797		135,157		491,101
W. Carl Kester		9,606,439		122,515		491,101
Catherine A. Lynch		9,672,468		56,486		491,101
John M. Perlowski		9,599,043		129,911		491,101
Karen P. Robards		9,672,468		56,486		491,101

* Denotes Company-wide proposal and voting results.

The above Directors, referred to as the BlackRock Fixed-Income Board, have also been elected to serve as directors for other BlackRock-advised non-index fixed-income mutual funds and all of the BlackRock-advised closed-end funds.

General Information

Householding

The Funds will mail only one copy of shareholder documents, including prospectuses, annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please call the Funds at (800) 441-7762.

ADDITIONAL INFORMATION 155

Additional Information  (continued)

Availability of Quarterly Schedule of Investments

The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website at http://www.sec.gov. The Funds’ Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762.

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available upon request and without charge (1) by calling (800) 441-7762; (2) at http://www.blackrock.com/prospectus/insurance; and (3) on the SEC’s website at http://www.sec.gov.

Availability of Proxy Voting Record

Information about how the Funds voted proxies relating to securities held in the Funds’ portfolios during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com/prospectus/insurance or by calling (800) 441-7762 and (2) on the SEC’s website at http://www.sec.gov.

BlackRock’s Mutual Fund Family

BlackRock offers a diverse lineup of open-end mutual funds crossing all investment styles and managed by experts in equity, fixed-income and tax-exempt investing. Visit http://www.blackrock.com for more information.

Shareholder Privileges

Account Information

Call us at (800) 441-7762 from 8:00 AM to 6:00 PM ET on any business day to get information about your account balances, recent transactions and share prices. You can also reach us on the Web at http://www.blackrock.com.

Automatic Investment Plans

Investor Class shareholders who want to invest regularly can arrange to have $50 or more automatically deducted from their checking or savings account and invested in any of the BlackRock funds.

Systematic Withdrawal Plans

Investor Class shareholders can establish a systematic withdrawal plan and receive periodic payments of $50 or more from their BlackRock funds, as long as their account balance is at least $10,000.

Retirement Plans

Shareholders may make investments in conjunction with Traditional, Rollover, Roth, Coverdell, Simple IRAs, SEP IRAs and 403(b) Plans.

BlackRock Privacy Principles

BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safe-guarding their non-public personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.

If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.

BlackRock obtains or verifies personal non-public information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our websites.

BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.

We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.

156 2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS

Glossary of Terms Used in this Report

Currency
ARS	Argentine Peso
AUD	Australian Dollar
BRL	Brazilian Real
CAD	Canadian Dollar
CHF	Swiss Franc
CLP	Chilean Peso
COP	Colombian Peso
EGP	Egyptian Pound
EUR	Euro
GBP	British Pound
IDR	Indonesian Rupiah
JPY	Japanese Yen
KRW	South Korean Won
MXN	Mexican Peso
NGN	Nigerian Naira
NOK	Norwegian Krone
RUB	New Russian Ruble
SEK	Swedish Krona
SGD	Singapore Dollar
TRY	Turkish Lira
TWD	New Taiwan Dollar
USD	United States Dollar
ZAR	South African Rand
Portfolio Abbreviations
ABS	Asset-Backed Security
ADR	American Depositary Receipt
BZDIOVER	Overnight Brazil CETIP — Interbank Rate
CDO	Collateralized Debt Obligation
CDX	Credit Default Swap Index
CLO	Collateralized Loan Obligation
CSMC	Credit Suisse Mortgage Capital
CVA	Certification Van Aandelon (Dutch Certificate)
CWABS	Countrywide Asset-Backed Certificates
DAC	Designated Activity Company
ETF	Exchange-Traded Fund
EURIBOR	Euro Interbank Offered Rate
GO	General Obligation Bonds
LIBOR	London Interbank Offered Rate
MXIBTIIE	Mexico Interbank TIIE 28-Day
NASDAQ	National Association of Securities Dealers Automated
NYRS	New York Registered Shares
OTC	Over-The-Counter

Portfolio Abbreviations (continued)
PCL	Public Company Limited
PIK	Pay-In-Kind
RB	Revenue Bonds
REIT	Real Estate Investment Trust
S&P	Standard & Poor’s
SPDR	S&P Depository Receipt
TBA	To-be-announced
VRDN	Variable Rate Demand Notes

GLOSSARY OF TERMS USED IN THIS REPORT 157

This report is authorized for distribution only to Policyowners of certain variable life insurance policies, which are funded by shares of BlackRock Series Fund, Inc. This report is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of the Fund or the policies. Past performance results shown in this report should not be considered a representation of future performance. Investment returns and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance information used throughout this report does not include insurance-related fees and expenses. An investment in BlackRock Government Money Market Portfolio is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other Government agency. Although BlackRock Government Money Market Portfolio seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Portfolio. Statements and other information herein are as dated and are subject to change. Please see the Fund’s prospectus for a description of risks associated with global investments.

Series8-12/18-AR

Item 2 – Code of Ethics – The registrant (or the “Fund”) has adopted a code of ethics, as of the end of the period covered by this report, applicable to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. During the period covered by this report, the code of ethics was amended to update certain information and to make other non-material changes. During the period covered by this report, there have been no waivers granted under the code of ethics. The registrant undertakes to provide a copy of the code of ethics to any person upon request, without charge, who calls 1-800-441-7762.

Item 3 – Audit Committee Financial Expert – The registrant’s board of directors (the “board of directors”), has determined that (i) the registrant has the following audit committee financial experts serving on its audit committee and (ii) each audit committee financial expert is independent:

Robert M. Hernandez

Henry R. Keizer

Bruce R. Bond

Under applicable securities laws, a person determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification.

Item 4 – Principal Accountant Fees and Services

The following table presents fees billed by Deloitte & Touche LLP (“D&T”) in each of the last two fiscal years for the services rendered to the Fund:

	(a) Audit Fees		(b) Audit-Related Fees1		(c) Tax Fees2		(d) All Other Fees
Entity Name	Current Fiscal Year End	Previous Fiscal Year End	Current Fiscal Year End	Previous Fiscal Year End	Current Fiscal Year End	Previous Fiscal Year End	Current Fiscal Year End	Previous Fiscal Year End
BlackRock High Yield Portfolio	$30,192	$30,167	$0	$0	$10,100	$10,149	$0	$0
BlackRock U.S. Government Bond Portfolio	$39,474	$39,474	$0	$0	$15,400	$15,402	$0	$0

The following table presents fees billed by D&T that were required to be approved by the registrant’s audit committee (the “Committee”) for services that relate directly to the operations or financial reporting of the Fund and that are rendered on behalf of BlackRock Advisors, LLC (the “Investment Adviser” or “BlackRock”) and entities controlling, controlled by, or under common control with BlackRock (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) that provide ongoing services to the Fund (“Affiliated Service Providers”):

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	Current Fiscal Year End	Previous Fiscal Year End
(b) Audit-Related Fees1	$0	$0
(c) Tax Fees2	$0	$0
(d) All Other Fees3	$2,274,000	$2,129,000

¹ The nature of the services includes assurance and related services reasonably related to the performance of the audit or review of financial statements not included in Audit Fees, including accounting consultations, agreed-upon procedure reports, attestation reports, comfort letters, out-of-pocket expenses and internal control reviews not required by regulators.

² The nature of the services includes tax compliance and/or tax preparation, including services relating to the filing or amendment of federal, state or local income tax returns, regulated investment company qualification reviews, taxable income and tax distribution calculations.

³ Non-audit fees of $2,274,000 and $2,129,000 for the current fiscal year and previous fiscal year, respectively, were paid to the Fund’s principal accountant in their entirety by BlackRock, in connection with services provided to the Affiliated Service Providers of the Fund and of certain other funds sponsored and advised by BlackRock or its affiliates for a service organization review and an accounting research tool subscription. These amounts represent aggregate fees paid by BlackRock and were not allocated on a per fund basis.

(e)(1) Audit Committee Pre-Approval Policies and Procedures:

The Committee has adopted policies and procedures with regard to the pre-approval of services. Audit, audit-related and tax compliance services provided to the registrant on an annual basis require specific pre-approval by the Committee. The Committee also must approve other non-audit services provided to the registrant and those non-audit services provided to the Investment Adviser and Affiliated Service Providers that relate directly to the operations and the financial reporting of the registrant. Certain of these non-audit services that the Committee believes are (a) consistent with the SEC’s auditor independence rules and (b) routine and recurring services that will not impair the independence of the independent accountants may be approved by the Committee without consideration on a specific case-by-case basis (“general pre-approval”). The term of any general pre-approval is 12 months from the date of the pre-approval, unless the Committee provides for a different period. Tax or other non-audit services provided to the registrant which have a direct impact on the operations or financial reporting of the registrant will only be deemed pre-approved provided that any individual project does not exceed $10,000 attributable to the registrant or $50,000 per project. For this purpose, multiple projects will be aggregated to determine if they exceed the previously mentioned cost levels.

Any proposed services exceeding the pre-approved cost levels will require specific pre-approval by the Committee, as will any other services not subject to general pre-approval (e.g., unanticipated but permissible services). The Committee is informed of each service approved subject to general pre-approval at the next regularly scheduled in-person board meeting. At this meeting, an analysis of such services is presented to the Committee for ratification. The Committee may delegate to the Committee Chairman the authority to approve the provision of and fees for any specific engagement of permitted non-audit services, including services exceeding pre-approved cost levels.

(e)(2) None of the services described in each of Items 4(b) through (d) were approved by the Committee pursuant to the de minimis exception in paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) Not Applicable

(g) The aggregate non-audit fees, defined as the sum of the fees shown under “Audit-Related Fees,” “Tax Fees” and “All Other Fees,” paid to the accountant for services rendered by the accountant to the registrant, the Investment Adviser and the Affiliated Service Providers were:

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Entity Name	Current Fiscal Year End	Previous Fiscal Year End
BlackRock High Yield Portfolio	$10,100	$10,149
BlackRock U.S. Government Bond Portfolio	$15,400	$15,402

Additionally, the amounts billed by D&T in connection with services provided to the Affiliated Service Providers of the Fund and of other funds sponsored and advised by BlackRock or its affiliates during the current and previous fiscal years for a service organization review and an accounting research tool subscription were:

Current Fiscal Year End	Previous Fiscal Year End
$2,274,000	$2,129,000

These amounts represent aggregate fees paid by BlackRock and were not allocated on a per fund basis.

(h) The Committee has considered and determined that the provision of non-audit services that were rendered to the Investment Adviser and the Affiliated Service Providers that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

Item 5 – Audit Committee of Listed Registrants – Not Applicable

Item 6 – Investments

(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this Form.

(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.

Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not Applicable

Item 8 – Portfolio Managers of Closed-End Management Investment Companies – Not Applicable

Item 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable

Item 10 –  Submission of Matters to a Vote of Security Holders – There have been no material changes to these procedures.

Item 11 –  Controls and Procedures

(a) –    The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these

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controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 15d-15(b) under the Securities Exchange Act of 1934, as amended.

(b) –   There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12 –  Disclosure of Securities Lending Activities for Closed-End Management Investment Companies – Not Applicable to the registrant.

Item 13 –  Exhibits attached hereto

(a)(1) Code of Ethics – See Item 2

(a)(2) Certifications – Attached hereto

(a)(3) Not Applicable

(a)(4) Not Applicable

(b) Certifications – Attached hereto

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Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BlackRock Series Fund II, Inc.
By:	/s/ John M. Perlowski
	John M. Perlowski
	Chief Executive Officer (principal executive officer) of BlackRock Series Fund II, Inc.
Date: February 28, 2019

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ John M. Perlowski
	John M. Perlowski
	Chief Executive Officer (principal executive officer) of BlackRock Series Fund II, Inc.
Date: February 28, 2019
By:	/s/ Neal J. Andrews
	Neal J. Andrews
	Chief Financial Officer (principal financial officer) of BlackRock Series Fund II, Inc.
Date: February 28, 2019

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