PREFERRED PORTFOLIO MANAGEMENT SEPARATELY MANAGED FIXED INCOME ACCOUNTS

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Verity Craig
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1 PREFERRED PORTFOLIO MANAGEMENT SEPARATELY MANAGED FIXED INCOME ACCOUNTS

2 Build on BlackRock IN TAXABLE FIXED INCOME MANDATES IN MUNICIPAL FIXED INCOME MANDATES $ 38B+ IN SEPARATELY MANAGED FIXED INCOME ACCOUNTS Trusted to manage more money than any other investment firm 1, BlackRock is committed to helping our clients navigate today s challenging markets. Founded as a fixed income provider, BlackRock uses its deep expertise to deliver quality service and support to our clients. Leading banks, insurance companies and sovereign nations rely on BlackRock to manage the risk in their portfolios. We believe risk management is about understanding risk, not avoiding it. As a client, each of your investments will be monitored by Aladdin BlackRock s proprietary risk management engine to track the on-going health of your portfolio and examine its sensitivity to different market scenarios. TAILORING TO UNIQUE NEEDS Tax Management Philanthropic Needs Trust & Estate Planning Income Objectives ONE PORTFOLIO, ONE CLIENT AT A TIME BlackRock Preferred Portfolio Management PPM offers separately managed fixed income accounts to institutions and affluent individuals like yourself whose assets merit personal attention. 1 All numbers on this page are sourced from BlackRock as of 12/31/2015.

Founded as a fixed income provider, BlackRock uses its deep expertise to deliver quality service and support to our clients.

3 Personal Portfolio Manager Partnering with Preferred Portfolio Management brings you the power of BlackRock through your personal Portfolio Manager.* Your Portfolio Manager and Financial Advisor can work together to manage your portfolio, as the markets or your personal circumstances may change. As a client, not only will you receive quarterly performance reporting, but your Portfolio Manager will engage in personal meetings and conference calls so you know how your investments are working for you. YOUR PORTFOLIO MANAGER AT WORK Investment Capabilities Capital Markets Expertise Risk Management LEVERAGES THE POWER OF BLACKROCK BUILDS CUSTOMIZED SOLUTION MANAGES PORTFOLIO Your Portfolio Manager in Action Two of the most distinguishing characteristics of a bond portfolio are the potential to generate income and preserve your initial investment. Using a consultative approach, together with your Financial Advisor, your personal portfolio manager can build a fixed income portfolio, aiming to provide the right balance between income generation and investment stability, for your situation today and for your future. * A PPM account with a personal Portfolio Manager generally requires a minimum investment of $1 million. Accounts below $1 million (minimum $250,000) are serviced by a managed account team and have limited customization capabilities. For additional information, please speak to your Financial Advisor.

As a client, not only will you receive quarterly performance reporting, but your Portfolio Manager will engage in personal meetings and conference calls so you know how your investments are working

4 Customized for You Your Portfolio Manager partners with your Financial Advisor to understand your unique financial situation and then thoughtfully tailors a portfolio with your goals in mind. Given the flexibilities afforded within a separately managed account, the wide range of investment vehicles and the customization strategies available, PPM allows your portfolio to be just that yours. A PORTFOLIO BUILT FOR YOU WITH THE POTENTIAL TO MANAGE COMPLEX TAX SITUATIONS REDUCE INTEREST RATE RISK Municipal Bonds Asset-Backed Securities Treasury Bonds High Yield Corporate Bonds Agencies APPLY SOCIAL SCREENS GENERATE INCOME Customization in Action Preferred Portfolio Management by BlackRock offers various customizations to design a portfolio that is right for you. As the largest manager of municipal bonds in the world 1, we have the ability to thoughtfully implement a number of state-specific portfolios, across varying maturity ranges, providing a tax-efficient, yet diversified portfolio. 1 Source: BlackRock Municipal AUM 110 billion as of 12/31/15.

A PORTFOLIO BUILT FOR YOU WITH THE POTENTIAL TO MANAGE COMPLEX TAX SITUATIONS REDUCE INTEREST RATE RISK Municipal Bonds Asset-Backed Securities Treasury Bonds High Yield Corporate Bonds Agencies

5 Scalable Pricing Power Working with BlackRock can position you to benefit from institutional pricing. We understand the importance of seeking the most beneficial price in any transaction to help you keep more of what you ve earned. The municipal bond market is highly fragmented. This can create difficulties for individual investors looking for municipal buyers or sellers. An individual may need to offer a higher price to purchase a security or accept a lower price to sell one. This price concession is often referred to as the spread. WHY SIZE AND SCALE MATTER BlackRock s institutional pricing advantage 3% SPREAD (AS % OF PAR) % <25k 0.5% 1.8% 1.4% 0.9% 0.6% 0.5% 0.4% 0.3% 0.4% 0.2% 0.1% 0.1% 0.1% 0.2% 0.1% 25 50k k k k k 500k 1m 1m+ TRANSACTION SIZE ($) Municipal Market BlackRock Municipal SMA Strategies Transaction price data obtained from Municipal Securities Rulemaking Board (MSRB) as of 3/31/2012. For overall municipal market spread analysis information, please see the disclosure at the end of this brochure. For BlackRock SMA strategies execution spreads, 3,086 BlackRock SMA strategy transactions were analyzed using the same methodology and during the same time period. Spreads vary and are subject to change. The analysis shown does not guarantee or indicate future results. Pricing in Action Investment managers generally combine trades across their clients accounts, allowing them to buy in bulk, which can potentially lead to better pricing due to a smaller spread. The above chart illustrates the different spreads achieved at different dollar values. The 2.1% spread on transactions of $25,000 or less is significantly different from the 0.2% spread on transactions over $1 million. This 1.9% difference has a direct impact on the return achieved from an investment. BlackRock also benefits from having a large network of dealers to solicit bids from, providing an additional opportunity to reduce your transaction costs.

This can create difficulties for individual investors looking for municipal buyers or sellers.

6 WHY BLACKROCK BlackRock helps millions of people, as well as the world s largest institutions and governments, pursue their investing goals. We offer: } A comprehensive set of innovative solutions, including mutual funds, separately managed accounts, alternatives and ishares ETFs } Global market and investment insights } Sophisticated risk and portfolio analytics We work only for our clients, who have entrusted us with managing $4.6 trillion, earning BlackRock the distinction of being trusted to manage more money than any other investment firm in the world.* Want to know more? blackrock.com * AUM as of 12/31/15. Source: Transaction price data obtained from Municipal Securities Rulemaking Board (MSRB) as of 3/31/2012. BlackRock analyzed prices for 524,977 municipal market transactions that occurred on the secondary market between January 1, 2012 and March 31, Dealer to- dealer transactions were excluded from the analysis because they do not involve clients. Primary market (new issue) transactions also were excluded because their transaction costs typically are borne by the issuer through the underwriting process. Variable rate demand (VRD) note transactions were excluded because VRDs are short-term securities that lack an active secondary market. The spread For a municipal bond typically is defined as the difference between the price that investors are willing to pay a dealer for the bond and the price at which a dealer can obtain that same bond from investors. Municipal market spreads are difficult to calculate because many municipal bonds are thinly traded resulting in limited public pricing information. For purposes of this analysis, BlackRock estimated municipal bond spreads by calculating the difference in price of the closest-in-time buy and sell transactions occurring on the same day for the same security. Buy (or sell) transactions that did not have a corresponding sell (or buy) transaction on the same day were excluded (because the spread calculated from using buy and sell transactions occurring on different days may not be representative due to the impact on transaction prices caused by market volatility and/or changes in interest rates that may occur over longer periods of time). BlackRock calculated spreads using closest-in-time buy and sell transactions to minimize the effect of intra-day market movements on the execution prices. Investing involves risk. Two significant risks related to fixed income investing are interest rate risk and credit risk. Typically, when interest rates rise, there is a corresponding decline in the market value of bonds. Credit risk refers to the possibility that the issuer of the bond will not be able to make principal and interest payments. There may be less information available on the financial condition of issuers of municipal securities than for public corporations. The market for municipal bonds may be less liquid than for taxable bonds. A portion of the income may be taxable. Some investors may be subject to Alternative Minimum Tax (AMT). Capital gains distributions, if any, are taxable. Municipal securities may not be suitable for certain investors. Trades in municipal securities BlackRock, Inc. All Rights Reserved. BLACKROCK is a registered trademark of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners. Lit. No. PPM-BR A-USWA-0416 / SMA-1385

risk and portfolio analytics We work only for our clients, who have entrusted us with managing $4.

WHAT ROLE DO BONDS PLAY IN YOUR PORTFOLIO? Guard Against Interest Rate Risk and Credit Events

WHAT ROLE DO BONDS PLAY IN YOUR PORTFOLIO? Guard Against Interest Rate Risk and Credit Events RETHINK YOUR BONDS Building Better Bond Portfolios Interest rates may inch up this year, but expect them to be low for some time to come. You can continue to achieve your fixed income goals in this environment