2021 Annual Report

1 SEPTEMBER 30, 2021. 2021 Annual Report blackrock Funds V. blackrock Core Bond Portfolio blackrock High Yield Bond Portfolio blackrock Low Duration Bond Portfolio Not FDIC Insured - May Lose Value - No Bank Guarantee The Markets in Review Dear Shareholder, The 12-month reporting period as of September 30, 2021 was a remarkable period of adaptation and recovery, as the global economy dealt with the implications of the coronavirus (or COVID-19 ) pandemic. The United States began the reporting period as the initial reopening-led economic rebound was beginning to slow. Nonetheless, the economy continued to grow at a brisk pace for the reporting period, eventually regaining the output lost from the pandemic. Equity prices rose with the broader economy, as strong scal and monetary support, as well as the development of vaccines, made investors increasingly optimistic about the economic outlook.

2 The implementation of mass vaccination campaigns and passage of two additional scal stimulus packages further boosted stocks, and many equity indices neared or surpassed all-time highs late in the reporting period. In the United States, returns Rob Kapito of small-capitalization stocks, which bene ted the most from the resumption of in-person activities, outpaced President, blackrock Advisors, LLC. large-capitalization stocks. International equities also gained, as both developed and emerging markets continued to recover from the effects of the pandemic. Total Returns as of September 30, 2021. The 10-year Treasury yield (which is inversely related to bond prices) had fallen sharply prior to the beginning of the reporting period, which meant bonds were priced for extreme risk avoidance and economic 6-Month 12-Month disruption. Despite expectations of doom and gloom, the economy expanded rapidly, stoking in ation concerns large cap equities in early 2021, which led to higher yields and a negative overall return for most Treasuries.

3 In the corporate (S&P 500 Index). bond market, support from the Federal Reserve (the Fed ) assuaged credit concerns and led to solid small cap equities ( ) returns for high-yield corporate bonds, although investment-grade corporates declined slightly. (Russell 2000 Index). The Fed remained committed to accommodative monetary policy by maintaining near-zero interest rates and International equities (MSCI Europe, Australasia, by reiterating that in ation could exceed its 2% target for a sustained period without triggering a rate increase. Far East Index). In response to rising in ation late in the period, the Fed changed its market guidance, raising the possibility of higher rates in 2022 and reducing bond purchasing beginning in late 2021. Emerging market equities ( ) (MSCI Emerging Markets Looking ahead, we believe that the global expansion will continue to broaden as Europe and other developed Index).

4 Market economies gain momentum, although the delta variant of the coronavirus remains a threat, particularly in 3-month Treasury bills emerging markets. While we expect in ation to remain elevated in the medium-term as the expansion continues, (ICE BofA 3-Month we believe the recent uptick owes more to temporary supply disruptions than a lasting change in fundamentals. Treasury Bill Index). The change in Fed policy also means that moderate in ation is less likely to be followed by interest rate hikes Treasury securities ( ). that could threaten the economic expansion. (ICE BofA 10-Year Treasury Index). Overall, we favor a moderately positive stance toward risk, with an overweight in equities. Sectors that are better investment grade bonds ( ). poised to manage the transition to a lower-carbon world, such as technology and health care, are particularly (Bloomberg Aggregate attractive in the long-term.)

5 Small-capitalization stocks and European equities are likely to bene t from the Bond Index). continuing vaccine-led restart, while Chinese equities stand to gain from a more accommodative monetary and Tax-exempt municipal bonds scal environment as the Chinese economy slows. We are underweight long-term credit, but in ation-protected (S&P Municipal Bond Index). Treasuries, Asian xed income, and emerging market local-currency bonds offer potential opportunities. We believe that international diversi cation and a focus on sustainability can help provide portfolio resilience, and high yield bonds (Bloomberg Corporate the disruption created by the coronavirus appears to be accelerating the shift toward sustainable investments. High Yield 2% Issuer Capped Index). In this environment, our view is that investors need to think globally, extend their scope across a broad array of asset classes, and be nimble as market conditions change.

6 We encourage you to talk with your nancial advisor Past performance is not an indication of future results. Index and visit for further insight about investing in today's markets. performance is shown for illustrative purposes only. You cannot invest directly in an index. Sincerely, Rob Kapito President, blackrock Advisors, LLC. 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 Bene ts and Risks of Leveraging .. 13. About fund Performance .. 14. Disclosure of Expenses .. 15. Derivative Financial Instruments .. 15. Financial Statements: Schedules of Investments .. 16. Statements of Assets and Liabilities .. 114. Statements of Operations .. 117. Statements of Changes in Net Assets .. 118. Financial Highlights .. 120. Notes to Financial Statements .. 137. Report of Independent Registered Public Accounting Firm.

7 157. Important Tax Information .. 158. Disclosure of Investment Advisory Agreement and Sub-Advisory Agreements .. 159. Trustee and Of cer Information .. 163. Additional Information .. 166. Glossary of Terms Used in this Report .. 168. 3. fund Summary as of September 30, 2021 blackrock Core Bond Portfolio Investment Objective blackrock Core Bond Portfolio's (the fund ) investment objective is to seek to maximize total return , consistent with income generation and prudent investment management. On September 24, 2021, the Board approved a proposal to amend the fund 's investment objective. Effective November 1, 2021, the fund 's investment objective will be to seek to realize a total return that exceeds that of the reference benchmark. Portfolio Management Commentary How did the fund perform? For the 12-month period ended September 30, 2021, all of the fund 's share classes outperformed its benchmark, the Bloomberg Aggregate Bond Index, with the exception of the Investor C Shares, which underperformed the benchmark.

8 What factors in uenced performance? The fund 's active positioning with respect to duration (sensitivity to interest rate changes) was the most signi cant contributor to performance relative to the benchmark as longer-term interest rates rose over the period. Holdings of structured products, investment grade corporate credit and agency mortgage-backed securities ( MBS ) also contributed to performance. Conversely, positioning in global developed market government bonds, foreign currencies and municipal bonds detracted from relative performance over the period. The fund held derivatives in the form of futures and forward contracts for risk management purposes as well as to manage exposures, with the objectives of generating return and managing risk. The use of derivatives detracted from fund performance during the period. The fund held an average cash position over the period.

9 The investment adviser believed that Treasury securities were unattractive from a risk/reward perspective, which led the fund to remain underweight duration versus the benchmark while also holding an elevated cash position. The fund 's cash position did not have a material impact on performance during the period. Describe recent portfolio activity. Throughout the fourth quarter of 2020, the fund 's nominal duration exposure on the long end of the yield curve was modestly trimmed, while the investment adviser favored European peripheral markets given more attractive valuations. In addition, the fund continued to reduce high quality assets that trade at a yield spread relative to Treasuries given stretched valuations. The fund remained marginally underweight agency MBS, while reducing exposure to up-in-quality investment grade corporates and municipal bonds. The investment adviser continued to remain patient across the securitized asset complex, focusing on higher quality assets with strong levels of protection.

10 Lastly, the fund favored emerging market debt given a supportive growth backdrop, a favorable technical environment and attractive relative value. At the start of 2021, the investment adviser began to shift the portfolio toward a slightly more risk-on tone, favoring structured products, a larger allocation to credit, and emerging market debt. In addition, the investment adviser began to trim exposure to high quality spread assets, including investment grade corporate credit and agency MBS given stretched valuations, while also reducing duration at the back end of the yield curve given the outlook for higher interest rates. Entering the second half of 2021, the fund remained underweight duration relative to the benchmark, holding a preference for exposure to global rates, including Chinese sovereign bonds given more attractive yields. In addition, the fund began to increase its allocation to agency MBS given a positive supply/demand backdrop.