Expenses for Institutional shares: Total 0.98%; Net, Including Investment Related Expenses (dividend expense, interest expense, acquired fund fees and expenses and certain other fund expenses) 0.92%. For Investor A shares: Total 1.23%; Net, Including Investment Related Expenses 1.17%. Institutional and Investor A shares have contractual waivers with an end date of 06/30/2025 terminable upon 90 days' notice. For certain share classes, BlackRock may voluntarily agree to waive certain fees and expenses in which the adviser may discontinue at any time without notice. Expenses stated as of the fund's most recent prospectus. Data represents past performance and is no guarantee of future results. Investment returns and principal values may fluctuate so that an investor s shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvestment of dividends and capital gains. Current performance may be lower or higher than that shown. Refer to Investment Management & Financial Services | BlackRock for most recent month-end performance. Investment returns reflect total fund operating expenses, net of all fees, waivers and/or expense reimbursements. Index performance is shown for illustrative purposes only. It is not possible to invest directly in an unmanaged index. Share classes have different sales charges, fees and other features. Returns with sales charge reflect deduction of current maximum initial sales charge of 5.25% for Investor A shares. Institutional shares have no front- or back-end load. Institutional shares have limited availability and may be purchased at various minimums. See prospectus for details. Net Expenses Excluding Investment Related Expenses for Institutional shares: 0.92%; for Investor A shares: 1.17%.
The fund posted returns of 10.23% (Institutional shares) and 10.16% (Investor A shares, without sales charge) for the second quarter of 2024. The fund outperformed its benchmark during the quarter, primarily driven by security selection. The fund increased its exposure to the semiconductor and hardware industries, while taking profits on select software stocks. It added to companies involved in artificial intelligence ('AI') infrastructure, including power solutions for data centers.
Security selection within the semiconductor industry contributed to relative performance. On a stock-specific basis, an overweight position in Nvidia was the largest contributor to relative returns. Investor sentiment toward the stock continued to improve as the semiconductor design company announced its latest generation of graphics processing unit (GPU) chips for AI data center customers. A lack of exposure to Intel contributed to relative performance after the company announced disappointing revenue guidance that weighed on the stock.
An off-benchmark allocation to the internet industry weighed on active returns. On a stock-specific basis, an underweight position in Taiwan Semiconductor Manufacturing (TSM) was the largest detractor from relative performance. The stock rose as the semiconductor manufacturer benefited from its role as the primary manufacturer of GPUs. An overweight position in MongoDB (MDB) was unhelpful as the software company reported a deceleration in growth and significantly lowered guidance.
Today marks the early stages of the AI era, which will drive exponential growth and value creation in the technology sector and beyond, we believe. AI is the next frontier of innovation and may be one of the biggest singular technology trends that the global economy has ever seen. While the initial beneficiaries have been mega-cap technology companies building the physical infrastructure required to train generative AI models, we see a variety of opportunities in companies aligned with the theme. Elsewhere, we maintain our exposure to other long-term secular themes, such as cloud computing and electric vehicles.
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
This post originally appeared on BlackRock.