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: 811-05742
Name of Fund: BlackRock Funds
BlackRock Advantage International Fund
BlackRock Advantage Large Cap Growth Fund
BlackRock Advantage Small Cap Growth Fund
BlackRock All-Cap Energy & Resources Portfolio
BlackRock Energy & Resources Portfolio
BlackRock Health Sciences Opportunities Portfolio
BlackRock High Equity Income Fund
BlackRock International Dividend Fund
BlackRock Mid-Cap Growth Equity Portfolio
BlackRock Technology Opportunities Portfolio
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Funds, 55 East 52nd Street, New York, NY 10055
Registrant’s telephone number, including area code: (800) 441-7762
Date of fiscal year end: 09/30/2019
Date of reporting period: 09/30/2019
Item 1 – Report to Stockholders
|
SEPTEMBER 30, 2019 |
| 2019 Annual Report | ||
BlackRock FundsSM
| · |
BlackRock All-Cap Energy & Resources Portfolio |
| · |
BlackRock Energy & Resources Portfolio |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of each Fund’s shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from BlackRock or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
You may elect to receive all future reports in paper free of charge. If you hold accounts directly with BlackRock, you can call (800) 441-7762 to inform BlackRock that you wish to continue receiving paper copies of your shareholder reports. If you hold accounts through a financial intermediary, you can follow the instructions included with this disclosure, if applicable, or contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. Please note that not all financial intermediaries may offer this service. Your election to receive reports in paper will apply to all funds advised by BlackRock Advisors, LLC, BlackRock Fund Advisors or their affiliates, or all funds held with your financial intermediary, as applicable.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive electronic delivery of shareholder reports and other communications by: (i) accessing the BlackRock website at www.blackrock.com/edelivery and logging into your accounts, if you hold accounts directly with BlackRock, or (ii) contacting your financial intermediary, if you hold accounts through a financial intermediary. Please note that not all financial intermediaries may offer this service.
| Not FDIC Insured • May Lose Value • No Bank Guarantee |
Dear Shareholder,
Investment performance in the 12 months ended September 30, 2019 was a tale of two markets. The first half of the reporting period was characterized by restrictive monetary policy, deteriorating economic growth, equity market volatility, and rising fear of an imminent recession. During the second half of the reporting period, stocks and bonds rebounded sharply, as influential central banks shifted toward accommodative monetary policy, which led to broad-based optimism that a near-term recession could be averted.
After the dust settled, equity and bond markets posted mixed returns while weathering significant volatility. Less volatile U.S. large cap equities and U.S. bonds advanced, while equities at the high end of the risk spectrum — emerging markets, international developed, and U.S. small cap — posted modest negative returns.
Fixed-income securities delivered strong returns with relatively low volatility, as interest rates declined (and bond prices rose). U.S. Treasuries, particularly long-term Treasuries, proved to be an effective ballast for diversified investors. Investment grade and high yield corporate bonds also posted positive returns, as the credit fundamentals in corporate markets remained relatively solid.
In the U.S. equity market, volatility spiked in late 2018, 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. Volatility also rose in emerging markets, as the appreciating U.S. dollar and higher interest rates in the U.S. disrupted economic growth abroad. An economic slowdown in Europe and ongoing uncertainty about Brexit led to negative performance for European equities.
As equity performance faltered and global economic growth slowed, the U.S. Federal Reserve (the “Fed”) shifted to a more patient perspective on the economy in January 2019. The Fed left interest rates unchanged for six months, then reduced interest rates twice thereafter. Following in the Fed’s footsteps, the European Central Bank announced aggressive economic stimulus measures, including lower interest rates and the return of its bond purchasing program. The Bank of Japan signaled a continuation of accommodative monetary policy, while China committed to looser credit conditions and an increase in fiscal spending.
The outpouring of global economic stimulus led to a sharp rally in risk assets throughout the world despite the headwind of rising geopolitical and trade tensions. Hopes continued to remain high as the current economic expansion became the longest in U.S. history. Looking ahead, markets are pricing in additional rate cuts by the Fed over the next year, as investors anticipate a steady shift toward more stimulative monetary policy.
We continue to expect a slowing expansion with additional room to run. Despite a sharp slowdown in trade and manufacturing across the globe, U.S. consumers continued to spend at a relatively healthy pace, benefitting from the lowest unemployment rate in 50 years and rising wages. However, escalating trade tensions and the resulting disruptions in global supply chains are becoming increasingly unpredictable, as are geopolitical tensions in the Middle East.
We believe U.S. equities remain relatively attractive, but we are shifting to a more cautious stance within emerging markets and Asia ex-Japan equities. For bonds, U.S. Treasuries are likely to continue to help buffer against volatility in risk assets, while income from other types of bonds can continue to offer steady returns.
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 September 30, 2019 | ||||
| 6-month | 12-month | |||
|
U.S. large cap equities
|
6.08% | 4.25% | ||
|
U.S. small cap equities
|
(0.36) | (8.89) | ||
|
International equities
|
2.57 | (1.34) | ||
|
Emerging market equities
|
(3.66) | (2.02) | ||
|
3-month Treasury bills
|
1.20 | 2.39 | ||
|
U.S. Treasury securities
|
7.54 | 15.15 | ||
|
U.S. investment grade bonds
|
5.42 | 10.30 | ||
|
Tax-exempt municipal bonds
|
3.71 | 8.19 | ||
|
U.S. high yield bonds
|
3.87 | 6.35 | ||
| Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index. | ||||
| 2 | T H I S P A G E I S N O T P A R T O F Y O U R F U N D R E P O R T |
| Page | ||||
| 2 | ||||
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Annual Report: |
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| 4 | ||||
| 8 | ||||
| 8 | ||||
| 8 | ||||
|
Financial Statements: |
||||
| 9 | ||||
| 13 | ||||
| 15 | ||||
| 16 | ||||
| 17 | ||||
| 24 | ||||
|
Report of Independent Registered Public Accounting Firm/Important Tax Information |
35 | |||
|
Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement |
36 | |||
| 40 | ||||
| 44 | ||||
| 45 | ||||
| 3 |
| Fund Summary as of September 30, 2019 | BlackRock All-Cap Energy & Resources Portfolio |
Investment Objective
BlackRock All-Cap Energy & Resources Portfolio’s (the “Fund”) investment objective is to provide long-term growth of capital.
At a meeting held on July 31, 2019, the Board of Trustees of BlackRock FundsSM approved the reorganization of the BlackRock Energy & Resources Portfolio (the “Target Fund”) with and into the Fund. The reorganization is expected to occur during the first quarter of 2020 and is not subject to approval by each Fund’s shareholders. Effective upon the closing of the reorganization, the Fund will change its name to BlackRock Energy Opportunities Fund.
Portfolio Management Commentary
How did the Fund perform?
For the 12-month period ended September 30, 2019, the Fund underperformed its benchmark, the MSCI World Energy Index.
What factors influenced performance?
Energy stocks fell sharply during the annual period, as slowing global growth led to concerns about the demand outlook for crude oil.
The Fund’s industry allocations detracted from relative performance, with the largest adverse effect coming from an underweight position in the energy distribution area.
An underweight position in Chevron Corp., which strongly outperformed the broader energy sector, was a substantial detractor at the individual stock level. The company exceeded earnings expectations for the second quarter of 2019, and it benefited from investors’ preference for larger, more stable companies at a time of weak returns for the sector as a whole.
An overweight position in Concho Resources, Inc. was also among the largest detractors from relative performance. Concho reported stronger-than-expected earnings for the second quarter of 2019, and it announced the sale of one of its assets to fund part of a $1.5 billion stock buyback program. The company guided down on its production outlook, however, raising questions about its operational execution and contributing to a sharp decline in its stock price.
The Fund’s security selection contributed to Fund performance, particularly in the integrated energy industry. Anadarko Petroleum Corp., which was taken over at a premium, was the leading contributor at the individual stock level. Overweight positions in the pipeline operators TransCanada Corp. and Williams Cos., Inc. also gained ground as efforts to relieve bottlenecks in the Permian Basin led to increased investment in infrastructure.
Describe recent portfolio activity.
The Fund reduced its weighting in the exploration and production (“E&P”) and oilfield services industries, and it redeployed the proceeds into larger-cap, globally diversified integrated oil companies and international producers.
Describe portfolio positioning at period end.
The investment adviser emphasized companies that exhibited capital discipline and/or are taking advantage of the emerging upcycle in liquified natural gas.
The Fund was overweight in the E&P subsector at the close of the period and was underweight in the integrated, oil services, refining and marketing, and distribution industries.
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
TEN LARGEST HOLDINGS
|
|
||||
| Security (a) |
Percent of Net Assets |
|||
|
|
||||
|
Royal Dutch Shell PLC, Class A |
13% | |||
|
Exxon Mobil Corp. |
9 | |||
|
BP PLC |
9 | |||
|
TOTAL SA |
8 | |||
|
ConocoPhillips |
5 | |||
|
TC Energy Corp. |
4 | |||
|
Williams Cos., Inc. |
4 | |||
|
Suncor Energy, Inc. |
4 | |||
|
EOG Resources, Inc. |
4 | |||
|
Chevron Corp. |
4 | |||
|
|
||||
| (a) |
Excludes short-term investments. |
INDUSTRY ALLOCATION
|
|
||
| Industry |
Percent of Net Assets |
|
|
|
||
|
Oil, Gas & Consumable Fuels |
95% | |
|
Energy Equipment & Services |
3 | |
|
Short-Term Securities |
2 | |
|
|
||
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 rating 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.
| 4 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
| Fund Summary as of September 30, 2019 (continued) | BlackRock All-Cap Energy & Resources Portfolio |
TOTAL RETURN BASED ON A $10,000 INVESTMENT
| (a) |
Assuming maximum sales charges, if any, transaction costs and other operating expenses, including investment advisory fees and administration fees, if any. Institutional Shares do not have a sales charge. |
| (b) |
Under normal market conditions, the Fund invests at least 80% of its total assets in equity securities of global energy and natural resources companies and companies in associated businesses, as well as utilities (such as gas, water, cable, electrical and telecommunications utilities). |
| (c) |
A free float-adjusted market capitalization index that represents the energy segment in global developed market equity performance. |
Performance Summary for the Period Ended September 30, 2019
| Average Annual Total Returns(a) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||||||||||||||||||||||||
|
6-Month Total Returns |
w/o sales charge |
w/sales charge |
w/o sales charge |
w/sales charge |
w/o sales charge |
w/sales charge |
||||||||||||||||||||||||||||||||||||||||||||
|
Institutional |
(6.85 | )% | (19.24 | )% | N/A | (7.61 | )% | N/A | (1.06 | )% | N/A | |||||||||||||||||||||||||||||||||||||||
|
Service |
(7.00 | ) | (19.63 | ) | N/A | (8.00 | ) | N/A | (1.46 | ) | N/A | |||||||||||||||||||||||||||||||||||||||
|
Investor A |
(7.03 | ) | (19.61 | ) | (23.83 | )% | (7.99 | ) | (8.98 | )% | (1.48 | ) | (2.01 | )% | ||||||||||||||||||||||||||||||||||||
|
Investor C |
(7.39 | ) | (20.21 | ) | (21.00 | ) | (8.65 | ) | (8.65 | ) | (2.18 | ) | (2.18 | ) | ||||||||||||||||||||||||||||||||||||
|
MSCI World Energy Index |
(7.25 | ) | (16.86 | ) | N/A | (4.71 | ) | N/A | 1.46 | N/A | ||||||||||||||||||||||||||||||||||||||||
| (a) |
Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See “About Fund Performance” on page 8 for a detailed description of share classes, including any related sales charges and fees. |
N/A — Not applicable as share class and index do not have a sales charge.
Past performance is not indicative of future results.
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Expense Example
| Actual | Hypothetical(b) | |||||||||||||||||||||||||||||||||||||||
|
Beginning
Account Value
|
Ending Account Value (09/30/19) |
Expenses Paid During the Period(a) |
Beginning Account Value (04/01/19) |
Ending Account Value (09/30/19) |
Expenses Paid During the Period(a) |
Annualized Expense Ratio |
||||||||||||||||||||||||||||||||||
|
Institutional |
$ | 1,000.00 | $ | 931.50 | $ | 4.45 | $ | 1,000.00 | $ | 1,020.73 | $ | 4.66 | 0.91 | % | ||||||||||||||||||||||||||
|
Service |
1,000.00 | 930.00 | 6.49 | 1,000.00 | 1,018.61 | 6.79 | 1.33 | |||||||||||||||||||||||||||||||||
|
Investor A |
1,000.00 | 929.70 | 6.49 | 1,000.00 | 1,018.62 | 6.79 | 1.33 | |||||||||||||||||||||||||||||||||
|
Investor C |
1,000.00 | 926.10 | 9.99 | 1,000.00 | 1,014.97 | 10.45 | 2.05 | |||||||||||||||||||||||||||||||||
| (a) |
For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period shown). |
| (b) |
Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365. |
See “Disclosure of Expenses” on page 8 for further information on how expenses were calculated.
| F U N D S U M M A R Y | 5 |
| Fund Summary as of September 30, 2019 | BlackRock Energy & Resources Portfolio |
Investment Objective
BlackRock Energy & Resources Portfolio’s (the “Fund”) investment objective is to provide long-term growth of capital.
At a meeting held on July 31, 2019, the Board of Trustees of BlackRock FundsSM approved the reorganization of the Fund with and into BlackRock All-Cap Energy & Resources Portfolio (the “Acquiring Fund”). The reorganization is expected to occur during the first quarter of 2020 and is not subject to approval by each Fund’s shareholders. Effective upon the closing of the reorganization, the Acquiring Fund will change its name to BlackRock Energy Opportunities Fund.
Portfolio Management Commentary
How did the Fund perform?
For the 12-month period ended September 30, 2019, the Fund outperformed its benchmark, the MSCI World Small and Mid-Cap Energy Index.
What factors influenced performance?
Energy stocks fell sharply during the annual period, as slowing global growth led to concerns about the demand outlook for crude oil.
The Fund’s security selection contributed to relative performance, particularly in the distribution and oil services industries. Anadarko Petroleum Corp., which was taken over at a premium, was the leading contributor at the individual stock level. Overweight positions in the pipeline operators TransCanada Corp. and Williams Cos., Inc. also gained ground, as efforts to relieve bottlenecks in the Permian Basin led to increased investment in infrastructure.
An overweight position in Concho Resources, Inc. was among the largest detractors from relative performance. Concho reported stronger-than-expected earnings for the second quarter of 2019, and it announced the sale of one of its assets to fund part of a $1.5 billion stock buyback program. The company guided down on its production outlook, however, raising questions about its operational execution and contributing to a sharp decline in its stock price.
An overweight position in Encana Corp. was another key detractor from Fund performance, as the market penalized the company for the acquisition of Newfield Exploration Corp.
Describe recent portfolio activity.
The Fund reduced its weighting in the exploration and production (“E&P”) industry, and it redeployed the proceeds into the oil services and distribution subsectors. E&P stocks still made up over half of the total portfolio at the end of September.
Describe portfolio positioning at period end.
The investment adviser emphasized companies that exhibited capital discipline and/or are taking advantage of the emerging upcycle in liquified natural gas.
The Fund was overweight in the E&P and refining & marketing sub-sectors at the close of the period and was underweight in the integrated, oil services, and distribution industries.
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
|
TEN LARGEST HOLDINGS
|
||||
|
|
||||
| Security (a) |
Percent of
Net Assets |
|||
|
|
||||
|
Marathon Oil Corp. |
6% | |||
|
Noble Energy, Inc. |
6 | |||
|
Galp Energia SGPS SA |
5 | |||
|
Cheniere Energy, Inc. |
5 | |||
|
Marathon Petroleum Corp. |
5 | |||
|
TC Energy Corp. |
4 | |||
|
HollyFrontier Corp. |
4 | |||
|
Williams Cos., Inc. |
4 | |||
|
Kosmos Energy Ltd. |
4 | |||
|
Cabot Oil & Gas Corp. |
4 | |||
| (a) |
Excludes short-term investments. |
|
INDUSTRY ALLOCATION
|
||||
|
|
||||
| Industry |
Percent of
Net Assets |
|||
|
|
||||
|
Oil, Gas & Consumable Fuels |
84% | |||
|
Energy Equipment & Services |
14 | |||
|
Short-Term Securities |
2 | |||
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 rating 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 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
| Fund Summary as of September 30, 2019 (continued) | BlackRock Energy & Resources Portfolio |
TOTAL RETURN BASED ON A $10,000 INVESTMENT
| (a) |
Assuming maximum sales charges, if any, transaction costs and other operating expenses, including investment advisory fees and administration fees, if any. Institutional Shares do not have a sales charge. |
| (b) |
Under normal market conditions, the Fund invests at least 80% of its total assets in equity securities of global energy and natural resources companies and companies in associated businesses, as well as utilities (such as gas, water, cable, electrical and telecommunications utilities). |
| (c) |
An index comprised of the energy sector constituents of the MSCI World SMID Index, a free float-adjusted market capitalization weighted index designed to measure the equity market performance of the mid and small cap developed market. |
Performance Summary for the Period Ended September 30, 2019
| Average Annual Total Returns(a) | ||||||||||||||||||||||||||||||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||||||||||||||
|
6-Month
Total Returns |
w/o sales
charge |
w/sales
charge |
w/o sales
charge |
w/sales
charge |
w/o sales
charge |
w/sales
charge |
||||||||||||||||||||||||||||||||||
|
Institutional |
(13.70)% | (30.36 | )% | N/A | (15.86 | )% | N/A | (6.40 | )% | N/A | ||||||||||||||||||||||||||||||
|
Investor A |
(13.82) | (30.55 | ) | (34.20 | )% | (16.11 | ) | (17.01 | )% | (6.70 | ) | (7.20 | )% | |||||||||||||||||||||||||||
|
Investor C |
(14.14) | (31.05 | ) | (31.74 | ) | (16.71 | ) | (16.71 | ) | (7.38 | ) | (7.38 | ) | |||||||||||||||||||||||||||
|
MSCI World Small and Mid-Cap Energy Index |
(18.63) | (36.52 | ) | N/A | (16.02 | ) | N/A | (4.84 | ) | N/A | ||||||||||||||||||||||||||||||
| (a) |
Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See “About Fund Performance” on page 8 for a detailed description of share classes, including any related sales charges and fees. |
N/A — Not applicable as share class and index do not have a sales charge.
Past performance is not indicative of future results.
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Expense Example
| Actual | Hypothetical(b) | |||||||||||||||||||||||||||||||||||||||
|
Beginning
Account Value (04/01/19) |
Ending
Account Value (09/30/19) |
Expenses Paid During the Period(a) |
Beginning
Account Value (04/01/19) |
Ending Account Value (09/30/19) |
Expenses Paid During the Period(a) |
Annualized
Expense Ratio |
||||||||||||||||||||||||||||||||||
|
Institutional |
$ | 1,000.00 | $ | 863.00 | $ | 4.77 | $ | 1,000.00 | $ | 1,020.22 | $ | 5.17 | 1.01 | % | ||||||||||||||||||||||||||
|
Investor A |
1,000.00 | 861.80 | 6.23 | 1,000.00 | 1,018.65 | 6.75 | 1.32 | |||||||||||||||||||||||||||||||||
|
Investor C |
1,000.00 | 858.60 | 9.61 | 1,000.00 | 1,015.00 | 10.42 | 2.04 | |||||||||||||||||||||||||||||||||
| (a) |
For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period shown). |
| (b) |
Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365. |
See “Disclosure of Expenses” on page 8 for further information on how expenses were calculated.
| F U N D S U M M A R Y | 7 |
Institutional Shares are not subject to any sales charge. These shares bear no ongoing distribution or service fees and are available only to certain eligible investors.
Service Shares (available only in BlackRock All-Cap Energy & Resources Portfolio) are not subject to any sales charge. These shares are subject to a service fee of 0.25% per year (but no distribution fee) and are only available to certain eligible investors.
Investor A Shares are subject to a maximum initial sales charge (front-end load) of 5.25% and a service fee of 0.25% per year (but no distribution fee). Certain redemptions of these shares may be subject to a contingent deferred sales charge (“CDSC”) where no initial sales charge was paid at the time of purchase. These shares are generally available through financial intermediaries.
Investor C Shares are subject to a 1.00% CDSC if redeemed within one year of purchase. In addition, these shares are subject to a distribution fee of 0.75% per year and a service fee of 0.25% per year. These shares are generally available through financial intermediaries. Effective November 8, 2018, the Funds adopted an automatic conversion feature whereby Investor C Shares held for approximately ten years will be automatically converted into Investor A Shares.
Performance information reflects past performance and does not guarantee future results. Current performance may be lower or higher than the performance data quoted. Refer to www.blackrock.com to obtain performance data current to the most recent month-end. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Figures shown in the performance tables on the previous pages assume reinvestment of all distributions, if any, at net asset value (“NAV”) on the ex-dividend date. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Distributions paid to each class of shares will vary because of the different levels of service, distribution and transfer agency fees applicable to each class, which are deducted from the income available to be paid to shareholders.
BlackRock Advisors, LLC (the “Manager”), each Fund’s investment adviser, has contractually and/or voluntarily agreed to waive and/or reimburse a portion of each Fund’s expenses. Without such waiver and/or reimbursement, each Fund’s performance would have been lower. With respect to each Fund’s voluntary waiver, the Manager is under no obligation to waive and/or reimburse or to continue waiving and/or reimbursing its fees and such voluntary waivers may be reduced or discontinued at any time. With respect to each Fund’s contractual waiver, the Manager is under no obligation to continue waiving and/or reimbursing its fees after the applicable termination date of such agreement. See Note 6 of the Notes to Financial Statements for additional information on waivers and/or reimbursements.
Shareholders of the Funds may incur the following charges: (a) transactional expenses, such as sales charges; and (b) operating expenses, including investment advisory fees, administration fees, service and distribution fees, including 12b-1 fees, acquired fund fees and expenses, and other fund expenses. The expense examples shown on the previous pages (which are based on a hypothetical investment of $1,000 invested on April 1, 2019 and held through September 30, 2019), 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 and share class under the heading 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 examples 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 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.
| 8 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
September 30, 2019 |
BlackRock All-Cap Energy & Resources Portfolio (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
|
Common Stocks — 97.9% |
||||||||
| Energy Equipment & Services — 2.8% | ||||||||
|
Baker Hughes a GE Co. |
62,006 | $ | 1,438,539 | |||||
|
Schlumberger Ltd. |
11,460 | 391,588 | ||||||
|
|
|
|||||||
| 1,830,127 | ||||||||
| Oil, Gas & Consumable Fuels — 95.1% | ||||||||
|
BP PLC |
909,062 | 5,755,027 | ||||||
|
Cairn Energy PLC(a) |
293,412 | 691,053 | ||||||
|
Canadian Natural Resources Ltd. |
62,258 | 1,656,485 | ||||||
|
Chevron Corp. |
21,167 | 2,510,406 | ||||||
|
CNOOC Ltd. |
829,000 | 1,269,307 | ||||||
|
Concho Resources, Inc. |
17,908 | 1,215,953 | ||||||
|
ConocoPhillips |
62,990 | 3,589,170 | ||||||
|
Enbridge, Inc. |
29,000 | 1,017,851 | ||||||
|
Eni SpA |
122,410 | 1,871,015 | ||||||
|
EOG Resources, Inc. |
34,008 | 2,524,074 | ||||||
|
EQUINOR ASA |
69,640 | 1,319,134 | ||||||
|
Exxon Mobil Corp. |
87,152 | 6,153,803 | ||||||
|
Galp Energia SGPS SA |
47,683 | 717,114 | ||||||
|
Hess Corp. |
11,250 | 680,400 | ||||||
|
Kosmos Energy Ltd. |
166,802 | 1,040,844 | ||||||
|
Lundin Petroleum AB |
17,150 | 514,133 | ||||||
|
Marathon Petroleum Corp. |
39,402 | 2,393,672 | ||||||
|
Noble Energy, Inc. |
44,991 | 1,010,498 | ||||||
|
Oil Search Ltd. |
175,287 | 865,348 | ||||||
|
Petroleo Brasileiro SA — ADR |
26,150 | 378,391 | ||||||
| (a) |
Non-income producing security. |
| (b) |
Annualized 7-day yield as of period end. |
| (c) |
During the year ended September 30, 2019, investments in issuers considered to be an affiliate/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
|
Net Activity |
Shares Held at 09/30/19 |
Value at
09/30/19 |
Income |
Net Realized Gain (Loss)(a) |
Change in Unrealized Appreciation (Depreciation) |
|||||||||||||||||||||
|
BlackRock Liquidity Funds, T-Fund, Institutional Class |
1,325,434 | 83,570 | 1,409,004 | $ | 1,409,004 | $ | 27,401 | $ | — | $ | — | |||||||||||||||||
|
SL Liquidity Series, LLC, Money Market Series |
— | — | — | — | 192 | (b) | 5 | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| $ | 1,409,004 | $ | 27,593 | $ | 5 | $ | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| (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 rating 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 Categorized by Risk Exposure
For the year ended September 30, 2019, the effect of derivative financial instruments in the Statements of Operations was as follows:
| Net Realized Gain (Loss) from: |
Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total |
|||||||||||||||||||||||||||||||||||||||||||||||||
|
Forward foreign currency exchange contracts |
$— | $— | $— | $327 | $— | $— | $327 | |||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
Average Quarterly Balances of Outstanding Derivative Financial Instruments
|
Forward foreign currency exchange contracts: |
||||
|
Average amounts purchased — in USD |
$— | (a) | ||
|
|
|
| (a) |
Derivative not held at quarter-end. The amount shown in the Statements of Operations reflects the results of activity during the period. |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
| S C H E D U L E S O F I N V E S T M E N T S | 9 |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock All-Cap Energy & Resources Portfolio |
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: |
||||||||||||||||
|
Energy Equipment & Services |
$ | 1,830,127 | $ | — | $ | — | $ | 1,830,127 | ||||||||
|
Oil, Gas & Consumable Fuels |
35,701,658 | 27,204,216 | — | 62,905,874 | ||||||||||||
|
Short-Term Securities |
1,409,004 | — | — | 1,409,004 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | 38,940,789 | $ | 27,204,216 | $ | — | $ | 66,145,005 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
See notes to financial statements.
| 10 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Schedule of Investments September 30, 2019 |
BlackRock Energy & Resources Portfolio (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
|
Common Stocks — 98.3% |
||||||||
| Energy Equipment & Services — 14.5% | ||||||||
|
Baker Hughes a GE Co. |
117,045 | $ | 2,715,444 | |||||
|
Halliburton Co. |
79,648 | 1,501,365 | ||||||
|
Patterson-UTI Energy, Inc. |
227,962 | 1,949,075 | ||||||
|
Poseidon Concepts Corp.(a) |
35,081 | 4 | ||||||
|
Precision Drilling Corp.(a) |
329,121 | 377,600 | ||||||
|
TechnipFMC PLC |
132,337 | 3,194,615 | ||||||
|
Tenaris SA |
229,128 | 2,430,233 | ||||||
|
|
|
|||||||
| 12,168,336 | ||||||||
| Oil, Gas & Consumable Fuels — 83.8% | ||||||||
|
Cabot Oil & Gas Corp. |
190,197 | 3,341,761 | ||||||
|
Cairn Energy PLC(a) |
1,245,015 | 2,932,298 | ||||||
|
Cheniere Energy, Inc.(a) |
67,360 | 4,247,722 | ||||||
|
Cimarex Energy Co. |
55,235 | 2,647,966 | ||||||
|
Concho Resources, Inc. |
36,098 | 2,451,054 | ||||||
|
Devon Energy Corp. |
59,563 | 1,433,086 | ||||||
|
Diamondback Energy, Inc. |
18,116 | 1,628,810 | ||||||
|
Encana Corp. |
286,072 | 1,310,682 | ||||||
|
EOG Resources, Inc. |
38,262 | 2,839,806 | ||||||
|
EQT Corp. |
125,393 | 1,334,182 | ||||||
|
Equitrans Midstream Corp. |
84,369 | 1,227,569 | ||||||
|
Galp Energia SGPS SA |
284,879 | 4,284,352 | ||||||
|
Hess Corp. |
33,184 | 2,006,968 | ||||||
|
HollyFrontier Corp. |
64,909 | 3,481,719 | ||||||
|
Kosmos Energy Ltd. |
540,880 | 3,375,091 | ||||||
|
Longview Energy Co.
|
85,400 | 125,538 | ||||||
| Security | Shares | Value | ||||||
| Oil, Gas & Consumable Fuels (continued) | ||||||||
|
Lundin Petroleum AB |
98,240 | $ | 2,945,100 | |||||
|
Marathon Oil Corp. |
381,188 | 4,677,177 | ||||||
|
Marathon Petroleum Corp. |
63,429 | 3,853,312 | ||||||
|
Noble Energy, Inc. |
206,700 | 4,642,482 | ||||||
|
Oil Search Ltd. |
520,468 | 2,569,418 | ||||||
|
Pioneer Natural Resources Co. |
23,146 | 2,911,072 | ||||||
|
TC Energy Corp. |
69,874 | 3,618,037 | ||||||
|
Valero Energy Corp. |
38,436 | 3,276,285 | ||||||
|
Williams Cos., Inc. |
143,340 | 3,448,760 | ||||||
|
|
|
|||||||
| 70,610,247 | ||||||||
|
Total Long-Term Investments — 98.3%
|
|
82,778,583 | ||||||
|
|
|
|||||||
|
Short-Term Securities — 2.0% |
||||||||
|
BlackRock Liquidity Funds, T-Fund, Institutional Class,
|
1,726,601 | 1,726,601 | ||||||
|
|
|
|||||||
|
Total Short-Term Securities — 2.0%
|
|
1,726,601 | ||||||
|
|
|
|||||||
|
Total Investments — 100.3%
|
|
84,505,184 | ||||||
|
Liabilities in Excess of Other Assets — (0.3)% |
|
(258,572 | ) | |||||
|
|
|
|||||||
|
Net Assets — 100.0% |
$ | 84,246,612 | ||||||
|
|
|
|||||||
| (a) |
Non-income producing security. |
| (b) |
Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
| (c) |
Restricted security as to resale, excluding 144A securities. The Fund held restricted securities with a current value of $125,538, representing 0.1% of its net assets as of period end, and an original cost of $1,281,000. |
| (d) |
Annualized 7-day yield as of period end. |
| (e) |
During the year ended September 30, 2019, investments in issuers considered to be an affiliate/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
|
Net Activity |
Shares
Held at
|
Value at
09/30/19 |
Income |
Net
Realized Gain (Loss)(a) |
Change in
Unrealized Appreciation (Depreciation) |
|||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
|
BlackRock Liquidity Funds, T-Fund, Institutional Class |
1,009,593 | 717,008 | 1,726,601 | $ | 1,726,601 | $ | 42,372 | $ | — | $ | — | |||||||||||||||||
|
SL Liquidity Series, LLC, Money Market Series |
6,567,316 | (6,567,316 | ) | — | — | 572 | (b) | 211 | (101 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| $ | 1,726,601 | $ | 42,944 | $ | 211 | $ | (101 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| (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 rating 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 Categorized by Risk Exposure
For the year ended September 30, 2019, the effect of derivative financial instruments in the Statements of Operations was as follows:
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Realized Gain (Loss) from: |
Commodity
Contracts |
Credit
Contracts |
Equity
Contracts |
Foreign
Currency Exchange Contracts |
Interest
Rate
|
Other
Contracts |
Total | |||||||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Forward foreign currency exchange contracts |
|
$— | $— | $— | $(295 | ) | $— | $— | $(295 | ) | ||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||
| S C H E D U L E S O F I N V E S T M E N T S | 11 |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Energy & Resources Portfolio |
Average Quarterly Balances of Outstanding Derivative Financial Instruments
|
|
||||
|
Forward foreign currency exchange contracts: |
||||
|
Average amounts purchased — in USD |
$— | (a) | ||
| (a) |
Derivative not held at quarter-end. The amount shown in the Statements of Operations reflects the results of activity during the period. |
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. 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: |
||||||||||||||||
|
Energy Equipment & Services |
$ | 9,738,099 | $ | 2,430,237 | $ | — | $ | 12,168,336 | ||||||||
|
Oil, Gas & Consumable Fuels |
57,753,541 | 12,731,168 | 125,538 | 70,610,247 | ||||||||||||
|
Short-Term Securities |
1,726,601 | — | — | 1,726,601 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | 69,218,241 | $ | 15,161,405 | $ | 125,538 | $ | 84,505,184 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
See notes to financial statements.
| 12 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Assets and Liabilities
September 30, 2019
|
BlackRock
All-Cap Energy &
Portfolio |
BlackRock Energy & Resources Portfolio |
|||||||
|
ASSETS |
|
|||||||
|
Investments at value — unaffiliated(a) |
$ | 64,736,001 | $ | 82,778,583 | ||||
|
Investments at value — affiliated(b) |
1,409,004 | 1,726,601 | ||||||
|
Cash |
— | 25 | ||||||
|
Foreign currency at value(c) |
— | 5,654 | ||||||
|
Receivables: |
||||||||
|
Capital shares sold |
169,748 | 11,707 | ||||||
|
Dividends — affiliated |
3,521 | 4,135 | ||||||
|
Dividends — unaffiliated |
142,367 | 65,926 | ||||||
|
Securities lending income — affiliated |
— | 2 | ||||||
|
From the Manager |
2,074 | 8,525 | ||||||
|
Prepaid expenses |
19,306 | 19,592 | ||||||
|
|
|
|
|
|||||
|
Total assets |
66,482,021 | 84,620,750 | ||||||
|
|
|
|
|
|||||
|
LIABILITIES |
||||||||
|
Payables: |
||||||||
|
Investments purchased |
15,207 | — | ||||||
|
Administration fees |
2,545 | 2,988 | ||||||
|
Capital shares redeemed |
122,461 | 104,177 | ||||||
|
Investment advisory fees |
22,997 | 53,705 | ||||||
|
Trustees’ and Officer’s fees |
2,496 | 2,873 | ||||||
|
Other accrued expenses |
19,007 | 18,442 | ||||||
|
Other affiliates |
3,264 | 7,124 | ||||||
|
Printing fees |
11,156 | 16,943 | ||||||
|
Professional fees |
69,184 | 79,259 | ||||||
|
Reorganization expenses |
3,067 | 3,067 | ||||||
|
Service and distribution fees |
14,519 | 22,436 | ||||||
|
Transfer agent fees |
38,408 | 63,124 | ||||||
|
|
|
|
|
|||||
|
Total liabilities |
324,311 | 374,138 | ||||||
|
|
|
|
|
|||||
|
NET ASSETS |
$ | 66,157,710 | $ | 84,246,612 | ||||
|
|
|
|
|
|||||
|
NET ASSETS CONSIST OF |
||||||||
|
Paid-in capital |
$ | 100,383,665 | $ | 347,752,025 | ||||
|
Accumulated loss |
(34,225,955 | ) | (263,505,413 | ) | ||||
|
|
|
|
|
|||||
|
NET ASSETS |
$ | 66,157,710 | $ | 84,246,612 | ||||
|
|
|
|
|
|||||
|
(a) Investments at cost — unaffiliated |
$ | 61,522,502 | $ | 91,761,642 | ||||
|
(b) Investments at cost — affiliated |
$ | 1,409,004 | $ | 1,726,601 | ||||
|
(c) Foreign currency at cost |
— | $ | 5,660 | |||||
| F I N A N C I A L S T A T E M E N T S | 13 |
Statements of Assets and Liabilities (continued)
September 30, 2019
|
BlackRock
All-Cap Energy &
|
BlackRock
Energy & Resources Portfolio |
|||||||
|
NET ASSET VALUE |
||||||||
|
Institutional |
||||||||
|
Net assets |
$ | 23,579,134 | $ | 9,538,363 | ||||
|
|
|
|
|
|||||
|
Shares outstanding(a) |
2,441,096 | 608,171 | ||||||
|
|
|
|
|
|||||
|
Net asset value |
$ | 9.66 | $ | 15.68 | ||||
|
|
|
|
|
|||||
|
Service |
||||||||
|
Net assets |
$ | 450,716 | — | |||||
|
|
|
|
|
|||||
|
Shares outstanding(a) |
47,731 | — | ||||||
|
|
|
|
|
|||||
|
Net asset value |
$ | 9.44 | — | |||||
|
|
|
|
|
|||||
|
Investor A |
||||||||
|
Net assets |
$ | 34,573,539 | $ | 66,476,669 | ||||
|
|
|
|
|
|||||
|
Shares outstanding(a) |
3,681,332 | 4,958,102 | ||||||
|
|
|
|
|
|||||
|
Net asset value |
$ | 9.39 | $ | 13.41 | ||||
|
|
|
|
|
|||||
|
Investor C |
||||||||
|
Net assets |
$ | 7,554,321 | $ | 8,231,580 | ||||
|
|
|
|
|
|||||
|
Shares outstanding(a) |
836,494 | 880,665 | ||||||
|
|
|
|
|
|||||
|
Net asset value |
$ | 9.03 | $ | 9.35 | ||||
|
|
|
|
|
|||||
| (a) |
Unlimited number of shares authorized, $0.001 par value. |
See notes to financial statements.
| 14 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Year Ended September 30, 2019
See notes to financial statements.
| F I N A N C I A L S T A T E M E N T S | 15 |
Statements of Changes in Net Assets
| (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.
| 16 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
(For a share outstanding throughout each period)
| BlackRock All-Cap Energy & Resources Portfolio | ||||||||||||||||||||||||||||||||
| Institutional | ||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 12.34 | $ | 11.13 | $ | 11.06 | $ | 9.91 | $ | 16.26 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Net investment income(a) |
0.29 | 0.23 | 0.31 | (b) | 0.22 | 0.23 | ||||||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
(2.66 | ) | 1.30 | 0.04 | 1.17 | (6.34 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Net increase (decrease) from investment operations |
(2.37 | ) | 1.53 | 0.35 | 1.39 | (6.11 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Distributions from net investment income(c) |
(0.31 | ) | (0.32 | ) | (0.28 | ) | (0.24 | ) | (0.24 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Net asset value, end of year |
$ | 9.66 | $ | 12.34 | $ | 11.13 | $ | 11.06 | $ | 9.91 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Total Return(d) |
||||||||||||||||||||||||||||||||
|
Based on net asset value |
(19.24 | )% | 14.08 | % | 2.98 | % | 14.33 | % | (37.94 | )% | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||
|
Total expenses |
1.30 | % | 1.29 | % | 1.25 | % | 1.18 | % | 1.11 | %(e) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
0.91 | % | 0.92 | % | 0.91 | % | 0.95 | % | 0.96 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Net investment income |
2.91 | % | 1.97 | % | 2.89 | %(b) | 2.16 | % | 1.75 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 23,579 | $ | 22,255 | $ | 18,703 | $ | 25,123 | $ | 20,753 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Portfolio turnover rate |
37 | % | 37 | % | 14 | % | 66 | % | 51 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| (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 0.92%, respectively, resulting from a special dividend. |
| (c) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (d) |
Where applicable, assumes the reinvestment of distributions. |
| (e) |
Includes recoupment of past waived and/or reimbursed fees with no financial impact to the expense ratios. |
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 17 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock All-Cap Energy & Resources Portfolio (continued) | ||||||||||||||||||||||||||||||||
| Service | ||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 12.05 | $ | 10.88 | $ | 10.81 | $ | 9.65 | $ | 15.81 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Net investment income(a) |
0.23 | 0.17 | 0.25 | (b) | 0.17 | 0.17 | ||||||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
(2.59 | ) | 1.28 | 0.04 | 1.14 | (6.16 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Net increase (decrease) from investment operations |
(2.36 | ) | 1.45 | 0.29 | 1.31 | (5.99 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Distributions from net investment income(c) |
(0.25 | ) | (0.28 | ) | (0.22 | ) | (0.15 | ) | (0.17 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Net asset value, end of year |
$ | 9.44 | $ | 12.05 | $ | 10.88 | $ | 10.81 | $ | 9.65 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Total Return(d) |
||||||||||||||||||||||||||||||||
|
Based on net asset value |
(19.63 | )% | 13.63 | % | 2.58 | % | 13.77 | % | (38.17 | )% | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||
|
Total expenses |
1.57 | %(e) | 1.55 | % | 1.50 | % | 1.51 | % | 1.41 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
1.33 | % | 1.34 | % | 1.33 | % | 1.36 | % | 1.38 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Net investment income |
2.34 | % | 1.51 | % | 2.35 | %(b) | 1.67 | % | 1.33 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 451 | $ | 599 | $ | 628 | $ | 787 | $ | 1,025 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Portfolio turnover rate |
37 | % | 37 | % | 14 | % | 66 | % | 51 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| (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 0.92%, respectively, resulting from a special dividend. |
| (c) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (d) |
Where applicable, assumes the reinvestment of distributions. |
| (e) |
Includes recoupment of past waived and/or reimbursed fees. Excluding the recoupment of past waived and/or reimbursed fees, the ratios were as follows: |
| Year Ended September 30, | ||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||
|
Expense ratios |
1.55 | % | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
See notes to financial statements.
| 18 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock All-Cap Energy & Resources Portfolio (continued) | ||||||||||||||||||||||||||||||||
| Investor A | ||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 11.99 | $ | 10.83 | $ | 10.76 | $ | 9.63 | $ | 15.77 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Net investment income(a) |
0.24 | 0.17 | 0.26 | (b) | 0.17 | 0.17 | ||||||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
(2.59 | ) | 1.27 | 0.03 | 1.14 | (6.15 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Net increase (decrease) from investment operations |
(2.35 | ) | 1.44 | 0.29 | 1.31 | (5.98 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Distributions from net investment income(c) |
(0.25 | ) | (0.28 | ) | (0.22 | ) | (0.18 | ) | (0.16 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Net asset value, end of year |
$ | 9.39 | $ | 11.99 | $ | 10.83 | $ | 10.76 | $ | 9.63 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Total Return(d) |
||||||||||||||||||||||||||||||||
|
Based on net asset value |
(19.61 | )% | 13.59 | % | 2.57 | % | 13.88 | % | (38.17 | )% | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||
|
Total expenses |
1.66 | % | 1.65 | % | 1.60 | % | 1.55 | % | 1.48 | %(e) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
1.33 | % | 1.34 | % | 1.33 | % | 1.36 | % | 1.38 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Net investment income |
2.44 | % | 1.52 | % | 2.42 | %(b) | 1.72 | % | 1.33 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 34,574 | $ | 41,644 | $ | 43,765 | $ | 59,065 | $ | 51,005 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Portfolio turnover rate |
37 | % | 37 | % | 14 | % | 66 | % | 51 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| (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 0.92%, respectively, resulting from a special dividend. |
| (c) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (d) |
Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
| (e) |
Includes recoupment of past waived and/or reimbursed fees with no financial impact to the expense ratios. |
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 19 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock All-Cap Energy & Resources Portfolio (continued) | ||||||||||||||||||||||||||||||||
| Investor C | ||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 11.39 | $ | 10.30 | $ | 10.23 | $ | 9.14 | $ | 14.94 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Net investment income(a) |
0.14 | 0.09 | 0.17 | (b) | 0.09 | 0.07 | ||||||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
(2.44 | ) | 1.22 | 0.03 | 1.08 | (5.82 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Net increase (decrease) from investment operations |
(2.30 | ) | 1.31 | 0.20 | 1.17 | (5.75 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Distributions from net investment income(c) |
(0.06 | ) | (0.22 | ) | (0.13 | ) | (0.08 | ) | (0.05 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Net asset value, end of year |
$ | 9.03 | $ | 11.39 | $ | 10.30 | $ | 10.23 | $ | 9.14 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Total Return(d) |
||||||||||||||||||||||||||||||||
|
Based on net asset value |
(20.21 | )% | 12.90 | % | 1.84 | % | 12.91 | % | (38.60 | )% | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||
|
Total expenses |
2.35 | %(e) | 2.36 | % | 2.32 | % | 2.28 | %(e) | 2.18 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
2.05 | % | 2.06 | % | 2.05 | % | 2.09 | % | 2.10 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Net investment income |
1.48 | % | 0.80 | % | 1.66 | %(b) | 1.00 | % | 0.61 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 7,554 | $ | 21,878 | $ | 23,996 | $ | 31,847 | $ | 32,693 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Portfolio turnover rate |
37 | % | 37 | % | 14 | % | 66 | % | 51 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| (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 0.92%, respectively, resulting from a special dividend. |
| (c) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (d) |
Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
| (e) |
Includes recoupment of past waived and/or reimbursed fees. Excluding the recoupment of past waived and/or reimbursed fees, the ratios were as follows: |
| Year Ended September 30, | ||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||
|
Expense ratios |
2.35 | % | N/A | N/A | 2.27 | % | N/A | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
See notes to financial statements.
| 20 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Energy & Resources Portfolio | ||||||||||||||||||||||||||||||||
| Institutional | ||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 22.63 | $ | 20.42 | $ | 22.15 | $ | 19.44 | $ | 37.89 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Net investment income(a) |
0.19 | 0.06 | 0.23 | (b) | 0.07 | 0.03 | ||||||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
(7.05 | ) | 2.44 | (1.96 | ) | 2.64 | (18.48 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Net increase (decrease) from investment operations |
(6.86 | ) | 2.50 | (1.73 | ) | 2.71 | (18.45 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Distributions from net investment income(c) |
(0.09 | ) | (0.29 | ) | — | — | — | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Net asset value, end of year |
$ | 15.68 | $ | 22.63 | $ | 20.42 | $ | 22.15 | $ | 19.44 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Total Return(d) |
||||||||||||||||||||||||||||||||
|
Based on net asset value |
(30.36 | )% | 12.40 | % | (7.81 | )% | 13.94 | % | (48.69 | )% | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||
|
Total expenses |
1.24 | % | 1.08 | % | 1.04 | %(e) | 1.10 | %(e) | 1.11 | %(e) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
1.01 | % | 1.02 | % | 1.02 | % | 1.05 | % | 1.07 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Net investment income |
1.09 | % | 0.28 | % | 1.14 | %(b) | 0.35 | % | 0.12 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 9,538 | $ | 24,508 | $ | 45,734 | $ | 74,778 | $ | 65,091 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Portfolio turnover rate |
29 | % | 26 | % | 12 | % | 44 | % | 55 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| (a) |
Based on average shares outstanding. |
| (b) |
Net investment income per share and the ratio of net investment income to average net assets includes $0.16 per share and 0.90%, respectively, resulting from a special dividend. |
| (c) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (d) |
Where applicable, assumes the reinvestment of distributions. |
| (e) |
Includes recoupment of past waived and/or reimbursed fees. Excluding the recoupment of past waived and/or reimbursed fees, the ratios were as follows: |
| Year Ended September 30, | ||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||
|
Expense ratios |
N/A | N/A | 1.01 | % | 1.06 | % | 1.10 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 21 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Energy & Resources Portfolio (continued) | ||||||||||||||||||||||||||||||||
| Investor A | ||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 19.37 | $ | 17.51 | $ | 19.05 | $ | 16.77 | $ | 32.79 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Net investment income (loss)(a) |
0.12 | (0.00 | )(b) | 0.15 | (c) | 0.01 | (0.04 | ) | ||||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
(6.03 | ) | 2.09 | (1.69 | ) | 2.27 | (15.98 | ) | ||||||||||||||||||||||||
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|
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|
|
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|
|
|||||||||||||||||||||||
|
Net increase (decrease) from investment operations |
(5.91 | ) | 2.09 | (1.54 | ) | 2.28 | (16.02 | ) | ||||||||||||||||||||||||
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|||||||||||||||||||||||
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Distributions from net investment income(d) |
(0.05 | ) | (0.23 | ) | — | — | — | |||||||||||||||||||||||||
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|
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|
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|
Net asset value, end of year |
$ | 13.41 | $ | 19.37 | $ | 17.51 | $ | 19.05 | $ | 16.77 | ||||||||||||||||||||||
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|
|||||||||||||||||||||||
|
Total Return(e) |
||||||||||||||||||||||||||||||||
|
Based on net asset value |
(30.55 | )% | 12.05 | % | (8.09 | )% | 13.60 | % | (48.86 | )% | ||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||
|
Total expenses |
1.59 | % | 1.48 | % | 1.45 | % | 1.43 | %(f) | 1.39 | %(f) | ||||||||||||||||||||||
|
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|
|
|
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|
|||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
1.32 | % | 1.33 | % | 1.33 | % | 1.36 | % | 1.37 | % | ||||||||||||||||||||||
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|
|
|
|
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|
|||||||||||||||||||||||
|
Net investment income (loss) |
0.81 | % | (0.01 | )% | 0.84 | %(c) | 0.04 | % | (0.16 | )% | ||||||||||||||||||||||
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|||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 66,477 | $ | 111,263 | $ | 120,881 | $ | 165,504 | $ | 150,863 | ||||||||||||||||||||||
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|||||||||||||||||||||||
|
Portfolio turnover rate |
29 | % | 26 | % | 12 | % | 44 | % | 55 | % | ||||||||||||||||||||||
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| (a) |
Based on average shares outstanding. |
| (b) |
Amount is greater than $(0.005) per share. |
| (c) |
Net investment income per share and the ratio of net investment income to average net assets includes $0.16 per share and 0.90%, respectively, resulting from a special dividend. |
| (d) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (e) |
Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
| (f) |
Includes recoupment of past waived and/or reimbursed fees with no financial impact to the expense ratios. |
See notes to financial statements.
| 22 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Energy & Resources Portfolio (continued) | ||||||||||||||||||||||||||||||||
| Investor C | ||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 13.56 | $ | 12.31 | $ | 13.49 | $ | 11.96 | $ | 23.56 | ||||||||||||||||||||||
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|
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|
|
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|
|
|||||||||||||||||||||||
|
Net investment income (loss)(a) |
— | (0.09 | ) | 0.01 | (b) | (0.08 | ) | (0.15 | ) | |||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
(4.21 | ) | 1.46 | (1.19 | ) | 1.61 | (11.45 | ) | ||||||||||||||||||||||||
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|
|
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|
|||||||||||||||||||||||
|
Net increase (decrease) from investment operations |
(4.21 | ) | 1.37 | (1.18 | ) | 1.53 | (11.60 | ) | ||||||||||||||||||||||||
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|
|||||||||||||||||||||||
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Distributions from net investment income(c) |
— | (0.12 | ) | — | — | — | ||||||||||||||||||||||||||
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|||||||||||||||||||||||
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Net asset value, end of year |
$ | 9.35 | $ | 13.56 | $ | 12.31 | $ | 13.49 | $ | 11.96 | ||||||||||||||||||||||
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|||||||||||||||||||||||
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Total Return(d) |
||||||||||||||||||||||||||||||||
|
Based on net asset value |
(31.05 | )% | 11.26 | % | (8.75 | )% | 12.79 | % | (49.24 | )% | ||||||||||||||||||||||
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|||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||
|
Total expenses |
2.33 | % | 2.25 | % | 2.22 | %(e) | 2.22 | %(e) | 2.13 | %(e) | ||||||||||||||||||||||
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|
|||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
2.04 | % | 2.05 | % | 2.05 | % | 2.08 | % | 2.09 | % | ||||||||||||||||||||||
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|
|||||||||||||||||||||||
|
Net investment income (loss) |
(0.03 | )% | (0.74 | )% | 0.08 | %(b) | (0.68 | )% | (0.88 | )% | ||||||||||||||||||||||
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|
Supplemental Data |
||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 8,232 | $ | 20,698 | $ | 24,727 | $ | 38,086 | $ | 37,967 | ||||||||||||||||||||||
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|||||||||||||||||||||||
|
Portfolio turnover rate |
29 | % | 26 | % | 12 | % | 44 | % | 55 | % | ||||||||||||||||||||||
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| (a) |
Based on average shares outstanding. |
| (b) |
Net investment income per share and the ratio of net investment income to average net assets includes $0.16 per share and 0.90%, respectively, resulting from a special dividend. |
| (c) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (d) |
Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
| (e) |
Includes recoupment of past waived and/or reimbursed fees with no financial impact to the expense ratios. |
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 23 |
| 1. |
ORGANIZATION |
BlackRock FundsSM (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust is organized as a Massachusetts business trust. The following, each of which is a series of the Trust, are referred to herein collectively as the “Funds” or individually as a “Fund”:
| Fund Name | Herein Referred To As | Diversification Classification | ||
|
BlackRock All-Cap Energy & Resources Portfolio |
All-Cap Energy & Resources | Non-diversified | ||
|
BlackRock Energy & Resources Portfolio |
Energy & Resources | Non-diversified |
Each Fund offers multiple classes of shares. All classes of shares have identical voting, dividend, liquidation and other rights and are subject to the same terms and conditions, except that certain classes bear expenses related to the shareholder servicing and distribution of such shares. Institutional and Service Shares are sold without a sales charge and only to certain eligible investors. Investor A Shares are generally sold with an initial sales charge, and may be subject to a contingent deferred sales charge (“CDSC”) for certain redemptions where no initial sales charge was paid at the time of purchase. Investor C Shares may be subject to a 1.00% CDSC if redeemed within one year of purchase. Service, Investor A and Investor C Shares bear certain expenses related to shareholder servicing of such shares, and Investor C Shares also bear certain expenses related to the distribution of such shares. Investor A and Investor C Shares are generally available through financial intermediaries. Effective November 8, 2018, the Funds adopted an automatic conversion feature whereby Investor C Shares held for approximately ten years will be automatically converted into Investor A Shares. Each class has exclusive voting rights with respect to matters relating to its shareholder servicing and distribution expenditures (except that Investor C shareholders may vote on material changes to the Investor A Shares distribution and service plan).
| Share Class | Initial Sales Charge | CDSC | Conversion Privilege | |||||
|
Institutional and Service Shares |
No | No | None | |||||
|
Investor A Shares |
Yes | No | (a) | None | ||||
|
Investor C Shares |
No | Yes | To Investor A Shares after approximately 10 years | |||||
| (a) |
Investor A Shares may be subject to a CDSC for certain redemptions where no initial sales charge was paid at the time of purchase. |
The Funds, together with certain other registered investment companies advised by the BlackRock Advisors, LLC (the “Manager”) or its affiliates, are included in a complex of equity, multi-asset, index and money market funds referred to as the BlackRock Multi-Asset Complex.
Reorganization: At a meeting held on July 31, 2019, the Board of Trustees of the Trust approved the reorganization of Energy & Resources with and into All-Cap Energy & Resources (the “Acquiring Fund”). The reorganization is expected to occur during the first quarter of 2020 and is not subject to approval by each Fund’s shareholders. Effective upon the closing of the reorganization, the Acquiring Fund will change its name to BlackRock Energy Opportunities Fund.
| 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 executed. 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. Interest income, including amortization and accretion of premiums and discounts on debt securities, are recognized on an accrual basis. Income, expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.
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., forward foreign currency exchange contracts) 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. Doing so allows the investment 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.
| 24 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
Distributions: Distributions paid by the Funds are recorded on the ex-dividend date. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.
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 or its classes are charged to that Fund or the applicable class. 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. Expenses directly related to the Funds and other shared expenses prorated to the Funds are allocated daily to each class based on its relative net assets or other appropriate methods.
The Funds have an arrangement with their custodian whereby credits are earned on uninvested cash balances, which could be used to reduce custody fees and/or overdraft charges. The Funds 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 Board of Trustees of the Trust (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.
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. |
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 each Fund’s 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 and 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.
| • |
Investments in open-end U.S. mutual funds are valued at net asset value (“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. |
| • |
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 based on that day’s prevailing forward exchange rate for the underlying currencies. Interpolated values are derived when the settlement date of the contract is an interim date for which quotations are not available. |
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 pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.
For investments in equity or debt issued by privately held companies or funds (“Private Company” or collectively, the “Private Companies”) and other Fair Valued Investments, the fair valuation approaches that are used by the Global Valuation Committee and by third party pricing services utilize one or a combination of, but not limited to, the following inputs.
| N O T E S T O F I N A N C I A L S T A T E M E N T S | 25 |
Notes to Financial Statements (continued)
|
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 statement 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) |
| • |
Level 3 — Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Global Valuation Committee’s 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. 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.
| 4. |
SECURITIES AND OTHER INVESTMENTS |
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 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.
| 26 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
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 to the extent 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. Such losses are borne entirely by the Fund.
| 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.
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.
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, and such value may exceed the amount reflected in the Statements of Assets and Liabilities. 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.
| 6. |
INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Investment Advisory: The Trust, on behalf of the Funds, entered into an Investment Advisory Agreement with the Manager, the Funds’ investment adviser and an indirect, wholly-owned subsidiary of BlackRock, Inc. (“BlackRock”), to provide investment advisory 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 at an annual rate equal to the following percentages of the average daily value of each Fund’s net assets:
|
|
||||
| Average Daily Net Assets | Investment Advisory Fees | |||
|
|
||||
|
First $1 Billion |
0.750 | % | ||
|
$1 Billion — $2 Billion |
0.700 | |||
|
$2 Billion — $3 Billion |
0.675 | |||
|
Greater than $3 Billion |
0.650 | |||
|
|
||||
With respect to each Fund, the Manager entered into separate sub-advisory agreements with BlackRock International Limited (“BIL”), an affiliate of the Manager. The Manager pays BIL for services it provides for that portion of each Fund for which BIL acts as sub-adviser, a monthly fee that is equal to a percentage of the investment advisory fees paid by each Fund to the Manager.
Service and Distribution Fees: The Trust, on behalf of the Funds, entered into a Distribution Agreement and a Distribution and Service Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of the Manager. Pursuant to the Distribution and Service Plan and in accordance with Rule 12b-1 under the 1940 Act, each Fund pays BRIL ongoing service and distribution fees. The fees are accrued daily and paid monthly at annual rates based upon the average daily net assets of the relevant share class of each Fund as follows:
| Service | Investor A | Investor C | ||||||||||
|
|
||||||||||||
|
Service Fee |
0.25 | % | 0.25 | % | 0.25 | % | ||||||
|
Distribution Fee |
— | — | 0.75 | |||||||||
|
|
||||||||||||
BRIL and broker-dealers, pursuant to sub-agreements with BRIL, provide shareholder servicing and distribution services to the Funds. The ongoing service and/or distribution fee compensates BRIL and each broker-dealer for providing shareholder servicing and/or distribution related services to shareholders.
For the year ended September 30, 2019, the following table shows the class specific service and distribution fees borne directly by each share class of each Fund:
| Service | Investor A | Investor C | Total | |||||||||||||
|
|
||||||||||||||||
|
All-Cap Energy & Resources |
$ | 1,371 | $ | 92,746 | $ | 108,079 | $ | 202,196 | ||||||||
|
Energy & Resources |
— | 199,022 | 113,538 | 312,560 | ||||||||||||
|
|
||||||||||||||||
Administration: The Trust, on behalf of the Funds, entered into an Administration Agreement with the Manager, an indirect, wholly-owned subsidiary of BlackRock, to provide administrative services. For these services, the Manager receives an administration fee computed daily and payable monthly, based on a percentage of the average daily net assets of each Fund. The administration fee, which is shown as administration in the Statements of Operations, is paid at the annual rates below.
| N O T E S T O F I N A N C I A L S T A T E M E N T S | 27 |
Notes to Financial Statements (continued)
|
|
||||
| Average Daily Net Assets | Administration Fee | |||
|
|
||||
|
First $500 Million |
0.0425 | % | ||
|
$500 Million — $1 Billion |
0.0400 | |||
|
$1 Billion — $2 Billion |
0.0375 | |||
|
$2 Billion — $4 Billion |
0.0350 | |||
|
$4 Billion — $13 Billion |
0.0325 | |||
|
Greater than $13 Billion |
0.0300 | |||
|
|
||||
In addition, the Manager charges each of the share classes an administration fee, which is shown as administration — class specific in the Statements of Operations, at an annual rate of 0.02% of the average daily net assets of each respective class.
For the year ended September 30, 2019, the following table shows the class specific administration fees borne directly by each share class of each Fund:
| Institutional | Service | Investor A | Investor C | Total | ||||||||||||||||
|
|
||||||||||||||||||||
|
All-Cap Energy & Resources |
$4,014 | $111 | $ 7,463 | $2,178 | $13,766 | |||||||||||||||
|
Energy & Resources |
2,633 | — | 16,099 | 2,295 | 21,027 | |||||||||||||||
|
|
||||||||||||||||||||
Transfer Agent: Pursuant to written agreements, certain financial intermediaries, some of which may be affiliates, provide the Funds with sub-accounting, recordkeeping, sub-transfer agency and other administrative services with respect to servicing of underlying investor accounts. For these services, these entities receive an asset-based fee or an annual fee per shareholder account, which will vary depending on share class and/or net assets. For the year ended September 30, 2019, Energy and Resources Fund paid $1 to affiliates of BlackRock in return for these services to A Shares, which are included in transfer agent — class specific in the Statements of Operations.
The Manager maintains a call center that is responsible for providing certain shareholder services to the Funds. Shareholder services include responding to inquiries and processing purchases and sales based upon instructions from shareholders. For the year ended September 30, 2019, each Fund reimbursed the Manager the following amounts for costs incurred in running the call center, which are included in transfer agent — class specific in the Statements of Operations:
| Institutional | Service | Investor A | Investor C | Total | ||||||||||||||||
|
|
||||||||||||||||||||
|
All-Cap Energy & Resources |
$754 | $— | $ 8,524 | $1,330 | $10,608 | |||||||||||||||
|
Energy & Resources |
873 | — | 19,559 | 2,304 | 22,736 | |||||||||||||||
|
|
||||||||||||||||||||
For the year ended September 30, 2019, the following table shows the class specific transfer agent fees borne directly by each share class of each Fund:
| Institutional | Service | Investor A | Investor C | Total | ||||||||||||||||
|
|
||||||||||||||||||||
|
All-Cap Energy & Resources |
$26,994 | $717 | $ 90,419 | $19,794 | $137,924 | |||||||||||||||
|
Energy & Resources |
21,386 | — | 214,912 | 30,817 | 267,115 | |||||||||||||||
|
|
||||||||||||||||||||
Other Fees: For the year ended September 30, 2019, affiliates earned underwriting discounts, direct commissions and dealer concessions on sales of each Fund’s Investor A Shares as follows:
|
|
||||
|
All-Cap Energy & Resources |
$ | 4,500 | ||
|
Energy & Resources |
2,362 | |||
|
|
||||
For the year ended September 30, 2019, affiliates received CDSCs as follows:
| Investor A | Investor C | |||||||
|
|
||||||||
|
All-Cap Energy & Resources |
$179 | $1,487 | ||||||
|
Energy & Resources |
20 | 1,248 | ||||||
|
|
||||||||
Expense Limitations, Waivers, Reimbursements and Recoupments: 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 limitations described below will be reduced by the amount of the affiliated money market fund waiver. These amounts are included in fees waived and/or reimbursed by the Manager in the Statements of Operations. For the year ended September 30, 2019, the amounts waived were as follows:
|
|
||||
|
All-Cap Energy & Resources |
$ | 887 | ||
|
Energy & Resources |
1,369 | |||
|
|
||||
The Manager has contractually agreed to waive its investment advisory fee with respect to any portion of each Fund’s assets invested in affiliated equity and fixed-income mutual funds and affiliated exchange-traded funds that have a contractual management fee through January 31, 2020 (for Energy & Resources) and January 31, 2021 (for All-Cap Energy & Resources). The contractual agreement may be terminated upon 90 days’ notice by a majority of the Independent Trustees who are not “interested persons” of a Fund, as defined in the 1940 Act, or by a vote of a majority of the outstanding voting securities of a Fund. For the year ended September 30, 2019, there were no fees waived and/or reimbursed by the Manager pursuant to this agreement.
With respect to each Fund, the Manager 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
| 28 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
business (“expense limitation”). The current expense limitations as a percentage of average daily net assets are as follows:
| All-Cap Energy & Resources | Energy & Resources | |||||||||||||||||||||||||||||||||
| Contractual (a) | Contractual (a) | Voluntary (b) | ||||||||||||||||||||||||||||||||
|
Institutional |
0.91 | % | 1.07 | % | 1.01 | % | ||||||||||||||||||||||||||||
|
Service |
1.32 | N/A | N/A | |||||||||||||||||||||||||||||||
|
Investor A |
1.32 | 1.38 | 1.32 | |||||||||||||||||||||||||||||||
|
Investor C |
2.04 | 2.10 | 2.04 | |||||||||||||||||||||||||||||||
| (a) |
The Manager has agreed not to reduce or discontinue this contractual waiver or reimbursement prior to January 31, 2021 for All-Cap Energy & Resources and January 31, 2020 for Energy & Resources unless approved by the Board, including a majority of the Independent Trustees or by a vote of a majority of the outstanding voting securities of the Fund. |
| (b) |
The voluntary waiver or reimbursement may be reduced or discontinued at any time without notice. |
Prior to August 1, 2019, with respect to All-Cap Energy & Resources, the expense limitations as a percentage of average daily net assets were as follows:
|
|
||||||||
| All-Cap Energy & Resources | ||||||||
|
|
||||||||
| Contractual | Voluntary | |||||||
|
Institutional |
0.96 | % | 0.91 | % | ||||
|
Service |
1.38 | 1.33 | ||||||
|
Investor A |
1.38 | 1.33 | ||||||
|
Investor C |
2.10 | 2.05 | ||||||
|
|
||||||||
These amounts are included in fees waived and/or reimbursed by the Manager in the Statements of Operations. For the year ended September 30, 2019, the amounts waived and/or reimbursed were as follows:
|
|
||||
|
All-Cap Energy & Resources |
$ | 159,138 | ||
|
Energy & Resources |
42,700 | |||
|
|
||||
These amounts waived and/or reimbursed are included in fees waived and/or reimbursed by the Manager, administration fees waived — class specific, transfer agent fees waived and/or reimbursed — class specific, respectively, in the Statements of Operations. For the year ended September 30, 2019, class specific expense waivers and/or reimbursements are as follows:
| Administration Fees Waived | Institutional | Service | Investor A | Investor C | Total | |||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
|
All-Cap Energy & Resources |
$4,014 | $10 | $ 7,330 | $2,030 | $13,384 | |||||||||||||||||||||||||||||||
|
Energy & Resources |
2,633 | — | 16,099 | 2,295 | 21,027 | |||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
|
Transfer Agent Fees Waived and/or Reimbursed |
Institutional | Service | Investor A | Investor C | Total | |||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
|
All-Cap Energy & Resources |
$26,994 | — | $ 27,274 | $4,157 | $ 58,425 | |||||||||||||||||||||||||||||||
|
Energy & Resources |
20,865 | — | 161,910 | 25,828 | 208,603 | |||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
The Funds have incurred expenses in connection with the realignment and consolidation of the boards of trustees of certain BlackRock-advised funds. The Manager has voluntarily agreed to reimburse the 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 September 30, 2019, the amounts reimbursed were as follows:
|
|
||||
|
All-Cap Energy & Resources |
$ | 2,354 | ||
|
Energy & Resources |
4,456 | |||
|
|
||||
With respect to the contractual expense limitation, if during a Fund’s fiscal year the operating expenses of a share class, that at any time during the prior two fiscal years received a waiver and/or reimbursement from the Manager, are less than the current expense limitation for that share class, the Manager is entitled to be reimbursed by such share class up to the lesser of: (a) the amount of fees waived and/or expenses reimbursed during those prior two fiscal years under the agreement and (b) an amount not to exceed either the current expense limitation of that share class or the expense limitation of the share class in effect at the time that the share class received the applicable waiver and/or reimbursement, provided that:
(1) the Fund, of which the share class is a part, has more than $50 million in assets for the fiscal year, and
(2) the Manager or an affiliate continues to serve as the Fund’s investment adviser or administrator.
This repayment applies only to the contractual expense limitation on net expenses and does not apply to the contractual investment advisory fee waiver described above or any voluntary waivers that may be in effect from time to time.
For the year ended September 30, 2019, the Manager recouped the following fund level and class specific waivers and/or reimbursements previously recorded by All-Cap Energy & Resources:
| Institutional | Service | Investor A | Investor C | Total | ||||||||||||||||
|
|
||||||||||||||||||||
|
All-Cap Energy & Resources |
$— | $128 | $— | $28 | $156 | |||||||||||||||
|
|
||||||||||||||||||||
| N O T E S T O F I N A N C I A L S T A T E M E N T S | 29 |
Notes to Financial Statements (continued)
On September 30, 2019, the fund level and class specific waivers and/or reimbursement subject to possible future recoupment under the expense limitation agreement are as follows:
| Expiring September 30, | ||||||||
|
|
||||||||
| 2020 | 2021 | |||||||
|
|
||||||||
|
All-Cap Energy & Resources |
||||||||
|
Fund Level |
$119,328 | $130,078 | ||||||
|
Institutional |
36,805 | 31,008 | ||||||
|
Service |
101 | 10 | ||||||
|
Investor A |
52,873 | 34,604 | ||||||
|
Investor C |
23,763 | 6,188 | ||||||
|
Energy & Resources |
||||||||
|
Institutional |
— | 20,970 | ||||||
|
Investor A |
96,778 | 162,472 | ||||||
|
Investor C |
30,330 | 25,908 | ||||||
|
|
||||||||
The following fund level and class specific waivers and/or reimbursements previously recorded by the Funds, which were subject to recoupment by the Manager, expired on September 30, 2019:
|
|
||||
|
All-Cap Energy & Resources |
|
|||
|
Fund Level |
$110,869 | |||
|
Institutional |
41,594 | |||
|
Service |
— | |||
|
Investor A |
59,801 | |||
|
Investor C |
31,258 | |||
|
Energy & Resources |
||||
|
Investor A |
91,305 | |||
|
Investor C |
32,957 | |||
|
|
||||
Securities Lending: The U.S. Securities and Exchange Commission (“SEC”) has issued an exemptive order which permits BlackRock Investment Management, LLC (“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 the current securities lending agreement for Energy & Resources, the Fund retains 73.5% 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 BlackRock Multi-Asset Complex in a calendar year exceeds a specified threshold, Energy & Resources, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 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.
Prior to January 1, 2019, Energy & Resources retained 71.5% of securities lending income (which excluded collateral investment expenses) and the amount retained could 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 a complex of open-end funds referred to as the Equity-Liquidity Complex in a calendar year exceeded a specified threshold, the Fund would retain for the remainder of that calendar year 75% of securities lending income (which excluded collateral investment expenses), and the amount retained could never be less than 65% of the total of securities lending income plus the collateral investment expenses.
Pursuant to the current securities lending agreement for All-Cap Energy & Resources, the Fund retains 82% 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 BlackRock Multi-Asset Complex in a calendar year exceeds a specified threshold, All-Cap Energy & Resources, 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 (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.
Prior to January 1, 2019, All-Cap Energy & Resources retained 80% of securities lending income (which excluded collateral investment expenses) and the amount retained could 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 a complex of open-end funds referred to as the Equity-Liquidity Complex in a calendar year exceeded a specified threshold, the Fund would retain for the remainder of that calendar year 85% of securities lending income (which excluded collateral investment expenses), and the amount
| 30 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
retained could 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 September 30, 2019, each Fund paid BIM the following amounts for securities lending agent services:
|
|
||||
|
All-Cap Energy & Resources |
$ | 35 | ||
|
Energy & Resources |
172 | |||
|
|
||||
Trustees and Officers: Certain trustees and/or officers of the Trusts are trustees and/or officers of BlackRock or its affiliates. The Funds reimburse the Manager for a portion of the compensation paid to the Funds’ Chief Compliance Officer, which is included in Trustees and Officer in the Statements of Operations.
| 7. |
PURCHASES AND SALES |
For the year ended September 30, 2019, purchases and sales of investments, excluding short-term securities, were as follows:
|
All-Cap
Energy &
|
Energy &
Resources |
|||||||
|
|
||||||||
|
Purchases |
$ | 25,547,710 | $ | 33,000,515 | ||||
|
Sales |
29,058,684 | 62,903,986 | ||||||
|
|
||||||||
| 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 September 30, 2019. 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 September 30, 2019, 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.
The tax character of distributions paid was as follows:
|
All-Cap
Energy & Resources |
Energy &
Resources |
|||||||||||
|
|
||||||||||||
|
Ordinary income |
09/30/19 | $ | 1,578,645 | $ | 322,577 | |||||||
| 09/30/18 | 2,104,448 | 2,301,141 | ||||||||||
|
|
||||||||||||
As of period end, the tax components of accumulated net loss were as follows:
|
All-Cap
Energy &
|
Energy &
Resources |
|||||||
|
|
||||||||
|
Undistributed ordinary income |
$ | 1,429,996 | $ | 792,723 | ||||
|
Non-expiring capital loss carryforwards(a) |
(35,127,564 | ) | (251,137,591 | ) | ||||
|
Net unrealized losses(b) |
(528,387 | ) | (13,160,545 | ) | ||||
|
|
|
|
|
|||||
| $ | (34,225,955 | ) | $ | (263,505,413 | ) | |||
|
|
|
|
|
|||||
| (a) |
Amounts available to offset future realized capital gains. |
| (b) |
The differences between book-basis and tax-basis net unrealized losses were attributable primarily to the tax deferral of losses on wash sales and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies. |
| N O T E S T O F I N A N C I A L S T A T E M E N T S | 31 |
Notes to Financial Statements (continued)
As of September 30, 2019, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:
|
|
||||||||
|
All-Cap Energy & Resources |
Energy & Resources |
|||||||
|
|
||||||||
|
Tax cost |
$ | 66,673,003 | $ | 97,665,325 | ||||
|
|
|
|
|
|||||
|
Gross unrealized appreciation |
$ | 3,299,785 | $ | 8,624,359 | ||||
|
Gross unrealized depreciation |
(3,827,783 | ) | (21,784,500 | ) | ||||
|
|
|
|
|
|||||
|
Net unrealized depreciation |
$ | (527,998 | ) | $ | (13,160,141 | ) | ||
|
|
|
|
|
|||||
| 9. |
BANK BORROWINGS |
The Trust, on behalf of the Funds, 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 2020 unless extended or renewed. Prior to April 18, 2019, 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 September 30, 2019, the Funds did not borrow under the credit agreement.
| 10. |
PRINCIPAL RISKS |
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.
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. An illiquid investment is any investment that a Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.AFund may experience difficulty in selling illiquid investments in a timely manner at the price that it believes 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.
Concentration Risk: As of period end, All-Cap Energy & Resources and Energy & Resources invested a significant portion of their assets in securities in the energy sector. Changes in economic conditions affecting such sector would have a greater impact on All-Cap Energy & Resources and Energy & Resources and could affect the value, income and/or liquidity of positions in such securities.
| 32 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
| 11. |
CAPITAL SHARE TRANSACTIONS |
Transactions in capital shares for each class were as follows:
|
|
||||||||||||||||||||||||||||||||||
| Year Ended 09/30/19 | Year Ended 09/30/18 | |||||||||||||||||||||||||||||||||
| All-Cap Energy & Resources | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||
|
Institutional |
||||||||||||||||||||||||||||||||||
|
Shares sold |
2,483,977 | $ | 24,371,687 | 1,123,324 | $ | 13,418,105 | ||||||||||||||||||||||||||||
|
Shares issued in reinvestment of distributions |
49,857 | 489,099 | 43,017 | 477,056 | ||||||||||||||||||||||||||||||
|
Shares redeemed |
(1,895,756 | ) | (19,174,792 | ) | (1,043,928 | ) | (12,186,601 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Net increase |
638,078 | $ | 5,685,994 | 122,413 | $ | 1,708,560 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Service |
||||||||||||||||||||||||||||||||||
|
Shares sold |
24,220 | $ | 243,144 | 1,313 | $ | 15,222 | ||||||||||||||||||||||||||||
|
Shares issued in reinvestment of distributions |
1,310 | 12,604 | 1,408 | 15,288 | ||||||||||||||||||||||||||||||
|
Shares redeemed |
(27,520 | ) | (270,216 | ) | (10,737 | ) | (122,612 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Net decrease |
(1,990 | ) | $ | (14,468 | ) | (8,016 | ) | $ | (92,102 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Investor A |
||||||||||||||||||||||||||||||||||
|
Shares issued from conversion(a) |
— | $ | — | 2,306 | $ | 26,086 | ||||||||||||||||||||||||||||
|
Shares sold and automatic conversion of shares |
1,317,090 | 13,255,143 | 538,501 | 6,103,310 | ||||||||||||||||||||||||||||||
|
Shares issued in reinvestment distributions |
102,248 | 978,518 | 101,381 | 1,095,931 | ||||||||||||||||||||||||||||||
|
Shares redeemed |
(1,210,425 | ) | (11,796,567 | ) | (1,211,899 | ) | (13,767,989 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Net increase (decrease) |
208,913 | $ | 2,437,094 | (569,711 | ) | $ | (6,542,662 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Investor B |
||||||||||||||||||||||||||||||||||
|
Shares converted(a) |
— | $ | — | (2,317 | ) | $ | (26,086 | ) | ||||||||||||||||||||||||||
|
Shares redeemed and automatic conversion of shares |
— | — | (209 | ) | (2,227 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Net decrease |
— | $ | — | (2,526 | ) | $ | (28,313 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Investor C |
||||||||||||||||||||||||||||||||||
|
Shares sold |
57,281 | $ | 536,851 | 131,415 | $ | 1,424,430 | ||||||||||||||||||||||||||||
|
Shares issued in reinvestment of distributions |
7,437 | 68,863 | 45,312 | 467,616 | ||||||||||||||||||||||||||||||
|
Shares redeemed |
(1,149,546 | ) | (11,202,214 | ) | (584,248 | ) | (6,251,164 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Net decrease |
(1,084,828 | ) | $ | (10,596,500 | ) | (407,521 | ) | $ | (4,359,118 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Total Net Decrease |
(239,827 | ) | $ | (2,487,880 | ) | (865,361 | ) | $ | (9,313,635 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| N O T E S T O F I N A N C I A L S T A T E M E N T S | 33 |
Notes to Financial Statements (continued)
|
|
||||||||||||||||||||||||||||
|
Year Ended 09/30/19 |
Year Ended 09/30/18 |
|||||||||||||||||||||||||||
| Energy & Resources | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
|
Institutional |
||||||||||||||||||||||||||||
|
Shares sold |
881,431 | $ | 15,164,634 | 457,282 | $ | 9,910,528 | ||||||||||||||||||||||
|
Shares issued in reinvestment of distributions |
3,896 | 66,815 | 16,417 | 336,886 | ||||||||||||||||||||||||
|
Shares redeemed |
(1,359,961 | ) | (25,052,547 | ) | (1,630,575 | ) | (33,771,364 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Net decrease |
(474,634 | ) | $ | (9,821,098 | ) | (1,156,876 | ) | $ | (23,523,950 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Investor A |
||||||||||||||||||||||||||||
|
Shares issued from conversion(a) |
— | $ | — | 990 | $ | 18,290 | ||||||||||||||||||||||
|
Shares sold and automatic conversion of shares |
1,202,118 | 18,417,117 | 1,235,552 | 22,220,151 | ||||||||||||||||||||||||
|
Shares issued in reinvestment of distributions |
16,953 | 249,217 | 82,922 | 1,460,289 | ||||||||||||||||||||||||
|
Shares redeemed |
(2,004,156 | ) | (30,819,911 | ) | (2,480,220 | ) | (45,278,199 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Net decrease |
(785,085 | ) | $ | (12,153,577 | ) | (1,160,756 | ) | $ | (21,579,469 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Investor B |
||||||||||||||||||||||||||||
|
Shares converted(a) |
— | $ | — | (1,381 | ) | $ | (18,290 | ) | ||||||||||||||||||||
|
Shares redeemed and automatic conversion of shares |
— | — | (164 | ) | (2,126 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Net decrease |
— | $ | — | (1,545 | ) | $ | (20,416 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Investor C |
||||||||||||||||||||||||||||
|
Shares sold |
72,128 | $ | 732,393 | 79,433 | $ | 1,007,891 | ||||||||||||||||||||||
|
Shares issued in reinvestment of distributions |
— | — | 18,621 | 230,908 | ||||||||||||||||||||||||
|
Shares redeemed |
(717,676 | ) | (7,768,897 | ) | (580,492 | ) | (7,369,595 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Net decrease |
(645,548 | ) | $ | (7,036,504 | ) | (482,438 | ) | $ | (6,130,796 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Total Net Decrease |
(1,905,267 | ) | $ | (29,011,179 | ) | (2,801,615 | ) | $ | (51,254,631 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| (a) |
On December 27, 2017, the Funds’ Investor B Shares converted to Investor A Shares. |
| 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 September 30, 2018 were classified as follows:
| Share Class |
Net
Investment Income |
|||
|
|
||||
|
All-Cap Energy & Resources |
||||
|
Institutional |
$ | 495,032 | ||
|
Service |
15,288 | |||
|
Investor A |
1,116,732 | |||
|
Investor C |
477,396 | |||
|
Energy & Resources |
||||
|
Institutional |
$ | 576,362 | ||
|
Investor A |
1,490,046 | |||
|
Investor C |
234,733 | |||
|
|
||||
Undistributed (distributions in excess of) net investment income for All-Cap Energy & Resources and Energy & Resources as of September 30, 2018 were $1,201,797 and $(463,759).
| 13. |
SUBSEQUENT EVENTS |
Management’s evaluation of the impact of all subsequent events on the Funds’ financial statements was completed through the date the financial statements were issued and the following item was noted:
On November 13, 2019, the Board approved a change in the fiscal year-end of All-Cap Energy & Resources, effective as May 31, 2020, from September 30 to May 31.
| 34 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Report of Independent Registered Public Accounting Firm
To the Shareholders of BlackRock All-Cap Energy & Resources Portfolio and BlackRock Energy & Resources Portfolio and the Board of Trustees of BlackRock FundsSM:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statements of assets and liabilities of BlackRock All-Cap Energy & Resources Portfolio and BlackRock Energy & Resources Portfolio of BlackRock FundsSM (the “Funds”), including the schedules of investments, as of September 30, 2019, the related statements of operations 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 September 30, 2019, and the results of their operations 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 audit 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 September 30, 2019, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
Deloitte & Touche LLP
Boston, Massachusetts
November 20, 2019
We have served as the auditor of one or more BlackRock investment companies since 1992.
Important Tax Information (unaudited)
During the fiscal year ended September 30, 2019, the following information is provided with respect to the ordinary income distributions paid by the Funds:
| Payable Date |
Qualified Dividend Income for Individuals(a) |
Distributions Qualifying for the Dividend Received Deduction for Corporations(a) |
||||||
|
All-Cap Energy & Resources Portfolio |
12/07/18 | 100% | 100% | |||||
|
Energy & Resources Portfolio |
12/07/18 | 100 | 100 | |||||
| (a) |
The Funds hereby designate the percentage indicated above or the maximum allowable by law. |
| R E P O R T O F I N D E P E N D E N T R E G I S T E R E D P U B L I C A C C O U N T I N G F I R M / I M P O R T A N T T A X I N F O R M A T I O N | 35 |
Disclosure of Investment Advisory Agreement and Sub-Advisory Agreements
The Board of Trustees (the “Board,” the members of which are referred to as “Board Members”) of BlackRock Funds (the “Trust”) met in person on April 17, 2019 (the “April Meeting”) and May 14-15, 2019 (the “May Meeting”) to consider the approval of the investment advisory agreement (the “Advisory Agreement”) between the Trust, on behalf of BlackRock All-Cap Energy & Resources Portfolio (“All-Cap Energy & Resources Portfolio”) and BlackRock Energy & Resources Portfolio (“Energy & Resources Portfolio”) (each a “Fund” and collectively, the “Funds”), each a series of the Trust, and BlackRock Advisors, LLC (the “Manager”), the Trust’s investment advisor. The Board also considered the approval of the sub-advisory agreement between the Manager and BlackRock International Limited (the “Sub-Advisor”) with respect to All-Cap Energy & Resources Portfolio (the “All-Cap Energy & Resources Portfolio Sub-Advisory Agreement”) and the sub-advisory agreement between the Manager and the Sub-Advisor with respect to Energy & Resources Portfolio (the “Energy & Resources Portfolio Sub-Advisory Agreement” and, together with the All-Cap Energy & Resources Portfolio Sub-Advisory Agreement, the “Sub-Advisory Agreements”). The Manager and the Sub-Advisor are referred to herein as “BlackRock.” The Advisory Agreement and the Sub-Advisory Agreements are referred to herein as the “Agreements.”
Activities and Composition of the Board
On the date of the May Meeting, the Board consisted of fifteen individuals, thirteen of whom were not “interested persons” of the Trust 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 the Trust 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 Ad Hoc Topics Committee, each of which is chaired by an Independent Board Member and composed of Independent Board Members (except for the Ad Hoc Topics Committee, which also has one interested Board Member).
The Agreements
Consistent with the requirements of the 1940 Act, the Board considers the continuation of the Agreements on an annual basis. The Board has four quarterly meetings per year, each typically extending for two days, and additional in-person and telephonic meetings throughout the year, as needed. While the Board also has a fifth one-day meeting to consider specific information surrounding the renewal of the Agreements, the Board’s consideration entails a year-long deliberative process whereby the Board and its committees assess BlackRock’s services to the Funds. In particular, the Board assessed, among other things, the nature, extent and quality of the services provided to the Funds by BlackRock, BlackRock’s personnel and affiliates, including (as applicable): investment management; accounting, administrative and shareholder services; oversight of each Funds’ service providers; risk management and oversight; legal and compliance services; and ability to meet applicable legal and regulatory requirements. Throughout the year, including during the contract renewal process, the Independent Board Members were advised by independent legal counsel, and met with independent legal counsel in various executive sessions outside of the presence of management.
During the year, the Board, acting directly and through its committees, considers information that is relevant to its annual consideration of the renewal of the Agreements, including the services and support provided by BlackRock to the Funds and their shareholders. BlackRock also furnished additional information to the Board in response to specific questions from the Board. This additional information is discussed further below in the section titled “Board Considerations in Approving the Agreements.” Among the matters the Board considered were: (a) investment performance for one-year, three-year, five-year, ten-year, and/or since inception periods, as applicable, against peer funds, applicable benchmark, and performance metrics, as applicable, as well as senior management’s and portfolio managers’ analyses of the reasons for any over-performance or under-performance relative to its peers, benchmarks, and other performance metrics, as applicable; (b) fees, including advisory, administration, if applicable, and other amounts paid to BlackRock and its affiliates by the Funds for services; (c) Fund operating expenses and how BlackRock allocates expenses to the Funds; (d) the resources devoted to, risk oversight of, and compliance reports relating to, implementation of each Fund’s investment objective, policies and restrictions, and meeting regulatory requirements; (e) BlackRock and the Trust’s adherence to applicable compliance policies and procedures; (f) the nature, character and scope of non-investment management services provided by BlackRock and its affiliates and the estimated cost of such services; (g) BlackRock’s and other service providers’ internal controls and risk and compliance oversight mechanisms; (h) BlackRock’s implementation of the proxy voting policies approved by the Board; (i) the use of brokerage commissions and execution quality of portfolio transactions; (j) BlackRock’s implementation of the Trust’s valuation and liquidity procedures; (k) an analysis of management fees for products with similar investment mandates across the open-end fund, exchange-traded fund (“ETF”), closed-end fund, sub-advised mutual fund, separately managed account, collective investment trust, and institutional separate account product channels, as applicable, and the similarities and differences between these products and the services provided as compared to the Funds; (l) BlackRock’s compensation methodology for its investment professionals and the incentives and accountability it creates, along with investment professionals’ investments in the fund(s) they manage; and (m) periodic updates on BlackRock’s business.
Board Considerations in Approving the Agreements
The Approval Process: Prior to the April Meeting, the Board requested and received materials specifically relating to the Agreements. The Independent Board Members are continuously engaged in a process with their independent legal counsel and BlackRock to review the nature and scope of the information provided to better assist its deliberations. The materials provided in connection with the April Meeting included, among other things: (a) information independently compiled and prepared by Broadridge Financial Solutions, Inc. (“Broadridge”), based on either a Lipper classification or Morningstar category, regarding each Fund’s fees and expenses as compared with a peer group of funds as determined by Broadridge (“Expense Peers”) and the investment performance of each Fund as compared with a peer group of funds (“Performance Peers”) and other metrics, as applicable; (b) information on the composition of the Expense Peers and Performance Peers, and a description of Broadridge’s methodology; (c) information on the estimated profits realized by BlackRock and its affiliates pursuant to the Agreements and a discussion of fall-out benefits to BlackRock and its affiliates; (d) a general analysis provided by BlackRock concerning investment management fees received in connection with other types of investment products, such as institutional accounts, sub-advised mutual funds, ETFs, closed-end funds, open-end funds, and separately managed accounts under similar investment mandates, as well as the performance of such other products, as applicable; (e) review of non-management fees; (f) the existence, impact and sharing of potential economies of scale, if any, with the Funds; (g) a summary of aggregate amounts paid by each Fund to BlackRock; (h) sales and redemption data regarding each Fund’s shares; and (i) various additional information requested by the Board as appropriate regarding BlackRock’s and the Funds’ operations.
| 36 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Disclosure of Investment Advisory Agreement and Sub-Advisory Agreements (continued)
At the April Meeting, the Board reviewed materials relating to its consideration of the Agreements. As a result of the discussions that occurred during the April Meeting, and as a culmination of the Board’s year-long deliberative process, the Board presented BlackRock with questions and requests for additional information. BlackRock responded to these requests with additional written information in advance of the May Meeting.
At the May Meeting, the Board concluded its assessment of, among other things: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of each Fund as compared with 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 the Funds; (d) each Fund’s fees and expenses compared to Expense Peers; (e) the sharing of potential economies of scale; (f) fall-out benefits to BlackRock and its affiliates as a result of BlackRock’s relationship with the Funds; and (g) other factors deemed relevant by the Board Members.
The Board also considered other matters it deemed important to the approval process, such as other payments made to BlackRock or its affiliates relating to securities lending and cash management, and BlackRock’s services related to the valuation and pricing of the portfolio holdings of each Fund. 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 Provided by BlackRock: The Board, including the Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of each Fund. Throughout the year, the Board compared each Fund’s performance to the performance of a comparable group of mutual funds, 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. The Board also reviewed the materials provided by each Fund’s portfolio management team discussing the Fund’s performance and the Fund’s investment objective, 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 engaged in a review of 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.
In addition to investment advisory services, the Board considered the nature and quality of the administrative and other non-investment advisory services provided to each Fund. BlackRock and its affiliates provide the Funds with certain administrative, shareholder and other services (in addition to any such services provided to the Funds by third parties) and officers and other personnel as are necessary for the operations of the Funds. In particular, BlackRock and its affiliates provide the Funds 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 or managing administrative functions necessary for the operation of the Funds, 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 reviewed 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 the Funds and BlackRock: The Board, including the Independent Board Members, also reviewed and considered the performance history of each Fund. In preparation for the April Meeting, the Board was provided with reports independently prepared by Broadridge, which included a comprehensive analysis of each Fund’s performance as of December 31, 2018. 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 its review, the Board received and reviewed information regarding the investment performance of each Fund as compared to its Performance Peers. The Board and its Performance Oversight Committee regularly review, and meet with Fund management to discuss, the performance of each Fund throughout the year.
In evaluating performance, the Board focused particular attention on funds with less favorable performance records. The Board also noted that while it found the data provided by Broadridge generally useful, it recognized the limitations of such data, including in particular, that notable differences may exist between a fund and the Performance Peer funds (for example, the investment objective(s) and investment strategies). Further, 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. The Board also acknowledged that long-term performance could be impacted by even one period of significant outperformance or underperformance, and that a single investment theme could have the ability to affect long-term performance disproportionately.
The Board noted that for the one-, three- and five-year periods reported, the All-Cap Energy & Resources Portfolio ranked in the first, first and second quartiles, respectively, against its Performance Peers.
The Board noted that for each of the one-, three- and five-year periods reported, the Energy & Resources Portfolio ranked in the third quartile, against its Performance Peers. The Board and BlackRock reviewed the Fund’s underperformance during the applicable periods. The Board was informed that, among other things, the Fund’s sub-sector positioning was the key driver of underperformance during the periods. In addition, the Board was informed that the Fund’s underweight allocation to the distribution sub-sector, coupled with a few negative stock specific announcements, drove underperformance over the one-year period. The Board and BlackRock discussed BlackRock’s strategy for improving the Fund’s investment performance. Discussions covered topics such as performance attribution, the Fund’s investment personnel, and the resources appropriate to support the Fund’s investment processes.
| D I S C L O S U R E O F I N V E S T M E N T A D V I S O R Y A G R E E M E N T A N D S U B - A D V I S O R Y A G R E E M E N T S | 37 |
Disclosure of Investment Advisory Agreement and Sub-Advisory Agreements (continued)
C. Consideration of the Advisory/Management Fees and the Estimated Cost of the Services and Estimated Profits Realized by BlackRock and its Affiliates from their Relationship with the Funds: The Board, including the Independent Board Members, reviewed each Fund’s contractual management fee rate compared with those of its Expense Peers. 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 compared each Fund’s total expense ratio, as well as its actual 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).
The Board received and reviewed statements relating to BlackRock’s financial condition. The Board reviewed BlackRock’s profitability methodology and was also provided with an estimated profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to each Fund. The Board reviewed BlackRock’s estimated profitability with respect to each Fund and other funds the Board currently oversees for the year ended December 31, 2018 compared to available aggregate estimated profitability data provided for the prior two years. The Board reviewed BlackRock’s estimated profitability with respect to certain other U.S. fund complexes managed by the Manager and/or its affiliates. The Board reviewed BlackRock’s assumptions and methodology of allocating expenses in the estimated profitability analysis, noting 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. The Board thus recognized that calculating and comparing profitability at individual fund levels is difficult.
The Board noted that, in general, individual fund or product line profitability of other advisors is not publicly available. The Board reviewed BlackRock’s overall operating margin, in general, compared to that of certain other publicly-traded asset management firms. The Board 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 provided to the Funds by BlackRock, and BlackRock’s and its affiliates’ estimated profits relating to the management of the Funds and the other funds advised by BlackRock and its affiliates. As part of its analysis, the Board reviewed BlackRock’s methodology in allocating its costs of managing each Fund, to each respective 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 Agreements and to continue to provide the high quality of services that is expected by the Board. The Board further considered factors including but not limited to BlackRock’s commitment of time, assumption of risk, and liability profile in servicing the Funds, including in contrast to what is required of BlackRock with respect to other products with similar investment mandates across the open-end fund, ETF, 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 All-Cap Energy & Resources 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 Fund’s Expense Peers. The Board also noted that the Fund has an advisory fee arrangement that includes breakpoints that adjust the fee rate downward as the size of the Fund increases above certain contractually specified levels. The Board noted that if the size of the Fund were to decrease, the Fund could lose the benefit of one or more breakpoints. The Board further noted that BlackRock and the Board have contractually agreed to a cap on the Fund’s total expenses as a percentage of the Fund’s average daily net assets on a class-by-class basis. In addition, the Board noted that BlackRock has voluntarily agreed to a cap to further limit the Fund’s total expenses as a percentage of the Fund’s average daily net assets on a class-by-class basis. After discussions between the Board, including the Independent Board Members, and BlackRock, the Board and BlackRock agreed to a continuation of the voluntary expense cap.
The Board noted that the Energy & Resources Portfolio’s contractual management fee rate ranked in the first quartile, and that the actual management fee rate and total expense ratio ranked in the second and first quartiles, respectively, relative to the Fund’s Expense Peers. The Board also noted that the Fund has an advisory fee arrangement that includes breakpoints that adjust the fee rate downward as the size of the Fund increases above certain contractually specified levels. The Board noted that if the size of the Fund were to decrease, the Fund could lose the benefit of one or more breakpoints. The Board further noted that BlackRock and the Board have contractually agreed to a cap on the Fund’s total expenses as a percentage of the Fund’s average daily net assets on a class-by-class basis. In addition, the Board noted that BlackRock and the Board have voluntarily agreed to a cap to further limit the Fund’s total expenses as a percentage of the Fund’s average daily net assets on a class-by-class basis. In addition, the Board noted that BlackRock and the Board had previously agreed to a lower voluntary expense cap on the Fund, on a class-by-class basis. After discussions between the Board, including the Independent Board Members, and BlackRock, the Board and BlackRock agreed to a continuation of the voluntary cap.
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 the Funds 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 the Funds benefit 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 the Funds to more fully participate in these economies of scale. The Board considered each Fund’s asset levels and whether the current fee schedule was appropriate. In their 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 ancillary or “fall-out” benefits that BlackRock or its affiliates may derive from BlackRock’s respective relationships with the Funds, both tangible and intangible, 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 the Funds, 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 noted 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.
| 38 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Disclosure of Investment Advisory Agreement and Sub-Advisory Agreements (continued)
In connection with its consideration of the Agreements, the Board also received information regarding BlackRock’s brokerage and soft dollar practices. The Board received reports from BlackRock which included information on brokerage commissions and trade execution practices throughout the year.
The Board noted the competitive nature of the open-end fund marketplace, and that shareholders are able to redeem their Fund shares if they believe that the pertinent Fund’s fees and expenses are too high or if they are dissatisfied with the performance of the Fund.
Conclusion
The Board, including the Independent Board Members, unanimously approved the continuation of the Advisory Agreement between the Manager and the Trust, on behalf of each Fund, for a one-year term ending June 30, 2020, and the Sub-Advisory Agreements between the Manager and the Sub-Advisor with respect to each Fund for a one-year term ending June 30, 2020. 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 Agreements were fair and reasonable and in the best interest of each Fund and its shareholders. In arriving at its decision to approve the Agreements, 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.
| D I S C L O S U R E O F I N V E S T M E N T A D V I S O R Y A G R E E M E N T A N D S U B - A D V I S O R Y A G R E E M E N T S | 39 |
Trustee and Officer Information
| Independent Trustees (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 |
||||
|
Mark Stalnecker 1951 |
Chair of the Board (Since 2019) and Trustee (Since 2015) |
Chief Investment Officer, University of Delaware from 1999 to 2013; Trustee and Chair of the Finance and Investment Committees, Winterthur Museum and Country Estate from 2005 to 2016; Member of the Investment Committee, Delaware Public Employees’ Retirement System since 2002; Member of the Investment Committee, Christiana Care Health System from 2009 to 2017; Member of the Investment Committee, Delaware Community Foundation from 2013 to 2014; Director and Chair of the Audit Committee, SEI Private Trust Co. from 2001 to 2014. | 37 RICs consisting of 179 Portfolios | None | ||||
|
Bruce R. Bond 1946 |
Trustee (Since 2019) |
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. | 37 RICs consisting of 179 Portfolios | None | ||||
|
Susan J. Carter 1956 |
Trustee (Since 2016) |
Director, Pacific Pension Institute from 2014 to 2018; Advisory Board Member, Center for Private Equity and Entrepreneurship at Tuck School of Business since 1997; Senior Advisor, Commonfund Capital, Inc. (“CCI”) (investment adviser) in 2015; Chief Executive Officer, CCI from 2013 to 2014; President & Chief Executive Officer, CCI from 1997 to 2013; Advisory Board Member, Girls Who Invest from 2015 to 2018 and Board Member thereof since 2018; Advisory Board Member, Bridges Fund Management since 2016; Trustee, Financial Accounting Foundation since 2017; Practitioner Advisory Board Member, Private Capital Research Institute (“PCRI”) since 2017. | 37 RICs consisting of 179 Portfolios | None | ||||
|
Collette Chilton 1958 |
Trustee (Since 2015) |
Chief Investment Officer, Williams College since 2006; Chief Investment Officer, Lucent Asset Management Corporation from 1998 to 2006. | 37 RICs consisting of 179 Portfolios | None | ||||
|
Neil A. Cotty 1954 |
Trustee (Since 2016) |
Bank of America Corporation from 1996 to 2015, serving in various senior finance leadership roles, including Chief Accounting Officer, from 2009 to 2015, Chief Financial Officer of Global Banking, Markets and Wealth Management from 2008 to 2009, Chief Accounting Officer from 2004 to 2008, Chief Financial Officer of Consumer Bank from 2003 to 2004, Chief Financial Officer of Global Corporate Investment Bank from 1999 to 2002. | 37 RICs consisting of 179 Portfolios | None | ||||
|
Lena G. Goldberg 1949 |
Trustee (Since 2019) |
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. | 37 RICs consisting of 179 Portfolios | None | ||||
|
Robert M. Hernandez 1944 |
Trustee (Since 2019) |
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. | 37 RICs consisting of 179 Portfolios | Chubb Limited (insurance company); Eastman Chemical Company | ||||
|
Henry R. Keizer 1956 |
Trustee (Since 2019) |
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. | 37 RICs consisting of 179 Portfolios | Hertz Global Holdings (car rental); Montpelier Re Holdings, Ltd. (publicly held property and casualty reinsurance) from 2013 until 2015; Sealed Air Corp. (packaging); WABCO (commercial vehicle safety systems) | ||||
| 40 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Trustee and Officer Information (continued)
| Independent Trustees (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 |
||||
|
Cynthia A. Montgomery 1952 |
Trustee (Since 2007) |
Professor, Harvard Business School since 1989. | 37 RICs consisting of 179 Portfolios | Newell Rubbermaid, Inc. (manufacturing) | ||||
|
Donald C. Opatrny 1952 |
Trustee (Since 2019) |
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 2018; Member, Investment Funds Committee, State of Wyoming since 2017; Trustee, Phoenix Art Museum since 2018. | 37 RICs consisting of 179 Portfolios | None | ||||
|
Joseph P. Platt 1947 |
Trustee (Since 2007) |
General Partner, Thorn Partners, LP (private investments) since 1998; Director, WQED Multi-Media (public broadcasting not-for-profit) since 2001; Chair, Basic Health International (non-profit) since 2015. | 37 RICs consisting of 179 Portfolios | Greenlight Capital Re, Ltd. (reinsurance company); Consol Energy Inc. | ||||
|
Kenneth L. Urish 1951 |
Trustee (Since 2007) |
Managing Partner, Urish Popeck & Co., LLC (certified public accountants and consultants) since 1976; Past-Chairman of the Professional Ethics Committee of the Pennsylvania Institute of Certified Public Accountants and Committee Member thereof since 2007; Member of External Advisory Board, The Pennsylvania State University Accounting Department since founding in 2001; Principal, UP Strategic Wealth Investment Advisors, LLC since 2013; Trustee, The Holy Family Institute from 2001 to 2010; President and Trustee, Pittsburgh Catholic Publishing Associates from 2003 to 2008; Director, Inter-Tel from 2006 to 2007. | 37 RICs consisting of 179 Portfolios | None | ||||
|
Claire A. Walton 1957 |
Trustee (Since 2016) |
Chief Operating Officer and Chief Financial Officer of Liberty Square Asset Management, LP from 1998 to 2015; General Partner of Neon Liberty Capital Management, LLC since 2003; Director, Boston Hedge Fund Group from 2009 to 2018; Director, Woodstock Ski Runners since 2013; Director, Massachusetts Council on Economic Education from 2013 to 2015. | 37 RICs consisting of 179 Portfolios | None | ||||
| T R U S T E E A N D O F F I C E R I N F O R M A T I O N | 41 |
Trustee and Officer Information (continued)
| Interested Trustees (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 |
Trustee (Since 2018) |
Vice Chairman of BlackRock, Inc. since 2019; Member of BlackRock’s Global Executive and Global Operating Committees; Co-Chair of BlackRock’s Human Capital Committee; Senior Managing Director of BlackRock, Inc. from 2010 to 2019; oversaw BlackRock’s Strategic Partner Program and Strategic Product Management Group from 2012 to 2019; Member of the Board of Managers of BlackRock Investments, LLC from 2011 to 2018; Global Head of BlackRock’s Retail and iShares® businesses from 2012 to 2016. | 123 RICs consisting of 289 Portfolios | None | ||||
|
John M. Perlowski(e) 1964 |
Trustee (Since 2015), 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. | 124 RICs consisting of 290 Portfolios | None | ||||
|
(a) The address of each Trustee is c/o BlackRock, Inc., 55 East 52nd Street, New York, New York 10055. (b) Independent Trustees serve until their resignation, retirement, removal or death, or until December 31 of the year in which they turn 75. The Board may determine to extend the terms of Independent Trustees on a case-by-case basis, as appropriate. (c) Following the combination of 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. Furthermore, effective January 1, 2019, three BlackRock Fund Complexes were realigned and consolidated into two BlackRock Fund Complexes. As a result, although the chart shows the year that each Independent Trustee joined the Board, certain Independent Trustees first became members of the boards of other BlackRock-advised Funds, legacy MLIM funds or legacy BlackRock funds as follows: Bruce R. Bond, 2005; Robert M. Hernandez, 1996; Cynthia A. Montgomery, 1994; Joseph P. Platt, 1999; Kenneth L. Urish, 1999; Lena G. Goldberg, 2016; Henry R. Keizer, 2016; Donald C. Opatrny, 2015. (d) Mr. Fairbairn and Mr. Perlowski are both “interested persons,” as defined in the 1940 Act, of the Trust based on their positions with BlackRock, Inc. and its affiliates. Mr. Fairbairn and Mr. Perlowski are also board members of the BlackRock Fixed-Income Complex. (e) Mr. Perlowski is also a trustee of the BlackRock Credit Strategies Fund. |
||||||||
| 42 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Trustee and Officer Information (continued)
| Officers Who Are Not Trustees (a) | ||||
|
Name Year of Birth(b) |
Position(s) Held (Length of Service) |
Principal Occupation(s) During Past Five Years | ||
|
Thomas Callahan 1968 |
Vice President (Since 2016) |
Managing Director of BlackRock, Inc. since 2013; Member of the Board of Managers of BlackRock Investments, LLC (principal underwriter) since 2019 and Managing Director thereof since 2017; Head of BlackRock’s Global Cash Management Business since 2016; Co-Head of the Global Cash Management Business from 2014 to 2016; Deputy Head of the Global Cash Management Business from 2013 to 2014; Member of the Cash Management Group Executive Committee since 2013; Chief Executive Officer of NYSE Liffe U.S. from 2008 to 2013. | ||
|
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 Development and Oversight for BlackRock’s Strategic Product Management Group since 2019; Head of Product Structure and Oversight for BlackRock’s U.S. Wealth Advisory Group from 2013 to 2019. | ||
|
Neal J. Andrews 1966 |
Chief Financial Officer (Since 2007) |
Chief Financial Officer of the iShares® exchange traded funds since 2019; 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 certain BlackRock-advised Funds from 2014 to 2015; Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the BlackRock Multi-Asset Complex and the BlackRock Fixed-Income 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. | ||
|
Lisa Belle 1968 |
Anti-Money Laundering Compliance Officer (Since 2019) |
Managing Director of BlackRock, Inc. since 2019; Global Financial Crime Head for Asset and Wealth Management of JP Morgan from 2013 to 2019; Managing Director of RBS Securities from 2012 to 2013; Head of Financial Crimes for Barclays Wealth Americas from 2010 to 2012. | ||
|
Janey Ahn 1975 |
Secretary (Since 2019) |
Managing Director of BlackRock, Inc. since 2018; Director of BlackRock, Inc. from 2009 to 2017. | ||
|
(a) The address of each Officer is c/o BlackRock, Inc., 55 East 52nd Street, New York, New York 10055. (b) Officers of the Trust serve at the pleasure of the Board. |
||||
Further information about the Trust’s Trustees and Officers is available in the Trust’s Statement of Additional Information, which can be obtained without charge by calling (800) 441-7762.
Effective September 19, 2019, Lisa Belle replaced John MacKessy as the Anti-Money Laundering Compliance Officer of the Trust.
Effective September 19, 2019, Janey Ahn replaced Benjamin Archibald as the Secretary of the Trust.
| Investment Adviser and Administrator | Independent Registered Public Accounting Firm | |
| BlackRock Advisors, LLC | Deloitte & Touche LLP | |
| Wilmington, DE 19809 | Boston, MA 02116 | |
| Sub-Adviser | Distributor | |
| BlackRock International Limited | BlackRock Investments, LLC | |
| Edinburgh, EH3 8BL | New York, NY 10022 | |
| United Kingdom | ||
| Accounting Agent and Transfer Agent | Legal Counsel | |
| BNY Mellon Investment Servicing (US) Inc. | Sidley Austin LLP | |
| Wilmington, DE 19809 | New York, NY 10019-6018 | |
| Custodian | Address of the Trust | |
| The Bank of New York Mellon | 100 Bellevue Parkway | |
| New York, NY 10286 | Wilmington, DE 19809 | |
| T R U S T E E A N D O F F I C E R I N F O R M A T I O N | 43 |
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.
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 as an exhibit to its reports on Form N-PORT, and for reporting periods ended prior to March 31, 2019, filed such information on Form N-Q. The Funds’ Forms N-PORT and N-Q are available on the SEC’s website at http://www.sec.gov. The Funds’ Forms N-PORT and 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; 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’ portfolio during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com 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.
| 44 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Additional Information (continued)
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding 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.
Glossary of Terms Used in this Report
| Currency | ||
| USD | US Dollar | |
| Portfolio Abbreviations | ||
| ADR | American Depositary Receipts | |
| A D D I T I O N A L I N F O R M A T I O N A N D G L O S S A R Y O F T E R M S U S E D I N T H I S R E P O R T | 45 |
Want to know more?
blackrock.com | 877-275-1255 (1-877-ASK-1BLK)
This report is intended for current holders. It is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of the Funds unless preceded or accompanied by the Fund’s current prospectus. 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. Statements and other information herein are as dated and are subject to change.
Eq-Allcap-9/19-AR
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SEPTEMBER 30, 2019 |
| 2019 Annual Report | ||
BlackRock FundsSM
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BlackRock Advantage Large Cap Growth Fund |
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BlackRock Advantage Small Cap Growth Fund |
| · |
BlackRock Mid-Cap Growth Equity Portfolio |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of each Fund’s shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from BlackRock or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
You may elect to receive all future reports in paper free of charge. If you hold accounts directly with BlackRock, you can call (800) 441-7762 to inform BlackRock that you wish to continue receiving paper copies of your shareholder reports. If you hold accounts through a financial intermediary, you can follow the instructions included with this disclosure, if applicable, or contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. Please note that not all financial intermediaries may offer this service. Your election to receive reports in paper will apply to all funds advised by BlackRock Advisors, LLC, BlackRock Fund Advisors or their affiliates, or all funds held with your financial intermediary, as applicable.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive electronic delivery of shareholder reports and other communications by: (i) accessing the BlackRock website at www.blackrock.com/edelivery and logging into your accounts, if you hold accounts directly with BlackRock, or (ii) contacting your financial intermediary, if you hold accounts through a financial intermediary. Please note that not all financial intermediaries may offer this service.
| Not FDIC Insured • May Lose Value • No Bank Guarantee |
Dear Shareholder,
Investment performance in the 12 months ended September 30, 2019 was a tale of two markets. The first half of the reporting period was characterized by restrictive monetary policy, deteriorating economic growth, equity market volatility, and rising fear of an imminent recession. During the second half of the reporting period, stocks and bonds rebounded sharply, as influential central banks shifted toward accommodative monetary policy, which led to broad-based optimism that a near-term recession could be averted.
After the dust settled, equity and bond markets posted mixed returns while weathering significant volatility. Less volatile U.S. large cap equities and U.S. bonds advanced, while equities at the high end of the risk spectrum — emerging markets, international developed, and U.S. small cap — posted modest negative returns.
Fixed-income securities delivered strong returns with relatively low volatility, as interest rates declined (and bond prices rose). U.S. Treasuries, particularly long-term Treasuries, proved to be an effective ballast for diversified investors. Investment grade and high yield corporate bonds also posted positive returns, as the credit fundamentals in corporate markets remained relatively solid.
In the U.S. equity market, volatility spiked in late 2018, 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. Volatility also rose in emerging markets, as the appreciating U.S. dollar and higher interest rates in the U.S. disrupted economic growth abroad. An economic slowdown in Europe and ongoing uncertainty about Brexit led to negative performance for European equities.
As equity performance faltered and global economic growth slowed, the U.S. Federal Reserve (the “Fed”) shifted to a more patient perspective on the economy in January 2019. The Fed left interest rates unchanged for six months, then reduced interest rates twice thereafter. Following in the Fed’s footsteps, the European Central Bank announced aggressive economic stimulus measures, including lower interest rates and the return of its bond purchasing program. The Bank of Japan signaled a continuation of accommodative monetary policy, while China committed to looser credit conditions and an increase in fiscal spending.
The outpouring of global economic stimulus led to a sharp rally in risk assets throughout the world despite the headwind of rising geopolitical and trade tensions. Hopes continued to remain high as the current economic expansion became the longest in U.S. history. Looking ahead, markets are pricing in additional rate cuts by the Fed over the next year, as investors anticipate a steady shift toward more stimulative monetary policy.
We continue to expect a slowing expansion with additional room to run. Despite a sharp slowdown in trade and manufacturing across the globe, U.S. consumers continued to spend at a relatively healthy pace, benefitting from the lowest unemployment rate in 50 years and rising wages. However, escalating trade tensions and the resulting disruptions in global supply chains are becoming increasingly unpredictable, as are geopolitical tensions in the Middle East.
We believe U.S. equities remain relatively attractive, but we are shifting to a more cautious stance within emerging markets and Asia ex-Japan equities. For bonds, U.S. Treasuries are likely to continue to help buffer against volatility in risk assets, while income from other types of bonds can continue to offer steady returns.
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 September 30, 2019 | ||||||||||
| 6-month | 12-month | |||||||||
|
U.S. large cap equities (S&P 500® Index) |
6.08% | 4.25% | ||||||||
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U.S. small cap equities (Russell 2000® Index) |
(0.36) | (8.89) | ||||||||
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International equities (MSCI Europe, Australasia, Far East Index) |
2.57 | (1.34) | ||||||||
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Emerging market equities (MSCI Emerging Markets Index) |
(3.66) | (2.02) | ||||||||
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3-month Treasury bills (ICE BofAML 3-Month U.S. Treasury Bill Index) |
1.20 | 2.39 | ||||||||
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U.S. Treasury securities (ICE BofAML 10-Year U.S. Treasury Index) |
7.54 | 15.15 | ||||||||
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U.S. investment grade bonds (Bloomberg Barclays U.S. Aggregate Bond Index) |
5.42 | 10.30 | ||||||||
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Tax-exempt municipal bonds (S&P Municipal Bond Index) |
3.71 | 8.19 | ||||||||
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U.S. high yield bonds (Bloomberg Barclays U.S. Corporate High Yield 2% Issuer Capped Index) |
3.87 | 6.35 | ||||||||
| Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index. | ||||||||||
| 2 | T H I S P A G E I S N O T P A R T O F Y O U R F U N D R E P O R T |
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| Fund Summary as of September 30, 2019 | BlackRock Advantage Large Cap Growth Fund |
Investment Objective
BlackRock Advantage Large Cap Growth Fund’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 September 30, 2019, the Fund underperformed its benchmark, the Russell 1000® Growth Index.
What factors influenced performance?
Relative performance was challenged toward the end of 2018 and in the third quarter of 2019, causing the Fund to underperform its benchmark over the 12-month period. The underperformance occurred in an equity market characterized by increasing volatility and a series of sharp inflection points. Investor behavior was largely driven by broad macroeconomic and geopolitical events such as shifts in trade rhetoric, central bank policies and economic indicators rather than stock-specific characteristics. Given this market backdrop, stock-specific sentiment insights detracted from relative return. In particular, an insight identifying informed investor sentiment based on short positions of hedge funds was the top individual detractor, given the significant hedge fund de-risking that occurred toward the end of 2018 as well as the sharp momentum drawdown experienced in September of this year. Another significant detractor within the Fund’s trend- and sentiment-based insights was a signal that captures sentiment through a machine-learned analysis of sell-side research reports. Elsewhere, insights evaluating company fundamentals struggled over much of the period, as investors focused on identifying speculative growth opportunities rather than companies with strong and improving fundamentals. Given this market environment, signals seeking to identify areas of relative value struggled significantly. Also among the portfolio’s fundamental signals, more traditional measures of company quality were challenged over the course of the year. The portfolio’s macro thematic insights also detracted from Fund performance, as certain industry timing signals left the portfolio on the wrong side of a number of market moves, most notably the sharp decline in interest rates experienced in the third quarter of 2019.
Though the Fund underperformed overall, there were certain bright spots among the Fund’s stock selection insights that provided some ballast to Fund performance. While the portfolio’s trend-based insights were challenged throughout the period, a machine-learned signal conducting text-analysis of management conference calls to identify longer-term trends in company fundamentals was the top individual contributor. Similarly, although the portfolio’s fundamental insights detracted in aggregate, several alternative quality insights supported performance throughout the period, as investors sought out higher-quality companies with sustainable business models amid increasing market uncertainty. Among this group of insights, evaluating companies on long-term sustainability measures provided stability to the Fund. Elsewhere, a signal gauging the sentiment of informed bond investors was also additive, as its defensive properties were rewarded toward the end of 2018 as well as during the temporary drawdowns experienced in the second and third quarters of 2019. Though the signal is included in the portfolio’s sentiment insights, it also provides an alternative lens into company quality, which helped support Fund returns.
Describe recent portfolio activity.
Over the course of the period, the Fund 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 were an insight that captures the location of hotel booking trends and invests in related stocks most sensitive to those areas. The investment adviser also added a machine-learned signal that pulls from several alternative data sources to try and more accurately gauge consumer transactions. In addition, an insight that evaluates trade volumes to determine broker concentration and identify overcrowded trades was introduced to the portfolio. Finally, the investment adviser improved upon an existing signal, expanding the data sources used to identify trends in company job hiring as an indication of future company growth.
Describe portfolio positioning at period end.
Relative to the Russell 1000® Growth Index, the Fund was positioned essentially neutrally from a sector perspective. The Fund had slight overweight positions in the utilities and financials sectors and slight underweight positions in the consumer discretionary and materials sectors.
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 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
| Fund Summary as of September 30, 2019 (continued) | BlackRock Advantage Large Cap Growth Fund |
TOTAL RETURN BASED ON A $10,000 INVESTMENT
| (a) |
Assuming maximum sales charges, if any, transaction costs and other operating expenses, including investment advisory fees and administration fees, if any. Institutional Shares do not have a sales charge. |
| (b) |
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 of U.S. issuers 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 Flexible Equity Fund. |
| (c) |
An unmanaged index that 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 September 30, 2019
| Average Annual Total Returns (a)(b) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1 Year | 5 Years | 10 Years | |||||||||||||||||||||||||||||||||||||||||||||||||||||
|
6-Month
Total Returns |
w/o sales
charge |
w/sales
charge |
w/o sales
charge |
w/sales
charge |
w/o sales
charge |
w/sales
charge |
|||||||||||||||||||||||||||||||||||||||||||||||||
|
Institutional |
4.83 | % | 0.41 | % | N/A | 10.95 | % | N/A | 10.74 | % | N/A | ||||||||||||||||||||||||||||||||||||||||||||
|
Service |
4.66 | 0.15 | N/A | 10.62 | N/A | 10.40 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||
|
Investor A |
4.66 | 0.15 | (5.10 | )% | 10.62 | 9.43 | % | 10.40 | 9.80 | % | |||||||||||||||||||||||||||||||||||||||||||||
|
Investor C |
4.30 | (0.59 | ) | (1.50 | ) | 9.78 | 9.78 | 9.56 | 9.56 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Class K |
4.83 | 0.47 | N/A | 10.74 | N/A | 10.46 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||
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Class R |
4.48 | (0.15 | ) | N/A | 10.28 | N/A | 10.03 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||
|
Russell 1000® Growth Index |
6.20 | 3.71 | N/A | 13.39 | N/A | 14.94 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||
| (a) |
Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See “About Fund Performance” on page 11 for a detailed description of share classes, including any related sales charges and fees, and how performance was calculated for certain share classes. |
| (b) |
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 of U.S. issuers 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 Flexible Equity Fund. |
N/A — Not applicable as share class and index do not have a sales charge.
Past performance is not indicative of future results.
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Expense Example
| Actual | Hypothetical (b) | |||||||||||||||||||||||||||||||||||||||
|
Beginning
Account Value (04/01/19) |
Ending
Account Value (09/30/19) |
Expenses Paid
During the Period (a) |
Beginning
Account Value (04/01/19) |
Ending
Account Value (09/30/19) |
Expenses Paid
During the Period (a) |
Annualized
Expense Ratio |
||||||||||||||||||||||||||||||||||
|
Institutional |
$ | 1,000.00 | $ | 1,048.30 | $ | 3.22 | $ | 1,000.00 | $ | 1,022.20 | $ | 3.18 | 0.62 | % | ||||||||||||||||||||||||||
|
Service |
1,000.00 | 1,046.60 | 4.51 | 1,000.00 | 1,020.93 | 4.46 | 0.87 | |||||||||||||||||||||||||||||||||
|
Investor A |
1,000.00 | 1,046.60 | 4.51 | 1,000.00 | 1,020.93 | 4.46 | 0.87 | |||||||||||||||||||||||||||||||||
|
Investor C |
1,000.00 | 1,043.00 | 8.39 | 1,000.00 | 1,017.13 | 8.28 | 1.62 | |||||||||||||||||||||||||||||||||
|
Class K |
1,000.00 | 1,048.30 | 2.96 | 1,000.00 | 1,022.45 | 2.92 | 0.57 | |||||||||||||||||||||||||||||||||
|
Class R |
1,000.00 | 1,044.80 | 5.80 | 1,000.00 | 1,019.67 | 5.73 | 1.12 | |||||||||||||||||||||||||||||||||
| (a) |
For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period shown). |
| (b) |
Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365. |
See “Disclosure of Expenses” on page 12 for further information on how expenses were calculated.
| F U N D S U M M A R Y | 5 |
| Fund Summary as of September 30, 2019 | BlackRock Advantage Small Cap Growth Fund |
Investment Objective
BlackRock Advantage Small Cap Growth Fund’s (the “Fund”) investment objective is to seek long-term capital growth.
Portfolio Management Commentary
How did the Fund perform?
For the 12-month period ended September 30, 2019, the Fund outperformed its benchmark, the Russell 2000® Growth Index.
What factors influenced performance?
Overall, the 12-month period was defined by a highly volatile macroeconomic backdrop, as trade concerns, geopolitical tensions, and worsening economic data affected investor sentiment. These themes were constant during the past year, and the impact was acutely observed across small cap stocks, which declined overall.
The period began with peak earnings-cycle concerns prompting a selloff in the fourth quarter of 2018 before markets experienced a strong recovery in the first quarter of 2019. However, trade dynamics continued to weigh on investor sentiment during the second half of the period, as investors evaluated the likelihood of a recession. This led to strong market selloffs in May and August, with the yield-curve inversion in U.S. 10-year Treasury note yields also contributing to declines in the third quarter of 2019. Central banks responded to help offset waning investor sentiment, with the Fed cutting interest rates twice in the summer of 2019 and establishing expectations for further accommodative policy moves along with other global central banks. A cautious tone to the market still led investors to seek the relative safety of large cap stocks, which handily outperformed small caps, and yields remained at multi-year lows.
The Fund’s stock selection model was able to deliver consistent outperformance amid these multiple inflection points. Fundamental quality insights were particularly strong and provided some defensive ballast in the portfolio. Traditional quality signals that prefer companies with lower risk and volatility profiles were some of the best performers as market risk rose sharply. A machine-learning insight that creates stock-specific portfolios across generic styles also produced strong gains, as the signal moved toward a defensive posture that included underweight positions to financials in May and June. Investors continued to reward management quality, and signals that compare the text of executive press releases to regulatory filings or changes in disclosures over time were among top performers, motivating an overweight position in the health care sector. Similarly, sentiment signals that look to capture trends from company management across both short-term expectations and long-term fundamentals performed well, as they provided strong performance differentiation throughout the period. Insights capturing sentiment by looking at positioning of informed investors ended with positive performance, but results were mixed at various points during the period. These signals initially struggled during the fourth quarter of 2018 due to a sharp shift in earnings expectations, but they experienced a strong recovery in the first quarter of 2019 and delivered broader gains. Macro thematic insights also moved broadly higher, as both currency and regional models added to performance.
By contrast, there were a few stock selection insights that struggled in the more volatile market environment. Capturing sentiment from the sell-side community proved challenging and detracted during the period. These signals, which use proprietary text analysis, notably hurt performance in the Fund’s positioning in industrials. Also, despite the difficult market backdrop, growth styles still outperformed value. As such, fundamental insights that seek to identify attractively priced growth companies were notable underperformers, including insights that compare stocks across sales and earnings. Encouragingly, these insights performed well in September 2019 as the market went through an extreme factor rotation, with investors shunning previous consensus positions such as momentum-based strategies. Less traditional contrarian measures, such as flow-based insights and comparing research and development expenditures, were able to partially offset losses from the broader group of insights.
Describe recent portfolio activity.
During the period, the Fund maintained a balanced allocation of risk across all of its major drivers of returns. However, there were a number of new stock selection insights added to the Fund. These included a sentiment insight that captures trends in hotel bookings in order to take positions in hotel stocks with the greatest exposure to where bookings are occurring. An additional sentiment insight incorporated a machine-learning component to various consumer insights, such as geolocation and credit transaction data, that translates those signals into tailored weightings at the individual stock level. Finally, a new sentiment insight that gauges investor interest from company management roadshow activity with institutional investors was added.
Describe portfolio positioning at period end.
Relative to the Russell 2000® Growth Index, the Fund remained largely sector-neutral. The Fund had slight sector overweight positions at period end in real estate and communication services stocks, and maintained slight sector underweights in materials and financials 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.
| 6 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
| Fund Summary as of September 30, 2019 (continued) | BlackRock Advantage Small Cap Growth Fund |
TOTAL RETURN BASED ON A $10,000 INVESTMENT
| (a) |
Assuming maximum sales charges, if any, transaction costs and other operating expenses, including investment advisory fees and administration fees, if any. Institutional Shares do not have a sales charge. |
| (b) |
Under normal circumstances, the Fund will invest at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities of small cap companies and at least 80% of its net assets (plus any borrowings for investment purposes) in securities or instruments of issuers located in the United States. |
| (c) |
An unmanaged index that measures performance of the small-cap growth segment of the U.S. equity universe. It includes those Russell 2000® Index companies with higher price-to-value ratios and higher forecasted growth values. |
Performance Summary for the Period Ended September 30, 2019
| Average Annual Total Returns (a) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1 Year | 5 Years | 10 Years | |||||||||||||||||||||||||||||||||||||||||||||||||||||
|
6-Month
Total Returns |
w/o sales charge |
w/sales
charge |
w/o sales
charge |
w/sales
charge |
w/o sales
charge |
w/sales
charge |
|||||||||||||||||||||||||||||||||||||||||||||||||
|
Institutional |
0.17 | % | (6.80 | )% | N/A | 8.46 | % | N/A | 11.63 | % | N/A | ||||||||||||||||||||||||||||||||||||||||||||
|
Service |
0.14 | (6.98 | ) | N/A | 8.18 | N/A | 11.33 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||
|
Investor A |
0.00 | (7.05 | ) | (11.93 | )% | 8.16 | 7.00 | % | 11.28 | 10.68 | % | ||||||||||||||||||||||||||||||||||||||||||||
|
Investor C |
(0.35 | ) | (7.78 | ) | (8.32 | ) | 7.33 | 7.33 | 10.38 | 10.38 | |||||||||||||||||||||||||||||||||||||||||||||
|
Class K |
0.22 | (6.75 | ) | N/A | 8.47 | N/A | 11.63 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||
|
Class R |
(0.08 | ) | (7.27 | ) | N/A | 7.91 | N/A | 11.07 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||
|
Russell 2000® Growth Index |
(1.54 | ) | (9.63 | ) | N/A | 9.08 | N/A | 12.25 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||
| (a) |
Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See “About Fund Performance” on page 11 for a detailed description of share classes, including any related sales charges and fees, and how performance was calculated for certain share classes. |
N/A — Not applicable as share class and index do not have a sales charge.
Past performance is not indicative of future results.
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Expense Example
| Actual | Hypothetical(b) | ||||||||||||||||||||||||||||||||||
|
Beginning
Account Value (04/01/19) |
Ending
Account Value (09/30/19) |
Expenses Paid
During the Period (a) |
Beginning
Account Value (04/01/19) |
Ending
Account Value (09/30/19) |
Expenses Paid
During the Period (a) |
Annualized
Expense Ratio |
|||||||||||||||||||||||||||||
|
Institutional |
$ | 1,000.00 | $ | 1,001.70 | $ | 2.54 | $ | 1,000.00 | $ | 1,022.81 | $ | 2.56 | 0.50 | % | |||||||||||||||||||||
|
Service |
1,000.00 | 1,001.40 | 3.80 | 1,000.00 | 1,021.54 | 3.84 | 0.75 | ||||||||||||||||||||||||||||
|
Investor A |
1,000.00 | 1,000.00 | 3.80 | 1,000.00 | 1,021.54 | 3.84 | 0.75 | ||||||||||||||||||||||||||||
|
Investor C |
1,000.00 | 996.50 | 7.59 | 1,000.00 | 1,017.74 | 7.67 | 1.50 | ||||||||||||||||||||||||||||
|
Class K |
1,000.00 | 1,002.20 | 2.28 | 1,000.00 | 1,023.06 | 2.31 | 0.45 | ||||||||||||||||||||||||||||
|
Class R |
1,000.00 | 999.20 | 5.07 | 1,000.00 | 1,020.27 | 5.12 | 1.00 | ||||||||||||||||||||||||||||
| (a) |
For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period shown). |
| (b) |
Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365. |
See “Disclosure of Expenses” on page 12 for further information on how expenses were calculated.
| F U N D S U M M A R Y | 7 |
| Fund Summary as of September 30, 2019 | BlackRock Mid-Cap Growth Equity Portfolio |
Investment Objective
BlackRock Mid-Cap Growth Equity Portfolio’s (the “Fund”) investment objective is long-term capital appreciation.
Portfolio Management Commentary
How did the Fund perform?
For the 12-month period ended September 30, 2019, the Fund outperformed its benchmark, the Russell Midcap® Growth Index.
What factors influenced performance?
Positive contributions to the Fund’s performance were led by stock selection in the industrials, information technology (“IT”) and health care sectors. In industrials, an overweight to commercial services & supplies, most notably a position in Copart, Inc., drove relative performance. In IT, stock selection in the software subsector with a large overweight to Coupa Software, Inc. added to Fund returns. Finally, in health care an underweight position to biotechnology and health care providers & services proved advantageous.
The largest detractors from Fund performance were stock selection in the communication services, consumer staples and consumer discretionary sectors. In communication services, security selection within interactive media & services detracted the most from results. In consumer staples, an underweight to food products companies weighed on relative performance. Lastly, in the consumer discretionary sector negative stock selection within the hotels restaurants & leisure subsector detracted from Fund performance.
Describe recent portfolio activity.
Due to a combination of portfolio activity and market movements, the Fund’s allocation to the entertainment industry within communication services increased. Exposure to the health care sector increased as well. Conversely, exposure to consumer staples experienced the largest decrease, followed by exposure to consumer discretionary and materials.
Describe portfolio positioning at period end.
Relative to the Russell Midcap® Growth Index, the Fund’s largest overweight allocation was to the communication services sector, followed by financials and industrials. The largest underweight was to consumer discretionary, followed by consumer staples and materials.
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.
| 8 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
| Fund Summary as of September 30, 2019 (continued) | BlackRock Mid-Cap Growth Equity Portfolio |
TOTAL RETURN BASED ON A $10,000 INVESTMENT
| (a) |
Assuming maximum sales charges, if any, transaction costs and other operating expenses, including investment advisory fees and administration fees, if any. Institutional Shares do not have a sales charge. |
| (b) |
The Fund normally invests at least 80% of its net assets in equity securities issued by U.S. mid-capitalization companies which Fund management believes have above-average earnings growth potential. |
| (c) |
An unmanaged index that consists of the bottom 800 securities of the Russell 1000® Index with greater-than-average growth orientation as ranked by total market capitalization. Securities in the index generally have higher price-to-book and price-to-earnings ratios, lower dividend yields and higher forecasted growth values. |
Performance Summary for the Period Ended September 30, 2019
| Average Annual Total Returns (a) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1 Year | 5 Years | 10 Years | |||||||||||||||||||||||||||||||||||||||||||||||||||||
|
6-Month
Total Returns |
w/o sales
charge |
w/sales
charge |
w/o sales
charge |
w/sales
charge |
w/o sales
charge |
w/sales
charge |
|||||||||||||||||||||||||||||||||||||||||||||||||
|
Institutional |
6.94 | % | 7.43 | % | N/A | 15.06 | % | N/A | 15.17 | % | N/A | ||||||||||||||||||||||||||||||||||||||||||||
|
Service |
6.75 | 7.15 | N/A | 14.75 | N/A | 14.76 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||
|
Investor A |
6.81 | 7.17 | 1.54 | % | 14.72 | 13.49 | % | 14.80 | 14.18 | % | |||||||||||||||||||||||||||||||||||||||||||||
|
Investor C |
6.37 | 6.33 | 5.33 | 13.88 | 13.88 | 13.93 | 13.93 | ||||||||||||||||||||||||||||||||||||||||||||||||
|
Class K |
6.96 | 7.47 | N/A | 15.13 | N/A | 15.20 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||
|
Class R |
6.66 | 6.89 | N/A | 14.42 | N/A | 14.54 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||
|
Russell Midcap® Growth Index |
4.69 | 5.20 | N/A | 11.12 | N/A | 14.08 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||
| (a) |
Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See “About Fund Performance” on page 11 for a detailed description of share classes, including any related sales charges and fees, and how performance was calculated for certain share classes. |
N/A — Not applicable as share class and index do not have a sales charge.
Past performance is not indicative of future results.
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Expense Example
| Actual | Hypothetical (b) | |||||||||||||||||||||||||||||||
|
Beginning
Account Value (04/01/19) |
Ending
Account Value (09/30/19) |
Expenses Paid
During the Period (a) |
Beginning
Account Value (04/01/19) |
Ending
Account Value (09/30/19) |
Expenses Paid
During the Period (a) |
Annualized
Expense Ratio |
||||||||||||||||||||||||||
|
Institutional |
$ | 1,000.00 | $ | 1,069.40 | $ | 4.20 | $ | 1,000.00 | $ | 1,021.29 | $ | 4.10 | 0.80 | % | ||||||||||||||||||
|
Service |
1,000.00 | 1,067.50 | 5.50 | 1,000.00 | 1,020.02 | 5.38 | 1.05 | |||||||||||||||||||||||||
|
Investor A |
1,000.00 | 1,068.10 | 5.50 | 1,000.00 | 1,020.02 | 5.38 | 1.05 | |||||||||||||||||||||||||
|
Investor C |
1,000.00 | 1,063.70 | 9.41 | 1,000.00 | 1,016.22 | 9.20 | 1.80 | |||||||||||||||||||||||||
|
Class K |
1,000.00 | 1,069.60 | 3.93 | 1,000.00 | 1,021.54 | 3.84 | 0.75 | |||||||||||||||||||||||||
|
Class R |
1,000.00 | 1,066.60 | 6.81 | 1,000.00 | 1,018.75 | 6.65 | 1.30 | |||||||||||||||||||||||||
| (a) |
For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period shown). |
| (b) |
Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365. |
See “Disclosure of Expenses” on page 12 for further information on how expenses were calculated.
| F U N D S U M M A R Y | 9 |
Portfolio Information as of September 30, 2019
BlackRock Advantage Large Cap Growth Fund
TEN LARGEST HOLDINGS
| Security(a) |
Percent of
Net Assets |
|||
|
Microsoft Corp. |
8 | % | ||
|
Apple Inc. |
7 | |||
|
Amazon.com, Inc. |
6 | |||
|
Facebook, Inc., Class A |
3 | |||
|
Mastercard, Inc., Class A |
3 | |||
|
Alphabet, Inc., Class C |
3 | |||
|
Visa, Inc., Class A |
2 | |||
|
Alphabet, Inc., Class A |
2 | |||
|
Lockheed Martin Corp. |
2 | |||
|
Cisco Systems, Inc. |
2 | |||
SECTOR ALLOCATION
| Sector |
Percent of
Net Assets |
|||
|
Information Technology |
38 | % | ||
|
Health Care |
14 | |||
|
Consumer Discretionary |
13 | |||
|
Communication Services |
11 | |||
|
Industrials |
11 | |||
|
Consumer Staples |
4 | |||
|
Financials |
4 | |||
|
Real Estate |
2 | |||
|
Utilities |
1 | |||
|
Materials |
1 | |||
|
Short-Term Securities |
1 | |||
BlackRock Advantage Small Cap Growth Fund
TEN LARGEST HOLDINGS
| Security(a) |
Percent of
Net Assets |
|||
|
EastGroup Properties, Inc. |
2 | % | ||
|
Texas Roadhouse, Inc. |
1 | |||
|
Insperity, Inc. |
1 | |||
|
Ryman Hospitality Properties, Inc. |
1 | |||
|
Generac Holdings, Inc. |
1 | |||
|
ESCO Technologies, Inc. |
1 | |||
|
Churchill Downs, Inc. |
1 | |||
|
OSI Systems, Inc. |
1 | |||
|
Asbury Automotive Group, Inc. |
1 | |||
|
U.S. Physical Therapy, Inc. |
1 | |||
SECTOR ALLOCATION
| Sector |
Percent of
Net Assets |
|||
|
Health Care |
28 | % | ||
|
Industrials |
19 | |||
|
Information Technology |
18 | |||
|
Consumer Discretionary |
13 | |||
|
Real Estate |
6 | |||
|
Financials |
5 | |||
|
Consumer Staples |
4 | |||
|
Communication Services |
3 | |||
|
Materials |
2 | |||
|
Utilities |
1 | |||
|
Short-Term Securities |
8 | |||
|
Liabilities in Excess of Other Assets |
(7 | ) | ||
BlackRock Mid-Cap Growth Equity Portfolio
TEN LARGEST HOLDINGS
| Security(a) |
Percent of
Net Assets |
|||
|
Fair Isaac Corp. |
3 | % | ||
|
CoStar Group, Inc. |
3 | |||
|
Copart, Inc. |
3 | |||
|
MSCI, Inc. |
3 | |||
|
Teleflex, Inc. |
3 | |||
|
IAC/InterActiveCorp. |
2 | |||
|
Synopsys, Inc. |
2 | |||
|
Bright Horizons Family Solutions, Inc. |
2 | |||
|
West Pharmaceutical Services, Inc. |
2 | |||
|
Verisk Analytics, Inc. |
2 | |||
SECTOR ALLOCATION
| Sector |
Percent of
Net Assets |
|||
|
Information Technology |
32 | % | ||
|
Industrials |
20 | |||
|
Health Care |
16 | |||
|
Consumer Discretionary |
12 | |||
|
Communication Services |
10 | |||
|
Financials |
7 | |||
|
Real Estate |
2 | |||
|
Short-Term Securities |
7 | |||
|
Liabilities in Excess of Other Assets |
(6 | ) | ||
| (a) |
Excludes short-term investments. |
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 rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.
| 10 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
|
Institutional and Class K Shares are not subject to any sales charge. These shares bear no ongoing distribution or service fees and are available only to certain eligible investors. BlackRock Advantage Large Cap Growth Fund Class K Shares performance shown prior to the Class K Shares inception date of January 25, 2018 is that of Investor A Shares. BlackRock Mid-Cap Growth Equity Portfolio Class K Shares performance shown prior to the Class K Shares inception date of March 28, 2016 is that of Institutional Shares. BlackRock Advantage Small Cap Growth Fund Class K Shares performance shown prior to the Class K Shares inception date of January 25, 2018 is that of Institutional Shares. The performance of each Fund’s Class K Shares would be substantially similar to Investor A Shares or Institutional Shares, as applicable, because the share classes of a Fund invest in the same portfolio of securities and performance would only differ to the extent that Class K Shares and Investor A Shares or Institutional Shares, as applicable, have different expenses. The actual returns of Class K Shares would have been higher than those of Investor A Shares or Institutional Shares, as applicable, because Class K Shares have lower expenses than Investor A Shares and Institutional Shares.
Service Shares are not subject to any sales charge. These shares are subject to a service fee of 0.25% per year (but no distribution fee) and are only available to certain eligible investors.
Investor A Shares are subject to a maximum initial sales charge (front-end load) of 5.25% and a service fee of 0.25% per year (but no distribution fee). Certain redemptions of these shares may be subject to a contingent deferred sales charge (“CDSC”) where no initial sales charge was paid at the time of purchase. These shares are generally available through financial intermediaries.
Investor C Shares are subject to a 1.00% CDSC if redeemed within one year of purchase. In addition, these shares are subject to a distribution fee of 0.75% per year and a service fee of 0.25% per year. These shares are generally available through financial intermediaries. Effective November 8, 2018, the Funds adopted an automatic conversion feature whereby Investor C Shares held for approximately ten years will be automatically converted into Investor A Shares.
Class R Shares are not subject to any sales charge. These shares are subject to a distribution fee of 0.25% per year and a service fee of 0.25% per year. These shares are available only to certain employer-sponsored retirement plans. BlackRock Advantage Large Cap Growth Fund Class R Share performance shown prior to the Class R Shares inception date of July 30, 2010 is that of Investor A Shares and was restated to reflect Class R Shares fees. BlackRock Advantage Small Cap Growth Fund Class R Share performance shown prior to the Class R Shares inception date of March 2, 2018 is that of Institutional Shares and was restated to reflect Class R Shares fees.
Performance information reflects past performance and does not guarantee future results. Current performance may be lower or higher than the performance data quoted. Refer to www.blackrock.com to obtain performance data current to the most recent month-end. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Figures shown in the performance tables on the previous pages assume reinvestment of all distributions, if any, at net asset value (“NAV”) on the ex-dividend date. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Distributions paid to each class of shares will vary because of the different levels of service, distribution and transfer agency fees applicable to each class, which are deducted from the income available to be paid to shareholders.
BlackRock Advisors, LLC (the “Manager”), each Fund’s investment adviser, has contractually and/or voluntarily agreed to waive and/or reimburse a portion of each Fund’s expenses. Without such waiver and/or reimbursement, each Fund’s performance would have been lower. With respect to each Fund’s voluntary waivers, the Manager is under no obligation to waive and/or reimburse or to continue waiving and/or reimbursing its fees and such voluntary waivers may be reduced or discontinued at any time. With respect to each Fund’s contractual waivers, the Manager is under no obligation to continue waiving and/or reimbursing its fees after the applicable termination date of such agreement. See Note 6 of the Notes to Financial Statements for additional information on waivers and/or reimbursements.
| A B O U T F U N D P E R F O R M A N C E | 11 |
Shareholders of each Fund may incur the following charges: (a) transactional expenses, such as sales charges; and (b) operating expenses, including investment advisory fees, administration fees, service and distribution fees, including 12b-1 fees, acquired fund fees and expenses, and other fund expenses. The expense examples shown on the previous pages (which are based on a hypothetical investment of $1,000 invested on April 1, 2019 and held through September 30, 2019) 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 and share class under the heading 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 examples 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 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.
| 12 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
September 30, 2019 |
BlackRock Advantage Large Cap Growth Fund (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
|
Common Stocks — 99.0% |
|
|||||||
| Aerospace & Defense — 4.1% | ||||||||
|
Boeing Co. |
18,625 | $ | 7,086,254 | |||||
|
HEICO Corp. |
8,368 | 1,044,996 | ||||||
|
HEICO Corp., Class A |
5,869 | 571,112 | ||||||
|
Lockheed Martin Corp. |
37,553 | 14,647,923 | ||||||
|
Northrop Grumman Corp. |
10,350 | 3,879,076 | ||||||
|
Raytheon Co. |
12,053 | 2,364,678 | ||||||
|
Teledyne Technologies, Inc.(a) |
8,645 | 2,783,604 | ||||||
|
|
|
|||||||
| 32,377,643 | ||||||||
| Air Freight & Logistics — 0.5% | ||||||||
|
CH Robinson Worldwide, Inc. |
36,979 | 3,135,080 | ||||||
|
Expeditors International of Washington, Inc. |
8,030 | 596,549 | ||||||
|
United Parcel Service, Inc., Class B |
1,409 | 168,826 | ||||||
|
|
|
|||||||
| 3,900,455 | ||||||||
| Auto Components — 0.0% | ||||||||
|
Gentex Corp. |
14,488 | 398,927 | ||||||
|
|
|
|||||||
| Automobiles — 0.2% | ||||||||
|
Tesla, Inc.(a) |
5,724 | 1,378,740 | ||||||
|
|
|
|||||||
| Beverages — 1.4% | ||||||||
|
Coca-Cola Co. |
21,675 | 1,179,987 | ||||||
|
Monster Beverage Corp.(a) |
39,451 | 2,290,525 | ||||||
|
PepsiCo, Inc. |
53,570 | 7,344,447 | ||||||
|
|
|
|||||||
| 10,814,959 | ||||||||
| Biotechnology — 4.4% | ||||||||
|
AbbVie, Inc. |
98,451 | 7,454,710 | ||||||
|
Amgen, Inc. |
28,390 | 5,493,749 | ||||||
|
Biogen, Inc.(a) |
5,778 | 1,345,234 | ||||||
|
Celgene Corp.(a) |
39,717 | 3,943,898 | ||||||
|
Gilead Sciences, Inc. |
146,769 | 9,302,219 | ||||||
|
Incyte Corp.(a) |
12,782 | 948,808 | ||||||
|
Regeneron Pharmaceuticals, Inc.(a) |
8,977 | 2,490,220 | ||||||
|
Vertex Pharmaceuticals, Inc.(a) |
22,535 | 3,817,880 | ||||||
|
|
|
|||||||
| 34,796,718 | ||||||||
| Building Products — 0.8% | ||||||||
|
Allegion PLC |
61,895 | 6,415,417 | ||||||
|
|
|
|||||||
| Capital Markets — 1.7% | ||||||||
|
Charles Schwab Corp. |
67,143 | 2,808,592 | ||||||
|
CME Group, Inc. |
4,561 | 963,922 | ||||||
|
Evercore, Inc., Class A |
5,098 | 408,350 | ||||||
|
FactSet Research Systems, Inc. |
3,085 | 749,562 | ||||||
|
Intercontinental Exchange, Inc. |
28,140 | 2,596,478 | ||||||
|
Moody’s Corp. |
3,636 | 744,762 | ||||||
|
Morgan Stanley |
11,033 | 470,778 | ||||||
|
S&P Global, Inc. |
7,821 | 1,915,989 | ||||||
|
TD Ameritrade Holding Corp. |
54,875 | 2,562,662 | ||||||
|
|
|
|||||||
| 13,221,095 | ||||||||
| Chemicals — 0.6% | ||||||||
|
Air Products & Chemicals, Inc. |
2,474 | 548,882 | ||||||
|
Cabot Corp. |
1 | 45 | ||||||
|
Ecolab, Inc. |
20,985 | 4,155,869 | ||||||
|
|
|
|||||||
| 4,704,796 | ||||||||
| Commercial Services & Supplies — 0.4% | ||||||||
|
Copart, Inc.(a) |
11,309 | 908,452 | ||||||
|
Waste Management, Inc. |
17,058 | 1,961,670 | ||||||
|
|
|
|||||||
| 2,870,122 | ||||||||
| Communications Equipment — 1.9% | ||||||||
|
Ciena Corp.(a) |
19,116 | 749,921 | ||||||
|
Cisco Systems, Inc. |
291,051 | 14,380,830 | ||||||
|
|
|
|||||||
| 15,130,751 | ||||||||
| Construction & Engineering — 0.1% | ||||||||
|
MasTec, Inc. (a) |
18,470 | 1,199,257 | ||||||
|
|
|
|||||||
| Security | Shares | Value | ||||||
| Consumer Finance — 1.2% | ||||||||
|
Ally Financial, Inc. |
11,139 | $ | 369,369 | |||||
|
American Express Co. |
61,291 | 7,249,499 | ||||||
|
Credit Acceptance Corp.(a) |
429 | 197,902 | ||||||
|
Discover Financial Services |
19,594 | 1,588,877 | ||||||
|
|
|
|||||||
| 9,405,647 | ||||||||
| Containers & Packaging — 0.1% | ||||||||
|
Westrock Co. |
24,531 | 894,155 | ||||||
|
|
|
|||||||
| Diversified Consumer Services — 0.3% | ||||||||
|
Bright Horizons Family Solutions, Inc.(a) |
4,467 | 681,217 | ||||||
|
frontdoor, Inc.(a) |
13,343 | 648,070 | ||||||
|
H&R Block, Inc. |
32,282 | 762,501 | ||||||
|
|
|
|||||||
| 2,091,788 | ||||||||
| Diversified Financial Services — 0.3% | ||||||||
|
Berkshire Hathaway, Inc., Class B(a) |
9,802 | 2,039,012 | ||||||
|
|
|
|||||||
| Electric Utilities — 0.5% | ||||||||
|
Alliant Energy Corp. |
5,230 | 282,054 | ||||||
|
Xcel Energy, Inc. |
61,966 | 4,020,974 | ||||||
|
|
|
|||||||
| 4,303,028 | ||||||||
| Electrical Equipment — 0.8% | ||||||||
|
AMETEK, Inc. |
33,114 | 3,040,527 | ||||||
|
Generac Holdings, Inc.(a) |
25,975 | 2,034,881 | ||||||
|
Hubbell, Inc. |
12,607 | 1,656,560 | ||||||
|
|
|
|||||||
| 6,731,968 | ||||||||
| Electronic Equipment, Instruments & Components — 0.8% | ||||||||
|
CDW Corp. |
22,619 | 2,787,566 | ||||||
|
Keysight Technologies, Inc.(a) |
3,779 | 367,508 | ||||||
|
National Instruments Corp. |
72,661 | 3,051,035 | ||||||
|
|
|
|||||||
| 6,206,109 | ||||||||
| Entertainment — 1.6% | ||||||||
|
Electronic Arts, Inc.(a) |
11,814 | 1,155,645 | ||||||
|
Live Nation Entertainment, Inc.(a) |
29,391 | 1,949,799 | ||||||
|
Netflix, Inc.(a) |
21,096 | 5,645,712 | ||||||
|
Spotify Technology SA(a) |
10,182 | 1,160,748 | ||||||
|
Take-Two Interactive Software, Inc.(a) |
3,192 | 400,085 | ||||||
|
Viacom, Inc., Class B |
44,274 | 1,063,904 | ||||||
|
Zynga, Inc., Class A(a) |
232,370 | 1,352,393 | ||||||
|
|
|
|||||||
| 12,728,286 | ||||||||
| Equity Real Estate Investment Trusts (REITs) — 2.2% | ||||||||
|
American Tower Corp. |
15,056 | 3,329,333 | ||||||
|
Equinix, Inc. |
752 | 433,754 | ||||||
|
Outfront Media, Inc. |
73,143 | 2,031,913 | ||||||
|
Park Hotels & Resorts, Inc. |
24,406 | 609,418 | ||||||
|
Prologis, Inc. |
30,951 | 2,637,644 | ||||||
|
SBA Communications Corp. |
13,339 | 3,216,700 | ||||||
|
Simon Property Group, Inc. |
32,419 | 5,046,017 | ||||||
|
|
|
|||||||
| 17,304,779 | ||||||||
| Food & Staples Retailing — 1.3% | ||||||||
|
Costco Wholesale Corp. |
29,477 | 8,492,618 | ||||||
|
Performance Food Group Co.(a) |
34,561 | 1,590,152 | ||||||
|
|
|
|||||||
| 10,082,770 | ||||||||
| Food Products — 0.7% | ||||||||
|
General Mills, Inc. |
17,346 | 956,112 | ||||||
|
Hershey Co. |
31,062 | 4,814,299 | ||||||
|
|
|
|||||||
| 5,770,411 | ||||||||
| Health Care Equipment & Supplies — 2.8% | ||||||||
|
Align Technology, Inc.(a) |
1,661 | 300,508 | ||||||
|
Danaher Corp. |
31,531 | 4,554,022 | ||||||
|
Edwards Lifesciences Corp.(a) |
6,974 | 1,533,652 | ||||||
|
Hologic, Inc.(a) |
39,755 | 2,007,230 | ||||||
|
IDEXX Laboratories, Inc.(a) |
13,139 | 3,572,888 | ||||||
|
Masimo Corp.(a) |
1,550 | 230,624 | ||||||
| S C H E D U L E S O F I N V E S T M E N T S | 13 |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Advantage Large Cap Growth Fund (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
| Health Care Equipment & Supplies (continued) | ||||||||
|
Penumbra, Inc.(a) |
4,556 | $ | 612,736 | |||||
|
Stryker Corp. |
42,678 | 9,231,251 | ||||||
|
|
|
|||||||
| 22,042,911 | ||||||||
| Health Care Providers & Services — 2.8% | ||||||||
|
AmerisourceBergen Corp. |
37,417 | 3,080,542 | ||||||
|
Anthem, Inc. |
17,581 | 4,221,198 | ||||||
|
Chemed Corp. |
3,313 | 1,383,409 | ||||||
|
Cigna Corp. |
6,428 | 975,706 | ||||||
|
CVS Health Corp. |
14,334 | 904,045 | ||||||
|
UnitedHealth Group, Inc. |
51,483 | 11,188,286 | ||||||
|
WellCare Health Plans, Inc.(a) |
2,368 | 613,715 | ||||||
|
|
|
|||||||
| 22,366,901 | ||||||||
| Health Care Technology — 0.7% | ||||||||
|
Veeva Systems, Inc., Class A(a) |
37,892 | 5,785,729 | ||||||
|
|
|
|||||||
| Hotels, Restaurants & Leisure — 2.3% | ||||||||
|
Boyd Gaming Corp. |
10,147 | 243,021 | ||||||
|
Chipotle Mexican Grill, Inc.(a) |
465 | 390,819 | ||||||
|
Choice Hotels International, Inc. |
12,586 | 1,119,651 | ||||||
|
Churchill Downs, Inc. |
3,219 | 397,402 | ||||||
|
Darden Restaurants, Inc. |
53,498 | 6,324,534 | ||||||
|
Domino’s Pizza, Inc. |
6,416 | 1,569,289 | ||||||
|
Dunkin’ Brands Group, Inc. |
1,302 | 103,327 | ||||||
|
Extended Stay America, Inc. |
29,101 | 426,039 | ||||||
|
Marriott International, Inc., Class A |
3,603 | 448,105 | ||||||
|
McDonald’s Corp. |
10,275 | 2,206,145 | ||||||
|
Penn National Gaming, Inc.(a) |
10,603 | 197,481 | ||||||
|
Planet Fitness, Inc., Class A(a) |
18,618 | 1,077,424 | ||||||
|
Six Flags Entertainment Corp. |
6,872 | 349,029 | ||||||
|
Starbucks Corp. |
12,763 | 1,128,504 | ||||||
|
Texas Roadhouse, Inc. |
12,341 | 648,149 | ||||||
|
Vail Resorts, Inc. |
1,760 | 400,506 | ||||||
|
Yum! Brands, Inc. |
13,182 | 1,495,234 | ||||||
|
|
|
|||||||
| 18,524,659 | ||||||||
| Household Durables — 0.1% | ||||||||
|
DR Horton, Inc. |
19,245 | 1,014,404 | ||||||
|
|
|
|||||||
| Household Products — 0.5% | ||||||||
|
Church & Dwight Co., Inc. |
48,361 | 3,638,682 | ||||||
|
|
|
|||||||
| Industrial Conglomerates — 0.6% | ||||||||
|
3M Co. |
2,739 | 450,292 | ||||||
|
Carlisle Cos., Inc. |
740 | 107,700 | ||||||
|
Honeywell International, Inc. |
9,778 | 1,654,438 | ||||||
|
Roper Technologies, Inc. |
6,560 | 2,339,296 | ||||||
|
|
|
|||||||
| 4,551,726 | ||||||||
| Insurance — 0.8% | ||||||||
|
Allstate Corp. |
1,306 | 141,936 | ||||||
|
Arthur J. Gallagher & Co. |
13,590 | 1,217,256 | ||||||
|
Brown & Brown, Inc. |
9,131 | 329,264 | ||||||
|
Cincinnati Financial Corp. |
8,840 | 1,031,363 | ||||||
|
First American Financial Corp. |
40,272 | 2,376,451 | ||||||
|
Globe Life, Inc. |
13,625 | 1,304,730 | ||||||
|
Progressive Corp. |
2,218 | 171,340 | ||||||
|
|
|
|||||||
| 6,572,340 | ||||||||
| Interactive Media & Services — 8.3% | ||||||||
|
Alphabet, Inc., Class A(a) |
13,827 | 16,884,703 | ||||||
|
Alphabet, Inc., Class C(a) |
17,133 | 20,885,127 | ||||||
|
Facebook, Inc., Class A(a) |
141,518 | 25,201,525 | ||||||
|
Match Group, Inc. |
5,640 | 402,922 | ||||||
|
Pinterest, Inc., Class A(a)(b) |
59,502 | 1,573,828 | ||||||
|
Twitter, Inc.(a) |
18,535 | 763,642 | ||||||
|
Yelp, Inc.(a) |
16,288 | 566,008 | ||||||
|
|
|
|||||||
| 66,277,755 | ||||||||
| Internet & Direct Marketing Retail — 6.1% | ||||||||
|
Amazon.com, Inc.(a) |
27,586 | 47,886,813 | ||||||
|
Etsy, Inc.(a) |
10,836 | 612,234 | ||||||
| Security | Shares | Value | ||||||
| Internet & Direct Marketing Retail (continued) | ||||||||
|
Wayfair, Inc., Class A(a) |
1,255 | $ | 140,711 | |||||
|
|
|
|||||||
| 48,639,758 | ||||||||
| IT Services — 9.6% | ||||||||
|
Accenture PLC, Class A |
20,391 | 3,922,209 | ||||||
|
Amdocs Ltd. |
14,116 | 933,209 | ||||||
|
Automatic Data Processing, Inc. |
79,502 | 12,833,213 | ||||||
|
Booz Allen Hamilton Holding Corp. |
31,495 | 2,236,775 | ||||||
|
Fidelity National Information Services, Inc. |
15,595 | 2,070,392 | ||||||
|
GoDaddy, Inc., Class A(a) |
40,781 | 2,690,730 | ||||||
|
Mastercard, Inc., Class A |
83,047 | 22,553,074 | ||||||
|
Paychex, Inc. |
98,787 | 8,176,600 | ||||||
|
PayPal Holdings, Inc.(a) |
3,899 | 403,897 | ||||||
|
Square, Inc., Class A(a) |
37,155 | 2,301,752 | ||||||
|
Twilio, Inc., Class A(a) |
1,897 | 208,594 | ||||||
|
VeriSign, Inc.(a) |
2,549 | 480,818 | ||||||
|
Visa, Inc., Class A |
100,588 | 17,302,142 | ||||||
|
|
|
|||||||
| 76,113,405 | ||||||||
| Life Sciences Tools & Services — 0.3% | ||||||||
|
Mettler-Toledo International, Inc.(a) |
112 | 78,893 | ||||||
|
Thermo Fisher Scientific, Inc. |
5,876 | 1,711,502 | ||||||
|
Waters Corp.(a) |
1,415 | 315,870 | ||||||
|
|
|
|||||||
| 2,106,265 | ||||||||
| Machinery — 1.4% | ||||||||
|
Crane Co. |
15,548 | 1,253,635 | ||||||
|
IDEX Corp. |
13,837 | 2,267,608 | ||||||
|
Oshkosh Corp. |
24,425 | 1,851,415 | ||||||
|
PACCAR, Inc. |
87,974 | 6,159,060 | ||||||
|
Snap-on, Inc. |
56 | 8,766 | ||||||
|
|
|
|||||||
| 11,540,484 | ||||||||
| Media — 0.9% | ||||||||
|
AMC Networks, Inc., Class A(a) |
18,842 | 926,273 | ||||||
|
Comcast Corp., Class A |
7,576 | 341,526 | ||||||
|
Interpublic Group of Cos., Inc. |
222,562 | 4,798,437 | ||||||
|
Sinclair Broadcast Group, Inc., Class A |
17,516 | 748,634 | ||||||
|
|
|
|||||||
| 6,814,870 | ||||||||
| Multiline Retail — 0.6% | ||||||||
|
Dollar General Corp. |
29,890 | 4,750,717 | ||||||
|
|
|
|||||||
| Personal Products — 0.4% | ||||||||
|
Estee Lauder Cos., Inc., Class A |
17,024 | 3,386,925 | ||||||
|
|
|
|||||||
| Pharmaceuticals — 3.3% | ||||||||
|
Bristol-Myers Squibb Co. |
72,985 | 3,701,069 | ||||||
|
Eli Lilly & Co. |
19,771 | 2,210,991 | ||||||
|
Johnson & Johnson |
38,894 | 5,032,106 | ||||||
|
Merck & Co., Inc. |
106,908 | 8,999,515 | ||||||
|
Zoetis, Inc. |
50,501 | 6,291,920 | ||||||
|
|
|
|||||||
| 26,235,601 | ||||||||
| Professional Services — 1.0% | ||||||||
|
CoStar Group, Inc.(a) |
7,066 | 4,191,551 | ||||||
|
Insperity, Inc. |
12,396 | 1,222,494 | ||||||
|
Robert Half International, Inc. |
35,309 | 1,965,299 | ||||||
|
TriNet Group, Inc.(a) |
15,039 | 935,275 | ||||||
|
|
|
|||||||
| 8,314,619 | ||||||||
| Road & Rail — 0.5% | ||||||||
|
Landstar System, Inc. |
24,494 | 2,757,535 | ||||||
|
Lyft, Inc., Class A(a) |
30,844 | 1,259,669 | ||||||
|
Union Pacific Corp. |
1,240 | 200,855 | ||||||
|
|
|
|||||||
| 4,218,059 | ||||||||
| Semiconductors & Semiconductor Equipment — 4.1% | ||||||||
|
Advanced Micro Devices, Inc.(a) |
23,526 | 682,019 | ||||||
|
Applied Materials, Inc. |
86,772 | 4,329,923 | ||||||
|
Broadcom, Inc. |
10,754 | 2,968,857 | ||||||
|
Cabot Microelectronics Corp. |
1 | 141 | ||||||
|
Cirrus Logic, Inc.(a) |
31,578 | 1,691,949 | ||||||
| 14 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Advantage Large Cap Growth Fund (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
| Semiconductors & Semiconductor Equipment (continued) | ||||||||
|
Lam Research Corp. |
9,491 | $ | 2,193,465 | |||||
|
NVIDIA Corp. |
49,025 | 8,533,782 | ||||||
|
QUALCOMM, Inc. |
44,206 | 3,372,034 | ||||||
|
Texas Instruments, Inc. |
57,826 | 7,473,432 | ||||||
|
Xilinx, Inc. |
10,993 | 1,054,229 | ||||||
|
|
|
|||||||
| 32,299,831 | ||||||||
| Software — 13.8% | ||||||||
|
ACI Worldwide, Inc.(a) |
8,144 | 255,111 | ||||||
|
Adobe, Inc.(a) |
37,978 | 10,491,422 | ||||||
|
Cadence Design Systems, Inc.(a) |
22,282 | 1,472,395 | ||||||
|
Dropbox, Inc., Class A(a) |
17,817 | 359,369 | ||||||
|
Elastic NV(a) |
1,810 | 149,035 | ||||||
|
Fortinet, Inc.(a) |
1,780 | 136,633 | ||||||
|
FreedomPay, Inc.(a)(c) |
43,051 | — | ||||||
|
Intuit, Inc. |
21,493 | 5,715,848 | ||||||
|
Manhattan Associates, Inc.(a) |
20,463 | 1,650,750 | ||||||
|
Microsoft Corp. |
449,930 | 62,553,768 | ||||||
|
Oracle Corp. |
36,118 | 1,987,574 | ||||||
|
Palo Alto Networks, Inc.(a) |
3,363 | 685,480 | ||||||
|
Paycom Software, Inc.(a) |
3,437 | 720,017 | ||||||
|
Paylocity Holding Corp.(a) |
23,411 | 2,284,445 | ||||||
|
RingCentral, Inc., Class A(a) |
6,795 | 853,860 | ||||||
|
salesforce.com, Inc.(a) |
76,487 | 11,353,730 | ||||||
|
ServiceNow, Inc.(a) |
27,190 | 6,902,181 | ||||||
|
Workday, Inc., Class A(a) |
15,773 | 2,680,779 | ||||||
|
|
|
|||||||
| 110,252,397 | ||||||||
| Specialty Retail — 2.4% | ||||||||
|
AutoZone, Inc.(a) |
2,726 | 2,956,674 | ||||||
|
Home Depot, Inc. |
40,099 | 9,303,770 | ||||||
|
Lowe’s Cos., Inc. |
15,159 | 1,666,884 | ||||||
|
Ross Stores, Inc. |
39,824 | 4,374,666 | ||||||
|
Tractor Supply Co. |
11,455 | 1,035,990 | ||||||
|
|
|
|||||||
| 19,337,984 | ||||||||
| Technology Hardware, Storage & Peripherals — 7.4% | ||||||||
|
Apple Inc. |
259,410 | 58,100,058 | ||||||
|
Dell Technologies, Inc., Class C(a) |
1,971 | 102,216 | ||||||
|
HP, Inc. |
44,279 | 837,759 | ||||||
|
Pure Storage, Inc., Class A(a) |
12,507 | 211,869 | ||||||
|
|
|
|||||||
| 59,251,902 | ||||||||
| Textiles, Apparel & Luxury Goods — 1.3% | ||||||||
|
Lululemon Athletica, Inc.(a) |
23,950 | 4,611,093 | ||||||
|
NIKE, Inc., Class B |
57,140 | 5,366,589 | ||||||
|
|
|
|||||||
| 9,977,682 | ||||||||
| Security | Shares | Value | ||||||
| Tobacco — 0.3% | ||||||||
|
Altria Group, Inc. |
59,285 | $ | 2,424,756 | |||||
|
|
|
|||||||
| Trading Companies & Distributors — 0.2% | ||||||||
|
GATX Corp. |
25,762 | 1,997,328 | ||||||
|
|
|
|||||||
| Water Utilities — 0.4% | ||||||||
|
American Water Works Co., Inc. |
28,408 | 3,529,126 | ||||||
|
|
|
|||||||
| Wireless Telecommunication Services — 0.2% | ||||||||
|
Telephone & Data Systems, Inc. |
38,538 | 994,280 | ||||||
|
United States Cellular Corp.(a) |
17,166 | 645,098 | ||||||
|
|
|
|||||||
| 1,639,378 | ||||||||
|
|
|
|||||||
|
Total Long-Term Investments — 99.0%
|
788,373,027 | |||||||
|
|
|
|||||||
|
Short-Term Securities — 1.1% |
|
|||||||
|
BlackRock Liquidity Funds, T-Fund, Institutional
|
7,520,756 | 7,520,756 | ||||||
|
SL Liquidity Series, LLC, Money Market Series, 2.13%(d)(e)(f) |
706,825 | 706,966 | ||||||
|
|
|
|||||||
|
Total Short-Term Securities — 1.1%
|
|
8,227,722 | ||||||
|
|
|
|||||||
|
Total Investments — 100.1%
|
|
796,600,749 | ||||||
|
Liabilities in Excess of Other Assets—(0.1)% |
|
(474,503 | ) | |||||
|
|
|
|||||||
|
Net Assets — 100.0% |
|
$ | 796,126,246 | |||||
|
|
|
|||||||
| (a) |
Non-income producing security. |
| (b) |
Security, or a portion of the security, is on loan. |
| (c) |
Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
| (d) |
Annualized 7-day yield as of period end. |
| (e) |
Security was purchased with the cash collateral from loaned securities. |
| (f) |
During the year ended September 30, 2019, investments in issuers considered to be an affiliate/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 09/30/18 |
Net
Activity |
Shares
Held at 09/30/19 |
Value at
09/30/19 |
Income |
Net
Realized
|
Change in
Unrealized Appreciation (Depreciation) |
|||||||||||||||||||||
|
BlackRock Liquidity Funds, T-Fund, Institutional Class |
8,001,242 | (480,486 | ) | 7,520,756 | $ | 7,520,756 | $ | 163,122 | $ | — | $ | — | ||||||||||||||||
|
SL Liquidity Series, LLC Money Market Series |
180,360 | 526,465 | 706,825 | 706,966 | 60,946 | (b) | 2,423 | 18 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| $ | 8,227,722 | $ | 224,068 | $ | 2,423 | $ | 18 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| (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. |
| S C H E D U L E S O F I N V E S T M E N T S | 15 |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Advantage Large Cap Growth Fund |
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 rating 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.
Portfolio Abbreviation
S&P Standard &Poor’s
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 |
59 | 12/20/19 | $ | 8,787 | $ | (82,193 | ) | |||||||||
|
|
|
|||||||||||||||
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:
| Liabilities — Derivative Financial Instruments |
Commodity
Contracts |
Credit
|
Equity
Contracts |
Foreign
Currency Exchange Contracts |
Interest
Rate Contracts |
Other
Contracts |
Total | |||||||||||||||||||||||
|
Futures contracts |
Unrealized depreciation on
futures contracts(a) |
$ | — | $ | — | $82,193 | $ | — | $ | — | $ | — | $ | 82,193 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| (a) |
Net cumulative unrealized appreciation (depreciation) on futures contracts, if any, are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
For the year ended September 30, 2019, the effect of derivative financial instruments in the Statements of Operations was as follows:
| Net Realized Gain from: |
Commodity
Contracts |
Credit
Contracts |
Equity
Contracts |
Foreign
Currency Exchange Contracts |
Interest
Rate Contracts |
Other
Contracts |
Total | |||||||||||||||||||||
|
Futures contracts |
$ | — | $ | — | $ | 11,022 | $ | — | $ | — | $ | — | $ | 11,022 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net Change in Unrealized Appreciation (Depreciation) on: | ||||||||||||||||||||||||||||
|
Futures contracts |
$ | — | $ | — | $ | (101,632 | ) | $ | — | $ | — | $ | — | $ | (101,632 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Average Quarterly Balances of Outstanding Derivative Financial Instruments
| Futures contracts: | ||||
|
Average notional value of contracts — long |
$ | 8,970,506 | ||
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
| 16 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Advantage Large Cap Growth Fund |
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(a) |
$ | 788,373,027 | $ | — | $ | — | $ | 788,373,027 | ||||||||
|
Short-Term Securities |
7,520,756 | — | — | 7,520,756 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Subtotal |
$ | 795,893,783 | $ | — | $ | — | $ | 795,893,783 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Investments Valued at NAV(b) |
706,966 | |||||||||||||||
|
|
|
|||||||||||||||
|
Total Investments. |
$ | 796,600,749 | ||||||||||||||
|
|
|
|||||||||||||||
|
Derivative Financial Instruments(c) |
||||||||||||||||
|
Liabilities: |
||||||||||||||||
|
Equity contracts |
$ | (82,193 | ) | $ | — | $ | — | $ | (82,193 | ) | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (a) |
See above Schedule of Investments for values in each industry. |
| (b) |
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. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
| S C H E D U L E S O F I N V E S T M E N T S | 17 |
|
Schedule of Investments September 30, 2019 |
BlackRock Advantage Small Cap Growth Fund (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
|
Common Stocks — 98.6% |
|
|||||||
| Aerospace & Defense — 0.8% | ||||||||
|
Aerojet Rocketdyne Holdings, Inc.(a) |
23,119 | $ | 1,167,741 | |||||
|
Ducommun, Inc.(a) |
8,659 | 367,142 | ||||||
|
Mercury Systems, Inc.(a)(b) |
28,247 | 2,292,809 | ||||||
|
Parsons Corp.(a) |
42,283 | 1,394,493 | ||||||
|
Wesco Aircraft Holdings, Inc.(a) |
9,043 | 99,563 | ||||||
|
|
|
|||||||
| 5,321,748 | ||||||||
| Air Freight & Logistics — 0.2% | ||||||||
|
Hub Group, Inc., Class A(a) |
30,748 | 1,429,782 | ||||||
|
|
|
|||||||
| Airlines — 0.0% | ||||||||
|
Spirit Airlines, Inc.(a) |
7,865 | 285,500 | ||||||
|
|
|
|||||||
| Auto Components — 0.5% | ||||||||
|
Dorman Products, Inc.(a) |
12,593 | 1,001,647 | ||||||
|
LCI Industries |
12,017 | 1,103,761 | ||||||
|
Standard Motor Products, Inc. |
26,612 | 1,292,013 | ||||||
|
|
|
|||||||
| 3,397,421 | ||||||||
| Banks — 1.6% | ||||||||
|
Atlantic Union Bankshares Corp. |
4 | 149 | ||||||
|
Central Pacific Financial Corp. |
76,378 | 2,169,135 | ||||||
|
First Financial Bankshares, Inc. |
16,692 | 556,344 | ||||||
|
First Financial Northwest, Inc. |
7,677 | 113,466 | ||||||
|
Independent Bank Group, Inc. |
5,371 | 282,568 | ||||||
|
Republic First Bancorp, Inc.(a) |
57,073 | 239,707 | ||||||
|
Synovus Financial Corp. |
57,719 | 2,064,031 | ||||||
|
TriState Capital Holdings, Inc.(a) |
198,618 | 4,178,923 | ||||||
|
United Community Banks, Inc. |
22,171 | 628,548 | ||||||
|
|
|
|||||||
| 10,232,871 | ||||||||
| Beverages — 0.2% | ||||||||
|
Boston Beer Co., Inc., Class A(a) |
2,259 | 822,457 | ||||||
|
National Beverage Corp. |
7,904 | 350,621 | ||||||
|
|
|
|||||||
| 1,173,078 | ||||||||
| Biotechnology — 12.2% | ||||||||
|
ACADIA Pharmaceuticals, Inc.(a) |
73,359 | 2,640,190 | ||||||
|
Acceleron Pharma, Inc.(a) |
38,732 | 1,530,301 | ||||||
|
Aduro Biotech, Inc.(a) |
41,407 | 43,891 | ||||||
|
Agenus, Inc.(a) |
271,449 | 700,338 | ||||||
|
Aimmune Therapeutics, Inc.(a) |
19,017 | 398,216 | ||||||
|
Akcea Therapeutics, Inc.(a) |
13,643 | 209,966 | ||||||
|
Akebia Therapeutics, Inc.(a) |
46,743 | 183,233 | ||||||
|
Akero Therapeutics, Inc.(a)(b) |
5,691 | 129,470 | ||||||
|
Alder Biopharmaceuticals, Inc.(a) |
46,777 | 882,214 | ||||||
|
Alector, Inc.(a) |
16,186 | 233,402 | ||||||
|
Allakos, Inc.(a)(b) |
8,885 | 698,628 | ||||||
|
Allogene Therapeutics, Inc.(a)(b) |
29,604 | 806,857 | ||||||
|
Amicus Therapeutics, Inc.(a) |
120,947 | 969,995 | ||||||
|
AnaptysBio, Inc.(a) |
6,435 | 225,161 | ||||||
|
Apellis Pharmaceuticals, Inc.(a) |
45,765 | 1,102,479 | ||||||
|
Arcus Biosciences, Inc.(a)(b) |
47,563 | 432,823 | ||||||
|
Arena Pharmaceuticals, Inc.(a) |
13,970 | 639,407 | ||||||
|
Arrowhead Pharmaceuticals, Inc.(a)(b) |
58,340 | 1,644,021 | ||||||
|
Atara Biotherapeutics, Inc.(a)(b) |
40,616 | 573,498 | ||||||
|
Athersys, Inc.(a)(b) |
385,357 | 512,525 | ||||||
|
Atreca, Inc., Class A(a) |
3,670 | 44,921 | ||||||
|
Audentes Therapeutics, Inc.(a)(b) |
45,089 | 1,266,550 | ||||||
|
Avrobio, Inc.(a) |
4,048 | 57,158 | ||||||
|
Beyondspring, Inc.(a) |
10,236 | 185,272 | ||||||
|
BioCryst Pharmaceuticals, Inc.(a) |
110,184 | 315,677 | ||||||
|
Biohaven Pharmaceutical Holding Co. Ltd.(a) |
21,404 | 892,975 | ||||||
|
Blueprint Medicines Corp.(a) |
24,365 | 1,790,097 | ||||||
|
Calithera Biosciences, Inc.(a) |
146,873 | 453,838 | ||||||
|
ChemoCentryx, Inc.(a) |
105,425 | 714,782 | ||||||
|
Clovis Oncology, Inc.(a)(b) |
86,165 | 338,628 | ||||||
|
Coherus Biosciences, Inc.(a) |
45,686 | 925,598 | ||||||
|
Conatus Pharmaceuticals, Inc.(a) |
5,894 | 1,857 | ||||||
|
Corbus Pharmaceuticals Holdings, Inc.(a)(b) |
34,901 | 169,968 | ||||||
| Security | Shares | Value | ||||||
| Biotechnology (continued) | ||||||||
|
Corvus Pharmaceuticals, Inc.(a) |
59,454 | $ | 178,957 | |||||
|
Crinetics Pharmaceuticals, Inc.(a) |
9,181 | 138,082 | ||||||
|
Cue Biopharma, Inc.(a) |
1,866 | 15,730 | ||||||
|
CytomX Therapeutics, Inc.(a) |
48,477 | 357,760 | ||||||
|
Deciphera Pharmaceuticals, Inc.(a)(b) |
29,593 | 1,004,386 | ||||||
|
Denali Therapeutics, Inc.(a)(b) |
55,211 | 845,833 | ||||||
|
Dynavax Technologies Corp.(a) |
24,261 | 86,733 | ||||||
|
Eagle Pharmaceuticals, Inc.(a)(b) |
16,848 | 953,091 | ||||||
|
Editas Medicine, Inc.(a) |
34,662 | 788,214 | ||||||
|
Eiger BioPharmaceuticals, Inc.(a) |
39,131 | 401,093 | ||||||
|
Emergent BioSolutions, Inc.(a) |
22,426 | 1,172,431 | ||||||
|
Enanta Pharmaceuticals, Inc.(a) |
8,414 | 505,513 | ||||||
|
EPIRUS Biopharmaceuticals, Inc.(a) |
6,060 | 12 | ||||||
|
Epizyme, Inc.(a)(b) |
49,853 | 514,234 | ||||||
|
Esperion Therapeutics, Inc.(a) |
26,670 | 977,722 | ||||||
|
Fate Therapeutics, Inc.(a)(b) |
73,329 | 1,138,799 | ||||||
|
FibroGen, Inc.(a) |
59,573 | 2,203,010 | ||||||
|
Flexion Therapeutics, Inc.(a) |
24,911 | 341,405 | ||||||
|
Forty Seven, Inc.(a) |
32,718 | 210,050 | ||||||
|
G1 Therapeutics, Inc.(a) |
4,054 | 92,350 | ||||||
|
Genomic Health, Inc.(a) |
24,992 | 1,694,957 | ||||||
|
Global Blood Therapeutics, Inc.(a)(b) |
47,099 | 2,285,243 | ||||||
|
Gossamer Bio, Inc.(a)(b) |
9,155 | 153,712 | ||||||
|
Halozyme Therapeutics, Inc.(a) |
129,496 | 2,008,483 | ||||||
|
Heron Therapeutics, Inc.(a)(b) |
19,258 | 356,273 | ||||||
|
Ideaya Biosciences, Inc.(a) |
7,613 | 68,517 | ||||||
|
Immunomedics, Inc.(a) |
68,735 | 911,426 | ||||||
|
Insmed, Inc.(a)(b) |
69,709 | 1,229,667 | ||||||
|
Intellia Therapeutics, Inc.(a)(b) |
39,856 | 532,078 | ||||||
|
Intercept Pharmaceuticals, Inc.(a) |
25,667 | 1,703,262 | ||||||
|
Intrexon Corp.(a)(b) |
77,761 | 444,793 | ||||||
|
Invitae Corp.(a)(b) |
73,459 | 1,415,555 | ||||||
|
Iovance Biotherapeutics, Inc.(a) |
50,692 | 922,594 | ||||||
|
Ironwood Pharmaceuticals, Inc.(a) |
170,480 | 1,463,571 | ||||||
|
Jounce Therapeutics, Inc.(a) |
20,195 | 67,249 | ||||||
|
KalVista Pharmaceuticals, Inc.(a) |
6,639 | 77,012 | ||||||
|
Karuna Therapeutics, Inc.(a)(b) |
12,805 | 208,978 | ||||||
|
Karyopharm Therapeutics, Inc.(a) |
6,823 | 65,637 | ||||||
|
Kezar Life Sciences, Inc.(a) |
5,529 | 18,135 | ||||||
|
Kiniksa Pharmaceuticals Ltd., Class A(a) |
8,718 | 74,190 | ||||||
|
Kodiak Sciences, Inc.(a) |
18,573 | 267,080 | ||||||
|
Krystal Biotech, Inc.(a) |
2,149 | 74,624 | ||||||
|
Ligand Pharmaceuticals, Inc.(a) |
4,856 | 483,366 | ||||||
|
MacroGenics, Inc.(a)(b) |
52,760 | 673,218 | ||||||
|
Madrigal Pharmaceuticals, Inc.(a) |
1,312 | 113,121 | ||||||
|
Magenta Therapeutics, Inc. (a)(b) |
4,279 | 43,903 | ||||||
|
Medicines Co.(a) |
24,628 | 1,231,400 | ||||||
|
MeiraGTx Holdings plc(a) |
6,062 | 96,689 | ||||||
|
Mersana Therapeutics, Inc.(a) |
10,993 | 17,369 | ||||||
|
Mirati Therapeutics, Inc.(a) |
10,939 | 852,257 | ||||||
|
Mirum Pharmaceuticals, Inc.(a) |
2,803 | 28,198 | ||||||
|
Momenta Pharmaceuticals, Inc.(a) |
23,049 | 298,715 | ||||||
|
Myriad Genetics, Inc.(a) |
2,711 | 77,616 | ||||||
|
Natera, Inc.(a) |
54,369 | 1,783,303 | ||||||
|
Neon Therapeutics, Inc.(a)(b) |
5,070 | 8,720 | ||||||
|
Nymox Pharmaceutical Corp.(a)(b) |
17,877 | 32,894 | ||||||
|
Portola Pharmaceuticals, Inc.(a)(b) |
63,891 | 1,713,557 | ||||||
|
Precision BioSciences, Inc.(a) |
31,357 | 263,085 | ||||||
|
Principia Biopharma, Inc.(a) |
22,672 | 640,257 | ||||||
|
PTC Therapeutics, Inc.(a) |
22,134 | 748,572 | ||||||
|
Puma Biotechnology, Inc.(a) |
48,781 | 525,127 | ||||||
|
Ra Pharmaceuticals, Inc.(a)(b) |
39,614 | 936,871 | ||||||
|
Radius Health, Inc.(a) |
35,008 | 901,456 | ||||||
|
Recro Pharma, Inc.(a) |
25,495 | 282,485 | ||||||
|
REGENXBIO, Inc.(a)(b) |
10,026 | 356,926 | ||||||
|
Repligen Corp.(a) |
26,420 | 2,026,150 | ||||||
|
Retrophin, Inc.(a)(b) |
57,946 | 671,594 | ||||||
|
Rhythm Pharmaceuticals, Inc.(a)(b) |
17,916 | 386,806 | ||||||
|
Rigel Pharmaceuticals, Inc.(a)(b) |
199,322 | 372,732 | ||||||
|
Rocket Pharmaceuticals, Inc.(a) |
4,592 | 53,497 | ||||||
| 18 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Advantage Small Cap Growth Fund (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
| Biotechnology (continued) | ||||||||
|
Rubius Therapeutics, Inc.(a)(b) |
24,592 | $ | 193,047 | |||||
|
Sangamo Therapeutics, Inc.(a)(b) |
71,395 | 646,125 | ||||||
|
Seres Therapeutics, Inc.(a) |
120,618 | 483,678 | ||||||
|
Spark Therapeutics, Inc.(a) |
21,923 | 2,126,093 | ||||||
|
Spectrum Pharmaceuticals, Inc.(a) |
128,285 | 1,064,124 | ||||||
|
Stemline Therapeutics, Inc.(a) |
35,202 | 366,453 | ||||||
|
Surface Oncology, Inc.(a)(b) |
45,815 | 65,057 | ||||||
|
TG Therapeutics, Inc.(a) |
14,985 | 84,141 | ||||||
|
Turning Point Therapeutics, Inc.(a)(b) |
11,267 | 423,639 | ||||||
|
Twist Bioscience Corp.(a)(b) |
25,533 | 609,728 | ||||||
|
Ultragenyx Pharmaceutical, Inc.(a)(b) |
42,683 | 1,825,979 | ||||||
|
UNITY Biotechnology, Inc.(a) |
34,524 | 210,596 | ||||||
|
Unum Therapeutics, Inc.(a)(b) |
47,937 | 69,029 | ||||||
|
UroGen Pharma Ltd.(a) |
4,472 | 106,568 | ||||||
|
Vanda Pharmaceuticals, Inc.(a) |
43,387 | 576,179 | ||||||
|
Veracyte, Inc.(a) |
53,470 | 1,283,280 | ||||||
|
vTv Therapeutics, Inc., Class A(a) |
2 | 3 | ||||||
|
Xencor, Inc.(a) |
34,592 | 1,166,788 | ||||||
|
Y-mAbs Therapeutics, Inc.(a) |
3,158 | 82,298 | ||||||
|
|
|
|||||||
| 76,685,066 | ||||||||
| Building Products — 2.4% | ||||||||
|
Advanced Drainage Systems, Inc. |
50,541 | 1,630,958 | ||||||
|
Apogee Enterprises, Inc. |
12,889 | 502,542 | ||||||
|
Builders FirstSource, Inc.(a) |
146,288 | 3,009,876 | ||||||
|
Continental Building Products, Inc.(a) |
46,887 | 1,279,546 | ||||||
|
Trex Co., Inc.(a)(b) |
43,100 | 3,919,083 | ||||||
|
Universal Forest Products, Inc. |
115,400 | 4,602,152 | ||||||
|
|
|
|||||||
| 14,944,157 | ||||||||
| Capital Markets — 0.9% | ||||||||
|
Ares Management Corp., Class A |
24,211 | 649,097 | ||||||
|
Cohen & Steers, Inc. |
31,933 | 1,754,080 | ||||||
|
Focus Financial Partners, Inc., Class A(a) |
23,039 | 548,328 | ||||||
|
Hamilton Lane, Inc., Class A |
20,652 | 1,176,338 | ||||||
|
Houlihan Lokey, Inc. |
10,482 | 472,738 | ||||||
|
Moelis & Co., Class A |
28,358 | 931,560 | ||||||
|
|
|
|||||||
| 5,532,141 | ||||||||
| Chemicals — 1.5% | ||||||||
|
Ingevity Corp.(a) |
27,624 | 2,343,620 | ||||||
|
Innospec, Inc. |
24,566 | 2,189,813 | ||||||
|
Marrone Bio Innovations, Inc.(a)(b) |
67,243 | 94,813 | ||||||
|
PolyOne Corp. |
136,060 | 4,442,359 | ||||||
|
Quaker Chemical Corp. |
437 | 69,107 | ||||||
|
|
|
|||||||
| 9,139,712 | ||||||||
| Commercial Services & Supplies — 2.8% | ||||||||
|
ARC Document Solutions, Inc.(a) |
38,691 | 52,620 | ||||||
|
Healthcare Services Group, Inc. |
18,398 | 446,887 | ||||||
|
Kimball International, Inc., Class B |
16,382 | 316,173 | ||||||
|
McGrath RentCorp. |
65,107 | 4,530,796 | ||||||
|
Mobile Mini, Inc. |
63,654 | 2,346,286 | ||||||
|
Steelcase, Inc., Class A |
77,493 | 1,425,871 | ||||||
|
Tetra Tech, Inc. |
57,215 | 4,963,973 | ||||||
|
Viad Corp. |
52,121 | 3,499,925 | ||||||
|
|
|
|||||||
| 17,582,531 | ||||||||
| Communications Equipment — 0.9% | ||||||||
|
Calix, Inc.(a) |
130,021 | 830,834 | ||||||
|
Ciena Corp.(a) |
115,074 | 4,514,353 | ||||||
|
Extreme Networks, Inc.(a) |
27,291 | 198,542 | ||||||
|
TESSCO Technologies, Inc. |
8,798 | 126,427 | ||||||
|
ViaSat, Inc.(a) |
993 | 74,793 | ||||||
|
|
|
|||||||
| 5,744,949 | ||||||||
| Construction & Engineering — 2.1% | ||||||||
|
Comfort Systems USA, Inc. |
124,996 | 5,528,573 | ||||||
|
Dycom Industries, Inc.(a) |
29,820 | 1,522,311 | ||||||
|
EMCOR Group, Inc. |
21,692 | 1,868,115 | ||||||
|
MasTec, Inc.(a) |
63,049 | 4,093,772 | ||||||
| Security | Shares | Value | ||||||
| Construction & Engineering (continued) | ||||||||
|
MYR Group, Inc.(a) |
2,415 | $ | 75,565 | |||||
|
|
|
|||||||
| 13,088,336 | ||||||||
| Consumer Finance — 0.8% | ||||||||
|
Enova International, Inc.(a) |
52,091 | 1,080,888 | ||||||
|
FirstCash, Inc. |
30,063 | 2,755,875 | ||||||
|
Green Dot Corp., Class A(a) |
40,109 | 1,012,752 | ||||||
|
|
|
|||||||
| 4,849,515 | ||||||||
| Distributors — 0.3% | ||||||||
|
Core-Mark Holding Co., Inc. |
59,971 | 1,925,969 | ||||||
|
|
|
|||||||
| Diversified Consumer Services — 0.8% | ||||||||
|
Chegg, Inc.(a) |
92,765 | 2,778,312 | ||||||
|
OneSpaWorld Holdings Ltd.(a)(b) |
22,969 | 356,709 | ||||||
|
Strategic Education, Inc. |
11,871 | 1,613,032 | ||||||
|
|
|
|||||||
| 4,748,053 | ||||||||
| Diversified Telecommunication Services — 0.9% | ||||||||
|
Bandwidth, Inc., Class A(a) |
7,217 | 469,899 | ||||||
|
Cogent Communications Holdings, Inc. |
68,691 | 3,784,874 | ||||||
|
IDT Corp., Class B(a) |
16,274 | 171,365 | ||||||
|
Ooma, Inc.(a) |
82,386 | 856,814 | ||||||
|
Vonage Holdings Corp.(a) |
48,848 | 551,982 | ||||||
|
|
|
|||||||
| 5,834,934 | ||||||||
| Electric Utilities — 0.2% | ||||||||
|
IDACORP, Inc. |
10,103 | 1,138,305 | ||||||
|
Portland General Electric Co. |
7,068 | 398,423 | ||||||
|
|
|
|||||||
| 1,536,728 | ||||||||
| Electrical Equipment — 1.1% | ||||||||
|
Atkore International Group, Inc.(a) |
11,721 | 355,732 | ||||||
|
Generac Holdings, Inc.(a) |
76,672 | 6,006,484 | ||||||
|
Sunrun, Inc.(a) |
47,132 | 787,340 | ||||||
|
|
|
|||||||
| 7,149,556 | ||||||||
| Electronic Equipment, Instruments & Components — 2.6% | ||||||||
|
ePlus, Inc.(a) |
16,853 | 1,282,345 | ||||||
|
Fitbit, Inc., Class A(a) |
425,512 | 1,621,201 | ||||||
|
Insight Enterprises, Inc.(a) |
20,660 | 1,150,555 | ||||||
|
Itron, Inc.(a) |
5,441 | 402,416 | ||||||
|
OSI Systems, Inc.(a) |
56,073 | 5,694,774 | ||||||
|
PAR Technology Corp.(a) |
12,032 | 286,001 | ||||||
|
PC Connection, Inc. |
44,891 | 1,746,260 | ||||||
|
Sanmina Corp.(a) |
95,375 | 3,062,491 | ||||||
|
ScanSource, Inc.(a) |
25,696 | 785,013 | ||||||
|
|
|
|||||||
| 16,031,056 | ||||||||
| Energy Equipment & Services — 0.1% | ||||||||
|
Aspen Aerogels, Inc.(a) |
30 | 178 | ||||||
|
Forum Energy Technologies, Inc.(a)(b) |
87,556 | 135,712 | ||||||
|
ProPetro Holding Corp.(a) |
61,518 | 559,199 | ||||||
|
Superior Energy Services, Inc.(a) |
398,485 | 51,803 | ||||||
|
|
|
|||||||
| 746,892 | ||||||||
| Entertainment — 0.1% | ||||||||
|
Glu Mobile, Inc.(a) |
87,399 | 436,121 | ||||||
|
Rosetta Stone, Inc.(a) |
8,219 | 143,011 | ||||||
|
|
|
|||||||
| 579,132 | ||||||||
| Equity Real Estate Investment Trusts (REITs) — 5.7% | ||||||||
|
City Office REIT, Inc. |
54,989 | 791,292 | ||||||
|
DiamondRock Hospitality Co. |
59,634 | 611,249 | ||||||
|
EastGroup Properties, Inc. |
81,920 | 10,241,638 | ||||||
|
First Industrial Realty Trust, Inc. |
46,403 | 1,835,703 | ||||||
|
Four Corners Property Trust, Inc. |
83,638 | 2,365,283 | ||||||
|
Hersha Hospitality Trust |
82,679 | 1,230,264 | ||||||
|
National Storage Affiliates Trust |
151,934 | 5,070,038 | ||||||
|
NexPoint Residential Trust, Inc. |
54,619 | 2,553,984 | ||||||
|
Plymouth Industrial REIT, Inc. |
21,017 | 385,031 | ||||||
|
QTS Realty Trust, Inc., Class A |
40,229 | 2,068,173 | ||||||
| S C H E D U L E S O F I N V E S T M E N T S | 19 |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Advantage Small Cap Growth Fund (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
| Equity Real Estate Investment Trusts (REITs) (continued) | ||||||||
|
RLJ Lodging Trust |
114,790 | $ | 1,950,282 | |||||
|
Ryman Hospitality Properties, Inc. |
75,067 | 6,141,231 | ||||||
|
Summit Hotel Properties, Inc. |
17,349 | 201,248 | ||||||
|
|
|
|||||||
| 35,445,416 | ||||||||
| Food & Staples Retailing — 0.8% | ||||||||
|
BJ’s Wholesale Club Holdings, Inc.(a) |
14,874 | 384,790 | ||||||
|
Performance Food Group Co.(a) |
93,930 | 4,321,719 | ||||||
|
|
|
|||||||
| 4,706,509 | ||||||||
| Food Products — 1.7% | ||||||||
|
Calavo Growers, Inc. |
7,572 | 720,703 | ||||||
|
Freshpet, Inc.(a)(b) |
42,362 | 2,108,357 | ||||||
|
J&J Snack Foods Corp. |
22,770 | 4,371,840 | ||||||
|
John B. Sanfilippo & Son, Inc. |
37,043 | 3,578,354 | ||||||
|
Simply Good Foods Co.(a) |
6,080 | 176,259 | ||||||
|
|
|
|||||||
| 10,955,513 | ||||||||
| Gas Utilities — 0.3% | ||||||||
|
Chesapeake Utilities Corp. |
11,295 | 1,076,639 | ||||||
|
New Jersey Resources Corp. |
2,488 | 112,507 | ||||||
|
Southwest Gas Holdings, Inc. |
8,293 | 754,995 | ||||||
|
|
|
|||||||
| 1,944,141 | ||||||||
| Health Care Equipment & Supplies — 4.9% | ||||||||
|
Accuray, Inc.(a)(b) |
173,434 | 480,412 | ||||||
|
AtriCure, Inc.(a)(b) |
68,728 | 1,714,076 | ||||||
|
Cardiovascular Systems, Inc.(a) |
26,777 | 1,272,443 | ||||||
|
CONMED Corp. |
1,154 | 110,957 | ||||||
|
GenMark Diagnostics, Inc.(a) |
94,457 | 572,409 | ||||||
|
Glaukos Corp.(a) |
9,132 | 570,841 | ||||||
|
Globus Medical, Inc., Class A(a) |
47,144 | 2,410,001 | ||||||
|
Haemonetics Corp.(a) |
1,113 | 140,394 | ||||||
|
Inogen, Inc.(a) |
42,975 | 2,058,932 | ||||||
|
Integer Holdings Corp.(a) |
34,071 | 2,574,405 | ||||||
|
iRadimed Corp. (a)(b) |
21,309 | 447,915 | ||||||
|
iRhythm Technologies, Inc.(a) |
36,975 | 2,740,217 | ||||||
|
LivaNova PLC(a) |
3,092 | 228,159 | ||||||
|
Merit Medical Systems, Inc.(a)(b) |
28,187 | 858,576 | ||||||
|
Neogen Corp.(a)(b) |
24,946 | 1,699,072 | ||||||
|
Nevro Corp.(a) |
7,452 | 640,648 | ||||||
|
Novocure Ltd.(a) |
66,964 | 5,007,568 | ||||||
|
NuVasive, Inc.(a)(b) |
17,208 | 1,090,643 | ||||||
|
Penumbra, Inc.(a) |
7,116 | 957,031 | ||||||
|
RTI Surgical Holdings, Inc.(a) |
256,049 | 729,740 | ||||||
|
SeaSpine Holdings Corp.(a) |
31,971 | 390,366 | ||||||
|
SI-BONE, Inc.(a)(b) |
30,566 | 540,101 | ||||||
|
Silk Road Medical, Inc.(a) |
2,058 | 66,947 | ||||||
|
SmileDirectClub, Inc.(a)(b) |
75,214 | 1,043,970 | ||||||
|
Tactile Systems Technology, Inc.(a) |
6,239 | 264,035 | ||||||
|
Tandem Diabetes Care, Inc.(a) |
32,115 | 1,894,143 | ||||||
|
|
|
|||||||
| 30,504,001 | ||||||||
| Health Care Providers & Services — 3.7% | ||||||||
|
Amedisys, Inc.(a) |
16,756 | 2,195,204 | ||||||
|
American Renal Associates Holdings, Inc.(a) |
11,980 | 75,714 | ||||||
|
AMN Healthcare Services, Inc.(a) |
83,849 | 4,826,348 | ||||||
|
CorVel Corp.(a) |
14,484 | 1,096,439 | ||||||
|
Ensign Group, Inc. |
20,282 | 961,975 | ||||||
|
HealthEquity, Inc.(a) |
69,578 | 3,976,035 | ||||||
|
Joint Corp.(a) |
4,247 | 79,037 | ||||||
|
LHC Group, Inc.(a)(b) |
14,413 | 1,636,740 | ||||||
|
National Research Corp. |
5,972 | 344,883 | ||||||
|
PetIQ, Inc.(a) |
16,067 | 437,986 | ||||||
|
Select Medical Holdings Corp.(a) |
58,889 | 975,791 | ||||||
|
Tenet Healthcare Corp.(a) |
33,843 | 748,607 | ||||||
|
U.S. Physical Therapy, Inc. |
42,484 | 5,546,286 | ||||||
|
|
|
|||||||
| 22,901,045 | ||||||||
| Health Care Technology — 3.0% | ||||||||
|
Allscripts Healthcare Solutions, Inc.(a) |
58,718 | 644,724 | ||||||
| Security | Shares | Value | ||||||
| Health Care Technology (continued) | ||||||||
|
Castlight Health, Inc., Class B(a) |
212,342 | $ | 299,402 | |||||
|
Evolent Health, Inc., Class A(a) |
94,389 | 678,657 | ||||||
|
Health Catalyst, Inc.(a) |
8,852 | 280,077 | ||||||
|
HealthStream, Inc.(a) |
36,156 | 936,079 | ||||||
|
HMS Holdings Corp.(a) |
68,501 | 2,360,887 | ||||||
|
Inovalon Holdings, Inc., Class A(a)(b) |
61,653 | 1,010,493 | ||||||
|
Inspire Medical Systems, Inc.(a) |
16,041 | 978,822 | ||||||
|
Livongo Health, Inc.(a)(b) |
13,775 | 240,236 | ||||||
|
NextGen Healthcare, Inc.(a) |
65,072 | 1,019,678 | ||||||
|
Omnicell, Inc.(a)(b) |
62,545 | 4,520,127 | ||||||
|
Phreesia, Inc.(a)(b) |
33,416 | 810,004 | ||||||
|
Tabula Rasa HealthCare, Inc.(a) |
10,905 | 599,121 | ||||||
|
Teladoc Health, Inc.(a)(b) |
51,279 | 3,472,614 | ||||||
|
Vocera Communications, Inc.(a)(b) |
36,261 | 893,834 | ||||||
|
|
|
|||||||
| 18,744,755 | ||||||||
| Hotels, Restaurants & Leisure — 4.8% | ||||||||
|
BJ’s Restaurants, Inc. |
68,063 | 2,643,567 | ||||||
|
Bloomin’ Brands, Inc. |
100,038 | 1,893,719 | ||||||
|
Boyd Gaming Corp. |
118,542 | 2,839,081 | ||||||
|
Brinker International, Inc. |
45,858 | 1,956,761 | ||||||
|
Cheesecake Factory, Inc. |
2,541 | 105,909 | ||||||
|
Churchill Downs, Inc. |
46,508 | 5,741,645 | ||||||
|
Denny’s Corp.(a)(b) |
109,298 | 2,488,169 | ||||||
|
Eldorado Resorts, Inc.(a) |
29,033 | 1,157,546 | ||||||
|
Penn National Gaming, Inc.(a) |
44,691 | 832,370 | ||||||
|
Planet Fitness, Inc., Class A(a) |
3,521 | 203,760 | ||||||
|
Ruth’s Hospitality Group, Inc. |
56,419 | 1,151,794 | ||||||
|
Scientific Games Corp.(a) |
30,643 | 623,585 | ||||||
|
Shake Shack, Inc., Class A(a) |
5,495 | 538,730 | ||||||
|
Target Hospitality Corp.(a) |
214,763 | 1,462,536 | ||||||
|
Texas Roadhouse, Inc. |
126,998 | 6,669,935 | ||||||
|
|
|
|||||||
| 30,309,107 | ||||||||
| Household Durables — 2.2% | ||||||||
|
GoPro, Inc., Class A(a)(b) |
121,490 | 629,926 | ||||||
|
Helen of Troy Ltd.(a) |
16,589 | 2,615,422 | ||||||
|
iRobot Corp.(a) |
9,378 | 578,341 | ||||||
|
KB Home |
20,237 | 688,058 | ||||||
|
LGI Homes, Inc.(a) |
16,904 | 1,408,441 | ||||||
|
MDC Holdings, Inc. |
87,992 | 3,792,455 | ||||||
|
Sonos, Inc.(a) |
34,437 | 461,800 | ||||||
|
TopBuild Corp.(a)(b) |
33,891 | 3,268,109 | ||||||
|
ZAGG, Inc.(a)(b) |
48,362 | 303,230 | ||||||
|
|
|
|||||||
| 13,745,782 | ||||||||
| Independent Power and Renewable Electricity Producers — 0.1% | ||||||||
|
TerraForm Power, Inc., Class A |
21,058 | 383,782 | ||||||
|
|
|
|||||||
| Insurance — 0.8% | ||||||||
|
eHealth, Inc.(a)(b) |
3,608 | 240,978 | ||||||
|
Kinsale Capital Group, Inc.(b) |
42,666 | 4,407,824 | ||||||
|
National General Holdings Corp. |
4,630 | 106,583 | ||||||
|
Trupanion, Inc.(a) |
8,661 | 220,163 | ||||||
|
Universal Insurance Holdings, Inc. |
6,742 | 202,193 | ||||||
|
|
|
|||||||
| 5,177,741 | ||||||||
| Interactive Media & Services — 1.3% | ||||||||
|
Care.com, Inc.(a) |
48,592 | 507,786 | ||||||
|
Cargurus, Inc.(a)(b) |
82,269 | 2,546,226 | ||||||
|
EverQuote, Inc., Class A(a) |
28,110 | 599,867 | ||||||
|
QuinStreet, Inc.(a) |
48,382 | 609,129 | ||||||
|
TrueCar, Inc.(a) |
149,862 | 509,531 | ||||||
|
Yelp, Inc.(a) |
92,317 | 3,208,016 | ||||||
|
|
|
|||||||
| 7,980,555 | ||||||||
| Internet & Direct Marketing Retail — 0.5% | ||||||||
|
1-800-Flowers.com, Inc., Class A(a)(b) |
87,429 | 1,293,512 | ||||||
|
Etsy, Inc.(a) |
12,441 | 702,917 | ||||||
| 20 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Advantage Small Cap Growth Fund (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
| Internet & Direct Marketing Retail (continued) | ||||||||
|
Stitch Fix, Inc., Class A(a)(b) |
62,198 | $ | 1,197,312 | |||||
|
|
|
|||||||
| 3,193,741 | ||||||||
| IT Services — 2.4% | ||||||||
|
CSG Systems International, Inc. |
97,739 | 5,051,152 | ||||||
|
Endurance International Group Holdings, Inc. (a) |
42,788 | 160,455 | ||||||
|
Hackett Group, Inc. |
88,004 | 1,448,546 | ||||||
|
I3 Verticals, Inc., Class A(a) |
21,826 | 439,139 | ||||||
|
International Money Express, Inc.(a) |
94,423 | 1,297,372 | ||||||
|
ManTech International Corp., Class A |
32,170 | 2,297,260 | ||||||
|
NIC, Inc. |
31,051 | 641,203 | ||||||
|
Perficient, Inc.(a) |
20,655 | 796,870 | ||||||
|
Science Applications International Corp. |
27,632 | 2,413,655 | ||||||
|
TTEC Holdings, Inc. |
8,011 | 383,567 | ||||||
|
Virtusa Corp.(a) |
5,236 | 188,601 | ||||||
|
|
|
|||||||
| 15,117,820 | ||||||||
| Leisure Products — 0.2% | ||||||||
|
Malibu Boats, Inc., Class A(a) |
34,459 | 1,057,202 | ||||||
|
MasterCraft Boat Holdings, Inc.(a) |
4,374 | 65,282 | ||||||
|
YETI Holdings, Inc.(a) |
11,940 | 334,320 | ||||||
|
|
|
|||||||
| 1,456,804 | ||||||||
| Life Sciences Tools & Services — 1.0% | ||||||||
|
10X Genomics, Inc., Class A(a) |
10,299 | 519,070 | ||||||
|
Adaptive Biotechnologies Corp.(a)(b) |
6,276 | 193,928 | ||||||
|
Medpace Holdings, Inc.(a)(b) |
25,062 | 2,106,210 | ||||||
|
NanoString Technologies, Inc.(a) |
40,363 | 871,437 | ||||||
|
NeoGenomics, Inc.(a)(b) |
65,155 | 1,245,764 | ||||||
|
Pacific Biosciences of California, Inc.(a) |
23,362 | 120,548 | ||||||
|
Personalis, Inc.(a) |
19,365 | 284,181 | ||||||
|
Quanterix Corp.(a) |
3,077 | 67,571 | ||||||
|
Syneos Health, Inc.(a) |
11,449 | 609,201 | ||||||
|
|
|
|||||||
| 6,017,910 | ||||||||
| Machinery — 4.9% | ||||||||
|
Alamo Group, Inc. |
2,259 | 265,929 | ||||||
|
Albany International Corp., Class A |
29,879 | 2,693,891 | ||||||
|
Douglas Dynamics, Inc. |
5,403 | 240,812 | ||||||
|
ESCO Technologies, Inc. |
74,809 | 5,951,804 | ||||||
|
Evoqua Water Technologies Corp.(a) |
82,593 | 1,405,733 | ||||||
|
Federal Signal Corp. |
66,099 | 2,164,081 | ||||||
|
Hillenbrand, Inc. |
98,624 | 3,045,509 | ||||||
|
John Bean Technologies Corp. |
28,954 | 2,878,896 | ||||||
|
Meritor, Inc.(a) |
45,183 | 835,886 | ||||||
|
Miller Industries, Inc. |
6,108 | 203,396 | ||||||
|
Navistar International Corp.(a) |
34,322 | 964,791 | ||||||
|
Proto Labs, Inc.(a) |
3,646 | 372,257 | ||||||
|
RBC Bearings, Inc.(a) |
6,513 | 1,080,572 | ||||||
|
SPX Corp.(a) |
13,782 | 551,418 | ||||||
|
Wabash National Corp. |
15,302 | 222,032 | ||||||
|
Watts Water Technologies, Inc., Class A |
37,242 | 3,490,693 | ||||||
|
Woodward, Inc. |
38,178 | 4,116,734 | ||||||
|
|
|
|||||||
| 30,484,434 | ||||||||
| Media — 0.3% | ||||||||
|
Cardlytics, Inc.(a) |
10,854 | 363,826 | ||||||
|
Entravision Communications Corp., Class A |
123,699 | 393,363 | ||||||
|
MSG Networks, Inc., Class A(a) |
61,947 | 1,004,780 | ||||||
|
Tremor International Ltd. |
2,418 | 4,014 | ||||||
|
|
|
|||||||
| 1,765,983 | ||||||||
|
Metals & Mining — 0.6% |
||||||||
|
Kaiser Aluminum Corp. |
7,595 | 751,677 | ||||||
|
Materion Corp. |
46,129 | 2,830,475 | ||||||
|
Novagold Resources, Inc.(a) |
15,225 | 92,416 | ||||||
|
Ryerson Holding Corp.(a) |
37,411 | 319,116 | ||||||
|
|
|
|||||||
| 3,993,684 | ||||||||
| Oil, Gas & Consumable Fuels — 0.3% | ||||||||
|
Brigham Minerals, Inc., Class A |
6,708 | 133,489 | ||||||
|
Evolution Petroleum Corp. |
196,661 | 1,148,500 | ||||||
| Security | Shares | Value | ||||||
| Oil, Gas & Consumable Fuels (continued) | ||||||||
|
Matador Resources Co.(a) |
14,014 | $ | 231,651 | |||||
|
Montage Resources Corp.(a) |
1 | 4 | ||||||
|
Talos Energy, Inc.(a)(b) |
11,114 | 225,948 | ||||||
|
|
|
|||||||
| 1,739,592 | ||||||||
| Paper & Forest Products — 0.1% | ||||||||
|
Boise Cascade Co. |
28,017 | 913,074 | ||||||
|
|
|
|||||||
| Personal Products — 0.4% | ||||||||
|
Medifast, Inc. |
20,111 | 2,084,103 | ||||||
|
USANA Health Sciences, Inc.(a) |
9,717 | 664,546 | ||||||
|
|
|
|||||||
| 2,748,649 | ||||||||
| Pharmaceuticals — 2.8% | ||||||||
|
Aerie Pharmaceuticals, Inc.(a)(b) |
38,757 | 744,910 | ||||||
|
Amneal Pharmaceuticals, Inc.(a)(b) |
164,099 | 475,887 | ||||||
|
Amphastar Pharmaceuticals, Inc.(a) |
82,854 | 1,642,995 | ||||||
|
ANI Pharmaceuticals, Inc.(a) |
4,971 | 362,286 | ||||||
|
Arvinas, Inc.(a) |
15,950 | 343,723 | ||||||
|
Cara Therapeutics, Inc.(a) |
29,430 | 537,980 | ||||||
|
Collegium Pharmaceutical, Inc.(a)(b) |
17,303 | 198,638 | ||||||
|
Corcept Therapeutics, Inc.(a)(b) |
113,383 | 1,602,669 | ||||||
|
Dermira, Inc.(a)(b) |
56,583 | 361,565 | ||||||
|
Endo International PLC(a) |
89,333 | 286,759 | ||||||
|
Horizon Therapeutics PLC(a) |
42,276 | 1,151,176 | ||||||
|
Innoviva, Inc.(a) |
55,898 | 589,165 | ||||||
|
Intersect ENT, Inc.(a) |
52,185 | 887,667 | ||||||
|
Intra-Cellular Therapies, Inc.(a) |
57,193 | 427,232 | ||||||
|
NGM Biopharmaceuticals, Inc.(a) |
45,120 | 624,912 | ||||||
|
Omeros Corp.(a)(b) |
57,096 | 932,378 | ||||||
|
Pacira BioSciences, Inc.(a) |
43,273 | 1,647,403 | ||||||
|
Phibro Animal Health Corp., Class A |
29,520 | 629,662 | ||||||
|
Prestige Consumer Healthcare, Inc.(a) |
37,615 | 1,304,864 | ||||||
|
Reata Pharmaceuticals, Inc., Class A(a) |
12,198 | 979,377 | ||||||
|
Supernus Pharmaceuticals, Inc.(a) |
22,885 | 628,880 | ||||||
|
TherapeuticsMD, Inc.(a)(b) |
79,493 | 288,560 | ||||||
|
Theravance Biopharma, Inc.(a) |
36,437 | 709,793 | ||||||
|
Tricida, Inc.(a) |
10,295 | 317,807 | ||||||
|
Xeris Pharmaceuticals, Inc.(a)(b) |
9,535 | 93,729 | ||||||
|
Zogenix, Inc.(a) |
1,771 | 70,911 | ||||||
|
|
|
|||||||
| 17,840,928 | ||||||||
| Professional Services — 2.8% | ||||||||
|
ASGN, Inc.(a) |
36,727 | 2,308,659 | ||||||
|
CRA International, Inc. |
5,921 | 248,504 | ||||||
|
Forrester Research, Inc. |
15,748 | 506,141 | ||||||
|
Insperity, Inc. |
64,399 | 6,351,029 | ||||||
|
Kforce, Inc. |
99,500 | 3,764,583 | ||||||
|
TriNet Group, Inc.(a) |
67,869 | 4,220,773 | ||||||
|
|
|
|||||||
| 17,399,689 | ||||||||
| Real Estate Management & Development — 0.1% | ||||||||
|
RE/MAX Holdings, Inc., Class A |
5,584 | 179,581 | ||||||
|
RMR Group, Inc., Class A |
5,604 | 254,870 | ||||||
|
|
|
|||||||
| 434,451 | ||||||||
| Road & Rail — 0.5% | ||||||||
|
Avis Budget Group, Inc.(a) |
15,068 | 425,822 | ||||||
|
Covenant Transportation Group, Inc., Class A(a) |
2,823 | 46,410 | ||||||
|
Marten Transport Ltd. |
4,494 | 93,385 | ||||||
|
Saia, Inc.(a) |
8,403 | 787,361 | ||||||
|
Universal Logistics Holdings, Inc. |
70,063 | 1,631,067 | ||||||
|
|
|
|||||||
| 2,984,045 | ||||||||
| Semiconductors & Semiconductor Equipment — 3.1% | ||||||||
|
Advanced Energy Industries, Inc.(a) |
20,624 | 1,184,024 | ||||||
|
Ambarella, Inc.(a) |
25,266 | 1,587,589 | ||||||
|
Amkor Technology, Inc.(a)(b) |
297,545 | 2,707,660 | ||||||
|
Brooks Automation, Inc. |
23,889 | 884,610 | ||||||
|
Cirrus Logic, Inc.(a) |
77,436 | 4,149,021 | ||||||
|
Cohu, Inc. |
1,521 | 20,541 | ||||||
|
Enphase Energy, Inc.(a) |
41,069 | 912,964 | ||||||
| S C H E D U L E S O F I N V E S T M E N T S | 21 |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Advantage Small Cap Growth Fund (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
| Semiconductors & Semiconductor Equipment (continued) | ||||||||
|
FormFactor, Inc.(a) |
4,166 | $ | 77,675 | |||||
|
Impinj, Inc.(a) |
13,598 | 419,226 | ||||||
|
Inphi Corp.(a)(b) |
20,984 | 1,281,073 | ||||||
|
Lattice Semiconductor Corp.(a)(b) |
46,714 | 854,166 | ||||||
|
Power Integrations, Inc. |
21,766 | 1,968,299 | ||||||
|
Semtech Corp.(a) |
24,812 | 1,206,111 | ||||||
|
Silicon Laboratories, Inc.(a) |
18,108 | 2,016,326 | ||||||
|
SunPower Corp.(a) |
5,642 | 61,893 | ||||||
|
|
|
|||||||
| 19,331,178 | ||||||||
| Software — 8.9% | ||||||||
|
A10 Networks, Inc.(a) |
190,420 | 1,321,515 | ||||||
|
ACI Worldwide, Inc.(a) |
67,623 | 2,118,290 | ||||||
|
Agilysys, Inc.(a) |
2,482 | 63,564 | ||||||
|
Alarm.com Holdings, Inc.(a)(b) |
36,451 | 1,700,075 | ||||||
|
Appfolio, Inc., Class A(a) |
1,769 | 168,303 | ||||||
|
Avalara, Inc.(a) |
4,448 | 299,306 | ||||||
|
Benefitfocus, Inc.(a)(b) |
108,797 | 2,590,457 | ||||||
|
Blackbaud, Inc. |
3,201 | 289,178 | ||||||
|
Blackline, Inc.(a) |
18,744 | 896,151 | ||||||
|
Bottomline Technologies DE, Inc.(a) |
3,403 | 133,908 | ||||||
|
Box, Inc., Class A(a) |
150,636 | 2,494,532 | ||||||
|
Carbon Black, Inc.(a)(b) |
2,708 | 70,381 | ||||||
|
Cloudflare, Inc., Class A(a) |
23,759 | 441,205 | ||||||
|
CommVault Systems, Inc.(a) |
6,418 | 286,949 | ||||||
|
Cornerstone OnDemand, Inc.(a)(b) |
83,240 | 4,563,217 | ||||||
|
Datadog, Inc., Class A(a)(b) |
7,220 | 244,830 | ||||||
|
Digital Turbine, Inc.(a) |
25,717 | 165,746 | ||||||
|
Domo, Inc., Class B(a) |
13,797 | 220,476 | ||||||
|
Envestnet, Inc.(a) |
5,063 | 287,072 | ||||||
|
Everbridge, Inc.(a) |
14,080 | 868,877 | ||||||
|
Five9, Inc.(a) |
27,373 | 1,471,025 | ||||||
|
j2 Global, Inc. |
37,816 | 3,434,449 | ||||||
|
LivePerson, Inc.(a) |
48,651 | 1,736,841 | ||||||
|
Medallia, Inc.(a)(b) |
10,720 | 294,050 | ||||||
|
Model N, Inc.(a) |
46,724 | 1,297,058 | ||||||
|
Paylocity Holding Corp.(a) |
53,958 | 5,265,222 | ||||||
|
Progress Software Corp. |
51,274 | 1,951,488 | ||||||
|
PROS Holdings, Inc.(a)(b) |
37,643 | 2,243,523 | ||||||
|
Q2 Holdings, Inc.(a) |
15,738 | 1,241,256 | ||||||
|
Qualys, Inc.(a) |
2,404 | 181,670 | ||||||
|
Rapid7, Inc.(a) |
68,760 | 3,121,016 | ||||||
|
Rimini Street, Inc.(a) |
21,335 | 93,447 | ||||||
|
RingCentral, Inc., Class A(a) |
30,446 | 3,825,844 | ||||||
|
SailPoint Technologies Holding, Inc.(a) |
18,972 | 354,587 | ||||||
|
SPS Commerce, Inc.(a) |
63,952 | 3,010,221 | ||||||
|
SVMK, Inc.(a) |
73,287 | 1,253,208 | ||||||
|
Telenav, Inc.(a) |
64,000 | 305,920 | ||||||
|
Tenable Holdings, Inc.(a) |
18,294 | 409,420 | ||||||
|
Upland Software, Inc.(a) |
9,153 | 319,074 | ||||||
|
Varonis Systems, Inc.(a) |
6,542 | 391,081 | ||||||
|
Workiva, Inc.(a)(b) |
24,682 | 1,081,812 | ||||||
|
Yext, Inc.(a) |
160,719 | 2,553,825 | ||||||
|
Zendesk, Inc.(a) |
7,473 | 544,632 | ||||||
|
Zix Corp.(a) |
36,070 | 261,147 | ||||||
|
Zuora, Inc., Class A(a) |
18,544 | 279,087 | ||||||
|
|
|
|||||||
| 56,144,935 | ||||||||
| Specialty Retail — 2.1% | ||||||||
|
Aaron’s, Inc. |
30,548 | 1,963,014 | ||||||
|
American Eagle Outfitters, Inc. |
80,538 | 1,306,326 | ||||||
|
America’s Car-Mart, Inc.(a) |
6,643 | 609,163 | ||||||
|
Asbury Automotive Group, Inc.(a)(b) |
55,204 | 5,649,025 | ||||||
|
Haverty Furniture Cos., Inc. |
12 | 243 | ||||||
|
Lithia Motors, Inc., Class A |
15,162 | 2,007,146 | ||||||
|
MarineMax, Inc.(a) |
39,102 | 605,299 | ||||||
|
National Vision Holdings, Inc.(a) |
7,652 | 184,184 | ||||||
|
Sleep Number Corp.(a) |
9,270 | 383,036 | ||||||
|
Sonic Automotive, Inc., Class A |
16,922 | 531,520 | ||||||
|
|
|
|||||||
| 13,238,956 | ||||||||
| Security | Shares | Value | ||||||
| Textiles, Apparel & Luxury Goods — 1.7% | ||||||||
|
Crocs, Inc.(a) |
76,913 | $ | 2,135,105 | |||||
|
Deckers Outdoor Corp.(a) |
7,029 | 1,035,793 | ||||||
|
Oxford Industries, Inc. |
54,411 | 3,901,269 | ||||||
|
Steven Madden Ltd. |
93,818 | 3,357,746 | ||||||
|
Wolverine World Wide, Inc. |
9,598 | 271,240 | ||||||
|
|
|
|||||||
| 10,701,153 | ||||||||
| Thrifts & Mortgage Finance — 0.9% | ||||||||
|
Essent Group Ltd. |
69,588 | 3,317,260 | ||||||
|
Federal Agricultural Mortgage Corp., Class C |
13,331 | 1,088,609 | ||||||
|
NMI Holdings, Inc., Class A(a) |
29,601 | 777,322 | ||||||
|
Riverview Bancorp, Inc. |
24,022 | 177,282 | ||||||
|
United Community Financial Corp. |
5,956 | 64,206 | ||||||
|
|
|
|||||||
| 5,424,679 | ||||||||
| Tobacco — 0.5% | ||||||||
|
Turning Point Brands, Inc. |
8,085 | 186,440 | ||||||
|
Vector Group Ltd. |
249,476 | 2,971,259 | ||||||
|
|
|
|||||||
| 3,157,699 | ||||||||
| Trading Companies & Distributors — 1.8% | ||||||||
|
Applied Industrial Technologies, Inc. |
76,388 | 4,338,838 | ||||||
|
BMC Stock Holdings, Inc.(a) |
69,229 | 1,812,415 | ||||||
|
Foundation Building Materials, Inc.(a) |
59,370 | 919,641 | ||||||
|
GMS, Inc.(a) |
18,645 | 535,484 | ||||||
|
H&E Equipment Services, Inc. |
66,531 | 1,920,085 | ||||||
|
Herc Holdings, Inc.(a) |
16,546 | 769,554 | ||||||
|
Lawson Products, Inc.(a) |
4,418 | 171,109 | ||||||
|
SiteOne Landscape Supply, Inc.(a) |
9,299 | 688,312 | ||||||
|
|
|
|||||||
| 11,155,438 | ||||||||
| Water Utilities — 0.2% | ||||||||
|
American States Water Co. |
11,241 | 1,010,116 | ||||||
|
Global Water Resources, Inc. |
1,161 | 13,746 | ||||||
|
|
|
|||||||
| 1,023,862 | ||||||||
| Wireless Telecommunication Services — 0.2% | ||||||||
|
Boingo Wireless, Inc.(a) |
99,160 | 1,100,676 | ||||||
|
Gogo, Inc.(a)(b) |
55,404 | 334,086 | ||||||
|
|
|
|||||||
| 1,434,762 | ||||||||
|
|
|
|||||||
|
Total Common Stocks — 98.6%
(Cost: $577,511,605) |
618,460,940 | |||||||
|
|
|
|||||||
| Preferred Stocks — 0.6% | ||||||||
| Household Durables — 0.0% | ||||||||
|
AliphCom: |
||||||||
|
Series 6 (Acquired 06/03/14, cost $0)(a)(c)(d)(e) |
8,264 | — | ||||||
|
Series 8 (Acquired 08/31/15, cost $1,174,984)(a)(c)(d)(e) |
192,156 | 2 | ||||||
|
|
|
|||||||
| 2 | ||||||||
|
|
|
|||||||
| Software — 0.6% | ||||||||
|
Illumio, Inc., Series C (Acquired 03/10/15, cost $1,000,317)(a)(d)(e) |
311,155 | 1,303,740 | ||||||
|
Palantir Technologies, Inc., Series I (Acquired 02/06/14, cost $2,499,998)(a)(d)(e) |
407,830 | 2,483,685 | ||||||
|
|
|
|||||||
| 3,787,425 | ||||||||
|
|
|
|||||||
|
Total Preferred Stocks — 0.6%
|
3,787,427 | |||||||
|
|
|
|||||||
| 22 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Advantage Small Cap Growth Fund (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
| Rights — 0.0% | ||||||||
| Metals & Mining — 0.0% | ||||||||
|
Pan American Silver Corp. — CVR(a)(d) |
57,348 | $ | 12,043 | |||||
|
|
|
|||||||
|
Total Rights — 0.0%
|
12,043 | |||||||
|
|
|
|||||||
|
Total Long-Term Investments — 99.2%
|
622,260,410 | |||||||
|
|
|
|||||||
| Security | Shares | Value | ||||||
| Short-Term Securities — 7.7% | ||||||||
|
BlackRock Liquidity Funds, T-Fund, Institutional Class, 1.87%(f)(h) |
5,370,690 | $ | 5,370,690 | |||||
|
SL Liquidity Series, LLC, Money Market Series, 2.13%(f)(g)(h) |
42,970,281 | 42,978,875 | ||||||
|
|
|
|||||||
|
Total Short-Term Securities — 7.7%
|
48,349,565 | |||||||
|
|
|
|||||||
|
Total Investments — 106.9%
|
670,609,975 | |||||||
|
Liabilities in Excess of Other Assets — (6.9)% |
|
(43,306,061 | ) | |||||
|
|
|
|||||||
|
Net Assets — 100.0% |
$ | 627,303,914 | ||||||
|
|
|
|||||||
| (a) |
Non-income producing security. |
| (b) |
Security, or a portion of the security, is on loan. |
| (c) |
Issuer filed for bankruptcy and/or is in default. |
| (d) |
Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
| (e) |
Restricted security as to resale, excluding 144A securities. The Fund held restricted securities with a current value of $3,787,427, representing 0.6% of its net assets as of period end, and an original cost of $4,675,299. |
| (f) |
Annualized 7-day yield as of period end. |
| (g) |
Security was purchased with the cash collateral from loaned securities. |
| (h) |
During the year ended September 30, 2019, investments in issuers considered to be an affiliate/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 09/30/18 |
Net
Activity |
Shares
Held at 09/30/19 |
Value at
09/30/19 |
Income |
Net Realized
Gain (Loss) (a) |
Change in
Unrealized Appreciation (Depreciation) |
|||||||||||||||||||||
|
BlackRock Liquidity Funds, T-Fund, Institutional Class |
7,684,764 | (2,314,074 | ) | 5,370,690 | $ | 5,370,690 | $ | 131,034 | $ | — | $ | — | ||||||||||||||||
|
SL Liquidity Series, LLC, Money Market Series |
48,928,861 | (5,958,580 | ) | 42,970,281 | 42,978,875 | 189,464 | (b) | 664 | (761 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| $ | 48,349,565 | $ | 320,498 | $ | 664 | $ | (761 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| (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 rating 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.
Portfolio Abbreviation
| CVR | Contingent Value Rights |
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 |
||||||||||||||||
|
Russell 2000 E-Mini Index |
88 | 12/20/19 | $ | 6,710 | $ | (192,992 | ) | |||||||||
|
|
|
|||||||||||||||
| S C H E D U L E S O F I N V E S T M E N T S | 23 |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Advantage Small Cap Growth Fund |
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:
| Liabilities — Derivative Financial Instruments |
Commodity
Contracts |
Credit
Contracts |
Equity
Contracts |
Foreign
Currency Exchange Contracts |
Interest
Rate Contracts |
Other
Contracts |
Total | |||||||||||||||||||||||
|
Futures contracts |
Unrealized depreciation on futures contracts(a) |
$ | — | $ | — | $ | 192,992 | $ | — | $ | — | $ | — | $ | 192,992 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| (a) |
Net cumulative unrealized appreciation (depreciation) on futures contracts, if any, are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
For the year ended September 30, 2019, the effect of derivative financial instruments in the Statements of Operations was as follows:
| Net Realized Loss from: |
Commodity
Contracts |
Credit
Contracts |
Equity
Contracts |
Foreign
Currency Exchange Contracts |
Interest
Rate Contracts |
Other
Contracts |
Total | |||||||||||||||||||||
|
Futures contracts |
$ | — | $ | — | $ | (1,146,287 | ) | $ | — | $ | — | $ | — | $ | (1,146,287 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net Change in Unrealized Appreciation (Depreciation) on: |
||||||||||||||||||||||||||||
|
Futures contracts |
$ | — | $ | — | $ | (78,242 | ) | $ | — | $ | — | $ | — | $ | (78,242 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Average Quarterly Balances of Outstanding Derivative Financial Instruments
|
Futures contracts: |
||||
|
Average notional value of contracts — long |
$ | 6,931,805 |
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: |
||||||||||||||||
|
Common Stocks(a) |
$ | 618,460,940 | $ | — | $ | — | $ | 618,460,940 | ||||||||
|
Preferred Stocks(a) |
— | — | 3,787,427 | 3,787,427 | ||||||||||||
|
Rights(a) |
— | — | 12,043 | 12,043 | ||||||||||||
|
Short-Term Securities |
5,370,690 | — | — | 5,370,690 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Subtotal |
$ | 623,831,630 | $ | — | $ | 3,799,470 | $ | 627,631,100 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Investments Valued at NAV(b) |
42,978,875 | |||||||||||||||
|
|
|
|||||||||||||||
|
Total Investments. |
$ | 670,609,975 | ||||||||||||||
|
|
|
|||||||||||||||
|
Derivative Financial Instruments(c) |
||||||||||||||||
|
Liabilities: |
||||||||||||||||
|
Equity contracts |
$ | (192,992 | ) | $ | — | $ | — | $ | (192,992 | ) | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (a) |
See above Schedule of Investments for values in each industry. |
| (b) |
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. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
| 24 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Schedule of Investments September 30, 2019 |
BlackRock Mid-Cap Growth Equity Portfolio (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
|
Common Stocks — 99.0% |
|
|||||||
| Aerospace & Defense — 6.2% | ||||||||
|
HEICO Corp.(a) |
880,595 | $ | 109,968,704 | |||||
|
Hexcel Corp. |
834,484 | 68,536,171 | ||||||
|
Mercury Systems, Inc.(a)(b) |
345,423 | 28,037,985 | ||||||
|
Teledyne Technologies, Inc.(b) |
326,507 | 105,131,989 | ||||||
|
|
|
|||||||
| 311,674,849 | ||||||||
| Automobiles — 1.7% | ||||||||
|
Ferrari NV |
554,039 | 85,371,870 | ||||||
|
|
|
|||||||
|
Banks — 0.9% |
||||||||
|
First Republic Bank |
185,869 | 17,973,532 | ||||||
|
SVB Financial Group(b) |
141,132 | 29,489,531 | ||||||
|
|
|
|||||||
| 47,463,063 | ||||||||
| Capital Markets — 6.1% | ||||||||
|
Cboe Global Markets, Inc. |
485,971 | 55,842,928 | ||||||
|
MarketAxess Holdings, Inc. |
110,168 | 36,080,020 | ||||||
|
MSCI, Inc. |
591,674 | 128,837,014 | ||||||
|
Tradeweb Markets, Inc., Class A(a)(h) |
2,306,843 | 85,307,054 | ||||||
|
|
|
|||||||
| 306,067,016 | ||||||||
| Commercial Services & Supplies — 4.4% | ||||||||
|
Copart, Inc.(b) |
1,672,201 | 134,327,906 | ||||||
|
Waste Connections, Inc. |
912,767 | 83,974,564 | ||||||
|
|
|
|||||||
| 218,302,470 | ||||||||
| Communications Equipment — 2.2% | ||||||||
|
Motorola Solutions, Inc. |
645,969 | 110,079,577 | ||||||
|
|
|
|||||||
|
Diversified Consumer Services — 3.6% |
||||||||
|
Bright Horizons Family Solutions, Inc.(b) |
742,364 | 113,210,510 | ||||||
|
ServiceMaster Global Holdings, Inc.(b) |
1,208,533 | 67,556,995 | ||||||
|
|
|
|||||||
| 180,767,505 | ||||||||
| Diversified Telecommunication Services — 0.8% | ||||||||
|
GCI Liberty, Inc., Class A(b) |
626,451 | 38,883,813 | ||||||
|
|
|
|||||||
| Electronic Equipment, Instruments & Components — 2.2% | ||||||||
|
Keysight Technologies, Inc.(b) |
1,120,219 | 108,941,298 | ||||||
|
|
|
|||||||
| Entertainment — 6.2% | ||||||||
|
Liberty Media Corp. — Liberty Formula One, Class C(b) |
2,207,646 | 91,815,997 | ||||||
|
Live Nation Entertainment, Inc.(b) |
1,646,571 | 109,233,520 | ||||||
|
Madison Square Garden Co., Class A(a)(b) |
315,447 | 83,126,593 | ||||||
|
Netflix, Inc.(b) |
93,063 | 24,905,520 | ||||||
|
|
|
|||||||
| 309,081,630 | ||||||||
| Equity Real Estate Investment Trusts (REITs) — 2.6% | ||||||||
|
CoreSite Realty Corp. |
235,768 | 28,728,331 | ||||||
|
SBA Communications Corp. |
415,882 | 100,289,944 | ||||||
|
|
|
|||||||
| 129,018,275 | ||||||||
| Health Care Equipment & Supplies — 12.9% | ||||||||
|
Cooper Cos., Inc. |
264,649 | 78,600,753 | ||||||
|
IDEXX Laboratories, Inc.(a)(b) |
342,989 | 93,268,999 | ||||||
|
Masimo Corp.(b) |
703,794 | 104,717,509 | ||||||
|
SmileDirectClub, Inc.(a)(b) |
2,740,608 | 38,039,639 | ||||||
|
STERIS PLC |
648,960 | 93,768,230 | ||||||
|
Teleflex, Inc. |
368,835 | 125,311,691 | ||||||
|
West Pharmaceutical Services, Inc. |
791,635 | 112,269,676 | ||||||
|
|
|
|||||||
| 645,976,497 | ||||||||
| Hotels, Restaurants & Leisure — 1.9% | ||||||||
|
Domino’s Pizza, Inc. |
66,393 | 16,239,064 | ||||||
|
Vail Resorts, Inc. |
343,464 | 78,158,668 | ||||||
|
|
|
|||||||
| 94,397,732 | ||||||||
| Interactive Media & Services — 2.8% | ||||||||
|
ANGI Homeservices, Inc., Class A(a)(b)(h) |
3,532,201 | 25,025,644 | ||||||
| Security | Shares | Value | ||||||
| Interactive Media & Services (continued) | ||||||||
|
IAC/InterActiveCorp(b) |
536,361 | $ | 116,910,607 | |||||
|
|
|
|||||||
| 141,936,251 | ||||||||
| Internet & Direct Marketing Retail — 1.1% | ||||||||
|
MercadoLibre, Inc.(b) |
103,193 | 56,883,077 | ||||||
|
|
|
|||||||
| IT Services — 10.6% | ||||||||
|
Adyen NV(b)(c) |
141,200 | 92,856,888 | ||||||
|
Gartner, Inc.(a)(b) |
752,236 | 107,562,226 | ||||||
|
InterXion Holding NV(a)(b) |
1,189,820 | 96,922,737 | ||||||
|
Jack Henry & Associates, Inc. |
404,090 | 58,985,017 | ||||||
|
Okta, Inc.(a)(b) |
1,025,138 | 100,935,087 | ||||||
|
Wix.com Ltd.(b) |
609,000 | 71,094,660 | ||||||
|
|
|
|||||||
| 528,356,615 | ||||||||
| Leisure Products — 1.3% | ||||||||
|
Peloton Interactive, Inc. (Acquired 08/29/18, cost $11,165,755)(b)(d) |
773,241 | 18,459,582 | ||||||
|
Peloton Interactive, Inc., Class A(a)(b) |
1,761,272 | 44,207,927 | ||||||
|
|
|
|||||||
| 62,667,509 | ||||||||
| Life Sciences Tools & Services — 2.0% | ||||||||
|
10X Genomics, Inc., Class A(b) |
520,017 | 26,208,857 | ||||||
|
Adaptive Biotechnologies Corp.(a)(b) |
1,148,682 | 35,494,274 | ||||||
|
Avantor, Inc.(a)(b) |
2,673,741 | 39,303,993 | ||||||
|
|
|
|||||||
| 101,007,124 | ||||||||
| Machinery — 1.8% | ||||||||
|
IDEX Corp. |
344,134 | 56,396,680 | ||||||
|
Nordson Corp. |
241,537 | 35,327,202 | ||||||
|
|
|
|||||||
| 91,723,882 | ||||||||
| Pharmaceuticals — 1.5% | ||||||||
|
Catalent, Inc.(a)(b) |
1,522,585 | 72,566,401 | ||||||
|
|
|
|||||||
| Professional Services — 7.0% | ||||||||
|
CoStar Group, Inc.(b) |
228,136 | 135,330,275 | ||||||
|
TransUnion |
1,307,237 | 106,029,993 | ||||||
|
Verisk Analytics, Inc. |
698,714 | 110,494,632 | ||||||
|
|
|
|||||||
| 351,854,900 | ||||||||
| Road & Rail — 0.2% | ||||||||
|
Uber Technologies, Inc. (Acquired 06/06/14, cost $5,000,911)(b)(d) |
322,368 | 9,721,652 | ||||||
|
|
|
|||||||
| Semiconductors & Semiconductor Equipment — 4.0% | ||||||||
|
Cree, Inc.(a)(b) |
1,135,682 | 55,648,418 | ||||||
|
Monolithic Power Systems, Inc. |
396,401 | 61,691,888 | ||||||
|
Xilinx, Inc. |
849,047 | 81,423,607 | ||||||
|
|
|
|||||||
| 198,763,913 | ||||||||
| Software — 12.9% | ||||||||
|
ANSYS, Inc.(a)(b) |
381,735 | 84,500,860 | ||||||
|
Coupa Software, Inc.(a)(b) |
508,256 | 65,854,730 | ||||||
|
Fair Isaac Corp.(a)(b) |
469,930 | 142,633,154 | ||||||
|
RealPage, Inc.(a)(b) |
1,261,501 | 79,297,953 | ||||||
|
Synopsys, Inc.(b) |
825,548 | 113,306,463 | ||||||
|
Tyler Technologies, Inc.(a)(b) |
385,518 | 101,198,475 | ||||||
|
Zendesk, Inc.(b) |
823,133 | 59,989,933 | ||||||
|
|
|
|||||||
| 646,781,568 | ||||||||
| Specialty Retail — 0.5% | ||||||||
|
Carvana Co.(b) |
359,705 | 23,740,530 | ||||||
|
|
|
|||||||
| Textiles, Apparel & Luxury Goods — 1.6% | ||||||||
|
Canada Goose Holdings, Inc.(a)(b) |
1,769,152 | 77,789,614 | ||||||
|
|
|
|||||||
|
Total Common Stocks — 99.0%
|
4,949,818,631 | |||||||
|
|
|
|||||||
| S C H E D U L E S O F I N V E S T M E N T S | 25 |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Mid-Cap Growth Equity Portfolio (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
| Preferred Stocks — 0.4% | ||||||||
| Internet & Direct Marketing Retail — 0.4% | ||||||||
|
Postmates, Inc., Series F (Acquired 01/08/19, cost $16,580,003)(b)(d)(e) |
2,077,929 | $ | 19,033,830 | |||||
|
|
|
|||||||
| Software — 0.0% | ||||||||
|
Palantir Technologies, Inc., Series I (Acquired 02/07/14, cost $2,811,905)0.00%(b)(d)(e) |
458,712 | 2,793,556 | ||||||
|
|
|
|||||||
|
Total Preferred Stocks — 0.4%
|
21,827,386 | |||||||
|
|
|
|||||||
|
Total Long-Term Investments — 99.4% (Cost: $4,208,654,988) |
4,971,646,017 | |||||||
|
|
|
|||||||
| Security | Shares | Value | ||||||
| Short-Term Securities — 6.7% | ||||||||
|
BlackRock Liquidity Funds, T-Fund, Institutional Class, 1.87%(f)(h) |
44,963,337 | $ | 44,963,337 | |||||
|
SL Liquidity Series, LLC, Money Market Series, 2.13%(f)(g)(h) |
287,383,414 | 287,440,891 | ||||||
|
|
|
|||||||
|
Total Short-Term Securities — 6.7%
|
332,404,228 | |||||||
|
|
|
|||||||
|
Total Investments — 106.1%
|
5,304,050,245 | |||||||
|
Liabilities in Excess of Other Assets — (6.1)% |
|
(303,698,797 | ) | |||||
|
|
|
|||||||
|
Net Assets — 100.0% |
$ | 5,000,351,448 | ||||||
|
|
|
|||||||
| (a) |
Security, or a portion of the security, is on loan. |
| (b) |
Non-income producing security. |
| (c) |
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. |
| (d) |
Restricted security as to resale, excluding 144A securities. The Fund held restricted securities with a current value of $50,008,620, representing 1.0% of its net assets as of period end, and an original cost of $35,558,574. |
| (e) |
Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
| (f) |
Annualized 7-day yield as of period end. |
| (g) |
Security was purchased with the cash collateral from loaned securities. |
| (h) |
During the year ended September 30, 2019, investments in issuers considered to be an affiliate/affiliates of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows: |
| Affiliated Persons and/or Related Parties |
Shares
Held at 09/30/18 |
Shares
Purchased |
Shares
Sold |
Shares
Held at 09/30/19 |
Value at
09/30/19 |
Income |
Net
Realized Gain (Loss) (a) |
Change in
Unrealized Appreciation (Depreciation) |
||||||||||||||||||||||||
|
BlackRock Liquidity Funds, T-Fund, Institutional Class(b) |
18,889,907 | 26,073,430 | — | 44,963,337 | $ | 44,963,337 | $ | 1,234,376 | $ | — | $ | — | ||||||||||||||||||||
|
SL Liquidity Series, LLC, Money Market Series(b) |
78,886,779 | 208,496,635 | — | 287,383,414 | 287,440,891 | 469,955 | (c) | 7,807 | 20,965 | |||||||||||||||||||||||
|
Tradeweb Markets, Inc., Class A |
— | 2,306,843 | — | 2,306,843 | 85,307,054 | 223,826 | — | (5,206,594 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| $ | 417,711,282 | $ | 1,928,157 | $ | 7,807 | $ | (5,185,629 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| (a) |
Includes net capital gain distributions, if applicable. |
| (b) |
Represents net shares purchased. |
| (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 rating 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.
| 26 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Mid-Cap Growth Equity Portfolio |
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: |
||||||||||||||||
|
Aerospace & Defense |
$ | 311,674,849 | $ | — | $ | — | $ | 311,674,849 | ||||||||
|
Automobiles |
85,371,870 | — | — | 85,371,870 | ||||||||||||
|
Banks |
47,463,063 | — | — | 47,463,063 | ||||||||||||
|
Capital Markets |
306,067,016 | — | — | 306,067,016 | ||||||||||||
|
Commercial Services & Supplies |
218,302,470 | — | — | 218,302,470 | ||||||||||||
|
Communications Equipment |
110,079,577 | — | — | 110,079,577 | ||||||||||||
|
Diversified Consumer Services |
180,767,505 | — | — | 180,767,505 | ||||||||||||
|
Diversified Telecommunication Services |
38,883,813 | — | — | 38,883,813 | ||||||||||||
|
Electronic Equipment, Instruments & |
||||||||||||||||
|
Components |
108,941,298 | — | — | 108,941,298 | ||||||||||||
|
Entertainment |
309,081,630 | — | — | 309,081,630 | ||||||||||||
|
Equity Real Estate Investment Trusts (REITs) |
129,018,275 | — | — | 129,018,275 | ||||||||||||
|
Health Care Equipment & Supplies |
645,976,497 | — | — | 645,976,497 | ||||||||||||
|
Hotels, Restaurants & Leisure |
94,397,732 | — | — | 94,397,732 | ||||||||||||
|
Interactive Media & Services |
141,936,251 | — | — | 141,936,251 | ||||||||||||
|
Internet & Direct Marketing Retail |
56,883,077 | — | — | 56,883,077 | ||||||||||||
|
IT Services |
435,499,727 | 92,856,888 | — | 528,356,615 | ||||||||||||
|
Leisure Products |
44,207,927 | 18,459,582 | — | 62,667,509 | ||||||||||||
|
Life Sciences Tools & Services |
101,007,124 | — | — | 101,007,124 | ||||||||||||
|
Machinery |
91,723,882 | — | — | 91,723,882 | ||||||||||||
|
Pharmaceuticals |
72,566,401 | — | — | 72,566,401 | ||||||||||||
|
Professional Services |
351,854,900 | — | — | 351,854,900 | ||||||||||||
|
Road & Rail |
— | 9,721,652 | — | 9,721,652 | ||||||||||||
|
Semiconductors & Semiconductor Equipment |
198,763,913 | — | — | 198,763,913 | ||||||||||||
|
Software |
646,781,568 | — | — | 646,781,568 | ||||||||||||
|
Specialty Retail |
23,740,530 | — | — | 23,740,530 | ||||||||||||
|
Textiles, Apparel & Luxury Goods |
77,789,614 | — | — | 77,789,614 | ||||||||||||
|
Preferred Stocks: |
||||||||||||||||
|
Internet & Direct Marketing Retail |
— | — | 19,033,830 | 19,033,830 | ||||||||||||
|
Software |
— | — | 2,793,556 | 2,793,556 | ||||||||||||
|
Short-Term Securities |
44,963,337 | — | — | 44,963,337 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Subtotal |
$ | 4,873,743,846 | $ | 121,038,122 | $ | 21,827,386 | $ | 5,016,609,354 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Investments Valued at NAV(a) |
287,440,891 | |||||||||||||||
|
|
|
|||||||||||||||
|
Total Investments |
$ | 5,304,050,245 | ||||||||||||||
|
|
|
|||||||||||||||
| (a) |
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. |
| S C H E D U L E S O F I N V E S T M E N T S | 27 |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Mid-Cap Growth Equity Portfolio |
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:
|
Preferred
Stocks |
||||
|
Assets: |
||||
|
Opening Balance, as of September 30, 2018 |
$ | 28,136,201 | ||
|
Transfers into Level 3 |
— | |||
|
Transfers out of Level 3 |
(25,475,671 | ) | ||
|
Accrued discounts/premiums |
— | |||
|
Net realized gain (loss) |
— | |||
|
Net change in unrealized appreciation (depreciation)(a)(b) |
2,586,853 | |||
|
Purchases |
16,580,003 | |||
|
Sales |
— | |||
|
|
|
|||
|
Closing Balance, as of September 30, 2019 |
$ | 21,827,386 | ||
|
|
|
|||
|
Net change in unrealized appreciation (depreciation) on investments still held at September 30, 2019(b) |
$ | 2,586,853 | ||
|
|
|
|||
| (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 September 30, 2019, is generally due to investments no longer held or categorized as Level 3 at period end. |
See notes to financial statements.
| 28 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Assets and Liabilities
September 30, 2019
| F I N A N C I A L S T A T E M E N T S | 29 |
Statements of Assets and Liabilities (continued)
September 30, 2019
|
BlackRock Advantage Large Cap Growth Fund |
BlackRock Advantage Small Cap Growth Fund |
BlackRock Mid-Cap Growth Equity Portfolio |
||||||||||
|
NET ASSET VALUE |
||||||||||||
|
Institutional |
||||||||||||
|
Net assets |
$ 79,563,668 | $ 396,388,129 | $ 2,700,531,393 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Shares outstanding(a) |
4,826,276 | 22,007,096 | 94,157,476 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Net asset value |
$ 16.49 | $ 18.01 | $ 28.68 | |||||||||
|
|
|
|
|
|
|
|||||||
| Service | ||||||||||||
|
Net assets |
$ 198,402 | $ 11,714,654 | $ 61,293,211 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Shares outstanding(a) |
12,262 | 798,248 | 2,364,331 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Net asset value |
$ 16.18 | $ 14.68 | $ 25.92 | |||||||||
|
|
|
|
|
|
|
|||||||
| Investor A | ||||||||||||
|
Net assets |
$ 699,246,899 | $ 178,846,673 | $ 1,335,466,751 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Shares outstanding(a) |
44,502,900 | 13,773,790 | 53,903,263 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Net asset value |
$ 15.71 | $ 12.98 | $ 24.78 | |||||||||
|
|
|
|
|
|
|
|||||||
| Investor C | ||||||||||||
|
Net assets |
$ 15,277,223 | $ 19,205,101 | $209,922,703 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Shares outstanding(a) |
1,144,387 | 3,393,471 | 10,925,353 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Net asset value |
$ 13.35 | $ 5.66 | $ 19.21 | |||||||||
|
|
|
|
|
|
|
|||||||
| Class K | ||||||||||||
|
Net assets |
$ 973,282 | $ 5,130,582 | $652,138,153 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Shares outstanding(a) |
59,032 | 284,799 | 22,691,104 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Net asset value |
$ 16.49 | $ 18.01 | $ 28.74 | |||||||||
|
|
|
|
|
|
|
|||||||
| Class R | ||||||||||||
|
Net assets |
$ 866,772 | $ 16,018,775 | $40,999,237 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Shares outstanding(a) |
53,097 | 1,235,557 | 1,684,341 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Net asset value |
$ 16.32 | $ 12.96 | $ 24.34 | |||||||||
|
|
|
|
|
|
|
|||||||
| (a) |
Unlimited number of shares authorized, $ 0.001 par value. |
See notes to financial statements.
| 30 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Year Ended September 30, 2019
See notes to financial statements.
| F I N A N C I A L S T A T E M E N T S | 31 |
Statements of Changes in Net Assets
| (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.
| 32 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
(For a share outstanding throughout each period)
| BlackRock Advantage Large Cap Growth Fund | ||||||||||||||||||||
| Institutional | ||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 (a) | 2016 (a) | 2015 (a) | ||||||||||||||||
|
Net asset value, beginning of year |
$ | 17.89 | $ | 15.20 | $ | 12.32 | $ | 12.07 | $ | 14.51 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment income(b) |
0.13 | 0.13 | 0.12 | 0.10 | 0.06 | |||||||||||||||
|
Net realized and unrealized gain (loss) |
(0.22 | ) | 3.52 | 2.87 | 1.06 | (0.25 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net increase (decrease) from investment operations |
(0.09 | ) | 3.65 | 2.99 | 1.16 | (0.19 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Distributions(c) |
||||||||||||||||||||
|
From net investment income |
(0.13 | ) | (0.08 | ) | (0.11 | ) | (0.07 | ) | (0.41 | ) | ||||||||||
|
From net realized gain |
(1.18 | ) | (0.88 | ) | — | (0.84 | ) | (1.84 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total distributions |
(1.31 | ) | (0.96 | ) | (0.11 | ) | (0.91 | ) | (2.25 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net asset value, end of year |
$ | 16.49 | $ | 17.89 | $ | 15.20 | $ | 12.32 | $ | 12.07 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total Return(d) |
||||||||||||||||||||
|
Based on net asset value |
0.41 | % | 25.31 | % | 24.43 | % | 9.75 | % | (2.15 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||
|
Total expenses |
0.87 | % | 0.86 | % | 1.10 | % | 1.14 | % | 1.11 | %(e) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total expenses after fees waived and/or reimbursed |
0.62 | % | 0.62 | % | 0.84 | % | 0.92 | % | 0.92 | %(e) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment income |
0.82 | % | 0.83 | % | 0.91 | % | 0.86 | % | 0.46 | %(e) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Supplemental Data |
||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 79,564 | $ | 74,886 | $ | 36,574 | $ | 37,417 | $ | 40,870 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Portfolio turnover rate |
154 | % | 162 | % | 130 | % | 36 | % | 156 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (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) |
Where applicable, assumes the reinvestment of distributions. |
| (e) |
Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.01%. |
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 33 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Advantage Large Cap Growth Fund (continued) | ||||||||||||||||||||
| Service | ||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 (a) | 2016 (a) | 2015 (a) | ||||||||||||||||
|
Net asset value, beginning of year |
$ | 17.57 | $ | 14.95 | $ | 12.12 | $ | 11.86 | $ | 14.29 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment income(b) |
0.09 | 0.09 | 0.08 | 0.06 | 0.01 | |||||||||||||||
|
Net realized and unrealized gain (loss) |
(0.22 | ) | 3.46 | 2.82 | 1.05 | (0.24 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net increase (decrease) from investment operations |
(0.13 | ) | 3.55 | 2.90 | 1.11 | (0.23 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Distributions(c) |
||||||||||||||||||||
|
From net investment income |
(0.08 | ) | (0.05 | ) | (0.07 | ) | (0.01 | ) | (0.36 | ) | ||||||||||
|
From net realized gain |
(1.18 | ) | (0.88 | ) | — | (0.84 | ) | (1.84 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total distributions |
(1.26 | ) | (0.93 | ) | (0.07 | ) | (0.85 | ) | (2.20 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net asset value, end of year |
$ | 16.18 | $ | 17.57 | $ | 14.95 | $ | 12.12 | $ | 11.86 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total Return(d) |
||||||||||||||||||||
|
Based on net asset value |
0.15 | % | 24.96 | % | 24.03 | % | 9.44 | % | (2.49 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||
|
Total expenses. |
0.98 | %(e) | 1.03 | % | 1.24 | % | 1.26 | %(e) | 1.33 | %(e),(f) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total expenses after fees waived and/or reimbursed |
0.87 | % | 0.87 | % | 1.11 | % | 1.24 | % | 1.23 | %(f) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment income |
0.57 | % | 0.55 | % | 0.59 | % | 0.54 | % | 0.10 | %(f) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Supplemental Data |
||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 198 | $ | 160 | $ | 189 | $ | 119 | $ | 108 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Portfolio turnover rate |
154 | % | 162 | % | 130 | % | 36 | % | 156 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (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) |
Where applicable, assumes the reinvestment of distributions. |
| (e) |
Includes recoupment of past waived and/or reimbursed fees. Excluding the recoupment of past waived and/or reimbursed fees, the ratios were as follows: |
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Expense ratios |
0.97 | % | N/A | N/A | 1.21 | % | 1.30 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (f) |
Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.01%. |
See notes to financial statements.
| 34 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Advantage Large Cap Growth Fund (continued) | ||||||||||||||||||||
| Investor A | ||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 (a) | 2016 (a) | 2015 (a) | ||||||||||||||||
|
Net asset value, beginning of year |
$ | 17.11 | $ | 14.59 | $ | 11.83 | $ | 11.61 | $ | 14.04 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment income(b) |
0.09 | 0.09 | 0.08 | 0.06 | 0.02 | |||||||||||||||
|
Net realized and unrealized gain (loss) |
(0.22 | ) | 3.37 | 2.75 | 1.02 | (0.24 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net increase (decrease) from investment operations |
(0.13 | ) | 3.46 | 2.83 | 1.08 | (0.22 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Distributions(c) |
||||||||||||||||||||
|
From net investment income |
(0.09 | ) | (0.06 | ) | (0.07 | ) | (0.02 | ) | (0.37 | ) | ||||||||||
|
From net realized gain |
(1.18 | ) | (0.88 | ) | — | (0.84 | ) | (1.84 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total distributions |
(1.27 | ) | (0.94 | ) | (0.07 | ) | (0.86 | ) | (2.21 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net asset value, end of year |
$ | 15.71 | $ | 17.11 | $ | 14.59 | $ | 11.83 | $ | 11.61 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total Return(d) |
||||||||||||||||||||
|
Based on net asset value |
0.15 | % | 24.98 | % | 24.03 | % | 9.39 | % | (2.46 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||
|
Total expenses |
1.12 | % | 1.12 | % | 1.35 | % | 1.42 | % | 1.41 | %(e) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total expenses after fees waived and/or reimbursed |
0.87 | % | 0.87 | % | 1.13 | % | 1.24 | % | 1.24 | %(e) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment income |
0.57 | % | 0.58 | % | 0.60 | % | 0.54 | % | 0.14 | %(e) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Supplemental Data |
||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 699,247 | $ | 730,996 | $ | 351,398 | $ | 323,297 | $ | 355,844 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Portfolio turnover rate |
154 | % | 162 | % | 130 | % | 36 | % | 156 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (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) |
Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
| (e) |
Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.01%. |
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 35 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Advantage Large Cap Growth Fund (continued) | ||||||||||||||||||||
| Investor C | ||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 (a) | 2016 (a) | 2015 (a) | ||||||||||||||||
|
Net asset value, beginning of year |
$ | 14.55 | $ | 12.53 | $ | 10.19 | $ | 10.16 | $ | 12.57 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment loss(b) |
(0.03 | ) | (0.03 | ) | (0.02 | ) | (0.02 | ) | (0.07 | ) | ||||||||||
|
Net realized and unrealized gain (loss) |
(0.17 | ) | 2.89 | 2.36 | 0.89 | (0.20 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net increase (decrease) from investment operations |
(0.20 | ) | 2.86 | 2.34 | 0.87 | (0.27 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Distributions(c) |
||||||||||||||||||||
|
From net investment income |
— | — | — | — | (0.30 | ) | ||||||||||||||
|
From net realized gain |
(1.00 | ) | (0.84 | ) | — | (0.84 | ) | (1.84 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total distributions |
(1.00 | ) | (0.84 | ) | — | (0.84 | ) | (2.14 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net asset value, end of year |
$ | 13.35 | $ | 14.55 | $ | 12.53 | $ | 10.19 | $ | 10.16 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total Return(d) |
||||||||||||||||||||
|
Based on net asset value |
(0.59 | )% | 24.09 | % | 22.96 | % | 8.63 | % | (3.26 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||
|
Total expenses |
1.85 | % | 1.87 | % | 2.12 | % | 2.17 | % | 2.15 | %(e) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total expenses after fees waived and/or reimbursed |
1.62 | % | 1.62 | % | 1.91 | % | 2.01 | % | 2.01 | %(e) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment loss |
(0.22 | )% | (0.19 | )% | (0.16 | )% | (0.23 | )% | (0.63 | )%(e) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Supplemental Data |
||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 15,277 | $ | 48,702 | $ | 46,804 | $ | 63,586 | $ | 72,966 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Portfolio turnover rate |
154 | % | 162 | % | 130 | % | 36 | % | 156 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (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) |
Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
| (e) |
Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.01%. |
See notes to financial statements.
| 36 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
|
BlackRock Advantage Large Cap Growth Fund (continued) |
||||||||
| Class K | ||||||||
|
Year Ended
09/30/2019 |
Period
from
|
|||||||
|
Net asset value, beginning of period |
$17.89 | $16.37 | ||||||
|
|
|
|
|
|||||
|
Net investment income(b) |
0.14 | 0.11 | ||||||
|
Net realized and unrealized gain (loss) |
(0.23 | ) | 1.41 | |||||
|
|
|
|
|
|||||
|
Net increase (decrease) from investment operations |
(0.09 | ) | 1.52 | |||||
|
|
|
|
|
|||||
|
Distributions(c) |
||||||||
|
From net investment income |
(0.13 | ) | — | |||||
|
From net realized gain |
(1.18 | ) | — | |||||
|
|
|
|
|
|||||
|
Total distributions |
(1.31 | ) | — | |||||
|
|
|
|
|
|||||
|
Net asset value, end of period |
$16.49 | $17.89 | ||||||
|
|
|
|
|
|||||
|
Total Return(d) |
||||||||
|
Based on net asset value |
0.47 | % | 9.29 | %(e) | ||||
|
|
|
|
|
|||||
|
Ratios to Average Net Assets |
||||||||
|
Total expenses |
0.71 | % | 0.72 | %(f) | ||||
|
|
|
|
|
|||||
|
Total expenses after fees waived and/or reimbursed |
0.57 | % | 0.57 | %(f) | ||||
|
|
|
|
|
|||||
|
Net investment income |
0.85 | % | 0.93 | %(f) | ||||
|
|
|
|
|
|||||
|
Supplemental Data |
||||||||
|
Net assets, end of period (000) |
$ 973 | $ 609 | ||||||
|
|
|
|
|
|||||
|
Portfolio turnover rate |
154 | % | 162 | %(g) | ||||
|
|
|
|
|
|||||
| (a) |
Commencement of operations. |
| (b) |
Based on average shares outstanding. |
| (c) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (d) |
Where applicable, assumes the reinvestment of distributions. |
| (e) |
Aggregate total return. |
| (f) |
Annualized. |
| (g) |
Portfolio turnover is representative of the Fund for the entire year. |
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 37 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Advantage Large Cap Growth Fund (continued) | ||||||||||||||||||||
| Class R | ||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 (a) | 2016 (a) | 2015 (a) | ||||||||||||||||
|
Net asset value, beginning of year |
$ | 17.69 | $ | 15.01 | $ | 12.17 | $ | 11.94 | $ | 14.41 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment income (loss)(b) |
0.05 | 0.05 | 0.04 | 0.02 | (0.03 | ) | ||||||||||||||
|
Net realized and unrealized gain (loss) |
(0.23 | ) | 3.49 | 2.84 | 1.05 | (0.25 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net increase (decrease) from investment operations |
(0.18 | ) | 3.54 | 2.88 | 1.07 | (0.28 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Distributions(c) |
||||||||||||||||||||
|
From net investment income |
(0.01 | ) | — | (0.04 | ) | — | (0.35 | ) | ||||||||||||
|
From net realized gain |
(1.18 | ) | (0.86 | ) | — | (0.84 | ) | (1.84 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total distributions |
(1.19 | ) | (0.86 | ) | (0.04 | ) | (0.84 | ) | (2.19 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net asset value, end of year |
$ | 16.32 | $ | 17.69 | $ | 15.01 | $ | 12.17 | $ | 11.94 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total Return(d) |
||||||||||||||||||||
|
Based on net asset value |
(0.15 | )% | 24.68 | % | 23.68 | % | 9.04 | % | (2.86 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||
|
Total expenses |
1.42 | % | 1.40 | % | 1.66 | % | 1.74 | % | 1.69 | %(e) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total expenses after fees waived and/or reimbursed |
1.12 | % | 1.12 | % | 1.45 | % | 1.60 | % | 1.60 | %(e) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment income (loss) |
0.33 | % | 0.30 | % | 0.28 | % | 0.20 | % | (0.23 | )%(e) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Supplemental Data |
||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 867 | $ | 1,864 | $ | 2,332 | $ | 1,875 | $ | 1,138 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Portfolio turnover rate |
154 | % | 162 | % | 130 | % | 36 | % | 156 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (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) |
Where applicable, assumes the reinvestment of distributions. |
| (e) |
Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.01%. |
See notes to financial statements.
| 38 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Advantage Small Cap Growth Fund | ||||||||||||||||||||
| Institutional | ||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Net asset value, beginning of year |
$ | 23.65 | $ | 21.37 | $ | 17.94 | $ | 17.82 | $ | 22.28 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment income(a) |
0.07 | 0.07 | 0.07 | 0.03 | 0.02 | |||||||||||||||
|
Net realized and unrealized gain (loss) |
(2.03 | ) | 4.48 | 3.37 | 1.11 | 0.49 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net increase (decrease) from investment operations |
(1.96 | ) | 4.55 | 3.44 | 1.14 | 0.51 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Distributions(b) |
||||||||||||||||||||
|
From net investment income |
(0.05 | ) | (0.09 | ) | (0.01 | ) | — | — | ||||||||||||
|
From net realized gain |
(3.63 | ) | (2.18 | ) | — | (1.02 | ) | (4.97 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total distributions |
(3.68 | ) | (2.27 | ) | (0.01 | ) | (1.02 | ) | (4.97 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net asset value, end of year |
$ | 18.01 | $ | 23.65 | $ | 21.37 | $ | 17.94 | $ | 17.82 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total Return(c) |
||||||||||||||||||||
|
Based on net asset value |
(6.80 | )% | 23.62 | % | 19.18 | % | 6.81 | % | 2.35 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||
|
Total expenses |
0.74 | % | 0.82 | % | 0.77 | % | 0.86 | % | 0.82 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total expenses after fees waived and/or reimbursed |
0.50 | % | 0.50 | % | 0.56 | % | 0.86 | % | 0.82 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment income |
0.40 | % | 0.32 | % | 0.34 | % | 0.20 | % | 0.12 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Supplemental Data |
||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 396,388 | $ | 502,400 | $ | 533,904 | $ | 490,215 | $ | 503,423 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Portfolio turnover rate |
120 | % | 129 | % | 100 | % | 103 | % | 137 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (a) |
Based on average shares outstanding. |
| (b) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) |
Where applicable, assumes the reinvestment of distributions. |
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 39 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Advantage Small Cap Growth Fund (continued) | ||||||||||||||||||||
| Service | ||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Net asset value, beginning of year |
$ | 20.07 | $ | 18.46 | $ | 15.53 | $ | 15.55 | $ | 20.05 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment income (loss)(a) |
0.02 | 0.01 | 0.01 | (0.01 | ) | (0.03 | ) | |||||||||||||
|
Net realized and unrealized gain (loss) |
(1.76 | ) | 3.81 | 2.92 | 0.97 | 0.43 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net increase (decrease) from investment operations |
(1.74 | ) | 3.82 | 2.93 | 0.96 | 0.40 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Distributions(b) |
||||||||||||||||||||
|
From net investment income |
(0.02 | ) | (0.03 | ) | — | — | — | |||||||||||||
|
From net realized gain |
(3.63 | ) | (2.18 | ) | — | (0.98 | ) | (4.90 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total distributions |
(3.65 | ) | (2.21 | ) | — | (0.98 | ) | (4.90 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net asset value, end of year |
$ | 14.68 | $ | 20.07 | $ | 18.46 | $ | 15.53 | $ | 15.55 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total Return(c) |
||||||||||||||||||||
|
Based on net asset value |
(6.98 | )% | 23.27 | % | 18.87 | % | 6.57 | % | 2.00 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||
|
Total expenses |
1.00 | % | 1.02 | % | 1.04 | % | 1.13 | %(d) | 1.12 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total expenses after fees waived and/or reimbursed |
0.75 | % | 0.75 | % | 0.82 | % | 1.13 | % | 1.12 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment income (loss) |
0.15 | % | 0.07 | % | 0.07 | % | (0.07 | )% | (0.17 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Supplemental Data |
||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 11,715 | $ | 15,257 | $ | 9,545 | $ | 12,054 | $ | 19,596 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Portfolio turnover rate |
120 | % | 129 | % | 100 | % | 103 | % | 137 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (a) |
Based on average shares outstanding. |
| (b) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) |
Where applicable, assumes the reinvestment of distributions. |
| (d) |
Includes recoupment of past waived and/or reimbursed fees with no financial impact to the expense ratios. |
See notes to financial statements.
| 40 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Advantage Small Cap Growth Fund (continued) | ||||||||||||||||||||
| Investor A | ||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Net asset value, beginning of year |
$ | 18.25 | $ | 16.97 | $ | 14.28 | $ | 14.38 | $ | 18.91 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment income (loss)(a) |
0.02 | 0.01 | 0.01 | (0.01 | ) | (0.03 | ) | |||||||||||||
|
Net realized and unrealized gain (loss) |
(1.65 | ) | 3.47 | 2.68 | 0.88 | 0.41 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net increase (decrease) from investment operations |
(1.63 | ) | 3.48 | 2.69 | 0.87 | 0.38 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Distributions(b) |
||||||||||||||||||||
|
From net investment income |
(0.01 | ) | (0.02 | ) | — | — | — | |||||||||||||
|
From net realized gain |
(3.63 | ) | (2.18 | ) | — | (0.97 | ) | (4.91 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total distributions |
(3.64 | ) | (2.20 | ) | — | (0.97 | ) | (4.91 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net asset value, end of year |
$ | 12.98 | $ | 18.25 | $ | 16.97 | $ | 14.28 | $ | 14.38 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total Return(c) |
||||||||||||||||||||
|
Based on net asset value |
(7.05 | )% | 23.27 | % | 18.84 | % | 6.57 | % | 2.01 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||
|
Total expenses |
1.00 | % | 1.11 | % | 1.07 | % | 1.14 | % | 1.13 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total expenses after fees waived and/or reimbursed |
0.75 | % | 0.75 | % | 0.82 | % | 1.14 | % | 1.13 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment income (loss) |
0.15 | % | 0.06 | % | 0.07 | % | (0.09 | )% | (0.17 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Supplemental Data |
||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 178,847 | $ | 223,619 | $ | 198,777 | $ | 250,357 | $ | 255,692 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Portfolio turnover rate |
120 | % | 129 | % | 100 | % | 103 | % | 137 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (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 the effects of any sales charges and assumes the reinvestment of distributions. |
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 41 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Advantage Small Cap Growth Fund (continued) | ||||||||||||||||||||
| Investor C | ||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Net asset value, beginning of year |
$ | 10.34 | $ | 10.48 | $ | 8.88 | $ | 9.37 | $ | 13.99 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment loss(a) |
(0.04 | ) | (0.07 | ) | (0.07 | ) | (0.08 | ) | (0.10 | ) | ||||||||||
|
Net realized and unrealized gain (loss) |
(1.07 | ) | 1.98 | 1.67 | 0.56 | 0.30 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net increase (decrease) from investment operations |
(1.11 | ) | 1.91 | 1.60 | 0.48 | 0.20 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Distributions from net realized gain(b) |
(3.57 | ) | (2.05 | ) | — | (0.97 | ) | (4.82 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net asset value, end of year |
$ | 5.66 | $ | 10.34 | $ | 10.48 | $ | 8.88 | $ | 9.37 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total Return(c) |
||||||||||||||||||||
|
Based on net asset value |
(7.78 | )% | 22.36 | % | 18.02 | % | 5.72 | % | 1.19 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||
|
Total expenses |
1.77 | % | 1.93 | % | 1.85 | % | 1.95 | % | 1.91 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total expenses after fees waived and/or reimbursed |
1.50 | % | 1.50 | % | 1.57 | % | 1.95 | % | 1.91 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment loss |
(0.62 | )% | (0.69 | )% | (0.69 | )% | (0.90 | )% | (0.96 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Supplemental Data |
||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 19,205 | $ | 35,847 | $ | 19,605 | $ | 23,689 | $ | 28,109 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Portfolio turnover rate |
120 | % | 129 | % | 100 | % | 103 | % | 137 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (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 the effects of any sales charges and assumes the reinvestment of distributions. |
See notes to financial statements.
| 42 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
|
BlackRock Advantage Small Cap Growth Fund (continued) |
||||||||
| Class K | ||||||||
|
Year Ended
09/30/2019 |
Period
from
|
|||||||
|
Net asset value, beginning of period |
$ | 23.65 | $ | 20.82 | ||||
|
|
|
|
|
|||||
|
Net investment income(b) |
0.09 | 0.05 | ||||||
|
Net realized and unrealized gain (loss) |
(2.04 | ) | 2.78 | |||||
|
|
|
|
|
|||||
|
Net increase (decrease) from investment operations |
(1.95 | ) | 2.83 | |||||
|
|
|
|
|
|||||
|
Distributions(c) |
||||||||
|
From net investment income |
(0.06 | ) | — | |||||
|
From net realized gain |
(3.63 | ) | — | |||||
|
|
|
|
|
|||||
|
Total distributions |
(3.69 | ) | — | |||||
|
|
|
|
|
|||||
|
Net asset value, end of period |
$ | 18.01 | $ | 23.65 | ||||
|
|
|
|
|
|||||
|
Total Return(d) |
||||||||
|
Based on net asset value |
(6.75 | )% | 13.59 | %(e) | ||||
|
|
|
|
|
|||||
|
Ratios to Average Net Assets |
||||||||
|
Total expenses |
0.60 | % | 0.67 | %(f)(g) | ||||
|
|
|
|
|
|||||
|
Total expenses after fees waived and/or reimbursed |
0.45 | % | 0.45 | %(f) | ||||
|
|
|
|
|
|||||
|
Net investment income |
0.52 | % | 0.30 | %(f) | ||||
|
|
|
|
|
|||||
|
Supplemental Data |
||||||||
|
Net assets, end of period (000) |
$ | 5,131 | $ | 2,221 | ||||
|
|
|
|
|
|||||
|
Portfolio turnover rate |
120 | % | 129 | %(h) | ||||
|
|
|
|
|
|||||
| (a) |
Commencement of operations. |
| (b) |
Based on average shares outstanding. |
| (c) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (d) |
Where applicable, assumes the reinvestment of distributions. |
| (e) |
Aggregate total return. |
| (f) |
Annualized. |
| (g) |
Offering, board realignment and consolidation and reorganization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 0.68%. |
| (h) |
Portfolio turnover is representative of the Fund for the entire year. |
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 43 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
|
BlackRock Advantage Small Cap Growth Fund (continued) |
||||||||
| Class R | ||||||||
|
Year Ended
09/30/2019 |
Period
from
|
|||||||
|
Net asset value, beginning of period |
$ | 18.22 | $ | 15.55 | ||||
|
|
|
|
|
|||||
|
Net investment loss(b) |
(0.01 | ) | (0.02 | ) | ||||
|
Net realized and unrealized gain (loss) |
(1.64 | ) | 2.69 | |||||
|
|
|
|
|
|||||
|
Net increase (decrease) from investment operations |
(1.65 | ) | 2.67 | |||||
|
|
|
|
|
|||||
|
Distributions from net realized gain(c) |
(3.61 | ) | — | |||||
|
|
|
|
|
|||||
|
Net asset value, end of period |
$ | 12.96 | $ | 18.22 | ||||
|
|
|
|
|
|||||
|
Total Return(d) |
||||||||
|
Based on net asset value |
(7.27 | )% | 17.17 | %(e) | ||||
|
|
|
|
|
|||||
|
Ratios to Average Net Assets |
||||||||
|
Total expenses |
1.30 | % | 1.38 | %(f)(g) | ||||
|
|
|
|
|
|||||
|
Total expenses after fees waived and/or reimbursed |
1.00 | % | 1.00 | %(f) | ||||
|
|
|
|
|
|||||
|
Net investment loss |
(0.10 | )% | (0.20 | )%(f) | ||||
|
|
|
|
|
|||||
|
Supplemental Data |
||||||||
|
Net assets, end of period (000) |
$ | 16,019 | $ | 23,175 | ||||
|
|
|
|
|
|||||
|
Portfolio turnover rate |
120 | % | 129 | %(h) | ||||
|
|
|
|
|
|||||
| (a) |
Commencement of operations. |
| (b) |
Based on average shares outstanding. |
| (c) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (d) |
Where applicable, assumes the reinvestment of distributions. |
| (e) |
Aggregate total return. |
| (f) |
Annualized. |
| (g) |
Offering, board realignment and consolidation and reorganization costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expenses would have been 1.39%. |
| (h) |
Portfolio turnover is representative of the Fund for the entire year. |
See notes to financial statements.
| 44 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Mid-Cap Growth Equity Portfolio | ||||||||||||||||||||
| Institutional | ||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Net asset value, beginning of year |
$ | 27.87 | $ | 22.10 | $ | 17.87 | $ | 16.42 | $ | 17.67 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment loss(a) |
(0.09 | ) | (0.11 | ) | (0.05 | )(b) | (0.12 | ) | (0.11 | ) | ||||||||||
|
Net realized and unrealized gain |
1.95 | 6.63 | 4.28 | 2.00 | 0.77 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net increase from investment operations |
1.86 | 6.52 | 4.23 | 1.88 | 0.66 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Distributions from net realized gain(c) |
(1.05 | ) | (0.75 | ) | — | (0.43 | ) | (1.91 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net asset value, end of year |
$ | 28.68 | $ | 27.87 | $ | 22.10 | $ | 17.87 | $ | 16.42 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total Return(d) |
||||||||||||||||||||
|
Based on net asset value |
7.43 | % | 30.34 | % | 23.67 | % | 11.60 | % | 4.37 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||
|
Total expenses |
0.87 | % | 0.93 | %(e) | 1.08 | %(e) | 1.11 | %(e) | 1.06 | %(e) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total expenses after fees waived and/or reimbursed |
0.80 | % | 0.86 | % | 1.08 | % | 1.08 | % | 1.05 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment loss |
(0.34 | )% | (0.45 | )% | (0.25 | )%(b) | (0.71 | )% | (0.61 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Supplemental Data |
||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 2,700,531 | $ | 1,063,328 | $ | 278,701 | $ | 99,759 | $ | 84,605 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Portfolio turnover rate |
38 | % | 43 | % | 59 | % | 81 | % | 95 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (a) |
Based on average shares outstanding. |
| (b) |
Net investment income per share and the ratio of net investment income to average net assets includes $0.06 per share and 0.35%, respectively, resulting from a special dividend. |
| (c) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (d) |
Where applicable, assumes the reinvestment of distributions. |
| (e) |
Includes recoupment of past waived and/or reimbursed fees. Excluding the recoupment of past waived and/or reimbursed fees, the ratios were as follows: |
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Expense ratios |
N/A | 0.93 | % | 1.07 | % | 1.10 | % | 1.06 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 45 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Mid-Cap Growth Equity Portfolio (continued) | ||||||||||||||||||||
| Service | ||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Net asset value, beginning of year |
$ | 25.30 | $ | 20.18 | $ | 16.35 | $ | 15.00 | $ | 16.34 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment loss(a) |
(0.15 | ) | (0.17 | ) | (0.12 | )(b) | (0.13 | ) | (0.16 | ) | ||||||||||
|
Net realized and unrealized gain |
1.76 | 6.04 | 3.95 | 1.82 | 0.71 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net increase from investment operations |
1.61 | 5.87 | 3.83 | 1.69 | 0.55 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Distributions from net realized gain(c) |
(0.99 | ) | (0.75 | ) | — | (0.34 | ) | (1.89 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net asset value, end of year |
$ | 25.92 | $ | 25.30 | $ | 20.18 | $ | 16.35 | $ | 15.00 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total Return(d) |
||||||||||||||||||||
|
Based on net asset value |
7.15 | % | 30.03 | % | 23.43 | % | 11.39 | % | 3.94 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||
|
Total expenses |
1.16 | % | 1.25 | %(e) | 1.29 | % | 1.26 | %(e) | 1.50 | %(e) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total expenses after fees waived and/or reimbursed |
1.05 | % | 1.12 | % | 1.29 | % | 1.25 | % | 1.48 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment loss |
(0.59 | )% | (0.73 | )% | (0.67 | )%(b) | (0.88 | )% | (1.00 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Supplemental Data |
||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 61,293 | $ | 33,768 | $ | 12,718 | $ | 1,343 | $ | 1,384 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Portfolio turnover rate |
38 | % | 43 | % | 59 | % | 81 | % | 95 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (a) |
Based on average shares outstanding. |
| (b) |
Net investment income per share and the ratio of net investment income to average net assets includes $0.06 per share and 0.35%, respectively, resulting from a special dividend. |
| (c) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (d) |
Where applicable, assumes the reinvestment of distributions. |
| (e) |
Includes recoupment of past waived and/or reimbursed fees. Excluding the recoupment of past waived and/or reimbursed fees, the ratios were as follows: |
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Expense ratios |
N/A | 1.25 | % | N/A | 1.24 | % | 1.42 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
See notes to financial statements.
| 46 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Mid-Cap Growth Equity Portfolio (continued) | ||||||||||||||||||||
| Investor A | ||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Net asset value, beginning of year |
$ | 24.22 | $ | 19.30 | $ | 15.66 | $ | 14.43 | $ | 15.78 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment loss(a) |
(0.14 | ) | (0.18 | ) | (0.10 | )(b) | (0.15 | ) | (0.14 | ) | ||||||||||
|
Net realized and unrealized gain |
1.68 | 5.79 | 3.74 | 1.76 | 0.67 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net increase from investment operations |
1.54 | 5.61 | 3.64 | 1.61 | 0.53 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Distributions from net realized gain(c) |
(0.98 | ) | (0.69 | ) | — | (0.38 | ) | (1.88 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net asset value, end of year |
$ | 24.78 | $ | 24.22 | $ | 19.30 | $ | 15.66 | $ | 14.43 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total Return(d) |
||||||||||||||||||||
|
Based on net asset value |
7.17 | % | 29.98 | % | 23.24 | % | 11.29 | % | 4.01 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||
|
Total expenses |
1.16 | % | 1.29 | %(e) | 1.41 | %(e) | 1.45 | % | 1.43 | %(e) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total expenses after fees waived and/or reimbursed |
1.05 | % | 1.19 | % | 1.39 | % | 1.39 | % | 1.39 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment loss |
(0.58 | )% | (0.82 | )% | (0.59 | )%(b) | (1.02 | )% | (0.89 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Supplemental Data |
||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 1,335,467 | $ | 801,263 | $ | 525,736 | $ | 394,544 | $ | 350,962 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Portfolio turnover rate |
38 | % | 43 | % | 59 | % | 81 | % | 95 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (a) |
Based on average shares outstanding. |
| (b) |
Net investment income per share and the ratio of net investment income to average net assets includes $0.06 per share and 0.35%, respectively, resulting from a special dividend. |
| (c) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (d) |
Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
| (e) |
Includes recoupment of past waived and/or reimbursed fees. Excluding the recoupment of past waived and/or reimbursed fees, the ratios were as follows: |
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Expense ratios |
N/A | 1.26 | % | 1.39 | % | N/A | 1.43 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 47 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Mid-Cap Growth Equity Portfolio (continued) | ||||||||||||||||||||
| Investor C | ||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Net asset value, beginning of year |
$ | 19.04 | $ | 15.36 | $ | 12.55 | $ | 11.68 | $ | 13.16 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment loss(a) |
(0.24 | ) | (0.26 | ) | (0.18 | )(b) | (0.20 | ) | (0.21 | ) | ||||||||||
|
Net realized and unrealized gain |
1.28 | 4.57 | 2.99 | 1.41 | 0.55 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net increase from investment operations |
1.04 | 4.31 | 2.81 | 1.21 | 0.34 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Distributions from net realized gain(c) |
(0.87 | ) | (0.63 | ) | — | (0.34 | ) | (1.82 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net asset value, end of year |
$ | 19.21 | $ | 19.04 | $ | 15.36 | $ | 12.55 | $ | 11.68 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total Return(d) |
||||||||||||||||||||
|
Based on net asset value |
6.33 | % | 29.05 | % | 22.39 | % | 10.48 | % | 3.23 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||
|
Total expenses |
1.86 | % | 1.94 | %(e) | 2.11 | %(e) | 2.14 | %(e) | 2.16 | %(e) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total expenses after fees waived and/or reimbursed |
1.80 | % | 1.88 | % | 2.10 | % | 2.12 | % | 2.16 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment loss |
(1.33 | )% | (1.49 | )% | (1.30 | )%(b) | (1.75 | )% | (1.67 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Supplemental Data |
||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 209,923 | $ | 164,083 | $ | 72,814 | $ | 52,723 | $ | 44,719 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Portfolio turnover rate |
38 | % | 43 | % | 59 | % | 81 | % | 95 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (a) |
Based on average shares outstanding. |
| (b) |
Net investment income per share and the ratio of net investment income to average net assets includes $0.06 per share and 0.35%, respectively, resulting from a special dividend. |
| (c) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (d) |
Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
| (e) |
Includes recoupment of past waived and/or reimbursed fees. Excluding the recoupment of past waived and/or reimbursed fees, the ratios were as follows: |
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Expense ratios |
N/A | 1.94 | % | 2.10 | % | 2.13 | % | 2.12 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
See notes to financial statements.
| 48 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Mid-Cap Growth Equity Portfolio (continued) | ||||||||||||||||||||
| Class K | ||||||||||||||||||||
| Year Ended September 30, |
Period
from 03/28/2016 (a) to 09/30/2016 |
|||||||||||||||||||
|
2019 |
2018 |
2017 |
||||||||||||||||||
|
Net asset value, beginning of period |
$ | 27.93 | $ | 22.14 | $ | 17.88 | $ | 15.57 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net investment loss(b) |
(0.09 | ) | (0.07 | ) | (0.03 | )(c) | (0.05 | ) | ||||||||||||
|
Net realized and unrealized gain |
1.96 | 6.62 | 4.29 | 2.36 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net increase from investment operations |
1.87 | 6.55 | 4.26 | 2.31 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Distributions from net realized gain(d) |
(1.06 | ) | (0.76 | ) | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net asset value, end of period |
$ | 28.74 | $ | 27.93 | $ | 22.14 | $ | 17.88 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Total Return(e) |
||||||||||||||||||||
|
Based on net asset value |
7.47 | % | 30.46 | % | 23.83 | % | 14.84 | %(f) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||
|
Total expenses |
0.76 | %(g) | 0.80 | %(g) | 0.95 | % | 0.98 | %(h) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Total expenses after fees waived and/or reimbursed |
0.75 | % | 0.76 | % | 0.95 | % | 0.97 | %(h) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net investment loss |
(0.31 | )% | (0.29 | )% | (0.17 | )%(c) | (0.59 | )%(h) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Supplemental Data |
||||||||||||||||||||
|
Net assets, end of period (000) |
$ | 652,138 | $ | 139,138 | $ | 4,103 | $ | 230 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Portfolio turnover rate |
38 | % | 43 | % | 59 | % | 81 | %(i) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| (a) |
Commencement of operations. |
| (b) |
Based on average shares outstanding. |
| (c) |
Net investment income per share and the ratio of net investment income to average net assets includes $0.06 per share and 0.35%, respectively, resulting from a special dividend. |
| (d) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (e) |
Where applicable, assumes the reinvestment of distributions. |
| (f) |
Aggregate total return. |
| (g) |
Includes recoupment of past waived and/or reimbursed fees. Excluding the recoupment of past waived and/or reimbursed fees, the ratios were as follows: |
|
Year Ended September 30, |
Period from
03/28/2016 (a) to 09/30/2016 |
|||||||||||||||
|
2019 |
2018 |
2017 |
||||||||||||||
|
Expense ratios |
0.75 | % | 0.80 | % | N/A | N/A | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (h) |
Annualized. |
| (i) |
Portfolio turnover is representative of the Fund for the entire year. |
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 49 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Mid-Cap Growth Equity Portfolio (continued) | ||||||||||||||||||||
| Class R | ||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Net asset value, beginning of year |
$ | 23.83 | $ | 19.02 | $ | 15.47 | $ | 14.27 | $ | 15.63 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment loss(a) |
(0.19 | ) | (0.22 | ) | (0.14 | )(b) | (0.18 | ) | (0.18 | ) | ||||||||||
|
Net realized and unrealized gain |
1.65 | 5.69 | 3.69 | 1.72 | 0.68 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net increase from investment operations |
1.46 | 5.47 | 3.55 | 1.54 | 0.50 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Distributions from net realized gain(c) |
(0.95 | ) | (0.66 | ) | — | (0.34 | ) | (1.86 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net asset value, end of year |
$ | 24.34 | $ | 23.83 | $ | 19.02 | $ | 15.47 | $ | 14.27 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total Return(d) |
||||||||||||||||||||
|
Based on net asset value |
6.89 | % | 29.63 | % | 22.95 | % | 10.94 | % | 3.79 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||
|
Total expenses |
1.47 | % | 1.59 | %(e) | 1.76 | % | 1.78 | % | 1.73 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total expenses after fees waived and/or reimbursed |
1.30 | % | 1.43 | % | 1.65 | % | 1.65 | % | 1.65 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net investment loss |
(0.83 | )% | (1.05 | )% | (0.86 | )%(b) | (1.28 | )% | (1.15 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Supplemental Data |
||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 40,999 | $ | 22,880 | $ | 10,177 | $ | 7,646 | $ | 7,495 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Portfolio turnover rate |
38 | % | 43 | % | 59 | % | 81 | % | 95 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (a) |
Based on average shares outstanding. |
| (b) |
Net investment income per share and the ratio of net investment income to average net assets includes $0.06 per share and 0.35%, respectively, resulting from a special dividend. |
| (c) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (d) |
Where applicable, assumes the reinvestment of distributions. |
| (e) |
Includes recoupment of past waived and/or reimbursed fees. Excluding the recoupment of past waived and/or reimbursed fees, the ratios were as follows: |
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Expense ratios |
N/A | 1.58 | % | N/A | N/A | N/A | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
See notes to financial statements.
| 50 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
| 1. |
ORGANIZATION |
BlackRock FundsSM (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust is organized as a Massachusetts business trust. The following, each of which is a series of the Trust, are referred to herein collectively as the “Funds” or individually as a “Fund”:
| Fund Name | Herein Referred To As | Diversification Classification | ||||||
|
BlackRock Advantage Large Cap Growth Fund |
Advantage Large Cap Growth | Diversified | ||||||
|
BlackRock Advantage Small Cap Growth Fund |
Advantage Small Cap Growth | Diversified | ||||||
|
BlackRock Mid-Cap Growth Equity Portfolio |
Mid-Cap Growth Equity | Diversified | ||||||
Each Fund offers multiple classes of shares. All classes of shares have identical voting, dividend, liquidation and other rights and are subject to the same terms and conditions, except that certain classes bear expenses related to the shareholder servicing and distribution of such shares. Institutional, Service and Class K Shares are sold without a sales charge and only to certain eligible investors. Investor A Shares are generally sold with an initial sales charge, and may be subject to a contingent deferred sales charge (“CDSC”) for certain redemptions where no initial sales charge was paid at the time of purchase. Investor C Shares may be subject to a 1.00% CDSC if redeemed within one year of purchase. Class R Shares are sold without a sales charge and only to certain employer-sponsored retirement plans. Service, Investor A, Investor C and Class R Shares bear certain expenses related to shareholder servicing of such shares, and Investor C and Class R Shares also bear certain expenses related to the distribution of such shares. Investor A and Investor C Shares are generally available through financial intermediaries. Effective November 8, 2018, the Funds adopted an automatic conversion feature whereby Investor C Shares held for approximately ten years will be automatically converted into Investor A Shares. Each class has exclusive voting rights with respect to matters relating to its shareholder servicing and distribution expenditures (except that Investor C shareholders may vote on material changes to the Investor A Shares distribution and service plan).
| Share Class | Initial Sales Charge | CDSC | Conversion Privilege | |||||||||
|
Institutional, Service, Class K and Class R Shares |
No | No | None | |||||||||
|
Investor A Shares |
Yes | No | (a) | None | ||||||||
|
Investor C Shares |
No | Yes | To Investor A Shares after approximately 10 years | |||||||||
| (a) |
Investor A Shares may be subject to a CDSC for certain redemptions where no initial sales charge was paid at the time of purchase. |
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 equity, multi-asset, index and money market funds referred to as the BlackRock Multi-Asset Complex.
Prior Year Reorganization: The Board of Trustees of the Trust (the “Board”), the Boards of BlackRock Series, Inc. and BlackRock Master LLC and the shareholders of BlackRock Small Cap Growth Fund II ( a series of BlackRock Series, Inc.) (the ‘‘Target Fund’’) approved the in-kind liquidation of BlackRock Master Small Cap Growth Portfolio (a series of BlackRock Master LLC) into the Target Fund, followed by the reorganization of the Target Fund into Advantage Small Cap Growth. As a result, Advantage Small Cap Growth acquired substantially all of the assets and assumed certain stated liabilities of the Target Fund in exchange for an equal aggregate value of Advantage Small Cap Growth shares.
Each shareholder of the Target Fund received shares of Advantage Small Cap Growth with the same class designation and an aggregate net asset value (“NAV”) of such shareholder’s Target Fund shares, as determined at the close of business on March 2, 2018.
The reorganization was accomplished by a tax-free exchange of shares of Advantage Small Cap Growth in the following amounts and at the following conversion ratios:
|
Target Fund’s Share Class |
Shares
Prior to
|
Conversion
Ratio |
Advantage
Small Cap Growth’s Share Class |
Shares of
Advantage Small Cap Growth |
||||||||||||
|
Institutional |
3,867,557 | 0.69634503 | Institutional | 2,693,154 | ||||||||||||
|
Investor A |
4,713,399 | 0.83917948 | Investor A | 3,955,388 | ||||||||||||
|
Investor C |
1,423,695 | 1.12273161 | Investor C | 1,598,427 | ||||||||||||
|
Class R |
1,681,044 | 0.75084988 | Class R | 1,262,212 | ||||||||||||
The Target Fund’s net assets and composition of net assets on March 2, 2018, the valuation date of the reorganization, was as follows:
| Net Assets |
Paid-in Capital |
Accumulated Net
Realized Loss |
Net
Unrealized
|
|||||||||
|
$149,432,449 |
$ | 127,508,082 | $(696,134 | ) | $ | 22,620,501 | ||||||
For financial reporting purposes, assets received and shares issued by Advantage Small Cap Growth were recorded at fair value. However, the cost basis of the investments received from the Target Fund was carried forward to align ongoing reporting of Advantage Small Cap Growth’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.
| N O T E S T O F I N A N C I A L S T A T E M E N T S | 51 |
Notes to Financial Statements (continued)
The net assets of Advantage Small Cap Growth before the reorganization were $520,081,873. The aggregate net assets of Advantage Small Cap Growth immediately after the reorganization amounted to $669,514,322. The Target Fund’s fair value and cost of investments prior to the reorganization was as follows:
|
Fair Value of
Investments |
Cost of
Investments |
|||||||
|
Target Fund |
$ | 148,513,365 | $ | 125,892,864 | ||||
The purpose of this transaction was to combine three funds managed by the Manager with the same or substantially similar (but not identical) investment objectives, investment policies, strategies, risks and restrictions. The reorganization was a tax-free event and was effective on March 5, 2018.
Assuming the reorganization had been completed on October 1, 2017, the beginning of the fiscal reporting period of Advantage Small Cap Growth, the pro forma results of operations for the year ended September 30, 2018, are as follows:
| • |
Net investment income: $1,586,829 |
| • |
Net realized and change in unrealized gain/loss on investments: $140,556,889 |
| • |
Net increase in net assets resulting from operations: $142,143,718 |
Because the combined investment portfolios have been managed as a single integrated portfolio since the reorganization was completed, it is not practicable to separate the amounts of revenue and earnings of the Target Fund that have been included in Advantage Small Cap Growth’s Statement of Operations since March 5, 2018.
Reorganization costs incurred by Advantage Small Cap Growth in connection with the reorganization were expensed by Advantage Small Cap Growth. The Manager reimbursed the Fund $88,500.
| 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 executed. 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, are recognized on an accrual basis. Income, expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.
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., futures contracts) 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. Doing so allows the investment 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: Distributions paid by the Funds are recorded on the ex-dividend date. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.
Offering Costs: Offering costs are amortized over a 12-month period beginning with the commencement of operations of a class of shares.
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 or its classes are charged to that Fund or the applicable class. 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. Expenses directly related to the Funds and other shared expenses prorated to the Funds are allocated daily to each class based on their relative net assets or other appropriate methods.
| 52 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
The Funds have an arrangement with their custodian whereby credits are earned on uninvested cash balances, which could be used to reduce custody fees and/or overdraft charges. The Funds 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 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.
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. |
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 and 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.
| • |
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. |
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 pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.
For investments in equity or debt issued by privately held companies or funds (“Private Company” or collectively, the “Private Companies”) and other Fair Valued Investments, the fair valuation approaches that are used by the Global Valuation Committee and 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
| N O T E S T O F I N A N C I A L S T A T E M E N T S | 53 |
Notes to Financial Statements (continued)
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 statement 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) |
| • |
Level 3 — Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Global Valuation Committee’s 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. 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 September 30, 2019, 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 |
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.
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 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.
| 54 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
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:
| Advantage Large Cap Growth | ||||||||||||||||||||
| Counterparty |
Securities Loaned
at Value |
Cash Collateral
Received (a) |
Net
Amount |
|||||||||||||||||
|
Barclays Capital, Inc. |
$ | 335,492 | $ | (335,492 | ) | $ | — | |||||||||||||
|
UBS Securities LLC |
347,183 | (347,183 | ) | — | ||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| $ | 682,675 | $ | (682,675 | ) | $ | — | ||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Advantage Small Cap Growth | ||||||||||||||||||||
| Counterparty |
Securities Loaned
at Value (b) |
Cash Collateral
Received (a) |
Net
Amount (c) |
|||||||||||||||||
|
Barclays Capital, Inc. |
$ | 994,597 | $ | (994,597 | ) | $ | — | |||||||||||||
|
Citigroup Global Markets, Inc. |
14,430,785 | (14,430,785 | ) | — | ||||||||||||||||
|
Credit Suisse Securities (USA) LLC |
1,384,154 | (1,329,723 | ) | 54,431 | ||||||||||||||||
|
Deutsche Bank Securities, Inc. |
1,965,113 | (1,965,113 | ) | — | ||||||||||||||||
|
Goldman Sachs & Co. |
6,042,425 | (6,042,425 | ) | — | ||||||||||||||||
|
Jefferies LLC |
544,724 | (544,724 | ) | — | ||||||||||||||||
|
JP Morgan Securities LLC |
14,620,755 | (14,620,755 | ) | — | ||||||||||||||||
|
National Financial Services LLC |
1,047,291 | (1,047,291 | ) | — | ||||||||||||||||
|
SG Americas Securities LLC |
161,116 | (159,805 | ) | 1,311 | ||||||||||||||||
|
State Street Bank & Trust Co. |
918,904 | (918,904 | ) | — | ||||||||||||||||
|
TD Prime Services LLC |
13,149 | (13,149 | ) | — | ||||||||||||||||
|
UBS Securities LLC |
68,250 | (60,752 | ) | 7,498 | ||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| $ | 42,191,263 | $ | (42,128,023 | ) | $ | 63,240 | ||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Mid-Cap Growth Equity | ||||||||||||||||||||
| Counterparty |
Securities Loaned
at Value |
Cash Collateral
Received (a) |
Net
Amount (c) |
|||||||||||||||||
|
Barclays Capital, Inc. |
$ | 26,028,550 | $ | (26,028,550 | ) | $ | — | |||||||||||||
|
BofA Securities, Inc. |
2,834,000 | (2,834,000 | ) | — | ||||||||||||||||
|
Citigroup Global Markets, Inc. |
37,169,561 | (37,169,561 | ) | — | ||||||||||||||||
|
Credit Suisse Securities (USA) LLC |
5,866,183 | (5,716,731 | ) | 149,452 | ||||||||||||||||
|
Deutsche Bank Securities, Inc. |
1,672,100 | (1,672,100 | ) | — | ||||||||||||||||
|
Goldman Sachs & Co. |
9,726,281 | (9,726,281 | ) | — | ||||||||||||||||
|
Jefferies LLC |
669,980 | (669,980 | ) | — | ||||||||||||||||
|
JP Morgan Securities LLC |
118,916,650 | (118,916,650 | ) | — | ||||||||||||||||
|
Morgan Stanley & Co. LLC |
79,335,458 | (79,335,458 | ) | — | ||||||||||||||||
|
SG Americas Securities LLC |
280,566 | (280,566 | ) | — | ||||||||||||||||
|
State Street Bank & Trust Co. |
233,207 | (233,207 | ) | — | ||||||||||||||||
|
TD Prime Services LLC |
1,067,710 | (1,067,710 | ) | — | ||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| $ | 283,800,246 | $ | (283,650,794 | ) | $ | 149,452 | ||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| (a) |
Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by each Fund is disclosed in the Funds’ Statements of Assets and Liabilities. |
| (b) |
Securities loaned with a value of $58,893 have been sold and are pending settlement as of September 30, 2019. |
| (c) |
The market value of the loaned securities is determined as of September 30, 2019. Additional collateral is delivered to the Fund 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 to the extent 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. Such losses are borne entirely by the Funds.
| 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).
| N O T E S T O F I N A N C I A L S T A T E M E N T S | 55 |
Notes to Financial Statements (continued)
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, are 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.
| 6. |
INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Investment Advisory: The Trust, on behalf of the Funds, entered into an Investment Advisory Agreement with the Manager, the Funds’ investment adviser and an indirect, wholly-owned subsidiary of BlackRock, Inc. (“BlackRock”), to provide investment advisory 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 at an annual rate equal to the following percentages of the average daily value of each Fund’s net assets:
| Investment Advisory Fees | ||||||||||||
| Average Daily Net Assets | Advantage Large Cap Growth | Advantage Small Cap Growth | Mid-Cap Growth Equity | |||||||||
|
First $1 Billion |
0.570 | % | 0.450 | % | 0.700 | % | ||||||
|
$1 Billion — $3 Billion |
0.540 | 0.420 | 0.660 | |||||||||
|
$3 Billion — $5 Billion |
0.510 | 0.410 | 0.630 | |||||||||
|
$5 Billion — $10 Billion |
0.500 | 0.390 | 0.610 | |||||||||
|
Greater than $10 Billion |
0.480 | 0.380 | 0.600 | |||||||||
Service and Distribution Fees: The Trust, on behalf of the Funds, entered into a Distribution Agreement and a Distribution and Service Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of the Manager. Pursuant to the Distribution and Service Plan and in accordance with Rule 12b-1 under the 1940 Act, each Fund pays BRIL ongoing service and distribution fees. The fees are accrued daily and paid monthly at annual rates based upon the average daily net assets of the relevant share class of each Fund as follows:
| Service | Investor A | Investor C | Class R | |||||||||||||
|
Service Fee |
0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | ||||||||
|
Distribution Fee |
— | — | 0.75 | 0.25 | ||||||||||||
BRIL and broker-dealers, pursuant to sub-agreements with BRIL, provide shareholder servicing and distribution services to the Funds. The ongoing service and/or distribution fee compensates BRIL and each broker-dealer for providing shareholder servicing and/or distribution related services to shareholders.
For the year ended September 30, 2019, the following table shows the class specific service and distribution fees borne directly by each share class of each Fund:
| Service | Investor A | Investor C | Class R | Total | ||||||||||||||||
|
Advantage Large Cap Growth |
$ 434 | $1,722,650 | $ 203,495 | $ 6,314 | $1,932,893 | |||||||||||||||
|
Advantage Small Cap Growth |
32,093 | 479,609 | 228,636 | 92,567 | 832,905 | |||||||||||||||
|
Mid-Cap Growth Equity |
120,835 | 2,477,483 | 1,730,732 | 158,678 | 4,487,728 | |||||||||||||||
Administration: The Trust, on behalf of the Funds, entered into an Administration Agreement with the Manager, an indirect, wholly-owned subsidiary of BlackRock, to provide administrative services. For these services, the Manager receives an administration fee computed daily and payable monthly, based on a percentage of the average daily net assets of each Fund. The administration fee, which is shown as administration in the Statements of Operations, is paid at the annual rates below.
| Average Daily Net Assets | Administration Fee | |||
|
First $500 Million |
0.0425 | % | ||
|
$500 Million — $1 Billion |
0.0400 | |||
|
$1 Billion — $2 Billion |
0.0375 | |||
|
$2 Billion — $4 Billion |
0.0350 | |||
|
$4 Billion — $13 Billion |
0.0325 | |||
|
Greater than $13 Billion |
0.0300 | |||
In addition, the Manager charges each of the share classes an administration fee, which is shown as administration — class specific in the Statements of Operations, at an annual rate of 0.02% of the average daily net assets of each respective class.
| 56 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
For the year ended September 30, 2019, the following table shows the class specific administration fees borne directly by each share class of each Fund:
|
|
||||||||||||||||||||||||||||
| Institutional | Service | Investor A | Investor C | Class K | Class R | Total | ||||||||||||||||||||||
|
Advantage Large Cap Growth |
$ 14,777 | $ 35 | $137,665 | $4,092 | $ 161 | $ 253 | $156,983 | |||||||||||||||||||||
|
Advantage Small Cap Growth |
81,582 | 2,572 | 38,454 | 4,594 | 560 | 3,704 | 131,466 | |||||||||||||||||||||
|
Mid-Cap Growth Equity |
352,108 | 9,637 | 197,640 | 34,512 | 69,922 | 6,330 | 670,149 | |||||||||||||||||||||
Transfer Agent: Pursuant to written agreements, certain financial intermediaries, some of which may be affiliates, provide the Funds with sub-accounting, recordkeeping, sub-transfer agency and other administrative services with respect to servicing of underlying investor accounts. For these services, these entities receive an asset-based fee or an annual fee per shareholder account, which will vary depending on share class and/or net assets. For the year ended September 30, 2019, the Funds paid the following amounts to affiliates of BlackRock in return for these services, which are included in transfer agent — class specific in the Statements of Operations:
| Institutional | Service | Investor C | Investor A | Total | ||||||||||||||||
|
Advantage Large Cap Growth |
$ — | $— | $— | $ 36 | $ 36 | |||||||||||||||
|
Advantage Small Cap Growth |
3,113 | — | — | 7,083 | 10,196 | |||||||||||||||
|
Mid-Cap Growth Equity |
536 | 3 | 3 | 1,803 | 2,345 | |||||||||||||||
The Manager maintains a call center that is responsible for providing certain shareholder services to the Funds. Shareholder services include responding to inquiries and processing purchases and sales based upon instructions from shareholders. For the year ended September 30, 2019, each Fund reimbursed the Manager the following amounts for costs incurred in running the call center, which are included in transfer agent — class specific in the Statements of Operations:
| Institutional | Investor A | Investor C | Class K | Class R | Total | |||||||||||||||||||
|
Advantage Large Cap Growth |
$1,453 | $57,009 | $2,164 | $24 | $ 15 | $ 60,665 | ||||||||||||||||||
|
Advantage Small Cap Growth |
1,354 | 8,846 | 2,527 | — | 7 | 12,734 | ||||||||||||||||||
|
Mid-Cap Growth Equity |
5,658 | 98,771 | 6,468 | 977 | 568 | 112,442 | ||||||||||||||||||
For the year ended September 30, 2019, the following table shows the class specific transfer agent fees borne directly by each share class of each Fund:
| Institutional | Service | Investor A | Investor C | Class K | Class R | Total | ||||||||||||||||||||||
|
Advantage Large Cap Growth |
$ | 127,854 | $ | 59 | $ | 1,250,069 | $ | 32,206 | $ | 128 | $ | 2,813 | $ | 1,413,129 | ||||||||||||||
|
Advantage Small Cap Growth |
644,507 | 21,351 | 326,933 | 42,815 | 703 | 39,464 | 1,075,773 | |||||||||||||||||||||
|
Mid-Cap Growth Equity |
2,197,415 | 77,333 | 1,548,824 | 189,934 | 24,369 | 68,564 | 4,106,439 | |||||||||||||||||||||
Other Fees: For the year ended September 30, 2019, affiliates earned underwriting discounts, direct commissions and dealer concessions on sales of each Fund’s Investor A Shares as follows:
|
Advantage Large Cap Growth |
$ | 7,892 | ||
|
Advantage Small Cap Growth |
11,874 | |||
|
Mid-Cap Growth Equity. |
166,236 |
For the year ended September 30, 2019, affiliates received CDSCs as follows:
| Investor A | Investor C | |||||||
|
Advantage Large Cap Growth |
$ | — | $ | 629 | ||||
|
Advantage Small Cap Growth |
2,576 | 1,071 | ||||||
|
Mid-Cap Growth Equity |
33,132 | 40,584 | ||||||
Expense Limitations, Waivers, Reimbursements, and Recoupments: 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. These amounts are included in fees waived and/or reimbursed by the Manager in the Statements of Operations. For the year ended September 30, 2019, the amounts waived were as follows:
|
Advantage Large Cap Growth |
$ | 5,254 | ||
|
Advantage Small Cap Growth. |
4,232 | |||
|
Mid-Cap Growth Equity |
40,285 |
The Manager has contractually agreed to waive its investment advisory fee with respect to any portion of each Fund’s assets invested in affiliated equity and fixed-income mutual funds and affiliated exchange-traded funds that have a contractual management fee through January 31, 2020. These contractual agreements may be terminated upon 90 days’ notice by a majority of the trustees who are not “interested persons” of the Trust, as defined in the 1940 Act (“Independent Trustees”), or by a vote of a majority of the outstanding voting securities of a Fund. For the year ended September 30, 2019, there were no fees waived and/or reimbursed by the Manager pursuant to this arrangement.
The Funds have incurred expenses in connection with the realignment and consolidation of the boards of trustees of certain BlackRock-advised funds. The Manager has voluntarily agreed to reimburse the 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 September 30, 2019, the amounts reimbursed to Advantage Large Cap Growth, Advantage Small Cap Growth and Mid-Cap Growth Equity
| N O T E S T O F I N A N C I A L S T A T E M E N T S | 57 |
Notes to Financial Statements (continued)
were $12,955, $23,378 and $31,497, respectively.
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 Growth |
Advantage
Small Cap Growth |
Mid-Cap Growth Equity | ||||||||||||||
|
Contractual(a) |
Contractual(b) |
Contractual(b) |
||||||||||||||
|
Institutional |
0.62% | 0.50% | 0.80% | |||||||||||||
|
Service |
0.87 | 0.75 | 1.05 | |||||||||||||
|
Investor A |
0.87 | 0.75 | 1.05 | |||||||||||||
|
Investor C |
1.62 | 1.50 | 1.80 | |||||||||||||
|
Class K |
0.57 | 0.45 | 0.75 | |||||||||||||
|
Class R |
1.12(c) | 1.00 | 1.30 | |||||||||||||
| (a) |
The Manager has agreed not to reduce or discontinue these contractual expense limitations through January 31, 2020 or January 31, 2029 with respect to Class R Shares, unless approved by the Board, including a majority of the Independent Trustees, or by a vote of a majority of the outstanding voting securities of the Fund. |
| (b) |
The Manager has agreed not to reduce or discontinue these contractual expense limitations through January 31, 2020, unless approved by the Board, including a majority of the Independent Trustees, or by a vote of a majority of the outstanding voting securities of the Fund. |
| (c) |
On February 1 of each year, the waiver agreement will renew automatically for an additional one year so that the agreement will have a perpetual ten-year term. |
For the year ended September 30, 2019, the amounts included in fees waived and/or reimbursed by the Manager in the Statements of Operations were as follows:
|
Advantage Large Cap Growth |
$ | 788,207 | ||
|
Advantage Small Cap Growth |
712,398 | |||
|
Mid-Cap Growth Equity. |
479 |
These amounts waived and/or reimbursed are included in administration fees waived — class specific and transfer agent fees waived and/or reimbursed — class specific, respectively, in the Statements of Operations. For the year ended September 30, 2019, class specific expense waivers and/or reimbursements are as follows:
| Administration Fees Waived | Institutional | Service | Investor A | Investor C | Class K | Class R | Total | |||||||||||||||||||||
|
Advantage Large Cap Growth |
$ 14,776 | $ 12 | $137,667 | $ 4,092 | $ 160 | $ 253 | $156,960 | |||||||||||||||||||||
|
Advantage Small Cap Growth |
81,582 | 2,572 | 38,454 | 4,594 | 560 | 3,704 | 131,466 | |||||||||||||||||||||
|
Mid-Cap Growth Equity |
352,108 | 9,637 | 197,640 | 34,512 | 16,142 | 6,330 | 616,369 | |||||||||||||||||||||
|
Transfer Agent Fees Waived
and/or Reimbursed |
Institutional | Service | Investor A | Investor C | Class K | Class R | Total | |||||||||||||||||||||
|
Advantage Large Cap Growth |
$ 90,852 | $ 5 | $907,426 | $20,936 | $128 | $ 2,175 | $1,021,522 | |||||||||||||||||||||
|
Advantage Small Cap Growth |
440,637 | 14,871 | 230,047 | 30,424 | 703 | 30,177 | 746,859 | |||||||||||||||||||||
|
Mid-Cap Growth Equity |
898,343 | 42,221 | 832,903 | 66,804 | 293 | 46,152 | 1,886,716 | |||||||||||||||||||||
With respect to the contractual expense limitations, if during a Fund’s fiscal year the operating expenses of a share class, that at any time during the prior two fiscal years received a waiver and/or reimbursement from the Manager, are less than the current expense limitation for that share class, the Manager is entitled to be reimbursed by such share class up to the lesser of: (a) the amount of fees waived and/or expenses reimbursed during those prior two fiscal years under the agreement and (b) an amount not to exceed either the current expense limitation of that share class or the expense limitation of the share class in effect at the time that the share class received the applicable waiver and/or reimbursement, provided that:
| (1) |
each Fund, of which the share class is a part, has more than $50 million in assets for the fiscal year, and |
| (2) |
the Manager or an affiliate continues to serve as a Fund’s investment adviser or administrator. |
This repayment applies only to the contractual expense limitation on net expenses and does not apply to the contractual investment advisory fee waiver described above or any voluntary waivers that may be in effect from time to time.
For the year ended September 30, 2019, the Manager recouped the following fund level and class specific waivers and/or reimbursements previously recorded by the Funds:
| Institutional | Service | Investor A | Investor C | Class K | Class R | Total | ||||||||||||||||||||||
|
Advantage Large Cap Growth |
$— | $10 | $— | $— | $ — | $— | $ 10 | |||||||||||||||||||||
|
Mid-Cap Growth Equity |
— | — | — | — | 11,199 | — | 11,199 | |||||||||||||||||||||
| 58 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
As of September 30, 2019, the fund level and class specific waivers and/or reimbursements subject to possible future recoupment under the expense limitation agreement are as follows:
| Expiring September 30, | ||||||||
| 2020 | 2021 | |||||||
|
Advantage Large Cap Growth |
||||||||
|
Fund Level |
$ | 718,605 | $ | 788,207 | ||||
|
Institutional |
92,795 | 105,628 | ||||||
|
Service |
125 | 17 | ||||||
|
Investor A |
1,035,400 | 1,045,093 | ||||||
|
Investor C |
71,784 | 25,028 | ||||||
|
Class K |
82 | 288 | ||||||
|
Class R |
3,790 | 2,428 | ||||||
|
Advantage Small Cap Growth |
||||||||
|
Fund Level |
838,627 | 712,398 | ||||||
|
Institutional |
833,174 | 522,219 | ||||||
|
Service |
12,224 | 17,443 | ||||||
|
Investor A |
406,681 | 268,501 | ||||||
|
Investor C |
78,145 | 35,018 | ||||||
|
Class K |
617 | 1,263 | ||||||
|
Class R |
26,794 | 33,881 | ||||||
|
Mid-Cap Growth Equity |
||||||||
|
Fund Level |
49,873 | 479 | ||||||
|
Institutional |
362,118 | 1,250,451 | ||||||
|
Service |
28,246 | 51,858 | ||||||
|
Investor A |
637,698 | 1,030,543 | ||||||
|
Investor C |
59,885 | 101,316 | ||||||
|
Class K |
3,068 | 16,435 | ||||||
|
Class R |
22,044 | 52,482 | ||||||
The following fund level and class specific waivers and/or reimbursements previously recorded by the Funds, which were subject to recoupment by the Manager, expired on September 30, 2019:
|
Advantage Large Cap Growth |
||||
|
Fund Level |
$ | 279,221 | ||
|
Institutional |
76,078 | |||
|
Service |
78 | |||
|
Investor A |
538,512 | |||
|
Investor C |
83,866 | |||
|
Class R |
3,297 | |||
|
Advantage Small Cap Growth |
||||
|
Fund Level |
442,467 | |||
|
Institutional |
774,512 | |||
|
Service |
16,209 | |||
|
Investor A |
380,309 | |||
|
Investor c |
46,398 | |||
|
Mid-Cap Growth Equity |
||||
|
Investor A |
85,403 | |||
|
Class R |
8,909 | |||
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%ofthe 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 the current securities lending agreement, each Fund retains 73.5% 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 BlackRock Multi-Asset Complex in a calendar year exceeds a specified threshold, each Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 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.
| N O T E S T O F I N A N C I A L S T A T E M E N T S | 59 |
Notes to Financial Statements (continued)
Prior to January 1, 2019, each Fund retained 71.5% of securities lending income (which excluded collateral investment expenses) and the amount retained could 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 a complex of open-end funds referred to as the Equity-Liquidity Complex in a calendar year exceeded a specified threshold, the Fund would retain for the remainder of that calendar year 75% of securities lending income (which excluded collateral investment expenses), and the amount retained could never be less than 65% 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 September 30, 2019, each Fund paid BIM the following amounts for securities lending agent services:
|
Advantage Large Cap Growth |
$ | 21,748 | ||
|
Advantage Small Cap Growth |
65,926 | |||
|
Mid-Cap Growth Equity |
147,259 | |||
Trustees and Officers: Certain trustees and/or officers of the Trust are trustees and/or officers of BlackRock or its affiliates. The Funds reimburse the Manager for a portion of the compensation paid to the Funds’ Chief Compliance Officer, which is included in Trustees and Officer in the Statements of Operations.
| 7. |
PURCHASES AND SALES |
For the year ended September 30, 2019, purchases and sales of investments, excluding short-term securities, were as follows:
|
Advantage Large
Cap Growth |
Advantage Small
Cap Growth |
Mid-Cap Growth Equity |
||||||||||
|
Purchases |
$1,205,491,812 | $792,961,343 | $3,738,000,827 | |||||||||
|
Sales |
1,265,199,451 | 906,612,409 | 1,256,250,971 | |||||||||
| 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 September 30, 2019. 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 September 30, 2019, 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.
U.S. 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 period end, the following permanent differences attributable to net operating losses and non-deductible expenses were reclassified to the following accounts:
|
Advantage Large
Cap Growth |
Advantage Small
Cap Growth |
Mid-Cap
Growth Equity |
||||||||||
|
Paid-in capital |
$(16,687 | ) | $(18,288 | ) | $(1,153,095 | ) | ||||||
|
Accumulated earnings |
16,687 | 18,288 | 1,153,095 | |||||||||
The tax character of distributions paid was as follows:
|
Advantage Large
Cap Growth |
Advantage Small
Cap Growth (a) |
Mid-Cap
Growth Equity |
||||||||||
|
Ordinary income |
||||||||||||
|
09/30/19 |
$51,815,343 | $ 53,234,295 | $40,022,297 | |||||||||
|
09/30/18 |
$ 4,859,696 | $ 6,456,557 | $ 5,102,842 | |||||||||
|
Long-term capital gains 09/30/19 |
10,063,226 | 82,891,785 | 57,853,891 | |||||||||
|
09/30/18 |
43,139,615 | 70,940,019 | 29,370,949 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Total |
||||||||||||
|
09/30/19 |
$61,878,569 | $136,126,080 | $97,876,188 | |||||||||
|
|
|
|
|
|
|
|||||||
|
09/30/18 |
$47,999,311 | $ 77,396,576 | $34,473,791 | |||||||||
|
|
|
|
|
|
|
|||||||
| (a) |
Distribution amounts may include a portion of the proceeds from redeemed shares. |
| 60 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
As of period end, the tax components of accumulated net earnings were as follows:
|
Advantage Large
Cap Growth |
Advantage Small
Cap Growth |
Mid-Cap Growth Equity |
||||||||||
|
Undistributed ordinary income |
$ 6,719,609 | $ 1,188,788 | $ — | |||||||||
|
Undistributed long-term capital gains |
20,167,683 | 37,767,164 | 23,133,104 | |||||||||
|
Net unrealized gains(a) |
123,882,726 | 33,871,069 | 747,406,013 | |||||||||
|
|
|
|
|
|
|
|||||||
| $150,770,018 | $72,827,021 | $770,539,117 | ||||||||||
|
|
|
|
|
|
|
|||||||
| (a) |
The differences between book-basis and tax-basis net unrealized gains were attributable primarily to the tax deferral of losses on wash sales, the realization for tax purposes of unrealized gains on investments in passive foreign investment companies, the realization for tax purposes of unrealized gains/losses on certain futures contracts and the timing and recognition of partnership income. |
As of September 30, 2019, 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 Growth |
Advantage Small
Cap Growth |
Mid-Cap Growth Equity |
||||||||||
|
Tax cost |
$672,730,635 | $636,898,391 | $ | 4,542,464,150 | ||||||||
|
|
|
|
|
|
|
|||||||
|
Gross unrealized appreciation |
$132,902,930 | $ 82,807,155 | $ | 873,677,221 | ||||||||
|
Gross unrealized depreciation |
(9,032,816 | ) | (49,095,571 | ) | (112,091,126 | ) | ||||||
|
|
|
|
|
|
|
|||||||
|
Net unrealized appreciation |
$123,870,114 | $ 33,711,584 | $ | 761,586,095 | ||||||||
|
|
|
|
|
|
|
|||||||
| 9. |
BANK BORROWINGS |
The Trust, on behalf of the Funds, 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 2020 unless extended or renewed. Prior to April 18, 2019, 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 September 30, 2019, the Funds did not borrow under the credit agreement.
| 10. |
PRINCIPAL RISKS |
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.
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. An illiquid investment is any investment that a Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. A Fund may experience difficulty in selling illiquid investments in a timely manner at the price that it believes 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
| N O T E S T O F I N A N C I A L S T A T E M E N T S | 61 |
Notes to Financial Statements (continued)
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.
With exchange-traded futures, 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 with 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, Advantage Large Cap Growth and Mid-Cap Growth Equity invested a significant portion of their assets in securities in the information technology sector and Advantage Small Cap Growth invested a significant portion of its assets in securities in the health care sector. Changes in economic conditions affecting such sectors would have a greater impact on the Funds and could affect the value, income and/or liquidity of positions in such securities.
| 11. |
CAPITAL SHARE TRANSACTIONS |
Transactions in capital shares for each class were as follows:
| Year Ended 09/30/19 | Year Ended 09/30/18 | |||||||||||||||||||
| Advantage Large Cap Growth | Shares | Amount | Shares | Amount | ||||||||||||||||
|
Institutional |
||||||||||||||||||||
|
Shares sold |
1,417,588 | $ | 22,049,536 | 3,601,409 | $ | 56,894,145 | ||||||||||||||
|
Shares issued in reinvestment of distributions |
368,193 | 5,382,985 | 255,779 | 3,811,099 | ||||||||||||||||
|
Shares redeemed |
(1,146,041 | ) | (18,321,402 | ) | (2,077,371 | ) | (33,173,476 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net increase |
639,740 | $ | 9,111,119 | 1,779,817 | $ | 27,531,768 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Service |
||||||||||||||||||||
|
Shares sold |
5,103 | $ | 72,800 | 1,442 | $ | 22,529 | ||||||||||||||
|
Shares issued in reinvestment of distributions |
798 | 11,470 | 790 | 11,594 | ||||||||||||||||
|
Shares redeemed |
(2,748 | ) | (38,251 | ) | (5,764 | ) | (92,467 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net increase (decrease) |
3,153 | $ | 46,019 | (3,532 | ) | $ | (58,344 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Investor A |
||||||||||||||||||||
|
Shares issued from conversion(a) |
— | $ | — | 25,487 | $ | 372,621 | ||||||||||||||
|
Shares sold and automatic conversion of shares |
6,662,252 | 98,680,539 | 25,326,040 | 382,314,969 | ||||||||||||||||
|
Shares issued in reinvestment of distributions |
3,864,428 | 53,947,453 | 2,812,294 | 40,187,674 | ||||||||||||||||
|
Shares redeemed |
(8,739,543 | ) | (133,123,440 | ) | (9,532,359 | ) | (146,966,634 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net increase |
1,787,137 | $ | 19,504,552 | 18,631,462 | $ | 275,908,630 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Investor B |
||||||||||||||||||||
|
Shares issued in reinvestment of distributions |
— | $ | — | 1,864 | $ | 23,163 | ||||||||||||||
|
Shares converted(a) |
— | — | (29,387 | ) | (372,621 | ) | ||||||||||||||
|
Shares redeemed and automatic conversion of shares |
— | — | (769 | ) | (10,047 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net increase (decrease) |
— | $ | — | (28,292 | ) | $ | (359,505 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Investor C |
||||||||||||||||||||
|
Shares sold |
184,277 | $ | 1,733,438 | 226,432 | $ | 2,397,773 | ||||||||||||||
|
Shares issued in reinvestment of distributions |
70,938 | 1,408,299 | 200,984 | 3,019,063 | ||||||||||||||||
|
Shares redeemed and automatic conversion of shares |
(2,457,686 | ) | (32,944,701 | ) | (814,678 | ) | (10,761,745 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net decrease |
(2,202,471 | ) | $ | (29,802,964 | ) | (387,262 | ) | $ | (5,344,909 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| 62 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
| Year Ended 09/30/19 | Period from 01/25/18(b) to 09/30/18 | |||||||||||||||||||||||||||
| Advantage Large Cap Growth (continued) | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
|
Class K |
||||||||||||||||||||||||||||
|
Shares sold |
25,965 | $399,000 | 34,044 | $555,945 | ||||||||||||||||||||||||
|
Shares issued in reinvestment of distributions |
1,964 | 28,695 | — | — | ||||||||||||||||||||||||
|
Shares redeemed and automatic conversion of shares |
(2,941 | ) | (48,101 | ) | — | — | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Net increase |
24,988 | $379,594 | 34,044 | $555,945 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Year Ended 09/30/18 | ||||||||||||||||||||||||||||
|
Class R |
||||||||||||||||||||||||||||
|
Shares sold |
13,537 | $ 208,300 | 24,765 | $ 398,186 | ||||||||||||||||||||||||
|
Shares issued in reinvestment of distributions |
7,473 | 108,590 | 6,947 | 102,816 | ||||||||||||||||||||||||
|
Shares redeemed |
(73,310 | ) | (1,147,635 | ) | (81,737 | ) | (1,321,049 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Net decrease |
(52,300 | ) | $ (830,745 | ) | (50,025 | ) | $ (820,047 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Total Net Increase (Decrease) |
200,247 | $(1,592,425) | 19,976,212 | $297,413,538 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| (a) |
On December 27, 2017, the Fund’s Investor B Shares converted into Investor A Shares. |
| (b) |
Commencement of operations. |
| Advantage Small Cap Growth | ||||||||||||||||||||||||||||
|
Institutional |
||||||||||||||||||||||||||||
|
Shares issued in the reorganization(a) |
— | $ — | 2,693,154 | $ 54,175,322 | ||||||||||||||||||||||||
|
Shares sold |
6,450,881 | 115,836,092 | 7,459,845 | 159,591,602 | ||||||||||||||||||||||||
|
Shares issued in reinvestment of distributions |
4,092,957 | 67,370,100 | 2,686,146 | 52,138,094 | ||||||||||||||||||||||||
|
Shares redeemed |
(9,779,328 | ) | (178,127,806 | ) | (16,578,752 | ) | (339,426,024 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Net increase (decrease) |
764,510 | $ 5,078,386 | (3,739,607 | ) | $ (73,521,006 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Service |
||||||||||||||||||||||||||||
|
Shares sold |
182,363 | $ 2,696,164 | 507,817 | $ 9,064,845 | ||||||||||||||||||||||||
|
Shares issued in reinvestment of distributions |
207,722 | 2,791,794 | 67,208 | 1,109,597 | ||||||||||||||||||||||||
|
Shares redeemed |
(351,903 | ) | (5,249,510 | ) | (331,998 | ) | (5,711,164 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Net increase |
38,182 | $ 238,448 | 243,027 | $ 4,463,278 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Investor A |
||||||||||||||||||||||||||||
|
Shares issued in the reorganization(a) |
— | $ — | 3,955,388 | $ 61,496,207 | ||||||||||||||||||||||||
|
Shares sold |
3,380,899 | 45,870,296 | 2,782,360 | 47,352,230 | ||||||||||||||||||||||||
|
Shares issued in reinvestment of distributions |
3,700,056 | 43,993,503 | 1,214,293 | 18,226,535 | ||||||||||||||||||||||||
|
Shares redeemed |
(5,559,666 | ) | (73,084,085 | ) | (7,414,658 | ) | (124,130,577 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Net increase |
1,521,289 | $ 16,779,714 | 537,383 | $ 2,944,395 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Investor C |
||||||||||||||||||||||||||||
|
Shares issued in the reorganization(a) |
— | $ — | 1,598,427 | $14,136,701 | ||||||||||||||||||||||||
|
Shares sold |
539,522 | 3,199,311 | 398,594 | 3,853,849 | ||||||||||||||||||||||||
|
Shares issued in reinvestment of distributions |
1,742,820 | 9,097,526 | 427,457 | 3,654,759 | ||||||||||||||||||||||||
|
Shares redeemed and automatic conversion of shares |
(2,356,800 | ) | (16,761,791 | ) | (828,059 | ) | (7,832,496 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Net increase (decrease) |
(74,458 | ) | $ (4,464,954 | ) | 1,596,419 | $13,812,813 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Period from 01/25/18(b) to 09/30/18 | ||||||||||||||||||||||||||||
|
Class K |
||||||||||||||||||||||||||||
|
Shares sold |
337,013 | $ 6,313,553 | 101,265 | $2,100,912 | ||||||||||||||||||||||||
|
Shares issued in reinvestment of distributions |
19,118 | 314,677 | — | — | ||||||||||||||||||||||||
|
Shares redeemed |
(165,215 | ) | (3,008,110 | ) | (7,382 | ) | (165,454 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Net increase |
190,916 | $ 3,620,120 | 93,883 | $1,935,458 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| N O T E S T O F I N A N C I A L S T A T E M E N T S | 63 |
Notes to Financial Statements (continued)
| Year Ended 09/30/19 | Period from 03/02/18(b) to 09/30/18 | |||||||||||||||||||
| Advantage Small Cap Growth (continued) | Shares | Amount | Shares | Amount | ||||||||||||||||
|
Class R |
||||||||||||||||||||
|
Shares issued in the reorganization(a) |
— | $ | — | 1,262,212 | $ | 19,624,219 | ||||||||||||||
|
Shares sold |
343,297 | 4,624,723 | 319,633 | 5,418,768 | ||||||||||||||||
|
Shares issued in reinvestment of distributions |
357,385 | 4,252,884 | — | — | ||||||||||||||||
|
Shares redeemed |
(736,783 | ) | (10,134,255 | ) | (310,187 | ) | (5,296,947 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net increase (decrease) |
(36,101 | ) | $ | (1,256,648 | ) | 1,271,658 | $ | 19,746,040 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Total Net Increase (Decrease) |
2,404,338 | $ | 19,995,066 | 2,763 | $ | (30,619,022 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| (a) |
See Note 1 regarding the reorganization. |
| (b) |
Commencement of operations. |
| Year Ended 09/30/18 | ||||||||||||||||||||
| Mid-Cap Growth Equity | Shares | Amount | ||||||||||||||||||
|
Institutional |
||||||||||||||||||||
|
Shares sold |
77,104,859 | $ | 2,090,482,380 | 31,599,757 | $ | 793,697,302 | ||||||||||||||
|
Shares issued in reinvestment of distributions |
1,898,609 | 45,281,831 | 475,089 | 10,565,979 | ||||||||||||||||
|
Shares redeemed |
(22,995,193 | ) | (606,312,188 | ) | (6,536,298 | ) | (162,975,834 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net increase |
56,008,275 | $ | 1,529,452,023 | 25,538,548 | $ | 641,287,447 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Service |
||||||||||||||||||||
|
Shares sold |
1,790,116 | $ | 44,014,646 | 914,203 | $ | 20,382,806 | ||||||||||||||
|
Shares issued in reinvestment of distributions |
64,877 | 1,401,341 | 29,088 | 588,451 | ||||||||||||||||
|
Shares redeemed |
(825,133 | ) | (20,739,416 | ) | (239,035 | ) | (5,358,089 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net increase |
1,029,860 | $ | 24,676,571 | 704,256 | $ | 15,613,168 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Investor A |
||||||||||||||||||||
|
Shares issued from conversion(a) |
— | $ | — | 7,908 | $ | 155,723 | ||||||||||||||
|
Shares sold and automatic conversion of shares |
32,742,208 | 775,528,504 | 10,722,312 | 232,664,964 | ||||||||||||||||
|
Shares issued in reinvestment of distributions |
1,655,927 | 34,178,259 | 967,678 | 18,743,908 | ||||||||||||||||
|
Shares redeemed |
(13,577,841 | ) | (313,360,429 | ) | (5,852,082 | ) | (125,006,657 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net increase |
20,820,294 | $ | 496,346,334 | 5,845,816 | $ | 126,557,938 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Investor B |
||||||||||||||||||||
|
Shares issued in reinvestment of distributions |
— | $ | — | 369 | $ | 5,708 | ||||||||||||||
|
Shares converted(a) |
— | — | (9,900 | ) | (155,723 | ) | ||||||||||||||
|
Shares redeemed and automatic conversion of shares |
— | — | (106 | ) | (1,686 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net increase (decrease) |
— | $ | — | (9,637 | ) | $ | (151,701 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Investor C |
||||||||||||||||||||
|
Shares sold |
5,584,965 | $ | 101,748,422 | 4,581,287 | $ | 78,834,775 | ||||||||||||||
|
Shares issued in reinvestment of distributions |
443,988 | 7,151,409 | 209,966 | 3,214,573 | ||||||||||||||||
|
Shares redeemed and automatic conversion of shares |
(3,721,184 | ) | (65,694,126 | ) | (914,709 | ) | (15,671,858 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net increase |
2,307,769 | $ | 43,205,705 | 3,876,544 | $ | 66,377,490 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Class K |
||||||||||||||||||||
|
Shares sold |
20,683,547 | $ | 567,677,643 | 5,188,963 | $ | 131,749,703 | ||||||||||||||
|
Shares issued in reinvestment of distributions |
227,587 | 5,437,051 | 11,156 | 248,432 | ||||||||||||||||
|
Shares redeemed |
(3,201,951 | ) | (86,697,184 | ) | (403,546 | ) | (10,564,657 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net increase |
17,709,183 | $ | 486,417,510 | 4,796,573 | $ | 121,433,478 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| 64 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
| Year Ended 09/30/19 | Year Ended 09/30/18 | |||||||||||||||||||
| Mid-Cap Growth Equity (continued) | Shares | Amount | Shares | Amount | ||||||||||||||||
|
Class R |
||||||||||||||||||||
|
Shares sold |
1,092,886 | $ | 24,805,586 | 640,978 | $ | 13,936,491 | ||||||||||||||
|
Shares issued in reinvestment of distributions |
50,247 | 1,021,014 | 21,280 | 406,455 | ||||||||||||||||
|
Shares redeemed |
(418,800 | ) | (9,534,032 | ) | (237,240 | ) | (5,063,184 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net increase |
724,333 | $ | 16,292,568 | 425,018 | $ | 9,279,762 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Total Net Increase |
98,599,714 | $ | 2,596,390,711 | 41,177,118 | $ | 980,397,582 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| (a) |
On December 27, 2017, the Fund’s Investor B Shares converted into Investor A Shares. |
As of September 30, 2019, shares owned by BlackRock Financial Management, Inc., an affiliate of the Funds, were as follows:
| Shares |
Advantage
Large Cap Growth |
Advantage
Small Cap Growth |
||||||
|
Class K |
12,217 | 9,606 | ||||||
| 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 September 30, 2018 were classified as follows:
| Share Class |
Net Investment
Income |
Net Realized
Gain |
||||||||
|
Advantage Large Cap Growth |
Institutional | $ 353,658 | $ 3,686,629 | |||||||
| Service | 598 | 10,995 | ||||||||
| Investor A | 2,565,760 | 38,216,794 | ||||||||
| Investor B | — | 23,111 | ||||||||
| Investor C | — | 3,038,950 | ||||||||
| Class R | — | 102,816 | ||||||||
|
Advantage Small Cap Growth |
Institutional | 2,200,554 | 51,976,169 | |||||||
| Service | 15,763 | 1,093,835 | ||||||||
| Investor A | 133,790 | 18,280,982 | ||||||||
| Investor C | — | 3,695,483 | ||||||||
|
Mid-Cap Growth Equity |
Institutional | — | 10,878,492 | |||||||
| Service | — | 588,451 | ||||||||
| Investor A | — | 19,108,122 | ||||||||
| Investor B | — | 5,707 | ||||||||
| Investor C | — | 3,228,373 | ||||||||
| Class K | — | 258,191 | ||||||||
| Class R | — | 406,455 | ||||||||
Undistributed (distributions in excess of) net investment income as of September 30, 2018 was as follows:
|
Undistributed
(Distributions in Excess of) Net Investment Income |
||||
|
Advantage Large Cap Growth |
$ 3,168,694 | |||
|
Advantage Small Cap Growth |
752,156 | |||
|
Mid-Cap Growth Equity |
(4,853,683 | ) | ||
| 13. |
SUBSEQUENT EVENTS |
Management’s evaluation of the impact of all subsequent events on the Funds’ financial statements was completed through the date the financial statements were issued and the following item was noted:
On November 13, 2019, the Board approved a change in the fiscal year-end of Advantage Large Cap Growth, effective as of May 31, 2020, from September 30 to May 31.
| N O T E S T O F I N A N C I A L S T A T E M E N T S | 65 |
Report of Independent Registered Public Accounting Firm
To the Shareholders of BlackRock Advantage Large Cap Growth Fund, BlackRock Advantage Small Cap Growth Fund, and BlackRock Mid-Cap Growth Equity Portfolio and the Board of Trustees of BlackRock FundsSM:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statements of assets and liabilities of BlackRock Advantage Large Cap Growth Fund, BlackRock Advantage Small Cap Growth Fund, and BlackRock Mid-Cap Growth Equity Portfolio of BlackRock FundsSM (the “Funds”), including the schedules of investments, as of September 30, 2019, the related statements of operations 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. For BlackRock Advantage Large Cap Growth Fund, the presented financial highlights for each of the three years in the period ended September 30, 2017 were consolidated. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Funds as of September 30, 2019, and the results of their operations 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 audit 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 September 30, 2019, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
Deloitte & Touche LLP
Boston, Massachusetts
November 20, 2019
We have served as the auditor of one or more BlackRock investment companies since 1992.
| 66 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
During the fiscal year ended September 30, 2019, the following information is provided with respect to the distributions paid:
|
Advantage Large
Cap Growth |
Advantage Small
Cap Growth |
Mid-Cap
Growth Equity |
||||||||||
|
Qualified Dividend Income for Individuals(a) |
17.74 | % | 7.94 | % | 10.56 | % | ||||||
|
Dividends Qualifying for the Dividends Received Deduction for Corporations(a) |
17.71 | 7.89 | 9.80 | |||||||||
|
Qualified Short-Term Capital Gains for Non-U.S. Residents(b) |
91.83 | 97.68 | 100.00 | |||||||||
|
Long-term capital gains distributed to shareholders of record on December 4, 2018 |
$0.205334 | $2.230075 | $0.594738 | |||||||||
| (a) |
The Funds hereby designate the percentage indicated above or the maximum amount allowable by law. |
| (b) |
Represents the portion of the taxable ordinary income dividends eligible for exemption from U.S. withholding tax for nonresident aliens and foreign corporations. |
| I M P O R T A N T T A X I N F O R M A T I O N | 67 |
Disclosure of Investment Advisory Agreement
The Board of Trustees (the “Board,” the members of which are referred to as “Board Members”) of BlackRock Funds (the “Trust”) met in person on April 17, 2019 (the “April Meeting”) and May 14-15, 2019 (the “May Meeting”) to consider the approval of the investment advisory agreement (the “Agreement”) between the Trust, on behalf of BlackRock Advantage Large Cap Growth Fund (“Advantage Large Cap Growth Fund”), BlackRock Advantage Small Cap Growth Fund (“Advantage Small Cap Growth Fund”) and BlackRock Mid-Cap Growth Equity Portfolio (“Mid-Cap Growth Equity Portfolio,” and together with Advantage Large Cap Growth Fund and Advantage Small Cap Growth Fund, the “Funds”), each a series of the Trust, and BlackRock Advisors, LLC (the “Manager” or “BlackRock”), the Trust’s investment advisor.
Activities and Composition of the Board
On the date of the May Meeting, the Board consisted of fifteen individuals, thirteen of whom were not “interested persons” of the Trust 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 the Trust 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 Ad Hoc Topics Committee, each of which is chaired by an Independent Board Member and composed of Independent Board Members (except for the Ad Hoc Topics Committee, which also has one interested Board Member).
The Agreement
Consistent with the requirements of the 1940 Act, the Board considers the continuation of the Agreement on an annual basis. The Board has four quarterly meetings per year, each typically extending for two days, and additional in-person and telephonic meetings throughout the year, as needed. While the Board also has a fifth one-day meeting to consider specific information surrounding the renewal of the Agreement, the Board’s consideration entails a year-long deliberative process whereby the Board and its committees assess BlackRock’s services to the Funds. In particular, the Board assessed, among other things, the nature, extent and quality of the services provided to the Funds by BlackRock, BlackRock’s personnel and affiliates, including (as applicable): investment management; accounting, administrative and shareholder services; oversight of each Fund’s service providers; risk management and oversight; legal and compliance services; and ability to meet applicable legal and regulatory requirements. Throughout the year, including during the contract renewal process, the Independent Board Members were advised by independent legal counsel, and met with independent legal counsel in various executive sessions outside of the presence of management.
During the year, the Board, acting directly and through its committees, considers information that is relevant to its annual consideration of the renewal of the Agreement, including the services and support provided by BlackRock to each Fund and its shareholders. BlackRock also furnished additional information to the Board in response to specific questions from the Board. This additional information is discussed further below in the section titled “Board Considerations in Approving the Agreement.” Among the matters the Board considered were: (a) investment performance for one-year, three-year, five-year, ten-year, and/or since inception periods, as applicable, against peer funds, applicable benchmark, and performance metrics, as applicable, as well as senior management’s and portfolio managers’ analyses of the reasons for any over-performance or under-performance relative to its peers, benchmarks, and other performance metrics, as applicable; (b) fees, including advisory, administration, if applicable, and other amounts paid to BlackRock and its affiliates by the Funds for services; (c) Fund operating expenses and how BlackRock allocates expenses to the Funds (d) the resources devoted to, risk oversight of, and compliance reports relating to, implementation of each Fund’s investment objective, policies and restrictions, and meeting regulatory requirements; (e) BlackRock and the Trust’s adherence to applicable compliance policies and procedures; (f) the nature, character and scope of non-investment management services provided by BlackRock and its affiliates and the estimated cost of such services; (g) BlackRock’s and other service providers’ internal controls and risk and compliance oversight mechanisms; (h) BlackRock’s implementation of the proxy voting policies approved by the Board; (i) the use of brokerage commissions and execution quality of portfolio transactions; (j) BlackRock’s implementation of the Trust’s valuation and liquidity procedures; (k) an analysis of management fees for products with similar investment mandates across the open-end fund, exchange-traded fund (“ETF”), closed-end fund, sub-advised mutual fund, separately managed account, collective investment trust, and institutional separate account product channels, as applicable, and the similarities and differences between these products and the services provided as compared to the Funds; (l) BlackRock’s compensation methodology for its investment professionals and the incentives and accountability it creates, along with investment professionals’ investments in the fund(s) they manage; and (m) periodic updates on BlackRock’s business.
Board Considerations in Approving the Agreement
The Approval Process: Prior to the April Meeting, the Board requested and received materials specifically relating to the Agreement. The Independent Board Members are continuously engaged in a process with their independent legal counsel and BlackRock to review the nature and scope of the information provided to better assist its deliberations. The materials provided in connection with the April Meeting included, among other things: (a) information independently compiled and prepared by Broadridge Financial Solutions, Inc. (“Broadridge”), based on either a Lipper classification or Morningstar category, regarding each Fund’s fees and expenses as compared with a peer group of funds as determined by Broadridge (“Expense Peers”) and the investment performance of each Fund as compared with a peer group of funds (“Performance Peers”) and other metrics, as applicable; (b) information on the composition of the Expense Peers and Performance Peers, and a description of Broadridge’s methodology; (c) information on the estimated profits realized by BlackRock and its affiliates pursuant to the Agreement and a discussion of fall-out benefits to BlackRock and its affiliates; (d) a general analysis provided by BlackRock concerning investment management fees received in connection with other types of investment products, such as institutional accounts, sub-advised mutual funds, ETFs, closed-end funds, open-end funds, and separately managed accounts under similar investment mandates, as well as the performance of such other products, as applicable; (e) review of non-management fees; (f) the existence, impact and sharing of potential economies of scale, if any, with the Funds; (g) a summary of aggregate amounts paid by each Fund to BlackRock; (h) sales and redemption data regarding each Fund’s shares; and (i) various additional information requested by the Board as appropriate regarding BlackRock’s and the Funds’ operations.
| 68 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Disclosure of Investment Advisory Agreement (continued)
At the April Meeting, the Board reviewed materials relating to its consideration of the Agreement. As a result of the discussions that occurred during the April Meeting, and as a culmination of the Board’s year-long deliberative process, the Board presented BlackRock with questions and requests for additional information. BlackRock responded to these requests with additional written information in advance of the May Meeting.
At the May Meeting, the Board concluded its assessment of, among other things: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of each Fund as compared with 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 the Funds; (d) each Fund’s fees and expenses compared to Expense Peers; (e) the sharing of potential economies of scale; (f) fall-out benefits to BlackRock and its affiliates as a result of BlackRock’s relationship with the Funds; and (g) other factors deemed relevant by the Board Members.
The Board also considered other matters it deemed important to the approval process, such as other payments made to BlackRock or its affiliates relating to securities lending and cash management, and BlackRock’s services related to the valuation and pricing of the portfolio holdings of each Fund. 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 Provided by BlackRock: The Board, including the Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of each Fund. Throughout the year, the Board compared Fund performance to the performance of a comparable group of mutual funds, 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. The Board also reviewed the materials provided by each Fund’s portfolio management team discussing the Fund’s performance and the Fund’s investment objective, 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 engaged in a review of 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.
In addition to investment advisory services, the Board considered the nature and quality of the administrative and other non-investment advisory services provided to each Fund. BlackRock and its affiliates provide the Funds with certain administrative, shareholder and other services (in addition to any such services provided to the Funds by third parties) and officers and other personnel as are necessary for the operations of the Funds. In particular, BlackRock and its affiliates provide the Funds 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 or managing administrative functions necessary for the operation of the Funds, 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 reviewed 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 the Funds and BlackRock: The Board, including the Independent Board Members, also reviewed and considered the performance history of each Fund. In preparation for the April Meeting, the Board was provided with reports independently prepared by Broadridge, which included a comprehensive analysis of each Fund’s performance as of December 31, 2018. 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 its review, the Board received and reviewed information regarding the investment performance of each Fund as compared to its Performance Peers. The Board and its Performance Oversight Committee regularly review, and meet with Fund management to discuss, the performance of each Fund throughout the year.
In evaluating performance, the Board focused particular attention on funds with less favorable performance records. The Board also noted that while it found the data provided by Broadridge generally useful, it recognized the limitations of such data, including in particular, that notable differences may exist between a fund and the Performance Peer funds (for example, the investment objective(s) and investment strategies). Further, 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. The Board also acknowledged that long-term performance could be impacted by even one period of significant outperformance or underperformance, and that a single investment theme could have the ability to affect long-term performance disproportionately.
The Board noted that for each of the one-, three- and five-year periods reported, Mid-Cap Growth Equity Portfolio ranked in the first quartile against its Performance Peers.
The Board noted that for the one-, three- and five-year periods reported, Advantage Small Cap Growth Fund ranked in the second, third and fourth quartiles, respectively, against its Performance Peers. The Board and BlackRock reviewed the Fund’s underperformance during the applicable periods.
The Board noted that for the one-, three- and five-year periods reported, Advantage Large Cap Growth Fund ranked in the third, second and fourth quartiles, respectively, against its Performance Peers. The Board and BlackRock reviewed the Fund’s underperformance during the applicable periods. The Board noted that, among other things, effective June 12, 2017, the Fund had undergone changes in its investment objective, investment strategy and portfolio management team, and in connection with such
| D I S C L O S U R E O F I N V E S T M E N T A D V I S O R Y A G R E E M E N T | 69 |
Disclosure of Investment Advisory Agreement (continued)
changes, the Fund changed its name from BlackRock Flexible Equity Fund to BlackRock Advantage Large Cap Growth Fund. The Board and BlackRock discussed BlackRock’s strategy for improving the Fund’s investment performance. Discussions covered topics such as performance attribution, the Fund’s investment personnel, and the resources appropriate to support the Fund’s investment processes.
C. Consideration of the Advisory/Management Fees and the Estimated Cost of the Services and Estimated Profits Realized by BlackRock and its Affiliates from their Relationship with each Fund: The Board, including the Independent Board Members, reviewed each Fund’s contractual management fee rate compared with those of its Expense Peers. 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 compared each Fund’s total expense ratio, as well as its actual 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).
The Board received and reviewed statements relating to BlackRock’s financial condition. The Board reviewed BlackRock’s profitability methodology and was also provided with an estimated profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to each Fund. The Board reviewed BlackRock’s estimated profitability with respect to each Fund and other funds the Board currently oversees for the year ended December 31, 2018 compared to available aggregate estimated profitability data provided for the prior two years. The Board reviewed BlackRock’s estimated profitability with respect to certain other U.S. fund complexes managed by the Manager and/or its affiliates. The Board reviewed BlackRock’s assumptions and methodology of allocating expenses in the estimated profitability analysis, noting 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. The Board thus recognized that calculating and comparing profitability at individual fund levels is difficult.
The Board noted that, in general, individual fund or product line profitability of other advisors is not publicly available. The Board reviewed BlackRock’s overall operating margin, in general, compared to that of certain other publicly-traded asset management firms. The Board 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 provided to the Funds by BlackRock, and BlackRock’s and its affiliates’ estimated profits relating to the management of the Funds and the other funds advised by BlackRock and its affiliates. As part of its analysis, the Board reviewed BlackRock’s methodology in allocating its costs of managing each Fund, to each respective 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. The Board further considered factors including but not limited to BlackRock’s commitment of time, assumption of risk, and liability profile in servicing the Funds, including in contrast to what is required of BlackRock with respect to other products with similar investment mandates across the open-end fund, ETF, 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 Advantage Large Cap Growth Fund’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 Fund’s Expense Peers. The Board also noted that the Fund has an advisory fee arrangement that includes breakpoints that adjust the fee rate downward as the size of the Fund increases above certain contractually specified levels. The Board noted that if the size of the Fund were to decrease, the Fund could lose the benefit of one or more breakpoints. The Board further noted that BlackRock and the Board have contractually agreed to a cap on the Fund’s total expenses as a percentage of the Fund’s average daily net assets on a class-by-class basis.
The Board noted that Advantage Small Cap Growth Fund’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 Fund’s Expense Peers. The Board also noted that the Fund has an advisory fee arrangement that includes breakpoints that adjust the fee rate downward as the size of the Fund increases above certain contractually specified levels. The Board noted that if the size of the Fund were to decrease, the Fund could lose the benefit of one or more breakpoints. The Board further noted that BlackRock and the Board have contractually agreed to a cap on the Fund’s total expenses as a percentage of the Fund’s average daily net assets on a class-by-class basis.
The Board noted that Mid-Cap Growth Equity Portfolio’s contractual management fee rate ranked in the second quartile, and that the actual management fee rate and total expense ratio each ranked in the second quartile, relative to the Fund’s Expense Peers. The Board also noted that the Fund has an advisory fee arrangement that includes breakpoints that adjust the fee rate downward as the size of the Fund increases above certain contractually specified levels. The Board noted that if the size of the Fund were to decrease, the Fund could lose the benefit of one or more breakpoints. In addition, the Board noted that BlackRock and the Board agreed to a contractual adjustment to reduce specified levels within the breakpoint schedule. This adjustment was implemented on March 15, 2018. The Board further noted that BlackRock and the Board have contractually agreed to a cap on the Fund’s total expenses as a percentage of the Fund’s average daily net assets on a class-by-class basis. In addition, the Board noted that BlackRock and the Board agreed to a lower contractual expense cap on a class-by-class basis. This contractual expense cap reduction was implemented on March 15, 2018.
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 the Funds 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 the Funds benefits 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 the Funds to more fully participate in these economies of scale. The Board considered each Fund’s asset levels and whether the current fee schedule was appropriate. In their 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.
| 70 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Disclosure of Investment Advisory Agreement (continued)
E. Other Factors Deemed Relevant by the Board Members: The Board, including the Independent Board Members, also took into account other ancillary or “fall-out” benefits that BlackRock or its affiliates may derive from BlackRock’s respective relationships with the Funds, both tangible and intangible, 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 the Funds, 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 noted 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 received information regarding BlackRock’s brokerage and soft dollar practices. The Board received reports from BlackRock which included information on brokerage commissions and trade execution practices throughout the year.
The Board noted the competitive nature of the open-end fund marketplace, and that shareholders are able to redeem their Fund shares if they believe that the pertinent Fund’s fees and expenses are too high or if they are dissatisfied with the performance of the Fund.
Conclusion
The Board, including the Independent Board Members, unanimously approved the continuation of the Agreement between the Manager and the Trust, on behalf of each Fund, for a one-year term ending June 30, 2020. 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.
| D I S C L O S U R E O F I N V E S T M E N T A D V I S O R Y A G R E E M E N T | 71 |
Trustee and Officer Information
| Independent Trustees (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
|
Public Company
and Other Investment Company Directorships Held During Past Five Years |
||||
|
Mark Stalnecker 1951 |
Chair of the Board
(Since 2019) and Trustee (Since 2015) |
Chief Investment Officer, University of Delaware from 1999 to 2013; Trustee and Chair of the Finance and Investment Committees, Winterthur Museum and Country Estate from 2005 to 2016; Member of the Investment Committee, Delaware Public Employees’ Retirement System since 2002; Member of the Investment Committee, Christiana Care Health System from 2009 to 2017; Member of the Investment Committee, Delaware Community Foundation from 2013 to 2014; Director and Chair of the Audit Committee, SEI Private Trust Co. from 2001 to 2014. |
37 RICs consisting of
179 Portfolios |
None | ||||
|
Bruce R. Bond 1946 |
Trustee
(Since 2019) |
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. |
37 RICs consisting of
179 Portfolios |
None | ||||
|
Susan J. Carter 1956 |
Trustee
(Since 2016) |
Director, Pacific Pension Institute from 2014 to 2018; Advisory Board Member, Center for Private Equity and Entrepreneurship at Tuck School of Business since 1997; Senior Advisor, Commonfund Capital, Inc. (“CCI”) (investment adviser) in 2015; Chief Executive Officer, CCI from 2013 to 2014; President & Chief Executive Officer, CCI from 1997 to 2013; Advisory Board Member, Girls Who Invest from 2015 to 2018 and Board Member thereof since 2018; Advisory Board Member, Bridges Fund Management since 2016; Trustee, Financial Accounting Foundation since 2017; Practitioner Advisory Board Member, Private Capital Research Institute (“PCRI”) since 2017. |
37 RICs consisting of
179 Portfolios |
None | ||||
|
Collette Chilton 1958 |
Trustee
(Since 2015) |
Chief Investment Officer, Williams College since 2006; Chief Investment Officer, Lucent Asset Management Corporation from 1998 to 2006. |
37 RICs consisting of
179 Portfolios |
None | ||||
|
Neil A. Cotty 1954 |
Trustee
(Since 2016) |
Bank of America Corporation from 1996 to 2015, serving in various senior finance leadership roles, including Chief Accounting Officer from 2009 to 2015, Chief Financial Officer of Global Banking, Markets and Wealth Management from 2008 to 2009, Chief Accounting Officer from 2004 to 2008, Chief Financial Officer of Consumer Bank from 2003 to 2004, Chief Financial Officer of Global Corporate Investment Bank from 1999 to 2002. |
37 RICs consisting of
179 Portfolios |
None | ||||
|
Lena G. Goldberg 1949 |
Trustee
(Since 2019) |
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. |
37 RICs consisting of
179 Portfolios |
None | ||||
|
Robert M. Hernandez 1944 |
Trustee
(Since 2019) |
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. |
37 RICs consisting of
179 Portfolios |
Chubb Limited (insurance company); Eastman Chemical Company | ||||
| 72 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Trustee and Officer Information (continued)
| Independent Trustees (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
|
Public Company
and Other Investment Company Directorships Held During Past Five Years |
||||
|
Henry R. Keizer 1956 |
Trustee
(Since 2019) |
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. |
37 RICs consisting of
179 Portfolios |
Hertz Global Holdings (car rental); Montpelier Re Holdings, Ltd. (publicly held property and casualty reinsurance) from 2013 until 2015; Sealed Air Corp. (packaging); WABCO (commercial vehicle safety systems) | ||||
|
Cynthia A. Montgomery 1952 |
Trustee
(Since 2007) |
Professor, Harvard Business School since 1989. |
37 RICs consisting of
179 Portfolios |
Newell Rubbermaid, Inc. (manufacturing) | ||||
|
Donald C. Opatrny 1952 |
Trustee
(Since 2019) |
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 2018; Member, Investment Funds Committee, State of Wyoming since 2017; Trustee, Phoenix Art Museum since 2018. |
37 RICs consisting of
179 Portfolios |
None | ||||
|
Joseph P. Platt 1947 |
Trustee
(Since 2007) |
General Partner, Thorn Partners, LP (private investments) since 1998; Director, WQED Multi-Media (public broadcasting not-for-profit) since 2001; Chair, Basic Health International (non-profit) since 2015. |
37 RICs consisting of
179 Portfolios |
Greenlight Capital Re, Ltd. (reinsurance company); Consol Energy Inc. | ||||
|
Kenneth L. Urish 1951 |
Trustee
(Since 2007) |
Managing Partner, Urish Popeck & Co., LLC (certified public accountants and consultants) since 1976; Past-Chairman of the Professional Ethics Committee of the Pennsylvania Institute of Certified Public Accountants and Committee Member thereof since 2007; Member of External Advisory Board, The Pennsylvania State University Accounting Department since founding in 2001; Principal, UP Strategic Wealth Investment Advisors, LLC since 2013; Trustee, The Holy Family Institute from 2001 to 2010; President and Trustee, Pittsburgh Catholic Publishing Associates from 2003 to 2008; Director, Inter-Tel from 2006 to 2007. |
37 RICs consisting of
179 Portfolios |
None | ||||
|
Claire A. Walton 1957 |
Trustee
(Since 2016) |
Chief Operating Officer and Chief Financial Officer of Liberty Square Asset Management, LP from 1998 to 2015; General Partner of Neon Liberty Capital Management, LLC since 2003; Director, Boston Hedge Fund Group from 2009 to 2018; Director, Woodstock Ski Runners since 2013; Director, Massachusetts Council on Economic Education from 2013 to 2015. |
37 RICs consisting of
179 Portfolios |
None | ||||
| T R U S T E E A N D O F F I C E R I N F O R M A T I O N | 73 |
Trustee and Officer Information (continued)
| Interested Trustees (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
|
Public Company
and Other Investment Company Directorships Held During Past Five Years |
||||
|
Robert Fairbairn 1965 |
Trustee
(Since 2018) |
Vice Chairman of BlackRock, Inc. since 2019; Member of BlackRock’s Global Executive and Global Operating Committees; Co-Chair of BlackRock’s Human Capital Committee; Senior Managing Director of BlackRock, Inc. from 2010 to 2019; oversaw BlackRock’s Strategic Partner Program and Strategic Product Management Group from 2012 to 2019; Member of the Board of Managers of BlackRock Investments, LLC from 2011 to 2018; Global Head of BlackRock’s Retail and iShares® businesses from 2012 to 2016. |
123 RICs consisting of
289 Portfolios |
None | ||||
|
John M. Perlowski (e) 1964 |
Trustee
(Since 2015), 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. |
124 RICs consisting of
290 Portfolios |
None | ||||
| (a) |
The address of each Trustee is c/o BlackRock, Inc., 55 East 52nd Street, New York, New York 10055. |
| (b) |
Independent Trustees serve until their resignation, retirement, removal or death, or until December 31 of the year in which they turn 75. The Board may determine to extend the terms of Independent Trustees on a case-by-case basis, as appropriate. |
| (c) |
Following the combination of 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. Furthermore, effective January 1, 2019, three BlackRock Fund Complexes were realigned and consolidated into two BlackRock Fund Complexes. As a result, although the chart shows the year that each Independent Trustee joined the Board, certain Independent Trustees first became members of the boards of other BlackRock-advised Funds, legacy MLIM funds or legacy BlackRock funds as follows: Bruce R. Bond, 2005; Robert M. Hernandez, 1996; Cynthia A. Montgomery, 1994; Joseph P. Platt, 1999; Kenneth L. Urish, 1999; Lena G. Goldberg, 2016; Henry R. Keizer, 2016; Donald C. Opatrny, 2015. |
| (d) |
Mr. Fairbairn and Mr. Perlowski are both “interested persons,” as defined in the 1940 Act, of the Trust based on their positions with BlackRock, Inc. and its affiliates. Mr. Fairbairn and Mr. Perlowski are also board members of the BlackRock Fixed-Income Complex. |
| (e) |
Mr. Perlowski is also a trustee of the BlackRock Credit Strategies Fund. |
| 74 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Trustee and Officer Information (continued)
| Officers Who Are Not Trustees (a) | ||||||||
|
Name Year of Birth (b) |
Position(s) Held (Length of Service) |
Principal Occupation(s) During Past Five Years | ||||||
|
Thomas Callahan 1968 |
Vice President
(Since 2016) |
Managing Director of BlackRock, Inc. since 2013; Member of the Board of Managers of BlackRock Investments, LLC (principal underwriter) since 2019 and Managing Director thereof since 2017; Head of BlackRock’s Global Cash Management Business since 2016; Co-Head of the Global Cash Management Business from 2014 to 2016; Deputy Head of the Global Cash Management Business from 2013 to 2014; Member of the Cash Management Group Executive Committee since 2013; Chief Executive Officer of NYSE Liffe U.S. from 2008 to 2013. | ||||||
|
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 Development and Oversight for BlackRock’s Strategic Product Management Group since 2019; Head of Product Structure and Oversight for BlackRock’s U.S. Wealth Advisory Group from 2013 to 2019. | ||||||
|
Neal J. Andrews 1966 |
Chief Financial Officer
(Since 2007) |
Chief Financial Officer of the iShares® exchange traded funds since 2019; 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 certain BlackRock-advised Funds from 2014 to 2015; Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the BlackRock Multi-Asset Complex and the BlackRock Fixed-Income 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. | ||||||
|
Lisa Belle 1968 |
Anti-Money Laundering Compliance Officer
(Since 2019) |
Managing Director of BlackRock, Inc. since 2019; Global Financial Crime Head for Asset and Wealth Management of JP Morgan from 2013 to 2019; Managing Director of RBS Securities from 2012 to 2013; Head of Financial Crimes for Barclays Wealth Americas from 2010 to 2012. | ||||||
|
Janey Ahn 1975 |
Secretary
(Since 2019) |
Managing Director of BlackRock, Inc. since 2018; Director of BlackRock, Inc. from 2009 to 2017. | ||||||
|
(a) The address of each Officer is c/o BlackRock, Inc., 55 East 52nd Street, New York, New York 10055. |
||||||||
|
(b) Officers of the Trust serve at the pleasure of the Board. |
||||||||
Further information about the Trust’s Trustees and Officers is available in the Trust’s Statement of Additional Information, which can be obtained without charge by calling (800) 441-7762.
Effective September 19, 2019, Lisa Belle replaced John MacKessy as the Anti-Money Laundering Compliance Officer of the Trust.
Effective September 19, 2019, Janey Ahn replaced Benjamin Archibald as the Secretary of the Trust.
Investment Adviser and Administrator
BlackRock Advisors, LLC
Wilmington, DE 19809
Accounting Agent and Transfer Agent
BNY Mellon Investment Servicing (US) Inc.
Wilmington, DE 19809
Custodian
The Bank of New York Mellon
New York, NY 10286
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
Boston, MA 02116
Distributor
BlackRock Investments, LLC
New York, NY 10022
Legal Counsel
Sidley Austin LLP
New York, NY 10019
Address of the Trust
100 Bellevue Parkway
Wilmington, DE 19809
| T R U S T E E A N D O F F I C E R I N F O R M A T I O N | 75 |
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.
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 as an exhibit to its reports on Form N-PORT, and for reporting periods ended prior to March 31, 2019, filed such information on Form N-Q. The Funds’ Forms N-PORT and N-Q are available on the SEC’s website at http://www.sec.gov. The Funds’ Forms N-PORT and 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; 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 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.
| 76 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Additional Information (continued)
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding 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.
| A D D I T I O N A L I N F O R M A T I O N | 77 |
Want to know more?
blackrock.com | 877-275-1255 (1-877-ASK-1BLK)
This report is intended for current holders. It is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of the Funds unless preceded or accompanied by the Funds’ current prospectus. 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. Statements and other information herein are as dated and are subject to change.
Eq-Midcap-9/19-AR
|
|
|
SEPTEMBER 30, 2019 |
| 2019 Annual Report | ||
BlackRock FundsSM
| · |
BlackRock Advantage International Fund |
| · |
BlackRock Health Sciences Opportunities Portfolio |
| · |
BlackRock High Equity Income Fund |
| · |
BlackRock International Dividend Fund |
| · |
BlackRock Technology Opportunities Fund |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of each Fund’s shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from BlackRock or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
You may elect to receive all future reports in paper free of charge. If you hold accounts directly with BlackRock, you can call (800) 441-7762 to inform BlackRock that you wish to continue receiving paper copies of your shareholder reports. If you hold accounts through a financial intermediary, you can follow the instructions included with this disclosure, if applicable, or contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. Please note that not all financial intermediaries may offer this service. Your election to receive reports in paper will apply to all funds advised by BlackRock Advisors, LLC, BlackRock Fund Advisors or their affiliates, or all funds held with your financial intermediary, as applicable.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive electronic delivery of shareholder reports and other communications by: (i) accessing the BlackRock website at www.blackrock.com/edelivery and logging into your accounts, if you hold accounts directly with BlackRock, or (ii) contacting your financial intermediary, if you hold accounts through a financial intermediary. Please note that not all financial intermediaries may offer this service.
| Not FDIC Insured • May Lose Value • No Bank Guarantee |
Dear Shareholder,
Investment performance in the 12 months ended September 30, 2019 was a tale of two markets. The first half of the reporting period was characterized by restrictive monetary policy, deteriorating economic growth, equity market volatility, and rising fear of an imminent recession. During the second half of the reporting period, stocks and bonds rebounded sharply, as influential central banks shifted toward accommodative monetary policy, which led to broad-based optimism that a near-term recession could be averted.
After the dust settled, equity and bond markets posted mixed returns while weathering significant volatility. Less volatile U.S. large cap equities and U.S. bonds advanced, while equities at the high end of the risk spectrum — emerging markets, international developed, and U.S. small cap — posted modest negative returns.
Fixed-income securities delivered strong returns with relatively low volatility, as interest rates declined (and bond prices rose). U.S. Treasuries, particularly long-term Treasuries, proved to be an effective ballast for diversified investors. Investment grade and high yield corporate bonds also posted positive returns, as the credit fundamentals in corporate markets remained relatively solid.
In the U.S. equity market, volatility spiked in late 2018, 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. Volatility also rose in emerging markets, as the appreciating U.S. dollar and higher interest rates in the U.S. disrupted economic growth abroad. An economic slowdown in Europe and ongoing uncertainty about Brexit led to negative performance for European equities.
As equity performance faltered and global economic growth slowed, the U.S. Federal Reserve (the “Fed”) shifted to a more patient perspective on the economy in January 2019. The Fed left interest rates unchanged for six months, then reduced interest rates twice thereafter. Following in the Fed’s footsteps, the European Central Bank announced aggressive economic stimulus measures, including lower interest rates and the return of its bond purchasing program. The Bank of Japan signaled a continuation of accommodative monetary policy, while China committed to looser credit conditions and an increase in fiscal spending.
The outpouring of global economic stimulus led to a sharp rally in risk assets throughout the world despite the headwind of rising geopolitical and trade tensions. Hopes continued to remain high as the current economic expansion became the longest in U.S. history. Looking ahead, markets are pricing in additional rate cuts by the Fed over the next year, as investors anticipate a steady shift toward more stimulative monetary policy.
We continue to expect a slowing expansion with additional room to run. Despite a sharp slowdown in trade and manufacturing across the globe, U.S. consumers continued to spend at a relatively healthy pace, benefitting from the lowest unemployment rate in 50 years and rising wages. However, escalating trade tensions and the resulting disruptions in global supply chains are becoming increasingly unpredictable, as are geopolitical tensions in the Middle East.
We believe U.S. equities remain relatively attractive, but we are shifting to a more cautious stance within emerging markets and Asia ex-Japan equities. For bonds, U.S. Treasuries are likely to continue to help buffer against volatility in risk assets, while income from other types of bonds can continue to offer steady returns.
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 September 30, 2019 | ||||
| 6-month | 12-month | |||
|
U.S. large cap equities
|
6.08% | 4.25% | ||
|
U.S. small cap equities
|
(0.36) | (8.89) | ||
|
International equities
|
2.57 | (1.34) | ||
|
Emerging market equities
|
(3.66) | (2.02) | ||
|
3-month Treasury bills
|
1.20 | 2.39 | ||
|
U.S. Treasury securities
|
7.54 | 15.15 | ||
|
U.S. investment grade bonds
|
5.42 | 10.30 | ||
|
Tax-exempt municipal bonds
|
3.71 | 8.19 | ||
|
U.S. high yield bonds
|
3.87 | 6.35 | ||
| Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index. | ||||
| 2 | T H I S P A G E I S N O T P A R T O F Y O U R F U N D R E P O R T |
| Page | ||||
|
|
||||
| 2 | ||||
|
Annual Report: |
||||
| 4 | ||||
| 16 | ||||
| 17 | ||||
| 17 | ||||
|
Financial Statements: |
||||
| 18 | ||||
| 47 | ||||
| 49 | ||||
| 50 | ||||
| 52 | ||||
| 77 | ||||
| 97 | ||||
| 98 | ||||
|
Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement |
99 | |||
| 103 | ||||
| 107 | ||||
| 109 | ||||
| 3 |
| Fund Summary as of September 30, 2019 | BlackRock Advantage International Fund |
Investment Objective
BlackRock Advantage International Fund’s (the “Fund”) investment objective is to provide long-term capital appreciation.
On May 17, 2018, the Board of Trustees of BlackRock FundsSM (the “Trust”) and, on May 23, 2018, the Board of Trustees of State Farm Mutual Fund Trust each approved a reorganization of the State Farm International Equity Fund (the “Target Fund”), with and into the Fund. At a special shareholder meeting on September 14, 2018, the shareholders of the Target Fund approved the reorganization, which was completed on November 19, 2018.
Portfolio Management Commentary
How did the Fund perform?
For the 12-month period ended September 30, 2019, the Fund underperformed its benchmark, the MSCI EAFE® Index.
What factors influenced performance?
The Fund’s macro-thematic and sentiment composites were the top detractors from the Fund’s relative performance during the period, as tightening financial conditions, whipsawing central bank policies, deteriorating global growth, signs of stretched valuations, and deleveraging in the hedge fund community at the end of 2018 led to spikes in market and portfolio volatility. The Fund’s underperformance was concentrated in the fourth quarter of 2018, as realized portfolio risk exposure proved to be higher than expected, and correlations among insights degraded the Fund’s ability to insulate against negative market price action. These conditions led to unexpectedly high exposure to the market as it sold off, despite forecasts pointing to a moderate underweight in predicted relative risk levels. Furthermore, as investors seemingly lost faith in macro and earnings outlooks, text-based measures of analyst sentiment as well as trend-following quality signals become less differentiated, subsequently converging with the large drawdown in generic earnings momentum. Specifically, quality-based measures that prompted underweight positions in companies with increasing accruals, deteriorating dividend growth, and weaker operating cash flow proved to be at odds with investor preference for higher-growth names. Elsewhere, the macro-thematic style rotation model’s preference for small cap stocks, which had worked well earlier because of their relative insulation from breakdowns in global trade talks, was a large detractor during the period. Investors frantically rotated toward defensive large cap names in an erratic manner relative to past episodes of market distress.
The top contributors to the Fund’s performance during the period were sentiment-based insights as well as insights focusing on sustainability measures. Market losses during the last three months of 2018 were immediately followed by a six-month recovery, with the final three months of the period being relatively weak. Among sentiment insights, advanced machine-learning models that look to make allocations across various individual insights based on relationships established during past market regimes were some of the top performers, providing protection during selloffs and helping to capture upside during the market recovery. Elsewhere, sustainability measures gauging greenhouse emissions and employee sentiment were among top-performing insights. At the individual insight level, proprietary textual analysis of statements by company executives was one of the top performers, helping the Fund take positions that benefited from favorable earnings announcements. Finally, a variety of other differentiated stock selection insights contributed, ranging from those favoring outperforming stocks held by mutual fund managers to others analyzing credit card sales data.
At period end, the Fund had a temporary elevated cash position due to pending trade settlements. The Fund’s cash position had no material impact on Fund performance.
Describe recent portfolio activity.
During the period, the Fund maintained a balanced allocation of risk across all major drivers of return. However, the Fund made some changes to its macro-thematic composite, reducing the size of its preference for growth stocks over value stocks. This was due to a historically high spread between the two factors and the subsequent fear of a snapback for value stocks, which materialized in the last month of the period. Furthermore, the Fund added new stock selection insights, including a measure that tracks and takes positions in stocks that have scheduled roadshows, as a sign of improving company prospects.
Describe portfolio positioning at period end.
At period end, the Fund was well-positioned for the continuation of low interest rates, low inflation, and moderate growth, reflecting greater investor confidence due to accommodative central bank policy. However, stretched valuations, declining consumer confidence, and a deteriorating global macro environment prompted the Fund to stay well diversified across geographies, industries, and other drivers of risk. Industry selection models have moved toward a slightly more pro-cyclical stance, with overweight exposure to industrials and an increase in exposure to the consumer discretionary sector from a previously underweight position. At the country level, forward-looking growth indicators prompted a positive stance on Japan and Australia, but the Fund moved to underweight positions in Germany, the United Kingdom and Italy.
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 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
| Fund Summary as of September 30, 2019 (continued) | BlackRock Advantage International Fund |
Portfolio Information
TEN LARGEST HOLDINGS
|
|
||||
| Security(a) |
Percent of
Net Assets |
|||
|
|
||||
|
Nestle SA, Registered Shares |
3% | |||
|
Roche Holding AG |
2 | |||
|
Novartis AG, Registered Shares |
2 | |||
|
Diageo PLC |
1 | |||
|
LVMH Moet Hennessy Louis Vuitton SE |
1 | |||
|
GlaxoSmithKline PLC |
1 | |||
|
HSBC Holdings PLC |
1 | |||
|
L’Oreal SA |
1 | |||
|
Allianz SE, Registered Shares |
1 | |||
|
SAP SE |
1 | |||
|
|
||||
| (a) |
Excludes short-term investments. |
GEOGRAPHIC ALLOCATION
|
|
||||
| Country |
Percent of
Net Assets |
|||
|
|
||||
|
Japan |
24% | |||
|
United Kingdom |
14 | |||
|
France |
12 | |||
|
Switzerland |
9 | |||
|
Germany |
8 | |||
|
Australia |
8 | |||
|
United States |
6 | |||
|
Netherlands |
5 | |||
|
Spain |
3 | |||
|
Sweden |
3 | |||
|
Hong Kong |
3 | |||
|
Denmark |
2 | |||
|
Finland |
1 | |||
|
Italy |
1 | |||
|
Singapore |
1 | |||
|
Belgium |
1 | |||
|
Norway |
1 | |||
|
Liabilities in Excess of Other Assets |
(2) | |||
|
|
||||
| F U N D S U M M A R Y | 5 |
| Fund Summary as of September 30, 2019 (continued) | BlackRock Advantage International Fund |
TOTAL RETURN BASED ON A $10,000 INVESTMENT
| (a) |
Assuming maximum sales charges, if any, transaction costs and other operating expenses, including investment advisory fees and administration fees, if any. Institutional Shares do not have a sales charge. |
| (b) |
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 non-U.S. equity securities and equity-like instruments of companies that are components of, or have characteristics similar to, the companies included in the MSCI EAFE® Index and derivatives that are tied economically to securities of the MSCI EAFE® Index. 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 Global Opportunities Portfolio. |
| (c) |
The MSCI EAFE® Index is an index designed to represent the performance of large- and mid-cap securities across 21 developed markets in Europe, Australasia and the Far East, excluding the U.S. and Canada. As of December 31, 2018, it had 920 constituents and covered approximately 85% of the free float-adjusted market capitalization in each country. |
Performance Summary for the Period Ended September 30, 2019
| Average Annual Total Returns(a),(b) | ||||||||||||||||||||||||||||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||||||||||||
|
6-Month
Total Returns |
w/o sales
charge |
w/sales
charge |
w/o sales charge |
w/sales
charge |
w/o sales
charge |
w/sales
charge |
||||||||||||||||||||||||||||||||
|
Institutional |
1.77% | (2.52)% | N/A | 4.23% | N/A | 5.97% | N/A | |||||||||||||||||||||||||||||||
|
Investor A |
1.60 | (2.77) | (7.88)% | 3.95 | 2.84% | 5.68 | 5.11% | |||||||||||||||||||||||||||||||
|
Investor C |
1.25 | (3.51) | (4.47) | 3.14 | 3.14 | 4.85 | 4.85 | |||||||||||||||||||||||||||||||
|
Class K |
1.77 | (2.53) | N/A | 4.24 | N/A | 5.98 | N/A | |||||||||||||||||||||||||||||||
|
Class R |
1.47 | (3.04) | N/A | 3.62 | N/A | 5.32 | N/A | |||||||||||||||||||||||||||||||
|
MSCI EAFE® Index |
2.57 | (1.34) | N/A | 3.27 | N/A | 4.90 | N/A | |||||||||||||||||||||||||||||||
| (a) |
Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See “About Fund Performance” on page 16 for a detailed description of share classes, including any related sales charges and fees, and how performance was calculated for certain share classes. |
| (b) |
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 non-U.S. equity securities and equity-like instruments of companies that are components of, or have characteristics similar to, the companies included in the MSCI EAFE® Index and derivatives that are tied economically to securities of the MSCI EAFE® Index. 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 Global Opportunities Portfolio. |
N/A — Not applicable as share class and index do not have a sales charge.
Past performance is not indicative of future results.
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Expense Example
| Actual | Hypothetical(b) | |||||||||||||||||||||||||
|
Beginning
Account Value
|
Ending
Account Value (09/30/19) |
Expenses Paid
During the Period(a) |
Beginning
Account Value (04/01/19) |
Ending
Account Value (09/30/19) |
Expenses Paid
During the Period(a) |
Annualized
Expense Ratio |
||||||||||||||||||||
|
Institutional |
$1,000.00 | $1,017.70 | $2.77 | $1,000.00 | $1,022.60 | $2.77 | 0.54% | |||||||||||||||||||
|
Investor A |
1,000.00 | 1,016.00 | 4.04 | 1,000.00 | 1,021.34 | 4.05 | 0.79 | |||||||||||||||||||
|
Investor C |
1,000.00 | 1,012.50 | 7.88 | 1,000.00 | 1,017.51 | 7.90 | 1.55 | |||||||||||||||||||
|
Class K |
1,000.00 | 1,017.70 | 2.49 | 1,000.00 | 1,022.87 | 2.50 | 0.49 | |||||||||||||||||||
|
Class R |
1,000.00 | 1,014.70 | 5.34 | 1,000.00 | 1,020.05 | 5.35 | 1.04 | |||||||||||||||||||
| (a) |
For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period shown). |
| (b) |
Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365. |
See “Disclosure of Expenses” on page 17 for further information on how expenses were calculated.
| 6 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
| Fund Summary as of September 30, 2019 | BlackRock Health Sciences Opportunities Portfolio |
Investment Objective
BlackRock Health Sciences Opportunities Portfolio’s (the “Fund”) investment objective is to provide long-term growth of capital.
Portfolio Management Commentary
How did the Fund perform?
For the 12-month period ended September 30, 2019, the Fund outperformed its benchmark, the Russell 3000® Health Care Index.
What factors influenced performance?
Health care stocks underperformed the broader equity market in the annual period, as investors grew cautious about the changing political landscape and its potential effect on profitability for a wide swath of companies in the sector. The Fund, while posting negative returns, outpaced its benchmark on the strength of strong individual stock selection and favorable industry allocations. Stock selection in the pharmaceuticals, medical devices & supplies, and biotechnology sub-sectors was the primary driver of the Fund’s outperformance. Conversely, weaker selection in the health care providers & supplies sub-sector detracted.
An overweight position in the medical devices & supplies company Abbott Laboratories was the leading contributor to performance. The company issued a series of better-than-expected earnings reports highlighted by rapidly growing sales growth for its innovative diabetes monitoring device. An out-of-benchmark position in the British pharmaceutical giant AstraZeneca PLC was also a top contributor. The company’s investments in its oncology franchise began to pay off in the form of steady sales growth for its new cancer drugs. An overweight in the medical devices & supplies company Stryker Corp. was an additional contributor of note. The stock climbed on the strength of consistently strong quarterly earnings reports that were driven by sustained growth for its surgical robotics technology.
The Fund’s lack of a position in the medical devices company Danaher Corp. was the largest detractor from relative performance. The stock rallied after the company announced its acquisition of General Electric’s biopharmaceutical business. An underweight in Merck & Co., Inc., which reported positive clinical trial data for a key drug, was another notable detractor. An overweight position in the health care provider Centene Corp. also detracted from relative returns, as speculation of a possible takeover bid proved unfounded.
Describe recent portfolio activity.
The Fund made a meaningful increase to its weighting in the medical devices & supplies industry, and reduced its positions in the pharmaceuticals, biotechnology, and health care providers & services sub-sectors.
Describe portfolio positioning at period end.
The investment adviser believes the health care sector continues to feature compelling longer-term growth drivers. Innovation in medical technology is viewed as a key source of growth as companies continue to develop new therapies and products that are either addressing unmet medical needs or improving current treatments. The investment adviser also believes the shift toward value-based health care represents a key long-term theme. Accordingly, the Fund was overweight in the health care providers & services sub-sector. The investment adviser saw a particularly attractive opportunity in the managed care industry, where it has identified companies that are expected to continue to execute on their underlying businesses and leverage their scale and analytical capabilities to reduce health care costs.
The Fund was also overweight in the medical devices and supplies industry, and it was underweight in both pharmaceuticals and biotechnology.
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
TEN LARGEST HOLDINGS
|
|
||||
| Security(a) |
Percent of
Net Assets |
|||
|
|
||||
|
UnitedHealth Group, Inc. |
7% | |||
|
Abbott Laboratories |
6 | |||
|
Boston Scientific Corp. |
4 | |||
|
Thermo Fisher Scientific, Inc. |
4 | |||
|
Medtronic PLC |
4 | |||
|
Stryker Corp. |
4 | |||
|
Merck & Co., Inc. |
3 | |||
|
Edwards Lifesciences Corp. |
3 | |||
|
Amgen, Inc. |
3 | |||
|
Zoetis, Inc. |
3 | |||
|
|
||||
| (a) |
Excludes short-term investments. |
INDUSTRY ALLOCATION
|
|
||||
| Industry |
Percent of
Net Assets |
|||
|
|
||||
|
Health Care Equipment & Supplies |
36% | |||
|
Pharmaceuticals |
19 | |||
|
Health Care Providers & Services |
18 | |||
|
Biotechnology |
14 | |||
|
Life Sciences Tools & Services |
9 | |||
|
Health Care Technology |
1 | |||
|
Short-Term Securities |
6 | |||
|
Liabilities in Excess of Other Assets |
(3) | |||
|
|
||||
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.
| F U N D S U M M A R Y | 7 |
| Fund Summary as of September 30, 2019 (continued) | BlackRock Health Sciences Opportunities Portfolio |
TOTAL RETURN BASED ON A $10,000 INVESTMENT
| (a) |
Assuming maximum sales charges, if any, transaction costs and other operating expenses, including investment advisory fees and administration fees, if any. Institutional Shares do not have a sales charge. |
| (b) |
Under normal market conditions, the Fund invests at least 80% of its total assets in equity securities, primarily common stock, of companies in health sciences and related industries. |
| (c) |
The Russell 3000® Health Care Index is an unmanaged index that features companies involved in medical services or health care in the Russell 3000® Index, which includes the largest 3,000 U.S. companies as determined by total market capitalization. |
Performance Summary for the Period Ended September 30, 2019
| Average Annual Total Returns(a) | ||||||||||||||||||||||||||||||||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||||||||||||||||
|
6-Month
Total Returns |
w/o sales
charge |
w/sales
charge |
w/o sales
charge |
w/sales
charge |
w/o sales
charge |
w/sales
charge |
||||||||||||||||||||||||||||||||||||
|
Institutional |
0.35% | (1.84)% | N/A | 11.17% | N/A | 15.55% | N/A | |||||||||||||||||||||||||||||||||||
|
Service |
0.17 | (2.16) | N/A | 10.84 | N/A | 15.21 | N/A | |||||||||||||||||||||||||||||||||||
|
Investor A |
0.21 | (2.11) | (7.25)% | 10.86 | 9.67% | 15.22 | 14.60% | |||||||||||||||||||||||||||||||||||
|
Investor C |
(0.18) | (2.82) | (3.72) | 10.06 | 10.06 | 14.38 | 14.38 | |||||||||||||||||||||||||||||||||||
|
Class K |
0.39 | (1.75) | N/A | 11.14 | N/A | 15.36 | N/A | |||||||||||||||||||||||||||||||||||
|
Class R |
0.04 | (2.44) | N/A | 10.51 | N/A | 14.86 | N/A | |||||||||||||||||||||||||||||||||||
|
Russell 3000® Health Care Index |
(2.23) | (5.15) | N/A | 9.22 | N/A | 14.53 | N/A | |||||||||||||||||||||||||||||||||||
| (a) |
Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See “About Fund Performance” on page 16 for a detailed description of share classes, including any related sales charges and fees, and how performance was calculated for certain share classes. |
N/A — Not applicable as share class and index do not have a sales charge.
Past performance is not indicative of future results.
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Expense Example
| Actual | Hypothetical(b) | |||||||||||||||||||||||||
|
Beginning
Account Value (04/01/19) |
Ending
Account Value (09/30/19) |
Expenses Paid
During the Period(a) |
Beginning
Account Value (04/01/19) |
Ending
Account Value (09/30/19) |
Expenses Paid
During the Period(a) |
Annualized
Expense Ratio |
||||||||||||||||||||
|
Institutional |
$1,000.00 | $1,003.50 | $4.29 | $1,000.00 | $1,021.06 | $4.33 | 0.85% | |||||||||||||||||||
|
Service |
1,000.00 | 1,001.70 | 5.84 | 1,000.00 | 1,019.51 | 5.89 | 1.15 | |||||||||||||||||||
|
Investor A |
1,000.00 | 1,002.10 | 5.67 | 1,000.00 | 1,019.68 | 5.71 | 1.12 | |||||||||||||||||||
|
Investor C |
1,000.00 | 998.20 | 9.34 | 1,000.00 | 1,015.99 | 9.42 | 1.84 | |||||||||||||||||||
|
Class K |
1,000.00 | 1,003.90 | 3.81 | 1,000.00 | 1,021.54 | 3.85 | 0.75 | |||||||||||||||||||
|
Class R |
1,000.00 | 1,000.40 | 7.34 | 1,000.00 | 1,018.00 | 7.41 | 1.45 | |||||||||||||||||||
| (a) |
For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period shown). The fees and expenses of the underlying funds in which the Fund invests are not included in the Fund’s annualized expense ratio. |
| (b) |
Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365. |
See “Disclosure of Expenses” on page 17 for further information on how expenses were calculated.
| 8 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
| Fund Summary as of September 30, 2019 | BlackRock High Equity Income Fund |
Investment Objective
BlackRock High Equity Income Fund (the “Fund”) investment objective is to seek high current income with consideration for capital appreciation.
Portfolio Management Commentary
How did the Fund perform?
For the 12-month period ended September 30, 2019, the Fund underperformed its benchmark, the Russell 1000® Value Index.
What factors influenced performance?
The Fund’s stock selection in the utilities sector was the largest detractor from relative performance. Within the sector, selection among electric utilities accounted for the vast majority of relative underperformance. A combination of stock selection and allocation decisions in the consumer staples sector detracted from Fund returns, primarily due to underweight exposure to the household products industry and stock selection within the tobacco industry. Additionally, stock selection in the software and semiconductors & semiconductor equipment industries within the information technology (“IT”) sector negatively affected Fund performance. The Fund’s underweight exposure to real estate also detracted from performance, as did stock selection in the industrials and materials sectors.
The largest contributor to the Fund’s performance was stock selection in the energy sector. Notably, stock selection with in the oil, gas & consumable fuels industry added to performance, as did the Fund’s underweight position to energy equipment & services companies. Stock selection in health care also added to relative performance, with the largest positive impact coming from stocks in the pharmaceuticals industry. Within the communication services sector, stock selection contributed, most notably in the diversified telecommunication services industry. Finally, stock selection in the financials and consumer discretionary sectors contributed positively to Fund returns.
Describe recent portfolio activity.
During the period, the Fund increased its exposure to the communication services, financials and industrials sectors. The Fund reduced its exposure to IT, utilities and real estate.
The Fund also used derivatives during the period, realizing losses on purchased options. The losses detracted from the Fund’s relative performance.
Describe portfolio positioning at period end.
The Fund ended the period with its largest absolute allocations in the financials, health care and energy sectors. Relative to the benchmark, the Fund’s largest overweight positions were in energy and health care, while the largest relative underweights were in the real estate and industrials sectors.
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
TEN LARGEST HOLDINGS
|
|
||||
| Security(a) |
Percent of
Net Assets |
|||
|
|
||||
|
Verizon Communications, Inc. |
5% | |||
|
Wells Fargo & Co. |
5 | |||
|
BP PLC |
4 | |||
|
JPMorgan Chase & Co. |
3 | |||
|
FirstEnergy Corp. |
3 | |||
|
MetLife, Inc. |
2 | |||
|
Citigroup, Inc. |
2 | |||
|
Williams Cos., Inc. |
2 | |||
|
Marathon Petroleum Corp. |
2 | |||
|
Pfizer, Inc. |
2 | |||
|
|
||||
| (a) |
Excludes short-term investments. |
SECTOR ALLOCATION
|
|
||||
| Sector |
Percent of
Net Assets |
|||
|
|
||||
|
Financials |
26% | |||
|
Health Care |
16 | |||
|
Energy |
13 | |||
|
Communication Services |
9 | |||
|
Information Technology |
8 | |||
|
Consumer Staples |
8 | |||
|
Industrials |
6 | |||
|
Utilities |
6 | |||
|
Consumer Discretionary |
4 | |||
|
Materials |
3 | |||
|
Short-Term Securities |
2 | |||
|
Liabilities in Excess of Other Assets |
(1) | |||
|
|
||||
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 such sector sub-classifications for reporting ease.
| F U N D S U M M A R Y |
|
9
|
|
| Fund Summary as of September 30, 2019 (continued) | BlackRock High Equity Income Fund |
TOTAL RETURN BASED ON A $10,000 INVESTMENT
| (a) |
Assuming maximum sales charges, if any, transaction costs and other operating expenses, including investment advisory fees and administration fees, if any. Institutional Shares do not have a sales charge. |
| (b) |
Under normal circumstances, the Fund will invest at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in equity securities and equity-related instruments, including equity-linked notes. The Fund may invest in securities of companies with any market capitalization, but will generally focus on large cap 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 U.S. Opportunities Portfolio. |
| (c) |
The Russell 1000® Value Index is an unmanaged index that is a subset of the Russell 1000® Index and consists of those Russell 1000® securities with lower price-to-book ratios and lower expected growth values. |
Performance Summary for the Period Ended September 30, 2019
| Average Annual Total Returns(a)(b) | ||||||||||||||||||||||||||||||||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||||||||||||||||
|
6-Month
Total Returns |
w/o sales
charge |
w/sales
charge |
w/o sales
charge |
w/sales
charge |
w/o sales
charge |
w/sales
charge |
||||||||||||||||||||||||||||||||||||
|
Institutional |
4.32% | 2.27% | N/A | 7.15% | N/A | 10.65% | N/A | |||||||||||||||||||||||||||||||||||
|
Service |
4.23 | 2.05 | N/A | 6.82 | N/A | 10.24 | N/A | |||||||||||||||||||||||||||||||||||
|
Investor A |
4.25 | 2.02 | (3.33)% | 6.82 | 5.68% | 10.23 | 9.64% | |||||||||||||||||||||||||||||||||||
|
Investor C |
3.88 | 1.30 | 0.41 | 6.03 | 6.03 | 9.41 | 9.41 | |||||||||||||||||||||||||||||||||||
|
Russell 1000® Value Index |
5.25 | 4.00 | N/A | 7.79 | N/A | 11.46 | N/A | |||||||||||||||||||||||||||||||||||
| (a) |
Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See “About Fund Performance” on page 16 for a detailed description of share classes, including any related sales charges and fees. |
| (b) |
Under normal circumstances, the Fund will invest at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in equity securities and equity-related instruments, including equity-linked notes. The Fund may invest in securities of companies with any market capitalization, but will generally focus on large cap 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 U.S. Opportunities Portfolio. |
N/A — Not applicable as share class and index do not have a sales charge.
Past performance is not indicative of future results.
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Expense Example
| Actual | Hypothetical(b) | |||||||||||||||||||||||||||
|
Beginning
Account Value (04/01/19) |
Ending
Account Value (09/30/19) |
Expenses Paid
During the Period(a) |
Beginning
Account Value (04/01/19) |
Ending
Account Value (09/30/19) |
Expenses Paid
During the Period(a) |
Annualized
Expense Ratio |
||||||||||||||||||||||
|
Institutional |
$1,000.00 | $1,043.20 | $4.40 | $1,000.00 | $1,021.03 | $4.35 | 0.85% | |||||||||||||||||||||
|
Service |
1,000.00 | 1,042.30 | 5.69 | 1,000.00 | 1,019.77 | 5.63 | 1.10 | |||||||||||||||||||||
|
Investor A |
1,000.00 | 1,042.50 | 5.69 | 1,000.00 | 1,019.77 | 5.63 | 1.10 | |||||||||||||||||||||
|
Investor C |
1,000.00 | 1,038.80 | 9.56 | 1,000.00 | 1,015.97 | 9.45 | 1.85 | |||||||||||||||||||||
| (a) |
For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period shown). |
| (b) |
Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365. |
See “Disclosure of Expenses” on page 17 for further information on how expenses were calculated.
| 10 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Fund Summary as of September 30, 2019 |
BlackRock International Dividend Fund |
Investment Objective
BlackRock International Dividend Fund’s (the “Fund”) investment objective is to seek long-term total return and current income.
Portfolio Management Commentary
How did the Fund perform?
For the 12-month period ended September 30, 2019, the Fund outperformed its benchmark, the MSCI All Country World Index (“ACWI”) ex-U.S.
What factors influenced performance?
Stock selection within the health care and consumer discretionary sectors was the largest contributor to the Fund’s relative performance during the period. A lack of exposure to the energy sector also contributed. Among individual stocks, the largest contributors to Fund performance were Chinese athletic footwear and apparel retailer ANTA Sports Products Ltd., Swiss food giant Nestle SA, and Swiss multinational pharmaceutical company Novartis AG.
The largest detractor from relative performance was the Fund’s lack of exposure to the utilities and real estate sectors. Negative stock selection within the consumer staples sector also weighed on Fund returns. The largest individual stock detractors from Fund performance were U.K.-based tobacco company Imperial Brands PLC, U.S. industrial conglomerate 3M Co., and Swedish bank Svenska Handelsbanken AB.
Describe recent portfolio activity.
During the period, the Fund reduced its overweight exposure to consumer staples, especially within tobacco, as it sold its position in Japan Tobacco, Inc. The Fund also reduced its underweight exposure to information technology further by selling its position in software giant Microsoft Corp. The Fund increased its already significantly overweight exposure to industrials by initiating a position in data analytics specialist RELX PLC and by adding to its target weightings in U.K. aerospace company BAE Systems PLC and German logistics specialist Deutsche Post AG. The Fund also boosted its overweight exposure to communication services by adding to its position in Canadian telecom TELUS Corp.
Describe portfolio positioning at period end.
The Fund focuses on high-quality dividend-paying companies and at period-end looked very different from its benchmark, the MSCI ACWI ex-U.S., in terms of portfolio positioning. The Fund ended the period with its most significant exposure to the consumer staples, industrials, and health care sectors, specifically within the pharmaceutical and tobacco industries. The Fund continued to have no exposure to energy, real estate, or utilities. From a regional perspective, the Fund’s most significant exposure was to Europe ex-U.K., the United Kingdom, Canada and Asia.
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
TEN LARGEST HOLDINGS
|
|
||||
| Security(a) |
Percent of Net Assets |
|||
|
|
||||
|
TELUS Corp. |
7% | |||
|
GlaxoSmithKline PLC |
5 | |||
|
Amcor PLC — CDI |
5 | |||
|
Rogers Communications, Inc., Class B |
5 | |||
|
Deutsche Post AG, Registered Shares |
5 | |||
|
British American Tobacco PLC |
5 | |||
|
Nestle SA, Registered Shares |
4 | |||
|
Sanofi |
4 | |||
|
Novartis AG, Registered Shares |
4 | |||
|
BAE Systems PLC |
4 | |||
|
|
||||
| (a) |
Excludes short-term investments. |
GEOGRAPHIC ALLOCATION
|
|
||||
| Country |
Percent of
Net Assets |
|||
|
|
||||
|
United Kingdom |
26% | |||
|
Canada |
12 | |||
|
Switzerland |
11 | |||
|
United States |
8 | |||
|
France |
7 | |||
|
Netherlands |
5 | |||
|
Singapore |
5 | |||
|
Germany |
5 | |||
|
Australia |
4 | |||
|
Denmark |
3 | |||
|
Finland |
3 | |||
|
Sweden |
3 | |||
|
India |
2 | |||
|
China |
2 | |||
|
Taiwan |
2 | |||
|
Other Assets Less Liabilities |
2 | |||
|
|
||||
| F U N D S U M M A R Y | 11 |
| Fund Summary as of September 30, 2019 (continued) | BlackRock International Dividend Fund |
TOTAL RETURN BASED ON A $10,000 INVESTMENT
| (a) |
Assuming maximum sales charges, if any, transaction costs and other operating expenses, including investment advisory fees and administration fees, if any. Institutional Shares do not have a sales charge. |
| (b) |
Under normal circumstances, the Fund will invest at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in dividend-paying equity securities issued by foreign companies of any market capitalization 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 International Opportunities Portfolio. |
| (c) |
The MSCI ACWI ex-U.S. is a free float-adjusted market capitalization weighted index designed to measure the combined equity market performance of developed and emerging market countries, excluding the United States. |
Performance Summary for the Period Ended September 30, 2019
| Average Annual Total Returns(a)(b) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
6-Month
Total Returns |
w/o sales
charge |
w/sales
charge |
w/o sales
charge |
w/sales
charge |
w/o sales
charge |
w/sales
charge |
||||||||||||||||||||||||||||||||||||||||||||||
|
Institutional |
1.33 | % | 3.86 | % | N/A | 2.25 | % | N/A | 3.90 | % | N/A | |||||||||||||||||||||||||||||||||||||||||
|
Service |
1.21 | 3.62 | N/A | 1.97 | N/A | 3.54 | N/A | |||||||||||||||||||||||||||||||||||||||||||||
|
Investor A |
1.23 | 3.57 | (1.86 | )% | 1.96 | 0.86 | % | 3.60 | 3.05 | % | ||||||||||||||||||||||||||||||||||||||||||
|
Investor C |
0.82 | 2.80 | 1.83 | 1.20 | 1.20 | 2.83 | 2.83 | |||||||||||||||||||||||||||||||||||||||||||||
|
Class K |
1.39 | 3.92 | N/A | 2.28 | N/A | 3.91 | N/A | |||||||||||||||||||||||||||||||||||||||||||||
|
MSCI ACWI ex-U.S. |
1.13 | (1.23) | N/A | 2.90 | N/A | 4.45 | N/A | |||||||||||||||||||||||||||||||||||||||||||||
| (a) |
Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See “About Fund Performance” on page 16 for a detailed description of share classes, including any related sales charges and fees, and how performance was calculated for certain share classes. |
| (b) |
Under normal circumstances, the Fund will invest at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in dividend-paying equity securities issued by foreign companies of any market capitalization 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 International Opportunities Portfolio. |
N/A — Not applicable as share class and index do not have a sales charge.
Past performance is not indicative of future results.
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Expense Example
| Actual | Hypothetical(b) | |||||||||||||||||||||||||||||||
|
Beginning
Account Value (04/01/19) |
Ending
Account Value (09/30/19) |
Expenses Paid
During the Period(a) |
Beginning
Account Value (04/01/19) |
Ending
Account Value (09/30/19) |
Expenses Paid
During the Period(a) |
Annualized
Ratio |
||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
|
Institutional |
$1,000.00 | $1,013.30 | $4.29 | $1,000.00 | $1,021.08 | $4.30 | 0.84% | |||||||||||||||||||||||||
|
Service |
1,000.00 | 1,012.10 | 5.56 | 1,000.00 | 1,019.82 | 5.58 | 1.09 | |||||||||||||||||||||||||
|
Investor A |
1,000.00 | 1,012.30 | 5.56 | 1,000.00 | 1,019.82 | 5.58 | 1.09 | |||||||||||||||||||||||||
|
Investor C |
1,000.00 | 1,008.20 | 9.36 | 1,000.00 | 1,016.02 | 9.40 | 1.84 | |||||||||||||||||||||||||
|
Class K |
1,000.00 | 1,013.90 | 4.03 | 1,000.00 | 1,021.34 | 4.05 | 0.79 | |||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
| (a) |
For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period shown). |
| (b) |
Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365. |
See “Disclosure of Expenses” on page 17 for further information on how expenses were calculated.
| 12 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Fund Summary as of September 30, 2019 |
BlackRock Technology Opportunities Fund |
Investment Objective
BlackRock Technology Opportunities Fund’s (the “Fund”) investment objective is to provide long-term capital appreciation.
Portfolio Management Commentary
How did the Fund perform?
For the 12-month period ended September 30, 2019, the Fund underperformed its benchmark, the MSCI All-Country World Information Technology Index.
What factors influenced performance?
Stock selection and allocation decisions drove the large majority of the Fund’s relative underperformance during the period. In particular, stock selection within the internet and gaming industries was a significant detractor from performance.
Among individual positions, the largest detractor from Fund performance was the Fund’s underweight position in software company Microsoft Corp., as strong earnings results in the first quarter of 2019 led the company to become the third in history to reach a market capitalization of $1 trillion. Healthy enterprise sales and continued growth in the Azure cloud computing platform benefited the company. The Fund’s out-of-benchmark position in Amazon.com, Inc. was the second-largest individual detractor. The stock declined in the fourth quarter of 2018 following reports of weaker growth than anticipated. Increased regulatory scrutiny from the U.S. government also weighed on Amazon.com despite the continued growth of its Amazon Web Services cloud computing platform. Finally, an out-of-benchmark position in luxury apparel e-commerce retailer Farfetch Ltd. weighed on relative performance, as the stock sharply declined following the company’s acquisition of New Guards Group.
Conversely, the Fund’s exposure to a number of Brazilian companies contributed positively to relative performance, as improving macroeconomic conditions in the country benefited Brazil’s stock market broadly. Notable names included retail and e-commerce company Magazine Luiza SA and tech-based education services provider Arco Platform Ltd. Elsewhere, an out-of-benchmark position in data analytics company Alteryx, Inc. contributed to Fund performance, as strong sales growth and speculation about the company becoming a potential acquisition target lifted the stock.
Describe recent portfolio activity.
During the period, the Fund increased its exposure to software, semiconductors, and services stocks, and kept its exposure to hardware companies unchanged. The Fund’s exposure to internet and gaming companies decreased during the period.
Describe portfolio positioning at period end.
At the end of the period, the Fund had the largest sub-sector exposures to the internet and software industries, as the investment adviser believes that these areas have the best prospects for secular organic growth driven by innovation as well as less sensitivity to late-cycle macroeconomic trends. The Fund also retained a substantial investment in the 5G supply chain, as this emerging technology remains on track to disrupt the internet and communications space.
In general, the Fund’s investment process continued to focus on the most innovative secular growth stories. The sector should benefit from numerous thematic tailwinds, including artificial intelligence and data analytics, the shift to cloud-based IT architecture, strong growth in the Internet of Things arena, and the continued development of autonomous vehicle technology. In addition to secular growth, the sector also offers high dividend growth rates and cash-rich balance sheets. The Fund’s philosophy is to diversify positions across industries, geographies, market capitalization, and investment styles to offer exposure to high-growth stocks as well as more established cyclical companies.
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.
| F U N D S U M M A R Y | 13 |
| Fund Summary as of September 30, 2019 (continued) | BlackRock Technology Opportunities Fund |
Portfolio Information
TEN LARGEST HOLDINGS
|
|
||||
| Security(a) |
Percent of
Net Assets |
|||
|
|
||||
|
Microsoft Corp. |
5% | |||
|
Alphabet, Inc., Class A |
3 | |||
|
Tencent Holdings Ltd. |
3 | |||
|
Alibaba Group Holding Ltd. — ADR |
3 | |||
|
Amazon.com, Inc. |
3 | |||
|
Apple Inc. |
3 | |||
|
salesforce.com, Inc. |
3 | |||
|
Twilio, Inc., Class A |
2 | |||
|
PayPal Holdings, Inc. |
2 | |||
|
Facebook, Inc., Class A |
2 | |||
|
|
||||
| (a) |
Excludes short-term investments. |
INDUSTRY ALLOCATION
|
|
||||
| Industry |
Percent of
Net Assets |
|||
|
|
||||
|
Software |
28% | |||
|
IT Services |
17 | |||
|
Semiconductors & Semiconductor Equipment |
14 | |||
|
Interactive Media & Services |
12 | |||
|
Internet & Direct Marketing Retail |
10 | |||
|
Electronic Equipment, Instruments & Components |
3 | |||
|
Technology Hardware, Storage & Peripherals |
3 | |||
|
Entertainment |
2 | |||
|
Health Care Technology |
1 | |||
|
Diversified Telecommunication Services |
1 | |||
|
Multiline Retail |
1 | |||
|
Diversified Consumer Services |
1 | |||
|
Household Durables |
1 | |||
|
Equity Real Estate Investment Trusts (REITs) |
1 | |||
|
Automobiles |
1 | |||
|
Communications Equipment |
1 | |||
|
Professional Services |
1 | |||
|
Road & Rail |
1 | |||
|
Other(a) |
— | |||
|
Short-Term Securities |
9 | |||
|
Liabilities in Excess of Other Assets |
(8) | |||
|
|
||||
| (a) |
Includes holdings within industries that are 1% or less of net assets. Please refer to the Schedule of Investments for such industries. |
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.
| 14 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
| Fund Summary as of September 30, 2019 (continued) | BlackRock Technology Opportunities Fund |
TOTAL RETURN BASED ON A $10,000 INVESTMENT
| (a) |
Assuming maximum sales charges, if any, transaction costs and other operating expenses, including investment advisory fees and administration fees, if any. Institutional Shares do not have a sales charge. |
| (b) |
Under normal market conditions, the Fund invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in equity securities issued by U.S. and non-U.S. technology companies in all market capitalization ranges, selected for their rapid and sustainable growth potential from the development, advancement and use of technology. The Fund’s total returns prior to December 30, 2017 are the returns of the Fund when it followed different investment strategies under the name BlackRock Science & Technology Opportunities Portfolio. |
| (c) |
An index that measures the performance of the technology sector in developed and emerging equity markets. |
Performance Summary for the Period Ended September 30, 2019
| Average Annual Total Returns(a)(b) | ||||||||||||||||||||||
| 1 Year | 5 Years | 10 Years | ||||||||||||||||||||
|
6-Month
Total Returns |
w/o sales
charge |
w/sales
charge |
w/o sales
charge |
w/sales
charge |
w/o sales
charge |
w/sales
charge |
||||||||||||||||
|
Institutional |
3.62% | 3.63% | N/A | 20.16% | N/A | 16.54% | N/A | |||||||||||||||
|
Service |
3.49 | 3.36 | N/A | 19.88 | N/A | 16.28 | N/A | |||||||||||||||
|
Investor A |
3.49 | 3.36 | (2.07)% | 19.83 | 18.54% | 16.17 | 15.54% | |||||||||||||||
|
Investor C |
3.08 | 2.60 | 1.60 | 18.89 | 18.89 | 15.20 | 15.20 | |||||||||||||||
|
Class R |
3.36 | 3.12 | N/A | 19.50 | N/A | 15.86 | N/A | |||||||||||||||
|
MSCI All-Country World Information Technology Index |
7.97 | 6.32 | N/A | 15.56 | N/A | 14.40 | N/A | |||||||||||||||
| (a) |
Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See “About Fund Performance” on page 16 for a detailed description of share classes, including any related sales charges and fees. |
| (b) |
Under normal market conditions, the Fund invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in equity securities issued by U.S. and non- U.S. technology companies in all market capitalization ranges, selected for their rapid and sustainable growth potential from the development, advancement and use of technology. The Fund’s total returns prior to December 30, 2017 are the returns of the Fund when it followed different investment strategies under the name BlackRock Science & Technology Opportunities Portfolio. |
N/A — Not applicable as share class and index do not have a sales charge.
Past performance is not indicative of future results.
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Expense Example
| Actual | Hypothetical(b) | |||||||||||||||||||||||||||||||
|
Beginning
Account Value (04/01/19) |
Ending
Account Value (09/30/19) |
Expenses Paid
During the Period(a) |
Beginning
Account Value (04/01/19) |
Ending
Account Value (09/30/19) |
Expenses Paid
During the Period(a) |
Annualized
Expense Ratio |
||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
|
Institutional |
$1,000.00 | $1,036.20 | $4.75 | $1,000.00 | $1,020.68 | $4.71 | 0.92% | |||||||||||||||||||||||||
|
Service |
1,000.00 | 1,034.90 | 6.03 | 1,000.00 | 1,019.41 | 5.99 | 1.17 | |||||||||||||||||||||||||
|
Investor A |
1,000.00 | 1,034.90 | 6.03 | 1,000.00 | 1,019.41 | 5.99 | 1.17 | |||||||||||||||||||||||||
|
Investor C |
1,000.00 | 1,030.80 | 9.88 | 1,000.00 | 1,015.61 | 9.81 | 1.92 | |||||||||||||||||||||||||
|
Class R |
1,000.00 | 1,033.60 | 7.32 | 1,000.00 | 1,018.15 | 7.26 | 1.42 | |||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
| (a) |
For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period shown). |
| (b) |
Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365. |
See “Disclosure of Expenses” on page 17 for further information on how expenses were calculated.
| F U N D S U M M A R Y | 15 |
Institutional and Class K Shares (Class K Shares are available only for BlackRock Advantage International Fund, BlackRock Health Sciences Opportunities Portfolio and BlackRock International Dividend Fund) are not subject to any sales charge. These shares bear no ongoing distribution or service fees and are available only to certain eligible investors. BlackRock Advantage International Fund’s and BlackRock International Dividend Fund’s Class K Shares performance shown prior to the Class K Shares inception date of January 25, 2018 is that of Institutional Shares. BlackRock Health Sciences Opportunities Portfolio’s Class K Shares performance shown prior to the Class K Shares inception date of June 8, 2016 is that of Investor A Shares. The performance of each Fund’s Class K Shares would be substantially similar to Investor A Shares or Institutional Shares, as applicable, because the share classes of a fund invest in the same portfolio of securities and performance would only differ to the extent that Class K Shares and Investor A Shares or Institutional Shares, as applicable, have different expenses. The actual returns of Class K Shares would have been higher than those of Investor A Shares or Institutional Shares, as applicable, because Class K Shares have lower expenses than Investor A Shares and Institutional Shares.
Service Shares (for all Funds except BlackRock Advantage International Fund) are not subject to any sales charge. These shares are subject to a service fee of 0.25% per year (but no distribution fee) and are only available to certain eligible investors.
Investor A Shares are subject to a maximum initial sales charge (front-end load) of 5.25% and a service fee of 0.25% per year (but no distribution fee). Certain redemptions of these shares may be subject to a contingent deferred sales charge (“CDSC”) where no initial sales charge was paid at the time of purchase. These shares are generally available through financial intermediaries.
Investor C Shares are subject to a 1.00% CDSC if redeemed within one year of purchase. In addition, these shares are subject to a distribution fee of 0.75% per year and a service fee of 0.25% per year. These shares are generally available through financial intermediaries. Effective November 8, 2018, the Funds adopted an automatic conversion feature whereby Investor C Shares held for approximately ten years will be automatically converted into Investor A Shares.
Class R Shares (for BlackRock Advantage International Fund, BlackRock Health Science Opportunities Portfolio and BlackRock Technology Opportunities Fund) are not subject to any sales charge. These shares are subject to a distribution fee of 0.25% per year and a service fee of 0.25% per year. These shares are available only to certain employer-sponsored retirement plans. BlackRock Advantage International Fund’s Class R Shares performance shown prior to the Class R Shares inception date of September 12, 2011 is that of Institutional Shares (which have no distribution or services fees) and was restated to reflect Class R Shares fees. BlackRock Health Sciences Opportunities Portfolio’s Class R Shares performance shown prior to the Class R Shares inception date of September 12, 2011 is that of Investor A Shares and was restated to reflect Class R Shares fees.
Performance information reflects past performance and does not guarantee future results. Current performance may be lower or higher than the performance data quoted. Refer to www.blackrock.com to obtain performance data current to the most recent month-end. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Figures shown in the performance tables on the previous pages assume reinvestment of all distributions, if any, at net asset value (“NAV”) on the ex-dividend date. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Distributions paid to each class of shares will vary because of the different levels of service, distribution and transfer agency fees applicable to each class, which are deducted from the income available to be paid to shareholders.
BlackRock Advisors, LLC (the “Manager”), each Fund’s investment adviser, has contractually and/or voluntarily agreed to waive and/or reimburse a portion of each Fund’s expenses. Without such waiver and/or reimbursement, each Fund’s performance would have been lower. With respect to each Fund’s voluntary waiver, the Manager is under no obligation to waive and/or reimburse or to continue waiving and/or reimbursing its fees and such voluntary waiver may be reduced or discontinued at any time. With respect to each Fund’s contractual waiver, the Manager is under no obligation to continue waiving and/or reimbursing its fees after the applicable termination date of such agreement. See Note 6 of the Notes to Financial Statements for additional information on waivers and/or reimbursements.
| 16 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Shareholders of the Funds may incur the following charges: (a) transactional expenses, such as sales charges; and (b) operating expenses, including investment advisory fees, administration 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 April 1, 2019 and held through September 30, 2019) 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 and share class under the heading 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 examples 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 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.
| F U N D S U M M A R Y | 17 |
|
September 30, 2019 |
BlackRock Advantage International Fund (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
|
Common Stocks — 96.0% |
||||||||
| Australia — 7.8% | ||||||||
|
Adelaide Brighton Ltd. |
94,255 | $ | 194,174 | |||||
|
AGL Energy Ltd. |
35,427 | 458,318 | ||||||
|
Altium Ltd. |
7,382 | 166,594 | ||||||
|
Alumina Ltd. |
29,554 | 47,349 | ||||||
|
Ansell Ltd. |
73,377 | 1,358,312 | ||||||
|
Aristocrat Leisure Ltd. |
162,065 | 3,350,714 | ||||||
|
AusNet Services |
390,021 | 477,830 | ||||||
|
Australia & New Zealand Banking Group Ltd. |
205,727 | 3,951,951 | ||||||
|
Bank of Queensland Ltd. |
54,088 | 362,228 | ||||||
|
Beach Energy Ltd. |
20,938 | 35,739 | ||||||
|
BHP Billiton Ltd. |
330,252 | 8,160,717 | ||||||
|
BHP Group PLC |
64,809 | 1,384,267 | ||||||
|
Challenger Ltd. |
35,877 | 178,671 | ||||||
|
Charter Hall Group |
54,399 | 427,844 | ||||||
|
CIMIC Group Ltd. |
31,984 | 679,599 | ||||||
|
Cleanaway Waste Management, Ltd. |
13,061 | 17,208 | ||||||
|
Coca-Cola Amatil Ltd. |
61,403 | 441,852 | ||||||
|
Cochlear Ltd. |
13,257 | 1,865,586 | ||||||
|
Coles Group Ltd. |
9,168 | 95,315 | ||||||
|
Commonwealth Bank of Australia |
92,332 | 5,036,662 | ||||||
|
Crown Resorts Ltd. |
22,883 | 186,147 | ||||||
|
CSL Ltd. |
28,855 | 4,562,322 | ||||||
|
CSR Ltd. |
166,453 | 480,174 | ||||||
|
Domino’s Pizza Enterprises Ltd. |
17,012 | 533,307 | ||||||
|
Ensogo Ltd.(a)(b) |
122,284 | 1 | ||||||
|
Fortescue Metals Group Ltd. |
97,262 | 578,925 | ||||||
|
Goodman Group |
124,000 | 1,186,902 | ||||||
|
GPT Group |
25,783 | 107,216 | ||||||
|
Harvey Norman Holdings Ltd. |
14,591 | 44,637 | ||||||
|
IDP Education, Ltd. |
96,082 | 1,011,088 | ||||||
|
Independence Group NL |
9,841 | 42,811 | ||||||
|
JB Hi-Fi, Ltd. |
1,634 | 37,517 | ||||||
|
Macquarie Group Ltd. |
46,783 | 4,146,949 | ||||||
|
Magellan Financial Group Ltd. |
32,258 | 1,123,555 | ||||||
|
Medibank Pvt. Ltd. |
269,539 | 619,002 | ||||||
|
National Australia Bank Ltd. |
145,117 | 2,909,629 | ||||||
|
Newcrest Mining Ltd. |
18,293 | 422,123 | ||||||
|
Oil Search Ltd. |
72,202 | 356,443 | ||||||
|
Orica Ltd. |
32,805 | 499,563 | ||||||
|
Perpetual, Ltd. |
2,494 | 63,169 | ||||||
|
Platinum Asset Management Ltd. |
51,600 | 147,836 | ||||||
|
Qantas Airways Ltd. |
175,353 | 745,195 | ||||||
|
QBE Insurance Group Ltd. |
173,983 | 1,475,795 | ||||||
|
Ramsay Health Care Ltd. |
4,674 | 204,768 | ||||||
|
REA Group Ltd. |
17,599 | 1,286,615 | ||||||
|
Rio Tinto Ltd. |
37,827 | 2,369,294 | ||||||
|
Rio Tinto PLC |
33,429 | 1,737,717 | ||||||
|
Scentre Group |
657,289 | 1,743,822 | ||||||
|
Sonic Healthcare Ltd. |
6,823 | 129,371 | ||||||
|
South32 Ltd. |
157,406 | 277,616 | ||||||
|
Spark Infrastructure Group |
349,588 | 509,666 | ||||||
|
Stockland |
32,113 | 98,641 | ||||||
|
Sydney Airport |
147,485 | 800,282 | ||||||
|
Telstra Corp. Ltd. |
172,053 | 407,846 | ||||||
|
Treasury Wine Estates Ltd. |
67,281 | 844,503 | ||||||
|
Vicinity Centres |
283,658 | 492,143 | ||||||
|
Wesfarmers Ltd. |
39,863 | 1,071,033 | ||||||
|
Westpac Banking Corp. |
199,380 | 3,982,148 | ||||||
|
WiseTech Global Ltd. |
1,437 | 33,770 | ||||||
|
Woodside Petroleum Ltd. |
62,630 | 1,368,287 | ||||||
|
Woolworths Group Ltd. |
131,658 | 3,312,994 | ||||||
|
|
|
|||||||
| 70,641,752 | ||||||||
| Austria — 0.4% | ||||||||
|
Erste Group Bank AG(a) |
29,252 | 966,770 | ||||||
|
Raiffeisen Bank International AG |
8,598 | 199,403 | ||||||
|
Telekom Austria AG(a) |
4,835 | 35,150 | ||||||
|
Vienna Insurance Group AG Wiener Versicherung Gruppe |
21,664 | 564,345 | ||||||
| Security | Shares | Value | ||||||
| Austria (continued) | ||||||||
|
Wienerberger AG |
60,563 | $ | 1,474,300 | |||||
|
|
|
|||||||
| 3,239,968 | ||||||||
| Belgium — 1.0% | ||||||||
|
Anheuser-Busch InBev SA |
41,994 | 3,996,984 | ||||||
|
Groupe Bruxelles Lambert SA |
14,044 | 1,348,064 | ||||||
|
Solvay SA |
1 | 104 | ||||||
|
UCB SA |
51,587 | 3,742,772 | ||||||
|
|
|
|||||||
| 9,087,924 | ||||||||
| China — 0.4% | ||||||||
|
BOC Hong Kong Holdings Ltd. |
1,001,000 | 3,396,613 | ||||||
|
|
|
|||||||
| Denmark — 1.8% | ||||||||
|
AP Moller — Maersk A/S, Class B |
659 | 744,955 | ||||||
|
Carlsberg A/S, Class B |
4,255 | 628,796 | ||||||
|
Chr Hansen Holding A/S |
15,011 | 1,271,638 | ||||||
|
Danske Bank A/S |
3,865 | 53,771 | ||||||
|
Demant A/S(a) |
9,723 | 248,909 | ||||||
|
DSV Panalpina A/S |
23,819 | 2,263,997 | ||||||
|
FLSmidth & Co. A/S |
2,060 | 89,613 | ||||||
|
Genmab A/S(a) |
4,137 | 840,571 | ||||||
|
GN Store Nord A/S |
22,690 | 919,773 | ||||||
|
H Lundbeck A/S |
16,275 | 539,559 | ||||||
|
ISS A/S |
29,562 | 730,872 | ||||||
|
Novo Nordisk A/S, Class B |
87,668 | 4,530,348 | ||||||
|
Novozymes A/S, B Shares |
16,025 | 674,029 | ||||||
|
Rockwool International A/S, B Shares |
897 | 179,355 | ||||||
|
Royal Unibrew A/S |
8,784 | 723,714 | ||||||
|
SimCorp A/S |
11,324 | 994,571 | ||||||
|
Topdanmark A/S |
2,534 | 122,322 | ||||||
|
Tryg A/S |
30,819 | 882,979 | ||||||
|
Vestas Wind Systems A/S |
2,632 | 204,185 | ||||||
|
|
|
|||||||
| 16,643,957 | ||||||||
| Finland — 1.2% | ||||||||
|
DNA Oyj |
1,712 | 38,970 | ||||||
|
Fortum Oyj |
60,188 | 1,422,624 | ||||||
|
Kesko Oyj, B Shares |
10,664 | 673,582 | ||||||
|
Kone OYJ, Class B |
109,439 | 6,228,239 | ||||||
|
Metso Oyj |
4,582 | 170,988 | ||||||
|
Neste Oyj |
1,871 | 61,902 | ||||||
|
Nordea Bank Abp |
4,276 | 30,332 | ||||||
|
UPM-Kymmene Oyj |
21,033 | 621,078 | ||||||
|
Valmet OYJ |
24,498 | 475,245 | ||||||
|
Wartsila OYJ Abp |
75,430 | 843,991 | ||||||
|
|
|
|||||||
| 10,566,951 | ||||||||
| France — 11.8% | ||||||||
|
Air Liquide SA |
33,145 | 4,717,216 | ||||||
|
Airbus SE |
32,362 | 4,201,525 | ||||||
|
Amundi SA(c) |
779 | 54,264 | ||||||
|
Arkema SA |
9,694 | 903,742 | ||||||
|
AXA SA |
45,098 | 1,151,527 | ||||||
|
BNP Paribas SA |
16,121 | 783,756 | ||||||
|
Bouygues SA |
75,441 | 3,021,178 | ||||||
|
Bureau Veritas SA |
7,392 | 177,924 | ||||||
|
Capgemini SE |
13,680 | 1,610,841 | ||||||
|
Christian Dior SE |
10,386 | 4,913,527 | ||||||
|
Cie Generale des Etablissements Michelin SCA |
4,449 | 495,367 | ||||||
|
Compagnie de Saint-Gobain |
9,393 | 368,139 | ||||||
|
Credit Agricole SA |
50,796 | 614,826 | ||||||
|
Danone SA |
23,095 | 2,034,255 | ||||||
|
Dassault Aviation SA |
475 | 672,011 | ||||||
|
Dassault Systemes SE |
26,696 | 3,803,028 | ||||||
|
Edenred |
71,771 | 3,442,851 | ||||||
|
Eiffage SA |
13,258 | 1,374,396 | ||||||
|
Engie SA |
178,891 | 2,919,899 | ||||||
|
EssilorLuxottica SA |
12,067 | 1,739,817 | ||||||
|
Gaztransport Et Technigaz SA |
8,815 | 872,145 | ||||||
| 18 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Advantage International Fund (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
| France (continued) | ||||||||
|
Hermes International |
1,316 | $ | 908,937 | |||||
|
Imerys SA |
1,841 | 73,946 | ||||||
|
Ingenico Group SA |
1,811 | 176,511 | ||||||
|
Ipsen SA |
6,677 | 633,425 | ||||||
|
Kering SA |
4,456 | 2,270,718 | ||||||
|
Korian SA |
1,154 | 47,439 | ||||||
|
Lagardere SCA |
37,797 | 835,952 | ||||||
|
L’Oreal SA |
36,802 | 10,292,407 | ||||||
|
LVMH Moet Hennessy Louis Vuitton SE |
28,747 | 11,405,695 | ||||||
|
Natixis SA |
101,861 | 422,028 | ||||||
|
Nexity SA |
4,077 | 194,076 | ||||||
|
Orange SA |
95,687 | 1,497,693 | ||||||
|
Pernod Ricard SA |
27,823 | 4,951,979 | ||||||
|
Peugeot SA |
7,186 | 179,354 | ||||||
|
Publicis Groupe SA |
37,809 | 1,860,407 | ||||||
|
Rexel SA |
53,852 | 575,984 | ||||||
|
Rubis SCA |
7,035 | 408,609 | ||||||
|
Safran SA |
26,696 | 4,203,309 | ||||||
|
Sanofi |
53,435 | 4,949,851 | ||||||
|
Sartorius Stedim Biotech |
8,486 | 1,186,966 | ||||||
|
Schneider Electric SE |
77,192 | 6,749,854 | ||||||
|
SCOR SE |
27,702 | 1,143,749 | ||||||
|
Societe BIC SA |
753 | 50,550 | ||||||
|
Société Générale SA |
6,484 | 177,611 | ||||||
|
Sopra Steria Group |
855 | 106,480 | ||||||
|
SPIE SA |
15,817 | 316,502 | ||||||
|
Teleperformance |
5,620 | 1,217,728 | ||||||
|
Television Francaise 1 |
15,157 | 133,046 | ||||||
|
TOTAL SA |
112,216 | 5,842,741 | ||||||
|
Ubisoft Entertainment SA(a) |
2,923 | 210,722 | ||||||
|
Veolia Environnement SA |
46,897 | 1,187,981 | ||||||
|
Vinci SA |
10,758 | 1,158,846 | ||||||
|
Vivendi SA |
49,321 | 1,349,563 | ||||||
|
Wendel SA |
1,384 | 190,718 | ||||||
|
Worldline SA(a)(c) |
3,023 | 190,439 | ||||||
|
|
|
|||||||
| 106,974,050 | ||||||||
| Germany — 7.6% | ||||||||
|
adidas AG |
14,218 | 4,426,708 | ||||||
|
Allianz SE, Registered Shares |
42,238 | 9,831,857 | ||||||
|
alstria office REIT-AG |
15,295 | 261,732 | ||||||
|
Bayer AG, Registered Shares |
51,218 | 3,608,479 | ||||||
|
Bayerische Motoren Werke AG |
17,872 | 1,258,663 | ||||||
|
Beiersdorf AG |
3,643 | 429,529 | ||||||
|
Carl Zeiss Meditec AG |
7,130 | 812,648 | ||||||
|
CompuGroup Medical SE |
7,748 | 466,162 | ||||||
|
Continental AG |
950 | 121,892 | ||||||
|
Covestro AG(c) |
2,665 | 131,870 | ||||||
|
CTS Eventim AG & Co. KGaA |
6,613 | 372,568 | ||||||
|
Daimler AG, Registered Shares |
40,595 | 2,018,265 | ||||||
|
Deutsche Boerse AG |
3,029 | 472,402 | ||||||
|
Deutsche Post AG, Registered Shares |
102,341 | 3,410,549 | ||||||
|
Deutsche Telekom AG, Registered Shares |
155,805 | 2,613,328 | ||||||
|
Duerr AG |
7,532 | 195,464 | ||||||
|
DWS Group GmbH & Co. KGaA(c) |
4,747 | 140,136 | ||||||
|
Evonik Industries AG |
72,422 | 1,787,833 | ||||||
|
Fielmann AG |
569 | 41,887 | ||||||
|
Fraport AG Frankfurt Airport Services Worldwide |
3,088 | 261,726 | ||||||
|
Freenet AG |
33,098 | 681,133 | ||||||
|
Fresenius Medical Care AG & Co. KGaA |
12,222 | 821,325 | ||||||
|
Fresenius SE & Co. KGaA |
43,211 | 2,021,446 | ||||||
|
Grand City Properties SA |
8,657 | 194,767 | ||||||
|
HeidelbergCement AG |
17,798 | 1,285,910 | ||||||
|
Hella GmbH & Co. KGaA |
679 | 30,351 | ||||||
|
HOCHTIEF AG |
16,059 | 1,830,094 | ||||||
|
HUGO BOSS AG |
6,986 | 374,023 | ||||||
|
Infineon Technologies AG |
3,934 | 70,681 | ||||||
| Security | Shares | Value | ||||||
| Germany (continued) | ||||||||
|
KION Group AG GmbH |
2,756 | $ | 144,936 | |||||
|
LEG Immobilien AG |
6,591 | 754,234 | ||||||
|
Merck KGaA |
2,064 | 232,510 | ||||||
|
MTU Aero Engines AG |
7,057 | 1,875,174 | ||||||
|
Nemetschek SE |
18,822 | 959,059 | ||||||
|
Porsche Automobil Holding SE, Preference Shares |
3,705 | 240,185 | ||||||
|
Puma SE |
13,530 | 1,046,896 | ||||||
|
Rational AG |
246 | 176,406 | ||||||
|
Rocket Internet SE(a)(c) |
1,133 | 29,261 | ||||||
|
SAP SE |
74,544 | 8,771,875 | ||||||
|
Siemens AG, Registered Shares |
44,935 | 4,810,090 | ||||||
|
Siemens Healthineers AG(c) |
13,545 | 532,620 | ||||||
|
Software AG |
46,382 | 1,273,408 | ||||||
|
Stroeer SE & Co. KGaA |
2,716 | 206,796 | ||||||
|
Symrise AG |
14,071 | 1,367,830 | ||||||
|
TAG Immobilien AG(a) |
13,217 | 301,620 | ||||||
|
Talanx AG |
426 | 18,408 | ||||||
|
Telefonica Deutschland Holding AG |
945,353 | 2,635,741 | ||||||
|
TLG Immobilien AG |
1,655 | 45,007 | ||||||
|
TUI AG |
66,365 | 770,758 | ||||||
|
Uniper SE |
12,338 | 404,641 | ||||||
|
Volkswagen AG |
6,022 | 1,035,211 | ||||||
|
Wirecard AG |
5,775 | 924,232 | ||||||
|
Zalando SE(a)(c) |
10,780 | 492,208 | ||||||
|
|
|
|||||||
| 69,022,534 | ||||||||
| Hong Kong — 2.5% | ||||||||
|
AIA Group Ltd. |
835,400 | 7,878,699 | ||||||
|
Cafe de Coral Holdings Ltd. |
36,000 | 96,403 | ||||||
|
Champion REIT |
25,000 | 16,177 | ||||||
|
Chow Tai Fook Jewellery Group Ltd. |
150,200 | 123,982 | ||||||
|
CK Asset Holdings, Ltd. |
117,500 | 796,073 | ||||||
|
CLP Holdings Ltd. |
87,500 | 919,703 | ||||||
|
Galaxy Entertainment Group Ltd. |
28,000 | 173,592 | ||||||
|
Hang Seng Bank Ltd. |
25,500 | 549,463 | ||||||
|
Henderson Land Development Co. Ltd. |
111,420 | 518,974 | ||||||
|
HKT Trust & HKT Ltd. |
393,000 | 623,424 | ||||||
|
Hong Kong Exchanges & Clearing Ltd. |
9,200 | 269,652 | ||||||
|
Hongkong Land Holdings Ltd. |
431,600 | 2,426,548 | ||||||
|
Hutchison Port Holdings Trust |
485,500 | 75,849 | ||||||
|
Hysan Development Co. Ltd. |
19,000 | 76,620 | ||||||
|
Jardine Matheson Holdings Ltd. |
17,400 | 931,199 | ||||||
|
Jardine Strategic Holdings Ltd. |
1,900 | 56,832 | ||||||
|
Kerry Properties Ltd. |
292,000 | 899,100 | ||||||
|
Link REIT |
2,500 | 27,577 | ||||||
|
MTR Corp Ltd. |
95,000 | 532,775 | ||||||
|
New World Development Co. Ltd. |
96,000 | 124,671 | ||||||
|
NWS Holdings Ltd. |
214,000 | 331,458 | ||||||
|
Power Assets Holdings Ltd. |
6,500 | 43,633 | ||||||
|
Shangri-La Asia Ltd. |
32,000 | 32,616 | ||||||
|
Sino Land Co. Ltd. |
182,000 | 273,549 | ||||||
|
Sun Hung Kai Properties Ltd. |
68,000 | 977,210 | ||||||
|
Swire Pacific Ltd., Class A |
112,500 | 1,047,070 | ||||||
|
Swire Properties Ltd. |
176,600 | 554,242 | ||||||
|
Techtronic Industries Co. Ltd. |
228,000 | 1,586,924 | ||||||
|
WH Group Ltd.(c) |
112,000 | 100,303 | ||||||
|
Wharf Holdings Ltd. |
22,000 | 47,985 | ||||||
|
Wharf Real Estate Investment Co. Ltd. |
21,000 | 114,692 | ||||||
|
Wheelock & Co. Ltd. |
104,005 | 592,534 | ||||||
|
|
|
|||||||
| 22,819,529 | ||||||||
| India — 0.0% | ||||||||
|
Jasper Infotech Private Ltd. (Acquired 5/7/14, cost $804,375)(a)(b)(d) |
1,080 | 274,147 | ||||||
|
|
|
|||||||
| Ireland — 0.1% | ||||||||
|
Kingspan Group PLC |
9,474 | 462,615 | ||||||
| S C H E D U L E S O F I N V E S T M E N T S | 19 |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Advantage International Fund (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
| Ireland (continued) | ||||||||
|
Smurfit Kappa Group PLC |
9,911 | $ | 294,713 | |||||
|
|
|
|||||||
| 757,328 | ||||||||
| Israel — 0.2% | ||||||||
|
Bank Hapoalim BM |
88,371 | 696,305 | ||||||
|
Bank Leumi Le-Israel BM |
93,092 | 662,799 | ||||||
|
Delek Group Ltd. |
231 | 26,831 | ||||||
|
Elbit Systems, Ltd. |
1,253 | 208,024 | ||||||
|
First International Bank Of Israel Ltd. |
3,032 | 80,710 | ||||||
|
Gazit-Globe Ltd. |
26,009 | 262,739 | ||||||
|
Israel Chemicals Ltd. |
14,352 | 71,802 | ||||||
|
Israel Discount Bank, Ltd. A Shares |
21,009 | 92,339 | ||||||
|
Nice Ltd.(a) |
457 | 65,867 | ||||||
|
Paz Oil Co. Ltd. |
239 | 35,032 | ||||||
|
|
|
|||||||
| 2,202,448 | ||||||||
| Italy — 1.1% | ||||||||
|
A2A SpA |
66,594 | 122,212 | ||||||
|
Assicurazioni Generali SpA |
19,688 | 381,549 | ||||||
|
Azimut Holding SpA |
2,600 | 48,793 | ||||||
|
Banca Mediolanum SpA |
4,799 | 36,023 | ||||||
|
Buzzi Unicem SpA |
14,580 | 334,340 | ||||||
|
Davide Campari-Milano SpA |
21,132 | 190,885 | ||||||
|
Eni SpA |
7,805 | 119,298 | ||||||
|
Ferrari NV |
24,745 | 3,818,491 | ||||||
|
Hera SpA |
86,533 | 355,106 | ||||||
|
Interpump Group SpA |
14,132 | 446,640 | ||||||
|
Iren SpA |
15,752 | 45,944 | ||||||
|
Italgas SpA |
73,879 | 476,755 | ||||||
|
Mediobanca Banca di Credito Finanziario SpA |
109,823 | 1,198,809 | ||||||
|
Moncler SpA |
35,314 | 1,258,715 | ||||||
|
Nexi SpA(a)(c) |
4,782 | 48,723 | ||||||
|
Snam SpA |
244,971 | 1,237,409 | ||||||
|
UniCredit SpA |
1,992 | 23,480 | ||||||
|
|
|
|||||||
| 10,143,172 | ||||||||
| Japan — 23.9% | ||||||||
|
ABC-Mart, Inc. |
500 | 31,784 | ||||||
|
Advantest Corp. |
17,700 | 789,030 | ||||||
|
AEON Financial Service Co. Ltd. |
27,100 | 409,747 | ||||||
|
Aeon Mall Co. Ltd. |
13,600 | 215,170 | ||||||
|
AGC, Inc. |
59,500 | 1,854,159 | ||||||
|
Aisin Seiki Co. Ltd. |
1,400 | 44,263 | ||||||
|
Amada Holdings Co. Ltd. |
37,100 | 402,034 | ||||||
|
Amano Corp. |
700 | 21,407 | ||||||
|
Aoyama Trading Co. Ltd. |
68,500 | 1,195,544 | ||||||
|
Aozora Bank Ltd. |
25,400 | 636,534 | ||||||
|
Asahi Group Holdings Ltd. |
14,200 | 705,216 | ||||||
|
Asahi Kasei Corp. |
94,400 | 936,453 | ||||||
|
Asics Corp. |
4,500 | 77,176 | ||||||
|
Astellas Pharma, Inc. |
165,200 | 2,363,047 | ||||||
|
Benesse Holdings, Inc. |
34,200 | 890,914 | ||||||
|
Bridgestone Corp. |
3,300 | 128,423 | ||||||
|
Brother Industries Ltd. |
27,300 | 497,454 | ||||||
|
Calbee, Inc. |
21,400 | 667,533 | ||||||
|
Canon Marketing Japan, Inc. |
2,100 | 44,775 | ||||||
|
Canon, Inc. |
78,000 | 2,085,890 | ||||||
|
Capcom Co. Ltd. |
1,300 | 34,600 | ||||||
|
Central Japan Railway Co. |
12,000 | 2,474,514 | ||||||
|
Chubu Electric Power Co., Inc. |
51,200 | 742,689 | ||||||
|
Chugai Pharmaceutical Co. Ltd. |
18,400 | 1,437,908 | ||||||
|
Citizen Watch Co. Ltd. |
259,900 | 1,275,062 | ||||||
|
Coca-Cola Bottlers Japan Holdings, Inc. |
2,100 | 47,221 | ||||||
|
COMSYS Holdings Corp. |
2,000 | 56,860 | ||||||
|
Credit Saison Co. Ltd. |
52,200 | 703,893 | ||||||
|
CyberAgent, Inc. |
3,500 | 134,915 | ||||||
|
Dai Nippon Printing Co. Ltd. |
3,400 | 88,199 | ||||||
|
Daicel Corp. |
38,000 | 323,285 | ||||||
|
Dai-ichi Life Holdings, Inc. |
207,500 | 3,154,602 | ||||||
|
Daiichi Sankyo Co. Ltd. |
29,900 | 1,889,363 | ||||||
|
Daikin Industries Ltd. |
13,700 | 1,806,881 | ||||||
| Security | Shares | Value | ||||||
| Japan (continued) | ||||||||
|
Daito Trust Construction Co. Ltd. |
9,300 | $ | 1,191,130 | |||||
|
Daiwa House Industry Co. Ltd. |
27,300 | 887,378 | ||||||
|
Daiwa Securities Group, Inc. |
74,200 | 332,063 | ||||||
|
Denka Co. Ltd. |
1,400 | 38,787 | ||||||
|
Denso Corp. |
31,200 | 1,378,647 | ||||||
|
Dentsu, Inc. |
13,400 | 473,825 | ||||||
|
DIC Corp. |
5,800 | 162,031 | ||||||
|
Don Quijote Holdings Corp. |
6,700 | 112,174 | ||||||
|
East Japan Railway Co. |
40,400 | 3,863,147 | ||||||
|
Eisai Co. Ltd. |
23,900 | 1,220,980 | ||||||
|
Electric Power Development Co. Ltd. |
39,100 | 893,850 | ||||||
|
FamilyMart Co. Ltd. |
7,800 | 190,580 | ||||||
|
Fancl Corp. |
8,500 | 227,015 | ||||||
|
FANUC Corp. |
7,300 | 1,379,871 | ||||||
|
Fast Retailing Co. Ltd. |
5,700 | 3,400,332 | ||||||
|
Fuji Media Holdings, Inc. |
53,200 | 687,371 | ||||||
|
FUJIFILM Holdings Corp. |
37,200 | 1,638,676 | ||||||
|
Fujitsu Ltd. |
2,400 | 192,889 | ||||||
|
Furukawa Electric Co. Ltd. |
5,900 | 143,388 | ||||||
|
Glory Ltd. |
14,900 | 418,788 | ||||||
|
GS Yuasa Corp. |
2,700 | 46,894 | ||||||
|
Gunma Bank Ltd. |
13,300 | 43,357 | ||||||
|
Hino Motors Ltd. |
36,000 | 298,334 | ||||||
|
HIS Co. Ltd. |
1,900 | 47,276 | ||||||
|
Hisamitsu Pharmaceutical Co., Inc. |
8,100 | 356,566 | ||||||
|
Hitachi Capital Corp. |
4,300 | 87,760 | ||||||
|
Hitachi Ltd. |
34,700 | 1,299,522 | ||||||
|
Honda Motor Co. Ltd. |
123,200 | 3,225,924 | ||||||
|
Hoshizaki Corp. |
4,000 | 315,306 | ||||||
|
Hoya Corp. |
6,800 | 556,940 | ||||||
|
Hulic Co. Ltd. |
6,700 | 68,786 | ||||||
|
Idemitsu Kosan Co. Ltd. |
8,400 | 238,328 | ||||||
|
IHI Corp. |
3,100 | 67,908 | ||||||
|
Isetan Mitsukoshi Holdings Ltd. |
89,800 | 719,145 | ||||||
|
Isuzu Motors Ltd. |
61,000 | 675,721 | ||||||
|
ITOCHU Corp. |
54,300 | 1,124,750 | ||||||
|
Izumi Co. Ltd. |
4,800 | 188,262 | ||||||
|
J Front Retailing Co. Ltd. |
11,500 | 135,112 | ||||||
|
Japan Airlines Co. Ltd. |
34,800 | 1,033,540 | ||||||
|
Japan Post Bank Co. Ltd. |
83,900 | 814,930 | ||||||
|
Japan Post Holdings Co. Ltd. |
185,600 | 1,712,641 | ||||||
|
Japan Post Insurance Co., Ltd. |
39,300 | 594,883 | ||||||
|
Japan Tobacco, Inc. |
118,500 | 2,596,293 | ||||||
|
JFE Holdings, Inc. |
73,600 | 891,468 | ||||||
|
JGC Holdings Corp. |
5,500 | 72,585 | ||||||
|
JXTG Holdings, Inc. |
529,500 | 2,420,316 | ||||||
|
Kajima Corp. |
90,700 | 1,194,917 | ||||||
|
Kakaku.com, Inc. |
16,200 | 400,196 | ||||||
|
Kandenko Co. Ltd. |
6,800 | 61,003 | ||||||
|
Kaneka Corp. |
5,100 | 159,827 | ||||||
|
Kansai Electric Power Co., Inc. |
24,300 | 272,167 | ||||||
|
Kao Corp. |
60,000 | 4,450,616 | ||||||
|
Kawasaki Heavy Industries Ltd. |
7,400 | 164,995 | ||||||
|
KDDI Corp. |
151,700 | 3,958,269 | ||||||
|
Kewpie Corp. |
3,500 | 81,976 | ||||||
|
Keyence Corp. |
5,000 | 3,112,281 | ||||||
|
Kinden Corp. |
2,300 | 34,203 | ||||||
|
Kirin Holdings Co. Ltd. |
98,500 | 2,096,063 | ||||||
|
Kobe Steel Ltd. |
8,200 | 44,042 | ||||||
|
Komatsu Ltd. |
40,000 | 922,391 | ||||||
|
Komeri Co. Ltd. |
6,500 | 131,562 | ||||||
|
Konami Holdings Corp. |
7,300 | 353,638 | ||||||
|
Konica Minolta, Inc. |
80,500 | 563,220 | ||||||
|
K’s Holdings Corp. |
4,100 | 44,653 | ||||||
|
Kubota Corp. |
22,600 | 343,716 | ||||||
|
Kyocera Corp. |
8,000 | 498,805 | ||||||
|
Kyowa Exeo Corp. |
2,000 | 48,743 | ||||||
|
Kyowa Hakko Kirin Co. Ltd. |
20,000 | 389,487 | ||||||
|
Lintec Corp. |
33,200 | 660,899 | ||||||
|
Lion Corp. |
6,200 | 122,651 | ||||||
| 20 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Advantage International Fund (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
| Japan (continued) | ||||||||
|
Mabuchi Motor Co. Ltd. |
1,500 | $ | 56,256 | |||||
|
Maeda Corp. |
4,400 | 38,586 | ||||||
|
Makita Corp. |
2,200 | 69,814 | ||||||
|
Marubeni Corp. |
164,000 | 1,093,711 | ||||||
|
Maruha Nichiro Corp. |
1,800 | 45,521 | ||||||
|
Mazda Motor Corp. |
115,300 | 1,033,471 | ||||||
|
MEIJI Holdings Co. Ltd. |
2,500 | 182,868 | ||||||
|
Miraca Holdings, Inc. |
7,200 | 164,696 | ||||||
|
Mitsubishi Chemical Holdings Corp. |
37,000 | 265,194 | ||||||
|
Mitsubishi Corp. |
17,700 | 435,826 | ||||||
|
Mitsubishi Electric Corp. |
64,800 | 864,442 | ||||||
|
Mitsubishi Estate Co. Ltd. |
77,100 | 1,490,846 | ||||||
|
Mitsubishi Gas Chemical Co., Inc. |
93,000 | 1,250,841 | ||||||
|
Mitsubishi Heavy Industries Ltd. |
43,900 | 1,725,639 | ||||||
|
Mitsubishi Motors Corp. |
299,600 | 1,307,094 | ||||||
|
Mitsubishi Tanabe Pharma Corp. |
16,300 | 179,631 | ||||||
|
Mitsubishi UFJ Financial Group, Inc. |
1,270,100 | 6,468,444 | ||||||
|
Mitsubishi UFJ Lease & Finance Co. Ltd. |
40,600 | 235,495 | ||||||
|
Mitsui & Co. Ltd. |
174,100 | 2,859,839 | ||||||
|
Mitsui Fudosan Co. Ltd. |
53,400 | 1,328,972 | ||||||
|
Mizuho Financial Group, Inc. |
1,185,600 | 1,821,975 | ||||||
|
MS&AD Insurance Group Holdings, Inc. |
45,100 | 1,465,938 | ||||||
|
Murata Manufacturing Co. Ltd. |
14,500 | 702,779 | ||||||
|
NEC Corp. |
26,500 | 1,120,593 | ||||||
|
NET One Systems Co. Ltd. |
1,800 | 48,832 | ||||||
|
Nexon Co. Ltd.(a) |
9,700 | 117,857 | ||||||
|
NH Foods Ltd. |
6,200 | 249,634 | ||||||
|
Nidec Corp. |
6,000 | 812,529 | ||||||
|
Nifco, Inc. |
2,000 | 48,061 | ||||||
|
Nihon M&A Center, Inc. |
1,600 | 45,259 | ||||||
|
Nikon Corp. |
28,800 | 361,306 | ||||||
|
Nintendo Co. Ltd. |
6,000 | 2,234,978 | ||||||
|
Nippon Building Fund, Inc. |
25 | 192,079 | ||||||
|
Nippon Electric Glass Co. Ltd. |
41,000 | 916,743 | ||||||
|
Nippon Express Co. Ltd. |
1,300 | 66,582 | ||||||
|
Nippon Shokubai Co. Ltd. |
3,000 | 171,277 | ||||||
|
Nippon Steel Corp. |
44,800 | 627,753 | ||||||
|
Nippon Telegraph & Telephone Corp. |
62,400 | 2,985,448 | ||||||
|
Nippon Television Holdings, Inc. |
8,700 | 111,980 | ||||||
|
Nissan Chemical Corp. |
2,800 | 117,238 | ||||||
|
Nissan Motor Co. Ltd. |
389,200 | 2,429,914 | ||||||
|
Nisshinbo Holdings, Inc. |
28,900 | 226,168 | ||||||
|
Nitori Holdings Co. Ltd. |
4,300 | 631,023 | ||||||
|
Nitto Denko Corp. |
25,900 | 1,254,990 | ||||||
|
Noevir Holdings Co. Ltd. |
1,600 | 83,861 | ||||||
|
NOK Corp. |
9,500 | 141,649 | ||||||
|
Nomura Holdings, Inc. |
51,300 | 218,068 | ||||||
|
Nomura Research Institute Ltd. |
6,400 | 127,884 | ||||||
|
NTN Corp. |
210,700 | 608,824 | ||||||
|
NTT Data Corp. |
21,200 | 275,145 | ||||||
|
NTT DOCOMO, Inc. |
136,600 | 3,488,031 | ||||||
|
Obayashi Corp. |
21,400 | 214,020 | ||||||
|
Obic Co. Ltd. |
3,000 | 343,775 | ||||||
|
Oji Holdings Corp. |
170,300 | 799,555 | ||||||
|
Olympus Corp. |
38,600 | 522,949 | ||||||
|
Ono Pharmaceutical Co. Ltd. |
30,200 | 550,002 | ||||||
|
Oriental Land Co. Ltd. |
7,900 | 1,204,082 | ||||||
|
ORIX Corp. |
199,500 | 2,984,321 | ||||||
|
Osaka Gas Co. Ltd. |
2,400 | 46,096 | ||||||
|
Otsuka Corp. |
18,300 | 732,394 | ||||||
|
Otsuka Holdings Co. Ltd. |
45,300 | 1,701,697 | ||||||
|
Panasonic Corp. |
115,800 | 943,734 | ||||||
|
Penta-Ocean Construction Co., Ltd. |
66,900 | 371,460 | ||||||
|
PeptiDream, Inc.(a) |
5,600 | 267,676 | ||||||
|
Persol Holdings Co. Ltd. |
2,400 | 45,616 | ||||||
|
Pigeon Corp. |
3,600 | 149,065 | ||||||
|
Pola Orbis Holdings, Inc. |
56,500 | 1,273,704 | ||||||
|
Recruit Holdings Co. Ltd. |
109,600 | 3,348,664 | ||||||
|
Relo Holdings, Inc. |
1,900 | 46,805 | ||||||
|
Resona Holdings, Inc. |
387,200 | 1,666,177 | ||||||
| Security | Shares | Value | ||||||
| Japan (continued) | ||||||||
|
Ricoh Co. Ltd. |
101,500 | $ | 918,300 | |||||
|
Rinnai Corp. |
400 | 26,953 | ||||||
|
Ryohin Keikaku Co. Ltd. |
36,500 | 684,253 | ||||||
|
Sanwa Holdings Corp. |
16,400 | 184,281 | ||||||
|
SCSK Corp. |
3,900 | 183,534 | ||||||
|
Secom Co. Ltd. |
19,100 | 1,747,763 | ||||||
|
Seiko Epson Corp. |
3,400 | 48,295 | ||||||
|
Seino Holdings Co. Ltd. |
7,800 | 97,922 | ||||||
|
Sekisui Chemical Co. Ltd. |
4,000 | 62,248 | ||||||
|
Seria Co. Ltd. |
4,400 | 107,069 | ||||||
|
Seven & i Holdings Co. Ltd. |
62,600 | 2,399,162 | ||||||
|
Seven Bank Ltd. |
7,600 | 20,879 | ||||||
|
Shikoku Electric Power Co., Inc. |
3,800 | 35,913 | ||||||
|
Shimachu Co. Ltd. |
2,800 | 68,485 | ||||||
|
Shimano, Inc. |
200 | 30,221 | ||||||
|
Shimizu Corp. |
69,600 | 632,240 | ||||||
|
Shin-Etsu Chemical Co. Ltd. |
18,800 | 2,023,077 | ||||||
|
Shionogi & Co. Ltd. |
24,100 | 1,343,648 | ||||||
|
Shiseido Co. Ltd. |
23,200 | 1,862,013 | ||||||
|
SKY Perfect JSAT Holdings, Inc. |
11,100 | 45,023 | ||||||
|
Skylark Co. Ltd. |
1,800 | 32,772 | ||||||
|
SMC Corp. |
1,700 | 730,708 | ||||||
|
Softbank Corp. |
103,200 | 1,398,327 | ||||||
|
SoftBank Group Corp. |
96,300 | 3,800,039 | ||||||
|
Sompo Holdings, Inc. |
11,600 | 487,164 | ||||||
|
Sony Corp. |
57,200 | 3,380,987 | ||||||
|
Subaru Corp. |
37,200 | 1,052,020 | ||||||
|
Sumitomo Chemical Co. Ltd. |
212,400 | 958,937 | ||||||
|
Sumitomo Corp. |
99,100 | 1,551,456 | ||||||
|
Sumitomo Heavy Industries Ltd. |
600 | 17,879 | ||||||
|
Sumitomo Mitsui Financial Group, Inc. |
127,900 | 4,394,915 | ||||||
|
Sumitomo Mitsui Trust Holdings, Inc. |
25,300 | 916,161 | ||||||
|
Sumitomo Realty & Development Co. Ltd. |
17,600 | 671,899 | ||||||
|
Sumitomo Rubber Industries Ltd. |
86,100 | 1,025,277 | ||||||
|
Sundrug Co. Ltd. |
28,600 | 902,426 | ||||||
|
Suntory Beverage & Food Ltd. |
9,000 | 385,307 | ||||||
|
Suzuki Motor Corp. |
20,100 | 856,247 | ||||||
|
T&D Holdings, Inc. |
177,600 | 1,897,786 | ||||||
|
Taiheiyo Cement Corp. |
12,900 | 346,641 | ||||||
|
Taisei Corp. |
41,800 | 1,626,732 | ||||||
|
Taisho Pharmaceutical Holdings Co. Ltd. |
6,600 | 482,594 | ||||||
|
Takashimaya Co. Ltd. |
12,000 | 140,369 | ||||||
|
Takeda Pharmaceutical Co. Ltd. |
111,400 | 3,822,767 | ||||||
|
Teijin Ltd.(a) |
7,700 | 148,626 | ||||||
|
Terumo Corp. |
16,400 | 530,675 | ||||||
|
TIS, Inc. |
2,500 | 144,446 | ||||||
|
Tohoku Electric Power Co., Inc. |
21,100 | 206,237 | ||||||
|
Tokai Tokyo Financial Holdings, Inc. |
99,200 | 274,876 | ||||||
|
Tokio Marine Holdings, Inc. |
42,800 | 2,296,098 | ||||||
|
Tokyo Broadcasting System Holdings, Inc. |
11,600 | 189,014 | ||||||
|
Tokyo Electron Ltd. |
14,100 | 2,708,946 | ||||||
|
Tokyo Tatemono Co. Ltd. |
7,300 | 103,037 | ||||||
|
Tokyu Fudosan Holdings Corp. |
101,000 | 646,417 | ||||||
|
Topcon Corp. |
20,500 | 273,614 | ||||||
|
Toppan Printing Co. Ltd. |
5,400 | 95,902 | ||||||
|
Toshiba Corp. |
28,100 | 859,535 | ||||||
|
Tosoh Corp. |
2,900 | 38,633 | ||||||
|
Toyobo Co. Ltd. |
3,800 | 50,058 | ||||||
|
Toyota Boshoku Corp. |
3,900 | 54,851 | ||||||
|
Toyota Motor Corp. |
123,300 | 8,280,859 | ||||||
|
Toyota Tsusho Corp. |
1,400 | 45,441 | ||||||
|
Trend Micro, Inc. |
21,400 | 1,022,673 | ||||||
|
TS Tech Co. Ltd. |
20,200 | 617,844 | ||||||
|
TV Asahi Holdings Corp. |
2,200 | 34,730 | ||||||
|
Ube Industries Ltd. |
124,200 | 2,523,148 | ||||||
|
Ulvac, Inc. |
900 | 36,447 | ||||||
|
Unicharm Corp. |
8,600 | 273,343 | ||||||
|
Yahoo Japan Corp. |
260,700 | 734,492 | ||||||
|
Yamaguchi Financial Group, Inc. |
74,300 | 513,146 | ||||||
|
Yamaha Motor Co. Ltd. |
64,600 | 1,177,665 | ||||||
| S C H E D U L E S O F I N V E S T M E N T S | 21 |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Advantage International Fund (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
| Japan (continued) | ||||||||
|
Yamato Holdings Co. Ltd. |
55,200 | $ | 833,970 | |||||
|
Yamato Kogyo Co. Ltd. |
1,600 | 39,888 | ||||||
|
Zenkoku Hosho Co. Ltd. |
8,300 | 324,343 | ||||||
|
Zeon Corp. |
26,700 | 327,353 | ||||||
|
|
|
|||||||
| 217,562,706 | ||||||||
| Luxembourg — 0.0% | ||||||||
|
ArcelorMittal |
3,080 | 43,331 | ||||||
|
RTL Group SA |
5,418 | 260,505 | ||||||
|
Tenaris SA |
18,707 | 198,415 | ||||||
|
|
|
|||||||
| 502,251 | ||||||||
| Macau — 0.1% | ||||||||
|
Sands China Ltd. |
212,800 | 961,575 | ||||||
|
|
|
|||||||
| Netherlands — 4.6% | ||||||||
|
Adyen NV(a)(c) |
699 | 459,681 | ||||||
|
Aegon NV |
393,005 | 1,632,206 | ||||||
|
Akzo Nobel NV |
1,866 | 166,266 | ||||||
|
ASM International NV |
8,697 | 800,144 | ||||||
|
ASML Holding NV |
24,724 | 6,131,905 | ||||||
|
ASR Nederland NV |
44,790 | 1,652,738 | ||||||
|
BE Semiconductor Industries NV(e) |
13,481 | 421,705 | ||||||
|
Euronext NV(c) |
1,472 | 120,529 | ||||||
|
EXOR NV |
1,248 | 83,583 | ||||||
|
ING Groep NV |
257,782 | 2,692,988 | ||||||
|
Koninklijke DSM NV |
20,699 | 2,491,793 | ||||||
|
Koninklijke KPN NV |
13,841 | 43,135 | ||||||
|
Koninklijke Philips NV |
61,680 | 2,850,186 | ||||||
|
NN Group NV |
77,956 | 2,762,660 | ||||||
|
QIAGEN NV(a) |
12,636 | 413,814 | ||||||
|
Randstad NV |
30,282 | 1,486,732 | ||||||
|
Royal Dutch Shell PLC, A Shares |
293,752 | 8,615,102 | ||||||
|
Royal Dutch Shell PLC, B Shares |
213,220 | 6,301,780 | ||||||
|
Signify NV(c) |
13,125 | 360,710 | ||||||
|
Wolters Kluwer NV |
35,659 | 2,601,869 | ||||||
|
|
|
|||||||
| 42,089,526 | ||||||||
| New Zealand — 0.0% | ||||||||
|
Contact Energy Ltd. |
18,464 | 98,752 | ||||||
|
Mercury NZ Ltd. |
27,000 | 84,725 | ||||||
|
|
|
|||||||
| 183,477 | ||||||||
| Norway — 0.4% | ||||||||
|
Aker BP ASA |
2,273 | 60,566 | ||||||
|
DNB ASA |
158,449 | 2,793,137 | ||||||
|
Leroy Seafood Group ASA |
21,454 | 130,510 | ||||||
|
Schibsted ASA, Class A |
8,537 | 252,640 | ||||||
|
Storebrand ASA |
15,091 | 95,403 | ||||||
|
TGS NOPEC Geophysical Co. ASA |
4,201 | 106,332 | ||||||
|
Tomra Systems ASA |
16,605 | 443,719 | ||||||
|
Yara International ASA |
5,340 | 230,233 | ||||||
|
|
|
|||||||
| 4,112,540 | ||||||||
| Portugal — 0.3% | ||||||||
|
Galp Energia SGPS SA |
155,176 | 2,333,723 | ||||||
|
|
|
|||||||
| Singapore — 1.0% | ||||||||
|
CapitaLand Mall Trust |
599,700 | 1,141,647 | ||||||
|
DBS Group Holdings Ltd.(e) |
47,500 | 859,328 | ||||||
|
Keppel REIT(e) |
56,000 | 51,049 | ||||||
|
Oversea-Chinese Banking Corp. Ltd. |
202,800 | 1,594,291 | ||||||
|
Singapore Exchange Ltd. |
60,300 | 369,943 | ||||||
|
Singapore Technologies Engineering, Ltd. |
226,100 | 628,495 | ||||||
|
Singapore Telecommunications Ltd. |
453,000 | 1,016,411 | ||||||
|
Suntec Real Estate Investment Trust |
861,500 | 1,185,183 | ||||||
|
United Overseas Bank Ltd. |
121,500 | 2,258,079 | ||||||
|
Venture Corp. Ltd. |
10,800 | 119,755 | ||||||
|
|
|
|||||||
| 9,224,181 | ||||||||
| South Africa — 0.4% | ||||||||
|
Anglo American PLC |
145,977 | 3,354,824 | ||||||
|
|
|
|||||||
| Security | Shares | Value | ||||||
| Spain — 3.2% | ||||||||
|
Acciona SA |
4,807 | $ | 508,743 | |||||
|
Acerinox SA |
8,415 | 72,065 | ||||||
|
ACS Actividades de Construccion y Servicios SA |
29,272 | 1,169,595 | ||||||
|
Aena SME SA(c) |
14,545 | 2,662,518 | ||||||
|
Amadeus IT Group SA |
32,477 | 2,327,037 | ||||||
|
Applus Services SA |
12,269 | 159,115 | ||||||
|
Banco Bilbao Vizcaya Argentaria SA |
766,751 | 3,991,324 | ||||||
|
Banco Santander SA |
601,193 | 2,446,155 | ||||||
|
Bankinter SA |
48,189 | 304,088 | ||||||
|
CaixaBank SA |
226,371 | 593,770 | ||||||
|
Cie Automotive SA |
1,844 | 46,239 | ||||||
|
Corp. Financiera Alba SA |
3,377 | 164,531 | ||||||
|
Grifols SA |
18,897 | 557,050 | ||||||
|
Iberdrola SA |
283,473 | 2,946,364 | ||||||
|
Industria de Diseno Textil SA |
95,799 | 2,964,758 | ||||||
|
Mediaset Espana Comunicacion SA |
24 | 155 | ||||||
|
Merlin Properties Socimi SA |
31,928 | 445,759 | ||||||
|
Repsol SA |
152,901 | 2,384,650 | ||||||
|
Telefonica SA |
704,086 | 5,380,042 | ||||||
|
|
|
|||||||
| 29,123,958 | ||||||||
| Sweden — 2.6% | ||||||||
|
AAK AB |
2,578 | 49,965 | ||||||
|
Alfa Laval AB |
6,072 | 119,765 | ||||||
|
Assa Abloy AB, Class B |
190,214 | 4,228,679 | ||||||
|
Atlas Copco AB, A Shares |
26,463 | 814,879 | ||||||
|
Elekta AB, B Shares |
55,912 | 735,734 | ||||||
|
Epiroc AB, Class A |
43,947 | 475,953 | ||||||
|
Evolution Gaming Group AB(c) |
5,421 | 106,532 | ||||||
|
Fabege AB |
55,791 | 919,067 | ||||||
|
Fastighets AB Balder, B Shares(a) |
3,359 | 127,165 | ||||||
|
Hennes & Mauritz AB, Class B |
16,936 | 328,293 | ||||||
|
Hexagon AB, B Shares |
4,045 | 194,848 | ||||||
|
Husqvarna AB, Class B |
5,097 | 38,762 | ||||||
|
Industrivarden AB, C Shares |
71,528 | 1,564,750 | ||||||
|
Investor AB, B Shares |
50,108 | 2,447,138 | ||||||
|
Kinnevik AB, Class B |
38,383 | 1,009,158 | ||||||
|
Saab AB, B Shares |
4,046 | 116,076 | ||||||
|
Skandinaviska Enskilda Banken AB, Class A |
124,976 | 1,148,368 | ||||||
|
SKF AB, B Shares |
2,526 | 41,712 | ||||||
|
SSAB AB, A Shares |
16,327 | 45,396 | ||||||
|
Swedbank AB, A Shares |
44,380 | 639,147 | ||||||
|
Swedish Match AB |
10,936 | 452,291 | ||||||
|
Telefonaktiebolaget LM Ericsson, B Shares |
167,007 | 1,333,774 | ||||||
|
Volvo AB, B Shares |
450,744 | 6,325,350 | ||||||
|
|
|
|||||||
| 23,262,802 | ||||||||
| Switzerland — 9.4% | ||||||||
|
Banque Cantonale Vaudoise, Registered Shares |
385 | 294,609 | ||||||
|
Barry Callebaut AG, Registered Shares |
221 | 455,819 | ||||||
|
Cie Financiere Richemont SA, Registered Shares |
11,644 | 853,338 | ||||||
|
Clariant AG, Registered Shares(a) |
5,761 | 112,211 | ||||||
|
Coca-Cola HBC AG(a) |
2,617 | 85,472 | ||||||
|
dormakaba Holding AG(a) |
121 | 78,039 | ||||||
|
Dufry AG Registered Shares(a) |
6,561 | 548,838 | ||||||
|
Flughafen Zurich AG, Registered Shares |
7,433 | 1,375,848 | ||||||
|
Galenica AG(a)(c) |
17,492 | 1,004,670 | ||||||
|
Geberit AG |
2,068 | 988,267 | ||||||
|
Givaudan SA, Registered Shares |
804 | 2,243,982 | ||||||
|
Glencore PLC(a) |
47,436 | 142,950 | ||||||
|
Kuehne + Nagel International AG Registered Shares |
229 | 33,698 | ||||||
|
LafargeHolcim Ltd., Registered Shares(a) |
69,111 | 3,403,286 | ||||||
|
Landis+Gyr Group AG(a) |
6,530 | 585,321 | ||||||
|
Logitech International SA, Registered Shares |
41,864 | 1,701,245 | ||||||
|
Nestle SA, Registered Shares |
203,395 | 22,059,111 | ||||||
| 22 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Advantage International Fund (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
| Switzerland (continued) | ||||||||
|
Novartis AG, Registered Shares |
166,180 | $ | 14,422,262 | |||||
|
Pargesa Holding SA |
5,495 | 422,667 | ||||||
|
Partners Group Holding AG |
2,022 | 1,552,808 | ||||||
|
PSP Swiss Property AG, Registered Shares |
8,158 | 1,035,756 | ||||||
|
Roche Holding AG |
61,338 | 17,859,461 | ||||||
|
Schindler Holding AG Participation Certificates |
332 | 74,297 | ||||||
|
Schindler Holding AG Registered Shares |
76 | 16,955 | ||||||
|
Sika AG, Registered Shares |
16,842 | 2,464,184 | ||||||
|
Sonova Holding AG, Registered Shares |
1,804 | 419,756 | ||||||
|
Straumann Holding AG, Registered Shares |
3,202 | 2,619,072 | ||||||
|
Sulzer AG, Registered Shares |
2 | 197 | ||||||
|
Sunrise Communications Group AG(a)(c) |
33,212 | 2,584,300 | ||||||
|
Swiss Re AG |
14,253 | 1,487,212 | ||||||
|
Temenos Group AG, Registered Shares(a) |
12,752 | 2,135,323 | ||||||
|
UBS Group AG, Registered Shares(a) |
234,771 | 2,665,694 | ||||||
|
Vifor Pharma AG |
479 | 76,558 | ||||||
|
|
|
|||||||
| 85,803,206 | ||||||||
| United Kingdom — 14.0% | ||||||||
|
Ashmore Group PLC |
76,332 | 474,904 | ||||||
|
Ashtead Group PLC |
84,154 | 2,340,269 | ||||||
|
AstraZeneca PLC |
72,973 | 6,515,660 | ||||||
|
Auto Trader Group PLC(c) |
314,242 | 1,969,553 | ||||||
|
Aviva PLC |
176,376 | 865,858 | ||||||
|
Barclays PLC |
130,302 | 240,080 | ||||||
|
Barratt Developments PLC |
87,653 | 697,771 | ||||||
|
Bellway Plc |
1,126 | 46,290 | ||||||
|
boohoo Group PLC(a) |
90,582 | 295,122 | ||||||
|
BP PLC |
960,442 | 6,080,300 | ||||||
|
British American Tobacco PLC |
167,196 | 6,174,560 | ||||||
|
British Land Co. PLC |
89,836 | 646,259 | ||||||
|
Bunzl PLC |
41,867 | 1,094,374 | ||||||
|
Centrica PLC |
710,118 | 643,924 | ||||||
|
CK Hutchison Holdings Ltd. |
419,000 | 3,698,987 | ||||||
|
Close Brothers Group PLC |
15 | 260 | ||||||
|
Compass Group PLC |
264,820 | 6,814,505 | ||||||
|
Dechra Pharmaceuticals PLC |
2,553 | 86,903 | ||||||
|
Diageo PLC |
288,836 | 11,798,983 | ||||||
|
Dialog Semiconductor PLC(a) |
14,108 | 668,169 | ||||||
|
Direct Line Insurance Group PLC |
169,876 | 626,756 | ||||||
|
Electrocomponents PLC |
84,553 | 668,453 | ||||||
|
Experian PLC |
56,759 | 1,815,094 | ||||||
|
Fiat Chrysler Automobiles NV |
46,607 | 603,927 | ||||||
|
GlaxoSmithKline PLC |
508,548 | 10,900,472 | ||||||
|
Greggs PLC |
27,582 | 709,099 | ||||||
|
Halma PLC |
15,346 | 371,455 | ||||||
|
Hays PLC |
140,901 | 261,211 | ||||||
|
HomeServe PLC |
8,075 | 117,753 | ||||||
|
HSBC Holdings PLC |
1,390,864 | 10,657,106 | ||||||
|
IG Group Holdings PLC |
133,753 | 991,007 | ||||||
|
Imperial Brands PLC |
40,160 | 901,836 | ||||||
|
Inchcape PLC |
25,560 | 198,417 | ||||||
|
Intertek Group PLC |
60,084 | 4,044,368 | ||||||
|
ITV PLC |
138,787 | 214,968 | ||||||
|
JD Sports Fashion PLC |
71,014 | 655,444 | ||||||
|
John Wood Group PLC |
35,048 | 163,397 | ||||||
|
Jupiter Fund Management PLC |
37,580 | 164,265 | ||||||
|
Land Securities Group PLC |
8,597 | 90,544 | ||||||
|
Legal & General Group PLC |
1,154,141 | 3,522,792 | ||||||
|
Lloyds Banking Group PLC |
3,802,615 | 2,520,818 | ||||||
|
Man Group PLC |
307,124 | 659,367 | ||||||
|
Moneysupermarket.com Group PLC |
174,575 | 811,862 | ||||||
|
National Grid PLC |
318,369 | 3,447,061 | ||||||
|
Next Plc |
1,458 | 110,830 | ||||||
|
Pearson PLC |
54,183 | 491,339 | ||||||
|
Persimmon PLC |
5,753 | 153,433 | ||||||
|
Petrofac Ltd. |
39,156 | 192,259 | ||||||
|
Prudential PLC |
33,290 | 603,253 | ||||||
| Security | Shares | Value | ||||||
| United Kingdom (continued) | ||||||||
|
Reckitt Benckiser Group PLC |
23,300 | $ | 1,819,241 | |||||
|
RELX PLC |
99,872 | 2,371,920 | ||||||
|
Rentokil Initial PLC |
250,703 | 1,441,394 | ||||||
|
Rightmove PLC |
441,726 | 2,988,806 | ||||||
|
Rolls-Royce Holdings PLC(a) |
34,072 | 331,071 | ||||||
|
Rotork PLC |
20,798 | 79,552 | ||||||
|
Royal Mail PLC |
306,469 | 795,726 | ||||||
|
Schroders PLC |
3,162 | 119,519 | ||||||
|
Severn Trent PLC |
49,728 | 1,323,618 | ||||||
|
Smiths Group PLC |
2,337 | 45,094 | ||||||
|
Spirax-Sarco Engineering PLC |
2,571 | 247,698 | ||||||
|
SSP Group PLC |
59,146 | 450,375 | ||||||
|
Standard Life Aberdeen PLC |
32,074 | 112,647 | ||||||
|
Subsea 7 SA |
73,740 | 758,448 | ||||||
|
Tate & Lyle PLC |
20,208 | 182,823 | ||||||
|
Taylor Wimpey PLC |
55,247 | 109,661 | ||||||
|
Unilever NV |
115,581 | 6,940,364 | ||||||
|
Unilever PLC |
53,249 | 3,200,353 | ||||||
|
Vodafone Group PLC |
1,980,658 | 3,946,056 | ||||||
|
WH Smith PLC |
2,139 | 52,266 | ||||||
|
Wm Morrison Supermarkets PLC |
754,140 | 1,856,854 | ||||||
|
WPP PLC |
16,639 | 208,342 | ||||||
|
|
|
|||||||
| 127,203,145 | ||||||||
| United States — 0.2% | ||||||||
|
Ferguson PLC |
675 | 49,262 | ||||||
|
FirstSun Capital Bancorp (Acquired 03/10/14, cost $1,691,203)(a)(b)(d) |
37,254 | 1,105,326 | ||||||
|
James Hardie Industries PLC — CDI |
9,071 | 152,373 | ||||||
|
Uber Technologies, Inc. (Acquired 05/10/19, cost $326,115)(a)(d) |
21,022 | 633,960 | ||||||
|
|
|
|||||||
| 1,940,921 | ||||||||
|
|
|
|||||||
|
Total Common Stocks — 96.0%
|
|
873,429,208 | ||||||
|
|
|
|||||||
|
Preferred Stocks — 0.6% |
|
|||||||
| Germany — 0.5% | ||||||||
|
Bayerische Motoren Werke AG — Preference Shares |
1,585 | 88,051 | ||||||
|
Sartorius AG |
8,940 | 1,629,860 | ||||||
|
Volkswagen AG, Preference Shares |
15,869 | 2,699,093 | ||||||
|
|
|
|||||||
| 4,417,004 | ||||||||
| United States — 0.1% | ||||||||
|
Palantir Technologies, Inc., Series I (Acquired 02/07/14, cost $942,242)(a)(b)(d) |
153,710 | 936,094 | ||||||
|
|
|
|||||||
|
Total Preferred Stocks — 0.6%
|
|
5,353,098 | ||||||
|
|
|
|||||||
|
Total Long-Term Investments — 96.6%
|
|
878,782,306 | ||||||
|
|
|
|||||||
|
Short-Term Securities — 5.3% |
|
|||||||
|
BlackRock Liquidity Funds, T-Fund, Institutional Class, 1.87%(f)(h) |
48,016,367 | 48,016,367 | ||||||
|
SL Liquidity Series, LLC, Money Market Series, 2.13%(f)(g)(h) |
748,834 | 748,984 | ||||||
|
|
|
|||||||
|
Total Short-Term Securities — 5.3%
|
|
48,765,351 | ||||||
|
|
|
|||||||
|
Total Investments — 101.9%
|
|
927,547,657 | ||||||
|
Liabilities in Excess of Other Assets — (1.9)% |
|
(17,564,057 | ) | |||||
|
|
|
|||||||
|
Net Assets — 100.0% |
$ | 909,983,600 | ||||||
|
|
|
|||||||
| (a) |
Non-income producing security. |
| (b) |
Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
| S C H E D U L E S O F I N V E S T M E N T S | 23 |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Advantage International Fund |
| (c) |
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. |
| (d) |
Restricted security as to resale, excluding 144A securities. The Fund held restricted securities with a current value of $2,949,527, representing 0.3% of its net assets as of period end, and an original cost of $3,763,935. |
| (e) |
Security, or a portion of the security, is on loan. |
| (f) |
Annualized 7-day yield as of period end. |
| (g) |
Security was purchased with the cash collateral from loaned securities. |
| (h) |
During the year ended September 30, 2019, investments in issuers considered to be an affiliate/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
|
Net Activity |
Shares
Held at
|
Value at
09/30/19 |
Income |
Net
Gain (Loss)(a) |
Change in
Unrealized Appreciation (Depreciation) |
|||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
|
BlackRock Liquidity Funds, T-Fund, Institutional Class |
19,233,374 | 28,782,993 | 48,016,367 | $ | 48,016,367 | $ | 272,308 | $ | — | $ | — | |||||||||||||||||
|
SL Liquidity Series, LLC, Money Market Series |
1,253,689 | (504,855 | ) | 748,834 | 748,984 | 178,780 | (b) | 85 | 192 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| $ | 48,765,351 | $ | 451,088 | $ | 85 | $ | 192 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| (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. |
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
|
|
||||||||||||||||||
| Description |
Number
of
|
Expiration Date |
Notional Amount (000) |
Value/
Unrealized
|
||||||||||||||
|
|
||||||||||||||||||
|
Long Contracts |
||||||||||||||||||
|
SPI 200 Index |
23 | 12/19/19 | $ | 2,593 | $ | 3,763 | ||||||||||||
|
Euro STOXX 50 Index |
407 | 12/20/19 | 15,770 | 172,978 | ||||||||||||||
|
FTSE 100 Index |
68 | 12/20/19 | 6,173 | 35,001 | ||||||||||||||
|
Nikkei 225 Index |
99 | 12/20/19 | 10,010 | 398 | ||||||||||||||
|
|
|
|||||||||||||||||
| $ | 212,140 | |||||||||||||||||
|
|
|
|||||||||||||||||
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:
|
|
||||||||||||||||||||||||||||||||||||||||||||||
| Assets — Derivative Financial Instruments |
Commodity Contracts |
Credit
|
Equity
Contracts |
Foreign
|
Interest
|
Other
|
Total |
|
||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||||
|
Futures contracts |
Unrealized appreciation on futures contracts(a) | $ | — | $ | — | $ | 212,140 | $ | — | $ | — | $ | — | $ | 212,140 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
| (a) |
Net cumulative unrealized appreciation (depreciation) on futures contracts, if any, are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
For the year ended September 30, 2019, the effect of derivative financial instruments in the Statements of Operations was as follows:
|
|
||||||||||||||||||||||||||||||||||||||||||||
| Net Realized Gain (Loss) from: |
Commodity
|
Credit
|
Equity
Contracts |
Foreign Currency
|
Interest Rate
|
Other
|
Total | |||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||
|
|
Futures contracts |
$ | — | $ | — | $ | 2,424,726 | $ | — | $ | — | $ | — | $ | 2,424,726 | |||||||||||||||||||||||||||||
|
Forward foreign currency exchange contracts |
— | — | — | 16,470 | — | — | 16,470 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| $ | — | $ | — | $ | 2,424,726 | $ | 16,470 | $ | — | $ | — | $ | 2,441,196 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||
|
Net Change in Unrealized Appreciation (Depreciation) on:
|
|
|||||||||||||||||||||||||||||||||||||||||||
|
Futures contracts |
$ | — | $ | (554,179 | ) | $ | — | $ | — | $ | (554,179 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| 24 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Advantage International Fund |
Average Quarterly Balances of Outstanding Derivative Financial Instruments
|
|
||||
|
Futures contracts: |
||||
|
Average notional value of contracts — long |
$ | 27,372,110 | ||
|
Forward foreign currency exchange contracts: |
||||
|
Average amounts purchased — in USD |
— | (a) | ||
|
Average amounts sold — in USD |
— | (a) | ||
|
|
||||
| (a) |
Derivative not held at any quarter-end. The risk exposure table serves as an indicator of activity during the period. |
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: |
||||||||||||||||
|
Common Stocks: |
||||||||||||||||
|
Australia |
$ | — | $ | 70,641,751 | $ | 1 | $ | 70,641,752 | ||||||||
|
Austria |
599,495 | 2,640,473 | — | 3,239,968 | ||||||||||||
|
Belgium |
— | 9,087,924 | — | 9,087,924 | ||||||||||||
|
China |
— | 3,396,613 | — | 3,396,613 | ||||||||||||
|
Denmark |
— | 16,643,957 | — | 16,643,957 | ||||||||||||
|
Finland |
— | 10,566,951 | — | 10,566,951 | ||||||||||||
|
France |
672,011 | 106,302,039 | — | 106,974,050 | ||||||||||||
|
Germany |
7,835,350 | 61,187,184 | — | 69,022,534 | ||||||||||||
|
Hong Kong |
— | 22,819,529 | — | 22,819,529 | ||||||||||||
|
India |
— | — | 274,147 | 274,147 | ||||||||||||
|
Ireland |
462,615 | 294,713 | — | 757,328 | ||||||||||||
|
Israel |
— | 2,202,448 | — | 2,202,448 | ||||||||||||
|
Italy |
45,944 | 10,097,228 | — | 10,143,172 | ||||||||||||
|
Japan |
— | 217,562,706 | — | 217,562,706 | ||||||||||||
|
Luxembourg |
— | 502,251 | — | 502,251 | ||||||||||||
|
Macau |
— | 961,575 | — | 961,575 | ||||||||||||
|
Netherlands |
— | 42,089,526 | — | 42,089,526 | ||||||||||||
|
New Zealand |
— | 183,477 | — | 183,477 | ||||||||||||
|
Norway |
— | 4,112,540 | — | 4,112,540 | ||||||||||||
|
Portugal |
— | 2,333,723 | — | 2,333,723 | ||||||||||||
|
Singapore |
— | 9,224,181 | — | 9,224,181 | ||||||||||||
|
South Africa |
— | 3,354,824 | — | 3,354,824 | ||||||||||||
|
Spain |
164,531 | 28,959,427 | — | 29,123,958 | ||||||||||||
|
Sweden |
— | 23,262,802 | — | 23,262,802 | ||||||||||||
|
Switzerland |
— | 85,803,206 | — | 85,803,206 | ||||||||||||
|
United Kingdom |
1,108,760 | 126,094,385 | — | 127,203,145 | ||||||||||||
|
United States |
— | 835,595 | 1,105,326 | 1,940,921 | ||||||||||||
|
Preferred Stocks: |
||||||||||||||||
|
Germany |
— | 4,417,004 | — | 4,417,004 | ||||||||||||
|
United States |
— | — | 936,094 | 936,094 | ||||||||||||
|
Short-Term Securities |
48,016,367 | — | — | 48,016,367 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Subtotal |
$ | 58,905,073 | $ | 865,578,032 | $ | 2,315,568 | $ | 926,798,673 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Investments Valued at NAV(a) |
748,984 | |||||||||||||||
|
|
|
|||||||||||||||
|
Total Investments |
$ | 927,547,657 | ||||||||||||||
|
|
|
|||||||||||||||
|
Derivative Financial Instruments(b) |
||||||||||||||||
|
Assets: |
||||||||||||||||
|
Equity contracts |
$ | 212,140 | $ | — | $ | — | $ | 212,140 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (a) |
Certain investments of the Fund were fair valued using net assets value (“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 futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
| S C H E D U L E S O F I N V E S T M E N T S | 25 |
|
Schedule of Investments September 30, 2019 |
BlackRock Health Sciences Opportunities Portfolio (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
|
Common Stocks — 96.9% |
||||||||
| Biotechnology — 14.3% | ||||||||
|
ACADIA Pharmaceuticals, Inc.(a) |
176,800 | $ | 6,363,032 | |||||
|
Acceleron Pharma, Inc.(a)(b) |
789,200 | 31,181,292 | ||||||
|
Acerta Pharma BV, Series B (Acquired 5/6/15, cost $17,141,679)(a)(c)(d) |
297,971,595 | 37,097,464 | ||||||
|
Alexion Pharmaceuticals, Inc.(a) |
143,820 | 14,085,731 | ||||||
|
Allakos, Inc.(a)(b) |
491,272 | 38,628,717 | ||||||
|
Allogene Therapeutics, Inc.(a)(b) |
739,710 | 20,160,796 | ||||||
|
Amgen, Inc. |
1,016,412 | 196,685,886 | ||||||
|
Apellis Pharmaceuticals, Inc.(a)(b) |
422,804 | 10,185,348 | ||||||
|
Arena Pharmaceuticals, Inc.(a) |
505,218 | 23,123,828 | ||||||
|
Atreca, Inc., Class A(a)(b) |
334,723 | 4,097,010 | ||||||
|
Biogen, Inc.(a) |
225,862 | 52,585,191 | ||||||
|
BioMarin Pharmaceutical, Inc.(a) |
961,300 | 64,791,620 | ||||||
|
Blueprint Medicines Corp.(a)(b) |
164,300 | 12,071,121 | ||||||
|
Checkpoint Therapeutics, Inc.(a)(b) |
680,639 | 1,694,791 | ||||||
|
Corbus Pharmaceuticals Holdings,
|
627,000 | 3,053,490 | ||||||
|
Eidos Therapeutics, Inc.(a)(b) |
145,596 | 5,237,088 | ||||||
|
Exact Sciences Corp.(a) |
87,534 | 7,910,448 | ||||||
|
Galapagos NV — ADR(a)(b) |
106,100 | 16,197,226 | ||||||
|
Genfit(a)(b) |
188,900 | 3,288,749 | ||||||
|
Genmab A/S(a) |
218,400 | 44,375,306 | ||||||
|
Genmab A/S — ADR(a)(b) |
669,032 | 13,554,588 | ||||||
|
Gilead Sciences, Inc. |
1,281,456 | 81,218,681 | ||||||
|
Halozyme Therapeutics, Inc.(a)(b) |
471,300 | 7,309,863 | ||||||
|
Incyte Corp.(a)(b) |
444,400 | 32,987,812 | ||||||
|
Mirati Therapeutics, Inc.(a) |
171,250 | 13,342,088 | ||||||
|
Neurocrine Biosciences, Inc.(a)(b) |
620,400 | 55,904,244 | ||||||
|
Principia Biopharma, Inc.(a) |
74,768 | 2,111,448 | ||||||
|
Ra Pharmaceuticals, Inc.(a)(b) |
848,022 | 20,055,720 | ||||||
|
Sarepta Therapeutics, Inc.(a) |
71,125 | 5,357,135 | ||||||
|
Seattle Genetics, Inc.(a)(b) |
431,218 | 36,826,017 | ||||||
|
Syndax Pharmaceuticals, Inc.(a) |
288,521 | 2,155,252 | ||||||
|
Vertex Pharmaceuticals, Inc.(a) |
693,570 | 117,504,629 | ||||||
|
|
|
|||||||
| 981,141,611 | ||||||||
| Health Care Equipment & Supplies — 36.2% | ||||||||
|
Abbott Laboratories |
5,277,600 | 441,576,792 | ||||||
|
Baxter International, Inc. |
1,895,100 | 165,764,397 | ||||||
|
Becton Dickinson and Co. |
639,722 | 161,824,077 | ||||||
|
Boston Scientific Corp.(a) |
6,975,052 | 283,814,866 | ||||||
|
ConvaTec Group PLC(e) |
19,149,900 | 41,243,098 | ||||||
|
Edwards Lifesciences Corp.(a) |
917,200 | 201,701,452 | ||||||
|
Envista Holdings Corp.(a) |
625,393 | 17,435,957 | ||||||
|
Intuitive Surgical, Inc.(a) |
309,100 | 166,892,363 | ||||||
|
Masimo Corp.(a) |
708,300 | 105,387,957 | ||||||
|
Medtronic PLC |
2,365,023 | 256,888,798 | ||||||
|
Nevro Corp.(a)(b) |
241,300 | 20,744,561 | ||||||
|
ResMed, Inc. |
592,800 | 80,093,208 | ||||||
|
SI-BONE, Inc.(a)(b) |
76,637 | 1,354,176 | ||||||
|
Silk Road Medical, Inc.(a)(b) |
159,894 | 5,201,352 | ||||||
|
Stryker Corp. |
1,182,100 | 255,688,230 | ||||||
|
Teleflex, Inc. |
353,900 | 120,237,525 | ||||||
|
Varian Medical Systems, Inc.(a)(b) |
686,100 | 81,707,649 | ||||||
|
Wright Medical Group NV(a)(b) |
1,302,900 | 26,878,827 | ||||||
|
Zimmer Biomet Holdings, Inc. |
395,500 | 54,290,285 | ||||||
|
|
|
|||||||
| 2,488,725,570 | ||||||||
| Health Care Providers & Services — 17.4% | ||||||||
|
Amedisys, Inc.(a)(b) |
294,800 | 38,621,748 | ||||||
|
Anthem, Inc. |
679,300 | 163,099,930 | ||||||
|
Centene Corp.(a) |
1,266,500 | 54,788,790 | ||||||
|
Cigna Corp. |
818,300 | 124,209,757 | ||||||
|
Encompass Health Corp. |
613,600 | 38,828,608 | ||||||
|
Guardant Health, Inc.(a) |
89,802 | 5,732,062 | ||||||
|
HCA Healthcare, Inc. |
667,148 | 80,337,962 | ||||||
|
Humana, Inc. |
529,900 | 135,479,533 | ||||||
|
LHC Group, Inc.(a)(b) |
298,100 | 33,852,236 | ||||||
|
Quest Diagnostics, Inc. |
209,500 | 22,422,785 | ||||||
| Security | Shares | Value | ||||||
| Health Care Providers & Services (continued) | ||||||||
|
UnitedHealth Group, Inc. |
2,295,653 | $ | 498,891,310 | |||||
|
|
|
|||||||
| 1,196,264,721 | ||||||||
| Health Care Technology — 1.1% | ||||||||
|
Cerner Corp. |
501,400 | 34,180,438 | ||||||
|
Teladoc Health, Inc.(a)(b) |
629,000 | 42,595,880 | ||||||
|
|
|
|||||||
| 76,776,318 | ||||||||
| Life Sciences Tools & Services — 8.5% | ||||||||
|
10X Genomics, Inc., Class A(a) |
82,086 | 4,137,134 | ||||||
|
Agilent Technologies, Inc. |
470,600 | 36,062,078 | ||||||
|
Avantor, Inc.(a)(b) |
2,349,980 | 34,544,706 | ||||||
|
Charles River Laboratories International, Inc.(a) |
176,400 | 23,350,068 | ||||||
|
Illumina, Inc.(a) |
238,400 | 72,526,048 | ||||||
|
IQVIA Holdings, Inc.(a)(b) |
431,200 | 64,412,656 | ||||||
|
QIAGEN NV(a) |
894,500 | 29,491,665 | ||||||
|
Thermo Fisher Scientific, Inc. |
905,800 | 263,832,366 | ||||||
|
WuXi AppTec Co. Ltd., H Shares(b)(e) |
2,948,740 | 32,208,739 | ||||||
|
Wuxi Biologics Cayman, Inc.(a)(e) |
2,266,000 | 23,106,181 | ||||||
|
|
|
|||||||
| 583,671,641 | ||||||||
| Pharmaceuticals — 19.4% | ||||||||
|
AstraZeneca PLC |
1,381,827 | 123,381,456 | ||||||
|
AstraZeneca PLC — ADR |
727,000 | 32,402,390 | ||||||
|
Bristol-Myers Squibb Co. |
2,839,126 | 143,972,079 | ||||||
|
Daiichi Sankyo Co. Ltd. |
219,200 | 13,851,116 | ||||||
|
Eli Lilly & Co. |
1,165,300 | 130,315,499 | ||||||
|
GlaxoSmithKline PLC |
3,647,200 | 78,175,908 | ||||||
|
Hansoh Pharmaceutical Group Co., Ltd.(a)(e) |
14,102,000 | 43,316,257 | ||||||
|
Hua Medicine(a)(b)(e) |
13,190,870 | 11,814,679 | ||||||
|
Merck & Co., Inc. |
2,707,111 | 227,884,604 | ||||||
|
Merck KGaA |
328,460 | 37,001,060 | ||||||
|
MyoKardia, Inc.(a)(b) |
131,154 | 6,839,681 | ||||||
|
Novo Nordisk A/S — ADR(b) |
693,300 | 35,843,610 | ||||||
|
Pfizer, Inc. |
2,986,137 | 107,291,902 | ||||||
|
Reata Pharmaceuticals, Inc., Class A(a)(b) |
101,554 | 8,153,771 | ||||||
|
Roche Holding AG |
123,900 | 36,075,308 | ||||||
|
Sanofi |
617,200 | 57,173,167 | ||||||
|
Sanofi — ADR |
781,200 | 36,192,996 | ||||||
|
Theravance Biopharma, Inc.(a)(b) |
85,900 | 1,673,332 | ||||||
|
Tricida, Inc.(a)(b) |
223,030 | 6,884,936 | ||||||
|
Urovant Sciences Ltd.(a) |
123,464 | 1,169,204 | ||||||
|
Zoetis, Inc. |
1,515,600 | 188,828,604 | ||||||
|
|
|
|||||||
| 1,328,241,559 | ||||||||
|
|
|
|||||||
|
Total Common Stocks — 96.9%
|
|
6,654,821,420 | ||||||
|
|
|
|||||||
|
Beneficial
Interest |
||||||||
|
Other Interests — 0.0% |
||||||||
| Biotechnology — 0.0% | ||||||||
|
Afferent Pharmaceuticals, Inc., Series C(a)(c) |
3,420,640 | 2,291,829 | ||||||
|
|
|
|||||||
|
Total Other Interests — 0.0%
|
2,291,829 | |||||||
|
|
|
|||||||
|
Total Long-Term Investments — 96.9%
|
|
6,657,113,249 | ||||||
|
|
|
|||||||
| 26 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Health Sciences Opportunities Portfolio |
| Security | Shares | Value | ||||||
|
Short-Term Securities — 5.6% |
|
|||||||
|
BlackRock Liquidity Funds, T-Fund, Institutional Class, 1.87%(f)(h) |
227,834,577 | $ | 227,834,577 | |||||
|
SL Liquidity Series, LLC, Money Market Series, 2.13%(f)(g)(h) |
159,577,658 | 159,609,574 | ||||||
|
|
|
|||||||
|
Total Short-Term Investments — 5.6%
|
|
387,444,151 | ||||||
|
|
|
|||||||
| Security | Value | |||||
|
Total Investments — 102.5%
|
$ | 7,044,557,400 | ||||
|
|
|
|||||
|
Liabilities in Excess of Other Assets — (2.5)% |
(173,594,007 | ) | ||||
|
|
|
|||||
|
Net Assets — 100.0% |
$ | 6,870,963,393 | ||||
|
|
|
|||||
| (a) |
Non-income producing security. |
| (b) |
Security, or a portion of the security, is on loan. |
| (c) |
Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
| (d) |
Restricted security as to resale, excluding 144A securities. The Fund held restricted securities with a current value of $37,097,464 representing 0.5% of its net assets as of period end, and an original cost of $17,141,679. |
| (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) |
Annualized 7-day yield as of period end. |
| (g) |
Security was purchased with the cash collateral from loaned securities. |
| (h) |
During the year ended September 30, 2019, investments in issuers considered to be an affiliate/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
|
Net Activity |
Shares
Held at
|
Value at
09/30/19 |
Income |
Net Realized Gain (Loss)(a) |
Change in
Unrealized Appreciation (Depreciation) |
|||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
|
BlackRock Liquidity Funds, T-Fund, Institutional Class |
94,011,095 | 133,823,482 | 227,834,577 | $ | 227,834,577 | $ | 5,987,110 | $ | — | $ | — | |||||||||||||||||
|
SL Liquidity Series, LLC, Money Market Series |
243,252,303 | (83,674,645 | ) | 159,577,658 | 159,609,574 | 2,782,805 | (b) | 24,337 | 7,526 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| $ | 387,444,151 | $ | 8,769,915 | $ | 24,337 | $ | 7,526 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| (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
Forward Foreign Currency Exchange Contracts
|
|
||||||||||||||||||||||||||
|
Currency Purchased |
Currency
Sold |
Counterparty |
Settlement Date |
Unrealized Appreciation (Depreciation) |
||||||||||||||||||||||
|
|
||||||||||||||||||||||||||
| USD | 18,541,701 | CHF | 18,265,443 | JPMorgan Chase Bank N.A. | 10/10/19 | $ | 223,875 | |||||||||||||||||||
| USD | 51,470,564 | DKK | 340,005,176 | Citibank N.A. | 10/10/19 | 1,792,650 | ||||||||||||||||||||
| USD | 5,177,699 | DKK | 34,914,189 | State Street Bank and Trust Co. | 10/10/19 | 76,412 | ||||||||||||||||||||
| USD | 7,310,800 | DKK | 48,350,783 | UBS AG | 10/10/19 | 246,302 | ||||||||||||||||||||
| USD | 70,226,549 | EUR | 62,198,193 | Deutsche Bank AG | 10/10/19 | 2,379,236 | ||||||||||||||||||||
| USD | 124,598,859 | GBP | 99,537,982 | Citibank N.A. | 10/10/19 | 2,159,650 | ||||||||||||||||||||
| USD | 3,840,887 | JPY | 405,349,631 | State Street Bank and Trust Co. | 10/10/19 | 89,311 | ||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||
| 6,967,436 | ||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||
| CHF | 5,600,192 | USD | 5,733,502 | Northern Trust Corp. | 10/10/19 | (117,249 | ) | |||||||||||||||||||
| CHF | 12,665,251 | USD | 12,964,007 | Toronto-Dominion Bank | 10/10/19 | (262,433 | ) | |||||||||||||||||||
| DKK | 107,673,760 | USD | 16,372,938 | UBS AG | 10/10/19 | (640,802 | ) | |||||||||||||||||||
| GBP | 990,000 | USD | 1,224,278 | Commonwealth Bank Of Australia | 10/10/19 | (6,503 | ) | |||||||||||||||||||
| GBP | 56,752,260 | USD | 70,959,280 | UBS AG | 10/10/19 | (1,149,728 | ) | |||||||||||||||||||
| JPY | 157,842,738 | USD | 1,487,400 | Goldman Sachs International | 10/10/19 | (26,540 | ) | |||||||||||||||||||
| JPY | 381,636,663 | USD | 3,593,325 | UBS AG | 10/10/19 | (61,216 | ) | |||||||||||||||||||
| JPY | 309,079,422 | USD | 2,913,381 | UBS AG | 10/10/19 | (52,801 | ) | |||||||||||||||||||
| JPY | 241,726,528 | USD | 2,285,361 | UBS AG | 10/10/19 | (48,143 | ) | |||||||||||||||||||
| JPY | 167,955,386 | USD | 1,593,004 | UBS AG | 10/10/19 | (38,550 | ) | |||||||||||||||||||
| USD | 14,078,439 | GBP | 11,648,381 | HSBC Bank PLC | 10/10/19 | (249,946 | ) | |||||||||||||||||||
| S C H E D U L E S O F I N V E S T M E N T S | 27 |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Health Sciences Opportunities 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:
For the year ended September 30, 2019, the effect of derivative financial instruments in the Statements of Operations was as follows:
Average Quarterly Balances of Outstanding Derivative Financial Instruments
|
|
||||
|
Forward foreign currency exchange contracts: |
||||
|
Average amounts purchased — in USD |
$ | 227,076,116 | ||
|
Average amounts sold — in USD |
861,056,418 | |||
|
Options: |
||||
|
Average value of option contracts written |
— | (a) | ||
|
|
||||
| (a) |
Derivative not held at any quarter-end. The risk exposure table serves as an indicator of activity during the period. |
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: |
||||||||||||
|
Forward foreign currency exchange contracts |
$ | 6,967,436 | $ | 2,656,732 | ||||||||
|
|
|
|
|
|||||||||
|
Total derivative assets and liabilities in the Statements of Assets and Liabilities |
6,967,436 | 2,656,732 | ||||||||||
|
|
|
|
|
|||||||||
|
Total derivative assets and liabilities subject to a Master Netting Agreement (“MNA”) |
$ | 6,967,436 | $ | 2,656,732 | ||||||||
|
|
|
|
|
|||||||||
| 28 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Health Sciences Opportunities 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)(c) |
|||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
|
Citibank N.A. |
$ | 3,952,300 | $ | — | $— | $— | $ | 3,952,300 | ||||||||||||||||||||||||||||
|
Deutsche Bank AG |
2,379,236 | — | — | — | 2,379,236 | |||||||||||||||||||||||||||||||
|
JPMorgan Chase Bank N.A. |
223,875 | (2,821 | ) | — | — | 221,054 | ||||||||||||||||||||||||||||||
|
State Street Bank and Trust Co. |
165,723 | — | — | — | 165,723 | |||||||||||||||||||||||||||||||
|
UBS AG |
246,302 | (246,302 | ) | — | — | — | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| $ | 6,967,436 | $ | (249,123 | ) | $— | $— | $ | 6,718,313 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| 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)(d) |
|||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
|
Commonwealth Bank of Australia |
$ | 6,503 | $ | — | $— | $— | $ | 6,503 | ||||||||||||||||||||||||||||
|
Goldman Sachs International |
26,540 | — | — | — | 26,540 | |||||||||||||||||||||||||||||||
|
HSBC Bank PLC |
249,946 | — | — | — | 249,946 | |||||||||||||||||||||||||||||||
|
JPMorgan Chase Bank N.A. |
2,821 | (2,821 | ) | — | — | — | ||||||||||||||||||||||||||||||
|
Northern Trust Corp. |
117,249 | — | — | — | 117,249 | |||||||||||||||||||||||||||||||
|
Toronto-Dominion Bank |
262,433 | — | — | — | 262,433 | |||||||||||||||||||||||||||||||
|
UBS AG |
1,991,240 | (246,302 | ) | — | — | 1,744,938 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| $ | 2,656,732 | $ | (249,123 | ) | $— | $— | $ | 2,407,609 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| (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 may also include forward foreign currency exchange contracts that are not required to be collateralized. |
| (d) |
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: |
||||||||||||||||
|
Biotechnology |
$ | 899,668,841 | $ | 44,375,306 | $ | 37,097,464 | $ | 981,141,611 | ||||||||
|
Health Care Equipment & Supplies |
2,447,482,472 | 41,243,098 | — | 2,488,725,570 | ||||||||||||
|
Health Care Providers & Services |
1,196,264,721 | — | — | 1,196,264,721 | ||||||||||||
|
Health Care Technology |
76,776,318 | — | — | 76,776,318 | ||||||||||||
|
Life Sciences Tools & Services |
528,356,721 | 55,314,920 | — | 583,671,641 | ||||||||||||
|
Pharmaceuticals |
939,267,287 | 388,974,272 | — | 1,328,241,559 | ||||||||||||
|
Other Interests: |
||||||||||||||||
|
Biotechnology |
— | — | 2,291,829 | 2,291,829 | ||||||||||||
|
Short-Term Securities |
227,834,577 | — | — | 227,834,577 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Subtotal |
$ | 6,315,650,937 | $ | 529,907,596 | $ | 39,389,293 | $ | 6,884,947,826 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Investments Valued at NAV(a) |
159,609,574 | |||||||||||||||
|
|
|
|||||||||||||||
|
Total Investments |
$ | 7,044,557,400 | ||||||||||||||
|
|
|
|||||||||||||||
| (a) |
Certain investments of the Fund were fair valued using net asset value (“NAV”) per share as no quoted market value is available and therefore have been excluded from the fair value hierarchy. |
| S C H E D U L E S O F I N V E S T M E N T S | 29 |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Health Sciences Opportunities Portfolio |
|
|
||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
|
|
||||||||||||||||
|
Derivative Financial Instruments(a) |
||||||||||||||||
|
Assets: |
||||||||||||||||
|
Foreign currency exchange contracts |
$ | — | $ | 6,967,436 | $ | — | $ | 6,967,436 | ||||||||
|
Liabilities: |
||||||||||||||||
|
Foreign currency exchange contracts |
— | (2,656,732 | ) | — | (2,656,732 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | — | $ | 4,310,704 | $ | — | $ | 4,310,704 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (a) |
Derivative financial instruments are forward foreign currency exchange contracts. Forward foreign currency exchange contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
| 30 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Schedule of Investments September 30, 2019 |
BlackRock High Equity Income Fund (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
|
Common Stocks — 80.2% |
||||||||
| Aerospace & Defense — 2.4% | ||||||||
|
BAE Systems PLC |
917,031 | $ | 6,422,200 | |||||
|
Lockheed Martin Corp. |
8,446 | 3,294,447 | ||||||
|
|
|
|||||||
| 9,716,647 | ||||||||
| Automobiles — 2.0% | ||||||||
|
Ford Motor Co. |
305,996 | 2,802,923 | ||||||
|
General Motors Co. |
149,316 | 5,596,364 | ||||||
|
|
|
|||||||
| 8,399,287 | ||||||||
| Banks — 10.5% | ||||||||
|
Citigroup, Inc. |
140,869 | 9,731,231 | ||||||
|
JPMorgan Chase & Co. |
117,386 | 13,815,158 | ||||||
|
Regions Financial Corp. |
71,786 | 1,135,655 | ||||||
|
Wells Fargo & Co. |
373,583 | 18,843,527 | ||||||
|
|
|
|||||||
| 43,525,571 | ||||||||
| Beverages — 0.4% | ||||||||
|
PepsiCo, Inc. |
12,892 | 1,767,493 | ||||||
|
|
|
|||||||
| Biotechnology — 0.9% | ||||||||
|
Acerta Pharma BV, Series B (Acquired 5/6/15, cost $1,815,300)(a)(b)(c) |
31,555,035 | 3,928,602 | ||||||
|
|
|
|||||||
| Building Products — 0.4% | ||||||||
|
Johnson Controls International PLC |
40,429 | 1,774,429 | ||||||
|
|
|
|||||||
| Capital Markets — 1.4% | ||||||||
|
Morgan Stanley |
71,191 | 3,037,720 | ||||||
|
State Street Corp. |
48,086 | 2,846,210 | ||||||
|
|
|
|||||||
| 5,883,930 | ||||||||
| Chemicals — 1.5% | ||||||||
|
Corteva, Inc. |
36,742 | 1,028,776 | ||||||
|
Dow, Inc. |
65,948 | 3,142,422 | ||||||
|
DuPont de Nemours, Inc. |
29,027 | 2,069,915 | ||||||
|
|
|
|||||||
| 6,241,113 | ||||||||
| Communications Equipment — 0.8% | ||||||||
|
Cisco Systems, Inc. |
66,634 | 3,292,386 | ||||||
|
|
|
|||||||
| Containers & Packaging — 0.6% | ||||||||
|
International Paper Co. |
45,972 | 1,922,549 | ||||||
|
Packaging Corp. of America |
6,431 | 682,329 | ||||||
|
|
|
|||||||
| 2,604,878 | ||||||||
| Diversified Financial Services — 0.5% | ||||||||
|
AXA Equitable Holdings, Inc. |
97,366 | 2,157,631 | ||||||
|
|
|
|||||||
| Diversified Telecommunication Services — 6.2% | ||||||||
|
BCE, Inc. |
85,047 | 4,117,125 | ||||||
|
Verizon Communications, Inc. |
353,320 | 21,326,395 | ||||||
|
|
|
|||||||
| 25,443,520 | ||||||||
| Electric Utilities — 3.6% | ||||||||
|
Edison International |
37,389 | 2,819,878 | ||||||
|
FirstEnergy Corp. |
246,388 | 11,883,293 | ||||||
|
|
|
|||||||
| 14,703,171 | ||||||||
| Energy Equipment & Services — 0.9% | ||||||||
|
Baker Hughes a GE Co. |
156,401 | 3,628,503 | ||||||
|
|
|
|||||||
| Food Products — 2.1% | ||||||||
|
Conagra Brands, Inc. |
79,489 | 2,438,723 | ||||||
|
Kellogg Co. |
32,230 | 2,074,001 | ||||||
|
Kraft Heinz Co. |
68,171 | 1,904,357 | ||||||
|
Nestle SA, Registered Shares |
19,449 | 2,109,332 | ||||||
|
|
|
|||||||
| 8,526,413 | ||||||||
| Health Care Equipment & Supplies — 2.8% | ||||||||
|
Alcon, Inc.(a) |
38,281 | 2,232,926 | ||||||
| Security | Shares | Value | ||||||
| Health Care Equipment & Supplies (continued) | ||||||||
|
Koninklijke Philips NV |
75,993 | $ | 3,511,578 | |||||
|
Medtronic PLC |
52,795 | 5,734,593 | ||||||
|
|
|
|||||||
| 11,479,097 | ||||||||
| Health Care Providers & Services — 3.6% | ||||||||
|
Anthem, Inc. |
19,231 | 4,617,363 | ||||||
|
Cardinal Health, Inc. |
49,927 | 2,356,055 | ||||||
|
CVS Health Corp. |
94,094 | 5,934,509 | ||||||
|
Quest Diagnostics, Inc. |
17,745 | 1,899,247 | ||||||
|
|
|
|||||||
| 14,807,174 | ||||||||
| Household Durables — 1.4% | ||||||||
|
Newell Brands, Inc. |
312,795 | 5,855,522 | ||||||
|
|
|
|||||||
| Household Products — 0.8% | ||||||||
|
Procter & Gamble Co. |
25,419 | 3,161,615 | ||||||
|
|
|
|||||||
| Industrial Conglomerates — 1.3% | ||||||||
|
3M Co. |
8,192 | 1,346,765 | ||||||
|
Siemens AG, Registered Shares |
38,104 | 4,078,863 | ||||||
|
|
|
|||||||
| 5,425,628 | ||||||||
| Insurance — 7.5% | ||||||||
|
American International Group, Inc. |
120,295 | 6,700,432 | ||||||
|
Arthur J. Gallagher & Co. |
25,375 | 2,272,839 | ||||||
|
MetLife, Inc. |
212,941 | 10,042,298 | ||||||
|
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen, Registered Shares |
5,186 | 1,339,538 | ||||||
|
Prudential Financial, Inc. |
61,951 | 5,572,492 | ||||||
|
Swiss Re AG |
23,323 | 2,433,610 | ||||||
|
Travelers Cos., Inc. |
16,283 | 2,421,119 | ||||||
|
|
|
|||||||
| 30,782,328 | ||||||||
| IT Services — 0.5% | ||||||||
|
Cognizant Technology Solutions Corp., Class A |
32,457 | 1,956,021 | ||||||
|
|
|
|||||||
| Multi-Utilities — 0.6% | ||||||||
|
Engie SA |
156,378 | 2,552,437 | ||||||
|
|
|
|||||||
| Oil, Gas & Consumable Fuels — 10.4% | ||||||||
|
BP PLC |
2,407,474 | 15,241,071 | ||||||
|
ConocoPhillips |
29,154 | 1,661,195 | ||||||
|
Marathon Petroleum Corp. |
141,282 | 8,582,882 | ||||||
|
ONEOK, Inc. |
48,879 | 3,601,894 | ||||||
|
TOTAL SA — ADR |
94,780 | 4,928,560 | ||||||
|
Williams Cos., Inc. |
365,040 | 8,782,862 | ||||||
|
|
|
|||||||
| 42,798,464 | ||||||||
| Personal Products — 0.4% | ||||||||
|
Unilever NV, NY Shares |
28,401 | 1,704,912 | ||||||
|
|
|
|||||||
| Pharmaceuticals — 6.3% | ||||||||
|
AstraZeneca PLC |
66,125 | 5,904,211 | ||||||
|
Bayer AG, Registered Shares |
106,130 | 7,477,212 | ||||||
|
Bristol-Myers Squibb Co. |
87,937 | 4,459,285 | ||||||
|
Pfizer, Inc. |
230,249 | 8,272,847 | ||||||
|
|
|
|||||||
| 26,113,555 | ||||||||
| Road & Rail — 0.7% | ||||||||
|
Uber Technologies, Inc. (Acquired 05/10/19, cost $1,446,483)(a)(b) |
93,243 | 2,811,929 | ||||||
|
|
|
|||||||
| Semiconductors & Semiconductor Equipment — 2.0% | ||||||||
|
NXP Semiconductors NV |
34,752 | 3,792,138 | ||||||
|
QUALCOMM, Inc. |
57,999 | 4,424,164 | ||||||
|
|
|
|||||||
| 8,216,302 | ||||||||
| Specialty Retail — 0.5% | ||||||||
|
Lowe’s Cos., Inc. |
20,659 | 2,271,664 | ||||||
|
|
|
|||||||
| S C H E D U L E S O F I N V E S T M E N T S | 31 |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock High Equity Income Fund (Percentages shown are based on Net Assets) |
|
Security |
Shares | Value | ||||||||||
| Technology Hardware, Storage & Peripherals — 2.3% | ||||||||||||
|
NetApp, Inc. |
41,165 | $ | 2,161,574 | |||||||||
|
Samsung Electronics Co. Ltd. — GDR |
7,091 | 7,224,885 | ||||||||||
|
|
|
|||||||||||
| 9,386,459 | ||||||||||||
| Thrifts & Mortgage Finance — 1.2% | ||||||||||||
|
FirstSun Capital Bancorp (Acquired 03/10/14,
|
167,410 | 4,967,055 | ||||||||||
|
|
|
|||||||||||
| Tobacco — 2.3% | ||||||||||||
|
Altria Group, Inc. |
83,207 | 3,403,166 | ||||||||||
|
Imperial Brands PLC |
216,163 | 4,854,171 | ||||||||||
|
Philip Morris International, Inc. |
16,397 | 1,245,024 | ||||||||||
|
|
|
|||||||||||
| 9,502,361 | ||||||||||||
| Wireless Telecommunication Services — 1.4% | ||||||||||||
|
China Mobile Ltd. — ADR |
139,190 | 5,762,466 | ||||||||||
|
|
|
|||||||||||
|
Total Common Stocks — 80.2%
|
331,148,563 | |||||||||||
|
|
|
|||||||||||
|
Preferred Stocks — 1.1% |
||||||||||||
| Software — 1.1% | ||||||||||||
|
Palantir Technologies, Inc., Series I (Acquired 02/07/14,
|
||||||||||||
|
(Cost — $4,300,011) — 0.0% |
701,470 | 4,271,952 | ||||||||||
|
|
|
|||||||||||
|
Par (000) |
||||||||||||
|
Equity-Linked Notes — 18.3% |
||||||||||||
| Aerospace & Defense — 0.5% | ||||||||||||
|
RBC Capital Markets LLC (Lockheed Martin Corp.) 11.34% 11/06/19 |
USD | 6 | 2,191,711 | |||||||||
|
|
|
|||||||||||
| Automobiles — 0.7% | ||||||||||||
|
BOFA Securities, Inc. (Ford Motor Co.) 27.57% 11/06/19 |
104 | 937,668 | ||||||||||
|
BOFA Securities, Inc. (General Motors Co.) 18.12% 10/11/19 |
51 | 1,903,139 | ||||||||||
|
|
|
|||||||||||
| 2,840,807 | ||||||||||||
| Banks — 1.3% | ||||||||||||
|
SG Americas Securities LLC (Regions Financial Corp.) 23.31% 10/11/19 |
49 | 726,647 | ||||||||||
|
TD Securities, Inc. (JPMorgan Chase & Co.) 14.03% 10/03/19 |
40 | 4,458,698 | ||||||||||
|
|
|
|||||||||||
| 5,185,345 | ||||||||||||
| Beverages — 0.3% | ||||||||||||
|
RBC Capital Markets LLC (PepsiCo, Inc.) 10.79% 11/06/19 |
9 | 1,187,789 | ||||||||||
|
|
|
|||||||||||
| Building Products — 0.1% | ||||||||||||
|
JP Morgan Securities LLC (Johnson Controls International PLC) 15.35% 10/17/19 |
14 | 601,664 | ||||||||||
|
|
|
|||||||||||
| Capital Markets — 0.5% | ||||||||||||
|
JP Morgan Securities LLC (State Street Corp.) 24.8% 10/17/19 |
17 | 886,987 | ||||||||||
|
TD Securities, Inc. (Morgan Stanley) 22.02% 11/14/19(c) |
24 | 1,020,530 | ||||||||||
|
|
|
|||||||||||
| 1,907,517 | ||||||||||||
| Chemicals — 0.3% | ||||||||||||
|
TD Securities, Inc. (Dow, Inc.) 20.22% 11/14/19(c) |
22 | 1,055,388 | ||||||||||
|
|
|
|||||||||||
| Communications Equipment — 0.5% | ||||||||||||
|
BNP Paribas Securities Corporation (Cisco Systems, Inc.) 16.81% 10/03/19 |
46 | 2,258,769 | ||||||||||
|
|
|
|||||||||||
| Security |
Par (000) |
Value | ||||||||||
| Containers & Packaging — 0.4% | ||||||||||||
|
BOFA Securities, Inc. (Packaging Corp. of America) 25.9% 10/11/19 |
USD | 2 | $ | 212,642 | ||||||||
|
SG Americas Securities LLC (International Paper Co.) 17.74% 10/03/19 |
32 | 1,318,979 | ||||||||||
|
|
|
|||||||||||
| 1,531,621 | ||||||||||||
| Diversified Telecommunication Services — 1.7% | ||||||||||||
|
BOFA Securities, Inc. (BCE, Inc.) 7.98% 11/06/19 |
58 | 2,784,815 | ||||||||||
|
RBC Capital Markets LLC (Verizon Communications, Inc.) 17.68% 11/06/19 |
68 | 4,092,467 | ||||||||||
|
|
|
|||||||||||
| 6,877,282 | ||||||||||||
| Electric Utilities — 1.1% | ||||||||||||
|
BNP Paribas Securities Corporation (Edison International) 17.91% 10/03/19 |
|
13 | 965,829 | |||||||||
|
BNP Paribas Securities Corporation (FirstEnergy Corp.) 18.02% 10/03/19 |
85 | 3,777,535 | ||||||||||
|
|
|
|||||||||||
| 4,743,364 | ||||||||||||
| Energy Equipment & Services — 0.3% | ||||||||||||
|
BMO Capital Markets Corp. (Baker Hughes a GE Co.) 19.85% 10/17/19 |
54 | 1,232,493 | ||||||||||
|
|
|
|||||||||||
| Food Products — 0.5% | ||||||||||||
|
Bank of Montreal (Kraft Heinz Co.) 25.04% 10/25/19 |
23 | 647,220 | ||||||||||
|
BNP Paribas Arbitrage (Nestle SA) 7.73% 10/25/19 |
CHF | 7 | 704,773 | |||||||||
|
CIBC World Markets Corp. (Conagra Brands, Inc.) 24.70% 11/06/19 |
USD | 27 | 822,175 | |||||||||
|
|
|
|||||||||||
| 2,174,168 | ||||||||||||
| Health Care Equipment & Supplies — 0.7% | ||||||||||||
|
BNP Paribas Arbitrage (Koninklijke Philips NV) 12.03% 10/25/19 |
EUR | 26 | 1,183,975 | |||||||||
|
TD Securities, Inc. (Medtronic PLC) 21.39% 11/14/19(c) |
USD | 18 | 1,921,688 | |||||||||
|
|
|
|||||||||||
| 3,105,663 | ||||||||||||
| Health Care Providers & Services — 0.1% | ||||||||||||
|
BNP Paribas Securities Corporation (Quest Diagnostics, Inc.) 17.91% 10/03/19 |
6 | 628,713 | ||||||||||
|
|
|
|||||||||||
| Household Products — 0.5% | ||||||||||||
|
Royal Bank of Canada (Procter & Gamble Co.) 12.17% 10/11/19 |
17 | 2,147,260 | ||||||||||
|
|
|
|||||||||||
| Industrial Conglomerates — 0.6% | ||||||||||||
|
BNP Paribas Securities Corporation (3M Co.) 18.21% 10/03/19 |
6 | 921,142 | ||||||||||
|
Credit Suisse Securities (USA) LLC (Siemens AG) 10.95% 10/25/19 |
EUR | 13 | 1,372,414 | |||||||||
|
|
|
|||||||||||
| 2,293,556 | ||||||||||||
| Insurance — 3.2% | ||||||||||||
|
BNP Paribas Arbitrage (Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen) 6.36% 10/25/19 |
4 | 914,658 | ||||||||||
|
BOFA Securities, Inc. (American International Group, Inc.) 17.37% 10/17/19 |
USD | 41 | 2,277,335 | |||||||||
|
JP Morgan Securities LLC (Swiss Re AG) 6.91% 10/25/19 |
CHF | 16 | 1,643,161 | |||||||||
|
RBC Capital Markets LLC (Arthur J. Gallagher & Co.) 13.11% 11/06/19 |
USD | 17 | 1,540,786 | |||||||||
|
Royal Bank of Canada (Travelers Cos., Inc.) 14.44% 10/11/19 |
11 | 1,651,399 | ||||||||||
| 32 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock High Equity Income Fund (Percentages shown are based on Net Assets) |
| Security |
Par (000) |
Value | ||||||||||
| Insurance (continued) | ||||||||||||
|
TD Securities, Inc. (MetLife, Inc.) 16.24% 10/03/19 |
USD | 73 | $ | 3,446,842 | ||||||||
|
TD Securities, Inc. (Prudential Financial, Inc.) 20.72% 11/14/19(c) |
21 | 1,867,216 | ||||||||||
|
|
|
|||||||||||
| 13,341,397 | ||||||||||||
| Multi-Utilities — 0.4% | ||||||||||||
|
BNP Paribas Arbitrage (Engie SA) 11.25% 10/25/19 |
EUR | 106 | 1,621,802 | |||||||||
|
|
|
|||||||||||
| Oil, Gas & Consumable Fuels — 1.7% | ||||||||||||
|
BOFA Securities, Inc. (TOTAL SA) 19.95% 11/06/19 |
USD | 32 | 1,671,591 | |||||||||
|
TD Securities, Inc. (ONEOK, Inc.) 22.12% 11/14/19(c) |
33 | 2,419,795 | ||||||||||
|
TD Securities, Inc. (Williams Cos., Inc.) 18.92% 11/14/19(c) |
123 | 2,971,634 | ||||||||||
|
|
|
|||||||||||
| 7,063,020 | ||||||||||||
| Personal Products — 0.1% | ||||||||||||
|
TD Securities, Inc. (Unilever NV)
|
10 | 566,295 | ||||||||||
|
|
|
|||||||||||
| Pharmaceuticals — 1.2% | ||||||||||||
|
BNP Paribas Arbitrage (AstraZeneca PLC) 12.42% 10/25/19 |
GBP | 22 | 1,956,757 | |||||||||
|
BOFA Securities, Inc. (Pfizer, Inc.) 9.63% 10/11/19 |
USD | 79 | 2,804,931 | |||||||||
|
|
|
|||||||||||
| 4,761,688 | ||||||||||||
| Semiconductors & Semiconductor Equipment — 0.9% | ||||||||||||
|
TD Securities, Inc. (QUALCOMM, Inc.) 23.14% 10/17/19 |
20 | 1,529,654 | ||||||||||
| Security |
Par (000) |
Value | ||||||||||
| Semiconductors & Semiconductor Equipment (continued) | ||||||||||||
|
Wells Fargo Securities LLC (Taiwan Semiconductor Manufacturing Co. Ltd.) 20.0% 10/03/19 |
USD | 49 | $ | 2,162,646 | ||||||||
|
|
|
|||||||||||
| 3,692,300 | ||||||||||||
| Tobacco — 0.3% | ||||||||||||
|
Bank of Montreal (Altria Group, Inc.) 21.18% 11/14/19 |
28 | 1,135,680 | ||||||||||
|
|
|
|||||||||||
| Wireless Telecommunication Services — 0.4% | ||||||||||||
|
BOFA Securities, Inc. (China Mobile Ltd.) 23.67% 10/11/19 |
38 | 1,553,923 | ||||||||||
|
|
|
|||||||||||
|
Total Equity-Linked Notes — 18.3%
|
|
75,699,215 | ||||||||||
|
|
|
|||||||||||
|
Total Long-Term Investments — 99.6%
|
|
411,119,730 | ||||||||||
|
|
|
|||||||||||
| Shares | ||||||||||||
|
Short-Term Securities — 1.8% |
|
|||||||||||
|
BlackRock Liquidity Funds, T-Fund,
|
7,488,275 | 7,488,275 | ||||||||||
|
|
|
|||||||||||
|
Total Short-Term Securities — 1.8%
|
7,488,275 | |||||||||||
|
|
|
|||||||||||
|
Total Investments — 101.4%
|
418,608,005 | |||||||||||
|
|
|
|||||||||||
|
Liabilities in Excess of Other Assets — (1.4)% |
|
(5,584,604 | ) | |||||||||
|
|
|
|||||||||||
|
Net Assets — 100.0% |
$ | 413,023,401 | ||||||||||
|
|
|
|||||||||||
| (a) |
Non-income producing security. |
| (b) |
Restricted security as to resale, excluding 144A securities. The Fund held restricted securities with a current value of $15,979,538, representing 3.9% of its net assets as of period end, and an original cost of $15,161,523. |
| (c) |
Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
| (d) |
Annualized 7-day yield as of period end. |
| (e) |
During the year ended September 30, 2019, investments in issuers considered to be an affiliate/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 09/30/18 |
Net Activity |
Shares Held at 09/30/19 |
Value at 09/30/19 |
Income |
Net Realized Gain (Loss)(a) |
Change in Unrealized Appreciation (Depreciation) |
|||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
|
BlackRock Liquidity Funds, T-Fund, Institutional Class |
11,275,547 | (3,787,272 | ) | 7,488,275 | $ | 7,488,275 | $ | 143,013 | $ | — | $ | — | ||||||||||||||||
|
SL Liquidity Series, LLC, Money Market Series |
— | — | — | — | 5 | (b) | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| $ | 7,488,275 | $ | 143,018 | $ | — | $ | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| (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.
| S C H E D U L E S O F I N V E S T M E N T S | 33 |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock High Equity Income Fund |
Derivative Financial Instruments Categorized by Risk Exposure
For the year ended September 30, 2019, the effect of derivative financial instruments in the Statements of Operations was as follows:
|
|
||||||||||||||||||||||||||||||||||||||||
| Net Realized Gain (Loss) from: |
Commodity
Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency
Exchange Contracts |
Interest Rate Contracts |
Other
Contracts |
Total | |||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||
|
Forward foreign currency exchange contracts |
$— | $— | $— | $ | (313 | ) | $— | $ | — | $ | (313 | ) | ||||||||||||||||||||||||||||
|
Options purchased(a) |
— | — | — | — | — | (660,871 | ) | (660,871 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| $— | $— | $— | $ | (313 | ) | $— | $ | (660,871 | ) | $ | (661,184 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| (a) |
Options purchased are included in net realized gain (loss) from investments. |
Average Quarterly Balances of Outstanding Derivative Financial Instruments
|
|
||||
|
Forward foreign currency exchange contracts: |
||||
|
Average amounts purchased — in USD |
$ | — | (a) | |
|
Options: |
||||
|
Average value of option contracts purchased |
329,794 | |||
|
|
||||
| (a) |
Derivative not held at any quarter-end. The risk exposure table serves as an indicator of activity during the period. |
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. 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: |
||||||||||||||||
|
Aerospace & Defense |
$ | 3,294,447 | $ | 6,422,200 | $ | — | $ | 9,716,647 | ||||||||
|
Automobiles |
8,399,287 | — | — | 8,399,287 | ||||||||||||
|
Banks |
43,525,571 | — | — | 43,525,571 | ||||||||||||
|
Beverages |
1,767,493 | — | — | 1,767,493 | ||||||||||||
|
Biotechnology |
— | — | 3,928,602 | 3,928,602 | ||||||||||||
|
Building Products |
1,774,429 | — | — | 1,774,429 | ||||||||||||
|
Capital Markets |
5,883,930 | — | — | 5,883,930 | ||||||||||||
|
Chemicals |
6,241,113 | — | — | 6,241,113 | ||||||||||||
|
Communications Equipment |
3,292,386 | — | — | 3,292,386 | ||||||||||||
|
Containers & Packaging |
2,604,878 | — | — | 2,604,878 | ||||||||||||
|
Diversified Financial Services |
2,157,631 | — | — | 2,157,631 | ||||||||||||
|
Diversified Telecommunication Services |
25,443,520 | — | — | 25,443,520 | ||||||||||||
|
Electric Utilities |
14,703,171 | — | — | 14,703,171 | ||||||||||||
|
Energy Equipment & Services |
3,628,503 | — | — | 3,628,503 | ||||||||||||
|
Food Products |
6,417,081 | 2,109,332 | — | 8,526,413 | ||||||||||||
|
Health Care Equipment & Supplies |
5,734,593 | 5,744,504 | — | 11,479,097 | ||||||||||||
|
Health Care Providers & Services |
14,807,174 | — | — | 14,807,174 | ||||||||||||
|
Household Durables |
5,855,522 | — | — | 5,855,522 | ||||||||||||
|
Household Products |
3,161,615 | — | — | 3,161,615 | ||||||||||||
|
Industrial Conglomerates |
1,346,765 | 4,078,863 | — | 5,425,628 | ||||||||||||
|
Insurance |
27,009,180 | 3,773,148 | — | 30,782,328 | ||||||||||||
|
IT Services |
1,956,021 | — | — | 1,956,021 | ||||||||||||
|
Multi-Utilities |
— | 2,552,437 | — | 2,552,437 | ||||||||||||
|
Oil, Gas & Consumable Fuels |
27,557,393 | 15,241,071 | — | 42,798,464 | ||||||||||||
|
Personal Products |
1,704,912 | — | — | 1,704,912 | ||||||||||||
|
Pharmaceuticals |
12,732,132 | 13,381,423 | — | 26,113,555 | ||||||||||||
|
Road & Rail |
— | 2,811,929 | — | 2,811,929 | ||||||||||||
|
Semiconductors & Semiconductor Equipment |
8,216,302 | — | — | 8,216,302 | ||||||||||||
|
Specialty Retail |
2,271,664 | — | — | 2,271,664 | ||||||||||||
|
Technology Hardware, Storage & Peripherals |
2,161,574 | 7,224,885 | — | 9,386,459 | ||||||||||||
|
Thrifts & Mortgage Finance |
— | — | 4,967,055 | 4,967,055 | ||||||||||||
|
Tobacco |
4,648,190 | 4,854,171 | — | 9,502,361 | ||||||||||||
|
Wireless Telecommunication Services |
5,762,466 | — | — | 5,762,466 | ||||||||||||
| 34 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock High Equity Income Fund |
|
|
||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
|
|
||||||||||||||||
|
Preferred Stocks |
$ | — | $ | — | $ | 4,271,952 | $ | 4,271,952 | ||||||||
|
Equity-Linked Notes: |
||||||||||||||||
|
Aerospace & Defense |
— | 2,191,711 | — | 2,191,711 | ||||||||||||
|
Automobiles |
— | 2,840,807 | — | 2,840,807 | ||||||||||||
|
Banks |
— | 5,185,345 | — | 5,185,345 | ||||||||||||
|
Beverages |
— | 1,187,789 | — | 1,187,789 | ||||||||||||
|
Building Products |
— | 601,664 | — | 601,664 | ||||||||||||
|
Capital Markets |
— | 886,987 | 1,020,530 | 1,907,517 | ||||||||||||
|
Chemicals |
— | — | 1,055,388 | 1,055,388 | ||||||||||||
|
Communications Equipment |
— | 2,258,769 | — | 2,258,769 | ||||||||||||
|
Containers & Packaging |
— | 1,531,621 | — | 1,531,621 | ||||||||||||
|
Diversified Telecommunication Services |
— | 6,877,282 | — | 6,877,282 | ||||||||||||
|
Electric Utilities |
— | 4,743,364 | — | 4,743,364 | ||||||||||||
|
Energy Equipment & Services |
— | 1,232,493 | — | 1,232,493 | ||||||||||||
|
Food Products |
— | 2,174,168 | — | 2,174,168 | ||||||||||||
|
Health Care Equipment & Supplies |
— | 1,183,975 | 1,921,688 | 3,105,663 | ||||||||||||
|
Health Care Providers & Services |
— | 628,713 | — | 628,713 | ||||||||||||
|
Household Products |
— | 2,147,260 | — | 2,147,260 | ||||||||||||
|
Industrial Conglomerates |
— | 2,293,556 | — | 2,293,556 | ||||||||||||
|
Insurance |
— | 11,474,181 | 1,867,216 | 13,341,397 | ||||||||||||
|
Multi-Utilities |
— | 1,621,802 | — | 1,621,802 | ||||||||||||
|
Oil, Gas & Consumable Fuels |
— | 1,671,591 | 5,391,429 | 7,063,020 | ||||||||||||
|
Personal Products |
— | — | 566,295 | 566,295 | ||||||||||||
|
Pharmaceuticals |
— | 4,761,688 | — | 4,761,688 | ||||||||||||
|
Semiconductors & Semiconductor Equipment |
— | 3,692,300 | — | 3,692,300 | ||||||||||||
|
Tobacco |
— | 1,135,680 | — | 1,135,680 | ||||||||||||
|
Wireless Telecommunication Services |
— | 1,553,923 | — | 1,553,923 | ||||||||||||
|
Short-Term Securities |
7,488,275 | — | — | 7,488,275 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | 261,547,218 | $ | 132,070,632 | $ | 24,990,155 | $ | 418,608,005 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
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 |
Preferred Stocks |
Equity-Linked Notes |
Total | |||||||||||||
|
|
||||||||||||||||
|
Assets: |
||||||||||||||||
|
Opening Balance, as of September 30, 2018 |
$ | 9,607,907 | $ | 8,207,583 | $ | — | $ | 17,815,490 | ||||||||
|
Transfers into Level 3 |
— | — | — | — | ||||||||||||
|
Transfers out of Level 3(a) |
— | (4,139,057 | ) | — | (4,139,057 | ) | ||||||||||
|
Other |
— | — | — | — | ||||||||||||
|
Accrued discounts/premiums |
— | — | — | — | ||||||||||||
|
Net realized gain (loss) |
— | — | — | — | ||||||||||||
|
Net change in unrealized appreciation (depreciation)(b)(c) |
(712,250 | ) | 203,426 | (45,004 | ) | (553,828 | ) | |||||||||
|
Purchases |
— | — | 11,867,550 | 11,867,550 | ||||||||||||
|
Sales |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Closing Balance, as of September 30, 2019 |
$ | 8,895,657 | $ | 4,271,952 | $ | 11,822,546 | $ | 24,990,155 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Net change in unrealized appreciation (depreciation) on investments still held at September 30, 2019 (c) |
$ | (712,250 | ) | $ | 203,426 | $ | (45,004 | ) | $ | (553,828 | ) | |||||
|
|
|
|
|
|
|
|
|
|||||||||
| (a) |
As of September 30, 2018, the Fund used significant unobservable inputs in determining the value of certain investments. As of September 30, 2019, the Fund used observable inputs in determining the value of the same investments. As a result, investments at beginning of period value were transferred from Level 3 to Level 2 in the disclosure hierarchy. |
| (b) |
Included in the related net change in unrealized appreciation (depreciation) in the Statements of Operations. |
| (c) |
Any difference between net change in unrealized appreciation (depreciation) and net change in unrealized appreciation (depreciation) on investments still held at September 30, 2019, is generally due to investments no longer held or categorized as Level 3 at period end. |
| S C H E D U L E S O F I N V E S T M E N T S | 35 |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock High Equity Income Fund |
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 $11,822,546. 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
Utilized(a) |
|||||||||
|
|
||||||||||||
|
Assets: |
||||||||||||
|
Common Stocks |
$ | 8,895,657 | Market | Tangible Book Value Multiple | 1.45x | |||||||
| Income | Discount Rate | 3% | ||||||||||
|
Preferred Stocks |
4,271,952 | Market | Revenue Multiple | 15.50x | ||||||||
|
|
|
|||||||||||
| $ | 13,167,609 | |||||||||||
|
|
|
|||||||||||
| (a) |
A significant change in unobservable input would have resulted in a correlated (inverse) significant change to value. |
See notes to financial statements.
| 36 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Schedule of Investments September 30, 2019 |
BlackRock International Dividend Fund (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
|
Common Stocks — 95.6% |
||||||||
| Australia — 4.3% | ||||||||
|
Ansell Ltd. |
210,793 | $ | 3,902,077 | |||||
|
Sonic Healthcare Ltd. |
315,893 | 5,989,665 | ||||||
|
|
|
|||||||
| 9,891,742 | ||||||||
| Canada — 11.8% | ||||||||
|
Rogers Communications, Inc., Class B |
231,427 | 11,272,208 | ||||||
|
TELUS Corp. |
446,480 | 15,889,747 | ||||||
|
|
|
|||||||
| 27,161,955 | ||||||||
| Denmark — 3.0% | ||||||||
|
Novo Nordisk A/S, Class B |
134,938 | 6,973,081 | ||||||
|
|
|
|||||||
| Finland — 2.8% | ||||||||
|
Kone OYJ, Class B |
113,940 | 6,484,394 | ||||||
|
|
|
|||||||
| France — 7.1% | ||||||||
|
Sanofi |
97,444 | 9,026,543 | ||||||
|
Schneider Electric SE |
83,867 | 7,333,532 | ||||||
|
|
|
|||||||
| 16,360,075 | ||||||||
| Germany — 4.8% | ||||||||
|
Deutsche Post AG, Registered Shares |
335,320 | 11,174,653 | ||||||
|
|
|
|||||||
| India — 2.5% | ||||||||
|
Hero MotoCorp Ltd. |
84,616 | 3,232,517 | ||||||
|
Jasper Infotech Private Ltd. (Acquired 5/7/14, cost $7,423,816)(a)(b)(c) |
9,970 | 2,530,785 | ||||||
|
|
|
|||||||
| 5,763,302 | ||||||||
| Netherlands — 5.3% | ||||||||
|
Heineken NV |
46,199 | 4,990,071 | ||||||
|
Koninklijke Philips NV |
158,056 | 7,303,647 | ||||||
|
|
|
|||||||
| 12,293,718 | ||||||||
| Singapore — 5.0% | ||||||||
|
DBS Group Holdings Ltd. |
329,200 | 5,955,595 | ||||||
|
United Overseas Bank Ltd. |
302,500 | 5,621,967 | ||||||
|
|
|
|||||||
| 11,577,562 | ||||||||
| Sweden — 2.8% | ||||||||
|
Svenska Handelsbanken AB, A Shares |
689,608 | 6,451,341 | ||||||
|
|
|
|||||||
| Switzerland — 11.0% | ||||||||
|
Cie Financiere Richemont SA, Registered Shares |
38,997 | 2,857,921 | ||||||
| Security | Shares | Value | ||||||
| Switzerland (continued) | ||||||||
|
Nestle SA, Registered Shares |
87,267 | $ | 9,464,502 | |||||
|
Novartis AG, Registered Shares |
103,286 | 8,963,881 | ||||||
|
SGS SA, Registered Shares |
1,610 | 3,991,066 | ||||||
|
|
|
|||||||
| 25,277,370 | ||||||||
| Taiwan — 1.9% | ||||||||
|
Taiwan Semiconductor Manufacturing Co. Ltd. |
496,000 | 4,405,241 | ||||||
|
|
|
|||||||
| United Kingdom — 25.5% | ||||||||
|
AstraZeneca PLC |
46,995 | 4,196,120 | ||||||
|
BAE Systems PLC |
1,241,700 | 8,695,940 | ||||||
|
British American Tobacco PLC |
292,057 | 10,785,685 | ||||||
|
Diageo PLC |
119,341 | 4,875,093 | ||||||
|
GlaxfoSmithKline PLC |
550,653 | 11,802,972 | ||||||
|
Imperial Brands PLC |
264,200 | 5,932,893 | ||||||
|
RELX PLC |
163,609 | 3,890,127 | ||||||
|
Unilever PLC |
144,587 | 8,689,918 | ||||||
|
|
|
|||||||
| 58,868,748 | ||||||||
| United States — 7.8% | ||||||||
|
3M Co |
39,307 | 6,462,071 | ||||||
|
Amcor PLC — CDI |
1,205,181 | 11,598,392 | ||||||
|
|
|
|||||||
| 18,060,463 | ||||||||
|
Total Common Stocks — 95.6%
|
|
220,743,645 | ||||||
|
|
|
|||||||
|
Preferred Stocks — 2.2% |
||||||||
| China — 2.2% | ||||||||
|
Xiaoju Kuaizhi, Inc., Series A-17 (Acquired 07/28/15, cost $2,770,046)(a)(b)(c) |
101,000 | 5,143,930 | ||||||
|
|
|
|||||||
|
Total Preferred Stocks — 2.2%
|
|
5,143,930 | ||||||
|
|
|
|||||||
|
Total Long-Term Investments — 97.8%
|
|
225,887,575 | ||||||
|
|
|
|||||||
|
Total Investments — 97.8%
|
|
225,887,575 | ||||||
|
Other Assets Less Liabilities — 2.2% |
4,970,367 | |||||||
|
|
|
|||||||
|
Net Assets — 100.0% |
$ | 230,857,942 | ||||||
|
|
|
|||||||
| (a) |
Restricted security as to resale, excluding 144A securities. The Fund held restricted securities with a current value of $7,674,715, representing 3.3% of its net assets as of period end, and an original cost of $10,193,862. |
| (b) |
Non-income producing security. |
| (c) |
Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
During the year ended September 30, 2019, investments in issuers considered to be an affiliate/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 09/30/18 |
Net
Activity |
Shares
Held at 09/30/19 |
Value at 09/30/19 |
Income |
Net
Realized
Gain
(Loss)(a)
|
Change in
Unrealized Appreciation (Depreciation) |
|||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||
|
BlackRock Liquidity Funds, T-Fund, Institutional Class |
306,821 | (306,821 | ) | — | $ | — | $ | 16,491 | $ | — | $ | — | ||||||||||||||||||||||||||||||||
|
SL Liquidity Series, LLC, Money Market Series |
— | — | — | — | 2,590 | (b) | (525 | ) | — | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
| $ | — | $ | 19,081 | $ | (525 | ) | $ | — | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
| (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. |
| S C H E D U L E S O F I N V E S T M E N T S | 37 |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock International Dividend Fund |
Derivative Financial Instruments Categorized by Risk Exposure
For the year ended September 30, 2019, the effect of derivative financial instruments in the Statements of Operations was as follows:
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Realized Gain (Loss) from: |
Commodity
|
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate
|
Other Contracts |
Total | |||||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||
|
Forward foreign currency exchange contracts |
$ | — | $ | — | $ | — | $ | 417 | $ | — | $ | — | $ | 417 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
Average Quarterly Balances of Outstanding Derivative Financial Instruments
|
|
||||
|
Forward foreign currency exchange contracts: |
||||
|
Average amounts sold — in USD |
$ | — | (a) | |
|
|
||||
| (a) |
Derivative not held at any quarter-end. The risk exposure table serves as an indicator of activity during the period. |
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 categorized in the disclosure hierarchy:
|
|
||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
|
|
||||||||||||||||
|
Assets: |
||||||||||||||||
|
Investments: |
||||||||||||||||
|
Long-Term Investments: |
||||||||||||||||
|
Common Stocks: |
||||||||||||||||
|
Australia |
$ | — | $ | 9,891,742 | $ | — | $ | 9,891,742 | ||||||||
|
Canada |
27,161,955 | — | — | 27,161,955 | ||||||||||||
|
Denmark |
— | 6,973,081 | — | 6,973,081 | ||||||||||||
|
Finland |
— | 6,484,394 | — | 6,484,394 | ||||||||||||
|
France |
— | 16,360,075 | — | 16,360,075 | ||||||||||||
|
Germany |
— | 11,174,653 | — | 11,174,653 | ||||||||||||
|
India |
— | 3,232,517 | 2,530,785 | 5,763,302 | ||||||||||||
|
Netherlands |
— | 12,293,718 | — | 12,293,718 | ||||||||||||
|
Singapore |
— | 11,577,562 | — | 11,577,562 | ||||||||||||
|
Sweden |
— | 6,451,341 | — | 6,451,341 | ||||||||||||
|
Switzerland |
— | 25,277,370 | — | 25,277,370 | ||||||||||||
|
Taiwan |
— | 4,405,241 | — | 4,405,241 | ||||||||||||
|
United Kingdom |
— | 58,868,748 | — | 58,868,748 | ||||||||||||
|
United States |
6,462,071 | 11,598,392 | — | 18,060,463 | ||||||||||||
|
Preferred Stocks: |
||||||||||||||||
|
China |
— | — | 5,143,930 | 5,143,930 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | 33,624,026 | $ | 184,588,834 | $ | 7,674,715 | $ | 225,887,575 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
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:
|
|
||||||||||||||||||||||||
|
Common Stocks |
Preferred Stocks |
Total | ||||||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Assets: |
||||||||||||||||||||||||
|
Opening Balance, as of September 30, 2018 |
$ | 2,047,340 | $ | 5,143,930 | $ | 7,191,270 | ||||||||||||||||||
|
Transfers into Level 3 |
— | — | — | |||||||||||||||||||||
|
Transfers out of Level 3 |
— | — | — | |||||||||||||||||||||
|
Other |
— | — | — | |||||||||||||||||||||
|
Net realized gain (loss) |
— | — | — | |||||||||||||||||||||
|
Net change in unrealized appreciation (depreciation)(a)(b) |
483,445 | — | 483,445 | |||||||||||||||||||||
|
Purchases |
— | — | — | |||||||||||||||||||||
|
Sales |
— | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||
|
Closing Balance, as of September 30, 2019 |
$ | 2,530,785 | $ | 5,143,930 | $ | 7,674,715 | ||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||
|
Net change in unrealized appreciation (depreciation) on investments still held at September 30, 2019 (b) |
$ | 483,445 | $ | — | $ | 483,445 | ||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||
| (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 September 30, 2019, is generally due to investments no longer held or categorized as Level 3 at period end. |
| 38 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock International Dividend Fund |
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.
|
|
||||||||||||||||
| Value | Valuation Approach |
Unobservable Inputs |
Range of
Unobservable Inputs Utilized(a) |
|||||||||||||
|
|
||||||||||||||||
|
Assets: |
||||||||||||||||
|
Common Stocks |
$ | 2,530,785 | Market | Revenue Multiple | 5.54x | |||||||||||
|
Preferred Stocks |
5,143,930 | Market | Recent Transactions | — | ||||||||||||
|
|
|
|||||||||||||||
| $ | 7,674,715 | |||||||||||||||
|
|
|
|||||||||||||||
| (a) |
A significant change in unobservable input would have resulted in a correlated (inverse) significant change to value. |
See notes to financial statements.
| S C H E D U L E S O F I N V E S T M E N T S | 39 |
|
Schedule of Investments September 30, 2019 |
BlackRock Technology Opportunities Fund (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
|
Common Stocks — 97.4% |
|
|||||||
| Automobiles — 0.6% | ||||||||
|
Tesla, Inc.(a)(b) |
51,526 | $ | 12,411,068 | |||||
|
|
|
|||||||
| Communications Equipment — 0.6% | ||||||||
|
Viavi Solutions, Inc.(a) |
885,553 | 12,402,170 | ||||||
|
|
|
|||||||
| Diversified Consumer Services — 1.1% | ||||||||
|
Arco Platform Ltd., Class A(a)(b) |
429,558 | 21,774,295 | ||||||
|
|
|
|||||||
| Diversified Financial Services — 0.2% | ||||||||
|
TransferWise (Acquired 06/03/19, cost $3,861,759)(a)(c)(d) |
43,665 | 3,984,431 | ||||||
|
|
|
|||||||
| Diversified Telecommunication Services — 1.3% | ||||||||
|
Bandwidth, Inc., Class A(a) |
141,268 | 9,197,959 | ||||||
|
China Tower Corp. Ltd., H Shares(e) |
65,238,000 | 14,805,681 | ||||||
|
|
|
|||||||
| 24,003,640 | ||||||||
| Electronic Equipment, Instruments & Components — 3.2% | ||||||||
|
II-VI, Inc.(a) |
591,980 | 20,843,616 | ||||||
|
Keysight Technologies, Inc.(a) |
141,483 | 13,759,222 | ||||||
|
Sunny Optical Technology Group Co. Ltd. |
1,302,000 | 19,111,885 | ||||||
|
Yageo Corp. |
1,003,000 | 7,969,034 | ||||||
|
|
|
|||||||
| 61,683,757 | ||||||||
| Entertainment — 2.4% | ||||||||
|
Activision Blizzard, Inc. |
395,951 | 20,953,727 | ||||||
|
Netflix, Inc.(a) |
47,753 | 12,779,658 | ||||||
|
Ubisoft Entertainment SA(a) |
168,739 | 12,164,539 | ||||||
|
|
|
|||||||
| 45,897,924 | ||||||||
| Equity Real Estate Investment Trusts (REITs) — 0.8% | ||||||||
|
Equinix, Inc. |
25,203 | 14,537,090 | ||||||
|
|
|
|||||||
| Health Care Technology — 1.3% | ||||||||
|
Ping An Healthcare and Technology Co. Ltd.(a)(b)(e) |
2,167,759 | 12,684,419 | ||||||
|
Teladoc Health, Inc.(a)(b) |
175,972 | 11,916,824 | ||||||
|
|
|
|||||||
| 24,601,243 | ||||||||
| Hotels, Restaurants & Leisure — 0.4% | ||||||||
|
Luckin Coffee, Inc. — ADR(a)(b) |
409,878 | 7,787,682 | ||||||
|
|
|
|||||||
| Household Durables — 0.9% | ||||||||
|
Roku, Inc.(a)(f) |
162,384 | 16,524,196 | ||||||
|
|
|
|||||||
| Interactive Media & Services — 11.9% | ||||||||
|
Alphabet, Inc., Class A(a) |
49,733 | 60,730,956 | ||||||
|
Facebook, Inc., Class A(a) |
162,814 | 28,993,917 | ||||||
|
IAC/InterActiveCorp(a) |
90,570 | 19,741,543 | ||||||
|
Kakao Corp. |
149,381 | 16,912,231 | ||||||
|
Pinterest, Inc., Class A(a)(b) |
413,717 | 10,942,815 | ||||||
|
Snap, Inc., Class A(a) |
893,943 | 14,124,299 | ||||||
|
Tencent Holdings Ltd. |
1,381,800 | 57,797,824 | ||||||
|
Yandex NV, Class A(a) |
455,680 | 15,953,357 | ||||||
|
|
|
|||||||
| 225,196,942 | ||||||||
| Internet & Direct Marketing Retail — 9.8% | ||||||||
|
Alibaba Group Holding Ltd. — ADR(a) |
323,068 | 54,026,662 | ||||||
|
Amazon.com, Inc.(a) |
30,619 | 53,151,828 | ||||||
|
Delivery Hero SE(a)(e) |
327,016 | 14,518,047 | ||||||
|
Ensogo Ltd.(a)(c) |
94,425 | 1 | ||||||
|
Farfetch Ltd., Class A(a)(b) |
1,002,025 | 8,657,496 | ||||||
|
Jasper Infotech Private Ltd.
|
1,900 | 482,296 | ||||||
|
Meituan Dianping, Class B(a) |
1,668,430 | 17,040,316 | ||||||
|
MercadoLibre, Inc.(a)(f) |
34,425 | 18,976,093 | ||||||
|
Trainline PLC(a)(e) |
1,441,809 | 7,427,893 | ||||||
|
Zalando SE(a) |
250,700 | 11,446,800 | ||||||
|
|
|
|||||||
| 185,727,432 | ||||||||
| IT Services — 17.3% | ||||||||
|
Adyen NV(a)(e) |
17,031 | 11,200,040 | ||||||
|
Endava PLC — ADR(a) |
278,568 | 10,543,799 | ||||||
| Security | Shares | Value | ||||||
| IT Services (continued) | ||||||||
|
GDS Holdings Ltd. — ADR(a)(b) |
294,457 | $ | 11,801,836 | |||||
|
GMO Payment Gateway, Inc. |
235,900 | 15,834,396 | ||||||
|
InterXion Holding NV(a) |
215,225 | 17,532,228 | ||||||
|
Mastercard, Inc., Class A |
98,209 | 26,670,618 | ||||||
|
MongoDB, Inc.(a)(f) |
105,974 | 12,767,748 | ||||||
|
Network International Holdings PLC(a)(e) |
1,807,610 | 11,890,676 | ||||||
|
Okta, Inc.(a)(f) |
157,768 | 15,533,837 | ||||||
|
Pagseguro Digital Ltd., Class A(a)(b)(f) |
384,537 | 17,807,908 | ||||||
|
PayPal Holdings, Inc.(a) |
287,696 | 29,802,429 | ||||||
|
Shopify, Inc., Class A(a)(f) |
56,733 | 17,681,407 | ||||||
|
Square, Inc., Class A(a)(f) |
398,712 | 24,700,208 | ||||||
|
StoneCo Ltd., Class A(a) |
382,602 | 13,306,898 | ||||||
|
Twilio, Inc., Class A(a)(b)(f) |
316,813 | 34,836,757 | ||||||
|
Visa, Inc., Class A(b) |
141,424 | 24,326,342 | ||||||
|
Wirecard AG |
113,739 | 18,202,803 | ||||||
|
Wix.com Ltd.(a) |
111,000 | 12,958,140 | ||||||
|
|
|
|||||||
| 327,398,070 | ||||||||
| Multiline Retail — 1.2% | ||||||||
|
Magazine Luiza SA |
2,546,202 | 22,637,264 | ||||||
|
|
|
|||||||
| Professional Services — 0.5% | ||||||||
|
HeadHunter Group PLC — ADR |
501,706 | 9,677,909 | ||||||
|
|
|
|||||||
| Road & Rail — 0.2% | ||||||||
|
Uber Technologies, Inc. (Acquired 05/10/19, cost $2,000,005)(a)(d) |
128,924 | 3,887,961 | ||||||
|
|
|
|||||||
| Semiconductors & Semiconductor Equipment — 13.4% | ||||||||
|
Advanced Micro Devices, Inc.(a) |
721,637 | 20,920,257 | ||||||
|
AIXTRON SE(a)(b) |
833,066 | 8,504,214 | ||||||
|
ASML Holding NV |
86,278 | 21,398,177 | ||||||
|
Cree, Inc.(a)(b) |
364,496 | 17,860,304 | ||||||
|
Inphi Corp.(a) |
249,412 | 15,226,603 | ||||||
|
Lam Research Corp. |
108,675 | 25,115,879 | ||||||
|
Marvell Technology Group Ltd. |
1,042,745 | 26,037,343 | ||||||
|
Micron Technology, Inc.(a) |
322,014 | 13,798,300 | ||||||
|
Monolithic Power Systems, Inc. |
86,476 | 13,458,260 | ||||||
|
NVIDIA Corp. |
62,668 | 10,908,619 | ||||||
|
Silicon Laboratories, Inc.(a)(b) |
108,997 | 12,136,816 | ||||||
|
Skyworks Solutions, Inc. |
187,067 | 14,825,060 | ||||||
|
SOITEC(a) |
195,692 | 19,329,358 | ||||||
|
STMicroelectronics NV |
840,707 | 16,269,242 | ||||||
|
Taiwan Semiconductor Manufacturing Co. Ltd. — ADR |
393,629 | 18,295,876 | ||||||
|
|
|
|||||||
| 254,084,308 | ||||||||
| Software — 27.5% | ||||||||
|
Adobe, Inc.(a) |
94,010 | 25,970,262 | ||||||
|
Altair Engineering, Inc., Class A(a)(b) |
311,357 | 10,779,179 | ||||||
|
Alteryx, Inc., Class A(a)(b) |
164,549 | 17,677,499 | ||||||
|
Altium Ltd. |
574,356 | 12,961,870 | ||||||
|
Anaplan, Inc.(a) |
195,900 | 9,207,300 | ||||||
|
Aspen Technology, Inc.(a) |
82,928 | 10,206,778 | ||||||
|
Atlassian Corp. PLC, Class A(a)(f) |
187,339 | 23,499,804 | ||||||
|
Autodesk, Inc.(a) |
127,506 | 18,832,636 | ||||||
|
Avalara, Inc.(a) |
206,244 | 13,878,159 | ||||||
|
Cadence Design Systems, Inc.(a) |
170,121 | 11,241,596 | ||||||
|
Cloudflare, Inc., Class A(a) |
121,171 | 2,250,145 | ||||||
|
Crowdstrike Holdings, Inc., Class A(a)(b)(f) |
142,063 | 8,283,694 | ||||||
|
Datadog, Inc., Class A(a)(b) |
40,318 | 1,367,183 | ||||||
|
Elastic NV(a)(f) |
123,190 | 10,143,465 | ||||||
|
Five9, Inc.(a)(b) |
208,389 | 11,198,825 | ||||||
|
Intuit, Inc. |
42,116 | 11,200,329 | ||||||
|
Kingdee International Software Group Co. Ltd. |
13,561,000 | 14,280,809 | ||||||
|
Linx SA |
1,527,845 | 11,980,214 | ||||||
|
Linx SA — ADR(a) |
185,771 | 1,436,010 | ||||||
|
Microsoft Corp. |
618,272 | 85,958,356 | ||||||
|
Pluralsight, Inc., Class A(a) |
112,572 | 1,890,647 | ||||||
|
RingCentral, Inc., Class A(a) |
126,371 | 15,879,780 | ||||||
|
salesforce.com, Inc.(a) |
337,363 | 50,078,164 | ||||||
|
ServiceNow, Inc.(a)(f) |
84,212 | 21,377,216 | ||||||
| 40 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Technology Opportunities Fund (Percentages shown are based on Net Assets) |
| Security | Shares | Value | ||||||
| Software (continued) | ||||||||
|
Smartsheet, Inc., Class A(a) |
256,895 | $ | 9,255,927 | |||||
|
Splunk, Inc.(a)(b) |
107,282 | 12,644,256 | ||||||
|
SVMK, Inc.(a) |
642,355 | 10,984,270 | ||||||
|
Synopsys, Inc.(a) |
74,654 | 10,246,261 | ||||||
|
TeamViewer AG(a) |
822,772 | 22,141,586 | ||||||
|
Weimob, Inc.(a)(b)(e) |
19,386,000 | 8,696,349 | ||||||
|
Xero Ltd.(a) |
269,884 | 11,379,723 | ||||||
|
Zendesk, Inc.(a)(f) |
194,835 | 14,199,575 | ||||||
|
Zoom Video Communications, Inc., Class A(a)(b)(f) |
116,518 | 8,878,672 | ||||||
|
Zscaler, Inc.(a)(b)(f) |
256,246 | 12,110,186 | ||||||
|
|
|
|||||||
| 522,116,725 | ||||||||
|
Technology Hardware, Storage & Peripherals — 2.8% |
|
|||||||
|
Apple Inc. |
233,376 | 52,269,223 | ||||||
|
|
|
|||||||
|
Total Common Stocks — 97.4%
|
1,848,603,330 | |||||||
|
|
|
|||||||
|
Preferred Stocks — 1.6% |
||||||||
| Diversified Financial Services — 0.2% | ||||||||
|
TransferWise (Seed Preferred) (Acquired 06/03/19, cost $1,327,042)(a)(c)(d) |
15,005 | 1,369,206 | ||||||
|
TransferWise, Series A (Acquired 06/03/19, cost $1,569,103)(a)(c)(d) |
17,742 | 1,618,957 | ||||||
|
TransferWise, Series B (Acquired 06/03/19, cost $450,608)(a)(c)(d) |
5,095 | 464,919 | ||||||
|
TransferWise, Series C (Acquired 06/03/19, cost $251,969)(a)(c)(d) |
2,849 | 259,971 | ||||||
|
TransferWise, Series D (Acquired 06/03/19, cost $69,694)(a)(c)(d) |
788 | 71,905 | ||||||
|
TransferWise, Series E (Acquired 06/03/19, cost $7,429)(a)(c)(d) |
84 | 7,665 | ||||||
|
|
|
|||||||
| 3,792,623 | ||||||||
| Internet & Direct Marketing Retail — 0.4% | ||||||||
|
Postmates, Inc., Series F (Acquired 01/08/19, cost $6,260,003)(a)(c)(d) |
784,550 | 7,186,478 | ||||||
|
|
|
|||||||
| Road & Rail — 0.2% | ||||||||
|
FlixMobility GmbH Series F (Acquired 07/26/19, cost $2,490,608)(a)(c)(d) |
125 | 2,440,251 | ||||||
|
Xiaoju Kuaizhi, Inc., Series A-17 (Acquired 07/28/15, cost $1,080,592)(a)(c)(d) |
39,400 | 2,006,642 | ||||||
|
|
|
|||||||
| 4,446,893 | ||||||||
| Security | Shares | Value | ||||||
| Semiconductors & Semiconductor Equipment — 0.1% | ||||||||
|
PsiQuantum Corp., Series C (Acquired 09/09/19, cost $2,698,453)(a)(c)(d) |
581,814 | $ | 2,698,453 | |||||
|
|
|
|||||||
| Software — 0.7% | ||||||||
|
C3 AI, Inc., Series H (Acquired 08/14/19, cost $5,995,815)(a)(c)(d) |
1,190,000 | 5,995,815 | ||||||
|
GitLab Inc., Series E (Acquired 09/10/19, cost $5,163,325)(a)(c)(d) |
277,160 | 5,163,325 | ||||||
|
Palantir Technologies, Inc., Series I (Acquired 02/07/14, cost $1,500,011)(a)(c)(d) |
244,700 | 1,490,223 | ||||||
|
|
|
|||||||
| 12,649,363 | ||||||||
|
Total Preferred Stocks — 1.6% (Cost: $28,864,652) |
|
30,773,810 | ||||||
|
|
|
|||||||
|
Total Long-Term Investments — 99.0%
|
|
1,879,377,140 | ||||||
|
|
|
|||||||
|
Short-Term Securities — 8.6% |
||||||||
|
BlackRock Liquidity Funds, T-Fund, Institutional Class, 1.87%(g)(i) |
17,180,622 | 17,180,622 | ||||||
|
SL Liquidity Series, LLC, Money Market Series, 2.13%(g)(h)(i) |
145,550,227 | 145,579,337 | ||||||
|
|
|
|||||||
|
Total Short-Term Securities — 8.6%
|
162,759,959 | |||||||
|
|
|
|||||||
|
Options Purchased — 0.0% |
||||||||
|
Total Options Purchased — 0.0% (Cost: $10,124) |
8,109 | |||||||
|
|
|
|||||||
|
Total Investments Before Options Written — 107.6%
|
2,042,145,208 | |||||||
|
|
|
|||||||
|
Options Written — 0.0% |
||||||||
|
Options Written — 0.0%
|
|
(1,009,869 | ) | |||||
|
|
|
|||||||
|
Total Investments Net Of Options Written — 107.6% |
2,041,135,339 | |||||||
|
|
|
|||||||
|
Liabilities in Excess of Other Assets — (7.6)% |
|
(144,006,659 | ) | |||||
|
|
|
|||||||
|
Net Assets — 100.0% |
$ | 1,897,128,680 | ||||||
|
|
|
|||||||
| (a) |
Non-income producing security. |
| (b) |
Security, or a portion of the security, is on loan. |
| (c) |
Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
| (d) |
Restricted security as to resale, excluding 144A securities. The Fund held restricted securities with a current value of $39,128,498, representing 2.1% of its net assets as of period end, and an original cost $36,140,815. |
| (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) |
All or a portion of the security has been pledged and/or segregated as collateral in connection with outstanding exchange-traded options written. |
| (g) |
Annualized 7-day yield as of period end. |
| (h) |
Security was purchased with the cash collateral from loaned securities. |
| (i) |
During the year ended September 30, 2019, investments in issuers considered to be an affiliate/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
|
Net Activity |
Shares
Held at
|
Value at
09/30/19 |
Income |
Net
Realized Gain (Loss)(a) |
Change in
Unrealized Appreciation (Depreciation) |
|||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
|
BlackRock Liquidity Funds, T-Fund, Institutional Class |
95,326,684 | (78,146,062 | ) | 17,180,622 | $ | 17,180,622 | $ | 1,733,734 | $ | — | $ | — | ||||||||||||||||
|
SL Liquidity Series, LLC, Money Market Series |
116,620,862 | 28,929,365 | 145,550,227 | 145,579,337 | 2,480,866 | (b) | 978 | 6,753 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| $ | 162,759,959 | $ | 4,214,600 | $ | 978 | $ | 6,753 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| (a) |
Includes net capital gain distributions. |
| (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. |
| S C H E D U L E S O F I N V E S T M E N T S | 41 |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Technology Opportunities Fund |
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
Exchange — Traded Options Purchased
|
|
||||||||||||||||||||||||
| Description |
Number
of Contracts |
Expiration
Date |
Exercise Price |
Notional
(000) |
Value | |||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Call |
||||||||||||||||||||||||
|
Roku, Inc. |
144 | 10/18/19 | USD | 138.00 | USD | 1,465 | $ | 3,240 | ||||||||||||||||
|
Shopify, Inc., Class A |
56 | 10/18/19 | USD | 400.00 | USD | 1,745 | 1,540 | |||||||||||||||||
|
Twilio, Inc., Class A |
159 | 10/18/19 | USD | 135.00 | USD | 1,748 | 2,226 | |||||||||||||||||
|
Zoom Video Communications, Inc., Class A |
55 | 10/18/19 | USD | 90.00 | USD | 419 | 688 | |||||||||||||||||
|
Zscaler, Inc. |
83 | 10/18/19 | USD | 65.00 | USD | 392 | 415 | |||||||||||||||||
|
|
|
|||||||||||||||||||||||
| $ | 8,109 | |||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
Exchange — Traded Options Written
|
|
||||||||||||||||||||||||
| Description |
Number
of Contracts |
Expiration
Date |
Exercise Price |
Notional Amount (000) |
Value | |||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Call |
||||||||||||||||||||||||
|
Atlassian Corp. PLC, Class A |
203 | 10/04/19 | USD | 145.00 | USD | 2,546 | $ | (3,045 | ) | |||||||||||||||
|
MongoDB, Inc. |
31 | 10/04/19 | USD | 157.50 | USD | 373 | (465 | ) | ||||||||||||||||
|
Okta, Inc. |
197 | 10/04/19 | USD | 133.00 | USD | 1,940 | (985 | ) | ||||||||||||||||
|
Roku, Inc. |
120 | 10/04/19 | USD | 148.00 | USD | 1,221 | (360 | ) | ||||||||||||||||
|
ServiceNow, Inc. |
140 | 10/04/19 | USD | 270.00 | USD | 3,554 | (3,500 | ) | ||||||||||||||||
|
Shopify, Inc., Class A |
55 | 10/04/19 | USD | 405.00 | USD | 1,714 | (275 | ) | ||||||||||||||||
|
Twilio, Inc., Class A |
197 | 10/04/19 | USD | 136.00 | USD | 2,166 | (985 | ) | ||||||||||||||||
|
Zoom Video Communications, Inc., Class A |
109 | 10/04/19 | USD | 100.00 | USD | 831 | (1,090 | ) | ||||||||||||||||
|
Zscaler, Inc. |
166 | 10/04/19 | USD | 74.00 | USD | 785 | (8,300 | ) | ||||||||||||||||
|
Atlassian Corp. PLC, Class A |
204 | 10/11/19 | USD | 145.00 | USD | 2,559 | (7,140 | ) | ||||||||||||||||
|
MongoDB, Inc. |
93 | 10/11/19 | USD | 175.00 | USD | 1,120 | (930 | ) | ||||||||||||||||
|
Okta, Inc. |
197 | 10/11/19 | USD | 140.00 | USD | 1,940 | (985 | ) | ||||||||||||||||
|
ServiceNow, Inc. |
70 | 10/11/19 | USD | 270.00 | USD | 1,777 | (7,700 | ) | ||||||||||||||||
|
Twilio, Inc., Class A |
198 | 10/11/19 | USD | 138.00 | USD | 2,177 | (13,662 | ) | ||||||||||||||||
|
Zoom Video Communications, Inc., Class A |
108 | 10/11/19 | USD | 96.00 | USD | 823 | (10,800 | ) | ||||||||||||||||
|
Zscaler, Inc. |
201 | 10/11/19 | USD | 71.50 | USD | 950 | (10,050 | ) | ||||||||||||||||
|
Atlassian Corp. PLC, Class A |
204 | 10/18/19 | USD | 140.00 | USD | 2,559 | (30,600 | ) | ||||||||||||||||
|
Crowdstrike Holdings, Inc., Class A |
297 | 10/18/19 | USD | 95.00 | USD | 1,732 | (1,485 | ) | ||||||||||||||||
|
MongoDB, Inc. |
31 | 10/18/19 | USD | 160.00 | USD | 373 | (465 | ) | ||||||||||||||||
|
Okta, Inc. |
99 | 10/18/19 | USD | 113.00 | USD | 975 | (4,950 | ) | ||||||||||||||||
|
Roku, Inc. |
144 | 10/18/19 | USD | 160.00 | USD | 1,465 | (1,008 | ) | ||||||||||||||||
|
ServiceNow, Inc. |
70 | 10/18/19 | USD | 280.00 | USD | 1,777 | (4,900 | ) | ||||||||||||||||
|
Shopify, Inc., Class A |
56 | 10/18/19 | USD | 415.00 | USD | 1,745 | (700 | ) | ||||||||||||||||
|
Shopify, Inc., Class A |
43 | 10/18/19 | USD | 375.00 | USD | 1,340 | (3,010 | ) | ||||||||||||||||
|
Shopify, Inc., Class A |
21 | 10/18/19 | USD | 335.00 | USD | 654 | (10,710 | ) | ||||||||||||||||
|
Twilio, Inc., Class A |
159 | 10/18/19 | USD | 140.00 | USD | 1,748 | (1,987 | ) | ||||||||||||||||
|
Zendesk, Inc. |
614 | 10/18/19 | USD | 82.50 | USD | 4,475 | (19,955 | ) | ||||||||||||||||
|
Zoom Video Communications, Inc., Class A |
55 | 10/18/19 | USD | 105.00 | USD | 419 | (275 | ) | ||||||||||||||||
|
Zoom Video Communications, Inc., Class A |
54 | 10/18/19 | USD | 100.00 | USD | 411 | (270 | ) | ||||||||||||||||
|
Zscaler, Inc. |
166 | 10/18/19 | USD | 75.00 | USD | 785 | (1,660 | ) | ||||||||||||||||
|
Crowdstrike Holdings, Inc., Class A |
207 | 10/25/19 | USD | 73.50 | USD | 1,207 | (8,280 | ) | ||||||||||||||||
|
MongoDB, Inc. |
68 | 10/25/19 | USD | 147.00 | USD | 819 | (4,760 | ) | ||||||||||||||||
|
MongoDB, Inc. |
14 | 10/25/19 | USD | 150.00 | USD | 169 | (700 | ) | ||||||||||||||||
|
Okta, Inc. |
98 | 10/25/19 | USD | 114.00 | USD | 965 | (7,350 | ) | ||||||||||||||||
| 42 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Technology Opportunities Fund |
|
|
||||||||||||||||||||||||
| Description |
Number
of Contracts |
Expiration
Date |
Exercise
|
Notional
(000) |
Value | |||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Roku, Inc. |
144 | 10/25/19 | USD | 157.50 | USD | 1,465 | $ | (1,872 | ) | |||||||||||||||
|
ServiceNow, Inc. |
70 | 10/25/19 | USD | 280.00 | USD | 1,777 | (23,450 | ) | ||||||||||||||||
|
Square, Inc., Class A |
465 | 10/25/19 | USD | 61.50 | USD | 2,881 | (131,828 | ) | ||||||||||||||||
|
Twilio, Inc., Class A |
119 | 10/25/19 | USD | 136.00 | USD | 1,309 | (2,737 | ) | ||||||||||||||||
|
Twilio, Inc., Class A |
119 | 10/25/19 | USD | 139.00 | USD | 1,309 | (5,236 | ) | ||||||||||||||||
|
Twilio, Inc., Class A |
119 | 10/25/19 | USD | 124.00 | USD | 1,309 | (12,614 | ) | ||||||||||||||||
|
Zoom Video Communications, Inc., Class A |
109 | 10/25/19 | USD | 86.00 | USD | 831 | (4,360 | ) | ||||||||||||||||
|
Zscaler, Inc. |
200 | 10/25/19 | USD | 52.50 | USD | 945 | (15,500 | ) | ||||||||||||||||
|
MongoDB, Inc. |
68 | 11/01/19 | USD | 150.00 | USD | 819 | (6,120 | ) | ||||||||||||||||
|
Okta, Inc. |
98 | 11/01/19 | USD | 111.00 | USD | 965 | (15,435 | ) | ||||||||||||||||
|
ServiceNow, Inc. |
71 | 11/01/19 | USD | 285.00 | USD | 1,802 | (21,655 | ) | ||||||||||||||||
|
Shopify, Inc., Class A |
22 | 11/01/19 | USD | 365.00 | USD | 686 | (9,900 | ) | ||||||||||||||||
|
Square, Inc., Class A |
465 | 11/01/19 | USD | 61.50 | USD | 2,881 | (147,638 | ) | ||||||||||||||||
|
Twilio, Inc., Class A |
235 | 11/01/19 | USD | 119.00 | USD | 2,584 | (79,078 | ) | ||||||||||||||||
|
Twilio, Inc., Class A |
119 | 11/01/19 | USD | 124.00 | USD | 1,309 | (19,754 | ) | ||||||||||||||||
|
Zoom Video Communications, Inc., Class A |
19 | 11/01/19 | USD | 85.00 | USD | 145 | (1,473 | ) | ||||||||||||||||
|
Okta, Inc. |
98 | 11/08/19 | USD | 110.00 | USD | 965 | (22,295 | ) | ||||||||||||||||
|
MongoDB, Inc. |
193 | 11/15/19 | USD | 145.00 | USD | 2,325 | (43,907 | ) | ||||||||||||||||
|
Shopify, Inc., Class A |
86 | 11/15/19 | USD | 355.00 | USD | 2,680 | (73,960 | ) | ||||||||||||||||
|
Square, Inc., Class A |
465 | 11/15/19 | USD | 65.00 | USD | 2,881 | (140,662 | ) | ||||||||||||||||
|
Zoom Video Communications, Inc., Class A |
18 | 11/15/19 | USD | 85.00 | USD | 137 | (2,340 | ) | ||||||||||||||||
|
|
|
|||||||||||||||||||||||
| $ | (955,151 | ) | ||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
OTC Options Written
|
|
||||||||||||||||||||||||||
| Description | Counterparty |
Number of
Contracts |
Expiration
Date |
Exercise
Price |
Notional
Amount (000) |
Value | ||||||||||||||||||||
|
|
||||||||||||||||||||||||||
| Call | ||||||||||||||||||||||||||
|
Adyen NV |
Citibank N.A. | 4,250 | 11/05/19 | EUR | 653.86 | EUR | 2,564 | $ | (24,334 | ) | ||||||||||||||||
|
Adyen NV |
Citibank N.A. | 4,250 | 11/12/19 | EUR | 653.86 | EUR | 2,564 | (30,384 | ) | |||||||||||||||||
|
|
|
|||||||||||||||||||||||||
| $ | (54,718 | ) | ||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||
Balances Reported in the Statements of Assets and Liabilities for Written Options
|
|
||||||||||||
|
Unrealized
Appreciation |
Unrealized
Depreciation |
Value | ||||||||||
|
|
||||||||||||
|
Options Written |
$ | 2,518,777 | $ | (222,839 | ) | $ | (1,009,869 | ) | ||||
|
|
||||||||||||
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:
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets — Derivative Financial Instruments |
Commodity
|
Credit
Contracts |
Equity Contracts |
Foreign
Currency Exchange Contracts |
Interest
Rate Contracts |
Other
Contracts |
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Options purchased |
Investments at value — unaffiliated(a) | $ | — | $ | — | $ | 8,109 | $ | — | $ | — | $ | — | $ | 8,109 | |||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Liabilities — Derivative Financial Instruments |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Options written |
Options written at value | $ | — | $ | — | $ | 1,009,869 | $ | — | $ | — | $ | — | $ | 1,009,869 | |||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||
| (a) |
Includes options purchased at value as reported in the Schedule of Investments. |
| S C H E D U L E S O F I N V E S T M E N T S | 43 |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Technology Opportunities Fund |
For the year ended September 30, 2019, the effect of derivative financial instruments in the Statements of Operations was as follows:
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Realized Gain (Loss) from: |
Commodity
|
Credit
|
Equity Contracts |
Foreign Currency
|
Interest Rate Contracts |
Other
Contracts |
Total | |||||||||||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Forward foreign currency exchange contracts |
$ | — | $ | — | $ | — | $ | (2,226 | ) | $ | — | $ | — | $ | (2,226 | ) | ||||||||||||||||||||||||||||||||||||||||
|
Options written |
— | — | (1,953,472 | ) | — | — | — | (1,953,472 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
| $ | — | $ | — | $ | (1,953,472 | ) | $ | (2,226 | ) | $ | — | $ | — | $ | (1,955,698 | ) | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
|
Net Change in Unrealized Appreciation (Depreciation) on: |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Options purchased(a) |
$ | — | $ | — | $ | (2,015 | ) | $ | — | $ | — | $ | — | $ | (2,015 | ) | ||||||||||||||||||||||||||||||||||||||||
|
Options written |
— | — | 2,295,938 | — | — | — | 2,295,938 | |||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
| $ | — | $ | — | $ | 2,293,923 | $ | — | $ | — | $ | — | $ | 2,293,923 | |||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
| (a) |
Options purchased are included in net change in unrealized appreciation (depreciation) on investments. |
Average Quarterly Balances of Outstanding Derivative Financial Instruments
|
|
||||
|
Forward foreign currency exchange contracts: |
||||
|
Average amounts purchased — in USD |
$ | — | (a) | |
|
Average amounts sold — in USD |
— | (a) | ||
|
Options: |
||||
|
Average value of option contracts purchased |
2,027 | |||
|
Average value of option contracts written |
1,334,074 | |||
|
|
||||
| (a) |
Derivative not held at any quarter-end. The risk exposure table serves as an indicator of activity during the period. |
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: |
||||||||||||
|
Options |
$ | 8,109 | $ | 1,009,869 | ||||||||
|
|
|
|
|
|||||||||
|
Total derivative assets and liabilities in the Statements of Assets and Liabilities |
$ | 8,109 | 1,009,869 | |||||||||
|
|
|
|
|
|||||||||
|
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) |
$ | (8,109 | ) | (955,151 | ) | |||||||
|
|
|
|
|
|||||||||
|
Total derivative assets and liabilities subject to an MNA |
$ | — | $ | 54,718 | ||||||||
|
|
|
|
|
|||||||||
The following table presents the Fund’s derivative liabilities by counterparty net of amounts available of offset under and MNA and net of the related collateral received and pledged by the Fund:
| Counterparty |
Derivative
an MNA by
|
Derivative
Available for Offset(a) |
Non-cash
Collateral Pledged |
Cash
Collateral Pledged |
Net Amount
of Derivative Liabilities(b) |
|||||||||||||||
|
|
||||||||||||||||||||
|
Citibank N.A. |
$ | 54,718 | $ | — | $ | — | $ | — | $ | 54,718 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (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 payable due to the counterparty in the event of default. Net amount may be offset further by the options written receivable/payable on the Statements of Assets and Liabilities. |
| 44 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Technology Opportunities Fund |
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 categorized in the disclosure hierarchy:
|
|
||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
|
|
||||||||||||||||
|
Assets: |
||||||||||||||||
|
Investments: |
||||||||||||||||
|
Long-Term Investments: |
||||||||||||||||
|
Common Stocks: |
||||||||||||||||
|
Automobiles |
$ | 12,411,068 | $ | — | $ | — | $ | 12,411,068 | ||||||||
|
Communications Equipment |
12,402,170 | — | — | 12,402,170 | ||||||||||||
|
Diversified Consumer Services |
21,774,295 | — | — | 21,774,295 | ||||||||||||
|
Diversified Financial Services |
— | — | 3,984,431 | 3,984,431 | ||||||||||||
|
Diversified Telecommunication Services |
9,197,959 | 14,805,681 | — | 24,003,640 | ||||||||||||
|
Electronic Equipment, Instruments & Components |
34,602,838 | 27,080,919 | — | 61,683,757 | ||||||||||||
|
Entertainment |
33,733,385 | 12,164,539 | — | 45,897,924 | ||||||||||||
|
Equity Real Estate Investment Trusts (REITs) |
14,537,090 | — | — | 14,537,090 | ||||||||||||
|
Health Care Technology |
11,916,824 | 12,684,419 | — | 24,601,243 | ||||||||||||
|
Hotels, Restaurants & Leisure |
7,787,682 | — | — | 7,787,682 | ||||||||||||
|
Household Durables |
16,524,196 | — | — | 16,524,196 | ||||||||||||
|
Interactive Media & Services |
150,486,887 | 74,710,055 | — | 225,196,942 | ||||||||||||
|
Internet & Direct Marketing Retail |
142,239,972 | 43,005,163 | 482,297 | 185,727,432 | ||||||||||||
|
IT Services |
270,270,155 | 57,127,915 | — | 327,398,070 | ||||||||||||
|
Multiline Retail |
22,637,264 | — | — | 22,637,264 | ||||||||||||
|
Professional Services |
9,677,909 | — | — | 9,677,909 | ||||||||||||
|
Road & Rail |
— | 3,887,961 | — | 3,887,961 | ||||||||||||
|
Semiconductors & Semiconductor Equipment |
188,583,317 | 65,500,991 | — | 254,084,308 | ||||||||||||
|
Software |
474,797,974 | 47,318,751 | — | 522,116,725 | ||||||||||||
|
Technology Hardware, Storage & Peripherals |
52,269,223 | — | — | 52,269,223 | ||||||||||||
|
Preferred Stocks: |
||||||||||||||||
|
Diversified Financial Services |
— | — | 3,792,623 | 3,792,623 | ||||||||||||
|
Internet & Direct Marketing Retail |
— | — | 7,186,478 | 7,186,478 | ||||||||||||
|
Road & Rail |
— | — | 4,446,893 | 4,446,893 | ||||||||||||
|
Semiconductors & Semiconductor Equipment |
— | — | 2,698,453 | 2,698,453 | ||||||||||||
|
Software |
— | — | 12,649,363 | 12,649,363 | ||||||||||||
|
Options Purchased: |
||||||||||||||||
|
Equity contracts |
7,694 | 415 | — | 8,109 | ||||||||||||
|
Short-Term Securities |
17,180,622 | — | — | 17,180,622 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Subtotal |
$ | 1,503,038,524 | $ | 358,286,809 | $ | 35,240,538 | $ | 1,896,565,871 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Investments Valued at NAV(a) |
145,579,337 | |||||||||||||||
|
|
|
|||||||||||||||
|
Total Investments |
$ | 2,042,145,208 | ||||||||||||||
|
|
|
|||||||||||||||
|
Derivative Financial Instruments(b) |
||||||||||||||||
|
Liabilities: |
||||||||||||||||
|
Equity contracts |
$ | (955,151 | ) | $ | (54,718 | ) | — | $ | (1,009,869 | ) | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (a) |
Certain investments of the Fund were fair valued using net asset value (“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 options written. Options written are shown at value. |
| S C H E D U L E S O F I N V E S T M E N T S | 45 |
|
Schedule of Investments (continued) September 30, 2019 |
BlackRock Technology Opportunities Fund |
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 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 |
Preferred
Stocks |
Total | ||||||||||
|
|
||||||||||||
|
Assets: |
||||||||||||
|
Opening Balance, as of September 30, 2018 |
$ | 390,166 | $ | 9,148,838 | $ | 9,539,004 | ||||||
|
Transfers into Level 3 |
— | — | — | |||||||||
|
Transfers out of Level 3 |
— | (5,722,936 | ) | (5,722,936 | ) | |||||||
|
Other |
— | — | — | |||||||||
|
Accrued discounts/premiums |
— | — | — | |||||||||
|
Net realized gain (loss) |
— | — | — | |||||||||
|
Net change in unrealized appreciation (depreciation)(a)(b) |
214,803 | 1,063,859 | 1,278,662 | |||||||||
|
Purchases |
3,861,759 | 26,284,049 | 30,145,808 | |||||||||
|
Sales |
— | — | — | |||||||||
|
|
|
|
|
|
|
|||||||
|
Closing Balance, as of September 30, 2019 |
$ | 4,466,728 | $ | 30,773,810 | $ | 35,240,538 | ||||||
|
|
|
|
|
|
|
|||||||
|
Net change in unrealized appreciation (depreciation) on investments still held at September 30, 2019(b) |
$ | 214,803 | $ | 1,063,859 | $ | 1,278,662 | ||||||
|
|
|
|
|
|
|
|||||||
| (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 September 30, 2019, is generally due to investments no longer held or categorized as Level 3 at period end. |
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.
|
|
||||||||||||||||||
| Value | Valuation Approach |
Unobservable Inputs |
Range of
Utilized(a) |
Weighted Average of
Unobservable Inputs Based on Fair Value |
||||||||||||||
|
|
||||||||||||||||||
|
Assets: |
||||||||||||||||||
|
Common Stocks |
$ | 4,466,728 | Market | Revenue Multiple | 5.54x — 13.75x | 12.86x | ||||||||||||
|
Preferred Stocks |
30,773,810 | Market | Revenue Multiple | 13.75x — 15.50x | 14.24x | |||||||||||||
|
|
|
|||||||||||||||||
| Recent Transactions | — | — | ||||||||||||||||
| $ | 35,240,538 | |||||||||||||||||
|
|
|
|||||||||||||||||
| (a) |
A significant change in unobservable input would have resulted in a correlated (inverse) significant change to value. |
See notes to financial statements.
| 46 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Statements of Assets and Liabilities September 30, 2019 |
BlackRock FundsSM |
| F I N A N C I A L S T A T E M E N T S B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S | 47 |
|
Statements of Assets and Liabilities (continued) September 30, 2019 |
BlackRock FundsSM |
|
BlackRock
Advantage
Fund |
BlackRock Health Sciences Opportunities Portfolio |
BlackRock High Equity Income Fund |
BlackRock
Dividend Fund |
BlackRock Technology Opportunities Fund |
||||||||||||||||
|
NET ASSET VALUE |
||||||||||||||||||||
| Institutional | ||||||||||||||||||||
|
Net assets |
$ | 446,831,371 | $ | 3,095,352,432 | $ | 151,746,625 | $ | 83,813,682 | $ | 1,033,285,728 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Shares outstanding(a) |
27,719,802 | 50,290,833 | 5,710,980 | 2,923,415 | 31,668,473 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net asset value |
$ | 16.12 | $ | 61.55 | $ | 26.57 | $ | 28.67 | $ | 32.63 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Service | ||||||||||||||||||||
|
Net assets |
— | $ | 34,708,462 | $ | 10,023,888 | $ | 3,196,277 | $ | 20,429,233 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Shares outstanding(a) |
— | 591,647 | 419,321 | 117,784 | 661,514 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net asset value |
— | $ | 58.66 | $ | 23.91 | $ | 27.14 | $ | 30.88 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Investor A | ||||||||||||||||||||
|
Net assets |
$ | 404,739,155 | $ | 2,598,887,598 | $ | 215,120,650 | $ | 125,196,092 | $ | 672,110,060 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Shares outstanding(a) |
25,408,225 | 44,467,194 | 9,592,618 | 4,690,519 | 22,240,439 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net asset value |
$ | 15.93 | $ | 58.45 | $ | 22.43 | $ | 26.69 | $ | 30.22 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Investor C | ||||||||||||||||||||
|
Net assets |
$ | 9,447,517 | $ | 745,635,588 | $ | 36,132,238 | $ | 14,805,260 | $ | 152,505,019 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Shares outstanding(a) |
612,278 | 14,695,004 | 2,518,452 | 636,786 | 5,996,447 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net asset value |
$ | 15.43 | $ | 50.74 | $ | 14.35 | $ | 23.25 | $ | 25.43 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Class K | ||||||||||||||||||||
|
Net assets |
$ | 43,721,093 | $ | 171,517,109 | — | $ | 3,846,631 | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Shares outstanding(a) |
2,711,561 | 2,783,056 | — | 134,143 | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net asset value |
$ | 16.12 | $ | 61.63 | — | $ | 28.68 | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Class R | ||||||||||||||||||||
|
Net assets |
$ | 5,244,464 | $ | 224,862,204 | — | — | $ | 18,798,640 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Shares outstanding(a) |
329,631 | 3,941,473 | — | — | 616,814 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net asset value |
$ | 15.91 | $ | 57.05 | — | — | $ | 30.48 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (a) |
Unlimited number of shares authorized, $0.001 par value. |
See notes to financial statements.
| 48 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
|
Year Ended September 30, 2019 |
BlackRock FundsSM |
See notes to financial statements.
| F I N A N C I A L S T A T E M E N T S | 49 |
Statements of Changes in Net Assets
| (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.
| 50 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Changes in Net Assets (continued)
| (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.
| F I N A N C I A L S T A T E M E N T S | 51 |
(For a share outstanding throughout each period)
| BlackRock Advantage International Fund | ||||||||||||||||||||||||||||||||||||||||||||
| Institutional | ||||||||||||||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 16.97 | $ | 16.77 | $ | 14.50 | $ | 13.34 | $ | 14.19 | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Net investment income(a) |
0.44 | 0.45 | 0.19 | 0.09 | 0.09 | |||||||||||||||||||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
(0.90 | ) | (0.12 | ) | 2.37 | 1.18 | (0.69 | ) | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Net increase (decrease) from investment operations |
(0.46 | ) | 0.33 | 2.56 | 1.27 | (0.60 | ) | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Distributions from net investment income(b) |
(0.39 | ) | (0.13 | ) | (0.29 | ) | (0.11 | ) | (0.25 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Net asset value, end of year |
$ | 16.12 | $ | 16.97 | $ | 16.77 | $ | 14.50 | $ | 13.34 | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Total Return(c) |
||||||||||||||||||||||||||||||||||||||||||||
|
Based on net asset value |
(2.52 | )% | 1.94 | %(d) | 17.99 | % | 9.60 | % | (4.28 | )% | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||||||||||||||
|
Total expenses |
0.88 | % | 0.86 | % | 1.10 | % | 1.21 | % | 1.21 | % | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
0.59 | % | 0.64 | % | 0.86 | % | 1.06 | % | 1.06 | % | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Net investment income |
2.78 | % | 2.61 | % | 1.20 | % | 0.68 | % | 0.62 | % | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 446,831 | $ | 403,149 | $ | 116,595 | $ | 52,490 | $ | 57,826 | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Portfolio turnover rate |
140 | % | 106 | % | 177 | % | 67 | % | 64 | % | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
| (a) |
Based on average shares outstanding. |
| (b) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) |
Where applicable, assumes the reinvestment of distributions. |
| (d) |
Includes the litigation settlement amount. Excluding this amount, the Fund’s total return is 1.82%. |
See notes to financial statements.
| 52 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Advantage International Fund (continued) | ||||||||||||||||||||||||||||||||||||||||||||
| Investor A | ||||||||||||||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 16.78 | $ | 16.60 | $ | 14.35 | $ | 13.20 | $ | 14.04 | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Net investment income(a) |
0.40 | 0.38 | 0.12 | 0.06 | 0.05 | |||||||||||||||||||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
(0.90 | ) | (0.10 | ) | 2.38 | 1.16 | (0.68 | ) | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Net increase (decrease) from investment operations |
(0.50 | ) | 0.28 | 2.50 | 1.22 | (0.63 | ) | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Distributions from net investment income(b) |
(0.35 | ) | (0.10 | ) | (0.25 | ) | (0.07 | ) | (0.21 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Net asset value, end of year |
$ | 15.93 | $ | 16.78 | $ | 16.60 | $ | 14.35 | $ | 13.20 | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Total Return(c) |
||||||||||||||||||||||||||||||||||||||||||||
|
Based on net asset value |
(2.77 | )% | 1.68 | %(d) | 17.71 | % | 9.30 | % | (4.55 | )% | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||||||||||||||
|
Total expenses |
1.16 | % | 1.15 | % | 1.42 | % | 1.49 | % | 1.48 | % | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
0.84 | % | 0.89 | % | 1.19 | % | 1.33 | % | 1.33 | % | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Net investment income |
2.56 | % | 2.20 | % | 0.82 | % | 0.46 | % | 0.35 | % | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 404,739 | $ | 302,725 | $ | 169,806 | $ | 153,886 | $ | 163,932 | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Portfolio turnover rate |
140 | % | 106 | % | 177 | % | 67 | % | 64 | % | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
| (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 the effects of any sales charges and assumes the reinvestment of distributions. |
| (d) |
Includes the litigation settlement amount. Excluding this amount, the Fund’s total return is 1.56%. |
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 53 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Advantage International Fund (continued) | ||||||||||||||||||||||||||||||||||||||||||||
| Investor C | ||||||||||||||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 16.11 | $ | 15.96 | $ | 13.81 | $ | 12.74 | $ | 13.54 | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Net investment income (loss)(a) |
0.23 | 0.23 | (0.01 | ) | (0.05 | ) | (0.06 | ) | ||||||||||||||||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
(0.80 | ) | (0.08 | ) | 2.29 | 1.12 | (0.66 | ) | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Net increase (decrease) from investment operations |
(0.57 | ) | 0.15 | 2.28 | 1.07 | (0.72 | ) | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Distributions from net investment income(b) |
(0.11 | ) | — | (0.13 | ) | (0.00 | )(c) | (0.08 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Net asset value, end of year |
$ | 15.43 | $ | 16.11 | $ | 15.96 | $ | 13.81 | $ | 12.74 | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Total Return(d) |
||||||||||||||||||||||||||||||||||||||||||||
|
Based on net asset value |
(3.51 | )% | 0.94 | %(e) | 16.70 | % | 8.44 | % | (5.32 | )% | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||||||||||||||
|
Total expenses |
1.88 | % | 1.89 | % | 2.22 | %(f) | 2.27 | %(f) | 2.27 | % | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
1.59 | % | 1.64 | % | 2.03 | % | 2.14 | % | 2.14 | % | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Net investment income (loss) |
1.52 | % | 1.39 | % | (0.05 | )% | (0.35 | )% | (0.47 | )% | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 9,448 | $ | 23,111 | $ | 24,717 | $ | 43,218 | $ | 42,066 | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
Portfolio turnover rate |
140 | % | 106 | % | 177 | % | 67 | % | 64 | % | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
| (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 the effects of any sales charges and assumes the reinvestment of distributions. |
| (e) |
Includes the litigation settlement amount. Excluding this amount, the Fund’s total return is 0.81%. |
| (f) |
Includes recoupment of past waived and/or reimbursed fees with no financial impact to the expense ratio. |
See notes to financial statements.
| 54 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Advantage International Fund (continued) | ||||||||||||||||
| Class K | ||||||||||||||||
|
Year Ended
30, 2019 |
Period from
01/25/2018(a) to 09/30/2018 |
|||||||||||||||
|
Net asset value, beginning of period |
$ | 16.98 | $ | 18.33 | ||||||||||||
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Net investment income(b) |
0.56 | 0.39 | ||||||||||||||
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Net realized and unrealized loss |
(1.03 | ) | (1.74 | ) | ||||||||||||
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Net decrease from investment operations |
(0.47 | ) | (1.35 | ) | ||||||||||||
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Distributions from net investment income(c) |
(0.39 | ) | — | |||||||||||||
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Net asset value, end of period |
$ | 16.12 | $ | 16.98 | ||||||||||||
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Total Return(d) |
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Based on net asset value |
(2.53 | )% | (7.37 | )%(e)(f) | ||||||||||||
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Ratios to Average Net Assets |
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Total expenses |
0.75 | % | 0.80 | %(g) | ||||||||||||
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Total expenses after fees waived and/or reimbursed |
0.54 | % | 0.59 | %(g) | ||||||||||||
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Net investment income |
3.59 | % | 3.33 | %(g) | ||||||||||||
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Supplemental Data |
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Net assets, end of period (000) |
$ | 43,721 | $ | 8,175 | ||||||||||||
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Portfolio turnover rate |
140 | % | 106 | %(h) | ||||||||||||
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| (a) |
Commencement of operations. |
| (b) |
Based on average shares outstanding. |
| (c) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (d) |
Where applicable, assumes the reinvestment of distributions. |
| (e) |
Includes the litigation settlement amount. Excluding this amount, the Fund’s total return is (7.42)%. |
| (f) |
Aggregate total return. |
| (g) |
Annualized. |
| (h) |
Portfolio turnover is representative of the Fund for the entire year. |
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 55 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Advantage International Fund (continued) | ||||||||||||||||||||||||||||||||||||||||||||
| Class R | ||||||||||||||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||||||
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Net asset value, beginning of year |
$ | 16.74 | $ | 16.53 | $ | 14.29 | $ | 13.12 | $ | 13.94 | ||||||||||||||||||||||||||||||||||
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Net investment income (loss)(a) |
0.34 | 0.32 | 0.07 | 0.01 | (0.01 | ) | ||||||||||||||||||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
(0.88 | ) | (0.08 | ) | 2.36 | 1.16 | (0.68 | ) | ||||||||||||||||||||||||||||||||||||
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Net increase (decrease) from investment operations |
(0.54 | ) | 0.24 | 2.43 | 1.17 | (0.69 | ) | |||||||||||||||||||||||||||||||||||||
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Distributions from net investment income(b) |
(0.29 | ) | (0.03 | ) | (0.19 | ) | (0.00 | )(c) | (0.13 | ) | ||||||||||||||||||||||||||||||||||
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Net asset value, end of year |
$ | 15.91 | $ | 16.74 | $ | 16.53 | $ | 14.29 | $ | 13.12 | ||||||||||||||||||||||||||||||||||
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Total Return(d) |
||||||||||||||||||||||||||||||||||||||||||||
|
Based on net asset value |
(3.04 | )% | 1.44 | %(e) | 17.26 | % | 8.96 | % | (4.95 | )% | ||||||||||||||||||||||||||||||||||
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Ratios to Average Net Assets |
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Total expenses |
1.44 | % | 1.45 | % | 1.75 | %(f) | 1.83 | %(f) | 1.81 | %(f) | ||||||||||||||||||||||||||||||||||
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Total expenses after fees waived and/or reimbursed and paid indirectly |
1.09 | % | 1.14 | % | 1.55 | % | 1.72 | % | 1.72 | % | ||||||||||||||||||||||||||||||||||
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Net investment income (loss) |
2.20 | % | 1.91 | % | 0.46 | % | 0.08 | % | (0.07 | )% | ||||||||||||||||||||||||||||||||||
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Supplemental Data |
||||||||||||||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 5,244 | $ | 7,572 | $ | 7,551 | $ | 8,343 | $ | 8,308 | ||||||||||||||||||||||||||||||||||
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|
Portfolio turnover rate |
140 | % | 106 | % | 177 | % | 67 | % | 64 | % | ||||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||||||||||||||
| (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, assumes the reinvestment of distributions. |
| (e) |
Includes the litigation settlement amount. Excluding this amount, the Fund’s total return is 1.26%. |
| (f) |
Includes recoupment of past waived and/or reimbursed fees with no financial impact to the expense ratio. |
See notes to financial statements.
| 56 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Health Sciences Opportunities Portfolio | ||||||||||||||||||||||||||||||||||||||||||||
| Institutional | ||||||||||||||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 67.67 | $ | 57.28 | $ | 50.30 | $ | 52.51 | $ | 50.07 | ||||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||||||||||||||
|
Net investment income(a) |
0.28 | 0.24 | 0.14 | 0.13 | 0.05 | |||||||||||||||||||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
(1.64 | ) | 12.18 | 7.92 | 3.87 | 5.96 | ||||||||||||||||||||||||||||||||||||||
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|
Net increase (decrease) from investment operations |
(1.36 | ) | 12.42 | 8.06 | 4.00 | 6.01 | ||||||||||||||||||||||||||||||||||||||
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Distributions(b) |
||||||||||||||||||||||||||||||||||||||||||||
|
From net investment income |
(0.23 | ) | (0.02 | ) | — | (0.77 | ) | (0.15 | ) | |||||||||||||||||||||||||||||||||||
|
From net realized gain |
(4.53 | ) | (2.01 | ) | (1.08 | ) | (5.44 | ) | (3.42 | ) | ||||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||||||||||||||
|
Total distributions |
(4.76 | ) | (2.03 | ) | (1.08 | ) | (6.21 | ) | (3.57 | ) | ||||||||||||||||||||||||||||||||||
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|
Net asset value, end of year |
$ | 61.55 | $ | 67.67 | $ | 57.28 | $ | 50.30 | $ | 52.51 | ||||||||||||||||||||||||||||||||||
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|
Total Return(c) |
||||||||||||||||||||||||||||||||||||||||||||
|
Based on net asset value |
(1.84 | )% | 22.47 | % | 16.53 | % | 7.99 | % | 12.25 | % | ||||||||||||||||||||||||||||||||||
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|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||||||||||||||
|
Total expenses |
0.85 | %(d) | 0.87 | % | 0.89 | % | 0.90 | %(d) | 0.88 | % | ||||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
0.84 | %(d) | 0.86 | % | 0.89 | % | 0.90 | %(d) | 0.88 | % | ||||||||||||||||||||||||||||||||||
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|
Net investment income |
0.45 | %(d) | 0.40 | % | 0.27 | % | 0.25 | %(d) | 0.09 | % | ||||||||||||||||||||||||||||||||||
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|
Supplemental Data |
||||||||||||||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 3,095,352 | $ | 2,944,146 | $ | 2,190,418 | $ | 1,544,880 | $ | 1,513,269 | ||||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||||||||||||||
|
Portfolio turnover rate |
41 | % | 39 | % | 39 | % | 50 | % | 50 | % | ||||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||||||||||||||
| (a) |
Based on average shares outstanding. |
| (b) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) |
Where applicable, assumes the reinvestment of distributions. |
| (d) |
Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Investments in underlying funds |
0.01 | % | — | — | 0.01 | % | — | |||||||||||||
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 57 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Health Sciences Opportunities Portfolio (continued) | ||||||||||||||||||||||||||||||||||||
| Service | ||||||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 64.73 | $ | 54.90 | $ | 48.39 | $ | 50.77 | $ | 48.51 | ||||||||||||||||||||||||||
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|||||||||||||||||||||||||||
|
Net investment income (loss)(a) |
0.08 | 0.05 | (0.01 | ) | (0.01 | ) | (0.10 | ) | ||||||||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
(1.57 | ) | 11.67 | 7.60 | 3.74 | 5.79 | ||||||||||||||||||||||||||||||
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|
Net increase (decrease) from investment operations |
(1.49 | ) | 11.72 | 7.59 | 3.73 | 5.69 | ||||||||||||||||||||||||||||||
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Distributions(b) |
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|
From net investment income |
(0.05 | ) | — | — | (0.67 | ) | (0.01 | ) | ||||||||||||||||||||||||||||
|
From net realized gain |
(4.53 | ) | (1.89 | ) | (1.08 | ) | (5.44 | ) | (3.42 | ) | ||||||||||||||||||||||||||
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|||||||||||||||||||||||||||
|
Total distributions |
(4.58 | ) | (1.89 | ) | (1.08 | ) | (6.11 | ) | (3.43 | ) | ||||||||||||||||||||||||||
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|
Net asset value, end of year |
$ | 58.66 | $ | 64.73 | $ | 54.90 | $ | 48.39 | $ | 50.77 | ||||||||||||||||||||||||||
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|||||||||||||||||||||||||||
|
Total Return(c) |
||||||||||||||||||||||||||||||||||||
|
Based on net asset value |
(2.16 | )% | 22.10 | % | 16.20 | % | 7.69 | % | 11.95 | % | ||||||||||||||||||||||||||
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|||||||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||||||
|
Total expenses |
1.15 | %(d) | 1.17 | % | 1.17 | % | 1.17 | %(d) | 1.16 | % | ||||||||||||||||||||||||||
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|
Total expenses after fees waived and/or reimbursed and paid indirectly |
1.15 | %(d) | 1.16 | % | 1.17 | % | 1.17 | %(d) | 1.15 | % | ||||||||||||||||||||||||||
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|
Net investment income (loss) |
0.14 | %(d) | 0.10 | % | (0.02 | )% | (0.03 | )%(d) | (0.19 | )% | ||||||||||||||||||||||||||
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|||||||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 34,708 | $ | 39,325 | $ | 33,231 | $ | 31,917 | $ | 35,583 | ||||||||||||||||||||||||||
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|||||||||||||||||||||||||||
|
Portfolio turnover rate |
41 | % | 39 | % | 39 | % | 50 | % | 50 | % | ||||||||||||||||||||||||||
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|||||||||||||||||||||||||||
| (a) |
Based on average shares outstanding. |
| (b) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) |
Where applicable, assumes the reinvestment of distributions. |
| (d) |
Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
| Year Ended September 30, | ||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
|
Investments in underlying funds |
0.01 | % | — | — | 0.01 | % | — | |||||||||||||||||
See notes to financial statements.
| 58 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Health Sciences Opportunities Portfolio (continued) | ||||||||||||||||||||||||||||||||||||
| Investor A | ||||||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 64.50 | $ | 54.70 | $ | 48.22 | $ | 50.61 | $ | 48.38 | ||||||||||||||||||||||||||
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|
|||||||||||||||||||||||||||
|
Net investment income (loss)(a) |
0.10 | 0.06 | (0.01 | ) | (0.01 | ) | (0.10 | ) | ||||||||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
(1.56 | ) | 11.63 | 7.57 | 3.73 | 5.77 | ||||||||||||||||||||||||||||||
|
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|
|
|||||||||||||||||||||||||||
|
Net increase (decrease) from investment operations |
(1.46 | ) | 11.69 | 7.56 | 3.72 | 5.67 | ||||||||||||||||||||||||||||||
|
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|||||||||||||||||||||||||||
|
Distributions(b) |
||||||||||||||||||||||||||||||||||||
|
From net investment income |
(0.06 | ) | — | — | (0.67 | ) | (0.02 | ) | ||||||||||||||||||||||||||||
|
From net realized gain |
(4.53 | ) | (1.89 | ) | (1.08 | ) | (5.44 | ) | (3.42 | ) | ||||||||||||||||||||||||||
|
|
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|
|||||||||||||||||||||||||||
|
Total distributions |
(4.59 | ) | (1.89 | ) | (1.08 | ) | (6.11 | ) | (3.44 | ) | ||||||||||||||||||||||||||
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|
|||||||||||||||||||||||||||
|
Net asset value, end of year |
$ | 58.45 | $ | 64.50 | $ | 54.70 | $ | 48.22 | $ | 50.61 | ||||||||||||||||||||||||||
|
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|
|||||||||||||||||||||||||||
|
Total Return(c) |
||||||||||||||||||||||||||||||||||||
|
Based on net asset value |
(2.11 | )% | 22.13 | % | 16.20 | % | 7.70 | % | 11.94 | % | ||||||||||||||||||||||||||
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|||||||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||||||
|
Total expenses |
1.12 | %(d) | 1.15 | % | 1.17 | % | 1.18 | %(d) | 1.16 | % | ||||||||||||||||||||||||||
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|
|||||||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
1.12 | %(d) | 1.14 | % | 1.17 | % | 1.18 | %(d) | 1.15 | % | ||||||||||||||||||||||||||
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|
|||||||||||||||||||||||||||
|
Net investment income (loss) |
0.17 | %(d) | 0.11 | % | (0.02 | )% | (0.03 | )%(d) | (0.19 | )% | ||||||||||||||||||||||||||
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|
|||||||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 2,598,888 | $ | 2,767,303 | $ | 2,597,901 | $ | 2,701,948 | $ | 2,827,428 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Portfolio turnover rate |
41 | % | 39 | % | 39 | % | 50 | % | 50 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| (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 the effects of any sales charges and assumes the reinvestment of distributions. |
| (d) |
Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Investments in underlying funds |
0.01 | % | — | — | 0.01 | % | — | |||||||||||||
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 59 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Health Sciences Opportunities Portfolio (continued) | ||||||||||||||||||||||||||||||||||||
| Investor C | ||||||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 56.55 | $ | 48.54 | $ | 43.22 | $ | 46.05 | $ | 44.36 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Net investment loss(a) |
(0.28 | ) | (0.30 | ) | (0.33 | ) | (0.32 | ) | (0.45 | ) | ||||||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
(1.38 | ) | 10.20 | 6.73 | 3.37 | 5.31 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Net increase (decrease) from investment operations |
(1.66 | ) | 9.90 | 6.40 | 3.05 | 4.86 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Distributions(b) |
||||||||||||||||||||||||||||||||||||
|
From net investment income |
— | — | — | (0.44 | ) | — | ||||||||||||||||||||||||||||||
|
From net realized gain |
(4.15 | ) | (1.89 | ) | (1.08 | ) | (5.44 | ) | (3.17 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Total distributions |
(4.15 | ) | (1.89 | ) | (1.08 | ) | (5.88 | ) | (3.17 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Net asset value, end of year |
$ | 50.74 | $ | 56.55 | $ | 48.54 | $ | 43.22 | $ | 46.05 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Total Return(c) |
||||||||||||||||||||||||||||||||||||
|
Based on net asset value |
(2.82 | )% | 21.22 | % | 15.37 | % | 6.92 | % | 11.14 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||||||
|
Total expenses |
1.85 | %(d) | 1.87 | % | 1.90 | % | 1.90 | %(d) | 1.88 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
1.85 | %(d) | 1.87 | % | 1.90 | % | 1.90 | %(d) | 1.87 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Net investment loss |
(0.56 | )%(d) | (0.61 | )% | (0.75 | )% | (0.75 | )%(d) | (0.90 | )% | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 745,636 | $ | 1,017,205 | $ | 954,780 | $ | 1,130,051 | $ | 1,167,437 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Portfolio turnover rate |
41 | % | 39 | % | 39 | % | 50 | % | 50 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
| (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 the effects of any sales charges and assumes the reinvestment of distributions. |
| (d) |
Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Investments in underlying funds |
0.01 | % | — | — | 0.01 | % | — | |||||||||||||
See notes to financial statements.
| 60 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Health Sciences Opportunities Portfolio (continued) | ||||||||||||||||||||||||
| Class K | ||||||||||||||||||||||||
| Year Ended September 30, |
Period from
06/08/2016(a) 09/30/2016 |
|||||||||||||||||||||||
| 2019 | 2018 | 2017 | ||||||||||||||||||||||
|
Net asset value, beginning of period |
$ | 67.75 | $ | 57.37 | $ | 50.32 | $ | 49.82 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Net investment income(b) |
0.34 | 0.32 | 0.26 | 0.09 | ||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
(1.65 | ) | 12.17 | 7.87 | 0.41 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Net increase (decrease) from investment operations |
(1.31 | ) | 12.49 | 8.13 | 0.50 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Distributions(c) |
||||||||||||||||||||||||
|
From net investment income |
(0.28 | ) | (0.10 | ) | — | — | ||||||||||||||||||
|
From net realized gain |
(4.53 | ) | (2.01 | ) | (1.08 | ) | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Total distributions |
(4.81 | ) | (2.11 | ) | (1.08 | ) | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Net asset value, end of period |
$ | 61.63 | $ | 67.75 | $ | 57.37 | $ | 50.32 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Total Return(d) |
||||||||||||||||||||||||
|
Based on net asset value |
(1.75 | )% | 22.58 | % | 16.67 | % | 1.00 | %(e) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||
|
Total expenses |
0.75 | %(f) | 0.77 | % | 0.78 | % | 0.82 | %(f) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Total expenses after fees waived and/or reimbursed |
0.75 | %(f) | 0.76 | % | 0.78 | % | 0.82 | %(f) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Net investment income |
0.55 | %(f) | 0.53 | % | 0.47 | % | 0.54 | %(f) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||
|
Net assets, end of period (000) |
$ | 171,517 | $ | 130,129 | $ | 48,253 | $ | 2,495 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Portfolio turnover rate |
41 | % | 39 | % | 39 | % | 50 | %(g) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
(a) Commencement of operations. (b) Based on average shares outstanding. (c) Distributions for annual periods determined in accordance with U.S. federal income tax regulations. (d) Where applicable, assumes the reinvestment of distributions. (e) Aggregate total return. (f) Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
|
|||||||||||||||||||||||
| Year Ended September 30, |
Period
from
06/08/2016(a) 09/30/2016 |
|||||||||||||||||||||||
| 2019 | 2018 | 2017 | ||||||||||||||||||||||
|
Investments in underlying funds |
0.01 | % | — | — | 0.01 | % | ||||||||||||||||||
| (g) |
Portfolio turnover is representative of the Fund for the entire year. |
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 61 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Health Sciences Opportunities Portfolio (continued) | ||||||||||||||||||||||||
| Class R | ||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 63.09 | $ | 53.71 | $ | 47.51 | $ | 50.04 | $ | 47.94 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net investment loss(a) |
(0.09 | ) | (0.11 | ) | (0.16 | ) | (0.17 | ) | (0.26 | ) | ||||||||||||||
|
Net realized and unrealized gain (loss) |
(1.53 | ) | 11.38 | 7.44 | 3.68 | 5.72 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net increase (decrease) from investment operations |
(1.62 | ) | 11.27 | 7.28 | 3.51 | 5.46 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Distributions(b) |
||||||||||||||||||||||||
|
From net investment income |
— | — | — | (0.60 | ) | — | ||||||||||||||||||
|
From net realized gain |
(4.42 | ) | (1.89 | ) | (1.08 | ) | (5.44 | ) | (3.36 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Total distributions |
(4.42 | ) | (1.89 | ) | (1.08 | ) | (6.04 | ) | (3.36 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net asset value, end of year |
$ | 57.05 | $ | 63.09 | $ | 53.71 | $ | 47.51 | $ | 50.04 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Total Return(c) |
||||||||||||||||||||||||
|
Based on net asset value |
(2.44 | )% | 21.75 | % | 15.85 | % | 7.33 | % | 11.59 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||
|
Total expenses |
1.45 | %(d) | 1.46 | % | 1.49 | % | 1.51 | %(d) | 1.46 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
1.45 | %(d) | 1.46 | % | 1.49 | % | 1.51 | %(d) | 1.45 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net investment loss |
(0.15 | )%(d) | (0.20 | )% | (0.33 | )% | (0.35 | )%(d) | (0.48 | )% | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 224,862 | $ | 241,495 | $ | 198,426 | $ | 172,640 | $ | 146,562 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Portfolio turnover rate |
41 | % | 39 | % | 39 | % | 50 | % | 50 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| (a) |
Based on average shares outstanding. |
| (b) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) |
Where applicable, assumes the reinvestment of distributions. |
| (d) |
Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Investments in underlying funds |
0.01 | % | — | — | 0.01 | % | — | |||||||||||||
See notes to financial statements.
| 62 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock High Equity Income Fund | ||||||||||||||||||||||||||||||||||||||||
| Institutional | ||||||||||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 28.16 | $ | 27.33 | $ | 37.84 | $ | 37.71 | $ | 42.91 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment income(a) |
1.24 | 1.32 | 0.16 | 0.24 | 0.09 | |||||||||||||||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
(0.73 | ) | 0.75 | 5.09 | 2.81 | 0.89 | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net increase from investment operations |
0.51 | 2.07 | 5.25 | 3.05 | 0.98 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Distributions(b) |
||||||||||||||||||||||||||||||||||||||||
|
From net investment income |
(1.05 | ) | (1.05 | ) | (0.23 | ) | — | — | ||||||||||||||||||||||||||||||||
|
From net realized gains |
(1.05 | ) | (0.19 | ) | (15.53 | ) | (2.92 | ) | (6.18 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total distributions |
(2.10 | ) | (1.24 | ) | (15.76 | ) | (2.92 | ) | (6.18 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net asset value, end of year |
$ | 26.57 | $ | 28.16 | $ | 27.33 | $ | 37.84 | $ | 37.71 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total Return(c) |
||||||||||||||||||||||||||||||||||||||||
|
Based on net asset value |
2.27 | % | 7.81 | % | 15.40 | % | 8.64 | % | 2.21 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||||||||||
|
Total expenses |
1.12 | % | 1.09 | % | 1.19 | % | 1.19 | %(d) | 1.33 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
0.85 | % | 0.85 | % | 0.97 | % | 0.91 | %(d) | 0.91 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment income |
4.80 | % | 4.79 | % | 0.46 | % | 0.67 | %(d) | 0.22 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 151,747 | $ | 248,847 | $ | 462,487 | $ | 686,845 | $ | 768,068 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Portfolio turnover rate |
79 | % | 75 | % | 154 | % | 72 | % | 64 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| (a) |
Based on average shares outstanding. |
| (b) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) |
Where applicable, assumes the reinvestment of distributions. |
| (d) |
Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.01%. |
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 63 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock High Equity Income Fund (continued) | ||||||||||||||||||||||||||||||||||||||||
| Service | ||||||||||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 25.56 | $ | 24.87 | $ | 35.61 | $ | 35.80 | $ | 40.51 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment income (loss)(a) |
1.06 | 1.15 | 0.10 | 0.09 | (0.11 | ) | ||||||||||||||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
(0.66 | ) | 0.67 | 4.73 | 2.64 | 0.89 | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net increase from investment operations |
0.40 | 1.82 | 4.83 | 2.73 | 0.78 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Distributions(b) |
||||||||||||||||||||||||||||||||||||||||
|
From net investment income |
(1.00 | ) | (0.94 | ) | (0.04 | ) | — | — | ||||||||||||||||||||||||||||||||
|
From net realized gains |
(1.05 | ) | (0.19 | ) | (15.53 | ) | (2.92 | ) | (5.49 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total distributions |
(2.05 | ) | (1.13 | ) | (15.57 | ) | (2.92 | ) | (5.49 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net asset value, end of year |
$ | 23.91 | $ | 25.56 | $ | 24.87 | $ | 35.61 | $ | 35.80 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total Return(c) |
||||||||||||||||||||||||||||||||||||||||
|
Based on net asset value |
2.05 | % | 7.54 | % | 15.09 | % | 8.18 | % | 1.80 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||||||||||
|
Total expenses |
1.31 | % | 1.32 | % | 1.37 | %(d) | 1.43 | %(e)(f) | 1.68 | %(e) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
1.10 | % | 1.10 | % | 1.25 | % | 1.31 | %(f) | 1.31 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment income (loss) |
4.56 | % | 4.58 | % | 0.29 | % | 0.27 | %(f) | (0.28 | )% | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 10,024 | $ | 12,348 | $ | 18,087 | $ | 24,305 | $ | 27,489 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Portfolio turnover rate |
79 | % | 75 | % | 154 | % | 72 | % | 64 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| (a) |
Based on average shares outstanding. |
| (b) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) |
Where applicable, assumes the reinvestment of distributions. |
| (d) |
Includes recoupment of past waived and/or reimbursed fees with no financial impact to the expense ratio. |
| (e) |
Includes recoupment of past waived and/or reimbursed fees. Excluding the recoupment of past waived and/or reimbursed fees for the years ended September 30, 2016 and September 30, 2015, the expense ratio would have been 1.30% and 1.67%, respectively. |
| (f) |
Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.01%. |
See notes to financial statements.
| 64 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock High Equity Income Fund (continued) | ||||||||||||||||||||||||||||||||||||||||
| Investor A | ||||||||||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 24.12 | $ | 23.53 | $ | 34.47 | $ | 34.74 | $ | 39.96 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment income (loss)(a) |
1.00 | 1.08 | 0.11 | 0.09 | (0.07 | ) | ||||||||||||||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
(0.64 | ) | 0.65 | 4.54 | 2.56 | 0.85 | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net increase from investment operations |
0.36 | 1.73 | 4.65 | 2.65 | 0.78 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Distributions(b) |
||||||||||||||||||||||||||||||||||||||||
|
From net investment income |
(1.00 | ) | (0.95 | ) | (0.06 | ) | — | — | ||||||||||||||||||||||||||||||||
|
From net realized gains |
(1.05 | ) | (0.19 | ) | (15.53 | ) | (2.92 | ) | (6.00 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total distributions |
(2.05 | ) | (1.14 | ) | (15.59 | ) | (2.92 | ) | (6.00 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net asset value, end of year |
$ | 22.43 | $ | 24.12 | $ | 23.53 | $ | 34.47 | $ | 34.74 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total Return(c) |
||||||||||||||||||||||||||||||||||||||||
|
Based on net asset value |
2.02 | % | 7.58 | % | 15.06 | % | 8.20 | % | 1.82 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||||||||||
|
Total expenses |
1.37 | % | 1.38 | % | 1.45 | % | 1.47 | %(d) | 1.60 | %(e) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
1.10 | % | 1.10 | % | 1.25 | % | 1.31 | %(d) | 1.31 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment income (loss) |
4.55 | % | 4.57 | % | 0.36 | % | 0.27 | %(d) | (0.18 | )% | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 215,121 | $ | 214,095 | $ | 278,649 | $ | 377,271 | $ | 404,123 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Portfolio turnover rate |
79 | % | 75 | % | 154 | % | 72 | % | 64 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| (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 the effects of any sales charges and assumes the reinvestment of distributions. |
| (d) |
Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.01%. |
| (e) |
Includes recoupment of past waived and/or reimbursed fees. Excluding the recoupment of past waived and/or reimbursed fees for the years ended September 30, 2015, the expense ratio would have been 1.59%. |
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 65 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock High Equity Income Fund (continued) | ||||||||||||||||||||||||||||||||||||||||
| Investor C | ||||||||||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 16.19 | $ | 16.13 | $ | 28.15 | $ | 29.10 | $ | 34.43 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment income (loss)(a) |
0.55 | 0.61 | (0.12 | ) | (0.13 | ) | (0.30 | ) | ||||||||||||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
(0.45 | ) | 0.44 | 3.63 | 2.10 | 0.74 | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net increase from investment operations |
0.10 | 1.05 | 3.51 | 1.97 | 0.44 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Distributions(b) |
||||||||||||||||||||||||||||||||||||||||
|
From net investment income |
(0.89 | ) | (0.80 | ) | — | — | — | |||||||||||||||||||||||||||||||||
|
From net realized gain |
(1.05 | ) | (0.19 | ) | (15.53 | ) | (2.92 | ) | (5.77 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total distributions |
(1.94 | ) | (0.99 | ) | (15.53 | ) | (2.92 | ) | (5.77 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net asset value, end of year |
$ | 14.35 | $ | 16.19 | $ | 16.13 | $ | 28.15 | $ | 29.10 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total Return(c) |
||||||||||||||||||||||||||||||||||||||||
|
Based on net asset value |
1.30 | % | 6.75 | % | 14.23 | % | 7.38 | % | 1.03 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||||||||||
|
Total expenses |
2.12 | % | 2.10 | % | 2.18 | % | 2.20 | %(d)(e) | 2.32 | %(d) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
1.85 | % | 1.85 | % | 2.00 | % | 2.05 | %(e) | 2.06 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment income (loss) |
3.84 | % | 3.82 | % | (0.48 | )% | (0.47 | )%(e) | (0.93 | )% | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||||||||||
|
Net assets, end of year(000) |
$ | 36,132 | $ | 93,399 | $ | 123,321 | $ | 173,249 | $ | 198,760 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Portfolio turnover rate |
79 | % | 75 | % | 154 | % | 72 | % | 64 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| (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 the effects of any sales charges and assumes the reinvestment of distributions. |
| (d) |
Includes recoupment of past waived and/or reimbursed fees with no financial impact to the expense ratio. |
| (e) |
Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.01%. |
See notes to financial statements.
| 66 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock International Dividend Fund | ||||||||||||||||||||||||||||||||||||||||
| Institutional | ||||||||||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 29.16 | $ | 31.36 | $ | 33.58 | $ | 31.10 | $ | 38.51 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment income(a) |
0.70 | 0.76 | 0.49 | 0.36 | 0.27 | |||||||||||||||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
0.32 | (1.57 | ) | 2.85 | 2.18 | (3.05 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net increase (decrease) from investment operations |
1.02 | (0.81 | ) | 3.34 | 2.54 | (2.78 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Distributions(b) |
||||||||||||||||||||||||||||||||||||||||
|
From net investment income |
(0.66 | ) | (0.98 | ) | (1.47 | ) | (0.06 | ) | (0.92 | ) | ||||||||||||||||||||||||||||||
|
From net realized gain |
(0.85 | ) | (0.41 | ) | (4.09 | ) | — | (3.71 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total distributions |
(1.51 | ) | (1.39 | ) | (5.56 | ) | (0.06 | ) | (4.63 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net asset value, end of year |
$ | 28.67 | $ | 29.16 | $ | 31.36 | $ | 33.58 | $ | 31.10 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total Return(c) |
||||||||||||||||||||||||||||||||||||||||
|
Based on net asset value |
3.86 | % | (2.67 | )%(d) | 10.61 | % | 8.20 | % | (7.60 | )% | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||||||||||
|
Total expenses |
1.15 | % | 1.14 | % | 1.23 | %(e) | 1.26 | %(e)(f) | 1.27 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
0.84 | % | 0.84 | % | 1.01 | % | 1.06 | %(f) | 1.14 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment income |
2.52 | % | 2.50 | % | 1.51 | % | 1.15 | %(f) | 0.77 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 83,814 | $ | 102,541 | $ | 198,206 | $ | 353,512 | $ | 424,099 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Portfolio turnover rate |
22 | % | 25 | % | 130 | % | 47 | % | 66 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| (a) |
Based on average shares outstanding. |
| (b) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) |
Where applicable, assumes the reinvestment of distributions. |
| (d) |
Includes the litigation settlement amount. Excluding this amount, the Fund’s total return is (2.81)%. |
| (e) |
Includes recoupment of past waived and/or reimbursed fees with no financial impact to the expense ratio. |
| (f) |
Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.01%. |
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 67 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock International Dividend Fund (continued) | ||||||||||||||||||||||||||||||||||||||||
| Service | ||||||||||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 27.68 | $ | 29.76 | $ | 32.05 | $ | 29.72 | $ | 37.01 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment income(a) |
0.59 | 0.65 | 0.35 | 0.23 | 0.17 | |||||||||||||||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
0.31 | (1.49 | ) | 2.75 | 2.10 | (2.93 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net increase (decrease) from investment operations |
0.90 | (0.84 | ) | 3.10 | 2.33 | (2.76 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Distributions(b) |
||||||||||||||||||||||||||||||||||||||||
|
From net investment income |
(0.59 | ) | (0.83 | ) | (1.30 | ) | — | (0.82 | ) | |||||||||||||||||||||||||||||||
|
From net realized gain |
(0.85 | ) | (0.41 | ) | (4.09 | ) | — | (3.71 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total distributions |
(1.44 | ) | (1.24 | ) | (5.39 | ) | — | (4.53 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net asset value, end of year |
$ | 27.14 | $ | 27.68 | $ | 29.76 | $ | 32.05 | $ | 29.72 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total Return(c) |
||||||||||||||||||||||||||||||||||||||||
|
Based on net asset value |
3.62 | % | (2.90 | )%(d) | 10.29 | % | 7.84 | % | (7.86 | )% | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||||||||||
|
Total expenses |
1.33 | %(e) | 1.37 | % | 1.48 | %(e) | 1.54 | %(f)(g) | 1.53 | %(e) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
1.09 | % | 1.09 | % | 1.32 | % | 1.38 | %(f) | 1.42 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment income |
2.25 | % | 2.27 | % | 1.13 | % | 0.76 | %(f) | 0.51 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 3,196 | $ | 4,434 | $ | 7,142 | $ | 12,706 | $ | 19,269 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Portfolio turnover rate |
22 | % | 25 | % | 130 | % | 47 | % | 66 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| (a) |
Based on average shares outstanding. |
| (b) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (c) |
Where applicable, assumes the reinvestment of distributions. |
| (d) |
Includes the litigation settlement amount. Excluding this amount, the Fund’s total return is (3.04)%. |
| (e) |
Includes recoupment of past waived and/or reimbursed fees with no financial impact to the expense ratio. |
| (f) |
Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.01%. |
| (g) |
Includes recoupment of past waived and/or reimbursed fees. Excluding the recoupment of past waived and/or reimbursed fees for the year ended September 30, 2016, the expense ratio would have been 1.53%. |
See notes to financial statements.
| 68 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock International Dividend Fund (continued) | ||||||||||||||||||||||||||||||||||||||||
| Investor A | ||||||||||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 27.26 | $ | 29.30 | $ | 31.68 | $ | 29.38 | $ | 36.64 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment income(a) |
0.60 | 0.61 | 0.37 | 0.24 | 0.15 | |||||||||||||||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
0.27 | (1.43 | ) | 2.69 | 2.06 | (2.88 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net increase (decrease) from investment operations |
0.87 | (0.82 | ) | 3.06 | 2.30 | (2.73 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Distributions(b) |
||||||||||||||||||||||||||||||||||||||||
|
From net investment income |
(0.59 | ) | (0.81 | ) | (1.35 | ) | — | (0.82 | ) | |||||||||||||||||||||||||||||||
|
From net realized gain |
(0.85 | ) | (0.41 | ) | (4.09 | ) | — | (3.71 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total distributions |
(1.44 | ) | (1.22 | ) | (5.44 | ) | — | (4.53 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net asset value, end of year |
$ | 26.69 | $ | 27.26 | $ | 29.30 | $ | 31.68 | $ | 29.38 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total Return(c) |
||||||||||||||||||||||||||||||||||||||||
|
Based on net asset value |
3.57 | % | (2.89 | )%(d) | 10.27 | % | 7.83 | % | (7.87 | )% | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||||||||||
|
Total expenses |
1.43 | % | 1.44 | % | 1.54 | %(e) | 1.57 | %(e)(f) | 1.58 | %(e) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
1.09 | % | 1.09 | % | 1.30 | % | 1.39 | %(f) | 1.46 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment income |
2.30 | % | 2.14 | % | 1.20 | % | 0.81 | %(f) | 0.44 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 125,196 | $ | 140,473 | $ | 325,103 | $ | 350,855 | $ | 415,805 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Portfolio turnover rate |
22 | % | 25 | % | 130 | % | 47 | % | 66 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| (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 the effects of any sales charges and assumes the reinvestment of distributions. |
| (d) |
Includes the litigation settlement amount. Excluding this amount, the Fund’s total return is (3.03)%. |
| (e) |
Includes recoupment of past waived and/or reimbursed fees with no financial impact to the expense ratios. |
| (f) |
Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.01%. |
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 69 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock International Dividend Fund (continued) | ||||||||||||||||||||||||||||||||||||||||
| Investor C | ||||||||||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 23.94 | $ | 25.81 | $ | 28.39 | $ | 26.52 | $ | 33.56 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment income (loss)(a) |
0.32 | 0.39 | 0.12 | 0.02 | (0.07 | ) | ||||||||||||||||||||||||||||||||||
|
Net realized and unrealized gain (loss) |
0.26 | (1.30 | ) | 2.42 | 1.85 | (2.63 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net increase (decrease) from investment operations |
0.58 | (0.91 | ) | 2.54 | 1.87 | (2.70 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Distributions(b) |
||||||||||||||||||||||||||||||||||||||||
|
From net investment income |
(0.42 | ) | (0.55 | ) | (1.03 | ) | — | (0.63 | ) | |||||||||||||||||||||||||||||||
|
From net realized gain |
(0.85 | ) | (0.41 | ) | (4.09 | ) | — | (3.71 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total distributions |
(1.27 | ) | (0.96 | ) | (5.12 | ) | — | (4.34 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net asset value, end of year |
$ | 23.25 | $ | 23.94 | $ | 25.81 | $ | 28.39 | $ | 26.52 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total Return(c) |
||||||||||||||||||||||||||||||||||||||||
|
Based on net asset value |
2.80 | % | (3.63 | )%(d) | 9.46 | % | 7.05 | % | (8.56 | )% | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||||||||||
|
Total expenses |
2.20 | % | 2.19 | % | 2.30 | %(e) | 2.35 | %(e)(f) | 2.32 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
1.84 | % | 1.84 | % | 2.05 | % | 2.13 | %(f) | 2.20 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment income (loss) |
1.39 | % | 1.57 | % | 0.44 | % | 0.07 | %(f) | (0.24 | )% | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 14,805 | $ | 36,239 | $ | 53,884 | $ | 76,630 | $ | 96,334 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Portfolio turnover rate |
22 | % | 25 | % | 130 | % | 47 | % | 66 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| (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 the effects of any sales charges and assumes the reinvestment of distributions. |
| (d) |
Includes the litigation settlement amount. Excluding this amount, the Fund’s total return is (3.79)%. |
| (e) |
Includes recoupment of past waived and/or reimbursed fees with no financial impact to the expense ratios. |
| (f) |
Ratios do not include expenses incurred indirectly as a result of investments in underlying funds of approximately 0.01%. |
See notes to financial statements.
| 70 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock International Dividend Fund (continued) | ||||||||||||||||
| Class K | ||||||||||||||||
|
|
Year Ended
09/30/19 |
|
Period from
01/25/2018(a) to 09/30/2018 |
|||||||||||||
|
Net asset value, beginning of period |
$ | 29.17 | $ | 32.08 | ||||||||||||
|
|
|
|
|
|||||||||||||
|
Net investment income(b) |
0.73 | 0.56 | ||||||||||||||
|
Net realized and unrealized gain (loss) |
0.30 | (2.91 | ) | |||||||||||||
|
|
|
|
|
|||||||||||||
|
Net increase (decrease) from investment operations |
1.03 | (2.35 | ) | |||||||||||||
|
|
|
|
|
|||||||||||||
|
Distributions(c) |
||||||||||||||||
|
From net investment income |
(0.67 | ) | (0.56 | ) | ||||||||||||
|
From net realized gain |
(0.85 | ) | — | |||||||||||||
|
|
|
|
|
|||||||||||||
|
Total distributions |
(1.52 | ) | (0.56 | ) | ||||||||||||
|
|
|
|
|
|||||||||||||
|
Net asset value, end of period |
$ | 28.68 | $ | 29.17 | ||||||||||||
|
|
|
|
|
|||||||||||||
|
Total Return(d) |
||||||||||||||||
|
Based on net asset value |
3.92 | % | (7.33 | )%(e)(f) | ||||||||||||
|
|
|
|
|
|||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||
|
Total expenses |
1.04 | % | 1.02 | %(g)(h) | ||||||||||||
|
|
|
|
|
|||||||||||||
|
Total expenses after fees waived and/or reimbursed |
0.79 | % | 0.79 | %(h) | ||||||||||||
|
|
|
|
|
|||||||||||||
|
Net investment income |
2.63 | % | 2.81 | %(h) | ||||||||||||
|
|
|
|
|
|||||||||||||
|
Supplemental Data |
||||||||||||||||
|
Net assets, end of period (000) |
$ | 3,847 | $ | 3,659 | ||||||||||||
|
|
|
|
|
|||||||||||||
|
Portfolio turnover rate |
22 | % | 25 | %(i) | ||||||||||||
|
|
|
|
|
|||||||||||||
| (a) |
Commencement of operations. |
| (b) |
Based on average shares outstanding. |
| (c) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
| (d) |
Where applicable, assumes the reinvestment of distributions. |
| (e) |
Includes the litigation settlement amount. Excluding this amount, the Fund’s total return is (7.45)%. |
| (f) |
Aggregate total return. |
| (g) |
Offering and board realignment consolidation costs were not annualized in the calculation of the expense ratio. If these expenses were annualized, the total expense ratio would have been 1.03%. |
| (h) |
Annualized. |
| (i) |
Portfolio turnover is representative of the Fund for the entire year. |
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 71 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Technology Opportunities Fund | ||||||||||||||||||||||||||||||||||||||
| Institutional | ||||||||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 31.83 | $ | 25.64 | $ | 19.18 | $ | 15.61 | $ | 14.37 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Net investment loss(a) |
(0.10 | ) | (0.09 | ) | (0.12 | ) | (0.08 | ) | (0.09 | ) | ||||||||||||||||||||||||||||
|
Net realized and unrealized gain |
1.20 | 8.25 | 6.78 | 3.65 | 1.33 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Net increase from investment operations |
1.10 | 8.16 | 6.66 | 3.57 | 1.24 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Distributions from net realized gain |
(0.30 | ) | (1.97 | ) | (0.20 | ) | — | — | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Net asset value, end of year |
$ | 32.63 | $ | 31.83 | $ | 25.64 | $ | 19.18 | $ | 15.61 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Total Return(b) |
||||||||||||||||||||||||||||||||||||||
|
Based on net asset value |
3.63 | % | 34.02 | % | 35.13 | % | 22.87 | % | 8.63 | % | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||||||||
|
Total expenses |
1.02 | %(c) | 1.10 | %(c) | 1.22 | %(d) | 1.27 | % | 1.31 | %(d) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
0.92 | %(c) | 0.99 | %(c) | 1.21 | % | 1.23 | % | 1.27 | % | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Net investment loss |
(0.32 | )%(c) | (0.32 | )%(c) | (0.54 | )% | (0.49 | )% | (0.58 | )% | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 1,033,286 | $ | 584,654 | $ | 147,796 | $ | 78,179 | $ | 57,306 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Portfolio turnover rate |
33 | % | 49 | % | 51 | % | 84 | % | 78 | % | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
| (a) |
Based on average shares outstanding. |
| (b) |
Where applicable, assumes the reinvestment of distributions. |
| (c) |
Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Investments in underlying funds |
0.01 | % | 0.01 | % | — | — | — | |||||||||||||
| (d) |
Includes recoupment of past waived and/or reimbursed fees with no financial impact to the expense ratio. |
See notes to financial statements.
| 72 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Technology Opportunities Fund (continued) | ||||||||||||||||||||||||||||||||||||||||
| Service | ||||||||||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 30.22 | $ | 24.44 | $ | 18.34 | $ | 14.96 | $ | 13.80 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment loss(a) |
(0.17 | ) | (0.15 | ) | (0.16 | ) | (0.12 | ) | (0.12 | ) | ||||||||||||||||||||||||||||||
|
Net realized and unrealized gain |
1.13 | 7.85 | 6.46 | 3.50 | 1.28 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net increase from investment operations |
0.96 | 7.70 | 6.30 | 3.38 | 1.16 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Distributions from net realized gain |
(0.30 | ) | (1.92 | ) | (0.20 | ) | — | — | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net asset value, end of year |
$ | 30.88 | $ | 30.22 | $ | 24.44 | $ | 18.34 | $ | 14.96 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total Return(b) |
||||||||||||||||||||||||||||||||||||||||
|
Based on net asset value |
3.36 | % | 33.74 | % | 34.77 | % | 22.59 | % | 8.41 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||||||||||
|
Total expenses |
1.25 | %(c)(d) | 1.37 | %(d) | 1.48 | %(c) | 1.49 | % | 1.48 | %(e) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
1.17 | %(d) | 1.22 | %(d) | 1.47 | % | 1.49 | % | 1.48 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment loss |
(0.57 | )%(d) | (0.55 | )%(d) | (0.77 | )% | (0.74 | )% | (0.77 | )% | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 20,429 | $ | 15,208 | $ | 6,312 | $ | 2,583 | $ | 1,527 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Portfolio turnover rate |
33 | % | 49 | % | 51 | % | 84 | % | 78 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| (a) |
Based on average shares outstanding. |
| (b) |
Where applicable, assumes the reinvestment of distributions. |
| (c) |
Includes recoupment of past waived and/or reimbursed fees with no financial impact to the expense ratio. |
| (d) |
Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Investments in underlying funds |
0.01 | % | 0.01 | % | — | — | — | |||||||||||||
| (e) |
Includes recoupment of past waived and/or reimbursed fees. Excluding the recoupment of past waived and/or reimbursed fees for the year ended September 30, 2015, the expense ratio would have been 1.45%. |
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 73 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Technology Opportunities Fund (continued) | ||||||||||||||||||||||||||||||||||||||||
| Investor A | ||||||||||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 29.58 | $ | 23.95 | $ | 17.98 | $ | 14.68 | $ | 13.55 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment loss(a) |
(0.17 | ) | (0.16 | ) | (0.17 | ) | (0.13 | ) | (0.13 | ) | ||||||||||||||||||||||||||||||
|
Net realized and unrealized gain |
1.11 | 7.69 | 6.34 | 3.43 | 1.26 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net increase from investment operations |
0.94 | 7.53 | 6.17 | 3.30 | 1.13 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Distributions from net realized gain |
(0.30 | ) | (1.90 | ) | (0.20 | ) | — | — | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net asset value, end of year |
$ | 30.22 | $ | 29.58 | $ | 23.95 | $ | 17.98 | $ | 14.68 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total Return(b) |
||||||||||||||||||||||||||||||||||||||||
|
Based on net asset value |
3.36 | % | 33.70 | % | 34.74 | % | 22.48 | % | 8.34 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||||||||||
|
Total expenses |
1.29 | %(c) | 1.38 | %(c)(d) | 1.50 | % | 1.56 | %(d) | 1.60 | %(d) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
1.17 | %(c) | 1.26 | %(c) | 1.49 | % | 1.55 | % | 1.59 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment loss |
(0.58 | )%(c) | (0.59 | )%(c) | (0.83 | )% | (0.81 | )% | (0.90 | )% | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 672,110 | $ | 627,626 | $ | 271,307 | $ | 180,658 | $ | 140,951 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Portfolio turnover rate |
33 | % | 49 | % | 51 | % | 84 | % | 78 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| (a) |
Based on average shares outstanding. |
| (b) |
Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
| (c) |
Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Investments in underlying funds |
0.01 | % | 0.01 | % | — | — | — | |||||||||||||
| (d) |
Includes recoupment of past waived and/or reimbursed fees. Excluding the recoupment of past waived and/or reimbursed fees, the expense ratios were as follows: |
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Expense ratios |
N/A | 1.37 | % | N/A | 1.55 | % | 1.57 | % | ||||||||||||
See notes to financial statements.
| 74 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Technology Opportunities Fund (continued) | ||||||||||||||||||||||||||||||||||||||||
| Investor C | ||||||||||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 25.13 | $ | 20.72 | $ | 15.70 | $ | 12.92 | $ | 12.03 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment loss(a) |
(0.32 | ) | (0.31 | ) | (0.28 | ) | (0.22 | ) | (0.23 | ) | ||||||||||||||||||||||||||||||
|
Net realized and unrealized gain |
0.92 | 6.57 | 5.50 | 3.00 | 1.12 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net increase from investment operations |
0.60 | 6.26 | 5.22 | 2.78 | 0.89 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Distribution from net realized gain |
(0.30 | ) | (1.85 | ) | (0.20 | ) | — | — | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net asset value, end of year |
$ | 25.43 | $ | 25.13 | $ | 20.72 | $ | 15.70 | $ | 12.92 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total Return(b) |
||||||||||||||||||||||||||||||||||||||||
|
Based on net asset value |
2.60 | % | 32.68 | % | 33.73 | % | 21.52 | % | 7.40 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||||||||||
|
Total expenses |
2.02 | %(c) | 2.10 | %(c)(d) | 2.27 | % | 2.35 | % | 2.40 | %(d) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
1.92 | %(c) | 2.01 | %(c) | 2.25 | % | 2.35 | % | 2.40 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment loss |
(1.33 | )%(c) | (1.34 | )%(c) | (1.59 | )% | (1.61 | )% | (1.71 | )% | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 152,505 | $ | 142,942 | $ | 76,957 | $ | 56,707 | $ | 41,989 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Portfolio turnover rate |
33 | % | 49 | % | 51 | % | 84 | % | 78 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| (a) |
Based on average shares outstanding. |
| (b) |
Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
| (c) |
Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Investments in underlying funds |
0.01 | % | 0.01 | % | — | — | — | |||||||||||||
| (d) |
Includes recoupment of past waived and/or reimbursed fees. Excluding the recoupment of past waived and/or reimbursed fees, the expense ratios were as follows: |
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Expense ratios |
N/A | 2.09 | % | N/A | N/A | 2.39 | % | |||||||||||||
See notes to financial statements.
| F I N A N C I A L H I G H L I G H T S | 75 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
| BlackRock Technology Opportunities Fund (continued) | ||||||||||||||||||||||||||||||||||||||||
| Class R | ||||||||||||||||||||||||||||||||||||||||
| Year Ended September 30, | ||||||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||||||||
|
Net asset value, beginning of year |
$ | 29.90 | $ | 24.20 | $ | 18.21 | $ | 14.92 | $ | 13.81 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment loss(a) |
(0.24 | ) | (0.23 | ) | (0.23 | ) | (0.17 | ) | (0.18 | ) | ||||||||||||||||||||||||||||||
|
Net realized and unrealized gain |
1.12 | 7.78 | 6.42 | 3.46 | 1.29 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net increase from investment operations |
0.88 | 7.55 | 6.19 | 3.29 | 1.11 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Distributions from net realized gain |
(0.30 | ) | (1.85 | ) | (0.20 | ) | — | — | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net asset value, end of year |
$ | 30.48 | $ | 29.90 | $ | 24.20 | $ | 18.21 | $ | 14.92 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total Return(b) |
||||||||||||||||||||||||||||||||||||||||
|
Based on net asset value |
3.12 | % | 33.35 | % | 34.41 | % | 22.05 | % | 8.04 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Ratios to Average Net Assets |
||||||||||||||||||||||||||||||||||||||||
|
Total expenses |
1.60 | %(c) | 1.69 | %(c) | 1.81 | % | 1.85 | %(d) | 1.86 | %(d) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Total expenses after fees waived and/or reimbursed and paid indirectly |
1.42 | %(c) | 1.53 | %(c) | 1.77 | % | 1.83 | % | 1.85 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Net investment loss |
(0.83 | )%(c) | (0.87 | )%(c) | (1.11 | )% | (1.09 | )% | (1.16 | )% | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Supplemental Data |
||||||||||||||||||||||||||||||||||||||||
|
Net assets, end of year (000) |
$ | 18,799 | $ | 13,577 | $ | 9,700 | $ | 6,054 | $ | 5,060 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Portfolio turnover rate |
33 | % | 49 | % | 51 | % | 84 | % | 78 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| (a) |
Based on average shares outstanding. |
| (b) |
Where applicable, assumes the reinvestment of distributions. |
| (c) |
Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Investments in underlying funds |
0.01 | % | 0.01 | % | — | — | — | |||||||||||||
| (d) |
Includes recoupment of past waived and/or reimbursed fees. Excluding the recoupment of past waived and/or reimbursed fees, the expense ratios were as follows: |
| Year Ended September 30, | ||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
|
Expense ratios |
N/A | N/A | N/A | 1.84 | % | 1.83 | % | |||||||||||||
See notes to financial statements.
| 76 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
| 1. |
ORGANIZATION |
BlackRock FundsSM (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust is organized as a Massachusetts business trust. The following, each of which is a series of the Trust, are referred to herein collectively as the “Funds” or individually, as a “Fund”:
|
|
||||
| Fund Name | Herein Referred To As | Diversification Classification | ||
|
|
||||
|
BlackRock Advantage International Fund |
Advantage International | Diversified | ||
|
BlackRock Health Sciences Opportunities Portfolio |
Health Sciences Opportunities | Diversified | ||
|
BlackRock High Equity Income Fund. |
High Equity Income | Diversified | ||
|
BlackRock International Dividend Fund |
International Dividend | Diversified | ||
|
BlackRock Technology Opportunities Fund |
Technology Opportunities | Diversified | ||
|
|
||||
Each Fund offers multiple classes of shares. All classes of shares have identical voting, dividend, liquidation and other rights and are subject to the same terms and conditions, except that certain classes bear expenses related to the shareholder servicing and distribution of such shares. Institutional, Service and Class K Shares are sold without a sales charge and only to certain eligible investors. Investor A Shares are generally sold with an initial sales charge, and may be subject to a contingent deferred sales charge (“CDSC”) for certain redemptions where no initial sales charge was paid at the time of purchase. Investor C Shares may be subject to a 1.00% CDSC if redeemed within one year of purchase. Class R Shares are sold without a sales charge and only to certain employer-sponsored retirement plans. Service, Investor A, Investor C and Class R Shares bear certain expenses related to shareholder servicing of such shares, and Investor C and Class R Shares also bear certain expenses related to the distribution of such shares. Investor A and Investor C Shares are generally available through financial intermediaries. Effective November 8, 2018, the Funds adopted an automatic conversion feature whereby Investor C Shares held for approximately ten years will be automatically converted into Investor A Shares. Each class has exclusive voting rights with respect to matters relating to its shareholder servicing and distribution expenditures (except that Investor C shareholders may vote on material changes to the Investor A Shares distribution and service plan).
|
|
||||||||
| Share Class | Initial Sales Charge | CDSC | Conversion Privilege | |||||
|
|
||||||||
|
Institutional, Service, Class K and Class R Shares |
No | No | None | |||||
|
Investor A Shares |
Yes | No | (a) | None | ||||
|
Investor C Shares |
No | Yes | To Investor A Shares after approximately 10 years | |||||
|
|
||||||||
| (a) |
Investor A Shares may be subject to a CDSC for certain redemptions where no initial sales charge was paid at the time of purchase. |
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 equity, multi-asset, index and money market funds referred to as the BlackRock Multi-Asset Complex.
Reorganization: The Board of Trustees of the Trust (the “Board”) and the Board of Trustees of State Farm Mutual Fund Trust and shareholders of State Farm International Equity Fund (the “Target Fund”) approved the reorganization of the Target Fund into Advantage International. As a result, Advantage International acquired all of the assets and assumed certain of the liabilities of the Target Fund in exchange for an equal aggregate value of newly-issued shares of Advantage International.
Each shareholder of the Target Fund received shares of Advantage International in an amount equal to the aggregate net asset value (“NAV”) of the shareholder’s Target Fund shares, as determined at the close of business on November 16, 2018, less the costs of the Target Fund’s reorganization.
The reorganization was accomplished by a tax-free exchange of shares of Advantage International in the following amounts and at the following conversion ratios:
|
|
||||||||||||||||
|
Target Fund’s Share Class |
Shares Prior to Reorganization |
Conversion Ratio |
Advantage International’s Share Class |
Shares of Advantage International |
||||||||||||
|
|
||||||||||||||||
|
Class A |
2,038,749 | 0.72388825 | Investor A | 1,475,826 | ||||||||||||
|
Class B |
30,592 | 0.72323294 | Investor A | 22,125 | ||||||||||||
|
Class Institutional |
1,548,107 | 0.72329278 | Institutional | 1,119,735 | ||||||||||||
|
Class R-1 |
71,547 | 0.71993693 | Investor A | 51,509 | ||||||||||||
|
Class R-2 |
324,627 | 0.72254519 | Investor A | 234,558 | ||||||||||||
|
Class R-3 |
99,013 | 0.72435088 | Institutional | 71,720 | ||||||||||||
|
Legacy Class B |
19,795 | 0.74049155 | Investor A | 14,658 | ||||||||||||
|
Premier |
2,955,714 | 0.73171950 | Investor A | 2,162,754 | ||||||||||||
|
|
||||||||||||||||
The Target Fund’s net assets and composition of net assets on November 16, 2018, the valuation date of the reorganization, were as follows:
|
|
||||
| Target Fund | ||||
|
|
||||
|
Net assets |
$ | 79,635,612 | ||
|
Paid-in capital |
80,326,765 | |||
|
Accumulated loss |
(691,153 | ) | ||
|
|
||||
For financial reporting purposes, assets received and shares issued by Advantage International were recorded at fair value. However, the cost basis of the investments received from the Target Fund was carried forward to align ongoing reporting of Advantage International’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.
| N O T E S T O F I N A N C I A L S | 77 |
Notes to Financial Statements (continued)
The net assets of Advantage International before the reorganization were $702,389,703. The aggregate net assets of Advantage International immediately after the reorganization amounted to $782,025,315. The Target Fund’s fair value and cost of investments prior to the reorganization were as follows:
|
|
||||||||
| Target Fund |
Fair Value of Investments |
Cost of Investments |
||||||
|
|
||||||||
|
State Farm International Equity Fund |
$ | 77,948,036 | $ | 77,740,666 | ||||
|
|
||||||||
The purpose of the transaction was to combine the assets of the Target Fund with the assets of Advantage International. The reorganization was a tax-free event and was effective on November 19, 2018.
Assuming the reorganization had been completed on October 1, 2018, the beginning of the fiscal reporting period of Advantage International, the pro forma results of operations for the year ended September 30, 2019, are as follows:
| • |
Net investment income: $21,454,038. |
| • |
Net realized and change in unrealized loss on investments: $(41,599,331). |
| • |
Net decrease in net assets resulting from operations: $(20,145,293). |
Because the combined investment portfolios have been managed as a single integrated portfolio since the reorganization was completed, it is not practicable to separate the amounts of revenue and earnings of the Target Fund that have been included in Advantage International’s Statement of Operations since November 19, 2018.
Reorganization costs incurred by Advantage International in connection with the reorganization were expensed by Advantage International. The Manager reimbursed Advantage International $123,081, which is included in fees waived and/or reimbursed by the Manager in the Statements of Operations.
| 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 executed. 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. Income, expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.
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., futures contracts, forward foreign currency exchange contracts and options written) 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. Doing so allows the investment 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: Distributions paid by the Funds are recorded on the ex-dividend date. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.
Offering Costs: Offering costs are amortized over a 12-month period beginning with the commencement of operations of a class of shares.
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 or its classes are charged to that Fund or the applicable class. 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. Expenses directly related to the Funds and other shared expenses prorated to the Funds are allocated daily to each class based on their relative net assets or other appropriate methods.
| 78 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
The Funds have an arrangement with their custodian whereby credits are earned on uninvested cash balances, which could be used to reduce custody fees and/or overdraft charges. The Funds 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 Board of Trustees of each Fund (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.
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. |
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 and 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.
| • |
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. |
| • |
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 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. |
| • |
Equity-Linked Notes are valued utilizing quotes received daily by the Funds’ pricing service or through brokers. The Funds’ pricing service utilizes models that incorporate a number of market data factors, such as historical and forecasted discrete dividend information and historical values of the underlying reference instruments. |
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 pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.
For investments in equity or debt issued by privately held companies or funds (“Private Company” or collectively, the “Private Companies”) and other Fair Valued Investments, the fair valuation approaches that are used by the Global Valuation Committee and 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. | |||
| N O T E S T O F I N A N C I A L S | 79 |
Notes to Financial Statements (continued)
|
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 statement 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) |
| • |
Level 3 — Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Global Valuation Committee’s 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. 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 September 30, 2019, certain investments of the Funds were valued using NAV per share as no quoted market value was available and therefore have been excluded from the fair value hierarchy.
| 4. |
SECURITIES AND OTHER INVESTMENTS |
Equity-Linked Notes: Equity-linked notes seek to generate income and provide exposure to the performance of an underlying security, group of securities or exchange-traded funds (the “underlying reference instrument”). In an equity-linked note, a fund purchases a note from a bank or broker-dealer and in return, the issuer provides for interest payments during the term of the note. At maturity or when the security is sold, a fund will either settle by taking physical delivery of the underlying reference instrument or by receipt of a cash settlement amount equal to the value of the note at termination or maturity. The use of equity-linked notes involves the risk that the value of the note changes unfavorably due to movements in the value of the underlying reference instrument. Equity-linked notes are considered general unsecured contractual obligations of the bank or broker-dealer. A fund must rely on the creditworthiness of the issuer for its investment returns.
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.
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 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.
| 80 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
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:
| Advantage International | ||||||||||||||||||||||||
|
|
||||||||||||||||||||||||
| Counterparty |
Securities Loaned at Value |
Cash Collateral Received(a) |
Net Amount |
|||||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Goldman Sachs & Co. |
$ | 98,505 | $ | (98,505 | ) | $ | — | |||||||||||||||||
|
Morgan Stanley & Co. LLC |
325,992 | (325,992 | ) | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||
| $ | 424,497 | $ | (424,497 | ) | $ | — | ||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||
| Health Sciences Opportunities | ||||||||||||||||
|
|
||||||||||||||||
| Counterparty |
Securities Loaned at Value |
Cash Collateral Received(a) |
Net Amount(b) |
|||||||||||||
|
|
||||||||||||||||
|
Barclays Capital, Inc. |
$ | 1,612,483 | $ | (1,612,483 | ) | $ | — | |||||||||
|
Citigroup Global Markets, Inc. |
31,663,925 | (31,663,925 | ) | — | ||||||||||||
|
Credit Suisse Securities (USA) LLC |
5,315,965 | (5,315,965 | ) | — | ||||||||||||
|
Deutsche Bank Securities, Inc. |
793,986 | (756,225 | ) | 37,761 | ||||||||||||
|
Goldman Sachs & Co. |
24,519,874 | (24,519,874 | ) | — | ||||||||||||
|
Jefferies LLC |
654,197 | (650,050 | ) | 4,147 | ||||||||||||
|
JP Morgan Securities LLC |
85,302,719 | (85,302,719 | ) | — | ||||||||||||
|
Morgan Stanley & Co. LLC |
5,461,441 | (5,461,441 | ) | — | ||||||||||||
|
Nomura Securities International Inc. |
1,948 | (1,948 | ) | — | ||||||||||||
|
SG Americas Securities LLC |
207,089 | (207,089 | ) | — | ||||||||||||
|
State Street Bank & Trust Co. |
509,714 | (509,714 | ) | — | ||||||||||||
|
TD Prime Services LLC |
1,645,347 | (1,645,347 | ) | — | ||||||||||||
|
|
|
|
|
|
|
|||||||||||
| $ | 157,688,688 | $ | (157,646,780 | ) | $ | 41,908 | ||||||||||
|
|
|
|
|
|
|
|||||||||||
| Technology Opportunities | ||||||||||||||||
|
|
||||||||||||||||
| Counterparty |
Securities Loaned at Value(c) |
Cash Collateral Received(a) |
Net Amount(b) |
|||||||||||||
|
|
||||||||||||||||
|
Barclays Capital, Inc. |
$ | 419,460 | $ | (395,591 | ) | $ | 23,869 | |||||||||
|
BofA Securities, Inc. |
8,719,650 | (8,719,650 | ) | — | ||||||||||||
|
Citigroup Global Markets, Inc. |
27,890,838 | (27,890,838 | ) | — | ||||||||||||
|
Credit Suisse Securities (USA) LLC |
18,055,294 | (18,055,294 | ) | — | ||||||||||||
|
Deutsche Bank Securities, Inc. |
1,836,280 | (1,836,280 | ) | — | ||||||||||||
|
Goldman Sachs & Co. |
26,857,353 | (26,857,353 | ) | — | ||||||||||||
|
JP Morgan Securities LLC |
25,544,526 | (25,544,526 | ) | — | ||||||||||||
|
Mizuho Securities USA, Inc. |
1,791,700 | (1,791,700 | ) | — | ||||||||||||
|
Morgan Stanley & Co. LLC |
9,378,398 | (9,378,398 | ) | — | ||||||||||||
|
National Financial Services LLC |
2,585,689 | (2,585,689 | ) | — | ||||||||||||
|
SG Americas Securities LLC |
1,231,552 | (1,231,552 | ) | |||||||||||||
|
State Street Bank & Trust Co. |
129,864 | (129,864 | ) | — | ||||||||||||
|
TD Prime Services LLC |
2,470,890 | (2,470,890 | ) | |||||||||||||
|
|
|
|
|
|
|
|||||||||||
| $ | 126,911,494 | $ | (126,887,625 | ) | $ | 23,869 | ||||||||||
|
|
|
|
|
|
|
|||||||||||
| (a) |
Collateral received in excess of the market value of securities loaned is not presented in this table. The total cash collateral received by each Fund is disclosed in the Funds’ Statements of Assets and Liabilities. |
| (b) |
The market value of the loaned securities is determined as of September 30, 2019. Additional collateral is delivered to the Fund 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. |
| (c) |
Securities loaned with a value of $4,918,793 have been sold and are pending settlement as of September 30, 2019. |
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 to the extent the collateral
| N O T E S T O F I N A N C I A L S | 81 |
Notes to Financial Statements (continued)
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. Such losses are borne entirely by the Funds.
| 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 Fund 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 Fund is 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, are shown as cash pledged for futures contracts in the Statements of Assets and Liabilities. Pursuant to the contract, the Fund agrees 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.
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, and such value may exceed the amounts reflected in the Statements of Assets and Liabilities. 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.
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.
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.
| 82 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
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 AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Investment Advisory: The Trust, on behalf of the Funds, entered into an Investment Advisory Agreement with the Manager, the Funds’ investment adviser and an indirect, wholly-owned subsidiary of BlackRock, Inc. (“BlackRock”), to provide investment advisory 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 at an annual rate equal to the following percentages of the average daily value of each Fund’s net assets:
|
|
||||||||||||||||
| Investment Advisory Fees | ||||||||||||||||
|
|
|
|||||||||||||||
| Average Daily Net Assets |
Advantage
International |
High Equity
Income |
International
Dividend |
Technology Opportunities |
||||||||||||
|
|
||||||||||||||||
|
First $1 Billion |
0.450 | % | 0.810 | % | 0.790 | % | 0.820 | % | ||||||||
|
$1 Billion — $3 Billion |
0.420 | 0.760 | 0.740 | 0.770 | ||||||||||||
|
$3 Billion — $5 Billion |
0.410 | 0.730 | 0.710 | 0.740 | ||||||||||||
|
$5 Billion — $10 Billion |
0.390 | 0.700 | 0.690 | 0.710 | ||||||||||||
|
Greater than $10 Billion |
0.380 | 0.680 | 0.670 | 0.700 | ||||||||||||
|
|
||||||||||||||||
|
|
||||||||||||||||
| Investment Advisory Fees | ||||||||||||||||
|
|
|
|||||||||||||||
| Average Daily Net Assets |
Health Sciences
Opportunities |
|||||||||||||||
|
|
||||||||||||||||
|
First $1 Billion |
0.750 | % | ||||||||||||||
|
$1 Billion — $2 Billion |
0.700 | |||||||||||||||
|
$2 Billion — $3 Billion |
0.675 | |||||||||||||||
|
Greater than $3 Billion |
0.650 | |||||||||||||||
|
|
||||||||||||||||
Prior to May 24, 2019, with respect to Advantage International, the Investment Advisory fees were as follows:
|
|
||||
| Investment Advisory Fees | ||||
|
|
|
|||
| Average Daily Net Assets |
Advantage International |
|||
|
|
||||
|
First $1 Billion |
0.590 | % | ||
|
$1 Billion — $3 Billion |
0.550 | |||
|
$3 Billion — $5 Billion |
0.530 | |||
|
$5 Billion — $5 Billion |
0.510 | |||
|
Greater than $10 Billion |
0.500 | |||
|
|
||||
With respect to International Dividend, the Manager entered into a separate sub-advisory agreement with BlackRock International Limited (“BIL”), an affiliate of the Manager. The Manager pays BIL, for services it provides for that portion of the Fund for which BIL acts as sub-adviser, a monthly fee that is equal to a percentage of the investment advisory fees paid by the Fund to the Manager.
Service and Distribution Fees: The Trust, on behalf of the Funds, entered into a Distribution Agreement and a Distribution and Service Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of the Manager. Pursuant to the Distribution and Service Plan and in accordance with Rule 12b-1 under the 1940 Act, each Fund pays BRIL ongoing service and distribution fees. The fees are accrued daily and paid monthly at annual rates based upon the average daily net assets of the relevant share class of each Fund as follows:
|
|
||||||||||||||||
| Service | Investor A | Investor C | Class R | |||||||||||||
|
|
||||||||||||||||
|
Distribution Fee |
— | — | 0.75 | % | 0.25 | % | ||||||||||
|
Service Fee |
0.25 | % | 0.25 | % | 0.25 | 0.25 | ||||||||||
|
|
||||||||||||||||
| N O T E S T O F I N A N C I A L S | 83 |
Notes to Financial Statements (continued)
BRIL and broker-dealers, pursuant to sub-agreements with BRIL, provide shareholder servicing and distribution services to the Funds. The ongoing service and/or distribution fee compensates BRIL and each broker-dealer for providing shareholder servicing and/or distribution related services to shareholders.
For the year ended September 30, 2019, the following table shows the class specific service and distribution fees borne directly by each share class of each Fund:
|
|
||||||||||||||||||||
| Service | Investor A | Investor C | Class R | Total | ||||||||||||||||
|
|
||||||||||||||||||||
|
Advantage International |
$ | — | $ | 874,742 | $ | 122,717 | $ | 30,918 | $ | 1,028,377 | ||||||||||
|
Health Sciences Opportunities |
90,214 | 6,711,245 | 8,215,533 | 1,152,435 | 16,169,427 | |||||||||||||||
|
High Equity Income |
25,885 | 524,379 | 528,580 | — | 1,078,844 | |||||||||||||||
|
International Dividend |
8,804 | 323,327 | 209,252 | — | 541,383 | |||||||||||||||
|
Technology Opportunities |
43,445 | 1,533,600 | 1,403,845 | 77,661 | 3,058,551 | |||||||||||||||
|
|
||||||||||||||||||||
Administration: The Trust, on behalf of the Funds, entered into an Administration Agreement with the Manager, an indirect, wholly-owned subsidiary of BlackRock to provide administrative services. For these services, the Manager receives an administration fee computed daily and payable monthly, based on a percentage of the average daily net assets of each Fund. The administration fee, which is shown as administration in the Statements of Operations, is paid at the annual rates below.
|
|
||||
| Average Daily Net Assets | Administration Fee | |||
|
|
||||
|
First $500 Million |
0.0425 | % | ||
|
$500 Million — $1 Billion |
0.0400 | |||
|
$1 Billion — $2 Billion |
0.0375 | |||
|
$2 Billion — $4 Billion |
0.0350 | |||
|
$4 Billion — $13 Billion |
0.0325 | |||
|
Greater than $13 Billion |
0.0300 | |||
|
|
||||
In addition, the Manager charges each of the share classes an administration fee, which is shown as administration — class specific in the Statements of Operations, at an annual rate of 0.02% of the average daily net assets of each respective class.
For the year ended September 30, 2019, the following table shows the class specific administration fees borne directly by each share class of each Fund:
|
|
||||||||||||||||||||||||||||
| Institutional | Service | Investor A | Investor C | Class K | Class R | Total | ||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
|
Advantage International |
$ 84,861 | $ — | $ 69,972 | $ 2,469 | $ 1,992 | $ 1,238 | $ 160,532 | |||||||||||||||||||||
|
Health Sciences Opportunities |
597,134 | 7,210 | 536,301 | 164,247 | 29,396 | 45,992 | 1,380,280 | |||||||||||||||||||||
|
High Equity Income |
33,739 | 2,113 | 42,078 | 10,625 | — | — | 88,555 | |||||||||||||||||||||
|
International Dividend |
17,315 | 715 | 26,186 | 4,220 | 729 | — | 49,165 | |||||||||||||||||||||
|
Technology Opportunities |
159,162 | 3,465 | 122,373 | 28,010 | — | 3,099 | 316,109 | |||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
Transfer Agent: Pursuant to written agreements, certain financial intermediaries, some of which may be affiliates, provide the Funds with sub-accounting, recordkeeping, sub-transfer agency and other administrative services with respect to servicing of underlying investor accounts. For these services, these entities receive an asset-based fee or an annual fee per shareholder account, which will vary depending on share class and/or net assets. For the year ended September 30, 2019, the Funds paid the following amounts to affiliates of BlackRock in return for these services which are included in transfer agent — class specific in the Statements of Operations:
|
|
||||||||||||||||||||
| Institutional | Service | Investor A | Investor C | Total | ||||||||||||||||
|
|
||||||||||||||||||||
|
Advantage International |
$445,254 | $ — | $ — | $— | $445,254 | |||||||||||||||
|
Health Sciences Opportunities |
1,704 | 311 | 1,057 | — | 3,072 | |||||||||||||||
|
High Equity Income |
163 | — | 33 | — | 196 | |||||||||||||||
|
International Dividend |
52 | — | 613 | — | 665 | |||||||||||||||
|
Technology Opportunities |
2,371 | — | 1,450 | — | 3,821 | |||||||||||||||
|
|
||||||||||||||||||||
The Manager maintains a call center that is responsible for providing certain shareholder services to the Funds. Shareholder services include responding to inquiries and processing purchases and sales based upon instructions from shareholders. For the year ended September 30, 2019, each Fund reimbursed the Manager the following amounts for costs incurred in running the call center, which are included in transfer agent — class specific in the Statements of Operations:
|
|
||||||||||||||||||||||||||||
| Institutional | Service | Investor A | Investor C | Class K | Class R | Total | ||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
|
Advantage International |
$ 3,941 | $ — | $10,965 | $ 1,360 | $ 25 | $ 66 | $ 16,357 | |||||||||||||||||||||
|
Health Sciences Opportunities |
15,027 | 268 | 76,132 | 18,185 | 710 | 1,546 | 111,868 | |||||||||||||||||||||
|
High Equity Income |
557 | — | 16,548 | 4,292 | — | — | 21,397 | |||||||||||||||||||||
|
International Dividend |
1,106 | — | 10,018 | 1,957 | 43 | — | 13,124 | |||||||||||||||||||||
|
Technology Opportunities |
7,690 | 113 | 19,009 | 7,483 | — | 218 | 34,513 | |||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
For the year ended September 30, 2019, the following table shows the class specific transfer agent fees borne directly by each share class of each Fund:
|
|
||||||||||||||||||||||||||||
| Institutional | Service | Investor A | Investor C | Class K | Class R | Total | ||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
|
Advantage International |
$ 667,671 | $ — | $ 629,218 | $ 19,177 | $1,849 | $ 13,082 | $1,330,997 | |||||||||||||||||||||
|
Health Sciences Opportunities |
2,894,681 | 55,366 | 3,318,765 | 819,378 | 5,984 | 456,970 | 7,551,144 | |||||||||||||||||||||
|
High Equity Income |
257,850 | 10,556 | 314,947 | 81,586 | — | — | 664,939 | |||||||||||||||||||||
|
International Dividend |
111,393 | 1,670 | 224,016 | 39,281 | 931 | — | 377,291 | |||||||||||||||||||||
|
Technology Opportunities |
911,778 | 15,454 | 848,989 | 157,935 | — | 30,514 | 1,964,670 | |||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
| 84 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
Other Fees: For the year ended September 30, 2019, affiliates earned underwriting discounts, direct commissions and dealer concessions on sales of each Fund’s Investor A Shares as follows:
|
|
||||
|
Advantage International |
$ | 10,758 | ||
|
Health Sciences Opportunities |
181,294 | |||
|
High Equity Income |
9,907 | |||
|
International Dividend |
2,986 | |||
|
Technology Opportunities |
102,537 | |||
|
|
||||
For the year ended September 30, 2019, affiliates received CDSCs as follows:
|
|
||||||||
| Investor A | Investor C | |||||||
|
|
||||||||
|
Advantage International |
$2,653 | $ 882 | ||||||
|
Health Sciences Opportunities |
4,763 | 59,126 | ||||||
|
High Equity Income |
166 | 755 | ||||||
|
International Dividend |
799 | 287 | ||||||
|
Technology Opportunities |
6,787 | 45,313 | ||||||
|
|
||||||||
Expense Limitations, Waivers, Reimbursements and Recoupments: 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. These amounts are included in fees waived and/or reimbursed by the Manager in the Statements of Operations. For the year ended September 30, 2019, the amounts waived were as follows:
|
|
||||
|
Fees Waived By the Manager |
||||
|
|
||||
|
Advantage International |
$ 9,033 | |||
|
Health Sciences Opportunities |
197,637 | |||
|
High Equity Income |
4,617 | |||
|
International Dividend |
528 | |||
|
Technology Opportunities |
56,368 | |||
|
|
||||
The Manager has contractually agreed to waive its investment advisory fee with respect to any portion of each Fund’s assets invested in affiliated equity and fixed-income mutual funds and affiliated exchange-traded funds that have a contractual management fee through, January 31, 2021 for Advantage International and through January 30, 2020 for all other Funds. The contractual agreement may be terminated upon 90 days’ notice by a majority of the Independent trustees who are not “interested persons” of the Trust, as defined in the 1940 Act (“Independent Trustees”), or by a vote of a majority of the outstanding voting securities of a Fund. For the year ended September 30, 2019, there were no fees waived and/or reimbursed by the Manager pursuant to this arrangement.
The Funds have begun to incur expenses in connection with the realignment and consolidation of the boards of trustees of certain BlackRock-advised 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 September 30, 2019, the amounts reimbursed to the Funds were as follows:
|
|
||||
|
Advantage International |
$ | 7,930 | ||
|
Health Sciences Opportunities |
115,658 | |||
|
High Equity Income |
17,127 | |||
|
International Dividend |
12,059 | |||
|
Technology Opportunities |
18,876 | |||
|
|
||||
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:
|
|
||||||||||||||||||||
| Share Class |
Advantage
International |
Health Sciences
Opportunities |
High Equity
Income |
International
Dividend |
Technology
Opportunities |
|||||||||||||||
|
|
||||||||||||||||||||
|
Institutional |
0.50 | % | N/A | 0.85 | % | 0.84 | % | 0.92 | % | |||||||||||
|
Service |
0.75 | (a) | N/A | 1.10 | 1.09 | 1.17 | ||||||||||||||
|
Investor A |
0.75 | N/A | 1.10 | 1.09 | 1.17 | |||||||||||||||
|
Investor C |
1.50 | N/A | 1.85 | 1.84 | 1.92 | |||||||||||||||
|
Class K |
0.45 | N/A | N/A | 0.79 | N/A | |||||||||||||||
|
Class R |
1.00 | N/A | 1.35 | (a) | 1.34 | (a) | 1.42 | |||||||||||||
|
|
||||||||||||||||||||
| (a) |
There were no shares outstanding as of September 30, 2019. |
| N O T E S T O F I N A N C I A L S | 85 |
Notes to Financial Statements (continued)
Prior to May 24, 2019, with respect to Advantage International, the expenses limitation as a percentage of daily average net asset are as follows:
|
|
||||
| Share Class |
Advantage
International |
|||
|
|
||||
|
Institutional |
0.64 | % | ||
|
Service |
0.89 | (a) | ||
|
Investor A |
0.89 | |||
|
Investor C |
1.64 | |||
|
Class K |
0.59 | |||
|
Class R |
1.14 | |||
|
|
||||
| (a) |
There were no shares outstanding as of September 30, 2019 |
The Manager has agreed not to reduce or discontinue these contractual expense limitations through January 31, 2020, with the exception of Advantage International, which is through January 31, 2021, unless approved by the Board, including a majority of the Independent Trustees or by a vote of a majority of the outstanding voting securities of the Funds. For the year ended September 30, 2019, the amounts included in fees waived and/or reimbursed by the Manager in the Statements of Operations were as follows:
|
|
||||
|
Advantage International |
$ | 1,223,861 | ||
|
High Equity Income |
410,822 | |||
|
International Dividend |
490,951 | |||
|
Technology Opportunities |
1,619 | |||
|
|
||||
These amounts waived and/or reimbursed are included in fees waived and/or reimbursed by the Manager, administration fees waived — class specific and transfer agent fees waived and/or reimbursed — class specific, respectively, in the Statements of Operations. For the year ended September 30, 2019, class specific expense waivers and/or reimbursements are as follows:
|
|
||||||||||||||||||||||||||||
| Administration Fees Waived | Institutional | Service | Investor A | Investor C | Class K | Class R | Total | |||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
|
Advantage International |
$ | 84,861 | $ | — | $ | 69,972 | $ | 2,469 | $ | 1,992 | $1,238 | $ | 160,532 | |||||||||||||||
|
High Equity Income |
33,739 | 2,113 | 42,078 | 10,625 | — | — | 88,555 | |||||||||||||||||||||
|
International Dividend |
17,315 | 213 | 26,186 | 4,220 | 729 | — | 48,663 | |||||||||||||||||||||
|
Technology Opportunities |
159,162 | 2,101 | 122,373 | 28,010 | — | 3,099 | 314,745 | |||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
|
Transfer Agent Fees Waived and/or Reimbursed |
Institutional | Service | Investor A | Investor C | Class K | Class R | Total | |||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
|
Advantage International |
$455,386 | $ | — | $454,386 | $ | 12,350 | $1,849 | $ | 9,972 | $ | 933,943 | |||||||||||||||||
|
High Equity Income |
256,570 | 9,990 | 312,322 | 79,112 | — | — | 657,994 | |||||||||||||||||||||
|
International Dividend |
68,148 | 848 | 154,866 | 27,274 | 931 | — | 252,067 | |||||||||||||||||||||
|
Technology Opportunities |
563,921 | 10,249 | 601,475 | 102,355 | — | 24,199 | 1,302,199 | |||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
With respect to the contractual expense limitation, if during a Fund’s fiscal year the operating expenses of a share class, that at any time during the prior two fiscal years received a waiver and/or reimbursement from the Manager, are less than the current expense limitation for that share class, the Manager is entitled to be reimbursed by such share class up to the lesser of: (a) the amount of fees waived and/or expenses reimbursed during those prior two fiscal years under the agreement and (b) an amount not to exceed either the current expense limitation of that share class or the expense limitation of the share class in effect at the time that the share class received the applicable waiver and/or reimbursement, provided that:
(1) each Fund, of which the share class is a part, has more than $50 million in assets for the fiscal year; and
(2) the Manager or an affiliate continues to serve as a Fund’s investment adviser or administrator.
This repayment applies only to the contractual expense limitation on net expenses and does not apply to the contractual investment advisory fee waiver described above or any voluntary waivers that may be in effect from time to time.
For the year ended September 30, 2019, the Manager recouped the following fund level and class specific waivers and/or reimbursements previously recorded by the Fund:
|
|
||||||||||||||||||||||||||||
| Fund | Institutional | Service | Investor A | Investor C | Class R | Total | ||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
|
International Dividend Fund |
$— | $— | $ | 598 | $— | $— | $— | $ | 598 | |||||||||||||||||||
|
Technology Opportunities |
— | — | 655 | — | — | — | 655 | |||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
On September 30, 2019, the fund level and class specific waivers and/or reimbursements subject to possible future recoupment under the expense limitation agreement are as follows:
|
|
||||||||
| Expiring September 30, | ||||||||
| 2020 | 2021 | |||||||
|
|
||||||||
|
Advantage International |
||||||||
|
Fund Level |
$ | 877,895 | $ | 1,223,861 | ||||
|
Institutional |
296,121 | 540,247 | ||||||
|
Investor A |
380,192 | 524,358 | ||||||
|
Investor C |
30,271 | 14,819 | ||||||
|
Class K |
1,147 | 3,841 | ||||||
|
Class R |
14,861 | 11,210 | ||||||
| 86 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
|
|
||||||||||
| Expiring September 30, | ||||||||||
|
|
|
|||||||||
| 2020 | 2021 | |||||||||
|
|
||||||||||
|
High Equity Income |
||||||||||
|
Fund Level |
$ | 551,084 | $ | 410,822 | ||||||
|
Institutional |
509,660 | 290,309 | ||||||||
|
Service |
20,193 | 12,103 | ||||||||
|
Investor A |
446,137 | 354,400 | ||||||||
|
Investor C |
175,896 | 89,737 | ||||||||
|
International Dividend |
||||||||||
|
Fund Level |
567,330 | 490,951 | ||||||||
|
Institutional |
190,739 | 85,463 | ||||||||
|
Service |
6,690 | 1,061 | ||||||||
|
Investor A |
358,133 | 181,052 | ||||||||
|
Investor C |
81,963 | 31,494 | ||||||||
|
Class K |
945 | 1,660 | ||||||||
|
Technology Opportunities |
||||||||||
|
Fund Level |
83,986 | 1,619 | ||||||||
|
Institutional |
278,984 | 723,083 | ||||||||
|
Service |
12,111 | 12,350 | ||||||||
|
Investor A |
432,040 | 723,848 | ||||||||
|
Investor C |
84,694 | 130,365 | ||||||||
|
Class R |
15,170 | 27,298 | ||||||||
|
|
||||||||||
The following fund level and class specific waivers and/or reimbursements previously recorded by the Funds, which were subject to recoupment by the Manager, expired on September 30, 2019:
|
|
||||
|
Advantage International |
||||
|
Fund Level |
$ | 242,156 | ||
|
Institutional |
91,894 | |||
|
Investor A |
224,939 | |||
|
Investor C |
43,706 | |||
|
Class K |
— | |||
|
Class R |
9,589 | |||
|
High Equity Income |
||||
|
Fund Level |
536,052 | |||
|
Institutional |
1,070,924 | |||
|
Service |
13,771 | |||
|
Investor A |
491,028 | |||
|
Investor C |
193,604 | |||
|
International Dividend |
||||
|
Fund Level |
232,233 | |||
|
Institutional |
329,374 | |||
|
Service |
4,974 | |||
|
Investor A |
434,347 | |||
|
Investor C |
85,344 | |||
|
Technology Opportunities |
||||
|
Class R |
2,357 | |||
|
|
||||
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 the current securities lending agreement, Health Sciences Opportunities and High Equity Income retains 73.5% 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. Pursuant to the current securities lending agreement, Advantage International, International Dividend and Technology Opportunities retains 82% 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.
| N O T E S T O F I N A N C I A L S | 87 |
Notes to Financial Statements (continued)
In addition, commencing the business day following the date that the aggregate securities lending income earned across the BlackRock Multi-Asset Complex in a calendar year exceeds a specified threshold, Health Sciences Opportunities and High Equity Income, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 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. Advantage International, International Dividend and Technology Opportunities, 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 (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.
Prior to January 1, 2019, Health Sciences Opportunities and High Equity Income retained 71.5% of securities lending income (which excluded collateral investment expenses) and the amount retained could 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 a complex of open-end funds referred to as the Equity-Liquidity Complex in a calendar year exceeded a specified threshold, the Fund would retain for the remainder of that calendar year 75% of securities lending income (which excluded collateral investment expenses) and the amount retained could never be less than 65% of the total of securities lending income plus the collateral investment expenses.
Prior to January 1, 2019, Advantage International, International Dividend and Technology Opportunities, retained 80% of securities lending income (which excluded collateral investment expenses) and the amount retained could 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 a complex of open-end funds referred to as the Equity-Liquidity Complex in a calendar year exceeded a specified threshold, the Fund would retain for the remainder of that calendar year 85% of securities lending income (which excluded collateral investment expenses), and the amount retained could 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 September 30, 2019, each Fund paid BIM the following amounts for securities lending agent services:
|
|
||||
|
Advantage International |
$ | 36,881 | ||
|
Health Sciences Opportunities |
997,538 | |||
|
High Equity Income |
2 | |||
|
International Dividend |
401 | |||
|
Technology Opportunities |
535,684 | |||
|
|
||||
Interfund Lending: In accordance with an exemptive order (the “Order”) from the SEC, Advantage International 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 Advantage International’s investment policies and restrictions. Advantage International is currently permitted to borrow 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 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 September 30, 2019, Advantage International did not participate in the Interfund Lending Program.
Trustees and Officers: Certain trustees and/or officers of the Trust are trustees and/or officers of BlackRock or its affiliates. The Funds reimburse the Manager for a portion of the compensation paid to the Trust’s Chief Compliance Officer, which is included in Trustees and Officers in the Statements of Operations.
Other Transactions: 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 trustees. For the year ended September 30, 2019, the purchase and sale transactions and any net realized gain (loss) with affiliated funds in compliance with Rule 17a-7 under the 1940 Act were as follows:
|
|
||||||||||||
| Purchases | Sales |
Net Realized
Gain |
||||||||||
|
|
|
|||||||||||
|
Technology Opportunities |
$581,070 | $— | $— | |||||||||
|
|
||||||||||||
| 7. |
PURCHASES AND SALES |
For the year ended September 30, 2019, purchases and sales of investments, excluding short-term securities and equity-linked notes, were as follows:
|
|
||||||||||||||||||||
|
Advantage
International |
Health
Sciences
|
High Equity
Income |
International
Dividend |
Technology
Opportunities |
||||||||||||||||
|
|
||||||||||||||||||||
|
Purchases |
$ | 1,089,971,860 | $ | 2,713,719,450 | $ | 285,668,154 | $ | 54,321,692 | $ | 1,014,481,743 | ||||||||||
|
Sales |
977,469,993 | 2,911,742,704 | 384,226,496 | 113,181,517 | 499,787,640 | |||||||||||||||
|
|
||||||||||||||||||||
For the year ended September 30, 2019, purchases and sales related to equity-linked notes for High Equity Income Fund were $577,177,804 and $615,703,246, respectively.
| 88 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
| 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 September 30, 2019. 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 September 30, 2019, 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.
U.S. 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 period end, the following permanent differences attributable to net operating losses, the use of equalization and non-deductible expenses, were reclassified to the following accounts:
| N O T E S T O F I N A N C I A L S | 89 |
Notes to Financial Statements (continued)
| 9. |
BANK BORROWINGS |
The Trust, on behalf of the Funds, 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 2020 unless extended or renewed. Prior to April 18, 2019, 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 September 30, 2019, the Funds did not borrow under the credit agreement.
| 10. |
PRINCIPAL RISKS |
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.
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. An illiquid investment is any investment that a Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. A Fund may experience difficulty in selling illiquid investments in a timely manner at the price that it believes 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 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: Advantage International and International Dividend invest a significant portion of their 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
| 90 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
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 Advantage International’s and International Dividend’s investments.
Responses to the financial problems by European governments, central banks and others, including austerity measures and reforms, may not work, may result in social unrest and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets and asset valuations around the world. In addition, the United Kingdom has voted to withdraw from the European Union, and one or more other countries may withdraw from the European Union and/or abandon the Euro, the common currency of the European Union. The impact of these actions, especially if they occur in a disorderly fashion, is not clear but could be significant and far reaching.
International Dividend invests a substantial amount of its assets in issuers located in a single country or a limited number of countries. When the Fund concentrates its investments in this manner, it assumes the risk that economic, political and social conditions in those countries may have a significant impact on its investment performance. Foreign issuers may not be subject to the same uniform accounting, auditing and financial reporting standards and practices as used in the United States. Foreign securities markets may also be more volatile and less liquid than U.S. securities, and may be less subject to governmental supervision not typically associated with investing in U.S. securities. Investment percentages in specific countries are presented in the Schedule of Investments.
Advantage International invests a significant portion of its assets in securities of issuers located in Asia or with significant exposure to Asian issuers or countries. The Asian financial markets have recently experienced volatility and adverse trends due to concerns in several Asian countries regarding monetary policy, government intervention in the markets, rising government debt levels or economic downturns. These events may spread to other countries in Asia and may affect the value and liquidity of certain of the Fund’s investments.
As of period end, Health Sciences Opportunities invested a significant portion of its assets in securities in the health care sector, High Equity Income invested a significant portion of its assets in securities in the financial sector and Technology Opportunities invested a significant portion of its assets in securities in the information technology sector. Changes in economic conditions affecting such sectors would have a greater impact on the Fund and could affect the value, income and/or liquidity of positions in such securities.
| 11. |
CAPITAL SHARE TRANSACTIONS |
Transactions in capital shares for each class were as follows:
| Year Ended 09/30/19 | Year Ended 09/30/18 | |||||||||||||||||||
| Advantage International | Shares | Amount | Shares | Amount | ||||||||||||||||
|
|
|
|||||||||||||||||||
|
Institutional |
||||||||||||||||||||
|
Shares sold |
7,187,213 | $ | 112,138,877 | 21,713,713 | $ | 370,322,674 | ||||||||||||||
|
Shares issued in reinvestment of distributions |
679,659 | 10,004,600 | 58,116 | 984,479 | ||||||||||||||||
|
Shares issued in the reorganization(a) |
1,191,455 | 18,579,616 | — | — | ||||||||||||||||
|
Shares redeemed |
(5,091,175 | ) | (79,480,738 | ) | (4,971,457 | ) | (85,594,298 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net increase |
3,967,152 | $ | 61,242,355 | 16,800,372 | $ | 285,712,855 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Investor A |
||||||||||||||||||||
|
Shares sold and automatic conversion of shares |
7,413,242 | $ | 114,556,452 | 11,970,282 | $ | 202,841,111 | ||||||||||||||
|
Shares issued in reinvestment of distributions |
506,134 | 7,379,502 | 94,736 | 1,589,682 | ||||||||||||||||
|
Shares issued in the reorganization(a) |
3,961,430 | 61,055,996 | — | — | ||||||||||||||||
|
Shares redeemed |
(4,512,726 | ) | (69,568,154 | ) | (4,254,197 | ) | (72,565,782 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net increase |
7,368,080 | $ | 113,423,796 | 7,810,821 | $ | 131,865,011 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Investor C |
||||||||||||||||||||
|
Shares sold |
104,380 | $ | 1,581,801 | 248,228 | $ | 4,114,167 | ||||||||||||||
|
Shares issued in reinvestment of distributions |
6,077 | 86,360 | — | — | ||||||||||||||||
|
Shares redeemed and automatic conversion of shares |
(932,769 | ) | (14,025,339 | ) | (362,134 | ) | (5,929,229 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net decrease |
(822,312 | ) | $ | (12,357,178 | ) | (113,906 | ) | $ | (1,815,062 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Period 01/25/18(b) to 09/30/18 | ||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||
|
|
|
|||||||||||||||||||
|
Class K |
||||||||||||||||||||
|
Shares sold |
2,442,351 | $ | 39,126,033 | 517,949 | $ | 8,863,657 | ||||||||||||||
|
Shares issued in reinvestment of dividends |
14,952 | 220,087 | — | — | ||||||||||||||||
|
Shares redeemed |
(227,253 | ) | (3,579,204 | ) | (36,438 | ) | (619,146 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net increase |
2,230,050 | $ | 35,766,916 | 481,511 | $ | 8,244,511 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
(a) See Note 1 regarding the reorganization. |
||||||||||||||||||||
|
(b) Commencement of operations. |
||||||||||||||||||||
| N O T E S T O F I N A N C I A L S | 91 |
Notes to Financial Statements (continued)
| Year Ended 09/30/19 | Year Ended 09/30/18 | |||||||||||||||||||
| Advantage International (concluded) | Shares | Amount | Shares | Amount | ||||||||||||||||
|
|
||||||||||||||||||||
|
Class R |
||||||||||||||||||||
|
Shares sold |
74,667 | $ | 1,148,306 | 143,859 | $ | 2,462,428 | ||||||||||||||
|
Shares issued in reinvestment of distributions |
8,775 | 128,026 | 756 | 12,673 | ||||||||||||||||
|
Shares redeemed |
(206,197 | ) | (3,219,311 | ) | (149,092 | ) | (2,538,056 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net decrease |
(122,755 | ) | $ | (1,942,979 | ) | (4,477 | ) | $ | (62,955 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Total Net Increase |
12,620,215 | $ | 196,132,910 | 24,974,321 | $ | 423,944,360 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Health Sciences Opportunities | ||||||||||||||||||||
|
Institutional |
||||||||||||||||||||
|
Shares sold |
16,325,905 | $ | 988,684,149 | 11,918,367 | $ | 711,236,281 | ||||||||||||||
|
Shares issued in reinvestment of distributions |
3,378,060 | 203,122,898 | 1,337,950 | 74,323,151 | ||||||||||||||||
|
Shares redeemed |
(12,922,800 | ) | (782,762,821 | ) | (7,984,764 | ) | (471,723,765 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net increase |
6,781,165 | $ | 409,044,226 | 5,271,553 | $ | 313,835,667 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Service |
||||||||||||||||||||
|
Shares sold |
139,988 | $ | 8,089,568 | 145,941 | $ | 8,360,730 | ||||||||||||||
|
Shares issued in reinvestment of distributions |
46,803 | 2,689,300 | 20,096 | 1,070,319 | ||||||||||||||||
|
Shares redeemed |
(202,720 | ) | (11,765,167 | ) | (163,770 | ) | (9,304,528 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net increase (decrease) |
(15,929 | ) | $ | (986,299 | ) | 2,267 | $ | 126,521 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Investor A |
||||||||||||||||||||
|
Shares issued from conversion(a) |
— | $ | — | 7,968 | $ | 429,820 | ||||||||||||||
|
Shares sold and automatic conversion of shares |
9,513,222 | 559,253,517 | 6,345,563 | 359,734,103 | ||||||||||||||||
|
Shares issued in reinvestment of distributions |
3,500,360 | 200,325,664 | 1,623,710 | 86,170,352 | ||||||||||||||||
|
Shares redeemed |
(11,451,134 | ) | (662,324,377 | ) | (12,563,126 | ) | (706,383,107 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net increase (decrease) |
1,562,448 | $ | 97,254,804 | (4,585,885 | ) | $ | (260,048,832 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Investor B |
||||||||||||||||||||
|
Shares sold |
— | $ | — | — | $ | 21 | ||||||||||||||
|
Shares issued in reinvestment of distributions |
— | — | 373 | 17,889 | ||||||||||||||||
|
Shares converted(a) |
— | — | (8,853 | ) | (429,820 | ) | ||||||||||||||
|
Shares redeemed and automatic conversion of shares |
— | — | (982 | ) | (47,499 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net decrease |
— | — | (9,462 | ) | $ | (459,409 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Investor C |
||||||||||||||||||||
|
Shares sold |
1,894,248 | $ | 95,470,146 | 1,671,213 | $ | 83,685,017 | ||||||||||||||
|
Shares issued in reinvestment of distributions |
1,265,770 | 63,261,217 | 761,167 | 35,630,818 | ||||||||||||||||
|
Shares redeemed |
(6,451,239 | ) | (335,742,806 | ) | (4,117,440 | ) | (204,113,940 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net decrease |
(3,291,221 | ) | $ | (177,011,443 | ) | (1,685,060 | ) | $ | (84,798,105 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Class K |
||||||||||||||||||||
|
Shares sold |
1,230,466 | $ | 74,794,211 | 1,325,764 | $ | 78,759,852 | ||||||||||||||
|
Shares issued in reinvestment of distributions |
162,449 | 9,774,577 | 36,690 | 2,038,840 | ||||||||||||||||
|
Shares redeemed |
(530,603 | ) | (31,999,450 | ) | (282,817 | ) | (16,677,932 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net increase |
862,312 | $ | 52,569,338 | 1,079,637 | $ | 64,120,760 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Class R |
||||||||||||||||||||
|
Shares sold |
726,290 | $ | 41,078,199 | 787,551 | $ | 43,688,911 | ||||||||||||||
|
Shares issued in reinvestment of distributions |
304,568 | 17,058,868 | 133,790 | 6,962,458 | ||||||||||||||||
|
Shares redeemed |
(917,169 | ) | (51,650,482 | ) | (787,707 | ) | (43,393,227 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net increase |
113,689 | $ | 6,486,585 | 133,634 | $ | 7,258,142 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Total Net Increase |
6,012,464 | $ | 387,357,211 | 206,684 | $ | 40,034,744 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| (a) |
On December 27, 2017, Investor B Shares converted into Investor A Shares. |
| 92 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
| Year Ended 09/30/19 | Year Ended 09/30/18 | |||||||||||||||
| High Equity Income | Shares | Amount | Shares | Amount | ||||||||||||
|
|
||||||||||||||||
|
Institutional |
||||||||||||||||
|
Shares sold |
1,620,135 | $ | 41,789,821 | 1,795,530 | $ | 49,454,889 | ||||||||||
|
Shares issued in reinvestment of distributions |
551,850 | 14,113,022 | 534,018 | 14,591,812 | ||||||||||||
|
Shares redeemed |
(5,297,435 | ) | (138,484,099 | ) | (10,417,182 | ) | (287,023,270 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Net decrease |
(3,125,450 | ) | $ | (82,581,256 | ) | (8,087,634 | ) | $ | (222,976,569 | ) | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Service |
||||||||||||||||
|
Shares sold |
53,252 | $ | 1,231,694 | 22,811 | $ | 571,015 | ||||||||||
|
Shares issued in reinvestment of distributions |
40,695 | 937,357 | 29,405 | 729,748 | ||||||||||||
|
Shares redeemed |
(157,690 | ) | (3,664,934 | ) | (296,460 | ) | (7,447,946 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Net decrease |
(63,743 | ) | $ | (1,495,883 | ) | (244,244 | ) | $ | (6,147,183 | ) | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Investor A |
||||||||||||||||
|
Shares sold and automatic conversion of shares |
2,710,471 | $ | 60,252,847 | 1,003,085 | $ | 23,776,514 | ||||||||||
|
Shares issued in reinvestment of distributions |
879,629 | 19,031,831 | 476,822 | 11,184,532 | ||||||||||||
|
Shares redeemed |
(2,874,581 | ) | (62,930,089 | ) | (4,443,882 | ) | (105,249,999 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Net increase (decrease) |
715,519 | $ | 16,354,589 | (2,963,975 | ) | $ | (70,288,953 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Investor B |
||||||||||||||||
|
Shares sold |
— | $ | — | — | $ | 40 | ||||||||||
|
Shares issued in reinvestment of distributions |
— | — | 243 | 3,922 | ||||||||||||
|
Shares redeemed and automatic conversion of shares |
— | — | (11,237 | ) | (181,858 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Net decrease |
— | $ | — | (10,994 | ) | $ | (177,896 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Investor C |
||||||||||||||||
|
Shares sold |
481,593 | $ | 6,896,158 | 895,301 | $ | 14,543,893 | ||||||||||
|
Shares issued in reinvestment of distributions |
541,742 | 7,642,459 | 407,989 | 6,484,420 | ||||||||||||
|
Shares redeemed |
(4,273,236 | ) | (62,531,798 | ) | (3,179,671 | ) | (51,215,444 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Net decrease |
(3,249,901 | ) | $ | (47,993,181 | ) | (1,876,381 | ) | $ | (30,187,131 | ) | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Total Net Decrease |
(5,723,575 | ) | $ | (115,715,731 | ) | (13,183,228 | ) | $ | (329,777,732 | ) | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| N O T E S T O F I N A N C I A L S | 93 |
Notes to Financial Statements (continued)
| Year Ended 09/30/19 | Year Ended 09/30/18 | |||||||||||||||||||
| International Dividend | Shares | Amount | Shares | Amount | ||||||||||||||||
|
|
||||||||||||||||||||
|
Institutional |
||||||||||||||||||||
|
Shares sold |
664,263 | $ | 18,644,829 | 1,012,358 | $ | 30,836,121 | ||||||||||||||
|
Shares issued in reinvestment of distributions |
165,910 | 4,496,962 | 200,664 | 6,064,305 | ||||||||||||||||
|
Shares redeemed |
(1,423,038 | ) | (39,171,088 | ) | (4,017,740 | ) | (121,958,241 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net decrease |
(592,865 | ) | $ | (16,029,297 | ) | (2,804,718 | ) | $ | (85,057,815 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Service |
||||||||||||||||||||
|
Shares sold |
9,711 | $ | 257,339 | 16,160 | $ | 465,478 | ||||||||||||||
|
Shares issued in reinvestment of distributions |
7,635 | 195,594 | 8,638 | 247,644 | ||||||||||||||||
|
Shares redeemed |
(59,704 | ) | (1,556,385 | ) | (104,612 | ) | (3,011,003 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net decrease |
(42,358 | ) | $ | (1,103,452 | ) | (79,814 | ) | $ | (2,297,881 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Investor A |
||||||||||||||||||||
|
Shares issued from conversion(a) |
889,911 | $ | 23,000,163 | 477 | $ | 13,819 | ||||||||||||||
|
Shares sold and automatic conversion of shares |
— | — | 673,834 | 19,033,336 | ||||||||||||||||
|
Shares issued in reinvestment of distributions |
285,028 | 7,196,565 | 264,520 | 7,462,762 | ||||||||||||||||
|
Shares redeemed |
(1,638,441 | ) | (42,437,755 | ) | (6,881,762 | ) | (198,379,510 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net decrease |
(463,502 | ) | $ | (12,241,027 | ) | (5,942,931 | ) | $ | (171,869,593 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Investor B |
||||||||||||||||||||
|
Shares issued in reinvestment of distributions |
— | $ | — | 3 | $ | 86 | ||||||||||||||
|
Shares converted |
— | — | 513 | 13,819 | ||||||||||||||||
|
Shares redeemed and automatic conversion of shares |
— | — | (4 | ) | (114 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net decrease |
— | $ | — | (514 | ) | $ | (13,847 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Investor C |
||||||||||||||||||||
|
Shares sold |
45,047 | $ | 998,328 | 79,923 | $ | 1,999,619 | ||||||||||||||
|
Shares issued in reinvestment of distributions |
56,149 | 1,232,770 | 68,497 | 1,702,995 | ||||||||||||||||
|
Shares redeemed |
(978,393 | ) | (22,187,137 | ) | (722,537 | ) | (17,945,511 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net decrease |
(877,197 | ) | $ | (19,956,039 | ) | (574,117 | ) | $ | (14,242,897 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Period 01/25/18(b) to 09/30/18 | ||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||
|
|
|
|||||||||||||||||||
|
Class K |
||||||||||||||||||||
|
Shares sold |
40,090 | $ | 1,112,479 | 143,149 | $ | 4,187,215 | ||||||||||||||
|
Shares issued in reinvestment of dividends |
6,665 | 181,244 | 2,263 | 66,602 | ||||||||||||||||
|
Shares redeemed |
(38,053 | ) | (1,065,702 | ) | (19,971 | ) | (582,522 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net increase |
8,702 | $ | 228,021 | 125,441 | $ | 3,671,295 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Total Net Decrease |
(1,967,220 | ) | $ | (49,101,794 | ) | (9,276,653 | ) | $ | (269,810,738 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| (a) |
On December 27, 2017, Investor B Shares converted into Investor A Shares. |
| (b) |
Commencement of operations. |
| 94 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
| Year Ended 09/30/19 | Year Ended 09/30/18 | |||||||||||||||||||||||||||||||||||
| Technology Opportunities | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
|
Institutional |
||||||||||||||||||||||||||||||||||||
|
Shares sold |
24,052,716 | $ | 739,645,950 | 15,923,563 | $ | 461,931,385 | ||||||||||||||||||||||||||||||
|
Shares issued in reinvestment of dividends |
207,296 | 5,657,118 | 545,934 | 13,484,546 | ||||||||||||||||||||||||||||||||
|
Shares redeemed |
(10,959,717 | ) | (333,674,502 | ) | (3,865,247 | ) | (107,720,522 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Net increase |
13,300,295 | $ | 411,628,566 | 12,604,250 | $ | 367,695,409 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Service |
||||||||||||||||||||||||||||||||||||
|
Shares sold |
429,103 | $ | 12,520,533 | 618,439 | $ | 16,915,568 | ||||||||||||||||||||||||||||||
|
Shares issued in reinvestment of dividends |
6,056 | 156,799 | 23,275 | 546,735 | ||||||||||||||||||||||||||||||||
|
Shares redeemed |
(276,902 | ) | (8,156,518 | ) | (396,769 | ) | (10,781,482 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Net increase |
158,257 | $ | 4,520,814 | 244,945 | $ | 6,680,821 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Investor A |
||||||||||||||||||||||||||||||||||||
|
Shares sold and automatic conversion of shares |
8,881,029 | $ | 253,971,288 | 15,906,609 | $ | 426,575,621 | ||||||||||||||||||||||||||||||
|
Shares issued in reinvestment of dividends |
238,235 | 6,034,551 | 982,028 | 22,586,415 | ||||||||||||||||||||||||||||||||
|
Shares redeemed |
(8,097,325 | ) | (223,707,727 | ) | (6,998,503 | ) | (186,358,004 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Net increase |
1,021,939 | $ | 36,298,112 | 9,890,134 | $ | 262,804,032 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Investor C |
||||||||||||||||||||||||||||||||||||
|
Shares sold |
1,884,110 | $ | 45,401,724 | 2,518,167 | $ | 57,703,941 | ||||||||||||||||||||||||||||||
|
Shares issued in reinvestment of dividends |
75,643 | 1,622,352 | 356,227 | 7,003,420 | ||||||||||||||||||||||||||||||||
|
Shares redeemed and automatic conversion of shares |
(1,650,779 | ) | (38,974,671 | ) | (901,615 | ) | (20,221,986 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Net increase |
308,974 | $ | 8,049,405 | 1,972,779 | $ | 44,485,375 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Class R |
||||||||||||||||||||||||||||||||||||
|
Shares sold |
347,493 | $ | 9,898,454 | 226,410 | $ | 6,235,474 | ||||||||||||||||||||||||||||||
|
Shares reinvestments |
5,613 | 143,693 | 30,234 | 704,461 | ||||||||||||||||||||||||||||||||
|
Shares redeemed |
(190,325 | ) | (5,407,885 | ) | (203,414 | ) | (5,390,717 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Net increase |
162,781 | $ | 4,634,262 | 53,230 | $ | 1,549,218 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Total Net Increase |
14,952,246 | $ | 465,131,159 | 24,765,338 | $ | 683,214,855 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
As of September 30, 2019, 10,911 Class K Shares of the Advantage International and 6,295 Class K Shares of the International Dividend were owned by BlackRock Financial Management, Inc., an affiliate of each Fund.
| 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 Fund has 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 Statement of Changes in Net Assets has been modified to conform to the current year presentation in accordance with the Regulation S-X changes.
| N O T E S T O F I N A N C I A L S | 95 |
Notes to Financial Statements (continued)
Distributions for the year ended September 30, 2018 were classified as follows:
|
|
||||||||||
| Share Class |
Net Investment
Income |
Net Realized
Gain |
||||||||
|
|
||||||||||
|
Advantage International |
Institutional | $ 1,075,242 | $ | — | ||||||
| Investor A | 1,762,109 | — | ||||||||
| Investor C | — | — | ||||||||
| Class K | — | — | ||||||||
| Class R | 12,673 | — | ||||||||
|
Health Sciences Opportunities |
Institutional | 904,012 | 77,926,323 | |||||||
| Service | — | 1,102,369 | ||||||||
| Investor A | — | 87,981,985 | ||||||||
| Investor B | — | 17,920 | ||||||||
| Investor C | — | 36,350,049 | ||||||||
| Class K | 96,082 | 1,951,240 | ||||||||
| Class R | — | 6,964,866 | ||||||||
|
High Equity Income |
Institutional | 12,903,654 | 2,658,320 | |||||||
| Service | 598,519 | 132,009 | ||||||||
| Investor A | 9,648,297 | 2,070,577 | ||||||||
| Investor B | 2,242 | 1,680 | ||||||||
| Investor C | 5,338,390 | 1,425,187 | ||||||||
|
International Dividend |
Institutional | 4,504,523 | 2,161,818 | |||||||
| Service | 163,674 | 89,597 | ||||||||
| Investor A | 5,018,054 | 2,747,825 | ||||||||
| Investor B | — | 86 | ||||||||
| Investor C | 968,479 | 808,533 | ||||||||
| Class K | 68,313 | — | ||||||||
|
Technology Opportunities |
Institutional | — | 14,848,785 | |||||||
| Service | — | 551,498 | ||||||||
| Investor A | — | 24,075,269 | ||||||||
| Investor C | — | 7,119,306 | ||||||||
| Class R | — | 717,053 | ||||||||
|
|
||||||||||
Undistributed (distributions in excess of) net investment income (loss) as of September 30, 2018 were as follows:
|
|
||||
|
Undistributed (Distributions in Excess of) Net Investment Income |
||||
|
|
||||
|
Advantage International |
$16,692,551 | |||
|
Health Sciences Opportunities |
4,326,871 | |||
|
High Equity Income |
6,526,440 | |||
|
International Dividend |
809,032 | |||
|
Technology Opportunities |
(5,369,192) | |||
|
|
||||
| 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.
On November 13, 2019, the Board approved a change in the fiscal year-end (“FYE”) of Advantage International, High Equity Income and International Dividend, effective as of May 31, 2020, as follows:
|
|
||||||||
| Current FYE | Approved FYE | |||||||
|
|
||||||||
|
Advantage International |
September 30 | May 31 | ||||||
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High Equity Income |
September 30 | May 31 | ||||||
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International Dividend |
September 30 | May 31 | ||||||
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| 96 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Report of Independent Registered Public Accounting Firm
To the Shareholders of BlackRockAdvantage International Fund, BlackRock Health Sciences Opportunities Portfolio, BlackRock High Equity Income Fund, BlackRock International Dividend Fund and BlackRock Technology Opportunities Fund, and the Board of Trustees of BlackRock FundsSM:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statements of assets and liabilities of BlackRockAdvantage International Fund, BlackRock Health Sciences Opportunities Portfolio, BlackRock High Equity Income Fund, BlackRock International Dividend Fund, and BlackRock Technology Opportunities Fund of BlackRock FundsSM (the “Funds”), including the schedules of investments, as of September 30, 2019, the related statements of operations 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 September 30, 2019, and the results of their operations 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 audit 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 September 30, 2019, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
Deloitte & Touche LLP
Boston, Massachusetts
November 20, 2019
We have served as the auditor of one or more BlackRock investment companies since 1992.
| R E P O R T O F I N D E P E N D E N T R E G I S T E R E D P U B L I C A C C O U N T I N G F I R M | 97 |
Important Tax Information (Unaudited)
During the fiscal year ended September 30, 2019, the following information is provided with respect to the ordinary distributions paid by the Funds:
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| Payable Date |
BlackRock Advantage International Fund |
BlackRock Health Sciences Opportunities Portfolio |
BlackRock High Equity Income Fund |
BlackRock International Dividend Fund |
BlackRock Technology Opportunities Fund |
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|
|
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|
Qualified Dividend Income for Individuals(a) |
10/12/18 | — | % | — | % | 45.00 | % | 100.00 | %(b) | — | % | |||||||||||||||
| 12/07/18 | 100.00(b) | 100.00 | 52.16 | 100.00 | (b) | — | ||||||||||||||||||||
| 04/12/19 | — | — | 62.51 | 100.00 | (b) | — | ||||||||||||||||||||
| 07/20/19 | — | — | 62.51 | 100.00 | (b) | — | ||||||||||||||||||||
|
Dividends Qualifying for the Dividends Received Deduction for Corporations(a) |
Quarterly | — | 100.00 | 42.30 | 4.06 | — | ||||||||||||||||||||
|
Foreign Source Income(a)(b) |
Quarterly | 92.94 | — | — | 95.69 | — | ||||||||||||||||||||
|
Foreign Taxes Paid Per Share(c) |
10/12/18 | $ — | $ — | $ — | $0.011800 | $ — | ||||||||||||||||||||
| 12/07/18 | 0.049279 | — | — | 0.002330 | — | |||||||||||||||||||||
| 04/12/19 | — | — | — | 0.024807 | — | |||||||||||||||||||||
| 07/20/19 | — | — | — | 0.034237 | — | |||||||||||||||||||||
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Qualified Short-Term Capital Gains for Non-U.S. Residents(d) |
12/07/18 | — | % | 73.16 | % | 34.49 | % | — | % | — | % | |||||||||||||||
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20% Long-Term Capital Gains Paid Per Share |
12/07/18 | $ — | $4.146713 | $0.910277 | $0.846937 | $0.296881 | ||||||||||||||||||||
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| (a) |
The Funds hereby designate the percentage indicated above or the maximum amount allowable by law. |
| (b) |
Expressed as a percentage of the cash distribution grossed-up for foreign taxes. |
| (c) |
The foreign taxes paid represent taxes incurred by the Fund on income received by the Fund from foreign sources. Foreign taxes paid may be included in taxable income with an offsetting deduction from gross income or may be taken as a credit for taxes paid to foreign governments. You should consult your tax advisor regarding the appropriate treatment of foreign taxes paid. |
| (d) |
Represents the portion of the taxable ordinary income dividends eligible for exemption from U.S. withholding tax for nonresident aliens and foreign corporations. |
| 98 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement
The Board of Trustees (the “Board,” the members of which are referred to as “Board Members”) of BlackRock Funds (the “Trust”) met in person on April 17, 2019 (the “April Meeting”) and May 14-15, 2019 (the “May Meeting”) to consider the approval of the investment advisory agreement (the “Advisory Agreement”) between the Trust, on behalf of BlackRock Advantage International Fund (“Advantage International Fund”), BlackRock Health Sciences Opportunities Portfolio (“Health Sciences Opportunities Portfolio”), BlackRock High Equity Income Fund (“High Equity Income Fund”), BlackRock International Dividend Fund (“International Dividend Fund”) and BlackRock Technology Opportunities Fund (“Technology Opportunities Fund,” and together with Advantage International Fund, Health Sciences Opportunities Portfolio, High Equity Income Fund and International Dividend Fund, the “Funds”), each a series of the Trust, and BlackRock Advisors, LLC (the “Manager”), the Trust’s investment advisor. The Board also considered the approval of the sub-advisory agreement between the Manager and BlackRock International Limited (the “Sub-Advisor”) with respect to International Dividend Fund (the “Sub-Advisory Agreement”). The Manager and the Sub-Advisor are referred to herein as “BlackRock.” The Advisory Agreement and the Sub-Advisory Agreement are referred to herein as the “Agreements.”
Activities and Composition of the Board
On the date of the May Meeting, the Board consisted of fifteen individuals, thirteen of whom were not “interested persons” of the Trust 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 the Trust 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 Ad Hoc Topics Committee, each of which is chaired by an Independent Board Member and composed of Independent Board Members (except for the Ad Hoc Topics Committee, which also has one interested Board Member).
The Agreements
Consistent with the requirements of the 1940 Act, the Board considers the continuation of the Agreements on an annual basis. The Board has four quarterly meetings per year, each typically extending for two days, and additional in-person and telephonic meetings throughout the year, as needed. While the Board also has a fifth one-day meeting to consider specific information surrounding the renewal of the Agreements, the Board’s consideration entails a year-long deliberative process whereby the Board and its committees assess BlackRock’s services to the Fund. In particular, the Board assessed, among other things, the nature, extent and quality of the services provided to the Fund by BlackRock, BlackRock’s personnel and affiliates, including (as applicable): investment management; accounting, administrative and shareholder services; oversight of the Fund’s service providers; risk management and oversight; legal and compliance services; and ability to meet applicable legal and regulatory requirements. Throughout the year, including during the contract renewal process, the Independent Board Members were advised by independent legal counsel, and met with independent legal counsel in various executive sessions outside of the presence of management.
During the year, the Board, acting directly and through its committees, considers information that is relevant to its annual consideration of the renewal of the Agreements, including the services and support provided by BlackRock to the Fund and its shareholders. BlackRock also furnished additional information to the Board in response to specific questions from the Board. This additional information is discussed further below in the section titled “Board Considerations in Approving the Agreements.” Among the matters the Board considered were: (a) investment performance for one-year, three-year, five-year, ten-year, and/or since inception periods, as applicable, against peer funds, applicable benchmark, and performance metrics, as applicable, as well as senior management’s and portfolio managers’ analyses of the reasons for any over-performance or under-performance relative to its peers, benchmarks, and other performance metrics, as applicable; (b) fees, including advisory, administration, if applicable, and other amounts paid to BlackRock and its affiliates by the Fund for services; (c) Fund operating expenses and how BlackRock allocates expenses to the Fund; (d) the resources devoted to, risk oversight of, and compliance reports relating to, implementation of the Fund’s investment objective, policies and restrictions, and meeting regulatory requirements; (e) BlackRock and the Trust’s adherence to applicable compliance policies and procedures; (f) the nature, character and scope of non-investment management services provided by BlackRock and its affiliates and the estimated cost of such services; (g) BlackRock’s and other service providers’ internal controls and risk and compliance oversight mechanisms; (h) BlackRock’s implementation of the proxy voting policies approved by the Board; (i) the use of brokerage commissions and execution quality of portfolio transactions; (j) BlackRock’s implementation of the Trust’s valuation and liquidity procedures; (k) an analysis of management fees for products with similar investment mandates across the open-end fund, exchange-traded fund (“ETF”), closed-end fund, sub-advised mutual fund, separately managed account, collective investment trust, and institutional separate account product channels, as applicable, and the similarities and differences between these products and the services provided as compared to the Fund; (l) BlackRock’s compensation methodology for its investment professionals and the incentives and accountability it creates, along with investment professionals’ investments in the fund(s) they manage; and (m) periodic updates on BlackRock’s business.
Board Considerations in Approving the Agreements
The Approval Process: Prior to the April Meeting, the Board requested and received materials specifically relating to the Agreements. The Independent Board Members are continuously engaged in a process with their independent legal counsel and BlackRock to review the nature and scope of the information provided to better assist its deliberations. The materials provided in connection with the April Meeting included, among other things: (a) information independently compiled and prepared by Broadridge Financial Solutions, Inc. (“Broadridge”), based on either a Lipper classification or Morningstar category, regarding each Fund’s fees and expenses as compared with a peer group of funds as determined by Broadridge (“Expense Peers”) and the investment performance of each Fund as compared with a peer group of funds (“Performance Peers”) and other metrics, as applicable; (b) information on the composition of the Expense Peers and Performance Peers, and a description of Broadridge’s methodology; (c) information on the estimated profits realized by BlackRock and its affiliates pursuant to the Agreements and a discussion of fall-out benefits to BlackRock and its affiliates; (d) a general analysis provided by BlackRock concerning investment management fees received in connection with other types of investment products, such as institutional accounts, sub-advised mutual funds, ETFs, closed-end funds, open-end funds, and separately managed accounts under similar investment mandates, as well as the performance of such other products, as applicable; (e) review of non-management fees; (f) the existence, impact and sharing of potential economies of scale, if any, with the Funds; (g) a summary of aggregate amounts paid by each Fund to BlackRock; (h) sales and redemption data regarding each Fund’s shares; and (i) various additional information requested by the Board as appropriate regarding BlackRock’s and the Funds’ operations.
| D I S C L O S U R E O F I N V E S T M E N T A D V I S O R Y A G R E E M E N T A N D S U B - A D V I S O R Y A G R E E M E N T | 99 |
Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement (continued)
At the April Meeting, the Board reviewed materials relating to its consideration of the Agreements. As a result of the discussions that occurred during the April Meeting, and as a culmination of the Board’s year-long deliberative process, the Board presented BlackRock with questions and requests for additional information. BlackRock responded to these requests with additional written information in advance of the May Meeting.
At the May Meeting, the Board concluded its assessment of, among other things: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of each Fund as compared with 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 the Funds; (d) each Fund’s fees and expenses compared to Expense Peers; (e) the sharing of potential economies of scale; (f) fall-out benefits to BlackRock and its affiliates as a result of BlackRock’s relationship with the Funds; and (g) other factors deemed relevant by the Board Members.
The Board also considered other matters it deemed important to the approval process, such as other payments made to BlackRock or its affiliates relating to securities lending and cash management, and BlackRock’s services related to the valuation and pricing of Fund portfolio holdings. 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 Provided by BlackRock: The Board, including the Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of each Fund. Throughout the year, the Board compared each Fund’s performance to the performance of a comparable group of mutual funds, 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. The Board also reviewed the materials provided by each Fund’s portfolio management team discussing the Fund’s performance and the Fund’s investment objective, 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 engaged in a review of 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.
In addition to investment advisory services, the Board considered the nature and quality of the administrative and other non-investment advisory services provided to each Fund. BlackRock and its affiliates provide the Funds with certain administrative, shareholder and other services (in addition to any such services provided to the Funds by third parties) and officers and other personnel as are necessary for the operations of the Funds. In particular, BlackRock and its affiliates provide the Funds 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 or managing administrative functions necessary for the operation of the Funds, 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 reviewed 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 the Funds and BlackRock: The Board, including the Independent Board Members, also reviewed and considered the performance history of each Fund. In preparation for the April Meeting, the Board was provided with reports independently prepared by Broadridge, which included a comprehensive analysis of each Fund’s performance as of December 31, 2018. 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 its review, with respect to each Fund, the Board received and reviewed information regarding the investment performance of the Fund as compared to its Performance Peers. The Board and its Performance Oversight Committee regularly review, and meet with Fund management to discuss, the performance of each Fund throughout the year.
In evaluating performance, the Board focused particular attention on funds with less favorable performance records. The Board also noted that while it found the data provided by Broadridge generally useful, it recognized the limitations of such data, including in particular, that notable differences may exist between a fund and the Performance Peer funds (for example, the investment objective(s) and investment strategies). Further, 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. The Board also acknowledged that long-term performance could be impacted by even one period of significant outperformance or underperformance, and that a single investment theme could have the ability to affect long-term performance disproportionately.
The Board noted that for each of the one-, three- and five-year periods reported, the Technology Opportunities Fund ranked in the first quartile against its Performance Peers.
The Board noted that for each of the one-, three- and five-year periods reported, the Health Sciences Opportunities Portfolio ranked in the first quartile against its Performance Peers.
The Board noted that for the one-, three- and five-year periods reported, the High Equity Income Fund ranked in the second, fourth and third quartiles, respectively, against its Performance Peers. The Board and BlackRock reviewed the Fund’s underperformance during the applicable periods. The Board noted that, among other things, effective June 12, 2017, the Fund had undergone changes in its investment objective, investment strategy and portfolio management team, and in connection with such changes, the Fund changed its name from BlackRock U.S. Opportunities Portfolio to BlackRock High Equity Income Fund. The Board and BlackRock discussed BlackRock’s strategy for improving the Fund’s investment performance. Discussions covered topics such as performance attribution, the Fund’s investment personnel, and the resources appropriate to support the Fund’s investment processes.
| 100 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement (continued)
The Board noted that for the one-, three- and five-year periods reported, the Advantage International Fund ranked in the third, third and second quartiles, respectively, against its Performance Peers. The Board and BlackRock reviewed the Fund’s underperformance during the applicable periods.
The Board noted that for the one-, three- and five-year periods reported, the International Dividend Fund ranked in the third, fourth and fourth quartiles, respectively, against its Performance Peers. The Board and BlackRock reviewed the Fund’s underperformance during the applicable periods. The Board noted that, among other things, effective June 12, 2017, the Fund had undergone changes in its investment objective, investment strategy and portfolio management team, and in connection with such changes, the Fund changed its name from BlackRock International Opportunities Portfolio to BlackRock International Dividend Fund. The Board and BlackRock discussed BlackRock’s strategy for improving the Fund’s investment performance. Discussions covered topics such as performance attribution, the Fund’s investment personnel, and the resources appropriate to support the Fund’s investment processes.
C. Consideration of the Advisory/Management Fees and the Estimated Cost of the Services and Estimated Profits Realized by BlackRock and its Affiliates from their Relationship with the Funds: The Board, including the Independent Board Members, reviewed each Fund’s contractual management fee rate compared with those of its Expense Peers. 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 compared each Fund’s total expense ratio, as well as its actual 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).
The Board received and reviewed statements relating to BlackRock’s financial condition. The Board reviewed BlackRock’s profitability methodology and was also provided with an estimated profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to each Fund. The Board reviewed BlackRock’s estimated profitability with respect to each Fund and other funds the Board currently oversees for the year ended December 31, 2018 compared to available aggregate estimated profitability data provided for the prior two years. The Board reviewed BlackRock’s estimated profitability with respect to certain other U.S. fund complexes managed by the Manager and/or its affiliates. The Board reviewed BlackRock’s assumptions and methodology of allocating expenses in the estimated profitability analysis, noting 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. The Board thus recognized that calculating and comparing profitability at individual fund levels is difficult.
The Board noted that, in general, individual fund or product line profitability of other advisors is not publicly available. The Board reviewed BlackRock’s overall operating margin, in general, compared to that of certain other publicly-traded asset management firms. The Board 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 provided to the Funds by BlackRock, and BlackRock’s and its affiliates’ estimated profits relating to the management of the Funds and the other funds advised by BlackRock and its affiliates. As part of its analysis, the Board reviewed BlackRock’s methodology in allocating its costs of managing each Fund, to each respective 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 Agreements and to continue to provide the high quality of services that is expected by the Board. The Board further considered factors including but not limited to BlackRock’s commitment of time, assumption of risk, and liability profile in servicing the Funds, including in contrast to what is required of BlackRock with respect to other products with similar investment mandates across the open-end fund, ETF, 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 Advantage International Fund’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 Fund’s Expense Peers. The Board also noted that the Fund has an advisory fee arrangement that includes breakpoints that adjust the fee rate downward as the size of the Fund increases above certain contractually specified levels. The Board noted that if the size of the Fund were to decrease, the Fund could lose the benefit of one or more breakpoints. The Board also noted that BlackRock proposed, and the Board agreed to, a contractual adjustment to reduce specified levels within the breakpoint schedule. This adjustment was implemented on May 24, 2019. The Board further noted that BlackRock and the Board have contractually agreed to a cap on the Fund’s total expenses as a percentage of the Fund’s average daily net assets on a class-by-class basis. In addition, the Board noted that BlackRock proposed, and the Board agreed to, a lower contractual expense cap on a class-by-class basis. This expense cap reduction was implemented on May 24, 2019.
The Board noted that the International Dividend Fund’s contractual management fee rate ranked in the third quartile, and that the actual management fee rate and total expense ratio each ranked in the first quartile relative to the Fund’s Expense Peers. The Board also noted that the Fund has an advisory fee arrangement that includes breakpoints that adjust the fee rate downward as the size of the Fund increases above certain contractually specified levels. The Board noted that if the size of the Fund were to decrease, the Fund could lose the benefit of one or more breakpoints. The Board further noted that BlackRock and the Board have contractually agreed to a cap on the Fund’s total operating expenses as a percentage of the Fund’s average daily net assets on a class-by-class basis.
The Board noted that the Technology Opportunities Fund’s contractual management fee rate ranked in the third quartile, and that the actual management fee rate and total expense ratio ranked in the third and second quartiles, respectively, relative to the Fund’s Expense Peers. The Board also noted that the Fund has an advisory fee arrangement that includes breakpoints that adjust the fee rate downward as the size of the Fund increases above certain contractually specified levels. The Board noted that if the size of the Fund were to decrease, the Fund could lose the benefit of one or more breakpoints. In addition, the Board noted that BlackRock and the Board agreed to a contractual adjustment to reduce specified levels within the breakpoint schedule. This adjustment was implemented on March 15, 2018. The Board further noted that BlackRock and the Board have contractually agreed to a cap on the Fund’s total expenses as a percentage of the Fund’s average daily net assets on a class-by-class basis. The Board also noted that BlackRock and the Board agreed to a lower contractual expense cap on a class-by-class basis. This contractual expense cap reduction was implemented on March 15, 2018.
| D I S C L O S U R E O F I N V E S T M E N T A D V I S O R Y A G R E E M E N T A N D S U B - A D V I S O R Y A G R E E M E N T | 101 |
Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement (continued)
The Board noted that the Health Sciences Opportunities Portfolio’s contractual management fee rate ranked in the fourth quartile, and that the actual management fee rate and total expense ratio ranked in the fourth and third quartiles, respectively, relative to the Fund’s Expense Peers. The Board also noted that the Fund has an advisory fee arrangement that includes breakpoints that adjust the fee rate downward as the size of the Fund increases above certain contractually specified levels. The Board noted that if the size of the Fund were to decrease, the Fund could lose the benefit of one or more breakpoints.
The Board noted that the High Equity Income Fund’s contractual management fee rate ranked in the fourth quartile, and that the actual management fee rate and total expense ratio ranked in the fourth and third quartiles, respectively, relative to the Fund’s Expense Peers. The Board also noted that the Fund has an advisory fee arrangement that includes breakpoints that adjust the fee rate downward as the size of the Fund increases above certain contractually specified levels. The Board noted that if the size of the Fund were to decrease, the Fund could lose the benefit of one or more breakpoints. The Board further noted that BlackRock and the Board have contractually agreed to a cap on the Fund’s total expenses as a percentage of the Fund’s average daily net assets on a class-by-class basis.
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 the Funds 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 the Funds benefit 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 the Funds to more fully participate in these economies of scale. The Board considered each Fund’s asset levels and whether the current fee schedule was appropriate. In their 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 ancillary or “fall-out” benefits that BlackRock or its affiliates may derive from BlackRock’s respective relationships with the Funds, both tangible and intangible, 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 the Funds, 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 noted 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 Agreements, the Board also received information regarding BlackRock’s brokerage and soft dollar practices. The Board received reports from BlackRock which included information on brokerage commissions and trade execution practices throughout the year.
The Board noted the competitive nature of the open-end fund marketplace, and that shareholders are able to redeem their Fund shares if they believe that the pertinent Fund’s fees and expenses are too high or if they are dissatisfied with the performance of the Fund.
Conclusion
The Board, including the Independent Board Members, unanimously approved the continuation of the Advisory Agreement between the Manager and the Trust, on behalf of each Fund, for a one-year term ending June 30, 2020, and the Sub-Advisory Agreement between the Manager and the Sub-Advisor with respect to International Dividend Fund for a one-year term ending June 30, 2020. 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 Agreements were fair and reasonable and, in the best interest of each Fund and its shareholders. In arriving at its decision to approve the Agreements, 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.
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Trustees and Officer Information
| Independent Trustees(a) | ||||||||
|
Name Year of Birth(b) |
Position(s)
Held
Service)(c) |
Principal Occupation(s) During Past Five Years |
Number of BlackRock-Advised Registered Investment Companies
(“RICs”) Consisting of Investment
|
Public Company
Five Years |
||||
|
Mark Stalnecker 1951 |
Chair of the Board
(Since 2019) and Trustee (Since 2015) |
Chief Investment Officer, University of Delaware from 1999 to 2013; Trustee and Chair of the Finance and Investment Committees, Winterthur Museum and Country Estate from 2005 to 2016; Member of the Investment Committee, Delaware Public Employees’ Retirement System since 2002; Member of the Investment Committee, Christiana Care Health System from 2009 to 2017; Member of the Investment Committee, Delaware Community Foundation from 2013 to 2014; Director and Chair of the Audit Committee, SEI Private Trust Co. from 2001 to 2014. | 37 RICs consisting of 179 Portfolios | None | ||||
|
Bruce R. Bond 1946 |
Trustee
(Since 2019) |
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. | 37 RICs consisting of 179 Portfolios | None | ||||
|
Susan J. Carter 1956 |
Trustee
(Since 2016) |
Director, Pacific Pension Institute from 2014 to 2018; Advisory Board Member, Center for Private Equity and Entrepreneurship at Tuck School of Business since 1997; Senior Advisor, Commonfund Capital, Inc. (“CCI”) (investment adviser) in 2015; Chief Executive Officer, CCI from 2013 to 2014; President & Chief Executive Officer, CCI from 1997 to 2013; Advisory Board Member, Girls Who Invest from 2015 to 2018 and Board Member thereof since 2018; Advisory Board Member, Bridges Fund Management since 2016; Trustee, Financial Accounting Foundation since 2017; Practitioner Advisory Board Member, Private Capital Research Institute (“PCRI”) since 2017. | 37 RICs consisting of 179 Portfolios | None | ||||
|
Collette Chilton 1958 |
Trustee
(Since 2015) |
Chief Investment Officer, Williams College since 2006; Chief Investment Officer, Lucent Asset Management Corporation from 1998 to 2006. | 37 RICs consisting of 179 Portfolios | None | ||||
|
Neil A. Cotty 1954 |
Trustee
(Since 2016) |
Bank of America Corporation from 1996 to 2015, serving in various senior finance leadership roles, including Chief Accounting Officer from 2009 to 2015, Chief Financial Officer of Global Banking, Markets and Wealth Management from 2008 to 2009, Chief Accounting Officer from 2004 to 2008, Chief Financial Officer of Consumer Bank from 2003 to 2004, Chief Financial Officer of Global Corporate Investment Bank from 1999 to 2002. | 37 RICs consisting of 179 Portfolios | None | ||||
|
Lena G. Goldberg 1949 |
Trustee
(Since 2019) |
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. | 37 RICs consisting of 179 Portfolios | None | ||||
|
Robert M. Hernandez 1944 |
Trustee
(Since 2019) |
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. | 37 RICs consisting of 179 Portfolios | Chubb Limited (insurance company); Eastman Chemical Company | ||||
| T R U S T E E S A N D O F F I C E R I N F O R M AT I O N | 103 |
Trustees and Officer Information (continued)
| Independent Trustees(a) (continued) | ||||||||
|
Name Year of Birth(b) |
Position(s)
Held
Service)(c) |
Principal Occupation(s) During Past Five Years |
Number of BlackRock-Advised Registered Investment Companies
(“RICs”) Consisting of Investment
|
Public Company
and Other Investment Company Directorships Held During Past Five Years |
||||
|
Henry R. Keizer 1956 |
Trustee (Since 2019) |
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. | 37 RICs consisting of 179 Portfolios | Hertz Global Holdings (car rental); Montpelier Re Holdings, Ltd. (publicly held property and casualty reinsurance) from 2013 until 2015; Sealed Air Corp. (packaging); WABCO (commercial vehicle safety systems) | ||||
|
Cynthia A. Montgomery 1952 |
Trustee (Since 2007) |
Professor, Harvard Business School since 1989. | 37 RICs consisting of 179 Portfolios | Newell Rubbermaid, Inc. (manufacturing) | ||||
|
Donald C. Opatrny 1952 |
Trustee (Since 2019) |
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 2018; Member, Investment Funds Committee, State of Wyoming since 2017; Trustee, Phoenix Art Museum since 2018. | 37 RICs consisting of 179 Portfolios | None | ||||
|
Joseph P. Platt 1947 |
Trustee
(Since 2007) |
General Partner, Thorn Partners, LP (private investments) since 1998; Director, WQED Multi-Media (public broadcasting not-for-profit) since 2001; Chair, Basic Health International (non-profit) since 2015. | 37 RICs consisting of 179 Portfolios | Greenlight Capital Re, Ltd. (reinsurance company); Consol Energy Inc. | ||||
|
Kenneth L. Urish 1951 |
Trustee
(Since 2007) |
Managing Partner, Urish Popeck & Co., LLC (certified public accountants and consultants) since 1976; Past-Chairman of the Professional Ethics Committee of the Pennsylvania Institute of Certified Public Accountants and Committee Member thereof since 2007; Member of External Advisory Board, The Pennsylvania State University Accounting Department since founding in 2001; Principal, UP Strategic Wealth Investment Advisors, LLC since 2013; Trustee, The Holy Family Institute from 2001 to 2010; President and Trustee, Pittsburgh Catholic Publishing Associates from 2003 to 2008; Director, Inter-Tel from 2006 to 2007. | 37 RICs consisting of 179 Portfolios | None | ||||
|
Claire A. Walton 1957 |
Trustee (Since 2016) |
Chief Operating Officer and Chief Financial Officer of Liberty Square Asset Management, LP from 1998 to 2015; General Partner of Neon Liberty Capital Management, LLC since 2003; Director, Boston Hedge Fund Group from 2009 to 2018; Director, Woodstock Ski Runners since 2013; Director, Massachusetts Council on Economic Education from 2013 to 2015. | 37 RICs consisting of 179 Portfolios | None | ||||
| 104 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Trustees and Officer Information (continued)
| Interested Trustees(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
|
Public Company
and Other Investment Company Directorships Held During Past Five Years |
||||
|
Robert Fairbairn 1965 |
Trustee (Since 2018) |
Vice Chairman of BlackRock, Inc. since 2019; Member of BlackRock’s Global Executive and Global Operating Committees; Co-Chair of BlackRock’s Human Capital Committee; Senior Managing Director of BlackRock, Inc. from 2010 to 2019; oversaw BlackRock’s Strategic Partner Program and Strategic Product Management Group from 2012 to 2019; Member of the Board of Managers of BlackRock Investments, LLC from 2011 to 2018; Global Head of BlackRock’s Retail and iShares® businesses from 2012 to 2016. | 123 RICs consisting of 289 Portfolios | None | ||||
|
John M. Perlowski(e) 1964 |
Trustee (Since 2015), 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. | 124 RICs consisting of 290 Portfolios | None | ||||
|
(a) The address of each Trustee is c/o BlackRock, Inc., 55 East 52nd Street, New York, New York 10055. (b) Independent Trustees serve until their resignation, retirement, removal or death, or until December 31 of the year in which they turn 75. The Board may determine to extend the terms of Independent Trustees on a case-by-case basis, as appropriate. (c) Following the combination of 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. Furthermore, effective January 1, 2019, three BlackRock Fund Complexes were realigned and consolidated into two BlackRock Fund Complexes. As a result, although the chart shows the year that each Independent Trustee joined the Board, certain Independent Trustees first became members of the boards of other BlackRock-advised Funds, legacy MLIM funds or legacy BlackRock funds as follows: Bruce R. Bond, 2005; Robert M. Hernandez, 1996; Cynthia A. Montgomery, 1994; Joseph P. Platt, 1999; Kenneth L. Urish, 1999; Lena G. Goldberg, 2016; Henry R. Keizer, 2016; Donald C. Opatrny, 2015. (d) Mr. Fairbairn and Mr. Perlowski are both “interested persons,” as defined in the 1940 Act, of the Trust based on their positions with BlackRock, Inc. and its affiliates. Mr. Fairbairn and Mr. Perlowski are also board members of the BlackRock Fixed-Income Complex. (e) Mr. Perlowski is also a trustee of the BlackRock Credit Strategies Fund. |
||||||||
| T R U S T E E S A N D O F F I C E R I N F O R M AT I O N | 105 |
Trustees and Officer Information (continued)
| Officers Who Are Not Trustees(a) | ||||
|
Name Year of Birth(b) |
Position(s) Held (Length of Service) |
Principal Occupation(s) During Past Five Years | ||
|
Thomas Callahan 1968 |
Vice President (Since 2016) |
Managing Director of BlackRock, Inc. since 2013; Member of the Board of Managers of BlackRock Investments, LLC (principal underwriter) since 2019 and Managing Director thereof since 2017; Head of BlackRock’s Global Cash Management Business since 2016; Co-Head of the Global Cash Management Business from 2014 to 2016; Deputy Head of the Global Cash Management Business from 2013 to 2014; Member of the Cash Management Group Executive Committee since 2013; Chief Executive Officer of NYSE Liffe U.S. from 2008 to 2013. | ||
|
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 Development and Oversight for BlackRock’s Strategic Product Management Group since 2019; Head of Product Structure and Oversight for BlackRock’s U.S. Wealth Advisory Group from 2013 to 2019. | ||
|
Neal J. Andrews 1966 |
Chief Financial Officer (Since 2007) |
Chief Financial Officer of the iShares® exchange traded funds since 2019; 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 certain BlackRock-advised Funds from 2014 to 2015; Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the BlackRock Multi-Asset Complex and the BlackRock Fixed-Income 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. | ||
|
Lisa Belle 1968 |
Anti-Money Laundering Compliance Officer (Since 2019) |
Managing Director of BlackRock, Inc. since 2019; Global Financial Crime Head for Asset and Wealth Management of JP Morgan from 2013 to 2019; Managing Director of RBS Securities from 2012 to 2013; Head of Financial Crimes for Barclays Wealth Americas from 2010 to 2012. | ||
|
Janey Ahn 1975 |
Secretary (Since 2019) |
Managing Director of BlackRock, Inc. since 2018; Director of BlackRock, Inc. from 2009 to 2017. | ||
|
(a) The address of each Officer is c/o BlackRock, Inc., 55 East 52nd Street, New York, New York 10055. (b) Officers of the Trust serve at the pleasure of the Board. |
||||
Further information about the Trust’s Trustees and Officers is available in the Trust’s Statement of Additional Information, which can be obtained without charge by calling (800) 441-7762.
Effective September 19, 2019, Lisa Belle replaced John MacKessy as the Anti-Money Laundering Compliance Officer of the Trust.
Effective September 19, 2019, Janey Ahn replaced Benjamin Archibald as the Secretary of the Trust.
Investment Adviser and Administrator
BlackRock Advisors, LLC
Wilmington, DE 19809
Sub-Adviser(a)
BlackRock International Limited
Edinburgh, EH3 8BL
United Kingdom
Accounting Agent and Transfer Agent
BNY Mellon Investment Servicing (US) Inc.
Wilmington, DE 19809
Custodian
The Bank of New York Mellon
New York, NY 10286
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
Boston, MA 02116
Distributor
BlackRock Investments, LLC
New York, NY 10022
Legal Counsel
Sidley Austin LLP
New York, NY 10019
Address of the Trust
100 Bellevue Parkway
Wilmington, DE 19809
| (a) |
BlackRock International Dividend Fund |
| 106 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
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.
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 as an exhibit to its reports on Form N-PORT, and for reporting periods ended prior to March 31, 2019, filed such information on Form N-Q. The Funds’ Forms N-PORT and N-Q are available on the SEC’s website at http://www.sec.gov. The Funds’ Forms N-PORT and 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; and (3) on the SEC’s website 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 or by calling (800) 441-7762 and (2) on the SEC’s website at .
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.
| A D D I T I O N A L I N F O R M A T I O N | 107 |
Additional Information (continued)
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding 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.
| 108 | 2 0 1 9 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Glossary of Terms Used in this Report
| Currency | ||
| CHF | Swiss Frank | |
| EUR | Euro | |
| GBP | British Pound | |
| USD | U.S. Dollar | |
| Portfolio Abbreviations | ||
| ADR | American Depositary Receipts | |
| CDI | CREST Depository Interest | |
| G L O S S A R Y O F T E R M S U S E D I N T H I S R E P O R T | 109 |
Want to know more?
blackrock.com | 877-275-1255 (1-877-ASK-1BLK)
This report is intended for current holders. It is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of the Funds unless preceded or accompanied by the Funds’ current prospectus. 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. Statements and other information herein are as dated and are subject to change.
Eq-Opps-9/19-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: |
Neil A. Cotty
Robert M. Hernandez
Henry R. Keizer
Kenneth L. Urish
Claire A. Walton
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. The designation or identification of a person as an audit committee financial expert does not affect the duties, obligations, or liability of any other member of the audit committee or board of directors.
| 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 Advantage International Fund | $33,150 | $33,150 | $0 | $38 | $14,100 | $16,200 | $0 | $0 | ||||||||||
| BlackRock Advantage Large Cap Growth Fund | $18,972 | $20,196 | $0 | $0 | $15,200 | $17,900 | $0 | $0 | ||||||||||
| BlackRock Advantage Small Cap Growth Fund | $29,682 | $29,682 | $0 | $0 | $15,200 | $17,900 | $0 | $0 | ||||||||||
| BlackRock All-Cap Energy & Resources Portfolio | $18,462 | $19,686 | $0 | $0 | $15,200 | $15,200 | $0 | $0 | ||||||||||
| BlackRock Energy & Resources Portfolio | $25,092 | $26,316 | $0 | $0 | $15,200 | $15,200 | $0 | $0 | ||||||||||
| BlackRock Health Sciences Opportunities Portfolio | $38,658 | $39,882 | $0 | $0 | $15,200 | $15,500 | $0 | $0 | ||||||||||
| BlackRock High Equity Income Fund | $22,134 | $23,358 | $0 | $0 | $15,200 | $16,100 | $0 | $0 | ||||||||||
| BlackRock International Dividend Fund | $25,296 | $26,520 | $0 | $0 | $16,200 | $16,500 | $0 | $0 | ||||||||||
| BlackRock Mid-Cap Growth Equity Portfolio | $18,768 | $19,992 | $0 | $0 | $15,200 | $15,500 | $0 | $0 | ||||||||||
| BlackRock Technology Opportunities Portfolio | $36,720 | $36,720 | $0 | $0 | $15,200 | $15,500 | $0 | $0 | ||||||||||
2
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 (“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 Fund Service Providers”):
| Current Fiscal Year End | Previous Fiscal Year End | |||
| (b) Audit-Related Fees1 | $0 | $0 | ||
| (c) Tax Fees2 | $0 | $0 | ||
| (d) All Other Fees3 | $2,050,500 | $2,274,000 |
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 $2,050,500 and $2,274,000 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.
3
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 minimus 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:
| Entity Name |
Current Fiscal Year End |
Previous Fiscal Year End |
||||
|
|
BlackRock Advantage International Fund | $14,100 | $16,238 | |||
| BlackRock Advantage Large Cap Growth Fund | $15,200 | $17,900 | ||||
| BlackRock Advantage Small Cap Growth Fund | $15,200 | $17,900 | ||||
| BlackRock All-Cap Energy & Resources Portfolio | $15,200 | $15,200 | ||||
| BlackRock Energy & Resources Portfolio | $15,200 | $15,200 | ||||
| BlackRock Health Sciences Opportunities Portfolio | $15,200 | $15,500 | ||||
| BlackRock High Equity Income Fund | $15,200 | $16,100 | ||||
| BlackRock International Dividend Fund | $16,200 | $16,500 | ||||
| BlackRock Mid-Cap Growth Equity Portfolio | $15,200 | $15,500 | ||||
| BlackRock Technology Opportunities Portfolio | $15,200 | $15,500 |
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 |
|
|
$2,050,500 |
$2,274,000 |
These amounts represent aggregate fees paid by BlackRock and were not allocated on a per fund basis.
4
(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 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 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
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(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 Funds
|
By: |
/s/ John M. Perlowski |
|
| John M. Perlowski | ||
| Chief Executive Officer (principal executive officer) of | ||
| BlackRock Funds |
Date: December 3, 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 Funds |
Date: December 3, 2019
|
By: |
/s/ Neal J. Andrews | |
| Neal J. Andrews | ||
| Chief Financial Officer (principal financial officer) of | ||
| BlackRock Funds |
Date: December 3, 2019
7