N-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-05742

BlackRock Funds^SM

(Exact name of registrant as specified in charter)

100 Bellevue Parkway

Wilmington, DE 19809

(Address of principal executive offices) (Zip code)

Brian Kindelan, Esq.

BlackRock Advisors, LLC.

100 Bellevue Parkway

Wilmington, Delaware 19809

(Name and address of agent for service)

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

Date of fiscal year end: September 30, 2007

Date of reporting period: December 31, 2006

Item 1. Schedule of Investments.

The Schedules of Investments are attached herewith.

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INVESTMENT TRUST PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS — 99.6%
Aerospace — 0.9%
Raytheon Co.(b)	209,200	$	11,045,760
Air Transportation — 0.6%
Continental Airlines, Inc. - Class B(b)(c)	165,500		6,826,875
Banks — 10.4%
Bank of America Corp.	650,900		34,751,551
Citigroup, Inc.	591,000		32,918,700
J.P. Morgan Chase & Co.	521,600		25,193,280
Key Corp.(b)	162,000		6,160,860
U.S. Bancorp(b)	404,200		14,627,998
Wachovia Corp.(b)	174,300		9,926,385
			123,578,774
Beverages & Bottling — 2.4%
The Coca-Cola Co.	310,700		14,991,275
Molson Coors Brewing Co. - Class B	88,400		6,757,296
Pepsi Bottling Group, Inc.	211,600		6,540,556
			28,289,127
Broadcasting — 1.6%
CBS Corp. - Class B(b)	279,500		8,714,810
DIRECTV Group, Inc.(c)	427,600		10,664,344
			19,379,154
Chemicals — 1.1%
The Lubrizol Corp.	265,700		13,319,541
Computer & Office Equipment — 5.6%
Cisco Systems, Inc.(c)	934,300		25,534,419
Hewlett-Packard Co.	377,700		15,557,463
International Business Machines Corp.	263,500		25,599,025
			66,690,907
Computer Software & Services — 4.7%
Computer Sciences Corp.(c)	116,300		6,206,931
Google, Inc. - Class A(c)	23,500		10,821,280
IAC/InterActiveCorp(b)(c)	155,700		5,785,812
Microsoft Corp.	668,100		19,949,466
Oracle Corp.(c)	783,600		13,430,904
			56,194,393
Electronics — 3.1%
Intel Corp.	920,500		18,640,125
L-3 Communications Holdings, Inc.	121,000		9,895,380
Vishay Intertechnology, Inc.(c)	564,600		7,644,684
			36,180,189
Energy & Utilities — 3.7%
Dynegy, Inc. - Class A(c)	21,576		156,210
FirstEnergy Corp.	143,300		8,628,093
FPL Group, Inc.	156,200		8,500,404
PG&E Corp.(b)	289,900		13,720,967
Sempra Energy	136,900		7,662,293
TXU Corp.	99,900		5,415,579
			44,083,546
Entertainment & Leisure — 2.3%
Sabre Holdings Corp.	282,300		9,002,547
The Walt Disney Co.(b)	548,100		18,783,387
			27,785,934
Finance — 5.2%
American Express Co.	246,600		14,961,222
AmeriCredit Corp.(c)	226,400		5,698,488
The Bear Stearns Cos., Inc.	48,200		7,845,996
CIT Group, Inc.	118,900		6,631,053
The Goldman Sachs Group, Inc.	60,200		12,000,870
Morgan Stanley	111,700		9,095,731
Washington Mutual, Inc.	127,900		5,818,171
			62,051,531
Food & Agriculture — 1.2%
Archer-Daniels-Midland Co.	185,100		5,915,796
General Mills, Inc.	141,000		8,121,600
			14,037,396
Insurance — 6.1%
Aetna, Inc.	209,700		9,054,846
The Allstate Corp.	149,800		9,753,478
American International Group, Inc.	105,700		7,574,462
CHUBB Corp.	158,300		8,375,653
MetLife, Inc.(b)	135,700		8,007,657
The St. Paul Travelers Cos., Inc.	217,000		11,650,730
UnumProvident Corp.	297,100		6,173,738
W.R. Berkley Corp.(b)	141,925		4,897,832
WellPoint, Inc.(c)	87,000		6,846,030
			72,334,426
Machinery & Heavy Equipment — 0.7%
Terex Corp.(b)(c)	123,200		7,956,256
Manufacturing — 7.8%
Cooper Industries Ltd. - Class A	80,800		7,306,744
Energizer Holdings, Inc.(c)	85,200		6,048,348
General Electric Co.(d)	1,047,500		38,977,475
Nucor Corp.(b)	193,500		10,576,710
Parker Hannifin Corp.(b)	108,600		8,349,168
Reynold American, Inc.(b)	83,900		5,492,933
Textron, Inc.	65,800		6,170,066
Whirlpool Corp.(b)	119,900		9,954,098
			92,875,542
Medical & Medical Services — 2.3%
Amgen, Inc.(c)	178,200		12,172,842
Coventry Health Care, Inc.(c)	169,006		8,458,750
McKesson Corp.	122,800		6,225,960
			26,857,552
Medical Instruments & Supplies — 2.6%
Beckman Coulter, Inc.(b)	121,200		7,247,760
Becton, Dickinson & Co.	115,600		8,109,340
Johnson & Johnson	238,200		15,725,964
			31,083,064
Metal & Mining — 0.5%
Freeport-McMoRan Copper & Gold, Inc. - Class B(b)	100,300		5,589,719
Motor Vehicles — 1.6%
Harley-Davidson, Inc.	127,100		8,956,737
PACCAR, Inc.(b)	160,450		10,413,205
			19,369,942
Oil & Gas — 9.6%
Chevron Corp.	108,600		7,985,358
ConocoPhillips	370,100		26,628,695

1

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SCHEDULE OF INVESTMENTS

INVESTMENT TRUST PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)		NUMBER OF SHARES	VALUE
COMMON STOCKS (Continued)
Oil & Gas (Continued)
ENSCO International, Inc.		206,500	$	10,337,390
Exxon Mobil Corp.		392,100		30,046,623
Marathon Oil Corp.		163,800		15,151,500
Schlumberger Ltd.		128,100		8,090,796
Valero Energy Corp.		117,000		5,985,720
XTO Energy, Inc.		199,200		9,372,360
				113,598,442
Paper & Paper Products — 0.5%
Temple-Inland, Inc.		130,000		5,983,900
Pharmaceuticals — 5.3%
Merck & Co., Inc.		421,800		18,390,480
Pfizer, Inc.		1,040,400		26,946,360
Wyeth		342,700		17,450,284
				62,787,124
Publishing & Printing — 0.7%
Idearc, Inc.(c)		15,974		457,655
The McGraw-Hill Cos., Inc.		111,100		7,557,022
				8,014,677
Railroad & Shipping — 1.1%
Union Pacific Corp.		140,400		12,919,608
Real Estate — 0.9%
ProLogis (REIT)		76,900		4,673,213
Simon Property Group, Inc. (REIT)(b)		59,900		6,067,271
				10,740,484
Restaurants — 1.0%
McDonald’s Corp.		263,700		11,689,821
Retail Merchandising — 4.4%
American Eagle Outfitters, Inc.(b)		182,600		5,698,946
Dillard’s, Inc. - Class A(b)		218,800		7,651,436
Federated Department Stores, Inc.(b)		231,100		8,811,843
J.C. Penney Co., Inc.(b)		104,700		8,099,592
The Kroger Co.		247,900		5,719,053
Limited Brands, Inc.		384,700		11,133,218
Office Depot, Inc.(b)(c)		134,400		5,130,048
				52,244,136
Security Brokers & Dealers — 0.8%
Lehman Brothers Holdings, Inc.(b)		126,800		9,905,616
Semiconductors & Related Devices — 1.1%
Lam Research Corp.(b)(c)		165,000		8,352,300
MEMC Electronic Materials, Inc.(c)		131,800		5,158,652
				13,510,952
Soaps & Cosmetics — 1.5%
Colgate-Palmolive Co.		129,000		8,415,960
The Procter & Gamble Co.		148,500		9,544,095
				17,960,055
Telecommunications — 5.1%
Amdocs Ltd.(c)		172,200		6,672,750
AT&T, Inc.(b)		528,500		18,893,875
BellSouth Corp.		90,800		4,277,588
Motorola, Inc.		638,100		13,119,336
Sprint Nextel Corp.(b)		336,137		6,349,628
Verizon Communications, Inc.		314,791		11,722,817
				61,035,994
Tires & Rubber — 0.6%
The Goodyear Tire & Rubber Co.(c)		330,300		6,932,997
Tobacco — 1.2%
Altria Group, Inc.		167,200		14,349,104
Transportation — 0.6%
Ryder Systems, Inc.		133,500		6,816,510
Waste Management — 0.8%
Allied Waste Industries, Inc.(c)		366,300		4,501,827
Waste Management, Inc.		122,600		4,508,002
				9,009,829
TOTAL COMMON STOCKS
(Cost $893,693,570)				1,183,028,877
SHORT TERM INVESTMENTS — 0.5%
Galileo Money Market Fund
(Cost $5,582,589)		5,582,589		5,582,589
TOTAL MARKET VALUE OF SECURITIES BEFORE SECURITIES LENDING COLLATERAL AND AFFILIATED INVESTMENTS — 100.1%
(Cost $899,276,159)				1,188,611,466
	MATURITY	PAR /SHARES (000)
SECURITIES LENDING COLLATERAL — 3.8%
Bank of America Corp., Master Notes
5.38%(e)(f)	01/02/07	15,325		15,324,710
The Bear Stearns Cos., Inc., Variable Rate Commercial Paper
5.38%(e)(f)	01/02/07	11,238		11,237,540
Citigroup, Inc., Master Notes
5.38%(e)(f)	01/02/07	3,257		3,257,223
Morgan Stanley, Variable Rate Commercial Paper
5.37%(e)(f)	01/02/07	14,861		14,861,368
TOTAL SECURITIES LENDING COLLATERAL
(Cost $44,680,841)				44,680,841
AFFILIATED INVESTMENTS — SHORT TERM — 9.8%
Institutional Money Market Trust(f)
(Cost $116,732,267)		116,732		116,732,267

2

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SCHEDULE OF INVESTMENTS

INVESTMENT TRUST PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	VALUE
TOTAL INVESTMENTS IN SECURITIES — 113.7%
(Cost $1,060,689,267(a))	$	1,350,024,574
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL — (13.6)%		(161,413,108	)
LIABILITIES IN EXCESS OF OTHER ASSETS — (0.1)%		(1,138,040	)
NET ASSETS — 100.0%	$	1,187,473,426

(a) Cost for federal income tax purposes is $1,060,606,806. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	293,139,504
Gross unrealized depreciation		(3,721,736	)
	$	289,417,768

(b) Total or partial security on loan.

(c) Non-income producing security.

(d) Security, or a portion thereof, pledged as collateral with a value of $1,934,920 on 16 long S&P 500 futures contracts expiring March 2007. The value of such contracts on December 31, 2006 was $5,713,600 with an unrealized gain of $6,200 (including commissions of $50).

(e) Variable rate security. Rates shown are the rates as of December 31, 2006.

(f) Security purchased with the cash proceeds from securities loaned.

3

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SCHEDULE OF INVESTMENTS

CAPITAL APPRECIATION PORTFOLIO (FORMERLY LEGACY PORTFOLIO)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS — 99.6%
Aerospace — 3.2%
The Boeing Co.	27,300	$	2,425,332
United Technologies Corp.	87,500		5,470,500
			7,895,832
Banks — 1.4%
Bank of America Corp.	67,500		3,603,825
Beverages & Bottling — 2.5%
PepsiCo, Inc.(b)	101,100		6,323,805
Computer & Office Equipment — 7.9%
Apple Computer, Inc.(c)	50,799		4,309,787
Cisco Systems, Inc.(c)	261,500		7,146,795
Hewlett-Packard Co.	197,400		8,130,906
			19,587,488
Computer Software & Services — 13.4%
Adobe Systems, Inc.(c)	144,000		5,921,280
Cognizant Technology Solutions Corp.(c)	47,200		3,641,952
EMC Corp.(c)	150,746		1,989,847
First Data Corp.	78,700		2,008,424
Google, Inc. - Class A(c)	22,761		10,480,986
Juniper Networks, Inc.(c)	126,300		2,392,122
Oracle Corp.(c)	65,800		1,127,812
Salesforce.com, Inc.(b)(c)	121,700		4,435,965
Sun Microsystems, Inc.(c)	241,800		1,310,556
			33,308,944
Entertainment & Leisure — 3.0%
Hilton Hotels Corp.(b)	168,900		5,894,610
Las Vegas Sands Corp.(b)(c)	16,800		1,503,264
			7,397,874
Finance — 9.5%
American Express Co.	103,150		6,258,110
Chicago Mercantile Exchange Holdings, Inc.(b)	11,314		5,767,312
The Goldman Sachs Group, Inc.	21,100		4,206,285
Morgan Stanley	35,200		2,866,336
NYSE Group, Inc.(b)(c)	32,300		3,139,560
UBS AG	21,000		1,266,930
			23,504,533
Food & Agriculture — 2.9%
Monsanto Co.	136,840		7,188,205
Insurance — 1.2%
American International Group, Inc.	41,200		2,952,392
Manufacturing — 16.0%
Cooper Industries Ltd. - Class A	28,269		2,556,366
Corning, Inc.(c)	339,400		6,350,174
Danaher Corp.	62,900		4,556,476
General Electric Co.	204,100		7,594,561
Honeywell International, Inc.	174,800		7,907,952
Polo Ralph Lauren Corp.(b)	42,900		3,331,614
Rockwell Automation, Inc.	61,500		3,756,420
Textron, Inc.	37,900		3,553,883
			39,607,446
Measuring & Controlling Devices — 1.9%
Thermo Electron Corp.(b)(c)	105,300		4,769,037
Medical & Medical Services — 2.0%
Henry Schein, Inc.(c)	48,700		2,385,326
UnitedHealth Group, Inc.	50,400		2,707,992
			5,093,318
Medical Instruments & Supplies — 1.9%
Johnson & Johnson	71,820		4,741,556
Metal & Mining — 1.6%
CONSOL Energy, Inc.	125,600		4,035,528
Oil & Gas — 4.9%
GlobalSantaFe Corp.(b)	71,759		4,217,994
Schlumberger Ltd.	82,600		5,217,016
Weatherford International Ltd.(c)	63,100		2,636,949
			12,071,959
Pharmaceuticals — 8.7%
Allergan, Inc.(b)	49,420		5,917,551
Amylin Pharmaceuticals, Inc.(b)(c)	30,900		1,114,563
Genentech, Inc.(c)	14,600		1,184,498
Genzyme Corp.(c)	73,700		4,538,446
Merck & Co., Inc.	112,500		4,905,000
Novartis AG - ADR	67,000		3,848,480
			21,508,538
Retail Merchandising — 4.2%
Federated Department Stores, Inc.(b)	93,000		3,546,090
Staples, Inc.	115,850		3,093,195
Wal-Mart Stores, Inc.	81,600		3,768,288
			10,407,573
Semiconductors & Related Devices — 2.8%
Marvell Technology Group Ltd.(b)(c)	30,900		592,971
PMC-Sierra, Inc.(b)(c)	268,300		1,800,293
Qimonda AG - ADR(c)	34,200		598,842
STMicroelectronics NV - NY Shares(b)	210,000		3,864,000
			6,856,106
Soaps & Cosmetics — 3.7%
The Procter & Gamble Co.	142,900		9,184,183
Telecommunications — 6.9%
American Tower Corp. - Class A	97,323		3,628,201
AT&T, Inc.(b)	132,500		4,736,875
Harman International Industries, Inc.	34,900		3,486,859
NII Holdings, Inc.(b)(c)	83,500		5,380,740
			17,232,675
TOTAL COMMON STOCKS
(Cost $199,416,941)			247,270,817
WARRANTS — 0.0%
Lucent Technologies, Inc. (issued 12/10/04, expiring 12/10/07, strike price $2.75)(d)
(Cost $7,813)	11,838		3,670

4

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SCHEDULE OF INVESTMENTS

CAPITAL APPRECIATION PORTFOLIO (FORMERLY LEGACY PORTFOLIO) (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)		PAR/SHARES (000)	VALUE
SHORT TERM INVESTMENTS — 0.5%
Galileo Money Market Fund
(Cost $1,367,924)		1,368	$	1,367,924
TOTAL MARKET VALUE OF SECURITIES BEFORE SECURITIES LENDING COLLATERAL AND AFFILIATED INVESTMENTS — 100.1%
(Cost $200,792,678)				248,642,411
	MATURITY
SECURITIES LENDING COLLATERAL — 1.4%
Bank of America Corp., Master Notes
5.38%(e)(f)	01/02/07	776		776,113
The Bear Stearns Cos., Inc., Variable Rate Commercial Paper
5.38%(e)(f)	01/02/07	430		429,729
Morgan Stanley, Variable Rate Commercial Paper
5.37%(e)(f)	01/02/07	2,269		2,269,197
TOTAL SECURITIES LENDING COLLATERAL
(Cost $3,475,039)				3,475,039
AFFILIATED INVESTMENTS — SHORT TERM — 18.9%
Institutional Money Market Trust(f)
(Cost $46,869,485)		46,869		46,869,485
TOTAL INVESTMENTS IN SECURITIES — 120.4%
(Cost $251,137,202(a))				298,986,935
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL — (20.3)%				(50,344,524	)
LIABILITIES IN EXCESS OF OTHER ASSETS — (0.1)%				(361,499	)
NET ASSETS — 100.0%			$	248,280,912

(a) Cost for federal income tax purposes is $251,660,803. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	50,588,085
Gross unrealized depreciation		(3,261,953	)
	$	47,326,132

(b) Total or partial security on loan.

(c) Non-income producing security.

(d) As of December 31, 2006, the aggregate amount of shares called for by these warrants is 12,138.These warrants were exercisable as of 12/10/04.

(e) Variable rate security. Rates shown are the rates as of December 31, 2006.

(f) Security purchased with the cash proceeds from securities loaned.

5

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

MID-CAP VALUE EQUITY PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS — 97.2%
Banks — 8.6%
City National Corp.(b)	137,200	$	9,768,640
Compass Bancshares, Inc.(b)	203,100		12,114,915
Cullen/Frost Bankers, Inc.	173,800		9,701,516
First Midwest Bancorp, Inc.	209,800		8,115,064
Hudson City Bancorp, Inc.	1,216,500		16,885,020
Wintrust Financial Corp.(b)	203,500		9,772,070
Zions Bancorporation	179,700		14,814,468
			81,171,693
Broadcasting — 2.0%
Belo Corp.(b)	722,926		13,287,380
Lin TV Corp.(c)	517,020		5,144,349
			18,431,729
Business Services — 5.4%
Amvescap PLC - ADR	475,100		11,711,215
The Brink’s Co.(b)	226,000		14,445,920
eFunds Corp.(c)	134,800		3,707,000
Hewitt Associates, Inc. - Class A(c)	350,200		9,017,650
National Financial Partners Corp.	102,575		4,510,223
W.W. Grainger, Inc.(b)	105,692		7,392,098
			50,784,106
Chemicals — 2.2%
Ashland, Inc.	104,900		7,256,982
Celanese Corp. - Series A	527,500		13,651,700
			20,908,682
Computer & Office Equipment — 1.5%
Electronics for Imaging, Inc.(c)	236,900		6,296,802
NCR Corp.(b)(c)	183,900		7,863,564
Phase Metrics, Inc.(c)(d)	108,409		2,168
			14,162,534
Computer Software & Services — 1.6%
Activision, Inc.(b)(c)	577,233		9,951,497
Unisys Corp.(c)	631,300		4,949,392
			14,900,889
Containers — 1.8%
Owens-Illinois, Inc.(b)(c)	618,700		11,415,015
Smurfit-Stone Container Corp.(c)	555,300		5,863,968
			17,278,983
Electronics — 2.2%
Agilent Technologies, Inc.(c)	255,500		8,904,175
L-3 Communications Holdings, Inc.	149,100		12,193,398
			21,097,573
Energy & Utilities — 12.2%
Constellation Energy Group, Inc.(b)	228,200		15,716,134
Edison International	328,500		14,940,180
Equitable Resources, Inc.(b)	351,000		14,654,250
KBR, Inc.(c)	232,200		6,074,352
NRG Energy, Inc.(b)(c)	247,600		13,868,076
PPL Corp.	454,400		16,285,696
Public Service Enterprise Group, Inc.(b)	248,300		16,482,154
Questar Corp.	199,600		16,576,780
			114,597,622
Entertainment & Leisure — 1.0%
Hilton Hotels Corp.(b)	279,200		9,744,080
Finance — 6.8%
AllianceBernstein Holding LP	64,692		5,201,237
Ambac Financial Group, Inc.	181,150		16,135,030
Capital One Financial Corp.	172,000		13,213,040
CIT Group, Inc.	260,800		14,544,816
Freedom Pay, Inc.(d)	43,051		431
Mellon Financial Corp.(b)	342,200		14,423,730
			63,518,284
Food & Agriculture — 3.3%
Bunge Ltd.(b)	54,900		3,980,799
Del Monte Foods Co.	1,397,200		15,411,116
Pilgrim’s Pride Corp.	390,300		11,486,529
			30,878,444
Insurance — 8.2%
Aspen Insurance Holdings Ltd.	559,400		14,745,784
Axis Capital Holdings Ltd.	369,800		12,340,226
Conseco, Inc.(b)(c)	793,100		15,846,138
Endurance Specialty Holdings Ltd.	431,521		15,785,038
XL Capital Ltd.(b)	247,300		17,810,546
			76,527,732
Manufacturing — 3.6%
Callaway Golf Co.	450,205		6,487,454
Lennox International, Inc.	166,000		5,081,260
Textron, Inc.	142,500		13,362,225
The Warnaco Group, Inc.(c)	332,600		8,441,388
			33,372,327
Medical & Medical Services — 2.4%
Coventry Health Care, Inc.(c)	219,900		11,005,995
Triad Hospitals, Inc.(c)	281,000		11,754,230
			22,760,225
Medical Instruments & Supplies — 1.7%
The Cooper Cos., Inc.(b)	136,200		6,060,900
Hillenbrand Industries, Inc.	171,966		9,790,024
			15,850,924
Metal & Mining — 2.2%
CONSOL Energy, Inc.	251,200		8,071,056
Massey Energy Co.(b)	341,308		7,928,585
United States Steel Corp.	65,000		4,754,100
			20,753,741
Oil & Gas — 6.0%
AGL Resources, Inc.	381,200		14,832,492
Diamond Offshore Drilling, Inc.(b)	159,100		12,718,454
EOG Resources, Inc.	139,400		8,705,530
Newfield Exploration Co.(c)	286,900		13,183,055
Rowan Cos., Inc.	207,500		6,889,000
			56,328,531
Publishing & Printing — 3.3%
Dow Jones & Co., Inc.(b)	153,900		5,848,200
R.R. Donnelley & Sons Co.	521,500		18,534,110
Tribune Co.(b)	216,100		6,651,558
			31,033,868

6

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

MID-CAP VALUE EQUITY PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)		NUMBER OF SHARES		VALUE
COMMON STOCKS (Continued)
Railroad & Shipping — 0.8%
CSX Corp.			208,600	$	7,182,098
Real Estate — 4.9%
Boston Properties, Inc. (REIT)(b)			136,100		15,226,868
ProLogis (REIT)			236,500		14,372,105
Simon Property Group, Inc. (REIT)(b)			160,900		16,297,561
					45,896,534
Restaurants — 0.7%
CKE Restaurants, Inc.			371,900		6,842,960
Retail Merchandising — 8.0%
Advance Auto Parts, Inc.			284,100		10,102,596
Borders Group, Inc.(b)			563,300		12,589,755
Central Garden & Pet Co.(c)			223,100		10,802,502
Federated Department Stores, Inc.(b)			125,100		4,770,063
Hot Topic, Inc.(c)			358,100		4,777,054
The Kroger Co.			282,200		6,510,354
Saks, Inc.(b)			382,100		6,809,022
Supervalu, Inc.(b)			402,900		14,403,675
The Talbots, Inc.(b)			199,974		4,819,374
					75,584,395
Security Brokers & Dealers — 0.8%
Piper Jaffray Cos., Inc.(c)			111,500		7,264,225
Semiconductors & Related Devices — 0.5%
Marvell Technology Group Ltd.(b)(c)			255,500		4,903,045
Soaps & Cosmetics — 0.6%
Estee Lauder Cos., Inc.			133,900		5,465,798
Telecommunications — 2.4%
Amdocs Ltd.(c)			364,100		14,108,875
Andrew Corp.(b)(c)			789,500		8,076,585
					22,185,460
Tires & Rubber — 0.9%
Cooper Tire & Rubber Co.(b)			569,626		8,145,652
Tobacco — 1.6%
Carolina Group			238,200		15,416,304
TOTAL COMMON STOCKS
(Cost $756,463,376)					912,988,438
	MATURITY	PAR /SHARES (000)
SHORT TERM INVESTMENTS — 3.8%
Federal Home Loan Bank,
Discount Notes
4.80%(e)	01/02/07	$	3,000		2,999,600
5.16%(e)	01/12/07		22,000		21,965,347
Galileo Money Market Fund			9,979		9,979,398
TOTAL SHORT TERM INVESTMENTS
(Cost $34,944,345)					34,944,345
TOTAL MARKET VALUE OF SECURITIES BEFORE SECURITIES LENDING COLLATERAL AND AFFILIATED INVESTMENTS — 101.0%
(Cost $791,407,721)					947,932,783
SECURITIES LENDING COLLATERAL — 3.7%
Bank of America Corp., Master Notes
5.38%(f)(g)	01/02/07		17,367		17,367,375
The Bear Stearns Cos., Inc., Variable Rate Commercial Paper
5.38%(f)(g)	01/02/07		6,910		6,909,626
Morgan Stanley, Variable Rate Commercial Paper
5.37%(f)(g)	01/02/07		9,999		9,999,220
TOTAL SECURITIES LENDING COLLATERAL
(Cost $34,276,221)					34,276,221
AFFILIATED INVESTMENTS- SHORT TERM — 18.6%
Institutional Money Market Trust(g)
(Cost $175,314,155)			175,314		175,314,155
TOTAL INVESTMENTS IN SECURITIES — 123.3%
(Cost $1,000,998,097(a))					1,157,523,159
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL —(22.3)%					(209,590,376	)
LIABILITIES IN EXCESS OF OTHER ASSETS — (1.0)%					(8,969,805	)
NET ASSETS — 100.0%				$	938,962,978

(a) Cost for federal income tax purposes is $1,024,767,181. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	136,299,999
Gross unrealized depreciation		(3,544,021	)
	$	132,755,978

(b) Total or partial security on loan.

(c) Non-income producing security.

(d) Security valued at fair value as determined in good faith by or under the direction of the Board of Trustees. As of December 31, 2006, these securities had a total market value of $ 2,599 which represents less than 0.1% of net assets.

(e) The rate shown is the effective yield at the time of purchase.

(f) Variable rate security. Rates shown are the rates as of December 31, 2006.

(g) Security purchased with the cash proceeds from securities loaned.

7

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

MID-CAP GROWTH EQUITY PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS — 99.4%
Aerospace — 3.1%
Goodrich Corp.	156,200	$	7,114,910
Spirit Aerosystems Holdings, Inc. - Class A(b)	159,483		5,337,896
			12,452,806
Banks — 0.7%
Greenhill & Co., Inc.(c)	37,200		2,745,360
Broadcasting — 0.9%
CKX, Inc.(b)	323,000		3,788,790
Business Services — 5.2%
Alliance Data Systems Corp.(b)(c)	122,100		7,627,587
Amvescap PLC - ADR	135,300		3,335,145
Global Payments, Inc.	114,700		5,310,610
Investors Financial Services Corp.(c)	106,200		4,531,554
			20,804,896
Chemicals — 2.1%
Air Products & Chemicals, Inc.	50,500		3,549,140
Celanese Corp. - Series A	186,900		4,836,972
			8,386,112
Computer Software & Services — 13.7%
Adobe Systems, Inc.(b)	162,100		6,665,552
CACI International, Inc.(b)	164,800		9,311,200
Ceridian Corp.(b)	172,000		4,812,560
Foundry Networks, Inc.(b)	319,800		4,790,604
IHS, Inc.(b)	155,400		6,135,192
Ingram Micro, Inc. - Class A(b)	248,400		5,069,844
International Game Technology	90,600		4,185,720
Juniper Networks, Inc.(b)(c)	207,000		3,920,580
Transaction Systems Architects, Inc.(b)	190,700		6,211,099
VeriFone Holdings, Inc.(b)(c)	110,600		3,915,240
			55,017,591
Electronics — 5.1%
Ametek, Inc.	194,600		6,196,064
Amphenol Corp.	106,600		6,617,728
Cogent, Inc.(b)(c)	182,600		2,010,426
FLIR Systems, Inc.(b)(c)	182,500		5,808,975
			20,633,193
Energy & Utilities — 2.2%
Airgas, Inc.	136,200		5,518,824
Questar Corp.(c)	38,600		3,205,730
			8,724,554
Entertainment & Leisure — 6.0%
Hilton Hotels Corp.	165,400		5,772,460
Melco PBL Entertainment Ltd. - ADR(b)	20,700		440,082
Orient-Express Hotels Ltd. - Class A	159,400		7,542,808
Scientific Games Corp. - Class A(b)(c)	197,900		5,982,517
Station Casinos, Inc.(c)	53,100		4,336,677
			24,074,544
Finance — 3.5%
Chicago Mercantile Exchange Holdings, Inc.(c)	15,200		7,748,200
Nasdaq Stock Market, Inc.(b)(c)	129,000		3,971,910
Nymex Holdings, Inc.(b)(c)	2,500		310,025
T. Rowe Price Group, Inc.	44,600		1,952,142
			13,982,277
Food & Agriculture — 0.9%
Panera Bread Co. - Class A(b)(c)	62,700		3,505,557
Insurance — 0.5%
Axis Capital Holdings Ltd.	60,400		2,015,548
Machinery & Heavy Equipment — 1.0%
Joy Global, Inc.(c)	86,200		4,166,908
Manufacturing — 3.8%
Gardner Denver, Inc.(b)	57,600		2,149,056
IDEX Corp.	155,900		7,391,219
Precision Castparts Corp.	71,300		5,581,364
			15,121,639
Measuring & Controlling Devices — 2.3%
Thermo Electron Corp.(b)(c)	202,800		9,184,812
Medical & Medical Services — 5.1%
Coventry Health Care, Inc.(b)	77,450		3,876,372
LifePoint Hospitals, Inc.(b)	120,400		4,057,480
Medco Health Solutions, Inc.(b)	112,300		6,001,312
Omnicare, Inc.(c)	114,600		4,426,998
Pediatrix Medical Group, Inc.(b)	41,800		2,044,020
			20,406,182
Medical Instruments & Supplies — 2.3%
Martek Biosciences Corp.(b)	177,500		4,142,850
Varian Medical Systems, Inc.(b)	108,600		5,166,102
			9,308,952
Metal & Mining — 4.2%
Century Aluminum Co.(b)	122,400		5,465,160
CONSOL Energy, Inc.(c)	182,600		5,866,938
Massey Energy Co.(c)	236,000		5,482,280
			16,814,378
Motor Vehicles — 1.1%
Oshkosh Truck Corp.	93,500		4,527,270
Oil & Gas — 6.9%
Acergy SA - ADR(b)	190,800		3,674,808
BJ Services Co.	63,100		1,850,092
Chesapeake Energy Corp.(c)	109,500		3,180,975
ENSCO International, Inc.(c)	77,300		3,869,638
EOG Resources, Inc.	62,000		3,871,900
Grant Prideco, Inc.(b)	112,900		4,490,033
Newfield Exploration Co.(b)	145,105		6,667,575
			27,605,021
Personal Services — 1.1%
Laureate Education, Inc.(b)(c)	89,600		4,357,248
Pharmaceuticals — 4.1%
Endo Pharmaceuticals Holdings, Inc.(b)	168,300		4,641,714
IMS Health, Inc.	145,300		3,992,844
Shire PLC - ADR	125,356		7,741,987
			16,376,545

8

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

MID-CAP GROWTH EQUITY PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)		NUMBER OF SHARES		VALUE
COMMON STOCKS (Continued)
Railroad & Shipping — 1.1%
UTI Worldwide, Inc.			156,300	$	4,673,370
Restaurants — 0.5%
Ruby Tuesday, Inc.(c)			76,500		2,099,160
Retail Merchandising — 8.5%
Abercrombie & Fitch Co. - Class A			30,600		2,130,678
Advance Auto Parts, Inc.			138,900		4,939,284
Coach, Inc.(b)			85,900		3,690,264
Dick’s Sporting Goods, Inc.(b)(c)			79,800		3,909,402
GameStop Corp.(b)(c)			153,800		8,475,918
Staples, Inc.			187,772		5,013,512
TJX Cos., Inc.			212,700		6,057,696
					34,216,754
Semiconductors & Related Devices — 3.6%
Integrated Device Technology, Inc.(b)			259,700		4,020,156
Lam Research Corp.(b)(c)			128,393		6,499,254
PMC-Sierra, Inc.(b)(c)			567,400		3,807,254
					14,326,664
Telecommunications — 9.1%
Amdocs Ltd.(b)			302,400		11,718,000
American Tower Corp. - Class A(c)			145,300		5,416,784
Comverse Technology, Inc.(b)(c)			138,800		2,930,068
Harris Corp.			226,400		10,382,704
Polycom, Inc.(b)(c)			202,000		6,243,820
					36,691,376
Transportation — 0.8%
Landstar System, Inc.(c)			85,100		3,249,118
TOTAL COMMON STOCKS
(Cost $328,295,119)					399,256,625
SHORT TERM INVESTMENTS — 0.9%
Galileo Money Market Fund
(Cost $3,687,887)			3,687,887		3,687,887
TOTAL MARKET VALUE OF SECURITIES BEFORE SECURITIES LENDING COLLATERAL AND AFFILIATED INVESTMENTS — 100.3%
(Cost $331,983,006)					402,944,512
	MATURITY	PAR /SHARES (000)
SECURITIES LENDING COLLATERAL — 1.3%
Bank of America Corp., Master Notes
5.38%(d)(e)	01/02/07	$	3,756		3,755,825
Morgan Stanley, Variable Rate Commercial Paper
5.37%(d)(e)	01/02/07		1,190		1,189,544
TOTAL SECURITIES LENDING COLLATERAL
(Cost $4,945,369)					4,945,369
AFFILIATED INVESTMENTS - SHORT TERM — 25.4%
Institutional Money Market Trust(e)
(Cost $102,102,296)			102,102,296		102,102,296
TOTAL INVESTMENTS IN SECURITIES — 127.0%
(Cost $439,030,671(a))					509,992,177
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL — (26.7)%					(107,047,665	)
LIABILITIES IN EXCESS OF OTHER ASSETS — (0.3)%					(1,369,869	)
NET ASSETS — 100.0%					401,574,643

(a) Cost for federal income tax purposes is $439,249,798. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	85,674,051
Gross unrealized depreciation		(14,931,671	)
	$	70,742,379

(b) Non-income producing security.

(c) Total or partial security on loan.

(d) Variable rate security. Rates shown are the rates as of December 31, 2006.

(e) Security purchased with the cash proceeds from securities loaned.

9

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

AURORA PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS — 97.5%
Aerospace — 1.7%
Goodrich Corp.	437,000	$	19,905,350
Spirit Aerosystems Holdings, Inc. - Class A(b)	368,723		12,341,159
			32,246,509
Banks — 8.0%
Colonial BancGroup, Inc.	664,400		17,101,656
Compass Bancshares, Inc.(c)	281,200		16,773,580
Cullen/Frost Bankers, Inc.	461,800		25,777,676
First Midwest Bancorp, Inc.	466,400		18,040,352
KBW, Inc.(b)	36,200		1,063,918
Sterling Bancshares, Inc.	1,475,011		19,204,643
Webster Financial Corp.	383,432		18,680,807
Wintrust Financial Corp.(c)	273,300		13,123,866
Zions Bancorporation	251,000		20,692,440
			150,458,938
Business Services — 7.1%
Amvescap PLC - ADR	331,600		8,173,940
The Brink’s Co.(c)	809,400		51,736,848
Manpower, Inc.(c)	231,300		17,331,309
National Financial Partners Corp.	189,007		8,310,638
Robert Half International, Inc.(c)	805,100		29,885,312
W.W. Grainger, Inc.(c)	250,900		17,547,946
			132,985,993
Chemicals — 0.7%
Celanese Corp. - Series A	490,600		12,696,728
Computer & Office Equipment — 3.5%
Electronics for Imaging, Inc.(b)	1,460,300		38,814,774
NCR Corp.(b)(c)	629,900		26,934,524
			65,749,298
Computer Software & Services — 5.5%
Blackboard, Inc.(b)	710,600		21,346,424
CACI International, Inc.(b)	196,200		11,085,300
Foundry Networks, Inc.(b)	906,600		13,580,868
Ingram Micro, Inc. - Class A(b)	611,400		12,478,674
Sybase, Inc.(b)	1,100,500		27,182,350
TIBCO Software, Inc.(b)	1,827,100		17,247,824
			102,921,440
Construction — 0.6%
Chicago Bridge & Iron Co. NV - ADR	392,600		10,733,684
Containers — 1.6%
Crown Holdings, Inc.(b)	1,390,600		29,091,352
Electronics — 1.0%
Amphenol Corp.	289,000		17,941,120
Energy & Utilities — 7.3%
CMS Energy Corp.(b)(c)	888,200		14,832,940
Equitable Resources, Inc.(c)	315,100		13,155,425
KBR, Inc.(b)	504,000		13,184,640
MDU Resources Group, Inc.	1,084,700		27,811,708
NRG Energy, Inc.(b)(c)	334,700		18,746,547
Questar Corp.	220,800		18,337,440
Wisconsin Energy Corp.	625,700		29,695,722
			135,764,422
Entertainment & Leisure — 8.1%
Hasbro, Inc.	350,008		9,537,718
Melco PBL Entertainment Ltd. - ADR(b)	981,200		20,860,312
Orient-Express Hotels Ltd. - Class A	813,500		38,494,820
Penn National Gaming, Inc.(b)	653,300		27,190,346
Pinnacle Entertainment, Inc.(b)	456,200		15,118,468
Station Casinos, Inc.	287,900		23,512,793
Steiner Leisure Ltd.(b)	369,400		16,807,700
			151,522,157
Finance — 1.9%
Affiliated Managers Group, Inc.(b)(c)	346,500		36,427,545
Food & Agriculture — 2.2%
Hain Celestial Group, Inc.(b)	1,292,208		40,329,812
Furniture — 0.4%
Walter Industries, Inc.	266,900		7,219,645
Insurance — 5.5%
Aspen Insurance Holdings Ltd.	785,100		20,695,236
Endurance Specialty Holdings Ltd.	851,502		31,147,943
The Hanover Insurance Group, Inc.	215,134		10,498,539
IPC Holdings Ltd.	272,500		8,570,125
Platinum Underwriters Holdings Ltd.	1,050,000		32,487,000
			103,398,843
Manufacturing — 4.7%
Commercial Metals Co.	607,830		15,682,014
Hexel Corp.(b)(c)	779,400		13,569,354
Mattel, Inc.	501,900		11,373,054
Phillips - Van Heusen Corp.	150,300		7,540,551
Polo Ralph Lauren Corp.	180,400		14,009,864
Roper Industries, Inc.(c)	228,500		11,479,840
The Scotts Miracle-Gro Co. - Class A	199,100		10,283,515
VF Corp.	50,300		4,128,624
			88,066,816
Medical & Medical Services — 3.2%
Coventry Health Care, Inc.(b)	266,100		13,318,305
Davita, Inc.(b)	372,800		21,204,864
Magellan Health Services, Inc.(b)	568,100		24,553,282
			59,076,451
Medical Instruments & Supplies — 1.7%
DENTSPLY International, Inc.	619,700		18,498,045
Viasys Healthcare, Inc.(b)	509,356		14,170,284
			32,668,329
Metal & Mining — 2.2%
CONSOL Energy, Inc.	216,800		6,965,784
United States Steel Corp.	457,300		33,446,922
			40,412,706
Oil & Gas — 3.7%
Cameron International Corp.(b)	305,200		16,190,860
FMC Technologies, Inc.(b)	163,300		10,064,179

10

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

AURORA PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)		NUMBER OF SHARES	VALUE
COMMON STOCKS (Continued)
Oil & Gas (Continued)
Helix Energy Solutions Group, Inc.(b)		248,700	$	7,801,719
Range Resources Corp.		512,500		14,073,250
Rowan Cos., Inc.		281,600		9,349,120
Southwestern Energy Co.(b)		356,900		12,509,345
				69,988,473
Personal Services — 0.8%
Laureate Education, Inc.(b)(c)		307,000		14,929,410
Publishing & Printing — 1.3%
R.R. Donnelley & Sons Co.		679,100		24,135,214
Real Estate — 4.8%
Alexandria Real Estate Equities, Inc. (REIT)		304,700		30,591,880
BioMed Realty Trust, Inc. (REIT)		434,200		12,418,120
Douglas Emmett, Inc. (REIT)		466,400		12,401,576
The Macerich Co. (REIT)		186,200		16,119,334
Mack-Cali Realty Corp. (REIT)		359,000		18,309,000
				89,839,910
Restaurants — 1.0%
Landry’s Restaurants, Inc.(c)		620,339		18,666,000
Retail Merchandising — 10.9%
Advance Auto Parts, Inc.		861,300		30,627,828
BJ’s Wholesale Club, Inc.(b)		733,300		22,812,963
Central Garden & Pet Co.(b)		209,300		10,134,306
Jarden Corp.(b)(c)		705,900		24,558,261
Payless ShoeSource, Inc.(b)		515,100		16,905,582
Saks, Inc.(c)		1,588,069		28,299,389
Supervalu, Inc.(c)		1,876,800		67,095,600
The Talbots, Inc.(c)		153,549		3,700,531
				204,134,460
Security Brokers & Dealers — 2.2%
Piper Jaffray Cos., Inc.(b)		620,400		40,419,060
Semiconductors & Related Devices — 1.0%
Agere Systems, Inc.(b)(c)		240,900		4,618,053
Integrated Device Technology, Inc.(b)		950,402		14,712,223
				19,330,276
Soaps & Cosmetics — 0.5%
NU Skin Enterprises, Inc.		500,000		9,115,000
Telecommunications — 2.2%
Amdocs Ltd.(b)		501,800		19,444,750
Ciena Corp.(b)		1		28
Dobson Communications Corp. - Class A(b)		2,506,300		21,829,873
				41,274,651
Transportation — 2.2%
American Commercial Lines, Inc.(b)(c)		159,700		10,461,947
Kirby Corp.(b)		443,500		15,136,655
Landstar System, Inc.		386,200		14,745,116
				40,343,718
TOTAL COMMON STOCKS
(Cost $1,562,942,140)				1,821,887,960
	MATURITY	PAR/SHARES (000)
SHORT TERM INVESTMENTS — 1.1%
Federal Home Loan Bank, Discount Notes
4.80%(d)	01/02/07	11,000		10,995,600
Galileo Money Market Fund		9,503		9,503,232
TOTAL SHORT TERM INVESTMENTS
(Cost $20,498,832)				20,498,832
TOTAL MARKET VALUE OF SECURITIES BEFORE SECURITIES LENDING COLLATERAL AND AFFILIATED INVESTMENTS — 98.6%
(Cost $1,583,440,972)				1,842,386,792
SECURITIES LENDING COLLATERAL — 0.2%
Bank of America Corp., Master Notes
5.38%(e)(f)	01/02/07	1,385		1,385,017
Morgan Stanley, Variable Rate Commercial Paper
5.37%(e)(f)	01/02/07	2,870		2,870,275
TOTAL SECURITIES LENDING COLLATERAL
(Cost $4,255,292)				4,255,292
AFFILIATED INVESTMENTS - SHORT TERM — 15.5%
Institutional Money Market Trust(f)
(Cost $290,287,027)		290,287		290,287,027
TOTAL INVESTMENTS IN SECURITIES — 114.3%
(Cost $1,877,983,291(a))				2,136,929,111
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL — (15.7)%				(294,542,319	)
OTHER ASSETS IN EXCESS OF LIABILITIES — 1.4%				26,397,531
NET ASSETS — 100.0%			$	1,868,784,323

(a) Cost for federal income tax purposes is $1,888,244,902. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	257,819,596
Gross unrealized depreciation		(9,135,386	)
	$	248,684,209

(b) Non-income producing security.

(c) Total or partial security on loan.

(d) The rate shown is the effective yield at the time of purchase.

(e) Variable rate security. Rates shown are the rates as of December 31, 2006.

(f) Security purchased with the cash proceeds from securities loaned.

11

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

SMALL/MID-CAP GROWTH PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS — 101.0%
Aerospace — 4.1%
Armor Holdings, Inc.(b)	53,200	$	2,918,020
BE Aerospace, Inc.(b)(c)	146,700		3,767,256
Goodrich Corp.	71,700		3,265,935
Spirit Aerosystems Holdings, Inc. - Class A(b)	40,500		1,355,535
			11,306,746
Banks — 2.6%
Greenhill & Co., Inc.(c)	40,800		3,011,040
Signature Bank(b)	61,200		1,895,976
UMB Financial Corp.	58,200		2,124,882
			7,031,898
Broadcasting — 1.8%
CKX, Inc.(b)	420,900		4,937,157
Business Services — 10.8%
Advisory Board Co.(b)	74,800		4,004,792
Amvescap PLC - ADR	151,100		3,724,615
eFunds Corp.(b)	162,600		4,471,500
Exlservice Holdings, Inc.(b)	135,600		2,853,024
Gartner, Inc. - Class A(b)	141,923		2,808,656
Global Payments, Inc.	97,500		4,514,250
Investors Financial Services Corp.(c)	70,300		2,999,701
Net1 UEPS Technologies, Inc.(b)	141,800		4,191,608
			29,568,146
Chemicals — 2.0%
Celanese Corp. - Series A	215,300		5,571,964
Computer Software & Services — 17.1%
Blackboard, Inc.(b)	129,200		3,881,168
CACI International, Inc.(b)	73,100		4,130,150
Ceridian Corp.(b)	140,255		3,924,335
Foundry Networks, Inc.(b)	165,000		2,471,700
IHS, Inc.(b)	151,300		5,973,324
Ingram Micro, Inc. - Class A(b)	156,200		3,188,042
Move, Inc.(b)	687,200		3,786,472
SkillSoft PLC - ADR(b)	875,100		5,434,371
SonicWALL, Inc.(b)	744,300		6,267,006
Transaction Systems Architects, Inc.(b)	137,500		4,478,375
VeriFone Holdings, Inc.(b)(c)	97,800		3,462,120
			46,997,063
Electronics — 2.1%
Ametek, Inc.	103,200		3,285,888
FLIR Systems, Inc.(b)(c)	74,300		2,364,969
			5,650,857
Energy & Utilities — 2.2%
Airgas, Inc.	83,778		3,394,685
Questar Corp.(c)	33,200		2,757,260
			6,151,945
Entertainment & Leisure — 3.0%
Melco PBL Entertainment Ltd. - ADR(b)	7,600		161,576
Orient - Express Hotels Ltd. - Class A	93,100		4,405,492
Scientific Games Corp. - Class A(b)(c)	122,200		3,694,106
			8,261,174
Finance — 3.6%
Affiliated Managers Group, Inc.(b)(c)	27,800		2,922,614
Nasdaq Stock Market, Inc.(b)	58,300		1,795,057
Nymex Holdings, Inc.(b)(c)	1,400		173,614
Wright Express Corp.(b)(c)	157,100		4,896,807
			9,788,092
Food & Agriculture — 0.8%
Panera Bread Co. - Class A(b)(c)	38,000		2,124,580
Machinery & Heavy Equipment — 1.2%
Joy Global, Inc.(c)	69,000		3,335,460
Manufacturing — 4.3%
Gardner Denver, Inc.(b)	122,000		4,551,820
Sirona Dental Systems, Inc.	74,100		2,853,591
The Warnaco Group, Inc.(b)	178,200		4,522,716
			11,928,127
Medical & Medical Services — 7.0%
Coventry Health Care, Inc.(b)	97,460		4,877,873
Digene Corp.(b)	89,641		4,295,597
Noven Pharmaceuticals, Inc.(b)	111,200		2,830,040
Omnicare, Inc.(c)	62,400		2,410,512
Pediatrix Medical Group, Inc.(b)	100,300		4,904,670
			19,318,692
Medical Instruments & Supplies — 5.7%
Hologic, Inc.(b)(c)	67,000		3,167,760
Kyphon, Inc.(b)(c)	79,700		3,219,880
Martek Biosciences Corp.(b)	117,300		2,737,782
Varian Medical Systems, Inc.(b)	51,200		2,435,584
Wright Medical Group, Inc.(b)	172,748		4,021,573
			15,582,579
Metal & Mining — 3.3%
Century Aluminum Co.(b)	54,500		2,433,425
CONSOL Energy, Inc.(c)	78,100		2,509,353
Massey Energy Co.(c)	174,400		4,051,312
			8,994,090
Oil & Gas — 5.4%
Diamond Offshore Drilling, Inc.(c)	38,100		3,045,714
ENSCO International, Inc.(c)	53,692		2,687,821
Grant Prideco, Inc.(b)(c)	65,000		2,585,050
National - Oilwell, Inc.(b)(c)	44,000		2,691,920
Superior Energy Services, Inc.(b)	113,800		3,718,984
			14,729,489
Personal Services — 1.5%
Laureate Education, Inc.(b)(c)	82,800		4,026,564
Pharmaceuticals — 5.0%
Barr Pharmaceuticals, Inc.(b)	53,800		2,696,456
Endo Pharmaceuticals Holdings, Inc.(b)	159,600		4,401,768
IMS Health, Inc.	99,420		2,732,062
Shire PLC - ADR	63,300		3,909,408
			13,739,694
Restaurants — 0.8%
Ruth’s Chris Steak House, Inc.(b)	127,100		2,323,388
Retail Merchandising — 4.6%
Advance Auto Parts, Inc.	59,500		2,115,820

12

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

SMALL/MID-CAP GROWTH PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)		NUMBER OF SHARES		VALUE
COMMON STOCKS (Continued)
Retail Merchandising (Continued)
The Children’s Place Retail Stores, Inc.(b)			39,900	$	2,534,448
Dick’s Sporting Goods, Inc.(b)(c)			85,315		4,179,582
GameStop Corp.(b)(c)			67,500		3,719,925
					12,549,775
Semiconductors & Related Devices — 4.6%
Cymer, Inc.(b)			63,200		2,777,640
Integrated Device Technology, Inc.(b)(c)			182,200		2,820,456
Microsemi Corp.(b)			144,400		2,837,460
Standard Microsystems Corp.(b)			145,700		4,076,686
					12,512,242
Telecommunications — 6.7%
Amdocs Ltd.(b)			152,500		5,909,375
American Tower Corp. - Class A(c)			96,800		3,608,704
Comverse Technology, Inc.(b)(c)			111,300		2,349,543
Harris Corp.			78,900		3,618,354
Polycom, Inc.(b)(c)			96,942		2,996,477
					18,482,453
Transportation — 0.8%
Landstar System, Inc.(c)			57,600		2,199,168
TOTAL COMMON STOCKS
(Cost $229,095,112)					277,111,343
SHORT TERM INVESTMENTS — 0.7%
Galileo Money Market Fund
(Cost $1,848,324)			1,848,324		1,848,324
TOTAL MARKET VALUE OF SECURITIES BEFORE SECURITIES LENDING COLLATERAL AND AFFILIATED INVESTMENTS — 101.7%
(Cost $230,943,436)					278,959,667
	MATURITY	PAR/SHARES (000)
SECURITIES LENDING COLLATERAL — 1.3%
Bank of America Corp., Master Notes
5.38%(d)(e)	01/02/07	$	2,816		2,815,579
Citigroup, Inc., Master Notes
5.38%(d)(e)	01/02/07		621		621,099
TOTAL SECURITIES LENDING COLLATERAL
(Cost $3,436,678)					3,436,678
AFFILIATED INVESTMENTS - SHORT TERM — 26.6%
Institutional Money Market Trust(e)
(Cost $73,336,091)			73,336		73,336,091
TOTAL INVESTMENTS IN SECURITIES — 129.6%
(Cost $307,716,205(a))					355,732,436
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL — (28.0)%					(76,772,769	)
LIABILITIES IN EXCESS OF OTHER ASSETS — (1.6)%					(4,538,901	)
NET ASSETS — 100.0%				$	274,420,766

(a) Cost for federal income tax purposes is $308,571,960. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	53,172,744
Gross unrealized depreciation		(6,012,268	)
	$	47,160,476

(b) Non-income producing security.

(c) Total or partial security on loan.

(d) Variable rate security. Rates shown are the rates as of December 31, 2006.

(e) Security purchased with the cash proceeds from securities loaned.

13

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

SMALL CAP VALUE EQUITY PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS — 97.2%
Aerospace — 1.7%
K&F Industries Holdings, Inc.(b)(c)	23,000	$	522,330
Orbital Sciences Corp.(b)	49,300		909,092
			1,431,422
Banks — 13.4%
Boston Private Financial Holdings, Inc.	42,900		1,210,209
Cathay General Bancorp(c)	20,800		717,808
Central Pacific Financial Corp.	22,300		864,348
Columbia Banking System, Inc.	13,400		470,608
First Midwest Bancorp, Inc.	35,600		1,377,008
First Niagara Financial Group, Inc.	87,900		1,306,194
First State Bancorporation	19,300		477,675
KBW, Inc.(b)	32,000		940,480
Sterling Financial Corp.	26,160		884,470
Taylor Capital Group, Inc.	17,800		651,658
Umpqua Holdings Corp.	37,344		1,099,034
Wintrust Financial Corp.(c)	17,200		825,944
WSFS Financial Corp.	9,194		615,354
			11,440,790
Broadcasting — 0.5%
Outdoor Channel Holdings, Inc.(b)	31,300		401,579
Business Services — 3.2%
The Brink’s Co.(c)	36,900		2,358,648
National Financial Partners Corp.	8,310		365,391
			2,724,039
Computer & Office Equipment — 3.4%
Electronics for Imaging, Inc.(b)	50,100		1,331,658
Imation Corp.	33,600		1,560,048
			2,891,706
Computer Software & Services — 4.0%
CACI International, Inc.(b)	11,700		661,050
Emulex Corp.(b)	26,100		509,211
Hyperion Solutions Corp.(b)	14,800		531,912
Lawson Software, Inc.(b)	69,500		513,605
TIBCO Software, Inc.(b)	132,700		1,252,688
			3,468,466
Construction — 3.5%
Dycom Industries, Inc.(b)	14,400		304,128
Texas Industries, Inc.	21,700		1,393,791
Washington Group International, Inc.(b)	21,200		1,267,548
			2,965,467
Containers — 1.4%
Silgan Holdings, Inc.	27,200		1,194,624
Electronics — 0.6%
Directed Electronics, Inc.(b)	43,407		497,010
Energy & Utilities — 2.7%
Black Hills Corp.	25,800		953,052
ITC Holdings Corp.	12,600		502,740
PNM Resources, Inc.	29,100		905,010
			2,360,802
Entertainment & Leisure — 6.5%
Morgans Hotel Group Co.(b)	17,517		296,563
Orient - Express Hotels Ltd. - Class A	46,100		2,181,452
Pinnacle Entertainment, Inc.(b)	32,900		1,090,306
Regal Entertainment Group - Class A(c)	50,000		1,066,000
Sunterra Corp.(b)	18,162		218,852
Vail Resorts, Inc.(b)	16,122		722,588
			5,575,761
Finance — 0.8%
Jackson Hewitt Tax Service, Inc.	19,100		648,827
Food & Agriculture — 4.2%
Hain Celestial Group, Inc.(b)	55,200		1,722,792
Pilgrim’s Pride Corp.	20,800		612,144
Ralcorp Holdings, Inc.(b)	25,300		1,287,517
			3,622,453
Insurance — 5.2%
Aspen Insurance Holdings Ltd.	43,800		1,154,568
Endurance Specialty Holdings Ltd.	28,285		1,034,665
The Hanover Insurance Group, Inc.	19,498		951,503
Platinum Underwriters Holdings Ltd.	41,900		1,296,386
			4,437,122
Machinery & Heavy Equipment — 1.4%
Astec Industries, Inc.(b)	22,000		772,200
H&E Equipment Services, Inc.(b)	18,400		455,768
			1,227,968
Manufacturing — 6.6%
Aptargroup, Inc.	8,358		493,456
Gardner Denver, Inc.(b)	25,400		947,674
Goodman Global, Inc.(b)	23,073		396,856
Lennox International, Inc.	36,583		1,119,806
Phillips-Van Heusen Corp.	11,900		597,023
Shuffle Master, Inc.(b)(c)	29,300		767,660
Watson Wyatt Worldwide, Inc.	29,500		1,331,925
			5,654,400
Medical & Medical Services — 2.7%
Magellan Health Services, Inc.(b)	19,600		847,112
Per - Se Technologies, Inc.(b)	52,500		1,458,450
			2,305,562
Medical Instruments & Supplies — 4.0%
DJ Orthopedics, Inc.(b)	57,345		2,455,513
Hologic, Inc.(b)	14,834		701,351
Polymedica Corp.	6,000		242,460
			3,399,324
Metal & Mining — 1.0%
Century Aluminum Co.(b)	19,350		863,978
Motor Vehicles — 1.6%
LoJack Corp.(b)	27,953		477,437
Tenneco Automotive, Inc.(b)	35,800		884,976
			1,362,413
Oil & Gas — 4.6%
Cal Dive International, Inc.(b)	42,200		529,610
Comstock Resources, Inc.(b)	22,100		686,426

14

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

SMALL CAP VALUE EQUITY PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)		NUMBER OF SHARES		VALUE
COMMON STOCKS (Continued)
Oil & Gas (Continued)
Goodrich Petroleum Corp.(b)(c)			21,618	$	782,139
Hercules Offshore, Inc.(b)			22,746		657,360
Oceaneering International, Inc.(b)			16,300		647,110
Universal Compression Holdings, Inc.(b)			10,700		664,577
					3,967,222
Pharmaceuticals — 1.2%
Axcan Pharma, Inc.(b)			71,514		1,018,359
Publishing & Printing — 0.4%
Marvel Entertainment, Inc.(b)			12,700		341,757
Real Estate — 4.5%
Arbor Realty Trust, Inc. (REIT)			21,000		631,890
BioMed Realty Trust, Inc. (REIT)			28,300		809,380
Corporate Office Properties Trust (REIT)(c)			17,507		883,578
Education Realty Trust, Inc. (REIT)			49,400		729,638
Innkeepers USA Trust (REIT)			48,900		757,950
					3,812,436
Restaurants — 0.9%
Landry’s Restaurants, Inc.(c)			27,002		812,490
Retail Merchandising — 8.0%
Big 5 Sporting Goods Corp.			23,200		566,544
Borders Group, Inc.(c)			37,200		831,420
Copart, Inc.(b)			30,300		909,000
Genesco, Inc.(b)(c)			24,400		910,120
Guitar Center, Inc.(b)			8,100		368,226
Hot Topic, Inc.(b)			45,200		602,968
Jarden Corp.(b)(c)			25,200		876,708
Payless ShoeSource, Inc.(b)			20,700		679,374
Saks, Inc.(c)			51,600		919,512
The Talbots, Inc.(c)			6,938		167,206
					6,831,078
Security Brokers & Dealers — 3.4%
GFI Group, Inc.(b)			9,300		579,018
Piper Jaffray Cos., Inc.(b)(c)			31,600		2,058,740
TradeStation Group, Inc.(b)			21,900		301,125
					2,938,883
Semiconductors & Related Devices — 1.2%
PMC-Sierra, Inc.(b)(c)			72,700		487,817
Varian Semiconductor Equipment Associates, Inc.(b)			11,600		528,032
					1,015,849
Soaps & Cosmetics — 1.0%
NU Skin Enterprises, Inc.			45,066		821,553
Transportation — 2.0%
Hornbeck Offshore Services, Inc.(b)			16,800		599,760
Kirby Corp.(b)			33,300		1,136,529
					1,736,289
Waste Management — 1.6%
Waste Connections, Inc.(b)			33,700		1,400,235
TOTAL COMMON STOCKS
(Cost $71,062,789)					83,169,864
SHORT TERM INVESTMENTS — 2.2%
Galileo Money Market Fund
(Cost $1,929,164)			1,929,164		1,929,164
TOTAL MARKET VALUE OF SECURITIES BEFORE SECURITIES LENDING COLLATERAL AND AFFILIATED INVESTMENTS — 99.4%
(Cost $72,991,953)					85,099,028
	MATURITY	PAR/SHARES (000)
SECURITIES LENDING COLLATERAL — 0.2%
Morgan Stanley, Variable Rate Commercial Paper
5.37%(d)(e)
(Cost $113,859)	01/02/07	$	114		113,859
AFFILIATED INVESTMENTS — SHORT TERM — 13.5%
Institutional Money Market Trust(e)
(Cost $11,570,128)			11,570		11,570,128
TOTAL INVESTMENTS IN SECURITIES — 113.1%
(Cost $84,675,940(a))					96,783,015
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL — (13.7)%					(11,683,987	)
OTHER ASSETS IN EXCESS OF LIABILITIES — 0.6%					510,536
NET ASSETS — 100.0%				$	85,609,564

(a) Cost for federal income tax purposes is $85,193,340. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	12,273,493
Gross unrealized depreciation		(683,818	)
	$	11,589,675

(b) Non-income producing security.

(c) Total or partial security on loan.

(d) Variable rate security. Rates shown are the rates as of December 31, 2006.

(e) Security purchased with the cash proceeds from securities loaned.

15

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

SMALL CAP CORE EQUITY PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS — 99.5%
Aerospace — 3.0%
AAR Corp.(b)(c)	50,250	$	1,466,798
LMI Aerospace, Inc.(b)	49,700		769,356
Orbital Sciences Corp.(b)	22,550		415,822
			2,651,976
Banks — 9.1%
Boston Private Financial Holdings, Inc.	35,600		1,004,276
Cathay General Bancorp(c)	31,800		1,097,418
Central Pacific Financial Corp.	23,267		901,829
Columbia Banking System, Inc.	25,700		902,584
First State Bancorporation	17,300		428,175
KBW, Inc.(b)	16,000		470,240
Umpqua Holdings Corp.	43,500		1,280,205
Wintrust Financial Corp.(c)	24,800		1,190,896
WSFS Financial Corp.	9,650		645,874
			7,921,497
Broadcasting — 1.3%
Alliance Atlantis Communications, Inc.(b)	17,000		737,800
CKX, Inc.(b)	33,050		387,677
			1,125,477
Business Services — 4.8%
Forrester Research, Inc.(b)	43,450		1,177,930
HMS Holdings Corp.(b)	60,850		921,877
National Financial Partners Corp.	15,200		668,344
Net1 UEPS Technologies, Inc.(b)	36,150		1,068,594
PRA International(b)	15,794		399,114
			4,235,859
Computer & Office Equipment — 2.0%
Electronics for Imaging, Inc.(b)	64,800		1,722,384
Computer Software & Services — 11.3%
Aladdin Knowledge Systems Ltd.(b)	25,300		493,097
Blackboard, Inc.(b)(c)	42,000		1,261,680
CACI International, Inc.(b)	21,350		1,206,275
Lawson Software, Inc.(b)	86,050		635,910
Move, Inc.(b)	94,900		522,899
Phase Forward, Inc.(b)	79,900		1,196,902
SkillSoft PLC - ADR(b)	281,750		1,749,667
TIBCO Software, Inc.(b)	92,050		868,952
Trident Microsystems, Inc.(b)(c)	24,850		451,773
The TriZetto Group, Inc.(b)	80,568		1,480,034
			9,867,189
Containers — 1.2%
Silgan Holdings, Inc.	23,350		1,025,532
Electronics — 2.0%
Directed Electronics, Inc.(b)	61,200		700,740
FLIR Systems, Inc.(b)(c)	33,850		1,077,446
			1,778,186
Energy & Utilities — 0.9%
El Paso Electric Co.(b)	17,800		433,786
Pike Electric Corp.(b)(c)	19,855		324,232
			758,018
Entertainment & Leisure — 7.6%
Gaylord Entertainment Co.(b)	10,400		529,672
Morgans Hotel Group Co.(b)	82,050		1,389,107
Orient-Express Hotels Ltd. - Class A	60,435		2,859,784
Pinnacle Entertainment, Inc.(b)(c)	32,200		1,067,108
Sunterra Corp.(b)	68,330		823,376
			6,669,047
Insurance — 3.8%
First Mercury Financial Corp.(b)	37,900		891,408
IPC Holdings Ltd.	21,176		665,985
National Atlantic Holdings Corp. - Class A(b)	36,400		424,424
Platinum Underwriters Holdings Ltd.	42,379		1,311,206
			3,293,023
Manufacturing — 11.8%
Actuant Corp. - Class A	19,700		938,705
American Railcar Industries, Inc.	39,200		1,334,368
Aptargroup, Inc.	18,400		1,086,336
Chart Industries, Inc.(b)	65,150		1,056,081
Chattem, Inc.(b)	24,600		1,231,968
Hexel Corp.(b)(c)	57,400		999,334
K2, Inc.(b)	75,650		997,824
Paxar Corp.(b)	40,950		944,307
Powerwave Technologies, Inc.(b)	110,600		713,370
Shuffle Master, Inc.(b)(c)	39,500		1,034,900
			10,337,193
Medical & Medical Services — 5.0%
Pediatrix Medical Group, Inc.(b)	40,850		1,997,565
Radiation Therapy Services, Inc.(b)	14,300		450,736
Vital Images, Inc.(b)	54,750		1,905,300
			4,353,601
Medical Instruments & Supplies — 10.5%
Align Technology, Inc.(b)(c)	69,400		969,518
DJ Orthopedics, Inc.(b)	71,250		3,050,925
Ev3, Inc.(b)	51,850		893,375
Hologic, Inc.(b)(c)	41,250		1,950,300
Immucor, Inc.(b)	7,525		219,956
MWI Veterinary Supply, Inc.(b)	15,150		489,345
Orthofix International, NV(b)	17,900		895,000
ThermoGenesis Corp.(b)	163,300		703,823
			9,172,242
Metal & Mining — 1.7%
Foundation Coal Holdings, Inc.(c)	10,500		333,480
Universal Stainless & Alloy Products, Inc.(b)	34,250		1,146,690
			1,480,170
Motor Vehicles — 1.2%
Tenneco Automotive, Inc.(b)	41,800		1,033,296
Oil & Gas — 4.8%
Cal Dive International, Inc.(b)	27,700		347,635
Goodrich Petroleum Corp.(b)	11,550		417,879
Hercules Offshore, Inc.(b)	14,350		414,715
Mariner Energy, Inc.(b)	41,600		815,360
Oil States International, Inc.(b)	15,900		512,457
Petrohawk Energy Corp.(b)	60,290		693,335

16

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SCHEDULE OF INVESTMENTS

SMALL CAP CORE EQUITY PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)		NUMBER OF SHARES		VALUE
COMMON STOCKS (Continued)
Oil & Gas (Continued)
Superior Energy Services, Inc.(b)(c)			30,450	$	995,106
					4,196,487
Personal Services — 1.6%
Laureate Education, Inc.(b)(c)			28,450		1,383,524
Pharmaceuticals — 0.7%
ICON PLC - ADR(b)			17,500		659,750
Real Estate — 3.0%
Corporate Office Properties Trust (REIT)(c)			20,100		1,014,447
Education Realty Trust, Inc. (REIT)			59,100		872,907
Gramercy Capital Corp. (REIT)			22,800		704,292
					2,591,646
Retail Merchandising — 6.0%
The Children’s Place Retail Stores, Inc.(b)			13,400		851,168
Genesco, Inc.(b)(c)			22,910		854,543
Golfsmith International Holdings, Inc.(b)			92,600		899,146
Jarden Corp.(b)(c)			41,825		1,455,092
Sally Beauty Holdings, Inc.(b)			45,000		351,000
Tractor Supply Co.(b)(c)			18,250		815,957
					5,226,906
Security Brokers & Dealers — 1.3%
Piper Jaffray Cos., Inc.(b)(c)			16,950		1,104,292
Semiconductors & Related Devices — 2.6%
Rudolph Technologies, Inc.(b)			51,550		820,676
Silicon Storage Technology, Inc.(b)			196,100		884,411
Ultra Clean Holdings, Inc.(b)			42,350		523,023
					2,228,110
Telecommunications — 1.6%
Dobson Communications Corp. - Class A(b)			51,200		445,952
EMS Technologies, Inc.(b)			49,300		987,479
					1,433,431
Transportation — 0.7%
Vitran Corp., Inc.(b)			34,200		594,054
TOTAL COMMON STOCKS
(Cost $75,786,354)					86,842,890
SHORT TERM INVESTMENTS — 0.5%
Galileo Money Market Fund
(Cost $425,463)			425,463		425,463
TOTAL MARKET VALUE OF SECURITIES BEFORE SECURITIES LENDING COLLATERAL AND AFFILIATED INVESTMENTS — 100.0%
(Cost $76,211,817)					87,268,353
	MATURITY	PAR/SHARES (000)
SECURITIES LENDING COLLATERAL — 4.6%
Bank of America Corp., Master Notes
5.38%(d)(e)	01/02/07	$	1,243		1,242,979
Citigroup, Inc., Master Notes
5.38%(d)(e)	01/02/07		554		554,194
Morgan Stanley, Variable Rate Commercial Paper
5.37%(d)(e)	01/02/07		2,205		2,205,019
TOTAL SECURITIES LENDING COLLATERAL
(Cost $4,002,192)					4,002,192
AFFILIATED INVESTMENTS—SHORT TERM — 18.9%
Institutional Money Market Trust(e)
(Cost $16,449,731)			16,450		16,449,731
TOTAL INVESTMENTS IN SECURITIES — 123.5%
(Cost $96,663,740(a))					107,720,276
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL — (23.5)%					(20,451,923	)
LIABILITIES IN EXCESS OF OTHER ASSETS — 0.0%					(12,488	)
NET ASSETS — 100.0%				$	87,255,865

(a) Cost for federal income tax purposes is $96,809,486. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	12,377,547
Gross unrealized depreciation		(1,466,757	)
	$	10,910,790

(b) Non-income producing security.

(c) Total or partial security on loan.

(d) Variable rate security. Rates shown are the rates as of December 31, 2006.

(e) Security purchased with the cash proceeds from securities loaned.

17

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SCHEDULE OF INVESTMENTS

SMALL CAP GROWTH EQUITY PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS — 93.7%
Aerospace — 2.9%
Armor Holdings, Inc.(b)	121,900	$	6,686,215
BE Aerospace, Inc.(b)(c)	501,000		12,865,680
LMI Aerospace, Inc.(b)	88,500		1,369,980
			20,921,875
Banks — 2.4%
Greenhill & Co., Inc.(c)	85,800		6,332,040
KBW, Inc.(b)	4,600		135,194
Signature Bank(b)	182,500		5,653,850
UMB Financial Corp.	145,200		5,301,252
			17,422,336
Broadcasting — 2.5%
CKX, Inc.(b)	1,034,200		12,131,166
Outdoor Channel Holdings, Inc.(b)	461,200		5,917,196
			18,048,362
Business Services — 9.4%
Advisory Board Co.(b)	154,600		8,277,284
Commvault Systems, Inc.(b)	147,800		2,957,478
Diamond Management & Technology Consultants, Inc.	1,242,100		15,451,724
eFunds Corp.(b)	279,900		7,697,250
Exlservice Holdings, Inc.(b)	203,413		4,279,809
Forrester Research, Inc.(b)	355,800		9,645,738
Gartner, Inc. - Class A(b)(c)	351,800		6,962,122
Healthcare Services Group, Inc.	347,300		10,057,808
WNS Holdings Ltd. - ADR(b)	64,000		1,990,400
			67,319,613
Chemicals — 0.9%
Agrium, Inc.(c)	197,000		6,203,530
Computer Software & Services — 17.8%
Aladdin Knowledge Systems Ltd.(b)	387,400		7,550,426
Blackboard, Inc.(b)(c)	376,500		11,310,060
CACI International, Inc.(b)	118,400		6,689,600
Double-Take Software, Inc.(b)	46,000		592,480
Foundry Networks, Inc.(b)	414,400		6,207,712
i2 Technologies, Inc.(b)(c)	378,000		8,625,960
IHS, Inc.(b)	383,500		15,140,580
Interwoven, Inc.(b)	301,300		4,420,071
Move, Inc.(b)	1,710,500		9,424,855
SI International, Inc.(b)	160,300		5,196,926
SkillSoft PLC - ADR(b)	2,799,730		17,386,323
SonicWALL, Inc.(b)	1,725,600		14,529,552
Transaction Systems Architects, Inc.(b)	417,800		13,607,746
VeriFone Holdings, Inc.(b)(c)	194,200		6,874,680
			127,556,971
Energy & Utilities — 1.7%
Airgas, Inc.	297,400		12,050,648
Entertainment & Leisure — 4.7%
Orient-Express Hotels Ltd. - Class A	224,300		10,613,876
Scientific Games Corp. - Class A(b)(c)	258,700		7,820,501
Vail Resorts, Inc.(b)	230,000		10,308,600
World Wrestling Entertainment, Inc.	281,800		4,593,340
			33,336,317
Finance — 5.5%
Affiliated Managers Group, Inc.(b)(c)	61,700		6,486,521
Evercore Partners, Inc.(b)	47,700		1,757,745
Investment Technology Group, Inc.(b)	173,000		7,418,240
Net1 UEPS Technologies, Inc.(b)	370,500		10,951,980
Wright Express Corp.(b)(c)	405,200		12,630,084
			39,244,570
Machinery & Heavy Equipment — 0.8%
Bucyrus International, Inc. - Class A(c)	115,400		5,973,104
Manufacturing — 8.5%
Actuant Corp. - Class A	144,500		6,885,425
Diodes, Inc.(b)	88,800		3,150,624
Gardner Denver, Inc.(b)	359,500		13,412,945
Heelys, Inc.(b)	20,900		671,099
Ladish Co., Inc.(b)	19,600		726,768
Mueller Water Products, Inc. - Class A(c)	226,000		3,360,620
RBC Bearings, Inc.(b)	149,900		4,296,134
The Warnaco Group, Inc.(b)	435,400		11,050,452
Watson Wyatt Worldwide, Inc.	378,200		17,075,730
			60,629,797
Medical & Medical Services — 7.7%
Digene Corp.(b)	261,900		12,550,248
Noven Pharmaceuticals, Inc.(b)	695,900		17,710,655
Pediatrix Medical Group, Inc.(b)	237,200		11,599,080
Santarus, Inc.(b)(c)	724,300		5,671,269
Symbion, Inc.(b)	431,800		7,992,618
			55,523,870
Medical Instruments & Supplies — 10.4%
Adeza Biomedical Corp.(b)	341,800		5,096,238
Align Technology, Inc.(b)(c)	946,599		13,223,988
Bruker BioSciences Corp.(b)	463,100		3,477,881
Cutera, Inc.(b)	259,700		7,011,900
Hologic, Inc.(b)(c)	165,850		7,841,388
Home Diagnostics, Inc.(b)	134,700		1,427,820
IntraLase Corp.(b)	431,500		9,656,970
Kyphon, Inc.(b)(c)	202,200		8,168,880
Martek Biosciences Corp.(b)	284,600		6,642,564
Wright Medical Group, Inc.(b)	516,881		12,032,990
			74,580,619
Metal & Mining — 1.7%
Century Aluminum Co.(b)	135,400		6,045,610
Massey Energy Co.(c)	258,400		6,002,632
			12,048,242
Oil & Gas — 4.7%
Atwood Oceanics, Inc.(b)	142,300		6,968,431
Comstock Resources, Inc.(b)	222,500		6,910,850
Oceaneering International, Inc.(b)	190,700		7,570,790
Parallel Petroleum Corp.(b)	151,800		2,667,126
Superior Energy Services, Inc.(b)(c)	295,600		9,660,208
			33,777,405
Personal Services — 1.1%
Laureate Education, Inc.(b)(c)	166,600		8,101,758

18

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SCHEDULE OF INVESTMENTS

SMALL CAP GROWTH EQUITY PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)		NUMBER OF SHARES		VALUE
COMMON STOCKS (Continued)
Restaurants — 1.3%
Red Robin Gourmet Burgers, Inc.(b)			263,400	$	9,442,890
Retail Merchandising — 2.8%
The Children’s Place Retail Stores, Inc.(b)			96,700		6,142,384
Dick’s Sporting Goods, Inc.(b)(c)			183,221		8,975,997
Golfsmith International Holdings, Inc.(b)			320,000		3,107,200
Tween Brands, Inc.(b)			54,300		2,168,199
					20,393,780
Semiconductors & Related Devices — 4.6%
Cymer, Inc.(b)(c)			121,200		5,326,740
Micrel, Inc.(b)(c)			591,400		6,375,292
Microsemi Corp.(b)(c)			350,100		6,879,465
Standard Microsystems Corp.(b)			336,700		9,420,866
Varian Semiconductor Equipment Associates, Inc.(b)(c)			106,700		4,856,984
					32,859,347
Telecommunications — 2.3%
EMS Technologies, Inc.(b)			283,500		5,678,505
Occam Networks, Inc.(b)			339,200		5,596,800
Polycom, Inc.(b)(c)			179,000		5,532,890
					16,808,195
TOTAL COMMON STOCKS
(Cost $520,207,004)					672,243,229
	MATURITY	PAR/SHARE (000)
SHORT TERM INVESTMENTS — 6.6%
Federal Home Loan Bank, Discount Notes
4.80%(d)	01/02/07	$	38,000		37,984,800
Galileo Money Market Fund			9,414		9,414,485
TOTAL SHORT TERM INVESTMENTS
(Cost $47,399,285)					47,399,285
TOTAL MARKET VALUE OF SECURITIES BEFORE SECURITIES LENDING COLLATERAL AND AFFILIATED INVESTMENTS — 100.3%
(Cost $567,606,289)					719,642,514
SECURITIES LENDING COLLATERAL — 0.8%
Bank of America Corp., Master Notes
5.38%(e)(f)	01/02/07		1,179		1,178,938
Morgan Stanley, Variable Rate Commercial Paper
5.37%(e)(f)	01/02/07		4,287		4,286,658
TOTAL SECURITIES LENDING COLLATERAL
(Cost $5,465,596)					5,465,596
		NUMBER OF SHARES
AFFILIATED INVESTMENTS — SHORT TERM — 19.3%
Institutional Money Market Trust(f)
(Cost $138,876,483)			138,876,483		138,876,483
TOTAL INVESTMENTS IN SECURITIES — 120.4%
(Cost $711,948,368(a))					863,984,593
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL — (20.1)%					(144,342,079	)
LIABILITIES IN EXCESS OF OTHER ASSETS — (0.3)%					(2,289,247	)
NET ASSETS — 100.0%				$	717,353,267

(a) Cost for federal income tax purposes is $715,506,567. Thegross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	161,430,664
Gross unrealized depreciation		(12,952,638	)
	$	148,478,026

(b) Non-income producing security.

(c) Total or partial security on loan.

(d) The rate shown is the effective yield at the time of purchase. (e) Variable rate security. Rates shown are the rates as of December 31, 2006.

(f) Security purchased with the cash proceeds from securities loaned.

19

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SCHEDULE OF INVESTMENTS

GLOBAL SCIENCE & TECHNOLOGY OPPORTUNITIES PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS — 99.1%
Brazil — 0.4%
Telecommunications — 0.4%
Net Servicos de Comunicacao SA - ADR	12,000	$	143,760
France — 2.0%
Computer & Office Equipment — 0.5%
Neopost SA	1,400		175,843
Machinery & Heavy Equipment — 0.8%
Alstom	1,900		257,581
Telecommunications — 0.7%
Alcatel SA - ADR	15,800		224,676
Total France			658,100
Germany — 1.8%
Computer Software & Services — 1.8%
SAP AG - ADR(b)	6,200		329,220
Software AG	3,200		252,350
			581,570
Hong Kong — 1.8%
Semiconductors & Related Devices — 0.9%
ASM Pacific Technology Ltd.	48,600		270,545
Telecommunications — 0.9%
China Communications Services Corp. Ltd.(c)	600		343
China Mobile Ltd.	34,500		298,060
			298,403
India — 1.0%
Telecommunications — 1.0%
Bharti Tele-Ventures Ltd.	23,100		328,113
Indonesia — 1.0%
Telecommunications — 1.0%
PT Telekomunikasi Indonesia	280,000		314,449
Japan — 2.3%
Computer Software & Services — 1.3%
Nippon System Development	7,100		225,520
Obic Co. Ltd.	1,000		206,966
			432,486
Energy & Utilities — 0.5%
Kurita Water Industries Ltd.	6,800		146,851
Machinery & Heavy Equipment — 0.5%
Disco Corp.	2,500		175,833
Total Japan			755,170
Malaysia — 1.0%
Telecommunications — 1.0%
Digi.com Berhad	73,000		314,512
Mexico — 1.1%
Telecommunications — 1.1%
America Movil SA - ADR	7,800		352,716
Netherlands — 0.6%
Semiconductors & Related Devices — 0.6%
ASML Holding NV(b)(c)	8,000		197,040
Singapore — 0.6%
Electronic Components & Accessories — 0.6%
Stats Chippac Ltd.(c)	258,800		197,422
South Korea — 1.1%
Computer Software & Services — 0.7%
NHN Corp.(c)	1,800		220,839
Electronics — 0.4%
Samsung Electronics Co. Ltd.	200		131,828
Total South Korea			352,667
Sweden — 1.0%
Manufacturing — 1.0%
Telefonaktiebolaget LM Ericsson - ADR(b)	8,000		321,840
Switzerland — 1.7%
Pharmaceuticals — 1.7%
Roche Holding AG	1,400		251,046
Roche Holding AG - ADR	3,200		286,393
			537,439
Taiwan — 4.8%
Computer & Office Equipment — 0.6%
Gemtek Technology Corp.	67,000		145,782
Lite-On Technology Corp.	24,769		33,484
			179,266
Computer Software & Services — 0.4%
MediaTek, Inc.	13,000		134,448
Electronics — 1.6%
Cheng Uei Precision Industry Co. Ltd.	44,960		160,744
Hon Hai Precision Industry Co. Ltd.	48,794		348,154
			508,898
Manufacturing — 1.1%
Wistron Corp.	238,461		354,197
Semiconductors & Related Devices — 1.1%
Powerchip Semiconductor Corp.	261,000		176,216
Realtek Semiconductor Corp.	103,000		177,330
			353,546
Total Taiwan			1,530,355
United Kingdom — 1.7%
Aerospace — 0.7%
Meggitt PLC	37,900		230,043
Computer Software & Services — 1.0%
Autonomy Corp. PLC	30,200		302,456
Total United Kingdom			532,499
United States — 75.2%
Aerospace — 2.3%
Goodrich Corp.(b)	5,900		268,745
Lockheed Martin Corp.	5,100		469,557
			738,302
Business Services — 4.1%
Akamai Technologies, Inc.(b)(c)	9,800		520,576
Aquantive, Inc.(b)(c)	5,200		128,232
Fiserv, Inc.(c)	7,700		403,634
Huron Consulting Group, Inc.(c)	4,400		199,496

20

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SCHEDULE OF INVESTMENTS

GLOBAL SCIENCE & TECHNOLOGY OPPORTUNITIES PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS (Continued)
United States (Continued)
Business Services (Continued)
Stanley, Inc.(c)	4,300	$	72,713
			1,324,651
Computer & Office Equipment — 9.9%
Apple Computer, Inc.(c)	7,800		661,752
Cisco Systems, Inc.(b)(c)	30,100		822,633
Dell, Inc.(c)	6,500		163,085
Hewlett-Packard Co.	11,500		473,685
International Business Machines Corp.	5,900		573,185
Isilon Systems, Inc.(b)(c)	1,300		35,880
Network Appliance, Inc.(b)(c)	11,800		463,504
			3,193,724
Computer Software & Services — 16.3%
3Com Corp.(b)(c)	39,500		162,345
Adobe Systems, Inc.(c)	11,100		456,432
Autodesk, Inc.(c)	6,600		267,036
BEA Systems, Inc.(c)	16,100		202,538
Double-Take Software, Inc.(c)	4,000		51,520
Electronic Arts, Inc.(c)	4,300		216,548
Foundry Networks, Inc.(c)	11,900		178,262
Google, Inc. - Class A(c)	1,400		644,672
Hyperion Solutions Corp.(c)	5,500		197,670
Juniper Networks, Inc.(b)(c)	10,500		198,870
Microsoft Corp.	17,000		507,620
Netlist, Inc.(c)	12,700		123,444
Oracle Corp.(c)	23,100		395,934
Seagate Technology, Inc.	10,500		278,250
SI International, Inc.(c)	5,000		162,100
Sun Microsystems, Inc.(c)	23,800		128,996
Sybase, Inc.(c)	14,600		360,620
Symantec Corp.(c)	11,000		229,350
TIBCO Software, Inc.(c)	29,500		278,480
VeriSign, Inc.(c)	8,000		192,400
			5,233,087
Electronics — 3.9%
Agilent Technologies, Inc.(c)	7,800		271,830
Amphenol Corp.	5,300		329,024
Intel Corp.	18,700		378,675
Molex, Inc.	4,200		132,846
TTM Technologies, Inc.(c)	12,500		141,625
			1,254,000
Entertainment & Leisure — 0.8%
Comcast Corp.(b)(c)	6,400		270,912
Manufacturing — 0.6%
Corning, Inc.(c)	11,200		209,552
Measuring & Controlling Devices — 1.3%
KLA-Tencor Corp.(b)	8,100		402,975
Medical & Medical Services — 1.2%
Amgen, Inc.(b)(c)	3,300		225,423
Biomet, Inc.	4,100		169,207
			394,630
Medical Instruments & Supplies — 6.6%
Alcon, Inc.	1,500		167,655
Cyberonics, Inc.(b)(c)	6,200		127,968
Johnson & Johnson	3,500		231,070
Medtronic, Inc.(b)	6,500		347,815
Northstar Neuroscience, Inc.(c)	3,900		56,082
Stryker Corp.	4,000		220,440
Varian Medical Systems, Inc.(c)	6,646		316,150
Waters Corp.(c)	4,676		228,984
Wright Medical Group, Inc.(b)(c)	11,800		274,704
Zimmer Holdings, Inc.(c)	2,100		164,598
			2,135,466
Pharmaceuticals — 10.4%
Affymax, Inc.(b)(c)	2,100		71,484
Alexion Pharmaceuticals, Inc.(b)(c)	16,900		682,591
Allergan, Inc.(b)	3,000		359,220
Applera Corp. - Celera Genomic Group(c)	12,200		170,678
Biogen Idec, Inc.(c)	5,100		250,869
BioMarin Pharmaceutical, Inc.(b)(c)	20,200		331,078
Genentech, Inc.(c)	4,600		373,198
Gilead Sciences, Inc.(c)	4,900		318,157
InterMune, Inc.(b)(c)	3,200		98,400
Merck & Co., Inc.	3,700		161,320
Pfizer, Inc.	5,800		150,220
Pharmion Corp.(c)	6,400		164,736
Regeneron Pharmaceuticals, Inc.(c)	10,300		206,721
			3,338,672
Semiconductors & Related Devices — 10.0%
Agere Systems, Inc.(b)(c)	13,100		251,127
Applied Materials, Inc.(b)	13,300		245,385
Broadcom Corp. - Class A(c)	9,500		306,945
Cymer, Inc.(c)	1,800		79,110
Infineon Technologies AG - ADR(c)	13,000		182,390
Integrated Device Technology, Inc.(b)(c)	17,800		275,544
Lam Research Corp.(b)(c)	5,300		268,286
Marvell Technology Group Ltd.(b)(c)	13,200		253,308
Maxim Integrated Products, Inc.	7,400		226,588
MEMC Electronic Materials, Inc.(c)	5,200		203,528
Micron Technology, Inc.(c)	10,500		146,580
NVIDIA Corp.(b)(c)	7,500		277,575
Spansion, Inc.(c)	6,100		90,646
Taiwan Semiconductor Manufacturing Co. Ltd.	25,200		275,436
Verigy Ltd.(c)	7,055		125,226
			3,207,674
Telecommunications — 7.8%
Amdocs Ltd.(c)	5,300		205,375
AT&T, Inc.(b)	7,400		264,550
Atheros Communications, Inc.(c)	8,100		172,692
Ciena Corp.(c)	6,900		191,199
Eschelon Telecom, Inc.(c)	5,000		99,050
Harris Corp.	3,900		178,854
Motorola, Inc.	9,200		189,152
NeuStar, Inc. - Class A(c)	5,000		162,200
Oplink Communications, Inc.(c)	13,900		285,784
Optium Corp.(c)	1,700		42,398

21

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SCHEDULE OF INVESTMENTS

GLOBAL SCIENCE & TECHNOLOGY OPPORTUNITIES PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)		NUMBER OF SHARES		VALUE
COMMON STOCKS (Continued)
United States (Continued)
Telecommunications (Continued)
Qualcomm, Inc.			8,600	$	324,994
Research In Motion Ltd.(c)			1,600		204,448
Windstream Corp.			12,376		175,987
					2,496,683
Total United States					24,200,328
TOTAL COMMON STOCKS
(Cost $26,666,726)					31,886,928
SHORT TERM INVESTMENTS — 0.9%
Galileo Money Market Fund
(Cost $279,790)			279,790		279,790
TOTAL MARKET VALUE OF SECURITIES BEFORE SECURITIES LENDING COLLATERAL AND AFFILIATED INVESTMENTS — 100.0%
(Cost $26,946,516)					32,166,718
	MATURITY	PAR/SHARES (000)
SECURITIES LENDING COLLATERAL — 2.2%
The Bear Stearns Cos., Inc., Variable Rate Commercial Paper
5.38%(d)(e)	01/02/07	$	247		246,511
Citigroup, Inc., Master Notes
5.38%(d)(e)	01/02/07		211		210,991
Morgan Stanley, Variable Rate Commercial Paper
5.37%(d)(e)	01/02/07		271		271,320
TOTAL SECURITIES LENDING COLLATERAL
(Cost $728,822)					728,822
AFFILIATED INVESTMENTS - SHORT TERM — 18.8%
Institutional Money Market Trust(e)
(Cost $6,049,875)			6,050		6,049,875
TOTAL INVESTMENTS IN SECURITIES — 121.0%
(Cost $33,725,213(a))					38,945,415
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL — (21.1)%					(6,778,697	)
OTHER ASSETS IN EXCESS OF LIABILITIES — 0.1%					10,848
NET ASSETS — 100.0%				$	32,177,566

(a) Cost for federal income tax purposes is $33,846,284. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	5,427,623
Gross unrealized depreciation		(328,492	)
	$	5,099,131

(b) Total or partial security on loan.

(c) Non-income producing security.

(d) Variable rate security. Rates shown are the rates as of December 31, 2006.

(e) Security purchased with the cash proceeds from securities loaned.

22

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SCHEDULE OF INVESTMENTS

GLOBAL RESOURCES PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS — 100.2%
Canada — 23.9%
Banks — 0.0%
Quest Capital Corp.	61,000	$	157,450
Metal & Mining — 7.6%
Alexco Resource Corp.(b)	474,683		1,998,622
Aurora Energy Resources, Inc.(b)	246,000		2,858,380
AXMIN, Inc.(b)	2,187,952		1,857,456
Bema Gold Corp.(b)	250,000		1,312,500
Energy Metals Corp.(b)	435,100		3,768,392
European Goldfields Ltd.(b)	561,400		2,330,040
Frontier Pacific Mining Corp.(b)	3,024,300		1,970,988
Gateway Gold Corp.(b)	500,000		360,159
Gold Reserve, Inc.(b)	123,948		585,035
Goldcorp, Inc.	4,600		130,606
Golden Star Resources Ltd.(b)	789,408		2,308,349
International Uranium Corp.(b)	218,500		2,210,951
Katanga Mining Ltd.(b)	1,000,000		6,174,163
Mag Silver Corp.(b)	2,026,200		11,050,578
Mena Resources, Inc.(b)	20,000		38,932
Minefinders Corp. Ltd.(b)	250,000		2,225,000
Nevsun Resources Ltd. (acquired 8/8/97 through 9/9/04, cost $4,883,732)(b)(c)(d)	1,554,800		3,399,854
Northern Star Mining Corp.(b)	600,000		488,788
NovaGold Resources, Inc.(b)(e)	371,843		6,380,826
Orezone Resources, Inc.(b)	500,000		707,456
Polymet Mining Corp.(b)	1,250,000		3,966,042
Radius Gold, Inc.(b)	569,700		229,609
Romarco Minerals, Inc.(b)	223,000		57,368
Southwestern Resources Corp.(b)	566,900		3,859,869
Stratagold Corp.(b)	1,703,700		1,899,250
Sunridge Gold Corp.(b)	1,969,912		5,574,506
Triex Minerals Corp. (acquired 12/23/05, cost $671,761)(c)(f)	312,100		1,298,019
Virginia Mines, Inc.(b)	216,350		779,205
West Timmins Mining, Inc.(b)	1,285,423		628,299
X-Cal Resources Ltd.(b)	1,755,500		421,507
			70,870,749
Motor Vehicles — 0.1%
Westport Innovations, Inc. (acquired 12/17/03 through 9/15/04, cost $1,052,339)(b)(c)(d)	959,500		995,579
Oil & Gas — 16.1%
Accrete Energy, Inc.(b)	13,690		71,611
Alberta Clipper Energy, Inc.(b)	95,415		493,378
Baytex Energy Trust	421,948		8,061,571
Birchcliff Energy Ltd.(b)	721,500		2,530,493
Bow Valley Energy Ltd.(b)	634,600		3,662,357
C1 Energy Ltd.(b)	647,099		377,333
Canadian Superior Energy, Inc.(b)	1,091,000		2,182,000
Canext Energy Ltd.(b)	201,600		280,060
Capitol Energy Resources Ltd.(b)	620,325		2,271,395
Cinch Energy Corp.(b)	901,980		827,611
Compton Petroleum Corp.(b)	1,267,329		11,574,029
Crescent Point Energy Trust	40,441		610,352
Crew Energy, Inc. (acquired 6/24/98 through 3/10/06, cost $3,002,247)(b)(c)	727,137		7,669,498
Cyries Energy, Inc.(b)	69,096		750,122
Daylight Resources Trust	346,361		3,032,498
Delphi Energy Corp.(b)	831,300		1,767,889
Ember Resources, Inc.(b)	274,224		604,344
Endev Energy, Inc.(b)	1,538,300		1,635,717
Equinox Minerals Ltd.(b)	1,552,114		2,515,539
Fairborne Energy Trust	204,620		1,833,623
Fairquest Energy Ltd.(b)	140,868		386,552
First Calgary Petroleums Ltd.(b)	740,786		4,427,628
Galleon Energy, Inc. - Class A (acquired 1/20/05 through 3/13/06, cost $9,925,963)(b)(c)(f)	1,750,482		27,139,488
Gastar Exploration Ltd.(b)(e)	636,479		1,368,430
Highpine Oil & Gas Ltd.(b)	277,650		3,738,031
HSE Integrated Ltd.(b)	28,238		42,376
Innova Exploration Ltd. (acquired 10/31/05, cost $1,080,002)(c)(f)	155,000		862,625
Innova Exploration Ltd. (acquired 2/15/06 through 2/17/06, cost $381,883)(b)	77,609		431,919
Iteration Energy Ltd.(b)	114,809		433,186
Leader Energy Services Ltd.(b)	454,104		642,517
Masters Energy, Inc.(b)	27,741		80,881
Midnight Oil Exploration Ltd.(b)	1,127,700		2,291,857
Mission Oil & Gas, Inc. (acquired 6/13/06 through 6/14/06, cost $458,367)(b)	42,390		459,832
Mission Oil & Gas, Inc. (acquired 7/10/06, cost $ 285,517)(f)(g)	26,500		287,463
Niko Resources Ltd. (acquired 5/2/03 through 11/10/03, cost $689,948)(c)	39,000		2,787,506
Oilexco, Inc.(b)	1,617,675		10,057,148
Open Range Energy Corp.(b)	48,061		136,004
Pacific Rodera Energy, Inc.(b)	990,200		551,927
Paramount Resources Ltd. - Class A(b)	377,100		7,760,923
Pengrowth Energy Trust	21,699		371,027
Penn West Energy Trust	72,000		2,196,150
Petrolifera Petroleum Ltd.(b)	199,615		3,021,228
ProspEx Resources Ltd.(b)	1,504,120		5,726,787
Real Resources, Inc.(b)	412,737		5,910,653
Tag Oil Ltd. (acquired 9/22/05, cost 218,247)(c)(f)	198,000		82,348
Technicoil Corp. (acquired 6/15/04 through 9/28/06, cost $1,448,140)(b)(g)	1,300,900		1,171,329
Thunder Energy Trust	511,162		2,485,348
Trafalgar Energy Ltd.(b)	21,717		76,353
Trilogy Energy Trust	152,791		1,493,648
True Energy Trust	188,332		1,209,627
Tusk Energy Corp. (acquired 10/5/05 through 4/10/06, cost $1,152,774)(b)	686,240		1,859,683
Tusk Energy Corp. (acquired 3/10/05, cost $ 1,123,911)(c)(f)	300,846		812,644
Tusk Energy Corp. (acquired 6/2/06, cost $1,422,160)(c)(f)	381,000		1,029,156
Vault Energy Trust	130,450		615,251
Vero Energy, Inc.(b)	91,642		476,226
West Energy Ltd.(b)	2,735		12,712

23

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SCHEDULE OF INVESTMENTS

GLOBAL RESOURCES PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS (Continued)
Canada (Continued)
Oil & Gas (Continued)
Western Oil Sands, Inc. - Class A(b)	76,800	$	2,154,207
Zenas Energy Corp. (acquired 5/18/04 through 3/16/06, cost $367,777)(f)(g)	77,000		206,011
Zenas Energy Corp. (acquired 5/18/04 through 7/5/06, cost $3,264,411)(b)	774,985		2,073,450
			149,621,551
Transportation — 0.1%
Railpower Technologies Corp.(b)	360,600		466,926
Total Canada			222,112,255
Cayman Islands — 0.3%
Energy & Utilities — 0.3%
Suntech Power Holdings Co., Ltd. - ADR(b)(e)	82,700		2,812,627
Norway — 1.9%
Transportation — 1.9%
Stolt-Nielsen SA (acquired 1/20/05, cost $2,320,388)(c)	170,000		5,207,532
Stolt-Nielsen SA (acquired 2/18/04 through 9/9/04, cost $ 5,821,836)	426,100		12,991,789
			18,199,321
United Kingdom — 2.6%
Energy & Utilities — 0.1%
ITM Power PLC(b)	525,200		1,285,415
Finance — 0.2%
Archipelago Holdings, Inc. (acquired 5/13/05, cost $1,453,189)(c)(f)	2,247,400		1,485,124
Oil & Gas — 2.3%
Expro International Group PLC	565,348		9,785,360
Tullow Oil PLC	744,198		5,799,363
Venture Production PLC	314,729		5,441,344
			21,026,067
Total United Kingdom			23,796,606
United States — 71.5%
Energy & Utilities — 0.6%
Evergreen Energy, Inc.(b)(e)	393,400		3,890,726
Longview Energy Co. (acquired 8/13/04, cost $1,281,000)(c)(d)(f)	85,400		1,622,600
			5,513,326
Finance — 0.1%
NGP Capital Resources Co.	64,500		1,080,375
Manufacturing — 0.0%
OYO Geospace Corp.(b)	3,350		194,602
Metal & Mining — 18.1%
Alpha Natural Resources, Inc.(b)(e)	27,500		391,325
Arch Coal, Inc.(e)	1,324,400		39,771,732
Claymont Steel Holdings, Inc.(b)	77,000		1,416,030
CONSOL Energy, Inc.	2,253,200		72,395,316
Foundation Coal Holdings, Inc.(e)	72,000		2,286,720
Massey Energy Co.(e)	1,663,040		38,632,419
Peabody Energy Corp.	212,736		8,596,662
Randgold Resources Ltd.(b)	200,000		4,692,000
			168,182,204
Oil & Gas — 52.2%
American Oil & Gas, Inc.(b)(e)	224,088		1,467,776
BJ Services Co.	501,400		14,701,048
Bois d’Arc Energy, Inc.(b)	101,900		1,490,797
Brigham Exploration Co.(b)	81,900		598,689
Callon Petroleum Co.(b)	92,200		1,385,766
CanArgo Energy Corp.(b)(e)	5,024,200		8,139,204
Clayton Williams Energy, Inc.(b)	267,021		9,695,533
Complete Production Services, Inc.(b)	34,400		729,280
Comstock Resources, Inc.(b)	233,200		7,243,192
Delta Petroleum Corp.(b)(e)	314,497		7,283,751
Denbury Resources, Inc.(b)	347,600		9,659,804
Diamond Offshore Drilling, Inc.(e)	580,523		46,407,009
ENSCO International, Inc.	128,800		6,447,728
EXCO Resources, Inc.(b)	190,300		3,217,973
The Exploration Co.(b)	179,600		2,395,864
Gasco Energy, Inc.(b)(e)	864,200		2,117,290
Global Industries, Inc.(b)	189,496		2,471,028
GlobalSantaFe Corp.(e)	362,800		21,325,384
Grant Prideco, Inc.(b)	96,200		3,825,874
Halliburton Co.(e)	622,826		19,338,747
Hercules Offshore, Inc.(b)	68,900		1,991,210
Matador Resources Co. (acquired 10/14/03 through 4/19/06, cost $2,957,155)(c)(d)(f)	171,131		4,620,537
Newfield Exploration Co.(b)(e)	1,059,310		48,675,294
Parallel Petroleum Corp.(b)	107,032		1,880,552
Penn Virginia Corp.	483,100		33,836,324
Petrohawk Energy Corp.(b)	406,600		4,675,900
PetroQuest Energy, Inc.(b)	494,654		6,301,892
Pioneer Natural Resources Co.	379,200		15,050,448
Plains Exploration & Production Co.(b)	1,087,505		51,689,113
Precision Drilling Trust(e)	152,700		3,536,532
Pride International, Inc.(b)	528,100		15,843,000
Rowan Cos., Inc.(e)	717,000		23,804,400
Schlumberger Ltd.(e)	256,036		16,171,234
Southwestern Energy Co.(b)	654,900		22,954,245
Transocean, Inc.(b)	604,500		48,898,005
Treasure Island Royalty Trust(b)	366,922		40,361
Weatherford International Ltd.(b)	377,198		15,763,104
			485,673,888
Transportation — 0.5%
Hornbeck Offshore Services, Inc.(b)(e)	142,900		5,101,530
Waste Management — 0.0%
Republic Resources, Inc.(b)	28,750		862
Total United States			665,746,787
TOTAL COMMON STOCKS
(Cost $568,939,579)			932,667,596

24

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SCHEDULE OF INVESTMENTS

GLOBAL RESOURCES PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)		NUMBER OF SHARES			VALUE
WARRANTS — 0.1%
Nevsun Resources Ltd. (issued 12/18/03, expiring 12/18/08, strike price 10.00 CAD) (acquired 1/20/05, cost $2)(f)(h)			250,000		$	218,668
Point North Energy Ltd. (issued 7/24/03, expiring 7/23/08, strike price 5.00 CAD) (acquired 7/24/03, cost $74)(c)(d)(f)(i)			147,124			63,081
Triex Minerals Corp. (issued 12/23/05, expiring 6/23/07, strike price 3.00 CAD) (acquired 12/23/05, cost $0)(d)(f)(g)(j)			156,050			266,295
TOTAL WARRANTS
(Cost $76)						548,044
		NUMBER OF CONTRACTS
CALL OPTIONS PURCHASED — 0.4%
U.S. Dollar versus Canadian Dollar, Strike Rate 1.120%, Expires 03/29/07			37,000,000			1,415,028
U.S. Dollar versus Canadian Dollar, Strike Rate 1.145%, Expires 03/29/07			65,005,000			1,398,907
U.S. Dollar versus Canadian Dollar, Strike Rate 1.145%, Expires 03/29/07			38,200,000			822,064
U.S. Dollar versus Canadian Dollar, Strike Rate 1.155%, Expires 03/29/07			32,731,000			531,257
TOTAL CALL OPTIONS PURCHASED
(Cost $ 1,993,762)						4,167,256
TOTAL MARKET VALUE OF SECURITIES BEFORE SECURITIES LENDING COLLATERAL AND AFFILIATED INVESTMENTS — 100.7%
(Cost $570,933,417)						937,382,896
	MATURITY	PAR/SHARES (000)
SECURITIES LENDING COLLATERAL — 1.8%
Bank of America Corp., Master Notes
5.38%(k)(l)	01/02/07	$	14,628			14,627,697
The Bear Stearns Cos., Inc., Variable Rate Commercial Paper
5.38%(k)(l)	01/02/07		980			980,012
Morgan Stanley, Variable Rate Commercial Paper
5.37%(k)(l)	01/02/07		1,029			1,028,912
TOTAL SECURITIES LENDING COLLATERAL
(Cost $16,636,621)						16,636,621
AFFILIATED INVESTMENTS — SHORT TERM — 21.4%
Institutional Money Market Trust(l)
(Cost $198,800,753)			198,801			198,800,753
TOTAL INVESTMENTS IN SECURITIES — 123.9%
(Cost $786,370,791(a))						1,152,820,270
		NUMBER OF CONTRACTS
CALL OPTIONS WRITTEN — (0.2)%
U.S. Dollar versus Canadian Dollar, Strike Rate 1.120%, Expires 03/29/07
(Premiums received $736,300)			(37,000,000	)	$	(1,415,028	)
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL — (23.1)%						(215,437,374	)
LIABILITIES IN EXCESS OF OTHER ASSETS — (0.6)%						(5,456,700	)
NET ASSETS — 100.0%					$	930,511,168

(a) Cost for federal income tax purposes is $786,370,832. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	395,231,658
Gross unrealized depreciation		(28,782,220	)
	$	366,449,438

(b) Non-income producing security.

(c) Security restricted as to public resale. These securities are ineligible for resale into the public market until such time that either (i) a resale Registration Statement has been filed with the SEC and declared effective or (ii) resale is permitted under Rule 144A without the need for an effective registration statement. As of December 31, 2006, the Portfolio held 6.3% of its net assets, with a current market value of $59,075,591 and an original cost of $32,082,116 in these securities.

(d) Security is illiquid. As of December 31, 2006, the Portfolio held 1.2% of its net assets, with a current market value of $10,967,946 in these securities.

(e) Total or partial security on loan.

(f) Security valued at fair value as determined in good faith by or under the direction of the Board of Trustees. As of December 31, 2006, these securities had a total market value of $39,994,059, which represents 4.3% of net assets.

(g) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. As of December 31, 2006, the Portfolio held 0.2% of its net assets, with a current market value of $1,931,098 and a current cost of $2,101,434 in securities restricted as to resale.

(h) As of December 31, 2006, the aggregate amount of shares called for by these warrants is 250,000. These warrants were exercisable as of 12/18/03.

(i) As of December 31, 2006, the aggregate amount of shares called for by these warrants is 147,124. These warrants were exercisable as of 7/24/03.

(j) As of December 31, 2006, the aggregate amount of shares called for by these warrants is 156,050. These warrants were exercisable as of 12/23/05.

(k) Variable rate security. Rates shown are the rates as of December 31, 2006.

(l) Security purchased with the cash proceeds from securities loaned.

25

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SCHEDULE OF INVESTMENTS

ALL-CAP GLOBAL RESOURCES PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS — 98.6%
Australia — 2.2%
Metal & Mining — 2.2%
BHP Billiton Ltd. - ADR(b)	269,890	$	10,728,127
Zinifex Ltd.	625,600		9,278,793
			20,006,920
Canada — 13.7%
Metal & Mining — 4.0%
Eldorado Gold Corp.(c)	871,600		4,716,199
NovaGold Resources, Inc.(b)(c)	562,800		9,657,648
Teck Cominco Ltd.	282,430		21,288,511
			35,662,358
Oil & Gas — 9.7%
Canadian Natural Resources Ltd.	390,660		20,794,832
Compton Petroleum Corp.(c)	745,680		6,810,009
Ensign Energy Services, Inc.	147,109		2,319,886
Galleon Energy, Inc. - Class A (acquired 2/22/05 through 3/31/06, cost $6,644,560)(c)(d)	773,874		11,998,150
Husky Energy, Inc.	217,010		14,522,540
Nexen, Inc.	132,654		7,302,994
Pason Systems, Inc.	373,140		4,242,882
Petro Canada	198,210		8,116,046
Real Resources, Inc.(c)	256,254		3,669,718
Talisman Energy, Inc. - ADR	417,983		7,101,531
			86,878,588
Total Canada			122,540,946
Denmark — 0.1%
Oil & Gas — 0.1%
A P Moller - Maersk A/S	54		508,568
France — 1.1%
Oil & Gas — 0.5%
Total SA - ADR	62,660		4,506,507
Steel Pipe & Tubes — 0.6%
Vallourec SA	19,000		5,525,312
Total France			10,031,819
Luxembourg — 1.6%
Manufacturing — 0.3%
Tenaris SA - ADR	58,865		2,936,775
Oil & Gas — 1.3%
Acergy SA	599,240		11,532,717
Total Luxembourg			14,469,492
Netherlands — 3.7%
Oil & Gas — 3.7%
Core Laboratories NV(b)(c)	273,740		22,172,940
SBM Offshore NV	323,740		11,132,502
			33,305,442
Norway — 3.9%
Oil & Gas — 3.9%
Norsk Hydro ASA	491,400		15,249,856
Statoil ASA - ADR	723,880		19,052,521
			34,302,377
United Kingdom — 4.5%
Metal & Mining — 1.1%
Rio Tinto PLC - ADR	47,300		10,050,777
Oil & Gas — 3.4%
BG Group PLC - ADR	160,280		10,969,564
Cairn Energy PLC	535,030		18,845,948
			29,815,512
Total United Kingdom			39,866,289
United States — 67.8%
Computer Software & Services — 1.2%
Veritas DGC, Inc.(c)	124,207		10,635,846
Energy & Utilities — 2.9%
Questar Corp.(b)	306,960		25,493,028
Food & Agriculture — 1.6%
Potash Corp. of Saskatchewan, Inc.	99,300		14,247,564
Metal & Mining — 14.3%
Arch Coal, Inc.(b)	376,000		11,291,280
Cameco Corp.	86,700		3,507,015
CONSOL Energy, Inc.(b)	612,500		19,679,625
Goldcorp, Inc.	777,902		22,123,533
Massey Energy Co.(b)	713,429		16,572,956
Peabody Energy Corp.	374,480		15,132,737
Royal Gold, Inc.(b)	291,300		10,480,974
Silver Standard Resources, Inc.(b)(c)	771,490		23,715,602
Silver Wheaton Corp.(b)(c)	469,674		4,922,183
			127,425,905
Oil & Gas — 47.8%
Anadarko Petroleum Corp.	121,958		5,307,612
Baker Hughes, Inc.	89,600		6,689,536
BJ Services Co.(b)	254,900		7,473,668
Cameron International Corp.(b)(c)	124,000		6,578,200
Chesapeake Energy Corp.(b)	397,530		11,548,247
ConocoPhillips	132,800		9,554,960
Devon Energy Corp.	104,000		6,976,320
EnCana Corp.	372,000		17,093,400
ENSCO International, Inc.(b)	349,978		17,519,899
EOG Resources, Inc.	290,770		18,158,586
The Exploration Co.(c)	269,300		3,592,462
Exxon Mobil Corp.	41,040		3,144,895
FMC Technologies, Inc.(c)	197,000		12,141,110
Forest Oil Corp.(c)	177,600		5,803,968
GlobalSantaFe Corp.(b)	276,990		16,281,472
Grant Prideco, Inc.(b)(c)	342,140		13,606,908
Hanover Compressor Co.(b)(c)	388,200		7,333,098
Helix Energy Solutions Group, Inc.(c)	181,100		5,681,107
Helmerich & Payne, Inc.	437,600		10,708,072
Hercules Offshore, Inc.(c)	159,700		4,615,330
Hess Corp.(b)	392,940		19,478,036
Hugoton Royalty Trust	1		25
Marathon Oil Corp.	111,700		10,332,250
Mariner Energy, Inc.(c)	531,400		10,415,440
Nabors Industries Ltd.(c)	350,680		10,443,250
National-Oilwell, Inc.(b)(c)	183,089		11,201,385
Newfield Exploration Co.(b)(c)	345,600		15,880,320

26

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SCHEDULE OF INVESTMENTS

ALL-CAP GLOBAL RESOURCES PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED ) (PERCENTAGE OF NET ASSETS)		NUMBER OF SHARES			VALUE
COMMON STOCKS (Continued)
United States (Continued)
Oil & Gas (Continued)
Noble Energy, Inc.			381,210		$	18,705,975
Occidental Petroleum Corp.			303,450			14,817,464
Range Resources Corp.(b)			261,500			7,180,790
Schlumberger Ltd.(b)			273,100			17,248,996
Smith International, Inc.(b)			157,900			6,484,953
Southwestern Energy Co.(b)(c)			154,820			5,426,441
Suncor Energy, Inc.			226,930			17,907,046
Swift Energy Co.(c)			158,500			7,102,385
Todco(b)(c)			184,400			6,300,948
Transocean, Inc.(c)			376,450			30,451,040
Weatherford International Ltd.(c)			315,580			13,188,088
XTO Energy, Inc.			303,133			14,262,408
						426,636,090
Total United States						604,438,433
TOTAL COMMON STOCKS
(Cost $809,094,456)						879,470,286
	MATURITY	PAR (000)
SHORT TERM INVESTMENTS — 5.2%
Federal Home Loan Bank, Discount Notes
4.80%(e)	01/02/07	$	38,000			37,994,933
Galileo Money Market Fund			9,035			9,035,178
TOTAL SHORT TERM INVESTMENTS
(Cost $47,030,111)						47,030,111
		NUMBER OF CONTRACTS
CALL OPTIONS PURCHASED — 0.2%
U.S. Dollar versus Canadian Dollar, Strike Rate 1.120%,
Expires 03/29/07			9,000,000			344,196
U.S. Dollar versus Canadian Dollar, Strike Rate 1.145%,
Expires 03/29/07			30,960,000			666,260
U.S. Dollar versus Canadian Dollar, Strike Rate 1.145%,
Expires 03/29/07			18,204,000			391,750
U.S. Dollar versus Canadian Dollar, Strike Rate 1.155%,
Expires 03/29/07			7,961,000			129,215
TOTAL CALL OPTIONS PURCHASED
(Cost $755,928)						1,531,421
TOTAL MARKET VALUE OF SECURITIES BEFORE SECURITIES LENDING COLLATERAL AND AFFILIATED INVESTMENTS — 104.0%
(Cost $856,880,495)						928,031,818
		PAR/SHARES (000)
SECURITIES LENDING COLLATERAL — 1.3%
Bank of America Corp., Master Notes
5.38%(f)(g)	01/02/07	$	6,577		$	6,576,887
The Bear Stearns Cos., Inc., Variable Rate Commercial Paper
5.38%(f)(g)	01/02/07		1,441			1,440,533
Citigroup, Inc., Master Notes
5.38%(f)(g)	01/02/07		738			737,555
Morgan Stanley, Variable Rate Commercial Paper
5.37%(f)(g)	01/02/07		3,339			3,339,009
TOTAL SECURITIES LENDING COLLATERAL
(Cost $12,093,984)						12,093,984
AFFILIATED INVESTMENTS - SHORT TERM — 17.2%
Institutional Money Market Trust(g) (Cost $153,123,788)			153,124			153,123,788
TOTAL INVESTMENTS IN SECURITIES — 122.5%
(Cost $ 1,022,098,267(a))						1,093,249,590
		NUMBER OF CONTRACTS
CALL OPTIONS WRITTEN — 0.0%
U.S. Dollar versus Canadian Dollar, Strike Rate 1.120%, Expires 03/29/07
(Premiums received $179,100)			(9,000,000	)		(344,196	)
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL — (18.5)%			(165,217,772	)
LIABILITIES IN EXCESS OF OTHER ASSETS — (4.0)%						(35,579,432	)
NET ASSETS — 100.0%					$	892,108,190

(a) Cost for federal income tax purposes is $1,022,716,398. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	98,783,051
Gross unrealized depreciation		(28,249,859	)
	$	70,533,192

(b) Total or partial security on loan.

(c) Non-income producing security.

27

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SCHEDULE OF INVESTMENTS

ALL-CAP GLOBAL RESOURCES PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED)

(PERCENTAGE OF NET ASSETS)

(d) Security restricted as to public resale. These securities are ineligible for resale into the public market until such time that either (i) a resale Registration Statement has been filed with the SEC and declared effective or (ii) resale is permitted under Rule 144A without the need for an effective registration statement. As of December 31, 2006, the Portfolio held 1.3% of its net assets, with a current market value of $11,998,150 and an original cost of $6,644,560 in these securities.

(e) The rate shown is the effective yield at the time of purchase.

(f) Variable rate security. Rates shown are the rates as of December 31, 2006.

(g) Security purchased with the cash proceeds from securities loaned.

28

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

HEALTH SCIENCES OPPORTUNITIES PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)		NUMBER OF SHARES			VALUE
COMMON STOCKS — 93.5%
Insurance — 2.0%
Aetna, Inc.			450,500		$	19,452,590
Medical & Medical Services — 15.8%
Amgen, Inc.(b)(c)			590,023			40,304,471
Baxter International, Inc.(c)			483,500			22,429,565
Biomet, Inc.			309,700			12,781,319
Cerner Corp.(b)			51,300			2,334,150
Community Health Systems, Inc.(b)			197,830			7,224,752
Davita, Inc.(b)			299,100			17,012,808
Health Net, Inc.(b)			202,300			9,843,918
Manor Care, Inc.			478,600			22,455,912
Quest Diagnostics, Inc.			93,600			4,960,800
UnitedHealth Group, Inc.			235,800			12,669,534
						152,017,229
Medical Instruments & Supplies — 28.8%
Alcon, Inc.			123,800			13,837,126
Becton, Dickinson & Co.			316,000			22,167,400
The Cooper Cos., Inc.(c)			96,100			4,276,450
Cyberonics, Inc.(b)(c)			429,300			8,860,752
DENTSPLY International, Inc.			481,820			14,382,327
Edwards Lifesciences Corp.(b)			119,900			5,640,096
Johnson & Johnson			622,800			41,117,256
Medtronic, Inc.(c)			567,700			30,377,627
Mentor Corp.			31,266			1,527,970
Northstar Neuroscience, Inc.(b)			255,400			3,672,652
Stryker Corp.			694,400			38,268,384
Varian Medical Systems, Inc.(b)			620,188			29,502,343
Waters Corp.(b)			592,600			29,019,622
Wright Medical Group, Inc.(b)(c)			650,400			15,141,312
Zimmer Holdings, Inc.(b)			229,700			18,003,886
						275,795,203
Pharmaceuticals — 46.9%
Abbott Laboratories			367,000			17,876,570
Affymax, Inc.(b)(c)			74,700			2,542,788
Alexion Pharmaceuticals, Inc.(b)(c)			871,700			35,207,963
Allergan, Inc.(c)			214,000			25,624,360
Applera Corp. - Celera Genomic Group(b)			557,700			7,802,223
Biogen Idec, Inc.(b)(c)			476,800			23,453,792
BioMarin Pharmaceutical, Inc.(b)(c)			1,809,279			29,654,083
Cardiome Pharma Corp.(b)			245,300			2,735,095
Genentech, Inc.(b)			325,800			26,432,154
Gilead Sciences, Inc.(b)			528,800			34,334,984
ICOS Corp.(b)(c)			289,100			9,768,689
InterMune, Inc.(b)(c)			350,581			10,780,366
Kosan Biosciences, Inc.(b)			710,700			3,944,385
Merck & Co., Inc.			1,012,300			44,136,280
Myriad Genetics, Inc.(b)			229,600			7,186,480
Novartis AG - ADR			242,400			13,923,456
Pfizer, Inc.			875,659			22,679,568
Pharmion Corp.(b)			427,600			11,006,424
Regeneron Pharmaceuticals, Inc.(b)			723,600			14,522,652
Roche Holding AG			100,700			18,057,406
Roche Holding AG - ADR			313,200			28,030,711
Schering-Plough Corp.(c)			1,000,000			23,640,000
Shire PLC - ADR			96,400			5,953,664
United Therapeutics Corp.(b)			48,100			2,615,197
Wyeth			547,200			27,863,424
						449,772,714
TOTAL COMMON STOCKS
(Cost $813,284,181)						897,037,736
	MATURITY	PAR / SHARES (000)
SHORT TERM INVESTMENTS — 7.9%
Federal Home Loan Bank, Discount Notes
5.16%(d)	01/12/07	$	75,800			75,794,171
Galileo Money Market Fund			113			112,793
TOTAL SHORT TERM INVESTMENTS
(Cost $75,906,964)						75,906,964
TOTAL MARKET VALUE OF SECURITIES BEFORE SECURITIES LENDING COLLATERAL AND AFFILIATED INVESTMENTS — 101.4%
(Cost $889,191,145)						972,944,700
SECURITIES LENDING COLLATERAL — 0.5%
Citigroup, Inc., Master Notes
5.38%(e)(f)	01/02/07		4,942			4,942,305
Morgan Stanley, Variable Rate Commercial Paper
5.37%(e)(f)	01/02/07		227			226,575
TOTAL SECURITIES LENDING COLLATERAL
(Cost $5,168,880)						5,168,880
AFFILIATED INVESTMENTS — SHORT TERM — 16.9%
Institutional Money Market Trust(f) (Cost $161,702,973)			161,703			161,702,973
TOTAL INVESTMENTS IN SECURITIES — 118.8%
(Cost $1,056,062,998(a))						1,139,816,553
		NUMBER OF CONTRACTS
CALL OPTIONS WRITTEN — 0.0%
Intermune, Inc., Strike Price $30, Expires 01/20/07 (Premiums received $51,853)			(685	)		(130,150	)
PUT OPTIONS WRITTEN — 0.0%
UnitedHealth Group, Inc., Strike Price $50, Expires 01/20/07 received (Premiums $141,154)			(1,920	)		(38,400	)

29

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

HEALTH SCIENCES OPPORTUNITIES PORTFOLIO (CONCLUDED))

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	VALUE
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL — (17.4)%	$	(166,871,853	)
LIABILITIES IN EXCESS OF OTHER ASSETS — (1.4)%		(13,509,393	)
NET ASSETS — 100.0%	$	959,266,757

(a) Cost for federal income tax purposes is $1,059,137,425. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	81,024,036
Gross unrealized depreciation		(344,908	)
	$	80,679,128

(b) Non-income producing security.

(c) Total or partial security on loan.

(d) The rate shown is the effective yield at the time of purchase.

(e) Variable rate security. Rates shown are the rates as of December 31, 2006.

(f) Security purchased with the cash proceeds from securities loaned.

30

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

U.S. OPPORTUNITIES PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS — 96.4%
Aerospace — 2.0%
Curtiss-Wright Corp.	53,500	$	1,983,780
Goodrich Corp.	42,000		1,913,100
Orbital Sciences Corp.(b)	70,400		1,298,176
			5,195,056
Banks — 4.3%
Associated Banc-Corp.	40,000		1,395,200
City National Corp.	21,000		1,495,200
Compass Bancshares, Inc.(c)	32,600		1,944,590
Northern Trust Corp.	37,400		2,269,806
Pinnacle Financial Partners, Inc.(b)	28,994		962,021
Thomas Weisel Partners Group, Inc.(b)	72,300		1,525,530
Wilmington Trust Co.	29,300		1,235,581
			10,827,928
Business Services — 4.5%
Amvescap PLC - ADR	77,000		1,898,050
Aquantive, Inc.(b)(c)	28,100		692,946
Corrections Corp. of America(b)	33,650		1,521,989
The Dun & Bradstreet Corp.(b)	21,500		1,779,985
Fiserv, Inc.(b)	46,100		2,416,562
FTI Consulting, Inc.(b)	47,100		1,313,619
Kelly Services, Inc.	47,500		1,374,650
Stanley, Inc.(b)	22,300		377,093
			11,374,894
Chemicals — 2.9%
Albemarle Corp.	30,000		2,154,000
Church & Dwight Co., Inc.	42,500		1,812,625
The Lubrizol Corp.	35,100		1,759,563
Rohm and Haas Co.	30,500		1,559,160
			7,285,348
Computer & Office Equipment — 0.1%
Isilon Systems, Inc.(b)(c)	10,000		276,000
Computer Software & Services — 4.7%
3Com Corp.(b)(c)	186,700		767,337
BEA Systems, Inc.(b)	66,900		841,602
Cogent Communications Group, Inc.(b)	57,200		927,784
Double-Take Software, Inc.(b)	16,000		206,080
Hyperion Solutions Corp.(b)	33,100		1,189,614
Interwoven, Inc.(b)	166,300		2,439,621
Opnet Technologies, Inc.(b)	25,300		365,585
Perficient, Inc.(b)	45,500		746,655
Seagate Technology, Inc.(c)	54,300		1,438,950
TIBCO Software, Inc.(b)	124,800		1,178,112
Vasco Data Security International, Inc.(b)	25,000		296,250
VeriFone Holdings, Inc.(b)(c)	40,500		1,433,700
			11,831,290
Construction — 1.5%
EMCOR Group, Inc.(b)	32,500		1,847,625
Washington Group International, Inc.(b)	34,400		2,056,776
			3,904,401
Containers — 1.2%
Rexam PLC - SP ADR	30,000		1,561,500
Smurfit-Stone Container Corp.(b)	133,700		1,411,872
			2,973,372
Credit Institutions — 0.4%
CSG Systems, Inc.(b)	42,300		1,130,679
Electronics — 1.2%
Amphenol Corp.	32,700		2,030,016
Molex, Inc.	29,300		926,759
			2,956,775
Energy & Utilities — 4.9%
Airgas, Inc.	31,000		1,256,120
Atmos Energy Corp.	52,100		1,662,511
Edison International	51,800		2,355,864
Mirant Corp.	67,200		2,121,504
PPL Corp.	50,600		1,813,504
Sempra Energy	32,200		1,802,234
UGI Corp.	47,300		1,290,344
			12,302,081
Entertainment & Leisure — 6.6%
Gaylord Entertainment Co.(b)	31,500		1,604,295
Hilton Hotels Corp.(c)	91,700		3,200,330
Isle of Capri Casinos, Inc.(b)	40,000		1,063,200
Morgans Hotel Group Co.(b)	109,500		1,853,835
Penn National Gaming, Inc.(b)(c)	41,000		1,706,420
Sabre Holdings Corp.	67,700		2,158,953
Vail Resorts, Inc.(b)	38,000		1,703,160
WMS Industries, Inc.(b)(c)	48,000		1,673,280
Wyndham Worldwide Corp.(b)	53,000		1,697,060
			16,660,533
Finance — 1.8%
AllianceBernstein Holding LP	25,500		2,050,200
Ameriprise Financial, Inc.	46,900		2,556,050
			4,606,250
Food & Agriculture — 1.5%
Corn Products International, Inc.	77,700		2,683,758
The Mosaic Co.(b)	55,900		1,194,024
			3,877,782
Insurance — 4.5%
Assurant, Inc.(c)	31,100		1,718,275
Axis Capital Holdings Ltd.	58,600		1,955,482
Cincinnati Financial Corp.	35,700		1,617,567
Principal Financial Group, Inc.	20,000		1,174,000
Protective Life Corp.	28,200		1,339,500
Reinsurance Group of America, Inc.	38,800		2,161,160
Torchmark Corp.	23,300		1,485,608
			11,451,592
Leasing — 0.5%
William Scotsman International, Inc.(b)	59,700		1,171,314
Manufacturing — 9.2%
Cooper Industries Ltd. - Class A	21,300		1,926,159
Fei Co.(b)	24,400		643,428
Gardner Denver, Inc.(b)	51,800		1,932,658
Guess?, Inc.(b)	23,800		1,509,634

31

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SCHEDULE OF INVESTMENTS

U.S. OPPORTUNITIES PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS (Continued)
Manufacturing (Continued)
Iconix Brand Group, Inc.(b)	83,700	$	1,622,943
Knoll, Inc.	81,800		1,799,600
Phillips - Van Heusen Corp.	47,500		2,383,075
Polo Ralph Lauren Corp.(c)	27,800		2,158,948
Sealed Air Corp.	29,600		1,921,632
Textron, Inc.	23,559		2,209,128
VF Corp.	27,400		2,248,992
Watson Wyatt Worldwide, Inc.	35,000		1,580,250
Whirlpool Corp.(c)	17,800		1,477,756
			23,414,203
Medical & Medical Services — 1.0%
Biomet, Inc.	30,800		1,271,116
Davita, Inc.(b)	21,600		1,228,608
			2,499,724
Medical Instruments & Supplies — 2.4%
DENTSPLY International, Inc.	18,300		546,255
Northstar Neuroscience, Inc.(b)	17,600		253,088
Varian Medical Systems, Inc.(b)	42,185		2,006,741
Waters Corp.(b)	37,800		1,851,066
Wright Medical Group, Inc.(b)(c)	57,500		1,338,600
			5,995,750
Metal & Mining — 3.3%
Allegheny Technologies, Inc.	17,900		1,623,172
CONSOL Energy, Inc.(c)	31,500		1,012,095
Hudbay Minerals, Inc.(b)(c)	75,100		1,407,562
Kinross Gold Corp.(b)	65,000		772,200
Oregon Steel Mills, Inc.(b)	17,400		1,085,934
Sxr Uranium One, Inc.(b)	84,500		1,163,277
Yamana Gold, Inc.	103,300		1,361,494
			8,425,734
Motor Vehicles — 1.1%
LKQ Corp.(b)	74,900		1,721,951
Rush Enterprises, Inc. - Class A(b)	70,600		1,194,552
			2,916,503
Oil & Gas — 6.6%
Acergy SA - ADR(b)(c)	71,500		1,377,090
AGL Resources, Inc.	54,100		2,105,031
Cameron International Corp.(b)(c)	32,400		1,718,820
Chesapeake Energy Corp.(c)	49,900		1,449,595
Diamond Offshore Drilling, Inc.(c)	24,800		1,982,512
ENSCO International, Inc.(c)	26,300		1,316,578
Newfield Exploration Co.(b)(c)	23,300		1,070,635
Noble Energy, Inc.	31,600		1,550,612
Smith International, Inc.(c)	35,800		1,470,306
St. Mary Land & Exploration Co.(c)	41,500		1,528,860
Western Refining, Inc.	43,500		1,107,510
			16,677,549
Personal Services — 1.2%
Life Time Fitness, Inc.(b)	46,700		2,265,417
Nutri System, Inc.(b)(c)	13,900		881,121
			3,146,538
Pharmaceuticals — 3.5%
Affymax, Inc.(b)(c)	13,000		442,520
Alexion Pharmaceuticals, Inc.(b)(c)	45,900		1,853,901
BioMarin Pharmaceutical, Inc.(b)(c)	112,700		1,847,153
ICOS Corp.(b)(c)	44,700		1,510,413
InterMune, Inc.(b)(c)	24,100		741,075
Pharmion Corp.(b)	48,600		1,250,964
Regeneron Pharmaceuticals, Inc.(b)	59,100		1,186,137
			8,832,163
Real Estate — 4.6%
Archstone-Smith Trust (REIT)	32,600		1,897,646
Douglas Emmett, Inc. (REIT)	66,200		1,760,258
Host Hotels & Resorts, Inc. (REIT)(c)	71,600		1,757,780
Jones Lang Lasalle, Inc. (REIT)	24,700		2,276,599
Kimco Realty Corp.(REIT)	47,500		2,135,125
The Macerich Co. (REIT)	21,400		1,852,598
			11,680,006
Restaurants — 0.5%
Ruth’s Chris Steak House, Inc.(b)	66,300		1,211,964
Retail Merchandising — 4.0%
Abercrombie & Fitch Co. - Class A	17,200		1,197,636
Asbury Automative Group, Inc.	79,100		1,863,596
Bebe Stores, Inc.(c)	56,100		1,110,219
Cache, Inc.(b)	79,100		1,996,484
Limited Brands, Inc.	63,200		1,829,008
O’Reilly Automotive, Inc.(b)(c)	42,300		1,356,138
Saks, Inc.(c)	50,200		894,564
			10,247,645
Security Brokers & Dealers — 1.2%
A.G. Edwards, Inc.	30,900		1,955,661
E*TRADE Financial Corp.(b)	44,300		993,206
			2,948,867
Semiconductors & Related Devices — 4.6%
ASML Holding NV(b)(c)	59,500		1,465,485
Fairchild Semiconductor International, Inc.(b)	76,700		1,289,327
Hittite Microwave Corp.(b)	36,300		1,173,216
Integrated Device Technology, Inc.(b)(c)	69,700		1,078,956
Lam Research Corp.(b)(c)	37,900		1,918,498
Lattice Semiconductor Corp.(b)	215,700		1,397,736
MEMC Electronic Materials, Inc.(b)	44,300		1,733,902
NVIDIA Corp.(b)(c)	42,700		1,580,327
			11,637,447
Soaps & Cosmetics — 1.1%
International Flavors & Fragrances, Inc.	25,700		1,263,412
Physicians Formula Holdings, Inc.(b)	81,400		1,521,366
			2,784,778
Telecommunications — 6.6%
American Tower Corp. - Class A	36,900		1,375,632
Anixter International, Inc.(b)	19,500		1,058,850
Atheros Communications, Inc.(b)	70,800		1,509,456
Cbeyond Communications, Inc.(b)	33,100		1,012,529
Cincinnati Bell, Inc.(b)	369,900		1,690,443

32

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SCHEDULE OF INVESTMENTS

U.S. OPPORTUNITIES PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)		NUMBER OF SHARES		VALUE
COMMON STOCKS (Continued)
Telecommunications (Continued)
Harman International Industries, Inc.			9,500	$	949,145
Harris Corp.			32,800		1,504,208
Hutchison Telecommunications International Ltd.(b)(c)			52,300		2,004,136
Leap Wireless International, Inc.(b)			40,500		2,408,535
NeuStar, Inc. — Class A(b)			29,500		956,980
Optium Corp.(b)			5,500		137,170
SBA Communications Corp.(b)			78,200		2,150,500
					16,757,584
Tobacco — 1.3%
Carolina Group			31,700		2,051,624
UST, Inc.(c)			20,500		1,193,100
					3,244,724
Transportation — 0.5%
Celadon Group, Inc.(b)			79,800		1,336,650
Waste Management — 1.1%
Allied Waste Industries, Inc.(b)			134,200		1,649,318
URS Corp.(b)			26,200		1,122,670
					2,771,988
TOTAL COMMON STOCKS
(Cost $214,588,053)					244,355,112
SHORT TERM INVESTMENTS — 5.7%
Federal Home Loan Bank, Discount Notes
4.80%(d)	01/02/07		5,000		4,998,000
Galileo Money Market Fund			9,399		9,399,256
TOTAL SHORT TERM INVESTMENTS
(Cost $14,397,256)					14,397,256
TOTAL MARKET VALUE OF SECURITIES BEFORE SECURITIES LENDING COLLATERAL AND AFFILIATED INVESTMENTS — 102.1%
(Cost $228,985,309)					258,752,368
	MATURITY	PAR/SHARES (000)
SECURITIES LENDING COLLATERAL — 1.2%
The Bear Stearns Cos., Inc., Variable Rate Commercial Paper
5.38%(e)(f)	01/02/07	$	190		189,714
Citigroup, Inc., Master Notes
5.38%(e)(f)	01/02/07		904		903,699
Morgan Stanley, Variable Rate Commercial Paper
5.37%(e)(f)	01/02/07		1,872		1,872,486
TOTAL SECURITIES LENDING COLLATERAL
(Cost $2,965,899)					2,965,899
		NUMBER OF SHARES
AFFILIATED INVESTMENTS - SHORT TERM — 17.2%
Institutional Money Market Trust(f)
(Cost $43,544,188)			43,544		43,544,188
TOTAL INVESTMENTS IN SECURITIES — 120.5%
(Cost $275,495,396(a))					305,262,455
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL — (18.4)%					(46,510,086	)
LIABILITIES IN EXCESS OF OTHER ASSETS — (2.1)%					(5,325,424	)
NET ASSETS — 100.0%				$	253,426,945

(a) Cost for federal income tax purposes is $275,818,957. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	32,262,594
Gross unrealized depreciation		(2,819,096	)
	$	29,443,498

(b) Non-income producing security.

(c) Total or partial security on loan.

(d) The rate shown is the effective yield at the time of purchase.

(e) Variable rate security. Rates shown are the rates as of December 31, 2006.

(f) Security purchased with the cash proceeds from securities loaned.

33

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SCHEDULE OF INVESTMENTS

GLOBAL OPPORTUNITIES PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS — 95.9%
Australia — 1.7%
Entertainment & Leisure — 0.8%
Publishing & Broadcasting Ltd.	24,000	$	404,461
Manufacturing — 0.5%
Bradken Ltd.	42,400		267,747
Metal & Mining — 0.4%
Mincor Resources NL	135,000		230,174
Total Australia			902,382
Belgium — 0.9%
Beverages & Bottling — 0.9%
Inbev NV	7,000		461,461
Brazil — 1.5%
Banks — 1.0%
Unibanco SA - ADR	5,600		520,576
Telecommunications — 0.5%
Net Servicos de Comunicacao SA - ADR	23,400		280,332
Total Brazil			800,908
Canada — 3.2%
Food & Agriculture — 1.0%
Potash Corporation of Saskatchewan, Inc.	3,800		544,184
Metal & Mining — 1.6%
Kinross Gold Corp.	21,000		248,870
Sxr Uranium One, Inc.(b)	19,900		273,035
Yamana Gold, Inc.	30,000		344,467
			866,372
Telecommunications — 0.6%
Rogers Communications, Inc.	10,800		321,365
Total Canada			1,731,921
Finland — 0.8%
Manufacturing — 0.8%
Wartsila OYJ - Series B	8,100		436,355
France — 1.9%
Banks — 0.6%
Credit Agricole SA	8,000		336,453
Insurance — 0.6%
Axa	8,000		323,886
Machinery & Heavy Equipment — 0.7%
Alstom	2,900		393,149
Total France			1,053,488
Germany — 3.0%
Air Transportation — 0.7%
Deutsche Lufthansa AG	13,600		374,312
Banks — 0.6%
Deutsche Bank AG	2,600		347,810
Oil & Gas — 0.7%
Linde AG	3,400		351,243
Soaps & Cosmetics — 1.0%
Henkel KGaA	3,600		529,771
Total Germany			1,603,136
Greece — 1.1%
Chemicals — 0.4%
Lanxess	4,000		224,302
Machinery & Heavy Equipment — 0.7%
Deutz AG	29,300		388,707
Total Greece			613,009
Hong Kong — 4.3%
Banks — 0.4%
Melco International Development Ltd.	100,000		237,070
Energy & Utilities — 0.5%
Guangdong Investment Ltd.	562,000		253,606
Entertainment & Leisure — 0.9%
Hongkong & Shanghai Hotels Ltd.	290,000		489,901
Oil & Gas — 0.5%
CNOOC Ltd.	297,000		282,174
Real Estate — 0.6%
Hang Lung Properties Ltd.	140,000		350,976
Retail Merchandising — 0.5%
Esprit Holdings Ltd.	23,000		256,811
Telecommunications — 0.9%
China Communications Services Corp. Ltd.(b)	2,100		1,199
China Mobile Ltd.	54,000		466,528
			467,727
Total Hong Kong			2,338,265
Indonesia — 0.5%
Banks — 0.5%
PT Bank Danamon	365,000		273,948
Italy — 2.1%
Banks — 2.1%
Credito Emiliano SpA	21,000		297,169
UniCredito Italiano SpA	93,000		815,154
			1,112,323
Japan — 7.9%
Banks — 1.2%
The Sumitomo Industries Ltd.	62,000		650,191
Chemicals — 0.4%
Shin-Etsu Chemical Co. Ltd.	3,500		234,402
Construction — 1.0%
Sekisui House Ltd.	36,000		524,247
Electronics — 0.4%
Star Micronics Co. Ltd.	11,500		229,507
Insurance — 1.2%
Millea Holdings, Inc.	10,000		352,927
T&D Holdings, Inc.	4,900		324,045
			676,972
Manufacturing — 0.9%
Daihatsu Motor Co. Ltd.	22,000		222,024
Uni-Charm Corp.	4,600		273,283
			495,307

34

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SCHEDULE OF INVESTMENTS

GLOBAL OPPORTUNITIES PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS (Continued)
Japan (Continued)
Metal & Mining — 0.9%
Nippon Steel Corp.	85,000	$	488,551
Real Estate — 1.2%
Mitsubishi Estate Co. Ltd.	16,000		414,100
Sumitomo Realty & Development Co. Ltd.	7,000		224,697
			638,797
Retail Merchandising — 0.7%
Parco Co. Ltd.	33,000		376,849
Total Japan			4,314,823
Luxembourg — 0.4%
Real Estate — 0.4%
Gagfah SA(b)	6,800		215,701
Malaysia — 1.0%
Banks — 0.4%
Bumiputra-Commerce Holdings Berhad	102,800		225,822
Telecommunications — 0.6%
Digi.com Berhad	74,000		318,821
Total Malaysia			544,643
Netherlands — 3.0%
Beverages & Bottling — 0.6%
Heineken Holding NV	8,000		325,259
Insurance — 0.7%
Aegon NV	21,000		400,290
Oil & Gas — 0.9%
SBM Offshore NV	13,800		474,543
Personal Services — 0.8%
USG People NV	9,400		410,843
Total Netherlands			1,610,935
Norway — 0.6%
Telecommunications — 0.6%
Telenor ASA	18,000		338,482
Singapore — 1.5%
Banks — 0.8%
United Overseas Bank Ltd.	33,000		417,408
Real Estate — 0.7%
Suntec Real Estate Investment Trust (REIT)	350,000		415,322
Total Singapore			832,730
South Korea — 0.4%
Security Brokers & Dealers — 0.4%
Korea Investment Holdings Co. Ltd.	4,400		219,054
Sweden — 3.4%
Banks — 1.1%
Nordea Bank AB	40,000		616,423
Conglomerates — 0.7%
Atlas Copco AB - A Shares	11,000		369,562
Manufacturing — 0.5%
Telefonaktiebolaget LM Ericsson - ADR	6,500		261,495
Metal & Mining — 0.5%
Boliden AB	10,000		257,086
Paper & Forest Products — 0.6%
Svenska Cellulosa AB-B (SCA)	6,800		355,100
Total Sweden			1,859,666
Switzerland — 4.5%
Chemicals — 0.7%
Syngenta AG	2,000		372,097
Electronics — 0.7%
ABB Ltd.	20,000		358,638
Food & Agriculture — 0.8%
Nestle SA	1,300		461,961
Pharmaceuticals — 1.6%
Roche Holding AG	3,000		537,957
Roche Holding AG - ADR	3,900		349,041
			886,998
Retail Merchandising — 0.7%
Compagnie Financiere Richemont AG	6,200		361,264
Total Switzerland			2,440,958
Taiwan — 1.5%
Computer & Office Equipment — 0.4%
Gemtek Technology Corp.	107,000		232,816
Electronics — 0.5%
Hon Hai Precision Industry Co. Ltd.	36,000		256,866
Insurance — 0.6%
Shin Kong Financial Holding Co.	323,000		347,930
Total Taiwan			837,612
Thailand — 0.2%
Banks — 0.2%
Bangkok Bank Public Co. Ltd.	29,000		94,076
United Kingdom — 6.0%
Beverages & Bottling — 0.6%
Diageo PLC	17,500		343,504
Business Services — 0.6%
Rightmove PLC	43,000		332,563
Computer Software & Services — 0.7%
Autonomy Corp. PLC	40,000		400,603
Energy & Utilities — 0.9%
International Power PLC	67,700		506,030
Finance — 0.9%
Amvescap PLC	20,600		240,393
ICAP PLC	26,000		243,593
			483,986
Food & Agriculture — 0.5%
Tate & Lyle PLC	17,600		264,829
Machinery & Heavy Equipment — 0.7%
The Weir Group PLC	33,500		350,263
Manufacturing — 0.5%
Rexam PLC	24,700		254,143

35

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

GLOBAL OPPORTUNITIES PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS (Continued)
United Kingdom (Continued)
Transportation — 0.6%
Arriva PLC	22,700	$	339,569
Total United Kingdom			3,275,490
United States — 44.5%
Aerospace — 0.8%
The Boeing Co.	5,000		444,200
Banks — 3.5%
Allied Irish Banks PLC	20,000		597,188
Banco Santander Chile SA - ADR	3,000		144,480
Bank of America Corp.	3,400		181,526
Citigroup, Inc.	6,000		334,200
J.P. Morgan Chase & Co.	8,300		400,890
SunTrust Banks, Inc.	3,000		253,350
			1,911,634
Beverages & Bottling — 1.1%
PepsiCo, Inc.	10,000		625,500
Broadcasting — 1.0%
News Corp.	24,000		534,240
Business Services — 1.2%
Akamai Technologies, Inc.(b)	8,300		440,896
Stanley, Inc.(b)	12,800		216,448
			657,344
Computer & Office Equipment — 2.9%
Apple Computer, Inc.(b)	3,500		296,940
Cisco Systems, Inc.(b)	14,200		388,086
Hewlett-Packard Co.	6,700		275,973
International Business Machines Corp.	3,200		310,880
Isilon Systems, Inc.(b)	2,100		57,960
Network Appliance, Inc.(b)	6,000		235,680
			1,565,519
Computer Software & Services — 0.5%
Autodesk, Inc.(b)	6,500		262,990
Double-Take Software, Inc.(b)	200		2,576
			265,566
Containers — 0.6%
Smurfit-Stone Container Corp.(b)	28,400		299,904
Electronics — 0.7%
Amphenol Corp.	6,500		403,520
Energy & Utilities — 2.4%
Constellation Energy Group, Inc.	3,700		254,819
FPL Group, Inc.	4,900		266,658
OGE Energy Corp.	7,000		280,000
PNM Resources, Inc.	7,800		242,580
PPL Corp.	6,900		247,296
			1,291,353
Entertainment & Leisure — 3.1%
Comcast Corp.(b)	14,000		592,620
Melco PBL Entertainment Ltd. - ADR(b)	11,200		238,112
MGM MIRAGE(b)	8,800		504,680
Morgans Hotel Group Co.(b)	19,400		328,442
			1,663,854
Finance — 1.5%
AllianceBernstein Holding LP	4,500		361,800
State Street Corp.	6,700		451,848
			813,648
Food & Agriculture — 0.8%
Corn Products International, Inc.	12,000		414,480
Insurance — 2.2%
Hartford Financial Services Group	4,000		373,240
Principal Financial Group, Inc.	3,700		217,190
Prudential Financial, Inc.	2,000		171,720
Reinsurance Group of America, Inc.	8,000		445,600
			1,207,750
Manufacturing — 2.2%
Nike, Inc.	5,100		505,053
Sealed Air Corp.	5,100		331,092
Textron, Inc.	3,700		346,949
			1,183,094
Medical & Medical Services — 0.9%
Amgen, Inc.(b)	3,300		225,423
Biomet, Inc.	6,400		264,128
			489,551
Medical Instruments & Supplies — 2.1%
Alcon, Inc.	2,300		257,071
Johnson & Johnson	5,200		343,304
Stryker Corp.	4,800		264,528
Zimmer Holdings, Inc.(b)	3,500		274,330
			1,139,233
Metal & Mining — 0.6%
Allegheny Technologies, Inc.	3,800		344,584
Oil & Gas — 5.3%
Cameron International Corp.(b)	6,600		350,130
Chevron Corp.	10,500		772,065
ConocoPhillips	6,000		431,700
Diamond Offshore Drilling, Inc.	5,000		399,700
Transocean, Inc.(b)	5,000		404,450
XTO Energy, Inc.	11,000		517,550
			2,875,595
Pharmaceuticals — 2.0%
Alexion Pharmaceuticals, Inc.(b)	6,300		254,457
Allergan, Inc.	1,900		227,506
Merck & Co., Inc.	8,100		353,160
Pfizer, Inc.	8,700		225,330
			1,060,453
Real Estate — 1.1%
Host Hotels & Resorts, Inc. (REIT)	13,000		319,150
Simon Property Group, Inc. (REIT)	3,000		303,870
			623,020
Retail Merchandising — 1.2%
Federated Department Stores, Inc.	7,200		274,536

36

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

GLOBAL OPPORTUNITIES PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS (Continued)
United States (Continued)
Retail Merchandising (Continued)
Limited Brands, Inc.	12,500	$	361,750
			636,286
Security Brokers & Dealers — 1.2%
A.G. Edwards, Inc.	10,000		632,900
Semiconductors & Related Devices — 2.0%
Broadcom Corp. — Class A(b)	12,000		387,720
Lam Research Corp.(b)	6,600		334,092
NVIDIA Corp.(b)	9,500		351,595
			1,073,407
Soaps & Cosmetics — 0.6%
Physicians Formula Holdings, Inc.(b)	18,600		347,634
Telecommunications — 1.5%
Hutchison Telecommunications International Ltd.(b)	12,900		494,328
Optium Corp.(b)	100		2,494
Qwest Communications International, Inc.(b)	36,000		301,320
			798,142
Tobacco — 0.7%
Altria Group, Inc.	4,600		394,772
Waste Management — 0.8%
Waste Management, Inc.	12,000		441,240
Total United States			24,138,423
TOTAL COMMON STOCKS
(Cost $46,147,045)			52,049,789
PREFERRED STOCKS — 0.5%
Germany — 0.5%
Porsche AG PFD (Cost $220,513)	200		254,520
SHORT TERM INVESTMENTS — 1.1%
Galileo Money Market Fund
(Cost $606,577)	606,577		606,577
TOTAL INVESTMENTS IN SECURITIES — 97.5%
(Cost $46,974,135(a))			52,910,886
OTHER ASSETS IN EXCESS OF LIABILITIES — 2.5%			1,374,331
NET ASSETS — 100.0%		$	54,285,217

(a) Cost for federal income tax purposes is $47,116,546. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	6,078,337
Gross unrealized depreciation		(283,997	)
	$	5,794,340

(b) Non-income producing security.

37

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERNATIONAL OPPORTUNITIES PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS — 97.1%
Australia — 1.7%
Metal & Mining — 1.2%
Lihir Gold Ltd.	2,027,700	$	4,993,744
Zinifex Ltd.	764,900		11,344,867
			16,338,611
Security Brokers & Dealers — 0.5%
Babcock & Brown Ltd.	328,000		6,420,864
Total Australia			22,759,475
Austria — 0.9%
Telecommunications — 0.9%
Telekom Austria AG	423,200		11,340,453
Belgium — 0.8%
Metal & Mining — 0.8%
Umicore	59,616		10,151,758
Brazil — 1.8%
Banks — 0.9%
Unibanco SA - ADR(b)	135,900		12,633,264
Telecommunications — 0.9%
Net Servicos de Comunicacao SA - ADR	579,500		6,942,410
Tim Participacoes SA - ADR	124,700		4,317,114
			11,259,524
Total Brazil			23,892,788
Canada — 5.4%
Metal & Mining — 4.9%
Aur Resources, Inc.	355,800		7,401,885
Gammon Lake Resources, Inc.(c)	395,000		6,432,320
HudBay Minerals, Inc.(c)	523,400		9,802,389
Inmet Mining Corp.	173,700		9,296,074
Kinross Gold Corp.	824,300		9,768,748
Sxr Uranium One, Inc.(c)	480,200		6,588,518
Yamana Gold, Inc.	1,257,700		14,441,198
			63,731,132
Retail Merchandising — 0.5%
Shoppers Drug Mart Corp.	166,800		7,164,612
Total Canada			70,895,744
Denmark — 1.1%
Aerospace — 1.1%
MTU Aero Engines Holding AG	302,100		14,140,936
Finland — 3.3%
Banks — 0.4%
OKO Bank PLC - Series A	296,200		4,965,666
Machinery & Heavy Equipment — 0.6%
Metso OYJ	162,300		8,192,663
Manufacturing — 0.8%
Wartsila OYJ - Series B	191,200		10,300,141
Metal & Mining — 1.0%
Outokumpu OYJ - Series B	334,500		13,096,522
Retail Merchandising — 0.5%
Kesko OYJ - Series B	129,700		6,851,817
Total Finland			43,406,809
France — 3.9%
Advertising — 0.4%
Publicis Groupe SA	130,500		5,503,894
Chemicals — 0.5%
Rhodia SA	1,941,000		6,764,227
Computer & Office Equipment — 0.7%
Neopost SA	77,600		9,746,736
Entertainment & Leisure — 1.0%
Accor SA	159,700		12,374,615
Manufacturing — 0.7%
Compagnie Generale des Etablissements Michelin - Class B	90,900		8,699,426
Transportation — 0.6%
Air France	193,700		8,154,040
Total France			51,242,938
Germany — 7.8%
Air Transportation — 0.9%
Deutsche Lufthansa AG	431,900		11,887,156
Chemicals — 0.6%
Wacker Chemie AG	61,100		7,950,945
Computer Software & Services — 0.7%
United Internet AG	523,200		8,653,813
Construction — 1.3%
Bilfinger Berger AG	236,300		17,318,165
Durable Goods — 0.5%
Gerry Weber International AG	289,200		6,738,011
Insurance — 0.8%
Hannover Rueckversicherung AG	220,000		10,187,578
Manufacturing — 0.5%
K+S AG	58,600		6,358,551
Miscellaneous Services — 1.1%
GEA Group AG	633,100		14,265,747
Real Estate — 1.4%
IVG Immobilien AG	425,100		18,259,856
Total Germany			101,619,822
Greece — 1.3%
Banks — 0.4%
Piraeus Bank SA	152,500		4,915,913
Chemicals — 0.4%
Lanxess	99,600		5,585,121
Machinery & Heavy Equipment — 0.5%
Deutz AG	460,700		6,111,854
Total Greece			16,612,888
Hong Kong — 3.6%
Energy & Utilities — 0.2%
Huadian Power International Corp. Ltd.	8,062,500		3,171,805
Entertainment & Leisure — 0.8%
Hongkong & Shanghai Hotels Ltd.	3,000,000		5,067,945

38

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERNATIONAL OPPORTUNITIES PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS (Continued)
Hong Kong (Continued)
Entertainment & Leisure (Continued)
Regal Hotels International Holdings Ltd.	55,653,000	$	4,936,885
Regal Hotels International Holdings Ltd. Rights	556,530		0
			10,004,830
Food & Agriculture — 0.5%
Chaoda Modern Agriculture (Holdings) Ltd.	6,641,200		4,277,594
Fu Ji Food & Catering Services	606,900		1,568,298
			5,845,892
Real Estate — 2.1%
New World Development Co. Ltd.	6,650,100		13,388,602
Shun Tak Holdings Ltd.	4,676,100		7,153,953
Wheelock & Co. Ltd.	3,804,300		7,228,772
			27,771,327
Telecommunications — 0.0%
China Communications Services Corp. Ltd.(c)	112,200		64,046
Total Hong Kong			46,857,900
India — 1.4%
Telecommunications — 1.4%
Bharti Tele-Ventures Ltd.	1,303,557		18,553,451
Italy — 2.6%
Construction — 1.3%
Buzzi Unicem SpA	395,900		11,251,702
Impregilo SPA	1,029,400		5,747,953
			16,999,655
Energy & Utilities — 0.9%
AEM SpA	3,608,400		12,062,931
Manufacturing — 0.4%
Benetton Group SPA	265,000		5,058,280
Total Italy			34,120,866
Japan — 21.0%
Banks — 2.2%
Bank of Kyoto Ltd.	1,222,000		11,398,009
The Chiba Bank Ltd.	1,380,900		11,673,336
The Iyo Bank Ltd.	677,600		6,382,838
			29,454,183
Chemicals — 0.5%
Tokai Carbon Co. Ltd.	982,400		6,983,827
Computer & Office Equipment — 0.4%
Brother Industries Ltd.	419,800		5,682,936
Computer Software & Services — 0.3%
Nippon System Development	115,600		3,671,846
Construction — 1.7%
Daito Trust Construction Co. Ltd.	109,000		5,000,966
Haseko Corp.(c)	2,046,400		7,325,460
Mitsui Home Co. Ltd.	548,000		3,785,186
Tadano Ltd.	480,100		5,656,067
			21,767,679
Electronics — 0.8%
Star Micronics Co. Ltd.	494,500		9,868,808
Energy & Utilities — 0.4%
Kurita Water Industries Ltd.	259,400		5,601,932
Finance — 0.8%
ORIX Corp.	18,600		5,384,395
SBI Holdings, Inc.	15,400		5,189,194
			10,573,589
Insurance — 0.4%
Aioi Insurance Co. Ltd.	675,500		4,768,035
Leasing — 0.5%
Diamond Lease Co. Ltd.	130,000		6,270,325
Machinery & Heavy Equipment — 2.1%
Aichi Corp.	751,100		7,302,405
Komatsu Ltd.	236,500		4,799,357
Miura Co. Ltd.	325,800		8,267,854
Nabtesco Corp.	609,500		7,636,356
			28,005,972
Manufacturing — 2.6%
Daihatsu Motor Co. Ltd.	506,700		5,113,623
JTEKT Corp.	446,100		9,465,169
Taiyo Nippon Sanso Corp.	1,310,500		11,805,017
Uni-Charm Corp.	120,000		7,129,112
			33,512,921
Medical Instruments & Supplies — 0.9%
Nihon Kohden Corp.	538,900		12,317,197
Metal & Mining — 1.6%
Asahi Pretec Corp.	204,300		4,085,828
Maruichi Steel Tube Ltd.	276,200		7,635,797
Yamato Kogyo Co. Ltd.	356,100		9,006,857
			20,728,482
Motor Vehicles — 1.0%
Futaba Industrial Co. Ltd.	257,100		6,276,001
Isuzu Motors Ltd.	1,439,400		6,761,267
			13,037,268
Real Estate — 2.4%
Goldcrest Co. Ltd.	100,700		5,195,563
Japan General Estate Co. Ltd.	433,700		12,463,796
Joint Corp.	354,200		13,631,662
			31,291,021
Retail Merchandising — 1.9%
Shimachu Co. Ltd.	205,100		5,945,927
Takashimaya Co. Ltd.	400,100		5,654,957
Tsuruha Holdings, Inc.	127,200		4,841,948
Xebio Co. Ltd.	251,400		7,900,811
			24,343,643
Transportation — 0.5%
Keihin Electric Express Railway Co. Ltd.	908,200		6,257,922
Total Japan			274,137,586

39

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERNATIONAL OPPORTUNITIES PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS (Continued)
Kazakhstan — 0.1%
Banks — 0.1%
Kazkommertsbank(c)(d)	38,100	$	880,110
Luxembourg — 0.4%
Real Estate — 0.4%
Gagfah SA(c)	165,300		5,243,428
Malaysia — 1.1%
Banks — 0.4%
Bumiputra—Commerce Holdings Berhad	2,518,200		5,531,760
Entertainment & Leisure — 0.7%
Genting Berhad	897,700		8,396,854
Total Malaysia			13,928,614
Morocco — 1.5%
Construction — 0.4%
IJM Corp. Berhad	2,680,700		5,584,792
Food & Agriculture — 0.7%
Kuala Lumur Kepong Berhad	2,332,700		8,926,148
Real Estate — 0.4%
IOI Corp. Berhad	1,057,400		5,514,784
Total Morocco			20,025,724
Netherlands — 2.0%
Oil & Gas — 1.2%
SBM Offshore NV	470,800		16,189,479
Personal Services — 0.8%
USG People NV	238,800		10,437,157
Total Netherlands			26,626,636
Norway — 4.0%
Banks — 0.5%
Sparebanken Midt—Norge	223,300		2,936,650
Sparebanken Nord—Norge	85,520		2,050,494
Sparebanken Rogaland	72,600		2,200,635
			7,187,779
Manufacturing — 0.9%
Orkla ASA	201,500		11,407,733
Oil & Gas — 2.6%
Fred Olsen Energy ASA	255,700		11,974,660
Petroleum Geo—Services	530,400		12,462,086
Prosafe ASA	686,500		9,743,914
			34,180,660
Total Norway			52,776,172
Philippines — 0.5%
Energy & Utilities — 0.1%
Pnoc Energy Development Corp.(c)	9,806,900		969,693
Telecommunications — 0.4%
Philippine Long Distance Telephone Co. — ADR(b)	109,800		5,614,074
Total Philippines			6,583,767
Poland — 0.3%
Telecommunications — 0.3%
Multimedia Polska SA(c)	752,600		3,180,657
Singapore — 1.9%
Real Estate — 1.5%
Capitacommercial Trust	4,305,300		7,354,449
CapitaLand Ltd.	3,075,000		12,430,317
			19,784,766
Retail Merchandising — 0.4%
Hongguo International Holdings Ltd.(c)	7,465,900		4,502,662
Total Singapore			24,287,428
South Africa — 0.6%
Retail Merchandising — 0.6%
Foschini Ltd.	420,000		3,437,493
Truworths International Ltd.	950,000		4,340,071
			7,777,564
South Korea — 3.8%
Computer Software & Services — 0.5%
NHN Corp.(c)	47,900		5,876,763
Construction — 1.1%
Hanjin Heavy Industries Co. Ltd.(c)	448,800		14,622,194
Finance — 0.7%
Daewoo Securities Co. Ltd.	460,500		9,284,274
Manufacturing — 0.4%
Cheil Industries, Inc.(c)	130,600		5,511,882
Security Brokers & Dealers — 1.1%
Korea Investment Holdings Co. Ltd.	277,000		13,790,430
Total South Korea			49,085,543
Sweden — 2.9%
Construction — 0.8%
Skanska AB	526,100		10,374,528
Entertainment & Leisure — 0.2%
Rezidor Hotel Group AB(c)	277,600		2,392,422
Manufacturing — 0.7%
SSAB Svenskt Stal AB	387,720		9,203,179
Retail Merchandising — 0.5%
KappAhl Holding AB	667,700		6,997,929
Soaps & Cosmetics — 0.7%
Oriflame Cosmetics SA	228,400		9,408,307
Total Sweden			38,376,365
Switzerland — 1.3%
Business Services — 0.8%
SGS Societe Generale de Surveillance Holding SA	9,800		10,921,953
Food & Agriculture — 0.5%
Barry Callebaut AG	12,842		6,481,601
Total Switzerland			17,403,554
Taiwan — 2.6%
Chemicals — 0.9%
Taiwan Fertilizer Co. Ltd.	6,306,000		12,056,584
Computer Software & Services — 0.4%
MediaTek, Inc.	501,000		5,181,433

40

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERNATIONAL OPPORTUNITIES PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS (Continued)
Taiwan (Continued)
Electronics — 0.4%
Cheng Uei Precision Industry Co. Ltd.	1,535,242	$	5,488,896
Security Brokers & Dealers — 0.4%
Yuanta Core Pacific Securities Co.	5,702,000		4,733,439
Semiconductors & Related Devices — 0.5%
Powerchip Semiconductor Corp.	10,044,000		6,781,280
Total Taiwan			34,241,632
Thailand — 0.4%
Banks — 0.4%
Krung Thai Bank Public Co. Ltd.	6,586,300		2,210,916
Krung Thai Bank Public Co. Ltd. - Foreign(d)	1,626,700		546,057
Siam Commercial Bank Public Co. Ltd.(d)	1,839,200		2,935,364
			5,692,337
United Kingdom — 16.6%
Aerospace — 0.8%
Cobham PLC	2,137,800		8,109,937
Meggitt PLC	351,226		2,131,852
			10,241,789
Business Services — 1.9%
Aegis Group PLC	4,305,900		11,803,225
Intertek Group PLC	789,600		12,886,098
			24,689,323
Energy & Utilities — 1.5%
International Power PLC	1,913,600		14,303,388
Severn Trent PLC	196,600		5,658,607
			19,961,995
Entertainment & Leisure — 1.3%
888 Holdings PLC	1,021,849		2,651,010
IG Group Holdings PLC	2,463,700		14,013,372
			16,664,382
Finance — 1.6%
Amvescap PLC	695,900		8,120,856
Close Brothers Group PLC	435,100		8,659,746
ICAP PLC	476,600		4,465,238
			21,245,840
Food & Agriculture — 1.3%
Premier Foods PLC	1,419,900		8,389,069
Tate & Lyle PLC	589,748		8,873,992
			17,263,061
Machinery & Heavy Equipment — 0.6%
The Weir Group PLC	811,900		8,488,921
Manufacturing — 2.3%
Burberry Group PLC	476,400		6,021,112
Charter PLC	481,200		8,526,737
IMI PLC	683,700		6,787,068
Rexam PLC	785,700		8,084,221
			29,419,138
Measuring & Controlling Devices — 0.6%
Rotork PLC	447,912		7,322,980
Oil & Gas — 0.8%
Tullow Oil PLC	1,330,500		10,368,278
Real Estate — 0.7%
InterContinental Hotels Group PLC	354,831		8,767,779
Restaurants — 0.7%
Whitbread PLC	292,216		9,583,574
Transportation — 1.0%
Arriva PLC	895,400		13,394,273
Waste Management — 1.5%
Biffa PLC	1,044,200		6,276,691
Kelda Group PLC	717,900		13,016,183
			19,292,874
Total United Kingdom			216,704,207
United States — 0.5%
Banks — 0.3%
Banco Santander Chile SA - ADR	75,200		3,621,632
Entertainment & Leisure — 0.2%
Melco PBL Entertainment Ltd. - ADR(c)	124,700		2,651,122
Total United States			6,272,754
TOTAL COMMON STOCKS
(Cost $955,964,729)			1,268,819,906
SHORT TERM INVESTMENTS — 0.3%
Galileo Money Market Fund (Cost $4,659,195)	4,659,195		4,659,195
TOTAL MARKET VALUE OF SECURITIES BEFORE SECURITIES LENDING COLLATERAL AND AFFILIATED INVESTMENTS — 97.4%
(Cost $960,623,924)			1,273,479,101
AFFILIATED INVESTMENTS - SHORT TERM — 0.6%
Institutional Money Market Trust(e)
(Cost $7,382,000)	7,382,000		7,382,000

41

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERNATIONAL OPPORTUNITIES PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	VALUE
TOTAL INVESTMENTS IN SECURITIES — 98.0%
(Cost $968,005,924(a))	$	1,280,861,101
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL — (0.6)%		(7,382,000	)
OTHER ASSETS IN EXCESS OF LIABILITIES — 2.6%		33,832,999
NET ASSETS — 100.0%	$	1,307,312,100

(a) Cost for federal income tax purposes is $971,606,103. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	320,305,560
Gross unrealized depreciation		(11,050,562	)
	$	309,254,998

(b) Total or partial security on loan.

(c) Non-income producing security.

(d) Security valued at fair value as determined in good faith by or under the direction of the Board of Trustees. As of December 31, 2006, these securities had a total market value of $6,572,447, which represents 0.5% of net assets.

(e) Security purchased with the cash proceeds from securities loaned.

42

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS — 67.2%
Australia — 0.5%
Insurance — 0.1%
Insurance Australia Group Ltd.	168,538	$	844,772
Manufacturing — 0.1%
United Group Ltd.	62,000		682,706
Metal & Mining — 0.1%
Lihir Gold Ltd.	48,600		119,690
Zinifex Ltd.	18,400		272,906
			392,596
Retail Merchandising — 0.2%
Woolworths Ltd.	89,626		1,690,830
Security Brokers & Dealers — 0.0%
Babcock & Brown Ltd.	7,800		152,691
Total Australia			3,763,595
Austria — 0.0%
Telecommunications — 0.0%
Telekom Austria AG	10,100		270,649
Belgium — 0.3%
Beverages & Bottling — 0.3%
Inbev NV	37,813		2,492,748
Metal & Mining — 0.0%
Umicore	1,400		238,400
Total Belgium			2,731,148
Brazil — 0.1%
Banks — 0.1%
Unibanco SA - ADR	3,200		297,472
Telecommunications — 0.0%
Net Servicos de Comunicacao SA - ADR	13,500		161,730
Tim Participacoes SA - ADR	3,000		103,860
			265,590
Total Brazil			563,062
Canada — 1.4%
Energy & Utilities — 0.0%
Zenas Energy Corp. (acquired 05/18/04 through 03/16/06, cost $7,164)(b)(c)	1,500		4,014
Metal & Mining — 0.5%
Alexco Resource Corp.(d)	6,756		28,446
Aur Resources, Inc.	8,300		172,669
Aurora Energy Resources, Inc.(d)	5,300		61,583
Bema Gold Corp.(d)	50,000		262,500
Energy Metals Corp.(d)	9,800		84,878
European Goldfields Ltd.(d)	12,100		50,220
Fording Canadian Coal Trust	7		145
Frontier Pacific Mining Corp.(d)	79,200		51,616
Gammon Lake Resources, Inc.(d)	9,400		153,073
Gateway Gold Corp.(d)	100,000		72,032
Gold Reserve, Inc.(d)	26,280		124,042
HudBay Minerals, Inc.(d)	12,100		226,612
Inmet Mining Corp.	4,000		214,072
International Uranium Corp.(d)	4,700		47,558
Kinross Gold Corp.	19,700		233,464
Minefinders Corp. Ltd.(d)	40,000		356,000
NovaGold Resources, Inc.(d)(e)	16,792		288,151
Southwestern Resources Corp.(d)	47,300		322,053
Stratagold Corp.(d)	218,500		243,579
Sunridge Gold Corp.(d)	128,837		364,586
Sxr Uranium One, Inc.(d)	11,500		157,784
Triex Minerals Corp. (acquired 12/23/05, cost $14,206)(c)(f)	6,600		27,449
West Timmins Mining, Inc.(d)	31,077		15,190
Yamana Gold, Inc.	30,800		404,363
			3,962,065
Motor Vehicles — 0.0%
Westport Innovations, Inc. (acquired 12/17/03 through 9/15/04, cost $75,001)(d)(f)(g)	70,500		73,151
Oil & Gas — 0.7%
Accrete Energy, Inc.(d)	4,960		25,945
Alberta Clipper Energy, Inc.(d)	5,026		25,989
Birchcliff Energy Ltd.(d)	17,100		59,974
C1 Energy Ltd.(d)	85,733		49,992
Canadian Superior Energy, Inc.(d)	22,000		44,000
Canext Energy Ltd.(d)	3,900		5,418
Capitol Energy Resources Ltd.(d)	14,595		53,441
Cinch Energy Corp.(d)	40,320		36,996
Compton Petroleum Corp.(d)	68,499		625,575
Crescent Point Energy Trust	782		11,807
Crew Energy, Inc. (acquired 5/12/04, cost $36,232)(d)(f)	9,400		99,147
Daylight Resources Trust	13,411		117,418
Delphi Energy Corp.(d)	24,700		52,528
Ember Resources, Inc.(d)	12,136		26,747
Endev Energy, Inc.(d)	231,700		246,373
Fairquest Energy Ltd.(d)	3,800		10,427
First Calgary Petroleums Ltd.(d)	14,554		86,988
Galleon Energy, Inc. - Class A (acquired 1/31/05 through 3/13/06, cost $391,544)(c)(d)(f)	28,617		443,678
Gastar Exploration Ltd.(d)(e)	9,526		20,481
Highpine Oil & Gas Ltd.(d)	8,193		110,303
HSE Integrated Ltd.(d)	561		842
Innova Exploration Ltd. (acquired 10/31/05, cost $22,297)(c)(f)	3,200		17,809
Innova Exploration Ltd. (acquired 2/15/06 through 2/17/06, cost $8,235)(d)	1,660		9,238
Iteration Energy Ltd.(d)	4,021		15,172
Leader Energy Services Ltd.(d)	15,957		22,578
Midnight Oil Exploration Ltd. (acquired 01/31/05, cost $264,140)(d)	81,200		165,025
Mission Oil & Gas, Inc. (acquired 6/13/04 through 6/14/04, cost $12,327)(d)	1,140		12,366
Mission Oil & Gas, Inc. (acquired 6/19/06, cost $6,465)(b)(c)	600		6,509
Niko Resources Ltd. (acquired 6/20/03 through 11/10/03, cost $40,606)(f)	2,000		142,949
Oilexco, Inc.(d)	72,025		447,782
Open Range Energy Corp.(d)	1,976		5,591
Pacific Rodera Energy, Inc.(d)	37,300		20,791
Pengrowth Energy Trust	1,505		25,737
Petrolifera Petroleum Ltd.(d)	4,150		62,811
ProspEx Resources Ltd.(d)	43,140		164,251

43

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS (Continued)
Canada (Continued)
Oil & Gas (Continued)
Real Resources, Inc.(d)	6,185	$	88,573
Suncor Energy, Inc.	18,000		1,416,816
Tag Oil Ltd. (acquired 9/22/05, cost $4,409)(c)(f)	4,000		1,664
Technicoil Corp. (acquired 6/15/04 through 9/28/06, cost $45,593)(b)(d)	46,400		41,778
Thunder Energy Trust	27,094		131,738
Trafalgar Energy Ltd.(d)	841		2,957
True Energy Trust	11,382		73,108
Tusk Energy Corp. (acquired 10/05/05 through 04/10/06, cost $28,456)(d)	14,660		39,600
Tusk Energy Corp. (acquired 3/10/05, cost $39,439)(c)(f)	10,557		28,517
Tusk Energy Corp. (acquired 6/2/06, cost $37,327)(c)(f)	10,000		27,012
Vault Energy Trust	5,850		27,591
Vero Energy, Inc.(d)	4,447		23,109
West Energy Ltd.(d)	143		665
Western Oil Sands, Inc. - Class A(d)	1,800		50,489
Zenas Energy Corp. (acquired 08/26/05 through 07/05/06, cost $82,134)(d)	20,522		54,906
			5,281,201
Retail Merchandising — 0.0%
Shoppers Drug Mart Corp.	3,900		167,518
Transportation — 0.2%
Canadian Pacific Railway Ltd.	22,514		1,185,405
Railpower Technologies Corp.(d)	17,600		22,789
			1,208,194
Total Canada			10,696,143
Cayman Islands — 0.0%
Energy & Utilities — 0.0%
Suntech Power Holdings Co., Ltd. — ADR(d)(e)	1,200		40,812
China — 0.0%
Metal & Mining — 0.0%
Alexco Resource Corp.(d)	3,266		13,751
Personal Services — 0.0%
New Oriental Education & Technology Group, Inc. — ADR(d)	350		11,739
Total China			25,490
Denmark — 0.0%
Aerospace — 0.0%
MTU Aero Engines Holding AG	7,200		337,023
Finland — 0.3%
Banks — 0.0%
OKO Bank PLC — Series A	7,100		119,028
Machinery & Heavy Equipment — 0.0%
Metso OYJ	3,800		191,818
Manufacturing — 0.0%
Wartsila OYJ—Series B	4,500		242,420
Metal & Mining — 0.1%
Outokumpu OYJ — Series B	7,800		305,390
Paper & Forest Products — 0.2%
Upm-Kymmene OYJ	60,781		1,534,067
Retail Merchandising — 0.0%
Kesko OYJ—Series B	3,000		158,485
Total Finland			2,551,208
France — 1.9%
Advertising — 0.0%
Publicis Groupe SA	3,000		126,526
Banks — 0.3%
Credit Agricole SA	46,238		1,944,614
Beverages & Bottling — 0.2%
LVMH Moet Hennessy Louis Vuitton SA	15,254		1,609,870
Chemicals — 0.0%
Rhodia SA	46,500		162,049
Computer & Office Equipment — 0.0%
Neopost SA	1,800		226,084
Electronics — 0.2%
Schneider Electric SA	11,125		1,235,051
Entertainment & Leisure — 0.2%
Accor SA	23,122		1,791,646
Food & Agriculture — 0.3%
Carrefour SA	38,690		2,346,272
Machinery & Heavy Equipment — 0.3%
Alstom	13,810		1,872,203
Manufacturing — 0.0%
Compagnie Generale des Etablissements Michelin - Class B	2,200		210,547
Medical Instruments & Supplies — 0.2%
Essilor International SA	16,230		1,745,012
Oil & Gas — 0.2%
Technip SA	15,469		1,061,828
Transportation — 0.0%
Air France	4,500		189,433
Total France			14,521,135
Germany — 1.2%
Air Transportation — 0.0%
Deutsche Lufthansa AG	10,000		275,229
Chemicals — 0.3%
Bayer AG	33,730		1,810,391
Wacker Chemie AG	1,400		182,182
			1,992,573
Computer Software & Services — 0.0%
United Internet AG	12,500		206,752
Construction — 0.1%
Bilfinger Berger AG	5,600		410,418
Durable Goods — 0.0%
Gerry Weber International AG	6,900		160,761

44

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS (Continued)
Germany (Continued)
Finance — 0.2%
Hypo Real Estate Holding AG	24,430	$	1,539,553
Insurance — 0.5%
Allianz AG	10,161		2,075,792
Hannover Rueckversicherung AG	5,200		240,797
Muenchener Rueckversicherungs - Gesellschaft AG	10,300		1,773,251
			4,089,840
Manufacturing — 0.0%
K+S AG	1,400		151,911
Miscellaneous Services — 0.0%
GEA Group AG	15,100		340,251
Real Estate — 0.1%
IVG Immobilien AG	9,800		420,952
Total Germany			9,588,240
Greece — 0.3%
Banks — 0.0%
Piraeus Bank SA	3,600		116,048
Chemicals — 0.0%
Lanxess	2,400		134,581
Machinery & Heavy Equipment — 0.0%
Deutz AG	11,000		145,931
Telecommunications — 0.3%
Hellenic Telecommunications Organization SA	62,603		1,880,858
Total Greece			2,277,418
Hong Kong — 0.3%
Energy & Utilities — 0.0%
Huadian Power International Corp. Ltd.	193,200		76,005
Entertainment & Leisure — 0.0%
Hongkong & Shanghai Hotels Ltd.	71,900		121,462
Regal Hotels International Holdings Ltd.	1,334,700		118,399
Regal Hotels International Holdings Ltd. Rights	13,347		0
			239,861
Food & Agriculture — 0.0%
Chaoda Modern Agriculture (Holdings) Ltd.	154,100		99,256
Fu Ji Food & Catering Services	14,300		38,055
			137,311
Real Estate — 0.1%
New World Development Co. Ltd.	159,400		320,919
Shun Tak Holdings Ltd.	112,000		171,349
Wheelock & Co. Ltd.	91,100		173,104
			665,372
Retail Merchandising — 0.2%
Esprit Holdings Ltd.	93,500		1,043,991
Telecommunications — 0.0%
China Communications Services Corp. Ltd.(d)	2,600		1,484
Total Hong Kong			2,164,024
India — 0.0%
Business Services — 0.0%
WNS Holdings Ltd. - ADR(d)	1,650		51,315
Ireland — 0.1%
Computer Software & Services — 0.1%
SkillSoft PLC - ADR(d)	108,500		673,785
Italy — 0.4%
Construction — 0.1%
Buzzi Unicem SpA	9,400		267,154
Impregilo SPA	24,600		137,361
			404,515
Energy & Utilities — 0.0%
AEM SpA	86,500		289,171
Insurance — 0.3%
Assicurazioni Generali SpA	44,720		1,964,008
Manufacturing — 0.0%
Benetton Group SPA	6,300		120,253
Total Italy			2,777,947
Japan — 3.5%
Banks — 0.6%
Bank of Kyoto Ltd.	29,300		273,291
The Chiba Bank Ltd.	33,100		279,809
The Iyo Bank Ltd.	16,200		152,600
Mizuho Financial Group, Inc.	291		2,078,484
The Sumitomo Industries Ltd.	169,000		1,772,295
			4,556,479
Chemicals — 0.0%
Tokai Carbon Co. Ltd.	23,500		167,060
Computer & Office Equipment — 0.0%
Brother Industries Ltd.	10,000		135,372
Computer Software & Services — 0.0%
Nippon System Development	2,700		85,761
Conglomerates — 0.1%
Mitsui & Co. Ltd.	69,000		1,032,057
Construction — 0.4%
Daito Trust Construction Co. Ltd.	2,700		123,877
Daiwa House Industry Co. Ltd.	58,000		1,008,865
Haseko Corp.(d)	49,000		175,404
Mitsui Home Co. Ltd.	13,100		90,485
Obayashi Corp.	192,000		1,245,528
Tadano Ltd.	11,400		134,304
			2,778,463
Electronics — 0.2%
Denso Corp.	27,500		1,090,711
Sony Corp.	10,100		432,839
Star Micronics Co. Ltd.	11,800		235,494
			1,759,044
Energy & Utilities — 0.0%
Kurita Water Industries Ltd.	6,200		133,893
Finance — 0.0%
ORIX Corp.	400		115,794
SBI Holdings, Inc.	400		134,784
			250,578
Insurance — 0.0%
Aioi Insurance Co. Ltd.	16,200		114,348

45

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SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS (Continued)
Japan (Continued)
Leasing — 0.0%
Diamond Lease Co. Ltd.	3,200	$	154,346
Machinery & Heavy Equipment — 0.3%
Aichi Corp.	18,000		175,001
Komatsu Ltd.	67,300		1,365,737
Miura Co. Ltd.	7,800		197,941
Nabtesco Corp.	14,600		182,922
			1,921,601
Manufacturing — 0.1%
Daihatsu Motor Co. Ltd.	12,700		128,169
JTEKT Corp.	10,700		227,028
Taiyo Nippon Sanso Corp.	31,400		282,852
Uni-Charm Corp.	2,900		172,287
			810,336
Medical Instruments & Supplies — 0.0%
Nihon Kohden Corp.	12,900		294,845
Metal & Mining — 0.3%
Asahi Pretec Corp.	4,850		96,996
Marubeni Corp.	286,000		1,451,569
Maruichi Steel Tube Ltd.	6,700		185,228
Yamato Kogyo Co. Ltd.	8,500		214,991
			1,948,784
Motor Vehicles — 0.3%
Futaba Industrial Co. Ltd.	6,100		148,906
Isuzu Motors Ltd.	34,500		162,056
Nissan Motor Co., Ltd.	129,000		1,553,355
			1,864,317
Real Estate — 0.5%
Goldcrest Co. Ltd.	2,300		118,667
Japan General Estate Co. Ltd.	10,100		290,257
Joint Corp.	8,400		323,281
Tokyo Tatemono Co. Ltd.	121,000		1,348,229
Urban Corp.	95,200		1,444,739
			3,525,173
Retail Merchandising — 0.3%
Aeon Co. Ltd.	73,200		1,583,883
Shimachu Co. Ltd.	4,900		142,053
Takashimaya Co. Ltd.	9,400		132,858
Tsuruha Holdings, Inc.	3,000		114,197
Xebio Co. Ltd.	9,550		300,130
			2,273,121
Textiles — 0.1%
Mitsubishi Rayon Co. Ltd.	160,000		1,075,585
Transportation — 0.3%
Canon, Inc.	36,500		2,054,956
Keihin Electric Express Railway Co. Ltd.	21,700		149,523
			2,204,479
Total Japan			27,085,642
Kazakhstan — 0.0%
Banks — 0.0%
Kazkommertsbank(c)(d)	900		20,790
Luxembourg — 0.2%
Oil & Gas — 0.0%
Acergy SA - ADR(d)	18,500		356,310
Real Estate — 0.0%
Gagfah SA(d)	3,800		120,539
Telecommunications — 0.2%
SES Global	71,878		1,272,140
Total Luxembourg			1,748,989
Malaysia — 0.0%
Banks — 0.0%
Bumiputra-Commerce Holdings Berhad	61,200		134,439
Entertainment & Leisure — 0.0%
Genting Berhad	20,900		195,493
Total Malaysia			329,932
Morocco — 0.1%
Construction — 0.0%
IJM Corp. Berhad	64,500		134,375
Food & Agriculture — 0.1%
Kuala Lumur Kepong Berhad	55,900		213,903
Real Estate — 0.0%
IOI Corp. Berhad	25,300		131,950
Total Morocco			480,228
Netherlands — 0.5%
Oil & Gas — 0.1%
SBM Offshore NV	11,200		385,136
Personal Services — 0.0%
USG People NV	5,800		253,499
Telecommunications — 0.2%
Koninklijke KPN NV	122,051		1,735,185
Transportation — 0.2%
TNT NV	32,246		1,386,806
Total Netherlands			3,760,626
Norway — 0.4%
Banks — 0.0%
Sparebanken Midt-Norge	5,000		65,756
Sparebanken Nord-Norge	1,900		45,556
Sparebanken Rogaland	1,700		51,530
			162,842
Manufacturing — 0.0%
Orkla ASA	4,800		271,748
Oil & Gas — 0.3%
Fred Olsen Energy ASA	6,100		285,668
Petroleum Geo-Services	12,600		296,045
Prosafe ASA	16,000		227,098
Statoil ASA	67,989		1,801,896
			2,610,707
Transportation — 0.1%
Stolt-Nielsen SA (acquired 1/31/05, cost $177,441)(f)	13,000		398,223
Total Norway			3,443,520

46

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS (Continued)
Philippines — 0.0%
Energy & Utilities — 0.0%
Pnoc Energy Development Corp.(d)	235,200	$	23,256
Telecommunications — 0.0%
Philippine Long Distance Telephone Co. — ADR	2,600		132,938
Total Philippines			156,194
Singapore — 0.5%
Conglomerates — 0.1%
Keppel Corp. Ltd.	94,000		1,078,664
Finance — 0.3%
DBS Group Holdings Ltd.	142,000		2,092,388
Real Estate — 0.1%
Capitacommercial Trust	103,200		176,289
CapitaLand Ltd.	71,400		288,626
			464,915
Retail Merchandising — 0.0%
Hongguo International Holdings Ltd.(d)	177,000		106,748
Total Singapore			3,742,715
South Africa — 0.0%
Retail Merchandising — 0.0%
Foschini Ltd.	9,200		75,298
Truworths International Ltd.	20,600		94,111
			169,409
South Korea — 0.2%
Computer Software & Services — 0.0%
NHN Corp.(d)	1,300		159,495
Construction — 0.1%
Hanjin Heavy Industries Co. Ltd.(d)	10,700		348,613
Finance — 0.0%
Daewoo Securities Co. Ltd.	11,000		221,774
Manufacturing — 0.0%
Cheil Industries, Inc.(d)	3,100		130,833
Security Brokers & Dealers — 0.1%
Korea Investment Holdings Co. Ltd.	6,600		328,581
Total South Korea			1,189,296
Spain — 0.3%
Banks — 0.3%
Banco Bilbao Vizcaya Argentaria SA	102,002		2,455,965
Sweden — 0.3%
Banks — 0.2%
Nordea Bank AB	110,555		1,703,716
Construction — 0.1%
Skanska AB	12,600		248,468
Entertainment & Leisure — 0.0%
Rezidor Hotel Group AB(d)	6,600		56,880
Manufacturing — 0.0%
SSAB Svenskt Stal AB	9,200		218,377
Retail Merchandising — 0.0%
KappAhl Holding AB	16,000		167,691
Soaps & Cosmetics — 0.0%
Oriflame Cosmetics SA	5,400		222,438
Total Sweden			2,617,570
Switzerland — 1.1%
Business Services — 0.0%
SGS Societe Generale de Surveillance Holding SA	230		256,332
Food & Agriculture — 0.3%
Barry Callebaut AG	300		151,416
Nestle SA	6,650		2,363,110
			2,514,526
Pharmaceuticals — 0.8%
Novartis AG	46,928		2,705,533
Novartis AG — ADR	18,580		1,067,235
Roche Holding AG	12,580		2,255,831
			6,028,599
Total Switzerland			8,799,457
Taiwan — 0.1%
Chemicals — 0.1%
Taiwan Fertilizer Co. Ltd.	146,100		279,332
Computer Software & Services — 0.0%
MediaTek, Inc.	11,000		113,764
Electronics — 0.0%
Cheng Uei Precision Industry Co. Ltd.	31,692		113,306
Security Brokers & Dealers — 0.0%
Yuanta Core Pacific Securities Co.	132,000		109,578
Semiconductors & Related Devices — 0.0%
Powerchip Semiconductor Corp.	234,000		157,987
Total Taiwan			773,967
Thailand — 0.0%
Banks — 0.0%
Krung Thai Bank Public Co. Ltd.	174,300		58,012
Krung Thai Bank Public Co. Ltd. - Foreign(c)	30,000		9,967
Siam Commercial Bank Public Co. Ltd.(c)	44,100		72,126
			140,105
United Kingdom — 3.2%
Aerospace — 0.3%
BAE Systems PLC	208,653		1,739,354
Cobham PLC	51,200		194,232
Meggitt PLC	8,462		51,362
			1,984,948
Business Services — 0.2%
Aegis Group PLC	103,200		282,889
Amvescap PLC — ADR	36,920		910,078
Intertek Group PLC	18,900		308,444
			1,501,411
Energy & Utilities — 0.2%
International Power PLC	45,800		342,336
ITM Power PLC(d)	12,000		29,370
Scottish Power	66,431		972,930

47

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SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS (Continued)
United Kingdom (Continued)
Energy & Utilities (Continued)
Severn Trent PLC	4,633	$	133,358
			1,477,994
Entertainment & Leisure — 0.1%
888 Holdings PLC	24,410		63,328
IG Group Holdings PLC	59,000		335,588
			398,916
Finance — 0.1%
Amvescap PLC	16,600		193,715
Archipelago Holdings, Inc. (acquired 5/13/05, cost $51,017)(c)(f)	78,900		52,138
Close Brothers Group PLC	10,400		206,990
ICAP PLC	11,400		106,806
			559,649
Food & Agriculture — 0.1%
Premier Foods PLC	34,000		200,879
Tate & Lyle PLC	13,982		210,389
			411,268
Insurance — 0.3%
Prudential PLC	163,448		2,238,597
Machinery & Heavy Equipment — 0.0%
The Weir Group PLC	19,400		202,839
Manufacturing — 0.1%
Burberry Group PLC	11,400		144,082
Charter PLC	11,500		203,777
IMI PLC	16,300		161,810
Rexam PLC	18,200		187,263
			696,932
Measuring & Controlling Devices — 0.0%
Rotork PLC	10,400		170,031
Metal & Mining — 0.2%
Anglo American PLC	41,590		2,028,483
Oil & Gas — 0.5%
BG Group PLC	127,623		1,731,693
BP PLC	197,831		2,198,209
Tullow Oil PLC	31,900		248,589
			4,178,491
Pharmaceuticals — 0.4%
GlaxoSmithKline PLC	113,710		2,992,310
Shire PLC - ADR	8,600		531,136
			3,523,446
Real Estate — 0.0%
InterContinental Hotels Group PLC	8,450		208,797
Restaurants — 0.0%
Whitbread PLC	6,930		227,278
Retail Merchandising — 0.3%
Alliance Boots Group PLC	128,973		2,114,918
Telecommunications — 0.3%
Vodafone Group PLC	739,871		2,049,846
Transportation — 0.0%
Arriva PLC	21,400		320,122
Waste Management — 0.1%
Biffa PLC	25,000		150,275
Kelda Group PLC	17,200		311,852
			462,127
Total United Kingdom			24,756,093
United States — 50.0%
Aerospace — 0.8%
AAR Corp.(d)(e)	6,700		195,573
Armor Holdings, Inc.(d)	2,800		153,580
BE Aerospace, Inc.(d)(e)	12,050		309,444
The Boeing Co.	7,500		666,300
Goodrich Corp.(e)	12,000		546,600
LMI Aerospace, Inc.(d)	8,600		133,128
Lockheed Martin Corp.	7,850		722,750
Orbital Sciences Corp.(d)	2,950		54,398
Raytheon Co.(e)	27,850		1,470,480
Spirit Aerosystems Holdings, Inc. - Class A(d)	11,420		382,227
United Technologies Corp.	24,050		1,503,606
			6,138,086
Air Transportation — 0.1%
Alaska Air Group, Inc.(d)(e)	1,000		39,500
Continental Airlines, Inc. - Class B(d)(e)	10,750		443,437
			482,937
Banks — 5.0%
Banco Santander Chile SA - ADR	1,800		86,688
Bank of America Corp.	168,250		8,982,867
Bank of Hawaii Corp.	975		52,601
Boston Private Financial Holdings, Inc.	4,600		129,766
Cathay General Bancorp(e)	4,200		144,942
Central Pacific Financial Corp.	3,063		118,722
Citigroup, Inc.	153,000		8,522,100
City National Corp.(e)	7,900		562,480
Columbia Banking System, Inc.	3,400		119,408
Compass Bancshares, Inc.(e)	11,680		696,712
Corus Bankshares, Inc.(e)	1,400		32,298
Cullen/Frost Bankers, Inc.	9,910		553,176
First Midwest Bancorp, Inc.	12,160		470,349
First State Bancorporation	2,300		56,925
FirstFed Financial Corp.(d)	850		56,924
Greenhill & Co., Inc.(e)	4,650		343,170
Hancock Holding Co.	900		47,556
Hudson City Bancorp, Inc.	71,425		991,379
Huntington Bancshares, Inc.	2,025		48,094
J.P. Morgan Chase & Co.	132,250		6,387,675
KBW, Inc.(d)	2,200		64,658
Key Corp.(e)	33,400		1,270,202
Pacific Capital Bancorp	1,700		57,086
Signature Bank(d)	4,500		139,410
U.S. Bancorp(e)	71,500		2,587,585
UMB Financial Corp.	3,300		120,483
Umpqua Holdings Corp.	5,650		166,280
Wachovia Corp.(e)	49,300		2,807,635
Wells Fargo & Co.	45,600		1,621,536
Wintrust Financial Corp.(e)	15,190		729,424
WSFS Financial Corp.	1,250		83,662

48

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS (Continued)
United States (Continued)
Banks (Continued)
Zions Bancorporation	10,320	$	850,781
			38,902,574
Beverages & Bottling — 0.5%
The Coca-Cola Co.	20,900		1,008,425
Molson Coors Brewing Co. - Class B	5,800		443,352
Pepsi Bottling Group, Inc.	16,100		497,651
PepsiCo, Inc.	27,800		1,738,890
			3,688,318
Broadcasting — 0.6%
Alliance Atlantis Communications, Inc.(d)	3,300		143,220
Belo Corp.	41,372		760,417
CBS Corp. - Class B(e)	19,500		608,010
CKX, Inc.(d)	52,250		612,893
DIRECTV Group, Inc.(d)	86,000		2,144,840
Lin TV Corp.(d)	29,635		294,868
Outdoor Channel Holdings, Inc.(d)	10,550		135,357
			4,699,605
Business Services — 0.8%
Advisory Board Co.(d)	3,100		165,974
Alliance Data Systems Corp.(d)(e)	9,125		570,039
The Brink’s Co.(e)	13,000		830,960
Cohen & Steers, Inc.	1,025		41,174
Commvault Systems, Inc.(d)	3,500		70,035
Corrections Corp. of America(d)	1,200		54,276
Diamond Management & Technology Consultants, Inc.	29,000		360,760
eFunds Corp.(d)	14,640		402,600
Exlservice Holdings, Inc.(d)	4,846		101,960
Fair, Isaac & Co., Inc.	1,400		56,910
Forrester Research, Inc.(d)	13,900		376,829
Gartner, Inc. - Class A(d)(e)	8,400		166,236
Global Payments, Inc.	8,100		375,030
Healthcare Services Group, Inc.	9,150		264,984
Hewitt Associates, Inc. - Class A(d)	19,990		514,743
HMS Holdings Corp.(d)	7,950		120,442
Investors Financial Services Corp.(e)	7,200		307,224
Korn/Ferry International(d)	2,100		48,216
Manpower, Inc.	900		67,437
National Financial Partners Corp.	7,930		348,682
Net1 UEPS Technologies, Inc.(d)	14,700		434,532
PRA International(d)	2,049		51,778
W.W. Grainger, Inc.(e)	6,054		423,417
			6,154,238
Chemicals — 0.5%
Agrium, Inc.(e)	4,300		135,407
Air Products & Chemicals, Inc.	3,550		249,494
Ashland, Inc.	6,050		418,539
Celanese Corp. - Series A	45,070		1,166,411
The Lubrizol Corp.	18,875		946,204
Lyondell Chemical Co.	42,200		1,079,054
			3,995,109
Computer & Office Equipment — 1.7%
Apple Computer, Inc.(d)	13,933		1,182,076
Cisco Systems, Inc.(d)	132,050		3,608,926
Electronics for Imaging, Inc.(d)	22,150		588,747
Hewlett-Packard Co.	110,700		4,559,733
International Business Machines Corp.	20,050		1,947,858
Lexmark International, Inc.(d)(e)	800		58,560
NCR Corp.(d)(e)	10,485		448,339
Phase Metrics, Inc.(c)(d)	50,574		1,011
Western Digital Corp.(d)	30,550		625,053
			13,020,303
Computer Software & Services — 2.9%
Activision, Inc.(d)(e)	33,061		569,972
Adobe Systems, Inc.(d)	45,100		1,854,512
Aladdin Knowledge Systems Ltd.(d)	13,350		260,192
Blackboard, Inc.(d)(e)	15,650		470,126
CACI International, Inc.(d)	16,000		904,000
Cadence Design Systems, Inc.(d)	38,725		693,565
Ceridian Corp.(d)	12,150		339,957
Cognizant Technology Solutions Corp.(d)	13,000		1,003,080
Computer Sciences Corp.(d)	18,850		1,006,024
Double-Take Software, Inc.(d)	1,100		14,168
EMC Corp.(d)	41,619		549,371
First Data Corp.	21,700		553,784
Foundry Networks, Inc.(d)	32,950		493,591
Google, Inc. - Class A(d)	7,844		3,612,005
i2 Technologies, Inc.(d)(e)	9,000		205,380
IAC/InterActiveCorp(d)(e)	10,050		373,458
IHS, Inc.(d)	21,050		831,054
Ingram Micro, Inc. - Class A(d)	18,000		367,380
International Game Technology	7,300		337,260
Interwoven, Inc.(d)	6,950		101,956
Juniper Networks, Inc.(d)(e)	50,000		947,000
Komag, Inc.(d)	1,175		44,509
Lawson Software, Inc.(d)	11,400		84,246
Microsoft Corp.	43,800		1,307,868
Move, Inc.(d)	53,600		295,336
Oracle Corp.(d)	68,750		1,178,375
Phase Forward, Inc.(d)	10,500		157,290
Salesforce.com, Inc.(d)(e)	33,350		1,215,608
SI International, Inc.(d)	3,750		121,575
SonicWALL, Inc.(d)	40,400		340,168
Sun Microsystems, Inc.(d)	65,450		354,739
Sybase, Inc.(d)	2,300		56,810
TIBCO Software, Inc.(d)	12,050		113,752
Transaction Systems Architects, Inc.(d)	23,800		775,166
Trident Microsystems, Inc.(d)(e)	3,300		59,994
The TriZetto Group, Inc.(d)	10,533		193,491
Unisys Corp.(d)	36,130		283,259
VeriFone Holdings, Inc.(d)(e)	12,700		449,580
			22,519,601
Construction — 0.0%
The Ryland Group, Inc.	1,175		64,178
United Rentals, Inc.(d)	2,200		55,946
			120,124

49

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS (Continued)
United States (Continued)
Containers — 0.1%
Owens—Illinois, Inc.(d)(e)	35,510	$	655,159
Silgan Holdings, Inc.	3,050		133,956
Smurfit—Stone Container Corp.(d)	31,850		336,336
			1,125,451
Electronics — 0.8%
Agilent Technologies, Inc.(d)	14,650		510,552
Ametek, Inc.	16,050		511,032
Amphenol Corp.	10,050		623,904
Arrow Electronics, Inc.(d)	2,450		77,298
Cogent, Inc.(d)	13,350		146,984
Directed Electronics, Inc.(d)	8,100		92,745
FLIR Systems, Inc.(d)(e)	17,600		560,208
Intel Corp.	59,850		1,211,962
L-3 Communications Holdings, Inc.	23,010		1,881,758
Vishay Intertechnology, Inc.(d)	36,550		494,887
WESCO International, Inc.(d)(e)	700		41,167
			6,152,497
Energy & Utilities — 2.5%
Airgas, Inc.	49,200		1,993,584
CenterPoint Energy, Inc.(e)	87,950		1,458,211
Constellation Energy Group, Inc.(e)	13,080		900,820
Dynegy, Inc. - Class A(d)	5,263		38,104
Edison International	18,820		855,934
El Paso Electric Co.(d)	4,900		119,413
Equitable Resources, Inc.(e)	20,080		838,340
Evergreen Energy, Inc.(d)(e)	11,500		113,735
FirstEnergy Corp.	28,950		1,743,079
FPL Group, Inc.(e)	10,200		555,084
IDACORP, Inc.	1,125		43,481
KBR, Inc.(d)	13,280		347,405
Longview Energy Co. (acquired 8/13/04, cost $48,000)(c)(f)(g)	3,200		60,800
NRG Energy, Inc.(d)	14,180		794,222
NSTAR(e)	35,100		1,206,036
PG&E Corp.(e)	48,600		2,300,238
Pike Electric Corp.(d)(e)	2,587		42,246
Pinnacle West Capital Corp.(e)	975		49,374
PPL Corp.	25,930		929,331
Public Service Enterprise Group, Inc.(e)	14,260		946,579
Puget Energy, Inc.	2,600		65,936
Questar Corp.(e)	15,170		1,259,868
Sempra Energy	33,400		1,869,398
TXU Corp.	21,050		1,141,120
Wisconsin Energy Corp.	1,200		56,952
			19,729,290
Entertainment & Leisure — 1.4%
Gaylord Entertainment Co.(d)	1,400		71,302
Hilton Hotels Corp.(e)	62,690		2,187,881
Las Vegas Sands Corp.(d)(e)	4,600		411,608
Melco PBL Entertainment Ltd. - ADR(d)	4,500		95,670
Morgans Hotel Group Co.(d)	10,865		183,944
Orient-Express Hotels Ltd. - Class A	27,337		1,293,587
Pinnacle Entertainment, Inc.(d)	4,300		142,502
Sabre Holdings Corp.	45,200		1,441,428
Scientific Games Corp. - Class A(d)(e)	19,000		574,370
Station Casinos, Inc.	4,650		379,766
Sunterra Corp.(d)	9,057		109,137
Vail Resorts, Inc.(d)	6,850		307,017
The Walt Disney Co.(e)	104,800		3,591,496
World Wrestling Entertainment, Inc.	6,250		101,875
			10,891,583
Finance — 3.3%
Affiliated Managers Group, Inc.(d)(e)	950		99,874
AllianceBernstein Holding LP	3,746		301,178
Ambac Financial Group, Inc.	10,605		944,587
American Express Co.	45,140		2,738,644
AmeriCredit Corp.(d)	39,750		1,000,508
Ameriprise Financial, Inc.	11,800		643,100
The Bear Stearns Cos., Inc.	9,650		1,570,827
Capital One Financial Corp.	17,965		1,380,071
Chicago Mercantile Exchange Holdings, Inc.(e)	4,282		2,182,749
CIT Group, Inc.	38,690		2,157,741
Evercore Partners, Inc.(d)	970		35,744
Fannie Mae	13,450		798,796
The Goldman Sachs Group, Inc.	14,300		2,850,705
Indymac Bancorp, Inc.	1,075		48,547
Investment Technology Group, Inc.(d)	4,200		180,096
Mellon Financial Corp.(e)	19,610		826,562
Morgan Stanley	38,400		3,126,912
Nasdaq Stock Market, Inc.(d)	10,400		320,216
NGP Capital Resources Co.	2,700		45,225
Nymex Holdings, Inc.(d)(e)	200		24,802
NYSE Group, Inc.(d)(e)	8,700		845,640
Raymond James Financial, Inc.	1,825		55,316
Sumitomo Mitsui Financial Group, Inc.	179		1,835,049
T. Rowe Price Group, Inc.	3,150		137,876
TCF Financial Corp.	1,300		35,646
UBS AG	5,800		349,914
Washington Mutual, Inc.(e)	25,200		1,146,348
Wright Express Corp.(d)(e)	10,450		325,726
			26,008,399
Food & Agriculture — 1.0%
Archer-Daniels-Midland Co.	39,100		1,249,636
Bunge Ltd.(e)	3,190		231,307
ConAgra Foods, Inc.	41,050		1,108,350
Corn Products International, Inc.	1,450		50,083
Del Monte Foods Co.	80,210		884,716
General Mills, Inc.	29,750		1,713,600
Monsanto Co.	36,136		1,898,224
Panera Bread Co. - Class A(d)(e)	5,400		301,914
Pilgrim’s Pride Corp.	22,360		658,055
			8,095,885
Insurance — 2.7%
ACE Ltd.	11,100		672,327
Aetna, Inc.	27,600		1,191,768
The Allstate Corp.	36,750		2,392,792
American Financial Group, Inc.	2,550		91,570

50

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SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS (Continued)
United States (Continued)
Insurance (Continued)
American International Group, Inc.	36,050	$	2,583,343
Aspen Insurance Holdings Ltd.	32,040		844,574
Axis Capital Holdings Ltd.	25,540		852,270
CHUBB Corp.	33,950		1,796,294
Conseco, Inc.(d)(e)	45,470		908,491
Endurance Specialty Holdings Ltd.	24,648		901,624
Everest Re Group Ltd.	525		51,508
First Mercury Financial Corp.(d)	4,900		115,248
HCC Insurance Holdings, Inc.	1,600		51,344
IPC Holdings Ltd.	2,797		87,966
MetLife, Inc.(e)	21,850		1,289,368
National Atlantic Holdings Corp. - Class A(d)	4,700		54,802
Nationwide Financial Services, Inc.	14,100		764,220
PartnerRe Ltd.	600		42,618
Platinum Underwriters Holdings Ltd.	5,541		171,439
Protective Life Corp.	950		45,125
The St. Paul Travelers Cos., Inc.	50,550		2,714,030
UnumProvident Corp.	58,600		1,217,708
W.R. Berkley Corp.(e)	32,625		1,125,889
WellPoint, Inc.(d)	5,600		440,664
XL Capital Ltd.	14,090		1,014,762
			21,421,744
Machinery & Heavy Equipment — 0.1%
Bucyrus International, Inc. - Class A(e)	2,700		139,752
Joy Global, Inc.(e)	5,750		277,955
Regal-Beloit Corp.	1,100		57,761
Terex Corp.(d)(e)	9,000		581,220
			1,056,688
Manufacturing — 3.8%
Actuant Corp. - Class A	5,950		283,518
Acuity Brands, Inc.(e)	1,300		67,652
American Railcar Industries, Inc.	5,100		173,604
Aptargroup, Inc.	2,750		162,360
Callaway Golf Co.(e)	25,862		372,671
Chart Industries, Inc.(d)	8,450		136,974
Chattem, Inc.(d)	3,200		160,256
Cooper Industries Ltd. - Class A	21,753		1,967,124
Corning, Inc.(d)	91,400		1,710,094
Crane Co.	1,000		36,640
Cummins, Inc.(e)	8,400		992,712
Danaher Corp.	17,400		1,260,456
Diodes, Inc.(d)	2,150		76,282
Energizer Holdings, Inc.(d)	16,100		1,142,939
Gardner Denver, Inc.(d)	16,000		596,960
General Electric Co.	196,750		7,321,068
Harsco Corp.	600		45,660
Heelys, Inc.(d)	500		16,055
Hexel Corp.(d)(e)	7,450		129,705
Honeywell International, Inc.	48,050		2,173,782
IDEX Corp.	11,550		547,586
K2, Inc.(d)	9,900		130,581
Ladish Co., Inc.(d)	400		14,832
Lennox International, Inc.	9,510		291,101
Mettler-Toledo International, Inc.(d)	500		39,425
Mueller Water Products, Inc. - Class A(e)	5,150		76,580
Nucor Corp.(e)	12,800		699,648
OYO Geospace Corp.(d)	72		4,182
Parker Hannifin Corp.(e)	15,500		1,191,640
Paxar Corp.(d)	5,350		123,371
Phillips-Van Heusen Corp.	1,000		50,170
Polo Ralph Lauren Corp.(e)	12,800		994,048
Powerwave Technologies, Inc.(d)	14,500		93,525
Precision Castparts Corp.	6,875		538,175
RBC Bearings, Inc.(d)	3,400		97,444
Reynold American, Inc.(e)	14,500		949,315
Rockwell Automation, Inc.	16,850		1,029,198
Shuffle Master, Inc.(d)(e)	5,200		136,240
Textron, Inc.	23,030		2,159,523
The Warnaco Group, Inc.(d)	32,700		829,926
Watson Wyatt Worldwide, Inc.	8,900		401,835
Whirlpool Corp.(e)	8,440		700,689
			29,925,546
Measuring & Controlling Devices — 0.3%
Thermo Electron Corp.(d)(e)	44,800		2,028,992
Medical & Medical Services — 1.1%
Amgen, Inc.(d)(e)	11,500		785,565
Apria Healthcare Group, Inc.(d)	1,900		50,635
Caremark Rx, Inc.	2,950		168,475
Coventry Health Care, Inc.(d)	40,585		2,031,279
Digene Corp.(d)	6,250		299,500
Henry Schein, Inc.(d)	13,400		656,332
LifePoint Hospitals, Inc.(d)	9,700		326,890
McKesson Corp.	8,000		405,600
Medco Health Solutions, Inc.(d)	7,300		390,112
Noven Pharmaceuticals, Inc.(d)	19,750		502,638
Omnicare, Inc.(e)	8,450		326,424
Pediatrix Medical Group, Inc.(d)	14,400		704,160
Pharmaceutical Product Development, Inc.	1,000		32,220
Radiation Therapy Services, Inc.(d)	1,100		34,672
Santarus, Inc.(d)(e)	17,400		136,242
Sierra Health Services, Inc.(d)	1,325		47,753
Symbion, Inc.(d)	10,350		191,578
Triad Hospitals, Inc.(d)	16,150		675,554
UnitedHealth Group, Inc.	14,000		752,220
Vital Images, Inc.(d)	7,250		252,300
WellCare Health Plans, Inc.(d)	900		62,010
			8,832,159
Medical Instruments & Supplies — 1.1%
Adeza Biomedical Corp.(d)	7,800		116,298
Align Technology, Inc.(d)(e)	32,000		447,040
Beckman Coulter, Inc.	10,200		609,960
Becton, Dickinson & Co.	8,150		571,723
Bruker BioSciences Corp.(d)	11,550		86,740
Charles River Laboratories International, Inc.(d)	1,200		51,900
The Cooper Cos., Inc.(e)	7,710		343,095
Cutera, Inc.(d)	6,250		168,750
DJ Orthopedics, Inc.(d)	9,200		393,944
Ev3, Inc.(d)	7,250		124,918
Hillenbrand Industries, Inc.	11,097		631,752
Hologic, Inc.(d)(e)	8,900		420,792

51

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SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS (Continued)
United States (Continued)
Medical Instruments & Supplies (Continued)
Home Diagnostics, Inc.(d)	3,100	$	32,860
Immucor, Inc.(d)	2,150		62,844
IntraLase Corp.(d)	11,500		257,370
Johnson & Johnson	34,790		2,296,836
Kinetic Concepts, Inc.(d)	1,900		75,145
Kyphon, Inc.(d)(e)	3,700		149,480
Martek Biosciences Corp.(d)	18,050		421,287
MWI Veterinary Supply, Inc.(d)	2,000		64,600
Orthofix International, NV(d)	2,400		120,000
ThermoGenesis Corp.(d)	21,700		93,527
Varian Medical Systems, Inc.(d)	8,975		426,941
Wright Medical Group, Inc.(d)(e)	12,705		295,772
			8,263,574
Metal & Mining — 1.1%
Alpha Natural Resources, Inc.(d)(e)	1,000		14,230
Century Aluminum Co.(d)	14,850		663,053
CONSOL Energy, Inc.(e)	111,900		3,595,347
Foundation Coal Holdings, Inc.(e)	2,300		73,048
Freeport-McMoRan Copper & Gold, Inc. - Class B(e)	14,250		794,153
Massey Energy Co.(e)	75,428		1,752,192
Peabody Energy Corp.	598		24,165
Phelps Dodge Corp.	7,850		939,802
Reliance Steel & Aluminum Co.	1,000		39,380
Steel Dynamics, Inc.	1,550		50,298
United States Steel Corp.	3,760		275,006
Universal Stainless & Alloy Products, Inc.(d)	4,450		148,986
			8,369,660
Motor Vehicles — 0.2%
Harley-Davidson, Inc.	8,150		574,331
Oshkosh Truck Corp.	6,150		297,783
PACCAR, Inc.(e)	10,500		681,450
Tenneco Automotive, Inc.(d)	5,400		133,488
			1,687,052
Oil & Gas — 5.1%
AGL Resources, Inc.	21,770		847,071
American Oil & Gas, Inc.(d)(e)	5,947		38,953
Atwood Oceanics, Inc.(d)	3,100		151,807
BJ Services Co.(e)	5,500		161,260
Bois d’Arc Energy, Inc.(d)	2,400		35,112
Cal Dive International, Inc.(d)	3,700		46,435
Callon Petroleum Co.(d)	2,500		37,575
Cameron International Corp.(d)(e)	725		38,461
CanArgo Energy Corp.(d)	191,100		309,582
Chesapeake Energy Corp.(e)	7,100		206,255
Chevron Corp.	56,100		4,125,033
Clayton Williams Energy, Inc.(d)	20,823		756,083
Complete Production Services, Inc.(d)	900		19,080
Comstock Resources, Inc.(d)	6,400		198,784
ConocoPhillips	75,100		5,403,445
Delta Petroleum Corp.(d)	6,755		156,446
Devon Energy Corp.	2		134
Diamond Offshore Drilling, Inc.(e)	17,797		1,422,692
Energen Corp.	18,900		887,166
ENSCO International, Inc.(e)	24,850		1,243,991
EOG Resources, Inc.	12,320		769,384
EXCO Resources, Inc.(d)	4,100		69,331
The Exploration Co.(d)	8,700		116,058
Exxon Mobil Corp.	110,550		8,471,447
Gasco Energy, Inc.(d)(e)	18,500		45,325
GlobalSantaFe Corp.(e)	28,137		1,653,893
Goodrich Petroleum Corp.(d)	1,550		56,079
Grant Prideco, Inc.(d)(e)	9,300		369,861
Halliburton Co.	6,330		196,546
Helmerich & Payne, Inc.	1,250		30,588
Hercules Offshore, Inc.(d)	4,900		141,610
Marathon Oil Corp.	35,550		3,288,375
Mariner Energy, Inc.(d)	5,500		107,800
Matador Resources Co. (acquired 10/14/03 through 4/13/06, cost $62,950)(c)(f)(g)	2,895		78,165
Newfield Exploration Co.(d)(e)	26,334		1,210,047
Noble Energy, Inc.(e)	2,150		105,500
Oceaneering International, Inc.(d)	4,800		190,560
Oil States International, Inc.(d)	2,100		67,683
Oneok, Inc.	2,000		86,240
Parallel Petroleum Corp.(d)	7,979		140,191
Petrohawk Energy Corp.(d)	7,745		89,068
Petroquest Energy, Inc.(d)	10,336		131,681
Precision Drilling Trust(e)	3,300		76,428
Pride International, Inc.(d)	13,800		414,000
Rowan Cos., Inc.(e)	11,800		391,760
Schlumberger Ltd.(e)	31,100		1,964,276
Southwest Gas Corp.	1,825		70,025
Superior Energy Services, Inc.(d)(e)	10,050		328,434
Treasure Island Royalty Trust(d)	217,129		23,884
Unit Corp.(d)	1,325		64,196
Valero Energy Corp.	22,250		1,138,310
W&T Offshore, Inc.	1,450		44,544
Weatherford International Ltd.(d)	17,349		725,008
Whiting Petroleum Corp.(d)	1,475		68,735
XTO Energy, Inc.	33,300		1,566,765
			40,377,162
Paper & Paper Products — 0.0%
Temple—Inland, Inc.	8,400		386,652
Personal Services — 0.1%
Laureate Education, Inc.(d)(e)	12,700		617,601
Pharmaceuticals — 2.1%
Allergan, Inc.(e)	13,581		1,626,189
Amylin Pharmaceuticals, Inc.(d)(e)	8,300		299,381
Cephalon, Inc.(d)	840		59,144
Endo Pharmaceuticals Holdings, Inc.(d)	11,450		315,791
Genentech, Inc.(d)	3,050		247,447
Genzyme Corp.(d)	16,000		985,280
ICON PLC — ADR(d)	2,300		86,710
IMS Health, Inc.	10,400		285,792
King Pharmaceuticals, Inc.(d)	2,450		39,004
Merck & Co., Inc.	106,450		4,641,220
Pfizer, Inc.	218,000		5,646,200
United Therapeutics Corp.(d)	600		32,622
Vertex Pharmaceuticals, Inc.(d)	1,100		41,162

52

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SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS (Continued)
United States (Continued)
Pharmaceuticals (Continued)
Wyeth	49,300	$	2,510,356
			16,816,298
Plastics — 0.2%
Sonoco Products Co.	33,750		1,284,525
Publishing & Printing — 0.5%
Dow Jones & Co., Inc.(e)	8,885		337,630
Idearc, Inc.(d)	3,894		111,563
The McGraw-Hill Cos., Inc.	26,700		1,816,134
R.R. Donnelley & Sons Co.	31,235		1,110,092
Tribune Co.(e)	12,420		382,287
			3,757,706
Railroad & Shipping — 0.3%
CSX Corp.	12,330		424,522
Union Pacific Corp.(e)	18,750		1,725,375
UTI Worldwide, Inc.	12,500		373,750
			2,523,647
Real Estate — 1.1%
AMB Property Corp. (REIT)	1,200		70,332
Boston Properties, Inc. (REIT)(e)	7,800		872,664
CB Richard Ellis Group, Inc. - Class A (REIT)(d)	35,600		1,181,920
CBL & Associates Properties, Inc. (REIT)	22,600		979,710
Corporate Office Properties Trust (REIT)(e)	2,600		131,222
Education Realty Trust, Inc. (REIT)	7,750		114,468
Gramercy Capital Corp. (REIT)	3,000		92,670
Hospitality Properties Trust (REIT)	1,400		66,542
New Plan Excel Realty Trust (REIT)	2,300		63,204
ProLogis (REIT)	38,610		2,346,330
Regency Centers Corp. (REIT)	725		56,673
Simon Property Group, Inc. (REIT)(e)	28,660		2,902,971
			8,878,706
Restaurants — 0.5%
CKE Restaurants, Inc.	21,280		391,552
Darden Restaurants, Inc.	875		35,149
Jack-in-the-Box, Inc.(d)	1,150		70,196
McDonald’s Corp.	65,450		2,901,399
Red Robin Gourmet Burgers, Inc.(d)	6,250		224,062
Ruby Tuesday, Inc.(e)	5,500		150,920
			3,773,278
Retail Merchandising — 2.2%
Abercrombie & Fitch Co. - Class A	2,200		153,186
Advance Auto Parts, Inc.	26,370		937,717
American Eagle Outfitters, Inc.(e)	14,662		457,601
AutoZone, Inc.(d)	400		46,224
Big Lots, Inc.(d)(e)	2,100		48,132
Borders Group, Inc.(e)	32,290		721,681
Central Garden & Pet Co.(d)	13,110		634,786
The Children’s Place Retail Stores, Inc.(d)	4,200		266,784
Coach, Inc.(d)	6,050		259,908
Dick’s Sporting Goods, Inc.(d)(e)	9,838		481,964
Dillard’s, Inc.-Class A(e)	16,000		559,520
Dollar Tree Stores, Inc.(d)	33,600		1,011,360
Federated Department Stores, Inc.(e)	48,840		1,862,269
GameStop Corp.(d)(e)	10,800		595,188
Genesco, Inc.(d)(e)	3,031		113,056
Golfsmith International Holdings, Inc.(d)	19,400		188,374
Hot Topic, Inc.(d)	20,550		274,137
J.C. Penney Co., Inc.(e)	18,950		1,465,972
Jarden Corp.(d)(e)	5,400		187,866
The Kroger Co.	62,740		1,447,412
Limited Brands, Inc.	25,250		730,735
Nordstrom, Inc.(e)	1,100		54,274
Office Depot, Inc.(d)(e)	8,800		335,896
Payless ShoeSource, Inc.(d)	1,750		57,435
Rent-A-Center, Inc.(d)	1,650		48,692
Saks, Inc.(e)	21,870		389,723
Sally Beauty Holdings, Inc.(d)	6,000		46,800
Staples, Inc.	43,950		1,173,465
Supervalu, Inc.(e)	23,960		856,570
The Talbots, Inc.	11,416		275,126
TJX Cos., Inc.	15,900		452,832
Tractor Supply Co.(d)(e)	2,400		107,304
Tween Brands, Inc.(d)(e)	1,400		55,902
Wal-Mart Stores, Inc.	22,500		1,039,050
			17,336,941
Security Brokers & Dealers — 0.3%
iShares Russell 2000 Value Index Fund	1,463		117,069
Lehman Brothers Holdings, Inc.(e)	22,000		1,718,640
Piper Jaffray Cos., Inc.(d)(e)	9,340		608,501
			2,444,210
Semiconductors & Related Devices — 0.8%
Avnet, Inc.(d)(e)	24,800		633,144
Cymer, Inc.(d)	2,900		127,455
Integrated Device Technology, Inc.(d)(e)	18,500		286,380
Lam Research Corp.(d)(e)	21,620		1,094,404
Marvell Technology Group Ltd.(d)(e)	23,020		441,754
MEMC Electronic Materials, Inc.(d)	10,300		403,142
Micrel, Inc.(d)(e)	14,200		153,076
Microsemi Corp.(d)(e)	8,500		167,025
PMC-Sierra, Inc.(d)(e)	114,800		770,308
Qimonda AG-ADR(d)	9,400		164,594
Rudolph Technologies, Inc.(d)	6,700		106,664
Silicon Storage Technology, Inc.(d)	25,450		114,780
Standard Microsystems Corp.(d)	7,700		215,446
STMicroelectronics NV-NY Shares(e)	57,600		1,059,840
Ultra Clean Holdings, Inc.(d)	5,550		68,542

53

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)		NUMBER OF SHARES		VALUE
COMMON STOCKS (Continued)
United States (Continued)
Semiconductors & Related Devices (Continued)
Varian Semiconductor Equipment Associates, Inc.(d)(e)			2,600	$	118,352
					5,924,906
Soaps & Cosmetics — 0.8%
Colgate-Palmolive Co.			8,400		548,016
Estee Lauder Cos., Inc.			26,150		1,067,443
The Procter & Gamble Co.			76,080		4,889,662
					6,505,121
Telecommunications — 2.8%
Amdocs Ltd.(d)			53,890		2,088,238
American Tower Corp. - Class A			38,716		1,443,332
Andrew Corp.(d)			45,170		462,089
Anixter International, Inc.(d)			900		48,870
Arris Group, Inc.(d)			3,150		39,406
AT&T, Inc.(e)			168,750		6,032,812
BellSouth Corp.			46,050		2,169,416
CenturyTel, Inc.			925		40,386
Comverse Technology, Inc.(d)(e)			9,800		206,878
Dobson Communications Corp. - Class A(d)			6,800		59,228
EMS Technologies, Inc.(d)			12,700		254,381
Harman International Industries, Inc.			9,350		934,158
Harris Corp.			32,800		1,504,208
Motorola, Inc.			41,850		860,436
NII Holdings, Inc.(d)(e)			22,941		1,478,318
Occam Networks, Inc.(d)			8,200		135,300
Polycom, Inc.(d)(e)			18,300		565,653
Sprint Nextel Corp.(e)			22,030		416,147
Verizon Communications, Inc.			77,894		2,900,773
					21,640,029
Tires & Rubber — 0.1%
Cooper Tire & Rubber Co.(e)			32,588		466,008
The Goodyear Tire & Rubber Co.(d)			24,600		516,354
					982,362
Tobacco — 0.4%
Altria Group, Inc.			29,400		2,523,108
Carolina Group			13,680		885,369
					3,408,477
Transportation — 0.1%
C.H. Robinson Worldwide, Inc.(e)			1,750		71,558
Hornbeck Offshore Services, Inc.(d)			2,900		103,530
Landstar System, Inc.(e)			6,250		238,625
Overseas Shipholding Group, Inc.			600		33,780
Ryder Systems, Inc.			9,875		504,218
Vitran Corp., Inc.(d)			4,450		77,296
Yellow Roadway Corp.			1,225		46,219
					1,075,226
Waste Management — 0.2%
Allied Waste Industries, Inc.(d)			86,300		1,060,627
Republic Services, Inc.			1,200		48,804
Waste Management, Inc.			8,000		294,160
					1,403,591
Total United States					392,445,853
TOTAL COMMON STOCKS
(Cost $ 417,955,792)					527,149,345
WARRANTS — 0.0%
Point North Energy Ltd. (issued 7/24/03, expiring 7/23/08, strikeprice 5.00 CAD) (acquired 7/24/03, cost $0)(c)(f)(g)			13,755		5,426
Triex Minerals Corp. (issued 12/23/05, expiring 6/23/07,strike price 3.00 CAD) (acquired 12/23/05, cost $0)(b)(c)(g)			3,300		5,631
TOTAL WARRANTS
(Cost $ 0)					11,057
	MATURITY	PAR (000)
U.S. GOVERNMENT & AGENCY OBLIGATIONS — 2.4%
Federal Home Loan Bank, Unsecured Bonds
2.25%	01/09/07	$	3,250		3,248,154
Federal Home Loan Mortgage Corp., Unsecured Notes
4.62%	05/28/13		150		144,821
Federal National Mortgage Assoc., Unsecured Notes
7.25%	01/15/10		1,245		1,324,548
Resolution Funding Corp., Strip Bonds
6.29%(h)	07/15/18		150		84,746
6.30%(h)	10/15/18		150		83,640
Small Business Administration Participation Certificates, Series 97-20F, Class 1
7.20%	06/01/17		566		589,503
Small Business Administration Participation Certificates, Series 97-P10C, Class 1
6.85%	08/01/07		81		81,690
U.S. Treasury Bonds
4.50%	02/15/36		65		61,811
U.S. Treasury Inflation Protected Bonds
2.00%	01/15/26		1,930		1,845,399
U.S. Treasury Inflation Protected Notes
2.00%	01/15/14		800		848,690
2.50%	07/15/16		455		458,081
U.S. Treasury Notes
4.88%	08/15/16		4,480		4,533,550
4.62%	11/15/16		5,715		5,677,498
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost $19,087,798)					18,982,131

54

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MORTGAGE PASS—THROUGHS — 8.2%
Federal Home Loan Mortgage Corp. ARM
5.04%(i)	12/01/35	$	799	$	789,609
6.15%(i)	08/01/36		1,324		1,342,081
Federal Home Loan Mortgage Corp. Gold
8.00%	08/08-08/27		27		28,647
4.00%	05/10-05/19		188		179,820
6.00%	04/13-01/22		1,137		1,152,427
4.50%	05/18-08/20		1,568		1,513,387
5.50%	09/21-08/33		3,812		3,801,149
9.50%	12/01/22		269		290,811
7.50%(j)	09/01/27		0		353
6.50%	01/29-08/32		70		71,476
5.00%	05/01/34		222		214,032
Federal Home Loan Mortgage Corp. Gold 15 Year TBA
5.00%	01/01/22		1,000		982,188
Federal Home Loan Mortgage Corp. Gold 30 Year TBA
5.00%	01/01/37		2,000		1,929,376
Federal National Mortgage Assoc.
8.00%	04/08-02/33		194		204,861
7.00%	08/08-10/32		393		404,098
8.50%	02/01/09		8		8,537
6.50%	01/11-09/36		1,741		1,778,742
6.00%	09/11-04/35		3,326		3,356,466
5.50%	04/17-06/36		14,341		14,268,618
5.00%	01/18-01/37		15,675		15,356,209
4.50%	10/01/18		444		428,932
4.00%	06/01/19		939		884,684
7.50%	02/30-01/31		458		477,891
Federal National Mortgage Assoc. 15 Year TBA
4.50%	01/01/22		1,000		964,375
6.00%	01/01/22		1,000		1,013,750
Federal National Mortgage Assoc. 30 Year TBA
6.00%	01/01/37		8,000		8,052,496
6.50%	01/01/37		1,000		1,018,750
Federal National Mortgage Assoc. ARM
4.78%(i)	01/01/35		817		804,355
Government National Mortgage Assoc. I
6.50%	02/09-11/28		390		399,884
7.50%	11/10-12/29		38		39,534
6.00%	10/23-02/24		291		295,006
7.00%	09/31-05/32		48		49,176
5.50%	04/33-12/34		745		741,836
Government National Mortgage Assoc. II
5.00%	10/20/33		1,264		1,225,220
Government National Mortgage Assoc. II ARM
3.75%(i)	05/20/34		191		187,397
TOTAL MORTGAGE PASS-THROUGHS
(Cost $64,321,313)					64,256,173
COLLATERALIZED MORTGAGE OBLIGATIONS — 2.2%
Banc of America Alternative Loan Trust, Series 04-6, Class 4A1
5.00%	07/25/19		67		66,032
Countrywide Home Loans, Series 03-27, Class M
3.90%(i)	06/25/33		608		594,944
Countrywide Home Loans, Series 03-58, Class B1
4.62%(i)	02/19/34		219		213,791
Fannie Mae Grantor Trust, Series 03-T1, Class R (IO)
0.51%(h)	11/25/12		6,602		176,215
Federal Home Loan Mortgage Corp., Series 235 (IO)
5.50%(h)	02/01/36		1,880		449,689
Federal Home Loan Mortgage Corp., Series 2529, Class MB
5.00%	11/15/17		100		97,813
Federal Home Loan Mortgage Corp., Series 2574, Class HP
5.00%	02/15/18		1,420		1,384,691
Federal Home Loan Mortgage Corp., Series 2668, Class AD
4.00%	01/15/15		171		167,650
Federal Home Loan Mortgage Corp., Series 2707, Class PW
4.00%	07/15/14		259		255,548
Federal Home Loan Mortgage Corp., Series 2748, Class LJ
4.00%	03/15/10		8		7,725
Federal Home Loan Mortgage Corp., Series 2864, Class NA
5.50%	01/15/31		158		158,523
Federal Home Loan Mortgage Corp., Series 2996, Class MK
5.50%	06/15/35		850		853,094
Federal National Mortgage Assoc., Series 03-16, Class BC
5.00%	03/25/18		50		48,482
Federal National Mortgage Assoc., Series 04-31, Class PK
3.50%	06/25/10		107		106,949
Federal National Mortgage Assoc., Series 04-88, Class HA
6.50%	07/25/34		70		71,617
Federal National Mortgage Assoc., Series 04-99, Class AO
5.50%	01/25/34		132		131,352
Federal National Mortgage Assoc., Series 05-3, Class AP
5.50%	02/25/35		118		118,685
Federal National Mortgage Assoc., Series 05-51, Class TA
5.50%	05/01/35		2,056		2,052,078
Federal National Mortgage Assoc., Series 05-80, Class PB
5.50%	04/25/30		1,115		1,117,403
Federal National Mortgage Assoc., Series 363, Class 2 (IO)
5.50%(h)	11/01/35		2,162		509,889
Federal National Mortgage Assoc., Series 379, Class 5 (IO)
5.00%(h)	05/25/36		2,109		483,832

55

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
COLLATERALIZED MORTGAGE OBLIGATIONS (Continued)
Harborview Mortgage Loan Trust, Series 05-10, Class 2A1A
5.66%(i)	11/19/35	$	1,098	$	1,100,997
Lehman Brothers-UBS Commercial Mortgage Trust, Series 01-C7, Class A4
5.93%	12/15/25		825		838,535
Lehman Brothers-UBS Commercial Mortgage Trust, Series 01-WM, Class A1
6.16%(b)	07/14/16		640		653,095
Lehman Brothers-UBS Commercial Mortgage Trust, Series 03-C8, Class A1
3.64%	11/15/27		417		407,279
Lehman Brothers-UBS Commercial Mortgage Trust, Series 04-C2, Class A1
2.95%	03/15/29		294		282,117
Lehman Brothers-UBS Commercial Mortgage Trust, Series 04-C6, Class A1
3.88%	08/15/29		214		208,716
Master Alternative Loans Trust, Series 04-4, Class 1A1
5.50%	05/25/34		132		130,081
Salomon Brothers Mortgage Securities VI, Series 87-1 (IO)
11.00%(h)	02/17/17		40		11,421
Salomon Brothers Mortgage Securities VI, Series 87-1 (PO)
11.50%(k)	02/17/17		45		38,106
Salomon Brothers Mortgage Securities VI, Series 87-2 (IO)
11.00%(h)	03/06/17		30		9,729
Salomon Brothers Mortgage Securities VI, Series 87-2 (PO)
11.50%(k)	03/06/17		30		24,158
Structured Asset Securities Corp., Series 01-21A, Class B2
7.21%(i)	01/25/32		15		14,479
Structured Asset Securities Corp., Series 03-2A, Class B2II
5.41%(i)	02/25/33		163		162,230
Washington Mutual Mortgage Loan Trust, Series 03-AR8, Class B1
4.19%(i)	08/25/33		358		350,521
Washington Mutual Mortgage Securities Corp., Series 03-AR3, Class A5
3.93%(i)	04/25/33		223		220,166
Washington Mutual Mortgage Securities Corp., Series 03-AR3, Class B2
4.73%(i)	04/25/33		167		165,198
Washington Mutual Mortgage Securities Corp., Series 03-AR4, Class A6
3.42%(i)	05/25/33		682		668,449
Washington Mutual Mortgage Securities Corp., Series 03-AR5, Class A6
3.70%(i)	06/25/33		850		831,710
Washington Mutual Mortgage Securities Corp., Series 03-AR5, Class B2
4.50%(i)	06/25/33		368		368,409
Washington Mutual Mortgage Securities Corp., Series 04-AR1, Class B1
4.50%(i)	03/25/34		1,199		1,172,747
Washington Mutual Mortgage Securities Corp., Series 04-AR3, Class B1
4.18%(i)	06/25/34		224		216,855
Wells Fargo Mortgage Backed Securities, Series 04-K, Class 1A2
4.47%(i)	07/25/34		426		416,122
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $17,728,891)					17,357,122
COMMERCIAL MORTGAGE BACKED SECURITIES — 4.2%
Bank of America-First Union Commercial Mortgage, Series 01-3, Class A2
5.46%	04/11/37		1,375		1,386,198
Bear Stearns Commercial Mortgage Securities, Inc., Series 99-WF2, Class A2
7.08%	07/15/31		250		258,074
Bear Stearns Commercial Mortgage Securities, Inc., Series 00-WF2, Class A2
7.32%	10/15/32		475		504,460
Bear Stearns Commercial Mortgage Securities, Inc., Series 02-TOP6, Class A1
5.92%	10/15/36		614		621,169
Bear Stearns Commercial Mortgage Securities, Series 03-T12, Class A4
4.68%	09/13/13		1,025		992,714
CDC Commercial Mortgage Trust, Series 02-FX1, Class A1
5.25%	05/15/19		1,518		1,517,526
Commercial Mortgage Acceptance Corp., Series 98-C2, Class C
6.28%(i)	09/15/30		275		279,017
Commerical Mortgage Acceptance Corp., Series 98-C2, Class E
7.06%(i)	06/15/10		930		981,905
Credit Suisse First Boston Mortgage Securities Corp., Series 01-CP4, Class D
6.61%	12/15/35		1,450		1,521,304
Credit Suisse First Boston Mortgage Securities Corp., Series 02-CKN2, Class A3
6.13%	03/15/12		1,000		1,037,597
Credit Suisse First Boston Mortgage Securities Corp., Series 02-CKS4, Class A2
5.18%	08/15/12		1,090		1,084,625

56

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
COMMERCIAL MORTGAGE BACKED SECURITIES (Continued)
Credit Suisse First Boston Mortgage Securities Corp., Series 02-CP5, Class A2
4.94%	12/15/35	$	1,010	$	992,437
Credit Suisse First Boston Mortgage Securities Corp., Series 03-C3, Class A5
3.94%	05/15/38		1,020		947,255
Donaldson, Lufkin & Jenrette, Inc., Commerical Mortgage Corp., Series 99-CG1, Class A1B
6.46%	03/10/32		150		152,906
Donaldson, Lufkin & Jenrette, Inc., Commerical Mortgage Corp., Series 00-CKP1, Class A1B
7.18%	11/10/33		1,115		1,175,552
First Union National Bank Commercial Mortgage Trust, Series 01-C2, Class A2
6.66%	01/12/43		970		1,017,683
First Union National Bank Commercial Mortgage Trust, Series 01-C4, Class A2
6.22%	11/12/11		1,140		1,184,288
First Union-Lehman Brothers-Bank of America Commercial Mortgage Trust, Series 98-C2, Class A2
6.56%	11/18/35		137		138,414
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 99-C3, Class A2
7.18%	08/15/36		144		149,074
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 00-C3, Class A2
6.96%	11/15/10		1,295		1,367,526
Impac Commercial Mortgage Backed Trust, Series 03-5, Class M1
6.10%(i)	08/25/33		25		25,327
Impac Commercial Mortgage Backed Trust, Series 03-7, Class M
7.82%(i)	08/25/33		12		11,972
Impac Commercial Mortgage Backed Trust, Series 04-1, Class M4
7.15%(i)	03/25/34		41		41,633
Impac Commercial Mortgage Backed Trust, Series 04-5, Class 1A1
5.71%(i)	10/25/34		151		151,124
Impac Commercial Mortgage Backed Trust, Series 04-7, Class 1A1
5.72%(i)	11/25/34		409		409,028
Impac Commercial Mortgage Backed Trust, Series 04-7, Class M4
6.55%(i)	11/25/34		148		148,314
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 06-CB17, Class A4
5.43%(i)	12/12/43		975		979,945
J.P. Morgan Commercial Mortgage Finance Corp., Series 97-C5, Class C
7.24%	09/15/29		1,600		1,608,151
J.P. Morgan Commercial Mortgage Finance Corp., Series 99-C7, Class A2
6.51%	10/15/35		482		487,992
J.P. Morgan Commercial Mortgage Finance Corp., Series 99-PLSI, Class D
7.10%(i)	02/15/32		650		672,205
Lehman Brothers Commercial Conduit Mortgage Trust, Series 98-C4, Class A1B
6.21%	10/15/35		447		451,986
Lehman Brothers Commercial Conduit Mortgage Trust, Series 99-C2, Class A2
7.32%	10/15/32		250		260,216
Lehman Brothers Commercial Conduit Mortgage Trust, Series 99-C2, Class E
7.47%	10/15/32		125		132,228
Lehman Brothers-UBS Commercial Mortgage Trust, Series 06-C6, Class A4
5.37%	09/15/39		960		961,824
Morgan Stanley Capital Investments, Series 99-WF1, Class A2
6.21%	11/15/31		423		427,596
Morgan Stanley Capital Investments, Series 03-IQ4, Class A2
4.07%	05/15/40		1,025		961,103
Morgan Stanley Dean Witter Capital Investments, Series 2001-TOP1, Class A4
6.66%	02/15/33		910		950,736
Morgan Stanley Dean Witter Capital Investments, Series 02-TOP7, Class A1
5.38%	01/15/39		480		480,541
Mortgage Capital Funding, Inc., Series 98-MC2, Class B
6.55%	06/18/30		295		298,774
Nationslink Funding Corp., Series 98-2, Class A2
6.48%	08/20/30		171		173,331
Nationslink Funding Corp., Series 98-2, Class B
6.80%	08/20/30		525		534,801
Nationslink Funding Corp., Series 99-2, Class D
7.25%(i)	06/20/31		175		181,186
Salomon Brothers Mortgage Securities VII, Series 00-C1, Class A2
7.52%	12/18/09		460		483,876

57

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
COMMERCIAL MORTGAGE BACKED SECURITIES (Continued)
Salomon Brothers Mortgage Securities VII, Series 00-C3, Class A2
6.59%	10/18/10	$	1,325	$	1,376,605
Structured Asset Receivables Trust, Series 03-2
5.72%(b)(g)(i)	01/21/09		644		643,654
Structured Asset Securities Corp., Series 96-CFL, Class X1 (IO)
2.15%(h)	02/25/28		760		27,810
TIAA Real Estate Collaterallized Debt Obligation Ltd., Series 01-C1A, Class A4
6.68%(b)	06/19/31		1,305		1,343,929
Washington Mutual Asset Securities Corp., Series 05-C1A, Class A1
4.24%(b)	05/25/36		530		521,811
Washington Mutual Asset Securities Corp., Series 05-C1A, Class X (IO)
2.17%(b)(h)	05/25/36		10,431		551,484
TOTAL COMMERCIAL MORTGAGE BACKED SECURITIES
(Cost $33,140,388)					32,608,906
ASSET BACKED SECURITIES — 3.7%
Ace Securities Corp., Series 06-HE2, Class A2A
5.41%(i)	05/25/36		800		800,542
Ameriquest Mortgage Securities, Inc., Series 02-3, Class M2
7.22%(i)	08/25/32		190		191,448
Amortizing Residential Collateral Trust, Series 02-BC3, Class M2
6.45%(i)	06/25/32		129		129,906
Amortizing Residential Collateral Trust, Series 02-BC5, Class M2
6.55%(i)	07/25/32		112		111,969
Bank One Issuance Trust, Series 02-A6, Class A
5.54%(i)	06/15/12		1,550		1,559,121
Bank One Issuance Trust, Series 03, Class A3
5.46%(i)	12/15/10		1,450		1,452,466
Capital Auto Receivables Asset Trust, Series 05-1, Class A4
4.05%	07/15/09		1,800		1,787,428
Capital Auto Receivables Asset Trust, Series 06-SN1A, Class A2A
5.40%(b)	01/20/09		2,250		2,250,585
Carrington Mortgage Loan Trust, Series 06-NC4, Class A1
5.37%(i)	10/25/36		1,278		1,277,550
Caterpillar Financial Asset Trust, Series 04-A, Class A3
3.13%	01/26/09		154		153,000
Centex Home Equity Loan Trust, Series 03-B, Class M3
8.45%(i)	06/25/33		198		198,953
Centex Home Equity, Series 02-A, Class MF2
6.54%	01/25/32		247		246,094
Chase Funding Mortgage Loan Certificates, Series 03-2, Class 1A4
3.99%	08/25/29		93		92,181
Chase Issuance Trust, Series 06, Class A3
5.34%(i)	07/15/11		1,075		1,075,825
Chase Manhattan Auto Owner Trust, Series 03-B, Class CTFS
2.43%	02/16/10		452		447,030
Citibank Credit Card Issuance Trust, Series 03, Class A6
2.90%	05/17/10		250		242,359
Citibank Credit Card Issuance Trust, Series 04, Class A1
2.55%	01/20/09		1,175		1,173,351
Countrywide Certificates, Series 02-2, Class M2
7.08%(i)	12/25/31		10		9,609
Countrywide Certificates, Series 03-2, Class M2
7.00%(i)	03/26/33		276		279,175
Countrywide Certificates, Series 03-3, Class B
6.90%(i)	11/25/31		30		30,285
Countrywide Certificates, Series 03-3, Class M6
6.90%(i)	07/25/32		488		497,050
Countrywide Certificates, Series 03-BCI, Class M2
6.66%(i)	09/25/32		67		67,585
Countrywide Certificates, Series 04-13, Class AV4
5.64%(i)	06/25/35		44		43,881
Countrywide Certificates, Series 06-18, Class 2A1
5.37%(i)	07/25/36		1,923		1,923,375
Credit-Based Asset Servicing and Securitization, Series 04-CB4, Class M1
5.77%(i)	05/25/35		275		274,595
General Electric Business Loan Trust, Series 03-1, Class A
5.78%(b)(i)	04/15/31		203		203,721
General Electric Business Loan Trust, Series 03-1, Class B
6.65%(b)(i)	04/15/31		135		137,375
General Electric Business Loan Trust, Series 03-2A, Class B
6.35%(b)(i)	11/15/31		987		1,007,466
General Electric Business Loan Trust, Series 04-1, Class B
6.05%(b)(i)	05/15/32		211		211,093
Green Tree Financial Corp., Series 96-6, Class A6
7.95%	09/15/27		563		587,726
Green Tree Financial Corp., Series 96-7, Class A6
7.65%	10/15/27		291		300,757
Harley-Davidson Motorcycle Trust, Series 05-2, Class A2
4.07%	02/15/12		1,125		1,105,345
Hedged Mutual Fund Fee Trust, Series 03-1A, Class 2
5.22%(b)	11/30/10		704		714,828

58

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
ASSET BACKED SECURITIES (Continued)
Knollwood CDO Ltd., Series 04-1A, Class C
8.57%(b)(i)	01/10/39	$	182	$	177,214
Long Beach Mortgage Loan Trust, Series 03-4, Class M5A
9.35%(i)	08/25/33		61		61,614
Long Beach Mortgage Loan Trust, Series 04-1, Class M5
6.45%(i)	02/25/34		475		477,315
Lothian Mortgages PLC, Series 3A, Class A1
5.65%(b)(c)(i)	07/24/19		154		153,889
Massachusetts RRB Special Purpose Trust, Series 01-1, Class A
6.53%	06/01/15		962		1,005,589
MBNA Credit Card Master Notes Trust, Series 06-A4, Class A4
5.34%(i)	09/15/11		1,650		1,651,226
Morgan Stanley Capital Investments, Series 06-HE2, Class A2A
5.42%(i)	03/25/36		898		897,921
Option One Mortgage Loan Trust, Series 02-6, Class M1
6.10%(i)	11/25/32		55		55,250
Option One Mortgage Loan Trust, Series 02-6, Class M2
7.05%(i)	11/25/32		118		118,071
Option One Mortgage Loan Trust, Series 03-4, Class A4
5.67%(i)	07/25/33		87		87,122
Option One Mortgage Loan Trust, Series 03-4, Class M5A
9.10%(i)	07/25/33		88		88,693
Option One Mortgage Loan Trust, Series 03-5, Class M4
8.25%(i)	08/25/33		45		45,800
Residential Asset Mortgage Products, Inc., Series 03-RZ2, Class B
5.50%(i)	04/25/33		233		230,820
Residential Asset Securities Corp., Series 02-KS4, Class AIIB
5.60%(i)	07/25/32		32		31,727
Residential Asset Securities Corp., Series 03-KS10, Class MII2
6.70%(i)	12/25/33		871		873,898
Residential Asset Securities Corp., Series 04-KS3, Class MII3
7.15%(i)	04/25/34		400		400,006
Structured Asset Investment Loan Trust, Series 03-BC2, Class M2
7.30%(i)	04/25/33		101		100,871
Structured Asset Investment Loan Trust, Series 03-BC3, Class M2
8.28%(i)	04/25/33		199		198,905
USAA Auto Owner Trust, Series 06-2, Class A3
5.32%	09/15/10		1,625		1,627,889
TOTAL ASSET BACKED SECURITIES
(Cost $28,814,932)					28,867,494
CORPORATE BONDS — 5.0%
Banks — 0.8%
Bank of America Corp., Capital Securities
8.07%(b)	12/31/26		225		234,284
Bank of America Corp., Subordinated Notes
7.40%	01/15/11		325		350,054
Citigroup Capital ll, Capital Securities
7.75%	12/01/36		225		232,654
Citigroup, Inc., Subordinated Notes
5.00%	09/15/14		500		488,199
6.12%	08/25/36		100		104,130
Citigroup, Inc., Unsecured Notes
4.12%	02/22/10		1,000		970,048
Depfa ACS Bank (Ireland), Senior Notes
3.62%	10/29/08		150		146,088
First Union Capital l, Capital Securities
7.94%	01/15/27		325		338,424
HSBC Bank USA, Subordinated Notes
3.87%	06/07/07		1,000		993,602
Kazkommerts International BV (Netherlands), Senior Unsecured Notes
7.88%(b)	04/07/14		310		322,012
U.S. Bank N.A., Senior Bank Notes
4.40%	08/15/08		575		567,550
UBS Preferred Funding Trust, Inc., Capital Securities
8.62%(i)(l)			35		38,663
UBS Vimpelcom
8.25%	05/23/16		100		104,875
Wells Fargo & Co., Senior Unsecured Notes
4.20%	01/15/10		1,200		1,169,036
					6,059,619
Broadcasting — 0.1%
Cablevision Systems Corp., Senior Unsecured Notes
9.87%(i)	04/01/09		325		342,875
Echostar DBS Corp., Senior Notes
7.00%	10/01/13		30		29,963
Echostar DBS Corp., Senior Unsecured Notes
7.12%	02/01/16		25		25,000

59

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
CORPORATE BONDS (Continued)
Broadcasting (Continued)
News America Holdings, Inc., Senior Debentures
7.75%	01/20/24	$	25	$	27,895
News America, Inc., Senior Debentures
7.28%	06/30/28		35		37,667
News America, Inc., Senior Unsecured Notes
6.20%	12/15/34		100		96,522
					559,922
Chemicals — 0.0%
Equistar Chemicals LP, Senior Unsecured Notes
10.12%	09/01/08		50		53,125
Electronics — 0.0%
L-3 Communications Corp., Senior Subordinated Notes
6.38%	10/15/15		35		34,650
Energy & Utilities — 0.1%
AES Eastern Energy LP, Pass-Through Certificates
9.00%	01/02/17		224		251,025
Centerpoint Energy, Inc., Senior Unsecured Notes
7.25%	09/01/10		355		374,037
Dominion Resources, Inc., Senior Unsecured Notes
7.20%	09/15/14		200		219,462
Florida Power & Light Co., First Mortgage Bonds
5.62%	04/01/34		150		147,522
NRG Energy, Inc., Senior Unsecured Notes
7.38%	02/01/16		65		65,325
Reliant Energy, Inc., Senior Secured Notes
6.75%	12/15/14		120		117,300
					1,174,671
Entertainment & Leisure — 0.3%
Comcast Cable Holdings LLC, Senior Debentures
7.88%	08/13-02/26		7		7,934
Comcast Cable Holdings LLC, Senior Notes
7.12%	02/15/28		35		37,359
Comcast Corp., Senior Unsecured Notes
7.05%	03/15/33		115		122,969
Comcast Corp., Unsecured Notes
6.50%	01/15/17		850		886,994
CSC Holdings, Inc., Senior Unsecured Notes
8.12%	07/15/09		600		621,750
Harrahs Operating Co., Inc., Senior Notes
5.75%	10/01/17		150		125,671
MGM Mirage, Inc., Senior Notes
6.00%	10/01/09		100		99,750
Riddell Bell Holdings, Inc., Senior Subordinated Notes
8.38%	10/01/12		110		107,525
Seneca Gaming Corp., Senior Unsecured Notes
7.25%	05/01/12		125		127,187
Station Casinos, Inc., Senior Subordinated Notes
6.62%	03/15/18		120		102,900
Time Warner Cos., Inc., Senior Debentures
7.57%	02/01/24		30		32,968
7.62%(m)	04/15/31		200		223,432
					2,496,439
Finance — 1.2%
ALB Finance BV (Netherlands), Notes
9.25%(b)	09/25/13		100		99,125
Berkshire Hathaway Finance Corp., Senior Unsecured Notes
4.75%	05/15/12		355		347,930
Berkshire Hathaway, Inc., Senior Unsecured Notes
5.42%(i)	01/11/08		60		60,080
Credit Suisse First Boston USA, Inc., Senior Unsecured Notes
4.12%	01/15/10		350		339,561
Ford Motor Credit Co., Senior Notes
5.80%	01/12/09		235		230,733
Gazprom Capital (Luxembourg), Unsecured Notes
9.62%(b)	03/01/13		200		239,500
6.21%(b)	11/22/16		290		292,030
General Electric Capital Corp., Senior Unsecured Notes
6.75%	03/15/32		50		57,264
General Electric Capital Corp., Unsecured Notes
5.42%(i)	01/15/08		400		400,381
5.48%(i)	07/28/08		150		150,270
5.00%	11/15/11		3,445		3,419,745
J.P. Morgan Capital Trust I, Capital Securities
7.54%	01/15/27		175		181,568
J.P. Morgan Chase & Co., Unsecured Notes
5.60%	06/01/11		550		556,937
Lehman Brothers Holdings, Senior Unsecured Notes
3.95%	11/10/09		375		362,481
Morgan Stanley, Senior Notes
5.40%(i)	03/07/08		1,655		1,656,206
5.62%	01/09/12		205		208,378
Morgan Stanley, Unsecured Notes
5.05%	01/21/11		360		357,661
Nationwide Building Society (United Kingdom), Senior Unsecured Notes
3.50%(b)	07/31/07		75		74,192
Nationwide Building Society (United Kingdom), Unsecured Notes
2.62%(b)	01/30/07		550		548,930

60

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
CORPORATE BONDS (Continued)
Finance (Continued)
Russian Agricultural Bank (Luxembourg), Senior Unsecured Note
7.18%(b)	05/16/13	$	100	$	105,375
Russian Standard Bank (Luxembourg), Notes
8.62%(b)	05/05/11		100		99,625
					9,787,972
Insurance — 0.1%
Allstate Financial Global Funding LLC, Unsecured Notes
2.50%(b)	06/20/08		325		312,332
Metlife, Inc., Junior Subordinated Debentures
6.40%(i)	12/15/36		390		393,264
					705,596
Leasing — 0.0%
United Rentals N.A., Inc., Senior Subordinated Notes
7.75%	11/15/13		150		150,563
United Rentals N.A., Inc., Senior Unsecured Notes
6.50%	02/15/12		30		29,625
					180,188
Manufacturing — 0.1%
Goodman Global Holdings, Inc., Senior Unsecured Notes
8.36%(i)	06/15/12		145		147,175
Goodyear Tire & Rubber Co., Senior Notes
8.62%(b)	12/01/11		100		103,250
					250,425
Medical & Medical Services — 0.0%
Tenet Healthcare Corp., Senior Unsecured Notes
9.88%	07/01/14		60		61,050
Metal & Mining — 0.0%
TRIMAS Corp., Senior Subordinated Notes
9.88%	06/15/12		100		96,750
Oil & Gas — 0.1%
ANR Pipeline Co., Senior Debentures
9.62%	11/01/21		30		39,811
7.38%	02/15/24		15		16,816
Colorado Interstate Gas Co., Senior Unsecured Notes
6.80%	11/15/15		35		36,392
Consolidated Natural Gas, Inc., Senior Debentures
5.00%	03/01/14		20		19,290
Kern River Funding Corp., Senior Unsecured Notes
4.89%(b)	04/30/18		28		26,910
Newfield Exploration Co., Senior Subordinated Notes
6.62%	09/14-04/16		250		249,400
Targa Resources, Inc., Senior Unsecured Notes
8.50%(b)	11/01/13		10		10,075
					398,694
Pharmaceuticals — 0.1%
Bristol-Myers Squibb Co., Senior Debentures
6.88%	08/01/47		25		26,640
Bristol-Myers Squibb Co., Unsecured Notes
5.88%	11/15/36		250		247,288
Merck & Co., Inc., Senior Unsecured Notes
4.38%	02/15/13		410		389,231
					663,159
Real Estate — 0.1%
The Rouse Co., Senior Unsecured Notes
6.75%(b)	05/01/13		375		376,594
The Rouse Co., Unsecured Notes
3.62%	03/15/09		400		378,586
					755,180
Telecommunications — 0.5%
American Tower Corp., Senior Subordinated Notes
7.25%	12/01/11		450		465,750
American Tower Corp., Senior Unsecured Notes
7.50%	05/01/12		800		828,000
Cincinnati Bell, Inc., Senior Unsecured Notes
7.25%	07/15/13		520		538,200
Citizens Communications Co., Senior Unsecured Notes
7.88%(b)	01/15/27		150		151,500
Qwest Corp., Senior Unsecured Notes
7.88%	09/01/11		100		106,500
Qwest Corp., Unsecured Notes
8.61%(i)	06/15/13		75		81,187
SBC Communications, Inc., Unsecured Notes
4.21%(b)	06/05/21		1,125		1,118,869
Superior Essex Communications & Essex Group, Senior Notes
9.00%	04/15/12		425		442,000
Verizon Maryland, Inc., Debentures
5.12%	06/15/33		10		8,204
Wind Acquistion Finance SA (Luxembourg), Senior Unsecured Notes
10.75%(b)	12/01/15		115		130,812
					3,871,022

61

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
CORPORATE BONDS (Continued)
Yankee — 1.5%
AID-Israel (Israel), Unsecured Notes
5.50%(n)	04/24-09/33	$	185	$	192,590
Ainsworth Lumber Co. Ltd. (Canada), Senior Unsecured Notes
9.12%(e)(i)(n)	10/01/10		400		338,000
America Movil SA de CV (Mexico), Unsecured Notes
6.38%(n)	03/01/35		75		73,173
Banco Central de la Republica Dominicana (Dominican Republic), Unsecured Notes
9.04%(n)	01/23/18		33		37,544
Banque Centrale de Tunisie (Tunisia), Senior Unsecured Notes
7.38%(n)	04/25/12		425		460,275
ConocoPhillips Funding Co. (Australia), Unsecured Notes
5.47%(i)(n)	04/09/09		1,485		1,486,182
Deutsche Telekom International Finance BV (Netherlands), Senior Unsecured Notes
8.25%(n)	06/15/30		265		325,775
Domtar, Inc. (Canada), Senior Unsecured Notes
7.12%(n)	08/15/15		100		98,000
Eksportfinans ASA (Norway), Unsecured Notes
3.38%(n)	01/15/08		155		152,012
Ipsco, Inc. (Canada), Senior Notes
8.75%(n)	06/01/13		450		482,063
Ispat Inland ULC (Canada), Senior Secured Notes
9.75%(n)	04/01/14		10		11,175
Kazkommerts International BV (Netherlands), Notes
8.00%(n)	11/03/15		360		371,376
Norske Skog Canada Ltd. (Canada), Senior Unsecured Notes
8.62%(n)	06/15/11		50		50,625
OR-ICB SA (Luxembourg), Senior Secured Notes
6.88%(n)	07/29/08		100		101,540
Republic of Argentina Bonds
8.28%(n)	12/31/33		264		286,787
Republic of Argentina, Notes
0.00%(i)(n)	08/03/12		720		522,720
Republic of Brazil Bonds
8.00%(n)	01/15/18		330		366,960
11.00%(n)	08/17/40		295		390,875
Republic of Brazil, Unsecured Notes
10.25%(n)	06/17/13		50		61,750
Republic of Colombia Bonds
8.12%(n)	05/21/24		85		98,175
Republic of Colombia, Unsecured Notes
7.38%(n)	01/27/17		100		107,500
Republic of Ecuador Bonds
9.00%(i)(n)	08/15/30		50		37,000
Republic of Panama, Senior Unsecured Notes
9.38%(n)	07/23/12		200		234,500
Republic of Panama, Unsecured Notes
7.12%(n)	01/29/26		170		183,600
Republic of Peru, Unsecured Notes
9.88%(n)	02/06/15		350		442,050
8.38%(n)	05/03/16		30		35,625
8.75%(n)	11/21/33		135		177,525
Republic of Philippines, Senior Unsecured Notes
9.00%(n)	02/15/13		370		427,350
Republic of Philippines, Unsecured Notes
8.25%(n)	01/15/14		370		417,638
Republic of Turkey Bonds
8.00%(n)	02/14/34		70		76,388
Republic of Turkey, Unsecured Notes
6.88%(n)	03/17/36		100		95,500
Republic of Venezuela Bonds
9.25%(n)	09/15/27		90		114,750
Republic of Venezuela, Unsecured Notes
8.50%(n)	10/08/14		200		226,300
7.65%(n)	04/21/25		60		65,460
Rogers Wireless, Inc. (Canada), Senior Secured Notes
9.62%(n)	05/01/11		550		624,250
7.50%(n)	03/15/15		550		596,750
Suncor Energy, Inc. (Canada)
5.95%(n)	12/01/34		20		20,121
Swedish Export Credit Corp. (Sweden), Unsecured Notes
2.88%(n)	01/26/07		75		74,894
Telecom Italia Capital (Luxembourg), Senior Unsecured Notes
4.95%(n)	09/30/14		475		440,060
7.20%(n)	07/18/36		175		182,826
Telefonica Emisiones Sau (Spain), Senior Unsecured Notes
6.42%(n)	06/20/16		150		154,743
7.04%(n)	06/20/36		150		159,325
United Mexican States (Mexico), Senior Unsecured Notes
8.00%(n)	09/24/22		500		611,000
8.30%(n)	08/15/31		25		31,962
United Mexican States (Mexico), Unsecured Bonds
11.50%(n)	05/15/26		25		40,438
Vale Overseas Ltd. (Brazil), Unsecured Notes
6.88%(n)	11/21/36		220		225,642

62

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)			VALUE
CORPORATE BONDS (Continued)
Yankee (Continued)
Vodafone Group PLC (United Kingdom), Senior Unsecured Notes
7.75%(n)	02/15/10	$	125		$	133,210
VTB Capital SA (Luxembourg), Unsecured Notes
7.50%(n)	10/12/11		110			116,900
						11,960,904
TOTAL CORPORATE BONDS
(Cost $38,869,823)						39,109,366
FOREIGN BONDS — 0.1%
Gazprom Capital (Luxembourg), Unsecured Notes (EUR)
5.88%(b)	06/01/15		250			346,482
Mexican Fixed Rate Bonds (MXP)
9.00%	12/22/11		710			70,494
8.00%	12/19/13		1,630			156,171
Republic of El Salvador, Unsecured Notes (USD)
7.65%(b)	06/15/35		55			62,425
Russian Federation, Unsecured Notes (USD)
12.75%(b)	06/24/28		120			217,200
Ukraine Government, Unsecured Notes (USD)
6.58%(b)	11/21/16		100			100,000
TOTAL FOREIGN BONDS
(Cost $917,516)						952,772
TAXABLE MUNICIPAL BONDS — 0.1%
Atlantic Marine Corp. Communities, Notes (Delaware)
5.34%(b)	12/01/45		600			570,342
Ohana Hawaii Military Communities LLC, Military Housing Revenue Bonds (Navy Housing Privatization Project), Series 04-A, Class 1
6.19%	04/01/49		25			26,839
TOTAL TAXABLE MUNICIPAL BONDS
(Cost $625,000)						597,181
SHORT TERM INVESTMENTS — 9.5%
Alpine Securitization Corp.
5.22%	02/05/07		2,800			2,784,728
Atlantis One Funding Corp
5.24%	02/14/07		10,000			9,931,928
BankAmerica Corp.
5.25%	02/01/07		1,600			1,592,174
Barton Capital Corp.
5.26%	01/08/07		5,400			5,392,899
5.30%	01/12/07		5,606			5,595,271
Beta Finance, Inc.
5.24%	01/05/07		4,250			4,246,228
5.25%	01/29/07		1,200			1,194,662
Cafcl LLC
5.25%	01/16/07		3,600			3,590,926
Ciesco LP
5.25%	01/25/07		7,709			7,679,291
Citigroup, Inc.
5.24%	02/12/07		2,000			1,986,97
CRC Funding LLC
5.25%	01/25/07		10,000			9,961,462
Federal Home Loan Bank, Discount Notes
4.80%(o)	01/02/07		3,000			2,998,800
Greyhawk Funding LLC
5.26%	02/20/07		800			793,826
Silver Tower U.S. Funding LLC
5.26%	01/10/07		4,000			3,993,464
Sydney Capital Corp.
5.25%	01/12/07		3,000			2,994,221
Victory Receivables Corp.
5.30%	01/08/07		5,000			4,993,375
Galileo Money Market Fund			4,909			4,909,087
TOTAL SHORT TERM INVESTMENTS
(Cost $74,642,723)						74,639,320
		NUMBER OF CONTRACTS
CALL OPTIONS PURCHASED — 0.0%
U.S. Dollar versus Canadian Dollar, Strike Rate 1.120%, Expires 03/29/07			881,000			33,693
U.S. Dollar versus Canadian Dollar, Strike Rate 1.145%, Expires 03/29/07			2,575,000			55,414
U.S. Dollar versus Canadian Dollar, Strike Rate 1.145%, Expires 03/29/07			1,514,000			32,581
U.S. Dollar versus Canadian Dollar, Strike Rate 1.155%, Expires 03/29/07			779,000			12,644
TOTAL CALL OPTIONS PURCHASED
(Cost $65,845)						134,332
CALL SWAPTIONS PURCHASED — 0.0%
Barclays Capital, Strike Rate 5.520%, Expires 09/19/16
(Cost $146,184)			240	(p)		142,864
PUT OPTIONS PURCHASED — 0.0%
March 10 year U.S. Treasury Notes futures, Strike Price $106, Expires 02/23/07
(Cost $6,800)			18			8,719
PUT SWAPTIONS PURCHASED — 0.0%
Barclays Capital, Strike Rate 5.400%, Expires 03/12/07			2,130	(p)		13,976
Barclays Capital, Strike Rate 5.520%, Expires 09/21/15			240	(p)		131,507
Barclays Capital, Strike Rate 5.900%, Expires 03/12/07			2,130	(p)		418
Citibank, Strike Rate -0.020%, Expires 06/01/07			3,580	(p)		36,998
TOTAL PUT SWAPTIONS PURCHASED
(Cost $201,279)						182,899

63

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)					VALUE
TOTAL MARKET VALUE OF SECURITIES BEFORE SECURITIES LENDING COLLATERAL AND AFFILIATED INVESTMENTS — 102.6%
(Cost $696,524,284)					$	804,999,681
	MATURITY	PAR/SHARES (000)
SECURITIES LENDING COLLATERAL — 2.1%
Bank of America Corp., Master Notes
5.38%(i)(q)	01/02/07	$	5,684			5,684,070
The Bear Stearns Cos., Inc., Variable Rate Commercial Paper
5.38%(i)(q)	01/02/07		3,566			3,566,335
Citigroup, Inc., Master Notes
5.38%(i)(q)	01/02/07		1,873			1,873,101
Morgan Stanley, Variable Rate Commercial Paper
5.37%(i)(q)	01/02/07		5,467			5,466,560
TOTAL SECURITIES LENDING COLLATERAL
(Cost $16,590,066)						16,590,066
AFFILIATED INVESTMENTS—SHORT TERM — 9.3%
Institutional Money Market Trust(q)
(Cost $72,822,246)			72,822			72,822,246
TOTAL INVESTMENTS IN SECURITIES — 114.0%
(Cost $785,936,596(a))						894,411,993
MORTGAGE PASS-THROUGH TBA SALE COMMITMENTS — (2.3)%
Federal Home Loan Mortgage Corp. Gold 15 Year TBA
4.50%	01/01/22		(300	)		(289,031	)
5.00%	01/01/22		(1,000	)		(982,188	)
Federal National Mortgage Assoc. 15 Year TBA
5.00%	01/01/22		(4,200	)		(4,127,810	)
5.50%	01/01/22		(3,000	)		(2,999,064	)
Federal National Mortgage Assoc. 30 Year TBA
5.00%	01/01/37		(4,000	)		(3,861,248	)
5.50%	01/01/37		(5,700	)		(5,632,313	)
TOTAL MORTGAGE PASS-THROUGH TBA SALE COMMITMENTS
(Premiums received $18,048,465)						(17,891,654	)
CALL OPTIONS WRITTEN — 0.0%
U.S. Dollar versus Canadian Dollar, Strike Rate 1.120%, Expires 03/29/07
(Premiums received $17,532)			(881,000	)		(33,693	)
CALL SWAPTIONS WRITTEN — 0.0%
Barclays Capital, Strike Rate 5.140%, Expires 04/21/08			(320	)(p)		(71,903	)
Chase Securities, Strike Rate 5.485%, Expires 10/26/09			(140	)(p)		(59,360	)
Citibank, Strike Rate 5.670%, Expires 01/04/10			(50	)(p)		(24,711	)
Union Bank, Strike Rate 4.730%, Expires 06/13/07			(790	)(p)		(26,623	)
TOTAL CALL SWAPTIONS WRITTEN
(Premiums received $ 524,920)						(182,597	)
PUT SWAPTIONS WRITTEN — (0.1)%
Barclays Capital, Strike Rate 5.140%, Expires 04/21/08			(320	)(p)		(86,464	)
Barclays Capital, Strike Rate 5.650%, Expires 03/12/07			(4,260	)(p)		(6,220	)
Chase Securities, Strike Rate 5.485%, Expires 10/26/09			(140	)(p)		(40,628	)
Citibank, Strike Rate 5.670%, Expires 01/04/10			(50	)(p)		(12,788	)
Union Bank, Strike Rate 4.730%, Expires 06/13/07			(790	)(p)		(298,225	)
TOTAL PUT SWAPTIONS WRITTEN
(Premiums received $541,960)						(444,325	)
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL — (11.4)%						(89,412,312	)
LIABILITIES IN EXCESS OF OTHER ASSETS — (0.2)%						(1,803,285	)
NET ASSETS — 100.0%					$	784,644,127

(a) Cost for federal income tax purposes is $790,065,467. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	110,857,882
Gross unrealized depreciation		(6,511,356	)
	$	104,346,526

64

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ASSET ALLOCATION PORTFOLIO (CONCLUDED)

(b) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. As of December 31, 2006, the Portfolio held 1.8% of its net assets, with a current market value of $14,169,940 in securities restricted as to resale.

(c) Security valued at fair value as determined in good faith by or under the direction of the Board of Trustees. As of December 31, 2006, these securities had a total market value of $1,016,594 which represents 0.1% of net assets.

(d) Non-income producing security.

(e) Total or partial security on loan.

(f) Security restricted as to public resale. These securities are ineligible for resale into the public market until such time that either (i) a resale Registration Statement has been filed with the SEC and declared effective or (ii) resale is permitted under Rule 144A without the need for an effective registration statement. As of Decem-ber 31, 2006, the Portfolio held 0.2% of its net assets, with a current market value of $1,456,128 and an original cost of $1,000,469 in these securities.

(g) Security is illiquid. As of December 31, 2006, the Portfolio held less than 0.1% of its net assets, with a current market value of $866,827 in these securities.

(h) Rates shown are the effective yields as of December 31, 2006.

(i) Variable rate security. Rates shown are the rates as of December 31, 2006.

(j) Par held at end of period is less than 500.

(k) Interest rate of underlying collateral.

(l) The security is a perpetual bond and has no stated maturity date.

(m) Security, or a portion thereof, pledged as collateral with a value of $180,706 on 165 long U.S. Treasury Note futures contracts, 441 short U.S. Treasury Note futures contracts, 150 long U.S. Treasury Bond futures contracts, 31 long DAX index futures contracts, 33 long S&P 500 index futures contracts, 15 long TOPIX index futures contracts expiring March 2007, 35 short Eurodollar futures contracts expiring June 2007 and 79 short Eurodollar futures contracts expiring December 2007. The value of such contracts on December 31, 2006 was $124,540,708 with an unrealized gain of $236,970 (including commissions of $2,366).

(n) Security is a foreign domiciled issuer which is registered with the Securities and Exchange Commission.

(o) The rate shown is the effective yield at the time of purchase.

(p) Each swaption contract is equivalent to $10,000 notional amount.

(q) Security purchased with the cash proceeds from securities loaned.

65

BLACKROCK FUNDS

	KEY TO INVESTMENT ABBREVIATIONS
ADR	American Depository Receipts
IO	Interest Only
LP	Limited Partnership
PLC	Public Limited Company
PO	Principal Only
REIT	Real Estate Investment Trust
TBA	To Be Announced

66

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INDEX EQUITY PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED)	VALUE
Investment in The U.S. Large Company Series of The DFA Investment Trust Company — 100.2%
(Cost $468,917,706)	$	1,112,718,764
LIABILITIES IN EXCESS OF OTHER ASSETS — (0.2)%		(2,209,623	)
NET ASSETS — 100%	$	1,110,509,141

1

THE U.S. LARGE COMPANY SERIES

SCHEDULE OF INVESTMENTS

December 31, 2006

(Unaudited)

		Shares	Value †
COMMON STOCKS — (83.1%)
Consumer Discretionary — (8.8%)
* #	Amazon.com, Inc.	120,188	$	4,742,618
* #	Apollo Group, Inc. Class A	54,443		2,121,644
*	AutoNation, Inc.	58,193		1,240,675
*	Autozone, Inc.	19,695		2,275,954
*	Bed Bath and Beyond, Inc.	109,970		4,189,857
#	Best Buy Co., Inc.	156,939		7,719,829
* #	Big Lots, Inc.	42,596		976,300
	Black & Decker Corp.	26,464		2,116,326
	Brunswick Corp.	35,716		1,139,340
#	Carnival Corp.	173,114		8,491,242
	CBS Corp. Class B	304,037		9,479,874
	Centex Corp.	46,174		2,598,211
#	Circuit City Stores, Inc.	55,196		1,047,620
	Clear Channel Communications, Inc.	192,102		6,827,305
*	Coach, Inc.	142,960		6,141,562
*	Comcast Corp. Class A	809,632		34,271,723
	Darden Restaurants, Inc.	57,120		2,294,510
#	Dillards, Inc. Class A	23,683		828,195
#	Disney (Walt) Co.	804,695		27,576,898
#	Dollar General Corp.	121,390		1,949,523
#	Dow Jones & Co., Inc.	25,313		961,894
#	Eastman Kodak Co.	111,766		2,883,563
#	Family Dollar Stores, Inc.	58,990		1,730,177
	Federated Department Stores, Inc.	204,306		7,790,188
	Ford Motor Co.	734,840		5,518,648
#	Fortune Brands, Inc.	58,893		5,028,873
	Gannett Co., Inc.	91,156		5,511,292
	Gap, Inc.	204,982		3,997,149
#	General Motors Corp.	220,040		6,759,629
#	Genuine Parts Co.	66,292		3,144,230
*	Goodyear Tire & Rubber Co.	69,044		1,449,234
#	H&R Block, Inc.	125,386		2,888,893
	Harley-Davidson, Inc.	100,811		7,104,151
	Harman International Industries, Inc.	25,390		2,536,715
	Harrah’s Entertainment, Inc.	72,367		5,986,198
	Hasbro, Inc.	61,789		1,683,750
#	Hilton Hotels Corp.	150,404		5,249,100
	Home Depot, Inc.	793,964		31,885,594
	Horton (D.R.), Inc.	107,362		2,844,019
* #	IAC/InterActiveCorp	86,830		3,226,603
	International Game Technology	132,040		6,100,248
* #	Interpublic Group of Companies, Inc.	171,634		2,100,800
	Johnson Controls, Inc.	76,167		6,544,269
	Jones Apparel Group, Inc.	42,891		1,433,846
#	KB Home	30,552		1,566,707
*	Kohl’s Corp.	127,221		8,705,733
	Leggett & Platt, Inc.	69,632		1,664,205
	Lennar Corp. Class A	53,633		2,813,587
	Limited Brands, Inc.	133,060		3,850,756
	Liz Claiborne, Inc.	39,871		1,732,794
#	Lowe’s Companies, Inc.	592,412		18,453,634
#	Marriott International, Inc. Class A	130,746		6,239,199
	Mattel, Inc.	148,379		3,362,268
	McDonald’s Corp.	481,134		21,328,670
	McGraw-Hill Companies, Inc.	137,795		9,372,816

	Meredith Corp.	15,069	849,138
	Newell Rubbermaid, Inc.	107,839	3,121,939
	News Corp. Class A	910,607	19,559,838
	NIKE, Inc. Class B	73,149	7,243,945
	Nordstrom, Inc.	88,997	4,391,112
* #	Office Depot, Inc.	108,309	4,134,155
	OfficeMax, Inc.	28,973	1,438,509
	Omnicom Group, Inc.	66,485	6,950,342
	Penney (J.C.) Co., Inc.	87,524	6,770,857
#	Pulte Homes, Inc.	82,203	2,722,563
	RadioShack Corp.	52,839	886,638
	Scripps (E.W.) Co.	32,415	1,618,805
*	Sears Holdings Corp.	32,331	5,429,345
	Sherwin-Williams Co.	43,533	2,767,828
	Snap-On, Inc.	22,710	1,081,904
	Staples, Inc.	281,126	7,506,064
* #	Starbucks Corp.	294,134	10,418,226
	Starwood Hotels & Resorts Worldwide, Inc.	82,475	5,154,687
	Target Corp.	334,134	19,062,345
*	The DIRECTV Group, Inc.	299,887	7,479,182
#	The New York Times Co. Class A	55,938	1,362,650
	The Stanley Works	31,629	1,590,622
#	The TJX Companies, Inc.	177,048	5,042,327
	Tiffany & Co.	52,654	2,066,143
	Time Warner, Inc.	1,553,154	33,827,694
#	Tribune Co.	74,167	2,282,860
*	Univision Communications, Inc. Class A	98,139	3,476,083
#	V.F. Corp.	34,784	2,855,071
*	Viacom, Inc. Class B	272,037	11,161,678
	Wendy’s International, Inc.	37,189	1,230,584
#	Whirlpool Corp.	30,492	2,531,446
*	Wyndham Worldwide Corp.	77,082	2,468,166
	Yum! Brands, Inc.	103,123	6,063,632
Total Consumer Discretionary			526,025,016
Consumer Staples — (7.7%)
#	Altria Group, Inc.	815,364	69,974,538
	Anheuser-Busch Companies, Inc.	299,095	14,715,474
	Archer-Daniels-Midland Co.	255,689	8,171,820
#	Avon Products, Inc.	172,943	5,714,037
#	Brown-Forman Corp. Class B	30,644	2,029,859
#	Campbell Soup Co.	84,728	3,295,072
	Clorox Co.	59,061	3,788,763
#	Coca-Cola Co.	793,276	38,275,567
	Coca-Cola Enterprises, Inc.	107,821	2,201,705
	Colgate-Palmolive Co.	200,086	13,053,611
#	ConAgra, Inc.	198,227	5,352,129
* #	Constellation Brands, Inc. Class A	81,728	2,371,747
	Costco Wholesale Corp.	178,280	9,425,664
#	CVS Corp.	320,394	9,903,379
*	Dean Foods Co.	52,036	2,200,082
#	Estee Lauder Companies, Inc.	49,542	2,022,304
	General Mills, Inc.	133,466	7,687,642
	Heinz (H.J.) Co.	128,179	5,769,337
	Kellogg Co.	97,628	4,887,258
	Kimberly-Clark Corp.	178,295	12,115,145
	McCormick & Co., Inc.	51,122	1,971,264
#	Molson Coors Brewing Co.	17,789	1,359,791
	Pepsi Bottling Group, Inc.	53,253	1,646,050
#	PepsiCo, Inc.	638,821	39,958,254
	Procter & Gamble Co.	1,232,746	79,228,585
#	Reynolds American, Inc.	66,698	4,366,718
#	Safeway, Inc.	172,457	5,960,114
	Sara Lee Corp.	290,540	4,947,896
	Supervalu, Inc.	80,093	2,863,325
#	Sysco Corp.	240,471	8,839,714
#	The Hershey Co.	67,644	3,368,671

	The Kroger Co.	279,101	6,438,860
#	Tyson Foods, Inc. Class A	98,020	1,612,429
	UST, Inc.	62,593	3,642,913
	Walgreen Co.	390,370	17,914,079
#	Wal-Mart Stores, Inc.	956,681	44,179,529
#	Whole Foods Market, Inc.	55,605	2,609,543
#	Wrigley (Wm.) Jr. Co.	85,396	4,416,681
Total Consumer Staples			458,279,549
Energy — (8.2%)
	Anadarko Petroleum Corp.	178,855	7,783,770
	Apache Corp.	128,152	8,523,390
	Baker Hughes, Inc.	124,777	9,315,851
#	BJ Services Co.	114,044	3,343,770
#	Chesapeake Energy Corp.	161,799	4,700,261
#	Chevron Corp.	848,083	62,359,543
	ConocoPhillips	640,257	46,066,491
#	CONSOL Energy, Inc.	71,044	2,282,644
	Devon Energy Corp.	171,952	11,534,540
#	El Paso Corp.	274,419	4,193,122
	EOG Resources, Inc.	94,718	5,915,139
	Exxon Mobil Corp.	2,269,024	173,875,309
	Halliburton Co.	391,175	12,145,984
	Hess Corp.	105,319	5,220,663
	Kinder Morgan, Inc.	41,723	4,412,207
	Marathon Oil Corp.	136,752	12,649,560
#	Murphy Oil Corp.	72,771	3,700,405
* #	Nabors Industries, Ltd.	116,455	3,468,030
*	National-Oilwell, Inc.	68,275	4,177,064
	Noble Corp.	52,744	4,016,456
#	Occidental Petroleum Corp.	335,164	16,366,058
	Peabody Energy Corp.	102,632	4,147,359
#	Rowan Companies, Inc.	42,963	1,426,372
	Schlumberger, Ltd.	458,363	28,950,207
#	Smith International, Inc.	77,569	3,185,759
	Sunoco, Inc.	47,896	2,986,795
#	The Williams Companies, Inc.	231,994	6,059,683
*	Transocean, Inc.	113,752	9,201,399
	Valero Energy Corp.	235,215	12,033,599
*	Weatherford International, Ltd.	132,158	5,522,883
#	XTO Energy, Inc.	142,356	6,697,850
Total Energy			486,262,163
Financials — (17.5%)
	Ace, Ltd.	126,651	7,671,251
#	AFLAC, Inc.	192,377	8,849,342
	Allstate Corp.	243,122	15,829,673
	AMBAC Financial Group, Inc.	41,273	3,676,186
#	American Express Co.	468,695	28,435,726
	American International Group, Inc.	1,011,374	72,475,061
	Ameriprise Financial, Inc.	94,131	5,130,139
#	AON Corp.	120,473	4,257,516
	Bank of America Corp.	1,747,021	93,273,451
	Bank of New York Co., Inc.	297,296	11,704,544
	BB&T Corp.	210,440	9,244,629
	Bear Stearns Companies, Inc.	45,637	7,428,791
	Capital One Financial Corp.	158,718	12,192,717
#	Chicago Mercantile Exchange Holdings, Inc.	13,544	6,904,054
	Chubb Corp.	160,143	8,473,166
	Cincinnati Financial Corp.	67,399	3,053,849
	CIT Group, Inc.	77,144	4,302,321
#	Citigroup, Inc.	1,911,573	106,474,616
#	Comerica, Inc.	61,799	3,626,365
#	Commerce Bancorp, Inc.	72,957	2,573,193
#	Compass Bancshares, Inc.	50,508	3,012,802
	Countrywide Financial Corp.	241,618	10,256,684
*	E*TRADE Financial Corp.	166,097	3,723,895

	Federal Home Loan Mortgage Corporation	269,599	18,305,772
	Federal National Mortgage Association	379,326	22,528,171
	Federated Investors, Inc.	35,140	1,187,029
#	Fifth Third Bancorp	217,105	8,886,108
#	First Horizon National Corp.	48,421	2,023,029
	Franklin Resources, Inc.	64,852	7,144,745
#	Genworth Financial, Inc.	172,420	5,898,488
	Hartford Financial Services Group, Inc.	123,299	11,505,030
	Huntington Bancshares, Inc.	92,446	2,195,592
	Janus Capital Group, Inc.	77,102	1,664,632
#	JPMorgan Chase & Co.	1,349,535	65,182,540
	KeyCorp	156,227	5,941,313
#	Legg Mason, Inc.	51,125	4,859,431
	Lehman Brothers Holdings, Inc.	206,209	16,109,047
	Lincoln National Corp.	111,703	7,417,079
	Loews Corp.	177,768	7,372,039
#	M&T Bank Corp.	30,137	3,681,536
#	Marsh & McLennan Companies, Inc.	214,404	6,573,627
#	Marshall & Ilsley Corp.	99,245	4,774,677
#	MBIA, Inc.	52,445	3,831,632
#	Mellon Financial Corp.	160,227	6,753,568
	Merrill Lynch & Co., Inc.	343,892	32,016,345
	MetLife, Inc.	295,755	17,452,503
	MGIC Investment Corp.	32,296	2,019,792
	Moody’s Corp.	91,434	6,314,432
	Morgan Stanley	411,812	33,533,851
#	National City Corp.	245,700	8,982,792
#	Northern Trust Corp.	72,932	4,426,243
	PNC Financial Services Group	114,302	8,462,920
	Principal Financial Group, Inc.	104,946	6,160,330
	Progressive Corp.	296,320	7,176,870
	Prudential Financial, Inc.	185,568	15,932,868
	Regions Financial Corp.	283,634	10,607,912
	SAFECO Corp.	40,947	2,561,235
	Schwab (Charles) Corp.	397,923	7,695,831
	SLM Corp.	159,020	7,755,405
	Sovereign Bancorp, Inc.	139,822	3,550,081
	State Street Corp.	129,187	8,712,371
#	SunTrust Banks, Inc.	137,772	11,634,845
	Synovus Financial Corp.	126,428	3,897,775
	T. Rowe Price Group, Inc.	102,563	4,489,183
#	The Goldman Sachs Group, Inc.	165,662	33,024,720
	The St. Paul Travelers Companies, Inc.	268,439	14,412,490
	Torchmark Corp.	38,154	2,432,699
	U.S. Bancorp	683,863	24,749,002
	UnumProvident Corp.	133,259	2,769,122
#	Wachovia Corp.	741,505	42,228,710
#	Washington Mutual, Inc.	367,721	16,727,628
#	Wells Fargo & Co.	1,313,358	46,703,010
	XL Capital, Ltd.	70,248	5,059,261
	Zions Bancorporation	41,597	3,429,257
Total Financials			1,041,324,539
Health Care — (10.0%)
	Abbott Laboratories	597,111	29,085,277
	Aetna, Inc.	203,074	8,768,735
#	Allergan, Inc.	59,815	7,162,248
	AmerisourceBergen Corp.	74,728	3,359,771
*	Amgen, Inc.	453,812	30,999,898
	Applera Corp. - Applied Biosystems Group	71,272	2,614,970
	Bard (C.R.), Inc.	40,063	3,324,027
*	Barr Laboratories, Inc.	41,388	2,074,367
#	Bausch & Lomb, Inc.	20,917	1,088,939
	Baxter International, Inc.	254,604	11,811,080
	Becton Dickinson & Co.	95,949	6,730,822
* #	Biogen Idec, Inc.	131,153	6,451,416
	Biomet, Inc.	95,281	3,932,247

*	Boston Scientific Corp.	458,734	7,881,050
	Bristol-Myers Squibb Co.	765,120	20,137,958
#	Cardinal Health, Inc.	157,562	10,151,720
	Caremark Rx, Inc.	165,905	9,474,835
* #	Celgene Corp.	144,891	8,335,579
	Cigna Corp.	39,902	5,249,906
*	Coventry Health Care, Inc.	61,994	3,102,800
#	Eli Lilly & Co.	382,994	19,953,987
*	Express Scripts, Inc.	52,689	3,772,532
* #	Forest Laboratories, Inc.	123,215	6,234,679
*	Genzyme Corp.	102,259	6,297,109
*	Gilead Sciences, Inc.	178,887	11,615,133
	Health Management Associates, Inc.	93,585	1,975,579
* #	Hospira, Inc.	60,615	2,035,452
* #	Humana, Inc.	64,668	3,576,787
	IMS Health, Inc.	77,199	2,121,429
#	Johnson & Johnson	1,127,941	74,466,665
*	King Pharmaceuticals, Inc.	94,579	1,505,698
* #	Laboratory Corp. of America Holdings	48,784	3,584,160
	Manor Care, Inc.	28,769	1,349,841
	McKesson Corp.	115,141	5,837,649
*	Medco Health Solutions, Inc.	114,152	6,100,283
* #	Medimmune, Inc.	93,059	3,012,320
	Medtronic, Inc.	447,827	23,963,223
#	Merck & Co., Inc.	844,589	36,824,080
* #	Millipore Corp.	20,776	1,383,682
	Mylan Laboratories, Inc.	82,440	1,645,502
* #	Patterson Companies, Inc.	54,057	1,919,564
	PerkinElmer, Inc.	47,838	1,063,439
#	Pfizer, Inc.	2,805,093	72,651,909
	Quest Diagnostics, Inc.	62,224	3,297,872
	Schering-Plough Corp.	576,767	13,634,772
*	St. Jude Medical, Inc.	137,510	5,027,366
#	Stryker Corp.	115,632	6,372,480
*	Tenet Healthcare Corp.	183,357	1,277,998
* #	Thermo Fisher Scientific, Inc.	158,757	7,190,105
	UnitedHealth Group, Inc.	524,024	28,155,810
*	Waters Corp.	39,480	1,933,336
*	Watson Pharmaceuticals, Inc.	39,863	1,037,634
*	WellPoint, Inc.	241,207	18,980,579
	Wyeth	523,908	26,677,395
* #	Zimmer Holdings, Inc.	92,842	7,276,956
Total Health Care			595,490,650
Industrials — (9.0%)
	3M Co.	286,469	22,324,529
*	Allied Waste Industries, Inc.	98,781	1,214,018
	American Power Conversion Corp.	65,764	2,011,721
	American Standard Companies, Inc.	67,483	3,094,096
	Avery Dennison Corp.	36,725	2,494,729
	Boeing Co.	307,621	27,329,050
	Burlington Northern Santa Fe Corp.	139,742	10,314,357
	Caterpillar, Inc.	253,078	15,521,274
#	Cintas Corp.	53,093	2,108,323
	Cooper Industries, Ltd.	35,366	3,198,147
	CSX Corp.	169,299	5,828,965
	Cummins, Inc.	20,400	2,410,872
#	Danaher Corp.	92,202	6,679,113
	Deere & Co.	89,943	8,550,881
	Donnelley (R.R.) & Sons Co.	84,342	2,997,515
	Dover Corp.	79,425	3,893,413
	Eaton Corp.	57,965	4,355,490
	Emerson Electric Co.	312,146	13,756,274
	Equifax, Inc.	48,678	1,976,327
#	FedEx Corp.	119,290	12,957,280
	Fluor Corp.	34,251	2,796,594
	General Dynamics Corp.	157,419	11,704,103

	General Electric Co.	4,010,180	149,218,798
	Goodrich (B.F.) Co.	48,536	2,210,815
	Honeywell International, Inc.	317,648	14,370,396
#	Illinois Tool Works, Inc.	163,194	7,537,931
	Ingersoll-Rand Co., Ltd. Class A	119,279	4,667,387
	ITT Industries, Inc.	71,853	4,082,687
	L-3 Communications Holdings, Inc.	48,603	3,974,753
	Lockheed Martin Corp.	138,523	12,753,813
#	Masco Corp.	153,356	4,580,744
*	Monster Worldwide, Inc.	49,939	2,329,155
	Norfolk Southern Corp.	154,403	7,764,927
	Northrop Grumman Corp.	134,376	9,097,255
	Paccar, Inc.	96,601	6,269,405
	Pall Corp.	47,622	1,645,340
#	Parker Hannifin Corp.	45,875	3,526,870
	Pitney Bowes, Inc.	86,318	3,987,028
	Raytheon Co.	172,975	9,133,080
	Robert Half International, Inc.	65,193	2,419,964
	Rockwell Automation, Inc.	66,202	4,043,618
	Rockwell Collins, Inc.	65,047	4,116,825
	Ryder System, Inc.	23,625	1,206,292
	Southwest Airlines Co.	308,048	4,719,295
* #	Terex Corp.	39,560	2,554,785
	Textron, Inc.	48,802	4,576,164
	Tyco International, Ltd.	773,727	23,521,301
	Union Pacific Corp.	104,929	9,655,567
	United Parcel Service, Inc.	417,642	31,314,797
	United Technologies Corp.	390,452	24,411,059
#	W.W. Grainger, Inc.	28,450	1,989,793
#	Waste Management, Inc.	208,137	7,653,197
Total Industrials			536,850,112
Information Technology — (12.6%)
*	ADC Telecommunications, Inc.	45,606	662,655
* #	Adobe Systems, Inc.	226,939	9,331,732
*	Advanced Micro Devices, Inc.	213,425	4,343,199
*	Affiliated Computer Services, Inc. Class A	46,128	2,252,892
*	Agilent Technologies, Inc.	158,989	5,540,767
* #	Altera Corp.	140,772	2,770,393
#	Analog Devices, Inc.	133,048	4,373,288
*	Apple Computer, Inc.	330,874	28,071,350
#	Applied Materials, Inc.	540,332	9,969,125
*	Autodesk, Inc.	90,138	3,646,983
	Automatic Data Processing, Inc.	214,203	10,549,498
*	Avaya, Inc.	176,661	2,469,721
*	BMC Software, Inc.	79,786	2,569,109
*	Broadcom Corp.	182,439	5,894,604
	CA, Inc.	159,774	3,618,881
* #	Ciena Corp.	32,849	910,246
* #	Cisco Sytems, Inc.	2,362,481	64,566,606
*	Citrix Systems, Inc.	70,253	1,900,344
*	Cognizant Technology Solutions Corp.	55,162	4,256,300
*	Computer Sciences Corp.	66,804	3,565,329
*	Compuware Corp.	137,031	1,141,468
* #	Comverse Technology, Inc.	78,586	1,658,950
*	Convergys Corp.	53,604	1,274,703
*	Corning, Inc.	608,563	11,386,214
* #	Dell, Inc.	883,730	22,172,786
* #	eBay, Inc.	450,152	13,536,071
* #	Electronic Arts, Inc.	120,014	6,043,905
	Electronic Data Systems Corp.	201,216	5,543,501
* #	EMC Corp.	856,804	11,309,813
	Fidelity National Information Services, Inc.	62,977	2,524,748
#	First Data Corp.	297,919	7,602,893
*	Fiserv, Inc.	67,370	3,531,535
* #	Google, Inc.	83,373	38,391,599
	Hewlett-Packard Co.	1,065,542	43,889,675

#	Intel Corp.	2,243,158	45,423,949
#	International Business Machines Corp.	586,019	56,931,746
*	Intuit, Inc.	135,638	4,138,315
	Jabil Circuit, Inc.	71,850	1,763,917
* #	JDS Uniphase Corp.	82,119	1,368,103
* #	Juniper Networks, Inc.	220,094	4,168,580
#	KLA-Tencor Corp.	77,450	3,853,138
*	Lexmark International, Inc.	38,097	2,788,700
	Linear Technology Corp.	116,302	3,526,277
* #	LSI Logic Corp.	155,852	1,402,668
	Maxim Integrated Products, Inc.	124,758	3,820,090
*	Micron Technology, Inc.	293,489	4,097,106
#	Microsoft Corp.	3,365,439	100,492,009
#	Molex, Inc.	55,153	1,744,489
	Motorola, Inc.	940,471	19,336,084
#	National Semiconductor Corp.	112,260	2,548,302
*	NCR Corp.	69,325	2,964,337
* #	Network Appliance, Inc.	145,435	5,712,687
*	Novell, Inc.	131,886	817,693
* #	Novellus Systems, Inc.	48,085	1,655,086
* #	Nvidia Corp.	138,318	5,119,149
* #	Oracle Corp.	1,556,328	26,675,462
*	Parametric Technology Corp.	43,434	782,681
	Paychex, Inc.	131,719	5,208,169
* #	PMC-Sierra, Inc.	81,625	547,704
*	QLogic Corp.	61,328	1,344,310
#	Qualcomm, Inc.	642,895	24,295,002
	Sabre Holdings Corp.	51,498	1,642,271
* #	Sandisk Corp.	87,546	3,767,104
*	Sanmina-SCI Corp.	207,288	715,144
*	Solectron Corp.	355,793	1,145,653
*	Sun Microsystems, Inc.	1,369,220	7,421,172
*	Symantec Corp.	364,918	7,608,540
	Symbol Technologies, Inc.	99,101	1,480,569
	Tektronix, Inc.	32,090	936,065
*	Tellabs, Inc.	171,868	1,763,366
* #	Teradyne, Inc.	73,830	1,104,497
	Texas Instruments, Inc.	577,278	16,625,606
*	Unisys Corp.	134,051	1,050,960
*	VeriSign, Inc.	95,366	2,293,552
	Western Union Co.	298,175	6,685,084
*	Xerox Corp.	375,523	6,365,115
	Xilinx, Inc.	130,806	3,114,491
* #	Yahoo!, Inc.	476,251	12,163,451
Total Information Technology			749,679,276
Materials — (2.5%)
	Air Products & Chemicals, Inc.	85,718	6,024,261
	Alcoa, Inc.	337,329	10,123,243
#	Allegheny Technologies, Inc.	39,184	3,553,205
	Ashland, Inc.	22,241	1,538,632
	Ball Corp.	40,531	1,767,152
	Bemis Co., Inc.	40,784	1,385,840
	Dow Chemical Co.	371,600	14,841,704
#	DuPont (E.I.) de Nemours & Co., Inc.	357,833	17,430,045
	Eastman Chemical Co.	32,011	1,898,572
	Ecolab, Inc.	69,371	3,135,569
#	Freeport-McMoRan Copper & Gold, Inc. Class B	76,611	4,269,531
*	Hercules, Inc.	44,178	853,077
	International Flavors & Fragrances, Inc.	30,355	1,492,252
	International Paper Co.	176,997	6,035,598
	MeadWestavco Corp.	70,487	2,118,839
	Monsanto Co.	211,361	11,102,793
	Newmont Mining Corp.	175,150	7,908,023
#	Nucor Corp.	117,532	6,424,299
*	Pactiv Corp.	51,767	1,847,564
	Phelps Dodge Corp.	79,358	9,500,740

	PPG Industries, Inc.	64,292	4,128,189
	Praxair, Inc.	125,618	7,452,916
	Rohm & Haas Co.	55,234	2,823,562
	Sealed Air Corp.	31,363	2,036,086
	Sigma-Aldrich Corp.	25,652	1,993,673
#	Temple-Inland, Inc.	41,620	1,915,769
	United States Steel Corp.	46,090	3,371,023
#	Vulcan Materials Co.	36,733	3,301,195
	Weyerhaeuser Co.	92,018	6,501,072
Total Materials			146,774,424
Real Estate Investment Trusts — (1.0%)
#	Apartment Investment & Management Co. Class A	37,537	2,102,823
#	Archstone-Smith Trust	84,956	4,945,289
#	Boston Properties, Inc.	45,448	5,084,722
*	CB Richard Ellis Group, Inc.	71,884	2,386,549
	Equity Office Properties Trust	136,739	6,586,718
#	Equity Residential	113,649	5,767,687
	Kimco Realty Corp.	87,931	3,952,498
	Plum Creek Timber Co., Inc.	68,872	2,744,549
	ProLogis	96,264	5,849,963
#	Public Storage, Inc.	47,666	4,647,435
*	Realogy Corp.	83,399	2,528,658
#	Simon Property Group, Inc.	86,088	8,719,854
	Vornado Realty Trust	50,234	6,103,431
Total Real Estate Investment Trusts			61,420,176
Telecommunication Services — (2.9%)
	Alltel Corp.	145,354	8,791,010
#	AT&T, Inc.	1,495,011	53,446,643
#	BellSouth Corp.	709,620	33,430,198
	CenturyTel, Inc.	44,655	1,949,637
	Citizens Communications Co.	125,227	1,799,512
	Embarq Corp.	58,156	3,056,679
* #	Qwest Communications International, Inc.	625,593	5,236,213
#	Sprint Nextel Corp.	1,126,210	21,274,107
	Verizon Communications, Inc.	1,135,784	42,296,596
	Windstream Corp.	185,481	2,637,540
Total Telecommunication Services			173,918,135
Utilities — (2.9%)
*	AES Corp.	258,390	5,694,916
*	Allegheny Energy, Inc.	64,292	2,951,646
#	Ameren Corp.	80,242	4,311,403
	American Electric Power Co., Inc.	153,890	6,552,636
#	CenterPoint Energy, Inc.	121,704	2,017,852
* #	CMS Energy Corp.	86,534	1,445,118
#	Consolidated Edison, Inc.	99,901	4,802,241
	Constellation Energy Group	70,028	4,822,828
	Dominion Resources, Inc.	137,607	11,536,971
#	DTE Energy Co.	69,234	3,351,618
#	Duke Energy Corp.	488,517	16,223,650
*	Dynegy, Inc.	148,930	1,078,253
	Edison International	126,750	5,764,590
	Entergy Corp.	80,475	7,429,452
	Exelon Corp.	261,022	16,154,652
#	FirstEnergy Corp.	124,181	7,476,938
#	FPL Group, Inc.	157,264	8,558,307
	KeySpan Corp.	68,190	2,808,064
	Nicor, Inc.	17,393	813,992
#	NiSource, Inc.	106,207	2,559,589
#	Peoples Energy Corp.	14,966	667,035
	PG&E Corp.	135,698	6,422,586
#	Pinnacle West Capital Corp.	38,844	1,967,060
	PPL Corp.	148,441	5,320,125
	Progress Energy, Inc.	98,891	4,853,570

	Public Service Enterprise Group, Inc.	98,115	6,512,874
	Questar Corp.	33,404	2,774,202
	Sempra Energy	101,993	5,708,548
#	Southern Co.	288,949	10,650,660
	TECO Energy, Inc.	81,385	1,402,264
	TXU Corp.	178,659	9,685,104
#	Xcel Energy, Inc.	158,290	3,650,167
Total Utilities			175,968,911
TOTAL COMMON STOCKS			4,951,992,951
		Face Amount
		(000)
TEMPORARY CASH INVESTMENTS - (1.2%)
	Repurchase Agreement, PNC Capital Markets, Inc. 5.19%, 01/02/07 (Collateralized by $76,043,000 FHLMC 5.82%, 06/01/36, valued at $72,745,344) to be repurchased at $71,711,330	$71,670	71,670,000
TEMPORARY CASH INVESTMENTS PURCHASED WITH SECURITIES LENDING COLLATERAL - (15.7%)
@	Repurchase Agreement, Deutsche Bank Securities, Inc. 5.30%, 01/02/07 (Collateralized by $814,526,401 FNMA, rates ranging from 3.500% to 9.500%, maturities ranging from 10/01/08 to 12/01/36, valued at $355,640,366) to be repurchased at $345,485,242	345,282	345,281,909
@	Repurchase Agreement, Morgan Stanley 5.25%, 01/02/07 (Collateralized by $113,778,791 FHLMC, rates ranging from 5.000% to 6.500%, maturities ranging from 12/01/21 to 10/01/36 & FNMA, rates ranging from 4.456%(r) to 6.500%, maturities ranging from 05/01/18 to 11/01/36, valued at $99,068,137) to be repurchased at $96,210,557	96,154	96,154,467
@	Repurchase Agreement, Morgan Stanley 5.30%, 01/02/07 (Collateralized by $585,967,769 FHLMC, rates ranging from 5.000% to 6.500%, maturities ranging from 12/01/21 to 10/01/36 & FNMA, rates ranging from 4.456%(r) to 6.500%, maturities ranging from 05/01/18 to 11/01/36, valued at $510,206,996) to be repurchased at $495,666,509	495,375	495,374,788
TOTAL TEMPORARY CASH INVESTMENTS PURCHASED WITH SECURITIES LENDING COLLATERAL			936,811,164
TOTAL INVESTMENTS - (100.0%) (Cost $4,275,226,587) ††			$5,960,474,115

† See Security Valuation Note.

* Non-Income Producing Securities.

# Total or Partial Securities on Loan.

@ Security purchased with cash proceeds from Securities on Loan.

(r) The adjustable rate shown is effective as of December 31, 2006.

†† The cost for federal income tax purposes is $4,441,085,161.

Investment Abbreviations

FHLMC Federal Home Loan Mortgage Corporation

FNMA Federal National Mortgage Association

Organizational Note:

The DFA Investment Trust Company (the “Trust”) is an open-end management investment company registered under the Investment Company Act of 1940. At December 31, 2006, the Trust consisted of twenty-one investment portfolios, of which The U.S. Large Company Series is presented in this filing.

Security Valuation Note:

Securities held by The U.S. Large Company Series which are listed on a securities exchange and for which market quotations are readily available are valued at the last quoted sale price of the day. Securities held by The U.S. Large Company Series that are listed on NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). If there is no last reported sale price or NOCP for the day, The U.S. Large Company Series value the securities at the mean of the most recent quoted bid and asked prices. Price information on listed securities is taken from the exchange where the security is primarily traded. Securities for which no market quotations are readily available (including restricted securities), or for which market quotations have become unreliable, are valued in good faith at fair value in accordance with procedures adopted by the Board of Trustees. Fair value pricing may also be used if events that have significant effect on the value of an investment (as determined in the discretion on the Investment Committee of the Advisor) occur before the net asset value is calculated. When fair value pricing is used, the prices of securities used by The U.S. Large Company Series may differ from the quoted or published prices for the same securities on their primary markets or exchanges.

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

BLACKROCK EXCHANGE PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
COMMON STOCKS — 99.9%
Aerospace — 6.2%
The Boeing Co.	131,800	$	11,709,112
General Dynamics Corp.(b)	93,000		6,914,550
			18,623,662
Banks — 2.0%
J.P. Morgan Chase & Co.	124,728		6,024,362
Beverages & Bottling — 4.6%
Anheuser-Busch Cos., Inc.	192,315		9,461,898
The Coca-Cola Co.	87,735		4,233,214
			13,695,112
Computer & Office Equipment — 8.6%
Dell, Inc.(b)(c)	97,483		2,445,848
Hewlett-Packard Co.	349,270		14,386,431
International Business Machines Corp.	92,371		8,973,843
			25,806,122
Computer Software & Services — 5.9%
First Data Corp.	266,480		6,800,570
Microsoft Corp.	367,277		10,966,891
			17,767,461
Conglomerates — 4.5%
Berkshire Hathaway, Inc. - Class B(b)(c)	3,687		13,516,542
Electronics — 0.8%
Agilent Technologies, Inc.(c)	29,749		1,036,752
Intel Corp.	70,215		1,421,854
			2,458,606
Finance — 13.1%
American Express Co.	305,626		18,542,329
Ameriprise Financial, Inc.	61,125		3,331,313
SLM Corp.	233,200		11,373,164
Western Union Co.	266,480		5,974,482
			39,221,288
Food & Agriculture — 0.2%
General Mills, Inc.	8,497		489,427
Insurance — 2.3%
American International Group, Inc.	94,900		6,800,534
Machinery & Heavy Equipment — 2.5%
Caterpillar, Inc.	124,256		7,620,621
Manufacturing — 4.0%
General Electric Co.	317,848		11,827,124
Medical & Medical Services — 3.0%
Millipore Corp.(b)(c)	135,965		9,055,269
Medical Instruments & Supplies — 3.8%
Johnson & Johnson	124,195		8,199,354
Medtronic, Inc.(b)	60,000		3,210,600
			11,409,954
Oil & Gas — 14.5%
BP PLC - ADR	116,846		7,840,366
Exxon Mobil Corp.	275,462		21,108,653
Schlumberger Ltd.(b)	203,600		12,859,376
Transocean, Inc.(c)	21,148		1,710,662
			43,519,057
Pharmaceuticals — 8.7%
AstraZeneca PLC(b)	76,000		4,069,800
Merck & Co., Inc.	83,999		3,662,357
Novartis AG - ADR	169,030		9,709,083
Pfizer, Inc.	89,719		2,323,722
Wyeth	125,465		6,388,678
			26,153,640
Retail Merchandising — 7.1%
Target Corp.	248,429		14,172,874
Wal-Mart Stores, Inc.	154,700		7,144,046
			21,316,920
Soaps & Cosmetics — 5.3%
The Procter & Gamble Co.	246,400		15,836,128
Telecommunications — 0.6%
Vodafone Group PLC - ADR	64,452		1,790,477
Tobacco — 2.2%
Altria Group, Inc.	77,000		6,608,140
TOTAL COMMON STOCKS
(Cost $74,857,437)			299,540,446
SHORT TERM INVESTMENTS — 0.1%
Galileo Money Market Fund
(Cost $22,417)	22,417		22,417
TOTAL MARKET VALUE OF SECURITIES BEFORE SECURITIES LENDING COLLATERAL AND AFFILIATED INVESTMENTS — 100.0%
(Cost $74,879,854)			299,562,863

	MATURITY	PAR /SHARES (000)
SECURITIES LENDING COLLATERAL — 4.1%
Bank of America Corp., Master Notes 5.38%(d)(e)	01/02/07	$	10,265	10,264,809
Citigroup, Inc., Master Notes 5.38%(d)(e)	01/02/07		1,900	1,899,832
TOTAL SECURITIES LENDING COLLATERAL
(Cost $12,164,641)				12,164,641

	NUMBER OF SHARES
AFFILIATED INVESTMENTS - SHORT TERM — 13.4%
Institutional Money Market Trust(e)
(Cost $40,310,931)	40,310,931		40,310,931
TOTAL INVESTMENTS IN SECURITIES — 117.5%
(Cost $127,355,426(a))			352,038,435
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL — (17.5)%			(52,475,572	)
OTHER ASSETS IN EXCESS OF LIABILITIES — 0.0%			132,809
NET ASSETS — 100.0%		$	299,695,672

1

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

BLACKROCK EXCHANGE PORTFOLIO (CONCLUDED)

(a) Cost for federal income tax purposes is $122,248,830. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	231,194,148
Gross unrealized depreciation		(1,404,543	)
	$	229,789,605

(b) Total or partial security on loan.

(c) Non-income producing security.

(d) Variable rate security. Rates shown are the rates as of December 31, 2006.

(e) Security purchased with the cash proceeds from securities loaned.

	KEY TO INVESTMENT ABBREVIATIONS
ADR	American Depository Receipts
PLC	Public Limited Co.

2

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

CONSERVATIVE PREPARED PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
AFFILIATED INVESTMENT COMPANIES — 99.8%
Equity Funds — 40.2%
BlackRock Basic Value Fund, Inc.	144	$	4,823
BlackRock EuroFund	74		1,622
BlackRock Funds —
BlackRock All Cap Global Resources Portfolio	108		1,600
BlackRock Capital Appreciation Portfolio (formerly BlackRock Legacy Portfolio)	311		4,825
BlackRock Small Cap Core Equity Portfolio	164		3,216
BlackRock Global Dynamic Equity Fund	522		6,463
BlackRock Large Cap Series Funds, Inc. —
BlackRock Large Cap Core Fund	450		6,427
BlackRock Latin American Fund, Inc.	31		1,657
BlackRock Pacific Fund, Inc.	56		1,614
			32,247
Fixed Income Funds — 59.6%
BlackRock Funds —
BlackRock Total Return Portfolio	4,734		47,858
TOTAL AFFILIATED INVESTMENTS IN SECURITIES — 99.8%
(Cost $80,000(a))			80,105
OTHER ASSETS IN EXCESS OF LIABILITIES — 0.2%			148
NET ASSETS — 100.0%		$	80,253

(a) Also for federal income tax purposes. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	247
Gross unrealized depreciation		(142	)
	$	105

1

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

MODERATE PREPARED PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
AFFILIATED INVESTMENT COMPANIES — 99.9%
Equity Funds — 60.2%
BlackRock Basic Value Fund, Inc.	217	$	7,235
BlackRock EuroFund	111		2,432
BlackRock Funds —
BlackRock All Cap Global Resources Portfolio	161		2,400
BlackRock Capital Appreciation Portfolio (formerly BlackRock Legacy Portfolio)	467		7,237
BlackRock Small Cap Core Equity Portfolio	246		4,825
BlackRock Global Dynamic Equity Fund	784		9,694
BlackRock Large Cap Series Funds, Inc. —
BlackRock Large Cap Core Fund	676		9,640
BlackRock Latin American Fund, Inc.	46		2,485
BlackRock Pacific Fund, Inc.	83		2,422
			48,370
Fixed Income Funds — 39.7%
BlackRock Funds —
BlackRock High Yield Bond Portfolio	296		2,412
BlackRock International Bond Portfolio	215		2,402
BlackRock Total Return Portfolio	2,682		27,120
			31,934
TOTAL AFFILIATED INVESTMENTS IN SECURITIES — 99.9%
(Cost $80,000(a))			80,304
OTHER ASSETS IN EXCESS OF LIABILITIES — 0.1%			109
NET ASSETS — 100.0%		$	80,413

(a) Also for federal income tax purposes. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	384
Gross unrealized depreciation		(80	)
	$	304

2

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

GROWTH PREPARED PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
AFFILIATED INVESTMENT COMPANIES — 99.9%
Equity Funds — 80.1%
BlackRock Basic Value Fund, Inc.	289	$	9,646
BlackRock EuroFund	148		3,243
BlackRock Funds —
BlackRock All Cap Global Resources Portfolio	215		3,200
BlackRock Capital Appreciation Portfolio (formerly BlackRock Legacy Portfolio)	623		9,650
BlackRock Small Cap Core Equity Portfolio	328		6,433
BlackRock Global Dynamic Equity Fund	1,045		12,925
BlackRock Large Cap Series Funds, Inc. —
BlackRock Large Cap Core Fund	901		12,854
BlackRock Latin American Fund, Inc.	61		3,314
BlackRock Pacific Fund, Inc.	111		3,229
			64,494
Fixed Income Funds — 19.8%
BlackRock Funds —
BlackRock High Yield Bond Portfolio	296		2,412
BlackRock International Bond Portfolio	215		2,402
BlackRock Total Return Portfolio	1,105		11,167
			15,981
TOTAL AFFILIATED INVESTMENTS IN SECURITIES — 99.9%
(Cost $80,000(a))			80,475
OTHER ASSETS IN EXCESS OF LIABILITIES — 0.1%			74
NET ASSETS — 100.0%		$	80,549

(a) Also for federal income tax purposes. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	508
Gross unrealized depreciation		(33	)
	$	475

3

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

AGGRESSIVE GROWTH PREPARED PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF SHARES	VALUE
AFFILIATED INVESTMENT COMPANIES — 99.9%
Equity Funds — 99.9%
BlackRock Basic Value Fund, Inc.	361	$	12,058
BlackRock EuroFund	185		4,054
BlackRock Funds —
BlackRock All Cap Global Resources Portfolio	269		4,000
BlackRock Capital Appreciation Portfolio (formerly BlackRock Legacy Portfolio)	778		12,062
BlackRock Small Cap Core Equity Portfolio	410		8,041
BlackRock Global Dynamic Equity Fund	1,306		16,157
BlackRock Large Cap Series Funds, Inc. —
BlackRock Large Cap Core Fund	1,126		16,067
BlackRock Latin American Fund, Inc.	77		4,142
BlackRock Pacific Fund, Inc.	139		4,036
			80,617
TOTAL AFFILIATED INVESTMENTS IN SECURITIES — 99.9%
(Cost $80,000(a))			80,617
OTHER ASSETS IN EXCESS OF LIABILITIES — 0.1%			45
NET ASSETS — 100.0%		$	80,662

(a) Also for federal income tax purposes. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$  617
Gross unrealized depreciation	—
	$  617

4

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

MONEY MARKET PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
CERTIFICATES OF DEPOSIT — 7.3%
Domestic — 0.4%
Wells Fargo Bank, N.A. (A-1+, P-1)
4.80%	01/16/07	$	6,500	$	6,500,052
Euro Dollar — 0.9%
Credit Industrial Et Commercial (A-1, P-1)
5.38%(b)	04/30/07		14,920		14,920,000
Yankee — 6.0%
Barclays Bank PLC, New York (A-1+, P-1)
5.31%(b)	01/04/07		50,000		50,000,000
Royal Bank of Scotland, New York (A-1+, P-1)
4.81%(b)	01/16/07		15,270		15,270,000
4.87%(b)	02/02/07		29,600		29,600,000
					94,870,000
TOTAL CERTIFICATES OF DEPOSIT
(Cost $116,290,052)					116,290,052
COMMERCIAL PAPER — 66.0%
Asset Backed Securities — 43.0%
Beta Finance, Inc. (A-1+, P-1)
5.26%	02/20/07		35,000		34,744,549
Cafco LLC (A-1+, P-1)
5.25%	02/05/07		36,000		35,816,250
CC USA, Inc. (A-1+, P-1)
5.26%	01/22/07		30,000		29,907,950
Chariot Funding Corp. (A-1, P-1)
5.28%	03/20/07		55,000		54,370,800
Charta Corp. (A-1, P-1)
5.27%	02/02/07		25,000		24,882,889
CRC Funding LLC (A-1+, P-1)
5.25%	02/05/07		36,000		35,816,250
5.25%	02/07/07		43,420		43,185,713
Dorada Finance, Inc. (A-1+, P-1)
5.26%	01/22/07		10,125		10,093,933
Emerald Certificates (A-1+, P-1)
5.27%	02/15/07		6,445		6,402,544
Erasmus Capital Corp. (A-1+, P-1)
5.37%	01/22/07		5,896		5,877,531
5.37%	01/25/07		19,391		19,321,580
5.29%	03/15/07		2,333		2,307,974
5.30%	03/22/07		16,749		16,551,734
Giro U.S. Funding Corp. (A-1, P-1)
5.26%	01/22/07		15,000		14,953,975
5.26%	02/15/07		60,000		59,605,500
Grampian Funding LLC (A-1+, P-1)
5.25%	02/06/07		53,000		52,721,750
Greyhawk Funding LLC (A-1, P-1)
5.25%	02/02/07		8,227		8,188,607
Lockhart Funding LLC (A-1, P-1)
5.27%	02/13/07		40,000		39,748,211
5.28%	02/14/07		38,000		37,754,773
Mane Funding Corp. (A-1+, P-1)
5.25%	03/14/07		27,431		27,142,974
Sigma Finance, Inc. (A-1+, P-1)
5.25%	02/27/07		29,960		29,710,958
Strand Capital Co. (A-1+, P-1)
5.30%	01/03/07		25,288		25,280,554
Sydney Capital Corp. (A-1+, P-1)
5.26%	02/06/07		24,810		24,679,499
Tango Finance LLC (A-1+, P-1)
5.26%	01/25/07		36,190		36,063,094
Zela Finance, Inc. (A-1+, P-1)
5.27%	02/14/07		10,385		10,318,109
					685,447,701
Banks — 12.7%
Banco Bilbao Vizcara Argentina (A-1, P-1)
5.26%	02/23/07		50,000		49,612,805
5.29%	03/19/07		21,835		21,587,943
Citigroup Funding, Inc. (A-1+, P-1)
5.26%	02/20/07		65,000		64,525,139
Dresdner U.S. Finance, Inc. (A-1, P-1)
5.35%	01/16/07		20,000		19,955,417
Nationwide Building Society (A-1, P-1)
5.25%	01/30/07		37,000		36,843,521
Unicredito Italiano Bank Ireland (A-1, P-1)
5.26%	02/08/07		10,000		9,944,478
					202,469,303
Finance Services — 3.6%
Stadshypotek Delaware (A-1+, P-1)
5.25%	01/25/07		30,000		29,895,000
5.26%	01/29/07		27,435		27,322,867
					57,217,867
Insurance — 2.7%
ING America Institutional Holdings (A-1+, P-1)
5.25%	01/11/07		43,110		43,047,131
Mortgage Bankers & Correspondents — 4.0%
Countrywide Financial Corp. (A-1, P-1)
5.38%	01/02/07		8,103		8,101,790
5.42%	01/02/07		25,000		24,996,236
5.30%	01/12/07		30,000		29,951,417
					63,049,443
TOTAL COMMERCIAL PAPER
(Cost $1,051,231,445)					1,051,231,445
MASTER NOTES — 5.7%
Security Brokers & Dealers — 5.7%
Bank of America Securities LLC (A-1+, P-1)
5.38%(c)	01/02/07		15,250		15,250,000
Morgan Stanley Mortgage Capital, Inc. (A-1, P-1)
5.48%(c)	01/02/07		36,500		36,500,000
5.48%(c)	01/02/07		3,700		3,700,000
5.48%(c)	01/02/07		23,581		23,581,000
5.48%(c)	01/02/07		12,479		12,479,000
TOTAL MASTER NOTES
(Cost $91,510,000)					91,510,000
VARIABLE RATE OBLIGATIONS — 21.2%
Asset Backed Securities — 1.3%
Arkle Master Issuer PLC (AAA, Aaa)
5.33%(c)(d)	01/17/07		4,200		4,200,000

1

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

MONEY MARKET PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
VARIABLE RATE OBLIGATIONS (Continued)
Asset Backed Securities (Continued)
Cullinan Finance Corp. (AAA, Aaa)
5.31%(c)	01/25/07	$	5,000	$	4,999,514
Racers XL (A-1, P-1)
5.37%(c)(d)	01/22/07		11,360		11,360,000
					20,559,514
Banks — 5.6%
HBOS Treasury Services PLC (A-1+, P-1)
5.44%(c)(d)	03/26/07		65,000		65,000,000
Westpac Banking Corp. (AA-, Aa3)
5.39%(c)	03/12/07		24,250		24,250,000
					89,250,000
Life Insurance — 5.3%
MetLife Global Funding I (AA, Aa2)
5.45%(c)(d)	01/29/07		15,000		15,000,000
Principal Life Income Fundings Trust (AA, Aa2)
5.38%(c)	03/07/07		9,400		9,405,216
Transamerica Occidental Life Insurance Co.
(A-1+, P-1)
5.51%(c)(e)	03/01/07		60,000		60,000,000
					84,405,216
Municipal Bonds — 1.5%
De Kalb County Development Authority University RB Series 1995B DN (A-1+, VMIG-1)
5.35%(c)	01/08/07		3,375		3,375,000
North Myrtle Beach Corp. RB Series 2005 DN (National Bank of South Carolina LOC) (A-1, F-1)
5.37%(c)	01/08/07		6,007		6,007,000
South Central Texas IDRB Series 1990 DN (Bank One N.A. LOC) (A-1, P-1)
5.41%(c)	01/08/07		14,800		14,800,000
					24,182,000
Security Brokers & Dealers — 4.6%
Goldman Sachs Group, Inc. (A-1, P-1)
5.43%(c)(d)(e)	01/02/07		34,850		34,850,000
Lehman Brothers Holdings, Inc. (A+, A1)
5.50%(c)	02/15/07		39,200		39,205,903
					74,055,903
Short-Term Business Credit Institutions — 2.9%
General Electric Capital Corp. (AAA, Aaa)
5.48%(c)	01/17/07		45,000		45,000,000
TOTAL VARIABLE RATE OBLIGATIONS
(Cost $337,452,633)					337,452,633
TOTAL INVESTMENTS IN SECURITIES — 100.2%
(Cost $1,596,484,130(a))					1,596,484,130
LIABILITIES IN EXCESS OF OTHER ASSETS — (0.2)%					(2,826,431	)
NET ASSETS — 100.0%				$	1,593,657,699

(a) Aggregate cost for federal income tax purposes.

(b) Security is a foreign domiciled issuer which is registered with the Securities and Exchange Commission.

(c) Rates shown are the rates as of December 31, 2006 and maturities shown are the next interest readjustment date or the date the principal owed can be recovered through demand.

(d) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional investors. As of December 31, 2006, the Portfolio held 8.2% of its net assets, with a current market value of $130,410,000, in securities restricted as to resale.

(e) Illiquid Security. As of December 31, 2006, the Portfolio held 6.0% of its net assets, with a current market value of $94,850,000, in illiquid securities.

2

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

U.S. TREASURY MONEY MARKET PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)	VALUE
REPURCHASE AGREEMENTS — 100.0%
Deutsche Bank Securies, Inc.
5.21%	01/12/07	$100,000	$100,000,000
(Agreement dated 11/14/06 to be repurchased at $100,853,861, collateralized by $364,624,000 U.S. Treasury Strip Principals 4.50% to 6.13% due 11/15/27 to 02/15/36. The value of the collateral is $102,000,040.)
Greenwich Capital Markets, Inc.
4.80%	01/02/07	55,000	55,000,000
(Agreement dated 12/29/06 to be repurchased at $55,029,333, collateralized by $56,653,042 Resolution Funding Corp. Strips and Strip Principals 0.00% to 9.38% due 04/15/07 to 04/15/30. The value of the collateral is $56,653,042.)
J.P. Morgan Securities, Inc.
4.85%	01/02/07	90,000	90,000,000
(Agreement dated 12/29/06 to be repurchased at $90,048,500, collateralized by $91,804,525 U.S. Treasury Notes 4.88% due 04/30/08. The value of the collateral is $91,804,525.)
Lehman Brothers Holdings, Inc.
4.75%	01/02/07	85,000	85,000,000
(Agreement dated 12/29/06 to be repurchased at $85,044,861, collateralized by $86,700,947 U.S. Treasury Notes 3.63% to 4.00% due 05/15/13 to 02/15/14. The value of the collateral is $86,700,947.)
Morgan Stanley & Co., Inc.
4.85%	01/02/07	42,218	42,218,000
(Agreement dated 12/29/06 to be repurchased at $42,240,751, collateralized by $31,133,000 U.S. Treasury Bonds 8.50% due 02/15/20. The value of the collateral is $43,063,572.)
UBS Securities LLC
5.19%	01/08/07	50,000	50,000,000
(Agreement dated 09/27/06 to be repurchased at $50,742,458, collateralized by $111,515,000 U.S. Treasury Strip Principals 7.63% due 11/15/22. The value of the collateral is $51,001,387.)
UBS Securities LLC
5.21%	01/30/07	65,000	65,000,000
(Agreement dated 11/22/06 to be repurchased at $65,649,079, collateralized by $66,303,137 U.S. Treasury Inflation Indexed Securities and Notes 1.88% to 4.75% due 03/31/11 to 07/15/15. The value of the collateral is $66,303,137.)
TOTAL REPURCHASE AGREEMENTS
(Cost $487,218,000)			487,218,000
TOTAL INVESTMENTS IN SECURITIES — 100.0%
(Cost $487,218,000(a))			487,218,000
LIABILITIES IN EXCESS OF OTHER ASSETS — 0.0%			(216,854	)
NET ASSETS — 100.0%			$487,001,146

(a) Aggregate cost for federal income tax purposes.

3

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

MUNICIPAL MONEY MARKET PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS — 99.0%
Alabama — 2.2%
Alabama Housing Financing Authority Single Family Mortgages RB Series 2006H AMT DN (Bayerische Landesbank Girozentrale Guaranty Insurance Co.) (Aa2)
4.07%(b)	01/08/07	$	3,000	$	3,000,000
Alexander City Industrial Board IDRB (Precision Millwork Project) Series 2000 AMT DN (Wachovia Bank N.A. LOC)
4.02%(b)	01/08/07		905		905,000
Geneva County Health Care Authority RB Series 2001 DN (Wachovia Bank N.A. LOC)
3.97%(b)	01/08/07		2,833		2,833,000
					6,738,000
Alaska — 0.7%
Valdez Marine Terminal RB (Phillips Transportation, Inc. Project) Series 2002 DN (ConocoPhillips Co. Guaranty) (A-2, VMIG-1)
3.77%(b)	01/08/07		2,230		2,230,000
Arizona — 4.6%
Arizona School District COP Series 2006 TAN (SP-1+, MIG-1)
4.50%	07/30/07		385		386,953
Tierra Antigua Arizona Project Revenue Bond Certificates RB Series 2006-1 AMT DN (AIG Retirement Services, Inc. Liquidity Facilities)
4.16%(b)(c)	01/08/07		7,777		7,777,000
Yavapai County IDA RB (Yavapia Regional Medical Center Project) Series 1997B DN (FSA Insurance, Dexia Credit Local SBPA) (VMIG-1)
3.91%(b)	01/08/07		5,900		5,900,000
					14,063,953
Arkansas — 0.8%
Little Rock Residential Housing & Public Facilities Board Capital Improvement RB (Park Systems Project) Series 2001 DN (Bank of America N.A. LOC) (A-1+)
4.01%(b)	01/08/07		2,345		2,345,000
California — 1.1%
California PCRB Solid Waste Disposal RB (Republic Services, Inc. Project) Series 2003 AMT DN (Republic Services, Inc. Guaranty) (A-2)
4.15%(b)	01/08/07		3,000		3,000,000
Sacramento Municipal Utility District RB Series 2000A DN (AMBAC Insurance, Bank of New York SBPA) (VMIG-1)
3.93%(b)(c)	01/08/07		300		300,000
					3,300,000
Colorado — 3.2%
Colorado Highway Authority RB (E-470 Project) Series 2006Z-9 DN (MBIA Insurance, The Goldman Sachs Group, Inc. Liquidity Facility) (AAA, F-1+)
3.97%(b)(c)	01/08/07		2,966		2,966,000
Lower Colorado River Authority RB (Wachovia Merlots Trust Receipts) Series 2000 DN (FSA Insurance, Wachovia Bank N.A. SBPA) (Aaa, VMIG-1)
3.95%(b)(c)	01/08/07		1,900		1,900,000
Regional Transportation District Sales Tax RB (Citibank Eagle Trust Receipts) Series 2006A-0128 DN (AMBAC Insurance, Citibank N.A. LOC) (A-1+)
3.96%(b)(c)	01/08/07		3,000		3,000,000
Sterling Park Colorado Project Revenue Bond Certificates RB Series 2006-6 AMT DN (AIG Retirement Services, Inc. Liquidity Facilities)
4.16%(b)	01/08/07		1,817		1,817,000
					9,683,000
Delaware — 2.9%
Delaware Economic Development Authority RB (Catholic Diocese of Wilmington Project) Series 2002 DN (Allied Irish Bank PLC LOC) (VMIG-1)
4.00%(b)	01/08/07		6,915		6,915,000
Delaware Economic Development Authority RB (St. Anne’s Episcopal School Project) Series 2001 DN (Wilmington Trust Co. LOC) (A-1)
4.00%(b)	01/08/07		1,970		1,970,000
					8,885,000
District of Columbia — 2.7%
District of Columbia Ballpark RB (Royal Bank of Cananda Municipal Products, Inc. Trust Receipts) Series 2006I-5 DN (FGIC Insurance, Royal Bank of Canada Liquidity Facility) (A-1+)
3.95%(b)(c)	01/08/07		8,380		8,380,000
Florida — 7.2%
Greater Orlando Aviation Authority RB (Special Purpose Cessna Aircraft Project) Series 2001 AMT DN (Textron, Inc. Guaranty) (A-2, P-1)
5.02%(b)	01/08/07		3,400		3,400,000
Hillsborough County RB (Florida Health Science Center Project) Series 2006 ROC-RR-II- R-646CE DN (Citibank N.A. Guaranty, Citibank N.A. Liquidity Facility) (VMIG-1)
3.95%(b)(c)	01/08/07		3,400		3,400,000

4

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS (Continued)
Florida (Continued)
Lee County IDRB (Raymond Building Supply Corp. Project) Series 1997 AMT DN (SunTrust Bank LOC)
4.06%(b)	01/08/07	$	1,245	$	1,245,000
Miami Dade County Expressway Toll RB Series 2006-1004 DN (AMBAC Insurance, Bank of New York SBPA) (A-1+)
3.94%(b)	01/08/07		7,000		7,000,000
Palm Beach Municipal Commerical Paper Series 2006 MB (A-1+, P-1)
3.60%	02/14/07		2,400		2,400,000
Putnam County Development Authority PCRB (Seminole Electric Co-op Project) Series 1984D DN (National Rural Utilities LOC) (A-1)
3.53%(b)	01/08/07		2,000		2,000,000
Putnam County Development Authority PCRB (Seminole Electric Co-op Project) Series 1984H-3 DN (National Rural Utilities LOC) (A-1, P-1)
3.55%(b)	03/15/07		2,500		2,500,000
					21,945,000
Illinois — 7.6%
Flora RB (Heritage Woods Project) Series 2001 AMT DN (LaSalle Bank N.A. LOC) (A-1)
4.10%(b)	01/08/07		2,750		2,750,000
Harvard Multi-Family Housing RB (Northfield Court Project) Series 1999 AMT DN (Fifth Third Bank N.A. LOC) (A-1+)
4.07%(b)	01/08/07		7,350		7,350,000
Metropolitan Pier & Exposition Authority Dedicated State Tax Receipts RB Series 2005Z-5 DN (MBIA Insurance, The Goldman Sachs Group, Inc. Liquidity Facility) (F-1+)
3.97%(b)(c)	01/08/07		2,310		2,310,000
Metropolitan Pier & Exposition Authority RB Putters Series 2006-1508 DN (MBIA Insurance, J.P. Morgan Chase & Co. Liquidity Facility) (A-1+)
3.97%(b)(c)	01/08/07		3,480		3,480,000
Quad Cities Regional Economic Development Authority RB (Whitey’s Ice Cream Manufacturing Project) Series 1995 AMT DN (Bank One N.A. LOC)
4.30%(b)	01/08/07		575		575,000
Rockford RB (Fairhaven Christian Center Project) Series 2000 DN (J.P. Morgan Chase & Co. LOC)
4.15%(b)	01/08/07		1,510		1,510,000
Roselle Village IDRB (Abrasive-Form, Inc. Project) Series 1995 AMT DN (ABN-AMRO Bank N.V. LOC)
4.06%(b)	01/08/07		1,000		1,000,000
University of Illinois RB (Citibank Eagle Trust Receipts) Series 2006A-0124 DN (MBIA Insurance, Citibank N.A. LOC) (A-1+)
3.96%(b)(c)	01/08/07		4,300		4,300,000
					23,275,000
Indiana — 4.5%
Dekko Foundation Educational Facilities RB Series 2001 DN (Bank One N.A. LOC)
4.15%(b)	01/08/07		2,300		2,300,000
Elkhart County Industrial Hospital Authority RB (Oaklawn Center Project) Series 2006 DN (Citizens Financial Group LOC) (A-1+)
3.96%(b)	01/08/07		3,385		3,385,000
Hendricks County Industrial Redevelopment Commission Tax Increment RB (Heartland Crossing Project) Series 2000A DN (Huntington National Bank LOC)
4.05%(b)	01/08/07		2,100		2,100,000
Indiana Board Bank RB (Interim Advanced Funding Program) Series 2007 RAN
3.65%	02/01/07		2,000		2,000,000
Indiana Housing and Community Development Authority Single Family Mortgages RB Series 2006E-2 AMT RAN (Rabobank Guaranty Insurance Co.) (MIG-1, F-1+)
3.62%	12/20/07		2,500		2,500,000
Indiana Transportation Finance Authority Highway RB Series 2004B-21 DN (FGIC Insurance, Wachovia Bank N.A. SBPA) (A-1+, AAA)
3.95%(b)(c)	01/08/07		100		100,000
Monroe County IDRB (Griner Engineering, Inc. Project) Series 1997 AMT DN (Fifth Third Bank N.A. LOC)
4.13%(b)	01/08/07		520		520,000
South Bend Economic Development Authority RB (SGW Realty LLC Project) Series 1998 DN (Fifth Third Bank N.A. LOC)
4.09%(b)	01/08/07		750		750,000
					13,655,000
Iowa — 1.1%
Iowa GO Series 2006 TRAN (SP-1+, MIG-1)
4.25%	06/29/07		2,500		2,508,673
Urbandale IDRB (Meredith Drive Assoc. Project) Series 1985 DN (Wells Fargo Bank N.A. LOC)
4.03%(b)	01/08/07		1,000		1,000,000
					3,508,673

5

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS (Continued)
Kentucky — 1.2%
Louisville & Jefferson Counties Metropolitan Government Health System RB (Norton Healthcare, Inc. Project) Series 2006 ROC-RR-II-651CE DN (Citibank N.A. Guaranty, Citibank N.A. Liquidity Facility) (VMIG-1)
3.95%(b)(c)	01/08/07	$	365	$	365,000
Newport Industrial Building RB (Newport Holdings Project) Series 2001A AMT DN (Huntington National Bank LOC)
4.20%(b)	01/08/07		1,600		1,600,000
Pulaski County Solid Waste Disposal RB (National Rural Utilities for East Kentucky Power Project) Series 1993B AMT DN (National Rural Utilities Guaranty) (VMIG-1)
3.68%(b)	02/15/07		1,650		1,650,000
					3,615,000
Louisiana — 0.6%
Louisiana GO (Wachovia Merlots Trust Receipts) Series 2006C-04 DN (FSA Insurance, Bank of New York SBPA) (A-1+)
3.95%(b)(c)	01/08/07		2,000		2,000,000
Maryland — 6.4%
Baltimore County RB (Odyssey School Facility Project) Series 2001 DN (M&T Bank Corp. LOC) (A-1)
3.99%(b)	01/08/07		2,000		2,000,000
Baltimore County RB (St. Paul’s School for Girls Facility Project) Series 2000 DN (M&T Bank Corp. LOC) (A-1)
3.96%(b)	01/08/07		1,490		1,490,000
Howard County RB (Glenelg Country School Project) Series 2001 DN (Mercantile Safe & Deposit Trust Co. LOC) (A-1)
3.93%(b)	01/08/07		1,230		1,230,000
Maryland Economic Development Corp. RB (American Health Assistance Foundation Facility Project) Series 2001 DN (M&T Bank Corp. LOC) (A-1)
3.99%(b)	01/08/07		2,260		2,260,000
Maryland Economic Development Corp. RB (Assoc. of Catholic Charities Project) Series 1999A DN (M&T Bank Corp. LOC) (A-1)
3.94%(b)	01/08/07		2,265		2,265,000
Maryland Economic Development Corp. RB (Assoc. of Catholic Charities Project) Series 1999B DN (M&T Bank Corp. LOC) (A-1)
3.94%(b)	01/08/07		1,350		1,350,000
Maryland Economic Development Corp. RB (Associated Catholic, Inc. Project) Series 2002 DN (M&T Bank Corp. LOC) (VMIG-1)
3.94%(b)	01/08/07		1,900		1,900,000
Maryland Health & Higher Education Facilities Authority RB (Adventist Healthcare Project) Series 2003B DN (M&T Bank Corp. LOC) (VMIG-1)
3.92%(b)	01/08/07		6,070		6,070,000
Maryland Stadium Authority Lease RB (Baltimore Convention Project) Series 2006 DN (Bank of New York SBPA) (VMIG-1)
3.90%(b)	01/08/07		1,000		1,000,000
					19,565,000
Massachusetts — 0.9%
Commonwealth of Massachusetts GO (Wachovia Merlots Trust Receipts) Series 2002A-9 DN (FSA Insurance, Wachovia Bank N.A. SBPA) (A-1)
3.94%(b)(c)	01/08/07		1,485		1,485,000
Melrose GO Series 2006 BAN (SP-1+, MIG-1)
4.35%	08/09/07		1,355		1,360,593
					2,845,593
Michigan — 5.6%
Detroit Economic Development Corp. RB (E.H. Assoc. Ltd. Project) Series 2002 DN (First Federal Bank of Northern Michigan LOC)
3.99%(b)	01/08/07		2,975		2,975,000
Detroit Sewer Authority RB (Royal Bank of Canada Municipal Products, Inc. Trust Receipts) Series 2006I-2 DN (FSA Insurance, Royal Bank of Canada LOC) (VMIG-1)
3.96%(b)(c)	01/08/07		2,500		2,500,000
Michigan Building Authority Municipal Securities Trust Certificates RB Series 2006A-283 DN (FGIC Insurance, Bear Stearns Capital Markets Liquidity Facility) (VMIG1)
3.96%(b)(c)	01/08/07		3,065		3,065,000
Michigan Strategic Fund GO (Dow Chemical Co. Project) Series 2006 TECP
3.70%	01/10/07		1,000		1,000,000
Michigan Strategic Fund Limited Obligation RB (Horizons of Michigan Project) Series 2001 DN (Huntington National Bank LOC)
4.11%(b)	01/08/07		1,365		1,365,000

6

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS (Continued)
Michigan (Continued)
Michigan Strategic Fund Limited Obligation RB (Surefil Properties LLC Project) Series 2006 AMT DN (Huntington National Bank LOC)
4.15%(b)	01/08/07	$	4,300	$	4,300,000
Wayne St. University Michigan RB (Munitops Trust Certificates) Series 2006-61 DN (AMBAC Insurance, ABN-AMRO Bank N.V. SBPA) (F-1+)
3.95%(b)(c)	01/08/07		2,000		2,000,000
					17,205,000
Mississippi — 1.2%
Mississippi Development Bank Special Obligation RB (Correctional Facilities Project) Series 2002 DN (AMBAC Insurance, Amsouth Bank of Alabama SBPA) (A-1)
4.01%(b)	01/08/07		3,575		3,575,000
Missouri — 3.9%
Bi-State Development Agency Metropolitan District RB (Metrolink Cross County Project) Series 2002A DN (FSA Insurance, WestLB AG SBPA) (A-1+, VMIG-1)
3.93%(b)	01/08/07		5,200		5,200,000
Missouri Health and Education Facilities Authority RB (St. Louis University Project) Series 2006A DN (MBIA Insurance, Bank of New York SBPA) (A-1+, VMIG-1)
3.95%(b)	01/02/07		2,100		2,100,000
St. Charles County IDA RB (Trinity Manufacturing LLC Project) Series 2006 AMT DN (Marshall & Ilsley Bank LOC) (A-1)
4.01%(b)	01/08/07		300		300,000
Taney County IDRB (Keeter Heights Project) Series 2006 AMT DN (U.S. Bank N.A. LOC) (A-1+)
4.05%(b)	01/08/07		4,500		4,500,000
					12,100,000
Nevada — 1.3%
Clark County Airport RB (Munitops Trust Certificates) Series 2005-56 DN (AMBAC Insurance, ABN-AMRO Bank N.V. SBPA) (F-1+, AAA)
3.69%(b)(c)	05/24/07		1,000		1,000,000
Clark County Economic Development RB (Lutheran Secondary School Assoc. Project) Series 2000 DN (M&T Bank Corp. LOC) (VMIG-1)
4.10%(b)	01/08/07		1,500		1,500,000
Reno Capital Improvement Municipal Securities Trust Certificates RB Series 2002A DN (FGIC Insurance, Bear Stearns Capital Markets Liquidity Facility) (A-1)
3.94%(b)(c)	01/08/07		1,390		1,390,000
					3,890,000
New Jersey — 3.9%
Lincoln Park GO Series 2006 BAN (A-1)
4.25%	02/28/07		1,955		1,956,997
University Medicine & Dentistry RB Series 2002B DN (AMBAC Insurance, Fleet National Bank SBPA) (VMIG-1)
3.91%(b)	01/08/07		10,000		10,000,000
					11,956,997
New York — 1.1%
Metropolitan Pier & Exposition Authority Municipal Securities Trust Certificates RB Series 2005A-224 DN (MBIA Insurance, Bear Stearns Capital Markets Liquidity Facility) (VMIG-1)
3.96%(b)(c)	01/08/07		600		600,000
Rockland County IDA RB (Northern River Assisted Living Project) Series 1999 DN (M&T Bank Corp. LOC) (VMIG-1)
3.96%(b)	01/08/07		2,765		2,765,000
					3,365,000
North Carolina — 9.8%
Charlotte-Mecklenburg Hospital Authority RB (North Carolina Health Care System Project) Series 2006-1388 DN (Morgan Stanley Group Liquidity Facility) (VMIG-1)
3.95%(b)	01/08/07		300		300,000
Fayetteville Public Works Commission RB Series 2003 DN (Dexia Credit Local SBPA) (A-1+, VMIG-1)
3.90%(b)	01/08/07		1,400		1,400,000
Guilford County Industrial Facilities PCRB (Recreational Facilities-YMCA Project) Series 2002 DN (Branch Banking & Trust Co. LOC) (VMIG-1)
3.95%(b)	01/08/07		1,740		1,740,000
North Carolina Capital Facilities Finance Agency RB (Aquarium Society Project) Series 2004 DN (Bank of America N.A. LOC) (AA-, F-1+)
3.90%(b)	01/08/07		2,400		2,400,000

7

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS (Continued)
North Carolina (Continued)
North Carolina Capital Facilities Finance Agency RB (Citibank Eagle Trust Receipts Duke University Project) Series 2006A-0131 DN (Citibank N.A. Liquidity Facility) (A-1+)
3.96%(b)(c)	01/08/07	$	5,000	$	5,000,000
North Carolina GO Series 2003A-23 DN (Wachovia Bank N.A. SBPA) (A-1+)
3.95%(b)(c)	01/08/07		300		300,000
North Carolina Medical Care Commission Hospital RB (Lincoln Health System Project) Series 1996A DN (Bank of America N.A. LOC) (A-1, VMIG-1)
3.90%(b)	01/08/07		1,720		1,720,000
North Carolina Medical Care Commission Hospital RB (McDowell Hospital, Inc. Project) Series 1999 DN (Wachovia Bank N.A. SBPA) (A-1)
3.92%(b)	01/08/07		150		150,000
North Carolina Medical Care Commission Retirement Facilities RB (Brookwood Project) Series 2001C DN (Branch Banking & Trust Co. LOC) (A-1)
4.03%(b)	01/08/07		600		600,000
North Carolina Medical Care Commission Retirement Facilities RB (United Methodist Project) Series 2005B DN (Branch Banking & Trust Co. LOC) (VMIG-1)
3.95%(b)	01/08/07		1,300		1,300,000
North Carolina Water & Sewer RB Series 2001 DN (Bank of America N.A. LOC) (A-1+, VMIG-1)
3.95%(b)	01/08/07		2,600		2,600,000
Raleigh County COP (Packaging Facilities Project) Series 2000A DN (Bank of America N.A. SBPA) (A-1+, VMIG-1)
3.95%(b)	01/08/07		1,160		1,160,000
Rockingham County Industrial Facilities PCRB (Whiteridge, Inc. Project) Series 1998 AMT DN (Branch Banking & Trust Co. LOC) (Aa3, VMIG-1)
4.05%(b)	01/08/07		40		40,000
University of North Carolina RB (Munitops Trust Certificates) Series 2005-52 DN (ABN-AMRO Bank N.V. SBPA) (VMIG-1)
3.95%(b)(c)	01/08/07		2,700		2,700,000
Wake County GO Series 2006B DN (Lloyds TSB Bank PLC SBPA) (A-1+, VMIG-1)
3.88%(b)	01/08/07		500		500,000
Wake County Housing Finance Authority RB (Casa Melvid Multi-Family Housing Project) Series 2001A AMT DN (SunTrust Bank LOC) (VMIG-1)
4.02%(b)	01/08/07		2,400		2,400,000
Wake County TECP (Wachovia Bank N.A. SBPA) (A-1+, P-1, F-1+)
3.60%	05/22/07		2,800		2,800,000
Winston-Salem Water & Sewer Systems RB Series 2002C DN (Dexia Credit Local LOC) (A-1+, VMIG-1)
3.95%(b)	01/08/07		2,775		2,775,000
					29,885,000
Ohio — 2.8%
Darke County GO Series 2006A BAN
4.25%	06/28/07		700		701,832
Darke County GO Series 2006 BAN
4.50%	06/28/07		1,000		1,003,052
Delaware County GO Series 2006 BAN (MIG-1)
4.75%	06/13/07		500		502,304
Harrison Township GO (Fire Department Project) Series 2006 BAN
3.85%	10/11/07		1,000		1,001,493
Huber Heights GO (Real Estate Project) Series 2006 BAN
4.00%	08/16/07		1,000		1,000,690
Ohio Higher Educational Facility Community RB Series 2000C DN (Fifth Third Bank N.A. LOC)
3.98%(b)	01/08/07		665		665,000
Ohio PCRB (Ross Incineration Project) Series 2000-1 AMT DN (Bank One N.A. LOC)
4.20%(b)	01/08/07		310		310,000
Pepper Pike GO Series 2006 BAN
4.00%	05/31/07		1,000		1,000,989
Richland County GO (Correctional Facilities Project) Series 2006 BAN
4.25%	02/27/07		1,000		1,001,207
Summit County Civic Facility RB (Akron Area Electric Junction Project) Series 2001 DN (KeyBank N.A. LOC)
3.99%(b)	01/08/07		1,285		1,285,000
					8,471,567
Pennsylvania — 1.8%
Delaware County IDA (Scott Paper Co. Project) Series 1984A DN (A-1+, P-1)
3.95%(b)	01/08/07		2,600		2,600,000

8

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS (Continued)
Pennsylvania (Continued)
Venango IDRB (Scrubgrass Project) Series 2006 TECP (Dexia Credit Local LOC)
3.75%	01/04/07	$	904	$	904,000
3.70%	01/11/07		2,000		2,000,000
					5,504,000
Puerto Rico — 0.0%
Commonwealth of Puerto Rico GO TOC Series 2001 DN (FSA Insurance, Bank of New York Liquidity Facility) (A-1+)
3.92%(b)(c)	01/08/07		100		100,000
Rhode Island — 1.0%
Rhode Island and Providence Plantations GO Series 2006 TAN (SP-1+, MIG-1)
4.25%	06/29/07		3,000		3,010,590
South Carolina — 1.8%
Greenville County School District RB (UBS Municipal Certificates) Series 2006-02 DN (Assured Guaranty Ltd. Insurance, Landesbank Hessen-Thuringen Girozentrale SBPA) (A-1)
3.95%(b)(c)	01/08/07		1,850		1,850,000
Greenwood County Exempt Facility IDRB Series 2004 AMT DN (FUJIFILM Corp. Guaranty) (A-1+)
4.10%(b)	01/08/07		1,500		1,500,000
Medical University Hospital Authority RB Series 2005A-5 DN (MBIA Insurance, Bank of America N.A. SBPA) (VMIG-1)
3.96%(b)(c)	01/08/07		2,230		2,230,000
					5,580,000
Tennessee — 1.8%
Municipal Energy Acquistion Corp. of Tennessee Gas RB Series 2006-1578 DN (Morgan Guaranty Trust LOC)
3.97%(b)(c)	01/08/07		5,550		5,550,000
Texas — 10.1%
Brazos IDRB Series 2007 TECP (P-2)
3.65%	02/08/07		1,000		1,000,000
Dallas Independent School District Building GO (Munitops Trust Certificates) Series 2006-8 DN (PSF Guaranty, ABN-AMRO Bank N.V. SBPA) (VMIG-1)
3.96%(b)(c)	01/08/07		3,000		3,000,000
Houston Water & Sewer Municipal Securities Trust Certificates RB Series 2006A-5015 MB (MBIA Insurance, Branch Banking & Trust Co. Liquidity Facility) (MIG-1)
3.85%(b)(c)	06/21/07		1,695		1,695,000
Lower Neches Valley Authority PCRB (Chevron USA, Inc. Project) Series 1987 DN (Chevron Corp. Guaranty) (A-1+, P-1)
3.63%(b)	02/15/07		1,135		1,135,000
Midlothian Independent School District GO Putters Series 2006-1493 DN (PSF Guaranty, J.P. Morgan Chase & Co. Liquidity Facility) (VMIG-1)
3.97%(b)(c)	01/08/07		2,735		2,735,000
Texas GO (Citibank Eagle Trust Receipts) Series 2006A-0126 DN (Citibank N.A. Liquidity Facility) (A-1+)
3.96%(b)(c)	01/08/07		5,700		5,700,000
Texas GO Series 2006 RAN (SP-1+, MIG-1, F-1+)
4.50%	08/31/07		11,685		11,755,480
University of Texas Municipal Commercial Paper Series 2006 MB (A-1+, P-1)
3.60%	04/02/07		4,000		4,000,000
					31,020,480
Utah — 1.0%
Intermountain Power Agency Power Supply RB Series 1985F DN (AMBAC Insurance, Morgan Stanley Group SBPA) (A-1, VMIG-1)
3.55%(b)	06/01/07		3,000		3,000,000
Virginia — 2.1%
Alexandria IDRB (Assoc. for Supervision & Curriculum Development Project) Series 1997 DN (Wachovia Bank N.A. LOC) (A-1)
3.92%(b)	01/08/07		205		205,000
Chesapeake Bay Bridge & Tunnel Commonwealth District RB (Wachovia Merlots Trust Receipts) Series 2003 DN (MBIA Insurance, Wachovia Bank N.A. Liquidity Facility) (VMIG-1)
3.95%(b)(c)	01/08/07		695		695,000
Norfolk Redevelopment & Housing Authority Multi-Family Housing RB (Residential Rental Project) Series 2003 AMT DN (SunTrust Bank LOC)
4.07%(b)	01/08/07		2,013		2,013,000
Virginia College Building Authority RB Series 2003-379 DN (J.P. Morgan Chase & Co. LOC) (A-1+)
3.97%(b)(c)	01/08/07		1,880		1,880,000

9

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

MUNICIPAL MONEY MARKET PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS (Continued)
Virginia (Continued)
Virginia Public School Authority RB (School Financing Referendum Project) Series 2003D MB (AA+, Aa1)
5.00%	02/01/07	$	1,600	$	1,602,000
					6,395,000
Washington — 1.3%
King County Sewer RB Series 2006A DN (MBIA Insurance, Royal Bank of Canada Liquidity Facility) (A-1, VMIG-1)
3.90%(b)	01/08/07		700		700,000
Washington Economic Development Finance Authority RB Series 2006-1531 DN (Morgan Stanley Group LOC) (A-1)
3.95%(b)	01/08/07		1,620		1,620,000
Washington GO Putters Series 2006-1492 DN (AMBAC Insurance, J.P. Morgan Chase & Co. SBPA) (VMIG-1)
3.97%(b)(c)	01/08/07		1,355		1,355,000
Yakima County Public Corp. RB (Michelsen Packaging Co. Project) Series 2000 AMT DN (Bank of America N.A. LOC) (A-1+)
4.00%(b)	01/08/07		405		405,000
					4,080,000
Wisconsin — 0.8%
Amery IDRB (Plastech Corp. Project) Series 1997 AMT DN (U.S. Bank N.A. LOC)
4.12%(b)	01/08/07		2,000		2,000,000
Mequon IDRB (Johnson Level GRW Investment Project) Series 1995 AMT DN (Bank One N.A. LOC)
4.20%(b)	01/08/07		465		465,000
					2,465,000
TOTAL MARKET VALUE OF SECURITIES BEFORE AFFILIATED INVESTMENTS — 99.0%
(Cost $303,187,853)					303,187,853
AFFILIATED INVESTMENTS — 1.2%
Golden State Tobacco Securitization Corp. RB (P-Float Trust Receipts) Series 2004 PA-1236 DN (Merrill Lynch & Co. Guaranty, Merrill Lynch Capital Services SBPA)
3.96%(b)(c)(d)	01/08/07		1,330		1,330,000
Metropolitan Pier & Exposition Authority Dedicated State Tax Receipts RB (P-Float Trust Receipts) Series 2005 PZ-44 DN (MBIA Insurance, Merrill Lynch Capital Services SBPA)
3.97%(b)(c)(d)	01/08/07		500		500,000
North Carolina Medical Care Commission Hospital RB (Baptist Hospitals Project) Series 2000 DN (Wachovia Bank N.A. LOC)
3.90%(b)	01/08/07		800		800,000
Pleasant Valley School District of Ventura County GO (P-Float Trust Receipts) Series 2005 PT-2783 DN (MBIA Insurance, Dexia Credit Local SBPA)
3.91%(b)(c)	01/08/07		150		150,000
Sacrament Municipal Utilities District Electric RB (Municipal Securities Trust Receipts) Series 2004P-18 DN (Societe Generale Group SBPA)
4.04%(b)(c)	01/08/07		975		975,000
TOTAL AFFILIATED INVESTMENTS
(Cost $3,755,000)					3,755,000
TOTAL INVESTMENTS IN SECURITIES — 100.2%
(Cost $306,942,853(a))					306,942,853
LIABILITIES IN EXCESS OF OTHER ASSETS — (0.2)%					(689,821	)
NET ASSETS — 100.0%				$	306,253,032

(a) Aggregate cost for federal income tax purposes.

(b) Rates shown are the rates as of December 31, 2006 and maturities shown are the next interest readjustment date or the date the principal owed can be recovered through demand.

(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional investors. As of December 31, 2006, the Portfolio held 29.4% of its net assets, with a current market value of $90,063,000, in securities restricted as to resale.

(d) Security insured by an affiliate.

10

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

NEW JERSEY MUNICIPAL MONEY MARKET PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS — 86.1%
New Jersey — 84.6%
Berkeley Heights GO Series 2006 BAN (Aaa)
4.50%	06/28/07	$	1,611	$	1,616,695
Bordentown Township GO Series 2006 BAN
4.25%	11/01/07		500		502,207
Chatham Borough GO Series 2006 BAN (Aa1)
4.00%	01/16/07		3,699		3,699,829
East Brunswick GO Series 2006 BAN
4.25%	10/11/07		1,800		1,808,751
Freehold Township GO Series 2006 BAN
4.25%	08/01/07		1,400		1,405,554
Hudson County Improvement Authority RB (Essential Purpose Pooled Government Project) Series 1986 DN (Bank of New York LOC) (A-1+)
3.83%(b)	01/08/07		7,200		7,200,000
Jackson Township GO Series 2006 BAN
4.00%	12/06/07		1,400		1,405,268
Manalapan Township GO Series 2006 BAN (Aa3)
4.38%	08/10/07		2,390		2,398,002
Mercer County Improvement Authority RB (Atlantic Foundation Project) Series 1998 DN (Bank of America N.A. LOC) (A-1+)
3.86%(b)	01/08/07		7,900		7,900,000
Montclair Township GO Series 2006 BAN
4.25%	03/15/07		1,700		1,702,111
Moorestown Township GO Series 2006 MB (Aaa)
4.25%	01/15/07		395		395,087
New Jersey Economic Development Authority Multi-Mode IDRB (V&S Amboy Galvanizing LLC Project) Series 1999 AMT DN (KeyBank N.A. LOC)
4.06%(b)	01/08/07		1,885		1,885,000
New Jersey Economic Development Authority RB (Applewood Estates Project) Series 2005 DN (Commerce Bank N.A. LOC) (A-2, VMIG-1)
3.83%(b)	01/08/07		3,700		3,700,000
New Jersey Economic Development Authority RB (Cedar Crest Village, Inc. Project) Series 2006B DN (Bank of New York LOC) (A-1+)
3.93%(b)	01/08/07		3,200		3,200,000
New Jersey Economic Development Authority RB (Citibank P-Float Trust Receipts) Series 2004 ROC-II-R-309 DN (Assured Guaranty Ltd. Insurance, Citibank N.A. SBPA) (VMIG-1)
3.96%(b)(c)	01/08/07		5,565		5,565,000
New Jersey Economic Development Authority RB (Facilities Construction Project) Series 2006R-1 DN (A-1+, VMIG-1, F-1+)
3.90%(b)	01/02/07		1,100		1,100,000
New Jersey Economic Development Authority RB (Frisch School Project) Series 2006 DN (Princeton University Guaranty) (A-1+)
3.86%(b)	01/08/07		1,550		1,550,000
New Jersey Economic Development Authority RB (Hamilton Industrial Development Project) Series 1998 DN (Wachovia Bank N.A. LOC)
3.98%(b)	01/08/07		1,440		1,440,000
New Jersey Economic Development Authority RB (J. James Realty Co. Project) Series 1998 AMT DN (Wachovia Bank N.A. LOC)
4.03%(b)	01/08/07		490		490,000
New Jersey Economic Development Authority RB (Jacea LLC Project) Series 2004 DN (Wachovia Bank N.A. LOC)
4.03%(b)	01/08/07		3,330		3,330,000
New Jersey Economic Development Authority RB (Macon Trust Project) Series 2005H DN (FGIC Insurance, Bank of America N.A. LOC) (A-1+)
3.94%(b)(c)	01/08/07		625		625,000
New Jersey Economic Development Authority RB (Nandan Co. Project) Series 2000 AMT DN (M&T Bank Corp. LOC) (A-1)
3.96%(b)	01/08/07		2,940		2,940,000
New Jersey Economic Development Authority RB (Nandan Co. Project) Series 2001 AMT DN (M&T Bank Corp. LOC) (A-1)
3.96%(b)	01/08/07		1,285		1,285,000
New Jersey Economic Development Authority RB (Paddock Realty LLC Project) Series 2006 AMT DN (Wells Fargo Bank N.A. LOC) (A-1+, VMIG-1)
4.11%(b)	01/08/07		1,300		1,300,000
New Jersey Economic Development Authority RB (Pennington Montessori School Project) Series 1998 DN (Wachovia Bank N.A. LOC)
4.03%(b)	01/08/07		1,085		1,085,000

11

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

NEW JERSEY MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS (Continued)
New Jersey (Continued)
New Jersey Economic Development Authority RB (Stuart Country Day School Project) Series 2002 DN (M&T Bank Corp. LOC) (VMIG-1)
3.86%(b)	01/08/07	$	1,645	$	1,645,000
New Jersey Economic Development Authority RB (Thermal Energy LP Project) Series 1995 AMT DN (Bank One N.A. LOC) (VMIG-1)
3.95%(b)	01/08/07		800		800,000
New Jersey Economic Development Authority RB Series 2006 DN (Morgan Stanley Group LOC)
3.93%(b)(c)	01/08/07		1,100		1,100,000
New Jersey Educational Facilities Authority RB (Princeton University Project) Series 2002B DN (A-1+, VMIG-1)
3.83%(b)	01/02/07		4,200		4,200,000
New Jersey Environmental Infrastructure Trust RB (ENCAP Golf Holdings LLC Project) Series 2005 AMT DN (Wachovia Bank N.A. LOC) (VMIG-1)
3.91%(b)	01/08/07		7,900		7,900,000
New Jersey Environmental Infrastructure Trust RB Series 2004-585 AMT DN (J.P. Morgan Chase & Co. SBPA) (VMIG-1)
3.98%(b)(c)	01/08/07		4,000		4,000,000
New Jersey GO Series 2006 TRAN (SP-1+, MIG-1, F-1+)
4.50%	06/22/07		5,000		5,023,716
New Jersey Health Care Facilities Financing Authority RB (St. Joseph’s Project) Series 2003A-6 DN (Valley National Bank LOC) (A2, VMIG-1)
3.91%(b)	01/08/07		1,105		1,105,000
New Jersey Health Care Facilities Financing Authority RB Series 2004-943 DN (FGIC Insurance, Morgan Stanley Group Liquidity Facility) (F-1+)
3.93%(b)(c)	01/08/07		4,186		4,186,000
New Jersey Housing & Mortgage Finance Agency Multi-Family RB Series 2005-1012 DN (FGIC Insurance, Morgan Stanley Group Liquidity Facility) (VIMG-1)
3.97%(b)(c)	01/08/07		1,380		1,380,000
New Jersey Housing & Mortgage Finance Agency Multi-Family RB Series 2006A AMT DN (FSA Insurance, Lloyds TSB Bank PLC SBPA) (A-1+)
3.89%(b)	01/08/07		1,000		1,000,000
New Jersey Housing & Mortgage Finance Agency Multi-Family RB Series 2006D AMT DN (FGIC Insurance, Lloyds TSB Bank PLC SBPA) (A-1+)
3.93%(b)	01/08/07		6,000		6,000,000
New Jersey Housing & Mortgage Finance Agency RB (Wachovia Merlots Trust Receipts) Series 2000A-2 DN (MBIA Insurance, Wachovia Bank N.A. SBPA) (Aaa)
3.99%(b)(c)	01/08/07		625		625,000
New Jersey Sports & Exposition Authority State Contract RB Series 1992C DN (MBIA Insurance, Credit Suisse SBPA) (A-1+, VMIG-1)
3.83%(b)	01/08/07		3,500		3,500,000
New Jersey Transportation Trust Fund Authority Capital Appreciation RB Series 2006 ROC-RR-II-684Z DN (AMBAC Insurance, Citibank N.A. Liquidity Facility) (VMIG-1)
3.96%(b)(c)	01/08/07		590		590,000
New Jersey Transportation Trust Fund Capital Appreciation RB (Transportation System Project) Series 2006C DN (MBIA Insurance) (VMIG-1)
3.96%(b)	01/08/07		2,020		2,020,000
New Jersey Transportation Trust Fund RB (Lehman Municipal Trust Receipts) Series 2006 DN (Lehman Liquidity Co. Liquidity Facility) (A-1)
4.01%(b)(c)	01/08/07		1,000		1,000,000
New Jersey Transportation Trust Fund RB (Lehman Municipal Trust Receipts) Series 2006D-P63 DN (Lehman Liquidity Co. Liquidity Facility) (A-1)
4.01%(b)(c)	01/08/07		4,100		4,100,000
New Jersey Transportation Trust Fund RB Series 2006Z DN (FSA Insurance) (F-1+)
3.97%(b)(c)	01/08/07		3,300		3,300,000
New Jersey Turnpike Revenue Authority RB Series 2006 DN (FSA Insurance, Dexia Credit Local SBPA) (A-1+, VMIG-1, F-1+)
3.88%(b)	01/08/07		3,600		3,600,000
New Milford GO Series 2006 MB (A-1, P-1)
4.50%	02/01/07		1,375		1,375,826
North Bergen Township Municipal Sewer Utilities Authority GO Series 2006 MB (MIG-1)
4.50%	02/05/07		2,000		2,001,388
Port Authority of New York & New Jersey
3.52%	02/08/07		1,260		1,260,000
3.55%	02/08/07		5,000		5,000,000

12

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

NEW JERSEY MUNICIPAL MONEY MARKET PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS (Continued)
New Jersey (Continued)
Port Authority of New York & New Jersey RB (Eagle Trust Receipts) Series 2006A-107 AMT DN (Landesbank Hessen-Thuringen Girozentrale Liquidity Facility) (A-1+)
3.98%(b)(c)	01/08/07	$	2,000	$	2,000,000
Port Authority of New York & New Jersey RB Putters Series 2005-1089 DN (CIFG IXIS Financial Guaranty Insurance, J.P. Morgan Chase & Co. SBPA) (F-1)
3.98%(b)(c)	01/08/07		1,755		1,755,000
Port Authority of New York & New Jersey RB Series 2006-1546 DN (J.P. Morgan Chase & Co. Liquidity Facility) (A-1+)
3.95%(b)(c)	01/08/07		1,300		1,300,000
Readington Township GO Series 2006 BAN
4.25%	02/07/07		2,000		2,001,883
Salem County Pollution Control Financing Authority RB (Atlantic City Electric Co. Project) Series 1997B AMT DN (Bank of New York LOC) (A-1+, VMIG-1)
3.93%(b)	01/08/07		890		890,000
University Medicine & Dentistry RB Series 2002B DN (AMBAC Insurance, Fleet National Bank SBPA) (VMIG-1)
3.91%(b)	01/08/07		800		800,000
Upper Saddle River GO Series 2006 BAN
4.25%	03/01/07		1,000		1,001,024
Wanaque Borough GO Series 2006 BAN
4.50%	02/16/07		1,000		1,001,402
Woodcliff Lake School District GO Series 2006 MB
4.35%	10/26/07		2,750		2,766,232
					139,755,975
Puerto Rico — 1.5%
Puerto Rico HFA RB (Lehman Municipal Trust Receipts Capital Funding Project) Series 2006K-48 DN (Lehman Liquidity Co. Liquidity Facility, HUD Loan Guaranty) (Aa3, VMIG-1)
4.01%(b)(c)	01/08/07		2,595		2,595,000
TOTAL MARKET VALUE OF SECURITIES BEFORE AFFILIATED INVESTMENTS — 86.1%
(Cost $142,350,975)					142,350,975
AFFILIATED INVESTMENTS — 13.4%
New Jersey Economic Development Authority RB (Landesbank Hessen-Thuringen Girozentrale P-Float Trust Receipts) Series 2004 MT-035 DN (Assured Guaranty Ltd. Insurance, Landesbank Hessen-Thuringen Girozentrale SBPA)
3.93%(b)(c)	01/08/07		6,795		6,795,000
New Jersey Health Care Facilities Financing Authority RB (Merrill Lynch P-Float Trust Receipts) Series 2001 PT-1319 DN (AMBAC Insurance, Merrill Lynch Capital Services SBPA)
3.96%(b)(c)(d)	01/08/07		7,415		7,415,000
Port Authority of New York & New Jersey RB (Merrill Lynch P-Float Trust Receipts) Series 2004-056 DN (FGIC Insurance, Banque Nationale de Paribas SBPA)
3.96%(b)(c)(d)	01/08/07		7,855		7,855,000
TOTAL AFFILIATED INVESTMENTS
(Cost $22,065,000)					22,065,000
TOTAL INVESTMENTS IN SECURITIES — 99.5%
(Cost $164,415,975(a))					164,415,975
OTHER ASSETS IN EXCESS OF LIABILITIES — 0.5%					834,292
NET ASSETS — 100.0%				$	165,250,267

(a) Aggregate cost for federal income tax purposes.

(b) Rates shown are the rates as of December 31, 2006 and maturities shown are the next interest readjustment date or the date the principal owed can be recovered through demand.

(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional investors. As of December 31, 2006, the Portfolio held 34.0% of its net assets, with a current market value of $56,186,000, in securities restricted as to resale.

(d) Security insured by an affiliate.

13

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

NORTH CAROLINA MUNICIPAL MONEY MARKET PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS — 99.6%
North Carolina — 94.2%
Buncombe County Metropolitan Sewer District Sewer System RB Series 2004 DN (XLCA Insurance, Bank of America N.A. SBPA) (A-1+, VMIG-1)
3.91%(b)	01/08/07	$	2,200	$	2,200,000
Charlotte Airport RB Series 1993A DN (MBIA Insurance, J.P. Morgan Chase & Co. SBPA) (A-1+, VMIG-1)
3.89%(b)	01/08/07		1,000		1,000,000
Charlotte COP (Transit Projects Phase II Project) Series 2005F DN (Depfa Bank PLC SBPA) (A-1+, VMIG-1)
3.88%(b)	01/08/07		1,700		1,700,000
Charlotte Municipal Commercial Paper Series 2006 MB (A-1+, P-1, F-1+)
3.56%	02/01/07		1,800		1,800,000
Charlotte Water & Sewer Systems RB Series 2006B DN (Depfa Bank PLC SBPA) (A-1+, VMIG-1)
3.89%(b)	01/08/07		2,000		2,000,000
Charlotte-Mecklenburg Hospital Authority RB (North Carolina Health Care System Project) Series 2005D DN (Bank of America N.A. SBPA) (A-1+, VMIG-1)
3.89%(b)	01/02/07		300		300,000
Charlotte-Mecklenburg Hospital Authority RB (North Carolina Health Care System Project) Series 2006-1388 DN (Morgan Stanley Group Liquidity Facility) (VMIG-1)
3.95%(b)	01/08/07		2,900		2,900,000
Fayetteville Public Works Commission RB Series 2003 DN (Dexia Credit Local SBPA) (A-1+, VMIG-1)
3.90%(b)	01/08/07		900		900,000
Greensboro GO Series 2003 DN (Bank of America N.A. SBPA) (A-1+, VMIG-1, F-1+)
3.95%(b)	01/08/07		1,600		1,600,000
Lee County Industrial Facilities PCRB (Trion, Inc. Project) Series 1995 DN (Wachovia Bank N.A. LOC)
4.02%(b)	01/08/07		100		100,000
Mecklenburg County COP Series 2006 DN (Depfa Bank PLC SBPA) (A-1+, VMIG-1)
3.89%(b)	01/08/07		900		900,000
Mecklenburg County GO Series 1996C DN (Bank of America N.A. LOC) (A-1+, VMIG-1, AAA)
3.90%(b)	01/08/07		2,200		2,200,000
North Carolina Capital Facilities Finance Agency Educational Facilities RB (High Point University Project) Series 2006 DN (Branch Banking & Trust Co. LOC) (A-1+)
3.95%(b)	01/08/07		1,000		1,000,000
North Carolina Capital Facilities Finance Agency Educational Facilities RB Series 2006 DN (Branch Banking & Trust Co. LOC)
3.95%(b)	01/08/07		1,200		1,200,000
North Carolina Capital Facilities Finance Agency RB (Aquarium Society Project) Series 2004 DN (Bank of America N.A. LOC) (AA-, F-1+)
3.90%(b)	01/08/07		400		400,000
North Carolina Capital Facilities Finance Agency RB (Citibank Eagle Trust Receipts) Series 2006A DN (Citibank N.A. Liquidity Facility) (A-1+)
3.96%(b)(c)	01/08/07		1,000		1,000,000
North Carolina Educational Facilities Finance Agency RB (Duke University Project) Series 1991B DN (A-1+, VMIG-1)
3.92%(b)	01/08/07		3,000		3,000,000
North Carolina GO (Highway Project) Series 2003 MB (AAA, Aa1)
5.00%	05/01/07		1,750		1,757,312
North Carolina GO Series 2002C DN (Bayerische Landesbank Girozentrale LOC) (A-1+, VMIG-1)
3.89%(b)	01/08/07		1,500		1,500,000
North Carolina GO Series 2002E DN (Bayerische Landesbank Girozentrale LOC) (A-1+, VMIG-1, F-1+)
3.87%(b)	01/02/07		1,300		1,300,000
North Carolina GO Series 2002E DN (Landesbank Hessen-Thuringen Girozentrale SBPA) (A-1+, VMIG-1)
3.88%(b)	01/08/07		8,800		8,800,000
North Carolina GO Series 2002F DN (Landesbank Hessen-Thuringen Girozentrale SBPA) (A-1+, VMIG-1)
3.90%(b)	01/08/07		1,200		1,200,000
North Carolina GO Series 2003A-23 DN (Wachovia Bank N.A. SBPA) (A-1+)
3.95%(b)(c)	01/08/07		800		800,000

14

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

NORTH CAROLINA MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS (Continued)
North Carolina (Continued)
North Carolina Housing Finance Agency RB (Home Ownership Project) Series 2003-17-C AMT DN (Bank of America N.A. Liquidity Facility) (A-1)
3.98%(b)	01/08/07	$	350	$	350,000
North Carolina Medical Care Commission Hospital RB (Baptist Hospital Project) Series 1996 DN (Wachovia Bank N.A. LOC) (A-1+, VMIG-1)
3.89%(b)	01/08/07		200		200,000
North Carolina Medical Care Commission Hospital RB (Lincoln Health System Project) Series 1996A DN (Bank of America N.A. LOC) (A-1, VMIG-1)
3.90%(b)	01/08/07		500		500,000
North Carolina Medical Care Commission Hospital RB (Moses Cone Health Systems Project) Series 2001B DN (Chase Manhattan Bank LOC) (A-1+)
3.91%(b)	01/08/07		3,100		3,100,000
North Carolina Medical Care Commission Retirement Facilities RB (United Methodist Project) Series 2005B DN (Branch Banking & Trust Co. LOC) (VMIG-1)
3.95%(b)	01/08/07		625		625,000
North Carolina Medical Care Community Health Care Facilities RB (First Mortgage-Carol Woods Project) Series 2001 DN (A-1+)
3.91%(b)	01/02/07		1,000		1,000,000
North Carolina Medical Care Community Health Care Facilities RB (Lutheran Services for the Aging Project) Series 1998 DN (Branch Banking & Trust Co. LOC) (A-1, VMIG-1)
3.92%(b)	01/08/07		100		100,000
North Carolina Medical Care Community Health Care Facilities RB (Novant Health Group Project) Series 2004A DN (J.P. Morgan Chase & Co. SBPA) (A-1+, VMIG-1)
3.90%(b)	01/08/07		3,400		3,400,000
North Carolina Medical Care Community Health Care Facilities RB (Watauga Medical Center Project) Series 2005 DN (Wachovia Bank N.A. LOC) (VMIG-1)
3.92%(b)	01/08/07		1,000		1,000,000
North Carolina Medical Care Community Hospital RB (Duke University Hospital Project) Series 1985B DN (Wachovia Bank N.A. SBPA) (A-1+, VMIG-1)
3.95%(b)	01/08/07		2,000		2,000,000
Sampson County Industrial Facilities PCRB (Dubose Strapping, Inc. Project) Series 1997 DN (Wachovia Bank N.A. LOC)
4.07%(b)	01/08/07		385		385,000
Union County GO Series 2005A DN (Depfa Bank PLC SBPA) (A-1+, VMIG-1)
3.89%(b)	01/08/07		1,090		1,090,000
University of North Carolina Chapel Hill Hospital RB Series 2001B DN (Landesbank Hessen-Thuringen Girozentrale LOC) (A-1+, VMIG-1)
4.00%(b)	01/02/07		3,600		3,600,000
University of North Carolina Chapel Hill Hospital RB Series 2005A MB (AA-, A1)
4.00%	02/01/07		300		300,097
University of North Carolina Hospital Chapel Hill RB Series 2001B DN (A-1+, VMIG-1, F-1+)
3.97%(b)	01/08/07		2,000		2,000,000
University of North Carolina RB (Munitops Trust Certificates) Series 2005-52 DN (ABN-AMRO Bank N.V. SBPA) (VMIG-1)
3.95%(b)(c)	01/08/07		1,300		1,300,000
University of North Carolina RB Putters Series 2006-1643 DN (MBIA Insurance, J.P. Morgan Chase & Co. Liquidity Facility) (VMIG-1)
3.63%(b)(c)	01/08/07		1,500		1,500,000
Wake County GO Series 2004 MB (AAA, Aaa)
4.00%	03/01/07		865		865,526
Wake County GO Series 2006 TECP (A-1+, P-1, F-1+)
3.60%	02/14/07		1,200		1,200,000
Wake County Housing Finance Authority RB (Casa Melvid Multi-Family Housing Project) Series 2001A AMT DN (SunTrust Bank LOC) (VMIG-1)
4.02%(b)	01/08/07		400		400,000
Wake County TECP (A-1+, P-1, F-1+)
3.55%	05/30/07		600		600,000
Wake County TECP (Wachovia Bank N.A. SBPA) (A-1+, P-1, F-1+)
3.60%	05/22/07		700		700,000
Washington County Industrial Facilities PCRB (Mackey’s Ferry Sawmill, Inc. Project) Series 1997 AMT DN (Wachovia Bank N.A. LOC) (Aa2)
4.07%(b)	01/08/07		330		330,000
Winston-Salem COP (Risk Acceptance Management Corp. Project) Series 1988 DN (Dexia Credit Local LOC) (A-1+)
4.00%(b)	01/08/07		475		475,000

15

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

NORTH CAROLINA MUNICIPAL MONEY MARKET PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS (Continued)
North Carolina (Continued)
Winston-Salem GO Series 1990 DN (Wachovia Bank N.A. LOC) (A-1+, VMIG-1)
3.88%(b)	01/08/07	$	120	$	120,000
Winston-Salem Water & Sewer Systems RB Series 2002B DN (Dexia Credit Local LOC) (A-1+, VMIG-1)
3.91%(b)	01/08/07		2,800		2,800,000
Winston-Salem Water & Sewer Systems RB Series 2002C DN (Dexia Credit Local LOC) (A-1+, VMIG-1)
3.95%(b)	01/08/07		1,000		1,000,000
					70,497,935
Puerto Rico — 5.4%
Commonwealth of Puerto Rico Municipal Securities Trust Certificates RB Series 2000A DN (FSA Insurance, Bear Stearns Capital Markets Liquidity Facility) (A-1)
3.86%(b)(c)	01/08/07		3,000		3,000,000
Puerto Rico HFA RB (Lehman Municipal Trust Receipts Capital Funding Project) Series 2006K-48 DN (Lehman Liquidity Co. Liquidity Facility, HUD Loan Guaranty) (Aa3, VMIG-1)
4.01%(b)(c)	01/08/07		1,000		1,000,000
					4,000,000
TOTAL MARKET VALUE OF SECURITIES BEFORE AFFILIATED INVESTMENTS — 99.6%
(Cost $74,497,935)					74,497,935
AFFILIATED INVESTMENTS — 0.1%
Commonwealth of Puerto Rico Government Development Bank RB Series 1985 DN (Credit Suisse LOC)
3.73%(b)
(Cost $100,000)	01/08/07		100		100,000
TOTAL INVESTMENTS IN SECURITIES — 99.7%
(Cost $74,597,935(a))					74,597,935
OTHER ASSETS IN EXCESS OF LIABILITIES — 0.3%					208,687
NET ASSETS — 100.0%				$	74,806,622

(a) Aggregate cost for federal income tax purposes.

(b) Rates shown are the rates as of December 31, 2006 and maturities shown are the next interest readjustment date or the date the principal owed can be recovered through demand.

(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional investors. As of December 31, 2006, the Portfolio held 11.5% of its net assets, with a current market value of $8,600,000, in securities restricted as to resale.

16

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

OHIO MUNICIPAL MONEY MARKET PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS — 93.9%
Ohio — 93.9%
American Municipal Power, Inc. GO (Bryan Electric Systems Project) Series 2006 BAN
3.90%	08/17/07	$	1,285	$	1,285,000
American Municipal Power, Inc. GO (Cleveland Public Power Project) Series 2006 BAN
3.80%	08/16/07		1,000		1,000,000
American Municipal Power, Inc. GO (Columbus Electric System Project) Series 2006 BAN
4.00%	07/12/07		510		510,000
American Municipal Power, Inc. GO (Hubbard Project) Series 2006 BAN
3.85%	09/27/07		745		745,000
American Municipal Power, Inc. GO (Montpelier Project) Series 2006 BAN
4.00%	07/05/07		1,025		1,025,000
American Municipal Power, Inc. GO (Shelby Project) Series 2006 BAN
3.70%	11/15/07		2,060		2,060,000
American Municipal Power, Inc. GO (St. Mary’s Electric System Project) Series 2006 BAN
3.75%	10/04/07		950		950,000
American Municipal Power, Inc. GO (Tipp City Project) Series 2006 BAN
3.90%	05/15/07		550		550,000
American Municipal Power, Inc. GO (Versailles Project) Series 2006 BAN
3.75%	11/15/07		170		170,000
3.70%	12/06/07		110		110,000
American Municipal Power, Inc. GO (Yellow Springs Project) Series 2006 BAN
3.75%	11/01/07		100		100,000
American Municipal Power, Inc. GO Series 2006 RAN
3.65%	11/01/07		470		470,000
American Municipal Power, Inc. RB (Combustion Turbine Project) Series 2006 DN (KeyBank N.A. LOC) (VMIG-1)
3.94%(b)	01/08/07		620		620,000
Avon GO (Route 83 Project) Series 2006 BAN
4.05%	08/16/07		500		500,748
Avon GO Series 2006 BAN
3.85%	04/12/07		275		275,183
Avon Local School District GO (School Construction Project) Series 2007 BAN
4.12%	01/11/08		500		502,385
Brooklyn IDRB (Dylon Industries, Inc. Project) Series 1999 AMT DN (KeyBank N.A. LOC)
4.06%(b)	01/08/07		730		730,000
Brunswick GO Series 2006 BAN
3.60%	04/05/07		1,015		1,015,629
3.85%	12/05/07		180		180,000
Butler County GO (Jail Rehabilitation Project) Series 2006 BAN
4.40%	09/20/07		100		100,559
Butler County Hospital Facilities RB Putters Series 2006-1596 DN (FGIC Insurance, J.P. Morgan Chase & Co. SBPA)
3.95%(b)(c)	01/08/07		4,765		4,765,000
Celina County GO Series 2006 BAN
4.25%	11/14/07		300		301,508
Champaign County IDRB (Allied Signal, Inc. Project) Series 1998 DN (A-1)
4.21%(b)	01/08/07		1,000		1,000,000
Cincinnati School District COP (Citibank Eagle Trust Receipts) Series 2006A-0155 DN (FSA Insurance, Citibank N.A. Liquidity Facility) (A-1+)
3.96%(b)(c)	01/08/07		1,000		1,000,000
City of Westerville GO (ABN-AMRO Munitops Trust Certificates) Series 2001 DN (ABN-AMRO Bank N.V. LOC) (VMIG-1)
3.95%(b)	01/08/07		1,000		1,000,000
Clark County GO (Green Meadows II Project) Series 2006 BAN
3.67%	02/14/07		580		580,182
Clark County Multi-Family RB (Masonic Home Project) Series 1999 DN (AMBAC Insurance, KeyBank N.A. LOC) (VMIG-1)
3.94%(b)	01/08/07		1,710		1,710,000
Cleveland Waterworks RB Series 2006 DN (FSA Insurance, Dexia Credit Local SBPA)
3.88%(b)	01/08/07		500		500,000
Cleveland-Cuyahoga County Port Authority Educational Facility RB (Laurel School Project) Series 2004 DN (KeyBank N.A. LOC)
3.99%(b)	01/08/07		1,115		1,115,000
Cuyahoga County Civic Facility RB (Orion Services, Inc. Project) Series 2001 DN (Bank One N.A. LOC)
4.15%(b)	01/08/07		2,945		2,945,000
Cuyahoga County Economic Development RB (Berea Children’s Home Project) Series 2000 DN (Huntington National Bank LOC) (VMIG-1)
4.11%(b)	01/08/07		3,110		3,110,000
Cuyahoga County Economic Development RB (Cleveland Botanical Garden Project) Series 2001 DN (M&T Bank Corp. LOC) (VMIG-1)
3.93%(b)	01/08/07		635		635,000

17

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

OHIO MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS (Continued)
Ohio (Continued)
Cuyahoga County IDRB (Great Lakes Brewing Co. Project) Series 2001 AMT DN (Huntington National Bank LOC)
4.21%(b)	01/08/07	$	1,080	$	1,080,000
Cuyahoga County IDRB (Marine Mechanical Corp. Project) Series 2000 AMT DN (Royal Bank of Scotland LOC)
4.08%(b)	01/08/07		1,595		1,595,000
Cuyahoga County IDRB (Trio Diversified Co. Project) Series 2000 AMT DN (KeyBank N.A. LOC)
4.06%(b)	01/08/07		1,465		1,465,000
Darke County GO Series 2006A BAN
4.25%	06/28/07		500		501,308
Deerfield Township GO Series 2006B BAN
3.75%	11/29/07		350		350,000
Delaware County Economic Development RB (The Columbus Zoological Park Associates, Inc. Project) Series 2003 DN (Huntington National Bank LOC)
4.05%(b)	01/08/07		3,905		3,905,000
Delaware County GO Series 2006 BAN (MIG-1)
4.75%	06/13/07		500		502,304
Delaware County IDRB (Air Waves, Inc. Project) Series 1995 DN (KeyBank N.A. LOC)
4.06%(b)	01/08/07		70		70,000
Erie County IDRB (Brighton Manor Co. Project) Series 1986 AMT DN (KeyBank N.A. LOC)
4.06%(b)	01/08/07		4,200		4,200,000
Fairborn County GO Series 2006 BAN
4.25%	11/01/07		270		271,256
Franklin County Economic Development RB (Columbus Montessori Educational Center Project) Series 2000 DN (Huntington National Bank LOC)
4.01%(b)	01/08/07		1,515		1,515,000
Franklin County Economic Development RB (Dominican Sisters Project) Series 1994 DN (Fifth Third Bank N.A. LOC)
3.99%(b)	01/08/07		925		925,000
Franklin County GO Series 2006 BAN
3.75%	04/25/07		550		550,000
Franklin County Healthcare Facilities RB (Heritage Day Health Centers Project) Series 2002 DN (Huntington National Bank LOC)
3.95%(b)	01/08/07		405		405,000
Franklin County Healthcare Facilities RB (Willow Brook Christian Project) Series 2004 DN (Fifth Third Bank N.A. LOC) (A-1+)
3.92%(b)	01/08/07		600		600,000
Franklin County Hospital RB (Childrens Hospital Project) Series 2005A DN (National City Bank N.A. LOC) (VMIG-1)
3.95%(b)	01/08/07		850		850,000
Franklin County Hospital RB (Ohio Health Corp. Project) Series 2006 DN (AMBAC Insurance) (A-1+, VMIG-1, F-1+)
3.88%(b)	01/08/07		2,600		2,600,000
Geauga County RB (Thistle Lane Project) Series 2000 AMT DN (Huntington National Bank LOC)
4.21%(b)	01/08/07		2,220		2,220,000
Greene County IDRB (AFC Stamping & Production, Inc., Barsplice Products Project) Series 1995 AMT DN (KeyBank N.A. LOC)
4.06%(b)	01/08/07		185		185,000
Hamilton County Hospital Facilities RB (Drake Center, Inc. Project) Series 1999A DN (U.S. Bank N.A. LOC) (VMIG-1)
3.91%(b)	01/08/07		1,380		1,380,000
Harrison Township GO (Fire Department Project) Series 2006 BAN
3.85%	10/11/07		450		450,672
Huber Heights GO (Real Estate Project) Series 2006 BAN
4.00%	08/16/07		970		970,670
Huber Heights GO Series 2006 BAN
4.25%	08/16/07		745		747,947
Indian Lake Local School District GO (School Construction Project) Series 2006 BAN
4.20%	05/24/07		500		501,124
Jackson County RB (Hospital Facilities Project) Series 2005 DN (Radian Insurance, Fifth Third Bank N.A. LOC) (AA, F-1+)
3.94%(b)	01/08/07		490		490,000
Kent County GO Series 2006 BAN
4.25%	10/18/07		700		703,487
Lancaster GO Series 2006 BAN
4.25%	10/17/07		330		331,563
Licking County GO (Moundview Project) Series 2006 BAN
4.50%	09/05/07		700		703,653

18

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

OHIO MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS (Continued)
Ohio (Continued)
Lorain County GO (Sewer System Improvement Notes) Series 2006B BAN
4.50%	08/20/07	$	500	$	502,440
Lorain County IDRB (Ohio Metallurgical Services Project) Series 2001 AMT DN (First Merit Bank N.A. LOC)
4.18%(b)	01/08/07		1,595		1,595,000
Lyndhurst City GO Series 2006 BAN
3.70%	03/01/07		1,000		1,000,311
Mahoning County IDRB (M&J Development Ltd. Project) Series 2002 AMT DN (KeyBank N.A. LOC)
4.06%(b)	01/08/07		2,495		2,495,000
Marion County GO Series 2006 BAN
4.15%	10/23/07		235		235,916
Massillon GO (Lincoln Center Project) Series 2006 BAN
4.12%	11/13/07		455		456,804
Mentor IDRB (Arrow Machine Co. Ltd. Project) Series 1997 DN (First Merit Bank N.A. LOC)
4.03%(b)	01/08/07		1,195		1,195,000
North Central Ohio Local School GO Series 2006 BAN
4.50%	06/22/07		770		772,888
Oakwood GO Series 2006 BAN
4.25%	10/17/07		725		728,599
Ohio GO (Common Schools Project) Series 2005A DN
3.88%(b)	01/08/07		4,300		4,300,000
Ohio GO (Common Schools Project) Series 2006C DN
3.90%(b)	01/08/07		3,700		3,700,000
Ohio Higher Educational Facility Community RB Series 2000C DN (Fifth Third Bank N.A. LOC)
3.98%(b)	01/08/07		395		395,000
Ohio Higher Educational Facility RB (Cedarville University Project) Series 2004 DN (KeyBank N.A. LOC)
3.99%(b)	01/08/07		2,015		2,015,000
Ohio Housing Finance Agency Mortgage RB (Residential Mortgage Backed Securities Program) Series 2006F AMT DN (Citibank N.A. LOC) (VMIG-1)
3.94%(b)	01/08/07		1,400		1,400,000
Ohio Housing Finance Agency Mortgage RB (Wachovia Merlots Trust Receipts) Series 2001A-78 DN (Wachovia Bank N.A. LOC) (VMIG-1)
4.00%(b)(c)	01/08/07		1,425		1,425,000
Ohio Housing Finance Agency Mortgage RB (Wachovia Merlots Trust Receipts) Series 2005A-10 AMT DN (Wachovia Bank N.A. SBPA) (VMIG-1)
3.97%(b)(c)	01/08/07		3,820		3,820,000
Ohio Housing Finance Agency Mortgage RB Series 2001 AMT DN (Bank of America N.A. LOC) (VMIG-1)
4.03%(b)(c)	01/08/07		1,285		1,285,000
Ohio Housing Finance Agency Multi-Family Housing RB (Lincoln Park Assoc. Project) Series 1985 MB (Bank One N.A. LOC) (MIG-1)
3.60%(b)	05/01/07		1,480		1,480,000
Ohio IDRB (Ashley Ward, Inc. Project) Series 1997 AMT DN (Fifth Third Bank N.A. LOC)
4.02%(b)	01/08/07		235		235,000
Ohio PCRB (Ross Incineration Project) Series 2000-1 AMT DN (Bank One N.A. LOC)
4.20%(b)	01/08/07		690		690,000
Ohio Solid Waste RB (Republic Services, Inc. Project) Series 2005 AMT DN (A-2)
4.17%(b)	01/08/07		1,000		1,000,000
Ohio Water Development Authority Pollution Control Facilities RB (First Energy Nuclear Project) Series 2006 AMT DN (Barclays Bank PLC LOC) (A-1+, VMIG-1)
3.93%(b)	01/08/07		4,125		4,125,000
Ohio Water Development Authority Pollution Control Facilities RB (First Energy Nuclear Project) Series 2006B DN (Wachovia Bank N.A. LOC)
3.48%(b)	01/08/07		12,400		12,400,000
Olmsted Falls GO Series 2006 BAN
3.90%	10/18/07		445		445,852
Parma IDRB (FDC Realty Project) Series 2006 AMT DN (Huntington National Bank LOC)
4.15%(b)	01/08/07		2,005		2,005,000
Pepper Pike GO Series 2006 BAN
4.00%	05/31/07		1,000		1,000,989
Port of Greater Cincinncti RB (Springdale Public Infrastructure Project) Series 2006 DN (U.S. Bank N.A. LOC)
3.65%(b)	01/08/07		2,900		2,900,000
Portage County IDRB (Action Super Abrasive Project) Series 1996 AMT DN (Huntington National Bank LOC)
4.14%(b)	01/08/07		705		705,000
Portage County IDRB (Bauer/Hibbard Properties Ltd. Project) Series 1998 DN (National City Bank N.A. LOC)
4.13%(b)	01/08/07		755		755,000
Putnam County Health Care Facilities RB (Hilty Memorial Home Project) Series 2004 DN (LaSalle Bank N.A. LOC)
4.00%(b)	01/08/07		3,415		3,415,000

19

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

OHIO MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS (Continued)
Ohio (Continued)
Richland County GO (Computer Acquisition Project) Series 2006 BAN
4.00%	03/27/07	$	615	$	616,173
Richland County GO (Correctional Facilities Project) Series 2006 BAN
4.25%	02/27/07		1,000		1,001,207
Seven Hills GO (Street Improvement Project) Series 2006 BAN
4.25%	12/06/07		635		638,696
Stark County IDRB (Thakar Properties LLC Project) Series 2002 AMT DN (National City Bank N.A. LOC)
4.03%(b)	01/08/07		3,185		3,185,000
Strongsville IDRB (Web Plastics Co. Project) Series 1997 DN (National City Bank N.A. LOC)
4.13%(b)	01/08/07		530		530,000
Summit County Civic Facility RB (Akron Area Electric Junction Project) Series 2001 DN (KeyBank N.A. LOC)
3.99%(b)	01/08/07		195		195,000
Summit County IDRB (Flutes LLC Project) Series 2002 AMT DN (Marshall & Ilsley Bank LOC)
4.03%(b)	01/08/07		2,170		2,170,000
Summit County IDRB (INDS Inc. Project) Series 1998 AMT DN (J.P. Morgan Chase & Co. LOC)
4.06%(b)	01/08/07		2,640		2,640,000
Summit County IDRB (Jendrisak Properties Project) Series 2001 AMT DN (First Merit Bank N.A. LOC)
4.18%(b)	01/08/07		1,820		1,820,000
Summit County IDRB (KB Compost Services, Inc. Project) Series 2001 AMT DN (KeyBank N.A. LOC)
4.06%(b)	01/08/07		1,300		1,300,000
Summit County IDRB (Sigma Properties Project) Series 2000A AMT DN (National City Bank N.A. LOC)
4.08%(b)	01/08/07		750		750,000
Summit County Port Authority RB (Meadow Lane Building LLC Project) Series 2003A AMT DN (KeyBank N.A. LOC)
4.06%(b)	01/08/07		340		340,000
Tiffin GO (Sanitation Sewer Improvement Notes) Series 2006-3 MB
4.25%	03/01/07		1,255		1,256,368
Toledo City Services Special Assessment Notes GO Series 2006 DN (State Street Bank & Trust Co. LOC) (MIG-1)
3.91%(b)	01/08/07		1,300		1,300,000
Toledo GO (ABN-AMRO Munitops Trust Certificates) Series 2004-18 MB (FGIC Insurance, State Aid Withholding Guaranty, ABN-AMRO Bank N.V. SBPA) (VMIG-1)
3.73%(b)(c)	06/14/07		2,000		2,000,000
Toledo Multi-Family Housing RB (Cherrywood Apartments Project) Series 2001 AMT DN (KeyBank N.A. LOC)
4.06%(b)	01/08/07		2,580		2,580,000
Trumbull County GO Series 2006 BAN
4.55%	04/04/07		900		902,192
Trumbull County IDRB (Ellwood Engineered Project) Series 2004 AMT DN (KeyBank N.A. LOC)
4.06%(b)	01/08/07		3,100		3,100,000
Trumbull County IDRB (United Steel Service, Inc. Project) Series 2000B AMT DN (Bank One N.A. LOC)
4.30%(b)	01/08/07		240		240,000
University of Cincinnati RB Series 2004B DN (AMBAC Insurance, Bayerische Landesbank Girozentrale SBPA) (A-1+, VMIG-1)
3.91%(b)	01/08/07		600		600,000
Van Wert County GO Series 2006 BAN
4.25%	12/13/07		1,445		1,453,589
Wapakoneta GO (Various Improvement Purposes Project) Series 2006 BAN
4.00%	11/14/07		225		225,470
Western Reserve Housing Development Corp. Economic RB (Trumbull Metropolitan Housing Project) Series 2003 DN (KeyBank N.A. LOC)
4.04%(b)	01/08/07		3,385		3,385,000
Wilmington GO (David’s Drive Extension Project) Series 2006 BAN
4.50%	07/26/07		985		988,479
					153,326,151
TOTAL MARKET VALUE OF SECURITIES BEFORE AFFILIATED INVESTMENTS — 93.9%
(Cost $153,326,151)					153,326,151
AFFILIATED INVESTMENTS — 6.1%
Hamilton County Hospital Facilities RB (Merrill Lynch P-Float Trust Receipts) Series 2001 PT-507 DN (Merrill Lynch & Co. Guaranty)
3.99%(b)(c)(d)	01/08/07		4,900		4,900,000

20

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

OHIO MUNICIPAL MONEY MARKET PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
AFFILIATED INVESTMENTS (Continued)
Rickenbacker Port Authority RB (Merrill Lynch P-Float Trust Receipts) Series 2004 PT-2453 AMT DN (Merrill Lynch & Co. Guaranty)
4.02%(b)(c)(d)	01/08/07	$	5,025	$	5,025,000
TOTAL AFFILIATED INVESTMENTS
(Cost $9,925,000)					9,925,000
TOTAL INVESTMENTS IN SECURITIES — 100.0%
(Cost $163,251,151(a))					163,251,151
OTHER ASSETS IN EXCESS OF LIABILITIES — 0.0%					56,181
NET ASSETS — 100.0%				$	163,307,332

(a) Aggregate cost for federal income tax purposes.

(b) Rates shown are the rates as of December 31, 2006 and maturities shown are the next interest readjustment date or the date the principal owed can be recovered through demand.

(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional investors. As of December 31, 2006, the Portfolio held 14.8% of its net assets, with a current market value of $24,220,000, in securities restricted as to resale.

(d) Security insured by an affiliate.

21

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS — 92.0%
Pennsylvania — 91.2%
Allegheny County Apartment Authority RB Putters Series 1594 AMT DN (FGIC Insurance, J.P. Morgan Chase & Co. Liquidity Facility)
3.98%(b)(c)	01/08/07	$	1,000	$	1,000,000
Allegheny County IDRB (Carnegie Museums Pittsburgh Project) Series 2005 DN (Citizens Bank of Pennsylvania LOC) (Aaa, VMIG-1)
3.95%(c)	01/08/07		4,000		4,000,000
Allegheny County IDRB (Commonwealth Development Parkway Project) Series 1994A DN (National City Bank N.A. LOC) (Aa3)
3.95%(c)	01/08/07		1,900		1,900,000
Allegheny County IDRB (UPMC Health System Project) Series 2002C DN (Comerica Bank N.A. LOC) (A-1)
3.93%(c)	01/08/07		1,600		1,600,000
Beaver County IDA PCRB (First Energy Generation Project) Series 2006 DN (Barclays Bank PLC LOC) (A-1+, VMIG-1)
3.98%(c)	01/02/07		14,300		14,300,000
Berks County IDRB (Beacon Container Corp. Project) Series 1997A AMT DN (Wachovia Bank N.A. LOC) (P-1)
4.07%(c)	01/08/07		310		310,000
Berks County IDRB (Tray Pak Co. Project) Series 2001A AMT DN (Wachovia Bank N.A. LOC)
4.07%(c)	01/08/07		2,060		2,060,000
Bermudian Springs School District GO Series 2006 DN (FSA Insurance, Royal Bank of Canada SBPA) (VMIG-1)
3.91%(c)	01/08/07		10,500		10,500,000
Blair County IDRB Series 2003 AMT DN (Fulton Bank LOC) (A-1, VMIG-1)
4.11%(c)	01/08/07		1,960		1,960,000
Bucks County IDRB (LTL Color Compounders Project) Series 1999B AMT DN (Wilmington Trust Co. LOC)
4.17%(c)	01/08/07		225		225,000
Butler County IDRB (Concordia Lutheran Project) Series 2000B DN (Radian Insurance) (A-1+)
3.93%(c)	01/08/07		6,200		6,200,000
Butler County IDRB (Concordia Lutheran Project) Series 2004A DN (Bank of America N.A. LOC) (A-1+)
3.91%(c)	01/08/07		9,700		9,700,000
Cambria County IDA Resource Recovery RB (Cambria Cogen Co. Project) Series 1998A-2 AMT DN (Bayerische Landesbank Girozentrale LOC) (VMIG-1)
4.07%(c)	01/08/07		16,000		16,000,000
Carlisle Area School District GO Series 2004-G44 DN (MBIA Insurance, J.P. Morgan Chase & Co. SBPA) (VMIG-1)
3.97%(b)(c)	01/08/07		2,015		2,015,000
Chester County IDA Student Housing RB (University Student Housing Ltd. Project) Series 2003 DN (Royal Bank of Scotland LOC) (VMIG-1)
3.95%(c)	01/08/07		8,150		8,150,000
Chester County IDRB (RV Industrial, Inc. Project) Series 2001 AMT DN (M&T Bank Corp. LOC) (A-1)
4.06%(c)	01/08/07		2,750		2,750,000
City of Philadelphia Municipal Commercial Paper (Morgan Guaranty Trust LOC)
3.80%	01/08/07		8,135		8,135,000
Crawford County IDRB Series 2000 AMT DN (National City Bank N.A. LOC)
4.08%(c)	01/08/07		1,035		1,035,000
Cumberland County Municipal Authority RB (Presbyterian Homes Project) Series 2005B MB (Radian Insurance, Wachovia Bank N.A. LOC) (A-1+)
3.65%(c)	12/03/07		2,900		2,900,000
Dauphin County IDRB Series 2005 AMT DN (Citizens Bank of Pennsylvania LOC) (A-1+)
3.94%(c)	01/08/07		9,000		9,000,000
Delaware County IDA RB (Melmark, Inc. Project) Series 2006 DN (Commerce Bank N.A. LOC)
3.96%(c)	01/08/07		750		750,000
Delaware County IDA RB (Resource Recovery Facility Project) Series 2006G DN (A-1+, P-1)
3.88%(c)	01/08/07		4,000		4,000,000
Delaware County IDA RB Putters Series 2006-1497 AMT DN (FGIC Insurance, J.P. Morgan Chase & Co. Liquidity Facility) (A-1+)
3.97%(b)(c)	01/08/07		3,500		3,500,000
Delaware County RB (Riddle Village Project) Series 2006 DN (Sovereign Bank LOC, Lloyds TSB Bank PLC LOC) (A-1+)
3.92%(c)	01/08/07		10,900		10,900,000
Delaware Valley Regional Finance Authority Local Government RB Series 1985B DN (National Australia Bank Ltd. LOC) (A-2, VMIG-1)
3.91%(c)	01/08/07		1,200		1,200,000
East Hempfield Township IDRB (Herley Industrial, Inc. Project) Series 2001 AMT DN (M&T Bank Corp. LOC) (A-1)
4.06%(c)	01/08/07		2,475		2,475,000

22

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS (Continued)
Pennsylvania (Continued)
East Hempfield Township IDRB (Herley Industrial, Inc. Project) Series 2005 AMT DN (M&T Bank Corp. LOC) (A-1, VMIG-1)
4.06%(c)	01/08/07	$	2,700	$	2,700,000
Franklin County IDRB (Chambersburg Hospital Project) Series 2000 DN (AMBAC Insurance, Wachovia Bank N.A. SBPA) (A-1)
3.96%(c)	01/08/07		1,950		1,950,000
Franklin County IDRB (Precast System Project) Series 2001A AMT DN (M&T Bank Corp. LOC) (A-1)
4.06%(c)	01/08/07		1,760		1,760,000
Geisinger Authority Health System RB (Geisinger Health System Project) Series 2005B DN (A-1+, VMIG-1)
3.98%(c)	01/02/07		400		400,000
Geisinger Authority Health System RB (Geisinger Health System Project) Series 2005C DN (Wachovia Bank N.A. LOC) (A-1+, VMIG-1)
3.98%(c)(d)	01/02/07		200		200,000
Horizon Hospital System Authority Health & Housing Facility RB (St. Paul Homes Project) Series 2002 DN (M&T Bank Corp. LOC) (VMIG-1)
3.96%(c)	01/08/07		7,345		7,345,000
Horizon Hospital System Authority Health & Housing Facility RB (St. Paul Homes Project) Series 2005 DN (M&T Bank Corp. LOC) (A-1+)
3.96%(c)	01/08/07		7,900		7,900,000
Indiana County IDRB (Conemaugh Project) Series 1997A AMT DN (Bank One N.A. LOC) (VMIG-1)
3.97%(c)	01/08/07		8,800		8,800,000
Lackawanna County IDRB (Herff Jones, Inc. Project) Series 2001 AMT DN (National City Bank N.A. LOC)
4.03%(c)	01/08/07		2,800		2,800,000
Lancaster County Hospital Authority RB (Ephrata Community Hospital Project) Series 2006 DN (Fulton Bank LOC) (VMIG-1)
4.00%(c)	01/08/07		6,600		6,600,000
Lancaster County Hospital Authority RB (Health Center Luthercare Project) Series 1999 DN (M&T Bank Corp. LOC) (A-1)
3.96%(c)	01/08/07		4,965		4,965,000
Lancaster County Hospital Authority RB (Landis Homes Retirement Community Project) Series 2002 DN (M&T Bank Corp. LOC) (A-1)
3.96%(c)	01/08/07		8,405		8,405,000
Lancaster County IDRB (Clean Creek Partners Project) Series 2000 AMT DN (M&T Bank Corp. LOC) (A-1)
4.06%(c)	01/08/07		4,705		4,705,000
Lancaster County IDRB (D&P Skibo LLC Project) Series 2001 AMT DN (Wachovia Bank N.A. LOC)
4.07%(c)	01/08/07		1,370		1,370,000
Lancaster County IDRB (John F. Martin & Sons Project) Series 2001 AMT DN (Fulton Bank LOC) (A-2)
4.16%(c)	01/08/07		700		700,000
Lancaster County IDRB (Oakfront LP Project) Series 2001 AMT DN (M&T Bank Corp. LOC) (A-2, P-1)
4.06%(c)	01/08/07		2,030		2,030,000
Langhorne Manor Boro Higher Education & Health Authority RB (Retirement Wesley Enhanced Living Project) Series 2005A DN (A-1+)
4.00%(c)	01/02/07		4,300		4,300,000
Langhorne Manor Boro Higher Education & Health Authority RB (Retirement Wesley Enhanced Living Project) Series 2005B DN (A-1+)
4.00%(c)	01/02/07		1,400		1,400,000
Lawrence County IDRB (L&N Metallurgical Products Project) Series 1996 AMT DN (Banque Nationale de Paribas LOC)
4.06%(c)	01/08/07		3,820		3,820,000
Lebanon County Health Facility RB (Cornwall Manor Project) Series 2002 DN (Radian Insurance, Fleet National Bank SBPA) (A-1+)
3.99%(c)	01/08/07		5,000		5,000,000
Lebanon County Health Facility RB (Evangelican Long Church Retirement Village Project) Series 2000 DN (Northern Trust LOC) (A-1+)
3.96%(c)	01/08/07		2,815		2,815,000
Lehigh County General Purpose Authority RB (St. Lukes Hospital Project) Series 2001 DN (Wachovia Bank N.A. LOC) (A-1)
3.95%(c)	01/02/07		4,300		4,300,000
Montgomery County Higher Education & Health Authority RB (Pennsylvania Higher Education & Health Loan Project) Series 1996A DN (M&T Bank Corp. LOC) (A-2)
3.99%(c)	01/08/07		2,600		2,600,000
Montgomery County IDRB (Apple Fresh Foods Ltd. Project) Series 1996 AMT DN (Wachovia Bank N.A. LOC) (VMIG-1)
4.00%(c)	01/08/07		600		600,000

23

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS (Continued)
Pennsylvania (Continued)
Northampton County IDRB (Bethlehem Contracting Project) Series 2001A AMT DN (M&T Bank Corp. LOC) (A-1)
4.06%(c)	01/08/07	$	3,080	$	3,080,000
Northampton County IDRB (Trent Family Partnership Project) Series 2002 AMT DN (Wachovia Bank N.A. LOC)
4.07%(c)	01/08/07		1,890		1,890,000
Pennsylvania Economic Development Financing Authority Health System RB (Jefferson Health Systems Project) Series 2006 DN (Wachovia Bank N.A. SBPA) (A-1+)
3.90%(c)	01/08/07		6,000		6,000,000
Pennsylvania Economic Development Financing Authority RB (AMC Delancey Traditions Project) Series 2006 AMT DN (Citizens Bank of Pennsylvania LOC) (A-1+)
3.97%(c)	01/08/07		3,200		3,200,000
Pennsylvania Economic Development Financing Authority RB (Homewood Retirement Project) Series 1992E DN (M&T Bank Corp. LOC) (VMIG-1)
3.94%(c)	01/08/07		4,250		4,250,000
Pennsylvania Economic Development Financing Authority RB (Material Technology Project) Series 2000D AMT DN (Wachovia Bank N.A. LOC)
4.02%(c)	01/08/07		600		600,000
Pennsylvania Economic Development Financing Authority RB (Sunoco, Inc. Project) Series 2004A AMT DN (Sunoco, Inc. Guaranty) (A-2, P-2)
4.12%(c)	01/08/07		4,700		4,700,000
Pennsylvania Energy Development Authority RB (B&W Ebensburg Project) Series 1988 AMT DN (Swiss Bank LOC) (A-1+, VMIG-1)
3.95%(c)	01/08/07		1,000		1,000,000
Pennsylvania GO Putters Series 2006-1382 DN (J.P. Morgan Chase & Co. Liquidity Facility) (A-1+)
3.97%(c)	01/08/07		3,550		3,550,000
Pennsylvania GO Series 2006R ROC-II-R-506 DN (FSA & MBIA Insurance, Citibank N.A. Liquidity Facility) (VMIG-1)
3.95%(b)(c)	01/08/07		4,260		4,260,000
Pennsylvania Higher Educational Assistance Agency Student Loan RB Series 1988A AMT DN (Student Loan Marketing Assoc. Guaranty, WestLB AG SBPA) (A-1+, VMIG-1)
3.95%(c)	01/08/07		8,000		8,000,000
Pennsylvania Higher Educational Assistance Agency Student Loan RB Series 1988C AMT DN (Student Loan Marketing Assoc. LOC) (A-1+, VMIG-1)
3.95%(c)	01/08/07		6,950		6,950,000
Pennsylvania Higher Educational Assistance Agency Student Loan RB Series 1988E AMT DN (Lloyds TSB Bank PLC LOC, Merrill Lynch Capital Services SBPA) (A-1+, VMIG-1)
3.95%(c)(e)	01/08/07		6,100		6,100,000
Pennsylvania Higher Educational Assistance Agency Student Loan RB Series 1994A AMT DN (Student Loan Marketing Assoc. Guaranty) (A-1+, VMIG-1)
3.95%(c)	01/08/07		2,300		2,300,000
Pennsylvania Higher Educational Assistance Agency Student Loan RB Series 1997A AMT DN (Dexia Credit Local SBPA) (A-1+, VMIG-1)
4.00%(c)	01/08/07		2,300		2,300,000
Pennsylvania Higher Educational Assistance Agency Student Loan RB Series 2001A AMT DN (AMBAC Insurance) (A-1+, VMIG-1)
4.00%(c)	01/08/07		1,000		1,000,000
Pennsylvania Higher Educational Assistance Agency Student Loan RB Series 2001B AMT DN (Multiple LOCs) (VMIG-1)
3.96%(c)	01/08/07		4,200		4,200,000
Pennsylvania Higher Educational Assistance Agency Student Loan RB Series 2002A AMT DN (FSA Insurance, Multiple SBPA’s) (A-1+, VMIG-1)
4.00%(c)	01/08/07		6,600		6,600,000
Pennsylvania Higher Educational Facilities Authority RB (Assoc. of Independent Colleges & Universities Project) Series 2004M-3 MB (M&T Bank Corp. LOC) (A-1)
3.63%(c)	05/01/07		5,000		5,000,000
Pennsylvania Higher Educational Facilities Authority RB (Carnegie Mellon University Project) Series 1995B DN (Morgan Guaranty Trust SBPA) (A-1+)
3.99%(c)	01/02/07		1,800		1,800,000
Pennsylvania Higher Educational Facilities Authority RB (Carnegie Mellon University Project) Series 1995D DN (Morgan Guaranty Trust SBPA) (A-1+)
3.99%(c)	01/02/07		2,000		2,000,000

24

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS (Continued)
Pennsylvania (Continued)
Pennsylvania Higher Educational Facilities Authority RB (Drexel University Project) Series 2003B DN (Allied Irish Bank PLC Liquidity Facility) (A-1, VMIG-1)
3.91%(c)	01/08/07	$	2,200	$	2,200,000
Pennsylvania Higher Educational Facilities Authority RB (Mount Aloysuis College Project) Series 2003 DN (Allied Irish Bank PLC LOC) (A-1)
3.94%(c)	01/08/07		2,500		2,500,000
Pennsylvania Higher Educational Facilities Authority RB (Puttable Tax Exempt Receipts) Series 2006-1271 DN (J.P. Morgan Chase & Co. Liquidity Facility) (A-1+)
3.97%(b)(c)	01/08/07		4,870		4,870,000
Pennsylvania Higher Educational Facilities Authority RB (Student Assoc. Housing, Inc. Project) Series 2006A DN (Citizens Bank of Pennsylvania LOC) (VMIG-1)
3.95%(c)	01/08/07		7,895		7,895,000
Pennsylvania Higher Educational Facilities Authority RB Series 1998 DN (Banque Nationale de Paribas LOC) (VMIG-1)
3.98%(c)	01/08/07		2,700		2,700,000
Pennsylvania Higher Educational Facilities Authority RB Series 2006-1547 DN (AMBAC Insurance, Morgan Stanley Group Liquidity Facility) (VMIG-1)
3.67%(b)(c)	01/08/07		6,710		6,710,000
Pennsylvania Housing Finance Agency RB Putters Series 2005-1213 AMT DN (J.P. Morgan Chase & Co. Liquidity Facility) (VMIG-1)
3.98%(b)(c)	01/08/07		2,055		2,055,000
Pennsylvania Housing Finance Agency Single Family Mortgage RB Putters Series 2006-1592 AMT DN (J.P. Morgan Chase & Co. Liquidity Facility)
3.98%(b)(c)	01/08/07		3,800		3,800,000
Pennsylvania Housing Finance Agency Single Family Mortgage RB Series 1992-1 AMT DN (Landesbank Hessen-Thuringen Girozentrale SBPA) (VMIG-1)
3.96%(c)	01/08/07		8,000		8,000,000
Pennsylvania Housing Finance Agency Single Family Mortgage RB Series 2004-83B AMT DN (Landesbank Hessen-Thuringen Girozentrale SBPA) (A-1+, VMIG-1)
3.95%(c)	01/08/07		3,800		3,800,000
Pennsylvania Housing Finance Agency Single Family Mortgage RB Series 2004-83C AMT DN (Landesbank Hessen-Thuringen Girozentrale SBPA)
3.95%(c)	01/08/07		1,700		1,700,000
Pennsylvania Housing Finance Agency Single Family Mortgage RB Series 2004-85B AMT DN (Landesbank Hessen-Thuringen Girozentrale SBPA) (A-1+, VMIG-1)
3.95%(c)	01/08/07		1,625		1,625,000
Pennsylvania Housing Finance Agency Single Family Mortgage RB Series 2004-85C AMT DN (Landesbank Hessen-Thuringen Girozentrale SBPA) (A-1+, VMIG-1)
3.95%(c)	01/08/07		7,145		7,145,000
Pennsylvania Housing Finance Agency Single Family Mortgage RB Series 2005-89 AMT DN (Depfa Bank PLC SBPA) (VMIG-1)
3.95%(c)	01/08/07		7,400		7,400,000
Pennsylvania Housing Finance Agency Single Family Mortgage RB Series 2006C-95 AMT DN (Dexia Bank N.A. SBPA) (A-1+, VMIG-1)
3.95%(c)	01/08/07		8,000		8,000,000
Pennsylvania Housing RB (Lehman Municipal Trust Receipts) Series 2006K-57 AMT DN (Lehman Liquidity Co. Liquidity Facility) (VMIG-1)
4.11%(b)(c)	01/08/07		2,500		2,500,000
Pennsylvania Turnpike Commission RB (ABN-AMRO Munitops Trust Certificates) Series 2004-9 DN (AMBAC Insurance, ABN-AMRO Bank N.V. SBPA) (VMIG-1)
3.95%(b)(c)	01/08/07		2,785		2,785,000
Philadelphia Authority for Industrial Development RB (Fox Chase Cancer Center Project) Series 1997 DN (Morgan Guaranty Trust LOC) (A-1+)
3.99%(c)	01/02/07		1,000		1,000,000
Philadelphia Authority for Industrial Development RB (Gift of Life Donor Program Project) Series 2003 DN (Commerce Bank N.A. LOC) (A-1, VMIG-1)
3.94%(c)	01/08/07		2,815		2,815,000

25

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS (Continued)
Pennsylvania (Continued)
Philadelphia Authority for Industrial Development RB (Municipal Cerificates) Series 2006-1014 DN (FGIC Insurance, Bank of New York Liquidity Facility) (A-1+)
3.94%(c)	01/08/07	$	3,100	$	3,100,000
Philadelphia Authority for Industrial Development RB (Universal Community Homes Project) Series 2003 DN (Wachovia Bank N.A. LOC)
4.02%(c)	01/08/07		2,210		2,210,000
Philadelphia Authority IDRB (Airport Project) Series 1998P-1 AMT DN (FGIC Insurance, Bank of America N.A. SBPA) (A-1+)
4.06%(b)(c)	01/08/07		5,000		5,000,000
Philadelphia Authority IDRB (Airport Project) Series 2005C AMT DN (MBIA Insurance, J.P. Morgan Chase & Co. SBPA) (A-1+, VMIG-1)
4.00%(c)	01/08/07		8,900		8,900,000
Philadelphia Authority IDRB (Greater Philadelphia Health System Project) Series 2003 DN (Commerce Bank N.A. Liquidity Facility) (VMIG-1)
3.94%(c)	01/08/07		1,605		1,605,000
Philadelphia Authority Municipal Securities Trust Certificates IDRB Series 2001-9016A DN (FGIC Insurance, Bear Stearns Capital Markets Liquidity Facility) (A-1)
3.92%(b)(c)	01/08/07		6,075		6,075,000
Philadelphia Hospitals & Higher Education Facilities Authority Hospital RB (Children’s Hospital Project) Series 2003A DN (Morgan Guaranty Trust LOC) (A-1+, VMIG-1)
3.99%(c)	01/02/07		2,000		2,000,000
Philadelphia Hospitals & Higher Education Facilities Authority Hospital RB (Children’s Hospital Project) Series 2005A DN (Fleet National Bank LOC) (A-1+, VMIG-1)
3.99%(c)	01/02/07		1,100		1,100,000
Philadelphia Hospitals & Higher Education Facilities Authority RB (Temple University Health Project) Series 2005A DN (Wachovia Bank N.A. LOC) (A-1+, VMIG-1)
3.96%(c)	01/08/07		5,500		5,500,000
Philadelphia Redevelopment Authority Multi-Family Housing RB Series 2006G-1 AMT DN (The Goldman Sachs Group, Inc. Guaranty, The Goldman Sachs Group, Inc. SBPA) (F-1)
4.00%(b)(c)	01/08/07		20,395		20,395,000
Philadelphia Water RB (ABN-AMRO Munitops Trust Certificates) Series 2005-15 AMT MB (FSA Insurance, ABN-AMRO Bank N.V. SBPA) (F-1+)
3.66%(b)(c)	05/30/07		5,395		5,395,000
Southcentral General Authority RB (Homewood Hanover Project) Series 2003 DN (M&T Bank Corp. LOC) (A-1)
3.96%(c)	01/08/07		18,500		18,500,000
Southcentral General Authority RB (York Cerebral Palsy Home Project) Series 2000 DN (Fulton Bank LOC) (A-1)
4.01%(c)	01/08/07		3,500		3,500,000
Southcentral General Authority RB Series 2003 DN (AMBAC Insurance, RBC Centura Bank SBPA) (A-1)
3.96%(c)	01/08/07		8,000		8,000,000
St. Mary Hospital Authority Bucks County RB (Catholic Health Initiatives Project) Series 2004C DN (A-1+, VMIG-1)
3.93%(c)	01/08/07		1,800		1,800,000
State Public School Building Authority RB (Parkland School District Project) Series 1999D DN (FGIC Insurance) (A-1)
3.96%(c)	01/08/07		955		955,000
State Public School Building Authority RB (Philadelphia School District Project, ABN-AMRO Munitops Trust Certificates) Series 2003-24 DN (FSA Insurance, ABN-AMRO Bank N.V. SBPA) (VMIG-1)
3.95%(b)(c)	01/08/07		2,145		2,145,000
State Public School Building Authority RB Putters Series 2006-1257 DN (FSA Insurance, PB Capital Corp. Liquidity Facility) (VMIG-1)
3.97%(b)(c)	01/08/07		3,230		3,230,000
Union County Hospital Authority RB (Evangelical Community Hospital Project) Series 2001 MB (Fleet National Bank SBPA, Radian Asset Assurance, Inc. Guaranty) (A-1)
3.40%(c)	02/01/07		8,210		8,210,000
Union County IDRB (Stabler Cos., Inc. Project) Series 2001 AMT DN (M&T Bank Corp. LOC) (A-1)
4.06%(c)	01/08/07		6,785		6,785,000

26

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS (Continued)
Pennsylvania (Continued)
University of Pittsburgh of the Commonwealth Systems of Higher Education RB (Pitt Panthers Asset Notes Project) Series 2006 MB (GO of University LOC) (SP1+, MIG-1)
4.50%	08/24/07	$	3,300	$	3,316,349
Upper Merion General Authority Lease RB Series 2003 DN (Commerce Bank N.A. LOC) (VMIG-1)
3.94%(c)	01/08/07		1,085		1,085,000
Upper Merion Municipal Utility Authority RB Series 2003 DN (Commerce Bank N.A. LOC) (VMIG-1)
3.94%(c)	01/08/07		170		170,000
Upper St. Clair Township GO (ABN-AMRO Munitops Trust Certificates) Series 2002 DN (FSA Insurance, ABN-AMRO Bank N.V. SBPA) (AAA, MIG-1)
3.65%(b)(c)	01/02/07		5,150		5,150,000
Venango IDRB (Scrubgrass Project) Series 2006 TECP (Dexia Credit Local LOC) (A-1+, P-1)
3.70%	01/11/07		30,708		30,708,000
Washington County RB (University of Pennsylvania Project) Series 2004 DN (A-1+, VMIG-1)
3.95%(c)	01/08/07		725		725,000
Westmoreland County IDRB (Industrial Development McCutcheon Enterprise Project) Series 1999 AMT DN (National City Bank N.A. LOC)
4.08%(c)	01/08/07		1,700		1,700,000
York County Hospital Authority RB (Homewood Retirement Centers of The United Church of Christ, Inc. Project) Series 1990 DN (M&T Bank Corp. LOC) (VMIG-1)
3.94%(c)	01/08/07		4,500		4,500,000
York County IDRB (Allied-Signal, Inc. Project) Series 1993 DN (A-1)
4.15%(c)	01/08/07		1,000		1,000,000
York County IDRB (Interstate Holdings Co. Project) Series 2003 AMT DN (Wachovia Bank N.A. Liquidity Facility)
4.07%(c)	01/08/07		1,245		1,245,000
York County IDRB (Raich Family Ltd. Partner Project) Series 2000 AMT DN (M&T Bank Corp. LOC) (A-1)
4.06%(c)	01/08/07		2,285		2,285,000
York County IDRB (York Sheet Metal, Inc. Project) Series 1998 DN (Wachovia Bank N.A. LOC)
4.04%(c)	01/08/07		2,310		2,310,000
York General Authority RB (Strand Capital Performing Arts Center Project) Series 2002 DN (M&T Bank Corp. LOC) (A-2)
3.99%(c)	01/08/07		5,700		5,700,000
					546,609,349
Puerto Rico — 0.8%
Commonwealth of Puerto Rico Infrastructure Financing Authority RB (Wachovia Merlots Trust Receipts) Series 2005A-21 DN (AMBAC Insurance, Wachovia Bank N.A. SBPA) (VMIG-1)
3.60%(b)(c)	05/15/07		4,985		4,985,000
TOTAL MARKET VALUE OF SECURITIES BEFORE AFFILIATED INVESTMENTS — 92.0%
(Cost $551,594,349)					551,594,349
AFFILIATED INVESTMENTS — 7.7%
Pennsylvania Economic Development Financing Authority RB (Merrill Lynch P-Float Trust Receipts) Series 2004-1282 AMT DN (Merrill Lynch & Co. LOC, Merrill Lynch Capital Securities Guaranty)
3.97%(b)(c)(e)	01/08/07		5,000		5,000,000
Pennsylvania Higher Educational Facilities Authority RB (Merrill Lynch P-Float Trust Receipts) Series 2004 MT-042 DN (Lloyds TSB Bank PLC LOC, Merrill Lynch Capital Services SBPA)
3.97%(b)(c)(e)	01/08/07		19,225		19,225,000
Pennsylvania Housing Finance Agency Single Family Mortgage RB Series 2004-82B AMT DN (Landesbank Hessen-Thuringen Girozentrale SBPA)
3.94%(c)	01/08/07		11,540		11,540,000
Philadelphia Redevelopment Authority RB Spear DB-134 Series 2005 AMT DN (FGIC Insurance, Deutsche Bank Liquidity Facility)
3.96%(b)(c)	01/08/07		10,295		10,295,000
TOTAL AFFILIATED INVESTMENTS
(Cost $46,060,000)					46,060,000
TOTAL INVESTMENTS IN SECURITIES — 99.7%
(Cost $597,654,349(a))					597,654,349
OTHER ASSETS IN EXCESS OF LIABILITIES — 0.3%					1,739,109
NET ASSETS — 100.0%				$	599,393,458

27

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

PENNSYLVANIA MUNICIPAL MONEY MARKET PORTFOLIO (CONCLUDED)

(a) Aggregate cost for federal income tax purposes.

(b) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional investors. As of December 31, 2006, the Portfolio held 20.1% of its net assets, with a current market value of $120,390,000, in securities restricted as to resale.

(c) Rates shown are the rates as of December 31, 2006 and maturities shown are the next interest readjustment date or the date the principal owed can be recovered through demand.

(d) Illiquid Security. As of December 31, 2006, the Portfolio held 0.1% of its net assets, with a current market value of $200,000, in illiquid securities.

(e) Security insured by an affiliate.

28

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

VIRGINIA MUNICIPAL MONEY MARKET PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS — 93.6%
Puerto Rico — 6.8%
Commonwealth of Puerto Rico Electric Power Authority RB (Trust Receipts) Series 2002-1 DN (MBIA Insurance, Bank of New York SBPA) (A-1+)
3.92%(b)(c)	01/08/07	$	800	$	800,000
Commonwealth of Puerto Rico Infrastructure Financing Authority RB (Wachovia Merlots Trust Receipts) Series 2005A-21 DN (AMBAC Insurance, Wachovia Bank N.A. SBPA) (VMIG-1)
3.60%(b)(c)	05/15/07		250		250,000
Commonwealth of Puerto Rico Municipal Securities Trust Certificates RB Series 2000A DN (FSA Insurance, Bear Stearns Capital Markets Liquidity Facility) (A-1)
3.86%(b)(c)	01/08/07		500		500,000
Commonwealth of Puerto Rico RB (Royal Bank of Canada Municipal Products, Inc. Trust Receipts) Series 2006 DN (AMBAC Insurance, Royal Bank of Canada Liquidity Facility) (A-1+)
3.93%(b)(c)	01/08/07		700		700,000
Puerto Rico HFA RB (Lehman Municipal Trust Receipts Capital Funding Project) Series 2006K-48 DN (Lehman Liquidity Co. Liquidity Facility, HUD Loan Guaranty) (Aa3, VMIG-1)
4.01%(b)(c)	01/08/07		2,395		2,395,000
					4,645,000
Virginia — 86.8%
Alexandria IDRB (American Correctional Assoc. Project) Series 2006 DN (Bank of America N.A. LOC) (VMIG-1)
3.90%(c)	01/08/07		3,000		3,000,000
Alexandria IDRB (Goodwin House Project) Series 2005 DN (Wachovia Bank N.A. LOC) (A-1)
3.97%(c)	01/02/07		965		965,000
Alexandria IDRB (YMCA of Billings Project) Series 1998 DN (M&T Bank Corp. LOC) (A-1)
3.97%(c)	01/08/07		3,490		3,490,000
Arlington County IDRB (Woodbury Park Project) Series 2005A DN (Federal Home Loan Mortgage Liquidity Facility) (AAA, VMIG-1)
3.91%(c)	01/08/07		3,270		3,270,000
Chesapeake Bay Bridge & Tunnel Commonwealth District RB (Wachovia Merlots Trust Receipts) Series 2003 DN (MBIA Insurance, Wachovia Bank N.A. Liquidity Facility) (VMIG-1)
3.95%(b)(c)	01/08/07		900		900,000
City of Richmond GO Series 2006 MB
3.60%	02/06/07		500		500,000
Clarke County IDA Hospital Facilities RB (Winchester Medical Center, Inc. Project) Series 2000 DN (FSA Insurance, Morgan Guaranty Trust SBPA) (A-1+, VMIG-1)
4.00%(c)	01/08/07		1,175		1,175,000
Fairfax County Economic Development Authority RB (ABN-AMRO Munitops Trust Certificates Route 28 Project) Series 2003 DN
3.94%(b)(c)	01/08/07		1,000		1,000,000
Fairfax County Economic Development Authority RB (National Ind. for Severe Handicap Project) Series 2002 DN (SunTrust Bank LOC) (VMIG-1)
3.92%(c)	01/08/07		450		450,000
Fairfax County Economic Development Authority RB (Retirement Greenspring Project) Series 2006B DN (Wachovia Bank N.A. LOC) (A-1+)
3.91%(c)	01/08/07		3,900		3,900,000
Fairfax County Economic Development Authority RB (Smithsonian Institute Project) Series 2006A DN (Bank of America N.A. LOC) (A-1+, VMIG-1)
3.85%(c)	01/08/07		1,500		1,500,000
Fairfax County GO Series 2002A MB (AAA, Aaa)
5.00%	06/01/07		2,485		2,499,887
Fairfax County IDRB (Inova Health Systems Project) Series 2005A-2 DN (A-1+, VMIG-1)
3.87%(c)	01/08/07		3,300		3,300,000
Fairfax County IDRB (Inova Health Systems Project) Series 2005C-2 DN (A-1+, VMIG-1)
3.87%(c)	01/08/07		2,500		2,500,000
Hampton Redevelopment & Housing Authority RB (Multi-Family Housing Project) Series 1998 DN (Federal National Mortgage Assoc. Credit Support & LOC) (VMIG-1)
3.90%(c)	01/08/07		400		400,000
Hampton Roads Regional Jail Authority Facilities RB (Citibank Trust Receipts) Series 2004 ROC-RR-II-R-2156 DN (MBIA Insurance, Citibank N.A. Liquidity Facility) (VMIG-1)
3.95%(b)(c)	01/08/07		4,205		4,205,000

29

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

VIRGINIA MUNICIPAL MONEY MARKET PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS (Continued)
Virginia (Continued)
Loudoun County IDRB (Hill School Project) Series 2002 DN (SunTrust Bank LOC) (AA-, A-1+)
3.92%(c)	01/08/07	$	1,100	$	1,100,000
Loudoun County IDRB (Howard Hughes Medical Institute Project) Series 2003C DN (A-1+, VMIG-1)
3.96%(c)	01/08/07		1,300		1,300,000
Loudoun County IDRB (Howard Hughes Medical Institute Project) Series 2003D DN (A-1+, VMIG-1)
4.00%(c)	01/08/07		400		400,000
Loudoun County IDRB (Howard Hughes Medical Institute Project) Series 2003F DN (A-1+, VMIG-1)
3.88%(c)	01/08/07		500		500,000
Montgomery County IDRB (Virginia Technical Foundation Project) Series 2005 DN (Bank of America N.A. LOC) (VMIG-1)
3.99%(c)	01/02/07		1,890		1,890,000
Richmond IDRB (Diocese of Virginia Church School Project) Series 2001 DN (SunTrust Bank LOC) (VMIG-1)
3.99%(c)	01/02/07		2,315		2,315,000
Roanoke IDRB (Carilion Health Systems Project) Series 2005C-2 DN (FSA Insurance, Wachovia Bank N.A. SBPA) (A-1+, VMIG-1)
3.95%(c)	01/02/07		1,100		1,100,000
University of Virginia RB (ABN-AMRO Munitops Trust Certificates) Series 2005-48 DN (ABN-AMRO Bank N.V. SBPA) (VMIG-1)
3.94%(b)(c)	01/08/07		1,500		1,500,000
University of Virginia RB Series 2003A DN (A-1+, VMIG-1)
3.97%(c)	01/08/07		100		100,000
Virginia Beach Development Authority IDRB (Ocean Ranch Motel Corp. Project) Series 1998 DN (Branch Banking & Trust Co. LOC) (VMIG-1)
3.95%(c)	01/08/07		700		700,000
Virginia Beach Public Improvement GO Series 2002 MB (AA+, Aa1)
5.25%	03/01/07		150		150,354
Virginia College Building Authority RB Series 2003-379 DN (J.P. Morgan Chase & Co. LOC) (A-1+)
3.97%(b)(c)	01/08/07		4,645		4,645,000
Virginia College Building Authority RB Series 2006 DN (Wachovia Bank N.A. SBPA) (A-1+, VMIG-1, F-1+)
4.00%(c)	01/02/07		700		700,000
Virginia GO Series 1997 MB (AAA, Aaa, AAA)
5.00%	06/01/07		940		946,376
Virginia GO Series 2002 MB (AAA)
4.00%	06/01/07		500		501,019
Virginia Public Building Authority RB Series 2005D DN (Dexia Bank N.A. SBPA) (A-1+, VMIG-1, F-1+)
3.87%(c)	01/08/07		2,900		2,900,000
Virginia Public School Authority RB (ROC Trust Receipts) Series 2003R-4050-ROC-II DN (Citigroup Liquidity Facility) (A-1+)
3.95%(b)(c)	01/08/07		1,860		1,860,000
Virginia Public School Authority RB (School Financing Referendum Project) Series 2003D MB (AA+, Aa1)
5.00%	02/01/07		1,300		1,301,625
Winchester Authority Residential Care Facility IDRB (Westminster-Cantenbury Project) Series 2005B DN (Branch Banking & Trust LOC) (VMIG-1)
3.95%(c)	01/08/07		2,700		2,700,000
					59,664,261
TOTAL MARKET VALUE OF SECURITIES BEFORE AFFILIATED INVESTMENTS — 93.6%
(Cost $64,309,261)					64,309,261
AFFILIATED INVESTMENTS — 6.0%
Chesterfield County IDRB (Merrill Lynch P-Float Trust Receipts) Series 2004 PT-2133 DN (Merrill Lynch & Co. Guaranty, Merrill Lynch Capital Services SBPA)
3.99%(b)(c)(d)	01/08/07		1,250		1,250,000
Virginia Commonwealth University RB Series 2006A DN (AMBAC Insurance, Wachovia Bank N.A. LOC)
3.99%(c)	01/02/07		2,400		2,400,000
Virginia Resource Authority Clean Water State Revolving Fund RB (Merrill Lynch P-Float Trust Receipts) Series 2000 PA-790 DN (Merrill Lynch & Co. Guaranty, Merrill Lynch Captial Services SBPA)
3.93%(b)(c)(d)	01/08/07		505		505,000
TOTAL AFFILIATED INVESTMENTS
(Cost $4,155,000)					4,155,000
TOTAL INVESTMENTS IN SECURITIES — 99.6%
(Cost $68,464,261(a))					68,464,261
OTHER ASSETS IN EXCESS OF LIABILITIES — 0.4%					276,023
NET ASSETS — 100.0%				$	68,740,284

30

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

VIRGINIA MUNICIPAL MONEY MARKET PORTFOLIO (CONCLUDED)

(a) Aggregate cost for federal income tax purposes.

(b) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional investors. As of December 31, 2006, the Portfolio held 29.8% of its net assets, with a current market value of $20,510,000, in securities restricted as to resale.

(c) Rates shown are the rates as of December 31, 2006 and maturities shown are the next interest readjustment date or the date the principal owed can be recovered through demand.

(d) Security insured by an affiliate.

31

BLACKROCK FUNDS

Key to Investment Abbreviations

AMBAC	American Municipal Bond Assurance Corp.
AMT	Alternative Minimum Tax
BAN	Bond Anticipation Note
CDC	CDC Funding Group
COP	Certificates of Participation
DN	Demand Notes
FGIC	Financial Guaranty Insurance Co.
FSA	Financial Security Assurance
GO	General Obligation
HFA	Housing Finance Agency
IDA	Industrial Development Authority
IDRB	Industrial Development Revenue Bond
LLC	Limited Liability Co.
LOC	Letter of Credit
MB	Municipal Bond
MBIA	Municipal Bond Insurance Association
PCRB	Pollution Control Revenue Bond
PLC	Public Limited Co.
RAN	Revenue Anticipation Note
RB	Revenue Bond
ROC	Reset Option Certificate
SBPA	Stand-by Bond Purchase Agreement
TAN	Tax Anticipation Note
TECP	Tax-Exempt Commercial Paper
TOC	Tender Option Certificate
TRAN	Tax and Revenue Anticipation Note
XLCA	XL Capital Assurance

The ratings of the investments in the various Portfolios provided by the Fitch Investors Service, Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Service are believed to be the most recent ratings available at December 31, 2006.

32

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

BLACKROCK STRATEGIC PORTFOLIO I

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
U.S. GOVERNMENT & AGENCY OBLIGATIONS — 23.5%
Federal Home Loan Mortgage Corp.
4.62%
(Cost $ 18,138,207)	02/15/07	$	14,600	$	19,291,331
FOREIGN BONDS — 71.4%
Canada — 7.0%
Government of Canada Bonds (CND)
4.00%	09/01/10-06/01/16		3,060		2,615,877
Province of Ontario, Unsecured Notes (NZD)
6.25%	06/16/15		4,610		3,117,872
					5,733,749
France — 3.4%
French Treasury Notes (EUR)
2.50%	06/12/10		2,200		2,770,220
Germany — 14.9%
Bundesobligation (EUR)
4.00%	02/16/07		6,400		8,450,991
3.50%	10/10/08-04/08/11		2,950		3,843,020
					12,294,011
Italy — 3.9%
Buoni Poliennali del Tesoro (EUR)
2.75%	06/15/10		2,500		3,172,728
Japan — 21.9%
Japan Government Bonds (JPY)
1.33%(b)	01/20/21		2,100,000		17,208,689
Japan Government, Treasury Inflation Protected Notes (JPY)
1.10%	09/10/16		98,901		826,688
					18,035,377
Netherlands — 3.5%
Netherland Government Bonds (EUR)
4.00%	01/15/37		2,200		2,855,716
New Zealand — 1.4%
General Electric Capital Corp., Senior Unsubordinated Notes (NZD)
6.50%	09/28/15		1,680		1,138,200
Spain — 11.3%
Bonos y Obligation del Estado (EUR)
3.25%	07/30/10		2,200		2,838,466
5.40%	07/30/11		4,625		6,465,415
					9,303,881
United Kingdom — 4.1%
United Kingdom Treasury Bonds (GBP)
4.75%	09/07/15		1,750		3,416,028
TOTAL FOREIGN BONDS
(Cost $ 58,024,376)					58,719,910
SHORT TERM INVESTMENTS — 5.3%
Federal Home Loan Bank, Discount Notes
4.80%(c)	01/02/07		500		499,933
U.S. Treasury Bills
4.74%(c)(d)	01/04/07		400		399,842
Galileo Money Market Fund			3,433		3,433,373
TOTAL SHORT TERM INVESTMENTS
(Cost $ 4,333,148)					4,333,148
TOTAL INVESTMENTS IN SECURITIES — 100.2%
(Cost $80,495,731(a))					82,344,389
LIABILITIES IN EXCESS OF OTHER ASSETS — (0.2)%					(126,889	)
NET ASSETS — 100.0%					82,217,500

(a) Cost for federal income tax purposes is $80,502,296. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	1,842,093
Gross unrealized depreciation		—
	$	1,842,093

(b) Variable rate security. Rates shown are the rates as of December 31, 2006.

(c) The rate shown is the effective yield at the time of purchase.

(d) Security, or a portion thereof, pledged as collateral with a value of $299,961 on 191 short Euro Bobl futures contracts and 17 short British Gilt futures contracts expiring March 2007. The value of such contracts on December 31, 2006 was $30,985,247, with an unrealized gain of $446,743 (including commissions of $555).

	KEY TO INVESTMENT ABBREVIATIONS
CND	Canadian Dollar
EUR	Euro Currency
GBP	Great British Pound
JPY	Japanese Yen
NZD	New Zealand Dollar

1

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ENHANCED INCOME PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MORTGAGE PASS-THROUGHS — 25.1%
Federal Home Loan Mortgage Corp. ARM
3.53%(b)	05/01/34	$	578	$	557,608
3.55%(b)	07/01/34		458		459,185
4.29%(b)	11/01/34		391		382,651
4.86%(b)	05/01/35		662		654,020
5.00%(b)	09/01/35		557		554,856
5.04%(b)	12/01/35		993		981,676
Federal National Mortgage Assoc.
7.50%	09/01/35		287		298,267
Federal National Mortgage Assoc. 15 Year TBA
6.00%	01/01/22		1,200		1,216,500
Federal National Mortgage Assoc. 30 Year TBA
5.50%	01/01/37		2,700		2,667,938
Federal National Mortgage Assoc. ARM
3.85%(b)	10/01/33		660		652,312
4.86%(b)	06/01/35		364		360,317
5.33%(b)	10/01/35		373		369,346
Government National Mortgage Assoc. II ARM
5.12%(b)	11/20/29		45		45,413
5.50%(b)	08/20/31		77		76,869
3.75%(b)	06/20/34		239		235,254
TOTAL MORTGAGE PASS-THROUGHS
(Cost $9,559,467)					9,512,212
COLLATERALIZED MORTGAGE OBLIGATIONS — 24.9%
Adjustable Rate Mortgage Trust, Series 04-4, Class 5A3
5.72%(b)	03/25/35		104		103,648
Banc of America Funding Corp., Series 04-C, Class 4A2
5.69%(b)	12/20/34		242		242,685
Bear Stearns Mortgage Trust, Series 04-12, Class 1A1
5.70%(b)	01/25/35		198		198,656
Bear Stearns Mortgage Trust, Series 04-13, Class A1
5.72%(b)	11/25/34		280		281,013
Bear Stearns Mortgage Trust, Series 04-7, Class 4A
3.66%(b)	10/25/34		176		175,461
Citigroup Mortgage Loan Trust, Inc., Series 05-2, Class 1A1
4.28%(b)	05/25/35		459		462,578
Countrywide Home Loans, Series 03-37, Class 2A1
4.25%(b)	09/25/33		398		395,908
Countrywide Home Loans, Series 04-29, Class 1A1
5.62%(b)	02/25/35		147		147,021
Credit Suisse First Boston Mortgage Securities Corp., Series 02-10, Class 2A1
7.50%	05/25/32		41		41,690
Federal Home Loan Mortgage Corp., Series 232 (IO)
5.00%(c)	08/01/35		710		169,904
Federal Home Loan Mortgage Corp., Series 2763, Class PA
4.50%	09/15/10		8		7,486
Federal Home Loan Mortgage Corp., Series 3215, Class EP
5.38%	09/15/11		781		779,992
Federal National Mortgage Assoc., Series 93-188, Class K
6.00%	10/25/08		208		208,200
Federal National Mortgage Assoc., Series 02-39, Class FB
5.90%(b)	03/18/32		38		38,541
Federal National Mortgage Assoc., Series 04-25, Class PA
5.50%	10/25/30		90		89,946
Federal National Mortgage Assoc., Series 04-36, Class BS
5.50%	11/25/30		123		123,055
Federal National Mortgage Assoc., Series 04-W10, Class A1
5.75%	08/25/34		62		61,846
Federal National Mortgage Assoc., Series 05-68, Class PB
5.75%	07/25/35		218		218,635
Federal National Mortgage Assoc., Series 05-84, Class XE
5.75%(b)	01/25/26		222		221,819
Federal National Mortgage Assoc., Series 05-84, Class XK
5.75%	08/25/23		210		209,141
Federal National Mortgage Assoc., Series 06-60, Class LK
6.50%	07/25/36		425		429,671
Federal National Mortgage Assoc., Series 377, Class 2 (IO)
5.00%(c)	10/01/36		691		168,703
First Horizon Trust, Series 04-AR2, Class 2A1
4.58%(b)	05/25/34		597		595,113
Goldman Sachs Residential Mortgage Loan Trust, Series 04-11, Class 5A1
4.21%	09/25/34		469		471,787
Goldman Sachs Residential Mortgage Loan Trust, Series 04-9, Class 3A1
3.68%(b)	08/25/34		109		109,175
Goldman Sachs Residential Mortgage Loan Trust, Series 05-AR6, Class 1A1
4.55%(b)	09/25/35		495		489,311
GSAA Home Equity Trust, Series 04-8, Class A3A
5.72%(b)	09/25/34		163		163,586
J.P. Morgan Mortgage Trust, Series 06-A2, Class 4A1
3.88%(b)	08/25/34		550		538,784
Mortgage IT Trust, Series 04-1, Class A1
5.74%(b)	11/25/34		335		335,923
Residential Accredit Loans, Inc., Series 01-QS19, Class A1
6.00%	12/25/16		71		70,747
Structured Mortgage Loan Trust, Series 04-13, Class A2
5.65%(b)	09/25/34		123		123,428

1

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ENHANCED INCOME PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
COLLATERALIZED MORTGAGE OBLIGATIONS (Continued)
Structured Mortgage Loan Trust, Series 04-3AC, Class A2
4.92%(b)	03/25/34	$	166	$	165,116
Washington Mutual Mortgage Loan Trust, Series 05-AR5, Class A6
4.67%(b)	05/25/35		550		548,140
Wells Fargo Mortgage Backed Securities Trust, Series 04-3, Class A1
4.75%	04/25/19		353		341,150
Wells Fargo Mortgage Backed Securities Trust, Series 04-V, Class 1A2
3.83%(b)	10/25/34		715		696,076
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $9,403,045)					9,423,935
COMMERCIAL MORTGAGE BACKED SECURITIES — 19.3%
American Home Mortgage Assets, Series 05-1, Class 3A11
5.62%(b)	11/25/35		304		305,027
Banc of America Commercial Mortgage, Inc., Series 03-1, Class A1
3.88%	09/11/36		416		401,944
Bear Stearns Commercial Mortgage Securities, Series 00-WF, Class A1
7.11%	10/15/32		215		217,831
Chase Commercial Mortgage Securities Corp., Series 00-1, Class A2
7.76%	04/15/32		284		299,901
Commercial Mortgage Acceptance Corp., Series 98-C2, Class A2
6.03%	03/15/08		167		168,085
Commercial Mortgage Pass-Through Certificates, Series 00-C1, Class A2
7.42%	04/15/10		339		355,262
Credit Suisse First Boston Mortgage Securities Corp., Series 98-C1, Class A1B
6.48%	05/17/40		267		269,719
Credit Suisse First Boston Mortgage Securities Corp., Series 00-C1, Class A1
7.32%	04/15/42		247		250,767
Deutsche Alt-A Securities, Inc., Series 06-AF1, Class A1
5.43%(b)	04/25/36		253		253,201
Donaldson, Lufkin & Jenrette, Inc., Commerical Mortgage Corp., Series 00-CKP1, Class A1B
7.18%	11/10/33		350		368,605
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 99-C3, Class A2
7.18%	08/15/36		130		134,530
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 00-C1, Class A2
7.72%	03/15/33		335		354,614
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 03-C2, Class X2 (IO)
0.27%(c)(d)	05/10/40		6,314		26,037
Goldman Sachs Mortgage Securities Corp. II, Series 98-C1, Class A3
6.14%	10/18/30		437		440,771
Homebanc Mortgage Trust, Series 05-4, Class A1
5.62%(b)	10/25/35		539		539,571
Impac Secured Assets Corp., Series 05-2, Class A2A
5.47%(b)	03/25/36		268		267,939
Lehman Brothers-UBS Commercial Mortgage Trust, Series 00-C5, Class A1
6.41%	12/15/19		277		279,308
Nationslink Funding Corp., Series 99, Class 1
6.32%	01/20/31		402		406,704
Opteum Mortgage Acceptance Corp., Series 06-1, Class 1A1A
5.44%(b)	04/25/36		317		316,192
Structured Asset Receivable Trust, Series 04-1
4.13%(b)(d)	04/21/11		450		450,175
TIAA Real Estate Collaterallized Debt Obligation Ltd., Series 01-C1A, Class A4
6.68%(d)	06/19/31		365		375,888
Wachovia Bank Commercial Mortgage Trust, Series 03-C3, Class A1
4.04%	02/15/35		415		403,582
Washington Mutual Asset Securities Corp., Series 05-C1A, Class A1
4.24%(d)	05/25/36		220		216,179
Washington Mutual Asset Securities Corp., Series 05-C1A, Class X (IO)
2.17%(c)(d)	05/25/36		3,723		196,826
TOTAL COMMERCIAL MORTGAGE BACKED SECURITIES
(Cost $7,416,416)					7,298,658
ASSET BACKED SECURITIES — 27.2%
Bank of America Credit Card Trust, Series 06, Class A16
4.73%	05/05/13		325		321,039
Bear Stearns, Inc., Series 05-HE12, Class 1A1
5.45%(b)	12/25/35		273		272,748
Bear Stearns, Inc., Series 06-HE1, Class 1A1
5.44%(b)	01/25/30		245		244,762
Bear Stearns, Inc., Series 06-HE3, Class A1
5.43%(b)	04/25/36		472		471,931
Bear Stearns, Inc., Series 06-PC1, Class A1
5.43%(b)	01/25/29		190		190,348
BMW Vehicle Owner Trust, Series 05-A, Class A3
4.04%	02/25/09		459		457,142
Capital Auto Receivables Asset Trust, Series 04-1, Class A3
2.00%	11/15/07		27		27,103
Capital Auto Receivables Asset Trust, Series 04-2, Class A2
3.35%	02/15/08		372		370,451

2

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ENHANCED INCOME PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
ASSET BACKED SECURITIES (Continued)
Capital Auto Receivables Asset Trust, Series 06-SN1A, Class A2A
5.40%(d)	01/20/09	$	600	$	600,156
Carrington Mortgage Loan Trust, Series 06-OPT1, Class A1
5.42%(b)	02/25/29		410		409,992
Centex Home Equity Loan Trust, Series 06-A, Class AV1
5.40%(b)	06/25/36		436		435,788
Citigroup Mortgage Loan Trust, Inc., Series 06-HE1, Class A1
5.41%(b)	01/25/36		215		214,676
Conseco Finance Securitizations Corp., Series 01-4, Class A3
6.09%(e)	01/01/24		0		479
Countrywide Certificates, Series 05-16, Class 4AV1
5.45%(b)	07/25/26		215		215,075
Countrywide Certificates, Series 05-BC4, Class 2A1
5.44%(b)	11/25/28		126		126,210
Countrywide Certificates, Series 05-IM3, Class A1
5.47%(b)	04/25/28		174		174,460
Encore Credit Receivables Trust, Series 05-4, Class 2A1
5.45%(b)	01/25/36		48		48,425
Fieldstone Mortgage Investment Corp., Series 05-3, Class 2A1
5.47%(b)	02/25/36		213		212,875
First Franklin Mortgage Loan Trust, Series 06-FF3, Class A2A
5.43%(b)	02/25/36		364		363,716
Ford Credit Auto Owner Trust, Series 05-A, Class A3
3.48%	11/15/08		393		390,135
Ford Credit Auto Owner Trust, Series 05-B, Class A3
4.17%	01/15/09		457		454,828
Ford Credit Auto Owner Trust, Series 05-C, Class A2
4.24%	03/15/08		75		75,219
Green Tree Financial Corp., Series 99-1, Class A5
6.11%	09/01/23		211		212,380
GSAA Home Equity Trust, Series 06-2N, Class N
6.00%(d)	12/25/35		60		58,623
Home Equity Asset Trust, Series 05-6, Class 2A1
5.47%(b)	12/25/35		194		194,003
Home Equity Asset Trust, Series 05-7, Class 2A1
5.44%(b)	01/25/36		192		192,403
Honda Auto Receivables Owner Trust, Series 04-2, Class A3
3.30%	06/16/08		57		56,376
Honda Auto Receivables Owner Trust, Series 05-1, Class A3
3.53%	10/21/08		312		310,048
J.P. Morgan Mortgage Acquisition Corp., Series 05-OPT2, Class A2
5.43%(b)	12/25/35		220		220,104
Long Beach Asset Holdings Corp., Series 05-2, Class N1
4.15%(d)	04/25/35		21		20,411
Long Beach Mortgage Loan Trust, Series 06-2, Class 2A1
5.42%(b)	03/25/36		278		278,384
Master Asset Backed Securities Trust, Series 06-FRE1, Class A1
5.42%(b)	12/25/35		257		257,509
Morgan Stanley Capital, Inc., Series 05-HE5, Class A2A
5.45%(b)	09/25/35		146		146,385
New Century Home Equity Loan Trust, Series 05-C, Class A2A
5.43%(b)	12/25/35		168		168,423
Nissan Auto Receivables Owner Trust, Series 03-C, Class A4
2.70%	12/17/07		23		23,356
Nissan Auto Receivables Owner Trust, Series 04-C, Class A3
2.85%	10/15/07		25		24,963
Nissan Auto Receivables Owner Trust, Series 05-A, Class A3
3.54%	10/15/08		16		15,527
Novastar Home Equity Loan, Series 06-2, Class A2A
5.40%(b)	06/25/36		309		309,432
Option One Mortgage Loan Trust, Series 01-4, Class A
5.95%(b)	01/25/32		14		14,256
Option One Mortgage Loan Trust, Series 05-4, Class A2
5.18%	11/25/35		150		149,597
Ownit Mortgage Loan Certificates, Series 05-4, Class A2A1
5.47%(b)	08/25/36		218		218,220
Peoples Choice Home Loan Securities Trust, Series 05-4, Class 1A1
5.47%(b)	12/25/35		63		63,196
Popular Mortgage Pass-Through Trust, Series 04-4, Class AF1
5.60%(b)	09/25/34		201		200,701
Residential Asset Mortgage Products, Inc., Series 05-EFC4, Class A1
5.46%(b)	01/25/26		201		201,515
Specialty Underwriting & Residential Finance, Series 05-BC3, Class A2A
5.47%(b)	06/25/36		140		140,419
Structured Asset Investment Loan Trust, Series 05-10, Class A3
5.44%(b)	12/25/35		253		252,653
Structured Asset Investment Loan Trust, Series 06-BNC1, Class A2
5.42%(b)	03/25/36		247		246,847
USAA Auto Owner Trust, Series 04-1, Class A3
2.06%	04/15/08		6		5,547
USAA Auto Owner Trust, Series 04-2, Class A3
3.03%	06/16/08		41		40,425
USAA Auto Owner Trust, Series 05-1, Class A3
3.90%	07/15/09		221		219,497
TOTAL ASSET BACKED SECURITIES
(Cost $10,333,308)					10,318,758

3

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ENHANCED INCOME PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		V ALUE
CORPORATE BONDS — 6.0%
Banks — 1.8%
Bank of America Corp., Senior Unsecured Notes
3.88%	01/15/08	$	100	$	98,491
Citigroup, Inc., Senior Unsecured Notes
3.50%	02/01/08		200		196,401
J.P. Morgan Chase & Co., Senior Notes
2.62%	06/30/08		20		19,233
J.P. Morgan Chase & Co., Senior Unsecured Notes
5.25%	05/30/07		150		149,943
U.S. Central Credit Union, Unsecured Notes
2.75%	05/30/08		30		28,845
Wells Fargo & Co., Senior Unsecured Notes
5.12%	02/15/07		180		179,933
					672,846
Computer Software & Services — 0.2%
Oracle Corp., Unsecured Notes
5.00%	01/15/11		75		74,245
Finance — 1.2%
General Electric Capital Corp., Unsecured Notes
3.45%	07/16/07		150		148,558
3.60%(f)	10/15/08		125		121,616
Golden West Financial Corp., Senior Unsecured Notes
4.12%	08/15/07		15		14,880
Household Finance Corp., Unsecured Notes
4.12%	12/15/08		150		147,021
PSEG Funding Trust, Inc., Capital Securities
5.38%	11/16/07		25		24,948
					457,023
Insurance — 0.2%
ASIF Global Financing, Unsecured Notes
3.90%(d)	10/22/08		20		19,511
Metropolitan Life Global Funding, Inc., Unsecured Notes
2.60%(d)	06/19/08		75		71,786
					91,297
Oil & Gas — 0.3%
Anadarko Petroleum Corp., Senior Unsecured Notes
5.76%(b)	09/15/09		100		100,408
Real Estate — 0.4%
Avalonbay Communities, Inc., Senior Unsecured Notes
8.25%	07/15/08		140		145,672
Retail Merchandising — 0.5%
Federated Department Stores, Inc., Senior Unsecured Notes
6.62%	09/01/08		25		25,407
May Department Stores Co., Unsecured Notes
3.95%	07/15/07		150		148,541
					173,948
Telecommunications — 0.7%
Lenfest Communications, Inc., Senior Notes
7.62%	02/15/08		125		127,917
Verizon Global Funding Corp., Senior Unsecured Notes
6.12%	06/15/07		125		125,316
					253,233
Transportation — 0.3%
Union Pacific Corp., Senior Unsecured Notes
5.75%	10/15/07		75		75,041
Union Pacific Corp., Unsecured Notes
6.79%	11/09/07		50		50,481
					125,522
Yankee — 0.4%
ConocoPhillips Funding Co. (Australia), Unsecured Notes
5.47%(b)(g)	04/09/09		150		150,119
Vodafone Group PLC (United Kingdom), Senior Unsecured Notes
3.95%(g)	01/30/08		10		9,851
					159,970
TOTAL CORPORATE BONDS
(Cost $2,279,154)					2,254,164
		PAR/SHARES (000)
SHORT TERM INVESTMENTS — 5.2%
Federal Home Loan Bank, Discount Notes
4.80%(h)	01/02/07		500		499,933
Galileo Money Market Fund			1,450		1,450,008
TOTAL SHORT TERM INVESTMENTS
(Cost $1,949,941)					1,949,941
TOTAL MARKET VALUE OF SECURITIES BEFORE AFFILIATED INVESTMENTS — 107.7%
(Cost $40,941,331)					40,757,668

4

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

ENHANCED INCOME PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
AFFILIATED INVESTMENTS - LONG TERM — 2.8%
Merrill Lynch Mortgage Investors, Inc., Series 97-B, Class A
5.63%(b)	11/15/25	$	421	$	421,378
Merrill Lynch Mortgage Investors, Inc., Series 04-A4, Class A2
4.24%(b)	08/25/34		404		399,066
Merrill Lynch Mortgage Investors, Inc., Series 04-E, Class A2A
5.77%(b)	11/25/29		152		152,223
Merrill Lynch Mortgage Trust, Series 02-MW1, Class XP (IO)
1.51%(c)(d)	07/12/34		2,188		75,208
TOTAL AFFILIATED INVESTMENTS - LONG TERM
(Cost $1,042,752)					1,047,875
TOTAL INVESTMENTS IN SECURITIES — 110.5%
(Cost $41,984,083(a))					41,805,543
LIABILITIES IN EXCESS OF OTHER ASSETS — (10.5)%
(including $5,703,055 of payable for investments purchased and $2,786,519 of receivable for investments sold)					(3,962,562	)
NET ASSETS — 100.0%				$	37,842,981

(a) Cost for federal income tax purposes is $41,985,590. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	107,315
Gross unrealized depreciation		(287,362	)
	$	(180,047	)

(b) Variable rate security. Rates shown are the rates as of December 31, 2006.

(c) Rates shown are the effective yields as of December 31, 2006.

(d) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. As of December 31, 2006, the Portfolio held 5.6% of its net assets, with a current market value of $2,110,800, in securities restricted as to resale.

(e) Par held at end of period is less than 500.

(f) Security, or a portion thereof, pledged as collateral with a value of $121,616 on 69 short U.S. Treasury Note futures contracts and 26 long U.S. Treasury Note futures contracts expiring March 2007 and 24 short Euro-dollar futures contracts expiring December 2007. The value of such contracts on December 31, 2006 was $18,257,125, with an unrealized gain of $64,285 (including commissions of $285).

(g) Security is a foreign domiciled issuer which is registered with the Securities and Exchange Commission.

(h) The rate shown is the effective yield at the time of purchase.

5

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

LOW DURATION BOND PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
U.S. GOVERNMENT & AGENCY OBLIGATIONS — 3.2%
Small Business Administration Participation Certificates, Series 97, Class A
6.10%(b)(c)	08/15/22	$	627	$	622,007
U.S. Treasury Inflation Protected Notes
2.50%	07/15/16		15,805		15,912,030
U.S. Treasury Notes
4.62%	11/30/08		25,000		24,909,175
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost $41,515,825)					41,443,212
MORTGAGE PASS-THROUGHS — 27.9%
Federal Home Loan Mortgage Corp. ARM
7.66%(c)	05/01/15		192		189,744
5.82%(c)	01/01/16		52		53,205
6.17%(c)	01/01/19		609		617,113
6.56%(c)	09/01/19		471		482,176
6.73%(c)	03/01/20		411		417,050
6.61%(c)	06/01/20		2,585		2,650,110
6.75%(c)	10/01/23		386		395,117
7.00%(c)	08/01/31		232		233,849
4.96%(c)	08/01/32		3,682		3,682,910
3.53%(c)	05/01/34		4,712		4,548,731
3.32%(c)	07/01/34		909		920,091
3.55%(c)	07/01/34		2,618		2,623,258
4.29%(c)	11/01/34		14,033		13,732,769
5.04%(c)	12/01/35		24,648		24,371,177
Federal Home Loan Mortgage Corp. Gold
4.00%	09/01/08		3,822		3,747,794
8.25%(d)	06/01/09		0		306
4.50%	04/01/10		3,811		3,762,660
7.00%	11/15-12/16		1,198		1,229,924
6.50%	06/16-09/30		5,741		5,874,693
6.00%	11/01/33		2,100		2,118,722
Federal National Mortgage Assoc.
7.50%	06/08-09/35		10,395		10,800,211
6.50%	11/08-04/31		1,044		1,065,782
5.50%	02/09-02/20		27,609		27,663,091
6.00%	02/09-02/17		1,104		1,114,859
7.00%	03/15-07/32		5,131		5,277,114
5.00%	02/17-04/21		5,740		5,657,001
4.00%	07/01/19		7,399		6,973,142
8.00%	11/30-05/32		1,142		1,204,954
Federal National Mortgage Assoc. 15 Year TBA
6.00%	01/01/22		36,800		37,306,000
Federal National Mortgage Assoc. 1Year CMT
6.98%(c)	09/01/29		29		28,625
7.25%(c)	12/01/30		473		478,842
6.75%(c)	12/01/31		618		628,427
5.51%(c)	08/01/32		1,480		1,485,058
5.59%(c)	01/01/33		2,359		2,364,778
Federal National Mortgage Assoc. 30 Year TBA
5.50%	01/01/37		89,800		88,733,625
Federal National Mortgage Assoc. ARM
6.42%(c)	12/01/18		893		894,645
6.75%(c)	12/01/21		302		298,168
7.09%(c)	12/01/21		256		258,659
4.72%(c)	09/01/32		2,272		2,290,939
6.70%(c)	07/01/33		2,094		2,123,576
4.08%(c)	10/01/33		946		929,686
4.27%(c)	01/01/34		696		687,761
4.00%(c)	04/01/34		1,098		1,074,453
3.93%(c)	05/01/34		15,439		15,085,295
4.55%(c)	02/01/35		21,478		21,229,421
4.86%(c)	06/01/35		12,261		12,147,525
5.28%(c)	09/01/35		1,587		1,584,077
5.10%(c)	11/01/35		3,506		3,498,585
5.14%(c)	11/01/35		2,007		2,008,791
6.15%(c)	04/01/40		1,975		2,012,737
Government National Mortgage Assoc. I
6.00%	12/08-02/11		379		381,146
6.50%	06/15/09		261		263,021
Government National Mortgage Assoc. II ARM
3.75%(c)	05/34-06/34		25,911		25,463,351
TOTAL MORTGAGE PASS-THROUGHS
(Cost $357,444,331)					354,664,744
COLLATERALIZED MORTGAGE OBLIGATIONS — 17.3%
Bear Stearns Mortgage Trust, Series 04-13, Class A1
5.72%(c)	11/25/34		7,509		7,524,915
Bear Stearns Mortgage Trust, Series 04-7, Class 4A
3.66%(c)	10/25/34		9,492		9,469,734
Countrywide Alternative Loan Trust, Series 05-CB, Class 2A3
5.50%	07/25/35		10,569		10,535,432
Countrywide Home Loans, Series 03-37, Class 2A1
4.25%(c)	09/25/33		9,780		9,721,747
Countrywide Home Loans, Series 04-29, Class 1A1
5.62%(c)	02/25/35		2,739		2,743,267
Federal Home Loan Mortgage Corp. Strip Notes, Series 19, Class F
5.42%(c)	06/01/28		1,587		1,580,419
Federal Home Loan Mortgage Corp., Series 1165, Class LD
7.00%	11/15/21		1,459		1,456,302
Federal Home Loan Mortgage Corp., Series 231 (IO)
5.50%(e)	08/01/35		10,173		2,368,238
Federal Home Loan Mortgage Corp., Series 232 (IO)
5.00%(e)	08/01/35		21,266		5,086,497
Federal Home Loan Mortgage Corp., Series 2663, Class LA
5.00%	09/15/23		280		279,054
Federal Home Loan Mortgage Corp., Series 2744, Class PB
5.50%	03/15/26		2,445		2,440,652
Federal Home Loan Mortgage Corp., Series 2996, Class PB
5.50%	05/15/35		13,101		13,137,823
Federal Home Loan Mortgage Corp., Series 3215, Class EP
5.38%	09/15/11		18,075		18,052,593

6

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

LOW DURATION BOND PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
COLLATERALIZED MORTGAGE OBLIGATIONS (Continued)
Federal National Mortgage Assoc., Series 93-188, Class K
6.00%	10/25/08	$	5,519	$	5,523,432
Federal National Mortgage Assoc., Series 97-20, Class FB
5.21%(c)	03/25/27		2,159		2,130,172
Federal National Mortgage Assoc., Series 01-60, Class JZ
6.00%	03/25/31		203		202,194
Federal National Mortgage Assoc., Series 03-17, Class QR
4.50%	11/25/25		8,862		8,787,529
Federal National Mortgage Assoc., Series 04-W10, Class A1
5.75%	08/25/34		9,786		9,759,221
Federal National Mortgage Assoc., Series 05-84, Class XK
5.75%	08/25/23		6,748		6,735,565
Federal National Mortgage Assoc., Series 06, Class WA
6.00%	05/25/28		9,940		10,031,841
Federal National Mortgage Assoc., Series 06-M2, Class A1A
3.25%	11/15/08		1,605		1,578,959
Federal National Mortgage Assoc., Series 354, Class 2 (IO)
5.50%(e)	11/01/34		8,668		2,000,214
Federal National Mortgage Assoc., Series 377, Class 2 (IO)
5.00%(e)	10/01/36		6,322		1,542,431
Goldman Sachs Mortgage Securities Corp. II, Series 00-1, Class A
5.70%(b)(c)	06/20/24		429		429,418
Goldman Sachs Residential Mortgage Loan Trust, Series 04-9, Class 3A1
3.68%(c)	08/25/34		14,265		14,258,189
Goldman Sachs Residential Mortgage Loan Trust, Series 05-AR6, Class 1A1
4.55%(c)	09/25/35		12,024		11,888,746
Harborview Mortgage Loan Trust, Series 05-10, Class 2A1A
5.66%(c)	11/19/35		12,804		12,839,041
J.P. Morgan Mortgage Trust, Series 06-A2, Class 4A1
3.88%(c)	08/25/34		13,134		12,863,474
Mortgage IT Trust, Series 04-1, Class A1
5.74%(c)	11/25/34		10,856		10,884,843
Residential Accredit Loans, Inc., Series 01-QS19, Class A1
6.00%	12/25/16		184		182,848
Structured Mortgage Loan Trust, Series 04-13, Class A2
5.65%(c)	09/25/34		2,705		2,708,522
Structured Mortgage Loan Trust, Series 04-3AC, Class A2
4.92%(c)	03/25/34		9,357		9,329,054
Washington Mutual Mortgage Securities Corp., Series 02-AR1, Class IA1
7.18%(c)	11/25/30		501		499,580
Washington Mutual Mortgage Securities Corp., Series 02-AR19, Class A8
4.56%(c)	02/25/33		599		593,810
Wells Fargo Mortgage Backed Securities Trust, Series 04-3, Class A1
4.75%	04/25/19		11,125		10,746,216
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $220,539,144)					219,911,972
COMMERCIAL MORTGAGE BACKED SECURITIES — 14.8%
American Home Mortgage Assets, Series 05-1, Class 3A11
5.62%(c)	11/25/35		8,069		8,083,232
Banc of America Funding Corp., Series 06-I, Class 1A1
5.75%(c)	12/20/36		9,504		9,363,002
Capco America Securitization Corp., Series 98-D7, Class PS1 (IO)
1.44%(b)(e)	10/15/30		32,756		699,569
Citigroup Commercial Mortgage Trust, Series 05-EMG, Class A1
4.15%(b)	09/20/51		5,185		5,091,276
Commercial Mortgage Acceptance Corp., Series 98-C2, Class A2
6.03%	03/15/08		5,423		5,444,076
Commercial Mortgage Pass-Through Certificates, Series 00-C1, Class A2
7.42%	04/15/10		9,024		9,445,790
Credit Suisse First Boston Mortgage Securities Corp., Series 98-C2, Class A2
6.30%	11/11/30		8,008		8,117,340
Deutsche Alt-A Securities, Inc., Series 06-AF1, Class A1
5.43%(c)	04/25/36		6,135		6,136,397
Donaldson, Lufkin & Jenrette, Inc., Commerical Mortgage Corp., Series 00-CKP1, Class A1B
7.18%	11/10/33		8,360		8,816,637
Federal National Mortgage Assoc. Grantor Trust, Series 02-T6, Class A1
3.31%	02/25/32		1,899		1,750,311
Federal National Mortgage Assoc., Series 06-M2, Class A1A
4.86%(c)	07/25/16		8,000		7,892,500
First Union-Chase Commercial Mortgage Trust, Series 99-C2, Class A2
6.64%	04/15/09		13,615		13,913,266
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 99-C3, Class A2
7.18%	08/15/36		7,369		7,631,868
Goldman Sachs Mortgage Securities Corp. II, Series 98-C1, Class A3
6.14%	10/18/30		11,628		11,714,862

7

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

LOW DURATION BOND PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
COMMERCIAL MORTGAGE BACKED SECURITIES (Continued)
Goldman Sachs Mortgage Securities Corp. II, Series 03-C1, Class X2 (IO)
0.95%(b)(e)	01/10/40	$	249,705	$	4,318,526
Impac Secured Assets Corp., Series 05-2, Class A2A
5.47%(c)	03/25/36		6,854		6,853,236
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 04-FL1A, Class A2
5.51%(c)	04/16/19		3,990		3,990,221
Lehman Brothers-UBS Commercial Mortgage Trust, Series 00-C5, Class A1
6.41%	12/15/19		7,468		7,525,806
Lehman Brothers-UBS Commercial Mortgage Trust, Series 03-C3, Class XCP (IO)
1.23%(b)(e)	02/15/37		37,389		970,545
Lehman Brothers-UBS Commercial Mortgage Trust, Series 03-C5, Class XCP (IO)
1.10%(b)(e)	04/15/37		176,921		2,698,768
Mortgage Capital Funding, Inc., Series 98-MC1, Class X (IO)
0.59%(e)	03/18/30		58,912		229,340
Nationslink Funding Corp., Series 99, Class 1
6.32%	01/20/31		9,842		9,962,106
Opteum Mortgage Acceptance Corp., Series 06-1, Class 1A1A
5.44%(c)	04/25/36		7,526		7,518,355
Structured Asset Receivables Trust, Series 03-1
3.18%(b)(c)(f)	01/21/10		12,218		12,214,578
TIAA Real Estate Collaterallized Debt Obligation Ltd., Series 01-C1A, Class A4
6.68%(b)	06/19/31		8,510		8,763,858
Wachovia Bank Commercial Mortgage Trust, Series 03-C3, Class A1
4.04%	02/15/35		9,306		9,049,863
Washington Mutual Asset Securities Corp., Series 05-C1A, Class A1
4.24%(b)	05/25/36		5,862		5,773,463
Washington Mutual Asset Securities Corp., Series 05-C1A, Class X (IO)
2.17%(b)(e)	05/25/36		89,137		4,712,684
TOTAL COMMERCIAL MORTGAGE BACKED SECURITIES
(Cost $191,550,294)					188,681,475
ASSET BACKED SECURITIES — 27.3%
Accredited Mortgage Loan Trust, Series 05-3, Class A2A
5.42%(c)	09/25/35		1,499		1,498,889
Amresco Independence Funding, Inc., Series 99-1, Class A
5.25%(b)(c)	06/15/20		4,904		4,872,323
Bank of America Credit Card Trust, Series 06, Class A16
4.73%	05/05/13		10,775		10,643,680
Bear Stearns, Inc., Series 06-HE1, Class 1A1
5.44%(c)	01/25/30		5,930		5,931,407
Bear Stearns, Inc., Series 06-PC1, Class A1
5.43%(c)	01/25/29		4,738		4,738,996
BMW Vehicle Owner Trust, Series 05-A, Class A3
4.04%	02/25/09		11,248		11,190,031
Business Loan Express, Inc., Series 98-1, Class A
7.25%(b)(c)	01/15/25		1,100		1,070,311
Capital Auto Receivables Asset Trust, Series 04-1, Class A3
2.00%	11/15/07		597		596,445
Capital Auto Receivables Asset Trust, Series 04-2, Class A2
3.35%	02/15/08		9,381		9,350,700
Capital Auto Receivables Asset Trust, Series 05-1, Class A4
4.05%	07/15/09		12,825		12,735,422
Capital Auto Receivables Asset Trust, Series 06-SN1A, Class A2A
5.40%(b)	01/20/09		15,950		15,954,147
Citibank Credit Card Issuance Trust, Series 04, Class A4
3.20%	08/24/09		8,700		8,583,867
Countrywide Certificates, Series 05-16, Class 4AV1
5.45%(c)	07/25/26		5,604		5,604,598
Countrywide Certificates, Series 05-BC4, Class 2A1
5.44%(c)	11/25/28		4,197		4,198,046
Countrywide Certificates, Series 05-IM3, Class A1
5.47%(c)	04/25/28		4,551		4,551,807
DaimlerChrysler Auto Trust, Series 06, Class A3
5.33%	08/08/10		10,425		10,446,155
Encore Credit Receivables Trust, Series 05-4, Class 2A1
5.45%(c)	01/25/36		1,300		1,300,546
Epoch, Series 02-2I, Class 2A-l
6.00%(b)(c)	05/30/07		8,500		8,521,250
Fieldstone Mortgage Investment Corp., Series 05-3, Class 2A1
5.47%(c)	02/25/36		7,516		7,517,141
First Franklin Mortgage Loan Trust, Series 06-FF3, Class A2A
5.43%(c)	02/25/36		7,945		7,945,881
Ford Credit Auto Owner Trust, Series 05, Class A4
4.36%	06/15/10		15,825		15,576,342
Ford Credit Auto Owner Trust, Series 05-A, Class A3
3.48%	11/15/08		9,515		9,456,178
Ford Credit Auto Owner Trust, Series 05-C, Class A2
4.24%	03/15/08		1,981		1,979,436
Ford Credit Auto Owner Trust, Series 06, Class A4
5.07%	12/15/10		11,925		11,900,326
Ford Credit Auto Owner Trust, Series 06-B, Class A3
5.26%	10/15/10		12,575		12,583,648
Green Tree Financial Corp., Series 93-4, Class A5
7.05%	01/15/19		1,307		1,326,737

8

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

LOW DURATION BOND PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
ASSET BACKED SECURITIES (Continued)
Green Tree Financial Corp., Series 96-8, Class A6
7.60%	10/15/27	$	3,222	$	3,330,812
GSAA Home Equity Trust, Series 04-11, Class 2A2
5.67%(c)	12/25/34		6,225		6,233,838
GSAA Home Equity Trust, Series 06-8N, Class N1
6.00%(b)	10/26/36		2,978		2,918,802
Heller Financial Commercial Mortgage Asset Corp., Series 98-1, Class A
5.87%(b)(c)	07/15/24		2,227		2,204,288
Honda Auto Receivables Owner Trust, Series 04-2, Class A3
3.30%	06/16/08		6,769		6,733,190
Honda Auto Receivables Owner Trust, Series 04-3, Class A3
2.91%	10/20/08		8,214		8,133,136
Honda Auto Receivables Owner Trust, Series 05-4, Class A3
4.46%	05/21/09		11,150		11,078,621
IFC Small Business Administration Loan-Backed Certificates, Series 97-1, Class A
6.25%(b)(c)	01/15/24		689		689,268
Indymac Residential Trust, Series 06-B, Class 2A1
5.41%(c)	06/25/36		4,376		4,376,560
J.P. Morgan Mortgage Acquisition Corp., Series 05-OPT2, Class A2
5.43%(c)	12/25/35		2,737		2,737,545
Long Beach Mortgage Loan Trust, Series 06-2, Class 2A1
5.42%(c)	03/25/36		6,246		6,247,374
Master Asset Backed Securities Trust, Series 06-FRE1, Class A1
5.42%(c)	12/25/35		5,632		5,633,017
The Money Store Small Business Administration Loan Trust, Series 98-1, Class A
5.93%(c)	07/15/24		917		900,611
Morgan Stanley Capital, Inc., Series 05-HE5, Class A2A
5.45%(c)	09/25/35		3,995		3,995,451
New Century Home Equity Loan Trust, Series 05-C, Class A2A
5.43%(c)	12/25/35		4,453		4,453,850
Nissan Auto Receivables Owner Trust, Series 05-B, Class A3
3.99%	07/15/09		13,488		13,377,286
Option One Mortgage Loan Trust, Series 05-4, Class A2
5.18%(c)	11/25/35		4,096		4,096,095
Ownit Mortgage Loan Certificates, Series 05-4, Class A2A1
5.47%(c)	08/25/36		5,745		5,745,730
PBG Equipment Trust, Series 00-1A, Class A
6.27%(b)	01/20/12		813		813,756
Peoples Choice Home Loan Securities Trust, Series 05-4, Class 1A1
5.47%(c)	12/25/35		1,684		1,684,000
PMC Capital LP, Series 98-1, Class A
7.25%(b)(c)	04/01/21		2,809		2,808,668
Residential Asset Mortgage Products, Inc., Series 05-EFC4, Class A1
5.46%(c)	01/25/26		5,519		5,519,764
Residential Asset Mortgage Products, Inc., Series 05-RS8, Class A1
5.46%(c)	05/25/25		2,190		2,190,513
Securitized Asset Backed Receivables LLC, Series 06-FR3, Class A1
5.37%(c)	05/25/36		7,820		7,820,218
Specialty Underwriting & Residential Finance, Series 05-BC3, Class A2A
5.47%(c)	06/25/36		3,840		3,840,145
Structured Asset Investment Loan Trust, Series 05-10, Class A3
5.44%(c)	12/25/35		6,637		6,637,885
Structured Asset Investment Loan Trust, Series 06-BNC1, Class A2
5.42%(c)	03/25/36		5,389		5,389,485
SWB Loan-Backed Certificates, Series 98-1, Class AV
6.00%(b)(c)	09/15/24		2,808		2,806,879
USAA Auto Owner Trust, Series 05-1, Class A3
3.90%	07/15/09		5,886		5,841,997
USAA Auto Owner Trust, Series 05-2, Class A3
4.00%	12/15/09		18,091		17,934,743
TOTAL ASSET BACKED SECURITIES
(Cost $347,143,636)					346,247,836
CORPORATE BONDS — 10.4%
Banks — 3.1%
Citigroup, Inc., Senior Unsecured Notes
3.50%(g)	02/01/08		5,200		5,106,431
J.P. Morgan Chase & Co., Senior Unsecured Notes
6.00%	08/01/08		3,180		3,219,324
U.S. Bank N.A., Subordinated Notes
6.50%	02/01/08		3,580		3,611,758
U.S. Central Credit Union, Unsecured Notes
2.75%	05/30/08		3,700		3,557,524
Wells Fargo & Co., Senior Unsecured Notes
5.49%(c)	09/15/09		22,515		22,553,230
Wells Fargo & Co., Unsecured Notes
3.50%	04/04/08		1,200		1,175,152
					39,223,419
Computer Software & Services — 0.1%
Oracle Corp., Unsecured Notes
5.00%	01/15/11		1,700		1,682,888
Finance — 3.8%
Federal Home Loan Mortgage Corp., Debentures
4.62%	02/21/08		8,000		7,950,640
Federal Home Loan Mortgage Corp., Unsecured Notes
5.12%(g)	04/08-10/08		12,000		12,006,174
General Electric Capital Corp., Notes
8.75%	05/21/07		5,320		5,387,224

9

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

LOW DURATION BOND PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS )	MATURITY	PAR (000)			VALUE
CORPORATE BONDS (Continued)
Finance (Continued)
General Electric Capital Corp., Unsecured Notes
3.45%	07/16/07	$	7,700		$	7,625,965
4.12%	03/04/08		8,300			8,202,898
Household Finance Corp., Unsecured Notes
4.12%(h)	12/15/08		4,375			4,288,121
Nationwide Building Society (United Kingdom), Senior Unsecured Notes
3.50%(b)	07/31/07		1,975			1,953,711
PSEG Funding Trust, Inc., Capital Securities
5.38%	11/16/07		1,250			1,247,381
						48,662,114
Insurance — 0.2%
ASIF Global Financing, Unsecured Notes
3.90%(b)	10/22/08		2,540			2,477,874
Oil & Gas — 0.2%
Anadarko Petroleum Corp., Senior Unsecured Notes
5.76%(c)	09/15/09		2,850			2,861,622
Real Estate — 0.3%
Avalonbay Communities, Inc., Senior Unsecured Notes
8.25%	07/15/08		3,945			4,104,824
Retail Merchandising — 0.4%
Federated Department Stores, Inc., Senior Unsecured Notes
6.62%	09/01/08		800			813,009
May Department Stores Co., Unsecured Notes
3.95%	07/15/07		4,675			4,629,536
						5,442,545
Telecommunications — 0.8%
Lenfest Communications, Inc., Senior Notes
7.62%	02/15/08		3,850			3,939,852
Verizon Global Funding Corp., Senior Unsecured Notes
6.12%	06/15/07		5,415			5,428,678
						9,368,530
Transportation — 0.3%
Union Pacific Corp., Senior Unsecured Notes
5.75%	10/15/07		2,025			2,026,100
Union Pacific Corp., Unsecured Notes
6.79%	11/09/07		1,775			1,792,088
						3,818,188
Yankee — 1.2%
ConocoPhillips Funding Co. (Australia), Unsecured Notes
5.47%(c)(i)	04/09/09		4,000			4,003,184
Eksportfinans ASA (Norway), Unsecured Notes
3.38%(i)	01/15/08		9,315			9,135,444
Vodafone Group PLC (United Kingdom), Senior Unsecured Notes
3.95%(i)	01/30/08		1,543			1,519,938
						14,658,566
TOTAL CORPORATE BONDS
(Cost $133,435,881)						132,300,570
FOREIGN BONDS — 0.3%
Province of Manitoba (Canada), Senior Unsecured Notes (NZD)
6.38%	09/01/15		1,300			889,960
Province of Ontario (Canada), Unsecured Notes (NZD)
6.25%	06/16/15		4,540			3,070,529
TOTAL FOREIGN BONDS
(Cost $4,110,975)						3,960,489
		PAR/SHARES (000)
SHORT TERM INVESTMENTS — 5.3%
Federal Home Loan Bank, Discount Notes
4.80%(j)	01/02/07		29,500			29,496,067
5.16%(j)	01/12/07		30,000			29,952,746
Galileo Money Market Fund			8,085			8,084,973
TOTAL SHORT TERM INVESTMENTS
(Cost $67,533,786)						67,533,786
		NUMBER OF CONTRACTS
CALL SWAPTIONS PURCHASED — 0.1%
Deutsche Bank, Strike Rate 5.205%, Expires 03/01/16
(Cost $1,534,785)			3,290	(k)		1,137,071
PUT SWAPTIONS PURCHASED — 0.1%
Deutsche Bank, Strike Rate 5.205%, Expires 03/01/16
(Cost $1,534,785)			3,290	(k)		1,638,948
TOTAL MARKET VALUE OF SECURITIES BEFORE AFFILIATED INVESTMENTS — 106.8%
(Cost $1,366,343,442)						1,357,520,103

10

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

LOW DURATION BOND PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)			VALUE
AFFILIATED INVESTMENTS - LONG TERM — 0.9%
Federal Housing Authority, Merrill Lynch Project, Pool 42
7.43%	09/01/22	$	5		$	5,166
Merrill Lynch Mortgage Investors, Inc., Series 97-B, Class A
5.63%(c)	11/15/25		1,087			1,088,358
Merrill Lynch Mortgage Investors, Inc., Series 99-A, Class A
5.70%(c)	03/15/25		547			548,878
Merrill Lynch Mortgage Investors, Inc., Series 04-A4, Class A2
4.24%(c)	08/25/34		10,011			9,900,962
TOTAL AFFILIATED INVESTMENTS - LONG TERM
(Cost $11,407,928)						11,543,364
		NUMBER OF SHARES
AFFILIATED INVESTMENTS - SHORT TERM — 0.2%
Institutional Money Market Trust(l)
(Cost $3,100,700)			3,100,700			3,100,700
TOTAL INVESTMENTS IN SECURITIES — 107.9%
(Cost $1,380,852,070(a))						1,372,164,167
		NUMBER OF CONTRACTS
CALL SWAPTIONS WRITTEN — (0.1)%
Deutsche Bank, Strike Rate 5.480%, Expires 10/26/09
(Premiums received $930,000)			(2,480	)(k)		(1,046,808	)
PUT SWAPTIONS WRITTEN — (0.1)%
Deutsche Bank, Strike Rate 3.250%, Expires 06/19/08			(1,990	)(k)		(1,024,446	)
Deutsche Bank, Strike Rate 5.480%, Expires 10/26/09			(2,480	)(k)		(723,416	)
Deutsche Bank, Strike Rate 5.765%, Expires 06/19/08			(1,990	)(k)		(205,410	)
TOTAL PUT SWAPTIONS WRITTEN
(Premiums received $2,223,500)						(1,953,272	)
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL — (0.2)%						(3,100,700	)
LIABILITIES IN EXCESS OF OTHER ASSETS — (7.4)%
(including $126,977,578 of payable for investments purchased)						(94,603,922	)
NET ASSETS — 100.0%					$	1,271,459,465

(a) Cost for federal income tax purposes is $1,380,900,270. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	2,262,222
Gross unrealized depreciation		(10,998,325	)
	$	(8,736,103	)

(b) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. As of December 31, 2006, the Portfolio held 7.3% of its net assets, with a current market value of $93,385,969, in securities restricted as to resale.

(c) Variable rate security. Rates shown are the rates as of December 31, 2006.

(d) Par held at end of period is less than 500.

(e) Rates shown are the effective yields as of December 31, 2006.

(f) Security is illiquid. As of December 31, 2006, the Portfolio held 1.0% of its net assets, with a current market value of $12,214,578 in these securities.

(g) Security, or a portion thereof, pledged as collateral with a value of $6,207,840 on 1,000 short U.S. Treasury Note futures contracts, 2,054 long U.S. Treasury Note futures contracts and 25 short U.S. Treasury Bond futures contracts expiring March 2007 and 732 short Euro-dollar futures contracts expiring December 2007. The value of such contracts on December 31, 2006 was $701,399,521, with an an unrealized loss of $237,449 (including commissions of $7,633).

(h) Total or partial security on loan.

(i) Security is a foreign domiciled issuer which is registered with the Securities and Exchange Commission.

(j) The rate shown is the effective yield at the time of purchase.

(k) Each swaption contract is equivalent to $10,000 notional amount.

(l) Security purchased with the cash proceeds from securities loaned.

11

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERMEDIATE GOVERNMENT BOND PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
U.S. GOVERNMENT & AGENCY OBLIGATIONS — 28.7%
Federal Home Loan Bank, Unsecured Bonds
3.60%(b)	10/19/07	$	11,170	$	11,027,873
2.75%	01/09/08		4,410		4,303,199
3.01%(b)	04/02/08		10,000		9,742,820
3.00%	06/08-07/08		9,760		9,469,945
2.90%	07/15/08		2,000		1,936,184
3.25%(b)	07/30/08		17,955		17,462,063
3.35%	01/23/09		2,000		1,935,060
4.00%	02/19/09		1,200		1,174,638
Federal Home Loan Mortgage Corp., Unsecured Notes
3.38%(b)	10/05/07		10,835		10,685,444
3.50%(b)	05/18/08-05/21/08		17,305		16,917,413
3.06%	07/15/08		3,155		3,062,152
3.00%(b)	06/30/09		19,600		18,701,458
Federal National Mortgage Assoc., Unsecured Notes
3.53%	10/19/07		8,950		8,827,868
3.55%(b)	11/16/07		6,675		6,579,741
4.00%	12/14/07		6,212		6,137,704
3.00%(c)	05/12/08		4,500		4,419,328
3.25%	05/16/08		6,725		6,559,807
Housing and Urban Development, Section 108 Government Guaranteed Participation Certificates, Series 03-A
4.44%	08/01/11		2,099		2,053,351
Small Business Administration Participation Certificates, Series 96-20H, Class 1
7.25%	08/01/16		1,266		1,314,729
Small Business Administration Participation Certificates, Series 96-20J, Class 1
7.20%	10/01/16		1,043		1,082,869
Small Business Administration Participation Certificates, Series 98-20J, Class 1
5.50%	10/01/18		1,932		1,949,075
U.S. Treasury Inflation Protected Bonds
2.00%	01/15/26		3,312		3,166,751
U.S. Treasury Inflation Protected Notes
2.50%	07/15/16		1,475		1,484,989
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost $150,540,317)					149,994,461
MORTGAGE PASS-THROUGHS — 50.1%
Federal Home Loan Mortgage Corp. ARM
3.53%(c)	05/01/34		3,623		3,497,724
3.55%(c)	07/01/34		2,553		2,558,316
3.72%(c)	07/01/34		1,917		1,853,380
5.03%(c)	08/01/34		4,755		4,714,281
4.39%(c)	11/01/34		2,491		2,457,577
4.36%(c)	03/01/35		7,901		7,745,384
4.76%(c)	03/01/35		8,720		8,609,345
4.75%(c)	04/01/35		9,533		9,472,162
4.77%(c)	09/01/35		9,589		9,491,705
5.54%(c)	04/01/36		4,036		4,021,631
6.09%(c)	09/01/36		3,453		3,489,152
5.97%(c)	10/01/36		2,875		2,906,658
6.02%(c)	10/01/36		3,890		3,922,605
5.95%(c)	12/01/36		5,500		5,525,300
6.04%(c)	12/01/36		5,000		5,017,950
Federal Home Loan Mortgage Corp. Gold
9.00%	12/01/09		213		217,023
5.00%	10/20-03/21		29,475		28,959,048
6.00%	12/01/36		9,853		9,924,058
Federal National Mortgage Assoc.
8.00%	04/08-06/08		229		230,644
6.50%	05/08-12/29		9,391		9,609,600
8.50%	02/09-08/09		302		306,733
9.00%	05/09-04/16		315		322,016
6.00%	04/16-10/36		14,004		14,098,463
7.00%	01/17-04/32		1,186		1,219,710
5.00%	06/18-06/23		1,837		1,793,198
4.50%	10/01/18		17		16,010
5.50%	01/24-06/36		1,127		1,119,153
5.06%	02/25/37		6,075		6,055,682
Federal National Mortgage Assoc. ARM
4.78%(c)	03/01/33		3,666		3,645,092
4.27%(c)	05/01/33		2,535		2,465,701
3.99%(c)	09/01/33		2,279		2,198,050
5.43%(c)	10/01/33		3,636		3,709,149
4.00%(c)	04/01/34		1,571		1,536,876
3.88%(c)	05/01/34		1,945		1,893,132
3.56%(c)	06/01/34		1,624		1,613,366
4.37%(c)	06/01/34		5,922		5,850,004
3.74%(c)	07/01/34		2,073		2,010,698
4.49%(c)	07/01/34		6,689		6,620,842
4.82%(c)	08/01/34		2,596		2,550,767
4.64%(c)	02/01/35		10,935		10,828,427
4.59%(c)	03/01/35		5,311		5,245,131
4.74%(c)	07/01/35		5,626		5,564,769
4.95%(c)	07/01/35		13,001		12,904,034
5.00%(c)	07/01/35		3,230		3,198,546
5.84%(c)	08/01/36		5,196		5,236,875
5.99%(c)	11/01/36		2,795		2,826,903
5.48%(c)	12/01/36		3,425		3,421,404
4.50%(c)	01/01/37		10,994		10,926,994
Government National Mortgage Assoc. I
6.00%	02/15/11		227		228,348
Government National Mortgage Assoc. II ARM
3.75%(c)	06/20/34		2,490		2,446,637
3.50%(c)	07/20/34		4,987		4,849,544
4.50%(c)	02/20/35		3,545		3,513,826
5.00%(c)	05/20/35		7,976		7,907,082
TOTAL MORTGAGE PASS-THROUGHS
(Cost $263,782,193)					262,346,705

12

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERMEDIATE GOVERNMENT BOND PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
COLLATERALIZED MORTGAGE OBLIGATIONS — 17.8%
Bear Stearns Mortgage Trust, Series 04-13, Class A1
5.72%(c)	11/25/34	$	1,396	$	1,399,212
Deutsche Mortgage Securities, Inc., Series 04-4, Class 3AR1
3.69%(c)	06/25/34		944		940,037
Federal Home Loan Mortgage Corp., Series 1361, Class I
6.00%	09/15/07		26		25,722
Federal Home Loan Mortgage Corp., Series 06-3110, Class HA
5.50%	01/15/27		5,353		5,363,019
Federal Home Loan Mortgage Corp., Series 2668, Class AD
4.00%	01/15/15		2,366		2,316,619
Federal Home Loan Mortgage Corp., Series 2718, Class MR
4.00%	08/15/13		1,481		1,461,174
Federal Home Loan Mortgage Corp., Series 2748, Class LJ
4.00%	03/15/10		101		100,429
Federal Home Loan Mortgage Corp., Series 2931, Class DE
4.00%	02/15/20		10,000		9,039,594
Federal Home Loan Mortgage Corp., Series 3131, Class MA
5.50%	11/15/27		2,799		2,808,458
Federal Home Loan Mortgage Corp., Series 3143, Class NA
5.50%	07/15/26		4,687		4,697,709
Federal Home Loan Mortgage Corp., Series 3162, Class 0A
6.00%	10/15/26		4,546		4,589,996
Federal National Mortgage Assoc., Series 01-T2, Class B
6.02%	11/25/10		3,600		3,717,687
Federal National Mortgage Assoc., Series 04-W10, Class A1
5.75%	08/25/34		1,073		1,069,927
Federal National Mortgage Assoc., Series 05-109, Class PV
6.00%	10/25/32		4,125		4,186,564
Federal National Mortgage Assoc., Series 05-29, Class JB
4.50%	04/25/35		8,849		8,663,740
Federal National Mortgage Assoc., Series 05-57, Class PA
5.50%	05/25/27		2,597		2,598,562
Federal National Mortgage Assoc., Series 05-68, Class PC
5.50%	07/25/35		5,036		5,051,519
Federal National Mortgage Assoc., Series 05-70, Class KB
5.50%	05/25/35		4,872		4,884,969
Federal National Mortgage Assoc., Series 05-83, Class LA
5.50%	10/25/35		4,441		4,445,791
Federal National Mortgage Assoc., Series 05-84, Class MB
5.75%	10/25/35		11,575		11,701,500
Federal National Mortgage Assoc., Series 06-39, Class G1
5.50%	11/25/25		4,682		4,683,719
Federal National Mortgage Assoc., Series 378, Class 4 (IO)
5.00%(d)	11/01/35		6,250		1,428,711
Goldman Sachs Residential Mortgage Loan Trust, Series 04-9, Class 3A1
3.68%(c)	08/25/34		2,157		2,156,196
Mortgage IT Trust, Series 04-1, Class A1
5.74%(c)	11/25/34		1,791		1,796,256
Structured Mortgage Loan Trust, Series 04-13, Class A2
5.65%(c)	09/25/34		435		435,449
Summit Mortgage Trust, Series 00-1, Class B1
6.57%(c)(e)(f)	12/28/12		46		45,774
Washington Mutual Mortgage Securities Corp., Series 03-AR4, Class A6
3.42%(c)	05/25/33		3,489		3,420,888
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $93,748,969)					93,029,221
COMMERCIAL MORTGAGE BACKED SECURITIES — 10.3%
Banc of America Commercial Mortgage, Inc., Series 02-PB2, Class A4
6.19%	06/11/35		3,380		3,515,146
Bear Stearns Commercial Mortgage Securities, Inc., Series 02-TOP6, Class A1
5.92%	10/15/36		1,710		1,730,400
Bear Stearns Commercial Mortgage Securities, Inc., Series 04-PWR4, Class A1
4.36%	06/11/41		1,877		1,843,321
Commercial Mortgage Pass-Through Certificates, Series 00-C1, Class A2
7.42%	04/15/10		3,923		4,106,411
Credit Suisse First Boston Mortgage Securities Corp., Series 02-CKS4, Class A2
5.18%	08/15/12		3,905		3,885,743
Federal National Mortgage Assoc. Grantor Trust, Series 02-T6, Class A1
3.31%	02/25/32		503		463,463
First Union National Bank Commercial Mortgage Trust, Series 00-C2, Class A2
7.20%	10/15/32		3,640		3,843,234
First Union-Chase Commercial Mortgage Trust, Series 99-C2, Class A2
6.64%	04/15/09		5,431		5,550,264
General Electric Capital Commercial Mortgage Corp., Series 02-1A, Class A3
6.27%	12/10/35		3,540		3,698,528
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 97-C1, Class X (IO)
1.52%(d)	07/15/27		7,467		185,353
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 99-C3, Class A2
7.18%	08/15/36		1,176		1,218,045

13

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERMEDIATE GOVERNMENT BOND PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
COMMERCIAL MORTGAGE BACKED SECURITIES (Continued)
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 01-C1, Class A3
5.86%	10/12/35	$	3,580	$	3,664,772
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 01-CIBC, Class A3
6.26%	03/15/33		1,645		1,695,265
Lehman Brothers-UBS Commercial Mortgage Trust, Series 00-C5, Class A1
6.41%	12/15/19		1,517		1,528,437
Lehman Brothers-UBS Commercial Mortgage Trust, Series 01-C7, Class A3
5.64%	04/15/11		2,242		2,258,074
Lehman Brothers-UBS Commercial Mortgage Trust, Series 04-C2, Class A2
3.25%	03/15/29		2,100		2,016,406
Lehman Brothers-UBS Commercial Mortgage Trust, Series 04-C4, Class A1
3.82%	06/15/29		1,594		1,566,385
The Money Store Small Business Administration Loan Trust, Series 99-1, Class A
6.05%(c)	07/15/25		806		800,540
Morgan Stanley Dean Witter Capital Investments, Series 02-TOP7, Class A1
5.38%	01/15/39		2,690		2,693,561
Structured Asset Receivables Trust, Series 03-2
5.72%(c)(e)(g)	01/21/09		2,047		2,046,488
Wachovia Bank Commercial Mortgage Trust, Series 03-C5, Class A1
2.99%	06/15/35		2,356		2,209,288
Wachovia Bank Commercial Mortgage Trust, Series 04-C12, Class A1
3.40%	07/15/41		1,692		1,649,444
Washington Mutual Asset Securities Corp., Series 05-C1A, Class X (IO)
2.17%(d)(e)	05/25/36		37,386		1,976,616
TOTAL COMMERCIAL MORTGAGE BACKED SECURITIES
(Cost $55,579,473)					54,145,184
PROJECT LOANS — 0.1%
Federal Housing Authority, USGI Project, Series 56
7.46%
(Cost $536,738)	01/01/23		524		529,183
ASSET BACKED SECURITIES — 2.7%
Bear Stearns, Inc., Series 06-HE1, Class 1A1
5.44%(c)	01/25/30		2,597		2,597,200
Countrywide Certificates, Series 05-IM2, Class A1
5.43%(c)	06/25/27		67		66,951
Green Tree Financial Corp., Series 97-5, Class A7
7.13%	05/15/29		1,622		1,678,630
IndyMac Residential Trust, Series 06-E, Class 2A1
5.38%(c)	04/25/37		4,375		4,373,633
Master Securities Trust, Series 05-HE2, Class A2
5.43%(c)	10/25/35		1,598		1,598,200
Residential Asset Mortgage Products, Inc., Series 05-RZ4, Class A1
5.47%(c)	11/25/35		3,081		3,081,775
SWB Loan-Backed Certificates, Series 99-1, Class A
7.38%(e)	05/15/25		609		614,749
TOTAL ASSET BACKED SECURITIES
(Cost $13,959,878)					14,011,138
CORPORATE BONDS — 3.9%
Finance — 2.9%
General Electric Capital Corp., Unsecured Notes
5.42%(c)	01/15/08		6,650		6,656,331
4.88%(h)	10/21/10		1,990		1,969,065
5.00%	11/15/11		1,390		1,379,810
Private Export Funding Corp., Senior Unsecured Notes
3.38%	02/15/09		5,250		5,081,323
					15,086,529
Oil & Gas — 0.4%
ENSCO Offshore Co.
6.36%	12/01/15		2,085		2,170,832
Yankee — 0.6%
International Bank for Reconstruction & Development (Multiple Countries), Unsecured Notes
1.00%(i)	02/05/15		4,100		2,982,192
TOTAL CORPORATE BONDS
(Cost $20,482,282)					20,239,553
TAXABLE MUNICIPAL BONDS — 0.6%
Stanislaus County California Taxable Pension Obligation Refunding Revenue Bonds, Series 95
7.15%
(Cost $2,895,000)	08/15/13		2,895		3,078,427
		NUMBER OF SHARES
SHORT TERM INVESTMENTS — 1.5%
Galileo Money Market Fund
(Cost $8,037,426)			8,037,426		8,037,426

14

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERMEDIATE GOVERNMENT BOND PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)		NUMBER OF CONTRACTS			VALUE
CALL SWAPTIONS PURCHASED — 0.1%
Barclays Capital, Strike Rate 5.520%, Expires 09/19/16
(Cost $444,643)			730	(j)	$	434,543
PUT OPTIONS PURCHASED — 0.0%
March 10 year U.S. Treasury Notes futures, Strike Price $106, Expires 02/23/07
(Cost $20,401)			54			26,156
PUT SWAPTIONS PURCHASED — 0.1%
Barclays Capital, Strike Rate 5.400%, Expires 03/12/07			6,410	(j)		42,060
Barclays Capital, Strike Rate 5.520%, Expires 09/21/15			730	(j)		399,999
Barclays Capital, Strike Rate 5.900%, Expires 03/12/07			6,410	(j)		1,258
Citibank, Strike Rate -0.020%, Expires 06/01/07			10,400	(j)		107,482
TOTAL PUT SWAPTIONS PURCHASED
(Cost $607,363)						550,799
TOTAL MARKET VALUE OF SECURITIES BEFORE AFFILIATED INVESTMENTS — 115.9%
(Cost $610,634,683)						606,422,796
	MATURITY	PAR (000)
AFFILIATED INVESTMENTS-LONG TERM — 0.0%
Federal Housing Authority, Merrill Lynch Project, Series 29, Class 1A1
7.43%
(Cost $429,308)	06/01/22	$	422			425,700
TOTAL INVESTMENTS IN SECURITIES — 115.9%
(Cost $611,063,991(a))						606,848,496
		NUMBER OF CONTRACTS
CALL SWAPTIONS WRITTEN — (0.2)%
Barclays Capital, Strike Rate 5.140%, Expires 04/21/08			(970	)(j)		(217,957	)
Chase Securities, Strike Rate 5.485%, Expires 10/26/09			(1,100	)(j)		(466,400	)
Citibank, Strike Rate 5.670%, Expires 01/04/10			(390	)(j)		(192,741	)
TOTAL CALL SWAPTIONS WRITTEN
(Premiums received $1,036,575)						(877,098	)
PUT SWAPTIONS WRITTEN — (0.1)%
Barclays Capital, Strike Rate 5.140%, Expires 04/21/08			(970	)(j)		(262,094	)
Barclays Capital, Strike Rate 5.650%, Expires 03/12/07			(12,820	)(j)		(18,718	)
Chase Securities, Strike Rate 5.485%, Expires 10/26/09			(1,100	)(j)		(319,220	)
Citibank, Strike Rate 5.670%, Expires 01/04/10			(390	)(j)		(99,747	)
TOTAL PUT SWAPTIONS WRITTEN
(Premiums received $1,087,855)						(699,779	)
LIABILITIES IN EXCESS OF OTHER ASSETS — (15.6)%
(including $17,123,591 of payable for investments purchased and $68,300,458 of payable for financing transactions)						(81,834,875	)
NET ASSETS — 100.0%					$	523,436,744

(a) Cost for federal income tax purposes is $611,063,991. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	1,224,774
Gross unrealized depreciation		(5,440,269	)
	$	(4,215,495	)

(b) Security, or a portion thereof, subject to financing transactions.

(c) Variable rate security. Rates shown are the rates as of December 31, 2006.

(d) Rates shown are the effective yields as of December 31, 2006.

(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. As of December 31, 2006, the Portfolio held 0.9%of its net assets, with a current market value of $4,683,627, in securities restricted as to resale.

(f) Security valued at fair value as determined in good faith by or under the direction of the Board of Trustees. As of December 31, 2006, these securities had a total market value of $45,774, which represents less than 0.1% of net assets.

(g) Security is illiquid. As of December 31, 2006, the Portfolio held 0.4% of its net assets, with a current market value of $2,046,488, in these securities.

(h) Security, or a portion thereof, pledged as collateral with a value of $1,969,065 on 1,285 short U.S. Treasury Note futures contracts, 1,111 long U.S. Treasury Note futures contracts and 96 long U.S. Treasury Bond futures contracts expiring March 2007, 438 short Euro-dollar futures contracts expiring June 2007, 201 short Euro-dollar futures expiring September 2007 and 239 short Euro-dollar futures contracts expiring December 2007. The value of such contracts on December 31, 2006 was $492,759,283, with an unrealized gain of $394,359 (including commissions of $8,532).

(i) Security is a foreign domiciled issuer which is registered with the Securities and Exchange Commission.

(j) Each swaption contract is equivalent to $10,000 notional amount.

15

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERMEDIATE BOND PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
U.S. GOVERNMENT & AGENCY OBLIGATIONS — 10.6%
Federal Home Loan Mortgage Corp., Unsecured Notes
3.01%(b)	04/19/07	$	275	$	273,276
Federal National Mortgage Assoc., Subordinated Notes
5.25%	08/01/12		130		130,632
5.12%(b)	01/02/14		150		149,607
Federal National Mortgage Assoc., Unsecured Notes
2.71%(b)	01/30/07		250		249,522
Small Business Administration Participation Certificates, Series 96-20E, Class 1
7.60%	05/01/16		141		147,644
Small Business Administration Participation Certificates, Series 03-P10A, Class 1
4.52%	02/10/13		115		111,709
U.S. Treasury Inflation Protected Bonds
2.00%	01/15/26		140		133,863
U.S. Treasury Inflation Protected Notes
2.50%	07/15/16		240		241,625
U.S. Treasury Notes
4.62%(c)	11/15/16		50		49,672
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost $1,484,341)					1,487,550
MORTGAGE PASS-THROUGHS — 33.6%
Federal Home Loan Mortgage Corp. ARM
4.00%(d)	03/01/34		104		101,864
3.32%(d)	07/01/34		193		195,171
Federal National Mortgage Assoc. 15 Year TBA
5.00%	01/01/22		200		196,562
5.50%	01/01/22		800		799,750
Federal National Mortgage Assoc. 30 Year TBA
6.00%	01/01/37		1,800		1,811,562
6.50%	01/01/37		1,300		1,324,375
Federal National Mortgage Assoc. ARM
4.00%(d)	04/01/34		306		299,215
TOTAL MORTGAGE PASS-THROUGHS
(Cost $4,747,243)					4,728,499
COLLATERALIZED MORTGAGE OBLIGATIONS — 10.9%
Bear Stearns Mortgage Trust, Series 04-13, Class A1
5.72%(d)	11/25/34		119		119,040
Countrywide Home Loans, Series 04-29, Class 1A1
5.62%(d)	02/25/35		41		40,792
Federal Home Loan Mortgage Corp., Series 2927, Class BA
5.50%	10/15/33		101		101,098
Federal Home Loan Mortgage Corp., Series 2979, Class BC
5.00%	04/15/20		190		184,047
Federal Home Loan Mortgage Corp., Series 2996, Class MK
5.50%	06/15/35		90		89,799
Federal National Mortgage Assoc., Series 04-36, Class BS
5.50%	11/25/30		123		123,055
Federal National Mortgage Assoc., Series 05-48, Class AR
5.50%	02/25/35		98		97,912
Federal National Mortgage Assoc., Series 05-70, Class GA
5.50%	12/25/34		111		110,624
Federal National Mortgage Assoc., Series 346, Class 2 (IO)
5.50%(e)	12/01/33		260		59,487
Federal National Mortgage Assoc., Series 363, Class 2 (IO)
5.50%(e)	11/01/35		270		63,736
Federal National Mortgage Assoc., Series 367, Class 2 (IO)
5.50%(e)	01/25/36		278		65,608
Federal National Mortgage Assoc., Series 379, Class 5 (IO)
5.00%(e)	05/25/36		372		85,382
Morgan Stanley Capital, Inc., Series 97-HF1, Class X (IO)
1.95%(e)(f)	07/15/29		49		205
Mortgage IT Trust, Series 04-1, Class A1
5.74%(d)	11/25/34		186		186,624
Structured Mortgage Loan Trust, Series 04-13, Class A2
5.65%(d)	09/25/34		37		36,799
Wells Fargo Mortgage Backed Securities Trust, Series 04-5, Class A1
4.52%(d)	06/25/34		168		162,905
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $1,554,518)					1,527,113
COMMERCIAL MORTGAGE BACKED SECURITIES — 14.4%
Bear Stearns Commercial Mortgage Securities, Inc., Series 00-WF2, Class A2
7.32%	10/15/32		110		116,822
Chase Commercial Mortgage Securities Corp., Series 97-1, Class X (IO)
1.32%(e)	04/19/15		626		12,978
Credit Suisse First Boston Mortgage Securities Corp., Series 97-C1, Class AX (IO)
1.55%(e)(f)	06/20/29		1,190		35,401
Credit Suisse First Boston Mortgage Securities Corp., Series 97-C2, Class AX (IO)
1.08%(e)	01/17/35		629		6,123
Credit Suisse First Boston Mortgage Securities Corp., Series 00-C1, Class A1
7.32%	04/15/42		87		88,879

16

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERMEDIATE BOND PORFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS )	MATURITY	PAR (000)		VALUE
COMMERCIAL MORTGAGE BACKED SECURITIES (Continued)
Credit Suisse First Boston Mortgage Securities Corp., Series 02, Class A3
5.60%	07/15/35	$	190	$	193,074
Credit Suisse First Boston Mortgage Securities Corp., Series 03-C3, Class A5
3.94%	05/15/38		200		185,736
Donaldson, Lufkin & Jenrette, Inc., Commerical Mortgage Corp., Series 98-CF1, Class A1B
6.41%	02/18/31		165		166,245
General Electric Capital Commercial Mortgage Corp., Series 02-2A, Class A3
5.35%	08/11/36		190		190,892
General Electric Capital Commercial Mortgage Corp., Series 05-C1, Class A3
4.58%	06/10/48		130		126,343
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 97-C1, Class X (IO)
1.52%(e)	07/15/27		1,228		30,477
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 03-C2, Class A2
5.28%(d)	05/10/40		210		212,781
J.P. Morgan Mortgage Trust, Series 06-A2, Class 5A3
3.75%(d)	11/25/33		281		277,046
Lehman Brothers-UBS Commercial Mortgage Trust, Series 05-C1, Class A3
4.54%	02/15/30		150		145,449
Structured Asset Securities Corp., Series 96-CFL, Class X1 (IO)
2.15%(e)	02/25/28		304		11,124
Washington Mutual Asset Securities Corp., Series 05-C1A, Class A1
4.24%(f)	05/25/36		125		122,998
Washington Mutual Asset Securities Corp., Series 05-C1A, Class X (IO)
2.17%(e)(f)	05/25/36		1,984		104,912
TOTAL COMMERCIAL MORTGAGE BACKED SECURITIES
(Cost $2,079,759)					2,027,280
CERTIFICATE OF DEPOSIT — 2.9%
Barclays Bank PLC (United Kingdom)
5.37%(d)
(Cost $410,000)	03/13/09		410		410,143
ASSET BACKED SECURITIES — 13.5%
Capital Auto Receivables Asset Trust, Series 04-2, Class A4
3.75%	07/15/09		225		220,972
Capital Auto Receivables Asset Trust, Series 06-SN1A, Class A2A
5.40%(f)	01/20/09		375		375,098
Countrywide Certificates, Series 05-IM2, Class A1
5.43%(d)	06/25/27		3		3,013
Countrywide Certificates, Series 05-IM3, Class A1
5.47%(d)	04/25/28		95		95,160
Countrywide Certificates, Series 06-IM1, Class A1
5.44%(d)	09/25/28		75		75,364
DaimlerChrysler Auto Trust, Series 05-B, Class A3
4.04%	09/08/09		190		188,811
Ford Credit Auto Owner Trust, Series 06-A, Class A3
5.07%	03/15/10		250		249,316
Honda Auto Receivables Owner Trust, Series 05-4, Class A3
4.46%	05/21/09		225		223,560
MBNA Credit Card Master Notes Trust, Series 06, Class A1
4.90%	02/15/09		225		224,286
Nissan Auto Receivables Owner Trust, Series 05-C, Class A3
4.19%	07/15/09		250		247,602
TOTAL ASSET BACKED SECURITIES
(Cost $1,911,958)					1,903,182
CORPORATE BONDS — 22.8%
Banks — 4.7%
Bank of America Corp. Capital Trust XI, Capital Securities
6.62%	05/23/36		5		5,396
Bank of America Corp., Unsecured Notes
5.38%(d)	03/24/09		250		250,238
Citigroup, Inc., Unsecured Notes
4.12%(b)	02/22/10		260		252,213
Depfa ACS Bank (Ireland), Senior Notes
3.62%	10/29/08		50		48,696
UBS Preferred Funding Trust, Inc., Capital Securities
8.62%(d)(g)			10		11,047
Wells Fargo & Co., Unsecured Notes
4.62%	08/09/10		100		98,134
					665,724
Broadcasting — 0.9%
Charter Communications Holdings II LLC, Unsecured Notes
10.25%	09/15/10		45		47,081
Cox Communications, Inc., Senior Unsecured Notes
7.12%	10/01/12		25		26,652
News America Holdings, Inc., Secured Notes
8.50%	02/23/25		25		29,588
News America Holdings, Inc., Senior Debentures
9.50%	07/15/24		15		19,124
					122,445
Chemicals — 0.2%
Lyondell Chemical Co., Senior Unsecured Notes
8.00%	09/15/14		10		10,375
8.25%	09/15/16		20		21,000
					31,375

17

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERMEDIATE BOND PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
CORPORATE BONDS (Continued)
Construction — 0.1%
International Steel Group, Inc., Senior Unsecured Notes
6.50%	04/15/14	$	15	$	15,412
Energy & Utilities — 0.2%
Midwest Generation LLC, Pass-Through Certificates
8.56%	01/02/16		13		13,806
Midwest Generation LLC, Senior Secured Notes
8.75%	05/01/34		10		10,850
					24,656
Entertainment & Leisure — 1.0%
Comcast Cable Communications, Inc., Senior Unsecured Notes
6.75%	01/30/11		35		36,673
Comcast Cable Holdings LLC, Senior Debentures
7.88%	08/01/13		5		5,560
Comcast Corp., Unsecured Notes
5.90%	03/15/16		50		50,143
Seneca Gaming Corp., Senior Unsecured Notes
7.25%	05/01/12		15		15,262
Time Warner Cos., Inc., Senior Unsecured Notes
6.75%	04/15/11		10		10,468
Turner Broadcasting Corp., Senior Notes
8.38%	07/01/13		15		16,867
					134,973
Finance — 7.2%
The Bear Stearns Cos., Inc., Unsecured Notes
3.25%	03/25/09		50		47,968
Ford Motor Credit Co., Senior Notes
5.80%	01/12/09		40		39,274
General Electric Capital Corp., Unsecured Notes
5.42%(d)	01/15/08		370		370,352
5.00%	11/15/11		65		64,523
Household Finance Corp., Senior Notes
6.45%	02/01/09		20		20,428
Lehman Brothers Holdings, Inc., Senior Unsecured Notes
5.75%	07/18/11		65		66,271
Momentive Performance Materials, Inc., Senior Unsecured Notes
10.12%(f)	12/01/14		15		15,075
Morgan Stanley, Senior Notes
5.40%(d)	03/07/08		265		265,193
PSEG Funding Trust, Inc., Capital Securities
5.38%	11/16/07		50		49,895
Xstrata Finance Ltd. (Canada), Unsecured Notes
5.80%(f)	11/15/16		75		74,782
					1,013,761
Industrial — 0.2%
Osprey Trust/Osprey, Inc., Senior Secured Notes
7.80%(d)(f)(h)(i)	01/15/03		50		20,750
Insurance — 0.2%
MassMutual Global Funding II (Cayman Islands), Senior Secured Notes
2.55%(f)	07/15/08		35		33,542
Manufacturing — 0.2%
Briggs & Stratton Corp., Senior Unsecured Notes
8.88%	03/15/11		20		21,650
Medical & Medical Services — 1.0%
Bio-Rad Laboratories, Inc., Senior Subordinated Notes
6.12%	12/15/14		10		9,675
UnitedHealth Group, Inc., Unsecured Notes
5.25%	03/15/11		75		74,743
WellPoint, Inc., Unsecured Notes
5.00%	01/15/11		50		49,390
					133,808
Motor Vehicles — 0.2%
Arvinmeritor, Inc., Senior Notes
6.80%	02/15/09		2		1,960
DaimlerChrysler N.A. Holding Corp., Notes
4.75%	01/15/08		25		24,772
					26,732
Oil & Gas — 1.5%
Anadarko Petroleum Corp., Senior Unsecured Notes
5.95%	09/15/16		50		50,105
ANR Pipeline Co., Senior Debentures
9.62%	11/01/21		5		6,635
7.38%	02/15/24		5		5,605
Colorado Interstate Gas Co., Senior Unsecured Notes
6.80%	11/15/15		5		5,199
Halliburton Co., Senior Unsecured Notes
5.50%	10/15/10		25		24,956
KCS Energy, Inc., Senior Unsecured Notes
7.12%	04/01/12		5		4,862
Northwest Pipeline Corp., Senior Unsecured Notes
8.12%	03/01/10		15		15,619
Oneok, Inc., Senior Unsecured Notes
5.51%	02/16/08		75		74,947
Transcontinental Gas Pipeline Corp., Senior Notes
8.88%	07/15/12		5		5,650
The Williams Cos., Inc., Senior Unsecured Notes
7.12%	09/01/11		10		10,400
					203,978

18

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERMEDIATE BOND PORFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
CORPORATE BONDS (Continued)
Real Estate — 0.0%
American Real Estate Partners LP, Senior Unsecured Notes
8.12%	06/01/12	$	5	$	5,162
Retail Merchandising — 0.1%
Federated Department Stores, Inc., Senior Unsecured Notes
6.30%	04/01/09		10		10,167
May Department Stores Co., Debentures
7.45%	10/15/16		10		10,791
					20,958
Semiconductors & Related Devices — 0.3%
Freescale Semiconductor, Inc., Senior Unsecured Notes
9.12%(f)	12/15/14		30		29,812
9.24%(d)(f)	12/15/14		10		9,913
					39,725
Telecommunications — 1.0%
Cincinnati Bell, Inc., Senior Unsecured Notes
7.25%	07/15/13		15		15,525
Intelsat Ltd. (Bermuda), Senior Unsecured Notes
9.25%(f)	06/15/16		10		10,750
PanAmSat Corp., Senior Unsecured Notes
9.00%(f)	06/15/16		5		5,294
Qwest Corp., Unsecured Notes
8.61%(d)	06/15/13		15		16,237
Verizon Maryland, Inc., Senior Debentures
6.12%	03/01/12		30		30,716
Wind Acquistion Finance SA (Luxembourg), Senior Unsecured Notes
10.75%(f)	12/01/15		15		17,062
Windstream Corp., Senior Unsecured Notes
8.12%(f)	08/01/13		20		21,650
8.62%(f)	08/01/16		25		27,375
					144,609
Transportation — 0.4%
Overseas Shipholding Group, Inc., Senior Unsecured Notes
7.50%	02/15/24		10		10,162
Union Pacific Corp., Senior Notes
6.62%	02/01/08		50		50,581
					60,743
Yankee — 3.4%
Eksportfinans ASA (Norway), Unsecured Notes
4.38%(j)	07/15/09		20		19,645
EnCana Corp. (Canada), Bonds
6.30%(j)	11/01/11		25		25,793
EnCana Holdings Finance Corp. (Canada), Senior Unsecured Notes
5.80%(j)	05/01/14		10		10,060
Ispat Inland ULC (Canada), Senior Secured Notes
9.75%(j)	04/01/14		22		24,585
Rogers Wireless, Inc. (Canada), Senior Secured Notes
7.50%(j)	03/15/15		25		27,125
Scottish Power PLC (United Kingdom), Unsecured Notes
4.91%(j)	03/15/10		25		24,640
Swedish Export Credit Corp. (Sweden), Unsecured Notes
3.50%(j)	01/15/08		75		73,878
Telecom Italia Capital (Luxembourg), Senior Unsecured Notes
5.25%(j)	11/15/13		25		23,837
Telefonica Europe BV (Netherlands), Senior Unsecured Notes
7.75%(j)	09/15/10		10		10,741
Tyco International Group SA (Luxembourg), Senior Unsecured Notes
6.75%(j)	02/15/11		75		79,080
6.38%(j)	10/15/11		15		15,697
Vodafone Group PLC (United Kingdom), Senior Unsecured Notes
7.75%(j)	02/15/10		135		143,867
					478,948
TOTAL CORPORATE BONDS
(Cost $3,203,890)					3,198,951
FOREIGN BONDS — 0.4%
Province of Manitoba (Canada), Senior Unsecured Notes (NZD)
6.38%	09/01/15		30		20,538
Province of Ontario (Canada), Unsecured Notes (NZD)
6.25%	06/16/15		50		33,816
TOTAL FOREIGN BONDS
(Cost $56,242)					54,354
TAXABLE MUNICIPAL BONDS — 1.5%
New York Sales Tax Asset Receivable Corp. Revenue Bonds, Series 04, Class B
3.60%	10/15/08		35		34,064
Port Authority of New York & New Jersey Revenue Notes, Series 04, Class XX
3.30%	09/15/07		125		123,219
Wisconsin General Revenue Bonds, Series 03, Class A
4.80%	05/01/13		50		49,008
TOTAL TAXABLE MUNICIPAL BONDS
(Cost $210,167)					206,291
		PAR/SHARES (000)
SHORT TERM INVESTMENTS — 14.3%
Federal Home Loan Bank, Discount Notes
4.80%(k)	01/02/07		1,500		1,499,800
Galileo Money Market Fund			511		510,923
TOTAL SHORT TERM INVESTMENTS
(Cost $2,010,723)					2,010,723

19

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERMEDIATE BOND PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED ) (PERCENTAGE OF NET ASSETS)		NUMBER OF CONTRACTS			VALUE
CALL SWAPTIONS PURCHASED — 0.2%
Barclays Capital, Strike Rate 5.520%, Expires 09/19/16
(Cost $24,364)			40	(l)	$	23,811
PUT OPTIONS PURCHASED — 0.0%
March 10 year U.S. Treasury Notes futures, Strike Price $106, Expires 02/23/07
(Cost $1,133)			3			1,453
PUT SWAPTIONS PURCHASED — 0.2%
Barclays Capital, Strike Rate 5.400%, Expires 03/12/07			370	(l)		2,428
Barclays Capital, Strike Rate 5.520%, Expires 09/21/15			40	(l)		21,918
Barclays Capital, Strike Rate 5.900%, Expires 03/12/07			370	(l)		72
Citibank, Strike Rate -0.020%, Expires 06/01/07			630	(l)		6,511
TOTAL PUT SWAPTIONS PURCHASED
(Cost $34,002)						30,929
TOTAL INVESTMENTS IN SECURITIES — 125.3%
(Cost $17,728,340(a))						17,610,279
	MATURITY	PAR (000)
MORTGAGE PASS-THROUGH TBA SALE COMMITMENTS — (4.3)%
Federal National Mortgage Assoc. 15 Year TBA
5.00%	01/01/22	$	(200	)		(196,562	)
Federal National Mortgage Assoc. 30 Year TBA
6.00%	01/01/37		(400	)		(402,625	)
TOTAL MORTGAGE PASS-THROUGH TBA SALE COMMITMENTS
(Premiums received $602,094)						(599,187	)
		NUMBER OF CONTRACTS
CALL SWAPTIONS WRITTEN — (0.4)%
Barclays Capital, Strike Rate 5.140%, Expires 04/21/08			(30	)(l)		(6,741	)
Chase Securities, Strike Rate 5.485%, Expires 10/26/09			(80	)(l)		(33,920	)
Citibank, Strike Rate 5.670%, Expires 01/04/10			(40	)(l)		(19,768	)
TOTAL CALL SWAPTIONS WRITTEN
(Premiums received $63,650)						(60,429	)
PUT SWAPTIONS WRITTEN — (0.3)%
Barclays Capital, Strike Rate 5.140%, Expires 04/21/08			(30	)(l)		(8,106	)
Barclays Capital, Strike Rate 5.650%, Expires 03/12/07			(740	)(l)		(1,081	)
Chase Securities, Strike Rate 5.485%, Expires 10/26/09			(80	)(l)		(23,216	)
Citibank, Strike Rate 5.670%, Expires 01/04/10			(40	)(l)		(10,230	)
TOTAL PUT SWAPTIONS WRITTEN
(Premiums received $66,610)						(42,633	)
LIABILITIES IN EXCESS OF OTHER ASSETS — (20.3)%
(including $6,999,514 of payable for investments purchased and $3,783,400 of receivable for investments sold)						(2,848,007	)
NET ASSETS — 100.0%					$	14,060,023

(a) Cost for federal income tax purposes is $17,730,052. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	47,168
Gross unrealized depreciation		(166,941	)
	$	(119,773	)

(b) Security, or a portion thereof, pledged as collateral with a value of $924,617 on 46 short U.S. Treasury Note futures contracts, 29 long U.S. Treasury Note futures contracts and 6 long U.S. Treasury Bond futures contracts expiring March 2007 and 34 short Euro-dollar futures contracts expiring June 2007. The value of such contracts on December 31, 2006 was $16,673,544, with an unrealized gain of $27,388 (including commissions of $285).

(c) Security, or a portion thereof, subject to financing transactions.

(d) Variable rate security. Rates shown are the rates as of December 31, 2006.

(e) Rates shown are the effective yields as of December 31, 2006.

(f) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. As of December 31, 2006, the Portfolio held 6.4% of its net assets, with a current market value of $904,620, in securities restricted as to resale.

(g) The security is a perpetual bond and has no stated maturity date.

(h) Security in default.

(i) As a result of bankruptcy proceedings, the company did not repay the principal amount of the security upon maturity.

(j) Security is a foreign domiciled issuer which is registered with the Securities and Exchange Commission.

(k) The rate shown is the effective yield at the time of purchase.

(l) Each swaption contract is equivalent to $10,000 notional amount.

20

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERMEDIATE BOND PORTFOLIO II

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
U.S. GOVERNMENT & AGENCY OBLIGATIONS — 13.4%
Federal Home Loan Bank, Unsecured Bonds
4.12%	02/15/08	$	4,500	$	4,446,229
Federal Home Loan Mortgage Corp., Unsecured Notes
3.00%	04/19/07		7,820		7,770,750
3.75%	02/27/09		10,025		9,735,298
Federal National Mortgage Assoc., Subordinated Notes
5.25%	08/01/12		3,070		3,084,926
4.62%	05/01/13		1,960		1,899,736
Federal National Mortgage Assoc., Unsecured Notes
2.71%	01/30/07		9,625		9,606,597
3.00%	04/19/07		5,600		5,564,731
4.15%	07/13/07		12,015		11,945,926
3.55%	11/16/07		8,985		8,856,775
3.25%	05/16/08		8,594		8,382,897
Small Business Administration Participation Certificates, Series 92-20H, Class 1
7.40%	08/01/12		543		561,504
Small Business Administration Participation Certificates, Series 96-20H, Class 1
7.25%	08/01/16		1,444		1,499,252
Small Business Administration Participation Certificates, Series 97-P10D, Class 1
6.51%	11/10/07		93		93,713
Small Business Administration Participation Certificates, Series 01-P10B, Class 1
6.34%(b)	08/01/11		1,217		1,254,603
U.S. Treasury Inflation Protected Bonds
2.00%	01/15/26		5,690		5,440,581
U.S. Treasury Inflation Protected Notes
2.00%	07/15/14		4,355		4,524,983
2.50%	07/15/16		2,495		2,511,896
U.S. Treasury Notes
4.88%(c)	08/15/16		9,660		9,775,466
4.62%(c)	11/15/16		24,500		24,339,231
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost $122,333,336)					121,295,094
MORTGAGE PASS-THROUGHS — 7.0%
Federal Home Loan Mortgage Corp. ARM
4.98%(b)	10/01/35		12,071		12,031,734
5.43%(b)	05/01/36		4,645		4,663,916
6.02%(b)	10/01/36		7,781		7,845,210
Federal National Mortgage Assoc.
8.50%	08/01/09		75		75,180
6.00%	05/16-10/36		24,516		24,685,879
5.50%	01/01/20		363		363,858
Federal National Mortgage Assoc. ARM
4.00%(b)	04/01/34		4,950		4,841,839
4.78%(b)	01/01/35		4,165		4,098,380
4.82%(b)	09/01/35		4,077		4,043,511
TOTAL MORTGAGE PASS-THROUGHS
(Cost $62,729,040)					62,649,507
COLLATERALIZED MORTGAGE OBLIGATIONS — 13.6%
Bear Stearns Mortgage Trust, Series 04-12, Class 1A1
5.70%(b)	01/25/35		637		637,790
Bear Stearns Mortgage Trust, Series 04-13, Class A1
5.72%(b)	11/25/34		4,191		4,199,589
Bear Stearns Mortgage Trust, Series 04-7, Class 4A
3.66%	10/25/34		4,866		4,854,414
Countrywide Home Loans, Series 04-29, Class 1A1
5.62%(b)	02/25/35		1,680		1,682,673
Federal Home Loan Mortgage Corp., Series 1361, Class I
6.00%	09/15/07		48		47,770
Federal Home Loan Mortgage Corp., Series 2626, Class NA
5.00%	06/15/23		8,465		8,413,893
Federal Home Loan Mortgage Corp., Series 3131, Class MA
5.50%	11/15/27		4,244		4,258,278
Federal Home Loan Mortgage Corp., Series 3200, Class AD
5.50%	05/01/29		18,057		18,002,509
Federal National Mortgage Assoc., Series 89-16, Class B (PO)
10.61%(d)	03/25/19		94		78,080
Federal National Mortgage Assoc., Series 05-109, Class PV
6.00%	10/25/32		9,955		10,103,335
Federal National Mortgage Assoc., Series 05-29, Class AT
4.50%	04/25/35		4,083		4,013,023
Federal National Mortgage Assoc., Series 05-29, Class WB
4.75%	04/25/35		5,680		5,579,692
Federal National Mortgage Assoc., Series 05-57, Class PA
5.50%	05/25/27		3,431		3,433,087
Federal National Mortgage Assoc., Series 05-62, Class CQ
4.75%	07/25/35		6,561		6,431,839
Federal National Mortgage Assoc., Series 05-83, Class LA
5.50%	10/25/35		9,292		9,301,176
Federal National Mortgage Assoc., Series 378, Class 4 (IO)
5.00%(e)	11/01/35		10,699		2,445,612
First Union National Bank Commercial Mortgage Trust, Series 01-C3, Class A3
6.42%	06/15/11		7,025		7,330,888
GSAA Home Equity Trust, Series 04-8, Class A3A
5.72%(b)	09/25/34		601		601,996
Mortgage IT Trust, Series 04-1, Class A1
5.74%(b)	11/25/34		5,663		5,678,034
Opteum Mortgage Acceptance Corp., Series 06-2, Class A1A
5.41%(b)	07/25/36		5,877		5,874,331
Structured Mortgage Loan Trust, Series 04-13, Class A2
5.65%(b)	09/25/34		1,645		1,647,499

21

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERMEDIATE BOND PORTFOLIO II (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
COLLATERALIZED MORTGAGE OBLIGATIONS (Continued)
Structured Mortgage Loan Trust, Series 04-6, Class 4A1
4.84%(b)	06/25/34	$	8,474	$	8,362,010
Summit Mortgage Trust, Series 00-1, Class B1
6.57%(b)(f)(g)	12/28/12		76		76,176
Wells Fargo Mortgage Backed Securities Trust, Series 04-5, Class A1
4.52%(b)	06/25/34		9,309		9,050,252
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $122,554,967)					122,103,946
COMMERCIAL MORTGAGE BACKED SECURITIES — 11.7%
Banc of America Commercial Mortgage, Inc., Series 01-1, Class A2
6.50%	04/15/36		4,710		4,889,056
Chase Commercial Mortgage Securities Corp., Series 00-3, Class A2
7.32%	10/15/32		2,005		2,122,793
Commercial Mortgage Acceptance Corp., Series 98-C2, Class A2
6.03%	03/15/08		2,781		2,792,073
Credit Suisse First Boston Mortgage Securities Corp., Series 02-CKS4, Class A2
5.18%	08/15/12		5,900		5,870,905
Credit Suisse First Boston Mortgage Securities Corp., Series 02-CP5, Class A2
4.94%	12/15/35		6,185		6,077,447
Deutsche Alt-A Securities, Inc., Series 06-AR3, Class A3
5.44%(b)	08/25/36		10,320		10,322,186
Donaldson, Lufkin & Jenrette, Inc., Commerical Mortgage Corp., Series 99-CG2, Class A1B
7.30%	06/10/09		5,860		6,085,368
Federal National Mortgage Assoc. Grantor Trust, Series 02-T6, Class A1
3.31%	02/25/32		1,413		1,301,639
First Union National Bank Commercial Mortgage Trust, Series 99-C4, Class C
7.79%(f)	12/15/31		5,690		6,060,219
First Union National Bank Commercial Mortgage Trust, Series 00-C2, Class A2
7.20%(b)	10/15/32		4,430		4,677,342
General Electric Capital Commercial Mortgage Corp., Series 02-1A, Class A3
6.27%	12/10/35		4,850		5,067,193
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 97
7.43%	02/21/21		49		49,261
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 97-C1, Class X (IO)
1.52%(e)	07/15/27		11,178		277,455
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 99-C3, Class A2
7.18%	08/15/36		3,637		3,766,849
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 00-C2, Class A2
7.46%	08/16/33		4,403		4,660,123
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 00-C3, Class A2
6.96%	11/15/10		6,040		6,378,268
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 03-C2, Class A2
5.28%(b)	05/10/40		5,830		5,907,204
J.P. Morgan Commercial Mortgage Finance Corp., Series 97-C5, Class E
7.61%	09/15/29		4,896		5,397,150
J.P. Morgan Mortgage Trust, Series 06-A2, Class 5A3
3.75%(b)	11/25/33		7,917		7,806,427
Lehman Brothers Commercial Conduit Mortgage Trust, Series 99-C2, Class A1
7.10%	10/15/32		174		174,072
Lehman Brothers-UBS Commercial Mortgage Trust, Series 00-C5, Class A1
6.41%	12/15/19		3,244		3,268,941
The Money Store Small Business Administration Loan Trust, Series 99-1, Class A
6.05%(b)	07/15/25		1,552		1,541,780
Nationslink Funding Corp., Series 99-SL, Class A6
6.61%	11/10/30		72		72,340
Structured Asset Receivables Trust, Series 03-2
5.72%(b)(f)(h)	01/21/09		4,243		4,241,512
Washington Mutual Asset Securities Corp., Series 05-C1A, Class A1
4.24%(f)	05/25/36		3,410		3,358,225
Washington Mutual Asset Securities Corp., Series 05-C1A, Class X (IO)
2.17%(e)(f)	05/25/36		56,580		2,991,384
TOTAL COMMERCIAL MORTGAGE BACKED SECURITIES
(Cost $106,479,546)					105,157,212
PROJECT LOANS — 0.0%
Federal Housing Authority, USGI Project, Series 56
7.46%
(Cost $511,667)	01/01/23		515		520,508
CERTIFICATE OF DEPOSIT — 1.4%
Barclays Bank PLC (United Kingdom)
5.37%(b)	03/13/09		11,655		11,659,079

22

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERMEDIATE BOND PORTFOLIO II (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
CERTIFICATE OF DEPOSIT (Continued)
SunTrust Bank, Inc.
4.42%	06/15/09	$	1,375	$	1,355,723
TOTAL CERTIFICATE OF DEPOSIT
(Cost $13,030,000)					13,014,802
ASSET BACKED SECURITIES — 21.6%
American Express Credit Account Master Trust, Series 06-01, Class A
5.38%(b)	12/15/13		6,850		6,856,431
Amresco Independence Funding, Inc., Series 00-1, Class A
6.40%(b)(f)	01/15/27		1,204		1,203,729
Bank One Issuance Trust, Series 02-A5, Class A5
5.47%(b)	06/15/10		8,375		8,384,541
Bear Stearns Securities, Inc., Series 06-3, Class A1
5.47%(b)	08/25/36		7,879		7,880,011
Boston Edison Co., Series 99-1, Class A4
6.91%	09/15/09		2,205		2,219,250
Capital Auto Receivables Asset Trust, Series 06-SN1A, Class A2A
5.40%(f)	01/20/09		11,650		11,653,029
Carrington Mortgage Loan Trust, Series 06-NC3, Class A1
5.37%(b)	01/25/31		7,263		7,263,439
Chase Issuance Trust, Series 04-A9, Class A9
3.22%	06/15/10		6,100		6,005,365
Chase Issuance Trust, Series 05, Class A5
5.37%(b)	02/15/12		8,600		8,608,824
Chase Issuance Trust, Series 06, Class A3
5.34%(b)	07/15/11		5,825		5,829,471
Citibank Credit Card Issuance Trust, Series 04, Class A1
2.55%	01/20/09		7,880		7,868,941
Citibank Credit Card Issuance Trust, Series 04, Class A4
3.20%	08/24/09		8,375		8,263,206
Citigroup Mortgage Loan Trust, Inc., Series 06-HE2, Class A2A
5.37%(b)	08/25/36		8,021		8,021,409
Countrywide Certificates, Series 04-12, Class 2AV3
5.48%(b)	12/25/24		639		639,093
Countrywide Certificates, Series 05-IM2, Class A1
5.43%(b)	06/25/27		89		89,045
Countrywide Certificates, Series 05-IM3, Class A1
5.47%(b)	04/25/28		2,704		2,704,122
Countrywide Certificates, Series 06-IM1, Class A1
5.44%(b)	09/25/28		2,060		2,059,953
DaimlerChrysler Auto Trust, Series 04-5, Class A3
3.18%	09/08/08		2,060		2,050,462
Discover Card Master Trust I, Series 05-1, Class A
5.36%(b)	09/16/10		5,650		5,653,204
Epoch, Series 02-2I, Class 2A-l
6.00%(b)(f)	05/30/07		4,900		4,912,250
First Franklin Mortgage Loan Certificates, Series 06-FF10, Class A2
5.37%(b)	07/25/36		4,052		4,051,815
Fremont Home Loan Trust, Series 06-2, Class 2A1
5.41%(b)	02/25/36		4,986		4,985,908
Green Tree Financial Corp., Series 96-7, Class A6
7.65%	10/15/27		960		992,497
IFC Small Business Administration Loan-Backed Certificates, Series 97-1, Class A
6.25%(b)(f)	01/15/24		485		484,771
MBNA Credit Card Master Notes Trust, Series 98-E, Class A
5.52%(b)	09/15/10		6,525		6,541,782
MBNA Credit Card Master Notes Trust, Series 04-A4, Class A4
2.70%	09/15/09		7,900		7,843,121
MBNA Credit Card Master Notes Trust, Series 05-A3, Class A3
4.10%	05/15/10		5,200		5,053,663
MBNA Credit Card Master Notes Trust, Series 06, Class A1
4.90%	02/15/09		6,575		6,554,149
MBNA Credit Card Master Notes Trust, Series 06-A4, Class A4
5.34%(b)	09/15/11		8,825		8,831,557
The Money Store Small Business Administration Loan Trust, Series 97-2, Class A
6.05%(b)	02/15/29		1,155		1,156,343
Novastar Home Equity Loan, Series 06-2, Class A2A
5.40%(b)	06/25/36		4,543		4,543,769
PBG Equipment Trust, Series 00-1A, Class A
6.27%(f)	01/20/12		711		711,746
PMC Capital LP, Series 98-1, Class A
7.25%(b)(f)	04/01/21		1,586		1,585,653
Popular Mortgage Pass-Through Trust, Series 06-D, Class A1
5.38%(b)	11/25/36		5,916		5,918,204
Residential Asset Mortgage Products, Inc., Series 05-NC1, Class AI1
5.44%(b)	09/25/27		2,164		2,164,607
Residential Asset Mortgage Products, Inc., Series 05-RZ4, Class A1
5.47%(b)	11/25/35		4,114		4,114,412
Residential Asset Securities Corp., Series 06-EMX6, Class A1
5.38%(b)	10/25/30		7,393		7,393,519
Structured Asset Securities Corp., Series 03-AL1, Class A
3.36%(f)	04/25/31		2,240		2,014,172
Student Loan Marketing Assoc. Student Loan Trust, Series 05-5, Class A1
5.38%(b)	01/25/18		2,941		2,941,815

23

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERMEDIATE BOND PORTFOLIO II (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
ASSET BACKED SECURITIES (Continued)
Student Loan Marketing Assoc. Student Loan Trust, Series 05-8, Class A4
4.25%	01/25/28	$	7,375	$	7,224,845
SWB Loan-Backed Certificates, Series 99-1, Class A
7.38%(f)	05/15/25		1,296		1,308,820
TOTAL ASSET BACKED SECURITIES
(Cost $194,949,797)					194,582,943
CORPORATE BONDS — 32.1%
Aerospace — 0.5%
Raytheon Co., Senior Notes
6.75%	08/15/07		1,752		1,764,904
United Technologies Corp., Unsecured Notes
5.44%(b)	06/01/09		2,825		2,828,014
					4,592,918
Banks — 7.1%
Bank of America Corp. Capital Trust XI, Capital Securities
6.62%	05/23/36		535		577,363
Bank of America Corp., Subordinated Notes
7.80%	02/15/10		1,115		1,197,312
Bank of America Corp., Unsecured Notes
5.38%(b)	03/24/09		6,775		6,781,457
Bank of New York Co., Inc., Senior Subordinated Notes
3.80%	02/01/08		1,400		1,377,337
BankBoston N.A., Subordinated Bank Notes
6.38%	04/15/08		2,575		2,607,860
BankBoston N.A., Subordinated Notes
7.00%	09/15/07		450		453,676
Barclays Bank PLC (United Kingdom), Subordinated Notes
7.38%(b)(f)(i)			1,500		1,619,982
Citigroup, Inc., Subordinated Notes
6.38%	11/15/08		1,710		1,742,832
Citigroup, Inc., Unsecured Notes
4.12%	02/22/10		6,585		6,387,766
4.62%	08/03/10		860		844,600
Depfa ACS Bank (Ireland), Senior Secured Bonds
4.88%(f)	10/28/15		2,800		2,745,985
Deutsche Bank AG, Deposit Notes
5.34%(b)	03/15/07		1,975		1,974,941
HBOS Treasury Services PLC (United Kingdom), Unsecured Notes
3.75%(f)	09/30/08		1,360		1,324,380
HSBC Bank USA, Subordinated Notes
3.87%	06/07/07		9,700		9,637,939
J.P. Morgan Chase & Co., Senior Notes
2.62%	06/30/08		60		57,698
J.P. Morgan Chase & Co., Senior Unsecured Notes
5.25%	05/30/07		609		608,767
3.70%	01/15/08		2,325		2,287,644
J.P. Morgan Chase & Co., Subordinated Notes
6.25%	02/15/11		1,500		1,546,851
SunTrust Bank, Inc., Senior Unsecured Notes
3.62%	10/15/07		1,485		1,464,975
4.00%	10/15/08		1,100		1,074,968
U.S. Bank N.A., Senior Bank Notes
2.40%	03/12/07		4,560		4,531,824
3.75%	02/06/09		850		825,922
U.S. Bank N.A., Subordinated Notes
6.30%	07/15/08		1,360		1,379,817
U.S. Central Credit Union, Unsecured Notes
2.75%	05/30/08		1,915		1,841,259
UBS Preferred Funding Trust, Inc., Capital Securities
8.62%(b)(i)			475		524,706
Wachovia Corp., Subordinated Notes
5.62%(j)	12/15/08		2,150		2,160,529
Wells Fargo & Co., Senior Unsecured Notes
5.25%	12/01/07		1,700		1,698,286
4.20%	01/15/10		675		657,583
Wells Fargo & Co., Unsecured Notes
4.62%	08/09/10		3,150		3,091,234
4.88%	01/12/11		830		821,758
					63,847,251
Broadcasting — 0.3%
Cox Communications, Inc., Senior Unsecured Notes
7.75%	11/01/10		295		317,267
7.12%	10/01/12		900		959,460
News America Holdings, Inc., Secured Notes
8.50%	02/23/25		650		769,283
News America Holdings, Inc., Senior Debentures
9.50%	07/15/24		550		701,212
					2,747,222
Computer Software & Services — 0.4%
Oracle Corp., Unsecured Notes
5.00%	01/15/11		3,650		3,613,259
Energy & Utilities — 1.4%
American Electric Power Co., Senior Notes
4.71%(b)	08/16/07		1,205		1,199,088
Dominion Resources, Inc., Senior Unsecured Notes
5.12%	12/15/09		455		452,096
DTE Energy Co., Senior Unsecured Notes
5.63%	08/16/07		1,475		1,475,460
NiSource Finance Corp., Secured Notes
7.88%	11/15/10		2,400		2,591,429
NiSource Finance Corp., Unsecured Notes
5.94%(b)	11/23/09		2,450		2,450,728

24

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERMEDIATE BOND PORTFOLIO II (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
CORPORATE BONDS (Continued)
Energy & Utilities (Continued)
PECO Energy Co., First Refunding Mortgages
5.95%	11/01/11	$	1,900	$	1,947,401
Virginia Electric and Power Co., Unsecured Notes
5.73%	11/25/08		2,514		2,523,447
					12,639,649
Entertainment & Leisure — 1.2%
Comcast Cable Communications Corp., Senior Notes
8.38%	05/01/07		340		343,146
Comcast Cable Communications Corp., Senior Unsecured Notes
5.45%	11/15/10		4,000		4,014,328
Comcast Cable Holdings LLC, Senior Debentures
7.88%	08/01/13		735		817,287
8.75%	08/01/15		965		1,141,387
Comcast Corp., Unsecured Notes
5.90%	03/15/16		1,250		1,253,565
Time Warner Cos., Inc., Senior Unsecured Notes
6.75%	04/15/11		1,110		1,161,957
Time Warner Cos., Inc., Unsecured Notes
6.00%	11/15/16		2,000		1,991,660
Turner Broadcasting Corp., Senior Notes
8.38%	07/01/13		300		337,350
					11,060,680
Finance — 8.1%
Aetna, Inc., Senior Unsecured Notes
6.00%	06/15/16		4,170		4,296,605
Archstone-Smith Trust Corp., Senior Unsecured Notes
5.00%	08/15/07		850		847,844
Associates Corp. N.A., Senior Notes
6.25%	11/01/08		2,000		2,030,666
BAE Systems Holdings, Inc., Unsecured Notes
5.20%(f)	08/15/15		680		647,727
The Bear Stearns Cos., Inc., Unsecured Notes
3.25%	03/25/09		3,500		3,357,739
Berkshire Hathaway Finance Corp., Senior Unsecured Notes
3.40%	07/02/07		2,400		2,379,050
4.12%	01/15/10		1,025		996,182
Cable & Wireless Optus Finance Ltd. (Australia), Unsecured Notes
8.00%(f)	06/22/10		1,425		1,529,072
Federated Retail Holdings, Inc., Senior Unsecured Notes
5.90%	12/01/16		1,400		1,397,823
General Electric Capital Corp., Unsecured Notes
3.45%	07/16/07		785		777,452
3.50%(k)	08/15/07		3,820		3,781,330
5.42%(b)	01/15/08		7,635		7,642,269
4.12%	09/01/09		1,115		1,087,122
4.88%	10/21/10		4,120		4,076,658
5.00%	11/15/11		8,255		8,194,483
HSBC Finance Corp., Senior Unsecured Notes
5.75%	01/30/07		500		500,161
Lehman Brothers Holdings, Inc., Senior Unsecured Notes
5.75%	04/11-07/11		4,500		4,588,178
Morgan Stanley, Senior Notes
5.40%(b)	03/07/08		7,445		7,450,428
5.62%	01/09/12		1,145		1,163,870
Morgan Stanley, Senior Unsecured Notes
6.75%	04/15/11		350		369,940
Morgan Stanley, Unsecured Notes
5.05%	01/21/11		4,855		4,823,452
Nationwide Building Society (United Kingdom), Unsecured Notes
2.62%(f)	01/30/07		2,045		2,041,023
4.25%(f)	02/01/10		350		339,083
Principal Life Global Funding, Inc., Unsecured Notes
3.62%(f)	04/30/08		1,085		1,058,604
Prudential Financial, Inc., Senior Unsecured Notes
3.75%	05/01/08		1,375		1,342,499
Prudential Funding LLC, Senior Unsecured Notes
6.60%(f)	05/15/08		810		821,253
PSEG Funding Trust, Inc., Capital Securities
5.38%	11/16/07		1,450		1,446,962
SP Powerassets Ltd. (Singapore), Unsecured Notes
3.80%(f)	10/22/08		1,325		1,291,847
Xstrata Finance Ltd. (Canada), Unsecured Notes
5.80%(f)	11/15/16		3,150		3,140,859
					73,420,181
Insurance — 1.3%
Allstate Financial Global Funding, Unsecured Notes
5.25%(f)	02/01/07		1,430		1,429,881
ASIF Global Financing, Unsecured Notes
3.90%(f)	10/22/08		320		312,173
CHUBB Corp., Senior Unsecured Notes
4.93%	11/16/07		2,925		2,913,168
MassMutual Global Funding II (Cayman Islands), Senior Secured Notes
2.55%(f)	07/15/08		2,535		2,429,437
Metropolitan Life Global Funding, Inc., Unsecured Notes
2.60%(f)	06/19/08		1,540		1,474,002
New York Life Global Funding, Unsecured Notes
3.88%(f)	01/15/09		2,945		2,865,821
TIAA Global Markets, Senior Unsecured Notes
3.88%(f)	01/22/08		520		511,362
					11,935,844

25

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERMEDIATE BOND PORTFOLIO II (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
CORPORATE BONDS (Continued)
Medical & Medical Services — 0.6%
UnitedHealth Group, Inc., Unsecured Notes
5.25%	03/15/11	$	2,600	$	2,591,090
WellPoint, Inc., Unsecured Notes
3.50%	09/01/07		630		621,491
5.00%	01/15/11		1,925		1,901,509
					5,114,090
Motor Vehicles — 0.5%
DaimlerChrysler N.A. Holding Corp., Senior Unsecured Notes
5.75%	09/08/11		2,125		2,119,641
DaimlerChrysler N.A. Holding Corp., Unsecured Notes
4.88%	06/15/10		2,000		1,949,606
6.50%	11/15/13		475		487,685
					4,556,932
Oil & Gas — 1.6%
Anadarko Petroleum Corp., Senior Unsecured Notes
3.25%	05/01/08		1,600		1,550,600
5.95%	09/15/16		2,200		2,204,605
ConocoPhillips, Senior Unsecured Notes
8.75%	05/25/10		2,400		2,659,390
Halliburton Co., Senior Unsecured Notes
5.50%	10/15/10		1,850		1,846,712
Ocean Energy, Inc., Senior Unsecured Notes
4.38%	10/01/07		1,660		1,646,967
Oneok, Inc., Senior Unsecured Notes
5.51%	02/16/08		2,410		2,408,289
Texas Eastern Transmission LP, Senior Unsecured Notes
5.25%	07/15/07		1,590		1,585,666
Tosco Corp., Senior Unsecured Notes
7.25%	01/01/07		805		805,000
					14,707,229
Pharmaceuticals — 0.5%
Abbott Laboratories, Unsecured Notes
5.60%	05/15/11		1,880		1,905,963
Merck & Co., Inc., Unsecured Notes
2.50%	03/30/07		1,640		1,629,268
Schering-Plough Corp., Senior Notes
5.55%(b)	12/01/13		795		797,303
					4,332,534
Real Estate — 0.4%
Avalonbay Communities, Inc., Senior Unsecured Notes
5.00%	08/01/07		1,380		1,376,077
The Rouse Co., Unsecured Notes
3.62%	03/15/09		600		567,878
5.38%	11/26/13		1,405		1,305,814
					3,249,769
Retail Merchandising — 0.5%
Federated Department Stores, Inc., Senior Unsecured Notes
6.62%	09/01/08		820		833,335
May Department Stores Co., Debentures
7.45%	10/15/16		860		928,021
May Department Stores Co., Unsecured Notes
3.95%	07/15/07		2,710		2,683,645
					4,445,001
Telecommunications — 1.6%
AT&T Broadband Corp., Unsecured Notes
8.38%	03/15/13		1,235		1,406,745
Lenfest Communications, Inc., Senior Notes
7.62%	02/15/08		1,815		1,857,359
SBC Communications, Inc., Senior Unsecured Notes
5.88%	02/01/12		130		132,448
SBC Communications, Inc., Unsecured Notes
4.21%(f)	06/05/21		1,900		1,889,645
Sprint Capital Corp., Senior Unsecured Notes
7.62%	01/30/11		1,125		1,204,539
Sprint Nextel Corp., Unsecured Notes
6.00%	12/01/16		3,025		2,948,247
Verizon New Jersey, Inc., Senior Debentures
5.88%	01/17/12		5,015		5,080,340
					14,519,323
Transportation — 0.2%
Union Pacific Corp., Unsecured Notes
7.25%	11/01/08		1,750		1,805,848
Yankee — 5.9%
Canadian National Railway Co. (Canada), Senior Unsecured Notes
4.25%(l)	08/01/09		2,075		2,027,989
ConocoPhillips Funding Co. (Australia), Unsecured Notes
5.47%(b)(l)	04/09/09		4,635		4,638,689
Eksportfinans ASA (Norway), Unsecured Notes
4.38%(l)	07/15/09		6,550		6,433,751
5.50%(l)	05/25/16		4,100		4,221,528
EnCana Corp. (Canada), Unsecured Notes
4.60%(l)	08/15/09		175		171,711
EnCana Holdings Finance Corp. (Canada), Senior Unsecured Notes
5.80%(l)	05/01/14		980		985,825
KFW Bankengruppe (Germany), Senior Unsecured Notes
3.25%(l)	09/21/07		3,400		3,350,163

26

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERMEDIATE BOND PORTFOLIO II (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)			VALUE
CORPORATE BONDS (Continued)
Yankee (Continued)
National Westminster Bank (United Kingdom), Subordinated Notes
7.75%(b)(i)(l)		$	1,550		$	1,570,982
Scottish Power PLC (United Kingdom), Unsecured Notes
4.91%(l)	03/15/10		2,300			2,266,892
Swedish Export Credit Corp. (Sweden), Unsecured Notes
3.50%(j)(l)	01/15/08		6,625			6,525,850
Telecom Italia Capital (Luxembourg), Senior Unsecured Notes
5.25%(l)	11/15/13		1,690			1,611,396
Telecom Italia Capital (Luxembourg), Unsecured Notes
5.25%(l)	10/01/15		600			560,465
Telefonica Emisiones Sau (Spain), Senior Unsecured Notes
6.42%(l)	06/20/16		2,200			2,269,560
Telefonica Europe BV (Netherlands), Senior Unsecured Notes
7.75%(l)	09/15/10		510			547,762
Tyco International Group SA (Luxembourg), Senior Unsecured Notes
6.38%(l)	10/15/11		2,660			2,783,666
United Mexican States (Mexico), Senior Unsecured Notes
5.62%(l)	01/15/17		730			730,730
United Mexican States (Mexico), Unsecured Bonds
11.50%(l)	05/15/26		215			347,763
United Mexican States (Mexico), Unsecured Notes
7.50%(l)	04/08/33		70			82,600
Vodafone Group PLC (United Kingdom), Senior Unsecured Notes
3.95%(l)	01/30/08		2,595			2,556,215
7.75%(l)	02/15/10		1,845			1,966,185
Vodafone Group PLC (United Kingdom), Unsecured Notes
5.42%(b)(l)	06/29/07		3,700			3,700,167
5.45%(b)(l)	12/28/07		3,455			3,456,665
5.00%(l)	09/15/15		110			104,711
						52,911,265
TOTAL CORPORATE BONDS
(Cost $291,511,905)						289,498,995
TAXABLE MUNICIPAL BONDS — 1.3%
New York Sales Tax Asset Receivable Corp. Revenue Bonds, Series 04, Class B
3.83%	10/15/09		1,280			1,237,952
Oregon School Board Taxable Pension Deferred Interest Bonds, Series 03, Class A
3.34%(m)	06/30/07		2,700			2,628,045
Port Authority of New York & New Jersey Revenue Notes, Series 04, Class XX
3.30%	09/15/07		4,200			4,140,150
Texas Public Finance Authority Taxable Revenue Bonds, Series 03
3.12%	06/15/07		2,020			2,000,184
Wisconsin General Revenue Bonds, Series 03, Class A
4.80%	05/01/13		1,910			1,872,086
TOTAL TAXABLE MUNICIPAL BONDS
(Cost $12,060,250)						11,878,417
		PAR/SHARES (000)
SHORT TERM INVESTMENTS — 1.1%
U.S. Treasury Bills
4.96%(n)	02/15/07		1,000			993,806
Galileo Money Market Fund			8,495			8,494,824
TOTAL SHORT TERM INVESTMENTS
(Cost $9,488,630)						9,488,630
		NUMBER OF CONTRACTS
CALL SWAPTIONS PURCHASED — 0.1%
Barclays Capital, Strike Rate 5.520%, Expires 09/19/16
(Cost $767,466)			1,260	(o)		750,033
PUT SWAPTIONS PURCHASED — 0.1%
Barclays Capital, Strike Rate 5.400%, Expires 03/12/07			11,020	(o)		72,310
Barclays Capital, Strike Rate 5.520%, Expires 09/21/15			1,260	(o)		690,410
Barclays Capital, Strike Rate 5.900%, Expires 03/12/07			11,020	(o)		2,162
Citibank, Strike Rate -0.020%, Expires 06/01/07			17,980	(o)		185,819
TOTAL PUT SWAPTIONS PURCHASED
(Cost $1,048,041)						950,701
TOTAL MARKET VALUE OF SECURITIES BEFORE AFFILIATED INVESTMENTS — 103.4%
(Cost $937,464,645)						931,890,788
		NUMBER OF SHARES
AFFILIATED INVESTMENTS — SHORT TERM — 0.9%
Institutional Money Market Trust(p)
(Cost $7,920,700)			7,920,700			7,920,700
TOTAL INVESTMENTS IN SECURITIES — 104.3%
(Cost $945,385,345(a))						939,811,488

27

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERMEDIATE BOND PORTFOLIO II (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	NUMBER OF CONTRACTS		VALUE
CALL SWAPTIONS WRITTEN — (0.2)%
Barclays Capital, Strike Rate 5.140%, Expires 04/21/08	(1,220	)(o)	$	(274,131	)
Chase Securities, Strike Rate 5.485%, Expires 10/26/09	(2,220	)(o)		(941,280	)
Citibank, Strike Rate 5.670%, Expires 01/04/10	(1,250	)(o)		(617,763	)
TOTAL CALL SWAPTIONS WRITTEN
(Premiums received $2,007,585)				(1,833,174	)
PUT OPTIONS WRITTEN — 0.0%
March 10 year U.S. Treasury Notes futures, Strike Price $106, Expires 02/23/07 (Premiums received $(35,513))	94			45,531
PUT SWAPTIONS WRITTEN — (0.1)%
Barclays Capital, Strike Rate 5.140%, Expires 04/21/08	(1,220	)(o)		(329,644	)
Barclays Capital, Strike Rate 5.650%, Expires 03/12/07	(22,040	)(o)		(32,180	)
Chase Securities, Strike Rate 5.485%, Expires 10/26/09	(2,220	)(o)		(644,244	)
Citibank, Strike Rate 5.670%, Expires 01/04/10	(1,250	)(o)		(319,700	)
TOTAL PUT SWAPTIONS WRITTEN
(Premiums received $2,095,745)				(1,325,768	)
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL — (0.9)%				(7,920,700	)
LIABILITIES IN EXCESS OF OTHER ASSETS — (3.1)%				(27,773,546	)
NET ASSETS — 100.0%			$	901,003,831

(a) Cost for federal income tax purposes is $945,424,975. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	2,425,734
Gross unrealized depreciation		(8,039,221	)
	$	(5,613,487	)

(b) Variable rate security. Rates shown are the rates as of December 31, 2006.

(c) Security, or a portion thereof, subject to financing transactions.

(d) Interest rate of underlying collateral.

(e) Rates shown are the effective yields as of December 31, 2006.

(f) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. As of December 31, 2006, the Portfolio held 7.6% of its net assets, with a current market value of $68,073,822, in securities restricted as to resale.

(g) Security valued at fair value as determined in good faith by or under the direction of the Board of Trustees. As of December 31, 2006, these securities had a total market value of $76,176, which represents less than 0.1% of net assets.

(h) Security is illiquid. As of December 31, 2006, the Portfolio held 0.5% of its net assets, with a current market value of $4,241,512, in these securities.

(i) The security is a perpetual bond and has no stated maturity date.

(j) Total or partial security on loan.

(k) Security, or a portion thereof, pledged as collateral with a value of $2,969,631 on 639 short U.S. Treasury Note futures contracts and 1,270 long U.S. Treasury Note futures contracts expiring March 2007. The value of such contracts on December 31, 2006 was $203,620,250, with an unrealized loss of $780,936 (including commissions of $3,755).

(l) Security is a foreign domiciled issuer which is registered with the Securities and Exchange Commission.

(m) The rate shown is the effective yield on the zero coupon bonds at the time of purchase.

(n) The rate shown is the effective yield at the time of purchase.

(o) Each swaption contract is equivalent to $10,000 notional amount.

(p) Security purchased with the cash proceeds from securities loaned.

28

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

TOTAL RETURN PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
U.S. GOVERNMENT & AGENCY OBLIGATIONS — 13.0%
Federal National Mortgage Assoc., Unsecured Notes
4.00%	01/26/09	$	3,445	$	3,376,517
Resolution Funding Corp., Strip Bonds
6.29%(b)	07/15/18		100		56,497
6.30%(b)	10/15/18		100		55,760
Small Business Administration Participation Certificates, Series 02-P10B, Class 1
5.20%	08/10/12		350		350,869
Small Business Administration Participation Certificates, Series 04-P10A, Class 1
4.50%	02/01/14		1,284		1,244,616
U.S. Treasury Bonds
8.75%(c)	08/15/20		5,400		7,465,500
4.50%(c)(d)	02/15/36		4,960		4,716,652
U.S. Treasury Inflation Protected Bonds
2.00%	01/15/26		3,940		3,767,292
U.S. Treasury Inflation Protected Notes
2.00%	01/15/14		1,650		1,750,424
2.50%	07/15/16		820		825,553
U.S. Treasury Notes
4.62%(c)	09/08-11/16		24,830		24,721,742
4.88%(c)	08/15/16		8,000		8,095,624
U.S. Treasury Strip
4.77%(b)(d)	11/15/27		6,285		2,274,234
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost $59,356,899)					58,701,280
MORTGAGE PASS-THROUGHS — 35.3%
Federal Home Loan Mortgage Corp. ARM
4.86%(e)	09/01/35		1,880		1,865,723
6.15%(e)	08/01/36		2,766		2,803,991
5.96%(e)	12/01/36		2,125		2,126,466
5.98%(e)	01/01/37		3,300		3,309,207
Federal Home Loan Mortgage Corp. Gold
4.00%	05/10-05/19		654		631,896
6.00%	05/13-08/17		488		494,921
5.50%	08/17-10/17		277		277,708
4.50%	05/18-08/20		5,737		5,542,875
5.00%	12/18-05/36		4,183		4,110,328
6.50%	04/31-12/34		1,006		1,026,898
Federal Home Loan Mortgage Corp. Gold 15 Year TBA
5.00%	01/01/22		2,600		2,553,689
Federal Home Loan Mortgage Corp. Gold 30 Year TBA
6.00%	01/01/37		8,000		8,057,504
Federal National Mortgage Assoc.
6.28%	08/01/11		1,800		1,868,361
5.50%	07/14-06/36		28,536		28,324,650
6.50%	03/16-09/36		10,033		10,223,519
5.00%	09/17-04/36		18,190		17,782,785
4.00%	05/19-05/20		2,887		2,721,051
4.50%	03/20-07/21		2,957		2,853,699
6.00%	08/21-08/35		13,754		13,923,646
7.00%	03/31-07/34		315		323,643
Federal National Mortgage Assoc. 15 Year TBA
5.50%	01/01/22		18,900		18,894,103
6.00%	01/01/22		4,000		4,055,000
Federal National Mortgage Assoc. 30 Year TBA
4.50%	01/01/37		4,300		4,028,563
5.50%	01/01/37		4,000		3,952,500
6.00%	01/01/37		11,000		11,068,750
Federal National Mortgage Assoc. ARM
4.57%(e)	01/01/35		2,129		2,110,439
Government National Mortgage Assoc. I
6.00%	11/28-06/32		865		878,313
6.50%	04/15/31		162		166,893
7.00%	06/31-09/31		202		208,552
5.50%	11/33-02/35		850		847,103
Government National Mortgage Assoc. II ARM
3.75%(e)	05/20/34		1,891		1,858,357
TOTAL MORTGAGE PASS-THROUGHS
(Cost $159,267,768)					158,891,133
COLLATERALIZED MORTGAGE OBLIGATIONS — 10.8%
Bank of America Alternative Loan Trust, Series 04-7, Class 4A1
5.00%	08/25/19		1,192		1,164,825
Countrywide Alternative Loan Trust, Series 04-18CB, Class 2A5
5.77%(e)	09/25/34		868		871,199
Countrywide Home Loans, Series 04-29, Class 1A1
5.62%(e)	02/25/35		415		415,569
Federal Home Loan Mortgage Corp., Series 04-2877, Class PA
5.50%	07/15/33		1,375		1,376,976
Federal Home Loan Mortgage Corp., Series 232 (IO)
5.00%(b)	08/01/35		2,975		711,472
Federal Home Loan Mortgage Corp., Series 2825, Class VP
5.50%	06/15/15		1,224		1,229,816
Federal Home Loan Mortgage Corp., Series 2922, Class GA
5.50%	05/15/34		2,489		2,491,370
Federal Home Loan Mortgage Corp., Series 2927, Class BA
5.50%	10/15/33		1,970		1,976,004
Federal Home Loan Mortgage Corp., Series 3242, Class QA
5.50%	03/15/30		3,260		3,270,562
Federal National Mortgage Assoc., Series 99-7, Class AB
6.00%	03/25/29		761		768,011
Federal National Mortgage Assoc., Series 02-73, Class AN
5.00%	11/25/17		1,800		1,764,452
Federal National Mortgage Assoc., Series 03-35, Class TE
5.00%	05/25/18		1,680		1,645,187

29

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

TOTAL RETURN PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
COLLATERALIZED MORTGAGE OBLIGATIONS (Continued)
Federal National Mortgage Assoc., Series 04-29, Class HC
7.50%	07/25/30	$	1,332	$	1,402,498
Federal National Mortgage Assoc., Series 04-60, Class LB
5.00%	04/25/34		2,107		2,068,225
Federal National Mortgage Assoc., Series 04-99, Class AO
5.50%	01/25/34		1,441		1,436,668
Federal National Mortgage Assoc., Series 05-15, Class PL
5.50%	03/25/35		1,771		1,775,441
Federal National Mortgage Assoc., Series 05-57, Class PA
5.50%	05/25/27		1,288		1,289,104
Federal National Mortgage Assoc., Series 05-70, Class NA
5.50%	08/25/35		1,075		1,075,728
Federal National Mortgage Assoc., Series 05-80, Class PB
5.50%	04/25/30		1,474		1,477,244
Federal National Mortgage Assoc., Series 363, Class 2 (IO)
5.50%(b)	11/01/35		2,973		701,098
Federal National Mortgage Assoc., Series 367, Class 2 (IO)
5.50%(b)	01/25/36		3,341		787,294
Federal National Mortgage Assoc., Series 379, Class 5 (IO)
5.00%(b)	05/25/36		4,765		1,092,892
Harborview Mortgage Loan Trust, Series 05-10, Class 2A1A
5.66%(e)	11/19/35		1,576		1,580,463
IndyMac Index Mortgage Loan Trust, Series 06-AR41, Class A3
5.53%(e)	01/25/37		2,700		2,700,000
J.P. Morgan Mortgage Trust, Series 06-A2, Class 4A1
3.88%(e)	08/25/34		3,324		3,255,155
Lehman Brothers-UBS Commercial Mortgage Trust, Series 00-C3, Class A2
7.95%	05/15/25		2,525		2,699,491
Lehman Brothers-UBS Commercial Mortgage Trust, Series 00-C4, Class A2
7.37%	08/15/26		1,245		1,318,453
Lehman Brothers-UBS Commercial Mortgage Trust, Series 02-C7, Class A2
3.90%	12/15/26		510		503,184
Luminent Mortgage Trust, Series 06-7, Class 1A1
5.53%(e)	05/25/36		3,700		3,699,974
Opteum Mortgage Acceptance Corp., Series 06-2, Class A1A
5.41%(e)	07/25/36		2,122		2,121,286
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $49,087,606)					48,669,641
COMMERCIAL MORTGAGE BACKED SECURITIES — 15.1%
Banc of America Commercial Mortgage, Inc., Series 01-1, Class A2
6.50%	04/15/36		1,932		2,005,007
Bear Stearns Commercial Mortgage Securities, Inc., Series 00-WF2, Class A2
7.32%	10/15/32		1,400		1,486,829
Bear Stearns Commercial Mortgage Securities, Inc., Series 06-PW14, Class A4
5.20%	12/01/38		2,725		2,687,782
Chase Commercial Mortgage Securities Corp., Series 99-2, Class A2
7.20%	01/15/32		285		297,400
Chase Commercial Mortgage Securities Corp., Series 00-1, Class A2
7.76%	04/15/32		445		470,678
Commercial Mortgage Acceptance Corp., Series 98-C2, Class A2
6.03%	03/15/08		1,144		1,148,579
Countrywide Alternative Loan Trust, Series 06-OC11, Class 2A1
5.45%(e)	12/29/36		3,450		3,450,000
Credit Suisse First Boston Mortgage Securities Corp., Series 98-C2, Class A2
6.30%	11/11/30		3,744		3,794,711
Credit Suisse First Boston Mortgage Securities Corp., Series 01-CK6, Class A3
6.39%	10/15/11		325		339,177
Credit Suisse First Boston Mortgage Securities Corp., Series 02-CKS4, Class A2
5.18%	08/15/12		2,415		2,403,091
Credit Suisse First Boston Mortgage Securities Corp., Series 03-C3, Class A5
3.94%	05/15/38		2,320		2,154,541
Donaldson, Lufkin & Jenrette, Inc., Commerical Mortgage Corp., Series 00-CKP1, Class A1B
7.18%	11/10/33		2,097		2,211,631
Federal National Mortgage Assoc., Series 06-M2, Class A2A
5.27%	10/20/32		4,600		4,548,250
First Union National Bank Commercial Mortgage Trust, Series 01-C2, Class A2
6.66%	01/12/43		2,160		2,266,182
General Electric Capital Commercial Mortgage Corp., Series 01-3, Class A2
6.07%	06/10/38		1,670		1,729,019
General Electric Capital Commercial Mortgage Corp., Series 02-1A, Class A3
6.27%	12/10/35		1,730		1,807,473
General Electric Capital Commercial Mortgage Corp., Series 05-C4, Class A4
5.33%(e)	11/10/45		2,900		2,912,818
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 99-C2, Class A2
6.94%	09/15/33		1,384		1,426,278

30

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

TOTAL RETURN PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
COMMERCIAL MORTGAGE BACKED SECURITIES (Continued)
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 99-C3, Class A2
7.18%	08/15/36	$	1,218	$	1,261,676
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 00-C1, Class A2
7.72%	03/15/33		1,490		1,577,237
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 00-C2, Class A2
7.46%	08/16/33		1,305		1,381,145
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 03-C2, Class A2
5.28%(e)	05/10/40		2,465		2,497,643
Goldman Sachs Mortgage Securities Corp. II, Series 99-C1, Class A2
6.11%(e)	11/18/30		1,494		1,507,089
Goldman Sachs Mortgage Securities Corp. II, Series 03-C1, Class X2 (IO)
0.95%(b)(f)	01/10/40		20,950		362,322
Goldman Sachs Mortgage Securities Corp. II, Series 04-GG2, Class A4
4.96%	08/10/38		1,625		1,607,776
Greenwich Capital Commercial Funding Corp., Series 05-GG3, Class A3
4.57%	08/10/42		2,445		2,373,946
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 01, Class A3
6.43%	06/15/11		820		856,466
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 01-CIB3, Class A3
6.46%	11/15/35		2,120		2,224,561
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 01-CIBC, Class A3
6.26%	03/15/33		1,146		1,181,548
Lehman Brothers Commercial Conduit Mortgage Trust, Series 98-C4, Class A1B
6.21%	10/15/35		875		884,320
Morgan Stanley Capital I, Series 06-IQ12, Class A4
5.33%(e)	12/15/43		2,470		2,459,338
Morgan Stanley Capital Investments, Series 98-HF2, Class A2
6.48%	11/15/30		282		285,212
Morgan Stanley Capital Investments, Series 99-FNV1, Class A2
6.53%	03/15/31		489		497,000
Prudential Mortgage Capital Funding, LLC, Series 01-C1, Class A2
6.60%	05/10/34		2,190		2,297,211
Salomon Brothers Mortgage Securities VII, Series 99-C1, Class A2
7.08%(e)	01/18/09		1,536		1,573,662
Salomon Brothers Mortgage Securities VII, Series 00-C3, Class A2
6.59%	10/18/10		1,650		1,714,262
Salomon Brothers Mortgage Securities VII, Series 01-C2, Class A3
6.50%	10/13/11		1,960		2,055,169
Structured Asset Receivables Trust, Series 03-2
5.72%(e)(f)(g)	01/21/09		1,040		1,039,748
Washington Mutual Asset Securities Corp., Series 05-C1A, Class X (IO)
2.17%(b)(f)	05/25/36		23,127		1,222,735
TOTAL COMMERCIAL MORTGAGE BACKED SECURITIES
(Cost $68,904,423)					67,999,512
CERTIFICATE OF DEPOSIT — 1.1%
Barclays Bank PLC (United Kingdom)
5.37%(e)	03/13/09		4,665		4,666,633
SunTrust Bank, Inc.
4.42%	06/15/09		430		423,971
TOTAL CERTIFICATE OF DEPOSIT
(Cost $5,095,000)					5,090,604
ASSET BACKED SECURITIES — 23.7%
American Express Credit Account Master Trust, Series 05-3, Class A
5.35%(e)	01/18/11		2,675		2,670,708
American Express Credit Account Master Trust, Series 06-01, Class A
5.38%(e)	12/15/13		2,850		2,852,676
Asset Securitization Corp., Series 97-D5, Class A1C
6.75%	02/14/41		891		898,807
Bank One Issuance Trust, Series 02-A5, Class A5
5.47%(e)	06/15/10		3,450		3,453,930
Bank One Issuance Trust, Series 02-A6, Class A
5.54%(e)	06/15/12		3,650		3,671,478
Bank One Issuance Trust, Series 03, Class A3
5.46%(e)	12/15/10		2,375		2,379,040
Bear Stearns Securities, Inc., Series 06-EC1, Class A1
5.43%(e)	08/25/29		821		820,638
Capital Auto Receivables Asset Trust, Series 05-1, Class A4
4.05%	07/15/09		2,650		2,631,491
Capital Auto Receivables Asset Trust, Series 06-SN1A, Class A2A
5.40%(f)	01/20/09		4,650		4,651,209
Carrington Mortgage Loan Trust, Series 06-FRE1, Class A1
5.42%(e)	07/25/36		2,046		2,045,731
Carrington Mortgage Loan Trust, Series 06-NC5, Class A1
5.40%(e)	01/25/37		3,475		3,475,000
Chase Credit Card Master Trust, Series 02-7, Class A
5.47%(e)	02/15/10		2,750		2,753,133
Chase Credit Card Master Trust, Series 04-2, Class A
5.39%(e)	09/15/09		3,125		3,125,660

31

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

TOTAL RETURN PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
ASSET BACKED SECURITIES (Continued)
Chase Issuance Trust, Series 04-A9, Class A9
3.22%	06/15/10	$	2,275	$	2,239,706
Chase Issuance Trust, Series 05, Class A5
5.37%(e)	02/15/12		3,600		3,603,694
Chase Issuance Trust, Series 06, Class A3
5.34%(e)	07/15/11		2,375		2,376,823
Citibank Credit Card Issuance Trust, Series 03, Class A6
2.90%	05/17/10		1,805		1,749,831
Citibank Credit Card Issuance Trust, Series 03-A3, Class A3
3.10%	03/10/10		1,125		1,097,043
Citibank Credit Card Issuance Trust, Series 03-A9, Class A9
5.46%(e)	11/22/10		3,525		3,531,360
Citibank Credit Card Issuance Trust, Series 04, Class A1
2.55%	01/20/09		3,270		3,265,411
Citibank Credit Card Issuance Trust, Series 06-A2, Class A2
4.85%	02/10/11		2,550		2,536,639
Countrywide Alternative Loan Trust, Series 06-OC10, Class 2A1
5.41%(e)	11/25/36		2,251		2,251,447
Countrywide Certificates, Series 04-13, Class AV4
5.64%(e)	06/25/35		531		531,452
Countrywide Certificates, Series 05-BC5, Class 3A1
5.45%(e)	10/25/27		416		416,180
Countrywide Certificates, Series 05-IM2, Class A1
5.43%(e)	06/25/27		33		33,141
Countrywide Certificates, Series 06-25, Class 2A1
5.42%(e)	01/25/37		3,800		3,799,619
Countrywide Certificates, Series 06-8, Class 2A1
5.38%(e)	07/25/36		2,313		2,313,620
Discover Card Master Trust I, Series 05-1, Class A
5.36%(e)	09/16/10		2,350		2,351,332
Long Beach Mortgage Loan Trust, Series 06-11, Class 2A1
5.41%(e)(h)	01/25/37		2,750		2,750,000
Maryland Trust, Series 06-I, Class A
5.55%(f)	12/10/49		2,500		2,477,563
MBNA Credit Card Master Notes Trust, Series 98-E, Class A
5.52%(e)	09/15/10		2,725		2,732,008
MBNA Credit Card Master Notes Trust, Series 03, Class A7
2.65%	11/15/10		3,250		3,135,799
MBNA Credit Card Master Notes Trust, Series 03-A6, Class A6
2.75%	10/15/10		1,500		1,451,836
MBNA Credit Card Master Notes Trust, Series 04-A4, Class A4
2.70%	09/15/09		2,620		2,601,136
MBNA Credit Card Master Notes Trust, Series 06-A4, Class A4
5.34%(e)	09/15/11		3,650		3,652,712
Morgan Stanley Capital Investments, Series 06-HE2, Class A2A
5.42%(e)	03/25/36		2,253		2,252,678
New Century Home Equity Loan Trust, Series 05-3, Class A2B
5.53%(e)	07/25/35		2,512		2,512,426
Novastar Home Equity Loan, Series 06-2, Class A2A
5.40%(e)	06/25/36		1,889		1,889,165
Residential Asset Mortgage Products, Inc., Series 06-EFC2, Class A1
5.41%(e)	12/25/36		3,075		3,075,345
Residential Asset Mortgage Products, Inc., Series 06-RS4, Class A1
5.43%(e)	07/25/36		2,679		2,679,581
Structured Asset Investment Loan Trust, Series 06-1, Class A1
5.43%(e)	01/25/36		1,302		1,302,382
Structured Asset Securities Corp., Series 03-AL2, Class A
3.36%(f)	01/25/31		665		609,431
Structured Asset Securities Corp., Series 06-BC6, Class A2
5.43%(e)	01/25/37		3,325		3,325,000
Student Loan Marketing Assoc. Student Loan Trust, Series 05-6, Class A5B
5.39%(e)	07/27/26		2,800		2,802,214
TOTAL ASSET BACKED SECURITIES
(Cost $107,099,343)					106,776,075
CORPORATE BONDS — 16.0%
Aerospace — 0.3%
United Technologies Corp., Unsecured Notes
5.44%(e)	06/01/09		1,150		1,151,227
Banks — 5.3%
Bank of America Corp. Capital Trust XI, Capital Securities
6.62%	05/23/36		45		48,563
Bank of America Corp., Subordinated Notes
7.80%	02/15/10		75		80,537
Bank of America Corp., Unsecured Notes
5.38%(e)	03/24/09		2,725		2,727,597
Bank of New York Co., Inc., Senior Subordinated Notes
3.80%	02/01/08		400		393,525
Citigroup, Inc., Senior Unsecured Notes
4.25%	07/29/09		1,010		988,393
Citigroup, Inc., Subordinated Notes
6.12%	08/25/36		300		312,389
Citigroup, Inc., Unsecured Notes
3.62%(i)	02/09/09		1,010		980,133
4.12%	02/22/10		2,475		2,400,869
Depfa ACS Bank (Ireland), Senior Notes
3.62%	10/29/08		850		827,832
Deutsche Bank AG, Deposit Notes
5.34%(e)	03/15/07		800		799,976

32

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

TOTAL RETURN PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
CORPORATE BONDS (Continued)
Banks (Continued)
HBOS Treasury Services PLC (United Kingdom), Unsecured Notes
3.50%(f)	11/30/07	$	350	$	344,261
3.75%(f)	09/30/08		505		491,773
HSBC Bank USA, Subordinated Notes
3.87%	06/07/07		1,875		1,863,004
4.62%	04/01/14		415		395,570
J.P. Morgan Chase & Co., Senior Notes
2.62%	06/30/08		220		211,559
J.P. Morgan Chase & Co., Subordinated Notes
5.75%	10/15/08		375		376,947
7.12%	06/15/09		100		104,303
Rabobank Nederland (Netherlands), Senior Notes
5.37%(e)(f)	04/06/09		5,200		5,201,300
SunTrust Bank, Inc., Senior Unsecured Notes
3.62%	10/15/07		665		656,032
4.00%	10/15/08		325		317,604
U.S. Bancorp, Senior Unsecured Notes
3.95%	08/23/07		115		113,993
U.S. Bank N.A., Senior Bank Notes
2.40%	03/12/07		715		710,582
UBS Preferred Funding Trust, Inc., Capital Securities
8.62%(e)(j)			40		44,186
Wachovia Bank N.A., Senior Bank Notes
4.38%	08/15/08		45		44,359
5.41%(e)	03/23/09		1,575		1,575,194
Wachovia Corp., Subordinated Notes
6.30%	04/15/28		440		444,922
Wells Fargo & Co., Senior Unsecured Notes
4.20%	01/15/10		600		584,518
Wells Fargo & Co., Unsecured Notes
4.62%	08/09/10		255		250,243
4.88%	01/12/11		740		732,652
					24,022,816
Broadcasting — 0.1%
BSKYB Finance PLC (United Kingdom), Senior Unsecured Notes
6.50%(f)	10/15/35		50		49,448
Charter Communications Holdings II LLC, Unsecured Notes
10.25%	09/15/10		30		31,388
Echostar DBS Corp., Senior Notes
6.38%	10/01/11		5		4,969
7.00%	10/01/13		30		29,962
Echostar DBS Corp., Senior Unsecured Notes
7.12%	02/01/16		30		30,000
News America Holdings, Inc., Senior Debentures
7.12%	04/08/28		125		131,891
7.62%	11/30/28		140		156,990
					434,648
Chemicals — 0.1%
Lyondell Chemical Co., Senior Unsecured Notes
8.00%	09/15/14		105		108,938
8.25%	09/15/16		180		189,000
					297,938
Computer Software & Services — 0.0%
Sungard Data Systems, Inc., Senior Unsecured Notes
9.97%(e)	08/15/13		25		25,969
Construction — 0.0%
International Steel Group, Inc., Senior Unsecured Notes
6.50%	04/15/14		20		20,550
Electronics — 0.0%
L-3 Communications Corp., Senior Subordinated Notes
6.38%	10/15/15		50		49,500
Energy & Utilities — 0.3%
AES Ironwood LLC, Senior Secured Notes
8.86%	11/30/25		91		102,327
AES Red Oak LLC, Senior Secured Notes
9.20%	11/30/29		50		56,375
Centerpoint Energy, Inc., Senior Unsecured Notes
7.25%	09/01/10		480		505,740
Florida Power & Light Co., First Mortgage Bonds
5.62%	04/01/34		150		147,522
Midwest Generation LLC, Pass-Through Certificates
8.56%	01/02/16		96		105,842
Midwest Generation LLC, Senior Secured Notes
8.75%	05/01/34		45		48,825
NRG Energy, Inc., Senior Unsecured Notes
7.38%	02/01/16		90		90,450
Orion Power Holdings, Inc., Senior Unsecured Notes
12.00%	05/01/10		115		130,525
Reliant Energy, Inc., Senior Secured Notes
6.75%	12/15/14		90		87,975
TXU Corp., Senior Unsecured Notes
4.80%	11/15/09		300		292,782
					1,568,363
Entertainment & Leisure — 0.6%
Comcast Cable Holdings LLC, Senior Debentures
7.88%	08/01/13		150		166,793
8.75%	08/01/15		360		425,803
Comcast Corp., Senior Unsecured Bonds
6.50%	11/15/35		125		125,883
Comcast Corp., Senior Unsecured Notes
7.05%	03/15/33		155		165,741

33

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

TOTAL RETURN PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
CORPORATE BONDS (Continued)
Entertainment & Leisure (Continued)
Comcast Corp., Unsecured Notes
5.90%	03/15/16	$	425	$	426,212
Harrahs Operating Co., Inc., Senior Notes
5.75%	10/01/17		100		83,781
MGM Mirage, Inc., Senior Notes
6.00%	10/01/09		105		104,737
Time Warner Cos., Inc., Senior Debentures
8.38%	03/15/23		150		175,974
7.57%	02/01/24		720		791,231
Time Warner Cos., Inc., Senior Unsecured Notes
6.75%	04/15/11		200		209,362
					2,675,517
Finance — 3.7%
Associates Corp. N.A., Senior Notes
6.25%	11/01/08		275		279,216
BAE Systems Holdings, Inc., Unsecured Notes
5.20%(f)	08/15/15		340		323,864
Berkshire Hathaway Finance Corp., Senior Unsecured Notes
3.40%	07/02/07		410		406,421
3.38%	10/15/08		500		484,586
4.12%	01/15/10		105		102,048
Compton Petroleum Finance Corp. (Canada), Senior Notes
7.62%	12/01/13		40		38,600
Ford Motor Credit Co., Senior Notes
5.80%	01/12/09		545		535,104
General Electric Capital Corp., Senior Unsecured Notes
6.50%	12/10/07		200		202,194
General Electric Capital Corp., Unsecured Notes
3.45%	07/16/07		240		237,692
5.42%(e)	01/15/08		3,810		3,813,627
4.12%	09/01/09		470		458,248
5.00%	11/15/11		3,780		3,752,289
HSBC Finance Corp., Senior Unsecured Notes
4.75%	05/15/09		340		336,322
Momentive Performance Materials, Inc., Senior Unsecured Notes
10.12%(f)	12/01/14		185		185,925
Morgan Stanley, Senior Notes
5.40%(e)	03/07/08		3,000		3,002,187
5.62%	01/09/12		360		365,933
Morgan Stanley, Senior Unsecured Notes
6.75%	04/15/11		250		264,243
Morgan Stanley, Unsecured Notes
5.05%	01/21/11		705		700,419
Nationwide Building Society (United Kingdom), Senior Unsecured Notes
3.50%(f)	07/31/07		850		840,838
Nationwide Building Society (United Kingdom), Unsecured Notes
4.25%(f)	02/01/10		70		67,817
TDS Investor Corp., Senior Unsecured Notes
9.88%(f)	09/01/14		80		80,400
USAA Capital Corp., Senior Unsecured Notes
4.00%(f)	12/10/07		370		364,994
					16,842,967
Insurance — 0.5%
American General Corp., Senior Unsecured Notes
7.50%	08/11/10		150		160,949
Metlife, Inc., Junior Subordinated Debentures
6.40%	12/15/36		910		917,617
TIAA Global Markets, Senior Unsecured Notes
3.88%(f)	01/22/08		465		457,275
WellPoint, Inc., Unsecured Notes
5.95%	12/15/34		410		403,401
5.85%	01/15/36		195		189,432
					2,128,674
Leasing — 0.0%
United Rentals N.A., Inc., Senior Unsecured Notes
6.50%	02/15/12		40		39,500
Manufacturing — 0.1%
Belvoir Land LLC, Unsecured Notes
5.27%(f)	12/15/47		325		303,261
Briggs & Stratton Corp., Senior Unsecured Notes
8.88%	03/15/11		50		54,125
					357,386
Medical & Medical Services — 0.1%
Bio-Rad Laboratories, Inc., Senior Subordinated Notes
7.50%	08/15/13		40		41,200
6.12%	12/15/14		100		96,750
Triad Hospitals, Inc., Senior Subordinated Notes
7.00%	11/15/13		330		332,063
					470,013
Motor Vehicles — 0.0%
DaimlerChrysler N.A. Holding Corp., Unsecured Notes
4.05%	06/04/08		65		63,611
Oil & Gas — 0.5%
ANR Pipeline Co., Senior Debentures
9.62%	11/01/21		5		6,635
7.38%	02/15/24		5		5,605
Chesapeake Energy Corp., Senior Unsecured Notes
6.38%	06/15/15		55		54,450
6.25%	01/15/18		20		19,250
6.88%	11/15/20		45		44,212
Colorado Interstate Gas Co., Senior Unsecured Notes
6.80%	11/15/15		45		46,790
Consolidated Natural Gas, Inc., Senior Debentures
5.00%	03/01/14		235		226,656

34

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

TOTAL RETURN PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
CORPORATE BONDS (Continued)
Oil & Gas (Continued)
Consolidated Natural Gas, Inc., Senior Unsecured Notes
6.25%	11/01/11	$	150	$	154,925
El Paso Natural Gas Co., Debentures
8.62%	01/15/22		130		157,441
El Paso Natural Gas Co., Senior Unsecured Notes
8.38%	06/15/32		5		6,055
Enterprise Products Operating LP, Senior Unsecured Notes
4.00%	10/15/07		225		222,248
4.95%	06/01/10		450		442,401
KCS Energy, Inc., Senior Unsecured Notes
7.12%	04/01/12		35		34,038
Northwest Pipeline Corp., Senior Unsecured Notes
8.12%	03/01/10		100		104,125
Phillips Petroleum Co., Senior Debentures
7.00%	03/30/29		80		90,061
Sabine Pass LNG LP, Notes
7.50%(f)	11/30/16		315		313,819
Targa Resources, Inc., Senior Unsecured Notes
8.50%(f)	11/01/13		10		10,075
Transcontinental Gas Pipeline Corp., Senior Notes
8.88%	07/15/12		180		203,400
The Williams Cos., Inc., Senior Unsecured Notes
7.62%	07/15/19		70		74,900
7.75%	06/15/31		25		26,250
					2,243,336
Pharmaceuticals — 0.2%
Bristol-Myers Squibb Co., Senior Debentures
6.88%	08/01/47		75		79,921
Bristol-Myers Squibb Co., Unsecured Notes
5.88%	11/15/36		550		544,032
					623,953
Real Estate — 0.4%
American Real Estate Partners LP, Senior Unsecured Notes
8.12%	06/01/12		75		77,437
7.12%	02/15/13		40		40,200
Avalonbay Communities, Inc., Senior Unsecured Notes
6.62%	09/15/11		180		189,104
Camden Property Trust, Unsecured Notes
4.70%	07/15/09		380		374,909
The Rouse Co., Senior Unsecured Notes
6.75%(f)	05/01/13		325		326,382
The Rouse Co., Unsecured Notes
5.38%	11/26/13		825		766,759
					1,774,791
Retail Merchandising — 0.1%
Federated Department Stores, Senior Debentures
6.79%	07/15/27		240		239,992
May Department Stores Co., Debentures
6.65%	07/15/24		150		148,619
					388,611
Semiconductors & Related Devices — 0.1%
Freescale Semiconductor, Inc., Senior Unsecured Notes
9.12%(f)	12/15/14		330		327,937
9.24%(e)(f)	12/15/14		135		133,819
					461,756
Telecommunications — 1.0%
AT&T Broadband Corp., Unsecured Notes
8.38%	03/15/13		670		763,174
Cincinnati Bell, Inc., Senior Unsecured Notes
7.25%	07/15/13		200		207,000
GTE Corp., Debentures
6.94%	04/15/28		75		78,632
Idearc, Inc., Senior Unsecured Notes
8.00%(f)	11/15/16		195		198,656
Intelsat Ltd. (Bermuda), Senior Unsecured Notes
9.25%(f)	06/15/16		120		129,000
New Jersey Bell Telephone, Debentures
7.85%	11/15/29		35		39,162
PanAmSat Corp., Senior Unsecured Notes
9.00%(f)	06/15/16		110		116,463
Qwest Corp., Senior Unsecured Notes
7.88%	09/01/11		130		138,450
Qwest Corp., Unsecured Notes
8.61%(e)	06/15/13		135		146,138
SBC Communications, Inc., Unsecured Notes
4.21%(f)	06/05/21		1,750		1,740,462
Sprint Capital Corp., Senior Unsecured Notes
8.75%	03/15/32		195		234,704
Verizon Maryland, Inc., Debentures
5.12%	06/15/33		95		77,934
Verizon Virginia, Inc., Debentures
4.62%	03/15/13		60		56,346
Wind Acquistion Finance SA (Luxembourg), Senior Unsecured Notes
10.75%(f)	12/01/15		150		170,625
Windstream Corp., Senior Unsecured Notes
8.12%(f)	08/01/13		240		259,800
8.62%(f)	08/01/16		155		169,725
					4,526,271

35

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

TOTAL RETURN PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS )	MATURITY	PAR (000)			VALUE
CORPORATE BONDS (Continued)
Transportation — 0.0%
Overseas Shipholding Group, Inc., Senior Unsecured Notes
7.50%	02/15/24	$	115		$	116,869
Yankee — 2.6%
AID-Israel (Israel), Unsecured Notes
5.50%(k)	09/23-04/24		1,475			1,533,376
Bowater Finance Corp. (Canada), Senior Unsecured Notes
7.95%(k)	11/15/11		125			122,500
ConocoPhillips Funding Co. (Australia), Unsecured Notes
5.47%(e)(k)	04/09/09		1,300			1,301,035
Deutsche Telekom International Finance BV (Netherlands), Senior Unsecured Notes
8.25%(k)	06/15/30		30			36,880
Domtar, Inc. (Canada), Senior Unsecured Notes
7.12%(k)	08/15/15		190			186,200
Eksportfinans ASA (Norway), Unsecured Notes
3.38%(k)	01/15/08		1,555			1,525,026
Ispat Inland ULC (Canada), Senior Secured Notes
9.75%(k)	04/01/14		415			463,763
Rogers Wireless, Inc. (Canada), Senior Secured Notes
7.50%(k)	03/15/15		190			206,150
Seagate Technology HDD Holdings (Cayman Islands), Senior Unsecured Notes
6.80%(k)	10/01/16		55			55,275
Swedish Export Credit Corp. (Sweden), Unsecured Notes
2.88%(k)	01/26/07		375			374,471
Telecom Italia Capital (Luxembourg), Senior Unsecured Notes
6.00%(k)	09/30/34		260			235,811
7.20%(k)	07/18/36		325			339,533
Telecom Italia Capital (Luxembourg), Unsecured Notes
5.25%(k)	10/01/15		275			256,880
Telefonica Emisiones Sau (Spain), Senior Unsecured Notes
7.04%(k)	06/20/36		550			584,192
Telefonica Europe BV (Netherlands), Senior Unsecured Notes
7.75%(k)	09/15/10		160			171,847
Tyco International Group SA (Luxembourg), Senior Unsecured Notes
6.38%(k)	10/15/11		275			287,785
United Mexican States (Mexico), Senior Unsecured Notes
8.00%(k)	09/24/22		605			739,310
8.30%(k)	08/15/31		45			57,532
United Mexican States (Mexico), Unsecured Bonds
11.50%(k)	05/15/26		20			32,350
United Mexican States (Mexico), Unsecured Notes
7.50%(k)	04/08/33		50			59,000
Vodafone Group PLC (United Kingdom), Unsecured Notes
5.42%(e)(k)	06/29/07		1,500			1,500,068
5.45%(e)(k)	12/28/07		1,380			1,380,665
5.00%(k)	12/13-09/15		330			318,141
						11,767,790
TOTAL CORPORATE BONDS
(Cost $72,125,969)						72,052,056
FOREIGN BONDS — 0.2%
Province of Manitoba (Canada), Senior Unsecured Notes (NZD)
6.38%	09/01/15		635			434,711
Province of Ontario (Canada), Unsecured Notes (NZD)
6.25%	06/16/15		720			486,956
TOTAL FOREIGN BONDS
(Cost $951,913)						921,667
TAXABLE MUNICIPAL BONDS — 0.1%
Fort Irwin Land California LLC Revenue Bonds, Series 05
5.40%(f)
(Cost $599,732)	12/15/47		600			555,244
		NUMBER OF SHARES
SHORT TERM INVESTMENTS — 0.3%
Galileo Money Market Fund
(Cost $1,324,363)			1,324,363			1,324,363
		NUMBER OF CONTRACTS
CALL SWAPTIONS PURCHASED — 0.1%
Barclays Capital, Strike Rate 5.520%, Expires 09/19/16
(Cost $304,550)			500	(l)		297,632
PUT OPTIONS PURCHASED — 0.0%
March 10 year U.S. Treasury Notes futures, Strike Price $106, Expires 02/23/07
(Cost $14,356)			38			18,406
PUT SWAPTIONS PURCHASED — 0.1%
Barclays Capital, Strike Rate 5.400%, Expires 03/12/07			4,390	(l)		28,806
Barclays Capital, Strike Rate 5.520%, Expires 09/21/15			500	(l)		273,972
Barclays Capital, Strike Rate 5.900%, Expires 03/12/07			4,390	(l)		861
Citibank, Strike Rate -0.020%, Expires 06/01/07			8,070	(l)		83,402
TOTAL PUT SWAPTIONS PURCHASED
(Cost $423,808)						387,041

36

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

TOTAL RETURN PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)					VALUE
TOTAL MARKET VALUE OF SECURITIES BEFORE AFFILIATED INVESTMENTS — 115.8%
(Cost $524,555,730)					$	521,684,654
	MATURITY	PAR (000)
AFFILIATED INVESTMENTS - LONG TERM — 0.2%
Merrill Lynch Mortgage Investors, Inc., Series 05-HE2, Class A2A
5.46%(e)
(Cost $1,152,520)	09/25/36	$	1,153			1,152,732
TOTAL INVESTMENTS IN SECURITIES — 116.0%
(Cost $525,708,250(a))						522,837,386
MORTGAGE PASS-THROUGH TBA SALE COMMITMENTS — (7.1)%
Federal Home Loan Mortgage Corp. Gold 15 Year TBA
4.50%	01/01/22		(2,300	)		(2,215,907	)
Federal National Mortgage Assoc. 15 Year TBA
5.00%	01/01/22		(4,300	)		(4,226,092	)
Federal National Mortgage Assoc. 30 Year TBA
5.00%	01/01/37		(2,000	)		(1,930,624	)
5.50%	01/01/37		(20,900	)		(20,651,813	)
6.50%	01/01/37		(3,000	)		(3,056,250	)
TOTAL MORTGAGE PASS-THROUGH TBA SALE COMMITMENTS
(Premiums received $32,276,445)						(32,080,686	)
		NUMBER OF CONTRACTS
CALL SWAPTIONS WRITTEN — (0.1)%
Barclays Capital, Strike Rate 5.140%, Expires 04/21/08			(500	)(l)		(112,349	)
Chase Securities, Strike Rate 5.485%, Expires 10/26/09			(540	)(l)		(228,960	)
Citibank, Strike Rate 5.670%, Expires 01/04/10			(370	)(l)		(182,858	)
Union Bank, Strike Rate 4.730%, Expires 06/13/07			(1,130	)(l)		(38,081	)
TOTAL CALL SWAPTIONS WRITTEN
(Premiums received $1,050,050)						(562,248	)
PUT SWAPTIONS WRITTEN — (0.2)%
Barclays Capital, Strike Rate 5.140%, Expires 04/21/08			(500	)(l)		(135,100	)
Barclays Capital, Strike Rate 5.650%, Expires 03/12/07			(8,780	)(l)		(12,819	)
Chase Securities, Strike Rate 5.485%, Expires 10/26/09			(540	)(l)		(156,708	)
Citibank, Strike Rate 5.670%, Expires 01/04/10			(370	)(l)		(94,631	)
Union Bank, Strike Rate 4.730%, Expires 06/13/07			(1,130	)(l)		(426,575	)
TOTAL PUT SWAPTIONS WRITTEN
(Premiums received $1,085,170)						(825,833	)
LIABILITIES IN EXCESS OF OTHER ASSETS — (8.6)%
(including $44,956,513 of payable for investments purchased)						(38,761,338	)
NET ASSETS — 100.0%					$	450,607,281

(a) Cost for federal income tax purposes is $525,738,009. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	2,121,311
Gross unrealized depreciation		(5,021,934	)
	$	(2,900,623	)

(b) Rates shown are the effective yields as of December 31, 2006.

(c) Security, or a portion thereof, subject to financing transactions.

(d) Security, or a portion thereof, with a market value of $792,304 have been pledged as collateral for swap and swaption contracts.

(e) Variable rate security. Rates shown are the rates as of December 31, 2006.

(f) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. As of December 31, 2006, the Portfolio held 5.2% of its net assets, with a current market value of $23,526,171, in securities restricted as to resale.

(g) Security is illiquid. As of December 31, 2006, the Portfolio held 0.2% of its net assets, with a current market value of $1,039,748 in these securities.

(h) Security valued at fair value as determined in good faith by or under the direction of the Board of Trustees. As of December 31, 2006, these securities had a total market value of $2,750,000, which represents 0.6% of net assets.

(i) Security, or a portion thereof, pledged as collateral with a value of $679,300 on 882 short U.S. Treasury Note futures contracts, 188 long U.S. Treasury Note futures contracts and 286 long U.S. Treasury Bond futures contracts expiring March 2007 and 163 short Euro-dollar futures contracts expiring December 2007. The value of such contracts on December 31, 2006 was $183,473,250, with an unrealized gain of $148,000 (including commissions of $3,456).

(j) The security is a perpetual bond and has no stated maturity date.

(k) Security is a foreign domiciled issuer which is registered with the Securities and Exchange Commission.

(l) Each swaption contract is equivalent to $10,000 notional amount.

37

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

TOTAL RETURN PORTFOLIO II

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS )		NUMBER OF SHARES		VALUE
PREFERRED STOCKS — 0.0%
Centaur Funding Corp.
2.27%(b)
(Cost $216,893)			205	$	234,825
	MATURITY	PAR (000)
U.S. GOVERNMENT & AGENCY OBLIGATIONS — 8.8%
Federal Home Loan Mortgage Corp., Unsecured Notes
4.62%	05/28/13	$	7,375		7,120,378
Federal National Mortgage Assoc., Unsecured Notes
2.71%	01/30/07		14,300		14,272,658
2.35%	04/05/07		3,985		3,956,559
7.25%	01/15/10		17,390		18,501,117
Overseas Private Investment Co.
4.09%	05/29/12		343		328,469
4.30%	05/29/12		959		909,032
4.64%	05/29/12		718		690,032
4.68%	05/29/12		406		377,864
4.87%	05/29/12		3,069		2,978,330
5.40%	05/29/12		3,806		3,890,848
Resolution Funding Corp., Strip Bonds
6.29%(c)	07/15/18		2,850		1,610,176
6.30%(c)	10/15/18		2,850		1,589,166
Small Business Administration Participation Certificates, Series 92-20H, Class 1
7.40%	08/01/12		33		33,690
Small Business Administration Participation Certificates, Series 96-20J, Class 1
7.20%	10/01/16		812		843,255
Small Business Administration Participation Certificates, Series 97-20B, Class 1
7.10%	02/01/17		970		1,005,937
Small Business Administration Participation Certificates, Series 97-P10C, Class 1
6.85%	08/01/07		470		473,801
Small Business Administration Participation Certificates, Series 97-P10D, Class 1
6.51%	11/10/07		87		87,465
Small Business Investment Cos. Pass-Through, Series 03-10A, Class 1
4.63%	03/10/13		7,795		7,580,762
U.S. Treasury Bonds
4.50%(d)(e)(f)	02/15/36		11,970		11,382,728
U.S. Treasury Inflation Protected Bonds
2.00%	01/15/26		29,100		27,824,414
U.S. Treasury Inflation Protected Notes
2.00%	07/15/14		13,675		14,208,759
2.50%	07/15/16		6,355		6,398,036
U.S. Treasury Notes
4.88%(d)(e)	10/08-08/16		46,515		46,726,474
4.62%(e)	11/08-11/16		77,500		77,001,111
5.12%	05/15/16		160		164,806
U.S. Treasury Strip
4.77%(c)(d)	11/15/27		36,760		13,301,643
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost $265,697,443)					263,257,510
MORTGAGE PASS-THROUGHS — 40.2%
Federal Home Loan Mortgage Corp. ARM
4.98%(g)	10/01/35		14,194		14,147,204
6.02%(g)	07/01/36		11,735		11,807,223
5.97%(g)	10/01/36		15,967		16,142,333
6.08%(g)	12/01/36		22,656		22,756,524
Federal Home Loan Mortgage Corp. Gold
4.00%	07/10-05/19		6,876		6,709,354
5.50%	03/11-04/33		14,199		14,215,057
6.00%	10/11-12/32		12,731		12,914,114
6.50%	06/13-10/34		1,812		1,852,944
8.00%	11/15-10/25		16		16,993
5.00%	01/18-06/36		24,228		23,821,521
4.50%	05/18-08/20		50,682		48,970,321
7.00%	03/25-05/31		228		234,499
7.50%	07/26-03/32		187		194,054
Federal Home Loan Mortgage Corp. Gold 15 Year TBA
5.00%	01/01/22		61,500		60,404,562
Federal Home Loan Mortgage Corp. Gold 30 Year TBA
6.00%	01/01/37		34,100		34,345,111
Federal National Mortgage Assoc.
6.50%	06/08-09/36		86,492		88,139,059
7.00%	11/08-08/32		6,411		6,591,790
5.50%	06/11-12/35		312,346		310,036,546
6.00%	09/11-04/35		50,910		51,485,468
4.00%	06/14-03/20		28,003		26,391,260
4.50%	01/18-10/21		22,471		21,726,610
5.00%	01/18-11/35		46,366		45,399,142
Federal National Mortgage Assoc. 15 Year TBA
5.50%	01/01/22		106,500		106,466,772
6.00%	01/01/22		24,000		24,330,000
Federal National Mortgage Assoc. 30 Year TBA
4.50%	01/01/37		32,800		30,729,500
5.00%	01/01/37		42,000		40,543,104
6.00%	01/01/37		117,000		117,744,042
Federal National Mortgage Assoc. ARM
6.46%(g)	01/01/31		3,843		3,877,262
4.82%(g)	09/01/35		14,825		14,704,605
Government National Mortgage Assoc. I
7.00%	03/13-02/33		2,370		2,447,860
6.00%	11/14-05/32		2,620		2,654,183
9.00%	07/15/18		4		4,521
6.50%	03/24-04/32		1,010		1,039,107
7.50%	11/15/29		2		2,471
5.50%	03/32-02/35		8,447		8,415,826
Government National Mortgage Assoc. I 30 Year TBA
6.00%	01/01/37		27,000		27,341,250

38

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

TOTAL RETURN PORTFOLIO II (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MORTGAGE PASS-THROUGHS (Continued)
Government National Mortgage Assoc. II
6.00%	11/20/33	$	1,513	$	1,531,459
TOTAL MORTGAGE PASS-THROUGHS
(Cost $1,205,975,215)					1,200,133,651
COLLATERALIZED MORTGAGE OBLIGATIONS — 10.1%
Banc of America Alternative Loan Trust, Series 04-6, Class 4A1
5.00%	07/25/19		7,725		7,593,629
Federal Home Loan Mortgage Corp., Series 1361, Class I
6.00%	09/15/07		88		88,190
Federal Home Loan Mortgage Corp., Series 1591, Class PK
6.35%	10/15/23		6,553		6,671,069
Federal Home Loan Mortgage Corp., Series 231 (IO)
5.50%(c)	08/01/35		24,979		5,814,699
Federal Home Loan Mortgage Corp., Series 232 (IO)
5.00%(c)	08/01/35		14,740		3,525,505
Federal Home Loan Mortgage Corp., Series 235 (IO)
5.50%(c)	02/01/36		27,444		6,565,464
Federal Home Loan Mortgage Corp., Series 2529, Class MB
5.00%	11/15/17		8,292		8,110,624
Federal Home Loan Mortgage Corp., Series 2594, Class TV
5.50%	03/15/14		6,180		6,218,340
Federal Home Loan Mortgage Corp., Series 2864, Class NA
5.50%	01/15/31		14,499		14,542,388
Federal Home Loan Mortgage Corp., Series 2922, Class GA
5.50%	05/15/34		22,294		22,315,307
Federal Home Loan Mortgage Corp., Series 2996, Class MK
5.50%	06/15/35		14,834		14,880,469
Federal Home Loan Mortgage Corp., Series 3200, Class AD
5.50%	05/01/29		52,601		52,442,624
Federal Home Loan Mortgage Corp., Series 3204, Class C
5.50%	04/15/29		833		830,001
Federal National Mortgage Assoc., Series 96-48, Class Z
7.00%	11/25/26		3,397		3,515,447
Federal National Mortgage Assoc., Series 03-16, Class BC
5.00%	03/25/18		4,270		4,140,379
Federal National Mortgage Assoc., Series 04-28, Class PB
6.00%	08/25/28		9,630		9,649,699
Federal National Mortgage Assoc., Series 04-88, Class HA
6.50%	07/25/34		11,898		12,167,870
Federal National Mortgage Assoc., Series 04-99, Class AO
5.50%	01/25/34		14,736		14,694,236
Federal National Mortgage Assoc., Series 05-3, Class AP
5.50%	02/25/35		15,416		15,451,824
Federal National Mortgage Assoc., Series 05-57, Class PA
5.50%	05/25/27		25,188		25,204,698
Federal National Mortgage Assoc., Series 05-70, Class NA
5.50%	08/25/35		1,066		1,067,053
Federal National Mortgage Assoc., Series 378, Class 4 (IO)
5.00%(c)	11/01/35		34,702		7,932,635
Goldman Sachs Residential Mortgage Loan Trust, Series 03-10, Class 2A1
4.47%(g)	10/25/33		6,554		6,252,611
Opteum Mortgage Acceptance Corp., Series 06-2, Class A1A
5.41%(g)	07/25/36		15,836		15,828,058
Salomon Brothers Mortgage Securities VI, Series 87-1 (IO)
11.00%(c)	02/17/17		162		45,877
Salomon Brothers Mortgage Securities VI, Series 87-1 (PO)
11.50%(h)	02/17/17		169		142,984
Salomon Brothers Mortgage Securities VI, Series 87-2 (IO)
11.00%(c)	03/06/17		119		38,889
Salomon Brothers Mortgage Securities VI, Series 87-2 (PO)
11.50%(h)	03/06/17		119		96,570
Salomon Brothers Mortgage Securities, Series 87-3, Class A (PO)
13.00%(h)	10/23/17		60		54,405
Summit Mortgage Trust, Series 00-1, Class B1
6.57%(b)(g)(i)	12/28/12		130		130,023
Terra LNR Ltd., Series 06-1A, Class A1
5.48%(b)(g)	06/15/17		13,287		13,286,880
Wells Fargo Mortgage Backed Securities, Series 04-K, Class 1A2
4.47%(g)	07/25/34		23,522		22,966,885
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $305,050,574)					302,265,332
COMMERCIAL MORTGAGE BACKED SECURITIES — 15.6%
Banc of America Commercial Mortgage, Inc., Series 01-1, Class A2
6.50%	04/15/36		13,083		13,580,713
Banc of America Commercial Mortgage, Inc., Series 02-2, Class A3
5.12%	07/11/43		21,920		21,786,402
Banc of America Commercial Mortgage, Inc., Series 05-1, Class A4
4.89%(g)	11/10/42		13,880		13,782,163
Banc of America Commercial Mortgage, Inc., Series 05-4, Class A5A
4.93%	07/10/45		13,781		13,404,054

39

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

TOTAL RETURN PORTFOLIO II (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS )	MATURITY	PAR (000)		VALUE
COMMERCIAL MORTGAGE BACKED SECURITIES (Continued)
Bear Stearns Commercial Mortgage Securities, Inc., Series 04-PWR6, Class A6
4.82%	11/11/41	$	4,495	$	4,350,750
Bear Stearns Commercial Mortgage Securities, Inc., Series 06-PW14, Class A4
5.20%	12/01/38		19,200		18,937,766
Chase Commercial Mortgage Securities Corp., Series 97-1, Class X (IO)
1.32%(c)	04/19/15		6,653		137,841
Chase Commercial Mortgage Securities Corp., Series 99-2, Class A2
7.20%	01/15/32		10,105		10,544,643
Chase Commercial Mortgage Securities Corp., Series 00-3, Class A2
7.32%	10/15/32		5,755		6,093,104
Commercial Mortgage Acceptance Corp., Series 98-C2, Class A2
6.03%	03/15/08		7,814		7,843,952
Credit Suisse First Boston Mortgage Securities Corp., Series 97-C1, Class AX (IO)
1.55%(b)(c)	06/20/29		19,619		583,655
Credit Suisse First Boston Mortgage Securities Corp., Series 97-C2, Class AX (IO)
1.08%(c)	01/17/35		12,135		118,122
Donaldson, Lufkin & Jenrette, Inc., Commercial Mortgage Corp., Series 98-CG1, Class B1
6.91%	06/10/31		16,991		17,344,238
Donaldson, Lufkin & Jenrette, Inc., Commerical Mortgage Corp., Series 00-CKP1, Class A1B
7.18%	11/10/33		17,126		18,061,653
Federal National Mortgage Assoc., Series 06-M2, Class A2A
5.27%	10/20/32		30,725		30,379,344
First Union National Bank Commercial Mortgage Trust, Series 00-C2, Class A2
7.20%	10/15/32		10,000		10,558,334
First Union-Lehman Brothers Commercial Mortgage Trust, Series 97-C1, Class D
7.50%	04/18/29		50		50,126
First Union-Lehman Brothers-Bank of America Commercial Mortgage Trust, Series 98-C2, Class A2
6.56%	11/18/35		8,545		8,633,160
General Electric Capital Commercial Mortgage Corp., Series 02-1A, Class A3
6.27%	12/10/35		14,170		14,804,561
General Electric Capital Commercial Mortgage Corp., Series 02-2A, Class A3
5.35%	08/11/36		16,200		16,276,064
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 97-C1, Class X (IO)
1.52%(c)	07/15/27		24,892		617,876
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 99-C3, Class A2
7.18%	08/15/36		8,541		8,846,277
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 00-C1, Class A2
7.72%	03/15/33		16,105		17,047,919
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 00-C2, Class A2
7.46%	08/16/33		10,768		11,396,932
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 00-C3, Class A2
6.96%	11/15/10		18,700		19,747,286
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 01-C1, Class A2
6.46%	02/15/11		16,340		17,021,584
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 03-C2, Class A2
5.28%(g)	05/10/40		18,085		18,324,491
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 03-C3, Class A3
4.65%	04/10/40		1,840		1,800,092
Goldman Sachs Mortgage Securities Corp. II, Series 98-C1, Class A2
6.62%	10/18/30		25		24,804
Goldman Sachs Mortgage Securities Corp. II, Series 98-C1, Class A3
6.14%	10/18/30		5,855		5,898,754
Goldman Sachs Mortgage Securities Corp. II, Series 04-GG2, Class A6
5.40%	08/10/38		640		642,434
Greenwich Capital Commercial Funding Corp., Series 04-GG1A, Class A4
4.76%	06/10/36		5,255		5,184,425
Homebanc Mortgage Trust, Series 05-4, Class A1
5.62%(g)	10/25/35		10,816		10,830,797
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 01-C1, Class A3
5.86%	10/12/35		14,370		14,710,270
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 01-CIB3, Class A3
6.46%	11/15/35		16,870		17,702,047
Lehman Brothers Commercial Conduit Mortgage Trust, Series 98-C4, Class X (IO)
0.49%(c)	09/15/23		13,732		187,646
Lehman Brothers Commercial Conduit Mortgage Trust, Series 99-C2, Class A1
7.10%	10/15/32		43		43,449
Lehman Brothers Commercial Conduit Mortgage Trust, Series 99-C2, Class A2
7.32%	10/15/32		85		88,473

40

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

TOTAL RETURN PORTFOLIO II (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
COMMERCIAL MORTGAGE BACKED SECURITIES (Continued)
Lehman Brothers-UBS Commercial Mortgage Trust, Series 00-C5, Class A1
6.41%	12/15/19	$	6,678	$	6,729,260
Morgan Stanley Capital Investments, Series 99-FNV1, Class A2
6.53%	03/15/31		10,185		10,352,519
Prudential Mortgage Capital Funding, LLC, Series 01-C1, Class A2
6.60%	05/10/34		16,800		17,622,439
Residential Asset Mortgage Products, Inc., Series 04-RS7, Class AI3
4.45%	07/25/28		240		238,212
Structured Asset Receivables Trust, Series 03-2
5.72%(b)(g)(j)	01/21/09		10,599		10,595,527
Structured Asset Securities Corp., Series 96-CFL, Class X1 (IO)
2.15%(c)	02/25/28		5,393		197,449
Wachovia Bank Commercial Mortgage Trust, Series 03, Class C6
5.12%	08/15/35		18,000		17,830,278
Wachovia Bank Commercial Mortgage Trust, Series 06-C27, Class A3
5.76%	07/01/45		13,885		14,291,288
Washington Mutual Asset Securities Corp., Series 05-C1A, Class A1
4.24%(b)	05/25/36		10,924		10,758,530
TOTAL COMMERCIAL MORTGAGE BACKED SECURITIES
(Cost $473,813,107)					466,001,703
CERTIFICATE OF DEPOSIT — 1.3%
Barclays Bank PLC (United Kingdom)
5.37%(g)	03/13/09		35,505		35,517,427
SunTrust Bank, Inc.
4.42%	06/15/09		3,795		3,741,794
TOTAL CERTIFICATE OF DEPOSIT
(Cost $39,300,000)					39,259,221
ASSET BACKED SECURITIES — 18.5%
Ace Securities Corp., Series 06-HE1, Class A2A
5.43%(g)	02/25/36		9,631		9,632,549
American Express Credit Account Master Trust, Series 06-01, Class A
5.38%(g)	12/15/13		21,025		21,044,740
Bank One Issuance Trust, Series 03, Class A3
5.46%(g)	12/15/10		24,025		24,065,864
Capital Auto Receivables Asset Trust, Series 05-1, Class A4
4.05%	07/15/09		20,200		20,058,911
Capital Auto Receivables Asset Trust, Series 06-SN1A, Class A2A
5.40%(b)(g)	01/20/09		36,950		36,959,607
Carrington Mortgage Loan Trust, Series 06-FRE1, Class A1
5.42%(g)	07/25/36		13,597		13,597,191
Chase Credit Card Master Trust, Series 04-2, Class A
5.39%(g)	09/15/09		22,875		22,879,834
Chase Issuance Trust, Series 04-A9, Class A9
3.22%	06/15/10		18,875		18,582,175
Chase Issuance Trust, Series 05, Class A5
5.37%(g)	02/15/12		5,805		5,810,957
Chase Issuance Trust, Series 06, Class A3
5.34%(g)	07/15/11		19,270		19,284,790
Citibank Credit Card Issuance Trust, Series 03, Class A6
2.90%	05/17/10		17,060		16,538,571
Citibank Credit Card Issuance Trust, Series 04, Class A1
2.55%	01/20/09		21,980		21,949,153
Citibank Credit Card Issuance Trust, Series 04, Class A4
3.20%	08/24/09		23,700		23,383,638
Countrywide Certificates, Series 04-12, Class 2A1
5.46%(g)	01/25/29		2,010		2,010,232
Countrywide Certificates, Series 04-14, Class A4
5.63%(g)	06/25/35		4,136		4,145,927
Countrywide Certificates, Series 05-BC5, Class 3A1
5.45%(g)	10/25/27		3,317		3,316,953
Countrywide Certificates, Series 06-3, Class 2A1
5.42%(g)	06/25/36		12,563		12,565,995
Countrywide Certificates, Series 06-8, Class 2A1
5.38%(g)	07/25/36		16,870		16,871,077
Countrywide Certificates, Series 06-IM1, Class A1
5.44%(g)	09/25/28		6,606		6,606,922
Discover Card Master Trust I, Series 05-1, Class A
5.36%(g)	09/16/10		17,325		17,334,823
Goldman Sachs Home Equity Trust, Series 06-10, Class AV1
5.43%(g)	07/25/36		13,803		13,805,608
Goldman Sachs Home Equity Trust, Series 06-5, Class 2A1
5.42%(g)	03/25/36		14,574		14,556,819
Goldman Sachs Home Equity Trust, Series 06-9, Class A1
5.37%	06/25/36		416		416,357
Long Beach Mortgage Loan Trust, Series 05-WL2, Class 3A2
5.43%(g)	08/25/35		429		429,186
Maryland Trust, Series 06-I, Class A
5.55%(b)	12/10/49		18,935		18,765,059
MBNA Credit Card Master Notes Trust, Series 98-E, Class A
5.52%(g)	09/15/10		20,210		20,261,978
MBNA Credit Card Master Notes Trust, Series 03, Class A7
2.65%	11/15/10		20,000		19,297,222
MBNA Credit Card Master Notes Trust, Series 04-A4, Class A4
2.70%	09/15/09		21,400		21,245,922

41

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

TOTAL RETURN PORTFOLIO II (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
ASSET BACKED SECURITIES (Continued)
MBNA Credit Card Master Notes Trust, Series 06, Class A1
4.90%	02/15/09	$	19,900	$	19,836,891
MBNA Credit Card Master Notes Trust, Series 06-A4, Class A4
5.34%(g)	09/15/11		27,000		27,020,061
Morgan Stanley Capital I, Series 06-HE5, Class A2A
5.42%(g)	07/25/36		19,305		19,304,298
Morgan Stanley Capital Investments, Series 06-HE2, Class A2A
5.42%(g)	03/25/36		16,618		16,619,411
Novastar Home Equity Loan, Series 06-2, Class A2A
5.40%(g)	06/25/36		13,923		13,924,453
Residential Asset Securities Corp., Series 05-KS11, Class AI1
5.43%(g)	09/25/26		7,687		7,688,924
Structured Mortgage Loan Trust, Series 05-19XS, Class 1A1
5.67%(g)	10/25/35		10,009		10,047,992
Student Loan Marketing Assoc. Student Loan Trust, Series 99-3, Class A2
5.54%(g)	07/25/12		4,986		4,988,309
Student Loan Marketing Assoc. Student Loan Trust, Series 05-5, Class A1
5.38%(g)	01/25/18		8,635		8,638,507
TOTAL ASSET BACKED SECURITIES
(Cost $555,370,267)					553,486,906
CORPORATE BONDS — 20.1%
Aerospace — 0.3%
Raytheon Co., Senior Notes
6.15%	11/01/08		18		18,230
United Technologies Corp., Unsecured Notes
5.44%(g)	06/01/09		8,650		8,659,230
					8,677,460
Banks — 7.3%
Bank of America Corp., Subordinated Notes
6.25%	04/01/08		1,385		1,397,872
Bank of America Corp., Unsecured Notes
5.38%(g)	03/24/09		20,875		20,894,894
Bank of New York Co., Inc., Senior Subordinated Notes
3.80%	02/01/08		3,100		3,049,817
Bank One Texas N.A., Subordinated Bank Notes
6.25%	02/15/08		3,225		3,257,482
BankBoston N.A., Subordinated Bank Notes
6.38%	04/15/08		675		683,614
BankBoston N.A., Subordinated Notes
6.38%	03/25/08		1,600		1,619,008
Citigroup Global Markets Holdings, Inc., Senior Unsecured Notes
6.50%	02/15/08		2,880		2,914,102
Citigroup, Inc., Senior Unsecured Notes
3.50%	02/01/08		11,660		11,450,190
6.20%	03/15/09		1,700		1,733,330
Citigroup, Inc., Subordinated Notes
6.38%	11/15/08		1,010		1,029,392
6.12%	08/25/36		3,400		3,540,413
Citigroup, Inc., Unsecured Notes
3.62%	02/09/09		1,080		1,048,063
4.12%	02/22/10		14,910		14,463,416
4.62%	08/03/10		4,505		4,424,329
Depfa ACS Bank (Ireland), Senior Notes
3.62%	10/29/08		8,000		7,791,360
Deutsche Bank AG, Deposit Notes
5.34%(g)	03/15/07		5,500		5,499,835
FleetBoston Financial Corp., Senior Unsecured Notes
4.20%	11/30/07		3,310		3,276,357
HBOS Treasury Services PLC (United Kingdom), Senior Unsecured Notes
3.60%(b)	08/15/07		2,750		2,719,822
HBOS Treasury Services PLC (United Kingdom), Subordinated Notes
5.92%(b)(g)(k)			20		19,619
HBOS Treasury Services PLC (United Kingdom), Unsecured Notes
3.50%(b)	11/30/07		5,450		5,360,631
HSBC Bank USA, Subordinated Notes
3.87%	06/07/07		20,475		20,344,001
J.P. Morgan Chase & Co., Senior Notes
2.62%	06/30/08		2,836		2,727,191
J.P. Morgan Chase & Co., Senior Unsecured Notes
5.35%	03/01/07		4,902		4,901,010
4.00%	02/01/08		1,915		1,889,596
3.62%	05/01/08		2,509		2,450,917
National City Bank Indiana, Unsecured Notes
3.30%	05/15/07		1,000		991,548
Rabobank Nederland (Netherlands), Senior Notes
5.37%(b)(g)	04/06/09		47,270		47,281,817
SunTrust Bank, Inc., Senior Unsecured Notes
3.62%	10/15/07		2,855		2,816,500
4.00%	10/15/08		3,000		2,931,732
U.S. Bancorp, Senior Unsecured Notes
3.95%	08/23/07		1,315		1,303,486
U.S. Bank N.A., Senior Bank Notes
2.40%	03/12/07		6,500		6,459,836
UBS Preferred Funding Trust, Inc., Capital Securities
8.62%(g)(k)			1,390		1,535,457
USB Capital IX, Unsecured Notes
6.19%(g)(k)			80		81,703
Wachovia Bank N.A., Senior Bank Notes
4.38%	08/15/08		3,325		3,277,625
5.41%(g)	03/23/09		11,150		11,151,371

42

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

TOTAL RETURN PORTFOLIO II (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
CORPORATE BONDS (Continued)
Banks (Continued)
Wachovia Capital Trust III, Income Trust Securities
5.80%(g)(k)		$	145	$	146,197
Wells Fargo & Co., Senior Unsecured Notes
4.20%	01/15/10		3,970		3,867,562
Wells Fargo & Co., Unsecured Notes
4.62%	08/09/10		6,825		6,697,673
4.88%	01/12/11		2,680		2,653,388
					219,682,156
Broadcasting — 0.3%
BSKYB Finance PLC (United Kingdom), Senior Unsecured Notes
6.50%(b)	10/15/35		445		440,088
News America Holdings, Inc., Secured Notes
8.50%	02/23/25		1,900		2,248,675
News America Holdings, Inc., Senior Debentures
7.75%	01/24-12/45		1,395		1,559,497
7.12%	04/08/28		1,175		1,239,777
7.62%	11/30/28		2,010		2,253,928
8.45%	08/01/34		840		1,009,804
6.75%	01/09/38		30		31,903
8.25%	10/17/96		45		51,118
					8,834,790
Computer Software & Services — 0.1%
Oracle Corp., Unsecured Notes
5.25%	01/15/16		2,880		2,819,220
Energy & Utilities — 0.5%
Centerpoint Energy Resources Corp., Senior Unsecured Notes
6.15%	05/01/16		2,100		2,143,356
Centerpoint Energy Resources Corp., Unsecured Notes
7.88%	04/01/13		205		227,450
Detroit Edison Co., Senior Notes
6.35%	10/15/32		5		5,231
Detroit Edison Co., Senior Secured Notes
6.12%	10/01/10		210		214,687
Dominion Resources, Inc., Senior Unsecured Notes
6.25%	06/30/12		60		62,238
Energy East Corp., Unsecured Notes
6.75%	07/15/36		2,125		2,242,075
FirstEnergy Corp., Senior Unsecured Notes
6.45%	11/15/11		185		192,920
Florida Power & Light Co., First Mortgage Bonds
4.95%	06/01/35		2,225		1,978,594
Florida Power Corp., First Mortgage Bonds
5.90%	03/01/33		550		552,508
Korea Electric Power Corp. (South Korea), Notes
5.12%(b)	04/23/34		75		74,755
Tenaska Alabama II Partners LP, Senior Secured Notes
6.12%(b)	03/30/23		133		133,482
TXU Corp., Senior Unsecured Notes
4.80%	11/15/09		6,000		5,855,634
					13,682,930
Entertainment & Leisure — 0.8%
Comcast Cable Holdings LLC, Senior Debentures
9.80%	02/01/12		260		306,591
7.88%	08/13-02/26		2,855		3,250,875
Comcast Corp., Senior Unsecured Bonds
6.50%	11/15/35		2,905		2,925,518
Comcast Corp., Senior Unsecured Notes
7.05%	03/15/33		1,315		1,406,128
Comcast Corp., Unsecured Notes
6.50%	01/15/17		3,800		3,965,384
Time Warner Cos., Inc., Debentures
6.95%	01/15/28		8,720		9,150,750
Time Warner Cos., Inc., Senior Debentures
9.12%	01/15/13		605		704,819
8.05%	01/15/16		70		79,585
Time Warner Cos., Inc., Senior Unsecured Notes
6.75%	04/15/11		1,080		1,130,553
					22,920,203
Finance — 4.7%
BankBoston Capital Trust, Inc., Capital Securities
8.25%	12/15/26		75		78,219
Berkshire Hathaway Finance Corp., Senior Unsecured Notes
3.40%	07/02/07		8,030		7,959,906
4.12%	01/15/10		975		947,588
4.75%	05/15/12		3,290		3,224,480
General Electric Capital Corp., Unsecured Notes
3.45%	07/16/07		1,830		1,812,405
5.42%(g)	01/15/08		39,350		39,387,461
4.12%	09/01/09		9,280		9,047,972
5.00%	11/15/11		15,945		15,828,107
Golden West Financial Corp., Senior Unsecured Notes
4.12%	08/15/07		160		158,724
HSBC Finance Corp., Senior Unsecured Notes
7.88%	03/01/07		2,200		2,208,364
4.75%	05/15/09		2,780		2,749,926
Lehman Brothers Holdings, Inc., Senior Unsecured Notes
7.88%	08/15/10		2,307		2,490,907
5.75%	07/18/11		3,375		3,440,975
Morgan Stanley, Senior Notes
5.40%(g)	03/07/08		23,165		23,181,887
5.62%	01/09/12		1,430		1,453,566

43

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

TOTAL RETURN PORTFOLIO II (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
CORPORATE BONDS (Continued)
Finance (Continued)
Morgan Stanley, Senior Unsecured Notes
6.75%	04/15/11	$	2,150	$	2,272,490
Morgan Stanley, Unsecured Notes
5.05%	01/21/11		6,770		6,726,009
Nationwide Building Society (United Kingdom), Senior Unsecured Notes
3.50%(b)	07/31/07		7,250		7,171,852
Nationwide Building Society (United Kingdom), Unsecured Notes
4.25%(b)	02/01/10		2,165		2,097,471
NB Capital Trust IV, Capital Securities
8.25%	04/15/27		125		130,468
Pricoa Global Funding, Inc., Senior Secured Notes
4.35%(b)	06/15/08		2,735		2,690,931
Qwest Capital Funding, Inc., Senior Notes
6.38%(l)	07/15/08		3,350		3,358,375
USAA Capital Corp., Senior Unsecured Notes
4.00%(b)	12/10/07		3,065		3,023,531
					141,441,614
Industrial — 0.0%
Osprey Trust/Osprey, Inc., Senior Secured Notes
7.80%(b)(g)(m)(n)	01/15/03		2,375		985,625
Insurance — 0.7%
MassMutual Global Funding II (Cayman Islands), Senior Secured Notes
2.55%(b)	07/15/08		3,740		3,584,259
Metlife, Inc., Junior Subordinated Debentures
6.40%(g)	12/15/36		6,400		6,453,568
MetLife, Inc., Senior Unsecured Notes
6.38%	06/15/34		900		961,076
Monumental Global Funding II, Senior Unsecured Notes
5.20%(b)	01/30/07		2,750		2,749,486
Monumental Global Funding II, Unsecured Notes
3.85%(b)	03/03/08		210		206,107
New York Life Global Funding, Unsecured Notes
3.88%(b)	01/15/09		2,000		1,946,228
Sun Life of Canada Capital Trust (Canada), Capital Securities
8.53%(b)(k)			390		409,623
TIAA Global Markets, Senior Unsecured Notes
3.88%(b)	01/22/08		1,605		1,578,338
WellPoint, Inc., Unsecured Notes
5.95%	12/15/34		1,905		1,874,341
5.85%	01/15/36		1,740		1,690,316
					21,453,342
Manufacturing — 0.1%
Belvoir Land LLC, Unsecured Notes
5.27%(b)	12/15/47		2,025		1,889,548
Motor Vehicles — 0.0%
DaimlerChrysler N.A. Holding Corp., Unsecured Notes
4.05%	06/04/08		205		200,621
Oil & Gas — 0.6%
Anadarko Petroleum Corp., Senior Unsecured Notes
6.45%	09/15/36		8,175		8,260,805
Atlantic Richfield Co., Debentures
9.12%	03/01/11		4,960		5,689,001
Consolidated Natural Gas Co., Debentures
6.80%	12/15/27		2,500		2,725,555
Halliburton Co., Debentures
7.60%	08/15/96		1,429		1,639,770
					18,315,131
Pharmaceuticals — 0.2%
Bristol-Myers Squibb Co., Senior Debentures
6.88%	08/01/47		559		595,677
Bristol-Myers Squibb Co., Unsecured Notes
5.88%	11/15/36		4,050		4,006,057
Merck & Co., Inc., Senior Debentures
6.40%	03/01/28		1,000		1,068,687
Wyeth, Unsecured Notes
5.50%	02/15/16		75		75,102
					5,745,523
Railroad & Shipping — 0.1%
Union Pacific Corp., Senior Debentures
7.12%	02/01/28		2,000		2,267,706
Real Estate — 0.1%
Camden Property Trust, Unsecured Notes
4.70%	07/15/09		1,400		1,381,243
The Rouse Co., Unsecured Notes
3.62%	03/15/09		1,455		1,377,105
5.38%	11/26/13		1,685		1,566,047
					4,324,395
Retail Merchandising — 0.1%
Federated Department Stores, Senior Debentures
6.79%	07/15/27		590		589,981
May Department Stores Co., Debentures
6.65%	07/15/24		1,000		990,792
May Department Stores Co., Unsecured Notes
4.80%	07/15/09		50		49,202
					1,629,975
Telecommunications — 0.6%
AT&T Broadband Corp., Unsecured Notes
8.38%	03/15/13		2,505		2,853,358
GTE Corp., Debentures
6.94%	04/15/28		475		498,001

44

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

TOTAL RETURN PORTFOLIO II (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
CORPORATE BONDS (Continued)
Telecommunications (Continued)
New England Telephone & Telegraph Co., Debentures
7.88%	11/15/29	$	1,355	$	1,478,399
SBC Communications, Inc., Unsecured Notes
4.21%(b)	06/05/21		11,500		11,437,325
Sprint Capital Corp., Senior Notes
6.12%	11/15/08		70		70,827
Sprint Capital Corp., Senior Unsecured Notes
8.38%	03/15/12		55		61,126
8.75%	03/15/32		580		698,094
Verizon Maryland, Inc., Debentures
5.12%	06/15/33		650		533,233
					17,630,363
Yankee — 3.6%
AID-Israel (Israel), Unsecured Notes
5.50%(o)	04/24-09/33		12,210		12,716,524
ConocoPhillips Funding Co. (Australia), Unsecured Notes
5.47%(g)(o)	04/09/09		14,085		14,096,212
Deutsche Telekom International Finance BV (Netherlands), Senior Unsecured Notes
8.25%(g)(o)	06/15/30		1,305		1,604,289
Eksportfinans ASA (Norway), Unsecured Notes
3.38%(o)	01/15/08		12,900		12,651,340
France Telecom (France), Senior Unsecured Notes
7.75%(o)	03/01/11		600		653,564
Korea Development Bank (South Korea), Notes
4.25%(o)	11/13/07		70		69,243
National Landeskreditbank Baden-Wurttemberg (Germany), Unsecured Notes
4.25%(o)	09/15/10		10,750		10,471,575
Pemex Finance Ltd. (Luxembourg), Senior Unsecured Notes
9.03%(o)	02/15/11		1,445		1,538,968
The Royal Bank of Scotland Capital Trust (United Kingdom), Bank Guaranteed Bonds
6.80%(k)(o)			3,000		3,037,500
The Royal Bank of Scotland Capital Trust (United Kingdom), Unsecured Notes
4.71%(g)(k)(o)			45		42,777
Scottish Power PLC (United Kingdom), Unsecured Notes
4.91%(o)	03/15/10		3,200		3,153,936
Suncor Energy, Inc. (Canada)
5.95%(o)	12/01/34		285		286,725
Swedish Export Credit Corp. (Sweden), Unsecured Notes
2.88%(o)	01/26/07		2,700		2,696,190
Teck Cominco Ltd. (Canada), Senior Unsecured Notes
6.12%(o)	10/01/35		2,375		2,281,831
Telecom Italia Capital (Luxembourg), Senior Unsecured Notes
5.25%(o)	11/15/13		285		271,744
6.00%(o)	09/30/34		785		711,968
7.20%(o)	07/18/36		2,400		2,507,323
Telecom Italia Capital (Luxembourg), Unsecured Notes
5.25%(o)	10/01/15		3,700		3,456,203
Telefonica Emisiones Sau (Spain), Senior Unsecured Notes
6.42%(o)	06/20/16		2,400		2,475,883
7.04%(o)	06/20/36		1,800		1,911,901
Telefonica Europe BV (Netherlands), Senior Unsecured Notes
7.75%(o)	09/15/10		1,970		2,115,865
Tyco International Group SA (Luxembourg), Senior Unsecured Notes
6.38%(o)	10/15/11		760		795,333
United Mexican States (Mexico), Senior Unsecured Notes
5.62%(o)	01/15/17		1,600		1,601,600
8.30%(o)	08/15/31		410		524,185
United Mexican States (Mexico), Unsecured Notes
7.50%(o)	04/08/33		300		354,000
Vodafone Group PLC (United Kingdom), Senior Unsecured Notes
7.75%(o)	02/15/10		2,985		3,181,064
Vodafone Group PLC (United Kingdom), Unsecured Notes
5.42%(g)(o)	06/29/07		11,500		11,500,518
5.45%(g)(o)	12/28/07		10,510		10,515,066
					107,223,327
TOTAL CORPORATE BONDS
(Cost $602,091,022)					599,723,929
FOREIGN BONDS — 0.2%
Province of Manitoba (Canada), Senior Unsecured Notes (NZD)
6.38%	09/01/15		2,695		1,844,955
Province of Ontario (Canada), Unsecured Notes (NZD)
6.25%	06/16/15		6,105		4,128,983
TOTAL FOREIGN BONDS
(Cost $6,183,032)					5,973,938
TAXABLE MUNICIPAL BONDS — 0.1%
Fort Irwin Land California LLC Military Housing Revenue Bonds, Class II, Series A
5.30%(b)
(Cost $3,414,029)	12/15/35		3,415		3,178,272

45

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

TOTAL RETURN PORTFOLIO II (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR/SHARES (000)			VALUE
SHORT TERM INVESTMENTS — 0.1%
Federal Home Loan Bank, Discount Notes
4.80%(p)	01/02/07	$	1,200		$	1,199,840
Federal Home Loan Mortgage Corp., Discount Notes
5.15%(d)(p)	01/11/07		710			708,984
Galileo Money Market Fund			246			245,753
TOTAL SHORT TERM INVESTMENTS
(Cost $2,154,577)						2,154,577
		NUMBER OF CONTRACTS
CALL SWAPTIONS PURCHASED — 0.1%
Barclays Capital, Strike Rate 5.520%, Expires 09/19/16
(Cost $2,302,398)			3,780	(q)		2,250,100
PUT OPTIONS PURCHASED — 0.0%
March 10 year U.S. Treasury Notes futures, Strike Price $106, Expires 02/23/07
(Cost $112,585)			298			144,344
PUT SWAPTIONS PURCHASED — 0.1%
Barclays Capital, Strike Rate 5.400%, Expires 03/12/07			34,960	(q)		229,396
Barclays Capital, Strike Rate 5.520%, Expires 09/21/15			3,780	(q)		2,071,230
Barclays Capital, Strike Rate 5.900%, Expires 03/12/07			34,960	(q)		6,859
Citibank, Strike Rate -0.020%, Expires 06/01/07			58,440	(q)		603,964
TOTAL PUT SWAPTIONS PURCHASED
(Cost $3,204,048)						2,911,449
TOTAL MARKET VALUE OF SECURITIES BEFORE AFFILIATED INVESTMENTS — 115.2%
(Cost $3,464,885,190)						3,440,975,757
		PAR (000)
AFFILIATED INVESTMENTS — LONG TERM — 0.3%
Merrill Lynch Mortgage Investors, Inc., Series 03-KEY1, Class A4 5.24%
(Cost $7,358,889)	11/12/35	$	7,100			7,068,992
		NUMBER OF SHARES
AFFILIATED INVESTMENTS — SHORT TERM — 0.1%
Institutional Money Market Trust(r)
(Cost $3,449,240)			3,449,240			3,449,240
TOTAL INVESTMENTS IN SECURITIES — 115.6%
(Cost $3,475,693,319(a))					$	3,451,493,989
		PAR (000)
MORTGAGE PASS-THROUGH TBA SALE COMMITMENTS — (7.7)%
Federal Home Loan Mortgage Corp. Gold 15 Year TBA
4.50%	01/01/22	$	(23,000	)		(22,159,074	)
Federal National Mortgage Assoc. 15 Year TBA
5.00%	01/01/22		(14,400	)		(14,152,493	)
Federal National Mortgage Assoc. 30 Year TBA
5.50%	01/01/37		(148,200	)		(146,440,125	)
6.00%	01/01/37		(16,600	)		(16,708,929	)
6.50%	01/01/37		(31,000	)		(31,581,250	)
TOTAL MORTGAGE PASS-THROUGH TBA SALE COMMITMENTS
(Premiums received $232,339,219)						(231,041,871	)
		NUMBER OF CONTRACTS
CALL SWAPTIONS WRITTEN — (0.2)%
Barclays Capital, Strike Rate 5.140%, Expires 04/21/08			(3,420	)(q)		(768,467	)
Chase Securities, Strike Rate 5.485%, Expires 10/26/09			(4,440	)(q)		(1,882,560	)
Citibank, Strike Rate 5.670%, Expires 01/04/10			(3,270	)(q)		(1,616,067	)
Union Bank, Strike Rate 4.730%, Expires 06/13/07			(8,800	)(q)		(296,560	)
TOTAL CALL SWAPTIONS WRITTEN
(Premiums received $8,258,010)						(4,563,654	)
PUT SWAPTIONS WRITTEN — (0.2)%
Barclays Capital, Strike Rate 5.140%, Expires 04/21/08			(3,420	)(q)		(924,084	)
Barclays Capital, Strike Rate 5.650%, Expires 03/12/07			(69,920	)(q)		(102,089	)
Chase Securities, Strike Rate 5.485%, Expires 10/26/09			(4,440	)(q)		(1,288,488	)
Citibank, Strike Rate 5.670%, Expires 01/04/10			(3,270	)(q)		(836,335	)
Union Bank, Strike Rate 4.730%, Expires 06/13/07			(8,800	)(q)		(3,322,000	)
TOTAL PUT SWAPTIONS WRITTEN
(Premiums received $8,537,690)						(6,472,996	)

46

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

TOTAL RETURN PORTFOLIO II (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	VALUE
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL — (0.1)%	$	(3,449,240	)
LIABILITIES IN EXCESS OF OTHER ASSETS — (7.4)%
(including $369,689,503 of payable for investments purchased and $157,434,905 of receivable for investments sold)		(219,397,612	)
NET ASSETS — 100.0%	$	2,986,568,616

(a) Cost for federal income tax purposes is $3,476,391,506. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	6,943,612
Gross unrealized depreciation		(31,841,129	)
	$	(24,897,517	)

(b) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. As of December 31, 2006, the Portfolio held 6.4% of its net assets, with a current market value of $190,292,917, in securities restricted as to resale.

(c) Rates shown are the effective yields as of December 31, 2006.

(d) Security, or a portion thereof, with a market value of $9,466,505 have been pledged as collateral for swap and swaption contracts.

(e) Security, or a portion thereof, subject to financing transactions.

(f) Security, or a portion thereof, pledged as collateral with a value of $3,081,039 on 6,989 short U.S. Treasury Note futures contracts, 2,328 long U.S. Treasury Note futures contracts and 1,836 long U.S. Treasury Bond futures contracts expiring March 2007 and 1,259 short Euro-dollar futures contracts expiring December 2007. The value of such contracts on December 31, 2006 was $1,488,238,188, with an unrealized gain of $2,039,246 (including commissions of $28,319).

(g) Variable rate security. Rates shown are the rates as of December 31, 2006.

(h) Interest rate of underlying collateral.

(i) Security valued at fair value as determined in good faith by or under the direction of the Board of Trustees. As of December 31, 2006, these securities had a total market value of $130,023, which represents less than 0.1% of net assets.

(j) Security is illiquid. As of December 31, 2006, the Portfolio held 0.4% of its net assets, with a current market value of $10,595,527 in these securities.

(k) The security is a perpetual bond and has no stated maturity date.

(l) Total or partial security on loan.

(m) Security in default.

(n) As a result of bankruptcy proceedings, the company did not repay the principal amount of the security upon maturity.

(o) Security is a foreign domiciled issuer which is registered with the Securities and Exchange Commission.

(p) The rate shown is the effective yield at the time of purchase.

(q) Each swaption contract is equivalent to $10,000 notional amount.

(r) Security purchased with the cash proceeds from securities loaned.

47

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

GOVERNMENT INCOME PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
U.S. GOVERNMENT & AGENCY OBLIGATIONS — 25.6%
Federal Farm Credit Bank
4.55%(b)	06/08/20	$	15,500	$	14,539,062
Small Business Administration Participation Certificates, Series 96-20J, Class 1
7.20%	10/01/16		100		103,679
Small Business Administration Participation Certificates, Series 98-20J, Class 1
5.50%	10/01/18		94		94,788
Small Business Investment Cos. Pass-Through, Series 03-10A, Class 1
4.63%	03/10/13		972		945,366
U.S. Treasury Notes
4.50%(c)(d)	11/30/11		461,000		456,894,334
4.88%(d)	08/15/16		8,100		8,196,819
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost $484,417,214)					480,774,048
MORTGAGE PASS-THROUGHS — 100.7%
Federal Home Loan Mortgage Corp.
13.00%	09/10-02/16		217		240,656
11.00%	04/12-09/20		106		117,170
12.00%	06/13-06/20		112		123,987
11.50%	07/13-06/20		136		147,323
12.50%	12/15-07/19		172		184,875
10.00%(e)	07/01/19		0		285
Federal Home Loan Mortgage Corp. ARM
5.01%(f)	10/01/35		15,036		14,913,429
Federal Home Loan Mortgage Corp. Gold
8.00%	01/08-08/32		2,048		2,137,284
7.50%	05/09-12/32		12,578		13,073,110
6.00%	10/09-01/33		32,726		33,142,292
5.50%	10/13-12/17		5,175		5,185,318
8.50%	01/25-07/25		255		273,351
6.50%	03/29-10/32		2,236		2,293,543
7.00%	09/31-04/32		925		951,224
Federal Home Loan Mortgage Corp. Gold 15 Year TBA
4.50%	01/01/22		41,400		39,886,333
5.00%	01/01/22		15,700		15,420,352
5.50%	01/01/22		17,800		17,783,304
Federal Home Loan Mortgage Corp. Gold 30 Year TBA
5.00%	01/01/37		42,300		40,806,302
5.50%	01/01/37		145,100		143,467,625
6.00%	01/01/37		15,300		15,409,976
6.50%	01/01/37		8,900		9,064,098
Federal National Mortgage Assoc.
7.00%	08/09-12/11		15		14,736
6.00%	11/09-08/21		9,221		9,355,680
11.00%	02/11-08/20		290		318,676
6.50%	02/12-04/35		11,791		12,065,090
8.50%	08/12-07/23		856		917,969
5.10%	02/01/13		39,220		38,907,595
13.00%	09/13-03/15		213		237,409
5.50%	12/13-01/21		7,397		7,414,787
8.00%	08/14-09/27		27		28,021
7.50%	07/16-12/32		4,344		4,525,099
5.97%	08/01/16		13,834		14,483,230
4.50%	12/01/20		100		96,470
5.00%	12/20-11/21		896		880,885
5.83%	07/01/36		19,441		19,470,149
Federal National Mortgage Assoc. 15 Year TBA
5.00%	01/01/22		156,000		153,318,672
5.50%	01/01/22		65,200		65,179,658
6.00%	01/01/22		199,000		201,736,250
Federal National Mortgage Assoc. 30 Year TBA
4.50%	01/01/37		76,900		72,045,688
5.00%	01/01/37		77,000		74,329,024
5.50%	01/01/37		214,200		211,656,375
6.00%	01/01/37		478,700		481,841,229
6.50%	01/01/37		40,900		41,666,875
Federal National Mortgage Assoc. ARM
4.85%(f)	09/01/35		24,277		23,937,191
4.95%(f)	09/01/35		30,555		30,201,027
5.38%(f)	04/01/36		2,581		2,592,563
Government National Mortgage Assoc. I
6.00%	01/14-11/31		2,036		2,068,336
5.50%	03/14-04/29		692		693,006
10.50%	01/15/16		4		4,589
7.00%	06/23-04/32		3,111		3,215,006
7.50%	02/25-12/31		3,717		3,879,511
Government National Mortgage Assoc. I 30 Year TBA
5.00%	01/01/37		40,200		39,081,958
6.00%	01/01/37		21,400		21,694,250
Government National Mortgage Assoc. II
8.00%	04/20/13		66		68,696
TOTAL MORTGAGE PASS—THROUGHS
(Cost $1,901,453,654)					1,892,547,537
COLLATERALIZED MORTGAGE OBLIGATIONS — 62.3%
ABN Amro Mortgage Corp., Series 03-7, Class A1
4.75%	07/25/18		27,230		26,457,077
Chase Mortgage Finance Corp., Series 03-S12, Class 2A1
5.00%	12/25/18		27,941		27,390,888
Chase Mortgage Finance Corp., Series 03-S3, Class A1
5.00%	03/25/18		3,939		3,850,240
Chase Mortgage Finance Corp., Series 03-S4, Class 2A1
5.00%	04/25/18		11,147		10,964,055
Countrywide Alternative Loan Trust, Series 06-41CB, Class 2A17
6.00%	12/25/36		25,985		26,165,010
Countrywide Alternative Loan Trust, Series 06-43CB, Class 1A7
6.00%	01/31/37		30,270		30,463,917
Countrywide Home Loans, Series 04-J1, Class 2A1
4.75%	01/25/19		12,707		12,412,662
Countrywide Home Loans, Series 04-J4, Class 2A1
5.00%	05/25/19		2,033		1,999,584

48

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

GOVERNMENT INCOME PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
COLLATERALIZED MORTGAGE OBLIGATIONS (Continued)
Credit Suisse First Boston Mortgage Securities Corp., Series 04-7, Class 6A1
5.25%	10/25/19	$	1,603	$	1,587,038
Credit Suisse First Boston Mortgage Securities Corp., Series 03-23, Class 8A1
5.00%	09/25/18		17,041		16,727,100
Credit Suisse First Boston Mortgage Securities Corp., Series 03-8, Class 2A1
5.00%	04/25/18		8,443		8,223,005
Credit Suisse First Boston Mortgage Securities Corp., Series 05-11, Class 6A5
6.00%	12/01/35		11,312		11,407,911
Credit Suisse First Boston Mortgage Securities Corp., Series 05-4, Class 3A16
5.50%	06/25/36		12,815		12,842,966
Credit Suisse First Boston Mortgage Securities Corp., Series 05-5, Class 2A8
5.50%	07/25/35		8,846		8,841,621
Credit Suisse First Boston Mortgage Securities Corp., Series 4A1, Class 03-10
5.00%	05/25/18		10,910		10,554,430
Deutsche Mortgage Securities, Inc., Series 04-1, Class 2A1
4.75%	10/25/18		13,405		13,082,407
Federal Home Loan Mortgage Corp., Series 1220, Class A
5.72%(f)	02/15/22		316		315,846
Federal Home Loan Mortgage Corp., Series 1220, Class B (IO)
5.36%(g)	02/15/22		2,567		42,966
Federal Home Loan Mortgage Corp., Series 239, Class F29
5.60%(f)	08/15/36		75,740		75,807,487
Federal Home Loan Mortgage Corp., Series 239, Class F30
5.65%(f)	08/15/36		75,740		75,955,478
Federal Home Loan Mortgage Corp., Series 240, Class F22
5.70%(f)	07/15/36		91,553		90,832,654
Federal Home Loan Mortgage Corp., Series 2634, Class TH
4.50%	06/15/18		9,522		8,926,170
Federal Home Loan Mortgage Corp., Series 2743, Class HE
4.50%	02/15/19		8,890		8,382,722
Federal Home Loan Mortgage Corp., Series 2746, Class EG
4.50%	02/15/19		7,800		7,358,142
Federal Home Loan Mortgage Corp., Series 2798, Class JK
4.50%	05/15/19		10,482		9,871,265
Federal Home Loan Mortgage Corp., Series 2827, Class DG
4.50%	07/15/19		11,152		10,429,464
Federal Home Loan Mortgage Corp., Series 2899, Class KT
4.50%	12/15/19		7,962		7,413,219
Federal Home Loan Mortgage Corp., Series 2924, Class DB
4.50%	01/15/20		9,849		9,202,792
Federal Home Loan Mortgage Corp., Series 2948, Class KT
4.50%	03/15/20		6,561		6,094,208
Federal Home Loan Mortgage Corp., Series 2957, Class KN
5.50%	06/15/30		19,121		18,998,662
Federal Home Loan Mortgage Corp., Series 2958, Class MD
5.50%	01/15/31		15,000		14,918,361
Federal Home Loan Mortgage Corp., Series 2963, Class DL
5.50%	02/15/31		9,214		9,150,534
Federal Home Loan Mortgage Corp., Series 2987, Class HE
4.50%	06/15/20		7,800		7,304,961
Federal Home Loan Mortgage Corp., Series 2995, Class JK
4.50%	06/15/20		6,045		5,638,351
Federal Home Loan Mortgage Corp., Series 3042, Class EA
4.50%	09/15/35		20,899		18,977,120
Federal Home Loan Mortgage Corp., Series 3081, Class CP
5.50%	10/15/34		9,000		8,855,552
Federal Home Loan Mortgage Corp., Series 3136, Class PD
6.00%	12/15/34		9,000		9,103,819
Federal Home Loan Mortgage Corp., Series 3150, Class EK
5.00%	05/15/25		22,500		22,149,353
Federal Home Loan Mortgage Corp., Series 3192, Class GA
6.00%	03/15/27		21,313		21,522,943
Federal Home Loan Mortgage Corp., Series 3215, Class QH
6.00%	09/15/36		9,656		9,614,027
Federal Home Loan Mortgage Corp., Series 3218, Class BG
6.00%	09/15/36		9,740		9,864,537
Federal Home Loan Mortgage Corp., Series 3242, Class NC
5.75%	12/15/28		25,412		25,531,162
Federal Home Loan Mortgage Corp., Series R008, Class FK
5.75%(f)	07/15/23		73,431		73,758,905
Federal Home Loan Mortgage Corp., Series SF4, Class B
2.37%	12/15/09		2,888		2,831,658
Federal National Mortgage Assoc., Series 03-130, Class SP (IO)
1.65%(g)	08/25/28		4,131		92,404
Federal National Mortgage Assoc., Series 03-28, Class TB
5.00%	08/25/22		4,673		4,576,084
Federal National Mortgage Assoc., Series 03-41, Class YF
5.62%(f)	06/25/28		13,508		13,538,982
Federal National Mortgage Assoc., Series 04-29, Class FW
5.62%(f)	12/25/17		5,294		5,305,518
Federal National Mortgage Assoc., Series 04-61, Class TF
5.72%(f)	10/25/31		14,689		14,761,822
Federal National Mortgage Assoc., Series 05-103, Class AT
5.50%	06/25/24		16,430		16,408,134

49

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

GOVERNMENT INCOME PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
COLLATERALIZED MORTGAGE OBLIGATIONS (Continued)
Federal National Mortgage Assoc., Series 05-25, Class PD
5.50%	11/25/30	$	13,934	$	13,823,099
Federal National Mortgage Assoc., Series 05-36, Class CD
5.50%	11/25/31		18,300		18,241,568
Federal National Mortgage Assoc., Series 06-106, Class PA
5.50%	06/25/30		37,752		37,829,201
Federal National Mortgage Assoc., Series 2618, Class PT
4.50%	10/15/31		15,000		14,098,414
Federal National Mortgage Assoc., Series 273, Class 2 (IO)
7.00%(g)	08/01/26		195		41,140
Federal National Mortgage Assoc., Series 353, Class 2 (IO)
5.00%(g)	07/01/34		37,582		8,989,596
Federal National Mortgage Assoc., Series 370, Class 2 (IO)
6.00%(g)	05/25/36		24,841		5,135,982
General Motors Acceptance Corp. Mortgage Corp. Loan Trust, Series 03-J10, Class A1
4.75%	01/25/19		45,350		43,958,512
Government National Mortgage Assoc., Series 03-105, Class A
4.50%	11/16/27		22,296		21,985,414
J.P. Morgan Mortgage Trust, Series 05-A2, Class 4A1
5.21%(f)	04/01/35		20,714		20,312,718
Master Asset Securitization Trust, Series 03-4, Class 2A7
4.75%	05/25/18		8,227		8,026,068
Master Asset Securitization Trust, Series 03-5, Class 2A1
5.00%	06/25/18		10,492		10,288,006
Master Asset Securitization Trust, Series 03-7, Class 2A1
4.75%	08/25/18		14,439		14,092,846
Master Asset Securitization Trust, Series 04-8, Class 3A1
5.25%	08/25/19		1,084		1,066,264
Residential Asset Securitization Trust, Series 06-A10, Class A4
6.50%	09/25/36		17,456		17,746,006
Residential Funding Mortgage Securities I, Inc., Series 03-S8, Class A1
5.00%	05/25/18		15,265		14,945,018
Residential Funding Mortgage Securities I, Inc., Series 06-S1, Class 1A5
5.25%	01/01/36		9,500		9,423,612
Salomon Brothers Mortgage Securities VI, Series 87-1 (IO)
11.00%(g)	02/17/17		28		8,062
Salomon Brothers Mortgage Securities VI, Series 87-1 (PO)
11.50%(h)	02/17/17		28		24,067
Washington Mutual Mortgage Loan Trust, Series 03-S12, Class 3A
5.00%	11/25/18		896		882,079
Washington Mutual, Series 03-S3, Class 2A1
5.00%	05/25/18		10,108		9,985,602
Washington Mutual, Series 03-S5, Class 2A
5.00%	06/25/18		12,772		12,616,230
Washington Mutual, Series 03-S7, Class A1
4.50%	08/25/18		14,492		13,967,932
Washington Mutual, Series 03-S8, Class A2
5.00%	09/25/18		9,344		9,163,074
Washington Mutual, Series 04-AR12, Class A3
5.64%(f)	10/25/44		2,115		2,116,171
Wells Fargo Mortgage Backed Securities Trust, Series 04-8, Class A1
5.00%	08/25/19		1,037		1,012,426
Wells Fargo Mortgage Backed Securities Trust, Series 05-13, Class A1
5.00%	11/25/20		15,206		14,993,889
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $1,172,989,543)					1,171,278,209
COMMERCIAL MORTGAGE BACKED SECURITIES — 10.5%
Credit Suisse Mortgage Capital Certificates, Series 06-C3, Class A3
6.02%(f)	06/15/38		16,150		16,792,008
Federal National Mortgage Assoc., Series 98-M1 (IO)
0.99%(g)	02/25/13		18,324		232,842
Federal National Mortgage Assoc., Series 06-M2, Class A2A
5.27%	10/20/32		18,719		18,508,411
Government National Mortgage Assoc., Series 01-58, Class C
5.49%(f)	08/16/27		20,000		20,152,844
Government National Mortgage Assoc., Series 04-10 (IO)
0.97%(g)	01/16/44		57,138		2,468,407
Government National Mortgage Assoc., Series 04-77 (IO)
0.96%(g)	09/16/44		156,795		7,404,188
Government National Mortgage Assoc., Series 04-97, Class C
4.52%(f)	02/16/28		8,400		8,073,774
Government National Mortgage Assoc., Series 05-10, Class ZB
5.18%(f)	12/16/44		3,011		2,823,128
Government National Mortgage Assoc., Series 05-12, Class C
4.66%	12/16/30		20,000		19,348,024
Government National Mortgage Assoc., Series 05-29, Class Z
4.25%(f)	04/16/45		4,813		3,784,572
Government National Mortgage Assoc., Series 05-50 (IO)
1.05%(g)	06/16/45		34,400		2,202,688
Government National Mortgage Assoc., Series 05-59, Class ZA
4.96%(f)	03/16/46		9,209		8,235,016
Government National Mortgage Assoc., Series 05-67, Class Z
4.72%(f)	08/16/45		5,811		4,891,402

50

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

GOVERNMENT INCOME PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)			VALUE
COMMERCIAL MORTGAGE BACKED SECURITIES (Continued)
Government National Mortgage Assoc., Series 05-9 (IO)
0.77%(g)	01/16/45	$	135,073		$	7,049,657
Government National Mortgage Assoc., Series 05-9, Class Z
4.65%(f)	01/16/45		5,423			4,678,634
Government National Mortgage Assoc., Series 05-90 (IO)
0.91%(g)	11/16/45		134,333			7,230,092
Government National Mortgage Assoc., Series 06-15 (IO)
0.91%(g)	04/16/46		139,970			7,219,865
Government National Mortgage Assoc., Series 06-30 (IO)
0.80%(g)	05/16/46		50,746			2,849,860
Government National Mortgage Assoc., Series 06-5 (IO)
0.79%(g)	01/16/46		132,467			7,228,892
Greenwich Capital Commercial Funding Corp., Series 06-GG7, Class A4
6.11%(f)	06/10/16		8,500			8,897,037
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 06-CB15, Class A4
5.81%(f)	06/01/43		16,500			17,065,828
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 06-LDP7, Class A4
6.07%(f)	04/15/45		13,000			13,581,375
J.P. Morgan Mortgage Trust, Series 06-A2, Class 5A3
3.75%(f)	11/25/33		5,347			5,272,801
The Money Store Small Business Administration Loan Trust, Series 99-1, Class A
6.05%(f)	07/15/25		60			59,299
Structured Asset Receivables Trust, Series 03-2
5.72%(f)(i)(j)	01/21/09		1,007			1,006,740
TOTAL COMMERCIAL MORTGAGE BACKED SECURITIES
(Cost $198,650,703)						197,057,384
PROJECT LOANS — 2.0%
Government National Mortgage Assoc. I, Construction Loan Collateral
6.09%	10/15/08		31,513			33,277,008
Government National Mortgage Assoc. I, Construction Loan Commitment
6.09%	01/01/19		3,948			4,169,189
5.80%	04/15/20		98			101,383
TOTAL PROJECT LOANS
(Cost $36,375,056)						37,547,580
ASSET BACKED SECURITIES — 1.2%
Countrywide Home Equity Loan Trust, Series 04-K, Class 2A
5.62%(b)(f)	02/15/34		3,668			3,674,646
Federal National Mortgage Assoc. Grantor Trust, Series 04-T9, Class A1
5.46%(f)	04/25/35		7,916			7,922,797
Federal National Mortgage Assoc. Whole Loan, Series 96-W1, Class AL
7.25%	03/25/26		907			922,519
Option One Mortgage Loan Trust, Series 06-1, Class 2A1
5.42%(f)	01/25/36		5,243			5,244,186
Residential Asset Mortgage Products, Inc., Series 04-RS9, Class AII2
5.66%(f)	05/25/34		2,405			2,407,201
Wells Fargo Home Equity Trust, Series 04-2, Class A32
5.66%(f)	02/25/32		1,886			1,887,841
TOTAL ASSET BACKED SECURITIES
(Cost $22,043,881)						22,059,190
		PAR/SHARES (000)
SHORT TERM INVESTMENTS — 0.9%
Federal Farm Credit Bank, Discount Notes
5.14%(k)	01/08/07		2,500			2,497,501
Federal National Mortgage Assoc., Discount Notes
5.18%(k)	01/05/07		1,000			999,425
5.14%(k)	01/17/07		1,988			1,983,454
U.S. Treasury Bills
4.74%(c)(k)	01/04/07		2,000			1,999,210
Galileo Money Market Fund			7,862			7,862,221
TOTAL SHORT TERM INVESTMENTS
(Cost $15,341,811)						15,341,811
		NUMBER OF CONTRACTS
PUT SWAPTIONS PURCHASED — 0.0%
Credit Suisse First Boston, Strike Rate 5.265%, Expires 03/17/07			10,000	(l)		15,097
Credit Suisse First Boston, Strike Rate 5.625%, Expires 03/17/07			10,000	(l)		121,676
TOTAL PUT SWAPTIONS PURCHASED
(Cost $238,000)						136,773
TOTAL MARKET VALUE OF SECURITIES BEFORE AFFILIATED INVESTMENTS — 203.2%
(Cost $3,831,509,862)						3,816,742,532
		PAR (000)
AFFILIATED INVESTMENTS - LONG TERM — 0.0%
Federal Housing Authority, Merrill Lynch Project, Pool 42 7.43%
(Cost $648)	09/01/22	$	1			629
TOTAL INVESTMENTS IN SECURITIES — 203.2%
(Cost $3,831,510,510(a))						3,816,743,161

51

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

GOVERNMENT INCOME PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)			VALUE
MORTGAGE PASS-THROUGH TBA SALE COMMITMENTS —(17.9)%
Federal National Mortgage Assoc. 15 Year TBA
6.00%	01/01/22	$	(196,300	)	$	(198,999,125	)
Federal National Mortgage Assoc. 30 Year TBA
5.00%	01/01/37		(77,000	)		(74,329,024	)
6.00%	01/01/37		(21,400	)		(21,540,427	)
6.50%	01/01/37		(41,000	)		(41,768,750	)
TOTAL MORTGAGE PASS-THROUGH TBA SALE COMMITMENTS
(Premiums received $337,494,305)						(336,637,326	)
		NUMBER OF CONTRACTS
CALL SWAPTIONS WRITTEN — (0.1)%
Barclays Capital, Strike Rate 5.140%, Expires 04/21/08			(610	)(l)		(137,066	)
Goldman Sachs & Co., Strike Rate 5.350%, Expires 09/11/07			(2,550	)(l)		(636,088	)
TOTAL CALL SWAPTIONS WRITTEN
(Premiums received $827,570)						(773,154	)
PUT SWAPTIONS WRITTEN — 0.0%
Barclays Capital, Strike Rate 5.140%, Expires 04/21/08			(610	)(l)		(164,822	)
Credit Suisse First Boston, Strike Rate 5.445%, Expires 03/17/08			(20,000	)(l)		(99,032	)
Goldman Sachs & Co., Strike Rate 5.350%, Expires 09/11/07			(2,550	)(l)		(309,469	)
TOTAL PUT SWAPTIONS WRITTEN
(Premiums received $1,032,570)						(573,323	)
LIABILITIES IN EXCESS OF OTHER ASSETS — (85.2)%
(including $1,528,130,136 of payable for investments purchased)						(1,599,985,183	)
NET ASSETS — 100.0%						$1,878,774,175

(a) Cost for federal income tax purposes is $3,831,831,813. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	7,055,697
Gross unrealized depreciation		(22,144,349	)
	$	(15,088,652	)

(b) Security, or a portion thereof, pledged as collateral with a value of $2,040,689 on 2,307 short U.S. Treasury Note futures contracts, 5,603 long U.S. Treasury Note futures contracts and 40 short U.S. Treasury Bond futures contracts expiring March 2007. The value of such contracts on December 31, 2006 was $1,076,888,742, with an unrealized loss of $5,876,850 (including commissions of $18,305).

(c) Security, or a portion thereof, with a market value of $1,469,812 have been pledged as collateral for swap and swaption contracts.

(d) Security, or a portion thereof, subject to financing transactions.

(e) Par held at end of period is less than 500.

(f) Variable rate security. Rates shown are the rates as of December 31, 2006.

(g) Rates shown are the effective yields as of December 31, 2006.

(h) Interest rate of underlying collateral.

(i) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. As of December 31, 2006, the Portfolio held 0.1% of its net assets, with a current market value of $1,006,740, in securities restricted as to resale.

(j) Security is illiquid. As of December 31, 2006, the Portfolio held 0.1% of its net assets, with a current market value of $1,006,740 in these securities.

(k) The rate shown is the effective yield at the time of purchase.

(l) Each swaption contract is equivalent to $10,000 notional amount.

52

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INFLATION PROTECTED BOND PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)			VALUE
U.S. GOVERNMENT & AGENCY OBLIGATIONS — 93.3%
U.S. Treasury Inflation Protected Bonds
2.38%	01/15/25	$	10,135		$	10,801,830
2.00%	01/15/26		370			353,781
3.62%	04/15/28		7,879			11,868,572
3.88%(b)	04/15/29		1,925			2,975,592
3.38%	04/15/32		1,500			2,059,919
U.S. Treasury Inflation Protected Notes
0.88%	04/15/10		6,420			6,483,056
2.38%	04/15/11		12,140			12,292,839
3.38%	01/15/12		1,891			2,243,594
3.00%	07/15/12		4,060			4,689,142
1.88%	07/13-07/15		12,020			12,591,372
2.00%	01/14-01/16		14,910			15,519,415
1.62%	01/15/15		4,500			4,476,209
2.50%	07/15/16		10,671			10,743,263
U.S. Treasury Notes
4.62%	11/30/08		3,290			3,278,047
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost $99,759,629)						100,376,631
MORTGAGE PASS-THROUGHS — 1.0%
Federal National Mortgage Assoc. ARM
4.37%(c)	06/01/34		372			367,108
4.64%(c)	02/01/35		701			693,855
TOTAL MORTGAGE PASS-THROUGHS
(Cost $1,076,580)						1,060,963
ASSET BACKED SECURITIES — 0.2%
Morgan Stanley Capital I, Series 06-NC4, Class A2A
5.38%(c)
(Cost $280,178)	06/25/36		280			280,316
CORPORATE BONDS — 2.9%
Finance — 2.3%
Student Loan Marketing Corp., Senior Unsecured Notes
4.94%(c)	04/01/09		2,500			2,430,775
Yankee — 0.6%
United Mexican States (Mexico), Senior Unsecured Notes
6.75%(d)	09/27/34		50			54,000
VTB Capital SA (Luxembourg), Unsecured Notes
5.97%(c)(d)	08/01/08		650			651,333
						705,333
TOTAL CORPORATE BONDS
(Cost $3,202,925)						3,136,108
FOREIGN BONDS — 1.2%
Bundesrepublic Deutschland (EUR)
4.00%	07/04/16		220			291,252
France Government, Treasury Inflation Protected Bonds (EUR)
2.25%	07/25/20		715			1,054,971
TOTAL FOREIGN BONDS
(Cost $1,365,332)						1,346,223
		NUMBER OF SHARES
SHORT TERM INVESTMENTS — 0.6%
Galileo Money Market Fund
(Cost $604,268)			604,268			604,268
		NUMBER OF CONTRACTS
CALL OPTIONS PURCHASED — 0.1%
June Eurodollar futures, Strike Price $94.75, Expires 06/18/07			262			85,150
June Eurodollar futures, Strike Price $95.25, Expires 06/18/07			64			4,800
TOTAL CALL OPTIONS PURCHASED
(Cost $82,265)						89,950
PUT SWAPTIONS PURCHASED — 0.0%
Barclays Capital, Strike Rate 5.250%, Expires 02/07/07			480	(e)		25,614
Barclays Capital, Strike Rate 5.400%, Expires 03/12/07			520	(e)		3,412
Barclays Capital, Strike Rate 5.650%, Expires 02/07/07			480	(e)		911
Barclays Capital, Strike Rate 5.900%, Expires 03/12/07			520	(e)		102
TOTAL PUT SWAPTIONS PURCHASED
(Cost $48,720)						30,039
TOTAL INVESTMENTS IN SECURITIES — 99.3%
(Cost $106,419,897(a))						106,924,498
CALL SWAPTIONS WRITTEN — 0.0%
Deutsche Bank, Strike Rate 5.400%, Expires 06/15/07			(110	)(e)		(26,716	)
Union Bank, Strike Rate 4.730%, Expires 06/13/07			(140	)(e)		(4,718	)
TOTAL CALL SWAPTIONS WRITTEN
(Premiums received $71,634)						(31,434	)
PUT SWAPTIONS WRITTEN — (0.1)%
Barclays Capital, Strike Rate 5.450%, Expires 02/07/07			(960	)(e)		(11,573	)
Barclays Capital, Strike Rate 5.650%, Expires 03/12/07			(1,040	)(e)		(1,518	)
Deutsche Bank, Strike Rate 5.800%, Expires 06/15/07			(110	)(e)		(1,585	)
Union Bank, Strike Rate 4.730%, Expires 06/13/07			(140	)(e)		(52,850	)
TOTAL PUT SWAPTIONS WRITTEN
(Premiums received $103,862)						(67,526	)
OTHER ASSETS IN EXCESS OF LIABILITIES — 0.8%						808,558
NET ASSETS — 100.0%					$	107,634,096

53

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INFLATION PROTECTED BOND PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED)

(PERCENTAGE OF NET ASSETS)

(a) Cost for federal income tax purposes is $106,626,769. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	1,735,731
Gross unrealized depreciation		(1,438,002	)
	$	297,729

(b) Security, or a portion thereof, pledged as collateral with a value of $618,446 on 210 short U.S. Treasury Note futures contracts, 16 long U.S. Treasury Note futures contracts, 17 short U.S. Treasury Bond futures contracts and 12 short Euro-Bund futures contracts expiring March 2007, 80 long Euro-dollar futures contracts expiring June 2007 and 8 long Euro-dollar futures contracts expiring March 2008. The value of such contracts on December 31, 2006 was $50,003,925, with an unrealized gain of $237,573 (including commissions of $833).

(c) Variable rate security. Rates shown are the rates as of December 31, 2006.

(d) Security is a foreign domiciled issuer which is registered with the Securities and Exchange Commission.

(e) Each swaption contract is equivalent to $10,000 notional amount.

54

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

GNMA PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MORTGAGE PASS-THROUGHS — 120.1%
Federal Home Loan Mortgage Corp. Gold
5.50%	06/13-02/18	$	476	$	477,085
6.00%	11/13-01/19		248		251,089
6.50%	12/13-01/30		280		286,994
8.00%	07/01/17		32		33,850
9.00%	12/01/19		1		624
7.50%	02/27-03/27		7		7,465
4.50%	10/01/35		196		183,936
Federal National Mortgage Assoc.
6.00%	09/12-09/21		509		515,505
6.50%	02/13-04/35		1,204		1,233,405
8.00%	08/01/14		67		68,983
4.00%	07/01/18		124		116,811
4.50%	08/20-10/21		1,894		1,827,032
5.00%	10/20-07/36		4,714		4,640,286
5.50%	01/22-04/35		10,114		10,010,398
8.50%	10/01/24		4		4,378
Federal National Mortgage Assoc. 15 Year TBA
6.00%	01/01/22		3,800		3,852,250
Federal National Mortgage Assoc. 30 Year TBA
4.50%	01/01/37		1,300		1,217,938
5.50%	01/01/37		100		98,812
6.00%	01/01/37		3,100		3,120,342
Federal National Mortgage Assoc. ARM
5.38%(b)	04/01/36		669		672,146
Government National Mortgage Assoc. I
8.00%	12/07-07/17		211		222,223
5.50%	11/08-01/36		4,952		4,957,216
6.50%(c)	03/16-11/34		5,090		5,218,952
7.00%	09/17-05/32		1,030		1,064,319
9.00%	05/18-06/21		159		171,157
10.00%	12/15/20		3		3,551
7.50%	01/26-11/29		367		383,189
6.00%	01/28-12/36		15,104		15,325,410
4.50%	12/34-01/35		4,696		4,436,698
5.00%	05/36-06/36		4,462		4,338,905
Government National Mortgage Assoc. I 30 Year TBA
5.50%	01/01/37		40,500		40,297,500
6.00%	01/01/37		21,000		21,236,250
Government National Mortgage Assoc. II
7.00%	03/24-05/27		361		371,604
8.00%	08/20/24		162		170,827
7.50%	10/20/25		29		30,151
6.00%	02/29-05/36		19,486		19,712,691
5.50%	05/20/34		8,194		8,139,210
6.50%	10/20/34		11,195		11,443,211
5.00%	11/20/35		5,650		5,472,746
Government National Mortgage Assoc. II 30 Year TBA
5.00%	01/01/37		25,700		24,920,982
5.50%	01/01/37		12,000		11,910,000
Government National Mortgage Assoc. II ARM
3.50%(b)	07/20/34		7,287		7,086,336
TOTAL MORTGAGE PASS-THROUGHS
(Cost $216,758,465)					215,532,457
COLLATERALIZED MORTGAGE OBLIGATIONS — 1.1%
Countrywide Home Loans, Series 04-J4, Class 2A1
5.00%	05/25/19		567		557,460
Credit Suisse First Boston Mortgage Securities Corp., Series 04-7, Class 6A1
5.25%	10/25/19		449		444,617
Federal National Mortgage Assoc., Series 03-130, Class SP (IO)
1.65%(d)	08/25/28		4,678		104,637
Master Asset Securitization Trust, Series 04-8, Class 3A1
5.25%	08/25/19		300		294,791
Washington Mutual Mortgage Loan Trust, Series 03-S12, Class 3A
5.00%	11/25/18		250		245,913
Wells Fargo Mortgage Backed Securities Trust, Series 04-8, Class A1
5.00%	08/25/19		287		280,033
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $1,952,398)					1,927,451
COMMERCIAL MORTGAGE BACKED SECURITIES — 1.7%
J.P. Morgan Mortgage Trust, Series 06-A2, Class 5A3
3.75%(b)	11/25/33		1,672		1,648,867
The Money Store Small Business Administration Loan Trust, Series 99-1, Class A
6.05%(b)	07/15/25		179		177,898
Structured Asset Receivables Trust, Series 03-2
5.72%(b)(e)(f)	01/21/09		1,288		1,287,307
TOTAL COMMERCIAL MORTGAGE BACKED SECURITIES
(Cost $3,092,463)					3,114,072
ASSET BACKED SECURITIES — 1.5%
Option One Mortgage Loan Trust, Series 06-1, Class 2A1 5.42%(b)
(Cost $2,675,179)	01/25/36		2,675		2,675,605

55

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

GNMA PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED ) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR/SHARES (000)			VALUE
SHORT TERM INVESTMENTS — 35.0%
Federal Home Loan Bank, Discount Notes
4.80%(g)	01/02/07	$	1,000		$	999,867
5.16%(g)	01/12/07		45,000			44,929,118
U.S. Treasury Bills
5.08%(g)	01/11/07		9,000			8,987,287
Galileo Money Market Fund			7,857			7,856,763
TOTAL SHORT TERM INVESTMENTS
(Cost $62,773,035)						62,773,035
TOTAL MARKET VALUE OF SECURITIES BEFORE AFFILIATED INVESTMENTS — 159.4%
(Cost $287,251,540)						286,022,620
AFFILIATED INVESTMENTS—LONG TERM — 0.0%
Federal Housing Authority, Merrill Lynch Project, Pool 42 7.43%
(Cost $3,320)	09/01/22		3			3,287
TOTAL INVESTMENTS IN SECURITIES — 159.4%
(Cost $287,254,860(a))						286,025,907
		PAR (000)
MORTGAGE PASS-THROUGH TBA SALE COMMITMENTS — (10.3)%
Federal National Mortgage Assoc. 15 Year TBA
5.00%	01/01/22		(4,500	)		(4,422,654	)
6.00%	01/01/22		(3,100	)		(3,142,625	)
Federal National Mortgage Assoc. 30 Year TBA
5.00%	01/01/37		(100	)		(96,531	)
5.50%	01/01/37		(10,000	)		(9,881,250	)
6.50%	01/01/37		(1,000	)		(1,018,750	)
TOTAL MORTGAGE PASS-THROUGH TBA SALE COMMITMENTS
(Premiums received $18,652,168)						(18,561,810	)
		NUMBER OF CONTRACTS
CALL SWAPTIONS WRITTEN — (0.1)%
Barclays Capital, Strike Rate 5.140%, Expires 04/21/08			(300	)(h)		(67,410	)
Goldman Sachs & Co., Strike Rate 5.350%, Expires 09/11/07			(740	)(h)		(184,590	)
TOTAL CALL SWAPTIONS WRITTEN
(Premiums received $293,900)						(252,000	)
PUT SWAPTIONS WRITTEN — (0.1)%
Barclays Capital, Strike Rate 5.140%, Expires 04/21/08			(300	)(h)		(81,060	)
Goldman Sachs & Co., Strike Rate 5.350%, Expires 09/11/07			(740	)(h)		(89,806	)
TOTAL PUT SWAPTIONS WRITTEN
(Premiums received $293,900)						(170,866	)
LIABILITIES IN EXCESS OF OTHER ASSETS — (48.9)%
(including $88,658,989 of payable for investments purchased)						(87,664,846	)
NET ASSETS — 100.0%						$ 179,376,385

(a) Cost for federal income tax purposes is $287,273,619. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	648,400
Gross unrealized depreciation		(1,896,112	)
	$	(1,247,712	)

(b) Variable rate security. Rates shown are the rates as of December 31, 2006.

(c) Security, or a portion thereof, pledged as collateral with a value of $704,262 on 425 short U.S. Treasury Note futures contracts expiring March 2007. The value of such contracts on December 31, 2006 was $44,921,063, with an unrealized gain of $429,325 (including commissions of $1,254).

(d) Rates shown are the effective yields as of December 31, 2006.

(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. As of December 31, 2006, the Portfolio held 0.7% of its net assets, with a current market value of $1,287,307, in securities restricted as to resale.

(f) Security is illiquid. As of December 31, 2006, the Portfolio held 0.7% of its net assets, with a current market value of $1,287,307 in these securities.

(g) The rate shown is the effective yield at the time of purchase.

(h) Each swaption contract is equivalent to $10,000 notional amount.

56

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

MANAGED INCOME PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
U.S. GOVERNMENT & AGENCY OBLIGATIONS — 11.9%
Federal Home Loan Mortgage Corp., Unsecured Notes
3.00%	04/19/07	$	5,900	$	5,862,842
Federal National Mortgage Assoc., Unsecured Notes
2.35%	04/05/07		7,880		7,823,761
4.00%	01/26/09		6,520		6,390,389
Overseas Private Investment Co.
4.09%	05/29/12		483		462,843
4.30%	05/29/12		1,351		1,280,909
4.64%	05/29/12		1,011		972,318
4.68%	05/29/12		572		532,445
4.87%	05/29/12		4,325		4,196,737
5.40%	05/29/12		5,363		5,482,560
Resolution Funding Corp., Strip Bonds
6.29%(b)	07/15/18		1,725		974,580
6.30%(b)	10/15/18		1,725		961,864
Small Business Administration Participation Certificates, Series 96-20B, Class 1
6.38%	02/01/16		1,734		1,774,655
Small Business Administration Participation Certificates, Series 96-20K, Class 1
6.95%	11/01/16		2,391		2,474,049
Small Business Administration Participation Certificates, Series 97, Class A
6.10%(c)(d)	08/15/22		488		483,783
Small Business Administration Participation Certificates, Series 97-20B, Class 1
7.10%	02/01/17		2,110		2,187,406
Small Business Administration Participation Certificates, Series 97-20F, Class 1
7.20%	06/01/17		538		559,654
Small Business Administration Participation Certificates, Series 97-20G, Class 1
6.85%	07/01/17		3,880		4,010,433
U.S. Treasury Bonds
6.00%	02/15/26		4,280		4,854,124
4.50%	02/15/36		4,625		4,398,088
U.S. Treasury Inflation Protected Bonds
2.00%	01/15/26		8,080		7,725,817
U.S. Treasury Inflation Protected Notes
2.50%	07/15/16		4,810		4,842,573
U.S. Treasury Notes
4.88%	08/15/16		6,100		6,172,913
4.62%(e)	11/15/16		12,795		12,711,039
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost $87,025,418)					87,135,782
MORTGAGE PASS-THROUGHS — 36.0%
Federal Home Loan Mortgage Corp. ARM
4.36%(d)	01/01/35		6,637		6,537,085
5.96%(d)	12/01/36		3,650		3,652,519
Federal Home Loan Mortgage Corp. Gold
6.50%	03/09-12/30		631		644,397
4.00%	05/01/10		1,708		1,653,959
6.00%	11/14-02/32		1,283		1,300,759
5.50%	10/01/17		875		876,693
4.50%	05/18-08/20		10,512		10,159,268
5.00%	12/18-04/36		2,853		2,790,243
7.50%	11/25-10/27		21		21,971
7.00%	04/29-04/32		49		50,372
Federal Home Loan Mortgage Corp. Gold 15 Year TBA
5.00%	01/01/22		7,600		7,464,629
Federal Home Loan Mortgage Corp. Gold 30 Year TBA
6.00%	01/01/37		10,000		10,071,880
Federal National Mortgage Assoc.
7.00%	08/08-09/34		1,727		1,777,353
6.50%	02/11-09/36		10,056		10,258,324
5.50%	09/13-12/35		47,772		47,437,070
5.00%	01/18-07/35		18,667		18,391,297
4.00%	05/01/19		4,761		4,487,246
4.50%	06/19-04/21		7,291		7,035,126
6.00%	08/21-04/35		21,692		21,975,533
Federal National Mortgage Assoc. 15 Year TBA
5.50%	01/01/22		36,400		36,388,643
6.00%	01/01/22		7,900		8,008,625
Federal National Mortgage Assoc. 30 Year TBA
4.50%	01/01/37		9,000		8,431,875
5.00%	01/01/37		12,000		11,583,744
6.00%	01/01/37		25,000		25,159,682
6.50%	01/01/37		5,000		5,093,750
Federal National Mortgage Assoc. ARM
4.28%(d)	12/01/34		6,049		5,942,276
Government National Mortgage Assoc. I
9.50%	09/16-11/16		16		17,612
9.00%	03/15/18		13		13,591
6.50%	12/23-10/34		761		782,688
6.00%	11/28-10/33		439		446,065
5.50%	11/15/33		40		40,141
Government National Mortgage Assoc. I 30 Year TBA
6.00%	01/01/37		5,000		5,056,250
TOTAL MORTGAGE PASS-THROUGHS
(Cost $264,711,251)					263,550,666
COLLATERALIZED MORTGAGE OBLIGATIONS — 7.0%
Federal Home Loan Mortgage Corp., Series 231 (IO)
5.50%(b)	08/01/35		3,970		924,191
Federal Home Loan Mortgage Corp., Series 2587, Class WX
5.00%	03/15/18		2,370		2,302,571
Federal Home Loan Mortgage Corp., Series 2825, Class VP
5.50%	06/15/15		3,369		3,386,150
Federal Home Loan Mortgage Corp., Series 2933, Class HD
5.50%	02/15/35		3,542		3,555,337
Federal Home Loan Mortgage Corp., Series 3033, Class JB
5.50%	11/15/32		3,143		3,160,418

57

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

MANAGED INCOME PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
COLLATERALIZED MORTGAGE OBLIGATIONS (Continued)
Federal National Mortgage Assoc., Series 03-118, Class FD
5.72%(d)	12/25/33	$	4,754	$	4,732,038
Federal National Mortgage Assoc., Series 04-82, Class HJ
5.50%	09/25/32		9,918		9,892,080
Federal National Mortgage Assoc., Series 05-48, Class AR
5.50%	02/25/35		5,576		5,589,874
Federal National Mortgage Assoc., Series 346, Class 2 (IO)
5.50%(b)	12/01/33		4,257		975,579
Federal National Mortgage Assoc., Series 354, Class 2 (IO)
5.50%(b)	11/01/34		3,383		780,571
Federal National Mortgage Assoc., Series 367, Class 2 (IO)
5.50%(b)	01/25/36		6,961		1,640,196
Federal National Mortgage Assoc., Series 378, Class 19 (IO)
5.00%(b)	06/01/35		8,577		1,858,745
J.P. Morgan Alternative Loan Trust, Series 05-S1, Class 2A16
6.00%	12/25/35		2,430		2,441,211
Lehman Brothers-UBS Commercial Mortgage Trust, Series 00-C4, Class A2
7.37%	08/15/26		5,680		6,015,109
Opteum Mortgage Acceptance Corp., Series 06-2, Class A1A
5.41%(d)	07/25/36		4,081		4,079,396
Summit Mortgage Trust, Series 00-1, Class B1
6.57%(c)(d)(f)	12/28/12		99		99,357
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $52,223,001)					51,432,823
COMMERCIAL MORTGAGE BACKED SECURITIES — 16.1%
Banc of America Commercial Mortgage, Inc., Series 01-1, Class A2
6.50%	04/15/36		3,835		3,980,383
Banc of America Commercial Mortgage, Inc., Series 02-PB2, Class A4
6.19%	06/11/35		3,670		3,816,742
Bear Stearns Commercial Mortgage Securities, Inc., Series 00-WF2, Class A2
7.32%	10/15/32		4,590		4,874,675
Bear Stearns Commercial Mortgage Securities, Inc., Series 04-PWR6, Class A6
4.82%	11/11/41		1,315		1,272,800
Commercial Mortgage Acceptance Corp., Series 98-C2, Class A2
6.03%	03/15/08		2,270		2,278,481
Credit Suisse First Boston Mortgage Securities Corp., Series 98-C2, Class A2
6.30%	11/11/30		7,322		7,422,359
Credit Suisse First Boston Mortgage Securities Corp., Series 02-CKS4, Class A2
5.18%	08/15/12		4,575		4,552,439
Credit Suisse First Boston Mortgage Securities Corp., Series 02-CP5, Class A2
4.94%	12/15/35		4,865		4,780,401
Donaldson, Lufkin & Jenrette, Inc., Commerical Mortgage Corp., Series 98-CF1, Class A1B
6.41%	02/18/31		6,402		6,441,995
Donaldson, Lufkin & Jenrette, Inc., Commerical Mortgage Corp., Series 00-CKP1, Class A1B
7.18%	11/10/33		4,137		4,363,488
Federal National Mortgage Assoc., Series 06-M2, Class A2A
5.27%	10/20/32		7,525		7,440,344
First Union National Bank Commercial Mortgage Trust, Series 01-C2, Class A2
6.66%	01/12/43		4,090		4,291,058
General Electric Capital Commercial Mortgage Corp., Series 02-1A, Class A3
6.27%	12/10/35		3,800		3,970,172
General Electric Capital Commercial Mortgage Corp., Series 02-2A, Class A3
5.35%	08/11/36		4,240		4,259,908
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 99-C3, Class A2
7.18%	08/15/36		3,068		3,177,824
Goldman Sachs Mortgage Securities Corp. II, Series 98-C1, Class A3
6.14%	10/18/30		4,717		4,752,061
Goldman Sachs Mortgage Securities Corp. II, Series 04-GG2, Class A4
4.96%	08/10/38		3,500		3,462,901
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 01, Class A3
6.43%	06/15/11		3,320		3,467,643
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 01-C1, Class A3
5.86%	10/12/35		3,840		3,930,928
Lehman Brothers-UBS Commercial Mortgage Trust, Series 06-C6, Class A4
5.37%	09/15/39		3,930		3,937,467
Lehman Brothers-UBS Commerical Mortgage Trust, Series 03-C7, Class A2
4.06%(d)	09/15/27		2,480		2,413,829
Morgan Stanley Capital Investments, Series 98-HF2, Class A2
6.48%	11/15/30		3,588		3,629,621
Morgan Stanley Dean Witter Capital, Series 00-LIF2, Class A2
7.20%	09/15/10		4,160		4,366,629
Salomon Brothers Mortgage Securities VII, Series 00-C1, Class A2
7.52%	12/18/09		5,565		5,853,848
Structured Asset Receivables Trust, Series 03-2
5.72%(c)(d)(g)	01/21/09		3,038		3,036,724

58

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

MANAGED INCOME PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET A SSETS)	MATURITY	PAR (000)		VALUE
COMMERCIAL MORTGAGE BACKED SECURITIES (Continued)
TIAA Real Estate Collaterallized Debt Obligation Ltd., Series 01-C1A, Class A4
6.68%(c)	06/19/31	$	5,330	$	5,488,997
USGI, Series 87
7.43%	12/01/22		109		109,616
Wachovia Bank Commercial Mortgage Trust, Series 03, Class C6
5.12%	08/15/35		4,470		4,427,852
Washington Mutual Asset Securities Corp., Series 05-C1A, Class X (IO)
2.17%(b)(c)	05/25/36		43,848		2,318,276
TOTAL COMMERCIAL MORTGAGE BACKED SECURITIES
(Cost $120,700,848)					118,119,461
PROJECT LOANS — 2.5%
Whittier Rehab at Haverhill Project Loan
7.60%	12/01/39		10,766		10,942,594
Whittier Rehab at Westborough Project Loan
8.12%	02/28/37		6,871		6,933,192
TOTAL PROJECT LOANS
(Cost $17,369,827)					17,875,786
CERTIFICATE OF DEPOSIT — 1.4%
Barclays Bank PLC (United Kingdom)
5.37%(d)	03/13/09		9,180		9,183,213
SunTrust Bank, Inc.
4.42%	06/15/09		1,260		1,242,335
TOTAL CERTIFICATE OF DEPOSIT
(Cost $10,440,000)					10,425,548
ASSET BACKED SECURITIES — 19.4%
Aames Mortgage Investment Trust, Series 06-1, Class A1
5.41%(d)	04/25/36		2,956		2,956,555
American Express Credit Account Master Trust, Series 05-3, Class A
5.35%(d)	01/18/11		5,525		5,516,135
American Express Credit Account Master Trust, Series 05-5, Class A
5.39%(d)	02/15/13		5,350		5,352,037
Ameriquest Mortgage Securities, Inc., Series 04-R11, Class A1
5.65%(d)	11/25/34		3,742		3,752,228
Bear Stearns, Inc., Series 06-HE1, Class 1A1
5.44%(d)	01/25/30		2,909		2,909,952
Capital Auto Receivables Asset Trust, Series 06-SN1A, Class A2A
5.40%(c)	01/20/09		9,175		9,177,385
Carrington Mortgage Loan Trust, Series 06-NC4, Class A1
5.37%(d)	10/25/36		5,157		5,156,658
Chase Issuance Trust, Series 04-A9, Class A9
3.22%	06/15/10		5,675		5,586,959
Citibank Credit Card Issuance Trust, Series 00, Class A3
6.88%	11/16/09		6,275		6,360,016
Citibank Credit Card Issuance Trust, Series 04, Class A1
2.55%	01/20/09		9,150		9,137,159
Countrywide Certificates, Series 04-14, Class A4
5.63%(d)	06/25/35		1,214		1,216,565
Countrywide Certificates, Series 05-16, Class 4AV1
5.45%(d)	07/25/26		2,694		2,694,762
Countrywide Certificates, Series 05-IM2, Class A1
5.43%(d)	06/25/27		72		71,972
Countrywide Certificates, Series 06-18, Class 2A1
5.37%(d)	07/25/36		7,811		7,810,780
DaimlerChrysler Auto Trust, Series 06-A, Class A3
5.00%	05/08/10		5,200		5,186,565
DaimlerChrysler Auto Trust, Series 06-B, Class A2
5.30%	10/08/08		4,231		4,230,428
DaimlerChrysler Auto Trust, Series 06-D, Class A4
4.94%	02/08/12		5,450		5,420,752
Discover Card Master Trust I, Series 05-1, Class A
5.36%(d)	09/16/10		4,425		4,427,509
Fieldstone Mortgage Investment Corp., Series 06-1, Class A1
5.40%(d)	05/25/36		3,669		3,669,195
Ford Credit Auto Owner Trust, Series 05-A, Class A3
3.48%	11/15/08		4,051		4,025,630
Ford Credit Auto Owner Trust, Series 05-C, Class A3
4.30%	08/15/09		5,325		5,278,124
Green Tree Financial Corp., Series 96-7, Class A6
7.65%	10/15/27		2,990		3,090,276
IndyMac Residential Trust, Series 06-D, Class 2A1
5.37%(d)	11/25/36		4,166		4,166,477
MBNA Credit Card Master Notes Trust, Series 04-A4, Class A4
2.70%	09/15/09		7,200		7,148,161
MBNA Credit Card Master Notes Trust, Series 06, Class A1
4.90%	02/15/09		5,175		5,158,588
Morgan Stanley Home Equity Loans, Series 06-2, Class A1
5.42%(d)	02/25/36		2,982		2,981,872
Residential Asset Mortgage Products, Inc., Series 06-RS4, Class A1
5.43%(d)	07/25/36		5,024		5,024,214
Residential Asset Mortgage Products, Inc., Series 06-RS5, Class A1
5.39%(d)	09/25/36		3,616		3,616,103
Structured Asset Investment Loan Trust, Series 06-2, Class A1
5.41%(d)	04/25/36		1,534		1,534,351
USAA Auto Owner Trust, Series 06-4, Class A4
4.98%	10/15/12		4,825		4,809,996
Wachovia Auto Owner Trust, Series 06-A, Class A2
5.41%	04/20/09		5,000		5,001,695
TOTAL ASSET BACKED SECURITIES
(Cost $142,855,802)					142,469,099

59

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

MANAGED INCOME PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
CORPORATE BONDS — 19.5%
Aerospace — 0.1%
Raytheon Co., Senior Unsecured Notes
4.50%	11/15/07	$	383	$	379,967
Banks — 7.2%
Bank of America Corp. Capital Trust XI, Capital Securities
6.62%	05/23/36		570		615,135
Bank of America Corp., Senior Unsecured Notes
4.50%	08/01/10		130		127,094
Bank of America Corp., Subordinated Notes
7.80%	02/15/10		1,190		1,277,848
Bank of New York Co., Inc., Senior Notes
3.75%	02/15/08		1,350		1,326,271
BankBoston N.A., Subordinated Notes
7.00%	09/15/07		1,500		1,512,255
Citigroup, Inc., Senior Unsecured Notes
6.20%	03/15/09		1,200		1,223,527
Citigroup, Inc., Subordinated Notes
6.12%	08/25/36		700		728,909
Citigroup, Inc., Unsecured Notes
3.62%(h)	02/09/09		3,655		3,546,918
4.12%	02/22/10		3,900		3,783,187
Depfa Bank PLC, Senior Notes
4.25%(c)	08/16/10		2,150		2,090,204
Deutsche Bank AG, Deposit Notes
5.34%(d)	03/15/07		1,600		1,599,952
HBOS Treasury Services PLC (United Kingdom), Senior Unsecured Notes
3.60%(c)	08/15/07		855		845,617
HBOS Treasury Services PLC (United Kingdom), Unsecured Notes
3.50%(c)	11/30/07		1,630		1,603,271
HSBC Bank USA, Subordinated Notes
3.87%	06/07/07		4,875		4,843,810
J.P. Morgan Chase & Co., Senior Notes
2.62%	06/30/08		835		802,964
J.P. Morgan Chase & Co., Senior Unsecured Notes
5.25%	05/30/07		2,380		2,379,091
Lloyds TSB Bank PLC, Subordinated Notes
6.90%(i)			2,000		2,020,000
Rabobank Nederland (Netherlands), Senior Notes
5.37%(c)(d)	04/06/09		12,170		12,173,043
SunTrust Bank, Inc., Senior Unsecured Notes
3.62%	10/15/07		1,540		1,519,233
U.S. Bancorp, Senior Unsecured Notes
3.95%	08/23/07		335		332,067
U.S. Bank N.A., Senior Bank Notes
2.87%	02/01/07		1,040		1,037,878
2.40%	03/12/07		1,580		1,570,237
U.S. Bank N.A., Subordinated Notes
6.50%	02/01/08		2,420		2,441,468
Wachovia Bank N.A., Senior Bank Notes
4.38%	08/15/08		95		93,646
Wells Fargo & Co., Senior Unsecured Notes
4.20%	01/15/10		580		565,034
Wells Fargo & Co., Unsecured Notes
4.62%	08/09/10		2,115		2,075,543
4.88%	01/12/11		705		697,999
					52,832,201
Broadcasting — 0.2%
BSKYB Finance PLC (United Kingdom), Senior Unsecured Notes
6.50%(c)	10/15/35		120		118,675
News America Holdings, Inc., Senior Debentures
7.12%	04/08/28		300		316,539
7.62%	11/30/28		1,150		1,289,561
					1,724,775
Energy & Utilities — 0.2%
Florida Power & Light Co., First Mortgage Bonds
4.95%	06/01/35		600		533,553
Florida Power Corp., First Mortgage Bonds
6.65%	07/15/11		960		1,006,281
5.90%	03/01/33		175		175,798
					1,715,632
Entertainment & Leisure — 0.6%
Comcast Cable Holdings LLC, Senior Debentures
7.88%	02/15/26		790		902,158
Comcast Cable Holdings LLC, Senior Notes
7.12%	02/15/28		620		661,787
Comcast Corp., Senior Unsecured Bonds
6.50%	11/15/35		475		478,355
Comcast Corp., Senior Unsecured Notes
7.05%	03/15/33		315		336,829
Time Warner Cos., Inc., Senior Debentures
9.15%	02/01/23		535		661,841
8.38%	03/15/23		500		586,580
7.57%	02/01/24		750		824,199
					4,451,749
Finance — 4.6%
Associates Corp. N.A., Senior Notes
6.25%	11/01/08		690		700,580
BAE Systems Holdings, Inc., Unsecured Notes
5.20%(c)	08/15/15		710		676,303
The Bear Stearns & Co., Inc., Notes
4.55%	06/23/10		750		733,979

60

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

MANAGED INCOME PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
CORPORATE BONDS (Continued)
Finance (Continued)
Berkshire Hathaway Finance Corp., Senior Unsecured Notes
3.38%	10/15/08	$	1,925	$	1,865,656
4.12%	01/15/10		215		208,955
General Electric Capital Corp., Unsecured Notes
5.42%(d)	01/15/08		10,250		10,259,758
4.12%	09/01/09		1,515		1,477,121
5.00%	11/15/11		5,205		5,166,842
Household Finance Corp., Senior Unsecured Notes
6.50%	11/15/08		1,615		1,650,914
Morgan Stanley, Senior Notes
5.40%(d)	03/07/08		5,920		5,924,316
5.62%	01/09/12		355		360,850
Morgan Stanley, Senior Unsecured Notes
6.75%	04/15/11		625		660,608
Morgan Stanley, Unsecured Notes
5.05%	01/21/11		1,690		1,679,018
Nationwide Building Society (United Kingdom), Senior Unsecured Notes
3.50%(c)	07/31/07		1,725		1,706,406
Nationwide Building Society (United Kingdom), Unsecured Notes
4.25%(c)	02/01/10		90		87,193
USAA Capital Corp., Senior Unsecured Notes
4.00%(c)	12/10/07		920		907,553
					34,066,052
Insurance — 1.3%
Allstate Financial Global Funding, Unsecured Notes
5.25%(c)	02/01/07		1,150		1,149,905
ASIF Global Financing, Unsecured Notes
3.90%(c)	10/22/08		285		278,029
Metlife, Inc., Junior Subordinated Debentures
6.40%(d)	12/15/36		1,565		1,578,099
MetLife, Inc., Senior Unsecured Notes
6.38%	06/15/34		350		373,752
Monumental Global Funding II, Unsecured Notes
2.80%(c)	07/15/08		2,480		2,388,047
New York Life Global Funding, Unsecured Notes
3.88%(c)	01/15/09		775		754,163
Sun Life of Canada Capital Trust (Canada), Capital Securities
8.53%(c)(i)			1,070		1,123,837
TIAA Global Markets, Senior Unsecured Notes
4.12%(c)	11/15/07		1,850		1,829,942
WellPoint, Inc., Unsecured Notes
5.85%	01/15/36		370		359,435
					9,835,209
Manufacturing — 0.2%
Belvoir Land LLC Class II, Unsecured Notes
5.40%(c)	12/15/47		1,175		1,076,347
Motor Vehicles — 0.0%
DaimlerChrysler N.A. Holding Corp., Unsecured Notes
4.05%	06/04/08		150		146,796
Oil & Gas — 0.2%
Texaco Capital, Inc., Debentures
8.88%	09/01/21		1,350		1,783,600
Pharmaceuticals — 0.2%
Bristol-Myers Squibb Co., Unsecured Notes
5.88%	11/15/36		1,175		1,162,251
Real Estate — 0.2%
The Rouse Co., Unsecured Notes
3.62%	03/15/09		1,615		1,528,539
Retail Merchandising — 0.1%
Federated Department Stores, Senior Debentures
6.79%	07/15/27		320		319,989
Telecommunications — 0.8%
AT&T Broadband Corp., Unsecured Notes
8.38%	03/15/13		1,195		1,361,183
BellSouth Telecommunications, Debentures
6.40%(j)	12/15/35		900		455,357
GTE Corp., Debentures
6.94%	04/15/28		150		157,263
New England Telephone & Telegraph Co., Debentures
7.88%	11/15/29		200		218,214
SBC Communications, Inc., Unsecured Notes
4.21%(c)	06/05/21		3,000		2,983,650
Sprint Capital Corp., Senior Unsecured Notes
8.75%	03/15/32		365		439,318
					5,614,985
Yankee — 3.6%
AID-Israel (Israel), Unsecured Notes
5.50%(k)	09/18/23		5,000		5,200,890
Deutsche Telekom International Finance BV (Netherlands), Senior Unsecured Notes
8.25%(k)	06/15/30		590		725,311
Eksportfinans ASA (Norway), Unsecured Notes
3.38%(k)	01/15/08		3,770		3,697,329
National Landeskreditbank Baden-Wurttemberg (Germany), Unsecured Notes
4.25%(k)	09/15/10		2,800		2,727,480
Pemex Finance Ltd. (Luxembourg), Senior Unsecured Notes
9.03%(k)	02/15/11		2,979		3,172,991
The Royal Bank of Scotland Capital Trust (United Kingdom), Bank Guaranteed Bonds
6.80%(i)(k)			1,000		1,012,500
Suncor Energy, Inc. (Canada)
5.95%(k)	12/01/34		70		70,424

61

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

MANAGED INCOME PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)			VALUE
CORPORATE BONDS (Continued)
Yankee (Continued)
Swedish Export Credit Corp. (Sweden), Unsecured Notes
2.88%(k)	01/26/07	$	1,550		$	1,547,813
Telecom Italia Capital (Luxembourg), Senior Unsecured Notes
6.00%(k)	09/30/34		175			158,719
7.20%(k)	07/18/36		650			679,067
Telecom Italia Capital (Luxembourg), Unsecured Notes
5.25%(k)	10/01/15		1,000			934,109
Telefonica Emisiones Sau (Spain), Senior Unsecured Notes
6.42%(k)	06/20/16		600			618,971
7.04%(k)	06/20/36		500			531,084
Telefonica Europe BV (Netherlands), Senior Unsecured Notes
7.75%(k)	09/15/10		475			510,170
Tyco International Group SA (Luxembourg), Senior Unsecured Notes
6.75%(k)	02/15/11		575			606,281
United Mexican States (Mexico), Senior Unsecured Notes
6.75%(k)	09/27/34		725			783,000
United Mexican States (Mexico), Unsecured Bonds
11.50%(k)	05/15/26		95			153,662
United Mexican States (Mexico), Unsecured Notes
7.50%(k)	04/08/33		70			82,600
Vodafone Group PLC (United Kingdom), Unsecured Notes
5.45%(d)(k)	12/28/07		2,715			2,716,309
5.00%(k)	12/16/13		90			86,984
						26,015,694
TOTAL CORPORATE BONDS
(Cost $143,226,109)						142,653,786
TAXABLE MUNICIPAL BONDS — 1.1%
Los Angeles County California Pension Obligation Revenue Bonds, Series 95, Class D
6.97%	06/30/08		7,355			7,539,022
Ohana Hawaii Military Communities LLC, Military Housing Revenue Bonds (Navy Housing Privatization Project), Series 04-A, Class 1
6.19%	04/01/49		750			805,155
TOTAL TAXABLE MUNICIPAL BONDS
(Cost $8,105,000)						8,344,177
		NUMBER OF SHARES
SHORT TERM INVESTMENTS — 0.4%
Galileo Money Market Fund
(Cost $2,900,045)			2,900,045			2,900,045
		NUMBER OF CONTRACTS
CALL SWAPTIONS PURCHASED — 0.1%
Barclays Capital, Strike Rate 5.520%, Expires 09/19/16
(Cost $596,918)			980	(l)		583,360
PUT OPTIONS PURCHASED — 0.0%
March 10 year U.S. Treasury Notes futures, Strike Price $106, Expires 02/23/07
(Cost $27,957)			74			35,844
PUT SWAPTIONS PURCHASED — 0.1%
Barclays Capital, Strike Rate 5.400%, Expires 03/12/07			8,710	(l)		57,152
Barclays Capital, Strike Rate 5.520%, Expires 09/21/15			980	(l)		536,985
Barclays Capital, Strike Rate 5.900%, Expires 03/12/07			8,710	(l)		1,709
Citibank, Strike Rate -0.020%, Expires 06/01/07			14,400	(l)		148,821
TOTAL PUT SWAPTIONS PURCHASED
(Cost $820,238)						744,667
TOTAL MARKET VALUE OF SECURITIES BEFORE AFFILIATED INVESTMENTS — 115.5%
(Cost $851,002,414)						846,271,044
	MATURITY	PAR (000)
AFFILIATED INVESTMENTS — LONG TERM — 0.3%
Merrill Lynch Mortgage Investors, Inc., Series 05-HE2, Class A2A
5.46%(d)
(Cost $2,395,435)	09/25/36		2,395			2,395,874
TOTAL INVESTMENTS IN SECURITIES — 115.8%
(Cost $853,397,849(a))						848,666,918
MORTGAGE PASS-THROUGH TBA SALE COMMITMENTS — (2.3)%
Federal Home Loan Mortgage Corp. Gold 15 Year TBA
4.50%	01/01/22		(5,400	)		(5,202,565	)
Federal National Mortgage Assoc. 30 Year TBA
5.50%	01/01/37		(8,800	)		(8,695,500	)
6.00%	01/01/37		(3,000	)		(3,019,686	)
TOTAL MORTGAGE PASS-THROUGH TBA SALE COMMITMENTS
(Premiums received $17,015,656)						(16,917,751	)

62

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

MANAGED INCOME PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF ASSETS)	NUMBER OF CONTRACTS		VALUE
CALL SWAPTIONS WRITTEN — (0.2)%
Barclays Capital, Strike Rate 5.140%, Expires 04/21/08	(960	)(l)	$	(215,710	)
Chase Securities, Strike Rate 5.485%, Expires 10/26/09	(1,060	)(l)		(449,440	)
Citibank, Strike Rate 5.670%, Expires 01/04/10	(1,000	)(l)		(494,210	)
Union Bank, Strike Rate 4.730%, Expires 06/13/07	(2,330	)(l)		(78,521	)
TOTAL CALL SWAPTIONS WRITTEN
(Premiums received $2,235,960)				(1,237,881	)
PUT SWAPTIONS WRITTEN — (0.2)%
Barclays Capital, Strike Rate 5.140%, Expires 04/21/08	(960	)(l)		(259,392	)
Barclays Capital, Strike Rate 5.650%, Expires 03/12/07	(17,420	)(l)		(25,435	)
Chase Securities, Strike Rate 5.485%, Expires 10/26/09	(1,060	)(l)		(307,612	)
Citibank, Strike Rate 5.670%, Expires 01/04/10	(1,000	)(l)		(255,760	)
Union Bank, Strike Rate 4.730%, Expires 06/13/07	(2,330	)(l)		(879,575	)
TOTAL PUT SWAPTIONS WRITTEN
(Premiums received $2,305,640)				(1,727,774	)
LIABILITIES IN EXCESS OF OTHER ASSETS — (13.1)%
(including $141,723,269 of payable for investments purchased and $40,699,375 of receivable for investments sold)				(96,034,921	)
NET ASSETS — 100.0%			$	732,748,591

(a) Cost for federal income tax purposes is $853,587,657. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	3,213,198
Gross unrealized depreciation		(8,133,937	)
	$	(4,920,739	)

(b) Rates shown are the effective yields as of December 31, 2006.

(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. As of December 31, 2006, the Portfolio held 7.2% of its net assets, with a current market value of $52,396,707, in securities restricted as to resale.

(d) Variable rate security. Rates shown are the rates as of December 31, 2006.

(e) Security, or a portion thereof, subject to financing transactions.

(f) Security valued at fair value as determined in good faith by or under the direction of the Board of Trustees. As of December 31, 2006, these securities had a total market value of $99,357, which represents less than 0.1% of net assets.

(g) Security is illiquid. As of December 31, 2006, the Portfolio held 0.4% of its net assets, with a current market value of $3,036,724 in these securities.

(h) Security, or a portion thereof, pledged as collateral with a value of $3,546,918 on 1,340 short U.S. Treasury Note futures contracts, 314 long U.S. Treasury Note futures contracts and 488 long U.S Treasury Bond futures contracts expiring March 2007 and 324 short Euro-dollar futures contracts expiring December 2007. The value of such contracts on December 31, 2006 was $305,900,938, with an unrealized gain of $294,558 (including commissions of $5,150).

(i) The security is a perpetual bond and has no stated maturity date.

(j) Debt obligation initially issued in zero coupon form which converts to coupon form at a specified date and rate. The rates shown are the effective yields as of December 31, 2006.

(k) Security is a foreign domiciled issuer which is registered with the Securities and Exchange Commission.

(l) Each swaption contract is equivalent to $10,000 notional amount.

63

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERNATIONAL BOND PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
FOREIGN BONDS — 74.2%
Australia — 0.6%
New South Wales Treasury Corp. (AUD)
7.00%	12/01/10	$	4,130	$	3,339,078
Austria — 2.4%
Republic of Austria Government Bonds (EUR)
5.00%	07/15/12		10,250		14,220,920
Belgium — 2.8%
Kingdom of Belgium (EUR)
5.75%	03/28/08		8,500		11,464,986
3.75%	03/28/09		4,250		5,595,043
					17,060,029
Canada — 5.1%
Government of Canada Bonds (CND)
5.25%	06/01/12		17,390		15,805,566
4.00%	06/01/16		1,515		1,290,702
5.75%	06/01/33		375		404,215
5.00%	06/01/37		3,000		2,968,718
Province of Ontario, Notes (CND)
4.50%	03/08/15		3,600		3,126,627
Royal Bank of Canada, Senior Unsecured Notes (GBP)
4.62%	12/07/10		3,830		7,269,119
					30,864,947
Denmark — 2.5%
Kingdom of Denmark (DKK)
7.00%	11/10/24		11,700		2,837,320
Nykredit Denmark (DKK)
4.16%(b)	10/01/38		20,195		3,492,824
Realkredit Denmark (DKK)
4.51%(b)	10/01/38		50,487		8,732,099
					15,062,243
Finland — 5.2%
Finnish Government Bonds (EUR)
3.00%	07/04/08		13,050		17,009,531
4.25%	07/04/15		10,385		13,997,370
					31,006,901
France — 4.9%
France Government Bonds (EUR)
4.25%	04/25/19		2,525		3,403,909
5.75%	10/25/32		14,750		24,406,085
France Government, Treasury Inflation Protected Bonds (EUR)
2.25%	07/25/20		345		509,042
Reseau Ferre de France, Unsecured Notes (GBP)
5.50%	12/01/21		600		1,233,846
					29,552,882
Germany — 5.4%
Bundesrepublic Deutschland (EUR)
6.25%	01/04/24		11,720		19,559,892
5.50%	01/04/31		195		310,872
4.75%	07/04/34		7,170		10,463,250
4.00%	01/04/37		1,600		2,081,869
					32,415,883
Iceland — 0.5%
Housing Finance Fund, Index-Linked Notes (ISK)
3.75%	09/15/14		210,456		3,068,409
Ireland — 3.0%
Irish Treasury Notes (EUR)
3.25%	04/18/09		14,000		18,221,900
Italy — 4.4%
Buoni Poliennali del Tesoro (EUR)
5.00%	02/01/12		6,500		8,967,005
4.25%	02/01/15		13,350		17,797,768
					26,764,773
Japan — 9.6%
Development Bank of Japan (JPY)
1.70%	09/20/22		401,000		3,167,780
East Japan Railway Co. (GBP)
4.75%	12/08/31		1,500		2,869,716
Japan Finance Corp. (GBP)
5.75%	08/09/19		2,860		5,937,151
Japan Government Bonds (JPY)
1.33%(b)	01/20/21		1,351,000		11,070,923
2.20%	06/20/26		1,829,000		15,719,487
2.50%	09/20/35		921,500		8,081,175
Japan Government, Treasury Inflation Protected Notes (JPY)
0.50%	06/10/15		479,000		3,849,326
1.10%	09/10/16		850,149		7,106,179
					57,801,737
Netherlands — 4.7%
Netherland Government Bonds (EUR)
5.75%	02/15/07		1,845		2,440,987
2.50%	01/15/08		10,500		13,670,583
4.25%	07/15/13		7,400		9,936,249
3.75%	01/15/23		1,950		2,477,302
					28,525,121
New Zealand — 1.3%
General Electric Capital Corp., Senior Unsubordinated Notes (NZD)
6.50%	09/28/15		5,245		3,553,486
International Bank Reconstruction and Development (NZD)
7.49%(c)	08/20/07		6,620		4,448,355
					8,001,841
Poland — 1.2%
Poland Government Bonds (PLN)
5.75%	03/24/10		20,475		7,249,298
Portugal — 0.7%
Portugal Government Bonds (EUR)
4.38%	06/16/14		2,950		3,975,520
Singapore — 2.0%
Singapore Government Bonds (SGD)
3.50%	07/01/12		18,250		12,180,886
Spain — 4.8%
Bonos y Obligation del Estado (EUR)
6.00%	01/31/08		1,650		2,225,839

64

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

INTERNATIONAL BOND PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
FOREIGN BONDS (Continued)
Spain (Continued)
4.00%	01/31/10	$	8,300	$	10,987,051
5.75%	07/30/32		5,895		9,716,031
Kingdom of Spain (EUR)
5.00%	07/30/12		4,155		5,762,865
					28,691,786
Sweden — 7.3%
AB Spintab, Notes (EUR)
4.38%	04/20/09		1,780		2,360,841
Swedish Government Bonds (SEK)
5.25%	03/15/11		270,000		41,588,822
					43,949,663
Switzerland — 0.3%
European Investment Bank (CHF)
2.00%	08/29/16		2,440		1,905,837
United Kingdom — 5.5%
BP Capital Markets PLC, Senior Unsecured Notes (GBP)
5.12%	12/07/08		1,345		2,613,147
GE Capital UK Funding (GBP)
5.12%	03/03/15		2,825		5,416,801
Network Rail Infrastructure Finance, Senior Secured Notes (GBP)
4.88%	11/27/15		1,630		3,142,237
Royal Bank of Scotland PLC (GBP)
5.50%(b)(d)			690		1,332,497
United Kingdom Treasury Bonds (GBP)
8.00%	06/07/21		2,000		5,278,720
5.00%	03/07/25		1,360		2,828,043
4.25%	03/07/36		590		1,163,758
United Kingdom Treasury Notes (GBP)
4.00%	03/07/09		2,450		4,683,016
4.25%	03/07/11		2,175		4,245,635
5.00%	03/07/12		1,225		2,401,886
					33,105,740
TOTAL FOREIGN BONDS
(Cost $424,625,967)					446,965,394
U.S. GOVERNMENT & AGENCY OBLIGATIONS — 1.7%
U.S. Treasury Bonds
4.50%(e)	02/15/36		2,562		2,436,303
U.S. Treasury Inflation Protected Bonds
2.00%	01/15/26		4,790		4,580,032
U.S. Treasury Inflation Protected Notes
2.50%	07/15/16		2,925		2,944,808
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost $10,219,353)					9,961,143
MORTGAGE PASS-THROUGHS — 1.0%
Federal Home Loan Mortgage Corp. ARM
4.62%(b)
(Cost $5,871,292)	02/01/35		5,859		5,804,796
COLLATERALIZED MORTGAGE OBLIGATIONS — 3.2%
Banc of America Commercial Mortgage, Inc., Series 04-5, Class A3
4.56%	11/10/41		2,470		2,398,853
Bear Stearns Mortgage Trust, Series 04-13, Class A1
5.72%(b)	11/25/34		2,779		2,784,765
Federal Home Loan Mortgage Corp., Series 232 (IO)
5.00%(f)	08/01/35		7,520		1,798,672
Federal Home Loan Mortgage Corp., Series 3204, Class C
5.50%	04/15/29		6,855		6,834,464
Lehman Brothers-UBS Commercial Mortgage Trust, Series 00-C4, Class A2
7.37%	08/15/26		1,800		1,906,197
Lehman Brothers-UBS Commercial Mortgage Trust, Series 04-C8, Class A4
4.51%	12/15/29		3,825		3,707,361
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $19,721,344)					19,430,312
COMMERCIAL MORTGAGE BACKED SECURITIES — 5.7%
Banc of America Commercial Mortgage, Inc., Series 01-1, Class A2
6.50%	04/15/36		3,511		3,644,569
Banc of America Commercial Mortgage, Inc., Series 05-1, Class A4
4.89%(b)	11/10/42		4,320		4,289,549
Bear Stearns Commercial Mortgage Securities, Inc., Series 04-PWR6, Class A6
4.82%	11/11/41		1,015		982,427
Commercial Mortgage Acceptance Corp., Series 98-C2, Class A2
6.03%	03/15/08		2,084		2,091,720
Credit Suisse First Boston Mortgage Securities Corp., Series 02-CP5, Class A2
4.94%	12/15/35		5,655		5,556,664
General Motors Acceptance Corp. Commercial Mortgage Securities, Inc., Series 00-C2, Class A2
7.46%	08/16/33		1,774		1,877,960
Goldman Sachs Mortgage Securities Corp. II, Series 05-GG4, Class A4
4.76%	07/10/39		2,150		2,068,150
Greenwich Capital Commercial Funding Corp., Series 04-GG1A, Class A4
4.76%	06/10/36		740		730,062
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 01-C1, Class A3
5.86%	10/12/35		4,530		4,637,267
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 04-CBX, Class A4
4.53%	01/12/37		2,700		2,621,860

65

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SCHEDULE OF INVESTMENTS

INTERNATIONAL BOND PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)			VALUE
COMMERCIAL MORTGAGE BACKED SECURITIES (Continued)
J.P. Morgan Mortgage Trust, Series 06-A2, Class 5A3
3.75%(b)	11/25/33	$	5,483		$	5,406,855
Morgan Stanley Capital Investments, Series 99-FNV1, Class A2
6.53%	03/15/31		670			680,891
TOTAL COMMERCIAL MORTGAGE BACKED SECURITIES
(Cost $35,482,865)						34,587,974
ASSET BACKED SECURITIES — 5.2%
Chase Issuance Trust, Series 04-A9, Class A9
3.22%	06/15/10		3,450			3,396,477
Citibank Credit Card Issuance Trust, Series 03, Class A6
2.90%	05/17/10		1,375			1,332,974
Citibank Credit Card Issuance Trust, Series 04, Class A4
3.20%(b)(g)	08/24/09		3,175			3,132,618
Ford Credit Auto Owner Trust, Series 05-C, Class A3
4.30%	08/15/09		6,300			6,244,541
Ford Credit Auto Owner Trust, Series 06-A, Class A3
5.07%	03/15/10		5,125			5,110,982
Student Loan Marketing Assoc. Student Loan Trust, Series 99-3, Class A2
5.54%(b)	07/25/12		285			285,046
Student Loan Marketing Assoc. Student Loan Trust, Series 03-10 (GBP)
5.15%	09/15/39		1,280			2,476,190
Student Loan Marketing Assoc. Student Loan Trust, Series 05-6, Class A2
5.38%(b)	07/25/16		2,645			2,646,340
USAA Auto Owner Trust, Series 06-2, Class A4
5.37%	02/15/12		6,375			6,418,727
TOTAL ASSET BACKED SECURITIES
(Cost $30,845,317)						31,043,895
CORPORATE BONDS — 4.9%
Citigroup, Inc., Unsecured Bonds (JPY)
2.24%	12/09/22		200,000			1,649,128
General Electric Capital Corp., Senior Unsecured Bonds (NZD)
6.62%	02/04/10		5,925			4,109,440
J.P. Morgan Chase & Co., Senior Unsecured Notes
5.42%(b)	12/22/08		5,800			5,808,857
Pemex Project Funding Master Trust, Unsecured Notes
5.75%	12/15/15		480			476,640
Rabobank Nederland (Netherlands), Senior Notes
5.37%(b)(h)	04/06/09		12,200			12,203,050
VTB Capital SA (Luxembourg), Unsecured Notes
5.97%(b)	08/01/08		3,800			3,801,900
Washington Mutual, Covered Secured Mortgage Notes
4.00%	09/27/16		1,100			1,420,776
TOTAL CORPORATE BONDS
(Cost $29,679,575)						29,469,791
		PAR/SHARES (000)
SHORT TERM INVESTMENTS — 5.6%
Federal Farm Credit Bank, Discount Notes
5.14%(i)	01/08/07		1,500			1,498,501
Federal Home Loan Bank, Discount Notes
4.80%(i)	01/02/07		12,800			12,798,293
5.11%(i)	01/09/07		1,000			998,865
5.14%(e)(g)(i)	01/24/07		6,200			6,179,640
U.S. Treasury Bills
4.74%(e)(i)	01/18/07		4,000			3,991,038
Galileo Money Market Fund			8,272			8,272,168
TOTAL SHORT TERM INVESTMENTS
(Cost $33,738,505)						33,738,505
		NUMBER OF CONTRACTS
CALL OPTIONS PURCHASED — 0.0%
Euro Currency versus Czech Koruna, Strike Price $28.50, Expires 03/13/07 (EUR)			602			6,917
U.S. Dollar versus Korean Won, Strike Price $995.00, Expires 03/22/07			1,241			1,675
TOTAL CALL OPTIONS PURCHASED
(Cost $122,829)						8,592
CALL SWAPTIONS PURCHASED — 0.1%
Barclays Capital, Strike Rate 5.520%, Expires 09/19/16
(Cost $536,008)			880	(j)		523,833
PUT SWAPTIONS PURCHASED — 0.1%
Barclays Capital, Strike Rate 5.400%, Expires 03/12/07			7,620	(j)		50,000
Barclays Capital, Strike Rate 5.520%, Expires 09/21/15			880	(j)		482,191
Barclays Capital, Strike Rate 5.900%, Expires 03/12/07			7,620	(j)		1,495
Citibank, Strike Rate -0.020%, Expires 06/01/07			12,960	(j)		133,939
Deutsche Bank Alex. Brown, Strike Rate 9.500%, Expires 06/07/12			2,500	(j)		5,677
TOTAL PUT SWAPTIONS PURCHASED
(Cost $787,175)						673,302
TOTAL INVESTMENTS IN SECURITIES — 101.7%
(Cost $591,630,230(a))						612,207,537

66

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SCHEDULE OF INVESTMENTS

INTERNATIONAL BOND PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED ) (PERCENTAGE OF NET ASSETS)	NUMBER OF CONTRACTS		VALUE
CALL SWAPTIONS WRITTEN — (0.2)%
Chase Securities, Strike Rate 5.485%, Expires 10/26/09	(1,400	)(j)	$	(593,600	)
Union Bank, Strike Rate 4.730%, Expires 06/13/07	(2,650	)(j)		(89,305	)
TOTAL CALL SWAPTIONS WRITTEN
(Premiums received $1,554,175)				(682,905	)
PUT SWAPTIONS WRITTEN — (0.2)%
Barclays Capital, Strike Rate 5.650%, Expires 03/12/07	(15,240	)(j)		(22,252	)
Chase Securities, Strike Rate 5.485%, Expires 10/26/09	(1,400	)(j)		(406,280	)
Union Bank, Strike Rate 4.730%, Expires 06/13/07	(2,650	)(j)		(1,000,375	)
TOTAL PUT SWAPTIONS WRITTEN
(Premiums received $1,615,135)				(1,428,907	)
LIABILITIES IN EXCESS OF OTHER ASSETS — (1.3)%				(7,959,453	)
NET ASSETS — 100.0%			$	602,136,272

(a) Cost for federal income tax purposes is $591,688,296. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	29,533,749
Gross unrealized depreciation		(9,014,508	)
	$	20,519,241

(b) Variable rate security. Rates shown are the rates as of December 31, 2006.

(c) Debt obligation initially issued in zero coupon form which converts to coupon form at a specified date and rate. The rates shown are the effective yields as of December 31, 2006.

(d) The security is a perpetual bond and has no stated maturity date.

(e) Security, or a portion thereof, with a market value of $4,114,235 have been pledged as collateral for swap and swaption contracts.

(f) Rates shown are the effective yields as of December 31, 2006.

(g) Security, or a portion thereof, pledged as collateral with a value of $3,930,220 on 2,184 short U.S. Treasury Note futures contracts, 11 long U.S. Treasury Bond futures contracts, 139 long Euro-Bobl futures contracts, 284 long Euro-Bund futures contracts, 281 long Euro-Schatz futures contracts, 59 short British Gilt futures contracts and 25 long Japan Government Bond futures contracts expiring March 2007, 298 short Canada Government Bond futures contracts and 381 long Australia Government Bond futures contracts expiring June 2007. The value of such contracts on December 31, 2006 was $544,234,343, with an unrealized gain of $1,634,738 (including commissions of $9,185).

(h) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. As of December 31, 2006, the Portfolio held 2.0% of its net assets, with a current market value of $12,203,950, in securities restricted as to resale.

(i) The rate shown is the effective yield at the time of purchase.

(j) Each swaption contract is equivalent to $10,000 notional amount.

67

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

HIGH YIELD BOND PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)		NUMBER OF SHARES		VALUE
COMMON STOCKS — 0.9%
American Tower Corp. - Class A(b)			475	$	17,708
Armstrong World Industries, Inc.(b)			88,803		3,764,359
Critical Care Systems International, Inc.(b)(c)			570,169		4,561,354
Freedom Pay, Inc.(b)			314,534		3,146
Loral Space & Communications, Inc.(b)			97,735		3,979,769
MACH Gen LLC(b)(c)			202		0
Massey Energy Co.			4,583		106,463
Mattress Discounters Corp.(b)(c)			22,488		0
Mirant Corp.(b)			37,119		1,171,842
Phase Metrics, Inc.(b)			842,908		16,858
Reunion Industries, Inc.(b)			8,341		3,086
Western Forest Products, Inc.(b)(d)			385,732		635,086
TOTAL COMMON STOCKS
(Cost $26,914,315)					14,259,671
PREFERRED STOCKS — 0.4%
Adelphia Business Solutions, Inc., Series B
12.88%(b)(c)(e)			2,200		0
Eagle-Picher, Inc.
9.75%(b)(c)(d)			131,400		2,496,600
Ion Media Networks, Inc.
14.25%(b)(e)			21		157,584
Loral Skynet Corp.
12.00%(b)(e)			5,236		1,078,616
MACH Gen LLC
0.00%(b)			814		133,496
New York Community Capital Trust V
6.00%			45,000		2,097,000
PTV, Inc.
10.00%(b)			34		127
Superior Essex Holdings Corp.
9.50%			176,985		145,128
TOTAL PREFERRED STOCKS
(Cost $7,820,045)					6,108,551
WARRANTS — 0.0%
American Tower Corp. (issued 01/29/03, expiring 08/01/08, strike price $0.01)(b)			950		500,003
ATEP Holdings, Inc. (issued 12/21/05, expiring 10/24/15, strike price $0.01)(b)(c)			136		0
ATH Holdings, Inc. (issued 12/21/05, expiring 10/24/15, strike price $0.01)(b)(c)			136		0
ATPP Holdings, Inc. (issued 12/21/05, expiring 10/24/15, strike price $0.01)(b)(c)			136		26,119
ATPR Holdings, Inc. (issued 12/21/05, expiring 10/24/15, strike price $0.01)(b)(c)			136		0
DIVA Systems Corp. (issued 02/19/98, expiring 03/01/08, strike price $0.01)(b)(c)			4,500		0
Healthsouth Corp. (issued 07/28/06, expiring 01/16/11, strike price $0.01)(b)			52,113		41,690
Mattress Discounters Co. (issued 08/03/99, expiring 07/15/07, strike price $0.01)(b)(c)			1,500		2
Ubiquitel, Inc. (issued 04/11/00, expiring 04/15/10, strike price $22.74)(b)(c)			3,000		0
TOTAL WARRANTS
(Cost $204,221)					567,814
	MATURITY	PAR (000)
CORPORATE BONDS — 80.7%
Advertising — 0.4%
R.H. Donnelley Corp., Senior Discount Notes
6.88%	01/15/13	$	350		335,563
R.H. Donnelley Corp., Senior Unsecured Notes
6.88%	01/15/13		700		671,125
8.88%	01/15/16		4,380		4,599,000
					5,605,688
Aerospace — 0.5%
AAR Corp., Senior Unsecured Notes
6.88%	12/15/07		1,245		1,245,000
8.39%(c)(f)	05/15/11		3,850		3,888,500
Sequa Corp., Senior Unsecured Notes
9.00%	08/01/09		1,975		2,113,250
					7,246,750
Air Transportation — 0.4%
American Airlines, Inc., Pass-Through Certificates, Series 99-1
7.32%	10/15/09		1,375		1,375,000
Continental Airlines, Inc., Pass-Through Certificates, Series 98-1C
6.54%	03/15/08		84		84,462
Continental Airlines, Inc., Pass-Through Certificates, Series 99-1B
6.80%	08/02/18		1,494		1,486,697
Northwest Airlines, Inc., Senior Unsecured Notes
10.00%(d)(g)	02/01/09		3,335		3,151,575
					6,097,734
Broadcasting — 4.0%
Adelphia Communications Corp., Senior Notes
0.00%(g)(h)(i)	03/15/03		625		664,062
10.50%(d)(g)(i)	07/15/04		800		744,000
Adelphia Communications Corp., Senior Unsecured Notes
11.88%(d)(g)	09/15/07		500		662,500
10.88%(g)	10/01/10		325		298,188
Adelphia Communications Corp., Subordinated Notes
6.00%(g)(j)	02/15/26		1,925		1,155
Barrington Broadcasting Group LLC, Senior Subordinated Notes
10.50%(f)	08/15/14		1,895		1,923,425

68

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

HIGH YIELD BOND PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
CORPORATE BONDS (Continued)
Cablevision Systems Corp., Senior Unsecured Notes
9.87%(j)	04/01/09	$	7,835	$	8,265,925
8.00%	04/15/12		325		319,312
Charter Communications Holdings I LLC, Notes
11.00%	10/01/15		4,900		5,028,625
Charter Communications Holdings II LLC, Senior Unsecured Notes
10.25%	09/15/10		7,445		7,770,719
Charter Communications Holdings II LLC, Unsecured Notes
10.25%	09/15/10		2,910		3,044,588
Echostar DBS Corp., Senior Notes
6.38%	10/01/11		430		427,312
Echostar DBS Corp., Senior Unsecured Notes
7.00%	10/01/13		4,800		4,794,000
7.12%	02/01/16		3,475		3,475,000
Lamar Media Corp., Senior Subordinated Notes
6.62%	08/15/15		1,650		1,635,563
Liberty Media Corp., Senior Debentures
0.75%	03/30/23		4,000		5,070,000
Lin Television Corp., Senior Subordinated Notes
6.50%	05/15/13		1,650		1,571,625
Nexstar Finance, Inc., Senior Subordinated Notes
7.00%	01/15/14		400		376,000
Rainbow National Services LLC, Senior Subordinated Notes
10.38%(f)	09/01/14		8,845		9,829,006
Sinclair Broadcast Group, Inc., Senior Subordinated Notes
4.88%(j)	07/15/18		1,285		1,174,169
Young Broadcasting, Inc., Senior Subordinated Notes
10.00%	03/01/11		6,195		5,885,250
					62,960,424
Business Services — 1.0%
Ashtead Holdings PLC (United Kingdom), Senior Secured Notes
8.62%(f)	08/01/15		850		884,000
DI Finance/Dyncorp International, Senior Subordinated Notes
9.50%	02/15/13		5,982		6,340,920
UGS Corp., Senior Subordinated Notes
10.00%(d)	06/01/12		7,635		8,322,150
					15,547,070
Chemicals — 2.4%
Airgas, Inc., Senior Unsecured Notes
6.25%	07/15/14		614		592,510
Chemtura Corp., Unsecured Notes
6.88%	06/01/16		1,690		1,626,625
Equistar Chemicals LP, Senior Unsecured Notes
10.12%	09/01/08		3,225		3,426,562
8.75%	02/15/09		1,965		2,058,337
10.62%	05/01/11		3,485		3,711,525
Hercules, Inc., Senior Debentures
6.60%	08/01/27		640		639,200
Huntsman International LLC, Senior Unsecured Notes
9.88%	03/01/09		1,522		1,567,660
Huntsman LLC, Senior Secured Notes
11.62%	10/15/10		1,971		2,153,318
Huntsman LLC, Senior Unsecured Notes
11.50%	07/15/12		1,114		1,256,035
Innophos, Inc., Senior Unsecured Notes
8.88%	08/15/14		4,625		4,694,375
Lyondell Chemical Co., Senior Unsecured Notes
8.00%	09/15/14		3,020		3,133,250
8.25%(j)	09/15/16		5,265		5,528,250
MacDermid, Inc., Senior Subordinated Notes
9.12%	07/15/11		2,375		2,470,000
Millenium America, Inc., Senior Unsecured Notes
9.25%	06/15/08		2,000		2,065,000
Omnova Solutions, Inc., Senior Secured Notes
11.25%	06/01/10		2,925		3,144,375
					38,067,022
Computer & Office Equipment — 0.5%
CBD Media LLC, Senior Unsecured Notes
9.25%	07/15/12		1,560		1,624,350
Ion Media Networks, Inc., Notes
8.76%(f)(j)	01/15/12		3,150		3,189,375
Quebecor World, Inc. (Canada), Senior Unsecured Notes
9.75%(f)	01/15/15		2,780		2,797,375
					7,611,100
Computer Software & Services — 1.1%
DRS Technologies, Inc., Senior Subordinated Notes
6.88%	11/01/13		500		503,750
DRS Technologies, Inc., Senior Unsecured Notes
6.62%	02/01/16		250		251,875
Juniper Networks, Inc., Senior Unsecured Notes
3.66%(d)(k)	06/15/08		1,260		1,362,375
SS&C Technologies, Inc., Senior Subordinated Notes
11.75%	12/01/13		1,885		2,045,225
Sungard Data Systems, Inc., Senior Subordinated Notes
10.25%	08/15/15		1,030		1,099,525
Sungard Data Systems, Inc., Senior Unsecured Notes
9.12%	08/15/13		2,760		2,898,000
9.97%(j)	08/15/13		4,045		4,201,744
UGS Capital Corp. II., Senior Unsecured Notes
10.35%(e)(f)(j)	06/01/11		1,973		2,022,271

69

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

HIGH YIELD BOND PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
Computer Software & Services (Continued)
Xerox Corp., Senior Unsecured Notes
7.62%	06/15/13	$	250	$	262,500
6.40%	03/15/16		2,255		2,302,918
6.75%	02/01/17		470		491,150
					17,441,333
Construction — 1.0%
Beazer Homes USA, Inc., Senior Unsecured Notes
8.62%	05/15/11		580		597,400
Compression Polymers Holdings Corp., Senior Unsecured Notes
10.50%	07/01/13		2,450		2,495,938
D.R. Horton, Inc., Senior Unsecured Notes
6.88%	05/01/13		1,300		1,342,667
Dayton Superior Corp., Senior Secured Notes
10.75%	09/15/08		1,640		1,713,800
Dycom Industries, Inc., Senior Subordinated Notes
8.12%	10/15/15		1,150		1,190,250
K. Hovnanian Enterprises, Inc., Senior Unsecured Notes
10.50%	10/01/07		2,000		2,065,000
Nortek, Inc., Senior Subordinated Notes
8.50%	09/01/14		6,810		6,673,800
					16,078,855
Containers — 1.6%
Ball Corp., Senior Unsecured Notes
6.62%	03/15/18		655		651,725
Berry Plastics Holding Corp., Secured Notes
8.88%(f)	09/15/14		7,255		7,363,825
9.24%(d)(f)(j)	09/15/14		2,530		2,561,625
Concentra Operating Corp., Senior Subordinated Notes
9.12%	06/01/12		2,145		2,252,250
Crown Holdings, Inc., Debentures
8.00%	04/15/23		1,195		1,165,125
Crown Holdings, Inc., Senior Debentures
7.38%(d)	12/15/26		920		860,200
Impress Holdings BV (Netherlands), Secured Notes
8.51%(f)(j)	09/15/13		4,950		4,984,155
Packaging Dynamics Finance Corp., Senior Subordinated Notes
10.00%(f)	05/01/16		470		470,000
Pregis Corp., Senior Subordinated Notes
12.38%(d)(f)	10/15/13		4,290		4,643,925
					24,952,830
Electronics — 0.6%
Condor Systems, Inc., Senior Subordinated Notes, Series B
11.88%(c)(g)	05/01/09		1,500		0
L-3 Communications Corp., Senior Subordinated Notes
5.88%	01/15/15		2,000		1,930,000
NXP BV (Netherlands), Unsecured Notes
9.50%(f)	10/15/15		7,880		8,077,000
					10,007,000
Energy & Utilities — 5.5%
The AES Corp., Senior Unsecured Notes
7.75%	03/01/14		700		738,500
AES Eastern Energy LP, Pass Through Certificates, Series 99-B
9.67%	01/02/29		500		627,500
AES Eastern Energy LP, Pass-Through Certificates
9.00%	01/02/17		3,371		3,775,424
AES Ironwood LLC, Senior Secured Notes
8.86%	11/30/25		3,774		4,236,333
AES Red Oak LLC, Senior Secured Notes
8.54%	11/30/19		2,753		2,993,758
9.20%	11/30/29		2,135		2,407,212
CCM Merger, Inc., Senior Unsecured Notes
8.00%(f)	08/01/13		3,560		3,479,900
CE Generation LLC, Senior Notes
7.42%	12/15/18		3,119		3,251,679
Centerpoint Energy, Inc., Senior Unsecured Notes
7.25%	09/01/10		505		532,081
3.75%	05/15/23		659		957,198
Chaparral Energy, Inc., Senior Unsecured Notes
8.50%	12/01/15		2,400		2,388,000
Citizens Communications Co., Senior Unsecured Notes
6.25%	01/15/13		925		907,656
CMS Energy Corp., Senior Notes
7.50%	01/15/09		740		763,125
CMS Energy Corp., Senior Unsecured Notes
7.75%	08/01/10		1,405		1,482,275
Copano Energy LLC, Senior Unsecured Notes
8.12%	03/01/16		2,460		2,546,100
Dynegy Holdings, Inc., Senior Unsecured Notes
8.38%	05/01/16		265		278,250
Edison Mission Energy, Senior Unsecured Notes
7.50%	06/15/13		715		747,175
7.75%	06/15/16		550		583,000
Elwood Energy LLC, Senior Secured Notes
8.16%	07/05/26		6,799		7,103,526
FPL Energy National Wind, Senior Secured Notes
6.12%(f)	03/25/19		588		569,612
Homer City Funding LLC, Senior Secured Notes
8.73%	10/01/26		1,173		1,348,950
Midwest Generation LLC, Pass-Through Certificates
8.56%	01/02/16		3,540		3,902,356

70

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

HIGH YIELD BOND PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
Energy & Utilities (Continued)
Mirant America Corp., Escrow Bonds
0.00%(d)(f)(g)(l)(m)(n)		$	5,150	$	51,500
Mirant Americas Generation LLC, Escrow Bonds
0.00%(d)(g)(l)(m)			1,215		12,150
Mirant Americas Generation LLC, Senior Unsecured Notes
8.30%	05/01/11		5,045		5,171,125
9.12%(d)	05/01/31		755		800,300
Mirant Mid-Atlantic LLC, Pass Through Certificates
9.12%	06/30/17		1,221		1,378,238
Mirant North America LLC, Senior Unsecured Notes
7.38%	12/31/13		2,000		2,030,000
Mission Energy Holding Co., Senior Secured Notes
13.50%	07/15/08		3,885		4,283,212
Northwest Pipeline Corp., Senior Unsecured Notes
7.00%	06/15/16		550		574,750
NRG Energy, Inc., Senior Unsecured Notes
7.25%	02/01/14		2,175		2,191,313
7.38%	02/01/16		6,155		6,185,775
Orion Power Holdings, Inc., Senior Unsecured Notes
12.00%	05/01/10		6,100		6,923,500
Reliant Energy, Inc., Senior Secured Notes
9.25%	07/15/10		1,365		1,433,250
9.50%	07/15/13		3,205		3,437,362
6.75%	12/15/14		2,955		2,888,512
Sierra Pacific Resources, Senior Unsecured Notes
8.62%	03/15/14		675		724,720
Sithe Independence Funding Corp., Notes
9.00%	12/30/13		1,535		1,673,012
Tenaska Alabama Partners LP, Senior Secured Notes
7.00%(f)	06/30/21		897		890,372
					86,268,701
Entertainment & Leisure — 4.6%
AMC Entertainment, Inc., Senior Subordinated Notes
9.50%	02/01/11		450		451,687
American Casino & Entertainment Properties LLC, Senior Secured Notes
7.85%	02/01/12		3,205		3,273,106
Boyd Gaming Corp., Senior Subordinated Notes
7.12%	02/01/16		2,025		2,014,875
Cinemark, Inc., Senior Unsecured Notes
10.25%(h)	03/15/14		2,090		1,794,787
Gaylord Entertainment Co., Senior Unsecured Notes
8.00%	11/15/13		400		415,000
Greektown Holdings LLC, Senior Notes
10.75%(f)	12/01/13		2,870		2,999,150
Harrahs Operating Co., Inc., Senior Notes
5.75%	10/01/17		8,780		7,355,937
Host Hotel & Resorts LP, Senior Unsecured Notes
6.75%	06/01/16		2,100		2,102,625
Lazy Days RV Center, Inc., Senior Notes
11.75%	05/15/12		4,388		4,190,540
Little Traverse Bay Bands of Odawa Indians, Senior Unsecured Notes
10.25%(f)	02/15/14		1,075		1,080,375
MGM Mirage, Inc., Senior Notes
6.00%	10/01/09		2,530		2,523,675
MGM Mirage, Inc., Senior Unsecured Notes
6.75%	09/12-04/13		1,375		1,350,250
Park Place Entertainment, Senior Subordinated Notes
8.12%	05/15/11		875		915,469
Pokagon Gaming Authority, Senior Unsecured Notes
10.38%(f)	06/15/14		3,395		3,717,525
Quebecor World (USA), Inc., Senior Subordinated Notes
6.00%	10/01/07		900		891,000
Riddell Bell Holdings, Inc., Senior Subordinated Notes
8.38%	10/01/12		2,235		2,184,712
Seneca Gaming Corp., Senior Unsecured Notes
7.25%	05/01/12		6,570		6,684,975
Station Casinos, Inc., Senior Notes
6.00%	04/01/12		1,450		1,375,688
Station Casinos, Inc., Senior Subordinated Notes
6.62%	03/15/18		5,125		4,394,688
Station Casinos, Inc., Senior Unsecured Notes
7.75%	08/15/16		750		755,625
Steinway Musical Instruments, Inc., Senior Unsecured Notes
7.00%(f)	03/01/14		150		146,625
Tropicana Entertainment LLC, Senior Subordinated Notes
9.62%(f)	12/15/14		5,060		5,085,300
Turning Stone Resort Casino Enterprise, Senior Unsecured Notes
9.12%	09/15/14		250		255,625
Universal City Florida Holding Co., Senior Unsecured Notes
10.12%(j)	05/01/10		625		645,312
Virgin River Casino Corp., Senior Secured Notes
9.00%	01/15/12		4,020		4,160,700
Warner Music Group Corp., Senior Subordinated Notes
7.38%	04/15/14		3,020		2,989,800
Waterford Gaming LLC, Senior Unsecured Notes
8.62%(f)	09/15/12		2,997		3,169,328

71

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

HIGH YIELD BOND PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
Entertainment & Leisure (Continued)
Wynn Las Vegas LLC, First Mortgage Notes
6.62%	12/01/14	$	4,420	$	4,392,375
					71,316,754
Finance — 6.5%
Affinion Group, Inc., Senior Subordinated Notes
11.50%	10/15/15		1,950		2,062,125
Affinion Group, Inc., Senior Unsecured Notes
10.12%	10/15/13		3,215		3,407,900
Arch Western Finance, Senior Notes
6.75%(j)	07/01/13		825		818,813
Ashtead Capital, Inc., Notes
9.00%(f)	08/15/16		1,925		2,059,750
Chukchansi Economic Development Authority, Unsecured Notes
8.88%(f)(j)	11/15/12		990		1,017,225
Chukchansi Economic Devolopment Authority, Senior Unsecured Notes
8.00%(f)	11/15/13		1,225		1,272,469
Compton Petroleum Finance Corp. (Canada), Senior Notes
7.62%	12/01/13		3,695		3,565,675
Corrections Corp. of America, Senior Unsecured Notes
6.75%	01/31/14		350		353,500
Eagle-Picher, Inc., Escrow Bonds
0.00%(c)(d)(l)(m)			3,285		0
Ford Motor Credit Co., Senior Notes
5.80%	01/12/09		9,535		9,361,873
Ford Motor Credit Co., Unsecured Notes
5.70%	01/15/10		1,550		1,485,835
8.11%(j)	01/13/12		6,500		6,443,255
FTI Consulting, Inc., Senior Unsecured Notes
7.75%(f)	10/01/16		2,455		2,547,062
General Motors Acceptance Corp., Senior Unsecured Notes
6.88%	09/11-08/12		12,410		12,740,521
Hilcorp Energy/Finance, Senior Notes
10.50%(f)	09/01/10		2,107		2,254,490
Indalex Holding Corp., Notes
11.50%(f)	02/01/14		1,800		1,881,000
iPayment, Inc., Senior Subordinated Notes
9.75%	05/15/14		2,615		2,686,912
12.75%(f)	07/15/14		12,340		13,142,100
Jason, Inc., Second Lien Notes Certificates
15.00%(c)(e)(j)	12/15/07		1,655		1,654,677
Momentive Performance Materials, Inc., Senior Subordinated Notes
11.50%(f)	12/01/16		3,525		3,454,500
Momentive Performance Materials, Inc., Senior Unsecured Notes
10.12%(f)	12/01/14		8,900		8,944,500
Nielsen Finance LLC, Senior Unsecured Notes
10.00%(d)(f)	08/01/14		7,090		7,683,788
11.62%(f)(h)	08/01/16		7,035		4,845,356
Norcraft Finance Corp., Senior Subordinated Notes
9.00%	11/01/11		350		362,250
Poster Financial Group, Inc., Senior Secured Notes
8.75%	12/01/11		1,780		1,846,750
TDS Investor Corp., Senior Subordinated Notes
11.88%(f)	09/01/16		535		548,375
TDS Investor Corp., Senior Unsecured Notes
9.88%(f)	09/01/14		1,480		1,487,400
9.99%(f)(j)	09/01/14		855		833,625
Triad Acquisition Corp., Senior Unsecured Notes
11.12%	05/01/13		2,125		2,018,750
Zais Investment Grade Ltd. (Cayman Islands), Secured Notes
9.95%(e)(f)	09/23/14		1,000		450,000
					101,230,476
Food & Agriculture — 1.0%
Ameriqual Group LLC, Senior Secured Notes
9.50%(f)	04/01/12		625		650,000
Archibald Candy Corp., Secured Notes
10.00%(c)(g)	11/01/07		180		11,436
B&G Foods Holding Corp., Senior Notes
8.00%	10/01/11		2,170		2,191,700
Del Monte Corp., Senior Subordinated Notes
8.62%	12/15/12		400		422,000
Gold Kist, Inc., Senior Notes
10.25%	03/15/14		3,346		3,855,964
Merisant Co., Senior Subordinated Notes
9.50%(d)(j)	07/15/13		6,527		3,883,565
Nebco Evans Holding Co., Senior Notes
17.25%(c)(g)(h)	07/15/07		800		0
Southern States Cooperative, Inc., Senior Notes
10.50%(f)	11/01/10		2,225		2,347,375
Swift & Co., Unsecured Notes
12.50%(d)	01/01/10		2,710		2,770,975
					16,133,015
Insurance — 0.3%
Coventry Health Care, Inc., Senior Unsecured Notes
5.88%	01/15/12		990		977,474
6.12%	01/15/15		990		975,646
Crum & Forster Holdings Corp., Senior Notes
10.38%	06/15/13		1,815		1,964,737
					3,917,857
Leasing — 0.9%
Ahern Rentals, Inc., Notes
9.25%	08/15/13		275		286,687

72

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

HIGH YIELD BOND PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
Leasing (Continued)
Avis Budget Car Rental LLC, Senior Unsecured Notes
7.62%(f)	05/15/14	$	450	$	438,750
7.87%(f)(j)	05/15/14		1,490		1,437,850
7.75%(f)	05/15/16		1,965		1,896,225
Rent-A-Center, Senior Subordinated Notes
7.50%(d)	05/01/10		1,570		1,573,925
United Rentals N.A., Inc., Senior Subordinated Notes
7.75%(d)	11/15/13		3,040		3,051,400
7.00%(d)	02/15/14		2,820		2,767,125
1.88%	10/15/23		1,760		2,255,000
					13,706,962
Machinery & Heavy Equipment — 0.1%
Terex Corp., Senior Subordinated Notes
7.38%	01/15/14		1,000		1,015,000
Manufacturing — 8.6%
Aleris International, Inc., Senior Unsecured Notes
9.00%(f)	12/15/14		5,230		5,269,225
Alliant Techsystems, Inc., Senior Subordinated Notes
6.75%	04/01/16		1,275		1,275,000
American Tire Distributors, Inc., Senior Unsecured Notes
11.62%(d)(j)	04/01/12		3,000		2,865,000
10.75%(d)	04/01/13		150		140,625
Argo Tech Corp., Senior Unsecured Notes
9.25%	06/01/11		3,370		3,639,600
Armstrong World Industries, Inc.
0.00%(c)(d)(g)(l)(m)			7,499		1
Asbury Automotive Group, Inc., Senior Subordinated Notes
8.00%	03/15/14		1,700		1,725,500
Ashton Woods USA LLC, Senior Subordinated Notes
9.50%	10/01/15		2,685		2,443,350
Bombardier, Inc. (Canada), Senior Unsecured Notes
8.00%(f)	11/15/14		2,745		2,810,194
Buhrmann U.S., Inc., Senior Subordinated Notes
8.25%	07/01/14		1,575		1,563,188
Building Materials Corp. of America, Senior Notes
8.00%	12/01/08		400		418,000
Building Materials Corp. of America, Senior Unsecured Notes
7.75%	08/01/14		1,600		1,448,000
California Steel Industries, Inc., Senior Unsecured Notes
6.12%	03/15/14		1,990		1,895,475
Conexant Systems, Inc., Notes
9.13%(f)(j)	11/15/10		2,400		2,442,000
Delco Remy International, Inc., Senior Secured Notes
9.51%(f)(j)	04/15/09		1,580		1,516,800
Esco Corp., Senior Unsecured Notes
8.68%(f)	12/15/13		2,900		2,965,250
9.24%(f)	12/15/13		1,110		1,129,425
General Cable Corp., Senior Unsecured Notes
9.50%	11/15/10		2,230		2,363,800
Gentek, Inc., Escrow Bonds
0.00%(c)(l)(m)			1,000		0
Goodman Global Holdings, Inc., Senior Subordinated Notes
7.88%(d)	12/15/12		2,695		2,647,838
Goodman Global Holdings, Inc., Senior Unsecured Notes
8.36%(j)	06/15/12		830		842,450
Goodyear Tire & Rubber Co., Senior Notes
8.62%(f)	12/01/11		10,025		10,350,812
Goodyear Tire & Rubber Co., Senior Unsecured Notes
7.86%	08/15/11		1,250		1,256,250
4.00%(j)	06/15/34		1,550		2,797,750
Goodyear Tire & Rubber Co., Unsecured Notes
9.14%(f)(j)	12/01/09		1,000		1,003,750
Graftech International Ltd., Senior Debentures
1.62%	01/15/24		2,180		1,697,675
Graphic Packaging International Corp., Senior Subordinated Notes
9.50%(d)	08/15/13		2,959		3,121,745
Hexcel Corp., Senior Subordinated Notes
6.75%	02/01/15		1,850		1,822,250
Invensys PLC (United Kingdom), Senior Unsecured Notes
9.88%(d)(f)	03/15/11		1,820		1,951,950
Invitrogen, Inc., Senior Unsecured Notes
2.00%	08/01/23		4,670		4,658,325
Jacuzzi Brands, Inc., Senior Secured Notes
9.62%	07/01/10		500		531,250
Keystone Automotive Operations, Inc., Senior Subordinated Notes
9.75%	11/01/13		2,280		2,257,200
Lear Corp., Senior Unsecured Notes
8.75%(f)	12/01/16		5,800		5,604,250
Levi Strauss & Co., Senior Unsecured Notes
12.25%	12/15/12		3,760		4,183,000
8.88%	04/01/16		1,600		1,672,000
Mac-Gray Corp., Senior Unsecured Notes
7.62%	08/15/15		375		380,625
Metaldyne Corp., Senior Unsecured Notes
10.00%(d)	11/01/13		3,475		3,718,250
Mosaic Co., Unsecured Notes
7.62%(f)	12/01/16		2,145		2,222,756
NCO Group, Inc., Senior Unsecured Notes
10.24%(f)(j)	11/15/13		245		243,162
Norcross Safety Products LLC, Senior Subordinated Notes
9.88%	08/15/11		3,650		3,887,250

73

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

HIGH YIELD BOND PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
Manufacturing (Continued)
Nutro Products, Inc., Senior Unsecured Notes
9.40%(f)(j)	10/15/13	$	4,240	$	4,388,400
Park-Ohio Industries, Inc., Senior Subordinated Notes
8.38%	11/15/14		1,320		1,230,900
Ply Gem Industries, Inc., Senior Subordinated Notes
9.00%(d)	02/15/12		1,325		1,126,250
Rathgibson, Inc., Senior Unsecured Notes
11.25%	02/15/14		1,225		1,298,500
RBS Global & Rexnord Corp., Senior Subordinated Notes
9.50%(f)	08/01/14		4,800		4,992,000
11.75%(f)	08/01/16		3,090		3,229,050
Smurfit-Stone Container Corp., Senior Unsecured Notes
9.75%	02/01/11		7,092		7,313,625
Stanadyne Corp., Senior Subordinated Notes
10.00%	08/15/14		3,115		3,200,662
Stanadyne Holdings, Inc., Senior Unsecured Notes
15.90%(h)	02/15/15		5,455		3,709,400
Stanley-Martin Communities LLC, Senior Subordinated Notes
9.75%(e)	08/15/15		2,300		1,817,000
Technical Olympic USA, Inc., Senior Unsecured Notes
8.25%(f)	04/01/11		1,675		1,633,125
Tenneco, Inc., Senior Subordinated Notes
8.62%	11/15/14		1,950		1,989,000
Texas Industries, Inc., Senior Unsecured Notes
7.25%	07/15/13		1,350		1,370,250
Titan Wheel International, Inc., Senior Unsecured Notes
8.00%(f)	01/15/12		1,110		1,116,938
TRW Automotive, Inc., Senior Unsecured Notes
9.38%	02/15/13		3,200		3,432,000
					134,608,071
Medical & Medical Services — 1.5%
Bio-Rad Laboratories, Inc., Senior Subordinated Notes
7.50%	08/15/13		2,820		2,904,600
Duloxetine Royalty (Cayman Islands), Senior Secured Notes (acquired 9/30/05, cost $2,500,000)
13.00%(n)(o)	10/15/13		2,500		2,625,000
Healthsouth Corp., Senior Unsecured Notes
11.35%(f)(j)	06/15/14		2,665		2,838,225
10.75%(f)	06/15/16		5,225		5,623,406
Select Medical Corp., Senior Subordinated Notes
7.62%	02/01/15		1,250		1,037,500
Tenet Healthcare Corp., Senior Unsecured Notes
9.88%	07/01/14		2,375		2,416,563
9.75%	02/01/15		1,125		1,125,000
6.88%	11/15/31		3,710		2,977,275
U.S. Oncology, Inc., Senior Subordinated Notes
10.75%	08/15/14		1,750		1,933,750
					23,481,319
Medical Instruments & Supplies — 0.5%
Accellant, Inc., Senior Subordinated Notes
10.50%	12/01/13		3,400		3,527,500
Universal Hospital Services, Inc., Senior Notes
10.12%	11/01/11		4,250		4,536,875
					8,064,375
Metal & Mining — 1.1%
AK Steel Corp., Senior Unsecured Notes
7.75%(d)	06/15/12		3,900		3,929,250
Alpha Natural Resources, Senior Unsecured Notes
10.00%	06/01/12		3,395		3,683,575
Century Aluminum Co., Senior Unsecured Notes
7.50%	08/15/14		2,605		2,640,819
Foundation Pennsylvania Coal Co., Senior Unsecured Notes
7.25%	08/01/14		3,225		3,281,438
Mueller Group LLC, Senior Subordinated Notes
10.00%	05/01/12		1,024		1,113,600
Novelis, Inc. (Canada), Senior Unsecured Notes
8.25%(f)	02/15/15		1,575		1,523,812
TRIMAS Corp., Senior Subordinated Notes
9.88%	06/15/12		1,420		1,373,850
					17,546,344
Motor Vehicles — 2.5%
Arvinmeritor, Inc., Senior Notes
6.80%	02/15/09		176		172,480
Autonation, Inc., Senior Unsecured Notes
7.37%(j)	04/15/13		1,935		1,944,675
7.00%	04/15/14		820		826,150
Cooper Standard Automotive, Senior Unsecured Notes
7.00%(d)	12/15/12		3,025		2,714,938
Ford Motor Co., Senior Unsecured Notes
4.25%	12/15/36		5,955		6,398,171
Ford Motor Co., Unsecured Notes
7.45%(d)	07/16/31		10,000		7,850,000
General Motors Corp., Senior Unsecured Notes
8.38%(d)	07/15/33		5,910		5,466,750
Sunstate Equipment Co. LLC, Senior Secured Notes
10.50%(f)	04/01/13		7,760		8,206,200

74

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

HIGH YIELD BOND PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
Motor Vehicles (Continued)
United Auto Group, Inc., Senior Subordinated Notes
7.75%(f)	12/15/16	$	5,300	$	5,326,500
					38,905,864
Oil & Gas — 6.3%
ANR Pipeline Co., Senior Debentures
9.62%	11/01/21		870		1,154,513
Chesapeake Energy Corp., Senior Unsecured Notes
6.38%	06/15/15		4,670		4,623,300
6.62%	01/15/16		2,040		2,027,250
6.88%	11/15/20		300		294,750
Colorado Interstate Gas Co., Senior Unsecured Notes
6.80%	11/15/15		1,300		1,351,717
Denbury Resources, Inc., Senior Subordinated Notes
7.50%	04/13-12/15		2,460		2,508,275
East Cameron Gas
11.25%(c)	07/09/19		3,260		3,129,600
El Paso Corp., Senior Notes
7.75%	06/15/10		150		158,625
El Paso Corp., Senior Unsecured Notes
10.75%	10/01/10		390		448,500
9.62%	05/15/12		3,285		3,728,475
El Paso Corp., Trust Certificates
7.75%(f)	07/15/11		2,080		2,199,600
El Paso Natural Gas Co., Senior Unsecured Notes
8.38%(j)	06/15/32		1,090		1,319,925
El Paso Production Holding Co., Senior Notes
7.75%	06/01/13		2,320		2,424,400
Encore Acquisition Co., Senior Subordinated Notes
6.00%	07/15/15		3,400		3,102,500
7.25%	12/01/17		1,350		1,306,125
Exco Resources, Inc., Senior Secured Notes
7.25%	01/15/11		5,190		5,267,850
Ferrellgas Partners LP, Senior Unsecured Notes
8.75%	06/15/12		740		758,500
Frontier Oil Corp., Senior Unsecured Notes
6.62%	10/01/11		785		783,038
Grant Prideco, Inc., Senior Unsecured Notes
6.12%	08/15/15		2,000		1,950,000
KCS Energy, Inc., Senior Unsecured Notes
7.12%	04/01/12		6,105		5,937,112
Newfield Exploration Co., Senior Subordinated Notes
6.62%	09/14-04/16		1,500		1,499,400
Opti, Inc. (Canada), Notes
8.25%(f)	12/15/14		8,000		8,170,400
Pogo Producing Co., Senior Subordinated Notes
7.88%	05/01/13		670		680,050
Pride International, Inc., Senior Unsecured Notes
7.38%	07/15/14		1,190		1,228,675
Range Resources Corp., Senior Subordinated Notes
7.38%	07/15/13		2,325		2,383,125
Sabine Pass LNG LP, Notes
7.50%(f)	11/30/16		4,705		4,687,356
Semgroup LP, Senior Unsecured Notes
8.75%(f)	11/15/15		4,900		4,924,500
Southern Natural Gas Co., Senior Unsecured Notes
8.00%	03/01/32		750		876,376
Stone Energy Corp., Unsecured Notes
8.12%(f)(j)	07/15/10		6,580		6,514,200
Tennessee Gas Pipeline Co., Senior Debentures
7.00%	10/15/28		1,000		1,055,878
7.62%	04/01/37		2,100		2,360,492
Tennessee Gas Pipeline Co., Senior Unsecured Notes
8.38%	06/15/32		1,565		1,901,786
Transcontinental Gas Pipeline Corp., Senior Debentures
7.25%	12/01/26		2,515		2,593,594
Transcontinental Gas Pipeline Corp., Senior Notes
8.88%	07/15/12		3,645		4,118,850
Whiting Petroleum Corp., Senior Subordinated Notes
7.25%	05/12-05/13		6,765		6,781,912
The Williams Cos., Inc., Senior Unsecured Notes
7.37%(f)(j)	10/01/10		2,110		2,152,200
7.62%	07/15/19		500		535,000
7.75%	06/15/31		325		341,250
8.75%	03/15/32		1,500		1,695,000
					98,974,099
Paper & Forest Products — 1.9%
Boise Cascade LLC, Senior Subordinated Notes
7.12%	10/15/14		4,485		4,339,237
Bowater, Inc., Senior Unsecured Notes
8.36%(j)	03/15/10		3,455		3,489,550
Newpage Corp., Senior Secured Notes
10.00%	05/01/12		12,000		12,660,000
11.62%(j)	05/01/12		2,475		2,673,000
Newpage Corp., Senior Subordinated Notes
12.00%(d)	05/01/13		4,150		4,388,625
Verso Paper Holdings LLC, Secured Notes
9.12%(f)	08/01/14		1,810		1,886,925
Verso Paper Holdings LLC, Senior Subordinated Notes
11.38%(f)	08/01/16		335		351,750
					29,789,087
Pharmaceuticals — 0.5%
Angiotech Pharmaceuticals, Inc. (Canada), Senior Subordinated Notes
7.75%(f)	04/01/14		220		191,400

75

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

HIGH YIELD BOND PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
Pharmaceuticals (Continued)
Angiotech Pharmaceuticals, Inc. (Canada), Senior Unsecured Notes
9.10%(f)(j)	12/01/13	$	7,790	$	7,887,375
					8,078,775
Publishing & Printing — 1.5%
Dex Media West/Finance, Senior Subordinated Notes
9.88%	08/15/13		4,313		4,701,170
Dex Media, Inc., Senior Unsecured Notes
8.00%	11/15/13		1,000		1,030,000
Network Communications, Inc., Senior Unsecured Notes
10.75%	12/01/13		3,865		3,903,650
Primedia, Inc., Senior Unsecured Notes
8.88%	05/15/11		790		805,800
8.00%	05/15/13		14,015		13,559,512
					24,000,132
Real Estate — 0.8%
American Real Estate Partners LP, Senior Unsecured Notes
8.12%	06/01/12		3,075		3,174,937
7.12%	02/15/13		3,050		3,065,250
Mobile Services Group, Inc., Senior Unsecured Notes
9.75%(f)	08/01/14		2,050		2,142,250
The Rouse Co., Unsecured Notes
5.38%	11/26/13		540		501,879
Ventas Realty LP, Senior Unsecured Notes
6.75%	06/01/10		1,910		1,967,300
9.00%	05/01/12		850		960,500
					11,812,116
Restaurants — 0.2%
Buffets, Inc., Senior Unsecured Notes
12.50%(f)	11/01/14		3,000		3,022,500
Retail Merchandising — 2.8%
American Greetings Corp., Senior Unsecured Notes
7.38%	06/01/16		1,050		1,078,875
Ames True Temper, Inc., Senior Unsecured Notes
9.51%(j)	01/15/12		5,865		5,952,975
Burlington Coat Factory Warehouse Corp., Senior Unsecured Notes
11.12%(d)(f)	04/15/14		1,930		1,881,750
Finlay Fine Jewelry Corp., Senior Unsecured Notes
8.38%	06/01/12		1,330		1,273,475
General Nutrition Centers, Inc., Senior Unsecured Notes
8.62%	01/15/11		2,175		2,289,188
Michaels Stores, Inc., Senior Subordinated Notes
11.38%(d)(f)	11/01/16		9,750		10,164,375
Michaels Stores, Inc., Senior Unsecured Notes
10.00%(f)	11/01/14		3,820		3,972,800
Neiman Marcus Group, Inc., Senior Subordinated Notes
10.38%(d)	10/15/15		1,125		1,251,562
Neiman Marcus Group, Inc., Senior Unsecured Notes
9.00%(d)(e)	10/15/15		7,191		7,847,179
Spectrum Brands, Inc., Senior Subordinated Notes
7.38%(d)	02/01/15		9,365		8,100,725
					43,812,904
Semiconductors & Related Devices — 1.7%
Advanced Micro Devices, Inc., Senior Unsecured Notes
7.75%	11/01/12		520		539,500
Amkor Technologies, Inc., Senior Notes
7.75%	05/15/13		1,840		1,692,800
Cypress Semiconductor Corp., Subordinated Notes
1.25%	06/15/08		1,797		2,239,511
Freescale Semiconductor, Inc., Senior Unsecured Notes
9.12%(e)(f)	12/15/14		19,540		19,417,875
9.24%(f)(j)	12/15/14		2,100		2,081,625
					25,971,311
Telecommunications — 11.9%
ADC Telecommunications, Inc., Subordinated Notes
1.00%	06/15/08		1,059		992,812
5.73%(j)	06/15/13		1,275		1,219,219
American Tower Corp., Senior Unsecured Notes
7.50%	05/01/12		5,025		5,200,875
American Tower Corp., Unsecured Notes
3.00%	08/15/12		5,100		9,696,375
CCO Holdings LLC, Capital Corp., Senior Unsecured Notes
9.48%(j)	12/15/10		1,270		1,295,400
Centennial Communications, Senior Subordinated Notes
10.75%	12/15/08		3,043		3,050,608
Centennial Communications, Senior Unsecured Notes
8.12%	02/01/14		4,830		4,956,788
Cincinnati Bell, Inc., Senior Unsecured Notes
7.25%	07/15/13		10,985		11,369,475
Cricket Communications Corp., Senior Unsecured Notes
9.38%(f)	11/01/14		4,180		4,409,900
DirecTV Holdings LLC, Unsecured Notes
8.38%	03/15/13		4,395		4,570,800
Dobson Cellular Systems, Inc., Notes
8.38%(f)	11/01/11		1,745		1,838,794
Dobson Cellular Systems, Inc., Senior Secured Notes
8.38%	11/01/11		2,895		3,050,606
Dobson Communications Corp., Debentures
1.50%(f)	10/01/25		930		1,012,538
Dobson Communications Corp., Senior Notes
9.62%(j)	10/15/12		3,080		3,141,600

76

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

HIGH YIELD BOND PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
Telecommunications (Continued)
Fibertower Corp., Notes
9.00%(f)	11/15/12	$	3,120	$	3,724,500
Idearc, Inc., Senior Unsecured Notes
8.00%(f)	11/15/16		8,270		8,425,062
Inmarsat Finance II PLC (United Kingdom), Junior Subordinated Notes
8.70%(h)	11/15/12		1,180		1,087,075
Intelsat Ltd. (Bermuda), Senior Unsecured Notes
11.64%(f)(j)	06/15/13		3,320		3,486,000
9.25%(f)	06/15/16		1,940		2,085,500
11.25%(f)	06/15/16		2,680		2,941,300
Loral Spacecom Corp., Notes
14.00%(e)(j)	11/15/15		753		864,068
Lucent Technologies, Inc., Debentures
6.50%	01/15/28		1,556		1,435,410
Lucent Technologies, Inc., Senior Debentures
6.45%	03/15/29		4,185		3,860,662
Lucent Technologies, Inc., Senior Unsecured Notes
5.50%	11/15/08		265		262,350
MetroPCS Wireless, Inc., Senior Unsecured Notes
9.25%(f)	11/01/14		8,015		8,375,675
Nortel Networks Ltd. (Canada), Senior Unsecured Notes
9.73%(f)(j)	07/15/11		5,830		6,143,362
10.12%(f)	07/15/13		1,940		2,095,200
PanAmSat Corp., Senior Debentures
6.88%	01/15/28		2,690		2,461,350
PanAmSat Corp., Senior Unsecured Notes
9.00%(f)	08/14-06/16		4,207		4,451,506
PF Net Communications, Inc., Senior Unsecured Notes
13.75%(c)(g)	05/15/10		1,000		0
Protostar Ltd.
12.50%(e)(f)	10/15/12		9,105		9,378,150
Qwest Communications International, Senior Unsecured Notes
8.87%(j)	02/15/09		1,485		1,503,562
Qwest Corp., Debentures
7.25%	10/15/35		1,845		1,821,938
7.12%	11/15/43		5,110		4,905,600
Qwest Corp., Senior Unsecured Notes
7.88%	09/01/11		3,175		3,381,375
7.50%(f)	10/01/14		7,735		8,199,100
Qwest Corp., Unsecured Notes
8.88%(j)	03/15/12		965		1,074,769
8.61%(j)	06/15/13		2,000		2,165,000
Rural Cellualar Corp., Senior Secured Notes
8.25%	03/15/12		3,460		3,602,725
Superior Essex Communications & Essex Group, Senior Notes
9.00%	04/15/12		6,835		7,108,400
Telcordia Technologies, Inc., Senior Subordinated Notes
10.00%(f)	03/15/13		1,355		1,192,400
Time Warner Telecom Holdings, Inc., Senior Unsecured Notes
9.25%	02/15/14		1,300		1,389,375
West Corp., Senior Unsecured Notes
9.50%(f)	10/15/14		425		425,000
11.00%(f)	10/15/16		11,200		11,312,000
Wind Acquistion Finance SA (Luxembourg), Senior Unsecured Notes
10.75%(f)	12/01/15		10,490		11,932,375
Windstream Corp., Senior Unsecured Notes
8.12%(f)	08/01/13		5,725		6,197,312
8.62%(f)	08/01/16		3,450		3,777,750
					186,871,641
Tobacco — 0.1%
Reynolds American, Inc., Notes
7.62%	06/01/16		1,880		1,991,924
Transportation — 1.0%
Britannia Bulk PLC (United Kingdom), Notes
11.00%(f)	12/01/11		1,525		1,431,594
H-Lines Finance Holding Corp., Senior Notes
10.25%(h)	04/01/13		3,062		2,847,660
Horizon Lines LLC, Senior Unsecured Notes
9.00%	11/01/12		2,915		3,060,750
Hornbeck Offshore Services, Inc., Senior Unsecured Notes
6.12%	12/01/14		955		910,831
Navios Martime Holding, Inc. (Greece), Senior Unsecured Notes
9.50%(f)	12/15/14		3,700		3,642,862
Overseas Shipholding Group, Inc., Debentures
8.75%	12/01/13		3,980		4,298,400
					16,192,097
Waste Management — 0.1%
Allied Waste N. A., Inc., Senior Secured Notes
6.38%	04/15/11		600		592,500
Casella Waste Systems, Inc., Senior Subordinated Notes
9.75%	02/01/13		1,225		1,283,188
					1,875,688
Yankee — 5.3%
Abitibi-Consolidated, Inc. (Canada), Senior Unsecured Notes
8.55%(p)	08/01/10		700		665,000
Abitibi-Consolidated, Inc. (Canada), Unsecured Notes
6.00%(d)(p)	06/20/13		5,055		4,044,000
Ainsworth Lumber Co. Ltd. (Canada), Senior Unsecured Notes
9.12%(d)(j)(p)	10/01/10		4,850		4,098,250
7.25%(d)(p)	10/01/12		2,190		1,724,625
Asia Global Crossing Ltd. (Bermuda), Senior Unsecured Notes
13.38%(g)(p)	10/15/10		2,000		170,000

77

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

HIGH YIELD BOND PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
Yankee (Continued)
BCP Crystal U.S. Holdings Corp. (Luxembourg), Senior Subordinated Notes
9.62%(p)	06/15/14	$	1,596	$	1,763,580
Bowater Finance Corp. (Canada), Senior Unsecured Notes
7.95%(p)	11/15/11		5,055		4,953,900
Cascades, Inc. (Canada), Unsecured Notes
7.25%(p)	02/15/13		1,030		1,027,425
CHC Helicopter Corp. (Canada), Senior Subordinated Notes
7.38%(p)	05/01/14		760		732,450
Compagnie Generale de Geophysique (France), Senior Unsecured Notes
7.50%(p)	05/15/15		3,155		3,170,775
Domtar, Inc. (Canada), Senior Unsecured Notes
7.88%(p)	10/15/11		1,685		1,748,188
7.12%(p)	08/15/15		3,720		3,645,600
Donohue Forest Products (Canada), Senior Notes
7.62%(p)	05/15/07		1,515		1,511,212
Fairfax Financial Holdings Ltd. (Canada), Senior Notes
6.88%(p)	04/15/08		195		195,000
Fairfax Financial Holdings Ltd. (Canada), Senior Unsecured Notes
7.75%(p)	04/26/12		2,040		2,009,400
Intelsat Intermediate Ltd. (Bermuda), Senior Unsecured Notes
9.23%(h)(p)	02/01/15		3,370		2,561,200
Ipsco, Inc. (Canada), Senior Notes
8.75%(p)	06/01/13		4,550		4,874,187
Ispat Inland ULC (Canada), Senior Secured Notes
9.75%(p)	04/01/14		5,405		6,040,088
MDP Acquisitions PLC (Ireland), Senior Unsecured Notes
9.62%(p)	10/01/12		2,825		2,994,500
Norske Skog Canada Ltd. (Canada), Senior Unsecured Notes
7.38%(p)	03/01/14		2,200		2,084,500
North American Energy Partners, Inc. (Canada), Senior Unsecured Notes
8.75%(p)	12/01/11		5,520		5,547,600
Nova Chemicals Corp. (Canada), Senior Unsecured Notes
6.50%(p)	01/15/12		1,205		1,141,738
8.50%(d)(j)(p)	11/15/13		4,930		4,930,000
Quebecor Media, Inc. (Canada), Senior Unsecured Notes
7.75%(p)	03/15/16		450		459,562
Rogers Cable, Inc. (Canada), Senior Secured Notes
6.75%(p)	03/15/15		640		659,415
Rogers Wireless, Inc. (Canada), Senior Secured Notes
8.48%(j)(p)	12/15/10		795		810,900
9.62%(p)	05/01/11		1,750		1,986,250
7.25%(p)	12/15/12		360		381,600
7.50%(p)	03/15/15		500		542,500
Rogers Wireless, Inc. (Canada), Senior Subordinated Notes
8.00%(p)	12/15/12		2,730		2,914,275
Russell Metals, Inc. (Canada), Senior Subordinated Notes
6.38%(p)	03/01/14		1,625		1,549,844
Seagate Technology HDD Holdings (Cayman Islands), Senior Unsecured Notes
6.80%(p)	10/01/16		1,390		1,396,950
Standard Aero Holdings, Inc. (Canada), Senior Subordinated Notes
8.25%(p)	09/01/14		7,465		7,539,650
Stats Chippac Ltd. (Singapore), Senior Unsecured Notes
6.75%(p)	11/15/11		915		896,700
Stats Chippac Ltd. (Singapore), Subordinated Notes
2.50%(p)	06/01/08		780		811,200
Waste Services, Inc. (Canada), Senior Subordinated Notes
9.50%(p)	04/15/14		1,850		1,928,625
					83,510,689
TOTAL CORPORATE BONDS
(Cost $1,236,320,376)					1,263,713,507
FOREIGN BONDS — 1.5%
Asset Repackaging Trust BV (Netherlands) (EUR)
11.21%(e)(j)	12/21/11		850		1,137,466
BCM Ireland Finance Ltd. (EUR)
10.60%(f)(j)	02/15/17		2,220		2,915,847
BCM Ireland Finance Ltd., Senior Notes (EUR)
8.59%(j)	08/15/16		3,730		5,108,409
Cell C (Pty) Ltd. (South Africa) (EUR)
8.62%	07/01/12		700		925,880
Nordic Telephone Co. Holdings ApS (Denmark) (EUR)
9.06%(j)	05/01/16		2,400		3,299,711
Nordic Telephone Co. Holdings ApS (Denmark), Senior Unsecured Notes (EUR)
8.88%(f)	05/01/16		8,655		9,260,850
Pregis Corp., Senior Secured Notes (EUR)
8.49%(j)	04/15/13		875		1,186,803
TOTAL FOREIGN BONDS
(Cost $22,555,775)					23,834,966
TERM LOANS — 6.9%
Alm Media, Inc., 2nd Lien
11.25%(j)	03/07/11		4,500		4,496,251
Applied Tech Products Corp., Tranche A
11.90%(c)(j)	04/24/11		1,232		1,224,855
Applied Tech Products Corp., Tranche B
16.40%(c)(j)	04/24/11		566		560,984
Applied Tech Products Corp., Tranche C
19.90%(c)(e)(j)	10/24/11		214		189,809
BLB Wembley, 2nd Lien
9.70%(j)	08/31/12		500		506,250
Chiquita Brands International, Inc., Tranche C
8.38%(j)	06/28/12		3,178		3,211,745

78

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

HIGH YIELD BOND PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
TERM LOANS (Continued)
EB Sports Corp.
11.00%(j)	05/01/12	$	5,240	$	5,109,000
Edge Las Vegas, 1st Lien
8.82%(j)	06/15/07		2,000		1,950,000
Edge-Star Partners LLC, 1st Lien
7.62%(j)	11/18/07		2,000		1,995,000
Eggborough Power Ltd. (United Kingdom) (GBP)
7.00%	09/08/15		834		5,321,253
Electrical Components International Ltd., 2nd Lien
11.78%(j)	05/19/14		1,000		1,005,000
Exco Partners LP
11.32%(j)	10/31/11		2,954		2,976,000
11.38%(j)	10/31/11		46		46,500
General Motors Corp.
7.70%(j)	11/17/13		2,000		2,000,312
Healthsouth Corp.
8.58%(j)	03/15/13		1,995		2,006,914
Hit Entertainment PLC (United Kingdom), 2nd Lien
10.83%(j)	01/31/13		1,500		1,514,532
Intelsat Ltd. (Bermuda), Senior Bridge
11.25%(c)	09/21/07		7,310		7,328,275
Kabel Deutschland Holdings GmbH & Co. (Germany) (EUR)
9.65%(j)	12/15/14		2,000		2,643,577
Lakes Entertainment, Inc.
11.69%(j)	06/18/10		6,700		6,700,000
Lucite International Ltd. (EUR)
12.08%(e)(j)	07/15/14		750		973,637
MACH Gen LLC, Tranche A Construction Collateral
0.00%(j)	12/31/49		1,834		2,978,879
MACH Gen LLC, Tranche A Construction Commitments
0.00%(j)	12/31/49		301		488,680
MACH Gen LLC, Tranche B Constant Price
0.00%(j)	12/31/49		443		719,352
8.25%(j)	12/31/49		2,363		3,837,632
MACH Gen LLC, Tranche B Construction Collateral
0.00%(j)	12/31/49		458		743,620
MACH Gen LLC, Tranche B Construction Commitments
0.00%(j)	12/31/49		6		9,443
MACH Gen LLC, Working Capital Communications
8.32%(j)	12/31/49		395		641,122
Navistar International Corp., Delayed Draw
10.32%(j)	02/28/09		2,000		2,025,000
10.37%(j)	02/28/09		11,000		11,137,500
Northwest Airlines Corp., Trade Claim Participation
5.25%(j)	12/31/49		10,500		9,187,500
Nutro Products, Inc., Tranche B
7.26%(j)	04/30/13		995		995,622
Ply Gem Industries, Inc., 2nd Lien
11.07%(j)	10/31/11		2,500		2,518,750
S & C Holding Co., Inc.
8.00%(c)	03/19/10		3,010		2,182,250
Spectrum Brands, Inc., Term B
8.39%(j)	01/31/12		266		266,953
8.40%(j)	01/31/12		484		485,217
8.44%(j)	01/31/12		339		339,652
8.51%(j)	01/31/12		1,331		1,334,346
8.62%(j)	01/31/12		211		211,584
8.64%(j)	01/31/12		296		296,971
Synventive Molding Solutions Ltd., Mezzanine
14.00%(e)	02/17/14		508		190,337
Telecordia Technologies, Inc.
8.15%(j)	10/15/12		3,491		3,424,591
U.S. Airways Group, Inc.
8.87%(j)	04/15/11		1,500		1,508,571
UAL Corp., Tranche B
9.25%(j)	02/01/12		1,741		1,752,754
UAL Corp., Tranche DD
9.08%(j)	01/31/12		249		250,393
Wind Aquisition Holding Finance SA
14.86%(e)	12/21/11		8,150		8,262,062
TOTAL TERM LOANS
(Cost $98,219,707)					107,548,675
		NUMBER OF SHARES
SHORT TERM INVESTMENTS — 0.6%
Galileo Money Market Fund
(Cost $10,000,000)			10,000,000		10,000,000
		PAR (000)
REPURCHASE AGREEMENTS — 5.8%
Lehman Brothers Holdings, Inc.
5.30%(m)		$	3,198		3,198,000
(Agreement dated 07/25/06 to be repurchased at $3,273,801, collateralized by $3,395,000 Ford Motor Credit Co. 6.19% due 09/28/07. The value of the collateral is $3,364,533.)
5.30%(m)			20,850		20,850,000
(Agreement dated 08/29/06 to be repurchased at $21,236,768, collateralized by $20,022,282 Air 2 US 8.03% due 10/01/19. The value of the collateral is $20,917,058.)
5.30%(m)			11,840		11,840,000
(Agreement dated 08/30/06 to be repurchased at $12,057,889, collateralized by $31,093,117 Air 2 US 10.13% due 10/01/20. The value of the collateral is $11,815,384.)
5.30%(m)			8,120		8,120,000
(Agreement dated 08/30/06 to be repurchased at $8,269,431, collateralized by $9,025,000 DirectTV Holdings LLC 6.38% due 06/15/15. The value of the collateral is $8,649,710.)
5.30%(m)			23,835		23,835,000
(Agreement dated 08/30/06 to be repurchased at $24,273,630, collateralized by $23,445,000 Ford Motor Credit Co. 9.96% due 04/15/12. The value of the collateral is $25,012,742.)

79

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

HIGH YIELD BOND PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED ) (PERCENTAGE OF NET ASSETS )	MATURITY	PAR (000)			VALUE
REPURCHASE AGREEMENTS (Continued)
5.30%(m)		$	18,470		$	18,470,000
(Agreement dated 08/30/06 to be repurchased at $18,809,899, collateralized by $18,450,000 Iron Mountain, Inc. 8.63% due 04/01/13. The value of the collateral is $19,651,941.)
5.30%(m)			3,687			3,687,000
(Agreement dated 08/30/06 to be repurchased at $3,754,851, collateralized by $3,385,000 Levi Strauss & Co. 12.25% due 12/15/12. The value of the collateral is $3,894,066.)
TOTAL REPURCHASE AGREEMENTS
(Cost $90,000,000)						90,000,000
TOTAL MARKET VALUE OF SECURITIES BEFORE AFFILIATED INVESTMENTS — 96.8%
(Cost $1,492,034,439)						1,516,033,184
		NUMBER OF SHARES
AFFILIATED INVESTMENTS - SHORT TERM — 5.6%
Institutional Money Market Trust(q)
(Cost $87,888,300)			87,888,300			87,888,300
TOTAL INVESTMENTS IN SECURITIES — 102.4%
(Cost $1,579,922,739(a))						1,603,921,484
		NUMBER OF CONTRACTS
PUT OPTIONS WRITTEN — 0.0%
Freeport McMoran Bridge Debt Option, Strike Price $100, Expires 01/31/07(c)			(3,377	)		(168,850	)
HCI Direct Tag-Along Commitment Option, Strike Price $100, Expires 01/31/07(c)			(1	)		0
Rite Aid Bridge Debt Option, Strike Price $100, Expires 01/31/07(c)			(227	)		(170,475	)
Riverdeep, Strike Price $100, Expires 01/31/07(c)			(76	)		(38,100	)
TOTAL PUT OPTIONS WRITTEN
(Premiums received $377,425)						(377,425	)
OBLIGATION TO RETURN SECURITIES LENDING COLLATERAL — (5.6)%						(87,888,300	)
OTHER ASSETS IN EXCESS OF LIABILITIES — 3.2%						50,704,985
NET ASSETS — 100.0%					$	1,566,360,744

(a) Cost for federal income tax purposes is $1,580,571,978. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	56,105,988
Gross unrealized depreciation		(32,756,482	)
	$	23,349,506

(b) Non-income producing security.

(c) Security valued at fair value as determined in good faith by or under the direction of the Board of Trustees. As of December 31, 2006, these securities had a total market value of $26,877,037 which represents 1.7% of net assets.

(d) Total or partial security on loan.

(e) Payment in kind security.

(f) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. As of December 31, 2006, the Portfolio held 26.2% of its net assets, with a current market value of $409,706,697, in securities restricted as to resale.

(g) Security in default.

(h) Debt obligation initially issued in zero coupon form which converts to coupon form at a specified date and rate. The rates shown are the effective yields as of December 31, 2006.

(i) As a result of bankruptcy proceedings, the company did not repay the principal amount of the security upon maturity.

(j) Variable rate security. Rates shown are the rates as of December 31, 2006.

(k) Rates shown are the effective yields as of December 31, 2006.

(l) Security held in escrow for future payments

(m) The security is a perpetual bond and has no stated maturity date.

(n) Security is illiquid. As of December 31, 2006, the Portfolio held 0.2% of its net assets, with a current market value of $2,676,500 in these securities.

(o) Security restricted as to public resale. These securities are ineligible for resale into the public market until such time that either (i) a resale Registration Statement has been filed with the SEC and declared effective or (ii) resale is permitted under Rule 144A without the need for an effective registration statement. As of December 31, 2006, the Portfolio held 0.2% of its net assets, with a current market value of $2,625,000 and an original cost of $2,500,000 in these securities.

(p) Security is a foreign domiciled issuer which is registered with the Securities and Exchange Commission.

(q) Security purchased with the cash proceeds from securities loaned.

80

BLACKROCK FUNDS

Key to Investment Abbreviations

ARM	Adjustable Rate Mortgage
AUD	Australian Dollar
CHF	Swiss Franc
CMT	Constant Maturity Treasury Rate
CND	Canadian Dollar
DKK	Danish Krone
EUR	Euro Currency
GBP	Great British Pound
IO	Interest Only
ISK	Iceland Krona
JPY	Japanese Yen
LLC	Limited Liability Company
LP	Limited Partnership
NZD	New Zealand Dollar
PLC	Project Loan Certificate
PLN	Polish Zloty
PO	Principal Only
SEK	Swedish Krona
SGD	Singapore Dollar
TBA	To Be Announced

81

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

AMT-FREE MUNICIPAL BOND PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS — 94.3%
Alabama — 3.1%
Alabama St. Pub. Sch. & Coll. Auth. Cap. Imp. Rev., Ser. 99C
5.75%	07/01/18	$	3,000	$	3,179,490
Jefferson Cnty. Swr. Rev., Warrants, Ser. 03B-8
5.25%	02/01/13		7,725		8,066,368
					11,245,858
California — 9.6%
Bay Area Toll Auth. Rev., San Francisco Bay Area Prj., Ser 06F
5.00%	04/01/31		2,000		2,132,600
California St. Econ. Recovery GO, Ser. 04A
5.25%	07/01/13		5,000		5,453,500
California St. GO, Ser. 05
5.00%	06/01/33		8,505		8,982,471
Foothill Eastern Corridor Agcy. Toll Rd. Rev., Ser. 99
5.75%	01/15/40		8,500		8,819,855
Infra. & Econ. Dev. Rev., Salvation Army Western Prj., Ser. 06
5.00%	09/01/28		3,065		3,265,604
Los Altos Sch. Dist. Cap. Apprec. GO, Ser. 01B
5.87%(b)(c)	08/01/13		3,380		1,693,515
Los Angeles Uni. Sch. Dist. GO, Ser. 06F
5.00%	07/01/30		2,000		2,138,720
Sacramento Mun. Util. Dist. Elec. Rev., Ser. 92C
5.75%(b)	11/15/09		430		430,770
San Mateo Cnty. Cmnty. Coll. Dist. GO, Ser. 06C
5.00%	03/01/31		1,000		1,063,450
Stockton-East Wtr. Dist. Rev., Ser. 02B
6.12%(c)	04/01/28		4,495		1,366,525
					35,347,010
Colorado — 0.7%
Hlth. Fac. Auth. Rev., Chrisitian Living Cmnty’s. Prj., Ser. 06A
5.75%	01/01/37		550		576,823
Hlth. Facs. Auth. Rev., Adventist Hlth./Sunbelt Prj., Ser. 06D
5.25%	11/15/35		2,000		2,123,540
					2,700,363
District of Columbia — 0.0%
District of Columbia GO, Ser. 93A-1
6.00%(b)	06/01/11		50		54,735
Florida — 8.1%
Ave Maria Stewardship Cmnty. Dev. Dist. GO, Ser. 06
4.80%	11/01/12		1,000		996,720
Florida St. Bd. of Ed. Cap. Outlay GO, Ser. 00D
5.75%	06/01/22		7,800		8,362,458
Florida St. Bd. of Ed. GO, Ser. 05A
5.00%	01/01/16		5,000		5,440,550
Highlands Cnty. Hlth. Facs. Auth. Rev., Hosp. Adventist Hlth. Sys. Prj., Ser. 06G
5.12%	11/15/32		4,300		4,515,688
Northern Palm Beach Cnty. Impt. Dist. Rev., Wtr. Ctl. & Impt.-Unit Dev. Prj., Ser. 05-9B
5.00%	08/01/29		2,835		3,027,156
Riviera Beach Util. Spl. Dist. Wtr. & Swr. Rev., Ser. 04
5.00%	10/01/29		4,245		4,479,027
Tampa Wtr. & Swr. Rev., Ser. 02
6.00%	10/01/14- 10/01/16		2,455		2,860,171
					29,681,770
Georgia — 1.5%
Atlanta Arpt. Fac. Rev., Ser. 94A
6.50%	01/01/10		1,000		1,080,430
Cobb Cnty. & Marietta Wtr. Auth. Rev., Ser. 02
5.50%	11/01/14		1,000		1,111,630
Forsyth Cnty. Sch. Dist. GO, Ser. 92
6.70%	07/01/12		1,000		1,099,840
Fulton Cnty. Fac. Corp. COP, Fulton Cnty. Pub. Purp. Prj., Ser. 99
5.50%	11/01/18		1,000		1,068,050
Mun. Elec. Auth. Pwr. Rev., Ser. 93B
5.70%	01/01/19		1,000		1,124,130
					5,484,080
Hawaii — 1.9%
Hawaii St. Hwy. Rev., Ser. 05B
5.00%	07/01/16		6,495		7,037,268
Illinois — 5.2%
Chicago O’Hare Intl. Arpt. Rev., Gen. Arpt. Third Lien, Ser. 05B
5.25%	01/01/15		7,720		8,447,378
Chicago Wtr. Rev., Ser. 97
5.50%(b)	11/01/07		8,885		9,195,531
5.50%	11/01/22		1,020		1,053,895
Illinois Hsg. Dev. Auth. Rev., Multi-Fam. Prj., Ser. 94-5
6.65%	09/01/14		265		265,326
					18,962,130
Kansas — 0.8%
Wichita Wtr. & Swr. Util. Rev., Ser. 06
4.75%	10/01/25		2,775		2,904,676
Kentucky — 1.5%
Kentucky St. Property & Bldgs. Comm. Rev., No. 84 Prj., Ser. 05
5.00%	08/01/18		5,000		5,513,600
Louisiana — 0.5%
Orleans Rev., Levee Dist. Pub. Imp. Prj., Ser. 86
5.95%	11/01/15		1,885		1,934,934

1

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

AMT-FREE MUNICIPAL BOND PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS (Continued)
Maryland — 5.3%
Howard Cnty. Cons. Pub. Impt. Prj. GO, Ser. 04A
5.00%	08/15/19	$	6,695	$	7,473,160
Maryland St. & Loc. Facs. First Lein GO, Ser. 05B
5.25%	02/15/11		5,000		5,315,600
Maryland St. Cap. Impt. GO, Ser. 05A
5.25%	02/15/14		5,000		5,497,250
Maryland St. Hlth. & Hgr. Edl. Fac. Auth. Rev., Ser. 94D VRDN
3.90%(d)	01/08/07		70		70,000
Maryland St. Hlth. & Hgr. Edl. Fac. Auth. Rev., Ser. 07B
5.00%	01/01/17		1,000		1,000,560
					19,356,570
Massachusetts — 2.5%
Massachusetts St. GO, Ser. 04B
5.25%	08/01/15		5,000		5,526,100
Massachusetts St. Hlth. & Edl. Facs. Auth. Rev., Newton-Wellesley Hosp. Prj., Ser. 97G
6.12%	07/01/15		1,000		1,030,160
Massachusetts St. Hlth. & Edl. Facs. Auth. Rev., Ser. 03 VRDN
3.92%(d)	01/08/07		2,600		2,600,000
					9,156,260
Michigan — 2.9%
Detroit Swr. Disp. Rev., Ser. 98
5.25%	07/01/21		7,665		8,493,280
Huron Vy. Sch. Dist. GO, Ser. 96
5.88%(b)	05/01/07		2,000		2,015,020
					10,508,300
Minnesota — 2.3%
Pub. Facs. Auth. Wtr. Poll. Ctl. Rev., Ser. 05C
5.00%	03/01/17		7,500		8,244,450
Missouri — 2.0%
Jackson Cnty. Spl. Oblig. Rev., Ser. 06
5.00%	12/01/22		5,000		5,393,300
Kansas City Met. Cmnty. Coll. Bldg. Corp. Rev., Ser. 06
4.75%	07/01/20		2,000		2,104,700
					7,498,000
Montana — 1.5%
Montana St. Dept. Transn. Grant Antic Nts. Rev., Hwy. 93 Constr. Prj., Ser. 05
5.25%	06/01/16		5,000		5,526,550
Multi-State — 4.7%
Charter Mac Equity Issue Tr., Ser. 99
6.62%(e)	06/30/09		3,000		3,160,770
Charter Mac Equity Issue Tr., Ser. 00
7.60%(e)	11/30/10		9,000		9,958,050
MuniMae Tax-Exempt Bond Subs., LLC, Ser. 00
6.88%(e)	06/30/09		4,000		4,225,920
					17,344,740
Nebraska — 0.3%
Omaha Pub. Pwr. Dist. Elec. Rev., Ser. 92B
6.15%	02/01/12		1,000		1,080,360
Nevada — 1.5%
Clark Cnty. Sch. Dist. GO, Ser. 04A
5.00%	06/15/16		5,000		5,370,100
New Jersey — 8.9%
New Jersey St. Edl. Facs. Auth. Higher Ed. Cap. Impt. Rev., Ser. 05A
5.00%	09/01/14		5,000		5,401,700
New Jersey St. GO, Ser. 05L
5.25%	07/15/16		5,000		5,566,850
New Jersey St. Hwy. Auth. Rev., Garden St. Pkwy. Prj., Ser. 92
6.20%	01/01/10		6,225		6,538,989
New Jersey St. Tpke. Auth. Rev., Ser. 00A
5.75%(b)	01/01/10		2,820		2,987,959
5.75%(b)	01/01/10		1,180		1,250,281
New Jersey St. Trans. Tr. Fd. Auth. Trans. Sys. Rev., Ser. 00A
6.00%(b)	06/15/10		10,000		10,757,400
					32,503,179
New York — 4.0%
New York City GO, Ser. 03I
5.75%(b)	03/01/13		4,090		4,551,025
5.75%	03/01/19		390		428,543
New York City Transitional Fin. Auth. Rev., Ser. 02A
5.25%	11/01/11		3,300		3,532,089
Tobacco Settlement Fin. Corp. Rev., Ser. 03A-1
5.50%	06/01/14		6,075		6,317,332
					14,828,989
North Carolina — 2.8%
Mun. Pwr. Agcy. Rev., Catawba Elec. Prj., Ser. 92A
6.00%	01/01/10		300		319,809
North Carolina St. Hwy. GO, Ser. 04
5.00%	05/01/15		9,325		10,099,255
					10,419,064
Oregon — 2.3%
Clackamas Cnty. Unltd. GO, Sch. Dist. No. 62 Oregon City Prj., Ser. 00C
5.50%(b)	06/15/10		3,185		3,374,890
Port Portland Arpt. Rev., Ser. 99
5.50%	07/01/24		5,000		5,227,250
					8,602,140
Pennsylvania — 2.5%
Delaware Cnty. Auth. Rev., Mercy Hlth. Corp. Prj., Ser. 96
5.75%	12/15/20		2,400		2,452,056
Philadelphia Ind. Dev. Auth. Arpt. Fac. Rev., Aero Philadelphia LLC Prj., Ser. 99 AMT
5.25%	01/01/09		400		401,280

2

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

AMT-FREE MUNICIPAL BOND PORTFOLIO (CONTINUED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS (Continued)
Pennsylvania (Continued)
Philadelphia Ind. Dev. Auth. Rev., PGH Dev. Corp. Prj., Ser. 93
5.25%	07/01/17	$	1,935	$	1,936,587
Philadelphia Sch. Dist. GO, Ser. 99C
5.75%	03/01/10		4,000		4,248,360
					9,038,283
Puerto Rico — 0.9%
Pub. Fin. Corp. Cmwlth. Approp. Rev., Ser. 02E
5.50%(b)	02/01/12		2,990		3,246,123
Rhode Island — 0.7%
Rhode Island Depositors Econ. Protection Corp. SO, Ser. 93
5.62%	08/01/09		355		365,568
5.62%(b)	08/01/09		190		195,717
Rhode Island St. Health & Edl. Bldg. Corp. Rev., Hosp. Fing.-Lifespan Prj., Ser. 97
5.50%(b)	05/15/07- 05/15/16		2,000		2,053,228
					2,614,513
South Carolina — 1.4%
Scago Edl. Facs. Corp. Sch. Dist. Rev., Ser. 06
4.75%	12/01/26		5,000		5,091,350
Texas — 4.5%
Grand Prairie Indpt. Sch. Dist. GO, Ser. 00A
5.80%(b)	08/15/11		4,925		5,365,344
Texas Wtr. Fin. Assist. GO, Ser. 00
5.75%	08/01/22		3,445		3,670,647
Travis Cnty. Hlth. Fac. Dev. Corp. Rev., Ascension Hlth. Credit Prj., Ser. 99A
5.88%(b)	11/15/09		1,980		2,119,036
Univ. Texas Fing. Sys. Rev., Ser. B
5.25%	08/15/15		5,000		5,520,350
					16,675,377
Utah — 0.0%
Salt Lake City Hosp. Rev., Ser. 88A
8.12%(b)	05/15/15		100		117,694
Virginia — 3.1%
Pocahontas Pkwy. Toll Rd. Rev., Ser. 98B
5.85%(b)(c)	08/15/08		14,300		5,788,068
Virginia St. GO, Ser. 05A
5.00%	06/01/19		5,000		5,423,600
					11,211,668
Washington — 7.3%
Douglas Cnty. Pub. Util. Dist. Wells Hydroelectric Rev., Ser. 05B
5.00%	09/01/30		5,000		5,302,850
King Cnty. Unltd. GO, Sch. Dist. No. 414 Lake Washington Prj., Ser. 00
5.75%(b)	12/01/10		500		537,845
Pierce Cnty. Unltd. GO, Sch. Dist. No. 416 White River Prj., Ser. 00
6.00%(b)	12/01/10		5,345		5,797,935
Washington St. GO, Ser. 00B
6.00%(b)	01/01/10		14,000		14,928,480
					26,567,110
TOTAL MUNICIPAL BONDS (Cost $335,412,306)					345,867,244
MORTGAGE PASS-THROUGHS — 0.0%
Government National Mortgage Association
6.00% (Cost $2,862)	11/15/31		3		2,805
AFFILIATED INVESTMENTS — 8.0%
Delaware Vy. Regl. Fin. Auth. Loc. Govt. Rev., Ser. 02
5.75%(f)	07/01/32		10,000		12,110,455
Puerto Rico Cmwlth. Infra. Fin. Auth. SO, Ser. 00A
5.50%(f)	10/01/40		15,950		17,108,519
TOTAL AFFILIATED INVESTMENTS (Cost $26,956,833)					29,218,974
		NUMBER OF SHARES
MONEY MARKET FUND — 1.4%
Wilmington Trust Tax-Free Money Market Fund
(Cost $5,000,000)			5,000,000		5,000,000
TOTAL INVESTMENTS IN SECURITIES — 103.7% (Cost $367,372,001(a))					380,089,023
OTHER ASSETS IN EXCESS OF LIABILITIES — 1.5%					5,384,259
LIABILITY FOR TRUST CERTIFICATES INCLUDING INTEREST AND FEES PAYABLE — (5.2)%					(18,868,514	)
NET ASSETS — 100.0%				$	366,604,768

(a) Cost for federal income tax purposes is $348,742,001. The difference between book-basis and tax-basis is attributable primarily to the difference between book and tax treatment of residual interests in tender option bond trusts. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	12,968,605
Gross unrealized depreciation		(251,583	)
	$	12,717,022

3

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

AMT-FREE MUNICIPAL BOND PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED)

(PERCENTAGE OF NET ASSETS)

(b) This bond is prerefunded. U.S. government securities, held in escrow, are used to pay interest on this security, as well as refund the bond in full at date indicated, typically at a premium to par.

(c) The rate shown is the effective yield on the zero coupon bonds at the time of purchase.

(d) For purposes of amortized cost valuation, the maturity date of this instrument is considered to be the earlier of the next date on which the security can be redeemed at par, or the next date on which the rate of interest is adjusted. Rate shown is rate as of December 31, 2006.

(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. As of December 31, 2006, the Portfolio held 4.7% of its net assets, with a current market value of $17,344,740, in securities restricted as to resale.

(f) Security represents underlying bonds transferred to a separate securitization trust established in a tender option bond transaction in which the Portfolio acquired the residual interest certificates. These securities serve as collateral in a financing transaction.

4

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

OHIO MUNICIPAL BOND PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS — 84.9%
Multi-State — 6.1%
Charter Mac Equity Issue Tr., Ser. 99
6.62%(b)	06/30/09	$	1,000	$	1,053,590
Charter Mac Equity Issue Tr., Ser. 00
7.60%(b)	11/30/10		1,000		1,106,450
MuniMae Tax-Exempt Bond Subs., LLC, Ser. 00
6.88%(b)	06/30/09		2,000		2,112,960
7.75%(b)	11/01/10		2,000		2,224,280
					6,497,280
Ohio — 70.6%
Akron GO, Ser. 01
5.50%	12/01/21		1,000		1,075,300
Brunswick GO, Ser. 94
6.30%	12/01/14		180		181,901
Butler Cnty. Trans. Imp. Dist. Rev., Ser. 97A
6.00%(c)	04/01/08		600		629,340
Cleveland COP, Cleveland Stadium Prj., Ser. 97
5.25%	11/15/10		2,500		2,580,600
Cleveland St. Univ. Gen. Receipts Rev., Ser. 04
5.00%	06/01/34		3,000		3,161,370
Columbus GO, Ser. 02
5.00%(c)	06/15/09		2,975		3,101,616
Cuyahoga Cnty. Multi-Fam. Rev., Ser. 02 AMT
5.35%	09/20/27		955		999,159
Fairfield City Sch. Dist. GO, Ser. 94
7.45%	12/01/14		1,000		1,168,780
Greater Cleveland Regl. Trans. Auth. Cap. Imp. Rev., Ser. 01A
5.12%(c)	12/01/11		1,000		1,065,410
Hamilton Cnty. Sales Tax Rev., Ser. 01B
5.25%	12/01/32		5,000		5,246,850
Hamilton Cnty. Swr. Sys. Rev., Ser. 05B
5.00%	12/01/16		2,720		2,954,654
Hsg. Fin. Agcy. Rev., Wind River Prj., Ser. 94A AMT
5.55%	11/01/18		300		308,286
Lakota Loc. Sch. Dist. GO, Ser. 05
5.00%	12/01/16		2,115		2,300,803
Marysville Sch. Dist. GO, Ser. 98
6.00%(c)	12/01/10		1,910		2,088,432
Mason City Sch. Dist. GO, Ser. 01
5.38%(c)	12/01/11		3,000		3,229,740
Mason City Sch. Dist. GO, Ser. 05
5.00%	12/01/15		3,000		3,273,030
New Albany Cmnty. Auth. Fac. Rev., Ser. 01B
5.12%	10/01/21		2,750		2,915,220
Northwestern Sch. Dist. Rev., Wayne & Ashland Cntys. Prj., Ser. 94
7.20%	12/01/10		300		319,989
Ohio St. Bldg. Auth. Data Ctr. Rev., Ser. 93A
5.90%	10/01/07		450		457,618
Ohio St. Comm. Sch. Capital Fac. Rev., Ser. 94A
5.75%(c)	06/15/09		1,000		1,050,910
Ohio St. Env. Imp. Rev., USX Corp. Prj., Ser. 99
5.62%	05/01/29		1,000		1,050,090
Ohio St. Hgr. Ed. Fac. Rev., Denison Univ. Prj., Ser. 01
5.12%	11/01/21		3,000		3,185,370
Ohio St. Infra. Impt. GO, Ser. 97
5.35%	08/01/14		3,380		3,733,717
Ohio St. Major New St. Rev., Ser. 05
5.00%	12/15/14		3,660		3,964,732
Ohio St. Univ. GO, Ser. 02A
5.25%	12/01/18		3,290		3,535,335
Ohio St. Wtr. Dev. Auth. Poll. Ctrl. Fac. Rev., Republic Steel Prj., Ser. 95
6.38%	06/01/07		415		419,752
Ohio St. Wtr. Dev. Auth. Poll. Ctrl. Rev., Ser. 02
5.25%(c)	06/01/12		3,415		3,679,765
Ohio St. Wtr. Dev. Auth. Rev., Steel-Cargill North Star Broken Hill Prj., Ser. 95 AMT
6.30%	09/01/20		500		511,115
Pickerington Loc. Sch. Dist. Fac. Construction & Imp. Rev., Ser. 01
5.25%(c)	12/01/11		1,000		1,071,000
Scioto Cnty. Rev., Marine Term. Norfolk Southern Corp. Prj., Ser. 98
5.30%	08/15/13		3,000		3,047,490
Springboro Wtr. Sys. Rev., Ser. 98
5.00%	12/01/18		2,500		2,577,825
Trotwood-Madison City Sch. Dist. GO, Ser. 02
5.00%(c)	12/01/12		2,000		2,141,480
Univ. of Cincinnati Rev., Ser. 01A
5.00%	06/01/31		2,000		2,081,720
Univ. of Toledo Rev., Ser. 02
5.25%(c)	06/01/11		1,195		1,263,892
West Muskingum Loc. Sch. Dist. Sch. Fac. Constr. & Imp. GO, Ser. 03
5.00%	12/01/24		3,000		3,179,730
Westlake GO, Ser. 96
6.40%	12/01/08		1,095		1,122,331
					74,674,352
Puerto Rico — 8.2%
Cmwlth. GO, Ser. 02
5.50%	07/01/11		5,000		5,387,550
Pub. Fin. Corp. Cmwlth. Approp. Rev., Ser. 02E
5.50%(c)	02/01/12		2,990		3,246,124
					8,633,674
TOTAL MUNICIPAL BONDS (Cost $85,779,101)					89,805,306

5

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

OHIO MUNICIPAL BOND PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
AFFILIATED INVESTMENTS — 34.3%
Puerto Rico Cmwlth. Hwy. & Trans. Auth. Rev., Ser. 98
5.00%(d)	07/01/18	$	12,745	$	13,025,300
Puerto Rico Cmwlth. Infra. Fin. Auth. SO, Ser. 00A
5.38%(d)	10/01/16- 10/01/24		2,600		2,781,300
5.50%(d)	10/01/17- 10/01/20		7,630		8,190,134
Puerto Rico Pub. Bldgs. Auth. Govt. Facs. Rev., Ser. 97B
5.00%(d)	07/01/27		12,000		12,265,680
TOTAL AFFILIATED INVESTMENTS (Cost $ 34,093,490)					36,262,414
		NUMBER OF SHARES
MONEY MARKET FUND — 2.3%
Wilmington Trust Tax-Free Money Market Fund (Cost $ 2,432,118)			2,432,118		2,432,118
TOTAL INVESTMENTS IN SECURITIES — 121.5% (Cost $ 122,304,709(a))					128,499,838
OTHER ASSETS IN EXCESS OF LIABILITIES — 1.0%					1,092,194
LIABILITY FOR TRUST CERTIFICATES INCLUDING INTEREST AND FEES PAYABLE — (22.5)%					(23,795,066	)
NET ASSETS — 100.0%				$	105,796,966

(a) Cost for federal income tax purposes is $98,879,709. The difference between book-basis and tax-basis is attributable primarily to the difference between book and tax treatment of residual interests in tender option bond trusts. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	6,206,062
Gross unrealized depreciation		(10,933	)
	$	6,195,129

(b) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. As of December 31, 2006, the Portfolio held 6.1% of its net assets, with a current market value of $6,497,280, in securities restricted as to resale.

(c) This bond is prerefunded. U.S. government securities, held in escrow, are used to pay interest on this security, as well as refund the bond in full at date indicated, typically at a premium to par. (d) Security represents underlying bonds transferred to a separate securitization trust established in a tender option bond transaction in which the Portfolio acquired the residual interest certificates. These securities serve as collateral in a financing transaction.

(d) Security represents underlying bonds transferred to a separate securitization trust established in a tender option bond transaction in which the Protfolio acquired the residual interest certificates. These securities serve as collateral in a financing transaction.

6

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

DELAWARE MUNICIPAL BOND PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS — 75.3%
Delaware — 64.9%
Delaware River & Bay Auth. Rev., Ser. 03
5.25%(b)	01/01/13	$	1,000	$	1,083,900
Delaware River & Bay Auth. Rev., Ser. 05
5.00%	01/01/24		1,000		1,065,110
Delaware St. Econ. Dev. Auth. Poll. Ctrl. Rev., Delmarva Pwr. Prj., Ser. 02B
5.20%	02/01/19		1,000		1,054,770
Delaware St. Econ. Dev. Auth. Rev., Del. Tech. Pk. Univ. Del. Prj., Ser. 00
6.00%	02/01/21		1,000		1,073,320
Delaware St. Econ. Dev. Auth. Rev., Delmarva Pwr. Prj., Ser. 00 AMT
5.65%	07/01/28		3,850		4,016,204
Delaware St. Econ. Dev. Auth. Rev., First Mtg. Gilpin Prj., Ser. 98
5.62%	07/01/19		2,000		2,056,400
Delaware St. Econ. Dev. Auth. Rev., United Wtr. Delaware, Inc. Prj., Ser. 95 AMT
6.20%	06/01/25		2,000		2,019,200
Delaware St. Econ. Dev. Auth. Rev., Wtr. Dev. Prj., Ser. 92B
6.45%	12/01/07		1,165		1,192,040
Delaware St. GO, Ser. 04A
5.00%	01/01/09		2,000		2,055,260
Delaware St. Hlth. Fac. Auth. Rev., Beebe Med. Ctr. Prj., Ser. 04A
5.50%	06/01/24		1,000		1,070,930
Delaware St. Hlth. Fac. Auth. Rev., Catholic Hlth. East Prj., Ser. 03D
5.12%	11/15/24		1,750		1,831,900
5.25%	11/15/28		2,225		2,350,957
Delaware St. Hlth. Fac. Auth. Rev., Christiana Care Hlth. Svcs. Prj., Ser. 03
5.25%	10/01/12		2,750		2,955,700
Delaware St. Hsg. Auth. Rev., Multi-Fam. Mtg. Prj., Ser. 92C
7.38%	01/01/15		1,420		1,419,986
Delaware St. Hsg. Auth. Rev., Multi-Fam. Mtg. Prj., Ser. 01A
5.40%	07/01/24		2,555		2,633,234
Delaware St. Hsg. Auth. Rev., Sr. Sgl. Fam. Mtg. Prj., Ser. 00 AMT
5.90%	07/01/20		1,010		1,025,615
Delaware St. Hsg. Auth. Rev., Sr. Sgl. Fam. Mtg. Prj., Ser. 02A AMT
5.40%	01/01/34		585		601,690
Delaware St. Sld. Wst. Auth. Poll. Ctrl. Rev., Ser. 06
5.00%	06/01/23		2,000		2,133,000
Delaware St. Trans. Auth. Trans. Sys. Rev., Ser. 97
5.00%	07/01/08		1,000		1,016,820
Delaware Trans. Auth. Sys. Rev., Ser. 05
5.00%	07/01/12		1,500		1,599,405
New Castle Cnty. GO, Ser. 02A
5.25%	10/01/12		1,745		1,889,608
Wilmington GO, Ser. 02
5.38%	06/01/17		1,500		1,613,220
Wilmington Pk. Auth. Gtd. Pk. Rev., Ser. 02
5.25%	09/15/14- 09/15/15		2,965		3,263,684
					41,021,953
Multi-State — 10.3%
Charter Mac Equity Issue Tr., Ser. 99
6.62%(c)	06/30/09		1,000		1,053,590
Charter Mac Equity Issue Tr., Ser. 00
7.60%(c)	11/30/10		1,000		1,106,450
MuniMae Tax-Exempt Bond Subs., LLC, Ser. 00
6.88%(c)	06/30/09		2,000		2,112,960
7.75%(c)	11/01/10		2,000		2,224,280
					6,497,280
Puerto Rico — 0.1%
Pub. Fin. Corp. Cmwlth. Approp. Rev., Ser. 98A
5.38%(d)	06/01/14		50		55,397
TOTAL MUNICIPAL BONDS (Cost $46,129,737)					47,574,630
AFFILIATED INVESTMENTS — 58.5%
Puerto Rico Cmwlth. Infra. Fin. Auth. SO, Ser. 00A
5.38%(d)	10/01/16- 10/01/24		2,600		2,781,300
5.50%(d)	10/01/17- 10/01/20		7,630		8,190,134
Puerto Rico Pub. Fin. Corp. Cmwlth. Approp. Rev., Ser. 98A
5.38%(d)	06/01/12- 06/01/14		23,700		25,981,532
TOTAL AFFILIATED INVESTMENTS (Cost $34,508,782)					36,952,966
		NUMBER OF SHARES
MONEY MARKET FUND — 2.2%
Wilmington Trust Tax-Free Money Market Fund (Cost $1,368,304)			1,368,304		1,368,304
TOTAL INVESTMENTS IN SECURITIES — 136.0% (Cost $ 82,006,823(a))					85,895,900
LIABILITIES IN EXCESS OF OTHER ASSETS — (0.4)%					(257,711	)
LIABILITY FOR TRUST CERTIFICATES INCLUDING INTEREST AND FEES PAYABLE — (35.6)%					(22,475,628	)
NET ASSETS — 100.0%				$	63,162,561

7

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

DELAWARE MUNICIPAL BOND PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED)

(PERCENTAGE OF NET ASSETS)

(a) Cost for federal income tax purposes is $59,714,763. The difference between book-basis and tax-basis net unrealized gains is attributable primarily to the tax deferral of loses on wash sales and the difference between book and tax treatment of residual interests in tender option bond trusts. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	3,975,807
Gross unrealized depreciation		(149,670	)
	$	3,826,137

(b) This bond is prerefunded. U.S. government securities, held in escrow, are used to pay interest on this security, as well as refund the bond in full at date indicated, typically at a premium to par.

(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. As of December 31, 2006, the Portfolio held 10.3% of its net assets, with a current market value of $6,497,280, in securities restricted as to resale.

(d) Security represents underlying bonds transferred to a separate securitization trust established in a tender option bond transaction in which the Portfolio acquired the residual interest certificates. These securities serve as collateral in a financing transaction.

8

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

KENTUCKY MUNICIPAL BOND PORTFOLIO

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
MUNICIPAL BONDS — 88.2%
Kentucky — 65.0%
Boone Cnty. Sch. Dist. Fin. Corp. Sch. Bldg. Rev., Ser. 00B
5.38%(b)	08/01/10	$	2,500	$	2,664,825
Bowling Green Sch. Dist. Fin. Corp. Rev., Ser. 00
5.75%	01/01/18- 01/01/20		2,185		2,323,179
Bullitt Cnty. Sch. Dist. Fin. Corp. Rev., Ser. 06
4.12%	12/01/24		1,300		1,259,089
Campbell & Kenton Cntys. Sant. Dist. Rev., Ser. 06
4.38%	08/01/30		1,500		1,481,460
4.38%	08/01/31		2,115		2,078,939
4.38%	08/01/32		2,275		2,235,347
Frankfort Elec. & Wtr. Plant Bd. Rev., Ser. 99
5.60%	12/01/19		1,045		1,107,084
Grayson Cnty. Sch. Dist. Fin. Corp. Sch. Bldg. Rev., Ser. 95B
5.95%(b)	01/01/08		430		430,052
Hardin Cnty. Sch. Dist. Fin. Corp. Sch. Bldg. Rev., Ser. 00
5.50%(b)	02/01/10		1,675		1,779,520
Hopkins Cnty. GO, Detention Fac. Prj., Ser. 00
5.75%(b)	02/01/10		1,800		1,925,334
Hsg. Corp. Hsg. Rev., Ser. 01F AMT
5.45%	01/01/32		2,990		3,081,075
Hsg. Corp. Hsg. Rev., Ser. 06U AMT
4.85%	07/01/27		2,305		2,358,937
Jefferson Cnty. Sch. Dist. Fin. Corp. Sch. Bldg. Rev., Ser. 99A
5.25%	01/01/14		2,000		2,090,300
Kenton Cnty. Arpt. Bd. Arpt. Rev., Cincinnati Northern Kentucky Prj., Ser. 97A AMT
6.30%	03/01/15		1,000		1,024,080
Kentucky Econ. Dev. Fin. Auth. Hlth. Sys. Rev., Norton Healthcare, Inc. Prj., Ser. 00A
6.62%(b)	10/01/10		1,370		1,518,604
6.62%	10/01/28		380		420,652
Kentucky St. Property & Bldg. Comm. Rev., Prj. 65, Ser. 00
5.95%(b)	02/01/10		2,325		2,476,079
Kentucky St. Property & Bldg. Comm. Rev., Prj. 85, Ser. 05
5.00%	08/01/15		1,000		1,088,580
Kentucky St. Tpke. Auth. Econ. Dev. Rev., Revitalization Prj., Ser. 95
6.50%	07/01/08		3,000		3,125,040
Kentucky St. Tpke. Auth. Econ. Dev. Rev., Revitalization Prj., Ser. 01A
5.50%	07/01/15		1,000		1,124,110
Lexington-Fayette Urban Cnty. Govt. GO, Ser. 00A
5.75%	02/01/20		1,500		1,598,700
Lexington-Fayette Urban Cnty. Govt. Swr. Sys. Rev., Ser. 01A
5.00%	07/01/20- 07/01/21		3,775		3,983,191
Louisville & Jefferson Cnty. Met. Gov. Hlth. Sys. Rev., Norton Health Care, Inc. Prj., Ser. 06
5.25%	10/01/36		1,000		1,051,360
Louisville & Jefferson Cnty. Met. Swr. & Drain Sys. Rev., Ser. 97A
6.25%(b)	05/15/07		1,015		1,034,914
Louisville & Jefferson Cnty. Met. Swr. & Drain Sys. Rev., Ser. 99A
5.75%	05/15/33		3,750		3,986,325
Louisville & Jefferson Cnty. Regl. Arpt. Auth. Arpt. Sys. Rev., Ser. 01A AMT
5.75%	07/01/15		1,755		1,899,682
Louisville & Jefferson Cnty. Regl. Arpt. Auth. Spec. Fac. Rev., Ser. 99 AMT
5.50%	03/01/19		3,000		3,078,630
Louisville Wtrwks. Brd. Wtr. Sys. Rev., Louisville Wtr. Co. Prj., Ser. 00
5.25%	11/15/16		2,590		2,729,834
					54,954,922
Multi-State — 9.1%
Charter Mac Equity Issue Tr., Ser. 99
6.62%(c)	06/30/09		1,000		1,053,590
Charter Mac Equity Issue Tr., Ser. 00
7.60%(c)	11/30/10		4,000		4,425,800
MuniMae Tax-Exempt Bond Subs., LLC, Ser. 00
7.75%(c)	11/01/10		2,000		2,224,280
					7,703,670
Ohio — 2.9%
Hamilton Cnty. Hosp. Fac. Rev., Ser. 02A VRDN
3.87%(d)	01/08/07		2,400		2,400,000
Puerto Rico — 11.2%
Cmwlth. Hwy. & Trans. Auth. Rev., Ser. 00C
6.00%(b)	07/01/10		5,000		5,436,000
Pub. Fin. Corp. Cmwlth. Approp. Rev., Ser. 02E
5.50%(b)	02/01/12		3,740		4,060,369
					9,496,369
TOTAL MUNICIPAL BONDS (Cost $70,620,377)					74,554,961
AFFILIATED INVESTMENTS — 19.0%
Puerto Rico Cmwlth. Infra. Fin. Auth. SO, Ser. 97A
5.00%(e)	07/01/12		5,000		5,122,250

9

BLACKROCK FUNDS

SCHEDULE OF INVESTMENTS

KENTUCKY MUNICIPAL BOND PORTFOLIO (CONCLUDED)

AS OF DECEMBER 31, 2006 (UNAUDITED) (PERCENTAGE OF NET ASSETS)	MATURITY	PAR (000)		VALUE
AFFILIATED INVESTMENTS (Continued)
Puerto Rico Cmwlth. Infra. Fin. Auth. SO, Ser. 00A
5.38%(e)	10/01/16- 10/01/24	$	2,600	$	2,781,300
5.50%(e)	10/01/17- 10/01/20		7,630		8,190,134
TOTAL AFFILIATED INVESTMENTS (Cost $15,306,810)					16,093,684
		NUMBER OF SHARES
MONEY MARKET FUND — 5.2%
Wilmington Trust Tax-Free Money Market Fund (Cost $4,316,172)			4,316,172		4,316,172
TOTAL INVESTMENTS IN SECURITIES — 112.4% (Cost $90,243,359(a))					94,964,817
OTHER ASSETS IN EXCESS OF LIABILITIES — 1.2%					1,067,041
LIABILITY FOR TRUST CERTIFICATES INCLUDING INTEREST AND FEES PAYABLE — (13.6)%					(11,517,020	)
NET ASSETS — 100.0%				$	84,514,838

(a) Cost for federal income tax purposes is $78,901,748. The difference between book-basis and tax-basis net unrealized gains is attributable primarily to the tax deferral of loses on wash sales and the difference between book and tax treatment of residual interests in tender option bond trusts. The gross unrealized appreciation (depreciation) on a tax basis is as follows:

Gross unrealized appreciation	$	4,782,608
Gross unrealized depreciation		(88,867	)
	$	4,693,741

(b) This bond is prerefunded. U.S. government securities, held in escrow, are used to pay interest on this security, as well as refund the bond in full at date indicated, typically at a premium to par.

(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. As of December 31, 2006, the Portfolio held 9.1% of its net assets, with a current market value of $7,703,670, in securities restricted as to resale.

(d) For purposes of amortized cost valuation, the maturity date of this instrument is considered to be the earlier of the next date on which the security can be redeemed at par, or the next date on which the rate of interest is adjusted. Rate shown is rate as of December 31, 2006.

(e) Security represents underlying bonds transferred to a separate securitization trust established in a tender option bond transaction in which the Portfolio acquired the residual interest certificates. These securities serve as collateral in a financing transaction.

10

BLACKROCK FUNDS

Key to Investment Abbreviations

AMT	Alternative Minimum Tax
COP	Certificates of Participation
GO	General Obligations
SO	Special Obligations
VRDN	Variable Rate Demand Notes

11

Item 2. Controls and Procedures.

(a) The Registrant’s principal executive and principal financial officers have evaluated the Registrant’s disclosure controls and procedures, including internal control over financial reporting, within 90 days of this filing. Such principal officers have concluded that as of January 26, 2007 the Registrant’s disclosure controls and procedures were effective in design and operation to reasonably ensure that information required to be disclosed by the Registrant in this Form N-Q was recorded, processed, summarized, and reported within the required time periods, and were sufficient to form the basis of the certifications required by Rule 30a-(2) of the Investment Company Act of 1940, as amended. Prior to reaching that conclusion, such principal officers had become aware of matters relating to the Registrant’s participation in certain inverse floater structures that necessitated restatement of financial information included in the Registrant’s annual report to shareholders on the amended Form N-CSR. As a result, management of the Registrant has reevaluated certain disclosure controls and procedures determined not to be effective, as discussed more fully below.

Management of the Registrant is responsible for establishing and maintaining effective internal control over financial reporting. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of controls. The Registrant’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Such internal control includes policies and procedures that provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Registrant’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the Registrant’s ability to initiate, authorize, record, process or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the Registrant’s annual or interim financial statements that is more than inconsequential will not be prevented or detected. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

Subsequent to the initial filing of the Registrant’s Form N-CSR, the Registrant identified the following control deficiency, that was determined to be a material weakness, as defined above, in the Registrant’s internal control over financial reporting. The Registrant’s controls related to the review and analysis of relevant terms and conditions of transfers of certain assets pertaining to inverse floater structures were not operating effectively to appropriately determine whether the transfers of assets qualified for sale accounting under the provisions of Statement of Financial Accounting Standards No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities” (“SFAS 140”). As a result these controls did not detect that certain transfers were not appropriately recorded as borrowings. Accordingly, the Registrant’s financial statements as of and for the period ended September 30, 2006, including prior periods where applicable, were restated to appropriately reflect transfers of such securities as secured borrowings and to report the related income and expense. These adjustments had no impact on net assets, net asset value per share or total return.

Subsequent to September 30, 2006, but prior to the evaluation of the design and operation of the Registrant’s disclosure controls and procedures at January 26, 2007, the Registrant’s disclosure controls and procedures were modified to enhance the review and analysis of the relevant terms and conditions of transfers of securities in connection with inverse floater structures in light of SFAS 140.

(b) There have been no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940, as amended) that occurred during the first fiscal quarter of the Registrant’s fiscal year that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting. However, as discussed above, subsequent to September 30, 2006, the Registrant has enhanced controls related to the application of SFAS 140.

Item 3. Exhibits.

Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.

SIGNATURES

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.

(Registrant) BlackRock Funds^SM

By (Signature and Title)	/s/ Henry Gabbay
	Henry Gabbay, President and Principal Executive Officer

Date February 23, 2007

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 (Signature and Title)	/s/ Henry Gabbay
	Henry Gabbay, President and Principal Executive Officer

Date February 23, 2007

By (Signature and Title)	/s/ Donald C. Burke
	Donald C. Burke, Treasurer and Principal Financial Officer

Date February 23, 2007

EX-99.CERT

Certification Pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act

I, Henry Gabbay, certify that:

1. I have reviewed this report on Form N-Q of BlackRock Funds^SM;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the Registrant as of the end of the fiscal quarter for which the report is filed;

4. The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer(s) and I have disclosed to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date:	February 23, 2007	/s/ Henry Gabbay
		Henry Gabbay, President and Principal Executive Officer

Certification Pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act

I, Donald C. Burke, certify that:

1. I have reviewed this report on Form N-Q of BlackRock Funds^SM;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the Registrant as of the end of the fiscal quarter for which the report is filed;

4. The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer(s) and I have disclosed to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date:	February 23, 2007	/s/ Donald C. Burke
		Donald C. Burke, Treasurer and Principal Financial Officer