UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: 811-05742
Name of Fund: | BlackRock Funds |
BlackRock Advantage Emerging Markets Fund |
BlackRock Global Long/Short Equity Fund |
Fund Address: | 100 Bellevue Parkway, Wilmington, DE 19809 |
Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Funds, 55 East 52nd Street, New York, NY 10055
Registrants telephone number, including area code: (800) 441-7762
Date of fiscal year end: 04/30/2021
Date of reporting period: 04/30/2021
Item 1 Report to Stockholders
(a) The Report to Shareholders is attached herewith.
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APRIL 30, 2021 |
2021 Annual Report
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BlackRock FundsSM
· | BlackRock Advantage Emerging Markets Fund |
· | BlackRock Global Long/Short Equity Fund |
Not FDIC Insured May Lose Value No Bank Guarantee |
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Fund Summary as of April 30, 2021 | BlackRock Advantage Emerging Markets Fund |
Investment Objective
BlackRock Advantage Emerging Markets Funds (the Fund) investment objective is to seek long-term capital appreciation.
Portfolio Management Commentary
How did the Fund perform?
For the 12-month period ended April 30, 2021, the Fund outperformed its benchmark, the MSCI Emerging Markets Index.
What factors influenced performance?
Overall, the Fund performed well in a generally favorable market environment. Emerging market (EM) equities got off to a strong start, buoyed by U.S. dollar weakness, and continued to benefit from the broader reopening theme throughout the first half of the period. During the fourth quarter of 2020, however, momentum styles experienced their sharpest drawdown since the global financial crisis, as investors shifted to cyclical exposures due to positive news on COVID-19 vaccine development.
As 2021 began, EM equities regained their upward momentum, driven by reflationary trends that made investors more risk tolerant as well as by vaccine rollouts. EM equities outperformed their developed market (DM) counterparts until February 2021, when a sudden spike in U.S. interest rates in response to inflationary pressures weighed on the market. This ultimately benefited styles focusing on reflationary trends, especially within the energy and financials sectors, as value outperformed growth and momentum. Toward the end of the period, equities saw a rotation back toward physical world stocks away from virtual world stocks, which reversed their performance during most of 2020. EM equities were relatively weak going into period end compared to their DM counterparts, largely due to a wave of COVID-19 cases and deaths in India.
The biggest contributors to the Funds relative performance were sentiment-based insights that were able to position the portfolio correctly across the ever-changing market backdrop. Specifically, an insight designed to combine signals and data sources optimally was additive. A version of this insight designed to do well during momentum drawdowns was the top contributor, given the style weakness during the period. This insight motivated an overweight to machinery and semiconductor stocks, boosting performance as economies reopened and production levels recovered from shutdowns.
Macro thematic insights also aided performance. In particular, an insight that takes the opposite view on crowded positions held by generic style managers was a top contributor. While this insight struggled early in 2021 during the style shift, it benefited the Fund both in 2020 as many generic factor-focused managers struggled and late in the period as the value rally subsided.
The Funds fundamental measures were also contributors. Value-based measures notably performed well in the first quarter of 2021 amid reflationary market trends. Traditional measures such as measuring valuations by sales metrics supported fund performance. Additionally, the Funds environmental, social and governance (ESG) related measures were additive, with an insight that looks to capture investor flow into ESG-related positions driving gains. Notably, these proprietary ESG insights continued to demonstrate differentiation and resilience across different market environments.
Despite the Funds outperformance, however, there were measures that struggled during the period. Specifically, insights with a preference for less highly levered stocks detracted from performance amid a market environment that favored risk-taking and the broader reopening theme. Also, while macro thematic themes performed well in the aggregate, top-down country positioning dragged on performance. Specifically, an overweight to India weighed on relative return, given the countrys severe outbreak of COVID-19 late in the period. Additionally, select dynamic timing signals underperformed, as insights prompted overweight positions in consumer services stocks, which performed poorly.
The Fund was fully invested throughout the period. The investment adviser kept a higher average cash balance over the period, which was hedged by MSCI Emerging Markets Index futures to manage client flows. The Funds cash exposure had no material impact on Fund performance.
Describe recent portfolio activity.
Over the course of the period, the Fund maintained a balanced allocation of risk across all major return drivers. There were, however, several new signals added within the stock selection model. For instance, the Fund built on its alternative data capabilities by adding an insight that captures brand sentiment toward retail names. Additionally, given the dynamic nature of the current market environment, the Fund instituted enhanced signal constructs to identify emerging trends such as sentiment around vaccine development and its impact on economic reopening.
Describe portfolio positioning at period end.
Relative to the benchmark, the Fund ended the period with largely neutral positioning from a sector perspective. The Fund had slight overweight positions in the industrials and information technology sectors and maintained slight underweights in financials and consumer discretionary stocks. From a geographical perspective, the Fund had slight overweight positions to South Africa and Brazil and maintained underweights to India and China.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
4 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Fund Summary as of April 30, 2021 (continued) | BlackRock Advantage Emerging Markets Fund |
TOTAL RETURN BASED ON A $10,000 INVESTMENT
The Fund commenced operations on October 6, 2011.
(a) | Assuming maximum sales charges, if any, transaction costs and other operating expenses, including investment advisory fees. Institutional Shares do not have a sales charge. |
(b) | Under normal circumstances, the Fund seeks to invest at least 80% of its net assets plus the amount of any borrowings for investment purposes in equity securities issued by, or tied economically to, companies in emerging markets and derivatives that have similar economic characteristics to such securities. The Funds total returns prior to June 12, 2017 are the returns of the Fund when it followed different investment strategies under the name BlackRock Emerging Markets Long/Short Equity Fund. |
(c) | A free float-adjusted market capitalization index designed to measure equity market performance of emerging markets. The MSCI Emerging Markets Index consists of 26 emerging market country indexes: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates. |
Performance Summary for the Period Ended April 30, 2021
Average Annual Total Returns(a)(b) | ||||||||||||||||||||||||||||
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1 Year | 5 Years | Since Inception(c) | ||||||||||||||||||||||||||
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6-Month Total Returns |
Without Sales Charge |
With Sales Charge |
Without Sales Charge |
With Sales Charge |
Without Sales Charge |
With Sales Charge |
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Institutional |
22.19 | % | 52.00 | % | N/A | 7.60 | % | N/A | 3.62 | % | N/A | |||||||||||||||||
Investor A |
22.00 | 51.62 | 43.66 | % | 7.28 | 6.13 | % | 3.35 | 2.77 | % | ||||||||||||||||||
Investor C |
21.47 | 50.49 | 49.49 | 6.48 | 6.48 | 2.70 | 2.70 | |||||||||||||||||||||
Class K |
22.22 | 52.19 | N/A | 7.63 | N/A | 3.63 | N/A | |||||||||||||||||||||
MSCI Emerging Markets Index. |
22.95 | 48.71 | N/A | 12.50 | N/A | 7.24 | N/A |
(a) | Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See About Fund Performance for a detailed description of share classes, including any related sales charges and fees, and how performance was calculated for certain share classes. |
(b) | Under normal circumstances, the Fund seeks to invest at least 80% of its net assets plus the amount of any borrowings for investment purposes in equity securities issued by, or tied economically to, companies in emerging markets and derivatives that have similar economic characteristics to such securities. The Funds total returns prior to June 12, 2017 are the returns of the Fund when it followed different investment strategies under the name BlackRock Emerging Markets Long/Short Equity Fund. |
(c) | The Fund commenced operations on October 6, 2011. |
N/A Not applicable as the share class and index do not have a sales charge.
Past performance is not an indication of future results.
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
F U N D S U M M A R Y |
5 |
Fund Summary as of April 30, 2021 (continued) | BlackRock Advantage Emerging Markets Fund |
Expense Example
Actual | Hypothetical(a) | |||||||||||||||||||||||||||||||
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Beginning Account Value (11/01/20) |
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Ending Account Value (04/30/21) |
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Expenses Paid During the Period(b) |
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Ending Account Value (04/30/21) |
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Expenses Paid During the Period(b) |
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Annualized Expense Ratio |
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Institutional |
$ | 1,000.00 | $ | 1,221.90 | $ | 4.68 | $ | 1,000.00 | $ | 1,020.58 | $ | 4.26 | 0.85 | % | ||||||||||||||||||
Investor A. |
1,000.00 | 1,220.00 | 6.27 | 1,000.00 | 1,019.14 | 5.71 | 1.14 | |||||||||||||||||||||||||
Investor C |
1,000.00 | 1,214.70 | 10.43 | 1,000.00 | 1,015.37 | 9.49 | 1.90 | |||||||||||||||||||||||||
Class K |
1,000.00 | 1,222.20 | 4.46 | 1,000.00 | 1,020.78 | 4.06 | 0.81 |
(a) | Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365. |
(b) | For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the six-month period shown). |
See Disclosure of Expenses for further information on how expenses were calculated.
Portfolio Information
(a) | Rounds to less than 1% of net assets. |
# | Includes holdings within countries/geographic regions that are 1% or less of net assets. Please refer to the Schedule of Investments for such countries. |
6 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Fund Summary as of April 30, 2021 | BlackRock Global Long/Short Equity Fund |
Investment Objective
BlackRock Global Long/Short Equity Funds (the Fund) investment objective is to seek total return over the long term.
Portfolio Management Commentary
How did the Fund perform?
For the 12-month period ended April 30, 2021, the Fund outperformed its benchmark, the ICE BofA 3-Month U.S. Treasury Bill Index.
What factors influenced performance?
Overall, the Fund performed well amid a volatile and uncertain economic backdrop. Early in the period, markets benefited from the early stages of reopening after COVID-19 lockdown measures imposed earlier in 2020. However, it was stronger-than-expected efficacy from vaccine developers in November that provided an accelerated market recovery. This prompted a sharp rotation away from momentum styles toward cyclical styles, as investors moved their expectations for an economic rebound forward. This became the dominant theme late in the period, as expedited vaccine rollouts provided a more ebullient market tone.
Overall, trend-based sentiment measures contributed the most to the Funds relative performance, having correctly captured the evolving market backdrop. Early in the period, these insights correctly identified emerging trends during the lockdown and initial reopening phases. Higher-frequency insights that look at data on online search activity, credit card transactions, and mobile application use all performed well, particularly among stocks in the retail industry. Despite coming under pressure in November 2020, trend-based measures once again led gains as the recovery broadened. Insights that tactically identified stocks sensitive to sentiment associated with news about vaccines and their rollout performed well. Elsewhere within sentiment, insights that took opposing views from consensus hedge-fund short positions were rewarded during the severe deleveraging in January 2021.
Macro thematic insights were also additive, motivating a posture favoring value and shorting growth and momentum toward the end of 2020, as regime-timing insights captured reflationary pressures. This benefited the Fund by producing sizable exposure to the recovery trends that boosted the markets performance. Country positioning performed well, with long positions in the United States and short positions in Europe based on relative speeds of vaccine rollouts and increased mobility. Performance was also strong along the industry spectrum, with long positions in financials and energy driving gains amid a rally in value stocks. Similarly, fundamental value insights were some of the strongest performers late in the period during 2021, having benefited from their style preference. Top-down models motivated a net long position in November 2020, which the Fund maintained until the end of the period. The total net long equity exposure was approximately 9%, which contributed to overall performance as it successfully captured the markets performance as equities reached new highs.
Conversely, despite broad strength, select insights partially offset gains and detracted from relative performance. During September 2020, the shift in investor focus away from company fundamentals toward macro risk weighed on performance. The combination of the U.S. election, adverse trends in COVID-19 case counts, and expectations for further fiscal policy support became dominant themes, and investors took profits from previous pandemic-related winners. The Funds short positions struggled during the resulting rotation, with losses unsurprisingly coming from fundamental quality measures. Performance continued to struggle into October 2020, with insights that seek to capture fundamental trends coming under pressure during earnings season.
Finally, given the strong valuation preference that manifested during the period, the Funds ESG-related measures slightly declined, with losses concentrated during 2021. These signals performed well during the early stages of the pandemic, often providing much-needed ballast and resilience. However, the value rally that became the dominant theme later in the period put pressure on the measures, as companies that score poorly by most ESG standards outperformed. As such, ESG flow-related insights that look at investor positioning based on carbon intensity were leading detractors from performance.
During the period, the Fund used derivatives to efficiently implement its stock selection strategy. The Funds use of derivatives contributed positively to Fund performance.
The Fund was fully invested throughout the period. The Funds cash exposure had no material impact on performance, as cash was principally held in conjunction with the Fund taking long and short positions via the use of total return swap contracts.
Describe recent portfolio activity.
Over the course of the period, the portfolio maintained a balanced allocation of risk across all major return drivers. There were, however, several new signals added within the stock selection group of insights. These included a new insight that looked to capture companies within Europe likely to benefit from fiscal stimulus measures supporting sustainable businesses. Additionally, given the dynamic nature of the current market environment, the Fund instituted enhanced signal constructs to identify emerging trends such as sentiment around vaccine development and sensitivity to a reflationary economic environment.
Describe portfolio positioning at period end.
The Fund maintained a pro-risk stance with a net long posture of 9%, supported by market timing macro models. The Fund retained a preference for value and volatility on the long side, and a negative stance to large-cap stocks on the short side.
Across sectors, long positions in consumer discretionary, industrials, and materials stocks underpinned the Funds stance favoring a continued reopening. These positions were funded by short positions in defensive industries such as pharmaceuticals, telecommunications stocks, and utilities. Stimulus and vaccine-related preferences dominated the Funds country positioning, with long positions in the United States, United Kingdom and Asia, and small short positions in Europe ex-U.K.
The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.
F U N D S U M M A R Y |
7 |
Fund Summary as of April 30, 2021 (continued) | BlackRock Global Long/Short Equity Fund |
TOTAL RETURN BASED ON A $10,000 INVESTMENT
The Fund commenced operations on December 20, 2012.
(a) | Assuming maximum sales charges, if any, transaction costs and other operating expenses, including investment advisory fees. Institutional Shares do not have a sales charge. |
(b) | Under normal circumstances, the Fund invests at least 80% of its total assets in equity instruments and related derivative instruments issued by, or tied economically to, companies located in developed markets. |
(c) | ICE BofA 3-Month U.S. Treasury Bill Index is an unmanaged index that tracks 3-month U.S. Treasury securities. On 3/1/2021 the Fund began to track the 4pm pricing variant of the ICE BofA 3-Month U.S. Treasury Bill Index (the Index). Historical index data prior to 3/1/2021 is for the 3pm pricing variant of the Index. Index data on and after 3/1/2021 is for the 4pm pricing variant of the Index. |
Performance Summary for the Period Ended April 30, 2021
Average Annual Total Returns(a) | ||||||||||||||||||||||||||||
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1 Year | 5 Years | Since Inception(b) |
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6-Month Total Returns |
Without Sales Charge |
With Sales Charge |
Without Sales Charge |
With Sales Charge |
Without Sales Charge |
With Sales Charge |
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Institutional |
5.74 | % | 5.21 | % | N/A | 3.52 | % | N/A | 3.53 | % | N/A | |||||||||||||||||
Investor A |
5.63 | 4.92 | (0.59 | )% | 3.23 | 2.12 | % | 3.26 | 2.60 | % | ||||||||||||||||||
Investor C |
5.25 | 4.18 | 3.18 | 2.46 | 2.46 | 2.53 | 2.53 | |||||||||||||||||||||
Class K |
5.73 | 5.24 | N/A | 3.55 | N/A | 3.56 | N/A | |||||||||||||||||||||
ICE BofA 3-Month U.S. Treasury Bill Index |
0.05 | 0.11 | N/A | 1.18 | N/A | 0.74 | N/A |
(a) | Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See About Fund Performance for a detailed description of share classes, including any related sales charges and fees, and how performance was calculated for certain share classes. |
(b) | The Fund commenced operations on December 20, 2012. |
N/A Not applicable as the share class and index do not have a sales charge.
Past performance is not an indication of future results.
Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.
Expense Example
Actual | Hypothetical(a) | |||||||||||||||||||||||||||||||
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Beginning Account Value (11/01/20) |
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Ending Account Value (04/30/21) |
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Expenses Paid During the Period(b) |
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Beginning Account Value (11/01/20) |
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Ending Account Value (04/30/21) |
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Expenses Paid During the Period(b) |
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Annualized Expense Ratio |
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Institutional |
$ | 1,000.00 | $ | 1,057.40 | $ | 8.01 | $ | 1,000.00 | $ | 1,017.01 | $ | 7.85 | 1.57 | % | ||||||||||||||||||
Investor A |
1,000.00 | 1,056.30 | 9.28 | 1,000.00 | 1,015.77 | 9.10 | 1.82 | |||||||||||||||||||||||||
Investor C |
1,000.00 | 1,052.50 | 13.08 | 1,000.00 | 1,012.05 | 12.82 | 2.57 | |||||||||||||||||||||||||
Class K |
1,000.00 | 1,057.30 | 7.75 | 1,000.00 | 1,017.26 | 7.60 | 1.52 |
(a) | Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365. |
(b) | For each class of the Fund, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the six-month period shown). |
See Disclosure of Expenses for further information on how expenses were calculated.
8 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Fund Summary as of April 30, 2021 (continued) | BlackRock Global Long/Short Equity Fund |
Portfolio Information
(a) | Total investments include the gross values of long and short equity securities of the underlying derivative contracts utilized by the Fund and exclude short-term securities. |
# | Includes holdings within countries/geographic regions that are 1% or less of total investments. Please refer to the Schedule of Investments for such countries. |
F U N D S U M M A R Y |
9 |
Institutional and Class K Shares are not subject to any sales charge. These shares bear no ongoing distribution or service fees and are available only to certain eligible investors. Class K Shares performance of BlackRock Global Long/Short Equity Fund shown prior to the Class K Shares inception date of March 28, 2016 is that of Institutional Shares. Class K Shares performance of BlackRock Advantage Emerging Markets Fund shown prior to the Class K Shares inception date of January 25, 2018 is that of Institutional Shares. The performance of each Funds Class K Shares would be substantially similar to Institutional Shares because Class K Shares and Institutional Shares invest in the same portfolio of securities and performance would only differ to the extent that Class K Shares and Institutional Shares have different expenses. The actual returns of Class K Shares would have been higher than those of the Institutional Shares because Class K Shares have lower expenses than the Institutional Shares.
Investor A Shares are subject to a maximum initial sales charge (front-end load) of 5.25% and a service fee of 0.25% per year (but no distribution fee). Certain redemptions of these shares may be subject to a contingent deferred sales charge (CDSC) where no initial sales charge was paid at the time of purchase. These shares are generally available through financial intermediaries.
Investor C Shares are subject to a 1.00% CDSC if redeemed within one year of purchase. In addition, these shares are subject to a distribution fee of 0.75% per year and a service fee of 0.25% per year. These shares are generally available through financial intermediaries. These shares automatically convert to Investor A Shares after approximately eight years.
Past performance is not an indication of future results. Financial markets have experienced extreme volatility and trading in many instruments has been disrupted. These circumstances may continue for an extended period of time, and may continue to affect adversely the value and liquidity of the funds investments. As a result, current performance may be lower or higher than the performance data quoted. Refer to blackrock.com to obtain performance data current to the most recent month-end. Performance results do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Figures shown in the performance tables on the previous pages assume reinvestment of all distributions, if any, at net asset value (NAV) on the ex-dividend date or payable date, as applicable. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Distributions paid to each class of shares will vary because of the different levels of service, distribution and transfer agency fees applicable to each class, which are deducted from the income available to be paid to shareholders.
BlackRock Advisors, LLC (the Manager), each Funds investment adviser, has contractually and/or voluntarily agreed to waive and/or reimburse a portion of each Funds expenses. Without such waiver(s) and/or reimbursement(s), each Funds performance would have been lower. With respect to each Funds voluntary waiver(s), if any, the Manager is under no obligation to waive and/or reimburse or to continue waiving and/or reimbursing its fees and such voluntary waiver(s) may be reduced or discontinued at any time. With respect to each Funds contractual waiver(s), if any, the Manager is under no obligation to continue waiving and/or reimbursing its fees after the applicable termination date of such agreement. See the Notes to Financial Statements for additional information on waivers and/or reimbursements.
Shareholders of each Fund may incur the following charges: (a) transactional expenses, such as sales charges; and (b) operating expenses, including investment advisory fees, administration fees, service and distribution fees, including 12b-1 fees, acquired fund fees and expenses, and other fund expenses. The expense examples shown (which are based on a hypothetical investment of $1,000 invested on November 1, 2020 and held through April 30, 2021) are intended to assist shareholders both in calculating expenses based on an investment in each Fund and in comparing these expenses with similar costs of investing in other mutual funds.
The expense examples provide information about actual account values and actual expenses. In order to estimate the expenses a shareholder paid during the period covered by this report, shareholders can divide their account value by $1,000 and then multiply the result by the number corresponding to their Fund and share class under the heading entitled Expenses Paid During the Period.
The expense examples also provide information about hypothetical account values and hypothetical expenses based on a Funds actual expense ratio and an assumed rate of return of 5% per year before expenses. In order to assist shareholders in comparing the ongoing expenses of investing in these Funds and other funds, compare the 5% hypothetical examples with the 5% hypothetical examples that appear in shareholder reports of other funds.
The expenses shown in the expense examples are intended to highlight shareholders ongoing costs only and do not reflect transactional expenses, such as sales charges, if any. Therefore, the hypothetical examples are useful in comparing ongoing expenses only, and will not help shareholders determine the relative total expenses of owning different funds. If these transactional expenses were included, shareholder expenses would have been higher.
Derivative Financial Instruments
The Funds may invest in various derivative financial instruments. These instruments are used to obtain exposure to a security, commodity, index, market, and/or other assets without owning or taking physical custody of securities, commodities and/or other referenced assets or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage and involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the instrument. The Funds successful use of a derivative financial instrument depends on the investment advisers ability to predict pertinent market movements accurately, which cannot be assured. The use of these instruments may result in losses greater than if they had not been used, may limit the amount of appreciation a Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Funds investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.
10 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
April 30, 2021 |
BlackRock Advantage Emerging Markets Fund (Percentages shown are based on Net Assets) |
S C H E D U L E O F I N V E S T M E N T S |
11 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Advantage Emerging Markets Fund (Percentages shown are based on Net Assets) |
12 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Advantage Emerging Markets Fund (Percentages shown are based on Net Assets) |
S C H E D U L E O F I N V E S T M E N T S |
13 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Advantage Emerging Markets Fund (Percentages shown are based on Net Assets) |
Affiliates
Investments in issuers considered to be affiliate(s) of the Fund during the year ended April 30, 2021 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliated Issuer | Value at 04/30/20 |
Purchases at Cost |
Proceeds from Sales |
Net Realized Gain (Loss) |
Change in Unrealized Appreciation (Depreciation) |
Value at 04/30/21 |
Shares Held at 04/30/21 |
Income | Capital Gain Distributions from Underlying Funds |
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BlackRock Liquidity Funds, T-Fund, Institutional Class |
$ | 10,615,413 | $ | 2,781,989 | (a) | $ | | $ | | $ | | $ | 13,397,402 | 13,397,402 | $ | 3,390 | $ | | ||||||||||||||||||
SL Liquidity Series, LLC, Money Market Series(b) |
| 429 | (a) | | (429 | ) | | | | 1,566 | (c) | | ||||||||||||||||||||||||
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$ | (429 | ) | $ | | $ | 13,397,402 | $ | 4,956 | $ | | ||||||||||||||||||||||||||
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(a) | Represents net amount purchased (sold). |
(b) | As of period end, the entity is no longer held. |
(c) | All or a portion represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities. |
Derivative Financial Instruments Outstanding as of Period End Futures Contracts
Description | Number of Contracts |
Expiration Date |
Notional Amount (000) |
Value/ Unrealized Appreciation (Depreciation) |
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Long Contracts | ||||||||||||||||
MSCI Emerging Markets Index. |
143 | 06/18/21 | $ | 9,557 | $ | 61,207 | ||||||||||
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14 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Advantage Emerging Markets Fund |
Derivative Financial Instruments Categorized by Risk Exposure
As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
Assets Derivative Financial Instruments |
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Futures contracts |
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Unrealized appreciation on futures contracts(a) |
$ | | $ | | $ | 61,207 | $ | | $ | | $ | | $ | 61,207 | ||||||||||||||
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(a) | Net cumulative unrealized appreciation (depreciation) on futures contracts and centrally cleared swaps, if any, are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current days variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
For the year ended April 30, 2021, the effect of derivative financial instruments in the Statements of Operations was as follows:
Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
Net Realized Gain (Loss) from |
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Futures contracts |
$ | | $ | | $ | 3,156,513 | $ | | $ | | $ | | $ | 3,156,513 | ||||||||||||||
Swaps |
| | (68,401 | ) | | | | (68,401 | ) | |||||||||||||||||||
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$ | | $ | | $ | 3,088,112 | $ | | $ | | $ | | $ | 3,088,112 | |||||||||||||||
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Net Change in Unrealized Appreciation (Depreciation) on |
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Futures contracts |
$ | | $ | | $ | (664,746 | ) | $ | | $ | | $ | | $ | (664,746 | ) | ||||||||||||
Swaps |
| | 87,471 | | | | 87,471 | |||||||||||||||||||||
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$ | | $ | | $ | (577,275 | ) | $ | | $ | | $ | | $ | (577,275 | ) | |||||||||||||
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Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts |
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Average notional value of contracts long. |
$ | 7,433,474 | ||
Total return swaps |
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Average notional value |
$ | 127,788 |
For more information about the Funds investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Funds policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.
The following tables summarize the Funds financial instruments categorized in the fair value hierarchy. The breakdown of the Funds investments into major categories is disclosed in the Schedule of Investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets |
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Investments |
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Long-Term Investments |
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Common Stocks |
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Australia |
$ | | $ | 142,122 | $ | | $ | 142,122 | ||||||||
Brazil |
7,286,936 | | | 7,286,936 | ||||||||||||
Chile |
200,944 | | | 200,944 | ||||||||||||
China |
17,720,453 | 43,164,545 | | 60,884,998 | ||||||||||||
Colombia |
248,269 | | | 248,269 | ||||||||||||
Hong Kong |
| 141,652 | | 141,652 | ||||||||||||
Hungary |
| 263,075 | | 263,075 | ||||||||||||
India |
507,843 | 11,662,128 | | 12,169,971 | ||||||||||||
Indonesia |
| 526,211 | | 526,211 | ||||||||||||
Malaysia |
| 2,882,087 | | 2,882,087 | ||||||||||||
Mexico |
3,690,493 | | | 3,690,493 |
S C H E D U L E O F I N V E S T M E N T S |
15 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Advantage Emerging Markets Fund |
Fair Value Hierarchy as of Period End (continued)
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Common Stocks (continued) |
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Peru |
$ | | $ | 155,924 | $ | | $ | 155,924 | ||||||||
Poland |
| 1,178,698 | | 1,178,698 | ||||||||||||
Romania |
471,722 | | | 471,722 | ||||||||||||
Russia |
76,585 | 4,227,397 | | 4,303,982 | ||||||||||||
Saudi Arabia |
877,633 | 2,188,943 | | 3,066,576 | ||||||||||||
South Africa |
1,918,897 | 7,543,994 | | 9,462,891 | ||||||||||||
South Korea |
1,152,267 | 24,214,383 | | 25,366,650 | ||||||||||||
Taiwan |
545,685 | 25,923,648 | | 26,469,333 | ||||||||||||
Thailand |
| 1,848,711 | | 1,848,711 | ||||||||||||
Turkey |
279,085 | 204,896 | | 483,981 | ||||||||||||
United Arab Emirates |
190,278 | 539,254 | | 729,532 | ||||||||||||
Preferred Securities |
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Preferred Stocks |
3,693,273 | | | 3,693,273 | ||||||||||||
Short-Term Securities |
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Money Market Funds |
13,397,402 | | | 13,397,402 | ||||||||||||
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$ | 52,257,765 | $ | 126,807,668 | $ | | $ | 179,065,433 | |||||||||
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Derivative Financial Instruments(a) |
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Assets |
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Equity Contracts |
$ | 61,207 | $ | | $ | | $ | 61,207 | ||||||||
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(a) | Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
16 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Schedule of Investments April 30, 2021 |
BlackRock Global Long/Short Equity Fund (Percentages shown are based on Net Assets) |
Affiliates
Investments in issuers considered to be affiliate(s) of the Fund during the year ended April 30, 2021 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliated Issuer | Value at 04/30/20 |
Purchases at Cost |
Proceeds from Sales |
Net Realized Gain (Loss) |
Change in Unrealized Appreciation (Depreciation) |
Value at 04/30/21 |
Shares Held at 04/30/21 |
Income | Capital Gain Distributions from Underlying Funds |
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BlackRock Liquidity Funds, T-Fund, Institutional Class |
$ | 14,238,130 | $ | 4,215,879 | (a) | $ | | $ | | $ | | $ | 18,454,009 | 18,454,009 | $ | 3,743 | $ | | ||||||||||||||||||
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(a) | Represents net amount purchased (sold). |
S C H E D U L E O F I N V E S T M E N T S |
17 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
Description | Number of Contracts |
Expiration Date |
Notional Amount (000) |
Value/ Unrealized Appreciation (Depreciation) |
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Long Contracts | ||||||||||||||||
CAC 40 Index. |
119 | 05/21/21 | $ | 8,893 | $ | 32,590 | ||||||||||
Topix Index |
110 | 06/10/21 | 19,139 | (319,045 | ) | |||||||||||
S&P/TSE 60 Index |
49 | 06/17/21 | 9,053 | 22,979 | ||||||||||||
DAX Index |
27 | 06/18/21 | 12,309 | 110,572 | ||||||||||||
FTSE 100 Index |
61 | 06/18/21 | 5,844 | 6,071 | ||||||||||||
FTSE/MIB Index |
86 | 06/18/21 | 12,361 | (185,873 | ) | |||||||||||
Russell 2000 E-Mini Index |
92 | 06/18/21 | 10,403 | (253,713 | ) | |||||||||||
S&P 500 E-Mini Index |
195 | 06/18/21 | 40,700 | 1,589,310 | ||||||||||||
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1,002,891 | ||||||||||||||||
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Short Contracts | ||||||||||||||||
Amsterdam Index |
192 | 05/21/21 | 32,506 | (50,395 | ) | |||||||||||
IBEX 35 Index |
54 | 05/21/21 | 5,718 | (47,820 | ) | |||||||||||
OMXS 30 Index |
762 | 05/21/21 | 19,974 | 98,815 | ||||||||||||
MSCI Sing Index |
446 | 05/28/21 | 12,124 | (8,941 | ) | |||||||||||
SPI 200 Index. |
49 | 06/17/21 | 6,608 | 37,402 | ||||||||||||
Euro Stoxx 50 Index |
112 | 06/18/21 | 5,305 | (200,203 | ) | |||||||||||
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(171,142 | ) | |||||||||||||||
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$ | 831,749 | |||||||||||||||
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Exchange-Traded Options Purchased
Description | Number of Contracts |
Expiration Date |
Exercise Price |
Notional Amount (000) |
Value | |||||||||||||||
Call |
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Euro Stoxx Banks |
3,000 | 05/21/21 | EUR | 95.00 | EUR | 13,784 | $ | 211,896 | ||||||||||||
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Exchange-Traded Options Written
Description | Number of Contracts |
Expiration Date |
Exercise Price |
Notional Amount (000) |
Value | |||||||||||||||
Call |
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Euro Stoxx Banks |
3,000 | 05/21/21 | EUR | 100.00 | EUR 13,784 | $ | (58,610 | ) | ||||||||||||
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OTC Total Return Swaps Future
Reference Entity | Fixed Amount Paid by the Fund(a) |
Counterparty | Termination Date |
Notional Amount (000) |
Value | Upfront Premium Paid (Received) |
Unrealized Appreciation (Depreciation) |
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Swiss Market Future June 2021 |
CHF 2,763,436 | HSBC Bank PLC | 06/18/21 | CHF 3,030 | $ | (12,522 | ) | $ | | $ | (12,522 | ) | ||||||||||||||||
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(a) | At termination, the fixed amount paid (received) will be exchanged for the total return of the reference entity. |
18 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
OTC Total Return Swaps
Reference Entity |
Payment Frequency |
Counterparty(a) | Termination Date | Net Notional |
Accrued (Depreciation) |
Net Value of Reference Entity |
Gross Notional Amount Net Asset Percentage |
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Equity Securities Long/Short |
At Termination | Bank of America N.A.(b) | 02/15/23 | $ | 902,442 | $ | (279,435 | )(c) | $ | 442,332 | 29.4 | % | ||||||||||||||||
At Termination | Bank of America N.A.(d) | 02/15/23 | (785,489 | ) | 572,685 | (e) | 59,308 | 39.1 | ||||||||||||||||||||
At Termination | Deutsche Bank A.G.(f) | 09/06/21 08/21/25 | 4,485,840 | (1,169,123 | )(g) | 2,379,937 | 77.8 | |||||||||||||||||||||
At Termination | Goldman Sachs & Co.(h) | 02/27/23 02/28/23 | (1,031,734 | ) | 831,446 | (i) | 204,869 | 73.4 | ||||||||||||||||||||
At Termination | Goldman Sachs & Co.(j) | 02/27/23 02/28/23 | (2,978,340 | ) | 3,401,043 | (k) | 772,774 | 43.4 | ||||||||||||||||||||
At Termination | UBS AG(l) | 06/29/21 07/08/21 | (1,213,948 | ) | 504,755 | (m) | (849,481 | ) | 6.5 | |||||||||||||||||||
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$ | 3,861,371 | $ | 3,009,739 | |||||||||||||||||||||||||
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(a) | The Fund receives the total return on a portfolio of long positions underlying the total return swap. The Fund pays the total return on a portfolio of short positions underlying the total return swap. In addition, the Fund pays or receives a variable rate of interest, based on a specified benchmark. The benchmark and spread are determined based upon the country and/or currency of the individual underlying positions. |
(c) | Amount includes $180,675 of net dividends and financing fees. |
(e) | Amount includes $(272,112) of net dividends and financing fees. |
(g) | Amount includes $936,780 of net dividends and financing fees. |
(i) | Amount includes $(405,157) of net dividends and financing fees. |
(k) | Amount includes $(350,071) of net dividends and financing fees. |
(m) | Amount includes $140,288 of net dividends and financing fees. |
The following are the specified benchmarks (plus or minus a range) used in determining the variable rate of interest:
(b) | (d) | (f) | ||||
Range: | 0-1450 basis points | 0-1300 basis points | 18-150 basis points | |||
Benchmarks: | AUD - 1M Australian Bank Bill Rate (BBSW) | AUD - 1M Australian Bank Bill Rate (BBSW) | AUD - 1M Australian Bank Bill Rate (BBSW) | |||
Bank of Canada Overnight Rate Target | Bank of Canada Overnight Rate Target | CHF - 1W Swiss Franc LIBOR Rate BBA | ||||
(CABROVER) | (CABROVER) | (SF0001W) | ||||
CHF - 1W Swiss Franc LIBOR Rate BBA | CHF - 1W Swiss Franc LIBOR Rate BBA | DKK - Annualized Overnight Deposit MID Rate | ||||
(SF0001W) | (SF0001W) | EUR - 1W Euro Interbank Offer Rate (EURIBOR) | ||||
DKK - 1W Copenhagen Interbank Swap Rate | DKK - 1W Copenhagen Interbank Swap Rate | GBP - 1W Sterling LIBOR Rate BBA (GBP1WLIB) | ||||
(CIBOR) | (CIBOR) | HKD - 1M Hong Kong Interbank Offer rate (HIBOR) | ||||
EUR - 1W Euro Interbank Offer Rate (EURIBOR) | EUR - 1W Euro Interbank Offer Rate (EURIBOR) | ILS - 1M Tel Aviv Interbank Offer Rate (TELBOR) | ||||
GBP - 1W Sterling LIBOR Rate BBA (GBP1WLIB) | GBP - 1W Sterling LIBOR Rate BBA (GBP1WLIB) | JPY - 1M Japanese Yen LIBOR Rate BBA | ||||
HKD - 1W Hong Kong Interbank Offer rate (HIBOR) | HKD - 1W Hong Kong Interbank Offer rate (HIBOR) | (JY0001M) | ||||
ILS - 1M Tel Aviv Interbank Offer Rate (TELBOR) | ILS - 1M Tel Aviv Interbank Offer Rate (TELBOR) | NOK - Norwegian Overnight Weighted Average | ||||
JPY - 1W Japanese Yen LIBOR Rate BBA | JPY - 1W Japanese Yen LIBOR Rate BBA | (NOWA) | ||||
(JY0001W) | (JY0001W) | NZD - 1D New Zealand Official Overnight Deposit | ||||
NOK - 1W Norway Interbank Offer Rate (NIBOR) | NOK - 1W Norway Interbank Offer Rate (NIBOR) | Rate (NZOCO) | ||||
NZD - 1M New Zealand Bank Bill Rate (BBR) | NZD - 1M New Zealand Bank Bill Rate (BBR) | SEK - 1W Stockholm Interbank Offer Rate | ||||
SEK - 1W Stockholm Interbank Offer Rate | SEK - 1W Stockholm Interbank Offer Rate | (STIBOR) | ||||
(STIBOR) | (STIBOR) | SGD - 1M Singapore Assoc of Banks Swap Offer | ||||
SGD - 1M Singapore Assoc of Banks Swap Offer | SGD - 1M Singapore Assoc of Banks Swap Offer | rate | ||||
rate (SOR) | rate (SOR) | USD - 1D Overnight Bank Funding Rate (OBFR01) | ||||
USD - 1D Overnight Bank Funding Rate (OBFR01) | USD - 1D Overnight Bank Funding Rate (OBFR01) |
S C H E D U L E O F I N V E S T M E N T S |
19 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
OTC Total Return Swaps (continued)
(h) | (j) | (l) | ||||
15-889 basis points | 15-1375 basis points | 20-1475 basis points | ||||
CAD - 1D Overnight Bank of Canada Repo Rate | CAD - 1D Overnight Bank of Canada Repo Rate | CAD - 1D Overnight Bank of Canada Repo Rate | ||||
(CORRA) | (CORRA) | (CORRA) | ||||
CHF - 1D Overnight Swiss Franc LIBOR Rate BBA | CHF - 1D Overnight Swiss Franc LIBOR Rate BBA | CHF - 1D Overnight Swiss Franc LIBOR Rate BBA | ||||
(CHFONLIB) | (CHFONLIB) | (CHFONLIB) | ||||
DKK - Danish Tom/Next Reference Rate | DKK - Danish Tom/Next Reference Rate | DKK - 1W Copenhagen Interbank Swap Rate | ||||
(DETNT/N) | (DETNT/N) | (CIBOR) | ||||
EUR - 1D Effective Overnight Index Average | EUR - 1D Effective Overnight Index Average | EUR - 1D Effective Overnight Index Average | ||||
(EONIA) | (EONIA) | (EONIA) | ||||
GBP - 1D Sterling Overnight Index Average | GBP - 1D Sterling Overnight Index Average | GBP - 1D Overnight Sterling LIBOR Rate BBA | ||||
(SONIA) | (SONIA) | (GBPONLIB) | ||||
HKD - 1D Overnight Index Swap Rate | HKD - 1D Overnight Index Swap Rate | HKD - 2W Hong Kong Interbank Offer rate (HIBOR) | ||||
(HKDONOIS) | (HKDONOIS) | JPY - 1D Japanese Yen Spot Next BBA LIBOR | ||||
ILS - 1D Overnight Tel Aviv Interbank Offer Rate | ILS - 1D Overnight Tel Aviv Interbank Offer Rate | (JY000S/N) | ||||
(TELBOR) | (TELBOR) | NOK - Norwegian Overnight Weighted Average | ||||
JPY - 1D Overnight Tokyo Average Rate (TONAT) | JPY - 1D Overnight Tokyo Average Rate (TONAT) | (NOWA) | ||||
NOK - Norwegian Overnight Weighted Average | NOK - Norwegian Overnight Weighted Average | NZD - 1M New Zealand Bank Bill Rate (BBR) | ||||
(NOWA) | (NOWA) | RBA Interbank Overnight Cash Rate | ||||
RBA Interbank Overnight Cash Rate | NZD - 1D New Zealand Official Overnight Deposit | SEK - TN Stockholm Interbank Offer Rate | ||||
SEK - 1D Overnight Stockholm Interbank Offer | Rate (NZOCO) | (STIBOR) | ||||
Rate (STIBOR) | RBA Interbank Overnight Cash Rate | SGD - 1D Overnight Singapore Assoc of Banks | ||||
SGD - 1D Singapore Assoc of Banks Swap Offer | SEK - 1D Overnight Stockholm Interbank Offer | Rate (SIBOR) | ||||
Rate (SOR) | Rate (STIBOR) | |||||
USD - 1D Overnight Fed Funds Effective Rate | USD - 1D Overnight Fed Funds Effective Rate | |||||
(FEDL01) | (FEDL01) |
20 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
S C H E D U L E O F I N V E S T M E N T S |
21 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
22 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
S C H E D U L E O F I N V E S T M E N T S |
23 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
24 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
S C H E D U L E O F I N V E S T M E N T S |
25 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
26 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
S C H E D U L E O F I N V E S T M E N T S |
27 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
28 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
S C H E D U L E O F I N V E S T M E N T S |
29 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
30 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
S C H E D U L E O F I N V E S T M E N T S |
31 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
32 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
S C H E D U L E O F I N V E S T M E N T S |
33 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
34 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
S C H E D U L E O F I N V E S T M E N T S |
35 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
36 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
S C H E D U L E O F I N V E S T M E N T S |
37 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
38 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
S C H E D U L E O F I N V E S T M E N T S |
39 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
40 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
S C H E D U L E O F I N V E S T M E N T S |
41 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
42 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
S C H E D U L E O F I N V E S T M E N T S |
43 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
44 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
S C H E D U L E O F I N V E S T M E N T S |
45 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
46 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
S C H E D U L E O F I N V E S T M E N T S |
47 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
48 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
S C H E D U L E O F I N V E S T M E N T S |
49 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
50 | 2021 B L A C K R O C K A N N U A L R E P O R T TO S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
S C H E D U L E O F I N V E S T M E N T S |
51 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
52 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
S C H E D U L E O F I N V E S T M E N T S |
53 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
54 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
S C H E D U L E O F I N V E S T M E N T S |
55 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
56 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
Balances Reported in the Statements of Assets and Liabilities for OTC Swaps and Options Written
Description | Swap Premiums Paid |
Swap Premiums Received |
Unrealized Appreciation |
Unrealized Depreciation |
Value | |||||||||||
OTC Swaps. |
$ | $ | | $5,309,929 | $ | (1,461,080 | ) | $ | | |||||||
Options Written |
N/A | N/A | 114,676 | | (58,610 | ) |
S C H E D U L E O F I N V E S T M E N T S |
57 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
Derivative Financial Instruments Categorized by Risk Exposure
As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
Assets Derivative Financial Instruments |
||||||||||||||||||||||||||||
Futures contracts |
||||||||||||||||||||||||||||
Unrealized appreciation on futures contracts(a) |
$ | | $ | | $ | 1,897,739 | $ | | $ | | $ | | $ | 1,897,739 | ||||||||||||||
Options purchased |
||||||||||||||||||||||||||||
Investments at value unaffiliated(b) |
| | 211,896 | | | | 211,896 | |||||||||||||||||||||
Swaps OTC |
||||||||||||||||||||||||||||
Unrealized appreciation on OTC swaps; Swap premiums paid |
| | 5,309,929 | | | | 5,309,929 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | | $ | | $ | 7,419,564 | $ | | $ | | $ | | $ | 7,419,564 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Liabilities Derivative Financial Instruments |
||||||||||||||||||||||||||||
Futures contracts |
||||||||||||||||||||||||||||
Unrealized depreciation on futures contracts(a) |
$ | | $ | | $ | 1,065,990 | $ | | $ | | $ | | $ | 1,065,990 | ||||||||||||||
Options written |
||||||||||||||||||||||||||||
Options written at value |
| | 58,610 | | | | 58,610 | |||||||||||||||||||||
Swaps OTC |
||||||||||||||||||||||||||||
Unrealized depreciation on OTC swaps; Swap premiums received |
| | 1,461,080 | | | | 1,461,080 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | | $ | | $ | 2,585,680 | $ | | $ | | $ | | $ | 2,585,680 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Net cumulative unrealized appreciation (depreciation) on futures contracts and centrally cleared swaps, if any, are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current days variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
(b) | Includes options purchased at value as reported in the Schedule of Investments. |
For the year ended April 30, 2021, the effect of derivative financial instruments in the Statements of Operations was as follows:
Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
Net Realized Gain (Loss) from |
||||||||||||||||||||||||||||
Futures contracts |
$ | | $ | | $ | 12,223,051 | $ | | $ | | $ | | $ | 12,223,051 | ||||||||||||||
Options purchased(a) |
| | (8,870,212 | ) | | | | (8,870,212 | ) | |||||||||||||||||||
Options written |
| | 6,155,288 | | | | 6,155,288 | |||||||||||||||||||||
Swaps |
| | 27,002,896 | | | | 27,002,896 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | | $ | | $ | 36,511,023 | $ | | $ | | $ | | $ | 36,511,023 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on |
||||||||||||||||||||||||||||
Futures contracts. |
$ | | $ | | $ | 953,496 | $ | | $ | | $ | | $ | 953,496 | ||||||||||||||
Options purchased(b) |
| | 1,957,474 | | | | 1,957,474 | |||||||||||||||||||||
Options written |
| | (1,599,040 | ) | | | | (1,599,040 | ) | |||||||||||||||||||
Swaps |
| | (13,473,290 | ) | | | | (13,473,290 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | | $ | | $ | (12,161,360 | ) | $ | | $ | | $ | | $ | (12,161,360 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Options purchased are included in net realized gain (loss) from investments unaffiliated. |
(b) | Options purchased are included in net change in unrealized appreciation (depreciation) on investments unaffiliated. |
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts |
||||
Average notional value of contracts long |
$ | 106,725,118 | ||
Average notional value of contracts short. |
$ | 84,620,315 | ||
Options |
||||
Average value of option contracts purchased |
$ | 152,272 | ||
Average value of option contracts written. |
$ | 69,715 | ||
Total return swaps |
||||
Average notional value |
$ | (1,679,287 | ) |
For more information about the Funds investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
58 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
Derivative Financial Instruments Offsetting as of Period End
The Funds derivative assets and liabilities (by type) were as follows:
Assets | Liabilities | |||||||
Derivative Financial Instruments |
||||||||
Futures contracts |
$ | 293,869 | $ | 709,743 | ||||
Options |
211,896 | (a) | 58,610 | |||||
Swaps OTC(b) |
5,309,929 | 1,461,080 | ||||||
|
|
|
|
|||||
Total derivative assets and liabilities in the Statements of Assets and Liabilities |
5,815,694 | 2,229,433 | ||||||
|
|
|
|
|||||
Derivatives not subject to a Master Netting Agreement or similar agreement (MNA) |
(505,765 | ) | (768,353 | ) | ||||
|
|
|
|
|||||
Total derivative assets and liabilities subject to an MNA |
$ | 5,309,929 | $ | 1,461,080 | ||||
|
|
|
|
(a) | Includes options purchased at value which is included in Investments at value unaffiliated in the Statements of Assets and Liabilities and reported in the Schedule of Investments. |
(b) | Includes unrealized appreciation (depreciation) on OTC swaps and swap premiums (paid/received) in the Statements of Assets and Liabilities. |
The following table presents the Funds derivative assets and liabilities by counterparty net of amounts available for offset under an MNA and net of the related collateral received (and pledged) by the Fund:
Counterparty | Derivative Assets Subject to an MNA by |
Derivatives for Offset(a) |
Non-Cash Collateral Received |
Cash Collateral Received(b) |
Net Amount of Derivative Assets(c) |
|||||||||||||||
Bank of America N.A. |
$ | 572,685 | $ | (279,435 | ) | $ | | $ | | $ | 293,250 | |||||||||
Goldman Sachs & Co |
4,232,489 | | | (4,232,489 | ) | | ||||||||||||||
UBS AG |
504,755 | | | | 504,755 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 5,309,929 | $ | (279,435 | ) | $ | | $ | (4,232,489 | ) | $ | 798,005 | |||||||||
|
|
|
|
|
|
|
|
|
|
Counterparty | Derivative Liabilities Subject to an MNA by Counterparty |
Derivatives Available for Offset(a) |
Non-Cash Collateral Pledged |
Cash Collateral Pledged(d) |
Net Amount of Derivative Liabilities(e) |
|||||||||||||||
Bank of America N.A. |
$ | 279,435 | $ | (279,435 | ) | $ | | $ | | $ | | |||||||||
Deutsche Bank A.G. |
1,169,123 | | | (780,000 | ) | 389,123 | ||||||||||||||
HSBC Bank PLC |
12,522 | | | | 12,522 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 1,461,080 | $ | (279,435 | ) | $ | | $ | (780,000 | ) | $ | 401,645 | |||||||||
|
|
|
|
|
|
|
|
|
|
(a) | The amount of derivatives available for offset is limited to the amount of derivative asset and/or liabilities that are subject to an MNA. |
(b) | Excess of collateral received from the individual counterparty is not shown for financial reporting purposes. |
(c) | Net amount represents the net amount receivable from the counterparty in the event of default. |
(d) | Excess of collateral pledged to the individual counterparty is not shown for financial reporting purposes. |
(e) | Net amount represents the net amount payable due to counterparty in the event of default. Net amount may be offset further by the options written receivable/payable on the Statements of Assets and Liabilities. |
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Funds policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.
The following tables summarize the Funds financial instruments categorized in the fair value hierarchy. The breakdown of the Funds investments into major categories is disclosed in the Schedule of Investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets |
||||||||||||||||
Investments |
||||||||||||||||
Long-Term Investments |
||||||||||||||||
Common Stocks |
$ | 92 | $ | | $ | | $ | 92 | ||||||||
Preferred Securities |
||||||||||||||||
Preferred Stocks |
| | 2,567,023 | 2,567,023 | ||||||||||||
U.S. Treasury Obligations |
| 14,638,158 | | 14,638,158 |
S C H E D U L E O F I N V E S T M E N T S |
59 |
Schedule of Investments (continued) April 30, 2021 |
BlackRock Global Long/Short Equity Fund |
Fair Value Hierarchy as of Period End (continued)
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Short-Term Securities |
||||||||||||||||
Money Market Funds |
$ | 18,454,009 | $ | | $ | | $ | 18,454,009 | ||||||||
U.S. Treasury Obligations |
| 447,699,762 | | 447,699,762 | ||||||||||||
Options Purchased |
||||||||||||||||
Equity Contracts |
211,896 | | | 211,896 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 18,665,997 | $ | 462,337,920 | $ | 2,567,023 | $ | 483,570,940 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative Financial Instruments(a) |
||||||||||||||||
Assets |
||||||||||||||||
Equity Contracts |
$ | 1,897,739 | $ | 5,309,929 | $ | | $ | 7,207,668 | ||||||||
Liabilities |
||||||||||||||||
Equity Contracts |
(1,124,600 | ) | (1,461,080 | ) | | (2,585,680 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 773,139 | $ | 3,848,849 | $ | | $ | 4,621,988 | |||||||||
|
|
|
|
|
|
|
|
(a) | Derivative financial instruments are swaps, futures contracts and options written. Swaps and futures contracts are valued at the unrealized appreciation (depreciation) on the instrument and options written are shown at value. |
See notes to financial statements.
60 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Assets and Liabilities April 30, 2021 |
BlackRock Advantage Emerging Markets Fund |
BlackRock Global Long/Short Equity |
|||||||
ASSETS |
||||||||
Investments at value unaffiliated(a) |
$ | 165,668,031 | $ | 465,116,931 | ||||
Investments at value affiliated(b) |
13,397,402 | 18,454,009 | ||||||
Cash |
| 60,265,912 | ||||||
Cash pledged: |
||||||||
Collateral exchange-traded options written |
| 500,000 | ||||||
Collateral OTC derivatives |
| 9,160,000 | ||||||
Futures contracts |
651,000 | 13,174,000 | ||||||
Foreign currency at value(c) |
848,961 | 30,118,187 | ||||||
Receivables: |
||||||||
Investments sold |
3,291,321 | | ||||||
Options written |
| 173,286 | ||||||
Securities lending income affiliated |
8 | | ||||||
Swaps |
| 7,489 | ||||||
Capital shares sold |
321,792 | 972,184 | ||||||
Dividends unaffiliated |
259,927 | | ||||||
Dividends affiliated |
318 | 444 | ||||||
Interest unaffiliated |
| 342 | ||||||
Variation margin on futures contracts |
| 293,869 | ||||||
Unrealized appreciation on OTC swaps |
| 5,309,929 | ||||||
Prepaid expenses |
33,415 | 53,154 | ||||||
|
|
|
|
|||||
Total assets |
184,472,175 | 603,599,736 | ||||||
|
|
|
|
|||||
LIABILITIES |
||||||||
Cash received as collateral for OTC derivatives |
| 4,570,000 | ||||||
Options written at value(d) |
| 58,610 | ||||||
Payables: |
||||||||
Investments purchased |
7,973,906 | 98,998,923 | ||||||
Administration fees |
| 17,203 | ||||||
Capital shares redeemed |
738,083 | 1,053,950 | ||||||
Deferred foreign capital gain tax |
152,567 | | ||||||
Investment advisory fees |
57,366 | 516,932 | ||||||
Trustees and Officers fees |
2,212 | 2,498 | ||||||
Other accrued expenses |
374,121 | 643,583 | ||||||
Service and distribution fees |
2,003 | 10,178 | ||||||
Variation margin on futures contracts |
172,341 | 709,743 | ||||||
Unrealized depreciation on OTC swaps |
| 1,461,080 | ||||||
Other liabilities |
| 778,946 | ||||||
|
|
|
|
|||||
Total liabilities |
9,472,599 | 108,821,646 | ||||||
|
|
|
|
|||||
NET ASSETS |
$ | 174,999,576 | $ | 494,778,090 | ||||
|
|
|
|
|||||
NET ASSETS CONSIST OF |
||||||||
Paid-in capital |
$ | 157,286,493 | $ | 530,219,582 | ||||
Accumumlated earnings (loss) |
17,713,083 | (35,441,492 | ) | |||||
|
|
|
|
|||||
NET ASSETS |
$ | 174,999,576 | $ | 494,778,090 | ||||
|
|
|
|
|||||
(a) Investments at cost unaffiliated |
$ | 136,216,631 | $ | 465,877,090 | ||||
(b) Investments at cost affiliated |
$ | 13,397,402 | $ | 18,454,009 | ||||
(c) Foreign currency at cost |
$ | 850,153 | $ | 29,329,901 | ||||
(d) Premiums received |
$ | | $ | 173,286 |
F I N A N C I A L S T A T E M E N T S |
61 |
Statement of Assets and Liabilities (continued)
April 30, 2021
BlackRock Advantage Emerging Markets Fund |
BlackRock Global Long/Short Equity |
|||||||
NET ASSET VALUE |
||||||||
Institutional |
||||||||
Net assets |
$ | 17,216,210 | $ | 459,419,582 | ||||
|
|
|
|
|||||
Shares outstanding |
1,300,621 | 38,364,466 | ||||||
|
|
|
|
|||||
Net asset value |
$ | 13.24 | $ | 11.98 | ||||
|
|
|
|
|||||
Shares authorized |
Unlimited | Unlimited | ||||||
|
|
|
|
|||||
Par value |
$ | 0.001 | $ | 0.001 | ||||
|
|
|
|
|||||
Investor A |
||||||||
Net assets |
$ | 7,124,947 | $ | 23,390,077 | ||||
|
|
|
|
|||||
Shares outstanding |
547,966 | 1,979,469 | ||||||
|
|
|
|
|||||
Net asset value |
$ | 13.00 | $ | 11.82 | ||||
|
|
|
|
|||||
Shares authorized |
Unlimited | Unlimited | ||||||
|
|
|
|
|||||
Par value |
$ | 0.001 | $ | 0.001 | ||||
|
|
|
|
|||||
Investor C |
||||||||
Net assets |
$ | 550,397 | $ | 6,817,193 | ||||
|
|
|
|
|||||
Shares outstanding |
44,515 | 607,854 | ||||||
|
|
|
|
|||||
Net asset value |
$ | 12.36 | $ | 11.22 | ||||
|
|
|
|
|||||
Shares authorized |
Unlimited | Unlimited | ||||||
|
|
|
|
|||||
Par value |
$ | 0.001 | $ | 0.001 | ||||
|
|
|
|
|||||
Class K |
||||||||
Net assets |
$ | 150,108,022 | $ | 5,151,238 | ||||
|
|
|
|
|||||
Shares outstanding |
11,339,753 | 429,185 | ||||||
|
|
|
|
|||||
Net asset value |
$ | 13.24 | $ | 12.00 | ||||
|
|
|
|
|||||
Shares authorized |
Unlimited | Unlimited | ||||||
|
|
|
|
|||||
Par value |
$ | 0.001 | $ | 0.001 | ||||
|
|
|
|
See notes to financial statements.
62 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Year Ended April 30, 2021 |
BlackRock Advantage Emerging Markets Fund |
BlackRock Global Long/Short |
|||||||
INVESTMENT INCOME |
||||||||
Dividends unaffiliated |
$ | 3,212,917 | $ | | ||||
Dividends affiliated |
3,390 | 3,743 | ||||||
Interest unaffiliated |
| 429,177 | ||||||
Securities lending income affiliated net |
1,566 | | ||||||
Foreign taxes withheld |
(387,597 | ) | | |||||
|
|
|
|
|||||
Total investment income |
2,830,276 | 432,920 | ||||||
|
|
|
|
|||||
EXPENSES |
|
|||||||
Investment advisory |
1,047,133 | 7,924,302 | ||||||
Custodian |
335,375 | 333,907 | ||||||
Professional |
140,296 | 142,925 | ||||||
Registration |
67,306 | 131,469 | ||||||
Administration |
55,629 | 223,755 | ||||||
Accounting services |
50,797 | 147,788 | ||||||
Service and distribution class specific |
26,656 | 147,839 | ||||||
Administration class specific |
26,178 | 105,658 | ||||||
Transfer agent class specific |
16,772 | 408,634 | ||||||
Printing and postage |
15,267 | 16,728 | ||||||
Trustees and Officer |
9,265 | 10,928 | ||||||
Miscellaneous |
32,662 | 171,734 | ||||||
|
|
|
|
|||||
Total expenses |
1,823,336 | 9,765,667 | ||||||
Less: |
||||||||
Administration fees waived - class specific |
(25,726 | ) | (105,454 | ) | ||||
Fees waived and/or reimbursed by the Administrator |
(55,611 | ) | | |||||
Fees waived and/or reimbursed by the Manager |
(642,282 | ) | (1,073,036 | ) | ||||
Transfer agent fees waived and/or reimbursed class specific |
(5,501 | ) | (145,416 | ) | ||||
|
|
|
|
|||||
Total expenses after fees waived and/or reimbursed |
1,094,216 | 8,441,761 | ||||||
|
|
|
|
|||||
Net investment income (loss) |
1,736,060 | (8,008,841 | ) | |||||
|
|
|
|
|||||
REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||
Net realized gain (loss) from: |
||||||||
Investments unaffiliated(a) |
17,019,764 | (3,394,713 | ) | |||||
Investments affiliated |
(429 | ) | | |||||
Foreign currency transactions |
(49,426 | ) | 1,569,575 | |||||
Futures contracts |
3,156,513 | 12,223,051 | ||||||
Options written |
| 6,155,288 | ||||||
Payment by affiliate |
| 93,166 | ||||||
Swaps |
(68,401 | ) | 27,002,896 | |||||
|
|
|
|
|||||
20,058,021 | 43,649,263 | |||||||
|
|
|
|
|||||
Net change in unrealized appreciation (depreciation) on: |
||||||||
Investments unaffiliated(b) |
28,560,554 | 2,513,907 | ||||||
Foreign currency translations |
25,167 | 687,926 | ||||||
Futures contracts |
(664,746 | ) | 953,496 | |||||
Options written |
| (1,599,040 | ) | |||||
Swaps |
87,471 | (13,473,290 | ) | |||||
|
|
|
|
|||||
28,008,446 | (10,917,001 | ) | ||||||
|
|
|
|
|||||
Net realized and unrealized gain |
48,066,467 | 32,732,262 | ||||||
|
|
|
|
|||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
$ | 49,802,527 | $ | 24,723,421 | ||||
|
|
|
|
|||||
(a) Net of foreign capital gain tax of |
$ | 201,406 | $ | | ||||
(b) Net of reduction in deferred foreign capital gain tax of |
$ | (152,567 | ) | $ | |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S |
63 |
Statements of Changes in Net Assets
BlackRock Advantage Emerging Markets Fund |
BlackRock Global Long/Short Equity Fund |
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Year Ended 04/30/21 |
Period from 08/01/19 to 04/30/20 |
Year Ended 07/31/19 |
Year Ended 04/30/21 |
Period from 08/01/19 to 04/30/20 |
Year Ended 07/31/19 |
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INCREASE (DECREASE) IN NET ASSETS |
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OPERATIONS |
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Net investment income (loss) |
$ | 1,736,060 | $ | 1,034,133 | $ | 2,378,297 | $ | (8,008,841 | ) | $ | (535,948 | ) | $ | 1,954,066 | ||||||||||
Net realized gain (loss) |
20,058,021 | (13,202,385 | ) | (16,998,930 | ) | 43,649,263 | (36,897,905 | ) | 37,590,725 | |||||||||||||||
Net change in unrealized appreciation (depreciation) |
28,008,446 | (1,307,189 | ) | 7,489,012 | (10,917,001 | ) | 13,527,721 | (9,206,278 | ) | |||||||||||||||
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Net increase (decrease) in net assets resulting from operations |
49,802,527 | (13,475,441 | ) | (7,131,621 | ) | 24,723,421 | (23,906,132 | ) | 30,338,513 | |||||||||||||||
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DISTRIBUTIONS TO SHAREHOLDERS(a) |
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Institutional |
(184,178 | ) | (298,493 | ) | | (1,486,534 | ) | (34,641,431 | ) | (5,220,529 | ) | |||||||||||||
Investor A |
(88,691 | ) | (79,169 | ) | | (9,555 | ) | (1,923,928 | ) | (407,324 | ) | |||||||||||||
Investor C |
(10,800 | ) | (9,325 | ) | | | (858,199 | ) | (103,706 | ) | ||||||||||||||
Class K |
(1,758,353 | ) | (2,033,150 | ) | | (1,121 | ) | (24,794 | ) | (3,097 | ) | |||||||||||||
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Decrease in net assets resulting from distributions to shareholders |
(2,042,022 | ) | (2,420,137 | ) | | (1,497,210 | ) | (37,448,352 | ) | (5,734,656 | ) | |||||||||||||
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CAPITAL SHARE TRANSACTIONS |
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Net increase (decrease) in net assets derived from capital share transactions |
25,998,281 | 14,606,634 | (77,284,727 | ) | (55,842,584 | ) | (25,061,624 | ) | (40,385,376 | ) | ||||||||||||||
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NET ASSETS |
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Total increase (decrease) in net assets |
73,758,786 | (1,288,944 | ) | (84,416,348 | ) | (32,616,373 | ) | (86,416,108 | ) | (15,781,519 | ) | |||||||||||||
Beginning of period |
101,240,790 | 102,529,734 | 186,946,082 | 527,394,463 | 613,810,571 | 629,592,090 | ||||||||||||||||||
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End of period |
$ | 174,999,576 | $ | 101,240,790 | $ | 102,529,734 | $ | 494,778,090 | $ | 527,394,463 | $ | 613,810,571 | ||||||||||||
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(a) Distributions for annual periods determined in accordance with U.S. federal income tax regulations.
See notes to financial statements.
64 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
(For a share outstanding throughout each period)
BlackRock Advantage Emerging Markets Fund | ||||||||||||||||||||||||
Institutional | ||||||||||||||||||||||||
Year Ended 04/30/21 |
Period from 08/01/19 to 04/30/20 |
Year Ended July 31, | ||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||
Net asset value, beginning of period |
$ | 8.85 | $ | 10.25 | $ | 10.59 | $ | 10.10 | $ | 9.76 | $ | 9.84 | ||||||||||||
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Net investment income (loss)(a) |
0.15 | 0.10 | 0.18 | 0.07 | (0.12 | ) | (0.14 | ) | ||||||||||||||||
Net realized and unrealized gain (loss) |
4.43 | (1.27 | ) | (0.52 | ) | 0.42 | 0.46 | 0.17 | ||||||||||||||||
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Net increase (decrease) from investment operations |
4.58 | (1.17 | ) | (0.34 | ) | 0.49 | 0.34 | 0.03 | ||||||||||||||||
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Distributions(b) |
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From net investment income |
(0.19 | ) | (0.23 | ) | | | | | ||||||||||||||||
From net realized gain |
| | | | | (0.11 | ) | |||||||||||||||||
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Total distributions |
(0.19 | ) | (0.23 | ) | | | | (0.11 | ) | |||||||||||||||
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Net asset value, end of period |
$ | 13.24 | $ | 8.85 | $ | 10.25 | $ | 10.59 | $ | 10.10 | $ | 9.76 | ||||||||||||
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Total Return(c) |
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Based on net asset value. |
52.00 | % | (11.78 | )%(d) | (3.21 | )%(e) | 4.85 | % | 3.48 | %(f) | 0.34 | % | ||||||||||||
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Ratios to Average Net Assets(g) |
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Total expenses. |
1.40 | % | 1.38 | %(h)(i) | 1.42 | %(j) | 1.28 | % | 1.91 | % | 1.85 | % | ||||||||||||
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Total expenses after fees waived and/or reimbursed |
0.85 | % | 1.38 | %(h)(i) | 1.39 | %(j) | 1.28 | % | 1.90 | % | 1.84 | % | ||||||||||||
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Total expenses after fees waived and/or reimbursed and excluding interest expense |
0.85 | % | 0.81 | %(h) | 0.92 | %(j) | 0.94 | % | 1.70 | % | 1.75 | % | ||||||||||||
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Net investment income (loss) |
1.29 | % | 1.38 | %(h) | 1.83 | % | 0.67 | % | (1.29 | )% | (1.49 | )% | ||||||||||||
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Supplemental Data |
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Net assets, end of period (000) |
$ | 17,216 | $ | 9,689 | $ | 15,904 | $ | 32,775 | $ | 106,243 | $ | 177,981 | ||||||||||||
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Portfolio turnover rate |
180 | %(k) | 141 | %(k) | 128 | %(k) | 111 | %(k) | 7 | %(k) | | % | ||||||||||||
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(a) | Based on average shares outstanding. |
(b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(c) | Where applicable, assumes the reinvestment of distributions. |
(d) | Aggregate total return. |
(e) | Includes payment from an affiliate, which had no impact on the Funds total return. |
(f) | The Funds total return includes a reimbursement by an affiliate for a realized investment loss. Excluding this payment, the Funds total return would have been 3.38%. |
(g) | Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
Year Ended 04/30/21 |
Period from 08/01/19 to 04/30/20 |
Year Ended July 31, | ||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||
Investments in underlying funds |
0.01 | % | 0.01 | % | 0.02 | % | 0.07 | % | 0.17 | % | 0.18 | % | ||||||||||||
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(h) | Annualized. |
(i) | Audit, printing and tax costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses and total expenses excluding recoupment of past fees waived and/or reimbursed would have been 1.42%, respectively. |
(j) | Includes non-recurring expenses of offering costs. Without these costs, total expenses, total expenses excluding recoupment of past fees waived and/or reimbursed, and total expenses after fees waived and/or reimbursed would have been 1.40%, 1.37% and 0.90%, respectively. |
(k) | Excludes underlying investments in total return swaps. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S |
65 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
BlackRock Advantage Emerging Markets Fund (continued) | ||||||||||||||||||||||||
Investor A | ||||||||||||||||||||||||
Year Ended 04/30/21 |
Period from 08/01/19 to 04/30/20 |
Year Ended July 31, | ||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||
Net asset value, beginning of period |
$ | 8.69 | $ | 10.07 | $ | 10.43 | $ | 9.97 | $ | 9.67 | $ | 9.78 | ||||||||||||
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Net investment income (loss)(a) |
0.11 | 0.07 | 0.17 | 0.14 | (0.15 | ) | (0.17 | ) | ||||||||||||||||
Net realized and unrealized gain (loss) |
4.36 | (1.25 | ) | (0.53 | ) | 0.32 | 0.45 | 0.17 | ||||||||||||||||
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Net increase (decrease) from investment operations |
4.47 | (1.18 | ) | (0.36 | ) | 0.46 | 0.30 | | ||||||||||||||||
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Distributions(b) |
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From net investment income |
(0.16 | ) | (0.20 | ) | | | | | ||||||||||||||||
From net realized gain |
| | | | | (0.11 | ) | |||||||||||||||||
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Total distributions |
(0.16 | ) | (0.20 | ) | | | | (0.11 | ) | |||||||||||||||
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Net asset value, end of period. |
$ | 13.00 | $ | 8.69 | $ | 10.07 | $ | 10.43 | $ | 9.97 | $ | 9.67 | ||||||||||||
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Total Return(c) |
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Based on net asset value |
51.62 | % | (12.05 | )%(d) | (3.45 | )%(e) | 4.61 | % | 3.10 | %(e) | 0.03 | % | ||||||||||||
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Ratios to Average Net Assets(f) |
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Total expenses |
1.74 | % | 1.70 | %(g)(h) | 1.69 | %(i) | 1.57 | % | 2.22 | % | 2.10 | % | ||||||||||||
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Total expenses after fees waived and/or reimbursed |
1.14 | % | 1.70 | %(g)(h) | 1.67 | %(i) | 1.55 | % | 2.21 | % | 2.08 | % | ||||||||||||
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Total expenses after fees waived and/or reimbursed and excluding interest expense |
1.14 | % | 1.12 | %(g) | 1.17 | %(i) | 1.19 | % | 1.99 | % | 2.00 | % | ||||||||||||
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Net investment income (loss) |
0.98 | % | 1.02 | %(g) | 1.74 | % | 1.32 | % | (1.62 | )% | (1.74 | )% | ||||||||||||
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Supplemental Data |
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Net assets, end of period (000) |
$ | 7,125 | $ | 5,224 | $ | 3,817 | $ | 5,454 | $ | 3,272 | $ | 12,239 | ||||||||||||
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Portfolio turnover rate |
180 | %(j) | 141 | %(j) | 128 | %(j) | 111 | %(j) | 7 | %(j) | | % | ||||||||||||
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(a) | Based on average shares outstanding. |
(b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(c) | Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
(d) | Aggregate total return. |
(e) | Includes payment from an affiliate, which had no impact on the Funds total return. |
(f) | Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
Year Ended 04/30/21 |
Period from 08/01/19 to 04/30/20 |
Year Ended July 31, | ||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||
Investments in underlying funds |
0.01 | % | 0.01 | % | 0.02 | % | 0.07 | % | 0.17 | % | 0.18 | % | ||||||||||||
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(g) | Annualized. |
(h) | Audit, printing and tax costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses and total expenses excluding recoupment of past fees waived and/or reimbursed would have been 1.74%, respectively. |
(i) | Includes non-recurring expenses of offering costs. Without these costs, total expenses, total expenses excluding recoupment of past fees waived and/or reimbursed, and total expenses after fees waived and/or reimbursed would have been 1.67%, 1.65% and 1.15%, respectively. |
(j) | Excludes underlying investments in total return swaps. |
See notes to financial statements.
66 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
BlackRock Advantage Emerging Markets Fund (continued) | ||||||||||||||||||||||||
Investor C | ||||||||||||||||||||||||
Year Ended 04/30/21 |
Period from 08/01/19 to 04/30/20 |
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Year Ended July 31, | ||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||
Net asset value, beginning of period |
$ | 8.29 | $ | 9.53 | $ | 9.95 | $ | 9.58 | $ | 9.36 | $ | 9.53 | ||||||||||||
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Net investment income (loss)(a) |
0.04 | 0.02 | 0.08 | 0.03 | (0.21 | ) | (0.23 | ) | ||||||||||||||||
Net realized and unrealized gain (loss) |
4.14 | (1.21 | ) | (0.50 | ) | 0.34 | 0.43 | 0.17 | ||||||||||||||||
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Net increase (decrease) from investment operations |
4.18 | (1.19 | ) | (0.42 | ) | 0.37 | 0.22 | (0.06 | ) | |||||||||||||||
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Distributions(b) |
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From net investment income |
(0.11 | ) | (0.05 | ) | | | | | ||||||||||||||||
From net realized gain |
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Total distributions |
(0.11 | ) | (0.05 | ) | | | | (0.11 | ) | |||||||||||||||
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Net asset value, end of period. |
$ | 12.36 | $ | 8.29 | $ | 9.53 | $ | 9.95 | $ | 9.58 | $ | 9.36 | ||||||||||||
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Total Return(c) |
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Based on net asset value |
50.49 | % | (12.57 | )%(d) | (4.22 | )%(e) | 3.86 | % | 2.35 | %(e) | (0.60 | )% | ||||||||||||
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Ratios to Average Net Assets(f) |
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Total expenses |
2.56 | % | 2.53 | %(g)(h) | 2.53 | %(i) | 2.38 | % | 2.91 | % | 2.85 | % | ||||||||||||
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Total expenses after fees waived and/or reimbursed |
1.90 | % | 2.53 | %(g)(h) | 2.53 | %(i) | 2.38 | % | 2.91 | % | 2.85 | % | ||||||||||||
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Total expenses after fees waived and/or reimbursed and excluding interest expense |
1.90 | % | 1.90 | %(g) | 1.92 | %(i) | 1.94 | % | 2.71 | % | 2.74 | % | ||||||||||||
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Net investment income (loss) |
0.43 | % | 0.26 | %(g) | 0.81 | % | 0.25 | % | (2.30 | )% | (2.48 | )% | ||||||||||||
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Supplemental Data |
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Net assets, end of period (000) |
$ | 550 | $ | 1,164 | $ | 2,280 | $ | 3,240 | $ | 3,823 | $ | 5,979 | ||||||||||||
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Portfolio turnover rate |
180 | %(j) | 141 | %(j) | 128 | %(j) | 111 | %(j) | 7 | %(j) | | % | ||||||||||||
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(a) | Based on average shares outstanding. |
(b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(c) | Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
(d) | Aggregate total return. |
(e) | Includes payment from an affiliate, which had no impact on the Funds total return. |
(f) | Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
Year Ended 04/30/21 |
Period from 08/01/19 to 04/30/20 |
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Year Ended July 31, | ||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||
Investments in underlying funds |
0.01 | % | 0.01 | % | 0.02 | % | 0.07 | % | 0.17 | % | 0.18 | % | ||||||||||||
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(g) | Annualized. |
(h) | Audit, printing and tax costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses and total expenses excluding recoupment of past fees waived and/or reimbursed would have been 2.57%, respectively. |
(i) | Includes non-recurring expenses of offering costs. Without these costs, total expenses, total expenses excluding recoupment of past fees waived and/or reimbursed, and total expenses after fees waived and/or reimbursed would have been 2.51%, 2.51% and 1.90%, respectively. |
(j) | Excludes underlying investments in total return swaps. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S |
67 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
BlackRock Advantage Emerging Markets Fund (continued) | ||||||||||||||||
Class K | ||||||||||||||||
Year Ended 04/30/21 |
Period from 08/01/19 to 04/30/20 |
Year Ended July 31, 2019 |
Period from 01/25/18(a) to 07/31/18 |
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Net asset value, beginning of period |
$ | 8.84 | $ | 10.26 | $ | 10.59 | $ | 12.14 | ||||||||
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Net investment income(b) |
0.16 | 0.10 | 0.19 | 0.13 | ||||||||||||
Net realized and unrealized gain (loss) |
4.43 | (1.28 | ) | (0.52 | ) | (1.68 | ) | |||||||||
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Net increase (decrease) from investment operations |
4.59 | (1.18 | ) | (0.33 | ) | (1.55 | ) | |||||||||
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Distributions from net investment income(c) |
(0.19 | ) | (0.24 | ) | | | ||||||||||
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Net asset value, end of period |
$ | 13.24 | $ | 8.84 | $ | 10.26 | $ | 10.59 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Return(d) |
||||||||||||||||
Based on net asset value |
52.19 | % | (11.87 | )%(e) | (3.12 | )%(f) | (12.77 | )%(e) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Ratios to Average Net Assets(g) |
||||||||||||||||
Total expenses |
1.36 | % | 1.41 | %(h)(i) | 1.37 | %(j) | 1.32 | %(h)(k) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total expenses after fees waived and/or reimbursed |
0.81 | % | 0.81 | %(h) | 0.87 | %(j) | 0.89 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total expenses after fees waived and/or reimbursed and excluding interest expense |
0.81 | % | 0.81 | %(h) | 0.87 | % | 0.89 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net investment income |
1.36 | % | 1.33 | %(h) | 1.93 | % | 2.33 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Supplemental Data |
||||||||||||||||
Net assets, end of period (000) |
$ | 150,108 | $ | 85,164 | $ | 80,529 | $ | 145,476 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Portfolio turnover rate |
180 | %(l) | 141 | %(l) | 128 | %(l) | 111 | %(l)(m) | ||||||||
|
|
|
|
|
|
|
|
(a) | Commencement of operations. |
(b) | Based on average shares outstanding. |
(c) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(d) | Where applicable, assumes the reinvestment of distributions. |
(e) | Aggregate total return. |
(f) | Includes payment from an affiliate, which had no impact on the Funds total return. |
(g) | Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
Year Ended 04/30/21 |
Period from 08/01/19 to 04/30/20 |
Year Ended July 31, 2019 |
Period from 01/25/18(a) to 07/31/18 |
|||||||||||||
Investments in underlying funds |
0.01 | % | 0.01 | % | 0.02 | % | 0.07 | % | ||||||||
|
|
|
|
|
|
|
|
(h) | Annualized. |
(i) | Audit, printing and tax costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 1.45%. |
(j) | Includes non-recurring expenses of offering costs. Without these costs, total expenses and total expenses after fees waived and/or reimbursed would have been 1.34%and 0.84%, respectively. |
(k) | Offering costs were not annualized in the calculation of the expense ratios. If these expenses were annualized, the total expenses would have been 1.31%. |
(l) | Excludes underlying investments in total return swaps. |
(m) | Portfolio turnover rate is representative of the Fund for the entire year. |
See notes to financial statements.
68 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
BlackRock Global Long/Short Equity Fund | ||||||||||||||||||||||||
Institutional | ||||||||||||||||||||||||
Year Ended 04/30/21 |
Period from 08/01/19 to 04/30/20 |
|||||||||||||||||||||||
Year Ended July 31, | ||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||
Net asset value, beginning of period |
$ | 11.42 | $ | 12.67 | $ | 12.17 | $ | 11.62 | $ | 10.56 | $ | 11.92 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net investment income (loss)(a) |
(0.17 | ) | (0.01 | ) | 0.05 | (0.06 | ) | (0.14 | ) | (0.15 | ) | |||||||||||||
Net realized and unrealized gain (loss) |
0.76 | (0.46 | ) | 0.57 | 0.61 | 1.20 | (1.00 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net increase (decrease) from investment operations. |
0.59 | (0.47 | ) | 0.62 | 0.55 | 1.06 | (1.15 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Distributions(b) |
||||||||||||||||||||||||
From net investment income |
| (0.04 | ) | | | | | |||||||||||||||||
From net realized gain |
(0.03 | ) | (0.74 | ) | (0.12 | ) | | | (0.21 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total distributions |
(0.03 | ) | (0.78 | ) | (0.12 | ) | | | (0.21 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net asset value, end of period |
$ | 11.98 | $ | 11.42 | $ | 12.67 | $ | 12.17 | $ | 11.62 | $ | 10.56 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Return(c) |
||||||||||||||||||||||||
Based on net asset value |
5.21 | %(d) | (3.80 | )%(e) | 5.09 | % | 4.73 | % | 10.04 | % | (9.77 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Ratios to Average Net Assets(f) |
||||||||||||||||||||||||
Total expenses |
1.82 | % | 1.80 | %(g) | 1.76 | % | 1.73 | % | 1.78 | % | 1.68 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total expenses after fees waived and/or reimbursed |
1.57 | % | 1.80 | %(g) | 1.76 | % | 1.71 | % | 1.78 | % | 1.68 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total expenses after fees waived and/or reimbursed and excluding interest expense |
1.57 | % | 1.57 | %(g) | 1.63 | % | 1.66 | % | 1.70 | % | 1.62 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net investment income (loss) |
(1.49 | )% | (0.09 | )%(g) | 0.36 | % | (0.51 | )% | (1.28 | )% | (1.35 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Supplemental Data |
||||||||||||||||||||||||
Net assets, end of period (000) |
$ | 459,420 | $ | 492,021 | $ | 546,561 | $ | 559,028 | $ | 544,301 | $ | 824,306 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Portfolio turnover rate |
43 | %(h) | 53 | %(h) | 7 | %(h) | 20 | %(h) | | % | 34 | %(h) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(c) | Where applicable, assumes the reinvestment of distributions. |
(d) | Includes payments from an affiliate, which impacted the Trusts total return. Excluding the payments, the Trusts total return would have been 5.12%. |
(e) | Aggregate total return. |
(f) | Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
Year Ended 04/30/21 |
Period from 08/01/19 to 04/30/20 |
|||||||||||||||||||||||
Year Ended July 31, | ||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||
Investments in underlying funds |
| % | 0.01 | % | 0.01 | % | 0.13 | % | 0.16 | % | 0.18 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(g) | Annualized. |
(h) | Excludes underlying investments in total return swaps. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S |
69 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
BlackRock Global Long/Short Equity Fund (continued) | ||||||||||||||||||||||||
Investor A | ||||||||||||||||||||||||
Year Ended 04/30/21 |
Period from 08/01/19 to 04/30/20 |
|||||||||||||||||||||||
Year Ended July 31, | ||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||
Net asset value, beginning of period |
$ | 11.27 | $ | 12.50 | $ | 12.03 | $ | 11.52 | $ | 10.49 | $ | 11.84 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net investment income (loss)(a) |
(0.20 | ) | (0.02 | ) | 0.01 | (0.10 | ) | (0.17 | ) | (0.18 | ) | |||||||||||||
Net realized and unrealized gain (loss) |
0.75 | (0.46 | ) | 0.56 | 0.61 | 1.20 | (0.99 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net increase (decrease) from investment operations |
0.55 | (0.48 | ) | 0.57 | 0.51 | 1.03 | (1.17 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Distributions(b) |
||||||||||||||||||||||||
From net investment income |
| (0.01 | ) | | | | | |||||||||||||||||
From net realized gain |
(0.00 | )(c) | (0.74 | ) | (0.10 | ) | | | (0.18 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total distributions |
(0.00 | ) | (0.75 | ) | (0.10 | ) | | | (0.18 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net asset value, end of period. |
$ | 11.82 | $ | 11.27 | $ | 12.50 | $ | 12.03 | $ | 11.52 | $ | 10.49 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Return(d) |
||||||||||||||||||||||||
Based on net asset value |
4.92 | %(e) | (3.94 | )%(f) | 4.79 | % | 4.43 | % | 9.82 | % | (10.02 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Ratios to Average Net Assets(g) |
||||||||||||||||||||||||
Total expenses |
2.07 | % | 2.07 | %(h) | 2.04 | % | 2.03 | % | 2.10 | % | 1.95 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total expenses after fees waived and/or reimbursed |
1.82 | % | 2.07 | %(h) | 2.04 | % | 1.95 | % | 2.10 | % | 1.94 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total expenses after fees waived and/or reimbursed and excluding interest expense |
1.82 | % | 1.82 | %(h) | 1.88 | % | 1.96 | % | 1.98 | % | 1.88 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net investment income (loss) |
(1.75 | )% | (0.28 | )%(h) | 0.12 | % | (0.84 | )% | (1.60 | )% | (1.61 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Supplemental Data |
||||||||||||||||||||||||
Net assets, end of period (000) |
$ | 23,390 | $ | 23,509 | $ | 49,514 | $ | 49,180 | $ | 35,658 | $ | 122,464 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Portfolio turnover rate |
43 | %(i) | 53 | %(i) | 7 | %(i) | 20 | %(i) | | % | 34 | %(i) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(c) | Amount is greater than $(0.005) per share. |
(d) | Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
(e) | Includes payments received from an affiliate, which impacted the Trusts total return. Excluding the payments, the Trusts total return would have been 4.83%. |
(f) | Aggregate total return. |
(g) | Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
Year Ended 04/30/21 |
Period from 08/01/19 to 04/30/20 |
|||||||||||||||||||||||
Year Ended July 31, | ||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||
Investments in underlying funds |
| % | 0.01 | % | 0.01 | % | 0.13 | % | 0.16 | % | 0.18 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(h) | Annualized. |
(i) | Excludes underlying investments in total return swaps. |
See notes to financial statements.
70 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
BlackRock Global Long/Short Equity Fund (continued) | ||||||||||||||||||||||||
Investor C | ||||||||||||||||||||||||
Year Ended 04/30/21 |
Period from 08/01/19 to 04/30/20 |
|||||||||||||||||||||||
Year Ended July 31, | ||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||
Net asset value, beginning of period |
$ | 10.77 | $ | 11.99 | $ | 11.59 | $ | 11.18 | $ | 10.26 | $ | 11.63 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net investment loss(a) |
(0.27 | ) | (0.09 | ) | (0.08 | ) | (0.18 | ) | (0.24 | ) | (0.26 | ) | ||||||||||||
Net realized and unrealized gain (loss) |
0.72 | (0.44 | ) | 0.54 | 0.59 | 1.16 | (0.97 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net increase (decrease) from investment operations. |
0.45 | (0.53 | ) | 0.46 | 0.41 | 0.92 | (1.23 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Distributions from net realized gain(b) |
| (0.69 | ) | (0.06 | ) | | | (0.14 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net asset value, end of period |
$ | 11.22 | $ | 10.77 | $ | 11.99 | $ | 11.59 | $ | 11.18 | $ | 10.26 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Return(c) |
||||||||||||||||||||||||
Based on net asset value |
4.18 | %(d) | (4.51 | )%(e) | 4.02 | % | 3.67 | % | 8.97 | % | (10.66 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Ratios to Average Net Assets(f) |
||||||||||||||||||||||||
Total expenses |
2.86 | % | 2.83 | %(g) | 2.79 | % | 2.76 | % | 2.81 | % | 2.71 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total expenses after fees waived and/or reimbursed |
2.57 | % | 2.83 | %(g) | 2.79 | % | 2.72 | % | 2.81 | % | 2.71 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total expenses after fees waived and/or reimbursed and excluding interest expense |
2.57 | % | 2.57 | %(g) | 2.63 | % | 2.69 | % | 2.72 | % | 2.64 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net investment income loss |
(2.44 | )% | (1.04 | )%(g) | (0.64 | )% | (1.58 | )% | (2.32 | )% | (2.37 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Supplemental Data |
||||||||||||||||||||||||
Net assets, end of period (000) |
$ | 6,817 | $ | 11,539 | $ | 17,282 | $ | 21,168 | $ | 25,857 | $ | 62,597 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Portfolio turnover rate |
43 | %(h) | 53 | %(h) | 7 | %(h) | 20 | %(h) | | % | 34 | %(h) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(c) | Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions. |
(d) | Includes payments received from an affiliate, which impacted the Trusts total return. Excluding the payments, the Trusts total return would have been 4.09%. |
(e) | Aggregate total return. |
(f) | Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
Year Ended 04/30/21 |
Period from 08/01/19 to 04/30/20 |
|||||||||||||||||||||||
Year Ended July 31, | ||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||
Investments in underlying funds |
| % | 0.01 | % | 0.01 | % | 0.13 | % | 0.16 | % | 0.18 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(g) | Annualized. |
(h) | Excludes underlying investments in total return swaps. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S |
71 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
BlackRock Global Long/Short Equity Fund (continued) | ||||||||||||||||||||||||
Class K | ||||||||||||||||||||||||
Year Ended 04/30/21 |
Period from 08/01/19 to 04/30/20 |
Period from 03/28/16(a) |
||||||||||||||||||||||
Year Ended July 31, | ||||||||||||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||||||||||
Net asset value, beginning of period |
$ | 11.44 | $ | 12.69 | $ | 12.19 | $ | 11.63 | $ | 10.56 | $ | 11.02 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net investment income (loss)(b) |
(0.25 | ) | (0.01 | ) | 0.06 | (0.01 | ) | (0.14 | ) | (0.04 | ) | |||||||||||||
Net realized and unrealized gain (loss) |
0.85 | (0.46 | ) | 0.56 | 0.57 | 1.21 | (0.42 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net increase (decrease) from investment operations |
0.60 | (0.47 | ) | 0.62 | 0.56 | 1.07 | (0.46 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Distributions(c) |
||||||||||||||||||||||||
From net investment income |
| (0.04 | ) | | | | | |||||||||||||||||
From net realized gain |
(0.04 | ) | (0.74 | ) | (0.12 | ) | | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total distributions |
(0.04 | ) | (0.78 | ) | (0.12 | ) | | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net asset value, end of period |
$ | 12.00 | $ | 11.44 | $ | 12.69 | $ | 12.19 | $ | 11.63 | $ | 10.56 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Return(d) |
||||||||||||||||||||||||
Based on net asset value. |
5.24 | %(e) | (3.77 | )%(f) | 5.11 | % | 4.82 | % | 10.13 | % | (4.17 | )%(f) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Ratios to Average Net Assets(g) |
||||||||||||||||||||||||
Total expenses. |
1.77 | % | 1.76 | %(h) | 1.72 | % | 1.65 | % | 1.70 | % | 1.63 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total expenses after fees waived and/or reimbursed |
1.52 | % | 1.76 | %(h) | 1.72 | % | 1.64 | % | 1.70 | % | 1.63 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
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Total expenses after fees waived and/or reimbursed and excluding interest expense |
1.52 | % | 1.52 | %(h) | 1.57 | % | 1.58 | % | 1.63 | % | 1.56 | % | ||||||||||||
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Net investment income (loss) |
(2.07 | )% | (0.07 | )%(h) | 0.45 | % | (0.04 | )% | (1.32 | )% | (1.15 | )% | ||||||||||||
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Supplemental Data |
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Net assets, end of period (000) |
$ | 5,151 | $ | 325 | $ | 453 | $ | 217 | $ | 108 | $ | 52,455 | ||||||||||||
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Portfolio turnover rate |
43 | %(i) | 53 | %(i) | 7 | %(i) | 20 | %(i) | | % | 34 | %(i)(j) | ||||||||||||
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(a) | Commencement of operations. |
(b) | Based on average shares outstanding. |
(c) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(d) | Where applicable, assumes the reinvestment of distributions. |
(e) | Includes payment received from an affiliate, which had no impact on the Trusts total return. |
(f) | Aggregate total return. |
(g) | Excludes expenses incurred indirectly as a result of investments in underlying funds as follows: |
Year Ended 04/30/21 |
Period from 08/01/19 to 04/30/20 |
Period from 03/28/16(a) to 07/31/16 |
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Year Ended July 31, | ||||||||||||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||||||||||
Investments in underlying funds |
| % | 0.01 | % | 0.01 | % | 0.13 | % | 0.16 | % | 0.18 | % | ||||||||||||
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(h) | Annualized. |
(i) | Excludes underlying investments in total return swaps. |
(j) | Portfolio turnover rate is representative of the Fund for the entire year. |
See notes to financial statements.
72 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
1. | ORGANIZATION |
BlackRock FundsSM (the Trust) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company. The Trust is organized as a Massachusetts business trust. The following, each of which is a series of the Trust, are referred to herein collectively as the Funds or individually as a Fund:
Fund Name | Herein Referred To As | Diversification Classification |
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BlackRock Advantage Emerging Markets Fund. |
Advantage Emerging Markets | Diversified | ||||||
BlackRock Global Long/Short Equity Fund |
Global Long/Short Equity | Diversified |
Each Fund offers multiple classes of shares. All classes of shares have identical voting, dividend, liquidation and other rights and are subject to the same terms and conditions, except that certain classes bear expenses related to the shareholder servicing and distribution of such shares. Institutional and Class K Shares are sold only to certain eligible investors. Investor A and Investor C Shares bear certain expenses related to shareholder servicing of such shares, and Investor C Shares also bear certain expenses related to the distribution of such shares. Investor A and Investor C Shares are generally available through financial intermediaries. Each class has exclusive voting rights with respect to matters relating to its shareholder servicing and distribution expenditures (except that Investor C shareholders may vote on material changes to the Investor A Shares distribution and service plan).
Share Class | Initial Sales Charge | CDSC | Conversion Privilege | |||
Institutional and Class K Shares |
No | No | None | |||
Investor A Shares |
Yes | No(a) | None | |||
Investor C Shares. |
No | Yes(b) | To Investor A Shares after approximately 8 years |
(a) | Investor A Shares may be subject to a contingent deferred sales charge (CDSC) for certain redemptions where no initial sales charge was paid at the time of purchase. |
(b) | A CDSC of 1.00% is assessed on certain redemptions of Investor C Shares made within one year after purchase. |
The Funds, together with certain other registered investment companies advised by BlackRock Advisors, LLC (the Manager) or its affiliates, are included in a complex of equity, multi-asset, index and money market funds referred to as the BlackRock Multi-Asset Complex.
2. | SIGNIFICANT ACCOUNTING POLICIES |
The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. Below is a summary of significant accounting policies:
Investment Transactions and Income Recognition: For financial reporting purposes, investment transactions are recorded on the dates the transactions are executed. Realized gains and losses on investment transactions are determined using the specific identification method. Dividend income and capital gain distributions, if any, are recorded on the ex-dividend dates. Non-cash dividends, if any, are recorded on the ex-dividend dates at fair value. Dividends from foreign securities where the ex-dividend dates may have passed are subsequently recorded when the Funds are informed of the ex-dividend dates. Under the applicable foreign tax laws, a withholding tax at various rates may be imposed on capital gains, dividends and interest. Upon notification from issuers, a portion of the dividend income received from a real estate investment trust may be redesignated as a reduction of cost of the related investment and/or realized gain. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized daily on an accrual basis. Income, expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.
Foreign Currency Translation: Each Funds books and records are maintained in U.S. dollars. Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates determined as of the close of trading on the New York Stock Exchange (NYSE). Purchases and sales of investments are recorded at the rates of exchange prevailing on the respective dates of such transactions. Generally, when the U.S. dollar rises in value against a foreign currency, the investments denominated in that currency will lose value; the opposite effect occurs if the U.S. dollar falls in relative value.
Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of investments for financial reporting purposes. Accordingly, the effects of changes in exchange rates on investments are not segregated in the Statements of Operations from the effects of changes in market prices of those investments, but are included as a component of net realized and unrealized gain (loss) from investments. Each Fund reports realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are generally treated as ordinary income for U.S. federal income tax purposes.
Foreign Taxes: The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which each Fund invests. These foreign taxes, if any, are paid by each Fund and are reflected in its Statements of Operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on stock dividends are presented as Foreign taxes withheld, and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable or deferred as of April 30, 2021, if any, are disclosed in the Statements of Assets and Liabilities.
N O T E S T O F I N A N C I A L S T A T E M E N T S |
73 |
Notes to Financial Statements (continued)
The Funds file withholding tax reclaims in certain jurisdictions to recover a portion of amounts previously withheld. The Funds may record a reclaim receivable based on collectability, which includes factors such as the jurisdictions applicable laws, payment history and market convention. The Statements of Operations include tax reclaims recorded as well as professional and other fees, if any, associated with recovery of foreign withholding taxes.
Segregation and Collateralization: In cases where a Fund enters into certain investments (e.g., futures contracts, options written and swaps) that would be treated as senior securities for 1940 Act purposes, a Fund may segregate or designate on its books and records cash or liquid assets having a market value at least equal to the amount of its future obligations under such investments. Doing so allows the investment to be excluded from treatment as a senior security. Furthermore, if required by an exchange or counterparty agreement, the Funds may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments or obligations.
Distributions: Distributions paid by the Funds are recorded on the ex-dividend dates. Distributions of capital gains are recorded on the ex-dividend dates and made at least annually. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.
Indemnifications: In the normal course of business, a Fund enters into contracts that contain a variety of representations that provide general indemnification. A Funds maximum exposure under these arrangements is unknown because it involves future potential claims against a Fund, which cannot be predicted with any certainty.
Other: Expenses directly related to a Fund or its classes are charged to that Fund or the applicable class. Expenses directly related to the Funds and other shared expenses prorated to the Funds are allocated daily to each class based on their relative net assets or other appropriate methods. Other operating expenses shared by several funds, including other funds managed by the Manager, are prorated among those funds on the basis of relative net assets or other appropriate methods.
3. | INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS |
Investment Valuation Policies: Each Funds investments are valued at fair value (also referred to as market value within the financial statements) each day that the Fund is open for business and, for financial reporting purposes, as of the report date. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. Each Fund determines the fair values of its financial instruments using various independent dealers or pricing services under policies approved by the Board. If a securitys market price is not readily available or does not otherwise accurately represent the fair value of the security, the security will be valued in accordance with a policy approved by the Board as reflecting fair value. The BlackRock Global Valuation Methodologies Committee (the Global Valuation Committee) is the committee formed by management to develop global pricing policies and procedures and to oversee the pricing function for all financial instruments.
Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of each Funds assets and liabilities:
| Equity investments traded on a recognized securities exchange are valued at that days official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day may be valued at the last available bid (long positions) or ask (short positions) price. |
Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the NYSE. Occasionally, events affecting the values of such instruments may occur between the foreign market close and the close of trading on the NYSE that may not be reflected in the computation of the Funds net assets. Each business day, the Funds use a pricing service to assist with the valuation of certain foreign exchange-traded equity securities and foreign exchange-traded and over-the-counter (OTC) options (the Systematic Fair Value Price). Using current market factors, the Systematic Fair Value Price is designed to value such foreign securities and foreign options at fair value as of the close of trading on the NYSE, which follows the close of the local markets.
| Fixed-income investments for which market quotations are readily available are generally valued using the last available bid price or current market quotations provided by independent dealers or third party pricing services. Pricing services generally value fixed-income securities assuming orderly transactions of an institutional round lot size, but a fund may hold or transact in such securities in smaller, odd lot sizes. Odd lots may trade at lower prices than institutional round lots. The pricing services may use matrix pricing or valuation models that utilize certain inputs and assumptions to derive values, including transaction data (e.g., recent representative bids and offers), market data, credit quality information, perceived market movements, news, and other relevant information. Certain fixed-income securities, including asset-backed and mortgage related securities may be valued based on valuation models that consider the estimated cash flows of each tranche of the entity, establish a benchmark yield and develop an estimated tranche specific spread to the benchmark yield based on the unique attributes of the tranche. The amortized cost method of valuation may be used with respect to debt obligations with sixty days or less remaining to maturity unless the Manager determines such method does not represent fair value. |
| Investments in open-end U.S. mutual funds (including money market funds) are valued at that days published net asset value (NAV). |
| The Funds value their investment in SL Liquidity Series, LLC, Money Market Series (the Money Market Series) at fair value, which is ordinarily based upon their pro rata ownership in the underlying funds net assets. |
| Futures contracts are valued based on that days last reported settlement or trade price on the exchange where the contract is traded. |
| Exchange-traded options are valued at the mean between the last bid and ask prices at the close of the options market in which the options trade. An exchange-traded option for which there is no mean price is valued at the last bid (long positions) or ask (short positions) price. If no bid or ask price is available, the prior days price will be used, unless it is determined that the prior days price no longer reflects the fair value of the option. OTC options and options on swaps (swaptions) are valued by an independent pricing service using a mathematical model, which incorporates a number of market data factors, such as the trades and prices of the underlying instruments. |
74 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
| Swap agreements are valued utilizing quotes received daily by independent pricing services or through brokers, which are derived using daily swap curves and models that incorporate a number of market data factors, such as discounted cash flows, trades and values of the underlying reference instruments. |
If events (e.g., a market closure, market volatility, company announcement or a natural disaster) occur that are expected to materially affect the value of such investment, or in the event that application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the Global Valuation Committee, or its delegate, in accordance with a policy approved by the Board as reflecting fair value (Fair Valued Investments). The fair valuation approaches that may be used by the Global Valuation Committee include market approach, income approach and cost approach. Valuation techniques such as discounted cash flow, use of market comparables and matrix pricing are types of valuation approaches and are typically used in determining fair value. When determining the price for Fair Valued Investments, the Global Valuation Committee, or its delegate, seeks to determine the price that each Fund might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in an arms-length transaction. Fair value determinations shall be based upon all available factors that the Global Valuation Committee, or its delegate, deems relevant and consistent with the principles of fair value measurement. The pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.
For investments in equity or debt issued by privately held companies or funds (Private Company or collectively, the Private Companies) and other Fair Valued Investments, the fair valuation approaches that are used by the Global Valuation Committee and third party pricing services utilize one or a combination of, but not limited to, the following inputs.
Standard Inputs Generally Considered By Third Party Pricing Services | ||||
Market approach | (i) | recent market transactions, including subsequent rounds of financing, in the underlying investment or comparable issuers; | ||
(ii) | recapitalizations and other transactions across the capital structure; and | |||
(iii) | market multiples of comparable issuers. | |||
Income approach | (i) | future cash flows discounted to present and adjusted as appropriate for liquidity, credit, and/or market risks; | ||
(ii) | quoted prices for similar investments or assets in active markets; and | |||
(iii) | other risk factors, such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, recovery rates, liquidation amounts and/or default rates. | |||
Cost approach. | (i) | audited or unaudited financial statements, investor communications and financial or operational metrics issued by the Private Company; | ||
(ii) | changes in the valuation of relevant indices or publicly traded companies comparable to the Private Company; | |||
(iii) | relevant news and other public sources; and | |||
(iv) | known secondary market transactions in the Private Companys interests and merger or acquisition activity in companies comparable to the Private Company. |
Investments in series of preferred stock issued by Private Companies are typically valued utilizing market approach in determining the enterprise value of the company. Such investments often contain rights and preferences that differ from other series of preferred and common stock of the same issuer. Enterprise valuation techniques such as an option pricing model (OPM), a probability weighted expected return model (PWERM), current value method or a hybrid of those techniques are used, as deemed appropriate under the circumstances. The use of these valuation techniques involve a determination of the exit scenarios of the investment in order to appropriately allocate the enterprise value of the company among the various parts of its capital structure.
The Private Companies are not subject to the public company disclosure, timing, and reporting standards applicable to other investments held by a Fund. Typically, the most recently available information by a Private Company is as of a date that is earlier than the date a Fund is calculating its NAV. This factor may result in a difference between the value of the investment and the price a Fund could receive upon the sale of the investment.
Fair Value Hierarchy: Various inputs are used in determining the fair value of financial instruments. These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial reporting purposes as follows:
| Level 1 Unadjusted price quotations in active markets/exchanges for identical assets or liabilities that each Fund has the ability to access; |
| Level 2 Other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other marketcorroborated inputs); and |
| Level 3 Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Global Valuation Committees assumptions used in determining the fair value of financial instruments). |
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Investments classified within Level 3 have significant unobservable inputs used by the Global Valuation Committee in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by Private Companies that may not have a secondary market and/or may have a limited number of investors. The categorization of a value determined for financial instruments is based on the pricing transparency of the financial instruments and is not necessarily an indication of the risks associated with investing in those securities.
N O T E S T O F I N A N C I A L S T A T E M E N T S |
75 |
Notes to Financial Statements (continued)
4. | SECURITIES AND OTHER INVESTMENTS |
Preferred Stocks: Preferred stock has a preference over common stock in liquidation (and generally in receiving dividends as well), but is subordinated to the liabilities of the issuer in all respects. As a general rule, the market value of preferred stock with a fixed dividend rate and no conversion element varies inversely with interest rates and perceived credit risk, while the market price of convertible preferred stock generally also reflects some element of conversion value. Because preferred stock is junior to debt securities and other obligations of the issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a preferred stock than in a more senior debt security with similar stated yield characteristics. Unlike interest payments on debt securities, preferred stock dividends are payable only if declared by the issuers board of directors. Preferred stock also may be subject to optional or mandatory redemption provisions.
Securities Lending: Certain Funds may lend their securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Funds collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by each Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current market value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Fund and any additional required collateral is delivered to the Fund, or excess collateral returned by the Fund, on the next business day. During the term of the loan, the Funds are entitled to all distributions made on or in respect of the loaned securities, but do not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.
As of period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested by the securities lending agent, BlackRock Investment Management, LLC (BIM), if any, is disclosed in the Schedules of Investments. Any non-cash collateral received cannot be sold, re-invested or pledged by the Fund, except in the event of borrower default. The securities on loan, if any, are disclosed in the Funds Schedules of Investments,. The market value of any securities on loan and the value of any related collateral are shown separately in the Statements of Assets and Liabilities as a component of investments at value unaffiliated, and collateral on securities loaned at value, respectively.
Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements (each, an MSLA), which provide the right, in the event of default (including bankruptcy or insolvency), for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, the Funds, as lender, would offset the market value of the collateral received against the market value of the securities loaned. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterpartys bankruptcy or insolvency. Under the MSLA, absent an event of default, the borrower can resell or re-pledge the loaned securities, and the Funds can reinvest cash collateral received in connection with loaned securities. Upon an event of default, the parties obligations to return the securities or collateral to the other party are extinguished, and the parties can resell or re-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting partys net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.
The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BIM. BIMs indemnity allows for full replacement of the securities loaned to the extent the collateral received does not cover the value on the securities loaned in the event of borrower default. Each Fund could incur a loss if the value of an investment purchased with cash collateral falls below the market value of loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received. Such losses are borne entirely by the Funds.
5. | DERIVATIVE FINANCIAL INSTRUMENTS |
The Funds engage in various portfolio investment strategies using derivative contracts both to increase the returns of the Funds and/or to manage their exposure to certain risks such as credit risk, equity risk, interest rate risk, foreign currency exchange rate risk, commodity price risk or other risks (e.g., inflation risk). Derivative financial instruments categorized by risk exposure are included in the Schedules of Investments. These contracts may be transacted on an exchange or OTC.
Futures Contracts: Futures contracts are purchased or sold to gain exposure to, or manage exposure to, changes in interest rates (interest rate risk) and changes in the value of equity securities (equity risk) or foreign currencies (foreign currency exchange rate risk).
Futures contracts are exchange-traded agreements between the Funds and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and on a specified date. Depending on the terms of a contract, it is settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash amount on the settlement date. Upon entering into a futures contract, the Funds are required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contracts size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Amounts pledged, which are considered restricted, are included in cash pledged for futures contracts in the Statements of Assets and Liabilities.
Securities deposited as initial margin are designated in the Schedules of Investments and cash deposited, if any, are shown as cash pledged for futures contracts in the Statements of Assets and Liabilities. Pursuant to the contract, the Funds agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (variation margin). Variation margin is recorded as unrealized appreciation (depreciation) and, if any, shown as variation margin receivable (or payable) on futures contracts in the Statements of Assets and Liabilities. When the contract is closed, a realized gain or loss is recorded in the Statements of Operations equal to the difference between the notional amount of the contract at the time it was opened and the notional amount at the time it was closed. The use of futures contracts involves the risk of an imperfect correlation in the movements in the price of futures contracts and interest rates, foreign currency exchange rates or underlying assets.
76 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
Options: The Funds may purchase and write call and put options to increase or decrease their exposure to the risks of underlying instruments, including equity risk, interest rate risk and/or commodity price risk and/or, in the case of options written, to generate gains from options premiums.
A call option gives the purchaser (holder) of the option the right (but not the obligation) to buy, and obligates the seller (writer) to sell (when the option is exercised) the underlying instrument at the exercise or strike price at any time or at a specified time during the option period. A put option gives the holder the right to sell and obligates the writer to buy the underlying instrument at the exercise or strike price at any time or at a specified time during the option period.
Premiums paid on options purchased and premiums received on options written, as well as the daily fluctuation in market value, are included in investments at value unaffiliated and options written at value, respectively, in the Statements of Assets and Liabilities. When an instrument is purchased or sold through the exercise of an option, the premium is offset against the cost or proceeds of the underlying instrument. When an option expires, a realized gain or loss is recorded in the Statements of Operations to the extent of the premiums received or paid. When an option is closed or sold, a gain or loss is recorded in the Statements of Operations to the extent the cost of the closing transaction exceeds the premiums received or paid. When the Funds write a call option, such option is typically covered, meaning that they hold the underlying instrument subject to being called by the option counterparty. When the Funds write a put option, cash is segregated in an amount sufficient to cover the obligation. These amounts, which are considered restricted, are included in cash pledged as collateral for options written in the Statements of Assets and Liabilities.
In purchasing and writing options, the Funds bear the risk of an unfavorable change in the value of the underlying instrument or the risk that they may not be able to enter into a closing transaction due to an illiquid market. Exercise of a written option could result in the Funds purchasing or selling a security when they otherwise would not, or at a price different from the current market value.
Swaps: Swap contracts are entered into to manage exposure to issuers, markets and securities. Such contracts are agreements between the Funds and a counterparty to make periodic net payments on a specified notional amount or a net payment upon termination. Swap agreements are privately negotiated in the OTC market and may be entered into as a bilateral contract (OTC swaps) or centrally cleared (centrally cleared swaps).
For OTC swaps, any upfront premiums paid and any upfront fees received are shown as swap premiums paid and swap premiums received, respectively, in the Statements of Assets and Liabilities and amortized over the term of the contract. The daily fluctuation in market value is recorded as unrealized appreciation (depreciation) on OTC Swaps in the Statements of Assets and Liabilities. Payments received or paid are recorded in the Statements of Operations as realized gains or losses, respectively. When an OTC swap is terminated, a realized gain or loss is recorded in the Statements of Operations equal to the difference between the proceeds from (or cost of) the closing transaction and the Funds basis in the contract, if any. Generally, the basis of the contract is the premium received or paid.
In a centrally cleared swap, immediately following execution of the swap contract, the swap contract is novated to a central counterparty (the CCP) and the CCP becomes the Funds counterparty on the swap. Each Fund is required to interface with the CCP through the broker. Upon entering into a centrally cleared swap, each Fund is required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on the size and risk profile of the particular swap. Securities deposited as initial margin are designated in the Schedules of Investments and cash deposited is shown as cash pledged for centrally cleared swaps in the Statements of Assets and Liabilities. Amounts pledged, which are considered restricted cash, are included in cash pledged for centrally cleared swaps in the Statements of Assets and Liabilities. Pursuant to the contract, each Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (variation margin). Variation margin is recorded as unrealized appreciation (depreciation) and shown as variation margin receivable (or payable) on centrally cleared swaps in the Statements of Assets and Liabilities. Payments received from (paid to) the counterparty are amortized over the term of the contract and recorded as realized gains (losses) in the Statements of Operations, including those at termination.
| Total return swaps Total return swaps are entered into to obtain exposure to a security or market without owning such security or investing directly in such market or to exchange the risk/return of one security or market (e.g., fixed-income) with another security or market (e.g., equity or commodity prices) (equity risk, commodity price risk and/or interest rate risk). |
Total return swaps are agreements in which there is an exchange of cash flows whereby one party commits to make payments based on the total return (distributions plus capital gains/losses) of an underlying instrument, or basket of underlying instruments, in exchange for fixed or floating rate interest payments. If the total return of the instrument(s) or index underlying the transaction exceeds or falls short of the offsetting fixed or floating interest rate obligation, the Funds receive payment from or make a payment to the counterparty.
Certain total return swaps are designed to function as a portfolio of direct investments in long and short equity positions. This means that the Fund has the ability to trade in and out of these long and short positions within the swap and will receive the economic benefits and risks equivalent to direct investment in these positions, subject to certain adjustments due to events related to the counterparty. Benefits and risks include capital appreciation (depreciation), corporate actions and dividends received and paid, all of which are reflected in the swaps market value. The market value also includes interest charges and credits (financing fees) related to the notional values of the long and short positions and cash balances within the swap. These interest charges and credits are based on a specified benchmark rate plus or minus a specified spread determined based upon the country and/or currency of the positions in the portfolio.
Positions within the swap and financing fees are reset periodically. During a reset, any unrealized appreciation (depreciation) on positions and accrued financing fees become available for cash settlement between the Funds and the counterparty. The amounts that are available for cash settlement are recorded as realized gains or losses in the Statements of Operations. Cash settlement in and out of the swap may occur at a reset date or any other date, at the discretion of the Funds and the counterparty, over the life of the agreement. Certain swaps have no stated expiration and can be terminated by either party at any time.
Swap transactions involve, to varying degrees, elements of interest rate, credit and market risk in excess of the amounts recognized in the Statements of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreements, and that there may be unfavorable changes in interest rates and/or market values associated with these transactions.
N O T E S T O F I N A N C I A L S T A T E M E N T S |
77 |
Notes to Financial Statements (continued)
Master Netting Arrangements: In order to define its contractual rights and to secure rights that will help it mitigate its counterparty risk, a Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (ISDA Master Agreement) or similar agreement with its counterparties. An ISDA Master Agreement is a bilateral agreement between a Fund and a counterparty that governs certain OTC derivatives and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, a Fund may, under certain circumstances, offset with the counterparty certain derivative financial instruments payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default including the bankruptcy or insolvency of the counterparty. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy, insolvency or other events.
Collateral Requirements: For derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the mark-to-market amount for each transaction under such agreement and comparing that amount to the value of any collateral currently pledged by the Fund and the counterparty.
Cash collateral that has been pledged to cover obligations of the Funds and cash collateral received from the counterparty, if any, is reported separately in the Statements of Assets and Liabilities as cash pledged as collateral and cash received as collateral, respectively. Non-cash collateral pledged by the Funds, if any, is noted in the Schedules of Investments. Generally, the amount of collateral due from or to a counterparty is subject to a certain minimum transfer amount threshold before a transfer is required, which is determined at the close of business of the Funds. Any additional required collateral is delivered to/pledged by the Funds on the next business day. Typically, the counterparty is not permitted to sell, re-pledge or use cash and non-cash collateral it receives. A Fund generally agrees not to use non-cash collateral that it receives but may, absent default or certain other circumstances defined in the underlying ISDA Master Agreement, be permitted to use cash collateral received. In such cases, interest may be paid pursuant to the collateral arrangement with the counterparty. To the extent amounts due to the Funds from the counterparties are not fully collateralized, each Fund bears the risk of loss from counterparty non-performance. Likewise, to the extent the Funds have delivered collateral to a counterparty and stand ready to perform under the terms of their agreement with such counterparty, each Fund bears the risk of loss from a counterparty in the amount of the value of the collateral in the event the counterparty fails to return such collateral. Based on the terms of agreements, collateral may not be required for all derivative contracts.
For financial reporting purposes, the Funds do not offset derivative assets and derivative liabilities that are subject to netting arrangements, if any, in the Statements of Assets and Liabilities.
6. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Investment Advisory: The Trust, on behalf of each Fund, entered into an Investment Advisory Agreement with the Manager, the Funds investment adviser and an indirect, wholly-owned subsidiary of BlackRock, Inc. (BlackRock), to provide investment advisory services. The Manager is responsible for the management of each Funds portfolio and provides the personnel, facilities, equipment and certain other services necessary to the operations of each Fund.
For such services, each Fund pays the Manager a monthly fee at an annual rate equal to the following percentages of the average daily value of each Funds net assets:
Investment Advisory Fees | ||||||||
Average Daily Net Assets | Advantage Emerging Markets | Global Long/Short Equity | ||||||
First $1 billion. |
0.80 | % | 1.50 | % | ||||
$1 billion $3 billion |
0.75 | 1.41 | ||||||
$3 billion $5 billion |
0.72 | 1.35 | ||||||
$5 billion $10 billion |
0.70 | 1.31 | ||||||
Greater than $10 billion |
0.68 | 1.28 |
With respect to Global Long/Short Equity, the Manager entered into a sub-advisory agreement with BlackRock International Limited (BIL), an affiliate of the Manager. The Manager pays BIL for services it provides for that portion of the Fund for which BIL acts as sub-adviser, a monthly fee that is equal to a percentage of the investment advisory fees paid by Global Long/Short Equity to the Manager.
Service and Distribution Fees: The Trust, on behalf of the Funds, entered into a Distribution Agreement and a Distribution and Service Plan with BlackRock Investments, LLC (BRIL), an affiliate of the Manager. Pursuant to the Distribution and Service Plan and in accordance with Rule 12b-1 under the 1940 Act, each Fund pays BRIL ongoing service and distribution fees. The fees are accrued daily and paid monthly at annual rates based upon the average daily net assets of the relevant share class of the Fund as follows:
Share Class | Service Fees | Distribution Fees | ||||||
Investor A |
0.25 | % | N/A | |||||
Investor C |
0.25 | 0.75 | % |
BRIL and broker-dealers, pursuant to sub-agreements with BRIL, provide shareholder servicing and distribution services to the Funds. The ongoing service and/or distribution fee compensates/reimburses BRIL and each broker-dealer for providing shareholder servicing and/or distribution related services to shareholders.
For the year ended April 30, 2021, the following table shows the class specific service and distribution fees borne directly by each share class of each Fund:
Fund Name | Investor A | Investor C | Total | |||||||||
Advantage Emerging Markets |
$ | 16,995 | $ | 9,661 | $ | 26,656 | ||||||
Global Long/Short Equity |
60,085 | 87,754 | 147,839 |
78 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
Administration: The Trust, on behalf of each Fund, entered into an Administration Agreement with the Manager, an indirect, wholly-owned subsidiary of BlackRock, to provide administrative services. For these services, the Manager receives an administration fee computed daily and payable monthly, based on a percentage of the average daily net assets of each Fund. The administration fee, which is shown as administration in the Statements of Operations, is paid at the annual rates below.
Average Daily Net Assets | Administration Fees | |||
First $500 million |
0.0425 | % | ||
$500 million $1 billion |
0.0400 | |||
$1 billion $2 billion |
0.0375 | |||
$2 billion $4 billion |
0.0350 | |||
$4 billion $13 billion |
0.0325 | |||
Greater than $13 billion |
0.0300 |
In addition, the Manager charges each of the share classes an administration fee, which is shown as administration class specific in the Statements of Operations, at an annual rate of 0.02% of the average daily net assets of each respective class.
For the year ended April 30, 2021, the following table shows the class specific administration fees borne directly by each share class of each Fund:
Fund Name | Institutional | Investor A | Investor C | Class K | Total | |||||||||||||||
Advantage Emerging Markets |
$ | 2,470 | $ | 1,360 | $ | 193 | $ | 22,155 | $ | 26,178 | ||||||||||
Global Long/Short Equity |
98,792 | 4,807 | 1,755 | 304 | 105,658 |
Transfer Agent: Pursuant to written agreements, certain financial intermediaries, some of which may be affiliates, provide the Funds with sub-accounting, recordkeeping, sub-transfer agency and other administrative services with respect to servicing of underlying investor accounts. For these services, these entities receive an asset-based fee or an annual fee per shareholder account, which will vary depending on share class and/or net assets. For the year ended April 30, 2021, the Funds paid the following amounts to affiliates of BlackRock in return for these services, which are included in transfer agent class specific in the Statements of Operations:
Fund Name | Institutional | |||
Global Long/Short Equity |
$ | 1,024 |
The Manager maintains a call center that is responsible for providing certain shareholder services to the Funds. Shareholder services include responding to inquiries and processing purchases and sales based upon instructions from shareholders. For the year ended April 30, 2021, each Fund reimbursed the Manager the following amounts for costs incurred in running the call center, which are included in transfer agent class specific in the Statements of Operations:
Fund Name | Institutional | Investor A | Investor C | Class K | Total | |||||||||||||||
Advantage Emerging Markets |
$ | 291 | $ | 365 | $ | 157 | $ | 463 | $ | 1,276 | ||||||||||
Global Long/Short Equity |
1,567 | 730 | 490 | 6 | 2,793 |
For the year ended April 30, 2021, the following table shows the class specific transfer agent fees borne directly by each share class of each Fund:
Fund Name | Institutional | Investor A | Investor C | Class K | Total | |||||||||||||||
Advantage Emerging Markets |
$ | 5,819 | $ | 8,131 | $ | 1,870 | $ | 952 | $ | 16,772 | ||||||||||
Global Long/Short Equity |
378,871 | 19,260 | 10,357 | 146 | 408,634 |
Other Fees: For the year ended April 30, 2021, affiliates earned underwriting discounts, direct commissions and dealer concessions on sales of each Funds Investor A Shares as follows:
Fund Name | Investor A | |||
Advantage Emerging Markets |
$ | 382 | ||
Global Long/Short Equity |
1,412 |
For the year ended April 30, 2021, affiliates received CDSCs as follows:
Fund Name | Investor A | Investor C | ||||||
Advantage Emerging Markets |
$ | | $ | 594 | ||||
Global Long/Short Equity. |
946 | 694 |
Expense Limitations, Waivers and Reimbursements: With respect to each Fund, the Manager contractually agreed to waive its investment advisory fees by the amount of investment advisory fees each Fund pays to the Manager indirectly through its investment in affiliated money market funds (the affiliated money market fund waiver) through August 31, 2021. The contractual agreement may be terminated upon 90 days notice by a majority of the trustees who are not interested persons of the Trust, as defined in the 1940 Act (Independent Trustees), or by a vote of a majority of the outstanding voting securities of a Fund. The amount of waivers and/or reimbursements of fees and expenses made pursuant to the expense limitation described below will be reduced by the amount of the affiliated money market fund waiver. This amount is included in fees waived and/or reimbursed by the Manager in the Statements of Operations. For the year ended April 30, 2021, the amounts waived were as follows:
Fund Name | Amounts Waived | |||
Advantage Emerging Markets |
$ | 4,418 | ||
Global Long/Short Equity. |
5,193 |
N O T E S T O F I N A N C I A L S T A T E M E N T S |
79 |
Notes to Financial Statements (continued)
The Manager has contractually agreed to waive its investment advisory fee with respect to any portion of each Funds assets invested in affiliated equity and fixed-income mutual funds and affiliated exchange-traded funds that have a contractual management fee through August 31, 2021. The contractual agreement may be terminated upon 90 days notice by a majority of the Independent Trustees, or by a vote of a majority of the outstanding voting securities of a Fund. For the year ended April 30, 2021, there were no fees waived and/or reimbursed by the Manager pursuant to this arrangement.
With respect to Advantage Emerging Markets, the Manager contractually agreed to waive and/or reimburse fees or expenses in order to limit other expenses, excluding dividend expense, interest expense, and certain other fund expenses, which constitute extraordinary expenses not incurred in the ordinary course of the Funds business (expense limitation). The expense limitations as a percentage of average daily net assets are as follows:
Fund Name/Share Class | Expense Limitation | |||
Advantage Emerging Markets |
||||
Institutional |
0.05 | % | ||
Investor A |
0.10 | |||
Investor C |
0.10 | |||
Class K |
0.01 |
With respect to Global Long/Short Equity, the Manager contractually agreed to waive and/or reimburse fees or expenses in order to limit expenses, excluding dividend expense, interest expense, acquired fund fees and expenses, and certain other fund expenses, which constitute extraordinary expenses not incurred in the ordinary course of each Funds business (expense limitation). The expense limitations as a percentage of average daily net assets are as follows:
Fund Name/Share Class | Expense Limitation | |||
Global Long/Short Equity |
||||
Institutional |
1.57 | % | ||
Investor A |
1.82 | |||
Investor C |
2.57 | |||
Class K |
1.52 |
The Manager has agreed not to reduce or discontinue these contractual expense limitations through August 31, 2021, unless approved by the Board, including a majority of the Independent Trustees, or by a vote of a majority of the outstanding voting securities of a Fund. These amounts of investment advisory fees waived and/or reimbursed are included in fees waived and/or reimbursed by the Manager in the Statements of Operations. For the year ended April 30, 2021, the Funds waived the following amounts:
Fund Name | Amounts Waived | |||
Advantage Emerging Markets |
$ | 637,864 | ||
Global Long/Short Equity |
1,067,843 |
In addition, these amounts waived and/or reimbursed by the Manager or Administrator are included in fees waived and/or reimbursed by the Administrator, Administration fees waived class specific and transfer agent fees waived and/or reimbursed class specific, respectively, in the Statements of Operations. For the year ended April 30, 2021, amounts included in the Statements of Operations were are as follows:
Fund Name | Fees Waived and/or Reimbursed by the Administrator |
|||
Advantage Emerging Markets |
$ | 55,611 |
Administration Fees Waived - Class Specific | ||||||||||||||||||||
Fund Name | Institutional | Investor A | Investor C | Class K | Total | |||||||||||||||
Advantage Emerging Markets |
$ | 2,191 | $ | 1,187 | $ | 193 | $ | 22,155 | $ | 25,726 | ||||||||||
Global Long/Short Equity |
98,792 | 4,603 | 1,755 | 304 | 105,454 |
Transfer Agent Fees Waived and/or Reimbursed - Class Specific |
||||||||||||||||||||
Fund Name | Institutional | Investor A | Investor C | Class K | Total | |||||||||||||||
Advantage Emerging Markets |
$ | 1,158 | $ | 2,392 | $ | 1,000 | $ | 951 | $ | 5,501 | ||||||||||
Global Long/Short Equity |
131,891 | 7,426 | 5,955 | 144 | 145,416 |
Securities Lending: The U.S. Securities and Exchange Commission (SEC) has issued an exemptive order which permits BIM, an affiliate of the Manager, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BIM bears all operational costs directly related to securities lending. The Funds are responsible for expenses in connection with the investment of cash collateral received for securities on loan (the collateral investment expenses). The cash collateral is invested in a private investment company, SL Liquidity Series, LLC, Money Market Series, managed by the Manager or its affiliates. However, BIM has agreed to cap the collateral investment expenses of the Money Market Series to an annual rate of 0.04%. The investment adviser to the Money Market Series will not charge any advisory fees with respect to shares purchased by the Funds. The Money Market Series may, under certain circumstances, impose a liquidity fee of up to 2% of the value withdrawn or temporarily restrict withdrawals for up to 10 business days during a 90 day period, in the event that the private investment companys weekly liquid assets fall below certain thresholds. The Money Market Series seeks current income consistent with maintaining liquidity and preserving capital. Although the Money Market Series is not registered under the 1940 Act, its investments may follow the parameters of investments by a money market fund that is subject to Rule 2a-7 under the 1940 Act.
80 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment expenses. Each Fund retains a portion of securities lending income and remits a remaining portion to BIM as compensation for its services as securities lending agent.
Pursuant to the current securities lending agreement, Advantage Emerging Markets retains 82% of securities lending income (which excludes collateral investment expenses), and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment expenses.
In addition, commencing the business day following the date that the aggregate securities lending income earned across the BlackRock Multi-Asset Complex in a calendar year exceeds a specified threshold, Advantage Emerging Markets, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 85% of securities lending income (which excludes collateral investment expenses), and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment expenses.
Pursuant to the current securities lending agreement, Global Long/Short Equity retains 77% of securities lending income (which excludes collateral investment expenses), and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment expenses.
In addition, commencing the business day following the date that the aggregate securities lending income earned across the BlackRock Multi-Asset Complex in a calendar year exceeds a specified threshold, Global Long/Short Equity, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 81% of securities lending income (which excluded collateral investment expenses), and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment expenses.
Prior to January 1, 2021, Global Long/Short Equity retained 82% of securities lending income (which excluded collateral investment expenses) and the amount retained could never be less than 70% of the total of securities lending income plus the collateral investment expenses. In addition, commencing the business day following the date that the aggregate securities lending income earned across the BlackRock Multi-Asset Complex in a calendar year exceeded a specified threshold, the Fund would retain for the remainder of that calendar year 85% of securities lending income (which excluded collateral investment expenses), and the amount retained could never be less than 70% of the total of securities lending income plus the collateral investment expenses.
The share of securities lending income earned by each Fund is shown as securities lending income affiliated net in the Statements of Operations. For the year ended April 30, 2021, each Fund paid BIM the following amounts for securities lending agent services:
Fund Name | Amounts | |||
Advantage Emerging Markets |
$ | 285 |
Interfund Lending: In accordance with an exemptive order (the Order) from the SEC, each Fund may participate in a joint lending and borrowing facility for temporary purposes (the Interfund Lending Program), subject to compliance with the terms and conditions of the Order, and to the extent permitted by each Funds investment policies and restrictions. Each Fund is currently permitted to borrow and lend under the Interfund Lending Program.
A lending BlackRock fund may lend in aggregate up to 15% of its net assets, but may not lend more than 5% of its net assets to any one borrowing fund through the Interfund Lending Program. A borrowing BlackRock fund may not borrow through the Interfund Lending Program or from any other source more than 33 1/3% of its total assets (or any lower threshold provided for by the funds investment restrictions). If a borrowing BlackRock funds total outstanding borrowings exceed 10% of its total assets, each of its outstanding interfund loans will be subject to collateralization of at least 102% of the outstanding principal value of the loan. All interfund loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the highest current overnight repurchase agreement rate available to a lending fund and the bank loan rate, as calculated according to a formula established by the Board.
During the year ended April 30, 2021, the Funds did not participate in the Interfund Lending Program.
Trustees and Officers: Certain trustees and/or officers of the Trust are directors and/or officers of BlackRock or its affiliates. The Funds reimburse the Manager for a portion of the compensation paid to the Trusts Chief Compliance Officer, which is included in Trustees and Officer in the Statements of Operations.
Other Transactions: During the year ended April 30, 2021, Global Long/Short Equity received a reimbursement of $93,166 from an affiliate, which is included in payment by affiliate in the Statements of Operations, related to an operating event.
7. | PURCHASES AND SALES |
For the year ended April 30, 2021, purchases and sales of investments, excluding short-term investments, were as follows:
U.S. Government Securities | Other Securities | |||||||||||||||
Fund Name | Purchases | Sales | Purchases | Sales | ||||||||||||
Advantage Emerging Markets |
$ | | $ | | $ | 247,837,660 | $ | 219,212,338 | ||||||||
Global Long/Short Equity |
34,634,792 | 29,370,000 | | 7,464,352 |
8. | INCOME TAX INFORMATION |
It is each Funds policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies, and to distribute substantially all of its taxable income to its shareholders. Therefore, no U.S. federal income tax provision is required.
N O T E S T O F I N A N C I A L S T A T E M E N T S |
81 |
Notes to Financial Statements (continued)
Each Fund files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on each Funds U.S. federal tax returns generally remains open for a period of three fiscal years after they are filed. The statutes of limitations on each Funds state and local tax returns may remain open for an additional year depending upon the jurisdiction.
Management has analyzed tax laws and regulations and their application to the Funds as of April 30, 2021, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Funds financial statements.
U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or NAVs per share. As of period end, the following permanent differences attributable to a net operating loss were reclassified to the following accounts:
Fund Name | Paid-in Capital |
Accumulated Earnings (Loss) |
||||||
Global Long/Short Equity |
$ | (1,495,628 | ) | $ | 1,495,628 |
The tax character of distributions paid was as follows:
Fund Name | Year Ended 04/30/21 |
Period from 08/01/19 to 04/30/20 |
Year Ended 07/31/19 |
|||||||||
Advantage Emerging Markets |
||||||||||||
Ordinary income |
$ | 2,042,022 | $ | 2,420,137 | $ | | ||||||
|
|
|
|
|
|
|||||||
Global Long/Short Equity |
||||||||||||
Ordinary income |
1,497,210 | 37,448,352 | 3,000,069 | |||||||||
Long-term capital gains |
| | 2,734,587 | |||||||||
|
|
|
|
|
|
|||||||
$ | 1,497,210 | $ | 37,448,352 | $ | 5,734,656 | |||||||
|
|
|
|
|
|
As of period end, the tax components of accumulated earnings (loss) were as follows:
Fund Name | Undistributed Ordinary Income |
Undistributed Long-Term Capital Gains |
Non-Expiring Capital Loss Carryforwards(a) |
Net Unrealized Gains (Losses)(b) |
Qualified Late-Year Loss(c) |
Total | ||||||||||||||||||
Advantage Emerging Markets |
$ | 844,863 | $ | | $ | (9,406,179 | ) | $ | 26,274,399 | $ | | $ | 17,713,083 | |||||||||||
Global Long/Short Equity |
| 6,131,516 | | (38,793,095 | ) | (2,779,913 | ) | (35,441,492 | ) |
(a) | Amounts available to offset future realized capital gains. |
(b) | The difference between book-basis and tax-basis net unrealized losses was attributable primarily to the tax deferral of losses on wash sales and straddles, the realization for tax purposes of unrealized gains/losses on certain futures, options and foreign currency contracts, the realization for tax purposes of unrealized gain on investments in passive foreign investment companies, the timing and recognition of partnership income and the realization for tax purposes of unrealized gains on constructive sales. |
(c) | The Fund has elected to defer certain qualified late-year losses and recognize such losses in the next taxable year. |
During the year ended April 30, 2021, the Funds listed below utilized the following amounts of their respective capital loss carryforward:
Fund Name | Amounts | |||
Advantage Emerging Markets |
$ | 18,086,138 |
As of April 30, 2021, gross unrealized appreciation and depreciation based on cost of investments (including short positions and derivatives, if any) for U.S. federal income tax purposes were as follows:
Fund Name | Tax Cost | Gross Unrealized Appreciation |
Gross Unrealized Depreciation |
Net Unrealized Appreciation (Depreciation) |
||||||||||||
Advantage Emerging Markets |
$ | 152,669,824 | $ | 29,714,413 | $ | (3,318,804 | ) | $ | 26,395,609 | |||||||
Global Long/Short Equity |
485,270,065 | 39,580,383 | (78,243,200 | ) | (38,662,817 | ) |
9. | BANK BORROWINGS |
The Trust, on behalf of the Funds, along with certain other funds managed by the Manager and its affiliates (Participating Funds), is a party to a 364-day, $2.25 billion credit agreement with a group of lenders. Under this agreement, the Funds may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Funds, can borrow up to an aggregate commitment amount of $1.75 billion at any time outstanding, subject to asset coverage and other limitations as specified in the agreement. The credit agreement has the following terms: a fee of 0.10% per annum on unused commitment amounts and interest at a rate equal to the higher of (a) one-month LIBOR (but, in any event, not less than 0.00%) on the date the loan is made plus 0.80% per annum or (b) the Fed Funds rate (but, in any event, not less than 0.00%) in effect from time to time plus 0.80% per annum on amounts borrowed. The agreement expires in April 2022 unless extended or renewed. These fees were allocated among such funds based upon portions of the aggregate commitment available to them and relative net assets of Participating Funds. During the year ended April 30, 2021, the Funds did not borrow under the credit agreement.
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Notes to Financial Statements (continued)
10. PRINCIPAL RISKS
In the normal course of business, the Funds invest in securities or other instruments and may enter into certain transactions, and such activities subject each Fund to various risks, including among others, fluctuations in the market (market risk) or failure of an issuer to meet all of its obligations. The value of securities or other instruments may also be affected by various factors, including, without limitation: (i) the general economy; (ii) the overall market as well as local, regional or global political and/or social instability; (iii) regulation, taxation or international tax treaties between various countries; or (iv) currency, interest rate and price fluctuations. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the Funds and their investments. Each Funds prospectus provides details of the risks to which each Fund is subject.
The Funds may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00, which may be subject to redemption gates or liquidity fees under certain circumstances.
Market Risk: Investments in the securities of issuers domiciled in countries with emerging capital markets involve certain additional risks that do not generally apply to investments in securities of issuers in more developed capital markets, such as (i) low or nonexistent trading volume, resulting in a lack of liquidity and increased volatility in prices for such securities; (ii) uncertain national policies and social, political and economic instability, increasing the potential for expropriation of assets, confiscatory taxation, high rates of inflation or unfavorable diplomatic developments; (iii) lack of publicly available or reliable information about issuers as a result of not being subject to the same degree of regulatory requirements and accounting, auditing and financial reporting standards; and (iv) possible fluctuations in exchange rates, differing legal systems and the existence or possible imposition of exchange controls, custodial restrictions or other foreign or U.S. governmental laws or restrictions applicable to such investments.
An outbreak of respiratory disease caused by a novel coronavirus has developed into a global pandemic and has resulted in closing borders, quarantines, disruptions to supply chains and customer activity, as well as general concern and uncertainty. The impact of this pandemic, and other global health crises that may arise in the future, could affect the economies of many nations, individual companies and the market in general in ways that cannot necessarily be foreseen at the present time. This pandemic may result in substantial market volatility and may adversely impact the prices and liquidity of a funds investments. The duration of this pandemic and its effects cannot be determined with certainty.
Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. A Fund may invest in illiquid investments. An illiquid investment is any investment that a Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. A Fund may experience difficulty in selling illiquid investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause each Funds NAV to experience significant increases or decreases over short periods of time. If there is a general decline in the securities and other markets, the NAV of a Fund may lose value, regardless of the individual results of the securities and other instruments in which a Fund invests.
The price a Fund could receive upon the sale of any particular portfolio investment may differ from a Funds valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair valuation technique or a price provided by an independent pricing service. Changes to significant unobservable inputs and assumptions (i.e., publicly traded company multiples, growth rate, time to exit) due to the lack of observable inputs may significantly impact the resulting fair value and therefore a Funds results of operations. As a result, the price received upon the sale of an investment may be less than the value ascribed by a Fund, and a Fund could realize a greater than expected loss or lesser than expected gain upon the sale of the investment. A Funds ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third party service providers.
Counterparty Credit Risk: The Funds may be exposed to counterparty credit risk, or the risk that an entity may fail to or be unable to perform on its commitments related to unsettled or open transactions, including making timely interest and/or principal payments or otherwise honoring its obligations. The Funds manage counterparty credit risk by entering into transactions only with counterparties that the Manager believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Funds exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Funds.
A derivative contract may suffer a mark-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.
For OTC options purchased, each Fund bears the risk of loss in the amount of the premiums paid plus the positive change in market values net of any collateral held by the Funds should the counterparty fail to perform under the contracts. Options written by the Funds do not typically give rise to counterparty credit risk, as options written generally obligate the Funds, and not the counterparty, to perform. The Funds may be exposed to counterparty credit risk with respect to options written to the extent each Fund deposits collateral with its counterparty to a written option.
With exchange-traded options purchased and exchange-traded futures, there is less counterparty credit risk to the Funds since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures with respect to initial and variation
N O T E S T O F I N A N C I A L S T A T E M E N T S |
83 |
Notes to Financial Statements (continued)
margin that is held in a clearing brokers customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing brokers customers, potentially resulting in losses to the Funds.
Concentration Risk: A diversified portfolio, where this is appropriate and consistent with a funds objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within each Funds portfolio are disclosed in its Schedule of Investments.
Certain Funds invest a substantial amount of their assets in issuers located in a single country or a limited number of countries. When a Fund concentrates its investments in this manner, it assumes the risk that economic, regulatory, political and social conditions in those countries may have a significant impact on their investment performance and could affect the income from, or the value or liquidity of, the Funds portfolio. Foreign issuers may not be subject to the same uniform accounting, auditing and financial reporting standards and practices as used in the United States. Foreign securities markets may also be more volatile and less liquid than U.S. securities and may be less subject to governmental supervision not typically associated with investing in U.S. securities. Investment percentages in specific countries are presented in the Schedules of Investments.
Certain Funds invest a significant portion of their assets in securities of issuers located in Europe or with significant exposure to European issuers or countries. The European financial markets have recently experienced volatility and adverse trends due to concerns about economic downturns in, or rising government debt levels of, several European countries. These events may spread to other countries in Europe and may affect the value and liquidity of certain of the Funds investments.
Responses to the financial problems by European governments, central banks and others, including austerity measures and reforms, may not work, may result in social unrest and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets and asset valuations around the world. In addition, the United Kingdom has withdrawn from the European Union, and one or more other countries may withdraw from the European Union and/or abandon the Euro, the common currency of the European Union. The impact of these actions, especially if they occur in a disorderly fashion, is not clear but could be significant and far reaching.
Certain Funds invest a significant portion of their assets in securities of issuers located in Asia or with significant exposure to Asian issuers or countries. The Asian financial markets have recently experienced volatility and adverse trends due to concerns in several Asian countries regarding monetary policy, government intervention in the markets, rising government debt levels or economic downturns. These events may spread to other countries in Asia and may affect the value and liquidity of certain of the Funds investments.
Certain Funds invest a significant portion of their assets in securities of issuers located in China or with significant exposure to Chinese issuers or countries. Investments in Chinese securities, including certain Hong Kong-listed securities, involves risks specific to China. China may be subject to considerable degrees of economic, political and social instability and demonstrates significantly higher volatility from time to time in comparison to developed markets. Chinese markets generally continue to experience inefficiency, volatility and pricing anomalies resulting from governmental influence, a lack of publicly available information and/or political and social instability. Internal social unrest or confrontations with other neighboring countries may disrupt economic development in China and result in a greater risk of currency fluctuations, currency non-convertibility, interest rate fluctuations and higher rates of inflation. Incidents involving Chinas or the regions security may cause uncertainty in Chinese markets and may adversely affect the Chinese economy and the Funds investments. Reduction in spending on Chinese products and services, institution of tariffs or other trade barriers, or a downturn in any of the economies of Chinas key trading partners may have an adverse impact on the Chinese economy. In addition, measures may be taken to limit the flow of capital and/or sanctions may be imposed, which could prohibit or restrict the ability to own or transfer fund assets and may also include retaliatory actions, such as seizure of fund assets.
LIBOR Transition Risk: The United Kingdoms Financial Conduct Authority announced a phase out of the London Interbank Offered Rate (LIBOR). Although many LIBOR rates will be phased out by the end of 2021, a selection of widely used USD LIBOR rates will continue to be published through June 2023 in order to assist with the transition. The Funds may be exposed to financial instruments tied to LIBOR to determine payment obligations, financing terms, hedging strategies or investment value. The transition process away from LIBOR might lead to increased volatility and illiquidity in markets for, and reduce the effectiveness of new hedges placed against, instruments whose terms currently include LIBOR. The ultimate effect of the LIBOR transition process on the Funds is uncertain.
11. CAPITAL SHARE TRANSACTIONS
Transactions in capital shares for each class were as follows:
Year Ended 04/30/21 |
Period from 08/01/19 to 04/30/20 |
Year Ended 07/31/19 |
||||||||||||||||||||||
Fund Name / Share Class | Shares | Amounts | Shares | Amounts | Shares | Amounts | ||||||||||||||||||
Advantage Emerging Markets |
||||||||||||||||||||||||
Institutional |
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Shares sold |
486,880 | $ | 6,360,500 | 59,500 | $ | 583,098 | 679,066 | $ | 6,836,422 | |||||||||||||||
Shares issued in reinvestment of distributions |
13,009 | 156,567 | 25,009 | 264,098 | | | ||||||||||||||||||
Shares redeemed |
(294,601 | ) | (3,337,976 | ) | (540,784 | ) | (5,185,291 | ) | (2,222,832 | ) | (22,108,842 | ) | ||||||||||||
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205,288 | $ | 3,179,091 | (456,275 | ) | $ | (4,338,095 | ) | (1,543,766 | ) | $ | (15,272,420 | ) | ||||||||||||
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84 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
Year Ended 04/30/21 |
Period from 08/01/19 to 04/30/20 |
Year Ended 07/31/19 |
||||||||||||||||||||||
Fund Name / Share Class (continued) | Shares | Amounts | Shares | Amounts | Shares | Amounts | ||||||||||||||||||
Advantage Emerging Markets (continued) |
||||||||||||||||||||||||
Investor A |
||||||||||||||||||||||||
Shares sold |
204,267 | $ | 2,338,991 | 287,739 | $ | 2,546,246 | 184,254 | $ | 1,895,000 | |||||||||||||||
Shares issued in reinvestment of distributions |
7,349 | 87,639 | 7,600 | 78,963 | | | ||||||||||||||||||
Shares redeemed |
(264,631 | ) | (3,105,555 | ) | (73,256 | ) | (695,697 | ) | (328,128 | ) | (3,161,389 | ) | ||||||||||||
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(53,015 | ) | $ | (678,925 | ) | 222,083 | $ | 1,929,512 | (143,874 | ) | $ | (1,266,389 | ) | ||||||||||||
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Investor C |
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Shares sold |
12,988 | $ | 127,341 | 2,255 | $ | 22,122 | 6,834 | $ | 62,855 | |||||||||||||||
Shares issued in reinvestment of distributions |
949 | 10,800 | 897 | 8,915 | | | ||||||||||||||||||
Shares redeemed |
(109,763 | ) | (1,201,547 | ) | (102,004 | ) | (936,146 | ) | (93,436 | ) | (854,036 | ) | ||||||||||||
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(95,826 | ) | $ | (1,063,406 | ) | (98,852 | ) | $ | (905,109 | ) | (86,602 | ) | $ | (791,181 | ) | ||||||||||
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Class K |
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Shares sold |
6,925,990 | $ | 82,456,154 | 4,055,785 | $ | 39,786,672 | 4,600,094 | $ | 45,101,567 | |||||||||||||||
Shares issued in reinvestment of distributions |
145,913 | 1,758,353 | 192,716 | 2,033,150 | | | ||||||||||||||||||
Shares redeemed |
(5,365,264 | ) | (59,652,986 | ) | (2,465,921 | ) | (23,899,496 | ) | (10,485,440 | ) | (105,056,304 | ) | ||||||||||||
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1,706,639 | $ | 24,561,521 | 1,782,580 | $ | 17,920,326 | (5,885,346 | ) | $ | (59,954,737 | ) | ||||||||||||||
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1,763,086 | $ | 25,998,281 | 1,449,536 | $ | 14,606,634 | (7,659,588 | ) | $ | (77,284,727 | ) | ||||||||||||||
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Year Ended 04/30/21 |
Period from 08/01/19 to 04/30/20 |
Year Ended 07/31/19 |
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Fund Name / Share Class | Shares | Amounts | Shares | Amounts | Shares | Amounts | ||||||||||||||||||
Global Long/Short Equity |
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Institutional |
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Shares sold |
16,451,047 | $ | 191,723,004 | 19,507,283 | $ | 230,149,138 | 15,050,878 | $ | 186,626,984 | |||||||||||||||
Shares issued in reinvestment of distributions |
86,013 | 1,014,954 | 2,010,045 | 23,115,520 | 270,407 | 3,293,554 | ||||||||||||||||||
Shares redeemed |
(21,253,572 | ) | (247,004,557 | ) | (21,587,415 | ) | (251,472,473 | ) | (18,097,432 | ) | (224,453,776 | ) | ||||||||||||
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(4,716,512 | ) | $ | (54,266,599 | ) | (70,087 | ) | $ | 1,792,185 | (2,776,147 | ) | $ | (34,533,238 | ) | |||||||||||
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Investor A |
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Shares sold |
881,103 | $ | 10,154,455 | 778,118 | $ | 9,051,266 | 675,932 | $ | 8,269,287 | |||||||||||||||
Shares issued in reinvestment of distributions |
803 | 9,371 | 165,473 | 1,879,770 | 33,587 | 404,392 | ||||||||||||||||||
Shares redeemed |
(988,539 | ) | (11,330,527 | ) | (2,817,305 | ) | (33,535,373 | ) | (836,781 | ) | (10,217,483 | ) | ||||||||||||
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(106,633 | ) | $ | (1,166,701 | ) | (1,873,714 | ) | $ | (22,604,337 | ) | (127,262 | ) | $ | (1,543,804 | ) | ||||||||||
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Investor C |
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Shares sold |
21,226 | $ | 233,394 | 60,668 | $ | 681,106 | 196,342 | $ | 2,300,717 | |||||||||||||||
Shares issued in reinvestment of distributions |
| | 75,994 | 827,570 | 8,705 | 100,982 | ||||||||||||||||||
Shares redeemed |
(484,504 | ) | (5,318,904 | ) | (506,845 | ) | (5,673,845 | ) | (589,686 | ) | (6,931,926 | ) | ||||||||||||
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(463,278 | ) | $ | (5,085,510 | ) | (370,183 | ) | $ | (4,165,169 | ) | (384,639 | ) | $ | (4,530,227 | ) | ||||||||||
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Class K |
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Shares sold |
433,307 | $ | 5,059,238 | 51,096 | $ | 595,204 | 38,310 | $ | 480,954 | |||||||||||||||
Shares issued in reinvestment of distributions |
95 | 1,121 | 2,152 | 24,794 | 254 | 3,097 | ||||||||||||||||||
Shares redeemed |
(32,642 | ) | (384,133 | ) | (60,550 | ) | (704,301 | ) | (20,617 | ) | (262,158 | ) | ||||||||||||
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400,760 | $ | 4,676,226 | (7,302 | ) | $ | (84,303 | ) | 17,947 | $ | 221,893 | ||||||||||||||
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(4,885,663 | ) | $ | (55,842,584 | ) | (2,321,286 | ) | $ | (25,061,624 | ) | (3,270,101 | ) | $ | (40,385,376 | ) | ||||||||||
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12. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were issued and has determined that there were no subsequent events requiring adjustment or additional disclosure in the financial statements.
N O T E S T O F I N A N C I A L S T A T E M E N T S |
85 |
Report of Independent Registered Public Accounting Firm
To the Shareholders of BlackRock Advantage Emerging Markets Fund and BlackRock Global Long/Short Equity Fund and the Board of Trustees of BlackRock FundsSM:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statements of assets and liabilities of BlackRock Advantage Emerging Markets Fund and BlackRock Global Long/Short Equity Fund of BlackRock FundsSM (the Funds), including the schedules of investments, as of April 30, 2021, the related statements of operations for the year then ended, the statements of changes in net assets and the financial highlights for the year then ended and for the period from August 1, 2019 through April 30, 2020, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Funds as of April 30, 2021, and the results of their operations for the year then ended, the changes in their net assets and the financial highlights for the year then ended and for the period from August 1, 2019 through April 30, 2020, in conformity with accounting principles generally accepted in the United States of America.
The statements of changes in net assets for the year ended July 31, 2019, and the financial highlights for each of the four years in the period ended July 31, 2019 of the Funds were audited by other auditors whose report dated September 24, 2019, expressed an unqualified opinion on those financial statements and financial highlights.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Funds management. Our responsibility is to express an opinion on the Funds financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of April 30, 2021, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
Deloitte & Touche LLP
Boston, Massachusetts
June 22, 2021
We have served as the auditor of one or more BlackRock investment companies since 1992.
86 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Important Tax Information (unaudited)
The following maximum amounts are hereby designated as qualified dividend income for individuals for the fiscal year ended April 30, 2021:
Fund Name | Qualified Dividend Income |
|||
Advantage Emerging Markets |
$ | 1,920,407 |
For the fiscal year ended April 30, 2021, the Fund intends to pass through to its shareholders foreign source income earned and foreign taxes paid by the underlying funds:
Fund Name | Foreign Source Income Earned |
Foreign Taxes Paid |
||||||
Advantage Emerging Markets |
$ | 2,105,969 | $ | 575,738 |
For the fiscal year ended April 30, 2021, the Funds hereby designate the following maximum amounts allowable as interest-related and qualified short-term capital gain dividends eligible for exemption from U.S. withholding tax for nonresident aliens and foreign corporations:
Fund Name | Interest-Related and Qualified Short-Term Capital Gain Dividends |
|||
Advantage Emerging Markets |
$ | 2,224 | ||
Global Long/Short Equity |
1,497,210 |
87 |
Statement Regarding Liquidity Risk Management Program
In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the Liquidity Rule), BlackRock FundsSM (the Trust) has adopted and implemented a liquidity risk management program (the Program) for BlackRock Advantage Emerging Markets Fund and BlackRock Global Long/Short Equity Fund (the Funds), each a series of the Trust, which is reasonably designed to assess and manage each Funds liquidity risk.
The Board of Trustees (the Board) of the Trust, on behalf of the Funds, met on November 10-11, 2020 (the Meeting) to review the Program. The Board previously appointed BlackRock Advisors, LLC or BlackRock Fund Advisors (BlackRock), each an investment adviser to certain funds, as the program administrator for each Funds Program, as applicable. BlackRock also previously delegated oversight of the Program to the 40 Act Liquidity Risk Management Committee (the Committee). At the Meeting, the Committee, on behalf of BlackRock, provided the Board with a report that addressed the operation of the Program and assessed its adequacy and effectiveness of implementation, including the management of each Funds Highly Liquid Investment Minimum (HLIM) where applicable, and any material changes to the Program (the Report). The Report covered the period from October 1, 2019 through September 30, 2020 (the Program Reporting Period).
The Report described the Programs liquidity classification methodology for categorizing a Funds investments (including derivative transactions) into one of four liquidity buckets. It also referenced the methodology used by BlackRock to establish a Funds HLIM and noted that the Committee reviews and ratifies the HLIM assigned to each Fund no less frequently than annually. The Report also discussed notable events affecting liquidity over the Program Reporting Period, including the impact of the coronavirus outbreak on the Funds and the overall market.
The Report noted that the Program complied with the key factors for consideration under the Liquidity Rule for assessing, managing and periodically reviewing a Funds liquidity risk, as follows:
a) | The Funds investment strategy and liquidity of portfolio investments during both normal and reasonably foreseeable stressed conditions. During the Program Reporting Period, the Committee reviewed whether each Funds strategy is appropriate for an open-end fund structure with a focus on Funds with more significant and consistent holdings of less liquid and illiquid assets. The Committee also factored a Funds concentration in an issuer into the liquidity classification methodology by taking issuer position sizes into account. Where a Fund participated in borrowings for investment purposes (such as tender option bonds and reverse repurchase agreements), such borrowings were factored into the Programs calculation of a Funds liquidity bucketing. Derivative exposure was also considered in such calculation. |
b) | Short-term and long-term cash flow projections during both normal and reasonably foreseeable stressed conditions. During the Program Reporting Period, the Committee reviewed historical net redemption activity and used this information as a component to establish each Funds reasonably anticipated trading size (RATS). Each Fund has adopted an in-kind redemption policy which may be utilized to meet larger redemption requests. The Committee may also take into consideration a Funds shareholder ownership concentration (which, depending on product type and distribution channel, may or may not be available), a Funds distribution channels, and the degree of certainty associated with a Funds short-term and long-term cash flow projections. |
c) | Holdings of cash and cash equivalents, as well as borrowing arrangements. The Committee considered the terms of the credit facility committed to the Funds, the financial health of the institution providing the facility and the fact that the credit facility is shared among multiple Funds (including that a portion of the aggregate commitment amount is specifically designated for BlackRock Floating Rate Income Portfolio, a series of BlackRock Funds V). The Committee also considered other types of borrowing available to the Funds, such as the ability to use reverse repurchase agreements and interfund lending, as applicable. |
There were no material changes to the Program during the Program Reporting Period. The Report provided to the Board stated that the Committee concluded that based on the operation of the functions, as described in the Report, the Program is operating as intended and is effective in implementing the requirements of the Liquidity Rule.
88 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Trustee and Officer Information
Independent Trustees(a) | ||||||||
Name Year of Birth(b) |
Position(s) Held (Length of Service)(c) |
Principal Occupation(s) During Past Five Years | Number of BlackRock-Advised Registered Investment Companies (RICs) Consisting of Investment Portfolios (Portfolios) Overseen |
Public Company and Other Investment Company Directorships Held During Past Five Years | ||||
Mark Stalnecker 1951 |
Chair of the Board (Since 2019) and Trustee (Since 2015) |
Chief Investment Officer, University of Delaware from 1999 to 2013; Trustee and Chair of the Finance and Investment Committees, Winterthur Museum and Country Estate from 2005 to 2016; Member of the Investment Committee, Delaware Public Employees Retirement System since 2002; Member of the Investment Committee, Christiana Care Health System from 2009 to 2017; Member of the Investment Committee, Delaware Community Foundation from 2013 to 2014; Director and Chair of the Audit Committee, SEI Private Trust Co. from 2001 to 2014. | 30 RICs consisting of 152 Portfolios | None | ||||
Bruce R. Bond 1946 |
Trustee (Since 2019) |
Board Member, Amsphere Limited (software) since 2018; Trustee and Member of the Governance Committee, State Street Research Mutual Funds from 1997 to 2005; Board Member of Governance, Audit and Finance Committee, Avaya Inc. (computer equipment) from 2003 to 2007. | 30 RICs consisting of 152 Portfolios | None | ||||
Susan J. Carter 1956 |
Trustee (Since 2016) |
Director, Pacific Pension Institute from 2014 to 2018; Advisory Board Member, Center for Private Equity and Entrepreneurship at Tuck School of Business since 1997; Senior Advisor, Commonfund Capital, Inc. (CCI) (investment adviser) in 2015; Chief Executive Officer, CCI from 2013 to 2014; President & Chief Executive Officer, CCI from 1997 to 2013; Advisory Board Member, Girls Who Invest from 2015 to 2018 and Board Member thereof since 2018; Advisory Board Member, Bridges Fund Management since 2016; Trustee, Financial Accounting Foundation since 2017; Practitioner Advisory Board Member, Private Capital Research Institute (PCRI) since 2017; Lecturer in the Practice of Management, Yale School of Management since 2019; Advisor to Finance Committee, Altman Foundation since 2020. | 30 RICs consisting of 152 Portfolios | None | ||||
Collette Chilton 1958 |
Trustee (Since 2015) |
Chief Investment Officer, Williams College since 2006; Chief Investment Officer, Lucent Asset Management Corporation from 1998 to 2006; Director, Boys and Girls Club of Boston since 2017; Director, B1 Capital since 2018; Director, David and Lucile Packard Foundation since 2020. | 30 RICs consisting of 152 Portfolios | None | ||||
Neil A. Cotty 1954 |
Trustee (Since 2016) |
Bank of America Corporation from 1996 to 2015, serving in various senior finance leadership roles, including Chief Accounting Officer from 2009 to 2015, Chief Financial Officer of Global Banking, Markets and Wealth Management from 2008 to 2009, Chief Accounting Officer from 2004 to 2008, Chief Financial Officer of Consumer Bank from 2003 to 2004, Chief Financial Officer of Global Corporate Investment Bank from 1999 to 2002. | 30 RICs consisting of 152 Portfolios | None | ||||
Lena G. Goldberg 1949 |
Trustee (Since 2019) |
Senior Lecturer, Harvard Business School, since 2008; Director, Charles Stark Draper Laboratory, Inc. since 2013; FMR LLC/Fidelity Investments (financial services) from 1996 to 2008, serving in various senior roles including Executive Vice President - Strategic Corporate Initiatives and Executive Vice President and General Counsel; Partner, Sullivan & Worcester LLP from 1985 to 1996 and Associate thereof from 1979 to 1985. | 30 RICs consisting of 152 Portfolios | None |
T R U S T E E A N D O F F I C E R I N F O R M A T I O N |
89 |
Trustee and Officer Information (continued)
Independent Trustees(a) (continued) | ||||||||
Name Year of Birth(b) |
Position(s) Held (Length of Service)(c) |
Principal Occupation(s) During Past Five Years | Number of BlackRock-Advised Registered Investment Companies (RICs) Consisting of Investment Portfolios (Portfolios) Overseen |
Public Company and Other Investment Company Directorships Held During Past Five Years | ||||
Henry R. Keizer 1956 |
Trustee (Since 2019) |
Director, Park Indemnity Ltd. (captive insurer) since 2010; Director, MUFG Americas Holdings Corporation and MUFG Union Bank, N.A. (financial and bank holding company) from 2014 to 2016; Director, American Institute of Certified Public Accountants from 2009 to 2011; Director, KPMG LLP (audit, tax and advisory services) from 2004 to 2005 and 2010 to 2012; Director, KPMG International in 2012, Deputy Chairman and Chief Operating Officer thereof from 2010 to 2012 and U.S. Vice Chairman of Audit thereof from 2005 to 2010; Global Head of Audit, KPMGI (consortium of KPMG firms) from 2006 to 2010; Director, YMCA of Greater New York from 2006 to 2010. | 30 RICs consisting of 152 Portfolios | Hertz Global Holdings (car rental); WABCO (commercial vehicle safety systems) from 2015 to 2020; Montpelier Re Holdings, Ltd. (publicly held property and casualty reinsurance) from 2013 until 2015; Sealed Air Corp. (packaging) | ||||
Cynthia A. Montgomery 1952 |
Trustee (Since 2007) |
Professor, Harvard Business School since 1989. | 30 RICs consisting of 152 Portfolios | Newell Rubbermaid, Inc. (manufacturing) from 1995 to 2016. | ||||
Donald C. Opatrny 1952 |
Trustee (Since 2019) |
Trustee, Vice Chair, Member of the Executive Committee and Chair of the Investment Committee, Cornell University from 2004 to 2019; President, Trustee and Member of the Investment Committee, The Aldrich Contemporary Art Museum from 2007 to 2014; Member of the Board and Investment Committee, University School from 2007 to 2018; Member of the Investment Committee, Mellon Foundation from 2009 to 2015; Trustee, Artstor (a Mellon Foundation affiliate) from 2010 to 2015; President and Trustee, the Center for the Arts, Jackson Hole from 2011 to 2018; Director, Athena Capital Advisors LLC (investment management firm) since 2013; Trustee and Chair of the Investment Committee, Community Foundation of Jackson Hole since 2014; Member of Affordable Housing Supply Board of Jackson, Wyoming since 2017; Member, Investment Funds Committee, State of Wyoming since 2017; Trustee, Phoenix Art Museum since 2018; Trustee, Arizona Community Foundation and Member of Investment Committee since 2020. | 30 RICs consisting of 152 Portfolios | None | ||||
Joseph P. Platt 1947 |
Trustee (Since 2007) |
General Partner, Thorn Partners, LP (private investments) since 1998; Director, WQED Multi-Media (public broadcasting not-for-profit) since 2001; Chair, Basic Health International (non-profit) since 2015. | 30 RICs consisting of 152 Portfolios | Greenlight Capital Re, Ltd. (reinsurance company); Consol Energy Inc. | ||||
Kenneth L. Urish 1951 |
Trustee (Since 2007) |
Managing Partner, Urish Popeck & Co., LLC (certified public accountants and consultants) since 1976; Past- Chairman of the Professional Ethics Committee of the Pennsylvania Institute of Certified Public Accountants and Committee Member thereof since 2007; Member of External Advisory Board, The Pennsylvania State University Accounting Department since founding in 2001; Principal, UP Strategic Wealth Investment Advisors, LLC since 2013; Trustee, The Holy Family Institute from 2001 to 2010; President and Trustee, Pittsburgh Catholic Publishing Associates from 2003 to 2008; Director, Inter- Tel from 2006 to 2007; Member Advisory Board, ESG Competent Boards since 2020. | 30 RICs consisting of 152 Portfolios | None |
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Trustee and Officer Information (continued)
Independent Trustees(a) (continued) | ||||||||
Name Year of Birth(b) |
Position(s) Held (Length of Service)(c) |
Principal Occupation(s) During Past Five Years |
Number of BlackRock-Advised Investment Portfolios |
Public Company and Other Investment Company Held During Past Five Years | ||||
Claire A. Walton 1957 |
Trustee (Since 2016) | Chief Operating Officer and Chief Financial Officer of Liberty Square Asset Management, LP from 1998 to 2015; General Partner of Neon Liberty Capital Management, LLC since 2003; Director, Boston Hedge Fund Group from 2009 to 2018; Director, Woodstock Ski Runners since 2013; Director, Massachusetts Council on Economic Education from 2013 to 2015. | 30 RICs consisting of 152 Portfolios | None | ||||
Interested Trustees(a)(d) | ||||||||
Name Year of Birth(b) |
Position(s) Held (Length of Service)(c) |
Principal Occupation(s) During Past Five Years | Number of BlackRock-Advised Registered Investment Companies (RICs) Consisting of Investment Portfolios (Portfolios) Overseen |
Public Company and Other Investment Company Held During Past Five Years | ||||
Robert Fairbairn 1965 |
Trustee (Since 2018) | Vice Chairman of BlackRock, Inc. since 2019; Member of BlackRocks Global Executive and Global Operating Committees; Co-Chair of BlackRocks Human Capital Committee; Senior Managing Director of BlackRock, Inc. from 2010 to 2019; oversaw BlackRocks Strategic Partner Program and Strategic Product Management Group from 2012 to 2019; Member of the Board of Managers of BlackRock Investments, LLC from 2011 to 2018; Global Head of BlackRocks Retail and iShares® businesses from 2012 to 2016. | 103 RICs consisting of 250 Portfolios | None | ||||
John M. Perlowski(e) 1964 |
Trustee (Since 2015) President and Chief Executive Officer (Since 2010) |
Managing Director of BlackRock, Inc. since 2009; Head of BlackRock Global Accounting and Product Services since 2009; Advisory Director of Family Resource Network (charitable foundation) since 2009. | 105 RICs consisting of 252 Portfolios | None |
(a) | The address of each Trustee is c/o BlackRock, Inc., 55 East 52nd Street, New York, New York 10055. |
(b) | Independent Trustees serve until their resignation, retirement, removal or death, or until December 31 of the year in which they turn 75. The Board may determine to extend the terms of Independent Trustees on a case-by-case basis, as appropriate. |
(c) | Following the combination of Merrill Lynch Investment Managers, L.P. (MLIM) and BlackRock, Inc. in September 2006, the various legacy MLIM and legacy BlackRock fund boards were realigned and consolidated into three new fund boards in 2007. Furthermore, effective January 1, 2019, three BlackRock Fund Complexes were realigned and consolidated into two BlackRock Fund Complexes. As a result, although the chart shows the year that each Independent Trustee joined the Board, certain Independent Trustees first became members of the boards of other BlackRock-advised Funds, legacy MLIM funds or legacy BlackRock funds as follows: Bruce R. Bond, 2005; Cynthia A. Montgomery, 1994; Joseph P. Platt, 1999; Kenneth L. Urish, 1999; Lena G. Goldberg, 2016; Henry R. Keizer, 2016; Donald C. Opatrny, 2015. |
(d) | Mr. Fairbairn and Mr. Perlowski are both interested persons, as defined in the 1940 Act, of the Trust based on their positions with BlackRock, Inc. and its affiliates. Mr. Fairbairn and Mr. Perlowski are also board members of the BlackRock Fixed-Income Complex. |
(e) | Mr. Perlowski is also a trustee of the BlackRock Credit Strategies Fund and BlackRock Private Investments Fund. |
T R U S T E E A N D O F F I C E R I N F O R M A T I O N |
91 |
Trustee and Officer Information (continued)
Officers Who Are Not Trustees(a) | ||||
Name | Position(s) Held | |||
Year of Birth(b) | (Length of Service) | Principal Occupation(s) During Past Five Years | ||
Thomas Callahan 1968 |
Vice President (Since 2016) |
Managing Director of BlackRock, Inc. since 2013; Member of the Board of Managers of BlackRock Investments, LLC (principal underwriter) since 2019 and Managing Director thereof since 2017; Head of BlackRocks Global Cash Management Business since 2016; Co-Head of the Global Cash Management Business from 2014 to 2016; Deputy Head of the Global Cash Management Business from 2013 to 2014; Member of the Cash Management Group Executive Committee since 2013; Chief Executive Officer of NYSE Liffe U.S. from 2008 to 2013. | ||
Jennifer McGovern 1977 |
Vice President (Since 2014) | Managing Director of BlackRock, Inc. since 2016; Director of BlackRock, Inc. from 2011 to 2015; Head of Americas Product Development and Governance for BlackRocks Global Product Group since 2019; Head of Product Structure and Oversight for BlackRocks U.S. Wealth Advisory Group from 2013 to 2019. | ||
Trent Walker 1974 |
Chief Financial Officer (Since 2021) | Managing Director of BlackRock, Inc. since September 2019; Executive Vice President of PIMCO from 2016 to 2019; Senior Vice President of PIMCO from 2008 to 2015; Treasurer from 2013 to 2019 and Assistant Treasurer from 2007 to 2017 of PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, 2 PIMCO-sponsored interval funds and 21 PIMCO-sponsored closed-end funds. | ||
Jay M. Fife 1970 |
Treasurer (Since 2007) |
Managing Director of BlackRock, Inc. since 2007. | ||
Charles Park 1967 |
Chief Compliance Officer (Since 2014) |
Anti-Money Laundering Compliance Officer for certain BlackRock-advised Funds from 2014 to 2015; Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the BlackRock Multi-Asset Complex and the BlackRock Fixed-Income Complex since 2014; Principal of and Chief Compliance Officer for iShares® Delaware Trust Sponsor LLC since 2012 and BlackRock Fund Advisors (BFA) since 2006; Chief Compliance Officer for the BFA-advised iShares® exchange traded funds since 2006; Chief Compliance Officer for BlackRock Asset Management International Inc. since 2012. | ||
Lisa Belle 1968 |
Anti-Money Laundering Compliance Officer (Since 2019) | Managing Director of BlackRock, Inc. since 2019; Global Financial Crime Head for Asset and Wealth Management of JP Morgan from 2013 to 2019; Managing Director of RBS Securities from 2012 to 2013; Head of Financial Crimes for Barclays Wealth Americas from 2010 to 2012. | ||
Janey Ahn 1975 |
Secretary (Since 2019) |
Managing Director of BlackRock, Inc. since 2018; Director of BlackRock, Inc. from 2009 to 2017. |
(a) | The address of each Officer is c/o BlackRock, Inc., 55 East 52nd Street, New York, New York 10055. |
(b) | Officers of the Trust serve at the pleasure of the Board. |
Further information about the Trusts Trustees and Officers is available in the Trusts Statement of Additional Information, which can be obtained without charge by calling (800) 441-7762.
Neal J. Andrews retired as the Chief Financial Officer effective December 31, 2020, and Trent Walker was elected as the Chief Financial Officer effective January 1, 2021.
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Regulation Regarding Derivatives
On October 28, 2020, the Securities and Exchange Commission (the SEC) adopted new regulations governing the use of derivatives by registered investment companies (Rule 18f-4). The Funds will be required to implement and comply with Rule 18f-4 by August 19, 2022. Once implemented, Rule 18f-4 will impose limits on the amount of derivatives a fund can enter into, eliminate the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act, treat derivatives as senior securities and require funds whose use of derivatives is more than a limited specified exposure amount to establish and maintain a comprehensive derivatives risk management program and appoint a derivatives risk manager.
General Information
Quarterly performance, semi-annual and annual reports, current net asset value and other information regarding the Funds may be found on BlackRocks website, which can be accessed at blackrock.com. Any reference to BlackRocks website in this report is intended to allow investors public access to information regarding the Funds and does not, and is not intended to, incorporate BlackRocks website in this report.
Householding
The Funds will mail only one copy of shareholder documents, including prospectuses, annual and semi-annual reports, Rule 30e-3 notices and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called householding and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please call the Funds at (800) 441-7762.
Availability of Quarterly Schedule of Investments
The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to their reports on Form N-PORT. The Funds Forms N-PORT are available on the SECs website at sec.gov. Additionally, each Fund makes its portfolio holdings for the first and third quarters of each fiscal year available at blackrock.com/fundreports.
Availability of Proxy Voting Policies, Procedures and Voting Records
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to securities held in the Funds portfolios during the most recent 12-month period ended June 30 is available without charge, upon request (1) by calling (800) 441-7762; (2) on the BlackRock website at blackrock.com; and (3) on the SECs website at sec.gov.
BlackRocks Mutual Fund Family
BlackRock offers a diverse lineup of open-end mutual funds crossing all investment styles and managed by experts in equity, fixed-income and tax-exempt investing. Visit blackrock.com for more information.
Shareholder Privileges
Account Information
Call us at (800) 441-7762 from 8:00 AM to 6:00 PM ET on any business day to get information about your account balances, recent transactions and share prices. You can also visit blackrock.com for more information.
Automatic Investment Plans
Investor class shareholders who want to invest regularly can arrange to have $50 or more automatically deducted from their checking or savings account and invested in any of the BlackRock funds.
Systematic Withdrawal Plans
Investor class shareholders can establish a systematic withdrawal plan and receive periodic payments of $50 or more from their BlackRock funds, as long as their account balance is at least $10,000.
Retirement Plans
Shareholders may make investments in conjunction with Traditional, Rollover, Roth, Coverdell, Simple IRAs, SEP IRAs and 403(b) Plans.
A D D I T I O N A L I N F O R M A T I O N |
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Additional Information (continued)
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, Clients) and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.
If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.
BlackRock obtains or verifies personal non-public information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our websites.
BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.
We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.
Fund and Service Providers
Investment Adviser and Administrator | Distributor | |
BlackRock Advisors, LLC | BlackRock Investments, LLC | |
Wilmington, DE 19809 | New York, NY 10022 | |
Sub-Adviser | Independent Registered Public Accounting Firm | |
BlackRock International Limited(a) | Deloitte & Touche LLP | |
Edinburgh, EH3 8BL | Boston, MA 02116 | |
United Kingdom |
Legal Counsel | |
Accounting Agent and Custodian | Sidley Austin LLP | |
State Street Bank and Trust Company | New York, NY 10019 | |
Boston, MA 02111 | ||
Address of the Funds | ||
Transfer Agent | 100 Bellevue Parkway | |
BNY Mellon Investment Servicing (US) Inc. | Wilmington, DE 19809 | |
Wilmington, DE 19809 |
(a) | For Global Long/Short Equity. |
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Glossary of Terms Used in this Report
G L O S S A R Y O F T E R M S U S E D I N T H I S R E P O R T |
95 |
Want to know more?
blackrock.com | 800-441-7762
This report is intended for current holders. It is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of the Funds unless preceded or accompanied by the Funds current prospectus. Past performance results shown in this report should not be considered a representation of future performance. Investment returns and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are as dated and are subject to change.
EMLSGLS-04/21-AR
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(b) Not Applicable
Item 3 | Audit Committee Financial Expert The registrants board of directors (the board of directors), has determined that (i) the registrant has the following audit committee financial experts serving on its audit committee and (ii) each audit committee financial expert is independent: |
Neil A. Cotty
Henry R. Keizer
Kenneth L. Urish
Under applicable securities laws, a person determined to be an audit committee financial expert will not be deemed an expert for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. The designation or identification of a person as an audit committee financial expert does not affect the duties, obligations, or liability of any other member of the audit committee or board of directors.
Item 4 | Principal Accountant Fees and Services |
The following table presents fees billed by PricewaterhouseCoopers LLP (PwC) and Deloitte & Touche (D&T) in each of the last two fiscal years for the services rendered to the Fund:
(a) Audit Fees | (b) Audit-Related Fees1 | (c) Tax Fees2 | (d) All Other Fees | |||||||||||||
Entity Name | Current Fiscal Year End |
Previous Fiscal Year End3 |
Current Fiscal Year End |
Previous Fiscal Year End3 |
Current Fiscal Year End |
Previous Fiscal Year End3 |
Current Fiscal Year End |
Previous Fiscal Year End3 | ||||||||
BlackRock Advantage Emerging Markets Fund |
$45,551 | $46,920 | $0 | $0 | $21,800 | $23,600 | $0 | $0 | ||||||||
BlackRock Global Long/Short Equity Fund |
$61,408 | $63,240 | $0 | $0 | $21,800 | $20,000 | $0 | $0 |
The following table presents fees billed by PwC that were required to be approved by the registrants audit committee (the Committee) for services that relate directly to the operations or financial reporting of the Fund and that are rendered on behalf of BlackRock Advisors, LLC (the Investment Adviser or BlackRock) and entities controlling, controlled by, or under common control with BlackRock (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) that provide ongoing services to the Fund (Affiliated Service Providers):
2
Current Fiscal Year End | Previous Fiscal Year End3 | |||
(b) Audit-Related Fees1 |
$0 | $0 | ||
(c) Tax Fees2 |
$0 | $0 | ||
(d) All Other Fees4 |
$0 | $0 |
1 | The nature of the services includes assurance and related services reasonably related to the performance of the audit or review of financial statements not included in Audit Fees, including accounting consultations, agreed-upon procedure reports, attestation reports, comfort letters, out-of-pocket expenses and internal control reviews not required by regulators. |
2 | The nature of the services includes tax compliance and/or tax preparation, including services relating to the filing or amendment of federal, state or local income tax returns, regulated investment company qualification reviews, taxable income and tax distribution calculations. |
3 | BlackRock Advantage Emerging Markets Fund and BlackRock Global Long/Short Equity Fund each changed their fiscal year ends from July 31 to April 30 effective April 30, 2020 whereby the fiscal period for each fund consists of the nine months ended April 30. |
4 | Aggregate fees borne by BlackRock in connection with the review of compliance procedures and attestation thereto performed by PwC with respect to all of the registered closed-end funds and some of the registered open-end funds advised by BlackRock. |
(e)(1) Audit Committee Pre-Approval Policies and Procedures:
The Committee has adopted policies and procedures with regard to the pre-approval of services. Audit, audit-related and tax compliance services provided to the registrant on an annual basis require specific pre-approval by the Committee. The Committee also must approve other non-audit services provided to the registrant and those non-audit services provided to the Investment Adviser and Affiliated Service Providers that relate directly to the operations and the financial reporting of the registrant. Certain of these non-audit services that the Committee believes are (a) consistent with the SECs auditor independence rules and (b) routine and recurring services that will not impair the independence of the independent accountants may be approved by the Committee without consideration on a specific case-by-case basis (general pre-approval). The term of any general pre-approval is 12 months from the date of the pre-approval, unless the Committee provides for a different period. Tax or other non-audit services provided to the registrant which have a direct impact on the operations or financial reporting of the registrant will only be deemed pre-approved provided that any individual project does not exceed $10,000 attributable to the registrant or $50,000 per project. For this purpose, multiple projects will be aggregated to determine if they exceed the previously mentioned cost levels.
Any proposed services exceeding the pre-approved cost levels will require specific pre-approval by the Committee, as will any other services not subject to general pre-approval (e.g., unanticipated but permissible services). The Committee is informed of each service approved subject to general pre-approval at the next regularly scheduled in-person board meeting. At this meeting, an analysis of such services is presented to the Committee for ratification. The Committee may delegate to the Committee Chairman the authority to approve the provision of and fees for any specific engagement of permitted non-audit services, including services exceeding pre-approved cost levels.
(e)(2) None of the services described in each of Items 4(b) through (d) were approved by the Committee pursuant to the de minimis exception in paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not Applicable
(g) The aggregate non-audit fees, defined as the sum of the fees shown under Audit-Related Fees,
3
Tax Fees and All Other Fees, paid to the accountant for services rendered by the accountant to the registrant, the Investment Adviser and the Affiliated Service Providers were:
Entity Name | Current Fiscal Year End | Previous Fiscal Year End1 | ||
BlackRock Advantage Emerging Markets Fund |
$21,800 | $23,600 | ||
BlackRock Global Long/Short Equity Fund |
$21,800 | $20,000 |
1 | BlackRock Advantage Emerging Markets Fund and BlackRock Global Long/Short Equity Fund each changed their fiscal year ends from July 31 to April 30 effective April 30, 2020 whereby the fiscal period for each fund consists of the nine months ended April 30. |
(h) The Committee has considered and determined that the provision of non-audit services that were rendered to the Investment Adviser and the Affiliated Service Providers that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountants independence.
Item 5 | Audit Committee of Listed Registrant Not Applicable |
Item 6 | Investments |
(a) The registrants Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this Form.
(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.
Item 7 | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies Not Applicable |
Item 8 | Portfolio Managers of Closed-End Management Investment Companies Not Applicable |
Item 9 | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers Not Applicable |
Item 10 | Submission of Matters to a Vote of Security Holders There have been no material changes to these procedures. |
Item 11 | Controls and Procedures |
(a) The registrants principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrants disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the 1940 Act)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 15d-15(b) under the Securities Exchange Act of 1934, as amended.
(b) There were no changes in the registrants internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrants internal control over financial reporting.
Item 12 | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies Not Applicable |
Item 13 | Exhibits attached hereto |
4
(a)(1) Code of Ethics See Item 2
(a)(2) Section 302 Certifications are attached
(a)(3) Not Applicable
(a)(4) Not Applicable
(b) Section 906 Certifications are attached
5
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BlackRock Funds
By: | /s/ John M. Perlowski | |||
John M. Perlowski | ||||
Chief Executive Officer (principal executive officer) of | ||||
BlackRock Funds |
Date: July 6, 2021
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ John M. Perlowski | |||
John M. Perlowski | ||||
Chief Executive Officer (principal executive officer) of | ||||
BlackRock Funds |
Date: July 6, 2021
By: | /s/ Trent Walker | |||
Trent Walker | ||||
Chief Financial Officer (principal financial officer) of | ||||
BlackRock Funds |
Date: July 6, 2021
6
EX-99. CERT
CERTIFICATION PURSUANT TO RULE 30a-2(a) UNDER THE 1940 ACT AND SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, John M. Perlowski, Chief Executive Officer (principal executive officer) of BlackRock Funds, certify that:
1. I have reviewed this report on Form N-CSR of BlackRock Funds;
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 financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrants 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 registrants 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 registrants internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer(s) and I have disclosed to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting.
Date: July 6, 2021
s/ John M. Perlowski
John M. Perlowski
Chief Executive Officer (principal executive officer) of
BlackRock Funds
EX-99. CERT
CERTIFICATION PURSUANT TO RULE 30a-2(a) UNDER THE 1940 ACT AND SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Trent Walker, Chief Financial Officer (principal financial officer) of BlackRock Funds, certify that:
1. I have reviewed this report on Form N-CSR of BlackRock Funds;
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 financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrants 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 registrants 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 registrants internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer(s) and I have disclosed to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting.
Date: July 6, 2021
/s/ Trent Walker
Trent Walker
Chief Financial Officer (principal financial officer) of
BlackRock Funds
Exhibit 99.906CERT
Certification Pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to 18 U.S.C. § 1350, the undersigned officer of BlackRock Funds (the registrant), hereby certifies, to the best of his knowledge, that the registrants Report on Form N-CSR for the period ended April 30, 2021 (the Report) fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the registrant.
Date: July 6, 2021
/s/ John M. Perlowski
John M. Perlowski
Chief Executive Officer (principal executive officer) of
BlackRock Funds
Pursuant to 18 U.S.C. § 1350, the undersigned officer of BlackRock Funds (the registrant), hereby certifies, to the best of his knowledge, that the registrants Report on Form N-CSR for the period ended April 30, 2021 (the Report) fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the registrant.
Date: July 6, 2021
/s/ Trent Walker
Trent Walker
Chief Financial Officer (principal financial officer) of
BlackRock Funds
This certification is being furnished pursuant to Rule 30a-2(b) under the Investment Company Act of 1940, as amended, and 18 U.S.C. § 1350 and is not being filed as part of the Form N-CSR with the Securities and Exchange Commission.
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