BlackRock Funds IV N-CSR Certified annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORMN-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number:811-23341

Name of Fund:  BlackRock Funds IV

BlackRock Systematic Multi-Strategy Fund (Formerly BlackRock Alternative Capital

Strategies Fund)

Fund Address:    100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Funds IV, 55 East

52^nd Street, New York, NY 10055

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

Date of fiscal year end: 12/31/2018

Date of reporting period: 12/31/2018

Item 1 – Report to Stockholders

DECEMBER 31, 2018

ANNUAL REPORT

BlackRock Funds^SM

^Ø  BlackRock Emerging Markets Equity Strategies Fund

^Ø  iShares Short-Term TIPS Bond Index Fund

BlackRock Funds IV

^Ø  BlackRock Alternative Capital Strategies Fund

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of each Fund’s shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from BlackRock or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.

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Not FDIC Insured • May Lose Value • No Bank Guarantee

The Markets in Review

Dear Shareholder,

In the 12 months ended December 31, 2018, concerns about a variety of political risks and a modest slowdown in global growth worked against the equity market despite solid corporate earnings, while rising interest rates constrained bond returns. Though the market’s appetite for risk remained healthy for most of the reporting period, risk-taking declined sharply later in the reporting period. As a result, bonds held their value better than stocks, which posted negative returns across the globe. Shorter-term, higher-quality securities led the bond market, and U.S. equities outperformed most international stock markets.

Volatility rose in emerging market stocks, as the rising U.S. dollar and higher interest rates in the U.S. disrupted economic growth abroad. U.S.-China trade relations and debt concerns adversely affected the Chinese stock market, while Turkey and Argentina became embroiled in currency crises, largely due to hyperinflation in both countries. An economic slowdown in Europe also led to negative performance for European equities.

In fixed income markets, short-term U.S. Treasury interest rates rose the fastest, while longer-term rates slightly increased. This led to a negative return for long-term U.S. Treasuries and a substantial flattening of the yield curve. Many investors are concerned with the flattening yield curve as a harbinger of recession. However, given the extraordinary monetary measures in the last decade, we believe a more accurate barometer for the economy is the returns along the risk spectrums in stock and bond markets. Although the fundamentals in credit markets remained relatively solid, investment-grade bonds posted flat returns, and high-yield bonds declined slightly. Recent sell-offs in risk assets have flattened asset returns along the risk spectrum somewhat, which bears further scrutiny in the months ahead.

In response to rising growth and inflation, the U.S. Federal Reserve (the “Fed”) increased short-term interest rates four times during the reporting period. The Fed also continued to reduce its balance sheet, gradually reversing the unprecedented stimulus measures it enacted after the financial crisis. By our estimation, the Fed’s neutral interest rate, or the theoretical rate that is neither stimulative nor restrictive to the economy, is approximately 3.0%. With that perspective, the Fed’s current policy is still mildly stimulative to the U.S. economy, which leaves room for further Fed rate hikes to arrive at monetary policy that is a neutral factor for economic growth.

Volatility in the U.S. equity market spiked in October, as a wide range of risks were brought to bear on markets, ranging from rising interest rates and slowing global growth to heightened trade tensions and political turmoil in several countries, including the United States. This was accompanied by a broad based risk-off in December — which was the worst December performance on record since 1931. Although fears of recession drove equity volatility higher at the end of 2018, we continue to believe the probability of recession in 2019 remains relatively low.

Economic growth and global earnings are likely to slow somewhat in 2019 — the tax cut stimulus will be less pronounced, and the Fed’s rate hikes in 2018 will gain traction in 2019. Trade frictions look more baked into asset prices than a year ago, but markets may be overlooking European political risks. Consequently, we are cautious on European equities, as European unity remains tenuous with a history of flare-ups. We continue to prefer to take risk in U.S. and emerging market equities. Within U.S. equities, we believe that companies with high-quality earnings and strong balance sheets offer the most attractive risk/reward trade-off. Going into 2019, we also favor short-term bonds over long-term bonds because they offer nearly equivalent yields with far lower volatility.

In this environment, investors need to think globally, extend their scope across a broad array of asset classes, and be nimble as market conditions change. We encourage you to talk with your financial advisor and visitblackrock.com for further insight about investing in today’s markets.

Sincerely,

Rob Kapito

President, BlackRock Advisors, LLC

Rob Kapito

President, BlackRock Advisors, LLC

Total Returns as of December 31, 2018
	6-month	12-month
U.S. large cap equities (S&P 500® Index)	(6.85)%	(4.38)%
U.S. small cap equities (Russell 2000® Index)	(17.35)	(11.01)
International equities (MSCI Europe, Australasia, Far East Index)	(11.35)	(13.79)
Emerging market equities (MSCI Emerging Markets Index)	(8.48)	(14.57)
3-month Treasury bills (ICE BofAML3-Month U.S. Treasury Bill Index)	1.06	1.87
U.S. Treasury securities (ICE BofAML10-Year U.S. Treasury Index)	2.72	(0.03)
U.S. investment grade bonds (Bloomberg Barclays U.S. Aggregate Bond Index)	1.65	0.01
Tax-exempt municipal bonds (S&P Municipal Bond Index)	1.38	1.36
U.S. high yield bonds (Bloomberg Barclays U.S. Corporate High Yield 2% Issuer Capped Index)	(2.24)	(2.08)
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.

2 THIS PAGEISNOT PARTOF YOUR FUND REPORT

Table of Contents

	Page
The Markets in Review		2
Annual Report:
Fund Summaries		4
About Fund Performance		13
Disclosure of Expenses		13
Derivative Financial Instruments		13
Financial Statements:
Schedules of Investments		14
Statements of Assets and Liabilities		40
Statements of Operations		42
Statements of Changes in Net Assets		43
Financial Highlights		45
Notes to Financial Statements		55
Report of Independent Registered Public Accounting Firm		71
Important Tax Information		72
Disclosure of Investment Advisory Agreement andSub-Advisory Agreement		73
Trustee and Officer Information		76
Additional Information		79
Glossary of Terms Used in this Report		81

3

Fund Summary  as of December 31, 2018 BlackRock Emerging Markets Equity Strategies Fund

Investment Objective

BlackRock Emerging Markets Equity Strategies Fund’s (the “Fund”) investment objective is to seek total return.

Portfolio Management Commentary

How did the Fund perform?

For the12-month period ended December 31, 2018, the Fund outperformed its benchmark, the MSCI Emerging Markets Index.

What factors influenced performance?

The Fund’s underweight allocation and stock selection within China was the largest positive contributor to relative performance, driven by positioning that favoredold-economy stocks in the industrials and materials sectors over companies in the information technology (“IT”) sector. Positioning in Brazil also added to performance, as a market-friendly outcome in the national presidential election helped drive a recovery in local markets.

Among individual stocks, the largest contributor to performance was the Fund’sout-of-benchmark position in Israeli Chemicals Ltd., whose shares rallied in response to rising potash prices due to production issues in Brazil and Argentina. Brazilian airline Azul SA and state-controlled energy giant Petroleo Brasileiro SA were also notable contributors on Brazil’s relative strength. Finally, South Korea’s Samsung Engineering Co., Ltd. performed positively after winning two large energy-related contracts in the United Arab Emirates.

By contrast, the Fund’s most notable detractor from performance was its overweight allocation to Greek banks, which performed poorly in line with financial companies throughout Europe. National Bank of Greece SA and Alpha Bank AE were among individual positions detracting from the Fund’s relative return. Another detractor was Argentine bank Grupo Financiero Galicia SA, which performed poorly due to rising inflation and weak financial markets in Argentina. Finally,UAE-based real estate developer Emaar Properties PJSC also detracted, as the company suffered from a lack of visibility and investor confidence in the commercialization of its projects.

As part of its investment strategy, the Fund uses derivatives to achieve exposure to a market or to manage market and/or equity risks. As of the end of the period, the Fund had approximately 62% of assets invested in contracts for difference for its synthetic long and synthetic short positions. The Fund’s use of derivatives during the period had a positive impact on Fund performance.

Describe recent portfolio activity.

The Fund’s most notable activity during the period was to reduce its exposure to China in response to further monetary tightening and deleveraging measures in the domestic economy that started to have an impact on local businesses, as well as U.S. trade tensions. The Fund maintained its underweight in China as a cyclical slowdown became more apparent late in the period. However, the Fund added state-owned energy company PetroChina Co. Ltd., as its share price failed to reflect current oil prices and specific positive catalysts in its natural gas business.

In the second and third quarters of 2018, the Fund redeployed capital into Latin American countries such as Brazil and Argentina, where the emerging-market correction has been the most severe. Perceived overreactions to market weakness prompted additions to high-conviction stocks in Argentina, but later in the period, the Fund cut exposure to Brazilian financial stocks after they rallied following the Brazilian election.

Other portfolio moves included additions to positions in Israeli Chemicals Ltd. on expectations of higher potash prices, and financial company Sberbank of Russia on exaggerated pessimism after the imposition of new economic sanctions. Finally, the Fund reduced its exposure to India following concerns about the outcome of future elections in 2019.

Describe portfolio positioning at period end.

Relative to the MSCI Emerging Markets Index, the Fund ended the period overweight to materials stocks and underweight in the consumer staples and energy sectors. Although the Fund remained underexposed, if not net short, to Chinese internet stocks, it was neutral to the IT sector overall at period end. From a geographical standpoint, the Fund was most overweight in Poland, while underweight in India.

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 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Fund Summary  as of December 31, 2018 (continued) BlackRock Emerging Markets Equity Strategies Fund

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a)  Commencement of operations.

^(b)  Assuming maximum sales charges, if any, transaction costs and other operating expenses, including investment advisory fees. Institutional Shares do not have a sales charge.

^(c)  Under normal conditions, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity instruments and related derivative instruments issued by companies in, or tied economically to, emerging markets.

^(d)  MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The MSCI Emerging Markets Index consists of the following 24 emerging market country indexes: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, South Korea, Malaysia, Mexico, Pakistan, Peru, the Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey and the United Arab Emirates.

Performance Summary for the Period Ended December 31, 2018

				Average Annual Total Returns (a)
				1 Year						Since Inception (b)
	6-Month Total Returns			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge
Institutional		0.61	%		(1.59	)%		N/A			18.22	%		N/A
Investor A		0.43			(1.93	)		(7.08	)%		17.86			15.64	%
Investor C		0.16			(2.59	)		(3.34	)		17.01			17.01
Class K		0.71			(1.49	)		N/A			18.27			N/A
MSCI Emerging Markets Index		(8.48	)		(14.57	)		N/A			12.52			N/A

^(a)  Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See “About Fund Performance” on page 13 for a detailed description of share classes, including any related sales charges and fees.

^(b)  The Fund commenced operations on February 29, 2016.

N/A — Not applicable as share class and index do not have a sales charge.

Past performance is not indicative of future results.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Expense Example

	Actual						Hypothetical (b)
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (a)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (a)		Annualized Expense Ratio
Institutional	$	1,000.00	$	1,006.10	$	6.57	$	1,000.00	$	1,018.65	$	6.61		1.30	%
Investor A		1,000.00		1,004.30		7.88		1,000.00		1,017.34		7.93		1.56
Investor C		1,000.00		1,001.60		11.65		1,000.00		1,013.56		11.72		2.31
Class K		1,000.00		1,007.10		6.37		1,000.00		1,018.85		6.41		1.26

^(a)  For each class of the Fund, expenses are equal to the annualized net expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365.

^(b)  Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

See “Disclosure of Expenses” on Page 13 for further information on how expenses were calculated.

FUND SUMMARY 5

Fund Summary  as of December 31, 2018 (continued) BlackRock Emerging Markets Equity Strategies Fund

Portfolio Information

GEOGRAPHICAL ALLOCATION

	Percent of Total Investments (a)
Country	Long			Short			Total
China		11	%		1	%		12	%
United States		7			4			11
Hong Kong		10			—			10
South Korea		7			1			8
Russia		6			1			7
Taiwan		5			—			5
Poland		5			—			5
United Arab Emirates		2			3			5
United Kingdom		2			3			5
Brazil		4			0			4
Mexico		3			—			3
Argentina		3			—			3
India		3			—			3
Malaysia		3			—			3
Greece		3			—			3
Israel		2			—			2
Indonesia		2			—			2
Thailand		2			—			2
Philippines		—			2			2
Qatar		—			2			2
South Africa		1			—			1
Canada		1			—			1
Turkey		—			1			1
		82	%		18	%		100	%

^(a)  Total investments include the gross notional values of long and short positions of the underlying derivative contracts utilized by the Fund and exclude short-term securities.

INDUSTRY

	Percentage of Total investments (a)
Industry	Long			Short			Total
Banks		17	%		4	%		21	%
Insurance		6			1			7
Technology Hardware, Storage & Peripherals		6			—			6
Metals & Mining		5			2			7
Diversified Telecommunication Services		4			—			4
Hotels, Restaurants & Leisure		4			2			6
Oil, Gas & Consumable Fuels		4			2			6
Real Estate Management & Development		4			1			5
Wireless Telecommunication Services		4			1			5
Automobiles		3			1			4
Airlines		2			1			3
Construction Materials		2			—			2
Food & Staples Retailing		2			—			2
Household Durables		2			—			2
Pharmaceuticals		2			1			3
Semiconductors & Semiconductor Equipment		2			—			2
Biotechnology		1			—			1
Chemicals		1			—			1
Construction & Engineering		1			—			1
Electronic Equipment, Instruments & Components		1			—			1
Energy Equipment & Services		1			—			1
Independent Power and Renewable Electricity Producers		1			—			1
Internet & Direct Marketing Retail		1			—			1
Marine		1			—			1
Independent Power and Renewable Electricity procedure		1			—			1
Health Care Equipment & Supplies		—			2			2
Other(b)		4			—			4
		82	%		18	%		100	%

^(b)  Consists of other industries held that were each less than 4% of total investments (4% long).

6 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Fund Summary  as of December 31, 2018 iShares Short-Term TIPS Bond Index Fund

Investment Objective

iShares Short-Term TIPS Bond Index Fund’s (the “Fund”) investment objective is to seek to track the investment results of an index composed of U.S. 0-5 Year Treasury Inflation-Protected Securities.

Portfolio Management Commentary

How did the Fund perform?

For the12-month period ended December 31, 2018, the Fund’s Institutional, Investor A and Class K Shares returned 0.56%, 0.22% and 0.60%, respectively. For the same period, the Fund’s benchmark, the Bloomberg Barclays U.S. Treasury Inflation-Protected Securities (TIPS) 0 - 5 Years Index (series L) (the “Underlying Index”) returned 0.59%.

Describe the market environment.

Prices for Treasury Inflation-Protected Securities (“TIPS”) are influenced by changes in inflation expectations as well as the direction of nominal Treasury yields.

Despite an uptick in inflation expectations on the back of unexpectedly strong January employment data, TIPS returns were in negative territory for the first quarter of 2018. A move higher in nominal Treasury yields more than offset a rise in TIPS breakeven rates (the rate of inflation required for a TIPS investor to match the return on a nominal Treasury of comparable maturity).

In June, the Fed raised the target range for its benchmark overnight lending rate by 25 basis points (0.25%), from 1.75% to 2%, in line with expectations. On the back of firm domestic growth and continued improvements in the labor market, the Fed signaled for an increase in the number of expected rate hikes in 2018 from three to four. TIPS returns were positive in the second quarter as the upward move in Treasury yields eased and inflation appeared to be moving toward the Fed’s 2% target.

TIPS were in negative territory for the third quarter of 2018. Nominal Treasury yields rose late in the quarter on firming economic data. In September, the Fed raised interest rates with policymakers removing the reference to “accommodative” monetary policy in their statement. Geopolitical risks weighed on market sentiment, asU.S.-China trade relations deteriorated. August core inflation registered a year-over-year decline, driven by volatile components including apparel and pharmaceutical prices.

While nominal yields as gauged by the10-year Treasury declined in the fourth quarter, TIPS returns were again negative as declining energy prices led breakevens lower. Politics dominated the second half of the quarter as the U.S. government approached a shutdown and headlines whipsawed around intensified U.S.-China trade talks. Mixed guidance from the Fed did little to quell market volatility, despite December’s expected hike in fed funds to the 2.25% - 2.50% range. Both headline and core Consumer Price Index inflation printed at 2.2%year-on-year in November, as the headline rate moved lower on the back of declining energy prices and the core rate remained stable. (Headline inflation measures the difference in inflation by calculating prices of a basket of goods whereby core inflation does not include components such as food, energy and fuel.)

Describe recent portfolio activity.

During the period, the Fund maintained its objective of seeking to provide investment results that correspond to the total return performance of the Underlying Index by selecting securities in accordance with their relative proportion within the Underlying Index. Other factors considered in security selection included transaction costs and maturity.

Describe portfolio positioning at period end.

The Fund remains positioned to attempt to match the risk and return characteristics of the Underlying Index, irrespective of the future direction of inflation expectations.

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.

FUND SUMMARY 7

Fund Summary  as of December 31, 2018 (continued) iShares Short-Term TIPS Bond Index Fund

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a)  Commencement of operations.

^(b)  Assuming transaction costs and other operating expenses, including investment advisory fees, if any.

^(c)  The Fund generally invests at least 90% of its assets, plus the amount of any borrowing for investment purposes, in securities of the Underlying Index. From time to time when conditions warrant, however, the Fund may invest at least 80% of its assets in securities of the Underlying Index. The Fund may invest a portion of the remainder of its assets in securities not included in the Underlying Index, but which BlackRock Advisors, LLC believes will help the Fund track the Underlying Index.

^(d)  Bloomberg Barclays U.S. Treasury Inflation-Protected Securities (TIPS) 0-5 Years Index (Series L) measures the performance of the inflation-protected public obligations of the U.S. Treasury that have a remaining maturity of less than five years.

Performance Summary for the Period Ended December 31, 2018

				Average Annual Total Returns (a)
				1 Year			Since Inception (b)
	6-Month Total Returns			w/o sales charge			w/o sales charge
Institutional		(0.17	)%		0.56	%		1.36	%
Investor A		(0.30	)		0.22			1.10
Class K		(0.15	)		0.60			1.39
Bloomberg Barclays U.S. Treasury Inflation-Protected Securities (TIPS) 0-5 Years Index (Series-L)		(0.11	)		0.59			1.42

^(a)  Average annual total returns reflect reductions for distribution and service fees. See “About Fund Performance” on page 13 for a detailed description of share classes, including any related fees.

^(b)  The Fund commenced operations on February 16, 2016.

Past performance is not indicative of future results.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Expense Example

	Actual						Hypothetical (b)
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (a)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (a)		Annualized Expense Ratio
Institutional	$	1,000.00	$	998.30	$	0.45	$	1,000.00	$	1,024.75	$	0.46		0.09	%
Investor A		1,000.00		997.00		1.81		1,000.00		1,023.39		1.84		0.36
Class K		1,000.00		998.50		0.30		1,000.00		1,024.90		0.31		0.06

^(a)  For each class of the Fund, expenses are equal to the annualized net expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365.

^(b)  Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

See “Disclosure of Expenses” on Page 13 for further information on how expenses were calculated.

8 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Fund Summary  as of December 31, 2018 (continued) iShares Short-Term TIPS Bond Index Fund

Portfolio Information

ALLOCATION BY MATURITY

Period	Percent of Total Investments (a)
0-1 Year		15	%
1-2 Years		18
2-3 Years		21
3-4 Years		24
4-5 Years		22

^(a)  Excludes short-term securities.

FIVE LARGEST FUND HOLDINGS

Holding	Percent of Total Investments (a)
U.S. Treasury Inflation Protected Securities, 0.13%, 4/15/19		13	%
U.S. Treasury Inflation Protected Securities, 0.13%, 4/15/20		12
U.S. Treasury Inflation Protected Securities, 0.13%, 4/15/21		10
U.S. Treasury Inflation Protected Securities, 0.13%, 4/15/22		10
U.S. Treasury Inflation Protected Securities, 0.38%, 7/15/23		10

FUND SUMMARY 9

Fund Summary  as of December 31, 2018 BlackRock Alternative Capital Strategies Fund

Investment Objective

BlackRock Alternative Capital Strategies Fund’s (the “Fund”) investment objective is to seek total return comprised of current income and capital appreciation.

On November 28, 2018, the Board of BlackRock Funds IV approved a proposal to change the name of BlackRock Alternative Capital Strategies Fund to BlackRock Systematic Multi-Strategy Fund. This change is effective January 4, 2019.

Portfolio Management Commentary

How did the Fund perform?

For the12-month period ended December 31, 2018, the Fund outperformed the Bloomberg Barclays U.S. Aggregate Bond Index and underperformed the ICE BofAML3-Month U.S. Treasury Bill Index.

Fund Strategies

Core allocation across fixed-income and equity markets to balance interest rate and credit exposures. Strategies in the core portfolio may include mortgages, duration and curve, investment grade corporates, emerging markets, securitized credit, dividend equities and high yield.

Long/short alpha strategies seek equity securities and equity derivatives, primarily total return swaps, within a global opportunity set. These strategies seek to identify opportunities through a systematic approach by evaluating predicted returns relative to risk for each security. These strategies seek to provide an uncorrelated source of defensive returns.

Long/short macro strategies seek to capture returns through tactical trades to fixed income and equity markets.These strategies seek to tactically allocate and time directional exposures across several asset classes, such as credit default swaps, U.S. Treasures, U.K. Gilts and index futures.

What factors influenced performance?

The defensive equity long/short strategy was the primary contributor to the Fund’s relative performance, while the macro strategy also contributed positively over the period. Within the defensive equity long/short strategy, security selection with consumer staples was the most notable driver of performance, particularly among short positions within the food products industry group. The strategy’s consistent focus on credit information provided downside protection for the overall portfolio when markets fell, especially during the final quarter of the period. The macro strategy benefited from disparities in relative valuation across countries, prompting short positions in the United States and Canada paired with long positions in Australia and Europe. Widening divergences in monetary policy and growth expectations across global markets improved prospects for the strategy during the period.

The directional asset allocation strategy detracted from the Fund’s performance during the period. The primary drivers of the strategy’s underperformance were allocations to dividend equity securities, which underperformed during the equity market’s aggressive selloff late in the period. Corporate credit also weighed on performance, as credit spreads, particularly in the high-yield arena, widened. The strategy’s duration (sensitivity to interest rate movements) exposure element partially offset its overall underperformance, however, as falling U.S. yields late in the period provided additional ballast during the market downturn.

The Fund held derivatives during the period as a part of its investment strategy. Derivatives are used by the portfolio management team as a means to manage and/or take outright views on interest rates, credit risk and/or foreign exchange positions in the Fund. Stand-alone performance impact from derivatives used to hedge can be taken out of context, and may not necessarily portray the total performance impact of the position. The use of U.S. Treasury futures, currency forwards, options and swaps had a positive impact on performance for the period.

Describe recent portfolio activity.

The Fund applied its systematic investment approach, which combines asset allocation, defensive long/short alpha and macro strategies across diversified asset classes. The Fund seeks to provide diversified alpha sources for balanced, consistent returns over time through various market conditions.

The Fund’s strategies performed as anticipated, with uncorrelated, defensive returns from the defensive equity long/short strategy more than offsetting losses in the directional asset allocation strategy. Within the directional asset allocation strategy, the Fund diversified its duration exposure during the period, which enhanced relative performance.

The Fund continued to use leveraged strategies, which involve holding cash in order to back investments into-be-announced mortgage derivative securities. Despite having a reported cash position exceeding 5%, the Fund’s investable cash position is negative due to unsettled forward transactions on derivatives, which had a positive impact on performance during the period.

Describe portfolio positioning at period end.

At period end, the Fund continued to target 50% risk contribution from the directional asset allocation strategy and 50% risk contribution total from the macro and defensive equity long/short strategies.

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.

10 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Fund Summary  as of December 31, 2018 (continued) BlackRock Alternative Capital Strategies Fund

TOTAL RETURN BASED ON A $10,000 INVESTMENT

^(a)  Commencement of operations.

^(b)  Assuming maximum sales charges, if any, transaction costs and other operating expenses, including investment advisory fees. Institutional Shares do not have a sales charge.

^(c)  The Fund invests in a range of global asset classes, with a focus on fixed and floating rate debt securities and equity securities.

^(d)  ICE BofAML 3-Month U.S. Treasury Bill Index is an unmanaged index that tracks 3-month U.S. Treasury securities. Bloomberg Barclays U.S. Aggregate Bond Index is a widely recognized unmanaged market-weighted index, comprised of investment-grade corporate bonds rated BBB or better, mortgages and U.S. Treasury and U.S. Government agency issues with at least one year to maturity.

On September 17, 2018, the Fund acquired all of the assets, subject to the liabilities, of BlackRock Alternative Capital Strategies Fund (the “Predecessor Fund”), a series of BlackRock Funds IV, through a tax-free reorganization (the “Board Reorganization”). The Predecessor Fund is the performance and accounting survivor of the Board Reorganization.

Performance Summary for the Period Ended December 31, 2018

				Average Annual Total Returns (a)
				1 Year						Since Inception (b)
	6-Month Total Returns			w/o sales charge			w/sales charge			w/o sales charge			w/sales charge
Institutional		2.58	%		1.74	%		N/A			3.77	%		N/A
Investor A		2.42			1.41			(2.65	)%		3.51			2.35	%
Investor C		1.94			0.65			(0.28	)		2.71			2.71
ICE BofAML 3-Month U.S. Treasury Bill Index		1.06			1.87			N/A			0.86			N/A
Bloomberg Barclays U.S. Aggregate Bond Index		1.65			0.01			N/A			1.77			N/A

^(a)  Assuming maximum sales charges, if any. Average annual total returns with and without sales charges reflect reductions for distribution and service fees. See “About Fund Performance” on page 13 for a detailed description of share classes, including any related sales charges and fees.

^(b)  The Fund commenced operations on May 19, 2015.

N/A — Not applicable as share class and index do not have a sales charge.

Past performance is not indicative of future results.

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

On September 17, 2018, the Fund acquired all of the assets, subject to the liabilities, of BlackRock Alternative Capital Strategies Fund (the “Predecessor Fund”), a series of BlackRock Funds IV, through a tax-free reorganization (the “Board Reorganization”). The Predecessor Fund is the performance and accounting survivor of the Board Reorganization.

Expense Example

	Actual						Hypothetical (b)
	Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (a)		Beginning Account Value (07/01/18)		Ending Account Value (12/31/18)		Expenses Paid During the Period (a)		Annualized Expense Ratio
Institutional	$	1,000.00	$	1,025.80	$	4.85	$	1,000.00	$	1,020.42	$	4.84		0.95	%
Investor A		1,000.00		1,024.20		6.12		1,000.00		1,019.16		6.11		1.20
Investor C		1,000.00		1,019.40		9.93		1,000.00		1,015.38		9.91		1.95

^(a)  For each class of the Fund, expenses are equal to the annualized net expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365.

^(b)  Hypothetical 5% annual return before expenses is calculated by prorating the number of days in the most recent fiscal half year divided by 365.

See “Disclosure of Expenses” on Page 13 for further information on how expenses were calculated.

FUND SUMMARY 11

Fund Summary  as of December 31, 2018 (continued) BlackRock Alternative Capital Strategies Fund

Portfolio Information

PORTFOLIO COMPOSITION

Asset Type	Percent of Net Assets (a)
Corporate Bonds		46	%
U.S. Government Sponsored Agency Securities		36
Asset-Backed Securities		15
Short-Term Securities		14
Common Stocks		9
Non-Agency Mortgage-Backed Securities		1
TBA Sale Commitments		—	(b)
Liabilities in Excess of Other Assets		(21	)

^(a)  Does not include underlying investment in total return swaps.

^(b)  Represents less than 1% of the Fund’s net assets.

INDUSTRY

	Percentage of Total Investments (c)
Industry	Long			Short			Total
Oil, Gas & Consumable Fuels		4	%		2	%		6	%
Media		3			1			4
Health Care Providers & Services		2			2			4
Equity Real Estate Investment Trusts (REITs)		2			1			3
Insurance		2			1			3
Hotels, Restaurants & Leisure		2			1			3
Food Products		1			2			3
Diversified Financial Services		2			—			2
Pharmaceuticals		2			—			2
Electric Utilities		2			—			2
Chemicals		1			1			2
Metals & Mining		2			—			2
Semiconductors & Semiconductor Equipment		1			1			2
Specialty Retail		1			—			1
Aerospace & Defense		1			1			2
Health Care Equipment & Supplies		1			1			2
Multi-Utilities		1			1			2
Household Durables		1			1			2
Consumer Finance		1			—			1
Other(d)		43			9			52
		75	%		25	%		100	%

^(c)  Total investments include the gross notional values of long and short positions of the underlying derivative contracts utilized by the Fund and exclude short-term securities and TBA sale commitments.

^(d)  Consist of Asset-Backed Securities (7%), Non-Agency Mortgaged-Backed Securities (1%) and U.S. Government Sponsored Agency Obligations (16%) with the remainder consisting of other industries held that were each 2% of investments (19% long and 9% short).

12 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

About Fund Performance

On September 17, 2018, the Fund acquired all of the assets, subject to the liabilities, of BlackRock Alternative Capital Strategies Fund (the “Predecessor Fund”), a series of BlackRock Funds IV, through a tax-free reorganization (the “Board Reorganization”). The Predecessor Fund is the performance and accounting survivor of the Board Reorganization.

Institutional Shares are not subject to any sales charge. These shares bear no ongoing distribution or service fees and are available only to certain eligible investors.

Investor A Shares are subject to a maximum initial sales charge (front-end load) of 4.00% for BlackRock Alternative Capital Strategies Fund and 5.25% for BlackRock Emerging Markets Equity Strategies Fund, as well as a service fee of 0.25% per year (but no distribution fee). With respect to BlackRock Alternative Capital Strategies Fund and BlackRock Emerging Markets Equity Strategies Fund, 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. For iShares Short-Term TIPS Bond Index Fund, Investor A Shares are not subject to any sales charge and bear no ongoing distribution fee. These shares are subject to an ongoing service fee of 0.25% per year. These shares are generally available through financial intermediaries.

Investor C Shares (available only in BlackRock Alternative Capital Strategies Fund and BlackRock Emerging Markets Equity Strategies Fund) are subject to a 1.00% CDSC if redeemed within one year of purchase. In addition, these shares are subject to a distribution fee of 0.75% per year and a service fee of 0.25% per year. These shares are generally available through financial intermediaries. Effective November 8, 2018, BlackRock Alternative Capital Strategies Fund and BlackRock Emerging Markets Equity Strategies Fund adopted an automatic conversion feature whereby Investor C Shares held for approximately ten years will be automatically converted into Investor A Shares and, thereafter, investors will be subject to lower ongoing fees.

Class K Shares (available only in BlackRock Emerging Markets Equity Strategies Fund and iShares Short-Term TIPS Bond Index Fund) are not subject to any sales charge. These shares bear no ongoing distribution or service fees and are available only to certain eligible investors.

Performance information reflects past performance and does not guarantee future results. Current performance may be lower or higher than the performance data quoted. Refer towww.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 table on the previous pages assume reinvestment of all distributions, if any, at net asset value (“NAV”) on the ex-dividend/payable date. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Distributions paid to each class of shares will vary because of the different levels of service, distribution and transfer agency fees applicable to each class, which are deducted from the income available to be paid to shareholders.

BlackRock Advisors, LLC (the “Manager”), each Fund’s investment adviser, has contractually agreed to waive and/or reimburse a portion of the Funds’ expenses. Without such waiver and/or reimbursement, the Funds’ performance would have been lower. The Manager is under no obligation to continue waiving and/or reimbursing its fees after the applicable termination date of such agreement. See Note 6 of the Notes to Financial Statements for additional information on waivers and/or reimbursements.

Disclosure of Expenses

Shareholders of the Funds may incur the following charges: (a) transactional expenses, such as sales charges; and (b) operating expenses, including investment advisory fees, service and distribution fees, including 12b-1 fees, acquired fund fees and expenses, and other fund expenses. The expense examples on the previous pages (which are based on a hypothetical investment of $1,000 invested on July 1, 2018 and held through December 31, 2018) are intended to assist shareholders both in calculating expenses based on an investment in each Fund and in comparing these expenses with similar costs of investing in other mutual funds.

The expense examples provide information about actual account values and actual expenses. In order to estimate the expenses a shareholder paid during the period covered by this report, shareholders can divide their account value by $1,000 and then multiply the result by the number corresponding to their Fund and share class under the heading entitled “Expenses Paid During the Period.”

The expense examples also provide information about hypothetical account values and hypothetical expenses based on a Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. In order to assist shareholders in comparing the ongoing expenses of investing in these Funds and other funds, compare the 5% hypothetical examples with the 5% hypothetical examples that appear in shareholder reports of other funds.

The expenses shown in the expense examples are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as sales charges, if any. Therefore, the hypothetical examples are useful in comparing ongoing expenses only, and will not help shareholders determine the relative total expenses of owning different funds. If these transactional expenses were included, shareholder expenses would have been higher.

Derivative Financial Instruments

The Funds may invest in various derivative financial instruments. These instruments are used to obtain exposure to a security, commodity, index, market, and/or other assets without owning or taking physical custody of securities, commodities and/or other referenced assets or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage and involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the instrument. The Funds’ successful use of a derivative financial instrument depends on the investment adviser’s ability to predict pertinent market movements accurately, which cannot be assured. The use of these instruments may result in losses greater than if they had not been used, may limit the amount of appreciation a Fund can realize on an investment and/or may result in lower distributions paid to shareholders. The Funds’ investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.

ABOUT FUND PERFORMANCE / DISCLOSUREOF EXPENSES / DERIVATIVE FINANCIAL INSTRUMENTS 13

Schedule of Investments December 31, 2018 BlackRock Emerging Markets Equity Strategies Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Common Stocks— 87.1%
Argentina— 4.9%
Banco Macro SA — ADR		5,924	$	261,959
Grupo Financiero Galicia SA — ADR		9,001		248,158
YPF SA — ADR		12,460		166,839
				676,956
Brazil— 3.9%
BB Seguridade Participacoes SA		40,226		286,354
LOG Commercial Properties e Participacoes SA(a)		575		2,674
MRV Engenharia e Participacoes SA		10,464		33,370
Ultrapar Participacoes SA		15,491		212,635
				535,033
Canada— 0.8%
Eldorado Gold Corp.(a)		39,791		116,587
China— 14.5%
3SBio, Inc.(b)		230,000		294,037
Bank of China Ltd., Class H		580,000		250,039
China Eastern Airlines Corp. Ltd., Class H		314,000		174,169
China Overseas Land & Investment Ltd.		96,000		330,990
China Pacific Insurance Group Co. Ltd., Class H		19,200		62,044
China Unicom Hong Kong Ltd.		234,000		249,305
Ctrip.com International Ltd. — ADR(a)		1,653		44,730
Industrial & Commercial Bank of China Ltd., Class H		389,000		276,680
PetroChina Co. Ltd., ADR		3,684		226,750
Skyworth Digital Holdings Ltd.		487,369		105,136
				2,013,880
Greece— 3.8%
Alpha Bank AE(a)		145,315		182,785
National Bank of Greece SA(a)		275,206		346,350
				529,135
Hong Kong— 11.2%
Cathay Pacific Airways Ltd.		171,000		243,335
China Mobile Ltd.		48,500		469,315
China Resources Power Holdings Co. Ltd.		164,000		315,443
MMG Ltd.(a)		544,000		233,704
SJM Holdings Ltd.		305,000		283,379
				1,545,176
India— 4.7%
Dr. Reddy’s Laboratories Ltd. — ADR		9,312		351,062
Larsen & Toubro Ltd. — GDR		14,284		292,025
				643,087
Indonesia— 3.3%
Astra International Tbk PT		604,600		346,370
Semen Indonesia Persero Tbk PT		144,900		115,859
				462,229
Israel— 1.6%
Israel Chemicals Ltd.		37,755		214,678
Malaysia— 3.5%
Sapura Energy Bhd(a)		1,698,700		118,676
Telekom Malaysia Bhd		569,400		367,171
				485,847
Mexico— 2.5%
Grupo Financiero Banorte SAB de CV, Series O		71,005		346,069
Poland— 4.4%
Alior Bank SA(a)		25,693		365,810
KGHM Polska Miedz SA(a)		9,979		236,744
				602,554
Russia— 8.3%
Gazprom PJSC — ADR		23,186		102,652
Magnit PJSC		4,565		229,555

Security	Shares		Value
Russia (continued)
Sberbank of Russia PJSC — ADR		52,248	$	572,176
VTB Bank PJSC		246,545,860		119,754
VTB Bank PJSC — GDR		117,616		130,732
				1,154,869
South Africa— 1.6%
Old Mutual Ltd.		145,944		220,829
South Korea— 9.5%
Hyundai Motor Co.		2,477		262,959
Hyundai Motor Co., — GDR		2		64
Pan Ocean Co. Ltd.(a)		49,095		196,021
Samsung Electronics Co. Ltd.		16,450		572,652
Shinhan Financial Group Co. Ltd.		7,967		282,479
				1,314,175
Taiwan— 4.3%
FLEXium Interconnect, Inc.		14,000		33,969
MediaTek, Inc.		26,000		193,505
Merry Electronics Co. Ltd.		16,000		63,879
Nanya Technology Corp.		171,000		306,229
				597,582
Ukraine— 0.7%
Ferrexpo PLC		40,996		101,711
United Arab Emirates— 3.6%
Emaar Properties PJSC		443,796		498,927
Total Common Stocks— 87.1% (Cost— $12,993,380)				12,059,324
Investment Companies— 2.1%
iShares MSCI South Korea ETF(d)		5,061		297,890
Total Investment Companies— 2.1% (Cost— $376,097)				297,890
Preferred Stock
Automobiles— 0.9%
Hyundai Motor Co., Preference Shares, 0.00%		1,985		124,949
Total Preferred Stocks— 0.9% (Cost— $182,122)				124,949
Rights— 0.0%
Malaysia— 0.0%
Sapura Energy Bhd (Expires 01/16/19)(a)		3,605,920		9
Total Rights— 0.0% (Cost— $0)				9
Total Long-Term Investments— 90.1% (Cost— $13,551,599)				12,482,172
Short-Term Securities— 3.4%
BlackRock Liquidity Funds,T-Fund, Institutional Class, 2.32%(c)(d)		471,061		471,061
Total Short-Term Securities— 3.4% (Cost— $471,061)				471,061
Total Investments— 93.5% (Cost— $14,022,660)				12,953,233
Other Assets Less Liabilities— 6.5%				895,233
Net Assets— 100.0%			$	13,848,466

14 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Emerging Markets Equity Strategies Fund

^(a)  Non-income producing security.

^(b)  Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

^(c)  Annualized7-day yield as of period end.

^(d)  During the year ended December 31, 2018, investments in issuers considered to be affiliates of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, and/or related parties of the Fund were as follows:

Affiliate Persons and/or Related Parties	Shares Held at 12/31/17		Shares Purchased		Shares Sold			Shares Held at 12/31/18		Value at 12/31/18		Income		Net Realized Gain (Loss) (a)			Change in Unrealized Appreciation (Depreciation)
BlackRock Liquidity Funds,T-Fund, Institutional Class		3,283,441		—		(2,812,380	)(b)		471,061	$	471,061	$	20,519	$	—		$	—
iShares MSCI South Korea ETF		—		28,346		(23,285	)		5,061		297,890		4,649		(29,989	)		(78,207	)
										$	768,951	$	25,168	$	(29,989	)	$	(78,207	)

^(a)  Includes net capital gain distributions, if applicable.

^(b)  Represents net shares sold.

Derivative Financial Instruments Outstanding as of Period End

OTC Total Return Swaps ^(a)

Reference Entity	Counterparty	Expiration Date		Net Notional Amount			Unrealized Appreciation (Depreciation)			Net Value of Reference Entities			Gross Notional Amount Net Asset Percentage
Equity Securities Long/Short:	Credit Suisse International		11/04/19 - 02/08/23	$	784,428		$	55,968	(b)	$	829,693			19.9	%
	Deutsche Bank AG		02/17/23 - 02/20/23		(844,354	)		(5,097	)(c)		(844,364	)		6.4
	HSBC Bank PLC		02/10/23 - 02/13/23		988,584			(146,646	)(d)		843,743			35.9
				$	928,658		$	(95,775	)	$	829,072

^(a)  In regards to total return swaps with multiple financing rate benchmarks, the Fund receives or pays the total return on a portfolio of long and short positions underlying the total return swap. In addition, the Fund pays or receives a variable rate of interest, based on a specified benchmark, plus or minus a spread in a range of15-850 basis points. The benchmark and spread are determined based upon the country and/or currency of the individual underlying positions. The following are the specified benchmarks used in determining the variable rate of interest:

ICE LIBOR USD 1 Month

ICE LIBOR USD 1 Week

United States Overnight Bank Funding Rate

^(b)  Amount includes $10,703 of net dividends and financing fees.

^(c)  Amount includes $(5,087) of net dividends and financing fees.

^(d)  Amount includes $(1,805) of net dividends and financing fees.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 15

Schedule of Investments  (continued) December 31, 2018 BlackRock Emerging Markets Equity Strategies Fund

The following table represents the individual long and short positions and related values of the equity securities underlying the total return swap with Credit Suisse International as of December 31, 2018 expiration date 11/04/19 — 02/08/23:

	Shares			Value			% of Basket Value
Reference Entity — Long
Brazil
LOG Commercial Properties e Participacoes SA		6,319		$	29,380			3.5	%
MRV Engenharia e Participacoes SA		96,635			308,175			37.2
					337,555
China
SJM Holdings Ltd.		173,000			160,736			19.4
Greece
Alpha Bank AE		20,934			26,332			3.2
Hong Kong
China Unicom Hong Kong Ltd		102,000			108,671			13.1
Merry Electronics Co. Ltd.		2,000			7,985			0.9
					116,656
Mexico
Cemex S.A.B. de CV		78,450			378,129			45.6
South Africa
Old Mutual Ltd		28,884			44,878			5.4
South Korea
Samsung Electronics Co Ltd		3,767			131,136			15.8
Taiwan
Flexium Interconnect, Inc.		95,000			230,506			27.8
Thailand
Thai Beverage PCL		681,300			305,414			36.8
United Kingdom
Ferrexpo PLC		38,994			96,744			11.6
Total Reference Entity — Long					1,828,086
Reference Entity — Short
Philippines
BDO Unibank, Inc.		(65,431	)		(162,723	)		(19.6	)
South Korea
Celltrion Inc.		(1,105	)		(221,982	)		(26.7	)
Turkey
BIM Birlesik Magazalar AS		(18,142	)		(298,209	)		(35.9	)
United Arab Emirates
IHH Healthcare Bhd		(4,900	)		(6,379	)		(0.8	)
United Kingdom
MMC Norilsk Nickel PJSC		(5,735	)		(107,621	)		(13.0	)
Reliance Industries Ltd		(6,331	)		(201,479	)		(24.3	)
					(309,100	)
Total Reference Entity — Short					(998,393	)
Net Value of Reference Entity — Credit Suisse International				$	829,693

The following table represents the individual long and short positions and related values of the equity securities underlying the total return swap with Deutsche Bank AG as of December 31, 2018 expiration dates 02/17/23 — 02/20/23:

	Shares			Value			% of Basket Value
Reference Entity — Long
United Arab Emirates
Emaar Properties PJSC		16,765		$	18,848			(2.2	)%
Total Reference Entity — Long					18,848
Reference Entity — Short
Russia
Alrosa PJSC		(211,712	)		(298,223	)		35.3
United Arab Emirates
Airports of Thailand PCL		(138,200	)		(272,707	)		32.3
IHH Healthcare Bhd		(224,500	)		(292,282	)		34.6
					(564,989	)
Total Reference Entity — Short					(863,211	)
Net Value of Reference Entity — Deutsche Bank AG				$	(844,364	)

The following table represents the individual long and short positions and related values of the equity securities underlying the total return swap with HSBC Bank PLC as of December 31, 2018 expiration date 02/10/23 — 02/13/23:

	Shares		Value		% of Basket Value
Reference Entity — Long
China
Bank of China Ltd.		400,000	$	172,441		20.4	%
Greece
National Bank Of Greece		10,811		13,606		1.6
Hong Kong
China Pacific Insurance Co. Ltd.		85,200		275,321		32.7
Merry Electronics Co. Ltd.		33,000		131,750		15.6
				407,071
Israel
Bezeq		281,743		274,933		32.6
Malaysia
Sapura Energy Bhd. Right		357,720		1		0.0
Sapura Energy Bhd.		894,300		62,478		7.4
Telekom Malaysia Bhd		35,800		23,085		2.7
				85,564
Poland
KGHM Polska Miedz SA		3,081		73,094		8.7
PGE Polska Grupa Energetyczna SA		102,223		274,099		32.5
				347,193
Russia
Gazprom PAO		30,398		134,581		16.0
Magnit PJSC		1,864		93,733		11.1
				228,314
South Korea
Shinhan Financial Group Co. Ltd..		52		1,844		0.2

16 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Emerging Markets Equity Strategies Fund

	Shares			Value			% of Basket Value
Taiwan
Yageo Corp.		19,000		$	196,799			23.3	%
United Kingdom
Prudential PLC		16,982			303,238			35.9
United States
Alamos Gold Inc		76,486			275,349			32.6
Bilibili, Inc. — ADR		19,827			289,276			34.3
Ctrip.com International Ltd		10,127			274,037			32.5
					838,662
Total Reference Entity — Long					2,869,665
Reference Entity — Short
Brazil
Usinas Siderurgicas de Minas Gerais SA		(13,298	)		(31,635	)		(3.7	)
China
AIA Group Ltd.		(23,600	)		(196,041	)		(23.2	)
Philippines
Ayala Land, Inc.		(336,300	)		(259,934	)		(30.8	)

	Shares			Value			% of Basket Value
Philippines (continued)
BDO Unibank, Inc.		(14,470	)	$	(35,986	)		(4.3	) %
					(295,920	)
Qatar
Commercial Bank PQSC		(17,385	)		(187,619	)		(22.2	)
Qatar National Bank QPSC		(4,300	)		(229,174	)		(27.2	)
					(416,793	)
United Arab Emirates
IHH Healthcare Bhd		(9,600	)		(12,498	)		(1.5	)
United Kingdom
Novatek PJSC		(1,507	)		(257,493	)		(30.5	)
United States
ICICI Bank Ltd		(26,493	)		(272,613	)		(32.3	)
NIO, Inc. — ADR		(40,546	)		(258,278	)		(30.6	)
Pinduoduo — ADR		(12,685	)		(284,651	)		(33.8	)
					(815,542	)
Total Reference Entity — Short					(2,025,922	)
Net Value of Reference Entity — HSBC Bank PLC				$	843,743

Balances Reported in the Statements of Assets and Liabilities for OTC Derivatives

	Swap Premiums Paid		Swap Premiums Received		Unrealized Appreciation		Unrealized Depreciation
OTC Derivatives	$	—	$	—	$	55,968	$	(151,743	)

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
Swaps — OTC
Unrealized appreciation on OTC swaps; Swap premiums paid	$	—	$	—	$	55,968	$	—	$	—	$	—	$	55,968
Liabilities — Derivative Financial Instruments
Swaps — OTC
Unrealized depreciation on OTC swaps; Swap premiums received	$	—	$	—	$	151,743	$	—	$	—	$	—	$	151,743

For the period ended December 31, 2018, 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	$	—	$	—	$	41,212	$	—	$	—	$	—	$	41,212
Forward foreign currency exchange contracts		—		—		—		1,572		—		—		1,572
Swaps		—		—		2,561,089		—		—		—		2,561,089
	$	—	$	—	$	2,602,301	$	1,572	$	—	$	—	$	2,603,873
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts	$	—	$	—	$	8,244	$	—	$	—	$	—	$	8,244
Swaps		—		—		44,342		—		—		—		44,342
	$	—	$	—	$	52,586	$	—	$	—	$	—	$	52,586

SCHEDULES OF INVESTMENTS 17

Schedule of Investments  (continued) December 31, 2018 BlackRock Emerging Markets Equity Strategies Fund

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	—	(a)
Forward foreign currency exchange contracts:
Average amounts purchased — in USD	$	150,012
Average amounts sold — in USD	$	149,619
Total return swaps:
Average notional value	$	187,539

^(a)  Derivative not held atquarter-end. The risk expoure table serves as an indicator of activity during the period.

For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

Derivative Financial Instruments — Offsetting as of Period End

The Fund’s derivative assets and liabilities (by type) were as follows:

	Assets		Liabilities
Swaps — OTC(a)	$	55,968	$	151,743
Total derivative assets and liabilities in the Statements of Assets and Liabilities	$	55,968	$	151,743
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)		—		—
Total derivative assets and liabilities subject to an MNA	$	55,968	$	151,743

^(a)  Includes unrealized appreciation (depreciation) on OTC swaps and swap premiums (paid/received) in the Statements of Assets and Liabilities.

The following table presents the Fund’s derivative assets (and liabilities) by counterparty net of amounts available for offset under an MNA and net of the related collateral received (and pledged) by the Fund:

Counterparty	Derivative Assets Subject to an MNA by Counterparty		Derivatives Available for Offset		Non-cash Collateral Received		Cash Collateral Received		Net Amount of Derivative Assets  (a)
Credit Suisse International	$	55,968	$	—	$	—	$	—	$	55,968

Counterparty	Derivative Assets Subject to an MNA by Counterparty		Derivatives Available for Offset		Non-cash Collateral Received		Cash Collateral Received		Net Amount of Derivative Assets  (b)
Deutsche Bank AG	$	5,097	$	—	$	—	$	—	$	5,097
HSBC Bank PLC		146,646		—		—		—		146,646
	$	151,743	$	—	$	—	$	—	$	151,743

^(a)  Net amount represents the net amount receivable from the counterparty in the event of default.

^(b)  Net amount represents the net amount payable due to counterparty in the event of default.

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:

	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Common Stocks:
Argentina	$	676,956	$	—	$	—	$	676,956
Brazil		535,033		—		—		535,033
Canada		116,587		—		—		116,587
China		271,480		1,742,400		—		2,013,880
Greece		—		529,135		—		529,135

18 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Emerging Markets Equity Strategies Fund

Fair Value Hierarchy as of Period End (continued)

	Level 1		Level 2			Level 3		Total
Hong Kong	$	—	$	1,545,176		$	—	$	1,545,176
India		351,063		292,024			—		643,087
Indonesia		—		462,229			—		462,229
Israel		—		214,678			—		214,678
Malaysia		—		485,847			—		485,847
Mexico		346,069		—			—		346,069
Poland		—		602,554			—		602,554
Russia		—		1,154,869			—		1,154,869
South Africa		—		220,829			—		220,829
South Korea		64		1,314,111			—		1,314,175
Taiwan		—		597,582			—		597,582
Ukraine		—		101,711			—		101,711
United Arab Emirates		—		498,927			—		498,927
Investment Companies		297,890		—			—		297,890
Preferred Stock		—		124,949			—		124,949
Rights		—		9			—		9
Short-Term Securities		471,061		—			—		471,061
	$	3,066,203	$	9,887,030		$	—	$	12,953,233
Derivative Financial Instruments(a)
Assets:
Equity contracts	$	—	$	55,968		$	—	$	55,968
Liabilities:
Equity contracts		—		(151,743	)		—		(151,743	)
	$	—	$	(95,775	)	$	—	$	(95,775	)

^(a)  Derivative financial instruments are swaps. Swaps are valued at the unrealized appreciation (depreciation) on the instrument.

Transfers between Level 1 and Level 2 were as follows:

	Transfers into Level 1 (a)		Transfers out of Level 1 (a)			Transfers into Level 2 (a)		Transfers out of Level 2 (a)
Assets:
Investments:
Common Stocks:	$	—	$	(1,061,254	)	$	1,061,254	$	—

^(a)  External pricing service used to reflect any significant market movement between the time the Fund valued such foreign securities and the earlier closing of foreign markets.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 19

Schedule of Investments December 31, 2018 iShares Short-Term TIPS Bond Index Fund (Percentages shown are based on Net Assets)

Security	Par (000)		Value
U.S. Treasury Obligations — 98.3%
U.S. Treasury Inflation Protected Security:
0.13%, 04/15/19	$	436	$	429,479
1.88%, 07/15/19		44		43,560
1.38%, 01/15/20		36		36,020
0.13%, 04/15/20		392		383,284
1.25%, 07/15/20		177		177,050
1.13%, 01/15/21		130		129,575
0.13%, 04/15/21		341		331,696
0.63%, 07/15/21		230		227,501
0.13%, 01/15/22		263		255,517
0.13%, 04/15/22		327		316,660
0.13%, 07/15/22		194		187,986
0.13%, 01/15/23		277		267,716
0.63%, 04/15/23		139		136,158
0.38%, 07/15/23		319		312,371
Total Long-Term Investments — 98.3% (Cost — $3,278,105)				3,234,573

Security	Shares		Value
Short-Term Securities — 1.6%
BlackRock Cash Funds: Treasury, SL Agency Shares,
2.38%(a)(b)		51,079	$	51,079
Total Short-Term Securities — 1.6% (Cost — $51,079)				51,079
Total Investments — 99.9% (Cost — $3,329,184)				3,285,652
Other Assets Less Liabilities — 0.1%				4,497
Net Assets — 100.0%			$	3,290,149

^(a)  Annualized7-day yield as of period end.

^(b)  During the year ended December 31, 2018, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

Affiliate	Shares Held at 12/31/17		Net Activity			Shares Held at 12/31/18		Value at 12/31/18		Income		Net Realized Gain (Loss) (a)		Change in Unrealized Appreciation (Depreciation)
BlackRock Cash Funds: Treasury, SL Agency Shares		104,747		(53,668	)		51,079	$	51,079	$	1,187	$	—	$	—

^(a)  Includes net capital gain distributions, if applicable.

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments. For information about the Fund’s policy regarding valuation of investments, refer to the Notes to Financial Statements.

The following table summarizes the Fund’s investments categorized in the disclosure hierarchy:

	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Long-Term Investments:
U.S. Treasury Obligations	$	—	$	3,234,573	$	—	$	3,234,573
Short-Term Securities		51,079		—		—		51,079
	$	51,079	$	3,234,573	$	—	$	3,285,652

During the year ended December 31, 2018, there were no transfers between levels.

See notes to financial statements.

20 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments December 31, 2018 BlackRock Alternative Capital Strategies Fund (Percentages shown are based on Net Assets)

Security	Shares		Value
Common Stocks — 9.3%
Banks — 0.1%
U.S. Bancorp		699	$	31,944
Beverages — 0.1%
PepsiCo, Inc.		356		39,331
Biotechnology — 0.2%
AbbVie, Inc.		816		75,227
Commercial Services & Supplies — 0.1%
Republic Services, Inc.		661		47,652
Consumer Finance — 0.0%
Ally Financial, Inc.		720		16,315
Containers & Packaging — 0.1%
Sonoco Products Co.		397		21,093
Distributors — 0.1%
Genuine Parts Co.		457		43,881
Diversified Telecommunication Services — 0.4%
AT&T, Inc.		2,337		66,698
Verizon Communications, Inc.		1,188		66,789
				133,487
Electric Utilities — 1.7%
Alliant Energy Corp.		824		34,814
American Electric Power Co., Inc.		625		46,712
Avangrid, Inc.		1,456		72,931
Duke Energy Corp.		856		73,873
Evergy, Inc.		1,163		66,023
NextEra Energy, Inc.		109		18,946
Pinnacle West Capital Corp.		808		68,842
Portland General Electric Co.		1,528		70,059
PPL Corp.		758		21,474
Southern Co.		1,453		63,816
Xcel Energy, Inc.		1,359		66,958
				604,448
Equity Real Estate Investment Trusts (REITs) — 1.2%
Apple Hospitality REIT, Inc.		4,476		63,828
Empire State Realty Trust, Inc., Class A		4,621		65,757
EPR Properties		432		27,661
Lamar Advertising Co., Class A		308		21,307
Mid-America Apartment Communities, Inc.		246		23,542
Outfront Media, Inc.		1,072		19,425
Public Storage		205		41,494
Simon Property Group, Inc.		183		30,742
STORE Capital Corp.		1,676		47,448
WP Carey, Inc.		1,012		66,124
Xenia Hotels & Resorts, Inc.		1,285		22,102
				429,430
Food Products — 0.7%
Campbell Soup Co.		669		22,071
Flowers Foods, Inc.		1,924		35,536
General Mills, Inc.		1,445		56,268
Hershey Co.		461		49,410
J.M. Smucker Co.		329		30,758
Kellogg Co.		681		38,824
				232,867
Gas Utilities — 0.1%
Atmos Energy Corp.		193		17,895
Hotels, Restaurants & Leisure — 0.3%
Carnival Corp.		371		18,290
Cracker Barrel Old Country Store, Inc.		162		25,898

Security	Shares		Value
Hotels, Restaurants & Leisure (continued)
Darden Restaurants, Inc.		163	$	16,277
Six Flags Entertainment Corp.		654		36,382
				96,847
Household Durables — 0.1%
Garmin Ltd.		547		34,636
Household Products — 0.2%
Clorox Co.		188		28,978
Procter & Gamble Co.		602		55,336
				84,314
Insurance — 0.2%
Fidelity National Financial, Inc.		1,012		31,817
Marsh & McLennan Cos., Inc.		317		25,281
				57,098
IT Services — 0.4%
International Business Machines Corp.		259		29,441
Paychex, Inc.		842		54,856
Sabre Corp.		3,300		71,412
				155,709
Media — 0.4%
Cinemark Holdings, Inc.		511		18,294
Omnicom Group, Inc.		870		63,719
Tribune Media Co., Class A		1,507		68,387
				150,400
Metals & Mining — 0.1%
Southern Copper Corp.		717		22,062
Multi-Utilities — 1.3%
Ameren Corp.		831		54,206
CMS Energy Corp.		1,073		53,274
Consolidated Edison, Inc.		935		71,490
Dominion Energy, Inc.		794		56,739
DTE Energy Co.		569		62,761
NiSource, Inc.		2,951		74,808
NorthWestern Corp.		312		18,545
WEC Energy Group, Inc.		1,148		79,511
				471,334
Oil, Gas & Consumable Fuels — 0.9%
Enterprise Products Partners LP		1,142		28,082
EQT Midstream Partners LP		1,575		68,119
Magellan Midstream Partners LP		1,206		68,815
MPLX LP		2,201		66,690
ONEOK, Inc.		939		50,659
Shell Midstream Partners LP		2,286		37,513
				319,878
Pharmaceuticals — 0.3%
Johnson & Johnson		193		24,907
Pfizer, Inc.		2,213		96,597
				121,504
Tobacco — 0.3%
Altria Group, Inc.		1,328		65,590
Philip Morris International, Inc.		883		58,949
				124,539
Total Common Stocks — 9.3% (Cost — $3,416,069)				3,331,891

SCHEDULES OF INVESTMENTS 21

Schedule of Investments  (continued) December 31, 2018 BlackRock Alternative Capital Strategies Fund (Percentages shown are based on Net Assets)

Security	Par (000)		Value
Asset-Backed Securities — 14.8%
AmeriCredit Automobile Receivables Trust, Class D:
Series2014-4, 3.07%, 11/09/20	$	100	$	99,970
Series2017-3, 3.18%, 07/18/23		150		148,617
Avant Loans Funding Trust, Series2018-A(a):
Class A, 3.09%, 06/15/21		74		74,293
Class B, 3.95%, 12/15/22		150		150,085
CLUB Credit Trust, Class A(a):
Series2017-P2, 2.61%, 01/15/24		64		63,164
Series2018-NP1, 2.99%, 05/15/24		14		13,931
Conn’s Receivables Funding LLC, Series2018-A, Class A, 3.25%, 01/15/23(a)		53		52,622
Consumer Loan Underlying Bond Credit Trust, Class A(a):
Series2017-NP2, 2.55%, 01/16/24		1		1,110
Series2018-P1, 3.39%, 07/15/25		84		83,610
Series2018-P2, 3.47%, 10/15/25		89		89,004
Drive Auto Receivables Trust:
Series2016-BA, Class C, 3.19%, 07/15/22(a)		94		93,890
Series2017-1, Class B, 2.36%, 03/15/21		17		16,575
Series2017-1, Class D, 3.84%, 03/15/23		150		150,538
Series2017-2, Class B, 2.25%, 06/15/21		9		8,598
Series2017-2, Class D, 3.49%, 09/15/23		100		100,330
Series2017-3, Class B, 2.30%, 05/17/21		90		89,637
Series2017-3, Class C, 2.80%, 07/15/22		100		99,745
Series2017-3, Class D, 3.53%, 12/15/23(a)		100		100,080
Series2017-BA, Class D, 3.72%, 10/17/22(a)		150		150,285
Series2018-1, Class C, 3.22%, 03/15/23		110		109,777
Series2018-2, Class B, 3.22%, 04/15/22		100		99,895
Series2018-2, Class D, 4.14%, 08/15/24		225		226,816
Series2018-3, Class B, 3.37%, 09/15/22		60		60,031
Enva LLC, Series2018-A, Class A, 4.20%, 05/20/26(a)		213		213,273
Exeter Automobile Receivables Trust(a):
Series2015-1A, Class C, 4.10%, 12/15/20		19		19,389
Series2017-2A, Class A, 2.11%, 06/15/21		13		12,621
Series2018-4A, Class B, 3.64%, 11/15/22		90		89,979
Flagship Credit Auto Trust, Series2016-4, Class B, 2.41%, 10/15/21(a)		60		59,605
Marlette Funding Trust, Class A(a):
Series2017-1A, 2.83%, 03/15/24		9		8,779
Series2017-2A, 2.39%, 07/15/24		12		12,173
Series2018-3A, 3.20%, 09/15/28		75		74,984
Series2018-4A, 3.71%, 12/15/28		195		195,476
National Collegiate Student Loan Trust, Series2006-2, Class A3, (1 mo. LIBOR US + 0.21%), 2.72%, 11/25/27(b)		1		1,253
OneMain Financial Issuance Trust, Class A(a):
Series2015-1A, 3.19%, 03/18/26		19		19,423
Series2016-2A, 4.10%, 03/20/28		39		38,740
Prosper Marketplace Issuance Trust, Class A(a):
Series2018-1A, 3.11%, 06/17/24		44		44,216
Series2018-2A, 3.35%, 10/15/24		84		84,254
Residential Asset Mortgage Trust, Series 2005-EFC4, Class M2, (1 mo. LIBOR US + 0.44%), 2.95%, 09/25/35(b)		4		3,948
Santander Drive Auto Receivables Trust:
Series2014-4, Class D, 3.10%, 11/16/20		66		65,666
Series2015-1, Class D, 3.24%, 04/15/21		150		150,031
Series2015-2, Class D, 3.02%, 04/15/21		150		149,904
Series2016-1, Class C, 3.09%, 04/15/22		96		96,232
Series2016-3, Class D, 2.80%, 08/15/22		100		99,451
Series2017-1, Class B, 2.10%, 06/15/21		90		89,485
Series2017-2, Class B, 2.21%, 10/15/21		120		119,670
Series2017-2, Class C, 2.79%, 08/15/22		120		119,429
Series2017-2, Class D, 3.49%, 07/17/23		250		248,685
Series2018-5, Class D, 4.19%, 12/16/24		50		50,566

Security	Par (000)		Value
Asset-Backed Securities (continued)
SLM Private Education Loan Trust, Series2011-B, Class A2, 3.74%, 02/15/29(a)	$	26	$	26,480
SoFi Consumer Loan Program LLC, Class A(a):
Series2016-2A, 3.09%, 10/27/25		25		25,192
Series2016-3, 3.05%, 12/26/25		31		30,685
Series2017-1, 3.28%, 01/26/26		129		129,294
Series2017-3, 2.77%, 05/25/26		46		45,128
SoFi Consumer Loan Program Trust(a):
Series2015-1, Class A, 3.28%, 09/15/23		16		16,383
Series2018-1, Class A1, 2.55%, 02/25/27		56		55,182
Series2018-1, Class A2, 3.14%, 02/25/27		120		119,669
Series2018-3, Class A1, 3.20%, 08/25/27		75		75,001
Springleaf Funding Trust, Series2015-AA, Class A, 3.16%, 11/15/24(a)		25		25,090
Upgrade Receivables Trust, Series2018-1A, Class A, 3.76%, 11/15/24(a)		181		181,353
Westlake Automobile Receivables Trust(a):
Series2017-1A, Class D, 3.46%, 10/17/22		150		149,424
Series2018-2A, Class B, 3.20%, 01/16/24		70		69,810
Series2018-3A, Class B, 3.32%, 10/16/23		100		100,209
Series2018-3A, Class D, 4.00%, 10/16/23		100		100,334
Total Asset-Backed Securities — 14.8% (Cost — $5,308,646)				5,299,069
Corporate Bonds — 45.9%
Aerospace & Defense — 0.5%
Arconic, Inc., 5.90%, 02/01/27		50		47,625
BBA US Holdings, Inc., 5.38%, 05/01/26(a)		10		9,475
Spirit AeroSystems, Inc., 3.95%, 06/15/23		35		34,896
TransDigm, Inc., 6.38%, 06/15/26		50		46,500
United Technologies Corp., 3.95%, 08/16/25		30		29,767
				168,263
Air Freight & Logistics — 0.0%
XPO Logistics, Inc., 6.50%, 06/15/22(a)		7		6,939
Airlines — 0.6%
American Airlines Group, Inc., 4.63%, 03/01/20(a)		10		9,950
Delta Air Lines, Inc.:
2.60%, 12/04/20		25		24,583
3.40%, 04/19/21		75		74,374
United Continental Holdings, Inc., 5.00%, 02/01/24		100		97,000
				205,907
Auto Components — 0.7%
Allison Transmission, Inc., 5.00%, 10/01/24(a)		50		48,000
Icahn Enterprises LP/Icahn Enterprises Finance Corp.:
5.88%, 02/01/22		100		98,000
6.38%, 12/15/25		50		48,125
JB Poindexter & Co., Inc., 7.13%, 04/15/26(a)		25		23,375
Tenneco, Inc., 5.00%, 07/15/26		25		19,231
				236,731
Auto Parts — 0.1%
TPC Group, Inc., 8.75%, 12/15/20(a)		25		23,750
Automobiles — 0.1%
Ford Motor Co., 4.35%, 12/08/26		50		44,540
Banks — 1.8%
Capital One Financial Corp.:
2.40%, 10/30/20		85		83,216
3.45%, 04/30/21		26		25,988
3.20%, 01/30/23		50		48,656
3.30%, 10/30/24		100		94,575
CIT Group, Inc., 6.13%, 03/09/28		50		49,750

22 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Alternative Capital Strategies Fund (Percentages shown are based on Net Assets)

Security	Par (000)		Value
Banks (continued)
HSBC Holdings PLC, 4.00%, 03/30/22	$	50	$	50,651
HSBC USA, Inc., 3.50%, 06/23/24		300		295,306
				648,142
Beverages — 0.4%
Anheuser-Busch InBev Worldwide, Inc., 3.50%, 01/12/24		25		24,454
Constellation Brands, Inc., 4.40%, 11/15/25		45		45,089
Keurig Dr. Pepper, Inc.(a):
4.06%, 05/25/23		50		49,827
4.42%, 05/25/25		40		39,815
				159,185
Biotechnology — 0.3%
Celgene Corp., 2.25%, 08/15/21		100		96,947
Building Materials — 0.0%
Summit Materials LLC, 6.13%, 07/15/23		10		9,900
Building Products — 0.2%
Louisiana-Pacific Corp., 4.88%, 09/15/24		25		24,125
Standard Industries, Inc., 5.38%, 11/15/24(a)		35		32,856
				56,981
Capital Markets — 1.9%
Brookfield Finance, Inc., 3.90%, 01/25/28		50		47,201
Goldman Sachs Group, Inc.:
5.25%, 07/27/21		50		51,905
3.75%, 05/22/25		75		71,758
3.27%, 09/29/25(c)		25		23,434
3.75%, 02/25/26		75		70,923
3.50%, 11/16/26		35		32,328
Jefferies Group LLC/Jefferies Group Capital Finance, Inc., 4.85%, 01/15/27		40		38,224
Morgan Stanley:
2.63%, 11/17/21		50		48,801
2.75%, 05/19/22		50		48,644
4.88%, 11/01/22		25		25,762
3.13%, 01/23/23		50		48,847
3.70%, 10/23/24		25		24,585
3.88%, 01/27/26		50		48,769
3.13%, 07/27/26		90		83,217
				664,398
Chemicals — 0.4%
Ashland, Inc., 4.75%, 08/15/22		35		34,475
Chemours Co., 5.38%, 05/15/27		25		22,500
Olin Corp., 5.13%, 09/15/27		50		46,000
PolyOne Corp., 5.25%, 03/15/23		35		33,775
				136,750
Commercial Services & Supplies — 0.7%
Exela Intermediate LLC/Exela Finance, Inc., 10.00%, 07/15/23(a)		50		47,750
IHS Markit Ltd., 4.13%, 08/01/23		35		34,643
Park Aerospace Holdings Ltd., 5.50%, 02/15/24(a)		85		82,025
United Rentals North America, Inc., 4.88%, 01/15/28		100		87,750
				252,168
Communications Equipment — 0.6%
CommScope Technologies LLC, 6.00%, 06/15/25(a)		50		45,500
Gogo Intermediate Holdings LLC/Gogo Finance Co., Inc., 12.50%, 07/01/22(a)		50		53,312
Motorola Solutions, Inc.:
4.00%, 09/01/24		54		52,550
4.60%, 02/23/28		50		48,889
Zayo Group LLC/Zayo Capital, Inc., 6.38%, 05/15/25		30		27,900
				228,151

Security	Par (000)		Value
Construction & Engineering — 0.2%
AECOM, 5.13%, 03/15/27	$	50	$	42,750
Brand Industrial Services, Inc., 8.50%, 07/15/25(a)		25		21,313
				64,063
Construction Materials — 0.0%
HD Supply, Inc., 5.38%, 10/15/26(a)		15		14,550
Consumer Finance — 1.9%
Ally Financial, Inc.:
5.13%, 09/30/24		25		24,812
5.75%, 11/20/25		100		99,500
2.50%, 08/01/22		50		48,259
3.40%, 02/27/23		50		49,535
goeasy, Ltd., 7.88%, 11/01/22(a)		100		101,250
Mastercard, Inc.:
2.95%, 11/21/26		80		76,978
3.50%, 02/26/28		30		30,017
Navient Corp.:
5.00%, 10/26/20		15		14,363
6.63%, 07/26/21		25		24,125
6.13%, 03/25/24		50		42,875
5.88%, 10/25/24		25		20,875
Refinitiv US Holdings, Inc.(a):
6.25%, 05/15/26		15		14,475
8.25%, 11/15/26		20		18,275
Springleaf Finance Corp., 7.13%, 03/15/26		40		35,700
Total System Services, Inc., 4.00%, 06/01/23		50		49,919
Verscend Escrow Corp., 9.75%, 08/15/26		15		14,100
Visa, Inc., 2.75%, 09/15/27		25		23,676
				688,734
Containers & Packaging — 0.4%
Ball Corp.:
4.00%, 11/15/23		15		14,588
5.25%, 07/01/25		50		49,875
BWAY Holding Co., 5.50%, 04/15/24(a)		25		23,500
Clearwater Paper Corp., 5.38%, 02/01/25(a)		35		31,587
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer Lu, 5.13%, 07/15/23(a)		25		23,812
				143,362
Diversified Consumer Services — 0.4%
Graham Holdings Co., 5.75%, 06/01/26(a)		65		65,162
Service Corp. International, 4.63%, 12/15/27		50		47,000
ServiceMaster Co. LLC, 5.13%, 11/15/24(a)		25		23,625
				135,787
Diversified Financial Services — 4.8%
Ares Capital Corp.:
3.50%, 02/10/23		50		47,524
4.25%, 03/01/25		50		47,606
Bank of America Corp.:
(3 mo. LIBOR US + 1.02%), 2.88%, 04/24/23(d)		50		48,630
3.00%, 12/20/23(c)		53		51,516
(3 mo. LIBOR US + 1.58%), 3.82%, 01/20/28(d)		50		48,505
3.42%, 12/20/28(c)		54		50,444
4.27%, 07/23/29(c)		45		44,789
Citigroup, Inc.:
4.50%, 01/14/22		50		51,087
2.75%, 04/25/22		100		97,137
(3 mo. LIBOR US + 0.95%), 2.88%, 07/24/23(d)		100		96,773
4.04%, 06/01/24(c)		50		50,140
General Motors Financial Co., Inc.:
4.20%, 03/01/21		50		49,973
4.20%, 11/06/21		65		64,971
3.45%, 04/10/22		50		48,353

SCHEDULES OF INVESTMENTS 23

Schedule of Investments  (continued) December 31, 2018 BlackRock Alternative Capital Strategies Fund (Percentages shown are based on Net Assets)

Security	Par (000)		Value
Diversified Financial Services (continued)
3.25%, 01/05/23	$	50	$	47,086
4.15%, 06/19/23		145		141,281
Intercontinental Exchange, Inc., 3.75%, 12/01/25		25		25,116
Intrepid Aviation Group Holdings LLC/Intrepid Finance Co., 8.50%, 08/15/21(a)		25		24,747
JPMorgan Chase & Co.:
2.97%, 01/15/23		100		97,498
3.88%, 09/10/24		25		24,599
3.13%, 01/23/25		50		47,635
(3 mo. LIBOR US + 1.16%), 3.22%, 03/01/25(d)		50		48,299
3.30%, 04/01/26		50		47,617
4.20%, 07/23/29(c)		35		34,894
Mitsubishi UFJ Financial Group, Inc., 3.46%, 03/02/23		50		49,693
Nationstar Mortgage LLC/Nationstar Capital Corp., 6.50%, 06/01/22		50		49,000
ORIX Corp., 2.90%, 07/18/22		25		24,427
Quicken Loans, Inc., 5.75%, 05/01/25(a)		15		14,025
S&P Global, Inc., 4.40%, 02/15/26		100		103,174
Sally Holdings LLC/Sally Capital, Inc., 5.63%, 12/01/25		25		23,000
Sumitomo Mitsui Financial Group, Inc., 3.10%, 01/17/23		100		98,094
WMG Acquisition Corp., 5.00%, 08/01/23(a)		25		24,313
				1,721,946
Diversified Telecommunication Services — 1.2%
AT&T, Inc.:
3.20%, 03/01/22		40		39,458
3.80%, 03/01/24		80		79,193
CC Holdings GS V LLC/Crown Castle GS III Corp., 3.85%, 04/15/23		25		24,757
CenturyLink, Inc.:
Series S, 6.45%, 06/15/21		50		49,875
Series Y, 7.50%, 04/01/24		25		24,125
Frontier Communications Corp.:
10.50%, 09/15/22		25		17,375
11.00%, 09/15/25		10		6,225
8.50%, 04/01/26(a)		25		21,875
Level 3 Financing, Inc., 5.25%, 03/15/26		50		45,750
Qwest Corp., 7.25%, 09/15/25		50		51,479
Verizon Communications, Inc., 3.38%, 02/15/25		53		51,432
				411,544
Electric Utilities — 1.3%
AES Corp., 4.00%, 03/15/21		100		98,250
Dominion Resources, Inc., Series B, 2.75%, 01/15/22		50		48,703
Duke Energy Corp., 3.05%, 08/15/22		50		48,999
Eversource Energy, Series N, 3.80%, 12/01/23		100		100,963
NextEra Energy Operating Partners LP, 4.25%, 09/15/24(a)		50		46,250
PSEG Power LLC, 3.85%, 06/01/23		100		100,081
Talen Energy Supply LLC, 6.50%, 06/01/25		15		10,650
				453,896
Electronic Equipment, Instruments & Components — 0.1%
CDW LLC/CDW Finance Corp., 5.50%, 12/01/24		50		49,375
Energy Equipment & Services — 0.2%
McDermott Technology Americas, Inc./McDermott Technology U.S., Inc., 10.63%, 05/01/24(a)		50		42,188
TerraForm Power Operating LLC, 5.00%, 01/31/28(a)		25		22,000
Transocean, Inc., 5.80%, 10/15/22		25		22,000
				86,188
Environmental, Maintenance, & Security Service — 0.1%
Tervita Escrow Corp., 7.63%, 12/01/21(a)		25		23,813
Equity Real Estate Investment Trusts (REITs) — 0.8%
CBL & Associates LP, 4.60%, 10/15/24		25		18,750

Security	Par (000)		Value
Equity Real Estate Investment Trusts (REITs) (continued)
Iron Mountain, Inc., 4.88%, 09/15/27(a)	$	50	$	43,625
MGM Growth Properties Operating Partnership LP/MGP FinanceCo-Issuer, Inc., 5.63%, 05/01/24		50		49,500
MPT Operating Partnership LP/MPT Finance Corp., 5.00%, 10/15/27		50		45,719
Omega Healthcare Investors, Inc., 4.50%, 04/01/27		100		96,568
Welltower, Inc., 4.25%, 04/15/28		50		49,496
				303,658
Food & Staples Retailing — 1.0%
Dollar Tree, Inc., 3.70%, 05/15/23		60		59,000
Lamb Weston Holdings, Inc., 4.88%, 11/01/26(a)		100		96,000
Mondelez International, Inc., 3.63%, 05/07/23		100		100,121
Walgreens Boots Alliance, Inc., 3.80%, 11/18/24		100		98,479
				353,600
Food Products — 0.3%
Conagra Brands, Inc., 4.30%, 05/01/24		100		99,396
Pilgrim’s Pride Corp., 5.88%, 09/30/27(a)		25		22,688
				122,084
Gas Utilities — 0.3%
NiSource, Inc., 3.65%, 06/15/23(a)		45		45,076
Suburban Propane Partners LP/Suburban Energy Finance Corp., 5.50%, 06/01/24		50		46,500
				91,576
Health Care Equipment & Supplies — 0.9%
Abbott Laboratories, 3.40%, 11/30/23		70		69,786
Becton Dickinson & Co., 2.89%, 06/06/22		30		29,056
Boston Scientific Corp., 3.38%, 05/15/22		50		49,679
DJO Finance LLC/DJO Finance Corp., 8.13%, 06/15/21(a)		50		51,500
Hill-Rom Holdings, Inc., 5.00%, 02/15/25(a)		50		47,500
Mallinckrodt International Finance SA/Mallinckrodt CB LLC(a):
5.75%, 08/01/22		25		21,500
5.63%, 10/15/23		25		19,000
Ortho-Clinical Diagnostics, Inc./Ortho-Clinical Diagnostics SA, 6.63%, 05/15/22(a)		25		22,500
Teleflex, Inc., 4.88%, 06/01/26		25		23,875
				334,396
Health Care Providers & Services — 1.8%
Anthem, Inc.:
2.95%, 12/01/22		25		24,381
4.10%, 03/01/28		35		34,305
Centene Corp.:
5.63%, 02/15/21		30		30,075
5.38%, 06/01/26(a)		30		29,175
CHS/Community Health Systems, Inc., 6.25%, 03/31/23		50		45,440
DaVita, Inc., 5.13%, 07/15/24		25		23,437
Encompass Health Corp., 5.75%, 11/01/24		25		24,750
Envision Healthcare Crop., 8.75%, 10/15/26(a)		25		21,625
HCA, Inc.:
5.00%, 03/15/24		50		49,500
5.88%, 02/15/26		50		49,750
5.25%, 06/15/26		100		99,250
5.38%, 09/01/26		10		9,725
5.63%, 09/01/28		10		9,650
Tenet Healthcare Corp.:
6.00%, 10/01/20		100		101,250
6.75%, 06/15/23		25		23,469
UnitedHealth Group, Inc., 3.10%, 03/15/26		50		48,254
WellCare Health Plans, Inc., 5.38%, 08/15/26(a)		35		33,775
				657,811

24 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Alternative Capital Strategies Fund (Percentages shown are based on Net Assets)

Security	Par (000)		Value
Hotels, Restaurants & Leisure — 2.5%
1011778 BC ULC/New Red Finance, Inc.(a):
4.63%, 01/15/22	$	35	$	33,863
4.25%, 05/15/24		50		46,000
Boyd Gaming Corp., 6.00%, 08/15/26		10		9,350
Darden Restaurants, Inc., 3.85%, 05/01/27		35		33,670
Eldorado Resorts, Inc., 6.00%, 09/15/26(a)		10		9,450
GLP Capital LP/GLP Financing II, Inc., 5.38%, 04/15/26		140		138,461
Golden Nugget, Inc., 6.75%, 10/15/24(a)		50		47,125
Hilton Worldwide Finance LLC/Hilton Worldwide Finance Corp., 4.88%, 04/01/27		50		46,875
International Game Technology PLC, 6.50%, 02/15/25(a)		200		197,000
KFC Holding Co./Pizza Hut Holdings LLC/Taco Bell of America LLC(a):
5.25%, 06/01/26		25		24,188
4.75%, 06/01/27		25		23,250
McDonald’s Corp., 3.38%, 05/26/25		50		48,879
MGM Resorts International, 7.75%, 03/15/22		100		106,375
Scientific Games International, Inc., 10.00%, 12/01/22		15		15,225
Stars Group Holdings BV/Stars Group USCo-Borrower LLC, 7.00%, 07/15/26(a)		10		9,725
Wyndham Hotels & Resorts, Inc., 5.38%, 04/15/26(a)		50		48,000
Wynn Las Vegas LLC / Wynn Las Vegas Capital Corp., 4.25%, 05/30/23(a)		50		47,000
				884,436
Household Durables — 0.6%
Lennar Corp., 5.88%, 11/15/24		50		50,000
MDC Holdings, Inc., 5.50%, 01/15/24		50		48,000
PulteGroup, Inc., 5.50%, 03/01/26		100		96,250
Shea Homes LP/Shea Homes Funding Corp., 6.13%, 04/01/25(a)		25		22,125
				216,375
Independent Power and Renewable Electricity Producers — 0.6%
Calpine Corp., 5.25%, 06/01/26(a)		75		68,437
Clearway Energy Operating LLC, 5.75%, 10/15/25(a)		40		38,200
NRG Energy, Inc., 6.63%, 01/15/27		100		100,750
				207,387
Insurance — 0.9%
CNO Financial Group, Inc., 4.50%, 05/30/20		10		9,875
Fidelity & Guaranty Life Holdings, Inc., 5.50%, 05/01/25(a)		15		14,330
Marsh & McLennan Cos., Inc., 3.50%, 03/10/25		200		196,472
Radian Group, Inc., 5.25%, 06/15/20		44		44,330
Trinity Acquisition PLC, 3.50%, 09/15/21		50		49,514
				314,521
Internet & Direct Marketing Retail — 0.4%
Expedia Group, Inc., 4.50%, 08/15/24		125		125,160
Internet Software & Services — 0.6%
Booking Holdings, Inc., 3.60%, 06/01/26		39		37,890
Netflix, Inc., 5.88%, 11/15/28(a)		100		97,170
VeriSign, Inc.:
4.63%, 05/01/23		35		34,475
4.75%, 07/15/27		50		46,890
				216,425
IT Services — 0.1%
Verisk Analytics, Inc., 4.00%, 06/15/25		50		50,197
Machinery — 0.0%
Mueller Water Products, Inc., 5.50%, 06/15/26(a)		5		4,850
Media — 3.3%
AMC Networks, Inc., 4.75%, 08/01/25		50		45,375
CCO Holdings LLC/CCO Holdings Capital Corp.:
5.25%, 09/30/22		50		49,562

Security	Par (000)		Value
Media (continued)
5.88%, 04/01/24(a)	$	25	$	24,875
5.75%, 02/15/26(a)		25		24,500
5.13%, 05/01/27(a)		50		46,570
Charter Communications Operating LLC/Charter Communications Operating Capital:
3.58%, 07/23/20		50		49,946
4.50%, 02/01/24		100		99,848
Comcast Corp.:
3.70%, 04/15/24		65		65,397
3.95%, 10/15/25		30		30,355
CSC Holdings LLC, 5.50%, 05/15/26(a)		200		188,500
DISH DBS Corp.:
5.88%, 07/15/22		50		46,000
5.88%, 11/15/24		25		20,125
7.75%, 07/01/26		25		20,688
Gray Escrow, Inc., 7.00%, 05/15/27(a)		35		34,061
Gray Television, Inc., 5.88%, 07/15/26(a)		14		13,052
Hughes Satellite Systems Corp., 5.25%, 08/01/26		35		32,069
Intelsat Jackson Holdings SA, 8.50%, 10/15/24(a)		30		29,100
Sirius XM Radio, Inc.(a):
5.38%, 04/15/25		35		33,163
5.00%, 08/01/27		100		91,375
Time Warner Cable LLC, 4.00%, 09/01/21		20		19,878
Univision Communications, Inc., 5.13%, 02/15/25(a)		15		13,163
Virgin Media Secured Finance PLC, 5.25%, 01/15/21		200		198,820
				1,176,422
Metals & Mining — 1.1%
Big River Steel LLC/BRS Finance Corp., 7.25%, 09/01/25(a)		25		24,812
Cleveland-Cliffs, Inc., 5.75%, 03/01/25		25		22,500
Commercial Metals Co., 5.75%, 04/15/26(a)		50		46,375
Freeport-McMoRan, Inc.:
3.55%, 03/01/22		50		47,312
3.88%, 03/15/23		100		92,500
Steel Dynamics, Inc., 5.50%, 10/01/24		50		49,500
Teck Resources Ltd., 6.25%, 07/15/41		25		23,688
United States Steel Corp., 6.25%, 03/15/26		30		26,250
Vale Overseas Ltd., 6.25%, 08/10/26		40		43,200
				376,137
Multi-Utilities — 0.4%
AmeriGas Partners LP/AmeriGas Finance Corp.:
5.63%, 05/20/24		45		42,525
5.50%, 05/20/25		50		45,750
National Fuel Gas Co., 3.95%, 09/15/27		40		37,353
				125,628
Office Supplies & Equipment — 0.2%
VMware, Inc.:
2.95%, 08/21/22		40		38,126
3.90%, 08/21/27		50		44,351
				82,477
Oil, Gas & Consumable Fuels — 3.7%
Antero Resources Corp., 5.13%, 12/01/22		50		47,000
Cheniere Corpus Christi Holdings LLC, 5.88%, 03/31/25		100		99,500
Cheniere Energy Partners LP:
5.63%, 10/01/26(a)		35		32,725
Series WI, 5.25%, 10/01/25		50		46,625
Chesapeake Energy Corp., 7.00%, 10/01/24		55		47,575
CrownRock LP/CrownRock Finance, Inc., 5.63%, 10/15/25(a)		25		22,500
DCP Midstream Operating LP, 5.38%, 07/15/25		30		29,325
Diamond Offshore Drilling, Inc., 7.88%, 08/15/25		25		20,750
EnLink Midstream Partners LP, 4.85%, 07/15/26		50		45,088
EP Energy LLC/Everest Acquisition Finance, Inc., 7.75%, 05/15/26(a)		60		53,100

SCHEDULES OF INVESTMENTS 25

Schedule of Investments  (continued) December 31, 2018 BlackRock Alternative Capital Strategies Fund (Percentages shown are based on Net Assets)

Security	Par (000)		Value
Oil, Gas & Consumable Fuels (continued)
Hilcorp Energy I LP/Hilcorp Finance Co., 6.25%, 11/01/28(a)	$	20	$	17,600
Marathon Petroleum Corp., 5.13%, 12/15/26(a)		23		23,559
Matador Resources Co., 5.88%, 09/15/26		10		9,200
MPLX LP, 4.88%, 06/01/25		50		50,458
Murphy Oil Corp., 5.75%, 08/15/25		100		93,409
Newfield Exploration Co., 5.38%, 01/01/26		50		49,000
Oasis Petroleum, Inc., 6.25%, 05/01/26(a)		10		8,400
ONEOK, Inc., 4.55%, 07/15/28		50		49,350
PBF Holding Co. LLC/ PBF Finance Corp., 7.25%, 06/15/25		100		94,000
Precision Drilling Corp., 7.13%, 01/15/26(a)		25		21,500
Rowan Cos., Inc., 7.38%, 06/15/25		50		40,125
Sabine Pass Liquefaction LLC:
5.75%, 05/15/24		100		104,336
4.20%, 03/15/28		40		38,261
Shell International Finance BV, 3.88%, 11/13/28		85		87,350
SM Energy Co., 6.63%, 01/15/27		5		4,425
Southwestern Energy Co., 6.20%, 01/23/25		50		44,687
Sunoco LP/Sunoco Finance Corp., Series WI, 5.50%, 02/15/26		100		94,750
Targa Resources Partners LP/Targa Resources Partners Finance Corp., 5.88%, 04/15/26(a)		35		34,038
Transocean Guardian Ltd., 5.88%, 01/15/24(a)		5		4,788
W&T Offshore, Inc., 2018 Term Loan, 9.75%, 11/01/23(a)		25		21,875
				1,335,299
Personal Products — 0.1%
Avon International Operations, Inc., 7.88%, 08/15/22(a)		50		49,250
Pharmaceuticals — 2.2%
AstraZeneca PLC:
3.50%, 08/17/23		100		99,476
3.38%, 11/16/25		100		96,631
Bausch Health Cos., Inc.(a):
6.13%, 04/15/25		50		43,625
5.50%, 11/01/25		100		93,250
CVS Health Corp., 3.70%, 03/09/23		70		69,251
Endo Finance LLC, 5.75%, 01/15/22(a)		100		83,250
Takeda Pharmaceutical Co. Ltd., 4.00%, 11/26/21(a)		200		202,728
Valeant Pharmaceuticals International, 8.50%, 01/31/27(a)		10		9,700
Zoetis, Inc., 3.00%, 09/12/27		100		92,354
				790,265
Real Estate Management & Development — 0.1%
Howard Hughes Corp., 5.38%, 03/15/25(a)		25		23,500
Kennedy-Wilson, Inc., 5.88%, 04/01/24		25		23,375
				46,875
Road & Rail — 0.3%
Hertz Corp., 7.63%, 06/01/22(a)		50		47,125
Kenan Advantage Group, Inc., 7.88%, 07/31/23(a)		15		14,363
Union Pacific Corp., 3.95%, 09/10/28		40		39,945
				101,433
Semiconductors & Semiconductor Equipment — 1.1%
Analog Devices, Inc., 2.50%, 12/05/21		25		24,404
Broadcom Corp./Broadcom Cayman Finance Ltd.:
2.38%, 01/15/20		75		74,063
3.00%, 01/15/22		75		72,128
3.63%, 01/15/24		40		37,844
NVIDIA Corp., 3.20%, 09/16/26		50		47,422
Qorvo, Inc., 5.50%, 07/15/26(a)		10		9,550
QUALCOMM, Inc., 3.25%, 05/20/27		100		93,020
Sensata Technologies BV, 5.00%, 10/01/25(a)		50		47,000
				405,431
Software — 0.6%
CA, Inc., 3.60%, 08/15/22		25		24,405

Security	Par (000)		Value
Software (continued)
CDK Global, Inc.:
5.88%, 06/15/26	$	10	$	10,041
4.88%, 06/01/27		50		46,375
Citrix Systems, Inc., 4.50%, 12/01/27		50		47,791
Infor US, Inc., 6.50%, 05/15/22		30		29,014
MSCI, Inc., 5.38%, 05/15/27(a)		50		48,937
				206,563
Specialty Retail — 0.7%
L Brands, Inc.:
5.63%, 10/15/23		50		49,063
6.88%, 11/01/35		25		20,880
O’Reilly Automotive, Inc., 3.60%, 09/01/27		100		95,274
PetSmart, Inc., 5.88%, 06/01/25(a)		25		18,063
Tapestry, Inc.:
3.00%, 07/15/22		50		48,187
4.13%, 07/15/27		19		17,778
				249,245
Technology Hardware, Storage & Peripherals — 0.2%
Apple, Inc., 3.35%, 02/09/27		65		63,335
Tobacco — 0.6%
Altria Group, Inc.:
4.00%, 01/31/24		50		49,137
2.63%, 09/16/26		50		43,677
BAT Capital Corp., 2.76%, 08/15/22		75		70,839
Philip Morris International, Inc., 3.25%, 11/10/24		25		24,398
Pyxus International, Inc., 9.88%, 07/15/21		25		18,938
Vector Group Ltd., 6.13%, 02/01/25(a)		10		8,500
				215,489
Wireless Telecommunication Services — 1.6%
American Tower Corp.:
3.30%, 02/15/21		50		49,713
3.50%, 01/31/23		25		24,569
3.55%, 07/15/27		80		75,049
Crown Castle International Corp.:
3.20%, 09/01/24		30		28,461
3.65%, 09/01/27		40		37,082
Equinix, Inc., 5.38%, 05/15/27		50		48,875
Intelsat Connect Finance SA, 9.50%, 02/15/23(a)		10		8,600
SBA Communications Corp., 4.88%, 09/01/24		25		23,500
Sprint Communications, Inc., 6.00%, 11/15/22		25		24,533
Sprint Corp.:
7.25%, 09/15/21		25		25,588
7.88%, 09/15/23		25		25,656
7.63%, 03/01/26		25		24,688
T-Mobile USA, Inc.:
6.38%, 03/01/25		50		50,500
6.50%, 01/15/26		50		51,000
4.50%, 02/01/26		50		45,875
4.75%, 02/01/28		25		22,625
Uniti Group LP/Uniti Group Finance, Inc./CSL Capital LLC, 6.00%, 04/15/23(a)		15		13,575
				579,889
Total Corporate Bonds — 45.9% (Cost — $16,986,493)				16,418,224
Non-Agency Mortgage-Backed Securities — 1.5%
Collateralized Mortgage Obligations — 1.5%
Connecticut Avenue Securities Trust, Series2018-R07, Class 1M2, 4.91%, 04/25/31(a)(c)		125		122,949

26 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Alternative Capital Strategies Fund (Percentages shown are based on Net Assets)

Security	Par (000)		Value
Collateralized Mortgage Obligations (continued)
STACR Trust(a)(c):
Series 2018-DNA3, Class M1, 3.26%, 09/25/48	$	120	$	119,769
Series 2018-HRP1, Class M2, 4.16%, 04/25/43		290		290,447
Total Non-Agency Mortgage-Backed Securities — 1.5% (Cost — $537,018)				533,165
U.S. Government Sponsored Agency Securities — 36.1%
Collateralized Mortgage Obligations — 8.2%
Fannie Mae Connecticut Avenue Securities:
Series2018-C06, Class 2M1, 3.06%, 03/25/31(c)		50		49,919
Series2018-C06, Class 1M1, 3.06%, 03/25/31(c)		57		57,118
Series2018-C02, Class 2M1, 3.16%, 08/25/30(c)		94		93,363
Series2018-C03, Class 1M1, 3.19%, 10/25/30(c)		57		56,514
Series2017-C06, Class 1M1, 3.26%, 02/25/30(c)		30		29,849
Series2017-C04, Class 2M1, (1 mo. LIBOR US + 0.85%), 3.36%, 11/25/29(b)		73		72,972
Series2017-C01, Class 1M1, (1 mo. LIBOR US + 1.30%), 3.81%, 07/25/29(b)		51		50,619
Series2016-C05, Class 2M1, (1 mo. LIBOR US + 1.35%), 3.86%, 01/25/29(b)		13		13,394
Series2016-C04, Class 1M1, (1 mo. LIBOR US + 1.45%), 3.96%, 01/25/29(b)		54		54,639
Series2017-C05, Class 1M2A, (1 mo. LIBOR US + 2.20%), 4.71%, 01/25/30(b)		140		141,953
Series2018-C02, Class 2M2, 4.71%, 08/25/30(c)		125		121,618
Series2017-C07, Class 1M2, 4.91%, 05/25/30(c)		100		100,715
Series2017-C07, Class 2M2A, 5.01%, 05/25/30(c)		100		102,615
Series2017-C07, Class 2M2, 5.01%, 05/25/30(c)		100		99,775
Series2014-C02, Class 2M2, (1 mo. LIBOR US + 2.60%), 5.11%, 05/25/24(b)		116		119,648
Series2017-C06, Class 1M2, 5.16%, 02/25/30(c)		100		101,467
Series2017-C06, Class 2M2, 5.31%, 02/25/30(c)		100		101,766
Series2014-C03, Class 2M2, (1 mo. LIBOR US + 2.90%), 5.41%, 07/25/24(b)		141		147,615
Series2017-C01, Class 1M2A, (1 mo. LIBOR US + 3.55%), 6.06%, 07/25/29(b)		100		104,806
Series2015-C02, Class 1M2, (1 mo. LIBOR US + 4.00%), 6.51%, 05/25/25(b)		66		70,497
Series2015-C02, Class 2M2, (1 mo. LIBOR US + 4.00%), 6.51%, 05/25/25(b)		61		64,980
Series2015-C01, Class 1M2, (1 mo. LIBOR US + 4.30%), 6.81%, 02/25/25(b)		63		68,005
Series2014-C01, Class M2, (1 mo. LIBOR US + 4.40%), 6.91%, 01/25/24(b)		100		110,549
Series2016-C05, Class 2M2, (1 mo. LIBOR US + 4.45%), 6.96%, 01/25/29(b)		150		163,668
Series2014-C04, Class 1M2, (1 mo. LIBOR US + 4.90%), 7.41%, 11/25/24(b)		31		35,023
Series2014-C04, Class 1M2, (1 mo. LIBOR US + 5.00%), 7.51%, 11/25/24(b)		79		87,724
Series2015-C03, Class 1M2, (1 mo. LIBOR US + 5.00%), 7.51%, 07/25/25(b)		71		78,815
Series2015-C04, Class 1M2, (1 mo. LIBOR US + 5.70%), 8.21%, 04/25/28(b)		80		90,059
Freddie Mac Structured Agency Credit Risk Debt Notes:
Series 2017-DNA3, Class M2, 5.01%, 03/25/30(c)		250		250,001
Series 2018-DNA1, Class B1, 5.66%, 07/25/30(c)		75		69,456
Series2015-DN1, Class M3, (1 mo. LIBOR US + 4.15%), 6.66%, 01/25/25(b)		193		205,299
				2,914,441

Security	Par (000)		Value
Mortgage-Backed Securities — 27.9%
Fannie Mae Mortgage-Backed Securities(e):
3.00%, 08/01/47 - 01/01/49	$	141	$	137,955
3.50%, 01/01/46 - 01/01/49		1,049		1,048,319
4.00%, 01/01/34 - 01/01/49		1,299		1,324,379
4.50%, 01/01/34 - 01/01/49		803		832,743
5.00%, 02/01/41 - 01/01/49		346		363,363
5.50%, 01/01/49		225		238,078
Freddie Mac Mortgage-Backed Securities(e):
3.00%, 08/01/46 - 01/01/49		58		56,188
3.50%, 05/01/46 - 01/01/49		888		887,497
4.00%, 01/01/34 - 01/01/49		738		752,528
4.50%, 05/01/42 - 01/01/49		576		597,058
5.00%, 01/01/49		350		366,535
Ginnie Mae Mortgage-Backed Securities(e):
3.00%, 05/20/45 - 01/01/49		212		210,050
3.50%, 06/15/43 - 01/01/49		987		993,042
4.00%, 03/20/48 - 01/01/49		972		995,013
4.50%, 07/20/48 - 01/01/49		797		824,992
5.00%, 01/01/49		333		346,567
				9,974,307
Total U.S. Government Sponsored Agency Securities — 36.1% (Cost — $12,787,444)				12,888,748
Total Long-Term Investments — 107.6% (Cost — $39,035,670)				38,471,097
	Shares
Short-Term Securities — 14.1%
BlackRock Liquidity Funds,T-Fund, Institutional Class, 2.32%(f)(g)		5,039,873		5,039,873
Total Short-Term Securities — 14.1% (Cost — $5,039,873)				5,039,873
Total Investments Before TBA Sale Commitments — 121.7% (Cost — $44,075,543)				43,510,970
	Par (000)
TBA Sale Commitments(e) — (0.4%)
Mortgage-Backed Securities — (0.4%)
Fannie Mae Mortgage-Backed Securities 3.50%, 01/01/49		USD    50		(49,991	)
Ginnie Mae Mortgage-Backed Securities:
3.00%, 01/01/49		50		(49,237	)
3.50%, 01/01/49		25		(25,155	)
Total TBA Sale Commitments — (0.4)% (Proceeds — $123,066)				(124,383	)
Total Investments, Net of TBA Sale Commitments — 121.3% (Cost — $43,952,477)				43,386,587
Liabilities in Excess of Other Assets — (21.3)%				(7,626,486	)
Net Assets — 100.0%			$	35,760,101

^(a)  Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

^(b)  Variable rate security. Rate shown is the rate in effect as of period end.

^(c)  Variable or floating rate security, which interest rate adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. Rate shown is the rate in effect as of period end.

SCHEDULES OF INVESTMENTS 27

Schedule of Investments  (continued) December 31, 2018 BlackRock Alternative Capital Strategies Fund

^(d)  Variable rate security. Security may be issued at a fixed coupon rate, which converts to a variable rate at a specified date. Rate shown is the rate in effect as of period end.

^(e)  Represents or includes a TBA transaction.

^(f)  Annualized7-day yield as of period end.

^(g)  During the year ended December 31, 2018, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

Affiliate	Shares Held at 12/31/17		Net Activity		Shares Held at 12/31/18		Value at 12/31/18		Income		Net Realized Gain (Loss) (a)		Change in Unrealized Appreciation (Depreciation)
BlackRock Liquidity Funds,T-Fund, Institutional Class		1,004,163		4,035,710		5,039,873	$	5,039,873	$	26,413	$	—	$	—

^(a)  Includes net capital gain distributions, if applicable.

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

Description	Number of Contracts		Expiration Date		Notional Amount (000)		Value Unrealized Appreciation (Depreciation)
Long Contracts:
Euro OAT		8		03/07/19	$	1,382	$	(76	)
10-Year Australian Treasury Bond		12		03/15/19		1,121		11,903
10- Year U.S. Ultra Long Treasury Bond		1		03/20/19		130		4,202
10-Year U.S. Treasury Note		4		03/20/19		488		1,813
Long U.S. Treasury Bond		4		03/20/19		584		19,963
U.S. Ultra Bond		5		03/20/19		803		33,945
Long Gilt		3		03/27/19		471		4,356
								76,106
Short Contracts:
Euro Bund		10		03/07/19		1,874		(9,141	)
10-Year Canada Bond		12		03/20/19		1,202		(37,354	)
2-Year U.S. Treasury Note		4		03/29/19		849		(3,755	)
5-Year U.S. Treasury Note		4		03/29/19		459		(6,616	)
								(56,866	)
							$	19,240

Forward Foreign Currency Exchange Contracts

Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
USD	7,434	CAD	10,000	JPMorgan Chase Bank N.A.		03/20/19	$	96
USD	7,318	SGD	10,000	State Street Bank and Trust Co.		03/20/19		(32	)
							$	64

Centrally Cleared Credit Default Swaps — Sell Protection

Reference Obligation/Index	Financing Rate Received by the Fund			Payment Frequency		Termination Date		Credit Rating (a)	Notional Amount (000) (b)			Value		Upfront Premium Paid (Received)		Unrealized Appreciation (Depreciation)
CDX.NA.HY.31.V1		5.00	%		Quarterly		12/20/23	B		USD	850	$	18,360	$	45,683	$	(27,323	)

^(a)  Using S&P Global Rating of the issuer or the underlying securities of the index, as applicable.

^(b)  The maximum potential amount the Fund may pay should a negative credit event take place as defined under the terms of the agreement.

28 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Alternative Capital Strategies Fund

Centrally Cleared Interest Rate Swaps

Paid by the Fund		Received by the Fund		Effective Date			Termination Date		Notional Amount (000)		Value			Upfront Premium Paid (Received)			Unrealized Appreciation (Depreciation)
Rate	Frequency	Rate	Frequency
6-Month EURIBOR, (0.24%)	Semi-annual	0.28%	Annual		N/A			12/19/23	EUR	50	$	255		$	1		$	254
6-Month EURIBOR, (0.24%)	Semi-annual	0.34	Annual		N/A			12/19/23	EUR	70		618			1			617
6-Month EURIBOR, (0.24%)	Semi-annual	0.39	Annual		N/A			12/19/23	EUR	30		351			1			350
6-Month EURIBOR, (0.24%)	Semi-annual	0.39	Annual		N/A			12/19/23	EUR	130		1,523			3			1,520
6-Month EURIBOR, (0.24%)	Semi-annual	0.43	Annual		N/A			12/19/23	EUR	50		697			1			696
MXN 28D TIIE, 8.59%	Monthly	8.19	Monthly		03/20/19	(a)		03/13/24	MXN	2,960		(2,455	)		2			(2,457	)
MXN 28D TIIE, 8.59%	Monthly	8.09	Monthly		03/20/19	(a)		03/13/24	MXN	2,040		(2,109	)		2			(2,111	)
MXN 28D TIIE, 8.59%	Monthly	8.11	Monthly		03/20/19	(a)		03/13/24	MXN	1,320		(1,313	)		1			(1,314	)
MXN 28D TIIE, 8.59%	Monthly	9.00	Monthly		03/20/19	(a)		03/13/24	MXN	3,070		2,544			2			2,542
MXN 28D TIIE, 8.59%	Monthly	8.51	Monthly		03/20/19	(a)		03/13/24	MXN	830		(153	)		1			(154	)
MXN 28D TIIE, 8.59%	Monthly	8.60	Monthly		03/20/19	(a)		03/13/24	MXN	3,020		14			2			12
3-Month JIBAR, 7.15%	Quarterly	8.33	Quarterly		03/20/19	(a)		03/20/24	ZAR	2,450		4,136			3			4,133
3.05	Semi-annual	3-Month LIBOR, 2.81%	Quarterly		03/20/19	(a)		03/20/24	USD	130		(2,912	)		(9	)		(2,903	)
0.17	Semi-annual	6-Month JPY LIBOR, 0.01%	Semi-annual		03/20/19	(a)		03/20/24	JPY	28,000		(1,823	)		4			(1,827	)
0.70	Annual	3-Month STIBOR, (0.13%)	Quarterly		03/20/19	(a)		03/20/24	SEK	1,020		(735	)		(124	)		(611	)
2.95	Quarterly	3-Month HIBOR, 2.33%	Quarterly		03/20/19	(a)		03/20/24	HKD	820		(3,078	)		2			(3,080	)
2.42	Semi-annual	6-Month SIBOR, 1.94%	Semi-annual		03/20/19	(a)		03/20/24	SGD	105		(1,846	)		1			(1,847	)
2.43	Semi-annual	6-Month SIBOR, 1.94%	Semi-annual		03/20/19	(a)		03/20/24	SGD	25		(446	)		—			(446	)
3-Month JIBAR ,7.15%	Quarterly	8.41	Quarterly		03/20/19	(a)		03/20/24	ZAR	1,530		2,928			2			2,926
3.15	Semi-annual	3-Month LIBOR, 2.81%	Quarterly		03/20/19	(a)		03/20/24	USD	130		(3,510	)		2			(3,512	)
2.49%	Semi-annual	6-Month SIBOR, 1.94%	Semi-annual		03/20/19	(a)		03/20/24	SGD	17		(326	)		—			(326	)
6-Month WIBOR, 1.69%	Semi-annual	2.63%	Annual		03/20/19	(a)		03/20/24	PLN	280		1,674			1			1,673
3-Month JIBAR, 7.15%	Quarterly	8.19	Quarterly		03/20/19	(a)		03/20/24	ZAR	1,430		1,872			2			1,870
2.51	Semi-annual	6-Month SIBOR, 1.94%	Semi-annual		03/20/19	(a)		03/20/24	SGD	84		(1,724	)		1			(1,725	)
6-Month BBR, (0.24%)	Semi-annual	2.60	Semi-annual		03/20/19	(a)		03/20/24	AUD	160		1,949			2			1,947
6-Month WIBOR, 1.69%	Semi-annual	2.77	Annual		03/20/19	(a)		03/20/24	PLN	310		2,373			1			2,372
3.08	Semi-annual	3-Month LIBOR, 2.81%	Quarterly		03/20/19	(a)		03/20/24	USD	60		(1,402	)		1			(1,403	)
1.37	Semi-annual	6-Month GBP LIBOR, 1.03%	Semi-annual		03/20/19	(a)		03/20/24	GBP	20		(61	)		—			(61	)
6-Month BBR, (0.24%)	Semi-annual	2.42	Semi-annual		03/20/19	(a)		03/20/24	AUD	80		476			1			475
2.10	Semi-annual	6-Month SIBOR, 1.94%	Semi-annual		03/20/19	(a)		03/20/24	SGD	130		(797	)		2			(799	)
1.35	Semi-annual	6-Month GBP LIBOR, 1.03%	Semi-annual		03/20/19	(a)		03/20/24	GBP	60		(126	)		1			(127	)
6-Month EURIBOR, (0.24%)	Semi-annual	0.32	Annual		03/20/19	(a)		03/20/24	EUR	20		80			—			80
1.96	Semi-annual	6-Month SIBOR, 1.94%	Semi-annual		03/20/19	(a)		03/20/24	SGD	40		(56	)		—			(56	)
1.96	Semi-annual	6-Month SIBOR, 1.94%	Semi-annual		03/20/19	(a)		03/20/24	SGD	40		(57	)		—			(57	)
2.00	Semi-annual	6-Month SIBOR, 1.94%	Semi-annual		03/20/19	(a)		03/20/24	SGD	40		(106	)		—			(106	)
2.39	Quarterly	3-Month HIBOR, 2.33%	Quarterly		03/20/19	(a)		03/20/24	HKD	790		(275	)		2			(277	)
1.97	Semi-annual	6-Month SIBOR, 1.94%	Semi-annual		03/20/19	(a)		03/20/24	SGD	110		(174	)		1			(175	)
1.35	Semi-annual	6-Month GBP LIBOR, 1.03%	Semi-annual		03/20/19	(a)		03/20/24	GBP	80		(151	)		2			(153	)
6-Month BBR, 2.22%	Semi-annual	2.57%	Semi-annual		03/20/19	(a)		03/20/24	AUD	50		545			1			544
6-Month BBR, 2.22%	Semi-annual	2.58	Semi-annual		03/20/19	(a)		03/20/24	AUD	50		572			1			571
6-Month BBR, 2.22%	Semi-annual	2.59	Semi-annual		03/20/19	(a)		03/20/24	AUD	90		1,049			1			1,048
6-Month BBR, 2.22%	Semi-annual	2.59	Semi-annual		03/20/19	(a)		03/20/24	AUD	90		1,062			1			1,061
6-Month BBR, 2.22%	Semi-annual	2.60	Semi-annual		03/20/19	(a)		03/20/24	AUD	150		1,798			2			1,796
6-Month BBR, 2.22%	Semi-annual	2.60	Semi-annual		03/20/19	(a)		03/20/24	AUD	270		3,262			3			3,259
6-Month BBR, 2.22%	Semi-annual	2.62	Semi-annual		03/20/19	(a)		03/20/24	AUD	190		2,383			2			2,381
2.73%	Semi-annual	3-Month CAD BA, 2.31%	Semi-annual		03/20/19	(a)		03/20/24	CAD	20		(299	)		(6	)		(293	)
3.06	Quarterly	3-Month HIBOR, 2.33%	Quarterly		03/20/19	(a)		03/20/24	HKD	550		(2,441	)		1			(2,442	)
3.13	Semi-annual	3-Month LIBOR, 2.81%	Quarterly		03/20/19	(a)		03/20/24	USD	20		(521	)		—			(521	)
											$	3,265		$	(79	)	$	3,344

^(a)  Forward swap.

SCHEDULES OF INVESTMENTS 29

Schedule of Investments  (continued) December 31, 2018 BlackRock Alternative Capital Strategies Fund

OTC Interest Rate Swaps

Paid by the Fund		Received by the Fund		Counterparty		Effective Date (a)		Termination Date	Notional Amount (000)			Value			Upfront Premium Paid (Received)		Unrealized Appreciation (Depreciation)
Rate	Frequency	Rate	Frequency
1.98%	Quarterly	3-Month KRW CDC, 1.90%	Quarterly		Deutsche Bank AG		03/20/19	03/20/24		KRW	274,940	$	(2,498	)	$	—	$	(2,498	)
2.03	Quarterly	3-Month KRW CDC, 1.90%	Quarterly		Deutsche Bank AG		03/20/19	03/20/24		KRW	115,034		(1,283	)		—		(1,283	)
2.03	Quarterly	3-Month KRW CDC, 1.90%	Quarterly		Citibank N.A.		03/20/19	03/20/24		KRW	57,262		(633	)		—		(633	)
2.04	Quarterly	3-Month KRW CDC, 1.90%	Quarterly		Bank of America N.A.		03/20/19	03/20/24		KRW	70,677		(828	)		—		(828	)
2.05	Quarterly	3-Month KRW CDC, 1.90%	Quarterly		Deutsche Bank AG		03/20/19	03/20/24		KRW	76,567		(914	)		—		(914	)
2.13	Quarterly	3-Month KRW CDC, 1.90%	Quarterly		Deutsche Bank AG		03/20/19	03/20/24		KRW	159,690		(2,479	)		—		(2,479	)
2.14	Quarterly	3-Month KRW CDC, 1.90%	Quarterly		Deutsche Bank AG		03/20/19	03/20/24		KRW	159,690		(2,513	)		—		(2,513	)
2.15	Quarterly	3-Month KRW CDC, 1.90%	Quarterly		Citibank N.A.		03/20/19	03/20/24		KRW	78,420		(1,268	)		—		(1,268	)
1.97	Quarterly	3-Month KRW CDC, 1.90%	Quarterly		Deutsche Bank AG		03/20/19	03/20/24		KRW	74,260		(639	)		—		(639	)
												$	(13,055	)	$	—	$	(13,055	)

^(a)  Forward swap.

OTC Total Return Swaps ^(a)

Reference Entity	Counterparty	Expiration Date		Net Notional Amount			Unrealized Appreciation (Depreciation)			Net Value of Reference Entities		Gross Notional Amount Net Asset Percentage
Equity Securities Long/Short:	Morgan Stanley & Co. International PLC		02/27/23	$	102,059		$	63,830	(b)	$	177,505		4.2	%
	Bank of America N.A.		02/17/23		(195,683	)		394,066	(c)		184,050		52.3
	Morgan Stanley & Co. International PLC		02/27/23		385,513			(1,700	)(d)		396,937		7.2
	Bank of America N.A.		02/17/23		(211,402	)		544,443	(e)		404,425		61.2
				$	80,487		$	1,000,639		$	1,162,917

^(a)  In regards to total return swaps with multiple financing rate benchmarks, the Fund receives or pays the total return on a portfolio of long and short positions underlying the total return swap. In addition, the Fund pays or receives a variable rate of interest, based on a specified benchmark, plus or minus a spread in a range of19-1,550 basis points. The benchmark and spread are determined based upon the country and/or currency of the individual underlying positions. The following are the specified benchmarks used in determining the variable rate of interest:

ICE LIBOR USD 1 Week

US Federal Funds Effective Rate (continuous series)

^(b)  Amount includes $(11,616) of net dividends and financing fees.

^(c)  Amount includes $14,333 of net dividends and financing fees.

^(d)  Amount includes $(13,124) of net dividends and financing fees.

^(e)  Amount includes $(71,384) of net dividends and financing fees.

30 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Alternative Capital Strategies Fund

The following table represents the individual long and short positions and related values of the equity securities underlying the total return swap with Morgan Stanley & Co. International PLC as of December 31, 2018 expiration dates 02/27/23:

Security	Shares		Value		% of Basket Value
Reference Entity — Long
Bermuda
Assured Guaranty Ltd.		305	$	11,675		6.6	%
Canada
Goldcorp, Inc.		515		5,047		2.9
Kinross Gold Corp.		1,490		4,828		2.7
				9,875
Ireland
Seagate Technology PLC		74		2,856		1.6
United Kingdom
Noble Corp. PLC		2,278		5,968		3.3
United States
AbbVie, Inc.		3		277		0.2
Advance Auto Parts, Inc.		50		7,873		4.4
AES Corp.		1,545		22,341		12.6
Aflac, Inc.		93		4,237		2.4
Agilent Technologies, Inc.		179		12,075		6.8
Allergan PLC		78		10,426		5.9
AMC Networks, Inc., Class A		188		10,317		5.8
American Express Co.		38		3,622		2.0
American International Group, Inc.		150		5,912		3.3
Apache Corp.		253		6,641		3.7
Apple, Inc.		39		6,152		3.5
Applied Materials, Inc.		313		10,248		5.8
Boeing Co.		12		3,870		2.2
Boston Properties, Inc.		55		6,190		3.5
Bristol-Myers Squibb Co.		236		12,267		6.9
Cardinal Health, Inc.		100		4,460		2.5
Celgene Corp.		46		2,948		1.7
Chesapeake Energy Corp.		3,641		7,646		4.3
Cisco Systems, Inc.		85		3,683		2.1
Clorox Co.		28		4,316		2.4
Colgate-Palmolive Co.		309		18,392		10.4
CSX Corp.		117		7,269		4.1
DXC Technology Co.		58		3,084		1.7
Eastman Chemical Co.		135		9,870		5.6
Eaton Corp. PLC		174		11,947		6.7
Eli Lilly & Co.		34		3,935		2.2
Entergy Corp.		251		21,604		12.2
EOG Resources, Inc.		21		1,831		1.0
Flex Ltd.		1,211		9,216		5.2
Ford Motor Co.		239		1,828		1.0
Gaming and Leisure Properties, Inc.		240		7,754		4.4
Gilead Sciences, Inc.		57		3,565		2.0
H&R Block, Inc.		213		5,404		3.0
Halliburton Co.		370		9,835		5.5
HCA Healthcare, Inc.		236		29,370		16.5
Hershey Co.		29		3,108		1.8
Hilton Worldwide Holdings, Inc.		91		6,534		3.7
HollyFrontier Corp.		49		2,505		1.4
HP, Inc.		159		3,253		1.8
Illinois Tool Works, Inc.		28		3,547		2.0
Intel Corp.		142		6,664		3.8
International Business Machines Corp.		150		17,051		9.6
Juniper Networks, Inc.		428		11,518		6.5

Security	Shares			Value			% of Basket Value
United States (continued)
Kimberly-Clark Corp.		27		$	3,076			1.7	%
Kimco Realty Corp.		446			6,534			3.7
Laboratory Corp. of America Holdings		113			14,279			8.0
Lear Corp.		27			3,317			1.9
Lockheed Martin Corp.		17			4,451			2.5
LyondellBasell Industries NV, Class A		103			8,566			4.8
Mastercard, Inc., Class A		634			119,604			67.4
McDonald’s Corp.		39			6,925			3.9
McKesson Corp.		163			18,007			10.1
Microsoft Corp.		43			4,368			2.5
Mosaic Co.		156			4,557			2.6
Nordstrom, Inc.		64			2,983			1.7
Nucor Corp.		199			10,310			5.8
Occidental Petroleum Corp.		393			24,122			13.6
Omnicom Group, Inc.		63			4,614			2.6
PPL Corp.		500			14,165			8.0
Prudential Financial, Inc.		54			4,404			2.5
Royal Caribbean Cruises Ltd.		45			4,401			2.5
Schlumberger Ltd.		143			5,159			2.9
Southwest Airlines Co.		154			7,158			4.0
Steel Dynamics, Inc.		282			8,471			4.8
Toll Brothers, Inc.		298			9,813			5.5
United Continental Holdings, Inc.		66			5,526			3.1
United Parcel Service, Inc., Class B		76			7,412			4.2
VEREIT, Inc.		801			5,727			3.2
Visa, Inc., Class A		410			54,095			30.5
Walt Disney Co.		46			5,044			2.8
Waste Management, Inc.		63			5,606			3.2
Whiting Petroleum Corp.		664			15,066			8.5
					732,345
Total Reference Entity — Long					762,719
Reference Entity — Short
United Kingdom
Aon PLC		(93	)		(13,519	)		(7.6	)
Aptiv PLC		(176	)		(10,836	)		(6.1	)
Ensco PLC, Class A		(16,433	)		(58,501	)		(33.0	)
					(82,856	)
United States
AMC Entertainment Holdings, Inc., Class A Class A		(1,496	)		(18,371	)		(10.4	)
Comcast Corp., Class A		(757	)		(25,776	)		(14.5	)
ConAgra Foods, Inc.		(756	)		(16,148	)		(9.1	)
CVS Health Corp.		(1,250	)		(81,900	)		(46.1	)
Diamondback Energy, Inc.		(129	)		(11,958	)		(6.7	)
GTT Communications, Inc.		(1,852	)		(43,818	)		(24.7	)
Hertz Global Holdings, Inc.		(1,817	)		(24,802	)		(14.0	)
Match Group, Inc.		(594	)		(25,406	)		(14.3	)
Mattel, Inc.		(604	)		(6,034	)		(3.4	)
Mylan NV		(130	)		(3,562	)		(2.0	)
Omega Healthcare Investors, Inc.		(1,379	)		(48,472	)		(27.3	)
QUALCOMM, Inc.		(352	)		(20,032	)		(11.3	)
Tesla Motors, Inc.		(84	)		(27,955	)		(15.8	)
Under Armour, Inc., Class A		(1,953	)		(34,510	)		(19.4	)
ViaSat, Inc.		(1,596	)		(94,084	)		(53.0	)
Wabtec Corp.		(278	)		(19,530	)		(11.0	)
					(502,358	)
Total Reference Entity — Short					(585,214	)
Net Value of Reference Entity — Morgan Stanley & Co. International PLC				$	177,505

SCHEDULES OF INVESTMENTS 31

Schedule of Investments  (continued) December 31, 2018 BlackRock Alternative Capital Strategies Fund

The following table represents the individual long and short positions and related values of the equity securities underlying the total return swap with Bank of America N.A. as of December 31, 2018 expiration dates 02/17/23:

Security	Shares		Value		% of Basket Value
Reference Entity — Long
Bermuda
Assured Guaranty Ltd.		1,344	$	51,448		27.9	%
Canada
Goldcorp, Inc.		7,325		71,785		39.0
Kinross Gold Corp.		14,530		47,077		25.6
				118,862
Ireland
Seagate Technology PLC		655		25,277		13.7
Switzerland
Garrett Motion, Inc.		—		3		0.0
Switzerland
Transocean Ltd.		2,936		20,376		11.1
United Kingdom
Noble Corp. PLC		4,560		11,947		6.5
United States
Abbott Laboratories		540		39,058		21.2
AbbVie, Inc.		943		86,935		47.2
Advance Auto Parts, Inc.		401		63,141		34.3
AES Corp.		5,992		86,644		47.1
Aflac, Inc.		422		19,226		10.4
Agilent Technologies, Inc.		563		37,980		20.6
Allergan PLC		619		82,736		45.0
Allstate Corp.		546		45,116		24.5
AMC Networks, Inc., Class A		1,150		63,112		34.3
American Express Co.		764		72,824		39.6
American International Group, Inc.		824		32,474		17.6
Amgen, Inc.		92		17,910		9.7
Apache Corp.		3,205		84,131		45.7
Apple, Inc.		724		114,204		62.0
Applied Materials, Inc.		2,834		92,785		50.4
AutoZone, Inc.		125		104,792		56.9
Biogen, Inc.		407		122,474		66.5
Boeing Co.		58		18,705		10.2
Boston Properties, Inc.		844		94,992		51.6
Bristol-Myers Squibb Co.		2,010		104,480		56.8
Capital One Financial Corp.		400		30,236		16.4
Cardinal Health, Inc.		2,015		89,869		48.8
Caterpillar, Inc.		853		108,391		58.9
Celgene Corp.		1,423		91,200		49.6
CF Industries Holdings, Inc.		1,177		51,211		27.8
Chesapeake Energy Corp.		8,380		17,598		9.6
Chevron Corp.		858		93,342		50.7
Cisco Systems, Inc.		2,497		108,195		58.8
Clorox Co.		698		107,590		58.5
Colgate-Palmolive Co.		1,585		94,339		51.3
Costco Wholesale Corp.		118		24,038		13.1
CSX Corp.		1,678		104,254		56.6
Delta Air Lines, Inc.		1,015		50,649		27.5
DXC Technology Co.		822		43,706		23.7
Eastman Chemical Co.		1,240		90,656		49.3
Eaton Corp. PLC		1,279		87,816		47.7
eBay, Inc.		663		18,610		10.1
Eli Lilly & Co.		1,029		119,076		64.7
Entergy Corp.		1,095		94,247		51.2
EOG Resources, Inc.		201		17,529		9.5

Security	Shares			Value		% of Basket Value
United States (continued)
FirstEnergy Corp.		1,572		$	59,029		32.1	%
Flex Ltd.		2,088			15,890		8.6
Ford Motor Co.		5,726			43,804		23.8
Gaming and Leisure Properties, Inc.		2,938			94,927		51.6
General Motors Co.		539			18,030		9.8
Gilead Sciences, Inc.		257			16,075		8.7
H&R Block, Inc.		3,968			100,668		54.7
Halliburton Co.		2,676			71,128		38.6
HCA Healthcare, Inc.		614			76,412		41.5
Hershey Co.		1,047			112,217		61.0
Hilton Worldwide Holdings, Inc.		1,094			78,549		42.7
HollyFrontier Corp.		324			16,563		9.0
Home Depot, Inc.		172			29,553		16.1
HP, Inc.		5,121			104,776		56.9
Humana, Inc.		262			75,058		40.8
Illinois Tool Works, Inc.		119			15,076		8.2
Intel Corp.		2,357			110,614		60.1
International Business Machines Corp.		742			84,343		45.8
International Paper Co.		702			28,333		15.4
Juniper Networks, Inc.		1,835			49,380		26.8
Kimberly-Clark Corp.		516			58,793		31.9
Kimco Realty Corp.		2,171			31,805		17.3
Kinder Morgan, Inc.		4,020			61,828		33.6
KLA-Tencor Corp.		1,357			121,438		66.0
Kohl’s Corp.		1,850			122,729		66.7
Kroger Co.		1,060			29,150		15.8
Laboratory Corp. of America Holdings		38			4,802		2.6
Lamar Advertising Co., Class A		1,475			102,040		55.4
Lear Corp.		774			95,094		51.7
Lincoln National Corp.		1,886			96,771		52.6
Lockheed Martin Corp.		153			40,062		21.8
Lowe’s Cos., Inc.		234			21,612		11.7
LyondellBasell Industries NV, Class A		1,197			99,543		54.1
Macy’s, Inc.		3,590	��		106,910		58.1
Marathon Oil Corp.		1,424			20,420		11.1
Masco Corp.		2,779			81,258		44.1
McDonald’s Corp.		480			85,234		46.3
McKesson Corp.		844			93,237		50.7
Merck & Co., Inc.		1,345			102,771		55.8
MetLife, Inc.		2,955			121,332		65.9
Microsoft Corp.		1,160			117,821		64.0
Mosaic Co.		1,522			44,458		24.2
MSCI, Inc.		701			103,348		56.2
Murphy Oil Corp.		3,380			79,058		43.0
NetApp, Inc.		475			28,343		15.4
Nordstrom, Inc.		1,343			62,597		34.0
Norfolk Southern Corp.		810			121,127		65.8
NRG Energy, Inc.		1,930			76,428		41.5
Nucor Corp.		1,953			101,185		55.0
Occidental Petroleum Corp.		1,174			72,060		39.2
Omnicom Group, Inc.		288			21,093		11.5
Owens Corning		1,422			62,540		34.0
Philip Morris International, Inc.		355			23,700		12.9
Phillips 66		1,141			98,297		53.4
PPL Corp.		1,540			43,628		23.7
Procter & Gamble Co.		801			73,628		40.0
Progressive Corp.		771			46,514		25.3
Prudential Financial, Inc.		1,297			105,770		57.5
Range Resources Corp.		1,682			16,097		8.7
Republic Services, Inc.		1,585			114,263		62.1
Royal Caribbean Cruises Ltd.		202			19,754		10.7
S&P Global, Inc.		151			25,661		13.9

32 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Alternative Capital Strategies Fund

Security	Shares			Value			% of Basket Value
United States (continued)
Schlumberger Ltd.		871		$	31,426			17.1	%
Signet Jewelers Ltd.		2,071			65,796			35.7
Southwest Airlines Co.		368			17,105			9.3
Steel Dynamics, Inc.		1,284			38,571			21.0
Sysco Corp.		1,377			86,283			46.9
Tapestry, Inc.		581			19,609			10.7
Target Corp.		1,801			119,028			64.7
Toll Brothers, Inc.		856			28,188			15.3
Union Pacific Corp.		878			121,366			65.9
United Continental Holdings, Inc.		310			25,956			14.1
United Parcel Service, Inc., Class B		764			74,513			40.5
United Rentals, Inc.		281			28,811			15.7
VEREIT, Inc.		4,199			30,023			16.3
Verizon Communications, Inc.		853			47,956			26.1
Viacom, Inc., Class B		3,850			98,945			53.8
Voya Financial, Inc.		1,652			66,311			36.0
Walt Disney Co.		271			29,715			16.1
Waste Management, Inc.		1,289			114,708			62.3
Western Digital Corp.		552			20,407			11.1
Whiting Petroleum Corp.		167			3,789			2.1
Williams Cos., Inc.		1,041			22,954			12.5
Xilinx, Inc.		753			64,133			34.8
Yum! Brands, Inc.		1,303			119,772			65.1
					8,256,260
Total Reference Entity — Long					8,484,173
Reference Entity — Short
Canada
Canadian Natural Resources Ltd.		(791	)		(19,087	)		(10.4	)
Enbridge, Inc.		(3,640	)		(113,131	)		(61.4	)
					(132,218	)
Ireland
Endo International PLC		(7,140	)		(52,122	)		(28.3	)
Perrigo Co. PLC		(906	)		(35,108	)		(19.1	)
					(87,230	)
Mexico
Southern Copper Corp.		(1,672	)		(51,447	)		(28.0	)
Switzerland
Garrett Motion, Inc.		—			(3	)		0.0
United Kingdom
Aon PLC		(54	)		(7,849	)		(4.3	)
Aptiv PLC		(150	)		(9,236	)		(5.0	)
Ensco PLC, Class A		(4,483	)		(15,959	)		(8.7	)
Willis Towers Watson PLC		(525	)		(79,727	)		(43.3	)
					(112,771	)
United States
3M Co.		(121	)		(23,055	)		(12.5	)
Activision Blizzard, Inc.		(2,253	)		(104,922	)		(57.0	)
Altria Group, Inc.		(1,142	)		(56,403	)		(30.6	)
Amazon.com, Inc.		(15	)		(22,530	)		(12.2	)
AMC Entertainment Holdings, Inc., Class A Class A		(2,162	)		(26,549	)		(14.4	)
American Tower Corp.		(702	)		(111,049	)		(60.3	)
AmerisourceBergen Corp.		(1,293	)		(96,199	)		(52.3	)
Analog Devices, Inc.		(1,241	)		(106,515	)		(57.9	)
Anthem, Inc.		(121	)		(31,778	)		(17.3	)
Aramark		(721	)		(20,887	)		(11.3	)
Archer-Daniels-Midland Co.		(2,221	)		(90,994	)		(49.4	)
AT&T, Inc.		(2,014	)		(57,480	)		(31.2	)

Security	Shares			Value			% of Basket Value
United States (continued)
Autodesk, Inc.		(467	)	$	(60,061	)		(32.6	) %
Avnet, Inc.		(1,471	)		(53,103	)		(28.9	)
Baker Hughes a GE Co.		(957	)		(20,576	)		(11.2	)
Ball Corp.		(2,396	)		(110,168	)		(59.9	)
Becton Dickinson & Co.		(540	)		(121,673	)		(66.1	)
Berkshire Hathaway, Inc., Class B		(200	)		(40,836	)		(22.2	)
Boston Scientific Corp.		(2,630	)		(92,944	)		(50.5	)
Brighthouse Financial, Inc.		(3,282	)		(100,035	)		(54.4	)
Bunge Ltd.		(1,797	)		(96,032	)		(52.2	)
CBOE Holdings, Inc.		(1,070	)		(104,678	)		(56.9	)
CBRE Group, Inc.		(1,783	)		(71,391	)		(38.8	)
Centene Corp.		(533	)		(61,455	)		(33.4	)
Cigna Corp.		(420	)		(79,766	)		(43.3	)
Cimarex Energy Co.		(330	)		(20,345	)		(11.1	)
Citrix Systems, Inc.		(412	)		(42,214	)		(22.9	)
CME Group, Inc.		(343	)		(64,525	)		(35.1	)
Coca-Cola Co.		(1,532	)		(72,540	)		(39.4	)
Comcast Corp., Class A		(1,430	)		(48,692	)		(26.5	)
CommScope Holding Co., Inc.		(2,131	)		(34,927	)		(19.0	)
ConAgra Foods, Inc.		(1,600	)		(34,176	)		(18.6	)
Concho Resources, Inc.		(1,121	)		(115,228	)		(62.6	)
ConocoPhillips		(1,044	)		(65,093	)		(35.4	)
Constellation Brands, Inc.		(622	)		(100,030	)		(54.3	)
Continental Resources, Inc.		(417	)		(16,759	)		(9.1	)
Crown Castle International Corp.		(1,036	)		(112,541	)		(61.1	)
Crown Holdings, Inc.		(2,359	)		(98,064	)		(53.3	)
Deere & Co.		(154	)		(22,972	)		(12.5	)
Diamondback Energy, Inc.		(889	)		(82,410	)		(44.8	)
Digital Realty Trust, Inc.		(986	)		(105,058	)		(57.1	)
DISH Network Corp.		(4,473	)		(111,691	)		(60.7	)
Dollar General Corp.		(913	)		(98,677	)		(53.6	)
Dollar Tree, Inc.		(1,349	)		(121,842	)		(66.2	)
Edison International		(991	)		(56,259	)		(30.6	)
EQT Corp.		(1,331	)		(25,143	)		(13.7	)
Equifax, Inc.		(540	)		(50,290	)		(27.3	)
Equinix, Inc.		(175	)		(61,698	)		(33.5	)
Expedia, Inc.		(940	)		(105,891	)		(57.5	)
FedEx Corp.		(174	)		(28,071	)		(15.3	)
Fidelity National Information Services, Inc.		(208	)		(21,330	)		(11.6	)
Freeport-McMoRan, Inc.		(1,962	)		(20,228	)		(11.0	)
Gartner, Inc.		(800	)		(102,272	)		(55.6	)
General Mills, Inc.		(1,252	)		(48,753	)		(26.5	)
GTT Communications, Inc.		(1,531	)		(36,223	)		(19.7	)
Hertz Global Holdings, Inc.		(3,937	)		(53,740	)		(29.2	)
Hess Corp.		(2,338	)		(94,689	)		(51.4	)
Hologic, Inc.		(2,669	)		(109,696	)		(59.6	)
Host Hotels & Resorts, Inc.		(1,123	)		(18,720	)		(10.2	)
International Flavors & Fragrances, Inc.		(308	)		(41,355	)		(22.5	)
Iron Mountain, Inc.		(649	)		(21,034	)		(11.4	)
KB Home		(842	)		(16,082	)		(8.7	)
Kraft Heinz Co.		(2,221	)		(95,592	)		(51.9	)
L3 Technologies, Inc.		(184	)		(31,953	)		(17.4	)
Lennar Corp.		(1,993	)		(78,026	)		(42.4	)
Live Nation Entertainment, Inc.		(2,128	)		(104,804	)		(56.9	)
Loews Corp.		(400	)		(18,208	)		(9.9	)
Marriott International, Inc., Class A		(1,062	)		(115,291	)		(62.6	)
Marsh & McLennan Cos., Inc.		(1,376	)		(109,736	)		(59.6	)
Martin Marietta Materials, Inc.		(309	)		(53,108	)		(28.9	)
Match Group, Inc.		(1,599	)		(68,389	)		(37.2	)
Mattel, Inc.		(5,902	)		(58,961	)		(32.0	)
McCormick & Co., Inc.		(137	)		(19,076	)		(10.4	)
Medical Properties Trust, Inc.		(6,840	)		(109,987	)		(59.8	)

SCHEDULES OF INVESTMENTS 33

Schedule of Investments  (continued) December 31, 2018 BlackRock Alternative Capital Strategies Fund

Security	Shares			Value			% of Basket Value
United States (continued)
MEDNAX, Inc.		(889	)	$	(29,337	)		(15.9	) %
MGM Resorts International		(1,192	)		(28,918	)		(15.7	)
Mylan NV		(3,030	)		(83,022	)		(45.1	)
National Oilwell Varco, Inc.		(725	)		(18,633	)		(10.1	)
Netflix, Inc.		(470	)		(125,800	)		(68.4	)
Newell Rubbermaid, Inc.		(3,252	)		(60,455	)		(32.8	)
NextEra Energy, Inc.		(664	)		(115,417	)		(62.7	)
Northrop Grumman Corp.		(474	)		(116,083	)		(63.1	)
NVIDIA Corp.		(891	)		(118,949	)		(64.6	)
Omega Healthcare Investors, Inc.		(759	)		(26,679	)		(14.5	)
Oracle Corp.		(2,328	)		(105,109	)		(57.1	)
Parsley Energy, Inc., Class A		(3,677	)		(58,758	)		(31.9	)
PepsiCo, Inc.		(628	)		(69,381	)		(37.7	)
PG&E Corp.		(4,656	)		(110,580	)		(60.1	)
PolyOne Corp.		(750	)		(21,450	)		(11.7	)
Post Holdings, Inc.		(1,213	)		(108,115	)		(58.7	)
PPG Industries, Inc.		(1,165	)		(119,098	)		(64.7	)
QUALCOMM, Inc.		(1,595	)		(90,771	)		(49.3	)
Roper Industries, Inc.		(77	)		(20,522	)		(11.1	)
Sempra Energy		(1,054	)		(114,032	)		(62.0	)
Sherwin-Williams Co.		(311	)		(122,366	)		(66.5	)
Southwestern Energy Co.		(6,208	)		(21,169	)		(11.5	)
Stanley Black & Decker, Inc.		(943	)		(112,915	)		(61.3	)
Stryker Corp.		(281	)		(44,047	)		(23.9	)
Symantec Corp.		(1,069	)		(20,199	)		(11.0	)
Teleflex, Inc.		(477	)		(123,295	)		(67.0	)
Tempur Sealy International, Inc.		(1,243	)		(51,460	)		(28.0	)
Tesla Motors, Inc.		(276	)		(91,853	)		(49.9	)
Thermo Fisher Scientific, Inc.		(137	)		(30,659	)		(16.7	)
Total System Services, Inc.		(218	)		(17,721	)		(9.6	)
TransDigm Group, Inc.		(359	)		(122,082	)		(66.3	)
Triumph Group, Inc.		(2,385	)		(27,428	)		(14.9	)
Under Armour, Inc., Class A		(1,618	)		(28,590	)		(15.5	)
United States Steel Corp.		(1,344	)		(24,515	)		(13.3	)
United Technologies Corp.		(201	)		(21,403	)		(11.6	)
UnitedHealth Group, Inc.		(432	)		(107,620	)		(58.5	)
Verisk Analytics, Inc., Class A		(718	)		(78,291	)		(42.5	)
Vulcan Materials Co.		(894	)		(88,327	)		(48.0	)
Wabtec Corp.		(905	)		(63,576	)		(34.5	)
Walgreens Boots Alliance, Inc.		(363	)		(24,804	)		(13.5	)
WellCare Health Plans, Inc.		(512	)		(120,878	)		(65.7	)
Westlake Chemical Corp.		(284	)		(18,792	)		(10.2	)
Wynn Resorts Ltd.		(443	)		(43,817	)		(23.8	)
Zimmer Biomet Holdings, Inc.		(637	)		(66,070	)		(35.9	)
					(7,916,454	)
Total Reference Entity — Short					(8,300,123	)
Net Value of Reference Entity — Bank of America N.A.				$	184,050

The following table represents the individual long and short positions and related values of the equity securities underlying the total return swap with Morgan Stanley & Co. International PLC as of December 31, 2018 expiration dates 02/27/23:

Security	Shares		Value		% of Basket Value
Reference Entity — Long
Canada
Barrick Gold Corp.		2,312	$	31,304		7.9	%

Security	Shares		Value		% of Basket Value
Canada (continued)
Encana Corp.		9,869	$	57,043		14.3	%
Rogers Communications, Inc., Class B		302		15,481		3.9
				103,828
United States
AES Corp.		6,246		90,317		22.7
Air Products & Chemicals, Inc.		32		5,122		1.3
American Express Co.		307		29,263		7.4
Anadarko Petroleum Corp.		300		13,152		3.3
Aon PLC		120		17,443		4.4
Apache Corp.		1,000		26,250		6.6
AvalonBay Communities, Inc.		40		6,962		1.8
Bausch Health Cos., Inc.		178		3,288		0.8
BorgWarner, Inc.		110		3,821		1.0
Boston Properties, Inc.		83		9,342		2.3
Bristol-Myers Squibb Co.		80		4,158		1.0
CBS Corp., Class B		535		23,390		5.9
Cigna Corp.		179		33,996		8.6
Clorox Co.		37		5,703		1.4
Colgate-Palmolive Co.		1,015		60,413		15.2
Costco Wholesale Corp.		120		24,445		6.2
Devon Energy Corp.		281		6,334		1.6
Duke Energy Corp.		54		4,660		1.2
Eli Lilly & Co.		205		23,723		6.0
Entergy Corp.		464		39,936		10.1
Exelon Corp.		747		33,690		8.5
Exxon Mobil Corp.		68		4,637		1.2
First Data Corp., Class A		2,244		37,946		9.6
Freeport-McMoRan, Inc.		1,391		14,341		3.6
Goodyear Tire & Rubber Co.		837		17,083		4.3
Halliburton Co.		1,218		32,374		8.2
Hartford Financial Services Group, Inc.		100		4,445		1.1
HCP, Inc.		798		22,288		5.6
HD Supply Holdings, Inc.		1,293		48,513		12.2
Hershey Co.		204		21,865		5.5
Home Depot, Inc.		458		78,694		19.8
Host Hotels & Resorts, Inc.		1,427		23,788		6.0
Intel Corp.		413		19,382		4.9
Johnson & Johnson		92		11,873		3.0
Johnson Controls International PLC		324		9,607		2.4
Lockheed Martin Corp.		63		16,496		4.2
Loews Corp.		509		23,170		5.8
Louisiana-Pacific Corp.		800		17,776		4.5
McKesson Corp.		39		4,308		1.1
Murphy Oil Corp.		290		6,783		1.7
Newmont Mining Corp.		640		22,176		5.6
Norfolk Southern Corp.		68		10,169		2.6
Olin Corp.		831		16,711		4.2
Omnicom Group, Inc.		694		50,829		12.8
Packaging Corp. of America		55		4,590		1.2
Pfizer, Inc.		26		1,135		0.3
Philip Morris International, Inc.		146		9,747		2.5
Raytheon Co.		288		44,165		11.1
Republic Services, Inc.		292		21,050		5.3
Simon Property Group, Inc.		211		35,446		8.9
Target Corp.		156		10,310		2.6
TJX Cos., Inc.		310		13,869		3.5
Toll Brothers, Inc.		1,348		44,390		11.2
United Technologies Corp.		248		26,407		6.6
Viacom, Inc., Class B		360		9,252		2.3
Walmart, Inc.		185		17,233		4.3
Walt Disney Co.		106		11,623		2.9
Waste Management, Inc.		374		33,282		8.4

34 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Alternative Capital Strategies Fund

Security	Shares			Value			% of Basket Value
United States (continued)
Westrock Co.		624		$	23,562			5.9	%
Weyerhaeuser Co.		385			8,416			2.1
Yum! Brands, Inc.		68			6,251			1.6
					1,301,390
Total Reference Entity — Long					1,405,218
Reference Entity — Short
United States
Archer-Daniels-Midland Co.		(1,603	)		(65,675	)		(16.6	)
Carnival Corp.		(513	)		(25,291	)		(6.4	)
Comcast Corp., Class A		(3,055	)		(104,023	)		(26.2	)
ConAgra Foods, Inc.		(197	)		(4,208	)		(1.1	)
CVS Health Corp.		(968	)		(63,423	)		(16.0	)
Dominion Resources, Inc.		(1,528	)		(109,191	)		(27.5	)
Expedia, Inc.		(181	)		(20,390	)		(5.1	)
General Dynamics Corp.		(356	)		(55,967	)		(14.1	)
HCA Holdings, Inc.		(1,025	)		(127,561	)		(32.1	)
Sherwin-Williams Co.		(313	)		(123,153	)		(31.0	)
Southern Co.		(2,421	)		(106,330	)		(26.8	)
Stanley Black & Decker, Inc.		(1,025	)		(122,733	)		(30.9	)
Western Union Co.		(4,709	)		(80,336	)		(20.2	)
Total Reference Entity — Short					(1,008,281	)
Net Value of Reference Entity — Morgan Stanley & Co. International PLC				$	396,937

The following table represents the individual long and short positions and related values of the equity securities underlying the total return swap with Bank of America N.A. as of December 31, 2018 expiration dates 02/17/23:

Security	Shares		Value		% of Basket Value
Reference Entity — Long
Canada
Barrick Gold Corp.		6,576	$	89,039		22.0	%
Canadian National Railway Co.		1,710		126,728		31.4
Encana Corp.		11,139		64,383		15.9
Rogers Communications, Inc., Class B		2,154		110,414		27.3
Suncor Energy, Inc.		4,540		126,984		31.4
Teck Resources Ltd., Class B		5,614		120,926		29.9
				638,474
Ireland
Medtronic PLC		1,410		128,253		31.7
United States
Advanced Micro Devices, Inc.		5		92		0.0
AES Corp.		1,381		19,969		4.9
Air Products & Chemicals, Inc.		739		118,277		29.2
Allstate Corp.		1,142		94,363		23.3
American Express Co.		1,026		97,798		24.2
American International Group, Inc.		848		33,420		8.3
Amgen, Inc.		236		45,942		11.4
Anadarko Petroleum Corp.		2,611		114,466		28.3
Aon PLC		756		109,892		27.2
Apache Corp.		3,774		99,068		24.5
AutoZone, Inc.		151		126,589		31.3
AvalonBay Communities, Inc.		689		119,920		29.6
Bausch Health Cos., Inc.		2,249		41,539		10.3

Security	Shares		Value		% of Basket Value
United States (continued)
BorgWarner, Inc.		3,077	$	106,895		26.4	%
Boston Properties, Inc.		1,041		117,165		29.0
Boston Scientific Corp.		2,393		84,569		20.9
Boyd Gaming Corp.		2,148		44,635		11.0
Bristol-Myers Squibb Co.		2,389		124,180		30.7
CBS Corp., Class B		2,362		103,267		25.5
CenterPoint Energy, Inc.		4,354		122,913		30.4
Cigna Corp.		463		87,933		21.7
Clorox Co.		785		121,000		29.9
Coca-Cola Co.		2,455		116,244		28.7
Colgate-Palmolive Co.		1,095		65,174		16.1
Corning, Inc.		1,911		57,731		14.3
Costco Wholesale Corp.		503		102,466		25.3
CSX Corp.		518		32,183		8.0
Darden Restaurants, Inc.		1,280		127,821		31.6
Devon Energy Corp.		3,488		78,620		19.4
Dover Corp.		857		60,804		15.0
Duke Energy Corp.		1,341		115,728		28.6
Eaton Corp. PLC		1,651		113,358		28.0
Eli Lilly & Co.		897		103,801		25.7
Entergy Corp.		260		22,378		5.5
Exelon Corp.		1,261		56,871		14.1
Exxon Mobil Corp.		1,777		121,174		30.0
First Data Corp., Class A		4,414		74,641		18.5
FirstEnergy Corp.		950		35,673		8.8
Freeport-McMoRan, Inc.		7,468		76,995		19.0
Goodyear Tire & Rubber Co.		4,781		97,580		24.1
Halliburton Co.		2,842		75,540		18.7
Hartford Financial Services Group, Inc.		2,756		122,504		30.3
HCP, Inc.		3,239		90,465		22.4
HD Supply Holdings, Inc.		1,900		71,288		17.6
Hershey Co.		980		105,036		26.0
Home Depot, Inc.		282		48,453		12.0
Host Hotels & Resorts, Inc.		4,282		71,381		17.6
HP, Inc.		4,477		91,599		22.6
Humana, Inc.		152		43,545		10.8
Intel Corp.		2,203		103,387		25.6
International Paper Co.		1,602		64,657		16.0
JetBlue Airways Corp.		4,932		79,208		19.6
Johnson & Johnson		792		102,208		25.3
Johnson Controls International PLC		3,923		116,317		28.8
Kimberly-Clark Corp.		1,074		122,372		30.3
Kroger Co.		3,450		94,875		23.5
L Brands, Inc.		4,939		126,784		31.3
Lockheed Martin Corp.		403		105,522		26.1
Loews Corp.		1,942		88,400		21.9
Louisiana-Pacific Corp.		4,930		109,545		27.1
Lowe’s Cos., Inc.		1,338		123,578		30.6
Marathon Oil Corp.		8,931		128,071		31.7
McDonald’s Corp.		717		127,318		31.5
McKesson Corp.		173		19,111		4.7
Mohawk Industries, Inc.		181		21,170		5.2
Murphy Oil Corp.		5,147		120,388		29.8
Newmont Mining Corp.		2,878		99,723		24.7
Norfolk Southern Corp.		782		116,940		28.9
Nucor Corp.		2,424		125,587		31.1
Olin Corp.		4,819		96,910		24.0
Omnicom Group, Inc.		909		66,575		16.5
Oracle Corp.		2,402		108,450		26.8
Packaging Corp. of America		1,473		122,937		30.4
PepsiCo, Inc.		660		72,917		18.0
Pfizer, Inc.		2,070		90,356		22.3
Philip Morris International, Inc.		1,724		115,094		28.5

SCHEDULES OF INVESTMENTS 35

Schedule of Investments  (continued) December 31, 2018 BlackRock Alternative Capital Strategies Fund

Security	Shares			Value			% of Basket Value
United States (continued)
Procter & Gamble Co.		1,380		$	126,850			31.4	%
PulteGroup, Inc.		2,651			68,899			17.0
Quest Diagnostics, Inc.		1,080			89,932			22.2
Raytheon Co.		476			72,995			18.0
Republic Services, Inc.		1,457			105,035			26.0
Ryder System, Inc.		2,585			124,468			30.8
Southwest Airlines Co.		2,293			106,579			26.4
Target Corp.		1,781			117,706			29.1
TEGNA, Inc.		8,390			91,199			22.5
TJX Cos., Inc.		2,561			114,579			28.3
Toll Brothers, Inc.		2,419			79,658			19.7
Union Pacific Corp.		920			127,172			31.4
United Parcel Service, Inc., Class B		270			26,333			6.5
United Technologies Corp.		947			100,837			24.9
Unum Group		4,337			127,421			31.5
Viacom, Inc., Class B		3,672			94,370			23.3
Walmart, Inc.		1,145			106,657			26.4
Walt Disney Co.		1,031			113,049			27.9
Waste Management, Inc.		1,057			94,062			23.3
Welltower, Inc.		1,027			71,284			17.6
Westrock Co.		2,751			103,878			25.7
Weyerhaeuser Co.		3,527			77,100			19.1
Xerox Corp.		6,261			123,717			30.6
Yum! Brands, Inc.		1,305			119,956			29.7
					9,165,081
Total Reference Entity — Long					9,931,808
Reference Entity — Short
Canada
Canadian Natural Resources Ltd.		(3,906	)		(94,252	)		(23.3	)
Enbridge, Inc.		(4,064	)		(126,309	)		(31.2	)
					(220,561	)
Switzerland
Transocean Ltd.		(17,979	)		(124,774	)		(30.9	)
United States
3M Co.		(368	)		(70,119	)		(17.3	)
Abbott Laboratories		(1,766	)		(127,735	)		(31.6	)
Advanced Micro Devices, Inc.		(1,967	)		(36,311	)		(9.0	)
Ally Financial, Inc.		(4,746	)		(107,544	)		(26.6	)
Altria Group, Inc.		(2,216	)		(109,448	)		(27.1	)
AmerisourceBergen Corp.		(1,699	)		(126,406	)		(31.3	)
Anthem, Inc.		(485	)		(127,376	)		(31.5	)
Archer-Daniels-Midland Co.		(1,476	)		(60,472	)		(15.0	)
Arrow Electronics, Inc.		(1,801	)		(124,179	)		(30.7	)
AT&T, Inc.		(4,412	)		(125,918	)		(31.1	)
Avis Budget Group, Inc.		(1,463	)		(32,888	)		(8.1	)
Avnet, Inc.		(3,500	)		(126,350	)		(31.2	)
Baxter International, Inc.		(1,751	)		(115,251	)		(28.5	)
Beazer Homes USA, Inc.		(2,364	)		(22,411	)		(5.5	)
Berkshire Hathaway, Inc., Class B		(606	)		(123,733	)		(30.6	)
Best Buy Co., Inc.		(2,447	)		(129,593	)		(32.0	)
Boeing Co.		(387	)		(124,807	)		(30.9	)
Brunswick Corp.		(1,028	)		(47,751	)		(11.8	)
Campbell Soup Co.		(3,757	)		(123,943	)		(30.6	)
Capital One Financial Corp.		(440	)		(33,260	)		(8.2	)
Cardinal Health, Inc.		(2,278	)		(101,599	)		(25.1	)
Caterpillar, Inc.		(1,000	)		(127,070	)		(31.4	)
Chevron Corp.		(506	)		(55,048	)		(13.6	)
Cisco Systems, Inc.		(733	)		(31,761	)		(7.9	)
CMS Energy Corp.		(1,589	)		(78,894	)		(19.5	)

Security	Shares			Value			% of Basket Value
United States (continued)
Comcast Corp., Class A		(601	)	$	(20,464	)		(5.1	) %
ConAgra Foods, Inc.		(5,733	)		(122,457	)		(30.3	)
ConocoPhillips		(1,359	)		(84,734	)		(21.0	)
Constellation Brands, Inc.		(771	)		(123,992	)		(30.7	)
Danaher Corp.		(1,232	)		(127,044	)		(31.4	)
Deere & Co.		(865	)		(129,032	)		(31.9	)
DISH Network Corp.		(5,035	)		(125,724	)		(31.1	)
DR Horton, Inc.		(3,632	)		(125,885	)		(31.1	)
Eastman Chemical Co.		(1,536	)		(112,297	)		(27.8	)
Expedia, Inc.		(928	)		(104,539	)		(25.8	)
FedEx Corp.		(312	)		(50,335	)		(12.4	)
Ford Motor Co.		(5,462	)		(41,784	)		(10.3	)
Gap, Inc.		(3,962	)		(102,061	)		(25.2	)
General Electric Co.		(4,109	)		(31,105	)		(7.7	)
General Mills, Inc.		(3,241	)		(126,205	)		(31.2	)
General Motors Co.		(3,197	)		(106,940	)		(26.4	)
Hasbro, Inc.		(1,549	)		(125,856	)		(31.1	)
Hess Corp.		(3,080	)		(124,740	)		(30.8	)
Honeywell International, Inc.		(747	)		(98,694	)		(24.4	)
International Business Machines Corp.		(1,111	)		(126,287	)		(31.2	)
Kellogg Co.		(1,431	)		(81,581	)		(20.2	)
Kimco Realty Corp.		(3,109	)		(45,547	)		(11.3	)
Kohl’s Corp.		(1,932	)		(128,169	)		(31.7	)
Kraft Heinz Co.		(2,883	)		(124,084	)		(30.7	)
Lennar Corp.		(2,439	)		(95,487	)		(23.6	)
Lincoln National Corp.		(958	)		(49,155	)		(12.2	)
Macy’s, Inc.		(1,677	)		(49,941	)		(12.3	)
Marriott International, Inc., Class A		(1,143	)		(124,084	)		(30.7	)
Marsh & McLennan Cos., Inc.		(1,590	)		(126,802	)		(31.4	)
Mattel, Inc.		(8,932	)		(89,231	)		(22.1	)
MDC Holdings, Inc.		(2,419	)		(67,998	)		(16.8	)
MetLife, Inc.		(567	)		(23,281	)		(5.8	)
MGIC Investment Corp.		(10,033	)		(104,945	)		(26.0	)
MGM Resorts International		(1,213	)		(29,427	)		(7.3	)
Molson Coors Brewing Co.		(1,973	)		(110,804	)		(27.4	)
Mondelez International, Inc.		(3,147	)		(125,974	)		(31.1	)
Motorola Solutions, Inc.		(1,118	)		(128,615	)		(31.8	)
Nabors Industries Ltd.		(37,774	)		(75,548	)		(18.7	)
Navient Corp.		(4,835	)		(42,596	)		(10.5	)
Newell Rubbermaid, Inc.		(6,839	)		(127,137	)		(31.4	)
Nordstrom, Inc.		(2,235	)		(104,173	)		(25.8	)
Northrop Grumman Corp.		(504	)		(123,430	)		(30.5	)
NRG Energy, Inc.		(1,855	)		(73,458	)		(18.2	)
Occidental Petroleum Corp.		(1,023	)		(62,792	)		(15.5	)
OneMain Holdings, Inc.		(3,272	)		(79,477	)		(19.7	)
ONEOK, Inc.		(2,370	)		(127,862	)		(31.6	)
PPG Industries, Inc.		(1,240	)		(126,765	)		(31.3	)
Prudential Financial, Inc.		(1,553	)		(126,647	)		(31.3	)
Radian Group, Inc.		(6,902	)		(112,917	)		(27.9	)
Realogy Holdings Corp.		(7,633	)		(112,052	)		(27.7	)
Royal Caribbean Cruises Ltd.		(1,273	)		(124,487	)		(30.8	)
RPM International, Inc.		(1,814	)		(106,627	)		(26.4	)
Sealed Air Corp.		(3,339	)		(116,331	)		(28.8	)
Sempra Energy		(1,170	)		(126,582	)		(31.3	)
SITE Centers Corp.		(3,014	)		(33,365	)		(8.3	)
Tesla Motors, Inc.		(386	)		(128,461	)		(31.8	)
Texas Instruments, Inc.		(1,339	)		(126,535	)		(31.3	)
Textron, Inc.		(1,788	)		(82,230	)		(20.3	)
Travelers Cos., Inc.		(903	)		(108,134	)		(26.7	)
Tyson Foods, Inc., Class A		(2,400	)		(128,160	)		(31.7	)
United Rentals, Inc.		(374	)		(38,346	)		(9.5	)
United States Steel Corp.		(4,976	)		(90,762	)		(22.4	)

36 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Alternative Capital Strategies Fund

Security	Shares			Value			% of Basket Value
United States (continued)
UnitedHealth Group, Inc.		(510	)	$	(127,051	)		(31.4	) %
Uniti Group, Inc.		(8,010	)		(124,716	)		(30.8	)
Universal Health Services, Inc.		(913	)		(106,419	)		(26.3	)
Valero Energy Corp.		(1,710	)		(128,199	)		(31.7	)
Vulcan Materials Co.		(777	)		(76,768	)		(19.0	)
Whirlpool Corp.		(970	)		(103,664	)		(25.6	)
Whiting Petroleum Corp.		(5,570	)		(126,383	)		(31.3	)
Williams Cos., Inc.		(3,574	)		(78,807	)		(19.5	)
					(9,182,048	)
Total Reference Entity — Short					(9,527,383	)
Net Value of Reference Entity — Bank of America N.A.				$	404,425

Balances Reported in the Statements of Assets and Liabilities for Centrally Cleared Swaps and OTC Swaps

	Swap Premiums Paid		Swap Premiums Received			Unrealized Appreciation		Unrealized Depreciation
Centrally Cleared Swaps(a)	$	45,743	$	(139	)	$	32,127	$	(56,106	)
OTC Swaps		—		—			1,002,339		(14,755	)

^(a)  Includes cumulative appreciation (depreciation) on centrally cleared swaps, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities and is net of any previously paid (received) swap premium amounts.

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
Net unrealized appreciation(a)	$	—	$	—	$	—	$	—	$	76,182	$	—	$	76,182
Forward foreign currency exchange contracts
Unrealized appreciation on forward foreign currency exchange		—		—		—		96		—		—		96
Swaps — centrally cleared
Net unrealized appreciation(a)		—		—		—		—		32,127		—		32,127
Swaps — OTC
Unrealized appreciation on OTC swaps; Swap premiums paid		—		—		1,002,339		—		—		—		1,002,339
	$	—	$	—	$	1,002,339	$	96	$	108,309	$	—	$	1,110,744
Liabilities — Derivative Financial Instruments
Futures contracts
Net unrealized depreciation(a)	$	—	$	—	$	—	$	—	$	56,942	$	—	$	56,942
Forward foreign currency exchange contracts
Unrealized depreciation on forward foreign currency exchange		—		—		—		32		—		—		32
Swaps — centrally cleared
Net unrealized depreciation(a)		—		27,323		—		—		28,783		—		56,106
Swaps — OTC
Unrealized depreciation on OTC swaps; Swap premiums received		—		—		1,700		—		13,055		—		14,755
	$	—	$	27,323	$	1,700	$	32	$	98,780	$	—	$	127,835

^(a)  Includes cumulative appreciation (depreciation) on futures contracts and centrally cleared swaps, if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

SCHEDULES OF INVESTMENTS 37

Schedule of Investments  (continued) December 31, 2018 BlackRock Alternative Capital Strategies Fund

For the year ended December 31, 2018, 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	$	—	$	—		$	—		$	—	$	71,191		$	—	$	71,191
Forward foreign currency exchange contracts		—		—			—			11		—			—		11
Swaps		—		(1,588	)		1,378,566			—		26,999			—		1,403,977
	$	—	$	(1,588	)	$	1,378,566		$	11	$	98,190		$	—	$	1,475,179
Net Change in Unrealized Appreciation (Depreciation) on:
Futures contracts	$	—	$	—		$	—		$	—	$	21,885		$	—	$	21,885
Forward foreign currency exchange contracts		—		—			—			105		—			—		105
Swaps		—		(31,463	)		(440,691	)		—		(10,186	)		—		(482,340	)
	$	—	$	(31,463	)	$	(440,691	)	$	105	$	11,699		$	—	$	(460,350	)

Average Quarterly Balances of Outstanding Derivative Financial Instruments

Futures contracts:
Average notional value of contracts — long	$	2,722,938
Average notional value of contracts — short	$	3,976,684
Foreign currency exchange contracts:
Average USD amount purchased	$	8,799
Average USD amount sold		—	(a)
Credit default swaps:
Average notional value — buy protection	$	233,125
Average notional value — sell protection	$	721,250
Interest rate swaps:
Average notional value — pay fixed rate	$	2,332,802
Average notional value — receives fixed rate	$	2,416,949
Total return swaps:
Average notional amount	$	369,997

^(a)  Derivative not held atquarter-end. The risk exposure table serves as an indicator of activity during the period.

Derivative Financial Instruments — Offsetting of Period End

	Assets			Liabilities
Futures contracts	$	12,568		$	2,060
Swaps — Centrally cleared		—			160
Forward foreign currency exchange contracts		96			32
Swaps — OTC(a)		1,002,339			14,755
Total derivative assets and liabilities in the Statements of Assets and Liabilities	$	1,015,003		$	17,007
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)		(12,568	)		(2,220	)
Total derivative assets and liabilities subject to an MNA	$	1,002,435		$	14,787

^(a)  Includes unrealized appreciation (depreciation) on OTC swaps and swap premiums (paid/received) in the Statements of Assets and Liabilities.

The following table presents the Fund’s derivative assets (and liabilities) by counterparty net of amounts available for offset under an MNA and net of the related collateral received (and pledged) by the Fund:

Counterparty	Derivative Assets Subject to an MNA by Counterparty		Derivatives Available for Offset (a)			Non-cash Collateral Received		Cash Collateral Received (b)			Net Amount of Derivative Assets  (c)
Bank of America N.A.	$	938,509	$	(828	)	$	—	$	—		$	937,681
JPMorgan Chase Bank N.A.		96		—			—		(96	)		—
Morgan Stanley & Co. International PLC		63,830		(1,700	)		—		(62,130	)		—
	$	1,002,435	$	(2,528	)	$	—	$	(62,226	)	$	937,681

38 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Schedule of Investments  (continued) December 31, 2018 BlackRock Alternative Capital Strategies Fund

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.	$	828	$	(828	)	$	—	$	—	$	—
Citibank N.A.		1,901		—			—		—		1,901
Deutsche Bank AG		10,326		—			—		—		10,326
Morgan Stanley & Co. International PLC		1,700		(1,700	)		—		—		—
State Street Bank and Trust Co.		32		—			—		—		32
	$	14,787	$	(2,528	)	$	—	$	—	$	12,259

^(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.

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:

	Level 1			Level 2			Level 3		Total
Assets:
Investments:
Common Stocks	$	3,331,891		$	—		$	—	$	3,331,891
Asset-Backed Securities		—			5,299,069			—		5,299,069
Corporate Bonds		—			16,418,224			—		16,418,224
Non-Agency Mortgage-Backed Securities		—			533,165			—		533,165
U.S. Government Sponsored Agency Securities		—			12,888,748			—		12,888,748
Short-Term Securities		5,039,873			—			—		5,039,873
Liabilities:
Investments:
TBA Sale Commitments		—			(124,383	)		—		(124,383	)
	$	8,371,764		$	35,014,823		$	—	$	43,386,587
Derivative Financial Instruments(a)
Assets:
Equity contracts	$	—		$	1,002,339		$	—	$	1,002,339
Forward Foreign Currency Exchange Contracts		—			96			—		96
Interest rate contracts		76,182			32,127			—		108,309
Liabilities:
Credit contracts					(27,226	)				(27,226	)
Equity contracts					(1,700	)				(1,700	)
Forward Foreign Currency Exchange Contracts		—			(32	)		—		(32	)
Interest rate contracts		(56,942	)		(41,935	)		—		(98,877	)
	$	19,240		$	963,669		$	—	$	982,909

^(a)  Derivative financial instruments are swaps, futures contracts and forward foreign currency exchange contracts. Swaps, futures contracts and forward foreign currency exchange contracts are valued at the unrealized appreciation (depreciation) on the instrument.

During the year ended December 31, 2018, there were no transfers between levels.

See notes to financial statements.

SCHEDULES OF INVESTMENTS 39

Statements of Assets and Liabilities

December 31, 2018

	BlackRock Emerging Markets Equity Strategies Fund			iShares Short-Term TIPS Bond Index Fund			BlackRock Alternative Capital Strategies Fund
ASSETS
Investments at value — unaffiliated(a)	$	12,184,282		$	3,234,573		$	38,471,097
Investments at value — affiliated(b)		768,951			51,079			5,039,873
Cash		—			—			1,391
Cash pledged:
Collateral — OTC derivatives		—			—			350,000
Futures contracts		—			—			103,683
Centrally cleared swaps		—			—			83,000
Foreign currency at value(c)		34,696			—			150,698
Receivables:
Interest — unaffiliated		1,021			4,537			243,738
TBA sale commitments		—			—			123,066
Capital shares sold		65,778			937			80,716
Investments sold		930,520			—			33,897
From the Manager		24,553			10,931			75,079
Variation margin on futures contracts		—			—			12,568
Dividends — unaffiliated		65,894			—			8,953
Dividends — affiliated		—			114			3,289
Swaps		64,748			—			—
Unrealized appreciation on:
OTC swaps		55,968			—			1,002,339
Forward foreign currency exchange contracts		—			—			96
Prepaid expenses		9,595			32,603			14,585
Total assets		14,206,006			3,334,774			45,798,068
LIABILITIES
Cash received as collateral for OTC derivatives		—			—			110,000
Payables:
Investments purchased		5,116			20,075			9,401,338
Capital shares redeemed		8,064			127			231,979
Other accrued expenses		86,924			19,885			96,631
Trustees’ and Officer’s fees		1,685			—			1,757
Service and distribution fees		333			109			627
Income dividend distributions		—			2,450			—
Swaps		102,005			—			—
Administration fees		218			—			—
Variation margin on futures contracts		—			—			2,060
Variation margin on centrally cleared swaps		—			—			160
Board realignment and consolidation		1,452			1,979			54,245
TBA sale commitments at value(d)		—			—			124,383
Unrealized depreciation on:
OTC swaps		151,743			—			14,755
Forward foreign currency exchange contracts		—			—			32
Total liabilities		357,540			44,625			10,037,967
NET ASSETS	$	13,848,466		$	3,290,149		$	35,760,101
NET ASSETS CONSIST OF :
Paid-in capital	$	16,128,923		$	3,420,876		$	37,406,555
Accumulated loss		(2,280,457	)		(130,727	)		(1,646,454	)
NET ASSETS	$	13,848,466		$	3,290,149		$	35,760,101

See notes to financial statements.

40 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statements of Assets and Liabilities  (continued)

December 31, 2018

	BlackRock Emerging Markets Equity Strategies Fund		iShares Short-Term TIPS Bond Index Fund		BlackRock Alternative Capital Strategies Fund
Institutional
Net assets	$	5,630,993	$	976,349	$	32,960,947
Shares outstanding(e)		590,711		100,214		3,481,650
Net asset value	$	9.53	$	9.74	$	9.47
Investor A
Net assets	$	1,161,918	$	525,918	$	2,724,584
Shares outstanding(e)		122,527		53,999		287,940
Net asset value	$	9.48	$	9.74	$	9.46
Investor C
Net assets	$	81,052	$	—	$	74,570
Shares outstanding(e)		8,494		—		7,872
Net asset value	$	9.54	$	—	$	9.47
Class K
Net assets	$	6,974,503	$	1,787,882	$	—
Shares outstanding(e)		732,192		183,256		—
Net asset value	$	9.53	$	9.76	$	—
(a) Investments at cost — unaffiliated	$	13,175,502	$	3,278,105	$	39,035,670
(b) Investments at cost — affiliated	$	847,158	$	51,079	$	5,039,873
(c) Foreign currency at cost	$	34,719	$	—	$	154,534
(d) Proceeds from TBA sale commitments	$	—	$	—	$	123,066
(e) Unlimited number of shares authorized, $0.001 par value.

See notes to financial statements.

FINANCIAL STATEMENTS 41

Statements of Operations

Year Ended December 31, 2018

	BlackRock Emerging Markets Equity Strategies Fund			iShares Short-Term TIPS Bond Index Fund			BlackRock Alternative Capital Strategies Fund
INVESTMENT INCOME
Interest — unaffiliated	$	—		$	88,374	(a)	$	1,043,841
Dividends — unaffiliated		734,727	(b)		—			110,060
Dividends — affiliated		25,168			1,187			26,413
Foreign taxes withheld		(58,555	)		—			—
Total investment income		701,340			89,561			1,180,314
EXPENSES
Investment advisory		254,623			343			244,858
Administration		10,822			—			13,008
Administration — class specific		5,092			—			6,122
Service and distribution — class specific		1,875			865			4,946
Transfer agent — class specific		1,415			3,419			5,709
Trustees and Officer		10,551			10,277			10,725
Custodian		119,177			670			38,711
Professional		127,394			73,873			110,624
Accounting services		45,302			4,509			57,994
Registration		55,063			47,909			42,550
Printing		35,744			29,154			40,270
Board realignment and consolidation		1,463			1,979			54,245
Miscellaneous		17,140			12,244			90,149
Total expenses		685,661			185,242			719,911
Less:
Fees waived and/or reimbursed by the Manager		(351,611	)		(178,843	)		(399,298	)
Fees waived and/or reimbursed by the Administrator		(5,840	)		—			(13,008	)
Fees waived and/or reimbursed by Administrator — class specific		(1,599	)		—			(6,122	)
Transfer agent fees waived and/or reimbursed — class specific		(394	)		(2,668	)		(5,709	)
Total expenses after fees waived and/or reimbursed		326,217			3,731			295,774
Net investment income		375,123			85,830			884,540
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		2,056,591			(73,767	)		(247,085	)
Investments — affiliated		(29,989	)		—			—
Futures contracts		41,212			—			71,191
Forward foreign currency exchange contracts		1,572			—			11
Foreign currency transactions		(94,079	)		—			(2,902	)
Swaps		2,561,089			—			1,403,977
		4,536,396			(73,767	)		1,225,192
Net change in unrealized appreciation (depreciation) on:
Investments — unaffiliated		(3,721,049	)		3,041			(1,097,427	)
Investments — affiliated		(78,207	)		—			—
Futures contracts		8,244			—			21,885
Forward foreign currency exchange contracts		—			—			105
Foreign currency translations		1,512			—			(4,212	)
Swaps		44,342			—			(482,340	)
		(3,745,158	)		3,041			(1,561,989	)
Net realized and unrealized gain (loss)		791,238			(70,726	)		(336,797	)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	1,166,361		$	15,104		$	547,743

^(a)  Includes net inflationary and deflationary adjustments. See Note 4 of the Notes to Financial Statements.

^(b)  Includesnon-recurring dividends in the amount of $67,043.

See notes to financial statements.

42 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Statements of Changes in Net Assets

	BlackRock Emerging Markets Equity Strategies Fund						iShares Short-Term TIPS Bond Index Fund
	Year Ended December 31,						Year Ended December 31,
	2018			2017			2018			2017
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income	$	375,123		$	376,686		$	85,830		$	111,774
Net realized gain (loss)		4,536,396			2,817,630			(73,767	)		(13,522	)
Net change in unrealized appreciation (depreciation)		(3,745,158	)		2,554,055			3,041			(51,869	)
Net increase in net assets resulting from operations		1,166,361			5,748,371			15,104			46,383
DISTRIBUTIONS TO SHAREHOLDERS(a)(b)
Institutional		(1,397,181	)		(5,931	)		(46,383	)		(47,252	)
Investor A		(232,916	)		(2,244,938	)		(7,691	)		(2,451	)
Investor B		(20,011	)		—			—			—
Investor C		—			(5,167	)		—			—
Class K		(1,760,590	)		(533,707	)		(31,488	)		(62,737	)
From return of capital:
Institutional		—			—			—			(991	)
Investor A		—			—			—			(55	)
Investor B		—			—			—			—
Investor C		—			—			—			—
Class K		—			—			—			(1,123	)
Decrease in net assets resulting from distributions to shareholders		(3,410,698	)		(2,789,743	)		(85,562	)		(114,609	)
CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net assets derived from capital share transactions		(27,821,715	)		34,502,944			(1,380,816	)		3,367,005
NET ASSETS(b)
Total increase (decrease) in net assets		(30,066,052	)		37,461,572			(1,451,274	)		3,298,779
Beginning of year		43,914,518			6,452,946			4,741,423			1,442,644
End of year	$	13,848,466		$	43,914,518		$	3,290,149		$	4,741,423

^(a)  Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

^(b)  Prior year distribution character information and undistributed (distributions in excess of) net investment income has been modified or removed to conform with current year RegulationS-X presentation changes. Refer to Note 12 for this prior year information.

See notes to financial statements.

FINANCIAL STATEMENTS 43

Statements of Changes in Net Assets  (continued)

	BlackRock Alternative Capital Strategies Fund
	Year Ended December 31,
	2018			2017
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income	$	884,540		$	601,158
Net realized gain		1,225,192			584,379
Net change in unrealized appreciation (depreciation)		(1,561,989	)		1,462,130
Net increase in net assets resulting from operations		547,743			2,647,667
DISTRIBUTIONS TO SHAREHOLDERS(a)(b)
Institutional		(2,551,421	)		(1,087,004	)
Investor A		(151,678	)		(59,416	)
Investor C		(5,147	)		(2,177	)
Decrease in net assets resulting from distributions to shareholders		(2,708,246	)		(1,148,597	)
CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net assets derived from capital share transactions		9,056,907			(855,028	)
NET ASSETS(b)
Total increase in net assets		6,896,404			644,042
Beginning of year		28,863,697			28,219,655
End of year	$	35,760,101		$	28,863,697

^(a)  Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

^(b)  Prior year distribution character information and undistributed (distributions in excess of) net investment income has been modified or removed to conform with current year RegulationS-X presentation changes. Refer to Note 12 for this prior year information.

See notes to financial statements.

44 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Financial Highlights

(For a share outstanding throughout each period)

	BlackRock Emerging Markets Equity Strategies Fund
	Institutional
	Year Ended December 31,						Period from 02/29/16 (a) to 12/31/16
	2018			2017
Net asset value, beginning of period	$	12.77		$	10.24		$	10.00
Net investment income(b)		0.17	(c)		0.18			0.23
Net realized and unrealized gain (loss)		(0.39	)		3.27			2.00
Net increase (decrease) from investment operations		(0.22	)		3.45			2.23
Distributions(d)
From net investment income		(2.43	)		—			(0.46	)
From net realized gain		(0.59	)		(0.92	)		(1.53	)
Total distributions		(3.02	)		(0.92	)		(1.99	)
Net asset value, end of period	$	9.53		$	12.77		$	10.24
Total Return(e)
Based on net asset value		(1.59	)%		33.72	%		22.20	%(f)
Ratios to Average Net Assets(g)
Total expenses		2.47	%		2.26	%		6.31	%(h)(i)
Total expenses after fees waived and/or reimbursed		1.28	%		1.27	%		1.28	%(h)
Net investment income		1.30	%(c)		1.37	%		2.37	%(h)
Supplemental Data
Net assets, end of period (000)	$	5,631		$	36,318		$	375
Portfolio turnover rate(j)		254	%		165	%		161	%

^(a)  Commencement of operations.

^(b)  Based on average shares outstanding.

^(c)  Net investment income per share and the ratio of net investment income to average net assets includes $0.03 per share and 0.26%, respectively, resulting from a special dividend.

^(d)  Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

^(e)  Where applicable, assumes the reinvestment of distributions.

^(f)  Aggregate total return.

^(g)  Excludes expenses incurred indirectly as a result of investments in underlying funds as follows:

	Year Ended						Period from 02/29/16 (a) to 12/31/16
	12/31/18			12/31/17
Total expenses		0.02	%		0.01	%		0.01	%

^(h)  Annualized.

⁽ⁱ⁾  Audit, offering and organization costs were not annualized in the calculation of expense ratios. If these expenses were annualized, the total expenses would have been 6.93%.

^(j)  Excludes investments underlying the total return swaps.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 45

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Emerging Markets Equity Strategies Fund (continued)
	Investor A
	Year Ended December 31,						Period from 02/29/16 (a) to 12/31/16
	2018			2017
Net asset value, beginning of period	$	12.76		$	10.24		$	10.00
Net investment income(b)		0.17	(c)		0.13			0.21
Net realized and unrealized gain		(0.43	)		3.27			2.00
Net increase (decrease) from investment operations		(0.26	)		3.40			2.21
Distributions(d)
From net investment income		(2.43	)		—			(0.44	)
From net realized gain		(0.59	)		(0.88	)		(1.53	)
Total distributions		(3.02	)		(0.88	)		(1.97	)
Net asset value, end of period	$	9.48		$	12.76		$	10.24
Total Return(e)
Based on net asset value		(1.93	)%		33.30	%		21.94	%(f)
Ratios to Average Net Assets(g)
Total expenses		4.04	%		3.45	%		6.82	%(h)(i)
Total expenses after fees waived and/or reimbursed		1.56	%		1.55	%		1.54	%(h)
Net investment income		1.40	%(c)		1.09	%		2.14	%(h)
Supplemental Data
Net assets, end of period (000)	$	1,162		$	87		$	61
Portfolio turnover rate(j)		254	%		165	%		161	%

^(a)  Commencement of operations.

^(b)  Based on average shares outstanding.

^(c)  Net investment income per share and the ratio of net investment income to average net assets includes $0.03 per share and 0.26%, respectively, resulting from a special dividend.

^(d)  Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

^(e)  Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

^(f)  Aggregate total return.

^(g)  Excludes expenses incurred indirectly as a result of investments in underlying funds as follows:

	Year Ended						Period from 02/29/16 (a) to 12/31/16
	12/31/18			12/31/17
Total expenses		0.02	%		0.01	%		0.01	%

^(h)  Annualized.

⁽ⁱ⁾  Audit, offering and organization costs were not annualized in the calculation of expense ratios. If these expenses were annualized, the total expenses would have been 7.48%.

^(j)  Excludes investments underlying the total return swaps.

See notes to financial statements.

46 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Emerging Markets Equity Strategies Fund (continued)
	Investor C
	Year Ended December 31,						Period from 02/29/16 (a) to 12/31/16
	2018			2017
Net asset value, beginning of period	$	12.75		$	10.24		$	10.00
Net investment income(b)		0.09	(c)		0.04			0.13
Net realized and unrealized gain (loss)		(0.43	)		3.26			2.00
Net increase (decrease) from investment operations		(0.34	)		3.30			2.13
Distributions(d)
From net investment income		(2.28	)		—			(0.36	)
From net realized gain		(0.59	)		(0.79	)		(1.53	)
Total distributions		(2.87	)		(0.79	)		(1.89	)
Net asset value, end of period	$	9.54		$	12.75		$	10.24
Total Return(e)
Based on net asset value		(2.59	)%		32.29	%		21.20	%(f)
Ratios to Average Net Assets(g)
Total expenses		4.38	%		4.12	%		7.53	%(h)(i)
Total expenses after fees waived and/or reimbursed		2.31	%		2.30	%		2.30	%(h)
Net investment income		0.73	%(c)		0.35	%		1.38	%(h)
Supplemental Data
Net assets, end of period (000)	$	81		$	84		$	61
Portfolio turnover rate(j)		254	%		165	%		161	%

^(a)  Commencement of operations.

^(b)  Based on average shares outstanding.

^(c)  Net investment income per share and the ratio of net investment income to average net assets includes $0.03 per share and 0.26%, respectively, resulting from a special dividend.

^(d)  Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

^(e)  Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

^(f)  Aggregate total return.

^(g)  Excludes expenses incurred indirectly as a result of investments in underlying funds as follows:

	Year Ended						Period from 02/29/16 (a) to 12/31/16
	12/31/18			12/31/17
Total expenses		0.02	%		0.01	%		0.01	%

^(h)  Annualized.

⁽ⁱ⁾  Audit, offering and organization costs were not annualized in the calculation of expense ratios. If these expenses were annualized, the total expenses would have been 8.20%.

^(j)  Excludes investments underlying the total return swaps.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 47

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Emerging Markets Equity Strategies Fund (continued)
	Class K
	Year Ended December 31,						Period from 02/29/16 (a) to 12/31/16
	2018			2017
Net asset value, beginning of period	$	12.77		$	10.24		$	10.00
Net investment income(b)		0.24	(c)		0.17			0.24
Net realized and unrealized gain (loss)		(0.45	)		3.28			1.99
Net increase (decrease) from investment operations		(0.21	)		3.45			2.23
Distributions(d)
From net investment income		(2.44	)		—			(0.46	)
From net realized gain		(0.59	)		(0.92	)		(1.53	)
Total distributions		(3.03	)		(0.92	)		(1.99	)
Net asset value, end of period	$	9.53		$	12.77		$	10.24
Total Return(e)
Based on net asset value		(1.49	)%		33.73	%		22.23	%(f)
Ratios to Average Net Assets(g)
Total expenses		3.14	%		3.06	%		6.48	%(h)(i)
Total expenses after fees waived and/or reimbursed		1.26	%		1.25	%		1.25	%(h)
Net investment income		1.90	%(c)		1.39	%		2.43	%(h)
Supplemental Data
Net assets, end of period (000)	$	6,975		$	7,426		$	5,956
Portfolio turnover rate(j)		254	%		165	%		161	%

^(a)  Commencement of operations.

^(b)  Based on average shares outstanding.

^(c)  Net investment income per share and the ratio of net investment income to average net assets includes $0.03 per share and 0.26%, respectively, resulting from a special dividend.

^(d)  Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

^(e)  Where applicable, assumes the reinvestment of distributions.

^(f)  Aggregate total return.

^(g)  Excludes expenses incurred indirectly as a result of investments in underlying funds as follows:

	Year Ended						Period from 02/29/16 (a) to 12/31/16
	12/31/18			12/31/17
Total expenses		0.02	%		0.01	%		0.01	%

^(h)  Annualized.

⁽ⁱ⁾  Audit, offering and organization costs were not annualized in the calculation of expense ratios. If these expenses were annualized, the total expenses would have been 7.14%.

^(j)  Excludes investments underlying the total return swaps.

See notes to financial statements.

48 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	iShares Short-Term TIPS Bond Index Fund
	Institutional
	Year Ended December 31,						Period from 02/16/16 (a) to 12/31/16
	2018			2017
Net asset value, beginning of period	$	9.95		$	10.05		$	10.00
Net investment income(b)		0.22			0.16			0.17
Net realized and unrealized gain (loss)		(0.16	)		(0.08	)		0.08
Net increase (decrease) from investment operations		0.06			0.08			0.25
Distributions(c)
From net investment income		(0.26	)		(0.18	)		(0.19	)
From net realized gain		(0.01	)		—			(0.01	)
From return of capital		—			(0.00	)(d)		—
Total distributions		(0.27	)		(0.18	)		(0.20	)
Net asset value, end of period	$	9.74		$	9.95		$	10.05
Total Return(e)
Based on net asset value		0.56	%		0.88	%		2.49	%(f)
Ratios to Average Net Assets
Total expenses		4.96	%		5.07	%		18.22	%(g)(h)
Total expenses after fees waived and/or reimbursed		0.09	%		0.08	%		0.09	%(g)(h)
Net investment income		2.19	%		1.64	%		1.91	%(g)(h)
Supplemental Data
Net assets, end of period (000)	$	976		$	3,348		$	476
Portfolio turnover rate		80	%		200	%		10	%

^(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)  Amount is greater than $(0.005) per share.

^(e)  Where applicable, assumes the reinvestment of distributions.

^(f)  Aggregate total return.

^(g)  Annualized.

^(h)  Audit, offering and organization costs were not annualized in the calculation of expense ratios. If these expenses were annualized, the total expenses would have been 19.98%.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 49

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	iShares Short-Term TIPS Bond Index Fund (continued)
	Investor A
	Year Ended December 31,						Period from 02/16/16 (a) to 12/31/16
	2018			2017
Net asset value, beginning of period	$	9.95		$	10.04		$	10.00
Net investment income(b)		0.20			0.14			0.16
Net realized and unrealized gain (loss)		(0.18	)		(0.07	)		0.06
Net increase (decrease) from investment operations		0.02			0.07			0.22
Distributions(c)
From net investment income		(0.22	)		(0.16	)		(0.17	)
From net realized gain		(0.01	)		—			(0.01	)
From return of capital		—			(0.00	)(d)		—
Total distributions		(0.23	)		(0.16	)		(0.18	)
Net asset value, end of period	$	9.74		$	9.95		$	10.04
Total Return(e)
Based on net asset value		0.22	%		0.76	%		2.18	%(f)
Ratios to Average Net Assets
Total expenses		6.40	%		6.24	%		20.84	%(g)(h)
Total expenses after fees waived and/or reimbursed		0.36	%		0.36	%		0.36	%(g)(h)
Net investment income		2.00	%		1.35	%		1.81	%(g)(h)
Supplemental Data
Net assets, end of period (000)	$	526		$	256		$	62
Portfolio turnover rate		80	%		200	%		10	%

^(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)  Amount is greater than $(0.005) per share.

^(e)  Where applicable, assumes the reinvestment of distributions.

^(f)  Aggregate total return.

^(g)  Annualized.

^(h)  Audit, offering and organization costs were not annualized in the calculation of expense ratios. If these expenses were annualized, the total expenses would have been 22.90%.

See notes to financial statements.

50 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	iShares Short-Term TIPS Bond Index Fund (continued)
	Class K
	Year Ended December 31,						Period from 02/16/16 (a) to 12/31/16
	2018			2017
Net asset value, beginning of period	$	9.95		$	10.05		$	10.00
Net investment income(b)		0.31			0.25			0.19
Net realized and unrealized gain (loss)		(0.25	)		(0.16	)		0.06
Net increase (decrease) from investment operations		0.06			0.09			0.25
Distributions(c)
From net investment income		(0.24	)		(0.19	)		(0.19	)
From net realized gain		(0.01	)		—			(0.01	)
From return of capital		—			(0.00	)(d)		—
Total distributions		(0.25	)		(0.19	)		(0.20	)
Net asset value, end of period	$	9.76		$	9.95		$	10.05
Total Return(e)
Based on net asset value		0.60	%		0.89	%		2.52	%(f)
Ratios to Average Net Assets
Total expenses		5.80	%		2.82	%		20.61	%(g)(h)
Total expenses after fees waived and/or reimbursed		0.06	%		0.06	%		0.06	%(g)(h)
Net investment income		3.13	%		2.45	%		2.17	%(g)(h)
Supplemental Data
Net assets, end of period (000)	$	1,788		$	1,138		$	904
Portfolio turnover rate		80	%		200	%		10	%

^(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)  Amount is greater than $(0.005) per share.

^(e)  Where applicable, assumes the reinvestment of distributions.

^(f)  Aggregate total return.

^(g)  Annualized.

^(h)  Audit, offering and organization costs were not annualized in the calculation of expense ratios. If these expenses were annualized, the total expenses would have been 22.68%.

See notes to financial statements.

FINANCIAL HIGHLIGHTS 51

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Alternative Capital Strategies Fund
	Institutional
	Year Ended December 31,									Period from 05/19/15 (a) to 12/31/15
	2018			2017			2016
Net asset value, beginning of period	$	10.15		$	9.61		$	9.53		$	10.00
Net investment income(b)		0.29			0.22			0.16			0.11
Net realized and unrealized gain (loss)		(0.12	)		0.73			0.40			(0.46	)
Net increase (decrease) from investment operations		0.17			0.95			0.56			(0.35	)
Distributions from(c)
From net investment income		(0.29	)		(0.22	)		(0.16	)		(0.12	)
From net realized gain		(0.56	)		(0.19	)		(0.32	)		—
Total distributions		(0.85	)		(0.41	)		(0.48	)		(0.12	)
Net asset value, end of period	$	9.47		$	10.15		$	9.61		$	9.53
Total Return(d)
Based on net asset value		1.74	%		10.00	%		5.91	%		(3.53	)%(e)
Ratios to Average Net Assets(f)
Total expenses		2.33	%		2.16	%		2.24	%		2.05	%(g)(h)
Total expenses after fees waived and/or reimbursed		0.95	%		0.95	%		1.19	%		1.20	%(g)
Total expenses after fees waived and/or reimbursed and excluding excise tax		0.95	%		0.95	%		1.18	%		1.20	%(g)
Net investment income		2.93	%		2.19	%		1.64	%		1.79	%(g)
Supplemental Data
Net assets, end of period (000)	$	32,961		$	27,328		$	25,588		$	23,844
Portfolio turnover rate(i)(j)		426	%		424	%		722	%		440	%

^(a)  Commencement of operations.

^(b)  Based on average shares outstanding.

^(c)  Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

^(d)  Where applicable, assumes the reinvestment of distributions.

^(e)  Aggregate total return.

^(f)  Excludes expenses incurred indirectly as a result of investments in underlying funds as follows:

	2018			2017			2016			Period from 05/19/15 (a) to 12/31/15
Investments in underlying funds		0.01	%		0.00	%		0.02	%		0.03	%

^(g)  Annualized.

^(h)  Audit, offering and organization costs were not annualized in the calculation of expense ratios. If these expenses were annualized, the total expenses would have been 2.44%.

⁽ⁱ⁾  Excludes investments underlying the total return swaps.

^(j) Includes mortgage dollar rolls (“MDRs”). Additional information regarding portfolio turnover rate is as follows:

	2018			2017			2016			Period from 05/19/15 (a) to 12/31/15
Portfolio turnover rate (excluding MDRs)(i)		220	%		251	%		488	%		437	%

See notes to financial statements.

52 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Alternative Capital Strategies Fund (continued)
	Investor A
	Year Ended December 31,									Period from 05/19/15 (a) to 12/31/15
	2018			2017			2016
Net asset value, beginning of period	$	10.15		$	9.60		$	9.53		$	10.00
Net investment income(b)		0.22			0.19			0.14			0.11
Net realized and unrealized gain (loss)		(0.09	)		0.74			0.39			(0.48	)
Net increase (decrease) from investment operations		0.13			0.93			0.53			(0.37	)
Distributions(c)
From net investment income		(0.26	)		(0.19	)		(0.14	)		(0.10	)
From net realized gain		(0.56	)		(0.19	)		(0.32	)		—
Total distributions		(0.82	)		(0.38	)		(0.46	)		(0.10	)
Net asset value, end of period	$	9.46		$	10.15		$	9.60		$	9.53
Total Return(d)
Based on net asset value		1.41	%		9.83	%		5.61	%		(3.66	)%(e)
Ratios to Average Net Assets(f)
Total expenses		2.73	%		2.63	%		2.75	%		2.42	%(g)(h)
Total expenses after fees waived and/or reimbursed		1.20	%		1.20	%		1.42	%		1.45	%(g)
Total expenses after fees waived and/or reimbursed and excluding excise tax		1.20	%		1.20	%		1.42	%		1.45	%(g)
Net investment income		2.21	%		1.94	%		1.46	%		1.76	%(g)
Supplemental Data
Net assets, end of period (000)	$	2,725		$	1,469		$	2,439		$	311
Portfolio turnover rate(i)(j)		426	%		424	%		722	%		440	%

^(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, excludes the effects of any sales charges and assumes the reinvestment of distributions.

^(e)  Aggregate total return.

^(f)  Excludes expenses incurred indirectly as a result of investments in underlying funds as follows:

	2018			2017			2016			Period from 05/19/15 (a) to 12/31/15
Investments in underlying funds		0.01	%		0.00	%		0.02	%		0.03	%

^(g)  Annualized.

^(h)  Audit, offering and organization costs were not annualized in the calculation of expense ratios. If these expenses were annualized, the total expenses would have been 2.81%.

⁽ⁱ⁾  Excludes investments underlying the total return swaps.

^(j)  Includes mortgage dollar rolls (“MDRs”). Additional information regarding portfolio turnover rate is as follows:

	2018			2017			2016			Period from 05/19/15 (a) to 12/31/15
Portfolio turnover rate (excluding MDRs)(i)		220	%		251	%		488	%		437	%

See notes to financial statements.

FINANCIAL HIGHLIGHTS 53

Financial Highlights  (continued)

(For a share outstanding throughout each period)

	BlackRock Alternative Capital Strategies Fund (continued)
	Investor C
	Year Ended December 31,									Period from 05/19/15 (a) to 12/31/15
	2018			2017			2016
Net asset value, beginning of period	$	10.16		$	9.58		$	9.51		$	10.00
Net investment income(b)		0.20			0.12			0.06			0.05
Net realized and unrealized gain (loss)		(0.14	)		0.73			0.40			(0.47	)
Net increase (decrease) from investment operations		0.06			0.85			0.46			(0.42	)
Distributions(c)
From net investment income		(0.19	)		(0.08	)		(0.07	)		(0.07	)
From net realized gain		(0.56	)		(0.19	)		(0.32	)		—
Total distributions		(0.75	)		(0.27	)		(0.39	)		(0.07	)
Net asset value, end of period	$	9.47		$	10.16		$	9.58		$	9.51
Total Return(d)
Based on net asset value		0.65	%		8.97	%		4.82	%		(4.19	)%(e)
Ratios to Average Net Assets(f)
Total expenses		3.48	%		3.30	%		3.43	%		3.31	%(g)(h)
Total expenses after fees waived and/or reimbursed		1.95	%		1.95	%		2.19	%		2.20	%(g)
Total expenses after fees waived and/or reimbursed and excluding excise tax		1.95	%		1.95	%		2.18	%		2.20	%(g)
Net investment income		2.01	%		1.18	%		0.64	%		0.89	%(g)
Supplemental Data
Net assets, end of period (000)	$	75		$	67		$	193		$	71
Portfolio turnover rate(i)(j)		426	%		424	%		722	%		440	%

^(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, excludes the effects of any sales charges and assumes the reinvestment of distributions.

^(e)  Aggregate total return.

^(f)  Excludes expenses incurred indirectly as a result of investments in underlying funds as follows:

	2018			2017			2016			Period from 05/19/15 (a) to 12/31/15
Investments in underlying funds		0.01	%		0.00	%		0.02	%		0.03	%

^(g)  Annualized.

^(h)  Audit, offering and organization costs were not annualized in the calculation of expense ratios. If these expenses were annualized, the total expenses would have been 3.70%.

⁽ⁱ⁾  Excludes investments underlying the total return swaps.

^(j)  Includes mortgage dollar rolls (“MDRs”). Additional information regarding portfolio turnover rate is as follows:

	2018			2017			2016			Period from 05/19/15 (a) to 12/31/15
Portfolio turnover rate (excluding MDRs)(i)		220	%		251	%		488	%		437	%

See notes to financial statements.

54 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements

1. ORGANIZATION

BlackRock Funds^SMand BlackRock Funds IV (each, a “Trust” and collectively, the “Trusts”) are registered under the Investment Company Act of 1940, as amended (the “1940 Act”), asopen-end management investment companies. Each Trust is organized as a Massachusetts business trust. The following are referred to herein collectively as the “Funds”, or individually, a “Fund”:

Registrant Name	Fund Name	Herein Referred To As	Diversification Classification
BlackRock Funds	BlackRock Emerging Markets Equity Strategies Fund	Emerging Markets Equity Strategies	Diversified
	iShares Short-Term TIPS Bond Index Fund	Short-Term TIPS Bond Index	Diversified
BlackRock Funds IV	BlackRock Alternative Capital Strategies Fund	Alternative Capital Strategies	Diversified

On November 28, 2018, the Board of BlackRock Funds IV approved a proposal to change the name of BlackRock Alternative Capital Strategies Fund to BlackRock Systematic Multi-Strategy Fund. This change is effective January 4, 2019.

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 without a sales charge and only to certain eligible investors. Investor A Shares are generally sold with an initial sales charge, and may be subject to a contingent deferred sales charge (“CDSC”) for certain redemptions where no initial sales charge was paid at the time of purchase. The sales charge does not apply to dividend and capital gain reinvestments by existing shareholders and new purchases for certain employer-sponsored retirement plans. Investor C Shares may be subject to a CDSC. 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. Institutional and Class K Shares are sold only to certain eligible investors. Investor A and Investor C Shares are generally available through financial intermediaries. Effective November 8, 2018, the Funds adopted an automatic conversion feature whereby Investor C Shares held for approximately ten years will be automatically converted into Investor A Shares, and, thereafter, investors will be subject to lower ongoing fees. 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 distribution and service plans).

Share Class	Initial Sales Charge			CDSC			Conversion Privilege
Institutional and Class K Shares		No			No		None
Investor A Shares		Yes	(a)		No	(a)(b)	None
Investor C Shares		No			Yes		To Investor A Shares after approximately 10 years

^(a) Not applicable for Short-Term TIPS Bond Index.

^(b)  Investor A Shares of Emerging Markets Equity Strategies and Alternative Capital Strategies 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.

The Funds, together with certain other registered investment companies advised by BlackRock Advisors, LLC (the “Manager”) or its affiliates, are included in a complex ofopen-end funds referred to as the Equity-Liquidity Complex.

Reorganization: The Board of Trustees of BlackRock Funds IV approved an Agreement and Plan of Reorganization with respect to BlackRock Alternative Capital Strategies Fund, a series of BlackRock Funds^SM (the “Target Fund”), pursuant to which the Target Fund reorganized into Alternative Capital Strategies, a newly created series (the “Acquiring Fund”) of BlackRock Funds IV, a newly organized Massachusetts business trust. This reorganization (the “Reorganization”) closed on September 17, 2018 and was not subject to approval by shareholders of the Target Fund.

Target Fund	Target Fund’s Registrant		Acquiring Fund		Acquiring Fund’s Registrant
BlackRock Alternative Capital Strategies Fund		BlackRock FundsSM		BlackRock Alternative Capital Strategies Fund		BlackRock Funds IV

The Reorganization was affected in connection with a potential reconfiguration of the boards of directors/trustees of certain BlackRock-advised funds.

The Acquiring Fund has the same investment objective, strategies and policies, investment adviser,sub-adviser, portfolio management team and service providers as the Target Fund. The Target Fund is the performance and accounting survivor of the Reorganization, meaning that the Acquiring Fund assumed the performance and financial history of the Target Fund upon completion of the Reorganization. In addition, as a result of the Reorganization, the Acquiring Fund is subject to the same contractual arrangements, including the same contractual fees and expenses, as those of the Target Fund. The Reorganization wastax-free, meaning that the Target Fund’s shareholders became shareholders of the Acquiring Fund without realizing any gain or loss for federal income tax purposes.

As a result, the Acquiring Fund acquired all of the assets and assumed all of the liabilities of the Target Fund in exchange for an equal aggregate value of newly-issued shares of the Acquiring Fund. The shareholders of the Target Fund received shares of the Acquiring Fund in an amount equal to the aggregate net asset value (“NAV”) of such shareholder’s Target Fund shares, as determined at the close of business on September 14, 2018.

The Reorganization was accomplished by atax-free exchange of shares of the Acquiring Fund in the following amounts and at the following conversion ratio:

Target Fund	Shares Prior to Reorganization		Conversion Ratio		Shares Post- Reorganization
BlackRock Alternative Capital Strategies Fund		3,242,148		1		3,242,148

NOTESTO FINANCIAL STATEMENTS 55

Notes to Financial Statements  (continued)

For financial reporting purposes, assets received and shares issued by the Acquiring Fund were recorded at fair value. However, the cost basis of the investments received from the Target Fund was carried forward to align ongoing reporting of the Acquiring Fund’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.

Prior to the Reorganization, the Acquiring Fund had not yet commenced operations and had no assets or liabilities. The Target Fund’s net assets, fair value and cost of investments and derivative financial instruments prior to the Reorganization were as follows:

Target Fund	Net Assets	Fair Value of Investments	Cost of Investments
BlackRock Alternative Capital Strategies Fund	$31,020,824	$37,089,063	$37,028,870

Prior to the Reorganization’s effective date, the Target Fund began to incur expenses in connection with a potential realignment and consolidation of the boards of directors/trustees of certain BlackRock-advised funds. These expenses and liabilities have been assumed by the Acquiring Fund. The Manager has voluntarily agreed to reimburse certain Acquiring Funds for all or a portion of such expenses, which amounts are included in fees waived and/or reimbursed by the Manager in the Statements of Operations.

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 entered into (the “trade dates”). Realized gains and losses on investment transactions are determined on the identified cost basis. Dividend income is recorded on theex-dividend date. Dividends from foreign securities where theex-dividend date may have passed are subsequently recorded when the Funds are informed of theex-dividend date. Under the applicable foreign tax laws, a withholding tax at various rates may be imposed on capital gains, dividends and interest. Upon notification from issuers, a portion of the dividend income received from a real estate investment trust may be redesignated as a reduction of cost of the related investment and/or realized gain. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized on an accrual basis. Income, expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.

Foreign Currency Translation:Each Fund’s books and records are maintained in U.S. dollars. Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates determined as of the close of trading on the New York Stock Exchange (“NYSE”). Purchases and sales of investments are recorded at the rates of exchange prevailing on the respective dates of such transactions. Generally, when the U.S. dollar rises in value against a foreign currency, the investments denominated in that currency will lose value; the opposite effect occurs if the U.S. dollar falls in relative value.

Each Fund does not isolate the portion of the results of operations arising as a result of changes in the exchange rates from the changes in the market prices of investments held or sold for financial reporting purposes. Accordingly, the effects of changes in exchange rates on investments are not segregated in the Statements of Operations from the effects of changes in market prices of those investments, but are included as a component of net realized and unrealized gain (loss) from investments. Each Fund reports realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are generally treated as ordinary income for U.S. federal income tax purposes.

Segregation and Collateralization:In cases where a Fund enters into certain investments (e.g., dollar rolls,to-be-announced (“TBA”) sale commitments, futures contracts, forward foreign currency exchange contracts, options written and swaps) that would be treated as “senior securities” for 1940 Act purposes, a Fund may segregate or designate on itsbooks 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 theex-dividend date. Alternative Capital Strategies will distribute net investment income, if any, at least quarterly. Emerging Markets Equity Strategies will distribute net investment income, if any, at least annually. Short-Term TIPS Bond will distribute net investment income, if any, at least monthly. Distributions of capital gains are recorded on theex-dividend date and made at least annually. The portion of distributions, if any, that exceeds a fund’s current and accumulated earnings and profits, as measured on a tax basis, constitute a non-taxable return of capital. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.

Recent Accounting Standards:In March 2017, the Financial Accounting Standards Board issued Accounting Standards Update “Premium Amortization of Purchased Callable Debt Securities” which amends the amortization period for certain purchased callable debt securities. Under the new guidance, the premium amortization of purchased callable debt securities that have explicit,non-contingent call features and are callable at fixed prices will be amortized to the earliest call date. The guidance will be applied on a modified retrospective basis and is effective for fiscal years, and their interim periods, beginning after December 15, 2018. Management is currently evaluating the impact of this guidance to the Funds.

In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update2018-13 “Changes to the Disclosure Requirements for Fair Value Measurement” which modifies disclosure requirements for fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. Management is currently evaluating the impact of this guidance to the Funds.

56 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

Indemnifications:In the normal course of business, a Fund enters into contracts that contain a variety of representations that provide general indemnification. A Fund’s maximum exposure under these arrangements is unknown because it involves future potential claims against a Fund, which cannot be predicted with any certainty.

Other: Expenses directly related to a Fund or its classes are charged to that Fund or the applicable class. Other operating expenses shared by several funds, including other funds managed by the Manager, are prorated among those funds on the basis of relative net assets or other appropriate methods. Expenses directly related to the Funds and other shared expenses prorated to the Funds are allocated daily to each class based on their relative net assets or other appropriate methods.

3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Investment Valuation Policies: The Funds’ investments are valued at fair value (also referred to as “market value” within the financial statements) as of the close of trading on the NYSE (generally 4:00 p.m., Eastern time). U.S. GAAP defines fair value as the price the Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Trusts determine the fair values of their financial instruments using various independent dealers or pricing services under policies approved by the Board of Trustees of each Trust (the “Board”). The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to oversee the pricing function for all financial instruments.

Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of each Fund’s assets and liabilities:

• Equity investments traded on a recognized securities exchange are valued at the official closing price each day, if available. For equity investments traded on more than one exchange, the official closing price on the exchange where the stock is primarily traded is used. Equity investments traded on a recognized exchange for which there were no sales on that day may be valued at the last available bid (long positions) or ask (short positions) price.

• Fixed-income securities for which market quotations are readily available are generally valued using the last available bid prices or current market quotations provided by independent dealers or third party pricing services. Floating rate loan interests are valued at the mean of the bid prices from one or more independent brokers or dealers as obtained from a third party pricing service. 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), 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.

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-tradedover-the-counter (“OTC”) options (the “Systematic Fair Value Price”). Using current market factors, the Systematic Fair Value Price is designed to value such foreign securities and foreign options at fair value as of the close of trading on the NYSE, which follows the close of the local markets.

• Investments inopen-end U.S. mutual funds are valued at NAV each business day.

• Futures contracts traded on exchanges are valued at their last sale price.

• Forward foreign currency exchange contracts are valued at the mean between the bid and ask prices and are determined as of the close of trading on the NYSE. Interpolated values are derived when the settlement date of the contract is an interim date for which quotations are not available.

• Exchange-traded options are valued at the mean between the last bid and ask prices at the close of the options market in which the options trade. An exchange-traded option for which there is no mean price is valued at the last bid (long positions) or ask (short positions) price. If no bid or ask price is available, the prior day’s price will be used, unless it is determined that the prior day’s price no longer reflects the fair value of the option. OTC options are valued by an independent pricing service using a mathematical model, which incorporates a number of market data factors, such as the trades and prices of the underlying instruments.

• Swap agreements are valued utilizing quotes received daily by the Funds’ pricing service 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.

• TBA commitments are valued on the basis of last available bid prices or current market quotations provided by pricing services.

The pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.

If events (e.g., a company announcement, market volatility or a natural disaster) occur that are expected to materially affect the value of such investments, or in the event that the application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the Global Valuation Committee, or its delegate, in accordance with a policy approved by the Board as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the Global Valuation Committee will include market approach, income approach and cost approach. Valuation techniques such as discounted cash flow, use of market comparables and matrix pricing are types of valuation approaches and are typically used in determining fair value. When determining the price for Fair Valued Investments, the Global Valuation Committee, or its delegate, seeks to determine the price that each Fund might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in anarm’s-length transaction. Fair value determinations shall be based upon all available factors that the Global Valuation Committee, or its delegate, deems relevant and consistent with the principles of fair value measurement.

NOTESTO FINANCIAL STATEMENTS 57

Notes to Financial Statements  (continued)

The Global Valuation Committee, or its delegate, employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of each Fund’s pricing vendors, regular reviews of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices and large movements in market values and reviews of any market related activity. The pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis. As a result of the inherent uncertainty in valuation of these investments, the fair values may differ from the values that would have been used had an active market existed.

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 third party pricing services utilize one or a combination of, but not limited to, the following inputs.

	Standard Inputs Generally Considered By Third Party Pricing Services
Market approach	(i)  recent market transactions, including subsequent rounds of financing, in the underlying investment or comparable issuers; (ii)   recapitalizations and other transactions across the capital structure; and (iii)  market multiples of comparable issuers.
Income approach	(i)  future cash flows discounted to present and adjusted as appropriate for liquidity, credit, and/or market risks; (ii)   quoted prices for similar investments or assets in active markets; and (iii)  other risk factors, such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, recovery rates, liquidation amounts and/or default rates.
Cost approach	(i)  audited or unaudited financial statements, investor communications and financial or operational metrics issued by the Private Company; (ii)   changes in the valuation of relevant indices or publicly traded companies comparable to the Private Company; (iii)  relevant news and other public sources; and (iv)  known secondary market transactions in the Private Company’s interests and merger or acquisition activity in companies comparable to the Private Company.

Investments in series of preferred stock issued by Private Companies are typically valued utilizing market approach in determining the enterprise value of the company. Such investments often contain rights and preferences that differ from other series of preferred and common stock of the same issuer. Valuation techniques such as an option pricing model (“OPM”), a probability weighted expected return model (“PWERM”) or a hybrid of those techniques are used in allocating enterprise value of the company, as deemed appropriate under the circumstances. The use of OPM and PWERM techniques involve a determination of the exit scenarios of the investment in order to appropriately allocate the enterprise value of the company among the various parts of its capital structure.

The Private Companies are not subject to the public company disclosure, timing, and reporting standards as other investments held by a Fund. Typically, the most recently available information by a Private Company is as of a date that is earlier than the date a Fund is calculating its NAV. This factor may result in a difference between the value of the investment and the price a Fund could receive upon the sale of the investment.

Fair Value Hierarchy: Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial statement purposes as follows:

• Level 1 — Unadjusted price quotations in active markets/exchanges for identical assets or liabilities that each Fund has the ability to access

• Level 2 — Other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market–corroborated inputs)

• Level 3 — Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including each Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Investments classified within Level 3 have significant unobservable inputs used by the Global Valuation Committee in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by Private Companies. There may not be a secondary market, and/or there are a limited number of investors. Level 3 investments may also be adjusted to reflect illiquidity and/ornon-transferability, with the amount of such discount estimated by the Global Valuation Committee in the absence of market information.

Changes in valuation techniques may result in transfers into or out of an assigned level within the hierarchy. In accordance with each Fund’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investments and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities.

4. SECURITIES AND OTHER INVESTMENTS

Asset-Backed and Mortgage-Backed Securities:Asset-backed securities are generally issued as pass-through certificates or as debt instruments. Asset-backed securities issued as pass-through certificates represent undivided fractional ownership interests in an underlying pool of assets. Asset-backed securities issued as debt instruments, which are also known as collateralized obligations, are typically issued as the debt of a special purpose entity organized solely for the purpose of owning such assets and issuing such debt. Asset-backed securities are often backed by a pool of assets representing the obligations of a number of different parties. The yield

58 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

characteristics of certain asset-backed securities may differ from traditional debt securities. One such major difference is that all or a principal part of the obligations may be prepaid at any time because the underlying assets (i.e., loans) may be prepaid at any time. As a result, a decrease in interest rates in the market may result in increases in the level of prepayments as borrowers, particularly mortgagors, refinance and repay their loans. An increased prepayment rate with respect to an asset-backed security will have the effect of shortening the maturity of the security. In addition, a fund may subsequently have to reinvest the proceeds at lower interest rates. If a fund has purchased such an asset-backed security at a premium, a faster than anticipated prepayment rate could result in a loss of principal to the extent of the premium paid.

For mortgage pass-through securities (the “Mortgage Assets”) there are a number of important differences among the agencies and instrumentalities of the U.S. Government that issue mortgage-related securities and among the securities that they issue. For example, mortgage-related securities guaranteed by Ginnie Mae are guaranteed as to the timely payment of principal and interest by Ginnie Mae and such guarantee is backed by the full faith and credit of the United States. However, mortgage-related securities issued by Freddie Mac and Fannie Mae, including Freddie Mac and Fannie Mae guaranteed mortgage pass-through certificates, which are solely the obligations of Freddie Mac and Fannie Mae, are not backed by or entitled to the full faith and credit of the United States, but are supported by the right of the issuer to borrow from the U.S. Treasury.

Non-agency mortgage-backed securities are securities issued bynon-governmental issuers and have no direct or indirect government guarantees of payment and are subject to various risks.Non-agency mortgage loans are obligations of the borrowers thereunder only and are not typically insured or guaranteed by any other person or entity. The ability of a borrower to repay a loan is dependent upon the income or assets of the borrower. A number of factors, including a general economic downturn, acts of God, terrorism, social unrest and civil disturbances, may impair a borrower’s ability to repay its loans.

Inflation-Indexed Bonds: Inflation-indexed bonds (other than municipal inflation-indexed and certain corporate inflation-indexed bonds) are fixed-income securities whose principal value is periodically adjusted according to the rate of inflation. If the index measuring inflation rises or falls, the principal value of inflation-indexed bonds (other than municipal inflation-indexed and certain corporate inflation-indexed bonds) will be adjusted upward or downward, and consequently the interest payable on these securities (calculated with respect to a larger or smaller principal amount) will be increased or reduced, respectively. Any upward or downward adjustment in the principal amount of an inflation-indexed bond will be included as interest income in the Statements of Operations, even though investors do not receive their principal until maturity. Repayment of the original bond principal upon maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds. For bonds that do not provide a similar guarantee, the adjusted principal value of the bond repaid at maturity may be less than the original principal. With regard to municipal inflation-indexed bonds and certain corporate inflation-indexed bonds, the inflation adjustment is typically reflected in the semi-annual coupon payment. As a result, the principal value of municipal inflation-indexed bonds and such corporate inflation-indexed bonds does not adjust according to the rate of inflation.

Multiple Class Pass-Through Securities: Multiple class pass-through securities, including collateralized mortgage obligations (“CMOs”) and commercial mortgage-backed securities, may be issued by Ginnie Mae, U.S. Government agencies or instrumentalities or by trusts formed by private originators of, or investors in, mortgage loans. In general, CMOs are debt obligations of a legal entity that are collateralized by a pool of residential or commercial mortgage loans or Mortgage Assets. The payments on these are used to make payments on the CMOs or multiple pass-through securities. Multiple class pass-through securities represent direct ownership interests in the Mortgage Assets. Classes of CMOs include interest only (“IOs”), principal only (“POs”), planned amortization classes and targeted amortization classes. IOs and POs are stripped mortgage-backed securities representing interests in a pool of mortgages, the cash flow from which has been separated into interest and principal components. IOs receive the interest portion of the cash flow while POs receive the principal portion. IOs and POs can be extremely volatile in response to changes in interest rates. As interest rates rise and fall, the value of IOs tends to move in the same direction as interest rates. POs perform best when prepayments on the underlying mortgages rise since this increases the rate at which the principal is returned and the yield to maturity on the PO. When payments on mortgages underlying a PO are slower than anticipated, the life of the PO is lengthened and the yield to maturity is reduced. If the underlying Mortgage Assets experience greater than anticipated prepayments of principal, a Fund’s initial investment in the IOs may not fully recoup.

Warrants:Warrants entitle a fund to purchase a specified number of shares of common stock and arenon-income producing. The purchase price and number of shares are subject to adjustment under certain conditions until the expiration date of the warrants, if any. If the price of the underlying stock does not rise above the strike price before the warrant expires, the warrant generally expires without any value and a Fund will lose any amount it paid for the warrant. Thus, investments in warrants may involve more risk than investments in common stock. Warrants may trade in the same markets as their underlying stock; however, the price of the warrant does not necessarily move with the price of the underlying stock.

TBA Commitments:TBA commitments are forward agreements for the purchase or sale of mortgage-backed securities for a fixed price, with payment and delivery on an agreed upon future settlement date. The specific securities to be delivered are not identified at the trade date. However, delivered securities must meet specified terms, including issuer, rate and mortgage terms. When entering into TBA commitments, a fund may take possession of or deliver the underlying mortgage-backed securities but can extend the settlement or roll the transaction. TBA commitments involve a risk of loss if the value of the security to be purchased or sold declines or increases, respectively, prior to settlement date.

In order to better define contractual rights and to secure rights that will help a fund mitigate their counterparty risk, TBA commitments may be entered into by a fund under Master Securities Forward Transaction Agreements (each, an “MSFTA”). An MSFTA typically contains, among other things, collateral posting terms and netting provisions in the event of default and/or termination event. The collateral requirements are typically calculated by netting themark-to-market amount for each transaction under such agreement and comparing that amount to the value of the collateral currently pledged by a fund and the counterparty. Cash collateral that has been pledged to cover the obligations of a fund and cash collateral received from the counterparty, if any, is reported separately on the Statements of Assets and Liabilities as cash pledged as collateral for TBA commitments or cash received as collateral for TBA commitments, respectively.Non-cash collateral pledged by a fund, if any, is noted in the Schedules of Investments. Typically, a fund is permitted to sell,re-pledge or use the collateral it receives; however, the counterparty is not permitted to do so. To the extent amounts due to a fund are not fully collateralized, contractually or otherwise, a fund bears the risk of loss from counterpartynon-performance.

Mortgage Dollar Roll Transactions: Certain Funds may sell TBA mortgage-backed securities and simultaneously contract to repurchase substantially similar (i.e., same type, coupon and maturity) securities on a specific future date at an agreed upon price. During the period between the sale and repurchase, a fund is not entitled to receive interest and principal payments on the securities sold. Mortgage dollar roll transactions are treated as purchases and sales and realize gains and losses on these

NOTESTO FINANCIAL STATEMENTS 59

Notes to Financial Statements  (continued)

transactions. Mortgage dollar rolls involve the risk that the market value of the securities that a fund is required to purchase may decline below the agreed upon repurchase price of those securities.

5. DERIVATIVE FINANCIAL INSTRUMENTS

The Funds engage in various portfolio investment strategies using derivative contracts both to increase the returns of the Funds and/or to manage their exposure to certain risks such as credit risk, equity risk, interest rate risk, foreign currency exchange rate risk, commodity price risk or other risks (e.g., inflation risk). Derivative financial instruments categorized by risk exposure are included in the Schedules of Investments. These contracts may be transacted on an exchange or OTC.

Futures Contracts:Futures contracts are purchased or sold to gain exposure to, or manage exposure to, changes in interest rates (interest rate risk), and changes in the value of equity securities (equity risk) or foreign currencies (foreign currency exchange rate risk).

Futures contracts are agreements between the Funds and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and on a specified date. Depending on the terms of a contract, it is settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash amount on the settlement date. Upon entering into a futures contract, the Funds are required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contract’s size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Amounts pledged, which are considered restricted, are included in cash pledged for futures contracts in the Statements of Assets and Liabilities.

Securities deposited as initial margin are designated in the Schedules of Investments and cash deposited, if any, is shown as cash pledged for futures contracts in the Statements of Assets and Liabilities. Pursuant to the contract, the Funds agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation (depreciation) and, if any, shown as variation margin receivable (or payable) on futures contracts in the Statements of Assets and Liabilities. When the contract is closed, a realized gain or loss is recorded in the Statements of Operations equal to the difference between the notional amount of the contract at the time it was opened and the notional amount at the time it was closed. The use of futures contracts involves the risk of an imperfect correlation in the movements in the price of futures contracts and interest, foreign currency exchange rates or underlying assets.

Forward Foreign Currency Exchange Contracts: Forward foreign currency exchange contracts are entered into to gain or reduce exposure to foreign currencies (foreign currency exchange rate risk).

A forward foreign currency exchange contract is an agreement between two parties to buy and sell a currency at a set exchange rate on a specified date. These contracts help to manage the overall exposure to the currencies in which some of the investments held by the Funds are denominated and in some cases, may be used to obtain exposure to a particular market.

The contract ismarked-to-market daily and the change in market value is recorded as unrealized appreciation (depreciation) in the Statements of Assets and Liabilities. When a contract is closed, a realized gain or loss is recorded in the Statements of Operations equal to the difference between the value at the time it was opened and the value at the time it was closed.Non-deliverable forward foreign currency exchange contracts are settled with the counterparty in cash without the delivery of foreign currency. The use of forward foreign currency exchange contracts involves the risk that the value of a forward foreign currency exchange contract changes unfavorably due to movements in the value of the referenced foreign currencies. Cash amounts pledged for forward foreign currency exchange contracts are considered restricted and are included in cash pledged as collateral for OTC derivatives in the Statements of Assets and Liabilities.

Options:Certain Funds purchase and write call and put options to increase or decrease their exposure to the risks of underlying instruments, including equity risk, interest rate risk and/or commodity price risk and/or, in the case of options written, to generate gains from options premiums.

A call option gives the purchaser (holder) of the option the right (but not the obligation) to buy, and obligates the seller (writer) to sell (when the option is exercised) the underlying instrument at the exercise or strike price at any time or at a specified time during the option period. A put option gives the holder the right to sell and obligates the writer to buy the underlying instrument at the exercise or strike price at any time or at a specified time during the option period.

Premiums paid on options purchased and premiums received on options written, as well as the daily fluctuation in market value, are included in investments at value — unaffiliated and options written at value, respectively, in the Statements of Assets and Liabilities. When an instrument is purchased or sold through the exercise of an option, the premium is offset against the cost or proceeds of the underlying instrument. When an option expires, a realized gain or loss is recorded in the Statements of Operations to the extent of the premiums received or paid. When an option is closed or sold, a gain or loss is recorded in the Statements of Operations to the extent the cost of the closing transaction exceeds the premiums received or paid. When the Funds write a call option, such option is typically “covered,” meaning that they hold the underlying instrument subject to being called by the option counterparty. When the Funds write a put option, such option is covered by cash in an amount sufficient to cover the obligation. These amounts, which are considered restricted, are included in cash pledged as collateral for options written in the Statements of Assets and Liabilities.

In purchasing and writing options, the Funds bear the risk of an unfavorable change in the value of the underlying instrument or the risk that they may not be able to enter into a closing transaction due to an illiquid market. Exercise of a written option could result in the Funds purchasing or selling a security when it otherwise would not, or at a price different from the current market value.

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)

60 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

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 Funds’ counterparty on the swap agreement becomes the CCP. The Funds are required to interface with the CCP through the broker. Upon entering into a centrally cleared swap, 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 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, 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 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, including at termination, are recorded as realized gains (losses) in the Statements of Operations.

• Credit default swaps — Credit default swaps are entered into to manage exposure to the market or certain sectors of the market, to reduce risk exposure to defaults of corporate and/or sovereign issuers or to create exposure to corporate and/or sovereign issuers to which a fund is not otherwise exposed (credit risk).

The Funds may either buy or sell (write) credit default swaps on single-name issuers (corporate or sovereign), a combination or basket of single-name issuers or traded indexes. Credit default swaps are agreements in which the protection buyer pays fixed periodic payments to the seller in consideration for a promise from the protection seller to make a specific payment should a negative credit event take place with respect to the referenced entity (e.g., bankruptcy, failure to pay, obligation acceleration, repudiation, moratorium or restructuring). As a buyer, if an underlying credit event occurs, the Funds will either (i) receive from the seller an amount equal to the notional amount of the swap and deliver the referenced security or underlying securities comprising the index, or (ii) receive a net settlement of cash equal to the notional amount of the swap less the recovery value of the security or underlying securities comprising the index. As a seller (writer), if an underlying credit event occurs, the Funds will either pay the buyer an amount equal to the notional amount of the swap and take delivery of the referenced security or underlying securities comprising the index or pay a net settlement of cash equal to the notional amount of the swap less the recovery value of the security or underlying securities comprising the index.

• 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 market (e.g., fixed-income) with another 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 or 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 each 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 swap’s 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.

• Interest rate swaps — Interest rate swaps are entered into to gain or reduce exposure to interest rates or to manage duration, the yield curve or interest rate (interest rate risk).

Interest rate swaps are agreements in which one party pays a stream of interest payments, either fixed or floating, in exchange for another party’s stream of interest payments, either fixed or floating, on the same notional amount for a specified period of time. In more complex interest rate swaps, the notional principal amount may decline (or amortize) over 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.

Master Netting Arrangements: In order to define their contractual rights and to secure rights that will help them mitigate their counterparty risk, the Funds may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with their counterparties. An ISDA Master Agreement is a bilateral agreement between each Fund and a counterparty that governs certain OTC derivatives and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, each Fund may, under certain circumstances, offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. The

NOTESTO FINANCIAL STATEMENTS 61

Notes to Financial Statements  (continued)

provisions of the ISDA Master Agreement typically permit a single net payment in the event of default including the bankruptcy or insolvency of the counterparty. Bankruptcy or insolvency laws of a particular jurisdiction may restrict or prohibit the right of offset in bankruptcy, insolvency or other events.

Collateral Requirements: For derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting themark-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 on 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 andnon-cash collateral it receives. A Fund generally agrees not to usenon-cash collateral that it receives but may, absent default or certain other circumstances defined in the underlying ISDA Master Agreement, be permitted to use cash collateral received. In such cases, interest may be paid pursuant to the collateral arrangement with the counterparty. To the extent amounts due to the Funds from their counterparties are not fully collateralized, they bear the risk of loss from counterpartynon-performance. Likewise, to the extent the Funds have delivered collateral to a counterparty and stand ready to perform under the terms of their agreement with such counterparty, they bear the risk of loss from a counterparty in the amount of the value of the collateral in the event the counterparty fails to return such collateral. Based on the terms of agreements, collateral may not be required for all derivative contracts.

For financial reporting purposes, the Funds do not offset derivative assets and derivative liabilities that are subject to netting arrangements, if any, in the Statements of Assets and Liabilities.

6. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Advisory: Each Trust, on behalf of the Funds, entered into an Investment Advisory Agreement with the Manager, the Funds’ investment adviser, and an indirect, wholly-owned subsidiary of BlackRock, to provide investment advisory services. The Manager is responsible for the management of each Fund’s portfolio and provides the personnel, facilities, equipment and certain other services necessary to the operations of each Fund.

For such services, Emerging Markets Equity Strategies and Alternative Capital Strategies pay the Manager a monthly fee at an annual rate equal to the following percentages of the average daily value of each Fund’s net assets as follows:

Average Daily Net Assets	Emerging Markets Equity Strategies			Alternative Capital Strategies
First $1 Billion		1.00	%		0.80	%
$1 Billion — $3 Billion		0.94			0.75
$3 Billion — $5 Billion		0.90			0.72
$5 Billion — $10 Billion		0.87			0.70
Greater than $10 Billion		0.85			0.68

Short-Term TIPS Bond Index pays the Manager a monthly fee at an annual rate of 0.01% of the Fund’s average daily net assets.

With respect to Emerging Markets Equity Strategies and Alternative Capital Strategies, the Manager entered into separatesub-advisory agreements with BlackRock International Limited (“BIL”), an affiliate of the Manager. With respect to Emerging Markets Equity Strategies, the Manager also entered into a separatesub-advisory agreement with BlackRock Asset Management North Asia Limited (“BAMNAL”), an affiliate of the Manager. With respect to Short-Term TIPS Bond Index, the Manager entered into a separatesub-advisory agreement with BlackRock Fund Advisors (“BFA”), an affiliate of the Manager. The Manager pays BIL, BFA and BAMNAL, for services they provide, a monthly fee that is equal to a percentage of the investment advisory fees paid by each Fund to the Manager.

Service and Distribution Fees:The Trust, on behalf of the Funds, entered into a Distribution Agreement and a Distribution and Service Plan with BlackRock Investments, LLC (“BRIL”), an affiliate of the Manager. Pursuant to the Distribution and Service Plan and in accordance with Rule12b-1 under the 1940 Act, each Fund pays BRIL ongoing service and distribution fees. The fees are accrued daily and paid monthly at annual rates based upon the average daily net assets of the relevant share class of each Fund as follows:

	Service Fees			Distribution Fees
Investor A		0.25	%		—	%
Investor C(a)		0.25			0.75

^(a)  Emerging Markets Equity Strategies and Alternative Capital Strategies only.

BRIL and broker-dealers, pursuant tosub-agreements with BRIL, provide shareholder servicing and distribution services to the Funds. The ongoing service and/or distribution fee compensates BRIL and each broker-dealer for providing shareholder servicing and/or distribution related services to shareholders.

For the year ended December 31, 2018, the following table shows the class specific service and distribution fees borne directly by each share class of each Fund:

Service and Distribution Fees	Investor A		Investor C		Total
Emerging Markets Equity Strategies	$	822	$	1,053	$	1,875
Short-Term TIPS Bond Index		865		N/A		865
Alternative Capital Strategies		4,260		686		4,946

Administration:The Trust, on behalf of Emerging Markets Equity Strategies and Alternative Capital Strategies, 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

62 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

daily and payable monthly, based on a percentage of the average daily net assets of each Fund. The administration fee, which is shown as administration in the Statements of Operations, is paid at the annual rates below.

Average Daily Net Assets	Administration Fee
First $500 Million		0.0425	%
$500 Million — $1 Billion		0.0400
$1 Billion — $2 Billion		0.0375
$2 Billion — $4 Billion		0.0350
$4 Billion — $13 Billion		0.0325
Greater than $13 Billion		0.0300

In addition, for Emerging Markets Equity Strategies and Alternative Capital Strategies, 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 December 31, 2018, the following table shows the class specific administration fees borne directly by each share class of Emerging Markets Equity Strategies and Alternative Capital Strategies:

Administration Fees	Institutional		Investor A		Investor C		Class K		Total
Emerging Markets Equity Strategies	$	3,509	$	66	$	21	$	1,496	$	5,092
Alternative Capital Strategies		5,767		341		14		N/A		6,122

Transfer Agent: Pursuant to written agreements, certain financial intermediaries, some of which may be affiliates, provide the Funds withsub-accounting, recordkeeping,sub-transfer agency and other administrative services with respect tosub-accounts they service. 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.

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 December 31, 2018, each Fund reimbursed the Manager the following amounts for costs incurred in running the call center, which are included in transfer agent — class specific in the Statements of Operations:

	Institutional		Investor A		Investor C		Class K		Total
Emerging Markets Equity Strategies	$	192	$	47	$	32	$	32	$	303
Short-Term TIPS Bond Index		66		239		N/A		76		381
Alternative Capital Strategies		235		44		9		N/A		288

For the year ended December 31, 2018, the following table shows the class specific transfer agent fees borne directly by each share class of each Fund:

	Institutional		Investor A		Investor C		Class K		Total
Emerging Markets Equity Strategies	$	788	$	468	$	127	$	32	$	1,415
Short-Term TIPS Bond Index		1,428		1,167		N/A		824		3,419
Alternative Capital Strategies		3,068		2,528		113		N/A		5,709

Other Fees: For the year ended December 31, 2018, affiliates earned underwriting discounts, direct commissions and dealer concessions on sales of each Fund’s Investor A Shares as follows:

	Alternative Capital Strategies
Investor A	$	45

Expense Limitations, Waivers and Recoupments:With respect to each Fund, the Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Fund pays to the Manager indirectly through its investment in affiliated money market funds (the “affiliated money market fund waiver”). The amount of waivers and/or reimbursements of fees and expenses made pursuant to the expense limitation described below will be reduced by the amount of the affiliated money market fund waiver. These amounts are included in fees waived and/or reimbursed by the Manager in the Statements of Operations. For the year ended December 31, 2018, the amounts waived were as follows:

Emerging Markets Equity Strategies	$	969
Short-Term TIPS Bond Index		49
Alternative Capital Strategies		1,062

The Manager has contractually agreed to waive its investment advisory fee with respect to any portion of each Fund’s assets invested in affiliated equity and fixed-income mutual funds and affiliated exchange-traded funds that have a contractual management fee through April 30, 2019 except for Alternative Capital Strategies which is through April 30, 2020. The contractual agreement may be terminated upon 90 days’ notice by a majority of the trustees who are not “interested persons” of a Fund, as defined in the 1940 Act (“Independent Trustees”) or by a vote of a majority of the outstanding voting securities of a Fund. For the year ended December 31, 2018, Emerging Markets Strategies waived $4,581 in investment advisory fees pursuant to this arrangement.

NOTESTO FINANCIAL STATEMENTS 63

Notes to Financial Statements  (continued)

With respect to each Fund, the Manager contractually agreed to waive and/or reimburse fees or expenses in order to limit expenses, excluding interest expense, dividend expense, tax expense, acquired fund fees and expenses, and certain other fund expenses, which constitute extraordinary expenses not incurred in the ordinary course of each Fund’s business (“expense limitation”). The expense limitations as a percentage of average daily net assets are as follows:

	Institutional			Investor A			Investor C			Class K
Emerging Markets Equity Strategies		1.30	%		1.55	%		2.30	%		1.25	%
Short-Term TIPS Bond Index		0.11			0.36			N/A			0.06
Alternative Capital Strategies		0.95			1.20			1.95			N/A

The Manager has agreed not to reduce or discontinue these contractual expense limitations through April 30, 2019 except for Alternative Capital Strategies which is through April 30, 2020, unless approved by the Board, including a majority of the Independent Trustees or by a vote of a majority of the outstanding voting securities of a Fund.

These amounts waived and/or reimbursed are included in fees waived and/or reimbursed by the Manager and shown as 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 December 31, 2018, the amounts included in fees waived and/or reimbursed by the Manager are as follows:

Emerging Markets Equity Strategies	$	346,061
Short-Term TIPS Bond Index		176,815
Alternative Capital Strategies		343,991

For the year ended December 31, 2018, class specific expense waivers are as follows:

Administration Fees Waived — Class Specific	Institutional		Investor A		Investor C		Class K		Total
Emerging Markets Equity Strategies	$	—	$	78	$	23	$	1,498	$	1,599
Alternative Capital Strategies		5,767		341		14		—		6,122

Transfer Agent Fees Waived and/or Reimbursed — Class Specific	Institutional		Investor A		Investor C		Class K		Total
Emerging Markets Equity Strategies	$	—	$	291	$	72	$	31	$	394
Short-Term TIPS Bond Index		851		993		—		824		2,668
Alternative Capital Strategies		3,030		2,566		113		—		5,709

The Funds have begun to incur expenses in connection with a proposed realignment and consolidation of the boards of trustees of certain BlackRock-advised funds. The Manager has voluntarily agreed to reimburse certain Funds for all or a portion of such expenses, which amounts are included in fees waived and/or reimbursed by the Manager in the Statements of Operations. For the year ended December 31, 2018, the amounts reimbursed were as follows:

	Short-Term TIPS Bond Index		Alternative Capital Strategies
Reimbursed amounts	$	1,979	$	54,245

With respect to the contractual expense limitation, if during the Fund’s fiscal year the operating expenses of a share class, that at any time during the prior two fiscal years received a waiver and/or reimbursement from the Manager, are less than the current expense limitation for that share class, the Manager is entitled to be reimbursed by such share class up to the lesser of: (a) the amount of fees waived and/or expenses reimbursed during those prior two fiscal years under the agreement and (b) an amount not to exceed either the current expense limitation of that share class or the expense limitation of the share class in effect at the time that the share class received the applicable waiver and/or reimbursement, provided that:

(1) each Fund, of which the share class is a part, has more than $50 million in assets for the fiscal year, and

(2) the Manager or an affiliate continues to serve as a Fund’s investment adviser or administrator.

This repayment applies only to the contractual expense limitation on net expenses and does not apply to the contractual investment advisory fee waiver described above or any voluntary waivers that may be in effect from time to time.

On December 31, 2018, the Funds’ fund level and class specific waivers and/or reimbursements subject to possible future recoupment under the expense limitation agreement are as follows:

	Expiring December 31,
	2019		2020
Emerging Markets Equity Strategies Fund
Fund Level	$	327,847	$	351,901
Institutional		8		—
Investor A		93		369
Investor C		66		95
Class K		1,486		1,529

64 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

	Expiring December 31,
	2019		2020
Short-Term TIPS Bond Index Fund
Fund Level	$	208,731	$	176,815
Institutional		791		851
Investor A		294		993
Class K		232		824
Alternative Capital Strategies Fund
Fund Level	$	328,778	$	357,002
Institutional		6,911		8,833
Investor A		4,110		2,869
Investor C		232		126

The following fund level and class specific waivers and/or reimbursements previously recorded by the Funds, which were subject to recoupment by the Manager, expired on December 31, 2018:

	Expired December 31, 2018
Emerging Markets Equity Strategies Fund
Fund Level	$	293,219
Institutional		16
Investor A		40
Investor C		16
Class K		1,379
Short-Term TIPS Bond Index Fund
Fund Level	$	188,653
Institutional		26
Investor A		27
Class K		55
Alternative Capital Strategies Fund
Fund Level	$	284,567
Institutional		6,195
Investor A		2,797
Investor C		331

Interfund Lending: In accordance with an exemptive order (the “Order”) from the U.S. Securities and Exchange Commission (“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 Fund’s 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 fund’s investment restrictions). If a borrowing BlackRock fund’s total outstanding borrowings exceed 10% of its total assets, each of its outstanding interfund loans will be subject to collateralization of at least 102% of the outstanding principal value of the loan. All interfund loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the highest current overnight repurchase agreement rate available to a lending fund and the bank loan rate, as calculated according to a formula established by the Board.

During the year ended December 31, 2018, the Funds did not participate in the Interfund Lending Program.

Trustees and Officers:Certain Trustees and/or officers of the Trusts are trustees and/or officers of BlackRock or its affiliates. The Funds reimburse the Manager for a portion of the compensation paid to the Funds’ Chief Compliance Officer, which is included in Trustees and Officer in the Statements of Operations.

7. PURCHASES AND SALES

For the year ended December 31, 2018, purchases and sales of investments, including paydowns and mortgage dollar rolls and excluding short-term securities, were as follows:

Purchases
	Emerging Markets Equity Strategies		Short-Term TIPS Bond Index		Alternative Capital Strategies
Non-U.S. Government Securities	$	60,137,997	$	—	$	154,295,208
U.S. Government Securities		—		2,701,821		—
	$	60,137,997	$	2,701,821	$	154,295,208

NOTESTO FINANCIAL STATEMENTS 65

Notes to Financial Statements  (continued)

Sales
	Emerging Markets Equity Strategies		Short-Term TIPS Bond Index		Alternative Capital Strategies
Non-U.S. Government Securities	$	87,867,577	$	1,011,797	$	145,696,218
U.S. Government Securities		—		3,189,299		—
	$	87,867,577	$	4,201,096	$	145,696,218

For the year ended December 31, 2018, purchases and sales related to mortgage dollar rolls for Alternative Capital Strategies were $70,552,358 and $70,631,108 respectively.

8. INCOME TAX INFORMATION

It is each Fund’s policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies, and to distribute substantially all of its taxable income to its shareholders. Therefore, no U.S. federal income tax provision is required.

Each Fund files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on Emerging Markets Equity Strategies and Short-Term TIPS Bond Index’s U.S. federal tax returns generally remains open for the two years ended December 31, 2018 and the period ended December 31, 2016. Alternative Capital Strategies’ U.S. federal tax returns generally remains open for the three years ended December 31, 2018 and the period ended December 31, 2015. The statutes of limitations on each Fund’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.

Management has analyzed tax laws and regulations and their application to the Funds as of December 31, 2018, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.

U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. As of period end, the following permanent differences attributable tonon-deductible expenses and the use of equalization were reclassified to the following accounts:

	Emerging Markets Equity Strategies			Short-Term TIPS Bond Index		Alternative Capital Strategies
Paid-in capital	$	3,137,124		$	—	$	(32	)
Accumulated loss	$	(3,137,124	)	$	—	$	32

The tax character of distributions paid was as follows:

	Emerging Markets Equity Strategies  (a)		Short-Term TIPS Bond Index		Alternative Capital Strategies
Ordinary income
12/31/18	$	6,145,946	$	85,562	$	2,107,367
12/31/17	$	2,450,072	$	112,440	$	971,653
Long-term capital gains
12/31/18		401,876		—		600,879
12/31/17		339,671		—		176,944
Return of capital
12/31/18		—		—		—
12/31/17		—		2,169		—
Total
12/31/18	$	6,547,822	$	85,562	$	2,708,246
12/31/17	$	2,789,743	$	114,609	$	1,148,597

^(a)  Distribution amounts may include a portion of the proceeds from redeemed shares.

As of period end, the tax components of accumulated losses were as follows:

	Emerging Markets Equity Strategies			Short-Term TIPS Bond Index			Alternative Capital Strategies
Undistributed ordinary income	$	—		$	137		$	182,716
Capital loss carryforwards		—			(64,274	)		—
Net unrealized losses(a)		(1,901,298	)		(66,590	)		(1,821,646	)
Qualified late-year losses(b)		(379,159	)		—			(7,524	)
	$	(2,280,457	)	$	(130,727	)	$	(1,646,454	)

^(a) The difference between book-basis andtax-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 and foreign currency contracts, the realization for tax purposes of unrealized gains on constructive sales, the accounting for swap agreements and the timing and recognition of partnership income.

^(b) The Fund has elected to defer certain qualified late-year losses and recognize such losses in the next taxable year.

66 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

As of December 31, 2018, the Funds had capital loss carryforwards, with no expiration dates, available to offset future realized capital gains as follows:

	Short-Term TIPS Bond Index
No expiration date	$	64,274

As of December 31, 2018, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:

	Emerging Markets Equity Strategies			Short-Term TIPS Bond Index			Alternative Capital Strategies
Tax cost	$	14,856,407		$	3,352,242		$	44,290,908
Gross unrealized appreciation	$	355,798		$	—		$	1,449,140
Gross unrealized depreciation		(2,258,972	)		(66,590	)		(2,748,162	)
Net unrealized depreciation	$	(1,903,174	)	$	(66,590	)	$	(1,299,022	)

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 a364-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 2019 unless extended or renewed. Participating Funds paid an upfront commitment fee of 0.02% on the total commitment amounts, in addition to administration, legal and arrangement fees, which are included in miscellaneous expenses in the Statements of Operations. These fees were allocated among such funds based upon portions of the aggregate commitment available to them and relative net assets of Participating Funds. During the year ended December 31, 2018, the Funds did not borrow under the credit agreement.

10. PRINCIPAL RISKS

In the normal course of business, certain Funds invest in securities or other instruments and may enter into certain transactions, and such activities subject each Fund to various risks, including among others, fluctuations in the market (market risk) or failure of an issuer to meet all of its obligations. The value of securities or other instruments may also be affected by various factors, including, without limitation: (i) the general economy; (ii) the overall market as well as local, regional or global political and/or social instability; (iii) regulation, taxation or international tax treaties between various countries; or (iv) currency, interest rate and price fluctuations. Each Fund’s prospectus provides details of the risks to which each Fund is subject. 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; and (iii) 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.

Short-Term TIPS Bond Index and Alternative Capital Strategies may be exposed to prepayment risk, which is the risk that borrowers may exercise their option to prepay principal earlier than scheduled during periods of declining interest rates, which would force each Fund to reinvest in lower yielding securities. Each Fund may also be exposed to reinvestment risk, which is the risk that income from each Fund’s portfolio will decline if each Fund invests the proceeds from matured, traded or called fixed-income securities at market interest rates that are below each Fund portfolio’s current earnings rate.

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 and may experience difficulty in selling those investments in a timely manner at the price that they believe the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause each Fund’s NAV to experience significant increases or decreases over short periods of time. If there is a general decline in the securities and other markets, the NAV of a Fund may lose value, regardless of the individual results of the securities and other instruments in which a Fund invests.

The price a Fund could receive upon the sale of any particular portfolio investment may differ from a Fund’s valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair valuation technique or a price provided by an independent pricing service. Changes to significant unobservable inputs and assumptions (i.e., publicly traded company multiples, growth rate, time to exit) due to the lack of observable inputs may significantly impact the resulting fair value and therefore a Fund’s results of operations. As a result, the price received upon the sale of an investment may be less than the value ascribed by a Fund, and a Fund could realize a greater than expected loss or lesser than expected gain upon the sale of the investment. A Fund’s ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third party service providers.

NOTESTO FINANCIAL STATEMENTS 67

Notes to Financial Statements  (continued)

Counterparty Credit Risk:The Funds may be exposed to counterparty credit risk, or the risk that an entity may fail to or be unable to perform on its commitments related to unsettled or open transactions. The Funds manage counterparty credit risk by entering into transactions only with counterparties that the Manager believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Funds’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Funds.

A derivative contract may suffer amark-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.

A Fund’s risk of loss from counterparty credit risk on OTC derivatives is generally limited to the aggregate unrealized gain less the value of any collateral held by such Fund.

For OTC options purchased, each Fund bears the risk of loss in the amount of the premiums paid plus the positive change in market values net of any collateral held by the Funds should the counterparty fail to perform under the contracts. Options written by the Funds do not typically give rise to counterparty credit risk, as options written generally obligate the Funds, and not the counterparty, to perform. The Funds may be exposed to counterparty credit risk with respect to options written to the extent each Fund deposits collateral with its counterparty to a written option.

With exchange-traded options purchased and futures and centrally cleared swaps, there is less counterparty credit risk to the Funds since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists inexchange-traded futures and centrally cleared swaps with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Funds.

Concentration Risk:Certain Funds invest a significant portion of their assets in fixed-income securities and/or use derivatives tied to the fixed-income markets. Changes in market interest rates or economic conditions may affect the value and/or liquidity of such investments. Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall and decrease as interest rates rise. The Funds may be subject to a greater risk of rising interest rates due to the current period of historically low rates. The Federal Reserve has begun to raise the Federal Funds rate, and each increase results in more pronounced interest rate risk in the current market environment.

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 backed by commercial or residential mortgage loans or in issuers that hold mortgage and other asset-backed securities. Investment percentages in these securities are presented in the Schedules of Investments. Changes in economic conditions, including delinquencies and/or defaults on assets underlying these securities, can affect the value, income and/or liquidity of such positions.

11. CAPITAL SHARE TRANSACTIONS

Transactions in capital shares for each class were as follows:

	Year Ended December 31, 2018						Year Ended December 31, 2017
Emerging Markets Equity Strategies	Shares			Amount			Shares			Amount
Institutional
Shares sold		1,830,278		$	24,348,774			3,121,682		$	38,655,566
Shares issued in reinvestment of distributions		141,824			1,393,653			176,235			2,239,448
Shares redeemed		(4,226,030	)		(56,351,780	)		(489,870	)		(6,409,308	)
Net increase (decrease)		(2,253,928	)	$	(30,609,353	)		2,808,047		$	34,485,706
Investor A
Shares sold and automatic conversion of shares		104,545		$	1,267,654			1,156		$	14,501
Shares issued in reinvestment of distributions		24,353			229,396			51			647
Shares redeemed		(13,166	)		(152,072	)		(401	)		(5,000	)
Net increase		115,732		$	1,344,978			806		$	10,148
Investor C
Shares sold		4,716		$	59,783			717		$	8,381
Shares issued in reinvestment of distributions		1,728			16,514			37			466
Shares redeemed and automatic conversion of shares		(4,513	)		(51,994	)		(136	)		(1,757	)
Net increase		1,931		$	24,303			618		$	7,090

68 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Notes to Financial Statements  (continued)

	Year Ended December 31, 2018						Year Ended December 31, 2017
Emerging Markets Equity Strategies	Shares			Amount			Shares		Amount
Class K
Shares sold		—		$	—			—	$	—
Shares issued in reinvestment of distributions		150,569			1,418,357			—		—
Shares redeemed		—			—			—		—
Net increase		150,569			1,418,357			—	$	—
Total Net Increase (Decrease)		(1,985,696	)	$	(27,821,715	)		2,809,471	$	34,502,944

	Year Ended December 31, 2018						Year Ended December 31, 2017
Short-Term TIPS Bond Index	Shares			Amount			Shares			Amount
Institutional
Shares sold		181,524		$	1,786,148			330,131		$	3,329,789
Shares issued in reinvestment of distributions		3,746			36,973			4,788			47,841
Shares redeemed		(421,379	)		(4,155,121	)		(46,001	)		(460,837	)
Net increase (decrease)		(236,109	)	$	(2,332,000	)		288,918		$	2,916,793
Investor A
Shares sold		40,675		$	400,196			19,535		$	195,661
Shares issued in reinvestment of distributions		640			6,282			177			1,759
Shares redeemed		(13,026	)		(129,031	)		(183	)		(1,837	)
Net increase		28,289		$	277,447			19,529		$	195,583
Class K
Shares sold		73,458		$	718,634			1,036,739		$	10,459,300
Shares issued in reinvestment of distributions		909			8,946			4,069			40,947
Shares redeemed		(5,474	)		(53,843	)		(1,016,445	)		(10,245,619	)
Net increase		68,893			673,737			24,363		$	254,628
Total Net Increase (Decrease)		(138,927	)	$	(1,380,816	)		332,810		$	3,367,004

	Year Ended December 31, 2018						Year Ended December 31, 2017
Alternative Capital Strategies	Shares			Amount			Shares			Amount
Institutional
Shares sold		1,501,093		$	14,532,056			169,319		$	1,732,254
Shares issued in reinvestment of distributions		41,133			394,564			5,430			54,861
Shares redeemed		(752,661	)		(7,258,403	)		(145,840	)		(1,435,482	)
Net increase		789,565		$	7,668,217			28,909		$	351,633
Investor A
Shares sold and automatic conversion of shares		172,385		$	1,658,750			31,745		$	315,168
Shares issued in reinvestment of distributions		15,632			150,031			5,822			58,643
Shares redeemed		(44,790	)		(432,737	)		(146,815	)		(1,445,847	)
Net increase (decrease)		143,227		$	1,376,044			(109,248	)	$	(1,072,036	)
Investor C
Shares sold		1,298		$	12,422			2,614		$	26,456
Shares issued in reinvestment of distributions		380			3,648			162			1,623
Shares redeemed and automatic conversion of shares		(356	)		(3,424	)		(16,313	)		(162,704	)
Net increase (decrease)		1,322		$	12,646			(13,537	)	$	(134,625	)
Total Net Increase (Decrease)		934,114		$	9,056,907			(93,876	)	$	(855,028	)

As of December 31, 2018, shares of Funds owned by BlackRock HoldCo 2, Inc., an affiliate of the Funds, were as follows:

	Institutional		Investor A		Investor C		Class K
Emerging Markets Equity Strategies		7,540		7,530		7,379		732,192
Short-Term TIPS Bond Index		5,000		5,000		—		90,000
Alternative Capital Strategies		2,497,309		2,001		2,000		—

NOTESTO FINANCIAL STATEMENTS 69

Notes to Financial Statements  (continued)

12. REGULATIONS-X AMENDMENTS

On August 17, 2018, the SEC adopted amendments to certain disclosure requirements in Securities Act ReleaseNo. 33-10532,Disclosure Update and Simplification. The Funds have adopted the amendments pertinent to RegulationS-X in this shareholder report. The amendments impacted certain disclosure presentation on the Statements of Assets and Liabilities, Statements of Changes in Net Assets and Notes to the Financial Statements.

Prior year distribution information and undistributed net investment income in the Statements of Changes in Net Assets has been modified to conform to the current year presentation in accordance with the RegulationS-X changes.

Distributions for the year ended December 31, 2017 were classified as follows:

	Share Class	Net Investment Income			Net Realized Gain			Return of Capital
Emerging Markets Equity Strategies	I	$	—		$	(2,244,938	)	$	—
	A		—			(5,931	)		—
	C		—			(5,167	)		—
	K		—			(533,707	)		—
Short-Term TIPS Bond Index	I		(47,252	)		—			(991	)
	A		(2,451	)		—			(55	)
	K		(62,737	)		—			(1,123	)
Alternative Capital Strategies	I		(574,306	)		(512,698	)		—
	A		(31,783	)		(27,633	)		—
	C		(914	)		(1,263	)		—

Undistributed (distributions in excess of) net investment income as of December 31, 2017 is as follows:

	Undistributed (Distributions in Excess of) Net Investment Income
Emerging Markets Equity Strategies	$	131,093
Short-Term TIPS Bond Index		(131	)
Alternative Capital Strategies		2,680

13. SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were issued and has determined that there were no subsequent events requiring adjustment or additional disclosure in the financial statements.

70 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Report of Independent Registered Public Accounting Firm

To the Shareholders of BlackRock Emerging Markets Equity Strategies Fund, iShares Short-Term TIPS Bond Index Fund, and BlackRock Alternative Capital Strategies Fund and the Board of Trustees of BlackRock Funds^SM and BlackRock Funds^SM IV:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statements of assets and liabilities of BlackRock Emerging Markets Equity Strategies Fund and iShares Short-Term TIPS Bond Index Fund of BlackRock Funds^SM and BlackRock Alternative Capital Strategies Fund of BlackRock Funds^SM IV (the “Funds”), including the schedules of investments, as of December 31, 2018, the related statements of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Funds as of December 31, 2018, and the results of their operations for the year then ended, the changes in their net assets and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. The financial highlights for the periods indicated in the table below were audited by other auditors whose report dated February 24, 2017, expressed an unqualified opinion on those financial statements and financial highlights.

Fund	Financial Highlights
BlackRock Emerging Markets Equity Strategies Fund	For the period from February 29, 2016 (commencement of operations) through December 31, 2016
iShares Short-Term TIPS Bond Index Fund	For the period from February 16, 2016 (commencement of operations) through December 31, 2016
BlackRock Alternative Capital Strategies Fund	For the year ended December 31, 2016 and for the period from May 19, 2015 (commencement of operations) through December 31, 2015

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 audits 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 December 31, 2018, 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

February 26, 2019

We have served as the auditor of one or more BlackRock investment companies since 1992.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING  FIRM 71

Important Tax Information  (unaudited)

During the fiscal year ended December 31, 2018, the following information is provided with respect to the ordinary income distributions paid by the Funds:

	Payable Date(s)	Emerging Markets Equity Strategies			Short-Term TIPS Bond Index			Alternative Capital Strategies
Qualified Dividend Income for Individuals(a)	April 2018		—			—			4.39	%
	July 2018		13.61	%		—			2.51
	August 2018		—			—			2.21
	October 2018		—			—			2.21
	December 2018		13.06			—			2.21
Dividends Qualifying for the Dividend Received Deduction for Corporations(a)	January — December 2018		—			—			2.24
Foreign Source Income(b)	July 2018		22.34			—			—
Foreign Taxes Paid Per Share(c)	July 2018	$	0.013105						—
	December 2018	$	0.050931
Interest-Related Dividends and Qualified Short-Term Gains forNon-U.S. Residents(d)	April 2018		—			—			84.27
	July 2018		100.00	%		—			92.72
	August 2018		—			—			100.00
	October 2018		—			—			84.27
	December 2018		—			—			92.97
	January — December 2018		—			100	%		—
Federal Obligation Interest(e)	January — December 2018		—			99.52			—

^(a)  The Funds hereby designate the percentage indicated or the maximum amount allowable by law.

^(b)  Expressed as a percentage of the cash distributiongrossed-up for foreign taxes.

^(c)  The foreign taxes paid represent taxes incurred by the Fund on income received by the Fund from foreign sources. Foreign taxes paid may be included in taxable income with an offsetting deduction from gross income or may be taken as a credit for taxes paid to foreign governments. You should consult your tax advisor regarding the appropriate treatment of foreign taxes paid.

^(d)  Represents the portion of the taxable ordinary income dividends eligible for exemption from U.S. withholding tax for nonresident aliens and foreign corporations.

^(e)  The law varies in each state as to whether and what percentage of dividend income attributable to federal obligations is exempt from state income tax. We recommend that you consult your tax advisor to determine if any portion of the dividends you received is exempt from state income taxes.

Additionally, Alternative Capital Strategies distributed long-term capital gains of $0.212634118 per share to shareholders of record on August 20, 2018.

72 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Disclosure of Investment Advisory Agreement andSub-Advisory Agreement

The Board of Trustees (the “Board,” the members of which are referred to as “Board Members”) of BlackRock Funds IV (the “Trust”) met in person on May 17-18, 2018 (the “Organizational Meeting”) to consider the initial approval of the investment advisory agreement (the “Advisory Agreement”) between the Trust, on behalf of BlackRock Alternative Capital Strategies Fund (the “Fund”), a series of the Trust, and BlackRock Advisors, LLC (the “Manager”), the Trust’s investment advisor. The Board also considered the initial approval of the sub-advisory agreement (the “Sub-Advisory Agreement”) between the Manager and BlackRock International Limited (the “Sub-Advisor”), with respect to the Fund. The Manager and the Sub-Advisor are referred to herein as “BlackRock.” The Advisory Agreement and the Sub-Advisory Agreement are referred to herein as the “Agreements.”

On September 17, 2018, the Fund acquired the assets, subject to the liabilities, of BlackRock Alternative Capital Strategies Fund (the “Predecessor Fund”), a series of BlackRock Funds (the “Predecessor Trust”), through a reorganization (the “Reorganization”). The Fund has the same investment objectives, strategies and policies, portfolio management team and contractual arrangements, including the same contractual fees and expenses, as the Predecessor Fund. As a result of the Reorganization, the Fund adopted the performance and financial history of the Predecessor Fund. The Advisory Agreement is substantially similar to the advisory agreement (the “Predecessor Advisory Agreement”) between the Predecessor Trust, on behalf of the Predecessor Fund, and the Manager. Similarly, the Sub-Advisory Agreement is substantially similar to the sub-advisory agreement (the “Predecessor Sub-Advisory Agreement” and together with the Predecessor Advisory Agreement, the “Predecessor Agreements”) between the Manager and the Sub-Advisor, with respect to the Predecessor Fund.

Activities and Composition of the Board

On the date of the Organizational Meeting, the Board consisted of thirteen individuals, eleven of whom were not “interested persons” of the Trust as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Board Members”). The Board Members are responsible for the oversight of the operations of the Fund and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Board Members have retained independent legal counsel to assist them in connection with their duties. The Chair of the Board is an Independent Board Member. The Board has established five standing committees: an Audit Committee, a Governance and Nominating Committee, a Compliance Committee, a Performance Oversight and Contract Committee and an Executive Committee, each of which is chaired by an Independent Board Member and composed of Independent Board Members (except for the Executive Committee, which also has one interested Board Member).

The Agreements

Pursuant to the 1940 Act, the Board is required to consider the initial approval of the Agreements. In connection with this deliberative process, the Board assessed, among other things, the nature, extent and quality of the services to be provided to the Fund (and those provided to the Predecessor Fund) by BlackRock, BlackRock’s personnel and affiliates, including (as applicable): investment management; accounting, administrative and shareholder services; oversight of the Fund’s (and the Predecessor Fund’s) service providers; marketing and promotional services; risk management and oversight; legal and compliance services; and ability to meet applicable legal and regulatory requirements.

Board Considerations in Approving the Agreements

The Approval Process: At the Organizational Meeting, the Board reviewed materials relating to its consideration of the proposed Agreements. The Predecessor Agreements were most recently considered and approved by the board of trustees of the Predecessor Trust (the “Predecessor Board”) at in person meetings held on April 19, 2018 (the “April Meeting”) and May 17-18, 2018 (the “May Meeting”). The factors considered by the Board Members at the Organizational Meeting in connection with approval of the proposed Agreements were identical to the factors considered by them as members of the Predecessor Board at the April and May Meetings for the Predecessor Agreements. (Accordingly, references below to the “Board” mean both the Board and the Predecessor Board, and references below to the Board Members mean the members of both the Board and the Predecessor Board, unless the context requires otherwise.) These factors included, among other things: (a) the nature, extent and quality of the services to be provided by BlackRock (and those provided by BlackRock to the Predecessor Fund); (b) the investment performance of the Predecessor Fund as compared with a peer group of funds (“Performance Peers”) and other metrics, as applicable; (c) the advisory fee and the estimated cost of the services and estimated profits realized by BlackRock and its affiliates from their relationship with the Fund and the Predecessor Fund; (d) the sharing of potential economies of scale; (e) fall-out benefits to BlackRock and its affiliates as a result of BlackRock’s relationship with the Fund and the Predecessor Fund; and (f) other factors deemed relevant by the Board Members.

In determining whether to approve the Predecessor Agreements, the Board met with the relevant investment advisory personnel from BlackRock and considered all information it deemed reasonably necessary to evaluate the terms of the Predecessor Agreements. These meetings were considered by the Board in evaluating approval of the Agreements. The Board received materials in advance of the Organizational Meeting relating to its consideration of the Agreements, including, among other things, (a) fees and estimated expense ratios of the Fund and the fees and expense ratios of the Predecessor Fund in comparison to the fees and expense ratios of a peer group of funds as determined by Broadridge Financial Solutions, Inc. (“Broadridge”) (“Expense Peers”); (b) information regarding BlackRock’s economic outlook for the Predecessor Fund and its general investment outlook for the markets; (c) information regarding fees paid to service providers that are affiliates of BlackRock; and (d) information outlining the legal duties of the Board under the 1940 Act with respect to the consideration and approval of the Agreement. The Board also received information at prior Board meetings concerning compliance records and regulatory matters relating to BlackRock.

The Board also considered other matters it deemed important to the approval process, such as other payments to be made to BlackRock or its affiliates, securities lending and cash management, services related to the valuation and pricing of Fund portfolio holdings, and advice from independent legal counsel with respect to the review process and materials submitted for the Board’s review. The Board noted the willingness of BlackRock personnel to engage in open, candid discussions with the Board. The Board did not identify any particular information as determinative, and each Board Member may have attributed different weights to the various items considered.

A. Nature, Extent and Quality of the Services to be Provided by BlackRock: The Board, including the Independent Board Members, considered the nature, extent and quality of services to be provided by BlackRock, including the investment advisory services to be provided to the Fund and those provided to the Predecessor Fund and

DISCLOSUREOF INVESTMENT ADVISORY AGREEMENTAND SUB-ADVISORY AGREEMENT 73

Disclosure of Investment Advisory Agreement andSub-Advisory Agreement  (continued)

the resulting performance of the Predecessor Fund. Throughout the year, the Board Members compared Predecessor Fund performance to the performance of a comparable group of mutual funds, relevant benchmark, and performance metrics, as applicable. The Board met with BlackRock’s senior management personnel responsible for investment activities, including the senior investment officers, in connection with its evaluation of the Predecessor Fund. The Board also reviewed the materials provided by the Fund’s portfolio management team discussing the Predecessor Fund’s performance and the Fund’s investment objectives, strategies and outlook.

The Board considered, among other factors, with respect to BlackRock: the number, education and experience of investment personnel generally and the Fund’s portfolio management team; BlackRock’s research capabilities; investments by portfolio managers in the funds they manage; portfolio trading capabilities; use of technology; commitment to compliance; credit analysis capabilities; risk analysis and oversight capabilities; and the approach to training and retaining portfolio managers and other research, advisory and management personnel. The Board also considered BlackRock’s overall risk management program, including the continued efforts of BlackRock and its affiliates to address cybersecurity risks and the role of BlackRock’s Risk & Quantitative Analysis Group. The Board considered BlackRock’s compensation structure with respect to the Fund’s portfolio management team and BlackRock’s ability to attract and retain high-quality talent and create performance incentives that had been presented in connection with the Board’s evaluation of the Predecessor Agreements.

In addition to investment advisory services, the Board considered the quality of the administrative and other non-investment advisory services to be provided to the Fund (and those provided to the Predecessor Fund). The Board considered that BlackRock and its affiliates will provide the Fund (and provided the Predecessor Fund) with certain administrative, shareholder and other services (in addition to any such services provided to the Fund by third parties) and officers and other personnel as are necessary for the operations of the Fund. In particular, BlackRock and its affiliates provide the Fund with administrative services including, among others: (i) responsibility for disclosure documents, such as the prospectus, the summary prospectus (as applicable), the statement of additional information and periodic shareholder reports; (ii) oversight of daily accounting and pricing; (iii) responsibility for periodic filings with regulators; (iv) overseeing and coordinating the activities of other service providers including, among others, the Fund’s custodian, fund accountant, transfer agent, and auditor; (v) organizing Board meetings and preparing the materials for such Board meetings; (vi) providing legal and compliance support; (vii) furnishing analytical and other support to assist the Board in its consideration of strategic issues such as the merger, consolidation or repurposing of certain open-end funds; and (viii) performing administrative functions necessary for the operation of the Fund, such as tax reporting, expense management, fulfilling regulatory filing requirements, overseeing the Fund’s distribution partners, and shareholder call center and other services. The Board considered the structure and duties of BlackRock’s fund administration, shareholder services, and legal & compliance departments and considered BlackRock’s policies and procedures for assuring compliance with applicable laws and regulations.

B. The Investment Performance of the Predecessor Fund and BlackRock: The Board, including the Independent Board Members, also reviewed and considered the performance history of the Predecessor Fund. In connection with its review of the Predecessor Fund’s performance history, the Board had been provided with reports independently prepared by Broadridge, which included a comprehensive analysis of the Predecessor Fund’s performance as of December 31, 2017. Broadridge ranks funds in quartiles, ranging from first to fourth, where first is the most desirable quartile position and fourth is the least desirable. In connection with this review, the Board had received and reviewed information regarding the investment performance of the Predecessor Fund as compared to its Performance Peers and certain performance metrics.

In evaluating performance, the Board recognized that the performance data reflects a snapshot of a period as of a particular date and that selecting a different performance period could produce significantly different results. Further, the Board recognized that it is possible that long-term performance can be impacted by even one period of significant outperformance or underperformance, so that a single investment theme has the ability to affect long-term performance disproportionately.

The Board noted that for each of the one-year and since-inception periods reported, the Predecessor Fund ranked in the first quartile against its Performance Peers. In light of the Predecessor Fund’s outcome oriented objective, BlackRock believes that certain other performance metrics may be more appropriate than the Performance Peers, and the Board was provided with a comparison of Predecessor Fund performance relative to these metrics. Under these metrics, for the one-year period the Predecessor Fund outperformed its total return target but for the since-inception period, the Predecessor Fund underperformed its total return target. The total return target is designed to be based on a three- to five-year time horizon, but in this case is being viewed over a shorter time horizon. The overall risk of the Predecessor Fund, as measured by the standard deviation of returns, was below its target range for the one-year and since-inception periods.

C. Consideration of the Advisory/Management Fees and the Estimated Cost of the Services to be Provided and Estimated Profits Realized by BlackRock and its Affiliates from their Relationship with the Fund and the Predecessor Fund: In connection with the initial approval of the Agreement, the Board, including the Independent Board Members, considered that the Fund’s proposed contractual management fee rate was identical to the Predecessor Fund’s contractual management fee rate. The contractual management fee rate represents a combination of the advisory fee and any administrative fees, before taking into account any reimbursements or fee waivers. The Board also considered that the Fund’s estimated total net expense ratio was identical to the Predecessor Fund’s total expense ratio. The Board also considered the comparison of the Predecessor Fund’s actual and contractual management fee rate, to those of its Expense Peers. The total expense ratio represents a fund’s total net operating expenses, including any 12b-1 or non 12b-1 service fees. The total expense ratio gives effect to any expense reimbursements or fee waivers that benefit a fund, and the actual management fee rate gives effect to any management fee reimbursements or waivers that benefit a fund. The Board considered the services provided and the fees charged by BlackRock and its affiliates to other types of clients with similar investment mandates, as applicable, including institutional accounts and sub-advised mutual funds (including mutual funds sponsored by third parties) that had been presented in connection with its evaluation of the Predecessor Agreements.

The Board considered BlackRock’s profitability methodology including an estimated profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to the Predecessor Fund, which would be the same services to be provided to the Fund. The Board reviewed BlackRock’s estimated profitability with respect to the Predecessor Fund and other funds the Board currently oversees for the year ended December 31, 2017 compared to available aggregate estimated profitability data provided for the prior two years. The Board considered, in connection with its review of the Predecessor Agreements, BlackRock’s estimated profitability with respect to certain other U.S. fund complexes managed by the Manager and/or its affiliates including BlackRock’s assumptions and methodology of allocating expenses in the estimated profitability analysis and the inherent limitations in allocating costs among various advisory products. The Board recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, precision of expense allocations and business mix. As a result, calculating and comparing profitability at individual fund levels is difficult.

74 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Disclosure of Investment Advisory Agreement andSub-Advisory Agreement  (continued)

The Board noted that, in general, individual fund or product line profitability of other advisors is not publicly available. In connection with its review of the Predecessor Agreements, the Board reviewed BlackRock’s operating margin, in general, compared to that of certain other publicly-traded asset management firms and considered the differences between BlackRock and these other firms, including the contribution of technology at BlackRock, BlackRock’s expense management, and the relative product mix.

In addition, the Board considered the estimated cost of the services to be provided to the Fund based on its review of the estimated cost of the services provided to the Predecessor Fund by BlackRock, and BlackRock’s and its affiliates’ estimated profits relating to the management and distribution of the Predecessor Fund and the other funds advised by BlackRock and its affiliates. As part of this analysis, the Board had reviewed BlackRock’s methodology in allocating its costs of managing the Predecessor Fund, to the Predecessor Fund. The Board considered whether BlackRock has the financial resources necessary to attract and retain high quality investment management personnel to perform its obligations under the Agreements and to continue to provide the high quality of services that is expected by the Board Members. The Board further considered factors including but not limited to BlackRock’s commitment of time, assumption of risk, and liability profile in servicing the Fund and the Predecessor Fund in contrast to what is required of BlackRock with respect to other products with similar investment mandates across the open-end fund, exchange-traded fund, closed-end fund, sub-advised mutual fund, separately managed account, collective investment trust, and institutional separate account product channels, as applicable.

The Board noted that the Predecessor Fund’s contractual management fee rate ranked in the first quartile, and that the actual management fee rate and total expense ratio each ranked in the first quartile, relative to the Predecessor Fund’s Expense Peers. The Board also noted that the Fund has an advisory fee arrangement that includes breakpoints that adjust the fee rate downward as the size of the Fund increases above certain contractually specified levels. The Board further noted that BlackRock and the Board have contractually agreed to a cap on the Fund’s total expenses as a percentage of the Fund’s average daily net assets on a class-by-class basis.

D. Economies of Scale: The Board, including the Independent Board Members, considered the extent to which economies of scale might be realized as the assets of the Fund increase, including the existence of fee waivers and/or expense caps, as applicable, noting that any contractual fee waivers and expense caps had been approved by the Board. The Board also considered the extent to which the Predecessor Fund benefited from such economies in a variety of ways and whether there should be changes in the advisory fee rate or breakpoint structure in order to enable the Fund to more fully participate in these economies of scale. The Board considered the Predecessor Fund’s asset levels and, in light of those asset levels, whether the current fee schedule was appropriate for the Fund. In its consideration, the Board Members took into account the existence of any expense caps and further considered the continuation and/or implementation, as applicable, of such caps.

E. Other Factors Deemed Relevant by the Board Members: The Board, including the Independent Board Members, also took into account other potential ancillary or “fall-out” benefits that BlackRock or its affiliates may derive from BlackRock’s respective relationships with the Fund, based on its review of the Predecessor Agreement, including both tangible and intangible benefits, such as BlackRock’s ability to leverage its investment professionals who manage other portfolios and risk management personnel, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates as service providers to the Fund (and the Predecessor Fund), including for administrative, distribution, securities lending and cash management services. The Board also considered BlackRock’s overall operations and its efforts to expand the scale of, and improve the quality of, its operations. The Board also considered that, subject to applicable law, BlackRock may use and benefit from third party research obtained by soft dollars generated by certain registered fund transactions to assist in managing all or a number of its other client accounts.

In connection with its consideration of the Agreements, the Board also considered information regarding BlackRock’s brokerage and soft dollar practices and reports from BlackRock which included information on brokerage commissions and trade execution practices that it had received in consideration of the Predecessor Agreement.

The Board considered the competitive nature of the open-end fund marketplace, and that shareholders are able to redeem their Fund shares if they believe that the Fund’s fees and expenses are too high or if they are dissatisfied with the performance of the Fund.

Conclusion

Following discussion, the Board, including the Independent Board Members, approved the Advisory Agreement between the Manager and the Trust, on behalf of the Fund, for a two-year term beginning on the effective date of the Advisory Agreement, and the Sub-Advisory Agreement between the Manager and the Sub-Advisor, with respect to the Fund, for a two-year term beginning on the effective date of the Sub-Advisory Agreement. Based upon its evaluation of all of the aforementioned factors in their totality, as well as other information, the Board, including the Independent Board Members, was satisfied that the terms of the Agreements were fair and reasonable and in the best interest of the Fund and its shareholders. In arriving at its decision to approve the Agreements, the Board did not identify any single factor or group of factors as all-important or controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were also assisted by the advice of independent legal counsel in making this determination.

DISCLOSUREOF INVESTMENT ADVISORY AGREEMENTAND SUB-ADVISORY AGREEMENT 75

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
Rodney D. Johnson 1941	Chair of the Board (d) and Trustee (Since 2007)	President, Fairmount Capital Advisors, Inc. from 1987 to 2013; Member of the Archdiocesan Investment Committee of the Archdiocese of Philadelphia from 2004 to 2012; Director, The Committee of Seventy (civic) from 2006 to 2012; Director, Fox Chase Cancer Center from 2004 to 2011; Director, The Mainstay(non-profit) since 2016.	24 RICs consisting of 138 Portfolios	None
Mark Stalnecker 1951	Chair Elect of the Board (Since 2018) (d) 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.	24 RICs consisting of 138 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.	24 RICs consisting of 138 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.	24 RICs consisting of 138 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.	24 RICs consisting of 138 Portfolios	None
Cynthia A. Montgomery 1952	Trustee (Since 2007)	Professor, Harvard Business School since 1989; Director, McLean Hospital from 2005 to 2012.	24 RICs consisting of 138 Portfolios	Newell Rubbermaid, Inc. (manufacturing)
Joseph P. Platt 1947	Trustee (Since 2007)	General Partner, Thorn Partners, LP (private investments) since 1998; Director, WQED Multi-Media (public broadcastingnot-for-profit) since 2001; Chair, Basic Health International(non-profit) since 2015.	24 RICs consisting of 138 Portfolios	Greenlight Capital Re, Ltd. (reinsurance company); Consol Energy Inc.
Robert C. Robb, Jr. 1945	Trustee (Since 2007)	Partner, Lewis, Eckert, Robb and Company (management and financial consulting firm) since 1981 and Principal since 2010.	24 RICs consisting of 138 Portfolios	None

76 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

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
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.	24 RICs consisting of 138 Portfolios	None
Claire A. Walton 1957	Trustee (Since 2016)	Chief Operating Officer and Chief Financial Officer of Liberty Square Asset Management, LP from 1998 to 2015; General Partner of Neon Liberty Capital Management, LLC since 2003; Director, Boston Hedge Fund Group from 2009 to 2018; Director, Woodstock Ski Runners since 2013; Director, Massachusetts Council on Economic Education from 2013 to 2015.	24 RICs consisting of 138 Portfolios	None
Frederick W. Winter 1945	Trustee (Since 2007)	Director, Alkon Corporation since 1992; Dean Emeritus of the Joseph M. Katz School of Business, University of Pittsburgh, Dean and Professor from 1997 to 2005, Professor until 2013.	24 RICs consisting of 138 Portfolios	None
Interested Trustees (d)(a)(e)
Name Year of Birth (b)	Position(s) Held (Length of Service) (c)	Principal Occupation(s) During Past Five Years	Number of BlackRock-Advised Registered Investment Companies (“RICs”) Consisting of Investment Portfolios (“Portfolios”) Overseen	Public Company and Other Investment Company Directorships Held During Past Five Years
Robert Fairbairn 1965	Trustee (Since 2018)	Senior Managing Director of BlackRock, Inc. since 2010; oversees BlackRock’s Strategic Partner Program and Strategic Product Management Group; Member of BlackRock’s Global Executive and Global Operating Committees;Co-Chair of BlackRock’s Human Capital Committee; Member of the Board of Managers of BlackRock Investments, LLC since 2011; Global Head of BlackRock’s Retail and iShares® businesses from 2012 to 2016.	127 RICs consisting of 304 Portfolios	None
John M. Perlowski 1964	Trustee (Since 2015) and 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.	127 RICs consisting of 304 Portfolios	None
(a) The address of each Trustee is c/o BlackRock, Inc., 55 East 52nd Street, New York, NY 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 acase-by-case basis, as appropriate. The Board has approved extending the mandatory retirement age for Rodney D. Johnson until December 31, 2018.
(c) Following the combination of Merrill Lynch Investment Managers, L.P. (“MLIM”) and BlackRock, Inc. (“BlackRock”) in September 2006, the various legacy MLIM and legacy BlackRock fund boards were realigned and consolidated into three new fund boards in 2007. As a result, although the chart shows certain Independent Trustees as joining the Board in 2007, those Independent Trustees first became members of the boards of other legacy MLIM or legacy BlackRock funds as follows: Rodney D. Johnson, 1995; Cynthia A. Montgomery, 1994; Joseph P. Platt, 1999; Robert C. Robb, Jr., 1999; Kenneth L. Urish, 1999; and Frederick W. Winter, 1999.
(d) Mr. Stalnecker was approved as Chair Elect of the Board effective January 1, 2018. It is expected that, effective January 1, 2019, Mr. Stalnecker will assume the position of Chair of the Board and Mr. Johnson will retire as Chair of the Board.
(e) Mr. Fairbairn and Mr. Perlowski are both “interested persons,” as defined in the 1940 Act, of the Trust based on their positions with BlackRock and its affiliates. Mr. Fairbairn and Mr. Perlowski are also board members of the BlackRock Equity-Bond Complex and the BlackRockClosed-End Complex.

TRUSTEEAND OFFICER INFORMATION 77

Trustee and Officer Information  (continued)

Officers Who Are Not Trustees (a)
Name Year of Birth (b)	Position(s) Held (Length of Service) (c)	Principal Occupation(s) During Past Five Years
Thomas Callahan 1968	Vice President (Since 2016)	Managing Director of BlackRock, Inc. since 2013; Head of BlackRock’s Global Cash Management Business since 2016;Co-Head of the Global Cash Management Business from 2014 to 2016; Deputy Head of the Global Cash Management Business from 2013 to 2014; Member of the Cash Management Group Executive Committee since 2013; Chief Executive Officer of NYSE Liffe U.S. from 2008 to 2013.
Jennifer McGovern 1977	Vice President (Since 2014)	Managing Director of BlackRock, Inc. since 2016; Director of BlackRock, Inc. from 2011 to 2015; Head of Product Structure and Oversight for BlackRock’s U.S. Wealth Advisory Group since 2013.
Neal J. Andrews 1966	Chief Financial Officer (Since 2007)	Managing Director of BlackRock, Inc. since 2006.
Jay M. Fife 1970	Treasurer (Since 2007)	Managing Director of BlackRock, Inc. since 2007.
Charles Park 1967	Chief Compliance Officer (Since 2014)	Anti-Money Laundering Compliance Officer for the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and theClosed-End Complex from 2014 to 2015; Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and theClosed-End 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 theBFA-advised iShares® exchange traded funds since 2006; Chief Compliance Officer for BlackRock Asset Management International Inc. since 2012.
John MacKessy 1972	Anti-Money Laundering Compliance Officer (Since 2018)	Director of BlackRock, Inc. since 2017; Global Head of Anti-Money Laundering at BlackRock , Inc. since 2017; Director of AML Monitoring and Investigations Group of Citibank from 2015 to 2017; Global Anti-Money Laundering and Economic Sanctions Officer for MasterCard from 2011 to 2015.
Benjamin Archibald 1975	Secretary (Since 2012)	Managing Director of BlackRock, Inc. since 2014; Director of BlackRock, Inc. from 2010 to 2013; Secretary of the iShares® exchange traded funds since 2015; Secretary of the BlackRock-advised mutual funds since 2012.
(a) The address of each Officer is c/o BlackRock, Inc., 55 East 52nd Street, New York, NY 10055.
(b) Officers of the Trust serve at the pleasure of the Board.
(c) Length of service includes service in such capacity for the Predecessor Trust.

Further information about the Trust’s Officers and Trustees is available in the Trust’s Statement of Additional Information, which can be obtained without charge by calling (800)441-7762.

At a special meeting of shareholders held on November 21, 2018, each Fund’s shareholders elected Trustees who took office on January 1, 2019. For BlackRock Alternative Capital Strategies Fund, the newly elected Trustees include two former Trustees, eight individuals who served as directors/trustees of the funds in the BlackRockClosed-End Complex and one individual who served as a director/trustee of the funds in the BlackRock Equity-Bond Complex. For BlackRock Emerging Markets Equity Strategies Fund and iShares Short-Term TIPS Bond Index Fund, the newly elected Trustees include ten current Trustees and five individuals who served as directors/trustees of the funds in the BlackRock Equity-Bond Complex. Information regarding the individuals who began serving as Trustees effective January 1, 2019 can be found in the proxy statement for the special meeting of shareholders, which is available on the SEC’s EDGAR Database at http://www.sec.gov.

Investment Adviser and Administrator^(a)

BlackRock Advisors, LLC

Wilmington, DE 19809

Sub-Advisers

BlackRock International Limited^(a)

Edinburgh, EH3 8BL

United Kingdom

BlackRock Asset Management

North Asia Limited^(b)

Hong Kong

BlackRock Fund Advisors^(c)

San Francisco, CA 94105

Accounting Agent and Custodian

State Street Bank and Trust Company

Boston, MA 02111

Distributor

BlackRock Investments, LLC

New York, NY 10022

Transfer Agent

BNY Mellon Investment Servicing (US) Inc.

Wilmington, DE 19809

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

Boston, MA 02116

Legal Counsel

Sidley Austin LLP

New York, NY 10019

Address of the Funds

100 Bellevue Parkway

Wilmington, DE 19809

^(a)  For BlackRock Alternative Capital Strategies Fund and BlackRock Emerging Markets Equity Strategies Fund.

^(b)  For BlackRock Emerging Markets Equity Strategies Fund.

^(c)  For iShares Short-Term TIPS Bond Index Fund.

78 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Additional Information

Proxy Results

A Special Meeting of Shareholders was held on November 21, 2018 for shareholders of record on September 24, 2018, to elect a Board of Trustees of the Trust. The newly elected Trustees will take office effective January 1, 2019.

Shareholders approved the Trustees * of BlackRock Funds^SM IV with voting results as follows:

	Votes For		Votes Withheld
Michael J. Castellano		354,534,836		508,547
Richard E. Cavanagh		354,482,594		560,789
Cynthia L. Egan		354,528,196		515,187
Frank J. Fabozzi		354,532,665		510,718
Robert Fairbairn		354,502,863		540,520
Henry Gabbay		354,491,732		551,651
R. Glenn Hubbard		354,496,888		546,495
W. Carl Kester		354,487,887		555,496
Catherine A. Lynch		354,524,111		519,272
John M. Perlowski		354,492,938		550,445
Karen P. Robards		354,575,033		468,351

* Denotes [Fund/Trust/Corporation/Master LLC]-wide proposal and voting results.

The above Trustees, referred to as the BlackRock Fixed-Income Board, have also been elected to serve as trustees for other BlackRock-advisednon-index fixed-income mutual funds and all of the BlackRock-advisedclosed-end funds.

Shareholders approved the Trustees * of BlackRock Funds^SM with voting results as follows:

	Votes For		Votes Withheld
Bruce R. Bond		1,194,453,855		13,902,348
Susan J. Carter		1,196,552,121		11,804,082
Collette Chilton		1,196,528,363		11,827,840
Neil A. Cotty		1,196,166,120		12,190,083
Robert Fairbairn		1,193,957,290		14,398,913
Lena G. Goldberg		1,196,028,565		12,327,638
Robert M. Hernandez		1,194,378,100		13,978,103
Henry R. Keizer		1,195,228,758		13,127,445
Cynthia A. Montgomery		1,196,372,720		11,983,483
Donald C. Opatrny		1,195,869,848		12,486,356
John M. Perlowski		1,193,999,184		14,357,019
Joseph P. Platt		1,195,764,828		12,591,375
Mark Stalnecker		1,195,994,960		12,361,243
Kenneth L. Urish		1,195,716,210		12,639,993
Claire A. Walton		1,196,904,200		11,452,003

* Denotes Trust -wide proposal and voting results.

The above Trustees, referred to as the BlackRock Multi-Asset Board, have also been elected to serve as trustees for other BlackRock-advised equity, multi-asset, index and money market funds.

General Information

Householding

The Funds will mail only one copy of shareholder documents, including prospectuses, annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please call the Funds at (800) 441-7762.

Availability of Quarterly Schedule of Investments

The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ FormsN-Q are available on the SEC’s website at http://www.sec.gov. The Funds’ Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762.

ADDITIONAL INFORMATION 79

Additional Information  (continued)

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available upon request and without charge (1) by calling (800) 441-7762; (2) athttp://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.

Availability of Proxy Voting Record

Information about how the Funds voted proxies relating to securities held in the Funds’ portfolios during the most recent 12-month period ended June 30 is available upon request and without charge (1) athttp://www.blackrock.com or by calling (800) 441-7762 and (2) on the SEC’s website at http://www.sec.gov.

BlackRock’s Mutual Fund Family

BlackRock offers a diverse lineup of open-end mutual funds crossing all investment styles and managed by experts in equity, fixed-income and tax-exempt investing. Visithttp://www.blackrock.com for more information.

Shareholder Privileges

Account Information

Call us at (800) 441-7762 from 8:00 AM to 6:00 PM ET on any business day to get information about your account balances, recent transactions and share prices. You can also reach us on the Web athttp://www.blackrock.com.

Automatic Investment Plans

Investor Class shareholders who want to invest regularly can arrange to have $50 or more automatically deducted from their checking or savings account and invested in any of the BlackRock funds.

Systematic Withdrawal Plans

Investor Class shareholders can establish a systematic withdrawal plan and receive periodic payments of $50 or more from their BlackRock funds, as long as their account balance is at least $10,000.

Retirement Plans

Shareholders may make investments in conjunction with Traditional, Rollover, Roth, Coverdell, Simple IRAs, SEP IRAs and 403(b) Plans.

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.

80 2018 BLACKROCK ANNUAL REPORTTO SHAREHOLDERS

Glossary of Terms Used in this Report

Currency
CAD	Canadian Dollar
SGD	Singapore Dollar
USD	U.S. Dollar

Portfolio Abbreviations
ADR	American Depositary Receipts
EURIBOR	Euro Interbank Offered Rate
GDR	Global Depositary Receipt
HIBOR	Hong Kong Interbank Offered Rate
JIBAR	Johannesburg Interbank Average Rate
LIBOR	London Interbank Offered Rate
NVDR	Non-voting Depository Receipts
OTC	Over-the-Counter
PCL	Public Company Limited
SIBOR	Singapore Interbank Offered Rate
STIBOR	Stockholm Interbank Offered Rate

GLOSSARYOF TERMS USEDINTHIS REPORT 81

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 a Fund unless preceded or accompanied by the Fund’s current prospectus. Past performance results shown in this report should not be considered a representation of future performance. Investment returns and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are as dated and are subject to change.

STRAT-12/18-AR

Item 2 –	Code of Ethics – The registrant (or the “Fund”) has adopted a code of ethics, as of the end of the period covered by this report, applicable to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. During the period covered by this report, the code of ethics was amended to update certain information and to make othernon-material changes. During the period covered by this report, there have been no waivers granted under the code of ethics. The registrant undertakes to provide a copy of the code of ethics to any person upon request, without charge, who calls1-800-441-7762.
Item 3 –	Audit Committee Financial Expert – The registrant’s board of directors (the “board of directors”), has determined that (i) the registrant has the following audit committee financial expert serving on its audit committee and (ii) each audit committee financial expert is independent:
	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.
Item 4 –	Principal Accountant Fees and Services
	The following table presents fees billed by 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     End	Current     Fiscal Year     End	Previous     Fiscal Year     End	Current     Fiscal Year     End	Previous     Fiscal Year     End	Current     Fiscal Year     End	Previous     Fiscal Year     End
BlackRock Systematic Multi-Strategy Fund (Formerly BlackRock Alternative Capital Strategies Fund)	$65,688	$65,688	$0	$0	$21,200	$20,638	$0	$0

The following table presents fees billed by D&T that were required to be approved by the registrant’s audit committee (the “Committee”) for services that relate directly to the operations or financial reporting of the Fund and that are rendered on behalf of BlackRock Advisors, LLC (the “Investment Adviser” or “BlackRock”) and entities controlling, controlled by, or under common control with BlackRock (not including anysub-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”):

	Current Fiscal Year End	Previous  Fiscal Year End
(b) Audit-Related Fees1	$0	$0

2

(c) Tax Fees2	$0	$0
(d) All Other Fees3	$2,274,000	$2,129,000

¹ The nature of the services includes assurance and related services reasonably related to the performance of the audit or review of financial statements not included in Audit Fees, including accounting consultations, agreed-upon procedure reports, attestation reports, comfort letters,out-of-pocket expenses and internal control reviews not required by regulators.

² The nature of the services includes tax compliance and/or tax preparation, including services relating to the filing or amendment of federal, state or local income tax returns, regulated investment company qualification reviews, taxable income and tax distribution calculations.

³Non-audit fees of $2,274,000 and $2,129,000 for the current fiscal year and previous fiscal year, respectively, were paid to the Fund’s principal accountant in their entirety by BlackRock, in connection with services provided to the Affiliated Service Providers of the Fund and of certain other funds sponsored and advised by BlackRock or its affiliates for a service organization review and an accounting research tool subscription. These amounts represent aggregate fees paid by BlackRock and were not allocated on a per fund basis.

(e)(1) Audit CommitteePre-Approval Policies and Procedures:

The Committee has adopted policies and procedures with regard to thepre-approval of services. Audit, audit-related and tax compliance services provided to the registrant on an annual basis require specificpre-approval by the Committee. The Committee also must approve othernon-audit services provided to the registrant and thosenon-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 thesenon-audit services that the Committee believes are (a) consistent with the SEC’s auditor independence rules and (b) routine and recurring services that will not impair the independence of the independent accountants may be approved by the Committee without consideration on a specificcase-by-case basis (“generalpre-approval”). The term of any generalpre-approval is 12 months from the date of thepre-approval, unless the Committee provides for a different period. Tax or othernon-audit services provided to the registrant which have a direct impact on the operations or financial reporting of the registrant will only be deemedpre-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 thepre-approved cost levels will require specificpre-approval by the Committee, as will any other services not subject to generalpre-approval (e.g., unanticipated but permissible services). The Committee is informed of each service approved subject to generalpre-approval at the next regularly scheduledin-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 permittednon-audit services, including services exceedingpre-approved cost levels.

(e)(2) None of the services described in each of Items 4(b) through (d) were approved by the Committee pursuant to the de minimus exception in paragraph (c)(7)(i)(C) of Rule2-01 of RegulationS-X.

(f) Not Applicable

(g) The aggregatenon-audit fees, defined as the sum of the fees shown under “Audit-Related Fees,” “Tax Fees” and “All Other Fees,” paid to the accountant for services rendered by the accountant to the registrant, the Investment Adviser and the Affiliated Service Providers were:

Entity Name	Current Fiscal Year End	Previous Fiscal Year End
BlackRock Systematic Multi-	$21,200	$20,638

3

Strategy Fund) (Formerly BlackRock Alternative Capital Strategies Fund)

Additionally, the amounts billed by D&T in connection with services provided to the Affiliated Service Providers of the Fund and of other funds sponsored and advised by BlackRock or its affiliates during the current and previous fiscal years for a service organization review and an accounting research tool subscription were:

Current Fiscal Year End	Previous Fiscal Year End
$2,274,000	$2,129,000

These amounts represent aggregate fees paid by BlackRock and were not allocated on a per fund basis.

(h) The Committee has considered and determined that the provision ofnon-audit services that were rendered to the Investment Adviser and the Affiliated Service Providers that were notpre-approved pursuant to paragraph (c)(7)(ii) of Rule2-01 of RegulationS-X is compatible with maintaining the principal accountant’s independence.

Item 5  –	Audit Committee of Listed Registrants – Not Applicable
Item 6  –	Investments
	(a)The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this Form.
	(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous FormN-CSR filing.
Item 7  –	Disclosure of Proxy Voting Policies and Procedures forClosed-End Management Investment Companies – Not Applicable
Item 8  –	Portfolio Managers ofClosed-End Management Investment Companies – Not Applicable
Item 9  –	Purchases of Equity Securities byClosed-End Management Investment Company and Affiliated Purchasers – Not Applicable
Item 10 –	Submission of Matters to a Vote of Security Holders – There have been no material changes to these procedures.
Item 11 –	Controls and Procedures
	(a) The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule30a-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 Rule30a-3(b) under the 1940 Act and Rule 15d-15(b) under the Securities Exchange Act of 1934, as amended.

4

	(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12 –	Disclosure of Securities Lending Activities forClosed-End Management Investment Companies – Not Applicable to the registrant.
Item 13 –	Exhibits attached hereto
	(a)(1) Code of Ethics – See Item 2
	(a)(2) Certifications – Attached hereto
	(a)(3) Not Applicable
	(a)(4) Not Applicable
	(b) Certifications – Attached hereto

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 IV
By:	/s/ John M. Perlowski
	John M. Perlowski
	Chief Executive Officer (principal executive officer) of
	BlackRock Funds IV
Date: March 8, 2019

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ John M. Perlowski
	John M. Perlowski
	Chief Executive Officer (principal executive officer) of
	BlackRock Funds IV
Date: March 8, 2019

By:	/s/ Neal J. Andrews
	Neal J. Andrews
	Chief Financial Officer (principal financial officer) of
	BlackRock Funds IV
Date: March 8, 2019

6